FT : White House weighs tougher visa restrictions for foreign workers

White House weighs tougher visa restrictions for foreign workers
Trump administration officials met this week to discuss a possible executive order

The Trump administration is weighing a significant expansion of current visa restrictions for foreign workers, widening the scope to include the highly skilled workers relied on by industries ranging from tech to tourism.

Several of President Donald Trump’s cabinet members and top advisers met on Tuesday afternoon to discuss a possible executive order to suspend the issuance of visas to several classes of individuals, said four people briefed on the meeting. 

The president’s decision was still unclear, and groups within the White House were pushing different recommendations, they cautioned. However, business groups are growing increasingly concerned that the expected restrictions would go beyond renewing a 60-day ban on new “green card” immigrant visas that Mr Trump announced in April, and which expires on Monday. 

Lobbyists said they increasingly expect the president to impose a “pause” on the issuance of new H-1B, H-2B, H4 EAB and L1 intracompany transfer visas, either for an initial 60 days, or for more than 120 days. 

They said they were not expecting the executive order to affect people already in the US or waiting to fly back into the country on such visas. Companies remain hopeful that the executive order would include some exemptions for healthcare workers and those involved in the food supply chain.

The move is likely to be framed as an attempt to encourage US companies to hire Americans left unemployed by coronavirus, but lawyers and lobbyists have pushed back.

“Most of this doesn’t help the economy one bit — the H-1B, H-2B and J sectors are not the ones where unemployment rates are really high right now,” said a lawyer familiar with the talks, calling the proposal under discussion “just another way for the anti-immigrant groups to advance their agenda”. 

Business groups and executives have intensified their lobbying in recent weeks, warning Mr Trump, his son-in-law and adviser Jared Kushner and other officials that restricting the influx of skilled workers would damage US companies further at a time when the coronavirus has triggered a historic economic crisis. 

“There is a lot of pushback [from business], including directly to the president,” said Jeremy Robbins, executive director of New American Economy, a bipartisan think-tank. 

Other business representatives in Washington said they expected any executive order to be challenged in court, as many of Mr Trump’s other immigration orders have been. On Thursday, the US Supreme Court blocked his administration’s attempt to rescind a ban on deporting 700,000 unauthorised immigrants who came to the US as children.

Universities have also lobbied hard against any ban on the Optional Practical Training visas, used by many international students entering the US, warning that it could cut off a lucrative revenue stream on which some institutions have come to depend. It was not immediately clear whether the White House would include student visas in the clampdown.

H-1B visas — commonly associated with the technology and consulting industries but also used by companies in other sectors from retailing to manufacturing — are usually issued on October 1. An extended delay could affect every company looking to bring people in on these visas this year. 

“That pause is going to be a jobs programme for Canada,” warned one lobbyist, who said companies would have to locate the people they had planned to bring to the US north of the border. Cities from Toronto to Vancouver had been pitching themselves to US companies as attractive alternatives to navigating an increasingly hostile US immigration system. 

Two people briefed on the administration’s discussions said they had included a proposal to raise the fee for applications and renewals of certain categories of visa to as much as $20,000 but that this had been shelved. 

Stephen Miller, a hardline White House aide who is close to Mr Trump, Ken Cuccinelli, the acting director of US citizen and immigration services, and Chad Wolf, acting homeland security secretary, were among those pushing for tougher restrictions, several people said.

The White House did not immediately respond to a request for comment. 

FT : Mega-dealmaker Hannam pivots from M&A to PPE

Mega-dealmaker Hannam pivots from M&A to PPE
Ex-JPMorgan banker buys China mask factory in anticipation of second virus wave

Ian Hannam: From M&A to PPE
The verb “to pivot” is commonly heard in business circles, as companies seek to adjust to the new normal. But there’s pivoting and there’s what corporate financier Ian Hannam has done: he’s turned from offering advice on huge mining mergers to setting up testing stations to check for Covid-19 antibodies. The former JPMorgan banker now has his own advisory business, Hannam & Partners — and one of those partners, Hamish Clegg, has become chief executive of Pyser Testing, which began operations this week at the Honourable Artillery Company in the City of London. Former squaddies, already healthcare trained, are doing double tests (an instant one and a follow up, endorsed by Public Health England) at a seemingly competitive £120 a go. Hannam has told friends he’s convinced a second wave of the virus will hit us hard. So he’s also taken the step of buying an actual Chinese mask factory, the innards of which are currently being transported to the UK. A “clean room” awaits at Shipton on Stour to commence manufacturing and a BSI Kitemark has been applied for. Let’s just hope the dealmaker’s wrong.

Tom Blomfield: Monzo’s motto
As a millennial-friendly digital bank, Monzo knows that “how we communicate changes how people feel about us”. And those communication skills were on display this week as it sought to spin a smaller-than-hoped-for fundraising to customers who first backed it through crowdfunding. This investment “is great news for Monzo”, it said in an email, not mentioning the resulting 40 per cent drop in valuation. Still, while its retail backers have given up some of their gains, at least none of the venture capital firms who overpaid last summer will lose out. Firms that coughed up £13 per share last June, such as Y Combinator, are being given extra stock “to put them in the same position as if they’d invested then at a price of £7.71”. Monzo co-founder Tom Blomfield used to say “We’re here to make money work for everyone”. Clearly for some more than others.

Eric Partaker: Mexican warrior
What next for issuers of mini bonds, now the City regulator has banned the marketing of their dangerously tasty returns? Eric Partaker, co-founder of Mexican food chain Chilango, once raised money using “burrito bonds” offering a piquant 8 per cent interest. But punters found them as hard to stomach as Habanero chilli peppers when they were converted into less valuable equity, in a restructuring. Partaker insists he has grown stronger since inflicting the financial equivalent of Montezuma’s revenge. He now offers executive coaching as a self-styled “Wartime CEO”. He says: “In times of crisis, some retreat, while others advance . . . Now is the time to lead.” Burrito bond investors may wish to advance to the bathroom. 

Vernon & Shirley Hill: Metropolitan whine
Metro Bank founder Vernon Hill believes in family values. He paid his wife Shirley’s architecture firm, InterArch, £21m to design the lenders’ branches — to the consternation of City governance wonks, but not shareholders: 96 per cent backed him in a 2018 AGM vote. However, it seems a few now harbour less than familial feelings. A US lawsuit suggests up to 40 may pursue Mr & Mrs Hill for losses after their company’s profit-sharing plan was invested mainly in Metro shares, which fell 90 per cent in Mr Hill’s final year as chairman. Those 40 people? Employees of InterArch Inc. Not a happy family business.

Fwd:Briefing; WRAPX; Closing Stock Market Summary


Closing Stock Market Summary

The S&P 500 increased 0.1% on Thursday after trading near its flat line for most of the session amid mixed economic signals. The Dow Jones Industrial Average (-0.2%), Nasdaq Composite (+0.3%), and Russell 2000 (unch) also closed little changed. 

Most sectors within the S&P 500 alternated between gains and losses throughout the day. The energy sector (+1.2%) showed relative strength amid an uptick in oil prices ($38.79/bbl, +0.86, +2.3%) despite lingering coronavirus concerns, while the real estate sector (-1.3%) showed relative weakness. 

Unfortunately, the latest unemployment data didn't strike the same level of awe that the May employment report did. Initial jobless claims for the week ending June 13 remained elevated at 1.508 million (consensus 1.350 million), as did continuing claims at 20.544 million for the week ending June 6. 

Conversely, there was some noticeable improvement in other data. The Philadelphia Fed Index for June unexpectedly turned positive (27.5 actual vs. -25.0 consensus), and the Conference Board's Leading Economic Index for May increased for the first time since January (+2.8% actual vs. +2.5% consensus). 

Spotify (SPOT 225.28, +25.45, +12.7%), meanwhile, was a clear winner after the company reached separate podcasting deals with Warner Bros. for its DC content and Kim Kardashian West for her work with the Innocence Project. Spotify didn't confirm its partnership with Ms. Kardashian West, but it was first reported by The Wall Street Journal. 

In other corporate news, T-Mobile US (TMUS 106.39, +3.76, +3.7%) said it's seeing a faster-than-expected recovery in retail, Biogen (BIIB 260.30, -21.16, -7.5%) lost a patent dispute for its MS drug, and Kroger (KR 31.81, -1.00, -3.1%) shares fell 3% despite the company beating top and bottom-line estimates,

U.S. Treasuries finished mixed with longer-dated tenors closing higher. The 2-yr yield was unchanged at 0.19%, while the 10-yr yield declined four basis points to 0.69%. The U.S. Dollar Index increased 0.3% to 97.47 amid relative weakness in the British pound after the Bank of England increased its asset purchase program to GBP745 billion.

Reviewing Thursday's economic data:

  • Initial jobless claims for the week ending June 13 were higher than expected (and still high) at 1.508 million (consensus 1.350 million) versus 1.566 million in the prior week. Continuing jobless claims for the week ending June 6 decreased by 62,000 to 20.544 million.
    • The key takeaway from the initial claims report for some will be that the level of initial claims is lower than the week before, but the more meaningful takeaway for many is that initial jobless claims still running in the millions at this point isn't good at all.
  • The Conference Board's Leading Economic Index (LEI) increased 2.8% in May (Briefing.com consensus 2.5%) following a downwardly revised 6.1% decline (from -4.4%) in April. It was the first increase in the LEI since January.
    • The key takeaway from the report is that it is reflective of an uptick in activity as some state economies started to reopen in May, yet the uptick is relative to a very depressed base in March and April.
  • The Philadelphia Fed Index for June unexpectedly increased to 27.5 (consensus -25.0) from -43.1 in May.

Looking ahead, investors will receive the Current Account Balance for the first quarter on Friday. 

  • Nasdaq Composite +10.8% YTD
  • S&P 500 -3.6% YTD
  • Dow Jones Industrial Average -8.6% YTD
  • Russell 2000 -14.5% YTD

>>> US After Hours Summary: HOME -3%, SWBI -2.2% fall on earnings; MPC

After Hours Summary: HOME -3%, SWBI -2.2% fall on earnings; MPC +5.6% on WSJ report of possible sale of its Speedway unit

After Hours Gainers:

Companies trading higher in after hours in reaction to news: ASMB +14.9% (regains rights to all microbiome gastrointestinal programs as AbbVie terminates agreement), TRUE +9% (positive investor presentation), MPC +5.6% (WSJ report that co is in discussions with buyers for its Speedway unit), EVA +2.2% (increases distribution guidance for 2020), CHMI +1.9% (lowers dividend)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: AMSWA -4.2%, HOME -3%, SWBI -2.2%

Companies trading lower in after hours in reaction to news: BYSI -15.5% (stock offering), KRMD -14% (commences public offering of common stock), IDN -9.6% (stock offering), CLR -2.4% (provides update on voluntary production curtailments), EB -2.2% (stock offering), NH -2% (presents clinical data), AL -1.3% (announces delivery of one new Airbus A320-200neo aircraft to Atlantic Airways), TXT -0.1% (announces restructuring plan, including a 6% workforce reduction)

FT : Wirecard says €1.9bn of cash is missing

Wirecard says €1.9bn of cash is missing
Shares of payments group crash as it says a third-party may have tried ‘to deceive’ its auditor

Shares in Wirecard fell by 66 per cent when the German fintech group said that auditors at EY could not confirm the existence of €1.9bn in cash, and that “spurious cash balances” may have been provided by a third party. 

The payments group said on Thursday that there were indications a trustee of Wirecard bank accounts had attempted “to deceive the auditor and create a wrong perception of the existence of such cash balances”.

Shares in the German technology group, which only two years ago was welcomed into the prestigious Dax 30 index after registering a market value of €24bn, crashed after the announcement, valuing the company at €4bn. 

The company, which owns a Munich Bank, said it was “working intensively together with the auditor towards a clarification of the situation”. It noted that if financial statements for 2019 were not published by Friday June 19 then €2bn of loans to the company “can be terminated”. 

The result leaves in doubt the future of Markus Braun, the company’s chief executive and largest shareholder, who oversaw Wirecard’s expansion from a Munich suburb to all corners of the world.

The Financial Times reported in October that Wirecard staff appeared to have conspired to fraudulently inflate sales and profits at Wirecard subsidiaries in Dubai and Dublin and mislead EY, the group’s auditor for a decade.

Wirecard postponed the publication of its 2019 results three times since March, but since then told investors repeatedly that it “expects an unqualified audit opinion”.