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f0ba092fb754ffdd353adb916a3b22ed | https://www.cnbc.com/2019/07/19/libra-hearings-may-give-bitcoin-much-needed-political-momentum.html | VIDEO7:5107:51Lawmakers scrutinize cryptocurrencies in day 2 of Libra hearingFast Money
Congress is going crypto.
Lawmakers from the U.S. Senate and House of Representatives heard testimony this week regarding Facebook's Libra project in the interest of finding a way to regulate the digital payment system and ascertain how it is different from cryptocurrencies like bitcoin.
In the hourslong confabs, Congress heard testimony from Calibra chief David Marcus, who is spearheading the Libra project, as well as experts on payment systems and cryptocurrencies.
Among the expert panelists was Meltem Demirors, chief strategy officer at CoinShares, a digital asset management firm. Speaking to CNBC's "Fast Money" right after her testimony, she said questions still persisted around Libra's fate.
"Today, what you saw in the House — led by Chairwoman [Maxine] Waters, who did an exceptional job — was lawmakers are trying to understand: what is Libra? Nobody really understands," Demirors said Wednesday. "Libra would like to be cryptocurrency. That is how Facebook is styling this. But the facts are that Libra holds assets including U.S. dollars and government securities, and is holding the public's funds."
This focus on Libra and the cryptocurrency market will start some long-awaited conversations on Capitol Hill about regulation that should benefit the entire crypto space, Demirors said.
"I'm cautiously optimistic," she said. "I think a lot of us are still waiting for clarity. But I'm hopeful that today's efforts helped push things forward and that it created some of the much-needed political momentum to get that going."
During the House hearing, Demirors stressed the differences between Libra and bitcoin, emphasizing the fact that, unlike bitcoin, Libra will live on a closed network, be backed by physical assets and require permissions for people to hold the currency.
That makes comparing the two difficult from both a commercial and a regulatory standpoint, she told Congress, adding that the regulations for Libra should be distinct from those moderating the bitcoin network.
"On both sides of the aisle, it was very clear that no one saw cryptocurrencies as being Libra," she said on "Fast Money."
"I think the big concern of everyone in this hearing today was really the fact that Facebook has such tremendous size and such a massive impact on the digital economy," she said. "We're talking about 2.7 billion users. That's a lot of influence and a lot of power, and so there are questions about systemic risk, there are questions about anti-competitiveness, there are questions about who this consortium is and how it's selected, and that's really what lawmakers are trying to untangle."
Besides finding a way to regulate Libra, the imminent challenge for Congress will be to create an environment in the United States that allows cryptocurrency companies to grow, innovate and compete with minimal hurdles, the strategist said.
"Everyone wants to facilitate more innovation, to enable the quote-unquote 'digital economy' to grow through things like cryptocurrencies. Nobody is arguing with that," she said. "I think what we are trying to determine is how do we make the United States a place where innovators continue to build businesses, and how do we create a regime, a regulatory regime, that reduces the burden on small start-ups and firms and allows them to compete with really large corporations who have great lobbyists, very expensive lawyers and large war chests?"
Bitcoin was down over 2% by 4:30 p.m. on Friday, prolonging a wild week for the digital currency that saw it swing by over 10% from day to day. Facebook shares fell by over 1%.
Disclaimer
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6cc104228156e6f3b3f825c8a0eb1575 | https://www.cnbc.com/2019/07/19/skyworks-and-apple-upgraded-together-but-expert-says-you-can-separate-the-two.html | VIDEO4:1604:16Skyworks & Apple upgraded at Raymond JamesHalftime Report
Skyworks, like the rest of the semiconductors, has had a volatile few months, rising and falling on news about U.S.-China trade tensions and Huawei's blacklisting. But its ties to something more stable — Apple, one of its customers — could send it higher, according to one Wall Street firm.
Raymond James thinks the two stocks will go up together: it upgraded both to outperform ratings on Thursday, predicting that Apple will successfully roll out a 5G iPhone in 2020. While the concept of 5G networks remains a buzzword for most people, Raymond James thinks it will prove appealing to customers, especially because of the better connectivity.
The call resonated with Steve Weiss of Short Hills Capital Partners, who has called Skyworks one of his "5G plays" for many months and who has seen the stock go up 12% after adding to his exisiting position on June 13. He reiterated that reasoning on Thursday's "Halftime Report": "I think 5G is the place to be. It's the one theme in technology you definitely go, like cloud was a few years ago. That's why I own [Skyworks]."
Weiss also agrees with Raymond James' argument that "most of what could go wrong for Skyworks has already happened." In particular, he pointed out, "They've already preannounced [earnings] based on their exposure to Huawei. So I think that's out of there. The management of the company would have to be pretty...stupid to really miss a quarter after they preannounced."
Despite his confidence in Skyworks' earnings, however, Weiss advises investors not to get into the stock right now. "One reason why I wouldn't buy it this quarter [is] because Apple sales, I believe, will be disappointing."
That's where Weiss diverges from the Raymond James analyst, who acknowledges that this year's iPhone cycle is likely to be the weakest in years but predicts that the two companies will go up together in the long term. Weiss, on the other hand, believes in the Skyworks story more than the Apple one. He owns both stocks, but also owns shorter-term puts in Apple.
Weiss' biggest position in the space is SMH, the semiconductors ETF, which he believes is less risky than individual names. The traders are split on this one, though — while Weiss is happy holding, Joe Terranova of Virtus Investment Partners just sold the ETF.
SMH has gone up 17% since Terranova bought it last month. Why is he selling now? "I wanted the diversification of an ETF [when I bought it]… Now I want that capital because we've got technology companies individually reporting… I want the capital to allocate towards good fundamental earnings stories in individual stocks that I'm going to hear about over the next couple weeks." He is keeping an eye out on the FAANGs in particular, none of which he currently owns.
Three of the FAANG stocks are reporting next week: Facebook on Wednesday, and Alphabet and Amazon next Thursday. Apple will report earnings on July 30.
Disclosure: Stephen Weiss owns shares of Apple, Skyworks Solutions Inc and Vaneck Vectors/Semiconductor ETF. He also owns puts in Apple.
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fcd32c8d17131e38b1bd0c8be96c91a3 | https://www.cnbc.com/2019/07/19/tesla-skeptic-barclays-raised-estimate-for-second-quarter-earnings.html | A big Tesla skeptic on Wall Street raises his estimate for second-quarter earnings | A big Tesla skeptic on Wall Street raises his estimate for second-quarter earnings
VIDEO7:1607:16Two experts break down Tesla's recent troublesSquawk Box
Tesla got a boost Friday from one of its biggest Wall Street skeptics, who now sees Elon Musk's electric car company headed to a nearly profitable second-quarter earnings report.
Barclays, which has an underweight rating and a $150 price target on Tesla shares, raised its forecast for the company's second-quarter report to a loss of 16 cents a share — a jump from the firm's previous estimate of a loss of 71 cents a share. Tesla reports its quarterly earnings Wednesday.
"Increasing 2Q estimates as TSLA did indeed 'move the metal,'" Barclays analyst Brian Johnson said in a note to investors.
Tesla shares rose 0.6% in Friday's premarket from its previous close of $253.54.
Its stock surged in early July after Tesla reported a record second-quarter deliveries number. At the time, Johnson called the number "impressive" but said Tesla would have to show that it's improving profitability, urging investors to focus on the second-quarter earnings report. But the stock has climbed nearly 13% since the the deliveries update, a fact that Johnson highlighted in his note.
"While we were not overly surprised by the swing trade going into the delivery report, and the reaction thereafter, we are somewhat surprised by the continued strength" of Tesla shares, Johnson said.
Additionally, while Barclays reiterated that it is "fundamentally bearish" on Tesla, the analyst said Tesla has "likely raised enough cash to make it through 2020, even with below guided deliveries." That marks a noted shift in Johnson's view from earlier this month, when he said Tesla may need to raise more capital "as soon as next year" if it is going to "maintain an accelerating growth narrative."
– CNBC's Michael Bloom contributed to this report.
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9af778baae29b317fe564842c804491e | https://www.cnbc.com/2019/07/20/amazons-updated-suspension-policy-still-has-sellers-worried.html | Amazon's updated suspension policy still has sellers worried about getting inexplicably booted | Amazon's updated suspension policy still has sellers worried about getting inexplicably booted
Amazon made sweeping changes to its terms of service for third-party sellers this week in an effort to address an issue that's plagued the biggest piece of its e-commerce business.
As part of a settlement it reached with German antitrust authorities over its marketplace policies, Amazon said it will now give a 30-day notice to sellers facing suspensions and provide specific reasons to those who are blocked for "alleged legal infringements." Until now, Amazon could terminate seller accounts at any time "without justification," according to the agreement announced by The Federal Cartel Office of Germany.
But sellers and marketplace experts who have become all too familiar with Amazon's increasingly cavalier approach to suspensions are worried that the changes, set to go into effect globally on Aug. 16, don't go far enough to protect merchants from having their business suddenly disrupted, or even decimated, without recourse.
"It's a good step forward, but the update fails to address some of the root cause issues around the suspension problems," said Peter Kearns, a former Amazon Marketplace manager who now works for 180Commerce, providing consulting and strategy services to third-party sellers.
The marketplace has been a blessing and a curse for Amazon since the company flung open its doors to many more outside sellers around the world, particularly from China. Third-party merchants now account for 58% of items sold on Amazon, up from 31% a decade ago, and produce higher margins than Amazon's retail model, because sellers pay for all sorts of services, like storage, shipping and advertising, and keep Amazon from having to spend so much on inventory.
"Third-party sellers are kicking our first party butt," Amazon CEO Jeff Bezos wrote in his annual shareholder letter this year.
But with millions of new sellers sourcing products from tons of unvetted manufacturers, counterfeits have flooded the marketplace, leading to a swarm of infringement claims. As Amazon has cracked down on the counterfeit problem by aggressively suspending abusers, many honest sellers have gotten kicked off as well, and Amazon has been unable to manage the deluge of complaints.
Germany's antitrust office wrote in the agreement that it looked into the suspension problem mainly because "numerous sellers complained about the unsubstantiated and surprising cancellations and resulting loss of turnover." U.S. regulators haven't taken specific action, but presidential candidates, including Sen. Elizabeth Warren (D-MA) and Sen. Bernie Sanders (I-VT), have publicly criticized the company for having too much market power, and European Union officials recently launched an antitrust investigation into Amazon's business practice regarding third-party sellers.
Seller anecdotes of wrongful terminations are not hard to find. For example, CNBC previously reported that one seller got suspended after a fake law firm filed a false complaint, while another seller was attacked and wrongfully suspended by a competitor calling himself the "virus of Amazon." Last year, a small business called Cheapskates Liquidators was suspended because of incorrect claims that it sold inauthentic items and, in trying to get reinstated, the company entered a dark hole of unresponsiveness.
In the updated agreement shared with third-party sellers on Wednesday and viewed by CNBC, Amazon included a red-lined version that compares the old and new language. Here's the most relevant part to suspensions:
Old version: "We may terminate or suspend this Agreement or any Service for any reason at any time by notice to you."New version: "We may terminate your use of any Services or terminate this Agreement for convenience with 30 days' advance notice. We may suspend or terminate your use of any Services immediately if we determine that (a) you have materially breached the Agreement and failed to cure within 7 days of a cure notice unless your breach exposes us to liability toward a third party, in which case we are entitled to reduce, or waive, the aforementioned cure period at our reasonable discretion; (b) your account has been, or our controls identify that it may be used for deceptive or fraudulent, or illegal activity; or (c) your use of the Services has harmed, or our controls identify that it might harm, other sellers, customers, or Amazon's legitimate interests. We will promptly notify you of any such termination or suspension via email or similar means including Seller Central, indicating the reason and any options to appeal, except where we have reason to believe that providing this information will hinder the investigation or prevention of deceptive, fraudulent, or illegal activity, or will enable you to circumvent our safeguards."
Chris McCabe, a former Amazon employee who now helps sellers get reinstated and stay compliant, said he's encouraged by the update but still needs to see how it's implemented. The 30-day notice will give sellers more opportunity to respond to unfair suspensions and make their case, but the rest of the language is vague and gives Amazon plenty of leeway, he said.
"They need better training and to be more specific in terms of reason and causality around the suspensions," McCabe said.
VIDEO20:0520:05Watch CNBC's full interview with Amazon worldwide consumer chief Jeff WilkeSquawk Alley
Much of McCabe's time is spent helping sellers file their appeals for reinstatement and finding the right person inside Amazon to actually see the documentation because so many of the processes are automated and the system is overwhelmed. Slow response times and the lack of awareness that employees have about specific violations result in small businesses losing revenue at critical times of the year, like the holiday season or Prime Day. Furthermore, Amazon's suspension notices often don't provide specific remedies, making it difficult for sellers to understand the corrective actions they need to take.
In an emailed statement, an Amazon spokesperson said the updates are intended to "clarify selling partner rights and responsibilities."
"These changes allow Amazon to continue to protect our customers and selling partners from abuse, while making explicit our practice of providing notice and offering a path to appeal our decisions for sellers who believe we've incorrectly taken action against their accounts," the company said.
In online seller forums, merchants have voiced their complaints about issues like a lack of clarity in emails from Amazon representatives and low levels of engagement. One seller, who was suspended for violating a little known pricing policy, wrote about the frustrating nature of the appeals process. Email correspondence between Amazon and another suspended seller shows how challenging it is to dispute certain allegations.
Then there's Amazon's reliance on imperfect technology. Amazon's automated system, driven by machine learning algorithms, often flags non-violations, creating "false positives," especially when there are dirty tricks involved like a competitor trying to take down a higher-ranked seller, according to Jerry Kavesh, an Amazon seller and consultant. The changes don't mention those issues or how to address them, he said.
"Currently, appealing false positives go into a black hole, and even if they're resolved, they stay on your account as a black mark," Kavesh said. "Too many sellers can get their account suspended even though they've done nothing wrong."
Kearns of 180Commerce said the updated language still gives room for unexpected account terminations. Even with the 30-day notice requirement, Amazon said in the new agreement that it could suspend accounts "immediately" under certain conditions, like if a seller engages in illegal activity or harmful conduct. While there are logical reasons for Amazon to maintain that right, it can leave sellers who were attacked by rivals in a helpless position.
"It still has that level of ambiguity that Amazon can just say, 'We think you're doing something wrong and we're going to shut you down,'" Kearns said. "In this case, you're guilty until you can prove you're innocent."
WATCH: How Amazon made record profits in 2018
VIDEO5:2405:24How Amazon makes moneyTech
Follow @CNBCtech on Twitter for the latest tech industry news.
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969844a3874c15b47d9df78a03de7aa2 | https://www.cnbc.com/2019/07/20/iran-denies-that-a-second-british-ship-was-seized.html | Iran denies that a second British ship was seized | Iran denies that a second British ship was seized
The oil tanker Stena Impero, seized by Iran’s Revolutionary Guards, is anchored at Bandar Abbas harbor in Bandar Abbas, Iran, on July 20, 2019. The Stena Impero was surrounded and seized by four vessels including a helicopter of the Iranian Revolutionary Guard on Friday in a key waterway in the Gulf before heading into Iranian waters.Contributor | Getty Images
Britain said Iran seized two oil tankers in the Gulf on Friday and told Tehran to return the vessels or face consequences in the latest confrontation to ratchet up tension along a vital international oil shipping route.
Iran's Revolutionary Guards said they had captured the British-flagged Stena Impero, announcing the move two weeks after the British navy seized an Iranian tanker in Gibraltar.
Iran's semi-official Tasnim news agency said the second vessel, the British-operated Mesdar, had not been seized. It said the ship had been allowed to continue its course after being given a warning over safety and environmental issues.
The Stena Impero and Mesdar changed direction sharply within 40 minutes of each other shortly after entering the Gulf through the Strait of Hormuz, taking up a course toward Iran, Refinitiv tracking data showed.
The data later showed Mesdar changing direction again, heading westward back into the Gulf.
"These seizures are unacceptable. It is essential that freedom of navigation is maintained and that all ships can move safely and freely in the region," British foreign minister Jeremy Hunt said.
Hunt later said, in comments reported by Sky News, that there would be consequences if Iran did not return control of the ships but said Britain was not considering military options.
U.S. President Donald Trump said he would talk to Britain about the issue, speaking after a war of words earlier on Friday about whether the United States had shot down an Iranian drone in the Strait of Hormuz.
Already strained relations between Iran and the West have become increasingly fraught since the British navy seized Iran's Grace 1 tanker in Gibraltar on July 4 on suspicion of smuggling oil to Syria in breach of European Union sanctions.
Oil prices gained on Friday after the latest spike in tensions along the Strait of Hormuz, through which a fifth of the world's oil supplies pass.
Iran's Guards, an elite force under the command of Supreme Leader Ayatollah Ali Khamenei, said they seized the Stena Impero at the request of Iranian authorities for "not following international maritime regulations," state television reported.
Northern Marine Management, which is owned by Stena AB, confirmed the Stena Impero was heading toward Iran.
Norbulk, the manager of the tanker Mesdar, said the vessel had been boarded by armed personnel but was later allowed to continue its voyage. It said the crew were safe and well.
Iran had said it would retaliate against the seizure in Gibraltar. Just days later, three Iranian vessels tried to block a British-owned tanker passing through the Strait of Hormuz but they backed off when confronted by a British navy ship.
Refinitiv data showed the Stena Impero vessel is owned by Stena Bulk and indicated its destination had been the Saudi port of Jubail on the Gulf. The tracking map showed it veering off course about 1517 GMT and heading toward Iran.
The Mesdar made its shift toward Iran at about 1600 GMT.
"We received reports that the British Stena Impero oil tanker was causing incidents and, therefore, we asked the military to direct it to Bandar Abbas port for the necessary probes," Allahmorad Afifipour, head of Hormozgan's maritime authority, told Tasnim news agency.
Tasnim, which cited military sources as saying the Mesdar had not been seized, said the Stena Impero had been causing pollution by dumping oil residue.
An Iranian military source said the Stena Impero "had turned off its tracker and ignored several warnings by the Guards before being captured," the official IRNA news agency reported.
State television said the Stena Impero was taken to a coastal area and turned over to the authorities to take the necessary legal steps, the television added.
Supreme Leader Khamenei said on Tuesday Iran would respond to Britain's "piracy" over the seizure of the Iran's Grace 1 tanker in Gibraltar.
Tehran has repeatedly called for the ship's release, denies the allegation that the tanker was taking oil to Syria in violation of sanctions and says Gibraltar and Britain seized the vessel on the orders of Washington.
Tensions between the United States and Iran have been steadily rising since Washington withdrew last year from a global pact aimed at reining in Tehran's nuclear program and imposed sanctions that seek to shutdown Iranian oil exports.
Iran has said it would not halt its oil exports, the government's main source of revenue.
Behnam Ben Taleblu, an analyst at the Foundation for Defense of Democracies, said Tehran's action suggested U.S. sanctions "are working and that negotiations with America or world powers will need to happen."
Guy Platten, secretary general of the International Chamber of Shipping, called on all those involved in Friday's shipping incident to seek a swift resolution to the incident that threatened the safety of seafarers.
"Freedom of navigation is vital for global trade and we encourage all nations to uphold this fundamental principle of maritime law," he said.
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6ea3a2aadacb11a4ed7370d717863d3b | https://www.cnbc.com/2019/07/20/the-best-way-to-save-for-retirement-may-include-this-underused-plan.html?fbclid=IwAR3nndK8_0LVk5PsMnUFHXvfi_89g8GS4X_6Mcx2vodoTfUi03y5pD-Mx8A | The best way to save for retirement may include this underused plan | The best way to save for retirement may include this underused plan
VIDEO3:1103:11New retirement choice: Roth 401(k) vs. 401(k)On the Money
Most people understand the virtues of a 401(k) when it comes to saving for retirement. Still, few know that there's another employer-sponsored plan that could work just as well, if not better.
Like a traditional 401(k), a Roth 401(k) lets you contribute up to $19,000 a year through automatic payroll deductions and may come with the big bonus of an employer match if your company offers it.
One of the key differences is that contributions to a Roth 401(k) are taxed upfront so withdrawals in retirement are tax-free (as long as you're age 59½ or older and you've held that account for at least five years).
For workers who are going to be in a higher, or the same, tax bracket down the road — such as millennials, in particular — that's a big advantage over a traditional 401(k), where there are no taxes on contributions until money is withdrawn. At that point, money taken out in retirement is taxed at your ordinary income rate.
In this way, Roth 401(k) plans are similar to better-known Roth IRAs, except there's no income limit on who can participate in a Roth 401(k) — and the maximum annual contribution for workers under age 50 is more than three times higher.
In addition to the $19,000 a year you can save in a Roth 401(k), there's also a catch-up contribution of $6,000 if you are over age 50. With a Roth IRA, you can contribute $6,000, with an additional $1,000 if you're 50 or older.
On the flip side, the IRS requires you to start taking withdrawals out of your Roth 401(k) at age 70½. A Roth IRA does not have this requirement.
Currently, only about 11% of employees contribute to a Roth 401(k), up just 3% in the past five years, even though roughly 7 out of 10 companies now offer a Roth option, according to Fidelity Investments, the largest provider of 401(k) plans.
"Making sure you're contributing to employer-sponsored plans is important, whether Roth or not," said Meghan Murphy, a vice president at Fidelity. (Financial advisors typically recommend contributing at least enough to snag the full employer match.)
Of course, it doesn't have to be one or the other. Many advisors recommend taking advantage of both types of retirement savings plans, if possible.
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That way, you can put together a tax-efficient strategy for your golden years: i.e., tap the accounts that allow tax-free withdrawals first — such as Roth accounts and brokerage accounts, which are only taxable when you sell appreciated assets to distribute cash.
"It is helpful to have several different buckets to pull from," said Kristen Moosmiller, a certified financial planner at NorthAvenue Financial Advocates in Columbus, Ohio.
"With a Roth, you're not only building up an after-tax bucket, you're building up tax-free growth over time," she added.
Without such a strategy, the tax bill can be a rude surprise in retirement. Almost half of recent retirees wish they had planned better for handling taxes in retirement, according to a survey from the Nationwide Retirement Institute. One in 4 report having paid thousands of dollars more in taxes in retirement than they had expected.
To lessen the blow, work with an advisor to determine the best way to grow your nest egg and then how much to draw from which sources when the time comes to retire, maximizing income and minimizing your tax bill.
CHECK OUT: How going 'cash only' helped this 23-year-old pay off $20,000 in debt in one year via Grow with Acorns+CNBC.
Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.
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169a41bdf55baa5f64ea3548921bf5c2 | https://www.cnbc.com/2019/07/22/boeing-slides-after-fitch-turns-negative-on-maker-of-grounded-737-max.html | Boeing slides after ratings agencies turn negative on maker of grounded 737 Max | Boeing slides after ratings agencies turn negative on maker of grounded 737 Max
Grounded Boeing 737 MAX aircraft are seen parked in an aerial photo at Boeing Field in Seattle, WashingtonLindsey Wasson | Reuters
Boeing shares slid Monday after ratings agencies issued a negative outlooks for the maker of the 737 Max, as the fallout from two fatal crashes of the planes continue to pile up on the manufacturer.
Fitch Ratings and Moody's Investors Service upheld Boeing's credit ratings but warned that the worldwide grounding is going on longer than anticipated, driving up Boeing's costs and hurting cash flow, putting its credit ratings at risk.
The planes, Boeing's bestselling jetliner ever, have been grounded worldwide since mid-March after the second of two crashes. Together the air disasters claimed 346 lives.
Regulators haven't said when they plan to allow the planes to fly again and are yet to approve a software fix Boeing has prepared after an anti-stall system was implicated in the crashes, one in Indonesia in October and another in Ethiopia in March.
Boeing last week told investors it would take a $4.9 billion charge in the second quarter to compensate airlines affected by the worldwide grounding, now in its fifth month. Boeing's 737 Max customers, including Southwest, United and American, have canceled thousands of flights during the peak summer travel season and have taken the plane off their schedules until November with no clarity on when the planes will be permitted to fly again.
Moody's warned that it could cut Boeing's credit ratings if "it becomes apparent that the grounding will extend into 2020 and Boeing does not reduce the production rate to conserve working capital."
Boeing paused deliveries of the Max and cut production by nearly 20% to 42 a month in the wake of the second crash. Airplane makers generally are paid once the aircraft are delivered to airlines. New orders for the planes have ground to a halt.
Fitch said it cut its outlook from "stable" to "negative" because Boeing could end up paying airlines more as the grounding wears on, and regulatory uncertainty is posing "the growing logistical challenge of returning parked planes to service and delivering stored post-production aircraft."
"Fitch believes the 737 MAX will remain a concern throughout the aviation credit sector into 2020," the ratings agency said in a release. "The 737 MAX situation will reduce much of the financial cushion Boeing has at the current 'A' rating, leaving the company more exposed to other unforeseen events or industry developments."
It said Boeing's debt could rise by $10 billion to more than $24 billion by the end of the year because of the Max grounding. It added that this amount would fall when deliveries of the planes resume.
Boeing's stock lost 1% to close at $373.42 a share.
Boeing is scheduled to report second-quarter earnings Wednesday morning.
VIDEO1:5701:57Boeing to give $50 million to families of crash victimsSquawk on the Street
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ffc6d113941d626a333f53df3ad3e05c | https://www.cnbc.com/2019/07/22/cramer-the-china-trade-deal-is-one-tweet-away-from-blowing-up.html?__source=twitter | Cramer: Trump is 'hungry for tariffs' and trade talks are one tweet away from 'blowing up' | Cramer: Trump is 'hungry for tariffs' and trade talks are one tweet away from 'blowing up'
VIDEO1:1801:18Cramer: President Trump is hungry for tariffsSquawk on the Street
CNBC's Jim Cramer said Monday that the Trump administration is close to placing additional tariffs on Chinese goods as the yearlong trade war drags on.
The Chinese are 'one tweet away from blowing it up," Cramer said on "Squawk on the Street." Beijing has yet to purchase American goods as agreed upon, he added.
Last week, President Donald Trump tweeted that China "is letting us down" by not buying the goods "that they said they would." The increased purchases would not only help cut the U.S. trade deficit with China but assist farmers, as Trump seeks reelection in 2020.
"We're about to get tariffs any day now," Cramer added. "I don't think people realize the president is hungry for tariffs."
Trump in May slapped 25% tariffs on $200 billion worth of Chinese goods and has threatened duties on an additional $325 billion of goods as trade negotiations continue. The additional tariffs would effectively cover all Chinese imports in the United States.
But Washington agreed to hold off on raising levies as long as China would buy more U.S. agricultural products, after the leaders of the world's two largest economies met last month.
And it's a move that Cramer doesn't think Trump will hold onto much longer.
"They (Chinese leaders) better stop playing politics and better start ordering, because most of the industrial companies that I talk to are ready for the next big increase, maybe within the next two weeks," the "Mad Money" host said. "We're about to get tariffs of $300 billion any day now."
A White House spokesman was not immediately available for comment.
The tariffs have been costly for Beijing, with China reporting last week that it grew just 6.2% in its second quarter. It's the weakest rate reported in at least 27 years, according to the country's statistics bureau.
"They better stop playing politics and start ordering," Cramer said.
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608f8d1fe7e96e7e51bfbbf67bdd90e7 | https://www.cnbc.com/2019/07/22/stocks-making-the-biggest-moves-midday-apple-boeing-micron-more.html | Stocks making the biggest moves midday: Apple, Boeing, Lennox, Micron & more | Stocks making the biggest moves midday: Apple, Boeing, Lennox, Micron & more
A trader on the floor of the New York Stock Exchange.Getty Images
Check out the companies making headlines midday:
Halliburton — Oilfield services company Halliburton's stock rose 9.2% after the company announced its quarterly earnings before the opening bell. The company posted adjusted quarterly profits of 35 cents a share, beating estimates by 5 cents a share as the company continued to grow internationally and cut costs in North America.
Apple — Apple shares rose 2.3% after Morgan Stanley raised its price target on the stock to $247 from $231, citing "a positive setup into earnings" and "multiple catalysts beyond earnings that make [it] a top pick into year end." The tech giant will announce its quarterly earnings next week.
Stitch Fix — The online personal styling company's stock jumped 1% after analysts at Stifel upgraded the stock to buy from hold. Analysts cited client growth, stronger personalization, and new features like the offering of individual items in their upgraded outlook for the $2.7 billion company.
Boeing — The aircraft manufacturer's stock slid 1% after Fitch Ratings published a negative outlook for the the 737 Max maker. Fitch warned that the company's debt could increase by $10 billion to more than $24 billion by the end of the year, due to the grounding of the 737 Max, which was involved in two fatal crashes.
DaVita — DaVita rose 4.9% after the dialysis services company issued second-quarter guidance that beat analysts' expectations, driven by "improved expectation of profit from calcimimetics" drug. The company said it expects operating income for the second quarter of 2019 to be between $460 million and $465 million, above estimates around $400 million provided by FactSet.
Lennox — Lennox fell 5.3% after the air-conditioner maker cut its guidance and missed Wall Street's earnings estimates for the second quarter, citing colder temperatures. The company saw earnings per share of $3.74, below the estimated $4.12, according to FactSet. Lennox also adjusted earnings per share from continuing operations to $11.30 to $11.90 in 2019, lower than expected.
Micron Technology, Applied Materials and Lam Research — Each chip stock climbed more than 3.5% on Monday after Goldman Sachs upgraded all three semiconductor companies to buy from neutral ratings. Applied Materials, which was added to the "Conviction Buy" list, led the way with a 4.89% gain. Goldman analysts were more bullish on the memory chip industry as a whole, saying, "We believe that the excess inventory memory companies are carrying will be depleted faster than our previous expectations."
— CNBC's Mallika Mitra, Jesse Pound, Elizabeth Myong and Marc Rod contributed to this report.
Correction: A previous version of this story misstated Micron's name.
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38900660966bca13747dfba526d97e54 | https://www.cnbc.com/2019/07/23/analyst-calls-of-the-day-snap-facebook-bloomin-brands-more.html | Here are the biggest analyst calls of the day: Snap, Facebook, Bloomin' Brands & more | Here are the biggest analyst calls of the day: Snap, Facebook, Bloomin' Brands & more
Evan Spiegel, CEO and co-founder of Snap Inc.Adam Galica | CNBC
Here are the biggest calls on Wall Street on Tuesday:
Stifel upgraded Snap and said it was "optimistic on the company's growth prospects going forward.
"Based on improving DAU / pricing trends, we are upgrading SNAP shares to Buy and raising our Target Price to $17. Although 2Q:19 could see noise related to a significant sales force reorg., we are increasingly optimistic about Snap's growth prospects in 2H:19 and beyond. We do not currently forecast a reacceleration in revenue growth but see a higher likelihood of one occurring in the next several quarters as the company continues to expands its advertiser base, foster engagement with premium monetizable content (Discover, Games), and improve engagement / retention on Android devices (particularly in emerging markets)."
Read more about this call here.
Rosenblatt said it thinks average revenue per user levels could double by 2023.
"We initiate SNAP with a Buy rating and $18 DCF-based price target, reflecting ~28% upside from its 7/19 closing price. Present ARPU levels are well below social media peers, providing room to comfortably double by CY23E. Near-term, SNAP shares should ride modest ARPU tailwinds from new ad products and video content, and carry into CY20E with Audience Network, scaling ad spend beyond the company's tapped out US user demo."
UBS said the online luxury retailer has a marketplace model that's "unique."
"In examining its long-term opportunity, we see a few key themes that should appeal to investors: a) early innings of online penetration for consignment (REAL's 2018 GMV is <1% of a ~$198bn TAM); b) REAL is exposed to key industry secular trends (increasing acceptance of resale; growing millennial & Gen Z luxury consumers; offline to online shift; increasing focus on sustainability); and c) REAL's marketplace model is unique in that the same consumer is increasingly playing a role on both sides, driving a flywheel effect of consumer demand & product supply."
Bank of America upgraded the retailer mainly on valuation.
"The valuation is in-line with peers incl. NKE, ADS GR & VFC but at the high end (15-25X) of COLM's historical range given: 1) an outlook for significant near-term revenue and EPS upside led by a strong U.S. wholesale environment for Columbia apparel; (2) significant under-penetration in footwear, with strong visibility for COLM's long-term growth outlook (incl. additional distribution at Foot Locker); and (3) healthy and stable margin outlook driven by Project Connect."
BMO lowered its price target on Facebook ahead of earnings and said revenue re-acceleration may be "prolonged."
"We now expect revenue to decelerate through 1Q20 (vs. 4Q19 previously), before accelerating again in 2Q20 as Stories demand/pricing ramps. However, if targeting capabilities are materially hindered, revenue re-acceleration may be prolonged."
Loop said it views the restaurant hospitality company with a "compelling" risk/reward.
"Top-Line Drivers + Compelling Risk/Reward... We are initiating coverage of Bloomin' Brands with a Buy rating as we see a disconnect in valuation vs. the company's fundamentals and therefore view the risk/reward as compelling."
Goldman said amongst other things that the petroleum and natural gas company could see further "upside" from exploration.
"We upgrade MUR to Buy from Neutral and incorporate its recently closed Gulf of Mexico asset acquisition (from LLOG) and Malaysian asset divestiture (to PTTEP). We see potential for greater appreciation of offshore assets from above-expected FCF/production in 2020 and rising confidence in growth in 2022."
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864c973a7bbf6426e73e45cdf7a7b0f8 | https://www.cnbc.com/2019/07/23/apples-pursuit-of-intels-modem-unit-is-about-doubling-down-on-5g.html | Apple's pursuit of Intel's modem unit is all about 'doubling down' on 5G | Apple's pursuit of Intel's modem unit is all about 'doubling down' on 5G
Apple CEO Tim Cook speaks during Apple's annual Worldwide Developers Conference in San Jose, California, June 3, 2019.Mason Trinca | Reuters
Apple CEO Tim Cook frequently says his company tries to own every primary piece of technology in its products, instead of relying on outside parties. That helps explain the news that Apple appears close to buying Intel's smartphone modem division, including patents and staff, for $1 billion or more.
The iPhone maker already has a supplier for modem chips: Qualcomm. Earlier this year, as part of a settlement over patent licensing, Apple agreed to buy Qualcomm chipsets for multiple years — long enough so that it will likely use Qualcomm's superior 5G modem chip in future phones.
But 5G is a long game and will be strategic for Apple as the high-speed network gets built out and consumers start expecting faster performance and more capabilities. With ownership of chip development, Apple can control its own destiny.
"Apple does realize it's not another chip — it's strategic intellectual property in a connected device," said Prakash Sangam, founder of Tantra Analyst, a research and advisory firm. "This is one of the key strategic pieces of IP they don't have, and it makes sense to own it."
The deal to purchase Intel's modem assets is not final yet, but it could become official soon, according to a report on Monday from the Wall Street Journal. Apple and Intel each declined to comment. In April, Intel announced that it was exiting the 5G market because, as CEO Bob Swan said, the division had "no clear path to profitability and positive returns."
Currently, Apple is Intel's only modem customer, according to analysis from Chris Caso of Raymond James. Qualcomm chips are on the way. Patrick Moorhead of Moor Insights and Strategy said that even if Apple buys Intel's assets "it takes best case five years to get competitive."
While Apple is emphasizing the importance of software and services in its future business and stopped disclosing device units sold this year, the iPhone still drives the company, accounting for almost 54% of revenue in the quarter that ended in March. Sales of iPhones peaked in 2015 at 231 million devices sold, falling to 217 million in fiscal 2018.
"Apple's near-term iPhone problem is mix – Apple is selling a much larger mix of legacy iPhones than in the past," Caso wrote in a note last week, pointing out that there is "virtually nothing" that Apple's current iPhone XS can do that an iPhone from 2015 can't do. "We think the higher bandwidth and improved connectivity of 5G will provide a more compelling upgrade."
In a note on Tuesday, Caso wrote that "once 5G arrives in earnest, we think it will be difficult to sell any computing device (a PC, tablet, or anything else) that doesn't include a 5G modem."
In addition to lowering costs and taking greater control over the guts of its key product, there's another potential benefit to acquiring Intel's modem business. Apple has its own A-series chips, which power everything but the communication piece that's handled by the modem. By combining them, Apple could have a more complete system on a chip (SOC), said Tantra's Sangam.
"In terms of area, performance, and battery management it would be much better," Sangam said.
There are also limited options in the 5G modem market. With Intel, Apple could potentially avoid buying chips from companies like MediaTek or Samsung, which have performance specifications and present competitive concerns.
"For Cupertino this would be a clear 'doubling down' on 5G which remains at the centerpiece of the company's smartphone future with these chip assets giving Apple further control over its supply chain and core chip design," Wedbush analyst Dan Ives wrote in a note on Monday.
Qualcomm shares dropped 2.5% on Tuesday following reports of the Apple-Intel talks. But Sangam, who previously worked for Qualcomm, doesn't see an immediate impact on the company's business, because chip development often takes at least five or six years.
"In the short term, I do not see a huge difference unless Apple proves it can do a good modem," Sangam said.
WATCH: Apple reportedly in advanced talks to buy Intel's modem business
VIDEO1:4001:40Apple reportedly in advanced talks to buy Intel's modem businessSquawk Alley
Follow @CNBCtech on Twitter for the latest tech industry news.
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b0057c161003a7cc501d49b24c058fd6 | https://www.cnbc.com/2019/07/23/boris-johnson-to-become-uk-prime-minister.html | Brexit leader Boris Johnson wins race for UK prime minister | Brexit leader Boris Johnson wins race for UK prime minister
VIDEO2:0402:04Boris Johnson just won the race for United Kingdom's prime ministerNews Videos
Boris Johnson, one of the biggest voices in the Brexit movement, won the Conservative Party leadership race on Tuesday and will become the U.K.'s next prime minister.
Johnson, 55, was elected as his party leader, and consequently the U.K. leader, with 92,153 votes from members of the ruling Conservative Party. Foreign Minister Jeremy Hunt received 46,656 votes. Johnson will take up office on Wednesday.
President Donald Trump, who has publicly backed Johnson on several occasions during the leadership race, congratulated him via Twitter saying: "He will be great!"
tweet
The new prime minister, who has previously been foreign minister and mayor of London, will likely usher in a new team of ministers. Some incumbents have already announced their impending departure, including Finance Minister Philip Hammond, largely because of their different stances over Brexit. In addition to Brexit, Johnson faces an immediate crisis with with Iran, which seized a British oil tanker on Friday.
Speaking in front of party members after the announcement on Tuesday, Johnson said he would unite Britain.
"Like some slumbering giant we are going to rise and ping off the guy-ropes of self-doubt and negativity with better education, better infrastructure, more police, fantastic full-fiber broadband sprouting in every household. We are going to unite this amazing country and we are going to take it forward," he told the audience.
"I know that there will be people around the place who will question the wisdom of your decision and there may be some people here who still wonder what they have done, and I will just point out to you that no one party, no party has a monopoly of wisdom."
VIDEO2:3602:36Get ready for a 'much more Brexity' cabinet, analyst saysStreet Signs Europe
The leadership contest took place after Theresa May announced she would resign as prime minister following repeated rejections of the Brexit deal she struck with the EU last year.
How Johnson will proceed with Brexit now will be an immediate focus, given an impending deadline to leave the bloc of Oct. 31, and still no deal agreed upon by the U.K. parliament.
Johnson is infamous for his off-the-cuff remarks and somewhat eccentric character, and he has long been an influential and outspoken member of the Conservative Party. His decision to support the "Leave" vote ahead of the U.K.'s referendum on EU membership in June 2016 was seen as having a decisive effect on the result.
Since then, Johnson has made more controversial remarks over Brexit; most recently insisting that the U.K. must leave the EU on Oct. 31 "do or die, come what may" despite widespread concern over what a "no-deal" departure could mean for U.K. businesses and the economy.
Leaving without a deal with the EU would mean there is no transition period for the country to get used to life outside the EU's trading bloc. Trade and transport links between the EU and U.K. could therefore be severely affected.
Johnson also got into hot water in recent weeks for his apparent reluctance to support the U.K.'s ambassador to the U.S. following a leak of secret memos criticizing the Trump administration.
Following the announcement of Johnson's victory on Tuesday, U.K. opposition leader Jeremy Corbyn tweeted that Johnson had only won the support of fewer than 100,000 Conservative Party members by "promising tax cuts for the richest, presenting himself as the bankers' friend, and pushing for a damaging no-deal Brexit."
Tweet 1
VIDEO3:5603:56Miller: UK is not uninvestableWorldwide Exchange
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d9ce274fed598d0dcbdbe269975c295c | https://www.cnbc.com/2019/07/23/continental-cuts-2019-outlook.html | Continental cuts 2019 outlook citing expected fall in vehicle production | Continental cuts 2019 outlook citing expected fall in vehicle production
At the construction site of the new headquarters of the automotive supplier and tire manufacturer Continentalpicture alliance | picture alliance | Getty Images
German auto supplier Continental on Monday cut its 2019 outlook, citing expectations for a fall in global vehicle production and unexpected changes in consumer demand for some products.
The company also said that it may have to make provisions for warranty claims in the second half of the year, the amounts for which were not yet clear.
Sales for the year are now expected to be around 44 billion to 45 billion euros ($50.44 billion), down from a previous estimate of 45 billion to 47 billion euros, it said.
Continental said it based its previous assumptions on flat global vehicle production in 2019 but now sees a decline of around 5%.
Second quarter results would meet analyst forecasts, the company said. According to preliminary figures, consolidated sales in the quarter were around 11.2 billion euros, it said.
It plans to release full earnings on Aug. 7.
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db8000eda5aaac001807ee3dfc1cd35e | https://www.cnbc.com/2019/07/23/daimler-bosch-get-green-light-for-automated-valet-parking-system.html | Daimler and Bosch get green light for 'world's first' automated valet parking system | Daimler and Bosch get green light for 'world's first' automated valet parking system
Copyright, Daimler
Daimler and Bosch have been granted approval to roll out an automated parking system in Stuttgart, Germany.
In an announcement Tuesday, German auto giant Daimler said that the automated valet service would be introduced at the parking garage of the Mercedes-Benz Museum. It will be accessed using a smartphone app and will not need a safety driver. Daimler said that the system was the "world's first fully automated driverless SAE Level 4 parking function to be officially approved for everyday use."Five "levels" of driving automation have been defined by SAE International, a global association of over 128,000 engineers and technical experts. At Level 4, a vehicle can drive itself under limited conditions and "will not operate unless all required conditions are met." At Level 5, a vehicle's automated driving features can drive it under all conditions. Michael Hafner, who is head of drive technologies and automated driving at Daimler, said in a statement Tuesday that gaining approval from authorities in Baden-Wurttemberg set "a precedent for obtaining approval in the future for the parking service in parking garages around the world." Hafner went on to add that the project paved the way "for automated valet parking to go into mass production in the future." The infrastructure for the system in Stuttgart has been supplied by Bosch, with Daimler providing the technology in the vehicles, which display turquoise lighting to indicate they are in driverless mode.
When the driver of a vehicle with the appropriate technology reaches the car park, they get out and use their smartphone to send their car to a space. The vehicle then drives to that space and parks up. Sensors from Bosch assess the "driving corridor" of the garage and its surroundings, sending the vehicle all the information it needs. The vehicle processes this data to plot its maneuvers and route, driving up and down ramps to move through the garage if required. If an obstacle is detected, the vehicle will stop. Around the world, major businesses are working to develop autonomous driving systems. It was only last week that another car giant, Groupe PSA, announced it was conducting tests in the Spanish city of Vigo to "advance the development of autonomous driving".The collaboration with the Automotive Technology Centre of Galicia will focus on a number of areas, including the protection of vulnerable users; automated valet parking; autonomous driving in urban areas; and "optimal speed regulation" when vehicles approach traffic lights.
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a7282511a42bfa967f10c7a1856401e4 | https://www.cnbc.com/2019/07/23/ge-reveals-new-parts-for-the-worlds-largest-offshore-wind-turbine.html | GE reveals new parts for the 'world's largest offshore wind turbine' | GE reveals new parts for the 'world's largest offshore wind turbine'
GE Renewable Energy
GE Renewable Energy, a subsidiary of General Electric based in Paris, revealed "the first manufactured components" for its gigantic Haliade-X 12 megawatt (MW) offshore wind turbine. On Monday, the firm displayed the first nacelle for the turbine, which will now be shipped from Saint-Nazaire in France to Rotterdam-Maasvlakte in the Netherlands. A nacelle sits directly behind a turbine's blades and is a shell-like structure that contains crucial pieces of kit. These include the turbine's gearbox, controller, generator and brake. GE Renewable Energy said that a prototype of the Haliade-X 12 MW would be installed onshore in the Netherlands in order to "simplify access for testing." Another nacelle is being assembled with a view to testing it in "actual operational conditions" at a site in the U.K. John Lavelle, the CEO of GE Renewable Energy Offshore Wind, said the firm was "on track to start commercializing this new product very shortly."
As technology develops, the size of wind turbines is increasing. In September 2018, MHI Vestas Offshore Wind, a major player in the sector, launched the first commercially available double digit turbine, the V164-10.0 MW. The turbine has 80-meter long blades which weigh 35 tons each, and a tip height of around 187 meters.
The scale of GE Renewable Energy's Haliade-X 12 MW turbine is also considerable. It will have a capacity of 12 megawatts, a height of 260 meters and a blade length of 107 meters. The turbine will generate 67 gigawatt hours of gross annual energy. The company has repeatedly described it as "the world's largest offshore wind turbine."
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2c65412537f9f4a5fc7c35e8cb8df194 | https://www.cnbc.com/2019/07/23/ralph-nader-says-boeing-737-max-should-never-fly-again.html | Consumer advocate Ralph Nader says Boeing 737 Max should never fly again | Consumer advocate Ralph Nader says Boeing 737 Max should never fly again
VIDEO7:4307:43Ralph Nader: Boeing has been mismanaged for yearsSquawk on the Street
Consumer advocate Ralph Nader on Tuesday urged the Federal Aviation Administration to permanently ground Boeing's 737 Max jet.
"The plane cannot be refixed," said Nader, whose grandniece was killed in a March crash of a 737 Max jet in Ethiopia. "It has to be recalled" and permanently taken out of service, he said.
Regulators worldwide ordered airlines to ground their 737 Max planes in mid-March after the crash in Ethiopia and one in Indonesia that occurred within five months of one another, killing a total of 346 people. Since then, Boeing has been preparing to get the Max back in the air.
Airlines have canceled thousands of flights due to the grounding and are planning to do so until at least November, a move that Boeing said it took a $4.9 billion charge for in its second quarter.
But the planemaker needs to "take their losses" on the jet, Nader said in an interview with CNBC's "Squawk on the Street."
Crash investigators have pointed to an issue with the jets' software, for which Boeing said it has developed a fix, as the cause behind the two fatal crashes. But once a software upgrade is submitted to the FAA, it will likely take at least another month before the planes are back in operation.
On the software fix, Nader said it shouldn't be trusted since executives are "stuck in their bad decision" and are "ignoring preventable aerodynamic design."
"It's a new plane; they can't say it's just a little bit changed," he said. "It needs full certification."
A spokesman for Boeing on Tuesday, when asked about Nader's comments, said: "Our deepest sympathies are with the families and loved ones of those who died on Ethiopian Airlines Flight 302 and Lion Air Flight 610 and we continue to assist the investigating authorities as they work to complete the accident investigations. Safety is our first priority as we work with global regulators and customers to return the MAX to service."
Nader has been vocal about recalling the 737 Max and the FAA's approval of the jet.
In May, Nader told CNBC that the FAA, which approved the Max two years ago, was beholden to Boeing.
"In all the product defects that I have worked on over the years, I have never seen so many whistleblowers [and] so many authentic aerospace experts condemning the Boeing practice here," Nader told "Squawk Box" in May. "The FAA has been in the pockets of the Boeing company for years — pressured by Congress and the White House on both parties to cut budgets, to cut staff, [and] reduce their talent pool to oversee Boeing."
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547e4dc4548d1ba40351e65699f6ed73 | https://www.cnbc.com/2019/07/24/cramer-remix-this-food-stock-has-gone-stale.html | VIDEO1:0501:05Cramer Remix: This food stock has gone staleMad Money with Jim Cramer
CNBC's Jim Cramer on Wednesday told a caller that Kraft Heinz is not worth a buy, despite installing a new chief executive earlier this month.
The recognizable food products company has tried to shake up the business by selling off assets, which has been said to come at the cost of growth. Former Anheuser-Busch InBev Global Chief Marketing Officer Miguel Patricio was brought on starting July 1 to help right the ship.
"In the end there's no growth. I like growth," the "Mad Money" host said. "They can shuffle all they want ... but to me what matters is growth because this is about the stock market, not about pantry brands. So I'm going to tell you to stay away and stick with a growth stock like a PepsiCo or a Coca-Cola."
Kraft Heinz has a $39.1 billion market cap. The stock is down more than 25% this year and more than 46% in the past 12 months.
The Facebook logo is displayed during the F8 Facebook Developers conference on April 30, 2019 in San Jose, California.Justin Sullivan | Getty Images
The federal government is the one wild card on Wall Street that is wreaking havoc on stocks, Cramer said.
President Donald Trump campaigned on business-friendly promises to cut red tape, but federal agencies led by his appointees have "declared war" on big tech and it's a "rude awakening," the host said.
"After today, this White House is clearly not as friendly to big business as I know I thought. The days of corporations getting a free pass is over, unless they happen to be in Republican-friendly industries like coal and oil," he said. "That is a major shift, it's not getting enough attention."
Read more here
Daniel Acker | Bloomberg | Getty Images
Cyclical companies that are too attached to the business cycle tend to be doomed when the broader economy slows.
That explains why Caterpillar came up short in its second-quarter report Wednesday, Cramer said, and why the stock dropped 4% during the session. The heavy machinery manufacturer took a hit from higher raw costs and supply.
"At the end of the day, Caterpillar turned out to be too beholden to the oil and gas cycle. Now, we know from Halliburton, which is cutting back its workforce in the Permian Basin, that drilling is deeply cyclical," the host said.
Get more here
William 'Bill' Brown, chairman and CEO of L3Harris, speaks during an interview with CNBC on the floor of the New York Stock Exchange, July 1, 2019.Brendan McDermid | Reuters
Cramer recommended that investors be ready to buy shares of the newly formed L3Harris Technologies on any pull back when it reports next week.
The host is unsure what to expect when the defense contractor hosts its conference call Wednesday morning, but he is sure of its viability. L3Harris, the result of a merger of Harris Corp. and L3 Technologies, ranks among the top six defense companies in the United States.
"This was a brilliant combination that's created the most high-tech operator in the industry," he said.
Go deeper here
First Horizon CEO Bryan JordanSource: CNBC
Cramer gets insight into the consumer economy in a one-on-one with First Horizon CEO Bryan Jordan.
Watch the interview here
John Donahoe, CEO of ServiceNow.David Paul Morris | Bloomberg | Getty Images
ServiceNow CEO John Donahoe chats with Cramer coming off its latest quarter report. The cloud enterprise software company beat on earnings, but the stock fell 5% in after-hours trading.
Catch the discussion here
In Cramer's lightning round, the "Mad Money" host zips through his thoughts about caller stock picks of the day.
Twilio: "I think Twilio is the backbone of so much of what's going on in Silicon Valley right now, whether it be Lyft, whether it be Airbnb. That even at the exalted levels ... it is still a buy."
AT&T: "I'm going to tell you I think AT&T delivered a good quarter. I didn't like the idea they're going to buyback stock ... but I do believe that the cash flow is humongous and AT&T can be bought."
Disclosure: Cramer's charitable trust owns shares of Twilio and Caterpillar.
Questions for Cramer? Call Cramer: 1-800-743-CNBCWant to take a deep dive into Cramer's world? Hit him up! Mad Money Twitter - Jim Cramer Twitter - Facebook - InstagramQuestions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com
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4b7e644a3acb517d9fb53386692540af | https://www.cnbc.com/2019/07/24/daimler-second-quarter-earnings-hammered-by-takata-diesel-charges.html | Daimler second-quarter hammered by Takata, diesel charges | Daimler second-quarter hammered by Takata, diesel charges
The windows at the corporate headquarters of Daimler AG in Untertürkheim are illuminated.picture alliance | picture alliance | Getty Images
Luxury carmaker Daimler said it would intensify cost cuts after legal risks for diesel-related issues and the cost of replacing Takata airbags triggered a 1.56 billion euros ($1.74 billion) loss before interest and taxes in the second quarter.
The German company said 4.2 billion euros in one-off expenses contributed to the operating loss in the quarter, compared with a 2.6 billion profit in the same period last year.
"In general, we are intensifying the Group-wide performance programs and reviewing our product portfolio in order to safeguard future success," Chief Executive Ola Kaellenius said in a statement on Wednesday.
Earlier this month, the Stuttgart-based carmaker pre-released earnings in what amounted to its fourth profit warning in 13 months, saying its 2019 group EBIT would be "significantly" lower than last year.
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1b4520446396deef069a65053ae1f0fe | https://www.cnbc.com/2019/07/24/deutsche-bank-q2-2019.html | Deutsche Bank shares slump 5% after greater-than-expected second-quarter net loss | Deutsche Bank shares slump 5% after greater-than-expected second-quarter net loss
VIDEO1:2401:24Deutsche Bank's second quarter performance 'creditable,' CFO saysSquawk Box Europe
German lender Deutsche Bank reported a weaker-than-expected net loss of 3.15 billion euros ($3.51 billion) for the second quarter of 2019.
Analysts polled by research firm Refinitiv had estimated a net loss of 1.7 billion euros for the period, due to the bank's massive restructuring program announced earlier this month. The German bank itself had previously said it expected to report a net loss of 2.8 billion euros for the quarter.
The embattled German lender saw a net profit of 401 million euros for the same quarter last year, but has since endured a tumbling share price and a fresh round of scandals. Deutsche Bank shares fell more than 5% in early trade Wednesday as investors digested the news.
Here are some of the key highlights for the quarter:
Net revenue hit 6.2 billion euros, versus 6.59 billion euros a year ago.Common equity tier 1 capital ratio of 13.4%, versus 14.7% a year agoSubstantial strategic transformation charges of 3.4 billion euros.
Earlier this month, Deutsche Bank announced that it would exit its global equities business and slash 18,000 jobs by 2022. First to go were senior executives Garth Ritchie, Sylvie Matherat and Frank Strauss, who will leave the bank at the end of this month.
"We have already taken significant steps to implement our strategy to transform Deutsche Bank," Christian Sewing, the bank's CEO said in a statement Wednesday.
"These are reflected in our results. A substantial part of our restructuring costs is already digested in the second quarter. Excluding transformation charges the bank would be profitable and in our more stable businesses revenues were flat or growing."
Deutsche Bank also revealed that over 900 employees have so far been given notice or told that their roles will be terminated. It further clarified that excluding the strategic transformation charges, net income would have been 231 million euros, versus 401 million euros over the same period last year.
VIDEO0:2800:28ECB rate cut should have tiering system to insulate banks: Deutsche Bank CFOSquawk Box Europe
The bank's shares have fallen more than 30% in the last 12 months, hit by a host of scandals relating to historical anti-money laundering failures. The outlook following the restructure was met with some skepticism by Wall Street analysts, raising questions about whether it was too radical and ambitious.
The bank expects the sweeping reforms, which also involve the creation of a 74 billion euro ($83.05 billion) "bad bank," to cost 7.4 billion euros by 2022.
Deutsche Bank Chief Financial Officer James von Moltke told CNBC Wednesday that the "more significant share" of the transformation related charges are now behind the bank, adding that feedback from both institutional and corporate clients on the restructuring decisions had been "overwhelmingly positive."
"The critical point that we took away was the marketplace, whether that's investors, regulators, rating agencies, and most importantly clients, see the strategic decisions we made as the right ones for the company," he told CNBC's Annette Weisbach in Frankfurt. However, he added that the market is expecting to see "proof points" from the bank.
In its earnings report, Deutsche Bank also expressed concerns about global trade tensions and the impact of persistent low interest rates from central banks, with the European Central Bank (ECB) announcing its latest monetary policy decision on Thursday. ECB President Mario Draghi is widely expected to pave the way for a reduction in the bank's deposit rate or a resumption of quantitative easing (QE).
VIDEO3:5803:58Deutsche Bank's investment bank 'will remain significant,' strategist saysStreet Signs Europe
"If these conditions were to persist for an extended period of time, and not be offset by accommodations such as the tiering of reserves held by banks with the Eurosystem central banks, this could result in a significant impact on revenues relative to our current expectations," the Deutsche Bank earnings report stated.
"Actions to offset this rate impact, such as pricing changes or the introduction of fees, may not be sufficient to offset this impact.".
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2c42223d8ae71982580f0e6dc35b7ea1 | https://www.cnbc.com/2019/07/24/fake-followers-in-influencer-marketing-will-cost-1point3-billion-in-2019.html | Fake followers in influencer marketing will cost brands $1.3 billion this year, report says | Fake followers in influencer marketing will cost brands $1.3 billion this year, report says
Kylie Jenner, Kim Kardashian West, and Kendall Jenner attend The 2019 Met Gala Celebrating Camp: Notes on Fashion at Metropolitan Museum of Art on May 06, 2019 in New York City.Kevin Tachman/MG19 | Getty Images Entertainment | Getty Images
Brands pay billions of dollars globally a year to promote their products through influencers who have sizable followings on top social media sites. But a new report suggests that, for a good chunk of their spending, those advertisers are getting ripped off.
Influencer marketing gives brands of all sizes a way to reach relevant audiences on platforms such as Instagram, Snapchat or YouTube in a way that might feel more authentic to a consumer. To appear more influential than they actually are, influencers can buy fake followers and pay for bots to like or comment on their posts.
That fraudulent activity is costing advertisers $1.3 billion this year, according to a report from Cheq, a cybersecurity company focused on the digital media space, and University of Baltimore economist and professor Roberto Cavazos.
The fraud figure represents about 15% of what the report predicts will be an $8.5 billion market this year in spending on global influencer marketing. Cheq derived the amount of expected fraud through an analysis of its own data, a review of services that exist to provide fake social media engagement, and research and surveys on the subject, said Daniel Avital, Cheq's chief strategy officer. The analysis was part of a series of reports Cheq is publishing on the monetary cost of bad actors on the internet.
Having social media influence can be lucrative. According to the Cheq report, a "micro influencer" with 10,000 followers can make $250 for a sponsored post, while someone with a million or two followers can make $250,000 per post. Even individuals with 500 followers can get cash for posts. Followers don't necessarily mean sales, though, as one Instagram star recently discovered. Arianna Renee, who has 2.6 million followers, recently tried to launch a clothing line but had to scrap it after selling very few products.
A Kylie Jenner cosmetics display in an Ulta store in New York.Scott Mlyn | CNBC
While there are plenty of legitimate influencers in the business, the opportunity also draws bad actors who turn to bots and click farms to juice their engagement numbers.
"It used to be you had to be a Kim Kardashian or Kylie Jenner kind of person to be an influencer," Avital said. Now there are so many "tiers of influencer" that people with very niche followings can get involved in the business.
Avital said brands using influencer marketing should invest in their own vetting programs to ensure their influencers are legitimate. Though it requires time and labor, it's "not a cybersecurity challenge," he said. "It's quite easy to understand if their followers are bogus."
Consumers can also examine the legitimacy of influencers who are pitching them products by doing some analysis of their own.
"Say the person has 70,000 followers and they get 100 likes and zero comments per post — that red flag should go up," said Mae Karwowski, founder and CEO of influencer marketing agency Obviously. Low engagement might mean that influencer is making content their followers don't care about or they might not have real followers, she said.
Social platforms are making changes that might affect how fraudsters operate. For example, Instagram said last week it is expanding its test to hide "likes" in more markets.
Bob Gilbreath, general manager of influencer and social media marketing firm Ahalogy, said that type of move could create less pressure to engage in fraud because some brands currently only pay influencers if they receive a certain number of likes.
"The more we can clean it up and move away from anybody gaming the system, even if it makes our jobs harder, it will be better" for the industry, Gilbreath said.
WATCH: Marcus Lemonis challenges two social media influencers
VIDEO0:5500:55Marcus Lemonis challenges two social media influencers to sell sunglasses to strangersThe Profit
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7e2cd25b1fd5baabf05b1419f2fcdf46 | https://www.cnbc.com/2019/07/24/forex-markets-euro-european-central-bank-in-focus.html | Gloomy data sends euro to 2-month low ahead of ECB meeting | Gloomy data sends euro to 2-month low ahead of ECB meeting
Dan Kitwood | Getty Images
The euro fell to a two-month low against the dollar on Wednesday, hit by weak economic data and speculation that the European Central Bank may open the door to aggressive monetary policy easing as soon as this week.
Money markets are pricing in a 54% chance of a 10 basis point cut on Thursday's ECB meeting.
The probability rose after the eurozone purchasing managers' index unexpectedly fell to a three-month low of 51.5 in July from 52.2 in June. Economists polled by Reuters had expected a slight decline to 52.1.
The 50 mark separates economic growth from contraction.
The ECB could also signal further reductions down the road or a fresh round of quantitative easing (QE), investors said.
"Disappointing PMIs out of the euro area will only increase expectations further for (Mario) Draghi to deliver a dovish sounding message tomorrow," said Mohammed Kazmi, a portfolio manager at UBP.
"He will be expected to strongly hint at both rate cuts and QE ahead of easing that is anticipated for September."
The common currency was down 0.1% at $1.1137 after earlier hitting $1.1127, its lowest since May 30. The euro hit a two-year low of $1.1105 in May.
Markets betting on ECB easing have lifted the Swiss franc , which traded at 1.0980 francs per euro, not far from the two-year high of 1.0972 reached on Tuesday.
The surging franc is heaping pressure on Swiss officials to act to protect their export-heavy economy.
The euro has shed 2% of its value this month as investors priced in the probability of euro zone borrowing costs falling deeper into negative territory. A broadly stronger dollar also contributed to the single currency's woes.
Expectations of lower interest rates in developed economies weighed on other currencies, such as the Australian dollar, which fell 0.5% to a two-week low of $0.6973.
Three consecutive days of lower iron ore prices may also be hurting currencies sensitive to commodity prices like the Aussie, analysts said.
The U.S. dollar firmed after Washington reached a deal to lift government borrowing limits, which analysts said could limit the U.S. Federal Reserve's appetite for rate cuts.
The dollar was flat against a basket of currencies at 97.65, having edged up to a five-week high of 97.76 earlier following gains of nearly 0.5% the previous day.
The pound rose slightly from recent lows after Boris Johnson on Tuesday won the contest to be Britain's next prime minister, focusing investor attention on the prospect of a no-deal Brexit.
Some market watchers expect sterling to fall after eurosceptic Johnson's speech on Wednesday, when he takes over as prime minister.
"Boris Johnson is deliberately provocative... That would be enough to get people to worry," said Helen Thomas, chief executive of macroeconomic consulting firm BlondeMoney.
Sterling was last up 0.44% at $1.2491, not far from the 27-month low of $1.2382 it hit last week.
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fd191cfc391d96d8d48724050262ebf4 | https://www.cnbc.com/2019/07/24/gold-markets-fed-interest-rate-middle-east-in-focus.html | Gold rises on expected economic stimulus | Gold rises on expected economic stimulus
Getty Images
Gold prices rose on Wednesday on expectations of monetary policy easing from leading central banks to shore up the global economy, though a stronger dollar curbed gains.
Spot gold was up 0.4% at $1,422.05 an ounce but still short of last week's peak at $1,452.60. U.S. gold futures rose $1.90 to $1,423.60.
Continued strong investment interest and buying in gold, expectations of interest rate cuts, high geopolitical tensions regarding Iran and a gloomy global economic outlook are propping up gold prices today, said Commerzbank analyst Carsten Fritsch.
The European Central Bank (ECB) is expected to signal easier monetary policy when it meets on Thursday. Investors are also looking ahead to the U.S. Federal Reserve's July 30-31 policy meeting, at which it is expected to cut its overnight benchmark lending rate.
Futures remain 100% priced for a rate cut of 25 basis points from the Fed next week and even imply an 18% chance of 50 basis points.
Concerns about tepid economic growth have prompted central banks around the world to review their stance on monetary policy. The IMF on Tuesday lowered its forecast for global growth this year and next, warning that more U.S.-China tariffs, auto tariffs or a disorderly Brexit could hit growth, weaken investment and disrupt supply chains.
Lower interest rates reduce the opportunity cost of holding non-yielding bullion.
Against a basket of other currencies, the U.S. dollar edged up to a five-week high of 97.755 after gains of nearly 0.5% the previous day.
Reuters technical analyst Wang Tao said that spot gold looked neutral in a narrow range of $1,412-$1,427 and a breakout could suggest a direction.
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8e99fd01d924cc69df70ccf0644c0245 | https://www.cnbc.com/2019/07/24/muellers-testimony-showed-only-house-democrats-can-hold-trump-accountable.html | Only House Democrats can hold Trump accountable and Mueller's testimony proved it | Only House Democrats can hold Trump accountable and Mueller's testimony proved it
US House Speaker Nancy Pelosi (2ndL), flanked by (fromL) House Intelligence Committee Chairman Adam Schiff, US Representative Elijah Cummings, Democrat of Maryland and Chairman of the House Oversight and Reform Committee and Chairman of the House Judiciary Committee US Representative Jerry Nadler, delivers a press conference following the former Special Counsel's testimony before the House Select Committee on Intelligence in Washington, DC, on July 24, 2019. (Photo by ANDREW CABALLERO-REYNOLDS / AFP) (Photo credit should read ANDREW CABALLERO-REYNOLDS/AFP/Getty Images)Andrew Caballero-Reynolds | AFP | Getty Images
If House Democrats want President Trump held formally accountable for his conduct surrounding Russian election interference, they'll need to do it all on their own.
Robert Mueller won't do it. As the former Special Counsel reminded lawmakers on Wednesday, the Justice Department says the Constitution shields sitting presidents from prosecution.
Rank-and-file Americans won't demand it. Polling shows the public split on whether Congress should impeach Trump, and hours of Mueller's testimony offered no dramatic revelations with obvious potential to change that.
House Republicans certainly won't help. GOP lawmakers, who protected Trump from scrutiny when in the majority, focused in Judiciary and Intelligence committee hearings on ripping the investigation rather than exploring what it found.
That leaves Democrats alone with their consciences, their constituents, and their cost-benefit analyses of how impeachment would affect the party's ability to retain its majority and stop Trump from winning re-election in November 2020. Their diverse 235-member caucus faces tough choices.
Speaker Nancy Pelosi insists Democrats won't impeach or duck impeachment on the basis of political consequences. So far, in resisting the impeachment demands of colleagues, she has given every impression of doing exactly that.
History and current circumstances explain her reluctance.
Two decades ago, Pelosi watched a Republican majority stumble through its impeachment of Bill Clinton and then oust Speaker Newt Gingrich. Pelosi's majority includes 31 members who represent districts Trump carried in 2016 and could face electoral danger. Impeachment might accomplish little more than energizing Trump 2020 voters.
Close Pelosi allies insist she couldn't gain majority support for impeachment even if she tried, not to mention the two-thirds of a Republican-run Senate needed for conviction and removal from office. "There will never be 218 in the House," a leadership aide told me.
The damning results of the special counsel investigation weigh against that conclusion - however tersely and haltingly Mueller discussed them before television cameras.
Before concluding his work, Mueller obtained felony convictions against Trump's campaign chairman, deputy chairman, National Security Adviser and personal lawyer.
Former Special Prosecutor Robert Mueller testifies before Congress on July 24, 2019, in Washington, DC.Saul Loeb | AFP | Getty Images
He found that Russia criminally interfered in the election to help Trump beat Hillary Clinton, and that Trump's campaign welcomed it.
He found that Trump associates lied about interactions with Russians before and after the election, and also lied about Trump's secret ongoing pursuit of a lucrative Moscow real estate deal.
Mueller did not establish a Trump-Russia criminal conspiracy. But he amassed extensive evidence of potential obstruction of justice, and surprised a Republican questioner by saying a future prosecutor could charge Trump with obstruction crimes after his term.
For now, however, only Congress can act.
Fewer than 100 House Democrats advocated impeachment before Mueller's public testimony. Privately, Democratic lawmakers and advisers doubt the hearings will significantly boost that number.
Not all of them, though. One Judiciary Committee member who questioned Mueller predicted renewed focus on the facts will renew impeachment momentum within the caucus.
"As he did in his 400-page report, Special Counsel Mueller today outlined a series of high crimes committed by President Trump," Rep. David Cicilline of Rhode Island, who serves in the Democratic leadership, told me. "To not open an impeachment inquiry in the face of such obvious corruption is an abdication of the oath we took to defend our country, uphold the rule of law and hold the President accountable for his misconduct."
President Donald Trump talking with the press as he leaves the White House in Washington, DC.Michael Brochstein | LightRocket | Getty Images
Pelosi sought to placate restless members Wednesday afternoon by suggesting the House might yet explore impeachment after two more developments. One is gaining access to Mueller's grand-jury material through the courts; the other is obtaining public testimony from former White House counsel Don McGahn, a key to potential obstruction charges who has privately testified Trump told him to fire Mueller.
Democratic presidential candidates, courting the party's most zealous activists, will maintain outside pressure. With five months left before 2020, House Democrats don't have long to decide.
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c38c106bd78c530d83a85aab444bbfc0 | https://www.cnbc.com/2019/07/24/oil-tanker-near-yemen-coast-could-soon-explode-experts-warn.html?__source=fincont&par=fincont | 'Floating bomb': Decaying oil tanker near Yemen coast could soon explode, experts warn | 'Floating bomb': Decaying oil tanker near Yemen coast could soon explode, experts warn
Experts have warned that brinkmanship between the Saudi-backed UN Yemen government and the Houthis over the abandoned Safer FSO vessel "is threatening a serious environmental emergency."AFP | Getty Images
An abandoned and decaying oil tanker near the coast of war-torn Yemen could soon rupture or explode, the United Nations (UN) has warned, potentially triggering one of the world's largest oil spills.
The deserted Safer FSO tanker, which is believed to contain approximately 1.14 million barrels of oil, has been anchored and left without maintenance off the Yemeni coast of Al Hudaydah since early 2015, according to the UN.
The tanker, which was described in a recent op-ed from The Atlantic Council as a "floating bomb," is thought to be eroding fast.
There are concerns that following years of inertia in a salty and corrosive maritime environment, volatile gases have built up in the storage tanks — increasing the risk of an explosion.
However, UN officials' plans to inspect the ship in order to assess the scale of the damage has repeatedly been blocked.
Matt Lowcock, the UN undersecretary-general for humanitarian affairs, said in a speech to the Security Council last week that Houthi authorities "continue to delay" any assessment of the tanker.
Lowcock pointed out that this was "additionally frustrating" because Houthi authorities had actually contacted the UN in early 2018 requesting assistance with the tanker and promising to facilitate their work.
"If the tanker ruptures or explodes, we could see the coastline polluted all along the Red Sea. Depending on the time of year and water currents, the spill could reach from Bab el Mandeb to the Suez Canal — and potentially as far as the Strait of Hormuz," Lowcock said on July 17.
"I leave it to you to imagine the effect of such a disaster on the environment, shipping lanes and the global economy."
Experts have warned that brinkmanship between the Saudi-backed UN Yemen government and the Houthis over the Safer FSO vessel "is threatening a serious environmental emergency."
The two sides blame each other for failing to reach a solution about what to do with the decaying oil tanker.
The value of crude estimated to be stuck on board the Safer FSO tanker is reportedly worth more than $70 million, based on current oil prices.
International benchmark Brent crude traded at $64.02 Wednesday morning, up over 0.3%, while U.S. West Texas Intermediate (WTI) stood at $57.09, around 0.6% higher.
The Yemen-owned vessel was once an offshore platform for ships landing crude oil from a nearby pipeline to the central province of Marib. It is supposed to be constantly tended to in order to prevent the build-up of explosive gases.
"The danger increases with every day that goes by," Doug Weir, policy director of the Conflict and Environment Observatory, told CNBC via telephone on Wednesday.
"No-one is really sure of the condition the ship is in at the moment." Weir said, before adding: "This shouldn't necessarily be a super-politicized issue."
"In theory, this could be a brilliant example of where we see co-operation between all the Red Sea countries coming together to tackle an environmental issue. Instead, we are seeing the opposite of that."
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Earlier this month, the recognized Yemen government sounded the alarm in a video posted on Twitter, saying there is an "urgent need" to empty the tank and perform maintenance works.
In the video, the Saudi-backed UN government warned the explosion of the Safer FSO vessel would constitute an environmental disaster that is four times greater than the Exxon Valez oil spill in 1989 — generally viewed as one of the worst man-made environmental disasters in history.
The UN's Lowcock warned the Security Council that if a major spill does occur, "the world will surely demand answers from anyone who could have prevented the catastrophe but chose not to."
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064a2a7899bc94e1b4b19cd4b79d1ae0 | https://www.cnbc.com/2019/07/25/apple-plans-to-buy-intels-wireless-chip-unit-for-1-billion.html | Apple plans to buy Intel's wireless chip unit for $1 billion | Apple plans to buy Intel's wireless chip unit for $1 billion
VIDEO3:2903:29Intel reports beat on revenue, Apple to buy smartphone modem business for $1BClosing Bell
Apple has agreed to buy the majority of Intel's smartphone modem division, the companies announced on Thursday.
Intel was up more than 6% in after-hours trading. Apple stock was flat on the announcement.
2,200 Intel employees are joining Apple, according to the announcement. Apple paid $1 billion for employees, intellectual property and other equipment from Intel. The deal is expected to close in the fourth quarter of 2019.
"Today we announced the sale of the majority of our 5G smartphone modem business to Apple," Intel CEO Bob Swan said on a conference call discussing company earnings. "This deal preserves Intel access to critical IP we have developed and enables us to focus on the more profitable 5G network opportunity where we are growing and winning share."
Apple currently purchases Intel modems for iPhones, which allow it to connect to networks operated by carriers such as Verizon and AT&T. But in April, Intel announced that it planned to leave the smartphone modem market because Intel had "no clear path to profitability and positive returns," Swan said at the time.
Apple was Intel's only modem customer.
As part of the deal, Intel will be able to develop modems for devices that aren't smartphones, the companies said, including PCs, connected industrial devices and autonomous vehicles.
Goldman Sachs was Intel's advisor on the deal.
Apple will buy modem chips from Qualcomm in the near-term. Earlier this year, as part of a settlement over patent licensing, Apple agreed to buy Qualcomm chipsets for multiple years, suggesting that Qualcomm will provide modem chips for future iPhones, including future versions that may support 5G networks.
Qualcomm dropped 1% in after-hours trading.
Apple is widely believed to be building its own 5G chipset, according to media reports and job listings. The intellectual property it receives from Intel will be critical to that effort, analysts say, but it is likely to be a long-term, multi-year effort given the complexity of the technology.
"Apple does realize it's not another chip — it's strategic intellectual property in a connected device," said Prakash Sangam, founder of Tantra Analyst, a research and advisory firm, previously told CNBC. "This is one of the key strategic pieces of IP they don't have, and it makes sense to own it."
"For Cupertino this would be a clear 'doubling down' on 5G which remains at the centerpiece of the company's smartphone future with these chip assets giving Apple further control over its supply chain and core chip design," Wedbush analyst Dan Ives wrote in a note on Monday.
Apple now owns 17,000 wireless technology patents, when the recent Intel purchases are included, it said on Thursday.
"Apple is excited to have so many excellent engineers join our growing cellular technologies group," Apple Senior Vice President of Hardware Technologies Johny Srouji said in a statement. "They, together with our significant acquisition of innovative IP, will help expedite our development on future products and allow Apple to further differentiate moving forward."
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e2d4fbf4f9f6849b6a985fd0b42fb0a0 | https://www.cnbc.com/2019/07/25/asia-semiconductor-stocks-ecb-currencies-in-focus.html | Asia Pacific markets mostly higher as semiconductor stocks jump | Asia Pacific markets mostly higher as semiconductor stocks jump
Most major Asia Pacific stock markets closed higher on Thursday as semiconductor stocks in Japan and South Korea rose.
Mainland Chinese stocks saw gains on the day. The Shanghai composite added 0.48% to about 2,937.36 and the Shenzhen component edged up 0.85% to 9,344.82. The Shenzhen composite gained 0.629% to approximately 1,572.80.
Hong Kong's Hang Seng index gained 0.25% to end its trading day at 28,594.30, with shares of Chinese tech giant Tencent jumping 1.86%.
Meanwhile, the Nikkei 225 in Japan rose 0.22% to close at 21,756.55, with shares of index heavyweight Softbank Group advancing 1.8%. The Topix index gained 0.18% to finish its trading day at 1,577.85.
Australia's S&P/ASX 200 closed 0.61% higher at 6,818.00, with most sectors advancing.
In an earlier speech, Reserve Bank of Australia Governor Philip Lowe said "it is reasonable to expect an extended period of low interest rates." The Australian central bank has slashed interest rates for two months in a row, bringing it to a record low.
In South Korea, however, the Kospi slipped 0.38% to close at 2,074.48 as shares of LG Chem plunged 4.95%.
Overall, the MSCI Asia ex-Japan index rose 0.26%.
Shares of South Korean chipmaker SK Hynix jumped 2.06% on Thursday after the company announced a reduction in chip output.
Tumbling memory chip prices led to a 89% year-on-year plunge in SK Hynix's operating profit for the reporting period, which came in at approximately 638 billion Korean won ($541.9 million), missing analysts' expectations.
Shares of rival Samsung Electronics, an industry heavyweight, also gained 1.72%.
The company also said Thursday its Galaxy Fold phone is set to launch in September, following an earlier delay after multiple tech reviewers reported that the device broke easily. Samsung is set to formally announce earnings on July 31.
Meanwhile, shares of Japanese semiconductor test equipment manufacturer Advantest soared 20.23%.
It comes as Japan introduced export restrictions on high-tech materials to South Korea that are critical in the production of semiconductors. Analysts have warned that if it remains unresolved, there could be serious consequences to the global semiconductor industry.
Companies are usually assumed to be holding around two months of inventory, SK Kim, executive director and analyst at Daiwa Securities, told CNBC's "Street Signs" on Thursday. If the trade conflict between Tokyo and Seoul extends beyond two months, the South Korean chipmakers could see a "disruption" in their supply, he added.
"It will be negative for the global IT industry," Kim said. "Korea semiconductor makers ... account for about 70% of global memory market share."
Overnight on Wall Street, the S&P 500 advanced 0.5% to close at a record of 3,019.56, while the Nasdaq Composite rose nearly 0.9% to end the day at 8,321.50. The Dow Jones Industrial Average, however, closed 79.22 points lower at 27,269.97.
Elsewhere, the European Central Bank is also set to meet on Thursday. Analysts expect that it would keep interest rates unchanged.
"The risk is the ECB loosens monetary policy tonight which can further undermine (the euro)," Joseph Capurso, senior currency strategist at Commonwealth Bank of Australia, wrote in a note.
"Our base case is for the ECB to remove its forward guidance tonight that interest rates will remain 'at their present level through the first half of 2020, and in any case for as long as necessary'," Capurso said.
Ahead of that meeting, the euro traded at $1.1128 after slipping from levels above $1.12 seen earlier in the trading week.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.747 after touching lows around 97.6 yesterday.
The Japanese yen traded at 108.08 against the dollar after seeing highs around 108.0 in the previous session, while the Australian dollar changed hands at $0.6967, slipping from levels above $0.699 yesterday.
Oil prices were higher Thursday afternoon during Asian trading hours, with the international benchmark Brent crude futures contract rising 0.52% to $63.51 per barrel. U.S. crude futures advanced 0.59% to $56.21 per barrel.
— Reuters and CNBC's Fred Imbert contributed to this report.
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fd97a7fa99f0d859e968925f2b08e087 | https://www.cnbc.com/2019/07/25/diageo-earnings-2019.html | Diageo profit rises on strong demand and cost cuts | Diageo profit rises on strong demand and cost cuts
VIDEO6:2006:20We're benefiting from premiumization, Diageo CEO saysSquawk Box Europe
Diageo, the world's largest spirits company, reported higher annual profit on Thursday, helped by growth across all its markets, an improved price mix and as it kept a tight lid on costs.
The maker of Johnnie Walker Scotch whisky, Smirnoff vodka and Guinness stout said operating profit rose 9.5% to £4 billion ($4.99 billion) for the year ended June 30.
Diageo CEO Ivan Menezes told CNBC's "Squawk Box Europe" on Thursday that the company's "top line is strong and consistently growing nicely as people are drinking better and want better brands."
Net profit for the year rose 4.6% higher than the previous year at £3.16 billion, while sales rose 5.8% to £12.87 billion, which Menezes said was driven by "broad-based momentum" across geographical regions. The company has approved plans for a capital return of up to £4.5 billion to shareholders for the fiscal period of 2020 to 2022.
Menezes added that Diageo had a "banner year for new product innovation" and has increased its marketing investment in order to drive net sales growth, offsetting costs by improving efficiencies elsewhere.
He also revealed that the company would consider further acquisitions after the "phenomenal growth story" of tequila brands Don Julio and Casa Amigos.
"We've been very active managers of our portfolio, we have a strong balance sheet, we have the appetite to do more, and we are on the lookout to buy more attractive brands to add to the portfolio - but our organic footprint of geographies, categories and brands gives us the ability to continue to grow this business sales in mid single digits and profits faster than that, because we are benefiting from premiumization," he told CNBC.
This is part of a deliberate strategy to increase high-end brands at a faster rate, he explained.
- Reuters contributed to this report.
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bf96fe81afe1e1d7cdc6eee5bf47e7ca | https://www.cnbc.com/2019/07/25/mystery-trader-bets-amazon-could-hit-new-all-time-high-after-earnings.html | Mystery trader bets Amazon could hit a new all-time high after earnings | Mystery trader bets Amazon could hit a new all-time high after earnings
VIDEO2:0802:08Despite heat from White House, options traders are betting on AmazonOptions Action
Amazon could be primed for a new all-time high.
That's according to one mystery trader, who on Wednesday bet that shares of the e-commerce giant could jump by at least 4% after its earnings report, Mike Khouw, co-founder and chief strategist at Optimize Advisors, said Wednesday on CNBC's "Options Action."
Market watchers are expecting that report — set to be released after Thursday's closing bell — to reveal the fruits of Amazon's shift to one-day shipping for Prime members, as well as its annual shopping holiday, Prime Day.
And, for said mystery trader, that could mean record highs for the stock, which was hovering around the $1,990 level in early Thursday trading. Amazon's all-time intraday high is $2,050.50, hit last September.
On Wednesday, the mystery buyer put on a trade that was "a purchase of the $2,060/$2,065 call spreads," Khouw said. "Somebody paid just over a buck for a couple hundred of those, and that is going to be profitable if Amazon rises by 4%."
What stood out to Khouw was the trader's strategy: by buying a bullish call spread with options premiums at lower-than-average levels, the buyer effectively gets a better bang for their buck.
"You're able to get quite a lot of leverage on a relatively small move for Amazon of 4% to the upside," Khouw said, noting the trade offers a "payout of about 4 to 1."
Guy Adami, director of advisor advocacy at Private Advisor Group, wasn't quite as bullish as this mystery bettor.
"Listen, I have no doubt they're going to report a great quarter," he said in the same "Options Action" segment. "However, is the setup as good as it was a month, a month and a half ago when it was an $1,800 stock?"
Amazon shares were down less than 1% lower in early Thursday trading. The stock is up nearly 33% year to date.
Disclaimer
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df183821614fa03c85cc4fef4fab741f | https://www.cnbc.com/2019/07/25/royal-caribbean-ceo-on-how-the-cruise-line-unlocked-growth-in-china.html | VIDEO3:2003:20Why Royal Caribbean is growing in China in spite of economic slowdownMad Money with Jim Cramer
China's economy is slowing down, but the head of the Royal Caribbean Cruises told CNBC on Thursday that business there is "working beautifully."
Things are going well because the cruise line was prepared for the slowdown, CEO Richard Fain said in a one-on-one interview with Jim Cramer. The Chinese gross domestic product in the second quarter eased to 6.2%, its lowest output in nearly three decades, as the country grapples with the ongoing trade war with the United States.
Royal Caribbean got ahead of the slowdown about five years ago by improving its messaging, its distribution system and how its products are sold, Fain said.
"The result is that even though the China economy is obviously faltering, we're not," he said in the "Mad Money" interview. "We're having a record year there. It's much better than last year. It continues to improve."
Royal Caribbean expects Spectrum of the Seas, a cruise ship it launched in Shanghai this year, will continue to see strong demand throughout 2019. Along with expanding distribution channels to stimulate demand in the country, the new line is helping to boost yield growth, the company said in its second quarter earnings report Wednesday.
The global cruise vacation company, which has a total of 26 ships to sail, saw sales grow about 20% in the second quarter to $2.81 billion, topping estimates, according to FactSet. Net income came in at $472.8 billion, which translates to $2.54 per share.
"We brought out more capacity, we're filling the extra capacity and we're filling it all at better pricing. That feels pretty good to me," Fain said.
Royal Caribbean's third-quarter earnings guidance of $4.35 per share was in line with estimates, but the company lowered its full-year expectations to a range of $9.55 to $9.65 from a previously stated range of $9.65 to $9.85. The stock fell about 2% during the session after its report.
When asked about how the cruise line is responding to a toddler's tragic death on one of its ships docked in San Juan, Puerto Rico earlier this month, Fain called the event "heartbreaking" and said the company is working with prosecutors. He expects the investigation to wrap up soon.
"Our job is to support them, but not to comment," he said.
VIDEO8:2808:28Royal Caribbean is growing in China despite the economic slowdown — here's whyMad Money with Jim Cramer
Questions for Cramer? Call Cramer: 1-800-743-CNBCWant to take a deep dive into Cramer's world? Hit him up! Mad Money Twitter - Jim Cramer Twitter - Facebook - InstagramQuestions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com
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35d830e0018232cb4cc1db67f56a95b1 | https://www.cnbc.com/2019/07/25/softbank-is-reportedly-committing-40-billion-for-its-second-mega-fund.html | SoftBank is reportedly committing $40 billion for its second mega fund | SoftBank is reportedly committing $40 billion for its second mega fund
Masayoshi Son, chairman and chief executive officer of SoftBank Group at the SoftBank World 2018 event in Tokyo, Japan.Kiyoshi Ota | Bloomberg | Getty Images
Japanese conglomerate SoftBank is expected to invest $40 billion into its second tech-focused mega fund, the Wall Street Journal reported Wednesday evening.
SoftBank's board is due to meet Thursday to approve the funding, according to the Journal, citing people familiar with the matter.
The sequel to the massive $100 billion first Vision Fund has unlikely backers including Apple, Goldman Sachs and Standard Chartered, according to the Journal. It added that Goldman hopes to secure work for IPOs when the fund's portfolio companies eventually go public.
SoftBank, Goldman Sachs and Standard Chartered declined to comment. Apple did not immediately respond to CNBC's request for comment.
The second fund also aims to raise $100 billion, SoftBank said in May.
The first fund was backed by the sovereign wealth funds of Saudi Arabia and Abu Dhabi, as well as tech companies such as Apple, Qualcomm and Taiwan's Foxconn, formally known as Hon Hai Precision Industry. The first fund delivered about 45% rate of return to partners after fees on a net equity basis.
The Journal said in its report that unnamed sources said both Saudi Arabia and Abu Dhabi have indicated they are likely to invest again, but Riyadh's commitment will be less than the $45 billion it put into the first fund.
Vision Fund I is known for investing billions of dollars into global technology and telecommunication companies around the world. Those include Uber, Slack, The We Company, formerly known as WeWork, India's One97 Communications, which owns online payment services company Paytm, and e-commerce firm Flipkart.
In March, SoftBank CEO Masayoshi Son told CNBC's David Faber that the fund already invested about $70 billion of its money.
Read the Journal's full report about SoftBank's plans for the Vision Fund sequel here.
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f7a2292bc9e1f8c1ec7cc4279a50da4a | https://www.cnbc.com/2019/07/25/vw-q2-operating-profit-up-30percent-as-suv-push-pays-off.html | VW second-quarter operating profit up 30% as SUV push pays off | VW second-quarter operating profit up 30% as SUV push pays off
Nelson Almeida | AF | Getty Images
Volkswagen Group said its second-quarter operating profit rose 29.9% despite a 1.8% drop in vehicle sales after the VW brand launched a raft of higher-margin sports utility vehicles and amid rising sales at Porsche and Skoda.
The Wolfsburg, Germany-based company's operating profit rose to 5.13 billion euros ($5.71 billion), up from 3.94 billion euros in the second quarter last year. The operating profit jump was magnified by the absence of a diesel charge VW booked in the year-earlier period.
Volkswagen reiterated it expects vehicle deliveries in 2019 to exceed a prior-year figure and for revenues in the passenger cars and commercial vehicles divisions to grow at least 5%.
VW said it continues to expect an operating return on sales in the passenger cars area between 6.5% and 7.5% and reiterated that after special items, it expects the operating return on sales to be at the lower end of the expected range for the group and the passenger cars business area.
Peugeot on Wednesday said it had delivered an operating margin of 8.7% in the first half of 2019, without releasing a more detailed breakdown of quarterly results.
By contrast, Volkswagen Group's operating return on sales rose to 7.2% in the first half, up from 6.8% in the year-earlier period.
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f2d0fc3c6badebc7379711569fc81914 | https://www.cnbc.com/2019/07/26/calls-of-the-day-goldman-sachs-bank-of-america-match-more.html | Here are the biggest analyst calls of the day: Goldman Sachs, Bank of America, Match & more | Here are the biggest analyst calls of the day: Goldman Sachs, Bank of America, Match & more
Brian Moynihan, CEO, Bank of AmericaScott Mlyn | CNBC
Here are the biggest calls on Wall Street on Friday:
KBW said the three banks are best positioned to benefit from an "extended" economic cycle.
"We are upgrading shares of Citigroup, Goldman Sachs, and Bank of America, as we believe these three stocks are best positioned to benefit from an extended economic cycle that has the prospects to grow further—in addition we reiterate our outperform rating for JPM which should see similar benefits as well. We are raising our price target for all Universal Banks and the main driver is higher returns near term as we have pushed out our expectations for when the next downturn will happen and that was positive for near-term return expectations and our price targets. Based on our new price targets, we project total returns of 20.5%, 21.0%, and 23.3% for GS, BAC, and C, respectively, and we believe Outperform ratings are appropriate."
BMO said in its downgrade of Match that secular growth is "increasingly" priced in.
"There is no major change to our fundamental view and we think the 2Q results will be fine, but with the shares up 82% YTD and reaching 25.6x 2020E EV/EBITDA, we believe strong secular growth is increasingly priced in. We believe MTCH should remain a core SMID-cap holding as it remains a great secular growth story with strong FCF support. We also believe the company has ample opportunity in a large and growing TAM."
Bank of America said it saw "pressure" on the maker of plastics and packaging.
"With the macro still soft and supply adequate, we believe pressure on Dow's profitability is likely to remain well into 1H of 2020. Notably absent from the discussion is Dow's polyethylene (PE) business. While we have a more positive view on the outlook for PE, we believe investors can get better exposure through LYB at a lower valuation and with fewer distractions. Subsequently we are lowering our Dow estimates, PO, and rating, now at Neutral from Buy."
Argus upgraded the toymaker and said it demonstrated "strong" results over the last few quarters.
"We are raising our rating on Hasbro to BUY from HOLD and setting a target price of $145. As demonstrated by its strong results over the past two quarters, Hasbro remains a leader in the U.S. toy industry. The company has a range of strong global brands that include Transformers, Nerf, and My Little Pony, and also dominates in the big-screen business, generating revenue from its Disney Princess, Marvel and Star Wars licensed products. In addition, we expect the company to post strong international growth, particularly in the Asia Pacific region and other emerging markets."
Credit Suisse said it saw a tough second half for the airline.
"While there is upside to our revised $51 target price, we step to the sidelines with a view that the stock will be 'dead money' until we lap the tough H2 revenue comps and a better 2020 setup comes into view. We remain constructive on SAVE's longer-term prospects, particularly as it relates to incremental technology/ancillary revenue initiatives, but it will take some time for management to earn back investors' trust."
Benchmark upgraded the stock after the company's earnings and said it expects engagement metrics to "recover" with a new distribution agreement in place.
"We are now optimistic the Firm's engagement metrics should continue to recover, potentially benefiting from the new distribution agreement with Fox, WWE Network re-launch, return of talent/reset of storylines, and new executive leadership at both Raw and Smackdown. We believe the strong 2Q19 print, reiterated FY19 performance view, increased visibility over FY19 execution risk, upcoming new U.S. distribution agreements, activation of the share repurchase authorization ($1M re-purchased/$500M authorization) and a share price 26% off its 52-week high has created an opportunistic entry point, in our view."
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1d6de3ace823c826b2fdd2bb5a0ee087 | https://www.cnbc.com/2019/07/26/dow-to-rise-house-passes-budget-deal-and-softbank-debuts-mega-fund.html | What to watch today: Dow to rise, House passes budget deal, and SoftBank debuts mega fund | What to watch today: Dow to rise, House passes budget deal, and SoftBank debuts mega fund
U.S. stock futures were pointing to a modestly higher Wall Street open this morning, following a Thursday slide that saw both the Dow and Nasdaq post their biggest one-day losses in a month. The Dow also closed at a two-week low. Despite all that, the Dow is just below breakeven for the week, and the S&P 500 and Nasdaq remain on track for their third positive week in four weeks. (CNBC)
On today's economic calendar, the government is out with its first reading of second-quarter gross domestic product (GDP), the broadest measure of the U.S. economy, at 8:30 a.m. ET. (CNBC)
On the corporate front, Dow component McDonald's (MCD) and Twitter (TWTR) are among the companies reporting quarterly earnings this morning, along with AbbVie (ABBV), Colgate-Palmolive (CL), Goodyear Tire (GT), and Phillips 66 (PSX). There are no earnings reports of note after today's closing bell.
The Trump administration decides today whether to renew a license this week for energy company Chevron's (CVX) operations in Venezuela, with Secretary of State Mike Pompeo supporting a renewal and other officials opposing it. At issue is a six-month U.S. Treasury Department license that has allowed Chevron to keep operating despite U.S. sanctions on the OPEC nation's oil sector. (Reuters)
The House passed a bill to raise the U.S. debt ceiling and set budget levels for two years, taking a step toward avoiding a calamity that threatens to disrupt the economy. The House vote sends the measure to the Senate, which is expected to pass it in the coming days and send it to Trump's desk. The president is expected to sign the bill. (CNBC)
House Speaker Nancy Pelosi and Rep. Alexandria Ocasio-Cortez are meeting today after weeks of public tensions between the two Democrats. The two have recently unified after President Donald Trump told four congresswomen, including Ocasio-Cortez, to "go back" to where they came from. (USA Today)
The Trump administration outlined the details of a $16 billion aid package for farmers damaged by bad weather and the U.S. trade war with China. The U.S. Department of Agriculture program includes $14.5 billion in direct payments to farmers for a range of crops. Sign-ups for aid start Monday, while payments begin next month. (CNBC)
The Justice Department is pushing state officials to support T-Mobile's (TMUS) merger with Sprint (S), through the selling of assets to Dish Network (DISH), The Wall Street Journal reported. The discussions come in response to some of the state attorneys general who have already filed a federal antitrust suit seeking to block the more than $26 billion merger.
The Senate Intelligence Committee reported that election systems in all 50 states were targeted by Russia in 2016. The attack was larger than previously acknowledged, and is just the first report of several to be released from the committee's investigation into the election interference. (NY Times)* It's not just the Russians anymore as Iranians and others turn up disinformation efforts ahead of 2020 vote (Washington Post)
Executives at Wall Street's biggest banks have begun throwing financial support to their early favorites in the 2020 Democratic presidential field: Joe Biden, Kamala Harris, and Pete Buttigieg. All three candidates combined are to receive contributions during the second quarter from at least 15 bank executives, including Goldman Sachs and Morgan Stanley. (CNBC)
SoftBank announced today its second mega fund to invest into technology companies developing artificial intelligence technologies around the world. Prominent corporations that are expected to participate in Vision Fund 2 include: Apple (AAPL), Microsoft (MSFT), iPhone assembler Foxconn, Standard Chartered Bank, and a handful of Japanese financial giants. (CNBC)
Chinese authorities suspect U.S. package delivery company FedEx violated the law by not making shipments of goods from the tech company Huawei to their recipients, the Xinhua state news agency reported today. Investigators reportedly found that FedEx had held back more than 100 Huawei-related shipments. (Reuters)* China wants to track and grade each citizen's actions — it's in the testing phase (CNBC)
The Australian government released a report today recommending tighter oversight over multinational digital platforms including Alphabet (GOOGL) and Facebook (FB), to ensure fairness for other media businesses and give people more control over how their data is used. (AP)
Apple (AAPL) has agreed to buy the majority of Intel's smartphone modem division. Some 2,200 Intel employees are joining Apple, according to the announcement. Apple paid $1 billion for staff, intellectual property, and other equipment from Intel (INTC). The deal is expected to close in the fourth quarter of 2019. (CNBC)
Amazon (AMZN) reported mixed results in its second-quarter earnings release, failing to meet profit expectations while exceeding revenue forecasts. It was the first time in five quarters that Amazon did not post record profits, with shipping costs escalating during the quarter.
Alphabet (GOOGL) beat analysts' expectations on revenue and earnings per share in its second quarter, with the company's results boosted by its continued dominance in internet search. Shares were up nearly 8.2% in premarket trading.
Intel (INTC) reported better-than-expected earnings and revenue, and gave an upbeat forecast. Intel's traditional PC business saw a 1% revenue increase compared with an expected decline.
Starbucks (SBUX) raised its full-year earnings and revenue forecast after more customers returned to cafes in the U.S. and China for pricier drinks. The coffee chain saw global same-store sales post a 6% increase, the most in three years.
T-Mobile (TMUS) earned $1.09 per share for the second quarter, 12 cents a share above estimates, although the mobile carrier's revenue missed Street forecasts. T-Mobile also reported a larger-than-expected number of subscriber additions.
Expedia (EXPE) came in 10 cents a share ahead of estimates with adjusted quarterly profit of $1.77 per share. Both revenue and quarterly bookings for the travel services website operator came in slightly ahead of forecasts.
Mattel (MAT) lost an adjusted 25 cents per share for its latest quarter, less than the 40 cents a share Wall Street had been expecting. Revenue was well above estimates for the toy maker, boosted by sales of action figures based on "Toy Story 4" and growth for its "Barbie" and "Hot Wheels" brands.
Charles Schwab (SCHW) announced a deal to acquire assets of USAA's Investment Management Company, including brokerage and managed portfolio accounts, for $1.8 billion in cash.
Berkshire Hathaway (BRKA, BRKB) raised its stake in Bank of America (BAC) to 950 million shares from the prior 896.2 million, according to a Securities and Exchange Commission filing. That puts Berkshire's stake in the bank at 10.4%.
Your friendly neighborhood Spider-Man just crossed the $1 billion mark after 24 days in theaters. On Thursday, the film had earned an estimated $1.005 billion globally. It is the first Spider-Man movie to make more than $1 billion at the box office. (CNBC)
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342047b9f0cb875cb32083330db5ca48 | https://www.cnbc.com/2019/07/26/gas-part-of-solution-in-energy-transition-goldman-sachs-strategist.html | Gas is part of the solution in the planet's energy transition, Goldman Sachs strategist says | Gas is part of the solution in the planet's energy transition, Goldman Sachs strategist says
VIDEO2:2902:29Big oil spending around half their budgets on low carbon activity, analyst saysSquawk Box Europe
Gas has an important role to play in the global energy transition, according to the head of EMEA natural resources research at Goldman Sachs. Speaking to CNBC Friday, Michele Della Vigna said that, in his personal view, gas was "part of the end solution." According to the International Energy Agency, natural gas supplies 22% of energy used globally. "Renewables make perfect sense up to 50% of the power generation because … you can still manage the unreliability of supply and the timing of demand," he added. When you go above 50% renewables, he explained, things change. "You can only do it without gas fired powered generation if you put batteries in, and today batteries are not economic, they are not in the right part of the cost curve and their manufacturing process uses materials which are scarce," Della Vigna said. The term "global energy transition" can be seen as referring to the planet's shift from fossil-fuel based sources of energy to renewable ones such as solar and wind. The International Renewable Energy Agency describes it as a "pathway toward transformation of the global energy sector from fossil-based to zero-carbon by the second half of this century." While the ambition of the energy transition is huge, it is not an easy process. This is because while sources such as solar and wind are renewable, they do not promise a constant and predictable stream of power.
It's within this context that reliable storage systems will be important to renewables, as they enable the storage of energy when it's available and then its usage when required.Della Vigna floated the idea of a "long-term solution" of renewables, gas fired power generation and some level of carbon dioxide sequestration.
Earlier this month, Della Vigna co-authored a report from Goldman Sachs which said the energy transition could need as much as $30 trillion of investments in clean energy infrastructure by the year 2040 in order to limit global warming.
The report said that renewable power and fuels, electric mobility, carbon capture initiatives and a structural upgrade of power networks were "set to reshape the energy industry."
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7df3e421d0e14229167209eda9cbab59 | https://www.cnbc.com/2019/07/26/japanese-camera-companies-fight-for-survival-in-the-smartphone-era.html | How Canon, Nikon and other Japanese camera companies are fighting for survival in the Smartphone era | How Canon, Nikon and other Japanese camera companies are fighting for survival in the Smartphone era
Festival-goers pose for a selfie photograph.Oli Scarff | AFP | Getty Images
In 1988, Fujifilm unveiled what it called the world's first fully digital consumer camera with the FUJIX DS-1P. It had a revolutionary feature, storing up to 10 images on a credit card-sized SRAM memory card. A lot has changed, especially since Apple introduced the iPhone in 2007, a device on which users today store thousands of images.
There were 100 million digital cameras shipped in the iPhone's first year. By 2018, the digital camera market had declined by roughly 80%, to 19 million. Of Japan's eight digital camera makers, the only one to log sales and profit growth in the most recent annual period through March 31 was Sony, and it was not due to gangbuster camera sales, but rather, the steps Sony took to wedge its technology inside the smartphone market.
"The history of photography began with silver collidium daguerreotypes and it was a rich man's game," said Damian Thong, an analyst at Macquarie Group. "What we've seen with smartphones is the democratization of picture-taking. Today there are literally 5 billion smartphones in adult hands and we can take photos anywhere. In the future, the camera won't go away but it will become a niche market again."
When Fujifilm announced its latest instant camera last month, it was a sign that old-school photography can still find ways to remain popular with young people. The instax mini LiPlay is a hybrid camera that lets you save images as digital files as well as print them as small Polaroid-style snapshots. In a modern twist, you can add QR codes to the prints that trigger sound files when scanned with a smartphone. Known as cheki in Japan, these retro snapshots have been popular for decades and are an example of how Japan's camera companies have tried to innovate amid big technological and marketplace changes.
Festival-goers seek shade by the FujiFilm Instax trailer during the second and final day of Warped Tour on June 30, 2019 in Atlantic City, New Jersey.Corey Perrine | Getty Images
Aside from the nostalgia of factor, part of the appeal of instant cameras is the tactile nature and immediate gratification of film itself. It's no wonder these throwback devices are a hit with kids and teenagers. It doesn't hurt to have Taylor Swift leading the trend with a branded instax SQUARE SQ6 Taylor Swift Edition from Fujifilm. The company sold 10 million instax units in the year to March 31, 2019. That's more than half of the 19 million units in total digital camera shipments for 2018 logged by the Camera & Imaging Products Association (CIPA).
Nostalgia may be what Fujifilm was thinking when in June it said it would start to sell black-and-white film again, an about-face from its 2018 termination of the business after more than 80 years of sales. In launching Neopan Acros 100II, Fujifilm was responding to calls from photography fans young and old to bring monochrome back despite weak demand overall. It also was a nod to the company's history. Founded in 1934 under a government plan to foster a Japanese film industry, Fujifilm began making motion picture and photographic film, followed by cameras in the 1940s.
But waxing nostalgic for a niche of enthusiasts won't be nearly enough.
While Fujifilm still manufactures film and cameras, including the Instax instant and Fujifilm X camera lines, the recent stats for its imaging solutions business are grim. It made up only $3.6 billion, or 16%, of the company's $22.6 billion in revenues for the year ended March 31, 2019. That's down from 33.5% in 2000, when sales of color film peaked. Though digital camera sales were up last year, photo film accounted for less than 1% of revenue. The lion's share of Fujifilm revenue in the past year came from health care and material solutions, at 43%, and document solutions, through a joint venture Fuji Xerox, at 41%.
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By the time digitization began some 20 years ago, Fujifilm already had decades of experience manufacturing X-ray film and was able to leverage that in transforming into a medical and document services company. It has also acquired a slew of medical businesses in recent years, including a cell culture media firm, a biologics factory, and an endoscopic instruments maker. Meanwhile, some of its most important products today are digital X-ray machines and polarizer protective films for liquid crystal display screens.
"Color photographic film, which used to be our main product, requires very advanced technologies for evenly applying approximately 20 photosensitive layers of different functions into film measuring just 20 microns," says Fujifilm spokeswoman Kana Matsumoto. "Fujifilm has accumulated numerous technologies of the world's highest level in particle formation, nanoparticle distribution, film making and precision coating, and applied them to non-photographic fields to deliver medical X-ray films, printing materials and optical films for display panels."
Sony is alone among major Japanese camera makers continuing to deliver on financials, in part due to its dominant share of the global smartphone image sensor market.Sony
Sony is alone among major camera makers continuing to deliver on financials in part due to its dominant share of the global smartphone image sensor market, according to SMBC Nikko Securities
"The winning technology used to be the lens but has become the imaging sensors, and Sony has been the big winner on this front," says Ryosuke Katsura, senior analyst at SMBC Nikko. "We feel that increasingly higher quality imaging, including copies, scans, photos and other images will likely be available on multifunction devices like smartphones. Standalone cameras will exist for artists and the artistic wealthy."
The short history of U.S.-based GoPro, which successfully went public in 2014 as a hip camera company that was building a new market, has been an ugly one. Its shares today trade between $5 and $6, down from a high near-$90 after its IPO. Its annual revenue has declined from over $1.6 billion in 2014 to under $1.2 billion last year. Camera shipments were down from 6.6 million in 2014 to 4.3 million last year.
Japan has seen its consumer brands fade over the years as its manufacturers take a more B2B-focused approach.
Nikon, one of Japan's oldest camera makers, gets 60% of its business from selling to other companies, not consumers. It produces lithography systems, microscopes and other precision instruments, as well as optical glass. In recent years it has acquired Optos, a retinal imaging company, and invested in Velodyne Lidar, a manufacturer of lidar (light detection and ranging) sensors. In its latest medium-term management plan amid a restructuring drive, it highlighted 3D printers and machine tools as sources of growth. Even though its imaging products business is hurting — in May, it reported a 17.9% drop in revenue and a 27% decrease in operating profit — it's still clinging to cameras.
A booth attendant uses a Nikon Corp. Z7 mirrorless digital camera at the CP+ Camera and Photo Imaging Show on February 28, 2019 in Yokohama, Japan.Tomohiro Ohsumi | Getty Images News | Getty Images
"Consumer and professional cameras are as important to Nikon now as they were in the past," says spokesman Yosuke Toyoda. "Nikon believes that cameras and photography will evolve even further as imaging technologies develop. For example, as the resolution of displays, frame rate and high-definition increases, images will become more realistic, and cameras and photography need to adapt to those changes."
Some analysts believe the digital camera market will shrink faster than previously expected, prompting further changes. The latest facet of this trend is consumers increasingly turning to multi-lens smartphones instead of pricey digital single-lens reflex (DSLR) cameras.
Canon commands a nearly 60% share of the Japan market in DSLRs, according to Tokyo-based BCN, but it has also struggled to minimize the effects of a collapsing camera market. Founded in 1933 as an optical instruments maker, the following year it produced Japan's first 35 mm focal-plane shutter camera, and named it Kwanon after the Buddhist bodhisattva of compassion, later adopting it as the brand Canon. In 2003, it grabbed the top share in the global market for interchangeable lens digital cameras and has maintained it since then while developing office products such as multifunction printers.
Canon has continued to lead digital camera sales, but even it has struggled to minimize the effects of a collapsing market.Canon
In 2016, the company revisited its medical roots when it bought Toshiba Medical Systems, a computed tomography (CT) scanner maker. The move followed acquisitions of Océ, a Dutch high-speed printing company, and Axis, a Swedish maker of networked security cameras. Under an ambitious five-year plan beginning in 2021, Canon expects new businesses will grow 7% to 8% annually and account for up to 35% of sales, up from 23% in 2018; existing ones will have to expand around 2% to 3%. But so far, that's not happening. In the year to March 31, its imaging system business, which accounts for over a quarter of overall revenue, saw sales slump 11% percent. Still, it's not abandoning cameras.
"Canon will continue to release appealing products that feature new technologies and drive the camera market while flexibly responding to market changes and consumer needs," said a Canon spokesman. "Looking towards the future, we are continuing R&D into such areas as the amalgamation of stills and video, cameras capable of capturing ultra-high-resolution 8K video, and cameras that are highly compatible with 5G networks."
Macquarie Group's Thong, who has been covering Canon, Nikon and other Japanese companies since 2002, said that copiers have been a cash cow for Canon, protecting it from industry changes. Other camera makers like Olympus and Konica Minolta have similar B2B bulwarks, allowing them to continue their camera businesses almost as a hobby.
But for Nikon, Thong said the evaporating camera market is a bigger threat, it part because it failed to embrace video early on. That was a misstep in a rapidly evolving industry that's seeing fewer and fewer standalone cameras.
VIDEO4:3304:33Watch CNBC's Todd Haselton's iPhone XR reviewSquawk Box
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49de9a5ee5914c64aa5af9831afaa5db | https://www.cnbc.com/2019/07/26/swedish-billionaire-protectionism-leading-world-in-wrong-direction.html | Protectionism is leading the world in completely the wrong direction, Swedish billionaire says | Protectionism is leading the world in completely the wrong direction, Swedish billionaire says
VIDEO3:0903:09Protectionism leading the world in the wrong direction, SEB chair saysStreet Signs Europe
The U.S.-China trade conflict is leading the world toward a "very bad situation," and Europe should invest in technological innovation to prepare for further division, Swedish billionaire Marcus Wallenberg said Friday.
Speaking at the Salzburg Summit in Austria, Wallenberg — a fifth-generation member of the Wallenberg dynasty — said the Sino-U.S. trade war was "extremely unfortunate."
"It's obvious that the big powers, China and the United States, look upon the rulebook in a very different way," he told CNBC's Geoff Cutmore at the event.
"All history tells us is that protectionism will lead nowhere and usually into a very, very bad situation, and unfortunately I think what we're seeing right now is actually going completely in the wrong direction."
The Wallenberg family's business empire includes holdings in AstraZeneca, Ericsson, Saab and Nasdaq, and is worth 250 billion euros ($278 billion), according to the Financial Times.
Marcus Wallenberg himself is the chair of private banking group SEB, as well as being the chair of asset manager FAM and the director of pharmaceutical giant AstraZeneca's board.
He told CNBC Friday that the delay in finding a resolution to the trade conflict was "not only one side's fault."
"The trade relationship between the U.S. and China is immensely important for both sides, so hopefully they will come to a position where they actually really try to save it," Wallenberg said.
What was worrisome, he added, was that even though both nations were trying to solve the situation, big questions remained around the future of their trading relationship.
"China is a country that has lived in their thought process and their policies for decades, (whereas) the U.S. and Western Europe turn around their political situation every four or five years," he said. "It's a very different game that we're seeing."
Much of the uncertainty also came from new technologies and how they would impact the way we do business, Wallenberger told CNBC.
"Are we going to see a bifurcated world in terms of technology going forward? Some people say we're already there," he said.
Wallenberger noted that his family – which is a large owner of Swedish telecommunications company Ericsson – had learned that attempting to have several different standards on telecommunications was not economical.
"We brought telecoms to the point where it is today because we've been able to agree on the basis for the technology, (but) are you going to see that in the future? (That's a) big question," he said.
The phenomenon of the internet becoming divided to cater for different regions — dubbed the "splinternet" — has been flagged by some experts as a real possibility in the future.
But Wallenberger said if a rift in the tech sector appeared, he was unsure which side Europe would stand on.
"If you look at robotics, if you look at AI, if you look at all these new technologies we'll be using in the future we will completely depend on secure communication, so it's a real issue," he said. "It's quite evident that European governments have been trying to balance between (China and the U.S.) and not side with one of these opponents. I think it's unreasonable at this point in time to think that we will know which side Europe will go on."
He added that the potential of a technological divide should give Europe "further incentive to really invest into the future so we can stand more on our own legs."
"We cannot (ignore) the fact that if you look at Germany or other major economic powers in Europe, we're very dependent on the Chinese market as well as the American market," he said.
VIDEO2:2002:20SEB chair: Europe needs investment to stay competitive with US, ChinaStreet Signs Europe
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cf0c701fbf56b03f6466ee51238fa2d0 | https://www.cnbc.com/2019/07/26/the-irs-is-going-after-some-cryptocurrency-holders-for-back-taxes.html?__source=OTS%7Cfinance%7Cinline%7Cstory%7C&par=OTS&doc=106799813 | The IRS is going after some cryptocurrency holders for back taxes | The IRS is going after some cryptocurrency holders for back taxes
The Internal Revenue Service's offices in Washington, D.C.Adam Jeffery | CNBC
If you've been trading or mining cryptocurrency, the Internal Revenue Service is about to come knocking.
The IRS on Friday announced that it's sending letters to more than 10,000 taxpayers with virtual currency transactions who have potentially failed to report income and pay taxes owed.
Filers who did not properly report their crypto transactions to the IRS can also expect a letter.
"Taxpayers should take these letters very seriously by reviewing their tax filings and when appropriate, amend past returns and pay back taxes, interest and penalties," said IRS commissioner Charles Rettig in a statement.
Here's the lowdown on the tax implications of cryptocurrency.
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If you sold your cryptocurrency, you need to report the transaction. If you wound up with a capital gain, you must pay the appropriate tax.
Cryptocurrency you receive from an employer is subject to federal income tax withholding, FICA tax and federal unemployment taxes, just like wages. These should be reported on your Form W-2, the IRS said.
Meanwhile, independent contractors who are paid in virtual currency must pay self-employment taxes.
Finally, if you're mining cryptocurrency, the fair market value of it as of the day of receipt is included in your gross income, according to IRS guidance.
Failure to properly report these transactions can be costly: You may be audited and held liable for penalties and interest.
In the most extreme cases, you could face prison time and a fine of up to $250,000.
S3studio | Getty Images
Reporting taxes is easier said than done.
That's because to calculate the taxes you owe, you'll need your cost basis — that is, the original value of the asset for tax purposes. This information can be hard to find.
"If you trade out of positions, it's going to be hard to track that," said Tyrone Ross, an investment advisor in Woodbridge, New Jersey, who specializes in cryptocurrency.
"Many clients don't know their cost basis," he said.
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If you need to hunt down the cost basis of some long-held stocks and your brokerage firm doesn't have that information, you could dig up historical prices and dividend payments to figure it out.
The process is less straightforward with cryptocurrency, which any investor can trade on multiple platforms — and the exchange price can differ across platforms.
Indeed, some providers, such as Lumina and Bitcoin.Tax, have stepped up to aggregate crypto transactions and help calculate cost basis.
"What you're starting to see now is that the government has caught on," said Ross. "They realize this isn't going away and people won't be able to skirt the system anymore."
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9517dda1faab966b446d02aec2906eb9 | https://www.cnbc.com/2019/07/26/us-gdp-consumers-vs-business-what-really-matters.html | Strong consumer spending vs. weak business investment: What really matters for the US economy | Strong consumer spending vs. weak business investment: What really matters for the US economy
At times of market turbulence, investors tend to flee to assets expected to either retain or increase in value — such as gold, the Japanese yen and government bonds.Drew Angerer | Getty Images
U.S. consumer spending, the biggest part of the economy, saved the day for the record-long expansion, but a big decline in business investments raised concerns about how much longer it can last.
Personal consumption expenditures rose 4.3% in the second quarter, the best performance in six quarters, whereas gross private domestic investment tumbled 5.5%, the worst since the fourth quarter in 2015 as spending on structures slumped 10.6%. The drop in business spending chopped a full percentage point off of the final GDP number.
"The fact the investment looks so weak reflects that global forces are creating challenges for business investment and those forces mostly owe to the trade war. It has weakened the trajectory for here in the U.S.," said Michelle Meyer, head of U.S. economics at Bank of America. "The consumer is much more insulated from those risks."
The current economic expansion keeps trucking along, officially marking the longest in U.S. history. GDP rose 2.1% in the second quarter, down from 3.1% in the first quarter but slightly higher than the 2% estimates. However, with the boost from 2018 tax cuts fading away and trade tensions weighing on businesses, the weakness in business spending has economists worried how long the consumer can keep carrying the economy.
"Soft business investment in the second quarter is a concern. Some of that was tied to a downturn in investment in energy as commodity prices fell. It could also be that businesses are holding back on capital spending because of trade tensions and associated uncertainty," PNC Chief Economist Gus Faucher said.
"Consumer spending won't continue to grow at a 4% pace, but solid job growth and rising wages will allow households to increase their spending through the rest of this year and into 2020," Faucher added.
Consumer spending accounts for about two-thirds of the U.S. economy, and the jump in consumption helped propel GDP in the April-to-June period, holding things up in light of a global slowdown and the ongoing U.S.-China trade war. However, some warned that the spike in consumer spending might not have any lasting power.
"Personal consumption here is going to be quite noisy. But what you see was just a one-time release in pent-up demand. That's not going to be something that's replicable in the next quarter or quarter after," said Joseph Brusuelas, chief economist at RSM.
"Gross private investment is clearly the most important over the long run because that results in productivity and productivity underscores living standards. So if we're not making sufficient investment in the economy, overall living standards will decline over the medium and long term," Brusuelas said.
The tit-for-tat trade dispute between the U.S. and China continues to weigh on business sentiment as more corporate executives are voicing concerns in this earnings season. Trade bellwethers including Caterpillar and Apple have highlighted tariffs and slower demand in China as major headwinds to their sales.
Still, some believe there are signs that business overall is in a healthy state and the concerns about slowing business investments could be overblown.
"This is a 2% growth economy, not a 1% subpar economy. Companies are ordering a record number of equipment. The economy is firing up in all cylinders," said Chris Rupkey, chief financial economist at MUFG. He pointed to non-defense capital goods orders excluding aircraft, which surged 1.9% in June.
"At this stage you have to realize business spending is not something that continues at a high rate. It's 10 years into the expansion. The Fed is worrying needlessly about a slowdown in business," Rupkey said.
Federal Reserve officials have signaled their openness to cutting rates to sustain the expansion, citing uncertainties around trade. Investors are betting the central bank will deliver a quarter percentage point rate cut at their policy meeting next week. The market is pointing to a 100% chance of a cut next week and about a 53% probability of two more reductions before the end of 2019, according to the CME FedWatch tool.
—CNBC's Thomas Franck and Jeff Cox contributed reporting.
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31fa680ba4f46f4c67ca6b284c6c7597 | https://www.cnbc.com/2019/07/29/analyst-calls-of-the-day-starbucks-apple-ups-coca-cola-more.html | Here are the biggest analyst calls of the day: Starbucks, Apple, UPS, Coca-Cola & more | Here are the biggest analyst calls of the day: Starbucks, Apple, UPS, Coca-Cola & more
Starbucks President and Chief Executive Officer Kevin Johnson is pictured at the Annual Meeting of Shareholders in Seattle, Washington on March 20, 2019.Jason Redmond | AFP | Getty Images
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Here are the biggest calls on Wall Street on Monday:
J.P. Morgan downgraded Starbucks mainly on valuation.
"In a few recent cross-sector industry notes, we suggested investors "add lower" to SBUX as we believed peaking 3Q19 comps (based on unusually one-off-driven, easy year ago comparisons) would allow an easing in the share price. In fact, the opposite occurred with post-EPS performance propelling the stock up 9% – its biggest one-day gain since November 2, 2018 – and to levels well above even our $91 December 2020 price target."
Read more about this call here.
Atlantic Equities said in its initiation that Coke and Pepsi have "attractive" and "sustainable" growth.
"Global consumer companies are enjoying a return to form in 2019 helped by a positive global consumer backdrop, rational pricing and easing commodity cost inflation. However, another element is easy comps as 2019 results cycle against 2017/2018's challenges when the sector's core fundamentals came under intense scrutiny. We believe that such issues have not been sufficiently addressed and as comps begin to toughen, sentiment may likely shift. Only those companies that can offer attractive and sustainable growth will merit premium valuations. We see The Coca-Cola Company and PepsiCo Inc as two such names and we are launching coverage on both with Overweight ratings."
"The call here is really about the competitive intrusion of the third-party delivery aggregators, which we expect to increase in magnitude over the next two-to-three-year period, before it potentially levels off or gets better. Simply put, we believe the aggregators are a problem for DPZ because they enable a material increase in delivery supply availability of additional restaurant menu types outside of QSR Pizza, which, in turn, creates an increase in delivery choices for DPZ's existing customer base."
Barclays said the Sprint and T-Mobile deal is unlikely to create "major upside" for Dish equity holders.
"In the case of Dish, the present stock price implicitly assigns a $20bn value to a zero revenue wireless business, roughly a third of Sprint which has 42mm retail subs and a premium deal valuation. Also, Dish's capital structure is likely to undergo major changes to fund the venture which is likely to be dilutive for existing equity holders. Therefore, while the deal is a strategic positive and takes away downside risk, it is unlikely to create major upside for Dish equity holders. Consequently, we downgrade the stock to UW."
Stifel said in its downgrade that UPS's long term initiatives will take "extra investment" in 2020.
"Now that UPS shares have run through our target price, we have to decide whether our earnings estimates are too low, our valuation is too conservative, or both. Given the company spoke on its earnings call of a challenging macro environment heading into year-end and that we believe its long-term initiatives will likely require extra investment in 2020 that could limit margin expansion and earnings growth next year, we are stepping to the sidelines with respect to the stock."
Read more about this call here.
Evercore said it was bullish on the Dutch semiconductor company into its earnings report next week.
"Ahead of NXP's earnings next week we are upgrading the stock to Outperform and increasing our price target to $125 (from $110). We expect the company's report to likely be good enough for investors given the current demand backdrop, with a strong self-help story and a solid pipeline of Automotive design wins driving upside to estimates longer-term."
Citi raised its price target on Chipotle after the company's strong earnings report.
"Chipotle reported better-than-expected SSS growth and raised comp guidance for 2019. Traffic also accelerated sequentially, and digital sales increased +99% in the quarter and now represent ~18% of sales (recall that digital sales are also margin accretive to Chipotle). Although the company will start lapping tougher SSS compares in the next few quarters, we think that there are still levers management can pull to successfully maintain momentum, and we're encouraged by today's results."
Guggenheim said it sees headwinds for the company after management lowered its 2019 guidance.
"We see management's lowered 2019 guidance as unwelcome ahead of what we expect will be a challenging 2020 for PYPL – headwinds include the eBay separation, Brexit, and regulatory changes in Europe (PSD2/SCA). We expect these factors will cause a deceleration in TPV and revenue growth next year (we're below consensus); new partnerships are unlikely to be enough to fully offset these significant headwinds in 2020. Net: core (ex-investment related gains) non-GAAP EPS will likely slow materially. We see the departures of key executives for PYPL (Braintree, Venmo) as further negatives."
Macquarie said it thinks there will be an "overhang" on the company's stock due to union issues and customer performance metrics amongst other things.
"We think there is likely to be an overhang on American's stock, given the ongoing mechanics union slowdown and lagging operational and customer performance metrics such as on-time performance, mishandled bags, and customer complaints that persist. We also think that we need more clarity on what percentage of American's domestic performance (its strongest performing entity, representing 60% of mainline capacity) can be explained by Southwest not being able to be as aggressive due to constraints on capacity from their own MAX groundings."
RBC named the biotech company a top pick and said it liked the new leadership at the company and that a number of previously noted overhangs are now out of the way.
"We are upgrading GILD to Top Pick, given our high conviction that with new leadership and many overhangs out of the way, shares will begin to better reflect the value of future cash flows from their marketed products and pipeline, which we believe is worth $91. We see limited downside risk and a compelling opportunity to build a long-term position."
Bank of America said it saw a continually improving macro environment for the beer maker and that the shares provide investors with an opportunity for growth at a reasonable valuation.
"In our upgrade to Neutral from April, we flagged a better Macro environment and an improving narrative on the shares, but remained concerned on weak earnings trends.... As investors scramble to find big and liquid Consumer stocks that offer some growth at a reasonable valuation, we see ABI as the best positioned to continue to outperform the Consumer Staples sector."
Raymond James said the insurance company is still a "great" asset but said the near-term sales outlook in Japan will be "challenged."
"While 2Q19 results were ahead of target and suggest positive earnings momentum, the near-term sales outlook in Japan will be challenged as one of its strategic partners works through compliance issues. Japan Post sells a substantial amount of insurance in Japan from a range of different companies through its 20,000 postal outlets and allegations of agent misconduct have emerged that could limit new sales through the end of the year. Japan Post accounted for ~25% of Aflac Japan's third sector sales in 2018."
Goldman said in its initiation of the restaurant sector that its buy rated companies are "leveraging technology" amongst other things.
"We are buyers of stocks that: (1) best capture a strong macro, (2) are better insulated from rising costs, (3) are leveraging technology, and (4) are exposed to above average benefits from third party delivery. We marry these factors with valuation (based on relative growth, franchise mix and market multiples) and positioning to arrive at our top ideas. Buy: CMG (on CL), MCD, SBUX, SHAK and WING."
Wells said the multinational technology company has an "attractive risk/reward" ratio due to the company's deep portfolio.
"While we see more downside risk than upside potential to estimates near term, e.g., toughening comparisons, the pass-through of deflationary component costs, and a maturing Windows 10 commercial PC upgrade cycle, we view Dell as presenting a long-term attractive risk / reward ratio given the company's broad-based portfolio / software-to-hardware depth favorably positioning Dell to capitalize on the long-term architectural shift to software-defined hybrid multicloud. Dell's portfolio also allows the company to participate in a multiyear core-to-edge to digital transformation."
UBS said that in conversations with investors, it had "low expectations" for Apple's upcoming earnings report.
"Our conversations with investors suggest low expectations for the Q and Fall iPhone builds. UBS Evidence Lab data meanwhile supports general malaise in sentiment with only 19% "bullish" (down from 30% in April) and China demand/tariffs and services growth are predictably the top investor issues."
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e74d68ad8b4aab4e77c8703e794e5b99 | https://www.cnbc.com/2019/07/29/buybacks-companies-increasingly-using-debt-to-repurchase-stocks.html | Companies are ramping up share buybacks, and they're increasingly using debt to do so | Companies are ramping up share buybacks, and they're increasingly using debt to do so
U.S. companies are on pace to break another record for share repurchases in 2019, using a combination of cash and debt to push the total to close to $1 trillion.
For the first time since the financial crisis, companies have given back more to shareholders than they are making in cash net of capital expenditures and interest payments, or free cash flow, according to Goldman Sachs calculations.
The level of buybacks to free cash flow hit 104% for the 12 months ending in the first quarter of 2019, the first time that number has topped 100% during the economic recovery that started in 2009. In 2017, the level was 82%.
VIDEO5:1405:14Getting in on the buyback boomETF Edge
Goldman projects buybacks for S&P 500 companies to total $940 billion, a 13% increase over the previous year and a new high for a number that has continued to increase through much of the post-financial crisis period. Total buyback executions among all companies this year were up 26% through mid-July.
From a market perspective, investors have been moving to companies with more debt as they prepare for an expected interest rate cut later this week.
The buyback increase compares with a projected 8% gain in capital expenditures and 9% for research and development this year.
The rise in buybacks has had a twin effect on corporate balance sheets, both drawing down cash and increasing leverage. It also represents a more-of-the-same trend that has come despite the $1.5 trillion tax cut passed in late 2017. The record cut had spurred hopes that companies would eschew the buyback formula that has helped generate the longest bull market run in Wall Street history and instead lead to more investment in equipment and personnel.
"Although we expect growth in capex, R&D, and cash M&A, we expect companies will continue to increase cash return to shareholders as they have in recent years," David Kostin, chief U.S. equity strategist at Goldman, said in a report for clients.
Over the past 12 months, nonfinancial companies have drained $272 billion in cash as part of the push to return still more money to shareholders. That represents a 15% decline and is the steepest drop since at least 1980, Kostin said.
At the same time, corporate leverage continues to rise as gross debt outstanding has climbed 8% over the past 12 months. That has come during a rough time for corporate profits, with S&P 500 earnings tracking for a 2.6% second-quarter decline, according to FactSet.
"Unless earnings growth accelerates materially, companies will likely continue to fund spending by drawing down cash balances and increasing leverage," Kostin wrote.
As the Federal Reserve had been raising rates since 2015, Goldman touted companies with strong balance sheets over those with heavy debt-to-earnings levels. That's a trade that worked well from the start of 2017 until the end of 2018, with former returning 21% vs. a 3% loss for the latter, but that's reversed lately.
But with the Fed about to cut, the trend has reversed. Since the start of June, weaker balance sheet companies have seen a return of 12% vs. 8% for their counterparts in anticipation that the cost of borrowing will get even cheaper.
At a company level, Goldman's list of weak balance sheet companies include AT&T, GM, Automatic Data Processing, Kraft Heinz and Delta Air Lines. Some of the bigger names on the strong balance sheet side include Alphabet, Costco, Mastercard, Facebook and Intuitive Surgical.
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40a3588b13df0ce0e12ec77cf0faf29c | https://www.cnbc.com/2019/07/29/heineken-half-year-profit-misses-on-higher-costs.html | Heineken half-year profit misses on higher costs | Heineken half-year profit misses on higher costs
An employee checks a Heineken beer bottle on a packaging conveyor at the Heineken NV brewery in Zoeterwoude, Netherlands.Jasper Juinen | Bloomberg | Getty Images
Heineken, the world's second-largest brewer, missed estimates for first-half profit on Monday, as rising input costs offset higher beer sales.
The Dutch maker of Heineken, Europe's top-selling lager, maintained its full-year forecast that operating profit before one-offs would increase by a mid-single-digit percentage.
For the first half of the year, operating profit grew by just 0.3% on a like-for-like basis to 1.78 billion euros ($1.98 billion), missing analysts' estimate of 1.92 billion euros, according to IBES data from Refinitiv.
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a17195cf6e12c1ff7fb5d994f97f138a | https://www.cnbc.com/2019/07/29/if-the-fed-cuts-rates-this-week-it-could-widen-a-growing-rift-within-the-central-bank.html | If the Fed cuts rates this week, it could widen a growing rift within the central bank | If the Fed cuts rates this week, it could widen a growing rift within the central bank
Esther George, John Williams and Jerome Powell, at Jackson Hole, Wyoming, August 24, 2018.David A. Grogan | CNBC
There's a good chance one or two, and maybe even three, Fed officials could disagree with the central bank's decision to cut rates Wednesday, and that could make it more difficult for markets to glean the course of future Fed policy.
The Fed's policy arm, the Federal Open Market Committee is widely expected to vote in favor of a 25 basis point rate cut Wednesday, while a minority of economists say it's possible the Fed could cut 50 basis points, in order to get a bigger response out of the economy. The fed funds futures market reflects a 73% probability of a quarter point cut, and 27% of a half point move.
The core of the FOMC is made up of Fed Chair Jerome Powell and Vice Chair Richard Clarida and New York Fed President John Williams, who serve as his wingmen. The core of former Chair Janet Yellen's included former Vice Chair Stanley Fischer and former New York Fed President Bill Dudley.
VIDEO2:5702:57'I'm worried' about market bulls counting too much on Fed: CalvasinaClosing Bell
"I would guess some members of the FOMC feel like they've been painted into a corner here because of the very aggressive pricing in the market," said Ethan Harris, head of global economics research at Bank of America Merrill Lynch. "You've already had [Boston Fed President Eric] Rosengren come out and say he doesn't think a rate hike is justified. Most members of the committee are willing to consider rate cuts but the impression is the big three seem to have put a bulls eye on the July meeting, and I'm not sure that's shared by the whole committee."
Both Kansas City Fed President Esther George and Boston's Rosengren have spoken against cutting rates, and a third possible dissenter, St. Louis James Bullard could disagree with the committee if it opts for a larger rate cut of 50 percentage points, over the 25 percentage point cut he would like to see. In late June, he said a 50 basis point move would be overdone.
"The big debate there is going to be between the core of the committee and others, like Rosengren. It's the core of the committee that I think would like to act aggressively. It's possible you get three dissents," said Rick Rieder, BlackRock chief investment officer, global fixed income. "The size of the dissents we get are going to be influential as to how the markets are going to price. If you get a good deal of dissents, the markets are going to discount future moves."
Rieder said he puts odds of about 40% on a half percentage point cut. "If you get a good deal of dissents, the markets are going to discount future moves. Partly that is why I think there is a better than 60% chance" for a quarter point cut.
Scott Minerd, Guggenheim global chief investment officer, said Powell will try to rein in the dissent. "I think if you had two or three dissenters, it would tell you that there's a bigger uncertainty around the path of future rates than what the market is currently anticipating," he said. He added that Powell, who is not an economist, will rely on Clarida and Williams to help convince other Fed officials on why the cuts are needed.
"I don't think all of them are on board for 25, but I think there will be a lot of pressure to get them on board. There will be people who will try to get them to move 50, and they'll say 'let's meet in the middle and try to compromise and show unity," he said.
Williams surprised markets earlier this month when he said in a speech before the annual meeting of the Central Bank Research Association that "it's better to take preventative measures than to wait for disaster to unfold." That and other comments caused a shift in market views to expect a greater probability of the the more aggressive 50 basis point rate cut. But the Fed later said that Williams was not discussing current policy when he made that comment.
The next day Boston's Rosengren appeared on CNBC and said he didn't see a need to trim the federal funds target rate range, now between 2.25 and 2.5%.
"So, given that the economy is quite strong, given that I do think that inflation is going to be very close to 2%, and given that the growth in the economy is satisfactory, I think that's an environment where you don't have to take a lot of action," Rosengren said.
VIDEO6:0206:02Capex 'deteriorating,' expect 50 basis-point Fed cut: Morgan Stanley's AhyaClosing Bell
George, speaking to the Wall Street Journal, said this month that she was prepared to be flexible but didn't see reasons for a rate cut.
BofA's Harris said he does not see a big group of dissenters. "I don't think the committee as a group wants to present themselves as fractured," he said. "What the Fed is doing is unprecedented. There's no historical precedent...There's no example that with still above trend growth and still above trend labor growth has the Fed eased in the middle of an expansion. This is a six sigma event. If there were more clear evidence that the trade war was hurting, this would only be a small departure from normal but actually the data in the last month has improved."
Fed chief Powell has spelled out that the Fed is willing to ease if necessary because of low inflation, slowing global growth and the potential negative impact of trade wars. He also said the Fed would act as appropriate to ensure the continuation of the economic expansion, a departure from its normal stated mission.
Morgan Stanley economists expect a half percentage point cut, and they note that dissents are not uncommon. Since Greenspan was named Fed chief in 1987, there have been one or more dissenters at 37% of FOMC meetings. they noted.
"What's more, in the last major easing cycle (2007-08), someone dissented at almost every meeting, and usually for tighter policy," they said in a note. In that cycle, the Fed took the fed funds rate range to zero to 0.25%, the lowest in history. There was a seven year gap before its next rate move, and in 2015, the Fed raised rates, and did it eight more times, the final one in December.
But when it came to multiple dissenters, only two Fed officials voted against the majority 6% of the time, and three did it at just 2% of the meetings. The Morgan Stanley economists said dissenting parties were mostly Fed presidents when policy was tightening, based on research by the St. Louis Fed.
"Based on these conclusions alone, one could suggest that Fed governors, typically favoring easier policy, did not dissent since 2005 because they got their way. This raises the prospect of the Fed governors— all of whom we believe will vote for a 50bp cut on July 31 — getting their way again, at the expense of one or more FRB presidential dissents," said the Morgan Stanley economists, in a note.
Correction: This story was revised to correct that the 73% probability was for a rate cut.
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f1046c36745d98ef025580795debeacf | https://www.cnbc.com/2019/07/29/ryanair-earnings-q2-2019.html | Ryanair expects average fares to fall 6% in key summer season | Ryanair expects average fares to fall 6% in key summer season
Ryanair planes on the tarmac in Stansted, U.K.Simon Dawson | Bloomberg | Getty Images
Ryanair Holdings Plc on Monday warned fares would fall by 6% in its key summer season this year, in part due to overcapacity in Germany and Brexit fears in the United Kingdom, but kept its profit target for the year.
Shares of Europe's largest low-cost carrier have almost halved in value in two years as the company grappled with overcapacity in Europe, Britain's plans to leave the European Union and, most recently, delays in delivery of the Boeing 737 MAX.
Ryanair earlier this month halved its growth targets for next year due to delays in deliveries of the 737 MAX. On Monday, it said it expected the first deliveries in January at the earliest.
The airline reported a profit after tax of 243 million euros ($270.36 million) for the three months to June 30, down from 309 million a year earlier. A poll of analysts published by Ryanair ahead of the results had forecast a profit of 232 million euros.
It retained its profit forecast for the year to March 31, 2020 of between 750 million euros and 950 million euros, compared to a forecast of 832 million euros in the analyst poll.
Ryanair said its fares in the three months to the end of June declined 6% from a year earlier and said it expected a similar fall for the remainder of the summer. Average fares for the year to end-March 2020 will be towards the lower end of its guidance range of -2% to +1%, it added.
Ryanair's shares closed on Friday at 10.02 euros, almost half their peak of 19.39 euros hit two years ago.
Ryanair is one of Boeing's biggest customers and was due to have 58 737 MAX jets in time for its 2020 summer season. But it now expects to receive just 30 by then in that period.
Ryanair's chief financial officer, Neil Sorohan, said the timing of plans by its pilots in the United Kingdom and Ireland to ballot for possible industrial action in August was "unusual", given concerns around the MAX and Brexit, but said the airline was open to talks.
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c9f5ee9d22512e0fb669f588a3324030 | https://www.cnbc.com/2019/07/29/spains-bankia-second-quarter-profit-plunges.html | Spain's Bankia second-quarter profit plunges on lower income from trading, lending | Spain's Bankia second-quarter profit plunges on lower income from trading, lending
Denis Doyle | Getty Images
Spain's state-owned lender Bankia on Monday posted a 31.6% fall in its second-quarter net profit from a year earlier due to lower trading income and ongoing pressure on lending income.
Net profit for the quarter came in at 195 million euros ($217 million), above an average in a Reuters poll of 185 million euros. Though net interest income remained under pressure against the same quarter last year, it showed some improvement against the previous quarter, the bank said.
Net interest income was 516 million euros, down 1% from a year earlier but 2.9% higher than the previous quarter. Analysts had forecast a net interest income of 512 million euros.
As with other European banks, Spanish lenders are struggling to lift earnings from loans as rates hold at ultra-low levels.
To offset the negative effect from increasing competition on financial margins, Bankia is shifting its focus from its mostly-mortgage-loan book towards a more profitable consumer and enterprise business.
Shares in Bankia fell 4.7% on Friday ahead of the results, after Caixabank and Sabadell fell more than 6.5% each following their downwards revision in income forecasts for 2019.
So far this year, Bankia stock has fallen close to 28%, making further divestments by the Spanish state more complicated.
The state has until 2021 to offload the 61% stake it holds in Bankia after pumping 22.4 billion euros ($25 billion) into a rescue package in 2012 at the height of the financial crisis.
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fc66b65e13a4aa02edf43d616f1fe0de | https://www.cnbc.com/2019/07/30/apple-earnings-q3-2019.html | Apple rises on earnings beat | Apple rises on earnings beat
VIDEO3:4303:43Apple beat on earnings and revenue—What 4 experts are watching nowTrading Nation
Apple reported earnings for its June quarter on Tuesday that were above expectations, and the company's revenue returned to growth after two straight down quarters.
The stock rose more than 4% in after-hours trading.
Apple's guidance was strong and beat analyst expectations, suggesting that demand for Apple products is stabilizing headed into the critical second half of the year. Apple also declared a cash dividend of $0.77 per share.
Here's how the company did versus what analysts were expecting:
EPS: $2.18 vs. $2.10 estimated by Refinitiv consensus estimates.Revenue: $53.8 billion vs. $53.39B estimated by Refinitiv consensus estimates.Q4 revenue guidance: $61 billion to $64 billion versus $60.98 billion estimate by Refinitiv consensus estimates.iPhone revenue: $25.99 billion vs. $26.31 billion estimated by FactSet.Services revenue: $11.46 billion vs. $11.61 billion estimated by FactSet.
"We're very excited to report a return to growth for the quarter, and it's a record revenue for Q3 as well, best we've ever had," Apple CEO Tim Cook told CNBC's Josh Lipton.
Apple's revenue was up 1% from the year-ago quarter. Earnings per share were down 7%.
"Great services quarter, unbelievable wearables quarter, significant progress on iPhone, and off-the-charts significant progress on China, compared to where we were the previous quarter," Cook continued.
Apple said that it had spent over $17 billion on share buybacks of almost 88 million Apple shares, and had also paid out $3.6 billion in dividends and equivalents during the quarter.
"The highlight of this release and focus of investors in our opinion will be the robust September guidance for total revenue of between $61 billion and $64 billion vs. the Street's $60.9 billion estimate," Wedbush analyst Dan Ives said in a note.
Apple's iPhone revenue was lower than what analysts expected, and fell 12% from the same quarter last year. Weakness in Apple's flagship product was partially offset by strength in the Mac and Wearables divisions.
The iPhone accounted for 48.3% of Apple's overall revenue, the first time that it hasn't contributed over half of Apple's sales since 2012.
Apple's wearables business includes Apple Watch, AirPods, and Beats headphones. In a statement, Apple CFO Luca Maestri said the product category was "accelerating" with growth over 50%.
Services revenue, which includes subscriptions, App Store fees, and other online services, grew by 13%, slightly under analyst expectations. Apple CEO Tim Cook told CNBC that after factoring out payments from a lawsuit and taking foreign-exchange rates into account, that its services product category would have grown by 18%.
Services margins were over 64%, contributing to Apple's bottom line. The total services sales were an all-time record, Cook said on a conference call with analysts.
"Our strong services performance was broad-based," Cook said in a call with analysts. "We set new all-time records for AppleCare, music, cloud services, and our App Store business, and we achieved a new third quarter revenue record for the App Store."
If you add the wearables and services product categories together, they are together approaching the size of a Fortune 50 company, Cook said, underscoring that Apple's non-iPhone product lines are still massive, even if they are not as big as the iPhone.
The installed base of iPhones hit an all-time high, Apple said, although it did not provide an updated number. In January, Apple said that there were 900 million iPhones in use.
Apple also outperformed expectations in China, which had been one of the main factors in disappointing quarters earlier this year. Cook said in an interview with CNBC that a Chinese VAT tax cut had been a big help, and that he saw no signs of a nationalistic boycott of Apple products in China.
"The VAT reduced from 16% to 13%, that's clearly a big help. We took some price action, that's a big help. We introduced trade-in and financing, that's a big help. The more subjective thing is, when the countries are meeting and talking, that's better than not," Cook told CNBC.
Apple said that it had $9.61 billion in sales in its Greater China category, which also includes Taiwan and Hong Kong. In the previous quarter, Apple's Greater China sales declined 22%, China sales were only down 4%. Cook said that Apple returned to growth in mainland China.
Apple bought Intel's modem division earlier this month for $1 billion, an unusually large buy for the company.
"This is our second largest acquisition by dollars and our largest ever in terms of staff," Cook said.
Modems are semiconductor components used to connect to cellular networks like those run by Verizon and AT&T. Earlier this year, Apple settled a long-standing legal dispute with Qualcomm and signed a deal to buy smartphone components, including modems, from Qualcomm for several years; Apple had previously been working with Intel to try and replace Qualcomm as a supplier.
Cook explained the purchase was strategic, and that Apple has a long-term strategy of "owning and controlling the primary technologies behind the products that we make."
VIDEO17:3317:33What Foxconn does, and what it's really up to in WisconsinTech
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bf2a90848d4182e93c7188e18f23fa79 | https://www.cnbc.com/2019/07/30/bp-ceo-warns-a-corbyn-led-uk-government-would-be-quite-alarming.html | BP CEO warns a Corbyn-led UK government would be 'quite alarming' | BP CEO warns a Corbyn-led UK government would be 'quite alarming'
VIDEO2:4902:49A Corbyn government that fulfills its pledges would be 'quite alarming,' BP CEO saysSquawk Box Europe
BP Chief Executive Bob Dudley is concerned about the prospect of U.K. opposition leader Jeremy Corbyn becoming prime minister.
"A Jeremy Corbyn government, of a kind that does what it says it might do, I think is quite alarming for everybody," BP CEO Bob Dudley told CNBC's "Squawk Box Europe" on Tuesday.
"I think when you talk about nationalizing assets in companies, and particularly think about the bond holders who are global, I mean everyone is sitting up and saying: 'Really?'" Dudley said.
The Labour party did not respond to a request for comment when contacted by CNBC Tuesday morning.
Corbyn, the leftist leader of the Labour Party since 2015, reportedly said Sunday that he is "absolutely" willing to go up against newly-elected Prime Minister Boris Johnson if a general election is called over the coming months.
Britain is not due to hold a nationwide vote until 2022.
But, a wafer-thin parliamentary majority for the ruling Conservative Party — with less than 100 days until the world's fifth-largest economy is due to leave the European Union — has led some external observers to believe an election could be called before the October 31 Brexit deadline.
Conservative Party leader Boris Johnson, who officially entered Downing Street last week, has vowed to deliver Brexit by that date "come what may" — even if that means leaving without a deal in place.
In 2017, Labour campaigned on an election manifesto to bring rail companies, energy supply networks, water systems and mail delivery into public ownership.
Labour proposed its nationalization program would be led by a "Public Ownership Unit" within the finance ministry.
The party has said it would compensate shareholders using bonds. It describes that exchange as cost neutral to the public purse because it trades a liability (the bond) for a profitable asset (the companies). It has not specified the nature of these bonds.
Labour Party leader Jeremy Corbyn addresses Labour Party members and supporters on 25 July, 2019 in London, England.WIktor Szymanowicz | NurPhoto | Getty Images
Corbyn described the manifesto as a throwback to Britain's socialist experiences of the 1970s.
"When you take the extreme statements, of course the business community would worry," Dudley said.
When asked whether BP would consider moving its headquarters if a Corbyn-led Labour government was elected, Dudley replied: "We are a great British company. We have no plans to redomicile whatsoever."
The pound, which has been tied to the years-long process of negotiating Britain's exit from the bloc, tumbled toward $1.21 Tuesday afternoon. The U.K. currency also hit a two-and-a-half year low against the Japanese yen.
— Reuters contributed to this report.
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420083f662ade9ff66ddf46aec42cd21 | https://www.cnbc.com/2019/07/30/chinas-bytedance-is-developing-a-smartphone.html | China's ByteDance is developing a smartphone | China's ByteDance is developing a smartphone
ByteDance CEO and founder Zhang Yiming.Gilles Sabrie | Bloomberg | Getty Images
Chinese social media firm ByteDance said on Monday it is developing a smartphone, following a deal it made with device maker Smartisan Technology.
The plans come as the tech firm expands into new sectors beyond video and news apps.
In a statement, a ByteDance spokeswoman said a smartphone had been part of Smartisan's development plans before the deal it made with ByteDance.
"The product was a continuation of earlier Smartisan plans, aiming to satisfy the needs of the old Smartisan user base," the spokeswoman added.
On Monday a sub-division of Chinese financial news outlet Caijing reported that the phone had been in development for seven months. The effort is being led by Wu Dezhou, a former executive at Smartisan, the outlet added.
VIDEO6:5306:53How TikTok took the world by stormCNBC Reports
Earlier this year ByteDance acquired a set of patents from Smartisan. Some Smartisan employees also transferred to ByteDance, as part of what the latter company called a "normal flow of talent."
Smartisan is a niche player in China's smartphone sector and is best known for its flamboyant founder Luo Yonghao.
ByteDance has risen to become a leading player in tech, rivaling the likes of Baidu and Tencent in influence.
Douyin, the company's app for streaming short videos, has more than 300 million monthly users in China, ByteDance marketing manager Zhi Ying said in June. TikTok, Douyin's global-facing counterpart, has also grown popular in North America.
ByteDance has recently begun investing in sectors not directly related to social media. The company has hired several staff from London-based startup JukeDeck, which specializes in AI-generated music, Reuters reported in July.
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e253c1c0eb0504c572805d9f3fc3c5ee | https://www.cnbc.com/2019/07/30/democratic-hopeful-tim-ryan-fear-of-technology-will-not-help-america.html | Democratic hopeful Tim Ryan watched his steel town die and says fear of technology won't save the Rust Belt. Amazon and eBay might | Democratic hopeful Tim Ryan watched his steel town die and says fear of technology won't save the Rust Belt. Amazon and eBay might
Many good policy ideas miss out on the daily cable news spin cycle — but it is not for lack of trying. Democratic hopeful Tim Ryan will face off against other candidates for the Democratic Party presidential nomination in Tuesday night's first of two debates this week, but all eyes — and most of the headlines — will likely be on the face-off between two high-profile progressive candidates: Senators Elizabeth Warren and Bernie Sanders.
On Tuesday, the Ohio congressman released a plan to revitalize the Rust Belt, stating, "We must invest in new industries, especially the technology sector, which is building the foundation for a new era of American industrial supremacy."
Rep. Tim Ryan, D-Ohio, films a message on the House steps of the Capitol. He says a focus on fear of technology, like AI, rather the the technology opportunity, will set America back in the 21st century.Tom Williams | CQ-Roll Call Group | Getty Images
CNBC.com recently interviewed Ryan as part of its series on presidential candidates to gain insight on their vision and how it can impact the economic outlook for 37% of the 2020 electorate: millennials and Gen Z. Set to be the first American generations to be worse off than their parents, facing the threat of climate change and struggling with how to pay for college, money matters matter to young voters in this election.
This series is dedicated to giving every single candidate a platform to share their economic vision for America with the voters — and find out whether they prefer Hulu or Netflix or if a hot dog is a sandwich.
Age: 46
Experience: Congressman, Ohio (2003– ); Ohio Senate (2001–2002)
Education: Bowling Green State (BA); University of New Hampshire (JD)
Family: Andrea (wife), Brady (son), Mason (stepson), Bella (stepdaughter)
CNBC: Morning Consult says Amazon is Gen Z's fourth most loved brand. However, politicians from President Donald Trump to Alexandria Ocasio-Cortez have attacked the brand. Is there a disconnect between leaders and young voters surrounding tech companies?
Ryan: I think there's a way to thread the needle. I do think that, you know, when you factor in what we learned about Russia in the last week with the Senate Intelligence report saying that Russia has had a very aggressive campaign in all 50 states to influence our elections, that this is a very complicated topic that I don't think can be settled in one conversation.
Technology plays a huge role, especially for Gen Z, who grew up not knowing any different. My kids — Mason is 16 and Bella is 15 — they've grown up with this technology, and I think we've got to come together. We just can't be divided, because we're not going to solve all these problems divided. When we sit down, it's got to be with big tech, government and everyone else.
It's scary to think about driverless cars and driverless trucks and checking yourself out at a local retail store. But the alternative of ignoring the technology, ignoring AI, ignoring machine learning and ignoring additive manufacturing is to our detriment.
Amazon brings a great deal of convenience, but at the same time it has squeezed out a lot of small retail. Amazon just opened a distribution center in Akron, actually in my district. It's going to be a $100 million investment. The jobs are going to start off at $15 an hour, get up to $18 an hour. That's not anywhere close to where we want it to be, but it's not minimum wage. There are some benefits here with the growth, but we've got to manage that with the disruption that it has on the economy and job market and small business.
For example, eBay has a program called Retail Revival, and they came into Akron and they're working with retailers to plug them into their global market so that whether you're selling comic books or baseball cards in Warren, Ohio, eBay comes in and teaches you how to access the global market. They're seeing significant increase in sales because eBay has helped the local business sell their product to the world. There are all of these opportunities with tech to amplify business, and we've got to figure that out.
I come from old steel country, Youngstown, Ohio. In the 1970s, when the steel mills totally collapsed and went belly up, the technology in the steel mills were pre–World War I technology. The steel industry put its head in the sand; America put its head in the sand. We got our clocks cleaned because we didn't embrace new technology.
What I'm trying to say to the American people is, Look, it's scary to think about driverless cars and driverless trucks and checking yourself out at a local retail store. But the alternative of ignoring the technology, ignoring AI, ignoring machine learning and ignoring additive manufacturing is to our detriment. We have to embrace technology and figure out how to make it work for us and dominate these industries. And I do think there's a disconnect with leaders who aren't taking that approach. We're talking more about fear and not talking about how we win in the future.
CNBC: Americans have $1.5 trillion in outstanding college debt. Is a higher education still the best option for young Americans trying to enter the workforce?
Ryan: It depends. Not for everybody. There are plenty of jobs that are available today and will continue to be available that don't require a college education. I think perpetuating that myth that a college, you know, is an absolute necessity for everybody, was one of the great mistakes we've made in the United States in the last 20 or 30 years. I think we should help people renegotiate their college loan debt down so that they have more money in their pocket and try to make college more affordable to the extent we can, with containing costs and helping people pay for it.
But also, in my education program, I stress vocational education in our schools so that people in high school can get on a pathway to get into the trades or get some kind of a skill that may only take an additional year or two of education after high school and make sure that these jobs get filled. We have thousands and thousands of jobs today where the skill set does not match the job opening. These are jobs that pay well, where you can make $60,000–$70,000 a year coming right out of high school. We want to make sure we streamline those programs to get people in and make sure there's access, especially for people of color, and make sure access to job training is available to everybody. Getting into the high schools and getting kids on a track, working with their counselors and parents to fill those jobs.
Rep. Tim Ryan, D-Ohio, seen in the basement of Rayburn Building on Friday morning, July 12, 2019. He says the best profession for Gen Z Americans to go into will be health and nutrition.Tom Williams | CQ-Roll Call Group | Getty Images
CNBC: According to the fourth National Climate Assessment Report, the sector of our economy that will be most negatively impacted by climate change is the health-care sector, with weather-related health conditions predicted to increase in severity and unanticipated health threats likely to emerge. What changes are needed to prepare our health-care system to deal with the impending climate crisis?
Ryan: Well, first and foremost, we want to make sure everybody has coverage. That's got to be the first step. However, the conversation that we really need to have is how do we start saving money within the health-care system. I don't say we do that by cutting benefits or cutting coverage; about two-thirds of our health-care costs today are from chronic diseases that are largely preventable. A little over $3 trillion a year is spent on type 2 diabetes, heart disease, high blood pressure — all of these issues that we could literally reverse.
My focus is going to be on coverage, how do we flip this system, which currently is a disease-care system. It just waits until we get sick and then the pharmaceutical companies make money to help health [insurance] companies make money. We've got to rebuild the incentives to stay healthy.
If you're a business person and you're looking at your financials you say, "Where can we save money?" It's $3 trillion a year on getting the country healthy and by freeing up that money, by bringing down those expenditures, we will have more money to deal with all of the climate issues. We can decarbonize the economy to make sure people have health coverage, we can rebuild infrastructure, and we can convert our farmland over to regenerative agriculture. We're going to need money for all of this stuff, and we've got to figure out how to save it, where the big chunk of money is, and that includes making sure that everybody has the coverage that they need.
CNBC: A 2018 TD Ameritrade study showed that LGBTQ millenials made, on average, $59,400 a year, while their straight counterparts earned $67,800. Further, only 29% of LGBTQ respondents reported feeling economically secure, as opposed to 41% of straight respondents. As president, how will you combat LGBTQ economic inequality?
Ryan: We've got to pass the Equality Act and make sure that there's no discrimination in the workplace for anybody in the LGBTQ community, making sure that the laws are enforced and making sure that the Department of Labor has the resources that it needs to enforce these laws. You set the tone as President of the United States to make sure that everybody knows that intolerance and discrimination has no place in the United States. That's a cultural issue as well, so you have the force of law behind you, but also use the bully pulpit of the presidency to make sure we move from this very discriminatory, race-baiting president that we have today who's hell bent on dividing the whole damn country to saying, Look, everyone is welcome here. Everybody matters. Everybody's a child of God, and they should all be protected by the law, but also by the president's words and actions.
CNBC: Gallup says that 4 in 10 Americans embrace some form of socialism. Do you think this is a realistic vision for the future of the American economy?
Ryan: No. Socialism is not the future. Socialism has never been proved to work anywhere in the world. I think we need to have a capitalistic system that actually works. The one we have now is broken with this concentration of wealth, concentration of opportunity, and you know, it's contributing to some of the big issues that we need to solve in the United States around climate change and taking care of our workers. The system is completely broken, and we need to fix it.
We do need government intervention where the market fails, like we see with the Medicare program. Like we see with the Medicaid program to provide health insurance for seniors or poor people, where there's no market for someone to provide insurance. We must have a new and better government. We're caught in this left-right divide right now. And it's a trap. You know, should we go further to the left or further to the right? I'm advocating, we go for new and better and we don't reform these old, broken systems. We transform them, and we build some new systems that are adequate to the challenges of the 21st century. Socialism is not going to do that. Government-run centralized planning is not going to do that. But we do need government to lead on a lot of these issues like we did during the New Deal.
I think there's a great opportunity for us if the government is progressive, if the government is innovative and creative. We can lead the way again around all of these issues. I think most people feel that the government does have some role to play when the economy is changing so much, because the government is the only entity that can protect workers and families in such a tumultuous time. So I do believe that government has a role to play that should not be viewed or in any way connected to socialism.
Netflix or Hulu: Netflix
Apple Music or Spotify: I'm trying to get to Spotify.
Who's on your playlist? Dave Matthews. Bruce Springsteen. Cardi B and I'm going a little old school. I got some '70s music, too, especially in the last few days.
What was your first job? First real job was a steel mill, midnight turn of the steel mills in Youngstown.
What was your college major? Political science
Favorite TV show: "Game of Thrones," except for the last season!
Best financial advice you ever got from your parents? Start putting money away as soon as you start working, especially if there's matching funds for any retirement. Even if it's $20, just start the process every month to put money away.
If you were a Gen Z individual entering the workforce, what sector would you enter? I would probably go into health and nutrition.
Should marijuana be legalized nationally? Yes. Yes, for sure. For social justice reasons more than anything else.
Is a hot dog a sandwich? No, it stands alone.
Subscribe to CNBC on YouTube.
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bc700280d19865890f5910f64b080dea | https://www.cnbc.com/2019/07/30/european-markets-investors-look-ahead-to-fed-meeting.html?__source=fincont&par=fincont | European stocks close sharply lower on US-China trade uncertainty, weak earnings | European stocks close sharply lower on US-China trade uncertainty, weak earnings
European stocks closed sharply lower on Tuesday as investors digested earnings and renewed U.S.-China trade uncertainty. Market players also positioned themselves ahead to key interest rate decision from the U.S. Federal Reserve.
The pan-European Stoxx 600 closed provisionally off by 1.45%. Autos and banks led the losses, both off more than 2%, as all sectors and major bourses traded firmly in the red. Germany's DAX was among the worst-performing bourses after a series of weak earnings from German corporate giants, trading over 2% lower.
U.S. and Chinese negotiators are set to resume face-to-face trade talks on Tuesday, though expectations of a significant breakthrough this week remain low.
Hopes of a resolution took a further blow on Tuesday as U.S. President Donald Trump unleashed a series of tweets claiming that China is not buying more U.S. agricultural products as it promised to do, and may be slow-walking the talks as it awaits the outcome of the 2020 presidential election.
On Wall Street, stocks fell after the U.S. leader renewed his attacks on China. The Dow Jones Industrial Average fell by around 20 points while the S&P 500 and Nasdaq indexes were also in negative territory.
Investors are also anticipating an interest rate cut from the Fed this week. The U.S. central bank is widely expected to lower borrowing costs on Wednesday by a quarter point for the first time in over a decade.
Back in Europe, the pound hit a 28-month low on Monday as fears of the U.K. leaving the European Union without a deal escalated. Prime Minister Boris Johnson said the current divorce deal was dead and cautioned that unless the EU agreed to renegotiate, Britain would leave without a deal on October 31. The pound is currently trading around $1.2155.
Centrica led the loss in Europe after reporting a net loss of £550 million for the first half of the year along with a 49% decline in adjusted operating profit. It also announced CEO Iain Conn will step down. Shares of the company dived 19%.
Siemens Gamesa also plunged, down nearly 18%, after slashing its full-year profitability guidance and reporting a third-quarter margin well below its target range.
U.K.-based BP posted second-quarter underlying replacement cost profit, used as a proxy for net profit, of $2.8 billion, beating the $2.5 billion expected by analysts polled by Reuters and sending the energy company's stock 3% higher.
Bayer confirmed its outlook for 2019 but struck a slightly less optimistic tone. The German pharmaceutical giant reported earnings before tax, depreciation and amortization (EBITDA) before special items advancing by 25% to 2.9 billion euros. The company now faces 18,400 lawsuits in connection with its weed killer Roundup. Bayer stock fell nearly 4%.
Lufthansa posted a drop in second-quarter earnings on rising fuel costs and price wars, with adjusted earnings before interest and tax (EBIT) falling to 754 million euros from 1 billion euros a year earlier. The airline's share price slipped 6%.
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84a34a8d5431279f463a0394b6d60d85 | https://www.cnbc.com/2019/07/30/gaps-ad-campaign-tries-to-clarify-its-identity-ahead-of-old-navy-spinoff.html | Gap's newest ad campaign attempts to clarify its identity ahead of the Old Navy spinoff | Gap's newest ad campaign attempts to clarify its identity ahead of the Old Navy spinoff
The Gap and Old Navy stores located in Times Square, New York.Adam Jeffery | CNBC
A 7-year-old blind pianist and 13-year-old electric-guitar player, rocking out to "Sweet Child O' Mine" are the stars of Gap's newest ad campaign.
The videos, which rolled out last week on Gap's social media channels, are also a step to focus Gap's identity — something the company has been aiming for after announcing in February it would spin off Old Navy into a separate, publicly traded company.
On an earnings conference call in May, CEO Art Peck had signaled this push.
"You'll also see Gap brand reinvest in marketing, kids and baby business with a strong back-to-school push later this year. This is especially important given that market share is now up for grabs, and this is a clear opportunity for Gap brand given its strong equity in kids and baby," he said.
Some children's clothing retailers, such as Gymboree, have gone out of business, while others, including Children's Place, have closed stores, providing a possible opportunity to win market share.
The back-to-school season is the second-busiest time of year for retailers after the winter holidays. This year, parents are expected to spend $27.8 billion on clothing, electronics and school supplies, according to a survey by Deloitte.
"The Gap Back to School 'Forward' campaign was designed to spark conversation, celebrate self-expression and propel the next generation in the direction of their strengths," said Alegra O'Hare, Gap's chief marketing officer. "... We want to give kids the confidence they need to pursue their passions and inspire them to break boundaries."
But the campaign might not be enough to clarify the brand's image to consumers, according to Jan Kniffen, a retail industry consultant.
"Gap has been struggling to find their identity for 15 years," he said. "It needs to be reinvented. It's just a mishmash of men's, women's and children's clothing. They're in an extraordinarily competitive environment, and they have nothing unique."
Kniffen added: "One campaign is not going to change anything for the Gap. If they can follow this up with more innovative, interesting, catch-your-attention ideas, it could be a start."
The spinoff also is part of this effort. Peck has said the split would help each company create a "sharpened strategic focus and tailored operating structure."
VIDEO10:3210:32How Gap Inc. went from apparel king of the 1990s to breaking upApparel
Old Navy is the company's most successful brand, and has regularly accounted for more than 40% of the entire company's annual sales. After the announcement, the stock surged more than 20%, but Gap shares are still down about 25% since January. The company has a market cap of around $7 billion.
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c2f6beac9e932d0806839583e2367635 | https://www.cnbc.com/2019/07/30/stocks-making-the-biggest-moves-premarket-merck-pg-eli-lilly-under-armour-xerox-more.html | Stocks making the biggest moves premarket: Merck, P&G, Eli Lilly, Under Armour, Xerox & more | Stocks making the biggest moves premarket: Merck, P&G, Eli Lilly, Under Armour, Xerox & more
VIDEO0:4600:46Markets point to a lower open ahead of the Fed's policy meetingMorning Report
Check out the companies making headlines before the bell:
Merck – The drugmaker reported adjusted quarterly earnings of $1.30 per share, 14 cents a share above estimates. Revenue also came in above forecasts. Merck's results got a boost with strong sales of its Keytruda immunotherapy treatment as well as improved vaccine sales.
Procter & Gamble – The consumer products giant beat estimates by 5 cents a share, with quarterly profit of $1.10 per share. Revenue also exceeded Wall Street projections, helped by price hikes and strong beauty product sales.
Eli Lilly – Eli Lilly's quarterly adjusted profit of $1.50 per share was 5 cents a share above consensus. Revenue also beat estimates as improved sales of diabetes drugs helped boost Lilly's bottom line.
Under Armour – The athletic apparel maker lost 4 cents per share for its latest quarter, compared to consensus forecasts of a 5 cents a share loss. Revenue was essentially in line with expectations, however Under Armour cut its full-year North American revenue forecast amid heavy competition from rivals like Nike.
Xerox – Xerox beat estimates by 11 cents a share, with adjusted quarterly profit of 99 cents per share. The office equipment maker missed Street revenue forecasts, however, and Xerox cut its full-year revenue outlook as it streamlines its business under new management.
WellCare Health Plans – The health insurer earned an adjusted $4.31 per share for the second quarter, beating the $4.16 a share consensus estimate. Revenue also came in above forecasts and WellCare said it is in the process of pursuing regulatory approvals for its deal to buy rival Centene. The company is not providing forward guidance due to the pending transaction.
D.R. Horton – The home builder earned $1.26 per share for its third quarter, beating the consensus estimate of $1.07 a share. Revenue also beat forecasts, helped by increased home sales and lower mortgage rates. The company also announced a new $1 billion share buyback plan.
Beyond Meat – Beyond Meat reported a quarterly loss of 24 cents per share, larger than the loss of 8 cents per share expected by Wall Street. Revenue for the plant-based burger maker was better than expected, and the company also raised its 2019 revenue guidance. The shares are under pressure, however, after the company announced it would raise money with a new stock offering.
Capital One Financial – Capital One said a hacker accessed personal information of about 106 million credit card customers and applicants. It's one of the largest-ever data breaches reported by a big bank.
BP – BP reported better-than-expected second-quarter profit, helped by a significant increase in oil and gas production. That helped offset lower oil prices and refining profits.
Sony – Sony reported an 18.4% increase in fiscal first-quarter operating profit, coming in above analyst forecasts. Sony's bottom line was helped by an especially strong performance for its image sensor unit.
Newell Brands – Newell hired Ritchie Bros. Auctioneers CEO Ravi Saligram as its new Chief Executive Officer, taking over October 2. The maker of Sharpie pens and other consumer products signed Saligram to a three-year contract, but said he could potentially remain for a longer period of time. Saligram was CEO of OfficeMax until it merged with Office Depot.
Occidental Petroleum – Occidental does not expect to generate enough cash to cover shareholder payments until 2022, according to an SEC filing by Anadarko Petroleum. Anadarko has a deal to be acquired by Occidental for $38 billion, a transaction that is opposed by activist investor and Occidental shareholder Carl Icahn.
Qualcomm – Qualcomm and China's Tencent Holdings struck an agreement to collaborate on 5G and gaming devices. Qualcomm is the largest supplier of mobile phone chips for Android devices, while Tencent is China's largest mobile software maker.
Johnson & Johnson – J&J said the Federal Trade Commission is conducting an investigation into whether the company's contracting practices for its rheumatoid arthritis drug Remicade violate antitrust laws. Rival Pfizer has sued J&J over its practices involving Remicade, with J&J denying any wrongdoing.
Dish Network – Dish reported quarterly profit of 60 cents per share, falling short of consensus by 5 cents a share. The satellite TV provider saw revenue above forecasts, however, and it also lost fewer pay-TV subscribers than analysts had been forecasting.
CORRECTION: This article has been updated to show that Anadarko has a deal to be acquired by Occidental for $38 billion.
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c0c50f487c30787f1387d39d20f855d8 | https://www.cnbc.com/2019/07/30/us-based-cannabis-company-could-be-active-in-as-little-as-6-months.html | A US-based cannabis company could be active in as little as 6 months, says pot investor | A US-based cannabis company could be active in as little as 6 months, says pot investor
VIDEO5:4905:49Pot ETFs are growing like weeds—here are investors' favoritesETF Edge
The pot proliferation is on.
Cannabis-themed exchange-traded funds are some of the most popular in the ETF space, with the ETFMG Alternative Harvest ETF (MJ) and the AdvisorShares Pure Cannabis ETF (YOLO) quickly attracting millions of dollars in investment and consistently topping Google Trends as the most-searched topics in ETF-related searches.
But these funds are about to get an even bigger boost, says Tim Seymour, founder and chief investment officer at Seymour Asset Management and now portfolio manager of the group's newest entrant, launched on July 23: the Amplify Seymour Cannabis ETF (CNBS).
As federal lawmakers increasingly look at the cannabis space, doing business in the United States as a cannabis company is on the cusp of getting a lot easier, Seymour said Monday on CNBC's "ETF Edge."
"Ultimately, what's happening is U.S. companies are working at a disadvantage to their global peers, certainly their Canadian ones," because of restrictions around entering the banking system when selling or handling a federally illegal product, Seymour said.
But with the Senate Banking Committee now concentrated on this issue after hosting hearings around the challenges last week, it's all about to change, and that could happen soon, Seymour said.
In fact, a U.S.-based cannabis company dealing in both THC- and CBD-based products could be active "within six months" thanks to the STATES Act and the SAFE Act, two bills seeking to loosen federal and financial regulations around state-approved marijuana operators, Seymour said. (THC is the plant's psychoactive ingredient and CBD is its non-psychoactive component.)
"Until that's there, ... though, I'm not going to invest in companies that my investors are concerned about," he said.
Instead, Seymour is investing in what he sees as pure-play cannabis companies that fall into three distinct buckets: firms that deal with the product itself; firms tied to the cannabis industry via the infrastructure, such as REITs and financial-service players; and firms that make technology for consumption and agriculture.
"What's so exciting about this sector right now is all of these verticals are shaping up at a time where an industry's coming out of prohibition," he said.
"We want to have exposure to companies that are not only the most thoughtful portfolio today, but I'm out there looking and scouring the leading edge of what's supposed to be in that portfolio tomorrow," Seymour said.
Eighty percent of the fund's 29 holdings — which include popular names like Aurora Cannabis and Canopy Growth Corp. — get 50% or more of their revenues from the cannabis industry, a strategy that makes it one of the purest in the space, according to Seymour.
"Let's cut right to it: You need to understand what you're investing in," Seymour said of the sector. "You need to understand: Is this a pure play on the sector? So, 80% of our portfolio has to be companies that have more than 50% of their revenues from cannabis. If you look at other ETFs in the space, they're not that pure."
Todd Rosenbluth, senior director of ETF and mutual fund research at CFRA, echoed how important it was for investors to know what they're buying when it comes to cannabis ETFs.
"There's five of these ETFs that are out there, and Tim's fund is actively managed. It invests in Canada. There's MJ, ... which is index-based. You've got a fund that is investing in the U.S. using derivatives," he said in the same "ETF Edge" interview. "So, it is important, if you are taking a look at this space, to understand what's inside the portfolio [and] what is not inside the portfolio."
CNBS fell more than 1% on Monday and is down more than 3% since its launch last week. MJ lost nearly 2% in Monday trading but is up nearly 13% this year. YOLO, which launched in mid-April, shed less than 1% Monday, but is down almost 20% since its inception.
Disclosure: Tim Seymour is the portfolio manager of the Amplify Seymour Cannabis ETF (CNBS) and is on the advisory board of The Green Organic Dutchman, Heaven, KushCo Holdings, Dionymed, Tikun Olam, CCTV, and Canndescent. Stocks in CNBS must be legal in the countries in which they operate. All of the ETF's holdings are listed here.
Disclaimer
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a7b4442cb092ac05b9806de0ac37d20c | https://www.cnbc.com/2019/07/31/ahead-of-the-fed-peter-boockvar-has-one-key-piece-of-advice-for-jay-powell.html | VIDEO6:0206:02Peter Boockvar: The Fed may end up disappointing the marketFutures Now
As investors brace for an expected Fed rate cut, Peter Boockvar has one message for Fed Chairman Jerome Powell: Don't signal any more rate cuts.
The chief investment officer of Bleakley Advisory said Tuesday's on CNBC's "Futures Now" that while the bond market has already priced in future rate cuts, that's not necessarily what the Fed should be doing.
"I don't think Powell should be committing one way or the other to say 'this is one and done' or 'this is the beginning of more,'" said Boockvar. "If they're truly data dependent like they claim to be, why commit yourself? There's a lot of data between tomorrow and that September meeting for them to digest."
Boockvar is referring to what he sees as mixed economic data, and he believes that the numbers aren't all "going in the direction of a rate cut" leading into Wednesday's decision and beyond. As a result, he believes Fed policymakers should give themselves more leeway and avoid committing to signaling that a rate cut is coming in September and beyond.
"Considering how some of the data has been decent lately and it hasn't all been negative, I don't think that Powell is going to officially endorse that September cut," Boockvar said.
Not only that, but Boockvar believes that there could be dissenters, such as Kansas City Fed President Esther George and Boston Fed President Eric Rosengren. If so, Boockvar said, it would be strange for the Fed to keep pushing for more cuts this year.
In fact, he says, there actually may not be anything more the Fed can do.
"They'll try to steepen the yield curve and see if it helps, but that really hasn't helped because they've already signaled rate cuts and the yield curve is not steepening," Boockvar said. "It's gotten less inverted, but it hasn't steepened."
"I just don't think that rate cuts will matter and will do much for growth," he added.
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19514d747027f76fa941812df9f76c71 | https://www.cnbc.com/2019/07/31/carlyle-to-give-shareholders-a-vote-in-switch-to-corporation.html | Carlyle to give shareholders a vote in switch to corporation | Carlyle to give shareholders a vote in switch to corporation
Carlyle Group emulated its peers on Wednesday with plans to convert from a publicly traded partnership into a corporation, and went one step further by announcing it will become the first U.S. private-equity firm to hold shareholder votes.
The corporate governance changes will have limited impact on how the Washington, D.C.-based firm runs its affairs, given that it will continue to be controlled by its founders and employees for the foreseeable future. Insiders own 66% of Carlyle, and the vast majority of them have committed to voting their shares as a block for up to five years, the firm said.
Nonetheless, holding annual meetings for shareholders to cast votes represents a significant milestone in the evolution of the secretive, tightly-knit private equity industry.
The move could end up boosting Carlyle's valuation, because it will allow its inclusion in indices that exclude publicly traded partnerships. Carlyle may also be included in more indices than its peers, such as the Russell and the S&P, because it will be the first publicly traded private equity firm to abolish its dual-class shares.
David Rubenstein, The Carlyle Group Co-Founder & Managing Director.Adam Jeffery | CNBC
Earlier this month, Blackstone President Jonathan Gray said his firm does not plan to convert its dual-class share structure into one common class stock.
"We are going to stick with our governance strategy and work hopefully to convince these indices it makes sense to include us," Gray told analysts on a conference call on July 18.
Private equity firms pay corporate taxes under the partnership structure on the management fees charged to investors, but are mostly shielded from paying these taxes on performance fees.
Under the so-called C-Corp structure, Carlyle will pay corporate taxes on all its revenue, in exchange for enabling investors such as mutual funds and index trackers to buy the stock.
The additional tax burden has become less severe after the headline U.S. corporate tax rate was lowered effective last year to 21% from 35% . Carlyle's peers Blackstone, KKR, and Apollo Global have already opted to switch to a C-Corp.
"(The change) improves our trading liquidity, makes us more attractive to new investors, provides a fixed dividend that enables improved capital allocation and offers an attractive yield, and enhances shareholder alignment under a new one-share/one vote governance model," Carlyle Co-CEOs Kewsong Lee and Glenn Youngkin said in a statement.
Carlyle said its effective cash tax rate on its distributable earnings was expected to be in the single-digit percentage range in 2020, and then increase to the mid-to-high teens before reaching the low 20s in five years.
Under the new structure, Carlyle's founders, David Rubenstein, Bill Conway and Dan D'Aniello, will each have the right to nominate a subset of the firm's directors, subject to approval by a full shareholder vote.
Carlyle also said its second-quarter pretax distributable earnings, the cash available for paying dividends, totaled $213.4 million, up from $114.5 million a year earlier.
The buyout firm said post-tax distributable earnings per share rose to 57 cents, from 29 cents posted a year earlier, beating the average analyst forecast of 37 cents, according to data compiled by Refinitiv.
Part of the gains were driven by the reversal of a legal setback. In February 2018, the Paris administrative court of appeals overturned a lower court ruling that forced a Carlyle subsidiary into paying $130 million in taxes on the 2007 sale of the "Imprimerie Nationale," the official headquarters of the French printing works, back to the French state for $466 million (375 million euros).
Carlyle said on Wednesday it received a $72 million gain because of the "final resolution" of the tax dispute.
Carlyle said its private equity funds appreciated 1% in the quarter, compared with a 0.7% appreciation for Blackstone's private equity portfolio and 6.4% appreciation for KKR's private equity portfolio.
Under generally accepted accounting principles, Carlyle reported net income per share on a diluted basis of $1.23 for the quarter, up 120% from a year earlier. That outperformed Blackstone and KKR, which recorded a 59% and 25% drop respectively.
Carlyle declared a quarterly dividend of 43 cents per share. It said it would introduce a fixed annual dividend of $1 per share, paid quarterly.
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13d651fa76069b064e5c5344571984cd | https://www.cnbc.com/2019/07/31/china-probes-small-banks-shareholdings-as-risk-worries-persist.html | China probes small banks' shareholdings as risk worries persist | China probes small banks' shareholdings as risk worries persist
Outside a Baoshang Bank branch in Beijing, China, on May 28, 2019.Giulia Marchi | Bloomberg | Getty Images
China is sharpening its scrutiny of small banks' shareholders amid fears that loans from the lenders to big investors could prove a weak point in the country's financial system, jolted by the state's weekend rescue of one lender and recent takeover of another.
While nominally small, China's numerous small city commercial banks risk having outsized significance because of their close ties to the rest of the banking system as well as with bigger shareholders, many of whom are giant companies.
Earlier this month, the China Banking and Insurance Regulatory Commission (CBIRC) asked banks and some other financial firms for details of any investor building up stakes of 5% or more without required regulatory approvals.
The regulator also asked the firms if they had disclosed all business transactions with their main owners, according to a regulatory notice seen by Reuters.
Regulators have also conducted spot checks at some smaller banks in the last two months to probe possible misuse of capital linked to shareholders and transferring of ownership interests, said four people with direct knowledge of the matter.
The scrutiny comes amid concerns that some debt-heavy Chinese private enterprises have amassed substantial stakes in smaller banks without regulatory approval and are using the lenders for their personal borrowings.
"There may be many shareholders using small Chinese banks as ATM machines, but I don't think we have enough understanding of bank ownership to know," said Andrew Collier, managing director of Hong Kong-based Orient Capital Research.
"Certainly if there are under-capitalized corporates as majority shareholders of the less well-funded smaller banks you could have a bank run," he said, adding the regulators have so far done a good job of rescuing ailing financial firms.
Regulators have also asked banks to detail transactions with any related parties, which are entities controlled or jointly controlled by their major shareholders, between January 2018 and June 2019.
Another risk is that some big shareholders have pledged their shares as collateral for loans or other purposes such as acquisition capital or are investing in opaque wealth management products, said another lawyer who works with the CBIRC.
The pledging of shares can leave the bank at risk of a sudden shift in its ownership — potentially even a change of control — if the shareholder forfeits the shares in struggling to repay the loans.
The CBIRC didn't respond to Reuters' request for comment on its latest crackdown. The people spoke to Reuters on condition of anonymity due to the sensitivity of the matter.
Regulators' focus on small banks and their connections has intensified since late May, when the surprise takeover of Baoshang Bank sent shockwaves through China's interbank markets, sharply raising borrowing costs — not all of which have returned to their pre-takeover levels.
In their seizure of Baoshang, regulators cited improper and illegal use of significant bank funds by Tomorrow Holdings, which held 89% of the Inner Mongolia-based bank's shares.
"The rationale behind the checks arises from recent corporate activities. And such activities do not only exist in Baoshang Bank," said a Beijing-based lawyer, referring to shareholders' borrowing from banks.
A second bank was rescued last weekend with three state-controlled financial firms agreeing to inject funds into Bank of Jinzhou. The total amount to be invested was not announced, but they will take at least 17.3% in the troubled lender.
Shares in Bank of Jinzhou have not traded since April, when its auditor, EY, quit after refusing to sign off on its 2018 accounts because it could not agree with the bank on how to verify the actual use of loans made by the bank, some of which it feared did not match the purpose given.
The bank counts debt-laden Yinchuan Baota Refined Chemical Industry, a privately-run refining and petrochemical group, as one of its top three shareholders, according to its 2018 interim report. The chairman of Yinchuan's parent was arrested in December 2018 for alleged fraud.
Another example of the ties that build up between banks and their shareholders came last month with a fine of 200,000 yuan ($29,027.58) imposed on Bank of Liuzhou by the CBIRC for breaking limits on loans to a single group.
While rules limit banks to lending 15% of their net capital to a single entity, Bank of Liuzhou extended a 3.64-billion yuan credit line to its main shareholder, Liuzhou City Construction Investment Development Co, by end-2018, equivalent to 23.79% of the bank's net capital.
Large banks in China, as elsewhere, have shareholder registers that tend to read like as a fund manager who's who.
Not so for the smaller banks, whose registers often read more like a who's who of the corporate world and provincial government entities.
Chinese liquor giant Kweichow Moutai is the No.2 shareholder in Bank of Guizhou, which last month filed for a Hong Kong stock listing to raise up to $1 billion, with a 14.13% stake in the city commercial bank.
Moutai chairman Li Baofang said in May last year the group's financial arm had become "more and more important for the development of Moutai."
Chinese banks, like most of their global peers, don't report client-specific business details, but a review of Bank of Guizhou's IPO prospectus showed overall credit exposure to related parties as a percentage of its loan book soared to 44.3% at the end of March 31, 2019, up from just 6.8% in 2017 and bringing it close to the regulatory limit of 50%.
Several heavily-indebted Chinese conglomerates are also big bank shareholders.
China Evergrande, which has one of the highest debt ratios in the Chinese property sector, last month agreed to inject $1.9 billion into Hong Kong-listed Shengjing Bank, raising its stake to 25% from 17.3%, as the bank faced "a real need to raise its level of capital adequacy".
Shengjing Bank's loans to related parties jumped nearly six times at the end of last year, from 2017, even as its core capital adequacy ratio, which measures a bank's financial strength, dropped half a percentage point to 8.52% in the same period, its annual report showed.
Among other major bank stake owners, developer China Vanke is the largest shareholder with nearly 28% of the underlying shares in Huishang Bank, while a unit of the struggling HNA Group conglomerate owns 14.6% in unlisted Yingkou Coastal Bank.
None of the banks and companies responded to a request for comment from Reuters.
"The shareholding structure of some high-risk smaller banks might seem to be okay from the outside, but actually they're being hollowed out by transactions related to the shareholders," said a vice president of a city commercial bank.
"It's time to see through them with tighter regulations."
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4fc5243b032cbbf8a9ad4dcf346b124a | https://www.cnbc.com/2019/07/31/cramer-weed-industry-scandals-show-why-investors-must-be-selective.html | VIDEO3:1703:17Scandals in weed industry mean investors should be 'selective'Mad Money with Jim Cramer
The budding cannabis industry cooled off in July after a couple of businesses came under fire in recent weeks, CNBC's Jim Cramer said Wednesday.
The scandals have caused stocks in the marijuana sector to simmer with a number of equities falling as much as 20% this month, he said. U.S. and Canadian officials have targeted both CannTrust and Curaleaf for improper businesses practices.
"I think you need to be incredibly selective here. I still like Canopy Growth and Cronos, the two best-funded Canadian cannabis plays," the "Mad Money" host said. Their stocks are down about 20% and 15%, respectively, "but these are long-term stories. You need to be prepared to buy them gradually on the way down."
Earlier this month, CannTrust halted sales of its cannabis products after Health Canada, the country's national public health arm, declared the company non-compliant for growing marijuana in unauthorized rooms in its facility. Officials are investigating if the products are safe for consumption, Reuters reported.
Shares of CannTrust, which first received its medical marijuana license year prior to cannabis legalization in Canada, peaked at $10.17 in March and has lost more than 75% of its value. Investors were buying into the company's potential to produce as much as 300,000 kilos of weed by the end of 2020, Cramer said. After missing Wall Street revenue and profit expectations in 2018, Canntrust turned a profit and beat estimates in its first-quarter report of 2019, according to Factset.
But the board fired CEO Peter Aceto last Friday as a result of the scandal. Furthermore, management tamped down its 2019 forecast. The stock did manage to bounce from a $1.87 low last Thursday and climbed nearly 10% to close at $2.45 in Wednesday's session.
"As the scandal keeps blowing up, the pin action has been horrendous for the rest of the group. Some analysts are talking about a CannTrust contagion," Cramer said.
Elsewhere, shares of Curaleaf are trading more than 30% under its $11.73 high in May. The U.S.-based medical cannabis company landed a partnership with CVS to sell cannabidiol (CBD) products, but the country's Food and Drug Administration last week warned it was selling the products illegally with unsubstantiated treatment claims, CNBC reported.
In a press release, Curaleaf said it had removed any references to non-compliant products from its online platforms. CEO Joseph Lusardi said in a statement that the company "appreciates the work the FDA is doing to ensure there is regulation and compliance in the CBD marketplace."
"After initially getting slammed, the stock managed to bounce back. They may just need to change how they label this stuff. Still, it's clear the FDA is starting to flex its muscles against cannabis," Cramer said.
MJ, the ETFMG Alternative Harvest ETF monitoring legal cannabis businesses, itself fell more than 12% in July. Cramer previously said the declines are a sign that there is a paradigm shift in the industry as marijuana investors "are starting to care about the actual results, for once."
"When it comes to the marijuana space, the new paradigm it means you need to stay away from companies that only have vague plans pending regulatory approval that are losing a lot of money," he reiterated Wednesday.
VIDEO9:3209:32Scandals in the weed industry show why investors must be 'selective,' Cramer saysMad Money with Jim Cramer
Representatives of Curaleaf and CannTrust could not be immediately reached for comment upon publication of this article.
Disclosure: Cramer's charitable trust owns shares of CVS Health.
Questions for Cramer? Call Cramer: 1-800-743-CNBCWant to take a deep dive into Cramer's world? Hit him up! Mad Money Twitter - Jim Cramer Twitter - Facebook - InstagramQuestions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com
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bc2a9b6796dc8c5bae83ec5dc8911bd4 | https://www.cnbc.com/2019/07/31/democratic-debate-audiences-may-already-have-tuned-out-struggling-candidates.html | Challenge for struggling candidates: Debate audiences may already have tuned them out | Challenge for struggling candidates: Debate audiences may already have tuned them out
Democratic presidential hopefuls (L-R) Mayor of South Bend, Indiana, Pete Buttigieg, US senator from Vermont Bernie Sanders and US Senator from Massachusetts Elizabeth Warren participate in the first round of the second Democratic primary debate of the 2020 presidential campaign season hosted by CNN at the Fox Theatre in Detroit, Michigan on July 30, 2019.Brendan Smialowski | AFP | Getty Images
The second round of Democratic presidential debates produced strong moments for multiple candidates, from Senate star Elizabeth Warren to the eccentric author Marianne Williamson.
Progressive candidates hit hard at their moderate rivals. "I wrote the damn bill," Bernie Sanders snapped at Rep. Tim Ryan about his "Medicare for All" proposal, while Warren dismissed former Rep. John Delaney for emphasizing "what we really can't do and what we shouldn't fight for."
The moderates gave as good as they got. Delaney stoutly challenged Warren as a Trump-style trade protectionist, while Gov. Steve Bullock derided "wish-list economics" and warned that working people "can't wait for a revolution" like the one Sanders calls for.
Did any of Tuesday night's action significantly alter nomination prospects for any among the 10 candidates on stage?
Probably not.
Will the skirmishes Wednesday night with another group of 10, including former Vice President Joe Biden and Sens. Kamala Harris and Cory Booker change the dynamics? After all, the volatile subject of race looms over their face off.
Probably not.
That might sound surprising considering the vast exposure nationally televised debates offer a sprawling field of candidates, each desperately seeking traction. But it makes more sense if you consider the possibility that voters have already culled the field six months before the initial nomination contests in Iowa and New Hampshire.
Recent national surveys by Quinnipiac University suggest as much. In late April, Quinnipiac found that, taken together, just five candidates — Biden, Sanders, Warren, Harris and Pete Buttigieg — drew 79% of the Democratic primary vote.
Six weeks later, shortly before the first round of Democratic debates on MSNBC, those five drew the same 79%. This week, after the first round and just before the second, new Quinnipiac numbers showed that those five garnered 78%.
Harris' strong attack on a shaky Biden in the MSNBC debate had a short-term impact. In a Quinnipiac poll taken immediately afterward, she shot up to 20%, from 7% in mid-June, while front-runner Biden fell to 22% from 30%.
But those effects have since eroded. Heading into Wednesday night's faceoff, Quinnipiac found that Biden's standing rebounded to 34%, while Harris slipped back to 12%.
Cause-and-effect links between political events and polling results are notoriously difficult to establish. Some of the movement could simply reflect the normal variations that margins of error produce. Some could reflect rising alarm over the behavior of President Donald Trump, heightening Democrats' desire for the familiar, comfortable alternative Biden represents.
But just as the attitudes of voters on all sides have hardened concerning Trump, they may have solidified over which potential Democratic challengers the party's primary voters will pay attention to. That would be bad news for a passel of serious-minded candidates who, so far at least, have proven unable to grab a solid foothold in the 2020 conversation.
Sen. Amy Klobuchar of Minnesota ranks among the most popular members of the U.S. Senate, boasting strong election victories in the kind of heartland state that gave Trump the presidency in 2016. She drew 1% of the primary vote in Quinnipiac's late April survey, and remained at 1% in late July.
During that same period, Booker has moved from 2% to 1%. Ryan and Delaney, Sens. Kirsten Gillibrand and Michael Bennet, Gov. Jay Inslee of Washington and former Obama Cabinet Secretary Julian Castro, all failed to register even 1% nationally this week.
Those candidates will face challenges in remaining on debate stages this fall as the Democratic Party ratchets up the polling levels and numbers of campaign contributors needed to qualify. More than the lost opportunity for one-liners, missing debates make it harder for also-rans to sustain financial oxygen.
Underdogs still can narrowly focus their attention and cash toward breakthroughs in the small states where voting starts. As a wealthy former entrepreneur, Delaney can keep campaigning in Iowa as long he wants to pay for it; Booker has assembled an especially strong Iowa campaign organization.
But there's no sign that's made them competitive so far. The current realclearpolitics.com average of Iowa polls shows Delaney and Booker with 1% and 2.5%, respectively.
Indeed, in the earliest states — Iowa, New Hampshire, Nevada and South Carolina — realclearpolitics.com shows the same top five contenders that national polls show. Democratic voters, with their attention and dollars if not yet their ballots, may already have determined the finalists for their party's nomination.
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73886f0aa51476d16b4cbee4b3ba777d | https://www.cnbc.com/2019/07/31/forex-markets-dollar-the-fed-british-pound-in-focus.html?__source=sharebar%7Ctwitter&par=sharebar | Dollar hits two-year high after Federal Reserve cuts interest rates by a quarter point as expected | Dollar hits two-year high after Federal Reserve cuts interest rates by a quarter point as expected
A trader shows U.S. dollar notes at a currency exchange booth.Akhtar Soomro | Reuters
The dollar index hit a two-year high on Wednesday as the Federal Reserve cut interest rates after Fed Chairman Jerome Powell said the 25-basis-point cut was not the same as the beginning of a lengthy rate cutting cycle.
The dollar index rose 0.42% to 98.46 in afternoon trading, its highest level since May 2017 when the dollar index hit a high of 98.891.
Some were expecting the Fed to leave the door open for further cuts or even a 50 basis point cut after Wednesday's meeting, so the less dovish stance sent U.S. stocks to session lows and the dollar index to a more than two-year high.
"The Fed signaled that it is going to be data dependent but markets were priced for a more dovish outlook which the Fed did not deliver on, said Collin Martin, director of fixed income at the Schwab Center for Financial Research in New York.
"Markets were priced for a quarter-percentage-point cut but maybe they were looking for clarity that a second cut would be coming soon, some sort of a calendar based guidance.
Against the euro the dollar was 0.4% stronger, last at $1.111, its strongest level since May 2017.
The yen stood just off three-week lows against the dollar after the Bank of Japan refrained from expanding stimulus, though it committed itself to doing so "without hesitation" if required.
The pound, which has tumbled this week as investors rushed to factor in the growing possibility of Britain leaving the European Union without transition trade arrangements in place, firmed 0.59% to $1.222, crawling back from a 28-month trough of $1.212 plumbed on Tuesday.
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8fb920c90bf6df490bbbaf5de7662a54 | https://www.cnbc.com/2019/07/31/samsung-q2-earnings-operating-profits-fell-on-low-memory-prices.html | Samsung shares tumble after the company says its second-quarter profit fell 56% | Samsung shares tumble after the company says its second-quarter profit fell 56%
A South Korean flag, left, and Samsung Electronics flag fly outside the company's headquarters in Seoul, South Korea, on July 5, 2019.Jean Chung | Bloomberg | Getty Images
Samsung Electronics said Wednesday that profits for the three months that ended June more than halved from a year earlier due to falling memory chip prices.
Operating profit for the quarter came in at 6.6 trillion Korean won ($5.6 billion), down 55.61% from the same period a year ago, the world's largest smartphone maker said. Its consolidated revenue was at 56.13 trillion won.
"The weakness and price declines in the memory chip market persisted as effects of inventory adjustments by major datacenter customers in the previous quarters continued, despite a limited recovery in demand," Samsung said in a news release.
Those numbers were slightly better than the guidance the company provided earlier this month. Samsung shares tumbled 2.58% in morning trade.
Samsung said its semiconductor business posted consolidated revenue of 16.09 trillion won and an operating profit of 3.4 trillion won for the quarter, which was down almost 71% from a year ago. The company said its memory unit saw increased demand despite weak market conditions.
For the second half of the year, Samsung said, "demand is expected to grow although the Company sees volatility in the overall industry due to increased external uncertainties."
Memory components, which are used in mobile handsets and enterprise servers, make up Samsung's main profit-making business.
This is the second consecutive quarter where the South Korean tech giant's operating profit more than halved from the same period a year earlier. In the three months that ended March, Samsung's profits fell about 60% on-year to 6.2 trillion Korean won ($5.3 billion).
The global semiconductor industry is undergoing a period of inventory adjustment that is keeping demand low and causing a supply glut, which is squeezing prices. Analysts have said they expect a recovery to get underway in 2020.
Last week, Samsung rival SK Hynix reported its smallest quarterly earnings in three years, missing an industry estimate.
South Korean chipmakers have another cause for concern: An ongoing dispute between Japan and South Korea resulted in Tokyo restricting exports of crucial high-tech materials that are used by the likes of Samsung and SK Hynix to make chips and smartphone displays.
While the short-term impact of the restriction is expected to be limited due to high inventory levels, analysts have said companies may face longer term difficulties in sourcing for alternatives. While that could potentially help push up chip prices, it is likely to make smartphones and other electronics more expensive.
"We are facing difficulties due to the burden of this new export approval process, and the uncertainties that this new process would bring," a Samsung executive said on the earnings call. "The visibility is low. However, our executives and the relevant business divisions are dedicating their utmost efforts and deriving solutions to minimize any potential negative impact these new measures may have on our manufacturing process."
Samsung's mobile business reported 25.86 trillion Korean won in consolidated revenue and booked 1.56 trillion won for its operating profit, down about 42% from a year ago. The smartphone maker said it expects overall mobile demand to remain weak in the second half due to "growing uncertainties over the global economy and trade."
Samsung is set to unveil the Galaxy Note 10 smartphone in August and release its previously delayed Galaxy Fold a month later.
During its earnings call, Samsung declined to give a shipment forecast for the Note 10 but said it expects the smartphone to "achieve higher volumes" than those of the Note 9.
— Reuters contributed to this report.
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9f64b68146586cd5b1460786f6b07df0 | https://www.cnbc.com/2019/07/31/top-amazon-executive-jeff-blackburn-head-of-entertainment-and-advertising-is-reportedly-taking-a-1-year-sabbatical.html | Top Amazon executive Jeff Blackburn, head of entertainment and advertising, is taking a 1-year leave | Top Amazon executive Jeff Blackburn, head of entertainment and advertising, is taking a 1-year leave
(L-R) Actor Casey Affleck with his award for best actor in 'Manchester By The Sea' and Amazon SVP Jeff Blackburn attend the Amazon Studios Oscar Celebration at Delilah on February 26, 2017 in West Hollywood, California.Todd Williamson | Getty Images
Jeff Blackburn, Amazon's SVP of business and corporate development, is taking a one-year leave in 2020, Amazon's representative told CNBC.
Blackburn, who joined Amazon in 1998, is one of the most senior executives at the company and a close advisor to CEO Jeff Bezos. He oversees a number of businesses, including Amazon's video streaming and advertising units. Geekwire was first to report the news about his sabbatical.
Amazon's spokesperson confirmed his leave in an email statement sent to CNBC.
"Jeff Blackburn has decided to take a one year sabbatical with his wife and extended family following more than 21 years at Amazon, leading everything from our third party business, to Prime Video, Amazon Studios, Amazon Music, and Amazon Advertising. Jeff's sabbatical will begin in early 2020, and we look forward to welcoming him back in 2021," Amazon's spokesperson said.
Blackburn's leave is significant, given how he's been one of the longest-serving executives at the company. He was often mentioned as one of the top candidates to succeed Bezos, if the CEO chooses to step down one day.
It's also the latest high-profile change in Bezos's S-team, his tight knit group of senior executives that see very little turnover. Last year, SVP of marketplace Sebastian Gunningham left for WeWork, while SVP of international business Diego Piacentini decided not to return to Amazon after taking a two-year leave.
Blackburn currently owns 71,000 Amazon shares, which is worth roughly $132.5 million. Among S-team members, only AWS CEO Andy Jassy, who owns 93,000 shares, has a larger ownership stake.
In 2017, during a rare on-stage interview with CNBC's Julia Boorstin at a Vanity Fair event, Blackburn explained Amazon's decision to strike a streaming deal with the NFL to carry Thursday night games for Prime subscribers. Viewers got the option of choosing between the Fox broadcast with Joe Buck and Troy Aikman as commentators, or a separate stream featuring an all-female duo of Andrea Kremer and Hannah Storm.
"For us in live sports, it's a content type that Prime members care about and they've told us they want that," Blackburn said at the event. "We've looked all different kinds of things all over the world. We actually have been for a while."
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91533fecdc6fc9110fd2bbca719efcbc | https://www.cnbc.com/2019/08/01/north-korea-missile-tests-didnt-violate-pledge-to-trump-bolton.html | US officials play down North Korea missile tests, hold out for new talks | US officials play down North Korea missile tests, hold out for new talks
President Donald Trump and North Korea's leader Kim Jong-un stand on North Korean soil while walking to South Korea in the Demilitarized Zone (DMZ) on June 30, 2019, in Panmunjom, Korea.Brendan Smialowski | AFP | Getty Images
North Korea's latest missile launches did not violate a pledge its leader Kim Jong Un made to U.S. President Donald Trump, a senior U.S. official said on Thursday, but efforts to resume denuclearization talks remained in doubt.
Kim oversaw the first test firing of a "new-type large-calibre multiple launch guided rocket system" on Wednesday, North Korean state media reported.
It followed six days after the launch of two similar short-range ballistic missiles, North Korea's first tests since Kim and Trump met on June 30 and agreed to revive stalled denuclearization talks.
The latest launches were intended to put pressure on South Korea and the United States to stop upcoming military drills and came as diplomats criss-cross the region this week in the hope of restarting the talks.
"The firing of these missiles don't violate the pledge that Kim Jong Un made to the president about intercontinental-range ballistic missiles," U.S. national security adviser John Bolton said in an interview with Fox Business News.
"But you have to ask when the real diplomacy is going to begin, when the working-level discussions on denuclearization will begin," he said.
North Korea's tests of short-range missiles on Wednesday and last week came despite a meeting between Kim and Trump on June 30 at which they agreed to revive stalled talks.
Massachusetts Institute of Technology professor Vipin Narang said the missile tests were part of the North Korean leader's approach to diplomacy. "He's saying it will take more than a photo-op to get things moving."
The tests were a stark reminder that every day the United States and its allies fail to secure an agreement is a day that North Korea continues to improve and expand its nuclear and missile arsenals, he said.
U.S. officials have played down the tests. Secretary of State Mike Pompeo said earlier this week he still hoped that talks would start soon, including possibly on the sidelines of a Southeast Asian security forum in Bangkok this week.
However, Bolton said there had been no response from North Korea. "We're still waiting to hear from North Korea," he said.
A summit between Trump and Kim in Vietnam in February collapsed after they failed to reconcile differences between Washington's demands for Pyongyang's complete denuclearization and North Korean demands for relief of extensive international sanctions.
North Korea did not describe the newest weapons in detail or immediately release photos, but South Korean military officials have characterized them as ballistic missiles. Such weapons could violate United Nations resolutions designed to pressure Pyongyang to give up its nuclear weapons and missile programs.
Britain, Germany and France have asked the United Nations Security Council to meet behind closed doors on Thursday to discuss the latest missile launches, diplomats said.
U.N. Secretary-General Antonio Guterres believed the missile launches were "just another reminder of the importance of restarting talks on the denuclearization of the Korean peninsula", U.N. spokesman Stephane Dujarric told reporters.
Wednesday's test verified the combat effectiveness of the overall system and Kim predicted "it would be an inescapable distress to the forces becoming a fat target of the weapon," North Korean state news agency KCNA said.
It said the rocket system would play a major role in ground military operations.
South Korea's Joint Chiefs of Staff (JCS) said the North had fired ballistic missiles that flew about 250 km (155 miles).
South Korean nuclear envoy Lee Do-hoon met U.S. Special Representative for North Korea Stephen Biegun on Wednesday on the sidelines of the Association of Southeast Asian Nations (ASEAN) Regional Forum in Bangkok.
South Korea's foreign ministry said in a statement on Thursday they discussed the missile tests and vowed diplomatic efforts for an early restart of working-level talks.
North Korean Foreign Minister Ri Yong Ho cancelled a planned visit to the ASEAN forum but Pompeo said the Americans were still open to a meeting.
The United States does not plan to make changes to this month's military drill with South Korea, a senior U.S. defense official said on Wednesday, despite the recent missile tests.
"We have to do two things: we have to give the diplomats appropriate space for their diplomacy and help create an environment that is conducive to the talks when they resume ... and we have to maintain readiness," the U.S. official said.
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38cf706747c1b92437831881bf141dfe | https://www.cnbc.com/2019/08/01/stocks-to-bounce-democrats-debate-impossible-whopper.html | What to watch today: Stocks to bounce, Democrats debate, and Impossible Whopper to go nationwide | What to watch today: Stocks to bounce, Democrats debate, and Impossible Whopper to go nationwide
U.S. stock futures were pointing to a higher Wall Street open after a Fed-inspired sell-off that saw the Dow and S&P 500 post their biggest one-day losses in two months. Investors were disappointed after Fed Chairman Jerome Powell said Wednesday's 0.25% interest rate cut should not necessarily be taken as the first in a series. (CNBC)* Trump: Powell 'let us down' by not clearly signaling more cuts (CNBC)* Lower rates already came to housing, and they're not helping much. (NY Times)Despite Wednesday's sharp declines, the Dow and S&P logged a positive July. Turning the calendar page, stocks have gained ground in August the past two years, but they've also seen some steep August losses this decade, most notably in 2011 and 2015. (CNBC)
A busy morning for earnings brings reports from Dow component Verizon (VZ), General Motors (GM), Dunkin' Brands (DNKN), Wayfair (W), and Yum Brands (YUM). After-the-bell reports today include GoPro (GPRO), Pinterest (PINS), and Square (SQ).
Shares of Qualcomm (QCOM) were falling about 7% in the premarket after the chipmaker reported mixed fiscal third-quarter results, beating on earnings but missing on revenue. Qualcomm also gave a current quarter earnings forecast that falls largely below estimates as it strips out business from China's Huawei. (CNBC)Shares of Fitbit (FIT) were tanking about 18% in premarket trading after the fitness device maker fell short of estimates on quarterly earnings. Fitbit revenue beat. However, Fitbit cut its full-year sales forecast on disappointing sales of its new Versa Lite smartwatch.
On today's economic calendar, the Labor Department is out at 8:30 a.m. ET with initial jobless claims, ahead of tomorrow's release of the government's July employment report. Meanwhile, the ISM's July manufacturing index and June construction spending are both out at 10 a.m. ET this morning. (CNBC)
The Senate is expected to vote on a two-year budget and debt ceiling deal today, just a week after the House approved the deal. However, there are doubts about whether Republicans can muster a majority to support the spending package. (The Hill)
President Donald Trump and Vice President Mike Pence campaign in Cincinnati tonight, the first rally since a North Carolina audience last month chanted "send her back" about a Somali-born congresswoman that Trump called out. (AP)* Mark Mobius: US markets will go 'haywire' if Trump loses 2020 election (CNBC)Last night concluded round two of the second Democratic presidential debates. Frontrunner Joe Biden faced heavy scrutiny, but he wasn't the only top tier candidate to come under fire. Sen. Kamala Harris, who shot up in the polls after the first debate, also faced withering attacks. (CNBC)* Harris argues Trump's 'trade tax' pushed the Fed to cut rates (CNBC)* Hecklers interrupt Democratic debate over a 2014 New York City police shooting (CNBC)
Trump offered Russian President Vladimir Putin help in putting out vast wildfires raging in Siberia, a move the Kremlin took as a sign that battered ties can be restored. Russia has been keen to try to rebuild U.S.-Russia relations that soured after the Moscow's 2016 election meddling. (Reuters)
The Trump administration named William Perry Pendley as acting director of the Bureau of Land Management. Pendley has pressed to reduce the size of federal lands to boost development, attempted to undermine protections of endangered species and sued the Interior Department on behalf of an oil and gas prospector. (Washington Post)
The U.S. imposed sanctions on Iranian Foreign Minister Mohammad Javad Zarif, targeting the country's top spokesman and potentially hurting chances of diplomatic talks amid rising tensions between the two countries. Zarif, a critical figure in the 2015 Iran nuclear deal, dismissed the action. (Reuters)
The U.S. obtained intelligence that the son and potential successor of al Qaeda leader Osama bin Laden, Hamza bin Laden, is dead, NBC News reported. The officials would not provide details of where or when Hamza died or if the U.S. played a role in his death.
Intel (INTC) has applied for licenses to sell some of its products to Huawei following the blacklisting of the Chinese technology giant and a subsequent easing of restrictions on the firm. Intel CEO Bob Swan told CNBC the company has applied for a license to sell "general purpose compute" products to Huawei.* Gary Cohn: Trump's trade war with China is hurting the US economy more (CNBC)
A group of Nordstrom family members that own nearly a third of the retailer have been working on a proposal to increase their stake to more than half. The family last year aborted talks to take the retailer private after an initial offer of $50 a share was rejected as too low. (WSJ)
Sen. Josh Hawley introduced a bill that would ban Snapchat's (SNAP) Snapstreak feature that encourages users to send photos on the app at least once every 24 hours. The Missouri Republican said it's a way to curb overuse of social media. (Reuters)
SmileDirectClub , which provides invisible teeth-straightening devices, is looking to sell up to $1 billion in stock in an initial public offering (IPO). The size and timing of the offering could still change depending on market conditions. (CNBC)
Beyond Meat (BYND) priced a secondary offering of 3.25 million new shares at $160 per share, 18.6% below Wednesday's closing price for the plant-based burger maker's stock. Shares were dropping about 9% in the premarket. Beyond Meat has rocketed nearly 700% since its IPO in May.
Amazon (AMZN) is in early stage talks to buy a 26% stake in India's Reliance Industries, according to the Economic Times. Reliance is India's largest brick and mortar retailer.
Thomson Reuters (TRI) raised its sales and profit outlook for 2019 and 2020 after reporting a 4% increase in organic revenue for the second quarter. Separately, Thomson Reuters and co-owner Blackstone (BX) finalized a deal to sell their Refinitiv data business to London Stock Exchange for $27 billion in stock.
BlackRock (BLK) is no longer in talks to buy private equity firm Pamplona's stake in cybersecurity firm Cofense, according to the Wall Street Journal. BlackRock already holds a stake in Cofense, and the potential deal was designed to address national security concerns.
Burger King is launching the Impossible Whopper in U.S., starting next week. But it will only be available for a limited time. The nation's second-largest burger chain, owned by Restaurant Brands International (QSR), began testing the plant-based burger from Beyond Meat-rival Impossible Foods at locations in St. Louis in April. (CNBC)
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2a0fd612d96e6549733650c26e5b3737 | https://www.cnbc.com/2019/08/01/wayfair-reports-fiscal-q2-2019-earnings.html | Wayfair shares whipsaw as costs build up and loss widens | Wayfair shares whipsaw as costs build up and loss widens
A Wayfair employee works at his desk at the Boston headquarters of Wayfair on July 31, 2018.Suzanne Kreiter | Boston Globe | Getty Images
Wayfair shares whipsawed Thursday morning after the online furniture retailer reported a larger loss for its fiscal second quarter, as costs for things such as advertising and customer service skyrocketed.
The company reported a loss of $181.9 million, or $1.98 per share, compared with a loss of $100.7 million, or $1.13 a share, a year ago. Excluding one-time items, Wayfair reported a loss of $1.35 per share, matching expectations from analysts, based on Refinitiv data.
It reported sales for the quarter of $2.34 billion, up 42% from a year ago. Analysts were calling for revenue of $2.26 billion.
Total operating expenses were the red flag on Wall Street, making for some volatile trading. The stock tumbled more than 7% in premarket trading, later rising more than 2% when the market opened. More recently, shares were up 0.25%.
Wayfair's operating expenses rose 52% to $730.8 million from $480.3 million a year ago, as the retailer spent more on customer service, advertising, technology and other operating fees during the quarter.
Wayfair has consistently reported double-digit revenue growth but hasn't been able to turn a profit. And that's one obstacle that many online-based businesses face. It's typically more expensive to acquire customers online than it is in a bricks-and-mortar store. Wayfair is set to open its first full-service location at the Natick Mall in Massachusetts this fall, having experimented with a handful of pop-up shops.
"While Wayfair is expert at driving sales growth, it remains terrible at translating this into profitable gains," said GlobalData Retail Managing Director Neil Saunders. "Wayfair's advertising costs are out of control. ... This completely erodes the already wafer-thin margins and pushes the company deep into the red."
But Wayfair is sticking by its approach.
"In North America and increasingly in Europe, our investments are paying off in the form of greater scale and higher levels of repeat over time, which tells us our strategy of not timing our investments to any particular quarter is working as intended over the long term," CFO Michael Fleisher told analysts on a post-earnings conference call. "We expect to stick to this philosophy, and we will not alter our ... investments to make any particular quarter more profitable."
Wayfair said the number of active customers for its direct retail business is now 17.8 million, up 39.1% from a year ago. It said it delivered 9.2 million orders during the second quarter, up 42% year over year. The average order value was $255, a buck better than what it was during the same period in 2018.
The earnings report follows a controversial incident in June, when Wayfair employees walked out after alleging the company sold $200,000 of mattresses to a detention camp for migrant children along the Mexican border. Following the incident, some Wayfair customers announced on social media they would boycott the company to stand in solidarity with employees.
Wayfair, which has a market cap of about $12 billion, has watched its stock climb more than 45% this year.
— CNBC's Jasmine Wu contributed to this report.
VIDEO2:2502:25Malls adding virtual reality experiences to boost foot trafficThe Exchange
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f4fcf818162d7b5888def2709efc5aa2 | https://www.cnbc.com/2019/08/02/japan-us-agree-to-speed-up-trade-talks-aimed-at-bilateral-deal.html | Japan, US agree to 'speed up' trade talks aimed at bilateral deal | Japan, US agree to 'speed up' trade talks aimed at bilateral deal
U.S. President Donald Trump welcomed by Japanese Prime Minister Shinzo Abe at the G-20 summit in Osaka, Japan.Kim Kyung-Hoon | Getty Images News | Getty Images
Japan and the United States agreed to accelerate trade talks, Japan's Economy Minister Toshimitsu Motegi said on Thursday after meeting with his U.S. counterpart.
Speaking to reporters following the first day of meetings in Washington, D.C., Motegi said trade talks were progressing but he refrained from commenting on individual items.
"We agreed to speed up talks," Motegi told reporters after the meeting with U.S. Trade Representative Robert Lighthizer.
"There is no doubt that talks are moving along. We have not completely agreed at the moment, so we will deepen our talks."
U.S. President Donald Trump has repeatedly said he is unhappy with Japan's trade surplus with the United States, much of it from auto exports, and wants a bilateral deal to fix it.
Trump has pressured Tokyo to accelerate talks for a bilateral trade deal that would open up Japan's protected agriculture markets, such as beef and rice.
Asked about the prospect for an agreement, Motegi said he and Lighthizer didn't discuss the details of the timing.
"We share the understanding that we don't have much time," Motegi told reporters. They will resume talks Friday.
Bilateral trade talks could speed up as Japanese Prime Minister Shinzo Abe is expected to visit New York in September, where he is expected to meet Trump.
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85ac668388c38bfce858b7dcf6b8edb5 | https://www.cnbc.com/2019/08/02/silicon-valley-is-eyeing-the-giant-market-for-infant-formula.html?&qsearchterm=bobbie | Silicon Valley is eyeing the giant market for infant formula | Silicon Valley is eyeing the giant market for infant formula
Laura Modi, Co-Founder of Bobbie Baby, wants to create a new "European style" infant formula here in the U.S.Katie Brigham
While working at Airbnb, Laura Modi noticed a strange trend among Bay Area mothers.
Many new parents were circumventing U.S. regulators by importing their formulas from Europe.
In Europe, there are different rules around the ingredients that brands are allowed to use in formulas, and some parents believe that European formulas are healthier.
So Modi set about forming a start-up that would essentially recreate European formulas for the U.S. market. She started a new venture, called Bobbie Baby, alongside her former Airbnb colleague Sarah Hardy, and the pair raised $2.5 million in venture capital funding.
But after less than 10 days on the market, the U.S. Food and Drug Administration issued a warning in June to consumers to stop using Bobbie's infant formula. Among its various complaints, the U.S. FDA told parents that the formula was manufactured in Germany and imported to the United States, and that there weren't sufficient nutrients for some infants, especially those born premature or with a low birth weight.
"We were very surprised," said Modi.
Modi explained that the company faced a number of hurdles in manufacturing its product in America. Modi said there are only a handful of approved facilities to manufacture infant formula, and most require a minimum batch of orders that far exceeds what a start-up can realistically achieve in its first months. Modi considered going down a different route, such as the toddler formula market, but she remains committed to working with regulators to bring Bobbie to market as an approved infant formula.
"Toddler is a totally different category, and our mission is to support the infants and new parents," she said.
Bobbie might have struggled in its first months, but the industry is paying close attention to whether it can overcome its challenges.
In Silicon Valley, new tools, technologies and services are increasingly getting financed to help out new parents. Much of this has been focused on fertility, but increasingly, companies are popping up to help mothers nurture their infants, whether it's through new and improved formulas or more comfortable, user-friendly breast pumps.
There are also start-ups forming that aim to work with existing infant formula companies to improve their blends. A start-up called Sugarlogix is using cutting-edge gene editing tools to recreate in a lab the most commonly found breast milk sugars, which are known to be associated with boosting the baby's immune system.
All of these companies are hoping to provide women with more options. The benefits of breastfeeding have been touted by many health institutions, including the World Health Organization, but most parents turn to formula at some point, either as a supplement or alternative to breastmilk. Reasons for the switch might include health problems with the mother or infant, and a lack of maternal leave in the U.S. that makes it hard to nurse.
As a result, the infant formula market alone is expected to reach $95 billion by 2026, making it a lucrative opportunity for new entrants. Currently the space is dominated by such companies as Nestle, Abbott and Danone.
Some mothers, including Leslie Ziegler Schrock, a health entrepreneur who's now writing a book about pregnancy, noted that there's still stigma attached to using formula.
"I thought, why is my body failing me," said Schrock, after she was told that her baby wasn't gaining enough weight and she needed to introduce formula.
Modi from Bobbie agrees with that sentiment.
"I found myself standing in the middle aisle of a pharmacy choosing a formula that felt like the complete opposite of breast milk," said Modi, who struggled to breastfeed because of an infection of the breast tissue called mastitis.
Modi said that Bobbie is finding that U.S. manufacturers are increasingly open to working with her team, as they're seeing the writing on the wall regarding the demand for European formulas.
"It's hard and it should be because we're developing products for a vulnerable population," said Modi. "But it shouldn't be impossible."
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53eafc50385d1be6509647fbc5850193 | https://www.cnbc.com/2019/08/03/us-warned-sweden-of-negative-consequences-over-asap-rocky.html | US warned Sweden of 'negative consequences' if A$AP Rocky wasn't released | US warned Sweden of 'negative consequences' if A$AP Rocky wasn't released
Rapper A$AP Rocky performs onstage during Breakout Festival 2019 at PNE Amphitheatre on June 15, 2019 in Vancouver, Canada.Andrew Chin | Getty Images
The U.S. government warned Sweden of "negative consequences" as it advocated for rapper ASAP Rocky during his trial for assault charges in Stockholm this week, according to a pair of letters released by the Swedish Prosecution Authority.
Rocky was released from jail on Friday pending the verdict, with President Donald Trump celebrating the news on Twitter. "It was a Rocky Week, get home ASAP A$AP!" Trump said.
The rapper landed back on U.S. soil Saturday, leaving behind him the looming verdict in an episode that has led to unexpected tension between the U.S. and its European ally.
According to the letters, obtained by NBC News partner Aftonbladet, the U.S. special presidential envoy for hostage affairs wrote to Swedish prosecutors urging them to release Rocky.
"The government of the United States of America wants to resolve this case as soon as possible to avoid potentially negative consequences to the U.S.-Swedish bilateral relationship," Amb. Robert O'Brien wrote in the letter, dated Wednesday.
In response Sweden's prosecutor-general, Petra Lundh, defended the independence of Swedish courts and said she therefore had to deny O'Brien's requests.
"No other prosecutor, not even I, may interfere with a specific case or try to affect the prosecutor responsible," Lundh wrote in a letter dated Thursday.
The letters marked the latest intervention by U.S. officials in a case that has commanded the attention of figures ranging from the president to Justin Bieber.
Rocky, whose real name is Rakim Mayers, was arrested and charged with assault over a street brawl in the Swedish capital on June 30.
Trump began weighing in on the case last month following outcry from celebrities including reality TV star Kim Kardashian-West and musician Rod Stewart.
Trump said he spoke to Swedish Prime Minister Stefan Löfven asking for his release and "offered to personally vouch for his bail."
Löfven responded to Trump's public pressure, saying the rapper would not get special treatment and that the judicial system was free to act independently without political sway.
The two-time Grammy nominee was in Stockholm headlining Smash x Stadion, a two-day hip-hop festival. He was forced to cancel a flurry of shows on his European tour since his July 3 arrest after a judge determined he would remain in custody because he was a flight risk.
He pleaded not guilty on Tuesday as his high-profile trial kicked off.
O'Brien attended the hearings this week where Rocky told the courtthat he tried to handle the dispute peacefully and reason with two men who had confronted him before a brawl erupted.
The U.S. envoy stressed that Washington was "grateful that I got to attend and observe the judicial process" in Sweden.
Following closing arguments on Friday, a judge ordered Rocky be released from jail pending the verdict.
Despite the U.S. offering assurances that Rocky would not leave Sweden if released, the judge ruled that the rapper could leave the country in the interim.
Rocky shared an emotional post on Instagram after his release, thanking fans for their support during this "very difficult and humbling experience."
A final judgment in the case is expected to be reached Aug. 14.
Read the letters here:
VIDEO1:5201:52Here's why Killer Mike turned down a life-changing record dealSuccess
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776b78543a5ae2c067169dc33aa2ec69 | https://www.cnbc.com/2019/08/05/alan-blinder-trump-could-retaliate-against-china-with-lower-dollar.html | Ex-Fed vice chairman: Don't rule out Trump retaliation against China by seeking a lower dollar | Ex-Fed vice chairman: Don't rule out Trump retaliation against China by seeking a lower dollar
VIDEO4:4304:43Former Fed vice chair Alan Blinder on China's yuan devaluationSquawk Alley
Former Federal Reserve Vice Chairman Alan Blinder told CNBC on Monday that he would not be surprised if the U.S. were to retaliate against China in the currency markets.
Asked whether the Trump administration might try to lower the dollar after China devalued its currency overnight, Blinder said, "I do." But he added that any dollar intervention would not be major.
"The president and the secretary of Treasury have almost said that," Blinder said in a "Squawk Alley" interview, though he did not point to specific instances.
On Monday, China allowed its currency to slide to its lowest level in more than a decade. The yuan, which has long been controlled by China, hit the 7-yuan-per-dollar threshold, a move that makes Chinese exports cheaper and U.S. imports to China more expensive.
The move follows President Donald Trump's announcement last week of new tariffs on the rest of China's imports. The additional levies would take effect on Sept. 1.
Trump on Monday called China's devaluation "currency manipulation," an allegation denied by China's central bank.
TRUMP TWEET
Last month, the president had reportedly looked into ways to weaken the dollar to help boost the economy before next year's election. However, top Trump economic advisor Larry Kudlow and two senior administration officials had confirmed at the time the president decided not to intervene in currency markets. Meanwhile, Treasury Secretary Steven Mnuchin said last month that he would not push in the near term for policies that would weaken the dollar.
Blind said, "One of my fears for a long time as this trade war waxed and waned was that someone, and it turns out to be the Chinese, though Trump would like it to be the Americans, would resort to what we call competitive devaluations."
If the yearlong trade war between the world's two largest economies were to erupt into a full-blown currency war, Blinder argued that "nobody wins."
VIDEO3:5303:53What is currency manipulation?CNBC Explains
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c436bbd0950a542eeb449efbeb8b0ca0 | https://www.cnbc.com/2019/08/05/amazingly-beyond-meat-shares-are-holding-up-as-rest-of-the-stock-market-tanks.html | Amazingly, Beyond Meat shares are holding up as rest of the stock market tanks | Amazingly, Beyond Meat shares are holding up as rest of the stock market tanks
In this photo illustration, packages of Beyond Meat "The Beyond Burger" sit on a table, June 13, 2019 in the Brooklyn borough of New York City.Drew Angerer | Getty Images
During big risk-off days in the stock market, normally its most speculative names get hit the hardest. Even that rule doesn't apply to Beyond Meat.
As markets got hammered by trade war fears on Monday, the newly public alternative meat company is shockingly beating the market, even teetering in positive territory occasionally.
Shares of Beyond Meat were briefly positive in morning trading. They only closed down 0.66%.
The Dow Jones Industrial Average plunged 760 points, while the S&P 500 dropped 2.9% and the Nasdaq Composite dropped 3.4% on Monday as investors worry a U.S. China trade ware is escalating. Last week, President Trump ended a tariff ceasefire with China when he announced the U.S. would levy tariffs of 10% on the remaining $300 billion in Chinese imports. China appears to be retaliating by letting its currency weaken below 7 yuan per dollar and halting its imports of U.S. agricultural products.
VIDEO7:1707:17Beyond Meat's stock must come down before I can call it a buy, Jim Cramer saysMad Money with Jim Cramer
Beyond Meat's stock is no stranger to outperforming the market. It has been a standout stock this year, surging nearly 600% since its initial public offering in May. The move has caused many to liken it to past bubbles in speculative stocks with a lot of hype, but not a lot of revenue yet.
Perhaps one reason why the shares are higher is that a lot of its revenue at this stage is domestically-focused, allowing it be immune from the trade war.
Verizon is one of the only Dow stocks that traded positive on Monday, largely attributed to its hefty dividend.
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69e0346a4209d35019842b22d0e5445d | https://www.cnbc.com/2019/08/05/poland-and-croatia-propose-scrapping-income-taxes-for-young-people.html?utm_source=mandiner&utm_medium=link&utm_campaign=mandiner_202103 | Europe's brain drain is getting worse — so some countries are scrapping income tax for young people | Europe's brain drain is getting worse — so some countries are scrapping income tax for young people
From August 1, 2019, Polish citizens under the age of 26 who earn less than 85,528 zloty ($22,207) a year will no longer have to pay income tax.Jaap Arriens | NurPhoto | Getty Images
Central and Eastern European (CEE) countries are proposing radical tax incentives for young people, as part of a drive to stem the flow of skilled workers to Western EU states.
A so-called 'brain drain' is dimming the economic prospects of some CEE countries, with young people disproportionately making the most of the bloc's freedom of movement in search of better paid jobs.
It has prompted Poland's government to completely scrap income taxes for approximately 2 million young workers.
The new law — which came into effect at the start of the month — is designed to help retain young Polish citizens.
When advocating for the law in parliament, Prime Minister Mateusz Morawiecki said 1.7 million people had left the country in the past 15 years.
It is "as if the entire city of Warsaw has left," he said, before describing the demographic decline as a "gigantic loss."
To be sure, Polish citizens under the age of 26 who earn less than 85,528 zloty ($22,207) a year will now no longer have to pay income tax.
The average salary is around 60,000 zloty — meaning the threshold is comparatively high for young people in Poland.
Meanwhile, Croatia has also proposed to scrap income tax for people up to 25 years of age and cut it by half for people aged between 25 to 30.
The proposed changes are expected to be completed over the coming months, with new legislation set to take effect from January 1, 2020.
However, analysts told CNBC they had strong doubts about whether such tax relief measures would prevent the drain of young workers.
The fundamental problem is that while these popular stopgap measures are well-meaning, they ultimately "fail to address the root cause" of the brain drain phenomenon, Prianthi Roy, analyst at the Economist Intelligence Unit (EIU), told CNBC via telephone.
Roy said tax breaks for young people in CEE countries had been proposed to "reverse the tide of a shrinking workforce" — a trend which is likely to be the most prominent long-term drag to economic growth in the region.
Tourists walk in silhouette across the river from the London Eye, one of the most famous landmarks, skylines and iconic buildings in the capital in London, England, United Kingdom.Mike Kemp | In Pictures | Getty Images
Declining birth rates, an increasing trend of young people moving abroad and a government-led refusal to allow immigrants to join the labor market had "skewed the dependency ratio" in these countries, Roy said, before adding this problem was just "going to get worse and worse."
"Ultimately, it will start to weigh on fiscal balance and economic growth. So, parity with the West is not going to be possible. It is just never going to happen."
In 2017, almost 17 million people based in the bloc moved to another EU country, of which 32% were aged between 15 and 34, according to an official EU report.
Germany and the U.K. were found to be the top two destinations for young European citizens, while the top countries of origin were Romania, Poland, Italy and Portugal.
Highly-educated European movers were more likely to favor urban settings and northern areas of the EU, the report said, citing Sweden, Ireland, Estonia, Denmark and the U.K.
They also usually enjoy very high employment rates, it added.
"It is not just a wage differential. It could be young people want to move abroad for a new cultural experience or it might be because they simply do not see a long-term future for themselves at home," Otilia Dhand, senior vice president at research firm Teneo Intelligence, told CNBC via telephone.
"The political solutions that are being proposed do not necessarily address the issue of labor migration," Dhand said.
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d32aa7bce3ed11f9afa1c515500bd8b0 | https://www.cnbc.com/2019/08/05/trump-claims-he-wants-strong-background-checks-on-guns.html | Trump claims he wants 'strong background checks' on guns | Trump claims he wants 'strong background checks' on guns
President Donald TrumpChip Somodevilla | Getty Images
President Donald Trump says Washington "must come together" in the wake of two mass shootings this weekend to "get strong background checks" for gun users. But he is providing no details on what sort of legislation he would support.
Trump, who will make remarks later Monday, tweeted about the weekend shootings in Texas and Ohio that left 29 dead and dozens wounded. He said: "We can never forget them, and those many who came before them."
Trump tweet 1
The Democrat-led House has passed a gun control bill that includes fixes to the nation's firearm background check system, but it has languished in the GOP-controlled Senate.
Trump suggested Monday that a background check bill could be paired with his long-sought effort to toughen the nation's immigration system. But he didn't say how.
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ad4595b962e3d52ef9888af6fe6a3e1c | https://www.cnbc.com/2019/08/06/apple-filemaker-subsidiary-renamed-claris.html | An Apple subsidiary once led by legendary Silicon Valley 'coach' Bill Campbell is getting a complete rebrand | An Apple subsidiary once led by legendary Silicon Valley 'coach' Bill Campbell is getting a complete rebrand
A little-known subsidiary of Apple is getting a fresh coat of paint: FileMaker is no more, CEO Brad Freitag said in an interview.
Instead, it's going back to its original name, Claris, although it will continue to sell FileMaker Pro, software for developers that enables teams and smaller companies to build custom apps without a big IT department.
The rebrand of a subsidiary that has little to do with the iPhone highlights that Apple is a middle-aged company as tech giants go: It has a lot of history and has some legacy parts that are only tangentially linked with the company's current primary business centered around selling mobile devices.
Claris started as Apple's in-house database program, and there was a plan to spin it off from Apple in the late 1980s under Bill Campbell, an executive and business coach who was close to Apple co-founder Steve Jobs and other Silicon Valley stars. It never went public and remained an Apple subsidiary.
"We thought it was really important to acknowledge our legacy, and hold on to our 50,000 current customers," Freitag said.
Freitag is relatively new in the top role, taking over the CEO position earlier this year from Dominique Goupil, who had led FileMaker for more than 20 years.
For most of that time, the subsidiary has had one main product: FileMaker Pro, which is what can be called a "low code" program for making custom apps for businesses that don't want to hire outside development help. It competes with similar enterprise products from Microsoft and Oracle. For example, FileMaker can be used to manage the inventory of a small business or automate functions like payroll, Claris evangelist Andy LeCates said.
Claris software works across various platforms, including Microsoft Windows, but the Filemaker app for iPhones and iPads is a strength for the company, and it has over 4 million downloads, Freitag said.
Claris is also launching a second enterprise product over the next year, Claris Connect, which is based on its recent acquisition of an enterprise start-up called Stamplay and led by its founder Giuliano Iacobelli. It will enable users to connect and integrate services like Slack and Dropbox with their FileMaker Pro apps.
Claris is transitioning away from a business model where it runs on servers owned and operated by companies that purchase the software outright to a monthly subscription model of about $15 per person per month, Freitag said.
Apple does not disclose FileMaker sales. It is not included in an SEC filing last year listing company subsidiaries, suggesting that Apple does not consider it a "significant subsidiary." Filemaker has 500 employees and is profitable — and has been for more 20 years, Freitag said.
Apple has its own enterprise business, but much of what it does focuses on selling computers, not software, and it relies on partnerships with IBM and SAP to help businesses build custom apps.
Filemaker runs independently from Apple in its own offices and has autonomy, but there are still signs of its corporate parent, Freitag said. For example, Filemaker's offices in Santa Clara, California, have a Caffe Macs, the name of Apple's on-campus cafe.
Correction: This story has been updated with the correct price for a FileMaker subscription.
WATCH: First impressions of Apple's new Mac Pro
VIDEO2:2102:21First impressions of Apple's new Mac ProTech
Follow @CNBCtech on Twitter for the latest tech industry news.
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ae7926928e5d4127b208870352d96c99 | https://www.cnbc.com/2019/08/06/as-the-market-swings-four-of-your-top-market-questions-answered.html | Not sure what to do amid this market volatility? Here are the answers to your top questions | Not sure what to do amid this market volatility? Here are the answers to your top questions
VIDEO2:5002:50The market is in another correction, says Hennessy Funds CIOThe Exchange
If the market's wild ride has you confused about your next investment move, you aren't alone.
You may be wondering, ``Do I really do nothing with my stocks or 401(k), like many advisors suggest?" or "when is the right time to buy or sell?"
No one likes to lose money, but panicking isn't the right answer, either.
Changes to one's investments and financial plan under pressure raises the opportunity to make mistakes, which could be costly now and in the future.Mitch Goldberg,ClientFirst Strategy
In fact, experts say you should be prepared for market downturns.
"I tell clients and prospective clients that if a bear market is all it takes to ruin your financial future, then you're not investing and planning correctly," said Mitch Goldberg, president of ClientFirst Strategy, an investment firm that caters to individual investors.
The sell-off began last week when President Donald Trump announced the U.S. would slap tariffs on $300 billion worth of Chinese goods next month. The slide continued on Monday, leading to the worst trading session of 2019, after Chinese authorities let the country's currency, the yuan, decline to its lowest level against the U.S. dollar in more than 10 years.
Chinese President Xi Jinping shakes hands with President Donald Trump before a bilateral meeting during the G20 Summit on June 29, 2019 in Osaka, Japan.China News Service | Getty Images
On Tuesday, the market seesawed after there was some easing of concerns surrounding currencies and trade.
So what should you do with your investments amid all this volatility? Goldberg has the answers to four of the most common questions.
1. Why is the market so volatile right now?
The main reason for this most recent sell-off is [...] Trump's latest tariffs.
But beneath the surface, there are deeper issues that need to be taken into consideration for a full understanding of why stocks are selling off.
For starters, stocks, generally speaking, are considered expensive. Globally, manufacturing is in a funk in many parts of the world. Since the cost of tariffs have to be passed on to someone, retailers have to either absorb the extra costs and take a hit to their already razor-thin margins or pass the costs on to consumers and risk their ire.
More from Invest in You:Deepak Chopra's tips for calm amid market 'melodrama'Do nothing amid market volatility? Depends on your ageDo this with your 401(k) as the market tanks
This year is also setting up to be a record for store closings, which could affect holders of commercial mortgages negatively. Iran is storing millions of barrels of oil in China, which could purchase those barrels at a discount and flood the market. This could hurt manufacturing in the U.S. and hurt energy companies. China is imposing a ban on American agriculture products.
And the big, huge wild card is whether or not China lets its currency weaken substantially against the U.S. dollar, which would negate the harm from tariffs to them but leave American consumers with nothing to show for the trade war except for higher consumer prices.
All in all, it's the sheer weight of all of these issues and others that are weighing on investor sentiment.
2. Why is it a bad idea to sell right now?
Presumably, investors are invested according to their own risk tolerance, time horizon and goals. If this is truly the case for someone, then this recent downtick is really just part of the expected possibilities.
But the people who haven't aligned their investments with those three objectives will be the ones caught flat-footed and will be under pressure to make hasty investment decisions. Changes to one's investments and financial plan under pressure raises the opportunity to make mistakes, which could be costly now and in the future.
Traders on the floor of the New York Stock Exchange.Getty Images
The good news is that the major U.S. stock market averages are still solidly in positive territory this year and are still well above the levels they sank to last Christmas Eve. So, it's not too late to make the necessary adjustments to one's investments.
Past corrections over the last 10 years have recovered quickly, which has made a lot of investors complacent. Remember, we are all 10 years older since the Great Recession. This means that, for a lot of people, they're too close to their retirement to be taking on the same level of risk that they took on back then.
For the younger set, I'll say 40 and under, you should welcome a downturn in stocks. A correction and even a bear market is your friend. Just keep plowing money into your long-term investment accounts because your investments could become supercharged when we hit the next peak, which has always happened.
3. Should I make any changes to my 401(k)?
Before you make any hasty changes to your 401(k), just sit back for a moment and figure out about when you'll need it to live off of. It may go without saying, but the further away that time is, the more aggressive with your investment choices you could be.
Young people — again, under 40 — should be in stocks. By the time you hit your 50s, your asset allocation should start to include fixed income and money markets, the more stable kind of investments.
This advice is generalized and everyone's situation is unique, so everyone really needs to do some analysis to evaluate their own situation. I consider one's time horizon to be the determinant of one's risk tolerance.
VIDEO6:1906:19Josh Brown: You can make the case for a market pauseHalftime Report
4. How much longer should I wait to buy or sell?
This may sound counter-intuitive, but when faced with the "when" decision to buy or sell investments, put aside external factors like what you're reading and watching in the news and focus on your internal needs; your three key objectives, time horizon, risk tolerance and financial goals.
For example, if you are contributing to your 401(k) every month and you have 20 or more years until retirement, the best time to buy is now and make time your asset.
When you're closer to needing to take IRA distributions from your 401(k) rollover, time becomes your liability and you'll most likely need to sell according to the timing of your distributions.
Regardless of which side of this equation you're on, external factors such as a nasty week in the stock market has little to now bearing on the answer.
CHECK OUT: 3 mental shifts that can help you save money for a home via Grow with Acorns+CNBC.
Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.
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9a1bead4e2845ed489cfe013db923411 | https://www.cnbc.com/2019/08/06/kevin-oleary-says-hes-encouraged-by-trumps-new-ideas-on-china-trade.html | 'Mr. Wonderful' Kevin O'Leary likes Trump's 'new ideas' on China — the president takes notice | 'Mr. Wonderful' Kevin O'Leary likes Trump's 'new ideas' on China — the president takes notice
VIDEO1:4301:43Kevin O'Leary says he likes Trump's 'new ideas' on US-China trade warHalftime Report
"Mr. Wonderful" Kevin O'Leary told CNBC on Tuesday that he's encouraged by President Donald Trump's "new ideas" on trade amid the U.S. conflict with China.
"I like what this administration is doing by being ... trying new ideas" on trade, O'Leary said on "Fast Money Halftime Report." "Because to me it's starting to work."
O'Leary, often referred to as 'Mr. Wonderful' on "Shark Tank," made the comment in response to tweets from the president earlier Tuesday.
Trump complimented the "Shark Tank" investor and "Mad Money" host Jim Cramer, who has also been generally supportive of the White House approach to China.
Tweet 1
As shown in the tweet, O'Leary said on CNBC that "I'm really tired of the last 15 years. Finally an administration that's batting for the guy that puts his capital up there and gets screwed over and over again."
Tweet 2
In response to O'Leary, Cramer said, "I'm listening to Mr. Wonderful and I think Mr. Wonderful is dead right on everything because it's factual. It's empirical and thank you for speaking the truth."
He also added, "This is the strongest I've ever seen in the economy and it's also an unbelievable moment in terms of inflation. It's just not there. Why do we need the Chinese at all?"
The U.S. Treasury Department on Monday designated China a currency manipulator, a move that has not been seen since the Clinton administration. U.S. stocks had been selling off since Trump announced last week he would impose new tariffs on Chinese goods.
China, which has historically controlled its currency, allowed the yuan to fall to its lowest level in more than a decade earlier Monday. The Chinese currency has not broke over the 7 level against the dollar since the global financial crisis in 2008.
After the currency move, U.S. stocks plunged Monday. The market recovered some of the lost ground on Tuesday after China set a path for the yuan to strengthen.
Disclosure: CNBC owns the exclusive off-network cable rights to "Shark Tank."
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38f31babdd26aa290067a36509c7a450 | https://www.cnbc.com/2019/08/06/not-yet-over-stocks-have-further-to-fall-before-the-selling-subsides-say-chart-analysts.html | 'Not yet over' — stocks have further to fall before the selling subsides, say chart analysts | 'Not yet over' — stocks have further to fall before the selling subsides, say chart analysts
VIDEO4:4704:47Markets are worried because China doesn't see a clear trade solution, strategist saysSquawk Box
Wall Street's summer swoon likely isn't over yet.
Several chart analysts are pointing out that while the market has dropped sharply over the past few days, it still has a long way to go before a sustainable bottom can be reached. Even with a slight rebound on Tuesday.
The S&P 500 has nose-dived more than 6% since reaching a record high last month as the U.S.-China trade war intensified, leading investors to dump equities in favor of safer assets like Treasurys and gold. The sharp drop pushed the broad market index through key technical support levels and dented a massive year-to-date rally in stocks.
"This is a corrective phase in an upward trend that's not yet over," John Roque, technical analyst at Wolfe Research, told CNBC's "Squawk Box" on Tuesday.
The recent wave of selling came after President Donald Trump tweeted Thursday that the U.S. will impose a 10% tariff on $300 billion worth of Chinese goods starting Sept. 1 as trade talks between the two countries struggle to progress. The targeted goods for tariffs include several consumer products, such as Apple iPhones and computers.
Tweet
China retaliated by suspending the purchase of U.S. agricultural products and letting its currency, the yuan, weaken to its lowest level against the dollar in more than a decade. The S&P 500 has sliced through key technical levels like the 50-day and 100-day moving averages amid the rising tensions between the world's largest economies.
Frank Cappelleri, executive director at Instinet, said in a note that the S&P 500's "bullish patterns officially are voided" with these drops, noting that the S&P 500's 200-day moving average is the level being closely watched by traders and investors.
"Since the May low, the comeback has produced a number of bullish formations," Cappelleri told CNBC. This current sell-off "has been so sharp, what's going to have to happen is to watch the ensuing bounce and see how strong or not it is. ... It's interesting because some of these moves are some of the largest we've seen all year."
Source: Instinet
The S&P 500 — along with the Dow Jones Industrial Average and Nasdaq Composite — posted its biggest one-day drop of 2019 on Monday, plummeting nearly 3%. Last week, the broad index had its largest weekly decline of the year after Trump's tweet and the Federal Reserve failing to signal aggressive monetary easing later this year.
But the selling is not over yet, if history is any indication.
VIDEO3:4203:42US-China trade tensions are on the rise—Four experts on what to watchTrading Nation
Data compiled by Bespoke Investment Group also shows these types of minor pullbacks take some time to run their course. The firm looked at all the retreats of at least 5% during the current bull market. On average, these pullbacks last 28 days and the S&P 500 averages a decline of 8.36%.
Michael Arone, chief investment strategist at State Street Global Advisors, said individual stocks need to fall more before the market can find a bottom.
"Around 20%–30% of stocks reached a 20-day low on Friday. That needs to get to 60%–70% before we find a bottom," he said. "So it seems like perhaps like the onset of a typical market correction. It wouldn't surprise me as investors recalibrate their Fed and trade expectations that the market suffers a correction."
Stocks tried to regain some of their steep losses on Tuesday, with the S&P 500 gaining 0.5%. Investors got some relief after the People's Bank of China set the yuan at a stronger-than-expected rate overnight against the dollar, stabilizing the currency that has become a focus of the trade war.
Tony Dwyer, chief market strategist at Canaccord Genuity, pointed out that just 26% of stocks are trading above their 50-day moving average, "indicating at least a temporary respite from selling." However, the weekly stochastic indicator — a technical gauge of momentum in the market — is still "a good distance away from suggesting an intermediate-term low."
Andrew Thrasher, founder of Thrasher Analytics, said that just 10.5% of S&P 500 stocks are trading above their 20-day moving average which is around the level the market rebounded from its May swoon.
But "I'm not seeing major signs of capitulation just yet. Price action is being driven by news catalysts and while the move down has been short and volatility is extended to the upside, this isn't quite the 'blood in the streets' type environment like we saw at the December 2018 low."
— CNBC's Michael Bloom contributed to this report.
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da52e7bc50a1551d971851986768dff1 | https://www.cnbc.com/2019/08/06/walgreens-to-close-200-stores-in-us.html?__source=sharebar%7Ctwitter&par=sharebar | Walgreens to close 200 US stores | Walgreens to close 200 US stores
VIDEO1:0001:00Walgreens plans to close 200 US storesNews Videos
Walgreens plans to shutter 200 stores in the U.S. as the company pares back its locations in the U.K., the company said Tuesday.
Parent company Walgreens Boots Alliance earlier this year announced plans to shutter 200 stores in the U.K. and review its U.S. footprint.
The new store closures represent less than 3% of its 10,000 locations in the U.S., Walgreens said in a statement, adding that it anticipates "minimal disruption to customers and patients." It said it anticipates retaining "the majority" of employees in other nearby locations.
Walgreens said it hopes to save $1.5 billion in annual expenses by fiscal 2022 in what it's calling the "transformational cost management program." Walgreens expects to record a $1.9 billion to $2.4 billion earnings hit related to real estate, severance and other costs, it said in a regulatory filing.
"As previously announced, we are undertaking a transformational cost management program to accelerate the ongoing transformation of our business, enable investments in key areas and to become a more efficient enterprise," the company said in a statement.
A Walgreens spokesman said the company does not plan to release the complete list of store closures and declined to share any more details about which locations will close.
Analysts have long worried about the number of pharmacies in the U.S. In some cities, it seems Walgreens and CVS stores line nearly every block. Worsening the situation is the fact that consumers are shopping more online and less in stores.
Retailers have already shuttered thousands of stores as foot traffic dwindles. Drugstores have so far been largely spared. That could change as the companies' sales of convenience items shrink and people start buying prescription drugs online.
The announcement marks Walgreens' largest round of closures since 2015, when it also closed 200 stores. Its parent company, which bought 1,932 Rite Aid locations in 2018, has since closed 631 of those stores and plans to shutter another 119.
In May, CVS said it would close 46 underperforming stores. In June, CVS' head of retail warned it will close unprofitable stores as it evaluates its 500 leases that come up for renewal every year.
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a623e2692bc962c0df44379580a77474 | https://www.cnbc.com/2019/08/07/asia-stocks-august-7-chinese-yuan-us-china-trade-war.html | Asia shares mixed as China sets the yuan midpoint slightly weaker than expected | Asia shares mixed as China sets the yuan midpoint slightly weaker than expected
Asia Pacific stocks traded mixed on Wednesday as investors kept a close watch on the Chinese yuan amid an escalating trade dispute between the U.S. and China.
The People's Bank of China (PBOC) set the the official midpoint reference for the yuan at 6.9996 per dollar, which was slightly weaker than market expectations. China's central bank allows the exchange rate to rise or fall 2% from that number.
Mainland Chinese shares declined on the day: The Shanghai composite shed 0.32% to about 2,768.68, the Shenzhen component fell 0.5% to 8,814.74 and the Shenzhen composite fell 0.427% to around 1,483.95.
The Japanese benchmark Nikkei 225 slipped 0.33% to close at 20,516.56, with index heavyweight and robot maker Fanuc shedding 1.56%. The Topix index, on the other hand, finished the trading day in Tokyo slightly higher at 1,499.93.
SoftBank Group shares slid 0.23%. After market close, the Japanese conglomerate reported quarterly operating income for the three months that ended June 30: It fell 3.7% on-year to 688.8 billion yen ($6.49 billion) but it still beat analysts' expectations. Operating income from SoftBank's Saudi-backed Vision Fund and Delta Fund rose almost 66% to 397.6 billion yen for the quarter.
South Korea's Kospi closed 0.41% lower at 1,909.71 as shares of industry heavyweight Samsung Electronics slipped 0.69%. Over in Australia, the S&P/ASX 200 ended its trading day 0.64% higher at 6,519.50.
In Hong Kong, the Hang Seng index fell 0.14%, as of its final hour of trading. Hong Kong-listed shares of Chinese electric vehicle maker BYD dropped more than 5% after the company reported that its July sales volume fell about 17% compared to a year earlier. The firm's Shenzhen-listed shares slipped 1.11%.
Overall, the MSCI Asia ex-Japan index was lower by 0.05%.
The onshore yuan changed hands at 7.0397 per dollar. Its offshore counterpart, which last traded at 7.0725 against the dollar, is used by foreign investors and banks.
The yuan broke a closely watched level of 7 against the dollar on Monday, sending markets across the globe into a frenzy and leading the U.S. Treasury Department to label China as a currency manipulator.
For its part, the PBOC rejected the U.S. Treasury's claims on Tuesday, saying that the "United States disregards the facts and unreasonably affixes China with the label of 'currency manipulators,' which is a behavior that harms others and oneself."
Markets are "still grappling with the escalation in trade tension as the yuan depreciated through the key level of 7 to the (dollar), and the US labelled China a currency manipulator," analysts from ANZ Research wrote in a morning note.
The Chinese central bank's "stronger-than-expected fixing of the yuan yesterday and reiteration that it won't seek to competitive depreciate, helped stabilise markets," the ANZ analysts added.
Those moves came after U.S. President Donald Trump unexpectedly announced late last week that fresh tariffs would be slapped on additional Chinese exports from Sept. 1, intensifying the trade war between Beijing and Washington.
"The decision by (Chinese President) Xi Jinping to allow the (yuan) to dip a little bit is the Chinese equivalent of a tweet," Daniel Russel, former assistant secretary of state for East Asian and Pacific Affairs, told CNBC's "Street Signs" on Wednesday.
"It's a signal to the U.S., it's a signal to Donald Trump. It says: 'Hey if you want to fight you're gonna take a few punches,'" Russel added. "China's not gonna rollover, China's a big country, a big economy and it politically simply won't allow itself to be bullied."
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.583, declining from an earlier high of 97.851.
The Japanese yen traded at 106.19 against the dollar after earlier touching a low of 106.47. The Australian dollar changed hands at $0.6716, falling from an earlier high of $0.6782.
The New Zealand dollar dived more than 1.5% to change hands at $0.6404 after the country's reserve bank surprised markets and slashed its official cash rate by 50 basis points, to an all-time low of 1%.
The Indian rupee traded about 0.5% higher at 70.683 against the dollar, with the Reserve Bank of India cutting rates by 35 basis points on Wednesday.
Oil prices slipped in the afternoon of Asian trading hours, as international benchmark Brent crude futures declined 0.37% to $58.72 per barrel. U.S. crude futures also fell 0.21% to $53.52 per barrel.
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fc144a99fb96a65438953d246e277bdc | https://www.cnbc.com/2019/08/07/dupont-considers-sale-of-nutrition-and-biosciences-unit-bloomberg.html | DuPont considers sale of nutrition and biosciences unit: Bloomberg | DuPont considers sale of nutrition and biosciences unit: Bloomberg
Dupont corporate headquarters in Wilmington, Delaware.Getty Images
Industrial materials maker DuPont is considering a sale of its nutrition and biosciences unit, Bloomberg reported on Tuesday, citing people familiar with the matter.
The unit, which supplies everything from soy-based food ingredients to tablet binders, could be worth at least $20 billion as a standalone entity, Bloomberg said.
DuPont declined to comment on the unit's divestiture.
The Wilmington, Delaware-based company said in February that its overall goal was to divest about 10% of its portfolio.
DuPont was a part of DowDupont until a split earlier this year.
The nutrition and biosciences unit, DuPont's biggest revenue generator in 2018 on a pro-forma basis, was hit by lower sales of food, beverage and pharma solutions in the latest reported quarter, and brought in 4% lower sales than a year earlier.
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b64c9374b5bd96f7a5c2a7163c8cd956 | https://www.cnbc.com/2019/08/07/south-korean-imports-of-japanese-beer-nearly-halve.html | South Korean imports of Japanese beer nearly halve amid consumer backlash | South Korean imports of Japanese beer nearly halve amid consumer backlash
A close up of stacks of plastic red, white, and yellow crates containing Asahi beer and soft drink bottles in Japan, on September 9, 2018Christian Ouellet | iStock Editorial | Getty Images
South Korean imports of Japanese beer slumped 45% in July from the previous month in the wake of a consumer boycott sparked by an escalating political and economic dispute between the two Asian neighbors, data showed.
Japan shipped $4.3 million worth of beer to South Korea in July, down from $6.6 million a year earlier and $7.9 million in June, according to preliminary customs office data provided by lawmaker Kim Jung-woo to Reuters.
On July 4, Japan tightened export controls for materials used to make chips, South Korea's top export item, intensifying a row over wartime forced labor and inviting a consumer backlash in Korea.
Such anger has prompted a widespread boycott of Japanese products and services, from beer, clothes and cars to travel.
Many supermarkets and convenience stores have been removing Japanese items such as beer from their stands and stopping new orders.
South Korea buys 61% of Japan's beer exports, spending 7.9 billion yen ($73 million) in 2018 for the shipments, according to Japan's finance ministry.
Asahi Group Holdings said last week the spread of the South Korean consumer boycott of Japanese goods was affecting its beer sales as it lowered its profit guidance slightly.
A boycott campaign is expected to grow as Japan is taking steps to remove Korea's fast-track export status, industry officials and experts say.
Japanese automakers such as Toyota and Honda are bracing for further sales drops in South Korea in the coming months, after they posted sharp sales declines last month.
A slew of South Korean airlines are also suspending flights to Japan as they brace for a dwindling number of tourists. South Korea's second-largest carrier Asiana Airlines and budget carrier Eastar Jet said on Wednesday they would temporarily halt a combined four more flights between Korea and Japan.
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c354726b3ad99f45d97943278b1aff49 | https://www.cnbc.com/2019/08/07/the-direction-of-the-us-stock-market-is-being-determined-by-chinas-currency-right-now.html | The direction of the US stock market is being determined by China's currency right now | The direction of the US stock market is being determined by China's currency right now
Traders and financial professionals work ahead of the closing bell on the floor of the New York Stock Exchange.Drew Angerer | Getty Images
Wall Street is obsessed with the yuan right now.
At 9:44 a.m. ET, the Chinese offshore currency hit an intraday low against the dollar. Merely two minutes later, the S&P 500 slumped to the low of the day of 2,824.45. Stocks quickly rebounded in the afternoon with the S&P 500 erasing a 2% loss just when the yuan started to stabilize.
Source: Koyfin.com
(The above chart shows the U.S. dollar-yuan, so an increase in the line means the currency is weakening vs. the dollar.)
The yuan came to the limelight after China weaponized the currency in the trade war with the U.S. to retaliate against President Donald Trump's tariffs. China on Monday allowed the currency to breach a psychological level — 7 against the dollar — for the first time since 2008, which triggered a deep sell-off with major stock averages suffering their worst days of the year.
The simple explanation is this: If the yuan is falling, it means China is letting it decline to ease the effects of the tariffs and to poke Trump. That in turn means the trade war could drag on further and damage the global economy.
During these wild intraday swings, traders are left searching for answers.
VIDEO5:0605:06China sets the yuan midpoint at its weakest level since April 2008Squawk Box
"It's an extraordinarily frustrating market in that the SPX is swinging several percent in a matter of hours based on no fundamental news," Adam Crisafulli, a J.P. Morgan managing director, said in a note midday Wednesday.
But a look at the charts shows the yuan was dictating trading on Wednesday and has been the last three sessions. And it may be influencing the move in U.S. bond yields as well.
The currency is now a big driver of market volatility as the rolling three-month daily return correlation between the offshore yuan and the Cboe Volatility Index is at all-time highs, according to Maxwell Grinacoff, a derivatives and quantitative strategist at Macro Risk Advisors.
The VIX, AKA Wall Street's fear gauge, popped to the highest in 2019 on Monday amid the violent sell-off as the yuan's level sent shock waves through financial markets.
Every night at 9 p.m. ET, the People's Bank of China fixes a level at which the yuan will trade against the dollar within China. The central bank last night set the yuan midpoint at 6.9996 per dollar, slightly weaker than expected.
People's Bank of China insisted that China did "not engage in competitive devaluation." Nonetheless, the U.S. Treasury Department declared China as a currency manipulator after letting the yuan break the key level.
–CNBC's Fred Imbert contributed reporting.
WATCH: Fmr. Treasury Sec. Jack Lew on yuan devaluation
VIDEO5:4805:48Fmr. US Treasury Sec. Jack Lew on China's devaluation of the yuanClosing Bell
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799f241b26bfc5eddd8857ea8edfa810 | https://www.cnbc.com/2019/08/07/us-appeals-court-voids-googles-cookie-privacy-settlement-that-paid-users-nothing.html | US appeals court voids Google's 'cookie' privacy settlement that paid users nothing | US appeals court voids Google's 'cookie' privacy settlement that paid users nothing
A federal appeals court on Tuesday struck down Google's class-action settlement meant to resolve claims it invaded the privacy of millions of computer users by installing "cookies" in their browsers, but paying those users nothing for their troubles.
In a 3-0 decision, the 3rd U.S. Circuit Court of Appeals in Philadelphia said it could not tell whether the $5.5 million settlement was fair, reasonable and adequate, and said a lower court judge should revisit the case.
Google, a unit of Alphabet, had been accused of exploiting loopholes in Apple's Safari and Microsoft's Internet Explorer browsers to help advertisers bypass cookie blockers.
The settlement approved in February 2017 by U.S. District Judge Sue Robinson in Delaware called for Google to stop using cookies for Safari browsers, and pay the $5.5 million mainly to the plaintiffs' lawyers and six groups, including some with prior Google ties, to research and promote browser privacy.
Google CEO Sundar Pichai speaks during the Google I/O keynote session at Shoreline Amphitheatre in Mountain View, California on May 7, 2019.Josh Edelson | AFP | Getty Images
But in Tuesday's decision, Circuit Judge Thomas Ambro said the settlement raised a "red flag" and possible due process concerns because it broadly released money damages claims.
He also called the awards to the privacy groups "particularly concerning." The case was returned to the Delaware court.
Lawyers for Google and the plaintiffs, who both supported the settlement, did not respond to requests for comment.
The decision is a victory for Ted Frank, the litigation director at the Hamilton Lincoln Law Institute and prominent critic of many class-action settlements.
Frank said the money awarded to the privacy groups, under a legal doctrine known as cy pres, should have gone to class members like himself. He drew support from a bipartisan group of 13 state attorneys general led by Arizona's Mark Brnovich.
Cy pres, meaning "as near as possible," is sometimes used in settlements covering large numbers of class members who might otherwise stand to receive only tiny amounts.
Google has faced this issue before, suffering a setback in March when the U.S. Supreme Court questioned the legitimacy of a separate $8.5 million privacy settlement involving cy pres.
Ambro noted that Chief Justice John Roberts has expressed concerns about cy pres, and said many federal courts view cy pres awards with "skepticism" because they could prompt class counsel to put their own interests ahead of their clients'.
Google agreed in 2012 and 2013 to pay $39.5 million to settle federal and state charges that it secretly tracked Safari users' internet use. It did not admit wrongdoing.
The case is In re: Google Inc Cookie Placement Consumer Privacy Litigation, 3rd U.S. Circuit Court of Appeals, No. 17-1480.
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1636b69577d40059b80dca04f1a39558 | https://www.cnbc.com/2019/08/07/walmart-employees-call-for-walkout-over-gun-sales.html | Walmart employees call for walkout over gun sales | Walmart employees call for walkout over gun sales
Walmart employees pay their respects at a makeshift memorial for the shooting victims, at the Cielo Vista Mall Walmart in El Paso, Texas, on August 6, 2019. - The August 3 shooting left 22 people dead. US President Donald Trump will visit the Texan border city August 7, and will also travel to Dayton, Ohio where a second mass shooting early August 4 left another nine deadMARK RALSTON/AFP/Getty Images
In the wake of the weekend's deadly shootings in El Paso, Texas, and Dayton, Ohio, a pair of Walmart employees are joining a number of gun control advocates, questioning the retail chain's sale of guns and ammunition and encouraging other employees to join in their protest.
Thomas Marshall, 23, a Walmart employee based in San Bruno, California, used email and internal Walmart Slack channels to reach out to fellow employees this week, encouraging them to call in sick Tuesday, to take part in a walkout Wednesday and to sign a Change.org petition that calls for an end to the sale of guns and ammunition in all Walmart stores.
More from NBC News:State Department worker had secret other life as white nationalist Right Stuff leader, civil rights group saysBodies found in manhunt believed to be of Canadian teens suspected in killing spreeState Department worker had secret other life as white nationalist Right Stuff leader, civil rights group says
"We are all concerned employees, and Walmart says it values the outlook of its employees," Marshall told NBC News. "We feel as if we can make a noticeable difference."
Marshall said he's troubled by Walmart's decision to continue to sell firearms, even after the mass shooting in one of its own stores in El Paso killed at least 22 Saturday.
"If I do wind up getting fired for this, that is a risk I am willing to take," Marshall said on MSNBC on Wednesday.
According to Walmart spokesperson Randy Hargrove, approximately half of the 4,700 Walmarts in the United States sell guns and many more sell ammunition. Hargrove said that there are no plans to change the retail giant's policies since the weekend shootings or as a result of Marshall's call for an employee walkout.
"There's been no change to our policy regarding firearms," Hargrove said. "Our focus has been on our associates and the entire El Paso community."
Assisting Marshall with gun sales protest efforts is another Walmart employee, Kate Kesner.
Kesner and Marshall said that their work accounts were disabled by Walmart after they attempted to organize the protests.
Hargrove confirmed that those company accounts had been suspended and would remain suspended until the employees return to work. He said Marshall has not been suspended or terminated as a result of his recent activities.
Marshall said that he has received widespread support for his protest efforts, and that walkouts were expected to take place Wednesday at the Walmart labs in Portland, Oregon; the Walmart-owned Jet.com e-commerce office in Hoboken, New Jersey; and at his Walmart office location in San Bruno.
Gun control advocates have argued that Walmart should discontinue the sale of all guns and ammunition in the wake of the growing number of mass shootings.
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18973f820a7567b7d3ae53521b9a5c7f | https://www.cnbc.com/2019/08/08/google-maps-ar-directions-released-for-iphones-and-android.html | A fun new Google Maps feature shows walking directions on top of real-world images | A fun new Google Maps feature shows walking directions on top of real-world images
Google Maps AR directions.Google
Google on Thursday announced that it's rolling out a beta version of its Google Maps AR directions feature for Android and iPhones.
Google Maps AR, which stands for augmented reality, places digital directions on top of the real world to show you where to walk. If you want to head to the bakery, you stop and look at your phone, which will have big arrows showing you exactly where to go. It can recognize buildings and other points of interest, so it's even harder to get lost than if you're simply looking at a flat map.
This was first tested with a small batch of Google Maps users back in March, when I gave it a try on my iPhone. It worked really well then, and now people with iPhones that support ARKit (iPhone 6s and newer) and ARCore Android phones (most high-end models released in recent years) will see the feature beginning this week.
To try for yourself, just check for a Google Maps update on your iPhone or Android phone. If it supports AR, you should have it by the end of the week.
Here's what my experience was like:
Using the AR feature in Google MapsTodd Haselton | CNBC
Using the AR feature in Google MapsTodd Haselton | CNBC
Using the AR feature in Google MapsTodd Haselton | CNBC
Using the AR feature in Google MapsTodd Haselton | CNBC
Using the AR feature in Google MapsTodd Haselton | CNBC
Using the AR feature in Google MapsTodd Haselton | CNBC
WATCH: The new Samsung Galaxy Note 10 lineup
VIDEO3:5403:54Hands on with Samsung's new Galaxy Note 10 lineupTech
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5c81a101724f54367b9cf88e3261548a | https://www.cnbc.com/2019/08/08/wall-street-volatility-trump-fundraiser-and-apple-probe-in-russia.html | What to watch today: Wall Street volatility, Trump fundraiser protests, and Apple's probe in Russia | What to watch today: Wall Street volatility, Trump fundraiser protests, and Apple's probe in Russia
U.S. stock futures were pointing to a higher Thursday open on Wall Street, following the S&P 500's biggest intraday comeback of 2019. The S&P wiped out a nearly 2% deficit to finish the day higher, while the Dow erased nearly all of an early 589 point drop. Falling Treasury yields, a source of investor angst Wednesday, reversed late in the New York session and this morning. Despite the potential for a positive session, the Dow is still down 1.8% for the week, with the S&P 500 down 1.6%. (CNBC)* Goldman downgrades Caterpillar, citing weakness in China business due to trade war (CNBC)
China's central bank set the official reference rate for the Chinese currency at 7.0039 yuan per dollar today, the weakest level since April 21, 2008. Investors are watching the currency closely after it went above the 7-yuan-per-dollar level on Monday. That prompted the U.S. Treasury Department to label Beijing a currency manipulator. (CNBC)* China's exports unexpectedly rise in July — but more US tariffs may weigh on trade (CNBC)
On today's economic calendar, the government issues its initial jobless claims report at 8:30 a.m. ET. Later, at 10 a.m. ET, wholesale inventories for June are released. Meanwhile, Kraft Heinz (KHC) and Viacom (VIAB) are out with quarterly earnings this morning, while CBS (CBS), Uber (UBER), and Yelp (YELP) issue their numbers after this afternoon's closing bell. (CNBC)
IAC/InterActiveCorp (IAC) is considering distributing its stakes in Match Group (MTCH) and ANGI Homeservices (ANGI) to shareholders. Shares of dating powerhouse Match closed about 25% higher Wednesday. Shares of IAC were up about 10%. ANGI shares were lower. The internet holding company also posted strong revenue. (CNBC)
The House Judiciary Committee wants former White House counsel Donald McGahn to testify before Congress, asking a federal judge to strike down the Trump administration's claim that the president's top aides are immune from its subpoenas. The Committee is investigating possible obstruction of justice by President Donald Trump. (NY Times)* Banks hand over documents on Russians possibly linked to Trump (WSJ)
The White House plans to host technology companies tomorrow for a discussion about the rise of violent online extremism days after the weekend massacres in Texas and Ohio. Trump is scheduled to host a fundraiser in the Hamptons on Friday. He's not expected to be at the discussion. (CNBC)* Walmart employees call for walkout over gun sales (NBC News)
Equinox and SoulCycle, two luxury fitness brands owned by private parent company The Related Cos., are seeking to distance themselves from Friday's Trump fundraiser at the home of their parent company's chairman, Stephen Ross, a supporter of the president. (CNBC)
Today is the start of the Iowa State Fair, a prerequisite stop every four years during presidential elections. More than 20 Democratic candidates will begin weighing nutritionally questionable food choices and navigating media flocks, all while trying to seem both presidential and comfortable with the folks in the Midwest. (AP)
The U.S. government today stepped up its warnings to travelers to Hong Kong because of increasing violence surrounding pro-democracy protests in the Chinese city. Protests were sparked in June by proposed extradition legislation that could have seen suspects sent to mainland China, where protesters say they could face torture. (AP)* NATO monitoring 'security implications' of China's increased Arctic presence (CNBC)
U.S. immigration authorities arrested nearly 700 people at seven agricultural processing plants across Mississippi in what federal officials said could be the largest worksite enforcement operation in a single state. However, some of those detained will be released for "humanitarian reasons" and required to appear in court. (Reuters)
Apple (AAPL) is under investigation in Russia following a complaint from cybersecurity company Kaspersky Lab and may be abusing its dominant position in smartphone apps, Russia's anti-monopoly watchdog said today. Apple reportedly had not updated Kaspersky Lab's Safe Kids application on its operating system. (Reuters)* Apple and Eli Lilly are studying whether data from iPhones and Apple Watches can detect signs of dementia (CNBC)
Jeffrey Epstein, the wealthy financier currently under indictment for alleged child sex trafficking, misappropriated more than $46 million from L Brands (LB) founder and Chairman Les Wexner and his family, Wexner said. Epstein for years was known for managing Wexner's personal finances before the first sexual misconduct probe. (CNBC)
After a surprise financing offer that developed in bankruptcy court, Barneys New York now has more money and more time. The famed luxury retailer has until Oct. 24 to find a buyer and avoid liquidation. Barneys New York filed for bankruptcy early Tuesday morning, with a plan to significantly reduce its footprint. (CNBC)
Roku (ROKU) reported smaller-than-anticipated losses while also beating revenue estimates. The video streaming device maker added 1.4 million net new accounts during the quarter. The stock was jumping about 13% in the premarket.
Lyft (LYFT) lost 68 cents per share for the second quarter, less than half the loss predicted by analysts. The ride-hailing service's revenue came in well above estimates, as active riders increased by 41% compared to a year earlier.
Advanced Micro Devices (AMD) released its newest chip for data centers and said it won Alphabet's (GOOGL) Google unit and Twitter (TWTR) as customers for the chip.
Symantec (SYMC) is near a deal to sell its enterprise unit to chip maker Broadcom (AVGO), reported the Wall Street Journal. The division could be valued at about $10 billion, according to people familiar with the matter.
Netflix (NFLX) has prevailed in a bidding war against Amazon (AMZN) and Disney (DIS), enticing "Game of Thrones" creators, David Benioff and Dan Weiss, to sign a multi-year film and TV deal. The deal was reportedly worth nine figures and will see Beniof and Weiss leaving HBO to create new projects exclusively for Netflix. (CNBC)
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fcdcc85f8fbd943970abc23fb7aee951 | https://www.cnbc.com/2019/08/09/china-issues-top-warning-for-strong-typhoon-nearing-coast.html | China issues top warning for strong typhoon nearing coast | China issues top warning for strong typhoon nearing coast
A woman shields herself with an umbrella as she walks in New Taipei City from the rain August 9, 2019.Sam Yeh | AFP | Getty Images
China issued its top warning for coastal areas of Zhejiang province Friday ahead of a strong typhoon carrying heavy rain and winds and expected to send an intense storm surge up the mighty Yangzte River.
Heavy rain was expected in Zhejiang, Shanghai and nearby provinces on Friday before Typhoon Lekima hits land on Saturday morning, then weakens as it moves north.
Parts of northern Taiwan closed offices and suspended classes at schools on Friday as the storm passed northeast of the island. The same area was hit by a magnitude 6.0 earthquake Thursday that caused minor damage but no deaths or injuries.
The red alert China issued is the most serious in its four-tired alert system, prompting authorities to prepare evacuations, suspend train and air travel and require vessels to return to port. In Zhejiang, ferry service had been cancelled and more than 200 tourists evacuated from popular Beiji island.
The National Meteorological Center said Lekima was gusting at 209 kph (130 mph) and traveling northwesterly at 13 kph (8 mph). Taiwan's Central Weather Bureau put its sustained winds at 173 kph (108 mph) and said the bands of wind and rains around the storm's eye were shrinking.
The State Flood Control and Drought Relief Headquarters warned authorities overseeing seven provinces including Zhejiang, Fujian, Jiangsu and Shanghai Municipality to make preparations and have emergency response systems ready to be deployed. In Zhejiang, nearly 5,000 fishing boats had been recalled to port, authorities reported.
An intense storm surge was expected to raise waters in the estuary of the Yangzte River, China's mightiest, beginning Friday. Three main streams of the Yangzte River are likely to exceed alert levels and the commission overseeing the river for the Ministry of Water Resources has ordered efforts to prevent floods and oversaturation of levees along the river's banks.
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275aa3bc952b3a6cddab73e707811716 | https://www.cnbc.com/2019/08/09/dow-to-fall-uber-tumbles-mcconnell-considers-gun-background-checks.html | What to watch today: Dow to fall, Uber tumbles, and McConnell considers gun background checks | What to watch today: Dow to fall, Uber tumbles, and McConnell considers gun background checks
U.S. stock futures were pointing to a lower open ahead of the Friday session, after a three-day rally that saw the S&P 500 and Nasdaq erase Monday's sharp losses. The Dow, S&P 500, and Nasdaq all registered their biggest one-day gains since early June, as worries over a China currency devaluation and falling global yields subsided. (CNBC)* The yield curve everyone's worried about is inches away from flashing a recession signal (CNBC)* Cramer says a 'set of bogus worries' spooked investors out of stocks this week (CNBC)
China's central bank today set the official midpoint reference for the yuan at 7.0136 per dollar, the weakest level since April 3, 2008 but stronger than what analysts were expecting. It's the second time this week that the People's Bank of China set the daily benchmark at a weaker level than the psychologically important 7-yuan-per-dollar. (CNBC)
Uber (UBER) shares are down about 8% in premarket trading, after the company delivered disappointing second-quarter results. It was a miss on both top and bottom lines for Uber. Net losses for the ride-hailing company soared to $5.24 billion, largely owing to stock based compensation. (CNBC)* Uber's Q2 losses were bigger than total 2018 losses for all but three S&P 500 companies (CNBC)
Goldman Sachs (GS) is casting a wide net for customers of its new credit card with Apple (AAPL), approving some subprime borrowers for the product. The bank, which is in charge of deciding who gets the Apple Card, is accepting some applications from users with less-than-stellar credit scores, according to people with knowledge of the matter. (CNBC)
On Friday's economic and earnings calendars, the government is out with the July producer price index at 8:30 a.m. ET. Meanwhile, E.W. Scripps (SSP), PG&E (PCG), and Tribune Media (TRCO) report quarterly earnings this morning. There are no companies of note scheduled to report after today's closing bell.
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President Donald Trump said Joseph Maguire, the current chief of the National Counterterrorism Center, will become the acting director of national intelligence. Trump's announcement on Twitter came after the deputy director of national intelligence, Sue Gordon, resigned. She said in a note to Trump that stepping down was not her "preference." (Reuters)
Former FBI Deputy Director Andrew McCabe filed a lawsuit against the Department of Justice over his 2018 firing, which came just over 24 hours before he planned to retire, alleging the punishment was "politically motivated and retaliatory." It names Attorney General William Barr and FBI Director Christopher Wray, as well as the DOJ and FBI, as defendants. (CNBC)
Former Vice President Joe Biden said he was not taking his front-runner status for granted as he returned to Iowa on Thursday, ahead of a wave of rival Democratic presidential contenders who will in coming days visit the state that starts the party's nominating contest. More than 20 presidential contenders will attend the Iowa State Fair. (Reuters)
Shifting the gun violence debate, Senate Majority Leader Mitch McConnell said he now wants to consider background checks and other bills, setting up a potentially pivotal moment when lawmakers return in the fall. The Republican leader won't be calling senators back to work early, as some are demanding. (AP)* Man with rifle and body armor alarms shoppers at Missouri Walmart (NY Times)
After U.S. Immigration and Customs Enforcement arrested nearly 700 potentially undocumented immigrant workers in Mississippi, more than 300 of those taken into custody were released. The raids could be the largest such operation thus far in any single state. (CNBC)* Immigration raids to have long-term effects on poultry towns (AP)
Malaysia filed criminal charges today against 17 current and former directors at subsidiaries of Goldman Sachs following an investigation into a multi-billion-dollar corruption scandal that led to the demise of state fund 1MDB. The U.S. bank has been under scrutiny for its role in helping to raise $6.5 billion through bond offerings. (Reuters)
Political turmoil has returned to Rome with one of the country's deputy prime ministers calling for snap elections and declaring that the coalition government is unworkable. There has been clear confrontation between the two-party coalition, formed of the leftist, anti-establishment Five Star Movement and the anti-immigration, populist Lega party. (CNBC)
Several hundred protesters handed out anti-government flyers to arriving passengers at the Hong Kong International Airport today. Protesters said they wanted to reiterate their demands and put their case "in front of an international audience," according to social media posts from demonstrators. (CNBC)* Hong Kong's main public train system struggles to serve commuters amid protests (CNBC)
Huawei has launched its own operating system, HarmonyOS, said the CEO of the Chinese tech giant's consumer division. It's part of Huawei's play in the so-called Internet of Things, which refers to devices connected to the internet. (CNBC)
Chipmaker Broadcom (AVGO) formally announced its acquisition of Symantec's (SYMC) enterprise business after the closing bell on Thursday. Broadcom is paying $10.7 billion in cash, according to a statement. (CNBC)
J.C. Penney is at risk of delisting from the New York Stock Exchange after shares of the department store chain traded under $1 for a period of 30 consecutive business days. Shares of the department store chain have plunged more than 70% over the past year. (CNBC)
Beyond Meat (BYND) abandoned plans to enter the Japanese market, according to Reuters quoting Japan trading house Mitsui & Co, although a future expansion is possible. Mitsui has a small stake in the plant-based burger maker, but said a joint venture plan is no longer in the works.
Amarin (AMRN) said the Food and Drug Administration will hold an advisory committee meeting on whether labeling for the company's' heart disease drug Vascepa should be expanded. Amarin wants an expanded label to reflect upbeat results from clinical trials, but the scheduling of that meeting means a three-month delay in a final decision. (Stat)
CBS (CBS) beat Wall Street estimates with adjusted quarterly profit and revenue. Results were boosted by strong ad sales for the March NCAA men's basketball tournament, as well as an increase in content licensing and distribution fees.
Activision Blizzard (ATVI) beat estimates with adjusted quarterly profit, and the videogame publisher's revenue also came in slightly above expectations. Activision also raised its full-year outlook, with the company saying key franchises like "Call of Duty" are showing momentum.
Dropbox (DBX) also beat analysts' forecasts in its fiscal quarter. The cloud storage company saw paying users rise by 14% compared to a year ago, although revenue per user fell below Street forecasts.
Yelp (YELP) beat estimates by 4 cents with quarterly profit of 16 cents per share, while the online review site operator's revenue was essentially in line with analyst forecasts. Yelp said a change in its operations is allowing it to expand sales without having to add to its sales force.
Farfetch (FTCH) posted smaller-than-expected losses than Wall Street expected. Farfetch, a technology platform provider for the luxury fashion industry, also saw revenue beat estimates, but lowered its full-year guidance for a key growth metric. Separately, Farfetch announced the acquisition of luxury brand platform maker New Guards Group for $675 million. Shares of Farfetch were losing about third of their value in the premarket.
Universal's "Hobbs & Shaw" is expected to stay at No. 1 in theaters across the U.S. this weekend, but it has competition. Paramount's "Dora and the Lost City of Gold," CBS Films/Lionsgate's "Scary Stories to Tell in the Dark," Disney/Fox's "The Art of Racing in the Rain," New Line's "The Kitchen," and Bleecker Street's "Brian Banks" are all out. (Deadline)
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2eed1deb8cb1e28dc66ac7b7938ff4cf | https://www.cnbc.com/2019/08/09/gold-markets-us-china-trade-global-economy-in-focus.html | Gold hovers around $1,500; sees best week in three years | Gold hovers around $1,500; sees best week in three years
Swiss Banker | Wikipedia
Gold prices rose on Friday and were on course for its best week in over three years as negative yielding debt around the globe, dovish central banks and escalating U.S.-China trade tensions kept prices hemmed close to $1,500 level.
Spot gold was up 0.3% at $1,503.69 per ounce after it surpassed $1,500 for the first time since April 2013 earlier this week. U.S. gold futures rose 0.4% to $1,515.20 an ounce.
"Gold is where it is right now because it seems to be the perfect environment for it between central banks cutting interest rates and negative yielding debt," OANDA senior market analyst Craig Erlam said.
"Gold has gone up so much and is going to reach a point where people will start questioning whether it is overbought ... and whether correction is on the cards."
German long-dated bond yields tumbled to record lows in negative territory on Wednesday, while Dutch 30-year and Irish 10-year yields turned negative for the first time on Monday.
The central banks of New Zealand, Thailand and India stunned markets with a series of interest rate cuts, pointing to policymakers' dwindling ammunition to fight a downturn.
The U.S. Federal Reserve also cut its benchmark interest rate for the first time since 2008 last week.
"The trade spat is driving the market crazy. We don't rule out technical corrections, but $1,500 is now the new normal unless trade relations take a turn in a right direction," said Jigar Trivedi, commodities analyst at Mumbai-based Anand Rathi Shares & Stock Brokers.
Bullion has risen 4.4% so far this week - the biggest since April 2016 - and about 17% for the year, gaining more than $100 in the past week.
On the technical front "if we can go past the pivotal $1,520-$1560 region, it would start to a look a lot bullish. ... For it to move that far ahead we need to see more convincing sign for something darker on the horizon," OANDA's Erlam added.
On the investment side, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, has gained about 1.8% this week and about 7.3% in 2019.
Precious metal funds recorded the fourth-largest inflows ever in the week to Wednesday and investment-grade funds sucked in money, Bank of America Merrill Lynch said on Friday.
Elsewhere, silver rose 0.8% to $17.03 per ounce and was on course for a weekly gain of nearly 5%. Platinum gained 0.4% to $863.65, while palladium climbed 0.6% to $1,430 an ounce.
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91ed9e3c9d8d82f77809d2d0e3b58c91 | https://www.cnbc.com/2019/08/09/goldman-sachs-is-dipping-into-subprime-lending-with-apple-card.html | Goldman Sachs, bank of the rich and powerful, is dipping into subprime lending with Apple Card | Goldman Sachs, bank of the rich and powerful, is dipping into subprime lending with Apple Card
VIDEO6:1306:13Goldman Sachs is approving subprime credit scores for Apple CardsSquawk Box
Goldman Sachs is casting a wide net for customers of its new credit card with Apple, approving some subprime borrowers for the product.
The bank, which is in charge of deciding who gets the Apple Card, is accepting some applications from users with less-than-stellar credit scores, according to people with knowledge of the matter. Goldman began to make the card available to some Apple customers this week ahead of a broader rollout later this month.
From the start, Apple wanted its bank partner to create a technology platform that would approve as many of its 100 million-plus U.S. iPhone users as possible, within the bounds of regulations and responsible lending, according to the people. That's in line with the tech giant's desire to provide a good user experience for its customers.
For Goldman, a 150-year-old investment bank that counts corporations and the ultrawealthy as its clients, the move heightens the risks it faces launching a card during the latter stages of a decade-long U.S. expansion.
While there is no standard definition for who qualifies as subprime, most fall under a FICO score of 660, and their loans often sour before borrowers with higher credit scores. Ten years ago, big lenders got into trouble when irresponsible loans made to subprime mortgage borrowers defaulted, helping create the worst excesses of the financial crisis.
"Apple is only making one card, so they have to target everyone," said Ian Kar, author of the Fintech Today newsletter. "It's not like they're Chase with multiple cards like Sapphire Reserve to target a higher demographic and other cards for lower segments."
Apple's desire to reach as many of its customers as possible with a credit product isn't new. When Apple held discussions with Capital One about creating a joint card in the late 1990s, Apple co-founder Steve Jobs "had an aversion" to rejecting any of his customers for the card, according to a former executive of the bank. They tested a card, but didn't roll it out broadly, this person said.
And for Goldman, edging into subprime isn't an unprecedented step: 13% of the $4.75 billion in personal loans at the bank's Marcus business went to borrowers with FICO scores below 660.
The approval process, done through the iPhone wallet app, was designed to give most applicants a decision within two minutes, said the people. In that time, the bank's systems confirm users' identity and that their credit bureau records indicate they can repay their debts, the people said.
Goldman is using software firm Provenir to facilitate credit decisions, said another person with knowledge of the situation.
Under pressure to show Wall Street that it can grow revenue amid an industry-wide slump in trading revenue, the bank has been methodically building out its consumer business, starting with high-yielding deposits and unsecured personal loans in 2016.
Goldman won't provide more credit to a person than their profile suggests they can handle, according to a person with knowledge of the firm's plans. The card was designed to encourage responsible use, this person added.
In a recent presentation, Chief Financial Officer Stephen Scherr indicated that the bank was aware of the risks involved in starting up a huge consumer lending business. He told analysts in May that the bank would "apply the same rigorous risk management focus" for the Apple Card as it does for its Marcus personal loan division.
Still, because of its mandate for a broad customer base, Goldman is likely to approve users who would have difficulty getting other popular rewards cards, like J.P. Morgan's Sapphire Reserve or Citigroup's double-cash back card.
One new Apple Card customer, Ed Oswald, said his FICO score is about 620. The Reading, Pennsylvania-based copywriter said he had been using a subprime card from Merrick Bank.
"I was absolutely shocked I got it," Oswald said. "I have a lot of collections from two or three years ago when I was in a really rough spot. When I heard it was with Goldman Sachs, I figured they were going for the high-income set."
Oswald said Goldman is giving him a relatively modest credit limit of $750. He said his interest rate on the Apple Card, at 23.99%, is "a lot lower" than his other cards.
VIDEO23:5123:51How Goldman Sachs became a Wall Street powerhouseMarkets and Politics Digital Original Video
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98cfe47da7acce9dcbaef171aa0a05c9 | https://www.cnbc.com/2019/08/09/instead-of-free-tuition-democrats-should-ask-colleges-to-lower-their-prices.html | Instead of free tuition, Democrats should ask colleges to lower their prices | Instead of free tuition, Democrats should ask colleges to lower their prices
Intellistudies | Getty Images
This just in: College is really expensive, and the costs of higher education are only going higher.
A new analysis of College Board data by 24/7 Wall Street shows that a four-year education at a private college in the United States costs more than 10 times what it did in 1971, and costs at four-year state institutions are more than 14 times what they were 48 years ago.
Even after adjusting for inflation, those costs are still about two and half times greater overall for both public and private colleges.
So no one can blame the Democratic presidential candidates for trying to make a big campaign issue out it. Many of them, led by Sens. Bernie Sanders and Elizabeth Warren, are pitching plans that include relieving tuition costs for families, making state college tuition free, and even eliminating student loan debt entirely.
Sanders says he'll pay for his plan with what his campaign calls a "Robin Hood" tax on Wall Street. Warren's campaign is calling for a new "ultra millionaire's tax" on people with $50 million net worth and above to pay for her plan.
There's just one problem with all of these plans: There's nothing in them that calls for a ceiling in just how much tuition the government will pay to make tuition free for students.
Warren's plan does cap student loan forgiveness, offering it only to households making $250,000 per year or less. But Sanders is calling for all $1.6 trillion of America's student loan debt to be erased, period. And no plan says a thing about putting any pressure at all on the schools to keep their prices down.
This is just downright odd. Because these are the same candidates who never seem shy about berating insurance companies, drug companies, and the banks over their prices and fees.
We hear them spew a steady mantra of terms like "price gouging," and "corporate greed" whenever they go after those industries. So where's the tough rhetoric from the Democrats berating America's colleges and universities? More importantly, where are their policies blocking them from what they'd be calling "price gouging" if it were anyone else?
Meanwhile, educational institutions have raised tuition and fees at a rate than would make corporate America blush.
Now if you were selling something that you knew your customer wouldn't have to pay for no matter what the cost, what are the odds you would charge a very large sum? No, this isn't a trick question.
In other words, why should it matter to the colleges who's paying the bills, whether it's mom and dad or Uncle Sam? Indeed, that's exactly the same scenario that got us into this mess in the first place.
Former Education Secretary Bill Bennett noticed 32 years ago that all the easy-to-get student loan programs that began to multiply in America in the late 1970s were encouraging colleges to charge more for everything. He predicted that trend would continue, and he was exactly right.
When put in that context, these supposedly bold new plans are really just more of the same. More taxpayer liability, more incentives for tuition inflation, and less incentives for better accountability from the colleges and students to provide and complete a productive education process.
But it's not like there aren't any better ideas that recognize that tuition costs are a problem that should be tackled by students, taxpayers, and the universities together without anyone getting off scot free.
Many of those ideas have come from Iowa Republican Sen. Chuck Grassley, who has made tackling student debt and tuition inflation a major policy goal for two decades.
It started in 2007 with his call to tax university endowments. The plans changed in form a bit over time. But the prevailing policy Grassley has backed is putting a special tax on universities in years when their endowments are growing but those schools still increase tuition by greater than the rate of inflation.
More recently, he's pushing for more transparency. Grassley wants colleges to more clearly publish their actual costs to students and give the government a more accurate measure of their own costs. Similar to the Trump administration's push for more price transparency for hospital and prescription drug costs, Grassley believes more transparency will also push tuition prices down.
Then there are more aggressive ideas like Missouri Republican Senator Josh Hawley's push to make colleges financially liable for 50 percent of all student loan defaults from their former enrollees. Critics say that plan might encourage more students to default, since now their costs would be 50 percent less. But that problem can be fixed simply by focusing on the debts of grads and dropouts who aren't hitting minimum income levels to begin with.
The bottom line is that the government has been helping our institutions of higher learning jack up prices for so long, perhaps it's forgotten that it doesn't have to work that way. Instead of keeping the same problem alive, Democrats running for president might find more success with the voters if they started pressuring the colleges instead of enabling them.
Jake Novak is a political and economic analyst at Jake Novak News and former CNBC TV producer. You can follow him on Twitter @jakejakeny.
For more insight from CNBC contributors, follow @CNBCopinion on Twitter.
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88c047c3fd841d3ac2b83479c2a49d45 | https://www.cnbc.com/2019/08/09/korea-boycott-affected-uniqlo-sales-japans-fast-retailing-says.html | South Korea boycott impacts sales at Japanese retailer Uniqlo | South Korea boycott impacts sales at Japanese retailer Uniqlo
Customers exit a Uniqlo store, operated by Fast Retailing Co., in Tokyo, Japan.Akio Kon | Bloomberg | Getty Images
A boycott on Japanese goods in South Korea has had an impact on casual clothing chain Uniqlo's sales in the country, the company said on Friday, highlighting the widening economic hit from a diplomatic row over Tokyo's wartime role.
Japan's decision last month to tighten controls on exports of materials that South Korea uses to make semiconductors and smartphone displays has prompted a consumer backlash in Korea, with consumers boycotting Japanese products from beer to pens.
Relations between the two U.S. allies are now at their worst in decades. The dispute is rooted in compensation for forced laborers during Japan's occupation and South Korea has repeatedly invoked its difficult history with Japan, which colonized the Korean peninsula during World War Two.
"We can confirm that there has been an impact on the sales in Korea," a spokeswoman for Uniqlo owner Fast Retailing said, declining to give figures.
The company's recent decision to close a store in Seoul was unrelated to the boycott, the spokeswoman said, adding that the contract for the property had ended and the company decided not to renew.
Japan cited security concerns for the curbs. The move, however, has also been seen as retaliation after a South Korean court last year ordered Japanese companies to compensate Koreans who were forced to work for Japanese occupiers during World War Two.
Japan has also removed South Korea from a list of favored trading partners.
Uniqlo is one of Japan's more visible brands globally outside the auto and electronics industries. It has close to 190 stores in South Korea where it sells around 140 billion yen ($1.3 billion) of clothes annually, or 6.6% of its revenue.
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11c3d0422bb2a341552473de9c75b53d | https://www.cnbc.com/2019/08/09/what-to-buy-in-a-wild-week.html | VIDEO3:4703:47There are still investing opportunities ahead, says portfolio managerHalftime Report
Is it time to buy?
As stocks are rebounding after massive sell-offs earlier in the week, traders are seeing new opportunities. On Thursday's "Halftime Report," the traders discussed their recent buys, even as they acknowledged how much uncertainty still surrounds the markets.
Go back to "finding quality names and taking opportunities when they miss," advises Steve Weiss of Short Hills Capital Partners. Disney is one example: though it fell Wednesday after disappointing on earnings, Weiss just bought the stock, saying, "A quarter is not going to define Disney going forward."
Weiss also added to existing positions in Apple, Boeing, Target and Skyworks — names that have fallen this week as the trade war with China has escalated. In addition he bought back some of United Airlines, which he trimmed earlier. "You have to be flexible," Weiss says. "You have to maintain your price targets, which I was on UAL, and come back in when the market gives you that opportunity. And you will get more opportunities without a doubt."
Weiss still has space in his portfolio for riskier plays like Cloudera, which he bought on today's show as billionaire investor Carl Icahn discussed his 12.6% stake in the data cloud company in an exclusive interview. Icahn called Cloudera, which is down 36% so far this year and has gotten a new interim CEO, "very undervalued." Weiss explains, "I'm just going along for the ride. It's a speculative position…and who would I rather speculate with than Carl Icahn in an activist situation?"
VIDEO2:3802:38Carl Icahn on his 12.6% stake in ClouderaHalftime Report
Streaming platform Roku is another name in the news this week, surging 20% on strong earnings on Thursday. Jim Lebenthal of Cerity Partners, who has already traded Roku at a profit twice in the last 18 months, is now back in — for the long term, he hopes. "This may sound crazy, for a value guy to be buying a stock like this. But here's the thing — you can actually start to value this thing. It may not be on the traditional metrics of price/earnings or price to book, but price to sales is what this thing is going to get measured on. They're growing their sales at 60% year over year, and that doesn't even take into account the opportunity that they've got internationally." Jon Najarian, co-founder of Najarian Family Office, also bought Roku calls today.
Trading less on names in the news, Virtus Investment Partners' Joe Terranova bought Ulta Beauty and Intuit, two seemingly unrelated companies, because they both have "100% exposure to the U.S." Though Terranova admits he has "no clue" if the worst of the market sell-off is over, he believes there is still opportunity in "two themes: U.S. revenue derivation and the U.S. consumer… The U.S. itself stands out so singularly versus the rest of the world."
Disclosure: Jim Lebenthal owns shares of Roku. Jon Najarian owns Roku calls. Joe Terranova owns shares of Intuit and Ulta Beauty. Steve Weiss owns shares of Apple, Boeing, Cloudera, Disney, Skyworks, Target and United Airlines.
VIDEO22:4922:49Watch CNBC's full interview with billionaire activist investor Carl IcahnHalftime Report
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1aa446267bd61ae1b309b4357961a86b | https://www.cnbc.com/2019/08/10/norway-mosque-shooting-one-person-injured-suspect-in-custody.html | One person injured in shooting at Norway mosque, suspect in custody | One person injured in shooting at Norway mosque, suspect in custody
A picture taken on August 10, 2019 shows medics with a stretcher near the al-Noor islamic center mosque where a gunman, armed with multiple weapons, went on a shooting spree in the town of Baerum, an Oslo suburb. - The gunman injured one worshipper before being arrested, police and witnesses said.TERJE PEDERSEN | AFP | Getty Images
One person has been injured in a shooting inside a mosque in Norway, police said on Saturday, adding that one man had been apprehended.
The suspected shooter at the al-Noor Islamic Centre near the country's capital was described as "a young white man" who appeared to have acted alone, the police added.
The victim was a 75-year-old member of the congregation, mosque director Irfan Mushtaq told TV2.
"The man carried two shotgun-like weapons and a pistol. He broke through a glass door and fired shots," he said.
The shooter, who wore body armor and a helmet, was overpowered by members of the mosque before police arrived, Mushtaq added.
The mosque earlier this year implemented extra security measures following the massacre of more than 50 people at two New Zealand mosques by a suspected right-wing extremist.
In 2011, anti-Muslim neo-Nazi Anders Behring Breivik massacred 77 people in Norway's worst peacetime atrocity, the majority of them teenagers at a youth camp.
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e9ef018e74d50beca7c8d69017cc70ba | https://www.cnbc.com/2019/08/11/extreme-weather-has-damaged-at-least-1point2-billion-of-infrastructure-so-far-in-2019.html | Extreme weather has damaged at least $1.2 billion of infrastructure so far in 2019 | Extreme weather has damaged at least $1.2 billion of infrastructure so far in 2019
This Monday, March 18, 2019 file photo shows flooding and storage bins under water on a farm along the Missouri River in rural Iowa north of Omaha, Neb.AP Photo | Iowa Homeland Security and Emergency Management
After devastating flooding this year, Iowa put $15 million into a special fund to help local governments recover and guard against future floods. Missouri allotted more money to fight rising waters, including $2 million to help buy a moveable floodwall for a historic Mississippi River town that's faced flooding in all but one of the past 20 years.
In Arkansas, Gov. Asa Hutchinson announced $10 million to repair damaged levees while creating a task force to study a system that in some places has fallen into disrepair though years of neglect.
The states' efforts may turn out to be only down payments on what is shaping up as a long-term battle against floods, which are forecast to become more frequent and destructive as global temperatures rise.
"What is going on in the country right now is that we are having basically an awakening to the necessity and importance of waterway infrastructure," said Arkansas state Sen. Jason Rapert, a Republican who has been pushing to improve the state's levees.
The movement is motivated not just by this year's major floods in the Midwest, but by more than a decade of repeated flooding from intense storms such as Hurricane Harvey, which dumped 60 inches of rain on southeastern Texas in 2017. In November, Texas voters will decide whether to create a constitutionally dedicated fund for flood-control projects, jump-started with $793 million from state savings.
For years, states have relied heavily on the Federal Emergency Management Agency to pay the bulk of recovery efforts for damaged public infrastructure. While that remains the case, more states have been debating ways to supplement federal dollars with their own money dedicated not just to rebuilding but also to avoiding future flood damage. Those efforts may include relocating homes , elevating roads and bridges, strengthening levees and creating natural wetlands that could divert floodwaters from the places where people live and work.
"There are states who are realizing that they have an obligation to step up here, that flooding is really a state and local problem, and the federal taxpayer is not going to totally bail us out. We need to be thinking ahead and helping ourselves," said Larry Larson, a former director and senior policy adviser for the Association of State Floodplain Managers.
Although President Donald Trump has expressed doubt about climate change, even calling it a hoax, a National Climate Assessment released last year by the White House warned that natural disasters in the U.S. are worsening because of global warming. The report cited a growing frequency and intensity of storms, heat waves, droughts and rising sea levels.
Instead of pointing at climate change, governors and lawmakers in some Midwestern states have blamed the U.S. Army Corps of Engineers for worsening floods by the way it manages water along its network of dams.
Preliminary assessments compiled by The Associated Press have identified about $1.2 billion in damage to roads, bridges, buildings, utilities and other public infrastructure in 24 states from the floods, storms and tornadoes that occurred during the first half of 2019. Those states also have incurred costs of about $175 million in emergency response efforts and debris cleanup.
In addition, an AP survey of U.S. Army Corps of Engineers districts found that this year's floodwaters breached levees in about 250 locations in Arkansas, Illinois, Iowa, Kansas, Missouri and Nebraska. Some levees crumbled in multiple spots, including one near Missouri's capital city that inundated the airport. When it's rebuilt, the floor of a new airport terminal will have to be 11 feet higher to meet federal flood-plain regulations, said Jefferson City Public Works Director Matt Morasch.
The Army Corps estimates that levee repairs could top $1 billion in the Missouri River basin, where most of the breaches occurred.
The nation's disaster costs for public infrastructure will undoubtedly rise throughout the year. The Army Corps has yet to inspect all the damaged levees, officials in Illinois, Louisiana and elsewhere are still assessing damage to their flooded infrastructure, and the annual hurricane season is just getting underway.
Beyond that, the AP's preliminary figures do not include damage caused by wildfires, which have become increasingly destructive in Western states.
The AP's research shows that Nebraska was one of the states hardest hit by the flooding, with a preliminary assessment of about $435 million in damage to roads, bridges, utilities and other public infrastructure from a March storm . Rain fell on a still frozen terrain, causing a sudden snow melt that sent huge chunks of ice barreling down swollen rivers.
Nebraska has a regional network of Natural Resource Districts that could direct local money toward flood protection. Like most states, it also budgets money to pay the state's share of FEMA disaster recovery projects, and the state plans to hire a contractor to help develop a long-term recovery plan.
But until now, the state has not had a coordinated strategy for taking steps to reduce flooding risks, said Bryan Tuma, who leads the daily operations of the Nebraska Emergency Management Agency.
Only a few Midwestern states have pumped much of their own money into flood prevention.
Minnesota created a grant program in 1987 that has since awarded almost $525 million to local projects.
After extensive flooding in 2011, Iowa launched a unique program that lets local governments keep a portion of their growth in state sales tax revenue to help finance levees, floodwalls and other projects designed to hold back rising waters. The state expects to forgo nearly $600 million of revenue over 20 years to help pay for nearly $1.4 billion of projects in 10 cities. But applications for that program closed several years ago, leading Iowa legislators this year to put $15 million into a separate fund to pay for flood prevention and recovery.
"As a state and, I think as a nation, we're finally starting to get there — recognizing that making an investment in mitigation pays off in itself over the course of time," said John Benson, chief of staff for the Iowa Department of Homeland Security and Emergency Management.
In Texas, the proposed constitutional amendment creating a $793 million flood infrastructure fund is part of a broader package. Among other things, lawmakers appropriated $638 million to help local governments pay their share of FEMA recovery and flood-protection projects, and $47 million to update or develop flood-risk maps.
Sponsoring Rep. Dade Phelan, a Republican whose district was swamped by Hurricane Harvey, said too many cities, counties and drainage districts have been going it alone instead of working together on regional flood-management plans. The scattered approach has resulted in "roads that act like dams" and neighborhoods built in flood zones, he said.
"There's never been an opportunity like there is now to have everyone sit down and do a cooperative, holistic approach to flooding in a particular watershed," Phelan said.
In Arkansas, Rapert began pursuing better levee policies four years ago, after flooding on his farmland along the Arkansas River.
The lawmaker discovered that the nearby levee hadn't been repaired after a 1990 breach and that its governing board was defunct. So he sponsored a law allowing local officials to re-establish dormant levee boards and requiring annual reports to be sent to the state. Although Rapert's local levee got fixed, he said most of the districts haven't filed reports, raising questions about whether their levees are being maintained.
"Until there's a flood, nobody really cares about levees. But when there's a flood, everybody's worried about them," said Jason Trantina, a farmer and convenience store owner near Conway, Arkansas, who was appointed president of Rapert's local levee district when it was re-formed.
The improved levee worked this year, until it was finally overtopped by floodwaters that swamped Trantina's business.
Like his counterpart in Arkansas, Missouri Gov. Mike Parson also has appointed a task force to examine the state's levee system, explore ways of better managing flood waters and prioritize state funding for flood recovery.
Parson also signed a budget that includes $2 million for a moveable floodwall in Clarksville, a rural community of about 450 with a 19th century downtown that has been fighting an annual battle against the Mississippi River. After selling the town's visitor center to finance flood-fighting efforts, the town is again short on money and still needs additional grants to buy the $4.5 million floodwall.
"We have spent and spent and spent money that we don't have trying to defend against the flood," Clarksville Mayor Jo Anne Smiley said. "In my judgment, this is the answer to the survival of this town."
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b9e1fbea9c875ef5396e6fba253eb4aa | https://www.cnbc.com/2019/08/12/a-trading-issue-impacted-us-stock-quotes-late-in-the-day-as-dow-flatlined-into-the-close.html | A trading issue impacted US stock quotes late in the day as Dow flatlined into the close | A trading issue impacted US stock quotes late in the day as Dow flatlined into the close
VIDEO5:1905:19Mother of all short-covering rallies for bond market: David RosenbergClosing Bell
The U.S. stock market's consolidated quote system, which feeds real-time data feeds to data providers and is used to calculate index values, experienced a processing issue that resulted in some delayed quotes, according to exchange officials familiar with the matter.
The Nasdaq market flagged an issue affecting the quote system about 24 minutes before the close.
Some traders alerted CNBC to the issue, saying it was affecting the quote for the Dow Jones Industrial Average, which traded in a flat range in about the last 50 minutes of trading. Index values may have been impacted by the processing delay, but all trades were completed appropriately, the sources said.
The New York Stock Exchange said Monday evening that it "continues to experience delays" in the publishing of trades and closing prices to the Consolidated Tape." A number of major exchanges contribute data on their trades to the consolidated quote system, a single feed is run by the Consolidated Tape Association, or CTA, an industry body.
The issue first appeared on the CTA's alerts page around 3:15 p.m. ET Monday. By 3:40 p.m. ET, the problem was reported as "resolved." But just 11 minutes later, the CTA said it was still experiencing a problem.
The CTA also sent an alert to the Nasdaq saying that there was a "critical" issue and that traders were experiencing connectivity and trade input issues into CTS.
After the close the NYSE put out this alert:
"Trading on all NYSE Group exchanges, including closing auctions and real-time submission to DTCC, is functioning normally. Due to the earlier reported CTA issue, there are delays in the publishing of trades and closing prices to the Consolidated Tape for a subset of symbols."
The Chicago Board Options Exchange said Monday evening that "due to today's SIAC CTA issue, official closing prices for certain Cboe listed securities were not properly processed and distributed by SIAC." The Securities Industry Automation Corp. is a subsidiary of the NYSE.
Nasdaq said all Nasdaq systems are operating normally.
— With reporting by CNBC's Bob Pisani.
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ba9fdfb5883d3d02559ce654010c922c | https://www.cnbc.com/2019/08/12/apple-art-apple-stores-host-augmented-reality-iphone-art-walks.html | Apple took us on a surreal walk through San Francisco, looking at digital art on an iPhone | Apple took us on a surreal walk through San Francisco, looking at digital art on an iPhone
Kif Leswing/CNBC
San Francisco looks different through an iPhone XS Max — it's still a city, but now there are floating balls of fabric, speech bubbles, and words popping out from the trees and buildings.
For more than two hours on Sunday, I ambled through the streets of San Francisco, taking in several art pieces scattered around the city by Apple. But the art wasn't actually physically on the ground — instead, it was digital art, mere 1s and 0s, attached to several significant locations around the city, and viewed through the camera and display of an Apple iPhone.
The walk, which launched on Saturday, is a new program at Apple stores called "AR[T]," which is a play on words on augmented reality, a technology that uses cameras and machine learning to place digital objects in the real world. Apple has developed software for iPhones called ARKit. Apple CEO Tim Cook has called the technology "big and profound."
The hope among technologists is that augmented reality can be the next big computing platform, and companies like Facebook, Google, and Microsoft are also investing heavily in augmented reality technologies.
"I think in AR's early days when it's still trying to find its footing, user traction and killer apps, these types of organized initiatives by tech giants can slowly push the ball forward," Mike Boland, chief analyst of ARtillery Intelligence said. "Apple is particular has invested a lot in AR and is banking certain parts of its future hardware lineup on AR, so these ARt walks are both a move to accelerate AR traction and to continue feeling out the demand signals and what will resonate with consumers."
"I have been working in augmented reality for the past 3 years and I am convinced it will be the medium in which we will experience most of the arts in the future," said artist Sebastian Errazuriz, who was not involved in the project with Apple, but who has made similar public art in augmented reality.
"Augmented reality will prove to be as huge an invention as electricity. We will all live augmented reality lives," he continued.
Kif Leswing/CNBC
The AR[T] walk I attended started from Apple's flagship store in Union Square in San Francisco. It's available at six Apple stores in major cities, including New York, Hong Kong, and Paris. Over about two hours, we walked from the store to an alley, across Market Street to Yerba Buena Gardens, and to a historic church and back.
I was lucky to be able to make a reservation on Apple's website — most sessions through the end of the month are already full. Of the six sessions scheduled at the store for next weekend, all are booked as of Monday.
However, when I arrived, there was plenty of space. There were only five of us when we departed the store, including a store employee who came along for the walk on his free time. We were led by two Apple employees with a separate store manager checking in during the walk to troubleshoot our path.
If there are open slots in a walk, Apple stores will accommodate people who are there, an Apple representative said, so even if you can't get a reservation, it still may be worth seeing if there are open spaces.
The walk is guided by an Apple store employee and everyone gets to borrow an iPhone XS Max and pair of Beats Solo headphones for the trip. You can't use your personal iPhone. Each one of the the Apple-loaned iPhones has a non-public AR[T] app installed that enables you to access the experiences.
There's a bit of a ritual to see the art. The tour guide turned each experience on and off from an iPad Pro, and also led discussions about what we saw.
We'd walk to a location, like Maiden Lane, a cute little alley in downtown San Francisco. Then, we were told to find and point our phones at a "marker" like a sign, which allows the phone to place digital objects and creatures in the real world by giving the phone a point to orient the graphics around. Once you scan the marker — feeling a little haptic pulse when it's locked in — then you get a few minutes to walk around and experience the art.
At the end of each art piece, the guide asked us to all put our loaner phones together, then the guide would press buttons on his iPad, and all the phones would shut off, turn to black, and we'd be asked to put it in our pockets so we could walk to the next location.
John Giorno's "Now at the Dawn of My Life"Kif Leswing/CNBC
The draw for the ART walks is six pieces of art selected by the New Museum, a modern art museum based in New York. The art is often interactive and sometimes challenging, although at times you're reminded that augmented reality is a nascent medium that artists and other creators are still learning how to use.
Seven artists, including Nick Cave, John Giorno and Pipilotti Rist, made six pieces for the walk. The first piece we saw was by Cave, and it included creating and customizing a floating ball of digital cloth that walks with you down the alley. At the end, you point your phone towards the sky, and through its screen you can see a giant man with a bowl for his head standing on top of a building. Bowl Man sucks up all the cloth balls, and he changes color.
Another piece, by Cao Fei, places a little factory on the ground with a series of conveyor belts moving boxes into the distance. That piece was designed to be interactive — we could pinch or stretch individual boxes, or press a switch that reversed the flow of the boxes.
Kif Leswing/CNBCIn "This Is It," a short fairy tale is presented through a portal accessed by putting your phone up to a tree.
Other pieces were less successful. One of them, called "Now at the Dawn of My Life" by Giorno, involved the words from a poem floating on a rainbow pathway through a park, which was difficult to navigate on a crowded Sunday while looking through a smartphone. Our guide mentioned we didn't want to be the people engrossed in our phones running into other people, but that's exactly who we were as we tried to experience the art.
Apple's ART walk isn't the first time that a tech company has sponsored a piece of digital art placed into the real world through augmented reality technology. In 2017, Snap placed a giant Jeff Koons balloon animal in Central Park that could be viewed through Snapchat. That artwork was "vandalized" by Errazuriz, the graffiti artist, who placed a similar balloon animal in the same spot covered with graffiti tags, arguing at the time that corporations "should pay rent" in augmented reality and that citizens "should choose to approve what can be geo-tagged to our digital public and private space."
"As the technology becomes ubiquitous during the next couple of years, it will be important to stay alert to the permissions and responsibilities we allow for geo-located AR content in the future. So far Apple has proven trustworthy and responsible, I believe in them and their mission," Errazuriz said to CNBC on Monday.
The walks aren't the only augmented reality-related programming Apple is scheduling at its stores. There's a Cave piece that's available in all stores, and a separate class to learn how to make augmented reality experiences. The walks will run at least through the end of 2019.
VIDEO2:3802:38Hands on with the Microsoft HoloLens 2Tech
Follow @CNBCtech on Twitter for the latest tech industry news.
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8f5411442fce9586f9e36f55c6336a39 | https://www.cnbc.com/2019/08/12/corn-futures-fall-after-usda-forecasts-bigger-than-expected-us-crop.html | Corn futures fall after USDA forecasts bigger-than-expected US crop | Corn futures fall after USDA forecasts bigger-than-expected US crop
VIDEO1:4701:47Corn futures fall after new USDA crop reportHalftime Report
The U.S. corn harvest will be bigger than previously forecast, the U.S. Agriculture Department said on Monday, as the government issued a surprise boost to its yield estimate despite ongoing concerns in the country about a wet spring and dry summer limiting production.
For the 2019/20 crop year, the corn harvest will total 13.901 billion bushels, based on an average yield of 169.5 bushels per acre, the USDA predicted in its monthly supply and demand report.
Corn futures briefly fell their daily trading limit as analysts had been expecting the government to lower its estimate of corn production and yield.
Soybean production was pegged at 3.680 billion bushels, based on an average yield of 48.5 bushels per acre.
In July, USDA projected a corn harvest of 13.875 billion bushels and an average yield of 166 bushels per acre. Soybean harvest was estimated at 3.845 billion bushels and yields were projected at 48.5 bushels per acre in July. The August forecast is based largely on farmer surveys and satellite imagery, while earlier estimates came from statistical models.
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121492fab917ee66be53c325871ca2e1 | https://www.cnbc.com/2019/08/13/adaptive-biotechnologies-falls-5percent-after-first-earnings-since-ipo.html?__source=thestreet%7Cheadline%7Cheadline%7Cstory&par=thestreet | Adaptive Biotechnologies stock tumbles after first earnings report since IPO | Adaptive Biotechnologies stock tumbles after first earnings report since IPO
Chad Robins, CEO of Adaptive Biotechnologies.Anjali Sundaram | CNBC
Adaptive Biotechnologies shares fell by more than 10% in after-hours trading Tuesday after the biotech company posted a wider-than-expected loss in its first earnings report since going public.
The company posted a loss of $1.23 a share, down from a loss of $1.01 a year earlier. Revenue came in at $22.1 million, up 91% increase from a year earlier and higher than the $19.3 million Wall Street analysts were expecting.
"We are making important progress across on key catalysts that will enable near-term product applications across our life sciences research, clinical diagnostics, and drug discovery businesses, unlocking one of the largest global addressable markets in healthcare," Adaptive Biotechnologies CEO Chad Robins said in a statement.
Adaptive, which is developing what it calls an "immune medicine platform" to treat various diseases, went public on the Nasdaq on June 27. Adaptive Biotechnologies closed up more than 100% at $40.30 a share on its first trading day, making it at the time in the top five IPO debuts of the year.
Its stock closed at $43.08 a share Tuesday, up by about 6.9% since its IPO.
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7892039251d81ce98d6b9cf7f49c7c83 | https://www.cnbc.com/2019/08/13/heres-how-not-to-make-the-most-common-money-mistake-of-all.html?__source=OTS%7Cfinance%7Crelated%7Cstory%7C&par=OTS&doc=106816415 | An overactive imagination could be the biggest threat to your financial security | An overactive imagination could be the biggest threat to your financial security
VIDEO1:3401:34How to start investing in the stock marketInvest in You: Ready. Set. Grow.
It's easy to tell yourself stories about the dangers of investing your money.
And you can always find good reasons not to do it: It's too dangerous. Too hard. Too confusing.
These are the common excuses for not putting your money where it will do you the most good: the stock market.
chee gin tan | E+ | Getty Images
Yes, the scary, risky, confusing stock market. It's just for rich people, right? Warren Buffett-like investing geniuses and super-smart math brains.
In fact, highly educated people — even doctors, lawyers and MBAs — can be anxious about investing. "I've found that someone's level of education or intelligence plays little or no role in their apprehension when it comes to capital markets," said Lauren Anastasio, a certified financial planner at SoFi, a New York personal finance company.
Anastasio says no one needs to be especially math wizards to be a good investor. "Many of the best investors are the ones who make a plan, stick to it and avoid overanalyzing day-to-day market performance," she said.
You may think you're protecting yourself by keeping your money out of the stock market. "But playing it too safe may actually be the riskiest thing you can do when it comes to achieving your long-term goals," said Brent Weiss, a CFP and co-founder of Facet Wealth in Baltimore.
Keep in mind, your portfolio can balance safe assets with riskier investments for long-term growth, Weiss says. "People often think there is no middle ground," he said, "but they need to know that 'safe' has its place and so, too, does 'risk.'"
It's important to educate yourself and develop a plan that fits your goals.Marcello De PascaleBarnum Financial Group
"After you account for taxes and inflation, many safe investments may actually lose you money in terms of real dollars, also known as reducing your purchasing power," Weiss said.
For shorter-term needs, a cash reserve for emergencies is critical. "But in order to maintain the buying power of your cash, you have to at least keep pace with inflation: the cost of living," said Marcello De Pascale, an accredited investment fiduciary at the Barnum Financial Group in Shelton, Connecticut.
"There is a reason that loaf of bread that used to cost 15 cents in 1950 now costs closer to $4," De Pascale said. "That's inflation at work."
The stock market can be scary. When prices go down, people get jittery.
To calm your nerves, De Pascale recommends setting a plan with the right timeline.
Say you have a goal you'd like to meet in 30 years. Over that time, the stock market will go up as well as down. Sometimes way down. Since you have so many years to achieve your goal, see those big dips as excellent buying opportunities: You get to buy assets at a discounted price.
"We would never suggest someone with a shorter time frame to retirement be so aggressive, which is why it's important to educate yourself and develop a plan that fits your goals," De Pascale said.
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As you get some investing experience, your perspective will also widen. Look at the two most recent recessions and market downturns. "The only people that, in theory, lost it all were those not properly diversified in their investments," Weiss said.
Learn about diversification. That's stock market speak for "don't keep all your eggs in one basket."
Heavy concentration in one or a few companies is not a good investment strategy, Weiss says. "Look at Enron or Lehman Brothers," he said. "A well-diversified portfolio, with appropriate risk, may lose some value from time to time, but it will not lose all of its value."
Let's say you own 3,000 stocks and one goes out of business. "You still have 2,999 that are good and that still have growth," Weiss said.
Turn to friends, family, online communities and industry professionals to help you achieve your money goals, says Priya Malani, founder of New York-based advisor Stash Wealth.
Artiga Photo | Corbis | Getty Images
The key is learning, Malani says, and in this age, there's almost no limit to the type and amount of information you have access to. "All you have to do is want it and believe you deserve it," Malani said.
Chris Kampitsis, a CFP at the Barnum Financial Group in Elmsford, New York, believes that taking someone out of their comfort zone ultimately makes for an unhappy investor.
The best way to combat those fears so you can evolve as an investor is to learn. Work with a financial advisor who can be a sounding board — and a hand-holder when the market is volatile. "Read books on the subject," Kampitsis said. The more familiar investors become with the equities market, the better. "The data shows, over a long period of time, equity investing works."
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CHECK OUT: 3 mental shifts that can help you save money for a home via Grow with Acorns+CNBC.
Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.
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1ddb02b79624867e2b3ae5e82fe7a817 | https://www.cnbc.com/2019/08/13/regulators-may-roll-back-volcker-rule-giving-banks-investment-leeway.html | Regulators and the Fed reportedly looking to roll back Volcker Rule, giving banks leeway on investments | Regulators and the Fed reportedly looking to roll back Volcker Rule, giving banks leeway on investments
People pass a sign for JPMorgan Chase at it's headquarters in Manhattan, New York City.Spencer Platt | Getty Images
Wall Street banks may be catching a break as regulators rework a rule that restricts their ability to invest their own money, Bloomberg reported Tuesday.
Regulators are trying to make it easier for banks to trade securities using their own funds by reworking the so-called Volcker Rule, a centerpiece of legislation from the post-financial crisis bank crackdown, people familiar with the matter told Bloomberg.
The Volcker Rule, named after former Fed Chairman Paul Volcker, who originally proposed the regulation and enacted under the Dodd-Frank Wall Street Reform and Protection Act, prevented banks from investing their own money in hedge funds and private equity funds.
The overhaul, led by a group of agencies and the Federal Reserve, could happen as soon as next week, the report said.
The regulators are changing the definition of proprietary trading, which is when financial firms make direct investments for direct market gain instead of investing on behalf of clients.
The original proposal to remove the rule was bought up in May 2018, but the group is now withdrawing the "accounting prong," that decided which type of trading was allowed by banks. The accounting prong received backlash from bank lobbyist, the report said.
Banks are being hit hard by an escalating U.S.-China trade war and low interest rates at home and around the globe. Most of the major Wall Street banks narrowly beat on earnings this quarter, but uncertainty on trade and economic growth has pushed interest rates down, pressuring net interest margins, the difference between what banks pay on deposits and earn on loans.
The final edits to the proposal need to be approved by the Federal Reserve, Office of the Comptroller of the Currency, Federal Deposit Insurance Corp., Securities and Exchange Commission and Commodity Futures Trading Commission.
— Read the full Bloomberg article here.
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14ab51d36a2c6a170b13a34744c5eec8 | https://www.cnbc.com/2019/08/14/british-pm-johnson-says-opponents-of-brexit-are-collaborating-with-eu.html | British PM Johnson says opponents of Brexit are 'collaborating' with EU | British PM Johnson says opponents of Brexit are 'collaborating' with EU
Prime Minister Boris Johnson said on Wednesday that some British lawmakers who thought they could bloc Brexit were engaging in a "terrible" collaboration with the EU.
"There is a terrible kind of collaboration as it were going on between those who think they can block Brexit in parliament and our European friends," Johnson said in a "People's PMQs" question-and-answer session on Facebook.
"Our European friends ... are not compromising at all," Johnson said. He added that the longer the impasse continued, the more likely a no-deal Brexit became.
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095e5162b470c3318c7f5fede09c6290 | https://www.cnbc.com/2019/08/14/el-erian-fed-now-has-no-choice-but-to-cut-rates-or-disrupt-markets.html | Economist El-Erian: Fed now has no choice but to cut rates or risk disrupting markets | Economist El-Erian: Fed now has no choice but to cut rates or risk disrupting markets
VIDEO7:5607:56Allianz chief economic advisor El-Erian on today's market sell-offClosing Bell
The Federal Reserve has "no choice" but to cut interest rates again at its September policy meeting, economist Mohamed El-Erian told CNBC on Wednesday.
If the Fed doesn't cut its benchmark federal funds rate, it risks further disrupting the stock market, Allianz's chief economic advisor said in an interview on "Closing Bell."
Central bankers are being "held hostage" by markets, El-Erian continued. "The market is going to push the Fed to do 50 basis points. Some are saying, 'Why not even do an emergency cut?'"
El-Erian spoke after the Dow Jones Industrial Average closed down 800 points on Wednesday. It was its worst performance of 2019. The spread between the U.S. 10-year note and 2-year note inverted, a signal investors take as a recession indicator.
President Donald Trump on Wednesday once again blamed the Fed for mounting fears about a slowing U.S. economy. The president has blamed the central bank for previous declines in the stock market and has repeatedly pushed Fed Chairman Jerome Powell to cut rates.
The fed funds futures market now points to a 100% probability that there will be another Fed cut in September, according to the CME FedWatch Tool. Last month, the Fed, as expected, cut rates for the first time in more than a decade.
But El-Erian, former CEO and co-CIO of Pimco, said the rate cuts come with a price. "The more it cuts, the less impact it has on the economy, the less impact it has on markets and the greater the risk they have no ammunition when they will really need to cut."
El-Erian has been more bullish on the U.S. economy than some other major analysts, telling CNBC in March that the country will not see a recession this year or in 2020 barring a major policy mistake from the Fed.
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