FT : Switzerland could lose wealth crown to Hong Kong, UBS chief warns

Switzerland could lose wealth crown to Hong Kong, UBS chief warns
Sergio Ermotti says banks must compete internationally as debate rages over direction of country’s financial reforms

UBS chief executive Sergio Ermotti has warned that Switzerland risks being overtaken as the world’s wealth management hub if policymakers overreact to the fall of Credit Suisse. 

Ermotti, who was drafted back in as head of Switzerland’s biggest lender just days after it rescued its former rival last year, said the country needed its banks to be able to compete globally.

“Hong Kong, Singapore and the US are aggressively competing, and making great progress, for the offshore wealth management crown that Switzerland holds today,” he said during a speech at Lucerne university on Tuesday evening.

“We cannot be complacent and pretend that having just local banks compete fiercely domestically will be sufficient.”

Ermotti and UBS have become involved in an increasingly fractious debate with Swiss authorities in the aftermath of Credit Suisse’s collapse over the future direction of financial reform in the country.

The main sticking point between the two sides is whether banks with international subsidiaries should be required to hold additional capital, a measure proposed this year by the Swiss treasury department in a move that would mainly affect UBS.

Analysts predicted that the rule change could lead to between $15bn and $25bn of additional capital requirements for UBS, with finance minister Karin Keller-Sutter indicating that the estimates were “plausible”.

Ermotti and UBS chair Colm Kelleher have previously spoken out against the need for additional capital. They have also rejected criticism that the combined UBS and Credit Suisse is too big for the Swiss economy.

“There are too many uninformed, populist and fear-mongering voices in the media, politics and academia, including here at this university, focused exclusively on the danger of having a large bank based in our country,” Ermotti said in Lucerne.

During his speech, Ermotti displayed a slide that showed Hong Kong’s wealth management sector was expanding at a compound annual growth rate of 7.6 per cent to and was set to overtake Switzerland by 2027, while Singapore’s was growing at 9 per cent and was on course to be in third place.

“Foreign financial centres would benefit if Switzerland were to restrict its ability to maintain a leading presence abroad,” said Ermotti. 

“To maintain Switzerland’s lead, the nation’s financial and industrial ecosystem must include a globally relevant participant. Today that is UBS.”

During the speech, Ermotti drew on the life of Credit Suisse founder Alfred Escher as an example of an entrepreneur who took calculated risks, in the first time he has sought to claim the 19th-century industrialist for UBS.

>>> Gyre Therapeutics Announces Publication in Journal of Gastroenterology and H

Gyre Therapeutics Announces Publication in Journal of Gastroenterology and Hepatology (10.80 -0.73)
SAN DIEGO, June 18, 2024 (GLOBE NEWSWIRE) -- Gyre Therapeutics ("Gyre") (Nasdaq: GYRE), a clinical-stage, self-sustainable biotechnology company developing anti-fibrotic therapeutics for a variety of chronic organ diseases, today announced the publication of the manuscript titled "Hydronidone induces apoptosis in activated hepatic stellate cells through endoplasmic reticulum stress-associated mitochondrial apoptotic pathway" in the Journal of Gastroenterology and Hepatology. This publication includes both in vivo and in vitro studies supporting the potential of hydronidone (F351), a novel derivate of pirfenidone, as a promising therapy for the treatment of liver fibrosis.

--> https://www.briefing.com/InPlayEq/NewsDoc.html?id=6791061

>>> US Close Dow +0.15% S&P +0.25% Nasdaq +0.03% Russell +0.16%

Closing Stock Market Summary
The S&P 500 and Nasdaq Composite extended their record highs today in front of the holiday tomorrow. Bond and equity markets are closed Wednesday for Juneteenth.

There wasn't a lot of conviction from either buyers or sellers in front of the break and due to the understanding that stocks continue to hit all-time highs. Advancers had a 4-to-3 lead over decliners at the NYSE while decliners led advancers by the same margin at the Nasdaq.

Many of the top-weighted S&P 500 components closed with losses, keeping the broader market in check. Apple (AAPL 214.29, -2.38, -1.1%), Microsoft (MSFT 446.34, -2.03, -0.5%), and Meta Platforms (META 499.49, -7.14, -1.4%) were some losing standouts in that respect.

A solid jump in shares of NVIDIA (NVDA 135.58, +4.60, +3.5%) provided some offsetting support. The stock was responding to news that Delloite announced a collaboration with Hewlett Packard Enterprise (HPE 21.84, +0.31, +1.4%) and NVIDIA on co-developed generative AI solutions.

Gains in some of the aforementioned names boosted the information technology sector (+0.6%) toward the top of the leaderboard today. The financial sector was another top performer, gaining 0.6%.

Meanwhile, the consumer discretionary sector was among the top laggards, dropping 0.4%, due in part to weakness in homebuilder stocks after Lennar (LEN 148.72, -7.79, -5.0%) reporting earnings. Selling in the stock was related to disappointing outlook for a sequential decline in orders.

Treasury yields moved lower today. The 10-yr note yield settled six basis points lower at 4.22% and the 2-yr note yield declined six basis points to 4.70%.

This price action followed a batch of mixed economic data that included weaker-than-expected retail sales, stronger-than-expected industrial production, and in-line business inventories. Treasuries were also reacting to today's impressive $13 billion 20-yr bond reopening.

  • Nasdaq Composite: +19.0% YTD
  • S&P 500:+15.0% YTD
  • S&P Midcap 400: +5.3% YTD
  • Dow Jones Industrial Average: +3.0% YTD
  • Russell 2000: -0.1% YTD

Reviewing today's economic data:
  • May Retail Sales 0.1% (consensus 0.3%); Prior was revised to -0.2% from 0.0%; May Retail Sales ex-auto -0.1% (consensus 0.2%); Prior was revised to -0.1% from 0.2%
    • The key takeaway from the report is that it reflects some slowing in consumer spending on goods that will be accounted for in weaker Q2 real GDP forecasts.
  • May Industrial Production 0.9% consensus 0.4%); Prior 0.0%; May Capacity Utilization 78.7% (consensus 78.5%); Prior was revised to 78.2% from 78.4%
    • The key takeaway from the report was that gains were widespread across the major market groups, with particular strength in manufacturing output that should mitigate hard-landing concerns.
  • April Business Inventories 0.3% (consensus 0.3%); Prior -0.1%

Wednesday's calendar features the release of the weekly MBA Mortgage Applications Index at 7:00 ET and the June NAHB Housing Market Index at 10:00 ET.

WSJ : Solar Energy Faces Cloudy Prospects on Warehouse Rooftops

Solar Energy Faces Cloudy Prospects on Warehouse Rooftops
Installations are growing, but experts say the benefits of solar panels on rooftops come with significant costs

Industrial real-estate companies have been showing more interest lately in the roofs of their structures, where warehouse operators are looking to cut energy costs, reduce emissions and even make money from the sprawling and mostly unused space by installing solar panels.

Matt Schlindwein is taking his time adopting the technology, however. The managing partner of East Brunswick, N.J.-based industrial real-estate firm Greek Real Estate Partners said a fraction of the more than 300 warehouses he manages in the Northeast have solar panels on their roofs.

That’s largely because the highly-touted benefits of solar power run up against serious costs as the panels are brought in: The installations are expensive, he said, and there’s a risk that the heavy panels could damage the building.

“Number one for a tenant occupying a large-scale industrial warehouse building is a good floor, not a leaky roof,” Schlindwein said. For the past decade, “the amount of benefit that the landlord could have from doing solar was limited,” he said.

Schlindwein isn’t the only real-estate executive with concerns about the hot technology. Warehouse operators across the U.S. have been cautious about installing the panels on their roofs, even as companies have gotten attention for installations on shopping malls, self-storage buildings and distribution centers.

Commercial buildings in the U.S. installed 1,913 megawatts of solar power in 2023, up from 1,034 megawatts installed in 2014, according to trade group Solar Energy Industries Association and research firm Wood Mackenzie. That compared to 40,290 megawatts installed nationwide last year across all residential, commercial, community and utility projects.

Low electricity prices and high costs for the green technology have made it difficult for landlords to justify the investment, industry experts say. Structuring the deals can be complicated, with landlords reluctant to take on the cost of an installation when the financial payoff may come years after the average five-year tenant warehouse lease.

Schlindwein said deals involving solar installations have gotten more creative. He’s been setting up more solar-panel arrays over the past two years under agreements with solar-energy operators that lease the roof space directly from the landlord, for instance. Those companies set up and manage the panels and send the energy generated to local utility companies and customers.

That deal structure offsets some of the risk by creating a new source of revenue, Schlindwein said.

“It’s enough that it’s motivating to want to consider doing it,” he said. “You still have the same concerns that you used to have, but you’re getting enough of a benefit that you’re willing to overcome those concerns and make the jump and do it.”

For warehouse operators, solar installations offer a possible solution to a longstanding problem: how to make use of the sometimes-vast acreage on top of their buildings. In addition to solar panels, some developers have added parking to roofs or designed skylights to bring in natural light and cut electricity costs.

Prologis, the world’s largest industrial real-estate operator, has installed more than 500 megawatts of solar power across its portfolio as it works toward a goal of generating a gigawatt of solar power worldwide by 2025. But the solar installations still represent just 5% of the company’s buildings worldwide, said Vibhu Kaushik, global head of utilities and energy storage at Prologis.

“We have a lot of room to go,” Kaushik said.

Kaushik said the warehouse’s location determines whether the math works.

In Illinois, for example, electricity cost about 11 cents per kilowatt hour for commercial customers as of March, according to the U.S. Energy Information Administration. Kaushik said that’s less than the approximately 12 cents per kilowatt hour in that state for solar power.

By contrast, electricity in California cost nearly 24 cents per kilowatt hour in March, according to the EIA, while Kaushik said solar power there costs about 11 cents.

“States where energy is expensive, solar will pencil out easier. Where energy prices are still cheap, it may not,” he said. “You can come up with a handful of states across the U.S.—you can count them on your fingers—that it actually pencils out.”

Other factors are beyond developers’ control. The return on investment also depends on how sunny it is in a particular location, Kaushik said, noting solar panels produce far more energy on average in Southern California than in Seattle.

WSJ : Millions of Americans Brace for Dangerous Heat Wave, Record-Breaking Tempe

Millions of Americans Brace for Dangerous Heat Wave, Record-Breaking Temperatures
Triple-digit temperatures are expected across much of the Midwest, mid-Atlantic and New England

Record-breaking heat is expected to sweep across a swath of the Midwest and Northeast U.S. this week, leaving millions sweltering under dangerously high temperatures.

Scorching heat was seen from the Ohio Valley up to parts of Western New York Monday, breaking records in several areas.

More than 60 million people were under heat advisory warnings early Tuesday, according to the National Weather Service. Temperatures are expected to creep up into the weekend as the so-called heat dome intensifies, Marc Chenard, a meteorologist with the NWS said.

A heat dome occurs when high-pressure atmospheric conditions trap heat over an area, creating a “dome” of stagnant, hot air.

The weather service was predicting the mercury to hit triple digits across much of the Midwest, mid-Atlantic and New England by Thursday and warned people to stay indoors and limit physical activities.

“This heat wave is already ongoing but is really going to ramp up over the next few days,” Chenard said. “Multiple days in the high 90s and low 100s can really take its toll, especially when things don’t seem to be cooling much at night.”

Manchester, N.H., and New Brunswick, N.J., were forecast to see temperatures in excess of 101 degrees Fahrenheit on Thursday and Friday, Chenard said, highs not seen for decades.

The heat index—a value that combines the effects of air temperature and relative humidity to represent the perceived temperature—is expected to soar above 105 degrees Fahrenheit in many places.

Residents in large metropolitan areas including Chicago, St. Louis, Indianapolis, Detroit, Philadelphia, Boston and New York City were warned to expect extreme heat, the NWS said in an advisory. The weather service also said there may be power outages around the country due to prolonged heat.

In New York City, utility Consolidated Edison asked customers to limit usage of large appliances such as dishwashers and dryers between 2 p.m. and 10 p.m. “We’ll be doing everything possible to keep your power reliable,” it said in an email to customers Tuesday. “You can help, too.”

The latest heat wave follows record-breaking temperatures in parts of California and the Southwest earlier this month, when cities including Phoenix and Las Vegas saw temperatures top 110 degrees.

Both extreme weather systems have come much earlier in the summer season than usual. Last year was Earth’s hottest year on record, fueled by rising greenhouse-gas emissions. More than 2,300 people died of heat-related causes in the U.S. in 2023, according to the U.S. Department of Health and Human Services.

On Monday, more than a dozen unions and environmental groups urged the Federal Emergency Management Agency to recognize extreme heat and wildfire smoke as major disasters. Doing so, the groups said in a letter, would unlock funds to help cities and towns build cooling centers, air-filtration systems and other equipment to prepare for climate emergencies.

WSJ : Stellantis Recalls 1 Million Vehicles Over Rear-Camera Issues

Stellantis Recalls 1 Million Vehicles Over Rear-Camera Issues
Chrysler Pacificas and Jeep Grand Cherokees are part of recall

Stellantis has issued a safety recall for more than one million vehicles in the U.S. with rear-view-camera issues that could increase the risk of a crash.

Federal regulators said in a letter that the recall affects vehicles fitted with a radio software which may stop the rear-view camera’s image from displaying, thus decreasing a driver’s overall rear visibility.

A representative for Stellantis said Tuesday that the company has already provided over-the-air updates for software on more than 735,000 of the affected vehicles and is pursuing updates for the rest. A request to accept the update will appear on the media screens of affected vehicles, the representative said.

The recall covers 2021-2023 Chrysler Pacificas and Jeep Grand Cherokees, 2021-2022 Dodge Durangos, 2022-2023 Ram Promasters and Jeep Compasses, Wagoneers and Grand Wagoneers, and 2022 Ram 1500s, 2500s and 3500s.

The National Highway Traffic Safety Administration said dealers will update the radio software at issue for free.

According to Stellantis, the recall was prompted by a routine review of customer feedback that uncovered the radio-software issue. The company said it is unaware of any injuries or accidents related to the software issue at this time.

WSJ : Los Angeles School District Votes in Favor of Cellphone Ban

Los Angeles School District Votes in Favor of Cellphone Ban
Implementing the ban in one of the country’s largest school districts could be a challenge

The Los Angeles Unified School District voted Tuesday to ban cellphones during the entire school day, becoming the largest school system to take such a step in an era of concern about youth cellphone use and social-media addiction.

Actually keeping students off their phones, however, could be a challenge.

Los Angeles, like most districts, currently has a policy prohibiting phone use during class time while allowing devices during lunchtime and breaks. Implementation has varied from classroom to classroom, and teachers find it difficult to police without consistent consequences.

The move by the Los Angeles school board, which voted 5 to 2 in favor of the ban, clears the way for school leaders to create a policy on how to ban devices that would take effect by January. The extent of the ban could vary by grade level, the board said.

The district will consider physically locking phones away in lockers or pouches, an approach being taken by an increasing number of schools and districts across the country. Other schools that banned smartphones have given students Light Phones, which have only calling and texting features.

Teachers nationwide are grappling with pervasive cellphone use, which students use during the day for everything from texting with parents and friends to filming fights and bullying classmates on social media.

Clark County School District, which covers Las Vegas and is the nation’s fifth largest school system, will begin requiring all sixth- to 12th-graders to keep phones in nonlocking pouches that block cell signals starting this fall. Florida and Indiana are among states that have passed laws prohibiting phones during classroom instruction, but the strength of policies still varies by district.

In Los Angeles, implementing a new policy will be a massive undertaking across 800 campuses and 414,000 students.

“The research is clear: The harmful effects on kids, mental health, the physical health, their academics,” said board member Nick Melvoin. “This is an idea whose time has come.”

Dana Gil, a high-school English teacher in Los Angeles, said students pull out their phones as soon as they feel nervous or unsure about how to do a class assignment. “It’s more of an emotional comfort,” Gil said. She would welcome the ban as a way to help students work through those roadblocks without their phones and learn how to socialize with peers.

Some teachers and parents say a cellphone ban is the only way to regain control of the classroom. A ban would keep students focused and off social-media platforms that can be harmful to young people. The U.S. Surgeon General this week called for warning labels on social-media platforms to remind parents that social media hasn’t been proven safe.

Other parents say they need to be able to reach their children in case of an emergency. A national poll earlier this year found that only a third of public-school parents supported a ban on cellphones during the school day.

The Los Angeles school board said it would advocate for state and federal legislation limiting smartphone use at school.

Several Los Angeles teachers and parents spoke in favor of the ban during Tuesday’s school board meeting, saying it was difficult to curb cellphone use in class.

Malinda Marcus, an eighth-grade teacher at William Mulholland Middle School in Los Angeles, said students become belligerent when she has to take away their phones.

“My students will resort to any means necessary to sneak a peek at their phone during class,” she said. “The time I have spent policing phone use could’ve been better spent on helping students recover from Covid learning loss.”

Some board members expressed reservations on the ban because the policy could have an adverse impact on lower-income students and could be difficult to enforce.

“It’s a civil right to have your cellphone,” said board member George McKenna.

Neel Thakkar, who will be a senior this fall at a San Fernando Valley charter school, said he is constantly surrounded by cellphones at school and he supports the ban. He doesn’t know if his classmates will feel the same.

“High school students just look in the short term,” Thakkar said, and aren’t as aware of the studies showing the harms of social-media use on mental health. “They’re focused on the instant gratification.”