J.P. Morgan Asset Management launches its largest active ETF
June 25 (Reuters) - J.P. Morgan Asset Management on Wednesday announced the launch of its largest active exchange-traded fund anchored by a $2 billion investment from an external institutional client.
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The Independent
39 minutes ago
- The Independent
US blocks money transfers by 3 Mexico-based financial institutions accused of aiding cartels
The U.S. Treasury Department slapped sanctions Wednesday on three Mexico-based financial institutions it said were used to launder millions of dollars for cartels, in a move officials say would block certain money transfers between the banks and American banks. The orders issued on the banks CIBanco and Intercam Banco, as well as brokerage Vector Casa de Bolsa, are part of an ongoing push by U.S. and Mexican authorities under pressure by U.S. President Donald Trump to crackdown on Mexican cartels that traffic fentanyl. The banks 'have collectively played a long-standing and vital role in laundering millions of dollars on behalf of Mexico-based cartels and facilitating payments for the procurement of precursor chemicals needed to produce fentanyl,' Deputy Treasury Secretary Michael Faulkender told reporters on Wednesday. Faulkender said the measures would 'effectively cut off' the bank branches from doing business with U.S. financial institutions. The orders would also sanction 31 people connected to the banks. The three financial institutions did not immediately respond to requests for comment. It was not immediately clear, however, how far-reaching the effects would actually be. When asked by reporters, Treasury officials did not confirm nor provide details about specific transfers between the Mexico-based banks and American banks, but said there were 'touch points' between the institutions. Officials also did not rule out the possibility of foreign branches of the banks outside of Mexico being able to continue to do business with U.S. banks. According to the Treasury orders, CIBanco helped facilitate money laundering for a number of cartels, including the Jalisco New Generation, Beltran Leyva and Gulf. Officials said the bank 'facilitated procurement' of chemicals used to make fentanyl from China, by processing over $2.1 million in payments for the materials. Vector was accused of facilitating money laundering for the Sinaloa and Gulf cartels, including $1 million in payments for fentanyl chemicals. The Treasury officials also said that Vector was used by the Sinaloa Cartel to send bribes to former Mexican Security Secretary Genaro García Luna, who was sentenced to more than 38 years in prison by a New York court in October for the charges. They estimated that transactions exceeded $40 million. Intercam faced similar charges, and was accused of passing through transfers of $1.5 million in payments for chemicals used to produce fentanyl from China. The orders were just the latest actions by the Trump administration, which has announced it was cracking down on Mexican cartels and fentanyl trafficking, despite movement of the drug along the border and overdoses within the U.S. already being on the decline. This year, the administration also declared many of those cartels Foreign Terrorist Organizations and has sanctioned a number of Mexican officials.
Reuters
43 minutes ago
- Reuters
TRADING DAY Whirlwind fades, calm returns
ORLANDO, Florida, June 25 (Reuters) - TRADING DAY Making sense of the forces driving global markets By Jamie McGeever, Markets Columnist After two days of strong gains in world stocks amid the widespread relief over cooling Middle East tensions, relative stability was the hallmark of trading on Wednesday, with major asset classes moving in much narrower ranges. In my column today I look at U.S. foreign direct investment - was the sharp decline in the first quarter an anomaly, or a warning of what's to come in the brave new tariff world? More on that below, but first, a roundup of the main market moves. If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today. Today's Key Market Moves Whirlwind fades, calm returns The MSCI All Country index and Nasdaq 100 touched new record highs for a second session, and Asian and emerging market stocks posted solid gains earlier in the day. But the Dow, U.S. small caps and benchmark European indexes all fell. The euro's march higher is taking its toll, and European stocks have underperformed since the brief Israel-Iran war broke out on June 13. The euro on Wednesday rose for a fifth straight day to $1.1665, its highest since October 2021. Sterling hit its highest since February 2022 at $1.3670, and Britain's FTSE 100 slipped to its lowest this month. Bank of England policymakers may be secretly cheering the pound's rally, however, if it helps tame inflation pressures. The latest Citi/YouGov survey of UK consumers' inflation expectations on Wednesday showed that long-term inflation expectations among the British public rose to the highest since September 2022. One sector faring better in Europe on Wednesday, though, was defense, after NATO leaders agreed big increases in defense spending, especially from Europe. U.S. defense stocks have moved in the other direction this week following the Iran-Israel ceasefire. On the policy and macro front, Fed Chair Jerome Powell's second day of congressional testimony passed off without fireworks, although there were sparks in his exchanges with some lawmakers. He reiterated his view that the central bank is right to wait and see what the impact is from tariffs before considering further rate cuts. U.S. foreign investment slump - anomaly or warning? Much of the 'de-dollarization' debate has focused on foreign exposure to U.S. securities like stocks and bonds. But investors shouldn't ignore foreign direct investment flows, the traditionally sticky capital that may also be sending out warning signals. Foreign direct investment typically involves an overseas entity acquiring the assets of a company in another country or increasing its holdings, often via the purchase of machinery, plants or a controlling stake. FDI is therefore considered a longer-term investment compared to portfolio flows, which can be more volatile. U.S. President Donald Trump says he has attracted record foreign investment into the country. Indeed, the White House has a page on its website with a "non-comprehensive running list of new U.S.-based investments" since Trump's second term began. The running total is in the trillions of dollars and includes pledges from several foreign countries. Included are more than $4 trillion in U.S.-bound investments pledged by the United Arab Emirates, Qatar, Japan and Saudi Arabia. During Trump's trip to the Middle East last month, he said the U.S. is on track to receive $12-$13 trillion of investments from countries around the globe, which includes "projects mostly announced ... and some to be announced very shortly." These flows may emerge in full, in time. But official figures on Tuesday showed that FDI in the first quarter actually fell to $52.8 billion, the lowest total since the fourth quarter of 2022. That's well below the quarterly averages of the past 10 and 20 years. The Commerce Department figures also showed that the U.S. current account deficit widened to a record $450.2 billion in the quarter, or 6% of U.S. GDP, meaning FDI inflows barely covered 10% of that shortfall. Should the Trump administration be worried? The short answer is probably not, at least not yet. FDI flows are typically far smaller than portfolio flows into equity and fixed income securities, so from the perspective of funding the current account deficit, the drop in FDI is not as pressing a concern. On the other hand, if foreign investors are also buying fewer U.S. securities, capital from elsewhere will be needed to fund that deficit. Additionally, America's balance of payments data in the first quarter was hugely distorted by domestic consumers and businesses front-running Trump's tariffs, loading up on imports before the duties kick in later this year. Trump's bet is that the deficit will shrink this year and beyond as his 'America First' policies spur more "onshoring" from domestic firms as they bring production back home and the weakening dollar helps U.S. manufacturing by making exports more competitive. The subsequent boom will attract investment from companies and governments overseas. In theory. However, these dynamics work both ways. For example, the European Union is by far the largest provider of U.S. FDI, accounting for 45% of the total in 2023, according to Citi. The combination of the continent's German-led fiscal splurge, U.S. tariffs and 'de-dollarization' concerns could easily crimp that flow, perhaps significantly. Another potential risk to U.S.-bound FDI is 'Section 899' - the possible tax of up to 20% on foreigners' U.S. income that could be part of Trump's budget plans. A Tax Foundation report in May found that Section 899 would "hit inbound investment from countries that make up more than 80 percent of the U.S. inbound FDI stock." Industry pushback may water down Section 899, but it remains a cloud on the U.S. investment horizon. The U.S. is the world's biggest recipient of FDI, with a 25% share of global volumes in 2023, up from around 15% before the pandemic, according to Citi. Its economy is the largest in the world, a thriving hub of innovation, pioneering technology, artificial intelligence and money-making potential. That will always attract FDI. Whether it attracts as much in this new environment remains to be seen. What could move markets tomorrow? Want to receive Trading Day in your inbox every weekday morning? Sign up for my newsletter here. Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, opens new tab, is committed to integrity, independence, and freedom from bias.
The Independent
an hour ago
- The Independent
Major layoffs at Bumble dating app as co-founder says online dating business is at ‘inflection point'
Dating app Bumble will lay off approximately 30 percent of its workforce — some 240 employees — according to a regulatory filing made with the Securities and Exchange Commission by the company on Wednesday. The layoffs come as the company aims to cut costs and refocus on expanding its customer base. Staff impacted by this change will be leaving in the second half of the year. Bumble estimates it will save $40 million, which the Austin, Texas-based company intends to reinvest mostly in 'product and technology development' — the company is known to be exploring how artificial intelligence can be deployed. CEO Whitney Wolfe Herd, who also co-founded the dating app Tinder, made the announcement to staff on Wednesday, saying that the online dating business is at an 'inflection point.' In an email to Bumble employees, she said: 'The reality is, we need to take decisive action to restructure to build a company that's resilient, intentional, and ready for the next decade.' Herd stepped down as CEO at the start of 2023 but returned to the role earlier this year. A Bumble spokesperson told CNBC that the decision to reduce the company's workforce is in line with its strategic goals and was 'not made lightly.' 'Our focus now is on moving forward in a way that strengthens our core business, continues to serve our members effectively and positions us for future growth,' they wrote. The securities filing states that Bumble will incur non-recurring charges of between $13 million and $18 million for severance and other benefits paid to those employees being made redundant. Shares in Bumble have plunged since the company's initial public offering in 2021. Its market value has plummeted from $7.7 billion to about $538 million as of Tuesday's close. The online dating company's share price jumped 26 percent in lunchtime trading after the announcement. Just last month, during a company earnings call, Herd acknowledged that Bumble had lost traction with customers and would focus on providing users with better matches. 'We are accelerating our efforts to improve our member base and show members a more thoughtful selection of high-quality, relevant profiles,' she said in May. 'As we execute on our plans, we are very focused on building a sustainable revenue model with a healthy paying member base,' she added. In May 2024, Herd spoke extensively about how AI could be applied to dating apps to better match people with potential partners. She explained Bumble would be using AI to stay close to its main goal: 'A safer, kinder digital platform, for more healthy and more equitable relationships.'
