Bloomberg - Evening Briefing - Fear of contagion

The troubles plaguing the US commercial property market moved to Europe this week, elevating fears of broader contagion. The latest victim was Germany’s Deutsche Pfandbriefbank, which saw its bonds slump on concern about its exposure to the sector and described the current turmoil as the “greatest real estate crisis since the financial crisis.” The plunge in German lenders’ bonds is the latest in a series of warning signals as loans begin to sour after rising interest rates eroded the value of buildings around the world. On Tuesday, US Treasury Secretary Janet Yellen said losses in commercial real estate will put stress on owners, but added that the problem is manageable. For offices in the US, where the return to work following the pandemic has been slower than elsewhere, the value destruction has been particularly bad. Embattled New York Community Bancorp was cut to junk by Moody’s Investors Service after flagging real estate problems while Japan’s Aozora Bank recorded its first loss in 15 years due to provisions on loans extended to US commercial properties. And some predict the full impact of the growing crisis might not be fully priced in. —David E. Rovella

Still, the historic rally in US stocks continued to power ahead. The S&P 500 closed within a striking distance of its 5,000 milestone. Gains on Wednesday were fueled by a renewed surge in big tech and a strong sale of 10-year Treasuries. While bonds barely budged, equities extended their bull run on prospects that a solid economy will continue fueling corporate profits. Here’s your markets wrap.

When the US punished Morgan Stanley for leaking upcoming stock trades to favored clients, it kept the list of recipients secret. It turns out they included one of Wall Street’s biggest players—Citadel. A trader at Ken Griffin’s giant hedge fund was said to be among a group of executives described anonymously in Morgan Stanley’s settlements with the government. Beyond Citadel, recipients of stock tips described in legal documents are said to include people at block-trading specialist CaaS Capital Management, Segantii Capital Management and Evolution Capital Management.

Ken Griffin Photographer: Patrick T. Fallon/AFP

China replaced the head of its securities regulator, a surprise move that may foreshadow more forceful measures by Xi Jinping’s government to end the rout in the country’s $8 trillion stock market. Wu Qing, a banking and regulation veteran who earned the reputation as “the broker butcher” when he led a crackdown on traders in the mid-2000s, is replacing Yi Huiman as chairman and party chief of the China Securities Regulatory Commission. The shift comes after Chinese authorities struggled to halt a selloff with piecemeal support measures. About $5 trillion of market value had been wiped out from onshore equities from their peak in 2021.

The US Federal Trade Commission slammed Microsoft and its plans to fire 1,900 employees from its video game division, saying the mass dismissal contradicts statements the company made to a federal court about how it would operate the newly acquired Activision Blizzard. “The reported elimination of thousands of jobs undermines the FTC’s ability to order effective relief” should a court later find Microsoft’s acquisition violates the law.

Turkish central bankers long played to an audience of one. When it came to Hafize Gaye Erkan, Recep Tayyip Erdogan’s trust hardly wavered until the very end. But by then, what proved her undoing was that she’d lost the confidence of other heavyweights who were on a mission to give the nearly $1.1 trillion economy a facelift. For her critics inside the central bank and in Turkey’s corridors of power, the end to Erkan’s almost eight months at the helm was the culmination of her clashes with staff and ultimately a power play that misfired.  

Hafize Gaye Erkan Photographer: Adem Altan/AFP/Getty Images

Senegal is teetering on the brink of crisis after lawmakers voted to delay elections and extend the final term of President Macky Sall by nearly a year—a move opponents characterized as a “constitutional coup.” In a region that has seen seven military takeovers and at least four attempts by security forces to oust civilian leaders in the past three years, the events of this week have cast a pall over Senegal’s reputation as among the most stable democracies in West Africa.

Biden administration officials plan to meet Arab and Muslim community leaders in Michigan on Thursday as the president faces vocal opposition over his handling of the Israel-Hamas war from Arab and Muslim Americans. Michigan is home to one of the nation’s largest Arab and Muslim populations, and some Democrats have told Biden’s team they’re worried his stance is alienating a key voter group in a state that he won narrowly in 2020 and is expected to be close this year as well.

A rescuer carries an injured Palestinian man after an Israeli airstrike in Deir Al-Balah, southern Gaza Strip, on Feb. 4 Photographer: Ahmad Salem/Bloomberg

• New York Community Bank is in talks to offload mortgage risk.
• Tesla asks which jobs are critical, stoking layoff fears.
• Senate Republicans seal demise of border reform their party sought.
• Bloomberg Opinion: Secondhand EVs start to look like a bargain.
• Two used Rolex models rise in value in a year of falling watch prices.
• Las Vegas is trying to become the sports capital of the world.
• Soho House plunges after s short seller compares it to WeWork.

Carlisle United is hardly the first name that springs to mind when it comes to English football. But for Florida-based businessman Tom Piatak, the soccer club was just what he was looking for as Carlisle United became at least the 34th team in English football to get a US investor. From the Glazer family at Manchester United to Todd Boehly and his Wall Street financiers at Chelsea, the American takeover of clubs in the Premier League isn’t new. Yet below the surface, the US footprint on the English game is deepening.

Carlisle United has only managed to play in the top division of English football for one season. Photographer: George Wood/Getty Images

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