Hormel Foods is recalling almost 81 tons of Skippy peanut butter because the jars sold by Walmart and other retailers may contain small fragments of stainless steel from a piece of manufacturing equipment.
The problem detected by internal systems at the facility where the product was produced involves 9,353 cases, or 161,692 pounds, of three types of peanut butter, according to the recall notice posted Wednesday by the U.S. Food and Drug Administration.
Hormel Foods recalls four types of peanut butter.Hormel Foods
The varieties — Skippy Reduced Fat Creamy Peanut Butter Spread, Skippy Reduced Fat Chucky Peanut Butter Spread and Skippy Creamy Peanut Butter Blended With Plant Protein — all have "best-if-used-by" dates in May of 2023.
The product affected by the recall was shipped to 18 states: California, Connecticut, Delaware, Florida, Hawaii, Illinois, Indiana, Kansas, Massachusetts, Minnesota, Missouri, North Carolina, Nebraska, New Hampshire, New Jersey, New York, Oklahoma and Wisconsin.
Hormel Foods recalls four types of Skippy peanut butter.Hormel Foods
To understand if you've purchased a Skippy product under recall, check the UPC code on the side of the jar where the store scans the product and look for one of the four series of numbers: 37600-10520, 37600-10667, 37600-10499 or 37600-88095.
Hormel Foods recalls four types of Skippy peanut butter.Hormel Foods
Skippy Reduced Fat Creamy Peanut Butter, 40-ounce, with best-by dates of May 4 and May 5, 2023
Skippy Reduced Fat Creamy Peanut Butter - Club, 2/40-ounce, with best-by date of May 5, 2023
Skippy Reduced Fat Chunky Peanut Butter, 16.3-ounce, with best-by dates of May 6, and May 7, 2023
Skippy Creamy Peanut Butter with Plant Protein, 14-ounce, best-by May 10, 2023
Recalled jars can be returned to the place or purchase for an exchange or call Skippy at 1-866-475-4779, 8 a.m. – 4 p.m. Central Time.
Hormel produces more than 90 million jars of Skippy each year. The Minnesota conglomerate's other food brands include Jennie-O turkey and Spam.
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., March 29, 2022.
Brendan Mcdermid | Reuters
Stock futures rose early Thursday as investors assessed a new quarter of trading and a troublesome bond market recession indicator.
Investors were also awaiting the official jobs report for March, which the Labor Department will release at 8:30 a.m. ET on Friday.
Dow futures gained 65 points, or 0.2%. S&P 500 futures added 0.2% and Nasdaq 100 futures rose 0.2% to kick off the first trading session of the second quarter.
The Dow Jones Industrial Average slumped on Thursday to close out the first negative quarter for stocks in two years, with losses accelerating in the final hour of trading. The Dow dropped 550.46 points, or 1.56%, to 34,678.35. The S&P 500 slid 1.57% to 4,530.41, and the Nasdaq Composite was down 1.54% to 14,220.52.
All three major averages posted their worst quarter since March 2020. The Dow and S&P 500 declined 4.6% and 4.9% respectively during the period, and the Nasdaq dropped more than 9%. Stocks did stage a late-quarter comeback in March however after sharp declines from rising interest rates and inflation marked the first part of the year.
Stocks for now shook off a recession signal from the bond market that was triggered after the closing bell Thursday. The 2-year and 10-year Treasury yields inverted for the first time since 2019. For some investors, it's a signal that the economy is headed for a possible recession, though the inverted yield curve does not predict exactly when it will happen and history shows it could be more than a year away or longer.
"I think everybody needs to acknowledge the fact that we are obviously going to be moving into a slower economic environment," Shannon Saccocia, chief investment officer at Boston Private Wealth, told CNBC's "Closing Bell."
"You need to get earnings growth from somewhere, and if it's not going to be a secular tailwind, like fiscal spend and monetary policy looseness, then you have to look for growth elsewhere. I think we're going to see some real nuance in trading over the course of the next three months or so as people look for that growth against this more challenging economic backdrop."
A strong jobs report Friday could give the Fed more confidence to keep its aggressive rate-hiking plan in place this year to stifle inflation without fear of slowing the economy too much. Economists expect that about 490,000 jobs were added in March, according to the consensus estimate from Dow Jones, following a 678,000 payrolls addition in February. The unemployment rate is expected to fall to 3.7% from 3.8%, according to Dow Jones.
GameStop rallied more than 10% in extended trading after the video game retailer and meme stock announced its intentions for a stock split.
Energy prices declined on Thursday after the White House said it will release an unprecedented amount of oil from the Strategic Petroleum Reserve. Up to 1 million barrels of oil per day will be released for the next six months.
Other key indicators to watch out for include the ISM manufacturing index and the construction spending report, both of which will be released at 10 a.m. ET on Friday.
Skippy Peanut Butter Recalled in 18 States Over Possible Contamination
The affected jars are SKIPPY® Reduced Fat Peanut Butter Spread and SKIPPY® Creamy Peanut Butter Blended with Plant Protein
•
SKIPPY®
Skippy is recalling tens of thousands of jars of two kinds of peanut butter distributed to 18 states, including New York, New Jersey and Connecticut, over concerns the products could be contaminated by small fragments of stainless steel.
Fewer than 10,000 (9,353) cases of SKIPPY® Reduced Fat Peanut Butter Spread and SKIPPY® Creamy Peanut Butter Blended with Plant Protein are affected by the recall. That amounts to roughly 60,000 jars, according to one report.
Skippy described the recalled items as "a very limited number" and said it was pulling them from shelves out of an abundance of caution over potential contamination that may have come from manufacturing equipment.
No injuries have been reported to date, the company said.
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Anyone who has one of the recalled jars can return it for an exchange or call Skippy Foods Consumer Engagement at 1-866-475-4779 between 9 a.m. and 5 p.m. ET.
"We apologize to our fans for this inconvenience," Skippy said in a statement on the recall. "Our company is committed to product quality and will continue to invest in our processes to ensure the quality and wholesomeness of our products."
A flag outside the U.S. Securities and Exchange Commission headquarters in Washington, D.C., U.S., on Wednesday, Feb. 23, 2022.
Al Drago | Bloomberg | Getty Images
The Securities and Exchange Commission on Wednesday debuted a host of new rules for SPACs that, if enacted, would mark one of the broadest attempts to date at cracking down on the hot market for blank-check companies.
SPACs, or special-purpose acquisition companies, have come under fire in recent years by investors who say that the firms often inflate the business outlooks of the firms they seek to acquire. Many of those companies include start-ups that have not yet become profitable.
With its new rules, the SEC also hopes to address complaints about incomplete information and insufficient protection against conflicts of interest and fraud. The issues are not as pervasive in a traditional initial public offering.
SPACs are typically shell firms that raise funds through a listing with the goal of buying a private company and taking it public. That process allows the often-young firms to circumvent the more rigorous scrutiny of a traditional initial public offering.
"Functionally, the SPAC target IPO is being used as an alternative means to conduct an IPO," SEC Chair Gary Gensler said in a statement. "Thus, investors deserve the protections they receive from traditional IPOs, with respect to information asymmetries, fraud, and conflicts, and when it comes to disclosure, marketing practices, gatekeepers, and issuers."
Some of the SEC's proposed rules would:
Amend the definition of a "blank check company" to make the liability safe harbor for forward-looking statements, such as business forecasts, unavailable in filings by SPACs. The move would leave SPACs open to investor lawsuits if they feel like the blank-check company's estimates were wildly bullish.
Require that the SPAC's private business target be a co-registrant when the blank-check company files a take-public Form S-4 or F-4.
Better police conflicts of interest, fee responsibilities and the dilution of investor holdings.
Update the Securities Act of 1933 to limit the types of financial statements shell companies can make of their potential business combinations and their would-be merger targets.
Dilution is a paramount concern for individual investors, as many have complained that murky SPAC processes can leave investments open to unexpected losses if the company elects to issue more stock, the SEC told reporters.
Gensler has voiced concerns about SPACs since May, but Wednesday's proposed rules represent the first broad rulemaking from Wall Street's watchdog.
The U.S. SPAC market was one of the hottest trades of 2021. An explosion of hundreds of deals in the first half of the year waned as the SEC cracked down and many deals performed badly.
The proprietary CNBC SPAC Post Deal Index, which is comprised of SPACs that have completed their mergers and taken their target companies public, is down 44.8% over the past year and has declined 20% in 2022 alone.
LONDON, March 30 (Reuters) - Investors had hoped 2022 would be the year when the market recovery from COVID-19 finally got cemented and life started to feel a little more normal. Boy were they wrong.
Russia's invasion of Ukraine combined with supercharged global inflation have ignited talk of new geopolitical and economic world orders, setting some staggering milestones in the process.
A $10 trillion wipeout in world stocks followed by a $9 trillion recovery; a rout in bond markets; what is shaping up to be the strongest commodities rally since World War I; and the fastest rise in global interest rates in decades.
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Add to that the world's largest country being gouged out the global financial system, the biggest sovereign credit rating downgrade ever seen and pastings for Japan's yen and Chinese stocks and the full picture becomes clear.
"It has been one of the most extraordinary quarters I can remember," said Close Brothers Asset Management's Chief Investment Officer Robert Alster. "...We all didn't believe that Russia was going to invade Ukraine."
However, the shocks far earlier than that, he noted. Investors suddenly grasped that the new Omicron COVID strain wasn't going to shutter the global economy, and that the world's most influential central bank, the U.S. Federal Reserve, was now serious about jacking up interest rates.
The main driver of global borrowing costs, the 10-year Treasury yield , leapt from under 1.5% to 1.8%, knocking 5% off MSCI's world stocks index (.MIWD00000PUS) in January alone.
Fast forward to now and that yield is at 2.4%, and two-year U.S. yields have seen their biggest quarterly surge since 1981. More than 200 basis points of Fed interest rate rises are also now expected this year which, if realised, would be the most in a calendar year since 1994.
The top global stock markets will end March higher, but they are all set to record their worst quarter since the coronavirus pandemic first wreaked havoc in 2020.
Global markets year-to-date
Those seismic shifts have come as oil and gas prices have raced up 40%.
Added to the 57% surge in nickel and a 31% jump in wheat prices , which have both been driven higher by the Ukraine war, and BofA's analysts estimate commodities are on course for their best year since 1915.
Oil, gas, wheat and corn prices have soared
That "special military operation', as Moscow terms it, has seen Russia hit with unprecedented Western sanctions and led to some of the world's biggest investment funds talking about a new world order.
Russian companies that had shares listed in London and New York have had them removed, the rouble can't be freely traded anymore and the country's government and corporate bonds have been all been ejected from the major investment indexes.
President Vladimir Putin has retaliated by saying "unfriendly" places like Europe, where Germany gets more than half its gas from Russia, will have to start paying for the stuff in roubles.
EM ROLLERCOASTER
A broader spillover has sent waves through emerging markets, ripping into vulnerable ones but boosting others.
Egypt, which proportionally imports more wheat than any other country, has been forced to devalue its currency 15% and ask the IMF for help, as have Tunisia and a long-resistant Sri Lanka.
Emerging market debt is having the second worst quarter on record, down nearly 10% on a total return basis, with only the 13.3% COVID-induced plunge of the first quarter of 2020 registering worse.
Commodities heavyweights such as Brazil and South Africa meanwhile have the best performing currencies in the world, up 17% and 10% respectively since the start of the year, and Australia's dollar is top out of the advanced economies.
"This is a tectonic shift from a geopolitical point of view," Amundi's Head of Multi-Asset strategies, Francesco Sandrini, said.
"No one could have imagined that an entire new world order of energy should have been considered." he added. "Perhaps we are talking about literally the unwinding of globalisation."
Global FX in 2022
YIELD CURVE ALERT
This week has also seen a dreaded - albeit brief - "inversion" of a key bit of the U.S. bond yield curve that has been a precursor of economic recessions. read more
It is the first time that has happened since 2019, while the broader rise in global yields means that the $18 trillion pile of negative-yielding bonds that existed a few years ago - where investors paid for the privilege of lending - is now almost gone.
U.S. yield curve inverts
There has also been a 9% drop in Japan's 'safe-haven' yen versus the dollar this month, the biggest plunge by a G10 currency since the pound's Brexit beating of 2016.
The yen's slightly smaller 6% quarterly fall and a 2% drop by the euro means the dollar will score its third straight quarterly rise against its major peers, although it is actually down against emerging market units despite the anxiety caused by events in Ukraine.
The rouble lost nearly half its value in the immediate aftermath of the Ukraine invasion, but tight capital controls and central bank interventions since have left it down a more manageable 15% for the year.
Morgan Stanley's veteran Head of Asia Macro Strategy, Min Dai, has been left dazed by it all. "For someone who has been following EM for most of my career, what happened in the past month is beyond belief," he said.
Emerging markets in 2022
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Additional reporting by Saikat Chatterjee and Dhara Ranasinghe in London
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., January 10, 2022. REUTERS/Brendan McDermid/File Photo
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NEW YORK, March 29 (Reuters) - A closely monitored section of the U.S. Treasury yield curve inverted on Tuesday for the first time since September 2019, a reflection of market concerns that the Federal Reserve could tip the economy into recession as it battles soaring inflation.
For a brief moment, the yield on the two-year Treasury note was higher than that of the benchmark 10-year note . That part of the curve is viewed by many as a reliable signal that a recession could come in the next year or two.
The 2-year, 10-year spread briefly fell as low as minus 0.03 of a basis point, before bouncing back above zero to 5 basis points, according to data by Refinitiv.
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While the brief inversion in August and early September 2019 was followed by a downturn in 2020, no one foresaw the closure of businesses and economic collapse due to the spread of COVID-19.
Investors are now concerned that the Federal Reserve will dent growth as it aggressively hikes rates to fight soaring inflation, with price pressures rising at the fastest pace in 40 years.
“The movements in the twos and the tens are a reflection that the market is growing nervous that the Fed may not be successful in fostering a soft landing," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.
Western sanctions imposed on Russia after its invasion of Ukraine has created new volatility in commodity prices, adding to already high inflation.
Fed funds futures traders expect the Fed's benchmark rate to rise to 2.60% by February, compared to 0.33% today. FEDWATCH
Some analysts say that the Treasury yield curve has been distorted by the Fed's massive bond purchases, which are holding down long-dated yields relative to shorter-dated ones.
Short and intermediate-dated yields have jumped as traders price in more and more rate hikes.
Another part of the yield curve that is also monitored by the Fed as a recession indicator remains far from inversion.
That is the three-month , 10-year part of the curve, which is currently at 184 basis points.
Either way, the lag from an inversion of the two-, 10-year part of the curve to a recession is typically relatively long, meaning that an economic downturn is not necessarily a concern right now.
"The time delay between an inversion and a recession tends to be, call it anywhere between 12 and 24 months. Six months have been the shortest and 24 months has been the longest so it’s really not something that is actionable for the average folks," said Art Hogan, chief market strategist at National Securities in New York.
Meanwhile, analysts say that the U.S. central bank could use roll-offs from its massive $8.9 trillion bond holdings to help re-steepen the yield curve if it is concerned about the slope and its implications.
The Fed is expected to begin reducing its balance sheet in the coming months.
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Reporting by Chuck Mikolajczak and Karen Brettell; Additional reporting by John McCrank; Editing by Alden Bentley and Nick Zieminski
New York (CNN Business)The worker shortage has been a hallmark of the pandemic economy -- and it's far from getting resolved. In February, US businesses had 11.3 million job openings to fill, slightly more than economists had predicted.
There were more available jobs in arts, entertainment and recreation, educational services and with the federal government last month.
Meanwhile, the number of Americans quitting their jobs inched up to 4.4 million in February -- slightly higher than in the prior month, but below the November peak of 4.5 million. More workers quit retail, manufacturing and state and local government education jobs. Fewer people quit finance and insurance jobs.
Companies hired 6.7 million people in February.
The US labor market has come a long way from the early days of the pandemic, when more than 20 million Americans lost their jobs. For now, it is still going strong. The next look at the employment situation is due on Friday when the BLS releases the March jobs report.
"Should Friday's payrolls report disappoint, it is down to a lack of supply of workers to fill the jobs available rather than any issue with demand," said James Knightley, chief international economist at ING.
The labor shortage has left businesses struggling to find staff, despite offering higher wages. Salaries have been on the rise, supporting consumer spending even amid rampant inflation. In February, the pace of price increases matched a level not seen in 40 years, according to the latest Consumer Price Index data.
"In a service sector economy, the biggest cost is your workforce. Given clear evidence of corporate pricing power this means inflation will stay higher for longer as firms pass higher costs onto their customers," Knightley said.
The strong labor market, where many workers who quit move on to jobs with better pay or benefits, stands at odds with consumers' worries about rising prices.
In March, US consumer confidence ticked higher following declines at the start of 2022, data from The Conference Board showed Tuesday.
That's a promising sign that the economy continued to grow in the first three months of the year, said Lynn Franco, senior director of economic indicators at The Conference Board.
But there are dark clouds on the horizon.
"Expectations... weakened further with consumers citing rising prices, especially at the gas pump, and the war in Ukraine as factors," Franco said. "Meanwhile, purchasing intentions for big-ticket items like automobiles have softened somewhat over the past few months as expectations for interest rates have risen."
(CNN)The US Food and Drug Administration has expanded the emergency use authorization of the Pfizer and Moderna Covid-19 vaccines to allow adults age 50 and older to get a second booster as early as four months after their first booster dose of any Covid-19 vaccine.
The move extends the availability of additional boosters to healthy older adults. The FDA had previously allowed additional shots for anyone 12 years of age or older who was severely immune deficient. This group of people can now receive a three-dose primary series and two boosters -- a total of five doses.
"Current evidence suggests some waning of protection over time against serious outcomes from COVID-19 in older and immunocompromised individuals. Based on an analysis of emerging data, a second booster dose of either the Pfizer-BioNTech or Moderna COVID-19 vaccine could help increase protection levels for these higher-risk individuals," said Dr. Peter Marks, director of the FDA's Center for Biologics Evaluation and Research, in a news release. "Additionally, the data show that an initial booster dose is critical in helping to protect all adults from the potentially severe outcomes of COVID-19. So, those who have not received their initial booster dose are strongly encouraged to do so."
The FDA said in making its decision, it had determined that the known and potential benefits of second boosters outweigh the known and potential risks for these populations.
The US Centers for Disease Control and Prevention is expected to follow with what's known as a permissive recommendation -- a statement that the shots may be used in this age group for those who want them. The agency is not expected to officially recommend the shots, however.
Should the CDC fail to issue a clear endorsement for second boosters, it would punt the work of weighing the risks and benefits of another vaccine dose to individuals, and it has caused no small amount of consternation for some vaccine advocates who say the marginal extra protection some may get won't be worth the confusion fourth doses create.
Dr. Megan Ranney, an emergency medicine physician who is the academic dean of Brown University's School of Public Health, says that throughout the pandemic, officials have been faced with making policy before they've had enough evidence to back it. Ranney sees this as another example.
She says it's not clear whether everybody needs a fourth dose right now, but having these approvals in place will provide flexibility to roll more boosters out quickly if they're needed.
"I see this approval from the Biden administration as being an insurance policy on their part," Ranney says. "It's a way to allow people to get the vaccine or the additional booster. But it also provides them with the flexibility so that should BA.2 be worse than we're expecting, they can then quickly roll it out. or God forbid, should there be another variant in the next couple of months that requires another booster they can quickly roll it out. So I'm reading it that way," Ranney said.
There is general scientific agreement that third doses help strengthen immunity against severe illness from the virus that causes Covid-19. But the science is far from settled on if, or even when, fourth doses might be needed since the vaccines continue to offer a high degree of protection against Covid-19 hospitalization and death, even as protection against illness wanes.
Much of the evidence examining the safety and effectiveness of a second booster shot comes from Israel, which has been recommending a fourth dose of coronavirus vaccine to adults age 18 and older since the end of January.
The FDA said that in making its decision it had reviewed data from Israel's Ministry of Health on more than 700,000 people ages 18 and up who had received second boosters of the Pfizer-BioNTech vaccine at least four months after their first booster. More than 600,000 of those people were over the age of 60. The agency said that data had revealed no new safety problems tied to a fourth dose.
The FDA said data on the safety of the Moderna boosters, when used as a fourth dose, comes from a study of 120 people ages 18 and older who got a fourth dose of the vaccine at least four months after their third shot of the Pfizer vaccine. No new safety concerns were identified in the three weeks following the last dose.
Some of the data the FDA relied on to make its decision comes from previously published studies.
In a large study of more than half a million adults over the age of 60, those who received a second booster, or fourth dose, of a Covid-19 vaccine had 78% lower odds of death during the Omicron wave compared to those who had a third shot at least four months earlier. But the numbers of deaths were relatively low in both groups. After 40 days of follow up, there were 232 total deaths out of nearly 234,000 people who'd only had three doses of the Pfizer-BioNTech vaccine, compared with 92 deaths out of 328,000 people.
A smaller study of health care workers, which included younger adults, found that fourth boosters were safe and restored antibodies to the same levels reached after third doses. But fourth doses were only moderately effective -- about 30 to 40% -- at preventing illness. And most of the workers who got sick still had high viral loads, suggested that they were capable of transmitting the infection to others.
Additional studies from the UK show that the antibody boost from a booster dose wanes very quickly, within a matter of weeks. So some experts feel that considering available resources and the diminishing appetite to continue to get more and more boosters, that the United States should wait until there's a clear danger from a new wave of infections to roll out fourth doses. Some see the likely timing of that to be next fall.
"If you have only one bullet in your gun to shoot, I would prefer to hold fire until the fall, because that's when cases may really start to increase," said Dr. William Schaffner, an infectious disease expert at Vanderbilt University.
Since January, Americans ages 12 and older have been eligible for a third vaccine dose, but only 46% of that demographic group has had a third shot.
Schaffner says he's worried that fourth doses will just confuse people who haven't yet decided to get a third dose.
"I'm very concerned about dividing and not being able to conquer because the messaging will get very, very confusing," he said, "And so I think public health officials and clinicians ought to be continuing to focus on getting the third dose into people who are eligible."
Job openings last month remained near record levels, and the number of workers voluntarily leaving their positions increased, the Labor Department said on Tuesday.
The data, released as part of the agency’s monthly report on job openings, layoffs and quitting, serve as indicators of how much demand there is for workers in the U.S. economy and the extent to which employers are still struggling with labor shortages months after the economy began recovering from the pandemic’s worst damage.
There were about 11.3 million job openings in February, essentially the same as the month before and down a little from a record in December, though the number of hires overall edged up by 263,000 last month, to about 6.7 million.
After falling during the peak of Covid-19 lockdowns in 2020, the rates at which so-called prime-age workers — those aged 25 to 54 — are working or seeking work has rallied back to prepandemic levels. Yet with the economy growing faster than in decades, demand for labor has outpaced the availability of workers — at least at the wages and benefits employers are offering.
There are still roughly three million or so people who have not returned to the work force, according to the government data.
“Looking at how poorly our labor force has grown so far this year, if companies want to win the war for talent they need to engage the people who may not be actively seeking work right now, or be the first option people see when they do return,” Ron Hetrick, a senior economist at Emsi Burning Glass, a data and research company, wrote in a note.
That echoes the sentiment of many unions and labor activists, who have been saying that even though wage growth has picked up, people aren’t feeling valued enough by employers. It’s led to fresh questions about how bosses might get to know the “love language” of their hires and find sometimes unconventional ways to show them that they care. There are also more straightforward requests: Several progressive economists have noted that employers could, for instance, take some jobs generally expected to be low-wage — such as fast food service and cashiers — and entice workers by offering higher pay and better benefits.
Large public companies and small businesses alike often say that they have already substantially raised pay from before the pandemic and that with inflation raging at highs unseen since the early 1980s, raw material and other costs have made business more difficult. An expensive surge in commodity markets suggests that price increases for food and energy could worsen, especially if firms raise prices further.
Still, despite widespread frustration with inflation and shortages of some products and materials, some surveys suggest businesses are becoming more optimistic about the future. The MetLife and U.S. Chamber of Commerce Small Business Index recently reached a pandemic-era high, with about three in five of the small business owners surveyed saying their business is in good health.
Moscow does not say if bondholders must take roubles
Russia has already demanded gas payments in roubles
Move may help locals facing dollar payment restrictions
LONDON, March 29 (Reuters) - Russia retaliated in what it has called an "economic war" with the West on Tuesday by offering to buy back its $2 billion Eurobonds maturing next month in roubles rather than dollars.
The finance ministry offer on Eurobonds maturing on April 4, Russia's biggest debt payment this year, follows Western moves to tighten sanctions against the country over its invasion of Ukraine and to freeze Moscow out of international finance.
Moscow, which calls its actions in Ukraine a "special military operation", says Western measures amount to "economic war". In response, it has already demanded foreign firms pay for Russian gas in roubles rather than dollars or euros. read more
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It was not immediately clear if bondholders would be forced to accept roubles if they rejected the offer, a move that would break the terms of the bond and would again raise the prospect of Russia's first external sovereign default in a century.
Creditors said it might be aimed at helping Russian holders who now face restrictions in receiving dollar payments.
"This is a tender offer and not a final decision that these bonds will be paid in roubles. Perhaps, Russian authorities want to gauge investors’ willingness to accept payment in roubles?" said Seaport Global credit analyst Himanshu Porwal.
Tim Ash of BlueBay Asset Management, which is not a bondholder, said the move was part of a fight back by Russia's central bank and finance ministry "to fend off default and stabilise markets and the rouble".
Ash said the United States' Office of Foreign Assets Control (OFAC), which enforces U.S. sanctions, "should make clear" it will not extend a deadline of May 25 for U.S. individuals or entities to receive payments on Russian sovereign bonds.
Russia's finance ministry said in its statement on Tuesday that bondholders should submit requests to sell their holdings to the National Settlement Depository between 1300 GMT on March 29 and 1400 GMT on March 30.
SECURING PAYMENT
The Eurobonds would be bought at a price equivalent to 100% of their nominal value, it said.
A fund manager said the ministry's offer might be designed to help Russian investors secure payment because Euroclear, an international settlement system, had been blocking dollar payments to the Russian clearing system.
"Everybody wants dollars right now – in and outside Russia – so I would assume that only local holders and local banks that have issues with sanctions will make use of this operation," said Kaan Nazli, portfolio manager at Neuberger Berman, which recently reduced its exposure to Russian sovereign debt.
Nazli, who said he had not previously seen a buyback that switched the repayment currency, added that foreign investors were unlikely to be interested given the rouble "is no longer a convertible currency."
The rouble initially crumbled after the West imposed sanctions, plunging as much as 40% in value against the dollar since the start of 2022. It has since recovered and was trading down about 10% in Moscow on Tuesday.
The finance ministry did not provide a breakdown of foreign and Russian holders of the Eurobond-2022. It did not respond to a request about how much of the outstanding $2 billion it wanted to buy back or what would happen if investors refused the offer.
The bond has a 30-day grace period and no provisions for payments in alternative currencies, JPMorgan said.
According to Refinitiv database eMAXX, which analyses public filings, major asset managers such as Brandywine, Axa, Morgan Stanley Investment Management, BlackRock were recently among the holders of the bond coming due on April 4.
The finance ministry had said earlier on Tuesday it had fully paid a $102 million coupon on Russia's Eurobond due in 2035, its third payout since Western sanctions called into question Moscow's ability to service its foreign currency debt.
Russian sovereign debt repayments have so far gone through, staving off a default, although sanctions have frozen a chunk of Moscow's huge foreign reserves. Russian officials have said any problem with payment that led to a formal declaration of default would be an artificial default.
Russia's next payment is on March 31 when a $447 million payment falls due. On April 4, it also should pay $84 million in coupon a 2042 sovereign dollar bond . read more
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Reporting by Reuters; Writing by Edmund Blair; Editing by Alexander Smith and Carmel Crimmins
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March 28 (Reuters) - Tesla's (TSLA.O) announcement on Monday that it will seek shareholder approval to increase its share count in order to enable a stock split adds to a recent wave of megacap companies splitting their shares in a bid to attract more investors.
Tesla said in a filing it would hold a vote at its upcoming annual shareholder meeting to increase the number of authorized shares in order to enable a stock split. read more
A stock split by Tesla, which would have be approved by its board of directors, would be the electric car maker's second since 2020, and it would follow stock split announcements by other major U.S. companies in recent years.
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In the past two years, Apple (AAPL.O), Nvidia (NVDA.O) and Tesla (TSLA.O) have split their shares, while Amazon (AMZN.O) and Google-parent Alphabet (GOOGL.O) have recently announced upcoming share splits.
Megacap stock splits
Companies split their shares to make their stock prices appear less expensive and appeal to more investors. However, splitting a stock does not affect its underlying fundamentals.
Still, BofA Global Research said in recent research note that stock splits "historically are bullish" for companies that enact them, with their shares marking an average returns of 25% one year later versus 9% for the market overall.
Tesla's stock surged 8% on Monday, adding over $100 billion to its stock market value.
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Amazon has gained about 20% since March 9, when the ecommerce heavyweight announced a stock split that will take effect on June 6. That compares to a 7% gain in the Nasdaq (.IXIC) during the same period. During that time, Wall Street has also seen a broad rebound in megacap growth stocks following losses earlier this year, as well as volatility related to rising interest rates and Russia's invasion of Ukraine.
Tesla was the most traded stock among Fidelity's online brokerage customers on Monday, with buy and sell orders almost evenly split, suggesting retail investors are cautious about the company.
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Since joining the S&P 500 in December 2020, Tesla has been one of its most heavily weighted stocks, currently accounting for over 2% of the index. It has gained about 300% since announcing its first stock split in August 2020.
Other S&P 500 companies with nominally high share prices, which analysts say could hint at a future stock split announcement, include Chipotle Mexican Grill (CMG.N), up 0.1% on Monday at $1,558, as well as Booking Holdings (BKNG.O), trading near flat at about $2,247.
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Reporting by Noel Randewich; Editing by Cynthia Osterman
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