Markets

By Justin Lahart WSJ Wed., March 20, 2019 The economy will probably climb out of the funk it fell into in the first quarter, and Federal Reserve knows it. But there is a difference between probably and certainly. Fed policy makers decided to leave rates on hold Wednesday, which was no surprise. The degree of their dovishness was. The statement released following their two-day meeting was downbeat on the economy, pointing to a weak February jobs report and a slower pace of retail sales and business spending. They also significantly dialed back their expectations of future rate increases. Whereas in December their median projection called for two rate increases, now they expect none and next year they think they will only raise rates once. In some respects, it seems like an overreaction. Sure, the economy has looked weak recently after being buffeted by the government shutdown, unusually inclement weather and the souring of sentiment that came with the stock … [Read more...] about The Fed Plays It Safe

By Heather Haddon WSJ Wed., March 20, 2019 General Mills Inc. boosted profit with higher prices, but sales slipped in the latest quarter for the maker of Cheerios cereal and Yoplait yogurt. That reflects the challenge big food makers face as they raise prices on products that in many cases have fallen out of favor with consumers who prefer fresh food. Excluding certain costs, Minneapolis-based General Mills on Wednesday reported an adjusted profit of 83 cents a share in the fiscal third quarter ending Feb.24, beating expectations of 69 cents a share. But sales volume in the quarter fell in the U.S. and Canada, with yogurt and snack results weak. General Mills executives said new flavors and versions of its products would help products including yogurt to recover from that slump. “We know there is certainly some more work to do but we’re encouraged by the significant progress we’ve made,” Chief Executive Jeff Harmening told investors. … [Read more...] about General Mills Boosts Profit at Expense of Sales

By Brian Blackstone WSJ Wed., March 20, 2019 ZURICH—UBS Group AG Chief Executive Sergio Ermotti on Wednesday warned of a weak start to the year for the bank’s investment-banking and wealth-management units, citing “one of the worst first quarter environments in recent history.” The comments, prepared for a banking conference in London, sent UBS shares down, and underscored the challenges facing Switzerland’s biggest bank as it also confronts legal entanglements in France and the U.S. In his speech, Mr. Ermotti also outlined an extra $300 million in cost savings. UBS shares were down 2.5% in late afternoon trading in Europe. Mr. Ermotti’s downbeat tone appeared to spread to other Swiss and European banks. UBS’s crosstown rival, Credit Suisse Group AG, saw its shares down 3.3%, while Swiss private bank Julius Baer Group’s shares were 4.1% lower. The Stoxx Europe 600 Banks index fell 0.9%. Article Continued Below … [Read more...] about UBS Head Warns of Tough First Quarter

By Akane Otani WSJ Wed., March 20, 2019 U.S. government bond prices rose Wednesday ahead of the latest interest-rate decision from the Federal Reserve. The yield on the benchmark 10-year U.S. Treasury note was last at 2.592%, according to Tradeweb, compared with 2.614% Tuesday. Yields fall as bond prices rise. Analysts widely expect the Fed to leave short-term interest rates unchanged at the conclusion of its two-day policy meeting. Given that, many say focus will be on the Fed’s statement and rate projections, which will offer clues on how long the central bank intends to hold rates steady. Investors have become increasingly skeptical the Fed would raise rates this year since the central bank signaled in January that it was comfortable leaving them unchanged for the time being. That’s partially because inflationary pressures haven’t ticked up much, suggesting the Fed faces little risk of the economy overheating. Federal-funds futures, used by … [Read more...] about Treasury Yields Fall as Traders Await Fed Decision

By Julie Steinberg WSJ Wed., March 20, 2019 The veteran chief executive of CLSA Ltd. has quit, people familiar with the matter said, signaling tighter Chinese control of the Asian securities house known for its research and for investor forums featuring keynote speakers such as Steve Bannon, Mike Tyson and Edward Snowden. Chief Executive Jonathan Slone’s resignation follows last month’s departure of CLSA Chairman Tang Zhenyi, who was succeeded by Zhang Youjun, the chairman of parent company Citic Securities Co. Mr. Slone, who was named CEO in 2008, joined CLSA for the first time in 1988. The news was earlier reported by the Financial Times. One of the people said Wednesday Messrs. Slone and Tang’s departures followed differences over strategy and operations with Mr. Zhang. Another person said Mr. Zhang wanted the unit to act primarily as an extension of Citic Securities, serving Chinese clients abroad rather than operating as an international … [Read more...] about CLSA CEO Quits, Following Chairman’s Departure