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EU fails to block U.S. tariffs in new WTO aircraft ruling: sources



PARIS/BRUSSELS (Reuters) – The World Trade Organization has found the EU has failed to withdraw all subsidies to planemaker Airbus, (AIR.PA) three people familiar with the matter said, a decision likely to permit the United States to maintain tariffs on European goods.

Christian Scherer, Airbus Chief Commercial Officer, speaks during a news conference for the delivery of the first Fiji Airways A350 XWB airliner at the aircraft builder’s headquarters of Airbus in Colomiers near Toulouse, France, November 15, 2019. REUTERS/Regis Duvignau

A new compliance report, to be published on Monday at 4 p.m. in Geneva (1500 GMT), found that the Airbus A350 jetliner continues to be subsidized as a result of earlier government loans, they said.

However, the WTO could scale back the amount of harm deemed to have been caused to U.S. rival Boeing (BA.N), which influenced a decision to allow U.S. tariffs on $7.5 billion of EU imports, two of the people said.

Neither the WTO nor the parties in the 15-year-old trade case, which involves mutual claims of billions of dollars of subsidies to both planemakers, had any immediate comment.

The United States imposed tariffs on European goods including most Airbus planes and products from cheese to olives and single-malt whisky in October.

The $7.5-billion ceiling of damages approved by the WTO was based on the amount of economic damage believed to have been caused to Boeing as a result of European support to Airbus, mainly in the form of government loans for the A380 and A350.

The WTO overruled EU attempts to halt the tariffs while Brussels brought forward new arguments to show that it had complied with earlier rulings, in a somewhat rare second compliance procedure.

Monday’s report will deliver the WTO’s verdict on those new arguments, which rely partly on the fact the A380 – once the European planemaker’s flagship – is facing the axe because of poor sales, meaning any damage to Boeing was temporary.

Two of the people familiar with the case said the WTO had accepted part of these arguments, implicitly agreeing to reduce the ceiling for U.S. retaliation by as much as $2 billion.

However, it remained unclear how quickly a partial European victory on that front could translate into lower tariffs, due to legal technicalities.

By appealing the new compliance finding, the United States could effectively send the case into a void as the WTO Appellate Body, which hears appeals, is about to cease functioning due to U.S. blocking of new appointments, experts said.

Instead, the EU is expected to focus on the prospect of counter-tariffs in a parallel case over Boeing subsidies likely to come to a head next spring, while calling for a broader negotiated settlement on aircraft support worldwide.

Reporting by Tim Hepher and Philip Blenkinsop; Editing by Edmund Blair and Peter Graff

Our Standards:The Thomson Reuters Trust Principles.



Valaris settles with Luminus, hands board seat to hedge fund




BOSTON (Reuters) – Oil drilling firm Valaris PLC reached a settlement with Luminus Management and said on Monday that it has appointed one of the hedge fund’s partners to its board.

Luminus’ Adam Weitzman, an expert in offshore oil drilling who has experience in debt and equity capital markets and risk management, will join Valaris’ 11-member board as a 12th director, the company said.

The New York-based hedge fund, which owns roughly 18.7% of Valaris’ shares, promised to hold on to a certain number of shares in order to keep the board seat and to support Valaris’ slate at this year’s annual meeting.

“Luminus applauds Valaris’ recent moves to augment the Board, and we are pleased to have reached a comprehensive agreement with Valaris,” Weitzman said in a statement.

The announcement comes roughly two months after tensions appeared to mount between the two sides. In late November Luminus, which had increased its ownership stake from 4.5%, said it planned to call a special shareholder meeting and push for more changes. The company had earlier promised an additional $100 million in costs and to add two new board members.

Luminus oversees more than $2.5 billion for clients in energy and power investments.

Valaris’ stock price fell 4.13% on Monday morning to trade at $4.41 a share as the global market dropped.

Reporting by Svea Herbst-Bayliss; editing by Nick Macfie

Our Standards:The Thomson Reuters Trust Principles.




Travel, tech stocks lead Wall St. lower as China virus fears mount




(Reuters) – U.S. stocks fell more than 1% on Monday as investors worried about the economic fallout of the fast-spreading coronavirus outbreak in China that has prompted the country to extend the Lunar New Year holidays and businesses to close some operations.

FILE PHOTO: A trader works on the floor of the New York Stock Exchange shortly after the opening bell in New York, U.S., January 24, 2020. REUTERS/Lucas Jackson

The benchmark S&P 500 was jolted off record highs last week as China locked down several cities and curbed travel, reminding investors of the deadly SARS virus that killed nearly 800 people in 2002-03 and cost the global economy billions.

Travel-related stocks, including airlines, casinos and hotels, were the worst-hit on Wall Street, while shares of tech heavyweights that enjoyed a strong rally recently dragged markets lower.

Apple Inc (AAPL.O), Microsoft Corp (MSFT.O), Alphabet Inc (GOOGL.O) and Inc (AMZN.O) dropped between 1.5% and 2.6%.

Wynn Resorts Ltd (WYNN.O), Melco Resorts & Entertainment Ltd (MLCO.O) and Las Vegas Sands Corp (LVS.N), which have large operations in China, slid between 4% and 7%. United Airlines Holdings Inc (UAL.O) and American Airlines Group Inc (AAL.O) fell 4.5% and 6.6%, respectively.

The iShares China Large-Cap ETF shed (FXI.P) 4.1%.

Yum China Holdings Inc (YUMC.N) dropped 5.0% after the company said it had temporarily closed some of its KFC and Pizza Hut stores in Wuhan.

The death toll from the outbreak in China rose to 81 on Monday and a small number of cases linked to people who travelled from Wuhan have been confirmed in more than 10 countries, including Thailand, France, Japan and the United States.

Wall Street’s fear gauge, the CBOE Volatility index .VIX jumped to its highest since Oct. 10.

“The coronavirus will not validate or invalidate the present market multiple, it will just elevate volatility due to the embedded uncertainty of things,” David Bahnsen, chief investment officer of The Bahnsen Group, wrote in a client note.

“The Dow is up a stunning 3,000 points in just over three months – it hardly needs an excuse to see volatility elevated.”

The rush to safe haven assets sank U.S. Treasury yields to three-month lows, putting pressure on shares of Bank of America Corp (BAC.N), Citigroup Inc (C.N) and JPMorgan Chase & Co (JPM.N). [US/]

At 10:11 a.m. ET, the Dow Jones Industrial Average .DJI dropped 1.39% to 28,587.46.

The S&P 500 .SPX fell 1.42% to 3,248.71 and the Nasdaq Composite .IXIC was down 1.80% at 9,147.23.

The S&P energy index .SPNY dropped 2.0% as crude price fell below $60 per barrel on fears of slowing oil demand following the outbreak. [O/R]

Defensive sectors such as consumer staples .SPLRCS, real estate .SPLRCR and utilities .SPLRCU posted minimal losses.

Fourth-quarter earnings season will kick into high gear this week with 141 of the S&P 500 companies expected to report this week including Apple, Microsoft Corp (MSFT.O) and Boeing Co (BA.N).

No.1 U.S. homebuilder D.R. Horton Inc (DHI.N) rose 2.7% after raising the upper end of its forecast for full-year home sales.

Declining issues outnumbered advancers for a 6.17-to-1 ratio on the NYSE and a 5.13-to-1 ratio on the Nasdaq.

The S&P index recorded 16 new 52-week highs and 11 new lows, while the Nasdaq recorded 20 new highs and 68 new lows.

Reporting by Sruthi Shankar in Bengaluru; Editing by Saumyadeb Chakrabarty

Our Standards:The Thomson Reuters Trust Principles.




Coronavirus beunruhigt die Finanzmärkte | NZZ




Die Unsicherheit über die weitere Entwicklung sorgt weltweit für fallende Kurse. Deutliche Einbussen verzeichnen Firmen rund um das Reisegeschäft sowie Luxusgüterhersteller wie Swatch.

Eingeschränkte Reisefreiheit heisst auch weniger Geschäft für alle Firmen, die vom Tourismus profitieren.

Wu Hong / EPA

(awp/sda) Die Ausbreitung des Coronavirus in China verängstigt die Anleger immer stärker und hält die Finanzmärkte fest im Griff. Die Investoren suchen aus Angst vor den wirtschaftlichen Folgen einer Pandemie vermehrt Schutz in den als sicher geltenden Obligationen, beim Gold sowie im Franken.

Der Schweizer Leitindex SMI büsste am Montag bis gegen Mittag fast 1,6% ein. Der deutsche DAX und der französische CAC40 fielen um rund 2,2%. In Asien hatte der CSI 300 Index der Börse von Schanghai um über 3% und der japanische Nikkei Index um über 2% nachgegeben.

Der Schweizer Franken dagegen erstarkt. Der Euro fällt zeitweise auf 1,0694 Franken – so tief wie seit Jahren nicht mehr. Der Dollar, der mitunter ebenfalls als Krisenwährung gilt, hält sich dagegen mit 0,9713 Franken gut. Und auch der Goldpreis gewinnt weiter an Wert. Dagegen sinkt der Ölpreis, dessen Entwicklung als Hinweis auf den zukünftigen Wirtschaftsverlauf gesehen wird, weiter.

Tourismusbranche unter Druck

Stark unter Druck stehen Aktien von Firmen, die vom Tourismus und von einer starken Reisetätigkeit insgesamt profitieren. Dazu zählen etwa die Hersteller von Luxusgütern wie Swatch (-4%) und Richemont (-3,3%). Sie erzielen einen Grossteil ihrer Umsätze in der Grossregion China und profitieren auch vom weltweiten Tourismus, weil bei Reisenden der Geldbeutel in der Regel etwas lockerer sitzt.

Die Aktien von Fluggesellschaften wie der Swiss-Mutter Lufthansa (-4,3%) befinden sich ebenso im Sinkflug wie die der flugnahen Firma Flughafen Zürich (-2,6%) und des Duty-Free-Shop-Betreibers Dufry (-5%). Die Anteile der Jungfraubahn sacken um 5% ab. An der Wall Street waren am Freitag die Kurse der US-Airlines United Airlines und American Airlines um bis zu 4% gefallen.

Erinnerung an Sars 2003

Die Entwicklung rund um das Coronavirus weckt bei den Anlegern die Erinnerungen an die ebenfalls von einem Coronavirus verursachte Sars-Pandemie (Schweres Akutes Respiratorisches Syndrom) von 2003. Dabei kamen rund 800 Menschen ums Leben. Die Eindämmung zog sich über ein halbes Jahr hin.

Die Ausbreitung des Coronavirus könnte laut Ökonomen gravierende wirtschaftliche Auswirkungen haben. Konjunkturell zog Sars in Asien 2003 einen kurzfristigen Einbruch der Wirtschaftstätigkeit in einigen Bereichen nach sich, kommentiert etwa die Raiffeisenbank. Auch damals waren vor allem die Reisetätigkeit, die Gastronomie und der Detailhandel betroffen. Andere Sektoren, wie die Industrie, wurden hingegen kaum in Mitleidenschaft gezogen.

«Nicht überbewerten»

«Man sollte das Ganze nicht überbewerten», sagte derweil ein Zürcher Vermögensverwalter. Diese Ängste seien übertrieben. Bei jeder «normalen» Grippe stürben weit mehr Menschen, als man dies bei dem neuen Virus erwarten müsse. «Ist doch gut, wenn wieder etwas Luft abgelassen wird. Diese Korrektur scheint mir eher als die Kaufgelegenheit, auf die wir gewartet haben.»

«Es ist halt einfach ein blöder Zeitpunkt», sagte hingegen ein Händler. Endlich sei der Handelsstreit, der im vergangenen Jahr die Wirtschaft verlangsamt und an den Märkten immer wieder für Schwankungen gesorgt habe, auf dem Weg zu einer Lösung. «Und nun kommt das Virus. Das drückt auf die Stimmung», so der Händler.




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