- Thursday, the Labor Department said that weekly unemployment claims fell to a new 52-year low last week as the U.S. jobs market rose from its pandemic-era slump. For the week ending December 4, 184,000 people applied for unemployment benefits, the lowest number since September 6, 1969, when 182,000 people applied.
According to a Dow Jones analyst survey, they predicted the first unemployment insurance claims for the week ending December 4 to number 211,000.
A significant seasonal adjustment inflated the total since the unadjusted figure was 280,665. However, the decrease in claims, which decreased from 227,000 the week before, signals more remarkable progress for a job market still dealing with a labor shortage and other pandemic-related consequences.
Continuing claims climbed 38,000 to slightly under 2 million, a week below the headline number.
“A correction next week is inevitable,” noted Ian Shepherdson, chief economist at Pantheon Macroeconomics, “but the trend in claims is declining swiftly, indicating the acute tightness of the labor market and the resumption in GDP growth currently beginning.” “Firms should only let rid of employees if they have no other option because rehiring them afterward will be difficult and potentially expensive.”
The rise in claims hides that monthly payroll statistics were lower than predicted. Even though the jobless rate fell to 4.2 percent, November saw just 210,000 new hires.
The Federal Reserve is anticipated to speed up the tapering of its bond-buying program next week, lowering monthly purchases by $30 billion. According to current market pricing as gauged by the CME, this is considered a prelude to rate rises, which might come as soon as May 2022.
The Fed’s policy shift is in reaction to persistently high inflation, which is substantially above the Fed’s 2% objective.
The real estate crisis in China is getting worse: Kaisa’s stock was delisted after it failed to pay a $400 million bond:
In Shanghai, China, a guy wearing a protective mask walks through the Shanghai Kaisa Financial Center, which has a Kaisa Group Holdings sign in the backdrop.
Kaisa, a heavily indebted Chinese real estate developer, halted its stock listing on the Hong Kong Stock Exchange on Thursday after the deadline for paying an offshore bond of $ 400 million, which it had attempted to postpone due to liquidity issues, expired on Tuesday.
The real estate agency issued a statement a few minutes before the Hong Kong stock exchange opened, announcing the suspension of trading in its shares due to a forthcoming “insider declaration.” He did not comment on whether he ultimately reneged or reached a last-minute peace agreement with his debt holders.
In any event, the uncertainty did not sit well with investors in some of Kaisa’s Hong Kong-listed subsidiaries: construction machinery subsidiary Kaisa Capital was down 13%, and real estate services subsidiary Kaisa Prosperity was down 2.5 percent around 10.00 local time (02.00 GMT).
Kaisa Health (+ 2 percent) did not take the same route, even though it is devoted to manufacturing orthodontic appliances rather than real estate.
The parent firm sought failed last week to get enough bondholder consent to extend the bond, after which it issued a statement warning: “There are no guarantees that the company will be able to satisfy its payment obligations on the due date.”
If you do not pay, your firm may face cross-insolvency on your offshore bonds, which is a circumstance in which a debtor’s suspension of payments with a single creditor is enough for other creditors to pursue repayment of their loan.
According to company statistics, Kaisa had around $ 11,275 million in offshore notes at the end of the second quarter, making it the second-largest issuer among Chinese developers, just behind Ever Grande, according to certain media.
Two thousand two hundred forty-seven million dollars belong to lots that must be returned by the end of the first half of 2022. It’s worth remembering that Kaisa was the first Chinese real estate developer to fail on an offshore bond in 2015.
In recent months, the Chinese real estate sector has drawn the attention of international investors due to the liquidity concerns of their firms, the most prominent of which is Evergrande, which has accumulated a liability of more than $ 300 billion.
Evergrande had a 30-day extension to pay the interest on two offshore bonds whose likely non-payment it warned about last week, but it has yet to make a declaration about it. Nonetheless, the Fitch rating agency said that the firm had gone into a payment suspension on Thursday.
Following the real estate giant’s statement, the central bank, as well as bank and stock market authorities, issued favorable comments, stating that the danger of contagion from the Ever Grande problem is “controllable.”
In the meantime, several Chinese realtors saw stock gains on Tuesday night after some media reported that the Communist Party of China moderated. In an executive discussion, this dialect on the sector was construed as a possible relaxation of Beijing’s limited or no access to lending rates for the most deeply in debt development companies.
However, they have suffered significant losses this year: Kaisa’s share price is down 74%, while Ever Grande’s is down 87%. Kaisa, China’s second-largest holder of offshore debt after China Evergrande Group, failed to repay $400 million in notes due Tuesday. triggering a cross-default provision on all of its offshore obligations and forcing Fitch Ratings to downgrade it to “limited default.”
It would be among the largest in China, even as uncertainty persists over the fate of Ever Grande’s missing bond coupon payments this week, which would cause a cross-default on its nearly $19 billion in international obligations, with potential consequences for China’s economy and beyond.
Ever Grande, which has over $300 billion in liabilities and is at the center of China’s property crisis, has not disclosed whether the bonds have technically defaulted but stated last week that it intends to proceed with a debt restructuring. The NDA will create the framework for future discussions about forbearance and funding options.
According to the sources, formal conversations on forbearance and finance plans may begin after the NDA is in place, which declined to be identified because the talks are private.
According to reports, the group previously pledged $2 billion in new loans to assist Kaisa in repaying its onshore and offshore obligations. Other funding options are also being considered.
According to the first source, Kaisa is also negotiating with another bondholder group. Ever Grande’s stock has dropped 88 percent this year due to the debt problem, fueling fears of a more significant contagion and prompting officials to seek reassurance that it can handle the consequences.