Kentucky steel plant to expand with $244M investment

A Kentucky stainless steel plant is spending $244 million to expand its facility in Carroll County, one of several economic development projects announced by Gov. Andy Beshear this week.

North American Stainless will add space to its 4 million square foot plant and add 70 new jobs, Beshear said at a Thursday news conference. The company handles about half the stainless steel made in North American, according to its CEO, Cristobal Fuentes.

LOUISVILLE JUVENILE DETENTION CENTER DEEMED UNSAFE SET TO REOPEN AFTER REPAIRS


A Kentucky steel plant is paying $244 million to expand their facility by 4 million square feet. This investment will create over 70 new jobs.

A Kentucky steel plant is paying $244 million to expand their facility by 4 million square feet. This investment will create over 70 new jobs.

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Another company, LioChem e-Materials, will renovate a building in Simpson County with a $104 million investment, the governor said. The new plant will support electric vehicle battery production and create 141 jobs, according to a news release from the governor’s office.

The plant will produce a liquid dispersion of carbon nanotubes that improves the performance of lithium-ion batteries used in electric vehicles.

The governor also announced the expansion of Carter Lumber Co. in Bowling Green. The $8 million investment will add 86 jobs.

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Source: https://www.foxnews.com/us/kentucky-steel-plant-expand-244m-investment

Boeing’s Terrible Earnings Have Left Wall Street More Bullish. Here’s Why.

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https://www.barrons.com/articles/boeing-earnings-stock-airbus-ge-flight-travel-51674832545



Jan. 27, 2023 10:19 am ET



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Free cash flow at commercial aerospace giant Boeing has stabilized. Earnings, however, are all over the place. That isn’t bothering Wall Street, though—the stock remains attractive and target prices are moving higher.


On Wednesday Boeing (ticker: BA) reported a loss of $1.75 a share. Wall Street was looking for a 20 cent loss. It was a big miss, but shares finished up 0.3% on the day. Investors are inured to big misses from the company.


reported

Source: https://www.barrons.com/articles/boeing-earnings-stock-airbus-ge-flight-travel-51674832545

Why Southwest Airlines Stock Is Falling Today

What happened

The high-profile meltdown Southwest Airlines (LUV -3.17%) experienced over the December holiday season impacted the company’s fourth quarter a lot more than analysts had predicted, causing results to miss expectations. Investors don’t like surprises, and shares of Southwest were down 5% as of 11:27 a.m. in the wake of the company’s Q4 report.

So what

We knew going into earnings season that Southwest had a difficult quarter. A winter storm that hit much of the United States during the holiday travel period caused a system meltdown at the carrier, leading to the cancellation of more than 16,000 flights. In early January, Southwest updated its guidance for Q4 as a result of the storm. But analysts still underestimated the impact.

Southwest reported a loss of $0.38 per share in the quarter, significantly worse than the $0.09-per-share loss that analysts had forecast, on revenue of $6.17 billion that slightly missed expectations. The airline said that the “operational disruption” that occurred in December impacted results by about $800 million before taxes.

Southwest is still trying to pick up the pieces and figure out what went wrong.

“We have swiftly taken steps to bolster our operational resilience and are undergoing a detailed review of the December events,” CEO Bob Jordan said in a statement. “In addition, our board of directors has established an operations review committee that is working with the company’s management to help oversee the company’s response.”

Now what

Southwest anticipates posting a loss in the first quarter, which is historically the quietest period of the year for airline stocks, but the company has seen an uptick in demand heading into March and the beginning of spring break season.

The airline is hardly the first to run into operational issues, and if past experience is any indication, consumers have a short memory when it comes to events like this, and traffic typically rebounds rather quickly. But Southwest has positioned itself as a more customer-friendly airline, and it remains possible that consumer blowback could be pronounced due to Southwest’s unique status in the industry.

There is already a lot at stake heading into Southwest’s first-quarter earnings presentation in April. Until we know more, it appears a lot of investors would rather watch from the sidelines.

Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool recommends Southwest Airlines. The Motley Fool has a disclosure policy.

Source: https://www.fool.com/investing/2023/01/26/why-southwest-airlines-stock-is-falling-today/

US stocks jump as investors cheer upbeat GDP data and strong Tesla earnings

Jennifer Sor



trader nyse celebrate happy fist bump

Reuters / Brendan McDermid


  • US stocks jumped Thursday as investors cheered strong GDP data and Tesla earnings.

  • GDP grew 2.9% over the fourth quarter, above estimates of 2.8%.

  • Tesla rallied almost 11% after posting record results after the bell on Wednesday.


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US stocks jumped on Thursday as investors cheered a surprise upside in fourth quarter GDP, bucking some fears of a looming recession.


All three indexes ended the day in the green, with a gain in the Nasdaq Composite led by Tesla, which jumped almost 11% on Thursday after beating earnings estimates and posting record revenue figures.


GDP grew 2.9% annualized over the fourth quarter, according to the Commerce Department, above the 2.8% estimated by economists.


Tesla, meanwhile, reported a record revenue of $24.32 billion over the last quarter, above estimates of $24.16 billion.


Analysts from Goldman Sachs and Wedbush reiterated their “Buy” rating for the EV maker, and predicted shares would rally 38% this year to $200. JPMorgan, though, rated Tesla as “Underweight,” citing disappointing profit margins. The bank predicted shares would slide 24% to $120 this year.


Here’s where US indexes stood at the 4:00 p.m. closing bell on Thursday:





Despite the positive surprise in GDP, some economists warned that the US is not out of the woods when it comes to a recession.


“The economy grew decently in 2022 — the fears of a recession underway in the first half of last year were misplaced. However, the picture is different looking forward. The trend in real GDP weakened into year-end, and other economic indicators suggest the economy was on the cusp of contracting at the turn of the year,” Comercia Bank chief economist Bill Adams said in a statement on Thursday. “Financial indicators like the inverted yield curve also signal a strong likelihood of a recession ahead,” he added.


“Headline GDP was very strong beating consensus suggesting robust economic activity and if recession were to materialize a softer recession. However, the drivers behind this growth are far from ideal,” Ash Alankar, the head of global asset allocation at Janus Henderson Investors said in a statement.


Alankar noted that personal consumption came in below expectations and the personal savings rate came in above expectations, a sign that consumers are already pulling back from spending out of caution.


Here’s what else is going on:



In commodities, bonds, and crypto:



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Source: https://markets.businessinsider.com/news/stocks/stock-market-news-today-tesla-rally-gdp-economic-outlook-recession-2023-1?op=1

Wisconsin advisor pulled $1.9 million fraud on clients


The Securities and Exchange Commission Tuesday charged a Wisconsin financial advisor with defrauding 13 clients of $1.9 million and also misrepresenting the risk of GWG bonds and other investments, claiming those investments were low risk.


The advisor, Anthony B. Liddle, 40, was barred from the securities industry last June by the Financial Industry Regulatory Authority Inc. after he failed to cooperate with Finra’s investigation into the matter. Calls to Liddle’s firm, Prosper Wealth Management, or PWM, Wednesday morning could not be completed. The firm had $15.7 million in client assets, according to its most recent Form ADV.


GWG Holdings Inc., which sold $1.6 billion in bonds backed by life settlements through a network of independent broker-dealers, said in April it had voluntarily filed for Chapter 11 bankruptcy protection. Investors don’t know what the L bonds are worth.


From at least June 2019 and continuing through May 2022, Liddle “conducted a fraudulent scheme that defrauded at least 13 of his advisory clients, most of whom were senior citizens,” according to the SEC. “As part of the scheme, Liddle also made misrepresentations to advisory clients. Liddle followed a common pattern during the scheme.”


Liddle directed clients to sell positions in securities and then to invest in the GWG bonds and other riskier investments, according to the SEC.


“First, Liddle misrepresented the risk of GWG L Bonds and other similar investments, and claimed the offered security was lower-risk than existing client investments,” according to the SEC’s complaint. “Based on Liddle’s misrepresentations, certain of his advisory clients were induced to sell, or directed Liddle to sell, existing securities holdings.”


Liddle would then tell clients to send their newly available funds, including some who held funds not managed by his firm, to the Prosper Wealth Management, under the guise that Liddle would use the funds to purchase the new, allegedly lower-risk security on the clients’ behalf.


In the end, he stole the money, according to the SEC.


“Instead, Liddle misappropriated the approximately $1.9 million clients sent directly to PWM, never purchasing any investments as they requested,” according to the SEC complaint. “Further, in order to
maintain the scheme, Liddle fabricated statements and made ‘interest payments’ purporting to be returns on client investments, but were in fact made by Liddle using client funds.”


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“First, Liddle misrepresented the risk of GWG L Bonds and other similar investments, and claimed the offered security was lower-risk than existing client investments,” according to the SEC’s complaint. “Based on Liddle’s misrepresentations, certain of his advisory clients were induced to sell, or directed Liddle to sell, existing securities holdings.”

Source: https://www.investmentnews.com/wisconsin-advisor-pulled-1-9-million-fraud-on-clients-233112

IARs in 10 states, D.C. must complete continuing education by year-end



IARs continuing education

The CE requirements are the first for investment advisors, who must take 12 credit hours of courses in products and practice as well as ethics.

Investment advisor representatives in several states will have continuing education requirements for the first time.


The states have adopted a regulation that requires all IARs registered in their jurisdiction to complete 12 credit hours of courses — six hours in products and practice and six hours of ethics — by the end of the year. The states where the rule went into effect as of Jan. 1 are Arkansas, Kentucky, Maryland, Michigan, Mississippi, Oklahoma, Oregon, South Carolina, Vermont and Wisconsin. The rule’s also in effect in Washington, D.C.


The regulation is based on a model rule released by the umbrella group for state securities regulators — the North American Securities Administrators Association — in late 2020. Each state must approve the measure either through the legislative or regulatory process.


“NASAA’s IA Representative Continuing Education Committee is working to assist jurisdictions [with] the adoption process and we are pleased to see adoption of IAR CE continue to grow,” Linda Cena, chair of the NASAA committee and licensing manager in the Michigan Department of Licensing and Regulatory Affairs, said in a statement. “Currently 11 states have continuing ed requirements on the books and at least four other states are in the process of adopting a CE framework.”


The CE rule applies to all registered IARs of investment advisory firms that registered with a state as well as those that are registered on the federal level with the Securities and Exchange Commission, according to NASAA background on the rule.


Broker-dealers, who are overseen by the Financial Industry Regulatory Authority Inc., have long had CE requirements. Thanks to the NASAA model rule, IARs are now getting CE obligations as well.


“I think it’s terrific for Oregon and ultimately for anybody in Oregon who works with an investment advisor,” said Jeremy Solomon, president and co-founder of Solomon Exam Prep, which is located in Portland, Oregon, and owned by CeriFi. “It adds to the professionalization of the investment advisory business.”


Advisors in Oregon will have to sign up for and complete 12 credit hours of approved courses offered by firms that are approved by NASAA. Solomon Exam Prep is one of them.


A course that lasts one hour in real time will qualify for one credit hour of CE, Solomon said. Advisors taking the course must score 100% on a quiz taken during or at the end of the course to obtain the credit. No pre-course preparation is required.


“Everything that is tested is in the course,” Solomon said.


The courses can be taken online at the pace the advisor prefers.


Under the model rule, IARs who are dually registered as brokers would meet their state CE obligation if they obtain the CE that Finra requires for registered representatives. States also would accept CE required for certain financial advice credentials — such as the certified financial planner and chartered financial analyst marks — if the educational material is approved for IAR CE.


Learn more about reprints and licensing for this article.


The states have adopted a regulation that requires all IARs registered in their jurisdiction to complete 12 credit hours of courses — six hours in products and practice and six hours of ethics — by the end of the year. The states where the rule went into effect as of Jan. 1 are Arkansas, Kentucky, Maryland, Michigan, Mississippi, Oklahoma, Oregon, South Carolina, Vermont and Wisconsin. The rule’s also in effect in Washington, D.C.

Source: https://www.investmentnews.com/iars-in-10-states-d-c-must-complete-continuing-education-by-year-end-232997

Where Will Disney Stock Be in 3 Years?

The clock is ticking on Bob Iger. The former Walt Disney (DIS 2.00%) CEO that figured he’d enjoy a happy retirement of writing books and potentially pursuing political ambitions is back at the helm of the media giant. There’s a lot to fix at the company, and it’s easy to wonder if he’ll be able to get everything done in two-year timeline he has established before stepping down again.

I’ll cut to the chase: I think Iger will still be CEO three years from now. Let me make an even more brazen market call, predicting that Disney stock will more than double in three years. The shares are down to roughly half of where they were at their peak two years ago, so let’s see why I think that the House of Mouse can be hitting new highs by early 2026 (if not sooner).

Person wearing purple mouse ears admiring Disney World's Magic Kingdom castle.

Image source: Disney.

What might the future hold?

Let’s assume what many market watchers consider to be obvious right now. The global economy will get worse before it gets better, and that’s going to be hit to the gut of Disney as a consumer-facing titan. Advertisers will pare back their marketing budgets for the company’s TV and streaming businesses. The iconic theme parks segment that set new records in fiscal 2022 will be challenged. Box office returns will continue the systemic decline that’s been happening for two decades.

Thankfully, the horizon is brighter than the pothole-filled road that lies immediately ahead. Let’s start with Disney’s media and entertainment distribution segment. Revenue rose 8% in fiscal 2022, as a 20% surge in its premium streaming business was enough to lift flat results at its legacy linear networks.

Disney+ — along with Hulu and ESPN+ — now account for nearly a quarter of the company’s total revenue. The sticking point here is that the direct-to-consumer streaming business served up an operating deficit of more than $4 billion in the last fiscal year. The red ink at Disney+ is the main reason why Iger is here and dismissed CEO Bob Chapek is not. When the platform launched three years ago, the goal was for Disney+ to become profitable by the end of fiscal 2024. With losses widening, it didn’t seem likely. As Iger’s primary objective, you have to like his chances of getting the balance right on the streaming end. It may not happen in two years, but three years from now we could be there. A recent price hike and the addition of an ad-supported tier should help Disney+ in the quest to add to the media giant’s bottom line instead of subtract from it by early 2026.

Ads will naturally come back to the market once consumers are spending again, and Disney’s unmatched content catalog and franchises will continue to make it a desirable market for advertisers to reach. Despite Avatar: The Way of Water becoming the first film since 2019 to top $2 billion in worldwide ticket sales, theatrical distribution will continue to be a challenge for Disney and its peers. The good news is that the company already has strong and established streaming platforms that will help offset any weakness at the local multiplex.

Turning to Disney’s theme parks business, the segment saved it over the past year as “revenge travel” became a thing. Folks paid a premium to get back to the leading theme park operator after scrapping vacation plans in 2020 and at least globally in 2021. This segment will see turnstile clicks slow this year if not next year if there isn’t a soft landing to the mounting economic pressures, but Disney’s gated attractions always bounce back.

The interesting year for the theme parks will be 2025, when its largest rival in Florida opens Epic Universe at Universal Orlando. Disney will need a response if it doesn’t want to squander market share at its largest resort. Iger hasn’t said a lot about the future of Disney’s theme parks business, but if he really wants to cement his legacy — and be able to stay away for good this time — it will have to be about more than just turning Disney+ around. It’s too late for Disney to have a new park in Florida to compete against Epic Universe when it opens, but the plans will likely be in place by then to keep patrons close and shareholders even closer.

Disney continues to be the class act of media stocks. Trailing revenue already exceeds its pre-pandemic peak of fiscal 2019. Analysts see adjusted earnings surpassing the all-time high of $7.08 a share it posted in fiscal 2018 by fiscal 2026. Getting the stock back above $200 in three years seems more than reasonable if Iger is largely successful this time.

Rick Munarriz has positions in Walt Disney. The Motley Fool has positions in and recommends Walt Disney. The Motley Fool recommends the following options: long January 2024 $145 calls on Walt Disney and short January 2024 $155 calls on Walt Disney. The Motley Fool has a disclosure policy.

Image source: Disney.

Source: https://www.fool.com/investing/2023/01/25/where-will-disney-stock-be-in-3-years/

マイクロソフト、ChatGPT メーカーの OpenAI への新たな数十億ドルの投資を発表

マイクロソフト CEO のサティア ナデラは、2022 年 11 月 15 日にソウルで開催された同社の Ignite Spotlight イベントで講演します。

チョ・ソンジュン | ブルームバーグ | ブルームバーグ | ゲッティイメージズ

マイクロソフトは月曜日に、ChatGPT メーカーの OpenAI との数十億ドル規模の新たな投資を発表しました。

Microsoft は具体的な金額を明らかにすることを拒否しましたが、Semafor は今月初め、Microsoft が 100 億ドルもの投資を検討していると報告しました。

この契約は、2019 年と 2021 年の Microsoft の以前の投資に続く、両社間のパートナーシップの第 3 段階を示します。Microsoft は、更新されたパートナーシップは AI のブレークスルーを加速し、将来的に両社が高度な技術を商品化するのに役立つと述べました。

マイクロソフトの CEO であるサティア ナデラ (Satya Nadella) は、ブログ投稿で次のように述べています。

OpenAI は、Microsoft のクラウド サービス Azure と密接に連携します。2019 年 7 月、Microsoft は OpenAI を 10 億ドルで支援し、この投資により Microsoft は OpenAI に対するクラウド コンピューティング サービスの「独占的な」プロバイダーになりました。Microsoft は月曜、Azure が引き続き OpenAI の独占プロバイダーとして機能すると述べた。

Microsoft の投資は、両社が大規模なスーパーコンピューティングに取り組み、AI を活用した新しいエクスペリエンスを生み出すのにも役立つ、とリリースは述べています。

OpenAI は、AI 研究者によって世界のトップ 3 の AI ラボの 1 つとしてランク付けされており、Dota 2 などのビデオ ゲームで人間を打ち負かすことができるゲームプレイ AI ソフトウェアを開発しています。ただし、AIテキスト ジェネレーター GPT-3と風変わりなAI 画像ジェネレーター Dall-Eにより、より多くの注目を集めていることは間違いありません。

CNBC Pro の技術と暗号の詳細を読む

ChatGPTは、シリコン バレーの過去のチャットボットよりもはるかに高度で創造的な方法で、書かれたプロンプトに基づいてテキストを自動的に生成します。このソフトウェアは 11 月下旬にデビューし、2007 年にAppleが iPhone を発表したときと比較して、技術幹部やベンチャー キャピタリストが Twitter でこのソフトウェアについて大騒ぎしたため、すぐにバイラル センセーションを巻き起こしました。

このテクノロジーは、Google の幹部の注目も集めており、最近の全社会議で、Google には同様の AI 機能がありますが、AI チャット テクノロジーで動きが速すぎると、その評判が損なわれる可能性があると述べました。

OpenAI の創設者には、Sam Altman、Teslaおよび SpaceX の CEO である Elon Musk、Greg Brockman、Ilya Sutskever、Wojciech Zaremba、および John Schulman が含まれます。このグループは、立ち上げ時にベンチャーに10億ドル以上を投資することを約束しました。Musk は 2018 年 2 月に取締役会を辞任しましたが、寄付者としての立場は維持しました。

— CNBC のジョナサン ヴァニアンとジェニファー エリアスがこのレポートに貢献しました。

Source: https://www.cnbc.com/2023/01/23/microsoft-announces-multibillion-dollar-investment-in-chatgpt-maker-openai.html

投資銀行は厳しい年を迎えている: 2023 年に回復できるか?

JPモルガン・チェース ( JPM -0.33%)、ゴールドマン・サックス ( GS -0.71%)、モルガン・スタンレー ( MS -0.95%) などの投資銀行にとって今年は厳しい年だった。少なくとも、過去 1 年間に直面した状況では、この市場で株式公開を望んでいる人はいません。ゴールドマン・サックスは最近、投資銀行部門の不振に伴い、3,200 人の従業員を解雇すると発表しました。

インフレ、金利、地政学的な不確実性はすべて、投資銀行にとって不利な環境を作り出す一因となっています。予測が難しい状況の中で、企業は株式公開を控えています。しかし、希望は間近に迫っている可能性があります。投資銀行がすぐに回復するために必要なことは次のとおりです。

連邦準備制度理事会のインフレ対策が市場に波及効果をもたらす方法

これは、企業の資金調達に広範囲に影響を与える困難な市場でした。問題の根源は、インフレとそれを引き下げるための連邦準備制度の行動です。

インフレは 2 年近く続いており、FRB が行動を起こしたのは昨年になってからです。FRB がインフレを抑える方法の 1 つは、金利を上げることです。この背後にある考え方は、金利の上昇が貯蓄の増加と支出の削減を促し、経済から現金を奪い、貯蓄者に高いリターンを与えるというものです。

金利の上昇は債券の発行に影響を与えます。特に、企業がそのような高い金利で負債を引き受けたくない場合はなおさらです。金利の上昇は、企業の評価にも影響を与えます。債券投資は、より高くリスクの低いリターンのために、より魅力的になるからです。

IPO活動が急落し、株式引受が打撃を受ける

金利は、ここ数十年で見られなかったペースで上昇しています。その結果、非公開企業を含む株式全体で、より大幅な価格の再評価が見られました。これにより、企業が債務の発行や新規株式公開 ( IPO )による株式公開に不安を抱く状況が生まれています。

米国の主要な投資銀行の最近の収益を見ると、その影響がわかります。JPモルガン・チェースの投資銀行の収益は、年間で52%減少しました。一方、モルガン・スタンレーとゴールドマン・サックスは、IB 収益がそれぞれ 49% と 48% 減少しました。

これらの下落の最大の要因は、IPO 活動が急落したため、株式引受がほとんど存在しなかったことです。グローバルな専門サービス会社である EY によると、米国での IPO は調達した資金の総額で 20 年ぶりの低水準に達しました。モルガン・スタンレーでは、株式引受の収益が 81% 減少し、JP モルガンでは収益が 69% 減少しました。

投資銀行業界の回復の鍵はセンチメントと見通し

JPモルガン・チェースの最高財務責任者であるジェレミー・バーナム氏は、投資銀行業務が回復するためには、人々が「バリュエーションと市場の水準に慣れる」必要があると述べています。過去 1 年間はボラティリティが非常に高かったため、企業は行動を起こす前に市場がより安定することを望んでいます。

市場が安定すれば、企業はバリュエーションが以前の水準を下回っても安心し、最終的に動き出す可能性があります。EY グローバル IPO リーダーのポール・ゴー氏は、投資銀行は 2023 年にゆっくりとスタートする可能性が高いと述べています。

ただし、下半期にはさらに有利な状況が発生する可能性があります。これらの状況をもたらす可能性があるのは、インフレ率の低下と利上げの縮小です。最後に、企業が株式公開や債務増額の適切な機会を待つため、センチメントは改善する必要があります。

Barnum 氏によると、JP モルガンの取引パイプラインは強固であり、多くの企業が資金調達を望んでいます。状況が改善されれば、投資銀行業界に良い追い風が吹き、その過程でこれらの企業の株価が押し上げられるでしょう。

JPモルガン・チェースは、モトリーフール社のアセントの広告パートナーです。コートニー・カールセンは、モルガン・スタンレーで役職に就いています。モトリーフール米国本社は、ゴールドマン サックス グループと JP モルガン チェースに投資し、推奨しています。モトリーフール米国本社には開示ポリシーがあります。

金利は、ここ数十年で見られなかったペースで上昇しています。その結果、非公開企業を含む株式全体で、より大幅な価格の再評価が見られました。これにより、企業が債務の発行や新規株式公開 ( IPO )による株式公開に不安を抱く状況が生まれています。

Source: https://www.fool.com/investing/2023/01/25/investment-banks-are-coming-off-a-tough-year-can-t/

財務省は、債務制限の違反を回避するために退職金を利用します



国債限度額

ジャネット・イエレン財務長官は以前、このような措置が少なくとも6月初旬まで政府の運営を維持する可能性が高いと推定していた.


財務省は、木曜日に連邦政府の債務上限に達した後、米国の支払い不履行を回避するための特別措置の使用を開始しています。


財務省は、政府が運営する退職者向けの 2 つの基金への投資を変更しています。これにより、財務省は、全体的な債務水準を引き上げることができなくても、連邦政府の支払いを継続できるようになります。


ジャネット・イエレン財務長官は、木曜日に両党の議会指導者に書簡で通知した。彼女は先週、債務上限が1月19日に達すると警告したときに、すでに彼らに計画を通知していました.


Yellen reiterated that the period of time that the extraordinary measures will avoid the government running out of cash is “subject to considerable uncertainty,” and urged Congress to act promptly to boost the debt limit. Last week she said the steps wouldn’t likely be exhausted before early June.


[More: Advisors downplay prospects for debt default, comfort clients]


The specific funds affected by the Treasury’s move are:



  • The Civil Service Retirement and Disability Fund, or CSRDF, which provides defined benefits to retired and disabled federal employees

  • The Postal Service Retiree Health Benefits Fund, or PSRHBF, which provides postal service retiree health-benefit-premium payments.


The two funds invest in special-issue Treasury securities that count under the debt limit. After the debt limit is increased, they will be “made whole,” with participants unaffected.


It’s far from the first time the Treasury has resorted to these moves: Since 1985, the agency has used such measures more than a dozen times.


For the CSRDF, Yellen said that the Treasury is entering a “debt-issuance suspension period” starting Thursday and lasting through June 5. The Treasury will suspend additional investments credited to the fund and redeem a portion of the investments held by it, she said.


As for the PSRHBF, the Treasury will suspend additional investments of amounts credited to that fund, Yellen said.


Last week, Yellen had advised that the Treasury also anticipated tapping — this month — the resources of a third fund, the Government Securities Investment Fund of the Federal Employees Retirement System Thrift Savings Plan. The so-called G Fund is a defined-contribution retirement fund for federal employees, and also invests in special-issue Treasury securities that count under the debt limit. Yellen’s letter on Thursday made no mention of the G Fund.


Yellen’s letter didn’t specify the amount of headroom under the debt ceiling that would be created by the extraordinary measures she listed.


The Treasury probably now has $350 billion to $400 billion of headroom available in all, said Gennadiy Goldberg, a senior U.S. rates strategist at TD Securities. That, along with the influx of revenue that will come from individual income taxes due in April, should let the Treasury go until sometime in the July to August window without running out of cash, he said.


Other measures the Treasury has taken in the past to conserve headroom under the debt limit include suspending the daily reinvestment of securities held by the Exchange Stabilization Fund. That’s a special vehicle that dates back to the 1930s, over which the Treasury secretary has wide discretion.


財務省は以前、州政府および地方政府の一連の財務省債の発行も停止しました。これらの証券は、州および地方政府が現金を預けることができる場所であり、連邦政府の債務制限にカウントされます。これらの政府は、SLGS の発行が停止されると、他の資産に投資する必要があります。


Robertson Stephens の CEO である Raj Bhattacharyya との「IN the Office」


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Source: https://www.investmentnews.com/treasury-taps-retirement-funds-to-avoid-breaching-debt-limit-232942