World News

HERSHEY, Pennsylvania — Hershey Co is looking to reduce “trace” amounts of lead and cadmium in its chocolate, chief financial officer Steve Voskuil told Reuters on Wednesday, after Consumer Reports found that some dark chocolate bars had potentially harmful levels of the heavy metals.

Consumer Reports, a nonprofit consumer group, tested chocolate bars including those made by Hershey late last year and found that some of them contained possibly harmful levels of lead, cadmium or both for people who eat more than one ounce per day.

The trace amounts of the metals found in some chocolates are “below any recommended level, any standard,” Mr. Voskuil said, adding that lead and cadmium are elements in soil and can naturally occur in the product.

“Depending on where you source, you may get relatively more lead or cadium in West Africa versus South America, but in both cases it’s a naturally occurring ingredient,” Mr. Voskuil said.

“We would love to eradicate it completely and continue to look for opportunities in the process, is there more we can do there,” he said on the sidelines of the Reese’s makers’ investor day.

Consumer Reports found that Hershey’s Lily’s extremely dark chocolate 85% cocoa bar was high in lead and cadmium. Its Hershey’s Special Dark mildly sweet chocolate and Lily’s extra dark chocolate 70% were also high in lead according to the report.

Mr. Voskuil said the manufacturing and cleaning process for cocoa beans removes the “vast majority” of lead and cadmium.

Hershey is “evaluating” if it can remove more of the metals through additional cleaning of cocoa beans or alternate sourcing, he said.

“Despite the cleaning process we’re also always looking, are there other things we can do to reduce it even lower,” Mr. Voskuil said.

Hershey faces multiple lawsuits from consumers who claim the chocolate maker should have disclosed the levels of heavy metals, and that they would have paid less for or not bought the products had they known. — Reuters

LONDON — At the turn of the year, bitcoin was in the grip of a bleak midwinter, down and out after a 2022 defined by tumbling crypto prices, bankruptcies and corporate scandals.

Less than three months later, bitcoin’s got its mojo back. With gains of more than 70% so far this year, it has outpaced other major assets, and was on Wednesday trading near its highest in nine months.

The original and biggest cryptocurrency has been here before, its 15-year history peppered with dramatic price increases and equally vertiginous drops. Fueling the gains: interest rates.

Markets expect that central bank hikes to the cost of credit are nearing their peak, and such a scenario is set to buoy risk-on assets such as bitcoin, six investors and analysts from crypto and traditional finance told Reuters.

“The macro narrative is the number one,” said Noelle Acheson, an economist who has tracked the crypto sector for seven years. “Bitcoin is not just a risk asset, it is arguably the most sensitive to monetary liquidity out of all of the risk assets.”

Other factors are at play, too, from turmoil in the banking sector to enduring hopes — still unfulfilled — that bitcoin can achieve wide usage as a form of payment.

Bitcoin closed its best week in four years on Sunday, and has gained 45% in just 12 days.

As the collapse of US lenders Silicon Valley Bank and Signature Bank helped to triggered the takeover on Sunday of 167-year-old Credit Suisse by rival UBS, claims that bitcoin is an asset immune to risks in traditional finance have gained traction.

“It’s rather narrow-minded to say that bitcoin is going to succeed because a bank failed,” said Usman Ahmad, CEO of Zodia Markets, the crypto exchange of the venture arm of Standard Chartered and Hong Kong crypto firm BC Technology Group.

“But confidence is almost a critical factor — confidence in the banking system has been damaged.”

Driving bitcoin’s gains have been its core user base of retail investors, analysts said. Institutional investors such as pension funds, until now wary of the unstable and mostly unregulated bitcoin, are likely to remain sceptical of a long-lasting renaissance for the cryptocurrency, the interviews showed.

“Bitcoin’s recent bull run looks to be mainly supported by individual investors — ranging from retail to whales — as we have seen evidence of institutions exiting during this rally,” said Zhong Yang Chan, head of research at crypto data firm CoinGecko.

Indeed, bitcoin investment products, favored by larger investors, saw outflows of $113 million last week, according to digital asset manager CoinShares, which ascribed the moves to a scramble for liquidity during chaos in the banking sector. In the past, too, dramatic price swings for bitcoin have been closely tied to shifts in monetary policy globally.

As stimulus measures flooded the global financial system during the COVID-19 pandemic, stay-at-home investors fueled a six-fold rally for bitcoin between September 2020 and April 2021.

Those moves, allied with emerging interest in crypto from larger investors and companies, led crypto backers to vow that its chances of a bruising crash historically seen after bitcoin rallies were lower.

Yet as signs of runaway inflation late in 2021 forced central banks and governments to curb stimulus packages, bitcoin slumped by more than half from its record high of $69,000 in just 75 days as rates began to rise.

In 2022, bitcoin plummeted over 65% as higher rates triggered the fall of a major crypto token, precipitating the closure of major hedge funds and crypto lenders. It was further bruised by regulatory headaches and the dramatic fall of the FTX exchange.

The disastrous year was another reminder of bitcoin’s vulnerability to external shocks, despite backers’ claims it is a safe haven asset in times of political and economic stress.

To be sure, some investors say developments to bitcoin’s intrinsic characteristics are now capable of supporting its price. Richard Galvin of crypto fund Digital Asset Capital Management, for instance, cited software upgrades that have enabled a new breed of non-fungible tokens on bitcoin.

Still, for investors in traditional assets, doubts remain.

“I don’t know if old-school currency people are reassessing it,” said Stephen Gallo, European head of FX strategy at BMO Capital Markets. “We are still struggling with bitcoin on the definition of a currency.” — Reuters

WASHINGTON — The Biden administration is under pressure to ban popular Chinese-owned social media app TikTok, but any such move likely hinges on passage of a new law that bolsters the government’s authority to regulate speech, experts said.

Pressure is mounting from lawmakers and national security hawks to ban TikTok, which is owned by China’s ByteDance, over fears the app could censure content, influence users, and pass Americans’ personal data to Beijing, allegations the company denies.

Courts blocked a prior bid by the Trump administration to ban the app in part on the grounds that such a move violated free speech protections.

That means any move to block the app likely depends on passage of legislation like the RESTRICT ACT, a bipartisan bill introduced by Senators this month granting the Commerce Department new power to ban foreign technology that poses a national security risk. That would circumvent the speech protections embedded in existing law, lawyers and China watchers said.

“RESTRICT is really helpful because it gives this completely new, from scratch, legal authority that doesn’t have any of those complications” under other laws, said Emily Kilcrease, a senior fellow at the Center for a New American Security and former deputy assistant US Trade Representative. “It’s a much stronger, cleaner legal authority.”

TikTok previously criticized the RESTRICT act, saying “the Biden Administration does not need additional authority from Congress to address national security concerns about TikTok: it can approve the deal negotiated with (the Biden administration) over two years that it has spent the last six months reviewing.”

TikTok chief executive officer, Shou Zi Chew, will testify Thursday before the House Energy and Commerce Committee and face tough questions from those lawmakers who want to ban the app.

TikTok, which FBI director Christopher Wray said in November could be used to “control software on millions of devices,” has been in the crosshairs of the US government for years, since powerful Republican Senator Marco Rubio called for its review in 2019.

Courts struck down former President Donald Trump’s bid to block TikTok in 2020 with an executive order that granted the Commerce Department similar authorities as the RESTRICT act.

In that instance, the executive order relied on by Mr. Trump had a major hurdle: it derived its power from the International Emergency Economic Powers Act, which carves out the import or export of “informational materials,” and “personal communication” through the Berman amendment, which sought to protect speech.

Meanwhile, a move by the Committee on Foreign Investment in the United States (CFIUS), a powerful body that scrutinizes foreign investments for national security risks, to force Bytedance to divest its US TikTok business remains mired in negotiations two and a half years later.

White House national security adviser Jake Sullivan endorsed the RESTRICT Act on March 7 saying it “would strengthen our ability to address discrete risks posed by individual transactions, and systemic risks posed by certain classes of transactions involving countries of concern in sensitive technology sectors.”

But the bill will likely provide no immediate solutions for those calling for a ban on the app. While the legislation enjoys bipartisan support, no companion bill has yet been introduced in the House. It’s also not yet clear when Congress might take it up — and some think it might be attached to a year-end defense measure. Some experts said using the new legal tools to ban TikTok could still invite First Amendment challenges.

“Realistically, I don’t see this tool coming into play until 2024,” said CFIUS lawyer Nicholas Klein with DLA Piper. “And there will most likely be a legal challenge if its used to ban TikTok.” — Reuters

SANOFI’s asthma and eczema drug Dupixent met all targets in a trial to treat “smoker’s lung,” giving a major boost to the French drugmaker’s growth prospects, but also underscoring a heavy reliance on its bestseller.

In a late stage trial Dupixent, jointly developed with Regeneron, led to a 30% reduction in moderate or severe acute exacerbations of chronic obstructive pulmonary disease (COPD), a potentially deadly disease marked by progressive lung function decline.

Sanofi and partner Regeneron said in a statement on Thursday that the Phase 3 trial with 939 current or former smokers as participants also showed improvements in lung function, quality of life and COPD respiratory symptoms.

Sanofi previously forecast that Dupixent would generate up to 13 billion euros ($14.2 billion) in sales in its best year as it seeks to widen its use across several inflammatory conditions.

Investors had expected even more on average, partly on hopes that the injection will also qualify as a COPD treatment, a common disease that the company has so far excluded from its sales target.

Sanofi did not provide an immediate update on its estimate.

“The safety results were generally consistent with the known safety profile of Dupixent in its approved indications,” the companies said, adding that full efficacy and safety results would be presented later.

Overall rates of adverse events were 77% for Dupixent and 76% for placebo.

The companies on Tuesday announced that the European Commission (EC) had approved Dupixent in the European Union to treat severe atopic dermatitis in children aged 6 months to 5 years old who are candidates for systemic therapy.

Dupixent was also approved by the EC to treat eosinophilic esophagitis, which is a condition that damages the esophagus, in January. — Reuters

BEIJING — China’s military said on Thursday it had monitored and driven away a US destroyer that illegally entered waters around the Paracel Islands in the South China Sea.

In a statement, the military said that the guided-missile destroyer USS Milius intruded into China’s territorial waters, undermining peace and stability in the busy waterway.

“The theater forces will maintain a high state of alert at all times and take all necessary measures to resolutely safeguard national sovereignty and security and peace and stability in the South China Sea,” said Tian Junli, a spokesman for China’s Southern Theater Command.

The US Navy on Thursday disputed the Chinese military statement, saying the destroyer is conducting “routine operations” in the South China Sea and was not expelled.

“The United States will continue to fly, sail, and operate wherever international law allows,” a statement from the US Navy 7th Fleet said.

Tension between the United States and China has been growing in the area.

The United States has been shoring up alliances in the Asia-Pacific seeking to counter China’s assertiveness in the South China Sea and the Taiwan Strait, as Beijing seeks to advance its territorial claims. — Reuters

UNITED NATIONS — The United Nations (UN) used its first conference on water security in almost half a century on Wednesday to exhort governments to better manage one of humanity’s shared resources.

A quarter of the world’s population relies on unsafe drinking water while half lacks basic sanitation, the UN said. Meanwhile, nearly three quarters of recent disasters have been related to water.

“We are draining humanity’s lifeblood through vampiric overconsumption and unsustainable use, and evaporating it through global heating,” said U.N. Secretary General Antonio Guterres.

Ensuring access to clean drinking water and sanitation is part of the 17-point to-do list the UN has set for sustainable development, alongside ending hunger and poverty, achieving gender equality, and taking action on climate change.

The three-day conference beginning on Wednesday in New York is not intended to produce the kind of binding accord that emerged from climate meetings in Paris in 2015, or a framework like the one set for nature protection in Montreal in 2022.

Instead, the aim is for a “Water Action Agenda” that will contain voluntary commitments and create “political momentum”.

The United States said it would invest $49 billion in water and sanitation at home and around the world.

US Ambassador to the UN Linda Thomas-Greenfield said this money would “help create jobs, prevent conflicts, safeguard public health, reduce the risk of famine and hunger, and enable us to respond to climate change and natural disasters”. She gave no timeline for the investments or details on how much money would be spent where.

Hundreds of action plans were sent to the UN before the conference started, but the World Resources Institute research group said that while “some commitments offer inspiration, more of them miss the mark,” variously lacking funding or performance targets, or neglecting to address climate change.

WRI singled out two projects for praise: one to spend $21.2 million through 2029 on “climate-smart” agriculture and wetland restoration in the desertifying Niger River basin, and another from 1,729 companies that calculate they can make water-related investments worth $436 billion.

Scientists, economists and policy experts grouped together by the government of the Netherlands in the Global Commission on the Economics of Water recommended phasing out some $700 billion in agricultural and water subsidies and facilitating partnerships between development finance institutions and private investors to improve water systems. — Reuters

ChatGPT-owner OpenAI said on Wednesday it had fixed a bug that caused a “significant issue” of a small set of users being able to see the titles of others’ conversation history with the viral chatbot.

As a result of the fix, users will not be able to access their chat history between 1 am PDT (8 am GMT) and 10 am PDT on March 20, Chief Executive Sam Altman said in a tweet.

ChatGPT has seen a meteoric growth rate after its launch late last year as people worldwide got creative with prompts that the conversational chatbot uses to create everything from poems and novels to jokes and film scripts.

Last week, Microsoft Corp-backed MSFT.O OpenAI launched its artificial intelligence model GPT-4, an upgrade from GPT-3.5, which was made available to users through ChatGPT on Nov. 30.

The integration of OpenAI’s GPT technology into Microsoft’s Bing has driven people to the little-used search engine, according to data from analytics firm Similarweb. — Reuters

Bankrupt crypto exchange FTX has reached a deal to recover more than $400 million in cash from hedge fund Modulo Capital, pulling back 97% of the money that FTX companies sent to the hedge fund in 2022, according to court documents filed on Wednesday.

Bahamas-based Modulo agreed to pay $404 million in cash and give up its claim to $56 million in assets held on FTX’s crypto exchange, according to a filing in U.S. bankruptcy court in Delaware.

FTX filed for bankruptcy protection in November, saying it was unable to completely repay customers who had deposited funds on its exchange. FTX’s new CEO, John Ray, has said his top priority was recovering assets to repay FTX customers.

FTX’s affiliated hedge fund Alameda Research sent $475 million to Modulo in a series of transfers beginning in May 2022, a time when FTX was losing money and heading toward bankruptcy, according to the court filings.

FTX and Alameda will give up their claim to any ownership of Modulo as part of the settlement. FTX also agreed to not take further actions against Modulo or its principals Xiaoyun Zhang and Duncan Rheingans-Yoo related to the 2022 payments, according to the filings.

FTX, Bankman-Fried, and Modulo Capital did not immediately respond to requests for comment.

FTX has previously recovered more than $5 billion in its quest to repay customers of the bankrupt crypto exchange. FTX said last week that it was investigating more than $3.2 billion that was transferred out of the company through payments and loans to company founders and key employees.

Bankman-Fried has been charged with stealing billions of dollars in FTX customer funds to cover losses at Alameda Research, and making tens of millions of dollars in illegal political donations to buy influence in Washington, D.C.

He denies wrongdoing and is fighting to stay out of jail pending his scheduled Oct. 2 fraud trial. — Reuters

The Federal Reserve on Wednesday raised interest rates by a quarter of a percentage point, but indicated it was on the verge of pausing further increases in borrowing costs after the recent collapse of two U.S. banks.

Fed Chair Jerome Powell sought to reassure investors about the soundness of the banking system, saying that the management of Silicon Valley Bank “failed badly,” but that the bank’s collapse did not indicate wider weaknesses in the banking system.

“These are not weaknesses that are running broadly through the banking system,” he said, adding that the takeover of Credit Suisse seemed to have been a positive outcome.

The Federal Open Market Committee policy statement also said the U.S. banking system is “sound and resilient.”

Even so, Wall Street ended sharply lower after Powell told a news conference that officials were still intent on fighting inflation while also eying the extent to which recent bank failures had cooled demand and slowed lending.

The much-anticipated rate hike by the Fed, which had delivered eight previous rate hikes in the past year, sought to balance the risk of rampant inflation with the threat of instability in the banking system.

But in a key shift driven by the sudden failures this month of Silicon Valley Bank (SVB) and Signature Bank, the Fed’s latest policy statement no longer says that “ongoing increases” in rates will likely be appropriate.

The banking sector has been in turmoil after California regulators on March 10 closed Silicon Valley Bank in the largest U.S. bank failure since the 2008 financial crisis.

The collapse of the Santa Clara, California-based bank and Signature Bank, another U.S. midsized lender, prompted a rout in banking stocks as investors worried about other ticking bombs in the banking system and led to UBS Group AG’s takeover of 167-year-old Credit Suisse Group AG to avert a wider crisis.

The Fed’s relentless rate hikes to rein in inflation are among factors blamed for the biggest banking sector meltdown since the 2008 financial crisis.

“The Fed is now living on a hope and a prayer that they haven’t done irreparable harm to the banking system,” said Brian Jacobsen, senior investment strategist at Allspring Global Investments in Menomonee Falls, Wisconsin. “The Fed is probably thinking financial stresses are substituting for future rate increases.”

Meanwhile, as beleaguered First Republic Bank considers its options, Treasury Secretary Janet Yellen said on Wednesday there is no discussion on insurance for all deposits.

She told a congressional hearing that the government “is not considering insuring all uninsured bank deposits.” She also said the Treasury Department has not considered anything to do with guarantees for assets. First Republic shares closed down more than 15%.

As officials grapple with restoring confidence in the banking system, JPMorgan Chase & Co CEO Jamie Dimon is scheduled to meet with Lael Brainard, the director of the White House’s National Economic Council, during the executive’s planned trip to Washington, according to a person familiar with the situation.

BANK SUPERVISION

The latest move to restore calm to restive regional bank stocks came as Pacific Western Bank, one of the regional lenders caught up in the market volatility, said it had raised $1.4 billion from investment firm Atlas SP Partners.

Shares of the bank closed down 17% even as it tried to assuage investor worries by saying it had more than $11.4 billion in cash as of March 20.

But less than two weeks after Silicon Valley Bank sank under the weight of bond-related losses due to surging interest rates, the CEO of hedge fund Man Group EMG.L, Luke Ellis, said the turmoil was not over and predicted further bank failures.

Policymakers from Washington to Tokyo have stressed the turmoil is different from the crisis 15 years ago, saying banks are better capitalised and funds more easily available.

SVB’s collapse kicked off a tumultuous 10 days for banks which led to the 3 billion Swiss franc ($3.2 billion) weekend takeover of Credit Suisse by rival UBS.

In further fallout, a conservative Republican and a progressive Democrat in the U.S. Senate are introducing legislation to replace the Fed’s internal watchdog with one appointed by the president, aiming to tighten bank supervision following the failures of SVB and Signature Bank.

Republican Rick Scott and Democrat Elizabeth Warren blamed the collapse of the two banks on regulatory failures at the U.S. central bank, which has operated up to now with an internal inspector general who reports to the Fed board.

The Fed was not immediately available for comment.

The Federal Deposit Insurance Corporation (FDIC) has moved the bid deadline for Silicon Valley Private Bank to Friday from Wednesday, a source familiar with the matter said on Wednesday. Earlier this week, the FDIC decided to break up Silicon Valley Bank and hold two separate auctions for its traditional deposits unit and its private bank after failing to find a buyer for the failed lender last week. — Reuters

PARIS — French President Emmanuel Macron is looking to regain the initiative with new reforms in the coming weeks after his government barely survived a no-confidence motion over an unpopular pension bill and nationwide protests continued.

As labor unions prepared another day of strikes and demonstrations against Macron’s pension reform on Thursday, protesters waving flags and chanting gathered in central Paris on Tuesday evening, marking the sixth consecutive day of protests since the passing of the bill.

Garbage bins were set ablaze around 2030 CET/1930 GMT in the Place de la Republique in central Paris, and protesters set off fireworks. Fire engines arrived to put out the fires and the police charged to disperse demonstrators.

Some in Macron’s own camp have warned him against continuing business as usual amid violent protests and rolling strikes that represent the most serious challenge to the centrist president’s authority since the “Yellow Vest” revolt four years ago.

“We are all weakened. The president, the government and the majority,” a senior MP in Macron’s camp, Gilles Le Gendre, told Liberation newspaper. “It’s not because the law was adopted that we can do business as usual.”

Another MP in Macron’s camp, Patrick Vignal, bluntly urged the president to suspend the pension reform bill, which will raise the retirement age by two years to 64, given the anger it has triggered, and its deep unpopularity.

But Macron does not plan any reshuffle, snap elections or major changes of any sort and has ruled out withdrawing the pension law, a source who took part in meetings between Macron and key allies on Tuesday told Reuters.

He will instead try to use a TV interview on Wednesday to “calm things down” and will plan reforms for the rest of his mandate, the source said.

NO U-TURN
Speaking to parliament, Prime Minister Elisabeth Borne and Labour Minister Olivier Dussopt also made clear the government would not change tack.

While Borne said the administration would try in future to better involve citizens and unions in lawmaking, she gave no specifics, and both said they had devoted as much time to dialogue on the pension bill as possible.

“What we expect from the President of the Republic is that he draws up an outlook … a three-, six-month calendar (of reforms),” Sacha Houlie, an MP in Macron’s camp, told Reuters, saying he hoped for proposals on issues including how businesses could be pushed to share more of their profits with workers.

Socialist Party chief Oliver Faure told the government it was “playing with fire.”

Other opposition MPs urged Macron to fire Borne, call snap elections and hold a referendum on the pension bill because of the widespread anger.

Meanwhile, the left-wing NUPES coalition and the far-right Rassemblement National have requested the Constitutional Council to judge whether the reform and the way it was adopted violate the constitution.

Polls show a wide majority of French are opposed to the pension reform, as well as the government’s decision to push the bill through parliament without a vote.

“I think this was a denial of democracy. The government passed a law which a majority of French people were against,” script writer Jean Regnaud said. — Reuters