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Barclays CEO Jes Staley has ‘no plans to leave’ despite whistleblower investigation

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“The investigation has been going on for a year and during that course of time I have been focused on running Barclays, I think we’ve made great progress and I look forward to running Barclays for a number of years to come,” Staley told CNBC Thursday morning.

When asked if the investigation has distracted them, Staley said: “No I’m very focused on the business. We’ve got great colleagues here, the bank has got great momentum, I have a lot of respect for the regulators and I will let them do their job.”

The British bank reported Thursday a loss on its full-year 2017 profits, due in part to the tax overhaul in the U.S. and a weaker dollar. However, the bank said it cannot yet estimate the impact of the FCA investigation into it financial results.

In 2017, Staley apologized to the Barclays board, and accepted its conclusion that his personal actions in the matter were errors on his part.

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Nikola founder Trevor Milton pleads not guilty to fraud charges

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Trevor Milton, founder of Nikola Corp., exits federal court in New York, U.S., on Thursday, July 29, 2021.

Angus Mordant | Bloomberg | Getty Images

Nikola founder Trevor Milton pled not guilty to fraud charges in a Manhattan courtroom Thursday afternoon after federal prosecutors accused him of misleading investors about the capabilities and technologies of the electric vehicle start-up.

Miton, who resigned as chairman in September, was freed on a $100 million bond secured against two of his Utah properties valued at $40 million. He is barred from contacting investors and was issued travel restrictions by the court. It was his first major appearance since resigning from the company and deleting his social media accounts.

A federal grand jury charged Milton with three counts of criminal fraud for lying about “nearly all aspects of the business” to bolster stock sales of the electric vehicle start-up, according to an indictment unsealed Thursday.

Milton’s lawyers vehemently defended his innocence.

His legal team, led by Brad Bondi, said Milton was “wrongfully accused following a faulty and incompetent investigation,” and that justice won’t be served until he’s exonerated, according to an emailed statement sent Thursday.

Read the full statement from Milton’s legal team:

Trevor Milton is innocent; this is a new low in the government’s efforts to criminalize lawful business conduct. Every executive in America should be horrified.

Trevor Milton is an entrepreneur who had a long-term vision of helping the environment by cutting carbon emissions in the trucking industry. 

Mr. Milton has been wrongfully accused following a faulty and incomplete investigation in which the government ignored critical evidence and failed to interview important witnesses. 

From the beginning, this has been an investigation in search of a crime. Justice was not served by the government’s action today, but it will be when Mr. Milton is exonerated. 

The grand jury said Milton should forfeit all property “traceable to the commission of said offenses,” which would likely include the more than $1 billion he earned when Nikola went public in June 2020.

Shares of Nikola were down by as much as 11% during early trading Thursday. The stock was trading at $12.73 a share, down by 10.3% as of midafternoon.

The Securities and Exchange Commission also filed civil securities fraud charges against Milton on Thursday. The SEC asked the U.S. District Court of the Southern District of New York to permanently bar him from acting as an officer at a company that issues securities, to disgorge all ill-gotten gains and pay a fine.

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The U.S. economy is bigger than it was pre-pandemic, but Covid could still decide what happens next

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A worker hoists a flight chain at the Calder Brothers’ facility in Taylors, South Carolina, U.S., July 19, 2021.

Brandon Granger | Calder Brothers Corporation | Reuters

The U.S. economy is now larger than it was before the pandemic, but its growth rate may have peaked this year at a much slower pace than expected.

That doesn’t mean the second half of the year won’t be strong or the recovery will be derailed. The question is how strong growth can be, with a number of factors that can impact it, including the delta variant of the coronavirus.

Gross domestic product accelerated at a 6.5% annualized rate in the second quarter, slightly better than the revised 6.3% gain in the first quarter. But it was well below the 8.4% expected by economists, and far less than their earlier forecasts that growth in this year’s peak quarter would be 10% or higher.

GDP is the measure of all goods and services produced in the April to June period. According to the Commerce Department, the quarterly GDP level rose to $19.4 trillion in the second quarter, higher than the $19.2 trillion in the fourth quarter of 2019.

“We’ve noted that the Q2 GDP growth pace is a good gauge of the ‘speed limit’ for the economy, given widespread supply chain disruptions. That speed limit is a bit lower than we thought, and quite a bit lower than most forecasters and government institutions were expecting,” wrote Mike Englund, chief economist at Action Economics. “If shortages continue, the likelihood is that the more optimistic forecasts in the marketplace will need to be marked-down for Q3 as well.”

Englund said he will adjust his forecast for the second half, but now sees 2021 GDP growing by 6.1% year-over-year and 6.2% fourth quarter over fourth quarter. He said the Fed’s central tendency forecast is much higher, at 6.8% to 7.3%.

The pace of growth in the second quarter was the fastest since the third quarter of last year, when the economy bounced back 33.4% after the stunning collapse in the second quarter. Aside from that, it was the best growth rate since 2003.

Economists were surprised by some elements of the second-quarter report. Inventories remained a drag, while many expected businesses would begin rebuilding them. Government spending was also a negative, as were some construction categories.

“Everything that was expected to be weak came in a little weaker. There were more weak surprises than strong surprises,” said Tom Simons, money market economist at Jefferies. “At this point, we’re really in no-man’s land on the current economic data coming in. It keeps coming in softer than expected, but not at outright soft levels. I think we’re going to keep at incoming data to figure out what’s happening in Q3.”

The consumer was the bright spot, with consumption topping expectations. Consumption rose 11.8% over the first quarter, with 12% growth in services. Consumers are about 70% of all activity.

Several factors holding back growth

Worries rise over the virus

But the resurgence in Covid looms large over the outlook.

Tilley said that if the delta variant becomes a factor in slowing growth this year, the economic activity will spread out into next year. But should the economy slow because consumers have spent their savings or change spending habits on services, that would lead to a more negative outlook for the economy.

He pointed out the way that businesses are responding to the pandemic is shaping spending. For instance, spending on structures was down but intellectual property and equipment were higher.

“I worry more that we’re moving into a world where, yes, technology enables us to keep spending regardless of what happens with Covid. That keeps the overall economy going but it means also you could permanently eliminate some jobs more rapidly,” said Diane Swonk, chief economist at Grant Thornton.

Swonk said a bigger Covid outbreak could trigger behavior from consumers that could impact spending and slow growth.

“I would expect people could delay and defer which will elongate the recovery,” she said. “Disruptions that were once outliers and now normal.”

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Israel to give Pfizer Covid booster shots to elderly

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A man receives his third dose of COVID19 vaccine at Sheba Medical Center on July 14, 2021 in Ramat Gan, Israel.

Amir Levy | Getty Images

Israeli health officials plan to offer booster shots of the PfizerBioNTech Covid-19 vaccine to people over age 60 as the shot’s effectiveness appears to wane as the delta variant spreads across the world, NBC News confirmed Thursday.

The heads of health maintenance organizations that have been administering the Pfizer vaccine will begin administering third shots Sunday, according to NBC News. The booster shots are available for patients above 60 who have already received their second shot at least five months earlier.

The country’s Health Ministry reported last week that the two-dose vaccine is now just 39% effective in Israel where the highly transmissible delta variant is the dominant strain. The shot still works very well in preventing people from getting seriously sick, Israeli officials said, demonstrating 88% effectiveness against hospitalization and 91% effectiveness against severe illness.

The data out of Israel, which began vaccinating its population ahead of many other countries, is bolstering arguments from drugmakers that people will eventually need to get booster shots to protect against emerging variants.

Pfizer CEO Albert Bourla on Wednesday doubled down on his comments that people will need a third dose of the vaccine to maintain its high level of protection against the virus. The U.S. drugmaker published new data Wednesday from a company-funded study that showed the vaccine’s efficacy dropped to about 84% after four to six months.

“We have seen also data from Israel that there is a waning of immunity and that starts impacting what used to be what was 100% against hospitalization. Now, after the six-month period, is becoming low 90s and mid-to-high 80s,” Bourla said on CNBC’s “The Exchange.”

The Centers for Disease Control and Prevention, the Food and Drug Administration and the World Health Organization have said they don’t recommend Covid booster shots at this time, citing a lack of data. U.S. and world health officials have said they are looking at the Israeli research, which was not peer-reviewed and was scant on details.

“We have to be mindful that, with time, the effectiveness of these vaccines may wane,” Dr. Isaac Bogoch, an infectious disease professor at the University of Toronto, said in a recent interview.

He stressed that the shots still appear to be highly effective in preventing severe infection, helping hospital systems not get too overwhelmed heading into the colder months. That being said, “we’re still in the Covid era and anything can happen,” he said.

“We have to be prepared and we have to be nimble that people may need a booster at some point,” he added. “This close surveillance that’s happening in countries like Israel, the U.K. and other parts of the world is going to be very helpful in driving policy if and when we do need boosters.

Israel’s plans to boost its population come two days after the CDC reversed course on its prior guidance and recommended fully vaccinated Americans who live in areas with high Covid infection rates begin to wear face masks indoors again. The guidelines cover about two-thirds of the U.S. population, according to a CNBC analysis.

While the delta variant is hitting unvaccinated people the hardest, some vaccinated people could be carrying higher levels of the virus than previously understood and are potentially transmitting it to others, CDC Director Dr. Rochelle Walensky said Tuesday.

Walensky added new data shows the variant behaves “uniquely differently from past strains of the virus,” indicating that some vaccinated people infected with the delta variant “may be contagious and spread the virus to others.”

“This pandemic continues to pose a serious threat to the health of all Americans,” Walensky told reporters on a call. “Today, we have new science related to the delta variant that requires us to update the guidance regarding what you can do when you are fully vaccinated.”

– CNBC’s Kevin Stankiewicz contributed to this report.

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