In Brief: What the US Dollar is Up To

The dollar jumped against a slew of currencies that measure its broader strength earlier this month.  A four month peak was reached against the yen on the back of the numbers at the beginning of the month’s 25 basis-point rise in 10 year US government bond yields.  According to co-head of Millennium Global, Richard Benson: “The real story at the moment is the rise in U.S. real yields.  That does look like being the theme for the moment. Dollar yen is properly supported, and I don’t think there is even that much participation yet (in that trade).”

It has also been speculated that the US dollar could advance against the pound, following the Fed’s Labour Market Conditions Report, expecting to indicate an enhancement of market conditions that may spark some appreciation in the US dollar.

Other impacts on markets at the moment are central bank events, with anticipated raised interest rates imposed from the Bank of Canada and data indicates the economy in Britain looks gloomy suggesting an interest rate hike there later this year.

New York Businesses

Atena (a diversified healthcare company) is to move into New York in the near future.  Rejecting Boston in favor of the Big Apple, in 2018 the company will be making NYC’s 61 Ninth Avenue its new home, relocating 250 employees.  In addition, innovators from the area’s “deep talent pool,” will, according to Mark T. Bertolini, company Chair and CEO, provide for “an invaluable resource as we consider additional investments in the city going forward.”

This will be a fiscally beneficial move since the office of the New York Mayor has stated the company will receive tax breaks worth $24 million from the state over the next 10 years, facilitating the building of its new headquarters in the region.

Atena is not alone in large companies showing their favoritism to New York. Sportswear giant Nike also showed its adoration with its #NewYorkMade campaign, featuring a slew of community collaborations and interventions around NYC.

Increasing Diversity in New York’s Media Industry

In an effort to increase the diversity among those working in the media industry (specifically in TV – writing or directing), a bill was passed in the New York State Senate and Assembly which established a $5 million incentive program to be allocated to salaries of those who are female or come from another minority group.   This is in addition to New York state’s $420 million film and TV production tax credit.

The reasoning behind the bill was because it was found that those being hired in the industry were often passing over others just because they knew someone in the industry, leaving talented individuals without the job they deserve.  As Eastern DGA Executive Director Neil Dudich pointed out, “For years the DGA has pushed the industry to change their imbalanced hiring practices so that talent, and talent alone, is the defining factor. By encouraging studios, networks and producers to discover the talented New York TV directors and writers that are out there in abundance, this bill can be a meaningful step forward in establishing a level playing field for all.”

The way this will work in practice (if it gets Governor Cuomo’s support and becomes law) is that 30% of the salaries of female and minority writers and directors would have the opportunity to earn a tax credit, with caps of $50,000 per episode and $150,000 for a show’s entire season.

NY: Federal Reserve News

Herewith some of the latest news blurbs connected to New York’s Federal Reserve.

  1. A recent report from the NY Federal Reserve indicated that expectations of consumer inflation had actually gone down. For the numbers for 2020, the expectations hit their lowest point since January 2016.
  2. On June 19, William Dudley, President of the NY Federal Reserve Bank, participated in a roundtable breakfast meeting in Plattsburgh with local business leaders.
  3. Dudley also met with military installation leaders and Watertown Chamber of Commerce members.
  4. Meanwhile, Charles Evans, Chicago Federal Reserve Bank President, addressed the Money Marketeers of New York University about economic conditions and monetary policy.

Meanwhile, in some good news for the economy it was reported by government that unemployment hit its lowest figure in 16 years, dropping to 4.3 percent.

Summertime Changes in New York

When the weather starts heating up and the summer months arrive, how does this impact small business owners?  What kind of changes – if any – do businesses implement in the New York area come June?

The feeling is most notably there at Gregorys Coffee.  Owner of the New York coffee place Gregory Zamfotis speaks about the difference in purchase choices between the seasons.  He explained that in the beginning of May he starts to follow the weather forecast and thereafter email his store leaders. Why?  Because according to Zamfotis’ estimation, most of the year, the coffee sold is split 75 percent (hot) and 25 percent (iced).  Come iced-coffee season, the numbers almost completely do a 180 with 65 percent (iced) and 35 percent (hot); changed which can occur literally overnight.  As he explains: “You don’t want to get caught and run out by 9 a.m.,” which is a real possibility since they only use cold-brewed coffee to make their iced coffee – a process which takes 12 hours.  With this “smooth, round and lush” drink that is the result of this long-process, at the peak of the season, Zamfotis believes he sells around 10,000 servings daily!  And there is no way to rush the cold brew process so anticipation of weather changes is crucial.

Penn Station commuters might not be thrilled about the upcoming summer months due to the recent announcement by Amtrak of its summertime service changes (read: reductions) for extensive repairs following the report of derailments and other delays.  It is anticipated that three out of the station’s 21 tracks will be closed (alternately) for around seven weeks come  July. The work was ordered after two recent derailments and numerous other delays. It’ll be the New York commuters most impacted due to the reduction in service between NY/Washington, D.C., (Northeast Regional line) and commuters using the New York/Harrisburg, PA (Keystone service). These will impact commuters from July 10 to September 1, 2017.

In conjunction with IMPACT Melanoma and Bright Guard, NYC Parks is installing 100 sunscreen dispensers in the parks.  As a protective measure, this pilot program will enable sun lovers to protect themselves from the sun’s rays with each dispenser holding 1,000 liters of SPF 30 sunscreen.  Beaches in Brooklyn, the Bronx, Queens and Staten Island have already received such dispensers.  As IMPACT Melanoma Executive Director Deb Girard said:  “We are thrilled to expand on our highly successful program across the country and continue to offer sunscreen units for public and private distribution throughout the country, NYC is an exciting place for us to bring sunscreen.  We hope sunscreen dispensers will become as commonplace as hand sanitizers over the next few years.”

Recent New York Business Acquisitions

There have been a few interesting business acquisitions (both large corporations and SMEs) in the New York area recently.  Here are three recent examples: Castle Harlan Inc., Verizon Communications and Ascott Residence Trust.

First, in the hedge fund industry, Gold Star Foods (a portfolio company of the NY private equity firm Castle Harlan, Inc.), just acquired A&R Wholesale Distributors. Since its been with Castle Harlan, Gold Star has made two other acquisitions.  The company facilitates how states and local school districts nationwide can comply with complex state and federal regulations covering government funding and nutritional content requirements for school meal programs.

Second, two days ago, in the telecommunications industry, Verizon Communications officially acquired Yahoo! for a $4.5 billion price tag.  This will impact the entire nature of the firm which will be rebranded into Oath – a new subsidiary led by Tim Armstrong, current CEO of AOL.  Armstrong’s public statement included the following:

“We’re building the future of brands using powerful technology, trusted content and differentiated data. Now that the deal is closed, we are excited to set our focus on being the best company for consumer media, and the best partner to our advertising, content and publisher partners.”

Third, in the hospitality industry, Ascott Residence Trust (Ascott Reit) is in the process of purchasing DoubleTree – a luxurious Manhattan hotel near Times Square for $106 million.  If this goes through, this will give Ascott Residence Trust 1,004 hotel rooms spanning three properties (having made two other hotel purchases in the last two years – Sheraton Tribeca New York and the Element New York Times Square West). Other interesting numbers on this are that once completed, 12.3 percent of Ascott Reit’s total asset will be US based, its fourth largest (Singapore, Japan and China taking the first three spots).

The next steps forward for Gold Star Foods, Verizon Communications and Ascott Residence Trust will be interesting to see.

Day for Students

Two days ago New York college students were given the opportunity to apply for the state’s free tuition plan.  With the Excelsior Scholarship (approved by the New York State Higher Education Services Corporation Board of Trustees), this initiative was developed by Gov. Andrew Cuomo.

So who is eligible?  Full-time (in state) students whose family-earnings are $125,000 or less.  They will have their tuition completely covered at state universities.  This will mean that they will just be left paying for room, board and other expenses. Another condition of the scholarship is for students to live in New York for as many years as they received the benefit thereafter.

Should they renege on that, they would have to repay the scholarship from the city in which they are working. The only recipients who would not be expected to do so would be those in “cases of extreme hardship” or military service members and students with a disability.

Recipients also must remain in New York for as many years as they received the benefit and repay the money as a loan if they take a job elsewhere.

NYC: Ethics and Employment

In a move to benefit the interviewee, Mayor de Blasio is legalizing some changes in questions potential employers are permitted to ask. One of these is salary history.  The Mayor just signed a Bill which, when passed in October will make it “unlawful” to request details of a job applicant’s current salary.

De Blasio is very focused on promoting anti-discriminatory practice in the work place. Just recently NYC’s Ethics Panel fired three city workers for inappropriate use of their jobs for personal gains.  The perpetrators were fined for basing hiring and promotions on familial choice.  One of these workers was an Administration for Children’s Services for use of her job title for the benefit of “an associated family member’s family court case.”

In addition, the head of NYC’s jail system, Joseph Ponte just resigned his position, following criticism for use of his city-owned SUV to repeatedly drive to vacations in Maine.

Clive Holmes Silverfern: Latest Investment

The Silverfern Group, with Co-Managing Partner Clive Holmes has made a recent investment, which is their fifth portfolio follow-up investment in the last 18 months.

They have completed a follow-up into the Silverfern portfolio company Broad River Power Holdings. Broad River Power Holdings is a 5×0 Simple Cycle Generating Facility that produces electricity as part of its long-term tolling agreement with Gaffney, South Carolina. The units are able to be on the grid and they can help to supply power within 15 minutes during peak times or during emergencies.

As Silverfern’s Clive Holmes explained, “The opportunity to expand our investment in Broad River in partnership with Arroyo further demonstrates that by partnering with lead investors with deep industry and local knowledge, we can identify and access value where other investors may not be able to do so. Capturing this value on investment allows Silverfern to potentially deliver a higher return to our investors than might otherwise be commensurate with the risk underwritten in an infrastructure investment such as Broad River.”

When describing Broad River, Silverfern Managing Director Brooks Klimley said, “Broad River is a modern, efficient facility that is playing an increasingly important role in the provision of clean, reliable electricity to consumers in North and South Carolina.”