WORLD STREET | FED KEEPS STATUS QUO ON RATES; TESLA TOP HR EXITS; J&J TO SETTLE TALC LAWSUITS; CHINA TO RAMP-UP SPACE LAUNCHES, AND MORE

Tesla faces leadership departures as its top HR executive exits. Johnson & Johnson intends to settle talc lawsuits. The US Federal Reserve keeps rates unchanged amid inflation concerns. Taiwan's factories flourish, leading a broad rebound in Asia. China ramps up space launches. Yen weakens after a sudden surge due to Japanese intervention. All this and more on this edition of World Street.

Tesla Talent Troubles

Allie Arebalo, Tesla Inc.'s top human resources (HR) executive, has departed from the company, joining a group of other senior leaders who have recently left. Bloomberg reported that Arebalo is no longer part of the company as of this week.

It remains uncertain whether she was included in Tesla's broader job cuts or if she chose to resign. Arebalo previously reported directly to CEO Elon Musk.

Powder Payout

Johnson & Johnson intends to settle almost all of the numerous lawsuits in the United States alleging that its talc-based products led to ovarian cancer by paying $6.5 billion over 25 years, subject to approval by the claimants. These cases have posed financial and public relations challenges for J&J over several decades.

Despite this, the company maintains that its talc baby powder and other talc products, which are now discontinued, are safe for consumers. In the first quarter, J&J recorded a charge of approximately $2.7 billion to increase its reserve for talc claims to around $11 billion.

Interest Intrigue:

Following a two-day monetary policy meeting, the Federal Open Markets Committee (FOMC) unanimously decided to maintain the Fed funds target rate at 5.25-5.50 percent. The accompanying statement left uncertainty regarding the timing of any rate cuts, with Fed officials expressing concern over the lack of confidence-building progress in reducing inflation during the early months of 2024.

Following the meeting outcome, US stocks closed with mixed results overnight, as the S&P 500 and Nasdaq dipped, while the Dow Jones Industrial Average saw a slight uptick.

Manufacturing Magic

Taiwan’s factory activity expanded for the first time in two years, leading a broad rebound in Asia. The semiconductor powerhouse posted a manufacturing purchasing managers’ index (PMI) of 50.2 in April, its best result since April 2022.

It expanded from 49.3 recorded in March, according to data published by S&P Global. A figure above 50 signifies expansion, while anything below shows contraction.

Buyback Boost:

National Australia Bank Ltd. saw a slight increase in its share price following the announcement of a plan to buy back an additional A$1.5 billion ($1 billion) worth of its own stock. The lender's profit met expectations, with Chief Executive Officer Andrew Irvine noting the resilience of the economic outlook, reported Bloomberg.

Its cash earnings fell 13 percent to A$3.55 billion in the six months ended March 31, 2024, the Melbourne-based bank said.

Celestial Chase

China's ambitious space program, including trips to a new space station, lunar sample-return missions, and numerous satellite launches, is on a fast track with plans for 100 launches by the end of 2024—a surge of over 40 percent from last year, reported Bloomberg.

However, with launch sites deep in the mainland and one near densely populated areas, safety concerns arise, contrasting with the US's coastal launch sites that minimize risks to people and property by directing flights over water.

Yen Yo-Yo

The yen gave up ground in early trade on Thursday, reversing direction after a sudden surge against the dollar overnight that traders and analysts were quick to attribute to intervention by Japanese authorities.

The sharp overnight move came after the Federal Reserve concluded its policy meeting, with Fed Chair Jerome Powell reiterating that sticky inflation might delay interest rate cuts, which led to US stocks closing mixed.

2024-05-02T02:23:39Z dg43tfdfdgfd