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Kitco daily macro-economic/business digest - May 23

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‘Productive' Debt-limit Talks but No Deal Yet | Talks Halt House Appropriations Action

Colorado River basin states reach agreement on water cutbacks

In Today's Digital Newspaper

Nearly 85% of investors are pricing in a pause in interest rate hikes at the next Federal Reserve meeting June 13-14, according to the CME FedWatch Tool.

Arizona, California and Nevada said they are willing to commit to a $1.2 billion plan to cut back on their use of Colorado River resources, conserving an additional 3 million acre-feet of water through 2026, in exchange for more federal funding, but and future droughts could further deplete the river's supplies. While the plan's adoption is not certain considering a year-long stalemate between the states, U.S. Bureau of Reclamation Commissioner Camille Touton called the effort an "important step forward." See below for details.

Chevron Corp. will acquire Denver-based PDC Energy Inc. in a stock-and-debt deal worth $7.6 billion, adding 10% to the company's proved reserves and 260,000 barrels of oil and gas production per day in the Denver-Julesburg Basin in Colorado.

The House Energy and Commerce Subcommittee on Oversight and Investigations will hold a hearing to discuss the impact of federal programs and policies on the domestic energy sector supply chain.

House leaders are set to vote on legislation tomorrow that would block the Biden administration's student loan relief program and scrap the pause on federal student loan payments and interest. The White House confirmed that if Congress were to pass the bill, the president would veto it.

"A selloff in stock and bond markets may be what's required to get donors and voters to pound on lawmakers' doors to stop the drama and increase the limit." — Mark Zandi, chief economist, Moody's Analytics

TikTok sued Montana to overturn the state's ban on the app. Last week, Montana became the first state to ban TikTok, saying it posed a security risk due to its parent company, ByteDance, being Chinese-owned. "Yet the State cites nothing to support these allegations," lawyers for ByteDance wrote. The lawyers argue that Montana's law is unconstitutional, saying it violates the First Amendment's freedom of speech while also preempting federal law.


Equities today: Asian and European stock markets were mixed to weaker overnight. U.S. Dow opened around 130 points lower. In Asia, Japan -0.4%. Hong Kong -1.3%. China -1.5%. India flat. In Europe, at midday, London +0.3%. Paris -0.8%. Frankfurt -0.1%.

PacWest shares rose 8.5% before the bell, building on a 20% gain Monday. That came after the embattled bank said it would sell a $2.6 billion property-loan portfolio to Kennedy-Wilson Holdings.

Home improvement chain Lowe's lowered its revenue outlook for the year, as lumber prices have fallen, and customers pared back spending on do-it-yourself projects. Lowe's same-store sales for the period ended May 5 fell more than Wall Street expected, and the company lowered its same-store-sales expectations for the year.

Analysts at Bank of America have high hopes for the S&P 500 this year, raising its year-end price target for the index by 8% on the optimism of companies' recent cost-cutting and the AI boom in tech stocks. That would be the S&P's highest level since August, but only 2% higher than where the index landed yesterday.

U.S. equities yesterday: Only the Nasdaq managed to operate in positive territory all day while the S&P 500 edged higher into the close and the Dow was only able to move higher early in the trading day. The Dow finished down 140.05 points, 0.42%, at 33,286.58. The Nasdaq ended up 62.88 points, 0.50%, at 12,720.78. The S&P 500 eked out a gain of 0.65 point, 0.02%, at 4,192.63.

Market quotes of note:

  • Interest rates may have further to go, according to the Federal Reserve's James Bullard and his colleague Neel Kashkari. The former said Monday that he backed two more increases, while his Minneapolis colleague said if the central bank pauses, it should also signal that tightening isn't over. Investors have moved up their bets on a rate hike next month to 30%, from around 22% before the comments from Bullard, a closely watched hawk but without an FOMC vote this year. But, nearly 85% of investors are pricing in a pause in interest rate hikes at the next Federal Reserve meeting, according to the CME FedWatch Tool.

  • Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman issued another warning to oil short-sellers, just over a week before the OPEC+ alliance is due to meet. "I keep advising them that they will be ouching — they did ouch in April," he said.

  • Economists are concerned about the $20 trillion commercial real estate industry and so is JPMorgan Chase CEO Jamie Dimon. The regional banking crisis is having a knock-off effect on commercial real estate lending, Dimon warned at his company's shareholder meeting on Monday. "There's always an off-sides," Dimon said, using Wall Street jargon for an indirect consequence. "The off-sides in this case will probably be real estate. It'll be certain locations, certain office properties, certain construction loans. It could be very isolated; it won't be every bank."

On tap today:

• Federal Reserve Bank of Dallas President Lorie Logan delivers opening remarks at a Fed conference on technology-enabled disruption at 9 a.m. ET.

• S&P Global's U.S. manufacturing index is expected to tick down to a preliminary reading of 50.0 in May from a final reading of 50.2 in April. The services index is forecast to fall to 52.6 from 53.6. (9:45 a.m. ET)

• U.S. new-home sales are expected to fall to an annual pace of 669,000 in April from 683,000 one month earlier. (10 a.m. ET)

• Richmond Fed's manufacturing survey is expected to rise to minus 8 in May from minus 10 one month earlier. (10 a.m. ET)

• Elon Musk kicks off the WSJ CEO Council Summit in London at 2 p.m. ET.

IMF gives U.K. an economic upgrade. The IMF said that Britain would not enter into a recession this year, revising earlier predictions that its economy would shrink by 0.3% in 2023. It now expects GDP to grow by 0.4%. The fund said that resilient demand had bolstered Britain's ailing economy, but warned that the outlook for growth "remains subdued" and that inflation is still "stubbornly high."

Eurozone private sector growth eases. The HCOB Eurozone Composite PMI fell to a three-month low of 53.3 in May from 54.1 in April, and below forecasts of 53.7. Still, the reading pointed to a fifth straight month of expansion in private sector activity, indicating robust but uneven economic growth. The services sector continued to show a strong performance while manufacturing activity contracted the most in three years.

Inflation's cause and cure. For two years debate has raged over what caused the highest inflation since the 1980s: government stimulus or pandemic-related disruptions. Now two of the country's top economists have an answer: It's both. Pandemic-related supply shocks explain why inflation shot up in 2021. An overheated economy generated by fiscal stimulus and low interest rates explain why it's stayed high ever since. The WSJ's Greg Ip digs into new research from Ben Bernanke and Olivier Blanchard, and their conclusion: For inflation to fade, the economy has to cool off, which means a weaker labor market.

The container shipping market has turned from boom to bust with seeming head-spinning speed. Prices have fallen to the point where the big boxship lines are losing money on once-lucrative trans-Pacific routes, the Wall Street Journal reports in an ominous sign for the sector as the shipping industry approaches its peak season. Average daily freight rates from Asia to the U.S. West Coast across the Pacific are at roughly $1,500 per 40-foot container, compared with more than $14,000 a year ago, according to the Freightos Baltic Index. The Asia-to-Europe rate is at roughly $1,400, compared with nearly $11,000 last year. Although the prices that were in freefall earlier in the spring appear to be leveling off, rates for both trade lanes are hovering around 2019 levels. With more capacity from shipbuilders on the way, shipping companies have limited leverage in what's become a buyers' container market.

Market perspectives:

• Outside markets: The U.S. dollar index was higher amid weakness in the euro, yen and British pound. The yield on the 10-year U.S. Treasury note was firmer, trading around 3.74%, with a mostly higher tone in global government bond yields. Crude oil prices continue to rise, with U.S. crude around $72.80 per barrel and Brent around $76.75 per barrel. Gold and silver futures were under pressure ahead of U.S. economic data, with gold under $1,961 per troy ounce and silver under $23.29 per troy ounce.

• According to S&P Platts, global air travel has finally returned to pre-pandemic levels this month as total commercial flights per day averaged 105,682 in the first two weeks of May, up 20% year-on-year. Global jet fuel demand, however, is expected to remain below 2019 levels for now as efficiency gains and a slower rebound in long-haul travel, especially in Asia, limit the consumption upside for the fuel.

• Colorado River basin states reach agreement on water cutbacks. The states bordering the Colorado River have reached an agreement with the Biden administration to voluntarily conserve significant portions of their water supply in exchange for roughly $1 billion in federal funding. This deal is a response to the concerning decrease in water levels in Lake Powell and Lake Mead, the country's largest reservoirs, due to two decades of drought and global warming.

Details: California, Arizona, and Nevada, forming the Lower Basin, have agreed to conserve 3 million acre-feet of water over the next three years, approximately 13% of their total allocation from the river. In return, the Biden administration has committed to compensate the states for three-quarters of the water savings, equating to around $1 to $1.2 billion in federal funds. Most of the cuts (2.3 mil. acre-feet) would come from water districts, farm operators, cities and Native American tribes who agreed to take less water in order to qualify for federal grants offered under the 2022 Inflation Reduction Act. Those payments total about $1.2 billion. Another 700,000 acre-feet would come from California, Nevada and Arizona, which agreed to work out the cuts among themselves in the coming months. If they don't, the Interior Department said it would withhold the water... a move that could face legal and political challenges. Finding another 700,000 acre-feet remains a problem for the three lower-basin states to solve, at their own pace.

The Colorado River supports over 40 million people and plays a key role in seven western U.S. ag states as well as parts of Mexico and irrigates 5.5 mil. acres of farmland

One main tension in the negotiations was between Arizona and California, the two states that extract the most from Lake Mead. A solution had to be found that would balance the cutbacks in water use, without compromising either state's water supply. The new deal requires the Lower Basin to conserve at least 3 million acre-feet by 2026, with at least half of that being achieved this year.

If the reservoirs fall farther than expected over the next three years, emergency provisions in the agreement will kick in. Additional actions will be taken to maintain reservoir elevations of 1,000 feet above sea level at Lake Mead and 3,500 feet at Lake Powell.

Despite the recent increase in water levels due to heavy rain and snow, state and federal officials are hopeful that these reductions will be sufficient to protect the reservoirs until 2026. At that time, a major renegotiation is planned for how the Colorado River gets divided.


— Uralchem, Russia's largest potash and ammonium nitrate producer, plans to open an ammonia export terminal near the Black Sea on the Taman Peninsula in southern Russia by the end of the year, according to CEO Dmitry Konyaev in an interview with Reuters. This move is a response to the blockage of a pipeline crossing Ukraine, which previously facilitated Russian ammonia shipments to Odesa.

The new terminal would help to replace the ammonia transshipment volumes that were previously provided through Odesa. In its initial stage, the terminal could handle 1.5 million metric tons (MMT) of ammonia per day. This capacity is planned to increase to 3.5 MMT by the end of 2025, alongside an additional capacity of 1.5 MMT for urea.

Russia has been urging for its pipeline access to be restored, but Ukraine is insisting this can only happen if Russia permits more Ukrainian ports to join the Black Sea Grain Initiative. Konyaev sees this as turning the matter into a political issue rather than a commercial decision.

Perspective: Russia was the largest fertilizer exporter in the world in 2021. However, Konyaev noted that Russian exports declined 10% to 15% in 2022, with Uralchem's shipments falling by a quarter to a third. He attributed this drop to the seizure of fertilizer shipments by the West, which he claims has cost his company over $200 million.

— The Kremlin is pressuring governments including India behind the scenes, threatening to upend defense and energy deals unless they help block expected moves aimed at turning Russia into a financial pariah state over its invasion of Ukraine. Link for details via Bloomberg.

— Ukrainian-backed troops crossed into Russia in a surprise attack. Russia said that its military and security forces were fighting against Ukrainian units that had crossed into its southern Belgorod region, the largest such incursion into Russian territory since the war began. Ukraine's military intelligence directorate, known as HUR, identified the troops as two volunteer groups of Russian citizens who work closely with HUR and said the aim of the operation was to create a buffer zone to protect Ukrainian civilians. A Kremlin spokesman said Russia had sufficient forces to eject the fighters, and regional authorities said they were evacuating civilians from border villages and announced emergency security measures.


— Debt-limit update:

  • House Speaker Kevin McCarthy (R-Calif.) said he and President Joe Biden had a productive talk last night but haven't yet reached a deal on the debt ceiling. The speaker expects to talk daily with the president until one is done (no additional meetings are scheduled at the White House). White House negotiators met with Republican representatives Monday morning for about two and a half hours at the U.S. Capitol before the Biden/McCarthy private meeting. "We're getting closer. Don't give up on us," the Speaker told reporters late Monday.

  • Treasury Secretary Janet Yellen warned it's now "highly likely" her department will run out of sufficient cash in early June. "We estimate that it is highly likely that [the] Treasury will no longer be able to satisfy all of the government's obligations if Congress has not acted to raise or suspend the debt limit by early June, and potentially as early as June 1," she said in a letter to lawmakers.

  • "From this discussion, he knows where we are," McCarthy told reporters as he returned to the Capitol. The two leaders focused on where they remain at odds, looking for ways to bridge the still-considerable gaps. "We only talked about where our differences were," McCarthy said, adding that the staff for the White House and his team will run through "ideas" he and the president discussed hoping to come to agreement.

  • McCarthy said lifting the debt limit for a short period was not on the table among Republicans because it would prolong the debate rather than resolve it. He also discounted the suggested use of the 14th Amendment as a fallback plan.

  • McCarthy stressed the GOP won't agree to tax changes, but Biden wants deficit and debt reduction to be achieved in part by raising revenues and taxes on corporations and the wealthy, not just tallied through spending cuts. The White House and House negotiators have agreed in principle to claw back unspent Covid-19 funds to achieve savings of between $50 billion and $70 billion, according to some sources.

  • Asked about federal permitting reform for energy construction projects, which has some bipartisan support, McCarthy said some version may be in an eventual deal after discussing it with Biden. McCarthy told E&E News that any permitting policy changes that could not be agreed on by the debt-limit deadline could be taken care of later, delivering on an earlier promise he made to Biden. Currently, states can reject electrical transmission projects that run through their territory, hampering the country's energy transition plans. Giving the federal government pre-emption rights, supporters argue, would speed up the adoption of renewable energy, particularly in places where it isn't generated. New legislation from Sen. Joe Manchin (D-W.Va.), backed by the White House, would set time limits for states to approve or deny interstate transmission projects before the Federal Energy Regulatory Commission, which would assume centralized federal authority on permitting, could step in.

  • Negotiators have agreed to cap discretionary spending, likely over two years, the New York Times reports.
  • The House is scheduled to depart Washington beginning on Thursday afternoon ahead of the Memorial Day weekend, based on the schedule lawmakers had as of Monday. But this could change pending any major progress in the talks; the Speaker would likely call the chamber back into session once a vote timeline could be determined.

— What would happen if the U.S. defaults? Moody's Analytics forecasts "spiking interest rates and plunging equity prices," as well as the freezing up of short-term funding. Volatility might also send shockwaves throughout the financial system, spreading to the derivative and mortgage markets, where Treasuries are often used as collateral for securing trades and loans. The focus would then turn to the Federal Reserve and its backstop menu of options to avert a calamity, but Chair Jay Powell has repeatedly warned that "no one should assume that the Fed can protect the economy."

— Rise in CFAP 2 payments as other aid holds basically steady. Payments under the Coronavirus Food Assistance Program 2 (CFAP 2) increased to $19.48 billion as of May 21, up from $19.44 billion where they had been for several weeks. There were increases in original CFAP 2 payments at $14.55 billion ($14.53 billion) and top-up payments at $4.93 billion ($4.91 billion prior). But payments under CFAP 1 remained basically steady. Emergency Relief Program (ERP) Phase 2 payments continue to slowly increase, moving up to $656,325 from $508,169 with 344 payments being made. ERP Phase 1 payments held essentially steady.


— TikTok sues Montana over its banning of the video app. The Chinese-owned company argued in federal court that the effort to block it from operating within the state's borders was unconstitutional. Meanwhile, The Information reports that Oracle, TikTok's cloud provider, has only limited access to the app's source code, undercutting claims that the company's plan to satisfy U.S. data privacy concerns was moving forward.


— U.S. begins major trade mission to Indonesia to counter China. Indonesia will host one of its largest American trade delegations yet as the U.S. seeks to counterbalance China's fast-growing presence in Southeast Asia's largest economy. About 100 senior executives from over 30 U.S. companies are set to visit Jakarta this week for discussions on investment opportunities in Indonesia and the wider region. The U.S./ASEAN Business Council, which is organizing this event, stated that this is their largest such gathering. The executives are interested in opportunities related to the new capital city, digital economy, tourism, manufacturing, healthcare, and energy transition.

— South Korea resumes imports of German pork. South Korea is resuming imports of German pork after suspending them for more than two years following the discovery of African swine fever (ASF) in the country, the German ag ministry said. South Korea has adopted a regionalization concept, under which only pork imports from the region affected by the disease are restricted, the ministry said. Three German slaughterhouses and meatpackers have been authorized to immediately resume exports to South Korea. South Korea was Germany's second-largest non-EU pork market after China prior to the ASF outbreak.

— South Africa opposition pleads for market access as U.S. ties fray. South Africa's largest opposition party, the Democratic Alliance (DA), is appealing to U.S. lawmakers to maintain the country's duty-free access to the U.S. market under the African Growth and Opportunity Act (AGOA). This move comes amidst tensions between the two nations, primarily driven by South Africa's abstention from United Nations resolutions condemning Russia's invasion of Ukraine and its engagement in naval exercises with Russian warships.

Bloomberg reports that DA leader John Steenhuisen recently met with congressional and Senate staff in Washington to argue for South Africa's continued access to AGOA. Alan Winde, DA premier of the Western Cape province, is set to make a similar trip soon.

Background. The U.S. ambassador to Pretoria has accused South Africa of loading arms onto a Russian ship, a claim that South Africa's administration, led by President Cyril Ramaphosa, has denied. The accusation has raised concerns over South Africa's future access to the U.S. market. AGOA is due to expire in 2025, and U.S. officials have indicated that the eligibility criteria for beneficiaries might be revised or the program replaced. South Africa exports cars and agricultural products to the U.S. under AGOA and the Generalized System of Preferences, amounting to about $2.7 billion worth of goods last year. Steenhuisen expressed concerns about the situation, stating the need for quick action and criticizing what he perceives as a belated and antagonistic approach towards one of South Africa's largest trading partners.


— An upcoming Treasury Department guidance on the definition of a U.S. tax credit could make or break the clean-hydrogen economy, according to a report from the Center for Strategic and International Studies. This regards the implementation of the Inflation Reduction Act's (IRA) 45V Hydrogen Production Tax Credit. This credit awards up to $3 per kg of hydrogen produced to projects with a lifecycle greenhouse gas emissions intensity of less than 0.45 kilograms per kilogram of hydrogen (kg CO2e/kg H2). The upcoming Treasury Department guidelines will influence how emissions intensity of electrolysis-based hydrogen is calculated. This decision could impact the financial viability of these projects and the nation's climate goals.

Emerging compromises propose a phased-in approach to guidelines. The reports says this strategy would allow continued deployment of hydrogen production while maintaining emissions as low as possible. It would give the industry a grace period to establish the systems required for more rigorous emissions accounting.

— Countries around the world collected a record $95 billion in 2022 through carbon taxes and Emissions Trading Systems (ETS), according to a report by the World Bank. These mechanisms currently cover approximately 23% of global greenhouse gas emissions, with a total of 73 such tools being implemented worldwide. However, the United Nations stressed that for climate targets to be met, the reach and application of carbon pricing must be expanded further.

Jennifer Sara, the global director for climate change, emphasized the importance of putting a cost on carbon emissions to stimulate investment and behavioral changes that can lower emissions. She asserted that the scope and cost of carbon pricing must continue to expand to trigger the transformative change required to achieve the temperature goals of the Paris Climate Agreement.

Of note: The report indicated a slight drop in the issuance and retirement of carbon credits in 2022 compared to 2021.

— The biggest U.S. bank has agreed to invest more than $200 million to purchase credits from several companies in the nascent carbon credit industry, company officials said, a boost to businesses that have removed only small amounts of carbon so far. JPMorgan is making the purchases to neutralize the bank's environmental footprint and to score new business, the WSJ reports. The bank helped carbon-removal startup Climeworks raise $650 million from investors last year and has fielded questions from big corporate clients about carbon removal.

— The Economist examines whether carbon removal can become a trillion-dollar business. The oil industry's engagement with carbon removal is a promising development, the article notes, noting that Occidental and ExxonMobil have substantial investments in the area, and other oil giants like Chevron, Equinor, and Wintershall have joined the fray. Critics argue that this is merely a reputation-saving move, but given the urgent need for carbon capture and negative emissions, the involvement of these corporations with their vast resources and relevant expertise is generally seen as a positive step.  


— Brazil declares animal health emergency to address HPAI in wild birds. Brazil has declared a state of animal health emergency for a period of 180 days in response to the confirmation of highly pathogenic avian influenza (HPAI) in wild birds. The country has confirmed eight cases of HPAI in wild birds since its first case was detected on May 15. As part of its response, Brazil has established an emergency operations center to coordinate, plan, and assess national efforts related to avian influenza, Reuters reported. Brazil is the top global exporter of chicken meat, with exports amounting to $9.7 billion in 2022. While the World Animal Health Organization's guidelines state that the detection of HPAI in wild birds does not pose trade issues, Brazil is notably worried about the disease affecting commercial flocks. The presence of HPAI in commercial birds can typically have implications for trade, potentially impacting Brazil's significant poultry industry.

— Cell meat has big environmental impact. Cell-cultured meat often is portrayed as environmentally friendly because it uses less land and water than livestock, but it has a global warming potential of up to 25 times larger than beef depending on the growth media.


— Sen. Tom Carper (D-Del.) announced on Monday that he will not seek re-election in 2024 and will retire from the Senate at the end of his current term. He is Senate Environment and Public Works Committee Chair. Carper, 76, made the news official during a press conference in Wilmington on Monday morning, where he ticked through the highlights of his career before saying that the time has come for him to retire from the upper chamber — he has served in the Senate since 2001 and previously served in the House, and was the state's governor. The seat is considered safe for the Democrats. The party is already eyeing Rep. Lisa Blunt Rochester (D-Del.) to run for the seat in 2024. Blunt Rochester — who is a national co-chair of Biden's reelection campaign — would become the first woman of color to represent Delaware in the Senate. Carper is the fourth Senate Democrat to retire this cycle, joining Sens. Debbie Stabenow (D-Mich.) Ben Cardin (D-Md.) and Dianne Feinstein (D-Calif.).

— Glenn Youngkin reportedly reconsiders running for president. The Republican governor of Virginia has had second thoughts after previously ruling out a 2024 run, according to Axios. He's been encouraged by GOP donors eager to see a more moderate alternative to Donald Trump, who's leading in Republican polls.


A package of supply chain-focused bills is set to get a vote in the House Transportation and Infrastructure Committee today. Lawmakers will consider whether to ease requirements for commercial driver's license testing, allow some trucks to weigh more, and authorize spending to alleviate a parking shortage for trucks. The committee will also vote on legislation to expedite environmental reviews for major projects, a Republican priority.


— AIG will sell almost all of its reinsurance business to RenaissanceRe in a deal worth close to $3 billion.

— The Environmental Protection Agency's (EPA) internal watchdog is voicing concern over the potential for sensitive information to be stolen by hostile nations from groups receiving agency funding. This comes according to a Bloomberg interview with Jason Abend, assistant inspector general for investigations at the watchdog's office.

One of the primary areas of concern is the country's water infrastructure. The fear is that hostile actors might attack this infrastructure either to demand a ransom or to poison residents. Apart from the possibility of terrorist attacks on infrastructure, the inspector general's office is also concerned about the risk of government-funded research being stolen. This research could potentially include commercially valuable information. Such theft could represent not just a cybersecurity issue but also an economic and national security risk, as it might expose important trade secrets to foreign threats.

— Bayer investors get class status in suit over Monsanto deal risk. Two pension funds, the Sheet Metal Workers National Pension Fund and the International Brotherhood of Teamsters Local No. 710 Pension Fund, have been granted class action status in a lawsuit against Bayer AG. They allege that the pharmaceutical company failed to adequately assess Monsanto Co., the maker of Roundup herbicide, before its acquisition and did not warn investors about potential litigation risks linked to cancer allegations.

The case is overseen by Judge Richard Seeborg in the U.S. District Court for the Northern District of California, who confirmed the class action status on May 19, 2023. This decision is significant as it typically sets the stage for a settlement.

The pension funds allege that Bayer's due diligence failures led to a 26% loss in Bayer's securities and a $12.87 billion loss in market capitalization. Bayer has stated it will set aside up to $16 billion to settle tens of thousands of Roundup injury claims if the US Supreme Court dismissed its appeal, which occurred in June 2022.

Bayer is disputing the court's decision to grant class action status and is considering its legal options. The company claims it conducted appropriate due diligence during the Monsanto acquisition and argues that the purchases of American Depositary Shares (ADSs) by the funds do not qualify as domestic transactions under federal securities law. However, Judge Seeborg does not share the concern that trades outside the US invalidate claims or make the funds atypical representatives.

Bayer, headquartered in Leverkusen, Germany, has insisted it has always acted in accordance with applicable securities laws. Meanwhile, the plaintiffs accuse Bayer of downplaying liability risks related to Roundup, which some consumers blame for their non-Hodgkin lymphoma.

The ruling on the class action status is part of the ongoing legal saga for Bayer following its acquisition of Monsanto in 2018.

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