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8a1d8fe0edb30e30d1fc875d13d142c3 | https://www.cnbc.com/2019/10/21/us-takes-step-to-require-dna-samples-from-asylum-seekers.html?utm_source=akdart | US takes step to require DNA samples from asylum-seekers | US takes step to require DNA samples from asylum-seekers
A U.S. Border Patrol agent takes down personal data from Salvadorian mother Ana Esmeralda and her son Manuel Alexander, 2, after they were taken into custody on July 02, 2019 in Los Ebanos, Texas.John Moore | Getty Images
The Trump administration is planning to collect DNA samples from asylum-seekers and other migrants detained by immigration officials and will add the information to a massive FBI database used by law enforcement hunting for criminals, a Justice Department official said.
The Justice Department on Monday issued amended regulations that would mandate DNA collection for almost all migrants who cross between official entry points and are held even temporarily.
The official said the rules would not apply to legal permanent residents or anyone entering the U.S. legally, and children under 14 are exempt, but it's unclear whether asylum-seekers who come through official crossings will be exempt.
The official spoke to The Associated Press on the condition of anonymity before the regulations were published.
Homeland Security officials gave a broad outline of the plan to expand DNA collection at the border two weeks ago, but it was unclear then whether asylum-seekers would be included or when it would begin.
The new policy would allow the government to amass a trove of biometric data on hundreds of thousands of migrants, raising major privacy concerns and questions about whether such data should be compelled even when a person is not suspected of a crime other than crossing the border illegally. Civil rights groups already have expressed concerns that data could be misused, and the new policy is likely to lead to legal action.
Justice officials hope to have a pilot program in place shortly after the 20-day comment period ends and expand from there, the official said. The new regulations are effective Tuesday.
Trump administration officials say they hope to solve more crimes committed by immigrants through the increased collection of DNA from a group that can often slip through the cracks. The Justice official also said it would be a deterrent — the latest step aimed at discouraging migrants from trying to enter the United States between official crossings by adding hurdles to the immigration process.
Currently, officials collect DNA on a much more limited basis — when a migrant is prosecuted in federal court for a criminal offense. That includes illegal crossing, a charge that has affected mostly single adults. Those accompanied by children generally aren't prosecuted because children can't be detained.
President Donald Trump and others in his administration often single out crimes committed by immigrants as a reason for stricter border control. But multiple studies have found that people in the United States illegally are less likely to commit crime than U.S. citizens, and legal immigrants are even less likely to do so.
For example, a study last year in the journal Criminology found that from 1990 through 2014, states with bigger shares of migrants have lower crime rates.
Immigrant rights advocates were immediately critical following initial disclosure of the DNA collection plan two weeks ago.
"That could really change the purpose of DNA collection from one of criminal investigation to population surveillance," American Civil Liberties Union attorney Vera Eidleman said then.
Curbing immigration is Trump's signature issue, but his administration has struggled in dealing with the surge of people trying to enter the United States, mostly Central American families fleeing poverty and violence.
Authorities made more than 810,000 arrests at the border during the budget year that just ended in September, a high not seen for more than 10 years. Officials say numbers have since fallen following crackdowns, changes in asylum regulations and agreements with Central American countries, but they remain higher than in previous years.
DNA profile collection is allowed under a law expanded in 2009 to require that any adult arrested for a federal crime provide a DNA sample. At least 23 states require DNA testing, but some occur after a suspect is convicted of a crime.
The FBI database, known as the Combined DNA Index System, has nearly 14 million convicted offender profiles, plus 3.6 million arrestee profiles, and 966,782 forensic profiles as of August 2019. The profiles in the database do not contain names or other personal identifiers to protect privacy; only an agency identifier, specimen identification number and DNA lab associated with the analysis. That way, when people aren't a match, their identification isn't exposed.
The only way to get a profile out of the system is to request through an attorney that it be removed.
Federal and state investigators use the system to match DNA in crimes they are trying to solve. As of August 2019, the database produced about 480,000 hits, or matches with law enforcement seeking crime scene data, and assisted in more than 469,000 investigations.
Justice Department officials are striking a line in the regulations that gave the secretary of Homeland Security discretion to opt out of collecting DNA from immigrants because of resource limitations or operational hurdles.
Justice and Homeland Security officials are still working out details, but cheek swab kits would be provided by the FBI, the official said. The FBI will help train border officials on how to get a sample, which shouldn't take more than a few minutes.
Customs and Border Protection already collects fingerprints on everyone over 14 in its custody.
The new regulations will apply to adults who cross the border illegally and are briefly detained by Customs and Border Protection, or for a longer period by Immigration and Customs Enforcement.
Those who come to official crossings and are considered inadmissible and not further detained will be exempt. Other exceptions are being worked out, the official said.
More than 51,000 detainees are in ICE custody. Border Patrol custody fluctuates its facilities only hold migrants until they are processed and either released or sent to ICE custody. At the height, more than 19,000 people were held. Recently it was down to fewer than 4,000.
The Justice Department charged the highest number of immigration-related offenses last year since the office began keeping the records: 25,426 with felony illegal re-entry and 80,866 with misdemeanor improper entry into the country.
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c86fed7f159e3625acd3400a4c909b95 | https://www.cnbc.com/2019/10/21/watch-nasa-astronauts-christina-koch-jessica-meir-talk-about-all-female-spacewalk.html | Watch astronauts Christina Koch and Jessica Meir talk about their spacewalk, the first by two women | Watch astronauts Christina Koch and Jessica Meir talk about their spacewalk, the first by two women
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Two women made history on Friday, spending hours working outside the International Space Station and completing the first all-female spacewalk.
Still on board the space station, NASA astronauts Christina Koch and Jessica Meir on Monday will speak to reporters at the Johnson Space Center in Houston.
Koch and Meir fixed a battery charger on the exterior of the ISS that was malfunctioning. Nearly 8 hours long, the spacewalk was successful in restoring power needed for operations and research.
This was the fourth spacewalk for Koch and the first for Meir. It made Meir the 15th woman to walk in space and the 43rd total space walk by a woman.
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6d1f0eae8a8a0435ae4dad5f379aa237 | https://www.cnbc.com/2019/10/21/what-happened-to-the-stock-market-monday-apple-hits-record-boeing-falls.html | Here's what happened to the stock market on Monday | Here's what happened to the stock market on Monday
The Dow gained 57.44 points, or 0.21% to close at 26,827.64. The S&P 500 climbed 0.69% to 3,006.72. The Nasdaq Composite closed 0.91% higher at 8,162.99. The major averages got a boost following positive comments on the U.S.-China trade front while investors hoped the earnings season can keep its early momentum going.
Chinese Vice Premier Liu He said over the weekend that China and the U.S. were making "substantial progress" in trade talks. Those comments came after questions arose last week over how far along both countries were on trade. Meanwhile, investors bet again on Monday that companies could continue to report better-than-expected earnings. The earnings season got off to a strong start last week, lifting investor sentiment and bringing the S&P 500 closer to an all-time high.
Apple shares rose 1.73% and hit a record high after an analyst at Raymond James hiked his price target on the stock. Boeing, meanwhile, dropped 3.76% after a Credit Suisse analyst downgraded the aerospace giant to neutral from outperform.
The corporate earnings season takes center stage once again on Tuesday, with Dow members P&G and McDonald's among the companies scheduled to report. Read more here.
Subscribe to CNBC on YouTube.
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ab137b42eaed5b7fa8a70b1a72de4f7b | https://www.cnbc.com/2019/10/21/what-the-68-trillion-great-wealth-transfer-means-for-advisors.html?__source=sharebar%7Cemail&par=sharebar | What the coming $68 trillion Great Wealth Transfer means for financial advisors | What the coming $68 trillion Great Wealth Transfer means for financial advisors
Hero Images | Hero Images | Getty Images
For financial advisors, the transfer of wealth from baby boomers to their children over the next two decades is a bit like climate change: The consequences may eventually be huge, but it's easy to ignore the issue in the short-term.
The youngest boomers are now 55 years old and the oldest are 73. In 2016, there were roughly 74 million boomers, according to the U.S. Census Bureau, and more of them are now dying than being replaced by boomer-aged immigrants. With an estimated $30 trillion to $40 trillion in assets, they are the lifeblood of the financial advice industry and, over the next two decades, they are expected to pass much of their wealth on to their Gen X and millennial children.
The vast majority of those heirs will fire their parents' financial advisors.
"It's going to be a fluid environment with assets up for grabs in the next 20 years," said Gauthier Vincent, lead wealth management partner at Deloitte Consulting. "It's a big risk for many advisory firms and a big opportunity for others."
More from Financial Advisor 100:CNBC FA 100 2019 list of top-rated financial advisory firmsWhat inspired these top advisors to help others manage money'Personal touch' will still dominate future financial advice space
This Great Wealth Transfer is about to kick into a higher gear. As much as $68 trillion will change hands between various generations over the next 25 years, according to Cerulli Associates. This presents enormous challenges for advisors in every sector of the industry. It pits the profitability of practices today against their viability in the future.
Millennial clients currently have much less wealth than their parents and are a money-losing proposition for most financial advisors. They also have very different expectations of financial advisors in how they want services delivered to them.
"There's a chasm between generations in how they want to deal with wealth managers," said Vincent. "If firms are slow to embrace the digital transformation of the business, more people will change advisors."
Most studies suggest that 80% or more of heirs will look for a new financial advisor after inheriting their parents' wealth. While that may be an existential threat to many advisors down the road, it doesn't change the fact that engaging those younger clients is still a money-losing proposition for most financial advisors.
"I expect we'll see a tipping point in the industry in about five years," said Peter Mallouk, head of RIA Creative Planning, which serves high-net-worth clients. "The industry is unprepared for this wealth transfer."
The lack of preparation is understandable. In the late stages of the longest-running bull market in history, there's no shortage of profitable high-net-worth clients for the industry to serve. And the high costs of compliance, technology and personnel needed to effectively address the millennial market involves a lot of short-term pain.
"If a financial advisor has 400 clients and wants to engage with their clients' kids, that amounts to roughly three times the work and three times the cost," said Mallouk. "It only makes sense for advisors to do that work if they're going to be around for decades and can invest heavily in that space."
If firms are slow to embrace the digital transformation of the business, more people will change advisors.Gauthier Vincentlead wealth management partner at Deloitte Consulting
Mallouk's firm has a leg up on most advisors in this regard. Creative Planning is regularly involved with setting up trusts and financial plans involving multiple generations for their ultra-high-net-worth clients. "We do a lot of legal work involving multi-generational estate planning, so that gets us involved with kids," he said. "Not a lot of advisors do that kind of work."
It still doesn't guarantee that the kids of Creative Planning's clients will stay with the firm after their parents die. Family psychology appears to dictate that kids feel no loyalty to Mom and Dad's financial advisor.
Ric Edelman, founder of Edelman Financial Engines, one of the largest RIAs in the country, says psychology has nothing to do with the issue. "If it's true that the vast majority of children will find new advisors, it's a message to the financial services community that they are failing to deliver the services to retain that business," said Edelman.
"Seventy-five percent of advisors don't do financial planning," he added. "Kids see the services their parents are getting, and it's not what they want."
VIDEO1:4401:44$68 trillion is about to change hands in the U.S.Personal Finance
Edelman, unlike most of the traditional advisory industry, has an open door to virtually anyone looking for advice and financial planning. Ten years ago, he lowered the firm's investment minimum to $5,000 and last year, he merged with robo-advisor firm Financial Engines, which provides an online advice platform for roughly 700 employer 401(k) plans serving about 10 million people.
"We don't refuse people because of their net worth," said Edelman. "A person with $5,000 in a 401(k) plan who reaches out to a financial advisor is going to increase their wealth; they're going to inherit assets or win the lottery or refer other clients to you.
"You don't know who they'll become."
Therein lies the opportunity and the risk for advisors.
I predict that half of financial advisors will be gone in the next 10 to 15 years.Ric Edelmanfounder of Edelman Financial Engines
Chuck Failla is determined that his small New York-based RIA, Sovereign Financial Group, will survive the coming wealth transfer. "It's inevitable that 100% of our book of business will turn over," said Failla, whose firm currently has four producing advisors managing $197 million in assets. He plans to add another six to eight advisors over the next three years. "We've been focused on this for a few years and we've taken steps to make sure the firm is in good stead in 20 to 30 years."
Failla is particularly mindful of its fees. The firm charges 1% on the first $1 million in assets and 0.5% thereafter. In the past year, he has enabled kids-of-clients to pool their assets with their parents to get discount pricing while still getting individual financial planning.
That puts the cost only slightly higher than the average robo-advisor churning out investment portfolios for people based on online questionnaires. "Any advisor looking to be in full swing business in five to 10 years better have a service model capable of running on lower fees," said Failla. "We want to be profitable down to 50 basis points."
His other big objective is to develop the digital experience for clients. He says that younger investors as a group want more interaction with their advisors than their parents do and they want to connect, share content and conduct business online.
Hero Images | Hero Images | Getty Images
Like other advisors with relatively small practices, Failla has made use of the products and platforms of custodians and fintech companies to offer increasingly sophisticated digital interactions with clients. "No one is fully digital with us now, but we're moving in that direction," said Faila.
Richard Parry, president and CIO of Tom Johnson Investment Management in Oklahoma City, takes a sanguine approach to the coming generational transfer of wealth. "Wealth transfer is always ongoing and it represents an opportunity," said Parry, whose firm is ranked No. 9 on the CNBC FA 100 list of top-rated wealth mangers. Like most advisors, the bulk of his clients are over 50 years old, but his firm is building out its technology capabilities to provide services the way NextGen investors want.
"We have to work hard to retain and generate new business," he said. "We think the best approach is honesty and education."
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0c20816a200757d49d6bf095fd13a528 | https://www.cnbc.com/2019/10/21/when-hunting-for-yield-beware-the-dividend-traps.html | When hunting for yield, beware the dividend traps | When hunting for yield, beware the dividend traps
A trader looks at price monitors as he works on the floor at the New York Stock Exchange.Brendan McDermid | Reuters
With low interest rates and stocks stuck in a sideways range, dividends are an important way to generate income for many investors.
But it's also important to know when a company may potentially cut its dividend. Bank of America Merrill Lynch equity strategists screened stocks of all sizes for those that may be ready to pare back dividends, but also those that may be set to raise them, and or even start to make payouts.
"High dividend yielding companies can be traps at this point in the cycle, as they may signal prices falling precipitously ahead of dividend cuts," the strategists wrote.
The strategists screened the Russell 3000 for companies at risk of cutting payouts. They looked at those that pay more in dividends than they generate in free cash flow. The strategists also looked at those that have over 100% payout ratio and are more levered than industry peers.
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Some companies at risk of cutting dividends also have weak debt ratings. Several on the list, with debt rated BBB-, a step above junk, include EQT, Omega Healthcare Investors and Office Properties Income Trust. Another with the BBB- rating, Kraft Heinz, already cut its dividend this year but is also viewed as likely to make another cut. The strategists said these types of companies may be more motivated to clean up balance sheets than maintain dividends.
Also on the list of companies that could cut payouts are Macerich Co, Pattern Energy and Sabra Health Care REIT, all of which are rated neutral by BofA stock analysts.
The strategists looked to the S&P 500 for nonfinancial companies that could boost their payouts. They screened by low leverage versus their sectors and a ratio of free cash flow to dividends that was greater than 1 for the past 12 months, among other measures. Names from that list include Target, Costco, Mastercard, Textron and Sealed Air.
The strategists also screened the S&P 500, aside from financials, for companies that could initiate dividends. They looked for companies with stable and growing earnings and cash as a percentage of market cap of at least 2%, as well as other metrics.
VIDEO3:3903:39Focus on stocks with consistent growth, big yields amid rotation, Jim Cramer saysMad Money with Jim Cramer
Companies that made this list include Intuitive Surgical, F5 Networks, PayPal Holdings, Ulta Beauty and Monster Beverage.
The strategists also looked at the S&P 500 for companies that consistently raise their dividends. They studied the period between 1980 and 2018 . Eighteen companies had dividends with a compounded annual growth rate of 10% or more in that time.
Walmart tops this list, with a rate of 21% compound annual growth rate in that period. Others on the list include Medtronic and McDonald's, both at 16%, and Johnson and Johnson, Coca-Cola and Pepsico.
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eb1f60be4b7c1cfc4dc9e743480ccabb | https://www.cnbc.com/2019/10/22/aide-of-retired-uaw-leader-pleads-guilty-to-criminal-charges.html | Aide of retired UAW leader pleads guilty to criminal charges as GM workers vote on tentative deal to end strike | Aide of retired UAW leader pleads guilty to criminal charges as GM workers vote on tentative deal to end strike
Retired United Auto Workers official Jeff Pietrzyk, a former aide to retired UAW VIce President Joe Ashton, exits the U.S. courthouse in Ann Arbor, Mich., after pleading guilty to federal corruption charges on Tuesday, Oct. 22, 2019.Michael Wayland / CNBC
ANN ARBOR, Mich. – As United Auto Workers members with General Motors vote this week on a proposed deal that could end the union's 37-day strike, one of their former brethren pleaded guilty to his part in an ongoing federal probe into corruption at the union.
Jeff Pietrzyk, a top aide of retired UAW Vice President Joe Ashton, a former GM board member, pleaded guilty to charges of conspiracy to commit wire fraud and money laundering. He is the 10th person to plead guilty in the widening federal probe that also has led to the arrest of a member of the union's top governing board.
The corruption probe has added to a contentious year of contract negotiations between the union and Big Three Detroit automakers. Previous convictions included six people affiliated with the UAW and three Fiat Chrysler executives.
Pietrzyk, outside the courthouse in Ann Arbor, Michigan, told media "of course" he apologizes to UAW members for his crimes: "I'm sorry for what I did," he said.
Prosecutors recommended Pietrzyk, who retired from the union in 2014, serve 24 to 30 months in prison for his crimes. Sentencing is scheduled for March 3. He's required to pay $123,000 in restitution as part of his plea deal.
Pietrzyk, 74, of Grand Island, New York, did not give any explanation for his crimes. Robert C. Singer, Pietrzyk's attorney, repeated that his client's involvement in the scheme was much more limited than other people's involvement.
"He was approached by someone who was in power over him and asked to do something and he did it," Singer told reporters after the hearing. "And that wasn't the best choice. It's something that he regrets."
Singer declined to comment on whether his client is cooperating with federal investigators.
Prosecutors accused Pietrzyk, whose base salary was upward of $125,000, of conspiring with other union leaders to receive hundreds of millions of dollars in bribes and kickbacks from vendors that made hats, shirts and other merchandise for the union, internally known as "trinkets and trash."
Pietrzyk's guilty plea comes nearly two months after one of his co-conspirators, Michael Grimes, a retired senior official with the union's GM division, pleaded guilty to charges of wire fraud and money laundering.
Retired United Auto Workers official Michael Grimes, right, exits the U.S. courthouse in Ann Arbor, Michigan, after pleading guilty to federal corruption charges on Wednesday, Sept. 4, 2019. His attorney Michael P. Manley is being interviewed in blue suit.Michael Wayland | CNBC
Grimes and Pietrzyk were two of three union officials identified in court documents unsealed Aug. 14 as receiving bribes and kickbacks from vendors. The Detroit News, citing anonymous sources, previously identified the third person as Ashton. He has not been charged.
Ashton — the first UAW leader on GM's board — resigned from the board in December 2017 after reportedly being linked to the investigation.
Prosecutors have not identified any GM executives as being involved in the corruption, as they did with Fiat Chrysler.
The UAW's 48,000 members with GM are voting on a tentative deal reached last week between the company and union through Friday.
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fdac0cdf8579da5130f3b96c4e2031c6 | https://www.cnbc.com/2019/10/22/apple-ceo-tim-cook-accepts-ceres-conference-sustainability-award.html | Apple CEO Tim Cook says he's taking on climate change and needs backup | Apple CEO Tim Cook says he's taking on climate change and needs backup
Apple CEO Tim Cook gestures after opening the newly renovated Apple Store at Fifth Avenue on September 20, 2019 in New York City.Kena Betancur | AFP | Getty Images
Apple CEO Tim Cook says he's taking on climate change and he wants backup.
Cook delivered the keynote speech at the sustainability nonprofit Ceres' 30th Anniversary Gala in New York City on Monday night, where Apple received an award for its sustainability initiatives. Cook used the opportunity to expound the company's outlook on climate change.
"It is our most successful, innovative and agile companies that have a responsibility to lead on climate and sustainability because they have the greatest capacity to act in a transformative way," Cook said in the speech. "If you are an executive who has not developed an innovation strategy to address your impact on the climate, then you are failing in your duties as a leader."
Cook went on to hail the company's vice president of Environment, Policy and Social Initiatives Lisa Jackson, who led the Environmental Protection Agency under President Barack Obama and joined Apple in 2013. Cook said that the company runs its entire global operation on renewable energy, and now seeks to bring all of their suppliers onto the clean energy grid.
"...I have found that something slightly magical happens when you set goals that feel a bit crazy," Cook said. "The effort will take you to places you didn't anticipate, but the results are almost always better than what you thought was possible at the outset."
He concluded his speech with a call to action for all those with power to take on climate change head on.
Read his whole speech here:
Good evening!Thank you, Mindy, for that very kind introduction, for your leadership and for this wonderful award.I'm grateful to all of our hosts, as well as to everyone who worked so hard to prepare this beautiful room. It's a great privilege to share this stage with some of the truly transformative leaders of our time, and I join everyone here in celebrating Christiana Figueres' inspiring lifelong efforts.Looking around tonight, I'm struck by how fortunate we are to live and work and lead at this moment.Generations have come and gone. They have connected the world by road, by train, by plane and by information. They have mapped the species of the earth, discovered how the smallest units of matter govern the air we breathe and the water we drink. They have uncovered sweeping histories of mankind's mark on this planet: entire civilizations long forgotten, poetry in languages not spoken in millennia, a solitary human hand painted on a cave wall.And now it's our turn to make it all worth something. To bring together the economy we have built, the science we have uncovered, and the humanity we have received — and make the whole more meaningful than the sum of its parts. To leave something worthy of passing on.This is not an idle responsibility. We can see that in mounting storms and droughts…in vanishing species and biodiversity…in billions of people at risk of scarcity and upheaval…and in an economic system that is being called into question by activists and demagogues alike. The stakes are high, and failure is not an option.For 30 years, Ceres has been showing all of us the way forward. And I'm grateful to accept this award on Apple's behalf and in the spirit of our unfinished work.I'm here tonight because I believe in my heart that if we are going to meet this moment, it's our human ingenuity that is going to help us do it.We are not going to solve the challenges we face by shrinking our thinking or by pulling up the drawbridge.As tempting as it may be in moments of adversity, we can't afford to turn away from the horizon and focus instead on defending what we've already got.It is our most successful, innovative and agile companies that have a responsibility to lead on climate and sustainability because they have the greatest capacity to act in a transformative way.And the converse is just as true. If you are an executive who has not developed an innovation strategy to address your impact on the climate, then you are failing in your duties as a leader.At Apple, our work on these issues is not secondary to what we do. It is not a side project or a hobby. It is an essential illustration of who we are and how we work.Before I say anything else on that — and though she couldn't be here with us tonight — I want to recognize a leader who has done more than anyone to focus that attention, Lisa Jackson.Since she joined Apple in 2013, Lisa has revolutionized our approach to the environment — and our policy and social initiatives more broadly.Our accomplishments since, and the work that is underway right now, would not have been possible without the efforts and vision of Lisa, her team and the many others at Apple who have made the environment their life's work.Together, Lisa and I accept nothing less than the kind of focus, creativity, quality and scale from our environmental initiatives than we do from anything else we undertake. If we can change the world with the devices we make, then we ought to be able to change the course of climate destruction worldwide. At the very least, we owe it to ourselves to try.And what we have found through these efforts is that we can add great value to our business in the process.Apple is a better, stronger, more resilient, more competitive company because of our environmental work.The same drive that gave Apple a head start in spotting entire new industries in their earliest stages has helped us see the climate crisis not as a business risk but as a problem that contains the seeds of its own solution.When we became one of the first companies to run 100% of our global operation on renewable energy, we didn't do it just for fun. We did it because we knew it would create a virtuous cycle of demand for clean energy that brings costs down for everyone.When we announced our goal to bring 100% of our suppliers onto the clean energy grid, we didn't do it to show off. We did it because we knew that it would provide a necessary business impulse for some of our largest partners to develop a valuable competency that sets them apart in a changing world. And because it is the right thing to do.This global effort, which just a few years ago existed only on paper, next year will bring online 6 gigawatts of new renewable power.And tonight I want to say, to the rest of our suppliers in the United States and around the world: there has never been a better time to join us, because as Dr. King said, "the time is always right to do right."There is little to lose and an awful lot to be gained. We've seen similar cycles of compounding benefit in directing our innovative focus to renewable materials.To us, this has never been about setting 5 yard goals that we know we can achieve really easily and without much work, and then taking a big victory lap after we do it.Instead, in 2017 we thought hard about what we'd want to do if we could, putting all limitations, real or imagined, aside.That's how we landed on our commitment to move toward a closed-loop supply chain and to one day stop extracting materials from the earth altogether.Now, this was pretty far out there at the time, and it still is today. We weren't shy about saying that this wasn't going to be something we could do overnight.But I have found that something slightly magical happens when you set goals that feel a bit crazy. The effort will take you to places you didn't anticipate, but the results are almost always better than what you thought was possible at the outset.This one has led us to the discovery of the highest-quality 100% recycled aluminum alloy ever, which now makes up the enclosures of our flagship devices.It's led us to build more and more essential components from 100% recycled rare earth metals.And it's led us to disassemble, recycle and refurbish millions of iPhones per year, retaining those critical materials and redirecting them back into the supply chain.Today, our climate focus touches every aspect of our work.From the Amazon, to Colombia's great expanses of mangroves, to the backwoods of Maine and North Carolina, we've preserved, restored and sometimes bought outright the best carbon recapture technology we've got: our forests…Since 2013, we've helped our suppliers conserve more than 25 billion gallons of water…And we've issued more than $2.5 billion in green bonds for environmental projects.Why do we do all this?Because solving problems — creatively and elegantly — is at the very heart of what makes Apple, Apple.It's what gets every one of our employees out of bed in the morning.It keeps us curious and proud of what we do.It's the same impulse that drives us to build the best in Accessibility features, by default, into every product we make.It's the same drive that leads us to support and extend education's power as a great equalizer in this country…It's the same drive that leads us to advocate for the immigrants and Dreamers who make our work possible…And to recognize that our diverse and inclusive workforce is what is going to drive the next generation of innovation.In short, we just think that the best products in the world ought to be the best products for the world.In accepting this award, Apple commits to deepening these efforts in the years ahead.We celebrate the work and the vision of the many leaders in this room, who have spoken out and shown leadership in the years when too many were looking the other way.And we call on those beyond this room, who have great power to change the world at their fingertips, and who have so far declined to use it, to put aside pride and convenience and to instead use that power to build something new.Something that can sustain humanity, the planet we love, and the hopes of our children for many more years to come.On behalf of all of us at Apple, congratulations to Ceres on 30 remarkable years. Thank you for this award, for your work and for your example.Thank you.
VIDEO1:1801:18Apple's Tim Cook on climate change
--CNBC's Josh Lipton contributed to this report.
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60e146a38d360a2d4ac8827109922e4d | https://www.cnbc.com/2019/10/22/calls-of-the-day-bank-of-america-apple-electronic-arts-more.html | Here are the biggest analyst calls of the day: Bank of America, Apple, Electronic Arts & more | Here are the biggest analyst calls of the day: Bank of America, Apple, Electronic Arts & more
In this photo illustration Levi's 501 blue jeans by U.S. clothing manufacturer Levi Strauss are seen on March 8, 2018 in Berlin, Germany. U.S. President Donald Trump has promised to sign into law tariffs on imported steel and aluminum today and the European Commission has vowed to retaliate with tariffs on Levi's jeans, Kentucky bourbon and Harley-Davidson motorcycles.Sean Gallup | Getty Images
Here are the biggest calls on Wall Street on Tuesday:
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1e83a8fc0224b422c0fadf9ad7d9c8da | https://www.cnbc.com/2019/10/22/cnbc-exclusive-cnbc-transcript-nike-ceo-mark-parker-speaks-with-cnbcs-wilfred-frost-on-cnbcs-closing-bell-today-following-breaking-news-he-will-step-down.html | CNBC Exclusive: CNBC Transcript: Nike CEO Mark Parker Speaks with CNBC's Wilfred Frost on CNBC's "Closing Bell" Today Following Breaking News He Will Step Down | CNBC Exclusive: CNBC Transcript: Nike CEO Mark Parker Speaks with CNBC's Wilfred Frost on CNBC's "Closing Bell" Today Following Breaking News He Will Step Down
WHEN: Today, Tuesday, October 22, 2019
WHERE: CNBC's "Closing Bell"
The following is the unofficial transcript of a CNBC EXCLUSIVE interview with Nike CEO Mark Parker and CNBC's Wilfred Frost on "Closing Bell" (M-F 3PM – 5PM) today, Tuesday, October 22nd – right after Parker's announcement that he will step down from his CEO role effective January 2020. The following is a link to video of the interview on CNBC.com: https://www.cnbc.com/video/2019/10/22/nike-ceo-mark-parker-on-why-hes-stepping-down.html.
All references must be sourced to CNBC.
WILFRED FROST: Now, a big change in corporate America. Nike CEO Mark Parker is stepping down, effective January 2020, when he will become Executive Chairman. He will be replaced by ServiceNow CEO John Donahoe, who serves on the company's board and is former CEO of Ebay. Joining us for an exclusive interview from the company's headquarters in Beaverton, Oregon is Mark Parker, the CEO and Chairman of Nike. Mark, good afternoon to you. Thanks so much for joining us.
MARK PARKER: Absolutely, yeah.
WILFRED FROST: So, Mark, first question, of course, is why now?
MARK PARKER: Well, we have a great, great leader for Nike coming in. And that's John Donahoe. He is absolutely the right leader for Nike and what we're looking for moving forward. He's the proven CEO of three successful companies. He's no stranger to Nike. And we feel that he's actually the best choice to come in and actually usher this next wave of growth for Nike. He's an extraordinary talent. He's been on the board, so he's very familiar with Nike. Over the past five years, we've worked closely together on the board. But also, just as part of our strategic planning process, so, he's -- John's been very involved with the senior management team outside of the board process, and into the strategic planning process, as well. Particularly around digital transformation. He is -- he's coming in with a lot of experience around consumer digital enterprise technology, global strategy, leadership. He's a great developer of talent. He really clicks a lot of boxes that we're looking for to add horsepower to Nike. We've got incredible horsepower already, but John comes in, adds horsepower, and I think he's going to help us accelerate our whole digital transformation and some of the steps we're taking to become more competitive.
WILFRED FROST: And Mark, you mentioned the world "digital" a lot. Should investors have a big takeaway that this is going to grow significantly and grow margins alongside it as your direct-to-consumer has been doing already?
MARK PARKER: Yes. Digital has been – we have used that word a lot. Digital transformation. It's really a key part of our strategy. It's going to enable this next level of growth. It's really about transforming our whole value chain, with areas like digital product creation, consumer demand sensing, flexible manufacturing and responsive manufacturing, as well. And we feel that it's also driving new consumer and commerce models, as well. So, we're really using digital to help transform the company and lift our ability to actually compete and grow our business. And it's having a profound effect. And this is all about accelerating that strategy.
WILFRED FROST: What does that mean for your retail partners, the Footlockers of this world?
MARK PARKER: Well, they're coming along with us. I mean, the retail partners are also going through their own digital transformation. So, it's the partnership between Nike and our right partners to evaluate the consumer experience and serve the consumer better at point of sale, elevate our brand presentation. This is all part of what it takes to have a tighter partnership between Nike and our right retail partners.
WILFRED FROST: In terms of your future involvement as Executive Chairman, I noticed John doesn't have specific brand experience. Will you be helping him with that? How involved will you be day-to-day?
MARK PARKER: Yeah, I'll be very actively engaged working with John as a partnership. One of my main focuses is to make sure that this transition is smooth and successful as possible. So, I'm really look forward to engaging with John day-to-day. He's already familiar with the senior management team. There's a real strong bond and relationship between John and some of our key leaders. So, we feel that's important. My time, I'll be working on brand, of course, I'll be involved with that part of the business. I have a personal passion, as you may know, around products, around innovation and design. We have part of our strategy is what we call 2x Design or 2x Innovation. And who knows, maybe that will go to 3x Innovation. I think there's so many more opportunities in the innovation space. I've never been more optimistic about that. And I think that's something I'm looking forward to really diving into, in my role as Executive Chairman, amongst other things. But it's really about making John successful in the role and really making this transition as smooth as possible.
WILFRED FROST: Mark, you were forced to shut down the Oregon Project recently, due to a bit of an alleged scandal. I've got to ask, is that related to the timing of you stepping down at all? And either way, we'd love to hear your response. I think this is your first chance to respond publicly to that whole scandal.
MARK PARKER: Well, first of all, this has absolutely nothing to do with that situation. It's -- you know, the succession planning is a really important part of any CEO's role and certainly has been a part of mine. So, we've spent a lot of time over many months working on secession planning. So, this is not something that happens in a matter of weeks. So, it's really unrelated to the Oregon Project or any other issues. This is really about me and the board really wanting to make, you know, build on the momentum that we've got, you know, add the horsepower, accelerate against our strategy, and do it while I'm here and really in a position to lean in and make this as successful as possible. So, that's really where we are.
WILFRED FROST: I wanted to ask about the controversy recently involving the NBA in China, the debate that—as to whether companies should be making a profit in China, or if at the same time, their employees and their fans aren't allowed to speak freely about things like pro-democracy protests in Hong Kong. Where do you and where do Nike stand on that debate?
MARK PARKER: Well, we're obviously standing very close to the situation. And like all of us, we hope there can be a peaceful resolution. You know, we -- we're in the midst of some very complex times. And I think it's important that in this incredibly dynamic environment that we are very thoughtful and deliberate in every situation. So, I have to say, you know, I've been working in sports for forty years of my life, and I've never been more optimistic about the power of sport to help move the world forward and be a positive impact on people around the world to inspire, to unite. And that's where we're focused. That's where we're focused.
WILFRED FROST: How are you managing the tariffs, Mark, at the moment? Are you passing it on to consumers? Are you able to move production? Are you just stomaching the costs yourself?
MARK PARKER: Well, we obviously focus on what we can control. The things that are in our power to really influence. And we have been, I think, it's no mystery, that we have been about free and fair trade. That's what we stand for. We think that protectionism and excessive tariffs ultimately burden the consumer. So, we're doing what we can to move forward as a company and focus on the things that we can control. And that's really running our offense. We're making moves here and there to make sure that we're in the best position possible. We haven't seen any dramatic impact from the tariffs at this point. And we feel like we're in a great position to manage through that. But we're -- you know, we don't take that for granted. We're staying close and we'll continue to try to work the levers we can and build on the momentum that we've got.
WILFRED FROST: Mark, you mentioned the power of sport and I feel like I can sneak in a soccer question, because Sara's not here. And I wanted to ask, whether you feel like the success of the U.S. women's soccer team at the World Cup is something that cannot only inspire a new generation of female soccer players in the U.S., but male soccer players, too?
MARK PARKER: Oh, absolutely. You know, I think this started back in 1999, at the final, when the USA won that World Cup in very dramatic fashion. That was a big impetus for women's sports, but also for football or soccer, as we call it in the United States. And this is no different. I think the impact that the women's World Cup has had and the victory that the U.S.A. has put on the board and the way they did it and the media attention around that, and the fan base, the excitement, the energy around that has been absolutely fantastic. I think it is another catalyst for women's sports, but also just sports in general.
WILFRED FROST: Mark, thanks so much for joining us. And congratulations on an incredible tenure at the helm of the company. And enjoy the final few months. And good luck being Executive Chairman. Thank you very much.
MARK PARKER: Thank you. Thank you.
WILFRED FROST: Mark Parker there, the Chairman and CEO of Nike. As we just said, he will be standing down, effective in January. We should mention, the next CEO of Nike, John Donahoe will be on "Mad Money" tomorrow evening. You do not want to miss that, 6:00 p.m. Eastern Time.
For more information contact:
Jennifer DaubleCNBCt: 201.735.4721m: 201.615.2787e: jennifer.dauble@nbcuni.com
Emma Martin CNBCt: 201.735.4713m: 551.275.6221e: emma.martin@nbcuni.com
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4d4740b3489053574d64accaeebc8592 | https://www.cnbc.com/2019/10/22/cnbc-media-alert-cnbc-exclusive-nike-outgoing-ceo-mark-parker-to-speak-with-cnbcs-wilfred-frost-on-cnbcs-closing-bell-today-at-430pm-et-following-breaking-news-he-will-step-down.html | CNBC Media Alert: CNBC Exclusive: Nike Outgoing CEO Mark Parker to Speak with CNBC's Wilfred Frost on CNBC's "Closing Bell" Today at 4:30PM ET Following Breaking News He Will Step Down | CNBC Media Alert: CNBC Exclusive: Nike Outgoing CEO Mark Parker to Speak with CNBC's Wilfred Frost on CNBC's "Closing Bell" Today at 4:30PM ET Following Breaking News He Will Step Down
WHEN: Today, Tuesday, October 22, 2019 @ 4:30PM
WHERE: CNBC's "Closing Bell"
CNBC's Nike Outgoing CEO Mark Parker will sit down for a CNBC EXCLUSIVE interview with CNBC's Wilfred Frost on CNBC's "Closing Bell" today, Tuesday, October 22, 2019 @ 4:30PM ET. Transcript of interview to follow.
The following is the unofficial transcript of BREAKING NEWS from CNBC's Wilfred Frost on CNBC's "Closing Bell" (M-F 3PM – 5PM) today, Tuesday, October 22.
All references must be sourced to CNBC.
WILFRED FROST: Mike, want to get back to this Nike news. Chairman and CEO Mark Parker of course has been CEO for some 13 years. He's been at the company for 4 decades. He's overseen some fantastic growth and performance for the company. Stepping down, effective January. Will remain in as Executive Chairman. New CEO coming in. And John Donahoe, with a lot of focus on the digital side of the business.
MIKE SANTOLI: For sure. And that's probably one way that John Donahoe's kind of background links up with what they're looking at. He's definitely known as a very good operator, manager. He got great marks for his work.
For more information contact:
Jennifer DaubleCNBCt: 201.735.4721m: 201.615.2787e: jennifer.dauble@nbcuni.com
Emma Martin CNBCt: 201.735.4713m: 551.275.6221e: emma.martin@nbcuni.com
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8761b3798e561e1d8b97d75a3bbeef8d | https://www.cnbc.com/2019/10/22/drew-rosenhaus-i-fully-expect-antonio-brown-to-play-in-nfl-in-2019.html | Sports agent Drew Rosenhaus: 'I fully expect' Antonio Brown to sign with another NFL team this season | Sports agent Drew Rosenhaus: 'I fully expect' Antonio Brown to sign with another NFL team this season
VIDEO5:1205:12Antonio Brown agent Drew Rosenhaus on Patriots, NFL and streamingSquawk Alley
Antonio Brown's agent told CNBC on Tuesday that he fully expects the wide receiver, who has been accused of sexual assault, to resume playing in the NFL this year.
"I do expect Antonio to play again this season," agent Drew Rosenhaus said on "Squawk Alley." "Hopefully we will get the NFL investigation behind him in the near future and he can sign with a new team."
The investigation followed multiple allegations of sexual misconduct against Brown, who was cut by the New England Patriots about a month ago.
Brown's former trainer, Britney Taylor, accused him of rape in a civil lawsuit filed in September in Florida. Brown's attorney denies the allegations.
Shortly after the lawsuit was filed, a claim of an unwanted sexual advance was reported to Sports Illustrated by an artist who said Brown had hired her to paint a mural. The artist later said Brown sent her intimating text messages after the magazine's report was published.
Through his attorney, Darren Heitner, Brown also denied the accusations by the artist.
Brown was traded to the Oakland Raiders by the Pittsburgh Steelers during the offseason, then released by Oakland after his off-field behavior became too much.
He was still signed by the Patriots, just before the Florida lawsuit, which contains three accusations of sexual assault, was filed. Brown appeared in only one game for New England, which eventually cut him after the Sports Illustrated reporting emerged.
The allegations against Brown — and how teams approach them — have added to the backlash the NFL has recently experienced for its handling of instances in which players are accused of sexual assault and domestic violence.
After Brown was released, the wide receiver said he was was done playing in the NFL while expressing frustrations at the league's team owners. He then said he was reenrolling in Central Michigan University, where he played college football.
Despite Brown's previously stated intentions and the accusations against him, Rosenhaus said NFL teams are waiting for the league investigation to finish before attempting to sign him.
"I've said there is interest in him from teams that are looking for the investigation to conclude and I fully expect Antonio to be playing this season," Rosenhaus said.
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f962c7b4112f5b43c0b6c634c3e4cc69 | https://www.cnbc.com/2019/10/22/facebook-ceo-mark-zuckerbergs-prepared-remarks-before-congress.html | Facebook CEO Mark Zuckerberg will tell Congress that embattled libra crypto project will 'extend America's financial leadership' | Facebook CEO Mark Zuckerberg will tell Congress that embattled libra crypto project will 'extend America's financial leadership'
VIDEO1:1001:10House panel releases Facebook CEO Mark Zuckerberg's testimony ahead of hearingThe Exchange
Facebook CEO Mark Zuckerberg will testify before the House Financial Services Committee on Wednesday, telling lawmakers that the Facebook-backed libra cryptocurrency "will extend America's financial leadership as well as our democratic values and oversight around the world."
"While we debate these issues, the rest of the world isn't waiting. China is moving quickly to launch similar ideas in the coming months," Zuckerberg said in his prepared remarks. "Libra will be backed mostly by dollars and I believe it will extend America's financial leadership as well as our democratic values and oversight around the world. If America doesn't innovate, our financial leadership is not guaranteed."
Zuckerberg's testimony comes after a rough few weeks for the Libra Association, which is the group that governs the libra cryptocurrency. The Libra Association saw its membership dwindle down to 21 after the departures of Visa, Mastercard, PayPal, eBay, Stripe, Booking and Mercado Pago.
VIDEO1:4901:49Zuckerberg meets with lawmakers ahead of testimony tomorrowClosing Bell
When Facebook announced libra, the social media company said that it planned to launch the digital currency in 2020. Since then, the company has said that it will not launch Libra until it receives regulatory approval. Zuckerberg reiterated that stance in his prepared remarks.
"Even though the Libra Association is independent and we don't control it, I want to be clear: Facebook will not be part of launching the Libra payments system anywhere in the world until US regulators approve," Zuckerberg said.
In his remarks, Zuckerberg also stressed that the future of the libra cryptocurrency is now in the hands of the Libra Association, not Facebook.
"By design, we don't expect to be leading those efforts going forward," Zuckerberg said. "The Libra Association has been created, has a governance structure in place, and will be driving the project from now on."
Zuckerberg also refuted that libra is an attempt to replace sovereign currency.
"Finally, there's the question of whether libra is intended to replace sovereign currency, and whether it's appropriate for private companies to be involved in this kind of innovation," he said. "I want to be clear: this is not an attempt to create a sovereign currency. Like existing online payment systems, it's a way for people to transfer money."
However, Zuckerberg did not clearly explain why Facebook felt the need to propose a new cryptocurrency as part of its system when competitors like PayPal's Venmo, Apple Pay or Square Cash function perfectly well with existing government-backed currencies.
WATCH: Here's how to see which apps have access to your Facebook data — and cut them off
VIDEO1:1001:10Here's how to see which apps have access to your Facebook data — and cut them offDigital Original
Follow @CNBCtech on Twitter for the latest tech industry news.
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c54e46a1015d746cb8fe85c87d2d6034 | https://www.cnbc.com/2019/10/22/first-on-cnbc-cnbc-transcript-discovery-ceo-david-zaslav-speaks-with-cnbcs-julia-boorstin-today.html | First On CNBC: CNBC Transcript: Discovery CEO David Zaslav Speaks with CNBC's Julia Boorstin Today | First On CNBC: CNBC Transcript: Discovery CEO David Zaslav Speaks with CNBC's Julia Boorstin Today
WHEN: Today, Tuesday, October 22, 2019
WHERE: CNBC's "Squawk on the Street" – Live from Vanity Fair's New Establishment Summit 2019 in Beverly Hills, CA
The following is the unofficial transcript of a FIRST ON CNBC interview with Discovery CEO David Zaslav and CNBC's Julia Boorstin on CNBC's "Squawk on the Street" (M-F 9AM – 11AM) today, Tuesday, October 22nd, live from Vanity Fair's New Establishment Summit 2019 in Beverly Hills, CA. The following is a link to video of the interview on CNBC.com: https://www.cnbc.com/video/2019/10/22/discovery-ceo-david-zaslav-on-the-success-of-food-network-kitchen.html.
All references must be sourced to CNBC.
DAVID FABER: "Vanity Fair" is hosting its sixth annual New Establishment Summit. That is in Beverly Hills, California. Our Julia Boorstin is live there from the event and she has a special guest for us as well. Julia.
JULIA BOORSTIN: Thanks so much, David. I'm joined now by David Zaslav, CEO of Discovery.
DAVID ZASLAV: Hi.
JULIA BOORSTIN: Thanks so much for joining us here at the "Vanity Fair" Summit. So, you are about to go on stage with Martha Stewart and you are announcing today that Food Network Kitchen is going live. Consumers can now sign up.
DAVID ZASLAV: Right.
JULIA BOORSTIN: Tell us what you've seen so far in terms of early demand. since you announced last month and what this says about your direct-to-consumer strategy going forward.
DAVID ZASLAV: Sure. It's a very unique product. It really was born last thanksgiving when 85 million people came to us online in the three days before Thanksgiving asking for help in making their Thanksgiving meal. And so, we looked at that and we looked at the fact that we have most of the great chefs around the world are working with us, and we hired the guy that built Marketplace for Amazon and we built this very unique product. 25 live cooking classes a week, about 1,000, it's like the Peloton of food, but it also allows you with one touch to get your groceries delivered to your house. So, it's very functional and nobody needs to be alone in the kitchen anymore.
JULIA BOORSTIN: Since you announced it and based on the response you've heard so far, can you give us a sense of how many subscribers you expect to get in the first year? I mean, do you have an indication based on demand?
DAVID ZASLAV: Well, the beta has gone great. People love it and they are using it extensively. So, we think we have a terrific product. You know, it's really -- food is unique. It's one of the reasons why we bought Scripps – food and home. There's a huge fight over who is going to own the home. And people spend their most emotional time and important time in the kitchen. And we're fighting to own the kitchen. Most media companies are trying to get into the home with content, with storytelling, with scripted series and scripted movies. And for us, this is a practical way to help people. And everybody asks the same question every day, in every language, everywhere in the world, they always ask 'what's for dinner?' So, we think this -- the actual scale of how this could be over the next tens of millions, we think, over the next several years in the U.S. And a multiple of that around the world. Remember, we have Food Network here in the U.S. and Cooking. Food Network is the number two or three channel for women. And that's actually like a funnel. The people that love Food and Cooking are watching our channels and now we can tell them to come to us and we can help you make your meals in the kitchen.
JULIA BOORSTIN: But then if you're telling the people who are watching on TV to come to you and subscribe directly, is it possible you could drive cord cutting? Because you're telling people who are subscribing to a paid TV bundle that they don't need to anymore to get your content?
DAVID ZASLAV: See-- but the distinction here is this is a different product. These are cooking classes. So, I'm -- Martha is going to be cooking for four consecutive days going up to Thanksgiving. It's cooking classes on four different Thanksgiving dinners. This isn't really -- this isn't competing with Diners and Dives. It's not competing with our traditional content; which people love to watch in a one-way experience. It's also interactive. So, if you have questions about a recipe or about a meal you can call in and get it answered.
JULIA BOORSTIN: So, you mentioned HGTV. You have a Chip and Joanna Gaines direct-to-consumer service launching next year. You have three sports direct-to-consumer services cycling, Golf and Eurosport overseas. Do you see a world in which you're going to bundle together these services to give consumers who like your types of products a new type of mini-bundle?
DAVID ZASLAV: Well, first is we own all of our content. And we own almost all of our content globally. So, we have full flexibility. For now, what we're doing is we're watching the seven or eight great media companies that are fighting over entertainment, whether that's HBO or Showtime or Disney Plus or Netflix, they're all doing entertainment scripted and movies. So, we see ourselves as differentiated. Right now, we're offering a lot of our products individually, like we're offering Golf and Cycling. But in Europe, we do have an aggregated sports product. We have the ability to aggregate and we've never been stronger in the U.S. We're now the largest media company for women in the U.S.
JULIA BOORSTIN: But are you going to work on a bundle, where there's going to be a bundle for women of Home and Cooking and all of that stuff?
DAVID ZASLAV: And ID.
JULIA BOORSTIN: Yep.
DAVID ZASLAV: Look, I think everything is on the table. The interesting moment for us is that everybody in the -- on the entertainment side needs more content. So, we're talking to each of the major players about -- they've been talking to us whether we want to provide more or some content to them. And for now, we've decided not to. We think we can either go individually, with food and home and Oprah and Chip and Jo and Crime. Or we could aggregate here in the U.S. And we'll look over the next year and determine what we want to do. But right now, this Food Network Kitchen product we think could change the game in the kitchen.
JULIA BOORSTIN: And in general, you're not interested in selling content to these giants?
DAVID ZASLAV: No. We haven't been selling our content because people come to us. And I think, you know, the idea that we own all of our content globally gives us I think real power and scale.
JULIA BOORSTIN: David Faber wants to jump in here.
DAVID ZASLAV: Hey, David.
DAVID FABER: Hello, Mr. Zaslav. You know, question to from me on the stock price. And I know you look at it. I'm looking at a five-year chart. You had lows in '17, you're well off them, but the multiple on your stock keeps coming down. The entire group is trading at ridiculous -- I shouldn't say that -- at very low multiples. Is there anything you think you can do to change the narrative that will get investors to pay a higher multiple for companies like your own?
DAVID ZASLAV: Good question. The first thing we did was when we bought Scripps, we were making $1.4 billion in free cash flow and they were making $700. We have a target of $3 billion in free cash flow over the next two to three years. And we took -- we said we were going to take our leverage from 4.7 to 4.8 to less than 3.5 over two years. In one year, we were below 3.5 times levered and we're now at a trailing 2.9, $3 billion in free cash flow. So, one, we view ourselves as a free cash flow machine. Over the next three to four years, we will be generating 10, 12, $14 billion in cash. So, you know, that's a metric. And on the metric of free cash flow, we're incredibly cheap. The other thing we can do is we own all of our IP. And, you know, this product that we're talking about today, Food Network Kitchen, you know, that has real terminal value. The issue with our whole industry is people are concerned who owns the right IP and are people going to be watching TV and how often are people going to be watching TV five years from now. So, if we can get the Food Network Kitchen product working and our content globally distributed to all the devices, then you'll see, I think, not just an acceleration of our multiple, but people will recognize we're a very different media company. We're not an entertainment company with expensive content. We have between Food, Home, Crime, Discovery, Animal Planet, we have content that people love in every language in the world and we own all of it.
JULIA BOORSTIN: But you are smaller than some of these media giants, especially after the consolidation we've seen over the past couple years. And there is a question when competing for eyeballs and competing for ad dollars and dealing with a shirking are viewer base for television with cord cutting, do you need to be bigger to really compete? And to that end, do you need to sell or would you consider buying more assets?
DAVID ZASLAV: Well, we have a lot of free cash flow. We're looking -- always looking to buy assets if we can find assets --
JULIA BOORSTIN: What type of assets?
DAVID ZASLAV: That are -- that will help us grow faster. IP basically. I mean, we have already 10 to 12 channels in every country around the world. Our business is growing low to mid-single, generating a lot of free cash flow. And so, our overall strategy over the last five years has been to get more compelling content and own it globally. But in terms of this question of how big do we need to be, if you're one of those eight entertainment companies that trying to do scripted series and scripted movies, they're all fighting over one pie and it's very crowded. When it comes to food, we own almost all the great chefs and all the great food content. We own almost all the home content. In science and natural history, we did a deal with the BBC, a global deal, where we own almost all the science and natural history in the world. So, in our niches, we're the aggressively overly dominant player.
JULIA BOORSTIN: But you didn't answer my question though, what types of content, companies or studios or media companies, would you want to acquire? And is Discovery for sale?
DAVID ZASLAV: Discovery is not for sale.
JULIA BOORSTIN: At the right price?
DAVID ZASLAV: As a public company, you know, every public company is for sale. But we think we have great free cash flow, a great balance sheet, really good assets. But, you know, we bought -- we bought a partnership with the PGA tour through 2030 where we own golf, all of golf, most of golf around the world. We bought Golf Digest and did a deal with Tiger Woods. We did a deal with the BBC for all of their IP in the natural history space. So, you know, owning more and better IP gives us a much clearer path to get on to every device. And it's more of a reason why people are going to want to hang out with us and our content.
JULIA BOORSTIN: So, we will look out for more deals for Discovery down the road. David Zaslav, thanks so much for coming to talk to us today, before you head on stage with Martha Stewart. Really appreciate it.
DAVID ZASLAV: Thanks, Julia.
For more information contact:
Jennifer DaubleCNBCt: 201.735.4721m: 201.615.2787e: jennifer.dauble@nbcuni.com
Emma Martin CNBCt: 201.735.4713m: 551.275.6221e: emma.martin@nbcuni.com
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616cb58245456c11c6b26f83dfca4c11 | https://www.cnbc.com/2019/10/22/first-on-cnbc-cnbc-transcript-disney-ceo-bob-iger-speaks-with-cnbcs-julia-boorstin-today.html | First On CNBC: CNBC Transcript: Disney CEO Bob Iger Speaks with CNBC's Julia Boorstin Today | First On CNBC: CNBC Transcript: Disney CEO Bob Iger Speaks with CNBC's Julia Boorstin Today
WHEN: Today, Tuesday, October 22, 2019
WHERE: CNBC's "The Exchange" – Live from Vanity Fair's New Establishment Summit 2019 in Beverly Hills, CA
The following is the unofficial transcript of a FIRST ON CNBC interview with Disney CEO Bob Iger and CNBC's Julia Boorstin on CNBC's "The Exchange" (M-F 1PM – 2PM) today, Tuesday, October 22nd, live from Vanity Fair's New Establishment Summit 2019 in Beverly Hills, CA. The following is a link to video of the interview on CNBC.com: https://www.cnbc.com/video/2019/10/22/disney-ceo-bob-iger-say-hes-not-worried-about-competitors-streaming-prices.html.
All references must be sourced to CNBC.
KELLY EVANS: Take a look now at shares of Disney, which are up about 2.5% after a series of blockbuster announcements: a new partnership with Verizon for a free year of Disney Plus, a deal with Sirius XM for exclusive Marvel podcast, and the release of a new trailer for the next "Star Wars" film, "The Rise of Skywalker." Let's get to Julia Boorstin. She's in Beverly Hills with a very special guest, Disney Chair and CEO Bob Iger, in a first on CNBC interview. Julia?
JULIA BOORSTIN: Kelly, thanks so much. Yes, we're so glad to be joined here by Bob Iger on such a busy day. Kelly just mentioned all of your big announcements. And you just came from stage here at the Vanity Fair summit. where you unveiled a clip of the Mandalorian, which will be one of the centerpieces of upcoming streaming service, Disney Plus. Can you give us a sense of early demand for Disney Plus? You've been offering the ability to sign up before in launches on November 12th. What kind of demand are you seeing so far?
BOB IGER: Well, we started allowing people to sign up for subscriptions back in the middle of the summer. And we also launched it somewhat quietly in the Netherlands but without original content. And we -- I can say without being very specific that the reaction to the product that people have tried in the Netherlands and the reaction in terms of the sign ups has been robust. It's heartening. It's heartening to see just how much interest there is in what we're bringing out, which I think speaks volumes about the brands and the content under those brands, both the library content and the original. You mentioned, Mandalorian, the first-ever Star Wars live-action series which will be available when we launch. So, there's a lot of excitement and a lot of anticipation. And all signs point in the right direction, as far as we're concerned.
JULIA BOORSTIN: And everything's ready to go for November 12th?
BOB IGER: Yes. Everything's ready to go. We could launch today – a lot of people right now at Disney who probably just had heart palpitations. But we're still doing some tweaking. And we have the time to do that.
JULIA BOORSTIN: So, you just announced this big deal with Verizon. You're going to be giving a year to Verizon subscribers of Disney Plus. Is this a marketing tool? Are you going to be losing money on this, breaking even, or will this be a money-making—
BOB IGER: Verizon is making available to their customers one year free of Disney Plus. And it's a wholesale deal to us so we will get paid for that. And they will also support us with a lot of marketing. But this is not just a marketing play. And it will, I think, have a significant effect–not just think, I know–in terms of jump-starting subscriptions.
JULIA BOORSTIN: How important is this kind of deal to minimize turn? This is the first time that you had to really worry about turn on a month-to-month basis for your subscribers. And what other types of deals could we see, like this one?
BOB IGER: Yes, well we have created a variety of incentives to get people to subscribe for more than a month. But you can – it is a month-to-month subscription. So, there's a discount of the marketplace so you can buy a year for $69. For instance, there's a multi-year subscription that can be brought. We're trying to essentially give the consumers the flexibility to sign up for longer periods of time, which obviously limits turn, but also gives the consumer value in terms of, you know, price.
JULIA BOORSTIN: After you priced Disney Plus at $70, Apple came in and priced its service at $5. What do you of all think of these services launching around the same time? And, with Apple at that lower price point, are you worried about competition limiting your pricing power down the line?
BOB IGER: No. we're not really worried about competition in terms of pricing, because we have such a unique product. When you put in on one service on one app, Disney and Star Wars and Marvel, and National Geographic, and you add to that The Simpsons, and not only the great library, but all the original content that's being made under those brand umbrellas. We're very, very different than the other services out there. So, while we view the others as competition, we're not fixated on the competitive side of things here.
JULIA BOORSTIN: Three, five years down the line, how much of Disney's business is going to be about this direct-to-consumer streaming? Does this take over and become more important than your cable bundle business?
BOB IGER: Well, I think it certainly, as our projection suggests, both in terms of the impact on the bottom line but also in terms of our engagement with consumers, it grows and it grows and it grows. And this is really the trends that we're seeing in the world. If you look at the erosion of the multi-channel bundle, if you look at the way people are consuming media today, I see numbers a lot now on Hulu because we control Hulu. And to see the consumption of programs on Hulu, even programs that were launched on FX, programs that were launched on ABC and on Freeform, and you look at the audience, there's a whole other audience out there. And there's, I think, a migration that's not going to slow down—it will speed up—in the direction of direct-to-consumer over-the-top services.
JULIA BOORSTIN: Of course, you have direct-to-consumer, ESPN Plus. Are you going to be looking to buy more rights for that? For instance, the NFL Sunday ticket rights, would you be looking to buy those when AT&T's deal for those rights expire?
BOB IGER: I won't answer specifically to the question about the NFL package. But we know the NFL is really valuable. But the answer is yes, we will be looking to buy more rights for ESPN Plus as they become available. And I imagine down the road, ESPN – the linear channel is still very valuable to us and distributers, but down the road, you could see a shift to some extent of some product from those services to ESPN Plus. But that's at a time when we believe the shift from a consumer perspective is significant enough to warrant that.
JULIA BOORSTIN: I have to ask you about China, it's been a big topic on our air and in the mainstream media, with all these NBA tweets sparking such backlash. And I'm curious, for China, it's such a big business for you, you obviously have NBA rights here in the U.S., what does this all mean for you in your business and your approach to everything from the movies you distribute there to your relationship with your theme park there?
BOB IGER: Well, I think what we've learned, if anything, from the -- what you just described, which is what happened with the NBA, is that any entity expressing anything in public today about something that's considered complex or controversial has to proceed with real caution. It's a cautionary tale. And so, I am going to be extremely cautious here in this interview and be careful with what I say. At the Walt Disney Company, you know, we infuse values in the stories that we tell. We design those stories, we tell those stories for -- to be universal in appeal for an audience that's global in nature. When we do that we think very hard about being culturally relevant and culturally correct. Much less so, by the way, than being politically correct. People always talk about being politically correct. Being cultural correctness has importance. When we designed Shanghai Disneyland, for example, we talked about being authentically Disney but distinctly Chinese, which is essentially to be culturally correct and culturally relevant to the people of China. But I'm not going to weigh in very specifically about the events of the last few weeks.
JULIA BOORSTIN: In addition to abiding by values, you also abide by the laws here in the U.S. And we were just learning about Mark Zuckerberg's testimony on Capitol Hill and there is a lot of focus on whether the tech companies should have to abide by the same rules about the content they distribute as Disney does, and as ABC does. When you think about all of the rules you have to play by as a content company, do you think that the tech companies should have to play by the same rules when it comes to content? Right now, they're exempt.
BOB IGER: Well, there are different rules and regulations that relates to content in the United States. I think we all are subject to libel and slander laws. Slander law is, for instance, you just can't say anything about somebody. But it's the broadcast regulations that I think are the most evident in the United States. Some cable entities and some of the new entrants to the marketplace like Netflix are not – and other content creators and distributors, are not subject to the same rules. So, there's already a bit of a double standard that exists here about content, depending on what platform. So, I do happen to -- should there be a level playing field in that regard? Yes. I think broadcasters are constrained by regulation. As it relates very specifically to regulation for tech, most of what's discussed about tech regulation is broader than content obviously. It's the impact they have on people and society. You know, I do think that tech to technology companies, those that are most I think being scrutinized have done a lot of good in the world and changed our world in many respects for the better. But there's also, a negative side to it. There's a lot of bad has also been done. And I think it's up to governments of course, not companies like us, to really carefully scrutinize the negative side of it. And to the extent that that gets really negative, and meaning has a damaging effect societally, I think it, you know, should be looked at. And regulation should be considered.
JULIA BOORSTIN: And just a final question about your perspective on the health of the American consumer right now, you have so many connections to consumers, particular at the parks. You can see what kinds of vacations people are booking months out. What's your sense of the health, right now? Are people concerned and pulling back?
BOB IGER: Well, we'll some more probably at earnings, which I think are November 7th. But, what we've seen so far, meaning in the recent few months since we last had an earnings call, is it's still relatively positive as it relates to the American consumer, both in terms of travel and visitation to our parks and advanced bookings. But also, the advertising marketplace is still very strong.
JULIA BOORSTIN: Thanks so much, Bob, for your time. We really appreciate it. We look forward to hearing more at earnings next month.
BOB IGER: Thanks, Julia.
For more information contact:
Jennifer DaubleCNBCt: 201.735.4721m: 201.615.2787e: jennifer.dauble@nbcuni.com
Emma Martin CNBCt: 201.735.4713m: 551.275.6221e: emma.martin@nbcuni.com
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5ac32a686b4fd95a86da2baa5e5ec002 | https://www.cnbc.com/2019/10/22/first-on-cnbc-cnbc-transcript-verizon-ceo-hans-vestberg-and-disney-direct-to-consumer-chairman-kevin-mayer-speak-with-cnbcs-david-faber-today.html | First on CNBC: CNBC Transcript: Verizon CEO Hans Vestberg and Disney Direct-To-Consumer Chairman Kevin Mayer Speak with CNBC's David Faber Today | First on CNBC: CNBC Transcript: Verizon CEO Hans Vestberg and Disney Direct-To-Consumer Chairman Kevin Mayer Speak with CNBC's David Faber Today
WHEN: Today, Tuesday, October 22, 2019
WHERE: CNBC's "Squawk on the Street"
The following is the unofficial transcript of a FIRST ON CNBC interview with Verizon CEO Hans Vestberg, Disney Direct-To-Consumer Chairman Kevin Mayer and CNBC's David Faber on CNBC's "Squawk on the Street" (M-F 9AM – 11AM) today, Tuesday, October 22nd. The following is a link to video of the interview on CNBC.com: https://www.cnbc.com/video/2019/10/22/verizon-will-give-customers-12-months-of-disney-for-free.html.
All references must be sourced to CNBC.
DAVID FABER: We do have a busy morning at post nine. Verizon CEO Hans Vestberg, he's a frequent guest at this desk. But here's another guy we don't see very often: Disney's head of Direct-to-Consumer, Kevin Mayer, joins us as well
JIM CRAMER: That's unbelievable. How did you get these guys?
DAVID FABER: You know, you pick up the phone and good things happen.
JIM CRAMER: I saw a couple guys down there, I said, 'I think I know those guys. What do they -- can we get them?' Now here they are, they're right here.
DAVID FABER: Guys, thanks for being here today. You've got some news, we're going to break it right now in terms of Disney Plus, of course, which Kevin you oversee at Disney. November 12th is the rollout date. A lot of people may have already started to see the advertisements that are starting to post frequently. And Hans, as well, you are partnering with them to provide your wireless customers, your unlimited, your Fios customers as well, with Disney Plus. Tell us about the deal.
HANS VESTBERG: I can start. You know, we are, of course, extremely excited to partner with Disney. We are going to offer to our customers—both the wireless customer, the Fios customers, the 5G home customers, basically exclusive with Disney Plus. We will bring that one year for free and, of course, this is part of our strategy and we're extremely happy to partner with Disney with the super content they have and this extremely exciting Disney Plus they're coming out with.
DAVID FABER: Kevin, why are you -- why is Disney doing this deal? And we should make it clear, it is going to be free for a year to unlimited wireless customers of Verizon.
KEVIN MAYER: Correct.
JIM CRAMER: That's amazing.
DAVID FABER: Why are you doing that?
KEVIN MAYER: Well, we like to partner with some of the -- with the top brands in the industry. And Verizon is at the top of the game with wireless. And we think we'd like to offer their customers the opportunity to look at Disney Plus and experience it. And we think it is a great channel. We have other direct-to-consumer channels, we have partnerships with Microsoft or Xbox, with Google for Chromecast and Android devices and Roku and others. But this, we think this is a great wholesale partnership. And we're very pleased to be in it.
DAVID FABER: Well, it would seem, there is so much focus, of course, on the rollout of Disney Plus, how many subscribers you're going to have, what metrics you're going to share with us. It would seem at least that rather the box gives you a big subscriber -- potential subscriber number? I mean, we're talking about tens of millions of potential customers who at least I would think would want to sign up if it's going to be free for the first 12 months.
KEVIN MAYER: I think it will help. It will certainly boost our numbers somewhat. But we also think it is great for consumers. And it is a brand that we're really happy to be in partnership with, actually.
HANS VESTBERG: I just need to say, we want to give our consumer choices. This is one of the best choices we can give them. On top of our network, we have a great network. We're building 4G and 5G and of course, our Fios network. So, on top of that, giving our customers this opportunity is a great sort of consumer experience.
DAVID FABER: Hans, if want it sign up for Disney Plus, though, starting November 12th, I'm going to spend about 84 bucks a year. I can maybe do less, right, if --
KEVIN MAYER: $69.99 for a year.
DAVID FABER: 69 for the year?
KEVIN MAYER: Yes.
DAVID FABER: So, are you paying – obviously, there is some compensation going to Disney as a result of this discount you're giving your customer base?
HANS VESTBERG: I think we have a really good commercial agreement within this. And I think we both are happy with it. We think it both will boost the customer for Disney and for Verizon. And I think that's the most important for us. You know, I think, again, it is part of our strategy. I mean, I outlined our strategy a year ago, where basically, we have the best network, we have the best brand, and we have the distribution. We are going to work with the best brands. And Disney is there.
DAVID FABER: Are you going to spend marketing dollars as well supporting this, and supporting Disney Plus?
HANS VESTBERG: Yes. Of course. We're going to jointly, of course, market this to our customers. And you--
KEVIN MAYER: And we're going to market to our customers, too. It is a good win-win deal, I think. And it's been a very great process to work with Verizon.
DAVID FABER: And why Verizon as opposed to perhaps another wireless provider and/or others out there --
KEVIN MAYER: Well, Hans, here. Hans, obviously.
HANS VESTBERG: It's an easy question.
DAVID FABER: It's just you, Has. It's just you.
KEVIN MAYER: We think it is -- it is the world class network. It's a great brand. It's the kind of brand we're proud to be associated with. And that's why we did it with Verizon.
CARL QUINTANILLA: Everyone is talking about the Twitter threat. Right? The Disney Plus made, all day long, all the content. It makes it feel like the tone is going to be about legacy content as opposed to new original content. What -- where should our heads be on that?
KEVIN MAYER: Well, we have both, obviously. We have a large library and we have – we're very proud of the content that we have that we're serving that we've already produced and has been exposed to consumers over decades. But we have a lot of original content. We have more than 25 original series that we're coming out with in the first year. More than ten movies and specials and as we go forward in time, there's going to be a lot of originals that we produce. We're going to produce – we're spending over a billion dollars in the first year and over $2.5 million five years out as we announced at our Investor Day six months ago. We're spending a lot of money and we're creating great content—originals.
JIM CRAMER: Is this go to be it or are we going to see more deals, T-Mobile, AT&T or is this exclusive?
KEVIN MAYER: No, this is exclusive. You won't see another wireless deal.
JIM CRAMER: And why was it – you know, there are very few things that are kept as – this was secret. I didn't know. I kept thinking –
HANS VESTBERG: We broke the news here and now.
KEVIN MAYER: Yeah, we wanted to break it here.
DAVID FABER: You've got a problem with that?
JIM CRAMER: Well, no. I just want to kind of mention that it is seminal. I mean, I was thinking – big box, Disney was going to break down. I didn't think they had –
DAVID FABER: It gives Disney, I would, think right out of the box, a potential audience and subscriber numbers that are going to be very strong. But Kevin, you know how many investors are very much focused on your early subscriber numbers, what you're going to be willing to share with the investment community in terms of your expectations. Can you give us a sense here?
KEVIN MAYER: Well, periodically we'll be able to share subscriber numbers for sure. I mean – asked in our Investor Day back in April, that by '24, our fiscal year '24, to have 60 – 90 million subscribers, about a third domestic, two-thirds international. And we feel confident we'll hit that. And over time we will be releasing numbers.
DAVID FABER: What have the early -- can you give us a sense in terms of – I've heard there was some -- in the Netherlands you guys have been offering -- I'm not sure exactly what I'm hearing. And 450,000 people have signed up.
KEVIN MAYER: We're not announcing how many people signed up in the Netherlands. But we have a trial launch there to test the technology and test the product and to see how consumers like to interact with it. And we launched that September 12th. It's been up for about 6 weeks. And it is doing very well. We have a lot of free trialists. They gave us their credit card, and unless they cancel, they'll become paid subscribers on November 12th – when we'll unleash all of the original programming--
DAVID FABER: Over this couple of – well, not even -- six weeks or so, anything -- any takeaways, in terms of feedback?
KEVIN MAYER: Well the big takeaways are: the consumers like it. We've got a lot of positive feedback. I think there's been some good press about it. It was a technical test. We wanted to see if there were technical issues with the service in the app. And I'm glad to say nothing major appeared. So, I think we're in good shape for the long-term—
DAVID FABER: The Netherlands?
KEVIN MAYER: Well, the Netherlands has a lot of broadband. There's a big over-the-top SVOD business there. And we have a lot of -- our content is not very encumbered in the Netherlands. So, we can offer most of our library content.
DAVID FABER: This is also for new Fios customer, which you make the point as well.
HANS VESTBERG: Yes.
DAVID FABER: 5G.
HANS VESTBERG: 5G Home.
DAVID FABER: But it is much to your existing base of customers, who are --
HANS VESTBERG: It is also new customers of course joining us.
DAVID FABER: Right. But I guess my point is, how do you view it from a -- it is a plus for those of us who are already Verizon Wireless Unlimited customers? But at the same time, you believe it is going to allow you to attract new customers.
HANS VESTBERG: Definitely. I think we learned a lot. We had a sort of an exclusive agreement on music with a big brand in Silicon Valley, and we learned a lot about how that is really resonating with our consumers. And I think this is just up an alley and now we can offer it also to the home people, consumers and the Fios. So, I think it's big for us. We have hundreds of millions of subscribers on our wireless network that are going to get this offer. And again, for us, using our strength. But we also are doing other things from our partnership. I mean, dense populated areas, like the theme parks, we're talking about 5G together with Disney. We're actually having drone discussions, as well—how we want to use our drone technology at Verizon.
DAVID FABER: What does that mean–you're having 'drone discussions'?
HANS VESTBERG: We have a company called Skyward doing drones, online on-site drones. We are discussing how that can be moved on different movie sets.
KEVIN MAYER: Not for Disney Plus. That's for –
HANS VESTBERG: Different areas of business. So, just look, in general, we think that Disney is a great company to partner with because we are very different assets.
JIM CRAMER: Yeah, I've got to tell you guys, I pay a lot of money for this ESPN Plus. Am I going to wake up and find that if I subscribe with AT&T, I get ESPN plus for free? I mean, I pay -- it is one of the bills that I get. I'd like to stop paying for that.
KEVIN MAYER: Well, that's not in our plan actually right now. There's no plans--
JIM CRAMER: Why don't we break some news?
KEVIN MAYER: Why not put it in there? I guess we can talk about it. I don't know.
JIM CRAMER: I mean, you can just own everyone, if you give this to me free, right? I mean, right here, can't you just approve that? Or you have to talk to Iger first. Is that the deal?
KEVIN MAYER: I have to talk to Iger first, exactly. Well said.
DAVID FABER: Kevin, there's -- again, a great deal of focus on this from your investor base given the importance of it for overall for Disney. There is also concern about how much money you're going to be spending opportunities. Are there for more partnerships, similar to this, where you're going to get marketing dollars spent not by Disney itself?
KEVIN MAYER: There is a possibility of that. There is nothing in the works right now. We feel pretty good about our own marketing efforts. As you know, throughout the company, we have many, many millions of touch points with consumers. We're going to utilize all of them. We spend marketing dollars of our own, too. But we feel good. The awareness is high. We do benefit from the brands, Disney, Marvel, Pixar, "Star Wars," National Geographic, all of this the brands are prominently in that service and we think we benefit from that, too. There's built in brand equity. So, we think our marketing efforts and our direct-to-consumer touch points are going to work really well.
CARL QUINTANILLA: We should mention, Netflix, premarket just took a spill, on our conversation. I wondered whether or not you think some of the costs of tent-pole series is getting excessive or the cost of procuring a show runner, for example, is it getting stretched?
KEVIN MAYER: Well, it's clearly getting more expensive. But I think, you know, talent like that has value. It is a scarce commodity. And while the price, the cost has gone up, we think that we're -- we can stay in the game, make great product, do it a reasonable price and monetize it through this direct-to-consumer relationship. I think the business we are getting into has fundamentally good economics.
DAVID FABER: Although it is going to be diluted for some period of time, clearly.
KEVIN MAYER: Yes, it is.
DAVID FABER: And you haven't told--
KEVIN MAYER: '24 is break even.
DAVID FABER: Say it again?
KEVIN MAYER: FY '24 will be break even.
JIM CRAMER: But this is still in keeping with – remember, Bob said that '24 is the year we should be thinking about. This doesn't send it back to '25, right?
KEVIN MAYER: No, no. Not at all. That's why '24 is when we're break even. So, it's all good.
JIM CRAMER: And how is ESPN Plus right now? What numbers do you have?
KEVIN MAYER: Well, we'll announce that on our earnings call. So, that's when we announce the numbers. And it is doing well. It's doing fine.
DAVID FABER: And finally, on Netflix, which as Carl mentioned, may be down a bit on this announcement, when is all of your content going to be off of Netflix? Isn't that going to eventually be the case? I know certain deals have certain expiration times. So, eventually, you want all of that content--
KEVIN MAYER: Yeah, we do. We had our FY -- 2016 to 2018 movie slates were on Netflix. And that's pay one and what's called a pay two deal. So, it goes on for 18 months after it has been in theatrical and home video. And then it has a hiatus where it comes to our service and some of those titles will go back in several years for a short period of time.
DAVID FABER: And finally, Hans, what are your expectations here for your customer base? How many people do you think are going to take this offer?
HANS VESTBERG: I think we have good experience from when we did our exclusive on music. How we are materializing that together with our partner. And again, we're doing this with the best partner, with the best brands and the best content. And that's why I'm very optimistic. It is very transformative for us. It is part of our strategy at the beginning of the year. So, to be honest, I'm really happy with it. I think this -- I'm really satisfied with what we're doing right now.
DAVID FABER: Well, we'll be watching closely. Gentlemen, thank you both for joining us.
KEVIN MAYER: Thank you.
DAVID FABER: For breaking the news right here.
HANS VESTBERG: Yeah. We're breaking the news here.
JIM CRAMER: No, that's really worthwhile.
DAVID FABER: Do it again. We're ready. Anytime. Kevin Mayer, Hans Vestberg.
For more information contact:
Jennifer DaubleCNBCt: 201.735.4721m: 201.615.2787e: jennifer.dauble@nbcuni.com
Emma Martin CNBCt: 201.735.4713m: 551.275.6221e: emma.martin@nbcuni.com
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61061388e9942364e94f1f3fdb26ec06 | https://www.cnbc.com/2019/10/22/forex-markets-us-china-trade-war-in-focus.html | Dollar up against sterling, euro on revived Brexit fears | Dollar up against sterling, euro on revived Brexit fears
U.S. hundred dollar bills lie in a stash.Alena Vikhareva | iStock | Getty Images
The dollar rose on Tuesday against the pound and euro as uncertainty spread ahead of the British parliament's vote on the Withdrawal Agreement Bill which will shine light on when and how Britain will exit the EU.
The United Kingdom is expected to leave the European Union on Oct. 31, but the deal Prime Minister Boris Johnson and his European counterparts agreed last week has not been yet voted on in Britain's parliament, which forced Johnson to request an extension to the leaving date from Brussels.
The bill is expected to be presented for a vote around 1800 GMT.
Sterling was down 0.35% to $1.291 in mid-morning trade after Johnson told parliament that if it delayed his Brexit legislation he would abandon his attempt to ratify the deal to leave the European Union and push for an election instead.
The euro was down 0.19% versus the dollar, though remains up 2.09% this month, driven mostly by recent Brexit developments, as well as by trade disputes between the United States and China.
"I think the clear theme for euro and sterling is consolidation after last week's Brexit euphoria," said Mark McCormick, global head of foreign exchange strategy, TD Securities.
Elsewhere, he said, Tuesday morning trade was driven by, among other factors, "a reach for yield, which is probably a function of a ceasefire in the trade wars and the scope for Fed easing next week."
Hopes the United States and China were making progress to resolve their trade dispute supported the dollar in the Asian trading session. China's Vice Foreign Minister Le Yucheng said progress was being made in discussions with the United States and that while both sides respected each other, no problem was beyond resolution.
The dollar index was last up 0.17% to 97.489.
Elsewhere, the Canadian dollar weakened against its U.S. counterpart after Prime Minister Justin Trudeau hung onto power after a tight election on Monday that saw his government reduced to a minority. He now looks set to govern with support from the left-leaning New Democrats who would make the construction of new oil pipelines more difficult.
The left-leaning coalition isn't "beneficial for the Canadian dollar, versus a Conservative majority which would have seen a rally, largely because there is going to be focus on the pipelines, which reinforce some of the competitiveness issues on the Canadian oil front," said McCormick.
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695d5b97a4238d586bcbd479f1ee64f1 | https://www.cnbc.com/2019/10/22/harley-davidson-tops-forecasts-as-international-sales-improve.html | Harley-Davidson tops forecasts as international sales improve | Harley-Davidson tops forecasts as international sales improve
Customers view Harley-Davidson Inc. motorcycles at the company's dealership in South San Francisco, California, U.S., on Tuesday, June 26, 2018.David Paul Morris | Bloomberg | Getty Images
Harley-Davidson beat expectations for profit on Tuesday and stuck to its full-year shipment forecast, allaying fears of another major hit from European import tariffs and a further slump in sales in its main U.S. market.
Shares of the company rose as much as 8.8% to $40.36, as it posted the first rise in international sales in a year during the third quarter and a 3.6% dip in U.S. retail motorcycle sales - the smallest decline in nearly three years.
Profits continued to sink - by 24% - but the results offered some hope that one of the biggest names in motorcycles was finally beginning to arrest a slide in global sales that it has been fighting for years.
Sales in the world's biggest motorcycle markets in Asia, which Harley has targeted with smaller bikes that go against its traditional profile, rose 8.7% in the quarter and are up about 1.6% this year overall.
The company plans to source half of its revenue from overseas by 2027 and international retail sales rose 2.7% to 23,619 motorcycles in the quarter.
While worldwide shipments fell 5.8% to 45,837 motorcycles, they topped analysts' estimates by over 1,000 motorcycles, and the Milwaukee, Wisconsin-based company stuck to its 2019 shipment target of 212,000 to 217,000 bikes.
"As we look to the remainder of 2019, we are encouraged by the momentum of retail sales trends through the first nine months of this year but also recognize substantial headwinds that we continue to face," Chief Financial Officer John Olin said.
The company is also cutting spending and said it now expects 2019 capital expenses of $205 million to $225 million, about $20 million less than its previous estimates.
Excluding items, the company earned 70 cents per share, beating Wall Street expectations of 52 cents while revenue from motorcycles and related products overall fell 4.9% to $1.07 billion.
The company, which has been criticized by President Donald Trump for its plan to shift some U.S. production overseas, has also been battling the effects of trade tensions on its business globally.
Harley said on Tuesday retaliatory import duties imposed by the European Union and China on its bikes would cost the company about $105 million in 2019, up from its prior estimate of $100, with about $90 million of the hit coming from EU tariffs.
Brussels in June raised import duties on U.S.-manufactured Harley bikes to 31% from 6%, and the company said the impact from tariffs more than doubled in the third quarter from a year ago to $21.6 million.
In response, Harley plans to begin shipping bikes from its Thailand plant but a delay in regulatory approval from the trading bloc means it will not see any benefit in earnings before the second quarter of 2020.
Read Harley's earnings release here.
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fb59838a88959dde3418a6306628966c | https://www.cnbc.com/2019/10/22/heres-why-apple-shares-could-rally-another-25percent.html | Here's why Apple shares could rally another 25% | Here's why Apple shares could rally another 25%
VIDEO2:5002:50Why this analyst says he would buy Apple, despite record highsTrading Nation
Apple just smashed through to fresh records.
The iPhone maker surged nearly 2% to begin the week after Raymond James analysts upped their price target to $280, the most bullish on the Street. The firm cited stronger estimates for iPhone 11 sales as reason for the increase.
Craig Johnson, chief market technician at Piper Jaffray, is ready to get even more bullish.
"The trend looks great," Johnson said on CNBC's "Trading Nation" on Monday. "The stock has just broken out to new all-time highs, and in fact when you look at the size of the consolidation it just broke out of and you do a measurement on it, you can certainly argue for a price objective that, purely based on the charts, [takes you] north of $300 so I'd still be a buyer of Apple in here."
A move to $300 marks 25% upside from Monday's close. It would also mark new highs for the stock.
Strategic Wealth Partners president Mark Tepper says there's more to like about Apple than what Raymond James outlined in its bullish case.
"What the call doesn't really mention are some of the things that interest us when it comes to Apple. For the first time in a long time, the iPhone now makes up less than 50% of Apple's revenues. Why is that important? Because they're in the process of becoming less reliant on just one product, they're diversifying their business," Tepper said during the same segment.
Tepper is especially optimistic about growth in Apple's wearables and services sectors, two areas that focus on recurring revenue.
However, while he owns the stock, Tepper has trimmed his position recently to take profits on the back of its major surge higher. Apple is the best Dow performer this year after climbing 52%.
"Love the company. We're going to continue to own the stock, but I do believe most of the easy money has already been made," said Tepper.
Disclosure: Strategic Wealth Partners has a position in AAPL.
Disclaimer
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5a988a6ecd688a600ae7bcfe6669f37b | https://www.cnbc.com/2019/10/22/house-rejects-schiff-censure-for-false-retelling-of-trump-phone-call.html | House rejects censure of Adam Schiff after Republicans denounce 'false retelling' of Trump phone call | House rejects censure of Adam Schiff after Republicans denounce 'false retelling' of Trump phone call
Representative Adam Schiff, a Democrat from California and chairman of the House Intelligence Committee, right, pauses while speaking as ranking member Representative Devin Nunes, a Republican from California, left, listens during a hearing in Washington, D.C., U.S., on Thursday, March 28, 2019.Andrew Harrer | Bloomberg | Getty Images
The House of Representatives rejected a motion to censure House Intelligence chair Adam Schiff after Republican criticism that Schiff lied to Congress during a September 27th hearing.
The resolution, introduced by Arizona Republican Andy Biggs and co-sponsored by 182 members of the Republican caucus, claimed Schiff manufactured a "false retelling" of the July 25 phone call between President Donald Trump and Ukrainian President Vlodomyr Zelensky, which is now at the center of an impeachment inquiry facing President Trump.
The resolution stated that Schiff's retelling, which Schiff himself characterized as a "parody" of Trump's call with Zelensky, "had no relationship to the call itself" and "br[ought] disrepute upon the House of Representatives, and ma[de] a mockery of the impeachment process, one of this chamber's most solemn constitutional duties."
The censure vote is the latest attempt from Republicans to rebuke Schiff. Trump and and the GOP have painted Schiff as a partisan operative hellbent on removing Trump from office.
Schiff, a key player in the impeachment inquiry started by House Speaker Nancy Pelosi in late September, is a frequent target of Republicans in the media and government.
Secretary of State Mike Pompeo, who was on the call between Zelensky and Trump, said Schiff should be "embarrassed" by his conduct and accused him of running a "kangaroo court" in an interview with ABC's "This Week" on Sunday.
Schiff has also repeatedly drawn the ire of Trump, who tweeted his approval of the resolution on Monday.
tweet
Trump also called for Schiff's resignation last week, and suggested Schiff should be investigated for his work in probing President Trump on the Intel Committee.
tweet
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43719feed59686d18c2bd42982437212 | https://www.cnbc.com/2019/10/22/infosys-probes-alleged-unethical-practices-by-top-officials-shares-sink.html | Infosys probes alleged 'unethical practices' by top officials; shares sink | Infosys probes alleged 'unethical practices' by top officials; shares sink
Vivek Prakash | Bloomberg | Getty Images
Infosys said it was investigating whistleblower claims accusing its top two executives of "unethical practices" to boost short-term profit, sending its shares to their worst intraday fall in over six years.
The allegations were part of a letter dated Sept. 20, seen by Reuters, which said Chief Executive Officer Salil Parikh and Chief Financial Officer Nilanjan Roy engaged in forced revenue recognition from large contracts and did not adhere to accounting standards.
Chairman Nandan Nilekani said in a statement on Tuesday that India's No.2 software services exporter placed the complaints before the audit committee on Oct. 10, and before the non-executive members of the board on Oct. 11.
The letter, signed by "Ethical Employees" who claim to be part of Infosys, also alleged irregularities with large deal approvals and said Roy directed certain people to make wrong assumptions on deals to show margins.
"Several billion-dollar deals of last few quarters have nil margin," the letter said.
The allegations come just two years after Infosys endured a shakeup that saw its then top boss Vishal Sikka leave the company.
The complaints are being dealt with in an objective manner, and Parekh and Roy were not part of the investigations to ensure independence, Nilekani said.
One of the complaints "largely deals with allegations relating to the CEO's international travel to the U.S. and Mumbai," Nilekani added.
Parekh did not respond to Reuters' request for comment.
Shares of the Bengaluru-based company tanked as much as 16%, its biggest intraday percentage fall since April 2013. The fall wiped out 470 billion rupees ($6.63 billion) in market capitalization, which was at 2.79 trillion rupees as of 1220 local time (0650 GMT).
"There will be overhang on the stock until there is clarity, Infosys is the blue-eyed boy as far as corporate governance is concerned... two complaints in two years could shake investor confidence, at least temporarily," said Deepak Jasani, head of retail research at HDFC Securities.
The Economic Times first reported the details of the letter on Monday.
The audit committee has retained the law firm of Shardul Amarchand Mangaldas & Co. to conduct an independent investigation, and the company's board will take appropriate steps based on the outcome of the investigation, the company said.
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d14453ac88a09fb2764952920c8ac487 | https://www.cnbc.com/2019/10/22/intel-files-antitrust-lawsuit-against-softbank-backed-firm-patents.html | Intel files antitrust case against SoftBank-backed firm over patent practices | Intel files antitrust case against SoftBank-backed firm over patent practices
Aaron M. Sprecher | Bloomberg | Getty Images
Chipmaker Intel has filed an antitrust lawsuit against a SoftBank-owned investment company alleging the firm stockpiled patents to hold up technology companies with numerous lawsuits.
The complaint filed late Monday in the U.S. District Court for the Northern District of California in San Jose alleged that Fortress Investment Group, which SoftBank bought in 2017 for $3.3 billion, acquired control of more than 1,000 U.S. technology patents.
Intel said that Fortress and other companies it owns or controls filed lawsuits against the Santa Clara chipmaker claiming that nearly every Intel processor made since 2011 infringed patents the companies had obtained control of from NXP Semiconductors.
"One way in which Fortress has tried to turn around its performance and justify SoftBank's investment in it is through increased speculation on patent assertions," the lawsuit said.
"Intel brings this complaint to end a campaign of anticompetitive patent aggregation by Fortress and a web of (patent assertion entities) that Fortress owns or controls."
SoftBank did not immediately respond to a request for comment. SoftBank also owns Arm Holdings, a British chip firm whose technology is making inroads on key Intel markets such as personal computers and data centers.
Intel said Fortress' efforts to gather patents constituted anticompetitive behavior because they were driven by the idea that its purchases would cost less than what technology companies would pay to avoid lawsuits.
"Fortress' aggregation is intended for an anticompetitive purpose—to invest in patents at costs lower than the holdup value of the patents," Intel wrote in its complaint.
VIDEO10:0410:04Intel CEO Bob Swan on competition and growthSquawk Alley
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3237b0424daab6be105f0f86aefff2f9 | https://www.cnbc.com/2019/10/22/jimmy-carter-hospitalized-after-fall-at-georgia-home.html | Jimmy Carter hospitalized after fall at Georgia home | Jimmy Carter hospitalized after fall at Georgia home
Jimmy CarterPrakash Mathema | AFP | Getty Images
Former U.S. President Jimmy Carter has been hospitalized after a fall at his home in Plains, Georgia.
A statement from The Carter Center says Jimmy suffered "a minor pelvic fracture" on Monday, but remains in good spirits and looks forward to recovering at home.
Carter Center spokeswoman Deanne Congileo told The Associated Press that she had nothing more to add to the statement.
Carter already fell once at his home earlier this month, leaving the 95-year-old with 14 stitches and bruising around his left eye. Despite that, he still showed up to help build a home with Habitat for Humanity the next day in Nashville, Tennessee. He used a cane when he rallied volunteers that morning.
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4ef46dc115a2e8c49ccc37d3007d6ae2 | https://www.cnbc.com/2019/10/22/judge-rules-ex-deutsche-bank-traders-can-be-prosecuted.html | Judge rules ex-Deutsche Bank traders can be prosecuted under wire fraud law for alleged 'spoofing' | Judge rules ex-Deutsche Bank traders can be prosecuted under wire fraud law for alleged 'spoofing'
Krisztian Bocsi | Bloomberg | Getty Images
A federal judge on Monday said that a deceptive commodities trading tactic known as spoofing can be prosecuted under the wire fraud statute, a decision that will allow a criminal case against two ex-Deutsche Bank precious metals traders to move forward.
The decision by Judge John Tharp in U.S. District Court in Chicago also supports federal prosecutors' efforts to criminally charge individuals for spoofing trades dating as far back as 10 years, the statute of limitations for wire fraud that affects a financial institution.
The charges of commodities fraud and violations of the Dodd-Frank Act — which explicitly made spoofing a criminal offense — have shorter statutes of limitations, of six years and five years, respectively.
James Vorley and Cedric Chanu, the traders in the case before Tharp, were indicted in July 2018 on charges of conspiracy and wire fraud.
Tharp's decision allowing the use of the wire fraud statute came in response to a motion to dismiss the case by lawyers for Vorley and Chanu.
Prosecutors said the two men manipulated precious metals futures markets from 2009 to 2011 individually, in coordination with one another, and with a third trader, David Liew.
The trades identified by prosecutors allegedly involved spoofing, which involves placing trade orders with the intent to cancel them before they can be executed.
The goal of the tactic is to affect the price of the commodity so as to improve the performance of a pre-existing trading position in the market.
Lawyers for Vorley and Chanu had argued that the trades for which they were charged did not constitute so-called materially false statements, as is required for a charge to be filed under the wire fraud statute.
In his ruling Tuesday, Tharp said, "This case presents the question of whether a scheme to defraud commodities traders by placing 'spoofing' orders — orders that the trader intends to withdraw before they can be filled — can constitute wire fraud."
"The defendants say no, because wire fraud requires the making of a false statement — an express misrepresentation — and the indictment alleges none," Tharp wrote. "That is not the law."
Tharp noted that the U.S. Seventh Circuit Court of Appeals previously ruled that spoofing "can constitute a 'scheme to defraud' under the commodities fraud statute."
"As there is no material difference between a scheme to defraud under either statute, the answer to the question presented is, yes: the alleged spoofing scheme alleged in the indictment adequately charges violations of the wire fraud statute," Tharp said.
Tharp noted that the questions of whether the former Deutsche Bank traders' orders were, in fact, misleading and material, must be resolved at trial, instead of by a motion to dismiss the case.
Vorley's attorney, Roger Burlingame, in a statement to CNBC, said, "The government's charges have always been and remain absurd."
"James's trading was perfectly legal, and no market participant could possibly have been defrauded by live, at risk offers to trade on an anonymous exchange. We look forward to winning at trial," Burlingame said.
Michael McGovern, a lawyer for Chanu, said in an emailed statement, "As Judge Tharp repeatedly noted in his decision, the Government has yet to prove that Cedric did anything wrong — and we look forward to trial, when it will become clear that he did not."
"We will continue to mount a forceful defense on his behalf," McGovern said.
The Department of Justice declined to comment on the ruling.
Liew, who previously worked with Vorley and Chanu as a junior trader on the precious metals desk for Deutsche Bank, pleaded guilty in June 2017 to one count of conspiracy to commit wire fraud and spoofing.
Liew is a cooperating witness for prosecutors. He is awaiting sentencing.
The Justice Department has been aggressively cracking down on spoofing in the precious metals market. Federal prosecutors have lodged 13 spoofing cases against 19 defendants in the past five years.
In September, prosecutors indicted three J.P. Morgan precious metals traders — including the global head of base and precious metals trading — on charges that include racketeering conspiracy in connection with an alleged multiyear scheme to manipulate the precious metals futures markets.
Trade groups, including the Futures Industry Association, the U.S. Chamber of Commerce, the Bank Policy Institute and the Securities Industry and Financial Markets Association all filed briefs in January and February supporting Vorley and Chanu's argument to dismiss the charges.
In FIA's filing, the leading global trade organization says it "objects to the government's attempt to expand the wire fraud statute in a new way that unnecessarily invites harm to legitimate trading and the vitality of the futures markets."
In addition, the FIA cautioned that "if accepted, the government's theory of liability poses a serious risk of chilling legitimate, non-fraudulent trading by FIA's members and other market participants," the filing says.
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04b46dbc42b75a38ea62c2b1c542f782 | https://www.cnbc.com/2019/10/22/lyft-stock-jumps-after-report-it-sees-profitability-year-earlier-than-expected.html | Lyft stock jumps after co-founders tell WSJ they see profitability a year earlier than expected | Lyft stock jumps after co-founders tell WSJ they see profitability a year earlier than expected
Lyft President John Zimmer and CEO Logan Green applaud as Lyft lists on the Nasdaq at an IPO event in Los Angeles March 29, 2019.Mike Blake | Reuters
Shares of Lyft jumped 6.5% on Tuesday after co-founders Logan Green and John Zimmer said the company could become profitable by 2021. Uber's stock rose 3.5% on the news.
Lyft will be profitable on an adjusted EBITDA basis by the fourth quarter of 2021, which is one year earlier than analysts were expecting, Green said in an interview Tuesday at The Wall Street Journal's WSJ Tech Live conference. EBITDA is a measure of operating profits before financing-related expenses like interest, taxes, depreciation and amortization.
"We have in the bank over $3 billion, we have a clear path to profitability and the team is executing well," Zimmer said. "We need to build trust with a new class of investors and with two quarters beating expectations, we're excited for the next few quarters."
Lyft and rival ride-sharing service Uber have been in a race to reach profitability amid growing investor skepticism around money-losing tech companies. Shares of Uber and Lyft have dropped sharply from their IPO prices of $45 and $72 a share, respectively.
Lyft went public in March with ballooning losses of $900 million and no clear path to profitability. Since then, it has shown signs of breaking even. The company reported better-than-expected earnings for the second quarter and CFO Brian Roberts said he believes Lyft reached peak losses in 2018.
Analysts have also grown more confident in the company's potential. In August, Guggenheim analysts projected the company could become profitable in 2021 instead of 2023, as a result of price increases.
VIDEO5:2705:27'Dean of valuation' Aswath Damodaran says Uber and Lyft are undervaluedPRO Uncut
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d3e778015bb9bdee272743ec694604f5 | https://www.cnbc.com/2019/10/22/mcdonalds-mcd-earnings-q3-2019.html | McDonald's pulls back on promotions and earnings fall short, shares down 4% | McDonald's pulls back on promotions and earnings fall short, shares down 4%
VIDEO4:4304:43Stephens analyst Will Slabaugh breaks down McDonald's earnings missSquawk Box
For the first time in two years, McDonald's quarterly earnings fell short of estimates as its promotions struggled to lure U.S. customers away from the competition.
Shares of the company fell 4% in morning trading. McDonald's stock, which has a market value of $156 billion, is up 14% so far this year. But those gains trail the stock of Burger King's parent company Restaurant Brands International, which has gained 31% so far in 2019, giving it a market value of $31 billion. Shares of Wendy's, valued at $5 billion, are up 38% in the same time period.
Here's what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
Earnings per share: $2.11 vs. $2.21 expectedRevenue: $5.4 billion vs. $5.5 billion expectedGlobal same-store sales: 5.9% vs. 5.6% expected
McDonald's U.S. business, which accounts for more than a third of the company's total revenue, stumbled after ending one of its nationwide limited-time value deals, the 2 for $5 Mix and Match promotion. In the first half of the year, the Chicago-based company pointed to the promotion as a key sales driver.
The burger chain unveiled another promotion — buy one, get one for $1— for core menu items like Big Macs and Filet-O-Fish in mid-August. The deal tends to be pricier than the 2 for $5 promotion, according to SunTrust analyst Jake Bartlett.
In September, the last month of the quarter, the fast-food giant introduced a line of spicy barbecue chicken products, but the company did not refer to the menu addition as a significant reason for sales growth in its home market.
Instead, McDonald's pointed to menu price increases, national and local promotions, and tech-focused upgrades to stores drove domestic same-store sales growth. Price hikes contributed about a third of the same-store sales growth. The company has been renovating U.S. stores with features that usually encourage customers to spend more, like self-order kiosks and digital menu boards.
The company said U.S. same-store sales grew by 4.8% during the quarter, falling short of Wall Street's estimates of 5.2%. Notably, traffic to U.S. locations continued to decline.
"It's still negative. As I mentioned, it's still our largest opportunity, but not a meaningful change in trend in the third quarter versus second quarter," CFO Kevin Ozan told analysts on the conference call.
McDonald's competition has been generating more buzz when it comes to menu additions. With some help from social media, Popeyes Louisiana Kitchen, which is owned by Restaurant Brands International, sold out of its chicken sandwich in less than a month after its launch this summer. Wendy's brought back its popular spicy nuggets. As a result, Ozan said that McDonald's lost some chicken market share, although it continued to gain back burger market share.
Burger King has also been stealing some spotlight from McDonald's with the nationwide launch of its plant-based Impossible Whopper. In September, McDonald's announced plans to test a burger made with a Beyond Meat patty in select restaurants in Ontario, Canada.
"I would say there was certainly some competitive pressure in mid-August probably through mid-September," Ozan said.
Still, Ozan said that U.S. locations performed similarly during all three months of the quarter.
McDonald's breakfast, which has seen its sales growth falter, returned to growing at the same pace as the rest of the day. Next year, it will face more competition when Wendy's launches its own breakfast menu nationwide. The rival burger chain is planning a big advertising push and expects breakfast to become 10% of its daily sales relatively quickly.
"Having another entrance in next year will ensure that the market share fight remains as competitive as ever," McDonald's CEO Steve Easterbrook said.
The fast-food giant reported fiscal third-quarter net income of $1.6 billion, or $2.11 per share, unchanged from $1.6 billion, or $2.10 per share, a year earlier. Analysts surveyed by Refinitiv were expecting earnings per share of $2.21. The strength of the U.S. dollar negatively affected McDonald's earnings per share by three cents, Ozan said.
Net sales rose 1% to $5.4 billion, narrowly missing expectations of $5.5 billion. The company reported global same-store sales growth of 5.9%, thanks to strong performance in its international markets.
As McDonald's aims to hit $4 billion in global delivery sales this year, the fast-food chain has been expanding its delivery program. The company now has delivery partnerships with UberEats, DoorDash and GrubHub. McDonald's delivery is popular with its overseas customers.
The company's international operated segment, which includes top markets like Germany and France, reported same-store sales growth of 5.6% during the quarter, in line with Wall Street's estimates. That business makes up more than half of the chain's total sales.
Restaurants in McDonald's smaller international licensed segment, which includes Brazil, China and South Korea, saw same-store sales growth of 8.1%.
Read McDonald's full release here.
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3713fe0e18729de8a0233a73050218ef | https://www.cnbc.com/2019/10/22/servicenow-names-former-sap-chief-bill-mcdermott-as-ceo-stock-falls.html | ServiceNow stock drops as CEO leaves for Nike, replaced by former SAP leader McDermott | ServiceNow stock drops as CEO leaves for Nike, replaced by former SAP leader McDermott
Bill McDermottAnjali Sundaram | CNBC
Shares of enterprise software company ServiceNow fell as much as 15% after hours on Tuesday after the company said Bill McDermott, who recently stepped down as CEO of SAP, is joining ServiceNow later this year to become its new CEO. ServiceNow stock is now down about 5%.
John Donahoe, the current CEO, is leaving ServiceNow to replace Mark Parker as CEO of Nike, according to a statement.
Donahoe, who is set to start as Nike CEO in January 2020, will stay on as CEO through the transition, and he will keep his seat on ServiceNow's board until his term ends in June 2020.
Donahoe replaced Frank Slootman as ServiceNow CEO in 2017. Donahoe, the chairman of PayPal, was previously CEO of eBay. "A year from now, John's not going to be around," Slootman said on CNBC's "Squawk on the Street" at the time.
ServiceNow shares have risen 161% during Donahoe's tenure as its CEO.
McDermott, 58, spent 17 years at SAP and became co-CEO in 2010. He became sole CEO in 2014.
"I am excited, and I will do something at some point, and that will be discussed at a future date and on a future occasion," McDermott told reporters on a conference call on October 10, when SAP announced his departure.
Also on Tuesday ServiceNow provided preliminary third-quarter results and full-year guidance. The company reported $885.8 million in revenue for the quarter. Analysts polled by Refinitiv had been looking for $885.0 million. ServiceNow said it expects $3.240 billion to $3.245 billion in subscription revenue for all of 2019. The midpoint of that range is below the $3.253 billion FactSet consensus estimate.
ServiceNow shares are up 28% since the beginning of the year.
WATCH: SAP's Bill McDermott explains his decision to step down as CEO
VIDEO5:4605:46SAP's Bill McDermott explains his decision to step down as CEOSquawk Box
Follow @CNBCtech on Twitter for the latest tech industry news.
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44358e2a33b0dcee65752069cbe0ee0c | https://www.cnbc.com/2019/10/22/stocks-making-the-biggest-moves-midday-biogen-mcdonalds-ups-and-more.html | Stocks making the biggest moves midday: Biogen, McDonald's, UPS and more | Stocks making the biggest moves midday: Biogen, McDonald's, UPS and more
A multiple sclerosis drug is manufactured at the Biogen Idec plant in Cambridge, Mass.Essdras M Suarez | The Boston Globe | Getty Images
Check out the companies making headlines in midday trading.
Biogen — Shares of Biogen soared 26% after the drug maker said it is seeking regulatory approval for its Alzheimer's drug, aducanumab, months after stopping trials. Biogen erased its entire 25% year-to-date decline when it said aducanumab "reduced clinical decline in patients with early Alzheimer's disease."
Travelers — Shares of the insurance giant dropped 8.3% on the back of quarterly earnings results that badly missed analyst expectations. Travelers posted a profit of $1.43 per share while analysts polled by Refinitiv expected $2.35 earnings per share. The miss was driven by a sharp increase in reserves during the quarter.
McDonald's — Shares of fast-food chain McDonald's fell 5% after its quarterly earnings fell short of Wall Street's estimates as its promotions failed to gain market share from competitors like Burger King's parent company Restaurant Brands International, and Wendy's. McDonald's reported earnings per share of $2.11 on revenue of $5.4 billion. Analysts forecast earnings of $2.21 per share on revenue of $5.5 billion, according to Refinitiv.
Procter & Gamble — Procter & Gamble shares climbed 2.6% after the consumer goods company posted quarterly results that topped analyst expectations. Those results were driven by Procter's beauty, health care and fabric and home care lines, the company said.
JetBlue — The airline's stock jumped 7.3% on the back of better-than-expected earnings. JetBlue posted adjusted earnings per share of 59 cents. Analysts polled by Refinitiv expected a profit of 51 cents a share. "We are just beginning to see the benefits of our revenue, cost, fleet and capital allocation efforts," CEO Robin Hayes said in a statement.
United Parcel Service — Shares of UPS fell 2% after the carrier reported quarterly revenues of $18.32 billion, just missing consensus expectations. The company also announced that Chief Operating Officer Jim Barber, who's had a hand in much of UPS's global and freight businesses, will retire at the end of December after 35 years at the company.
Harley-Davidson — The Milwaukee-based motorcycle manufacturer rallied 8% after it surprised investors Tuesday with earnings results well ahead of expectations. Harley-Davidson reported earnings per share four cents ahead of forecasts, driven by a smaller-than-expected U.S. sales decline and a 2.7% climb in international revenues.
Hasbro — Shares of toy company Hasbro tanked 16.8% after falling short of expectations for its third-quarter earnings. Hasbro earned $1.575 billion in revenue, well below the estimated $1.716 billion estimated by analysts, according to Refinitiv. Earnings per share came in at $1.84, while estimates were $2.21 per share.
Sherwin-Williams — Shares of Sherwin-Williams jumped 3% after beating on the top and bottom lines of its third-quarter earnings and raising its full-year guidance. The paint company reported earnings of $6.65 per share on revenue of $4.868 billion. Wall Street expected earnings per share of $6.65 on revenue of $4.831 billion, according to Refinitiv.
Levi Strauss — Shares of denim marker Levi Strauss rose 3.4% after Macquarie initiated the stock with an overweight rating. The firm said the retailers has done a "great" job of reinventing itself, specifically women and millennials.
Kimberly-Clark — Shares of Kimberly-Clark fell 7% after the consume products company missed Wall Street estimates for third-quarter revenue. Kimberly-Clark reported revenue of $4.640 billion, missing the forecast $4.642 billion, according to Refinitiv.
—CNBC's Fred Imbert and Tom Franck contributed reporting.
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9bcd11698216211c7833726ac65026af | https://www.cnbc.com/2019/10/22/travelers-shares-tank-the-most-in-8-years-on-poor-earnings-taking-70-points-off-the-dow.html | Travelers' shares tank the most in more than 10 years on poor earnings, taking 70 points off the Dow | Travelers' shares tank the most in more than 10 years on poor earnings, taking 70 points off the Dow
Getty Images
Shares of Travelers dropped more than 8% after the insurer reported weaker-than-expected quarterly earnings. The stock was on pace for its biggest one-day drop since Dec. 1, 2008, when it fell 15.2%.
Travelers' decline shaved off about 80 points from the Dow Jones Industrial Average, which fell as Wall Street grappled with a deluge of corporate earnings results. Excluding Travelers' decline, the Dow would be up more than 100 points.
Travelers posted third-quarter earnings of $1.43 per share, well below a Refinitiv estimate of $2.35 per share. Travelers' earnings suffered in large part because the company set aside more than $290 million in reserves for lawsuits. The reserves were driven by a $220 million asbestos charge, higher general liability and commercial auto losses.
"We believe most investors expected reserve development for asbestos and commercial auto lines of business, but the commentary around the difficult tort environment spreading to general liability is concerning," said Sandler O'Neill analyst Paul Newsome in a note.
Newsome noted, however, that price increases remain strong for the company. "The question comes down to whether the price increases taken will be enough to improve the underlying underwriting margin into 2020."
Travelers was one of just a few companies posting a weaker-than-forecast on Tuesday, but the stock had an outsized influence on the Dow given the index's price-weighted construction.
— CNBC's Michael Bloom contributed to this report.
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a9697242e168f1f03f08b20e8f30bf84 | https://www.cnbc.com/2019/10/22/uk-lawmakers-vote-to-approve-brexit-bill-in-first-step-for-johnson.html | Brexit stalls as UK Parliament rejects short timetable for Boris Johnson's bill | Brexit stalls as UK Parliament rejects short timetable for Boris Johnson's bill
VIDEO5:1605:16UK lawmakers reject timetable for Brexit deal legislationPower Lunch
Lawmakers in the U.K. Parliament voted to reject a limited time frame for reviewing legislation related to Britain's withdrawal from the European Union.
MPs (Members of Parliament) rejected the timetable, which would have seen the Withdrawal Agreement Bill (WAB) legislation whizz through Parliament in three days, by 322 to 308 votes.
In reaction, sterling fell 0.1% versus the dollar. Prime Minister Boris Johnson said he would now pause the legislation until he had discussions with EU leaders.
European Council President Donald Tusk said following the vote that, following Johnson's decision to put the Brexit deal on hold, he would recommend that the other 27 member states of the European Union approve a delay of Britain's departure date.
"Following PM @BorisJohnson's decision to pause the process of ratification of the Withdrawal Agreement, and in order to avoid a no-deal #Brexit, I will recommend the EU27 accept the UK request for an extension. For this I will propose a writtenprocedure," Tusk said in a tweet.
Prior to the vote, many U.K. lawmakers had expressed frustration that three days was not enough time to understand the bill which runs to more than 100 pages.
The Conservative government had pushed for the timetable as it bid to hit its promise of delivering Brexit by October 31. It is also concerned that a longer period of review will result in the bill being heavily amended.
Britain's Prime Minister Boris Johnson speaks during Prime Minister's Questions session in the House of Commons in London, Britain September 4, 2019.Jessica Taylor | ©UK Parliament | Reuters
It now means that the U.K. is almost certainly not going to leave the EU on October 31 and the EU will provide an extension to prevent a no-deal Brexit occurring.
Earlier, MPs had voted, in principle, for the government's Withdrawal Agreement Bill to proceed, but now the passage of Johnson's agreement looks to be in real doubt. The Conservative government won that vote by 30 — the first time that U.K. lawmakers have, by a majority, backed any Brexit deal agreed between Brussels and London.
In response, the prime minister said he was disappointed with the delay but "one way or another we will leave the EU with this deal."
The leader of the opposition, Jeremy Corbyn, said he would offer to work with the Conservative government to agree on "a reasonable timetable."
The prime minister said earlier Tuesday that if this "timetable vote" failed to go his way, he could pull the whole legislation and instead call for a U.K. general election.
"If Parliament refuses to allow Brexit to happen and instead gets its way and decides to delay everything until January or possibly longer, in no circumstances can the government continue with this. And with great regret, I must say the bill will have to be pulled and we will have to go forward to a general election," he said.
However, a report in the FT suggested that Johnson may be open to a 10-day extension to allow MPs a longer amount of time to further review the bill.
If Johnson can get his Withdrawal Agreement Bill through the House of Commons, it would then need to be ratified by Parliament's upper chamber, the House of Lords. That final hurdle would see Johnson's Brexit deal with Brussels last week turn into U.K. law.
Having lost a crucial vote on Saturday, Johnson has been forced to pass his withdrawal bill through the House of Commons and be accepted before MPs (Members of Parliament) give their full consent.
If MPs were to make major changes to the agreement, despite agreeing to it in principle on Tuesday, the government is also expected to pull the bill.
On Saturday, the U.K. Parliament decided not to have a clear yes or no vote on the deal that the prime minister negotiated with the EU, arguing that Parliament should first approve all the necessary legislation to leave the bloc.
A majority of parliamentarians pushed for this in order to prevent a no-deal scenario at the end of the month, as it triggered a law that meant Johnson had to request a deadline extension with the EU.
VIDEO5:1405:14Where did Brexit come from?CNBC Reports
Reuters contributed to this report
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da35bc2b0896964bb375e2899f2d21c6 | https://www.cnbc.com/2019/10/22/us-bonds-treasury-yields-in-focus-as-investors-monitor-data-auctions.html | Treasury yields steady amid US-China trade optimism, economic data | Treasury yields steady amid US-China trade optimism, economic data
U.S. government debt yields held steady on Tuesday as investors monitored a fresh batch of economic data and Treasury auctions.
Treasurys rates have risen in recent sessions, however, thanks to a combination of de-escalation of U.S.-China trade angst and better-than-expected corporate earnings.
The benchmark 10-year Treasury note was just lower at 1.768%, while the yield on the 30-year Treasury bond was also slightly lower at 2.254%. The 10-year rate, which climbed above 1.8% on Monday, is up about 10 basis points over the last 10 days. Bond yields rise as prices fall.
Market focus remains centered on global trade developments after China's Vice Foreign Minister Le Yucheng said that Beijing and Washington had achieved some progress in their trade talks. His comments came less than 24 hours after President Donald Trump sounded optimistic about the prospect of a trade agreement by the middle of next month.
Most investors continued to focus on the marginally improved relations between the globe's two largest economies instead of the details of a "phase one" deal set to be haggled over for the next few weeks.
Last week, the U.S. and China secured a limited trade agreement, prompting Washington to suspend a scheduled tariff hike for October.
The world's two largest economies have imposed tariffs on billions of dollars' worth of one another's goods since the start of 2018, battering financial markets and souring business and consumer sentiment.
On the data front, the Philadelphia Fed non-manufacturing index for October will be released at around 8:30 a.m. ET. Existing home sales for September and the Richmond Fed survey for October will follow slightly later in the session.
The U.S. Treasury is set to auction $40 billion in 2-year notes on Tuesday.
Treasurys
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37afb3b5f03b4822866611b740c4f619 | https://www.cnbc.com/2019/10/22/weworks-ex-ceo-got-185-million-to-step-down-how-other-ceos-pay-compares.html | WeWork's former CEO could get $185 million to leave — that's more than other CEOs make on the job | WeWork's former CEO could get $185 million to leave — that's more than other CEOs make on the job
VIDEO4:4804:48Report: Softbank to take control of WeWorkSquawk Box
Nice job, even if you lose it.
As SoftBank takes control of WeWork in a deal that will value the company at between $7.5 billion and $8 billion, former CEO Adam Neumann is getting paid $185 million to walk away from the company, CNBC has reported.
That's more than the top annual compensation last year for CEOs who kept their jobs.
In addition to a $185 million consulting fee, Neumann's parachute includes $1 billion for his shares in the company and a $500 million credit line to help repay his loans to J.P. Morgan Chase, CNBC reported.
Here's how Neumann's $185 million payout stacks up against other CEOs' 2018 salaries, according to an annual survey by the Associated Press and Equilar, a compensation consultant.
Because CEO pay packages may include various forms of compensation, calculating the total value can be challenging. Other CEO pay surveys rank the top earners differently.
The highest-paid CEO according to Bloomberg News is Elon Musk. Last year, he earned an estimated $513 million, based on stock option awards, not salary compensation. Musk's salary was an estimated $56,000. Bloomberg also calculated that Brendan Kennedy, CEO of Tilray, a pharmaceutical and cannabis company, earned $256 million last year.
According to the Associated Press/Equilar survey, Hock E. Tan, of Broadcom, was the highest-paid CEO last year, with a salary of around $103 million.
CBS CEO Leslie Moonves came in second with $68 million, and Transdigm Group CEO W. Nicholas Howley, with $61 million, was third.
From 1990 to 2016, the median CEO pay has risen 438%, according to a Harvard study, and by next year is projected to be 514% higher.
Other top earners included Time Warner's CEO Jeffrey L. Bewkes, with $49 million; TripAdvisor's Stephen Kaufer, $43 million; Discovery Communications CEO David M. Zaslav, $42 million; Walt Disney's Robert A. Iger, $36 million; Wynn Resorts' Stephen A. Wynn, $35 million; Brenton L. Saunders of Allergan, $33 million, and Comcast's Brian L. Roberts, $33 million.
Disclosure: Comcast is the owner of NBCUniversal, parent company of CNBC and CNBC.com.
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9e883298d93f69785012b3307c76a626 | https://www.cnbc.com/2019/10/22/what-happened-to-the-stock-market-tuesday-utx-pg-rise-on-earnings.html | Here's what happened to the stock market on Tuesday | Here's what happened to the stock market on Tuesday
The Dow fell 39.54 points, or 0.15% to close at 26,788.10. The S&P 500 slid 0.36% to 2,995.99. The Nasdaq Composite pulled back 0.72% to close at 8,104.30. The major averages oscillated between gains and losses for most of the session as investors digested a slew of corporate earnings reports along with news on Brexit.
McDonald's and Travelers were the two Dow components that reported weaker-than-expected results, sending their stocks reeling. On the positive side of earnings, United Technologies and Procter & Gamble posted quarterly profits above expectations. JetBlue, UPS and Harley-Davidson also posted quarterly numbers on Tuesday. Despite the weak results from McDonald's and Travelers, overall S&P 500 earnings are mostly coming in better than expected. Wall Street also grappled with news on the Brexit front after a vote in the U.K. parliament made a deal extension more likely. The averages hit their lows on the day on the news out of London.
Biogen shares surged more than 26% after the company said it will seek regulatory approval for its Alzheimer's treatment. The gain in Biogen's stock lifted the iShares Nasdaq Biotechnology ETF (IBB) by 1.66%. Travelers, meanwhile, posted its worst day since 2008, plunging nearly 8%.
The earnings season continues on Wednesday with Boeing, Caterpillar and Microsoft among the companies scheduled to report. Read more here.
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fb621add7f373c257fceb4c9508f1302 | https://www.cnbc.com/2019/10/23/5-things-to-know-before-the-stock-market-opens-october-23-2019.html | 5 things to know before the stock market opens Wednesday | 5 things to know before the stock market opens Wednesday
Traders and financial professionals work on the floor of the New York Stock Exchange (NYSE) at the opening bell on October 3, 2019 in New York City.Drew Angerer | Getty Images
U.S. stock futures were pointing to a modestly higher Wednesday open on Wall Street. Dow stocks Caterpillar and Boeing initially dropped in premarket trading on disappointing earnings but later recovered. The S&P 500, despite Tuesday's slide, was just 1% away from its July record. The Dow Jones Industrial Average, which also fell Tuesday, was still only 2% below its own record close. The Dow and S&P 500 alternated between gains and losses for eight straight sessions, although they all were higher than where they were before that streak began.
Caterpillar on Wednesday lowered its full-year outlook and posted worse-than-expected earnings and revenue in the third quarter. The heavy equipment maker's sales in the Asia-Pacific region declined on lower demand in China due to the trade war between Beijing and Washington. In earnings also out Wednesday morning, Boeing reported third-quarter profit that fell short of estimates as it grapples with a crisis with its grounded 737 Max jets. Quarterly revenue at the aircraft maker, however, came in better than analysts had expected.
Facebook CEO Mark Zuckerberg walks to meetings for technology regulations and social media issues on September 19, 2019, in Capitol Hill, Washington, DC.Brendan Smialowski | AFP | Getty Images
Facebook's Mark Zuckerberg is set to testify Wednesday before the House Financial Services Committee about the company's cryptocurrency plans. Zuckerberg is bound to face questions that span well beyond Facebook's involvement in libra. The Facebook co-founder and CEO, according to his prepared remarks, is expected to tell the committee that libra "will extend America's financial leadership as well as our democratic values and oversight around the world."
A WeWork office in San FranciscoKate Munsch | Reuters
SoftBank has struck a deal to take control of U.S. office sharing startup WeWork. The Japanese conglomerate will provide $5 billion in new financing and up to $3 billion in a tender offer for existing shareholders. SoftBank will also speed up an existing $1.5 billion financing commitment. The deal caps off several tumultuous months for WeWork, which pulled its IPO filing and saw its CEO exit amid scrutiny from investors.
Two associates of Rudy Giuliani are set to be arraigned Wednesday. Lev Parnas and Igor Fruman are accused of making illegal campaign donations while lobbying to oust the U.S. ambassador to Ukraine. Giuliani, who at the time was trying to get Ukrainian officials to investigate Joe Biden's son, has said he knew nothing about the donations. Top Ukraine diplomat Bill Taylor testified Tuesday behind closed doors before House lawmakers conducting the Trump impeachment inquiry. Taylor said he was told a military aid package to Ukraine had been withheld by President Donald Trump pending an agreement from Ukraine to launch investigations into Trump's political rivals.
— The Associated Press contributed to this report.
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c71e66db903bbdb1fb23ce0c1c55e251 | https://www.cnbc.com/2019/10/23/as-chipotles-stock-slides-analysts-ask-if-its-valuation-has-peaked.html | As Chipotle's stock slides, analysts ask if its valuation has peaked | As Chipotle's stock slides, analysts ask if its valuation has peaked
Getty Images
Shares of Chipotle Mexican Grill fell 5% on Wednesday, despite crushing earnings estimates and reporting its highest same-store sales growth in more than two years.
Analysts are pointing to the stock's high valuation.
In the last year, Chipotle has soared 81% to $788 per share, giving it a market value of $22 billion. The average analyst price target for Chipotle shares is $844.22, according to Refinitiv. The stock hit a record high in July and kept climbing, peaking at $857.90 a share in early September.
Chipotle's stock is trading at nearly 49 times its forward earnings estimates and 64 times its prior 12-month earnings as of Tuesday's close, according to Refinitiv.
Its competitors in the restaurant sector have much lower price-earnings ratios. Shares of Yum Brands, the parent company of Taco Bell, and Starbucks trade at 26 times each company's forward earnings, Refinitiv data show. After McDonald's shares declined Wednesday on its lackluster third-quarter earnings, the restaurant giant's stock was trading at 23.6 times its forward earnings.
Jack in the Box, which has a market value of $2.2 billion, has roughly 300 fewer stores than Chipotle and lags its annual sales by about $300 million. The fast-food chain's stock trades at 17 times its forward earnings, according to Refinitiv.
Morgan Stanley analyst John Glass wrote in a note that Chipotle's share price has rapidly outpaced earnings estimates for fiscal 2020, indicating that investors are giving Chipotle credit for its performance "well in advance."
"Now, with a dynamic of tougher compares and potentially moderating same-store sales in 2020, we think that valuation will start to matter more," Glass said.
Jefferies analyst Andy Barish wrote that he believes Chipotle's same-store sales growth and profit margin drivers are already reflected in the stock.
One of Chipotle's margin drivers is its "Chipotlanes" — drive-thru lanes for digital order pick-up. The company announced Tuesday that it would be installing Chipotlanes in more than half of its stores under construction. Pick-up orders have higher margins, but the longer construction times mean that some store openings could be delayed into 2020.
Investors focused on the reduction in 2019 store openings, as well as higher-than-expected labor costs, according to Cowen analyst Andrew Charles.
"While we do not view these as long-term concerns, the tepid stock reaction to [Chipotle's] strong 3Q results could be indicative that valuation has peaked," Charles wrote in a note to clients.
The company's stock has been on a tear for the last year and a half after Brian Niccol became Chipotle's new chief executive. In July, after its stock surpassed a high set before its food safety issues, some said Chipotle's woes were firmly in the past.
"We believe the company's cultural reset and heightened level of accountability are critical drivers of ongoing and future performance," Piper Jaffray analyst Nicole Regan Miller wrote Wednesday.
Under Niccol's leadership, Chipotle has been growing digital sales and changing up its menu.
For example, Chipotle's limited-time launch of carne asada, which is 50 cents pricier than its most expensive protein, boosted sales during the third quarter. The chain's supply is expected to run out in late November or early December, executives said.
Bernstein analyst Sara Senatore said that Chipotle's marketing for carne asada drove overall brand awareness. Menu items that are in the pipeline could eventually do the same.
"With further menu innovations — salad, beverages, quesadillas, improved queso — still to come, we see a long runway for comps," she wrote, referring to the potential for further same-store sales growth.
VIDEO8:2508:25Chipotle CEO on how the company is catering to the digital consumerThe Exchange
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4e1431bb4431fca56639ccc1759dbb62 | https://www.cnbc.com/2019/10/23/boeing-ceo-hopeful-planes-will-be-part-of-china-trade-deal.html | Boeing is 'hopeful' planes will be part of China trade deal as lack of orders forces production cut | Boeing is 'hopeful' planes will be part of China trade deal as lack of orders forces production cut
Dennis Muilenburg speaks during their annual shareholders meeting at the Field Museum on April 29, 2019 in Chicago, Illinois.Jim Young-Pool | Getty Images
Boeing is closely monitoring the volatile U.S. trade war with China, as heightened tariffs pushed the company to cut production of its 787 Dreamliner aircraft until either an exception or a resolution is found.
The company said in its third-quarter results that, beginning around the end of next year, Boeing will cut monthly production of 787 aircraft to 12 per month, citing "the current global trade environment." The reduced production will last at least through 2022.
During Boeing's call with shareholders, CEO Dennis Muilenburg gave more context as to his company's involvement in the White House's negotiations – as well as what Boeing is pushing to get from even a partial trade deal.
VIDEO2:0702:07Boeing could recover if it stays on production schedule: The NY Times' GelleThe Exchange
"We also continue to monitor and inform the U.S.-China trade discussions," Muilenburg said, adding that "we remain hopeful that airplanes will ultimately be part of the trade solution."
President Donald Trump's trade war has taken a toll on many U.S. companies that export to China, spanning industries from software to cars to agriculture and more. Muilenburg noted that the U.S. "aerospace industry is the largest exporter" to China, contributing about $80 billion in trade surplus per year. While he expects Chinese demand for aircraft will continue to climb, Boeing does not see that demand coming in right now.
"In the near term, as we have shared, the U.S.-China trade situation has presented challenges for our wide-body production plans," Muilenburg said. "The lack of orders from China in the past couple of years has put pressure on the production rate."
Boeing forecast last month that China will need 8,090 new airplanes over the next 20 years, worth nearly $1.3 trillion in all. "China clearly needs lift capacity," Muilenburg said, but the trade war means "we don't have any firm orders from China at this point."
Despite the lack of access to China's aerospace market, Boeing has optimistic "prospects for the long-term wide-body market," Muilenburg said. Globally, Boeing expects demand for about 1,000 "small to medium-sized" wide-body airplanes over the next 10 years. But, until American and Chinese leaders put ink to paper on a deal, or at least an exception, Boeing will not be able to serve China's growing market.
WATCH: Sonnenfeld on how Boeing's board handled text message fallout
VIDEO6:4106:41Yale's Sonnenfeld on how Boeing's board handled the text message falloutSquawk Box
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61d07020505b082f29e218dca9b6f035 | https://www.cnbc.com/2019/10/23/boeing-shares-could-still-plummet-despite-bounce-traders-warn.html | Boeing is 'a wolf in sheep's clothing,' trader warns | Boeing is 'a wolf in sheep's clothing,' trader warns
VIDEO2:1402:14Why these investing experts say stay cautious with Boeing sharesTrading Nation
Boeing's bounce may not help the stock.
Boeing caught a break Tuesday, climbing over 2% after plummeting 10% in the previous two sessions. Its stock continued to rise in Wednesday's premarket despite a disappointing earnings report.
Matt Maley, equity strategist at Miller Tabak, says the relief rally won't last as the airplane maker contends with the fallout of the 737 Max grounding.
"It's not a surprise to me that it is bouncing today," Maley said on CNBC's "Trading Nation" on Tuesday. "You look at its RSI [relative strength index] chart. It was getting quite oversold on a very short-term basis, and at the same time, it was testing the bottom end of a symmetrical triangle pattern."
The chart fell below 30 earlier this month. The momentum measure points to oversold conditions when it falls below the 30 threshold. Maley guesses short-term traders used the opportunity to pull some money from short positions, but while these uncertainties persist, he thinks Boeing shares could still be heading south.
"It wouldn't surprise me at all that once it works off that oversold conditions it rolls back over, and if it breaks below that pattern, it could be a quick move down to the $300 level, which was the December lows," he said. "Unless we get some other catalyst between now and then, I'd want to hold off on buying in any significant way."
Boeing also announced Tuesday that the head of the company's commercial airplane unit, Kevin McAllister, will be leaving the company amid the 737 max crisis. He is the most senior executive to depart following two fatal crashes of the plane.
Quint Tatro, president of Joule Financial, agrees with Maley and says investors need to tread lightly around the stock. On a fundamental basis, he says, it looks like the stock is offering value but it could be more a value trap.
"It's a wolf in sheep's clothing. You've got the 737 issues that are still looming, but you also have to remember, this is a huge China trade risk. Everything is 'Kumbaya' right now, but as we know that could change with a tweet or just a headline," said Tatro.
Tatro says the stock is a "no-touch" until those two issues get resolved, but he offers some guidance to Boeing investors.
"If investors are holding it long term, they like the dividend, I think they can use some puts to at least give themselves some insurance here," he said.
Disclaimer
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41e58109f9963accb6d0977466575b1b | https://www.cnbc.com/2019/10/23/csx-ceo-our-new-business-model-brought-efficiency-to-the-rail-company.html | VIDEO2:2402:24CSX CEO explains how a new business model brought efficiency to the rail companyMad Money with Jim Cramer
CSX Corp. has labored over more than two years to transform its operations and the changes are starting to show in its results, CEO Jim Foote told CNBC on Wednesday.
The railroad company installed a precision scheduled railroading strategy in its supply chains to create more efficiency, he said in a sitdown with "Mad Money" host Jim Cramer.
The updated system eliminated unnecessary logistics, such as switching boxcars at inopportune times, he added.
"The end result of that is that we provide a much, much more reliable product, but we're also able to pivot much better, too," Foote explained. "The railroad business is the railroad business, [and it] changes all the time. ... We're able to move in any direction we need to in any given time much better."
The transition to the new business model, which was initiated by the late former CEO Hunter Harrison in early 2017, intended to run a leaner operation with longer trains on tighter schedules. The changes were put in motion after Mantle Ridge, the activist hedge fund led by Paul Hilal, started a position in the company that year.
Foote carried on Harrison's work when he took over as CEO in December 2017. He told Cramer the scheduled railroading transformation was modeled after Canadian National Railway's operations.
CSX topped profit expectations in its third quarter ended September. Cost cuts helped the hauler offset lower coal and intermodal shipment volumes.
Quarterly revenue came in at $2.98 billion, down nearly 5% from the year prior, but expenses also fell 8%, Foote noted.
The roughly 10% drop in CSX's intermodal unit, where the company moves cargo using multiple modes of transportation, during the quarter can be attributed to the U.S.-China trade war's impact on rail freight volumes.
Foote suggested to Cramer, however, that efficient operations and better service can help mitigate those challenges.
"By running the railroad the way we run the railroad today, not only do we create great efficiency, but we create a much more reliable product that the customers want to use," he said. "They pay the premium to buy the reliability."
Earlier this week, Mantle Ridge sold off much of its $1 billion stake in CSX. Shares of CSX are up more than 100% since January 2017, the same month the firm started a position in the rail company.
The stock has gained more than 16% year to date, compared with the S&P 500's more than 21%, according to FactSet.
VIDEO9:4009:40CSX CEO explains how a new business model brought efficiency to the rail companyMad 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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26bbe69796437cc45ba50ff47a883662 | https://www.cnbc.com/2019/10/23/democrats-set-december-impeachment-target-but-obstacles-abound.html | Democrats set December impeachment target, but obstacles abound | Democrats set December impeachment target, but obstacles abound
President Donald Trump announces opioid response grants to state governments in the Roosevelt Room of the White House, September 4, 2019.Erin Scott | Reuters
Democratic lawmakers hope to complete their impeachment inquiry into President Donald Trump by year's end and are coalescing around two articles of impeachment - abuse of power and obstruction, lawmakers and aides told Reuters.
But some Democrats fear that a costly distraction may be the looming battle between the Republican Trump and Congress over funding the government when money runs out for many federal operations on Nov. 21, Democratic aides said.
Some Democratic lawmakers said they believed they already had gathered enough evidence from the testimony of current and former U.S. officials to impeach Trump for asking Ukraine to investigate a political rival, Joe Biden, a leading contender for the Democratic presidential nomination in 2020.
Other Democrats were more cautious and said more information was needed to solidify the case for impeachment and make it an easier sell to a deeply polarized American public. Only two U.S. presidents have been formally impeached by the House of Representatives, and both were later acquitted by the Senate.
Val Demings, a Democratic lawmaker who sits on the House Intelligence and Judiciary committees, said congressional investigators should be able to wrap up their inquiry by December.
"We need to be thorough, we need to be methodical, but we need to be timely," she told Reuters.
Three Democratic congressional sources said there had been talk among some Democrats about trying to wrap up hearings and hold an impeachment vote by the Nov. 28 Thanksgiving holiday, but this appeared highly unlikely as of Wednesday.
Congressional investigators still have many witnesses to interview, they said.
"I don't think we should short-circuit this because of an artificial deadline," said Representative Raja Krishnamoorthi, a Democrat on the Intelligence and Oversight committees. "That being said, we are working pretty quickly. It's only the fourth week and look at all we have learned so far."
Democrats, who control the House, are concerned not only with building the best possible case for the Republican-controlled Senate, which will hear the charges, but also for the American public, who face the possibility of an American president standing trial while running for re-election.
"There is time when enough will be enough, but I think the more we build the case, the more likely we will get bipartisan support," said Representative Jackie Speier, a Democrat on the House Intelligence and Oversight committees. "Once it becomes overwhelming, how can you ignore it?"
The picture that has emerged from the testimony of U.S. officials, texts between U.S. diplomats, and other official documents is of a president who sought to pressure Ukraine's president, Volodymyr Zelenskiy, to investigate Biden and his businessman son, Hunter Biden, who was a non-executive board member of a Ukrainian gas company.
The impeachment inquiry was sparked by a whistleblower complaint from an intelligence official who expressed concern about a July 25 phone call between Trump and Zelenskiy in which the U.S. president pushed his counterpart for an investigation. The White House later released a rough transcript of that call.
Text messages and testimony from current and former State Department officials and comments from the president's chief of staff show that a meeting between Trump and Zelenskiy, along with military aid for Ukraine, were contingent on the Ukrainian president launching the investigation.
Trump has denied any wrongdoing, and in a stream of daily tweets and public statements has accused Democrats of seeking to unconstitutionally oust him from office as he seeks to run for a second term in the November 2020 election.
"My view is that we have more than sufficient evidence to move forward on impeachment," said Representative David Cicilline, a Democrat on both the Foreign Affairs and Judiciary committees, but added: "Every day we learn new evidence and hear from new witnesses."
A key constituency that Democrats need to win over are independent voters who appear to have limited patience for a protracted investigation.
While 45% of independents think Trump should be impeached, many of them do not appear to want another lengthy investigation that sucks up all of the energy out of Washington. According to an Oct. 18-22 Reuters/Ipsos poll, 54% of independents agreed that "Congress should focus on fixing important problems facing Americans, rather than focusing on investigating President Trump."
Representative Eric Swalwell, a Democrat on the House Intelligence and Judiciary committees, said the impeachment inquiry was "laser focused" on Ukraine and was not looking at any other accusations against the president.
Some lawmakers interviewed said the evidence gathered so far supported charging Trump with abuse of power and also obstruction for seeking, mostly unsuccessfully, to block key officials from testifying and withholding documents.
"I think consensus is developing that the president abused the power of his office, has obstructed Congress," Cicilline said.
As House Democrats debate if and when to impeach Trump, it is taking place against the backdrop of a possible showdown with the president in the coming weeks over funding the government.
Trump signed a stopgap measure in September to keep the government open through to Nov. 21. The president has been at loggerheads with Congress over a dozen bills to fund most government activities, a standoff fueled in part by Trump's demand for $12 billion in fiscal 2020 to fulfill a key election promise - building a wall along the U.S.-Mexico border.
The government was partially shut down for a record 35 days stretching from December 2018 through January in a dispute with Democrats over border wall funding.
"The concern is that if we vote on impeachment before December, Trump will refuse to sign the funding bills and shut down the government," a Democratic congressional aide said.
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4fb5d5caee127754603160e055391854 | https://www.cnbc.com/2019/10/23/dow-to-drop-on-earnings-zuckerberg-to-testify-softbanks-wework-deal.html | What to watch today: Dow to drop on earnings, Zuckerberg to testify and SoftBank's WeWork deal | What to watch today: Dow to drop on earnings, Zuckerberg to testify and SoftBank's WeWork deal
Dow futures turned lower after Dow stock Caterpillar (CAT) sank on disappointing earnings. The Dow, S&P 500 and Nasdaq have now alternated between gains and losses for eight straight days, although all are higher than where they were before that streak began. The S&P 500 is still just 1% away from its July record close despite sliding Tuesday, while the Dow is 2% below its own record close. No government economic reports are on today's calendar. (CNBC)* Caterpillar shares tank after company cuts forecast again, earnings badly miss estimates (CNBC)
Earnings from Dow component Boeing also highlight the morning, with Alexion Pharmaceuticals (ALXN), Anthem (ANTM), Blackstone Group (BX), Boston Scientific (BSX), Eli Lilly (LLY), Freeport McMoRan (FCX), General Dynamics (GD), Hilton Worldwide (HLT), Nasdaq (NDAQ), Northern Trust (NTRS), Norfolk Southern (NSC), Owens Corning (OC) and Waste Management (WM) also out.
Dow stock Microsoft (MSFT) as well as Ford (F), and Tesla (TSLA) headline today's after-the-bell earnings reports, with Align Technology (ALGN), eBay (EBAY), Edwards Lifesciences (EW), Equifax (EFX), Las Vegas Sands (LVS), O'Reilly Automotive (ORLY), PayPal (PYPL) and Spirit Airlines (SAVE) also set to report.
SoftBank has struck a deal to take control of WeWork. The company said the Japanese conglomerate will provide $5 billion in new financing and up to $3 billion in a tender offer for existing shareholders. SoftBank will also speed up an existing $1.5 billion financing commitment. (CNBC)
Facebook (FB) CEO Mark Zuckerberg testifies in front of a House committee today about the company's cryptocurrency plans. Zuckerberg is bound to face questions that span well beyond Facebook's involvement in libra. Lawmakers are ready to seize the rare opportunity to speak with the executive on the record and under oath. (CNBC)* Zuckerberg to tell Congress embattled libra will 'extend America's financial leadership' (CNBC)* 47 attorneys general are investigating Facebook for antitrust violations (CNBC)
Two associates of Rudy Giuliani are to be arraigned today on charges they used straw donors to make illegal campaign contributions to advance their business interests. Lev Parnas and Igor Fruman are expected to plead not guilty in a case that's cast a harsh light on the business dealings of President Donald Trump's personal lawyer. (AP)
Top Ukraine diplomat Bill Taylor testified that he was told a military aid package to Ukraine had been withheld by President Donald Trump pending an agreement by that country to launch investigations into Trump's political rivals. Trump has repeatedly denied that there was any quid pro quo. (CNBC)* New poll: Support for impeaching Trump soars among independents (Reuters)
A "shocking, first-hand" tell-all book about Trump written by the same "Anonymous" Trump senior administration official who penned last year's scathing, unsigned New York Times op-ed column about the president will be published next month. Trump, in a tweet, last year called the op-ed and its writer treasonous. (CNBC)
The House Ways and Means Committee late Tuesday approved Speaker Nancy Pelosi's drug pricing bill, sending the legislation to the full House floor for a vote expected before the end of this month. The legislation, which passed three committees along partisan lines, has a high chance of approval in the Democratically controlled House. (CNBC)
Nike's (NKE) longtime CEO Mark Parker is stepping down, effective January of next year. In a sign of the company's focus on digital, he will be replaced by John Donahoe, a Nike board member and the CEO of ServiceNow. Donahoe was formerly the CEO of eBay (EBAY) and is chairman of the board at PayPal (PYPL). (CNBC)* ServiceNow stock drops as CEO leaves for Nike, replaced by former SAP leader McDermott (CNBC)* Facebook advertising VP Rob Goldman announces his departure (CNBC)* Boeing replaces head of commercial airplane unit amid 737 Max crisis (CNBC)
The Chinese government is reportedly developing a plan to replace Hong Kong chief executive Carrie Lam with a possible successor who could be installed by March. If Xi Jinping, China's president, moves forward on replacing Lam, her successor would reportedly remain in place until the end of her term in 2022. (CNBC)* Hong Kong government withdraws bill that sparked protests (AP)* Hong Kong protesters crash NBA opening night party (Reuters)
California's largest utility will likely decide today whether to black out some half-million customers as dangerous fire weather returns to California. PG&E (PCG) could begin precautionary power shutoffs as early as this afternoon to about 189,000 homes and businesses in portions of 16 counties, mostly in the Sierra foothills and north of the San Francisco Bay Area. (AP)
Texas Instruments (TXN) forecast current-quarter revenue well below estimates, the latest sign that the global microchip industry is being squeezed by a downturn in demand as well as a prolonged U.S.-China trade dispute.
Chipotle Mexican Grill (CMG) reported quarterly earnings that topped analysts' expectations and announced plans to accelerate its introduction of drive-thru lanes, which could slow down its store openings.
Six Flags (SIX) came in below forecasts with quarterly earnings, and the amusement park operator's revenue fell short as well despite a 3% increase in park attendance.
Snap, which is the maker of Snapchat, posted a slimmer-than-expected loss for the third quarter while exceeding expectations for user growth and revenue.
Whirlpool (WHR) earned better-than-expected adjusted earnings per share, but the appliance maker's revenue fell short amid lower sales in Latin America.
Amazon (AMZN) announced the expansion of its "Counter" program, which gives customers the option of picking up packages in-store at staffed locations.
Netflix (NFLX) raised $2.2 billion in a sale of junk-rated bonds. The video streaming service plans to use some of that revenue to invest in new content amid intensifying competition.
Alphabet's (GOOGL) Google unit will reportedly be at the center of a meeting of state attorneys general in Colorado next month, according to Reuters. The meeting is said to center around an antitrust probe.
Google said today it has achieved a breakthrough in quantum computing research, saying an experimental quantum processor has completed a calculation in just a few minutes that would take a traditional supercomputer thousands of years. (AP)
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98fca03d70a871817ccbbf29b15cd4fa | https://www.cnbc.com/2019/10/23/facebook-shares-rise-as-zuckerberg-testifies.html | Wall Street seems to like Mark Zuckerberg's testimony, as Facebook shares rise | Wall Street seems to like Mark Zuckerberg's testimony, as Facebook shares rise
Facebook Chairman and CEO Mark Zuckerberg testifies at a House Financial Services Committee hearing examining the company's plan to launch a digital currency on Capitol Hill in Washington, U.S., October 23, 2019.Erin Scott | Reuters
Facebook CEO Mark Zuckerberg is testifying Wednesday on the company's controversial cryptocurrency plans and so far Wall Street seems to like what he has to say.
Shares of Facebook climbed 2.1% on Wednesday. The stock started to climb around 10:45 a.m. EST, as Zuckerberg began to deliver his prepared remarks to the House Financial Services Committee.
Carl tweet
In his opening statement, Zuckerberg discussed how libra, Facebook's cryptocurrency project, will help "extend America's financial leadership" and encourage democratic values around the world. He also emphasized that Facebook won't take steps to develop libra without necessary approval from US regulators.
Once again, Zuckerberg attempted to distance Facebook from the Libra Association, which is the group that oversees libra, by saying that the group will determine the future of the cryptocurrency -- even though the idea was originally developed internally at Facebook by Facebook employees. The Libra Association recently saw several key members depart, including Visa, Mastercard, PayPal and eBay, among others.
"I would hope that the Association will weigh our recommendation and what we say publicly that we think should happen, but if at the end of the day, we don't receive the clearances that we feel like we need to move forward, and the Association chooses to move forward without us, then we will be in a position where we will not be a part of the Association," he testified.
He also faced tough lines of questioning from congressional officials, many of whom pointed out the cryptocurrency's national security risks and questioned Zuckerberg's argument that libra will help serve people in developing countries who don't have access to banking services.
"For the richest man in the world to come here and hide behind the poorest people in the world, and say that's who you're really trying to help," said Rep. Brad Sherman, D-Calif. "You're trying to help those for whom the dollar is not a good currency – drug dealers and tax evaders."
VIDEO5:3605:36Zuckerberg: No guarantee internet cos. will hold American values going forwardSquawk on the Street
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48a83acb699c0f13a8da9031979e61ac | https://www.cnbc.com/2019/10/23/fda-calls-on-breast-implant-makers-to-post-cancer-warnings-on-labeling.html | FDA calls on breast implant manufacturers to post cancer warnings | FDA calls on breast implant manufacturers to post cancer warnings
Getty Images
The FDA on Wednesday proposed that breast implant manufacturers post warnings of the risks, including cancer and other complications.
"We have heard from many women that they are not fully informed of the risks when considering breast implants. They've stated that they need more information to facilitate meaningful conversations with their doctors and to make appropriate decisions for themselves," the FDA said.
In 2017, the agency linked implants, both silicone and saline, to rare forms of cancer that killed at least nine people in the U.S. Earlier this year, officials found a connection between implants and 457 women diagnosed with breast implant-associated anaplastic large cell lymphoma in the United States. BIA-ALCL is a rare form of cancer of the immune system.
The evidence has resulted in Allergan recalling textured implants over the increased risk of cancer.
"The draft guidance offers numerous recommendations to help ensure women have access to this information," the FDA said, "including that manufacturers incorporate a boxed warning and patient decision checklist in the device's labeling, update recommendations for patient screening for device rupture and more."
The FDA's action isn't final. It posted the draft guidance for public discussion before adopting a final policy, which may change. The recommendation comes from an FDA public advisory panel held earlier this year.
Correction: This story was updated to correct that the FDA's action was proposed guidance for breast implant manufacturers.
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e166ca131d1a0286dc196874e48a49b3 | https://www.cnbc.com/2019/10/23/forex-market-brexit-developments-in-focus.html | Dollar, pound steady as EU considers granting Brexit delay | Dollar, pound steady as EU considers granting Brexit delay
A £10 note is seen alongside euro notes and US dollar bills.Matt Cardy | Getty Images
The dollar and British pound were steady on Wednesday as European Union leaders consider Britain's request for a Brexit delay, and are expected to grant a three-month extension to the Oct. 31 deadline for its departure.
European Council President Donald Tusk said on Twitter he had recommended late on Tuesday that EU leaders back a delay. British Prime Minister Boris Johnson was forced by parliament to ask for three months, but there is still a chance that some EU countries, notably France, could demand a shorter extension.
Johnson paused his bill to enact the Brexit deal he struck last week with the European Union's 27 other member states, after dramatic votes on Tuesday in which the British parliament accepted the deal in principle but rejected a three-day timetable for passing the necessary legislation.
Foreign exchange trading was generally quiet following a sell-off Tuesday that saw the pound drop against both the dollar and the euro. Against the dollar, the pound was last down 0.02% to $1.287. Against the euro, the pound was 0.8% stronger to 86.34 pence.
The dollar index was up 0.08% at 97.606.
"With Brexit on ice for now, attention has shifted to the EU to see if indeed it grants the UK more time likely three months or less. While weaker, the bottom hasn't fallen out of the pound given that a no-deal Brexit has seemingly been taken off the table. Expecting the unexpected with respect to Brexit and sterling remains a central theme," said Joe Manimbo, senior market analyst at Western Union Business Solutions.
Johnson did not follow through on his threat to pull the deal if parliament defeated him on the timetable, which was understood by the market as all but eliminating the chances of no-deal exit.
"Things could change very quickly today, depending on the EU response," said Adam Cole, a strategist at RBC Capital Markets, adding, however, that he did not see much downside risk now that a no-deal Brexit appeared to be ruled out.
Safe haven currencies earlier Wednesday had been boosted by the Brexit uncertainty. But after the EU was seen as likely to approve an extension, gains in the Japanese yen and Swiss franc faded. The yen was last marginally lower at 108.55 per dollar, with the franc at 0.991 per dollar.
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5c52d4575030d6f08e2198f25964bd99 | https://www.cnbc.com/2019/10/23/google-quantum-computing-supremacy-claim-disputed-by-ibm.html | IBM and Google disagree on quantum computing achievement | IBM and Google disagree on quantum computing achievement
Google CEO Sundar Pichai stands with a quantum computer a Google laboratory in Santa Barbara, CaliforniaGoogle
Alphabet subsidiary Google on Wednesday touted a breakthrough in computing research that's documented in the latest issue of the journal Nature. The paper was actually released online by accident last month by the U.S. National Aeronautics and Space Administration, which contributed on the research alongside Google, and was quickly removed. Now the full paper is live.
There's just one problem: IBM thinks Google has overstated its achievement.
The controversy is the latest example of major technology companies trying to one-up each other in quantum computing, a futuristic realm with no clear winner yet. Microsoft and Intel have also been working actively in the area.
Quantum computing is utterly unlike today's computing. Our existing PCs and mobile devices express information that ultimately gets boiled down to ones and zeros. Quantum computers work in quantum bits, or qubits, which is more nuanced — information can be a one and a zero at the same time.
This technology has promise. It could come in handy to solve problems that modern computers aren't so good at. It could improve the computing of artificial intelligence models, and it could help with materials science and chemistry work. It could even be used to break encryption one day, and Google is aware of that possibility.
Google's Nature paper talks about an experiment that researchers conducted with a custom 54-qubit processor called Sycamore. The goal for Google was attaining quantum supremacy — essentially doing something with a quantum computer that would take an impractically long time with normal computers. Google has been focused on the challenge of quantum supremacy — a concept that dates to 2012 — for some time.
"Our Sycamore processor takes about 200 seconds to sample one instance of a quantum circuit a million times — our benchmarks currently indicate that the equivalent task for a state-of-the-art classical supercomputer would take approximately 10,000 years," the researchers wrote in the paper.
"This dramatic increase in speed compared to all known classical algorithms is an experimental realization of quantum supremacy for this specific computational task, heralding a much-anticipated computing paradigm."
Google tapped its own computing infrastructure as well as Summit, currently the world's most powerful supercomputer, to simulate the quantum work and then extrapolate.
IBM took issue with the 10,000-year calculation.
"We argue that an ideal simulation of the same task can be performed on a classical system in 2.5 days and with far greater fidelity," IBM's Edwin Pednault, John Gunnels and Jay Gambetta wrote in a blog post. They said quantum supremacy in the strictest terms had not in fact been accomplished.
Leaving aside IBM's skepticism about how long it would take a classical computer to do what Google's chip did, the question now becomes what Google, IBM and other companies will eventually be able to do with their quantum systems.
"We are only one creative algorithm away from valuable near-term applications," the researchers wrote in the Nature paper.
Google CEO Sundar Pichai was asked about this in an interview with MIT Technology Review. The answer suggests that the company at least has some clues about the possibilities.
"The real excitement about quantum is that the universe fundamentally works in a quantum way, so you will be able to understand nature better. It's early days, but where quantum mechanics shines is the ability to simulate molecules, molecular processes, and I think that is where it will be the strongest. Drug discovery is a great example. Or fertilizers — the Haber process produces 2% of carbon [emissions] in the world. In nature the same process gets done more efficiently."
Evolving the Haber process, he said, could be a decade away.
The IBMers also recognized that much more work lies ahead.
"For quantum to positively impact society, the task ahead is to continue to build and make widely accessible ever more powerful programmable quantum computing systems that can implement, reproducibly and reliably, a broad array of quantum demonstrations, algorithms and programs. This is the only path forward for practical solutions to be realized in quantum computers," they wrote.
WATCH: Discussing the advantages of quantum computers
VIDEO2:1402:14Discussing the advantages of quantum computersSquawk Box Asia
Follow @CNBCtech on Twitter for the latest tech industry news.
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1e831794470dce3ae6c04167121e7683 | https://www.cnbc.com/2019/10/23/hong-kong-government-pledges-more-aid-no-end-in-sight-to-unrest.html | Hong Kong government pledges more aid to battered city, no end in sight to unrest | Hong Kong government pledges more aid to battered city, no end in sight to unrest
Protesters set a shop of Chinese mobile brand Xiaomi on fire during a demonstration.Ivan Abreu | SOPA Images | LightRocket | Getty Images
Hong Kong's embattled government announced extra financial support on Tuesday for the Chinese-ruled city battered by political unrest and facing its first recession in a decade.
Massive and violent anti-government protests over the past five months have shaken Hong Kong's reputation as an Asian financial center and damaged its all important tourism and retail sectors, with many businesses forced to close.
Financial Secretary Paul Chan announced relief measures of HK$2 billion ($255 million) to support the city's economy, particularly in its transport, tourism and retail industries.
"Since the economic situation is worsening quite fast, we rolled out this package to target certain sectors which are hard hit," Chan told a news conference.
The move follows a HK$19.1 billion ($2.4 billion) package in August to support the underprivileged and businesses, and Chan said more assistance would be given if needed. The support measures would ultimately increase the "probability of a fiscal deficit", but the government's finances were strong, he said.
A government colleague said the best medicine for the economy would be fewer, less violent protests.
"If society could come to harmony, with less demonstrations, and perhaps the stoppage of violence, that would help even more than what we can offer," Secretary for Transport and Housing Frank Chan told the news conference.
As yet, there seems no end in sight to the pro-democracy protests, or the violent ways of hardcore activists who have fought with police, throwing petrol bombs and bricks.
VIDEO2:4002:40Hong Kong protesters clash with police as demonstrations escalateSquawk Box
After a few weeks of relative calm, a massive march on Sunday by tens of thousands of protesters, ranging from young students to the elderly, descended in chaos with riot police and black-clad protesters staging running clashes into the night.
On Monday night riot police again fired tear gas to disperse smaller groups of protesters and were jeered by angry residents who believe police are using excessive force.
The unrest was sparked by concerns Beijing was tightening its grip on Hong Kong and has developed into worst political crisis since Britain handed the city back to China in 1997.
It also poses the biggest popular challenge to China's President Xi Jinping since he came to power. Xi has warned he would crush any attempt to split China.
China has rejected charges it is eroding Hong Kong's freedoms under a "one country, two systems" rule which allows the city 's residents more freedoms than on the mainland.
Beijing says nations, like Britain and the United States, are inciting the unrest.
During the clashes the past few months, police have fired more than 3,000 rounds of tear gas and hundreds of rubber bullets against protesters throwing petrol bombs and bricks. Police said protesters detonated a small home made bomb, but no one was hurt.
Two people have been shot and wounded by police and thousands injured since the protests escalated in June. More than 2,600 people have been arrested, one as young as 12.
The Hong Kong government will have a chance on Wednesday to formally withdraw a China extradition bill, one of the protesters five demands, when it receives a second reading in the Legislative Council.
Chief Executive Carrie Lam had reluctantly agreed to pull the bill two-and-a-half months after protests erupted in June, but it has still to be formally withdrawn.
An earlier opportunity was lost last Wednesday when heckling pro-democracy lawmakers forced the suspension of the parliament.
VIDEO3:5303:53Carrie Lam: We must stop violence in Hong Kong as soon as possibleCapital Connection
If the bill was passed into law, residents could extradited to Communist Party-controlled courts in mainland China, and it was seen as the latest attempt by Beijing to tighten its grip on Hong Kong, which enjoys an independent judiciary.
Even if the government does withdraw it, the move is not expected to end the unrest which has widened into a pro-democracy movement fueled by grievances such as social inequality and claims of police brutality.
Protesters are now also demanding universal suffrage, an independent inquiry into police actions, an amnesty for those arrested in protests, and an end to labeling protesters as rioters. Rioting carries a maximum 10-year jail term.
Lam has rejected those four demands, steadfastly defending police actions and calling for protesters to stop the violence.
She has further infuriated protesters by invoking a colonial-era emergency law banning face masks at pubic rallies. Protesters and residents have been defying the ban, despite the risk of a maximum one-year jail term.
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46a475e582fe1322bbb843af4bac3aa5 | https://www.cnbc.com/2019/10/23/huawei-mate-x-china-launch-release-date-specs.html?__source=fincont&par=fincont | Huawei's foldable phone is finally going on sale in China while global launch remains 'under review' | Huawei's foldable phone is finally going on sale in China while global launch remains 'under review'
Huawei's Mate XBenjamin Hall | CNBC
Huawei's foldable smartphone will finally go for sale in China next month following months of delays, while the device's global launch remains "under review."
At a launch event in Shenzhen Wednesday, the Chinese tech giant said the Mate X would be available in China November 15 at a starting price of 16,999 yuan ($2,403).
The foldable 5G-enabled device, which was unveiled in February in Barcelona, had originally been slated to launch this summer. CNBC reported Huawei delayed the launch in June as it conducted extra tests after glitches were reported on Samsung's foldable device.
In a statement to CNBC Wednesday, a Huawei spokesperson said the company is still determining when the Mate X will be available outside of China.
"Our strategy is based on carriers' 5G roll out in different regions. So far, Huawei is making the Huawei Mate X available in the China market from November 15th. A global launch plan is under review," the spokesperson said.
Samsung and Huawei, the world's two biggest smartphone sellers, are trying to motivate consumers to upgrade their phones with a new category of foldable devices, but their price tags could prove to be a sticking point. Samsung's Galaxy Fold, which went on sale in September after months of delays, costs around $2000.
Huawei also said Wednesday it had shipped 200 million smartphones so far this year, a milestone it said it reached two months earlier than last year. Last week, the company reported its third-quarter revenue jumped 27% thanks to strong smartphone sales.
VIDEO3:3103:31Foldable phones have arrivedCNBC Reports
The final quarter of the year will prove to be a big test for the Chinese tech giant when it comes to sales of its new Mate 30 smartphone. The Mate 30 series comes without pre-installed Google-licensed apps like Gmail and YouTube. Huawei has been unable to license the latest version of Android due to restrictions imposed by the U.S. on the Chinese firm.
U.S. officials, citing security concerns, placed Huawei on a so-called entity list in May that required American companies to get special licenses to sell their technology to the Chinese firm. Huawei denies that it is a security threat.
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e57d1e9749b3474dfdcbb3d7a9eeb32b | https://www.cnbc.com/2019/10/23/jim-cramer-mad-money-recap-stock-picks-oct-22-2019.html | VIDEO1:1201:12Cramer Remix: Why Viacom has not worked with CBSMad Money with Jim Cramer
CNBC's Jim Cramer explains why it's worth picking individual stocks in a world of investors that place more value in index funds.
The "Mad Money" host chats with Hasbro CEO Brian Goldner coming off the company's challenging third-quarter earnings report and Logitech CEO Bracken Darrell to get a read on the video conferencing arena.
He also gets insight into the funding gap for businesses founded by women and breaks down why he thinks Beyond Meat's shares have more downside in the future.
Traders work on the floor at the New York Stock Exchange.Brendan McDermid | Reuters
CNBC's on Tuesday doubled down on his doctrine that investors should go beyond just owning index funds and also buy individual stocks.
The "Mad Money" host, who preaches that viewers devote at least their first $10,000 to low-cost index or exchange-traded funds said, "If you want to hit it big, well, it's also good to try to pick some individual stocks alongside of those index funds" that can deliver big gains to shareholders.
"I bring this up because lightning's never going to strike that index fund of yours [the way] it struck Biogen," Cramer said.
Biogen shares popped more than 26% during the trading day after news broke that the drugmaker would that it canceled earlier this year. Cramer noted that several pharmaceutical companies have sought to develop a breakthrough medicine for the disease which affects 5 million people in the U.S.
Brian Goldner CEO of HasbroAdam Jeffery | CNBC
Hasbro CEO Brian Goldner told CNBC that sales are off to a strong start in the fourth quarter.
The toymaker's third quarter proved to be tough, missing top- and bottom-line estimates in its quarterly report that sent shares down nearly 17% on the session. The chief expressed optimism and said shipments picked up "appreciably" in September following two straight months of decline.
"We have a number of new products coming into the holidays," he said in an interview with Cramer. "We said we believe we can grow in the fourth quarter and, as we go forward, we will get through this issue related to the tariffs."
A package of Beyond Meat beef crumbles is displayed for a photograph in Tiskilwa, Illinois, April 23, 2019.Daniel Acker | Bloomberg | Getty Images
Shares of Beyond Meat are down nearly 55% since its $234.90 record close in late July. The stock fell more than 3% in Tuesday's session and Cramer thinks the bleeding isn't over. The faux-meat company's valuation is too high for its fundamentals, especially with a lock-up period expiring soon, he argued.
"I think Beyond Meat can go lower from here. Did you know that next week, 48 million shares get unlocked? Do you know that's 80% of the share count?" the host said. "Will this money-losing company still be worth $6.4 billion after the lockup expires? If the $3 stock that is GoPro – $3 — is any guide … the answer is no."
A lock-up period is a time frame where certain investors are barred from trading shares of an investment.
Bracken Darrell, CEO, Logitech InternationalScott Mlyn | CNBC
Logitech International, the maker of computer peripherals such as keyboards, mice and expensive high-end gaming equipment, saw video collaboration unit sales increase 60% in its latest recent quarter. CEO Bracken Darrell told Cramer that the company is banking on that trend to continue.
"This has gone from zero, 7 years ago, to it's 10% of our total company," he said in a one-on-one interview with Cramer. "So it's going to be a big business for us. We think, one day, this will be a billion-dollar business."
Lori Cashman, left, and Suzanne Norris, Victress CapitalScott Mlyn | CNBC
Cramer brought on Victress Capital partners Lori Cashman and Suzanne Norris to break down the funding gap that exists for women-led business in recognition of National Business Women's Week. The private company is an early-stage venture capital firm that focuses on consumer-oriented businesses that are helmed by women.
Women launch 40% of U.S. businesses, yet receive just 3% of venture capital funding, Cashman said.
"The truth is that female founders do have a hard time accessing capital because there's a massive funding gap," she explained. "When we encounter a founder who sees a huge market opportunity and she has a vision and a compelling business plan to execute around that business along with some early traction, we feel that that founder has a right to access that capital alongside anyone else."
"When we look at statistics," she added, "we see that gender-diverse teams outperform their all-male counterparts on both top-line and bottom-line metrics."
In Cramer's lightning round, the "Mad Money" host zips through his thoughts about callers' favorite stock picks of the day.
: "Why do we need a Chinese Netflix? What we do like is Disney with that tremendous tie-up" with Verizon.
TE Connectivity: "I think you stay a long-time holder. I think that's an absolute terrific, never-talked-about company."
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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3c8967de90eaf3f487ca40c0f8547e03 | https://www.cnbc.com/2019/10/23/market-outlook-for-thursday-amazon-earnings-ecb-decision-pence-speech.html | Three things to watch for in the markets on Thursday, including the earning season's busiest day | Three things to watch for in the markets on Thursday, including the earning season's busiest day
VIDEO8:1708:17Jonathan Golub of Credit Suisse weighs in on earnings seasonFast Money
Here are the most important things to know about Thursday before you hit the door.
45 S&P 500 companies report quarterly results on Thursday, making it the single busiest day of the earnings season.
So far 124 companies in the index have reported. Eighty-two percent of them have topped EPS estimates and 63% have topped revenue expectations, according to estimates from Refinitiv.
All eyes will be on Amazon as investors look for an update on AWS growth as Microsoft and Alphabet also ramp up their cloud operations.
Shares of the tech giant have shed 12% over the last three months as an increase in spending and looming tech regulation have pressured the company.
Analysts are expecting EPS of $4.59 and revenue of $68.8 billion, according to estimates from FactSet. That's about 20% higher than the $56.58 billion in revenue that the company reported for the same quarter a year earlier.
"We expect strong topline momentum led by 1-Day shipping initiatives, a healthy consumer spending backdrop and strong growth in AWS and advertising," Stifel analyst Scott Devitt wrote in a note to clients.
But the momentum doesn't come without a cost. He's anticipating the company will earn $3.35 per share for the quarter — well below consensus estimates — although his revenue prediction of $69.5 billion is ahead of the Street.
Visa, Intel, 3M, Gilead, Alaska Air, American Airlines, Northrop Grumman and Twitter are among the names also reporting earnings Thursday.
The European Central Bank will announce its monetary policy decision tomorrow. Following last month's interest rate cut and stimulus measures, economists aren't expecting any fireworks at the meeting.
"We do not expect the meeting and press conference to generate new insight on the monetary policy outlook. With last month's decision, the direction has been set and the recent data, while very weak, was not bad enough to trigger further dovish monetary policy tweaks," UBS economist Reinhard Cluse said in a note to clients dated October 14.
But the meeting is important in that it's the last for president Mario Draghi. After heading the Central Bank for 8 years, he will step down on October 31. Christine Lagarde, who previously led the IMF, will take over.
Separately, we'll get manufacturing data from the Eurozone, as well as U.S. durable goods and new home sales data.
Vice President Mike Pence is scheduled to speak at an event organized by the Wilson Center. According to the think tank, the speech is expected to center on the future of United States and China relations.
President Donald Trump said earlier this month that the U.S. had come to a "very substantial phase one deal" with China, and that phase two discussions would start "almost immediately."
But there seems to be some confusion about what "deal" actually means.
Following the negotiations Chinese state media said that "substantial progress" had been made, but they did not call it an outright deal. More recently, sources told CNBC's Kayla Tausche that more talks are "likely" for phase one of the deal.
On Wednesday Senator Marco Rubio told CNBC that he doesn't think a deal has been made.
"If you look at the statements that have come out, it's been very difficult to get the Chinese to admit that they agreed to what has been reported they agreed to," he said on CNBC's "Squawk Box."
- CNBC's Michael Bloom contributed reporting.
Major events (all times ET):
4 a.m. Eurozone manufacturing PMI
4 a.m. Eurozone services PMI
7:45 a.m. ECB rate decision
8:30 a.m. ECB news conference
8:30 a.m. US jobless claims
8:30 a.m. US durable goods
10 a.m. US new home sales
Major earnings:
3M (before the bell)
Comcast (before the bell)
Dow (before the bell)
American Airlines (before the bell)
Hershey (before the bell)
Southwest Air (before the bell)
Tractor Supply (before the bell)
Twitter (before the bell)
Amazon (after the bell)
Gilead Sciences (after the bell)
Intel (after the bell)
Visa (after the bell)
Alaska Air (after the bell)
Capital One (after the bell)
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1c37bc8a86e1de9d0c6e100fc0642c74 | https://www.cnbc.com/2019/10/23/oil-markets-us-inventory-output-cut-prospects-in-focus.html | Oil surges 2.7% on surprise US inventory decline | Oil surges 2.7% on surprise US inventory decline
Oil field workers with Wisco work on a pump jack in North Dakota, the United States, on November 6, 2013.Ken Cedeno | Corbis News | Getty Images
Oil rose 2.7% on Wednesday after government data showed a surprise draw in U.S. crude stocks and as the prospect of deeper output cuts by OPEC and its allies offered support.
U.S. crude stocks fell 1.7 million barrels last week as refineries hiked crude runs by 429,000 barrels per day (bpd) and oil imports fell, the Energy Information Administration said. Analysts had expected an increase of 2.2 million barrels.
Brent crude futures gained $1.39, or 2.3%. West Texas Intermediate (WTI) crude futures gained $1.49, or 2.7%, to settle at $55.97 per barrel.
Oil prices had fallen earlier in the session on data on Tuesday from industry group the American Petroleum Institute showing U.S. crude stocks rising more than analysts had expected, by 4.5 million barrels to 437 million barrels.
The EIA's report "has put some buyers in the market, but it will be interesting to see if it lasts. While this will distract from demand destruction, the market will eventually come back to it," said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut.
The draw in U.S. oil stocks appeared to have been caused by temporary market factors including higher refinery runs, rather than a fundamental firming of oil demand, and investors are still concerned about the global economy following reports of slowing growth in China and Europe, McGillian added.
A larger-than-expected decline in U.S. gasoline stocks and lower net oil imports also supported prices, analysts said. Gasoline stocks fell by 3.1 million barrels, compared with analysts expectations of a 2.3 million-barrel drop.
"The continued decline in product inventory makes for a bullish report," said John Kilduff, a partner at Again Capital LLC in New York. "Gasoline numbers are summer-like; that's endemic of a good economy (in the U.S.) and people driving to work."
Net U.S. crude imports fell by 873,000 bpd to the lowest on record, while exports rose 435,000 bpd to a near record 3.7 million bpd, the data showed.
"No one really saw that coming because it came at a time when shipping rates were adding a considerable premium to the barrel," said Robert Yawger, director of energy futures at Mizuho.
Also helping to underpin prices, the Organization of the Petroleum Exporting Countries is mulling whether to deepen production cuts amid concerns of weak demand growth next year.
OPEC and other oil producers including Russia, a group known as OPEC+, have pledged to cut production by 1.2 million bpd until March 2020. OPEC and other non-members are scheduled to meet again Dec. 5-6.
"With the headwinds of strong U.S. producer hedging and high freight rates fading, we expect stronger Brent timespreads and higher prices in coming weeks, with upside risk to our year-end $62 per barrel forecast," Goldman Sachs said in a note.
The investment bank expects Brent prices to continue trading around $60 a barrel in 2020.
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ce71edea5b4ed00d9318bdf34d98e4bb | https://www.cnbc.com/2019/10/23/one-options-trader-makes-a-big-bet-on-a-tesla-earnings-beat.html | One options trader makes a big bet on a Tesla earnings beat | One options trader makes a big bet on a Tesla earnings beat
VIDEO3:3803:38Options traders say Tesla could be on the road to a turnaroundOptions Action
Three quarters into a rough year, Tesla is in need of a big-time turnaround.
Elon Musk's electric-auto maker reports earnings after the bell on Wednesday, hoping to follow up its recent deliveries miss with some more optimistic financial results and kick-start a run higher for the stock.
Whether Tesla can actually achieve those goals is something of an open question in the options market, where some conflicting activity is painting a cloudy picture of investor sentiment ahead of Wednesday's report.
"[The options market] is implying about an 8% move, which is about typical," Realm Capital founder Roger DaSilva said Tuesday on "Fast Money." "I'd say it's smack in the range of 8%-10% where [Tesla] typically moves. However, last quarter, it dropped about 15%, so I think people are gearing up for that, as well."
While eye-catching, that 15% move to the downside is just under twice the average post-earnings move for Tesla, which comes in around 9% in either direction.
However, at least one trader is looking to take advantage of what could turn out to be cheap options prices to place a big bet on a Tesla beat.
In this bet, the November 230-strike calls rolled up to the November 280s, DaSilva said, "locking in some profits, but positioning for some more upside."
Despite slightly depressed options prices, these contracts still aren't particularly cheap. This trader laid out more than $4 million in premium to place this bet, buying 6,000 contracts at $6.70 per contract.
If the trader had just been buying those 280-strike calls, Tesla would need to jump more than 12% from yesterday's close for this trade to break even at November expiration. However, by way of selling in-the-money call contracts against this trade, the trader likely cut down their break-even price significantly, making this bet easier to justify placing.
Tesla was trading slightly lower in Wednesday's session.
Disclaimer
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994d796a9904382a58b0240222687d36 | https://www.cnbc.com/2019/10/23/servicenow-shares-dramatically-cut-after-hours-losses-at-the-open.html | ServiceNow shares dramatically cut losses after plunging on CEO change | ServiceNow shares dramatically cut losses after plunging on CEO change
VIDEO9:3409:34Incoming ServiceNow CEO Bill McDermott on his plans for the companySquawk on the Street
Shares of ServiceNow dropped 5% at Wednesday's open on Wall Street. While still a sizable decline, the stock had been down as much as 15% in after-hours trading Tuesday after the enterprise software company said its CEO, John Donahoe, was leaving to become chief executive of Nike.
Donahoe, already a Nike board member, will succeed longtime Nike CEO Mark Parker. Nike said late Tuesday that Parker will step down, effective in January of next year. Donahoe, chairman of PayPal, was formerly CEO of eBay.
For its part, California-based ServiceNow announced that Bill McDermott, who recently departed as leader of German software firm SAP, will take over for Donahoe as its CEO.
"We have a fired up team," McDermott said on CNBC's "Squawk on the Street," before the opening bell Wednesday. "I'm super excited about our leadership team. The board of directors here is so uplifting."
McDermott, 58, spent 17 years at SAP and became co-CEO in 2010. He became sole CEO in 2014.
Asked why he wanted to take a CEO job so soon after SAP, McDermott said, "I'm not the guy who wants to make a tee time," stressing he would rather be helping ServiceNow build its business than spending his time playing golf.
One of the challenges McDermott faces right away at ServiceNow is filling the chief financial officer post, vacated by Mike Scarpelli in August.
McDermott said he's not worried about finding a top-notch CFO, saying he's been getting tons of emails. "We have our pick of the litter," he said. There are "three serious candidates" being considered for the job, he added.
In addition to announcing the CEO change, ServiceNow late Tuesday also disclosed preliminary third-quarter revenue of $885.8 million, slightly more than analysts had expected. ServiceNow is set to release full Q3 results after the closing bell on Wednesday.
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4278d491e276977a8132bb9935810714 | https://www.cnbc.com/2019/10/23/stock-market-earnings-and-economic-data-in-focus-on-wall-street.html | Stocks rise despite weak earnings from Caterpillar and Boeing, bringing S&P 500 closer to record | Stocks rise despite weak earnings from Caterpillar and Boeing, bringing S&P 500 closer to record
VIDEO3:3503:35An analyst explains Caterpillar's earnings miss, full-year guidance cutSquawk Box
Stocks rose slightly on Wednesday as investors digested earnings reports from Caterpillar and Boeing.
The Dow Jones Industrial Average closed 45.85 points higher, or 0.2% at 26,833.95. The S&P 500 gained 0.3% to close at 3,004.52. The Nasdaq Composite climbed 0.2% to 8,119.79.
Wednesday's nudged the S&P 500 closer to a record set in July. The index is less than 1% from that level.
Caterpillar said it earned $2.66 per share in the third quarter, versus the Refinitiv consensus estimate of $2.88 per share. Revenue came in at $12.758 billion, while Wall Street expected revenue of $13.572 billion. The heavy machinery manufacturer lowered its full-year earnings per share forecast to a range of $10.59 and $11.09, lower than the expected $11.70. The stock closed 1.2% higher, however, after falling more than 6% in the premarket.
Meanwhile, Boeing shares climbed 1% after the airplane maker said it will stick to its timeline for the return of the 737 Max. That was enough to offset earnings that badly missed analyst expectations. The company reported a profit of $1.45 per share. Analysts polled by Refinitiv expected a profit of $2.09.
"BA's new guide for the MAX return to service was better than expected," said Buckingham Research analyst Richard Safran in a note. "It was expected that BA would move its expectations for MAX certification to the right - but BA's new guide was earlier than the 1Q20 date we think many expected."
Traders work on the floor at the New York Stock Exchange.Brendan McDermid | Reuters
Weak results from Texas Instruments kept stocks in check, however. Texas instruments — which is often seen as a proxy for the microchip industry — plunged 7.5% after posting fourth-quarter guidance well below market estimates.
Texas Instruments' losses dragged down the broader chipmaker space. The VanEck Vectors Semiconductor ETF (SMH) slid 1.7%. ON Semiconductor dropped 3.6% while Qualcomm lost 1.6%.
Despite the weak results, the third-quarter earnings season has largely topped analyst expectations. Of the S&P 500 companies that have reported through Wednesday morning, 81% have posted better-than-expected results, according to FactSet.
To be sure, companies are beating watered-down estimates. S&P 500 earnings were expected to have fallen by more than 4% in the previous quarter entering the season, according to FactSet.
"Nobody is holding the market's feet to the fire on earnings right now," said Yousef Abbasi, director of U.S. institutional equities at INTL FCStone. "The market's perception now is central banks have completely backed off of any hike; they are all looking to ease."
The U.S. central bank is expected to cut rates for a third time this year at the end of the month.
In Europe, U.K. lawmakers voted in favor of Prime Minister Boris Johnson's Brexit plan, but rejected his attempt to fast-track legislation to take the country out of the EU by the end of the month. The prime minister said the next step would be to wait for the EU to respond to a request to delay the current Brexit deadline of Oct. 31.
Wednesday's moves come after a slight decline in the previous session as weak earnings from McDonald's and Travelers overshadowed better-than-expected numbers from Procter & Gamble and United Technologies.
—CNBC's Sam Meredith and Michael Bloom contributed to this report.
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436f96eb336c8e5386eda4554f93491d | https://www.cnbc.com/2019/10/23/stocks-making-the-biggest-moves-midday-boeing-six-flags-crowdstrike.html | Stocks making the biggest moves midday: Boeing, Six Flags, CrowdStrike, Snap and more | Stocks making the biggest moves midday: Boeing, Six Flags, CrowdStrike, Snap and more
John Greim | LightRocket | Getty Images
Check out the companies making headlines in midday trading.
Boeing — Shares of the aerospace giant rose 1.1% after Boeing delivered third-quarter earnings that were below what Wall Street expected but, overall, did not feature any new surprises as the company works through its 737 Max aircraft crisis. While Boeing's revenue slid and the company cut production of its 787 Dreamliner program, Credit Suisse said on the whole that "no incremental negative news on MAX will be a relief for most" investors.
CrowdStrike — Shares of software company CrowdStrike rose 3.6% after Nomura Instinet initiated coverage of the stock with a buy rating. The firm said the cybersecurity company that it had "superior" proprietary technology.
Texas Instruments — Shares of the semiconductor name dropped 7.5% after the company missed revenue estimates and gave weak guidance for the current quarter. Softening demand as well as the ongoing trade war continue to pressure sales, the company said.
Six Flags — Shares of Six Flags tanked 12.4% after posting dismal third-quarter earnings. The amusement parks operator reported earnings of $2.11 per share, well below the estimated $2.31, according to Refinitiv. Six Flags earned $621 million in revenue, missing estimates of $644 million.
Blackstone — Shares of Blackstone jumped 4.9% after reporting strong third-quarter earnings. The private equity company posted earnings of 58 cents per share on revenue of $1.735 billion. Wall Street forecast earnings of 53 cents per share on revenue of $1.358 billion, according to Refinitiv.
Snap — Shares of social media company Snap dropped 5.8% after a weak revenue forecast raised concerns that the momentum the company built up over the first half of the year could be dwindling.
ServiceNow- Shares of the software company fell 3.7% after the company said John Donahoe, the current CEO, is leaving to replace Mark Parker as CEO of Nike. Bill McDermott, who recently stepped down as CEO of SAP, is joining ServiceNow later this year to become its new CEO.
Eli Lilly — Shares of the pharmaceutical company fell 2.2% after reporting mixed results for the third quarter. EPS came in at $1.48, which is 7 cents above estimates, but revenue missed expectations, according to Refinitiv. The company did raise its full-year profit forecast based on strength in its diabetes drug as well as a lower tax bill.
Alexion Pharmaceuticals — Shares of Alexion rose 7.4% after beating on the top and bottom lines of its third quarter earnings. The pharmaceutical company earned $2.79 per share, topping estimates of $2.47, according to Refinitiv. Revenue also beat estimates at $1.263 billion.
Boston Scientific — Shares of Boston Scientific jumped 5% after the medical device manufacturer reported strong third-quarter earnings. The company reported earnings of 39 cents per share, topping estimates of 38 cents, according to Refinitiv. Revenue came in at $2.707 billion, higher than the forecast $2.647 billion.
Anthem — Shares of the insurance company rose 1.3% after reporting third-quarter earnings that beat Street estimates. Anthem reported earnings per share of $4.87 on revenue of $26.444 billion. Analysts forecast earnings per share of $4.82 on revenue of $25.875 billion, per Refinitiv.
Chipotle — Shares of Chipotle Mexican Grill fell 5.2% despite reporting quarterly earnings that topped analyst expectations. The company said it earned an adjusted $3.82 per share. Analysts polled by Refinitiv expected a profit of $3.22 per share. However, Chipotle warned its drive-thru plans may delay future store openings.
Walgreens Boots Alliance — Shares of Walgreens Boots Alliance ticked 1.4% lower following a downgrade to neutral from overweight from J.P. Morgan. The firm said there are better opportunities for upside in its coverage universe.
Norfolk Southern — Shares of the freight railroad company fell 2.2% after missing Wall Street's estimates for its third-quarter earnings. Norfolk Southern reported earnings of $2.49 per share on revenue of $2.841 billion. Analysts forecast earnings of $2.59 per share on revenue of $2.845 billion, according to Refinitiv.
For more on ServiceNow, watch CEO John Donahoe's interview on Mad Money tonight at 6 p.m. ET.
— CNBC's Michael Sheetz, Pippa Stevens and Fred Imbert contributed reporting.
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0273e6e937c8847de899bebb4512d2c6 | https://www.cnbc.com/2019/10/23/talks-with-eu-could-be-an-alternative-to-auto-import-tariffs-commerce-secretary-wilbur-ross-tells-ft.html | Talks with EU could be an alternative to auto import tariffs, Commerce Secretary Wilbur Ross tells FT | Talks with EU could be an alternative to auto import tariffs, Commerce Secretary Wilbur Ross tells FT
U.S. President Donald Trump, center, speaks while Jean-Claude Juncker, president of the European Commission, left, listens during a meeting in the Oval Office of the White House in Washington, D.C., U.S., on Wednesday, July 25, 2018.Kevin Dietsch | Bloomberg | Getty Images
New negotiations with the European Union could be an alternative to imposing tariffs on automotive imports next month, U.S. Commerce Secretary Wilbur Ross has suggested in an interview with the Financial Times published on Wednesday.
President Donald Trump declared this year that some imported vehicles and parts posed a national security threat, but delayed a decision until November on whether to impose tariffs, so as to allow for more time for trade talks with the European Union.
"One (option) would be to say, 'I'm just not going to do anything', the second would be to impose tariffs on some or all (countries) ... the third might be some other form of negotiation," Ross said, describing options being considered by Trump.
On Friday, the United States began slapping tariffs on EU imports worth an annual $7.5 billion, ranging from British whisky and French wine to Spanish olives and cheese from across the bloc, including Italy's Parmigiano-Reggiano.
Ross dismissed criticism of the step, saying the tariffs were not imposed unilaterally and that the measure was taken with the "full support" of the World Trade Organization.
Commenting separately on trade talks with China, Ross said China was following through "in good faith" on assurances given in October to press ahead with large purchases of U.S. farm products.
As the Trump administration's general license for U.S. companies to sell to telecoms equipment maker Huawei Technologies expires in November, Ross told the newspaper this was not a hard deadline and could be altered.
"The deadlines are within our control, we can shorten them, we can lengthen them, we can do whatever - at this point they are being treated separately and independently from the trade talks," Ross said.
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f28e768a036afcd3bb0851f08dd78d5a | https://www.cnbc.com/2019/10/23/thursdays-manufacturing-data-could-show-if-cracks-in-economy-widening.html | Thursday's manufacturing related data could show whether cracks in economy are widening | Thursday's manufacturing related data could show whether cracks in economy are widening
A metal worker operates a crane in a pot room at Century Aluminum Company in Hawesville, Kentucky, May 14, 2019.Bryan Woolston | Reuters
Thursday's economic calendar contains several reports that could shed more light on how much the manufacturing sector is slowing down, and whether its weakness will spill over onto the services sector and the consumer.
Durable goods are expected at 8:30 a.m. ET Thursday, and economists expect to see a dip of 0.8% in September, after a gain of 0.2% in August, according to Dow Jones. There is also Markit's PMI data for manufacturing and services, both at 9:45 a.m.
These reports come after September ISM manufacturing data showed a surprise decline to 47.8%, the lowest since June 2009 and the second month of contraction. New orders slumped to 41%, the lowest since March, 2009.
Markit PMI manufacturing data did not show a contraction for September, and economists expect the flash number for October to show a slight slowdown to 50.7, from 51. A number above 50 continues to show expansion. Markit flash services PMI is also expected to show expansion at 50.8.
"The channel we've been monitoring is that trade matters for manufacturing, and manufacturing matters for corporate profits. Even though manufacturing is a small share of the overall economy, it's still a large share of the volatility in the economy," said Don Rissmiller, Strategas Research chief economist. Rissmiller said the slowing in U.S. manufacturing is tracking the slowdown in manufacturing in other parts of the world, like Germany.
Boeing's problems with its grounded 737 MAX airlines could muddy the durable goods report.
"In durables, the issue is normally ... aircraft orders," said Tom Simons, money market economist at Jefferies. "It tends to be what swings the headline number. Here you're probably going to have the pendulum swing, after last month. It's going to be a drag."
Simons said he is also watching the capital goods, non-defense, ex-aircraft orders and shipments, which are a direct reflection of business spending inside the durable goods report. The future reading of orders fell by 0.2% in last month's data, while shipments reflecting past activity, rose by 0.4%.
"In the long run, there is decent demand for different types of machinery. There's a lot of manufacturing businesses that need equipment that are not as sensitive to tariffs as others, but the tariff sensitive businesses are dominating the data and there's a lot of things that are clouding everything," Simons said.
Grant Thornton chief economist Diane Swonk said the durables reports has a number of factors impacting it. "You're going to have some spillover effect from the GM strike and the trade uncertainty. You have a lot of things going against us on durables. You have the 737 Max out of the equation, so it's going to be a boulder up hill at this point in time," she said.
Simons said he has also been encouraged by a pickup in regional Fed manufacturing data. And he does not expect the manufacturing weakness to spill over into the services sector data. Hiring remains strong, and so does the consumer."I think we'll see divergent data tomorrow," he said.
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65d73bd2aeb0a4f9f9995a811c9c1da7 | https://www.cnbc.com/2019/10/23/uaw-deal-to-end-strike-forfeits-right-to-sue-gm-for-idling-plants.html | UAW's deal to end strike forfeits right to sue GM for idling plants last year | UAW's deal to end strike forfeits right to sue GM for idling plants last year
GM workers rally outside the GM Lordstown plant on March 6, 2019 in Lordstown, Ohio. The sprawling facility was idled today after more than 50 years of producing cars and other vehicles.Jeff Swensen | Getty Images
DETROIT — The UAW's proposed deal to end the 38-day strike against General Motors includes the union's agreement to drop a lawsuit that accused the automaker of violating the previous contract if it went ahead with plans to close some U.S. plants.
The issue would instead be sent to arbitration under the proposed four-year labor contract that 48,000 union members are voting on through Friday.
The UAW filed the lawsuit in February, three months after GM announced plans to "unallocate" and potentially close up to four U.S. plants, including an assembly plant in Detroit that would not permanently shutter under the tentative agreement. GM's announcement to end production at the plants, which also included a large assembly plant in Ohio, drew the ire of President Donald Trump.
The union has argued that GM was in breach of contract because the company stated in 2015 that it would "not close, idle, nor partially or wholly sell, spin-off, split-off, consolidate or otherwise dispose of in any form," any plant under the four-year deal. However, the company also said, "conditions may arise that are beyond the control of the company," like an act of God or decline in demand, that could make that commitment "impossible."
GM has argued the announcement was not a breach of contract. It previously filed a motion to arbitrate the UAW's claims, which the union opposed. As part of the tentative agreement, the lawsuit would be dismissed with prejudice, meaning it could not be brought up again.
VIDEO1:0001:00GM, UAW tentative deal will close three plants, senior employees receive bonusHalftime Report
Arbitration could have positive implications for UAW members who were employed at an "unallocated plant" as of Nov. 26, the date GM announced the plans. Workers who chose to accept employment at another GM facility instead of being laid off could be entitled to certain benefits. Arbitration, according to the deal, also would include whether some workers who remain employed with the automaker are entitled to any lost wages.
Spokespeople with the UAW and GM declined to comment or did not immediately respond regarding the potential arbitration.
The "unallocated" plants include Baltimore Transmission in Maryland, Lordstown Assembly Complex in Ohio and Warren Transmission in Michigan. They employed about 2,000 hourly UAW members at the time of GM's November announcement.
Under the tentative agreement, a separate lawsuit filed by the union in January over GM's use of temporary workers in connection to the unallocated plants also would be dismissed with prejudice, according to the tentative agreement.
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ffffada2d3b6baabe5b2ab26ea8a6a73 | https://www.cnbc.com/2019/10/23/us-states-plan-google-antitrust-meeting-next-month---sources.html | US states plan to hold a Google antitrust meeting next month in Colorado: Sources | US states plan to hold a Google antitrust meeting next month in Colorado: Sources
Visitors pass by the logo of Google at the high profile startups and high tech leaders gathering, Viva Tech, in Paris, France May 16, 2019.Charles Platiau | Reuters
U.S. state attorneys general probing Alphabet's Google plan to meet next month in Colorado to discuss a probe into whether the search giant's business practices break antitrust law, according to three sources knowledgeable about the meeting.
The meeting, which is being planned for Nov. 11, would be similar to a gathering this week in New York where state and federal enforcers from the Justice Department and Federal Trade Commission discussed their probe of Facebook, according to one of the sources.
A second source said that this meeting would touch on organizational issues and was likely to be one in a long series of gatherings to discuss the probe.
The investigation of Google appears to be well underway since Texas sent the search and advertising giant a subpoena asking for information about its ad business. As of earlier this month, Google began sending data to the attorneys general.
The investigation, which involves all state attorneys general except Alabama and California, seeks to dig into the opaque business of online digital advertising, where Google is a dominant player. Attorneys general for the District of Columbia, Guam and Puerto Rico are also part of the investigation.
Google, which had no comment for this story, offers free searches, email and other services but much of its revenue is from advertising.Google has previously said that it was cooperating with federal regulators and with the state probe.
Google faces two other major inquiries - a U.S. Justice Department investigation and a probe by the House of Representatives Judiciary Committee - both of which have broad reviews of the big internet companies underway.
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cf42bc6c06dce14552c94eb2471dda76 | https://www.cnbc.com/2019/10/23/watch-president-donald-trump-speaks-at-the-shale-insight-conference.html | Watch: Trump visits key swing state Pennsylvania to discuss energy production | Watch: Trump visits key swing state Pennsylvania to discuss energy production
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President Donald Trump will appear at the 9th Annual Shale Insight Conference in Pittsburgh, where he is expected to commend his administration's commitment to "domestic energy production and manufacturing jobs," according to the Pittsburgh Tribune-Review.
One of the environmental issues slated for discussion at the conference, which spans from Oct. 22 to Oct. 24, is methane emission reduction.
Methane emissions in the United States have been declining, according to the Environmental Protection Agency, while natural gas production has been increasing.
In a report, the Pennsylvania Department of Environmental Protection said the state is the second-largest U.S. gas producer, overshadowed only by Texas.
Trump framed his decision to withdraw from the Paris climate agreement two years ago as a move of solidarity with the blue-collar residents who voted him into office in 2016.
"I was elected to represent the citizens of Pittsburgh, not Paris," he said. In turn, Pittsburgh Mayor Bill Peduto said that the city will adhere to the precedents set by the Paris agreement.
Bill tweet
During his candidacy for president, Trump also appeared and spoke at the conference.
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d8313d958a784bbee530e1dcd71a48f7 | https://www.cnbc.com/2019/10/23/your-first-trade-for-wednesday-october-23.html | VIDEO1:0601:06Final Trades: SMH, SLB and moreFast Money
The "Fast Money" traders shared their first moves for the market open.
Dan Nathan was a seller of the VanEck Vectors Semiconductor ETF.
Karen Finerman was a seller of Bank of America.
Steve Grasso was a buyer of Snapchat.
Guy Adami was a buyer of Schlumberger.
Disclosure
Trader disclosure: Dan is Long TLT Dec call spread. XLP Nov put spread. SMH Nov put spread. Karen Finerman's firm is long ANTM, C, CBS, CPRI, FB, FDX, FL, FNAC, GOOG, GOOGL, GLNG, GMLP, HD, JPM, LYV, REZI, RRGB, SPY puts, SPY put spreads, TBT, TGT, URI, WIFI. Her firm is short HYG, IWM, LQD. Her firm is short TGT calls. Karen Finerman is long AAL, AYR/CN BAC, BOT Bitcoin, Bitcoin Cash, Ethereum, C, CAT, CBS, CPRI, DAL, DVYE, DXJ, EEM, EPI, EWW, EWZ, DVYE, FB, FL, GM, GMLP, GLNG, GOOG, GOOGL, JPM, LOW, LYV, KFL, MA, MTW, REAL, REZI, SEDG, TACO, WIFI, WFM. Karen Finerman is long FB spread calls. Karen Finerman is long GOOG put spreads. Karen Finerman is long SPY puts. Bitcoin and Ethereum are in her kids' Trust. Steve Grasso is long AAPL, BHC, CAR, EVGN, GE, LEN, MSFT, OLN, PFE, SAVE, T, TSE, WRK Grasso owns Callable Trigger contingent yield note linked to SPX, RTY, and MXEA. Grasso's kids own EFA, EFG, EWJ, IJR, SPY, TUR. Steve Grasso's firm is long BA, BIOS, COUP, CPB, CUBA, CXO, DIA, F, GDX, GE, GLD, GOLD, GSK, HPQ, IAU, IBM, ICE, KHC, MO, MSFT, NEM, NYCB, QCOM, QQQ, SNAP, SNGX, SPY, SQQQ, T, TAP, VER, WAB, WDR, WRK. Guy Adami is long CELG, EXAS, GDX, INTC. Guy Adami's wife, Linda Snow, works at Merck.
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c9198901f9169a7f7ad815a0792b9582 | https://www.cnbc.com/2019/10/24/3m-sales-fall-2percent-on-slowing-asia-demand.html | 3M cuts profit forecast after sales miss on slowing Asia demand | 3M cuts profit forecast after sales miss on slowing Asia demand
VIDEO0:4900:493M posts EPS beat, revenue missSquawk Box
U.S. industrial conglomerate 3M fell well short of Wall Street estimates for quarterly revenue and cut its full-year profit forecast on Thursday, adding to signs of U.S. corporations suffering from trade tensions with China.
Shares of the Scotch tape and Post-it notes maker fell as much as 3% premarket. The Dow component has lost about 11% so far this year, underperforming a near 14.8% rise for the index.
China, a high-growth market for 3M, expanded at its weakest pace in almost three decades in the third-quarter as the bruising trade war hit factory production.
So far this week, industrial bellwether Caterpillar Inc reported weak demand in Asia, including a 29% plunge in construction equipment sales, while toymaker Hasbro Inc highlighted a hit from the tit-for-tat tariffs.
3M also said sales in Asia-Pacific, its biggest market outside the United States, fell 5% in the third quarter ended Sept. 30, while Europe, Middle East, and Africa declined 4.1%. Sales in the United States rose by just 0.8%.
"While the macroeconomic environment remains challenging... we continued to effectively manage costs and reduce inventory levels," Chief Executive Officer Mike Roman said in a statement.
The company earlier this year announced plans to reduce production and cut 2,000 workers.
"We believe investors anticipated a weak quarter and guide down. Operationally, this appears worse," Gordon Haskett analyst John Inch wrote in a note.
3M said it now expects full-year sales to decline in a range of 1% and 1.5%, excluding the effect of currency changes, compared with sales growth of 1% at the mid-point forecast earlier.
The company also lowered its full-year adjusted earnings expectations to be between $8.99 and $9.09 per share, down from its prior outlook of $9.25 to $9.75 per share.
Net income attributable to the company rose to $1.58 billion, or $2.75 per share, in the quarter, from $1.54 billion, or $2.64 per share, a year earlier, helped by a gain from a divestiture.
Net sales fell 2% to $7.99 billion, missing the average analyst estimate of $8.16 billion, according to IBES data from Refinitiv.
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d1935cd08ccb0a3e39a81bf06ee5bbd1 | https://www.cnbc.com/2019/10/24/american-airlines-aal-q3-19-earnings-top-wall-street-estimates.html | American Airlines third-quarter earnings top estimates, but costs from Boeing 737 Max grounding grow | American Airlines third-quarter earnings top estimates, but costs from Boeing 737 Max grounding grow
VIDEO1:4101:41American Airlines reports earnings beat despite 737 Max grounding costsSquawk Box
American Airlines shares rose Thursday after posting third-quarter earnings that were slightly ahead of Wall Street estimates, despite rising costs from the Boeing 737 Max and hundreds of flight disruptions over the peak summer period.
American's net income climbed more than 14% to $425 million from a year ago on revenue of $11.91 billion, which was slightly lower than estimates but higher than last year. American's shares rose 4%.
The quarter was challenging for the Fort Worth, Texas-based airline. In addition to the Max grounding, American suffered operational problems that have forced its customer service team to call travelers to apologize and offer compensation such as frequent flyer miles for the disruptions.
The airline has accused the unions representing its mechanics of an intentional slowdown to gain leverage in contact talks, allegations the unions have denied.
American slightly lowered its full-year earnings forecast by 50 cents at the top end to a range of $4.50 and $5.50.
The quarter's "results should have been better," CEO Doug Parker said in an earnings release. "Our third quarter was impacted by the continued grounding of the Boeing 737 MAX and the operational challenges resulting from ongoing labor contract negotiations. These challenges affected our customers, our shareholders and our team members, who we thank for their hard work and perseverance.
"Producing such strong results despite a difficult summer is due entirely to your hard work," Parker said in a note to employees.
Adjusted earnings per share came in at $1.42, above the $1.40 analysts expected.
The airline said it expects that the Max grounding, now in its eighth month, will cost it about $540 million in pretax income this year. In July, the carrier forecast a $400 million hit to pretax earnings this year because of the grounding.
American is "working to ensure that Boeing shareholders bear the cost of Boeing's failures, not American Airlines' shareholders," Parker said on Thursday's earnings call.
American removed the Max planes from its schedules until mid-January as regulators haven't yet signed off on Boeing's fixes for the troubled jets. The airline expects to increase its capacity by 5% next year, assuming the Max returns.
American's CFO, Derek Kerr, said the airline slowed its hiring earlier in the fall amid the grounding but it has since picked up the pace "so we're ready to roll" if the plane gets a green light from regulators.
The planes were grounded worldwide by regulators after two fatal crashes — one in Indonesia in October 2018 and another, less than five months later, in Ethiopia. Regulators haven't said when they will allow the jets to fly again. They haven't yet approved software changes Boeing made for the planes after a flight-control system was implicated in both crashes.
An American Airlines Boeing 737 Max 8 arriving from Washington's Ronald Reagan National Airport is seen taxiing to its gate at the Miami International Airport on March 12, 2019 in Miami, Florida.Joe Raedle | Getty Images
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247c61e7589fd0d852f30a3cb8251f0b | https://www.cnbc.com/2019/10/24/analysts-predict-amazon-earnings.html | Here's what every major analyst expects from Amazon earnings after the bell | Here's what every major analyst expects from Amazon earnings after the bell
Amazon CEO Jeff Bezos arrives for the premiere of 'The Post' on December 14, 2017.Mandel Ngan | AFP | Getty Images
Big things have come to be expected when Amazon reports earnings but that doesn't mean Wall Street analysts aren't cautious going into the company's third quarter earnings report after the bell on Thursday.
While some analysts expect the e-commerce giant to beat the street, others are urging clients to take a more measured approach. Analysts still want more information on one-day shipping costs, Amazon Web Services, and regulation issues.
Amazon shares are up 17% this year.
Here's what the major analysts expect from Amazon's earnings:
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12bfaebcddb2ef290fd23cace7897b49 | https://www.cnbc.com/2019/10/24/boeing-not-out-of-the-woods-much-riskier-than-caterpillar-trader.html | Boeing is 'not out of the woods' and is much riskier than Caterpillar, trader says | Boeing is 'not out of the woods' and is much riskier than Caterpillar, trader says
VIDEO4:4304:43Boeing 'not out of the woods,' much riskier than fellow industrial CaterpillarTrading Nation
It was a tale of two industrials.
Wall Street got a flood of earnings reports Wednesday, including those of machinery giant Caterpillar and beleaguered airplane manufacturer Boeing. Shares of Caterpillar initially plunged while Boeing shares popped, but the two stocks ended the trading day on a less drastic note, up about 1% each.
Experts see much more risk ahead for one stock than the other.
"Boeing is not out of the woods," Gina Sanchez, founder and CEO at Chantico Global, told CNBC's "Trading Nation" on Wednesday. "They have, actually, a few things that could still act on their stock negatively more than positively at the moment."
While both stocks appear to be "largely trendless" to Sanchez, Boeing's 737 Max issues and exposure to the U.S. trade dispute with the European Union pose an outsized threat to its stock, she said.
"Boeing ... has a lot more event risk," she said. "You basically have not only the issues with the 737 Max, which have been really continuing to plague Boeing, but remember that Boeing is also at the knife's edge of a tariff tiff between the U.S. and the EU, and the Boeing-Airbus WTO announcement basically will probably result in a retaliation by the EU."
The World Trade Organization earlier this month ruled in favor of U.S. allegations that European countries had granted illegal subsidies to Airbus. The ruling paved the way for tariffs on $7.5 billion worth of EU goods.
Add to that the seemingly weakening economic layout, and this environment doesn't bode well for Boeing or Caterpillar, Sanchez said.
"I think the general story is, 'Hey, we're going into a downturn. These kinds of stocks tend to go down with it.' But if you have added momentum to that downturn, then I would really stay away," she said. "So, I think Boeing is the really more negative story of the two."
Mark Newton, longtime technical analyst and founder and president of Newton Advisors, is also a Boeing bear.
"Really, the key level for this is going to be 320, the most recent lows," Newton said in the same "Trading Nation" interview, pointing to a long-term chart of the stock. The stock closed Wednesday at $340.50.
"Getting under [$320] would be a larger negative" for Boeing, Newton said, adding that the stock is still in recovery mode after an overbought rally that took it from around $100 in early 2016 to around $450 early last year.
"I think the stock just got substantially overbought, and, technically, it's not a great sign to get so overbought and then gradually start to roll over," he said. "So I'm a little more bearish on Boeing in the months and years to come, I think into 2022. But ... 320 is going to be a key level."
Caterpillar shares didn't look "too attractive" to Newton here, either.
"The stock has really been falling for the last 20 months, but if anything, the decline has been pretty mild compared to how the stock had risen prior to the pullback," he said, citing a chart.
"It's given back about 50% of the bigger range. I don't view that as too much of a negative," Newton said. "If it gets over 135, that would actually be a pretty good positive for this stock in thinking it could finally play catch-up to stocks like Deere in the machinery space which have been substantially stronger. So, right now, CAT has been a laggard, but it's tough to pin this on tariffs, I think, just because it peaked out largely about 20 months ago."
Boeing is up nearly 6% year to date, while Caterpillar is up almost 7%.
Disclaimer
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4168637a2fd7cd945350754f6816474a | https://www.cnbc.com/2019/10/24/break-in-reported-at-elizabeth-warren-campaign-office-in-new-hampshire.html | Break-in reported at Elizabeth Warren campaign office in New Hampshire | Break-in reported at Elizabeth Warren campaign office in New Hampshire
Democratic presidential candidate, Sen. Elizabeth Warren (D-MA) speaks during the New Hampshire Democratic Party Convention at the SNHU Arena on September 7, 2019 in Manchester, New Hampshire.Scott Eisen | Getty Images
Sen. Elizabeth Warren's presidential campaign said on Thursday that one of its offices in New Hampshire was broken into the previous night. Other offices in the same building were also vandalized, the campaign said.
"We have no reason to believe this was targeted to the campaign or is anything further than a regular break in, and we are working with authorities," Andrew Taverrite, a spokesperson for the campaign, said in a statement.
The break-in at the Manchester office was reported as a burglary at 9:16 a.m., according to local police logs.
A voice message left with the Manchester police department was not immediately returned.
The Warren campaign has five field offices in New Hampshire, the first-in-the-nation primary state, according to its campaign page. The New Hampshire primary will take place on Feb. 11, 2020, shortly after the Iowa caucuses.
Warren, who represents neighboring Massachusetts in the Senate, leads the Democratic field in New Hampshire and is polling second nationally, behind former Vice President Joe Biden.
VIDEO1:2501:25Sen. Elizabeth Warren fires back at Leon Cooperman over wealth taxSquawk Box
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8020d8bc0e3f5d6f12649cedce888d65 | https://www.cnbc.com/2019/10/24/comcast-q3-2019-earnings.html | Comcast beats on top and bottom lines | Comcast beats on top and bottom lines
VIDEO1:5501:55Comcast earnings: $0.79 EPS, vs $0.75 a share expectedSquawk Box
Comcast on Thursday reported third-quarter earnings and revenue that exceeded expectations, as did closely watched data on new high-speed internet customers.
The stock closed the day down 1.9%.
Here are the key numbers:
Earnings per share: 79 cents vs. 75 cents per share, according to Refinitiv estimatesRevenue: $26.83 billion vs. $26.77 billion, according to RefinitivHigh-speed internet customers: 379,000 vs. 344,000 net adds, according to FactSet estimates
This marks the fifth consecutive quarter for which Comcast has exceeded analysts' earnings estimates. Shares of the stock have climbed more than 34% this year.
Comcast also surpassed analysts' expectations for high-speed internet customers, reporting 379,000 compared with FactSet expectations of 344,000.
Theatrical revenue for NBCUniversal slumped 8.8% from a year earlier. The company blamed the decline on the strength of film releases in last year's third quarter, including "Jurassic World: Fallen Kingdom" and "Mamma Mia! Here We Go Again." Comcast noted the decline was partially offset by the release of "Fast & Furious Presents: Hobbs & Shaw" during the third quarter.
The company said Sky, the British broadcaster acquired in September, saw its customer relationships increase 2.1% year over year to 23.9 million. Sky brought in $4.6 billion in revenue for the quarter, a 4.2% decrease from a year earlier. Comcast blamed the impact of currency fluctuations for the change.
Here's how Comcast's other divisions did for the third quarter:
Cable communications accounted for $14.58 billion in total revenueCable networks accounted for $2.77 billion in total revenueBroadcast television brought in $2.23 billion in total revenueFilmed entertainment brought in $1.71 billion in total revenue, a 6.2% decrease from the previous yearTheme Parks brought in $1.63 billion in total revenue
The earnings report was Comcast's first since the official announcement of its new streaming service, "Peacock." The ad and subscription-supported service is slated to roll out in April with a packed content slate, including popular shows like "The Office" and "Parks and Recreation." It will compete with the likes of Apple, Disney and Netflix, among others.
Disclosure: Comcast is the owner of NBCUniversal, parent company of CNBC and CNBC.com.
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e8345c9dda5c261e8b44fda82168f6dd | https://www.cnbc.com/2019/10/24/conor-mcgregor-says-his-ufc-return-fight-set-for-january.html | Conor McGregor says his UFC return fight set for January | Conor McGregor says his UFC return fight set for January
UFC featherweight champion Conor McGregorKevork Djansezian | Getty Images
Conor McGregor will return to mixed martial arts in January with a UFC fight in Las Vegas.
The Irish fighter said Thursday he will return "fully focused" on Jan. 18 at the T-Mobile Arena.
"That is my comeback fight. It is 12 weeks this Saturday. I am in prime physical condition. I have agreed the date with the company," McGregor said, adding that he knows his opponent's name but won't reveal it. "If I was to give you people the name, which I would love to do, I know the UFC would flip it because they are a crafty company."
The 31-year-old McGregor hasn't fought since losing by submission to Khabib Nurmagomedov in October 2018. He was banned for six months and fined $50,000 for his part in a post-fight brawl.
McGregor said he is targeting two more fights, including a rematch with Nurmagomedov in Moscow. He also aimed a string of insults at the Russian fighter.
VIDEO0:5200:52MMA superstar Conor McGregor faces assault charges after an alleged brawlNews Videos
After the Jan. 18 fight, McGregor said he would then like to fight the winner of the Nov. 3 bout between Nate Diaz and Jorge Masvidal, followed by either Nurmagomedov or Tony Ferguson.
"I'm going to go through the entire roster like a chain saw through butter," he said.
McGregor's return comes as he faces more legal issues. He is facing an assault charge in Ireland over an incident in which he appeared to punch a man in a bar.
He said he is planning to abstain from alcohol and late nights in the run-up to his next fight.
"I am focused here," McGregor said. "I am structured now."
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ada311f8f6116053f05e8be698cd10bd | https://www.cnbc.com/2019/10/24/cramer-lightning-aurora-is-just-a-speculative-stock.html | Conagra: Honestly, I'm just O.K. on it right now. It's been a little too up or down, hit or miss. In the food group, I am a PepsiCo guy. I think that's the straight and narrow."
Vodafone: "Too risky. It's had a very big move and at this point the yield won't support it."
Novocure: "The stock's come down a lot. I guess it ran a little too much … I like Novocure. I think it really belongs in a portfolio."
Fastly Inc.: "I am going to have to do more homework because Fastly is just something I am slowly on."
Starbucks: "I think Starbucks is fine. … I think you buy some now and buys some a little bit lower."
Auroa Cannabis: "This is a total spec, mam. Not more than that. It's just a total spec. As long as you understand that, then I bless you to buy it."
VIDEO4:0904:09Cramer's lightning: Aurora is just a speculative stockMad Money with Jim Cramer
Disclosure: Cramer's charitable trust owns shares of PepsiCo.
Disclaimer
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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e2bbd02072826a759783e3ce3b4e92f0 | https://www.cnbc.com/2019/10/24/daimler-dai-earnings-q3-2019.html | Daimler reports Q3 operating profit rose 8% | Daimler reports Q3 operating profit rose 8%
The newly presented study "Vision EQS" in the Mercedes hall at the IAA. LED animations in the form of small Mercedes stars can be seen in the "radiator grille".Boris Roessler | picture alliance | Getty Images
Daimler reported a slight rise in third-quarter operating profit on Thursday, boosted by higher sales of Mercedes-Benz cars but announced cost cuts and warned that legal provisions tied to diesel litigation could rise.
Group earnings before interest and taxes (EBIT) rose 8% to 2.69 billion euros, up from 2.49 billion euros in the year-earlier period boosted by an 8% rise in sales of luxury cars.
"In order to master the transformation in the next few years, we need to increase our efforts considerably: we have to significantly reduce our costs and consistently strengthen our cash flow," Chief Executive Ola Kaellenius said, without elaborating.
Daimler is due to give a detailed presentation on strategy and costs on November 14.
The return on sales at Mercedes-Benz Cars fell to 6%, down from 6.3% in the year-earlier period, despite an 8% rise in passenger car sales during the quarter, Daimler said.
Daimler reiterated that it expected group earnings before interest and taxes to be significantly lower than last year, and warned it now sees revenue at the trucks division to be at the year-earlier level instead of expecting slight revenue growth.
Daimler said current legal proceedings tied to diesel emissions may result in additional expenditures which may hit profits at Mercedes-Benz Cars and Mercedes-Benz Vans.
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7e985c722e236cf0f3ba46293d3439de | https://www.cnbc.com/2019/10/24/deutsche-bank-downgrades-ford-after-automaker-slashes-year-end-earnings-outlook.html | Deutsche Bank downgrades Ford after automaker slashes year-end earnings outlook | Deutsche Bank downgrades Ford after automaker slashes year-end earnings outlook
A visitor walks past a Ford Escape Titanium at an auto show last April.Greg Baker | AFP | Getty Images
Despite Ford's strong beat on earnings, Deutsche Bank says the automaker is in for a rough ride the rest of the year.
The firm downgraded Ford to hold from buy and lowered its price target to $11 from $12, after Ford lowered its earnings guidance for the rest of the year.
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f2c28c4381bbad3f9a1a77288ad19bd9 | https://www.cnbc.com/2019/10/24/european-markets-corporate-earnings-season-and-brexit-limbo-in-focus.html | European stocks close higher amid corporate earnings season and Brexit limbo | European stocks close higher amid corporate earnings season and Brexit limbo
European stocks traded higher Thursday as traders remain in limbo over an expected delay to the U.K.'s departure from the European Union, while corporate earnings season gathers pace.
The pan-European Stoxx 600 climbed 0.6% by the close, with healthcare stocks rising 1.5% to lead gains while telecoms slipped 1.2% as one of only two sectors trading in the red, alongside technology.
Markets briefly pared gains after worse-than-expected euro zone manufacturing and services data. The IHS Markit October flash services PMI (purchasing managers' index) estimate for October came in at 51.8, slightly below the expected 51.9, while its manufacturing counterpart came in at 45.7 against a forecast of 46.0. October's composite PMI flash estimate was 50.2, up from 50.1 in September but lower than the 50.3 forecast.
However, a generally upbeat wave of corporate earnings helped shrug off the economic apprehension.
The European Central Bank (ECB) kept rates unchanged on Thursday, following a swan song policy meeting for outgoing ECB President Mario Draghi. Markets had not been expecting any movements on policy, with just six weeks having passed since the ECB unveiled a massive stimulus package.
Investors also have on eye on Brexit, which now hinges on a decision from EU leaders on whether to grant the U.K. a further extension after Prime Minister Boris Johnson paused the ratification process for his Withdrawal Agreement Bill. Johnson has signaled intent to call a U.K. general election before Christmas if the October 31 deadline is extended into next year.
Asia Pacific stocks mostly rose on Thursday despite data showing that South Korea's economy continued to slow.
The Royal Bank of Scotland (RBS) reported an attributable net loss of £315 million ($406.9 million) for the third quarter on the back of a £900 million charge to settle claims relating to the payment protection insurance (PPI) mis-selling scandal. Shares of the British lender were down 3.3% during afternoon trade.
Finland's Nokia plunged more than 23% after cutting its full-year profit guidance for 2019 and 2020, citing tough competition and further investments.
German chemical maker BASF reported a fall in third-quarter net profit and sales, but shares added 3.4%, while fellow German heavyweight Daimler announced a third-quarter net profit rise of 8%, sending its shares 3.3% higher.
The day's top performer was Swiss valve maker VAT Group, which surged gained 12.5% after beating third-quarter expectations. Germany's Kion Group jumped almost 9.9% following strong third-quarter results.
French IT consultancy Atos also nearly climbed 9.9% after announcing that its CEO Thierry Breton would step down to become France's candidate for the next EU Commissioner, to be replaced by CFO Elie Girard.
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c837eea6f1b63eca444af364a8008f12 | https://www.cnbc.com/2019/10/24/financial-happiness-slides-for-second-quarter-in-a-row-index-shows.html | Financial satisfaction in the U.S. dips again, according to a key benchmark | Financial satisfaction in the U.S. dips again, according to a key benchmark
A long-running index shows that financial happiness in the U.S. is slipping, despite continued economic strength.
The American Institute of CPA's quarterly Personal Financial Satisfaction Index, released Thursday, shows a 3.6% decline from the previous reading — which also had posted a slight dip. At the same time, however, the latest reading of 37.3 remains near the all-time high of 38.8 that was reached in the first three months of 2019.
"Economic fundamentals haven't really deteriorated that much, but when people see a lot of negative news, it affects their psyche," said Michael Landsberg, a CPA and member of the AICPA Personal Financial Planning Executive Committee.
sturti | Getty Images
In simple terms, the index is a combination of two opposing groups of data: "pleasure" indicators that measure the growth of assets and opportunities, and "pain" points that measure their erosion.
The latest reading showed a 2.2% dip on the pleasure side, which outweighed a slight improvement (0.8%) on the pain side that came from a reduction in inflationary pressure.
The index was pushed lower due largely to a decline in the economic outlook portion of the calculus, which captures the expectations of CPA executives. About 42% express optimism about the U.S. economy's outlook over the next 12 months, down from 57% — which is where it had been for the previous three quarters. In early 2018, it reached 79%.
VIDEO0:4300:43Gauging your risk assessmentInvest in You: Ready. Set. Grow.
"For years and years there's been growth, but it is important to remember that economies are cyclical," Landsberg said. "Executives are seeing where we are in the market cycle and it's making them a little more cautious."
The economy has continued chugging away for 10 years — making it the longest-running economic expansion in U.S. history. And while growth is anticipated to be lower this year at 2.1% — down from 3% in 2018 — with continued slowing expected in 2020 and 2021, Landsberg said there are no immediate red flags.
For instance, unemployment remains near historic lows at 3.5%, and job openings continue to exceed the number of job seekers. The stock market, while volatile, also is up for the year, with the S&P 500 index posting a 19.9% gain through Wednesday. The Dow Jones industrial average, likewise, is up 15% for the year.
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"There's some noise out there, but overall, I think people are still more content than they've been at some points," Landsberg said.
In fact, the current index reading of 37.3 is nearly 5 points higher than the 32.8 it posted a year ago.
The lowest reading on the index was in 2011, when it hit negative 41.35. Before that, it had peaked in the third quarter of 2007. At that point, the largest contributor to the pleasure side of the equation was home equity, which tanked when housing prices slid, delinquencies surged and the Great Recession gripped the country.
While a recession will hit at some point — exactly when is anyone's guess — experts say the best defense is preparation.
"Anyone who is feeling nervous should make sure they have a financial plan in place," Landsberg said. "You don't want to be reactive."
That means having emergency savings and making sure your investments accurately reflect your risk tolerance — a combination of how well you can stomach market volatility and how long until you need the money. For example, if you're nearing retirement or already withdrawing from money earmarked for it, make sure your your assets are allocated properly so your portfolio doesn't have more risk in it than it should, Landsberg said.
Additionally, keep an eye on your debt. As of June 30, total U.S. household debt stood at $13.86 trillion — $1.2 trillion more than the previous peak of $12.68 trillion in the third quarter of 2008, according to the Federal Reserve Bank of New York.
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544794899a501a5fe2854cc8778b5e8d | https://www.cnbc.com/2019/10/24/global-recession-top-concern-among-apac-business-leaders-survey.html | Global recession is a top concern among Asia Pacific business leaders, JPMorgan survey shows | Global recession is a top concern among Asia Pacific business leaders, JPMorgan survey shows
Gantry cranes stand at the Port of Singapore in Singapore, on July 12, 2019.Ore Huiying | Bloomberg | Getty Images
Business decision-makers in Asia Pacific cite the prospect of a global recession and the impact of trade tariffs as the biggest risks for their companies in the next six to 12 months, according to a survey from J.P. Morgan.
Around 30% of chief financial officers and group treasurers in the region belonging to 130 global companies said they felt a potential global recession posed the biggest risk to their businesses in a poll conducted at the 2019 J.P. Morgan Asia Pacific CFO and Treasurers Forum in Shanghai.
The impact of global trade tariffs was a top concern for about 27% of the respondents, while 24% said they were worried about a slowdown in emerging markets, 10% revealed cyber threats were a primary worry and 9% pointed to Brexit and the future of the eurozone.
"The concerns over the impact of headwinds in the global macro environment are front and center in the minds of the top CFOs and treasurers of global corporations," Oliver Brinkmann, head of corporate banking for Asia Pacific at J.P. Morgan, said in a statement.
"While J.P. Morgan's view is not for a recession, growth is expected to slow in the coming quarters, with global growth for 2019 forecast at 2.7 percent and dipping to 2.5 percent in 2020," he wrote.
Experts have said that the chances of another recession happening are "uncomfortably high" in the next 12 to 18 months despite actions from policymakers to try and reverse course. In fact, the International Monetary Fund recently made a downward revision to its global growth outlook for 2019 and 2020 and said growth in major Asian economies is set to slow more than expected.
The ongoing trade war between the United States and China has roiled global markets and created a lot of uncertainty for businesses in part due to disruptions in global supply chains. Even though some progress has been made recently, U.S. and Chinese tariffs on each other's imports still remain. Elsewhere, the United Kingdom's scheduled departure from the European Union looks set to be delayed again, while in China, the economy is slowing down.
In the J.P. Morgan survey, 34% said they were responding to global supply chain disruptions by exploring pricing options with suppliers while 32% revealed they are currently sourcing for alternative suppliers.
About 15% said they were shifting production from China to other countries. Experts have previously said that countries like Vietnam could be a big winner of the U.S.-China trade dispute if businesses shift their factories out of the world's second-largest economy.
"We still see growth opportunities especially in emerging Asia but the geopolitical events are somewhat clouding sentiment," Brinkmann said.
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c6a54833ad717aa06ab4d2b3cedf1aed | https://www.cnbc.com/2019/10/24/intel-intc-earnings-q3-2019.html | Intel stock pops on earnings beat and return to growth | Intel stock pops on earnings beat and return to growth
Intel Pentium CPU photographed after Intel revealed information about major flow in the chipsets. JP Black | LightRocket | Getty Images
Intel stock jumped as much as 8% in extended trading on Thursday after the chipmaker beat third-quarter earnings expectations and reignited revenue growth.
Here are the key numbers:
Earnings: Excluding certain items, $1.42 per share, vs. $1.24 per share as expected by analysts, according to Refinitiv.Revenue: $19.19 billion, vs. $18.05 billion as expected by analysts, according to Refinitiv.
Revenue was up slightly on an annualized basis in the quarter that ended on Sept. 28, according to a statement.
The company needs to improve its execution in multiple areas, including supply, CEO Bob Swan told analysts on a Thursday conference call.
"We expect our second-half PC client supply will be up double-digits compared to the first-half, and we expect to further increase our PC client supply by mid-to-high single-digits in 2020, but that growth hasn't been sufficient," Swan said. "We're letting our customers down and they're expecting more from us." Demand strength for PC chips is still outstripping supply, said the company's chief financial officer, George Davis.
The top business segment, the Client Computing Group, which sells processors for desktop PCs, laptops and two-in-one devices, produced $9.71 billion in revenue in the third quarter, beating the $9.59 billion average estimate among analysts polled by FactSet, although it was down 5% from the year-ago period. The company pointed to lower platform volume in the segment.
The next-largest business, the Data Center Group, which focuses on server chips, delivered $6.38 billion in revenue, above the $5.62 billion FactSet consensus estimate. The cloud portion of the segment returned to growth. Cloud providers ended a three-quarter capacity absorption cycle, Davis said.
The Internet of Things Group, which makes computing products for industries and embedded systems, had $1.23 billion in revenue. Analysts polled by FactSet had expected $1.12 billion in revenue from that segment.
Both Gartner and IDC said that PC shipments increased in the third quarter. Meanwhile, spending from companies with large data centers, like Amazon and Microsoft, started to bounce back in the period, both of which could have boosted Intel's sales, Matt Bryson of Wedbush Securities, who has the equivalent of a sell rating on Intel stock, told clients in a note this week.
But Intel is dealing with issues cutting into shipments of 14-nanometer chips, and the company has slashed prices as it continues to compete with AMD, Bryson wrote.
"From an intermediate to longer term perspective, we believe INTC's continued misexecution, whether in shorting certain Xeon customers, or PC OEMs/ODMs, should give those clients another reason to look more closely at AMD," he wrote.
Swan said on the conference call that the world had become more competitive.
"We're going to compete to protect our position and expand the role we play," he said.
Intel announced the second generation of Optane DC Persistent Memory in the third quarter and said that Apple had agreed to buy the majority of Intel's smartphone modem business in a deal valued at $1 billion.
Intel raised its full-year guidance to $4.60 in earnings per share, excluding certain items, on $71 billion in revenue, which implies 0.2% annualized revenue growth. Analysts polled by Refinitiv had expected $4.39 in earnings per share, excluding certain items, on $69.43 billion for 2019.
Intel stock is up 11% since the beginning of the year.
WATCH: Intel CEO reveals a roadmap for autonomous vehicles
VIDEO3:0003:00Intel CEO reveals a roadmap for autonomous vehiclesThe CNBC Conversation
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8f139ae62fe19ec6c1bebc60aeb8adea | https://www.cnbc.com/2019/10/24/is-amazon-primed-for-earnings-breakout-options-traders-arent-so-sure.html | Is Amazon primed for an earnings breakout? Options traders aren't so sure | Is Amazon primed for an earnings breakout? Options traders aren't so sure
VIDEO2:2102:21Options traders don't think earnings will pull Amazon out of the doldrumsOptions Action
Amazon heads into Thursday's earnings report deep in the weeds and in need of something for investors to get excited about.
The tech-slash-retail giant is down nearly 12% in the last three months, making it the worst performer among the FAANG (Facebook, Apple, Amazon, Netflix and Google parent Alphabet) stocks during that period. The name has languished since a mid-August plunge, and options traders aren't overly optimistic that Thursday's report will kick-start meaningful gains.
However, there is one interesting stat that may point to the possibility of a breakout.
"The options market is implying a move of about 4%, and that's less than the 4.7% or so that it has averaged over the course of the last eight quarters they've reported. They're going to be reporting their third quarter, which has historically been the most volatile," Optimize Advisors President Michael Khouw said Wednesday on "Fast Money." "Over the last 10 years or so, we're looking at an average move of about 9% during that period."
Of Amazon's last 11 third-quarter reports, six have pushed the stock into a positive move, with the largest being a 27% post-earnings surge in 2009.
But Wednesday's most eye-catching trade in the options market wasn't playing for a breakout, but rather attempting to thread the needle.
"We saw somebody buy 300 of the Oct. 25 weekly 1,795/1,800/1,805 call butterflies," Khouw said.
"They're basically targeting that middle strike, 1,800, and it has to be between the other two for this to be profitable. The thing is, they only spent about 16 cents for that, and it could be worth as much as $5. That would be a payout of about 30-to-1."
Since each options contract is worth 100 shares of stock, this trade could be valued at $484 per contract if Amazon does finish the week at $1,800, meaning this trader stands to gain nearly $150,000 if all goes according to plan.
"If you look back over the course of the last 10 years or so, this only would have worked out twice, but you still would have been profitable because you would have gotten that 30-to-1 payout the two times that it did work out," Khouw said.
Amazon was trading slightly higher in Thursday's session.
Disclaimer
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b8cf80921024e35fe38f86a540ae9bc5 | https://www.cnbc.com/2019/10/24/israeli-fashion-mogul-submits-bid-for-barneys-challenging-authentic-brands.html | Israeli fashion mogul submits bid for Barneys, challenging Authentic Brands | Israeli fashion mogul submits bid for Barneys, challenging Authentic Brands
A Barney's store in New York, August 6, 2019.Spencer Platt | Getty Images News | Getty Images
Israeli businessman Samuel Ben-Avraham said on Wednesday he has submitted an offer for Barneys New York, challenging a $271 million bid for the bankrupt luxury department store from brand developer Authentic Brands Group.
The retailer, which filed for bankruptcy in August, had been seeking proposals to best Authentic Brands. A deadline for competing bids was set for Wednesday evening.
It was not immediately clear that Barneys had deemed the offer a so-called qualified bid, meaning that it meets certain thresholds to be considered in a bankruptcy court auction set for Monday, the people said.
Ben-Avraham told Reuters he lined up investors to back his bid and has work to complete before the auction. The entrepreneur launched a social media campaign featuring images from TV shows "Sex and the City" and "Curb Your Enthusiasm" as part of his proposal.
Barneys and Authentic Brands did not immediately respond to requests for comment.
Ben-Avraham owns trade show companies and is also an investor in fashion label Kith, his LinkedIn profile shows. Additional details on his bid could not immediately be determined.
The sources could not be identified because they were not authorized to speak on the matter. Women's Wear Daily first reported on Ben-Avraham's offer.
Authentic Brand's offer calls for establishing Barneys shops in existing Saks Fifth Avenue stores. A handful of its brick-and-mortar outposts would also remain open, depending on negotiations with landlords, Reuters reported.
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fafc6ec942e4e3ae3aff19f7e0ea7b4d | https://www.cnbc.com/2019/10/24/japan-factory-activity-shrinks-at-quickest-pace-since-2016-in-october.html | Japan factory activity shrinks at quickest pace since 2016 in October | Japan factory activity shrinks at quickest pace since 2016 in October
An employee collects a molten vehicle part from a mold at an Asahi Tekko Co. factory in Nishio, Aichi Prefecture, Japan, on Wednesday, Aug. 1, 2018.Akio Kon | Bloomberg | Getty Images
Japanese factory activity shrank at the fastest pace in over three years in October, largely hurt by slumping new orders and output, in yet another sign of broadening economic cracks in the face of slowing global demand and trade frictions.
The weak reading adds to pressure on the government and the central bank to take steps to shield the economy from heightening risks to the outlook from a Sino-U.S. trade dispute, slowing global growth and a sales tax hike at home.
The Jibun Bank Flash Japan Manufacturing Purchasing Managers' Index (PMI) in October contracted at the quickest pace since June 2016, slipping to 48.5 on a seasonally adjusted basis from a final 48.9 in the previous month.
"Manufacturing new orders declined at the fastest rate in almost seven years as trade tensions and global economic weakness restricted exports," said Joe Hayes, economist at IHS Markit, which compiles the survey.
"That said, new business in the services economy exhibited a remarkable degree of resilience."
Key activity indicators in the survey cast a shadow over the manufacturing sector, and could add to calls on the Bank of Japan to step up stimulus at its Oct. 30-31 meeting.
Total new orders shrank at their fastest pace since December 2012, while factory orders and future output were also in contraction.
The batch of frail data pushed a composite index that includes both manufacturing and services into contraction for the first time since September 2016.
The Jibun Bank Flash Japan Composite PMI fell to 49.8 from a final 51.5 in the previous month.
The services sector index expanded at a markedly slower pace on shrinkage in outstanding business, hurt by a sales tax hike to 10% from 8% this month and a powerful typhoon that hit central and eastern Japan.
The Jibun Bank Flash Japan Services PMI fell to a seasonally adjusted 50.3 from the previous month's 52.8, marking the slowest pace of expansion since September last year.
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67b9413a98b90c14238623c877cbb242 | https://www.cnbc.com/2019/10/24/jeff-vinik-says-hes-ending-fund-because-investors-doubt-his-strategy.html | A star stock picker is closing his fund because investors told him that style doesn't work anymore | A star stock picker is closing his fund because investors told him that style doesn't work anymore
VIDEO8:0108:01Why Jeffrey Vinik shut down his hedge fund less than a year after its relaunchSquawk Box
Star stock picker and longtime money manager Jeffrey Vinik explained Thursday that he's shuttering his hedge fund because would-be investors balked at his investment strategy, a reluctance that ultimately capped how much his relaunched firm was able to raise.
"Long/short equity performance has not been good the last five to 10 years. So asset allocators are very leery of putting any money to work in that particular class," Vinik told CNBC's "Squawk Box."
"What we heard back continually was: 'We don't like this asset class, we're not putting money with long/short asset managers, we're not convinced that your style works,'" he added.
Vinik announced in a letter to investors on Wednesday that, less than one year after relaunching his hedge fund, he's closing the funds on Nov. 15. The manager had hoped to raise between $2 billion and $3 billion, but ultimately raised only about one-sixth of his goal.
In his letter, the fund manager explained to stakeholders that "it has been much harder to raise money over the last several months than I anticipated." Vinik said on Thursday that the lackluster fundraising was likely related to the underperformance of hedge funds versus the broader stock market in recent years.
Vinik's announcement earlier this week came just months after he told CNBC in January that he was relaunching his firm. Since then, however, Vinik Asset Management funds rose 4.8% on a net basis between March 1 and Sept. 30; the S&P 500 climbed 6.1% and returned 7.39% over the same period.
But Vinik told CNBC that he was happy with the performance this year and that's not why he had trouble raising funds. He said heightened standards imposed by modern asset allocators were part of the problem, who need to see a recent and stable track record of solid performance.
It's "very different than 10 years ago, 20 years ago. Just the process by which they vet managers and do their work was much longer, much more thorough than it was when I started in the business, where you know, literally I made the rounds in New York and a couple other places," he said Thursday.
Wall Street's increasing preference for quantitative strategies — based on computer models and algorithms — and passive investing can come at a cost for more traditional money managers like Vinik, who began their careers steeped in fundamental analysis and savvy stock picking.
The Wall Street regular cut his teeth managing Fidelity's Magellan Fund before opening Vinik Asset Management in the 1990s. Over a 17-year run spanning the mid-1990s to 2013, Vinik's fund returned 17% annually, according to The Wall Street Journal.
Quantitative funds have grown in favor in the hedge fund business, bringing in more money than the traditional funds like those from the likes of Vinik. Passive investing overall, fueled by the growth of exchange-traded funds blindly tracking indexes, is booming while old-fashioned stock pickers struggle.
VIDEO6:3106:31How to double your money in the marketInvest in You: Ready. Set. Grow.
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1b1193756e6bda35314c70fc6aafbc08 | https://www.cnbc.com/2019/10/24/nba-selects-utah-for-2023-all-star-philadelphia-could-be-on-the-radar.html | NBA All-Star Game returning to Utah in 2023 | NBA All-Star Game returning to Utah in 2023
Bojan Bogdanovic #44 of the Utah Jazz celebrates a play during an opening night game against the Oklahoma City Thunder at Vivint Smart Home Arena on October 23, 2019 in Salt Lake City, Utah.Alex Goodlett | Getty Images
PHILADELPHIA – The NBA All-Star Game is returning to Salt Lake City, Utah in 2023, the league announced on Wednesday.
Jazz owner Gail Miller joined NBA commissioner Adam Silver at a press conference on Wednesday to discuss selecting the city to host the 72nd annual game to be played at Vivint Smart Home Arena.
Silver called Salt Lake City "a world-class destination for large-scale events and sports competitions."
"I want to thank the Miller Family and the Utah Jazz organization for their commitment to hosting our All-Star festivities and to developing a program that will leave a lasting impact on the community," he said.
The last time Utah hosted the game at the Delta Center, Jazz legends and Basketball Hall of Famers, Karl Malone (28 points and 10 rebounds) and John Stockton (nine points and 15 assists) shared MVP honors as they led the Western Conference to a 135-132 win over the East.
Miller said that memory of that game remains "strong" but added, "We are excited to create new memories for this generation of NBA fans in a place that loves to celebrate basketball."
"The return of the NBA All-Star Game to Salt Lake City is a tremendous honor and an opportunity for us to welcome back the NBA family for one of basketball's biggest events," Miller said of the game, which will celebrate the 30th anniversary of the Feb. 21, 1993 All-Star Game played in the city.
According to Larry H. Miller Group of Companies CEO Steve Starks, Vivint Smart Home Arena recently completed a renovation totaling $125 million, which "focused on enhancing the guest experience.
"With the close proximity of the Salt Palace Convention Center and Huntsman Center as facilities, NBA fans will enjoy a dynamic downtown atmosphere," Starks said.
The 2020 All-Star Game will be held in Chicago at the United Center in February, followed by Bankers Life Fieldhouse in Indiana in 2021. And for the first time since 1997, the All-Star Game will return to Cleveland in 2022.
Another arena that is on the verge of completing an in-depth renovation is the Wells Fargo Center in Philadelphia, the home of the 76ers who opened the 2019-20 regular season with a 107-93 win over the Boston Celtics.
In September, the Philadelphia Business Journal reported Comcast Spectacor, which owns the building, completed phase four of the almost $300 million makeover, which included a 4K Kinetic scoreboard.
Amid those renovations, rumblings around the NBA suggest the Sixers and city officials could make a bid for the 2026 All-Star Game, but a decision to present a proposal to the NBA has not been made.
If a bid is submitted, Philadelphia could potentially host two major league all-star games in one year. The city is already set to host the MLB All-Star Game at Citzens Bank Park that year.
The last time the Philadelphia hosted the NBA All-Star Game was on Feb. 10, 2002. Sixers forward Tobias Harris, then age 9, attended the contest and said he remembers everything about the experience.
"It was a dream come true," Harris said after finishing with a double-double (15 points and 15 rebounds) in the victory.
Asked about the possibility of the game returning to Philadelphia in a few years, Harris said: "That would be fire. We would love to have it. I think the city deserves it, for sure. And I think it's cool that Utah got it, too.
"All-Star Games are big, especially for a city's economy," Harris added, "and for cities in general, and the excitement of the game. I think it would be awesome."
Festivities for the 2023 All-Star Weekend will commence on Feb. 17, with the game occurring on Sunday, Feb. 19. The NBA also announced the game would be televised on TNT, marking the 21st consecutive year the network will air the event.
Disclosure: Comcast is the owner of NBCUniversal, parent company of CNBC and CNBC.com.
VIDEO5:1605:16NBA insider prediction: Lakers or Clippers will face 76ers in finalsPower Lunch
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9300b1cab5bab988901410b9a2be6e1c | https://www.cnbc.com/2019/10/24/oil-markets-demand-outlook-in-focus.html | Oil posts 3rd straight day of gains | Oil posts 3rd straight day of gains
A drilling crew member on an oil rig in the Permian Basin near Wink, Texas. Nick Oxford | Reuters
Oil prices extended their gains on Thursday, with Brent rising above $61 a barrel as a surprise drop in U.S. crude inventories and the prospect of further market-supporting action by OPEC and its allies offset some concern over the outlook for demand.
Brent crude gained 55 cents to settle at $61.74 per barrel, having risen 2.5% on Wednesday.
West Texas Intermediate (WTI) crude rose 26 cents to settle at $56.23, adding to the previous session's 2.8% gain after data showed that U.S. inventories dropped by 1.7 million barrels last week.
"We feel that even minor supportive headlines on the trade front or geopolitical developments could prompt an exaggerated price response in a market in which net speculative WTI length had dropped into the red zone," Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.
U.S. Vice President Mike Pence on Thursday accused China of curtailing "rights and liberties" in Hong Kong in a wide-ranging critique of Beijing's behavior but also insisted that the United States does not seek confrontation or to "de-couple" from its main economic rival.
Pence delivered his second major policy address on China in just over a year, this one just ahead of a new round of talks aimed at resolving a bitter trade war between the world's two biggest economies.
The recent truce in the U.S.-China trade war is not an economic turning point and has done nothing to reduce the risk that the United States could slip into recession in the next two years, a Reuters poll of economists found.
In the latest sign of economic weakness, employment in Germany's private sector fell for the first time in six years in October, a survey showed.
Oil's gains on Wednesday were supported by the drop in U.S. crude inventories, and one analyst said stocks could fall further in coming weeks.
"The seasonal weakness in crude oil processing now appears to have come to an end, and processing should increase again," Commerzbank analyst Carsten Fritsch said.
Still, WTI time spreads have been pressured by continuing inventory builds in Cushing Oklahoma, the delivery point for U.S. crude futures.
Stockpiles at the hub rose by about 1.6 million barrels in the week through Oct. 22, traders said, citing data from market intelligence firm Genscape.
Brent prices, meanwhile, have risen 14% this year, supported by a supply pact among the Organization of the Petroleum Exporting Countries and its allies.
Since January OPEC, Russia and other producers have implemented a deal to cut oil output by 1.2 million barrels per day until March 2020 to support the market. The producers meet on Dec. 5-6 to review the policy.
Adding further price support, officials have said that extended supply curbs are an option to offset the weaker demand outlook for OPEC crude in 2020.
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022dfa2a5421483b5960f085bdc38b68 | https://www.cnbc.com/2019/10/24/servicenow-ceo-macro-headwinds-have-not-hurt-digital-spending.html | VIDEO2:4902:49ServiceNow CEO: Brexit, macro headwinds aren't stopping digital spendingMad Money with Jim Cramer
ServiceNow CEO John Donahoe told CNBC on Wednesday that the company is not seeing a decline in customer interest in digitization.
The outgoing chief, who is departing the software-as-a-service firm to become Nike CEO in January, said he completed a business trip in Europe where he discovered that enterprises aren't letting macroeconomic headwinds get in the way of investing in automating their operations.
"They aren't focusing on macroeconomics. They aren't focusing on Brexit," he said in an interview with "Mad Money's" Jim Cramer. "They're focusing on how can they deliver better experiences to their customers, better experiences for their employees and drive real productivity growth and service now is one of their core platforms that enable all three."
ServiceNow, which helps businesses automate their IT processes and office workflows, on Wednesday reported earnings of 99 cents per share on $885.8 million in revenue. Analysts had expected earnings of 88 cents on $885 million in revenue, according to Refinitiv consensus estimates.
"Cross-functional workflow is the wave of the future. That's what digitization enables," Donahoe said.
Cloud stocks have run into rough trading in the past three months after running a hot streak in the first half of 2019. The cohort has usually served as a safe sector to invest when markets are troubled by macro uncertainty.
ServiceNow's stock price has fallen more than $80 from its $302.31 closing high in July. The stock is still up more than 23% year to date.
Mike Wilson, chief U.S. equity strategist and chief investment officer at Morgan Stanley, has warned that software companies are not immune from declining corporate spending. Workday CEO Aneel Bhusri said at his software company's analyst day that management has seen some order delays.
Later in the interview, Donahoe reiterated that the companies he has spoken are still committed to the digital transformation. ServiceNow offers cloud services across information technology, customer service, human resources and security operations.
"The macroeconomics may go up and down over time. That's just a fact of life over time," Donahoe said. "What we're focused on and the real opportunity is technology is being used ... [to] drive unparalleled levels of productivity and efficiency. And as long as there is a return on investment, companies will keep making those investments and that's been the focus of Service Now."
VIDEO8:4208:42ServiceNow CEO: Brexit, macro headwinds aren't stopping digital spendingMad 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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0f3edf278f705196a78f1006fdcf106d | https://www.cnbc.com/2019/10/24/south-korea-gdp-grows-0point4percent-in-q3-slightly-missing-forecast.html | South Korea's third-quarter growth slows more than expected, exports show recovery signs | South Korea's third-quarter growth slows more than expected, exports show recovery signs
An A.P. Moeller-Maersk A/S container ship sits under construction at a Hyundai Heavy Industries Co. shipyard in Ulsan, South Korea.SeongJoon Cho | Bloomberg | Getty Images
South Korea's economy grew less than expected in the third quarter, and though exports showed signs of steadying the overall outlook was clouded by a domestic spending slump and intensifying global risks from trade frictions.
The Bank of Korea's advance estimates showed on Thursday the economy grew 0.4% during the July-September period on-quarter, down from a 1.0% rise in the second quarter and just missing a 0.5% gain forecast in a Reuters survey of 26 economists.
Exports rose 4.1% in the third quarter after a 2.0% gain in the second quarter, which reversed a successive run of contractions for two quarters. But private consumption grew just 0.1% and construction spending tumbled 5.2%.
Economists said exports, the most important driver of growth for Asia's fourth-largest economy, appeared to have clearly passed the trough, although a sure-footed recovery in the economy would require more policy support.
"Exports appear headed for a recovery from early next year but the economy needs more policy support, including more rate cuts as domestic demand remains very weak," said Oh Chang-sob, economist at Hyundai Motor Securities.
Over a year earlier, the economy grew 2.0%, bringing the average for the January-September period at 1.9%, down from a 2.6% gain for the same 2018 period and compared with the central bank's 2.2% growth projection for the whole of this year.
The trade-reliant economy has been among those worst-hit by cooling global demand as a prolonged U.S.-China tariff war disrupted world supply chains in a blow to business confidence and investment. A months-long trade spat with Japan has also added to strains on Korean exporters.
The government has responded with an extra $5 billion stimulus plan while the central bank has trimmed policy interest rate twice in three months to 1.25%, matching a record low seen until late 2017.
The Bank of Korea has left the door open to further easing although another cut is not expected soon. The next policy meeting, the last of 2019, is on Nov. 29.
The figures were released before the local financial markets started trading.
On Tuesday, President Moon Jae-in urged the parliament to approve the government's budget bill for next year, which proposes a 9.3% increase in spending from this year, saying it was time for fiscal policy to play the leading role.
"The global economy has worsened rapidly, and our economy, heavily trade-dependent, is also in a grave situation," Moon said.
South Korea's fiscal position remains strong in comparison to its global peers, with the government debt ratio at less than 40% of annual GDP versus more than 100% for many of the major economies.
Opposition parties and critics have also blamed the economic slowdown on the negative effects from some of President Moon's radical policies such as sharp minimum wage hikes and a harsh crackdown on home transactions in the capital.
Since taking office in May 2017, Moon's government has raised minimum wages by almost 30% in two years, sharply cut the maximum amount of mortgage loans that home owners can borrow and reduced the legal weekly work hours.
South Korea's economy now looks set to post growth of around 2% for the whole of this year, a median estimate of a Reuters poll taken this week showed, well below the 2.7% pace in 2018 and marking the worst in several decades excluding global or regional crisis-hit years.
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33bdf241b2a27c794ca388dfc4c2cbb9 | https://www.cnbc.com/2019/10/24/stocks-making-biggest-moves-midday-tesla-microsoft-ford-twitter.html | Stocks making the biggest moves midday: Tesla, Microsoft, Ford, Twitter, eBay & more | Stocks making the biggest moves midday: Tesla, Microsoft, Ford, Twitter, eBay & more
Microsoft CEO Satya Nadella speaks at the Digital-Life-Design conference in Munich, Germany, on January 16, 2017.Tobias Hase | picture alliance | Getty Images
Check out the companies making headlines in midday trading:
Tesla – Shares of Elon Musk's automaker climbed 17.8% in trading after Tesla reported third-quarter results that surprised Wall Street, delivering a profit of $1.86 a share. The stock's pop was one of its biggest in the past decade after the report, which also showed Tesla making faster than expected progress on building its highly anticipated factory in Shanghai.
Microsoft — Shares of the tech giant rose 2% on quarterly results that topped analyst expectations. Microsoft reported earnings per share of $1.38 on revenue of $33.06 billion. Analysts polled by Refinitiv expected a profit of $1.25 per share and sales of $32.23 billion. The beats were driven by a 59% surge in revenue for Azure, Microsoft's cloud business.
Ford – Shares of Ford tanked 6.6% after the automaker lowered its guidance for the rest of the year based on falling consumer demand, primarily in China. The automaker said it expects to make less profit than previously expected for the year, lowering its 2019 earnings guidance to between $6.5 billion and $7 billion. Deutsche Bank downgraded Ford to hold from buy following the announcement.
Twitter – Twitter shares had their worst day since February 2014, its second worst day of trading ever, after the company said advertising issues contributed to a sizable revenues miss in the third quarter. The stock dropped 20.8% after Goldman Sachs cut its price target on the company by more than 30%.
eBay – Shares of the e-commerce company dropped 9.1% after eBay reported quarterly results that saw the critical measure of gross merchandise value (GMV) fall for a third straight quarter. Even though eBay's results were slightly better than expected on the top and bottom lines, Wall Street analysts emphasized the company's earnings were unexceptional.
Dow – Shares of Dow rose 4.7% after the chemical company beat on the top and bottom lines of its third quarter results. Dow reported earnings of 91 cents on revenue of $10.764 billion. Wall Street expected earnings of 73 cents per share on revenue of $10.735 billion, according to Refinitiv.
3M – The industrial and consumer company's stock fell 4.1% after reporting worse-than-expected revenue, in addition to 3M's lowered forecast for both fourth quarter and fiscal year earnings.
PayPal – A break-out quarter for PayPal catapulted its stock up 8.6%. Total payment volume, a key metric for PayPal and its peers, came in at $178.7 billion, well ahead of expectations. It reported earnings per share of 61 cents versus 52 cents forecast.
Hershey – The consumer products giant's stock dropped 2.2% after Hershey reaffirmed its fiscal year earnings forecast between the range of $5.68 a share to $5.74 a share, below the $5.76 a share Wall Street analysts surveyed by FactSet expected.
– CNBC's Maggie Fitzgerald, Tom Franck and Fred Imbert contributed to this report.
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07e45fddbe2abd28eb01cd49ef1e6500 | https://www.cnbc.com/2019/10/24/stocks-making-the-biggest-moves-premarket-twitter-comcast-3m-dow-southwest-air-more.html | Stocks making the biggest moves premarket: Twitter, Comcast, 3M, Dow, Southwest Air & more | Stocks making the biggest moves premarket: Twitter, Comcast, 3M, Dow, Southwest Air & more
VIDEO0:5000:50Wall Street points toward modest gains at openMorning Report
Check out the companies making headlines before the bell:
3M – 3M earned an adjusted $2.58 per share for the third quarter, 9 cents a share above estimates. Revenue fell short of expectations, however, and 3M cut its full-year profit forecast as its results are hit by slowing demand in China and other markets.
Dow Inc. – The materials science company beat estimates by 18 cents a share, with adjusted quarterly profit of 91 cents per share. Revenue also topped forecasts, though sales were down 15% from a year earlier on lower prices.
Twitter – Twitter fell 3 cents a share shy of consensus, with adjusted quarterly profit of 17 cents per share. Revenue also missed estimates. Twitter reported 145 million daily active users during the quarter, better than Wall Street had anticipated, but it also gave weaker-than-expected current-quarter revenue guidance.
Comcast – The NBCUniversal and CNBC parent reported adjusted profit of 79 cents per share, 4 cents a share better than analysts' forecasts. Revenue also beat expectations, helped by robust additions of high-speed internet customers.
American Airlines – The airline came in 2 cents A share above estimates, with quarterly profit of $1.42 per share. Revenue came in essentially in line with forecasts. American put the cost of the 737 Max grounding at $140 million for the quarter, bringing the total to $540 million.
Southwest Airlines – Southwest earned $1.23 per share for the third quarter, 15 cents a share above estimates. Revenue was in line with forecasts. Strong demand and higher fares helped offset the negative impact of the 737 Max grounding.
Stanley Black & Decker – The toolmaker reported adjusted quarterly earnings of $2.13 per share, 10 cents a share above estimates. Revenue was slightly below forecasts, however, and the company cut its full-year earnings forecast as it implements a cost-cutting program designed to save $200 million per year.
Microsoft – Microsoft reported earnings of $1.38 per share, 13 cents a share above estimates. Revenue also beat Wall Street forecasts, however the company's Azure cloud services grew more slowly during the quarter.
VIDEO6:3106:31How to double your money in the marketInvest in You: Ready. Set. Grow.
Ford Motor – Ford came in 8 cents a share ahead of estimates, with adjusted quarterly profit of 34 cents per share. The automaker's revenue was slightly below forecasts, and Ford reduced its full-year profit forecast on lower-than-expected China sales as well as higher warranty and incentive expenses.
Johnson & Johnson – J&J cut its previously reported third-quarter profit by $3 billion, to account for the proposed opioid settlement announced earlier this week. However, its adjusted earnings numbers reported earlier remain the same.
Las Vegas Sands – Las Vegas Sands matched Street forecasts, with adjusted quarterly earnings of 75 cents per share. The casino operator's revenue was on the light side of projections, however, pressured by the impact from the U.S.-China trade dispute, which is affecting its Macau operations.
PayPal – PayPal beat Street forecasts by 9 cents a share, with adjusted quarterly profit of 61 cents per share. The payment service's revenue was also above estimates. Payment volume came in above forecasts, and PayPal raised its full-year outlook.
EBay – EBay reported adjusted quarterly earnings of 67 cents per share, 3 cents a share above estimates. Revenue came in slightly above forecasts. The e-commerce company forecast current-quarter revenue that is below Street estimates, however, amid increasing online competition.
Tesla – Tesla reported an adjusted profit of $1.86 per share, surprising analysts who had been predicting a loss of 42 cents per share. Revenue was slightly short of estimates, but the automaker's bottom line was helped by cost cuts and record deliveries.
GlaxoSmithKline – The British drugmaker won U.S. Food and Drug Administration approval for wider use of its ovarian cancer drug Zejula.
Spirit Airlines – Spirit reported adjusted quarterly profit of $1.32 per share, 9 cents a share above estimates. The airline's revenue also came in above Street forecasts. The beat came despite a negative impact from Hurricane Dorian during the quarter. Spirit also gave an upbeat current-quarter outlook.
Align Technology – Align beat estimates by 14 cents a share, with adjusted quarterly earnings of $1.28 per share. The maker of Invisalign dental braces also reported revenue that was above estimates. Align issued better-than-expected revenue guidance for the current quarter.
General Motors – Workers at GM's Flint, Michigan plant voted to approve the tentative labor agreement announced last week. The positive vote at GM's second-largest plant could be an indication that a strike could soon end, with workers across the nation currently in the process of voting on the agreement.
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4c46afd86eb43714a1a40eae0a72f643 | https://www.cnbc.com/2019/10/24/student-loan-official-resigns-calling-for-massive-debt-cancellation.html?__source=OTS%7Cfinance%7Cinline%7Cstory%7C&par=OTS&doc=106862879 | Trump administration official resigns, calls for massive student debt forgiveness | Trump administration official resigns, calls for massive student debt forgiveness
A. Wayne JohnsonMirco Lazzari gp | Getty Images
A senior government official appointed by Education Secretary Betsy DeVos resigned Thursday, saying the current student loan system is "fundamentally broken" and calling for billions of dollars in debt to be forgiven.
A. Wayne Johnson was hired as the chief operating officer of the Office of Federal Student Aid, which manages the country's $1.6 trillion outstanding student loan portfolio. He later worked in a strategic role, directing how student loans are serviced for borrowers.
Just last week, DeVos called Democrats' plans to erase student debt "crazy."
"Who do they think is actually going to pay for these?" DeVos said in an interview on Fox News.
Johnson told The Wall Street Journal he reached his conclusion after watching climbing defaults and realizing that a majority of student debt will never be repaid.
Indeed, five years into repayment, half of student loan borrowers haven't paid even $1 toward their debt's principal, according to the Education Department's own data. And 40% of student loan borrowers could default by 2023, according to an analysis by the Brookings Institution.
"We run through the process of putting this debt burden on somebody … but it rides on their credit files — it rides on their back — for decades," Johnson, who wrote his dissertation at Mercer University on student debt, told the Journal.
"The time has come for us to end and stop the insanity," he added.
Johnson proposes forgiving $50,000 in student debt for all borrowers, about $925 billion, according to the newspaper. For people who've already repaid their debt, he suggests offering them a $50,000 tax credit. The plan would be paid for with a 1% tax on corporate earnings.
At the same time, Johnson announced he'd be running for an open Senate seat in Georgia.
VIDEO1:4201:42Trying to get student loans forgiven? Here are some helpful resourcesInvest in You: Ready. Set. Grow.
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"Wayne Johnson got an inside look at how student loans are hurting borrowers, and he could not deny the evidence: America's student loan program is a massive failed experiment that is hurting borrowers and our economy," said Julie Margetta Morgan, a fellow at the liberal Roosevelt Institute.
Johnson joins a chorus of government officials and presidential contenders calling for student debt cancellation.
Sen. Elizabeth Warren, D-Mass., has proposed canceling $640 billion of the debt. Sen. Bernie Sanders, I-Vt., said he'd erase all $1.6 trillion of it. At a recent campaign event, Sen. Kamala Harris, D-Calif., hinted that she'd be rolling out a plan to forgive the student loan debt of families who earn less than $100,000 a year.
"Johnson's plan is more expensive than Warren's but less expensive than Sanders,'" said Mark Kantrowitz, a higher education expert.
Yet Johnson stands apart from the others in a more critical way. "It's the first Republican support for widespread student loan forgiveness," Kantrowitz said. "That makes it a bipartisan issue."
VIDEO2:3302:33Bernie Sanders unveils bill to cancel all Americans student loan debtNews Videos
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2634dccac7c15ed00615fe894eb03a5e | https://www.cnbc.com/2019/10/24/tevas-proposed-opioid-settlement-could-cost-drugmaker-pennies-on-the-dollar.html | Teva's proposed opioid settlement could cost drugmaker pennies on the dollar | Teva's proposed opioid settlement could cost drugmaker pennies on the dollar
Teva Pharmaceutical's proposed $23 billion drug giveaway to settle thousands of U.S. opioid lawsuits will likely cost the company a fraction of that figure due to how it has valued those medicines, according to a Reuters review of pricing data and industry analysts.
When Teva announced the value of the donated medicine — a generic version of opioid addiction treatment Suboxone — it based the figure on the drug's list price, which does not account for significant discounts routinely provided by the drugmaker.
If based on the estimated cost to manufacture the drugs, the value could be as low as $1.5 billion, drug pricing consultants and industry analysts say. A Teva spokeswoman declined to comment on the cost analysis for generic Suboxone, a combination of buprenorphine and the opioid reversal agent naloxone.
An employee collects newly-manufactured pills at the tablet production plant at Teva Pharmaceutical Industries headquarters in Jerusalem, Israel.Adam Reynolds | Bloomberg | Getty Images
In interviews with Reuters, lawyers representing local governments in the opioid litigation said the figure proposed by Teva inflates the real value of the drugs. They said the proposal will not be enough to address a nationwide addiction crisis that has claimed some 400,000 lives over the last two decades.
The deal is "overvalued to make the settlement look better," said Hunter Shkolnik, a lawyer on the plaintiffs' executive committee that is managing more than 2,300 federal lawsuits consolidated in the U.S. District Court in Cleveland.
"I don't believe a no-cash payment from Teva, one of the largest generic manufacturers in the world, is appropriate," he told Reuters.
Israel-based Teva is looking to reach a nationwide settlement over its role in selling opioid painkillers, together with drugmaker Johnson & Johnson and the three largest U.S. drug distributors, AmerisourceBergen, Cardinal Health, and McKesson.
Negotiations between these companies and four state attorneys general leading the talks on behalf of their counterparts have focused on a total settlement value worth about $48 billion, including cash and free medicines.
On Monday, Teva signaled progress in talks over its contribution aimed at directly helping addiction victims of this major public health crisis. Attorneys general of the four states had agreed on a proposed settlement under which Teva would provide $23 billion worth of generic Suboxone and pay $250 million in cash over 10 years, the company said.
Teva said the donated drugs should meet most of the currently estimated U.S. patient need for the next decade.
The free drugs in lieu of cash would also help Teva avoid adding new debt to its balance sheet at a time that it is struggling to return to growth.
Teva shares rose 8% after it disclosed details of the proposed settlement.
The company denies any wrongdoing in its sale of opioids, saying it did not actively promote its generic versions of the painkillers with doctors. Many of the current lawsuits accuse drugmakers of aggressively marketing the medicines in a way that downplayed their potential addiction risk.
Scrutiny of Teva's proposed settlement followed the company's disclosure on Monday that it would use a benchmark called wholesale acquisition cost (WAC) to determine the value of the drugs provided for free.
WAC — frequently referred to as the list price of a drug — does not include discounts or rebates and is often several times higher than what patients actually pay at the pharmacy.
"WAC cannot be trusted as a pricing benchmark for generic drugs," said Eric Pachman, founder of pharmaceutical consultancy 3 Axis Advisors.
According to 3 Axis data, Teva's list price for its generic Suboxone ranged from 3 to 5 times what retail pharmacies paid, on average, for it in August. And that price represents a premium over the company's manufacturing costs.
Jefferies analyst David Steinberg estimated that the cost of the donated drugs would be around $1.5 billion, while Bernstein analyst Ronny Gal suggested they could cost about $2.3 billion to produce. JP Morgan analyst Chris Schott's estimate of manufacturing costs for generic Suboxone was higher, ranging from $5.75 billion to $9.2 billion, still a long way from the company's projected $23 billion value.
Avoiding significant cash costs is important for Teva, which is working to pay down nearly $27 billion in net debt, a legacy of its ill-timed 2016 purchase of Allergan Plc's generic drugs business Actavis generics. The profit margin for generic drugs has fallen sharply since.
Ori Hershkovitz, an independent consultant to pharmaceutical companies, previously held a mostly short position in Teva while at Nexthera Capital, a New York-based healthcare-focused investment firm.
Teva's proposed settlement, if accepted, should help allay investor concerns over the opioid cases, Hershkovitz said. But he still doubts the company will be able to correct its most fundamental problems.
"The high debt load and the situation in the generics market will make it impossible to repay this debt," he predicted. "They might have won the opioid battle but they are going to lose the overall war."
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d9f61e138ed197e087a3dfa3f6a4fde3 | https://www.cnbc.com/2019/10/24/weekly-jobless-claims.html | US weekly jobless claims unexpectedly fall | US weekly jobless claims unexpectedly fall
A New York Department of City Administrative Services representative, left, speaks with job seekers during a Catalyst Career Group job fair in New York.Caitlin Ochs | Bloomberg | Getty Images
The number of Americans filing applications for unemployment benefits unexpectedly fell last week, pointing to a still-tight jobs market even as hiring and economic growth have slowed.
Initial claims for state unemployment benefits declined 6,000 to a seasonally adjusted 212,000 for the week ended Oct. 19, the Labor Department said on Thursday. Data for the prior week was upwardly revised to 218,000.
Economists polled by Reuters had forecast claims edging higher to 215,000 in the latest week. The Labor Department said no states had claims estimated last week.
The overall decrease was despite an ongoing strike by about 48,000 workers at General Motors. While striking workers are not eligible for unemployment benefits, the work stoppage has affected production, impacting non-striking employees at suppliers.
The United Auto Workers union reached a tentative agreement with the Detroit automaker last week on a new four-year-contract but will remain on strike until members complete a vote on the proposal by Friday.
The four-week moving average of initial claims, considered a better gauge of labor market trends as it irons out week-to-week volatility, declined 750 to 215,000 last week.
The claims report also showed the number of people receiving benefits after an initial week of aid fell 1,000 to 1.682 million for the week ended Oct. 12. The four-week moving average of the so-called continuing claims increased 6,500 to 1.677 million.
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2eb0f8fcd4191f3fbd1c599dc4495e54 | https://www.cnbc.com/2019/10/24/what-happened-to-the-stock-market-thursday-3m-rains-on-microsoft-parade.html | Here's what happened to the stock market on Thursday | Here's what happened to the stock market on Thursday
The Dow fell 28.42 points, or 0.11% to 26,805.53. The S&P 500 gained 0.19% to close at 3,010.29. The Nasdaq Composite advanced by 0.81% to 8,185.80. A mixed bag of corporate earnings led to a directionless session for the major indexes.
Shares of 3M fell more than 4% after the company cut its full-year earnings guidance. The stock's losses pressured the Dow for most of the session and outweighed positive results from Microsoft. The tech giant climbed nearly 2% after reporting earnings and revenue that topped analyst expectations. Microsoft's results were driven in part by strong sales from the company's cloud business. Wall Street digested these results — along with reports from Twitter, Tesla, and Dow Inc — during the busiest day of the earnings season.
Twitter's stock tumbled more than 20% on earnings that missed analyst expectations. The social media company said it faced product issues along with advertising "headwinds" during the previous quarter. Meanwhile, Tesla surged more than 17% after the electric car maker posted a surprise profit.
Investors will keep an eye on how Amazon shares react to the e-commerce giant's quarterly results. Wall Street will also digest consumer sentiment data for October. Read more here.
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37c6e81e43d8248dec7548edff90c915 | https://www.cnbc.com/2019/10/24/your-investments-may-tilt-democrat-or-republican-and-that-can-cost-you.html | Your investments may tilt Democrat or Republican, and that can cost you | Your investments may tilt Democrat or Republican, and that can cost you
Hill Street Studios | Getty Images
Even if you're still deciding how you're going to vote next Election Day, you could already be taking political sides with your investments.
New research examines whether mutual fund managers put more money in companies that are led by executives who share their political ideologies or party affiliations.
And the answer to that question is yes, the researchers found.
That's according to Yaoyi Xi, assistant professor of finance at San Diego State University's Fowler College of Business, and M. Babajide Wintoki, professor of finance at the University of Kansas School of Business.
"There is a consistent pattern that fund managers are likely to invest more in firms with leadership that have ideology that's similar to theirs," Xi said.
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Retail investors, consequently, may not always be fully aware of what they're buying.
The research looked at the managers of 1,298 actively managed mutual funds, as well as executives of 16,655 companies.
They then compared how those individuals donated to political campaigns from 1990 through 2016, based on data from the Center for Responsive Politics. That data was used to determine the fund managers' and executives' political leanings based on their net donations.
In comparing the data, the researchers found that fund managers who leaned Republican were more highly allocated toward companies that veered the same way — about 8% higher in the average share of total net assets — compared with Democratic-leaning fund managers.
Meanwhile, Republican-leaning fund managers invested 3% less of their total net assets in Democrat-oriented companies compared with Democratic-leaning fund managers.
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Admittedly, not all fund managers have a political bias. But when they do, those leanings can be expensive, the research found.
"Mutual funds with higher levels of partisan bias do not outperform those with less bias, and may even suffer from slightly worse fund performance," the research said.
That can also be costly for individual investors, according to the research.
"Funds with more partisan bias perform slightly worse than those with less bias, and have significantly inflated fund idiosyncratic risks," the research said.
There are multiple reasons these biases can crop up.
Individuals have preferences, life experiences, and one of those preferences that may affect their decision-making is partisan bias.M. Babajide Wintokiprofessor of finance, University of Kansas School of Business
One is social psychology. That is, people tend to have positive views of individuals with similar beliefs to their own.
Fund managers and company executives who have similar political views are also more likely to interact with each other, through social clubs and other channels, the research said. They also are likely to live in the same geographic areas.
Consequently, individual investors need to beware when choosing between actively managed funds and index funds.
"We just want to raise awareness that actively managed funds have a lot more decision-making as to what goes into the portfolio that's swayed by individual managers," Wintoki said. "Individuals have preferences, life experiences, and one of those preferences that may affect their decision-making is partisan bias."
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17348833aa88177b869788b3045ce8e3 | https://www.cnbc.com/2019/10/25/amazon-falls-after-missing-on-earningswhat-6-experts-are-watching-now.html | Amazon falls further after missing on earnings — here's what 6 experts are watching now | Amazon falls further after missing on earnings — here's what 6 experts are watching now
VIDEO4:1404:14Amazon shares drop after earnings miss on bottom line—Here's what six experts say to watch nowTrading Nation
It wasn't exactly a prime showing.
Amazon shares fell as much as 9% in after-hours trading Thursday following its third-quarter earnings report, with the stock recovering to a 1.3% loss by Friday afternoon.
The move was in part due to Amazon's return to investing heavily in its business, which weighed on profitability.
Despite the initial plunge, experts don't think Amazon's next quarter — for which the e-commerce giant issued weaker-than-anticipated guidance — will play out as badly as feared.
Here's what six of them said about the report:
Tuna Amobi, industry analyst at CFRA, said Amazon's meaningful investment boost was something his firm "could live with":
"This part quarter, [Amazon] spent $9 billion on shipping. This current Q4, they're guiding for one-day delivery alone to impact the results by $1.5 billion, which is double what we saw in the third quarter. So, the trend line continues to increase. … The one-day delivery that we're seeing, I think, the data points that we see, kind of reassure us that it's actually the right step for the long term. Prime members are ordering more in terms of volumes, as well as value of the order, and the long-term economics of the one-day delivery so far seem to have justified the ratcheted investments that we're seeing. So, yes, the return to a heavy investment cycle is something that we can live with."
Karen Finerman, co-founder and CEO of Metropolitan Capital Advisors, didn't find the stock particularly attractive, but she didn't think the earnings results changed the story:
"Spend, spend, spend, right? They can afford to do it. … I don't think, if you're a bull and that's part of your thesis on the story, that anything that came out right now should change that. And they gave this guidance of [$]80 to [86.5] billion; that is an enormous range. So, they're just kind of throwing that out there. I wouldn't read that much into that as well. So, it's too expensive for me. This doesn't really change it [to], 'Oh, now it's in the range of excellent value,' so, it's not really my thing, but the thesis is intact."
D.A. Davidson analyst Tom Forte said there was more to like in Amazon's report than people might think:
"I definitely think you're seeing better performance out of Microsoft and then, to a lesser extent, out of Google, so it is a tougher competitive set for cloud. On the profit side, though, they still had more than $4 a share in earnings, and the three big profit drivers besides [Amazon Web Services] as one are advertising and mix of third-party retail. So, yes, the deceleration sequential for cloud is concerning, but it's still a big profit driver along with third-party retail and advertising, and you still had four bucks-plus a share in earnings."
Gene Munster, managing partner of Loup Ventures, said Amazon upping its investments was "absolutely" the right move:
"How do I view it? It is absolutely the right thing for them to be in this investment mode. It's the right thing for them to push for consumers to think even more broadly about their wallet versus Amazon, and one day, as a powerful proposition around that. But ultimately, you need to continue to grow that base of Prime users. About two-thirds of the U.S. has Prime memberships. Now, ultimately, that could probably go to 75%. So, there is some room for upside. But it does get more difficult to continue to climb, and I think this all circles back to the core underlying question, which is what's the multiple you pay for that growth outlook? And my belief is we're probably fairly valued right now."
Strategic Wealth Partners CEO Mark Tepper shared what he was telling his firm's clients:
"This is one of our core holdings. I would look at this as a buying opportunity, so, I would expect probably a call from a client or two … to try and figure out what's going on. And, basically, what I'm going to tell them is a few things. No. 1, the weak guidance is pretty typical for Amazon. They are notorious for sandbagging their holiday projections and then just blowing right through them. Right now, they are investing from a position of strength, right? They've got a significant competitive advantage and they're spending money right now to continue to strengthen that competitive advantage, and it's still too cheap given the growth that this thing offers over the course of the next few years. I think fair value's [$]2200 to 2400 on Amazon."
Jefferies analyst Brent Thill said Amazon is notorious for under-selling its forecasts:
"Good Q3, bad Q4 guide. Again, the big investment in one-day deliveries really weighing on the story. There's no way they can offset these expenses. It's manual. You can't deliver packages any quicker or more efficiently, so many of the logistics experts continue to point to short term. There's a big investment mode. Amazon was going through harvest mode showing earnings upside, and now we're back into investment mode, and I think many investors are saying, 'Wait and see until they get out of this investment mode for these current investments to pay off.' Remember, typically, Amazon's pretty conservative. They did beat the top line and bottom line this quarter relative to our numbers, but, effectively, they've always given pretty conservative guidance, so our belief is that they'll surpass what they typically say. But that's going to continue to weigh on the short term given the investments they're making."
Disclaimer
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222645bd942e70cee8d8ef93dabd79d1 | https://www.cnbc.com/2019/10/25/an-intelligent-office-could-change-the-way-we-work.html | In Finland, an 'intelligent' office could change the way people think about working | In Finland, an 'intelligent' office could change the way people think about working
VIDEO2:1002:10An 'intelligent' office could change the way people think about workingSustainable Energy
From desk-based lunches and family photos pinned on walls to hours spent working overtime, the buildings we work in can often resemble a second home. Whether this is a good or bad thing is open to debate, but one thing is for sure: the way an office space is designed — and the technology used within that space — can impact the wellbeing, happiness and productivity of a workforce.
In Finland, one firm has designed what it describes as an "intelligent head office." Opened in late 2016, Tieto's re-designed headquarters near Helsinki boasts a platinum Leadership in Energy and Environmental Design certificate. Tieto's Jyri Kivinen said the digital space the firm had built on top of infrastructure meant it could "now monitor the wellbeing of the people, see the people flows and the utilizations of different floors." The company's Tieto Empathic Building solution uses smart technology to provide a wealth of information on the office environment. Using an on-screen interface, employees can find free workstations, find out where their colleagues are and search for work spaces based on air quality, temperature and noise. Kivinen said that the biggest issue when trying to make buildings more sustainable was "the current infrastructure, the current hardware that is installed in these buildings." "They have been implemented throughout several decades so the systems usually don't actually already communicate with each other," he added.
These developments might have a futuristic feel, but how realistic is it to create a human-centric building that is able to improve the well-being of people inside it? "It absolutely is," Derek Clements-Croome, an emeritus professor at the University of Reading, told CNBC. "We … are sensory beings, we live through our senses: the look and feel of the place, the colors, the air, the views out of the windows," he added. "All of these things have an effect on our emotions, our physical being, our general positive outlook in the daily life that we lead."
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fecadca764c812e391ecc50a334e4cc9 | https://www.cnbc.com/2019/10/25/asia-markets-oct-25-us-china-trade-and-brexit-deal.html | Asia markets mixed as investors search for guidance on trade and Brexit | Asia markets mixed as investors search for guidance on trade and Brexit
Asia markets traded mixed on Friday as investors searched for guidance on developments in the U.S.-China trade war and in the U.K.'s planned departure from the European Union.
The Nikkei 225 in Japan eked out a 0.22% gain to close at 22,799.81 while the Topix index added 0.29% to 1,648.44.
In South Korea, the Kospi index erased earlier losses to rise 0.11% to 2,087.89. Shares of major chipmaker SK Hynix jumped 3.63%.
The company revealed third-quarter earnings on Thursday where revenue fell 40% on-year and net profit was down 89% for the same period. Still, revenue rose 6% from the previous quarter due to signs of demand recovery and pricing in the memory chip market.
Rival Samsung Electronics traded up 0.39%. The world's largest smartphone and chipmaker is due to release official earnings on Oct. 31, but previously in guidance said it expects operating profit to drop by more than half from a year ago.
Chipmakers have struggled in an environment where price and demand for memory chips have been low for almost a year due to inventory adjustments and a supply glut.
Australia's benchmark ASX 200 rose 0.68% to 6,739.20, with most sectors advancing. In Hong Kong, the Hang Seng index dropped 0.36% in late-afternoon trade.
Chinese mainland markets erased early losses to climb in the afternoon: The Shanghai composite rose 0.48% to 2,954.93, the Shenzhen composite reversed losses to trade up 0.99% at 1,632.40 and the Shenzhen component index advanced 1.1% to 9,660.44.
Overall, MSCI's broadest index of Asia-Pacific shares outside Japan was flat in the afternoon.
Friday's session followed a mixed finish in the U.S. overnight where the S&P 500 posted a slight gain on one of the busiest days of the earnings season.
U.S. Vice President Mike Pence delivered a speech Thursday on the future of the relationship between the United States and China. In prepared remarks, Pence said Washington "does not seek confrontation with China," nor does it want to "contain China's development."
Still, Pence criticized Beijing's construction of a "surveillance state," and "increasingly provocative" military action, as well as its handling of the protests in Hong Kong, Reuters reported.
"Market fear was that the speech would be a 'bad cop' speech that derailed progress on a US-China trade deal," Tobin Gorey, an agricultural commodities strategist at the Commonwealth Bank of Australia wrote in a morning note. "We thought that unlikely despite this US administration often being tagged as somewhat chaotic."
Gorey explained that the real target of Pence's speech was the "domestic political debate."
The Trump administration is currently negotiating with Beijing to pen down a trade agreement that would address issues including trade deficits, intellectual property theft, and forced technology transfers.
Elsewhere, the European Central Bank kept its policy rates unchanged and kept its forward guidance that suggested the bank's main interest rates will remain at their current or lower levels until there's strong evidence of a pick-up in prices. It was also ECB President Mario Draghi's last monetary policy meeting at the institution.
The euro traded at $1.1105, slightly off from an earlier high of $1.1112.
U.K. Prime Minister Boris Johnson, meanwhile, has said he will give lawmakers more time to study his Brexit deal but only if they agree to a general election on Dec. 12. Following this week's developments, where lawmakers agreed in principle to Johnson's plans but rejected the limited timeframe to review legislation, the U.K. is unlikely to depart the European Union by the previous deadline of Oct. 31.
The EU is currently deciding how long an extension it wants to give the U.K. for membership while it attempts to agree on a withdrawal deal among its lawmakers.
The British pound was fractionally lower at $1.2844 from its previous close at $1.2850.
"So against a slightly risk off backdrop with renewed Brexit uncertainty, downbeat EU economic outlook and a firm position from the US on China, the (dollar) has regained a bit of its mojo," Rodrigo Catril, senior foreign-exchange strategist at the National Australia Bank, wrote in a morning note.
The dollar index, which measures the greenback against a basket of its peers, traded at 97.675, about 0.05% higher than its previous close.
The Japanese yen, considered a safe-haven asset, changed hands at 108.63 per dollar, while the Australian dollar traded at $0.6825.
Oil prices declined Friday during Asian hours: Global benchmark Brent fell 0.16% to $61.57 per barrel while U.S. crude futures were also down 0.27% at $56.08.
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0a9ac62f1a884e2fdb70094d961f886f | https://www.cnbc.com/2019/10/25/china-accuses-pence-of-lies-and-arrogance-in-blistering-broadside.html | China accuses Pence of 'lies' and 'arrogance' in blistering broadside | China accuses Pence of 'lies' and 'arrogance' in blistering broadside
U.S. Vice President Mike Pence announces the Trump Administration's plan to create the U.S. Space Force by 2020 during a speech at the Pentagon August 9, 2018 in Arlington, Virginia.Chip Somodevilla | Getty Images
A senior Chinese official issued a scathing rebuke of Mike Pence on Friday, calling the vice president a liar after he said Beijing was muzzling American businesses and violating the rights of protesters in Hong Kong.
"His remarks are full of arrogance, prejudice, critical biases and lies," China's foreign ministry spokeswoman Hua Chunying said during a press conference in Beijing.
The efforts to "smear" China were an attempt to distract from problems in the U.S. such as gun control and wealth inequality, Hua added.
At the Wilson Center in Washington, D.C., on Thursday, Pence accused China of "coercing corporate America" by silencing companies, think tanks, scholars and government officials.
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The vice president specifically pointed to American company Nike, which he said removed Houston Rockets merchandise from its stores in China after the government there expressed outrage over a National Basketball Association general manager tweeting his support for Hong Kong protesters.
NBA players and owners also "lose their voices" when it comes to discussing China and act as a "subsidiary of the authoritarian regime," he said.
The spat comes amid a simmering trade war between China and the U.S. that includes accusations that China steals or coerces foreign firms to hand over sensitive technology.
On Oct. 14, President Donald Trump said without providing evidence that China had "already begun" making large purchases of U.S. agricultural products as part of last week's tariff deal with Beijing. This followed his announcement of a partial agreement between Washington and Beijing, which Trump called a "substantial phase-one deal" that would take three to five weeks to write.
While Trump is optimistic that the trade war will be resolved, reaching an agreement will be difficult if China continues to use violence against protesters in Hong Kong, Pence said Thursday.
Continuing to attack the Communist Party's governance, Pence said China was "suppressing religion" and existing as a "surveillance state" that targets ethnic minorities.
On Friday, Hua said Americans should "look themselves in the mirror to fix their own problems and get their house in order" before making accusations about other countries.
From imposing sanctions on other countries to withdrawing from international groups, Hua said, "The U.S. has already abandoned its morality and credibility."
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dc04a82aa80e8d80469d2174057fbc97 | https://www.cnbc.com/2019/10/25/china-to-ask-us-to-remove-tariffs-in-exchange-for-agriculture-buys-in-talks-friday-sources.html | China to ask US to remove tariffs in exchange for agriculture buys in talks Friday: Sources | China to ask US to remove tariffs in exchange for agriculture buys in talks Friday: Sources
Top U.S. and Chinese trade officials will discuss plans on Friday for China to buy more U.S. farm products, but in return, Beijing will request cancellation of some planned and existing U.S. tariffs on Chinese imports, people briefed on the talks told Reuters.
Robert Lighthizer, the United States Trade Representative, U.S. Treasury Secretary Steven Mnuchin, and Chinese Vice Premier Liu He will speak by telephone Friday, their latest attempt to calm a nearly 16-month trade war that is roiling financial markets, disrupting supply chains, and slowing global economic growth.
The two sides are working to try to agree on a text for a "Phase 1" trade agreement announced by U.S. President Donald Trump on Oct. 11, in time for him to sign it with China's President Xi Jinping next month at a summit in Chile.
So far, Trump has only agreed to cancel an Oct. 15 increase in tariffs on $250 billion in Chinese goods as part of understandings reached on agricultural purchases, increased access to China's financial services markets, improved protections for intellectual property rights and a currency pact.
But to seal the deal, Beijing is expected to ask Washington to drop its plan to impose tariffs on $156 billion worth of Chinese goods, including cell phones, laptop computers, and toys, on Dec. 15, two U.S.-based sources told Reuters.
US Treasury Secretary Steven Mnuchin (R) and US Trade Representative Robert Lighthizer (L) greet Chinese Vice Premier Liu He (C) as he arrives for trade talks at the Office of the US Trade Representative in Washington, DC, October 10, 2019. (Saul Loeb | AFP | Getty Images
Beijing also is likely to seek the removal of 15% tariffs imposed on Sept. 1 on about $125 billion of Chinese goods, one of the sources said. Trump imposed the tariffs in August after a failed round of talks, effectively setting up punitive duties on nearly all of the $550 billion in U.S. imports from China.
"The Chinese want to get back to tariffs on just the original $250 billion in goods," the source said.
Derek Scissors, a resident scholar and China expert at the American Enterprise Institute in Washington, said the original goal of the early October talks was to finalize a text on intellectual property, agriculture and market access to pave the way for a postponement of the Dec. 15 tariffs.
"It's odd that (the president) was so upbeat with Liu He and yet we still don't have the Dec. 15 tariffs taken off the table," Scissors said.
U.S. Treasury Secretary Steven Mnuchin said last week said no decisions were made about the Dec. 15 tariffs but added: "We'll address that as we continue to have conversations."
If a text can be sealed, Beijing in return would exempt some U.S. agricultural products from tariffs, including soybeans and wheat and corn, a China-based source told Reuters. Buyers would be exempt from extra tariffs for future buying and get returns for tariffs they already paid in previous purchases of the products on the list.
But the ultimate amounts of China's purchases are uncertain. Trump has touted purchases of $40-50 billion annually — far above China's 2017 purchases of $19.5 billion as measured by the American Farm Bureau.
One of the sources briefed on the talks said that China's offer would start out at around $20 billion in annual purchases, largely restoring the pre-trade-war status quo, but this could rise over time. Purchases also would depend on market conditions and pricing.
Lighthizer has emphasized China's agreement to remove some restrictions on the U.S. genetically modified crops and other food safety barriers, which the sources said is significant because it could pave the way for much higher U.S. farm exports to China.
The high-level call comes a day after U.S. Vice President Mike Pence railed against China's trade practices and construction of a "surveillance state" in a major policy speech. But Pence left the door open to a trade deal with China, saying Trump wanted a "constructive" relationship with China.
While the U.S. tariffs on Chinese goods has brought China to the negotiating table to address U.S. grievances over its trade practices and intellectual property practices, they have so far failed to lead to a significant change in China's state-led economic model.
The "phase 1" deal will ease tensions and provide some market stability but is expected to do little to deal with core U.S. complaints about Chinese theft and forced transfer of American intellectual property and technology. The intellectual property rights chapter in the agreement largely deals with copyright and trademark issues and pledges to curb technology transfers that Beijing has already put into a new investment law, people familiar with the discussions said.
More difficult issues, including data restrictions, China's cybersecurity regulations and industrial subsidies will be left for later phases of talks, but some China trade watchers said that completion of a Phase 1 deal could leave little incentive for China to negotiate further, especially in a U.S. election year in 2020.
"US-China talks change very quickly from hot to cold but, the longer it takes to nail down the easy phase 1, the harder it is to imagine a phase 2 breakthrough," said Scissors.
Two of the sources said that Mnuchin and Lighthizer would likely travel to Beijing the week of Nov. 3 for further in-person talks to try to finalize a text. But a Treasury spokesman said no such meeting had been planned.
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26369d135012e01d4c459fb3fb2436d5 | https://www.cnbc.com/2019/10/25/cnbc-transcript-peter-vanacker-president-and-ceo-neste.html | CNBC Transcript: Peter Vanacker, President and CEO, Neste | CNBC Transcript: Peter Vanacker, President and CEO, Neste
Below is the transcript of a CNBC exclusive interview with Neste President and CEO, Peter Vanacker. The interview will play out in CNBC's latest episode of Managing Asia on 25 October 2019, 5.30PM SG/HK (in APAC) and 11.00PM BST time (in EMEA). If you choose to use anything, please attribute to CNBC and Christine Tan.
Christine Tan: Peter, thank you so much for talking to me. We know that you spent the last 10 years trying to transform Neste from an oil refining company to one of the world's largest producers of renewable diesel. It's actually the world's largest producer of renewable diesel. What made Neste venture into this business? What was the initial motivation?
Peter Vanacker: If you look back into history, Neste is a company that is there 70 years ago - 70. And in a small country like Finland, you always need to be creative to survive and to be able to compete with the big majors in oil refinery. So, you already had in the company quite a lot of creativity, the innovation of the people. They were always looking for something new. When they saw the environment changing, they took the very bold decision to invest into renewables. Then 10 years ago approximately, the management at that time took a very bold decision to invest in the production of renewable diesel, so diesel made out of waste and residue. They were difficult times of course, because the world was not ready for it. So, things have started to happen now. After four years of very, very difficult times, then renewable diesel did take off. Today, Neste is by far the number one on a global basis. Very proud of that and we have a very large capacity of renewable diesel producing in Singapore, producing in the Netherlands and Rotterdam as well as in Finland in our home base in the site of Porvoo.
Christine: Let's talk about those difficult first few years because like you said, there was no market for renewable diesel. There was no market for renewable products. What kept Neste going?
Vanacker: They were very early at Neste. It was before my time - very early at Neste by saying what is it that drives people? What drives people is a purpose, and they created that purpose, first of all, of "we want to leave..." At that time, it was called "leave". "We want to leave a healthier planet for our children for the next generation." That attracted, of course, also more people to the company who bought into that purpose. So, they tried and started doing everything around that purpose. So, they tried and started doing everything around that purpose. So, every time when it got difficult than in the board room there was discussion around, "Yes, but this is our purpose. Do we believe in it or do we not believe in it?" They asked the employees, they were stakeholders around it. And people said, "No, we believe in it. Let's continue to go for it." And yes, good that they did. So, a lot of stamina, very courageous also to go new ways and not just look at the short term, but really look at a purpose really look at maybe 10, 15, 20 years ahead.
Christine: Today, Neste is the world's largest producer of renewable diesel contributing about 70 percent to the company's profits. Tell us about some of the raw ingredients that go into the making of renewable diesel. What are you talking about?
Vanacker: There are lots of different types of waste and residue that we are collecting across the globe. We are, of course, then the biggest collector across the globe of these types of waste and residue that can be used e.g. cooking oil. So, collecting the cooking oil that has been used in restaurants that cannot be used anymore for food purposes. Collecting all that, aggregating them, purifying them and making sure that they get transported to the main refineries where we produce renewable diesel. Today, we have 14 different types of waste from residues that we are collecting across the world, aggregating it, storing it, purifying it and then, that serves as raw material.
Christine: I understand as more component of feedstock still comes from palm oil which has attracted a lot of scrutiny because it has been linked to deforestation. How do you feel about that, and could the company eventually do away with using palm oil altogether?
Vanacker: Technically speaking, just to come to your last question, we can. We are not dependent on crude palm oil in our refinery, so no specifically in the process technology. Originally, 10 years ago, we started with crude palm oil, and then we have focused all the innovation towards reducing the dependency of crude palm oil, up to the point today that we are not dependent on crude palm anymore. We do believe that sustainably sourced crude palm oil, and we track it back to the plantation, so there is no deforestation involved. But it must be, and I am very explicit on that: it must be sustainably sourced. So, if we see and we have done that in the past that it is not sustainably sourced, it is somehow there is deforestation linked to that, we block the supplier. We don't buy from them anymore. We would do that with the remaining quantity that today we are still buying. So, no deforestation - we are completely against it forestation because of the purpose -- creating a healthier planet for our children.
Christine: But technically, just to be clear, you can actually do without palm oil?
Vanacker: Technically, we can do without palm oil.
Christine: So, compared to traditional fossil fuel, how much can your renewable diesel help cut down carbon footprint? What sort of measurements are we talking about?
Vanacker: First of all, I think it is very important and there is still a little bit of a misunderstanding in certain areas - when we talk about reduction of greenhouse gas emissions or reduction of CO2 emissions, one always needs to look at the lifecycle analysis. So, from the well to the wheels. Not just say, "Okay, I only take my car, and then I look at what is eventually the CO2 emission of my car." We need to also look at what all the raw materials that are being used. So, in batteries for example, we also need to then look at the raw materials from the well, from the mine. So, in terms of well to wheels, based upon the European type of calculations, it is up to 90 percent of lower CO2 emissions. Calculations can differ a little bit from country to country or region to region, but generally speaking, it's somewhere between 80 percent lower and 90 percent lower.
Christine: Your renewable diesel has gained a lot of traction in road transportation - it's very well established in this segment. What kind of demand are we talking about when it comes to road transportation? How fast do you see it growing?
Vanacker: I can imagine that the demand in renewable diesel is quadrupling until 2030. If I go maybe and show the big picture on the globe - there are 900 million tons of diesel being consumed, and that is still growing. Today, in terms of renewable diesel, there are about 5 million tons of renewable diesel.
Christine: You have a lot to catch up on?
Vanacker: There's a lot to catch up, but that also means there is still a lot that can be replaced by a sustainably sourced and produced raw material - renewable diesel in this case - that can lead to greenhouse gas emission reductions.
Christine: So, can your renewable diesel totally replace traditional diesel altogether? Do you see that happening one day?
Vanacker: I think it is going to extremely difficult to completely replace because of course there needs to be quite a lot of investments. We are investing now to expand in Singapore. We are helping to be part of the solution. Last year, for example, we have helped our customers reduce their CO2 emissions by nearly close to 8 million tons. Our aspiration by 2030 is by helping our customers to reduce their CO2 emissions by at least 20 million tons. So, that shows a little bit of the dimensions that we are talking about in terms of growth, in terms of capacity growth that we need to build up in order to achieve that target.
Christine: Your move into aviation is taking a lot longer. I understand about more than 1000 test flights have been conducted. What sort of progress have you made? Do you see the renewable jet fuel market taking off in a big way anytime soon?
Vanacker: Yeah, the renewable jet fuel markets... If I go back a little bit and take the same picture like in the road transportation where it is today 300 million tons of jet fuel that is being consumed every year. That 300 million tons in terms of fuel consumption are expected to grow because of mobility by two to three percent per year. So, if the ICAO which is the Association of the Aviation Industry - they have promised, non-binding but they have promised that they want to grow CO2 emission growth neutral - that means that in the next couple of years, there needs to be that let's say two percent of 300 million ton would need to be compensated one way or the other. We believe that one way is by taking renewable jet fuel because that can lead up to 80-90 percent of lower CO2 emissions.
Christine: How many airlines do you hope to secure by the end of the year?
Vanacker: By the end of the year, I think it' is going to be a one-digit number. We have in total so far around 15 memorandums of understanding, so this is before we have a sales contract that we have signed with airlines and airports across the globe. But in terms of real supply, it's going to be around I would say five six maybe until the end of the year. But we have capacity available so that if an airline wants to buy, then at least it's not because there is no volume available for renewable jet fuel.
Christine: But just to be clear, your renewable jet fuel has to be mixed with traditional jet fuel because of regulations. Do you see that changing anytime soon?
Vanacker: The need is not there to change very soon. I think this will go gradually. Norway is the first country that has set a mandate, so all the planes that are leaving Norway need to have 0.5 percent of jet fuel blended in for sale-based jet fuel. There is discussion ongoing in Sweden. There is discussion ongoing in Finland. Northern part of Europe has always been on the forefront of these kind of regulations, and I'm sure other countries will also follow. But you hear the numbers at 0.5 percent, 1 percent, maybe 2 percent. And until we are at 50 percent, it's going to take a while. So, today, the limitation in terms of regulation is 50 percent blend. But I am sure until we get to that 50 percent that is being used, by then there will be other regulations in place.
Christine: I understand Neste also has plans to get into chemical or polymer recycling. The idea is to turn waste plastics into a raw material that can be either turned into a fuel or consumer plastics. What sort of progress have you made on that front, and how soon before you have something that you can bring to the market?
Vanacker: First of all, when we started on the journey from being a fossil-based refinery moving into being the leader in renewable diesel, we were still talking about renewable energy. But then, we reflected upon that and said, should we not go a little bit broader than just focusing on energy, because at the end, the technology that we have - what are we producing in chemical terms - it is a renewable hydrocarbon. So, hydrocarbons are made out of oil or the raw material for lots of plastics and a lot of chemicals. So, why not then take the renewable hydrocarbon as raw material for plastics and for chemicals?
Christine: You are trying to create that circularity?
Vanacker: Exactly, as a starting point of creating circularity in the material space. So, we enter with renewables, then out of that for example, there is a plastic being produced -polyethylene polypropylene - and then the next step is through a new technology that we are still developing so-called chemical recycling. We are good in recycling, we're good in collecting waste residues because we do that already. So, we take that waste plastic and through chemical recycling, we make a new hydrocarbon out of it, originally made from renewables because that was the raw material we used for it. So, that new renewable hydrocarbon can be used to produce a chemical or a plastic again.
Christine: So this new technology you're developing. How soon will it be ready?
Vanacker: The renewable part of renewable hydrocarbon is ready and has been tested. We did together with the one of the leaders, if not the leader, in polyethylene polypropylene. We did in Germany a first ever world scale trial on the planets to produce polyethylene and polypropylene together and that was extremely successful. There were announcements being made. The material is now being sold in the market. Practically everything has been sold in the marketplace. So, renewable polymers technology is there. So that's not an issue anymore. The chemical recycling part, there is still an issue. I think realistically we need to three to five years until it's going to be really economical, fully available.
Christine: Building this full renewable platform has its tradeoffs because when you look at your renewable diesel, it is actually not cheap. It is three times more expensive than traditional diesel. What is actually going to drive companies and consumers to really make that switch?
Vanacker: But do we believe that oil is going to stay at the level that it was as it is today? It could very well be also that oil is going to move up because there will be a shortage of oil in the future. We have seen oil barrel prices of $140 in the past. So, it's all what do we compare with.
Christine: How high would oil prices have to be for there to be a big pickup in demand when it comes to renewable diesel?
Vanacker: If we are moving towards $80-100 a barrel, then the delta - the difference - I mean between renewable diesel and crude oil-based diesel is so minimal. But I want to also refer to certain mechanisms that are in place that actually if I take California. In California the authorities through the carp association have since a number of years have implemented a so-called LCFS (Low-carbon fuel standard) credit system. That means that who is emitting CO2 needs to buy credits from the companies that are reducing CO2 emissions so that at the end of it, there is no additional penalty let's say for people at the pump because both products are priced at the same level. There is no tax incentive as such. It is a credit system and a debit system that actually lives its own life, so based upon supply and demand.
Christine: So here in Singapore, Neste is already operating the world's largest production plant when it comes to renewable diesel. You're producing something like one point one million tons of capacity per year. You recently made an announcement you spend another 1.4 billion euros into a second plant, taking your total capacity to 4.5 million tons. Are you really betting that all your forays into aviation chemical recycling polymers is going to generally a big tick up, a big demand when it comes to renewable diesel?
Vanacker: We see the regulation also changing and especially Europe. I mean Europe is on the forefront. So, there is a new regulation that has that is being put in place. I mean it has been voted on the European level the so-called RED II (Renewable energy directive) regulation that is now being adopted by the member states. And that sets clear targets, mandates and what needs to be achieved in terms of greenhouse gas emission reductions. The same is also happening in the United States especially California being on the forefront but not just limited to California anymore. Also, some other states are setting clear regulations and enforcing mandates. We see Canada moving also in the same direction. So, due to the regulations, there is the need also for products that or helping to reduce CO2 emissions on the planet. So, based upon that we do foresee that the demand could at least quadruple by 2030. We start developing of course our acid footprint because we need to make sure that not just there is a regulation but there needs to be a solution in how to fulfill the regulation. So, therefore, we need to help our customers as well as the authorities by bringing sufficient capacity on the market. So, first step is as you said 1.4 euros that we are investing to create an additional one point three million tons of capacity. This is a huge undertaking this is not a small plant.
Christine: It's a big bet.
Vanacker: It is a big bet, but it is also a big - technically speaking - a big investment. There will be at the peak of building up the plant, there will be 6000 workers building up the plant. And this is only the people that we don't have at the plant to build up to plant. That doesn't take into consideration yet all the people that are involved in building the equipment. So, I would triple the 6000 - probably 20000 people -- being involved in total in just creating that capacity creating that plant in Singapore.
Christine: Your second plant would be up and running by 2022. So, you're hopeful and you're confident that there will be a big demand pick up by then?
Vanacker: Yes, and we build up optionality as well in the plant. So, this is not a straight forward plant that we are now building up. On one hand side, we will use lower and lower qualities of voice from residues. So that means that in our process of the plant that part of the plant that is treating that waste and residues needs to be much more complex. So, different technologies that we are using to treat the waste and residual before we actually do it into the second part of the plant which is a so-called synthesis part where we produce in the hydrocarbon. In addition to that, we have the optionality that not just the plant produces renewable diesel for road transportation, but it also produces renewable jet fuel which needs to be completely separated from the diesel. It's another quality. You have some additional steps. We also produce the renewable hydrocarbon that can be used as the raw material for polymers and chemicals. So, on one hand side, waste and residues -lower and lower qualities. On the other hand, not just geared towards road transportation with renewable diesel but different markets that we are addressing. So, that means that if one market would not grow as fast then we are sure that the other markets will grow as well. We are also in the business of creating markets. That's what we have been doing 10 years ago with renewable diesel.
Christine: So, you are giving yourself a safety net in a way?
Vanacker: You can call it the safety net. You can also call it... we are building yet Neste as a company which has which is much more versatile and not just focused on renewable energy. Also seeing the development in renewable polymers, renewable materials now polymers and chemicals.
Christine: At the end of the day, all this work that you're doing, how does it square off against Neste's traditional role as an oil refining company?
Vanacker: Yeah, we are working extremely hard to make the existing refinery that of course is still consuming crude oil to make that sustainable. So, what does it mean? That means eventually investing in technology and investing and changing the assets that we have so that we could take for example waste plastic as a raw material to replace crude oil. We could take wastes and residues, other wastes and residues that would replace crude oil. At the first test on that we have, at the beginning of next year so waste plastic that we would take as raw material in one of the smaller refineries that we have in Finland, we replace crude oil.
Christine: Do you ever see Neste getting out of oil refinery, fossil fuel refining altogether. Could that happen one day? Is there a time horizon?
Vanacker: We are working heavily on that purpose yeah. Really the target is can we replace crude oil in our existing refineries, replace it by waste and residues? Definitely if you have waste plastic, there is a lot of waste plastic on the planet. So, with our refinery, no issue with availability as long as the waste plastic is being collected. So physically, it is possible.
Christine: Do you want to?
Vanacker: We want to. Yes of course. We've made that promise that by the end of 2030, we want to use at least 2 million tons of waste and residues, replacing crude oil in our existing refineries. So, one million tons out of that is waste plastic. The other million tons or other waste and residue like the ones that we are using for renewable diesel.
Christine: So, by 2030, could we see Neste move completely out of fossil fuel refining?
Vanacker: I think it would be possible because that alone that promise is not sufficient. If we want to create a healthier planet for our children, then we need to think beyond it, as just a step on the road. Just like 14 years ago when we started our innovation in renewable diesel and then the first plant was being built in Finland, it was the first step on the road. So, I think in steps. But the ultimate target must be that we are independent of crude oil.
Christine: By 2030, it's achievable?
Vanacker: To be independent of crude oil, I would not make that promise.
Christine: You've spent two decades working for a German pharmaceutical giant Bayer, followed by specialty chemicals firm CABB before joining Neste in September last year. I understand it was your daughter who affirmed your role, gave her support getting you to accept the job. What did she say?
Vanacker: Yes. I was telling her I'm going to switch companies, and I'm going to go to Finland to a company called Neste. And as she was 20, 21 years old so as young generation immediately online you checked on Neste and she saw the purpose she saw how the company was presenting as creating reduced reduction of CO2 emissions, the environment creating a healthier planet for the children and then she immediately jumped up and she hugged me actually and she said, "Daddy, now I'm really proud of you because now you have really found the right job. You are doing something I mean for our generation." It really is there and that generation that is now 15, 16, beginning 20s. They really care. So, I was very pleased of course.
Christine: You're 53 years old, Belgian, studied chemical engineering, you specialize in polymers. How would you describe your leadership and management style? What do you like as the CEO?
Vanacker: What I like as CEO in terms of leadership and management is open communication. We are actually all sitting together in an open office and where we have executive committee meetings, we actually stand in the middle of the room where we have almost like in a bar. I would say. You would think it's Google or something like that in the atmosphere. So, that's what I like that people are very approachable. There is this exchange of opinions. Of course, when then a decision has been made that everybody is committed to the decision and then the focus is on the implementation.
Christine: As CEO of Neste, I understand you spend a lot of time talking to European regulators. What are your conversations like? What do you talk about?
Vanacker: What we talk about is actually relatively simple because the regulator wants to understand is there a solution available because what a regulator doesn't want is regulate something and then everybody is saying, "Oh come on, this is theory, it's impossible.
Christine: So really educating them?
Vanacker: I think that is a big part of that -- it is education. But it goes in both ways, as we are discussing then of course the regulator discuss about what it is they want to regulate and in what direction do they look.
Christine: So, there is a few pushing regulators to do more?
Vanacker: By putting regulations in place or taking the current solutions so that we can actually adopt those solutions in today's environment. That's one point. The second point is avoiding that there is a polarization ongoing. Again, the big picture is 900 million tons of diesel consumption in the world. And we should not compare and polarize electrical vehicles against combustion engines for example. That that is not helpful. We need combustion engines. We have the energy density that diesel has which is very high. You need to have the newer engines. With the newer engines with the renewable diesel, you can reduce immediately your CO2 emissions by 90- 95 percent. So, great solution.
Christine: And finally, Neste is now the world's largest producer when it comes to renewable diesel. Now venturing beyond road transportation, into aviation. What impact do you want to make as CEO of Neste? What do you want to achieve for the company?
Vanacker: First of all, what I want to achieve is that people who are, for example, five years in the company. After that five years for people to say, "Oh yes, we made a big difference. We got closer to creating a healthier planet for our children." And then also maybe spontaneously if I think about it - having my children saying, "OK, Daddy, you didn't just join the company but actually you have made a difference and you have taken care of over my generation."
Christine: Peter, thank you so much for talking to me.
Vanacker: You're welcome. Thank you. Thank you.
END
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10f79b9c1ed7c5483113b5e47c284b4b | https://www.cnbc.com/2019/10/25/cnbcs-mad-money-w-jim-cramer-coming-to-the-us-air-force-academy-for-live-veterans-day-show.html | CNBC's "Mad Money w/ Jim Cramer" coming to the U.S. Air Force Academy for live Veterans Day show | CNBC's "Mad Money w/ Jim Cramer" coming to the U.S. Air Force Academy for live Veterans Day show
CNBC's Jim Cramer Live from the U.S. Air Force Academy in Colorado Springs on Friday, November 8, 2019
WHEN: Friday, November 8, 2019 at 4 p.m. MT
WHERE: CNBC's "Mad Money w/ Jim Cramer" – Live from Polaris Hall at the U.S. Air Force Academy in Colorado Springs, Colo.
WHAT: CNBC's "Mad Money w/ Jim Cramer," which airs Monday through Friday from 6 to 7 p.m. ET, will celebrate Veterans Day with a special live taping from the United States Air Force Academy in Colorado Springs, Colo., Friday, November 8, 2019.
"I am thrilled to honor the service of veterans from across the nation with this special live episode from the U.S. Air Force Academy," said Jim Cramer. "The Academy has earned its reputation as the premier institution for developing innovative, inclusive leaders of character to serve our nation. Cadets leave service with a unique skillset that later easily translates to success as leaders in business."
For information about the show, visit: https://www.cnbc.com/mad-money/
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a6db58614841dcee428272e7ade9d09b | https://www.cnbc.com/2019/10/25/dow-points-to-mixed-open-russia-probe-now-criminal-investigation.html | What to watch today: Dow points to mixed open as earnings roll in; Russia probe shifts to criminal investigation | What to watch today: Dow points to mixed open as earnings roll in; Russia probe shifts to criminal investigation
U.S. stock futures pointed to a mixed open this morning, as the Dow is poised to open higher, but the broader S&P 500 and the Nasdaq are indicated lower ahead of the week's final trading day. The S&P 500 is coming off its highest close since July 30 and sits 0.5% below its record closing high set on July 26. It is also on track for a third straight weekly gain, while the Nasdaq is on pace for its fourth consecutive positive week. (CNBC)
Today's lone economic report comes at 10 a.m. ET, when the University of Michigan releases its final October Consumer Sentiment Index. (CNBC)
It's also a lighter day when it comes to earnings. Dow component Verizon (VZ) will release its third-quarter earnings this morning, along with Charter Communications (CHTR), Goodyear Tire (GT), Illinois Tool Works (ITW), Phillips 66 (PSX) and VF Corp. (VFC). No earnings are scheduled after today's closing bell.Amazon's (AMZN) third-quarter earnings fell short of street expectations, driving its stock down as much as 9% in after-hours trading. It also gave dismal revenue guidance for the holiday shopping season, spooking investors who were expecting a huge pay off from Amazon's growing investments across the company. (CNBC)* Jeff Bezos lost about $7 billion on Thursday (CNBC)
The Department of Justice has shifted its review of the Russia probe to a criminal investigation. It's a move that is likely to raise concerns that President Donald Trump and his allies may be using the powers of the government to go after their opponents. It is not clear what potential crimes are being investigated. * Democrats see no need to hear from Ukraine whistleblower (Washington Post)
Democratic presidential candidate Tulsi Gabbard said today she will focus on her White House bid and not run for re-election to her congressional seat. While lagging behind in a crowded Democratic presidential field, Gabbard has gotten renewed attention lately after a heated argument with former Democratic presidential nominee Hillary Clinton. (AP)
The current limbo for Brexit is set to last until early next week after EU ambassadors failed to reach an agreement over the U.K.'s request for a deadline extension. EU ambassadors discussed this morning what sort of delay should be granted to the U.K. for its current Brexit deadline of Oct. 31. They accepted that a delay was needed but couldn't agree on a firm date. (CNBC)
U.S. Senate Minority Leader Chuck Schumer and Sen. Tom Cotton asked intelligence officials to investigate whether the popular Chinese-owned app TikTok poses national security risks. The senators raised concerns about the video-sharing platform's collection of user data and whether China censors content seen by U.S. users. (Reuters)
Indonesia has called for better Boeing (BA) cockpit systems and oversight by U.S. regulators after design flaws helped bring down a Lion Air 737 Max jet, a crash that was compounded by errors from ground staff and crew. In the report, regulators criticized the design of the MCAS system, which automatically pushed the plane's nose down, leaving pilots fighting for control. (Reuters)* Airline chiefs grow frustrated as 737 Max grounding costs near $1 billion (CNBC)
Facebook (FB) today announced the launch of Facebook News, a new section of the social network that will show users a personalized selection of news stories. The company has been working on the project for months, and it will reportedly pay as much as millions of dollars to news publications for licensing fees to run their stories on Facebook. (CNBC)
Walmart (WMT), CVS Health (WVS) and Rite Aid (RAD) are pulling all containers of Johnson & Johnson's 22-ounce baby powder after the FDA found sub-trace amounts of asbestos. Last week, J&J (JNJ) voluntarily recalled an estimated 33,000 bottles of its 22-ounce baby powder and is working with investigators to determine the integrity of the test sample. (CNBC)
Private space tourism is about to go public. Shareholders approved Virgin Galactic's merger with one of Chamath Palihapitiya's ventures, according to SEC filings, setting up the space tourism company to list directly on the New York Stock Exchange on Monday. Virgin Galactic will become the first human spaceflight company to trade on public markets. (CNBC)
Intel (INTC) reported better-than-expected adjusted quarterly profit revenue and forecasts. Intel also raised its full-year revenue outlook amid strong demand, and it added $20 billion to its share buyback program.
Gilead Sciences (GILD) came in 1 cent above estimates with adjusted quarterly profit of $1.75 per share, with the drug maker's revenue essentially in line with forecasts. Gilead did see lower-than-expected sales of its cancer treatment Yescarta.
Visa (V) beat Wall Street estimates with adjusted third-quarter profit and revenue. Visa's results were boosted by more spending on debit and credit cards. The company also announced a 20% dividend increase.
Anheuser-Busch InBev (BUD) cut its full-year profit forecast, as sales of its beers fall in markets like Brazil and South Korea.
Citigroup (C) named Latin American chief Jane Fraser as president and head of its consumer bank, putting her in line to eventually succeed Chief Executive Officer Michael Corbat.
Booking Holdings (BKNG) was downgraded to "market perform" from "outperform" at Raymond James. The firm said the Street appears overly optimistic on revenue growth and profit margins for the operator of Priceline, Kayak and other travel booking sites.
Dick's Sporting Goods (DKS) was upgraded to "buy" from "neutral" at Goldman Sachs, which points to a healthy athletic market as well as better service and a more differentiated experience at Dick's stores.
Uber Technologies (UBER) was rated "buy" in new coverage at Guggenheim. The firm said the ride-hailing service operator has underappreciated pricing leverage, among other factors.
Avis Budget (CAR) was downgraded to "hold" from "buy" at Deutsche Bank, which points to softer pricing for the car rental company as well as the pending retirement of CEO Larry De Shon.
Amazon renewed its anthology series "Modern Love," which is adapted from a New York Times column, for a second season that's set to air in 2020. The show debuted its first season just a week ago and includes stars such as Anne Hathaway, Tina Fey, Andy Garcia, Dev Patel, and Olivia Cooke. (Variety)
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8f3ba478c4c25845e2294e6a34d9c97f | https://www.cnbc.com/2019/10/25/europe-markets-uk-mulls-elections-as-eu-considers-brexit-extension.html | European stocks close slightly higher as investors digest a fresh round of corporate earnings | European stocks close slightly higher as investors digest a fresh round of corporate earnings
European stocks ended slightly higher on Friday after a substantial round of corporate earnings, while traders also monitored Brexit developments and tense exchanges between the U.S. and China.
The pan-European Stoxx 600 finished provisionally higher by 0.12%, with retail stocks rising just over 1.1% to lead gains while food and beverages dropped nearly 1.7% as sectors and major bourses pointed in opposite directions.
The state of limbo for Brexit is set to carry into next week after EU ambassadors agreed on the need to grant the U.K. a third extension to its deadline for leaving the bloc, but failed to reach a consensus on its duration.
Global markets are also reacting to critical comments from U.S. Vice President Mike Pence toward China which evoked ire in Beijing as the world's two largest economies continue talks aimed at bringing an end to their protracted trade war.
Stocks on Wall Street traded higher on Friday as investors across the Atlantic continued to monitor corporate earnings reports.
Back in Europe, German business morale held firm in October with the Ifo Institute's business climate index coming in at 94.6, unchanged from the previous month and slightly above estimates.
Traders are also reacting to a slew of corporate earnings for the third quarter released on Friday morning.
British lender Barclays reported a net loss for the third quarter on Friday after being hit by £1.4 billion ($1.8 billion) worth of insurance claims, but traded 2.2% higher on the back of strong underlying figures.
Belgian brewer AB InBev posted flat third-quarter EBITDA (earnings before interest, tax, depreciation and amortization), sending the stock tumbling 10.5%.
Italian clothing brand Moncler climbed 10.7% after a positive earnings report to lead the Stoxx 600, closely followed by French luxury group Kering, which saw its shares climb 8.1%.
At the bottom of the European blue chip index, United Internet shares plunged almost 20.% after an independent expert rejected a request from its unit Drillisch to retroactively reduce its prices under an agreement with Telefonica Deutschland, according to Reuters.
Ubisoft fell nearly 16% after cutting its profit guidance and delaying the release for some triple-A games.
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a7a7a053d1af6d3cdb778c97fc11c811 | https://www.cnbc.com/2019/10/25/everyone-dreads-the-idea-of-assembling-all-their-financial-information.html | Trying to prepare for the just-in-case may seem impossibly complicated. It's easier than you think | Trying to prepare for the just-in-case may seem impossibly complicated. It's easier than you think
Erica Yungen Ostergren, 51, admits to a very casual password system: an old school catalogue envelope with cross-outs and coffee rings.Source: Erica Yungen Ostergren
Erica Yungen Ostergren keeps important financial information, such as website passwords and logins, in one handy place.
"Hilariously, it is all on the back of a yellow envelope that I have been stashing in a drawer for six years, scribbling out and updating as needed," said Ostergren, a 51-year-old counselor in private practice in Salem, Oregon.
Few people relish the idea of assembling all their financial info in one easy-to-find place, often in what's called an "ICE binder" (as in "in case of emergency").
First, it's no fun contemplating disastrous life events. Second, it seems like an impossible task with many parts. So many pieces, and so many different websites, log-ins and account numbers.
The sheer number of accounts from past jobs is one reason Sharon Payne Rick, 43, a physician recruiter in San Rafael, California, keeps putting off this task.
The biggest issue, Rick says, is information overload. Two choices would be much easier, but the flood of information from podcasts, websites and apps makes it hard to decide.
More from Invest in You:Here's how to invest like Warren BuffettIndianapolis is tops for great museums and a fantastic church saleWhat almost no one knows about emergency savings
Ken Hoyt, a certified financial planner with Perennial Advisors in Westford, Massachusetts, says a good first step is to simply make a list of the types of accounts you have, grouped by type of institution: banks, investment accounts, retirement accounts, life insurance accounts.
For each, you'll want to write down the name of the bank or company, your account number, user name and password. "Try to take a small bite, and you'll do more than you expected."
Your goal could be getting your banks in one place on a spreadsheet. "Next day, add the investment accounts," Hoyt said.
Make sure to work out a method to let your loved ones know where you're storing the information, Hoyt says.
Many people in Hoyt's office have the same method, an Excel spreadsheet that is locked with a password. (Don't name the file "Passwords," Hoyt warns.)
He prefers the desktop version of Excel, not the cloud-based Google doc. "There's always a chance you can give up your machine to someone," he said.
Even with a file stored on your computer, you still need a second step, says Bryan Kirk, director of financial and estate planning at Fiduciary Trust Company International in San Mateo, California.
VIDEO4:3604:36How to prepare for a financial emergencyInvest in You: Ready. Set. Grow.
You must specify how someone else can access it. It's not enough to have everything in a safe deposit box; someone has to be able to find the key or the password to get in.
Have a paper equivalent for information stored digitally. "Think about digital obsolescence," Kirk said. "I have T-shirts from the '90s, books from the '60s."
When it comes to technology, he says, nothing in his house is more than 5 years old. "Using a brand-new account management tool can be helpful for us day to day but may not be that helpful 15 or 20 years from now."
In other words, you may not want to store your valuable financial data on the Myspace of password managers.
Christina Barnes uses a Day-Timer to keep track of passwords and logins for financial accounts.Source: Christina Barnes
Christina Barnes-Parker, 44, of Venice, Florida, crosses out old passwords when they need updating in a Day-Timer. "I told my husband no thief would steal that old thing from the house," she said.
Hoyt said he also likes a 1-inch binder that can easily be edited and rearranged.
Ostergren started her envelope about six years ago. "The reason I've kept it so long is, the envelope is yellow, so I can find it easily," she said. "It's covered in coffee rings. It has the financial accounts, our bill-paying accounts, my Yahoo and Google passwords."
It may seem like an on-the-fly arrangement, but it works for her family. "My husband would know where to find this," Ostergren said. "I'm the one who pays all the bills.
"If someone needed to know anything, from the HBO Go password all the way to the Schwab account, they're all there."
In your ICE binder, have an index card that says where you keep any important information on your computer (what drive, what the file name is). Since the Excel file should be password-protected, you'll also want to indicate that password. You might consider using a code, such as your third cousin's middle name or place where you and your spouse had the first date.
People who praise password manager software bring up three points.
You don't have to remember all those passwords. For a fairly low cost — a monthly $3 for one user — a password manager app stores your passwords securely. You can share passwords with other users (family members or a trusted friend) for a small extra monthly fee.
The app 1Password seems to be universally loved. Other password managers include LastPass, the open source KeePass and Keeper.
For extra security, you might want to enable two-factor authentication, even if some evidence is starting to surface that says it's not 100% foolproof.
Hoyt estimates that the average person has about 15 accounts, not including shopping sites such as Amazon. The total time to sit down and consolidate all your information for these accounts?"Maybe two hours total," Hoyt said. "That's the maximum.
"It's really not that long — it's just sitting down and getting started," he added. "Like with most things, that's always the hardest part."
VIDEO3:2303:23Cracking your password
CHECK OUT: Suze Orman: 'Do not let these markets scare you — you want these markets to go down' via Grow with Acorns+CNBC.
Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.
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52c70ff94e20bd885012b3b2dee6d739 | https://www.cnbc.com/2019/10/25/fisher-withdrawals-top-3-billion-as-texas-retirement-plan-exits.html | Fisher withdrawals top $3 billion as Texas retirement plan exits | Fisher withdrawals top $3 billion as Texas retirement plan exits
Kenneth Fisher, chief executive officer of Fisher Investments, speaks at the Forbes Global CEO Conference in Sydney, Australia, on Tuesday, Sept. 28, 2010.Gillianne Tedder | Bloomberg | Getty Images
The Employees Retirement System of Texas announced on Friday that it would end its relationship with Fisher Investments, yanking $350 million from the asset manager.
"Texas ERS has completed its due diligence," said Mary Jane Wardlow, a spokeswoman for the pension system.
"With respect to our fiduciary duty, we are defunding Fisher Investments, which had served as an external manager in the international equities portfolio with $350 million [as of Sept. 30] under management," she wrote in an email to CNBC.
The funds will be redistributed within the equities pool of the ERS trust, she said.
In all, the pension has about $29 billion in assets.
In just over two weeks, Camas, Washington-based Fisher has lost more than $3 billion in assets as nine institutional clients — seven of which were government pensions — severed ties. The divestitures arrive on the heels of lewd comments Ken Fisher made at a conference on Oct. 8.
Fisher had $94 billion in assets under management as of Dec. 31, 2018, according to their SEC filing.
That figure reached $112 billion as of Sept. 30, 2019, according to the firm.
Major clients have parted ways with Fisher, 68, in the last two days.
Goldman Sachs, the giant investment bank, confirmed Fisher would no longer be an underlying manager for the Goldman Sachs Multi-Manager Global Equity Fund in an Oct. 25 filing with the Securities and Exchange Commission. It pulled $234 million from the firm.
On Thursday, the Los Angeles fire and police pension plan also voted to fire Fisher, which managed $522 million.
VIDEO5:4605:46Investing guru Ken Fisher under fire after offensive comments at private eventPower Lunch
CNBC obtained an audio recording of Fisher's comments at the Tiburon CEO Summit, as well as audio of him speaking at a previous conference.
Clips from both were featured on CNBC's "Power Lunch." Combined, they show that the money manager made flippant remarks about sex.
In the audio obtained by CNBC, Fisher said at the Tiburon conference, "Money, sex, those are the two most private things for most people," so when trying to win new clients you need to be careful.
He said, "It's like going up to a girl in a bar ... [inaudible] ... going up to a woman in a bar and saying, hey, I want to talk about what's in your pants."
Further, when Fisher was a speaker at the Evidence-Based Investing conference in 2018 he compared marketing mutual funds to propositioning a woman for sex at a bar.
"I mean the, the most stupid thing you can do, which is what every mutual fund firm in the world always did, was to brag about performance, uh, in, in a direct mail piece, which is a little bit like walking into a bar if you're a single guy and you want to get laid and walking up to some girl and saying, 'Hey, you want to have sex?'" Fisher said, according to audio obtained by CNBC.
When asked for comment, a spokesman for Fisher Investments referred back to the money manager's apology.
"Some of the words and phrases I used during a recent conference to make certain points were clearly wrong and I shouldn't have made them," Fisher said in a statement. "I realize this kind of language has no place in our company or industry. I sincerely apologize."
Organizers of both conferences subsequently banned him from speaking again in the future.
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5bfc57e49005435e59ad9bb5d38ca71b | https://www.cnbc.com/2019/10/25/growth-stocks-10-year-rally-could-be-under-threat-charts-suggest.html | Growth stocks' more than 10-year rally could be under threat, charts suggest | Growth stocks' more than 10-year rally could be under threat, charts suggest
VIDEO3:5003:50As the S&P 500 struggles to hit records, one group is quietly making new highsTrading Nation
We're back to the age-old question: growth or value?
The S&P 500 Value Index (SPYV) hit an all-time high during Thursday's trading, while the charts are sending sinister signs that could put the growth-stock rally at risk, says Todd Gordon, founder of TradingAnalysis.com.
In the SPYV ETF, "we've seen three main periods of consolidation since the 2009 lows," Gordon told CNBC's "Trading Nation" on Thursday.
Those consolidation periods have lasted 86 and 101 weeks, with the most recent still in its 91st week as of Thursday, Gordon said.
"The big question right now is when will this consolidation end?" Gordon said. "Could we move higher in value? Absolutely. So, this is the time where, I think, in the earnings season, we're starting to look for a breakout."
Turning to a chart of growth relative to value — that is, the S&P 500 growth index divided by the value index — Gordon said the bear case for growth appears to be taking hold.
"What you can see is we have a very, very nice uptrend, which is growth outperforming value. We're starting to see this ratio start to sell off," he said. "A natural pullback would be about that 1.10 level. If you break through 1.05, ... that would start to suggest that the uptrend in growth since '08 is now in trouble."
That would mean value could start to substantially outperform growth in the coming months. The iShares S&P 500 Value ETF (IVE) has underperformed the iShares S&P 500 Growth ETF (IVW) over the last two years, with the former up just over 10% versus the latter's nearly 24% gain.
Gordon wanted to play the potential trend turnover with a stock that has caught the eye of both value and growth investors alike: Apple.
"How can you not like Apple here? [It's] breaking new highs as the rest of the market isn't," he said, pointing to a parallel channel on the stock's chart. "Resistance doesn't come in at the current angle of approach until $280 in Apple. I'm long Apple in my portfolio. I'm going to try to target that level."
Apple shares closed at $243.58 on Thursday.
John Petrides, a portfolio manager within the wealth management group at Tocqueville Asset Management, said investors will likely tire themselves out waiting for value to finally overtake growth before buying in.
"From an absolute standpoint, it's great that value's reaching an all-time high, but it's a relative game," he said in the same "Trading Nation" interview. "Value has underperformed growth for quite some time now. And those investors waiting for this reversion to the mean, it's been like 'Waiting for Godot," a reference to Samuel Beckett's play about two characters waiting for someone who never arrives.
But valuation will come back into play "at some point" as the market's earnings-season swings subside, Petrides said.
"It's only a matter of time with the slowing global economy," the wealth manager said. "When growth becomes fearful, investors turn their back on that group very aggressively and they sell off in a hurry. They don't wait for anybody. So now is the time to start rotating your portfolio if you're overweight growth and start adding to value."
The SPYV was less than 1% lower at Thursday's close.
Disclosure: Todd Gordon owns shares of Apple.
Disclaimer
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1c038a01ab5bd092692a5cb2b2e3693a | https://www.cnbc.com/2019/10/25/impeachment-news-since-trump-ukraine-call-summary-was-released.html | Here are the biggest moments in the Trump impeachment saga since the Ukraine call summary was released a month ago | Here are the biggest moments in the Trump impeachment saga since the Ukraine call summary was released a month ago
President Donald Trump speaks to the media before departing the White House in Washington.Mary F. Calvert | Reuters
One month ago, President Donald Trump released a summary of the July 25 call with Ukraine's president at the center of the House's impeachment inquiry into him.
Trump hoped to show transparency and quash concerns about the interaction with President Volodymyr Zelensky, which he called "perfect." Instead, dodging political pitfalls has only grown tougher for Trump.
Since House Speaker Nancy Pelosi announced an impeachment inquiry on Sept. 24, a day before the White House released the reconstructed transcript of the call, House Democrats have looked into whether Trump abused his power in order to influence the 2020 election. Lawmakers have zeroed in on Trump's efforts to get Ukraine to investigate his political rival Joe Biden and his son Hunter, and whether officials tied a probe to the release of U.S. military aid to Ukraine.
As House committees subpoena top administration officials and hear the at times explosive testimony of witnesses, the White House has refused to cooperate with the probe, calling it an illegitimate political exercise. Key figures, from Trump's personal attorney Rudy Giuliani to acting White House chief of staff Mick Mulvaney and Secretary of State Mike Pompeo, have not complied with House subpoenas for documents.
At the same time, other aspects of Trump's foreign and domestic policy only increased the pressure he faced during the most politically dangerous month of his presidency. The president's decision to pull American forces from northern Syria sparked more criticism from Republican lawmakers than he has faced at any point during the impeachment probe. Trump also announced he would host the G-7 world leaders summit at his Florida country club next year — a decision he quickly reversed after he was widely accused of trying to enrich himself.
A flurry of events has taken place in Washington in the month since the Trump administration released the Ukraine call transcript. Here are some of the biggest moments so far in only the fourth serious impeachment inquiry into an American president.
House Speaker Nancy Pelosi (D-CA) and House Intelligence Committee Chairman Adam Schiff (D-CA) address reporters during Pelosi's weekly news conference at the U.S. Capitol in Washington, October 2, 2019.Jonathan Ernst | Reuters
Reports about the content of an intelligence community whistleblower complaint about Trump's conduct helped to push more House Democrats to support impeachment proceedings. The call summary — which was not an official transcript — gave the first real glimpse into what Trump did.
Referencing the former Vice President Biden's efforts to remove a Ukrainian prosecutor whom the international community considered corrupt, Trump told Zelensky: "There's a lot of talk about Biden's son, what Biden stopped the prosecution and a lot of people want to find out about that, so whatever you can do with the [U.S. Attorney General William Barr] would be great."
On the next day, Sept. 26, the House Intelligence Committee released the whistleblower complaint. It raised concerns that Trump was "using the power of his office to solicit interference from a foreign country in the 2020 U.S. election." It not only pointed to the president's call with his Ukrainian counterpart, but also alleged White House efforts to cover up records of the conversation. It also detailed efforts by Giuliani to push Ukraine to investigate the Bidens.
Earlier this year, the Trump administration had delayed about $400 million in key military aid to Ukraine, and lawmakers have questioned whether the White House did so in order to secure a probe into the Bidens. After the release of the call notes and the whistleblower complaint, Trump and his Republican allies pointed to the fact that the call did not confirm an obvious quid pro quo, or one action in return for the other.
VIDEO1:1901:19How to impeach the President of the United StatesDigital Original
The House Intelligence Committee, working with the Oversight and Foreign Affairs Committees, has led the probe into Trump's conduct. The Democratic-held panels have been active in recent weeks.
House Democrats have issued 14 subpoenas for records since Pelosi announced the inquiry, according to an NBC News. The subpoena recipients include Pompeo, Mulvaney, Giuliani, Defense Secretary Mark Esper and outgoing Energy Secretary Rick Perry — none of whom have sent the requested documents to lawmakers.
Earlier this month, White House counsel Pat Cipollone wrote a letter to the Democratic heads of the three House committees saying the administration would not cooperate with the impeachment inquiry. He called the proceedings "baseless, unconstitutional efforts to overturn the democratic process," arguing the lawmakers want to undo the results of the 2016 election.
Despite the White House's stance, and the State Department's resistance to its officials testifying, the House has still heard from some key witnesses. Since Pelosi announced the inquiry, the committees have held six closed-door depositions and conducted two private transcribed interviews, according to NBC.
The House has spoken to officials including Kurt Volker, the former special envoy to Ukraine; Marie Yovanovitch, the former U.S. ambassador to Ukraine; and Gordon Sondland, the U.S. ambassador to the European Union. The most explosive testimony so far came from Bill Taylor, the charge d'affaires at the U.S. embassy in Ukraine.
Taylor said Sondland told him Trump had withheld military aid pending the public announcement of a probe into energy company Burisma Holdings, where Hunter Biden served as a board member, and alleged Ukrainian interference in the 2016 election.
The House temporarily delayed further interviews this week amid the funeral of House Oversight Committee Chairman Rep. Elijah Cummings, who died last week at age 68.
Sen. Lindsey Graham holds a news conference at the U.S. Capitol in Washington, October 24, 2019.Siphiwe Sibeko | Reuters
The at-times scattered Republican defense of Trump has focused more on criticizing how Democrats have carried out the probe than on justifying the president's actions. The GOP has called for witnesses to testify in the open and urged the House to hold a vote to formally start impeachment proceedings.
Earlier this month, Pelosi said the House would not vote on officially beginning the probe.
Republican criticism of the process has only increased in recent days. Sen. Lindsey Graham, a South Carolina Republican and vocal Trump ally, introduced a resolution Thursday alleging Democrats violated Trump's due process by holding interviews behind closed doors. At least 40 other GOP senators (out of 53 total) co-sponsored it.
On Monday, the House voted down a Republican measure to censure House Intelligence Committee Chairman Rep. Adam Schiff, D-Calif. The GOP accused him of misleading the public about the inquiry.
The most disruptive protest happened Wednesday, when more than two dozen House Republicans went into a secure room on Capitol Hill in a show of criticism of the impeachment process. Their actions delayed the testimony of Laura Cooper, the deputy assistant secretary of defense for Russia, Ukraine and Eurasia. (A handful of the Republicans who marched into the secure room already had access to the depositions as members of the three relevant committees.)
Meanwhile, some of the White House efforts to defend against the probe have led to even more criticism against the administration. Trump called the probe a "lynching" on Monday — sparking backlash from Democrats and Republicans alike because the word invokes the country's history of racist killings. Even so, some Republicans defended his use of the term: Graham called the probe "a lynching in every sense."
Trump this week also labeled so-called Never Trump Republicans — people with GOP leanings who have consistently criticized the president — "human scum."
Mulvaney made another mess for the Trump administration to clean up on Oct. 17, when he seemingly admitted the White House held up military aid to Ukraine as it sought a probe into whether the country interfered in the 2016 election. It cut against the White House's denials of a quid pro quo.
Later that day, Mulvaney tried to walk back his comments, saying "there was absolutely no quid pro quo between Ukrainian military aid and any investigation into the 2016 election."
Speaker of the House Nancy Pelosi, Democrat of California, announces a formal impeachment inquiry of US President Donald Trump on September 24, 2019, in Washington, DC.Mandel Ngan | AFP | Getty Images
As Democrats forge ahead with the impeachment inquiry, it has put some Democrats and Republicans alike in a political bind — depending in part on which areas of the country they represent.
All but seven House Democrats, including a handful of first-term lawmakers who won districts that voted for Trump in 2016, have backed the impeachment inquiry. No House Republicans have endorsed the probe, although Republican-turned-independent Rep. Justin Amash of Michigan has backed it.
Public support for the inquiry has climbed in the last month. About 53% of respondents to recent polls say they back the House starting proceedings, versus about 42% who do not, according to a FiveThirtyEight average of surveys. On Sept. 25, about half of those surveyed opposed an impeachment probe.
About 48% of respondents to recent surveys say they either support impeaching Trump or removing him from office — which the GOP-held Senate would have to decide whether to do if the House voted to effectively charge him with abuses of power.
But polls suggest impeachment could be tricky in the battleground states that will determine the 2020 election. The surveys explain why Pelosi has taken a deliberate pace in investigating the president.
Before she announced the impeachment inquiry, the House speaker repeatedly called the issue "divisive." Since the investigation started, she has said it is a "sad time for our country."
Trump has had to fight off even more political threats beyond the Ukraine scandal. On Oct. 3, he said "China should start an investigation into the Bidens," which brought rare criticism from a handful of Republicans, particularly Sen. Mitt Romney of Utah.
Trump's decision to remove U.S. forces from northern Syria earlier this month brought as much Republican criticism as he has faced for just about any decision he has made in the White House. GOP lawmakers argued he opened Kurdish forces, with whom the U.S. fought the so-called Islamic State, to slaughter by Turkey.
On Wednesday, Trump said he would lift sanctions on Turkey imposed after the country launched its offensive in northern Syria, adding that a ceasefire in the area would be "permanent."
Trump also earned the ire of some GOP lawmakers when Mulvaney announced last week that the U.S. would host the G-7 world leaders summit at the president's Doral country club in Florida next year. The administration backtracked on the announcement only two days later, after mounting accusations of self-dealing or violations of the foreign emoluments clause.
Amid all of the issues for the White House, two foreign-born associates of Giuliani were arrested earlier this month on campaign finance charges. Lev Parnas and Igor Fruman pleaded not guilty to the charges this week.
Even as he pushes to make a case for his 2020 reelection, Trump has publicly focused more on defending himself from the impeachment inquiry than on any policy issue. In a tweet Friday morning, the president shared what he said was a quote from Fox Business Network personality Lou Dobbs, which called Trump "historic" and alleged an "illegitimate effort to overthrow a President, not a formal impeachment inquiry."
"Thank you Lou," Trump wrote.
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