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337e1dbce93d29bcf2cf4d09dad55016 | https://www.cnbc.com/2018/05/22/student-loan-debt-is-a-hurdle-for-many-would-be-mothers.html | Student loan debt is a hurdle for many would-be mothers | Student loan debt is a hurdle for many would-be mothers
Michelle Fernie-Oley and her husband, John's first dance as husband and wife.Source: Mikkel Paige
Because of her student loans, Michelle Fernie-Oley has put off children — for now.
Fernie-Oley, 33, and her 34-year-old husband, John, have been married for two years and live in New York.
She is a wedding planner and owns her own business. He is a stagehand. Together they make more than six figures but Fernie-Oley is also paying back a loan tab that's just under $80,000.
"We discuss kids constantly," she said, but "I can't imagine having a child when I have to pay over $600 per month just to my student loans."
"It's crippling," she said.
Student debt in America has skyrocketed in recent years and now stands at a record $1.5 trillion. It is a burden that is not shared equally.
Largely because women outnumber men in college these days and are more likely to pursue a graduate degree, they are the ones who end up with the bigger loan balances.
In fact, 42 percent of women have more than $30,000 in college debt, compared with 27 percent of men. Women also are two times more likely than men to think it will take more than 20 years to pay off their loans, according to market research firm ORC International.
Women also earn less over their lifetimes.
While there are many factors that contribute to a decision to postpone children, including changing attitudes about age and motherhood, access to birth control and increased opportunities in the workforce, student loans are increasingly to blame.
In a March poll by Future Family, a start-up that helps women understand fertility, 44 percent of women said they had student debt. Half of those women said the loans affect their decision about having children. Future Family polled nearly 1,000 women in the U.S. who were ages 25 to 40 and didn't have children.
"We find that concerns about finances — and student debt specifically — are factoring in more," said Claire Tomkins, Future Family's CEO. "It ends up being a financial equation that's a little untenable."
VIDEO1:1701:17How to deal with college debtCollege Game Plan
For millennial women like Fernie-Oley, that equation may very well shape the rest of their lives.
Statistics show millennials are getting married later: The median marrying age is now 27 for women and 29 for men, up from 20 for women and 23 for men in 1960, according to the Pew Research Center.
They are having children later: For the first time ever, women in their 30s are having more children than those in their 20s, according to data from the Centers for Disease Control and Prevention.
And they are having fewer children altogether: Women are having an average of 1.8 kids today, down from 3.7 in 1960, according to the Census Bureau.
More from Personal Finance:Why buying a home can be almost impossible with massive student loan debt For some, student loan debt is doubling, tripling, and even quadrupling Colleges will cost this much more in 2036
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5e69a42783a3bb4d36a03947c9e91760 | https://www.cnbc.com/2018/05/22/the-biggest-winner-from-the-unfolding-us-china-trade-deal-so-far-is-germany.html | The biggest winner from the unfolding US-China trade deal so far is Germany | The biggest winner from the unfolding US-China trade deal so far is Germany
A man walks next to the Volkswagen Group China office in Beijing on March 29, 2017.Fred Dufour | AFP | Getty Images
Beijing's latest concession in a trade dispute with the U.S. will likely benefit Germany the most.
On Tuesday, China's Finance Ministry announced plans to cut tariffs on some foreign automobiles to 15 percent, down from as much as 25 percent. The lowered duties will take effect July 1 and come after the Trump administration agreed this weekend to hold off on imposing tariffs on $150 billion worth of Chinese goods.
China is a major market for U.S. automakers, and shares of General Motors and Ford rose more than half a percent in Tuesday trading.
But when it comes to global trade, Germany sells more passenger cars in China than any other country does, according to the China Association of Automobile Manufacturers.
In the first four months of this year, German-made vehicles accounted for 20.8 percent of passenger cars sold in China, or 1.67 million units, the association said in an online post dated Friday. In contrast, American-made cars accounted for 11 percent, in third place behind Japan and a slight decrease from the same period last year, the data showed.
Of the top 10 brands by sales during that time, Volkswagen-affiliated sedans accounted for six, the association said.
The only American brand on the list was General Motors' Buick. Japan's Nissan and Toyota had one car each on the top 10 list, and the lone Chinese-made brand was Geely.
Shares of BMW climbed 2.75 percent, Volkswagen gained 2.2 percent and Daimler rose nearly 1.7 percent, as some of the top advancers in the German DAX in Tuesday trading.
In 2017, Chinese imports of automobiles rose well over 15 percent to 1.2 million vehicles, the association said. Demand for sedans and SUVs grew the most.
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62f56235dbda102cef7907b96987a9a2 | https://www.cnbc.com/2018/05/22/the-death-of-the-summer-job.html | The death of the summer job | The death of the summer job
Surrounded by a sea of colorful beach umbrellas, a lifeguard refreshes his thirst while looking over thousands of beach visitors on Old Orchard Beach during the peak summer weather.Gordon Chibroski | Portland Press Herald | Getty Images
WITH TEMPERATURES rising and summer months right around the corner, Wisconsin Dells – a town in the middle of the Badger State that bills itself as the "waterpark capital of the world" – is gearing up for peak tourist season.
The town boasts the largest concentration of indoor and outdoor waterparks in the world, and, according to Republican state Sen. Luther Olsen, they're "always looking for lifeguards." Demand is so great, in fact, that the parks in summer months often rely on recipients of the several thousand J-1 visas that are issued to temporary foreign workers in the state each year.
But Wisconsin waterparks have had a tough time locking down enough lifeguards to support their operations in recent years – even with the added help of temporary visa-holders. There simply haven't been enough local teenagers looking for lifeguarding gigs, in some cases leaving employers high and dry.
More from US News & World report: China tariffs threaten agriculture, manufacturing jobs for Trump's base The skilled worker exodus Unequal in America
"We also have swimming pools that municipalities have that have trouble getting lifeguards. We needed to do something," says Olsen, who sponsored a Senate bill in late 2017 that would allow the state to begin employing lifeguards as young as 15 years of age – effectively reducing the minimum age in Wisconsin at which a teenager can be employed as a lifeguard.
Olsen's bill passed, and Gov. Scott Walker signed it into law earlier this year. Olsen says he expects local employers will find some hiring relief as a result of the bill, noting that many Wisconsin Dells facilities began recruiting 15-year-old lifeguards "immediately" after Walker signed the bill into law.
But payrolls at Wisconsin waterparks are still in some cases visa-dependent, and the state's struggle to lock down workers to fill jobs that in decades past would have been filled by local teenagers and young adults speaks to a trend that has emerged across the country: Teen employment and summer jobs aren't as popular as they used to be.
"Even though some teens still have summer jobs, the proportion of teens who participate in the labor force during the summer has dropped dramatically," Teresa Morisi, a branch chief at the Office of Occupational Statistics and Employment Projections at the Bureau of Labor Statistics, wrote in a report published last year looking specifically at teen employment declines. "In July 2016, the teen labor force participation rate was 43.2 percent, down almost 30 percentage points from the high point of 71.8 percent in July 1978."
That participation rate dropped even further last summer. The BLS estimates the labor force participation rate for 16- to 19-year-olds – a measure that tracks the share of teens either employed or actively looking for a job – stood at 42.5 percent in July 2017. Fewer than 6.2 million teens were employed that month, which actually represents the largest total since 2007 but is still well shy of the more than 10 million teens employed in July 1978.
But it's not just summer jobs – teen employment throughout the year is down significantly from where it stood in generations past. Fewer than one-third of teens (32.7 percent) were in the labor force in April. Forty years prior, nearly 53 percent of teens were working or looking for a job.
"Over the past several decades, the rate exhibited a similar pattern; it fell just before, during, and for a short time after recessions ended, followed by little change during most of the recovery," Morisi wrote. "The overall drop in the rate was especially steep, however, during the two most recent recessions."
Indeed, labor force participation between 2000 – preceding the 2001 recession – and 2003 fell by 7.5 percentage points to 44.5 percent. By 2006, the rate had ticked down to 43.7 percent. And once the Great Recession hit at the tail end of 2007, teen labor force participation plummeted for a variety of reasons – employers were hiring less, those who would have been interested in a job decided to focus on academics, some laid-off workers took temporary roles that would have traditionally been filled by younger and less experienced employees. The lackluster participation continued into the recovery, in part because hiring decisions often lag behind America's economic health. And by 2011, the rate sat at 34.1 percent and hasn't moved much higher since.
The downward trend hasn't gone unnoticed by America's statisticians, and volumes of research in recent years have been dedicated solely to answering the questions of why teens aren't working and what this all means for the future of America's labor market.
"A focus on education is driving this decline in employment," says Martha Ross, a fellow at the Metropolitan Policy Program at the Brookings Institution.
Referencing Morisi's paper, Ross notes that teen enrollment in high schools, colleges and universities is significantly higher than it was in decades past. Per the BLS, three out of four teens were enrolled in school in 2015 – up from just 58.7 percent in 1985, when the bureau's Current Population Survey began tracking the data.
And, importantly for summer employment considerations, the percentage of teens enrolled in school during July of any given year – which the BLS uses as a standard measurement of how many folks are enrolled in summer classes – sat at 42.1 percent in 2016. Back in 1985, just 10.4 percent of teens were in school during the month of July.
Ross says while education is the primary driver, it is "plausible" that teens in some instances are losing out on part-time jobs and restaurant gigs to older workers "with more experience and who may be more used to workplace norms."
Though many economists take issue with the idea that the labor market is a fixed size, it's worth noting that labor force participation among older workers has climbed significantly in recent years. The labor force participation rate of Americans at least 65 years of age sat at 19.6 percent in April. Forty years prior, that rate was just 13.6 percent.
Meanwhile, labor force participation among so-called prime-aged workers between 25 years old and 54 years old has rebounded in recent years – standing in April at 82 percent. But that's still shy of the 84.6 percent peak seen in early 1999, a trend many economists attribute in part to older workers spending more time focused on education and advanced degrees.
Employers regularly cite prior work experience as an asset when recruiting young adults for jobs and internships. And, as Olsen notes, summer and part-time jobs are often a great place to "learn to be responsible, show up on time, get a day's worth of work in, follow instructions, that kind of stuff."
But, as Ross has written about previously, teen employment opportunities are also valuable in keeping them out of trouble. In a blog post for Brookings written in February, Ross cites a recent study that found summer youth employment programs in Boston reduced instances of violent crime among participants by 35 percent and property crime by 57 percent. Similar findings have been reported for young adult employment initiatives in Chicago and New York.
"I think there is a problem here, but it is masked a little bit by the general decline in teen employment," Ross says. "I think the problem is that lots of young people who come from lower-income backgrounds and who are not likely to go to a selective college need more support from programs and schools than they are generally getting in order to get a job and build soft skills and build their networks."
Problematically, Ross says, teens from lower-income backgrounds who may be in the most need of income or professional experience are not the ones landing summer or part-time jobs. A study published last year by researchers at Drexel University looked at employment-population ratios – which track the share of Americans in a particular demographic who are actually employed with respect to their total population – for teens in a variety of different households. They found that 40.6 percent of teens from households that bring in between $100,000 and $149,999 annually were employed during 2015 and 2016.
But just 23 percent of teens from households that earn fewer than $20,000 each year had jobs during that window. The employment-population ratio for white teens clocked in at 40.4 percent, while the rates for black and Hispanic teens sat at 24.2 percent and 27.2 percent, respectively.
"It is counter-intuitive. You think the teens whose households need the money would work more to get the money. But I think what's playing out here are the effects of social networks and norms within the family and belief about the value of work," Ross says. "I think that the kids in more affluent families are more likely to have family connections to help them get a job or internship. They're more likely to be in a neighborhood where they see people working at jobs that are rewarding and provide well for their families."
Indeed, Ross says she isn't worried as much by a decline in labor force participation among more affluent teens who are focusing more heavily on college preparation, because "these are teens who are most likely going to be OK anyway."
The problems associated with teens not participating in the labor force, she says, are increasingly concentrated within a demographic that may need the most academic and professional help down the road. The fact that teens are working less and in some cases more heavily focused on academics isn't the immediate problem, but rather that the folks who most need the income and work experience are often the ones standing on the sideline.
"The evidence that teen employment is beneficial down the line is important, but it also might be overstated in that it's just reporting on [affluent] people who are going to be successful anyway," she says. "I'm beginning to think that that line of research is telling us something important."
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aa5bf98959858f5bc6ffc560ff10383c | https://www.cnbc.com/2018/05/22/the-markets-fear-gauge-may-be-signaling-investors-arent-buying-the-rally.html | The market’s 'fear gauge' may be signaling investors aren't buying the rally | The market’s 'fear gauge' may be signaling investors aren't buying the rally
VIDEO1:1901:19The VIX is sending signals about the market rallyTrading Nation
A concerning disconnect may be emerging between equities and the market's measure of volatility, according to one portfolio manager. Dennis Davitt of Harvest Volatility Management told CNBC's "Trading Nation" he's carefully watching the Cboe Volatility Index, widely considered the market's "fear gauge" as it measures equities' expected volatility over 30 days. Here are his reasons why. • Stocks kicked off the week in rally mode across the board, with the Dow surging triple digits and going positive for the year, and the surging nearly 1 percent. • Despite the market's strong showing, Cboe's VIX didn't decline as much as investors might expect; it was briefly positive on the session, falling a bit more than 1 percent by the market's close. This signaled market participants may not be buying into the market's rebound from recent lows. • The lack of a major decline in the VIX during the rally, which is uncharacteristic, likely has much to do with global trade. If trade-related issues are not resolved with China, the market may very well pull back. At the moment, there's still uncertainty in the market that may not be fully reflected in the VIX. • In the sessions to come, Davitt will be closely watching how the VIX moves in a rising market. If it fails to pull back meaningfully, this would be a bearish signal. Bottom line: The market's gauge of volatility isn't falling as much as it typically would as stocks rally, which could be concerning for stocks, according to Davitt.
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37e976d9926046f2ab1d74e79065770d | https://www.cnbc.com/2018/05/22/trump-risks-fumbling-on-north-korea-iran-and-china.html | Trump risks fumbling on North Korea, Iran and China | Trump risks fumbling on North Korea, Iran and China
President Donald TrumpGetty Images
President Trump lately has juggled three related international challenges perilous enough to test the deftest diplomat. Suddenly he's at risk of fumbling all three.
His nuclear summit with North Korea may not happen, his trade confrontation with China has yielded little, and his decision to scrap the Iran nuclear deal has not produced a realistic path toward a new one. If the president possesses the deal-making skills he touts, he has succeeded mostly at concealing them.
Trump portrays the scheduled June 12 summit as the result of his threats to destroy North Korea if Kim Jong Un won't abandon nuclear weapons. He revels in talk by South Korean President Moon Jae-in that he deserves a Nobel Peace Prize for pushing North Korea to denuclearize, resolving an issue that stymied his predecessors.
VIDEO0:5900:59Trump says summit with North Korea might not work out for June News Videos
But North Korea has now publicly made clear it won't summarily surrender the weapons program that assures Kim's survival in power. Specialists in the region say it never intended to, that South Korea's Moon exaggerated the North's willingness to deal and lavished praise on Trump to lure the truculent U.S. president into bargaining.
"It is an open secret in Korea that this was just flattering Trump to prevent him from starting a war," Robert Kelly, a political scientist at Pusan University in South Korea, wrote on Twitter. "No one actually believes it. Trump actually drove South Korea to the table, not North Korea."
White House aides — after creating commemorative coins depicting Trump and Kim as peers — have recognized that Trump may not find the diplomatic triumph he craves. Meeting with President Moon at the White House today, Trump told reporters there's "a very substantial" the June 12 summit won't take place.
If Trump scuttles the trip, that would cast his talks with China in an even less flattering light. While pressing China for concessions on trade, Trump has signaled he would take into account Beijing's cooperation in pushing its North Korean neighbors to compromise.
No breakthroughs have emerged on either front. After high-level meetings in Beijing and Washington, Treasury Secretary Steven Mnuchin declared the trade war "on hold." The administration suspended implementation of $150-billion in tariffs that it announced in an attempt to pressure China for concessions.
Trump has made the most conspicuous concession so far, softening U.S. sanctions against the Chinese telecommunications giant ZTE. China has vowed only to purchase more American agriculture and energy products — without committing to any specific amounts.
Rival factions within the administration – one seeking to escalate conflict with China, the other to tamp it down – undercut the White House negotiating stance. Asked today if he's pleased with the talks, Trump acknowledged, "No. Not really."
Trade specialists say America needs concerted pressure from major allies to change China's economic behavior. On Iran, his third big international challenge, Trump has made such cooperation more difficult.
Trump scuttled the Iran nuclear agreement over opposition from the leaders of Britain, France and Germany, who had negotiated it in tandem with then-President Barack Obama. Even as those leaders aim to preserve the deal by themselves, the administration vows to restore U.S. economic sanctions on companies from their countries, too.
The White House insists it wants a new, improved Iran deal eliminating threats from Tehran beyond those nuclear weapons would pose. Secretary of State Mike Pompeo has laid out a list of negotiating demands, including that Iran ceases support for militant groups throughout the Middle East.
"If anyone – especially the leaders of Iran – doubt the president's sincerity or his vision, let them look at our diplomacy with North Korea," Pompeo said yesterday.
The shaky status of diplomacy with North Korea makes that a double-edged comparison. British Foreign Secretary Boris Johnson suggested Pompeo's demands were no more quickly achievable than Trump's call for immediate denuclearization in North Korea.
"At some point all-or-nothing diplomacy in which demand is piled upon demand morphs into a policy of regime change," Richard Haass, a senior foreign policy aide under President George W. Bush, wrote on Twitter. "That is where the Trump administration seems to be heading with North Korea and Iran. We will likely end up with neither peaceful outcomes nor regime change."
VIDEO1:0701:07President Trump talks trade and North KoreaPower Lunch
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35441b51d9abb80347f8d0d614482452 | https://www.cnbc.com/2018/05/22/us-hikes-tariffs-on-chinese-steel-exported-via-vietnam.html | US hikes tariffs on Chinese steel exported via Vietnam | US hikes tariffs on Chinese steel exported via Vietnam
A worker cuts a steel coil at the Novolipetsk Steel PAO steel mill in Farrell, Pennsylvania.Aaron Josefczyk | Reuters
The United States has raised tariffs on steel from Vietnam that Washington says originated in China and evaded anti-dumping duties on Chinese steel.
The announcement following this week's truce in a broader trade dispute between Beijing and Washington reflects the wide array of strains in the world's biggest trading relationship.
Importers of corrosion-resistant and cold-rolled flat steel from Vietnam will be required to post deposits to pay possible duties of 39 to 256 percent, the Commerce Department said Monday.
U.S. steel producers complained imports of Chinese-made steel through other countries soared after Washington imposed anti-dumping charges in 2015 to offset what it said were improper subsidies by Beijing.
Imports of cold-rolled steel from Vietnam rose from $9 million to $215 million, the Commerce Department said. It said imports of corrosion-resistant steel from Vietnam rose from $2 million to $80 million.
Products affected by the latest tariffs were made in Vietnam using Chinese steel. The Commerce Department said that triggers the same anti-dumping penalties as steel imported directly from China.
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808175d601d0b99e335858a9dedc0df7 | https://www.cnbc.com/2018/05/22/us-treasurys-lower-as-investors-await-federal-open-market-committee-minutes.html | US Treasury yields little changed as investors await Fed minutes | US Treasury yields little changed as investors await Fed minutes
U.S. government debt yields were largely flat Tuesday, ahead of the release of minutes from the latest Federal Reserve meeting due Wednesday. The yield on the benchmark 10-year Treasury note, which moves inversely to price, was largely unchanged at 3.071 percent, while the yield on the 30-year Treasury bond was also stagnant at 3.214 percent.
In data, the Richmond Fed surveys are due out at 10 a.m. ET. However, with little economic news expected Tuesday, fixed income investors are awaiting the Federal Reserve's latest meeting minutes, scheduled for publication Wednesday.
Treasurys
The minutes offer Wall Street an idea of how the central bank is thinking about the strength of the economy, with many expecting that the Federal Open Market Committee will raise rates in June to stay ahead of creeping inflation.
Minutes from their previous meeting showed that "all participants" expected both the economy to strengthen and inflation to rise "in coming months," citing strong spending patterns and a consistently tight labor market.
Consumer prices as measured by the personal consumption expenditures price index — the Fed's preferred inflation gauge — jumped 2 percent year-on-year in March, the biggest gain since February 2017.
The rising prices appear to be rising in part thanks to a competitive labor market, with the Labor Department reporting that the unemployment rate fell to 3.9 percent in April, the lowest level since December 2000.
Tighter labor markets are usually considered a bellwether of labor input wages in classical economics: When workers are in higher demand, employers will typically have to pay more for their services. Wages, in turn, are often seen as a prelude to higher prices throughout the economy as people spend more as their paychecks grow.
Rising inflation, which threatens Treasury prices because it erodes the purchasing power of their fixed payments, puts upward pressure on rates.
The Treasury Department auctioned $33 billion in two-year notes at a high yield of 2.59 percent, the highest yield at auction since July 2008. The bid-to-cover ratio, an indicator of demand, was 2.88. Indirect bidders, which include major central banks, were awarded 39.3 percent, the smallest share since December 2016 per Reuters data. Direct bidders, which includes domestic money managers, bought 15.3 percent.
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e6388a63548bf20b51ad37c6a85ae724 | https://www.cnbc.com/2018/05/22/venezuela-supply-shock-low-oil-price-era-is-dead-analyst-says.html | Low oil price era is 'dead' as crisis-stricken Venezuela risks a supply shock, analyst says | Low oil price era is 'dead' as crisis-stricken Venezuela risks a supply shock, analyst says
VIDEO3:0903:09Risk oil market could lose Iran's exports keeps prices ticking higher: ProSquawk Box Europe
The "lower for longer" oil price mantra is doomed, one oil analyst told CNBC Tuesday, amid heightened energy market fears of an imminent supply shock.
Prices in the oil market have been steadily rising since last year, with global benchmark Brent rising toward $80 a barrel Tuesday. An upswing in crude futures has largely been driven by OPEC-led production cuts and robust global demand. Yet, more recently, oil prices have rallied faster-than-expected due to elevated geopolitical tensions.
"I think the whole 'lower for longer' thesis is probably dead for a while," Amrita Sen, chief oil analyst at Energy Aspects, told CNBC's "Squawk Box Europe" Tuesday.
"We're looking at such a big potential disruption on the horizon … So the risk that you could lose such a big volume of crude oil exports from the market is what is keeping prices ticking higher," she added.
Sen joins a chorus of analysts warning about further price spikes amid the combined impact of falling crude output in crisis-stricken Venezuela, renewed U.S. sanctions on Iranian crude exports and wars in Syria and Yemen that involve major oil-producing countries.Last week, Pulitzer Prize-winning author and closely followed energy analyst, Dan Yergin, said he was particularly concerned about Venezuela — where the fundamentals of the oil market and geopolitics are both at play.
Oil workers conduct a drill in a petroleum well in Lagunillas at the east coast of Lake Maracaibo near Maracaibo City in Venezuela.Jorge Silva | Reuters
The Latin American country held disputed presidential elections on Sunday, in which socialist incumbent President Nicolas Maduro secured another six-year term in office. The vote, dismissed as a "sham" by the U.S. and several other global players, prompted President Donald Trump's administration to place fresh sanctions on Caracas on Monday.When asked whether she also believed supply disruption from Venezuela constituted a greater risk than the potential impact of looming U.S. sanctions against Iran, Sen replied: "I think Venezuela is a bigger risk. Their exports now are barely 1.1 million barrels per day."
"The U.S. came out with more sanctions overnight, not necessarily directly on oil, but again it just cripples their industry more and more. No major wants to operate there because they don't have personnel, equipment … it's a shambles."
The latest move to add further sanctions against Venezuela is an attempt to block Maduro from selling off government debt to enrich himself less than 24 hours after he claimed victory in the election. Maduro's leftist administration is almost entirely dependent on crude sales in order to try to decelerate its spiraling economic and social crises.
Meanwhile, the country's state oil company, PDVSA, is also battling mounting problems after it recently lost control of its refining and storage assets in the Caribbean to U.S. exploration and production company, ConocoPhillips.
Brent crude traded at around $79.78 on Tuesday morning, up around 0.7 percent, while WTI stood at $72.68, around 0.6 percent higher.
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4de9e34a0f33b981efbcda20bcc2cdc1 | https://www.cnbc.com/2018/05/22/volcanic-eruptions-on-kilauea-continue-to-scorch-the-big-island.html | Volcanic eruptions on Kilauea continue to scorch the Big Island | Volcanic eruptions on Kilauea continue to scorch the Big Island
Senior Airman John Linzmeier, of the Hawaii National Guard, walks away from a lava flow on Highway 137 southeast of Pahoa during ongoing eruptions of the Kilauea Volcano in Hawaii, U.S., May 20, 2018.Terray Sylvester | Reuters
The Kilauea volcano that began erupting more than three weeks ago continues to spew lava, ash and toxic gas on the Big Island of Hawaii.
Massive lava flows have scorched everything in its path, forcing the evacuations of more than 2,000 residents and already destroying several homes. The National Guard, scientists and residents can only stand by and monitor the slow and devastating destruction.
Here are a few of the dramatic scenes unfolding in Hawaii:
Lava flows downhill, in this image from a helicopter overflight of Kilauea Volcano's lower East Rift zone, during ongoing eruptions of the Kilauea Volcano in Hawaii, U.S., May 19, 2018.USGS | Reuters
Lava spills downhill in this image taken from a helicopter over Kilauea Volcano's lower East Rift zone during ongoing eruptions on May 19, 2018.
Lava erupts and flows from a Kilauea volcano fissure on Hawaii's Big Island on May 18, 2018 in Kapoho, Hawaii.Maria Tama | Getty Images
A lone tree is scorched by erupting lava flows from a Kilauea volcano fissure on May 18, 2018, in Kapoho, Hawaii.
People play golf as an ash plume rises in the distance from the Kilauea volcano on Hawaii's Big Island on May 15, 2018 in Hawaii Volcanoes National Park, Hawaii.Mario Tama | Getty Images
People play golf as an ash plume rises in the distance from the Kilauea volcano on May 15, 2018, in Hawaii Volcanoes National Park.
Lava erupts from a fissure east of the Leilani Estates subdivision during ongoing eruptions of the Kilauea Volcano in Hawaii, U.S., May 13, 2018.Terray Sylvester | Reuters
An aerial view showing lava erupting from a fissure east of the Leilani Estates subdivision on May 13, 2018.
Lava flows into the Pacific Ocean southeast of Pahoa during ongoing eruptions of the Kilauea Volcano on May 20th, 2018.Terray Sylvester | Reuters
Lava flows into the Pacific Ocean southeast of Pahoa during ongoing eruptions of the Kilauea Volcano on May 20, 2018.
Lava flows near a house on the outskirts of Pahoa during ongoing eruptions of the Kilauea Volcano in Hawaii, U.S., May 19, 2018.Terray Sylvester | Reuters
Lava flows near a house on the outskirts of Pahoa on May 19, 2018.
Lava erupts and flows from a Kilauea volcano fissure, near to the Puna Geothermal Venture (PGV) plant (TOP R), on Hawaii's Big Island on May 21, 2018 near Pahoa, Hawaii. The plant, currently shut down in the wake of encroaching volcanic activity, provides electricity to around 25 percent of the island.Mario Tama | Getty Images
Lava erupts and flows from a Kilauea volcano fissure, near the Puna Geothermal Venture plant. The facility, currently shut down because of the volcanic activity, provides electricity to about 25 percent of the island.
Steam plumes rise as lava enters the Pacific Ocean, after flowing to the water from a Kilauea volcano fissure, on Hawaii's Big Island on May 21, 2018 near Pahoa, Hawaii.Getty Images
Steam plumes rise as lava enters the Pacific Ocean, after flowing to the water from a Kilauea volcano fissure, on May 21, 2018, near Pahoa.
Lava flows at a new fissure in the aftermath of eruptions from the Kilauea volcano on Hawaii's Big Island as a local resident walks nearby after taking photos on May 12, 2018 in Pahoa, Hawaii.Mario Tama | Getty Images
Lava flows at a new fissure as a local resident walks nearby after taking photos on May 12, 2018, in Pahoa.
Smoke and volcanic gases rise as lava cools in the Leilani Estates neighborhood, in the aftermath of eruptions and lava flows from the Kilauea volcano on Hawaii's Big Island, on May 11, 2018 in Pahoa, Hawaii.Maria Tama | Getty Images
Smoke and volcanic gases rise as lava cools in the Leilani Estates neighborhood, in the aftermath of eruptions and lava flows from the Kilauea volcano on Hawaii's Big Island, on May 11, 2018.
Journalists and Hawaii National Guard soldiers document a lava flow on Highway 137 southeast of Pahoa during ongoing eruptions of the Kilauea Volcano in Hawaii, U.S., May 20, 2018.Terray Sylvester | Reuters
Journalists and Hawaii National Guard soldiers document a lava flow on Highway 137 southeast of Pahoa during ongoing eruptions of the Kilauea Volcano in Hawaii, on May 20, 2018.
A young resident keeps an eye on lava from a Kilauea volcano fissure erupting and flowing near her home on Hawaii's Big Island on May 19, 2018 in Kapoho, Hawaii.Mario Tama | Getty Images
A young resident keeps an eye on lava from a Kilauea volcano fissure erupting and flowing near her home on Hawaii's Big Island on May 19, 2018, in Kapoho.
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d387a7718394d2a60677c229486c483e | https://www.cnbc.com/2018/05/22/watch-spacex-go-for-its-10th-rocket-launch-this-year.html | Watch SpaceX go for its 10th rocket launch this year | Watch SpaceX go for its 10th rocket launch this year
[The stream is slated to start at 3:30 p.m. ET. Please refresh the page if you do not see a player above at that time.]
SpaceX is set to launch Tuesday afternoon from California in its latest mission for NASA and satellite communications company Iridium.
Elon Musk's rocket company will livestream the 3:47 p.m. ET launch from Vandenberg Air Force Base. The mission will launch using a Falcon 9 rocket, which will not return to land on the SpaceX autonomous ship which the company has in the Pacific Ocean.
@SpaceX: Static fire test of Falcon 9 complete—targeting May 22 launch of Iridium-6/GRACE-FO from Vandenberg Air Force Base in California.
The company is expected to attempt to catch the fairing — the bulbous nose cone on top of the rocket.
The SpaceX Falcon 9 rocket used for the third Iridium NEXT launch, set to be flown again for the fifth Iridium launch.SpaceX
SpaceX has attempted to catch the fairing after two previous West Coast launches, using a high speed boat known as "Mr. Steven."
The boat has a net strung up behind it to capture the fairing and Musk said SpaceX "should be able catch it with slightly bigger chutes to slow down" its descent.
"[The fairing] has onboard thrusters and a guidance system to bring it through the atmosphere intact, then releases a parafoil and our ship with basically a giant catcher's mitt welded on tries to catch it," Musk said when he shared a photo on Instagram.
High-speed SpaceX boat "Mr. Steven" in the Pacific Ocean.Instagram | Elon Musk
After the Feb. 22 launch from Vandenberg, Musk tweeted that the boat missed catching the fairing "by a few hundreds meters," adding that the fairing slowed down enough to land "intact" in the Pacific Ocean.
Musk has noted that the fairing returns to Earth "at about eight times the speed of sound."
SpaceX announced before the launch it would "not attempt to recover" the Falcon 9's first stage. As SpaceX brings about a new variation of the Falcon 9 booster, known as "Block 5," older models are being discarded through expendable missions. SpaceX is using ocean landings to test more booster recovery options.
The mission launches five satellites for Iridium, as the company nears completion of its 75 satellite constellation. Two satellites for NASA are also on board the rocket, for the Gravity Recovery and Climate Experiment Follow-On mission. The satellites, which are a collaboration with the German Research Centre for Geosciences, will monitor changes in the world's water cycle and surface mass by measuring shifts in the Earth's gravitational forces.
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d2b29aa8ef08d914f220ecc2831bfab9 | https://www.cnbc.com/2018/05/22/your-first-trade-for-tuesday-may-22.html | VIDEO1:0801:08Final Trade: X, DE & MoreFast Money
The "Fast Money" traders shared their first moves for the market open.
Tim Seymour was a buyer of U.S. Steel.
Brian Kelly was a buyer of Deere & Company.
Dan Nathan was a buyer of PayPal.
Guy Adami was a buyer of Wynn Resorts.
Trader disclosure: On May 21, 2018, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Tim Seymour is long AMZA, ACB.TO, APC, APH.TO, BABA, BAC, BX, C, CCJ, CLF, CMG, CRON, CSCO, CX, DAL, DPZ, DVYE, EEM, ERJ, EUFN, EWM, FB, FXI, GE, GILD, GM, GOOGL, GWPH, HAL, INTC, JD, LEAF, MAT, MCD, MO, MOS, MPEL, PAK, PHM, PYPL, RH, RL, SBUX, SQ, T, TIF, TWTR, UA, UAL, VALE, VIAB, VOD, X, XLE, XRT, YNDX, 700.HK. Tim is short IWM, RACE, SPY. Brian Kelly is long AMD, CBOE, CME, GCAP, GS, HIVE, IBM, MCB, MSFT, MU, NVDA, ORCL, OSTK, RHT, SAP, SHG, SHOP, SIVB, SQ, STX, TSM, Bitcoin, Ethereum, Litecoin, Cardano, Bitcoin Cash, Stellar, EOS, STORM. Dan Nathan is short QQQ, SMH, SPY. Guy Adami is long CELG, EXAS, GDX, INTC. Guy Adami's wife, Linda Snow, works at Merck.
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264d9d5cd47e8e4f6e87f09eaa25c203 | https://www.cnbc.com/2018/05/22/zte-is-a-national-security-threat-says-sen-mark-warner.html | Trump's way of handling Chinese telecom company ZTE is 'very dangerous,' says Sen. Mark Warner | Trump's way of handling Chinese telecom company ZTE is 'very dangerous,' says Sen. Mark Warner
VIDEO4:4904:49Sen. Warner: ZTE poses national security threatPower Lunch
Sen. Mark Warner said President Donald Trump's ambivalent stance on Chinese telecommunications company ZTE is "very dangerous."
"This is a company that poses a national security threat," the Democrat from Virginia told CNBC on "Power Lunch" on Tuesday. "And if that threat is real, and we're going to listen to the intelligence community, this is a company that has violated American sanctions rules."
"For [Trump] to arbitrarily, depending on which day ... he wants to tweet, to decide whether this ought to have the kind of sanctions that the law implied or is he going to arbitrarily choose another route, I find that very dangerous. And not the way we want to send a message ... to a country like China."
On Tuesday, the president said his administration had not yet reached an agreement on whether to save ZTE. The company is currently under sanctions by the U.S. government.
At a press conference, Trump denied a Wall Street Journal report saying his administration had reached a tentative deal with Beijing. Still, moments later he said he may seek "a very large fine" against the company, up to $1.3 billion, and would like to see new management at ZTE — some of the framework outlined in the deal reported by the Journal.
Warner said many of his constituents are concerned that the president is "arbitrarily pick[ing] out a company" — one that has been the subject of security concerns, no less — and using it as a "trading chip."
The senator added that Trump has been "outfoxed" in negotiations with China, a country he said operates "on a different set of rules."
"It is the unanimous agreement of the intelligence community that they don't think we should be buying ZTE equipment," said Warner, who is also vice chairman of the Senate Intelligence Committee.
"The president, who seems to be not informed with what his own intelligence community's conclusions are, one day he says he's going to be tough, the next day he's talking about saving Chinese jobs, and now he's got this kind of in-the-middle position," Warner said. "I don't think that's how we ought to be operating."
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52188576f127f131db6a08514eb3a6c2 | https://www.cnbc.com/2018/05/23/after-hours-buzz-wsm-lb-more.html | Stocks making the biggest moves after hours: Williams-Sonoma, L Brands and more | Stocks making the biggest moves after hours: Williams-Sonoma, L Brands and more
Pedestrians pass in front of a Victoria's Secret store in New York.Scott Mlyn | CNBC
Check out the companies making headlines after the bell:
Shares of Williams-Sonoma soared nearly 15 percent in after hours trading. The home and kitchen retailer reported first quarter earnings and revenue that blasted past analyst expectations and prompted the company to strengthen outlook for fiscal 2018 revenue and earnings. Williams-Sonoma reported EPS of 67 cents on revenue of $1.2 billion, versus the 58 cents on $1.16 billion Wall Street expected. The company also reported strong comparable brand revenue growth, 5.5 percent versus the 4 percent expected.
L Brands stock plunged more than 6 percent after the bell. The parent company of brands like Victoria's Secret and Bath and Body Works reported first quarter financial results that beat analyst expectations on both top and bottom lines, but weakened second quarter guidance. L Brands issued guidance for second quarter earnings per share between 30 and 35 cents. Wall Street was expecting EPS of 41 cents.
Shares of L Brands are down about 43 percent year-to-date.
NetApp stock is down more than 4 percent in the extended session, despite a strong first quarter financial report. The company beat Street expectations on top and bottom lines and reported second quarter EPS outlook that fell within the range analysts projected.
NetApp shares have been performing well, up 20.7 percent year-to-date and 69 percent year-over-year.
Shares of Destination Maternity, which owns Pea in the Pod, soared more than 17 percent in extended trading. A group of activists won a proxy battle to seat more women on the company's board. Shareholders voted in favor of a dissident slate of board nominees on Wednesday. The winning slate had three women and one male nominee.
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30e52400fee0d27d4e41f59e0bcbf590 | https://www.cnbc.com/2018/05/23/buy-tesla-because-media-negativity-is-increasingly-immaterial-baird.html | Tesla to rally 50% because media negativity is ‘increasingly immaterial’: Baird | Tesla to rally 50% because media negativity is ‘increasingly immaterial’: Baird
Elon Musk, co-founder and chief executive officer of Tesla Inc.Alberto E. Rodriguez | Getty Images
The deluge of recent negative media coverage on Tesla is missing the real story, according to one Wall Street firm.
Baird reiterated its outperform rating for Tesla shares, predicting the electric car maker will make significant progress in raising its Model 3 production volumes.
"Negative headlines have increased substantially in the past month and, in our opinion, increasingly immaterial reports have dominated news cycles," analyst Ben Kallo said in a note to clients Wednesday. "We think we have hit a peak in negative coverage/sentiment, and believe shares could appreciate significantly with execution, which should coincide with an improvement in sentiment."
VIDEO2:2402:24Why Tesla's Model 3 production pause is a big deal: Loup's Gene MunsterClosing Bell
The analyst reaffirmed his $411 price target for Tesla shares, representing 49.5 percent upside to Tuesday's close.
Kallo predicts Tesla will eventually fix its production issues with the Model 3. He noted that production deliveries rose 83 percent annually since 2012 for its previous vehicles.
"Tesla has managed to successfully ramp production of the Model S and X, albeit on a slower timeline than initially expected," he said. "While the Model 3 production delay is (rightfully) a focus for investors, we believe a six month production delay is minor over the long run."
Tesla's shares are down 11.7 percent year to date through Tuesday compared with the S&P 500's 1.9 percent return. The company's stock closed up 1.5 percent Wednesday.
Tweet Link
Later on Wednesday CEO Elon Musk commented on the Baird report and criticized media company coverage.
"The holier-than-thou hypocrisy of big media companies who lay claim to the truth, but publish only enough to sugarcoat the lie, is why the public no longer respects them," he said on Twitter.
— CNBC's Michael Bloom contributed to this story.
VIDEO5:3105:31Tesla's earnings were better than expected, but Elon Musk still has a lot on his plateDigital Original
Disclaimer
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a2b66bd4855ae290658895d1c5943d46 | https://www.cnbc.com/2018/05/23/cheating-workers-out-of-wages-is-easier-than-ever.html | Cheating workers out of wages is easier than ever | Cheating workers out of wages is easier than ever
A worker inserts his employee time card into a punch clock.James W. Welgos | Welgos | Getty Images
Jara Neal Willis, a nurse at a hospital in Texas, usually clocked in a few minutes before the start of her shift and stayed late whenever her patients needed help. Her lunch breaks were often cut short by requests from doctors, patients or their families.
Willis and her colleagues, however, claimed they were not paid for those extra few minutes worked before and after their shifts. Or for working during lunch breaks.
It wasn't because of mischievous gremlins falsifying their time cards in a backroom, but settings in the software the hospital used to track comings and goings. Two features alone, "rounding" and "automatic break deductions," could result in the loss of up to 44 minutes a day – or US$1,382 a year at the federal minimum wage.
More from The Conversation: Why raising the minimum wage isn't the best way to reduce inequalitySupreme Court ruling against class action lawsuits is a blow for workers – and #MeTooHow timekeeping software helps companies nickel and dime their workers
Timekeeping software was the focus of a study I co-authored last year documenting how it could be used to facilitate wage theft.
But it left a lingering question: Did companies actually use these features to shortchange workers? Based on my review of hundreds of lawsuits like Willis', the answer is yes – and it's just the tip of the iceberg.
"Wage theft" is a shorthand term that refers to situations in which someone isn't paid for the work. In its simplest form, it might consist of a manager instructing employees to work off the clock. Or a company refusing to pay for overtime hours.
A report from the Economic Policy Institute estimated that employees lose $15 billion to wage theft every year, more than all of the property crime in the United States put together.
That report, however, focused on workers being paid less than the federal or state minimum wage. Our 2017 study, which was based on promotional materials, employer policies and YouTube videos, suggested that companies can now use software to avoid paying all sorts of hourly workers.
When an employee clocks in for the day – using a computer login, ID badge or phone – that employee's time log becomes a form of data.
I wanted to know if there was any evidence that employers have ever used rounding and automatic break deductions to change that data, to their workers' detriment. So I did what law professors normally do in such situations: I ran a search of legal opinions to see if there were any cases in which workers sought to reclaim wages lost through digital wage theft.
Before our study, I hadn't even heard of this practice, so I expected to find only a handful of cases. Instead, I found hundreds and hundreds of legal opinions involving digital wage theft. And this suggests there are hundreds more because, typically, for every case that results in a legal opinion many more do not.
I decided to read a bunch to get a flavor for what employees were claiming and a window into how employers were using the software. I eventually stopped after wading through more than 300 cases, which are described in a study published in the American Business Law Journal.
The study's methodology does not support quantitative inferences about how often digital wage theft occurs or how much money U.S. workers have lost to these practices over time.
But what I can say is that this is not a theoretical problem. Real workers have lost real money to these practices.
Rounding – the functionality used to nickel and dime workers like Jara Willis – is a convenient way for companies to consistently reclaim employee hours.
This illustrates how a rounding system to the quarter hour works.
Even though the software can precisely record the time an employee clocks in and out, the "rounding" functionality changes that time according to a preset increment. Companies argue they use it to increase payroll predictability.
The preferred rounding increment in the cases I reviewed appeared to be to the quarter hour. So arriving to work at 8:53 a.m. would be rounded to 9, while 8:52 would become 8:45.
In theory, employees could even the odds when it comes to rounding by carefully timing their arrivals and departures. They could show up late or leave early, or punch in extra early or leave extra late.
But companies have two extra weapons to corral employee punches to work in their favor: policies and discipline. Yes, you could show up late or leave early, but then you'd be flagged for discipline under the attendance policy.
Sometimes employers in these cases further stacked the deck by prohibiting workers from punching in more than seven minutes early. Others actually "invited" employees to punch in up to seven minutes early, labeling it a "grace period," as though it were an accommodation to workers.
Willis' hospital, however, took a highly unusual approach to persuading workers to clock in during periods that favored the hospital. According to testimony from that case, supervisors labeled any employee who clocked in too early or out too late, thereby gaining minutes under the rounding system, a "moocher."
One manager even posted "no mooching" signs with a picture of a cow and a time clock in the hospital hallway.
Rounding works the odds, sort of like a casino. And in fact, some of the cases I reviewed actually involved casino workers, perhaps because they are especially attuned to statistics and realize they're on the wrong side of the equation.
In one case brought by casino workers, the plaintiff's expert estimated that the 2,100 employees who opted into the lawsuit lost 87,710 hours over a five-year period, or roughly $950,000 at their $10.80 average hourly rate.
This is a casino worker's time records, annotated by plaintiff's counsel in litigation.
But the company's rounding policy actually covered 28,000 employees. If those workers were similarly affected by the policy, that would have meant a loss of about 1.17 million hours, or $12.6 million in wages the company was able to reclaim through the rounding policy over five years.
The case settled for $450,000, about half of which went to attorneys' fees. In other words, even though this particular company was caught, dragged through litigation and forced to settle, it still would have made a hefty profit from its rounding policy. That's not exactly a deterrent.
Employers also reclaim time through what is known as "automatic break deductions." The software assumes that you took your full meal break, even if you didn't.
In some workplaces, taking a lunch break can be difficult, especially for those providing patient care in hospitals and nursing homes. Studies of nurses suggest that they are completely unable to take breaks in about 10 percent of shifts and aren't relieved of duty for meals and breaks in about 40 percent.
In the cases I reviewed, companies didn't make it easy for workers to override the break deduction. Employees complained that they didn't have authorization to do so and instead had to fill out an extra paper form. Or ask their supervisor for approval. Or both.
Companies even discouraged workers from doing so. A nurse received an "action plan" from her hospital after requesting too many break overrides. Rather than fixing the staffing problems that led to the missed breaks, the hospital recommended that she "keep snacks in her office."
So how did this problem come about in the first place?
These types of employer abuses are made possible by half-century-old rules that permitted rounding because at the time companies had to calculate hours by hand.
The outdated regulations assume that rounding will "average out" in the long term, essentially forcing workers to prove that they don't – as in the cases I reviewed.
That leaves employers free to use rounding because it's theoretically possible that it all might average out. And because collective litigation to recover lost wages requires affected workers to "opt in" to a class action suit, only a small fraction of workers ever get their money back.
What's more, the outdated regulations don't even mention automatic break deductions. That leaves courts struggling to figure out what's fair in cases where there often isn't even an electronic record of the missed break.
This problem is not going away. As long as these regulatory loopholes exist, employers and software makers will find ways to exploit them. That means if you're paid an hourly wage, you may very well be losing out.
Commentary by Elizabeth C. Tippett, an Associate Professor at the School of Law at University of Oregon. She is also a contributor at The Conversation, an independent source of news and views from the academic and research community. Follow her on Twitter @tippettliz.
For more insight from CNBC contributors, follow @CNBCopinion on Twitter.
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643f09ec5ee225668f9f0ef4da21435b | https://www.cnbc.com/2018/05/23/chipotle-and-two-other-once-left-for-dead-stocks-are-surging-this-year.html | Chipotle and two other once left-for-dead stocks are surging this year, and some say they are still a buy | Chipotle and two other once left-for-dead stocks are surging this year, and some say they are still a buy
VIDEO3:4103:41Once left-for-dead stocks are surging this yearTrading Nation
Three stocks that got pummeled last year — TripAdvisor, Chipotle and Under Armour — are making impressive rebounds in 2018. All three show promise for the rest of the year, according to some market strategists.
TripAdvisor, one turnaround stock burning up the charts, looks like it has even more potential to Miller Tabak equity strategist Matt Maley. That stock has done a 180 this year, rebounding 41 percent after a 26 percent decline in 2017.
"Over the last month, I was very worried about this stock because it was a little overbought, it was coming up against some key resistance levels," Maley told CNBC's "Trading Nation" on Tuesday. "But it broke above those resistance levels."
TripAdvisor is now bumping up against the long-term trendline stretching back to its 2014 highs. Chances are good that it can break through that resistance level, Maley said.
"The short interest in the stock is still very, very high so [if] you get another breakout move above another resistance level, those shorts are going to be squeezed again and it could move quite a bit higher," said Maley.
Short interest in TripAdvisor shares is at 19.3 percent of its total float.
Chipotle and Under Armour look like buys to Larry McDonald, editor of the Bear Traps Report. Chipotle is up 50 percent in 2018 after a 23 percent decline last year, while Under Armour has increased 39 percent following a 50 percent drop in 2017.
"Definitely buy the dips in Chipotle and Under Armour, especially on the Chipotle side," McDonald said Tuesday on "Trading Nation." "If you look at [activist investor Bill] Ackman and his history of ownership in some of these names, … there's a chance that he could try to force an acquisition."
Ackman's hedge fund Pershing Square owns a 10 percent stake in Chipotle as well as a 10 percent position in Burger King parent Restaurant Brands.
Disclaimer
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b48368632e5bc69444c3af588ec80d7b | https://www.cnbc.com/2018/05/23/cnbc-exclusive-cnbc-transcript-icahn-enterprises-chairman-carl-icahn-speaks-with-cnbcs-scott-wapner-today.html | CNBC EXCLUSIVE: CNBC TRANSCRIPT: ICAHN ENTERPRISES CHAIRMAN CARL ICAHN SPEAKS WITH CNBC’S SCOTT WAPNER TODAY | CNBC EXCLUSIVE: CNBC TRANSCRIPT: ICAHN ENTERPRISES CHAIRMAN CARL ICAHN SPEAKS WITH CNBC’S SCOTT WAPNER TODAY
WHEN: Today, Monday, May 21, 2018
WHERE: CNBC's "Fast Money Halftime Report"
Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Icahn Enterprises Chairman Carl Icahn and CNBC's Scott Wapner on CNBC's "Fast Money Halftime Report" (M-F 12PM-1PM) today, Monday, May 21st. Following is a link to full interview on CNBC.com: https://www.cnbc.com/video/2018/05/21/carl-icahn-on-his-latest-investments.html?play=1.
All references must be sourced to CNBC.
SCOTT WAPNER: SOME INTERESTING NEWS TODAY REGARDING INVESTORS CARL ICAHN AND KEITH MEISTER WHO ARE TEAMING UP TO GO ACTIVE IN A COMPANY CALLED ENERGEN THE TWO FILING A JOINT 13-D TODAY, REVEALING MR. ICAHN HAS BOUGHT 2 MILLION SHARES IN THE COMPANY FROM CORVEX WITH AN OPTION TO BUY ANOTHER 2 MILLION SHARES. CORVEX HAS HAD A POSITION IN ENERGEN AND STRUCK A DEAL WITH THE COMPANY IN MARCH FOR A COUPLE BOARD SEATS. TOGETHER NOW ICAHN AND MEISTER HAVE A 9.9% STAKE IN THE COMPANY. CARL ICAHN JOINING US LIVE BY PHONE. WELCOME BACK.
CARL ICAHN: GOOD TO TALK TO YOU.
WAPNER: YOU AS WELL HOW DID THIS WHOLE THING COME ABOUT WHERE YOU AND KEITH MEISTER, AS WE SAY, ARE BACK TOGETHER AGAIN?
ICAHN: YEAH WE'RE BACK. KEITH CALLED ME ON FRIDAY. CAME OVER FRIDAY AFTERNOON, TOWARD THE EVENING, AND WE TALKED ABOUT ENERGEN, AND INTERESTINGLY, LATELY, MORE THAN USUAL, A LOT OF SHAREHOLDERS OF DIFFERENT COMPANIES HAVE BEEN CALLING ME WHEN THEY FEEL LIKE THEY'RE BEING, SHALL WE SAY, ABUSED BY THE MANAGEMENT OR THAT'S TOO STRONG OF A WORD. I GUESS YOU SAY TAKEN ADVANTAGE OF IN SOME WAY. AND YOU KNOW, KEITH I RESPECT QUITE A BIT, AND WE TALKED ABOUT THIS COMPANY AND I LOOKED INTO IT MORE. ONE OF MY ANALYSTS HAS BEEN LOOKING AT IT A BIT ANYWAY, AND WE LOOK AT RISK/REWARD QUITE A BIT. AND IN THIS CASE, IT STANDS OUT VERY CLEARLY THAT THE COMPANY, AT LEAST IN MY OPINION, KEITHS OBVIOUSLY, IS VERY UNDERVALUED SO WE BOUGHT SOME STOCK IN IT. NOW WE'RE A GROUP WITH KEITH.
WAPNER: YOU SAY IN THE D YOU FILED THAT YOU LOOK AT THE COMPANY AS BEING UNDERVALUED. BUT THAT YOU RESERVE THE RIGHT OR WITH OTHERS, YOU COULD BE INTERESTED IN PURCHASING THE COMPANY. LET ME JUST BE CLEAR: ARE YOUR FIRST INTENTIONS WITH MEISTER TO HAVE THE COMPANY, WHICH HAS ALREADY SAID ITS UNDERGOING THIS STRATEGIC REVIEW, TO PUT ITSELF UP FOR SALE AND FOR ONE OF THE MAJORS TO COME IN AND BUY IT? IS THAT THE FIRST CHOICE?
ICAHN: WELL, LET ME PUT IT ANOTHER WAY. IF I COULD BUY THIS COMPANY, I BELIEVE JUST LOOKING AT IT, AND I'M NOT YET EXPERT IN IT I PERSONALLY THINK IT'S UNDERVALUED. IEP HAS THE CAPITAL WE HAVE DONE QUITE WELL LATELY AND HAVE A LAW OF CASH AROUND. WE COULD BUY THIS COMPANY WITH KEITH, WITHOUT KEITH, WITH A GROUP, WITHOUT A GROUP. HOWEVER, I DON'T PRESUME TO FEEL I'M THE RIGHT BUYER FOR IT BECAUSE THERE'S SUCH SYNERGIES FOR ANOTHER COMPANY. FOR INSTANCE, YOU LOOK AT RSP AND CONCHO, AND CONCHO FOUND WHEN THEY BOUGHT RSP, THEY FOUND SYNERGIES OF OVER $2 BILLION AND IF YOU LOOK AT RSP, WHICH IS VERY, I THINK, QUITE SIMILAR TO ENERGEN, THAT WE – FOR INSTANCE, THEY PAID $80,000 AN ACRE FOR RSP WE SELL TODAY IN THE MARKET AT $27,000 AN ACRE. THEY PAID TEN TIMES EBITDA, WE SELL AT SEVEN TIMES EBITDA YOU DON'T HAVE TO BE A GENIUS TO PUT THOSE NUMBERS TOGETHER AND REALIZE THAT JUST BASED ON THOSE NUMBERS THAT ENERGEN IS WORTH WELL OVER $100 A SHARE. I COULDN'T AFFORD TO PAY THAT BECAUSE I DON'T HAVE THE SYNERGIES. SO WHAT WE DO AT IEP, WE LIKE TO BUY THINGS RELATIVELY CHEAPLY, WHERE COMPANIES ARE UNDERVALUED. ONE OF THE MAJOR REASONS IS, TO SAY IT BLUNTLY, IS THE BOARD ISNT DOING WHAT I CONSIDER TO BE THEIR JOB, WHICH IS TO LET SHAREHOLDERS DECIDE IF IT SHOULD BE SOLD, NOT THEM. AND THAT'S WHERE WE DISAGREE WITH A LOT OF BOARDS THERE ARE MANY VERY GOOD BOARDS IN THIS COUNTRY, AND ENERGEN MIGHT WELL BE A GOOD BOARD. I DON'T KNOW ENOUGH ABOUT THEM AT THIS POINT, BUT THEY DID SAY, AND THEY DID AGREE THEY WERE GOING TO DO A PROCESS ON MARCH 7th, AND NOBODY HAS HEARD ABOUT THAT PROCESS YET. SO WE'RE SAYING HEY, LOOK. IF THEY'RE GOING TO SAY WELL, NOBODY IS REALLY INTERESTED IN OUR COMPANY, WHICH WE HAVE RUN INTO BEFORE, AND ACTUALLY BOUGHT SOME COMPANIES CHEAPLY BECAUSE OF THAT, I WOULD CERTAINLY BE INTERESTED IN IT. BUT THAT DOESN'T MEAN THAT I PRESUME I WOULD BE THE BEST BUYER, AND I DON'T THINK I WOULD BE.
WAPNER: IT SOUNDS, AT LEAST SOMEWHAT, AS THOUGH YOU AND MEISTER TOGETHER, IT MAY BE A WAY THAT MEISTER COULDN'T DO ON HIS OWN OR DIDN'T WANT TO OR WHATEVER, BY GETTING YOU INVOLVED, IT'S ESSENTIALLY PUTTING THE COMPANY ON NOTICE. YOU BETTER NOT ONLY FINISH THE STRATEGIC AND TELL US WHERE YOU ARE, PUT YOURSELF UP FOR SALE, AND HOPEFULLY ATTRACT A BIG MAJOR BIDDER FOR THESE, YOU KNOW, PURE PLAY PERMIAN ASSETS IF YOU DON'T, WE COULD BUY YOU, TOO, IN WHICH CASE YOU'RE NOT GOING TO BE AS HAPPY, PERHAPS, WITH THE OUTCOME IF WE COME IN AND CLEAR THE DECKS, SO TO SPEAK. IS THAT A FAIR ASSESSMENT?
ICAHN: I THINK YOU'RE SAYING IT -- PERHAPS TOO MUCH OF A HOSTILE WAY AT THIS POINT. IN OTHER WORDS, KEITH MEISTER HAS BEEN PRETTY MUCH OF AN ACTIVIST IN THAT COMPANY ALREADY, AND THEY MADE AN ARRANGEMENT WHERE I THINK KEITH WAS APT TO SUGGEST TWO BOARD MEMBERS. AND THEY ALSO PROMISED THEY WOULD DO A PROCESS, WHICH MEANS A STRATEGIC PROCESS WHICH MEANS TO SEE IF ANYBODY REALLY WANTS TO BUY IT. THAT'S AT LEAST THE WAY WE DISCUSSED IT, I DISCUSSED IT WITH KEITH, YET, WE HAVEN'T HEARD FROM THEM. AND I'M JUST SAYING, LOOK, IT'S A GOOD COMPANY IT'S AN UNDERVALUED COMPANY. AND SHAREHOLDERS DESERVE TO HAVE A CHOICE IF THEY WANT TO SELL THIS COMPANY SO PUT IT, YOU KNOW, THEY SAID THEY WOULD DO A PROCESS. LET'S SEE IF THERE ARE ANY GOOD BIDS AROUND. AND YOU KNOW, AND I THINK THAT'S BASICALLY THE STORY HERE.
WAPNER: YOU'RE CONFIDENT, THOUGH, THAT THERE IS A MAJOR OUT THERE IN THE ENERGY PATCH, THOUGH, THAT WILL TAKE A LOOK AT THESE ASSETS AND REALIZE HOW UNDERVALUED THEY ARE CURRENTLY AND WHAT THEY HAVE, 150,000 ACRES IN PERMIAN, A PURE PLAY, THAT THIS COMPANY IS EXACTLY THE KIND OF ASSET WHERE ENERGY CURRENTLY IS, THE COMEBACK IN OIL PRICES, ET CETERA, THAT ITS TIME TO POUNCE ON THIS ASSET BY A MAJOR ENERGY COMPANY.
ICAHN: AND MORE IMPORTANTLY, YOU LOOK FOR UNIQUE SITUATIONS THE ACTIVIST MODEL, YOU LOOK FOR UNIQUE SITUATIONS. IN THIS CASE, YOU HAVE PERMIAN WITH GREAT OIL RESERVES. AND YET IT'S DONE SO WELL IN PRODUCING OIL THAT THERE AREN'T ENOUGH PIPELINES AT CAPACITY SO A COMPANY THAT HAS – THERE ARE COMPANIES WITH LARGE PIPELINE CAPACITIES THAT DON'T HAVE ENOUGH OIL. AND I THINK THEY WOULD BE VERY ANXIOUS TO BUY A COMPANY LIKE ENERGEN AT THIS TIME THAT'S MY OPINION. NOW, AND IT'S OBVIOUSLY KEITHS. AND YET ONE OF THE THINGS THAT I THINK KEITH POINTED OUT AND NOW I AGREE COMPLETELY IS WHY HASN'T THAT PROCESS BEGUN. WHY HAVEN'T THEY JUST SAID, HEY, LOOK, SHAREHOLDERS OBVIOUSLY WANT TO HAVE THE ABILITY TO CHOOSE WHETHER OR NOT THEY WANT TO SELL THIS AND THEY WANT TO SEE IF THERE ARE BUYERS AROUND. AND ENERGEN, WHERE ARE YOU WHY AREN'T YOU DOING YOUR PROCESS? YOU SAID YOU WOULD DO IT. IT DOESN'T TAKE THAT LONG. YOU KNOW, WE COULD GET A MAN TO THE MOON QUICKER THAN THAT WHY DON'T YOU PUT THAT PROCESS OUT?
WAPNER: THE OTHER WILD CARD IN ALL OF THIS IS THAT ELLIOTT AND PAUL SINGER, CARL, I'M SURE YOU KNOW, HAVE A 4% POSITION TO YOUR 9.9% JOINT POSITION NOW WITH MEISTER. HAVE YOU HAD ANY COMMENT OR CONVERSATION AT ALL WITH ELLIOTT? DO YOU KNOW WHAT THEIR INTENTIONS ARE? DO THEY SUPPORT YOU AND MEISTER? WHERE ARE WE ON THAT?
ICAHN: I HAVE NOT HAD ANY CONVERSATIONS WITH PAUL. I KNOW HIM I RESPECT HIM GREATLY, BUT I HAVE NOT TALKED TO PAUL. YOU KNOW, I HAVE BEEN FOCUSING ON -- WE HAVE BEEN BUSY JUST WITH, YOU KNOW, WITH XEROX AND SANDRIDGE AS AN ACTIVIST, AMTRUST, WERE DOING AS WE SPEAK. AMTRUST, INTERESTINGLY, WE HAD THE SAME TYPE OF THING A LITTLE BIT WHERE WE GOT CALLED BY A NUMBER OF SHAREHOLDERS TO HELP THEM OUT WITH WHAT'S GOING ON IN AMTRUST, AND WE'RE GETTING INVOLVED IN THAT. SO I HAVE NOT REALLY FOCUSED ON ENERGEN UNTIL KEITH CALLED ME EVEN THOUGH WE WERE LOOKING AT IT A LITTLE BIT. SO I HAVE NOT AT ALL SPOKEN TO PAUL ABOUT IT.
WAPNER: WHAT'S INTERESTING, YOU KNOW, CLEARLY, ELLIOTT WANTS THE COMPANY SOLD AS WELL. DOES IT COMPLICATE MATTERS AT ALL FOR YOUR TEAM IF YOU WANT TO PUT IT IN THOSE WORDS? THAT ELLIOTT IS THERE AND IS GOING TO TRY TO HAVE A SAY IN WHATEVER THE FUTURE OF THIS COMPANY MAY BE AS WELL?
ICAHN: WELL, AS I SAY, I RESPECT PAUL A LOT. IT DOESN'T COMPLICATE IT FOR ME. I MEAN, I WELCOME A GUY LIKE PAUL BEING INVOLVED. BUT WE HAVE HAD NO CONVERSATIONS WITH HIM BUT I'M SURE WE MIGHT. YOU KNOW, WE'RE NOT A GROUP WITH HIM, BUT I'M SURE -- I WOULD CERTAINLY WELCOME TALKING TO HIM. I THINK HE PROBABLY HAS THE SAME VIEWS AS I DO ON THAT.
WAPNER: I'M SORRY.
ICAHN: I JUST SAID THAT'S MY GUESS.
WAPNER: OKAY. LET'S TALK ABOUT XEROX, WHICH YOU MENTIONED A MOMENT AGO YOU HAVE CALLED THAT ONE OF THE WORST RUN COMPANIES I HAVE EVER SEEN THAT WAS A RECENT QUOTE I READ YOU JUST HAD A SETTLEMENT WITH THE COMPANY AS WELL. YOU HAVE A NEW CEO, THE FUJI FILM DEAL APPARENTLY IS NOT HAPPENING. AND MAYBE IT'S MORE THAN APPARENTLY WHAT NOW WHAT HAPPENS TO XEROX NOW?
ICAHN: WE HAVE A NEW CEO WHO IS, I THINK, IMMENSELY QUALIFIED TO DO THIS JOB. THE COMPANY HAS SUFFERED FROM POOR MANAGEMENT FOR MANY YEARS LOOK, I MET URSULA BURNS, I LIKED HER, BUT I THINK IT WAS "TIME" MAGAZINE WHO SAID SHE WAS ONE OF THE LEAST RESPECTED CEOs IN THE WORLD OR SOMETHING, IN THE COUNTRY. AND THEN WHAT HAPPENED WAS AFTER SHE LEFT UNDER SOME PRESSURE, JEFF JACOBSON, WHO WAS SORT OF HER ACOLYTE TOOK OVER. HE WAS THERE EIGHT YEARS SO YOU KNOW, IMAGINE WHAT HAPPENED HE WAS, WE FELT, NOT DOING A GOOD JOB. BUT THEN IT'S A STORY THAT YOU WOULDNT BELIEVE IF IT WAS IN A SHOW LIKE BILLIONS YOU LOOK AND SAY IT'S INTERESTING, IT'S THEATRICICAL, BUT IT COULD NEVER HAPPEN IN REAL LIFE. IF YOU SAW THIS ONE ON BILLIONS, YOU WOULD SAY IT'S NOT REALISTIC, IT COULD NEVER HAPPEN AND THAT STORY IS SORT OF AMAZING. LOOK, I'M NOT TELLING YOU SOMETHING -- ALL YOU HAVE TO DO IS READ THE DECISION TO UNDERSTAND WHAT HAPPENED AND THAT IN A WAY IS A METAPHOR FOR WHAT GOES ON IN TOO MANY COMPANIES IN THIS COUNTRY. THE BOARD DOESN'T REALLY – I REALLY THINK THEY GIVE MUCH MORE CREDENCE -- THEY WORRY MUCH MORE ABOUT HOW THEY'RE GOING TO BENEFIT THAN HOW THE SHAREHOLDERS ARE HERES A BOARD THAT WAS WILLING TO SELL TO FUJI XEROX AND MAKE A DEAL WITH FUJI XEROX BASED ON THE FACT, I'M SAYING BASED ON THE FACT THAT WE -- I HAVE TO GO BACK TO IT, BECAUSE YOU HAVE TO UNDERSTAND THE SITUATION A LITTLE BETTER THAN I CAN EXPLAIN IT IN TWO MINUTES ON THE SHOW –
WAPNER: BUT DO YOU STILL WANT -- DO YOU STILL WANT XEROX TO BE SOLD?
ICAHN: LOOK, XEROX DEFINITELY COULD BE SOLD. I THINK XEROX COULD FIT IN WITH A NUMBER OF COMPANIES. BUT TO GET BACK TO MY POINT, THE BOARD WAS WILLING TO MAKE A DEAL WITH FUJI, TO MERGE IT WITH FUJI XEROX. FUJI XEROX HAS A NUMBER OF ACCOUNTING SCANDALS. I MEAN, IT REALLY COULD BE A POISONOUS PICK THAT YOU'RE PUTTING A COMPANY LIKE XEROX INTO. XEROX HAS MANY GOOD ASSETS, PALO ALTO. IT REALLY IS EARNING OR CASH FLOWING ABOUT $1.3 BILLION. AND YET THEY WERE WILLING TO PUT THAT INTO FUJI XEROX, AND THEN YOU FIND OUT THAT FIVE MEMBERS OF THE BOARD, THE OLD GUARDS SO TO SPEAK, WERE GOING TO GET FIVE-YEAR CONTRACTS TO BE ON THE BOARD OF FUJI -- OF THE NEW COMPANY, FUJI XEROX, OR THE MERGE COMPANY. YOU FOUND OUT THAT JEFF JACOBSON WAS GETTING A HUGE SALARY, AND THEN THE PHANTOMS THEY RELIED ON FROM CENTERVIEW, WHICH PUSHED IT AND MADE IT HAPPEN, CENTERVIEW WAS RECEIVING $50 MILLION IN A FEE, AND YOU CAN SAY, "SO WHAT. THEY SHOULD GET A FEE." AND THEN YOU FIND OUT WHEN YOU GOT ALL THE E-MAILS FROM THE LAWSUIT, THAT CENTERVIEW WAS SAYING IN AN E-MAIL ONLY FOUR DAYS BEFORE THEY GAVE THE FAIRNESS OPINION, "HOW THE HELL CAN YOU DO A FAIRNESS OPINION?" NOW, THOSE WERENT THE WORDS, BUT IT'S AN AMAZING STORY. AND YET THIS WHOLE GROUP WERE PUSHING THIS THROUGH, AND IT MIGHT HAVE GONE THROUGH IF I AND DARWIN DEASPM HADN'T STEPPED IN AND SAID, "HEY, ENOUGH IS ENOUGH. YOU'RE NOT GOING TO GET IT DONE." AND I'M NOT LOOKING TO PAT MYSELF ON THE BACK, BUT I'M SAYING THIS IS ONE OF THE PROBLEMS WE HAVE.
WAPNER: RIGHT.
ICAHN: IN SO MANY COMPANIES IN THIS COUNTRY. THIS ONE STOOD OUT, OKAY. AND THAT'S BASICALLY IT.
WAPNER: I UNDERSTAND. SO YOU'D STILL BE OPEN OBVIOUSLY TO XEROX BEING SOLD. LET ME BRING IN ONE OF THE GENTLEMEN ON THE DESK WITH ME TODAY, STEVE WEISS, WHO HAS A QUESTION SPECIFICALLY ABOUT AMTRUST, WHICH HE OWNS. YOU JUST MENTIONED THAT YOU'RE ACTIVE IN IT, BUT HE HAS A QUESTION FOR YOU, CARL.
STEVE WEISS: HEY, CARL. WE'RE GOING TO BE ACTIVISTS ON IT AS WELL. YOU CAME IN AND TOOK THE THUNDER FROM US. THE PACKAGE, EVERYTHING YOU SAID ABOUT THE OTHER COMPANIES AND I'LL RAISE YOU ONE AND GO INTO AMTRUST, WHERE YOU HAVE A SEVERELY CONFLICTED BOARD. THEY ALL WORK FOR THE KARFUNKEL'S IN ANOTHER ENTITY. YOU'VE GOT A SPECIAL COMMITTEE WHERE THE CHAIRMAN IS CONFLICTED, AND IN FACT, CAME BACK AT 17.50 TO SAY THE COMPANY IS ONLY WORTH 13.50. THE INVESTMENT BANKERS ARE JUST RIDICULOUSLY CONFLICTED. SO -- BUT HERE YOU HAVE 55% OF THE STOCK OWNED BY THE FAMILY AND RELATED TRUSTS. TODAY, YOU ANNOUNCE YOU'RE SELLING THE DELAWARE CHANCERY, WHERE THEY'RE WELL KNOWN, BECAUSE THERE WERE TWO CLASS ACTIONS AGAINST THEM IN THE CHANCERY -- ONE BEING FOR SELF-DEALING. BUT HOW DO YOU GET OVER THAT OWNERSHIP INTEREST TO BRING SOMETHING GOOD FORWARD. THE COMPANY, REALLY, THE FAMILY, THE KARFUNKEL'S AND THE ZYSKIND'S, ARE SO BRAZEN AND THEY DO ABUSE SHAREHOLDERS. HOW DO YOU OVERCOME THAT OWNERSHIP INTEREST?
ICAHN: YEAH, IT'S SORT OF INTERESTING, STEVE. AS YOU KNOW, THIS IS WHAT WE HAVE BEEN DOING FOR 30 YEARS. AND WHERE I THINK THEY HAVE A PROBLEM IS AS FOLLOWS: THEY WENT OUT AND GOT A FAIRNESS OPINION, AND GOING FROM A MAJORITY TO A MINORITY. AND THE REASON THEY'RE DOING BOTH OF THESE IS THAT GIVES THEM THE RIGHT TO RELY ON BUSINESS JUDGMENT. BECAUSE JUST LIKE -- WE AGREE WITH YOU COMPLETELY, STEVE. THIS COMPANY IS TREMENDOUSLY UNDERVALUED, AND THEY'RE BUYING IT CHEAPLY. BUT AS YOU KNOW, AND I THINK THIS IS A PROBLEM WE CAN DISCUSS IN A MUCH MORE GENERAL WAY, THAT TOO MUCH IS RELIED ON BUSINESS JUDGMENT IN THE COURTS. BUT THAT'S WHAT IT IS. AND YOU KNOW, DELAWARE IS A FAIR STATE, AND THEY TRY TO YOU KNOW, GET THINGS DONE RIGHT. BUT HERES WHY I THINK THEY HAVE A PROBLEM. ON APRIL 5th, THEY STEALTHILY SET THE RECORD DATE AS APRIL 5th. AND THEY NEVER -- THEY HAVE A RIGHT TO DO THAT. SO THEY SET THE RECORD DATE, BUT NEVER BOTHERED TO TELL THE SHAREHOLDERS. YOU HAVE A BIT OF A SHAM ELECTION GOING ON HERE. I MEAN, BY THE TIME THIS ELECTION GOES ON, WHICH IS NOW MAY 20th, 23rd, OR SOMETHING -- I FORGOT WHEN THE ELECTION WOULD BE, YOU HAVE A GREAT DEAL OF STOCK CHANGED HANDS, SO YOU HAVE A SHAM ELECTION. BUT BEING THAT SAID, TECHNICALLY, THEY MAY WIN OUT IN THE COURT AND SAY WE HAVE A RIGHT TO SET THE RECORD DATE WHEN WE WANT TO, BUT THEY DON'T HAVE A RIGHT, IN MY OPINION, NOT TO TELL THE SHAREHOLDERS OR DISCLOSE IT ON APRIL 5th. AND WE THINK THEREFORE THEY'RE GOING TO NEED WHAT THEY CALL FULL FAIRNESS. AND WHEN YOU NEED FULL FAIRNESS, YOU CAN'T RELY ON BUSINESS JUDGMENT, WHICH IS GOING TO LEAVE THEM WIDE OPEN TO LAWSUITS WHERE YOU BRING IN YOUR EXPERT WITNESSES AND YOU HAVE A LOT MORE TO SAY ABOUT WHAT THE VALUE – JUST WHAT YOU SAID, STEVE, WHY THE VALUE IS RIDICULOUS AND WHY THEY WILL HAVE TREMENDOUS DAMAGES. AND YOU KNOW, WHEN YOU ARE BUYING A COMPANY AND YOU'RE GOING TO HAVE TREMENDOUS DAMAGES AGAINST YOU, YOU HAVE TO THINK TWICE ABOUT DOING IT. SO I THINK THEY HAVE A MAJOR PROBLEM. I MEAN, I'M GETTING A LITTLE ARCANE ON THIS.
WAPNER: THAT'S ALL RIGHT.
ICAHN: BUT IT'S SOMETHING THAT WE THINK THAT WE HAVE A VERY GOOD CHANCE OF STOPPING.
WAPNER: WELL, STEVE IS AN OWNER OF THE STOCK, SO I WANTED TO GET THAT IN. I DO WANT TO ASK YOU BROADLY ABOUT THE MARKET, TOO, BUT BEFORE I DO THAT, IT WAS ONE OF OUR REPORTERS HERE AT CNBC WHO BROKE A STORY THAT YOU WERE ACCUMULATING SHARES OF VMWARE, AND WE WERE WONDERING WHAT YOUR INTENTIONS ARE. YOU HAD TOLD THAT REPORTER OR IT WAS REPORTED THAT IT WAS A MEDIUM-SIZED POSITION. SOME TOOK THAT TO BE THAT YOU WERE GEARING UP FOR ANOTHER FIGHT WITH MICHAEL DELL. DELL OWNS 80% OF VMW. WHERE ARE WE TODAY ON THAT CALL?
ICAHN: WELL, YOU KNOW, AS THEY SAY, ONE OF THOSE OLD WESTERNS, THEY SAY, "DOING GOOD AINT GOT NO END." SO WE'RE RIGHT THERE AGAINST DELL AGAIN -- MAYBE. MAYBE.
WAPNER: THAT ANSWER DIDN'T SOUND LIKE A MAYBE.
ICAHN: WELL, NO, I SAY MAYBE BECAUSE I HOPE HE DOES THE RIGHT THING AND HE PAYS A FAIR PRICE FOR IT. LOOK, IT'S SORT OF -- NOTHING IS OBVIOUS, BUT DELL HAS GOT $42 BILLION IN DEBT. THAT'S A LOT FOR A COUNTRY, A THIRD-WORLD COUNTRY, LET ALONE MICHAEL DELL. THEY HAVE $42 MILLION IN DEBT THERE, AND I THINK THEY'RE GOING TO HAVE TO DO SOME TYPE OF MERGER WITH VMWARE. AND THIS IS A QUESTION OF WHAT YOU PAY FOR IT AND I HOPE HE PAYS THE RIGHT PRICE FOR IT. THAT'S SO I BOUGHT IT JUST AS, AGAIN, YOU KNOW, THIS ACTIVIST MODEL, I THINK, IS A GREAT MODEL BECAUSE YOU DO HAVE, AGAIN, YOU HAVE COMPANIES THAT – WILL IN CERTAIN CASES TAKE ADVANTAGE OF SHAREHOLDERS.
WAPNER: HAVE YOU BEEN ADDING TO YOUR POSITION?
ICAHN: WELL, I BELIEVE I ADDED TO THE POSITION. I ALSO BOUGHT THE TRACKING STOCK, TOO, WHICH I DON'T THINK WAS MENTIONED.
WAPNER: OH, RIGHT. NO, THAT IS NEW NEWS THAT YOU BOUGHT THE TRACKING STOCK AS WELL.
ICAHN: YEAH, SO WE HAVE THE TRACKING STOCK TOO. I WISH I HAD A BIGGER POSITION THAN I HAVE, BUT IT'S A SIZABLE POSITION I HAVE. I MEAN, IF YOU LOOK AT IT, YOU KNOW, IT'S IN THE HUNDREDS OF MILLIONS OF DOLLARS, BUT IT COULD BE MORE. BUT THE STOCK JUST GOT AWAY FROM ME. AND YOU KNOW, I DO BELIEVE THAT MICHAEL WILL PAY BASICALLY THE RIGHT PRICE AND THAT WE'LL ALL BE, SHALL WE SAY IN QUOTES, ON A "FRIENDLY TERM." SO LOOK, I SAID A FEW YEARS AGO, HE DIDN'T PAY ENOUGH FOR DELL WHEN HE BOUGHT IT. I BELIEVE I WAS RIGHT. WE MADE SOME MONEY ON IT I THINK WE'RE BACK IN THE SAME SITUATION. HOPEFULLY IT'S GOING TO WORK OUT WELL. YOU KNOW.
WAPNER: YEAH, SO CARL, BEFORE I LET YOU GO, AS WE WATCH THE SHARES IN THE TRACKING STOCK OF DELL TECHNOLOGIES MOVE HIGHER ON THE NEWS YOU MADE HERE ON CNBC, THAT YOU BOUGHT THE TRACKING STOCK, HOW DO YOU FEEL ABOUT THE MARKET TODAY?
ICAHN: YEAH, YOU KNOW, LOOK. I THINK IT'S GREAT NEWS ABOUT THE TARIFFS AND NOT HAVING A TARIFF WAR. I THINK -- YOU KNOW, I THINK TRUMP DID 100% THE RIGHT THING IN GETTING RID OF THESE RIDICULOUS REGULATIONS THAT WERE STRANGLING COMPANIES, AND HE'S DONE A DAMN GOOD JOB ON THAT. THE TAX THING I REALLY BELIEVE IN. TARIFFS IS A VERY, VERY DIFFICULT THING. IT'S GOT SO MANY VARIABLES, SO MANY LAND MINES. BUT ON THE ONE HAND, YOU HAVE TO BE TOUGH. NOT TOUGH, BUT YOU CAN'T LET COUNTRIES STEAL YOUR INTELLECTUAL PROPERTIES. BUT BEING ABLE TO DO A DEAL WITH CHINA IS GREAT IF IT CAN HAPPEN. AND I THINK THIS IS WHY YOU HAVE AN UP MARKET. AND I'M VERY GLAD TO HAVE SEEN THAT AND HEARD THAT. AND BECAUSE I WAS CONCERNED ABOUT THIS WHOLE TARIFF SITUATION, BUT I THINK IT TURNS OUT THAT IF YOU CAN DO THAT, IT CERTAINLY HELPS OUR INDUSTRY AND OUR COMPANY.
WAPNER: YOU HAVE TOLD ME IN THE PAST THAT YOU ARE PRETTY WELL HEDGED. ARE YOU FEELING LIKE IT'S TIME TO GET LESS HEDGED, THAT WE COULD ACTUALLY GO BACK TO NEW HIGHS IF YOU GET SOME OF THIS TRADE STUFF FIGURED OUT?
ICAHN: YEAH, I MEAN, LOOK, YEAH. I -- OVER THE LAST FEW MONTHS, I'VE – MY HEDGES AREN'T NEARLY AS BIG OF A PERCENTAGE OF OUR PORTFOLIO, SO -- AND THEN, YOU KNOW, WE HAVE COMPANIES THAT, YOU KNOW, HAVE DONE AWFULLY WELL IN THE LAST FEW MONTHS IN DIFFERENT AREAS WHERE WE ARE. YOU KNOW THE COMPANIES WE OWN LIKE CHENIERE AND THE REFINERIES, SO WE SORT OF GOT LUCKY, TOO. YOU KNOW? OUR REFINERIES ARE IN THE MIDDLE OF THE COUNTRY WHERE WE GOT ALL THAT OIL COMING OUT OF THE PERMIAN, AND YOU GET THE ADVANTAGE OF THAT. SO WE GOT LUCKY THERE. YOU KNOW, CHENIERE, IF YOU LOOK AT THAT OVER THE YEARS, WE BOUGHT IT A COUPLE YEARS AGO AND STRUGGLED WITH IT A BIT, BUT IT'S CERTAINLY GOING TO BE THE BENEFICIARY OF THE REST OF THE WORLD NEEDING ENERGY AND OIL PRICING GOING UP, THIS LNG IS JUST -- YOU KNOW, THESE THINGS, YOU LOOK AT THE SIMPLE RATIOS. YOU JUST LOOK FOR RISK/REWARD, AND SO YOU'VE GOT THE BENEFIT OF THAT WE HAVE BEEN LUCKY YOU KNOW, WHEN YOU'RE LUCKY, YOU CAN'T ALWAYS CONFUSE IT WITH BEING SMART, I GUESS. SO IT'S WORKED OUT REAL WELL FOR US LATELY.
WAPNER: WELL WE'RE LOOKING AT --
ICAHN: -- IEP OWNS A LOT OF THAT.
WAPNER: YEP, WELL, LOOKING AT CRUDE OIL BACK ABOVE $71. AS I SAID, WE'RE HAVING A BIG DAY ON THE MARKET. CARL, I'VE TO LET YOU RUN. THANK YOU SO MUCH FOR YOUR TIME TODAY. WE APPRECIATE IT, AS ALWAYS.
ICAHN: GOOD TALKING TO YOU, SCOTT.
WAPNER: LIKEWISE.
ICAHN: GOOD TALKING TO EVERYBODY. GOOD LUCK, STEVE, WITH THAT. I THINK YOU'LL BE FINE.
WAPNER: THANKS, CARL. SAME TO YOU. WE THINK IT'S WORTH OVER $20 A SHARE ON OUR MODELS MINIMALLY.
ICAHN: HEY, YOU'RE PREACHING TO THE CHOIR. OKAY.
WAPNER: ALL RIGHT, CARL. THANKS SO MUCH. CARL ICAHN, ICAHN ENTERPRISES CHAIRMAN, JOINING US ONCE AGAIN. WE DO WANT TO ALSO NOTE, WE DID REACH OUT TO ENERGEN FOR COMMENT, AND WE HAVE YET TO HEAR BACK. WHEN WE DO, YOU'LL CERTAINLY BE THE FIRST TO KNOW.
For more information contact:
Jennifer Dauble CNBC t: 201.735.4721 m: 201.615.2787 e: jennifer.dauble@nbcuni.com
Emma Martin CNBC t: 201.735.4713 m: 551.275.6221 e: emma.martin@nbcuni.com
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5e31d20ad92fc98ec697c4b17f607698 | https://www.cnbc.com/2018/05/23/consumers-returning-to-luxury-brands-investors-should-too-analyst.html | Consumers are returning to luxury brands such as Tiffany, and investors should too: Analyst | Consumers are returning to luxury brands such as Tiffany, and investors should too: Analyst
Consumers are returning to the luxury goods sector with updated versions of iconic brands such as Tiffany & Co. and Louis Vuitton. Retail analyst Oliver Chen told CNBC that it's a good place for investors to be too.
"Tiffany is very exciting," Chen, managing director and senior equity research analyst at Cowen Outperform, said Wednesday on "Power Lunch."
"They're becoming a lot more modern," he said. "Customers are returning to Tiffany on the heels of new collections, new product, as well as new campaigns that are innovative, fun, disruptive, as well as tying back to the history of the brand."
"And that blue box is iconic," Chen said.
On Wednesday, the high-end jeweler beat first-quarter earnings estimates with better-than-expected sales in the Americas and Asia. Shares surged about 17 percent and were on track to mark the company's best day since 2001.
But Tiffany isn't the only luxury company outperforming.
Chen, who covers retail and luxury goods at Cowen, said his firm likes the luxury goods sector, including brands such as Moet Hennessy Louis Vuitton and Sotheby's, and said it is "a good spot for investors to be in."
Businesses that specialize in discounted goods — such as TJX Companies, which owns off-price stores Ross Stores and Marshalls, and Costco — are thriving. But Chen pointed out that some cost-cutting measures may affect margins, which in turn affects investors. The analyst said jewelry brands such as Tiffany can leverage prices to get better returns for investors.
"Grocery, food, apparel, where there's less differentiation, that becomes a problem, and people compete on price," the analyst said.
"And that's a big factor for retail over the long term, especially with Amazon and others," Chen said. "Competing on the basis of price is very competitive."
In fact, Tiffany's success may be in part because it is "un-Amazonable," Chen said, referring to experiences that can't be bought online.
CNBC/Marguerite Ward
For Mary Chao, that came in the form of a trip to her local Tiffany & Co. for her daughter's 16th birthday.
"For a $150 necklace, you get the blue box, a pampering and a status symbol," the Brighton, New York, resident told CNBC. "And teenage girls are always looking for status symbols."
"Luxury is trending in the suburbs," Chao said. "For me it's Louis Vuitton. For my daughter it's Tiffany."
Disclaimer
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406047e23e8ac038aa792a7323a917fd | https://www.cnbc.com/2018/05/23/cramer-remix-prepare-yourself-for-more-pain-in-homebuilding-stocks.html | VIDEO1:0001:00Cramer Remix: Prepare yourself for more pain in homebuilding stocksMad Money with Jim Cramer
Even though the homebuilding stocks bounced on Wednesday, CNBC's Jim Cramer warned that the market has turned on the sector, and to him, that means more pain ahead.
"If you own a stock like Toll [Brothers] here, well, you're fighting the Wall Street playbook," the "Mad Money" host said. "That playbook says to sell the homebuilders when rates are rising, end of story."
Shares of Toll Brothers lost 9.5 percent of their value Tuesday after the company's second-quarter earnings report missed estimates. But even as Cramer said a booming economy could help the homebuilder's recover, he expected the market to assume otherwise.
"Most investors will just keep waiting for something bad to happen anyway," he said. "All I can say is you have to let Toll's stock come down before you can try to take a stand. What can change its direction? Three things: time, lumber and labor costs. You could get a reversal in lumber, labor's iffy, but when it comes to time, that means you have to wait until the next quarter."
"In short, as much as I like Toll Brothers, the bears clearly have the upper hand right here and it would be foolish to fight them tooth and nail," Cramer continued. "[That's] why we say wait for Toll's stock to come down to lower levels before pulling the trigger."
Pedestrians pass in front of a Tiffany & Co. store.Akos Stiller | Bloomberg | Getty Images
On a wild day for the stock market, with stocks erasing their losses ahead of the closing bell, Cramer wanted to address what caused the craziness in the first place.
"[Investors] went nuts for fixer-uppers and ... punished consistent companies that are actually well-run," he said, pointing to one particular fixer-upper whose gains jumped out at him: jewelry maker Tiffany & Co.
Shares of the once-scorned Tiffany roared over 23 percent after the company delivered its first-quarter earnings report, with same-store sales and jewelry demand far exceeding expectations.
"They've made extraordinary strides at improving their execution," Cramer said.
But one thing in particular stood out to Cramer in terms of Tiffany's turnaround: the appointment of former Bulgari and Diesel executive Alessandro Bogliolo as its new CEO.
Source: Akamai
In an emotional market where investors struggle to process the White House newsflow, Cramer likes to fall back on the technicals to find actionable opportunities.
"In the stock market, emotional decisions tend to be bad decisions," the "Mad Money" host warned. "So we need to do everything we can to check our emotions at the door. And that's why, every week, we like to play off the charts."
For Wednesday's charts, Cramer turned to technician Marc Chaikin, the founder and CEO of Chaikin Analytics and the inventor of key technical tools like the accumulation-distribution line, the Chaikin volume indicator, the Chaikin oscillator and the Chaikin Money Flow.
Chaikin's stock-picking formula uses three indicators: the Chaikin Money Flow, which measures buying and selling pressure in a stock; the Chaikin Relative Strength, which compares a stock's performance with the over the last six months; and the Chaikin Power Gauge, which uses 20 different fundamental and technical inputs to produce a bearish or bullish reading.
This time around, Chaikin's formula flashed particularly bullish signals with the daily stock chart of Akamai Technologies, a cloud play that helps companies get content like streamed video online securely and glitch-free.
Arnold Donald, CEO, Carnival CruiseScott Mlyn | CNBC
From the deck of the Carnival Horizon, docked at New York City's Pier 88, Carnival Corp. CEO Arnold Donald told CNBC that, eventually, his cruise line's U.S. business would shy in comparison to China.
"China, someday, will be the largest cruise market in the world," the CEO told Cramer. "It's in their five-year plan, so if cruising is in their five-year plan, ... they're going to make it happen."
Passenger volume from China has been increasing sharply over the last five years, with cruise capacity increasing across all metrics, according to a 2017 report from Cruise Lines International Association and Chart Management Consultants.
The same report pegged China as the "main driver of passenger growth in Asia," with Chinese customers accounting for two-thirds of the region's passenger volume in 2016.
"We just want to be a part of that," Donald said about China's anticipated growth. For more on his industry outlook, read about and watch his interview here.
Jeffrey Sloan, CEO, Global PaymentsScott Mlyn | CNBC
Double-digit organic growth doesn't come easily, but Global Payments CEO Jeff Sloan, whose company achieved it in its latest quarter, tied it back to international strength in an interview with Cramer.
"What we're most proud of and probably one of the secrets about Global Payments is that a quarter of the business is outside the United States," Sloan said Wednesday. "That's in Europe and that's in Asia."
But Global Payments doesn't cover Europe wholesale. Its fairly selective business functions in smaller countries like Austria, the Czech Republic and Romania in Europe, and the Philippines in Asia. On some metrics, Sloan said that the Philippines is seeing faster growth than China.
"We have 28 percent of the acquiring market, of the payments technology market, in the Philippines with our partner. So that's what's driving the outsized growth," Sloan said.
Watch Sloan's full interview here.
In Cramer's lightning round, he flew through his take on callers' favorite stocks:
Shopify: "Oh, boy. Everyone decided that this Adobe acquisition of Magento killed Shopify. I think Shopify is not that easily killed. I actually think you can continue to own this stock."
Teva Pharmaceutical Industries Ltd.: "You know what? I have to say this: don't buy. It's had a nice comeback. I think the bottom's been reached. But that doesn't make me want to pull the trigger."
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 - Instagram - VineQuestions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com
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cd646457340d776a93d1a9f9c477b1e0 | https://www.cnbc.com/2018/05/23/cramers-charts-suggest-investors-buy-akamai-and-sell-walmart.html | VIDEO1:0401:04Cramer's charts: Buy Akamai, sell WalmartMad Money with Jim Cramer
In an emotional market where investors struggle to process the White House newsflow, CNBC's Jim Cramer likes to fall back on the technicals to find actionable opportunities.
"In the stock market, emotional decisions tend to be bad decisions," the "Mad Money" host warned. "So we need to do everything we can to check our emotions at the door. And that's why, every week, we like to play off the charts."
For Wednesday's charts, Cramer turned to technician Marc Chaikin, the founder and CEO of Chaikin Analytics and the inventor of key technical tools like the accumulation-distribution line, the Chaikin volume indicator, the Chaikin oscillator and the Chaikin Money Flow.
Three weeks ago, Chaikin recommended three stocks on "Mad Money" based on his formula for finding winners and losers: Marathon Petroleum, EOG Resources and General Electric.
Since then, Marathon and EOG have gained 8.2 percent and 4.6 percent, respectively, and GE was up 9 percent as of Tuesday before its CEO gave a poorly received presentation.
"Two out of three ain't bad, and if you'd taken profits on GE yesterday, you would've had a phenomenal trade," Cramer said.
Chaikin's formula uses three key indicators: the Chaikin Money Flow, which measures buying and selling pressure in a stock; the Chaikin Relative Strength, which compares a stock's performance with the over the last six months; and the Chaikin Power Gauge, which uses 20 different fundamental and technical inputs to produce a bearish or bullish reading.
This time around, Chaikin's formula flashed particularly bullish signals with the daily stock chart of Akamai Technologies, a cloud play that helps companies get content like streamed video online securely and glitch-free.
Shares of Akamai have been soaring since activist fund Elliott Management said it took a 6.5 percent stake in the company last December, but Chaikin's three indicators showed more room to run.
The Chaikin Money Flow turned positive, meaning that institutional investors were buying the stock, the Chaikin Relative Strength has been strong for months, and the Chaikin Power Gauge is sending green bullish signals.
Still, the technician warned that the stock is very overbought, suggesting that investors wait for a pullback to the $72 to $74 level before picking up some shares.
"My view? I like Akamai here — we recommended it at $73 in mid-March — but I'd like it even more into weakness because I believe in Elliott Management's ability to take this business to the next level," Cramer said.
Chaikin's formula can also signal when a stock should be sold. On Wednesday, Chaikin zoomed in on the stock of Walmart, down over 4 percent since the company's earnings report.
Having spent months in the red, the Chaikin Money Flow inched up after the report, but is still flat, Cramer said. The Chaikin Relative Strength indicator is also negative, reinforcing the stock's decline. Unsurprisingly, the Chaikin Power Gauge is flashing bearish signs, too, he added.
"My view? I like Walmart long term, but Chaikin may be right about the short term," Cramer said. "Wall Street really dislikes the fact that the company's spending so much money to grow its business, including that acquisition of Flipkart, the Indian e-commerce play. I think these bets are ultimately going to pay off, but it could take time."
"Bottom line? The charts, as interpreted by Mark Chaikin, suggest that you should buy Akamai here and sell Walmart," the "Mad Money" host concluded. "Given his track record, I think you need to take his advice very seriously, especially on the stock of Akamai."
VIDEO10:2910:29Cramer's charts suggest investors buy Akamai and sell WalmartMad 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 - Instagram - VineQuestions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com
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b040e34d1e567a6ee15d7f9a2b9cdf42 | https://www.cnbc.com/2018/05/23/cramers-lightning-round-dont-buy-blue-apron-theres-no-good-thesis.html | Blue Apron: "Look, the stock has bottomed, but you know what? I've got to have a thesis to own something. I don't have a thesis. Don't buy. Keep trimming on the way up [if you own it]."
Sirius XM Holdings: "Hold it. Now, who has been consistently behind this stock ever since $4? Was it Mr. Magoo? No, it was me. I'm not backing away."
Teva Pharmaceutical Industries Ltd.: "You know what? I have to say this: don't buy. It's had a nice comeback. I think the bottom's been reached. But that doesn't make me want to pull the trigger."
Iqiyi: "Oh, man. You know, when it comes to China, what do we like? We like Baidu, we like Alibaba and we like Baozun and that is it."
Shopify: "Oh, boy. Everyone decided that this Adobe acquisition of Magento killed Shopify. I think Shopify is not that easily killed. I actually think you can continue to own this stock."
Incyte: "I've got to tell you, I shouldn't be allowed to opine on it. I thought that that new drug that they had was going to be a winner. The stock keeps going down. I think it's an inexpensive stock because it's got great products, but no one believes me, so I've got to tell you, I'm not the call."
Etrade Financial Corp.: "They are in the sweet spot. You've got to be a buyer. That's the right time for this stock."
VIDEO4:1104:11Cramer's lightning round: I don't have a thesis for Blue Apron, so don't buyMad 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 - Instagram - VineQuestions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com
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c4c5bb201bef8075f3d5aac0a5aaac31 | https://www.cnbc.com/2018/05/23/fed-president-neel-kashkari-to-discuss-the-economy-energy-at-williston-conference.html | Fed President Neel Kashkari discusses the economy, energy at Williston conference | Fed President Neel Kashkari discusses the economy, energy at Williston conference
Federal Reserve President Neel Kashkari is speaking on the state of the economy, trade and labor markets before the Williston Basin Petroleum Conference in Bismark, North Dakota on Wednesday.
Kashkari's comments came as investors digested the latest meeting minutes from the Fed's policymaking committee. Currently a non-voting Fed member, Kashkari has historically been dovish when considering hikes to the federal funds rate.
Following the May meeting, the policymaking Federal Open Market Committee said it wasn't raising rates yet but added the word "symmetric" to describe its inflation goal. Until now, market participants have debated what that language meant.
Though the general tone was that inflation would continue to rise, there was disagreement over how confident the Fed should be after undershooting its 2 percent target for so long.
[The stream is slated to start at 2:15 p.m. ET. Please refresh the page if you do not see a player above at that time.]
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2c0a4d5e473729d3c0b967cd54e5974d | https://www.cnbc.com/2018/05/23/gold-dovish-fed-stance-in-focus.html | Gold claws higher on soft dollar, renewed trade tensions | Gold claws higher on soft dollar, renewed trade tensions
Source: World Gold Council
Gold prices rose for a second session on Thursday, lifted by a weaker dollar, worries about renewed trade tensions and volatile emerging markets.
Spot gold was up 0.46 percent at $1,298.93 per ounce at 8:42 a.m. ET. U.S. gold futures for June delivery added 0.68 percent to $1,298.40 per ounce.
Gold's safe-haven appeal was burnished after the U.S. launched a national security investigation into car and truck imports that could lead to new tariffs similar to those it imposed on steel and aluminum in March.
"We have a whole host of potential sources of support for gold. Trade spats are reoccurring and there's a focus on troubled emerging markets," Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen, said.
Turkey has been in the spotlight and the lira weakened more than 2 percent after a huge emergency interest rate hike failed to stem its problems. "The relief rally in the Turkish lira yesterday seems to have only managed to pause the slide but not reverse it," Hansen said.
Gold is often seen as a safe investment during times of political and financial uncertainty.
VIDEO3:3303:33Tariffs on cars could undercut Trump's national security concerns: ExpertClosing Bell
Gold also was buoyed from a weaker dollar index, which lost momentum after U.S. President Donald Trump's threat to impose new tariffs and minutes of the Federal Reserve's last policy meeting were seen as dovish.
Higher U.S. rates tend to boost the dollar and drag on greenback-denominated gold, but the metal can also be used as a hedge against rising inflation.
Hansen said it was worrying that the positive drivers for gold had not pushed it further towards key levels of $1,300 and $1,305, which need to be broken to resume the upside. "If we get there that's going to force a reaction from funds, but we need a spark and so far gold hasn't managed to break out of its range."
Spot gold has shed 5 percent since touching $1,365.23 on April 11, the highest in nearly three months.
Among other precious metals, silver gained 0.8 percent to $16.55 an ounce, platinum climbed 0.9 percent to $907.70 an ounce and palladium shed 0.4 percent to 972.97 an ounce.
Analysts at Standard Chartered on Wednesday said they expected platinum to continue to trade at a discount to both palladium and gold this year.
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c842c2c1f84cb1521141609a88221c1a | https://www.cnbc.com/2018/05/23/hbo-producer-frank-rich-on-netflix-they-dump-everything-out-there.html | HBO producer on battling Netflix: 'We don't dump everything out there' | HBO producer on battling Netflix: 'We don't dump everything out there'
VIDEO3:2603:26Frank Rich on how 'Succession' models real media familiesSquawk Alley
Netflix may be worth a lot more than HBO owner Time Warner, but HBO creative consultant Frank Rich says HBO has Netflix beat as far as quality of content and transparency for creators.
"Our point about HBO is, we don't dump everything out there," Rich said on CNBC's "Squawk Alley." "And a lot of Netflix stuff is great, but not all of it."
Rich is probably biased — he's the mastermind behind HBO's critically acclaimed "Veep" and upcoming media dynasty drama "Succession." But having worked as a producer for HBO, he says HBO offers the kind of transparency creators want, whereas competitor Netflix has a history of keeping producers in the dark.
"In the case of HBO, there is complete communication. We know the number of viewers, we also know the reviews, who is watching, the buzz of it — and that's something HBO can offer television creators," Rich said.
Furthermore, Rich said creators can rest assured their shows will be promoted, unlike at Netflix, where they "have 20 open in a week and only a couple get special attention."
But it all comes down to quality of content.
"We really try to curate and find high-quality stuff, like 'Westworld,' 'Game of Thrones' and, we hope 'Succession,'" Rich said.
"Succession" premiers June 3, and details the rise and fall of media dynasties, a narrative Rich says is very appropriate, given turmoil among the Murdoch family and 21st Century Fox and the Redstone family and CBS.
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6d9337d954d8147190cf946caefeb2f9 | https://www.cnbc.com/2018/05/23/how-to-share-your-location-with-loved-ones-so-they-know-youre-safe.html | How to share your location with loved ones so they know you're safe | How to share your location with loved ones so they know you're safe
If you're in a new city on a business trip, riding in the back of an Uber or stuck in traffic, you can share your location with loved ones and colleagues so they know where you are and that you're OK.
I use these tools to avoid the "text me when you get home," conversation we often have. When I share my location, my friends and family know I've made it home after a long drive. Also, I'm in full control, so I can turn off the sharing whenever I want.
There are lots of options for doing this, including using Google Maps, Facebook Messenger and Apple iMessage.
Here's how to do it with each of those.
Todd Haselton | CNBC
Open Google Maps on your phone.Tap the menu button on the top-left of the screen.Tap "Location Sharing."Choose how long you want to share for.Choose who you want to share with.Confirm that you'd like to share your location.Send the message.
How to share your location with Facebook Messenger
Todd Haselton | CNBC
Open Facebook Messenger on your phone.Start a conversation with the person or people you want to share with.Tap the + button on the left-side of the screen.Choose LocationTap "Share location for 60 minutes"
Todd Haselton | CNBC
Open iMessage on your iPhone or iPad.Start a conversation with the person or people you want to share your location with.Tap the "i" button on the top-right of the screen.Choose "Share my location"Choose to share for an hour, until the end of the day or indefinitely.
Google
For each of these, the other person (or people) will receive a link or a map that shows exactly where you are. If you're in a place you shouldn't be — maybe lost in a city — they'll know that. If you're in traffic and are running late, they'll be able to see that, too.
VIDEO4:4204:42Google Maps almost didn't happenSquawk Alley
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922449dca52a40a212b934ed3d1fe51d | https://www.cnbc.com/2018/05/23/hpe-quarterly-profit-beats-on-demand-for-servers.html | HPE quarterly profit beats on demand for servers | HPE quarterly profit beats on demand for servers
New server racks in the Hewlett Packard Enterprise Executive Briefing Center feature the new branding.Source: Hewlett Packard Enterprise
Hewlett Packard Enterprise reported a better-than-expected quarterly profit and raised its full-year earnings forecast on Tuesday, helped by higher demand for its servers, storage and networking equipment.
The company, created in 2015 from the breakup of Hewlett-Packard, said it now expects adjusted profit between $1.40 and $1.50 per share for 2018. The company had previously forecast profit of $1.35 to $1.45 per share.
Revenue from Hybrid IT division, which houses servers, storage and data center networking products, rose 7 percent to $6.02 billion in the quarter ended April 30.
Analysts on average had expected $6.07 billion, according to Thomson Reuters I/B/E/S.
Net profit was $778 million, or 50 cents per share, in the second quarter ended April 30, compared with a loss of $612 million, or 37 cents per share, a year earlier.
Excluding items, the company reported earnings of 34 cents per share, above analysts' expectation of 31 cents per share.
Revenue rose about 10 percent to $7.47 billion.
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0d25fb33831662bb8a28ac3d06795439 | https://www.cnbc.com/2018/05/23/iphone-6-battery-out-of-warranty-credit-apple.html | Apple is giving a $50 credit to iPhone 6 (and newer) owners who replaced battery out of warranty | Apple is giving a $50 credit to iPhone 6 (and newer) owners who replaced battery out of warranty
VIDEO1:1101:11Apple iPhone 6 battery: what happened when I tried to get it replacedDigital Original
Apple said on Wednesday that it is giving a $50 credit to customers who had to pay for a battery replacement if their iPhone 6, or a later model, was out of warranty before Apple began offering discounted battery replacements in store.
The credit is available to owners of iPhone 6 or newer models who had to replace the battery between January 1, 2017 and December 28, 2017. Apple said that, as of Wednesday, it's beginning to alert customers who are eligible for the credit and will provide instructions on how to get it. It will continue to alert customers through July 27, so it may take a few weeks before you get the notice.
Note that this doesn't apply to anyone who had the battery replaced while it was covered by Apple's warranty.
Apple's out-of-warranty price for a battery replacement for the iPhone 6, and newer phones, is typically $29. Prior to January of this year, it was $79 to get it replaced out of warranty.
Apple began replacing batteries on iPhone 6 and up earlier this year after Apple said slower batteries required it to force iPhones to run at slower speeds to maintain battery life and to keep iPhones reliable.
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a5d0456ecb4c237c559340d58e776d7c | https://www.cnbc.com/2018/05/23/irs-treasury-have-set-their-sights-on-blue-states-tax-workarounds.html | IRS, Treasury have set their sights on blue states' tax workarounds | IRS, Treasury have set their sights on blue states' tax workarounds
VIDEO0:5600:56IRS may nix workaround on tax deduction capsNews Videos
The Internal Revenue Service and Treasury Department will release new rules to address workarounds by high-tax states that are designed to help their residents manage new caps on federal tax deductions.
The IRS announced the move in a notice on Wednesday, without specifying details.
This year, the Tax Cuts and Jobs Act places a $10,000 cap on the amount of state and local taxes (SALT) that filers can deduct on their federal returns.
To help residents deal with the pain of losing that deduction, New York, New Jersey and Connecticut recently passed laws to create a workaround: Municipalities will be allowed to establish charitable funds to pay for local services and offer property tax credits to incentivize homeowners to make contributions.
In turn, filers who itemize can also claim a charitable tax deduction on their federal returns and do so beyond the $10,000 SALT cap.
The IRS has set its sights on these strategies.
"Despite these state efforts to circumvent the new statutory limitation on state and local tax deductions, taxpayers should be mindful that federal law controls the proper characterization of payments for federal income tax purposes," the IRS wrote in its notice.
"It's no surprise that the Trump administration is once again targeting Connecticut taxpayers," wrote Leigh R.J. Appleby, press secretary for Connecticut Gov. Dannel P. Malloy, in an e-mail.
"The legislation proposed by the Governor and passed overwhelmingly by the General Assembly gives municipalities a workable option to ensure their residents aren't double taxed because of the Trump/GOP tax law," Appleby wrote.
"I remain committed to fighting the SALT deduction tax cap and am confident that the solution signed into law can and should be embraced by the IRS," New Jersey Gov. Phil Murphy said in an e-mailed statement.
"Make no mistake: We have been and will continue to fight against this economic missile with every fiber of our being," New York Gov. Andrew Cuomo said in an e-mailed statement.
Getty Images
The proposed rules likely will clarify how the IRS will treat these transfers for tax purposes.
"The proposed regulations will assist taxpayers in understanding the relationship between the federal charitable contribution deduction and the new statutory limitation on the deduction for state and local tax payments," according to the IRS notice.
To put things in perspective, New Yorkers who claimed the SALT tax break took an average deduction of $22,169 in 2015, according to the Tax Policy Center. In New Jersey and Connecticut, those amounts were $17,850 and $19,665, respectively.
Even though state legislators have given their blessing — and have signaled that they're willing to fight the federal government in court — tax lawyers have told clients to hold off on making contributions to municipalities' charitable funds for now.
"I think for everybody that we've dealt with in the states with the workarounds, we've expressed our concern that Treasury may not go along with this," Michael D'Addio, a principal at Marcum LLP, told CNBC earlier.
Attorneys and critics of the workarounds said that the IRS requires that there be "charitable intent" in order for a contribution to be deductible.
Municipalities' decision to offer donors a credit for giving to a charitable fund may also be seen as fishy, critics and lawyers said.
"Also, if you make a contribution that imposes a liability on the recipient, then the liability disallows the contribution," Jared Walczak, senior policy analyst at the Tax Foundation, said in an earlier interview with CNBC.
"In this case, the liability is the local or state government offering a tax credit, which zeroes out the actual charity," he said.
Steven Peters | Getty Images
For individuals who are questioning whether to make a contribution to their municipality's charitable fund instead of paying the property tax as they usually do, attorneys have advised them to sit tight for now.
"The caveat we give clients is that it remains to be seen from the IRS' point of view," Seth Rabe, senior manager of the state and local tax services group at Mazars USA, said in an earlier interview with CNBC. "You could potentially be subject to back taxes and your contribution isn't viewed as a gift."
To play it safe, filers could always try maxing out the available $10,000 SALT deduction prior to making charitable contributions to state funds, Walczak said.
More from Personal Finance
IRS may nix blue states' tax cap workaroundWhat the new tax law means for your charitable givingBill Clinton: Tax law is a "bullet aimed at New York and California"
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a7573bc788fdf989ed686a262823a3e0 | https://www.cnbc.com/2018/05/23/is-financial-infidelity-worse-than-cheating.html | Is financial infidelity worse than cheating? | Is financial infidelity worse than cheating?
Image Source | Getty Images
It's all about the money, honey.
Although a cheating heart is likely to get you into hot water with your significant other, some consider financial infidelity to be a bigger offense.
Some 31 percent of people in a relationship think that keeping a credit card, checking account or savings account a secret from their partner is worse than being unfaithful, according to a new survey by Bankrate sister site CreditCards.com.
"It does make it a little harder to be working as a team when you're not combining finances," says Sam Schultz, co-founder of Honeyfi, a budgeting app for couples.
Only 77 percent in the poll said they believe their partners are honest with them about finances.
"Love is blind," says Jamie Segal Davis, a family law attorney with Laing and Weichholz in Boca Raton, Florida.
VIDEO1:1101:11Here's when couples should start having tough conversations about moneyMake It
Having a secret stash could be an indicator of a bigger problem in the relationship. If you're considering opening a bank account and don't want your partner to know about it, make sure to examine your reasoning, Davis says.
"A lot of the time, it's coupled with emotional infidelity," Davis says.
Commingling finances may be less of a priority for millennials, who, unlike previous generations, tend to marry later, have dual incomes and carry more student debt.
This could explain why, among the 18 to 34 set, 33 percent of survey respondents admitted to having, either presently or in the past, an account their partner didn't know about, compared with 23 percent of those ages 35 to 54 and 15 percent of those 55 and older who have hidden an account.
Even if you opt to have bank accounts separate from your partner, open communication about your finances is a good indicator of a healthy relationship, says Jonathan Walker of The Center for the New Middle Class, which researches consumer behavior around financial decisions.
"We found that couples who argue about money argue about other things as well. And couples who don't argue about other things don't argue about money either," Walker says.
More from Bankrate:How much should you have in savings at each age?7 tips for choosing a savings account when interest rates increase5 ways to sweeten your savings a little at a time
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6233455041ba24356a22c03438b31fa9 | https://www.cnbc.com/2018/05/23/jared-kushner-reportedly-gets-permanent-security-clearance.html | Jared Kushner gets permanent White House security clearance, and met with special counsel for a second time | Jared Kushner gets permanent White House security clearance, and met with special counsel for a second time
Jared KushnerGetty Images
President Donald Trump's son-in-law, Jared Kushner, has been granted a permanent security clearance after operating under an interim clearance — or less — for more than a year.
In a statement to CNBC, Kushner's lawyer, Abbe Lowell, also said that his client sat "for two interviews with the Office of Special Counsel."
The second interview lasted for more than six hours, and included questions regarding the Trump campaign and the transition period before the presidential inauguration, as well as the Comey firing, NBC reported, citing a source familiar with the interview.
Kushner, a senior White House advisor, had reportedly met with special counsel Robert Mueller's team for the first time in November as part of the probe of potential links between Trump's presidential campaign and Russia.
VIDEO1:1201:12Rudy Giuliani says Trump son-in-law Jared Kushner is 'disposable'News Videos
Career officials approved Kushner's permanent security clearance after the completion of an FBI background check process. The president was reportedly not involved in that process.
Several White House officials with interim security clearances had been downgraded in February, chief of staff John Kelly wrote in a memo at the time.
Lowell told CNBC on Wednesday that his client's application "was properly submitted, reviewed by numerous career officials and underwent the normal process."
He added: "Having completed all of these processes, he's looking forward to continuing to do the work the president has asked him to do."
Neither the special counsel nor the White House immediately responded to CNBC's requests for comment.
VIDEO1:0701:07Planned Parenthood president: Jared Kushner and Ivanka Trump offered a 'bribe' to stop abortionsNews Videos
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b43be44796e2aebda6b323fab8aa31be | https://www.cnbc.com/2018/05/23/lake-worths-alert-system-hacked-sends-out-warning-of-zombie-invasion.html | Lake Worth's alert system is hacked and sends out a warning of a zombie invasion | Lake Worth's alert system is hacked and sends out a warning of a zombie invasion
Somebody has a lot of explaining to do.
Yes, officials in Lake Worth, Fla., a city next to Palm Beach, are trying to find out who sent out a cellphone alert warning of a zombie attack.
Lake Worth spokesman Ben Kerr told the Palm Beach Post that an independent investigation is underway to determine who was behind the message sent to some 7,880 customers during a 27-minute power outage early Sunday.
During the city's own investigation officials found that no current or former employees hacked the message to include the warning of an alien invasion, Kerr said.
Tweet
"Those messages are pre-prepared," Kerr added. "There's literally thousands of them. At some point, some edits were made and that's what you saw. Someone edited it with a zombie invasion going on." He told the paper that "no one was fired for it."
The zany zombie episode began at 1:41 a.m., when a message went out alerting residents to the power cuts but it also warning of a "zombie alert for Lake Worth and Terminus." Terminus is nowhere near Lake Worth – it's a reference to the city in the zombie TV show "The Walking Dead."
"There are now far less than seven-thousand-three-hundred-eighty customers involved due to extreme zombie activity," the notice added.
The embarrassment follows a more alarming incident in January in which a warning about an imminent ballistic-missile threat was sent in error to residents of Hawaii.
In a post on Lake Worth Live, a Facebook community site, Kerr said 7,880 customers were affected and that power was restored within 27 minutes.
The zombies, however, remain a mystery.
More from USA Today: Police: 'No reports of zombies' in Pennsylvania despite strange road sign Thursday'Zombie' raccoons are terrifying residents in OhioWhy 'iZombie' is the only zombie show you need in 2018
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8b7f7185320754842d9f46e6e6295887 | https://www.cnbc.com/2018/05/23/lowes-same-store-sales-miss-estimates.html | Lowe's maintains annual targets despite missing first-quarter sales estimates | Lowe's maintains annual targets despite missing first-quarter sales estimates
VIDEO3:2503:25Tiffany beats Street, Target misses on EPSSquawk Box
Lowe's missed Wall Street forecasts for quarterly sales on Wednesday as a long winter hit demand for outdoor products, but the home improvement retailer maintained its annual financial targets on expectations that demand will recover.
Many U.S. retailers have said that a late start to the spring selling season has weighed on sales of lawn-mowers, patio furniture, and other seasonal products during the February-April period.
Still, Lowe's Chief Executive Officer Robert Niblock said in a statement he was "encouraged by strong sales in the month of May."
Shares of Lowe's, the No. 2 U.S. home improvement chain, rose 3 percent to $88.30 in premarket trading, despite the company's lower-than-expected comparable-store sales for the first quarter.
Sales at Lowe's stores open at least a year rose 0.6 percent in the three months ended May 4, while analysts on average had expected a 3.06 percent increase, according to Thomson Reuters I/B/E/S.
"While certainly a touch disappointing, (Lowe's report) wasn't a big surprise to us. We believe most of the (comparable-store sales) pressure to be more transitory in nature than structural," Gordon Haskett analyst Chuck Grom said.
A Lowe's employee walks through the store during the grand opening of the Lowe's store in San Francisco, California.Getty Images
Like Lowe's, its bigger peer Home Depot last week blamed cold weather for missing Wall Street estimates on same-store sales for the first time in seven quarters.
Lowe's maintained its annual forecast for profit and same-store sales, while slightly raising its estimate for sales growth to reflect an accounting change.
The company's net income rose to $988 million or $1.19 per share in the first quarter, while sales rose nearly 3 percent to $17.36 billion. Analysts had expected earnings of $1.22 per share and revenue of $17.46 billion.
On Tuesday, Mooresville-North Carolina-based Lowe's said current J.C. Penney CEO Marvin Ellison would be taking over at Lowe's, replacing Niblock, who held the position for 13 years.
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1789d7afad9c25f5fe5d08f4adc87f59 | https://www.cnbc.com/2018/05/23/malaysias-mahathir-mohamad-says-national-debt-is-65-percent-of-gdp.html | Malaysia's Prime Minister Mahathir Mohamad says national debt is 65 percent of GDP | Malaysia's Prime Minister Mahathir Mohamad says national debt is 65 percent of GDP
The Petronas Twin Towers in Kuala Lumpur, Malaysia.Rustam Azmi | Getty Images
Malaysia's Prime Minister Mahathir Mohamad said on Wednesday that the new government will look to cut down the country's debt which amounts to 1 trillion ringgit, by aborting or reviewing some projects and cutting salaries of cabinet ministers.
Mahathir also said the national debt is 65 percent of the GDP. Ousted premier Najib Razak has said previously that the debt was below his government's self-imposed ceiling of 55 percent of GDP.
"I've been informed that our debt is actually 1 trillion ringgit, but today we were able to study and look for ways to reduce this debt," he said at a press conference.
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7e66e2e4f8a38db95a4fd9e54c472c6e | https://www.cnbc.com/2018/05/23/marks-and-spencers-sees-profit-fall-for-second-straight-year.html | Britain's M&S says must accelerate change or die | Britain's M&S says must accelerate change or die
Thomas Samson | AFP | Getty Images
Britain's Marks & Spencer said on Wednesday it urgently had to modernize or risk fading away as it reported a second straight decline in annual profit and booked a 321 million pounds ($430 million) charge for a store closure programme.The 134-year-old M&S faces unrelenting competition from supermarkets, fashion chains like Zara, H&M and Primark, as well as online giant Amazon, while efforts to revitalize its business are being hampered by ongoing pressure on UK consumers' spending power.M&S reset its strategy in November, two months after retail veteran Archie Norman joined as chairman, detailing a five-year programme of store closures and relocations, and moves to make its misfiring food business more competitive.On Tuesday M&S said it would close 100 UK stores by 2022, further accelerating the plan as it strives to make at least a third of sales online.M&S, one of the best-known names in British retail, said it made a pretax profit before one-off items of 580.9 million pounds ($778.6 million) in the year to March 31.That was ahead of analysts' average forecast of 573 million pounds but down from 613.8 million pounds made in 2016-17. After taking account of adjusted items of 514.1 million pounds, including the charge relating to store closures, pretax profit was 66.8 million pounds, a 62 percent fall.Turnover was broadly flat at 10.7 billion pounds."We have to modernize our business to ensure we are competitive and reignite our culture. Accelerated change is the only option," said M&S. Shares in M&S have fallen 26 percent over the last year and the firm is in danger of being booted out of the prestigious FTSE 100 index.The stock closed Tuesday at 292 pence, valuing the business at 4.7 billion pounds.
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533a1dcddd60d04456549b59451dda6d | https://www.cnbc.com/2018/05/23/north-korea-says-future-of-trump-kim-summit-is-up-to-us.html | North Korea says future of summit with US is up to Washington: State media | North Korea says future of summit with US is up to Washington: State media
President Donald Trump and North Korean leader Kim Jong-Un.Getty Images
North Korea's vice foreign minister said the future of the summit between Pyongyang and Washington is "entirely" up to the United States and condemned a media interview by U.S. Vice President Mike Pence in which he compared the North to Libya.
"We will neither beg the U.S. for dialogue nor take the trouble to persuade them if they do not want to sit together with us," said Choe Son Hui, according to a report by North Korea's central news agency on Thursday.
Choe said she could suggest to leader Kim Jong Un that North Korea reconsider the summit, set for June 12 in Singapore, if the United States offends the North's good will.
VIDEO1:3601:36Trump casts doubt on North Korea meetingSquawk Box
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fe7602af337fb77a10b7e9c24e82655f | https://www.cnbc.com/2018/05/23/obituary-pulitzer-winning-author-philip-roth-dies-at-85.html | Pulitzer-winning author Philip Roth dies at 85 | Pulitzer-winning author Philip Roth dies at 85
Author Philip Roth attends the 2013 PEN Literary Gala at American Museum of Natural History on April 30, 2013 in New York City.Taylor Hill/WireImage
Author Philip Roth, who was both hailed and derided for laying bare the neuroses and obsessions that haunted the modern Jewish-American experience, died on Tuesday at the age of 85, his agent said.
Roth died in New York City at 10:30 p.m. local time of congestive heart failure, his literary agent Andrew Wylie said.
Roth wrote more than 30 books, including the 1991 memoir "Patrimony," which examined his complex relationship with his father and won the National Book Critics Circle Award.
In his later years, Roth turned to the existential and sexual crises of middle age, never abandoning his commitment to exploring shame, embarrassment and other guilty secrets of the self, although usually with a heavy dose of humor.
After more than 50 years as a writer, Roth decided that 2010's "Nemesis," the story of a polio epidemic in the Newark, New Jersey, neighborhood where he grew up, would be his last novel.
He then went back and reread all his works "to see whether I'd wasted my time," he said in a 2014 interview published in the New York Times Book Review. For his conclusion, he quoted Joe Lewis, the heavyweight boxing champion of the 1930s and '40s: "I did the best I could with what I had."
In 2017 he published "Why Write?," a collection of essays and non-fiction works written between 1960 and 2013. Roth's best-known work was the 1969 novel "Portnoy's Complaint," a first-person narrative about Alexander Portnoy, a young middle-class Jewish New Yorker. The book featured several notorious masturbation scenes and a narrator who declared he wanted to "put the id back in yid."
Roth's first published book was the 1959 novella and short-story collection "Goodbye, Columbus," which won the National Book Award. Several of his novels, including "Zuckerman Unbound," "The Ghost Writer" and "The Anatomy Lesson" feature Nathan Zuckerman, a character who came to be seen as Roth's fictional alter ego.
Roth liked to play with the distinctions between fact and fiction, often writing about neurotic novelists and even naming some characters "Philip." Yet he was frequently annoyed and amused by readers' desire to project the real Roth onto his characters.
Although his novels often explored the Jewish experience in America, Roth, who said he was an atheist, rejected being labeled a Jewish-American writer.
"It's not a question that interests me. I know exactly what it means to be Jewish and it's really not interesting," he told the Guardian newspaper in 2005. "I'm an American."
Some critics said Roth's novels exposed him as a self-hating Jew who played on negative stereotypes or generally cast Jews in a bad light. He would recall the hostile reception at a symposium at New York's Yeshiva University in 1962 as the "most bruising public exchange of my life."
Roth won the Pulitzer Prize for 1997's "American Pastoral," which examined the impact of the 1960s on a New Jersey family. He was the first three-time winner of the PEN/Faulkner Award, honored for "Operation Shylock" in 1994, "The Human Stain" in 2001 and "Everyman" in 2007. Roth also received the National Medal of Arts at the White House in 1998.
Philip Milton Roth was born on March 19, 1933, in Newark, New Jersey. The son of an insurance salesman, Roth earned a bachelor's degree at Buckle University and a master's degree in English from the University of Chicago. He dropped out of the doctoral program in 1959 to write film reviews for the New Republic before "Goodbye, Columbus" came out.
Roth taught comparative literature, mostly at the University of Pennsylvania. He retired from teaching in 1992 as a distinguished professor of literature at New York's Hunter College.
Roth had a long relationship with British actress Claire Bloom but their five-year marriage ended in divorce in 1995. A year later, she published a bruising memoir, "Leaving a Doll's House," in which she portrayed him as depressed, remote, self-centered and verbally abusive.
Roth had been especially prolific in the years leading to his 2012 retirement from writing, turning out novels nearly every two years. His more recent books included 2001's "The Dying Animal" and "The Human Stain," published in 2000 and released in 2003 as a movie starring Anthony Hopkins and Nicole Kidman.
"The Plot Against America," published in 2004, imagines what would have happened had flying ace Charles Lindbergh, an isolationist who expressed anti-Semitic views, defeated Franklin Roosevelt in the 1940 election and signed a peace accord with Adolf Hitler.
Following the death of several friends, including novelist Saul Bellow in 2005, Roth wrote "Everyman," a short work of fiction about the physical decline and death of a successful advertising executive.
Roth was considered a difficult interview subject and told the Guardian he disliked discussing his books. "You should let people fight with the books on their own and rediscover what they are and what they are not."
Roth said the act of writing for him is "filled with fear and loneliness and anxiety." But, he added, "There are some days that compensate completely. In my life I have had, in total, a couple of months of these completely wonderful days as a writer, and that is enough."
In a New York Times interview in 2018, Roth reflected on his 50-plus years as a writer, describing it as: "Exhilaration and groaning. Frustration and freedom. Inspiration and uncertainty. Abundance and emptiness. Blazing forth and muddling through."
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f54e7b091da8bd3c8989804a3aa69c0c | https://www.cnbc.com/2018/05/23/renowned-fund-manager-says-italy-wont-exit-the-euro-and-we-wont-face-another-brexit.html | Renowned fund manager says Italy won’t exit the euro and we won’t face another Brexit | Renowned fund manager says Italy won’t exit the euro and we won’t face another Brexit
VIDEO3:0703:07This CEO says Italy 'isn't central' to EuropeSquawk Box Europe
The two anti-establishment parties looking to clinch power in Italy will not take the country out of the euro zone and reject the single currency, the co-chief of asset management firm Standard Life Aberdeen told CNBC Wednesday.
The resurgence of the Five Star Movement (M5S) and Lega — two anti-establishment parties putting together the next Italian government — has raised concerns that the third largest euro zone economy could leave the bloc. Both parties have, at different occasions, mentioned plans to depart from the common currency pact, though M5S has softened its stance on the issue over time. Nonetheless, the coalition deal between M5S and Lega does not include any reference to officially leaving the 19-member area.
"Clearly the result in Italy has made people think about the anti-euro lobby," Martin Gilbert told CNBC's Joumanna Bercetche in Brussels, but added: "I don't think we are going to see any significant change."
"I don't think we are going to see a Brexit for instance … I don't think we are going to see anything of that magnitude."
The Italian national flag, seen between statues, flies atop the Quirinale palace, the office of Italy's president in Rome, Italy.Alessia Pierdomenico | Bloomberg | Getty Images
The new power-sharing deal between Lega and M5S has lead various analysts to predict the future for the embattled euro nation that still has hefty public debt loads and sizeable non-performing loans in its banking sector. UBS strategists said in a note Tuesday that the question is whether this new coalition brings the European project under closer scrutiny.
"We believe this is unlikely given Italian leaders have already backpedalled from their most extreme positions," the analysts said.
The incoming coalition's intention to increase public spending and re-negotiate European fiscal rules could spark heated discussions with Brussels. The focus is now on President Sergio Mattarella, who needs to approve the names of the new cabinet. Mattarella is taking his time to sign off the choice for prime minister — private law professor Giuseppe Conte — and also the choice for finance minister, Paolo Savona — a euroskeptic economist. Expectations are that Mattarella will announce his decisions on Thursday.
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2381302aa58ba2d3afb8657506646b83 | https://www.cnbc.com/2018/05/23/stocks-making-the-biggest-moves-premarket-low-tgt-tif-intu-hpe-rrgb-more.html | Stocks making the biggest moves premarket: LOW, TGT, TIF, INTU, HPE, RRGB & more | Stocks making the biggest moves premarket: LOW, TGT, TIF, INTU, HPE, RRGB & more
VIDEO1:0601:06Markets turn south on renewed trade worriesMarkets
Check out the companies making headlines before the bell:
Lowe's – The home improvement retailer missed estimates by 3 cents a share, with quarterly earnings of $1.19 per share. Revenue missed forecasts, as well, and same-store sales were up 0.6 percent compared to the consensus Thomson Reuters estimate of a 3.1 percent increase. Lowe's said bad weather impacted sales for much of the quarter but that it is encouraged by strong sales so far this month.
Target – Target reported adjusted quarterly profit of $1.32 per share, missing estimates by 7 cents a share. Revenue was slightly below forecasts and a comparable-store sales increase of 3 percent was just above the 2.9 percent consensus forecast. Target also mentioned weather as a factor which delayed some sales.
Tiffany – The luxury goods retailer earned $1.14 per share for the first quarter, easily beating the 83 cents a share consensus estimate. Revenue and comparable-store sales were well above Street forecasts, as well. Tiffany also raised its full-year outlook and announced a $1 billion share repurchase program.
Intuit – Intuit reported adjusted quarterly profit of $4.82 per share, beating the consensus estimate of $4.68 a share. The financial software company also saw revenue beat forecasts and it issued strong full-year guidance.
Hewlett Packard Enterprise – The company beat forecasts by 3 cents a share, reporting adjusted quarterly profit of 34 cents per share. Revenue also beat estimates and the company raised its full-year forecast amid stronger sales of its servers and networking equipment.
Red Robin Gourmet Burgers – Red Robin earned 69 cents per share for the first quarter, falling 7 cents a share shy of the Street's consensus forecasts. The restaurant chain's revenue was also short of estimates, with comparable restaurant sales posting an unexpected drop of 0.9 percent.
The Container Store – The company reported quarterly profit of 18 cents per share, 5 cents a share less than Wall Street had anticipated. The retailer's revenue topped estimates, however. The company cited "timing factors" among key negative factors impacting profitability.
Tesla – The automaker cut the price of its Model X in China by up to $14,000 after China announced significant cuts in tariffs for imported automobiles and car parts.
Wynn Resorts – The casino operator's shareholders rejected the company's executive compensation plan at its annual meeting last week, according to a new Securities and Exchange Commission filing.
WPP – WPP lost the HSBC advertising account to PHD, a unit of rival ad agency Omnicom. WPP had been handling the HSBC media account for over a decade.
Spencer Platt | Getty Images
Barclays – Barclays is not exploring a potential merger with rival banks, according to sources quoted by Reuters. The Financial Times had reported that several Barclays board members were looking at a deal with another bank and that chairman John McFarlane favored a possible combination with Standard Chartered.
Taiwan Semiconductor – The chipmaker has begun mass production of next-generation chips for Apple's iPhone, according to a Bloomberg report. The chips would be used in new iPhones to be launched later this year.
Nordstrom – Nordstrom was upgraded to "buy" from "hold" at Deutsche Bank, saying the 10 percent sell-off that followed the retailer's first-quarter earnings report was overdone.
Urban Outfitters – Urban Outfitters reported adjusted quarterly profit of 38 cents per share, beating forecasts by 7 cents a share. The apparel retailer's revenue also beat estimates, with strong consumer spending at its stores despite bad weather during the quarter.
Shake Shack – The restaurant chain's shares were downgraded to "neutral" from "buy" in a valuation call at Longbow, which notes that the stock is now trading above its most recent $54 price target.
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ac3a60bd24c64ec9b01208c933645cf7 | https://www.cnbc.com/2018/05/23/study-shows-surge-in-calls-to-poison-control-for-adhd-meds.html | Study shows surge in calls to poison control for ADHD meds | Study shows surge in calls to poison control for ADHD meds
30mg tablets of Shire Plc's Adderall XR.Jb Reed | Bloomberg | Getty Images
A NEW STUDY IS SOUNDING the alarm about misuse of medication for attention deficit hyperactivity disorder.
There were 156,365 calls to poison control centers for people under 20 who were improperly exposed to ADHD medication from 2000 through 2014, according to the study published in the journal Pediatrics. The number of calls surged between 2000 and 2011 before declining slightly between 2011 and 2014.
Overall, call volume increased by 60 percent over the period, says the study's senior author, Gary Smith.
More from US News & World Report:Is ADHD being oversold in America?What are the signs my teen might be misusing ADHD medications? Saving lives, losing themselves
"As the diagnoses and treatment with medication of ADHD have increased in the U.S., these exposures have also increased, which means we really do need to pay more attention … and for different age groups, come up with different strategies to prevent them," says Smith, director of the Center for Injury Research and Policy at Nationwide Children's Hospital in Columbus, Ohio.
As of 2016, an estimated 6.1 million children between the ages of 2 and 17 had at some point been diagnosed with ADHD, according to the Centers for Disease Control and Prevention and survey data. About 6 in 10 currently with ADHD took medication to treat the neurobehavioral disorder, which can make it extremely difficult for children to focus or sit still.
Between 2003 and 2011, the estimate of children and adolescents diagnosed at some point with ADHD rose from 4.4 million to 6.4 million, though those figures are based on a differently administered survey and represent a smaller age range of 4 to 17.
Brand-name medications for ADHD include Adderall, Concerta and Ritalin. According to the study, most of the more than 156,000 poison-control calls were for those who experienced unintentional exposure to such drugs – a category including young children who accessed poorly stored medications and those a bit older who may have taken too much or the wrong medication. Three-quarters of the calls involved children 12 years old or younger, and most didn't result in a trip to a health care facility.
But among teenagers, nearly a quarter of calls were for those intentionally abusing or misusing the pills, the study showed. Almost another quarter – nearly 9,000 calls – were related to those between 13 and 19 years old who may have been attempting suicide, which Smith says is "very concerning."
"They're taking bigger doses, it's resulting in more serious outcomes and it's not infrequent," he says. "Looking into the motivations behind these attempted suicides would be absolutely critical."
While the study only reported three deaths, all were tied to intentional exposure among teens, including one suspected suicide. Smith says it's unclear why so many teenagers abused or misused the medication, or whether the pills they took were prescribed to them or not.
The misuse of ADHD medication is fairly prevalent among college students, who may get the pills from friends and use the so-called study drugs to help them focus.
To prevent improper exposure to ADHD medication, parents and teenagers should be educated on the dangers of misuse, the report said. Other strategies include storing medication safely, packaging pills by dosage and considering the combination of medication and behavioral therapy for treating ADHD.
"When you have these kinds of medications in the home that can cause serious side effects, they need to be kept in their containers with a child-resistant closure so that they don't get into them," Smith says.
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5dcc8cb20681dccd78e8c294e6e8dab5 | https://www.cnbc.com/2018/05/23/thinx-ceo-says-past-controversy-helped-set-up-the-company-for-success.html | Thinx CEO says past controversy has helped set up the company for success | Thinx CEO says past controversy has helped set up the company for success
VIDEO5:0405:04THINX CEO Maria Molland Selby on taking on TampaxCNBC Disruptor 50
Thinx CEO Maria Molland Selby wants to change the way women think about feminine hygiene products.
The company, ranked No. 37 on CNBC's sixth annual Disruptor 50 list, makes a line of panties that look like regular underwear but can replace or reinforce traditional period products.
Meet the 2018 CNBC Disruptor 50 companies
However, Thinx was plagued by controversy last year when co-founder and then-CEO Miki Agrawal was accused of sexual harassment by a former employee. She denies the charge but stepped down from the top spot.
Selby took over last July. "The business had a really strong foundation and that's a testament to just a great product, a fantastic team and the huge market opportunity in front of us," Selby said in a "Power Lunch" interview.
"Since I've been there I've focused on taking a deep look at the systems, the processes, the team, the organizational design, and that is unusual for a company of our stage and size," she added. "That has actually set us up for success because we now can scale faster and more efficiently."
More from CNBC Disruptor 50:Peloton CEO John Foley says fitness company is 'weirdly profitable'Rent the Runway CEO: People should think about their closets like stock portfoliosWhen Silicon Valley VCs write the check, women get less, but that's changing
The company was founded in 2011 and has underwear that ranges in price from $24 to $39 a pair.
Despite that price point, Selby is convinced women will want to ditch traditional products.
For one, there is an increasing interest in supporting the environment, she noted.
"Every one of our products is washable and reusable so it's good for the planet," Selby said.
Plus, there is a real focus on health and wellness. "People are increasingly concerned about what they put in their body," she added.
Selby also remains unconcerned about the big corporations she's disrupting, like Tampax-maker Procter & Gamble.
"Young people have been putting really old things in their bodies now for more than 80 years," she said. "There's been absolutely no innovation."
Her next big goal is to move beyond the internet. The company is now 100 percent online and she'd like to also go "offline" so that customers can touch and feel the product.
"It's really quite beautiful and it feels really good," she said of the company's product.
A look back at the CNBC Disruptor 50: 6 years, 167 companies
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a98e0cfd17d14f6ad6b9bfee832e0211 | https://www.cnbc.com/2018/05/23/trader-targets-pullback-is-a-great-buying-opportunity.html | Target may have missed the mark on its latest earnings report, but Investitute.com co-founder and "Halftime Report" trader Pete Najarian remains bullish on the stock for the long-term. He used the pullback on Wednesday as an opportunity to increase his position in the stock.
On Wednesday before the bell the Minneapolis-based retailer reported first quarter results that missed analyst estimates for both EPS and revenue. The company cited poor spring weather as having a meaningful impact on its bottom line.
But Najarian believes that focusing on just the top and bottom line numbers is missing the point, since the retailer showed growth in other key areas -- especially online.
VIDEO0:3600:36Najarian: I bought more Target on the dipHalftime Report
"The earnings actually grew 9% year-over-year so they've got growth there, they've got growth in digital...they've got growth everywhere, and traffic numbers are at historic levels," he said.
Digital sales as well as foot traffic were bright spots for Target during its first quarter. E-commerce sales grew 28%, which was up from 21% during the same quarter a year ago. The total number of shoppers at the store rose 3.7%, representing the strongest performance in more than a decade.
And Najarian believes the meaningful growth in these areas is indicative of a larger trend -- he believes the growth shows that the company's initiatives, such as remodeling its storefronts, are paying off.
"I think they're doing all the right things. They're putting money where they need to. They're actually expanding what they're doing and it's going at a very fast, rapid pace right now. Because of that I think this is a great opportunity to buy," he said.
Target shares are up 9.2% this year, and the stock currently trades at 13.37X forward earnings.
Disclosure: Pete Najarian owns Target.
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64d818d80c7f2235cb6a3d7cac33aed4 | https://www.cnbc.com/2018/05/23/trump-spygate-a-scandal-the-likes-of-which-this-country-may-never-have-seen-before.html | Trump: 'SPYGATE' a scandal 'the likes of which this country may never have seen before' | Trump: 'SPYGATE' a scandal 'the likes of which this country may never have seen before'
Donald TrumpGetty Images
President Donald Trump is tweeting about the "Criminal Deep State" and says its efforts to undermine him have backfired.
He's referring to the FBI's reliance on an outside informant to determine whether Trump's campaign aides were working with Russia ahead of the 2016 election. He tweeted Wednesday: "SPYGATE could be one of the biggest political scandals in history!"
Donald Trump tweet
Trump and his GOP supporters in Congress are now demanding information on that informant, suggesting it's proof that the Obama administration was trying to spy on his campaign.
Trump also tweeted: "Look how things have turned around on the Criminal Deep State. They go after Phony Collusion with Russia, a made up Scam, and end up getting caught in a major SPY scandal the likes of which this country may never have seen before! What goes around, comes around!"
Donald Trump tweet
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a22154a84b6fa412a985038a520d6abf | https://www.cnbc.com/2018/05/23/us-crude-oil-prices-may-run-up-another-10-a-barrel-says-harold-hamm.html | Oil may be headed to $80 next, says drilling pioneer Harold Hamm | Oil may be headed to $80 next, says drilling pioneer Harold Hamm
VIDEO1:2901:29Continental Resources CEO: We see oil prices climbing to the mid-$70s to low-$80sSquawk Box
Oil prices still have room to run after rallying to 3½-year highs, drilling pioneer Harold Hamm said Wednesday.
The Continental Resources chairman and CEO said benchmark U.S. crude prices could still rise by about $10 from current levels near $72 a barrel.
"We're not looking at $100 oil in the future, or probably $90 oil, but it certainly could be in the mid-$70s and low $80s," he told CNBC in an interview on the sidelines of the Williston Basin Petroleum Conference in Bismarck, North Dakota.
Continental, one of the so-called frackers that pioneered drilling in North Dakota's Bakken shale fields, is getting an extra boost from higher prices. According to Hamm, the company did not hedge its production. Hedging, or locking in a price with buyers for future oil deliveries, protects drillers against price drops, but the practice can also leave money on the table if the cost of crude rises significantly.
Harold HammDavid Orrell | CNBC
Shares of Continental are up 60 percent over the last 12 months, and 26 percent this year. Meanwhile, the XOP, a closely followed ETF that tracks oil and gas exploration and production stocks, is up nearly 22 percent over the last year and almost 16 percent year to date.
At current prices, Hamm said Continental could generate $1 billion in free cash flow, which the company will use to reduce its debt load following a prolonged period of low crude prices. Producers like Continental rely on expensive drilling methods like hydraulic fracturing and horizontal drilling to squeeze oil and natural gas from shale rock formations.
Continental ended the first quarter of 2018 with $6.17 billion in debt. Hamm said the company's goal is to get that down to $5 billion.
That dovetails with the dominant trend in the relatively young shale fracking industry: exercising financial discipline in order to start returning more cash to shareholders.
Shale drilling has boosted U.S. crude production to record highs, but surging output in West Texas has led to bottlenecks because the region doesn't have enough pipelines to handle the new supply. That's an issue North Dakota has largely overcome, said Hamm.
"We had that up here, as you'll recall, and certainly before we got adequate pipelines and gathering," said Hamm. "But now that we have it, our cost structure is much lower, and they still have headwinds in that area."
"We saw a differential change of three-and-a-half dollars when [the Dakota Access Pipeline] came on. That was huge and made it easier getting that to market," he said.
The Dakota Access Pipeline began carrying crude from North Dakota to Illinois last year after President Donald Trump cleared a path for the pipeline, which spurred protests by Native American tribes and environmentalists that drew national attention.
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b42fe10cccdba59b464afe1cdf93afd6 | https://www.cnbc.com/2018/05/23/us-seize-control-of-infected-routers-in-possible-ukraine-attack.html | US seeks to seize control of hundreds of thousands of infected devices from hackers | US seeks to seize control of hundreds of thousands of infected devices from hackers
An illustration of a hacker working at a laptop.Bill Hinton | Getty Images
The U.S. government said late on Wednesday that it would seek to wrestle hundreds of thousands of infected routers and storage devices from the control of hackers who security researchers warned were planning to use the "botnet" to attack Ukraine.
A federal judge in Pennsylvania gave the FBI permission to seize an internet domain that authorities charge a Russian hacking group known as Sofacy was using to control infected devices.
The order allows them to direct the devices to communicate with an FBI-controlled server, which will be used to query location to pass on to authorities around the globe who can remove malware from infected equipment.
"This operation is the first step in the disruption of a botnet that provides the Sofacy actors with an array of capabilities that could be used for a variety of malicious purposes, including intelligence gathering, theft of valuable information, destructive or disruptive attacks, and the misattribution of such activities," Assistant Attorney General for National Security John Demers said in a statement.
The U.S. government announced the takedown effort after Cisco Systems early on Wednesday released a report on the hacking campaign that it said targeted devices from Linksys, MikroTik, Netgear, TP-Link and QNAP.
Cisco said the largest number of infections from the VPNFilter malware were in Ukraine, which led it to believe Russia was planning an attack on that country.
Cisco shared technical details with the United States and Ukraine governments as well as rivals who sell security software, hardware and services.
Ukraine's SBU state security service responded to the report by saying it showed Russia was readying a large-scale cyber attack ahead of the Champions League soccer final, due to be held in Kiev on Saturday.
Cyber security firms, governments and corporate security teams closely monitor events in Ukraine, where some of the world's most costly and destructive cyber attacks have been launched.
The Kremlin did not respond to a request for comment.
Russia has denied assertions by nations including Ukraine and Western cyber-security firms that it is behind a massive global hacking program that has included attempts to harm Ukraine's economy and interfering in the 2016 U.S. presidential election.
Netgear and Linksys advised customers to make sure their routers are patched with the latest version of its firmware. MikroTik, TP-Link and QNAP could not be reached.
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20cdd1743b686c11c8cb0e2a43f4246e | https://www.cnbc.com/2018/05/23/why-the-big-small-cap-rally-is-due-for-a-breather.html | Why the big small-cap rally is due for a breather | Why the big small-cap rally is due for a breather
VIDEO2:5802:58There’s nothing small about the small cap rally. Here’s how to play itTrading Nation
The Russell 2000 is about to post its best month since September, but one market watcher says the small-cap space could be due for a small breather before taking off again.
"We might see a little bit of a pullback here just because it's had this nice run, it's getting a little overbought," Matt Maley, equity strategist at Miller Tabak, said Tuesday on CNBC's "Trading Nation."
The small-cap index is on track to close more than 5 percent higher in May, its best monthly performance since September 2017, on the back of a rally in the U.S. dollar. Small caps are generally more domestic-focused and tend to outperform on dollar strength relative to their large-cap peers.
The DXY U.S. dollar index is up more than 2 percent this month, also its best performance since the U.S. presidential election.
Maley said that any pullback would likely only last days, not weeks, and that the Russell 2000 should then resume its march higher.
"Look at the chart on the Russell 2000 and it's a pretty bullish development here," he said. "It broke above the top end of what's called an ascending triangle formation and that tends to lead to a fairly decent rally."
Larry McDonald, editor of the Bear Traps Report, said he's eschewing small caps in favor of the parts of the market that would benefit from a trade deal with China.
"The global trade hostilities, all that news, all those news headlines, that really scares people back into the U.S. and back into small caps so it's a very, very crowded trade," McDonald told Tuesday's "Trading Nation."
Taking advice from billionaire investor George Soros, McDonald said he is discounting the obvious to bet on the unexpected. That has led him to natural gas as a wager on how the markets play out for the rest of the year.
"Natural gas will get a seat at the table and that's, I think, the unloved sector here that will benefit between now and the year-end," he said.
The UNG United States natural gas fund ETF has also had a positive May. UNG is up more than 6 percent for the month and nearly 3 percent for the year.
Disclaimer
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c077b87deb2adb64e2bf6992dd903d36 | https://www.cnbc.com/2018/05/24/after-hours-buzz-gps-rost-more.html | Stocks making the biggest moves after hours: Gap, Ross Stores and more | Stocks making the biggest moves after hours: Gap, Ross Stores and more
A pedestrian passes in front of a Gap Inc. store in Miami Beach, Florida.Scott McIntyre | Bloomberg | Getty Images
Check out the companies making headlines after the bell:
Gap shares plunged about 8 percent in extended trading. The clothing retailer, which owns brands like Banana Republic, Old Navy and Athleta, reported mixed first quarter earnings and revenue. Gap missed analyst expectations for earnings by 4 cents, reporting EPS of 42 cents on $3.78 billion in revenue, versus the 46 cents on $3.61 billion Wall Street projected.
Ross Stores stock fell more than 5 percent in after hours trading. The deep discount department store chain reported a slight beat on first quarter revenue, $3.59 billion versus the $3.54 expected, and also exceeded analyst estimates on same store sales. But for the second quarter, Ross forecast a 1 to 2 percent rise in same store sales, while Wall Street had projected a 2.6 percent jump.
Shares of Autodesk lost nearly 5 percent in extended trading. The software company reported strong first quarter financial results, beating on both top and bottom lines, but issued weak outlook. For the second quarter, Autodesk projected EPS of 14 to 16 cents, versus the 18 cents Wall Street had anticipated.
Decker's Outdoor stock climbed more than 4 percent after the clothing and lifestyle gear brand reported a much stronger fourth quarter than analysts expected. Decker's, which is the parent company to UGG and Teva, among other brands, reported EPS of 50 cents on $401 million in revenue versus the 19 cents EPS on $276 million that Wall Street expected. The company also issued full year guidance that surpassed analyst projections.
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42fd0b3e1f81b70fb1c970db266fe03a | https://www.cnbc.com/2018/05/24/best-buy-shares-tumble-6-percent-after-cfos-disappointing-outlook.html | Best Buy shares tumble 6% after CFO's disappointing outlook | Best Buy shares tumble 6% after CFO's disappointing outlook
The exterior of a Best Buy store in San Bruno, California.Getty Images
Best Buy stock fell 6 percent in premarket trading Thursday after the company did not provide an update to its full year forecast, despite reporting better than expected first quarter results.
"At this time we are not updating our full year fiscal 2019 guidance provided at the start of the year," Best Buy CFO Corie Barry said on a call with investors.
The technology retailer's shares initially turned positive after its first quarter earnings of $0.82 beat Wall Street's estimates by 8 cents. Best Buy's stock quickly reversed course, however, and fell steadily throughout the company's conference call.
"Genuinely, there is not more to read into" about Best Buy not raising its full year forecast, Barry said. "I know we did it last year. We just felt like there's so much of the year still in front of us."
Best Buy reported a comparable store sales increase of 7.1 percent, well above the consensus Thomson Reuters forecast of a 3 percent increase.
This was "another outstanding quarter" for the company, Moody's retail analyst Charlie O'Shea wrote in note. Best Buy's sales results are further evidence of "its substantial progress towards multi-channel retail," O'Shea added.
"Best Buy [is] in a strong position for the balance of this year," O'Shea said.
The company's investments in price-matching, faster delivery, improving the search function on its website and better customer service to draw shoppers to its stores and website have weighed on profitability. Despite the slowdown in e-commerce sales during this quarter, the company's turnaround has been strong.
"With focus and effort it is possible for any retailer to succeed against Amazon and other online players," GlobalData Retail managing director Neil Saunders wrote in a note.
Best Buy has about 15 percent of the U.S. consumer electronics market, compared to Amazon's 10 percent.
VIDEO1:3301:33U.S. mall owners look to apartments and hotels to replace SearsNews Videos
– Reuters contributed to this report.
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8dc431d90ce4fe772814b83c8369fb9a | https://www.cnbc.com/2018/05/24/best-buys-sell-off-could-soon-be-a-buying-opportunity-market-watcher.html | Best Buy’s big sell-off could soon be a buying opportunity, says market watcher | Best Buy’s big sell-off could soon be a buying opportunity, says market watcher
VIDEO2:1702:17Trading Nation: Best Buy your best buy?Trading Nation
Best Buy shares were sinking Thursday following a first-quarter beat that failed to impress Wall Street. The problem, according to one market watcher, was that expectations were too high.
"It was priced to perfection going into the number," Boris Schlossberg, managing director of FX strategy at BK Asset Management, told CNBC in an email Thursday.
Best Buy shares declined by about 8 percent on Thursday even after a quarterly beat on its top and bottom lines. U.S. online sales rose, though at nearly half the pace of a year earlier.
A sharp run-up to all-time highs last week made Schlossberg cautious on jumping in heading into earnings. He says that a price under $70 would become a scale-in buy where he adds to his position as the price decreases. Best Buy traded around $70 on Thursday.
Best Buy's guidance and overall performance confirm Schlossberg's long-term bull case for the retailer. In an appearance on CNBC's "Trading Nation" on Wednesday, Schlossberg said the company had done well in its strategy to survive in a tough retail environment.
"They've done a great job of figuring out how to do the bricks-and-clicks model and they've certainly rationalized their costs, the dividend is very good," Schlossberg said. "At this point, a lot of the good stuff is kind of discounted so I like it long-term."
Michael Bapis of the Bapis Group at HighTower Advisors is bullish over the long term but is sitting on the sidelines for now.
"We're taking a wait-and-see approach," Bapis said on Wednesday's "Trading Nation." "It has run up so much, trading at all-time highs."
Best Buy's recent quarter does give Bapis confidence in its future direction, though. Sales growth was driven by strong consumer demand, and e-commerce sales still look good, despite a slowdown, Bapis said in an email to CNBC on Thursday.
"We would definitely own it long term because this space is in a technological boom that's going to happen and keep happening for the next 20 to 40 years," Bapis said Wednesday.
Best Buy shares were on track to close Thursday with its worst daily performance since August. Its stock is still up 2 percent for the year.
Disclaimer
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bcf7925bbcce8555f8b5129638fce591 | https://www.cnbc.com/2018/05/24/bill-miller-stocks-go-higher-when-interest-rates-rise.html | Bill Miller says higher interest rates always led to a higher stock market the last two decades | Bill Miller says higher interest rates always led to a higher stock market the last two decades
Bill MillerScott Mlyn | CNBC
Higher interest rates are good for the stock market, noted investor Bill Miller said in call about the first quarter for markets.
"Looking at the last 20 years — all cases of higher interest rates have been met with a market that's gone higher," Miller said, according to notes from the call published May 15. He managed a fund at Legg Mason that beat the S&P 500 for 15 consecutive years through 2005 before he founded Miller Value Partners in 2016.
The opposite mentality has generally factored into daily market moves in recent years.
Stocks fell earlier this year as the 10-year Treasury yield climbed toward 3 percent. Even on Wednesday, stocks closed higher after minutes from the latest Fed meeting said the central bank would be comfortable letting inflation temporarily run above the 2 percent target, a statement that caused yields to decline.
But over the long term, Miller's analysis appears to be holding true. The S&P 500 is up more than 30 percent since the Fed raised its benchmark interest rate in December 2015 for the first time in nearly a decade.
Miller pointed out that:
During the bull market of 1980, bond yields rose 210 basis points and the market was up 26 percent.In 1983, bond yields rose 146 basis points and the market was up 17 percent.In 1996, bond yields rose 85 basis points and the market gained 20 percent.In 2009, bond yields rose 160 basis points and the market gained 23 percent.In 2013, bond yields rose 126 basis points and the market rose 30 percent.
He said the connection between higher yields and stock prices has become more complicated since the financial crisis. "But overall, I think it looks like the market actually wants to go up."
The S&P 500 is up more than 3 percent for the second quarter so far, and markets expect the Fed to raise rates at least two more times this year.
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78124590f468fcd07c06be62e7356f62 | https://www.cnbc.com/2018/05/24/bitcoin-tracking-for-slight-weekly-losses-despite-regulatory-crackdown.html | Bitcoin tracking for slight weekly losses despite news of regulatory crackdowns | Bitcoin tracking for slight weekly losses despite news of regulatory crackdowns
Chesnot | Getty Images
Bitcoin has held up relatively well this week despite negative headlines about regulatory crackdowns.
For analysts with a long-term view, that price action fits with their thesis that increased scrutiny will shake out the bad actors and make the markets healthy enough for institutions to invest.
"In the long run this is WILDLY bullish," Brian Kelly, a CNBC contributor and head of BKCM, said in a note to clients Thursday. "If the DoJ and CFTC feel as though they have 'cleaned' up the market, then it paves the way for a U.S. Physically backed Bitcoin ETF, and brings in institutional investors."
Bitcoin briefly hit a six-week low of $7,272 on Thursday morning after Bloomberg reported the U.S. Department of Justice opened a criminal probe into whether traders are manipulating the price of cryptocurrencies. The report, citing sources, said the Commodity Futures Trading Commission was assisting in the investigation.
However, bitcoin soon recovered its losses for the day and was trading near $7,570 in the afternoon, down just 8 percent since Friday. The CFTC, which oversees bitcoin futures, declined to comment, as did the Justice Department.
"I have not seen any evidence of price manipulation in bitcoin markets, but am certainly in favor of increased oversight, as it can only help to instill further confidence in the crypto markets," said Joe DiPasquale, founder and CEO of BitBull Capital, a cryptofund that invests in other cryptofunds.
VIDEO7:3807:38Crypto insider believes regulation is bullish for bitcoinFast Money
Other negative news could have hit bitcoin's price harder this week, but did not.
On Monday, the North American Securities Administrators Association announced that an "Operation Cryptosweep" crackdown on cryptocurrency-related fraud has resulted in nearly 70 inquiries and investigations nationwide since the beginning of this month. Thirty-five enforcement actions are pending or completed.
"These actions signal that 'adult supervision' is coming to crypto and adding such oversight incrementally improves the structural integrity and legitimacy for the crypto-currency investor," Fundstrat's Tom Lee said in a Thursday report. Lee maintained his midyear price target of $20,000 on bitcoin and a year-end forecast of $25,000.
That said, it may take longer for the cryptocurrency market to recover from the regulatory uncertainty that has contributed to bitcoin's more than 50 percent plunge at the start of this year.
Lee had predicted bitcoin would get a boost last week from Consensus and other cryptocurrency conferences during New York City's "Blockchain Week."
But the regulatory overhang persisted. On the Friday heading into the week of conferences, bitcoin fell to its lowest since April 20, a three-week low, after news prosecutors raided the largest cryptocurrency exchange in South Korea.
"The crypto market is still in its infancy — we are in the stone ages comparatively — and very sensitive to news and manipulation," said Matthew Roszak, co-founder of blockchain company Bloq and chairman of the Chamber of Digital Commerce.
"As the market matures with better infrastructure (exchanges, futures, etc.) along with increased participation from global institutional investors," he said, "the market will get past these growing pains."
VIDEO3:4103:41DOJ opens bitcoin manipulation probeClosing Bell
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38957bb2b6a5996f6e7f0af3c55b1307 | https://www.cnbc.com/2018/05/24/cashin-stock-drop-reflects-mistaken-assumption-trump-would-make-summit-happen.html | Art Cashin: Stock drop reflects mistaken assumption Trump would do everything to make summit happen | Art Cashin: Stock drop reflects mistaken assumption Trump would do everything to make summit happen
VIDEO1:3601:36Art Cashin: Stock drop reflects mistaken assumption Trump would do everything to make summit happenSquawk on the Street
The market thought that President Donald Trump would do everything to make the U.S. summit with North Korea work, but that didn't happen, closely followed trader Art Cashin said Thursday.
"You saw a rally when it looked like everyone was getting along," said Cashin, UBS director of floor operations at the New York Stock Exchange. "The assumption was that the president wanted very much to have this meeting. He was going to bend over backwards to get the support of [Chinese President] Xi to work on Kim."
Instead, stocks fell intraday Thursday, with the Dow at one point slumping more than 180 points, after Trump announced that he had canceled the Singapore summit with North Korean leader Kim Jong Un that was scheduled for next month.
Cashin told "Squawk on the Street" that the market could come off its lows because investors may realize that Trump's cancellation of the meeting with North Korea is part of the president's 'Art of the Deal' approach.
The markets' decline on Thursday is also due to the Commerce Department's investigation into whether the surge in automobile imports threatens to "impair" national security by "weakening" the U.S. economy, Cashin said.
"We're back to nose to nose on warfare negotiations and certainly nose to nose on trade policy," Cashin said, adding the Trump administration has had "enormous swings" in its stances on certain issues.
Commerce Secretary Wilbur Ross on Thursday defended his department's investigation.
Ross said in a "Squawk Box" interview that "national security is broadly defined," adding, "economic security is military security; and without economic security, you can't have military security."
Toyota's U.S.-traded shares were lower on the news, while domestic auto stocks were mixed.
Disclaimer
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25bbe554909295650f42284d979fba30 | https://www.cnbc.com/2018/05/24/charts-are-pointing-to-a-relief-rally-for-bonds-says-trader.html | Charts are pointing to a relief rally for bonds, says trader | Charts are pointing to a relief rally for bonds, says trader
VIDEO4:2204:22Trader sees a rally ahead for bondsTrading Nation
The bond market is about to breathe a sigh of relief, TradingAnalysis.com founder Todd Gordon told CNBC's "Trading Nation" on Thursday.
Looking at a chart of the ETF that tracks longer-term Treasurys, Gordon said the bond market is oversold as yields remain overbought. He expects a relief rally around the corner. Here's why:
• Gordon observes that the 20+ Year Treasury ETF (TLT) has just completed the fifth wave of the Elliott wave theory, which according to him usually indicates that the trend momentum is about to decrease.
• Given TLT was generally in a downtrend, Gordon says that this rate of change in momentum means that the "interest to sell is decreasing" for TLT, and TLT is about to head higher.
• Gordon also mentions that the move against the trend typically mirrors the level of the fourth wave, in this case $122 on TLT.
• This $122 level on TLT, according to Gordon, is also confirmed by small Elliott waves that are found within each wave, and even those indicate that TLT is heading to $122.
• As a result, Gordon wants to buy the June monthly 118-strike call and sell the June monthly 122-strike call for a total of 90 cents, or $90 per options spread.
• If TLT closes above $122 on June 15 expiration, Gordon could make $314 on the trade. If TLT closes below $118 on June 15 expiration, however, Gordon would lose the $90 he paid for the trade.
The trade: Gordon is suggesting buying the June monthly 118/122 call spread for 90 cents, or $90 per options spread.
Bottom line: Gordon believes that bond prices will rise, and TLT will return to $122.
Disclaimer
Correction: This story was revised because Gordon said he meant to say in the video that he wants to buy the June monthly 118-strike call and sell the June monthly 122-strike call, not the strike puts.
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c5488d3e17ecb76ce68dd1c81297461a | https://www.cnbc.com/2018/05/24/chipotle-is-adding-drive-thru-lanes-but-you-cant-order-food-at-them.html?__source=twitter%7Cmain | Chipotle is adding drive-thru lanes, but you can't order food at them | Chipotle is adding drive-thru lanes, but you can't order food at them
VIDEO0:5700:57Chipotle adds mobile order drive-thru lanesNews Videos
Chipotle Mexican Grill is systematically adding drive-thru lanes to some of its new locations, but you won't be able to place an order at any of them.
The burrito chain has dealt with a very public three-year-long sales slump that crippled its stock price. To revitalize its sales and encourage diners to return, the brand has implemented strategies like digital ordering, delivery and adding new menu items that it hasn't pursued aggressively in the past.
Drive-thru windows are cropping up at Chipotle restaurants across the country, allowing customers the option of staying in their cars to get their burritos and bowls.
However, these drive-thrus are a little different from the typical fast food order and pick-up lane. Here customers don't order their food through a microphone, they do it ahead of time through Chipotle's app or an online form.
Diners are provided with a pick-up time once they place their order and can drive through the mobile order lane to grab their meal without having to go inside the store.
"[CEO] Brian [Niccol] has said very well that Chipotle has this huge opportunity ahead of us as it relates to access," Curt Garner, chief digital and information officer at Chipotle, told CNBC. "We still only have 2,500 locations. There are plenty of places and occasions for us to continue to grow into. But as we've looked at access, we've also looked at it in terms of different restaurant formats and these mobile drive-thru pick-up restaurants are part of that."
So far, Chipotle has five of these locations in the U.S. There are two stores in Ohio, and single stores in Tennessee, Texas and Massachusetts. But more are coming.
"As we are looking at our real estate pipeline, part of the criteria that has been introduced is to understand how many of those sites might lend themselves to that experience, even if we don't open them immediately with [the mobile lane] enabled," he said.
In Virginia, a new Chipotle outfitted with this mobile pick-up lane is expected to open by the end of the year, a person familiar with the matter told CNBC.
"The idea of having a mobile pick-up station or a dedicated lane makes a lot of sense because anything that makes it more convenient for the guest has been proven to drive sales," Peter Saleh, analyst at BTIG, told CNBC.
For many Chipotle customers who have sampled the restaurant's menu and have a go-to order, the experience of walking down the line and picking out burrito toppings is no longer an amenity, but an obstacle, Garner said. For these diners, it is more convenient to place an order via an app or website and stroll in or drive by to pick it up.
Digital orders typically take about 12 minutes to be filled, Garner said. Although, those who use the app can order a meal hours in advance, selecting the specific time they want to pick it up when they place their order.
Garner said Chipotle receives thousands of digital orders before its restaurants even open as people reserve a lunchtime slot to come in and grab their burritos and bowls.
To meet this demand, Chipotle has installed second food lines in the back of all but about 100 of its stores. These lines are manned by two employees, instead of the typical five to seven that a front line would have and are situated near the grill.
The line is about 8 feet long and 2.5 feet wide with heated shelves and an area for food storage.
"The second 'make' line is one of the aspects of Chipotle that I think is a really significant competitive advantage as it relates to digital, Garner said. "One of the problems that companies have struggled with for a long time is having digital orders or any sort of out-of-store order come in and interrupt the flow on the main line that is servicing customers in person."
VIDEO10:4110:41Chipotle's new CEO on his turnaround plans, and his favorite orderSquawk on the Street
Chipotle, in adding these mobile order lanes, will have to ensure that it can get customers through the line quickly and that the food will be hot when it is picked up.
"Convenience is king," David Henkes, managing partner at Technomic, told CNBC. "The challenge is in logistics. If you don't do it well, you are going to essentially turn off more customers than you are bringing in."
For Chipotle, that means adding things like dedicated parking spaces for mobile users who arrive before their order is prepared and texting customers when the meal is ready to be picked up.
At Chipotle, mobile orders have created a new problem for kitchen mangers — invisible demand.
"You have to be able to have a balance," Daniel Bendas, managing partner at Synergy Consultants, which worked with Dunkin' in designing its mobile lane, told CNBC. "You can get as many orders as fast as you want, but you have to build the capacity in the kitchen to handle it ... the back of house has to predict volumes."
Dunkin' Donuts opened a mobile order pick-up lane in February at its Quincy, Massachusetts, location.
Normally, kitchen managers man the grill, cooking up chicken and rice based on the line that forms behind the counter. However, when the orders come from people who aren't in the building, managers have to rely on data to know how much food to prep during different times of day.
Another pressure point that Chipotle has encountered is that peak hours for mobile orders don't always align with peak hours in-store. While some of these digital orders will come in during the lunch or dinner rush, folks who are ordering online often order later in the evening or heavily on the weekends. So, Chipotle has had to staff its restaurants differently to meet this new demand.
Digital ordering, orders made online or via a mobile device, have become a bigger piece of restaurant industry sales in the last few years. However, it's still not a huge portion of restaurant sales.
"The problem with doing it through a drive-thru or dedicated window is most of the quick-service restaurants and even the fast-casual guys still have a very low digital percentage penetration," Saleh said. "Most are sub-10 percent. So, to have to dedicate that much real estate to just digital orders probably isn't very productive yet."
At Chipotle, digital orders accounted for 8.8 percent of total sales in the last quarter, up 40 percent from a year ago, Garner said. A Chipotle employee told CNBC that in-store orders total about $10,000 per day at his restaurant, while take-out orders are about $1,000. The employee wished to be unidentified because the information is confidential.
While digital orders are less than a tenth of the company's total sales now, Chipotle expects the number of such orders to grow, Garner said. He declined to offer a specific figure, noting that Chipotle executives will shed more light on the matter during a special investor call June 27.
While digital sales may be fewer in number, these orders have a higher average check compared with in-store purchases
"I think [mobile order lanes] will become the new norm for quick-service and fast-causal chains," Jason Kaplan owner and CEO of JK Consulting, told CNBC.
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3fa01e683fe61c62a879b66c059febc2 | https://www.cnbc.com/2018/05/24/cnbc-exclusive-cnbc-transcript-atlanta-federal-reserve-president-raphael-bostic-speaks-with-cnbcs-steve-liesman-today.html | CNBC Exclusive: CNBC Transcript: Atlanta Federal Reserve President Raphael Bostic Speaks with CNBC’s Steve Liesman Today | CNBC Exclusive: CNBC Transcript: Atlanta Federal Reserve President Raphael Bostic Speaks with CNBC’s Steve Liesman Today
WHEN: Today, Thursday, May 24, 2018
WHERE: CNBC's "Squawk on the Street"
The following is the unofficial transcript of an EXCLUSIVE CNBC interview with Atlanta Federal Reserve President Raphael Bostic and CNBC's Steve Liesman on CNBC's "Squawk on the Street" (M-F 9AM – 11AM) today, Thursday, May 24. Following is a link to video of the interview on CNBC.com: https://www.cnbc.com/video/2018/05/24/feds-bostic-want-to-see-how-the-economy-works-at-neutral.html?play=1.
References must be sourced to CNBC.
CARL QUINTANILLA: STEVE LIESMAN IS IN DALLAS THIS MORNING WITH ANOTHER IMPORTANT INTERVIEW. HEY, STEVE.
STEVE LIESMAN: GOOD MORNING. CARL. HERE WITH RAPHAEL BOSTIC, ATLANTA FEDERAL RESERVE PRESIDENT AT THE DALLAS FEDERAL RESERVE CONFERENCE ON DISRUPTION AND TECHNOLOGY. MR. BOSTIC, LET'S TALK ABOUT THE NEWS THAT'S OUT THERE. HOW DOES THIS PLAY INTO MARKETS AND THE ECONOMY? THIS IDEA OF THIS VERY IMPORTANT SUMMIT BEING OFF NOW.
RAPHAEL BOSTIC: I THINK IT'S GOING TO BE A SURPRISE TO EVERYONE. IT'S A SURPRISE TO ME -- I DIDN'T EVEN KNOW THAT THIS WAS A POSSIBILITY. AND I THINK IT WILL HAVE IMPLICATIONS FROM A CERTAINLY, UNCERTAINTY PERSPECTIVE. THERE'S JUST A LOT OF THE BUSINESS LEADERS I TALK TO, DON'T KNOW ABOUT WHERE POLICY IS GOING TO BE AND WHERE IT'S GOING TO LAND. AND I THINK THIS WILL – THIS HAS THE POTENTIAL TO ADD TO THAT IN THAT THESE GEOPOLITICAL RISKS REALLY DO HAVE IMPLICATIONS FOR HOW BUSINESS WILL TAKE PLACE.
LIESMAN: YOU'VE TALKED A LOT ABOUT THE UNCERTAINTY AROUND TRADE. THAT SHOWED UP IN THE MINUTES YESTERDAY - I WANT TO SAY TWO OR THREE TIMES. THIS IS THE IDEA OF THE UNCERTAINTY SURROUNDING TRADE, IN ADDITION TO THE UNCERTAINTY SURROUNDING GEOPOLITICS. THIS IS AN ISSUE AT THE FOREFRONT FOR THE FED RIGHT NOW.
BOSTIC: IT DEFINITELY IS. YOU KNOW, IS WHEN I TALKED TO BUSINESSLEADERS, I WANT TO KNOW WHAT INVESTMENTS THEY'RE GOING TO MAKE LONG-TERM THAT ARE GOING TO TRANSFORM THEIR PRODUCTIVE CAPACITY. AND WHEN BUSINESSES DON'T KNOW WHAT THE RULES ARE, THEY ALL TELL ME, "WE ARE RELUCTANT TO MAKE BIG BETS AND MAKE BIG COMMITMENTS ON INVESTMENTS IN THE FUTURE." AND SO THIS HAS REAL IMPLICATIONS, I THINK, FOR THE LIKELIHOOD THAT WE'RE GOING TO MAKE QUICK MOVEMENT TO A NEW TRAJECTORY, IF THAT'S GOING TO HAPPEN.
LIESMAN: DOES THIS NEGATE THE POSITIVE EFFECTS OF THE TAX CUTS?
BOSTIC: IT IS – THE WAY I SAY IT – IS A DOWNSIDE RISK. AND THERE'S -- UNCERTAINTY HAS ITS OWN CONTRIBUTION. THEN WE HAVE TO WIND UP AND FIGURE OUT WHAT THE POLICY WINDS UP BEING. AND IF THE POLICY TURNS OUT IN CERTAIN WAYS THEN BUSINESSES MAY GO FORWARD. BUT THE UNCERTAINTY NOW, YOU'RE AT A FORK IN THE ROAD AND THERE ARE MULTIPLE WAYS YOU CAN GO. AND I THINK, WHAT I'M HEARING FROM BUSINESSES IS THAT, "WE'RE GOING TO WAIT AND WE'RE GONNA SEE WHAT HAPPENS." AND I THINK THAT WILL OFFSET SOME OF THE IMPACT.
LIESMAN: LET ME GET TO SOME OF THE CORE ISSUES OF MONETARY POLICY RIGHT NOW. THE MARKET PRICING IN TWO ADDITIONAL HIKES THIS IS YEAR. DO YOU SEE A REASON TO DO THOSE TWO AND/OR ANOTHER ONE ON TOP OF THAT?
BOSTIC: WELL, WHEN I STARTED – WHEN THE YEAR STARTED, I WAS AT TWO. AND THEN THERE WAS THE TAX OVERHAUL, THERE WAS THE FISCAL PACKAGE WITH THE SPENDING AND I MOVED TO THREE, BECAUSE THAT WAS A LOT OF STIMULUS. I'M COMFORTABLE WITH THREE RIGHT NOW. AND SO I THINK THAT THE MARKET PRICE IN THE END – I THINK OUR COMMUNICATION HAS BEEN CONSISTENT WITH THAT IF YOU LOOK AT THE SUMMARY OF ECONOMIC PROJECTIONS, ALL THOSE SORTS OF THINGS. BUT I'M ALWAYS LOOKING TO SEE: IS THE ECONOMY COMING UP STRONGER THAN WE EXPECTED? IS IT COMING IN WEAKER THAN WE EXPECTED? SO I'M GOING TO MAKE SURE THAT MY DECISIONS AND THE COUNSEL I GIVE TO THE BOARD IS THAT LET'S LET THE EVIDENCE TELL US IF, YOU KNOW, WE'RE ON THE TRAJECTORY EXPECTED OR NOT. AND THEN ADJUST THAT WAY.
LIESMAN: ONE OF THE OTHER BIG ISSUES THAT WAS DISCUSS ED YESTERDAY IN THE MINUTES IS THIS ISSUE OF HOW CLOSE ARE WE TO THE END POINT. HOW CLOSE ARE WE TO THE TERMINAL RATE? WHAT IS THE NEUTRAL RATE? WHERE DO YOU STAND ON THIS ISSUE? SOME -- THERE WAS A COMMENT THAT A FEW PEOPLE ON THE BOARD THINK WE'RE CLOSE TO BEING THERE BEFORE TOO LONG.
BOSTIC: YEAH, SO WE HAVE LOTS OF DISCUSSIONS ABOUT THAT – ME AND MY STAFF TALK ABOUT THIS ALL THE TIME. YOU KNOW, OUR FOLKS HAVE THE VIEW THAT NEUTRAL IS SOMEWHERE BETWEEN 2.25% AND 2.75%. AND SO --
LIESMAN: THAT'S THREE RATE HIKES AWAY.
BOSTIC: THAT'S CLOSE. THAT IS CLOSE. SO ONE OF THE THINGS WE'RE TRYING TO GET A HANDLE ON IS – YOU KNOW, ARE WE SEEING SIGNS OF OVERHEATING AND HOW AGGRESSIVE SHOULD WE BE AS A – OR DO I THINK WE SHOULD BE.
LIESMAN: I WANT TO INTERRUPT YOU ON THAT BECAUSE THE ISSUE OF AGGRESIVE IS VERY IMPORTANT. BECAUSE REALLY THE QUESTION DO YOU NEED TO ACT TO GO FURTHER THAN NEUTRAL TO SLOW DOWN THE ECONOMY. IF YOU HAD TO MAKE THAT CHOICE NOW, HOW WOULD YOU ANSWER IT?
BOSTIC: I WOULD SAY NO RIGHT NOW. LIKE, FOR ME, I THINK WE GET TO NEUTRAL, AND THEN WE LET THE ECONOMY WORK. NOW I KNOW THAT WE HIT OUR TARGET OF 2%, BUT WE HIT THAT FOR LIKE, ONE MONTH OR A QUARTER. WE HAVE NOT BEEN PERSISTENTLY AT THAT LEVEL AND WE'VE COME CLOSE TO IT BEFORE AND WE'VE SEEN INFLATION TAPER OFF. SO I WOULDN'T TAKE THE SIGN THAT WE HAVE HIT THE TARGET AT ONE POINT AS DECLARING VICTORY. I WANT TO SEE HOW THE ECONOMY PLAYS OUT. AND I REALLY DO NOT WANT US TO CONTRACT AND REALLY DERAIL SOME OF THE MOMENTUM THAT WE HAVE SEEN IN THE ECONOMY.
LIESMAN: SPEAKING OF INFLATION, THE ISSUE OF OIL IS OUT THERE. ANOTHER LEVEL OF UNCERTAINTY HERE. WHAT AFFECTS DO YOU SEE IT HAVING ON THE ECONOMY?
BOSTIC: WELL OIL, AS YOU KNOW, OIL GOES THROUGH SO MANY OF THE PRODUCTS. IT IS GOING TO AFFECT THINGS. I WAS TALKING ABOUT IT WITH MY TRAINER YESTERDAY AND HE WAS COMPLAINING ABOUT THE GAS PRICES AND HOW THAT WAS PLAYING OUT. SO IT IS DEFINITELY GOING TO HAVE AN IMPACT ON OUR ECONOMY. BUT ONE THING I WOULD SAY, I REMEMBER BACK IN THE EARLY 2000s WHEN OIL I WAS AT 20 AND PEOPLE SAID, "WELL, IF OIL GOES TO 50, WE'RE GOING TO HAVE THIS HUGE RECESSION." AND IT JUST DIDN'T HAPPEN. SO BUSINESSES MAKE ADJUSTMENTS, CONSUMERS MAKE ADJUSTMENTS TO MAKE SURE THAT THEIR EXPERIENCES DON'T GO INTO LIKE, A LOT OF VOLATILITY. SO I'M GOING TO TAKE A WAIT AND SEE ATTITUDE. IT'S DEFINITELY GOING TO PUT PRESSURE ON PRICES BUT WE'LL SEE HOW MUCH BUSINESSES RESPOND AND HOW MUCH CONSUMERS DO.
LIESMAN: OK, BOSTIC, THANK YOU FOR JOINING US.
BOSTIC: GOOD TO TALK WITH YOU AS ALWAYS.
LIESMAN: ATLANTA FED PRESIDENT RAPHAEL BOSTIC. TOSS IT BACK TO YOU GUYS AND THE BIG STORY TODAY ON NORTH KOREA, CARL.
For more information contact:
Jennifer Dauble CNBC t: 201.735.4721 m: 201.615.2787 e: jennifer.dauble@nbcuni.com
Emma Martin CNBC t: 201.735.4713 m: 551.275.6221 e: emma.martin@nbcuni.com
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2e5a58cc370ef4ccf6d079fa086da391 | https://www.cnbc.com/2018/05/24/cnbc-interview-with-rdif-ceo-kirill-dmitriev.html | CNBC Interview with RDIF CEO, Kirill Dmitriev | CNBC Interview with RDIF CEO, Kirill Dmitriev
Following is a transcript of a CNBC interview with RDIF CEO, Kirill Dmitriev, and CNBC's Geoff Cutmore.
GC: So, let's start by just talking a little about some of the deals that RDIF is going to announce at this year's St Petersburg International Economic Forum.
KD: Sure, Geoff, it's a very busy time for us. So, we'll be announcing 12 new investments, with some of the leading funds from all over the world, including six new investments with France and President Macron is visiting us tomorrow. And of course there's going to be important set of discussions about Russia-French relations. And French businesses are investing in rehabilitation centres with us, they're investing even in algae production in Russia, and in some of the communal services in Russia. And, we also will be announcing some technology investments, including a new surgical robot for surgeries that will be operating quite a bit in Russia in Japanese and Chinese investors. I invested in this, and many other investments that we are going to be doing.
GC: Does it not strike you as odd that two countries – the French and the Japanese – who are apparently very close partners with the United States, are willing to announce fresh business deals with you, a Russian sovereign wealth fund, at a time when relations with Washington seem to be at a low ebb?
KD: Well, first of all, I think Japan really took a very wise approach, which is, of course there is an island issue discussions that's happening (inaudible), but they basically said let's have economic track separate from political discussions. Because, economic discussions enable for more cooperation between businesses and for some positive stories to be discussed, not just discussing difficult subjects. And, that approach has been working very well. We are working very close with the Japan fund. More than four investments have already been done by Russia-Japan fund, and we'll announce four more tomorrow as well.
And with France, we are working quite a bit with Europe. You know, it's a big trading partner, investment partner for us. One of the investments we done was with Arc International in France. We, and other partners, invested 250 million into this business and then invested some of that into Russia. So France understands that it's important to have go of close positive cooperation with Russia, on trade and investments.
GC: Do you worry that given how aggressive the US Treasury appears to be being now towards Western companies that deal with partners that Washington doesn't like, that there is the risk that these French companies, or Japanese businesses end up being targeted somehow by Washington, just by being associated with you?
KD: Well, first of all, existing restrictions do not preclude from coinvesting with us, do not preclude from meeting with us. And as a sovereign wealth fund, you know sanctioning us, strongly would create a precedent for other sovereign wealth funds to really pull their money out of the US economy. Because, if there is a precedent for sanctioning sovereign wealth fund. What prevents, six months from now, if US doesn't like the Chinese on an island somewhere to sanction their sovereign wealth fund.
So, we believe that frankly sanctions are just a ridiculous thing to begin with and business is against sanctions. But regardless of that, we'll continue to work with top investors all over the world. None of this is restricted activity. And we believe we are doing good for our countries, because we are building economic and investment bridges, that make our countries have good discussions and understand each other much better.
GC: So, in a sense do you think that these western companies, these French businesses have become less worried about being closed out of the US economy, that actually the long arm of the American treasury is getting a little shorter or a little less powerful?
KD: Well I think first of all, the doomsday scenarios of the Russian economy that people predicted turn out to be false. So many people saw (inaudible) sanctions and Russian economy would collapse. Well it didn't happen in many ways because Russia developed a number of useful partnerships, including for example, partnership with Saudi Arabia. We stabilized oil prices. Oil markets are very stable. And that gives lots of opportunity for us and for Saudi Arabia to develop our economies.
So I think different countries just understand that by working together you can address issues much better than if you try to isolate someone. And that doesn't work. So we believe that having a good dialogue, and by the way, including dialogue with the US. We're having lots of meetings with US business people. I believe passionately about restoring US-Russia relations. You know, lots of those kinds of things media tries to portray (about) us (as) very sinister. But we've delivers that frankly lots of people need to try to make US-Russia relations better. It's good for preventing a third world war, and it's good for developing the world economy in a more risk free and positive manner.
GC: You're the second senior Russian executive I've spoken to in the last few days whose brought World War 3 into the conversation. Is that something that is seriously troubling the Russian people?
KD: Well I think that what's troubling wise people all over the world is that, you know, by having very strong confrontation between Russia and the US there is an increased risk of confrontation. And that frankly, I believe, (is) not something anybody would really want. So I think, people just need to understand the trajectory of our relationship right now. It's pretty bad right now. If it continues to deteriorate, you know it's a pretty negative trajectory.
GC: I want to move on to talk about some of the other work that you've been doing. But I just want to close off the subject, a number of very high profile Russians were in the last round of sanctions last month. One of those was Mr Deirpaska. You invested, alongside Asian Pacific and Middle Eastern investors into the EN+ IPO. Do you feel comfortable about that investment now? Could I ask you what your intentions are with that?
KD: Well, first of all, I think there were some sanctions against some individuals, but then the US Treasury was very clear that it really doesn't want necessarily to hurt the working people of business, or investors who invested in this. And, as I understand they basically outlined that if there is no control by certain individuals in the business, then some of the restrictions would be lifted. So, we maintain our position, us investors maintain their position. I think, you know, it's important that there is some kind of respect for rule of law which the US talked about, and it's not fair to attack working people who are you know, working on the factory, for really no specific reason. So, we believe it's a case that hopefully will be solved in a positive manner in the next six to nine month. And I think for the whole world it will be interesting to see how the US finds the right balance, not to punish people who have nothing to do with you know sanction issues.
GC: But, just to be clear, you're not reviewing your position and you're not reviewing your relationship with Mr Deripaska?
KD: While we fulfil all of these, we never violate any sanctions, we never violate any restrictions. We completely comply with everything. So, we are in the full compliance of the imposed restrictions.
GC: You're in a position to help this economy accelerate beyond its current 1.5-2 percent rate of growth. The President put out a bold statement in May saying, I want to get to 4 percent, but it's going to need a lot of investment. How does this economy get to that position given its failure in the past to really implement the reforms that would have all owed it to grow more quickly? Does it have to raise more money through debt? Does it have to find ways of getting you to bring more money in the infrastructure side of this economy?
KD: Sure Geoff, and I think we represent a very good example, because we have created partnerships with more than 16 countries. We brought in more than 17 billion dollars into the Russian economy, and we did it in a profitable manner. And by doing so we really brought lots of the best world corporate practices into the Russian economy. And the future of Russia is about investments; investment in infrastructure. Our current debt is very low, 15 per cent of GCP, versus 100's of percent's of GDP for many other countries. So we're discussing how to increase Russian debt to purchase profitable investments and effective investments. And, in the past lots of people have criticised and said, well, if we invest more how can we do it efficiently? But RDIF produces internal rate of return of more than 15 percent a year. A positive rate of return in US dollars of more than 10 percent a year. And we believe that we can invest this money profitably in the Russian economy and that will help to modernize, and to really continue to bring in best world practices into the Russian economy.
GC: I have to say a lot of outside investors, when they heard the President speak, were encouraged, but thought 'Oh here we go again, it's more words and it won't actually turn into real action when it comes to institutional reform and diversifying the economy away from oil and other mined assets'. And they saw the government appointments and they though, well that's just confirmed our cynicism, because it's the same people who are remaining many of the key positions. Is that cynicism wrong?
KD: Well, we believe so. So we believe (the) President is very serious and focussed about transforming Russia, about increasing infrastructure and technology investment, and about paving this road for modern Russia, as it's a partner with other countries in the world. And there were quite significant changes in some of the people in the government. But, if you follow some of the President's speeches, and some of the government announcements they really now focus quite a bit about the areas of investment, about the areas of efficiency, about how to make our state corporations more efficient. And I think, this efficiency, also another important statement is reducing government involvement in the economy, is much more discussed now than it was before. And (inaudible) where it is right now, there is an opportunity to undertake some of those changes. Mr Kudrin is now head of one of our key audit places and I think he'll use it to drive some of the things from this very strategic position. So frankly, we are quite optimistic about the future of positive changes in the Russian economy.
GC: so, give me a quick insight into your travel schedule for the rest of this year then. Because you've been in the Middle East a lot. You've done a lot of deals with Middle Eastern countries. You've been in Western Europe as well. And obviously Japan. Through the rest of this year, where are the deal's going to be made for RDIF? Where do you see the greatest opportunity?
KD: Yes, so we'll continue being quite active with our Middle East and Asian partners. I think this year is a year of focusing on Europe quite a bit. And we'll be announcing a number of investments with German businesses, with French businesses, with Italian businesses, and I mentioned. So this is the focus. With the United Arab Emirates, we have done 40 investments together. Profitable with more than 12 percent (inaudible) in US dollars. So we will continue to make those profitable investments, and really utilizing our network of partners throughout the world, particularly in technology. Technology is a big sector, and we have seen partners in different countries all over the world to vet. Different Russia technologies decide which is world class, and how to help them grow in the world. So, it's a very focussed return driven approach, positive for Russia and positive to make Russia, and continue making Russia a good positive partner for the rest of the world.
GC: It sounds very much like business as usual regardless of what Washington is trying to do…
KD: Well, our GDP is growing 2 percent. Oil price is significant. I think Russia has been consistent in its policy and its approaches, and attempts to change the policy and approaches that have not worked. So basically, we just hope the world understands Russia a little bit better, understands that we want to be a positive partner for the rest of the world, and takes advantage of this positive side of Russia.
GC: And just very briefly, as you look at the economy, you are obviously involved in a lot of sectors. We have an investment audience on CNBC that looks at the relatively low valuation of the Russian market compared to many other international markets. And on the one hand the worry interest rates may be rising in the United States, which could be a difficult story for growing emerging economies. But on the other hand they're always looking for a value proposition. Where are the best places in this economy right now to park money if you're a foreign investor?
KD: Well, we believe that Russia is very undervalued our OP ratio was half of what it is in the world. And there are many top businesses, including Gazprom and Transneft, and many others, that provide very attractive dividend yield. So, we have dividend yields of 7 percent, plus in US dollars and some of the instruments. So I think, focussing on some of those investments with good dividend yields that have significant upside potential, makes sense. And particularly given that oil price is going to stay, we believe, at very reasonable levels. The Russian economy is definitely an opportunity. It's a volatile opportunity, but an opportunity.
GC: What level do you think the oil price will stay at for the rest of the year?
KD: Well, it's difficult to predict. But I think given what's been going on with Iran and different dynamics of the oil market, I think we expect to see oil price pretty much at this level, even higher, until the end of the year.
GC: And given the way the world is going are we going to see more deals done in other currencies than the US dollar…
KD: Yes, and we're seeing the major move of people using Renminbi, of people using basically their national currencies. And mainly sovereign wealth funds are thinking about doing more trading and investment in their currencies, and I think some of it comes from US using some of the sanctions very actively. And frankly, it's like they've given the world an instrument for settling transaction, but then said 'well, this can be pioneers, this can be pioneers, this can be risky'. And I think people who, very good people, who are good sovereign wealth funds, they still see some element of risk in the sanctions being applied sort of randomly. So, I think there is definitely an interest Renminbi and other currencies.
GC: And that's something you would encourage?
KD: Well, we don't encourage, just observe. And this is what we observe.
ENDS
For more information contact Jonathan Millman, EMEA Communications Executive: Jonathan.Millman@cnbc.com / +44 7788 307 996
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38bfd48248ad6d0d23b4a4b7662a9c78 | https://www.cnbc.com/2018/05/24/cnbc-transcript-cnbcs-tyler-mathisen-and-julia-boorstin-speak-with-los-angeles-mayor-eric-garcetti-at-cnbcs-disruptor-50-roadshow-event.html | CNBC TRANSCRIPT: CNBC’S TYLER MATHISEN AND JULIA BOORSTIN SPEAK WITH LOS ANGELES MAYOR ERIC GARCETTI AT CNBC’S DISRUPTOR 50 ROADSHOW EVENT | CNBC TRANSCRIPT: CNBC’S TYLER MATHISEN AND JULIA BOORSTIN SPEAK WITH LOS ANGELES MAYOR ERIC GARCETTI AT CNBC’S DISRUPTOR 50 ROADSHOW EVENT
WHEN: Wednesday, May 23rd
WHERE: CNBC's Disruptor 50 Roadshow event in Los Angeles
Following is the unofficial transcript of a CNBC interview with Los Angeles Mayor Eric Garcetti and CNBC's Tyler Mathisen and Julia Boorstin Wednesday, May 23rd, at CNBC's Disruptor 50 Roadshow event in Los Angeles.
All references must be sourced to CNBC's Disruptor 50 Roadshow.
JULIA BOORSTIN: Mayor Garcetti, thank you so much for being here.
ERIC GARCETTI: Great to be here.
JULIA BOORSTIN: As an Angelino, it's so exciting to see what you're doing in this city, and also to report on what you're doing from a tech perspective. And I was at your tech job fair a little over a year ago. I understand the one this year was much bigger. And I think it's really important just to understand why are you placing such an emphasis on technology. It really seems to be at the center of everything you're doing.
ERIC GARCETTI: Well, technology does three things for us in L.A. One, it moves the democracy closer to the people. It actually empowers folks to know what's going on in their city, their neighborhood, and gives them the tools to advocate or to help solve problems. Two, it's a great economic driver. There's no question. Los Angeles has known that for a long time. We have always had technology at the core of what we've done. The first email that was ever sent was sent from L.A. to the Bay Area. It was a place where we put, you know, rovers on Mars. We've had obviously technology from moving pictures to-- these days, you know-- the disruption that's being done in logistics and in bio-tech and green tech. But the third reason that we've invested in tech is really about quality of life for folks that are. I think there's-- this is a moment of anxiety and excitement. I call it anxitement. Where people feel like, "Oh, my gosh, it's incredible, these breakthroughs in health care. But I can't afford my premiums." Or, "My God, we're putting people on-- Mars one day soon. But I'm stuck in traffic." And trying to figure out a way that we can bridge and use technology not as just a wild thing unto itself, but really making the quality of life for the average person have a little bit more-- a little less anxiety and a little bit more excitement.
JULIA BOORSTIN: It seems like there are two categories of the tech companies that you're trying to work with here. One is the safe axis. And it seems like having a safe axis, you have a halo effect. And on the other hand, you also want to foster entrepreneurship and get the start-ups off the ground. How do you approach those two different categories?
ERIC GARCETTI: Well, you put them together. I love mixing people together. That tech fair that you're talking about, it's now the largest tech job fair in the western United States, this year 15,000 people. We hope to get a couple though job applicants, maybe a couple dozen companies. We had over 250 companies and over 15,000 people sign up. And it's a much more diverse tech environment. And I mean that in two ways. I think the demographics of the people that are doing tech here are more diverse than the industry in general. But the type of technology is also more diverse. So you can be an engineer and start in digital technology. But unlike other parts of the country, you're not going to have to be locked into that. You can go to video game technology, entertainment tech, bio-technology, green technology, food technology. It really-- you can have a career in which you have many different stops, which I think is attractive to millennials. And it can be that big legacy company with, you know, SpaceX is still relatively new. But a legacy company, or a brand new start-up, and you can ping pong back and forth. And I love that, you know, companies like-- SpaceX will change the entire paradigm. And then an engineer from SpaceX will be part of a new company, in this case, another one of Elon's company, the Boring Company. Never having done construction technology before, and changed the entire tunnel boring machine technology to possibly get things we need that will help us really traffic, like, a tunnel system to move us around and two, three, maybe ten times faster than it's ever been done.
JULIA BOORSTIN: So I've seen the videos of the Boring Company. It looks really cool. I recommend that everyone check it out, if they haven't already. But also there's this question of how you as a mayor try to encourage innovation without also-- you know, with the support of your constituents, without stifling creativity. And I'm worried if you tell, "It's my house," it's going to mess with the fault lines. And there's going to be some terrible damage.
ERIC GARCETTI: Even if it is a boring company.
JULIA BOORSTIN: Even if it is a boring company.
ERIC GARCETTI: This is a totally boring conversation.
JULIA BOORSTIN: Yeah.
ERIC GARCETTI: But beyond that. I think that we want Los Angeles to be a platform, like a place when people come and say, "I have an idea, a product, a new technology." I want to be that government that gets out of the way where we need to get out of the way and lend a hand when you need us to be there. And usually government's the opposite. Exactly when you don't want us to be there, we're in your way. And when you need us we're nowhere to be found. And so, you know, we're working through-- for instance, like, with the Boring Company, let's figure out a way for you to test this technology. Who knows whether it'll hit or not? But isn't it worth trying? And don't we as Americans want to see our technologies work and then be applied right in our back yard instead of China or Dubai or other places that seem to be more risk taking? How that-- that great technology and those great ideas that we develop come to scale in other places. And so I think L.A.'s developing that reputation with transportation technology for sure, logistics. I mean, we are a place that will work with you. And we're a city government that controls the biggest port in the country, second bigger airport, the largest municipal utility, this incredible metropolis of 12 million people, the third largest economy in the world of any city. Like, test it here.
TYLER MATHISEN: You know, it seems to me just from my own observation that the best mayors do two things very well. They solve problems, housing, homelessness. They work on in seemingly intractable problems. And they one way or another raise the quality of life of the residents of the city. And that those are the two ultimate goals here. How, if you accept that as a notion, how are you using technology to solve those very basic fundamental issues that come to the mayor's office?
ERIC GARCETTI: Well, you know, my slogan was Back to Basics. Because I think it's nice to work on all the fun things going after the Olympics, building out a new airport, the future, if you will. But that means nothing if you aren't taking care of the present, fixing the streets, providing basic city services. I'll give you one thing. We worked with SRE which is a very disruptive company in Redlands, kind of based company that is connecting players whether it's the public or different government entities together with spatially imagined information. And we looked at just the cleanliness of our streets. And we took in a very old analogue way of actually having sanitation department in our city drive every block of every street of every neighborhood and rank how clean it was based on visual evidence that people can actually access, the first city in the country to do this. And one is clean, two needs some work, and three is pretty darn dirty. And we made a commitment to get rid of all the threes in the first 18 months. So it's a very old problem. Because people want clean streets. But by having that and sharing that with the public, we became much more accountable. Because somebody could click on their block and say, "Why, Mayor Garcetti, is my block a three? When it's a one down over there." And it helped us move the resources to where we needed to be. So I think, you know, giving people the technological tools to my original point really democratizes government and empowers people not to be passive. With homelessness and housing, the same thing. One of the least disruptive sectors is construction. At a moment when we-- when we have everything else kind of being disrupted, construction still is slow, costs a lot. Sometimes that's our own fault. Environmental regulations-- that aren't about the environment, but about, you know, two and a half or three years of pre-preparation for building. But when we have a homeless crisis here, we're working with technologists right now to say, "How do we build things faster, quicker, and that have maybe even a better quality of life for the folks that will come off the streets?" Why can't we use shipping containers because we've got a surplus of them? Why can't we have pre-fabrication? Why can't we get sometimes built in a matter of weeks instead of a matter of years? And so we're testing those technologies. Because if we can make them work, that means the $1.2 billion that voters passed here to house all the homeless individuals here might get us two or three times as many houses.
TYLER MATHISEN: Is the homeless issue – I don't know much about it in Los Angeles – a question of supply of housing—
ERIC GARCETTI: Absolutely.
TYLER MATHISEN: Or lack of economic means for people to buy housing? Is it an affordability problem? Or is it both?
ERIC GARCETTI: Both. Because the flip side is one in the same. So we've raised the minimum wage here. We're going after more middle class jobs. But it's, like, the rents are going higher and higher even as incomes are coming up. We have folks who have struggled with trauma and addiction and mental health in past years. But at least they could afford an apartment that was 1,100, 1,200 bucks. That doesn't exist anymore. So we need to build a whole bunch of supply. We're building 15 new rail lines and rapid transit lines, also thanks to the voters, the biggest initiative in this country's history at one time. $120 billion program. And that's a perfect place to put this housing because it's close to transportation. And so we have the opportunity I think to bring those rents down, to bring supply up, and hopefully to raise income at the same time. But Los Angeles right now has one of the biggest gaps in the country between-what housing costs and what your average wages are. And so if you can crunch that down, then you can get people indoors and beginning to address the healing that they need, the human services to not be back on the street ever again.
JULIA BOORSTIN: It's such a massive problem. And it's one I know people who live here in Los Angeles think about every day. Another question is for this idea of the skills gap. Are there – the companies here who either want to move here or are already based here, can they hire the people they need? And then can the people here who need jobs find jobs?
ERIC GARCETTI: Absolutely. I mean, we have a record number of jobs. It was interest after the riots or the uprising in 1992, we didn't go to that peak of jobs for the next 20 something years. We never recovered in L.A. until about three years ago. Some of the work I think we're collectively doing, we finally have a new peak in jobs-- both for residents in L.A. and people who come to L.A. to work. So those are new peaks a lot of work here almost record unemployment. On the flip side for companies looking to come here, especially in the tech space, we absolutely have the most plentiful supply of engineers in the country. 11,000 master's levels engineers that graduate out of 130 something universities and colleges in this area. For me what keeps me up is not whether or not tech companies will have those workers, but closing the gap in other places. If we're going to build 40 years of rapid transit lines, we can get those workers from other states. But we should be growing them up here so they don't need a college degree to have a middle class job as a laborer, electrician, a construction worker. And looking for those key sectors because Los Angeles is such a diverse economy. Hollywood, for instance, is only a top ten industry in the last decade. You know, we have trade jobs. We have things at the port where 40% of the goods come into America. We wane make sure those high-paying jobs stay there for the future. Electric fine or trucks and our logistic suite to reduce pollution. Those are the gaps I think that I want to fill in terms of skills to be able to put people in the community college and find those levels. And one last thing, we are the biggest city in the country to make community college free. The state of California followed. But this was the first year we had that. And it's the first year public school grads full-time at the community college went up 40% in a single year. And that stuff works. I have a foster son who's becoming a chef at a school just down the street from here. He was never top of the class when he graduated from high school luckily, which many of his peers didn't. But he found his love and got number one on his finals – his first final because he found the thing that he connections with. So a skills gap, but it's also a love gap. You have to figure out what people love to do and match them more effectively with that quickly. Get them in some sort of education or training program that can propel them on their own in that career.
JULIA BOORSTIN: You mentioned the diversity of Los Angeles. And one of the reasons is that it's such a beacon for immigrants. And there's so much immigration here. And you have made a public stance to different Los Angeles's immigrants in opposition to the federal government.
ERIC GARCETTI: Yeah, I don't get why anybody wouldn't. It's our country's history. L.A. is a place where everyone belongs. And that is a competitive strength as well as the right moral thing to do. 61% of our businesses in L.A. on our main streets are started by immigrants. Why would I want to be anti-business? Family unity is pretty important to me. Why would I want to break them apart? And in terms of public safety, what we're seeing coming out of Washington is actually dangerous for our streets. Because when there's trust for everybody here, our police officers are safer, our communities are safer, and everybody's engaged in public safety. So I'm never going to stop listening to police over politicians. I'm never going to stop, you know, trying to invest in our main street businesses and keeping our families together. That seems pretty elementary.
TYLER MATHISEN: Is the federal government a friend or a foe?
ERIC GARCETTI: Depends who it is. You know, I never look at—
TYLER MATHISEN: But if you said who.
ERIC GARCETTI: Yeah, there's no primitive friends, no primitive enemies. We've actually worked even with the administration on some important things. But we're having to play stupid defense much more often than we should. It's the part, you know, mayors have to solve real problems. Washington politicians apparently don't. They can invent problems. They can try to rile up a base around them. Problems that literally don't exist out there. And I would say I think it's not unique to Los Angeles. This isn't a West Coast or a coastal thing. I think there are two Americas. But it's not the heartland versus the coast or red versus blue or all these things. It's Washington versus the rest of us, a Washington that's fundamentally out of touch with the struggles that we have and the aspirations that we have, that seeks to divide and subtract rather than to kind of add and multiply. And that-- that is a distraction. But I try to spend not too much of my day there. I see too many friends spend most of their day. And you should watch cable television. But who spend most of their day yelling at cable TV instead of getting to work and realizing the power that they have. One quick example is when the president withdrew from the Paris Climate Accords. We could have cried in the corner about it. I chair a group called Climate Mayors that leads on climate change in cities around the country. I just picked up the phone and today we have over 490 cities in 47 states representing 80 million Americans who have said, "If he's out, we're in." So we have a lot of power to exercise that we don't need Washington to give us permission to do.
JULIA BOORSTIN: So what are your aspirations? Are you going to run for president?
ERIC GARCETTI: I have no idea. I'm looking at it because I'm as frustrated I think any patriot should be looking at his or her role right now and trying to make this country decent again and strong again. And I see a lot of indecency and a lot of weak decisions, a lot of weak leadership. But I may be able to do that best as a mayor with a group of mayors. But I certainly think that we are a country a lot better than what we're showing right now.
TYLER MATHISEN: When might you decide?
ERIC GARCETTI: Sometime next year. Like there's plenty of time. I think we should all be focused on 2018 and first getting a Congress in place. There's no savior coming in 2020. If we still have a Congress that is looking at things that are fundamentally out of touch with I think where the American people are. When they're thinking of gun violence, the environment, to tax breaks that have gone more towards, you know, stop buy-backs than middle class assistance.
TYLER MATHISEN: Let's talk about the Democratic Party and its leadership. It is older. It is largely white. It is not as diverse as one might like it to be. Talk to me about that. It feels to me like the leadership of the Democratic Party, there is a vacuum there.
ERIC GARCETTI: I don't know if there's a vacuum in leadership. We've got some extremely capable strategists and people who have worked incredibly hard who I think might be able to win the House back. But long term, I think Democrats need to be a lot less obsessed with ourselves and more obsessed with American people. Everybody's always like what's the – Eric, what's the agenda for the Democratic Party?
TYLER MATHISEN: What is the message?
ERIC GARCETTI: Well, I think—
TYLER MATHISEN: What should it be?
ERIC GARCETTI: It has to be that we're not obsessed with rethinking a Democratic agenda. But we're focused on American people. We can't have slogans that are inward looking. They have to – people, you know, I never won an election by talking. I won an election by listening. And I think we've gotten away from that. We think that-- that we're the smarty-pants party too often, with, you know, a 14 point plank in a platform and we're going to win people over because we have the best ideas. I do think we have better ideas. I do think we are truly for the underdog. But first and foremost, you have to hear people, listen to them, and speak plain English. And we've gotten away from that. This presidential election was about the gut, not the head. It was, you know, people who said, "Okay, yeah, I know. I don't like those things about him. But at least he's going to do something." What I love about being a mayor and what I try to bring to the party is where we do still have power, we raised the minimum wage at the same time we lowered our city's business tax. We made community college free here. The largest infrastructure investment in America. We do support immigrants. We believe everybody belongs in this country. Those things that have a more universal appeal to everyone and I can go straight down the checklist of the rights that I'm for and the environmental work that I've done and compete with the most, you know, progressive folks. But most Americans don't wake up saying, "I'm a Democratic. What do I want to do today? Or I'm a Republican. What am I going to do today?" They say, "I'm Eric. And I'm struggling to pay this bill. I wonder if my kids will be able to go to college. Is anybody speaking to me?" And so that mythical coal miner in, you know, West Virginia, I got solutions for him or her. You know, here in L.A. we've created 30,000 green energy jobs in the last five – four and a half years, since I've been mayor. That's the equivalent of 60% of all the coal jobs left in America. And we're 1% of the population. So let's get to work and let's do those things instead of, you know, pretending we're going to bring back an American that has moved on and a world that has moved on. Let's claim the future for Americans instead being the past.
JULIA BOORSTIN: Well, I hope you will keep us posted as you evaluate your presidential—
ERIC GARCETTI: That's an exclusive announcement today. I think people should support us by investing in Los Angeles.
JULIA BOORSTIN: Great note to end on.
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204b577ff7d64ee0c941e859e0db4cb3 | https://www.cnbc.com/2018/05/24/cnbc-transcript-u-s-commerce-secretary-wilbur-ross-speaks-with-cnbcs-squawk-box-today.html | CNBC Transcript: U.S. Commerce Secretary Wilbur Ross Speaks with CNBC’s “Squawk Box” Today | CNBC Transcript: U.S. Commerce Secretary Wilbur Ross Speaks with CNBC’s “Squawk Box” Today
WHEN: Today, Thursday, May 24, 2018
WHERE: CNBC's "Squawk Box"
The following is the unofficial transcript of a CNBC interview with U.S. Commerce Secretary Wilbur Ross on CNBC's "Squawk Box" (M-F 6AM – 9AM) today, Thursday, May 24th. Following is a link to video of the interview on CNBC.com: https://www.cnbc.com/video/2018/05/24/wilbur-ross-connecting-the-dots-on-auto-imports-and-national-security.html?play=1.
References must be sourced to CNBC.
JOE KERNEN: JOINING US NOW COMMERCE SECRETARY WILBUR ROSS. SECRETARY ROSS, IT'S GOOD TO SEE YOU. ALREADY SOME OF OUR ALLIES ARE ALREADY CARPING ABOUT THE NATIONAL SECURITY ANGLE IN THIS, SAYING IT'S A CONVENIENT USE THAT'S BEEN DONE BEFORE BY THE TRUMP ADMINISTRATION IN SITUATIONS WHERE IT REALLY DOESN'T APPLY. DOES IT APPLY HERE?
SECRETARY WILBUR ROSS: WELL, IT'S THE EARLY STAGES OF THE INVESTIGATION, IT WAS JUST LAUNCHED YESTERDAY, SO OBVIOUSLY WE DON'T HAVE ANY CONCLUSIONS YET. BUT IT IS THE CASE THAT MANY OF THE SAME PUNDITS WHO CRITICIZED THE STEEL AND ALLUMINUM ARE NOW COMING FORTH AND CRITICIZING THIS ONE. SO I DON'T FIND THAT VERY SURPRISING. BUT THERE WILL BE PLENTY OF TIME FOR THE VIEWS TO BE EXPRESSED: WE'LL HAVE PUBLIC HEARINGS, PUBLIC COMMENTARY, JUST AS WE DID WITH STEEL AND ALLUMINUM. AND AS I THINK ARE YOU AWARE, STEEL AND ALLUMINUM HAVE WORKED OUT VERY, VERY WELL. THERE HAVE BEEN SOMETHING LIKE 20 FACILITIES, EITHER REOPENING OR EXPANDING IN STEEL AND ALLUMINUM SINCE WE PUT THOSE TARIFFS IN. SO THAT WAS A VERY GOOD ACTIVITY FOR US AND WE ARE LOOKING FORWARD TO RESEARCHING WHETHER CARS SHOULD BE HANDLED IN A SIMILAR FASHION.
KERNEN: HOW DOES IT APPLY TO NATIONAL SECURITY? I GUESS I CAN UNDERSTAND STEEL AND ALLUMINUM IN THE DEFENCE INDUSTRY. HOW DO YOU CONNECT THE DOTS FOR NATIONAL SECURITY WITH THE AUTO INDUSTRY AND AUTO PARTS INDUSTRY?
ROSS: WELL REMEMBER, UNDER SECTION 232 OF THE ACT TRADE EXPANSION ACT OF 1962, NATIONAL SECURITY IS BROADLY DEFINED TO INCLUDE THE ECONOMY, TO INCLUDE THE IMPACT ON EMPLOYMENT, TO INCLUDE A VERY BIG VARIETY OF THINGS THAT ONE WOULD NOT NORMALLY ASSOCIATE DIRECTLY WITH MILITARY SECURITY.
KERNEN: ALL RIGHT.
ROSS: BUT IT IS ALSO THE CASE, ECONOMIC SECURITY IS MILITARY SECURITY AND WITHOUT ECONOMIC SECURITY, YOU CAN'T HAVE MILITARY SECURITY.
KERNEN: SO YOU CAN'T JUST SAY, IT'S QUID PRO QUO? YOU CANT JUST SAY, "LOOK, YOUR TARIFFS ARE X AND, YOU KNOW, IT'S NOT FAIR, OUR TARIFFS, THEREFORE, ARE GOING TO START BEING COMMENSURATE WITH THE WAY YOU TREAT US." THAT'S NOT REALLY WHAT'S GOING ON HERE?
ROSS: NO, IT'S NOT. THIS IS SPECIFICALLY JUST LIKE THE STEEL AND ALLUMINUM ONES, LOOKING INTO THE NATIONAL IMPLICATIONS AND WHETHER OR NOT THE ABUSIVE TRADE TACTICS IN CARS DO HAVE THE SUFFICIENTLY ADVERSE THREATENING EFFECT ON NATIONAL SECURITY TO JUSTIFY DOING SOMETHING. WANT TO GIVE YOU A COUPLE DATA POINTS THAT ARE SORT OF CIRCUMSTANTIAL EVIDENCE THAT WE ARE LOOKING AT. MARKET SHARE OF IMPORTED CARS HAS GONE FROM 30% TO 48%. THERE ARE OVER 8 MILLION CARS IMPORTED EACH YEAR INTO THE COUNTRY. PART OF THE REASON FOR THE BIG IMPORTS COMING IN AS OPPOSED TO OUR EXPORTS GOING OUT IS WE ONLY HAVE A 2.5% TARIFF ON AUTOS AND AUTO PARTS. EUROPE 10%. CHINA HAD BEEN 25% NOW PARTLY BECAUSE IN OTHER DISCUSSIONS WE'RE HAVING WITH THEM, THEY'VE DROPPED THAT TO 15. MALAYSIA IS WAY UP IN THE DOUBLE DIGITS. INDIA IS WAY UP IN THE DOUBLE DIGITS. WHAT ALL THAT MEANS IS THAT THE DOMESTIC MANUFACTURERS IN THOSE COUNTRIES HAVE A VERY PROTECTED MARKETPLACE. THEY GENERALLY HAVE 70 TO 80% MARKET SHARES. WE BARELY HAVE A 50% SHARE BECAUSE OUR TARIFFS ARE SO LOW, IT'S VERY EASY FOR PEOPLE TO GET OF A 2.5% TARIFF. ALSO THERE'S A LOT OF SUBSIDIZED STEEL AND ALLUMINUM IN THE FOREIGN CARS AND THAT'S NOT VERY FAIR COMPETITION. SO IT'S THE WHOLE SEQUENCE OF THINGS THAT WE'RE LOOKING AT. BUT OBVIOUSLY, AT THE BEGINNING OF AN INVESTIGATION, YOU DON'T HAVE CONCLUSION, YOU JUST HAVE AREAS YOU'D BE LOOKING INTO.
BECKY QUICK: SECRETARY ROSS, THAT MAKES SENSE WHEN YOU LAY IT OUT THAT WAY – THE IDEA OF A MUCH HIGHER TARIFFS ON OUR CARS THAN ON THE CARS THAT WERE ALLOWED HERE. BUT TO JOE'S POINT, WHY CAN'T YOU COME OUT AND SAY, "IT'S NOT FAIR, IT DOESN'T WORK THAT WAY." IS IT ABOUT THE WTO AND WHAT THEY WILL AND WON'T ALLOW IN?
ROSS: YES, SO THE WTO HAS SOME OF THE MORE COMPLICATED RULES OF ANY ORGANIZATION. A PAIR OF THEM THAT CREATES SOME OF THIS DIFFICULTY ARE CALLED THE MOST FAVORED NATION CLAUSE. THAT MEANS WE CAN'T CHARGE A HIGHER TARIFF TO ONE COUNTRY THAN WE CHARGE TO ALL OTHER COUNTRIES WITH WHOM WE LACK A FREE TRADE AGREEMENT. SO THAT'S ONE BOUNDARY. THE OTHER BOUNDARY IS THE SO-CALLED BOUND RATE. THAT'S THE HIGHEST RIGHT I RATE PERMITTED TO CHARGE, REGARDLESS OF WHETHER OR NOT WE APPLY THE MOST FAVORED NATION. IN OUR CASE, ESPECIALLY THE CASE OF AUTOS, IT'S ALSO THIS 2.5% LEVEL. SO WE HAVE NO FLEXIBILITY UNDER WTO RULES TO RAISE RATES AT ALL, EVEN THOUGH ALL THESE OTHER COUNTRIES HAVE MUCH HIGHER RATES. SO THAT'S ONE OF THE INHERENT UNFAIRNESSES TO WHICH PRIOR ADMINISTRATIONS IN THE UNITED STATES AGREED. IN THE SENSE I DON'T BLAME THE FOREIGN COUNTRIES, THEY'RE DOING WHAT IS BEST FOR THEM. THE STUPIDITY IS THAT WE'VE LET OURSELVES GET INTO THIS BOX OF EXTREMELY LOW RATES. WE GAVE IT AWAY UNILATERALLY AND NOW IT'S VERY DIFFICULT TO GET BACK TO A RECIPROCAL ARRANGEMENT. IN AN IDEAL WORLD, IT WOULD BE RECIPROCAL. THAT WAY IT WOULD BE FAIR, WHOEVER HAD THE COMPETITIVE NATURAL ADVANTAGE WOULD WIN. BUT WHEN YOU HAVE THESE ARTIFICIAL BARRIERS THAT ARE VERY, VERY HIGH, AND NOT JUST TARIFFS. THERE ARE ALSO SIGNIFICANT NON-TARIFF TRADE BARRIERS, STANDARDS, LICENSING, ALL KINDS OF OTHER GAINS THAT THE FOREIGN COMPANIES BENEFIT FROM BECAUSE THEIR GOVERNMENTS SUPPORT THEM.
QUICK: RIGHT.
ROSS: SO IT'S A LOT OF STUFF TO TALK ABOUT.
QUICK: YOU KNOW, WILBUR, WE'VE KNOWN YOU A LONG TIME. AND I HAVE TO SAY MY HEAD SPINS A BIT TRYING TO THINK ABOUT WHAT THE ADMINISTRATION THINKS FROM ONE DAY TO THE NEXT. EARLIER THIS WEEK WE HAD treasury SECRETARY MNUCHIN ON TALKING ABOUT THE TRADE WAR WITH CHINA BEING ON HOLD AND THERE'S BEEN A LOT WRITTEN ABOUT THE DIFFERENT CAMPS IN THE WHITE HOUSE THAT ARE EITHER IN FAVOR OF DIFFERENT WAYS OF HANDLING THESE TRADE ISSUES, BUT HERE WE ARE A COUPLE DAYS LATER TALKING TO YOU ABOUT ADDITIONAL THREATS THAT ARE GONNA BE THROWN DOWN ON THESE ISSUES. WHERE DO WE STAND WITH THIS? IS THERE ONE POLICY THAT'S COMING OUT OF THE WHITE HOUSE OR IS THIS SOMETHING THAT'S BEING COORDINATED, OR IS THIS SOMETHING THAT CHANGES BASED ON WHICH SIDE HAS THE UPPER HAND ON ANY GIVEN DAY?
ROSS: WELL, THERE'S ONLY ONE SIDE THAT HAS THE UPPER HAND, AND THAT'S CALLED PRESIDENT DONALD J. TRUMP. HE'S THE ONLY ONE ELECTED. THE REST OF US ARE APPOINTED PEOPLE. IT'S OUR TASK TO GIVE HIM OUR BEST OPINIONS. HE LIKES THE IDEA OF CONFLICTING OPINIONS, BECAUSE THAT WAY HE GETS TO HEAR EVERY SIDE OF EACH BIG TRADE ISSUE. AND BECAUSE TRADE IS SO IMPORTANT AND IT IS ALSO SO COMPLEX, IT'S REALLY VERY, VERY CONSTRUCTIVE THAT HE DOES GET TO HEAR ALL SIDES OF THE EQUATION.
ANDREW ROSS SORKIN: MR. SECRETARY, CAN WE TURN TO ZTE AND WHERE YOU PERSONALLY STAND ON THIS ISSUE. OBVIOUSLY, YOUR DEPARTMENT CAME DOWN WITH VERY HARSH PENALTIES. THE PRESIDENT TURNED AROUND AND SAID, "PLEASE RELOOK AT THEM." IT HAS SEEMED LIKE IT'S TURNED INTO A CHESS PIECE IN A NEGOTIATION WITH THE CHINESE AND YET WE HAVE BEEN TOLD THAT THE WHITE HOUSE DOESN'T WANT – OR DOESN'T WANT IT TO APPEAR TO LOOK LIKE A CHESS PIECE. WHAT IS IT?
ROSS: WELL, IT'S A TRADE ENFORCEMENT ACTION. THAT'S WHAT IT STARTED OUT AS BEING. YOU KNOW, BACK SOME TIME AGO, IT BECAME PRETTY CLEAR THAT ZTE, WHICH IS THE SECOND LARGEST CHINESE TELECOM EQUIPMENT COMPANY AND THE FOURTH LARGEST ONE IN THE WORLD, IT BECAME CLEAR THAT THEY WERE VIOLATING THE SANCTIONS. BOTH THE SANCTIONS ON IRAN AND THE SANCTIONS ON NORTH KOREA. SO WE'VE BROUGHT AN ACTION, GOT THE DEPARTMENT OF JUSTICE INVOLVED AND IN MARCH OF LAST YEAR, WE REACHED A SETTLEMENT, WHICH GOT COURT APPROVAL. AND THAT SETTLEMENT SAID, THEY WOULD PAY FINES TOTALING A BILLION $100 MILLION OF WHICH $300 MILLION WAS DELAYED SO THAT THAT WOULD BE DRAWN DOWN ONLY IF THEY MADE A FURTHER VIOLATION. WHAT HAPPENED SUBSEQUENTLY, IS THE COURT IN TEXAS, WHICH IS THE JURISDICTION WHERE THIS OCCURRED, APPOINTED AN EXAMINER. THE EXAMINER MADE HIS REPORT AND WE FIGURED OUT THAT ZTE MANAGEMENT HAS BEEN LYING TO US. SO IN ADDITION TO MANY, MANY INSTANCES OF VIOLATING SANCTIONS, THEY'VE LIED DURING THE INVESTIGATION, THEY'VE LIED DURING THE SETTLEMENT NEGOTIATION AND THEY LIED AGAIN AFTER THE JUDGMENT HAS BEEN ENTERED. THAT'S INEXCUSABLE BEHAVIOR. ITS NOT TOLERABLE BEHAVIOR. SO WE DECIDED TO SANCTION THEM. AND IN THE COURT APPROVED SETTLEMENT, THERE WERE TWO THINGS THAT WE COULD DO. ONE WAS TO SIMPLY TAKE THE EXTRA $300 MILLION. THE OTHER WAS TO PUT THEM IN A DENIAL ORDER, MEANING THAT THEY CAN NOT GET U.S. TECHNOLOGY THAT'S ON THE LIST. I CHOSE TO DO THE STRONGER OF THE TWO REMEDIES AND, FRANKLY, THE STAFF HAD RECOMMENDED DOING THE MILDER ONE – THE 300 MILLION, BUT I REALLY WANTED TO MAKE SURE WE WOULD CHANGE THE BEHAVIOR OF THIS COMPANY BECAUSE THEY HAD BEEN BAD ACTORS. SO THAT'S HOW WE GOT TO THE FIRST DECISION. NOW SINCE THE PRESIDENT REQUESTED WE TAKE A LOOK AT IT, WE ARE REEXAMINING, IS THERE ANOTHER WAY OF ACHIEVING THE SAME END RESULT? IS THERE ANOTHER WAY TO MAKE SURE THAT WE CAN CHANGE THE BEHAVIOR THAT WE'RE NOT GOING TO HAVE SANCTION VIOLATIONS, WE'RE NOT GOING TO HAVE PEOPLE LYING TO US. SO WE'RE DEVELOPING A MATRIX OF THINGS AND WHILE WE HAVEN'T COME QUITE TO A FINAL DECISION YET, WE THINK THERE MAY VERY WELL BE AN ALTERNATIVE THAT WILL BE QUITE PUNITIVE TO THEM, BUT REALLY MODIFIED BEHAVIOR AND THAT'S WHAT WE'RE AFTER.
KERNEN: HEY WILBUR, DO YOU THINK THAT THE CHINA TRADE TALKS SEEPED INTO THE NORTH KOREA MEETING JUNE 12th? DO YOU THINK THAT PRESIDENT XI, I DON'T KNOW, IS PLAYING SOME TYPE OF HAND THERE WHERE THINGS DID CHANGE AT THE LAST MEETING WITH KIM JONG-UN BASED ON ONLY THE FRICTION BETWEEN UNITED STATES AND CHINA IN THE TRADE TALKS? THAT DOESN'T -- IT SEEMS LIKE A BAD WAY TO CONDUCT NUCLEAR FOREIGN POLICY ABOUT NUCLEAR ISSUES.
ROSS: WELL, I GAVE UP TRYING TO PRETEND I WAS A PSYCHIATRIST YEARS AND YEARS AGO, SO I COULDN'T BEGIN LOOK INTO THE HEAD OF THE NORTH KOREAN LEADER OR PRESIDENT XI. WHAT I DO KNOW IS WE ARE GOING BACK OVER TO BEIJING NEXT WEEK AFTER THE OECD IN PARIS. WE'LL HAVE SOME TECHNICAL PEOPLE THERE AT FIRST. I'LL BE GOING THERE A LITTLE BIT LATER IN THE WEEK AND WE'LL SEE WHERE THOSE TALKS REALLY DO STAND. WE ARE HOPEFUL THAT SOMETHING CONSTRUCTIVE CAN BE DONE, BUT IF IT DOESN'T MEET THE PRESIDENT'S REQUIREMENTS, THEY WILL NOT GO FORWARD. AND THEY WON'T GO FORWARD IF WE DON'T HAVE REALLY GOOD PROTECTION OF INTELLECTUAL PROPERTY, REALLY GOOD PROTECTION AGAINST FORCED TECHNOLOGY TRANSFERS. ALL OF THE IMPORTANT LONGER-TERM ISSUES.
SORKIN: AND MR. SECRETARY, ONE FINAL QUESTION TO FOLLOW UP ON THE ZTE QUESTION. IF IN FACT, YOU WERE TO THROW OUT MANAGEMENT AND RECONSTITUTE THE BOARD OF THAT COMPANY, GIVEN THE FACT THAT IT IS A STATE-CONTROLLED COMPANY AND THE STEPS THAT THEY HAD TAKEN BEFORE BREAKING THE SANCTIONS OSTENSIBLY WERE APPROVED BY GOVERNMENT OFFICIALS OR AT LEAST THE GOVERNMENT OFFICIALS LOOKED THE OTHER WAY AND THE NATIONAL SECURITY CONCERNS THAT STILL EXIST AROUND THIS COMPANY, HOW CAN YOU GET COMFORTABLE WITH THAT TYPE OF SOLUTION?
ROSS: WELL, IF WE DO DECIDE TO GO FORWARD WITH AN ALTERNATIVE, WHAT IT LITERALLY WOULD INVOLVE WOULD BE INPLANTING PEOPLE OF OUR CHOOSING INTO THE COMPANY TO CONSTITUTE A COMPLIANCE UNIT AND THAT UNIT WOULD REPORT BACK TO THE DEPARTMENT OF COMMERCE AND WOULD REPORTS TO THE BOARD SHARE AFTER MANAGEMENT CHANGE.
SORKIN: SO WE'D BE INSTALLING COMPLIANCE OFFICERS, OUR OWN PEOPLE, INSIDE THAT COMPANY?
ROSS: IT'S ONE OF THE THINGS THAT WE'RE CONSIDERING BECAUSE THE WHOLE KEY IS ENFORCEMENT AND WE FOUND LAST TIME THAT THEY DIDN'T LIVE UP TO THEIR AGREEMENT SO –
SORKIN: -- SO DO YOU HAVE A SENSE THAT THE CHINESE WOULD BE AMENABLE HAVING AMERICANS LITERALLY LIVING INSIDE THE COMPANY IN A COMPLIANCE WAY, THE WAY WE MIGHT FOR A U.S. BASED COMPANY?
ROSS: WELL, IF WE CONCLUDE THAT'S THE PROPER ALTERNATIVE, WE WILL FIND OUT. REMEMBER, RIGHT NOW THE SANCTIONS THAT WE PUT IN ARE IN EFFECT. SO THEY DON'T EXACTLY HAVE A VERY STRONG NEGOTIATING POSITION BECAUSE THIS IS A VERY, VERY PAINFUL THING FOR THEM. THEY'RE NOT GETTING THE QUALCOMM MATERIAL THEY NEED. THEY'RE NOT GETTING THE OTHER MATERIAL THAT'S VERY HIGHLY TECHNICAL, AND WITHOUT WHICH THEY CANNOT OPERATE A LARGE PART OF THEIR BUSINESS. SO THEY'RE NOT EXACTLY IN A STRONG NEGOTIATING POSITION. AND SINCE IT IS AN ENFORCEMENT MATTER, IF WE'RE NOT QUITE SATISFIED THAT WE HAVE A VERY GOOD ALTERNATIVE, WE'RE SIMPLY NOT GOING TO DO IT AND WE WILL LEAVE IN PLACE THE SANCTIONS.
KERNIN: ALRIGHT, SECRETARY ROSS. THANK YOU. APPRECIATE IT.
ROSS: THANK YOU.
KERNEN: SECRETARY WILBUR ROSS, GREAT TO SEE YOU FROM WASHINGTON.
For more information contact:
Jennifer Dauble CNBC t: 201.735.4721 m: 201.615.2787 e: jennifer.dauble@nbcuni.com
Emma Martin CNBC t: 201.735.4713 m: 551.275.6221 e: emma.martin@nbcuni.com
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15695a0cc67c3929a71224e8d2ca1a1a | https://www.cnbc.com/2018/05/24/facebook-must-comply-with-european-privacy-laws-in-real-life-eus-digital-policy-chief-say.html | Facebook must comply with European privacy laws in 'real life,' EU's digital policy chief say | Facebook must comply with European privacy laws in 'real life,' EU's digital policy chief say
VIDEO2:3202:32Facebook is taking data privacy very seriously, says European commissionerSquawk Box Europe
The European Union's digital policy chief has urged Facebook to stick to its promise and abide by the region's more stringent data protection rules.
In an effort to give consumers greater control over how their personal details are used, Europe is set to impose sweeping changes to data laws on Friday. The introduction of General Data Protection Regulation (GDPR) comes at a time when Facebook is receiving widespread criticism for its role in the Cambridge Analytica scandal and for allowing fake news to flourish on its platform.
"I get the feeling that Facebook is taking all those issues connected with the privacy of our people very seriously," Andrus Ansip, the European Commission's vice president for digital issues, told CNBC's Joumanna Bercetche Thursday.
Earlier in the week, Facebook CEO Mark Zuckerberg appeared before European lawmakers to apologize for the social media giant's role in a massive data leak. However, his testimony did not satisfy all members of the European Parliament, with some feeling Zuckerberg had dodged a number of their questions.
VIDEO2:1402:14EU's Ansip: Legal certainty needed for tech companiesStreet Signs Europe
Ahead of Tuesday's grilling, Zuckerberg had claimed Facebook would be "fully compliant" by the time Europe's changes to privacy laws were introduced. When asked whether he believed Facebook was ready for the introduction of GDPR, Ansip replied: "The short answer is yes, but let's see what we get from real life."
"Facebook is taking this scandal with Cambridge Analytica very seriously. They are dealing with fake accounts and they are trying to figure out who is behind some kind of information campaigns… (But) we have to work together."
Facebook recently transferred around 1.5 billion of its international users from the jurisdiction of its European headquarters, in Ireland, to its U.S. headquarters instead. That move triggered some external observers to criticize the social media company for allegedly trying to evade the prospect of costly repercussions from any breaches of GDPR.
The changes to data laws are expected to have a far-reaching impact on some of the biggest technology firms in the world.
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8abdd4279df15a60ef518f541694fd92 | https://www.cnbc.com/2018/05/24/fed-could-be-finished-hiking-rates-by-2019-philadelphias-harker-says.html | Fed could be finished hiking rates by 2019, Philadelphia's Harker says | Fed could be finished hiking rates by 2019, Philadelphia's Harker says
Interest rate hikes could come to an end for this cycle in 2019, Philadelphia Fed President Patrick Harker said Thursday.
One of the more hawkish central bankers when it comes to monetary policy, Harker said he envisions a scenario where the Federal Reserve increases its benchmark overnight rate three times total in 2018 and three more times next year, then stops as the economy hits equilibrium.
"I think we're getting close to neutral," he told CNBC's Steve Liesman in a live interview from Dallas. "If we see inflation start to accelerate, then I would be open to a fourth increase this year. But I'd have to see evidence of that first."
The policymaking Federal Open Market Committee, of which Harker is a nonvoting member this year, approved a quarter-point rate hike in March and is widely expected to add another in June and one more in September. Whether the committee approves a fourth rate rise in December remains an open question, with traders currently assigning it a 39 percent chance.
Policy doves, who favor lower rates, seemed to get a boost Wednesday, when minutes from the most recent FOMC meeting indicated that officials would be willing to let inflation run above the Fed's 2 percent target for a temporary period.
Harker said he, too, would consider that, though it would depend on conditions.
"I don't think of it so much as a number around 2 percent, although that's part of it," he said during the "Power Lunch" interview. "It's the acceleration or deceleration. If we're creeping up to 2 percent and we creep up to, say, 2.25 percent, that's a different story than [if] we're accelerating past 2 percent. I think we'd behave differently. At least I would as a policymaker."
Fed officials were in Dallas for a conference on technology and disruption.
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37a857123fbee402ad600fc0174e8ce6 | https://www.cnbc.com/2018/05/24/first-on-cnbc-dallas-federal-reserve-president-robert-kaplan-speaks-with-cnbcs-steve-liesman-today.html | First On CNBC: Dallas Federal Reserve President Robert Kaplan Speaks with CNBC’s Steve Liesman Today | First On CNBC: Dallas Federal Reserve President Robert Kaplan Speaks with CNBC’s Steve Liesman Today
WHEN: Today, Thursday, May 24, 2018
WHERE: CNBC's "Squawk Box"
The following is the unofficial transcript of a FIRST ON CNBC interview with Dallas Federal Reserve President Robert Kaplan and CNBC's Steve Liesman on CNBC's "Squawk Box" (M-F 6AM – 9AM) today, Thursday, May 24. Following is a link to video of the interview on CNBC.com: https://www.cnbc.com/video/2018/05/24/feds-kaplan-dont-want-to-run-persistently-above-2-percent-target.html?play=1.
References must be sourced to CNBC.
BECKY QUICK: ALRIGHT NOW LET'S GET TO STEVE LEISMAN IN DALLAS. HE JOINS US WITH A SPECIAL GUEST. STEVE.
STEVE LIESMAN: BECKY, THANKS VERY MUCH. I'M HERE AT THE DALLAS FEDERAL RESERVE BANK WITH THE DALLAS FEDERAL RESERVE PRESIDENT ROBERT KAPLAN AT AN OPPORTUNE TIME. THANKS FOR JOINING US PRESIDENT KAPLAN.
ROBERT KAPLAN: WELCOME TO TEXAS.
LIESMAN: OK, SO YESTERDAY AS JOE WAS JUST TALKING ABOUT, THE MARKET MOVED ON THE MINUTES. AND I THINK THERE WERE TWO THINGS THAT WERE IN THERE. ONE WAS THIS DISCUSSION OF SYMMETRY AND THE OTHER WAS THIS DISCUSSION OF THE LONG RUN. SO IF WE CAN TAKE THIS ONE BY ONE, WHAT IS YOUR SENSE OF HOW SYMMETRICAL THE FEDERAL RESERVE WILL BE? HOW FAR ARE COMFORTABLE LETTING INFLATION RUN ABOVE A 2% TARGET?
KAPLAN: SO MY OWN VIEW IS THAT WE DON'T WANT TO RUN PERSISTENTLY ABOVE 2% OR PERSISTENTLY BELOW. AND WHAT THAT MEANS IS THAT IF YOU GET SOME SHORT TERM FEW HAD EXCESS ABOVE 2%, I'D BE WILLING TO TOLERATE THAT/ IF I THOUGHT WE WERE GOING TO PERSISTENTLY RUN ABOVE 2% THAT WOULD AFFECT MY POLICY VIEWS. AND SO THAT'S MY VIEW ON THE 2%.
LIESMAN: SO I DID SOME CALCULATIONS. TO BE TRULY SYMMETRICAL, YOU GUYS HAVE TO BE AT 2.7% FOR LIKE SIX YEARS. DO YOU HAVE THAT KIND OF TOLERANCE?
KAPLAN: SO IT'S NOT HISTORICAL SYMMETRY. IN OTHER WORDS YOU DON'T NEED TO HAVE A CATCH UP. WE'VE HAD SEVEN OR EIGHT YEARS OF AN UNDER RUN, WE DON'T NEED TO HAVE A CATCH UP. WHEN I SAY WE DON'T WANT TO RUN SYMMETRICALLY ABOVE OR BELOW, WE CAN RUN A LITTLE BIT ABOVE OR A LITTLE BIT BELOW, AND THAT'S FINE. BUT WE'RE NOT TRYING TO CATCH UP FOR HISTORICAL UNDER RUNS.
LIESMAN: SO IS TWO-AND-A-HALF A TOP FOR YOU? IS IT TWO-AND-A-QUARTER? WHERE WOULD YOU SAY THAT TOLERANCE LEVEL IS?
KAPLAN: I STILL SAY I WANT TO RUN AROUND 2 AND IF WE GOT A LITTLE ABOVE IT AND I THOUGHT IT WOULD BE SHORT TERM, NOT LONG TERM, I COULD TOLERATE THAT. IF I THOUGHT IT WOULD PERSIST IT COULD AFFECT MY POLICY VIEWS.
LIESMAN: THE MINUTES YESTERDAY SAID THERE ARE A FEW PEOPLE WHO THINK THE FED WILL BE AT THE NEUTRAL RATE BEFORE TOO LONG.
KAPLAN: YEAH.
LIESMAN: ARE YOU ONE OF THOSE PEOPLE THAT THINK THAT?
KAPLAN: WELL, AS YOU KNOW, I'VE SAID CONSISTENTLY, I THINK THE NEUTRAL RATE IS SOMEWHERE IN THE NEIGHBORHOOD OF TWO-AND-A-HALF, TWO AND THREE-QUARTERS, IF I HAD TO NARROW IT DOWN THE RANGE. WE'RE AT 150 TO 175. SO IT MEANS BASICALLY AFTER THREE OR FOUR MORE MOVES WE'RE GONNA BE AT NEUTRAL. MY OWN VIEW IS WE SHOULD BE RAISING RATES UNTIL WE GET TO NEUTRAL. WE SHOULD DO IT GRADUALLY. I'M NOT PREPARED TO SAY YET I WANT TO GO ABOVE NEUTRAL. I THINK ONCE WE GET THERE, WE WILL HAVE TO MAKE THAT JUDGMENT AT THAT TIME WHETHER IT MAKES SENSE TO BE RESTRICTIVE OR WHAT I THINK WOULD BE RESTRICTIVE. I'M NOT THERE YESTERDAY.
LIESMAN: ONE OF THE INTERESTING THINGS ALWAYS ABOUT COMING TO DALLAS AND TEXAS IS OIL PRICES.
KAPLAN: YEAH.
LIESMAN: THEY'VE BEEN DOING QUITE WELL. WHAT DOES THAT MEAN FOR THE TEXAS ECONOMY, AND WHAT DO YOU THINK THAT MEANS FOR THE U.S. ECONOMY?
KAPLAN: SO, WE'VE BEEN IN A GLOBAL OVERSUPPLY SITUATION WE THINK THROUGH PART OF 17 -- 14 TO 17 -- 2014 TO 17. WE THINK WE'RE BASICALLY IN GLOBAL SUPPLY-DEMAND EQUILIBRIUM NOW WHICH MEANS THAT WE'RE GROWING GLOBAL DEMAND, BUT SHALE PARTICULARLY SHOULD BE SUFFICIENT TO SUPPLY INCREASES IN GLOBAL DEMAND.
LIESMAN: SIR, CAN I JUST ASK YOU, DOES THAT MEAN YOU THINK 70 CENTS A BARREL IS AN EQUILIBRIUM PRICE?
KAPLAN: I THINK WE'RE GONNA HAVE A LOT OF VOLATILITY, AND HERE'S WHY. SO IF YOU'RE -- IF SHALE IS ENOUGH TO SUPPLY GLOBAL DEMAND GROWTH, THE PROBLEM WITH SHALE IS IT'S GOT A VERY RAPID DECLINE CURVE AND WE HAVE NOT BEEN INVESTING IN LONG LIFE PROJECTS. SO WE THINK IT OVER THE NEXT THREE TO FIVE YEARS WILL BE VERY SUSCEPTIBLE TO GEOPOLITICAL SHOCKS AND SOME THREATS, LIKE WE HAVE NOW. THE ISSUE FOR US IS NOT THE NEXT THREE-TO-FIVE YEARS. IT'S BEYOND THREE OR SO YEARS. WE THINK WE MAY WELL GET INTO GLOBAL UNDER SUPPLY SITUATION. WHY? BECAUSE AS PROLIFIC AS SHALE IS, IT MAY NOT BE ENOUGH TO SUPPLY INCREASES IN DEMAND AND WE HAVEN'T HAD LONG LIFE PROJECTS. BUT THE NEXT THREE TO FIVE YEARS, WE'RE IN A FRAGILE EQUILIBRIUM AND WE'RE GONNA HAVE SORT OF VOLATILITY AROUND A RANGE.
LIESMAN: I'VE GOT TWO MORE TOPICS I HAVE TO GET TO. THE FIRST IS: OF THE RECENT DEVELOPMENTS, AND I THINK IT'S ALMOST SINCE THE MINUTES AS WELL, IS WHAT HAS BEEN HAPPENING IN EMERGING MARKETS. IS THAT A RISKY THING FOR THE FEDERAL RESERVE AND THE U.S. ECONOMY, WHAT'S BEEN HAPPENING IN TURKEY AND ARGENTINA AND SOME OF THESE OTHER PLACES?
KAPLAN: YEAH AND I WATCH THIS CAREFULLY AND SOME PEOPLE MIGHT SAY, "WHY ARE YOU WATCHING OUTSIDE THE U.S. SO CAREFULLY? YOU'RE A CENTRAL BANKER TO THE UNITED STATES." AND THE REASON I DO IS AND JUST FOR PEOPLE LISTENING TO THIS, WHAT'S HAPPENING IS THE DOLLAR STRENGTHENS, AND AS THE FED RAISES RATES, THERE ARE A NUMBER OF COUNTRIES THAT HAD RAPID INFLOWS WHEN WE KEPT RATES VERY LOW AND WITH THE DOLLAR RISING, THEY ARE VERY SENSITIVE TO INCREASES IN THE DOLLAR. TURKEY, ARGENTINA, FOR EXAMPLE, BUT IT'S A CONTINUUM. THE REASON I WATCH IT IS IF THAT GOES -- GETS PRONOUNCED ENOUGH, IT COULD LEAD TO A RAPID TIGHTENING IN CONDITIONS IN THE UNITED STATES, WHICH IN TURN COULD SLOW THE ECONOMY.
LIESMAN: ARE YOU CONCERNED NOW ABOUT THAT?
KAPLAN: NO, WE'RE NOT THERE YET. WE'RE NOT THERE AT ALL. BUT IT'S A DEVELOPING SITUATION THAT'S ONE THAT I THINK WE'RE GOING TO NEED TO BE WATCHING. AND ONE INDICATION OF THIS IS FIRST QUARTER OF 2016, WE SAW THIS HAPPEN WITH CHINA AND IT CAUSED A RAPID TIGHTENING HERE AND WE HAD TO BE AWARE OF IT.
LIESMAN: WE'RE HERE AT A CONFERENCE ON TECHNOLOGY AND A DISRUPTION IN THE ECONOMY.
KAPLAN: RIGHT.
LIESMAN: WHY IS THE FED PUTTING ON A CONFERENCE LIKE THIS? WHY DOES THAT MATTER TO THE ECONOMY? WHY DOES IT MATTER TO MONETARY POLICY?
KAPLAN: SO THE REASON AT THE DALLAS FED, WE'VE SPENT A LOT OF TIME ON THIS AND WE'RE HOSTING THIS CONFERENCE FOR INSTANCE ALONG WITH THE ATLANTA FED IS WE THINK -- TECHNOLOGY REPLACING PEOPLE IS NOT A NEW STORY -- IT'S BEEN GOING ON FOR DECADES. BECAUSE OF DISTRIBUTED COMPUTING IN THE CLOUD, WE THINK THAT IT'S ACCELERATING. CONSUMERS HAVE MUCH MORE TECHNOLOGY AT THEIR DISPOSAL THAN COMPANIES DID 30 YEARS AGO. AND SO THE IMPACT OF THAT IS THE FOLLOWING: COMPANIES HAVE FAR LESS PRICING POWER THAN THEY HAVE HISTORICALLY SO WE THINK IT WILL HAVE A MUTING EFFECT ON INFLATION. WE THINK THAT NEEDS TO BE TAKEN INTO ACCOUNT AND WE THINK IT'S HAVING AN EFFECT ON PRODUCTIVITY. AND WHAT I MEAN IS – IS BECAUSE OF THE RAPID DISRUPTION IN INDUSTRIES AND JOBS, IF YOU'VE GOT A COLLEGE OR BETTER LEVEL OF EDUCATION, YOU CAN PROBABLY ADAPT IT TO. IF YOU ARE ONE OF 46 MILLION WORKERS IN THIS COUNTRY THAT HAVE A HIGH SCHOOL EDUCATION OR LESS, YOU'RE SEEING YOUR JOB DISRUPTED OR ELIMINATED AND YOU -- IF YOU DON'T GET RETRAINED, WHICH IS EASIER TO SAY THAN DO, YOU MAY SEE YOUR PRODUCTIVITY LEVEL DECLINE OVER THE COURSE OF YOUR CAREER. SO WE THINK IT'S AFFECTING -- ONE OF THE REASONS WE BELIEVE THAT PRODUCTIVITY IS SLUGGISH IN THE U.S. ECONOMY AND WE THINK MORE WORK NEEDS TO BE DONE IN UNDERSTANDING THAT.
LIESMAN: ROBERT KAPLAN, THANKS FOR JOINING US.
KAPLAN: THANK YOU, STEVE.
LIESMAN: JOE, BACK TO YOU FROM DALLAS, TEXAS.
For more information contact:
Jennifer Dauble CNBC t: 201.735.4721 m: 201.615.2787 e: jennifer.dauble@nbcuni.com
Emma Martin CNBC t: 201.735.4713 m: 551.275.6221 e: emma.martin@nbcuni.com
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57fb3aea4510cfc9f46db2c8c58f0908 | https://www.cnbc.com/2018/05/24/former-nba-ref-from-betting-scandal-warns-on-legal-sports-gambling.html | Former NBA ref at the heart of notorious betting scandal issues warning about legal sports gambling | Former NBA ref at the heart of notorious betting scandal issues warning about legal sports gambling
Tim Donaghy, who was the referee at the heart of the NBA's most notorious sports betting scandal in the late 2000s, spoke with CNBC about legalization of sports betting and the problem he foresees, both in the NBA and in the NCAA, as it becomes more mainstream after the landmark U.S. Supreme Court decision to allow gambling on games across the country. Donaghy, who served 15 months on counts of conspiracy to engage in wire fraud and transmitting betting information through interstate commerce, also discusses what he would do differently if he could go back in time.
He currently co-runs Ref Picks, a handicapping service, with his business partner, longtime sports bettor and media personality Danny Biancullo. The following Q&A is based on a CNBC phone interview with Donaghy and has been edited for length and clarity.
Former NBA guard Mike Bibby of the Sacramento Kings argues with former NBA referee Tim Donaghy during a 2004 playoff game against the Dallas Mavericks.Ronald Martinez | Getty Images
When you first heard the U.S. Supreme Court ruling, what were your thoughts?
First thoughts were that it was long overdue and sports leagues are now going to take advantage of the fact that gambling is legal and do everything they can do to capitalize on the revenue and grab a piece of the pie.
The fight for nationwide legalized sports betting has been going on for years. The NBA was one of the first leagues to support betting. Is that because they saw it coming?
No doubt, they knew it was going to happen. If it happens and they're supporting it, now when they go to take advantage of the revenue, they look like they supported it from the beginning. They knew it was going to happen, regardless of their support.
Are the legal bookmakers going to have trouble getting the bettors to move over from the illegal markets? Can the legal markets succeed?
I think people are still going to go to the local bookies for a lot of reasons. They are going to want to avoid paying taxes when they win and stay away from paying any fees to the leagues.
People think that these underground bookies are going to go away. I think there's going to be more underground bookies because now gambling looks legal, but it's going to be illegal to take bets, but I don't think they're going to crack down on it as hard as it has in the past.
People think that these underground bookies are going to go away. I think there's going to be more.
In the future you're going to be able to go into a 7-Eleven and buy a ticket on a game, and people who don't use gambling as often as others do, like the people who go and buy lottery tickets, there's going to be more opportunity for people to do it. And with people casually gambling throughout the country, it's going to generate a lot of money.
Have you been keeping up to date with the integrity-fee debate?
I have. I think it's kind of a joke because [the leagues] are now saying they need this money to police the game that they should have been policing at the highest level all along. I'm not too sure how they can say they need the money to protect the integrity of the game when that should have been one of the top priorities before gambling passed. So it's kind of confusing and comical at the same time.
How would you stop scandals from happening if you were in charge?
I think what you do is educate everybody. No doubt that another scandal is going to happen. I think it happens at a college level. Where some of these college kids get in [financial] trouble, maybe online poker, and then need to bail themselves out by winning a game that they're involved in. So they win by 10 when the line is 12 or 14. So in their mind, they're not hurting their team. They're just collecting money and not winning by as many as the line indicates they should. The scandals will happen at the college level, with some of these athletes who are going to get themselves in [financial] trouble [by gambling].
Do you see the legalization of sports betting as a stepping-stone to players getting paid? Possibly as a way to counteract the temptation?
No. I think that whether they have the money or not, they can still get in trouble with gambling and try to find a way to bail themselves out. With legalized betting, there's going to be more avenues to gamble and more opportunity, and eventually, someone is going to get themselves into some trouble.
VIDEO1:1901:19How the pro sports leagues are handling legal bettingPower Lunch
So you see trouble for the NCAA? What about the NBA? Have they cleaned up their act with regard to how referees officiate?
No. I don't think it's cleaned up. I still see referees officiating based on names on the front and back of jerseys and not based on how the rules are written in the rule book. I still see officials advancing in the playoffs who have had poor performances and embarrassed the league.
A prime example is [NBA referee Zach Zarba] at the end of game 5 [in the Boston-Philadelphia Eastern Conference Semifinals series]. He misses two critical calls that would have most likely given Philadelphia the win. Instead, the series is over and it cost that franchise millions of dollars. Who knows, maybe they go back to Philly; maybe they win game 6 and it goes to game 7. And yet he advances to the third round of the playoffs.
If an NCAA college basketball official has a poor game like that, they definitely wouldn't advance to the next round. It's still the same old situation with the NBA in regard to referees advancing based on relationships they have with whoever their supervisor is.
The league did come out and say they were wrong for those calls in the game's two-minute report ...
[The NBA] admitted it, but how do you let that [referee] advance and get his bonus for being in the third round. It just doesn't make sense.
Are the referees giving players star treatment because of personal preference or is there something more to it? You've previously talked about the 2006 Mavericks-Heat NBA Finals as a series where the referees were given a mandate to ref a certain way, in a manner that extended the series. Do you believe there are mandates in place today with regard to how referees officiate?
Stars get the benefit of an extra step and the ability to go to the line more than other people do. It's just the way it's been, and it's the way it's always going to be. For whatever reason, things haven't changed. If they want to change it and say they have integrity and look at all this stuff, they shouldn't advance the referees that make critical mistakes.
Have you seen any playoff series since you've been out of the game that made you wonder what's going on, similar to the 2006 Mavericks series?
Not to that extent. I think when you talk about a series like that and the one with the Lakers [in 2001] advancing where Sacramento should have won a championship, those referees back then, Dick Bavetta and Bob Delaney, guys who would openly talk about big market teams and teams down in series that you need to give the benefit of the call. That's a thing of the past. You don't openly talk about things the way they've talked about it.
Some officials are afraid to blow the whistle with 20,000 people screaming. ... Some officials love to have the crowd go against them. There's definitely some situations where you can take advantage based on who the officials are.
Do you feel that's because of the leadership change from Commissioner David Stern to Adam Silver?
Not only that, but the league comes in and shows the referees what to call and what to look for and they grade them based on that. That's how they get their message across instead of how it used to be.
When Bavetta was in there, he would say he was put on game sixes to force game sevens, and a lot of time he was put on to make sure big market teams like the Lakers got into that position. Nobody would dare say that today, they'd be fired.
What happens to referees once they retire? Any sort of pension plan?
There's a pension plan, and usually every former referee is given a job working in their home city evaluating the referees on the floor. [The league] always seems to have their hooks in them so that nobody comes out and talks to them. And so [the retired refs] keep their mouth shut. [The league] knows that everything I wrote in my book, Personal Foul, is true, and they're trying to have a system in place to counteract stuff like that, but I still see star players and teams down in the series getting the calls. [Editor's note: Donaghy had to forfeit his pension.]
Because everyone benefits with more games?
Right,. That's why I was shocked when Zarba missed those calls in the Boston game. Philly was down in the series. It was going to force another game that's going to generate tens of millions of dollars. I was shocked he missed those calls.
Back to sports betting, do you feel bookmakers are getting smarter in how they put out their lines?
No doubt about it. Everything is computerized. If there's a line and the public has the advantage, they adjust those lines very quickly.
You and your business partner, professional sports bettor Danny Biancullo, known in the sports world as Danny B, run Ref Picks, a sports handicapping service. How are you making picks? Do you use analytics to keep up with the bookmakers?
I look at who's officiating the game, but Danny B now has some programs in place, where he's using analytics and numbers, that he started a few months ago. The study has worked out pretty good so far.
If you could go back in time, what would you change? Is there anything you would have done differently?
Obviously, I would have stayed away from gambling. I got caught up with gambling at the golf course, the backroom card games at the casinos with buddies there, and eventually betting on sporting events. I think it became a situation where I got consumed by it and loved every minute of it. Every aspect of my day revolved around gambling in some way. I would have stayed away from it and not got so hooked on it so quickly.
Do you still bet on games?
From time to time, Danny B and I make different wagers, and it depends on the data and information we have.
Have you found any metrics that have led to an edge in sports betting? Perhaps home court or record against the spread over the past so many games? Or is that too elementary?
You can find stuff like that when you look at officials. Some officials are afraid to blow the whistle with 20,000 people screaming and yelling at them. Some officials love to have the crowd go against them. You look at Scott Foster and Tony Brothers this playoff season. The road team has covered a lot of time when they've been on the court together. So you have to look at who the officials are, and how they're matched up in the game, and what the line is, but there's definitely some situations where you can take advantage based on who the officials are.
What are your picks for the Western Conference Finals and NBA Finals?
Houston over Golden State in 7. Houston over Cleveland in 5.
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f8cc010c3598ad8168a2ac9a4dd28704 | https://www.cnbc.com/2018/05/24/gap-shares-tank-on-earnings-miss.html | Gap shares tumble on earnings miss as Old Navy growth slows | Gap shares tumble on earnings miss as Old Navy growth slows
Sale signs in the windows of a GAP store.Scott Mlyn | CNBC
Gap Inc. on Thursday reported revenue that outpaced analysts' estimates for the first quarter, but its earnings fell short of expectations, thanks to a further slump of the namesake Gap brand and a more unexpected slowdown at Old Navy.
Shares were still falling more than 9 percent Friday morning on the news.
Same-store sales at Gap stores globally fell 4 percent during the first period, flat from a year ago. Banana Republic, meanwhile, saw the same key metric climb 3 percent against a 4 percent loss in the prior year.
While the Old Navy label saw same-store sales growth of 3 percent, that was much less than an 8 percent increase delivered a year ago. A slowdown of Gap's strongest division could spell trouble for the chain in the future if those numbers don't start to pick back up.
"Despite the pressures we faced in the first quarter, we are affirming our full-year guidance, reflecting our confidence in the underlying fundamentals of the business as well as the benefits of executing against our balanced growth strategy," Gap CFO Teri List-Stoll said in a statement.
Net income was $164 million, or 42 cents a share, in the period ended May 5, compared with $143 million, or 36 cents a share, a year ago. Excluding one-time items, the retailer earned 42 cents a share, 4 cents lower than what analysts were expecting, based on a survey by Thomson Reuters.
Total sales climbed to $3.8 billion from $3.4 billion a year ago, surpassing a forecast by analysts of $3.6 billion.
Overall same-store sales — a key metric used by analysts to monitor retailers — rose 1 percent, while the Street was expecting an increase of about 1.7 percent, according to a Thomson Reuters survey.
CEO Art Peck said the Gap brand had its "expected challenges" during the latest quarter. On a call with analysts and investors Thursday afternoon, he said Athleta continues to be an "underappreciated gem" in Gap Inc.'s portfolio.
The company earlier this year announced it would be opening 60 Old Navy stores by the end of 2018, as part of a multiyear expansion of the Old Navy and Athleta brands. Meanwhile, it's closing an unspecified number of Gap and Banana Republic stores. On Thursday, it said the openings and closings would net out to the addition of roughly 25 locations by the end of the fiscal year.
Peck has told CNBC that he's focused on moving into more open-air centers and street-level retail and away from malls.
Just earlier this month, Telsey Advisory Group upgraded Gap to outperform from market perform, citing "sequentially improving operating momentum, which ... speaks to the underlying health of the brand portfolio."
Gap Inc. is still expecting to earn between $2.55 and $2.70 per share in 2018.
Shares have climbed nearly 50 percent, to above $29 apiece, from a year ago. The retailer has a market capitalization of about $11.6 billion today.
WATCH: Gap misses on earnings
VIDEO2:0302:03Gap misses on earningsClosing Bell
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4b9c313ec359e285f55a9cb0514fdeff | https://www.cnbc.com/2018/05/24/hawaii-volcano-produces-methane-and-eerie-blue-flames.html | Hawaii volcano produces methane and 'eerie' blue flames | Hawaii volcano produces methane and 'eerie' blue flames
Scientists in Hawaii have captured rare images of blue methane flames burning from cracks in the pavement as Kilauea volcano gushes lava in the background.
The photos and video offer a look at a new dimension in the volcano's weeks-long eruption.
The volcano produces methane when hot lava buries and burns plants and trees. The gas flows through the ground and up through existing cracks.
U.S. Geological Survey scientist Jim Kauahikaua (COW-ah-hee-COW-ah) told reporters it's just the second time he's ever seen blue flames during an eruption. He says it was dramatic and eerie.
The methane can seep through cracks several feet away from the lava.
Geological Survey scientist Wendy Stovall says the methane can cause explosions when it's ignited while trapped underground. Blasts can toss rocks several feet.
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a8980132676bfc1c03c9e65dab7a3ccd | https://www.cnbc.com/2018/05/24/investigators-identify-russian-military-unit-in-downing-of-mh17.html | Investigators identify Russian military unit in downing of MH17 | Investigators identify Russian military unit in downing of MH17
Alexander Ermochenko | Anadolu Agency | Getty Images
Prosecutors investigating the downing of Malaysia Airlines Flight 17 over eastern Ukraine in 2014 said on Thursday they had identified the missile used to shoot down the plane as coming from a Russian military unit.
The airliner was hit by a Russian-made missile on July 17, 2014, with 298 people on board, two-thirds of them Dutch, over territory held by pro-Russian separatists. All aboard died.
Wilbert Paulissen, head of the crime squad of the Netherlands' national police, said the missile had been fired from a carrier belonging to Russia's 53rd Anti-Aircraft Brigade.
"All the vehicles in a convoy carrying the missile were part of the Russian armed forces," he told a televised news conference.
Russia has denied involvement in the incident. There was no immediate comment from Moscow on the investigative development.
In an interim update on their investigation, prosecutors said they had trimmed their list of possible suspects from more than a hundred to several dozen.
"We have a lot of proof and a lot of evidence, but we are not finished," said chief prosecutor Fred Westerbeke. "There is still a lot of work to do."
He said investigators were not yet ready to identify individual suspects publicly or to issue indictments. The question of whether members of the 53rd Brigade were actively involved in the downing of the plane remains under investigation, he said.
VIDEO1:1901:19MH17: One year onWars and Military Conflicts
Westerbeke called on witnesses, including members of the public, to help identify members of the crew that was operating the missile system. He also asked for tip-offs in determining what their orders were and in identifying the officials in charge of the brigade.
A Joint Investigation Team, drawn from Australia, Belgium, Malaysia, the Netherlands and Ukraine, is gathering evidence for a criminal prosecution in the downing of the plane.
The Dutch Safety Board concluded in an October 2015 report that the Boeing 777 was struck by a Russian-made Buk missile.
Dutch prosecutors said in September 2016 that 100 "persons of interest" had been identified in the investigation, while Australian and Malaysian officials had initially expressed hope that suspects' names would be made public in 2017.
Eventual suspects are likely to be tried in absentia in the Netherlands after Russia used its veto to block a U.N. Security Council resolution seeking to create an international tribunal to oversee criminal complaints stemming from the incident.
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fed239d73cf4242a86e71a711a026c92 | https://www.cnbc.com/2018/05/24/italys-populists-choice-of-pm-is-approved-as-europe-issues-a-warning-over-debt.html | Italy's populists' choice of PM is approved as Europe issues a warning over debt | Italy's populists' choice of PM is approved as Europe issues a warning over debt
Giuseppe Conte delivers a declaration after a meeting with Italian President Sergio Mattarella as part of consultations for a new government at the Quirinale Palace on May 23, 2018 in Rome, Italy.Franco Origlia/Getty Images
Italy's head of state has given the country's populist parties' choice of prime minister — a law professor called Giuseppe Conte — the mandate to lead the government, amid warnings from Europe for Italy to respect budget rules.
Italy's anti-establishment parties, the 5 Star Movement (M5S) and Lega, proposed Conte as their candidate to lead a coalition government to President Sergio Mattarella on Monday.
There was a delay to Mattarella's approval, however, with the president holding talks with the speakers of Italy's lower house and Senate over the choice while question marks were raised over the accuracy of Conte's prestigious credentials.
On Wednesday evening, however, Mattarella had conceded the mandate with Conte accepting the position, telling reporters: "I am about to start defending the interests of Italians in all places, in a dialogue with European and international institutions. I am looking forward to start working for real."
The euroskeptic M5S and right-wing Lega party — which both earned the most amount of votes in an election in March — will now draw up a list of ministers to present to Mattarella. It's likely that Lega leader Matteo Salvini will become interior minister while M5S leader Luigi Di Maio could become minister for labor and/or economic development.
When starting their negotiations to form a coalition, both leaders had vetoed each other becoming prime minister, hence their choice of Conte — although both deny that he represents the type of technocratic leader they've both criticized in the past.
While Lega and M5S may be celebrating taking a step closer to government, officials in Europe are concerned not only about the parties' euroskeptic stance, but also with their plans for spending.
Last week, M5S and Lega revealed plans to boost public spending, cut taxes, dilute reforms to the pension system and for a guaranteed basic income. While the measures might appeal to voters, EU officials are keeping a close eye on Italy's adherence to deficit rules.
On Wednesday, the European Commission warned the incoming government that it should continue to cut Italy's public debt. The third largest euro zone economy had a debt-to-gross domestic product (GDP) ratio of 131.8 percent in 2017 and a budget deficit of 2.3 percent in the same year.
Salvini and Di Maio have both said previously that the EU's budget deficit limit of 3 percent was hurting economic growth and should be changed. The commission warned that debt, which is accrued when governments spend more than they receive in taxes, was still a major issue for Italy.
"Italy's public debt remains a major source of vulnerability for the economy," the Commission said in a report Wednesday, recommending economic policy for EU states that coincided with Conte's appointment.
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6e826d488a842a68cdd1a4a2e08956f1 | https://www.cnbc.com/2018/05/24/jj-hit-with-21-point-7-million-verdict-in-another-talc-asbestos-cancer-case.html | J&J hit with $21.7 million verdict in another talc asbestos cancer case | J&J hit with $21.7 million verdict in another talc asbestos cancer case
Bottles of Johnson & Johnson baby powder line a drugstore shelf in New York.Lucas Jackson | Reuters
Johnson & Johnson and its talc suppliers on Wednesday were hit with a $21.7 million jury verdict in a lawsuit by a woman who said she developed cancer after being exposed to asbestos in the company's Baby Powder.
The verdict by a Los Angeles jury came down in the case of 68-year-old Joanne Anderson, who was diagnosed with mesothelioma, a form of cancer closely linked to asbestos exposure, and marked the second trial loss for J&J over similar allegations.
Of the $21.7 million the jury awarded in compensatory damages, J&J was assigned 67 percent, with the rest distributed among other defendants.
J&J has vehemently denied that its talc products contain asbestos or cause cancer, citing decades of testing by independent laboratories and scientists. But plaintiffs claim that asbestos and talc, which are closely linked minerals, are intermingled in the mining process, making it impossible to remove the carcinogenic substance.
Anderson and her husband in 2017 had sued J&J, a unit of Imerys, Cyprus Amax Minerals, a unit of Brenntag, Honeywell, and other local talc suppliers, but it was not immediately clear which of those companies were subject to the remaining damages award.
Damages could still grow as the jury debates whether to award punitive damages, Anderson's lawyer, Chris Panatier, said, declining to comment further.
"While we are disappointed with this decision, the jury has further deliberations to conduct in this trial and we will reserve additional comment until the case is fully completed," J&J said in a statement.
J&J has also been battling some 6,000 cases claiming its baby powder caused ovarian cancer, but the talc litigation has taken a new focus in recent months with plaintiffs claiming the widely used product causes mesothelioma due to alleged asbestos contamination.
Wednesday's verdict marks the second trial loss for J&J over allegations that its talc-based products contain asbestos.
A New Jersey state court jury in April ordered J&J and its talc supplier, a unit of Imerys, to pay $117 million to a man who alleged he developed mesothelioma due to asbestos exposure from J&J Baby Powder. An appeal is pending.
A California jury in November last year cleared J&J of liability in another mesothelioma lawsuit.
The company and Imerys, as well as a local unit of U.S. drugstore chain Rite Aid, are also facing another mesothelioma trial in a South Carolina court.
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d033bd57c8887f5717a86208fa7187fd | https://www.cnbc.com/2018/05/24/medical-device-maker-medtronic-reports-25-point-5-percent-rise-in-profit.html | Heart, diabetes devices pump up Medtronic's quarterly profit | Heart, diabetes devices pump up Medtronic's quarterly profit
Medtronic Chairman and Chief Executive Omar Ishrak.Reuters
Medtronic's fourth-quarter profit topped analysts' estimates on Thursday on higher demand for heart valves and diabetes devices such as insulin pumps.
Medtronic, the world's largest standalone medical device maker, sells everything from minimally invasive therapies to spinal and heart devices, and it has been launching new products to combat increasingly fierce competition.
The company on Thursday also forecast an adjusted profit of $5.10 to $5.15 per share for fiscal 2019, in line with analysts' average estimate of $5.14, according to Thomson Reuters I/B/E/S.
Evercore's Kumar said that considering recent concerns over currency movements, the in-line forecast should provide relief for investors.
The company's shares rose 1 percent in premarket trading.
Cardiac and vascular unit sales jumped 10.1 percent to $3.14 billion in the fourth quarter, beating the average analyst estimate of $3.10 billion.
Rival Edwards Lifesciences last month said its premium-priced transcatheter heart valves had lost market share in Europe to Medtronic.
Sales at Medtronic's coronary & structural heart unit, which houses the transcatheter valves, rose 18.7 percent to $1.01 billion.
The company's diabetes unit sales rose 26 percent to $645 million, helped by strong demand for its new sensor-augmented insulin pump systems.
Net income attributable to the company jumped 25.5 percent to $1.46 billion, or $1.07 per share, in the quarter ended April 27.
Excluding items, the company earned $1.42 per share, beating the average analyst estimate of $1.39.
Revenue rose 2.9 percent to $8.14 billion.
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55344404262a42915416d3cc0b6013dd | https://www.cnbc.com/2018/05/24/north-korea-demolishes-what-it-says-is-nuclear-test-site.html | North Korea demolishes what it says is a nuclear test site | North Korea demolishes what it says is a nuclear test site
North Korean leader Kim Jong Un attends a grand military parade celebrating the 70th founding anniversary of the Korean People's Army at the Kim Il Sung Square in Pyongyang.KCNA | Reuters
North Korea carried out what it said is the demolition of its nuclear test site Thursday, setting off a series of explosions over several hours in the presence of foreign journalists.
The explosions at the nuclear test site deep in the mountains of the North's sparsely populated northeast were centered on three tunnels at the underground site and a number of buildings in the surrounding area.
The planned closing was previously announced by leader Kim Jong Un ahead of his planned summit with U.S. President Donald Trump, which is scheduled to take place next month.
The demolition came as the North lobbed another verbal salvo at Washington, calling Vice President Mike Pence a "political dummy" and saying it is just as ready to meet in a nuclear confrontation as at the negotiating table.
The North's decision to close the Punggye-ri nuclear test site has generally been seen as a welcome gesture by Kim to set a positive tone ahead of the summit. Even so, it is not an irreversible move and would need to be followed by many more significant measures to meet Trump's demands for real denuclearization.
By bringing in a small group of television journalists and other members of the news media, the North is likely hoping to have dramatic images of the closing — including explosions to collapse tunnel entrances — broadcast around the world.
The group of journalists that witnessed the demolition included an Associated Press Television crew.
The North did not invite international nuclear weapons inspectors to the ceremony.
The first blast visiting journalists witnessed happened at around 11 a.m. local time. North Korean officials said it collapsed the north tunnel, which was used for five nuclear tests between 2009 and last year.
Two other explosions at around 2:20 p.m. and 4 p.m. demolished the west and south tunnels, according to officials.
Thursday's demolition also involved the destruction of observation posts and barracks used by guards and other workers at the facility.
Another tunnel on the eastern side of the facility was shut down after an initial nuclear test in 2006.
The journalists who were allowed to witness the demolition arrived in the morning and stayed at the site for around nine hours.
Getting to the remote site required an 11-hour overnight train journey from Wonsan, a port city east of the capital, Pyongyang.
The outburst at Pence, issued in the name of a top Foreign Ministry official, comes on the heels of another sharp rebuke of Trump's newly appointed national security adviser, John Bolton, and has raised concerns that a major gap has opened between the two sides just weeks before the June 12 summit in Singapore.
In both cases, Pyongyang was trying to push back against hard-line comments suggesting North Korea may end up like Libya if it doesn't move forward quickly and irreversibly with concrete measures to get rid of its nuclear weapons.
Choe Son Hui, a vice minister of foreign affairs, was quoted Thursday by the North's state-run news agency slamming as "ignorant" and "stupid" comments Pence made in an interview with Fox News that compared the nuclear-capable North to Libya. Libya gave up its program at an early stage only to see its longtime dictator overthrown and brutally killed years later.
The summit plan has hit a number of speed bumps recently as both sides have begun trading barbs and taking tougher positions. Trump met with South Korean President Moon Jae-in on Tuesday at the White House for consultations and suggested the summit could be delayed or even called off entirely.
Even so, both sides still seem to want to hold the meeting, which would be unprecedented.
Success in talks would be a huge accomplishment for Trump. Meeting with the U.S. president as an equal on the world stage would be a major coup for Kim.
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e90f8dbdd32c02dda9f9d1d8f50b3d32 | https://www.cnbc.com/2018/05/24/nutanix-earnings-q3-2018.html | Nutanix falls on a wider-than-expected quarterly loss | Nutanix falls on a wider-than-expected quarterly loss
Dheeraj Pandey, Nutanix CEOSource: Dheeraj Pandey
Data center infrastructure company Nutanix dropped about 5 percent in extended trading on Thursday after losing more money in the fiscal third quarter than analysts expected.
While revenue beat estimates, Nutanix also gave a forecast for the current quarter that disappointed investors.
Earnings: Loss of 21 cents per share, excluding certain items, vs. loss of 19 cents per share as expected by analysts, according to Thomson Reuters.Revenue: $289.4 million, vs. $279 million as expected by analysts, according to Thomson Reuters.
Nutanix said in a statement that it expects a loss of 20 to 22 cents per share, excluding certain items, on $295 to 300 million in revenue for its fiscal fourth quarter, which ended on April 30. Analysts had been expecting a loss of 13 cents per share, excluding certain items, on $289 million in revenue, according to Thomson Reuters.
The company has been transitioning to focus much more on software than hardware in the past nine months, CEO Dheeraj Pandey told analysts during a conference call on Thursday.
"We have seen some large deals in terms of what we see on the horizon that would not have been possible had we continued to sell appliances," Pandey said.
In the fiscal third quarter Nutanix's software revenue, totaling $158.5 million, was up 57 percent year over year. In the same period the company's hardware revenue came out to $62.6 million, which was up 5.6 percent.
Shares of Nutanix, which went public in 2016, are up 57 percent since the beginning of the year. In April Bloomberg reported that the company had delayed the release of its Xi cloud service. "As we talked about at our investor day in March, we are providing early access to Xi this summer," Pandey said.
VIDEO3:5803:58Nutanix acquiring cloud app Netsil: CEOSquawk Box
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350b200017103def143327280195bc47 | https://www.cnbc.com/2018/05/24/pfizer-under-pressure-to-resolve-shortage-of-life-saving-epipen.html | Pfizer under pressure to resolve shortage of life-saving EpiPen | Pfizer under pressure to resolve shortage of life-saving EpiPen
Getty Images
Mylan, the company behind the EpiPen allergy injector, is pressing its manufacturing partner Pfizer to do more to tackle shortages of the life-saving medicine in a sign of its growing frustration with the Big Pharma company.
Although Mylan owns the rights to the EpiPen — which can stave off deadly anaphylactic shock — it subcontracts manufacturing of the auto-injector to Meridian Medical, a division of Pfizer.
However, Pfizer has struggled to meet demand for the allergy injector, resulting in some patients having difficulties finding the product in their local pharmacies. The US Food and Drug Administration put the medicine on its official shortages list earlier this month.
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If not resolved, the shortages could become more severe in the third quarter when demand tends to soar as children with severe allergies return to school.
Mylan has responded to the shortage by sending a team of its own managers to try to fix problems at a Pfizer factory in St Louis, Missouri — which makes all the EpiPens in the US — according to people familiar with the situation.
The factory in St Louis has been struggling to maintain production following an inspection that resulted in a scathing warning letter in September from the FDA, which ordered it to fix several quality control issues.
Mylan sent its team to the plant in part because its managers sensed a lack of urgency among their counterparts at Pfizer, which is dealing with shortages of hundreds of drugs, one person said.
While the EpiPen is but one among the hundreds of products in short supply, it has outsize importance for Mylan because it is the company's best-known drug.
In a joint statement, Pfizer and Mylan said: "Both companies are fully aware of the life-saving importance of EpiPen and we are working together, as we have throughout our long collaboration, to increase production and expedite shipments as rapidly as possible."
They said their partnership had "always included frequent interactions such as visits to each other's sites".
The shortage of EpiPens is particularly irksome for Mylan as it tries to move on from controversy over the cost of the medicine. The company had priced a two-pack of EpiPens at roughly $600 until 2016, when a political and public backlash forced it to introduce a cheaper generic version.
"Mylan's management has never been shy to show how they feel about business issues," said Ronny Gal, analyst at Bernstein, who added that the company had several "fair arguments" against Pfizer.
"This is actually a life-saving, mission-critical product and it is Pfizer's fault — but it is casting Mylan in a bad light when they already have a reputation problem."
He added: "And this product has had decades of manufacturing issues that Pfizer has never fixed."
The EpiPen shortage comes as Pfizer races to resolve shortages caused by manufacturing problems at several of its factories, many of them acquired when it took over Hospira, a maker of injectable drugs, for $16bn in 2015.
A rival allergy injector known as Adrenaclick, which is marketed by Amneal Pharmaceuticals, is also in short supply because of issues at a Pfizer plant in McPherson, Kansas, which makes the crucial ingredient.
A spokesperson for Amneal said the company was "not pleased by the shortages" and that it was "trying to resolve them by working with the manufacturer and the FDA".
Mr. Gal said that Pfizer should try to "prioritise life-saving drugs like Adrenaclick and EpiPen" as it works through the problems at its plants.
A Pfizer spokesperson said: "We are currently shipping product and our shipments have been increasing over the last few months, with April shipments exceeding projections."
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53267bce23106b4ee1e27ebf27b90d12 | https://www.cnbc.com/2018/05/24/reuters-america-update-3-deutsche-telekom-promises-to-be-dependable-and-deliver-higher-growth.html | UPDATE 3-Deutsche Telekom promises to be dependable and deliver higher growth | UPDATE 3-Deutsche Telekom promises to be dependable and deliver higher growth
* Growth metrics through 2021 in line with prior period
* Dividends to be pegged to adjusted EPS
* All divisions to expand from 2019 onwards
* Impact of proposed T-Mobile-Sprint deal not included (Updates with briefing, details from presentation)
LONDON, May 24 (Reuters) - Deutsche Telekom pledged its business divisions spanning Germany, Europe and the United States would all show growth from next year and said it would tie dividends to rising bottom-line profits in future.
Europe's largest telecoms firm announced the shift on Thursday ahead of a two-day investor conference, where it wants to win buyers back to a stock that has declined 10 percent this despite yielding nearly 5 percent.
Hiking the dividend will require Deutsche Telekom to deliver on its growth promise -- including fixing its troubled IT services unit T-Systems -- while capping capital investment and curbing costs.
"We might be a bit boring, a bit German," CEO Tim Hoettges told reporters as he pitched the new four-year plan. "When Deutsche Telekom says it will do something, we do it."
The Bonn-based company, in which the German state still owns a 31 percent stake, said it expected revenues to rise by 1-2 percent per year from 2017 to 2021, adjusted core profits by 2-4 percent and free cash flow by 10 percent.
That is in line with the last mid-term guidance it issued for the period covering 2014-18 and which it has, on most metrics, surpassed.
Hoettges said Telekom would focus on its 'footprint' in Europe and the United States, with acquisitions a legitimate way to drive growth in its core business.
Telekom will also keep its options open on T-Systems, whose classic IT outsourcing business is struggling. "I don't rule out a partial sale," he said, adding that it was vital to settle on the right owner and right strategy.
THE BOTTOM LINE
Telekom plans to pay a dividend for the current business year of 0.70 euros ($0.82), up from 0.65 euros last year, driven by growth in free cash flow.
Thereafter, payouts would be tied to adjusted earnings per share that are expected to rise to 1.20 euros in 2021 from 1.00 euro this year.
Chief Financial Officer Thomas Dannenfeldt said the change better reflected Deutsche Telekom's ownership of earnings from its U.S. operations and was made in response to market feedback.
The mid-term plan does not include T-Mobile's proposed merger with Sprint - a deal that would bulk up Deutsche Telekom's group revenues to put it almost on a par with the U.S. market No.2 Verizon.
Assuming the deal closes in early 2019, the impact on Deutsche Telekom's earnings and free cash flow would be negative through 2021 and accretive thereafter. It would also generate estimated synergies with a net present value of $43 billion, the company estimates.
Telekom said it would also consider buybacks - either of its own stock, or by increasing its stake in U.S. unit T-Mobile . It would take the latter route if the merger doesn't pan out and T-Mobile proceeds with buybacks of its own that have already been announced.
In its home market, Deutsche Telekom will focus on building out its broadband network and rolling out fifth-generation mobile services. Auctions of 5G mobile spectrum will be held in early 2019.
Deutsche Telekom has been criticised for relying too much on connecting homes to the internet through 'vectoring', which involves a tweak to the old copper-wire telephone network to boost bandwidth.
It said it would provide super-fast fibre connections to up to 2 million households a year from 2021, as well as fast wireless-to-the-home connections to around one quarter of German homes.
The company said its investments had peaked and would stabilise going forward, while it would achieve 1.5 billion euros in cost savings outside the United States through 2021.
The company's shares traded down 1.3 percent while Germany's blue-chip DAX index was broadly stable. ($1 = 0.8541 euros) (Reporting by Douglas Busvine Editing by Victoria Bryan and Richard Pullin)
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fd72a5594afde5f64a422d42fb71b853 | https://www.cnbc.com/2018/05/24/south-korean-stocks-etf-tumbles-after-trump-cancels-meeting-with-north-koreas-kim-jong-un.html | South Korean stocks ETF tumbles after Trump cancels meeting with North Korea's Kim Jong Un | South Korean stocks ETF tumbles after Trump cancels meeting with North Korea's Kim Jong Un
A man watches a television news showing North Korean leader Kim Jong Un (R) and US President Donald Trump (L), at a railway station in Seoul on May 24, 2018.Jung Yeon-Je | AFP | Getty Images
An exchange-traded fund tracking South Korean stocks briefly dropped more than 2.5 percent Thursday after President Donald Trump called off a nuclear summit with North Korea's Kim Jong Un.
The iShares MSCI South Korea Capped ETF, the EWY, closed 1.3 percent lower, its first negative day in four sessions. The ETF tracks stocks such as Hyundai Motor, LG, Lotte and Samsung Electronics.
Investors are concerned renewed geopolitical tension in the region could weigh on economic activity.
U.S. stocks extended losses after the news, with the Dow Jones industrial average briefly falling 150 points.
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4e37b23f6b1e144c325eaa57666bbe84 | https://www.cnbc.com/2018/05/24/stocks-making-the-biggest-moves-premarket-bby-mdt-hrl-mck-deo-foxa-f-gm-more.html | Stocks making the biggest moves premarket: BBY, MDT, HRL, MCK, DEO, FOXA, F, GM & more | Stocks making the biggest moves premarket: BBY, MDT, HRL, MCK, DEO, FOXA, F, GM & more
VIDEO0:4900:49Stocks futures are mixed after Wednesday reboundMarkets
Check out the companies making headlines before the bell:
Best Buy – The electronics retailer earned an adjusted 82 cents per share for the first quarter, 8 cents a share above estimates, with revenue also exceeding forecasts. Best Buy reported a comparable store sales increase of 7.1 percent, well above the consensus Thomson Reuters forecast of a 3.0 percent increase.
Medtronic – The medical device maker's quarterly numbers came in 3 cents above estimates at an adjusted $1.42 per share, with revenue also above Street forecasts. Medtronic benefited from higher demand for its heart-related devices.
Hormel – The food producer fell a penny a share shy of estimates, with quarterly earnings of 44 cents per share. Revenue was slightly shy of forecasts, as well. Hormel noted higher freight and commodity costs as factors during the quarter, but adds that the quarter did see record profit and that it is maintaining its full-year forecast.
McKesson – The drug distributor fell 7 cents a share short of estimates, with adjusted quarterly profit of $3.49 per share. Revenue exceeded forecasts, however, and McKesson's board authorized an additional $4 billion stock buyback.
Diageo – Diageo has begun an auction of its U.S.-focused spirit brands, according to Sky News. Those brands include Myers's Rum and Goldschlager.
21st Century Fox – Fox is being urged by activist investor Chris Hohn to engage with Comcast, if the NBCUniversal and CNBC parent does make a formal offer for Fox assets that is superior to the deal Fox struck to sell those assets to Walt Disney. Hohn disclosed a 7.4 percent stake in Fox and expressed his view in a letter to Rupert Murdoch that was seen by the Wall Street Journal.
Ford, General Motors – U.S. auto stocks could get a boost after the Trump administration launched a national security probe into car and truck imports. The probe could lead to new tariffs on imported vehicles.
L Brands – L Brands reported quarterly profit of 17 cents per share, beating estimates by a penny a share. The Victoria's Secret parent's revenue also beat forecasts, however the company issued weaker-than-expected current-quarter earnings guidance.
Williams-Sonoma – Williams-Sonoma beat estimates by 9 cents a share, with quarterly profit of 67 cents per share, with revenue above forecasts, as well. The home furnishings retailer also raised its full-year outlook.
Procter & Gamble – The consumer products company said it would continue investing in Russian plants in the coming years, despite increasing risks due to deteriorating U.S.-Russian relations.
Deutsche Bank – Deutsche Bank will cut more than 7,000 jobs worldwide, as the bank's new CEO seeks to cut expenses and restore profitability at Germany's largest bank.
Johnson & Johnson – J&J and its suppliers were hit with a $21.7 million verdict in a case involving a woman who said she developed cancer after being exposed to asbestos in J&J's baby powder product. J&J was assessed 67 percent of the total compensatory damages, with the possible punitive damages still to be determined by the jury.
KKR – The private-equity firm is in talks to buy privately held BMC Software for about $10 billion, according to the New York Post. Private-equity firms Bain Capital and Golden Gate Capital took BMC private for $6.9 billion in 2013. The paper also said KKR continues to work with hospital operator HCA to bid more than $10 billion for Envision Healthcare.
Kroger – Kroger is buying Home Chef, the largest privately held provider of meal kits in the U.S. The supermarket chain will pay $200 million up front, and up to $700 million depending on certain performance targets.
NetApp – NetApp beat estimates by 4 cents a share, with quarterly profit of $1.05 per share. The cloud data company's revenue also topped forecasts.
Darden Restaurants – Oppenheimer added the parent of Olive Garden, Bahama Breeze, and other restaurant chains to its "Top Picks" list, noting an attractive valuation and the potential for a sizable earnings beat for fiscal 2019.
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948268433e7245b466d3fab490ab36c9 | https://www.cnbc.com/2018/05/24/stop-shop-recalls-frozen-broccoli-due-to-listeria-concerns.html | Stop & Shop recalls frozen broccoli due to listeria concerns | Stop & Shop recalls frozen broccoli due to listeria concerns
Maximilian Stock Ltd. | Getty Images
The East Coast supermarket chain Stop & Shop is recalling some frozen broccoli due to listeria concerns.
At issue are the 16-ounce bags of Private Brands Frozen Broccoli Cuts with a March 15, 2020, best-by date and a 068826700926 UPC.
A store sample the Connecticut Department of Consumer Protection's Food and Standards Division pulled tested positive for listeria, according to Stop & Shop's website.
Customers may return the frozen broccoli a full refund.
According to the Centers for Disease Control, the bacterium Listeria monocytogenes sickens about 1,600 people every year and kills an estimated 260. Most at risk are pregnant women, newborn babies, older adults and people with weakened immune systems.
Listeriosis symptoms depend on the person and what body part has been affected. Among them are fever, diarrhea, aches, confusion, loss of balance and convulsions, the CDC said.
Stop & Shop is owned by the Dutch company Ahold Delhaize, whose other U.S. holdings include the supermarket chains Food Lion, Giant Food and Hannaford and the online grocery retailer Peapod.
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eb33d825ae24c164af7cc9b115638088 | https://www.cnbc.com/2018/05/24/trump-canceling-north-korea-summit-gets-mixed-reactions-from-congress.html | Congress is relieved after Trump cancels summit with North Korea's Kim Jong Un | Congress is relieved after Trump cancels summit with North Korea's Kim Jong Un
VIDEO3:0703:07Trump set expectations too high for summit, says Eurasia Group presidentPower Lunch
Members of Congress tentatively approved of President Donald Trump's move Thursday to cancel his planned summit with North Korean dictator Kim Jong Un — but questioned where the president will go from here.
Some Republican lawmakers saw the meeting as potentially treacherous or doomed to fail and expressed suspicion about Kim's intentions for coming to the table.
Trump had planned to push North Korea to give up its nuclear and missile programs during the summit. Certain members of Congress urged Trump not to give up on those efforts to seek peace with Pyongyang.
Some Democrats, however, worried about whether Trump had a plan moving forward, and warned him not to go back to the aggressive rhetoric he employed toward North Korea at times last year.
Here are some of the reactions from notable lawmakers:
In a statement, House Speaker Paul Ryan on Thursday questioned North Korea's intentions. The Wisconsin Republican pushed Trump to keep up the economic pressure campaign carried out through international sanctions.
"The North Korean regime has long given ample reason to question its commitment to stability. We must continue to work with our allies toward a peaceful resolution, but that will require a much greater degree of seriousness from the Kim regime. At the same time, Congress has provided significant tools to hold North Korea accountable, and it is important that the United States not relent in this maximum pressure campaign."
Nancy Pelosi, the top House Democrat, called scrapping the meeting "a good thing for Kim Jong Un." The California Democrat said the "thug" Kim is "the big winner" after getting "legitimized" by Trump.
"This takes preparation ... which the president didn't make. It's clear he didn't know what he was getting into. And now he's walking away from it," she said.
"I think [Trump] did the right thing" in canceling the summit, Senate Majority Leader Mitch McConnell, R-Ky., told reporters.
Top Senate Democrat Chuck Schumer said Thursday he worried the summit would not have yielded real results. The New York senator urged Trump to achieve a "concrete, verifiable" end to Kim's nuclear program if another summit takes place.
"The fear many of us had was that the summit between President Trump and Kim Jong Un would be a great show that produced nothing endured. If a summit is to be reconstituted, the United States must show strength and achieve a concrete, verifiable enduring elimination of Kim Jong Un's nuclear capabilities," he said on the Senate floor.
Rep. Ed Royce, R-Calif., urged Trump to "continue to look for opportunities while applying maximum diplomatic pressure."
"Our goal is to peacefully end North Korea's nuclear threats. The administration should continue to look for opportunities while applying maximum diplomatic and financial pressure against Kim Jong Un. Our allies — including South Korea and Japan — need to stand with the United States. There can be no daylight between us."
Sen. Bob Menendez, the top Democrat on the Senate Foreign Relations Committee, said Thursday that "the art of diplomacy is a lot harder than the art of the deal." During a hearing, the New Jersey lawmaker called it "pretty amazing" that the Trump administration "might be shocked that North Korea is acting as North Korea might very well normally act."
"And while we applaud the robust diplomatic efforts to try to denuclearize the Korean Peninsula, many of us were deeply concerned that the lack of deep preparation that is necessary, before such a summit is even agreed to, was not taking place," he said.
Speaking to reporters Thursday, Sen. Ben Cardin, D-Md., called Trump's decision to walk away from the summit "puzzling," according to NBC News.
He added that he has not seen anything to date that would change the need for direct talks between Washington and Pyongyang.
In a tweet Thursday, Sen. Marco Rubio, R-Fla., called Trump's move "100% the right decision." He argued Kim "doesn't want a deal."
"He has deliberately sabotaged the talks over the last two weeks & was setting us up to take the blame," Rubio wrote.
Rubio tweet
Rep. Eric Swalwell, D-Calif., told NBC News he feels "talking is better than walking away."
He urged Trump not to revert to "bellicose war talks" and "stick to the strategy of applying pressure."
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9981083a797faec6fe614904b536bf90 | https://www.cnbc.com/2018/05/24/trump-praises-nfls-anthem-policy-says-protesters-maybe-shouldnt-be-in-the-country.html | Trump praises NFL's anthem policy, says protesters maybe 'shouldn't be in the country' | Trump praises NFL's anthem policy, says protesters maybe 'shouldn't be in the country'
President Donald TrumpChip Somodevilla | Getty Images
WASHINGTON — President Trump on Thursday applauded the NFL's new national anthem policy and suggested players who protest maybe "shouldn't be in the country."
"You have to stand proudly for the national anthem," Trump said in an interview on Fox & Friends. "The NFL owners did the right thing."
Players who don't stand, the president said, "maybe" shouldn't be allowed to play and "maybe you shouldn't be in the country."
VIDEO1:5501:55NFL announces policy on the National AnthemPower Lunch
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Trump's remarks came a day after the National Football League approved a revised conduct policy that requires players on the field to stand for the national anthem. It allows players who do not wish to stand to remain in the locker room.
The new policy allows individual teams to fine players who do not adhere to the requirements.
Fox & friends tweet
Donald Trump tweet
Trump made the issue a cause célèbre last year as some NFL players took a knee during the anthem to protest violent interactions between police and African Americans. In September, Trump called on fans to boycott games over the controversy.
"If NFL fans refuse to go to games until players stop disrespecting our Flag & Country, you will see change take place fast," the president wrote on Twitter on Sept. 24. "Fire or suspend!"
Trump told Fox and Friends that he didn't believe he is responsible for the policy change.
"This was not me," he said. "I brought it out. I think the people pushed it forward."
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f6cc376909f1d5f95929f4108f80ba9b | https://www.cnbc.com/2018/05/24/twitter-feed-hack-how-to-see-10-year-old-tweets.html | How to send your Twitter feed back 10 years and see early, silly tweets | How to send your Twitter feed back 10 years and see early, silly tweets
Michael Nagle | Bloomberg | Getty Images
A Twitter user has crafted the exact search needed to send your feed back 10 years — and it's resurfacing some early, silly tweets.
The specific search, shared by early Kickstarter executive Andy Baio, will show you what everyone you follow now was tweeting about 10 years ago. (You can adjust the date in the search field to search earlier or later.)
Just click the link to run the search on your own account.
If you're on the mobile version of the app, switch to "Latest" tweets at the top so all the little guys get in the mix.
It was a simpler time on Twitter a decade ago. A lot of people just tweeted out their minute-to-minute activities or random thoughts.
Ten years ago tomorrow, CNBC Technology product editor Todd Haselton was apparently returning to a favorite bar in Alphabet City in Manhattan.
He tells me Sunburnt Cow has since closed down, but we'll always have the tweet to remember it by.
One of our CNBC.com editors, EB, claims a 10-year-old tweet about some too-spicy Thai food could have been crafted today.
But it's funnier to think of a decade ago.
It's also a window into the insights of early adopters — including entrepreneurs and engineers that would go on to Uber, Airbnb or venture capital.Tweet: So what happens when the Web 2.0 Watering Hole goes down the tubes? FriendFeed is too asynchronous for me. Where's the backup pub?Tweet: internet cafes everywhere in the world except US. . . travellers in the U.S are off the grid
Tweet: looking forward to @garyvee 's book to arrive...!
Tweet: Note to self: write that piece about Social Zombies that I have been thinking about. Paradox of internet uber connection, and RL isolation
Tweet: Lawyer meeting in dumbo, Brooklyn. Cool area.
If nothing else, the search is a fun reminder of how pleasant the service used to be. Even if you weren't on Twitter in 2008, scrolling through the messages from those who were feels something like a message in a bottle — a far cry from the inflammatory and bot-filled Twitter we know now.
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aa09259a70093792d0b8e192362d7abc | https://www.cnbc.com/2018/05/24/wall-street-regulations-need-a-facelift-not-a-minor-dodd-frank-makeover.html | Wall Street regulations need a facelift, not a minor Dodd-Frank makeover | Wall Street regulations need a facelift, not a minor Dodd-Frank makeover
The famous bull statue on Wall Street, near the New York Stock Exchange in New York City.Adam Jeffery | CNBC
Republicans finally managed to roll back some of the Wall Street regulations passed by Congress in the wake of the 2008 financial crisis after years of trying.
While it wasn't a full repeal as some had hoped, it's the first legislative overhaul since the Dodd-Frank Act became law in 2010.
This debate has primarily been framed as a fight over regulation. Democrats generally want more to protect taxpayers and investors from the next crisis; Republicans want less because they argue it stifles economic growth.
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So who's right?
Based on our combined 35 years of experience with securities markets and the research we've done for our book, "When the Levees Break: Re-visioning Regulation of the Securities Markets," we think both sides are wrong. The issue isn't about more or less regulation but about the need for a streamlined system that supports 21st-century investing.
If we had our way, the whole system of financial regulation would be burned to the ground and replaced with something entirely different.
When we think of financial markets, we tend to jumble securities markets like stocks, bonds and commodities with conventional bank lending such as checking accounts and lines of credit.
Dodd-Frank, for example, was ostensibly focused on regulation of securities markets, but the rules that got the most attention were those that affect the "too big to fail" banks. That those banks straddled both worlds – securities trading and traditional banking – is what made the 2008 financial crisis life-threatening.
But only securities trading, and in particular derivatives, was at the root of the crisis. So for our purposes, when we talk about financial regulation, our focus is on the securities markets.
The financial markets meltdown in the fall of 2008 devastated the U.S. economy, but it wasn't nearly as bad as the stock market rout that preceded the Great Depression in October 1929.
After the 1929 crash, lawmakers reacted by passing laws aimed at ensuring investor protection. Two groundbreaking pieces of legislation, passed in 1933 and 1934, required companies to submit quarterly and annual reports and established the Securities and Exchange Commission. These laws form the cornerstone of modern securities markets regulation.
But they were only the beginning. As markets expanded and changed, Congress continued to craft new laws that added more agencies to oversee Wall Street activities. As a result, we have more than two dozen agencies, self-regulatory organizations and exchanges – such as the Commodity Futures Trading Commission, the Treasury, the Department of Labor and the Justice Department – not to mention state securities agencies, all with overlapping regulatory jurisdictions.
Moreover, the laws have been reactionary – rather than visionary – resulting in competing concerns and duplicative audit and enforcement procedures. Not surprisingly, there is largely no coordination or communication between them.
Meanwhile, the SEC – as primary regulator – is bogged down with too many directives, many of which are under- or unfunded. For decades, whenever Congress passed a bill to "regulate" big changes in the markets – from market crashes to "advancements" such as mutual funds and investment advisers – the SEC has been required to add oversight of these new practices to their existing responsibilities. Dodd-Frank, for example, expanded the SEC's role and called for additional internal audits of existing practices but – like past market-related legislation – failed to include funding for those activities.
Amid all the regulation, investor protection seems to have gotten lost.
The severity of the 2008 crash and its economic impact – including investment company failures and unprecedented government bailouts – goaded Congress into action.
In 2010 Democratic lawmakers passed the Dodd-Frank Act, the most extensive revision of securities regulation since the 1930s, with the hope that more regulation would prevent another crisis.
Republicans have argued for its repeal ever since, claiming the law and the regulations designed to implement it – some of which have yet to be implemented – inhibit prosperity.
Both parties are missing the point. The current system of financial regulation is built on how stocks were traded in the 1930s – when computers and algorithmic trading had yet to be a glimmer in a quant's eye. To paraphrase an Oldsmobile commercial, it's not your father's stock market anymore.
Financial markets have undergone a fundamental transformation over the past 80 years.
First of all, there are the investors themselves. The mom and pop investor who the SEC was created to protect has by and large been replaced by institutional investors, including quantitative analysts, or "quants," that use complex algorithmic formulas to predict the best trading strategies. In fact, algorithmic trading makes up the majority of volume in today's markets.
Then there's the issue of disclosure. Since the dawn of federal securities regulation, lawmakers and regulators have relied on disclosure to protect investors. Public companies are required to disclose volumes of information, from financial information to dealings with Iran and even their code of ethics. As a result, a company can spend over a million dollars each year complying with disclosure regulations that few people actually read. Yet every time there's a new disaster, Congress piles on the disclosure requirements, as happened with Dodd-Frank.
But for all the hundreds of pages of disclosure, at no time in the past 80 years has there been a mandate to review the actual securities products issued by public companies and investment banks. There are no "safety" standards for stocks, like there are for cars or toasters. The products that brought down the house in 2008 – mortgage-backed securities and products derived from them – continue to be offered to the public, including new ones backed by credit card debt and student loans.
Finally, the SEC and other regulators are unequipped to keep up with the breathtaking changes in technology, let alone anticipate potential advances and challenges. To understand why, one must only consider the breadth of organizations that have fallen victim to hackers, from Target and Yahoo to the Veterans Administration, and the Federal Reserve itself.
Unfortunately, however, Congress does not fund the SEC in a way that would allow it to pay for the skills or systems it needs to keep up with technological and other market advances. Following Dodd-Frank, for example, the SEC's budget was actually reduced, even as its responsibilities multiplied.
In sum, what we have is a regulatory system that fails in its mission to protect investors. The structure used to oversee current investment practices, corporate disclosures, product development and technological advances is based on the market failures of 1929. It's a bit like trying to surf the internet using a typewriter.
The next "big" crash will likely be bigger than the last one. So how do we prepare for it?
What we've done so far won't protect us in the future. Dodd-Frank is largely an extension of the existing patchwork structure. While the new legislation won't make things worse – as it's targeting small and mid-sized banks – Republican hopes to repeal the rest of it and return banks to the pre-crisis period of self-regulation would. After the next crash, institutions will not be too big to fail, they'll be too big to save.
The answer, in our view, is to move away from a fight about how much regulation toward a complete rethinking of how we regulate investing. Only then will the U.S. begin to prepare for the next big one.
Commentary by Jena Martin and Karen Kunz , a Professor of Law and Associate Professor of Public Administration at West Virginia University, respectively. They are also contributors at The Conversation, an independent source of news and views from the academic and research community. Follow Karen Kunz on Twitter @kakunz.
For more insight from CNBC contributors, follow @CNBCopinion on Twitter.
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24ff0f14e6ff7755ad1954efd38c5761 | https://www.cnbc.com/2018/05/24/watch-cisco-ceo-chuck-robbins-speak-at-viva-tech-2018.html | Cisco CEO Chuck Robbins speaks at VivaTech 2018 amid heightened cybersecurity concerns | Cisco CEO Chuck Robbins speaks at VivaTech 2018 amid heightened cybersecurity concerns
[The stream is slated to start at 10.30 a.m. ET. Please refresh the page if you do not see a player above at that time.]
Chuck Robbins, the chief executive of Cisco, is speaking with CNBC's Karen Tso at the Viva Technology conference.
Cybersecurity is likely to be high on the agenda after the company warned Russia's government is likely behind a hack resulting in at least 500,000 routers and storage devices around the world being infected with sophisticated malware.
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08826f22f7109e845a06e42e63dc9b99 | https://www.cnbc.com/2018/05/25/5-things-starbucks-has-to-get-right-during-its-anti-bias-training-day.html | 5 things Starbucks has to get right during its anti-bias training day | 5 things Starbucks has to get right during its anti-bias training day
A man reads a notice stating "We're Closing Early On May 29," posted outside a Starbucks store, before more than 8,000 branches nationwide will close this afternoon for anti-bias training, in Philadelphia, May 29, 2018.Mark Makela | Reuters
On Tuesday afternoon 8,000 Starbucks cafes will shutter and more than 175,000 baristas will participate in a training seminar in the wake of an incident in Philadelphia that challenged fundamental parts of the company's values.
The four-hour master class has been designed to address implicit bias, promote inclusion and help prevent discrimination with the hopes of preventing future incidences.
The curriculum features videos from Starbucks' CEO Kevin Johnson and Chairman Howard Schultz, as well as rapper Common, and members from the Perception Institute who speak on racial anxiety and how employees can better serve customers. Employees will also watch a documentary from award-winning filmmaker Stanley Nelson.
VIDEO1:0201:02Starbucks closes 8,000 stores for racial bias trainingSquawk Box
"When you consider the question: 'how much impact can Starbucks really have? Is it just a drop in the bucket?' I think it has the potential to be more significant than that," Aaron Allen, founder and CEO of global restaurant consulting firm Aaron Allen and Associates, told CNBC.
Of course, Starbucks has to get a few things right if any impact is to be seen.
In America, a company's value system is expected to be free of political or religious bias, Allen said. Which is why many companies have a very basic policy for how guests should be treated, or none at all.
"This isn't taught," Allen said. "Not even the top hospitality school in the world [teaches] the subject of hospitality."
In the same way Starbucks trains its employees to make a cup of coffee the Starbucks way, it must also train its employees to treat customers in the Starbucks way.
"Brands and employees go together and if one or the other isn't aligned, a crisis will brew," Mark Macias, founder and owner of Macias PR, a New York City-based public relations agency, told CNBC via email. "In the case with Starbucks, where baristas come from different communities and backgrounds, it's inevitable that these different cultures and community backgrounds will ignite different actions and approaches to situations."
"Starbucks needs to make sure their company values, morals and approaches are aligned with the company — and not the barista's personal history," he said.
When Starbucks closed its doors nearly a decade ago to retrain its baristas on how to make its iconic espresso, the company shipped instructional DVDs and DVD players to all 7,100 of its company restaurants that were open at the time.
This time around, employees will watch video clips on iPads and use a large white and green Team Guidebook filled with prompts and a reiteration of the company's mission.
"Interaction is crucial," Macias said. "Starbucks can't just create training programs that tell employees what to do. This training must involve critical thinking. It needs to engage employees with thoughts and situations, otherwise it will become a joke among employees. Once that happens, forget the progress. If employees see the training as beneath them than it will defeat the purpose."
Starbucks worked with Bryan Stevenson, founder and executive director of the Equal Justice Initiative; Sherrilyn Ifill, president and director-counsel of the NAACP Legal Defense and Education Fund; Heather McGhee, president of public policy organization Demos; former U.S. Attorney General Eric Holder; and Jonathan Greenblatt, CEO of the Anti-Defamation League to create the program.
Starbucks intends Tuesday afternoon's training to promote inclusion and help prevent discrimination, but the company has to be careful not to alienate certain employees or issue blanket statements about bias being universal, Lee Pacchia, co-founder and CEO of Mimesis, a strategic communications consultancy firm, told CNBC via email.
"I noticed a lot of complaints at the inherent unfairness of making Starbucks employees who happen to be racial minorities sit through these lengthy training sessions on a topic that they likely understand full well through their own experiences," he said. "I think there's a lot of merit to those complaints, but unfortunately I can't see how Starbucks can selectively apply this program to only a subset of its entire workforce."
Pacchia said Starbucks should speak plainly about the nature of racial bias and avoid "false equivalencies."
"While it might be tempting to frame this issue as 'bias can happen to anyone anytime,' I'd recommend against letting anyone come away from the program thinking that what happened in Philadelphia could have happened to two white customers," he said.
"Starbucks' training day is an important step, but it is just one step in what is a very long process," Juan Martinez, president of JMart Strategies, a consulting firm that specializes in crisis communications, told CNBC via email.
Martinez said employees will not only have difficult conversations during the training day, but also afterwards. Since these exchanges are very personal and emotional, he suggests Starbucks make sure to offer a safe space for those conversations to take place on Tuesday and beyond.
"Starbucks must be sure its culture is one that allows space for those conversations to continue and to evolve over time," he said. "There will be a lot more work ahead for Starbucks and its employees."
While the training on Tuesday will only occur at company-owned locations, once it is complete, Starbucks plans to make it available to its licensed partners and it will become part of the cafe's on-boarding process for new employees.
"This needs to be continual," Macias said. "It can't be a one-time, four-hour event. Future employees need to be trained and homogeneous communities also need to become aware of our diverse country."
While it is impossible to guarantee that Starbucks will have no more issues, there will be a protocol in place going forward to deal with issues like this, Allen said.
"[Starbucks is] one of the best examples of a conscious, social responsible business, one that the really values purpose over profit," he said.
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01e2b59f9b91d61df210a407351261ed | https://www.cnbc.com/2018/05/25/apples-self-driving-partnership-is-about-services-gene-munster.html | Apple's self-driving partnership is the next phase of 'Apple as a service,' Loup Ventures' Gene Munster says | Apple's self-driving partnership is the next phase of 'Apple as a service,' Loup Ventures' Gene Munster says
Tim Cook, CEO of Apple Inc.Adam Jeffery | CNBC
Instead of framing Apple's self-driving car ambitions around vehicle design, investors could view Apple's new Volkswagen partnership as another investment in the hardware giant's growing services business, venture capitalist Gene Munster said in a note.
Apple is providing software for automaker partner Volkswagen, according to report this week in The New York Times. The report indicated that Apple has adjusted its self-driving dreams in recent years, resigning to work with Volkswagen after earlier negotiations with several automakers fell through — in part because Apple was hesitant to relinquish control over the vehicle design.
But Munster, founder and managing partner of Loup Ventures, views Apple's software and services endgame as an upside for the stock. And even if Apple bows out of the hardware design in cars, he said the company could still benefit from offering car services.
"The concept of an autonomous service is a departure from Apple's current hardware and content services business. Specifically, delivering their experience through third party hardware is a strategy that Apple rarely employs," Munster said. "That said, we believe, given the complexities of manufacturing a car (just ask Tesla) and the size of the opportunity, it makes sense for Apple to partner their way to autonomy."
Any resulting Apple-Volkswagen vehicle, Munster said, is likely to yield an "Apple-like experience."
Apple's software and services segment — the App Store, Apple Care, Apple Pay, iTunes and cloud services — has been a particular growth point for the iPhone maker in recent years. CEO Tim Cook said in January 2017 that he hoped to double revenue from the group — then $7.17 billion — by 2020. The company earlier this month reported a 31 percent year-over-year increase in the segment's revenue to $9.2 billion during the March quarter.
Morgan Stanley said this week that the market is undervaluing Apple's services business, predicting the company's services business will represent 67 percent of Apple's sale growth in the next five years.
Munster, previously a top Apple analyst on Wall Street, recently told CNBC that Apple is leaving money on the table by failing to capitalize on the growing subscription economy. A long-term self-driving software play might make up the difference.
"Autonomy is one component of optionality that is currently not reflected in Apple's share price along with AR, original content, and health," Munster said.
Shares of Apple have hit record highs in recent weeks — gaining more than 10 percent in 2018 and more than 20 percent in the past 12 months. The stock price as of Friday's open was just $15 per share shy of a $1 trillion market valuation for the company.
VIDEO3:3103:31Loup Ventures' Gene Munster: Why Apple is a service companyClosing Bell
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383ee43d81604b09233b282af789687b | https://www.cnbc.com/2018/05/25/as-computers-get-harder-to-crack-thieves-are-pillaging-mailboxes.html | As computers get harder to crack, thieves are pillaging mailboxes | As computers get harder to crack, thieves are pillaging mailboxes
A pedestrian walks past a U. S. Postal Service mailbox in New York.Timothy Fadek | Bloomberg | Getty Images
It was around noon on April 12.
Josefina Gomez Pando, 83, dropped a check for $112 into a blue mailbox on a corner on the Upper West Side of Manhattan. Then she proceeded to her doctor's appointment.
Her check would never make it to the mailman.
That's because someone else, most likely using a sticky rat trap attached to the end of a string, fished her check right back out of that mailbox.
VIDEO7:2907:29PhishMe CEO shows CNBC's Andrew Ross Sorkin how to spot phishing emailsSquawk Box
And then they wrote a new one for $3,500.
"I pay all my bills by mail — around 30 checks a month," said Pando, who owns three buildings in New York City. "This never happened to me."
"Mail fishing" is when people use tools to retrieve envelopes out of the blue mailboxes lining the streets, and it's on the rise, according to law enforcement officials.
"It's doubled over the last two years, at least," said Lt. John Grimpel, a spokesman for the New York City Police Department.
There were 2,800 complaints of mail fishing filed across the five boroughs of New York in 2017, and 1,300 submitted so far this year, he said.
Mail fishers are not unique to Manhattan, however. Mail is under siege in Texas, Florida, New Jersey, Massachusetts, Colorado and California, among other places.
"It's coast to coast," Grimpel said.
The increase in mail fishing can be blamed in part on how the world is growing more complicated, said R. Sean McCleskey, a retired United States Secret Service agent who supervised an identity theft task force for more than a decade.
Always when I make my signature, I make a line under my name, and this signature that has been falsified has no line.Josefina Gomez Pandoa victim of mail fishing
"The more companies are hardening up their policies on their cybersecurity, [criminals] might say 'I don't have the skill level to break into a computer now, but I can sure as heck go to the mailbox,'" McCleskey said.
Even as more communications and payments play out on screens, nearly 150 billion pieces of mail were sent out in the United States in 2017.
Two days after Pando left her check in the mailbox, she received a call from Citibank. "They said they need to talk with me," Pando said.
She stopped by her nearest branch, where she was told she might have been a victim of fraud. When she saw the check, she was taken aback. "It was very good writing and it was very professional writing," Pando said.
VIDEO1:1701:17Managing analog ID theft risksPersonal Finance
But the signature on the check was clearly not hers. "Always when I make my signature, I make a line under my name," she said. "And this signature that has been falsified has no line."
The bank did not allow Pando's check to clear.
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"At Citibank, we take check fraud very seriously and we maintain regular contact with local police as part of our aggressive strategy to combat all types of fraud," said Drew Benson, a spokesman for the company.
Paul Benda, senior vice president of risk management policy at the American Bankers Association, said it's seeing an uptick in mail fishing but that banks deploy sophisticated algorithms to detect such suspicious transactions.
"There's really a comprehensive system to stop this fraud," Benda said.
Donna Harris, a spokeswoman for the New York division of the United States Postal Inspection Service — the Postal Service's law enforcement division — declined to comment on the dollar amount stolen each year through the mail.
So how do these people break into the boxes?
Unless your arm is plastic, you can't get your hand in the mailbox, said Grimpel of the NYPD, adding that they usually send those rectangular sticky traps that people use to catch rodents down the mailbox slots, with a string.
They can pull up 20 envelopes at a time this way, he said.
Mail fishers have other techniques, as well.
"I've seen more traps that I can tell you," said McCleskey. "I've seen them roll up and put a chain around the mailbox and drag it down the street."
While not all endeavors to steal mail are fruitful — "every time you go fishing," Grimpel said, "you don't catch a fish" — plenty of times, they are.
Criminals can get their hands on people's gift cards, cash-filled birthday greetings, rent checks, money orders, credit cards or documents with home addresses and Social Security numbers.
"You can basically build a profile of an individual from the information you gather in the mail," McCleskey said.
And as was done to Pando, thieves can "wash" a person's check of ink with easy-to-buy chemicals. Then they have a blank check with which to do whatever they want.
Mail theft is a federal crime, and can land someone in prison for up to five years.
The police have been trying to catch these thieves, by hiding cameras near the blue boxes and staking them out in the middle of the night when the criminals most often go fishing.
"If they observe them sticking a glue trap down the mailbox, that's probable cause they're not mailing a letter," the NYPD's Grimpel said.
The United States Postal Inspection Service is also on the case.
This is a bad thing because many people depend on the mail. Josefina Gomez Pandoa victim of mail fishing
"We are investigating these crimes and we will arrest these individuals and bring them to justice," Harris said.
She said they're also replacing and retrofitting mailboxes to make them fishing-resistant.
"Crime trends change and you have to change with them to maintain your relevancy," Harris said.
Since her bad experience, Pando hasn't been back to a mailbox. She's doesn't even send letters to her family members in Spain anymore.
"This is a bad thing because many people depend on the mail," she said.
How to keep your mail safe:Deposit your mail before the last collection time, said Harris. This will prevent your mail from sitting in the box overnight, she said, when mail fishers most often come out. (On most mailboxes, you'll see a list of the pick-up times). McCleskey took it a step further."Take your mail and put it in the post office, and when I say in the post office, I mean walk in and put it in, which is kind of a pain but I've seen mail stolen directly out of the receptacles outside as well," he said.Consider requesting a number for your mail and following it, he added."I would highly recommend tracking your mail right now," he said. The New York City Police Department recommends using a pen with pigmented (permanent) ink to write checks out, as it's harder to wash away. You also want to check your account balance frequently to make sure your checks were cleared by the establishments that you wrote them to, according to the NYPD. Contact your bank as soon as you realize something is amiss.Harris said people should also call the United States Postal Inspection Service at 877-876-2455, so it can investigate. "If they see someone committing a crime against the blue box, call 911 immediately," said Harris.
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20a85f7f93e9c433455c58348cfbd435 | https://www.cnbc.com/2018/05/25/astrazeneca-cancer-drug-hits-second-goal-by-extending-survival.html | AstraZeneca cancer drug hits second goal by extending survival | AstraZeneca cancer drug hits second goal by extending survival
AstraZeneca's immunotherapy drug Imfinzi has hit a second important goal by improving overall survival in lung cancer patients, boosting prospects for a medicine that has already got off to a promising commercial launch.
Its success in extending lives, announced by the company on Friday, follows data announced last year showing patients on Imfinzi lived on average 16.8 months without their disease worsening, against just 5.6 months for those on placebo.
That so-called progression-free survival (PFS) benefit led to U.S. regulatory approval in February, allowing Imfinzi to be used in non-small cell lung cancer patients with inoperable mid-stage disease that has not spread widely around the body.
Imfinzi is the first immunotherapy to be approved in this setting, giving AstraZeneca a chance to intervene relatively early in lung cancer.
That distinguishes it from rivals Merck, Bristol-Myers Squibb and Roche that beat the British drugmaker in winning approval for similar immunotherapies in advanced or metastatic disease.
Analysts believe using Imfinzi in stage III lung cancer, where cancer has only spread locally, opens up a multibillion-dollar sales opportunity and the latest overall survival (OS) data should underline the drug's potential.
"Consensus has peak Imfinzi sales at $2.8 billion by 2023 and the achievement of an OS benefit may not result in much of a change in sales expectations," Berenberg analysts said in a note.
"Nevertheless ... the OS data will help Astra in its physician education and ensure the peak sales can be achieved."
AstraZeneca said it planned to publish full details of the statistically significant OS result at an upcoming medical conference.
Imfinzi, chemically known as durvalumab, belongs to a new class of immuno-oncology drugs that block a mechanism tumors use to evade detection from the immune system.
Lung cancer is the biggest opportunity for all companies seeking to exploit the power of such medicines, since it is the leading cause of cancer deaths.
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3d49fa3bcdad9d0dc416d2217a549be5 | https://www.cnbc.com/2018/05/25/calstrs-bets-on-ge-comeback-says-ceo-flannery-off-to-a-good-start.html | CalSTRS bets on GE comeback, says CEO Flannery off to a good start | CalSTRS bets on GE comeback, says CEO Flannery off to a good start
VIDEO2:1802:18Trying to figure out GE is the challenge for Wall Street: CalSTRSPower Lunch
The nation's second-largest pension fund is standing behind General Electric.
The industrial conglomerate is down about 47 percent from 12 months ago. It also cut its dividend in half in November.
"It's got a great mix of a whole bunch of portfolio companies," said Chris Ailman, chief investment officer of the California State Teachers' Retirement System.
GE is part of CalSTRS' portfolio, which had $224.7 billion in total investment assets as of April 30.
On Wednesday, GE dropped the most in a single day of trading since April 2009 after CEO John Flannery said the company will "have to see how" the turnaround plan "plays out" before deciding whether to cut the company's dividend again.
However, sources told CNBC's David Faber on Thursday that GE does not plan to cut its dividend in 2019. Flannery's remarks may have been misinterpreted, according to those sources.
Ailman told CNBC's "Power Lunch" on Friday that while GE has been one of the laggards in the Dow Jones industrial average, the future looks optimistic.
"We think it's going to improve in value over time," he said. "The dividend is important but it is not critical. It is more important for the pensioners but for us as a shareholder, we're interested in the total return of the stock."
Meanwhile, he thinks Flannery, who took the helm of the beleaguered company in August, is off to a good start.
"He needs to continue to diversify the board. We'd like to see more outside ideas come into that board because there's such a diverse set of product mix," said Ailman.
"One of the challenges for Wall Street is trying to figure out what exactly GE is."
However, he anticipates a trying time ahead for the new CEO.
That's because GE is a "giant, giant battleship."
"When you're a huge ship in this ocean, trying to figure out how to navigate this world, he's going to have challenges in front of him. We're going to give him some time to see how he performs," Ailman added.
Disclaimer
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a8711e1416b35e5cd49c3c91a5cfaaac | https://www.cnbc.com/2018/05/25/car-shoppers-could-land-good-deals-with-memorial-day-weekend-sales-push.html | Car shoppers could land good deals with Memorial Day weekend sales push | Car shoppers could land good deals with Memorial Day weekend sales push
If you're in the market for a new vehicle, you might want to fit in a trip to the dealership between parades and cookouts over Memorial Day weekend.
The three-day holiday marks the second big sales push so far this year. Buyers are likely to find a good selection of 2018 models that dealerships will be eager to unload to make way for 2019 versions that start arriving in the summer.
"The weekend kicks off the summer selling season, so it's a big deal for dealerships," said Matt Jones, senior consumer advice editor for Edmunds. "The discounts won't be the deepest of the year, but they are still really good. Later in the year, discounts are greater but there's less inventory."
Patrick T. Fallon | Bloomberg | Getty Images
Despite rising interest rates and overall higher auto prices, consumers continue stretching their budgets to get in a new car. May sales are expected to be 16 percent higher than last month — when the pace of transactions dropped — and 3.5 percent higher than a year ago, according to Edmunds.
The average price paid for a new vehicle is about $32,500, recent data from J.D. Power show. A year ago, it was $31,400.
The average interest rate for a new-car loan was 5.6 percent in April, up from 5 percent a year ago, according to Edmunds. On a used car, the interest rate is 8.3 percent, up from 7.7 percent in April 2017.
Average new-car financing costs
Loan aspect April 2018 April 2017 Apr 2013 Term69.2 months69.1 months65.5 monthsMonthly payment$535 $509 $463 Amount financed$31,318 $30,315 $26,679 APR5.6%5%4.2%Down payment$3,911 $3,770 $3,494
Those rates are likely headed higher. After raising a key short-term interest rate in March that affects consumer loans, the Federal Reserve is expected to increase rates at least two more times this year. The March increase marked the fourth boost in 12 months.
On top of those purchasing costs, driving itself is getting more expensive. Gas prices are at a four-year high, with a national average of $2.96, compared with $2.37 a year ago, according to AAA.
With consumer preferences shifting over the last several years to SUVs and pickup trucks — both of which generally are less fuel efficient than cars — there's been speculation about whether higher prices at the pump will slow sales of those larger and generally higher-priced options.
"In the near term, rising gas prices aren't deterring sales since consumer confidence continues to soar at an all-time high," said Jeremy Acevedo, manager of industry analysis at Edmunds. Consumer confidence hit a 14-year high in March and remains strong.
Average used-car financing costs
Loan aspect April 2018 April 2017 April 2013 Term67.1 months67 months64.2 monthsMonthly payment$398 $386 $866 Amount financed$21,620 $21,330 $19,357 Interest rate8.3%7.7%8%Down payment$2,633 $2,531 $2,292
In fact, about 67 percent of vehicles sold in May are forecast to be trucks and SUVs, according to Edmunds.
Nevertheless, if gas prices continue rising, car shoppers could begin factoring in what lower fuel efficiency means for their wallets.
As for incentives, the average in April was about $3,700, which was $187 higher than a year earlier, according to J.D. Power's most recent data. Generally speaking, the larger discounts can be found on trucks and SUVs.
Meanwhile, if you're considering a used car, there are plenty hitting dealer lots. In fact, an estimated 3.9 million vehicles are coming off their leases this year, according to Cox Automotive. That means many dealers will be eager to unload them.
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Before you make your way to the dealership, there are a few things you should do to find the best deal available and prepare for your purchase.
It's worthwhile to do some research online first. If you have any flexibility, you might discover a great deal on a car similar to the one you were thinking about.
You also might find a difference in price among local dealerships on the same car. Or, you might find a dealership that has a special deal going — say, picking up the sales tax on your purchase — that could reduce your overall cost.
Unless paying with cash, you should get preapproved for a loan from a bank or credit union. While there's no obligation to use the preapproval, you'll at least be armed with a comparison when the dealership offers its loan terms.
"If what a dealer can offer beats your preapproval, then great," said Edmunds' Jones. "If not, you still have the preapproved loan with the better interest rate."
Generally speaking, the better your credit score, the better terms you'll get.
VIDEO29:5729:57The Amazon-ification of car buyingTech
For those with excellent credit, zero percent financing could be available on certain makes and models when you use the dealer's financing. For instance, the 2018 Dodge Durango — its list price starts around $30,000 — can come with a no-interest loan and cash back, depending on where you live.
Or, the 2018 Chevy Cruze, which starts around $17,000, comes with zero percent financing on a 72-month loan for buyers who qualify.
Make sure you're armed with all the documents you'll need to complete a sale: your driver's license, the title and registration for your existing car (if you're trading it in) and proof of insurance.
If you are making a down payment, call the dealership ahead of time to find out what forms of payment are accepted.
Once you get to the nitty-gritty of a deal, you might be offered an optional feature or service contract, such as an extended warranty.
Make sure you do the math before you sign on the dotted line — not only to understand the extra monthly cost, but also to know what you would pay over the life of the loan for the add-on.
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8d981350713504c4ffe53de4e01601f8 | https://www.cnbc.com/2018/05/25/in-the-post-harvey-weinstein-era-heres-how-to-report-workplace-abuse.html | In the post-Harvey Weinstein era, here's how to report workplace abuse | In the post-Harvey Weinstein era, here's how to report workplace abuse
Ullstein bild | Getty Images
Despite Friday's high-profile arrest of former movie mogul Harvey Weinstein on charges stemming from multiple allegations of sexual misconduct, many instances of workplace harassment apparently are never even reported.
Of the 12 percent of workers who say they've experienced sexual harassment on the job, 72 percent did not tell their employer about the incident, according to a CareerBuilder survey released early this year. More than half (54 percent) did not confront the perpetrator.
"There's a stigma of shame, denial and fear of consequences that surrounds these victims, making it often difficult for them to come forward," said Rosemary Haefner, chief human resources officer at CareerBuilder.
VIDEO4:2104:21Harvey Weinstein charged with rape and sexual abuseSquawk Box
Weinstein was charged with rape, criminal sex act, sex abuse and sexual misconduct for incidents involving two separate women, according to a statement from the New York Police Department.
His arrest comes after dozens of women came forward last year with accusations against him of inappropriate sexual behavior. The public allegations helped spur the #MeToo movement, emboldening other victims to disclose abuse by men in power.
Weinstein has previously denied that any of the encounters in question were nonconsensual.
While many victims of workplace sexual harassment keep it to themselves, three-quarters of those who do report an incident say the issue was resolved, according to the CareerBuilder survey.
"Unfortunately, history has shown that there were reasons to be concerned," Haefner said. "But we have seen a shift ... Anyone who feels harassed should come forward."
Workers who experience sexual harassment should be able to feel comfortable going to their companies to resolve the situation, she said.
"Companies need to do a better job making sure all employees understand that sexual harassment will not be tolerated in the workplace and reports will be taken seriously," Haefner said.
Who has felt sexually harassed in the workplace
Age Yes 18-3417 percent35-4411 percent45-5410 percent55 and older9 percent
According to the U.S. Equal Employment Opportunity Commission, you should start by telling the person who is doing the harassment to stop — if you feel comfortable doing so. If you don't feel comfortable making the request, or if the behavior continues despite your efforts, there are some key steps to take.
Here's what you need to know.
According to the EEOC, sexual harassment is a form of sex discrimination. Under the Civil Rights Act of 1964, you have the legal right to be protected from discrimination in the workplace if your company has 15 or more employees. State laws or employer policies might also offer additional protections.
Check to see if your company has an anti-harassment policy. It may be on the employer's web site or in its employee handbook, or you can get it from human resources.
If there is a policy in place, follow the steps outlined, which should include options for reporting the incident and filing a complaint.
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While the specifics of company policies will differ, federal guidelines say the employer should promptly conduct an impartial investigation, along with ensuring that the harassment stops in the meantime.
If the investigation determines harassment did occur, EEOC guidelines say disciplinary measures should be proportional to the seriousness of the offense.
Be sure to document the incident in detail, Haefner said.
"Make sure you list all the names of people who may have witnessed the incident," Haefner said.
Then, she said, provide your report to a supervisor or manager, or to your human resources department.
Make sure you list all the names of people who may have witnessed the incident.Rosemary Haefnerchief human resources officer at CareerBuilder
If your company has no procedure in place for filing a sexual-harassment complaint, you should go to your immediate supervisor. And if that person is the perpetrator?
"Make your complaint to your supervisor's immediate supervisor," Haefner said.
If you don't feel comfortable doing that, consider talking to another manager or supervisor. You should explain what has happened and ask for that person's help in putting a stop to the behavior.
You have the option of filing a charge of discrimination with the EEOC within either 180 or 300 days of the incident, depending on where you work. (Federal employees and job applicants have a different process and time limits).
While you do not need a lawyer to file a complaint with the federal agency, some victims turn to an employment attorney for help with turning to the EEOC.
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20c8a11e2ef0a9ce3656affda3557aa8 | https://www.cnbc.com/2018/05/25/lululemon-up-118-percent-in-1-year-could-have-more-room-to-run.html | A specialty retailer up 118% in one year could have more room to run after earnings | A specialty retailer up 118% in one year could have more room to run after earnings
VIDEO1:2901:29Specialty retail is on a tear and Lululemon is no exception. Here’s how to play itTrading Nation
Athleisure manufacturer Lululemon reports quarterly earnings next Thursday, and the options market is implying a relatively tame move on earnings after a mammoth run in recent months.
Shares of Lululemon, up 118 percent in one year and 35 percent in 2018, is among a number of specialty retailers on a tear this year. Shares of Ralph Lauren, Tiffany and Urban Outfitters have gained a respective 30 percent, 21 percent and 20 percent n 2018.
Stacey Gilbert, head of derivative strategy at Susquehanna, told CNBC's "Trading Nation" Lululemon is expecting a relatively small move on earnings this quarter. Gilbert explains.
• Options are pricing in a move of around 8 percent in either direction around earnings, a touch below what the stock has realized over the past eight quarters, though in line with what it's done over the past four quarters.
• Given the 35 percent rise this year, Susquehanna prefers buying call options rather than the stock outright.
• Susquehanna carries a positive rating on Lululemon shares, and the firm sees the momentum continuing.
Disclosure: Susquehanna is a market maker in Lululemon.
Bottom line: Shares of Lululemon are expected to see a move of around 8 percent following its earnings report next week, according to Gilbert.
Disclaimer
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d6f637360e660323e5a177e1b5b6e502 | https://www.cnbc.com/2018/05/25/nasa-can-still-teach-private-space-sector-lessons-about-going-into-outer-space.html | NASA can still teach private space sector lessons about going into outer space | NASA can still teach private space sector lessons about going into outer space
Bill Ingalls | NASA | Getty Images
Nowadays, discussions about the future of space are more likely to reference private companies like SpaceX, Virgin Galactic and Blue Origin than NASA — the federal agency responsible for putting a man on the moon.
On Thursday, the Trump administration released a set of guidelines to reform and update U.S. policy toward private space endeavors. Tellingly, NASA's sole mention came at the end of the document announcing President Donald Trump's directive, where he called for the space agency to "return American astronauts to the moon, followed by human missions to Mars."
U.S. astronaut Peggy Whitson, who's been making the rounds in the media recently to promote "One Strange Rock" — a series about the complexity of human life on earth — told CNBC in an interview that another journey to the moon was advisable before aiming for Mars. There are lessons that need to be learned before undertaking a farther and riskier journey to the red planet, she said.
"Going to the moon first is smart, just like we're learning about how longer duration in space is smart," said Whitson, who spent so many days in orbit that one of her colleagues called her an "American space ninja."
She added that NASA was critical to testing theories, and laying a blueprint that SpaceX and others should follow as they endeavor to send humans to Mars, and perhaps beyond. "We need to test new techniques and make sure they're going to work," she added.
An Orbital ATK Antares rocket launches from Pad-0A on November 12, 2017 at NASA's Wallops Flight FacilityBill Ingalls | NASA
Trump's announcement last week underscored the meteoric rise of commercial ventures, and the commensurate decline in NASA's public profile.
It also broadly reflects a society ambivalent at best about the government's role in pioneering the next phase of space exploration. A 2015 Pew Research Center poll showed that nearly half of adults say the federal government's place in future space travel should be minimal or nonexistent.
Yet as the next global space race develops, Whitson thinks people shouldn't be so quick to discount NASA's involvement. She believes the agency is set to do much of the heavy lifting that private companies will need to flourish in outer space.
"NASA is doing what it should be doing as a government organization … the real deep space exploration that allows commercial providers to have the means for going," the Iowa native and former commander of the International Space Station told CNBC.
It means that entrepreneurs like Elon Musk, who boasted in March that SpaceX could be ready to send a rocket to Mars as soon as next year, will still need NASA to set the stage for the eventual exploration and colonization of other planets, Whitson said.
"Elon says he's going to get [to Mars] first, and that would be great, but there's a lot of test" beforehand, she told CNBC. "In the future there will be commercial companies in space, but until then ... NASA has to progress and build a presence."
Nor should the U.S. try and go it alone, Whitson added. She insisted that the future of international cooperation in space travel remains bright — even with geopolitical tensions flare.
"I actually think that the space station is demonstrating what we can do internationally — [with] any great endeavor it's going to be most successful and best done internationally," the astronaut told CNBC.
The legacy of the ISS will be that "we can do these complex things together internationally. I know it sounds a little like rose-colored glasses, but if we can do this maybe it will be our path forward in the future."
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7d433053995836650c81f0fc7aad8f4d | https://www.cnbc.com/2018/05/25/opec-russia-discuss-raising-oil-output-by-about-1-million-barrels-per-day-sources.html | OPEC, Russia discuss raising oil output by about 1 million barrels per day: Sources | OPEC, Russia discuss raising oil output by about 1 million barrels per day: Sources
VIDEO3:3203:32Sibur CEO: OPEC now more worried about supply than demandSPIEF: Russian elite gathers in St Petersburg
Saudi Arabia and Russia are discussing raising OPEC and non-OPEC oil output by around 1 million barrels per day (bpd), easing 17 months of strict supply curbs amid concerns that a price rally has gone too far, sources familiar with the matter said.
Such an increase would bring compliance with agreed supply curbs down to 100 percent from April's level of around 152 percent, the sources said.
The initial talks are being led by the energy ministers of OPEC kingpin Saudi Arabia and Russia at St. Petersburg this week along with their counterpart from the United Arab Emirates, which holds the OPEC presidency this year, the sources said.
OPEC and non-OPEC ministers meet next in Vienna on June 22-23, and the final decision will be taken there.
The Organization of the Petroleum Exporting Countries and non-OPEC producers led by Russia have agreed to curb output by about 1.8 million bpd until the end of 2018 to reduce global stocks, but the inventory overhang is now near OPEC's target.
The current discussions are aimed at relaxing record-high compliance with the production cuts, the sources said, in an effort to cool the market after oil hit $80 a barrel on concerns over a supply shortage.
VIDEO0:5200:52Can US shale producers fill the OPEC production gap?Worldwide Exchange
While Russia and OPEC benefit from higher oil prices, up almost 20 percent since the end of last year, their voluntary output cuts have opened the door to other producers, such as the U.S. shale sector, to ramp up production and gain market share.
The final production number is not set yet as dividing up the extra barrels among deal participants could be tricky, the sources said.
"The talks now are to bring compliance down to the 100 percent level, more for OPEC rather than for non-OPEC," one source said.
OPEC may decide to raise oil output as soon as June due to worries over Iranian and Venezuelan supply and after Washington raised concerns the oil rally was going too far, OPEC and oil industry sources told Reuters on Tuesday.
However, it is unclear which countries have the capacity to raise output and fill any supply gap other than Gulf oil producers, led by Saudi Arabia, and Russia, the sources said.
"Only a few members have the capability to increase production, so implementation will be complicated," one OPEC source said.
OPECs compliance with the output deal reached unprecedented levels in recent months, meaning it had cut well above target. Falling Venezuelan output due to an economic crisis has helped OPEC deliver a bigger cut than intended.
VIDEO2:5002:50$80 dollar oil not out of the question, says pro. Here's whySquawk Box
So far, OPEC had said it saw no need to ease output restrictions despite concerns among consuming nations that the price rally could undermine demand.
The rapid decline in oil inventories and worries about supplies after the U.S. decision to withdraw from the international nuclear deal with Iran, as well as Venezuelas collapsing output, were behind the change in OPEC's thinking.
Concerns raised by the United States that oil prices were too high also made the exporting group start internal discussions, OPEC sources familiar with the matter have said.
U.S. President Donald Trump, whose country is a major oil producer but is not part of the supply-cutting pact, last month said OPEC had "artificially" boosted oil prices.
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d4cb550f52218d4b7499a5f1f9424e8f | https://www.cnbc.com/2018/05/25/sanctioned-tycoon-deripaska-resigns-as-director-of-his-firm-rusal.html | Sanctioned tycoon Deripaska resigns as director of his firm Rusal | Sanctioned tycoon Deripaska resigns as director of his firm Rusal
Oleg Deripaska, CEO of United Company Rusal, at the SPIEF on June 21, 2012.Andrey Rudakov | Bloomberg | Getty Images
Russian metals tycoon Oleg Deripaska stepped down as a director of his aluminum firm Rusal as part of a choreographed series of steps which he hopes will persuade the U.S. government to rescind sanctions that have crippled his businesses.
Deripaska is now actively preparing the next step: reducing his stake in En+, the group which controls Rusal, to a level where Washington would be willing to remove his businesses from its sanctions blacklist, three sources familiar with the discussions said.
Deripaska and the biggest companies in his empire were included on a U.S. Treasury Department sanctions blacklist in April. Washington said he and fellow tycoons were profiting from association with a Kremlin conducting "malign activities" around the globe.
VIDEO7:5607:56The Trump-Russia ties hiding in plain sightDigital Original
The sanctions paralyzed Rusal's supply chain, scared off many customers, froze Deripaska out of Western debt markets and sent shares in his major companies plummeting.
In an illustration of the damage dealt by the sanctions, Russia's VTB bank said it had become owner of a 9.6 percent stake in En+ after the firm's stocks sank.
The price slump triggered a margin call, forcing a minority shareholder, Singapore's AnAn Group, to relinquish the stake to the lender, a VTB executive said.
In a statement issued in Hong Kong, where it is listed, Rusal said Deripaska, a non-executive director of the company, had stepped down as director.
That came a day after the chief executive and seven board members quit, also in a move to distance the firm from Deripaska and his associates.
Deripaska is seeking to persuade Washington to ease the sanctions on his businesses in exchange for him scaling back his association with his companies.
The key element now is for him to reduce his controlling stake. One source familiar with the discussions said Deripaska had been intent on holding on to control, but has now accepted there is no alternative if his businesses are to survive.
The maneuver under consideration, according to three sources familiar with the discussions, would mirror steps taken by another sanctioned Russian tycoon, Viktor Vekselberg.
His Swiss-based company Sulzer bought some of Vekselberg's shares, prompting the U.S. Treasury Department to say that Sulzer was not at risk from sanctions.
Deripaska currently holds a 66 percent stake in En+. The group declined immediate comment when contacted by Reuters.
VIDEO2:5202:52We are not lending new money to Oleg Deripaska: VTB's KostinSPIEF: Russian elite gathers in St Petersburg
The three sources, who asked not to be named, said that the share buyback maneuver was one of several options under consideration for reducing Deripaska's stake.
The sources said Deripaska's representatives were in discussions with the U.S. Treasury Department's Office of Foreign Assets Control (OFAC), which oversees sanctions, to establish if the maneuver would be deemed enough to remove the companies from the sanctions blacklist.
"It's one of the options being discussed now with OFAC," said one of the sources.
A U.S. Treasury official, asked about any discussions with Deripaska's representatives on him reducing his stake, said OFAC does not generally comment on ongoing discussions about sanctions relief.
"OFAC reviews each request based on the facts and circumstances of the case and individual merits," the official said.
Underlining the depth of the difficulties facing Deripaska's firms, a Russian government source said that Rusal had asked the Russian government to buy some of its output.
Since sanctions hit, stocks of aluminum ingots have been stacking up at at least one Rusal plant, because buyers have canceled orders.
The government source, who spoke on condition of anonymity, said Deripaska had also applied for loans for Rusal from Russian lender Promsvyazbank.
The bank is under the control of the Russian central bank and has been earmarked by the Kremlin to provide finance to sanctioned Russian firms, a task most regular banks will not undertake because of the sanctions risk.
Deripaska also sought state support for automaker GAZ, which is part of his business empire and has also been affected by the sanctions, the government source said.
Russian authorities have approved a loan for GAZ, but no decision has yet been made on the loan request for Rusal, according to the source.
Rusal did not reply to a Reuters request for comment on requests for state help.
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772d2b5c7a63cfa575a1ee5a97370a59 | https://www.cnbc.com/2018/05/25/solo-should-help-summer-box-office-get-its-groove-back-comscore.html | 'Solo' should help summer box office 'get its groove back': ComScore | 'Solo' should help summer box office 'get its groove back': ComScore
Memorial Day weekend moviegoing is off to a good start, if the highly anticipated "Solo: A Star Wars Story" is any indication.
The film, which tells the origin story of the character Han Solo, took in $14.1 million in Thursday previews.
ComScore media analyst Paul Dergarabedian is projecting $130 million to $140 million for the long weekend.
"'Solo' is a great movie to kick off this next part of the summer," he told CNBC's "Power Lunch" on Friday.
A scene from Solo: A Star Wars Story.Source: Disney
If his forecast becomes reality, it would be the first $100 million opener for the holiday weekend since "X-Men: Days of Future Past" was released in 2014, he added.
"Memorial weekend needs to get its groove back because it's a very important weekend," he said. "This is where the month of May passes the baton to June and keeps that momentum going."
Last year, the holiday weekend only brought in $181 million for the entire weekend, compared with other years where it saw sales of more than $300 million, Dergarabedian said. The lackluster response continued through the season, with the summer being the lowest grossing one since 2006.
"The summer season is vitally important and Memorial weekend is a big barometer of how the overall summer will perform," he said.
However, Dergarabedian is much more bullish about this summer, which is already off to a good start with Disney's "Avengers: Infinity War" and Fox's "Deadpool 2."
"If this Memorial weekend is any indicator, we're going to have a really strong summer and there's a lot of big movies on the way," he said.
Those films include new installments in the "Jurassic World" and "Mission: Impossible" franchises. Pixar's "Incredibles 2," Marvel's "Ant-Man And The Wasp," Warner Bros.' "Ocean's 8" and Sony Pictures' "Hotel Transylvania 3" are also set to be released this summer.
VIDEO4:5304:53Can 'Solo' give Disney the force to rally?Options Action
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42b8a40a90b3873e590725d55029f719 | https://www.cnbc.com/2018/05/25/top-vc-deals-kroger-buys-home-chef-paypal-buys-izettle-rover-grail.html | Top VC deals: Kroger buys Home Chef, PayPal buys iZettle and Rover raises $155 million | Top VC deals: Kroger buys Home Chef, PayPal buys iZettle and Rover raises $155 million
Here's a round-up of the most important deals in venture capital from the past two weeks.
VIDEO6:0406:04PayPal to buy iZettle for nearly $2.2 billionSquawk Box
PayPal announced plans to acquire iZettle for $2.2 billion last Friday. The Swedish company makes mobile credit card readers and other payment technology for small businesses. The merger should catapult PayPal into hundreds of thousands of brick-and-mortar storefronts globally and into greater competition with companies like Square. Investors in iZettle included Intel, MasterCard, American Express, Index Ventures and Victory Park Capital. It had raised about $235 million in venture funding.
Source: Walmart
Kroger is buying Home Chef as online meal kit companies continue moving into grocery stores. The deal is valued at $200 million but could go up to $700 million over the next five years in exchange for Home Chef meeting certain milestones around growth of in-store and online meal kit sales, the companies said. Home Chef generated $250 million in revenue last year and posted two profitable quarters. It had raised around $55 million in venture funding from firms including L Catterton, Guild Capital and others.
Former Grail CEO Jeff Huber, who stepped down in August 2017.Source: Business Wire
Grail, a company trying to make early cancer detection faster and more accurate, has raised $300 million in a series C funding round led by Ally Bridge Group and including health investors Sequoia Capital China and genomics database company WuXi NextCODE. Grail spun out of Illumina, a genomic sequencing company, in 2016. The new round brings Grail's total capital raised to $1.5 billion.
VIDEO2:0602:06Cramer’s Exec Cut: The unique position that could help Rover.com dominate the pet care marketMad Money with Jim Cramer
Rover, a site for booking pet sitters and dog walkers, has raised $125 million in a new round of equity funding led by T. Rowe Price, the companies announced on Thursday. Rover also attained a $30 million credit facility from Silicon Valley Bank. In the U.S. pet care market, Rover primarily competes with the dog-walking app Wag, which is backed by SoftBank.
Honor has raised $50 million in a series C round led by Naspers Ventures to expand its network of home-care providers for seniors. Honor aims to help older adults live at home in good health and comfort as long as they possibly can. Honor has raised a total of $115 million from investors including Thrive Capital, 8VC, Andreessen Horowitz and Syno Capital.
ICEYE engineers test hardware on one of the company's satellites in an anechoic chamberICEYE
Finnish space-tech venture ICEYE raised $34 million in a series B funding round led by True Ventures along with Draper Nexus, Space Angels and other advanced tech funds. The company develops micro-satellites for earth observation. Its satellites employ synthetic aperture radar (or SAR) tech, which can generate imagery almost any time it's wanted, even at night or through cloud cover.
Valimail raised $25 million for tech that helps different organizations prevent email "spoofing" or impersonation. Tenaya Capital led the round, joining Shasta Ventures, Flybridge Capital and Bloomberg Beta as Valimail backers. The company's early customers include Uber, Yelp and Fannie Mae among others.
Boston health-tech startup OM1 raised $21 million in a series B funding round. The company uses health data and machine learning algorithms to help doctors and patients compare potential treatments and predict the health outcomes resulting from each. Polaris Partners led the round joined by General Catalyst and 7wire Ventures.
VIDEO3:1503:15A.I. will obliterate half of all jobs, starting with white collar workforce, says ex-Google China presidentSquawk Box
Sinovation Ventures has closed a $391 million AI-focused fund, which will be based in Guangzhou, China. Sinovation was founded by Kai-Fu Lee, the former president of Google China. Lee is famous for, among other things, declaring that robots and AI will obliterate half of all jobs in the next decade.
Former TechCrunch editor-in-chief Alexia Bonatsos has launched a new venture firm called Dream Machine, adding to the ranks of funds founded and run by women.
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014d59714fa69b3462d51c14db8a79fc | https://www.cnbc.com/2018/05/25/us-durable-goods-orders-april-2018.html | US durable goods orders fell 1.7% in April, vs 1.4% drop expected | US durable goods orders fell 1.7% in April, vs 1.4% drop expected
General Electric Co. (GE) clothes washers and dryers are offered for sale at a Home Depot store.Getty Images
New orders for key U.S.-made capital goods increased more than expected in April and shipments rebounded, suggesting business spending on equipment was picking up after slowing down at the end of the first quarter.
The Commerce Department said on Friday that orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, jumped 1.0 percent last month. The increase in the so-called core capital goods orders reversed March's 0.9 percent drop.
Economists polled by Reuters had forecast core capital goods orders rising 0.7 percent last month. Core capital goods orders increased 6.6 percent on a year-on-year basis.
Shipments of core capital goods rose 0.8 percent last month after falling 0.7 percent in March. Core capital goods shipments are used to calculate equipment spending in the government's gross domestic product measurement.
Business spending is being supported by the Trump administration's $1.5 trillion income tax cut package, which came into effect in January. The government slashed the corporate tax rate to 21 percent from 35 percent. A strong economy and rising oil prices are also underpinning investment.
Business spending on equipment slowed in the first quarter after double-digit growth in the second half of 2017.
Last month, orders for electrical equipment, appliances and components increased 2.6 percent after rising 2.4 percent in March. Orders for computers and electronic products gained 1.1 percent while those for fabricated metals jumped 2.0 percent. There were also increases in orders for primary metals.
But orders for machinery fell 0.8 percent after decreasing 3.2 percent in March.
Overall orders for durable goods, items ranging from toasters to aircraft that are meant to last three years or more, dropped 1.7 percent in April as demand for transportation equipment tumbled 6.1 percent. That followed a 2.7 percent increase in durable goods orders in March.
Boeing reported on its website that it received only 78 aircraft orders in April compared to 197 in March.
Orders for motor vehicles and parts rose 1.8 percent last month after advancing 0.6 percent in March.
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eb1d0f6e2317b9a1615beee8a04ad54f | https://www.cnbc.com/2018/05/25/wall-street-exec-backs-train-service-for-mini-trips.html | Wall Street exec backs train service for mini trips | Wall Street exec backs train service for mini trips
VIDEO2:0402:04Fortress' Wes Edens on Brightline rail projectSquawk Alley
Travelers going between Miami and West Palm Beach, Florida, just got more options: a rail service.
Brightline, the only privately owned and operated passenger rail in the U.S., opened its second travel route in Florida on May 19.
The company's owner, Wesley Edens, told CNBC that the railway is perfect for those trips that are "too long to drive, too short to fly."
"We think there are other city pairs that have similar characteristics," he said on "Squawk Alley" Friday. He mentioned possible routes that included Atlanta to Charlotte, North Carolina; Houston to Dallas and St. Louis to Chicago.
"There's many [cities] we think are viable," said Edens, who is also co-founder, co-CEO and principal of Wall Street private equity firm Fortress Investment Group.
"And we think economics are compelling," he said. He said tickets sold out on the new route for its first weekend.
Travel between Miami and West Palm Beach aboard Brightline is beginning with eight daily weekend round trips.
The first leg of service — between West Palm Beach and Ft. Lauderdale, Florida — opened in January 2018. Edens said he envisions the service going all the way from Orlando to Miami, two major travel hubs in the U.S.
"We're really excited," Edens said.
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6116ee10c90688f2cc7496d2ff452c26 | https://www.cnbc.com/2018/05/25/watch-out-for-these-8-retailers--theyre-ready-to-grow-in-the-us.html | Watch out for these 8 retailers — they're ready to grow in the US | Watch out for these 8 retailers — they're ready to grow in the US
Source: Bonobos
Big brands like Toys R Us and Bon-Ton liquidating their businesses might paint a gloomy picture for the retail industry, but smaller brands say there couldn't be a better time to grow.
Direct-to-consumer businesses like Bonobos and Warby Parker have paved the way from online stores to bricks and mortar. Others are following — in droves — and could help fill the glut of vacant real estate on the market in the U.S.
Like Warby Parker and Bonobos, these up-and-coming brands are being cautious, opening locations at a measured pace and setting up primarily where they have large followings online. In turn, mall and shopping center owners are all vying for their business. But many upstart retailers are also generally tougher negotiators than traditional ones and come to real estate owners with unique requests as the companies map out growth.
It's more common today, for example, for lease deals with online retailers to extend for just 18 to 24 months, also offering an optional kick-out clause where the retailer can terminate a contract early, Brandon Hoffman, a senior associate at Ashkenazy Acquisitions, said at the annual ICSC RECon conference in Las Vegas this week. "Trying to explain 10 years to some of these young brands [is hard] because some of them haven't even been around that long."
Growing retailers to keep on your radar include Adore Me, Outdoor Voices and MM.Lafleur. Below are eight brands looking to open more stores across the U.S. as they expand beyond the internet, where many of them started.
Source: Cuyana
Cuyana, the women's clothing brand built around offering shoppers "fewer, better things," is opening its first physical store in New York on Wednesday. It already has two in California. Co-founder Karla Gallardo said the business is "going to be moving at a much faster pace than we have before," setting up shop in "key cities." As for going into U.S. malls, Gallardo said the "setup needs to change for us to enter."
Source: Untuckit
Unlike Cuyana, Untuckit has already established a strong presence in the retail landscape across the country but is still looking to grow. The company has grown its product mix from button-down men's shirts to a women's line and options for kids. CEO and co-founder Aaron Sanandres has said Untuckit should have about 50 stores open by the end of this year. Untuckit is also known to have signed leases with some of the top-tier mall owners, including Simon and GGP.
Source: Rebag
Rebag earlier this year opened its second permanent store in New York — on Madison Avenue — joining its flagship location in SoHo, which debuted last year. The shops, designed like high-end boutiques, are filled with shelves full of second-hand handbags. The business has been running online for roughly four years and initially tested pop-up stores before determining it wanted to settle down for a longer term.
Source: Outdoor Voices
Outdoor Voices, similar to Untuckit, is fairly well established in the world of retail, but the online athletic apparel upstart still has big plans. Founder Tyler Haney told CNBC earlier this year that the retailer plans to open five more shops by the end of 2018. She wouldn't count out having one store in every state in the U.S. one day. The brand has really exploded of late, with some shoppers moving from Lululemon to Outdoor Voices for its pastel-colored leggings.
Source: MM.LaFleur
Women's apparel retailer MM.Lafleur is one example of a company following the "pop-up to permanent" trend. The company had previously run a showroom in New York before signing a long-term lease in the Bryant Park neighborhood earlier this year. MM.Lafleur has amassed a loyal following online, and its new store is known for superb customer service — shoppers schedule appointments ahead of visiting to secure a fitting room.
Source: Adore Me
Adore Me is starting to take L Brands' Victoria's Secret by storm. The lingerie company, born online, is planning to open as many as 300 stores over the next five years. Many of the initial locations are slated to roll out in New York; Adore Me currently has one showroom for NYC customers to try on items.
Source: SuitSupply
Suit Supply runs about 100 stores globally, namely in the U.S., China, the U.K. and Russia. The company opened its first location in the U.S. (having started internationally) about seven years ago but still has its eyes set on growth in North America, a market that's increasingly being flooded with suit sellers like Indochino and other bespoke retailers. It's been reported recently that Suit Supply is embarking on a hiring spree in the U.S. before it opens additional shops.
Source: threadUP
Online clothing thrift store Thredup opened its first store in an outlet center in Texas last year and now has plans for more than 100 locations. The consignment chain is considered a notch up from Goodwill but not as high-end as TheRealReal, which also runs a handful of stores in the United States. According to Thredup CEO James Reinhart, the goal is to make the stores as personable and convenient as possible, accepting returns and making better-educated purchases of inventory for each location. Similar to T.J. Maxx and Ross Stores, these shops will offer a "treasure hunt" experience but with used clothing.
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fb8d76645b19b662584c3a43d7c3b193 | https://www.cnbc.com/2018/05/26/south-korean-president-met-north-koreas-kim-jong-un-saturday.html | Leaders of two Koreas hold surprise meeting as Trump revives hopes of summit with North | Leaders of two Koreas hold surprise meeting as Trump revives hopes of summit with North
South Korean President Moon Jae-in shakes hands with North Korean leader Kim Jong Un during their meeting at the Peace House at the truce village of Panmunjom inside the demilitarized zone separating the two Koreas, South Korea, April 27, 2018.Korea Summit Press | Reuters
South Korean President Moon Jae-in held a surprise meeting with North Korean leader Kim Jong Un on Saturday to ensure a summit between Kim and U.S. President Donald Trump goes off successfully, South Korean officials said.
It was the clearest sign yet that the on-again off-again summit between Trump and Kim is likely to be held as initially agreed, in Singapore on June 12.
The unannounced meeting at the Panmunjom border village between Moon and Kim came a month after they held the first inter-Korean summit in more than a decade at the same venue and declared they would toward a nuclear-free Korean peninsula.
"The two leaders candidly exchanged views about making the North Korea-U.S. summit a successful one and about implementing the Panmunjom Declaration," South Korea's presidential spokesman said in a statement.
Moon, who returned to Seoul earlier this week after a meeting with Trump, will announce details of the meeting with Kim on Sunday morning.
Trump said on Friday that Washington was having "productive talks" with Pyongyang about reinstating the June 12 meeting, just a day after cancelling it.
Politico magazine reported that an advance team of 30 White House and State Department officials was preparing to leave for Singapore later this weekend.
Reuters reported earlier this week the team was scheduled to discuss the agenda and logistics for the summit with North Korean officials. The delegation was to include White House Deputy Chief of Staff Joseph Hagin and deputy national security adviser Mira Ricardel, U.S. officials said, speaking on condition of anonymity.
Trump said in a Twitter post late on Friday: "We are having very productive talks about reinstating the Summit which, if it does happen, will likely remain in Singapore on the same date, June 12th., and, if necessary, will be extended beyond that date."
Trump had earlier indicated the summit could be salvaged after welcoming a conciliatory statement from North Korea saying it remained open to talks.
"It was a very nice statement they put out," Trump told reporters at the White House. "We'll see what happens - it could even be the 12th." "We're talking to them now. They very much want to do it. We'd like to do it," he said.
The comments came just a day after Trump cancelled the meeting, citing Pyongyang's "open hostility."
After years of tension over Pyongyang's nuclear weapons program, Kim and Trump agreed this month to hold what would be the first meeting between a serving U.S. president and a North Korean leader. The plan followed months of war threats and insults between the leaders over North Korea's development of missiles capable of reaching the United States.
Trump scrapped the meeting in a letter to Kim on Thursday after repeated threats by North Korea to pull out over what it saw as confrontational remarks by U.S. officials demanding unilateral disarmament. Trump cited North Korean hostility in cancelling the summit.
In Pyongyang, North Korean Vice Foreign Minister Kim Kye Gwan said North Korea's criticisms had been a reaction to American rhetoric and that current antagonism showed "the urgent necessity" for the summit.
He said North Korea regretted Trump's decision to cancel and remained open to resolving issues "regardless of ways, at any time."
Kim Kye Gwan said North Korea had appreciated Trump having made the bold decision to work toward a summit.
"We even inwardly hoped that what is called 'Trump formula' would help clear both sides of their worries and comply with the requirements of our side and would be a wise way of substantial effect for settling the issue," he said.
North Korea also went ahead with a plan to destroy its only known nuclear site on Thursday, the most concrete action yet since pledging to cease all nuclear and long-range missile tests last month.
Dozens of international journalists left North Korea on Saturday after observing the demolition of the underground tunnels in Punggye-ri, where all of the North's six nuclear tests were conducted including its latest and largest in September.
Trump's latest about-face sent officials scrambling in Washington. Defense Secretary Jim Mattis told reporters diplomats were "still at work" and said Trump had just sent a note out on the summit, which could be back on "if our diplomats can pull it off."
U.S. State Department spokeswoman Katina Adams declined to give details of any diplomatic contacts but said: "As the president said in his letter to Chairman Kim, dialogue between the two is the only dialogue that matters. If North Korea is serious, then we look forward to hearing from them at the highest levels."
White House spokeswoman Sarah Sanders told reporters Trump did not want a meeting that was "just a political stunt."
"He wants to get something that's a long-lasting and an actual real solution. And if they are ready to do that then ... we're certainly ready to have those conversations," she said.
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9b776f4e85a05e253f75c478cf237120 | https://www.cnbc.com/2018/05/26/white-house-spokesperson-pre-advance-team-for-us-north-korea-summit-in-singapore-to-leave-as-scheduled.html | White House says prep team for US-North Korea summit to head to Singapore as scheduled | White House says prep team for US-North Korea summit to head to Singapore as scheduled
Chinese president Xi Jinping holds talks with North Korean leader Kim Jong Un in Dalian on May 7-8 2018.Ju Peng | Xinhua | Getty Images
The White House said on Saturday its pre-advance team for the U.S.-North Korea summit will head to Singapore as scheduled, signaling that the high-stakes meeting President Donald Trump abruptly cancelled just days ago could be back on track.
On Thursday, Trump called off the meeting, even as North Korea made a show of dismantling a nuclear test site. In a letter to North Korea's leader, Trump cited sharp words used by the North Korean officials about America denuclearization demands.
Yet on Saturday, White House press secretary Sarah Sanders said that the team will "prepare should the summit take place."
The prep team departs amid diplomatic whiplash over the fate of a historic summit between the president and North Korean leader Kim Jong Un as part of a high stakes gambit to encourage Pyongyang to give up its nuclear arsenal. If it takes place, the summit would be the first time a U.S. president met with a North Korean leader.
The two men had been scheduled to meet face-to-face on June 12 in Singapore. But on Thursday, the president canceled the meeting. Just a day later, Trump said that his administration had restarted dialogue with North Korea.
Stocks fell after news of the cancellation broke, although equities rebounded from lows somewhat later in the day.
The U.S. and its allies have tried to pressure North Korea into abandoning its nuclear ambitions through crushing sanctions and economic isolation. Doubts about whether the meeting would actually take place swelled as tensions increased between Pyongyang and Washington.
Earlier in the week, North Korea took offense when Vice President Mike Pence said that the communist country could end up like Libya if it doesn't make a nuclear deal with Washington. North Korea also protested South Korea's routine joint military exercises with the U.S.
Geopolitical experts have said that the back and forth over this meeting indicates that the Trump administration doesn't have a clear strategy on how to deal with Pyongyang, something Trump himself sharply rejected on Saturday.
The Wall Street Journal, citing a White House official, reported that Trump ordered his letter to Kim canceling the meeting released without first telling U.S. allies. The newspaper said that the move was intended to avoid leaks.
Allies blindsided by the move include South Korea, which played a pivotal role in bringing both sides to the table. Trump's letter left Seoul scrambling to decipher its meaning and intent.
But in a Saturday tweet, the president pushed back on the notion that his administration lacked a coherent North Korea strategy.
@realDonaldTrump: Unlike what the Failing and Corrupt New York Times would like people to believe, there is ZERO disagreement within the Trump Administration as to how to deal with North Korea...and if there was, it wouldn't matter. The @nytimes has called me wrong right from the beginning!
— CNBC's Jacob Pramuk contributed to this report.
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fd20355fe1a1cdbfe5bdfd5ebc42a51d | https://www.cnbc.com/2018/05/27/china-to-host-iranian-president-amid-nuclear-deal-doubt.html | China to host Iranian president amid nuclear deal doubt | China to host Iranian president amid nuclear deal doubt
Chinese President Xi Jinping and Iranian President Hassan Rouhani at a meeting at Saadabad Palace in Tehran, Iran on January 23, 2016.Anadolu Agency | Getty Images
China will host Iranian President Hassan Rouhani next month at a regional summit in a Chinese coastal city, the country's foreign ministry said on Monday, as major power scramble to save Iran's nuclear deal after the United States pulled out.
Rouhani will pay a working visit to China and attend the summit of the China and Russia-led security bloc the Shanghai Cooperation Organisation, the ministry said.
It did not give exact dates for his visit, but the summit is scheduled to be held on the second weekend of June in the northern Chinese city of Qingdao.
Iran is currently an observer member of the Shanghai Cooperation Organisation, though it has long sought full membership.
Russia has previously argued that with Western sanctions against Tehran lifted, it could finally become a member of the bloc which also includes four ex-Soviet Central Asian republics, Pakistan and India.
The 2015 agreement between Iran and world powers lifted international sanctions on Tehran. In return, Iran agreed to restrictions on its nuclear activities, increasing the time it would need to produce an atom bomb if it chose to do so.
Since U.S. President Donald Trump withdrew the United States this month, calling the agreement deeply flawed, European states have been scrambling to ensure Iran gets enough economic benefits to persuade it to stay in the deal.
China has also strongly supported the deal and is one of its signatories.
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2bd1863edc60233e00d9d321c31cce52 | https://www.cnbc.com/2018/05/27/fed-relying-on-biased-data-its-not-an-a-economy-jim-bianco-warns.html | Fed relying on biased data that makes 'B-minus economy' look like an 'A+' : James Bianco | Fed relying on biased data that makes 'B-minus economy' look like an 'A+' : James Bianco
VIDEO2:1502:15Econ survey data misleading Fed into thinking it's an 'A+' economy, veteran market researcher warnsTrading Nation
A veteran market researcher is out with a warning — saying the Federal Reserve is relying too heavily on economic surveys skewed by social media to mold their policies.
According to Bianco Research President James Bianco, most economists mistakenly believe that leading indicators are signaling an "A+" economy that can withstand rising interest rates.
"It's more like a B- economy," he told CNBC's "Trading Nation" on Friday. "It's not this screaming home run that everybody thinks it is based on the survey data."
Bianco said social media is creating the bandwagon effect among survey respondents, a psychological phenomenon characterized by people following the herd.
"The advent of social media is allowing us basically to be inundated with financial news or economic news," he said, adding the bulk of the news about the world's largest economy has been largely favorable.
"When somebody is asked 'what do you think about the economy,'' they are not answering 'what do you think about the economy,' Bianco said. "They are answering 'What have you read about the economy?'"
Bianco fears the Fed will make a policy error based on respondents' answers.
"Economists like at the Fed say 'Wow, look at that data. It's even better than we thought. We have to raise rates even faster,'" he said, adding that the tightening could derail the bull market.
"The 10-Year [yield] could very well be at 3 percent by the end of next year with a 3 percent funds rate," Bianco said. "[That's when] you get an inverted yield curve."
He suggested Fed officials should evolve and begin looking at other types of data. A solution would be favoring Google Trends, according to Bianco. His research suggests it's a far more accurate predictor of how the economy is faring.
"We bare our souls to Google," Bianco said. "If we lose our job, we type in 'I lost my job.' You can search that stuff and what you find is you're right back to my B- argument."
VIDEO3:1503:15Jim Bianco weighs in on what data the Fed should really be examiningTrading Nation
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a5c6735a303834c5b2fc0dd0fb939d65 | https://www.cnbc.com/2018/05/27/how-to-make-an-animated-gifs-on-your-iphone.html | How to make animated GIFs from your photos on the iPhone | How to make animated GIFs from your photos on the iPhone
VIDEO0:5800:58How to turn your photos into animated GIFs on your iPhoneDigital Original
Animated GIFs have gained popularity recently. So much so that Google recently acquired GIF platform Tenor, which creates easy-to-share GIFs. But it's actually quite easy to build customized animations from your own photos, especially if you have an iPhone 6S or newer device. Here's how.
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