Riyadh's latest plan was to invite Damascus to an Arab League summit that Saudi Arabia is hosting on May 19. The move was designed to demonstrate Crown Prince Mohammed bin Salman's diplomatic clout as rivals re-establish ties with Syria and countries such as China and Russia challenge the U.S. for influence in the volatile region. Saudi Arabia, the United Arab Emirates and some other Arab states are rekindling ties with the government of Syrian President Bashar al-Assad. Last month, Saudi Arabia also re-established ties with Iran in a deal brokered by Beijing.
Government Looking for Leaker in Ukraine Documents Probe
WASHINGTON-The U.S. government is treating the apparent disclosure of classified material surrounding the war in Ukraine as an insider's leak, people familiar with the matter say, but hasn't yet homed in on key suspects for a massive intelligence breach that has exposed the challenges of safeguarding sensitive U.S. information and tested ties with some of America's closest allies.
The bulk of the more than 60 documents, if genuine, appear to originate from the Central Intelligence Agency's Operations Center and the Pentagon's Joint Chiefs of Staff. Such documents are typically briefed to senior-level decision makers at the Pentagon in an environment protected from electronic surveillance and secured against leaks.
GLOBAL NEWS
Deposit Crisis Sets Up a Tough First Quarter for All But the Biggest Banks
Bigger is better for banks this earnings season.
A deposit run that felled Silicon Valley Bank and Signature Bank has hurt small banks much more than big ones, draining low-cost funding that has fueled their profitability in recent years.
Track How U.S. Banks Are Faring in First-Quarter Earnings
In March, banks experienced one of their worst months this century. The collapse of Silicon Valley Bank and Signature Bank sparked widespread fears about potential deposit runs and declining values of bonds and loans.
Now attention will turn to how the banks are doing and what comes next. The Wall Street Journal will break down some of the critical numbers investors will be watching in first-quarter earnings over the coming weeks. Stay tuned for further updates.
Banks Keep Pouring Cash Into Fossil Fuels. U.S. Lenders Lead the Way.
The world's biggest banks continued to channel billions of dollars into boosting fossil-fuel production capacity in 2022 despite growing calls to scale back lending in response to global warming, finds a new report.
The annual Banking on Climate Chaos report, authored by a group of nonprofits, including Rainforest Action Network, said banks provided $673 billion in finance to the fossil-fuel industry last year. Canadian banks are providing a rising share of the money, though U.S. lenders are still the dominant player.
Chinese Exports Surge as Trade With Russia and Southeast Asia Jumps
HONG KONG-China's exports bounced back sharply in March, a surprise that reflects greater demand in Asia and Europe as well as improved supply chain conditions.
Another major reason that was behind the unexpectedly strong result: A more than doubling of Chinese exports to Russia in March from a year earlier, highlighting warming economic ties between the two like-minded neighbors.
More Junk-Rated Companies Are Facing Credit Downgrades and Defaults
The prospects of U.S. companies with significant leverage or rated several notches below investment grade have turned bleaker in recent months, credit-rating firms say, and default rates for junk-rated companies could more than double by early next year.
While highly rated companies are proving largely resilient during the postpandemic economic turbulence, businesses with lower credit ratings and floating-rate debt are increasingly struggling with steep increases to debt-servicing costs and a possible recession as the Federal Reserve continues interest-rate hikes. What's more, still-steep inflation and softer demand are also expected to erode some companies' profit margins, the ratings firms said.
Property Has an Open-Ended Problem
An old design flaw in the commercial real-estate industry is back, and this time it is bigger and broader.
Property investment funds have ballooned in size since the 2008 global financial crisis, and not just in the U.S. According to the European Central Bank, eurozone real-estate funds had assets under management of 1.04 trillion euros at the end of 2022, equivalent to $1.14 trillion and up from EUR200 billion in 2007. Some 80% of these funds by value are open-ended, giving investors the option to cash out daily, weekly or quarterly.
Chinese State-Owned Enterprises Are Hong Kong's Hottest Stocks
China's stodgy state-owned companies have become the stars of Hong Kong's stock market.
At the Communist Party Congress in October, President Xi Jinping said state-owned enterprises needed to "get stronger, do better and grow bigger." Investors are taking heed. State-owned property developers are trouncing their debt-laden private sector rivals. Shares of the country's largest homegrown semiconductor maker are up by more than a third.
North Korea Fires Ballistic Missile Toward Japan
SEOUL-North Korea fired a ballistic missile on Thursday, nearly a week after the country's military stopped responding to calls on an inter-Korean military hotline and days after leader Kim Jong Un vowed to strengthen the military's capabilities.
The missile was launched at a lofted trajectory around 7:20 a.m. from an area near North Korea's capital of Pyongyang, traveling for more than 600 miles before landing in waters east of the Korean Peninsula, according to South Korea's military. Japan sent out an alert warning residents in the country's northernmost island of Hokkaido to take shelter but later said the missile didn't land in Japan's territory or its exclusive economic zone.
Donald Trump to Be Deposed by New York Attorney General
Donald Trump is set to answer questions under oath Thursday from lawyers for New York Attorney General Letitia James, according to people familiar with the matter, as her office prepares for a trial later this year on its allegations that the former president and others engaged in civil fraud.
The deposition marks Mr. Trump's second with lawyers for Ms. James, who has accused the former president, his business and three of his adult children of a decadelong scheme to falsely value real-estate assets. The lawsuit seeks $250 million in alleged ill-gotten gains, in addition to asking a judge to effectively cripple the Trumps from operating their company in New York. Mr. Trump has denied wrongdoing and said that Ms. James, a Democrat, is motivated by politics.
America's Top Hostage Envoy Pledges to Secure Evan Gershkovich's Release From Russian Prison
The U.S.'s top hostage negotiator called on Russia to allow American Embassy officials to visit detained Wall Street Journal reporter Evan Gershkovich and pledged to find a way to secure his release and that of another American, Paul Whelan.
Roger Carstens, the special presidential envoy for hostage affairs, made the remarks in a series of morning television interviews, appearing across ABC, CBS, NBC, CNN and MSNBC.
Before Evan Gershkovich, Nicholas Daniloff Was the Last U.S. Reporter Accused of Espionage by Moscow
WASHINGTON-The closest parallel to the experience of Wall Street Journal reporter Evan Gershkovich in Russia unfolded almost four decades ago, at the height of the Cold War.
Nicholas Daniloff, a correspondent for U.S. News & World Report, was accused of espionage in 1986 by the KGB, the powerful intelligence service. The FSB, the KGB's successor, detained Mr. Gershkovich while he was on a reporting trip in Russia last month and accused him of espionage-a charge that the Journal and the U.S. government vehemently deny. Mr. Gershkovich was accredited to work as a journalist in Russia by the country's foreign ministry at the time of his detention. The Journal and the U.S. government have demanded his immediate release.
White House Works to Satisfy Senate Democrats in Fed Vice Chair Search
WASHINGTON-The White House is working to secure the support of key Capitol Hill allies as officials deliberate over whom to nominate for the No. 2 job at the Federal Reserve, according to people familiar with the matter, with Democrats' slim majority in the Senate hanging over the search.
Last month, some administration officials privately identified Janice Eberly, a finance professor at Northwestern University, as the leading candidate for the Fed vice chair. But Sen. Robert Menendez (D., N.J.), a senior member of the Senate Banking Committee, has continued to mount an aggressive campaign to pressure the White House to nominate a Latino economist for the job.
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This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
04-13-23 0609ET
