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Monday, May 31, 2021

RBI Says Banks Can’t Quote 2018 Circular to Restrict Crypto Transactions - Yahoo Finance

In a relief for the crypto community, the Reserve Bank of India (RBI) issued a clarification on Monday stating the commercial banks cannot quote its now-invalid April 2018 crypto banking ban to deny services to customers involved in digital assets dealings.

“It has come to our attention through media reports that certain banks/regulated entities have cautioned their customers against dealing in virtual currencies by making a reference to the RBI circular dated April 06, 2018,” the RBI said in a circular released Monday. “Such references to the above circular by banks/regulated entities are not in order as this circular was set aside by the Hon’ble Supreme Court on March 4, 2020.”

“As such, in view of the order of the Hon’ble Supreme Court, the circular is no longer valid from the date of the Supreme Court judgement, and therefore cannot be cited or quoted from,” the statement added.

Related: India’s HDFC Bank Calls Bitcoin a Fad as Exchanges Mull Legal Fight Over Restrictions

The RBI’s clarification comes amid reports that country’s top lenders – State Bank of India and HDFC Bank – are sending reports to certain clients, inquiring about their virtual currency transactions and warning of cancellation or suspension of their cards, citing RBI’s 2018 circular, which prohibited lenders from serving crypto exchanges,

However, the Supreme Court quashed the banking ban in March 2020, bringing cheer to Indian investors and local exchanges. Even so, in recent weeks, several private lenders have shut down payment gateways to merchants involved in cryptocurrency dealings, causing disruption at local exchanges.

Also read: India’s HDFC Bank Calls Bitcoin a Fad as Exchanges Mull Legal Fight Over Restrictions

The RBI’s latest statement only makes clear that the central bank hasn’t asked lenders to stop providing services to exchanges. It doesn’t explicitly ask banks to restore services to crypto exchanges and says lenders should ensure necessary compliance.

Related: Ripple to Deliver First Real-Time Payments From Oman to India Using Blockchain

“Banks, as well as other entities addressed above, may, however, continue to carry out customer due diligence processes in line with regulations governing standards for Know Your Customer (KYC), Anti-Money Laundering (AML), Combating of Financing of Terrorism (CFT) and obligations of regulated entities under Prevention of Money Laundering Act, (PMLA), 2002 in addition to ensuring compliance with relevant provisions under Foreign Exchange Management Act (FEMA) for overseas remittances,” the circular said.

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Asia-Pacific stocks mixed; private survey shows Chinese factory activity expanding in May - CNBC

SINGAPORE — Shares in major Asia-Pacific markets were mixed in Tuesday trade, as investors reacted to the release of a private survey on Chinese manufacturing activity in May.

Mainland Chinese stocks were mixed by the afternoon, with the Shanghai composite down 0.11% and the Shenzhen component fractionally higher. Hong Kong's Hang Seng index rose 0.43%.

The Caixin/Markit manufacturing Purchasing Managers' Index (PMI) for May came in at 52, higher than expectations for a reading of 51.9 by analysts in a Reuters poll. The figure for May also compared against April's reading of 51.9.

The official manufacturing PMI for May, released Monday, came in 51.0 — slightly lower than analyst expectations for a reading of 51.1 in a Reuters poll.

PMI readings above 50 represent expansion while those below that level signify contraction. PMI readings are sequential and represent month-on-month expansion or contraction.

Mixed Asia-Pacific markets

Japan's Nikkei 225 slipped sat below the flatline in afternoon trade while the Topix index edged 0.15% higher. South Korea's Kospi gained 0.58%.

Shares in Australia slipped, with the S&P/ASX 200 declining fractionally. The Reserve Bank of Australia on Tuesday announced its decision to hold steady on its current policy settings, including keeping the cash rate at 0.1%.

MSCi's broadest index of Asia-Pacific shares outside Japan rose 0.43%.

Over in Southeast Asia, the FTSE Bursa Malaysia KLCI Index slipped around 0.2%. Malaysia's prime minister on Monday announced an additional 40 billion ringgit (about $9.7 billion) stimulus package, just hours before stricter lockdown measures to curb the Covid spread in the country were set to kick in.

Oil prices jump

Oil prices were higher in the afternoon of Asia trading hours, with international benchmark Brent crude futures up 1.27% to $70.20 per barrel. U.S. crude futures advanced 1.96% to $67.62 per barrel.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 89.803 — falling below the 90 level again.

The Japanese yen traded at 109.49 per dollar, stronger than levels above 110 against the greenback seen late last week. The Australian dollar changed hands at $0.7741, still below levels above $0.776 seen last week.

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Asia-Pacific stocks mixed; private survey shows Chinese factory activity expanding in May - CNBC
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China Takes Its Most Visible Measure Yet to Curb Yuan's Gain - Bloomberg Markets and Finance

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China Takes Its Most Visible Measure Yet to Curb Yuan's Gain - Bloomberg Markets and Finance
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KKR and CD&R Close to $4.7 Billion Deal to Buy Out Cloudera - Yahoo Finance

Bloomberg

China Huarong’s Journey From Safe Bet to Bad News: A Timeline

(Bloomberg) -- It’s nearly two months since turbulence erupted around China Huarong Asset Management Co.At the end of March, its 4% perpetual dollar bond was trading at 102 cents on the dollar as investors figured the January execution of former chairman Lai Xiaomin for bribery put a line under past wayward behavior. But the failure of the company to release 2020 results by a March 31 deadline, and a subsequent report by mainland media Caixin that the firm will restructure, sparked weeks of turmoil. The same bond is now at 57 cents.The heart of the matter is whether the central government will rescue a state-owned company that’s integral to the smooth running of the financial system. While there are signs Beijing wants to ensure China Huarong can repay its debts on time, uncertainty prevails.Here’s a look at the key events for China Huarong:May 28The company has wired funds to repay $978 million of notes maturing within the following week, according to Bloomberg News, the biggest bond payment since the 2020 results delay.May 27Liang Qiang, who currently heads another bad-debt manager, is on track to become president of China Huarong, reports Bloomberg News.May 24China Huarong dollar bonds climb after the managing editor of Caixin Media wrote in an opinion piece that the asset manager is “nowhere near” defaulting on its more than $20 billion of offshore notes.May 21Some of China Huarong’s thinly traded onshore bonds slump after having held up better than the company’s dollar-denominated notes, signaling broadening concern about the firm’s financial health.May 18China Huarong has transferred funds to repay a $300 million note maturing May 20, Bloomberg News reports, the first dollar bond to come due since the delayed 2020 results. Prices for the firm’s dollar bonds slump earlier in the day after the New York Times reports China is planning an overhaul that would inflict “significant losses” on both domestic and foreign China Huarong bondholders.May 17The company has reached funding agreements with state-owned banks to ensure it can repay debt through at least the end of August, by which time China Huarong aims to have completed its 2020 financial statements, according to a Bloomberg News report. That as at least two of its onshore bonds see big price declines in recent days, worrying some investors.May 13The firm says it’s prepared to make future bond payments and has seen no change in the level of government support, seeking to ease investor concerns after a local media report that regulators balked at China Hurarong’s restructuring plan.May 6The company says it transferred funds to pay five offshore bond coupons due the following day, its latest move to meet debt obligations amid persistent doubts about its financial health.April 30China Huarong breaks its silence, with an executive telling media it is prepared to make its bond payments and state backing remains intact. The official also says the week’s rating downgrades “have no factual basis” and are “too pessimistic.”April 29Moody’s Investor Service downgrades China Huarong by one notch to Baa1, adding the firm remains on watch for further downgrade. The cut reflects the company’s weakened funding ability due to market volatility and increased uncertainty over its future, according to the statement.April 27China Huarong units repay bonds maturing that day. The S$600 million ($450 million) bond was repaid with funds provided by China’s biggest state-owned bank, according to a Bloomberg News report.April 26Fitch Ratings downgrades China Huarong by three notches to BBB while dropping the company’s perpetual bonds into junk territory. The lack of transparency over government support for the firm may hamper its ability to refinance debt in offshore markets, Fitch said.April 25China Huarong says it won’t meet an April 30 deadline to file its 2020 report with Hong Kong’s stock exchange because auditors needed more time to finalize a transaction the company first flagged on April 1. Securities and asset-management units said in the days before that they wouldn’t release 2020 results by month’s end.April 22The China Banking and Insurance Regulatory Commission asks lenders to extend China Huarong’s upcoming loans by at least six months, according to REDD, citing two bankers from large Chinese commercial lenders.April 21China is considering a plan that would see its central bank assume more than 100 billion yuan ($15 billion) of China Huarong assets to help clean up the firm’s balance sheet, according to a Bloomberg News report. Peer China Cinda Asset Management Co. was said to be planning the sale of perpetual bonds in the second quarter.April 20China Huarong’s key offshore financing unit says it returned to profitability in the first quarter and laid a “solid” foundation for transformation. Reorg Research reports that regulators are considering options including a debt restructuring of the unit, China Huarong International Holdings Ltd.April 19Huarong Securities Co. says it wired funds to repay a 2.5 billion yuan local note.April 16The CBIRC says China Huarong’s operations are normal and that the firm has ample liquidity. These are the first official comments about the company’s troubles. Reuters reports Chinese banks have been asked not to withhold loans to Huarong.April 13Fitch and Moody’s both put the company on watch for downgrade. The finance ministry, which owns a majority of Huarong, is considering the transfer of its stake to a unit of the country’s sovereign wealth fund, Bloomberg News reports. Chinese officials signal they want failing local government financing vehicles to restructure or go bust if debts can’t be repaid.April 9China Huarong says it has been making debt payments “on time” and its operations are “normal.” Bloomberg News reports the company intends to keep Huarong International as part of a potential overhaul that would avoid the need of a debt restructuring or government recapitalization. S&P Global Ratings puts China Huarong’s credit ratings on watch for possible downgrade.April 8China Huarong is preparing to offload non-core and loss-making units as part of a broad plan to revive profitability that would avoid the need for a debt restructuring or government recapitalization, Bloomberg News reports.April 6Selling gains steam in China Huarong’s dollar bonds, following a holiday in China. Huarong Securities says there has been no major change to its operations, in response to a price plunge for its 3 billion yuan local bond.April 1China Huarong announces a delay in releasing 2020 results, saying its auditor is unable to finalize a transaction. Stock trading is suspended and spreads jump on the firm’s dollar bonds while China Huarong tells investors its business is running as usual. Caixin reports the company submitted restructuring and other major reform plans to government officials and shareholders.More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

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India's Central Bank RBI Confirms Crypto Banking Ban 'No Longer Valid' — Asks Banks to Stop Quoting It – Regulation Bitcoin News - Bitcoin News

Indian central bank, the Reserve Bank of India (RBI), has officially advised banks that its banking ban circular is no longer valid as it was set aside by the country’s supreme court more than one year ago. Despite the supreme court’s ruling, banks have been citing the RBI circular when dealing with cryptocurrency.

RBI Tells Banks to Stop Quoting Its ‘No Longer Valid’ Circular on Cryptocurrency

India’s central bank, the Reserve Bank of India (RBI), issued a notice on Monday clarifying its position regarding cryptocurrencies. The notice, entitled “Customer Due Diligence for transactions in Virtual Currencies (VC),” aims at “all commercial and co-operative banks, payments banks, small finance banks, NBFCs, and payment system providers.”

The RBI wrote:

It has come to our attention through media reports that certain banks/ regulated entities have cautioned their customers against dealing in virtual currencies by making a reference to the RBI circular … dated April 06, 2018.

The April circular advised banks that they were prohibited in dealing in cryptocurrencies. However, the Indian supreme court quashed this circular back in March of last year, allowing banks to resume providing services to crypto businesses, including cryptocurrency exchanges.

In its notice Monday, the RBI clarified: “Such references to the above circular by banks/ regulated entities are not in order as this circular was set aside by the Hon’ble Supreme Court on March 04, 2020 in the matter of Writ Petition (Civil) No.528 of 2018 (Internet and Mobile Association of India v. Reserve Bank of India),” elaborating:

As such, in view of the order of the Hon’ble Supreme Court, the circular is no longer valid from the date of the Supreme Court judgement, and therefore cannot be cited or quoted from.

The central bank added: “Banks, as well as other entities addressed above, may, however, continue to carry out customer due diligence processes in line with regulations governing standards for Know Your Customer (KYC), Anti-Money Laundering (AML), Combating of Financing of Terrorism (CFT) and obligations of regulated entities under Prevention of Money Laundering Act, (PMLA), 2002 in addition to ensuring compliance with relevant provisions under Foreign Exchange Management Act (FEMA) for overseas remittances.”

While the banking restriction was lifted back in March last year, some banks in India are reportedly still restricting crypto transactions. Some customers reportedly received warning emails from their banks stating that they are not allowed to use bank accounts or credit cards for crypto transactions.

Some media outlets even reported that the RBI unofficially asked banks to cut ties with crypto businesses and traders. The National Payments Corporation of India, however, said it will not ban cryptocurrency transactions through UPI.

Meanwhile, the Indian government is still working on cryptocurrency regulation. A crypto bill was supposed to be introduced in Parliament in the Budget session but it was not. Last month, the media reported that the government planned to set up a panel of experts to work on cryptocurrency regulation.

What do you think about the RBI’s clarification to banks regarding cryptocurrency? Let us know in the comments section below.

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banking ban, banks bitcoin, banks cryptocurrency, bitcoin not banned, crypto not banned, cryptocurrency not banned, India, indian central bank, RBI, rbi ban, rbi circular, rbi no ban

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Tesla's vehicle price increases due to supply chain pressure, Musk says - Reuters

A China-made Tesla Model 3 electric vehicle is seen ahead of the Guangzhou auto show in Guangzhou, Guangdong province, China November 21, 2019. REUTERS/Yilei Sun/File Photo

The price of Tesla (TSLA.O) vehicles is increasing due to supply chain pressures across the auto industry, particularly for raw materials, Elon Musk said on Monday in response to a tweet.

"Prices increasing due to major supply chain price pressure industry-wide. Raw materials especially," Musk said in a tweet.

He was responding to an unverified Twitter account called @Ryanth3nerd, which said, "I really don't like the direction @tesla is going raising prices of vehicles but removing features like lumbar for the Model Y..."

In May, Tesla increased its Model 3 and Model Y prices, the automaker's fifth incremental price increase for its vehicles in just a few months, the Electrek website reported.

During an an earnings conference call in April, Musk said Tesla had experienced "some of the most difficult supply chain challenges," citing a chip shortage. "We're mostly out of that particular problem," he added at the time. read more

In response to the removal of lumbar support on the passenger side in Tesla's Model Y, Musk said, "Moving lumbar was removed only in front passenger seat of 3/Y (obv not there in rear seats). Logs showed almost no usage. Not worth cost/mass for everyone when almost never used."

Earlier on Monday, the Electrek reported that new Tesla Model Y owners are reporting that their electric SUVs are being delivered without lumbar support on the passenger side.

Our Standards: The Thomson Reuters Trust Principles.

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New Iran Nuclear Deal May Completely Derail Oil Price Rally - OilPrice.com

Simon Watkins

Simon Watkins

Simon Watkins is a former senior FX trader and salesman, financial journalist, and best-selling author. He was Head of Forex Institutional Sales and Trading for…

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According to senior political and economic sources who work closely with the current Iranian government exclusively spoken to by OilPrice.com last week, the U.S. has agreed to a tentative removal of key sanctions in the oil, gas, petrochemicals and automotive sectors, plus some of those on Iran’s banking sector. However, Supreme Leader, Ali Khamenei, and the senior figures of the Islamic Revolutionary Guards Guard Corp (IRGC) are also demanding the additional removal of individuals and their businesses from the U.S.’s sanctions list. Although Khamenei (fully supported by the senior IRGC generals) has repeatedly stated that Iran will not – and legally is not required to – renegotiate any elements of the Joint Comprehensive Plan of Action (‘nuclear deal’) from which the U.S. unilaterally withdrew in May 2018, the Iran sources believe that they may yield on this intransigent stance. “Tehran may be folding, with nationwide power outages and rising food shortages, rising inflation and depreciation of the rial raising the prospect of widespread civil unrest across the country,” one of the Iran sources said last week.

Despite the comments of many who have never traded anything in the financial markets (corroborated by those who have but who are talking up their own long crude positions) that there will be little effect on the oil price when at least 2.5 million barrels per day of Iranian crude oil returns to the market, this is highly unlikely to be the case. The fact that global trading giant Goldman Sachs is still targeting Brent crude oil to hit US$80 per barrel at some point this year, however, is significant in three ways. First, it means that Goldman itself has already authorised its mighty proprietary trading vehicles to buy Brent in a market that has nowhere near the liquidity of, say, the global foreign exchange (FX) market, meaning that traders can get a lot more trading effect for a lot less money in oil than in FX. The price action of this sort of activity by a true trading giant such as Goldman has been sufficient in and of itself on many occasions in the past to significantly move and sustain prices at certain key levels. Second, given Goldman’s stellar trading reputation in many financial markets not only will its own major clients also be buying Brent but so will all of those in the markets who are aware of what a recommendation from Goldman can do to as asset’s price, so producing a self-fulfilling trading prophecy scenario. This said, though, there is only so long that the fundamentals of supply and demand can be bucked, especially in the oil market and even more so when the U.S. government does not want oil prices higher.  Related: China Boasts Successful Nuclear Fusion

As was very clearly demarcated under the government of former President Donald Trump – but pertains to all U.S. presidencies of recent years – Washington simply does not want oil prices on the higher side in general. The economic reason for this is that for every US$0.01 that the U.S.’s national average price of gasoline rises more than US$1 billion per year in discretionary additional consumer spending is estimated to be lost. As a general historical rule of thumb, it is estimated that every US$10 per barrel change in the price of crude oil results in a US$0.25 change in the price of a gallon of gasoline. Based on more recent historical precedent, a US$90-95 per barrel of Brent oil price equates to around US$3 per gallon of gasoline and a US$125-130 per barrel of Brent equates to around US$4 per gallon of gasoline. The ‘danger zone’ for U.S. presidents starts at around US$3.00 per gallon and at US$4.00 per gallon, they are being advised to pack their bags in Pennsylvania Avenue or start a war to divert the public’s attention. The point was underlined by Bob McNally, the former energy adviser to the former President George W. Bush that: “Few things terrify an American president more than a spike in fuel [gasoline] prices.”

For Trump, the early warning for Brent oil pricing was anywhere above US$70 per barrel, which is why whenever Brent looked like it was going to trade decisively above there and towards US$75-80 per barrel he started to Tweet veiled threats to OPEC members, especially Saudi Arabia. Specifically, for example, when the Saudis (with the help of Russia) were pushing oil prices up over the US$80 per barrel of Brent level in the second half of 2018, Trump said in a speech before the U.N. General Assembly: “OPEC and OPEC nations are, as usual, ripping off the rest of the world, and I don’t like it. Nobody should like it,” he said. “We defend many of these nations for nothing, and then they take advantage of us by giving us high oil prices. Not good. We want them to stop raising prices. We want them to start lowering prices and they must contribute substantially to military protection from now on.” The oil markets do not yet know what Brent price level would trigger concern from Biden’s administration but it is fair to assume that it is somewhere close to this US$70-80 per barrel range (with the same floor price of US$35-40 per barrel to safeguard the shale oil sector), given the negative effect on the U.S.’s post-COVID 19 economic recovery that rising and higher trending oil prices will have. Related: Oil Prices Rise At The Start Of Driving Season

Two and a half million barrels per day of oil coming into the global markets from Iran is certainly going to weigh on oil prices over time but it may be a lot more than this very quickly. It is wise to remember that despite the widespread but erroneous reports that Iranian crude oil exports had dropped to exceptionally low levels due to U.S. sanctions the reality was that Iran was still exporting large quantities of oil to China, as exclusively revealed by OilPrice.com. This constant stream of exports to China meant that Iran never had to shut down wells and this is why, according to industry figures, Iran pumped 2.43 million barrels per day (bpd) of crude oil in April. This said, immediately prior to the U.S. re-imposing sanctions in 2018, Iran pumped around 3.8-3.9 million bpd of crude, with realistic plans to increase this to at least 5.7 million bpd within two years of the Implementation Day for the JCPOA on 16 January 2016, although this target was shelved due to deals with Western oil companies not being finalised. Over the last two weeks, though, Iran has released various statements outlining plans to dramatically increase its oil volumes, initially very quickly from key fields in West Karoun – comprising the major fields of North Azadegan, South Azadegan, North Yaran, South Yaran and Yadavaran - which together are estimated to contain at least 67 billion barrels of oil in place. For every one per cent increase in the rate of recovery that can be achieved the recoverable reserves figure would increase by 670 million barrels, or around US$34 billion in additional revenues for Iran even with oil at US$50 a barrel. The focus on the West Karoun fields also neatly ties in to the very recent completion of the Goreh-Jask oil export pipeline.

Last week, Iranian officials stated that the Azadegan fields are top of the list of fields for further fast-track development and although officially this is to be managed by domestic Iranian companies in reality it will heavily figure Chinese companies. China National Petroleum Corporation (CNPC) is still the key foreign developer at North Azadegan, and the understanding agreed between Iran and China when France’s Total pulled out of South Pars Phase 11 was that China would eventually take over the development in exchange for which it would also be allowed to go into South Azadegan to create a unified field development programme with its North Azadegan activities. Currently, North Azadegan is producing around 80,000 bpd but the Phase 2 plan – including the spudding of the new wells – is aimed at boosting this output to at least 100,000 bpd. More specifically, China is expected by Iran to ensure that the output from North Azadegan when combined with the output from South Azadegan (currently being developed by Iranian firms) is at least 250,000 bpd. South Azadegan is now producing a steady 105,000 bpd with spikes to 115,000 bpd or so, according to Iranian oil industry sources. Longer-term, Iran’s plan is to increase the recovery rate from all of its oil fields, beginning with those in West Karoun to at least 25 per cent from the current 4.5 per cent (it was 5.5 per cent before U.S. sanctions were re-imposed). By comparison, the average recovery rate from Saudi Arabia’s oil fields is around 50 per cent, with plans to raise that to 70 per cent.

By Simon Watkins for Oilprice.com

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Ghosn’s lavish Versailles parties part of Beirut interrogation - Aljazeera.com

On Monday, a delegation of French investigators began questioning Carlos Ghosn, the former chairman of Renault, Nissan Motor Co and Mitsubishi Motors Corp, in Beirut, a year and a half after he fled there to avoid trial in Japan.

Since Carlos Ghosn’s dramatic escape to Lebanon a year and a half ago to avoid trial in Japan, his main legal risks have shifted to France, where the former auto executive is accused of siphoning Renault SA funds to pay for a yacht and his wife’s birthday party.

On Monday morning, a delegation of French investigators began questioning the former chairman of Renault, Nissan Motor Co. and Mitsubishi Motors Corp. in Beirut. Here are details of the French case and what’s at stake for him:

Where is it happening?

Ghosn’s interrogation is taking place at the Grand Hall of the Criminal Court of Cassation on the fourth floor of the Justice Palace in Beirut. The venue had to be big enough to fit the many lawyers and investigators who are attending the hearing, including Lebanese prosecutor Imad Qabalan.

French investigators are scheduled to stay in Lebanon for a week.

Why isn’t Ghosn traveling to France?

France doesn’t usually extradite its nationals. But if it did in this case, Ghosn may well have been in jeopardy on the way there from Lebanon. One potential nightmare scenario for him would have been the rerouting of his plane mid-flight to a country that might be willing to extradite Ghosn to Japan.

While rare, it isn’t unheard of for French investigative magistrates to travel abroad to interrogate suspects and it won’t be a first for Serge Tournaire, who’s leading part of the Ghosn investigation. Two years ago, Tournaire went to Djibouti to interrogate and charge a former banker caught up in a probe focusing on alleged covert Libyan funding for Nicolas Sarkozy’s victorious 2007 presidential campaign.

Parties at the Versailles Palace will also feature prominently in French investigators’ questioning, with queries about an event that took place on Carlos Ghosn’s 60th birthday and the celebration of his wife’s 50th birthday [File: Lewis Joly/AP Photo]

What exactly is Ghosn accused of?

French authorities are investigating the former auto executive’s interactions with a car distributor in Oman and spending on events and trips that may have been personal, as well as payments made by a Dutch subsidiary of Renault and Nissan to consultants.

Many of the suspicions weighing upon Ghosn stem from information given by Renault to prosecutors, including a warning about payments worth millions of euros made to car dealer Suhail Bahwan Automobiles. Some of the money may have been used to pay for the family’s yacht and to fund the start-up company of his son Anthony. Ghosn has denied these accusations.

Parties at the Versailles Palace will also feature prominently, with questions about an event that took place on Ghosn’s 60th birthday and the celebration of his wife’s 50th birthday.

Ghosn conceded in a TV interview last year that he may have made “a mistake” in accepting a proposal by the palace to use a hall free of charge to celebrate his wife’s birthday. But he added that he was never told that the gift was deducted from credit Renault earned by being a sponsor.

The last set of allegations concern consultant payments made to French politician and lawyer Rachida Dati and security expert Alain Bauer. But both Dati and Bauer have already been interrogated by investigative magistrates in France and neither of them was charged.

In a statement released Monday morning, Ghosn’s lawyers complained about “procedural irregularities” in the French probe, which they say are due to the fact that most of the evidence stems from the Japanese investigation.

What happens at the end of the questioning?

If Ghosn is convincing, maybe nothing will immediately happen or he could be named a material witness, which is an intermediate status.

If Ghosn’s explanations don’t dispel French investigative magistrates’ suspicions, the former auto-executive will likely be charged in a process known as “mise en examen” triggered when there are serious or consistent clues showing likely involvement.

Paradoxically, Ghosn is actually in favor of being charged in the French case, according to his lawyers. They point out that it would enable his defense team to lodge procedural challenges and petition for certain witnesses to be heard rather than being excluded from the investigative process.

Things could get more awkward for Ghosn if the magistrates go for another option and decide to issue an arrest warrant. That might make it trickier for the former Renault boss to influence the investigation as he would probably not have access to documents in the case file.

If the accusations stand, how would a French trial play out?

Whether or not Ghosn gets charged, the investigation will continue. It’s only at the very end of the probe that investigative magistrates decide who should face trial. Complex French investigations typically take years to be concluded.

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How long will rising inflation last? We polled 30 market strategists, and here's what they said - CNBC

Shoppers maintain safe distance in a checkout line in Torrance, Calif.
Al Seib | Los Angeles Times | Getty Images

Just about every investor knows that inflation has arrived. The open question is, how long will it last?

CNBC International conducted a survey of 30 high-profile market strategists to get their take on inflation, a key factor that the U.S. Federal Reserve will gauge to assess whether it should keep easy money flowing into markets.

Under the Fed's so-called accommodative monetary policy, the central bank boosts money supply by snapping up long-term bonds from the open market and holding down interest rates. More money in circulation usually means a more vibrant economy — and higher stock prices.

The strategists also forecast when they expect the Fed to announce a timeline for withdrawing stimulus and how they expect markets to react when that news comes.

CNBC offered the strategists anonymity in exchange for their views. All 30 were based in either Asia or the United States, and the polling took place from May 17-21.

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How long will rising inflation last? We polled 30 market strategists, and here's what they said - CNBC
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US economy poised to grow at fastest pace since 1984, OECD says - Fox Business

The U.S. economy is on track to grow at the fastest pace in nearly four decades this year thanks to unprecedented levels of government stimulus and increased vaccination rates, the Organization of Economic Cooperation and Development said Monday.

The Paris-based organization forecast that U.S. gross domestic product – the broadest measure of goods and services produced by a nation – would grow 6.9% in 2021, the biggest increase since 1984. By comparison, GDP contracted at a 3.5% annualized rate in 2020, when the economy came to a near standstill to slow the spread of COVID-19, which has infected more than 33 million Americans and killed over 594,000. 

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The new projections mark a more optimistic outlook from earlier this year: In March, the OECD predicted the U.S. would grow by 6.5%, an increase from its December forecast of 3.5%. 

That uptick represents the faster-than-expected distribution of the vaccine – at least 50% of the population has received one dose so far – and the $1.9 trillion relief plan passed by Democrats in March. That measure, known as the American Rescue Plan, sent a $1,400 stimulus check to most adults, expanded unemployment benefits by $300 a week and allocated $350 billion to state and local governments.

"Substantial additional fiscal stimulus and a rapid vaccination campaign have given a boost to the economic recovery," the OECD said in the report.  

WHAT BIDEN'S CAPITAL GAINS TAX PROPOSAL COULD MEAN FOR YOUR WALLET

The group, which represents 38 countries, also predicted the global economy would grow 5.8% in 2021. But it warned the recovery would be uneven; in many OECD nations, living standards are expected to remain well below pre-crisis levels, even by the end of 2022.

"It is very disturbing that not enough vaccines are reaching emerging and low-income economies," Laurence Boone, chief OECD economist, said in a statement. "This is exposing these economies to a fundamental threat because they have less policy capacity to support activity than advanced economies."

The possibility of a renewed coronavirus threat could result in increases in "acute poverty" and the possibility of "sovereign funding issues," Boone said, if financial markets become concerned. 

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"More broadly, as long as the vast majority of the global population is not vaccinated, all of us remain vulnerable to the emergence of new variants," he wrote. "Confidence could be seriously eroded by further lockdowns, and a stop-and-go of economic activities."

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The New York Times

Death of QAnon Follower at Capitol Leaves a Wake of Pain

For months, Rosanne Boyland had been worrying her family with bizarre notions she had picked up on the internet: Actor Tom Hanks might be dead, she said. A national furniture chain was trafficking children. Many prominent Democrats were pedophiles. Then, early in January, she texted her older sister that she was heading to Washington, D.C., with a friend to support President Donald Trump and protest what was happening in the country. “I’m going to dc,” she wrote. “I dont know all the deets yet.” Boyland, 34, was one of five people who never made it home from the Jan. 6 protest, which erupted in violence when hundreds of people stormed into the Capitol. Her death has left her family grappling to understand how Boyland, who they say had never voted before 2020, wound up waving a “Don’t Tread on Me” flag amid a crowd of fanatic supporters of the former president before walking up the steps of the Capitol to her death. Sign up for The Morning newsletter from the New York Times Their frustration deepened further last week when Republicans in the Senate blocked an effort to establish an independent commission to look into the origins and the handling of the attack on the Capitol. “Why anyone would NOT want to find out what happened, even just to prevent it from happening again, is beyond me,” Boyland’s older sister, Lonna Cave, said in a text message after the vote. For months before the rally, Boyland had bombarded her friends and relatives with messages and links to long videos about the fantastical theories she had come to accept as fact. Many of the false claims spilled from QAnon, the pro-Trump conspiracy-theory movement that rose in popularity over the course of his presidency and promoted the idea that many Democrats and celebrities are part of a global pedophile ring — a theory that 15% of Americans believe, according to a poll last week. Many of its supporters falsely believed that President Joe Biden had stolen the election, and some attended Trump’s Jan. 6 rally. Boyland’s sudden fixation so alarmed her family members and friends that some of them asked her to stop talking to them about politics — or just to stop talking altogether. Some of her closest friends believe that Boyland was a vulnerable target for the conspiracy theorists. After a stint in drug rehabilitation, she had returned to her parents’ home and largely avoided drugs for several years, her family said. But the isolation brought about by the pandemic was making it harder. QAnon filled a void in her life, they said, helping distract her from thoughts of returning to drugs even as it acted as a different kind of hallucinogen. “I was worried that she was trading one addiction for another,” said Blaire Boyland, her younger sister. “It just seemed like, yes, she’s not doing drugs, but she’s very obsessively online, watching all these YouTube videos and going down the rabbit hole.” The family is also still struggling to understand how she died. From the video of the chaotic siege, it appeared that she had died after being caught in a crush of rioters. But the autopsy by the Washington medical examiner’s office did not find evidence of trampling and concluded that she had overdosed on amphetamines. Family members said it was likely that the only amphetamine in her body was the Adderall she took every day by prescription, although it appeared that she might have taken at least twice her prescribed dose. “We just want to find out what happened, to be able to rest,” Cave said. “This has been so messed up. We just want to grieve the normal way.” A Descent Into Conspiracy Theories For years, Boyland had been barred from voting because she had been convicted of felony drug possession, but she had also shown little interest in politics until 2020. In the fall, though, free from probation, she made it clear early on that she planned to cast a ballot for Trump. She registered to vote Oct. 3, a month before the election, records show. “She was so happy that she was able to vote,” recalled Stephen Marsh, 36, a friend of Boyland’s who said that she had been so thrilled that she had called his mother. “She was so excited about it because her past made it difficult for her to participate.” But her increasing absorption in the QAnon community was by that time pushing some of her closest friends away. “I care about you, but I think it would be best if we didn’t talk for a while,” Sydney Vinson, a friend since childhood, texted her on Oct. 3 after Boyland had sent her a long text message and screenshots about purported government manipulation of the news media. “Please don’t send me any more political stuff.” Boyland was the middle of three sisters, growing up in Kennesaw, Georgia, a city of 34,000 people about 25 miles northwest of Atlanta. She and her sisters were close as children, and her younger sister said she had been inspired by Boyland’s assertiveness and confidence. Even then, she had a penchant for conspiracy theories, her sisters said, but harmless ones, such as the existence of extraterrestrials or of Bigfoot. But when she was about 16, her life took a turn when she began dating an abusive boyfriend, her sisters said. She would blame black eyes on soccer practice and once came home with an unexplained shoulder injury. Around that time, she also got hooked on opioids. She eventually dropped out of high school, and her relationship with her family became strained. In 2009, when she was 23, she was charged with felony drug possession. Several other cases would follow, the most recent in April 2013, after which she was given five years of probation. It was only in July 2014, when she learned about the pregnancy of her older sister, Cave, that she pledged to be a better role model for her niece, her sisters said — and from that moment on, with a few brief relapses, she was largely sober. “She was always talking about how she couldn’t wait to be the aunt that was the cool aunt,” said Cave, who gave birth to her first daughter in March 2015. She now has two daughters, ages 5 and 6. Boyland grew close to both of them, often picking them up from school and documenting milestones in their lives. She spent much of her time going to group meetings and counseling other people who were struggling with drugs. At one point, she hoped to become a counselor herself. When the pandemic arrived, though, she had to spend much of her time alone at her parents’ house, and her in-person group meetings were canceled. She told her sisters that she frequently felt an urge to begin using drugs again. “She was really struggling,” Blaire Boyland said. “She tried doing the Zoom meetings, but she wasn’t getting anything out of it. She felt out of control.” Her friends began noticing that she was posting about conspiracy theories and about Trump. Before long, she was texting them about PizzaGate, a conspiracy theory that included false claims about Democrats’ trafficking of children in the basement of a pizza shop in Washington. “I’ve mostly been watching it all on youtube,” Boyland said in a text message to Vinson, her childhood friend. What most captured her attention, Vinson said, was the “Save the Children” slogan that QAnon members used to spread false claims about Democrats’ trafficking of children. “She cared about kids a lot,” Vinson said. “She thought she was fighting for children, in her own way, and just trying to spread the word about underground pedophile rings and just all of these things. I think QAnon had this way of making these things seem really believable.” At about 8:30 p.m. on Jan. 5, Boyland began the roughly 10-hour drive to Washington with a friend, Justin Winchell. They parked in Virginia and took a bus into the city to see Trump at the rally, where he riled up the crowd with unsubstantiated claims that his election loss had been rigged. “If you don’t fight like hell, you’re not going to have a country anymore,” Trump told the crowd. Boyland headed with many of the other protesters down the street to the Capitol. The Chaotic Siege Boyland could barely be made out at first in the footage of the crowd’s surge up the Capitol steps — a short figure, outfitted in a black hoodie and American-flag sunglasses. She disappeared into the mob inside the tunnel that presidents use when they emerge for their inaugurations. It was the scene of some of the day’s most brutal hand-to-hand fighting, and videos showed rioters crushing police officers between doors and warning that the crowd could become dangerously packed. Just minutes later, after a push by the police that sent the crowd tumbling back out of the tunnel, she could be seen lying on her side, after which two men dragged her away from the door and began trying to resuscitate her. It appeared to be a case of trampling. But then the medical examiner concluded that she had died of “acute amphetamine intoxication,” a ruling that left her family — convinced that she had not relapsed into drug abuse — flummoxed. She had been taking Adderall regularly under a doctor’s prescription and had not been seen to have any adverse effects, they said. Several forensic pathologists and toxicologists who reviewed the autopsy report said in interviews that the level of amphetamine in her blood — most likely from the Adderall — had been enough to be potentially fatal. Iain McIntyre, a former chief toxicologist at the San Diego County medical examiner’s office, said the level could be consistent with her having taken both of her 30-milligram daily doses at the same time, something Cave said her sister sometimes did. McIntyre said the high dosage of amphetamine, along with the raucous scene, her heart disease and obesity, could have been enough to make her heart stop. The day after Boyland's death, Cave’s husband, Justin, told reporters that Trump had “incited a riot last night that killed four of his biggest fans.” Then came a spate of cruel messages to the family from all sides — people who said they were glad Boyland had died, and others who had been infuriated by Justin Cave’s comments. The Caves were left wondering what they had missed and how they could have helped Boyland before she fell too deeply into the conspiracy theories. “That’s part of the reason I feel guilty, because none of us thought too much about it when she started looking into it,” Lonna Cave said. “I understand that she was somewhere she shouldn’t have been. But she would not have been here if it weren’t for all the misinformation.” This article originally appeared in The New York Times. © 2021 The New York Times Company

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Memorial Day 2021: What stores are open? - Fox Business

If you need to do some last-minute Memorial Day shopping, you may be in luck. 

Many stores will be open on the holiday, with one major exception: Costco clubs will be closed. 

The wholesale retailer’s warehouses are closed on seven major holidays, including Memorial Day, according to its website. Costco is also closed on New Year’s Day, Easter Sunday, Independence Day, Labor Day, Thanksgiving and Christmas.

HOME DEPOT, LOWE’S, BANK OF AMERICA HONOR MEMORIAL DAY

Retailers also offer Memorial Day sales ahead of and during the holiday weekend and some companies, such as Home Depot and Lowe’s are celebrating the holiday by honoring veterans and taking time to remember fallen soldiers, FOX Business previously reported

Walmart is among the numerous retailers that will be open on Memorial Day 2021. (ROBYN BECK/AFP via Getty Images)

Though Memorial Day is dedicated to honoring the men and women who have died while serving in the U.S. military, it is also informally the start of summer and a chance for people to celebrate by hosting cookouts and grilling

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According to USA Today, many grocery stores – including Aldi – will have special holiday hours on Memorial Day, while others will run on Sunday hours. The website also reported that while many CVS, Rite Aid and Walgreens will be open, their pharmacies may be closed.

Here’s a list of stores and grocery stores that will be open on Memorial Day 2021, according to USA Today. Just make sure to check hours of specific locations online, or call ahead, before going. Store hours may vary by location.

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Academy Sports

Ace Hardware

Aldi

Barnes & Noble

Bass Pro Shops

Best Buy

BJ’s Wholesale Club

Big Lots

Cabela’s 

The Container Store

CVS

Dick’s Sporting Goods

Dollar General 

Dollar Tree

Family Dollar

Food Lion

Gap

Hobby Lobby

Home Depot

Ikea

Kirkland’s

Kohl’s 

Kroger

Lowe’s 

Macy’s

Menards

Michaels

Nordstrom

Nordstrom Rack

Office Depot and Office Max

Old Navy

Party City

Publix

Sam’s Club

Staples

Target

Trader Joe’s

Walgreens

Walmart

Wegman’s

Whole Foods Market

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Bloomberg

China Huarong’s Journey From Safe Bet to Bad News: A Timeline

(Bloomberg) -- It’s nearly two months since turbulence erupted around China Huarong Asset Management Co.At the end of March, its 4% perpetual dollar bond was trading at 102 cents on the dollar as investors figured the January execution of former chairman Lai Xiaomin for bribery put a line under past wayward behavior. But the failure of the company to release 2020 results by a March 31 deadline, and a subsequent report by mainland media Caixin that the firm will restructure, sparked weeks of turmoil. The same bond is now at 57 cents.The heart of the matter is whether the central government will rescue a state-owned company that’s integral to the smooth running of the financial system. While there are signs Beijing wants to ensure China Huarong can repay its debts on time, uncertainty prevails.Here’s a look at the key events for China Huarong:May 28The company has wired funds to repay $978 million of notes maturing within the following week, according to Bloomberg News, the biggest bond payment since the 2020 results delay.May 27Liang Qiang, who currently heads another bad-debt manager, is on track to become president of China Huarong, reports Bloomberg News.May 24China Huarong dollar bonds climb after the managing editor of Caixin Media wrote in an opinion piece that the asset manager is “nowhere near” defaulting on its more than $20 billion of offshore notes.May 21Some of China Huarong’s thinly traded onshore bonds slump after having held up better than the company’s dollar-denominated notes, signaling broadening concern about the firm’s financial health.May 18China Huarong has transferred funds to repay a $300 million note maturing May 20, Bloomberg News reports, the first dollar bond to come due since the delayed 2020 results. Prices for the firm’s dollar bonds slump earlier in the day after the New York Times reports China is planning an overhaul that would inflict “significant losses” on both domestic and foreign China Huarong bondholders.May 17The company has reached funding agreements with state-owned banks to ensure it can repay debt through at least the end of August, by which time China Huarong aims to have completed its 2020 financial statements, according to a Bloomberg News report. That as at least two of its onshore bonds see big price declines in recent days, worrying some investors.May 13The firm says it’s prepared to make future bond payments and has seen no change in the level of government support, seeking to ease investor concerns after a local media report that regulators balked at China Hurarong’s restructuring plan.May 6The company says it transferred funds to pay five offshore bond coupons due the following day, its latest move to meet debt obligations amid persistent doubts about its financial health.April 30China Huarong breaks its silence, with an executive telling media it is prepared to make its bond payments and state backing remains intact. The official also says the week’s rating downgrades “have no factual basis” and are “too pessimistic.”April 29Moody’s Investor Service downgrades China Huarong by one notch to Baa1, adding the firm remains on watch for further downgrade. The cut reflects the company’s weakened funding ability due to market volatility and increased uncertainty over its future, according to the statement.April 27China Huarong units repay bonds maturing that day. The S$600 million ($450 million) bond was repaid with funds provided by China’s biggest state-owned bank, according to a Bloomberg News report.April 26Fitch Ratings downgrades China Huarong by three notches to BBB while dropping the company’s perpetual bonds into junk territory. The lack of transparency over government support for the firm may hamper its ability to refinance debt in offshore markets, Fitch said.April 25China Huarong says it won’t meet an April 30 deadline to file its 2020 report with Hong Kong’s stock exchange because auditors needed more time to finalize a transaction the company first flagged on April 1. Securities and asset-management units said in the days before that they wouldn’t release 2020 results by month’s end.April 22The China Banking and Insurance Regulatory Commission asks lenders to extend China Huarong’s upcoming loans by at least six months, according to REDD, citing two bankers from large Chinese commercial lenders.April 21China is considering a plan that would see its central bank assume more than 100 billion yuan ($15 billion) of China Huarong assets to help clean up the firm’s balance sheet, according to a Bloomberg News report. Peer China Cinda Asset Management Co. was said to be planning the sale of perpetual bonds in the second quarter.April 20China Huarong’s key offshore financing unit says it returned to profitability in the first quarter and laid a “solid” foundation for transformation. Reorg Research reports that regulators are considering options including a debt restructuring of the unit, China Huarong International Holdings Ltd.April 19Huarong Securities Co. says it wired funds to repay a 2.5 billion yuan local note.April 16The CBIRC says China Huarong’s operations are normal and that the firm has ample liquidity. These are the first official comments about the company’s troubles. Reuters reports Chinese banks have been asked not to withhold loans to Huarong.April 13Fitch and Moody’s both put the company on watch for downgrade. The finance ministry, which owns a majority of Huarong, is considering the transfer of its stake to a unit of the country’s sovereign wealth fund, Bloomberg News reports. Chinese officials signal they want failing local government financing vehicles to restructure or go bust if debts can’t be repaid.April 9China Huarong says it has been making debt payments “on time” and its operations are “normal.” Bloomberg News reports the company intends to keep Huarong International as part of a potential overhaul that would avoid the need of a debt restructuring or government recapitalization. S&P Global Ratings puts China Huarong’s credit ratings on watch for possible downgrade.April 8China Huarong is preparing to offload non-core and loss-making units as part of a broad plan to revive profitability that would avoid the need for a debt restructuring or government recapitalization, Bloomberg News reports.April 6Selling gains steam in China Huarong’s dollar bonds, following a holiday in China. Huarong Securities says there has been no major change to its operations, in response to a price plunge for its 3 billion yuan local bond.April 1China Huarong announces a delay in releasing 2020 results, saying its auditor is unable to finalize a transaction. Stock trading is suspended and spreads jump on the firm’s dollar bonds while China Huarong tells investors its business is running as usual. Caixin reports the company submitted restructuring and other major reform plans to government officials and shareholders.More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

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Global Stocks Slip as Inflation Remains in Focus - The Wall Street Journal

An electronic stock board of a securities firm in Tokyo.

An electronic stock board of a securities firm in Tokyo.

Photo: Koji Sasahara/Associated Press

Global stock markets slipped Monday as investors wrapped up a month of trading dominated by concerns over inflation and the pace of the international economic recovery.

Trading was light with holidays in the U.S. and the U.K. S&P 500 stock futures were down slightly Monday.

In Europe, Germany’s DAX index slid 0.6%, dragged down by Deutsche Bank shares, which fell 1.3%. The Wall Street Journal reported Sunday that the Federal Reserve told the bank in recent weeks that it is failing to address persistent shortcomings in its anti-money-laundering controls, according to people familiar with the matter.

The index, which opened lower, fell further after data showed inflation in the country rose to 2.4% in May, the highest level since November 2018.

“With headline inflation on the rise, the European Central Bank’s attempt to avoid the taper conversation will become more and more complicated,” said Carsten Brzeski, ING Groep’s global head of macro research.

In Spain, where inflation also rose to 2.4% in May, the IBEX index fell 0.8%. Shares of utility companies dropped over a draft bill the government is preparing that could drive down electricity prices in the country. Endesa shares closed down almost 6%.

Italy’s biggest insurer, Assicurazioni Generali SpA, launched a $1.44 billion takeover offer for smaller peer Società Cattolica di Assicurazione SpA, whose stock surged 15%. Italy’s index bucked the trend and closed higher.

The pan-Continental Europe Stoxx 600 index closed down 0.5%.

In Asia, Japan’s Nikkei 225 fell 1%. Hong Kong’s local benchmark Hang Seng Index closed up 0.1%. In mainland China, the benchmark CSI 300 also closed up 0.2%. An official purchasing managers index for the manufacturing sector came in at 51.0 for May—down slightly from a reading of 51.1 a month earlier, but still above the 50-mark that separates expansion from contraction.

Among individual stocks, shares of Meituan jumped more than 10% in Hong Kong. Late on Friday, the Chinese food-delivery giant reported better-than-expected revenue of 37 billion yuan, the equivalent of $5.8 billion, for the three months ended March. Financial stocks retreated, with AIA Group falling nearly 4% and HSBC Holdings ’ Hong Kong shares dropping 3%.

Markets were likely to remain unsettled as investors try to gauge the prospects for U.S. growth and price rises from data points such as payroll figures due this Friday, said Mary Nicola, a fund manager at PineBridge Investments. “Everyone is focused on inflation,” she said.

Ms. Nicola said a key question for investors was how this would affect Federal Reserve policy, including the time frame in which the central bank might begin tapering, or reducing its asset purchases. She added that her firm was overweight European and Japanese stocks—holding more of these shares than the benchmarks it tracks—given it believed both markets were attractively valued and stood to benefit from a world-wide economic recovery.

U.S. markets are closed Monday for Memorial Day. For the whole of May, the S&P 500 recovered from inflation-driven volatility earlier in the month to record its fourth consecutive monthly gain.

In the currency markets, the dollar inched lower, with the WSJ Dollar index dropping 0.2% to 85.07.

Bitcoin rose almost 5% from late Friday’s level to $36,877.

Write to Patricia Kowsmann at patricia.kowsmann@wsj.com and Xie Yu at Yu.Xie@wsj.com

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Global Stocks Slip as Inflation Remains in Focus - The Wall Street Journal
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Battle Brews Over Banning Natural Gas to Homes - The Wall Street Journal

Some major cities including San Francisco have either enacted or proposed measures to ban or discourage the use of natural gas in new homes.

Some major cities including San Francisco have either enacted or proposed measures to ban or discourage the use of natural gas in new homes.

Photo: David Paul Morris/Bloomberg News

A growing fight is unfolding across America as cities concerned about climate change consider phasing out natural gas for home cooking and heating.

Major cities including San Francisco, Seattle, Denver and New York have either enacted or proposed measures to ban or discourage the use of the fossil fuel in new homes and buildings, two years after Berkeley, Calif., passed the first such prohibition in the U.S. in 2019.

The bans in turn have led Arizona, Texas, Oklahoma, Tennessee, Kansas and Louisiana to enact laws outlawing such municipal prohibitions in their states before they can spread. Ohio is considering a similar measure.

The outcome of the battle has the potential to reshape the future of the utility industry, and demand for natural gas, which the U.S. produces more of than any other country.

Proponents of phasing out natural gas say their aim is to reduce planet-warming emissions over time by fully electrifying new homes and buildings as wind and solar farms proliferate throughout the country, making the power grid cleaner.

Homes and businesses account for about 13% of the nation’s annual greenhouse gas emissions, according to the Environmental Protection Agency, mostly because natural gas is used in cooking, heating, and washers and dryers. Climate activists say reducing that percentage is critical for states with goals to slash carbon emissions in the coming decades.

Opponents in the gas industry counter by citing the higher costs of making many homes fully electric, and pointing to the added security of having a second home energy source to heat and cook with during extreme weather events. They also highlight the preference many home and professional chefs have for using gas-fired stoves.

New all-electric homes are cost-competitive with those that use gas in many parts of the country, but retrofits can be considerably more expensive, depending on the existing heating and cooking systems and the cost of effectively converting them. A recent study by San Francisco found that retrofitting all housing units that now use natural gas would cost between $3.4 billion and $5.9 billion, costs that would fall on residents, the city or both.

Induction ranges, which use magnets to heat pots and pans directly, can be more expensive to buy than gas ranges, especially in professional kitchens. Restaurant associations across the nation have raised concerns about going electric.

Utilities that supply both electricity and natural gas could face more muted impacts if the shift accelerates. But those that supply only natural gas face the prospect of slower growth or even a reversal of demand, especially if momentum builds to electrify both new and existing homes.

Greater reliance on electricity raises the possibility that parts of the natural-gas delivery system will become stranded assets, facilities that retire before they pay for themselves. The Environmental Defense Fund, a nonprofit environmental advocacy group, in 2019 warned that in California, where gas utilities spend billions of dollars on their systems each year, stranded assets could complicate efforts to move away from gas by saddling customers with higher costs over time.

President Biden’s $1.7 trillion infrastructure plan calls for greater adoption of all-electric heat pumps and induction stoves, giving proponents hope that the government will do more to incentivize their adoption.

A gas flare burning in a field near Mentone, Texas, in one of several states that has enacted laws outlawing municipal prohibitions of natural gas.

A gas flare burning in a field near Mentone, Texas, in one of several states that has enacted laws outlawing municipal prohibitions of natural gas.

Photo: Bronte Wittpenn/Bloomberg News

Panama Bartholomy, director of the Building Decarbonization Coalition, which supports efforts to electrify buildings throughout California, said the organization is pushing for the state to cut emissions from homes and businesses by 40% by 2030, and to adopt zero-emission building codes for each within the next few years.

“All of a sudden there’s a conversation happening that wasn’t happening two years ago,” Mr. Bartholomy said. “It’s the fastest-growing trend we’ve ever seen.”

Industry pushback has been swift, with many utilities and businesses voicing opposition to local gas bans.

Arizona last year became the first state to pass pre-emptive legislation barring municipalities from banning new gas hookups. The Arizona Chamber of Commerce helped lead a coalition of businesses that pushed for the legislation, even though no bans were under consideration in the state at the time. Garrick Taylor, the chamber’s interim chief executive, said the legislation was born of concerns that bans would result in higher electricity costs and reduced energy choices for residents and businesses.

“If you see something next door in California, there’s a chance that a municipality in your state is likely going to consider it,” Mr. Taylor said.

SHARE YOUR THOUGHTS

Do you support a ban on natural-gas use in new homes and buildings as a way to address climate concerns? Why or why not? Join the conversation below.

The American Gas Association, a national lobbying group, has been pushing for state laws prohibiting local bans. President Karen Harbert said an indiscriminate approach to widespread electrification could put strain on the grid, resulting in either higher electricity prices or greater reliance on gas-fired power plants.

“You have to do the math,” she said. “We can’t just say if we electrify everything, we’re going to solve the challenge of climate change.”

State agencies in California, Colorado, Massachusetts and New York have launched efforts to assess how the role of gas utilities may change in the coming years if demand plateaus or declines. Utilities across the country are beginning to ask the same question as they consider new gas investments.

Jan Berman, director of energy strategy and innovation at PG&E Corp. , which serves 16 million people in Northern and Central California, said it may eventually shrink its gas distribution system, if more homes are retrofitted to run entirely on electricity.

A geothermal installation in Otisville, N.Y. in April. Geothermal heat pumps draw heat from the ground and are an alternative to natural-gas heating.

A geothermal installation in Otisville, N.Y. in April. Geothermal heat pumps draw heat from the ground and are an alternative to natural-gas heating.

Photo: Bryan Derballa for The Wall Street Journal

“We welcome the opportunity to avoid investments in new gas assets that might later prove to be underutilized as decarbonization efforts progress here in California,” she said.

Southern California Gas Co., a unit of Sempra Energy that is the nation’s largest gas utility, opposes bans on new hookups, arguing that customers should have the right to choose. The California Public Utilities Commission recently determined that SoCalGas misused ratepayer money to advocate against such bans and other energy efficiency measures, and ordered the company to refund customers for those efforts.

SoCalGas said it appreciates the agency’s finding that no violations, fines or penalties are warranted.

SoCalGas recently set a goal to achieve net-zero emissions by 2045. The utility is working to expand its use of renewable natural gas made from landfill waste and green hydrogen, which is produced using electricity from renewable energy sources. CEO Scott Drury said he envisions a future where the company’s existing infrastructure is used to augment wind and solar power, especially during periods of peak demand.

“What is flowing through those pipes will be different in 2045 than it is today,” he said. “How do you take the infrastructure that’s there, and use it in the most thoughtful way as a tool to enable what we’re collectively trying to pursue?”

Write to Katherine Blunt at Katherine.Blunt@wsj.com

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Battle Brews Over Banning Natural Gas to Homes - The Wall Street Journal
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Regional Bank Stocks Fall After New York Community Bancorp Cuts Dividend, Posts Loss - The Wall Street Journal

[unable to retrieve full-text content] Regional Bank Stocks Fall After New York Community Bancorp Cuts Dividend, Posts Loss    The Wall St...