Countries in central and northern Europe dominate a global ranking of the best places to start a business — although a central American state tops the list.
The index, compiled by Wharton University and market research firm Y&R, evaluates a total of 80 countries which collectively account for 95% of global gross domestic product.
The overall ranking considers a wide range of factors to create an overall "best countries" index, including entrepreneurship, heritage, quality of life, and openness for business.
Business Insider took a look at the "openness for business" subindex, which considers a range of factors including the price of manufacturing costs, levels of bureaucracy, tax environment, transparency of government practices, and the extent of corruption.
Take a look at the nine countries which made the top of the list.9. Norway — like many of its Scandinavian counterparts, Norway has one of the highest tax rates in the world, with a total tax burden of around 40 to 45% of GDP, which funds its extensive welfare state. While a big tax burden is not associated with attracting business, the country's transparency and lack of corruption places it at ninth on the index.
8. New Zealand — New Zealand has a very strong tourist industry and a very strong export market, particularly in agriculture. Like Norway, it scores highly on the "Openness for Business" index because of its transparent government practices and lack of corruption.
7. Canada is the only north American entry to the list. With a GDP per capita of £36,300, the high-tech industrial society has the benefits of a high standard of living and a skilled workforce. The service sector is Canada's biggest economic driver.
See the rest of the story at Business Insider
LONDON — The pound is falling against the dollar and the euro on Wednesday morning, ahead of the beginning of the official Brexit progress later in the day.
The UK government is set to deliver a letter triggering Article 50 to the European Commission around lunchtime on Wednesday, officially beginning the two-year period for negotiating Britain's exit from the European Union. Prime Minister Theresa May was pictured signing the letter on Tuesday evening.
While Brexit is no surprise, the official trigger is likely to bring fears about trade deals and Britain's position in the world post-Brexit to the front of traders' minds. As a result, sterling is suffering.
The pound is down 0.45% against the dollar to $1.2391 at 7.10 a.m. BST (2.10 a.m. ET) and down 0.35% against the euro to €1.1476 at the same time. Here is how that looks:Kathleen Brooks, research director at City Index, says in an email on Wednesday morning:
"The pound was the weakest performer in the G10 on Tuesday and has dropped below 1.24 as Article 50 fears and the prospect of a second Scottish Referendum start to bite and the dollar roars back to life. This could be a case of sell the rumour, buy the fact, and we stick to our view that sterling can brush off Article 50-inspired weakness and that sterling is essentially range bound as we formally kick off the process to leave the EU."
LONDON – Sometime on Wednesday, the UK government will trigger Article 50 of the Lisbon Treaty and formally start negotiations to leave the European Union.
It will take the form of a letter, and the UK's permanent representative to the European Union, Tim Barrow, is expected to hand the it over to EU Council president Donald Tusk personally.
Tusk will reply to the letter within 48 hours, after which the two-year negotiation period for Britain's exit from the EU will begin.
Here is what that means for the City of London and the UK's financial centre:What kind of deal will the UK get with the EU?
Well, there is no guarantee the UK will get a deal at all at the end of two years. Before negotiating a grand free trade agreement, the two parties have to thrash out the treatment of EU citizens in the UK and British citizens in Europe.
As well as that, there is the small matter of the so-called Brexit divorce bill.
The EU has demanded a €60 billion (£51.6 billion) payment to settle accounts upon leaving, something that the UK has said it won't sign up to. This could be enough to scupper negotiations at the outset. "Agreeing an exit payment will be politically difficult for both sides. Some observers see a greater than 30% likelihood that talks fail at this first stage," the BAML analysts said in a note to clients earlier this month.
Once that hurdle is overcome, whatever free trade agreement or framework can be negotiated in the remaining time will likely not include a financial services passport. Prime Minister Theresa May's government has prioritised immigration control over membership of the European single market, and so automatically forfeit access for financial services.What is the financial passport?
If the London is like a bridge, funnelling capital and funding from the US and Asia into Europe then the passport is the series of pillars holding the bridge up.
It is an agreement that allows banks with a base in the UK to access customers and financial markets in the (currently) 28-nation EU trading bloc. The passport is essentially a system of common financial rules that all countries in the passport network sign up to.
For example, a US or Japanese bank can set up a subsidiary in London and from there operate branches on the continent. If the UK loses the passport, those branches won't be tethered to a country in the EU single market and therefore be unable to carry out the range of services they might want to.
The loss of passporting rights would be devastating to the City of London. The Financial Conduct Authority (FCA) said earlier this year that 5,500 UK companies rely on passporting rights, with a combined revenue of £9 billion.
It would also be bad news for the UK economy as a whole, economists at Berenberg, one of Europe's oldest banks said in a note to clients this week: "In our base case, we expect the UK and EU27 to agree on a deal that covers almost all goods and some services, with the UK losing its EU financial services passport. Such a Brexit would reduce the UK’s long-term potential growth rate to 1.8% pa from its pre-Brexit rate of 2.2%."What are banks worried about?
Most banks have conceded that the UK will probably lose the financial passport, the main question is when.
The financial industry is concerned that when the two years is up, there will be a so-called cliff edge when the passporting rights are switched off.
Banks are huge organisations and can take a long time to move people around and change their operations. They are pushing for a transitional arrangement giving them as long as 10 years to phase out the passport and adjust to the new world.
The chief concern is that the UK government is not as worried as it should be about the potential turmoil that a cliff edge could produce, and so might not push for a transitional deal. This is a sentiment echoed by a House of Lords committee, which warned ministers are not taking the concerns and advice of trade experts "as seriously" as they should on Brexit.Why can't they just move to Europe?
Well, they might. The question is where.
No one city among the likes of Frankfurt, Paris, Dublin, Milan and Madrid can take all the banks at once. There is not enough office space or supervisory capacity to make such a move feasible so the banks are more likely to spread operations around the continent.
It is expensive and time-consuming to move people, technology and balance sheet activities but if it is less expensive than staying, then the international banks will do it and spread themselves out.
It will not be easy. The European Central Bank, which is the top regulator for lenders in the eurozone has said they will subject banks to a tough assessment before they are allowed to set up on the continent.
Sabine Lautenschlager, vice-chair of the Frankfurt-based Single Supervisory Mechanism, a unit of the European Central Bank, said applications for European licences will be scrutinised closely on Monday.What does it mean for jobs?
London will likely lose financial jobs as a result of Brexit. In fact, it is beginning to happen already.
According to a survey by Morgan McKinley, the number of new available jobs listed in the the UK's financial centre fell 17% in February year-on-year to 6,945.
The number of people seeking jobs dropped by a huge 38% from February 2016, while month-on-month the number of fresh open positions decreased by 23% in February.
Meanwhile HSBC, JPMorgan, and UBS have all warned about job relocations. Jamie Dimon, CEO of JPMorgan Chase, told Bloomberg at Davos that the bank will likely move more people than previously thought. "It looks like there will be more job movement than we hoped for," Dimon said. The bank employs 16,000 people in the UK.
HSBC CEO Stuart Gulliver said around 1,000 bankers in HSBC's investment banking and markets divisions would "probably need, in our case, to go to France."
It is not just the loss of the passport that is bad for job growth in London, but also the potential for immigration restrictions on EU citizens — which make up a sizeable percentage of financial roles.What does it mean for hedge funds?
It is not just banks that will have difficulties, but also fund managers.
Markets and deals are based in London, but the money managed by the market participants is often based in places like Ireland or Luxembourg for tax reasons. The European rules known as UCITS Delegation Procedures allow funds domiciled in those places to access London’s financial markets.
The rules "are very important," David Wright, a former European Commission official focused on financial rules, said last month. "If you couldn’t do that any more, that’s a game-stopper for London. Firms will take hard-headed decisions on the basis of maintaining their business and clients – not waiting for Brexit negotiating uncertainties and haggling."
LONDON — Prime Minister Theresa May is going to trigger Article 50 on Wednesday, starting the two-year negotiation process of Britain leaving the European Union.
Berenberg Bank, one of the oldest investment banks in the world, wrote a report for clients ahead of the trigger on how Brexit talks are likely to shape up. In it, the bank posed and answered the question: "Does Brexit create any opportunities for the UK?"
The answer is pretty simple — no. There's nothing that will provide a major positive effect on Britain's economy in the long term.
May is expected to trigger Article 50 on Wednesday around lunchtime. She is taking Britain towards a "hard Brexit" — shorthand for Britain leaving the European Union without access to the Single Market in exchange for having full control over immigration into the country.
"Beside some scope to strike new trade deals with non-EU countries, Brexit does not provide the UK with major opportunities to improve its long-term economic prospects," said Berenberg in its report entitled "Brexit: key issues as Britain heads for the exit." Even on the prospect of trade deals, the bank is downbeat.
Berenberg did identify some small windows of opportunity but argues that the chances of them working out well for Britain are very small. Here are the opportunities:1. Britain could pursue its own trade deals
Prominent business people that back Brexit have voiced their optimism for Britain's ability to forge ahead in creating new trade deals for itself.
Sir James Dyson, one of the world's most successful inventors, this week said he is "enormously optimistic" about Britain's trading landscape after it breaks away from the European Union because Europe accounts for only a small slice of over global trading.
"Europe's only 15% of the global market and the really fast-expanding markets are in the Far East. I'm enormously optimistic because looking outwards to the rest of the world is very, very important because that's the fast-growing bit," he said.
Berenberg says: "The UK could offset some of the Brexit costs by pursuing growth-friendly policies in other policy areas.
"Outside the EU, the UK would be free to seek trade deals that are most in line with its own economic orientation, ie focused on services. The nimble UK may even be able to conclude trade deals faster than the much larger co-operative multi-country EU."
But Berenberg also says we should not get ahead of ourselves (emphasis ours):
"But large economies have more to offer when negotiating trade deals and can thus secure better outcomes for themselves. Without the EU’s economic weight, the UK would be the weaker party in bilateral trade negotiations with large economies such as the US, China, Japan or India.
"Geography and size matter more for trade than trade deals. The EU is the UK’s major market, first, because it is so huge, and second, because it is so close. The EU27 will remain the UK’s biggest market long after Brexit. No combination of bilateral deals with far away non-EU countries can match a comprehensive trade agreement with the EU."
In other words, Britain faces an uphill struggle to end up with a trade deal that's as good as what we enjoy with the EU now after Brexit. The chances are we'll end up net losers.2. Britain could relax regulation — but this could cost it trade deals
Leaving the EU would allow Britain to relax regulation to an extent. Onerous regulation and EU bureaucracy were reasons Brexiteers gave for supporting leaving the EU.
But Berenberg points out that the UK is actually one of the most relaxed countries when it comes to regulation (emphasis ours):
"Contrary to some media and Brexiteers’ claims that the UK is burdened with excess regulation – which it could scrap after Brexit – the UK is already one of the most lightly regulated economies in the developed world.
"This holds especially for areas where the EU has some influence on regulation, such as in labour and product markets. The UK is less regulated than most of its European counterparts and far less regulated than China and India. Although UK labour market regulation is not quite as lax as the US, there is little evidence that this is having a major negative effect. The UK labour market made a strong recovery from the post-Lehman crisis because of its high degree of flexibility."
If Britain does decide to relax laws even further, it could cost the country the trade deals it hopes to secure after it leaves the Single Market (emphasis ours):
"In addition, if the UK decided to materially alter or reduce its regulations in key areas such as labour market laws, product markets and financial services, it may run into trouble securing trade deals with other advanced economies. Trade agreements are intended to reduce the costs of doing business across borders.
"One way is to reduce or remove tariffs. Another is to harmonise product and business regulation. Knowing that one country’s goods and services can be bought and sold in another’s without checks and approvals brings down costs of business and boosts efficiency. That is how the single market works. For whatever parts of the single market the UK wanted to maintain access after Brexit, the UK would need to adhere to the EU common standards. The UK would not be able to influence those standards, since that is the exclusive right of EU members."
So, yes — there are a few opportunities available to Britain post-Brexit. But unfortunately, they look a lot worse than what it available as an EU member.
Good morning! Here's what you need to know in markets on Wednesday.
1. Prime Minister Theresa May has signed the Article 50 letter of notification that she will send to the European Union on Wednesday to formally get Brexit underway. May was pictured in Downing Street on Tuesday evening adding her signature to the historic letter, which will formally notify the European Commission of Britain's departure from the EU.
2. US stocks rallied on Tuesday following a dip Monday that appeared related to concern about the failure of "Trumpcare" to get enough votes in the House. The Dow Jones and the S&P 500 both closed up 0.73% and the Nasdaq closed up 0.60%.
3. Asian stock markets are subdued ahead of the Brexit trigger in Europe. Japan's Nikkei is up 0.03% at the time of writing (6.25 a.m. BST/1.25 a.m. ET), the Hong Kong Hang Seng is up 0.24%, and China's Shanghai Composite is up 0.26%.
4. Wells Fargo has agreed to pay $110 million (£88.7 million) to settle a class-action lawsuit over up to 2 million accounts its employees opened for customers without getting their permission, the bank announced Tuesday. It's the first private settlement that Wells has reached since the company paid $185 million (£149.1 million) to federal and California authorities late last year.
5. Goldman Sachs has named a new head of technology for Europe, the Middle East, and Asia, according to a memo seen by Business Insider. Joanne Hannaford, a partner at the bank since 2014, is taking on the role from Damian Sutcliffe, who is retiring.
6. BlackRock on Tuesday said it would overhaul its actively managed equities business, cutting jobs, dropping fees and relying more on computers to pick stocks in a move that highlights how difficult it has become for humans to beat the market. The world's biggest money manager has faced active stock fund withdrawals and the revamp is its biggest attempt yet to engineer a turnaround.
7. Bitcoin slid into negative territory on Tuesday after the US Securities and Exchange Commission rejected the plans for the SolidX Bitcoin ETF. The cryptocurrency is down 1.81% against the dollar to reach $1,025.40 at the time of writing (6.13 a.m. BST/1.13 a.m. ET).
8. Chinese tech giant Tencent has spent $1.78 billion (£1.4 billion) on buying a 5% stake in electric carmaker Tesla. The BBC reports that Tencent, best known for its WeChat mobile app, has been investing in a number of sectors, including gaming, entertainment, cloud computing and online financing.
9. One of Sir Philip Green's key lieutenants is leaving her job running Topshop for the same job at The White Company. The Telegraph reports that Mary Homer, who has been managing director of the fashion retailer for 11 years and has worked for the billionaire since 1987, is to replace outgoing White Company boss Will Kernan, who left in February to run online sports specialist Wiggle.
10. AC Milan is heading for a listing in Hong Kong after financing from US hedge fund Elliott Management revived a Chinese deal to buy the Italian football club from Silvio Berlusconi, former prime minister of Italy. The Financial Times reports that Elliott has agreed to provide part of the financing for little-known Chinese investor Yonghong Li to buy AC Milan for €740 million (£645.1 million), say people directly informed of the deal.
- Prime Minister Theresa May will send a letter to Donald Tusk formally requesting Brexit.
- The UK's chief diplomat to the European Union will hand the letter over in person at lunchtime.
- May will make a statement to Parliament calling on the country to unite.
- Tusk will respond within 48 hours after which Brexit negotiations will begin.
LONDON — Britain's two-year exit process from the European Union will begin Wednesday when Prime Minister Theresa May triggers Article 50.
The UK's permanent representative to the EU, Tim Barrow, will hand a letter signed by May, to the European Council President Donald Tusk on Wednesday lunchtime, formally requesting Britain's exit from the union.
Once the letter is received by Tusk, Article 50 will be officially triggered.
In a statement to MPs, timed to coincide with the arrival of the letter, May will call on the whole country to unite.
"We are one great union of people and nations with a proud history and a bright future," she will say.
"And, now that the decision has been made to leave the EU, it is time to come together."
May's speech, which falls one day after the Scottish Parliament voted to hold a second independence referendum, will attempt to reach out to those opposed to Brexit.
Theresa May will tell MPs:"When I sit around the negotiating table in the months ahead, I will represent every person in the whole United Kingdom – young and old, rich and poor, city, town, country and all the villages and hamlets in between.
And yes, those EU nationals who have made this country their home.
It is my fierce determination to get the right deal for every single person in this country.
For, as we face the opportunities ahead of us on this momentous journey, our shared values, interests and ambitions can - and must - bring us together.
We all want to see a Britain that is stronger than it is today. We all want a country that is fairer so that everyone has the chance to succeed.
We all want a nation that is safe and secure for our children and grandchildren. We all want to live in a truly Global Britain that gets out and builds relationships with old friends and new allies around the world.
These are the ambitions of this Government’s Plan for Britain. Ambitions that unite us, so that we are no longer defined by the vote we cast, but by our determination to make a success of the result.
We are one great union of people and nations with a proud history and a bright future.
And, now that the decision has been made to leave the EU, it is time to come together."
Labour leader Jeremy Corbyn will also promise to "hold the government to account every step of the way."
"The Conservatives want to use Brexit to turn our country into a low wage tax haven," Corbyn will say.
"Labour is determined to ensure we can rebuild and transform Britain, so no one and no community is left behind.
"It will be a national failure of historic proportions if the Prime Minister comes back from Brussels without having secured protection for jobs and living standards.
"That's why Labour has set the clear priorities of full access to the European market, rights at work and environmental protection. And we will hold the Government to account every step of the way."
Here is a rough timeline of what we can expect today (all timings in GMT):
8 a.m. — May will convene a special Article 50 session of her Cabinet, in which they will discuss the formal beginning of Brexit negotiations.
12 p.m. — May will take questions from Labour leader Jeremy Corbyn at prime minister's question time.
12.40 p.m. — The prime minister will deliver a statement to the House of Commons announcing that the letter triggering Article 50 has arrived in Brussels.
At roughly the same time Britain's chief EU diplomat Tim Barrow will formally hand over a letter signed by May to EU Council president Donald Tusk.ARTICLE 50 WILL BE TRIGGERED
12.50 p.m. — The letter will be published
1 p.m. — The prime minister will continue to take questions on triggering Article 50 from MPs.
Tusk has promised to respond to the letter within 48 hours, after which formal Brexit negotiations will begin.What is Article 50 and how does it work?
Article 50 is the formal trigger for leaving the EU. Once triggered Britain will be free to leave the EU from the moment any deal is struck, or failing that, two years after notification of wishing to withdraw is given.
Britain's membership will be formally ended by the European Council after first receiving consent from the European Parliament, which will also have to ratify any exit deal that is negotiated.How long will negotiations go on for?
There are two major parts to negotiations — settling the divorce and then agreeing the ongoing relationship. The UK government is keen to get trade negotiations underway immediately. However, the EU's chief negotiator Michel Barnier has insisted that the divorce must be settled before any other discussions can begin. "
"Agreeing on the orderly withdrawal of the UK [must happen] before negotiating any future trade deal," he wrote in the Financial Times this week. "The sooner we agree on these principles, the more time we will have to discuss our future partnership."
The main issue in divorce talks is the question of what bill, if any, Britain will pay the EU when it leaves. Britain's former permanent representative to the EU, Ivan Rogers has previously suggested that the other 27 EU countries will be angling for a bill of up to £60 billion, while a growing number of Conservative backbenchers believe that the UK should not be liable for any divorce bill at all. Reconciling those two wildly opposing expectations is likely to be the toughest early test for May.
These talks could leave May with very little time to negotiate a new trade deal with the UK. Although Article 50 is a two-year process, she must take whatever deal she has secured forward for ratification by both the UK and EU parliaments after just 18 months.Can the two-year negotiation process be extended?
In theory yes. But it would not be easy. Doing so would require unanimous consent from the European Council in agreement with Britain. Neither side has so far left the window open for such an outcome.Can Article 50 be revoked?
We do not know for sure. However, Lord Kerr, who wrote Article 50 believes it can be.
"It is not irrevocable," he said last November.
"You can change your mind while the process is going on.
"During that period, if a country were to decide actually we don’t want to leave after all, everybody would be very cross about it being a waste of time. They might try to extract a political price but legally they couldn’t insist that you leave."
EU Council president Donald Tusk has also suggested that Britain could change its mind.
Most international organisations allow a "cooling off" period between the notification of withdrawal and the moment that countries leave them. In 1928 Spain famously decided not to withdraw from the League of Nations shortly before their withdrawal was due to take effect.
A Tesla employee is suing the company, saying he experienced racial harassment, racial discrimination, and sexual harassment while working at the company's Fremont factory between June 2015 and April 2016.
The lawsuit was filed in the Alameda County Courthouse in California on Monday.
The employee, DeWitt Lambert, alleges that coworkers harassed him by regularly calling him the N-word and making sexually explicit comments. The suit also says Lambert was overlooked for job promotions because he had filed complaints to human resources about the harassment.
In a statement to Business Insider, Tesla said it denied all the claims made in the suit. Lambert is suspended with pay while Tesla investigates the allegations.The allegations
The suit says Lambert first complained to HR about the "hostile work environment" created by his coworkers in fall 2015 but that there was no subsequent investigation.
Tesla's statement to Business Insider does not mention a fall 2015 HR complaint but says Tesla opened an investigation in April 2016 after Lambert told HR he was subject to "racially insensitive language" after an argument with coworkers.
"HR personnel investigated, interviewing all of the employees who were reportedly involved. That investigation turned up conflicting accounts of what happened, with other employees saying that Dewitt had the 'dirtiest mouth' they had 'ever heard,' including using the same racially insensitive language that he had complained about," Tesla wrote in the statement.
"In the end, there was no objective evidence that anything inappropriate occurred toward Dewitt. As a result, our HR team coached this group of employees on the importance of behaving professionally and the investigation was closed."
An employee said to be involved in the April 2016 dispute with Lambert provided Tesla's HR with an instant message that showed Lambert had used "the same language when describing other colleagues involved in the argument from April 2016," Tesla wrote in its statement.
The suit claims Lambert also showed HR "hateful, violent, and racist videos" created by two employees who worked with him on Chassis Two, a part of Fremont's assembly line, in July 2016, but that HR neglected to investigate the two employees who created the videos.
In its statement, Tesla said Lambert showed HR a video that contained racially insensitive language on July 6, 2016. Tesla said HR opened an investigation that day, but that the person leading it left Tesla two days later on July 8, 2016, and neglected to hand off the investigation to anyone else in HR:
"It’s clear that our investigation should have continued uninterrupted until all the facts were known. We have terminated several employees based on what we’ve learned and have suspended Dewitt with pay so that we can finish investigating the circumstances of the instant messages that were just provided to us about his threats of violence against coworkers. We will continue to take action as necessary, including parting ways with anyone whose behavior prevents Tesla from being a great place to work. However, it’s also clear that Dewitt’s version of events is not supported by the facts."
Tesla denied claims that Lambert was overlooked for promotions because he had made complaints to HR. Tesla said Lambert was promoted a year ago but wasn't given a second promotion because he had posted photos of "confidential Tesla technology on Facebook in clear violation of company policy."Complaints at Fremont
Tesla's Fremont factory has been under a great deal of scrutiny recently.
Fremont factory worker Jose Moran wrote a Medium post in early February alleging he and other workers were subject to "preventable" injuries because the machinery was not compatible with workers' bodies. He also said employees worked well over 40 hours to meet production goals, often putting in 60 to 70 hours a week due to "excessive mandatory overtime."
Since then, Tesla Fremont employees have commenced unionization efforts and contacted the United Auto Workers.
When the allegations first surfaced on Medium, Tesla CEO Elon Musk called them "morally outrageous" and said Moran had been paid by the UAW to agitate for a union. The UAW denied that accusation.
In an email to employees in late February, Musk denied Moran's claims that workers were subject to frequent on-site injuries that prompted them to take medical leave:
"Obviously, this cannot be true: If three quarters of his team suddenly went on medical leave, we would not be able to operate that part of the factory, Furthermore, if things were really even worse in other departments, that would mean something like 80% or more of the factory would be out on injury, production would drop to virtually nothing and the parking lot would be almost empty."
The suit Lambert filed on Monday claims that Tesla failed to properly rotate him after suffering a back injury that made it difficult for him to perform physical labor. Lambert went on medical leave between September 1, 2016, and November 22, 2016, the suit says.
Separately, a female Tesla engineer filed a suit against the company in late February, alleging that she had experienced "pervasive harassment" and gender discrimination while working in Tesla's general-assembly department. Tesla denied those allegations.
Around midday on March 23, the news that a once vaunted hedge fund would close started rippling through New York's hedge fund community.
Eton Park Capital Management, a $7 billion hedge fund run by former Goldman Sachs wunderkind Eric Mindich, announced it would shutter. Performance had been disappointing the previous year, but strong before that. Mindich was well regarded. The fund was a significant size. Even some of the investors were shocked to hear of the shutdown.
In several ways, Eton Park's rise and closure symbolize a broader journey for the hedge fund industry.
When Mindich launched his New York-based fund in 2004, the industry was living large. Multibillion-dollar launches weren't uncommon. The broader industry was booming. Eton Park started with $3.5 billion, thought to be the largest hedge fund startup of its time. Newspapers that no longer exist covered the launch.
More than 1,400 hedge funds launched that year, far outpacing the 300 or so closures, according to HFR. The next year was the industry's best, with more than 2,000 startups putting up a shingle.
Fast forward to now, and the tables have turned. Hedge fund closures have outpaced launches for the past two years. Performance overall has been lackluster, to put it kindly. Even the high-profile launches of yesteryear are struggling.
"It's not cool to invest in hedge funds anymore," said one startup hedge fund manager, speaking about wealthy families who traditionally backed launches. The manager, who requested anonymity, said family offices had been less interested.
It's not uncommon to hear hedge funders reminisce about the good old days before the financial crisis. That's because many are struggling to raise money or keep the capital they have. They're lowering their fees to investors, and it costs more now to run a business given increased compliance costs in the post-Bernie Madoff years.
Referring to hedge funds' traditional lucrative management and performance fees, Mark Doherty of the consulting firm PivotalPath said, "Even two or three years ago, you could start with two-and-20.
"Now you're lucky with one-and-something," he added.
The hedge funders who remain are enormously well paid, and there is little sympathy in most corners. Still, the new challenges have made the industry less lucrative and created more hurdles to get a fund off the ground.
For every story about a top manager launching with $1 billion, or a startup that got backing from idolized Wall Streeters like Dan Loeb, Louis Bacon, and Steve Cohen, dozens more funds are struggling to get up and running.
So what does it take to launch a fund? Business Insider asked a handful of new managers and consultants to get the lowdown on some areas to consider.Raise capital, but not too fast
"Institutional investors want everything before they start: three-year track record, perfect operations, more than $100 million" in assets under management, said Keith O'Callaghan, chief operating officer at FQS Capital, which invests in new funds. "We're looking at a chicken-and-egg syndrome."
The key is to start with significant assets but keep growth tempered.
He added: "Ballooning [assets under management] over a short period of time is a warning sign for us that potentially the return profile could change. Some managers find it difficult to transition from running a $50 million to $500 million book."Lots of money and a fancy pedigree
Opinions differ on how much a manager needs to start a fund — anywhere from $10 million to $250 million, though most hovered around $100 million. Those that start on the lower range can consider outsourcing back-office services. And some startups have been known to seek cheap rents at places like WeWork's coworking office space.
Keep in mind that compliance and regulatory costs are a "big line item," said one startup fund manager, who estimated the costs in the hundreds of thousands. "It would have been de minimus before Dodd-Frank," the manager said, referring to the landmark postcrisis regulatory rule.
Either way, investors say they expect managers to put up significant portions of their net worth into the fund.
"If I'm going to put my or my clients' money in it, I certainly need to know how invested you are," Doherty said. "You want to see an alignment of interests."
They're also expecting would-be managers to have spent time at investment firms with good reputations.Long track record
New managers need at least a performance record of at least three years to show potential investors, O'Callaghan said. Some hedge funds don't let their traders take their performance sheets with them, so they might need to manage money on their own for a while to build up a fresh record.
Performance is only one piece of the puzzle, though. "Even an attractive track record doesn't mean we will invest," O'Callaghan said.Patience and more time
"How quickly a hedge fund grows from a launch has been widened," Barsam Lakani, the head of prime services sales at Jefferies, told Business Insider.
"There is still evidence that investors will allocate to the right kind of launch. They're just not as frequent," he added. "They're taking a more cautious approach, they're doing more due diligence, more homework on any potential investment, and that's ultimately going to lead to fewer allocations to asset managers. ... Instead of it being a day-one process, it maybe becomes a six-month and 12-month process."Flexibility
Managers should keep an open mind about how they want to build their business and the type of investor they want to attract, Lakani added.
"You don't necessarily have to comply with what people think are the norm," he said. "Whenever you're going to launch a fund, you need pedigree and track record, but the characteristic that you need today is that notion of flexibility."
For instance, managers might consider offering co-investments, which are essentially investment ideas that show up in the hedge fund but which investors can invest in separately. The startup manager who said wealthy families weren't interested in hedge funds said that offering co-investments was a way to entice them.Discounts and creative fees
"It's no longer enough to offer discounted fees," Lakani said, adding that founders' share classes, which provide a discount for first investors, have become the norm.
Some managers, meanwhile, are experimenting with decreasing their management fees as assets increase.Tempered expectations
Few launches start with a billion, let alone a couple hundred million, but that doesn't mean a fund won't eventually grow large. Lakani said he has known funds that launched with less than $20 million two or three years ago that are now managing north of $1 billion.Be different
"People are looking for differentiation," said a New York-based manager who recently launched a fund. Startups need to pitch something that is unique, "whether it's a sector focus, derivatives that other people don't understand, some kind of specialized skill set," the manager said.Get a fancy name — maybe
A recent study found that hedge fund names with gravitas, "defined as a combination of words from geopolitics and economics, or suggesting power," raised more money. But don't get too excited — "adding one more word with gravitas to the name of the average fund brings more than a quarter million dollars more in annual flows," the study said. In other words, it's peanuts in the world of hedge fund capital-raising.
The study also found a correlation between strong hedge fund names and negative investment performance.
A revolution that's underway in healthcare could have us thinking about X-Rays the same way we think of iPhones (GE)
Software is becoming increasingly important in the world of healthcare.
GE Healthcare CEO John Flannery told Business Insider that before long we might start to think about medical devices — like MRIs or X-Ray machines — the same way we think about our smartphones. That is, the physical device might be less important than what the software inside the phone can do.
"If you think of your iPhone, its utility is fundamentally more than just the phone and the camera," Flannery said. But at the same time, it's so much more than just a device that takes pictures and picks up phone calls. "It's all the other things that you're able to do because of the combination of the hardware and software. And I think you'll see the same thing in our business."
GE Healthcare is probably best known for its hardware — its imaging machines such as MRIs and ultrasounds — but over the past few years the company has made a push toward digitization. Flannery said the company spends about $1 billion a year on launching new hardware. "We're always going to invest heavily in the hardware because you have to be competitive and get an edge on that," he said.
But at the same time, he's shifting his attention more toward what that hardware can tell you when paired with software. For example, if an imaging device can monitor a person's tumor and determine the rate at which a tumor is growing, that information could possibly lead to better medical outcomes.
As for whether software will become the main focus, Flannery isn't convinced. "I think it's not going to be an either or thing," Flannery told Business Insider. "We definitely think there will be a growing role in importance and criticality of the digital side of things."
It's a different take from, Vijay Pande, a general partner at Andreessen Horowitz, who told Business Insider that he thinks software could be the future of healthcare, replacing "hardware" (pills, medical devices, etc.) with software that provides more valuable information and outcomes than hardware.
GE Healthcare employs about 5,000 software engineers right now, which make up 10% of GE Healthcare's total employment. That number's expected to double over the next several years.
The hiring effort is part of this broader plan, with GE Healthcare planning to invest $500 million in software and software engineers in 2018.
It's no secret that women are often treated differently in the workplace. And that is especially the case in more male-dominated fields such as financial services.
It's for that reason that Clare Scherrer, a partner at Goldman Sachs, advises young women to get in front of clients as soon as possible. The idea: To get past any preconceptions, and show off your ideas.
"One of the things I think is important for women to realize is that we all tend to judge a book by its cover until we start reading the book," she said in a recent Q&A with Goldman Sachs podcast, Exchanges at Goldman Sachs.
Scherrer, who is global co-head of industrials in Goldman Sachs' investment banking division, cited an example from her career when she had to do just that.
"I was flying to Milan to meet with an Italian client, and when we landed and we're going through Customs and Immigration, my Italian male colleague got a phone call from the CEO who said,"You didn't tell me Clare, who you're bringing to the meeting, is a woman."
Scherrer said the CEO was upset because he did not make reservations for their meeting at a fancy restaurant. But Scherrer made sure to illustrate her value proposition, and within 15 minutes the CEO forgot all about her being a woman.
"Isn't that interesting that that's what he was worried about? And we got to the company, we started the meeting at the cafeteria, eating sandwiches. Fifteen minutes into the meeting, he no longer was focused on me being a woman; he was focused on my content. He was focused on the fact that I actually knew the most about the topic he wanted to cover within the Goldman Sachs network, and the cover of the book didn't matter; the content of the book is what mattered."
That experience informs the advice Scherrer passes on to young women trying to make it in finance.
"So, when I'm advising young women, I tell them that the sooner and the more often they can talk in front of their clients and really deliver advice and judgments, the better," she added.
"That's the way that young women can really set themselves up to succeed."
THE INSURTECH REPORT: How financial technology firms are helping — and disrupting — the nearly $5 trillion insurance industry
The global insurance industry is worth nearly $5 trillion, and insurance companies are at risk of losing a share of this valuable market to new entrants. That's because these legacy players have been even slower to modernize than their counterparts in other financial services industries.
This has created an opportunity for a group of firms known as insurtechs. These startups are leveraging new technology and a better understanding of consumer expectations to increase efficiencies in the insurance industry. Some are helping incumbents deliver better end products, while others are directly competing with legacy players.
In a new report from BI Intelligence, we look at the drivers behind the increasing number of insurtech companies, how they are helping or disrupting legacy players in the insurance industry, and where legacy players are innovating off their own backs.
Here are some of the key takeaways:
- The opportunity is currently biggest in the US and Europe. That's because these regions have large, very mature insurance industries.
- Insurtechs' products and services mostly target retail customers. This includes small businesses and consumers.
- Most insurtechs are acting as enablers. This means that they offer products and services that help insurers and reinsurers improve their processes and better serve customers.
- Of the main players in the insurance industry, brokers are most at risk of disruption. This is because insurtechs can easily replicate their services and are solving historical industry problems faster than legacy players.
- Legacy players are also innovating. In particular, insurers and reinsurers are investing in insurtechs and fintechs working with relevant technologies. At the same time, they are improving their own direct-to-consumer digital interfaces, increasing their disruptive threat to brokers.
In full, the report:
- Explains the structure and current state of the insurance market.
- Highlights areas where insurtechs can help legacy players modernize.
- Describes where insurtechs are competing with incumbents and how their models compare.
- Provides case studies of insurtechs.
- Outlines the legacy response.
- And much more.
Interested in getting the full report? Here are two ways to access it:
- Subscribe to an All-Access pass to BI Intelligence and gain immediate access to this report and over 100 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now
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US Treasury Secretary Steven Mnuchin has said stock prices are a good barometer of success for a presidency.
He may have been looking at the wrong market.
Many on Wall Street tend to look at Treasury bonds as the “smart money” when it comes to predicting the future of the economy, because there are fewer retail investors than in the stock market. Additionally, those investors tend to be more sober-eyed and less susceptible to bouts of irrational exuberance.
It's for that reason that investors should be worried about the recent divergence in messages coming from the stock and bond markets. Even as the S&P 500 rallies to repeated record highs, Treasury bond yields, which move opposite to their price, have steadily fallen, indicating preoccupation with the future, not confidence in it.
The 10-year yield spiked as high as 2.64% in the wake of the election as traders bought into renewed optimism about President Donald Trump’s ability to pass business-friendly legislation through a Republican-controlled Congress. It has since retreated to around 2.40%.
That means investors are betting interest rates are not going to rise as quickly, meaning they foresee an economy that will continue to struggle just to reach growth of around 2%. In other words, while the stock market is rallying, suggesting confidence in economic growth, the "smart money" is doing the opposite.
"Stocks tend to have an optimistic bias, and bond markets a pessimistic bias. One looks at the glass half full, the other at the glass half empty," said Thomas Costerg, economist at Standard Chartered.
"This may explain that stocks are holding up quite well," he said, even though "Congress’ failure to repeal the health-care bill is a significant legislative setback that has led investors to reconsider the popular reflation trade, premised on the view that the Trump administration will bring material fiscal easing to the US economy."
The failure of Trump’s first major piece of legislation reinforces concerns about the underpinnings of the stock rally — the idea that Trump and Republicans Congress would see eye to eye on the big issues. Doubts about the momentum for tax reform are rising after the healthcare showdown exposed previously hidden divisions within the Republican Party.
"The fixed income markets are not showing signs of enthusiasm," writes FTXM’s Chief Market Strategist Hussein Sayed in a research note. "This explains why the dollar lost much of its value, but more importantly, it indicates that fixed income investors do not see real signs of acceleration in inflation and economic growth."
Electric-car startup Faraday Future hit another speed bump in its nearly yearlong struggle to keep the lights on. The Southern California-based company announced it is scrapping plans to build a secondary facility in the San Francisco Bay Area.
The site, a naval shipyard on Mare Island in the city of Vallejo, was the subject of Faraday's plan to build a light industrial facility for manufacturing electric vehicles. The company entered an agreement with city officials in May last year that set forth terms for negotiations on the 157-acre site.
"Due to the new strategy to focus corporate efforts on development of its first production vehicle and plant in North Las Vegas, FF has decided to end its Exclusive Right to Negotiate (ERN) with the City of Vallejo," a Faraday spokesperson said in an emailed statement to Business Insider. The company indicated it would keep Vallejo on its radar for potential future opportunities.
According to the Vallejo Times-Herald, Faraday had been given two extensions on the negotiation contract with the city — once in December, and again some three months later — to see if the company was able to buy the property. Faraday's most-recent reprieve was a 45-day extension that it forfeited less than three weeks later, the newspaper reported.
Faraday Future, hamstrung in recent months by an ambitious agenda that was all but upended by a cash shortage and a mass exodus among its executive ranks, has sought to refocus its efforts — namely, finishing development of its production concept car, the FF91, and getting its main factory off the ground.//
That main factory is expected to go up about 30 miles north of the Las Vegas Strip, though the construction site the company celebrated in April last year is still a vast empty lot in the middle of the Nevada desert. The company touts the vacant acreage as "phase 1" of the project, promising the next phases would begin "very soon."
It is unclear what Faraday's actual timelines are, even as the company claims to be receiving new reservations for the FF91 electric car — a tech-laden, crossover-style vehicle that was not yet ready for production as of its debut at the Consumer Electronics Show in Las Vegas this year.
Seen as a threat to Tesla at its inception, Faraday is primarily backed by tech billionaire Jia Yueting, the chief executive of the media and electronics conglomerate, LeEco. Jia's company has had its own money problems and mass layoffs in the last few months, which were followed by the rumored sale of a 49-acre property LeEco bought from Yahoo less than a year ago in Silicon Valley.
LeEco got a $2.2 billion investment from the property company Sunac China Holdings in January, but that money was earmarked for LeEco's entertainment business and not its languishing car upstarts.
LONDON — Prime Minister Theresa May has signed the Article 50 letter of notification that she will send to the European Union on Wednesday to formally get Brexit underway.
May was pictured in Downing Street on Tuesday evening adding her signature to the historic letter, which will formally notify the European Commission of Britain's departure from the EU.
The letter will be handed to European Council President Donald Tusk at 12:30 p.m (BST) tomorrow by British ambassador to the EU Sir Tim Barrow, immediately after May finishes debating Labour Party leader Jeremy Corbyn in this week's instalment of Prime Minister's Questions.
A two-year process of negotiations will then get underway where May and her negotiating team will try to come to a divorce agreement with EU figures. The discussions are set to cover how much Britain must pay the EU as part of its divorce settlement and what long-term free trade deal — if any — can be finalised before the two-year window expires.
Britain is set to officially drop out of the EU no later than March, 2019.
In an address to Parliament on Wednesday, May is set to call on the country to "come together" and support a "truly global Britain" as the nation braces itself to leave the 28-nation bloc after nearly half a century of being a member.
The prime minister is expected to say:
"When I sit around the negotiating table in the months ahead, I will represent every person in the whole United Kingdom – young and old, rich and poor, city, town, country and all the villages and hamlets in between.
"And yes, those EU nationals who have made this country their home.
"It is my fierce determination to get the right deal for every single person in this country.
"For, as we face the opportunities ahead of us on this momentous journey, our shared values, interests and ambitions can - and must - bring us together.
"We all want to see a Britain that is stronger than it is today. We all want a country that is fairer so that everyone has the chance to succeed.
"We all want a nation that is safe and secure for our children and grandchildren. We all want to live in a truly Global Britain that gets out and builds relationships with old friends and new allies around the world.
"These are the ambitions of this Government’s Plan for Britain. Ambitions that unite us, so that we are no longer defined by the vote we cast, but by our determination to make a success of the result.
"We are one great union of people and nations with a proud history and a bright future.
"And, now that the decision has been made to leave the EU, it is time to come together."
When UK Prime Minister Theresa May delivered her keynote Brexit speech in January, she spoke from the same London venue where Margaret Thatcher declared the European Union, in its earliest form, "open for business" in 1988.
Former Prime Minister Thatcher was one of the EU's main architects, but May will be remembered as the British premier who oversaw Britain's exit from the 28-nation bloc, fundamentally reshaping the body as a result.
Since Apple launched the iTunes Store and began selling songs for 99 cents each, media bigwigs have been advocating for an “iTunes for news” model to help ease digital media companies’ transition from print to digital.
But since then, publishers still have struggled to effectively mimic the success of iTunes, and convert it into revenue for content.
The closest model is micropayments, or low-value payments for online goods and services.
Micropayments, which allow users to pay per piece of content they purchase, are a relatively new problem for the online payments industry. That’s because in person, users are most inclined to use cash for payments below $10, and for online purchases of physical goods, shipping costs often disincentivize users from making low-value payments. For digital content, though, there’s no alternative to accepting low-value card payments, which mean that firms wanting to harness this model will have to seek out ways to make it work.
Right now, micropayments aren’t effective. For consumers, they present psychological hurdles, because mobile and digital buying is already challenging and making frequent purchases could exacerbate these frictions. And for content producers, fees associate with digital payment eat away at the cost and limit or eliminate the profit potential for these types of goods, making them a challenge even if they were to catch on.
There are reasons for optimism — many publishers have bought into an app called Blendle, which aggregates content and makes payment more frictionless. And Blendle has seen modest gains since launch, which indicates that micropayments could gain traction under the correct circumstances. If a giant, like Apple, Google, Facebook, or another platform where customers both have existing news and payment relationships, were to take the challenge on, its value could begin to increase.
A new report from BI Intelligence, Business Insider's premium research service, outlines the micropayments problem and forecasts the future of micropayments for consumers and merchants. It also offers potential solutions for micropayments problems.
Here are some of the key takeaways from the report:
- Digital micropayments are on the rise because they help solve a problem for online content providers. Micropayments have proven successful for digital music and app purchases. That's led publishers of digital content, like news or video, to look at them as an alternative way to monetize content, particularly in the wake of rising ad-blocker usage.
- For merchants, micropayments are often too expensive to offer. Processing fees associated with card-based transactions are often high enough that they pare down or eliminate almost all potential for seller profit from micropayment transactions.
- A major tech giant could seize the opportunity to work with publishers to grow its own apps and payments offerings at the same time. Their wide reach and seamless payments infrastructure could get the necessary buy-in from merchants and consumers alike to make the model more successful across the board.
In full, the report:
- Explains why micropayments are growing in popularity among content producers
- Evaluates why these types of payments pose a problem to both merchants and consumers
- Provides detail about potential solutions, both from payments providers and other third-party players in the space
- Assesses the conditions under which micropayments could take off, and determines whether or not they have a shot at success
- And much more
Interested in getting the full report? Here are two ways to access it:
- Subscribe to an All-Access pass to BI Intelligence and gain immediate access to this report and over 100 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now
- Purchase & download the full report from our research store. >> Purchase & Download Now
Republican leaders have diverging views on whether or not Democrats should celebrate the 'Trumpcare' flameout
Two leading congressional Republicans had seemingly different views on the future of healthcare overhaul from the party — and whether or not Democrats should be cheering the GOP's inability to bring their to the House floor for a vote last week.
Rep. Steve Scalise of Louisiana, the Republican House whip, told reporters Tuesday that the celebration from Democrats on the American Health Care Act's failure was coming too early.
"To my Democrat colleagues who were celebrating Friday's action, I think their celebration was premature because we're closer today to repealing Obamacare than we've ever been before. Surely, even closer than we even were Friday," Scalise said at a press conference held by House Republican leaders.
Slightly less optimistic was Senate Majority Leader Mitch McConnell, who told reporters on Tuesday that Obamacare was going to stick around.
"I think where we are on Obamacare, regretfully, is where Democrats wanted us to be — with the status quo," he said.
He continued that he expected Democrats to be pleased about the AHCA's failure.
"Well it's pretty obvious we were not able, in the House, to pass a replacement," McConnell said. "Our Democrat friends out to be pretty happy about that because we have the existing law in place."
For their part, Democrats did gloat after the GOP could not muster enough votes to pass the AHCA, which became colloquially known as "Trumpcare," through the House. Disagreements between the conservative and moderate wings of the party, plus House Speaker Paul Ryan and President Donald Trump's inability to bring the sides together, led to the bill being pulled from the House floor.
House Minority Leader Nancy Pelosi said on Friday that the decision to pull the bill by Trump and Ryan was "a victory for the American people."
SEE ALSO: 'Trumpcare' is not dead yet
Restoration Hardware on Tuesday announced a forecast for first-quarter sales that beat analysts' expectations, sending its shares higher in extended trading.
The high-end furniture retailer said it saw first-quarter net revenues in a range of $530 million to $545 million, beating the forecast for $485.1 million according to Bloomberg.
For the fourth quarter, Restoration Hardware reported adjusted earnings per share of $0.68 and net revenues of $586.7 million, both in line with its earlier guidance.
"We made several strategic investments and changes to our business last year, which temporarily depressed financial results in the short term, that we believe will strengthen our brand and position the business for accelerated growth in fiscal 2017 and beyond," said Gary Friedman, the company's CEO, in the earnings statement.
After lowering its outlook on full-year EPS last quarter, the company attributed weakness to slow sales around the election and late delivery of its Fall 2016 catalogs.
Restoration Hardware shares gained 10% in after-hours trading. They rose 2% in the 12 months through Tuesday's market close.
Billionaire casino magnate Steve Wynn went back for more, but yet again a court slapped down the notion that he was slandered by famed short seller, Jim Chanos.
Wynn appealed a 2015 district court decision to throw out a lawsuit against Chanos accusing the short seller of slander after remarks made in a closed talk.
In a three page decision upholding the dismissal viewed by Business Insider, the Ninth Circuit Court of Appeals maintained that Wynn had failed to make a "plausible" claim of liability on Chanos' part as Chanos was not stating fact, but asserting his opinion.
"Wynn asserts the district court erred when it determined Wynn had not spelled out the case for slander. We disagree," the Court wrote.
The decision also maintained Wynn's liability for Chanos' legal fees.
In case you missed the first go-round, back in 2014 Wynn sued Chanos for slander based on comments Chanos made during a closed talk about the casino industry in Macau.
You can see video of the event here. Chanos starts speaking around 4:00 and again around 36:00.
Chanos launched his short-only firm, Kynikos Associates, back in the 1980s and catapulted to international fame after helping to bring attention to accounting fraud at Enron before the energy trading company went bankrupt.
Chanos has been publicly short the casino industry in the past, and during his 2014 talk he expressed concern about potential violations of the Foreign Corrupt Practices Act.
Wynn was livid and filed suit against Chanos in September 2014. The matter was dismissed in March 2015.
"I need look no further than the transcript and video of the symposium to conclude that Chanos’s words do not amount to a statement of fact, but rather an opinion that is not actionable. For these reasons, and because I grant Chanos’s motion to dismiss," California District Judge William Orrick wrote in his 2015 decision.
Undaunted, Wynn appealed, but he lost. And here we are. Jim Chanos declined to comment for this story.
Billionaires, man. They have problems just like us.
Read the full decision, embedded below:
Stocks rallied on Tuesday following a dip Monday that appeared related to concern about the failure of "Trumpcare" to get enough votes in the House. That failure cast doubt on the rest of President Donald Trump's economic agenda.
Here's the scoreboard:
- Dow: 20,701.50, +150.52, (0.73%)
- S&P 500: 2,358.57, +16.98, (0.73%)
- Nasdaq: 5,875.14, +34.77, (0.60%)
- 'Trumpcare' is not dead. Republicans emerged from a closed-door caucus meeting saying they had not abandoned their desire to repeal and replace the Affordable Care Act, also known as Obamacare, even after they yanked their bill from the House floor on Friday.
- Following the health care debacle, Trump is planning to move up the timetable on large-scale infrastructure spending to this year, reported Jonathan Swan at the news website Axios.
- US consumer confidence spiked to a 16-year high in March. The Conference Board's consumer confidence index jumped to 125.6, the highest since December 2000.
- Home prices rose to a 31-month high in January. The S&P CoreLogic Case-Shiller national home-price index climbed 5.9%, not seasonally adjusted. The biggest gains were again recorded in the red-hot markets of Seattle, Portland, and Denver.
- Snap shares sank 4% after Facebook launched Stories. Much like Snapchat, Facebook Stories will allow users to post photos and videos that will disappear after 24 hours.
- The Securities and Exchange Commission rejected plans for the SolidX Bitcoin ETF. The regulator cited the fact that bitcoin is traded on unregulated markets, which means the SEC wouldn't be able to prevent fraud or market manipulation.
- After Trump tweeted about a "major investment" from Ford, the automaker said it would invest $1.2 billion in three Michigan facilities and create 130 jobs in projects. The moves were largely in line with a previous agreement with the United Auto Workers union.