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c7a40a95400c5e93bf1b09b7b681ab44 | https://www.cnbc.com/2019/04/29/petsmarts-online-business-chewycom-files-to-go-public.html | PetSmart's online business, Chewy.com, files to go public | PetSmart's online business, Chewy.com, files to go public
A still image from a Chewy.com promotional video.Source: Chewy.com
Chewy.com, the online pet product retailer owned by PetSmart, filed documents with regulators on Monday to prepare for an initial public offering.
Chewy reported $3.5 billion in sales for fiscal 2018, up from $2.1 billion in 2017. For the same period, it reported a net loss of $268 million, narrowing from a net loss of $338 million.
Chewy did not state how much it expects to raise in the offering. Previous estimates have pegged its valuation at between $4.15 billion and $4.75 billion, according S&P Global Ratings.
PetSmart acquired Chewy in 2017 for roughly $3 billion to add an online business to complement its store base, as trends shifted online. But as the two business lines diverged, PetSmart transferred part of its stake in Chewy in a move that set the groundwork for a potential IPO.
The equity transfer sparked a lawsuit from some of the company's lenders, which PetSmart settled earlier this month.
Following the IPO, PetSmart will remain majority owner of Chewy. It will use proceeds from the IPO for working capital and general corporate purposes, according to the filing.
Chewy was founded in 2011 by Ryan Cohen and Michael Day. It has distinguished itself from many of its competitors with customer service that includes 24/7 access and two-day shipping of online orders.
Since its sale to PetSmart, Chewy has expanded its private label and launched "Chewy Pharmacy," an online pet pharmacy.
Cohen last year stepped down as CEO of the company. He was succeeded by Sumit Singh, formerly Chewy's chief operating officer, who previously served as director of Amazon Fresh and worked for Dell.
Chewy joins a long list of unprofitable companies that have either filed for or are planning IPOs, including Uber, Pinterest and SurveyMonkey. Last October, the percentage of unprofitable U.S. companies that went public reached 83%, topping numbers seen even in the dot-com bubble.
As a pet retailer, Chewy's IPO plans sparked jokes Monday afternoon on Twitter referencing one of the most famous unprofitable victims of the dot-com frenzy − Pets.com.
Tweet
Chewy, which will list under the ticker "CHWY," has hired Allen & Co., J.P. Morgan and Morgan Stanley to help lead its IPO.
WATCH: How IPO millionaires are impacting real estate in San Francisco
VIDEO3:0003:00How IPO millionaires are impacting real estate in San FranciscoThe Exchange
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97ea6f0c92a1ab8fa505d15e075d4deb | https://www.cnbc.com/2019/04/29/the-we-company-formerly-known-as-wework-files-confidentially-for-ipo.html | The We Company, better known as WeWork, files confidentially for IPO | The We Company, better known as WeWork, files confidentially for IPO
VIDEO0:2900:29We Company, known as WeWork, files confidentially for IPOPower Lunch
The We Company, better known as WeWork, filed confidentially for an IPO, the company said in a press release on Monday.
The company did not reveal financial information in the filing. However, in a presentation shared with CNBC in March, The We Company said it had a net loss of $1.9 billion on $1.8 billion in revenue in 2018, and a net loss of $933 million on $886 million in revenue in 2017.
WeWork's business model continues to rely on heavy funding from private investors, namely SoftBank, which has poured over $10 billion into the company, including $2 billion this year. WeWork has to plunge cash into real estate in some of the most expensive markets and makes money back over time as companies and individuals pay their rent, or membership.
The We Company joins a growing class of tech firms filing to go public. Lyft, Pinterest, Zoom and PagerDuty have already gone public this year, and Uber and Slack are both preparing for their own IPOs. The We Company's confidential filing is an amended draft registration statement, according to the release. The company initially filed a draft S-1 confidentially in December, according to a memo from the company's co-founder Adam Neumann obtained by CNBC.
The firm rebranded from the name "WeWork" earlier this year in order to encompass the expanding scope of its plans. WeWork now encompasses the co-working space business with which the firm got its start. The We Company's other business units include WeLive, which provides flexible residential offerings and WeGrow, its education unit.
In the memo to employees Neumann told staff, "We have regularly focused on how to take our business to the next level in every aspect. As part of keeping all options open, we confidentially filed a draft S-1 registration statement with the Securities and Exchange Commission in December. After a lot of thought, last week we decided to file the first amendment to our submission, which is a step towards allowing us to decide to become a public company."
Here is Neumann's memo to employees:
Hello everyone, This week I have been celebrating my birthday with family and close friends. It has been an opportunity to reflect on some of the most meaningful moments in my life: growing up in Israel, meeting my wife and partner Rebekah, the birth of my children, and collaborating with Miguel and Rebekah to found WeWork.From the first day, the goal of our company has always been about making a difference, impacting as many people as possible, and creating a world where people make a life and not just a living. We have regularly focused on how to take our business to the next level in every aspect. As part of keeping all options open, we confidentially filed a draft S-1 registration statement with the Securities and Exchange Commission in December. After a lot of thought, last week we decided to file the first amendment to our submission, which is a step towards allowing us to decide to become a public company. As partners on this journey, it is important for me to personally share this information with you and again thank you for your collaboration in getting us to this point.While this process restricts our ability to communicate about this topic, we will do our very best to update you when we can. I do not have an exact date or timeline to share with you, but I wanted you to know first that this process has started. Partly due to technology and partly due to the times we live in, the world has never felt smaller and yet more people than ever are sharing that they feel alone. As one of the world's largest physical networks, it is our responsibility to help lead the way and set the global example for people and corporations on how we should take care of each other and of our planet. Thank you all for your hard work and dedication to our mission.Sincerely,Adam
Watch: WeWork's revenue and net losses both doubled in 2018
VIDEO2:0102:01WeWork's revenue and net losses both doubled in 2018Closing Bell
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2dcb4ffc54b655dd7a98ab006d6e7437 | https://www.cnbc.com/2019/04/30/stocks-making-the-biggest-moves-midday-alphabet-ge-mcdonaldstexas-roadhouse-more.html | Stocks making the biggest moves midday: Alphabet, GE, McDonald's,Texas Roadhouse & more | Stocks making the biggest moves midday: Alphabet, GE, McDonald's,Texas Roadhouse & more
Check out the companies making headlines midday Tuesday:
Alphabet — Shares of Alphabet tanked 7.5%, posting its worst day since Dec. 1, 2008, after the Google parent posted weaker-than-expected quarterly results. The company posted revenue of $36.34 billion in the first quarter, versus $37.33 billion expected per Refinitiv. The revenue was dragged down by the decelerating ad sales growth at Google.
McDonald's — Shares of McDonald's climbed 0.23% after the burger chain posted first-quarter earnings and revenue that topped analysts' expectations. Global same-store sales grew 5.4% in the first quarter, more than the 3.4% increase analysts expected, according to Refinitiv.
General Electric — Shares of General Electric rose more than 4% after the company reported better-than-expected first-quarter earnings. The conglomerate posted earnings of 13 cents a shares, above Wall Street consensus of 9 cents a share, according to Refinitiv. Revenue also came above expectations.
Texas Roadhouse — Shares of the restaurant chain plunged more than 11% after the company reported worse-than-expected first-quarter earnings. The company posted earnings of 0.7 per share, below FaceSet consensus of 0.81 per share. Revenue also came in below estimates.
Chevron — Chevron's stock rose about 2% after Berkshire Hathaway committed $10 billion to Occidental Petroleum shares to complete its acquisition of Anadarko Petroleum. The market saw that endorsement from Warren Buffett as giving an edge to Occidental's bid over a rival offer from Chevron. Shares of Anadarko dipped 0.3% while Occidental's stock fell 2%. Chevron rose because of perceived cost savings from not having to complete the deal for Andadarko.
Pfizer — The pharmaceutical company reported better-than-expected quarterly results, sending its stock up 2.6%. Pfizer posted earnings per share of 85 cents on revenue of $13.118 billion. Analysts polled by Refinitv expected a profit of 75 cents per share on sales of $12.991 billion.
MGM Resorts International — MGM Resorts shares sunk 7% after the hospitality company's first-quarter numbers missed analyst expectations. Earnings per share clocked in at 5 cents, whereas analysts were expecting 21 cents. The company's revenue beat expectations, however, earning $3.18 billion, as compared to $3.13 billion expected by Refinitiv.
Yum China — Shares of Yum China rose 6.2% after the restaurant company released better-than-expected first-quarter earnings. The parent company of Pizza Hut and Kentucky Fried Chicken reported earnings of 59 cents per share, 5 cents higher than expected, and revenues of $2.3 billion, $40 million higher than expected. The company reported same-store sales increased 4%, versus estimates of a 1.8% increase.
MasterCard — Shares of MasterCard rose 2.9% after the company reported better-than-expected first-quarter earnings. The company reported earnings of $1.78, 12 cents higher than expected, and revenues of $3.889 billion, $33 million higher than expected, according to Refinitiv. Mastercard also reported a 26.7% increase in quarterly profits, citing a strong U.S. job market and an rise in online shopping, which boosted transaction volumes.
— CNBC's Nadine El-Bawab, Jessica Bursztynsky and Isabel Soisson contributed reporting.
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cb26dfbc8bb896b84835ccd0510a7182 | https://www.cnbc.com/2019/04/30/uber-looks-almost-nothing-like-amazon-despite-its-investor-pitch.html | Uber looks almost nothing like Amazon despite what it plans to tell Wall Street | Uber looks almost nothing like Amazon despite what it plans to tell Wall Street
VIDEO6:1606:16Why Uber is comparing itself to Amazon on its IPO roadshowSquawk Box
When Uber starts meeting investors this week for its upcoming IPO, the ride-hailing company is expected to compare itself to a business that it hardly resembles: Amazon.
The parallel, according to The New York Times, is based on the idea that Uber will eventually grow into an Amazon-like "platform" business, with ride sharing as the first step on its way to becoming a transportation behemoth. It's a compelling narrative for Uber, because the knock on Amazon for years was that it couldn't turn a profit. We now know it can — Amazon recorded net income of $3.6 billion in the latest quarter.
Uber burns cash today, as did Amazon when it went public in 1997. Both manage huge logistics operations behind the scenes that require hefty upfront spending. So shareholders just need to be patient for the long term and wait for those investments to pay off. That's what Uber would say.
Silicon Valley companies love to invoke Amazon and Jeff Bezos. He's the CEO who defied the odds and made Wall Street look silly for ever doubting his upstart could turn its massive investments into not one, but several dominant businesses on the way to becoming one of the world's most valuable companies.
The problem for Uber is it just doesn't have much in common with Amazon.
"The Amazon analogy has been carried too far and is being used as an excuse to justify high pricing for every money-losing, Silicon Valley venture," said Aswath Damodaran, who teaches finance at New York University's Stern School of Business.
Damodaran, who's known as Wall Street's "Dean of Valuation" for his work on the proper way to value companies, said the biggest difference between Amazon and others is its culture of consistency. From the beginning, Amazon has made clear it is focusing on revenue and cash flow appreciation while reinforcing the idea of investing profits in long-term growth.
In fact, Amazon's revenue growth has dipped below 20% only twice since its founding, even as it surpassed $230 billion in sales last year. And despite all the investments the company has made, Amazon generated positive cash flow in all but three years since going public.
A truck pulling an Amazon Prime branded cargo container waits beside the entrance gate at Amazon.com Inc.'s new fulfillment center in Kolbaskowo, Poland, on Friday, Feb. 16, 2018.Bartek Sadowski | Bloomberg | Getty Images
On top of that, the leadership team has remained stable, telling a familiar story "that does not waver, even in the face of adversity," Damodaran said. Uber, by contrast, has been plagued by management upheaval, leading most notably to the ouster in 2017 of co-founder and CEO Travis Kalanick.
"That is not something that you can acquire, but has to come from deep in the organizational culture," Damodaran said. "I firmly believe that Amazon is one of a kind."
Damodaran previously told CNBC that Uber should be valued at around $60 billion, much lower than the $80 billion to $90 billion range suggested by its updated IPO filing last week. Damodran said Uber's lack of a "viable business model" to reach profitability is "scary."
In its filing, Uber showed an operating loss of $3 billion on $11.3 billion of revenue in 2018. It had negative free cash flow of $2.1 billion and warned that it may not achieve profitability in the foreseeable future, as it continues to invest in its business.
That's a much bigger loss than what Amazon has reported throughout its history. Amazon has never reported an annual loss bigger than $1.5 billion. It first became profitable in 2003, nine years after its founding, and has lost money only twice since then. In 2011, when Amazon's market cap was similar to Uber's current valuation, it even eked out a small profit.
Amazon's cumulative losses were tiny compared with today's cash-burning companies. Through its first nine fiscal years, Amazon lost a little over $3 billion in total, before turning the corner to profitability. Uber, which is about 10 years old, and Lyft, which is a few years younger, have cumulative losses of $7.9 billion and $3.6 billion, respectively, and neither is close to cash flow positive.
"If these companies were on the cusp of profitability now in 2019, I would draw a comparison to Amazon," said Kevin Boeh, a finance professor at the University of Washington.
But they're not, and he doesn't.
The competitive landscape is also different. When Amazon first came on to the scene, most of the incumbent bookstores, like Borders and Barnes and Noble, weren't even in e-commerce, leaving the playing field wide open. Amazon started building its cloud-computing service, which it launched in 2006, years before Microsoft and Google had offerings. That business ultimately gave Amazon fat technology margins to blend in with its low-margin retail division.
Uber and Lyft, however, already have to go up against each other in the U.S. as well as a host of rivals in various markets around the globe. Uber's food delivery and freight forwarding services also face big competitors in mature markets, and the company is just one of many pursuing self-driving technology.
"Amazon certainly had this competitive advantage," said Mukesh Patel, who teaches business at Rutgers University. "That difference could be meaningful."
Perhaps no data point is more illustrative of the difference between the two companies than the amount of capital coming from their IPOs. In 1997, Amazon raised $54 million at a valuation of $438 million. Uber plans to raise about $10 billion.
Wall Street understands the disparity.
VIDEO7:0007:00Why an analyst who called Lyft's decline says Uber is not like other tech dealsSquawk Box
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940fea027df9fe979ee08ddf852c8a14 | https://www.cnbc.com/2019/05/01/microsoft-ciso-bret-arsenault-wants-to-eliminate-passwords.html?utm_source=mosaicsecurity | Microsoft's security chief explains why the company is eliminating passwords | Microsoft's security chief explains why the company is eliminating passwords
Bret Arsenault has been the top cybersecurity executive at Microsoft for ten years.Microsoft
It was 4 a.m. on a night in June 2017. Bret Arsenault, the top-ranking cybersecurity executive at Microsoft, had fallen asleep on top of his cell phone when it shocked him awake with a buzz.
A cyberattack, later dubbed NotPetya, had begun locking down computers and shutting down businesses in Ukraine.
It first looked like a routine ransomware attack, in which companies would have been able to pay to open their locked up computers. But NotPetya was different -- it spread lighting-fast, like a worm rather than ransomware, and companies quickly found there were no criminals to negotiate a ransom with at all, leaving them with inoperable hardware and no data.
Arsenault quickly jumped on a phone call with staff in Eastern Europe and the U.S. He demanded his staff shut off access to Ukraine within 10 minutes to stop the malicious software from spreading out of Microsoft's locations in that country.
The staff said they didn't think they could do it that fast. He pushed. They worked. They shut it down.
"If you do the right thing, they'll say you did your job. If it's the wrong thing, you get fired," said Arsenault, Microsoft's chief information security officer. "It was my team trying to not call chicken little. That is probably the hardest part of the job, to not get overexcited but not to under-react."
He might have the hardest cybersecurity job in the world, being accountable to the board of one of the world's largest tech companies, which supplies ubiquitous products and software that serve most other companies across the globe.
Microsoft is one of the most-attacked companies in the world. But Arsenault said the lessons he's learned from NotPetya and the other 6.5 trillion incidents the company sees each year can be used by businesses with much smaller profiles, and even by individuals. The biggest one: Get beyond passwords.
Microsoft is just as inundated with spam email, scams and phishing as its clients. These schemes still make up the bulk of most attacks, Arsenault said.
Email-based and password-based hacking underlie everything from the simplest frauds to the most complex, multi-faceted hacking campaigns, he said.
"We all sort of declared years ago that identity would be our new perimeter. People are very focused on taking advantage of identity, it's become a classic: hackers don't break in, they log in. I see that as a huge, huge thing for us to work on," he said.
"Password spraying" is an old-school method, where an attacker tries to access a huge number of accounts at once using some of the most commonly used passwords. It's simple but effective, especially where organizations don't have additional ways to authenticate their employees.
Once an attacker is able to gain access to a network through just one employee identity with one commonly used password, he or she can begin to do more damaging work, like stealing corporate information or impersonating employees to execute a financial scam.
"The reality is, we still see a lot of attempts of people trying to password spray. The best way to protect against the password spray is to just eliminate passwords. If you have passwords, you have to enable multi-factor authentication" -- that is, using a password in combination with another form of identification, like a random set of numbers texted to the user's phone.
"And so the thing that we are seeing is lots and lots of people just focused on eliminating that whole vector."
Ninety percent of Microsoft's employees can log on to the corporate network without a password, Arsenault said. It's a reflection of the "passwordless future" Microsoft has touted for years, and backed up by products to move consumers away from memorizing strings of confusing terms.
Instead, Microsoft employees use a variety of other options, including Windows Hello and the Authenticator app, which provide other alternatives for logging in, like facial recognition and fingerprints.
Microsoft is one of the few companies looking to eliminate passwords entirely, but other tech giants are also trying to help clients reduce their dependence on them.
For instance, Google has been testing stronger alternatives to passwords alone, like its USB key fobs which plug into customers' computers and provide a second factor of authentication for logging in. Google said last year this method reduced successful phishing attempts against its own employees completely.
Cisco is also banking on a future beyond simple passwords, after acquiring dual-factor authentication start-up Duo last year.
For companies with strict rules around identity, passwords and employee access, it can be difficult for cybersecurity executives to make any kind of change. That's where organizational structure plays a role, he said.
For top cybersecurity executives, there is a common trope, backed up by some data, that their tenure will usually last about three years and will often end when their company has had a breach.
Arsenault has lasted a lot longer: He's been at Microsoft since 1990 and held the CISO role since 2009. He said the short-term thinking of many companies on cybersecurity can be exacerbated by the short-term tenure of their CISOs. Gaining a longer term relationship with senior management, and especially the board of directors, is essential to make the kind of rapid change necessary to fight new threats.
He also notes that Microsoft has embraced a popular security model among tech companies: federated cybersecurity. This means that each Microsoft product has its own head of cybersecurity, focused more keenly on building security into the specific product and answering to customer issues.
"We have a similar federated model for red-teaming," he said, referring to the process of allowing ethical hackers to actively attack the company's networks and products to test for flaws. "We also do a third tier of external threat testing, for 'non-actualized' threat, or the ones that look like the things that we want to go and address." This way, he said, the company can anticipate the next large scale attack like NotPetya -- and figure out a response -- before it happens.
VIDEO3:2303:23Cracking your password
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76bf3a203131142486ca2e0c883ac46f | https://www.cnbc.com/2019/05/01/private-payrolls-surge-by-275000-in-april-blowing-past-estimates-and-the-biggest-gain-since-july.html?utm_source=akdart | Private payrolls surge by 275,000 in April, blowing past estimates in biggest gain since July | Private payrolls surge by 275,000 in April, blowing past estimates in biggest gain since July
VIDEO1:4401:44ADP: Private payrolls add 275K in April vs 177K estimateSquawk Box
The U.S. economy added far more jobs than expected in April as payrolls in the services sector grew by the most in more than two years, according to data released Wednesday by ADP and Moody's Analytics.
Private payrolls grew by 275,000 last month, the biggest increase since July, when they expanded by 284,000. Economists polled by Dow Jones expected private payrolls growth of 177,000.
Services-providing jobs increased by 223,000 in April, led by a gain of 59,000 positions in professional and business services. Education and health services companies added 54,000 jobs while employment within the leisure and hospitality industry expanded by 53,000.
Goods-producing jobs — which include construction, manufacturing and mining — rose by 52,000, led by a 49,000 payrolls increase in construction. The economy added just 5,000 manufacturing jobs while mining employment declined by 2,000.
Overall, medium-sized businesses, those that employ 50 to 499 people, led the way in jobs creation last month by adding 145,000 jobs. Jobs within small businesses, meanwhile, increased by 77,000 while large companies hired 53,000.
"The job market is holding firm, as businesses work hard to fill open positions," Mark Zandi, chief economist at Moody's Analytics, said in a statement. "The economic soft patch at the start of the year has not materially impacted hiring. April's job gains overstate the economy's strength, but they make the case that expansion continues on."
Wednesday's report came after the Commerce Department said last week the economy grew by 3.2% in the first quarter on an annualized basis. That was the best start to a year since 2015. The official jobs report for April from the government will be released Friday.
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628b44cce2ad5c11f14b184e5b7750ad | https://www.cnbc.com/2019/05/02/beyond-meat-is-being-valued-like-a-tech-company-but-it-makes-food.html?__source=twitter%7Cmain | Beyond Meat is getting the Silicon Valley treatment even though it's a food company | Beyond Meat is getting the Silicon Valley treatment even though it's a food company
Beyond Meat CEO Ethan Brown speaks before ringing the opening bell at Nasdaq MarketSite, May 2, 2019 in New York City.Drew Angerer | Getty Images
Beyond Meat is a food company. Just don't tell that to investors.
In its trading debut Thursday, the maker of plant-based foods that serve as a substitute for meat more than doubled in value, giving the company a market capitalization of $3.9 billion.
Based on last year's revenue of $87.9 million, that values Beyond Meat at 44 times sales, the kind of multiple usually seen from the fastest-growing technology companies. It's not even in the same universe as big food companies, which are typically valued at less than two times revenue. Hormel is on the high end at 2.3 times sales, while Tyson Foods has a multiple of 0.7.
Located in El Segundo, California, near Los Angeles, and with backing from Bay Area tech investors like Kleiner Perkins and Obvious Ventures, co-founded by Twitter's Ev Williams, Beyond Meat is catering much more to the high-growth tech investor than the money manager focused on traditional food brands.
The company has what it calls an "innovation team," consisting of 63 people, including engineers and researchers, and says in its prospectus that its success relies partly on protecting "our intellectual property and proprietary technologies."
Beyond Meat, which sells packaged food in grocery stores and also has burgers and other items at 12,000 restaurants including A&W Canada, TGI Fridays and Carl's Jr., priced its IPO at $25 per share, the high end of its range, before jumping right as it started trading. The stock closed at $65.75.
Packages of Beyond Meat Inc. beef crumbles are displayed for a photograph in Tiskilwa, Illinois, on Tuesday, April 23, 2019.Daniel Acker | Bloomberg | Getty Images
Investors are clearly valuing the company based on its growth trajectory. Revenue surged 170% in 2018 after doubling the prior year, and Beyond Meat even recorded a gross profit (the revenue left after accounting for the cost of goods sold) last year for the first time. Almost all legacy food companies grow in the single digits.
However, Beyond Meat's gross margin of 20% makes it look like a food company and is far slimmer than what you see from software developers, internet companies and device makers that occupy the tech sector. When factoring in all the research and development costs and sales and marketing expenses, Beyond Meat lost $30 million last year.
In other words, investors are being asked to value Beyond Meat like a promising tech company because of its growth, IP and research spending, and not pay too close attention to the fact that it's producing and selling food.
WATCH: Beyond Meat begins trading at $46 per share
VIDEO5:0305:03Beyond Meat begins trading at $46 per shareHalftime Report
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1fc576957091dbc86854aefaf733cf16 | https://www.cnbc.com/2019/05/02/billionaire-unveils-fund-to-defend-people-from-medical-debt-collectors.html | Billionaire unveils fund to defend people from medical-debt collectors | Billionaire unveils fund to defend people from medical-debt collectors
In this Tuesday, Aug. 4, 2015 file photo, a nurse places a patient's medication on an intravenous stand at a hospital in Philadelphia.AP Photo | Matt Rourke
Idaho's wealthiest man just launched a new fund to defend people from "overly aggressive medical debt collectors."
About 1 in 5 Americans with health insurance has some medical debt, and sometimes it's not only the billed health-care costs but the creditor's fees and legal expenses that can bring financial hardship to families.
The problem of medical debt is even worse among uninsured, with 53% tackling some bill problem, according to a Kaiser Family Foundation/New York Times survey from 2016. Two-thirds of people who file bankruptcy cite medical bills as a factor.
"Medical rates and medical expenses continue to skyrocket, going up and up," said Frank VanderSloot, founder and CEO of Melaleuca, an Idaho Falls-based health products company.
VanderSloot and his wife, Belinda, announced a $500,000 legal defense fund last week to help east Idahoans with medical debt who also have been slapped with "excessive attorney fees."
"I just said let's start up this fund," the businessman told CNBC this week. "I've got the resources and have been looking for good ways to use them to help folks."
AP Photo | John MillerFrank VanderSloot, who owns Melaleuca, Inc., a healthcare products company, is seen in Idaho Falls, Idaho.
With a net worth estimated at $4.5 billion, VanderSloot is considered Idaho's wealthiest individual, according to Forbes. He's also an active donor to the Republican Party and a former national finance co-chairman for Mitt Romney's 2008 and 2012 presidential bids.
According to Consumer Reports, it's not unusual for people to get contacted about a debt they don't recognize.
"Consumers really have to pay close attention to these confusing medical bills when they come in and try to settle it," said Chuck Bell, a programs director at Consumer Reports. "But also be aware that you have to keep checking your credit report because it could be you saw a provider that sent something to collections that you were never even billed for."
Texas leads the nation with the biggest total medical debt of its population, followed by California and Florida, according to credit reports tracked by TransUnion. Nearly 26% of the population in Texas has some medical debt, and even in smaller states such as Idaho, the problem exists with about 16% of adults.
In announcing the fund, VanderSloot indicated it would defend against "tactics used by overly aggressive medical debt collectors."
For one, VanderSloot is taking on a local medical-debt collection company, Medical Recovery Services, or MRS.
"We've got an outfit operating in Idaho Falls, a debt collection agency, that's more interested in running up attorney fees than they are in collecting medical debt," VanderSloot told CNBC.
Even though medical debt can lead to litigation, some attorneys suggest U.S. consumers are more likely to be sued for having credit card debt. In some states, including Idaho, consumers have just 21 days to respond to collection lawsuits.
The billionaire said his interest in the medical debt issue follows the case of a Melaleuca employee with a bill of nearly $6,000 from an original medical expense of $294. The original medical bill has since been paid by the employee.
VanderSloot claims MRS tried to garnish the wages of the Melaleuca employee. The matter ended with Melaleuca and the collection company locking horns in court.
"How they were behaving with us, the employer, seemed really odd," said VanderSloot. He alleges MRS used "bullying kind of tactics" and engaged in "patterns that appear to be unethical at the least."
MRS strongly rejects allegations that it has done anything wrong.
"We take our professional and ethical obligations very seriously," MRS attorney Bryan Smith told CNBC in an email statement. "In representing the interests of our clients, we always ensure to follow all applicable rules, regulations, and statutes — as well as our professional, ethical obligations."
Smith also said the debt collection company's "practices are fully supported by the applicable laws of our highly regulated industry, and the court determines post-judgment fees on a case-by-case basis."
Republican Idaho state Rep. Bryan Zollinger, an outside attorney for MRS, fired back that VanderSloot "is misinformed." Also, Zollinger insists he doesn't make any business decisions for the Idaho Falls collections company, even though he's listed as a registered agent.
Zollinger claims that the matter with VanderSloot is "a personal beef because he has an employee who was garnished. Everything we do is not only legal, but I believe everything we do is ethical as well."
Even so, Zollinger said he hopes to sit down with VanderSloot to sort out the situation. "I'd be happy to walk him through any of our files or any of the decisions."
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19d48fde243cbf698f6f2ee5caa4cf11 | https://www.cnbc.com/2019/05/03/cnbc-media-alert-cnbcs-becky-quick-will-speak-with-billionaire-investor-warren-buffett-on-cnbcs-squawk-box-monday-may-6th-6am-9am-et.html | CNBC MEDIA ALERT: CNBC'S BECKY QUICK WILL SPEAK WITH BILLIONAIRE INVESTOR WARREN BUFFETT ON CNBC'S "SQUAWK BOX" MONDAY, MAY 6TH 6AM-9AM ET | CNBC MEDIA ALERT: CNBC'S BECKY QUICK WILL SPEAK WITH BILLIONAIRE INVESTOR WARREN BUFFETT ON CNBC'S "SQUAWK BOX" MONDAY, MAY 6TH 6AM-9AM ET
BILL GATES, MICROSOFT FOUNDER & CO-CHAIR OF THE BILL & MELINDA GATES FOUNDATION, & CHARLIE MUNGER, VICE-CHAIRMAN OF BERKSHIRE HATHAWAY, WILL JOIN 8AM-9AM ET
WHEN: Monday, May 6th 6am-9am ET
WHERE: CNBC's "Squawk Box"
CNBC's Becky Quick will speak with billionaire investor Warren Buffett Monday, May 6th on CNBC's "Squawk Box" (M-F, 6AM-9AM ET) live from Omaha, Nebraska, following the Berkshire Hathaway Annual Shareholders Meeting. Buffett will be live from 6-9am ET. Charlie Munger, Vice-Chairman of Berkshire Hathaway, and Bill Gates, Microsoft Founder & Co-Chair of the Bill & Melinda Gates Foundation, will join from 8-9am ET.
Transcript to follow the interview.
To follow news coming out of the Berkshire Hathaway Annual Shareholders meeting on Saturday, May 4th go to buffett.cnbc.com or sign-up for CNBC's weekly Buffett newsletter at buffettnewsletter.com.
For more information contact:
Jennifer DaubleCNBCt: 201.735.4721m: 201.615.2787e: jennifer.dauble@nbcuni.com
Emma Martin CNBCt: 201.735.4713m: 551.275.6221e: emma.martin@nbcuni.com
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cada0c4fc9af300a686991d05aecdef2 | https://www.cnbc.com/2019/05/03/consumer-watchdog-sues-two-credit-repair-firms-over-fees-practices.html | Consumer watchdog agency sues two large credit-repair firms, alleging unlawful fees and deceptive practices | Consumer watchdog agency sues two large credit-repair firms, alleging unlawful fees and deceptive practices
The nation's consumer watchdog agency is suing the owners of two large credit-repair companies, accusing them of taking unlawful fees from consumers and engaging in deceptive and abusive sales tactics.
In a complaint filed Thursday in U.S. District Court in Utah, the Consumer Financial Protection Bureau accused CreditRepair.com and Lexington Law, their owners and various affiliated entities, of violating telemarking laws by collecting fees from consumers before they were legally permitted to do so. The lawsuit also alleges that deceptive methods were used to get customers to sign up for credit-repair services at both firms.
In its complaint, the bureau said it is seeking to stop the upfront fees, end deceptive representations used through marketing the services and obtain relief for harmed consumers.
Signage is displayed inside the Consumer Financial Protection Bureau (CFPB) headquarters in Washington, D.C., U.S., on Monday, March 4, 2019.Andrew Harrer | Bloomberg | Getty Images
Under federal law, companies can charge fees for credit-repair services only once the promised results have been achieved and proven with a credit report six months later.
The lawsuit says that at the time of enrollment with Lexington Law or CreditRepair.com, consumers are charged a fee for a copy of their credit report and told that the fee — which has ranged from $9.99 to $14.99 since July 2011 — is required to begin the credit-repair process. Ongoing monthly fees range from $79.95 to $129.95.
The complaint also says that Lexington Law and CreditRepair.com relied on a shared network of marketing affiliates that used deceptive tactics to get consumers to enroll.
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For example, the CFPB said, from at least 2012 through 2017, a partner identified as "HSP1" offered consumers low-interest mortgages, access to rent-to-own housing or other products and services, none of which it actually could do. The suit says the unnamed firm was simply an affiliated call center with the purpose of transferring potential clients to Lexington Law.
More than 100,000 consumers signed up for Lexington Law's credit-repair services through that unnamed firm's efforts, the complaint says.
The lawsuit claims the defendants either knew about the misrepresentations or had "reckless indifference" to them or an awareness of the high probability of their existence.
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"Despite this knowledge, the ... defendants continued to sign up consumers through the affiliate or participated in the affiliate's deceptive conduct," the complaint states.
The two firms plan to fight the accusations.
"We find ourselves a bit perplexed," said Eric Kamerath, a spokesman for the companies. "In a system that already is weighted heavily against the consumer in favor of opportunistic and opaque processes, why would the [bureau] choose to prevent consumers from getting professional help?"
Kamerath also said the lawsuit is premised on "an unannounced, incorrect and unworkable change in interpretation of an arcane billing provision that is outdated, previously unenforced and contradicted by the Credit Repair Organizations Act."
"We have been providing information to the CFPB for over four-and-a-half years," Kamerath said. "During that time, we have made frequent requests to meet and discuss any concerns the bureau has with respect to billing or other practices.
"Why the agency chose to wait until now to reveal its interpretation of the rule is a mystery to us."
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39056e94246f27a7338e872e12493a32 | https://www.cnbc.com/2019/05/03/democrats-demand-probe-into-turbo-tax-hr-block-tax-practices.html | Elizabeth Warren, Bernie Sanders call for probe into whether Turbo Tax, H&R Block hid free tax prep options | Elizabeth Warren, Bernie Sanders call for probe into whether Turbo Tax, H&R Block hid free tax prep options
Senator Elizabeth Warren, a Democrat from Massachusetts and 2020 presidential candidate, speaks during the National Forum on Wages and Working People in Las Vegas, April 27, 2019.Bridget Bennett | Bloomberg | Getty Images
Lawmakers, including Democratic presidential contenders Sens. Elizabeth Warren and Bernie Sanders, are calling on the IRS and the Federal Trade Commission to investigate tax software giants for allegedly steering customers away from free government-sponsored tax preparation options.
"These companies' actions in hiding Free File [Alliance] from search engine results — and therefore from consumers — in order to artificially inflate profits and deprive low-income consumers of cheaper product merit investigation as unfair and deceptive practices," the group said in one of the letters, which were dated for Thursday and released Friday.
The group of legislators also called on the IRS to terminate agreements with these companies and refund taxpayers who were who were eligible for free services, "but were unable to find it."
Under the Free File Alliance — an agreement between the IRS, major tax preparation companies and states — Americans who make an adjusted gross income of $66,000 a year or less are eligible to prepare their tax returns at no cost. The 16-year-old partnership among private software companies was in exchange for the IRS promising not to create its own free online service.
Recent reports claimed that tax preparation companies H&R Block and Intuit — the maker of TurboTax — have been allegedly adding code to tell Google and other search engines not to list the free versions of their online tax preparation tools.
In doing so, the companies are supposedly trying to direct customers toward paid products and away from free options they might be eligible for. The allegations were originally reported by ProPublica.
The revelations prompted several Democratic lawmakers — including Sen. Cory Booker and Rep. Tim Ryan, who are also running for president — to demand the FTC and the IRS to take action.
Neither Intuit nor H&R Block immediately responded to CNBC's request for comment.
The push comes several days after New York Gov. Andrew Cuomo, a Democrat, called on two state agencies to conduct similar investigations concerning the same issues.
However, federal lawmakers took their call further, saying the alleged violations are more widespread throughout tax preparation companies. Lawmakers claimed that TaxSlayer, FreeTaxUSA, and 1040.com are also deliberately hiding their free tax software products, using similar methods as Intuit and H&R Block, after conducting their own review.
TaxSlayer, FreeTaxUSA and 1040.com also did not immediately respond to requests for comment.
In recent weeks, a group of Democratic lawmakers, which also includes the four presidential candidates who signed this week's letters, has reintroduced legislation in the House and Senate to instruct the IRS to create its own free online tax preparation service. It would essentially eradicate the Free File Alliance and bar the IRS from entering agreements with private software companies.
Similar legislation has been proposed in past years, but the issue is likely to receive greater attention taken due to the controversy surrounding recent reports.
However, the Senate is simultaneously considering a bipartisan bill, the Taxpayer First Act, which would make the IRS and the Free File Alliance permanent. Tax software giants have been long lobbying for control of the bill's language.
Democrats hold the majority in the House, while Republicans have a 53-47 edge in the Senate.
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1b10fd5321e106c35eaee792652d6f42 | https://www.cnbc.com/2019/05/03/this-trivia-game-rewards-players-by-paying-off-their-student-debt.html | This trivia app cancels your student debt. One woman just won $50,000 | This trivia app cancels your student debt. One woman just won $50,000
Cynthia Thomas Reher is a veterinarian in Bellevue, WashingtonSource: Cynthia Thomas Reher
Where did the actor Steve McQueen live as a child? Does brackish water have more freshwater than saltwater?
If you can correctly answer questions like these, you might be done with your student loans sooner than you expected.
Some 400,000 people have registered with Givling, a trivia app that is helping people pay off their student debt, said Seth Beard, Givling's chief marketing officer. People are tested in pop culture, history, geography, math, chemistry and more. Users play rounds of trivia on teams of three and prizes are given out weekly.
The company was founded around four years ago, but it's taken off over the last year, Beard said. More than 5,000 people have won prizes on the app, he said, and the company has paid out $3 million. (The money can go toward student loans or a mortgage, and some of the payouts can be used on anything.)
Nearly 45 million Americans are in debt from their education. The average student now graduates $30,000 in the hole, compared with $10,000 in the early 1990s. The average borrower takes between 16 years and 18 years to pay off their debt, according to Mark Kantrowitz, an expert on student debt. (Kantrowitz had a warning for players: any money you receive needs to be reported to the IRS as income.)
Cynthia Thomas Reher's boss first told her about Givling, knowing that she was deep in debt. She and her husband borrowed more than $400,000 to attend the Ross University School of Veterinary Medicine.
Caption/Credit: The Givling app
"I enjoy what I do," Thomas Reher, 42, said. "But I had no clue what I was getting into. How can you when you're young, have never worked a day in your life and have no idea what the cost of living is?"
She began playing in 2015. "I figured there was nothing to lose," Thomas Reher said. She soon realized she wasn't very good at trivia, but the app offered her another way out of her debt.
Players can collect points through watching advertisements or getting friends to sign up and they gradually rise up to the top of the prize queue. (The company makes money through advertisements on the platform, and each day users get two free rounds of trivia although, if they want to play more, it's 50 cents a game.)
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Thomas Reher logged on every day, and over four years slowly watched her name float to the top. "The anticipation was like none other," Thomas Reher said.
She and her husband were paying nearly $3,000 a month for their student loans at one point, she said. As a result, they're now in their 40s but have just a few thousand dollars saved.
After 15 years of student loan payments, Thomas Reher still owed $57,000. "Making ends meet was hard," she said. "Student loans have kept us driving 15-year-old cars, delayed us getting into a house," she said.
They didn't vacation, or even go out for dinner. The loan payments "have kept us from saving for retirement, or saving for our kids' college now," she said. The couple has three children.
One morning, she awoke to the good news: Givling would be sending her lender, Navient, $50,000. She first shared the news with her husband.
"We cried happy tears," she said. "I feel more optimistic about the future now."
And what will she do with that extra money each month? Put it toward her husband's student debt. He still owes $65,000.
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e5a2ced15fdfd23ee297c7ff46ba9547 | https://www.cnbc.com/2019/05/03/why-working-into-old-age-may-not-salvage-your-retirement.html | Why working into old age may not salvage your retirement | Why working into old age may not salvage your retirement
Photo by Hero Images via Getty Images
When it comes to shoring up your retirement savings, "work longer" isn't always the right answer.
There's no denying that staying at work has its perks.
For instance, employees who are 50 and older can defer the maximum $19,000 into a 401(k), plus the catch-up contribution of $6,000 this year.
In addition, pre-retirees can boost their retirement income by opting to remain in the workforce a little longer. For each year you delay Social Security, up until age 70, you get an 8% increase in your benefit check.
But not everyone can continue to punch in — and those who curtail their careers due to health conditions take a hit to their retirement security.
People may not be aware that Social Security offers disability insurance, but going through it to get those payments is a long process.Niv Persaudcertified financial planner at Transition Planning & Guidance
Indeed, 3 out of 4 Americans aged 65 and over have multiple chronic conditions, which can include diabetes, high blood pressure and arthritis, according to the Centers for Disease Control and Prevention.
These ailments threaten older people's finances when they are forced to cut their hours or stop working altogether.
A recent study from Mathematica's Center for Studying Disability Policy found that newly disabled workers in their 50s and early 60s see their earnings decline by an average of 50% two years after they develop their condition.
"People don't think about disability being a possibility; they think about short-term medical bills," said Josh Nelson, a certified financial planner and founder of Keystone Financial Services in Loveland, Colorado.
VIDEO3:3303:33Emergency savingsOn the Money
The Mathematica study examined 3,105 individuals who were born between 1931 and 1947, following them over the course of about 20 years.
About 14% of the participants experienced a work-limiting health condition by age 59.
Another 12% of the people surveyed reported such a condition by age 63, and another 10% said they experienced this by age 67.
The study found that individuals who experienced these health problems were more likely to exit the workplace early.
For instance, at age 59, participants with conditions that affected their work were about 2.5 times more likely to stop working, compared to healthier peers.
Though federal disability and retirement benefits help affected workers to make up for some of their lost earnings, it doesn't fully replace what those workers were making, the study found.
Izabela Habur | Getty Images
Social Security's disability insurance provides infirm workers with a financial backstop in the event they're no longer able to earn a living.
In order to qualify, you must have been working for at least 10 years. However, younger workers may qualify for benefits with less time.
Here's the catch with Social Security disability coverage: Qualifying for it is very difficult.
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There's a five-question process the agency uses to vet applicants, including determining whether the condition is so severe that it keeps an individual from performing any work.
Even if you do qualify for Social Security disability, you won't receive benefits until the sixth full month after the date your condition began.
"People may not be aware that Social Security offers disability insurance, but going through it to get those payments is a long process," said Niv Persaud, a certified financial planner at Transition Planning & Guidance in Atlanta.
courtneyk | iStock | Getty Images
Nobody ever anticipates becoming disabled, but there are steps you can take prior to a health emergency to protect your income.
That starts with purchasing disability insurance, either individually if you run your own business or at work through your employee benefits package.
Standard disability coverage generally replaces up to 60% of your earnings for specified period of time.
The benefits generally run for three to six months for short-term disability plans, or they can last for as long as five years or up to age 65 for long-term disability coverage.
Insurance companies also offer supplemental disability insurance to help cover additional income needs that might otherwise not be covered by your standard disability policy.
An emergency fund can also help fill in the gaps.
How your proceeds are taxed will vary based on who's paying the premiums.
If your employer pays, any benefits you receive will be taxable.
Employees who pay for coverage using after-tax dollars will get their benefits tax-free. However, if they pay the premiums with pretax money, then their benefits are taxable.
Photo by tetmc via Getty Images
Be sure to read the fine print of your plan. Often, people filing a long-term disability claim have to wait anywhere between 30 days to 90 days before receiving benefits.
During that so-called "elimination period," you'd need to tap your emergency fund and short-term disability benefits to cover your expenses.
Further, know how your policy defines "disability." Some plans require that you be unable to perform the duties of any occupation in order to be considered disabled and eligible for payments.
The alternative is an "own occupation" plan, where benefits kick in once you're unable to perform the duties of your specific line of work.
"Make sure you have a policy that defines disability as not being able to do your own occupation," said Nelson. "'Any occupation makes it hard to get those benefits."
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d1ca64efad05284efd98b4c2ea943893 | https://www.cnbc.com/2019/05/04/buffett-hints-again-at-who-his-successor-is-but-largely-avoids-issue.html?__source=yahoo%7Cfinance%7Crelated%7Cstory%7C&par=yahoo&doc=105892752 | Buffett hints at possible successors, but 88-year-old CEO largely avoids the issue again | Buffett hints at possible successors, but 88-year-old CEO largely avoids the issue again
Berkshire Hathaway Chairman Warren Buffett walks through the exhibit hall as shareholders gather to hear from the billionaire investor at Berkshire Hathaway Inc's annual shareholder meeting in Omaha, Nebraska, U.S., May 4, 2019.Scott Morgan | Reuters
OMAHA, Neb. — 88-year-old Warren Buffett gave Berkshire Hathaway shareholders another hint about who his successor (or successors) will be, but once again refused to tip his hand too much, frustrating some in the audience at the company's annual meeting who repeatedly asked him for more information on the matter.
The chairman and chief executive officer said at the company's annual meeting that longtime executives Greg Abel and Ajit Jain could one day join him and Vice Chairman Charlie Munger on stage and answer questions from shareholders.
For years, Buffett and Munger have taken questions from Berkshire shareholders without sharing the stage at an arena in Omaha. But Buffett said Saturday that "this format will not be around forever and if it's better to have them up on the stage, then we'd be happy to do it." He added that they thought of having all four of them on stage at the same time.
Abel and Jain were promoted last year, with Abel running Berkshire's noninsurance businesses while Jain handles all insurance-related operations. These promotions made them the clear-cut favorites to succeed Buffett once he departs from his post.
Jain and Abel even answered shareholder questions on Saturday at Buffett's urging, two rare occurrences at the annual gathering.
Still, Buffett shied away from hinting at exactly who is the frontrunner and when they would take over. Instead, he said of Abel and Jain: "You could not have two better operating managers than Greg and Ajit. It's just fantastic what they've accomplished."
Buffett made his remarks after hearing a shareholder's question on the succession matter. The crowd erupted in applause after the question was read, a sign of just how much the matter is weighing on their minds. Buffett has been running Berkshire since the 1960s and over that time the conglomerate has returned more than 20% annually, double the return of the S&P 500. Many shareholders want to know what the long-term succession plan is.
But Munger, Buffett's longtime right-hand man, said the way Berkshire operates makes succession questions tough to answer.
"One of the reasons we have trouble with these questions is because Berkshire is so very peculiar. We have a different, kind of unbureaucratic way of making decisions," Munger said. "We don't have analyst committees deliberating forever and making bad decisions. We're radically different. It's awkward being so different, but I don't want to be like everybody else because this has worked better. So I think you're going to have to endure us."
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c29aaf5d0ba25f29eeddaa6f4c7f51a2 | https://www.cnbc.com/2019/05/04/warren-buffett-if-a-bank-needs-a-government-bailout-the-ceo-and-spouse-should-lose-net-worth.html?__source=yahoo%7Cfinance%7Crelated%7Cstory%7C&par=yahoo&doc=105892752 | Warren Buffett: If a bank needs a government bailout, the CEO and spouse should lose 'net worth' | Warren Buffett: If a bank needs a government bailout, the CEO and spouse should lose 'net worth'
Warren Buffett, Chairman and CEO of Berkshire Hathaway.David A. Grogan | CNBC
OMAHA, Neb. — Berkshire Hathaway Chairman and CEO Warren Buffett thinks CEOs of failing banks should lose literally everything they're worth.
"If a bank gets to where it needs government assistance, the responsible CEO should lose his net worth and his spouse's net worth," Buffett said at Berkshire's shareholders meeting. Whenever a situation like this arises, "it's the shareholders who pay."
Buffett's comment was followed by cheers from the crowd at the CHI Health Center in Omaha, Nebraska.
The Oracle of Omaha, as he is sometimes referred to, made his remark responding to a shareholder's question regarding the Wells Fargo scandal involving the creation of fake accounts. Berkshire is one of the largest shareholders in Wells Fargo.
The scandal, which broke in 2016, led to the departure of then CEO John Stumpf and several other executives. Wells Fargo shares have been stuck in the mud since the scandal broke, sliding more than 3% while the S&P 500 is up about 50%.
"It looks to me like Wells made some big mistakes," Buffett said. "They incentivized the wrong behavior. I've seen that in a lot of places."
"When you find a problem, you have to do something about it," Buffett said.
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49673cdef17fcb25d15c520b3112165b | https://www.cnbc.com/2019/05/04/warren-buffett-says-berkshires-purchase-of-high-flying-amazon-was-still-value-investing.html?__source=yahoo%7Cfinance%7Crelated%7Cstory%7C&par=yahoo&doc=105892752 | Warren Buffett says Berkshire's purchase of high-flying Amazon was still 'value investing' | Warren Buffett says Berkshire's purchase of high-flying Amazon was still 'value investing'
Warren Buffett tours the shopping kiosks at the 2019 BHASM in Omaha, NE on May 3rd, 2019.Gerard Miller | CNBC
Berkshire Hathaway's Amazon bet seems to stray from Warren Buffett's value investing style, but the Oracle of Omaha said the e-commence giant still meets the philosophy.
"The people making the decision on Amazon are absolutely [as] much value investors as I was when I was looking around for all these things selling below working capital years ago. That has not changed," Buffett said Saturday during a Q&A session at Berkshire's annual meeting at the CHI Health Center in Omaha, Nebraska. "The considerations are identical when you buy Amazon versus ... say a bank stock that looks cheap against book value or earnings of some sort."
Berkshire Hathaway revealed this week that one of its investment managers has been buying shares of Amazon. The news sent Amazon's stock soaring more than 3% that day. The stock is up 30% this year.
Buffett said the money managers who bought Amazon shares took into consideration a slew of financial metrics including the company's sales, margins, tangible assets, excess cash and excess debt.
"All those things go into making a calculation as to whether they should buy A versus B versus C and they are absolutely following the principal...I don't second guess them," he added.
Berkshire has been sticking with big value companies such as Coca-Cola and Bank of America over the years, missing out on the big tech boom that saw some of the so-called FANG names crossing $1 trillion market cap. Buffett just started purchasing Apple as recently as February 2017.
Berkshire's vice chairman and longtime investing partner, Charlie Munger, said he'd forgiven himself for not investing in Amazon earlier, but missing out on Google is a hard one to swallow.
"Warren and I are a little older than some people... Of course if something extreme as the internet happens and you don't catch it, other people are going to blow by you ... I give myself a pass. But I feel like a horse's ass for not identifying Google better. I think Warren feels the same way," Munger said Saturday.
"We saw it in our own operations and how well the Google advertising is working and we just sat there sucking our thumbs," Munger added.
Google parent Alphabet's stock has surged from about $96 a share at its inception in 2004 to about $1,189 today.
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a2920eb7d7d55f088ae1936afe0f36ea | https://www.cnbc.com/2019/05/06/apple-buys-a-company-every-few-weeks-says-ceo-tim-cook.html?utm_source=quora&utm_medium=referral | Apple buys a company every few weeks, says CEO Tim Cook | Apple buys a company every few weeks, says CEO Tim Cook
Tim Cook, CEO, AppleBrendan McDermid | Reuters
Apple buys a company every two to three weeks on average, CEO Tim Cook told CNBC.
In roughly the last six months alone, Cook said, Apple has bought approximately 20 to 25 companies. Apple often doesn't announce these deals because the companies are small and Apple is "primarily looking for talent and intellectual property," Cook told CNBC's Becky Quick in an interview from Berkshire Hathaway's annual shareholder meeting over the weekend.
The aggressive acquisition style highlights Apple's massive purchasing power. In its fiscal second-quarter earnings statement, Apple reported a $225.4 billion cash hoard, making it one of the most cash-rich companies in the world. Apple has pledged to contribute $350 billion to the U.S. over five years through expansion and taxes on repatriated cash.
Cook said that after investing in initiatives like its new $1 billion campus in Austin, Texas, the company turns its attention and spending to other goals.
"If we have money left over, we look to see what else we [can] do," Cook said. "We acquire everything that we need that can fit and has a strategic purpose to it. And so we acquire a company on average, every two to three weeks."
This strategy shines through in some of Apple's more high-profile acquisitions. Its 2018 acquisition of digital magazine subscription service Texture, for example, was a prelude to its new Apple News+ service that offers access to a variety of publications for a flat fee.
Even though Apple acquires several companies a year, it's famous for not making major acquisitions. Its largest in recent memory was its $3 billion purchase of Beats in 2014. Apple turned Beats into its Apple Music streaming service and continues to sell Beats headphones as part of its growing wearables category.
Apple has also reportedly mulled other major acquisitions, including Time Warner in 2016, according to a Wall Street Journal report at the time. Some have called on Apple to use its cash pile to make large acquisitions of companies like Tesla or Netlfix.
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Watch: Buffett: I'm 'wildly' in favor of Apple repurchasing shares
VIDEO6:5306:53Buffett: I'm 'wildly' in favor of Apple repurchasing sharesSquawk Box
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bc4d9303aa4771bb17af9f922b47d944 | https://www.cnbc.com/2019/05/06/chinese-team-will-come-to-us-for-trade-talks-after-trump-tariff-threat.html?&qsearchterm=patti%20domm | Chinese delegation will come to the US for trade talks after Trump tariff threat | Chinese delegation will come to the US for trade talks after Trump tariff threat
VIDEO1:5101:51Chinese delegation will still visit the US this week: SourcesPower Lunch
A Chinese delegation will come to the U.S. this week for trade talks after President Donald Trump upended negotiations by threatening new tariffs on Sunday, according to sources familiar with the matter.
One of the sources briefed on the status of talks said the Chinese would send a smaller delegation than the 100-person group originally planned. It is unclear whether Vice Premier Liu He would still helm this smaller group, an important detail if the team were traveling to Washington with an eye toward sealing a deal. Two senior administration officials described Liu as "the closer," since he had been given authority to negotiate on President Xi Jinping's behalf.
The team from Beijing was set to start talks with American negotiators on Wednesday as the world's two largest economies push for a trade agreement. It is unclear whether the talks will still start Wednesday.
The White House, Treasury Department and Office of the U.S. Trade Representative did not immediately respond to requests to comment.
China's President Xi Jinping (C) sits with members of the Chinese delegation during a bilateral meeting with U.S. President Donald Trump (Not Pictured) at Trump's Mar-a-Lago estate in Palm Beach, Florida, April 7, 2017.Carlos Barria | Reuters
Trump said Sunday that he would increase tariffs on $200 billion in Chinese products to 25% from 10% on Friday. He added that he would "shortly" put duties on the $325 billion in Chinese goods currently not subject to tariffs.
By reigniting a dormant trade war, Trump raised doubts about whether the Chinese delegation would participate in talks as planned. As of last week, the U.S. side had expressed optimism about announcing a deal as soon as this week.
But in threatening new tariffs, Trump said the trade deal with China had moved along "too slowly" as "they attempt to renegotiate."
U.S. stock markets initially plunged Monday following Trump's threat, but recovered throughout the day. Equities gained back some more of their losses following the report that the Chinese delegation still planned to come to Washington.
"It's putting a bid under the market. They're feeling a bit better," said Art Cashin, director of floor operations at the New York Stock Exchange for UBS. "It is a reduced party. There was going to be over 100. But the fact they're coming is important."
Whether Liu joins the talks is seen as particularly important. If he does not attend, it will "raise the likelihood of the 25% tariff hike being implemented by the U.S." on Friday, a team of Barclays economists wrote in a note Monday.
— CNBC's Patti Domm contributed to this report.
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1573e2a0caf9f344edd47bfb2657e4b4 | https://www.cnbc.com/2019/05/06/schumer-urges-trump-to-hang-tough-after-china-trade-tariff-threat.html | Chuck Schumer urges Trump to 'hang tough on China' after latest tariff threat while other top Democrats are quiet | Chuck Schumer urges Trump to 'hang tough on China' after latest tariff threat while other top Democrats are quiet
Senate Minority Leader Chuck Schumer (D-NY) acknowledges reporters as he arrives for a closed Senate Democratic policy lunch on Capitol Hill in Washington, March 26, 2019.Brendan McDermid | Reuters
As President Donald Trump reignites a trade war with China, he has found an ally in at least one key Democrat – Senate Minority Leader Chuck Schumer.
The New York senator, who has largely cheered the president's efforts to crack down on what officials from both major parties call Chinese trade abuses, backed Trump again on Sunday. In a tweet, he urged the president to "hang tough on China."
"Strength is the only way to win with China," said Schumer, who is otherwise at odds with Trump on a wide variety of policy issues.
Schumer tweet: Hang tough on China, President @realDonaldTrump. Don't back down. Strength is the only way to win with China.
The president plans to increase tariffs on $200 billion in Chinese goods to 25% from 10% on Friday, he tweeted Sunday. He also threatened to "shortly" put tariffs on the remaining $325 billion in Chinese products on which the U.S. has not put duties.
Trump's tariff threat upended trade talks with Beijing just as the White House touted progress toward a final agreement to resolve U.S. grievances such as intellectual property theft and trade deficits. U.S. and Asian stock markets plunged on Monday ahead of planned trade talks this week between Washington and Beijing.
While Schumer backed Trump's move, other top Democrats stayed quiet about Trump's trade war escalation as of Monday morning. Spokespeople for House Speaker Nancy Pelosi and Rep. Earl Blumenauer, an Oregon Democrat and head of the House Ways and Means Committee's trade subcommittee, did not immediately respond to requests to comment.
VIDEO4:1804:18China trade tensions flare as President Trump threatens new tariffsWorldwide Exchange
No major 2020 Democratic presidential candidates immediately reacted to Trump's tariff threat, either. But China has played a role in the race to take on Trump: former Vice President Joe Biden's recent comments downplaying the threat posed by Beijing sparked criticism from Sen. Bernie Sanders, a Vermont independent whose trade views overlap with the president's.
Democrats who, like Trump, have criticized free trade's effect on American workers have to tread carefully during the early days of the primary. In Iowa, which will hold the first presidential nominating contest in February, farmers have taken a beating from the trade conflict with China and have urged Trump to strike an agreement. But protectionist rhetoric plays well in key general election states such as Pennsylvania and Michigan, which have lost manufacturing jobs.
Trump has used tariffs as a negotiating tactic to force China to strike a deal. The U.S. wants to leave duties in place as an enforcement tool as part of any agreement. Beijing has pushed the Trump administration to remove tariffs.
In making his tariff threat Sunday, Trump wrote that the "Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!"
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49eb6c8bb57d78fd640f2990a58f800b | https://www.cnbc.com/2019/05/06/warren-buffett-says-stocks-are-ridiculously-cheap-if-interest-rates-stay-at-these-levels.html?__source=newsletter%257Ceveningbrief | Warren Buffett says stocks are 'ridiculously cheap' if interest rates stay at these levels | Warren Buffett says stocks are 'ridiculously cheap' if interest rates stay at these levels
VIDEO2:2302:23Iconic investor Warren Buffett laid out his thoughts on trade, IPOs and moreNews Videos
Berkshire Hathaway Chairman and CEO Warren Buffett said Monday stocks are a huge bargain if interest rates remain at their low levels.
"I think stocks are ridiculously cheap if you believe ... that 3% on the 30-year bonds makes sense," Buffett said in an interview with CNBC's Becky Quick on "Squawk Box."
"We are sitting very, very little inflation with the Federal Reserve putting a target at 2% not that long ago. ... Since money doesn't cost anything, you can print lots of money and have full employment and no inflation. … I wouldn't think you can have these things at these levels — long-term rates, interest rates, budget deficits — have that at a stable situation for a long period of time," Buffett added.
However, the billionaire investor known as the Oracle of Omaha doubts that low rates will always be the reality.
"The convergence of these factors would seem impossible to me. Generally if I feel something is impossible, it's going to change over time. I don't know in what way, but I don't think we can continue to have these variables in this relationship," Buffett said.
VIDEO7:3707:37Warren Buffett: Stocks are 'ridiculously cheap' if interest rates stay at current levelsSquawk Box
Despite raising the federal funds rate nine times in three years, the Federal Reserve is still keeping borrowing costs relatively low in a target between 2.25% and 2.5% and has signaled a pause in hiking interest rates this year. Stocks have risen to record highs recently in the low-rate environment.
At the Federal Open Market Committee meeting last week, Fed officials voted to hold interest rates steady, citing a lack of inflation pressure and strong economic growth.
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a8d68b3c817b66fd4e57184082ab3b34 | https://www.cnbc.com/2019/05/07/shares-of-fake-meat-company-beyond-meat-soar-as-market-tanks.html | Shares of fake meat company Beyond Meat soar as market tanks | Shares of fake meat company Beyond Meat soar as market tanks
Ethan Brown, founder and CEO of Beyond Meat, prepares to ring the opening bell to celebrate his company's IPO at the Nasdaq Market site in New York, May 2, 2019.Brendan McDermid | Reuters
In the middle of a down market Tuesday, one stock stood out: Investors were going wild for shares in Beyond Meat, a maker of "alternative proteins" or plant-based meat products now sold at Whole Foods, Safeway and featured on the menus of Carl's Jr., Del Taco, and TGI Friday's, among others.
Shares in Beyond Meat closed up nearly 6% after earlier surging more than 14% on a rough day that saw the S&P 500 end down more than 1.5%. The spike followed a buy rating initiated by Bernstein, which set a price target around $81. The stock is currently trading around that price.
Bernstein analyst Alexia Howard noted that the newly public company faces some competition in Impossible Burger (which is making a new, vegetarian Whopper for Burger King) and forthcoming products planned by Nestle and Tyson. But the fact that Beyond Meat has already mastered mass manufacturing of its non-GMO, plant-based products gives the Southern California company an edge.
Alternative protein products, which are generally higher priced than their traditional counterparts at major restaurant chains today, may become more appealing budget-wise in the near future, due to global food safety concerns.
Howard wrote in a note on Tuesday:
"The African Swine Fever situation in China could drive global meat prices up sharply, across pork, beef and chicken. As this price escalation plays out, it seems likely that the relative price of plant-based burgers will start to look relatively less expensive, which could also boost demand over the next couple of years."
Beyond Meat priced its initial public offering at $25 a share on Wednesday, and raised at least $240 million at an initial valuation slightly shy of $1.5 billion. The company has notched the best IPO performance of 2019 to date, with shares up more than 220%.
VIDEO5:2105:21The future is plant-based, says former Whole Foods co-CEOSquawk Alley
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6d3a7d7bbe14b67c84a9e1869cb8cc98 | https://www.cnbc.com/2019/05/09/royal-baby-archie-faces-a-complicated-tax-situation.html?__source=fincont&par=fincont | Royal baby Archie faces a complicated tax situation | Royal baby Archie faces a complicated tax situation
DOMINIC LIPINSKI | Getty
It's official: Baby Sussex has greeted the world and the royal family. And he will eventually have to say hello to Uncle Sam.
The first child of the Duke and Duchess of Sussex — Archie Harrison Mountbatten-Windsor — made his world debut on Monday and his first public appearance on Wednesday.
Because the baby was born to an American mother, that also makes him an American citizen.
And being an American — regardless of where you live in the world — also comes with a tax bill because the U.S. is one of the few countries that tax people on citizenship, not residency.
For young Archie, that will mean a unique situation — and possibly a key decision when he's old enough as to whether or not to keep his American citizenship.
VIDEO1:1101:11Prince Harry and Meghan Markle welcome their first childNews Videos
For babies born outside of the United States, one parent has to be an American citizen. But there are other requirements. The American parent has to have lived in the U.S. or one of its territories for at least five years before the baby's birth. At least two of those years have to have been after age 14.
Archie, like all Americans abroad, will be required to disclose income and assets of a certain level to the IRS.
That holds if individually he has at least $12,000 in income, or more than $400 in self-employed income, according to David McKeegan, co-founder of Greenback Expat Tax Services.
Under U.S. rules, he will also have to disclose if he receives gifts of cash or stock or has assets over $10,000. The Foreign Account Tax Compliance Act also requires foreign institutions to disclose information on U.S. citizens' accounts.
"It will really depend on how the baby earns money or how money is given to the child what kind of tax reporting situation it would have," McKeegan said.
VIDEO4:1704:17Here's what it costs Americans to leave the U.S.Digital Original
The royal family may have already taken steps to address this situation.
"They probably have already set up trusts that keep the assets out of the child's name," said Dean Hedeker, principal of Hedeker Wealth.
However, Archie will still have to disclose to the IRS the income he receives from foreign trusts, Hedeker said.
Gifts may also have to be disclosed. If the queen gave the child cash or another present worth more than $100,000, that would have to be reported to the IRS.
As Archie, who does not have a royal title, grows older and his financial situation gets more complicated, he could face additional costs.
If he sells his primary home in the U.K., that is not taxed in that country. But that same transaction would be subject to levies by the U.S.
One thing that could work in his favor is foreign tax credits, which give you credit for the foreign taxes paid on worldwide income.
If the taxes in the U.K. are higher, that could offset what he owes to the United States. "Assuming the U.S. rate is lower, it's just going to be an exercise in shuffling paper," Hedeker said.
But he will face a lifelong commitment to filing with the IRS. And the penalties can be steep if you neglect to file.
If those requirements become too cumbersome or the tax costs too expensive, Archie could decide to renounce his citizenship, like more Americans living abroad are doing.
More from Personal Finance:Here's how tax refunds look compared to last year More Americans are considering cutting their ties with the US Meghan Markle's tax bill gets a lot more complicated
He will have to be at least 16 to make that decision, according to the State Department.
If he does renounce, he will pay a fee, which is currently $2,350.
He will also face an exit tax on all of the assets he owns on the day of expatriation.
"The value of [his] U.S. passport would have to be such that it's more valuable than the trouble it takes to remain compliant," said attorney Doug Andre, partner at Ivins, Phillips & Barker.
For the royal baby, dual citizenship may be just an inconvenience. But for ordinary individuals living overseas, the financial consequences can be severe.
"Keeping a U.S. passport has a cost, especially if you don't live here and travel frequently," Andre said. "The cost may be prohibitive for some people."
That has some expatriates hoping that this high-profile birth will help prompt change to the onerous tax rules for Americans living abroad, McKeegan said.
"It's unlikely that U.K. government wants the person who's seventh in line from the throne to be hit with taxes from the IRS," McKeegan said.
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1894a613710d7c2f290f3d50b9e6646a | https://www.cnbc.com/2019/05/09/samsung-galaxy-fold-launch-date-to-be-determined-soon.html?__source=sharebar%7Ctwitter&par=sharebar | Samsung says it will soon decide the fate of its $2,000 folding phone | Samsung says it will soon decide the fate of its $2,000 folding phone
Samsung's Galaxy Fold screen is broken after just two days of use. This phone costs $2,000.TodD Haselton | CNBC
Samsung will soon decide when to launch the company's first foldable phone, the Korea Herald said Thursday.
"(Samsung) has reviewed the defect caused from substances (that entered the device), and we will reach a conclusion in a couple of days (on the launch)," Samsung's mobile chief Dong-Jin Koh said, according to the Korea Herald.
A Samsung spokesperson told CNBC that the company will announce a new release date in the "coming weeks," however, suggesting Samsung's decision won't be made immediately public.
Samsung's Galaxy Fold was sent to tech reviewers ahead of its initial April 26 launch date. But the phone broke for multiple news outlets, including CNBC, during a testing period. Samsung said a hinge that protects the folding display was not protected enough and that it is working to make sure elements can't touch the screen or get behind it, as appears to have been the case for some broken units.
Some reviewers peeled a plastic layer off the top of the foldable phone, which caused it to break. Samsung is also working on making messaging clearer so that consumers don't remove the film.
Samsung said earlier this week that it will automatically cancel all preorders if it is unable to ship the phone by May 31 and unless customers express continued interest in buying the phone. Customers aren't charged until it ships, but the earlier comments had suggested Samsung wasn't sure when the phone would relaunch.
Read more on the Korea Herald.
VIDEO0:3300:33We tried to review the new Samsung Galaxy Fold — but it broke after two daysTech Guide
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5996e964c688e1d0dc0473f902b3337f | https://www.cnbc.com/2019/05/09/trump-very-surprised-by-subpoena-of-donald-trump-jr.html | Trump 'very surprised' by subpoena of Donald Trump Jr. | Trump 'very surprised' by subpoena of Donald Trump Jr.
US President-elect Donald Trump along with his son Donald, Jr., arrive for a press conference at Trump Tower in New York, as Allen Weisselberg (C), chief financial officer of The Trump, looks on.Timothy A. Clary | AFP | Getty Images
President Donald Trump on Thursday said he was surprised to learn that his eldest son, Donald Trump Jr., has been subpoenaed to testify before the Senate Intelligence Committee about his contacts with Russians during the 2016 presidential campaign.
"I was very surprised," Trump told reporters at the White House, noting that he had recently seen Republican Senate Intelligence Committee Chairman Richard Burr, R-N.C., say, "there was no collusion."
"My son is a very good person, works very hard," Trump continued. "The last thing he needs is Washington, D.C. I think he'd rather not ever be involved."
"He's now testified for 20 hours or something, a massive amount of time," Trump said. "The Mueller report came out, and that's the bible, and they said he did nothing wrong."
That's not what the Mueller report said, however. Trump's eldest son declined to speak voluntarily to Mueller and his team.
But the testimony Trump Jr. gave to various congressional committees about the 2016 meeting came under scrutiny after former Trump campaign aide Rick Gates gave a conflicting account under oath about what happened in the days leading up to the meeting.
Trump Jr. testified that he spoke about the meeting in advance to just two people: his brother-in-law, Jared Kushner, and Paul Manafort, Trump's then-campaign chairman.
But according to the published Mueller report, Gates testified that Donald Jr. told a much larger group of Trump family members and campaign staff at a regular morning meeting that "he had a lead on negative information about the Clinton Foundation." According to Gates, "Trump Jr. said the information was coming from a group in Kyrgyzstan and that he was introduced to the group by a friend."
On Thursday, the president defended the premise of the now infamous meeting. "The only thing is, it's oppo research," Trump said. "It was a nothing meeting," he added, before going on to describe what he claimed were suspicious circumstances under which the meeting was arranged.
"My son is a good person. My son testified for hours and hours. My son was totally exonerated by Mueller, who, frankly, does not like Donald Trump, me, this Donald Trump," the president continued.
"And frankly, for my son, after being exonerated to now get a subpoena, to go again and speak again, after close to 20 hours of telling everybody that would listen about a nothing meeting? Yeah, I'm pretty surprised. I'm just really surprised," he said.
Asked whether Trump Jr. should fight the subpoena, Trump avoided a yes or no answer. "Well, we'll see what happens," he said. "I'm just very surprised, I really am."
This is a developing story. Please check back for updates.
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9f9b53429de4b6247a8e8afc07a83aee | https://www.cnbc.com/2019/05/10/how-viagra-revolutionized-the-erectile-dysfunction-market.html?&qsearchterm=erectile%20dysfunction%20supplmentes | How Viagra revolutionized the erectile dysfunction market | How Viagra revolutionized the erectile dysfunction market
The erectile dysfunction market isn't as lucrative as it once was, but that hasn't mattered much to Pfizer.
The New York-based pharmaceutical giant is holding a strong share in the ED drug marketplace even as competition from generic drugmakers consumes sales of its once-blockbuster male libido treatment, Viagra.
The medication, originally developed with the intention of treating high blood pressure in adults, became a hit for males struggling in the bedroom and Pfizer when it was introduced to the U.S. market in 1998. In its first quarter, Viagra brought a total of $400 million in revenue for Pfizer and would later produce annual sales of about $1.8 billion.
An estimated 1 in 10 men are affected by erectile dysfunction, or ED, according to the Cleveland Clinic. Viagra was the first noninvasive treatment for male impotency and opened up a previously undiscussed dialogue between men and their doctors about sexual health.
Nearly 21 years later, sales of the brand-name drug have dropped. Pfizer lost exclusive rights to the drug in December 2017, bringing with it a flood of generic versions. U.S. sales of "the little blue pill" declined 73% year over year in 2018 from $789 million to $217 million, Pfizer said in its fourth-quarter earnings report, as generics entered the market.
Despite generic competition from other drugmakers, Pfizer has been able to maintain a significant market share thanks, in part, to launching its own generic version of the blue, diamond-shaped pill.
In late 2017, Pfizer announced it would produce a generic version, called sildenafil, at half the cost of the brand name. The company also said at the time it would offer new discount programs and increase its copayment card discounts to make the brand version more accessible to patients.
According to GoodRx, 65% of ED prescriptions filled from Dec. 1, 2018 to Jan. 31, 2019, were for Viagra or its generic version. Thirty percent of prescriptions were for rival Cialis and its generic, tadalafil. Levitra and generic vardenafil came in third at 5 percent of the market. A year prior, Viagra held only 51 percent of the market, with Cialis coming in at second at 45 percent.
Additionally, the gap between prescriptions filled for brand name versus generics is large. Ninety percent of the prescriptions filled over that same two-month time period were for Pfizer's generic version, while only 10% prescribed were for the brand name, according to GoodRx.
"The data can't explain the reason behind why people take the generic over the brand, or vice versa," said Tori Marsh, data and content manager at GoodRx. "But since generic Viagra is more affordable than the brand it's likely that cost is a factor here."
Marsh added most health insurers require that members be prescribed a generic when there is one available, and that pharmacies dispense the generic.
The rise of health tech start-ups, which allow patients to bypass their doctor and buy medication online, may also be keeping patients loyal to the brand-name drug.
For example, direct-to-consumer men's health brand Roman is removing middlemen such as drugstores and allowing customers to buy ED meds online.
Pfizer also allows customers to buy Viagra from its website.
The proliferation of virtual platforms may be leading to an increase in purchasing medications online, said Dr. Anupam B. Jena, an economist and physician at Harvard Medical School. "It's interesting in that it dramatically reduces the stigma of buying a prescription."
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aad6e23b35d77fdac4c6bff87ab132e3 | https://www.cnbc.com/2019/05/10/this-16-year-old-is-working-on-tech-to-control-devices-with-our-minds.html | Why Elon Musk, MIT and a 16-year-old inventor are going after mind-reading technology | Why Elon Musk, MIT and a 16-year-old inventor are going after mind-reading technology
Merging the human brain with a computer would change our species forever. Researchers are developing technology that can transfer data between computers and our brains. It could even read people's minds.
For now, we have the power to detect brain waves and track electrical pulses within the neurons in our brains. Researchers are using this information to aid the differently abled and make life easier for everyone. Among these researchers is 16-year-old Alex Pinkerton.
In the 1970s, the Defense Advanced Research Projects Agency first starting funding brain-computer interface research. That market is expected to reach a value of $1.72 billion by 2022, according to Grand View Research.
Big players like Elon Musk and Facebook have teased their entrance into the market, while other companies are showing their work in action. CTRL Labs created a wristband that measures electrical pulses from the brain to the neurons in a person's arm, allowing them to control a computer. And new and exciting research is pouring out of universities like MIT and the University of California in San Francisco.
It may be decades before we're able to transmit our complex thoughts into data through a computer, but watch the video to learn how a 16 year old is using graphene to bring us closer to that reality.
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9d1b8b5815e96bcb60b2a652dbf0d7d5 | https://www.cnbc.com/2019/05/13/bed-bath-beyond-ceo-steven-temares-steps-down.html?__source=OTS%7Cfinance%7Cinline%7Cstory%7C&par=OTS&doc=106830958 | Bed Bath & Beyond CEO Steven Temares steps down 'immediately' and resigns from board | Bed Bath & Beyond CEO Steven Temares steps down 'immediately' and resigns from board
VIDEO3:2203:22Having three activists come together to take over a company is unusual, says Okapi Partners CEOSquawk Box
Bed Bath & Beyond announced Monday that CEO Steven Temares is stepping down, "effectively immediately," as activist investors push for changes at the retailer.
It said Mary Winston, who was recently named to the board, will serve as interim CEO until a replacement is found. The company said Temares is also resigning from Bed Bath & Beyond's board.
Winston has held various roles in retail, including serving as CFO at Family Dollar Stores. She also was CFO at Scholastic, and she's currently president at WinsCo Enterprises, a financial and board governance consulting firm, in addition to being a board member at Acuity Brands, Domtar and Dover.
Bed Bath & Beyond shares jumped more than 3% in premarket trading following the news but were last down more than 6%. The stock has gained nearly 35% this year, with many of those gains coming after a trio of activists revealed their stake in the company. Shares are still down about 10% over the past 12 months.
Big-box rivals like Target and Walmart, meantime, have fared better within the past year: Walmart shares are up nearly 20% from a year ago, while Target shares have climbed a little more than 2%.
Bed Bath & Beyond, faced with pressure from activist investors Legion Partners Asset Management, Macellum Advisors and Ancora Advisors, recently appointed five new independent members to its board, including Winston. The activists had been pushing to replace the entire board and to oust Temares as CEO.
Temares has been CEO since 2003 but had held various other roles at the company for nearly three decades. He has been criticized for not doing enough to get the retailer out of its sales slump.
"The board determined that now is the right time to identify the next generation of leadership," said Patrick Gaston, independent chairman of the retailer's board.
Bed Bath & Beyond, with more than 1,000 stores across the U.S. and Puerto Rico, has been struggling to grow sales as more shoppers head online to platforms like Amazon. It laid off nearly 150 people in March, which also impacted its Christmas Tree Shops business, a discount home decor chain it acquired in 2003.
The company also said Monday that Andrea Weiss, a recent appointment to the board, will head the retailer's Business Transformation and Strategy Review Committee, "which will be responsible for ensuring that all aspects of the Company's ongoing business transformation are addressed." Weiss has held executive leadership roles at other retailers including The Limited, Guess and Ann Taylor Stores.
"As we continue to review our business initiatives, we will be focused on driving continued margin improvement, enhancing the in-store and online experience, and accelerating our transformation to the benefit of our shareholders, customers and other stakeholders," Winston said in a statement.
Bed Bath & Beyond said it's formed an independent search committee to find a replacement CEO and it hired an executive search firm to help in that process.
Telsey Advisory Group analyst Cristina Fernandez called the news a "positive development" for stockholders and "a sign that more meaningful change is underway."
"We believe the CEO transition creates an opportunity for the board to choose a leader with a vision for competing more effectively in today's consumer environment and experience with omnichannel retailing, developing private label brands, and creating immersive store experiences," Fernandez said in a research note.
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4fa625d7e7464087b2ad749a8fe30a6d | https://www.cnbc.com/2019/05/13/china-is-raising-tariffs-on-60-billion-of-us-goods-starting-june-1.html | China is raising tariffs on $60 billion of US goods starting June 1 | China is raising tariffs on $60 billion of US goods starting June 1
VIDEO3:3403:34Stocks plunge on China tariff retaliation — Here's what six experts say to watchTrading Nation
China will raise tariffs on $60 billion in U.S. goods in retaliation for the U.S. decision to hike duties on Chinese goods, the Chinese Finance Ministry said Monday.
Beijing will increase tariffs on more than 5,000 products to as high as 25%. Duties on some other goods will increase to 20%. Those rates will rise from either 10% or 5% previously.
The move follows President Donald Trump's decision to raise duties on $200 billion in Chinese products to 25% from 10%. The world's two largest economies have struggled to sign a trade deal and end a widening conflict that threatens to damage the global economy.
The latest shot in the trade war rattled investors. Major U.S. stock indexes dove more than 2% Monday amid the escalation.
Soybean meal in a dockyard in Nantong in east China's Jiangsu province, Aug. 06, 2018.Feature China | Barcroft Media | Getty Images
The duties in large part target U.S. farmers, who largely supported Trump in 2016 but suffered from previous shots in the Trump administration's trade war with China. The thousands of products include peanuts, sugar, wheat, chicken and turkey.
On Monday, Treasury Secretary Steven Mnuchin told CNBC that the sides are still involved in negotiations. He said the administration is working on dates to travel to Beijing to continue talks.
Neither the White House nor the Treasury Department immediately responded to CNBC's requests to comment on the tariff increase.
In increasing duties on Chinese goods on Friday, the White House said Beijing backed out of major parts of a developing trade agreement. While Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer met with Chinese negotiators last week in talks Mnuchin called "constructive," the sides could not strike a deal.
Trump, who wants to address grievances such as intellectual property theft, forced technology transfers and trade deficits, pushed China to make a deal ahead of its retaliation on Monday morning. In a string of tweets, the president argued the tariffs are "very bad for China." He said "China should not retaliate" as it "will only get worse!"
"You had a great deal, almost completed, & you backed out!" he wrote of China and its President Xi Jinping.
Trump tweet: I say openly to President Xi & all of my many friends in China that China will be hurt very badly if you don't make a deal because companies will be forced to leave China for other countries. Too expensive to buy in China. You had a great deal, almost completed, & you backed out!
The U.S. may not be done retaliating. Trump has threatened to put 25% tariffs on $325 billion in Chinese goods that remain untaxed. The president has signaled he is content leaving the duties in place, arguing they will damage China more than the U.S.
The president has repeatedly claimed China bears the brunt of the costs from the tariffs. But the burden falls largely on U.S. businesses and consumers.
VIDEO8:5208:52We can't allow for short-term thinking to get in the way of standing up to China, says proSquawk Box
Pressed Sunday during a Fox News interview about Americans paying the tariffs, Trump's top economic advisor Larry Kudlow responded, "Fair enough. In fact, both sides will pay."
Despite this, Trump claimed in a tweet Monday that "there is no reason for the U.S. Consumer to pay the Tariffs." He also said the tariffs "can be completely avoided if you by (sic) from a non-Tariffed Country, or you buy the product inside the USA (the best idea)."
The U.S. hopes to revive discussions as it tries to reach a deal. On Sunday, Kudlow said there is a "strong possibility" Trump will meet with Xi during the G-20 summit in Japan next month.
— CNBC's Stephanie Dhue, Kevin Breuninger and Tucker Higgins contributed to this report
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9238b861c7e9e4ebabc35d6bf9bf24b1 | https://www.cnbc.com/2019/05/15/san-francisco-facial-recognition-ban-may-give-you-wrong-impression.html?__source=fincont&par=fincont | San Francisco facial recognition ban may leave wrong impression. Millions are getting scanned, even paying for it | San Francisco facial recognition ban may leave wrong impression. Millions are getting scanned, even paying for it
Opponents of facial recognition technology scored a victory this week when San Francisco voted to ban use of the biometric security technique in law enforcement. But don't let that leave you with the impression that the U.S. public is raising its eyes rather than lining up to have their bodies scanned.
CLEAR, a biometric security company that many travelers are coming across in airports, is experiencing its most rapid growth, the CEO of the company told CNBC on Wednesday. It took CLEAR seven years — and one acquisition out of bankruptcy — to get to its first 1 million subscribers. In the past eight and a half months, Clear has added another 1 million members; the 1 million users before that most recent growth spurt — which brings the company to a total biometric base of 3 million — came in a period of just under one year.
"So that's the hockey stick you map out when you start a company," said CLEAR CEO Caryn Seidman Becker, referring to the shape of the growth curve. "It's happening."
The New York City-based company, which launched in 2010, uses biometrics (your fingerprint, the iris of your eyes, your face) for identity verification. CLEAR ranked No. 22 on the 2019 CNBC Disruptor 50 list.
Meet the 2019 CNBC Disruptor 50 companies
Seidman Becker said that while airport security is the use case that most people know for its $180-per-year service, CLEAR has expanded into additional ID replacements, and there will be more from retail and gaming to health care.
In August, CLEAR launched a biometric payment and age validation service.
The company already handles biometric beer sales in Seattle sports venues, including Seahawks and Mariners games. "Your fingerprint are your age and credit card," she said.
Fans at Seattle's CenturyLink Field and T-Mobile Arena also can buy food with the tap of a finger, which the company said is the first biometric replacement for a government-issued ID in the U.S.
The company has its eye on e-cigarettes and online gaming. "Age validation in e-cigarettes and beer and online gaming ... is crucial to creating safe experiences. We think there are huge opportunities there. ... We believe any place where you are whipping out a wallet and taking out a card to prove that you are you is a place where CLEAR has big opportunities," Seidman Becker said.
North Carolina's Attorney General sued e-cigarette maker Juul on Wednesday, the latest move in an escalating battle between the company and regulators, including the FDA, which has cracked down on sales of e-cigarettes to minors through retail stores where lax identification procedures have helped contribute to what the federal government has called an "epidemic" of teen e-cigarette use.
A look back at the CNBC Disruptor 50: 7 years, 184 companies
CLEAR is approved by the U.S. government as a qualified antiterrorism technology with the Department of Homeland Security.
In response to the San Francisco ban on facial recognition technology by law enforcement, announced this week, the CLEAR CEO said that the company starts with the premise that biometrics makes homeland security safer and the customer experience safer and better.
"People now expect a frictionless experience," Seidman Becker said. "Outside the airport, you can call an Uber or Lyft without waiting for a taxi. It's that feeling of control."
As for health care, she did not outline specific plans, but expressed a frustration of many patients with the current verification and enrollment process. "Think about health care and the clipboard. Why the clipboard?"
In addition to its existing facial recognition, and iris and fingerprint scanning, CLEAR thinks voice recognition will be next in biometric security. "We think voice is coming," she said.
As the public embraces more passive forms of biometric screening, like facial recognition and voice — versus fingerprints, for example — Seidman Becker said it is really important that customers opt in and know exactly what they are opting in for and where their data will be.
The type of facial recognition technology that CLEAR offers requires the consumer to enroll and engage with one of the company's pods, different from the case of law enforcement capturing images of a person walking down the street who has not consented. The only place CLEAR has introduced facial recognition to date is at seven Hertz rental car agencies, and only after the consumer opts in.
Because it is reviewed by federal agencies, CLEAR encrypts data at a high level of cybersecurity, she said.
Certification as a qualified anti-terrorism technology by the U.S. Department of Homeland Security includes an evaluation of CLEAR's overall security program, and the Transportation Security Administration (TSA) also determined that its biometric identity systems meet FISMA (Federal Information Security Management Act) HIGH compliance requirements for protecting sensitive data.
"The fact that we are a qualified anti-terrorism technology with Homeland Security means we have built everything focused on security from day one," Seidman Becker said, but she stressed that even before federal reviews were being conducted the company worked with the idea that its "DNA" required building trust in its privacy measures.
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050913e8056cf845fdd0a1c2324d56ff | https://www.cnbc.com/2019/05/16/steam-game-streaming-app-debuts-on-iphone-and-ipad-a-year-after-controversy.html?__source=yahoo%7Cfinance%7Cheadline%7Cstory%7C&par=yahoo&yptr=yahoo | Game-streaming app Steam debuts on iPhone and iPad, a year after controversy | Game-streaming app Steam debuts on iPhone and iPad, a year after controversy
Tim Cook, chief executive officer of Apple Inc., speaks during the Apple Worldwide Developers Conference (WWDC) in San Jose, California, U.S., on Monday, June 4, 2018. David Paul Morris | Bloomberg | Getty Images
Steam Link, a free app that enables gamers to play PC games on mobile devices, is now available to download on Apple's platforms, including the iPhone, iPad, and the Apple TV.
The introduction of Steam Link on Apple devices is a surprise after an episode in May 2018 in which Valve, Steam's parent company, publicly said that Apple's App Store had rejected the app for "business conflicts."
Steam Link uses the processing power of a desktop or laptop PC to stream graphically-intensive games purchased on Steam to mobile devices or set-top boxes over a home network.
Games are a major component of Apple's App Store, and Steam is essentially a cross-platform app store for PC games. App Store rules allow Apple to reject any app that includes a distribution platform for apps, but last summer, Apple updated its guidelines to enable mirroring services like Steam Link, as long as purchases are made on the desktop.
"We would love for Valve's games and services to be on iOS and AppleTV," Apple's senior vice president for marketing, Phil Schiller, said in an email to some customers last May. "Unfortunately, the review team found that Valve's Steam iOS app, as currently submitted, violates a number of guidelines around user generated content, in-app purchases, content codes, etc."
Steam Link has been available for Android users in beta since last year. In March, Apple announced Apple Arcade, a subscription service of Apple-backed games for iPhones and other Apple devices.
The Steam Link app requires a 5Ghz wi-fi network or a wired ethernet connection. It supports the Steam controller, as well as controllers made for iPhones and iPads, the company said in a statement.
Apple didn't immediately return a request for comment. A Valve representative did not specify if any changes have been made to the Steam Link app in order to secure Apple's approval.
VIDEO3:4703:47How Alibaba and Apple could see an impact from the US-China trade warSquawk Alley
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bccab409b0fdaffdf37abb0f416dc30f | https://www.cnbc.com/2019/05/20/biotech-ipo-performance-pokes-holes-in-silicon-valleys-theory-for-waiting-so-long-to-go-public.html | Silicon Valley says Wall Street doesn't get its long-term focus, but that theory doesn't hold up | Silicon Valley says Wall Street doesn't get its long-term focus, but that theory doesn't hold up
AlexRaths | Getty Images
Start-ups' fears of being strong-armed to focus on short-term profits is one reason some are opting to stay private. But those fears may be overblown, if the historical performance of money-losing biotechs is any indication.
Much like consumer tech companies going public in 2019 — biotech companies rarely make money going into their stock-market debuts. Public-market investors have historically embraced them anyway.
Between 2001 and 2017, only 6% of biotech companies were profitable at the time of their initial public offering, according to analysis by Jay Ritter, finance professor at the Warrington College of Business at the University of Florida. Yet, during the same time frame the average three-year buy-and-hold return for more than 350 biotech companies that went public was 36.3% — beating the market by 14.0%.
"We've had hundreds of biotech companies going public in recent years where everybody knows that they're not going to have any revenue from product sales for years," Ritter told CNBC. "And there's no pressure for them to cut their short term losses — as long as they've got viable scientific research."
For the biotech firms that went public between 1980 and 2017, on average, they rose 12.1% on the first trading day, according to Ritter's analysis. Over the next three years, they then returned an average of 25.7%. While biotech IPOs still under-performed the broader market by 6%, they fared better than the average IPO. Public offerings in general under-performed broader markets by 19% in the 3 years after listing.
"I think a lot of it is talk rather than actual evidence that if a company doesn't achieve short-term profitability quickly, corporate raiders and activist investors swoop in and boot out management," Ritter said. "I just don't see a lot of evidence of that occurring."
The nation's top tech investors have voiced frustration about the public market's focus on near-term profits. A new Silicon Valley stock exchange, backed venture capitalist Marc Andreessen among others, was approved earlier in May. According to its website, the mission is to provide a "market that reduces short-term pressures and encourages a steady cycle of innovation and investment in long-term value creation would benefit companies and their investors alike."
Firms listed on the so-called LTSE may be required to abide by certain rules, like a potential ban on tying executive pay to the short-term financial performance.
Last year, more than 85 percent of tech companies that went public had negative earnings per share, according to Ritter's analysis. This year, Uber and Lyft were the poster children for that money-losing business model.
Uber, the biggest IPO since Alibaba, reported an operating loss of $3 billion in 2018 after losing more than $4 billion the previous year. Its ride-hailing rival Lyft reported a net loss of about $1 billion last year. Its adjusted loss per share was $9.02 for the first-quarter. Shares of Uber have been under pressure since listing in May but have recovered most of those losses. The stock is down about 2% since listing in May, while Lyft has dropped by 25% since its IPO.
Billionaire investor Mark Cuban, and owner of the NBA's Dallas Mavericks, told CNBC last week that Uber's disappointing debut was "not a surprise" because the ride-hailing company waited too long to go public.
"I just think we're seeing a reflection of the Silicon Valley ethos in the public market. The whole attitude was wait, wait, wait, wait, wait," Cuban said.
Cuban said by waiting, they lost the momentum early companies typically have. Cuban invested $1 million in Uber's main competitor Lyft, which Cuban said also stayed private too long.
"They just waited too long," Cuban said. "I don't think you could have expected anything different ... the reality is you're nine years in and you're still having to buy your revenue. That's not a good sign."
There are a few reasons these companies are staying private longer. A decade-long, low-interest rate environment has forced investors to look for returns elsewhere. And in 2012, the JOBS Act raised the threshold of private shareholders from 500 to 2,000, allowing companies to stay private until they reach that limit.
But the key reason they're able to stay private is because of a seemingly endless honey pot of venture capital and private equity money. Softbank — Uber's biggest investor —has flooded private markets with billions in funding. Its $100 billion Vision Fund has deployed about $80 billion in capital. That in turn has pushed valuations to record highs.
"SoftBank's size is unprecedented and it surely contributes to visibility and validation of high-valuation late-stage private financing," said Yale School of Management Associate Dean Kyle Jensen. "Because of the enormous amount of private capital available, most companies can stay private longer."
However, Jensen said these start-ups will continue to face pressure to go public from employees who see the bulk of their net worth locked up in stock and options that would be easier to liquidate if the company were public.
As demand increases, prices for these private companies are steadily rising. The average valuation for venture-capital backed companies is up to $260 million in 2019, according to data from PitchBook. That's more than double the value from 2011, and more than 8 times what these companies were valued in 2002. The total deal count also jumped to 3,718 last year — a 370% rise from 2002, according to PitchBook's data.
Source: PitchBook
Price to sales ratios, which are calculated by taking a company's market capitalization and dividing it by the company's total sales or revenue over the past year, are also on the rise. By that metric, prices have more than doubled for these companies since 1980, according to Ritter's analysis.
To be sure, biotech's business model is starkly different from ride-hailing, social networks, or software companies. The reason they're unprofitable often has to do with regulatory approvals. They can't make money on new drugs until they're approved by the U.S. government agencies.
They often feel the heat to go public for different reasons — like needing to raise money for those expensive clinical drug trials. Historically, the biotech sector has also been a gamble. Investors bid up the Nasdaq Biotechnology Index in the late 1990s, only to see it lose half of its value in 2000.
Regardless of the industry, Ritter said investors are still eager to pay for future profits.
"I think it is pretty clear that both private market investors and public market investors are willing to to fund growth in companies and have them focus on growth rather than short-term profitability — provided there's a story there that continues to make sense," he said.
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335f369e24685378b34124d0db9b6893 | https://www.cnbc.com/2019/05/20/ford-to-cut-7000-jobs-by-august-including-900-this-week.html?sfns=mo | Ford to cut 7,000 jobs by August, including 900 this week | Ford to cut 7,000 jobs by August, including 900 this week
VIDEO2:5502:55Ford announces job cuts as part of its workforce redesignSquawk on the Street
Ford Motor said Monday that it is laying off about 7,000 managers and other salaried employees, about 10% of its white-collar workforce across the globe, as part of a restructuring plan designed to save the No. 2 automaker $600 million annually.
The cuts, some of which were previously announced by the company, will be completed by August, Ford CEO Jim Hackett said in an email to employees Monday. Most of the reductions are overseas with roughly 2,300 of the job cuts coming from the United States. A company spokesman said 1,500 of the 2,300 U.S. job cuts were voluntary buyouts from last year.
This round of layoffs won't impact Ford's hourly factory workers. The company had roughly 199,000 employees across the world at the end of last year, about 3,000 less than the previous year, according to a securities filing.
Hackett said approximately 20% of upper-level manager jobs will also be eliminated as the company moves to reduce bureaucracy.
The job cuts include voluntary buyouts and involuntary layoffs. About 900 of the 7,000 job cuts are expected to happen this week, 500 of which will be in the U.S. The remaining 300 U.S. layoffs will be complete by the end of August. The Michigan-based automaker said its restructuring in North America is almost complete and that it will continue its organizational redesign in Europe, China, South America and other international markets until the end of August.
"To succeed in our competitive industry, and position Ford to win in a fast-changing future, we must reduce bureaucracy, empower managers, speed decision making, focus on the most valuable work, and cut costs," Hackett said in the letter.
The company had previously announced it planned to cut its European workforce, saying in January that it planned to eliminate thousands of jobs in Europe as it faced pressure to restructure its European operations. A company spokesman said Monday that there is overlap between the job cuts announced Monday and the various restructuring announcements the company has made in the past, though he would not specify how many job cuts overlapped.
Read Hackett's letter to Ford employees here:
— CNBC's Phil Lebeau and Reuters contributed to this report.
Correction: This article was updated to reflect that Ford is cutting about 10% of its white-collar employees, not 10% of its total global workforce.
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3daaea3bac8989f17055577cabd3e1cf | https://www.cnbc.com/2019/05/20/microsoft-xbox-moderation-to-cut-back-toxic-content.html | Microsoft announces Xbox content moderation to cut back on toxic comments | Microsoft announces Xbox content moderation to cut back on toxic comments
Mikaila Ulmer, left, and Microsoft CEO Satya Nadella speak onstage at We Day at KeyArena in Seattle on April 20, 2016. in Seattle, Washington.Mat Hayward | We Day | Getty Images
As Facebook, YouTube, Twitter and other social platforms come under fire for enabling hateful speech, Microsoft is stepping up to thwart toxic comments among its 63 million Xbox live users.
Gaming is not Microsoft's highest-priority market — cloud infrastructure and productivity applications are more crucial to its business — but the segment generated 10% of the Microsoft's revenue last quarter. And the company is continuing to invest in its Xbox business as it moves away from other consumer markets, like wearables and music streaming. Microsoft needs to make sure Xbox players don't hear or see content that might turn off users, or scare younger players away.
Microsoft is making these moves after the ascent of the Gamergate controversy, which led to people harassing and making threats against women.
The changes follow Microsoft's recent update to its Xbox "community standards" for gameplay, which pointed out several practices that aren't acceptable. Now it's taking that a step further with moderation tools.
"This summer, we are empowering our official Club community managers with proactive content moderation features that will help create safe spaces for fans to discuss their favorite games," Microsoft's executive vice president of gaming, Phil Spencer, said Monday. "We plan to roll out new content moderation experiences to everyone on Xbox Live by the end of 2019." Xbox Live has 63 million monthly active users, and the service includes groups where people can post content and submit comments, along with chat rooms.
"The gaming community continues to grow rapidly, and the imminent roll-out of new game services such as Apple Arcade, Google Stadia and Microsoft's Project xCloud will make gaming available to even more people worldwide," Spencer said. "Our industry must now answer the fierce urgency to play with our fierce urgency for safety."
Last week, Microsoft said it is working with Sony, whose PlayStation has long competed with Xbox, to figure out how Microsoft's Azure cloud can become part of Sony's architecture for game and content streaming. And Microsoft will soon begin to publicly test Project xCloud, a system for streaming games to mobile devices, that may bring more even gamers into its ecosystem.
WATCH: Here's how one trader is playing Microsoft's recent pullback
VIDEO3:4303:43Here's how one trader is playing Microsoft's recent pullbackTrading Nation
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99b51d7d8a80f5c8dd50223ad72e6585 | https://www.cnbc.com/2019/05/20/this-is-how-beyond-meat-could-dominate-the-market-in-10-years.html | This is how Beyond Meat could dominate the market in 10 years | This is how Beyond Meat could dominate the market in 10 years
VIDEO3:4703:47This is how Beyond Meat could dominate the market in 10 yearsTrading Nation
Beyond Meat is burning red hot since its market debut earlier this month.
The alternative-meat producer has roared 260% higher since its May 2 IPO, far better than other recent floats from Pinterest, Levi Strauss, Lyft and Uber.
Alexia Howard, senior research analyst at Bernstein, is one of the few to cover the stock and says the bullish case is clear in the consumer demand.
"These plant-based burgers that have come onto the market in the last couple of years, they're really doing very well in the marketplace," Howard told CNBC's "Trading Nation" on Friday. "Products like Beyond Meat and the Beyond Burger have really made it to the forefront, coming in with a perishable product, a chilled fresh burger that is now in the meat section of the store, so they're really targeting meat eaters here."
Strong growth in this relatively new product also has parallels to the milk industry, meaning years of expansion by tapping an untapped market, Howard said.
"As almond milk and hazelnut milk and other nut milk came onto the market about a decade ago, we really started to see a major acceleration in the growth rate of that whole category," Howard said. "It went from about 5% of the overall fluid milk market to about 15% today, and it's still continuing to gain share."
By that same logic, Howard said meat-alternative products could eat into the $270 billion U.S. meat market. She estimates that imitation products, which account for around $13 billion currently, could rise to $40 billion to $41 billion in the next 10 years.
Increased competition in the space could slow Beyond Meat's growth, but Howard says the size of the total addressable market is large enough for multiple producers to flourish.
"Beyond Meat is targeting the grocery stores, the Impossible Burger is targeting the restaurant segment at the moment. Over time, I think these pioneering companies are likely to retain some market share. I think there's going to be other players entering the market — Nestle and Tyson have already said they're going to throw their hat into the ring later this year," she said. "There's going to be a lot of opportunity for a number of players, I think, to do well here."
Beyond Meat and privately owned Impossible Foods have been snapping up fast food and casual restaurant chain supplier relationships to carve out market share. Pizza chain Little Caesars said Monday that it would test a meat pizza using Impossible sausage, while Tim Hortons said last week that they were launching Beyond breakfast sandwiches.
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410f8f0a1632aa417fe04090e2f026a5 | https://www.cnbc.com/2019/05/20/what-google-android-move-means-if-you-own-a-huawei-phone.html?fbclid=IwAR0gFt3qq176bMdiTcKgXcDyTX9jOEYM4oegicIYlVXf5T5hJj7R1d2s50o | Here's what Google's decision to cut ties with Huawei means if you own one of their phones | Here's what Google's decision to cut ties with Huawei means if you own one of their phones
VIDEO6:0006:00Chip stocks fall after Google restricts business with Huawei — Six experts on what's nextTrading Nation
Google has severed business ties with Huawei, in a stunning move that could threaten the smartphone maker's global ambitions.
The U.S. tech giant has decided to stop licensing its Android operating system to the Chinese telecommunications firm, in order to comply with a U.S. trade blacklist.
It can however continue to use an open-source version of Android, but won't be able to integrate key Google services like the Play app store.
CNBC runs through what that means if you own a Huawei phone right now, or are looking to buy one in the future.
Reuters reported Sunday that Huawei will now lose access to Android updates. That's pretty significant considering all Huawei phones operate on Android. The operating system powers more than 80% of the world's smartphones.
Huawei's new phones will also reportedly lose access to proprietary apps like the Google Play app store, Gmail and YouTube.
But Google said people with existing Huawei devices will still be able to use Google apps and download updates for them.
However the problem could be longer term. Peter Richardson, a research director of tech strategies at Counterpoint Research, told CNBC via email that Huawei will not have access to the new version of Android, code-named Q, that will be launched later in the year.
"The revocation of its Android license will mean that it won't be able to provide core Google services to its smartphones," Richardson said.
Huawei said in a statement that it will "continue to provide security updates" to all of its existing phones. Meanwhile, there's also talk of Huawei developing its own operating system for smartphones and computers.
Experts predict the impact will likely be limited in the short term. The consensus view is that anyone with a Huawei and Honor handset should be safe for now.
"The current devices will continue to support Google services and Google updates," Francisco Jeronimo, associate vice president for European devices at IDC, told CNBC by telephone. "I think it's more of a long-term impact than very short term."
VIDEO6:0406:04Google pulls Huawei's Android license as Chinese media ratchets up anti-US rhetoricSquawk Box
In China, the story is a little different. Consumers there have access to a more limited version of the operating system, which doesn't come pre-installed with Google services that are blocked there.
"For Chinese consumers, definitely there's no impact," Jeronimo says.
International shipments accounted for almost half of Huawei's overall smartphone sales in the first quarter, according to Canalys data.
For the most part, IDC's Jeronimo thinks the U.S. and China will reach a trade deal, and Google will be able to resume its licensing arrangement with Huawei. In that case, Huawei customers shouldn't be impacted.
However, "if this is a real security threat, then it's a long-term impact," he said. "The biggest impact will be end of the year for Huawei because that's the biggest sales season of the year."
Huawei is yet to launch its latest flagship phone, the Huawei Mate X, which will be its first foray into the world of foldable phones.
The bottom line? "This is bad news for Huawei," Richardson says, "which has been one of the strongest Android players."
The Shenzhen-based firm is the second-largest smartphone maker in the world, and the top globally when it comes to telecommunications equipment. But it's been under intense pressure from Washington amid the U.S.-Sino trade battle.
Most recently, the Trump administration added Huawei to a trade blacklist that blocks it from buying U.S. technology without special approval. And Google hasn't been the only company distancing itself from Huawei — top chipmakers Intel, Qualcomm, Broadcom and Infineon have also reportedly cut ties with the firm.
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fcbd01bf38b49471a3581bfa6c1dd3c4 | https://www.cnbc.com/2019/05/21/california-senate-passes-bill-to-create-state-chartered-cannabis-banks.html?fbclid=IwAR29jyLz6iEtInT1ZTvsUIluZ5dJp6g7BaDGpQ5bsJ6kd-NCURZHrDTrB_8 | California Senate passes legislation to create state-chartered cannabis banks | California Senate passes legislation to create state-chartered cannabis banks
Philip Cheung | The Washington Post | Getty Images
LOS ANGELES — The California Senate on Tuesday approved legislation to create state-chartered cannabis banks to help the industry get around restrictions on access to banking services.
Under the state legislation, which was approved by a vote of 35 to 1, private banks or credit unions can apply for a limited-purpose state charter so they can provide depository services to licensed cannabis businesses. The measure, Senate Bill 51, still requires approval of the Assembly and California Gov. Gavin Newsom to become law.
Marijuana businesses, including pot shops, are forced to deal predominantly in cash due to continued federal banking restrictions that make it nearly impossible for them to have bank accounts with federally chartered financial institutions. Passage in the nation's most populous state could add pressure on the U.S. Congress to legalize banking for the marijuana industry.
"It's hard to imagine an industry that at this point is as large as, like, craft beer that does not have banking as we have come to know it," said Steve Hawkins, executive director of the Marijuana Policy Project, a national marijuana reform organization. He said the legal marijuana industry lacks access to commercial banking services available to other industries, including payroll, loans and deposit needs.
"As policymakers, we have a duty to further the will of the voters while protecting the public safety of our constituents," California Senate Majority Leader Robert Hertzberg said last month when introducing SB 51. "This measure is by no means the ultimate solution, but it's just one small step in the right direction to get some of this money off the streets and into bank accounts."
The Democratic lawmaker's bill would set up special checks by pot businesses as a way to pay state and local taxes, fees and rent.
"It will improve commerce incrementally, but you won't be able to get a loan from one of these banks," said attorney Robert Selna of the Oakland, California-based firm Wendel, Rosen, Black & Dean. "It will help cannabis companies pay the rent, but how it corresponds with federal law is still a question."
Indeed, there also are questions about whether banks and credit unions in California will participate, given the potential for the U.S. government to crack down. Marijuana is still a Schedule I drug on the Controlled Substance Act and therefore illegal at the federal level.
"Congress will have to act because there's all the interstate ramifications of banking that just really cry out for federal lawmakers to do something in this space," said Hawkins.
In March, the House Financial Services Committee passed the Secure And Fair Enforcement Banking Act, which would protect banks and their employees that work with cannabis businesses.
Last week, the National Association of State Treasurers issued a resolution to support congressional legislation allowing banks to provide services to legal cannabis businesses.
More than 30 states already have medical marijuana use, and 10 states and the District of Columbia have passed laws allowing recreational use. Recreational marijuana was legalized by California voters in November 2016.
California's legal marijuana industry is struggling to compete with the black market and is facing challenges that include banking access and high taxes. Earlier this month, the California governor's new state budget plan slashed cannabis tax revenue projections by $223 million.
A state cannabis panel last year issued a report on cannabis banking and stated that "large amounts of cash make cannabis businesses, their employees, and their customers targets of violent crime." It also said "banking relationships can help law enforcement officials and regulators distinguish legal cannabis businesses from illegal market operators."
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04e1ed7186292712e41bd3652ca2727a | https://www.cnbc.com/2019/05/21/rakesh-jhunjhunwala-india-to-post-highest-level-of-growth-from-2020.html | The 'Warren Buffett of India' says his country's economy will 'come back with a bang' | The 'Warren Buffett of India' says his country's economy will 'come back with a bang'
VIDEO3:0803:08Indian billionaire Rakesh Jhunjhunwala on his country's economic potentialStreet Signs Asia
Indian billionaire investor Rakesh Jhunjhunwala said he is very bullish about the country's medium-to-long term growth prospects.
In an interview this week with CNBC's Tanvir Gill, Jhunjhunwala, who is commonly referred to as the "Warren Buffett of India" said things have begun to improve in the economy following five years of a banking crisis, subpar capital expenditure and the introduction of important reforms such as the country's Goods and Services Tax and demonetization.
"We are now having improvement in credit culture, we are having integrity come to the fore," he said, adding that the government has taken steps to improve the ease of doing business in the country. "The China-America spat on trade is (also) a great opportunity for India. I don't see any reason why growth in India will not come back with a bang."
The investor said he sees India's growth reach around 8%-9% in the near future and them jump into double-digit figures in the longer term.
"We've raised our rate of growth in every decade since independence," he said. "I think India's sitting on what is going to be the highest level of growth it has ever seen from 2020 to 2030."
Still, reports have said that investors and economists, including International Monetary Fund Chief Economist Gita Gopinath, are increasingly skeptical of India's official growth numbers, questioning if the statistics put out by the government paint an accurate picture.
Reuters reported that a study conducted by a division of India's statistics ministry in the 12 months ending June 2017 found that as much as 36% of the companies in the database used in the country's GDP calculations could not be traced or were wrongly classified.
Former Reserve Bank of India governor, Raghuram Rajan, also expressed doubts over India's growth numbers. He was reported to have said that it was unlikely India grew at 7% when not enough jobs were being created, according to local media. He said India should consider appointing an impartial body to look at the data.
Jhunjhunwala, for his part, downplayed the concerns about the numbers.
"Just because you don't agree with your figures, you're suspicious of them, you can't say the method of calculation is incorrect," he said. "If they were incorrect, Mr. Raghuram Rajan should've corrected them. When he was the RBI governor, what was he doing?"
He added that he was also bullish about India's future because of the diminishing presence of Indian crony capitalism — which refers to the mutually advantageous relationship between government officials and businesses.
Prime Minister Narendra Modi's government was said to have taken a strong stance against corrupt businessmen in some of India's top companies, particularly as the country underwent its banking crisis and revamped its bankruptcy laws.
"The journey to limit crony capitalism: It's a journey, it's not a destination," Jhunjhunwala said. "Slowly but surely, in India, crony capitalism has died and governance is what brings about real growth."
For investors looking to get in on the action in the Indian market, there are several promising sectors out there, starting with airline stocks, according to the billionaire.
"Aviation is a big growth story and there are literally only two airlines which are not bankrupt. Or three airlines. IndiGo, SpiceJet and the Tata Group," he said, referring to the domestic carrier Vistara, which is a joint venture between Tata and Singapore Airlines. Vistara spent, and lost, billions of rupees to establish itself in the market and it is unlikely that a new challenger will emerge anytime soon because of the high costs, according to Jhunjhunwala.
"So, you're not going to have new airlines, this market is going to grow. There are going to be three groups of solvent players and one insolvent player in Air India. What's going to happened?" He asked. "I'm extremely bullish."
Jhunjhunwala owns SpiceJet shares.
According to the investor, other sectors that are attractive include pharmaceuticals, infrastructure and banking, where, he said, the bad debt crisis is almost over and profits are set to grow as loan provision requirements go down.
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4278d98d08d60a69edbe922837ce449b | https://www.cnbc.com/2019/05/21/susquehanna-uber-is-once-in-a-generation-company-but-stock-is-stuck.html | Uber is a 'once in a generation company' but the stock is going nowhere, Susquehanna says | Uber is a 'once in a generation company' but the stock is going nowhere, Susquehanna says
Dara Khosrowshahi, chief executive officer of Uber Technologies speaks on a webcast during the company's initial public offering on the floor of the New York Stock Exchange, May 10, 2019.Michael Nagle | Bloomberg | Getty Images
Uber is a revolutionary company, but don't rush to buy the stock, Susquehanna Financial Group said Tuesday.
"We agree that UBER is a once in a generation company with a massive opportunity to revolutionize transportation and logistics," Susquehanna analyst Shyam Patil said in a note to clients. "Slowing growth, however, creates uncertainty around future trajectory."
Since the ride-hailing company went public May 10 on the New York Stock Exchange in the most highly anticipated IPO of the year, investors have debated the company's success trajectory, especially if and when Uber will become profitable.
VIDEO4:0904:09Uber is not the next Facebook, says Dynamic Funds' Noah BlacksteinSquawk Box
Susquehanna is less concerned about the the lack of profitability of Uber, given the growth stage of the company, Patil said. Susquehanna estimates the company with become EBITDA positive in 2023. But Patil said it's concerning to see decelerating growth over the past several quarters.
"Bookings growth has slowed from the high 50s% y/y in 1Q18 to mid 30s% y/y in 1Q19, while adjusted revenue growth has slowed even more drastically from 85% to 14% over the same period," said Patil.
He said these recent trends surprise him, given the sheer size of the addressable market. This data prompted Susquehanna to have a neutral rating on the stock and a 12-month price target of $42 per share, about where it's currently trading.
Patil also noted Uber's complex financial model will likely weight on the company's valuation.
Uber priced its shares for its public debut at $45 a share. The stock is down more than 7% since its market debut, while ride-hailing competitor Lyft is down more than 24% since it went public on March 29.
WATCH: Kara Swisher on Uber CEO Khosrowshahi
VIDEO4:0004:00Kara Swisher: Uber's Dara Khosrowshahi should only be judged on the businessSquawk Alley
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fad519c8613760309cfce36d8f4d30fc | https://www.cnbc.com/2019/05/21/tech-stocks-are-feeling-the-pain-but-may-emerge-better-off-after-trade-war.html | Tech stocks are feeling the pain but may emerge better off after trade war | Tech stocks are feeling the pain but may emerge better off after trade war
A worker prepares to load a silicon wafer machine in a clean room at the Texas Instruments semiconductor fabrication plant in Dallas, Texas.Jason Janik | Bloomberg | Getty Images
Technology stocks are a casualty of the trade war, but analysts say there's a longer-term chance some companies might emerge stronger, depending on terms of any deal between the U.S. and China.
For now, no deal is in sight and no talks seem to be set. Tech stocks are reacting to the trade concerns and White House and Commerce Department actions against China telecom company Huawei that would bar it from buying U.S. components. Tech stocks bounced Tuesday, after the Commerce Department said it would grant some temporary exceptions to the export blacklist against Huawei.
The biggest tech casualties have been chipmakers, with the Philadelphia semiconductor index, SOX, down 13.5% this month. Other companies have also been hit, like Apple, which is off 8.8% for the month as investors worry it could be hurt by Chinese retaliation and negative sentiment among Chinese consumers.
The Commerce Department said it would grant a temporary license for U.S. exports to Huawei and dozens of its affiliates, giving some suppliers and customers a 90-day reprieve.
Analysts expect China to respond to the Huawei action by increasing its focus on building out its own semiconductor supply chain, but that is a longer-term solution. In the near term, there is concern China will find ways to retaliate against companies that operate in China.
"Part of what this is all about is trying to keep our intellectual property safe. It's not easy to say, 'I'm going to be a manufacturer of chips.' The process to build some of these things takes decades to get there," said Dan Niles, founding partner of AlphaOne Capital Partners. "If you can't steal it ... or if you can't force U.S. companies into a joint venture, it's much harder to get up the curve quickly."
Analysts note that some companies were hit harder than they deserved, but the chip group had been hitting highs, even with negative earnings outlooks just weeks ago. The VanEck Vectors Semiconductor ETF hit an all-time high on April 24. Since May 1, it was down 12.9% but is still up 16% for the year.
"We've said very consistently that we're negative on semiconductors. That hasn't changed," said Niles. Short term, companies would see an earnings hit if the U.S. sticks with its clamp-down on Huawei. Niles said investors have to assess whether the stocks should have been priced at such high levels in the first place.
"The way I explain it is you should be able to take some short-term pain for the longer-term gain it brings to the U.S.," said Niles.
"This is a good thing from a long-term perspective. ... China has been brilliant in all of this, for 20 years, they've gotten everything they wanted. They made our companies work with them in joint ventures. They made U.S. companies team up so they could learn from the U.S. companies. They've been masterful with this. The U.S. fell down on the job. We're trying to go from a position of weakness," he said.
Analysts also say the talks do not appear to be going well and intellectual property is an area that's difficult to tackle.
"I think it's going to be a long shot that you're going to fix all the problems with China in one trade deal," said Lori Calvasina, chief U.S. equities strategist at RBC. "Everybody agrees that the business community wants things to be better with China, but it just doesn't seem like we're heading in that direction at the moment. The goals are worthy. I don't know that we have a magic wand that's going to make all the problems go away."
Calvasina said software was also hit hard Monday, even though it is less exposed to trade issues. She said it appears investors were taking profits there, since it is an overcrowded space and high priced. Software was down 1.3% and tech hardware was off 2.9%, while semiconductors were down 3.9% Monday
"In the short term, you're [semiconductors are] going to have to go through some pain," Niles said. "Are they going to go out of business? Absolutely not. If this continues, will Huawei go out of business? Yes they will." The U.S. previously took similar action against Huawei rival ZTE, but later reversed it.
Wedbush tech analyst Dan Ives said he's been overweight technology and he sees the sharp decline in semiconductors as a buying opportunity. "In my opinion, the Street is baking in somewhere between a middle to worst case scenario with some of these names," he said. Ives said if there are signs a deal is coming when President Donald Trump and China President Xi Jinping attend the G-20 summit, that could create a buying opportunity.
"Right now, the bark is worse than the bite, and that's why we'd be a buyers of these names. On the semiconductor side, the ones that stick out continue to be ones that are exposed to 5G," Ives said.
B. Riley FBR analyst Craig Ellis pointed to 5G companies like Qorvo, Skyworks, Xilinx, Qualcomm, Broadcom and Analog Devices. But in a note he said Marvell had been more resilient last week because its customers include Nokia and Samsung, and not Huawei. But Marvell was down 3.9% Monday, as the whole group was sold.
Niles said he expects investors to be more discerning, viewing the Huawei-connected names differently.
Calvasina said the chip stocks ran up on optimism for a trade deal as a group during the months of negotiations.
"I think they deserve what they're getting," she said.
"The reality is either that the talks really did break down or they were not as advanced as we were led to believe. The reasons semis rallied so hard was expectations for a deal, she said. "I do think it makes sense to give back some of the gains."
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4a3fa22d0e6824595cffbadb05804a85 | https://www.cnbc.com/2019/05/21/us-china-trade-war-will-get-worse-before-it-gets-better-says-expert.html | US-China trade war may 'get worse before it gets better' as Beijing cranks up nationalism | US-China trade war may 'get worse before it gets better' as Beijing cranks up nationalism
Chinese President Xi Jinping stands by national flags.Johannes Eisele | AFP | Getty Images
There's more pain ahead for the U.S. and China as their bilateral trade dispute drags on, an expert forecast on Tuesday.
"It's going to get worse before it gets better," said Curtis Chin, an Asia fellow at the Milken Institute, a think tank.
VIDEO2:5202:52It's a 'very sensitive time' in China now: Milken InstituteStreet Signs Asia
Talks to end the ongoing trade dispute are believed to have hit a roadblock, and relations between the two economic superpowers deteriorated earlier this month when U.S. President Donald Trump announced that he would increase tariffs on $200 billion in goods from 10% to 25%. China responded by upping the tariffs on $60 billion of U.S. goods.
If we look at China's behavior, it does so many things to lift up their people, but it is also known as a vindictive nation, (it does) so many things to countries and companies they don't necessarily like.Curtis ChinAsia fellow, Milken Institute
However, tensions between China and the U.S. — as well as other parts of the world — did not develop just recently and will take time to work through, Chin told CNBC's "Squawk Box."
"It's really reflecting an adjustment of China's rise and how China behaves when it's no longer that poor nation of 20, 30 years ago, when maybe some of the things it was doing were more accepted of a developing nation," said Chin, who served formerly as U.S. ambassador to the Asian Development Bank.
As one of the world's largest economies now, "some of the things we might have accepted from a poorer nation maybe no longer fit the bill in terms of where China should fit into this region," he said.
While many on both sides are likely looking for a face-saving solution to the trade war, there are longstanding concerns that not just the U.S. but many other countries and companies have had about China's actions over the years, he said.
"If we look at China's behavior, it does so many things to lift up their people, but it is also known as a vindictive nation, (it does) so many things to countries and companies they don't necessarily like," said Chin.
On Monday, China's Tencent Video delayed the broadcast of the "Game of Thrones" finale, according to an official message published by the online streaming site on Monday, prompting uproar among fans of the popular American TV series in the country, spurring speculation that the delay was due to political tensions.
"It shows you that China is ramping up its nationalism as it tries to think through how to deal with this U.S.-China back and forth right now," said Chin.
VIDEO4:3604:36Cramer: China will retaliate against Apple because of the trade warSquawk on the Street
"Perhaps one more signal they are sending is stopping one of the biggest U.S. exports, (which) clearly is film and television," he added.
Tencent did not immediately respond to a CNBC request for comment.
Now is also a sensitive time ahead of the 30th anniversary of the suppression of pro-democracy protests at Beijing's Tiananmen Square on June 4, 1989, said Chin.
Chinese President "Xi Jinping needs to show he is in charge, that there's stability in that nation as he continues to struggle to revive that better life for all Chinese," Chin added.
- CNBC's Holly Ellyatt and Reuters contributed to this story.
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d8162e2fb969b65c4d948cc6e6e5ff59 | https://www.cnbc.com/2019/05/21/we-dont-yet-have-the-technology-to-cure-alzheimers-health-care-investor-says.html | We don't yet have the technology to cure Alzheimer's, health-care investor says | We don't yet have the technology to cure Alzheimer's, health-care investor says
Ali Satvat, Jorge Conde, and Peter Orszag during a panel discussion at the CNBC Healthy Returns conference in New York on May 21, 2019.Astrid Stawiarz | CNBC
Biotech companies don't yet have the technology or understanding of Alzheimer's to find a cure for the disease that plagues almost 5.8 million people in the U.S., Andreessen Horowitz general partner Jorge Conde said Tuesday at CNBC's Healthy Returns conference in New York.
"One of the things we look for when we make investments, we talked earlier about binary risk, is when developing a new therapeutic, you have to understand what the disease is doing," he said. "You have to understand what you need in it to affect the disease process, and then you have to have the capability to actually make that molecule or that cell or that gene."
With Alzheimer's "we don't even really know the very first layer, so the probability that you're going to find the right target and hit it is going to be unlikely, unless we can get that first level of understanding the disease," he said.
Biogen recently joined a long list of companies in the last decade that have failed to find a cure for Alzheimer's disease. Earlier this year, it halted the clinical trial of Alzheimer's drug aducanumab, which it was developing in partnership with Japanese pharmaceutical company Eisai.
Alzheimer's is a progressive and debilitating disease that often affects a person's memory, thinking and behavior.
Alzheimer's is "very, very difficult to solve, and it's going to require new technology to do it, and I just don't think we have the technology," Conde said.
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b48c8e234626870a5345bc9b009c297c | https://www.cnbc.com/2019/05/22/i-dont-do-cover-ups-president-trump-says.html | 'I don't do cover-ups': Trump lashes out at Democrats after canceling White House infrastructure sit-down | 'I don't do cover-ups': Trump lashes out at Democrats after canceling White House infrastructure sit-down
VIDEO12:1912:19'I don't do cover-ups': President TrumpNews Videos
President Donald Trump on Wednesday blasted "phony investigations" and Democratic calls for his impeachment, saying during a surprise White House press conference "this whole thing was a take-down attempt at the president of the United States."
His comments came after he walked out of a meeting with House Speaker Nancy Pelosi, Senate Minority Leader Chuck Schumer and other congressional leaders that was supposed to discuss how to fund national infrastructure improvements.
"I don't do cover-ups," Trump fumed to reporters in the Rose Garden. "Get these phony investigations over with."
The infrastructure meeting at the White House had started, and abruptly ended, not long after Pelosi, D-Calif., told reporters that "we believe the president of the United States is engaged in a cover-up."
Pelosi in recent days has come under pressure from members of her party to start impeachment proceedings against Trump for his blocking of testimony to congressional panels by current and former administration officials and by refusing to turn over documents.
Trump cited Pelosi's comments, calling them "inconsiderate," before he walked out of the Cabinet meeting room, according to Democratic aides who spoke to NBC News.
Pelosi then said to others still in the room, "I knew the president was not serious about infrastructure and would find a way out," a Democratic aide said.
The president's press conference stunned members of the media at the White House, who had no advance notice of it and were expecting to be reporting details of the infrastructure meeting.
"This whole thing was a take-down attempt at the president of the United States," Trump told reporters, referring to special counsel Robert Mueller's probe of Russian interference in the 2016 election, possible collusion by members of the Trump campaign, and possible obstruction of justice by Trump himself.
Mueller, in his final report, said Russian agents did try to influence the outcome of the election to benefit Trump but did not find evidence that members of Trump's campaign coordinated with Russians in that effort. Mueller said he "found multiple acts by the President" that could have exercised "undue influence" over law enforcement investigations, including the Russia probe, but did not conclude whether Trump had obstructed justice.
Trump said the media should be "ashamed" of themselves for how they have reported on Mueller's investigation.
VIDEO3:1803:18Mnuchin: I never spoke with Trump about handing over tax returnsCongress
"Here's the bottom line: There was no collusion, there was no obstruction," the president said. "The crime was committed on the other side."
"I don't speak to Russians about campaigns," Trump said. "It's a hoax. The greatest hoax in history."
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Trump repeatedly used the phrase "the 'I' word" during the press conference, referring to calls by an increasing number of Democrats to launch an impeachment inquiry in the House.
"Whether or not they carry the big 'I' word out, I can't imagine that, but they will do whatever they have to do. There is a danger here," Trump said. "If some day a Democrat becomes president and you have a Republican House, they can impeach him for any reason, or her, any reason. We can't allow that to happen. We can't allow it to happen."
Asked if he respected Congress as a co-equal branch of government with rights to oversight over the executive branch, Trump said, "I respect the courts. I respect Congress. I respect right here where we're standing. But what they have done is abuse."
"This is investigation Number 4 on the same thing. Probably five. And it really started I think pretty much from the time we came down the escalator in Trump Tower," the president said, referring to the launch of his campaign for the White House in 2015. "We're doing a lot without them. Let them play their games. We're going to go down one track at a time. Let them finish up and we'll be all set."
"These are the people that after two years and $40 million or $35 million, it will end up being a lot more than that by the time all of it is done. This is what happened," Trump said, citing the cost of the Mueller probe.
"No collusion. No obstruction. No nothing. They issued 50 orders authorizing use of pen registers. Think of that — 500 witnesses. And then I have Nancy Pelosi go out and say that the president of the United States engaged in a cover-up. Now, we've had a House investigation. We have Senate investigations. We have investigations like nobody has ever had, and we did nothing wrong. They would have loved to have said we colluded. They would have loved it. These people were out to get us. The Republican Party and President Trump. They were out to get us. This was a one-sided horrible thing."
Schumer later told reporters: "To watch what happened in the White House will make your jaw drop."
The New York Democrat said he believed Trump went into the meeting with the plan of canceling it — and then holding a purportedly spontaneous press conference — because he was not prepared to make a commitment for how much to spend and how to fund improvements on infrastructure.
"It's clear that this was not a spontaneous move on the president's part. It was planned," Schumer said, noting that there were printed signs in the Rose Garden referring to details of the Mueller probe before Trump walked out to give his remarks. Handouts containing that information about the Mueller investigation were given to reporters after Trump spoke.
Pelosi said, "I pray for the president of the United States, and I pray for the United States."
US Speaker of the House Nancy Pelosi (L) and Senate Democratic Leader Chuck Schumer (R) hold a press conference on Capitol Hill in Washington, DC, May 22, 2019, following a meeting with US President Donald Trump at the White House.Saul Loeb | AFP | Getty Images
Senate Minority Whip Dick Durbin described the events leading up to Trump's press conference.
"High drama in the Cabinet room," the Illinois Democrat said. "We were all invited, Democratic leaders, for the follow-up meeting on infrastructure, everyone showed up, sat in their chairs, the president walked in the room and announced he was not going to go forward with the meeting, he was canceling it."
He said Trump "objected to the continued investigation of obstruction of justice." Durbin added that Trump insisted "he cooperated and gave him side of the story, as we've heard before."
"I don't know where this leaves us as a nation. We have so many things that need to be done for this country, and they can't be done unless we work together. And if the president walks out of the meeting. It's a setback to our country's progress."
WATCH: The saga of Trump's taxes
VIDEO12:5512:55The saga of Trump's taxesMarkets and Politics Digital Original Video
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67ae88ad9b49b9c0ff6baea30ea214ff | https://www.cnbc.com/2019/05/22/if-you-win-mega-millions-the-irs-gets-about-58-million-to-start.html | If you win Mega Millions, the IRS gets about $58 million to start | If you win Mega Millions, the IRS gets about $58 million to start
With no one hitting all the winning numbers in Tuesday night's Mega Millions drawing, the jackpot has jumped again.
Now at $393 million, the top prize has been climbing for more than two months. And while the odds are stacked against players winning — your chance is 1 in about 302 million — the IRS wastes no time getting a slice of every big lottery win.
"Winners are surprised by how much is withheld in taxes from the initial payment, and then how much more is owed when they file their taxes the following year," said Jason Kurland, a partner at Rivkin Radler, a law firm in Uniondale, New York.
MARK RALSTON | AFP | Getty Images
"All of the numbers involved in these huge jackpots are staggering, and the taxes are no exception," said Kurland, who helps big lottery winners navigate their windfall.
Whether you take the prize as an annuity spread out over three decades or as an immediate, reduced lump sum, 24% is withheld for federal taxes. However, the top marginal tax rate of 37% means owing a lot more to the IRS at tax time. State taxes typically are due, as well.
For Friday night's Mega Millions drawing, the cash option — which most winners go with — is $244.2 million. The 24% federal withholding would reduce that amount by $58.6 million.
VIDEO1:4001:40Kevin O'Leary: What to do if you win the lotteryMake It
Assuming you had no reduction to your taxable income — such as large charitable contributions — another 13%, or $31.7 million, would be due to the IRS. That would be $90.3 million in all going to Uncle Sam.
This means that after federal taxes, you'd be left with $153.9 million.
Then there are state taxes, which range from zero to more than 8% depending on where the ticket was purchased and where the winner lives.
In other words, you could end up paying more than 45% in taxes.
More from Personal Finance:Younger generations say 'I don't' to high-cost engagement ringsLayaway loans are back, with a new lookThese are the 10 most affordable vacations in the US
Nevertheless, the after-tax amount would be life changing. Experts say large lottery winners should assemble a team of experienced professionals — an attorney, a tax advisor and a financial advisor — to help navigate the windfall.
Meanwhile, the Powerball jackpot is an estimated $288 million for Wednesday night's drawing.
The last time there was a top-prize winner in that game was on March 28, when a Wisconsin man nabbed a $768.4 million jackpot. Manuel Franco, who claimed his haul in late April, chose the lump sum cash option of $477 million. After federal and state tax withholdings, he received $326 million.
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df04289c5203ab92c0b8d871cb5c5375 | https://www.cnbc.com/2019/05/22/trump-hosts-democratic-leaders-at-white-house-infrastructure-talks.html?__source=twitter%7Cmain | Trump says he won't do an infrastructure bill while Democrats continue to investigate him | Trump says he won't do an infrastructure bill while Democrats continue to investigate him
VIDEO1:3801:38Trump hits Dems and Mueller, addresses the 'I-word'Closing Bell
President Donald Trump abruptly walked out of a meeting with House Speaker Nancy Pelosi, D-Calif., and Senate Minority Leader Chuck Schumer, D-N.Y., at the White House on Wednesday, telling reporters moments later that he would not negotiate on legislation with Democrats while he was still under investigation by several committees.
Wednesday's meeting was supposed to be the second official sit-down between the president and Democratic congressional leadership specifically focused on infrastructure.
"I walked into the room and I told Sen. Schumer and Speaker Pelosi, 'I want to do infrastructure' ... but we can't do it under these circumstances," Trump said at a last-minute Rose Garden event.
Trump's anger appears to have been sparked by comments Pelosi made earlier in the day when she said, "We believe the president of the United States is engaged in a cover-up" by blocking White House aides from giving testimony and responding to document requests from ongoing congressional investigations.
"I don't do cover-ups," Trump insisted Wednesday.
President Donald Trump discusses Robert Mueller's investigation into Russian interference into the 2016 presidential election in the Rose Garden at the White House May 22, 2019 in Washington, DC.Chip Somodevilla | Getty Images
According to a White House official who spoke to CNBC on condition of anonymity, the meeting in the Cabinet room lasted only about seven minutes. Trump effectively said to the visiting Democrats that he wanted to do infrastructure, "'but you're focused on investigating. When you're done we can talk. Meeting over,'" Trump said, and then he left, the official said.
"I knew the president was not serious about infrastructure and would find a way out," Pelosi said to her Democratic colleagues after Trump's exit, according to a Democratic aide who spoke to NBC News. In a statement issued later in the day, the California Democrat said House committee chairs will continue to work on "transformative infrastructure solutions that will create good-paying jobs, regardless of the President's behavior."
It appeared as though Trump's abrupt walkout had been planned in advance, given that the White House had prepared a sign to adorn the presidential lectern, and handouts that were given to reporters following the Rose Garden statement.
Speaking to journalists at the Capitol shortly afterward, Senate Minority Whip Dick Durbin, D-Ill., said there had been "high drama in the Cabinet room. We were all invited, Democratic leaders, for the follow-up meeting on infrastructure, everyone showed up, sat in their chairs, the president walked in the room and announced he was not going to go forward with the meeting, he was cancelling it."
VIDEO12:1912:19'I don't do cover-ups': President TrumpNews Videos
Trump "objected to the continued investigation of obstruction of justice, he said he cooperated and gave his side of the story, as we've heard before," Durbin said, calling the outcome of the meeting, "a setback to our country's progress."
Following the president's remarks, Pelosi and Schumer held an impromptu event on Capitol Hill where Schumer said Trump's actions at the meeting "would make your jaw drop."
In late April, a similarly billed meeting proved to be an unexpected success, with both Trump and Democrats saying the two sides agreed that an infrastructure package would need to contain about $2 trillion in funding and investments.
Since then, however, there had been little additional clarity as to what the next steps forward might be, or where this money would come from.
"Let them finish up" their investigations, Trump said at the end of his remarks in the Rose Garden, "and we'll be all set."
Later in the day, Trump reiterated his position in a series of tweets, claiming, "You can't investigate and legislate simultaneously - it just doesn't work that way."
TRUMP TWEET 2
TRUMP TWEET 4
White House officials declined to say precisely which legislative efforts would be halted as long as Democrats continued their investigations, and which ones might proceed regardless of Trump's anger at the myriad probes underway into his administration.
— CNBC's Eamon Javers contributed to this report.
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c33c2d1c4489db76042ddd719a2ef256 | https://www.cnbc.com/2019/05/23/alternative-meat-to-become-140-billion-industry-barclays-says.html | Alternative meat to become $140 billion industry in a decade, Barclays predicts | Alternative meat to become $140 billion industry in a decade, Barclays predicts
Packages of Beyond Meat plant-based burger patties are displayed for a photograph in Tiskilwa, Illinois.Daniel Acker | Bloomberg | Getty Images
Analysts at Barclays "can't believe it's not meat," projecting huge growth for the nascent alternative food industry within the next 10 years.
The market for alternative meat can reach $140 billion over the next decade, according to a team of Barclays analysts spanning the agriculture, food and restaurant industries. That rapid pace of growth implies the animal-free industry could capture about 10% of the $1.4 trillion global meat industry.
"Although today we believe that there are inherent barriers to successfully replicating certain animal-based consumer favorites (e.g., t-bone steaks), what has been achieved so far in terms of 'meatless' ground beef, sausage and hamburger products has yielded positive initial consumer reaction," the analysts wrote.
"While lab-based meat is still likely several years away from hitting supermarket shelves, plant-based protein continues to gain ground vs. its animal-based counterpart, and we expect this trend to continue for the foreseeable future," they added.
Though the brokerage cautioned that risks remain for anyone looking to invest early, the report highlighted potential advantages over the traditional meat market. Advocates of the up-and-coming industry are quick to point out that production doesn't harm animals, is less taxing on the environment and possibly offers a healthier product depending on sodium content.
Given those advantages over animal-based peers, Barclays argues that "there is a bigger market opportunity for plant-based (and maybe even lab-based) protein than perhaps was argued for electric vehicles ten years ago."
The upbeat outlook comes nearly three weeks after Los Angeles-based Beyond Meat enjoyed one of the most successful initial public offerings of 2019, soaring more than 160% in its first session. The company, which seeks to create "the future of protein," has developed plant-based burgers, sausage and other alternatives for those interested in moving away from meat-heavy diets.
The stock remains more than 200% above its $25 IPO price, trading up 5.6% at $82 per share Thursday.
Beyond Meat isn't the only food company looking to take market share from the entrenched players. Impossible Foods, which has yet to trade on the public market, is taking aim at the restaurant space and food giants like Tyson Foods and Nestle.
And while large U.S. food producers have started their own investments in meat alternatives, others are trying to partner with newcomers like Beyond.
The company received its first buy rating from Bernstein earlier this month.
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3c3c4538ae8e4687afc9dd863ff00c13 | https://www.cnbc.com/2019/05/23/boeing-737-max-return-should-require-independent-review-european-pilots-say.html | European pilots urge EU regulator to conduct independent review of Boeing 737 Max | European pilots urge EU regulator to conduct independent review of Boeing 737 Max
A Boeing 737 MAX 8 is pictured outside the factory on March 11, 2019 in Renton, Washington.Stephen Brashear | Getty Images
A European pilots' group Thursday urged the region's aviation regulator to conduct its own thorough and independent review of the Boeing 737 Max before allowing the planes to fly again.
International air safety regulators, including the Federal Aviation Administration, grounded the close to 400 Max jets that were in service in mid-March after two fatal crashes within less than five months of one another killed a combined 346 people.
"Simply accepting the FAA's word on the Max's safety won't be enough," the European Cockpit Association said in a statement. The group represents 38,000 European pilots, including those at airlines that have purchased the Boeing 737 Max, Norwegian Air Shuttle and Ryanair.
The group's comments come as the FAA meets with its international counterparts in Texas on Thursday to provide an update on its process of approving Boeing's changes to the planes in an effort to get them flying again.
Operators of the Boeing 737 Max are grappling with how to reintroduce the plane in their fleets if the FAA and other authorities approve its return. The absence of the plane has forced airlines to cancel hundreds of flights during the busy summer travel season. Confidence from pilots and flight attendants is key to that strategy, and Boeing has met with both groups in recent weeks to discuss the changes it's preparing.
"If there's an American Airlines pilot ready to go, so am I, so is my family. And we'll be among the first people, if not the first people, on board," American Airlines' CEO Doug Parker told NBC News in an interview that aired Wednesday evening.
Boeing last week said it completed software changes to an anti-stall system that has been implicated in the October crash of a Lion Air Boeing 737 Max and another operated by Ethiopian Airlines in March. That software along with updated pilot training materials will need FAA's approval.
The manufacturer and the FAA are under fire for how the plane was approved, which included delegating some functions to Boeing. Although the practice is legal, lawmakers have questioned the agency's relationship with Boeing, and several investigations are examining how the planes received a green light with a system that pilots say they didn't know about until after the first crash.
The pilots group also wants answers.
"For European pilots, having closely followed the developments and revelations in the past months, it is deeply disturbing that both the FAA and Boeing are considering a return to service, but failing to discuss the many challenging questions prompted by the Max design philosophy," it said.
For its part, the European Union Aviation Safety Agency said it does plan to conduct an independent review of the plane.
"The information made available so far through the preliminary investigations of the two accidents are deemed to provide sufficient understanding of the safety issues to be addressed and we will continue to analyse any new information that the investigations make available," EASA said in an e-mailed statement.
Separately on Thursday, an international airline trade group is meeting with 737 Max operators to discuss Boeing's update and the potential return to service.
VIDEO10:1010:10RyanAir CEO Michael O'Leary on the Boeing 737 Max, oil prices and moreSquawk Box
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7c0063173d3cc43d9281dc16afc4c180 | https://www.cnbc.com/2019/05/23/huawei-our-own-operating-system-could-be-ready-this-year.html | Huawei says its own operating system could be ready this year if it can't use Google or Microsoft | Huawei says its own operating system could be ready this year if it can't use Google or Microsoft
VIDEO1:3401:34Huawei's own operating system could be ready this year, executive saysStreet Signs Asia
Huawei could have its own operating system for smartphones and laptops ready for use in China by fall this year, the head of the company's consumer division told CNBC.
Still, he stressed that would only happen if the company were completely stopped from using Google's and Microsoft's software.
The Chinese technology giant was placed on a U.S. blacklist that required American firms to get permission from the government before selling anything to Huawei. That meant Huawei would no longer be able to license the version of Google's Android operating system that's complete with all of the U.S. firm's services.
However, Washington granted a temporary 90-day reprieve for Huawei, which will allow it to continue using American technology — for now.
VIDEO6:4906:49What is Huawei?CNBC Explains
Huawei has said in the past that it has its own operating system waiting in the wings if it were to be permanently blocked from Google and Microsoft software. Now, one of the company's top executives has told CNBC that the operating system could be ready by the fourth quarter of this year, with a version for its markets outside of China available in either the first or second quarter of 2020.
"Today, Huawei, we are still committed to Microsoft Windows and Google Android. But if we cannot use that, Huawei will prepare the plan B to use our own OS," Richard Yu, CEO of Huawei's consumer business, told CNBC on Thursday.
If Huawei isn't allowed to use Android, it could be damaging because the phones won't have the Google Play Store where consumers can download apps. Instead, users would need to find other ways to install their favorite applications.
However, Yu said Huawei's own app store, known as the App Gallery, would be available on its own operating system. The App Gallery is installed on Huawei's devices currently, but Google's Play Store is often the default app store for consumers.
The Huawei executive stressed that Huawei's own operating system would only be rolled out if the company were permanently blocked from using Google or Microsoft products.
"We don't want to do this but we will forced to do that because of the U.S. government. I think the U.S., this kind of thing, will also not only be bad news for us, but also bad news for the U.S. companies because we support the U.S. business, so we will be forced to do this on our own," Yu said. "We don't want to do this but we have no other solution, no other choice."
There are several challenges that could face Hauwei's own operating system.
Firstly, Huawei will need to make its own software have a user experience that can match Google and have the "versatility of collection of apps," according to Neil Shah, a research director, at Counterpoint Research. Secondly, making apps secure will be key.
"Ensuring security of apps is paramount which involves scanning and certification of apps for the store which is a humongous task and could be challenging and resource intensive. The last thing Huawei would want is privacy or security issues plaguing the offering," Shah told CNBC.
Huawei is also facing issues related to securing critical components. SoftBank-owned semiconductor firm Arm said on Wednesday that it was suspending business with Huawei. Arm creates the basis for Huawei's own processor in its smartphones called the Kirin 980. So when Huawei talks about its own chips, they are built on Arm architecture and many are actually manufactured by Taiwanese firm TSMC.
The processor in a phone needs to work closely with the operating system in a device. If the OS is dependent on working with Arm architecture and Huawei gets blocked from using the company's designs, that could make the software unusable.
"If they can't manufacture their own ARM-based chipsets having an OS doesn't matter. So not losing access to ARM IP (intellectual property) would be important as a first step," Shah said.
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7f90b3ab3271ca1bf7e9c50c1287eec4 | https://www.cnbc.com/2019/05/23/stocks-making-the-biggest-moves-midday-l-brands-copart-chipotle-more.html?__source=yahoo%7Cfinance%7Cheadline%7Cstory%7C&par=yahoo | Stocks making the biggest moves midday: L Brands, Copart, Chipotle & more | Stocks making the biggest moves midday: L Brands, Copart, Chipotle & more
Pedestrians walk past a Victoria's Secret store, a subsidiary of L Brands, in New York.Craig Warga | Bloomberg | Getty Images
Check out the companies making headlines midday Thursday:
L Brands — L Brands surged 12.8% after the parent company of Victoria's Secret and Bath & Body Works reported first-quarter earnings that surpassed expectations. The company reported earnings of 14 cents per share, while analysts polled by Refinitiv expected a break-even quarter.
Target — Target shares rose 2.4% after being upgraded by J.P. Morgan following its strong earnings Wednesday. J.P. Morgan upgraded its rating on the stock to overweight from neutral and hiked its target price to $100 from $81. The bank said Target's strong fiscal first-quarter earnings, especially its 4.2% growth in same-store sales, prove that the big-box retailer is safe from the threat of e-commerce giant Amazon.
Best Buy — Shares of Best Buy fell 4.8% despite the retailer's second-quarter earnings beat after the company warned that new tariffs would increase prices for shoppers. The company reported earnings per share of $1.02, topping Wall Street estimates of 86 cents, according to Refinitiv. Best Buy also reaffirmed its full-year forecast.
Tesla — Tesla shares fell as much as 3.4% but later recovered after Loup Ventures co-founder Gene Munster said the electric car maker will probably miss auto delivery expectations this year. Munster lowered his 2019 vehicle delivery estimate by about 10%.
Toro — Shares of lawn mower maker Toro fell more than 5% after it reported disappointing quarterly results. Toro posted earnings per share of $1.17, missing a Refinitiv estimate of $1.19 per share. Revenue came in at $962 million, lower than the $987.8 million forecast. But Toro said for the full-year it estimates earnings per share between $2.90 and $3.00, topping an estimate of $2.83.
Copart — The auto auction company's stock jumped nearly 8% on quarterly earnings that topped analyst expectations. Copart reported fiscal third-quarter earnings of 81 cents a share. Analysts polled by Refinitiv had forecast a profit of 62 cents a share. The company's service and vehicle revenues also beat analyst estimates.
Pros Holdings — Shares of the AI platform company climbed 1.6% after an analyst at Stifel upgraded the stock to buy from hold. The analyst also hiked Pros' price target to $60 per share from $46, citing accelerating revenue growth and an attractive valuation.
Sociedad Quimica y Minera de Chile — The world's largest lithium producer fell 5.8% on weaker-than-forecast first-quarter results. Sociedad Quimica reported earnings per share of 31 cents on revenue of $504.2 million. Analysts polled by FactSet expected a profit of 38 cents a share on revenue of $521.3 million.
Medtronic — Shares of Medtronic jumped 3.2% after the medical device company reported better-than-expected fiscal fourth-quarter results. Medtronic reported earnings of $1.54 per share on revenue of $8.15 billion. Analysts polled by Refinitiv expected a profit of $1.46 per share on sales of $8.11 billion. The company also gave strong full-year guidance.
Chipotle Mexican Grill — Chipotle Mexican Grill dropped more than 5% after an analyst at BMO Capital Markets downgraded the stock to underperform from market perform. The analyst said Chipotle would be affected by the African swine fever due to its large exposure to pork. The African Swine Fever "will create a meaningful, multi-year upswing in protein prices," the analyst wrote in a note.
Apple — Apple shares fell 1.7% after UBS lowered its price target on the tech giant to $225 per share from $235. UBS said that Apple faces pressure from the ongoing U.S.-China trade war and slowing smartphone demand.
—CNBC's Nadine El-Bawab and Maggie Fitzgerald contributed to this report.
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840f38fe7c04e2a156bc90ec92297f3a | https://www.cnbc.com/2019/05/23/theresa-may-could-reportedly-announce-resignation-friday.html | British Prime Minister Theresa May could reportedly resign within days | British Prime Minister Theresa May could reportedly resign within days
British Prime Minister Theresa May departs from 10 Downing Street ahead of Prime Ministers Questions session (PMQs) in Parliament, London on May 22, 2019.NurPhoto | NurPhoto | Getty Images
British Prime Minister Theresa May could announce her resignation in the next few days, according to U.K. media reports, as she faces pressure from members of her own party to step down.
Downing Street appeared defiant however, with May's spokesman saying she will meet ministers this afternoon and that she was listening "to colleagues about their concerns on the (Withdrawal Agreement) bill," Reuters reported. He also said she was focused on delivering Brexit.
The Withdrawal Agreement Bill is seen as having precipitated the latest crisis in government with lawmakers widely opposing May's attempt to resurrect her Brexit deal that they've already rejected three times.
The Times newspaper reported on Thursday morning that May will announce that she will quit her post as early as Friday. The paper did not cite a source and Downing Street would not comment on the reports when contacted by CNBC.
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May will remain as prime minister while her successor is elected in a two-stage process under which two final candidates face a ballot of 125,000 Conservative Party members, the newspaper said.
Pressure appears to have been mounting on the prime minister to announce her departure in the last 48 hours amid a backlash of her offer of a "new" Brexit plan that she wanted to put before Parliament.
Lawmakers have already rejected May's Brexit deal three times so the prospect of another vote on the withdrawal agreement, that many opposition and Tory lawmakers have already rejected and said had not changed much, was met with disbelief in many quarters.
On Wednesday night, the Telegraph's deputy political editor reported that the influential 1922 Committee (a powerful group of pro-Brexit Conservative party lawmakers) wanted May to announce on Friday that she will step down as party leader by June 10.
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On Thursday, the Guardian newspaper reported that Geoffrey Clifton-Brown, the treasurer of the 1922 Committee, will allow a new no-confidence vote in May if she does not announce her resignation date Friday.
That would mean changing the rules from the status quo that a leader can only face one confidence vote within a 12-month period. May survived a confidence vote last December. A no-confidence vote would likely take place after Trump's state visit as Parliament will be in recess until June 4.
In the meantime, how much support May has from her remaining ministers is yet to be seen. She was dealt a blow Wednesday evening when senior minister Andrea Leadsom quit her post saying that May's new Brexit plan contained "elements I cannot support, that aren't Brexit."
The Telegraph newspaper reported Thursday that May "is under siege" in Downing Street and had refused to meet key ministers Jeremy Hunt and Sajid Javid but later reports suggested that Hunt is due to meet May later Thursday.
Hunt signaled he still backed May, however, telling a reporter that she would still be prime minister when Trump visits the U.K. on June 3. "Theresa May will be prime minister to welcome him and rightly so," he said, Reuters reported.
The latest turmoil in the British political establishment comes after May said she had made a number of changes to the Brexit plan she had offered members of Parliament (MP) – including the offer of a vote on whether to hold a second referendum – but opposition Labour Party leader Jeremy Corbyn said he'd oppose the deal, as did other opposition parties, and significant Tory MPs opposed the plans too. May's proposal, formally known as the "Withdrawal Agreement Bill," certainly looks dead in the water now and is unlikely to be introduced, analysts noted.
The pound hovered around a four month lows as opposition to May's plan emerged Wednesday and slipped to $1.2625 overnight, its lowest since January 4.
May appears to be clinging on to power for now but analysts following the political situation say that her premiership "is finally coming to an end." Talk has also turned to who might replace May.
VIDEO2:4202:42Top Brexiteer resigns from Theresa May's government over BrexitStreet Signs Europe
"Questions that remain to be settled include whether May will stay in place while the Tory Party chooses her successor; some ministers want David Lidington, her de-facto deputy, to act as caretaker prime minister, but May is expected to stay in place until her successor takes over," Mujtaba Rahman, managing director of Europe at Eurasia Group, said in a note Thursday.
A favorite to replace May is Brexiteer Boris Johnson, and Rahman said he was likely to attract support from the Conservative Party.
"Without launching a campaign — by his own standards, Boris has been lying low — he has momentum ... Even mainstream Tories are coming round to the idea of PM Johnson," Rahman said, though he added Johnson could face pressure not to go for a no-deal Brexit if he gets into power.
"He is likely to emphasize he would initially seek a deal, though one based on a revised Withdrawal Agreement with changes to the Irish backstop, to which the EU is unlikely to agree. Johnson will also come under pressure from Tory MPs not to seek a general election to secure a mandate for no-deal; many fear losing their own seats, and a Corbyn government."
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9b32ea864363064821cc8f614cca7c54 | https://www.cnbc.com/2019/05/23/trump-huawei-trade-deal.html?&doc=106808150 | Trump: 'I can imagine Huawei being included' in a US-China trade deal | Trump: 'I can imagine Huawei being included' in a US-China trade deal
President Donald Trump speaks about a range of subjects including failed infrastructure talks with Democratic lawmakers during an event to discCarlos Barria | Reuters
President Donald Trump left little doubt on Thursday that he is willing to negotiate tough U.S. restrictions on the Chinese telecom giant Huawei as part of a broader trade deal with Beijing, a position that could put the president at odds with members of his own administration.
"It's possible that Huawei would be included in a trade deal," Trump said during a freewheeling impromptu exchange with reporters at the White House on Thursday afternoon. "If we made a deal, I can imagine Huawei being included in some form or some part of a trade deal."
VIDEO4:3804:38Pompeo painted Huawei as long-term national security threat, says policy expertSquawk Box
Trump's remark came just moments after he had said, "Huawei is something that is very dangerous. You look at what they have done from a security standpoint, from a military standpoint. It is very dangerous."
Asked by a reporter how such a negotiation over Huawei would look, Trump replied, it would "look very good for us."
"How would you design that?" the reporter asked.
"It's too early to say," Trump replied. "We're very concerned about Huawei from a security standpoint."
The president appeared to be delivering a mixed message about the Chinese broadband company: On the one hand, that Huawei was a threat to U.S. national security, and on the other hand, that the United States would be willing to consider easing some of its restrictions on the company in order to reach a broader trade deal with China.
Trump's remarks came as both global markets and major American industries grew increasingly concerned this week that the escalating trade war between the U.S. and China could do lasting damage to America's economy and to key sectors, such as agriculture and manufacturing.
To wit, Trump's Huawei comments were made at an event focused on the announcement of a plan to use $16 billion in tariff revenues on aid to farmers impacted by the trade war with China. The plan had been released earlier in the day by the Department of Agriculture, however, and Trump veered off topic shortly after he began speaking Thursday.
VIDEO2:5702:57Cramer: Huawei has misbehaved for years but we didn't care before TrumpSquawk on the Street
The White House has for months taken an increasingly hard line against Huawei, and in May, Trump declared a national emergency that appeared to specifically target the company.
The move, done via executive order, authorized Commerce Secretary Wilbur Ross, in consultation with other top officials, to block transactions that involve information or communications technology that "poses an unacceptable risk to the national security of the United States."
Following the order, the U.S. Department of Commerce announced the addition of Huawei Technologies and its affiliates to the Bureau of Industry and Security Entity List, making it more difficult for the Chinese telecom giant to conduct business with U.S. companies.
The addition meant that U.S. companies were prohibited from selling or transferring technology to Huawei without a license issued by the BIS. Huawei depends on some U.S. suppliers for parts.
This is a developing story, please check back for updates.
— CNBC's Tucker Higgins contributed to this report.
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eaaa65038b83b88df0e1fc502bfbb920 | https://www.cnbc.com/2019/05/24/forex-market-us-china-trade-war-us-treasury-yields-in-focus.html | Dollar slips as weak data boosts US rate cut bets | Dollar slips as weak data boosts US rate cut bets
Athit Perawongmetha | Reuters
The dollar edged away from two-year highs on Friday after weak U.S. manufacturing activity data sparked worries that the trade conflict with China may hurt the world's largest economy and affect the currency's safe-haven status.
Against a basket of six major currencies, the dollar was down 0.2% at 97.686 in early European trade and 0.7% off a two-year high of 98.371 hit the previous session.
The fall followed overnight data showing manufacturing activity hit its lowest level in almost a decade in May, suggesting a sharp slowdown in U.S. economic growth was under way.
Up to now, the bulk of the pain from the trade war has been felt in Asia, with economies from Singapore to Thailand all posting poor numbers.
"Lot of people for good reasons thought trade wars may be U.S. dollar-positive and other countries cannot retaliate," said Commerzbank FX strategist Ulrich Leuchtmann.
"But in reality, it's more difficult. This very disappointing PMI data and other factors like the Huawei story are all creating stress for the U.S. economy and derailing sentiment."
President Donald Trump said on Thursday that U.S. complaints against Huawei Technologies Co Ltd might be resolved within the framework of a U.S.-China trade deal, while at the same time calling the Chinese telecommunications giant "very dangerous".
Escalating trade tensions and weak data have fuelled rate cut expectations from the Fed. Money markets broadly expect one rate cut by October followed by another by January 2020.
The dollar weakness helped sterling recover slightly from a 4-1/2 month low while the euro briefly inched above $1.12 to hit a one-week high.
Against the yen, the dollar edged down to 109.50 , extending losses overnight, when it gave up two-thirds of a percent, its steepest drop in a single session in two months.
The euro might have also been helped by the Dutch part of the EU parliamentary elections, in which an exit poll showed the Labour party of European Commissioner Frans Timmermans won a surprise victory over a Eurosceptic challenger who had been topping opinion surveys.
The euro has been pinned lower in recent weeks by the prospect of Eurosceptic parties across the continent performing well in the elections.
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5d8bfd8f7f13606fffa0220dd04f30d5 | https://www.cnbc.com/2019/05/24/spacex-livestream-watch-launch-of-60-starlink-internet-satellites.html | Watch SpaceX launch Starlink internet satellites —its 'heaviest payload' ever, Elon Musk says | Watch SpaceX launch Starlink internet satellites —its 'heaviest payload' ever, Elon Musk says
VIDEO1:4601:46SpaceX just launched its heaviest payload everNews Videos
SpaceX is set to launch 60 of its internet satellites on Thursday evening from Cape Canaveral, Florida.
This is the first full launch of "Starlink" satellites. The 60 satellites represent the first launch of dozens more, as SpaceX plans to launch thousands of the Starlink satellites to create an interconnected network to beam high speed internet to consumers anywhere in the world.
SpaceX sees Starlink as a key source of funding as the company works toward its goal of flying humans to and from Mars. CEO Elon Musk said in a call with reporters last week that this "is the heaviest payload Falcon 9 has ever launched, or Falcon Heavy, for that matter."
VIDEO18:0018:00How SpaceX started and what's next for Elon Musk's Mars dreamMarkets and Politics Digital Original Video
Shortly after liftoff, the lower "booster" stage of the rocket will separate and flip, returning to Earth. The booster stage will then attempt to land on the company's autonomous barge position in the Atlantic Ocean.
SpaceX will show the 60 satellites deploying on the company's webcast. The process will be very slow, as Musk said there isn't "a specific deployment mechanism per satellite."
The mission was previously scheduled to launch a week ago but SpaceX postponed it. The company said in a tweet that the delay was "to update satellite software and triple-check everything again."
"Always want to do everything we can on the ground to maximize mission success," SpaceX said.
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94e045eaab0de897ff689f85e02e50ce | https://www.cnbc.com/2019/05/25/trump-says-considering-pardons-for-some-soldiers-accused-of-war-crimes.html | Trump says considering pardons for some US soldiers accused of war crimes | Trump says considering pardons for some US soldiers accused of war crimes
Kevin Lamarque | Reuters
U.S. President Donald Trump said on Friday he was considering pardons for "two or three" American soldiers charged with war crimes, a move he also said would be controversial but justified because they had been treated "unfairly."
Trump told reporters at the White House that he had not decided yet on the cases but may wait until the accused stood trial before deciding whether to grant them pardons.
"Some of these soldiers are people that have fought hard, long. You know, we teach them how to be great fighters, and then when they fight sometime, they get really treated very unfairly," Trump said.
He did not identify which cases he was reviewing.
The New York Times on May 18 reported Trump had asked the Justice Department for paperwork on several high-profile war crimes cases in preparation for possible pardons to be announced on or around the U.S. Memorial Day holiday honoring fallen troops. This year's holiday is to be observed on May 27.
One request, according to the Times report, was for Special Operations Chief Edward Gallagher, a decorated U.S. Navy SEAL court-martialed on charges he fatally stabbed a helpless, wounded Islamic State fighter in his custody, and shot two unarmed civilians from a sniper's perch during his 2017 deployment to Iraq.
The 39-year-old combat veteran and platoon leader has pleaded not guilty to all charges. Defense lawyers say the allegations against him were fabricated by subordinate SEAL team members disgruntled with his leadership style and seeking to force him out.
Gallagher's trial was delayed this week until June 10 at the earliest. His lawyer told Reuters he had not asked for a pardon, and Gallagher declined to comment on the possibility of presidential clemency when asked by reporters in court.
The prospect of Trump offering Gallagher a pardon seemed heightened by this week's appointment to his defense team of former federal prosecutor Marc Mukasey, one of Trump's personal lawyers and an associate of fellow Trump attorney Rudolph Giuliani, the former New York City mayor.
Another Giuliani associate, ex-New York Police Commissioner Bernie Kerik — who served three years in prison in a federal corruption case — is an investigator on Gallagher's defense team.
Mukasey, in an interview with Reuters on Thursday, dismissed the notion of seeking a pardon for Gallagher.
"I have a job to do in the courtroom. I have no clue whether anything else is going on," he said.
Gallagher's wife, Andrea, denied any suggestion of impropriety over a lawyer for the commander-in-chief joining her husband's court-martial defense.
"There is no direct conflict in my mind," she told Reuters on Friday. "Marc Mukasey has not talked to the president. The president has not talked to him. So I think that this insinuation that a lawyer representing one individual that's also representing another is actually just stringing together a conspiracy that's non-existent."
Gallagher's lead civilian attorney, Timothy Parlatore, told reporters on Wednesday following a hearing at Naval Base San Diego: "If the president decides to step in, that's what the commander does."
Trump first weighed in on the Gallagher case publicly in March, ordering the defendant moved to less restrictive pre-trial confinement "in honor of his past service to our country."
A number of conservative commentators have urged him to pardon Gallagher. Critics say it would preempt justice, undermine military discipline and send a message that battlefield atrocities will be tolerated.
The overwhelming majority of pardons are granted to people who have already been convicted and served time for a federal offense, as when Trump earlier this month pardoned former Army Lieutenant Michael Behenna, who served five years in prison for killing an Iraqi prisoner in 2008.
But presidents have occasionally granted pardons preemptively to individuals accused of or suspected of a crime.
The most famous such case was the blanket pardon President Gerald Ford bestowed on his predecessor, Richard Nixon, following Nixon's resignation during the Watergate scandal.
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a3185c4f9e7c85cf112dd7563b872423 | https://www.cnbc.com/2019/05/28/asia-markets-trumps-japan-visit-us-china-trade-currencies-in-focus.html | Stocks in Asia gain as Trump concludes Japan visit amid hopes of a trade deal | Stocks in Asia gain as Trump concludes Japan visit amid hopes of a trade deal
Shares in Asia were higher on Tuesday, as U.S. President Donald Trump concluded his state visit to Japan.
The Nikkei 225 in Japan added 0.37% to close at 21,260.14, while the Topix index rose 0.26% to finish the trading day at 1,550.99. Shares of semiconductor equipment manufacturer Tokyo Electron jumped 2.7% following the announcement of a share buyback, Reuters reported.
The MSCI Asia ex-Japan index rose 0.18% to 500.63, as of 3:09 p.m. HK/SIN.
In South Korea, the Kospi gained 0.23% to close at 2,048.83. Over in Australia, the advanced 0.51% to finish its trading day Down Under at 6,484.80.
Mainland Chinese stocks were higher on the day, with the Shanghai composite gaining 0.61% to about 2,909.91 and the Shenzhen component adding 0.62% to 9,035.69. The Shenzhen composite rose 0.53% to around 1,541.65.
In Hong Kong, the Hang Seng index was around 0.2% higher, as of its final hour of trading, with shares of Chinese tech giant Tencent gaining 1.05%.
Trump ended his four-day state visit to Japan on Tuesday, a day after his news conference with Japanese Prime Minister Shinzo Abe, as the two countries seek to hash out a trade deal.
Trump said his goal was to remove trade barriers so as to give U.S. exports a fair footing in Japan, but he also described the U.S. trade imbalance with Japan as "unbelievably large" and expressed hopes to address that.
"The issues that America has with China, it also has ... in theory with Japan on tariffs although ... as you can see from what Trump is saying, he obviously feels closer to Japan," Hugh Young, head of Asia-Pacific at Aberdeen Standard Investments, told CNBC on Tuesday.
The U.S. president's visit to Japan comes amid a protracted trade war between Washington and Beijing, with China standing firm against the demands of the U.S. to change its state-run economy. Trump said Monday the U.S. is "not ready" to sign a deal with China yet.
"I think the market ... has already started to price in that the tension would be protracted," Eugenia Victorino, head of Asia strategy at SEB, told CNBC's "Street Signs" on Tuesday.
"I would expect that there is very little downside with respect to the dollar-Asian currencies at this point" unless the U.S. proceeds to impose higher tariffs on all Chinese exports, she said. "Having said that, we are still very much lacking growth in the region which would really not prop up the assets.
China's giant state-owned enterprises control strategic industries such as energy, telecommunications and defense. Since those companies benefit from favorable policies and subsidies, foreign companies complain of an unfair advantage. The escalating trade dispute between the U.S. and China has focused on allegations of the coerced surrender of proprietary technology and the trampling of intellectual property rights.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.777, after seeing a high of 97.836 earlier, but still off last week's levels of above 98.1.
The traded at 109.50 against the dollar after weakening from levels around 109.3 in the previous session. The changed hands at $0.6921 after touching an earlier low of $0.6914.
Oil prices were mixed in the afternoon of Asian trading hours, with the international benchmark Brent crude futures contract slipping 0.36% to $69.86 per barrel, while U.S. crude futures added 0.53% to $58.94 per barrel.
— Reuters and CNBC's Evelyn Cheng contributed to this report.
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f01a1b0939a6b9cdc51bba17353a7f49 | https://www.cnbc.com/2019/05/28/climate-change-can-pose-big-risks-to-real-estate-investments.html | Climate change can pose big risks to real estate investments | Climate change can pose big risks to real estate investments
Climate change could dramatically alter the value of real estate investments.
And that goes for real estate investment trusts, companies that own income-producing real estate, if they do not shift their investment strategies to address growing risks, industry experts say.
A 2018 report found that 35% of REIT properties have geographic exposure to climate hazards, including inland flooding, typhoons or hurricanes, and coastal flooding and elevated sea levels. The research evaluated 73,500 properties owned by 321 REITs.
Getty Images
The report, which was published by climate analytics firm Four Twenty Seven and real estate technology company GeoPhy, did not take into account what the properties were doing to address those threats.
"I see elevated risk when it comes to REITs that might be overexposed in areas that are close to sea level and coastal," said Andre Shepley, product manager and research team leader at Truvalue Labs, a provider of sustainability data analytics.
But for individuals who want to invest in REITs with climate risks in mind, there's good news: Environmental, social and governance, or ESG, investment strategies in this sector are growing.
The number of property funds and REITs that use ESG strategies climbed to 108 in 2018, with $272.4 billion in assets, according to US SIF: The Forum for Sustainable and Responsible Investment, an advocacy organization. That is up from 30 strategies and $24.4 billion in assets in 2010.
"We're seeing fast growth in that specific segment over eight years," said Meg Voorhes, director of research at US SIF.
Getting more investors investing on a sustainable basis will encourage more companies to adopt more responsible behaviors.Sam AdamsCEO and co-founder of Vert Asset Management
Still, that asset growth is not as strong as private equity and venture capital sectors have seen in that time, Voorhes said.
The top ESG criteria that those strategies were looking for in 2018 included governance; climate change and carbon; community relations and philanthropy; pollution and toxics; and green building and smart growth, according to US SIF.
"Getting more investors investing on a sustainable basis will encourage more companies to adopt more responsible behaviors," said Sam Adams, CEO and co-founder of Vert Asset Management, an ESG asset manager.
"That's the mission: Make sustainable investing easier so that more money moves into sustainability and public companies are encouraged to adopt ESG practices," Adams said.
For investors who are looking to incorporate sustainable REITs into their portfolios, there are new developments popping up to help make that easier.
In December, global index, data and analytics provider FTSE Russell launched indexes aimed at helping investors assess climate risk in their real estate portfolios.
The FTSE EPRA Nareit Green Indexes were created to provide a sustainable extension to the FTSE EPRA Nareit Real Estate Index Series.
So far, one index has launched, but there are plans to expand to a number of strategies, according to Tony Campos, head of ESG, Americas at FTSE Russell.
The initial launch includes one green developed index. The product evaluates the green building metrics within each REIT and then weights them in the index based on how well they score, Campos said.
Those measurements include energy use, carbon emissions and green building certifications. The companies with better green metrics are over weighted, while the ones that have lower scores are under weighted.
There are currently no investment products based on the index. For investors, it can help provide evidence that a green-tilted REIT strategy can perform well, Campos said.
"By comparing that to a standard strategy, you're able to see the difference, both from a performance and risk perspective, but also from a climate and environmental perspective," Campos said.
FTSE Russell's clients predominantly include asset managers and asset owners. For individual investors, that means they have to be working with a financial advisor who has access to this strategy in order to utilize it.
When Vert Asset Management asked financial advisors what asset class in sustainable investing hadn't gotten enough attention from asset managers, one of the top answers was real estate.
In 2017, the company launched a mutual fund — Vert Global Sustainable Real Estate Inst — focused on ESG real estate investments.
"We choose the REITs that are most committed to sustainability out of all the publicly listed REITs in the world, and then we buy and hold them," Adams said.
The qualities Vert is looking for include efforts to reduce greenhouse gas emissions, good corporate governance and green building certifications, among others.
The company screens out REITs that have ties to the fossil fuel industry or prisons. It also scores REITS based on how well they are adapting to risks like rising sea levels, floods, heat and water stresses, and hurricane risks.
"We want to own the REITs that are aware of those risks and are taking steps to address them in their portfolio," Adams said.
Vert is predominantly working with financial advisors, according to Adams. But individual investors can also access the funds through firms like Charles Schwab, Fidelity and TD Ameritrade.
More from Impact Investing:Use Bogle's investing strategy, keep socially responsible focus Solutions let homeowners cut costs, help environmentWorkers want socially responsible investments in 401(k) plans
At $23.4 million in total assets, the fund is relatively small. But its strategy has been getting noticed by professionals in the industry.
That includes John Gugle, who serves as chief investment officer and business development manager at Alpha Financial Advisors, an independent fee-only investment management firm that is starting to integrate more ESG strategies for its clients.
Gugle saw Adams speak at an April industry event, he said, and was impressed with Adams' vision of global sustainability. Gugle's firm hasn't integrated the fund into its lineup at this point. However, it could be helpful in the event they want to swap out a more traditional real estate fund for an ESG-minded client, Gugle said.
Gugle said he sees Vert's fund as part of a bigger wave of ESG products that will come to market.
"If you're an investor wanting this, be patient. It's coming," Gugle said. "There's more companies doing it. It used to be more of a boutique thing. I think it's going mainstream now."
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14e9b7c74907afa7322cb2ee27384a08 | https://www.cnbc.com/2019/05/28/sp-might-fall-into-correction-before-finding-a-bottom-charts-suggest.html | S&P might fall into correction before finding a bottom, charts suggest | S&P might fall into correction before finding a bottom, charts suggest
VIDEO3:5903:59More than half the S&P 500 in correction or worseTrading Nation
It's been a May of mayhem for markets, and the charts suggest the might have further to fall before it finds support.
"There's probably more pain to come through the summer months," said Craig Johnson, chief market technician at Piper Jaffray, on CNBC's "Trading Nation" on Friday. "When I look at the chart of the S&P 500 ... that's not a chart that suggests that we're setting ourselves up for the next move being higher. It looks like ... some sort of head-and-shoulders top, either a double top, triple top."
The S&P 500 has fallen 4% in May, pulling back on uncertainty surrounding the U.S. and China trade talks. This weakness comes after an exceptionally strong stretch for the benchmark index — from the end of 2018 to April, the S&P 500 had rallied nearly 18%.
Following the May sell-off, the S&P 500 now faces its next critical test, says Johnson.
"I would say 2,800 is really the line in the sand between the bulls and the bears, and a break below that would suggest that we could see a pullback perhaps to about [2,650], which is about a 50% retracement from the lows we've seen in December to the April-May highs," said Johnson.
Johnson's 2,650 pullback level implies 6% downside from current levels. It would also push the S&P 500 into a correction, representing a more than 10% drop from its May 1 record.
Steve Chiavarone, portfolio manager at Federated Investors, agrees that the worst might not be over for markets.
"It's certainly possible that the sell-off here isn't done. Our view is that we're kind of stuck in the mud here where you've got some downside risk because we don't have resolution on [trade]," Chiavarone said during the same segment.
However, unlike during the worst of December's sell-off, Chiavarone says a patient Fed willing to hold on rates should put a floor underneath the market until the next catalyst arrives.
"We don't see big downside," he said. "It's hard to see big upside, though, with this level of uncertainty, so we're looking for areas that are relatively stronger. Dividend payers — they're benefiting from the Fed being on the sidelines. ... There's an opportunity for small caps which are a little bit more domestically focused and also benefit from lower rates."
The SDY S&P dividend ETF has fallen 3% this month, a shallower drop than on the S&P 500. The IWM Russell 2000 ETF, which tracks small-cap stocks, has fallen 5%.
Disclaimer
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85116176335479c790f2b0d150c03762 | https://www.cnbc.com/2019/05/28/stocks-making-the-biggest-moves-premarket-fiat-chrysler-uber-alibaba-beyond-meat-more.html | Stocks making the biggest moves premarket: Fiat Chrysler, Uber, Alibaba, Beyond Meat & more | Stocks making the biggest moves premarket: Fiat Chrysler, Uber, Alibaba, Beyond Meat & more
VIDEO0:4200:42Markets expected to open flat on uncertainty surrounding tradeMorning Report
Check out the companies making headlines before the bell:
Fiat Chrysler — Fiat Chrysler is seeking a merger with French automaker Renault, in a deal that would see each side take a 50% stake in a merged entity. The proposal would create the world's third largest automaker by production.
Uber — Uber announced that Ryan Graves has resigned from its board of directors. Graves was the first employee hired by Uber and briefly served as the ride-hailing company's CEO.
Alibaba — The China-based e-commerce giant is considering a listing in Hong Kong that would raise as much as $20 billion, according to Reuters.
Nasdaq — Nasdaq has pulled out of the bidding for Norway's Oslo Bors, after Norway rejected Nasdaq's argument that the stock exchange takeover should not be allowed if less than a two-thirds stake was bought. Euronext is now the only bidder, after receiving approval for its bid for more than 50% of the exchange.
Teva Pharmaceutical — The drugmaker agreed to an $85 million settlement with the state of Oklahoma over claims it was among the parties responsible for the state's opioid crisis. A trial is set to begin today in which Johnson & Johnson will face a similar accusation
Molson Coors — Molson Coors won a partial victory in its legal dispute with rival beer brewer Anheuser-Busch InBev. A court ruled that Bud Light commercials could not claim that Molson's MillerCoors unit used corn syrup in its light beers.
Meredith Corp. — Meredith struck a deal to sell Sports Illustrated magazine for $110 million to licensing company Authentic Brands Group. However, Meredith will still publish the iconic publication and manage its website.
Global Payments — Global Payments and Total Systems Services have agreed to an all-stock merger of equals. The two payment technology companies expect the transaction to close during the fourth quarter.
Beyond Meat — J.P. Morgan Securities initiated coverage of the plant-based burger company with an "overweight" rating and a $97 per share price target, noting an "extraordinary" growth opportunity in a market it thinks will expand by 100 times from current levels over the next 15 years.
Activision Blizzard — Goldman Sachs upgraded the videogame producer to "buy" from "neutral" and added the stock to the "Conviction Buy" list, noting the potential positive impact of new and upcoming content.
Southwest Airlines — Evercore downgraded Southwest to "in-line" from "outperform", pointing to the negative impact that the grounding of Boeing's 737 MAX jet has had on the air carrier.
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4fe29bd2119b8ea8f699cfe909ce6a8c | https://www.cnbc.com/2019/05/30/wall-street-likes-cisco-as-tech-stock-resistant-to-the-trade-war.html | Wall Street likes Cisco as the tech stock 'safe haven' from the trade war | Wall Street likes Cisco as the tech stock 'safe haven' from the trade war
Chuck Robbins, CEO of Cisco, speaking at the 2019 WEF in Davos, Switzerland on Jan. 23rd, 2019.Adam Galica | CNBC
J.P. Morgan is the latest Wall Street firm to recommend Cisco Systems, saying in a note Thursday that investors trying to protect themselves from the trade war should look to the stock as a technology company with little exposure in China.
"Investors are mindful of stocks with high exposure to China and/or Huawei. We continue to recommend [Overweight] rated Cisco as our top pick for investors as a relative safe haven in this macro backdrop catalyst," J.P. Morgan analyst Samik Chatterjee said in the note.
The nod from J.P. Morgan comes after Bank of America highlighted Cisco's "relatively low exposure to China," especially when compared with some of the other biggest tech stocks. Known as FAANG – Facebook, Apple, Amazon, Netflix and Google parent Alphabet – top tech stocks have been among the hardest hit by the heightened trade risk from China, falling 5% to 11% this month.
Cisco shares have fallen 4.3% this month, by comparison. Both J.P. Morgan and Bank of America see upside in part due to Cisco's limited exposure to China, as well as improving overall prospects.
Only 3.3% of Cisco's revenue comes from China, according to FactSet.
Additionally, with Chinese competitor Huawei caught in the middle of the trade war, Chatterjee said Cisco has the "potential to benefit from market share moderation for Huawei led by the component shortages in multiple product categories."
J.P. Morgan also pointed to Ciena, another technology infrastructure company, as a similarly protected stock that could benefit from the pullback in Huawei's reach.
"Led by strong leadership in execution, we find both Cisco and Ciena well positioned to benefit if Huawei's market share were to moderate," Chatterjee said.
Beyond the FAANG stocks, Goldman Sachs in a note on Tuesday warned investors about a host of companies "with explicit sales exposure to China." Some of the top companies listed were Qualcomm (65%), Broadcom (54%), Micron Technology (51%), Western Digital (39%), Intel (24%) and Nvidia (20%), according to Goldman Sachs.
Correction: This story was revised due to incorrect information about the extent of Netflix' business in China. Netflix says it does not receive material revenue from China. Also, Cisco shares have fallen 4.3% in May. An earlier version misstated the move.
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2b3edeb31788045680f771764b6368ab | https://www.cnbc.com/2019/05/31/fed-officials-and-trumps-latest-trade-threat-could-decide-whether-june-starts-with-a-market-swoon.html | Fed officials and Trump's latest trade threat could decide whether June starts with a market swoon | Fed officials and Trump's latest trade threat could decide whether June starts with a market swoon
Federal Reserve Chairman Jerome Powell holds a news conference following the two-day Federal Open Market Committee (FOMC) policy meeting in Washington, U.S., March 20, 2019.Jonathan Ernst | Reuters
Federal Reserve officials speaking at a policy conference may get a lot more attention than usual in the week ahead after President Donald Trump's latest tariff threat against Mexico ramped up expectations for interest rate cuts.
Markets will also start the month of June, which is often flat for markets, coming off a painful 6.6% monthly loss in the S&P 500.
Stocks lost ground in May on worries that the U.S. trade war with China would hurt the global economy and bite into earnings growth. They will begin trading in June with new worries that tariffs on Mexico could hurt the economy and threaten a new trade deal between the U.S., Mexico and Canada.
The coming week has a full calendar of economic data, with the highlight being Friday's May employment report. There are also monthly auto sales and Institute for Supply Management manufacturing data due Monday, and international trade data expected Thursday.
VIDEO9:4809:48Fighting the two-front trade warFast Money
But it is the Fed that should get the most attention, with central bank officials gathering at a much-anticipated conference hosted by the Chicago Fed Tuesday and Wednesday. Fed Chair Jerome Powell will make the opening remarks at the conference, which is about monetary policy strategy, tools and communications. For months, strategists have been hoping the conference will provide insight into how the Fed intends to address sluggish inflation.
Interest in the event is even higher after the market and Fed watchers are increasingly convinced the central bank will now cut rates this year, and maybe more than once. The futures market priced in increasing expectations for two rate cuts after Trump's threat to put tariffs on all Mexican goods if the Mexican government does not stop immigration into the U.S.
After the last Fed meeting, Powell said low inflation appears to be transitory, suggesting the Fed would not have to cut rates, but markets still anticipate a rate cut, and inflation continues to run below the Fed's 2% target.
Michael Gapen, Barclays chief U.S. economists, said investors hoping to hear Fed officials discuss their thinking on current policy could be disappointed. Gapen said the Fed is also about nine months away from its decision on how it will frame inflation, and the conference will be more about academic views on it.
Gapen was one of several Wall Street economists Friday who changed his view on the Fed's rate policy. He said he now sees the Fed cutting the fed funds target rate by 75 basis points in two cuts this year, with the Fed starting at 50 basis points in September. The Fed has said does not foresee any rate cuts this year, nor hikes, and has stressed it is on hold.
Gapen does not expect to hear much from Fed officials at the conference on rates, though investors will be combing through every word looking for policy clues.
"I don't think that's the type of setting where anyone would make a monetary policy comment in advance of an FOMC meeting," he said. The Fed next meets on June 18 and 19.
Gapen said he went from expecting no Fed move to two rate cuts because the trade war with China has become more extended than expected; manufacturing and business spending are weakening, and because of Trump's threat to put tariffs on Mexico if it doesn't control immigrants heading into the U.S. over the southern border.
"It does suggest the administration is willing to pursue multiple fronts. It lowers the bar for tariffs on Europe," he said.
VIDEO1:4601:46Markets ready to rally before Mexico tariff threatClosing Bell
Interest rates continued to slide Friday, to multi-year lows. The 2-year yield, which most reflects Fed policy, fell sharply and was at 1.93% in late trading. The 10-year yield, at 2.55% in early May, was at 2.13% Friday afternoon. The S&P 500 was down 2.6% for the week, ending its worst week of the year at 2,752.
Sam Stovall, CFRA chief market strategist, said a "May mauling usually leads to a boom in June." Going back to World War II, whenever there was a strong start to the year, the market traditionally fell in May but rose in June. Plus, this year was the third best start through April.
John Augustine, chief investment officer at Huntington Private Bank, said beyond the trade headlines, there are quite a few market catalysts in June.
"June is going to be very event-driven. It's going to be the Fed on June 19. It's going to be OPEC on June 25; it's going be the G-20 on June 29," he said.
He added, "We're going to stay balanced and diversified because we don't know how things are going to come out."
Monday
Monthly auto sales
9:10 a.m. Fed Vice Chair Randal Quarles
9:45 a.m. Manufacturing PMI
10:00 a.m. ISM manufacturing
10:00 a.m. Construction spending
12:40 p.m. Richmond Fed President Tom Barkin
9:45 p.m. San Francisco Fed President Mary Daly
Tuesday
7:00 a.m. Chicago Fed President Charles Evans on CNBC's "Squawk Box" ahead of 2-day conference on 'Monetary Policy Strategy, Tools, and Communication Practices (A Fed Listens Event)'
9:55 a.m. Fed Chair Jerome Powell opening remarks and takes questions at 2-day policy conference, Chicago Fed
10:00 a.m. Factory orders
3:45 p.m. Fed Governor Lael Brainard at Chicago Fed conference
6:45 p.m. Dallas Fed President Robert Kaplan, Chicago Fed conference
Wednesday
8:15 a.m. ADP
9:45 a.m. Fed Vice Chair Richard Clarida, Chicago Fed conference
9:45 a.m. Services PMI
9:45 a.m. Atlanta Fed President Raphael Bostic on housing in Atlanta
10:00 a.m. Fed Governor Michelle Bowman at Senate Banking Committee
10:00 a.m. ISM nonmanufacturing
11:15 a.m. Boston Fed President Eric Rosengren, Chicago Fed conference
2:00 p.m. Beige book
Thursday
7:45 a.m. ECB rate decision
8:30 a.m. Jobless claims
8:30 a.m. International trade
8:30 a.m. Productivity
8:30 a.m. Labor Costs
10:00 a.m. QSS
1:00 p.m. New York Fed President John Williams at CFR
Friday
8:30 a.m. Employment
10:00 a.m. Wholesale trade
3:00 p.m. Consumer credit
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094f7fd568dc3c530dc9f3f6c4750516 | https://www.cnbc.com/2019/05/31/oil-market-us-tariffs-on-mexico-iranian-oil-sanctions-in-focus.html | US oil falls 5.5% to $53.50 per barrel on fresh trade worries | US oil falls 5.5% to $53.50 per barrel on fresh trade worries
A pump jack operates at a well site leased by Devon Energy Production Co. near Guthrie, Oklahoma.Nick Oxford | Reuters
Oil slumped on Friday, on track for its biggest monthly drop in six months, after U.S. President Donald Trump stoked global trade tensions by threatening tariffs on Mexico, one of the largest U.S. trade partners and major supplier of crude oil.
Brent crude futures fell $2.40, or 3.59%, to $64.47 a barrel. U.S. West Texas Intermediate (WTI) crude futures fell 5.5% to $53.50 per barrel.
Session lows for both contracts were the lowest since March 8.
Trump vowed on Thursday to ratchet up tariffs unless Mexico stopped people from illegally crossing into the United States. The plan would impose a 5% tariff on Mexican imports starting on June 10 and increase monthly, up to 25% on Oct. 1.
That could hit the lucrative cross-border energy trade.
"U.S. refiners import roughly 680,000 barrels per day of Mexican crude. The 5% tariff adds an extra $2 million to the cost of their daily purchases," PVM analysts said.
The United States also exports more fuels to Mexico than any other country, according to the U.S. Energy Department, though so far Mexico has not said whether it would retaliate.
The threat compounds concerns about global economic growth, already at risk due to the U.S.-China trade war. That dispute has prompted worries about a recession..
Additional levies by Beijing on the majority of U.S. imports on a $60 billion target list are due to take effect on Saturday. The tariffs are in response to Washington's move earlier this month to slap further tariffs of up to 25% on $200 billion of Chinese goods.
A Reuters survey showed Brent crude prices are likely to hold near $70 a barrel for the remainder of the year as elevated supply risks in the Middle East offset risks to demand.
Top oil exporter Saudi Arabia's increased output in May was not enough to compensate for lower Iranian exports, a Reuters survey found. The Organization of the Petroleum Exporting Countries is expected to meet late June. At the beginning of the year, OPEC and allies agreed to cut production by 1.2 million bpd.
U.S. production has offset that decline, as output returned to a record 12.3 million barrels per day, and as U.S. crude stocks fell less than expected last week, according to weekly figures.
"This fresh tariff headline offers a 'pile on' effect to an oil market that has already been seeing downside pressure from some unexpectedly large U.S. crude supply increases that have been weighing on values across this month of May," Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.
U.S. energy firms this week increased the number of oil rigs operating for the first time in four weeks but cut the rig count for the sixth straight month as most drillers cut spending plans. Companies added three oil rigs, General Electric Co's Baker Hughes energy services firm said Friday.
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aa85a540d635ae895c842f677342e27c | https://www.cnbc.com/2019/06/01/airbus-issues-warning-over-escalation-of-us-eu-dispute.html | Airbus issues warning over escalation of US-EU dispute | Airbus issues warning over escalation of US-EU dispute
Airbus exhibition stand showing Airliner fleet of A350, A380, A320 and A330 at the Farnborough Air Show, England.Richard Baker | Corbis Historical | Getty Images
Airbus has issued a warning about any escalation of the dispute over aircraft subsidies between the U.S. and the European Union, saying proposed tit-for-tat tariffs will hit the supply chain and the consumer.
The U.S. and the EU have threatened billions of dollars' worth of tariffs be imposed on goods including aircraft, the latest step in a long-running transatlantic dispute at the World Trade Organization.
Airbus Chief Commercial Officer, Christian Scherer, told CNBC that the proposed tariffs "defy economic logic," saying they will end up hurting the consumer.
"What would immediately happen would be retaliation, trade barriers going up, the price of airplane increases, which means airlines have higher costs which they then pass on to the consumer, and then everything slows down."
Speaking with CNBC's Chery Kang on the sidelines of the annual IATA General Meeting, Scherer added that the company's predominantly American-based supply chain would be hurt by the ripple effect of the tariffs, with around 40% of all aircraft-related procurement coming from the United States.
U.S. President Trump last month said his administration would move ahead with tariffs on $11 billion worth of goods, with the USTR claiming the subsidies provided by the European Union to Airbus have adversely affected the United States.
VIDEO14:4714:47Why Airbus and Boeing dominate 99% of the large plane marketParis Air Show
Airbus has been calling for an end to the long-running dispute, saying that the escalation will create a lose-lose situation for both Airbus and its U.S. competitor Boeing.
"This recent move by our colleagues in America calls for concern, and again not just for Airbus, or Airbus and Boeing, those stand to be in a lose-lose position if this goes through, but for the whole ecosystem, the whole supply chain, largely American, and the consumer at large," Scherer said.
Speaking about the upcoming exit of the United Kingdom from the European Union, Scherer says that Airbus can weather Brexit but has its contingencies in preparation for changes to customs and regulation.
"What that means is we have to anticipate that, maybe make some buffer stocks, maybe make arrangements to pre-position parts, sub assembly, so we are not impacted by a potential slowdown in the traffic of goods or people."
Scherer adds that Brexit, while creating a new barrier to trade, will result in higher costs through the business and its ecosystem.
VIDEO8:2808:28How JetBlue plans to stay relevant
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2a860812d30be8d20beb5fe20ad192fe | https://www.cnbc.com/2019/06/03/boeing-plans-to-fly-a-boeing-737-max-certification-flight-soon-ceo-says.html?__source=twitter%7Cmain | Boeing CEO says troubled 737 Max jets should be flying by the end of the year | Boeing CEO says troubled 737 Max jets should be flying by the end of the year
Boeing Chief Executive Dennis Muilenburg speaks during a press conference after the annual shareholders meeting at the Field Museum on April 29, 2019 in Chicago, Illinois.Jim Young | Getty Images
Boeing's CEO Dennis Muilenburg on Monday said it is conducting simulated flights with air-safety regulators this week and plans to fly its 737 Max aircraft with the Federal Aviation Administration "very soon" to get the grounded planes cleared to return to airline service.
Aviation officials worldwide grounded the planes in mid-March in the wake of two deadly crashes of the aircraft within five months of one another. The two crashes killed a total of 346 people.
Muilenburg said he expects that the planes will get a green light to fly again by the end of the year, but declined to provide a timeline.
The Federal Aviation Administration is participating in simulated flights with Boeing this week, Muilenburg said in an an interview with CNBC's The Exchange. After that step, Boeing plans to schedule actual test flights.
Boeing has completed a software update for an anti-stall system that has been implicated in the two crashes.
Airlines that have purchased the 737 max, including American Airlines, United Airlines and Southwest Airlines have canceled thousands of flights due to the grounding and have scrambled to meet demand during the peak summer travel season.
The manufacturer will have to repair "damaged trust" of the flying public, Muilenburg said. Some airlines have said they won't charge passengers skittish about the planes to switch to flights operated with other aircraft.
VIDEO3:2103:21Boeing CEO Dennis Muilenburg on 737 Max crisisThe Exchange
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8f7d29aaa6522b7c23523d947d6b3f70 | https://www.cnbc.com/2019/06/04/closing-a-credit-card-account-can-hurt-your-credit-score-survey.html | Closing a credit card account can actually hurt your credit score, survey finds | Closing a credit card account can actually hurt your credit score, survey finds
skynesher | E+ | Getty Images
Finally paid off that high-interest credit card balance? Great, but think twice before cutting up the plastic and closing the account.
That's because doing so won't help your credit score — and might actually hurt it, according to Bankrate.com.
More from Personal Finance:How old is too old to still live with your parents?These moves can tank your credit scoresDebt management impacts retirement dreams
"You should keep old accounts open to boost your credit score, because scoring algorithms look favorably upon longstanding accounts and more available credit," said Bankrate.com analyst Ted Rossman.
Fifty-eight percent of Americans in a survey didn't know that closing a credit card account can actually hurt your credit score, according to a survey of 2,582 people conducted this May by Bankrate.com, a New York-based consumer financial services company. A similar 61% have canceled at least one card in their lifetime, while 37% have canceled more than one. Older and/or wealthier cardholders, along with Midwesterners, are more likely to close card accounts.
Thirteen percent of card cancelers erroneously think doing so will improve their credit scores, 15% think closing an account has no effect, while 29% have no idea. Only 42% correctly believe it decreases scores. (Percentages do not add up to 100% due to rounding.)
In fact, Shrewsbury, Massachusetts-based Mercator Advisory Group has found that credit card closure rates have more than doubled in the past five years while new account openings have leveled out, according to Bankrate.com.
Other common reasons for taking scissors to plastic include having paid off debt (40%) and lack of card use (36%). The average U.S. card holder has 3.7 active credit card accounts, of which two, on average went unused in the past month, Bankrate.com found.
VIDEO2:0602:06How a FICO credit score affects your lifeInvest in You: Ready. Set. Grow.
Why else do consumers clip their cards? High interest rates (36%) and high annual fees (28%). If you're paying an annual fee for a card you feel you're not getting much value from anymore, Bankrate.com recommends asking the card issuer to downgrade you to a card without an annual fee.
"A product change like that will not hurt your credit score because it maintains the account history and credit line," Rossman said.
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6889ad412e50d3fc34b896a2ae3fc4cf | https://www.cnbc.com/2019/06/04/it-would-be-very-hard-for-tiananmen-protests-to-happen-again-expert.html | It would be 'very hard' for anything like Tiananmen protests to happen again, says former US diplomat | It would be 'very hard' for anything like Tiananmen protests to happen again, says former US diplomat
A Chinese soldier stands guard in front of Tiananmen Gate outside the Forbidden City in Beijing.Getty Images
It would be "very hard" for anything like the pro-democracy demonstrations at Beijing's Tiananmen Square in 1989 to happen again, a former diplomat to China said on the 30th anniversary of the event's final day.
On June 4 of that year, the Chinese military opened fire to end the student-led protests, killing a still-undetermined number of people and shocking the world with images of the crackdown — including that of the famous "tank man."
"Prior to June 4, 1989 and the whole spring of Tiananmen, you had a period of relative openness in China in which people were free to read, to discuss ideas, to interact with foreigners; it was a highly idealistic period as Chinese people got to know the rest of the world and recover from the Maoist period," said Robert Daly, a former U.S. diplomat to China.
Thirty years since the day of the bloody crackdown, China has grown steady into the world's second-largest economy, and its people have been accorded more freedom to travel and to choose their line of work. Still, that doesn't mean the spirit of 1989 is poised to again take hold.
"It's a consumerist society, so you don't have the same kind of idealism," said Daly, who is now the director of the Kissinger Institute on China and the United States at the Woodrow Wilson Center.
Other experts echoed the notion that China's economic gains have contributed to less interest in activism.
"Since '89, China has decided that politically they will clamp down on all dissent. They will concentrate all the resources on developing the economy, and they have done it exceptionally well," added Francis Lun, CEO at GEO Securities in Hong Kong.
"This has been the policy of Chinese government since '89: develop the economy, let people enjoy economic success so they will not ask for political reforms — and so far, they have succeeded," Lun told CNBC.
This is an especially sensitive year for the Chinese leadership, with the Tiananmen anniversary on Tuesday and the 70th anniversary of the founding of the People's Republic of China in October.
The Tiananmen crackdown remains a taboo subject in China and Beijing has never released a death toll. Estimates from human rights groups and witnesses range from several hundred to the thousands.
Financial information provider Refinitiv, under pressure from China's government, has removed from its Eikon information terminal several Reuters news stories related to the sensitive anniversary. Refinitiv has a license to provide financial information in China.
Refinitiv took the action to block the stories last week after the Cyberspace Administration of China (CAC), which controls online speech, threatened to suspend the company's service in China if it did not comply, three people with knowledge of the decision told Reuters.
Censorship of the internet in China has been intensifying under President Xi Jinping, and businesses have come under growing pressure to block content that Beijing sees as sensitive.
Technology has played a key role in consolidating the control of the Chinese Communist Party, said GEO Securities' Lun.
"They can control the thoughts of everybody, including dissenters, in China ... At any slightest hint of dissent, they will snuff it out," Lun said.
VIDEO0:2600:26Tiananmen Square concerns us directly: Hong Kong activistSquawk Box Asia
Nationalist Chinese newspaper The Global Times, which is run by the Communist Party-owned People's Daily, calls the events of June 4 at Tiananmen Square a "faded historical event" and deemed the country's "dropping the incident" a "political success."
"As a vaccination for the Chinese society, the Tiananmen incident will greatly increase China's immunity against any major political turmoil in the future," the newspaper said in an opinion piece published on Monday.
Meanwhile, China's embassy in the U.S. expressed "strong dissatisfaction" on Tuesday towards the Secretary of State Mike Pompeo's remarks commemorating the anniversary of the massacre.
Pompeo called on Beijing on Monday to mark the June 4 anniversary by releasing all prisoners jailed for fighting human rights abuses in China.
"Such a step would begin to demonstrate the Communist Party's willingness to respect human rights and fundamental freedoms," Pompeo said.
A statement from the embassy charged that Pompeo's comments on the anniversary were made "out of prejudice and arrogance" and grossly interfered with China's internal affairs. "China's human rights are in the best period ever," it said.
The Chinese Special Administrative Region of Hong Kong is holding a candle light vigil to remember the events of June 4 at Tiananmen Square, but little will change for political freedoms in the financial hub, said Lun.
"As far as the call for political reform, for more freedom in Hong Kong, (Chinese officials) just ignore it," Lun said. "And what can Hong Kong do? Nothing."
Beijing's control of information over the events of 1989 is not lost on Taiwan, a self-ruled island that China claims as its territory.
"The Chinese government not only did not plan to repent for the past mistake, but it also continued to cover up the truth," Taiwan President Tsai Ing-wen wrote in a Chinese-language Facebook post on Tuesday.
"Please be reassured — Taiwan will definitely defend democracy and freedom. Regardless of threats and infiltration, as long as I'm the president, Taiwan would not bow to pressure," Tsai added.
The post, which was accompanied by a cartoon of Tsai holding a candle, also expressed concern for China's "erosion of freedom" in Hong Kong, which was returned to Chinese rule in 1997 under a "one country, two systems" formula.
Despite concerns about Beijing's tightening grip on Hong Kong, the city's economic success will mean that the status quo is unlikely to change much — because money talks, said GEO Securities' Lun.
"Hong Kong remains the only free city in China. All the rich people, all the financial institutions want to have a foothold in Hong Kong so that they can trade freely with the rest of the world," said Lun.
"If you live and work in Hong Kong, you are used to (the) presence of Chinese government in all ways of life — you just cannot escape it. So you have less press freedom, dissenters failing to get entry into Hong Kong," Lun added. "But still, compared with China, Hong Kong is a free place and people enjoy economic success here, so Hong Kong is still doing fine."
—Reuters contributed to this report.
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474d27bb930b60118443c46e50a2e8a1 | https://www.cnbc.com/2019/06/05/amazon-debuts-its-new-delivery-drone.html?&qsearchterm=amazon%20drone | Amazon debuts its new delivery drone | Amazon debuts its new delivery drone
VIDEO1:0101:01Amazon's new drones can make deliveries in a half hourNews Videos
Amazon debuted its newest delivery drone at its re:MARS conference in Las Vegas on Wednesday.
The delivery vehicle is part of a push inside Amazon to speed up its delivery times for Prime members. It's just begun to roll out free one-day shipping to Prime members in North America. The company said in a blog post it believes autonomous drones can help it reduce shipping times.
Jeff Wilke, CEO of the company's worldwide consumer division, revealed onstage at the conference that Amazon has created a new, electric delivery drone that should be used "within months" to deliver packages to customers. The drones can carry packages under 5 pounds to customers within a half-hour and can fly up to 15 miles, according to Wilke.
He also explained that the company is investing heavily in artificial intelligence to help drones navigate safely to their destinations, and drop off packages safely. Detecting telephone wires, people, property and even small animals on the ground all require careful sensing and collision avoidance systems.
Amazon's head of worldwide consumer Jeff Wilke unveiled its latest delivery drone at the re:MARS conference in Las Vegas on June 5, 2019.Amazon
The drone reveal followed an earlier presentation by Brad Porter, vice president of Amazon Robotics, on Pegasus and Xanthus drive robots. Amazon is now using these robots to sort and move packages and inventory within warehouses and delivery centers.
Wilke and Porter said that since 2012, Amazon has deployed more than 200,000 robotic drive units in its operations (creating at least 300,000 jobs in that same time).
Porter said: "We sort billions of packages a year. The question is, how do you do it quickly and accurately?" Given the company's offer of Prime one-day deliveries, accuracy is tantamount to fulfilling promises to customers, he said. The new Pegasus robots have helped reduce mis-sorting of packages by more than 50% compared with the systems Amazon was using before, he said.
The drone is also part of Amazon's plan to make half of its shipments net zero carbon by 2030, and eventually expand that commitment across all of its shipments, Amazon said in the blog post. The electric drone can be charged in a sustainable way and is more energy efficient that delivering packages in a car, the company said.
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Watch: CNBC's full interview with Amazon worldwide consumer chief Jeff Wilke
VIDEO20:0520:05Watch CNBC's full interview with Amazon worldwide consumer chief Jeff WilkeSquawk Alley
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3afbe48e587c7a2882f5e6fd4bc8389b | https://www.cnbc.com/2019/06/05/facebook-cryptocurrency-coming-in-june-report.html? | Facebook will reportedly announce cryptocurrency this month, allowing employees to take it as salary | Facebook will reportedly announce cryptocurrency this month, allowing employees to take it as salary
David Marcus, vice president of Messaging Products at Facebook, speaks on stage during the annual Facebook F8 developers conference in San Jose, California, April 18, 2017.Stephen Lam | Reuters
Facebook will announce its cryptocurrency later this month, and will allow employees working on the project to take their salary in the form of the new currency, according to a report in The Information.
About a year ago, the company appointed former PayPal executive David Marcus to begin exploring opportunities with blockchain, the technological underpinning for cryptocurrency. Since then, several outlets have reported that the company has been building its own digital currency, which users will be able to store, trade, and exchange for regular currency, in part through Facebook apps including Messenger and WhatsApp. The report adds that Facebook is also planning physical ATM-like machines where users can buy the currency.
VIDEO1:2501:25SEC Chair: Crypto should be regulated differently than stocks and bondsSquawk Box
Building an easy way for Facebook's more than 2 billion users to pay for things and exchange money between countries could help the company diversify beyond advertising, which today accounts for nearly all of its revenue. Facebook's ad model has faced criticism from privacy advocates, lawmakers and the press for the ways it collects and uses detailed information about users.
CEO Mark Zuckerberg highlighted payments as an important area for the company at its conference for developers earlier this year. However, operating chief Sheryl Sandberg and CFO David Wehner have "been skeptical of the initiative internally," The Information said.
The report says Facebook is soliciting third-party organizations to act as "nodes" to help manage the cryptocurrency, and has discussed charging $10 million for the privilege.
Cryptocurrency nodes contain the computing power necessary to resolve complicated mathematical equations, which are used to validate transactions. They are typically decentralized and spread among thousands of parties, but Facebook is creating a foundation with named partners to help manage its currency, the report says.
A Facebook spokesperson declined to comment.
The full report is available to The Information subscribers here.
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WATCH: Facebook shares fall as the company faces new probes
VIDEO1:4901:49Facebook shares fall as the company faces new probesSquawk Alley
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727bd170cdcd687d125e38993722409b | https://www.cnbc.com/2019/06/06/ford-confirms-plan-to-shut-uk-engine-plant-in-2020.html | Ford confirms plan to shut UK engine plant in 2020 | Ford confirms plan to shut UK engine plant in 2020
A close-up of the Bridgend Ford Engine plant sign on June 5, 2019 in Bridgend, Wales. Union sources have said the engine plant in Bridgend will close in September 2020.Matthew Horwood | Getty Images News | Getty Images
Ford has confirmed that its engine factory in Bridgend, Wales will close in September next year.
The U.S. firm said the decision was part of a business transformation to create more efficiency in its European operations. Ford specifically blamed the loss of a contract to supply Jaguar Land Rover with engines and a lack of demand for its 1.5 liter engines.
"Creating a strong and sustainable Ford business in Europe requires us to make some difficult decisions, including the need to scale our global engine manufacturing footprint to best serve our future vehicle portfolio," said Stuart Rowley, president, Ford of Europe in a statement confirming the move.
"We are committed to the U.K.; however, changing customer demand and cost disadvantages, plus an absence of additional engine models for Bridgend going forward make the plant economically unsustainable in the years ahead."
Ford expects to book charges of about $650 million in relation to the closure with about two-thirds of that figure being used for employee compensation.
Ford has been on the site since 1977 and the plant currently has around 1,700 employees.
The leader of the U.K.'s second largest union described Ford's decision as a "grotesque act of economic betrayal."
Unite general secretary Len McCluskey said his organization would fight the closure.
"These workers and this community have stayed faithful to Ford, as have U.K. customers — this is still Ford's largest European market — through thick and thin, but have been treated disgracefully in return by this company," he added.
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b2644d09d34dab03ddffe17a15cbe38b | https://www.cnbc.com/2019/06/06/world-trade-is-heading-for-its-worst-year-since-the-crisis-ing-says.html | World trade is heading for its worst year since the crisis, ING says | World trade is heading for its worst year since the crisis, ING says
Global trade is on course for its worst year since the financial crisis, with only 0.3% growth anticipated in 2019, according to Dutch bank ING.
The downturn in world trade growth at the end of 2018, in which trade levels dropped more than 3%, has been exacerbated by damage from the ongoing trade war between the U.S. and China, according to an analyst note from the Dutch bank.
ING Head of International Trade Analysis Raoul Leering projected that while 2020 is likely to show growth of around 2%, that improvement could be wiped out if the trade war between the world's largest economies drags on into next year.
The figures represent a marked decline from the 3.3% trade growth in 2018 and 4.8% in 2017, prior to the implementation of a series of combative trade policies by President Donald Trump's administration.
Leering suggested that trade will adjust to better-than-expected first-quarter economic growth in the U.S., the eurozone and China, but that global trade volumes still have substantial catching up to do before they can match those of last year.
After the catch-up is completed, adjusting to higher levels of GDP and industrial production, ING projects that trade growth should reach 1.2% in 2019. However, analysts anticipate that the ongoing negative effects of tariff hikes from the U.S. and China will drag this down to 0.6%.
President Trump recently announced plans to impose 5% tariffs on all Mexican imports in an attempt to strong arm the U.S.'s southern neighbor into halting illegal immigration, a move widely criticized even within the Republican party. He vowed to steadily hike those tariffs up to 25% by October if Mexico did not comply.
Speaking to reporters at the Irish airport of Shannon Thursday, he also threatened to increase tariffs on China by a further $300 billion. Recent events indicate that Trump will continue to use tariffs as a political weapon if China, Mexico, the EU or Japan don't acquiesce to his demands.
"Although the president has said that the stock market is the barometer of his policy success, the negative response of the equity market to his decision to hike tariffs on Chinese imports, did not withhold him from deploying this weapon again last week," Leering said.
Trump is therefore prioritizing campaign promises, such as getting better trade terms for the U.S. and reducing illegal immigration, over economics ahead of his 2020 re-election bid.
ING analysts calculated the effect of U.S. policy on world trade using an average drawn from three possible scenarios, and concluded that trade will grow no more than 0.3% in 2019, the worst year since the "great collapse of trade" in 2009.
The first scenario assumes that recent tariff hikes and threats are enough to force China, Mexico, the EU and Japan to strike trade deals with the U.S. by the end of the first quarter of 2020.
The second and most likely scenario, according to ING, suggests things will "get worse before they get better," with an initial escalation in the U.S.-China trade war and negotiations with the EU, Mexico and Japan before deals are struck in the first quarter of 2020.
The third and most catastrophic scenario for world trade is continuing escalation without results. This involves the U.S. imposing a 25% tariff hike to all Chinese goods, hiking car tariffs by 20% at the end of the six-month delay period in November, and levying a tariff hike of 10% on half of the other imports from Japan and the EU after they retaliate in kind.
This model assumes no deal will be struck by the time of U.S. election in November 2020, and leads to a negative effect on world trade in 2020 of 1.1%, leaving growth at 0.6%, almost five times less than the ideal scenario of worldwide resolutions in the coming months.
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b51cc982f95ecb37066fee8a62483876 | https://www.cnbc.com/2019/06/07/druckenmiller-on-attacking-big-tech-way-to-think-about-the-future-president-trump-just-genius.html | Druckenmiller hits back on government moves against Big Tech | Druckenmiller hits back on government moves against Big Tech
VIDEO6:4406:44Druckenmiller: Trump's May tweet escalated the US-China trade warSquawk Box
Billionaire investor Stanley Druckenmiller went after President Donald Trump and lawmakers on Friday for their moves against big technology companies.
"We are attacking our companies that are the leaders in this stuff. But man, it's great. We're supporting our steel industry, our coal industry, [and] our aluminum industry. Way to think about the future, President Trump, just genius," Druckenmiller said sarcastically on CNBC's "Squawk Box."
Trump has criticized big tech companies like Facebook, Amazon and Alphabet for what he calls their bias against him and other Republicans.
"President Trump, we all know his motivation," Druckenmiller said. "Now, the Democrats hate them because they're convinced that Facebook's platform got President Trump elected. That's complete nonsense. Whether you like it or not, President Trump won because more people voted for him in the right states than voted for [Hillary Clinton]."
"I just do not understand the emotion over this issue," he said. "Then, you've got the whole privacy argument. It's very simple to me: If you don't like what Google is doing with privacy, don't use Google."
Shares of these companies took a hit this week as multiple reports said government authorities are working on antitrust probes and business-practice investigations targeting them. Facebook and Alphabet were both down more than 5% this week entering Friday's session while Amazon is down 1.2%.
Druckenmiller also commented on rising global trade tensions, noting they could kill the "animal spirits in the market." He added the stock market would plunge between 30% and 40% if Sen. Bernie Sanders wins the 2020 presidential election.
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317909025342f14e9467572761c80284 | https://www.cnbc.com/2019/06/07/illinois-legalizing-pot-could-help-new-york-do-the-same-cannabis-ceo.html | VIDEO4:5604:56Cresco Labs CEO on recreational marijuana legalization in IllinoisFast Money
Marijuana is growing on U.S. consumers.
Last week, Illinois became the 11th U.S. state to approve cannabis for recreational adult use, joining a growing cohort that includes California, Vermont and Michigan. The law will go into effect on Jan. 1, 2020.
Now, U.S. cannabis companies like Cresco Labs are undergoing expansion so they're able to produce the supply required to meet the demand in the fifth-largest state in the country, said Charles Bachtell, co-founder and CEO of Cresco.
"You're talking about a state that is going from a relatively conservative medical program — we have about 70,000 patients in it currently — to the fifth-largest state in the country: 13 million people, over 100 million tourists a year, and anybody over the age of 21 are going to have access to the program," he said Thursday on CNBC's "Fast Money."
That represents a 10-to-20-times boost to the current size of Illinois' medical marijuana market, Bachtell said, adding that his company, which operates in 11 states, is equipped to handle it.
"We have the infrastructure in place. We can flip the switch Jan. 1, 2020, as opposed to having to go through an application process," the CEO said.
This legal process can also pave the way for states like New York and New Jersey, which have been weighing broader marijuana legalization, to follow in Illinois' path, Bachtell said.
"That's one of the great things about Illinois pulling this off: first state to ever pass a robust, regulated adult-use cannabis program through the legislature," he said. "I know that the conversations in Albany and likewise in New Jersey lately have been, 'Can you do this?' or 'Does this need to be a ballot initiative?' Illinois has shown them you can do this through the legislature."
Illinois' existing medical marijuana laws also give the state a leg up when it comes to developing the recreational market," Bachtell said.
As opposed to California, which saw lower-than-expected cannabis-tax revenues at the outset because it tried to regulate the industry while opening up the market, "Illinois [has] already changed the way that medical cannabis was done," he said.
"It really created Gen 2 of medical cannabis, which was highly regulated, compliance-focused and these limited licenses. So it's a very controlled program," he said. "We're building on the back of that type of a program. And the legislature did a great job of marrying increased opportunity, increased access [to] points of sale, while at the same time really giving the current operators, the current infrastructure the opportunity to be first to market."
It also helps curb black-market competition, which was part of the reason California saw suppressed tax revenues for the first year of cannabis being legal there, Bachtell said.
"I think we have a great chance of converting a lot of the incumbent illicit market because Illinois doesn't have its own inherent illicit market. That's all imported from out of state," he said. "So, as soon as we get our infrastructure and our adult-use program launched, we give residents in Illinois a great opportunity to participate."
Cresco Labs' stock traded lower on Friday, shedding more than 1%.
Disclaimer
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c3ae53f8e9581a8d87c536433a9fc0d9 | https://www.cnbc.com/2019/06/07/part-time-work-impacts-retirees-portfolios-social-security-medicare.html | Here's what part-time work means for retirees' portfolios, Social Security and Medicare | Here's what part-time work means for retirees' portfolios, Social Security and Medicare
Kelvin Murray | Getty Images
Older Americans have many reasons for taking on part-time work after leaving a full-time job behind — perhaps better financial security, a sense of purpose or a way to stay connected.
It's also becoming more common to work well into one's 60s or 70s, or even 80s.
By 2026, about 30% of people ages 65 to 74 are forecast to be working either full or part time, compared with 17.5% in 1996, according to data from the Bureau of Labor Statistics. Among the 70-and-older crowd, that share is projected to reach 10.8% in 2026, more than double what it was 30 years earlier (4.7%).
Financial advisors say that if you're among those who are considering a part-time job after putting an end to 40-hour work weeks, it's important to know how the income can impact other things that tend to be particular to older Americans — including your nest egg, Social Security and Medicare.
If you're unsure whether your retirement savings will truly get you through your older years and part-time work can reduce what you withdraw, advisors say go for it.
"For folks where it's on the bubble of whether their retirement plan is going to work, it can be worth it to work — and that doesn't mean full time," said Nick Defenthaler, a certified financial planner with the Center for Financial Planning in Southfield, Michigan. "Part-time work will reduce what you have to take from your overall portfolio."
Any amount you earn from a job could reduce (or eliminate) what you need to withdraw from your retirement account. Leaving those assets invested, where they can keep growing and benefit from compound interest, will pay off down the road.
"You don't have to make big money," said CFP Matt Rogers, director of financial planning at eMoney Advisor, a financial software firm that works with advisors. "Just having some income to reduce withdrawals is good."
If you already have reached your full retirement age (as defined by the government) and are receiving Social Security, you can earn as much as you want without any reduction in your benefits (although up to 85% is subject to federal income taxes, depending on your overall income).
If you haven't yet reached that magic age, however, it's a different story.
While delaying Social Security for as long as possible means a higher monthly check, many people take it as soon as they can — age 62 — or soon thereafter.
VIDEO2:0302:03Americans think they're prepared for retirement, but are they right?Personal Finance
If you start getting those monthly checks early, there's a limit on how much you can earn from working without your benefits being affected. For 2019, that cap is $17,640. Earn more than that and your benefits will be reduced by $1 for every $2 you earn over that threshold.
Be aware, too, that the reduction in benefits can come as a surprise — and all at once, said CFP Peggy Sherman, a lead advisor at Briaud Financial Advisors in College Station, Texas.
Say you earned $5,000 over the limit in a given year and the Social Security Administration discovers it later when it does its annual review of your tax return.
"They don't adjust your benefits just a little bit — they'll stop your benefits until the amount is paid back," Sherman said. "It can be a very ugly surprise."
More from Personal Finance:How to snag a last-minute summer vacation dealHere's how your income stacks up against your neighbor'sWhat to know before putting money in 'do good' investments
Then, when you reach full retirement age around age 66 or 67 — the exact age depends on your birth year — the money comes back to you in the form of a higher monthly check.
However, "it can take up to 15 years to recoup that reduction," Sherman said. "They don't give it back all it once. You get a little each month."
Also, if you are one of those early takers who is working and you reach full retirement age during 2019, then $1 gets deducted from your benefits for every $3 you earn above $46,920.
Depending on your overall income, money from a part-time job could trigger additional costs for Medicare.
Higher earners pay more for Medicare Part B (outpatient coverage) and Part D (prescription drugs). The higher premiums start at income above $85,000 for individuals and $170,000 for married couples who file joint returns.
However, less than 5% of Medicare recipients are subject to it, according to the Social Security Administration.
Whether you pay more is based on your modified adjusted gross income — your adjusted gross income, or AGI, plus your tax-exempt interest income. The government uses your tax return from two years earlier to determine whether you must pay higher premiums.
CNBC's John Schoen contributed to this report.
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fa86d3d62081758137acec21c9c97e04 | https://www.cnbc.com/2019/06/07/rolling-stones-concert-goers-to-get-schooled-on-lifetime-income.html | Rolling Stones concert goers to get schooled on lifetime income | Rolling Stones concert goers to get schooled on lifetime income
Mick Jagger performs during the Rock in Rio Lisbon 2014 music festival, in Lisbon, Portugal on May 29, 2014. (Photo by Pedro Fiúza/NurPhoto via Getty Images)NurPhoto | NurPhoto | Getty Images
If you're attending a Rolling Stones concert this summer, you might notice something different. And no, it's not Mick Jagger's new moves.
The tour has what some might consider to be an unlikely sole sponsor: the Alliance for Lifetime Income, a nonprofit organization formed by financial services firms to raise awareness around the need to protect income in retirement.
For many, that means annuities.
Many Americans do not have enough saved for retirement.
About 40.6% of all U.S. households where the head of household is 35 to 64 years old could run out of money in retirement, according research from the Employee Benefits Research Institute.
Those households have an aggregate retirement deficit of about $3.83 trillion, even when current Social Security benefits are included.
Annuities, financial products that let individuals pay a lump sum in return for a lifetime stream of income, are seen as one way to help solve that problem.
That message is what the Alliance for Lifetime Income plans to bring to the concerts, which were rescheduled following its front man's heart surgery in April.
The organization will be traveling to the events, where it will have a bus to engage concertgoers. The alliance plans to draw individuals by playing music and giving away tickets.
Once they're there, individuals will also be able to use the alliance's new tool to get their Retirement Income Security Evaluation score. RISE aims to measure how well an individual will be covered financially in retirement on a zero to 850 scale.
The point of the message is not to push specific products, according to the organization. Instead, it is aimed at getting individuals to ask themselves and their financial advisors: Is my money going to last my lifetime?
"If we can get them to ask that question … it's mission accomplished for us," said Jean Statler, the group's executive director.
More from Personal Finance:This score can gauge your risk of running out of money in retirementOne way to get guaranteed income while delaying Social Security Advisors need to know the pros and cons of annuities
The organization is agnostic about recommending advisors to consumers. But there are resources, such as the Financial Planning Association's website, that it does recommend to individuals who want to find one.
The Rolling Stones audience, which typically ranges in age from 45 to 75, is an ideal fit for this message, Statler said. The sold-out tour boasts a total of roughly 1.5 million attendees. The band's social media reach is about 24 million, she said.
Annuity sales climbed to $233.7 billion in 2018, a 15% increase from 2017, according to LIMRA, a provider of research and consulting services for insurance and financial services.
VIDEO3:4203:42Consider annuities to cover expenses, says financial advisorPower Lunch
That's a comeback from 2017, when annuity sales fell by 8.4% from 2016. Part of that slide can be attributed to "downward pressure" from a conflict of interest rule from the Department of Labor, according to research from Cerulli Associates, a financial services research firm.
Some financial advisors are wary of selling these products because of their complexity and the high risks that they may not be in clients' best interests. Individuals may not be aware that these strategies exist to help them stretch out the money they have saved.
"When they are used, they are used too much. When they're not used, they're not used at all," said Jamie Hopkins, director of retirement research at Carson Group. "The leads to kind of a bad outcome."
The alliance's push comes at a time when most insurers — 94% — said that negative press around variable annuities is a "major hurdle" in selling them, according to a recent report from the Insured Retirement Institute.
Much of the industry has seized on the organization's campaigns to promote annuity sales. IRI's report found that 55% said they had promoted the campaign to wholesalers, while 45% had promoted it to financial advisors.
The Rolling Stones are an example of the unexpected retirement dilemma many boomers face today.
In the movie "Almost Famous," band manager Dennis Hope, played by Jimmy Fallon, cautions members of the fictitious band Stillwater, "If you think Mick Jagger will still be out there trying to be a rock star at age 50, you are sadly, sadly mistaken."
"I didn't invent the rainy day, man. I just own the best umbrella," he told the band, emphasizing that they needed to make money while they were still young.
The movie was set in 1973.
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For Jagger, who is 75, his career and health, based on a tweet he recently shared of himself dancing, are still going strong.
For baby boomers who find themselves planning for unexpectedly longer lives or unpredictable careers, the alliance is promoting annuities as a potential umbrella.
It's up to individuals and their advisors to decide if they're really the best fit for them.
Rolling Stones tour datesJune 21: Soldier Field, ChicagoJune 25: Soldier Field, ChicagoJune 29: Burl's Creek Event Grounds, Ontario, CanadaJuly 3: FedExField, Washington, D.C.July 7: Gillette Stadium, Foxboro, Mass.July 14: Mercedes-Benz Superdome, New OrleansJuly 19: TIAA Bank Field, Jacksonville, Fla.July 23: Lincoln Financial Field, PhiladelphiaJuly 27: NRG Stadium, HoustonAug. 1: MetLife Stadium, East Rutherford, N.J.Aug. 5: MetLife Stadium, East Rutherford, N.J.Aug. 10: Broncos Stadium at Mile High, DenverAug. 14: CenturyLink Field, SeattleAug. 18: Levi's Stadium, Santa Clara, Calif.Aug. 22: Rose Bowl, Pasadena, Calif.Aug. 26: State Farm Stadium, Glendale, Ariz.Aug. 31: Hard Rock Stadium, Miami
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4dc8bbebcb03c7a9596d587909623220 | https://www.cnbc.com/2019/06/07/stanley-druckenmiller-says-stocks-would-fall-30percent-to-40percent-if-bernie-sanders-were-elected-president.html | Stanley Druckenmiller says stocks would fall 30% to 40% if Bernie Sanders is elected president | Stanley Druckenmiller says stocks would fall 30% to 40% if Bernie Sanders is elected president
VIDEO2:0002:00Druckenmiller: Stock prices will fall if Bernie Sanders becomes presidentSquawk Box
Longtime hedge fund manager Stanley Druckenmiller says stocks would plummet if Bernie Sanders is elected president in the 2020 election.
"If Bernie Sanders became president, I think stock prices should be 30% to 40% lower than they are now," he said Friday on CNBC's "Squawk Box."
"The good news is we'd all be much more equal because everybody would be poorer but the rich would have lost a lot more wealth than the poor would have," he joked.
Earlier this week, Druckenmiller said he believed President Donald Trump will lose his reelection bid thanks to discontent in key swing states. He said the Republican president got lucky in 2016 and could lose if Democrats run a more centrist candidate. The problem, he said, would be if a "crazy" Democrat beats him.
"I personally think it's going to depend on the Democratic candidate, but he drew an inside straight: He won seven out of seven states by less than half a percent," Druckenmiller said this week. "If you go county by county in Pennsylvania, Michigan and Wisconsin, he is in deep, deep, deep trouble. And that was with the economy growing at 3%."
In Friday's interview, the billionaire investor also said the president's aggressive trade policies could kill "animal spirits" and business confidence and disrupt key supply chains.
Plans by progressive politicians have pitted Wall Street against certain left-wing members of the Democratic Party who hope to triumph over Trump next year. Sanders, a self-described democratic socialist, is the No. 2 favorite to win the nomination behind more-centrist Vice President Joe Biden, according to recent polls.
Druckenmiller and other hedge fund managers feel that a far-left candidate and their policies could increase regulation and taxes, deflating stock prices.
The Vermont senator outlined a plan in a New York Times op-ed earlier this year that would prevent companies from repurchasing their stock unless they pay workers at least $15 an hour and other benefits.
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ba5b8523831f78cd4d9666bcb5000ed2 | https://www.cnbc.com/2019/06/09/we-have-the-voice-hong-kong-protesters-blast-china-extradition-plan.html | 'We have the voice': More than 200,000 Hong Kong protesters blast China extradition plan | 'We have the voice': More than 200,000 Hong Kong protesters blast China extradition plan
A Hong Kong protest rally on June 9, 2019.Kelly Olsen | CNBC
Protesters numbering more than 200,000 marched through Hong Kong on Sunday in a mass rally calling for the withdrawal of a local government proposal to allow fugitives to be handed over to authorities in China, marking one of the biggest demonstrations in the city in years.
Hong Kong, an important global trade and finance hub of about 7.4 million people, has for nearly 22 years been a semi-autonomous region of the People's Republic of China with its own legal system, a legacy of its time as a British colony.
Opposition to legal amendments under debate to allow extraditions for certain crimes to jurisdictions with which Hong Kong has no such agreement — including the Chinese mainland — has been increasing for weeks, with an array of groups, including local lawmakers, legal and business organizations and even foreign governments expressing concern.
Shouting "oppose extradition to China," huge crowds of demonstrators marched peacefully along a main thoroughfare in sweltering humidity. Many held up signs or carried large banners expressing the same sentiment.
Organizer Civil Human Rights Front claimed that one million people joined the rally, though police estimated a peak figure of 240,000. That number was far larger than the previous large-scale rally on the issue on April 28 which police said at the time drew about 22,800 people, yet short of the half million that reportedly took part in a protest in 2003 over a proposed security law.
The government appeared unbowed, releasing a statement late Sunday recognizing the "large" size of the march though vowing to press ahead.
"As a free, open and pluralistic society, we acknowledge and respect that people have different views on a wide range of issues," it said, calling on the Legislative Council, the local assembly, to examine the bill "in a calm, reasonable and respectful manner to help ensure Hong Kong remains a safe city for residents and business."
Local television news showed footage of police struggling to control crowds. A police spokeswoman said that a total of seven men were arrested for alleged offenses including assaulting police officers.
The growing extradition controversy underscores growing unease over what is seen as increasing Chinese political influence in local affairs and worries the Hong Kong government has little recourse but to accept it.
In 2014, Hong Kong was shaken by rallies calling for a greater local say in how the territory's chief executive, the top official, is elected. Under the current system, only figures acceptable to the Chinese central government can run for the office.
Local pro-democracy group Demosisto, which played a leading role in the protests five years ago, said in a statement Sunday that it was launching a "peaceful" sit-in outside the Legislative Council in a bid to block the block the plan.
Opponents of the plan say that Hong Kong's autonomy, guaranteed for at least 50 years under a Sino-British agreement negotiated ahead of the handover on July 1, 1997, is in danger of further erosion .
People in Hong Kong shout slogans at a protest rally on June 9, 2019 against legal changes proposed by the local government that, if passed, could allow extraditions to mainland China.Kelly Olsen | CNBC
The American Chamber of Commerce in Hong Kong is among business groups that have raised concerns about the plan as has the U.S. government.
Ken Cheung, a Hong Kong resident watching the rally, said that the local legal system is the central factor that makes the city different from the mainland and the key attraction for foreign businesses.
"I think this time is quite serious because the main core value of Hong Kong is being interfered with," he told CNBC.
The Hong Kong government says fears that the territory's legal, political and economic system is in danger of compromise are unfounded and reiterated that view Sunday.
"It is not correct to state or imply that the proposal will in any way impact on, interfere with, or have a chilling effect on the freedom of assembly, of the press, of speech, of academic freedom or publication; or relate to offences of a political nature," it said in an email to journalists ahead of the demonstration.
It cited "all the safeguards and human rights protections of the existing" law and stressed that the bar for handing anyone over is even higher under the proposed changes.
But Hong Kong resident Man Tang, who joined the demonstration, dismissed that, saying she doesn't trust the government and thinks anyone could ultimately end up in a Chinese jail.
"I think we still need to stand up to speak out and let the government, or let the world, know our voice," Tang said, even though she added it is unclear if it will have any impact. "We have the voice, we have to speak out."
People in Hong Kong march in a protest rally on June 9, 2019.Kelly Olsen | CNBC
The government says the legal changes are necessary, citing a case last year when a Hong Kong man allegedly killed his girlfriend while in Taiwan before subsequently returning home. The government says he can't currently be extradited to Taiwan, though legal critics reject that interpretation and say there are various ad hoc measures it could take.
The Chinese government has called the issue an internal affair of Hong Kong, but is also on record as supporting the changes.
"They will only improve instead of undermining the rule of law in (Hong Kong), and better safeguard the rights and freedoms that Hong Kong residents enjoy in accordance with law," the foreign ministry's local office said on its website on May 31.
A spokesman for the office could not immediately be reached for comment Sunday on the protest.
The latest demonstration comes at a sensitive time, sandwiched between the 30th anniversary of the Chinese crackdown on political protests in Beijing's Tiananmen Square on June 4 and the upcoming anniversary of Hong Kong's return to Chinese control.
Tens of thousands gathered in Hong Kong on June 4 to commemorate the Tiananmen anniversary, in stark contrast to the mainland where such gatherings are forbidden.
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687ced4490372314f06fa7e1c7bbb2ef | https://www.cnbc.com/2019/06/10/china-appears-to-be-cutting-its-us-trade-surplus---commentary.html | Markets can cheer: China appears to finally be addressing its US trade surplus | Markets can cheer: China appears to finally be addressing its US trade surplus
Chinese President Xi Jinping attends a Russian-Chinese energy and business forum on the sidelines of the St. Petersburg International Economic Forum (SPIEF), Russia June 7, 2019.Maxim Shemetov | Reuters
China will not allow the U.S. to interfere in its legislative process and economic policies, but it seems to be showing a readiness to keep its sales in American markets on a steep and steady downward path.
According to data released June 6 by the U.S. Department of Commerce, Chinese goods exports to the U.S. in the first four months of this year declined 12.8% from the same period of 2018, driving the trade surplus down 10%.
Although Chinese data released Monday morning point to a widening Chinese surplus on U.S. trade in the course of May, that wasn't directly comparable to U.S. figures because of differing methodologies. Regardless, the trend of more balanced trade will — and must — continue if Beijing wants to return to normal trade relations with Washington.
VIDEO4:2904:29How China could use its massive US debt holdings as a trade war weaponTrade
Indeed, the signal is clear that China has decided to operate a radical change in its U.S. trade. Taken at an annual rate, China's trade surplus with the U.S. in the January-April interval would be 23.5% below China's surplus for all of last year.
It is a great pity the U.S. and China missed a chance to initiate such a rebalancing trend of their bilateral trade accounts when the Trump administration took office in January 2017.
China's leaders were warned during the U.S. presidential campaign in 2015 and 2016 that Donald Trump, if he became president, would not tolerate excessive and systematic Chinese trade surpluses on their U.S. trades. As the saying goes, China could read the writing on the wall.
Why Beijing decided to aggravate its trade case with a $901.7 billion merchandise trade surplus during the tenure of an administration virulently opposed to such trade developments is a mystery.
Washington, therefore, could be forgiven for seeing such Chinese policy behavior as a brazen provocation that required a strong American response. And that's what the U.S. did by building a trade complaint including intellectual property violations, forced technology transfers, illegal industry subsidies, non-tariff trade barriers, restricted access to American firms on Chinese markets, Beijing's exchange-rate manipulations and more.
Briefly put, China found itself in a situation where the U.S. called for far-reaching legislative changes in Beijing and closely scrutinized monetary policies as conditions for balancing U.S.-China trade accounts and a continuation of fair, free and reciprocal trade relations.
And as China balked at Washington's demands — while continuing to accumulate nearly a trillion dollars of U.S. trade surpluses on Trump's watch — America stepped up pressure with trade tariffs, adopted an increasingly firm negotiating stance and limited access to U.S. markets and technologies for Chinese companies.
By appearing to ignore Washington's trade warnings, China just made things difficult for itself. Beijing is now doing, under duress, what it should have done three years ago under much more favorable conditions, if it genuinely wanted to promote its policy of harmonious "great power relations."
It is, therefore, pleasing to read the reported comments, made last Friday, by Chinese President Xi Jinping at an international economic forum in Russia: "It's hard to imagine a complete break of the United States from China or of China from the United States. We are not interested in this, and our American partners are not interested in this. President Trump is my friend and I am convinced he is also not interested in this."
A very welcome sea of change indeed, and an auspicious sign for Xi's meeting with Trump during the G-20 meeting in Osaka, Japan later this month.
China has definitely decided, at the highest levels of state, that a balanced trade relationship with the United States is in the best interest of its economy, its tenuous security ties in Asia and the major role it wishes to play on the world stage.
Such a policy always made sense.
As big as China's exports to the U.S. are — $422.4 billion at an annual rate in the first four months of this year — that is small change compared to what its companies can earn by focusing on vast programs of, what Xi called, "the great rejuvenation of the Chinese nation."
China's estimated 300-plus million middle class citizens represent a formidable market to serve with increasingly sophisticated products and services. And they now seem to be more interested in lucrative investments at home, instead of dropping their millions on overseas trophy purchases.
The only thing I don't like about those new China numbers on U.S. trade are Beijing's precipitously falling purchases of American goods. China's imports from the United States in the January-April interval were a pitiful $34 billion, a whopping 21% decline from the year earlier, and only 24% of what China sold to the U.S. during the same period.
That's got to change. Washington should insist that the balancing of bilateral trade accounts must substantially raise the volume of Chinese purchases of American goods and services.
At any rate, markets can now confidently expect that the big realignment of U.S.-China trade flows is finally under way.
With the prospect of the trade war now virtually over, markets can also count on the Federal Reserve's ample liquidity provisions.
The Fed is trimming its huge balance sheet — $3.3 trillion as of June 5, 2019 — while still maintaining an extraordinarily large amount of bank's excess reserves: $1.4 trillion of funds that banks are ready to lend to businesses and households. And that's what the banks are doing. Their lending to households accelerated in the course of April at an annual rate of 6%.
The doomsayers should note that easy credit and strong labor markets have kept U.S. household spending (about 70% of GDP) growing at an annual rate of 2.8% during the first four months of this year. That's an acceleration from the pace in the previous four months, when consumer outlays are traditionally high as a result of year-end holidays.
Trade problems with China are on the mend. China's excessive trade surpluses on U.S. trades have been falling in the first four months of this year at an annual rate of 10%. On current trends, that surplus could fall 24% by the end of this year.
Markets can consider that the big China trade issue is mostly out of the way.
The Fed — a much more important market mover — is maintaining extraordinarily easy liquidity conditions, and it has ample room to do more in an unlikely case of weakening labor markets, falling household incomes and a sustained decline of household consumption.
U.S. equities are still some of the best global assets available.
Commentary by Michael Ivanovitch, an independent analyst focusing on world economy, geopolitics and investment strategy. He served as a senior economist at the OECD in Paris, international economist at the Federal Reserve Bank of New York, and taught economics at Columbia Business School.
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dad9a4ba377e34c536b598214203c222 | https://www.cnbc.com/2019/06/10/chinese-economy-china-releases-may-trade-data-exports-and-imports.html | China says its May trade surplus was $41.65 billion, significantly more than expected | China says its May trade surplus was $41.65 billion, significantly more than expected
VIDEO1:1401:14US needs to 'see action' from China to hold off on new tariffs, Mnuchin saysStreet Signs Asia
China said on Monday its overall trade surplus was $41.65 billion last month, significantly more than expected as the trade impasse between Washington and Beijing drags on.
Economists polled by Reuters had expected China to post an overall trade surplus of $20.5 billion in May.
The larger trade surplus came as the country's dollar-denominated exports surprisingly increased last month, while imports came in worse than expected. China's General Administration of Customs said on Monday that exports in May inched up 1.1% year-on-year, while imports fell 8.5% during the same period.
Economists in the Reuters poll had forecast both exports and imports to fall 3.8% year-on-year in May.
In April, China's overall trade surplus in April was $13.8 billion, far below the projected $35 billion. That's partly due to an unexpected rise of 4% in imports, and a surprise fall of 2.7% in exports for the month.
Meanwhile, China's trade surplus with the U.S. rose to $26.89 billion in May from $21.01 billion in April, Chinese customs data showed.
The large trade imbalance between the two countries has been one of U.S. President Donald Trump's stated goals in applying elevated tariffs on American imports from China. But high-level negotiations between the U.S. and China stalled after the president last month raised tariffs on $200 billion worth of Chinese goods, claiming that Beijing "broke the deal" in talks.
For now, both sides — from an economic standpoint — have a lot to gain from doing a deal. But I think from the politics side, it's actually getting tougher.Johanna Chuahead of Asia economics and market analysis at Citi
Trump threatened that more levies could come — a point reiterated by U.S. Treasury Secretary Steven Mnuchin, who told CNBC the president "is perfectly happy" to increase tariffs on China if his expected meeting with Chinese President Xi Jinping doesn't go well. Trump said that he's expected to meet Xi later this month.
Many analysts expect China to experience a larger economic hit from its ongoing trade war, with data in recent months showing signs of slowing activity. The International Monetary Fund and major banks such as Morgan Stanley recently lowered their growth forecasts for China citing trade concerns.
But the latest employment data in the U.S. — which showed weaker than expected jobs creation — put the two countries on roughly equal footing, said Johanna Chua, head of Asia economics and market analysis at Citi.
Chua told CNBC's "Street Signs" after the latest Chinese data release that the U.S. jobs data may be the first sign that the American economy is getting hit by the escalation in trade tensions.
"For now, both sides — from an economic standpoint — have a lot to gain from doing a deal. But I think from the politics side, it's actually getting tougher," she said.
— Reuters contributed to this report.
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d191ae6b6365aa43c25444229f0f6b89 | https://www.cnbc.com/2019/06/10/its-not-baby-boomers-who-have-taken-the-most-from-social-security.html | Turns out it's not baby boomers who have taken the most from Social Security | Turns out it's not baby boomers who have taken the most from Social Security
You've probably heard before that baby boomers are to blame for Social Security's money woes.
Yet new research from the Center for Retirement Research at Boston College suggests otherwise.
Tom Merton | Getty Images
The thinking typically goes that boomers have put undue pressure on the system because of the size of their generation.
About 10,000 people turn 65 every day. Many of those individuals are claiming Social Security retirement benefits, which has created the perception that they are draining the system.
However, the Center for Retirement Research found the boomer cohort born between 1946 and 1964 will actually have paid more into the system than they will receive in benefits.
VIDEO3:2403:24How to plan for a Social Security shortfallRetirement
There is a group of retirees, however, who did receive more money than they contributed: people who lived through the Great Depression of the 1930s. That's because they generally worked for fewer years before collecting benefits.
And the policy decisions that were made in the early years of the program, namely to make it a pay-as-you-go system, helped set it up for the funding problems we face today, the research found.
"Whenever you have a pay-as-you-go system, it's going to be more expensive than a fully funded system," said Geoff Sanzenbacher, associate director of research at the Center for Retirement Research.
Social Security has made headlines for the funding shortfall it could face if nothing is done to change the system.
The latest report from the Social Security Board of Trustees projects the system's trust funds will be depleted in 2035. At that point, only 80% of expected benefits will be payable.
At its inception in 1935, Social Security resembled a private insurance plan, where the funds coming closely matched the contributions and benefits for the different age cohorts.
VIDEO2:4902:49Social Security costs will exceed income by 2020The Exchange
But that was changed with amendments that were made in 1939 adding benefits for spouses and minor children of retired workers, as well as survivor benefits for families if a worker died. At that time, benefits were tied to average earnings.
Those changes meant that some retirees received more in benefits than they had contributed to the system. Payroll tax receipts were used to make those payments.
However, that prevented the system from expanding the trust fund. Without those increasing reserves, the system also misses out on interest the money could be earning.
The "Missing Trust Fund," as it is named in the research, makes the program more expensive for current participants, because they have to contribute money both for their benefits and to make up for those missing funds.
As it stands, today's benefits are roughly in line with costs, and consequently are not too generous, Sanzenbacher said. "But we need to deal with this legacy debt," he said.
There are a couple of approaches that could be used to make up the shortfall, according to the research.
One way would be to raise taxes. Any increase would need to be permanent, according to the research.
Another possible solution would be to increase taxes temporarily until a sufficient trust fund is established. Once that money is there, the system could return to today's level of payroll taxes. The current Social Security tax rate is 12.4%, which is evenly split between employers and employees.
The tax increases could come in several forms: by increasing the payroll tax percentage and maintaining the current Social Security cap of $132,900; increasing the payroll tax and eliminating the payroll tax cap; or shifting from a payroll tax to income tax.
More from Personal Finance:Bill could extend Social Security's solvency for rest of centuryRolling Stones concertgoers schooled on lifetime income Part-time work and retirees' portfolios, Social Security and Medicare
Small tax raises could be used to supplement interest the trust fund hasn't been earning as it is being depleted, while larger increases could help replace the trust fund itself.
"There are different ways to deal with this issue," Sanzenbacher said.
That will require considering whether to put the burden on current generations, future generations or something in between, he said.
"We're going to have to do something," Sanzenbacher said. "We're not trying to propose whatever it is we do.
"We're just trying to make the point that you can make different choices."
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5a79afbbaa7651a17db002136fa45837 | https://www.cnbc.com/2019/06/10/salesforce-stock-drops-sharply-on-tableau-buy.html | Salesforce stock drops sharply after announcing it will buy Tableau for $15.3 billion, the biggest acquisition in its history | Salesforce stock drops sharply after announcing it will buy Tableau for $15.3 billion, the biggest acquisition in its history
Salesforce co-CEO Marc Benioff, left, and the company's chief technology officer, Parker Harris, look on during a keynote address at Salesforce's 2013 Dreamforce conference in San Francisco on Nov. 19, 2013.Justin Sullivan | Getty Images News | Getty Images
Shares of cloud software giant Salesforce dropped sharply Monday after it announced it would buy big data firm Tableau, a Seattle-based company that specializes in data visualization, for $15.3 billion in stock.
The company's stock was down as much 8% in early trading, but recovered slightly and ended the day down more than 5%.
Tableau is a leading analytics platform that will help Salesforce augment its current product offerings, which include tools to help companies with sales, marketing and customer service.
"Tableau helps people see and understand data, and Salesforce helps people engage and understand customers," Salesforce co-CEO Marc Benioff said in a statement.
The acquisition is expected to decrease fiscal 2020 non-GAAP EPS by 37 cents to 39 cents. In its last fiscal year, which ended Jan. 31, Salesforce earned $1.43 per share on $13.28 billion in revenue.
Salesforce has looked at an acquisition of Tableau for years, as indicated in this leaked 2016 document published by The Wall Street Journal.
The Tableau deal dwarfs the company's previous largest acquisition, application integration provider Mulesoft, which Salesforce bought for $6.5 billion in 2018. Other notable acquisitions include customer service platform Demandware, which it bought for $2.8 billion in 2016 and forms the basis of its Commerce Cloud product for e-commerce functions, and Heroku, an app development technology it bought for $212 million in 2010.
Correction: Salesforce bought Mulesoft in 2018. Due to an editing error, an earlier version of this article misstated the year.
VIDEO2:0802:08Salesforce to buy Tableau software in stock dealSquawk Box
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c554e78bae8ec2489cc8040b25bf4ee2 | https://www.cnbc.com/2019/06/10/sunny-balwany-former-theranos-coo-to-fight-criminal-charges.html | Former Theranos COO Balwani will fight criminal charges | Former Theranos COO Balwani will fight criminal charges
Former Theranos COO Sunny Balwani and his attorneys leave the San Jose federal courthouse on June 10, 2019.Yasmin Khorram
Sunny Balwani, the former chief operating officer and president of Theranos, will fight the criminal fraud charges against him, his attorney told CNBC on Monday.
"We're going to fight it," Jeffrey Coopersmith said prior to a court hearing connected to the case.
Balwani is facing nine counts of wire fraud and two counts of conspiracy to commit wire fraud, and is awaiting his criminal trial.
Asked about getting a fair trial from a San Jose jury pool who may be familiar with the case, Coopersmith told CNBC, "There's a concern, there's always a concern."
Theranos, a blood-testing startup once valued at over $9 billion, was founded by Elizabeth Holmes in 2003. Holmes is also facing charges of wire fraud and conspiracy to commit wire fraud.
Theranos promised its technology could accurately run hundreds of tests with only one or two drops of blood. The company shut down in 2018 after a Wall Street Journal investigation exposed its unproven technology and dubious business practices.
Holmes and Balwani are both facing up to 20 years in prison if convicted.
Inside the courtroom, lawyers for the U.S. Department of Justice and Balwani battled over the Securities and Exchange Commission's case.
The government filed a motion in April to intervene in the SEC's civil enforcement action, arguing that parties and the court should not be burdened by civil discovery while the criminal case is pending.
Prosecutors also claim Balwani is using his pending SEC case to benefit his criminal indictment.
"It's apparent Mr. Balwani is using civil discovery to gather evidence for the reason of his criminal case," said Robert Leach, assistant U.S. Attorney.
Balwani's attorney argued there's no basis to issue a stay and if prosecutors have an issue with a subpoena they can object to it.
"The government chose to bring these two cases forward and the government can simply dismiss it," said Coopersmith.
The SEC, also present in court, supported the request for a hold in its case against Balwani.
"It's rare that the SEC affirmatively supports a stay," said Mark Katz, an attorney for the SEC. "This is a rare situation. We've seen depositions with very sensitive information and we ask that you consider this stay."
"There's been great attention in what the truth is and what happened here," said Leach. "The only way to do that is through the criminal trial."
Holmes agreed to settle her fraud charges brought on by the SEC last year.
The judge took arguments under submission and announced he wants to set a trial date at the next status hearing.
The status conference for Holmes and Balwani is set for June 28.
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22d1eb501e90d1cec5404d1dd9b27b8b | https://www.cnbc.com/2019/06/11/citibank-co-launches-credit-cards-with-ride-hailing-company-grab.html | Citi launches credit cards with Southeast Asia's Grab in push for more customers | Citi launches credit cards with Southeast Asia's Grab in push for more customers
An advertisement for the ride-hailing application Grab displayed at a taxi stand in SingaporeOre Huiying | Bloomberg | Getty Images
Citigroup has teamed up with Singapore-based ride-hailing firm Grab to launch co-branded credit cards, as it looks to boost its Asian customer base by about 13% via partnerships with digital firms, a senior Citi executive said.
The new cards mark the latest step in Grab's big push into the financial services sector, an area it has earmarked for growth. For the U.S. bank, it is in line with its strategy to offer its products within online ecosystems as consumers spend more time on smartphones.
The Citi-Grab co-branded cards will be issued in the Philippines on Tuesday and in Thailand later this year, before being rolled our in other Southeast Asian markets.
"Today we have about 16 million customers in Asia, and our aspiration is to increase this by about two million in the next few years through partnerships alone," Gonzalo Luchetti, Citi's head of consumer banking for Asia Pacific, Europe, the Middle East and Africa, told Reuters.
Citi launched a co-branded credit card with Indian payments firm Paytm last month and with Qantas two years ago.
The bank's net income from Asia Pacific was $4.4 billion in 2018, with a third of its $15.3 billion revenue coming from Southeast Asia - where Grab is the leading ride-hailing firm.
Grab, which started as a taxi-hailing app firm, has been aggressively expanding into financial services and said, earlier this year, that it was pursuing lending licences across Southeast Asia.
"The Citi-Grab credit card is a natural next step as we create more value for our digital first, always in GrabPay users," Huey Tyng Ooi, managing director of GrabPay Singapore, Malaysia, and the Philippines, said in a statement.
Grab is also exploring spinning off its financial services unit and has mandated banks to approach potential minority investors, Reuters reported last month, citing sources. Banks and insurance firms are among the potential investors in the Grab unit, a source has said. Lenders around the world are trying to partner with digital players to get closer to consumers.
A recent case in point would be Goldman Sachs' credit card deal with Apple that can potentially connect Goldman with hundreds of millions of iPhone users.
Competition is fierce, however, as banks try to work with the most successful digital players, who in return are vying with each other to get the better deal with banks.
"We are not the only ones to see the blinding insight that customers are spending more time on their phones whether in payment, ride sharing or chat ecosystems, but it is all about how you execute a partnership," Citi's Luchetti said.
"Thirty years ago, if you wanted to be relevant to clients, you needed to have as many branches as you could. Today ... people spend hours every day in these virtual cities, and the equivalent of having a branch in every corner is being able to provide your services within these digital ecosystems."
Citi has closed hundreds of branches in Asia in recent years, shrinking its network from 600 to roughly 250, while, like its competitors, spending heavily on digital initiatives.
"Now we have reached a point of decent stability," Luchetti said. "If you asked me to make a bet on how many branches we'll have in a few years, I would say a number in the low 200s."
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478de905182a534cc92d459bc24b65b3 | https://www.cnbc.com/2019/06/11/foxconn-can-build-iphones-for-us-outside-of-china.html | Foxconn says it can build enough iPhones outside China to meet US demand: Report | Foxconn says it can build enough iPhones outside China to meet US demand: Report
Apple chief design officer Jony Ive (L) and Apple CEO Tim Cook inspect the new iPhone XR during an Apple special event at the Steve Jobs Theatre on September 12, 2018 in Cupertino, California.Justin Sullivan | Getty Images News | Getty Images
Foxconn, which builds most of Apple's iPhones and iPads in China, told Bloomberg it has the capacity to build enough iPhones outside of China to satisfy demand.
Making iPhones outside China could help Apple avoid additional taxes if President Donald Trump follows through with his threat to impose tariffs on another $300 billion worth of Chinese imports.
Apple's new iPhones are expected to launch in September, and any increase in tariffs could mean more expensive iPhones. Consumers have shown they're less willing to upgrade to pricier devices.
"Twenty-five percent of our production capacity is outside of China and we can help Apple respond to its needs in the U.S. market," Foxconn executive Young Liu said, Bloomberg reported Tuesday. "We have enough capacity to meet Apple's demand."
Apple no longer discloses how many iPhones it sells each quarter, but in February 2018 Counterpoint Research said a record 22 million devices were sold during the fourth quarter of 2017, more than 40% of the 51.2 million units Apple sold during that quarter worldwide.
Foxconn was said to begin manufacturing some of its high-end iPhones in India this year, and according to Bloomberg, it has started "quality tests for the iPhone XR," in the country. The iPhone XR is Apple's more affordable version of the iPhone XS and iPhone XS Max, all three of which were launched last September.
In May, J.P. Morgan said Apple would need to increase the cost of the iPhone by 14% to offset the costs of the current tariffs, unless it absorbs the costs itself. Bank of America estimated a 20% increase if Apple chose to move manufacturing to the United States.
Apple CEO Tim Cook said last week that "the Chinese have not targeted Apple at all" in regards to tariffs on U.S. goods into China. Such tariffs could increase the cost of the iPhone to Chinese consumers, an increasingly important market for Apple.
Read more on Bloomberg.
VIDEO4:4004:40Apple's WWDC keynote, in 280 secondsNews Videos
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7c7f45de4abcd8d70718e2c244ff38a5 | https://www.cnbc.com/2019/06/11/huawei-exec-we-need-more-time-to-become-worlds-top-phone-maker.html | Huawei exec: We need more time to become the world's top phone maker | Huawei exec: We need more time to become the world's top phone maker
A woman cycles past a Huawei store in Shenyang, China.Stringer | Reuters
China's Huawei Technologies will need more time to become the world's largest smartphone maker, a goal it originally aimed to achieve in the fourth quarter of this year, a senior executive said on Tuesday.
"We would have become the largest in the fourth quarter (of this year) but now we feel that this process may take longer," said Shao Yang, chief strategy officer of Huawei Consumer Business Group, without elaborating on reasons.
Huawei currently sells 500,000 to 600,000 smartphones a day, he said in a speech at the CES Asia technology show in Shanghai.
The comments come after the United States put Huawei on a blacklist last month that bared it from doing business with U.S. companies on security grounds without government approval, prompting some global tech companies to cut ties with the world's largest telecommunication equipment maker.
The company in January said it could become the world's biggest-selling smartphone vendor this year even without the U.S. market. It was the second-biggest vendor in the first quarter, behind South Korea's Samsung Electronics, according to research and advisory firm Gartner.
Analysts estimate the recent U.S. sanctions could push Huawei's smartphone shipments down as much as a quarter this year and cause its handsets to disappear from overseas markets.
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7d72d6500ca7672a5fd2aed521e05fb4 | https://www.cnbc.com/2019/06/11/trump-says-devalued-currencies-put-us-at-a-disadvantage-and-the-fed-doesnt-have-a-clue.html?&qsearchterm=trump%20fed | Trump says 'devalued' currencies put US at a disadvantage and the Fed doesn't have a 'clue' | Trump says 'devalued' currencies put US at a disadvantage and the Fed doesn't have a 'clue'
VIDEO7:4407:44President Trump's remarks on China, Mexico trade and Nancy PelosiThe Exchange
President Donald Trump said Tuesday that the U.S. dollar is at a disadvantage compared with other major currencies like the euro as central banks keep interest rates low while the Federal Reserve's rates are higher by comparison.
"The Euro and other currencies are devalued against the dollar, putting the U.S. at a big disadvantage," Trump tweeted, adding the Fed doesn't have "a clue."
Trump also said in a separate tweet that the U.S. has low inflation, calling it "a beautiful thing."
Tweet
The dollar fell slightly against the euro following Trump's tweets.
Trump has repeatedly gone after the Fed for what he considers tight monetary policy. The Fed hiked rates four times in 2018.
VIDEO11:0511:05Heritage Foundation's Stephen Moore: Trump has a right to weigh in about FedSquawk Box
In December, after the central bank raised rates for the last time in 2018, Trump eviscerated the Fed. Trump called the Fed "the only problem our economy has" in a tweet, noting officials "don't have a feel for the Market."
Trump also told CNBC's Joe Kernen on Monday that the Fed "made a big mistake: They raised interest rates far too fast." Meanwhile, China keeps devaluing its currency, Trump added. "Don't forget: the head of the Fed in China is President Xi ... he can do whatever he wants."
But market expectations for lower rates have increased recently after the release of weaker economic data. The Labor Department's jobs report for May showed employment growth of just 75,000, well below estimates. Meanwhile, manufacturing activity decelerated last month to its slowest pace since October 2016.
The data, coupled with comments from Fed Chair Jerome Powell, led traders to price in a 78% chance of lower rates by July, according to the CME Group's FedWatch tool. Powell said last week that the Fed will "act as appropriate" to keep the current economic expansion going.
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ffe556982de984858e81a6f238313df3 | https://www.cnbc.com/2019/06/11/wells-fargo-is-reportedly-struggling-to-find-a-new-ceo.html | Wells Fargo is reportedly struggling to find a new CEO | Wells Fargo is reportedly struggling to find a new CEO
A flag waves outside of a Wells Fargo bank branch October 3, 2008 in San Francisco.Justin Sullivan | Getty Images News | Getty Images
Wells Fargo is struggling to fill its open chief executive officer role, The Wall Street Journal reported Tuesday.
Two of the bank's top candidates declined offers to lead the fourth-largest U.S. bank.
PNC's chief executive officer, William Demchak, and former U.S. Bancorp CEO Richard Davis both turned down the Wells Fargo board's offer to head the bank, people familiar with the matter told the Journal.
Wells Fargo was pursuing Gordon Smith, the CEO of J.P. Morgan's consumer and community bank, to take the helm, but Smith told the Journal that he is likely staying at J.P. Morgan.
Former CEO Tim Sloan resigned in March, after 31 years at Wells Fargo. Sloan was supposed to clean up the mess left by his predecessor, but he struggled to satisfy regulators' demands to revamp the bank.
In 2016, news that employees at Wells Fargo had created millions of fake banks accounts to meet sales quotas severely damaged the reputation of the bank and spurred scrutiny from regulators. Last year, the Federal Reserve capped the bank's asset growth after Wells Fargo discovered more problems with customer dealings.
The bank's general counsel, Allen Parker, took over as interim CEO after Sloan's resignation.
Shares of Wells Fargo are down more than 16% over the last 12 months and have fallen more than 3% since Sloan stepped down.
— Read the full Wall Street Journal article here.
VIDEO12:1212:12Watch CNBC's full interview with Wells Fargo CFO John ShrewsberryU.S. Council Members
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c921c4a01e123349954484138d5be4f5 | https://www.cnbc.com/2019/06/12/amazon-to-shut-restaurant-delivery-service-in-us.html | Amazon to shut its restaurant delivery service in the US | Amazon to shut its restaurant delivery service in the US
Amazon Restaurants delivery serviceSource: Amazon Prime Now
Amazon.com said on Tuesday it would end its U.S. restaurant food delivery service on June 24, giving in to intense competition from GrubHub, DoorDash, Uber Technologies' Uber Eats services.
"A small fraction of Amazon employees are affected by this decision, and many of those affected have already found new roles at Amazon," the company said in a statement. "Employees will be offered personalized support to find a new role within, or outside of, the company."
Amazon Restaurants was launched in 2015 in Seattle and was designed to give Prime members a way to order meals, apart from products and groceries, through the online retailer. The service was expanded to more than 20 U.S. cities, and then to London where the program ended in November.
The unit was led at one point by the executive also in charge of Amazon's ticketing business, but was overseen later by an executive running its two-hour grocery delivery service, Prime Now, according to their LinkedIn profiles.
However, Amazon still has ambitions in food delivery. In May, the company took a stake in British online food delivery company Deliveroo, leading a $575 million fundraising.
Shares of Amazon edged up 0.4%, while GrubHub rose 8.6%.
Geekwire first reported the news.
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ff85756a41ca909bbe0135aa6d7331d3 | https://www.cnbc.com/2019/06/13/embark-hires-tesla-autopilot-perception-lead-zeljko-popovic.html | Tesla loses key Autopilot engineer to self-driving truck start-up Embark | Tesla loses key Autopilot engineer to self-driving truck start-up Embark
Embark self-driving truckEmbark
Zeljko Popovic, a leader within Tesla's Autopilot team, is leaving for Embark, the autonomous trucking start-up in San Francisco, according to a person familiar with the move. Embark confirmed the hire.
The departure comes at a critical time, as Tesla is promising its electric vehicles will be capable of operating as "robotaxis" by the end of next year — which is to say, they'd be fully self-driving in normal conditions, without human intervention. Tesla also says it plans to start production of its long-awaited electric semi trucks by the end of 2020.
Popovic, whose background is in robotics, built and ran the perception team for Tesla's Autopilot division.
According to people familiar with his accomplishments there, Popovic managed the development of highly accurate maps of U.S. highways for Tesla, and created a "sensor fusion system" which combines data from the many cameras, radars and ultrasonic sensors that Tesla vehicles employ. The sensor fusion system enables Autopilot to "see" other cars on the road.
At Tesla's annual shareholder meeting this week, CEO Elon Musk acknowledged that some Tesla self-driving features still need improvements. "Summon," which allows a driver to automatically call their car over from wherever it is parked, was supposed to be widely available by now. But at the meeting, Musk said it is still being tweaked.
Founded in 2015, Embark integrates its self-driving systems into Peterbilt semis rather than building its own trucks completely from scratch, and the trucks are generally operated with human supervisors behind the wheel. It now has more than a dozen trucks and 60 employees. Amazon is using self-driving trucks developed by Embark to haul some cargo on the I-10 interstate highway in California, both companies previously acknowledged.
Attrition has been a big issue for Tesla in the last two years as the company has missed some of its production goals and its stock price has swung wildly. Among others, self-driving VP Jim Keller left for Intel, and head engineer Doug Field rejoined Apple to work on that company's secretive self-driving technology.
Popovic and Tesla did not immediately respond to requests for comment.
WATCH: Self-driving trucks are here -- here's how they'll transform the trucking industry
VIDEO13:0513:05How the rise in self-driving trucks will transform the trucking industryTech
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25de93eaf9c7872fda8262d50017a661 | https://www.cnbc.com/2019/06/13/lilium-five-seater-electric-air-taxi-how-much-does-a-ride-cost.html | Flying taxis could lift off in six years — here's how much it'll cost to ride one | Flying taxis could lift off in six years — here's how much it'll cost to ride one
Lilium says its five-seater jets can travel up to 186 in one hour.Lilium
Flying cars have for years been limited to the world of fiction. Now there are plenty of companies hoping to make the sci-fi dream a reality.
One such firm is Lilium, a Munich-based start-up with big ambitions for the future of transportation: a five-seater electric air taxi, due to launch commercial flights in 2025.
The main goal Lilium is hoping to achieve, according to Chief Commercial Officer Remo Gerber, is making such a service an affordable one that people can use just like they would a ride-hailing app like Uber.
Around the time Lilium was established, its founders realized they didn't want to make a "luxury product" or "something we sell to rich individuals," but a "service that's affordable," Gerber told CNBC in an interview.
To get a better idea of just how much that would cost, the executive used the example of taking New Yorkers from Manhattan to JFK Airport within six minutes for about $70.
For reference, Uber plans to take passengers in its helicopter ride-sharing service from Manhattan to JFK for a roughly $200 flight that takes around eight minutes.
Lilium says its aircraft, which takes off and lands vertically, can travel 300 kilometers in an hour after a single charge. In the U.K. that means it would be able to take someone from London to Manchester — in other words, from the South to the North of England – in one journey.
In terms of general pricing, Gerber explained that a typical short-distance ride would cost about the same as a trip with a ride-hailing firm like Uber or Lyft. Long-distance flights would cost the equivalent of traveling economy class in an airplane, he added.
With a route like London to Manchester in the U.K., Gerber said, customers would have to fork out a similar amount to what they would pay for a train ticket. According to travel metasearch engine Gopili, an average train ticket on that route costs £60 ($76).
The German start-up's five-seater jet took to the skies for the first time last month, a key milestone for the company. Prior to that, Lilium had tested a two-seater variant in 2017.
Lilium was founded in 2015 by four friends from the Technical University of Munich. To date, it's raised about $100 million from investors including China's Tencent and the London-based venture capital firm Atomico.
Six years from now, Lilium will be available in "a number of cities around the world," Gerber said.
And while Lilium's aircraft is controlled by a pilot, the firm says it's putting together a team of experts focused on unmanned jets. According to Morgan Stanley, the market for autonomous flying cars could be worth $1.5 trillion by 2040.
Other than Uber, Lilium faces stiff competition from major aerospace players Boeing and Airbus, as well as the German start-up Volocopter, which is also working on a vertical take-off and landing air taxi.
Watch: Uber unveiled its flying taxi prototype, which looks like a giant drone
VIDEO1:4201:42Uber says its flying taxis are just 5 years awayDigital Original
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feeff138c75588953f940132f7fc3591 | https://www.cnbc.com/2019/06/13/watch-larry-kudlow-speak-live-on-the-economy-and-trade.html | Watch Larry Kudlow speak live on the economy and trade | Watch Larry Kudlow speak live on the economy and trade
[The stream is slated to start at 12:15 ET. Please refresh the page if you do not see a player above at that time.]
Larry Kudlow is the director of the National Economic Council. He is speaking Thursday to the Peterson Institute for International Economics in Washington, D.C. The topic is economic and trade policy.
Kudlow is speaking as the White House is locked in a tariff battle with China that has seen the administration impose tariffs on $250 billion of Chinese imports and has threatened to put levies on $300 billion more. President Donald Trump has been optimistic that a deal will get done but has pledged to keep the tariffs in place until then.
Read more:CEO optimism takes a hit in the second quarter as trade headwinds persistThe trade war is taking an enormous bite out of profits for Wall Street's biggest names
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606fc321440839537ab348b2c4108c35 | https://www.cnbc.com/2019/06/14/bayer-to-invest-5point6-billion-in-weedkiller-research-to-help-reputation.html | Bayer to invest $5.6 billion in weedkiller research to help reputation | Bayer to invest $5.6 billion in weedkiller research to help reputation
Roundup weed killing products are offered for sale at a home improvement store on May 14, 2019 in Chicago, Illinois.Scott Olson | Getty Images
Germany's Bayer sought to repair its reputation on Friday after damage caused by U.S. litigation over claims its glyphosate pesticide causes cancer, saying it would invest 5 billion euros ($5.6 billion) in weedkiller research.
Bayer's shares hit seven-year lows after a California couple was last month awarded more than $2 billion in the largest-ever U.S. jury award over claims that glyphosate-based weedkiller Roundup, which the German life sciences group acquired when it took over Monsanto, causes cancer.
As well as saying it would invest 5 billion euros in research over the next ten years, Bayer promised to reduce its environmental impact by 30% through 2030 via measures such as more precise and more sparing application of crop chemicals.
"We listened. We learned," Bayer said on its website, adding that it had "heightened responsibility and ... unique potential to advance farming for the benefit of society and the planet."
The share price slide has left Bayer with a market valuation of $56 billion, less than it paid for Monsanto, piling pressure on CEO Werner Baumann who championed the takeover and who has faced a backlash from shareholders.
"While glyphosate will continue to play an important role in agriculture and in Bayer's portfolio, the company is committed to offering more choices for growers," said Bayer, which maintains that glyphosate is safe.
Its move follows a third consecutive U.S. jury verdict against Roundup, which Bayer acquired as part of its $63 billion purchase of Monsanto last year. Bayer says glyphosate is safe.
A spokesman said the investments in weed control were part of a previously approved budget.
Baumann has beefed up Bayer's public relations machine in an attempt to repair its image, which also faces a backlash in Germany over a collapse in insect populations, which environmentalists blame on pesticides used in farming.
Matthias Berninger, a former German deputy agriculture minister and green-party politician, was hired as chief lobbyist earlier this year and is due to unveil a new sustainability strategy for Bayer in the second half.
Bayer said it would seek to reduce its environmental footprint by scaling down crop protection volumes and enabling more precise application. It would increase transparency around research efforts and the forthcoming process of re-registering glyphosate in the European Union.
"This will help to restore and retain biodiversity, combat climate change, and make the most efficient use of natural resources," it said.
Bayer added it will only sell crop protection products in developing countries if they also meet the safety standards of a majority of eight leading global regulators in jurisdictions such as the EU, the United States or Brazil.
Western crop chemicals companies have faced criticism from environmentalists for selling products in developing countries with local approval, even though clearance at home had ended.
A spokesman said no products had been withdrawn yet and Bayer would now look into its product portfolio.
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2953d1d73175dae3d214644d709b841b | https://www.cnbc.com/2019/06/17/boeing-to-provide-parts-for-some-british-airways-airbus-jets.html | Boeing inks deal to provide parts for rival Airbus planes | Boeing inks deal to provide parts for rival Airbus planes
A British Airlines Airbus A320Nicolas Economou | NurPhoto | Getty Images
Boeing on Monday said it struck a "first of its kind" deal to boost its revenue beyond manufacturing airplanes: supplying parts for aircraft made by its main rival, Airbus.
The Chicago-based maker of the 737 said it will provide parts for British Airways' Airbus A320s and its A320neo narrow-body jets.
Boeing two years ago separated out its aircraft services business, which CEO Dennis Muilenburg said could grow to a $50 billion-a-year business. The unit generated more than $17 billion of Boeing's record $101 billion in sales last year.
Boeing has been trying to increase its control in the aircraft-part supply chain, efforts that have included joint ventures or outright acquisitions. The effort included deals with companies that make airplane engines, seats and other components.
Under the agreement, Boeing will own and manage parts for British Airways, which operates both Boeing and Airbus planes, it said.
"We are proud to have the opportunity to serve British Airways' needs regardless of platform," Boeing's senior vice president of commercial sales and marketing, Ihssane Mounir, said in a release.
Airbus could offer a similar arrangement for its airline customers who operate mixed fleets, such as British Airways, but it does not currently have a customer for that service, Airbus spokesman James Darcy.
VIDEO3:0603:06Boeing CEO: Making 'good, steady progress' on 737 MAX certificationParis Air Show
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04183ce0eb06dcd809311501d2bffe9f | https://www.cnbc.com/2019/06/17/disney-gets-a-rare-downgrade-with-analyst-noting-a-record-valuation.html | Disney gets a rare downgrade with analyst noting a 'record' valuation | Disney gets a rare downgrade with analyst noting a 'record' valuation
Chairman of The Walt Disney Company Bob Iger.Drew Angerer | Getty Images
Disney's stock is rising too far too fast, Imperial Capital said Monday, noting the stock is trading at a record valuation on one basis.
In a rare downgrade on Wall Street for the popular shares, Imperial Capital lowered its rating for Disney to in line from outperform but maintained its target price of $147 on Monday.
"The core rationale for lowering our rating to in-line is simply due to the fact that the stock has performed consistent with our previous outperform rating — up by 25.7% since we established that rating on 11/21/18, and ahead of the , which is up 7.8% in that same span of time," Imperial Capital's David Miller said in a note to clients.
The stock fell 1% Monday morning.
Disney's stock has been on a tear, up nearly 30% this year, after the announcement of details about the new Disney+ streaming service and the release of recording-breaking film, "Avenger's: Endgame." Miller said these announcements, combined with the disposal of the Regional Sports Networks, are already built into the stock price.
The analyst said Disney shares are now at "record multiples."
"We have never seen DIS trade higher than an 18.0x multiple on the out year, and yet the stock is now at 21.7x our F2020 core, non-GAAP EPS estimate of $6.53, and 19.2x our F2021 revised non-GAAP EPS estimate of $7.36," Miller said.
Disney is widely loved on Wall Street with 14 buy ratings and four hold ratings, according to TipRanks.com. No analysts recommend selling the stock. The last time Disney was downgraded by a firm was last June, when Pivotal moved to a sell rating from hold.
But Miller said other analysts are overlooking the fact that Disney's media networks business is on the decline.
"It seems as if investors with higher targets than ours have perhaps forgotten that DIS' legacy Media Networks business is essentially a "melting ice cube," in our opinion," said Miller.
And Disney+ and streaming service Hulu are not expected to break even until 2024, Miller added.
VIDEO1:4601:46'Avengers: Endgame' just shattered multiple box office recordsNews Videos
— With reporting from CNBC's Michael Bloom.
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6c45922bf1dae1f3a6a66e8be0249ab6 | https://www.cnbc.com/2019/06/17/email-sextortion-scams-on-the-rise-says-fbi.html?&qsearchterm=malwarebytes | Email sextortion scams are on the rise and they're scary — here's what to do if you get one | Email sextortion scams are on the rise and they're scary — here's what to do if you get one
Dimitri Vervitsiotis | Photodisc | Getty Images
"You can panic," reads the subject line of one fake sextortion email.
Another has a victim's real password in the subject line, in an attempt to establish authenticity.
These low-tech frauds spiked in 2018, according to the FBI's Internet Crime Compliant Center (IC3), netting millions for scammers.
Last year, electronic extortion complaints rose 242% to 51,146 reported crimes, with total losses of $83 million.
While the FBI does not break out sextortion from the total number of extortion crimes reported, a spokesperson told CNBC, "The majority of extortion complaints received in 2018 were part of a sextortion campaign in which victims received an email threatening to send a pornographic video of them or other compromising information to family, friends, coworkers, or social network contacts if a ransom was not paid."
The advice from experts: Don't fall for it.
"They play on our basest levels of psychology," said Priya Sopori, partner at law firm Greenberg Gluster and a former assistant U.S. attorney who prosecuted cybercrimes, including sextortion.
"You will read personalization into any generic statement. And if you believe that there are hackers out there that know every aspect of your life, and maybe they even know your life better than you do, you might actually pay even if you've done nothing at all."
While there are examples of real sextortion, especially involving the theft of real nude photos or videos, hoax sextortion emails have no basis in reality.
Scammers send these emails out as form letters. They include claims about supposed improprieties, often including claims that the sender has evidence of your affairs, has hacked your webcam to take damning photos or videos of you or has evidence of pornographic material you've viewed.
Here's a sample letter, courtesy of antivirus software company Malwarebytes, which researches this and other scams:
I am well aware [REDACTED] is your pass words. Lets get right to point. Neither anyone has paid me to investigate you. You may not know me and you are probably thinking why you're getting this e-mail?actually, i installed a software on the adult videos (pornographic material) web-site and do you know what, you visited this website to have fun (you know what i mean). While you were viewing videos, your web browser began working as a Remote Desktop that has a keylogger which gave me accessibility to your display and also cam. Just after that, my software gathered every one of your contacts from your Messenger, Facebook, as well as email . after that i created a double video. 1st part displays the video you were viewing (you've got a nice taste haha), and next part shows the recording of your cam, yeah its you.You have not one but two choices. Shall we read up on these options in aspects:First alternative is to just ignore this message. in such a case, i am going to send out your actual video to every single one of your personal contacts and think regarding the awkwardness you will definitely get. and definitely if you happen to be in a loving relationship, how it would affect?Number 2 solution is to pay me $889. Lets name it as a donation. in this situation, i most certainly will asap remove your video footage. You could carry on daily life like this never occurred and you surely will never hear back again from me.
"First, have a healthy level of skepticism," said Malwarebytes CEO Marcin Kleczynski.
"Then, remember, they almost certainly haven't been recording you or have access to this type of information, if it even exists."
His company has looked at bitcoin wallets associated with criminals perpetrating these schemes, Kleczynski said, where criminals ask victims to send what are often unusual sums -- $514, $607 and $618 in three recent examples. Apparently they spark enough panic to net the criminals $10,000 to $20,000 per week, according to Malwarebytes research.
"There is an incredibly low barrier of entry here. It's a commodity attack," he said. Criminals don't need any hacking skills at all to pull off sextortion. They can simply rely on leaked email addresses stolen from huge companies and email providers in the last decade.
In the slightly more sophisticated version of the crime, scammers buy "dirt cheap" passwords associated with those emails and include the password in the subject line as an additional lure, falsely claiming they have used the password to access sensitive information about you.
But it's all fake. The only reason it works so well, Sopori said, is because "People, especially young people, have come to believe there's no such thing as privacy anymore." This belief leads people to assume that anyone can spy on them at any time, or can even misuse their information to create the appearance of impropriety where it doesn't exist.
"So it does seem to indicate that, when hear that people don't care about privacy anymore, the success of these scams tells us the opposite might be true," Sopori said. "People obviously do care about privacy. They do care about the idea that someone could have pictures of you, and they believe the threats that 'I will send them to your brothers, your sisters, your friends.' Privacy is still important. Shame can be a tremendous weapon that these criminals use."
Besides having a healthy level of skepticism -- it is highly, highly unlikely anyone sending one of these emails knows you or has information on you, Kleczynski emphasises -- checking and updating your spam filters can also help, to make sure those filters are catching the latest versions of these scams.
Changing passwords or using a password manager can also help, so that you can rest assured any passwords displayed in an alarming subject line are no longer in use. Multifactor authentication, which gives you the option of using other methods to log in other than passwords, can also help ease worries about passwords, he recommends
If you receive an email and it worries you, you can report it to your company's IT department or local police -- who are well-aware of these scams, Sopori said. You can also report the emails to the FBI's IC3.
VIDEO2:4302:43Jim Cramer: Big Tech IPOs are in a happy phase right nowSquawk on the Street
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06ad52799ff6caef851fb1ad705c31eb | https://www.cnbc.com/2019/06/17/facebook-stock-rises-over-anticipation-of-new-cryptocurrency.html | Facebook stock pops as investors anticipate its cryptocurrency announcement this week | Facebook stock pops as investors anticipate its cryptocurrency announcement this week
David Marcus, vice president of messaging products at Facebook Inc., speaks during the Facebook F8 Developers Conference in San Francisco, California, U.S., on Wednesday, March 25, 2015.David Paul Morris | Bloomberg | Getty Images
Facebook's stock rose 4.2% Monday as investors anticipate the company's entrance into the hot cryptocurrency space.
According to reports from The Wall Street Journal and elsewhere, Facebook has partnered with companies like Uber, Visa and PayPal to create its new cryptocurrency called Libra. The initiative is run by David Marcus, the Facebook executive who previously ran Facebook Messenger. He was the president of PayPal before joining Facebook.
The digital currency will allow Facebook users to send money to each other and pay for goods through Facebook's family of apps like Messenger and WhatsApp. But details are pretty scarce beyond that. Still, analysts were bullish on Facebook's impending crypto announcement, saying it could open up new sources of revenue outside of its core digital advertising business.
"We believe this is a major initiative for Facebook, and one that has the potential of putting the company front and center in areas beyond advertising, including commerce and financial services, materially expanding its total addressable market and growth prospects," analysts at SunTrust said in a research note this week.
The price of popular cryptocurrency bitcoin also rose more than 3% on anticipation that Facebook's entry into the space could spark new interest.
VIDEO2:5902:59SunTrust: Big Tech breakups would drive shares higherSquawk Alley
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56fd1a7520f132342b41dd6591e5239d | https://www.cnbc.com/2019/06/18/tesla-loses-felicia-mayo-human-resources-vp-and-head-of-diversity.html | Tesla loses another exec: HR vice president and head of diversity Felicia Mayo | Tesla loses another exec: HR vice president and head of diversity Felicia Mayo
Felicia Mayo in 2016, when she worked for Juniper Networks.Marla Aufmuth/Getty Images
Tesla vice president of human resources and head of diversity Felicia Mayo has left the company.
A company spokesperson told CNBC, "We'll miss Felicia and would like to thank her for her hard work over the last two years and wish her all the best in the future. We have a talented HR team in place that will continue to report into our VP of People & Places and will remain focused on advancing our mission and making Tesla a great place to work."
Tesla is known as a mission-driven and hard-driving workplace with significant pressure to hit ambitious goals and deadlines meted out by CEO Elon Musk. Among other things, these conditions have led to a high level of churn among Tesla executives, in recent years.
Mayo is one of a few black women leaders to break the glass ceiling and rise to executive ranks in a large, Silicon Valley tech firm. Less than 0.5% of Silicon Valley tech leadership positions are held by black women, according to 2018 statistics from the Kapor Center.
She previously served as vice president of global talent acquisition and diversity at Juniper Networks, then held the role of VP of Human Resources at Tesla for less than two years. She reported to Tesla's vice president of people and places, Kevin Kassekert, and CEO Elon Musk.
During her tenure, Tesla expanded its operations internationally, began manufacturing its Model 3 electric sedan in high volumes, and implemented controversial strategies ranging from store closures and other restructuring efforts, to giving employees a discount on Tesla vehicles, if they agreed to use and give feedback on beta versions of the company's Full Self Driving software.
Mayo's departure follows the resignation of other Tesla executives in the last year, including:
Tesla's former chief people officer, Gaby ToledanoGeneral Counsel, Todd MaronVP of Legal, Phil RothenbergCFO Deepak Ahuja (who announced his retirement at the end of a Tesla earnings call in January this year)VP of Engineering, Michael Schwekutsch
WATCH: Highlights from Elon Musk's speech at the Tesla shareholder meeting
VIDEO2:1602:16Watch the highlights from Elon Musk speaking at Tesla shareholder meetingAutos
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52753fc878ac19af5efd8fe6d8c79358 | https://www.cnbc.com/2019/06/19/heres-what-the-stock-market-liked-from-the-fed.html | Here's what the stock market liked from the Fed | Here's what the stock market liked from the Fed
Jerome Powell, chairman of the U.S. Federal Reserve, speaks during a news conference following a Federal Open Market Committee meeting in Washington, D.C., on Wednesday, June 19, 2019.Andrew Harrer | Bloomberg | Getty Images
The Fed came very close to promising a rate cut Wednesday, and now markets are focused on a possible July rate cut.
"I think they're fully planning on cutting in July, absent stronger data," said Ed Keon, QMA chief investment strategist. "The market liked it now, but it's important to keep in mind, rate cuts are not a magic wand. There is clear evidence of weakening of economic conditions."
The Fed sent a dovish message in its statement, but even more so in its interest rate forecast, released following its two-day meeting Wednesday afternoon. After the statement, stocks and bonds flip-flopped before settling into a pattern, where both markets were bid higher on the prospect of a rate cut. Bond yields, which move opposite price, fell with the biggest decline in the 2-year yield, which closely follows Fed expectations.
VIDEO2:4302:43Lots of opportunity in financial stocks, says strategistClosing Bell
The Fed's rate policy committee left the fed funds target rate range unchanged at 2.25% to 2.50%, while it tweaked some of the language in its statement to suggest it sees more risks to the economy. It also removed the phrasing that it would be "patient," language it added earlier this year to indicate Fed officials were willing to wait and see more information before making a rate move.
Analysts focused on the fact that the Fed's interest rate projections showed eight of 17 officials are now expecting the Fed will need to cut rates at least once this year. The fed funds futures market Wednesday afternoon moved to price in three quarter-point hikes this year, including 100% odds for a quarter-point hike this summer, according to BMO.
"That was the biggest surprise in terms of the dovishness. The market was already heading in fairly dovish and everyone did anticipate them taking out the word 'patience,'" said Leslie Falconio, senior strategist with UBS Global Wealth Management Chief Investment Office. "It was really the dot plot that came off on the dovish side."
She also noted that the Fed's interest rate forecast, presented in the so-called 'dot plot,' also showed the Fed's rate forecast falling from 2.6% in 2020 to 2.4%, pricing at least one rate cut. Fed officials' interest rate forecasts are included anonymously in the dot plot, which literally is a chart.
"They're setting us up for a rate cut, but who knows when," said Peter Boockvar, chief investment strategist at Bleakley Advisory Group. "If the data weakens, they'll cut in July. If it stays steady or gets better, they won't. People should understand if they're going to cut it's because the market data got worse. ... This is showing the market focus is on the cuts but not on the reason for the cuts."
While the markets took the Fed as dovish and ready to move, some economists stuck with their forecasts for no cuts.
"The market reacted dovishly to the June FOMC, in part reacting to 8 dots showing cuts in 2019 and 7 of these indicating 50 [basis points] of cuts," Citigroup economists wrote. "While the statement and dots keep cuts as early as July squarely on the table, the outcome is very close to our expectations and does not change our base case for no cuts in 2019 — which also remains the base case of a slim majority of Fed officials."
But John Briggs, head of strategy at NatWest Markets, said the Fed should already have cut and that it loses control of the narrative around the rate cut if it waits.
VIDEO5:2905:29This strategist says it's all about inflationFast Money
"If seven of them think they need to cut twice in 2019, what are they waiting for?" said Briggs. "They're going to have to follow the market. ... granted the majority didn't think they needed it, but this is an awful fine line."
Falconio said it looks like a cut is coming but the market may be expecting too much. "I think we have to wait to see what happens, but I think July might be premature. I think we have to wait to see what happens at the G-20," she said.
Analysts said the Fed, like the markets, is watching the upcoming G-20 meeting at the end of the month, where President Donald Trump is expected to meet China President Xi Jinping to see if there is a chance to resolve the trade war.
Fed Chair Jerome Powell, speaking to the media after the meeting, said the Fed needs to see more data to determine whether the recent weakness in things such as jobs creation was temporary or a trend. In May, just 75,000 jobs were added.
"We want to see and we want to react to developments and trends that are sustained and genuine," said Powell. He also said the Fed is concerned by both trade conflicts and the slowing in the global economy.
"We'll use our tools as appropriate to sustain the expansion," said Powell.
The S&P 500, which has ended nine of the last 10 Fed days negative, rose 8 points to close at 2,926. The 2-year yield fell to 1.74%, from as high as 1.91% earlier in the day. The 10-year yield was at 2.02%.
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a483815ed655e8386ed6a40b06692acb | https://www.cnbc.com/2019/06/19/save-more-for-retirement-by-saying-hello-to-your-future-self.html? | How to get investors to save more for retirement? Perhaps by saying hello to their future self | How to get investors to save more for retirement? Perhaps by saying hello to their future self
tommasolizzul | iStock | Getty Images
The number of Americans prepared to meet their basic expenses in retirement has drastically declined in the last 20 years, according to research published by Boston College.
This study confirms, at least to some degree, that it's not only the millennial generation that has difficulty knowing when to cut out the avocado toast or whatever luxury de jour may be standing in the way of retirement. Retirement planning is a source of anxiety for all demographics.
The question for financial advisors now becomes "How can you get investors to turn the tide?"
Perhaps the answer is getting those people to meet their future self.
With advances in technology, researchers can create virtual avatars of our future selves using face-aging programs. An April 2019 CNBC story detailed how meeting a virtual version of yourself could help solve the problem of saving for retirement. To some degree, that notion is correct, but research shows that just thinking about our future self may not be enough.
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The problem is that we don't care enough about our future selves. Sure, we care in the abstract, but our uncertainties as to what will unfold, as well as our tendency to underestimate the pace at which time passes, creates a cognitive dissonance. This disconnection from our future selves could help explain why we often prioritize the near-term over the long-term in our decision making.
Saving for the future often means suffering now. So, when faced with the decision to spend more today or save for the future, we often revert to spending today. We push the pain of saving off to a future version of ourselves in favor of today.
This dilemma can be seen all across our lives; for example, with eating and working , too, we often say "let's start that diet tomorrow." We plan to push the pain of a new diet, workout regime, or savings goal out into the future.
The reason for part of this, even if it seems odd, might be found in research that shows that we often view our distant future selves as almost entirely different people. In fact, neurological studies have found that our brain activity when thinking about the future self closely resembles the thought patterns which our brains conjure when thinking about other people. As such, we feel okay pushing the pain of these decisions off to this person because we are not connected with the future version of ourselves.
This disconnection between the current you and the future you could partially explain why Americans don't save enough for retirement. Why save for someone to whom you don't feel connected?
Conversely, those who perceive a closer continuity or connection with their future selves were more likely to set money aside for their future needs. A 2017 study by the Institute for the Future found that the majority of Americans (53%) rarely or never think about what life will be like in 30 years. As such, these individuals are not all that likely to feel a sense of connectedness with their future self.
The reality is that we don't know our future selves, so we tend to discount their pains, pleasures and needs. Finding a closer sense of connection helps bridge that gap. So, what can we do to better connect with our future self and start planning for a more fruitful retirement?
Well, you could start with what was uncovered in 2011, that interacting with an avatar or photo of your future self can boost retirement savings.
Professor Hal Hershfield of UCLA's Anderson School of Management partnered with Daniel Goldstein of Microsoft Research; Jeremy Bailenson, director of Stanford's Virtual Human Interaction Lab; and several other Stanford researchers to see if connecting people with their future selves could affect their willingness to save for that future self.
The issue for many is we often get caught up in getting by today, at the expense of our future goals. But the more we can connect ourselves to our future self and goals, the more we will act in alignment with these goals.Jamie Hopkinsdirector of retirement research at Carson Group
They took photos of college-age research subjects and digitally altered half of them to create virtual avatars at age 65 — complete with jowls, bags under the eyes and gray hair. This simple, but effective, technique increases the brain's connectedness to your future self, allowing to you save or take on some pain for that person today.
Additionally, with advances in virtual and augmented reality technologies, you may be able to have a conversation with a digital version of yourself or test out future retirement goals through technology.
In some cases, people who experienced this digital interaction roughly doubled what they were willing to set aside for retirement as compared to those who did not. But it is not just seeing a future version of yourself that triggers this response, it's getting connected to that person.
The perspective we take when thinking about our future self can also enhance our capacity for self-reflection. Start by thinking about your future self and how it relates to the current you as opposed to starting with the current you and comparing it to your future self. This simple technique can help you connect more closely with your future self.
Research by Hershfield has shown that writing a letter to your future self, even just a few months away, can improve your connectedness and improve behavior. His research has also demonstrated that continuity between our current self and future self can have positive impacts on areas beyond simply retirement savings, including improved health and increased exercise.
While these lessons can be applied at the individual level, they can also be adopted at the institutional level. For instance, 401(k) plan providers, financial advisors and financial service companies could help improve client behavior by having them engage in exercises that better connect them with their future selves.
Rawpixel Ltd | iStock | Getty Images
Additionally, the connectedness to your future self doesn't have to stop just at your retirement savings. It can be applied to your entire retirement planning process.
Those who are more connected also positively view products and companies that their future self will utilize. So, planning for life insurance needs, long-term care, Social Security claims and Medicare could all yield positive benefits when you are more connected to your future self.
It starts by increasing your connection with the future you, so you are more willing to act on behalf of future goals.
The issue for many is we often get caught up in getting by today, at the expense of our future goals. But the more we can connect ourselves to our future self and goals, the more we will act in alignment with these goals.
Get to know your future self, write a letter to yourself, look a digitally aged photo and think about how you get from where you are today to where you want to be. In the process, you might get to know your future self and be more likely to save for retirement, since that future you might no longer be a stranger.
— By Jamie Hopkins, director of retirement research at Carson Group
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3399490ea51c834aff8e42ba756a1aae | https://www.cnbc.com/2019/06/19/slack-reference-price-set-at-26-per-share-nyse.html | Slack reference price set at $26 per share: NYSE | Slack reference price set at $26 per share: NYSE
A trader works on the floor during the Slack Technologies Inc. IPO at the New York Stock Exchange (NYSE) in New York, June 20, 2019.Brendan McDermid | Reuters
Slack Technologies' reference price was set at $26 per share, the New York Stock Exchange announced Wednesday evening.
That does not necessarily mean Slack's Class A shares will open at $26 when they make their stock market debut on Thursday.
A reference price is not an offering price. It is also not an opening price. That number will ultimately be determined by the designated market maker, based off a calculation of a figure where buy orders can be met with sell orders.
VIDEO4:4904:49How the Slack IPO might compare to Uber and LyftSquawk Box
Like music streaming service Spotify, Slack decided to pursue a direct listing, rather than a traditional initial public offering. This allows existing investors to sell into the public markets, but the company won't be offering shares or raising fresh capital.
Slack, the maker of a popular team messaging service for businesses, will trade under the ticker symbol "WORK."
For the year ending Jan. 31, the company reported a net loss of $138.9 million on $400.6 million in revenue, according to documents it filed in April.
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d2b909791c837e585f63913f0842edc1 | https://www.cnbc.com/2019/06/20/falling-mortgage-rates-may-already-be-lifting-home-prices.html | Falling mortgage rates are heating home prices this summer | Falling mortgage rates are heating home prices this summer
A prospective home buyer, left, is shown a home by a real estate agent in Coral Gables, Florida.Getty Images
Mortgage rates have been falling steadily since the last week of April, and that may be reigniting home price appreciation.
The lower the rate, the more purchasing power buyers have.
Home price gains had been shrinking since last summer, when rates rose sharply, but are now making a U-turn with rates falling pretty steadily since April.
The median price of a home sold in May rose 3.6% from a year earlier, according to Redfin. That is the largest gain in seven months.
VIDEO0:4400:44What to expect from existing home sales dataClosing Bell
"As mortgage rates have fallen this month, Redfin has seen upticks in the number of people wanting to talk with our agents about buying homes and the number going on home tours," said Redfin chief economist Daryl Fairweather. "Recent surges in mortgage applications also reflect the impact low rates are having on homebuyer demand nationwide."
A report from CoreLogic showed prices up 3.6% in April annually, the first annual increase since March 2018.
"The pickup in sales between March and April, has helped to counter the recent slowing in annual home-price growth," said Frank Nothaft, chief economist at CoreLogic. "Mortgage rates are 0.6 percentage points below what they were one year ago and incomes are up, which has improved affordability for buyers. However, price growth has remained the highest for lower-priced homes, constraining housing choices for first-time buyers."
And that is the double-edged sword for most homebuyers today. The average rate on the 30-year fixed has fallen from just over 5% last November to about 3.86% today, according to Mortgage News Daily, providing a sizable savings on a monthly payment. But while buyers may get a break there, the supply of lower-priced homes for sale is still incredibly low.
The reasons for the supply constraint are manifold. Homebuilders are still not putting up as many entry-level homes as are needed because the costs of land, labor and materials are just too high. There were 404,000 job openings in the construction sector in April, the highest since the Great Recession, according to the National Association of Home Builders.
In addition, the existing supply of entry-level homes was eaten into significantly by investors during the housing crisis. Millions of homes that went to foreclosure are now part of a new asset class of institutional investor-owned rental portfolios.
VIDEO3:4403:44Mortgage applications surge as rates dropThe Exchange
Some analysts expected investors to sell off all these homes when the market recovered, but most did not, or if they did, they sold to other investors. Single-family rental demand is very high, and the properties continue to be lucrative, especially with management structures now built in.
Lower interest rates therefore mean even more competition for entry-level buyers. On the higher end, homes are more plentiful, but demand is far lower.
"In May, inventory posted its smallest increase in eight months, and fewer new listings came on the market than last year," said Fairweather. "Low rates and rising prices will likely lure sellers onto the market this summer, but the lack of new construction will continue to hold back sales growth."
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e1e4adc91f8b3582aeb506c5db01e343 | https://www.cnbc.com/2019/06/20/heres-who-bought-what-at-this-years-paris-air-show.html | Here's who bought what at this year's Paris Air Show | Here's who bought what at this year's Paris Air Show
PARIS - The 2019 Paris Air Show will run until Sunday as Le Bourget Airport, situated in the city's northern suburbs, opens its doors to the public.
While the aircraft and technology will remain on full display, all the big airline representatives and major plane manufacturers will leave, drawing the back room negotiations and mega deals to a close.
With the big announcements now made, CNBC takes a look at some of the contracts and promises announced in the commercial aviation sector since Monday.
In the months leading up to the show, Airbus had few orders coming on to its books. Observers predicted that the firm, enjoying its 50th anniversary, would be keen to announce deals under the Parisian sun.
The European plane maker kicked off Monday with a double-whammy press conference – first announcing the launch of its widely anticipated A321XLR and backing that up with 27 initial orders for the plane from Air Lease Corporation. The single-aisle plane is seen as an economic solution to airlines who want to serve long distances between smaller cities, and it gathered momentum throughout the week.
Airbus A321XLRSoruce: Airbus
50 XLR orders came in from American Airlines and 32 from Indigo Partners, the U.S. private equity fund run by airline investor Bill Franke. Other buyers of the XLR included Lebanon's Middle East, Philippines' Cebu Pacific Airlines, Qantas Airways and British Airways parent, IAG.
The A320 and A321 new engine option (neo), on which the XLR is based, also proved popular with Airbus inking contracts with China Airlines, Cebu Pacific Airlines, and Saudi Arabian airlines.
Virgin Atlantic signed up to 14 wide-body A330neos and said it would look at the option to buy six more. Virgin says it sees the expansion of Heathrow airport as an opportunity to become a second flag carrier out of the U.K. after British Airways.
Contract value of the deals is not released but the sticker price before negotiation for completely new Airbus sales looks to have exceeded $35 billion.
Boeing's commercial aircraft team has had well documented problems leading up to this year's Paris Air Show The grounding of the 737 Max plane following two fatal crashes has seen airline interest grind to a halt.
Some felt the U.S, plane manufacturer might offer a steep discount to get some fresh momentum and belief behind the Max but after the opening Monday, typically a busy day for air show orders, Boeing had sold no new planes.
Tuesday started slowly too until the aircraft maker announced that it had sold 20 of its 787-9 and 787-10 Dreamliner jets to Korean Air, marking its first plane sale since March.
A Boeing 787 Dreamliner in flight.Boeing Company | Paul Weatherman
Other orders came from China Airlines and Qatar Airways who bought six and five respectively of Boeing's 777 freighter model.
Blushes were spared when Boeing roared back with a huge 200 plane order by IAG for, crucially, the 737 Max. Observers speculated that the British Airways parent likely secured a huge discount to the list price of $24 billion, as well as noting that the deal was only a letter of intent rather than any firm order.
Added to that were deals with GECAS for ten 737-800 converted freighters and a commitment by Air lease Corporation to buy 5 wide body 787 Dreamliners.
It is hard to be certain of the true sales value of Boeing's Paris Air Show but after the IAG rescue act, the list price total looks, like Airbus, to have trickled past $35 billion.
Of the smaller manufacturers, Brazilian firm Embraer saved the best until last with a Wednesday evening deal to sell 15 of its E195 E2 jets to KLM. The Dutch airline, who will use the planes on its sister airline "Cityhopper," also has an option to buy 20 more.
Based on Embarer's catalog pricing, the firm has taken orders of 78 aircraft, worth around $4.6 billion, during the Paris Air Show this week.
An Embraer E195 jet airliner on display at the 2019 Paris Air Show opened at Le Bourget Airport.Marina Lystseva | TASS | Getty Images
Meanwhile, the Japanese planemaker Mitsubishi Aircraft Corporation announced it's in discussions with an unnamed U.S. airline over the sale of its SpaceJet M100 aircraft.
The aviation firm revealed at the Paris Air Show this week that the narrow-body regional plane should be ready for market in 2023.
Moving all the way down in size, Israeli start-up Eviation said it was shaking up the airline industry with the launch of its 9 passenger all-electric plane.
The battery-powered plane has yet to begin flight testing but already has a buyer. U.S. regional airline Cape Air is set to buy a "double-digit" number of the plane which has a list price of around $4 million each.
First deliveries of the Eviation are set for 2022.
Eviation chief executive Omer Bar-Yohay reveals future plans for his company's nine-seat electric plane at the 2019 Paris Air Show.Clermont Group
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f58d1c1219d4e675243dc292988f5e52 | https://www.cnbc.com/2019/06/20/netflix-is-going-to-get-ads-sooner-or-later-say-executives-from-hulu-and-nbc.html?__source=twitter%7Cmain | Netflix is going to get ads sooner or later, say media executives at Cannes Lions | Netflix is going to get ads sooner or later, say media executives at Cannes Lions
A scene from Netflix's "Stranger Things".Source: Netflix
For years, Netflix has consistently said no to advertisements. Its competition doesn't believe that position will hold.
Rising programming costs and the potential for billions in additional revenue could be too hard for Netflix to pass up, predicted NBCUniversal's ad chief Linda Yaccarino and Peter Naylor, Hulu's head of ad sales, at a Cannes Lions panel Wednesday moderated by The Trade Desk founder and CEO Jeff Green.
"When you have to make more programming that's not guaranteed to be a hit, you have to spend more money, you have to build your brand, you have to help the consumer discover your stuff — the price will go up for the subscription, and it would be logical to mitigate those increases to take ads," said Yaccarino, chairwoman of advertising sales and client partnerships at NBCUniversal, parent company of CNBC.
Just how an ad-supported Netflix might look is unknown. Theoretically, Netflix could borrow a page from the playbook of Hulu (and soon AT&T's WarnerMedia) and offer a version of its subscription-based service for a discount with ads. Or Netflix could copy the Spotify model and have a free version with ads as opposed to a subscription service that may come with additional benefits.
A Netflix spokesperson said this was "wishful thinking from an advertising conference." Incorporating ads isn't a topic the company is currently focused on, according to a person familiar with the matter.
It's also possible Netflix could incorporate ads in a way that doesn't mirror the traditional model of TV commercials. Netflix has already experimented with marketing partnerships, such as Coca-Cola's New Coke rerelease on its hit show "Stranger Things," and product placements in other shows. Future integration of advertising is likely to come in new ways that haven't been created yet, said Naylor.
"The future of ad-supported media does not resemble what we're doing today in terms of ad load or even ad shape," Naylor said. "It can be interactive advertising or nonintrusive advertising. I think you're going to see a lot of innovation from all of these new OTT providers because we're allowed to. We're not married to the clock. Fifteen and 30-second ads were a product of linear TV. When everything's on demand and served through an IP address, the ad experience is going to dramatically improve."
Roughly 70% of Hulu subscribers buy its cheaper $5.99 per month ad-supported product, said Naylor. For those who don't want any ads, Hulu also offers an $11.99 per month version.
Netflix has immense global reach with nearly 150 million subscribers — a number that could balloon to more than 300 million in 10 years, some analysts estimate.
That would give brands the ability to reach huge swaths of the population and give Netflix a new revenue stream and investor story if subscription growth peters out and content costs continue to increase. Netflix spent $12 billion on content in 2018 and risks losing shows, such as "The Office" and "Friends," that are only licensed for a set amount of time. NBCUniversal spent more than $28 billion developing and acquiring content last year, Yaccarino said, suggesting Netflix will have to continue to increase its spending to compete with other media companies.
The comments from Hulu and NBC echo other comments from executives at YouTube and J.P. Morgan in April, who also thought Netflix would ultimately warm to advertising.
Disclosure: Comcast's NBCUniversal is the parent company of CNBC.
VIDEO1:5401:54New Coke comeback in 'Stranger Things'News Videos
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