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7e46ea21e2f893c5f04be61ec5b08d50 | https://www.cnbc.com/2017/04/20/as-shandy-season-approaches-leinenkugels-celebrates-150-years-with-a-new-beer.html | As Shandy season approaches, Leinenkugel’s celebrates 150 years with a new beer | As Shandy season approaches, Leinenkugel’s celebrates 150 years with a new beer
Dick Leinenkugel, President, Jacob Leinenkugel Brewing Company; (right) Dr. Michael Möller, Director, Hofbrau Munchen.Source: Jacob Leinenkugel Brewing Company.
One of America's oldest breweries is going back to its roots to celebrate a milestone anniversary. In a nod to its German heritage, the Jacob Leinenkugel Brewing Company is collaborating with Hofbrau Munchen, the German brewery founded in 1589, to create "Leinenkugel's Anniversary Lager," in celebration of its 150th anniversary this year. As part of a yearlong celebration, the beer will be brewed both in Germany and in Chippewa Falls, Wisconsin. "It'll be the first time Leinenkugel's has been brewed in Germany for…seven generations, when my great, great, great grandfather last brewed beer," Dick Leinenkugel, president of Jacob Leinenkugel Brewing Company and a fifth generation family member, told CNBC recently.
While the milestone anniversary puts the family's long-tradition front and center, history has never been lost on Dick Leinenkugel who often reflects on the sacrifices made by his ancestors. He invoked Jacob Leinenkugel's daughters, who mortgaged their homes so they could get the brewing equipment up and running again after prohibition. Then there is his father, William, who presided over the brewery for over 40 years – including during the 1970's, when many smaller family owned and regional brewers were forced to close. At the time, larger breweries increased their scale and distribution footprint, squeezing out many of the smaller players. "I think about what my dad did to compete during those times, making pennies on the case, but always investing back into the brewery in terms of quality and people, and keeping the local market strong," said Leinenkugel. "That's what really set us up for success now."
Dick Leinenkugel, President, Jacob Leinenkugel Brewing Company.Source: Jacob Leinenkugel Brewing Company.
In 1988, the family made the decision to sell to Miller Brewing, now known as MillerCoors, a move which likely saved the brewery from going out of business. Fast forward nearly three decades and to a new generation of Leinenkugel family members working in the brewery, the brand is enjoying a resurgence. A big part of that is its successful line of Shandy, beer that's mixed with a soft drink.
The brew is enormously popular during the all-important summer sales season, and Leinenkugel has all but cornered that market. "Nine out of every ten Shandies consumed in the United States have Leinenkugel on the label," said Leinenkugel. "Early indications are we're going to exceed our summer Shandy plans this year." In addition to the continued strength of the flagship Summer Shandy brand which was first introduced in 2007, a grapefruit Shandy brand extension has also proven to be a hit. "In the first year we released it as package it became the number one craft beer brand in 2015 " said Leinenkugel. So while the Jacob Leinenkugel Brewery Company celebrates its past and the Leinenkugel Shandy remains a current summer success, Dick Leinenkugel is looking toward the future.
"I'm just a caretaker of the brewery and the brand, that's the way I view it and when you look at the four generations that came before me and how much tougher they had it than I do, I'm really humbled," he said. "I'm just looking forward to getting the brewery set up to have another great 150 years."
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f72b07afbef11776062bea4e53929447 | https://www.cnbc.com/2017/04/20/cargill-ceo-on-gm-food-and-investments-in-food-production-in-asia.html | VIDEO13:0113:01Cargill CEO on the agri-business' transformationManaging Asia
American agri-business Cargill has its sights set on moving up the food chain and focusing on the aquaculture and meat segments, with Asia expected to be a key market.
Since the company spent $1.5 billion acquiring Norwegian salmon-feed manufacturer EWOS in 2015, it has realigned its portfolio to focus on its core food production business, Cargill Chairman and CEO David MacLennan told CNBC's "Managing Asia."
"(T)he rate of growth of fish consumption in the world greatly exceeds pork consumption in the world. We see that trend and we're getting on it," MacLennan said.
A Cargill logo is pictured on a truck transporting Provimi Kliba and Protector animal nutrition products near the factory in Lucens, Switzerland, September 22, 2016.Denis Balibouse | Reuters
MacLennan expressed interest in the prospects Asia offers, adding that Cargill has made recent investments in the region. Among them are a chocolate facility in Indonesia, feed mills in Vietnam and South Korea, and joint ventures in the chicken business in the Philippines and Indonesia, he said.
"We're always interested in Asia. I mean, what a great region it is in terms of … this is where the mouths are, the stomachs are. People are going to eat more and better food, so we've a lot of investments in Asia in the last couple of years," MacLennan said.
As for controversy surrounding genetically-modified food, Cargill is attempting to satisfy both ends of the spectrum by acknowledging the growing group of people against genetically-modified organisms (GMOs).
VIDEO1:5301:53How agri giant Cargill deals with protectionismManaging Asia
"It's a technical shift in your supply chain, but also an emotional shift. Meaning, acknowledging that there's people that believe GMOs are unhealthy. We don't agree with that: GMOs are a key tool for sustainability," MacLennan said.
"But nonetheless, there's a growing group of consumers that want to consume non-GMO containing foods," he acknowledged.
The company reportedly drew the ire of farmers after it was linked to the Non-GMO Project, a non-profit anti-GMO group. Cargill responded by reaching out to farmer groups to discuss how the company could better acknowledge how it remains in favor or GMOs.
"We don't believe in attacking GMOs as a technology. It's a valid and legitimate technology … At the same time, there are some consumers that don't want it," MacLennan said.
"I don't think the two have to be in conflict."
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609a1a82b6fd6e0a73966e586cee6911 | https://www.cnbc.com/2017/04/20/commerce-secretary-ross-demand-for-steel-will-jump-if-us-gets-into-major-conflict.html | Commerce Secretary Ross: Demand for steel will jump if US gets into 'major conflict' | Commerce Secretary Ross: Demand for steel will jump if US gets into 'major conflict'
VIDEO5:2805:28Sec. Ross: We get accused of being protectionist, but other countries are far worseHalftime Report
Commerce Secretary Wilbur Ross told CNBC on Thursday that President Donald Trump's plans for defense spending will require increased American steel production, while he called other steel-producing countries more "protectionist" than the U.S.
"We now really have to defend ourselves, and we especially need to since the need for steel is already growing by the military before we have a major buildup," Ross said, adding that if the U.S. ever gets into a "major conflict," demand for steel would "go way up."
The commerce secretary, speaking to CNBC after a White House meeting with steel industry executives, called China, Japan and the European Union far more "protectionist" on these policies than the U.S.
The White House isn't contemplating ending its steel imports to the U.S., Ross clarified, as Trump launched a probe Thursday on foreign infrastructure production.
Many leaders in the steel industry rallied behind President Trump's action to sign a directive, which asks for a speedy probe into whether imports of foreign-made steel are hurting U.S. national security.
After Trump's meeting Thursday afternoon with top management in the steel industry, many infrastructure stocks were trading in green territory and tracking for their best days in weeks.
For example, U.S. Steel climbed near 8 percent, and AKS Steel Holdings was trading on pace to top its best day since April 7, when the stock gained 8.36 percent. The materials sector of the S&P 500 was up more than 1 percent on this news.
President Trump has pledged "big" infrastructure spending, although the Republican-controlled Congress has not seen Trump's infrastructure spending pledge as a priority amid efforts to repeal the Affordable Care Act and pass tax reform.
Trump promised to spend $1 trillion on infrastructure during his campaign, and some Democrats have signaled that is an issue on which they can cooperate with Trump.
— CNBC's Jacob Pramuk contributed to this report.
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ddd6597d31e36e60dea1fa92638a6bb7 | https://www.cnbc.com/2017/04/20/hacking-investigation-trump-looks-like-hell-miss-another-deadline.html?__source=newsletter%7Cyourmoneyyourvote | Trump looks like he'll miss another deadline on another promise | Trump looks like he'll miss another deadline on another promise
VIDEO0:4500:45Trump fails to deliver on another promiseNews Videos
President Donald Trump apparently will miss another deadline for another goal he once confidently touted for his administration.
In January, Trump promised to "appoint a team to give me a plan" to combat cyberattacks, and to do so within 90 days of taking office. Thursday marks the 90th day of his administration, and so far, Trump has appointed no team.
Trump has already missed other deadlines he personally set, such as a plan to defeat the so-called Islamic State that he said his generals would have within his first 30 days in office. Instead, the United States does not appear to have substantively altered the strategy that was put into effect against ISIS by the Obama administration.
Trump's promise to assemble the cybersecurity team came after he was briefed on cyberattacks from abroad, including those that the U.S. intelligence community has concluded were part of a Russian effort to influence the 2016 election. In a Jan. 13 tweet, Trump repeated his pledge to "have a full report on hacking within 90 days."
Trump tweet
He has not announced a team, and it does not appear the effort is on the White House's agenda Thursday.
The White House did not immediately respond to a request to comment.
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6f161cf628dc635872434d979e1fd98e | https://www.cnbc.com/2017/04/20/hedge-fund-demands-buffalo-wild-wings-get-rid-of-ceo.html | Activist investor takes another swing at Buffalo Wild Wings, calls for CEO to resign | Activist investor takes another swing at Buffalo Wild Wings, calls for CEO to resign
Sally Smith, CEO, Buffalo Wild WingsScott Mlyn | CNBC
Activist investor Marcato Capital Management fired its latest salvo Thursday against Buffalo Wild Wings, calling for CEO Sally Smith's removal, according to an SEC filing.
Buffalo Wild Wing's stock rose more than 4.2 percent following the news.
Marcato, which owns 6.1 percent of the restaurant chain's outstanding stock, sent a letter to shareholders that also calls for other changes.
"[U]nder current management, shares of Buffalo Wild Wings' common stock have underperformed virtually every relevant benchmark on a 1-year, 3-year, and 5-year basis," Marcato founder Mick McGuire wrote in a release. "Despite declining same-store sales, lackluster margins, a deteriorating guest experience and poor capital deployment decisions, management continues to fight tooth-and-nail to maintain the status quo."
McGuire said because the board has "blindly stood by management," Smith should be replaced in order to restore "oversight and accountability."
The company defended Smith's performance, saying she has helped generate huge returns for shareholders.
Marcato has been pushing since July for Buffalo Wild Wings to franchise more of its restaurants. In February, it nominated McGuire and three others directors to the board.
However, in late March, Buffalo Wild Wings picked only one of Marcato's suggestions — Sam Rovit, who has 20 years of experience in the food service industry.
The gesture was not enough for Marcato. The firm said last month that B-Dubs did "not go far enough" and had not addressed the firm's proposed operational improvements and business model modifications, which it says will drive value for shareholders.
McGuire in March also published a presentation for investors that argued the executives' interests were not closely aligned with the chain's shareholders. McGuire noted that none of the Buffalo Wild Wings executives owns shares in the company and only one director has ever executed an open-market purchase of the stock.
He also argued that B-Dubs' management team has been using equity incentive plans to purchase shares at a lower price and then sell them on the market to make cash.
"As shareholders, we deserve a Board and management team with real skin in the game that will take action to strengthen the Buffalo Wild Wings brand, recapture operating margin opportunities, allocate capital intelligently, and employ an efficient franchising plan," McGuire said.
The company responded with this statement:
"Over the past decade, Buffalo Wild Wings' performance has consistently led the casual dining industry, delivering superior results to our shareholders while providing a differentiated guest experience to our customers. Under CEO Sally Smith's leadership since its IPO in 2003, the Company has generated total returns for shareholders of 1697%. In fact, $10,000 invested in Buffalo Wild Wings stock at the IPO was worth more than $175,000 on March 31, 2017. The Company has continued to innovate and pursue cost savings initiatives amid difficult market conditions for the sector and remains focused on creating sustainable value for our shareholders."
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30c9406138b46cac535b5c6f681ad66e | https://www.cnbc.com/2017/04/20/iphone-7-plus-beats-samsungs-galaxy-s8-in-benchmarks.html | iPhone 7 Plus is still more powerful than Samsung’s Galaxy S8, according to one set of tests | iPhone 7 Plus is still more powerful than Samsung’s Galaxy S8, according to one set of tests
VIDEO1:0201:02iPhone 7 Plus beats out Galaxy S8 in new testsNews Videos
The iPhone 7 Plus is more powerful than Samsung's international Galaxy S8, according to some tests performed by Ars Technica.
's iPhone 7 Plus beat out the new international Galaxy S8 in a multitude of tests that are designed to measure performance for single core processing, battery life and browser tests. Before we go on, know that these tests benchmarked Samsung's international Galaxy S8, which uses the company's in-house Exynos processor and not 's brand new Snapdragon 835 chip. The latter is included in the US models.
Without getting too technical, the iPhone 7 Plus appears to have handily beat the Galaxy S8 in single core tests. A single processing core is used when the phone isn't performing many tasks at once or is attempting to save battery life. The Galaxy S8 beat out the iPhone 7 Plus in multicore tests, however, showing it has the required extra muscle for running more demanding apps, like the latest games or playing 4K video.
The iPhone 7 also beat out the Galaxy S8 in battery life tests, though there wasn't a comparison to Samsung's Galaxy S8+ which has a larger capacity battery pack. The iPhone 7 Plus again took the crown in several tests designed to measure browser performance and graphics.
Much of this might sound like a bunch of gibberish unless you're a smartphone enthusiast. Here's why this matters: the tests tells us that Apple's iPhone 7 Plus A10 processor still holds up very well against the best chips developed in-house by Samsung, which is impressive considering the iPhone 7 Plus is 7 months old.
Keep in mind this doesn't mean that Samsung's phone is slow or that you shouldn't upgrade from another smartphone. It's still very quick and we doubt the regular consumer will notice the differences that these benchmarks point out.
The Galaxy S8 also has other bonuses the iPhone 7 Plus does not, like Qualcomm's new modem which supports Gigabite LTE networks. Carriers are starting to roll the new networks out this year and they'll promise much faster data speeds than what you'd get with a standard 4G LTE smartphone like the iPhone 7 Plus. I'd choose support for newer networks than faster browser rendering speeds any day.
You can read more at Ars Technica.
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750bb66db387dc88eb928154ac6c463b | https://www.cnbc.com/2017/04/20/nintendo-snes-mini-release.html | Nintendo is reportedly releasing a mini SNES in time for the holidays | Nintendo is reportedly releasing a mini SNES in time for the holidays
Nintendo is planning to launch a mini version of its Super Nintendo Entertainment System or SNES in time for the holiday season at the end of the year, Eurogamer reported on Wednesday.
Development of the device is already underway, Eurogamer said citing sources, with the console expected to be one that plugs directly into a TV and is pre-installed with several games.
The SNES had a number of popular games including "Super Mario World" and "Donkey Kong Country".
It follows on from the success of NES Classic Mini which it released last year. The console was a version of a classic NES that could be plugged into a TV and was pre-installed with 30 games. The $59.99 console was quickly sold out because Nintendo only made a limited number of the console. It was supposed to be a one-off production run.
As a result, some NES Classic consoles are on eBay for as much as $5,000.
Nintendo confirmed this week that it had discontinued the NES Classic Mini worldwide. The Japanese gaming giant is currently riding a wave of success thanks to hits such as the "Pokemon Go" mobile game last year and the NES Classic Mini.
The company was not available for comment when contacted by CNBC.
It is hoping the nostalgia around the brand can help boost sales of its newest console – the Nintendo Switch. The New York Times reported that Switch sales in its first two days in the Americas exceeded sales for any other system in Nintendo's history. Nintendo has sold 2.4 million systems in its first month and a half of sales, according to a recent report from analyst firm Superdata.
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6da5a4df2866b8af9b5dac6120077c8f | https://www.cnbc.com/2017/04/20/tesla-recalls-53000-model-s-and-model-x-cars-for-parking-brake-issue.html | Tesla recalls 53,000 Model S and Model X cars for parking brake issue | Tesla recalls 53,000 Model S and Model X cars for parking brake issue
VIDEO3:1503:15Analyst: Here's why Tesla recall is a non-event Power Lunch
Tesla is voluntarily recalling 53,000 Model S and Model X vehicles over a potential issue that could prevent the parking brake from releasing.
The company issued an update Thursday saying electric parking brakes installed on Model S and Model X vehicles built between February and October 2016 "may contain a small gear that could have been manufactured improperly by our third-party supplier."
Shares dropped just over 1 percent on the news.
"We do not believe this issue could ever lead to a safety concern for our customers, and we have not seen a single accident or injury relating to it," said Tesla on its website Thursday. "However, in order to be overly cautious, we are going to be proactively replacing these parts to ensure that no issues arise."
If the gear were to break, the brake would remain engaged, but the parking brake would also be stuck in place.
Tesla estimates that only 5 percent of the cars it is recalling will be affected and that the replacement will take about 45 minutes.
The company said it would soon send out official recall notices by mail to owners. the copmany will begin replacing parts immediately, and plans to have parts for all affected vehicles by October 2017.
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76cac37ed6927dfc626eeb617a0f7f78 | https://www.cnbc.com/2017/04/20/the-market-suddenly-doubts-the-fed-will-raise-rates-twice-more-this-year.html | The market suddenly doubts the Fed will raise rates twice more this year | The market suddenly doubts the Fed will raise rates twice more this year
VIDEO2:1102:11Lagarde: If Fed raises rates too fast, we will have risksSquawk on the Street
A recent string of less-than-stellar economic news has injected some uncertainty into whether the Fed will deliver a steady diet of rate increases ahead.
In fact, current trading in the fed funds futures market indicates that the U.S. central bank will not be able to enact the two additional rate hikes that officials have indicated are on the way this year.
As of Thursday afternoon, market indications were for a 57.3 percent chance of a quarter-point increase in the benchmark short-term rate in June, while there's just a 41.1 percent probability that it would move again in December. The June probability was less than 50 percent on Wednesday but rose Thursday on the heels of better-than-expected 0.4 percent growth in the leading economic indicators barometer and a stock market rally.
Those expectations are counter to the past couple of months, when investors grew more comfortable with the idea that the Fed would be able to lift rates off their crisis-era lows. The first rate hike since mid-2006 happened in December 2015, with the next one not coming again until December 2016. The policymaking Federal Open Market Committee hiked again in March, with officials then pointing to a total of three moves for the year.
However, the 2017 projection came amid higher hopes for growth and a belief that inflation and labor market slack were progressing toward the Fed's goals.
Christine Lagarde, managing director of the International Monetary Fund, said the Fed will have to proceed carefully amid the swirling crosscurrents.
"If it moves too fast, that's where we might have risk, because capital flows will move back from emerging markets into the U.S. market, and that could precipitate some disorderly adjustments in those other countries," Lagarde told CNBC in a live interview. "Let's hope it proceeds in a smooth, well-communicated and orderly manner, as fact-based as possible, as has been the case so far."
The economic signals of late have not been conducive to a central bank looking to normalize policy after years of cheap money.
Since the last FOMC meeting, a key inflation indicator fell for the first time since January 2010, the March nonfarm payrolls report significantly missed Wall Street expectations and the Atlanta Fed now expects the economy to show growth of just 0.5 percent for the first quarter.
On top of that, President Donald Trump's pro-growth agenda has hit a bit of a wall in Congress.
"If you look at the data in the first quarter, it's suggestive of a slowing down in the economy," said Quincy Krosby, market strategist at Prudential Financial. "There's a fear that we're losing momentum."
However, one prominent economist thinks traders are getting it wrong on rates.
"Market pricing of future Fed rate hikes has declined in the wake of weaker GDP and inflation data, signals of an earlier Fed balance sheet runoff and reduced optimism on fiscal easing," Jan Hatzius, chief economist at Goldman Sachs, said in a note. "But markets may be underestimating three factors pointing toward continued steady hikes."
Janet YellenGary Cameron | Reuters
Specifically, Hatzius cites easing financial conditions, continued optimism that the Trump agenda will be put into action at some point and a tightening labor market that will push the Fed to act.
Indeed, the Chicago Fed's financial conditions index is showing the loosest readings since around December 2014. The Atlanta Fed's wage growth tracker, while falling from October through February, ticked back up in March to show a 3.4 percent gain.
And the Fed broadly, in its periodic Beige Book report Wednesday on financial conditions across the country, mentioned "wage increases" a dozen times, and always in conjunction with upward pressure to varying degrees.
Trump's success in Congress remains, however, the wild card in the bunch. However, Hatzius holds a view recently also espoused by Moody's Analytics economist Mark Zandi that, at the very least, the most growth-stifling parts of the Trump agenda have become less threatening.
"While the growth-positive aspects of the Trump agenda have hit rougher air, the growth-negative aspects also look less concerning," Hatzius said. "In particular, the specter of protectionism — a major source of concern during the transition especially for trade with China and Mexico — has clearly receded in recent months."
Still, the perception persists that the Fed is overestimating the economy's growth capability.
David Rosenberg, senior economist and strategist at Gluskin Sheff, believes the U.S. is in a late-stage expansion that will be threatened by further Fed tightening.
"Unless you think the business cycle has been repealed and that there will be no repercussions from the Fed tightening into a 3 percent to 4 percent nominal GDP growth environment, or that we will see gridlock end in Washington and all the Trump pro-growth policy proposals coming to fruition, then there is little reason to believe that the U.S. economy will break out of its current malaise," he said.
Fed Chair Janet Yellen, who has maintained a tight consensus during her time leading the FOMC, likely will remain focused on inflation pressures and the jobless numbers.
In fact, low GDP numbers haven't bothered the Yellen Fed very much. The December 2015 hike came amid 0.9 percent quarterly growth, while the March move came in a period also unlikely to eclipse a 1 percent gain.
Watch: Fed's Beige Book highlights
VIDEO1:5001:50Fed: Economy growing in all 12 districtsPower Lunch
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f0abf9a6e296f1734b437f46e7e614d8 | https://www.cnbc.com/2017/04/20/the-us-cant-afford-trumps-1-trillion-infrastructure-spending-warns-former-fed-chief-greenspan.html | The US can't afford Trump's $1 trillion infrastructure spending, warns former Fed chief Greenspan | The US can't afford Trump's $1 trillion infrastructure spending, warns former Fed chief Greenspan
VIDEO1:4001:40The US can't afford $1 trillion infrastructure spending, warns GreenspanSquawk on the Street
President 's call to spend $1 trillion updating the nation's systems is missing the key element of how to pay for it, former Chairman told CNBC on Thursday.
"The question is who is financing this trillion dollars in infrastructure," Greenspan said on "Squawk on the Street," from the sidelines of the spring meeting of the IMF and the World Bank in Washington.
"At the moment, we can't afford it," he said, arguing the U.S. has "too much debt."
Infrastructure projects have too many upfront costs, Greenspan said. "Infrastructure-type of spending is of delayed impact."
"If you go out and build a bridge, for example, you don't get any revenues from that bridge until it's complete," he explained.
The White House has said it plans to leverage public-private partnerships to defray costs for the president's infrastructure plans. But most of the details on how to pay for them have not been hashed out yet.
Greenspan told CNBC on Thursday that the best way to pay for cutting taxes is to reduce spending on ballooning entitlements such as Social Security and Medicare.
the prospect of getting rid of the has been a driver of higher stocks and would continue to be.
Starting in 1987, the 91-year-old economist led the Fed for 19 years under four presidents, from Ronald Reagan through George W. Bush.
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c10f8e3e33b26a0fadaeb0d63b1aaa67 | https://www.cnbc.com/2017/04/20/this-treasury-bond-etf-trade-is-hot-again.html | ETF Strategist | ETF Strategist
Buying long-dated U.S. Treasury ETFs was a pretty unpopular idea late last year. That tide now seems to be turning.
You could say a lot has changed in a few short months. Last fall, investors were faced with the end of the 30-year bond rally, and interest rates were expected to rise again, putting pressure on the value of bonds. More importantly, a new U.S. administration was coming in, with the promise of pursuing domestic growth policies that would fuel a stock market rally. It was all about risk-on.
Getty Images
A fund like the iShares 20+ Year Treasury Bond ETF (TLT) bled more than $850 million to net redemptions in less than two months following November's presidential election. As money was coming out of the fund, TLT was dropping — to the tune of some 8.3 percent in losses in that same period.
More from ETF.com:Should you sell in May and go away?'SHE': Gender diversity and smart beta meetNiche China ETFs outperform giants
Here's a look at the performance of TLT in the past year (relative to the S&P 500) — note the plunge following the U.S. presidential election in November. There was a huge divergence in direction:
Coming into 2017, speculators mounted a short position in U.S. Treasury futures that hit a "historic high" in the first quarter of this year, according to DoubleLine's latest quarterly report. By mid-March, 10-year Treasury yields closed at a high of 2.61 percent — its highest closing level since September 2014.
And now, a month later, yields on 10-year Treasuries are testing the 2.2 percent level, down more than 40 basis points from their March high (bond yields fall when prices rise). TLT has seen net creations of more than $700 million year-to-date, half of which has come in the last month alone as the fund rallied some 5.5 percent. Year-to-date, TLT now has gains of about 4.1 percent.
What's happening
The risk-off trade is popular again.
Here's why: That euphoria over the prospects for regulatory reform and U.S. growth is now being discounted by the market. Confidence in the government's ability to actually implement reform and effect change is fading ever since the administration failed to revamp health-care regulation. That has contributed to a weakened dollar.
Mounting geopolitical risks is another key driver of demand for long-dated Treasuries. President Trump's growing focus on foreign policy, and his recent actions with regard to Syria and North Korea, have investors increasingly on edge.
Guggenheim's CIO Scott Minerd said Monday the drop in yields and rising demand for bonds result from "[Washington] D.C.'s struggle to pass pro-growth policies and rising geopolitical/military risks."
Massive short-bet unwinding
According to Minerd, we could see 10-year Treasury yields drop to 1.5 percent "or lower" by this summer if this trend stays in place. That would amount to a 32 percent decline in rates from current levels, and the lowest yields we've seen since last summer.
Minerd isn't alone. DoubleLine's Jeffrey Gundlach had been calling for a drop in yields and a test of the 2.2 percent level since earlier this year. The unwinding of that massive short position has something to do with it.
"With investors piling on to a one-sided trade, an unwinding of these positions could only add to demand," reads DoubleLine's most recent report. "As investors began to take down short positions through March, we have also kept an eye on inflation as it appears to be peaking out over the month of April, especially as the base effects from energy begin to roll off."
Inflation peaking
The firm's prediction includes inflation, as measured by the Consumer Price Index, peaking around 2.9 percent before turning lower into the summer months, "a move that could also be supportive of lower rates over the near term."
What could push yields higher instead? A rate hike in June, if it's accompanied by strong GDP data, DoubleLine said. The Federal Reserve raised rates again in March, and the market expects at least two more rate hikes this year. It remains to be seen whether June will bring one of them — the market is currently pricing a 50 percent chance.
TLT tracks a market-weighted index of U.S. Treasury bonds with remaining maturities of 20 years or more. The longer-dated the bond is, the more sensitive it is to interest-rate hikes. TLT has effective duration of about 17.5 years.
The ETF has $6.1 billion in assets and is the biggest and most liquid long-term U.S. Treasury fund on the market.
— By Cinthia Murphy, ETF.com
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b7f1809838e5398a3278ed7bdb30ede8 | https://www.cnbc.com/2017/04/20/trump-i-think-well-get-both-a-vote-on-health-care-and-keeping-government-open-next-week.html | Trump: 'I think we'll get both' a vote on health care and keeping government open next week | Trump: 'I think we'll get both' a vote on health care and keeping government open next week
VIDEO3:2203:22Trump says 'we'll get both' a vote on healthcare vote and keeping government openClosing Bell
Congress may have to choose next week between keeping the government open and voting to repeal Obamacare — but President Donald Trump thinks it can do both.
"We have a good chance of getting (health-care legislation passed) soon. I'd like to say next week, but I believe we will get it and whether it's next week or shortly thereafter," Trump said during a Thursday joint news conference with Italian Prime Minister Paolo Gentiloni. "As far as keeping the government open, I think we want to keep the government open, don't you agree? So, yeah, I think we'll get both."
Congress returns from recess next week, with only days before the current resolution funding the government expires on April 28. Ahead of the scramble to keep the government running, reports Thursday indicated that the White House may push for a vote on a revised plan to replace the Affordable Care Act when Congress comes back.
Tackling both complex issues in one week would likely prove a daunting task.
There is not yet legislative text for the revised health-care proposal, and no vote is scheduled for next week, so far, three GOP aides told CNBC. It is unclear if this health-care plan could garner the votes needed to clear the House or the Senate.
A Republican congressional representative who spoke to CNBC expects Congress to avoid a government shutdown next week. CNBC previously reported that Republicans, who hold majorities in both chambers of Congress, would be willing to adopt a temporary measure keeping the government running for about another week while lawmakers continue budget negotiations.
An attempt to replace the ACA failed in dramatic fashion last month as House Republicans struggled to balance the concerns of conservative and moderate members of their caucus. Trump and House leaders initially signaled they would move to a tax reform bill, but eventually started to seek tweaks to push a heath-care plan through before pursuing a tax overhaul.
"The plan gets better and better and better and it's gotten really, really good," Trump said Thursday.
Trump contended that Republicans never gave up on pursuing health-care legislation. After the bill failed last month, Trump told reporters, "I would say that we will probably start going very, very strongly for the big tax cuts and tax reform."
— CNBC's John Harwood and Kayla Tausche contributed to this report.
Watch: Highlights of press conference with Trump and Italian PM
VIDEO1:2501:25President Trump & Italian PM joint news conference: HighlightsClosing Bell
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58ad33b87229dacb74c460361c8dc646 | https://www.cnbc.com/2017/04/20/trump-to-sign-two-financial-related-executive-orders-sources.html | Trump to sign 'financial-related' executive actions on Friday: Sources | Trump to sign 'financial-related' executive actions on Friday: Sources
VIDEO2:3102:31Mnuchin hints at Trump executive action on tax regulation Squawk Box
President Donald Trump is expected to sign multiple "financial related" executive actions at the Treasury on Friday, sources told CNBC.
The White House confirmed that one of the items will be a presidential memorandum on orderly liquidation authority, which allows regulators to seize and wind down a failing bank.
The provision was part of Dodd-Frank, lumped in with the Treasury's ability to designate non-banks as systemically important financial institutions.
The memorandum is expected to direct Treasury Secretary Steven Mnuchin to review and report on the matter and determine whether it is useful or problematic.
Newswires reported Thursday evening that Trump will sign a second memorandum on Friday concerning the Financial Stability Oversight Council, and he will also sign an executive order on identifying and reducing tax regulatory burdens.
In February, Trump signed an order directing the Treasury to conduct a review of financial system regulations, including a number of banking industry rules created in the wake of the 2008 financial crisis.
Clarification: After sources indicated to CNBC that President Donald Trump would sign two executive orders, subsequent reporting showed it will likely be one executive order and two presidential memoranda.
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cc630b66187c8088ed3b2a3dfe0cbd97 | https://www.cnbc.com/2017/04/20/verizon-reports-first-quarter-earnings.html | Verizon earnings, revenue miss Street estimates, sending shares lower | Verizon earnings, revenue miss Street estimates, sending shares lower
VIDEO1:4701:47Verizon Q1 misses on top and bottom lineSquawk Box
Verizon Communications reported first-quarter earnings and sales on Thursday that missed analysts' expectations, sending shares lower.
Here's what the company reported versus what the Street was expecting:
EPS: 95 cents vs estimate of 96 cents, according to Thomson Reuters analysts' consensus. Revenue: $29.814 billion vs $30.487 billion estimate, according to Thomson Reuters.
The stock closed down more than 1 percent on Thursday.
Total revenues for Verizon's wireless business were $20.9 billion in the first quarter, a decline of 5.1 percent from one year ago, which was largely due to decreased overage revenue, lower postpaid customers in the quarter and continued promotional activity, Verizon said.
Verizon also reported a net decline of 307,000 retail postpaid connections, or those who are bound by contracts, including 289,000 phone losses. The telecom company said it added a net of 35,000 Fios internet connections, missing quarterly estimates, and it lost a net of 13,000 Fios video connections for the period.
"... we extended our wireless and fiber network capabilities, began offering an unlimited pricing option and expanded our opportunities in new markets," Verizon Chief Executive Lowell McAdam said in a statement, commenting on the latest quarter. "We're executing on strategies to capture future growth ..."
Verizon said it completed its acquisition of XO Communications' fiber assets earlier this year, part of its plan to expand its cell network.
On Thursday, the company predicted its full-year 2017 sales to be "fairly consistent" with those in 2016, with improvements being made in wireless service revenue and equipment revenue trends. Verizon's 2017 effective tax rate should fall within a range of 34 to 36 percent, the company said, which would exclude any impacts from the Trump administration's potential tax reform.
The telecom giant's much-talked-about acquisition of Marissa Mayer's Yahoo is still pending, complicated by the two data breaches that Yahoo announced last year, which affected up to 1.5 billion users throughout 2013 and 2014.
The companies initially agreed to a $4.8 billion deal, but in February, Verizon lowered the price to $4.48 billion, according to a filing with the Securities and Exchange Commission.
Earlier this week, amid heightened dealmaking activity in the telecom sector, Verizon CEO McAdam said he is open to discussing the possibility of merging his company with Disney, CNBC owner Comcast, or CBS, according to Bloomberg.
Referring to Comcast Chief Executive Brian Roberts, McAdam told Bloomberg: "If Brian came knocking on the door, I'd have a discussion with him about it."
"... if there is the right opportunity out there to accelerate [Verizon's] strategy organically in a way that adds shareholder value, we're always looking at those opportunities," Verizon Chief Financial Officer Matthew Ellis explained McAdam's comments in a conference call Thursday.
"We are committed to remain the largest and most reliable 4G network ... As part of the densification, we are deepening our fiber assets as seen by the XO transaction" and continuing to focus on "organic" growth, for now, Ellis added.
The CFO said he's confident wireless subscriber growth will reach a positive trajectory later in the year and into 2018, so long as Verizon keeps prices at the "right levels" and works on stepping customers up.
Watch: Verizon and Corning CEOs discuss fiber deal
VIDEO11:2511:25Verizon and Corning CEOs on 5G fiber dealSquawk on the Street
Disclosure: Comcast is the owner of NBCUniversal, the parent company of CNBC and CNBC.com. CNBC also has a content sharing agreement with Yahoo Finance.
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0c7f1175ad951a256302f50ae21a678e | https://www.cnbc.com/2017/04/21/for-knoxville-stakes-are-high-in-obamacare-debate.html | For Knoxville stakes are high in Obamacare debate | For Knoxville stakes are high in Obamacare debate
VIDEO1:3001:30No Obamacare, big problemPower Lunch
John Nehls has learned to be resilient. Nearly three years ago he crashed into a truck riding his bicycle less than a mile from his home in Knoxville, Tennessee.
"The force telescoped through my back and burst three vertebrae," leaving him wheelchair bound Nehls said.
Now he's facing another health care challenge. He and his wife are self-employed and rely on their Obamacare plan to cover his medical needs.
"The biggest concern we have is what's going to happen in 2018. We do have coverage for this year on the Humana plan, but in 2018 there will be zero options in this county, " he explained.
Humana is the only insurer offering exchange plans this year in Knoxville and much of eastern Tennessee, but in February the insurer announced it would be dropping out of the Obamacare market in 2018.
Tennesee's insurance commissioner says the state's other carriers, Blue Cross Blue Shield of Tennessee and Cigna aren't prepared to step in right with so much regulatory uncertainty in Washington.
More than half of the state's Obamacare enrollees receive cost-sharing subsidies that reduce out of pocket costs, but the Trump administration and Congress have not given insurers a firm commitment that they'll continue funding the so-called CSR payments.
"The most critical issue for us is funding the cost-sharing reduction payments," explained Julie Mix McPeak, Tennesee's commissioner of the state's department of commerce and insurance.
Without clarity on the CSRs soon, McPeak says the coverage crisis facing east Tennessee will spread. Even though insurers have indicated a willingness to offer plans in the state with early filing deadlines like Kentucky and Virginia, they don't have to commit for 2018 until next September.
"We have five states that only have one insurer statewide and another 9 like Tennessee that have a majority of counties having only one insurer offering coverage. And I think the lack of funding for the CSR payments would be a blow to those markets," she said.
Tennessee's Republican Senators, Lamar Alexander and Bob Corker, have proposed a stop-gap measure that would allow residents in Knoxville and other communities to exchange tax credits to buy off-exchanges plans if they have no Obamacare coverage.
That could allow some residents to buy plans from the Tennessee Farm Bureau in the private individual market, but the industry association's health plans may not be an option for enrollees with pre-existing conditions.
"The Farm Bureau plans... have tens of thousands of consumers, all of whom are healthy because they have passed the health screening that the Farm Bureau is allowed to require," said Sabrina Corlette, research professor at the Center on Health Insurance Reforms (CHIR) at Georgetown University. "The plans that are in the ACA marketplaces aren't allowed to do that."
As Congress gets ready to take up the battle over the GOP health plan again in Washington, anxiety and frustrations are high in Knoxville.
Area clinics like Cherokee Health Systems are seeing increased demand or preventive screening procedures, such as mammograms and colonoscopies, from patients worried they will lose insurance coverage at year's end.
"The lack of clarity, the changing every single day, in a way makes it harder, because one minute you are ready to deal with one plan, and then literally two hours later or even the next day, there could be a different proposal," said Parinda Khatri, Cherokee Health's chief clinical officer.
Many here, like John and Cheryl Nehls feel like Washington just doesn't get it.
"Do they realize what type of pressure that you face every day in making health care decisions?" asked Cheryl Nehls.
"It's confusing and scary," John Nehls said. "Simply waiting to let the current law explode is going to leave a lot of people hurt."
And the longer the debate in Washington goes on, the higher the number of people in communities like this that could fee the pain.
—By Bertha Coombs. Follow her on Twitter: @coombscnbc
Watch: Price on upholding Obamacare
VIDEO2:4402:44HHS Secretary Tom Price on upholding ObamacareDigital Original
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b82897a2b6502fe6282c571253906392 | https://www.cnbc.com/2017/04/21/macys-lundgren-says-great-valuations-are-fueling-retails-appetite-for-ma.html | Macy's Lundgren says 'great valuations' are fueling retail's appetite for M&A | Macy's Lundgren says 'great valuations' are fueling retail's appetite for M&A
VIDEO7:0607:06Terry Lundgren: We are looking all the time for acquisitions Squawk on the Street
As Macy's looks to turn around its business and end a two-year streak of same-store sales declines, Executive Chairman Terry Lundgren said a merger or acquisition could eventually be on the table.
"We look all the time," Lundgren, who ended his stint as CEO last month, told CNBC's "Squawk on the Street." "I think there's some great valuations in stock prices of companies that are well funded and that look like they have a runway for success in the future."
The question is whether those companies would be the right fit for Macy's, Lundgren said. He added that the retailer has no acquisitions on its plate at this time, noting it has historically been conservative in snatching up new retail brands.
The company's last acquisition was roughly two years ago, when it bought beauty retailer Bluemercury for $210 million.
Terry Lundgren, CEO of Macy'sDavid Orrell | CNBC
Lundgren, who previously served as the chain's CEO for more than a decade, added that recent speculation about a potential deal with Canadian department store operator Hudson's Bay was "overblown." Those reports had indicated that Hudson's Bay had approached its much-larger competitor, and had its sights set on Macy's real estate.
M&A activity in the retail space has heated up recently, as traditional chains look for ways to compete with online retailers like Amazon. Wal-Mart acquired Jet.com last year and has since been on a buying binge in the e-commerce space. And earlier this week, Re/Code reported that Petsmart would acquire digital pet store Chewy.com for $3.35 billion.
Lundgren's comments came from the Global Retailing Conference, in Tuscon, Ariz., where new Macy's chief Jeff Gennette is speaking Friday. CNBC will have an exclusive interview with Gennette at 1 p.m. Eastern.
The new CEO is expected to speak more about Macy's strategy under his leadership.
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bcc4bc1c3f39a10dbb7ce80cccc51e81 | https://www.cnbc.com/2017/04/21/obama-wishes-french-presidential-hopeful-macron.html | Obama wishes French presidential hopeful Macron good luck ahead of key vote | Obama wishes French presidential hopeful Macron good luck ahead of key vote
Former U.S. President Barack Obama has given his backing to centrist candidate Emmanuel Macron ahead of French elections this Sunday, telling the presidential hopeful to work hard until the very last minute of the campaign.
In a phone call on Thursday, posted on the Twitter feed of Macron, Obama told the presidential frontrunner: "The main message I have is to wish you all the best in the coming days and make sure that, as you said, you work hard all the way through because you never know, it might be that last day of campaigning that makes all the difference."
Tweet 1
Macron is running as an independent in what's being described as one of the most uncertain elections in French history. Polls position him in first place but closely followed by his far-right opponent Marine Le Pen.
Aside from the vote being highly spread between all the candidates, it's also expected that about 38 percent of French voters will abstain, which increases the unpredictability of the vote.
Macron thanked Obama for taking the time to speak to him and promised to defend progressive values. Towards the end of the conversation, Obama wished Macron "good luck."
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12abce437c7c09b7997f057aced5fa74 | https://www.cnbc.com/2017/04/21/retailer-bebe-to-close-all-175-of-its-stores.html | Clothing retailer Bebe announces closure of all 175 of its stores | Clothing retailer Bebe announces closure of all 175 of its stores
VIDEO0:3800:38California-based clothing chain Bebe is closing all of its storesNews Videos
Women's clothing retailer Bebe is closing all of its stores, according to a Friday filing with the Securities and Exchange Commission.
The company said Friday it expects to shutter all of its brick-and-mortar locations by the end of May. The chain had previously said it was committed to closing 21 locations, which represented roughly 12 percent of its total outlets. California-based Bebe had 180 stores at the end of 2016, according to its website.
This news came as Bebe explained it was in the process of exploring strategic alternatives for its business, amid much speculation the company would transition to an online-only model.
Bebe said Friday it expects to recognize an impairment charge of approximately $20 million, net of deferred rent and other credits, as a result of closing the remainder of its stores. This impairment charge will be recorded in the third and fourth quarters of this year, according to the SEC filing.
Bebe's stock initially fell more than 4 percent Friday morning in premarket trade on this news, after closing at $3.76 per share on Thursday. The stock closed over 6 percent higher at $4 per share on Friday.
Bebe didn't immediately respond to CNBC's request for comment.
Additional speculation has been swirling of late that Bebe could be one of the next retailers to join a growing list of companies that have filed for Chapter 11 bankruptcy protection in 2017. That list includes Payless ShoeSource, which announced earlier this month it will close some 400 stores in an attempt to reorganize.
Growing competition from e-commerce giant Amazon, as well as millennial-focused fashion retailers H&M and Zara, has played a role in this trend.
Bloomberg reported last month that Bebe was planning to close all of its stores and hoped to do so without having to file for bankruptcy.
The company didn't specify Friday what its future plans are.
— CNBC's Krystina Gustafson and Courtney Reagan contributed to this report.
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399649a224d3a2b9a202720919a8f652 | https://www.cnbc.com/2017/04/21/singapore-raises-voice-against-rising-protectionism.html | Singapore raises voice against rising protectionism | Singapore raises voice against rising protectionism
A shipping container is moved with a crane before being loaded onto a ship docked at the Port of OaklandJustin Sullivan | Getty Images
Rising protectionism in the West has become a threat to Asia's prosperity, Tommy Koh, ambassador-at-large for Singapore's Ministry of Foreign Affairs, said Thursday.
"I worry about the rise of protectionism and economic nationalism in the U.S. and in Europe. I see this as a direct threat to the prosperity and prospects of Asia," Koh said at the Credit Suisse conference on megatrends, held in Singapore.
"Asia has been able to make enormous progress because of the liberal economic order that the U.S., U.K. and other countries created at the end of the Second World War. And this liberal world order seems to be in jeopardy."
Protectionist rhetoric ramped up during the U.S. presidential election last year.
Then-candidate Donald Trump ran on a platform promoting "fair trade" practices that would prove better for the U.S., with much of the rhetoric aimed at China and Mexico.
Although Trump has since walked back some of the rhetoric – earlier this month he said he wouldn't label China a currency manipulator – he has continued to target U.S. trade partners, calling Canada's actions on dairy a "disgrace" on Thursday and launching a probe of cheap steel exporters, including China.
David Mulford, a former U.S. ambassador to India during the George W. Bush administration and a Treasury Department official during the Ronald Reagan administration, shared the conference stage with Singapore's Koh and defended the shift on trade.
"The U.S. position over all these years we've been talking about has been to promote and assist the rise of other nations. It is an extraordinary historic performance by a strong country," Mulford said. "In doing so, we have created all kinds of rivals and this has caused hitches and glitches and problems in the system, which now have to be addressed and it's appropriate that we address them."
Mulford, who is currently a visiting fellow at the Hoover Institution at Stanford University, which bills itself as non-partisan but is often viewed as conservative, did not specify what systemic problems he believed needed to be addressed.
Mulford also went on the attack against claims the U.S. had grown overly protectionist: "There is no shortage of protectionism in Asia. Let's be frank about that. It is a major part of the Asian economic approach."
But Singapore's Koh was unconvinced.
"It is not fair for you to say there is protectionism everywhere, including Asia, so what's the big deal about the U.S. turning protectionist. The trend in Asia is in the other direction. We are opening up the economies, liberalizing, integrating with one another," he said. "The trend in America and Europe is a worry, because you are going in the other way. There is a significant difference between the dominant trend in Asia — which is towards opening up the economy, liberalizing, integrating — and the trend in the West."
Singapore and the U.S. signed a free trade agreement in 2003. But more recently, Trump pulled the U.S. out of the Trans-Pacific Partnership, or TPP, a broad 12-nation trade deal, which the U.S. president claimed was a "disaster" that would hurt U.S. manufacturing.
Mulford defended the Trump administration's stated preference for bilateral trade deals.
"Are there benefits to be derived by bilateral trade agreements versus ambitious global trade agreements," he asked. "I think smaller countries that are competitive, aggressive confident could do very well in bilateral trade negotiations and don't always have to be involved in a large package that makes it harder to negotiate a variety of different things rather than a one-on-one situation."
To be sure, some analysts believe the multi-lateral approach is more efficient, as trade deals generally take many years to complete and small nations often can't field large teams to negotiate many bilateral deals simultaneously.
But Mulford claimed "world elite" and "negative" media have been preventing discussion of ways to "address the legitimate concerns of the groups that have been disadvantaged in leading countries like the U.S. by the rise of other nations and the growth of globalization."
Singapore's Koh, however, remained steadfast in criticism of the U.S.'s new trade tact, noting that America had gone down that road before, with ill effects.
Koh pointed to the Smoot-Hawley Tariff Act of 1930, which increased U.S. tariffs on a range of imports, setting off a trade war and deepening the Great Depression as by some estimates it halved American imports and exports.
"You've been there before and I'm surprised that memories are so short in America and Americans are flirting with protectionism a second time," Koh said.
—By CNBC.Com's Leslie Shaffer; Follow her on Twitter @LeslieShaffer1
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e21eb4c518721b322b0b96dba55250bf | https://www.cnbc.com/2017/04/21/trump-taking-action-against-regulations-put-into-place-after-the-financial-crisis.html | Trump issues directives that could roll back post-crisis reforms | Trump issues directives that could roll back post-crisis reforms
VIDEO1:2201:22Fed's Powell: Some parts of Dodd-Frank 'unnecessarily burdensome'Squawk Box
President Donald Trump signed three directives Friday aimed at unwinding regulations put into place after the financial crisis.
The moves target two key areas — "living wills" that banks must formulate to show how they would be broken up if they are in danger of failure, and the designation of what institutions will come get more intense federal scrutiny under the financial reforms.
Trump called the regulations, under the Dodd-Frank legislation, "damaging ... that failed to hold Wall Street firms accountable."
During a ceremony at the Treasury building, he also signed a measure that authorized a look into "reducing the tax burden" of Americans.
"This is such a privilege for me to sign" he said. "This is really the beginning of a whole new way of life that this country hasn't seen in really many, many years."
The banking orders "signal that the Administration will continue a push to remove key regulations that were implemented as part of the Dodd-Frank Act," analysts at FBR said in a note to clients.
President Donald Trump looks at an executive order during a signing ceremony with Treasury Secretary Steve Mnuchin at the Treasury Department in Washington, U.S., April 21, 2017.Aaron P. Bernstein | Reuters
One part will deal with the Orderly Liquidation Authority, which aims to reduce the burden of too-big-to-fail banks that endangered the financial system during the crisis. Large institutions posed widespread risk because of their interconnected nature, and the Dodd-Frank reforms sought to establish procedures for how to pull those banks apart in the case of another crisis.
However, some nonbanks also came under the measure's umbrella. MetLife last year successfully sued to have itself removed from the list of so-called systemically important financial institutions, but American International Group and Prudential remain on the list.
AIG was a central figure in the crisis, requiring a taxpayer bailout after insurance it issued against mortgage defaults exploded and posed serious risk to the business.
"We believe in clear and effective regulation, but not regulation for its own sake," Treasury Secretary Steven Mnuchin said. "Where we can do so we will lift the burden of excessive regulation to make sure that banks can lend, small businesses can borrow and Americans' work can thrive."
Trump likely will order regulators to review the process used to designate SIFIs, with the result being that nonbanks will be removed from the list.
On the living will issue, Trump will instruct the Treasury Department to review the provisions that require companies either to pass muster or face having to shed businesses or raise capital.
Ultimately, the OLA provisions could be repealed and replaced with a new system.
"Systemically important banks would benefit from this change: It would decrease their compliance costs in preparing their living wills, reduce the likelihood of higher capital requirements, and prevent regulators from shutting down certain business lines," FBR said.
Trump has said that he believes Dodd-Frank is unfair, and he's targeted it for significant changes.
Mnuchin will get 180 days to report back to Trump on changes to the bank designation and living will provisions. Parts of the bankruptcy code could be used as an alternative to the living wills.
"These expected memos show a continued commitment to undo many of the changes implemented by Dodd-Frank , and we expect ... other federal financial regulators to accelerate this process," FBR said.
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364900d52e135d48faa0a5936978971a | https://www.cnbc.com/2017/04/21/why-millionaires-dont-care-about-mnuchins-tax-reform-time-travel.html | Millionaire investors are still bullish on stocks — everywhere | Millionaire investors are still bullish on stocks — everywhere
VIDEO1:3501:35Pick up in global growth concentrated on emerging markets: EconomistSquawk Box Europe
Treasury Secretary Steve Mnuchin debuted what could be called the fiscal policy version of Trump foreign policy this week — in a matter of just a few days, Mnuchin did an about-face on a major position. The Treasury Secretary went from telling the Financial Times that Trump's tax-reform timeline was "highly aggressive to not realistic at this point" to telling everyone a few days later the Trump administration was "pretty close" to bringing forward major tax reform.
That was welcome news to the market — it rallied after Mnuchin's time travel on Thursday — but markets don't typically thrive on uncertainty. Most investors prefer not to be treated like geopolitical foes intentionally kept on their toes, possibly with the exception of Wall Street high-frequency trading algorithms. On Friday afternoon, President Trump said he would release a tax reform package next week and it would be bigger than "any tax cut ever." But Trump seemed to waver on the timing, with the White House issuing a subsequent statement saying, "The President was saying what we've been saying all along, that he wants to do tax reform as quickly as possible while still doing it right."
The good news is that new data from a survey of millionaire investors shows they've got an unwavering approach: They are not basing investment strategy on Trump administration "strategic" surprises or short-term failures. They are keeping their heads, and money, in the market and mostly out of the political headlines.
One big bet millionaire investors are making shows they have things other than Trump on their minds: Emerging markets and overseas stocks are among the most attractive assets they see, according to a survey of millionaires who manage their own brokerage accounts conducted by E-Trade Financial and provided exclusively to CNBC.
Fifty-four percent of millionaires surveyed described the health of market outside the United States as appealing to them as an investor in the second quarter, up from 43 percent in the first quarter 2017. Twenty-five percent of millionaires said they were more likely to invest abroad than domestically this quarter, up from 19 percent in the last quarterly survey.
Gary Houlder | Getty Images
Mike Loewengart, vice president of investment strategy at E-Trade, said there are two elements driving the move by millionaires to invest more overseas. One is simply the performance: It's hard not to chase what has been the best equities market this year, beating U.S. stocks. But more important is valuation, especially in emerging markets equities. Overseas stocks are attractive, largely because they have not run up like the U.S. market.
Year-to-date performance:MSCI BRIC: 11.61 percentMSCI Emerging Markets: 11.15 percentMSCI Europe: 6.35 percent MSCI EAFE: 5.92 percent MSCI World: 5.45 percentS&P 500: 5.23 percentFrom the long-running euro zone crisis and various European nation recessions to fears that the end of the Federal Reserve's quantitative easing would slam emerging markets, stocks overseas have not boomed like in the United States.
The S&P 500 is trading at about 21 times trailing earnings, compared with a 15 to 16 times earnings multiple in international developed markets, and a 13 to 14 times earnings multiple in emerging markets.
"We definitely see performance-chasing in emerging markets after a really strong start to the year, and investors start paying attention to it, but for the longer term it is valuation," Loewengart said.
The movement of assets overseas does not coincide with any increase in skittishness about the U.S. economy. In fact, millionaires are very optimistic about the domestic economy, even more so than in the first quarter, with 70 percent giving the economy a grade of A or B. That's up from 59 percent of millionaires in the first quarter, and also compares to 59 percent of the broader investing population surveyed by E-Trade who showed this bullishness in the April survey. It is worth noting that the survey was conducted from April 1 through April 10, after the health care bill failure and during a stall in the Trump trade. When asked to describe their feelings about the future of the U.S. economy since Trump took office, 65 percent of millionaires said they were optimistic, up from 57 percent last quarter.
"They are seeing through the headlines all the potential red flags that could create volatility or depress equity prices and focusing on the long term. And when they survey the landscape, they still see equities as the best option," Loewengart said. "You could say the high net worth are more experienced, and we've seen it before. They are not so hung up on short-term political moves. It's the nonpolitical macro that drives the market, interest rates and inflation."
A good example is the financials sector, which came under pressure in the first quarter as the yield curve flattened out. "Everyone assumed that rates would rise here on out," Loewengart said.
The best sectors for the second quarter
Financials: 53 percentInformation tech: 47 percentHealth care: 45 percentEnergy: 35 percentIndustrials: 35 percent
But millionaire investors surveyed by E-Trade believe financials offer the most potential in the second quarter. Fifty-three percent of millionaires said the financial sector was the best opportunity among U.S. sectors, and that was up from 29 percent who cited financials in the first quarter. "They still see this sector as ripe for opportunity," Loewengart said, because rates will rise whether the pace laid out by the Fed is still as active as it has suggested. "We're still at a juncture in time of historical low rate levels, and they will increase if the economy stays strong," he said.
Valuation in the sector remains more attractive than in other U.S. sectors as well. A change in direction from the Fed or a less-effective Trump administration than expected could influence financial stock performance, but Loewengart said this is another area where millionaires see past the short-term headlines and recognize no single effort of the Trump administration will have as great a power over the market as broader macroeconomic forces. Industrials also saw a big spike in interest, from 19 percent of millionaires saying the sector offered the most potential in the first quarter to 35 percent saying it was their top sector choice in the April survey.
Millionaires continue to believe financials, followed by industrials, are two of the three sectors that will benefit the most from the Trump administration's policies and Congress (the other is energy).
"These more experienced investors see through the noise. I see it in the survey and see it day to day in business," Loewengart said.
Eighty-three percent of millionaire investors think the economy is healthy enough for the Fed to raise rates this quarter, up from 76 percent last quarter and a belief over which millionaires show much more conviction than the broader investing public, where only 62 percent agreed with this view.
The intentions of the Fed and commitment to more normal monetary policy, and Trump wanting to move forward with pro-growth policies, together will cause people to focus more on economically sensitive sectors. The industrials jump comes back to economically sensitive exposure and dovetails with a boost in infrastructure spending.
Though millionaires are not entirely immune to sectors undergoing headline threats: Health care had been the No. 1 sector choice of millionaire investors in the first quarter and saw a big decline in interest this time around: Forty-five percent of millionaires said it offered the most potential this quarter, down from 56 percent in the first quarter. Though at 45 percent, health care is still the third most popular sector among millionaires.
The least popular sectors continue to be the rate-sensitive plays, demonstrating the power of the Fed: Telecom, consumer staples and utilities were at the bottom of the millionaire list of sector interest, with consumer staples seeing the biggest decline, down from 27 percent in the first quarter to 14 percent in the current one.
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ed8bf7e5d1674d8bf1f6980937afce8a | https://www.cnbc.com/2017/04/22/how-to-use-samsung-galaxy-s8s-always-on-display.html | The Galaxy S8 has an always-on display, here's how to use it | The Galaxy S8 has an always-on display, here's how to use it
Todd Haselton | CNBC
The Galaxy S8 has several features the iPhone doesn't, but one of my favorites is its always-on display.
Samsung first introduced this feature last year with the Galaxy S6. Thanks to the organic screen technology Samsung uses, it can power some pixels all of the time without wasting battery life. That's why it's called "always on." You can use it for viewing icons representing notifications, special pictures or for actions, like switching songs.
Using the always-on display is simple. Let's walk through it now.
Todd Haselton | CNBC
Todd Haselton | CNBC
Todd Haselton | CNBC
Todd Haselton | CNBC
Todd Haselton | CNBC
Todd Haselton | CNBC
Todd Haselton | CNBC
Todd Haselton | CNBC
Todd Haselton | CNBC
Todd Haselton | CNBC
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c1013a7c8f136a2b54123c27fd18d4b4 | https://www.cnbc.com/2017/04/22/steps-united-pepsi-can-take-to-recover-from-a-really-bad-month.html | Steps United, Pepsi can take to recover from a really bad month | Steps United, Pepsi can take to recover from a really bad month
Kendall Jenner stars in the new Pepsi Moments ad.Source: Pepsi Global
For a prominent brand with a long history, public relations crises are all but inevitable. That said, not all PR flaps are created equal — something to which United Airlines and Pepsi can surely attest after a rough week in the news.
Earlier this month, Pepsi created a stir with a spot featuring Kendall Jenner that many observers felt trivialized protest movements everywhere, which prompted the company to pull the ad. The crisis was overshadowed just days later, when a passenger on a United flight was forcibly removed from his seat for refusing to give it up to accommodate a few of United's employees.
With both scandals still fresh in the public's collective memory — and the source of an endless font of Internet ridicule — CNBC spoke with several crisis communicators to see what United and Pepsi could do to smooth the ruffled feathers of outraged consumers. The advice may also prove instructive to American Airlines, which on Friday found itself caught in the middle of a controversy stemming from an on-board altercation caught on video.
'Don't make it worse' Beck Bamberger, founder of Bam Communications, said that Pepsi actually did a few things right in responding to the backlash, but could have done better. "Pepsi did issue an immediate apology and yanked the ad, but a better crisis protocol is to detail what action you — the brand, CEO, whomever — will do moving forward, and then execute immediately on the action promised," she told CNBC. Todd Mitchem, organizational change expert and author of the book "You, Disrupted," said that Pepsi's best bet was to put the whole affair in the rearview mirror.
"There's no need to make this worse by attempting damage control," he said, adding that the beverage giant should steer clear of political content.
Alex Slater, managing director of the Clyde Group public affairs firm, suggested Pepsi should "lay low and wait it out. People will move on to yelling about something else as soon as you stop feeding the fire and let them."
Oscar Munoz, CEO of United Airlines.Adam Jeffery | CNBC
When PR goes 'off the runway'
Unlike Pepsi, the experts who spoke to CNBC said United's woes appeared to be much more complex, and wouldn't go away easily given the circumstances.
"When the world heard the screams of the doctor dragged off the plane, [United Airlines CEO Oscar] Munoz should have responded first as a human and not a CEO," said Michelle Marasch Ouellette, a professor of journalism and public relations at SUNY Plattsburgh.
Munoz's now infamous use of the term 're-accommodate' led to widespread mockery and indignation. "There was no accommodation involved in what happened to that passenger," Ouellette said.
Slater of the Clyde Group said that United would have been best served by ditching the legalese.
"I wonder if behind the scenes, they need to invest not just more money but more authority in their teams to overrule cold, legalistic language," he said. "In my experience that's what leads responses to go as poorly off the runway as theirs did."
Uber could spend millions of dollars on public relations and advertising and none of it would make a difference if they don't fix the company's culture.Dan Hill founder, Hill Impact
As one might expect, crisis management doesn't come cheap and gets even pricier depending on how large the gaffe might be. Andy Desai of SW & Associates Public Relations recommended keeping a public relations specialist on retainer — which costs about $5,000 per month.
Companies that have to find a firm when they're in a bind may end up paying at least six figures to manage a PR crisis, and perhaps even millions, experts said.
United and Pepsi are "going to have to pay some crisis rates over the next couple of weeks to get them out of the acute phase of these crises," said Ann Barlow, partner and president of Peppercomm West.
Still, an ounce of prevention is worth a pound of cure, PR veterans told CNBC. They recommend that companies already have crisis strategies in place when troubles arise.
In the case of Uber — which is reeling from a sexual harassment scandal as well as some other self-inflicted wounds — all of the money in the world may not fix what ails the company, one expert said.
"Uber could spend millions of dollars on public relations and advertising and none of it would make a difference if they don't fix the company's culture," said Dan Hill, founder of crisis communications firm Hill Impact and a former adviser to ex-New Mexico Governor Gary Johnson.
"It requires a total reset on their mission and values, and company executives have to actually live by the same standard that they will expect from others."
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2fe5ae58aa3011f65909c6bb190850d3 | https://www.cnbc.com/2017/04/23/becton-dickinson-to-acquire-bard-for-24-billion.html | Becton Dickinson buys CR Bard for $24 billion to form medical supply giant; Bard shares surge 20% | Becton Dickinson buys CR Bard for $24 billion to form medical supply giant; Bard shares surge 20%
VIDEO0:5300:53Becton Dickinson to acquire Bard for $24 billionWorldwide Exchange
U.S. medical equipment supplier Becton Dickinson and Co will acquire C R Bard Inc, in a $24 billion cash-and-stock deal, adding Bard's devices to its portfolio in the high-growth sectors of oncology and surgery, both companies said on Sunday.
The deal comes two years after Becton Dickinson acquired CareFusion Corp for $12 billion. It is the latest in a string of deals in the medical technology sector, as manufacturers turn to acquisitions to boost profit margins.
"We are confident that this combination will deliver meaningful benefits for customers and patients, as we see opportunities to leverage Becton Dickinson's leadership, especially in medication management and infection prevention," Bard Chief Executive Officer Tim Ring said in a statement.
The deal values Bard at $317 per share, a 25 percent premium over Friday's close of trading. Bard shareholders stand to receive $222.93 in cash and 0.5077 shares of Becton Dickinson for each of their shares, the companies said. This would lead to Bard shareholders owning about 15 percent of the combined company.
Bard shares were up by 20 percent in premarket trading Monday.
Becton Dickinson said the deal with Bard will expand its focus on the treatment of disease states beyond diabetes, to include peripheral vascular disease, urology, hernia and cancer.
"We will be able to partner (with providers) on fundamental treatment processes in a way that no one else can," Becton Dickinson CEO Vincent Forlenza said in an interview.
Becton Dickinson, based in Franklin Lakes, New Jersey, said it expected the acquisition to boost non-U.S. growth options in markets such as China, and to raise per-share earnings in fiscal year 2019. Some $300 million in annual "pre-tax run-rate cost synergies" are expected by 2020, the company said.
The medical device sector has seen several major deals in recent years, in response to a widespread slowdown in revenue growth, consolidation among healthcare providers, and increased pressure from healthcare payers to hold down treatment costs.
In January, Abbott Laboratories acquired rival St. Jude Medical Inc for $25 billion, while in 2015 Medtronic Plc bought Covidien Plc for around $49.9 billion, and Zimmer Holdings Inc merged with Biomet Inc for $13.4 billion, creating Zimmer Biomet Holdings Inc.
"We expect that this deal will cause others in the space to take a step back and ask themselves if there is an opportunity to do another large transaction and should we be acting upon it," Forlenza said.
Becton Dickinson and Bard said they expected their deal to close in the fall of 2017, subject to regulatory and shareholder approvals.
Perella Weinberg Partners LP and Citigroup Inc acted as financial advisers, and Skadden, Arps, Slate, Meagher & Flom LLP was legal adviser to Becton Dickinson. Goldman Sachs Group Inc was financial adviser and Wachtell, Lipton, Rosen & Katz was legal adviser to Bard.
Follow CNBC International on Twitter and Facebook.
--CNBC contributed to this report
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300c3c55e552dd7b6718e9afec278c27 | https://www.cnbc.com/2017/04/23/chinese-billionaires-amass-in-the-countrys-heartland.html | Chinese billionaires amass in the country's heartland | Chinese billionaires amass in the country's heartland
VIDEO1:5501:55This club counts China's top business leaders as membersSquawk Box Asia
This article is part of a "Reporter's Notebook" series, wherein CNBC journalists submit tales and observations from the field.
ZHENGZHOU, China — Here in China's heartland, in the capital of its Henan province, some of the country's most powerful leaders are meeting.
But these are not the political elite that have run the country for decades, this is a new crop of leaders — all from the private sector.
This city, near corn and wheat fields, is hosting an annual meeting from the China Entrepreneur Club. That's an invite-only group composed of 55 Chinese billionaires, at last count. In other words, they're the richest — and among the most influential — people in a country that's already minting millionaires monthly.
Unlike many of the moneyed elite from other developing countries, who accrued wealth from a privatization land-grab, almost all of China's entrepreneurs started from scratch. And these entrepreneurs aren't just titans of industry, but also technology, energy, finance and retail. In many ways, they are China's new economy.
How they've succeeded, mostly despite the Communist government, is a major and under-appreciated part of the story of China's transformation over the past 35 years.
In fact, even before the Chinese government officially acknowledged the benefits of private companies, hundreds of thousands of businesses had already begun. A handful of those have become international giants.
Huawei is now one of the largest telecommunications equipment makers in the world, but it started by importing used gear from the telephone exchange in Hong Kong. The company now known as Lenovo, the world's top PC-maker by market share, started by selling televisions imported into China. Geely, now one of China's biggest carmakers, started by selling parts for refrigerators.
The people behind those names are China's first generation of entrepreneurs. The second generation came about in the 1990s, and the country's third crop of entrepreneurs includes people like Alibaba's Jack Ma, and Tencent's Pony Ma (no relation), who are now the focus of most of the Western world's attention. And China is already churning out a new slew of tech titans in the making.
Jack Ma and CNBC's Martin Soong on the sidelines of the China Entrepreneur Club meeting.
By some measures, China's private sector now accounts for two thirds of its economy. Entrepreneurs, not politicians, are now the ones driving the long-sought economic rebalancing away from a dependence on manufacturing and exports and more toward services and consumption.
But one of the major questions about China's future is what the dynamic will be like between entrepreneurs and state-owned enterprises. So far, Beijing has largely treated private success benignly because the biggest stars, like Alibaba, are more valuable to the national cause without official direction or interference. Those companies are flying China's flag, in an increasingly international capacity, more effectively than any state campaign or directive could ever hope to achieve.
But the state and its companies still comprise a full third of China's economy, and when state-owned enterprises begin to get crowded out, there will likely be tension.
Officially, the government hasn't opened up strategic sectors, including finance, to private players. In reality, though, firms like Tencent through it's almost ubiquitous WeChat messaging platform have already moved far ahead of China's stodgy and debt-laden state banking system. Millions of Chinese pay their utility bills, buy movie tickets, order delivery for dinner and even do their banking on WeChat.
China's lumbering state banks are trying to catch up, but are already several years late to the game — the private sector is where the innovation is happening.
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be90ae7b19ae6adc4ada76dc653e03f2 | https://www.cnbc.com/2017/04/23/markets-dollar-france-election.html | Dow futures soar more than 200 points as markets get a Le Pen-Macron runoff | Dow futures soar more than 200 points as markets get a Le Pen-Macron runoff
VIDEO2:2902:29How influential will the French election be on markets?Squawk Box Europe
Investors breathed a sigh of relief on Sunday — for now, anyway.
U.S. stock futures opened sharply higher, with Dow futures soaring more than 200 points as early results from the French election showed Emmanuel Macron and Marine Le Pen advancing to a presidential runoff. Those projections were based on exit polls; official results were not yet available.
"The market will enjoy this today, but she's not out," said Quincy Krosby, market strategist at Prudential Financial. "The pollsters got it right this time, but we don't know if they'll be wrong in the runoff."
S&P and Nasdaq futures both spiked around 1 percent.
The euro, meanwhile, rose sharply against the dollar on Sunday. "There is some chance that the exit polls are overestimating Macron support," Krishna Guha, vice chairman of Evercore ISI, said in a Sunday note.
"But regardless, the worst case outcome of a run-off between Le Pen and far-left Mélenchon has been avoided and no estimate has Le Pen so far ahead of Macron as to increase concerns about his ability to overhaul her in the run-off with the benefit of second choice votes from other mainstream candidates."
A screen announces the results of the first round of the French Presidential Elections naming Founder and Leader of the political movement 'En Marche !' Emmanuel Macron with 23.7% and National Front Party Leader Marine Le Pen with 22% of the vote at Parc des Expositions Porte de Versailles on April 23, 2017 in Paris, France.Getty Images
Reuters data showed the common currency jumped to a five-and-a-half month high of around $1.0935 against the greenback, from a Friday close near $1.072. The euro also climbed more than 1 percent against the British pound and more than 3 percent versus the .
"The market needed to get what it was expecting," said Art Hogan, chief market strategist at Wunderlich Securities. "I think that's the important thing."
"Some of the safety trade we've seen recently could be unwound in the next week," he said.
Far-right candidate Le Pen and centrist Macron were largely expected to pull ahead in the first round of the French contest. The two had led most of the polls leading up to the election. Le Pen and Macron will face off again on May 7. Most polls show Macron easily beating Le Pen in the second round.
"In one year, we have changed the face of French politics," Macron said at a rally. He added that he wants to relaunch the European project.
Macron of the independent En Marche party secured 24 percent of the vote, with National Front's Le Pen trailing narrowly behind at 22 percent, according to Harris poll estimates.
"They have very contrasting views," said JJ Kinahan, chief market strategist at TD Ameritrade. "You'll get your first indication of who the market sees as the leader" heading into the runoff later on Sunday.
Also potentially important is that conservative candidate Francois Fillon endorsed the centrist Macron — rather than the fellow conservative Le Pen — as he conceded defeat Sunday evening local time.
Macron and Le Pen were neck and neck in the polls heading into the contest, with communist Jean-Luc Melenchon and conservative Fillon not far behind. According to French polling firm Ifop, the four candidates were separated by only 6 percentage points as of Friday.
The tight poll numbers led investors to dump the country's sovereign bonds in favor of more stable German debt, pushing the spread between French and German 10-year yields to a near two-month high.
French and German 10-year yield spread
Source: FactSet
"This could've gone a lot of different ways," said Thomas Hainlin, global investment strategist at Ascent Private Capital Management. "The fact that we got a result that was pretty close to what the polls were showing is reassuring to financial markets."
—CNBC's Gemma Acton and Jeff Cox contributed to this report.
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f823fb57063a070d61a9c34d34d7481b | https://www.cnbc.com/2017/04/23/why-antitrust-should-not-be-used-against-tech-monopolies.html | Op-ed: The idea of using antitrust to break up tech 'monopolies' is spectacularly wrong | Op-ed: The idea of using antitrust to break up tech 'monopolies' is spectacularly wrong
In this Nov. 21, 2011 photo, Bill Gates arrives to testify at the Frank E. Moss federal courthouse.Jim Urquhart
A pair of editorials in The New York Times and Business Insider exclaimed recently that the power in the tech industry is concentrated among too few companies, with both publications calling for a new round of antitrust regulation akin to the Department of Justice action against Microsoft in the 1990s.
This argument is stunningly, spectacularly wrong.
Yes, the five big tech companies—Alphabet (Google), Amazon, Apple, Facebook, and Microsoft—are more powerful collectively than the tech industry has ever been. They're the five largest companies in the U.S., as measured by market cap, and have been driving most of the stock market's gains since January.
It's also easy to argue, as Matt Stoller does in the Business Insider piece, that innovation in the tech industry is in a lull. Silly venture capital-funded companies like Juicero, which sells a $400 juicer, are a highly visible example. (A recent Bloomberg investigation showed that the juice packets could actually be squeezed by hand to the nearly same effect as the $400 juicer, which apparently irritated some of the start-up's early investors.)
Yet what both of these facts actually demonstrate is that the tech industry is one of the nation's most vibrant, subject to constant competition and disruption—precisely the opposite of the market characteristics antitrust law was meant to stop.
Consider:
The Big Five are in constant competition. The fact that there are five powerful companies at the top of this industry, rather than one (as was arguably the case with Microsoft in the 1990s) should be a clear clue that the tech industry is exceptionally vibrant.
In fact, it's not clear that any of these companies has an actual monopoly, and it depends on how you define the market.
Does Google have a monopoly in the search market? Probably. But it makes its money from online advertising, where it faces clear competition from Facebook. Amazon arguably has a monopoly only if you define e-commerce as a separate market from retail. Apple doesn't seem to have a monopoly anywhere.
But more to the point, these five companies are in constant battle, both at the margins and in their core areas of business. Consider the following:
Apple invented the modern smartphone business with the iPhone in 2007, but Google quickly rolled out a competing platform, Android, and licensed it broadly to the point where it now has more than 80 percent of the global market;Amazon is constantly improving product search in an effort to undercut one of Google's core sources of revenue—search ads that appear when the user seeks information on a particular product;Facebook is competing against Google for every dollar available in online advertising, particularly in video;Apple has its own suite of mobile productivity apps that compete with Microsoft's Office apps on its devices, while Google has a strong online version of these kinds of apps;Amazon, Microsoft, and Google are in brutal competition for the cloud computing market, which itself is disrupting traditional software vendors like Oracle and SAP, with hundreds of billions of dollars of corporate IT budgets at stake.
And on and on.
This isn't a case of five companies sitting comfortably on their piles of gold and colluding to stay out of each other's core areas. It's all-out war, year after year.
The evidence of fast disruption in the industry is clear. Contrary to Stoller's argument, Google did not beat Microsoft because of antitrust litigation; the areas where Microsoft was restricted from competing related to web browsers and forcing PC makers to accept and reject certain software as a condition for getting Windows.
Google became a threat to Microsoft because it solved an entirely different problem that Microsoft hadn't even been focused on—organizing the burgeoning mass of information on the Internet in a way that made it easy for people to find what they were looking for. By the time Microsoft woke up and tried to beat Google with its own search engine, MSN Search (later Bing) in 2005, it was already too late.
Larry Page chief executive officer of Google's parent company, Alphabet Inc.Getty Images
There are plenty of other examples. As recently as 2007, Microsoft had the only operating system that mattered—Windows.
A decade later, Windows is in third place behind Google's Android and Apple's iOS, which conquered mobile computing devices and caught Microsoft flat-footed. Facebook swept into an online advertising market dominated by Google in 2012, and ended up capturing a huge portion of mobile online ads, catching Google flat-footed. And on and on.
A vibrant start-up market is a sign of competition. Yes, Juicero was a silly idea. (Although as former Microsoft exec and current venture capitalist Steven Sinofsky pointed out to me on Twitter, the company that owns the similar Keurig drink-pod system sold for $14 billion in 2015.) But the fact that these silly ideas are getting funded is a sign of vibrancy, not a sign that innovation is being squashed by monopolists.
Take for example Snap, which is losing hundreds of millions of dollars a year, but was funded by venture capitalists to the tune of $2.65 billion before going public earlier this year at a valuation over $20 billion. It is now causing enough panic at Facebook that the company is imitating Snapchat's core features as fast as its developers can code them.
Or look at Jet.com, a venture-funded competitor to Amazon that Wal-Mart snapped up for over $3 billion last year.
Or on the enterprise side, Okta set out to solve a problem in an area that Microsoft had dominated for most of the last decade—how to sign employees in to the apps they need to use, without making them enter a username and password every time.
Microsoft's solution was designed back when most companies used apps from a few vendors, running on their own in-house computers; Okta saw that companies were moving toward using cloud-based apps from a wide variety of vendors and exploited that niche. It went public earlier this month at a market cap of over $2 billion.
Okta co-founder and CEO Todd McKinnon.Source: Okta
Price competition benefiting customers. U.S. antitrust law focuses on harm to consumers—it's not enough for a company to be dominant, it must be using that dominance to raise prices or lower selection for consumers. (It's different in Europe, where the dominance itself can be cause for restriction.)
The evidence is quite to the contrary. Amazon is in brutal competition with physical retailers to offer consumers the lowest prices on almost anything they could want to buy. Google and Facebook offer their services for free to consumers, and are fiercely competitive when it comes to their paying customers—advertisers.
Meanwhile, Amazon, Microsoft, and Google are locked in a price war for cloud computing. Venture capital-subsidized start-ups like Uber give consumers more choices at lower prices than they've ever had.
No doubt, these five companies are powerful. There may indeed be cases where regulators need to step in and restrict these companies from harming consumers.
For instance, you could argue that Google and Facebook have too much information about people's web-surfing and buying habits, and that they should be subject to strict privacy restrictions on how they use that information. You could argue that Amazon's cutthroat negotiations with suppliers will have a long-term negative effect on price and selection by forcing smaller retailers and e-tailers out of business, and look for ways to regulate that. Regulators should certainly be on the lookout for any evidence of collusion between the big powers in tech—as happened with the class action suit over employee salaries at Apple, Google, and several other big companies that was settled in 2015.
But antitrust law is a blunt instrument meant to be used in cases of obvious market dominance that's clearly hurting consumers. That's not at all what the tech industry looks like today.
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7dda3cc83572f28d539f4d331747a026 | https://www.cnbc.com/2017/04/24/a-ride-on-indonesias-first-and-only-unicorn.html | A ride on Indonesia's first and only 'unicorn' | A ride on Indonesia's first and only 'unicorn'
VIDEO1:0101:01Indonesia's billion-dollar startup is fuelled by motorbikes — we took a rideCNBC Reports
In Indonesia, the motorbike often reigns supreme over cars. In addition to the obvious reasons of affordability and efficiency, heavy traffic is a large factor. Jakarta, for instance is one of the most congested cities in the world.
More than 76 million motorbikes were registered in the nation as of 2012, according to The Jakarta Post, citing the Central Statistics Agency.
Capitalizing on that popularity is Go-Jek, an app used commonly for ride-hailing of motorbikes. The company was reportedly valued at $1.3 billion dollars, making it Indonesia's first and only unicorn.
The company's backers include Formation Group, Sequoia Capital and Warburg Pincus.
A Gojek rider transports a passenger in Jakarta on February 2, 2017.Bay Ismoyo | AFP | Getty Images
CNBC recently tested out the service on the Indonesian island of Bali. The 10-minute ride on a motorbike, cost the equivalent of about 30-cents. While cash payment was accepted, using payment platform GoPay would have offered a roughly 25-percent discount.
Southeast Asia has seen Uber and Singapore-based Grab expand aggressively, and both companies also offer a motorbike option in parts of Indonesia.
"It's a most uniquely positioned company and I don't see it as a pure Uber or Grab competitor but as a hybrid tech play. Its payments capabilities and wide array of customer offerings are most interesting," Ozi Amanat, founder of venture capital firm K2 Global told CNBC.
"Southeast Asia is a vibrant economy with a massive population and growing spending power," he added.
Indonesia is by far the largest nation in the region, with a population of roughly 250 million people. In addition to Go-Jek being homegrown, it's also at the early stages of potentially creating its very own ecosystem, similar to WeChat in China.
Not only can users order a ride from bikes and cars, Go-Jek is also used as a food delivery service and as an online payments system. For instance, users can order Starbucks on the app and a biker then picks up the job for delivery.
Go-Jek was recently in talks to raise an additional $1 billion, according to The Wall Street Journal.
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fc14c88f7509168170ac32f19c27034c | https://www.cnbc.com/2017/04/24/as-retail-bankruptcies-climb-toward-post-recession-high-these-companies-could-be-next.html | As retail bankruptcies climb toward post-recession high, these companies could be next | As retail bankruptcies climb toward post-recession high, these companies could be next
VIDEO0:5600:56A record amount of bankruptcy filings have set the pace for the retail industryNews Videos
Ten retailers have already filed Chapter 11 this year, setting a record pace for the industry.
But the pain is far from over. With AlixPartners predicting 2017 will mark the highest number of retail bankruptcy filings since 2009, a new report from S&P Market Intelligence has named the 10 public companies it finds most at risk over the next year.
It includes Sears Holdings, which said Friday that it would shutter 92 Kmart pharmacies and 50 Sears Auto locations this year. The department store also named a new chief financial officer — its second in about six months — and said it aims to save $250 million through its latest maneuvers. If achieved, these savings would be on top of the $1 billion Sears has targeted in part by shuttering 150 locations.
S&P's list also includes Bebe Stores, the specialty apparel brand that said last week that it would close all 175 of its shops by the end of May.
"Retail's troubles are manifold, and the diagnosis is different in each struggling company's case," Jim Elder, director of risk services at S&P Global Market Intelligence, wrote in his report. "But it is widely agreed that the U.S. is overstored and that the solution for flat or declining in-store sales resides to a significant degree online, where the most sales growth is now taking place."
Most of the chains that have already filed Chapter 11 this year belong to the specialty or apparel categories. They include Payless, BCBG, The Wet Seal and Limited Stores.
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10b16d6422a6d5a7c7aa74f84edac418 | https://www.cnbc.com/2017/04/24/ceo-john-legere-dumb-and-dumber-are-drivers-of-t-mobiles-success.html | T-Mobile President and CEO John Legere says he has always felt like his mobile communications company was leaps and bounds ahead of its competitors.
"I've always told you that both dumb and dumber have been big contributors to the success of T-Mobile," he said to "Mad Money" host Jim Cramer on Monday.
Legere attributed T-Mobile's handy earnings beat on Monday mainly to its customer growth — 1.1 million total net additions — and boosted service revenues, something not seen in the wireless industry in several years.
Watch the full segment here:
VIDEO8:2908:29'Dumb and dumber' are key drivers of T-Mobile's success, CEO John Legere saysMad Money with Jim Cramer
The outspoken CEO told Cramer that competitors like Verizon have been stuck in a perpetual game of catch-up with his company, which he said took an estimated 250 percent of all of the industry's post-paid phone growth in the first quarter.
"We have had consistent growth, and, you know, whether it's an up quarter or a down quarter, whether it's highly competitive or not, our growth continues and I'm very, very pleased that we now have over 73 million customers," Legere said.
T-Mobile also upped its wireless presence in the first quarter, winning 600 mega-Hertz sold in an auction and expanding its wireless coverage to every inch of the United States, Legere said.
As the telecommunication sector evolves, Legere said he would not discount the possibility of a merger, which he said could increase both customer and shareholder value despite T-Mobile being able to do so on its own.
"We will look at the opportunities to even further accelerate that growth or create much more shareholder value, so coming at this exactly the way I dreamt we would at this period, from a position of strength and willing to talk, but not needing to, which is really a difference," he said.
But for the time being, Legere's young customer base is a promising sign that the company could have loyal consumers in store for years to come.
"The millennials skew to us," Legere told Cramer. "But it's not just the millennials, it's all customers that want us to solve the pain points of a stupid, broken, arrogant industry that they need to be part of but they hate, and I think we've got a long way to go and we're doing it on behalf of the customers, which is most important."
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cfbc33438f660993fea7ae12449e9907 | https://www.cnbc.com/2017/04/24/china-is-a-gold-mine-for-innovation-says-head-of-chinese-robot-firm.html | China is a gold mine for innovation, says head of Chinese robot firm | China is a gold mine for innovation, says head of Chinese robot firm
VIDEO1:2201:22Robots won't be replacing humans just yetCapital Connection
ZHENGZHOU, China — China holds excellent opportunities for entrepreneurship and innovation, according to Yu Zhichen, CEO of Turing Robot, a firm looking to make it big in artificial intelligence.
"I've been to the U.S., Japan, Taiwan, and Israel, and the opportunities for innovation and entrepreneurship in China are just as good — in some respects it's actually better," Yu told CNBC.
That's because China is already a pretty tech-savvy place and firms continue investing in R&D, according to Yu, who added that the country's giant manufacturing machine means everything can happen in one place.
Like in many countries, technology firms have taken the spotlight in China's entrepreneurial space. And it's an increasingly important part of the growing private sector, as the government guides the economy away from the old growth model of manufacturing and exports, and into the modern era with services and consumption as the main drivers.
Beijing has made it clear that developing advanced technology and capabilities are a priority. In 2015, the government announced its "Made in China 2025" plan, a policy initiative meant to supercharge development in key high-tech areas including advanced medical devices, semiconductors and aerospace equipment.
But some critics have said that plan will unfairly prop up Chinese companies as the government pays out giant subsidies and gives domestic firms preferential treatment. It may also mean foreign firms start to lose access to the Chinese market.
Above Image: Robots from Turing Robot. Courtesy Turing Robot.
No matter how that policy plays out, Chinese innovators seem determined to forge ahead with a new generation of entrepreneurs. That's not a surprise given the success of tech titans like Jack Ma of Alibaba and Robin Li of Baidu.
Turing Robot, for instance, has not only developed a voice recognition software that is capable of understanding Mandarin and overlaying that with artificial intelligence services, but it has also created an operating system that can be used for robots — including a toy robot meant to offer companionship to children.
In the long run, robots could end up with the ability to do tons of things. But we're still at least a few years off from having to worry about machines replacing humans, said Yu, 32.
"At this point, the technology still needs time to develop — maybe in 5 to 10 years we can start worrying about this issue," he said. Plus, "robots should be seen more as a friend, rather than competition."
In the future, though, robots are likely to contribute an increasing amount to the overall economy. "As this industry develops, robots will add more support and take on more duties," Yu said. And when asked about a suggestion that Bill Gates has before raised, a tax on robots, Yu said the idea could very possibly become reality — especially if machines begin adding more value to GDP.
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6fb406b7b1fa08d731be8bd9f798c7ab | https://www.cnbc.com/2017/04/24/facebook-fake-news-sheryl-sanberg.html | Facebook doesn't want to be the 'arbiter of the truth', top exec Sheryl Sandberg says, amid fake news criticism | Facebook doesn't want to be the 'arbiter of the truth', top exec Sheryl Sandberg says, amid fake news criticism
Facebook does not want to be the "arbiter of the truth", Sheryl Sandberg, a top executive at the social networking giant said, adding that the company does not see itself as a publisher.
The U.S. technology firm has been accused of not dealing with fake news articles posted on its platform. Facebook has taken a number of steps to tackle fake news including a campaign to help people spot any false articles.
"We are really a platform and we take our responsibilities on false news very seriously. False news hurts everyone because it makes our community uninformed, it hurts our community, it hurts countries. And we know that people want to see accurate news on Facebook and that's what we want them to see," Sandberg, who is chief operating officer at Facebook, told the BBC in an interview scheduled to be broadcast on Monday.
Sheryl SandbergMichael Newberg | CNBC
Some commentators have said that Facebook is essentially a publisher and should act more responsibly to take down rogue content on its platform.
"They can't just say look we're a technology company, we have nothing to do with the content that is appearing on our digital pages," WPP CEO Martin Sorrell, told CNBC in a recent interview, talking about both Facebook and Google.
But Facebook has rejected such a notion and said that is not the role it should play.
"I don't think we have to be the publisher and we definitely don't want to be the arbiter of the truth," Sandberg said. "We don't think that's appropriate for us. We think everyone needs to do their part. Newsrooms have to do their part, media companies, classrooms and technology companies."
"Well, we all have to do our part to make sure that people see accurate information and figuring out how we do that is something that we're going to have to see and will evolve. But we know the goal, the goal is for people to see accurate information on Facebook and everywhere else."
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a40d695bd89204eff6691985c1dd9c20 | https://www.cnbc.com/2017/04/24/indian-government-releases-stamp-that-smells-of-coffee.html | Indian government releases coffee-scented stamp amid growing café culture in the country | Indian government releases coffee-scented stamp amid growing café culture in the country
Those opening their mail in India will soon have the scent of coffee to look forward to, but without having to pour a cup themselves.
The Coffee Board and India Post launched a coffee-scented stamp in Bengaluru on Sunday. The Rs100 ($1.55) stamps, featuring beans, a cup of the brew and the word COFFEE, is on sale via the India Post's website, plus 84 "philatelic bureaus" across the country. Commerce and Industry Minister Nirmala Sitharaman and Telecom Minister Manoj Sinha launched the stamps at the General Post Office.
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An ad for the launch posted on Twitter by the Coffee Board states: "Sent the aroma of coffee to your loved ones. Who would you gift these scented coffee stamp?" and the board claimed in a tweet that people were already queuing to buy the stamps.
It isn't the first time India has introduced stamps that smell. According to The Hindu website, a sandalwood-scented stamp was launched in 2006, with rose-fragranced varieties following in 2007.
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India's coffee is exported worldwide, with Italy being the number one destination, taking 25 percent of exports in 2015-16, according to the India Coffee website. Nearly nine percent goes to Russia, in second place, while only 1.8 percent goes to the U.S.
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Starbucks and Costa both have stores in India as well as Café Coffee Day, which also has a range of upscale holiday resorts in the country. But tea is still hugely popular in the country, with Indians each drinking 176.6 cups per year in 2015, compared to only 16.6 cups of coffee, according to Euromonitor figures.
This year has seen a global shortage in the supply of coffee, for the third year in a row, according to the International Coffee Organization.
Follow CNBC International on Twitter and Facebook.
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628d156b995f649ba1fa32553c11fb78 | https://www.cnbc.com/2017/04/24/iphone-8-delayed-kgis-ming-chi-kuo-says.html | IPhone 8 delayed to October or November, another analyst says | IPhone 8 delayed to October or November, another analyst says
VIDEO0:5600:56Apple's iPhone 8 will be delayed, according to a KGI analystNews Videos
KGI analyst Ming-Chi Kuo said Monday that the Apple iPhone 8 won't launch until October or November, blaming "significant hardware upgrades."
His report echoes those from other Apple trackers. A rumor from Apple's supply chain earlier this month said the iPhone 8, expected to be the most premium of three new iPhones set to launch this year, was delayed by two months.
Shortly after, Drexel Hamilton analyst Brian White said the same, arguing that Apple's 5.8-inch iPhone 8 "will be delayed by several weeks due to challenges around the 3-D sensing technology but still in time for the December holidays." Last week, Bloomberg reported that supply constraints would delay the launch.
Kuo's report, like the others, suggests that Apple will launch an iPhone 7s and an iPhone 7s Plus in September, when it usually upgrades its iPhones, but that the most high-end version of the device won't launch until a month or two later.
The delayed release may hurt sales, Kuo said, according to Apple blog 9to5Mac, since some customers will want to wait for the iPhone 8 instead of the iPhone 7s or iPhone 7s Plus.
The iPhone 8 is expected to employ a curved OLED display from Samsung in addition to other new features, like the 3-D camera and possibly a fingerprint reader that's embedded in the display. Like the other reports, Kuo cited these upgrades for the delay.
Apple's most dedicated fans may want to hold out for the best iPhone it ever makes, but the bulk of consumers may be just as interested in buying the smaller advancements in the less-expensive iPhone7 upgrades.
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837d8c6114ed626b1cadd1914000eea2 | https://www.cnbc.com/2017/04/24/jack-ma-robots-ai-internet-decades-of-pain.html | Billionaire Jack Ma says CEOs could be robots in 30 years, warns of decades of ‘pain’ from A.I., internet impact | Billionaire Jack Ma says CEOs could be robots in 30 years, warns of decades of ‘pain’ from A.I., internet impact
Alibaba Chairman Jack Ma warned on Monday that society could see decades of pain thanks to disruption caused by the internet and new technologies to different areas of the economy.
In a speech at a China Entrepreneur Club event, the billionaire urged governments to bring in education reform and outlined how humans need to work with machines.
"In the coming 30 years, the world's pain will be much more than happiness, because there are many more problems that we have come across," Ma said in Chinese, speaking about potential job disruptions caused by technology.
The Alibaba founder warned that social conflicts could have a "huge impact" on all walks of life. Ma's company has invested in areas such as cloud computing and artificial intelligence as it expands into new sectors beyond its e-commerce business.
Jack Ma, Chairman of Alibaba Group at the World Economic Forum in Davos, Switzerland.David A. Grogan | CNBC
Ma said around 15 years ago he gave two or three hundred speeches warning about the impact of e-commerce and the internet on traditional businesses, but not many people listened as he wasn't well-known.
The billionaire warned that any business not linked to the internet could suffer in the future.
Ma also spoke about the rise of robots and artificial intelligence (AI) and said that this technology will be needed to process the large amount of data being generated today, something that a human brain can't do. But machines shouldn't replace what humans can do, Ma said, but instead the technology community needs to look at making machines do what humans cannot. This would make the machine a "human partner" rather than an opponent.
But he did admit that AI was likely to lead to people living longer and fewer jobs around. And robots could also replace chief executives of companies.
"30 years later, the Time Magazine cover for the best CEO of the year very likely will be a robot. It remembers better than you, it counts faster than you, and it won't be angry with competitors," Ma said.
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1efefc9662aa28f53d00a5d07d5e2e37 | https://www.cnbc.com/2017/04/24/netflix-shares-rise-after-video-streamer-hits-100-million-subscriber-milestone.html | Netflix shares rise after video streamer hits 100 million subscriber milestone | Netflix shares rise after video streamer hits 100 million subscriber milestone
Reed Hastings, chief executive officer of NetflixJoan Cros Garcia | Corbis | Getty Images
Late last week Netflix said it reached 100 million subscribers, a remarkable milestone for the video streaming service that analysts believe means this quarter's financial results may be better than Wall Street is currently anticipating.
The company also announced on Monday plans to raise more than $1 billion outside of the U.S. through a debt offering to fund its global expansion.
Netflix shares opened Monday up about 1 percent, trading around $144 per share after closing up more than 1 percent on Friday on the subscriber news.
Chief Executive Reed Hastings posted Friday on Facebook: "Celebrating 100m members the same way I did 1m: a steak alone at Denny's. #superstitious"
Now that Netflix has achieved this notable subscriber milestone, many analysts are saying the company is lowballing its guidance for subscriber growth in 2017.
If Netflix ended the first quarter with 98.75 million subscribers — as was recently reported — and has now surpassed the 100 million mark, that means the company has already made about 40 percent of its stated second-quarter subscriber guidance in just three weeks, analysts point out.
"Adding over 1.2mn [subscribers] of the 3.2mn guidance for the quarter in the first 21 days suggests a strong start," MKM Partners analyst Rob Sanderson wrote in a Monday note to clients. If this pattern continues on a linear trajectory, that would imply about 5.5 million adds for the quarter, well above Netflix's 3.2 million estimate, he added.
Further, Monday's fundraising announcement makes it clear the company is preparing to expand globally by raising $1.09 billion in a European bond offering.
"Netflix intends to use the net proceeds from this offering for general corporate purposes, which may include content acquisitions, capital expenditures, investments, working capital and potential acquisitions and strategic transactions," the company said in a statement.
As of Friday's close, shares of Netflix have climbed nearly 50 percent from one year ago and are up about 15 percent year to date.
Source: FactSet
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966216b491cb3aede86b32cce7cc3e70 | https://www.cnbc.com/2017/04/24/retailers-struggle-to-find-a-way-to-build-excitement-in-stores.html | Nearly every retailer says this is how they'll bring back traffic. But few are truly delivering. | Nearly every retailer says this is how they'll bring back traffic. But few are truly delivering.
The Frye Company’s Maker Wall lets customers shop an extended assortment while feeling the texture of the leather.Source: The Frye Company
It's one of the most common responses when retailers are asked how they plan to bring customers back into their shops: make the in-store experience more exciting.
But few have figured out what, exactly, that buzz phrase really means — and fewer still have made meaningful efforts to roll out an effective solution.
Time is running out. With mall traffic deteriorating in nearly every quarter since 2014, retailers need to hone in on what makes their brand unique and find a way to bring it alive for customers.
"I think people are falling back on experience [as a concept], and perhaps not thinking about it in the right way," Jeremy Bergstein, president of The Science Project, told CNBC. "They have to look at what their ownable qualities are."
Bergstein's company tries to help retailers find those kinds of distinct solutions. For example, if a swim shop wants to sell more bikinis, an interactive screen that virtually transports a customer to St. Bart's would likely be more impactful than a mundane "magic mirror," Bergstein said. Traditional magic mirror technologies allow shoppers to see things like what an item would look like in different colors without them having to try on multiple versions.
Thinking about what problem the retailer is trying to solve — whether it's turning more shoppers into buyers, or getting additional customers to enter a store from the street — allows The Science Project to come up with a "useful and meaningful innovation, rather than just novel innovation," Bergstein said.
Take, for instance, the company's recent partnership with The Frye Co. The two last year worked together on a San Francisco store that puts a high-tech spin on the boot maker's 154-year-old heritage.
By using radio-frequency identification (RFID) technology, shoppers can hold up a leather swatch in front of a custom screen. From there, they can shop an expanded assortment, knowing what the item's true color and texture would be.
"What we've learned is that customers sincerely want a hands-on experience," Frye's CEO, Adrienne Lazarus, told CNBC.
The technology is visible from the street, encouraging customers to come inside and interact with the brand, Lazarus said. But it also allows Frye to shrink its square footage and operate a more productive store.
Frye's goal with each of its shops is to offer a different experiential element that helps it connect with that neighborhood, Lazarus said. The brand's Nashville, Tennessee, store has a music stage as its centerpiece, and its Austin, Texas, shop incorporates custom-made guitars by local maker Moniker.
Yet even for retailers that get it right, an innovative store experience will only get them so far. Founded in 1997, Build-A-Bear Workshop was a pioneer at fusing retail with theater, allowing kids to select and customize their own stuffed animals. Even it has stumbled amid slower mall traffic, reporting its third consecutive quarterly sales decline in February.
For a retailer to succeed, it also needs to have the right product. And while technology can help deliver a dose of excitement in stores, it should also take some of the friction out of shopping, Deborah Weinswig, managing director of Fung Global Retail & Technology, told CNBC.
"There's a lot that's happening in terms of, 'how do you do things that are more one-off?'" Weinswig said. "If that's going to save retail, I'm not sure."
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2c681496c09bcf8b8256f3bd8494bd14 | https://www.cnbc.com/2017/04/24/saudi-aramcos-valuation-reportedly-off-by-500-billion-or-roughly-amazon-and-netflix-combined.html | Saudi Aramco's valuation reportedly off by $500 billion, or roughly Amazon and Netflix combined | Saudi Aramco's valuation reportedly off by $500 billion, or roughly Amazon and Netflix combined
Saudi Deputy Crown Prince, Defence Minister and Chairman of the Council for Economic and Development Affairs Mohammed bin Salman.Fayez Nureldine | AFP | Getty Images
Saudi Aramco may not be worth $2 trillion, The Wall Street Journal reported on Monday, citing people familiar with the company's highly anticipated plan to go public.
Saudi Arabia's deputy crown prince, Mohammed bin Salman, has said that the company is set to be valued at $2 trillion. But sources told the Journal that officials working on Aramco's offering have not been able to draft a model that matches that figure.
Even accounting for a more favorable tax rate, the highest valuation that employees were able to come up with was about $1.5 trillion, the Journal said, citing internal documents it reviewed and people familiar with the matter.
If correct, that would mean the initial $2 trillion valuation figure is off by a little more than the combined market valuation of Amazon and Netflix. Alternatively, the $500 billion discrepancy is a little less than the market capitalization of Microsoft.
Saudi Aramco did not immediately respond to CNBC's request for comment.
Last month, Reuters said a survey found that fund managers and institutional investors expect the company to have a market valuation between $1 trillion and $1.5 trillion when it sells 5 percent of its shares. Late March, Saudi Arabia gave Aramco a tax cut, which one analyst said could add about $1 trillion to the company's valuation.
Read the full report in The Wall Street Journal.
Watch: Aramco will surprise, says Saudi energy minister
VIDEO3:0603:06Saudi energy minister: Aramco will surprise analysts to the upside on every metricSquawk on the Street
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bc77e81151d9ae3edc16ac679adb028b | https://www.cnbc.com/2017/04/24/saudi-reversal-in-benefits-makes-opec-deal-and-higher-oil-prices-more-important.html | As Saudi Arabia gives back perks to its people, it needs a higher oil price | As Saudi Arabia gives back perks to its people, it needs a higher oil price
VIDEO2:3002:30Should OPEC extend production cut?Power Lunch
Saudi Arabia took steps to reverse some cutbacks on worker benefits and ministers' salaries — a move that could make the kingdom even more reliant on getting a higher price for oil, analysts said.
The move comes as oil flounders around $50 per barrel, and supplies have stubbornly held at high levels. It also suggests the kingdom may be even more eager to sign on to a new OPEC production deal to stabilize oil prices, analysts say.
Saudi Arabia over the weekend also announced some shifts in high-level positions. King Salman promoted two of his sons. Prince Khaled bin Salman was named ambassador to the U.S., and Prince Abdulaziz bin Salman was named state minister for energy affairs.
"It makes them want to have a [production] deal, and it certainly helps King Salman and the leadership ensure stability of policymaking going forward," said Michael Cohen, head of energy commodities research at Barclays. OPEC's technical committee recommended extending the deal to cut 1.8 million barrels a day at the cartel's next meeting in May, and Saudi Arabia last week indicated there is preliminary support for a deal.
Saudi Arabia said it made the decision to end the pay cuts and bring back bonuses because the government's financial position improved. But some analysts said it may have instead been to placate an unhappy public after measures that rolled back financial benefits and removed energy and utilities subsidies.
"They adjusted things; they claim they are adjusting things because the economy is in a better position, but that's nonsense," said Simon Henderson, Baker fellow at The Washington Institute and director of the Institute's Gulf and Energy Policy Program. "It sounds as though they felt it politically necessary to do something, which is economically risky. … They certainly need to adjust their budget."
Henderson said the moves also are another sign of Deputy Crown Prince Mohammed bin Salman's rising influence. Bin Salman, 31, is behind Saudi's Vision 2030 plan to diversify the kingdom away from oil, in part through the sale of a public stake in Saudi Aramco. Known as MBS, he is also second in line, after his cousin, Crown Prince Muhammed bin Nayef. But he is the king's favorite son and he has been upstaging bin Nayef, known as MBN.
"The essence of the main headline changes is it's MBS strengthening his power base and if not directly undermining certainly sidelining MBN," said Henderson. The new U.S. ambassador is bin Salman's younger brother. The new minister for energy affairs is his older half-brother.
VIDEO3:5903:59OPEC vs US output: What's driving oil?Squawk Box Asia
Helima Croft, RBC global head of commodities strategy, said the resumption of benefits may be a response to unrest in the kingdom. On Sunday, the king restored allowances, financial benefits and bonuses after there were calls for protests. While there were no actual protests in the street, security forces lined the streets of central Riyadh over the weekend, according to wire reports.
Reuters reported that using the Twitter hashtag "April 21 movement," Saudis sent out statements looking for the reinstatement of benefits and an end to plans to take Saudi Aramco public as well as an end to constitutional monarchy.
"The decision to reverse the civil service salary and benefit cuts will likely have the most outsized implications for oil as it will likely necessitate higher prices in order to forestall another blockbuster deficit," Croft said, in a note. The government announced the 20 percent cut in mister salaries and the sharp cut to civil service benefits in September.
"The benefit reduction caused considerable public consternation as two-thirds of Saudis work for the state, but when considered along with other spending cuts it contributed to an improved fiscal outlook," she added. Croft noted that the 2016 deficit was $79 billion, down from a record $97 billion the year earlier. The 2017 goal is for an ambitious $53 billion.
Croft said it will be difficult to meet these targets with oil bumping around the mid-$50s and lower.
"It will also probably undermine the Vision 2030 goal to scale back the public sector wage bill to 40 percent of spending by 2020, from 45 percent today," she added.
Henderson also said the fact that Saudi Arabia is rolling back some of the benefit cuts may slow down its efforts to diversify its economy. "Their revenues are already under pressure," he said
"They also need to keep the people happy, so they tweaked the lever the other way," said Henderson..
Saudi Arabia and OPEC agreed in December with non-OPEC producers, like Russia, to cut production by 1.8 million barrels a day in an effort to support oil prices. The agreement worked for a while, but oil ultimately fell below $50 again. Brent on Monday was just below $52 a barrel, and West Texas Intermediate crude futures were just above $49 per barrel.
"You need several weeks' worth of decent oil prices, holding in the $50s," said Henderson. "$50 is a marker in everyone's mind." Analysts say oil is beginning to rebalance but the data has not yet shown a big drop in supply.
"The fundamentals are pretty weak," said Cohen. "I don't think we're going to see it until the data helps reinforce that we're going to see it. It's not there yet. The shoulder season was always going to be weak, and we're not going to be out of it yet."
A high oil price is also seen as critical to the kingdom's plan to take Saudi Aramco public next year.
"The IPO is essentially bringing in the money to fund the changes you want to make for 2030, and so the less money there is, or the slower the money comes in, the slower you can make the investment changes to start the transformation in the economy," said Henderson.
The Wall Street Journal reported Monday that while Saudi Arabia has put a $2 trillion price on Aramco, it may not be worth what the prince has said it's worth. Sources told the Journal that the highest evaluation employees were able to come up with was about $1.5 trillion.
"I think the IPO process is going to be longer than people maybe a year ago would have suspected," said Cohen. "It plays into the idea of whether the IPO should really be thought of as something that could influence Saudi Arabia's decision-making process" tied to the OPEC production cut.
Saudi Arabia has been providing the lion's share of the cut.
"This is the trouble with being the world's largest oil exporter and the leader of OPEC. You have to take the burden," said Henderson.
Watch: Still about OPEC
VIDEO0:4800:48Commodities tomorrow: Still all about OPECEnergy Commodities
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9346874c2afd807429b2a4e995ce1293 | https://www.cnbc.com/2017/04/24/stock-market-risks-geopolitics-trump-earnings-and-economic-data.html | Trader Talk | Trader Talk
VIDEO1:3401:34Strong rally for stocks on French election resultsSquawk Alley
Are market risks declining? You would think so, watching the market reaction to the French election. The French CAC at a 9-year high. The (VIX), after popping early last week to the highest level since the election, is collapsing today.
More importantly the U.S. is seeing a broad rally, with three stocks advancing for every one declining, and more than 200 new highs on the NYSE.
There are four major market risks we have been discussing for months. Here they are, and here's how I assess the risk factor for each:
Geopolitical. Risk to markets: lower but still present. The markets are telling us that there was some risk premium associated with the French elections, and the premium existed not just in Europe but also in Japan and the United States. The risks are lower, but with North Korea looming, geopolitical risk is still very much present. President Trump, in a meeting with the U.N. Security Council today, said "North Korea is a big world problem."Weaker economic data. Risk to markets: high. We are expecting anemic first quarter GDP of 1.1 percent. Other measures of "hard" economic news, including Retail Sales, have generally been weaker than expected. Bulls are insisting that first quarter economic data has been weak for several years and that second quarter data will show notable improvement. They have a major ally in global growth ex-U.S., which is clearly in a modest uptrend. The French outcome can only be helpful to the European economy, and likely to European bond yields.The high valuation of the stock market and the risk from disappointing earnings. Risk to markets: was high but is now moderate. With stocks trading at more than 18 times 2017 earnings, traders were nervous going into the first quarter earnings season. Expectation have been high for the first quarter (11 percent growth in the S&P 500 would be the best quarter since Q3 of 2011) but there's been anxiety about guidance for the full year, particularly in the absence of any hard news on tax cuts. So far, the news has been positive. Banks noted anemic loan growth but were generally upbeat about the U.S. economy and in the belief that interest rates would indeed be higher in the second half of the year. And a half-dozen big Industrial names not only beat earnings expectations but they also raised full-year guidance. The biggest problem right now is that stocks are so expensive that buying enthusiasm is very muted.Fiscal reforms pushed out. Risk to markets: moderate. President Trump's tax comment last week that a "massive" tax bill was coming was clearly an exaggeration. We now know there will only be a statement of principles out by Wednesday. We already know the principles, traders want specifics. The market continues to believe that the combination of lower taxes, infrastructure spending, and fewer regulations will be a positive for the markets. The problem is that the outcome is so varied that there is a strong chance corporate tax cuts will only be very moderate.
Supporters of French presidential election candidate Emmanuel Macron celebrate after the results of the first round of the presidential election, on April 23, 2017 at the Parc des Expositions in Paris.Eric Feferberg | AFP | Getty Images
Where does this leave us? The S&P 500, at roughly 2,370, is about 30 points below its March 1st record high. That is just a little above the middle of the trading range we have been in since the middle of March, that is, between about 2,325 and 2,400.
The likely outcome will be a short-term trading range but the long-term risk is clearly to the upside. Why?
Absent a geopolitical crisis, the other risks have a good chance of resolving to the upside. Earnings growth expectations are holding up, so far. U.S. economic data is likely to improve, which means there are no signs of an economic recession, the surest killer of rallies, and there isn't even a big indication of a correction on the horizon. Lowry's, the oldest technical analysis service, noted this morning that classic signs of market deterioration, like selective leadership and days of heavy selling, are still nowhere to be seen: "Those signs of lengthy deterioration are simply not in evidence at the present time."
No wonder the markets are rallying.
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c5de61d030b9c0bfe7477394ed6cf039 | https://www.cnbc.com/2017/04/24/tesla-will-double-number-of-supercharger-stations-in-2017.html | Tesla will double number of Supercharger stations in 2017 | Tesla will double number of Supercharger stations in 2017
VIDEO0:5700:57Tesla is planning on doubling its Supercharger networkNews Videos
Tesla has revealed details of its plan to expand its Supercharger network, a top priority for the company.
Tesla will double the number of Supercharger stations in 2017, to both expand the reach of its network of fast electric car chargers, and to shorten wait times at existing stations.
The announcement comes as Tesla gears up to launch its Model 3, a mid-priced electric sedan that marks Tesla's planned transition from a niche maker of high-end electric cars to a manufacturer serving the mass market.
Tesla began 2017 with 5,000 Superchargers around the world, according to an update to the company's blog. By the end of the year, Tesla plans to have 10,000 of them, as well as 15,000 Destination chargers, which are charging stations at hotels, resorts and restaurants (currently there are 9,000 of those.)
The company's plan will increase the number of chargers by 150 percent in North America, adding 1,000 chargers in California alone.
The company also said it will build larger Supercharger sites along the busiest travel routes, and provide stations for local drivers in those areas further away from the highway, so local drivers are not competing for space with travelers.
The maps below show existing Supercharger sites in red, and planned sites in grey. First is North America, then Europe, then Asia.
Tesla has always encouraged owners to charge their cars at home overnight, and indeed many do. But as Tesla cars have become more numerous, some drivers have complained of lines and long waits at busy Supercharger stations.
It takes about 30 minutes to charge a Tesla battery to 80 percent of its capacity, depending on the battery size, which gives around 170 miles of driving. Tesla says this is typically enough range to get a driver to the next nearest Supercharger station.
Indeed, the company has discussed its intention to expand its network before — last November, the company said it would change the Supercharger program to "reinvest in the network."
Teslas bought after January 15, 2017, are given about 1,000 miles worth of free Supercharging credits every year, which Tesla said should cover the needs of most of its drivers. Drivers who use the network above that allotment have to pay a small fee.
UBS analyst Colin Langan estimated in a note published in March that Tesla would have to make considerable investments — costing up to billions of dollars — in expanding its charger network as its fleet grows.
Tesla's plan to develop a semi truck could also require an expansion in Supercharging stations, or some alternative (such as a battery swap program) that would allow commercial truck drivers on tight schedules to recharge their vehicles quickly and conveniently.
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309823a7f001825be67dfc806b7ae030 | https://www.cnbc.com/2017/04/24/trump-reportedly-still-wants-a-15-corporate-tax-rate-even-if-it-falls-short-on-revenue.html | Trump reportedly still wants a 15% corporate tax rate, even if it falls short on revenue | Trump reportedly still wants a 15% corporate tax rate, even if it falls short on revenue
VIDEO1:1201:12Trump wants to cut corporate tax rate to 15% -DJPower Lunch
President Donald Trump still wants a 15 percent corporate tax rate, The Wall Street Journal and NBC News reported Monday, a plan that could cause trouble in keeping the deficit in check.
Trump campaigned on a 15 percent rate for businesses, as well as across-the-board income tax cuts, but most analyses of the proposal said it would balloon the U.S. deficit. The House Republican tax proposal championed by Speaker Paul Ryan calls for a 20 percent corporate tax rate, along with the revenue raised by the controversial border adjustment provision.
The current corporate rate is 35 percent.
The Journal reported that Trump wants to sell a major tax cut to Americans, even if it means reducing revenue. Trump told staff to "get it done" before his planned Wednesday announcement on tax reform, according to the newspaper.
During his campaign, Trump said that easing the burden on individuals and businesses would help to boost the economy. Still, a plan that makes the U.S. budget deficit grow could have serious trouble clearing the Republican-controlled Congress.
Treasury Secretary Steven Mnuchin and White House chief economic advisor Gary Cohn will head to the Capitol on Tuesday to meet with Ryan, Senate Majority Leader Mitch McConnell and other top lawmakers.
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620e3726c155410cfb3bab182d01549b | https://www.cnbc.com/2017/04/24/trumps-sagging-poll-numbers-overshadow-view-on-us-economy.html | Trump's sagging poll numbers overshadow Americans' optimistic view on the economy | Trump's sagging poll numbers overshadow Americans' optimistic view on the economy
President Donald Trump looks at an executive order during a signing ceremony with Treasury Secretary Steve Mnuchin at the Treasury Department in Washington, U.S., April 21, 2017.Aaron P. Bernstein | Reuters
With President Donald Trump's 100-day mark in the White House coming Saturday, a new poll finds that he is "the least popular chief executive in modern times."
His approval rating sits at 42 percent, a new Washington Post/ABC News poll found. The newspaper said that's the lowest recorded at this stage of a presidency dating to Dwight Eisenhower. However, the poll found that Trump has one remarkable achievement on his so-called balance sheet that's related to the economy.
Those individuals who say the U.S. economy is "getting better" outnumber those who say it's "getting worse," and the two opinions are now separated by the biggest margin in 15 years, according to the poll, which was published Sunday.
According to the poll, 30 percent think the economy is "getting better," 18 percent "getting worse," 49 percent "staying the same" and 3 percent "no opinion."
A larger majority in the poll also approve of Trump's efforts to pressure U.S. companies to keep jobs within the country.
Source: Washington Post-ABC News poll
This optimistic view of the economy, though, seems divided along party lines.
The gap between Democrats and Republicans' economic views — as tracked by the Bloomberg Consumer Comfort Index — has increased to its widest level since early 2009, according to a recent global macroeconomic research note from Goldman Sachs.
"The correlation between economic sentiment and political affiliation is ... visible in regional data," Goldman said in the report to its clients.
"The regions that voted strongly for Trump are the regions that are most optimistic about the future. ... The regions that voted for Trump are [also] the regions that have the lowest assessment of current conditions."
Further, "many investors believe that the rally in U.S. sentiment (and asset markets) reflects post-election expectations of tax cuts, infrastructure and defense spending, and deregulation," the Goldman note added.
Trump said he will make a "big announcement" on Wednesday related to tax reform, something Wall Street is monitoring closely.
The Post-ABC poll was conducted from April 17 to 20 among a random national sample of 1,004 adults interviewed on cellular and landline phones. Overall results have a margin of sampling error of plus or minus 3.5 percentage points.
Read all the results from the Washington Post-ABC News poll.
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d9e2159df946f896d7104d50f468a669 | https://www.cnbc.com/2017/04/24/trumps-timber-tariff-will-have-a-big-impact-on-lumber-futures-market-housing-stocks.html | Trump's timber tariff will have a big impact on lumber futures market, housing stocks | Trump's timber tariff will have a big impact on lumber futures market, housing stocks
VIDEO1:2201:22Paul McCulley: Canada lumber issue is 'small potatoes'Squawk Box
The Trump administration said it will impose a tariff averaging 20 percent on Canadian softwood lumber imports in retaliation for alleged improper subsidies.
Traders believe the action may initially cause lumber futures to jump, which in turn will weigh on shares of homebuilders when trading begins Tuesday. The type of lumber targeted by the tariff is used to build houses.
The Canadian loonie was already falling versus the U.S. dollar in overnight trading.
The action, the culmination of a long-running dispute between the two countries, wasn't totally unexpected as lumber futures have surged already this year in anticipation of a possible escalation of this sort by President Trump and his Commerce Secretary Wilbur Ross.
"I am surprised that the loonie is not getting hit harder," said Brian Kelly of BKCM LLC in an email. "The last time the U.S. imposed tariffs on Canadian lumber was in 2006. Canada responded by tripling its exports to China."
Lumber futures are up more than 20 percent this year as traders bet it may come to this.
Lumber CME, YTD:
"Lumber futures should move higher, but this announcement has been anticipated," Kelly added. We "might get a sell the news [event], in which case you want to buy any sell-off in homebuilders in the morning."
Short-term spikes have weighed on housing shares in the past. CNBC looked at how certain related securities performed when lumber futures spiked by 5 percent or more in a single day, something that's happened 39 times in the last decade, according to Kensho.
Here's what happens, on average, on those trading days:
The average losses from housing shares are small because often times, a jump in lumber prices is because of increasing housing demand.
But not this time. If homebuilders import their lumber from Canada, this will likely hit their bottom line directly.
The falling loonie may weigh on Canadian stocks if history is any guide. Here's what happened, on average, to the iShares MSCI Canada ETF when the currency lost 0.5 percent of its value or more versus the dollar:
Shares of lumber producers subject to the tariff, such as Canfor, may come under pressure in Canadian equity trading. U.S. timber-related stocks including Deltic Timber and Potlatch Corp. will also likely be active in Tuesday's session ahead.
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b5b7b011cde7f125a857d1aade8ba3a4 | https://www.cnbc.com/2017/04/25/10-virtual-companies-offering-six-figure-salaries.html | Iconic Tour | Iconic Tour
Tim Robberts | Getty Images
More and more, companies are popping up that are completely virtual, meaning their entire team telecommutes 100 percent of the time. According to Flexjobs.com, the number of virtual companies in the United States has grown from 26 in 2014 to 125 in 2016. The reason: huge benefits, such as real estate savings, broader access to talent pools, better retention and a more engaged, loyal and productive workforce.
It's no wonder in the United States, telecommuting has grown 103 percent over the last decade; by 2020 it is projected that 50 percent of people will work remotely.
But it's not only the companies that are benefiting. When it comes to job satisfaction, people who work remotely, even just one day a week, are 48 percent more likely to rate their job satisfaction 10 out of 10 on the happiness scale, according to a recent survey by PricewaterhouseCoopers. The top reasons: fewer interruptions from colleagues, fewer distractions, reduced stress from commuting, less meetings and minimal office politics — which results in higher productivity overall.
According to Flexjobs, the top industries for virtual companies are computer/IT, HR/recruiting and education. Other industries include accounting, health, law, marketing, nonprofit, news/media, sports and travel. And many of the jobs command a six-figure salary.
Here's a list of companies created by Remote.co that are on the leading edge of this trend. The best news: They are hiring right now.
Collage founders Joe Golden and Kevin Borders.Source: Collage
Childhood friends Joe Golden and Kevin Borders launched this custom photo products company in 2012, and it quickly grew from $900,000 in revenue to more than $25 million in 2016 — without any outside investment. This explosive growth landed the company on 2016's "Michigan 50 Companies to Watch" list.
Collage.com develops easy-to-use software tools that make creating custom products easy for everyone. Since its launch, the company claims that more than a million customers have used its software to create their own unique products.
According to the company, Collage.com pays its employees anywhere from $80,000 to $140,000-plus and are currently looking to hire front-end software engineers, full-stack software engineers and a software engineering manager.
Perks include 401(k) plan, home internet reimbursement and $3,000 per year in free Collage.com products; 100 percent of the premium for full health, vision and dental insurance coverage for you and your family; flexible work schedule and unlimited vacation policy.
(Pictured here: Collage.com co-founders Joe Golden and Kevin Borders)
Automatic founder, Matt MullenwegSource: Automatic
Spread out all over the world in more than 50 countries, Automattic claims to make the web a better place formore than a billion people every month. Launched in 2005, the web development company created WordPress, which powers about 27 percent of the web. They are also the brains behind WooCommerce, Jetpack,Simplenote, Longreads, VaultPress, Akismet, Gravatar, Polldaddy, Cloudup and more. Their goal: to democratize publishing so that anyone with a story can tell it, regardless of income, gender, politics, language or where they live in the world.
There are currently 235 Automatticians working in 29 countries, 174 cities and 36 U.S. states. Automattic is currently looking to hire several engineers, wranglers, designers and a technical writer.
Benefits include fully paid parental leave, company-sponsored insurance plan, unlimited vacation and a two- to three-month sabbatical encouraged every five years.
(Pictured here: Automattic founder and CEO, Matt Mullenweg)
Articulate founder and CEO Adam Schwartz.Source: Articulate
Articulate claims its online training software is changing the way the world learns. Its e-learning tools, developed to create engaging online courses, quizzes, presentations and surveys, are used by more than 60,000 organizations worldwide, including 93 Fortune 100 companies and 19 top U.S. universities.
Articulate founder and CEO Adam Schwartz started the company in 2002 out of his one-bedroom New York apartment with the help of an SWF file format expert and an Office Object Model expert. Their home base: India and Missouri. Despite the vast distance, Schwartz refused to believe geography should trump talent. To date, the company employs 153 people on its virtual team.
Articulate is currently looking to hire a site reliability engineer, web developer and campaign manager.
(Pictured here: Adam Schwartz, founder and CEO of Articulate)
10up’s virtual team.10up’s virtual team
Launched in 2011, this web development agency emphasizes great user experiences and simple content management. 10up has more than 120 experts in digital strategy and management, software engineering, user experience and interactive design, cloud infrastructure and audience and revenue optimization. "10uppers" are located all over the United States, from New York City to the wilds of Idaho.
Annual revenue is between $15 million and $25 million, said a company spokesperson, adding that salary varies greatly depending on role, geography, seniority, responsibility and tenure, but the very upper end is more than $100K for U.S. employees.
10up believes an international clientele requires a global perspective. They are currently looking for team leads, project managers and engineers. Benefits include paid parental leave; a professional development stipend; health, dental and life insurance; 401(k) with company matching and a professional development stipend.
(Pictured here: The team of 10uppers)
Invision co-founders Ben Nadel and Clark ValbergSource: Saskia Uppenkamp
InVision is a free web and mobile prototyping platform that allows UX designers to develop and collaborate with ease. Since its launch in 2011, the company has attracted 2 million users around the globe and 70 percent of Fortune 100 companies, including Disney, IBM, Apple and Verizon. InVision currently employs 300 team members in 19 countries and offers a stipend for employees looking for office space in their hometown.
InVision offers highly competitive salaries plus options packages, along with a generous equipment allowance and travel budget, medical insurance and a free gym membership. The company is looking to boost their sales team, as well as recruit engineers, copywriters, project managers, marketing managers and more.
(Pictured here: InVision co-founders Ben Nadel and Clark Valberg)
The Seeq team.The Seeq team
Seeq's new approach to software for the process manufacturing industries is enabling companies to quickly and easily derive business insight from their industrial process data. Founded in 2013, Seeq's employees are located all over the United States and Canada. Although headquartered in Seattle, the company sponsors a number of team-building events, such as brewery tours, mountain biking, whitewater rafting and zip-line tours, as well as quarterly company retreats in destination locations, like Arizona and Oregon. Seeq also offers its employees unlimited paid time off.
Seeq offers a highly competitive salary, plus stock options and a strong medical benefits package. The company is currently looking to hire engineers and salespeople.
(Pictured here: The Seeq team at one of their team-building events)
Cheat Sheet founders Derek and Damien Hoffman.Source: Cheat Sheet
This online media company features stories in business, technology, personal finance, politics, autos, sports, entertainment and life, attracting more than 15,000,000 unique visitors and 100,000,000 page views each month. Named a Quantcast Top 125 website, The Cheat Sheet offers busy mobile readers concise news analyses that can be read quickly. Headquartered in Asheville, North Carolina, The Cheat Sheet was recently ranked as Forbes' No. 1 social media influencer on Wall Street.
The company is currently looking to hire a vice president of business development and an SEO editor. Besides offering competitive pay, health insurance and a generous 401(k) package, The Cheat Sheet encourages its team members to take advantage of their Cheat & Greet program, which pays for employees to go out to dinner, drinks or enjoy an activity with colleagues throughout the country.
(Pictured here: The Cheat Sheet co-founders, Derek and Damien Hoffman)
Worldwide founder, Sandra Lewis.Source: Worldwide
Worldwide 101 is an international virtual assistant company that provides multilingual support for businesses that want to expand into new international markets. With offices in both the United States and UK, Worldwide 101's virtual assistants serve clients on five continents.
Business-class VAs support entrepreneurs and small-business owners with a wide range of tasks, helping them to succeed and freeing them up to focus on growing their business. Each VA must have more than seven years' experience in their area of expertise, from bookkeeping, executive administration and project management to email marketing, social media, content marketing, WordPress assistance and customer service.
Pay ranges between $15 and $20 per hour, depending on experience.
(Pictured here: Sandra Lewis, founder and CEO of Worldwide 101)
Toptal co-founders Taso du Val (CEO) and Breanden Beneschott (COO).Source: Toptal
Founded in 2010, Toptal (short for "top talent") is a network of freelance software developers, designers and finance experts. The company, backed by Andreessen Horowitz, among others, provides industry experts to hundreds of companies across the globe, including JPMorgan, Hewlett-Packard, Airbnb, Pfizer and Gucci. Although the company is always looking to add to its network, the Toptal screening process is very rigorous. Many Toptalers hail from Wharton, MIT, CERN and Google.
There are a number of positions currently open at Toptal, in engineering, web design and development, project management, marketing and more.
[Pictured here: Toptal co-founders Taso Du Val (CEO) and Breanden Beneschott (COO)]
Aha founder Brian de Haaff.Source: Aha
Launched in 2013, Aha! creates visual roadmaps for product managers, allowing them to share ideas with ease and lead collaborative teams to build great products. Aha! currently serves more than 100,000 users. Employees can work from anywhere in the United States and select international locations as well.
Twice a year the team gets together in person at a travel destination location to review their progress, plan for the future, keep improving and, most of all, have some fun.
Positions are currently open in engineering, marketing, graphic design and more.
(Pictured here: Brian de Haaff, co-founder and CEO of Aha!)
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d9a97bd3d2def031594b895426048f42 | https://www.cnbc.com/2017/04/25/analyst-says-canadian-lumber-tariffs-will-not-affect-home-prices.html | Analyst says Canadian lumber tariffs will not affect home prices | Analyst says Canadian lumber tariffs will not affect home prices
VIDEO3:2603:26Lumber tariff 'just a papercut' on home construction prices: RBC CapitalPower Lunch
New tariffs on Canadian softwood lumber announced by the Trump Administration on Monday are nothing more than "a papercut," said RBC Capital Markets homebuilding and building products analyst Bob Wetenhall.
"It's not going to affect the real estate market, [and] it's not going to impact housing prices," Wetenhall said during CNBC's "Power Lunch" on Tuesday.
Yet, the iShares U.S. Home Construction ETF (ITB) dropped nearly 1 percent on Tuesday following the announcement as investors worried about an increase in costs.
VIDEO3:0203:02Sec. Ross: Lumber dispute points to need to renegotiate NAFTA Power Lunch
Wetenhall said, "The bigger, more important trend that is going to drive stocks, equity valuations [and] shareholder returns is the strength of the consumer and the health of the housing market, which is intact."
He added that as long as demand persists for new homes and interest rates remain low, he sees nothing derailing the space in terms of profitability and profit margins.
"Everyone knew [the tariffs] were coming; the 25 percent number is less than what people were anticipating. People were saying this could be 45-50 percent, so this is actually a step-down," Wetenhall said.
When asked about the effect on other products such as doors or cabinets, where lumber may be a larger share of costs, Wetenhall said: "We see minimal input cost inflation across the landscape."
Watch: Ross on lumber tariffs
VIDEO2:5102:51Sec. Ross: We don't think this will start a trade war with CanadaPower Lunch
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aa76ca54d03c4566d1db83a8ea854d4c | https://www.cnbc.com/2017/04/25/att-earnings-t-mobile-verizon-earnings-show-why-drakes-more-life-took-off.html | Drake is the real winner in the battle between Verizon, T-Mobile and AT&T | Drake is the real winner in the battle between Verizon, T-Mobile and AT&T
Taylor Swift and DrakeKevin Mazur | WireImage | Getty Images
AT&T and T-Mobile may be declaring victory among the mobile carriers this earnings season, but the real winner is another group entirely: Drake fans.
All three major wireless carriers saw less adjusted revenue than expected during the latest quarter, with AT&T reporting results on Tuesday and T-Mobile a day earlier. But as they roll out unlimited data plans to compete, consumers are using more bandwidth than ever — a boon to artists like Drake.
T-Mobile sees data volumes growing about 40 percent year-over-year, technology chief Neville Ray told analysts on a conference call, with operating chief G. Michael Sievert adding that "the era of the data bucket is over." AT&T CEO Randall Stephenson noted that unlimited data plans increase mobile video usage and "made an already competitive market even more so."
Verizon said last week that the launch of Verizon Unlimited helped stem customer losses toward the end of the quarter, noting that LTE data traffic increased 57 percent over the prior year in the first quarter.
Meanwhile, Drake's new album "More Life" hit a record in March for most streams in a single week in the U.S., according to Nielsen.
While it's unclear how many of those are on mobile, it's increasingly becoming the medium of choice as data restrictions loosen. An Accenture report published this week saw a steep decline among those who prefer a TV set to laptops, desktops and smartphones.
Other streaming services have also made big strides on mobile. Netflix, for instance, added slightly fewer-than-expected subscribers in the first quarter, but that didn't stop it from crushing rivals in the App Store, where Sensor Tower estimates sales grew 63 percent in the first quarter. Six of Sensor Tower's top non-game apps by revenue were for streaming video or music. Just last week, YouTube jumped to the top of the App Store thanks to live streaming, according to separate data.
So while Drake's fans "used to call him on his cell phone," maybe now they are using it to stream him instead.
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b1c7ce4131c9696e15bf9d85035e0b17 | https://www.cnbc.com/2017/04/25/banks-and-trump-the-rally-has-met-reality.html | Banks and Trump: 'The rally has met reality' | Banks and Trump: 'The rally has met reality'
VIDEO2:3702:37This group of banks could breakoutFutures Now
Banking is the one industry above all others that should cruise higher during a Trump administration, but the road likely won't be smooth.
In business terms, no one cheered louder than financial institutions after President Donald Trump's stunning November election victory. The sector surged more than 25 percent on hopes that higher interest rates, stronger growth and less regulation would be the boon that banks needed.
Nearly 100 days into the Trump administration, the picture has become muddied.
The muscular performance after the election didn't last, and the sector is about flat now for the year. First-quarter earnings saw strong profits for banks, but weak lending. The initial steps toward deregulation finally came about last week, but there's much to be done.
In all, banks face as uncertain a future as pretty much anything else in the Trump economy.
"Since the inaugural, many of the public policy issues that had been factored in have dissipated from the stocks. The rally has met reality," said Fred Cannon, director of research and chief equity strategist at financial services firm Keefe, Bruyette & Woods. "Now bank stocks have gone from very exciting, where everything's going to get better, to a show-me kind of a thing."
If the current momentum is any indicator, banks could be ready to show a lot.
Financials — a sector that includes insurers, investment funds and real estate, in addition to banks — have reported earnings growth of 16.4 percent, with revenue growing more than 9 percent. Bank stocks specifically, however, actually fell about 1.5 percent during the first three months.
That postelection performance through the end of 2016 was going to be hard to keep up. The initial surge came on hopes that Hillary Clinton's loss would be mean less pressure on Wall Street.
The real proof now will come through the year, as fundamentals and the outlook for policy and regulations come more clearly into focus. In addition to Trump's push for deregulation, the Federal Reserve already has hiked its benchmark interest rate once since Inauguration Day and is likely to approve one or two more increases before the year is out.
Kenneth Burgess, chairman of the First Capital Bank of Texas, from left, speaks while U.S. President Donald Trump, Dorothy Savarese, chief executive officer of the Cape Cod Five Cents Savings Bank, and Gary Cohn, director of the U.S. National EcoKevin Dietsch | Bloomberg | Getty Images
"A lot of (the initial rally) was that we don't have (Massachusetts Sen.) Elizabeth Warren whispering into the ear of the president and the secretary of the Treasury," said Richard Farley, head of law firm Kramer Levin's leveraged finance group. "There was an embedded discount in the market because of the expectation of a Democratic presidency and Senate and an administration that wanted to stay in good stead with the extreme left of the Democratic Party."
Trump's rhetoric has alternated between being tough on Wall Street risk-taking on the one hand, and wanting to use deregulation to accelerate bank lending on the other.
"Consumers, investors and entrepreneurs have been winners" under Trump, said John Berlau, senior fellow at the Competitive Enterprise Institute, a free-market think tank. "The banks that want more freedom, that are innovative, will be winners. The banks that want government support for things like the SIFI designation and use regulation to block their competition are going to be some of the losers."
While consumer and mortgage lending has grown since the recession, commercial and industrial lending — a reliable barometer of economic growth — has stalled of late and raised concerns about the economy's potency.
"The most troubling thing is the weaker-than-expected loan growth," Cannon said. "If that persists into the second half of the year, the whole view that we're really going to get better growth plus higher rates plus blue-sky issues will really dissipate."
In the meantime, Trump has taken some concrete steps toward loosening the shackles on banks and taking some of the teeth out of the post-crisis Dodd-Frank reforms.
Separate directives issued Friday call for a re-evaluation into what makes a bank a "systemically important financial institution," or a SIFI, which requires stricter regulations, as well as an evaluation of the living wills banks must formulate should they become too big to fail and need to be broken up.
"In sum, these executive orders signal a willingness by the president to take some action on Dodd-Frank," analyst Dick Bove, vice president of equity research at Rafferty Capital Markets, said in a note to clients. "In real terms, however, even if they result in some rule changes, the impact on the industry will be negligible."
The moves may be viewed as incremental, but bank stocks have rallied in their wake.
Credit Suisse analyst Susan Roth Katzke believes shares will see some volatility due to the policy uncertainty under Trump, but sees the big banks heading higher. She estimates earnings for the group will grow 11 percent on an annualized basis.
"We will continue to assess valuations cognizant of the economic cycle, but equally as willing to embrace the changed/changing operating environment," Roth Katzke said in a note.
To be sure, not everyone is on board with what Trump is doing, and any efforts he makes that require congressional approval are likely to face a stern test from Democrats.
"After the 2008 financial crisis almost destroyed our economy, Wall Street reform put tools in place to protect working Americans from once again bailing out 'too-big-to fail' banks and financial institutions. Any actions to undermine these protections encourage Wall Street's risky behavior and leave taxpayers and our economy exposed to another catastrophe," Sen. Sherrod Brown, D-Ohio, said in a statement.
Indeed, it's against a skeptical political backdrop that Trump will have to sell his plans for banking.
Banks are "so far winners," said Farley. "But you don't give out any prizes at halftime, and we're not even at halftime yet."
WATCH: Pimco analyst says this will 'the first year in a long time' that banks will outperform:
VIDEO2:4602:46Banks don't need a growth miracle to rally: PimcoSquawk Box Europe
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948a528bbc61977362ef3134c1603424 | https://www.cnbc.com/2017/04/25/cramer-compares-the-2000-dotcom-bubble-bust-to-todays-market-moves.html | VIDEO2:3302:33The 2000 dotcom bubble burst to & today's market movesMad Money with Jim Cramer
Jim Cramer is always up for analyzing the stock market's valuation when commentary suggests that it has run too far too quickly and is too expensive.
"I want to tackle head-on the notion that the Nasdaq is overvalued, something we heard a lot of chatter about today because the index blasted through the 6000 level, and whenever we crash through big round numbers, it tends to cause instant soul-searching," the "Mad Money" host said.
When the Nasdaq sees a big run, people tend to recall the last time it skyrocketed, Cramer said. In this case, it happens to be early 2000, when the index approached 5000 then dived thousands of points, crushing a whole class of investors.
Watch the full segment here:
VIDEO11:3311:33Cramer compares the 2000 dotcom bubble bust to today's market movesMad Money with Jim Cramer
To Cramer, the comparison feels somewhat forced. The companies that drove the Nasdaq to 5000 back then ended up either being overvalued or, in Cramer's words, "plain old worthless."
So the "Mad Money" host decided to compare the leading stocks' future price-to-earnings multiples to see whether there is any weight to the argument that today's market is too pricey.
In 2000, tech giants were already running the show. Microsoft traded at 59 times earnings, Cisco at 179 times earnings, Intel at 126 times earnings and Oracle at 87 times earnings.
Now, Microsoft trades at 20 times earnings, Cisco at 13 times earnings, Intel at 17 times earnings, and Oracle at 16 times earnings.
"When you consider that the average stock in the S&P 500 sells for 21 times earnings, not only are these four tech stocks ridiculously undervalued versus their prices back then, they're actually cheaper than the average stock in the S&P right now," Cramer said.
When the tech bubble burst it dragged those market leaders into oblivion. But today, all four are considered value plays complete with regular stock buybacks and good dividends at a fair price.
Cramer understands why some investors worry about market leaders like Amazon and Netflix, which appear to have inflated valuations like the once-doomed tech stocks did in 2000.
But the "Mad Money" host is not convinced that this means the online powerhouses are due for a crash.
"Amazon has the greatest sales momentum of all time," Cramer said. "I've never seen a company this large grow so fast in a market that's worth trillions upon trillions of dollars worldwide."
Even in 2000, investors would pay up to Amazon's multiples for growth. But Cramer noted a key difference: unlike the growth stocks then, Amazon has huge cash flows and makes billions.
"It just chooses to keep spending that money so it can grow even faster," he said.
Netflix strikes Cramer as an opportunity stock, one that has massive growth potential that investors will also cough up cash to buy. As the streaming giant cracks into new global markets, it attracts eager money managers along the way.
Moreover, the other stocks in the Nasdaq's top 10 biggest names are also relatively cheap. Apple trades at 14 times 2018 earnings and has a large dividend, big buyback, and lots of cash.
Alphabet, parent of Google, may seem expensive, but at 18 times earnings is cheaper than the average and also has a mountain of overseas cash as well as a large buyback. Facebook sells at the average price of a Nasdaq stock.
"Now, some of you might say, 'Wait a second, all of these stocks could still prove to be wildly overvalued if the global economy turns upside down,'" Cramer said. "But right now, things seem to be doing just fine, and they could be getting even better if President [Donald] Trump can push his tax cuts and repatriation plans through Congress."
So as the indexes continue to rally, Cramer insists that you do your homework on the companies that market players have deemed too expensive.
"Even though the Nasdaq 100 is up 14 percent year to date, I refuse to call it overvalued not only versus 2000, but compared to many other eras that I have to admit seemed a lot less risky," Cramer said. "One more reason to stay the course and do some buying if this darn market would ever give you a pullback."
Questions for Cramer? Call Cramer: 1-800-743-CNBC
Want to take a deep dive into Cramer's world? Hit him up! Mad Money Twitter - Jim Cramer Twitter - Facebook - Instagram - Vine
Questions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com
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a3b97e3f60ea096ea131d643528f9eca | https://www.cnbc.com/2017/04/25/google-begins-offering-rides-in-self-driving-cars.html | Google begins offering rides in self-driving cars | Google begins offering rides in self-driving cars
A Waymo self-driving car.Source: FCA
Fiat Chrysler and Google for the first time will offer rides to the public in the self-driving automobiles they are building under an expanding partnership.
The companies announced in the spring of last year that they would build 100 self-driving Chrysler Pacifica hybrids minivans. Those vehicles have been tested in Arizona, California and Michigan.
Waymo, Google's self-driving care project, said Tuesday that it will allow hundreds of people in Phoenix to take rides in the vehicles so that it can get feedback on the experience. People can apply on Waymo's website.
The company also said that it's expanding its fleet to 500 Pacifica hybrids.
Waymo — created by Google in 2009 — has given rides to the public before in its hometown of Mountain View, California. In 2015, it let a blind man ride around Austin, Texas, in one of its completely self-driving pods. The Phoenix program will be much larger in scale, and it will be the first to use the Pacifica minivans.
Others in the race to develop self-driving vehicles have been putting people in their cars since last fall. Uber has had self-driving Volvos on the road in Pittsburgh for some time. Boston startup nuTonomy is giving taxi rides to passengers in Singapore and Boston. In all cases, there is a backup driver behind the wheel.
Waymo said it wants to learn where people want to go in a self-driving vehicle, how they communicate with it and what kinds of information and controls they want.
Fiat Chrysler builds the Pacifica minivan in Windsor, Canada, just across the border from Detroit. It adds Waymo's self-driving software and hardware, including sensors and cameras, at a facility in Michigan. Fiat Chrysler's U.S. headquarters is in Auburn Hills, Michigan.
"This collaboration is helping both companies learn how to bring self-driving cars to market, and realize the safety and mobility benefits of this technology," said Waymo chief John Krafcik in a company release.
Our early riders will play an important role in shaping the way we bring self-driving technology into the world through personal cars, public transportation, ride-hailing, logistics and more. Self-driving cars have the potential to reshape each and every one of these areas, transforming our lives and our cities by making them safer, more convenient and more accessible.
Waymo has made clear that it intends to form partnerships with automakers and not build its own self-driving cars. It's also in talks with Honda Motor Co. about a potential collaboration.
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76220f83b9aa267c56b650eb5601d5d2 | https://www.cnbc.com/2017/04/25/homebuilder-stocks-slide-after-us-slaps-20-percent-tariffs-on-canadian-lumber.html | Housing stocks take a hit from Trump's lumber tariff | Housing stocks take a hit from Trump's lumber tariff
VIDEO1:4201:42Canadian lumber tariff hits homebuildersSquawk on the Street
Homebuilder stocks fell on Tuesday on concern new tariffs by the Trump administration on Canadian softwood lumber imports will raise costs.
The new tariffs average to about 20 percent and were announced Monday night.
The iShares U.S. Home Construction ETF (ITB) fell about 1 percent Tuesday. PulteGroup's stock closed down almost 4 percent, and Toll Brothers shares ended the day nearly 1 percent lower. PulteGroup also said its first-quarter results missed analyst estimates.
Shares of D.R. Horton also pulled back, closing down over 1 percent.
"We expect builders to attempt to combine surcharges to customers with someacceptance of lower margins as a way of coping," wrote Carl Reichardt of BTIG in a note Tuesday. "Expect stocks to react negatively today with volatility to come as this issue plays out."
The analyst notes that lumber accounts for 8 to 12 percent of the cost of a new home.
The trade action, the culmination of a long-running dispute between the two countries, wasn't totally unexpected as lumber futures have surged already this year in anticipation of a possible escalation of this sort by President Donald Trump and U.S. Commerce Secretary Wilbur Ross.
"The reason we're putting it on is because Canada's forests are owned by the various provinces and the provinces charge very discounted … prices to the lumbermen, which in turn lets them get subsidized low prices coming into the U.S.," Ross told CNBC's "Squawk Box" on Tuesday.
"It seems unfair because in the U.S. most of the forests are privately owned and, therefore, they pay full market price," he said.
Lumber futures for May delivery fell 2.53 percent Tuesday to $385.10 per thousand board feet as investors took profits after the already blockbuster year for the commodity.
"Lumber futures should move higher, but this announcement has been anticipated," said Brian Kelly of BKCM. We "might get a sell the news" event.
Lumber futures are up more than 20 percent this year.
"It was priced in a couple weeks ago when there was talk the tariff was going to happen," said Daniel Flynn, trader at The PRICE Futures Group. "Markets tend to overreact on a headline. Right now, nervousness" in the market.
Canadian lumber stocks, on the other hand, rose sharply, including Canfor shares, which popped more than 6 percent.
—CNBC's John Melloy and Evelyn Cheng contributed to this report.
Watch: US will pay more for homes, says Canadian CEO
VIDEO3:0703:07Nighbor: Lumber tariff will hurt Canadian mill communities, US will pay more for homesPower Lunch
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26dac1fcf4d104d378752ada9036534f | https://www.cnbc.com/2017/04/25/j-crew-to-cut-250-jobs.html | J.Crew to cut 250 jobs as part of reorganization | J.Crew to cut 250 jobs as part of reorganization
Privately held specialty retailer J.Crew is cutting 250 jobs, it announced on Tuesday.
The move comes as it embarks on several strategic changes. As part of a reorganization, J.Crew will reduce headcount by approximately 150 full-time and 100 open positions, mostly from its corporate headquarters.
J.Crew expects to realize about $30 million of annualized pre-tax savings by downsizing its staff and will record a charge of approximately $10 million in the first quarter for severance payments and other termination costs.
"We take these difficult decisions very seriously, but believe they are absolutely necessary," said Mickey Drexler, the retailer's chairman and CEO, in a release. "We are streamlining our teams as we evolve our business and processes to cater to the new demands of the retail industry."
It will also shuffle some executives into new roles.
As part of the reorganization, J.Crew COO and CFO Michael Nicholson will take on additional responsibility in planning and allocation, merchandising, marketing and design functions. Meanwhile, J.Crew named Lisa Greenwald, who will become the Chief Merchandising Officer, a position that reports to Nicholson.
Somsack Sikhounmuong became its Chief Design Officer earlier this month, while Libby Wadle has been named president of the company's Madewell unit.
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e8f956f6d65a38aaecebcbd8b6a4f517 | https://www.cnbc.com/2017/04/25/markets-le-pen-france-trump-dow-stocks-stoxx-europe.html | Reaction: Wall Street stocks trade higher; Nasdaq hits 6000 amid earnings and economic data | Reaction: Wall Street stocks trade higher; Nasdaq hits 6000 amid earnings and economic data
Our live blog tracked reaction as Wall Street stocks trade higher open amid investors eyeing a flurry of earnings and data.
Here's what happened.
(App users please click here).
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f44c832e20ab338b4a6d6fda9b831e6a | https://www.cnbc.com/2017/04/25/natural-gas-why-its-important-and-what-you-need-to-know.html | Natural gas: Why it's important and what you need to know | Natural gas: Why it's important and what you need to know
Cameron Davidson | Photographer's Choice | Getty Images
As the world looks to diversify its energy mix one source, natural gas, is becoming increasingly important. The International Energy Agency (IEA) says that natural gas is viewed "as a good source of electricity supply" for a range of reasons.
According to the IEA, natural gas is seen as "lower carbon" relative to other fossil fuels. In addition, it takes around two years to build gas plants, which is seen as being relatively quick, while its share of the global energy mix is increasing at two percent annually until 2020. For its part, the U.S. Department of Energy has described natural gas as playing a "vital role" in the U.S. energy supply. The DOE says that natural gas consumption is set to hit 26.6 trillion cubic feet by 2035, up from 24.3 trillion cubic feet in 2011. Downsizing
One way to transport natural gas is by cooling it and turning it into liquefied natural gas, or LNG. The U.S. Energy Information Administration says that, in its liquid state, the volume of natural gas is "about 600 times smaller than its volume in its gaseous state."
The U.S. gets most of its LNG imports from Trinidad and Tobago, which accounted for 78 percent of imports in 2015. Building bridges
Liquefied natural gas, or LNG, is seen by some as a bridging fuel, but what does that mean? "It's all about really moving away from dirty fossil fuels and into clean renewable energy," Chong Zhi Xin, principal analyst at Wood Mackenzie, told CNBC's Sustainable Energy. "So if we look in the past, a lot of base load power really came from coal as well as oil, and we're looking at a future where you're looking at zero carbon emissions from solar, from wind," Xin added. "But in order to get there it is difficult today, you can't completely switch your industries to using renewables. And that's where gas really comes in as a bridging fuel: it is clean, and it can provide base load power."
A range of uses Wood Mackenzie's Chong Zhi Xin went on to tell Sustainable Energy that natural gas had a range of uses. "Natural gas can… be used in the power sector, it can also be used in industries for heat generation, it can be used in the fertilizer sector to create ammonia, and lastly it can also be used in the transport sector, as CNG (compressed natural gas), or in LNG for long haul trucks."
The transport sector was another avenue of interest. "I think a lot of economies around the world… (are) really looking at EVs (electric vehicles) as the way forward for transport, but more importantly I think natural gas can really work to support these EVs," Zhi Xin said. "EVs really require power from the grid, and that's where natural gas being used in the power generation sector could support the development of all these electric vehicles," he added.
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4584c157650d5de852a93d627f2dd89d | https://www.cnbc.com/2017/04/25/stock-buybacks-could-boom-under-trump-tax-reform-but-theres-a-catch.html | What to expect in a stock buyback boom under Trump's tax-reform plan | What to expect in a stock buyback boom under Trump's tax-reform plan
Donald TrumpJabin Botsford | The Washington Post | Getty Images
One of the ideas that seemed like a no-brainer in a Donald Trump-led stock market was to bet on a bigly benefit from stock buybacks. Analysts agree buybacks will blossom if the administration gets its way on corporate tax cuts.
So how have domestic stock buyback funds done since Trump's election? Looking back, you wouldn't buy them. They've been laggards compared to a straight-up S&P 500 bet.
The two exchange-traded funds whose strategy is to ride U.S.-based companies that buy back the highest percentage of their shares have risen less than the Standard & Poor's 500-stock index this year. The best buyback ETF, by far, is the one most divorced from U.S. tax policy: the $125 million PowerShares International Buyback Achievers Portfolio (), which is up 9 percent this year, according to Morningstar data through April 20, placing it way ahead of the U.S. buyback funds and also ahead of the global MSCI ACWI index. In general, the U.S. market this year.
John Feyerer, director of equity ETF product strategy at PowerShares, said IPKW may continue to benefit from ongoing quantitative easing in both the EU and Japan, which has served to strengthen corporate balance sheets and provide cash for buyback programs. Companies in Japan, in particular, have announced a record amount of buyback programs amidst an environment that has a continued focus on enhancing shareholder value. The ETF has nearly one-third of its weight in Japanese equities and an additional 25 percent of its weight in European equities.
VIDEO1:2601:26Things could be looking up for JapanSquawk Box Asia
The biggest buyback ETF has done the worst: Invesco's $1.4 billion PowerShares Buyback Achievers Portfolio (), including U.S. stocks, is up just 2.88 percent. The relatively small State Street's SPDR S&P 500 Buyback Achievers Fund () is up 4.47 percent. That's despite projections by Goldman Sachs that big companies will spend as much as three-quarters of any gains from repatriating profits made outside the United States on buybacks. They spent repatriated gains on buybacks the last time Congress offered a tax holiday, even though it was technically prohibited, according to congressional research.
More from Trading the World:Why millionaire investors don't care about Trump's time-traveling tax reformYou may actually want to reject this investing advice from Bogle and BuffettPick up in global growth concentrated on emerging markets: Economist
"Mostly, this has been a wait-and-see trade," said David Nadig, CEO of ETF.com. "For traders I talk to, tax reform seems like such an uncertainty at this point that it's hard to bet on anything."
There are three big reasons why Trump hasn't been able to boost the buyback bandwagon much, experts say.
1. The biggest holdings in buyback funds aren't the same companies that have the most offshore cash, and which are expected to benefit most if Trump's expected tax proposal becomes law.
Buyback funds pick stocks that have bought back a lot of shares in the past, but companies like Apple and Microsoft, which are sitting on the most offshore cash, have not bought back a high enough percentage of their shares to be major holdings for buyback funds. Technology stocks have led the U.S. market this year.
PowerShares Buyback Achievers Portfolio top holdings include Boeing, McDonalds, General Electric, Goldman Sachs, United Technologies, Gilead Sciences and American Express. The tech sector is less than 9 percent of the ETF, according to Morningstar, while financials and consumer cyclicals comprise roughly 50 percent. The five biggest winners under the repatriation provision of Trump's bill are expected to be Apple, Microsoft, Alphabet, Cisco Systems and Oracle, Moody's Investor Service estimated last fall. Not one of these stocks is among the top 25 holdings in PKW, according to Morningstar ETF holdings information.
"Apple has done some buybacks, but not to the extent of a Boeing or a GE," Nadig said. He added that the move in buyback shares "won't be about the funds — it will be about the single-share plays" that will become big buyers of their own stock once the tax break is law.
Although the ETF's methodology looks at the corporations that have bought back shares outstanding of 5 percent or more in the trailing 12-month period, the ruled-based approach serves investors well in that they are able to understand just how PKW will behave, Feyerer said. "It takes the emotional aspects out of shorter-term trends that may or may not prove beneficial." And until tax reform and cash repatriation become reality, "we think it's most prudent for investors to consider strategies that have proven value over time," he added.
2. The Trump tax bill may be arriving sooner than expected, but that comes after the administration tempered expectations. It's been a chaotic process that raises doubts about passage.
For months the White House was saying a tax bill could be approved by summer. Then last week Treasury Secretary Steve Mnuchin said the timeline was aggressive and unrealistic. But then Mnuchin reversed his position on April 20, saying tax reform would come very soon. The next day, Trump said tax reform would be unveiled this week and include the biggest tax cut ever.
But Trump seemed to waver on the timing, with the White House issuing a subsequent statement, saying, "The president was saying what we've been saying all along, that he wants to do tax reform as quickly as possible while still doing it right." Trump is expected to present a broad framework for tax reform, but he has been insisting it include a 15 percent corporate tax rate even if that complicates deficit-reduction efforts.
The biggest problem is that the White House wants to revive its failed health-care proposal in some form first. The savings from eliminating health-insurance subsidies for middle-class families and young workers who don't get coverage at work were expected to help pay for the tax-cut package, says C. C. Huang of the Center for Budget and Policy Priorities. Blackstone group chair Steve Schwarzman, who heads a Trump CEO advisory council, said on CNBC earlier this month that a new health-care bill will probably be considered before tax changes. "Some of these issues are tough, because the numbers don't work easily," he said. "On the tax side, I think it will be slower. People don't want to make a mistake.''
For traders I talk to, tax reform seems like such an uncertainty at this point that it's hard to bet on anything.David NadigCEO of ETF.com
But prospects for Trump's health plan remain dubious, even in amended form, given the hard-to-reconcile split between the House Freedom Caucus, a group of about 15 staunch conservatives who wanted even deeper Medicaid cuts than in the failed bill, and a group of about 10 GOP moderates who wanted the exact opposite. When Mnuchin said last week that tax reform would not be delivered on Trump's original timeline (August), he cited the health-care bill failure among the reasons. On Monday the White House said a vote on a new health-care bill may not come for weeks.
Assuming the health-care issue is resolved, the GOP is split deeply about how to cut taxes and whether it's important to restructure the code in a way that doesn't add to the budget deficit. In particular, Republicans from different parts of the country are split over whether to use import taxes on consumer goods to help pay for corporate tax cuts, a move vocally opposed by Republican Sen. Tom Cotton of Arkansas, whose state is home to Wal-Mart Stores' headquarters. "If I were an investor, I wouldn't be trying to model U.S. tax law a year from now," said Alex Bryan, director of passive strategies research at Morningstar. "It's too hard to have an edge.''
3. Buybacks complement fundamentals; they don't replace them.
Apple is a leading example here: Its prospects this year probably have been helped by the prospect of bigger buybacks but helped more by the looming prospect of 8th-generation iPhones, expected this fall. Industry mavens are high on the phone's rumored glass-and-stainless-steel body, wireless charging and other new features. Shares, up more than 20 percent year-to-date, have also been boosted by a recovery in sales growth in China.
The lesson: Buybacks do often help stocks of well-run companies beat the market. PKW has outperformed the S&P 500 over the past 10 years. It has gained 8.4 percent per year since 2006, topping the 7.2 percent gain (sans dividends) for the S&P 500. But the hopes for a Trump bump adding to the normal case for buyback-focused investing has fizzled.
— By Tim Mullaney, special to CNBC.com
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2ec99a29553127795883500539fb3614 | https://www.cnbc.com/2017/04/26/7-things-we-learned-about-energy-winners-during-trumps-first-100-days.html | Elon Musk's energy agenda is doing just fine under Trump | Elon Musk's energy agenda is doing just fine under Trump
When Donald Trump was elected president, markets expected that his policies promoting domestic oil production and slowing the shift toward renewable energy would soon show up in prices of stocks.
Not so fast.
While the Environmental Protection Agency under Trump isn't making any friends among backers of climate science — and critics have called for Tesla Motors founder Elon Musk to drop off Trump's CEO advisory panel — the type of renewable-energy stocks linked to Musk are thriving during Trump's first 100 days.
President Donald Trump talks with Tesla and SpaceX CEO Elon Musk at Trump Tower last February.Evan Vucci | AP
All but one of the clean-energy exchange-traded funds followed by ETF Database are up this year; seven of the 10 are beating the S&P 500. Meanwhile, the Standard & Poor's 500 Energy Index (XLE), which tracks mostly large-cap fossil fuel companies is down near-10 percent this year, through April 24, with integrated oil majors like Exxon Mobil and Chevron down slightly more.
The issues aren't especially complicated, analysts say: Policy changes are running up against fundamental market forces that are more important for stocks than marginal changes designed to boost energy supplies, which might also tend to push energy prices lower.
"The commodity price environment is substantially more important to energy companies than policy is," said Michael Ferguson, a director in the energy information practice at Standard & Poor's Global Ratings.
If you're invested in the energy sector, there are some factors that influence stock and commodity prices that are more important to watch than political news coverage.
The post-election rally in oil shares accompanied a $11-a-barrel climb in crude-oil prices from October levels. But this year the S&P 500 Energy sub-index's drop has come as the entire S&P index has tacked on another 6 percent. The reason: the WTI crude-oil price decline from $56 a barrel to $47, which proceeded throughout most of March. Lower crude prices are simply more important to oil stocks than a presidential permit for the long-delayed Keystone XL pipeline and Trump's promises to open more federal lands for oil drilling.
More from ETF Strategist:Trump's first 100 days versus presidential market historyThe starkest look yet at how massively index funds are killing activeMany investors are missing out on Tesla's huge gains without knowing it
The wild card here is whether the civil war in Syria and ongoing crisis in Libya might push crude back up. WTI crude rallied toward the end of March and in the wake of the U.S. attack on a Syrian airbase in response to the use of chemical weapons against civilians on April 4. But it had been on a six-day losing streak before settling above $49 on Tuesday.
Some energy market experts are moderately bullish about the immediate future, calling for $60-a-barrel oil by summer. But one oil trader who called crude's major crash thinks the current environment will prevent any sustainable gains in oil prices.
The sell-off in crude is likely to work its way into oil-company profits later this year, according to Goldman Sachs analysts led by U.S. stock strategist David Kostin, who expects cuts in optimism and forecasts. First-quarter profits in the industry are likely to reverse losses early last year and beat consensus forecasts, says Goldman, who pointed to analyst estimates for the full year that have already fallen more in energy — almost 5 percent — than in any other sector.
"The [majors] haven't been able to make exploration more profitable,'' said David Nadig, CEO of ETF.com, which tracks the ETF industry.
Exxon and Chevron report earnings this Friday.
Where have oil stocks been gaining? Among the refiners. The VanEck Vectors Oil Refiners ETF is up 6.5 percent this year. But even among ETFs that have significant exposure to refiners, such as PowerShares Dynamic Energy Exploration & Production Portfolio (PXE) and iShares U.S. Oil and Gas Exploration (IEO), the broader energy decline has kept these funds in the red this year.
The [majors] haven't been able to make exploration more profitable.David NadigCEO of ETF.com
Coal has had a nice bounceback. The VanEck Vectors Coal ETF (KOL) that tracks the president's second-favorite industry behind real estate is up 12 percent this year. But don't credit Trump: Nine of its top 10 holdings are based outside the United States, and Consol, the one U.S. name, announced in January it's looking to sell off its U.S. coal business and concentrate on natural gas. The ETF's top holding, Teck Resources, mines coal for steelmaking rather than utilities and is based in Canada. It also mines copper, gold and other commodities, and its shares have fluctuated.
KOL declined annually by anywhere from 20 percent to 55 percent in the five years between 2011 and 2015, losing in total more than half its value. In the past one-year period through April 24, the ETF is up 61 percent. But its five-year annualized gain is –13 percent, according to Morningstar data, through April 24.
Here's why coal gains are not necessarily built to last: An industry rule of thumb holds that coal becomes a competitive source of fuel to make electricity when natural gas costs at least $6 per million British Thermal Units of heat it generates. Right now the benchmark Henry Hub spot price for gas is bouncing around $3 per million BTUs. Coal-related bonds, the sector with perhaps the most to gain from better prospects for coal companies to repay their debts, are being analyzed within this economic prism rather than on a turnaround the president has promised.
"Economics, not regulation, is the prime driver of near-term coal sector distress," Moody's Investor Service analysts, led by Swami Venkataraman, wrote in a report. "For the next 3–5 years, the primary driver of coal plant shutdowns is expected to be the poor economics of coal vis-a-vis natural gas and renewables. The trend of low gas prices and declining renewable costs are independent of expectations created by the [Clean Power Plan] CPP and will continue to affect coal-fired generation even in its absence."
Ticker ETF YTD % 1-year (%) Assets ($) PBWPowerShares WilderHill Clean Energy11(-1)100 millionGEXVanEck Global Alternative Energy9.8868 millionPZDPowerShares Cleantech818.488 millionQCLNFirst Trust NASDAQ Clean Edge Green Energy78.555 millionPBDPowerShares Global Clean Energy6251 millionFANFirst Trust ISE Global Wind71377 millionICLNiShares Global Clean Energy6(-7)80 millionKWTVanEck Vectors Solar Energy4.4(-25)11 millionTANGuggenheim Solar3(-26)199 millionPUWPowerShares WilderHill Progressive Energy(-1)1624 million
This year the pure-play approach has won: The PowerShares WilderHill Clean Energy Portfolio (PBW) has done the best among ETFs classified as alternative energy, up 11 percent.
Its top holdings are makers of equipment for wind, solar and geothermal energy, plus Tesla Motors, the highest-profile green stock of them all, which has risen more than 40 percent this year.
"Most of these companies are global in scope," Nadig said. "It's not necessarily the case that if the U.S. changes policy, it's awful for these companies.''
The PowerShares WilderHill Progressive Energy Portfolio (PUW) is a good example of how a name can mean different things to different people. This ETF's top holdings include companies that make pesticides, herbicides and insecticides (FMC) and one of the biggest fracking companies in the United States (Chesapeake Energy). That's also one of the reasons it has not done as well as the pure-play renewables PBW this year.
Jason Bloom, global market strategist at PowerShares, said via email that PUW "is really more designed for investors looking at returns in a sector that should benefit from the transition to natural gas and away from coal. In this sense, progressive represents newer technology and processes that are helping bring the energy sector into a more efficient future."
VIDEO3:1103:11What is renewable energy?CNBC Explains
The volatility in energy trades is a factor that also plays out in the renewable-energy sector: Solar, wind and nuclear stocks don't tend to go straight up for long, even if they've been going up this year. Four of the clean energy ETFs, including two solar ETFs, had huge losses last year before regaining ground in 2017. Even this year's big winner, PBW, has a three-year annualized return of –13 percent (5-year annualized is –1 percent). And that was under climate-friendly President Obama.
The Global X Uranium ETF (URA), up near-15 percent this year, has a five-year track record even worse than coal's, with an annualized loss of 20 percent, according to Morningstar. The Guggenheim Solar Energy ETF (TAN) has a three-year annualized return of –23 percent.
PowerShares' strategist Bloom said, "Renewable-energy trends are moving in the right direction, especially if you look at the opportunities in China where many of their larger cities have hit toxicity thresholds. Economic growth continues to accelerate clean-energy adoption around the world, and with rapidly expanding economies of scale, we may see performance smooth out going forward."
Bottom line: Elections may ultimately sort out domestic priorities, but economics — and recent stock-sector performance — matter a lot more to investing than political promises.
— By Tim Mullaney, special to CNBC.com
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78ff95d141169ef6a2461088d919e533 | https://www.cnbc.com/2017/04/26/boeing-earnings.html | Boeing profit rises 19% | Boeing profit rises 19%
Planes are being prepared for customer approval in the delivery ramp at Boeing South Carolina in North Charleston, South Carolina.Randall Hill | Reuters
Boeing on Wednesday reported a 19 percent rise in first-quarter profit despite declining revenue, and it notched up its forecast for full-year earnings.
The world's biggest plane maker said it had earned $1.45 billion, or $2.34 per share, compared with $1.22 billion, or $1.83 per share, a year earlier.
The company's core earnings, which exclude some pension and other costs, rose to $2.01 per share from $1.74, beating the analysts' consensus estimate of $1.94, according to Thomson Reuters I/B/E/S.
Revenue fell 7.3 percent to $20.98 billion, missing the consensus estimate of $21.30 billion, according to Thomson Reuters I/B/E/S.
The decline came as commercial aircraft deliveries fell to 169 from 176, and because last year's revenue figure included delivery of three C-17 military transport aircraft, a plane Boeing has stopped making.
Deliveries of 737s also dipped as Boeing built 737 MAX 8 jets that it plans to begin delivering this quarter, now that the plane has regulatory certification.
While Boeing delivered two fewer 777s in the quarter, it delivered two more 787s.
The results also showed the effect of Boeing's cost-cutting and factory productivity improvements. Boeing is honing its ability to make 787s, and the larger 787-9 model is more profitable that the earlier one.
Boeing's KC-46 aerial refueling tanker continued to weigh on results.
The company said it still expected to deliver 760-765 commercial aircraft in 2017.
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c4ad7ba8c49118f3550070b350f22493 | https://www.cnbc.com/2017/04/26/cnbc-internship-testimonial-berkley-lovelace.html | CNBC Internship Testimonial: Berkeley Lovelace, CNBC.com Intern 2016 | CNBC Internship Testimonial: Berkeley Lovelace, CNBC.com Intern 2016
A year ago, I had little idea I'd be a reporter for one of the biggest TV business news networks in the world. Everything changed after the summer of 2016.
I was selected to work on CNBC's Digital Breaking News team as a fellow during the summer of 2016. While a fellow at CNBC, I was a journalism student at the University of Missouri, studying convergence journalism — a sort of combination of multimedia and broadcast journalism.
As a journalism student, I was interested in covering health care and science-related topics. In business news, there was no shortage of those stories. I wrote on topics like the drug industry's recent price hikes, health industry executives stepping down, and the latest scientific findings.
One of the bigger stories I worked on last summer was the Orlando nightclub shooting rampage. I had to write about the aftermath of the massacre, including how thousands of people packed blood donation centers in Florida — with the exception of gay men, who were not allowed to donate.
My interests have since expanded, thanks in part to the fellowship. At CNBC, I worked (and continue to work) on stories I had previously not covered before. As a result, I learned a lot. I helped CNBC with coverage of the markets — including the Dow, S&P 500, Nasdaq composite, currencies, oil and gold. The markets, as of late, have been an important indicator how investors feel about President Donald Trump's policies. I also wrote breaking-news stories in company earnings, which is a quarterly report on a public company's performance.
It all sounds intimidating, but the entire team at CNBC.com was incredibly helpful and informative. The newsroom gave me all the tools I needed to be successful in that position. At noon, all the interns packed into the boardroom for a "Lunch and Learn" where we met some of the top journalists in the industry.
While an intern at CNBC.com, I produced several breaking-news articles every day, created social videos for the digital video team and even had time to produce my own original featured content. By the end of the program, I could tell my writing and reporting skills had improved significantly, and I learned new techniques for producing video as well.
Post-fellowship, I continue to work at CNBC as news associate. I write breaking news, including stories on Trump and events around the world and cover the markets. I owe a great deal of my knowledge and experience today to that fellowship. I plan to continue to build my reporting skills at CNBC.
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32e989fbaaca74d6c4ca3d0bd39a5ef3 | https://www.cnbc.com/2017/04/26/cnbc-internship-testimonial-gary-phillips.html | CNBC Internship Testimonial: Gary Phillips, Assignment Desk Intern 2016 | CNBC Internship Testimonial: Gary Phillips, Assignment Desk Intern 2016
I had no idea what to expect when I started at CNBC. I was a first semester junior at Seton Hall and I had never had an internship before. Heck, I had never been inside a professional newsroom before. All of a sudden, I was working right in the middle of one.
Surely, plenty of students had found themselves in a comparable position at one point or another. Here's the thing though – I also had zero financial knowledge and zero television experience. How was I going to make an impact at one of the largest business news networks in the world?
Luckily, a patient boss, Ryan Ruggiero, and a handful of fellow interns wearing similar shoes made CNBC the experience of a lifetime for me. Coming from a mostly sports background at the time, my internship allowed me to branch out and cover other topics while also providing me with a business lens through which I could view athletics. With this enhanced frame of mind, I was able to write several sports business pieces for CNBC.com.
Additionally, CNBC was my introduction to television work. I learned about editing audio and video, was sent on film shoots and did a few man-on-the-street hits. I went into my internship as a writer, but I came away from it as a multimedia journalist, something Ryan always stressed was important. As the industry continues to evolve and change, I see more than ever just how right Ryan was. Luckily, I had an opportunity at CNBC to pick up versatile skills that will come in handy as my career progresses.
Since my semester at CNBC, I have interned for The Bergen Record, been named the managing editor of USA Today Sports Media Group's Jets Wire, and elected editor-in-chief of The Setonian, Seton Hall's official undergraduate newspaper. This summer, I will begin an internship with NJ Advanced Media. With graduation on the horizon, I know I am ready to enter the professional ranks with a firm grasp on the business and the skills I need to know.
Fortunately, my internship at CNBC helped prepare me.
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5557f9ebac1b705ab1b52367e5e6184c | https://www.cnbc.com/2017/04/26/cnbc-internship-testimonial-melody-myers.html | CNBC Internship Testimonial: Melody Myers, 'Closing Bell' Intern 2016 | CNBC Internship Testimonial: Melody Myers, 'Closing Bell' Intern 2016
As a CNBC fellow last summer, I was able to bring my love of producing and learning together. Having only taken an economics class in high school and no business courses throughout college, this position pushed me to learn all there was to know about business and issues impacting the business world.
During my fellowship, I worked on the show "Closing Bell." Airing from 3 to 5 p.m. ET, this show is presented during one of the most important hours of the trading day. From my very first day on the team, I felt welcomed and encouraged. No matter my question or concern, someone was always more than willing to help me out.
As a team member, I had the opportunity to grow in my producing skills through various responsibilities. Through daily pitch meetings, I grasped a better understanding of what makes a great business news story and how to structure a show. I also experienced growth in both my writing skills and business knowledge through producing market segments such as the "Closing Bell Exchange" and "30 to Close," which focus on issues and events impacting the market that day. My skills in the control room grew through checking in guests before each segment and working on Trigger (the machine that changes the charts of various companies you see on the screen).
One of the most memorable days during my fellowship was the day of and the day after the Brexit vote. Seeing just how volatile the markets reacted in the U.S. and around the world to Britain's decision to leave the EU showed me just how a big event like this can shake up the business world. With wall-to-wall coverage, everyone came together to do their part to make sure as many angles of this historic event were covered.
As I look back during my time as a fellow, I feel so blessed to have been offered such an amazing opportunity. Although I hadn't originally considered business news as my beat within the journalism field, this fellowship helped me reconsider. This position helped reinforce just how important business news is within the grand scheme of things. Even if you're unsure about business news, I highly recommend completing an internship with CNBC!
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a16f77ae2383d718589f5cbe0614953b | https://www.cnbc.com/2017/04/26/cnbc-internship-testimonial-zhao-yu.html | CNBC Internship Testimonial: Zhao Yu, Digital Technology and Product Intern 2016 | CNBC Internship Testimonial: Zhao Yu, Digital Technology and Product Intern 2016
An internship at CNBC can be described with three words: engaging, exciting, and, at times, challenging. This is, in my opinion, the definition of a great internship program. At CNBC, you make the most out of your time, and while I was interning here, I was a front-end engineer for their website. From the first moment that I was introduced to my team, I knew that if I gave my best effort, I would be rewarded with an unforgettable experience. I've since had the opportunity to work on many projects ranging from creating newsletters to redesigning their markets and quotes page (some of their most frequented pages on the site). Along the way, there have been challenges. But I can say this for certain, everyone here wants to see you grow and succeed, all you have to do is ask for help. What I can say for sure is, I now know what it takes to launch software on an enterprise scale from understanding the development cycles work as well as collaborating with different teams in order to produce a product that our users want to use. CNBC has created a program that is truly exceptional for college students looking for real-world experience in all aspects of media. You will walk out knowing so much more about your field of work. Last but not least, everyone at CNBC really treats each other like family, and that's what has really made my time here so memorable.
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c82ffa7a9b6ece19afcaa7ca501710b9 | https://www.cnbc.com/2017/04/26/espn-to-lay-off-100-people-including-tv-reporters-source-says.html | ESPN to lay off 100 people, including TV reporters, source says | ESPN to lay off 100 people, including TV reporters, source says
VIDEO0:4600:46ESPN's new direction is resulting in layoffsNews Videos
As ESPN tries to evolve its content for a multi-platform audience, the company will begin laying off 100 people on Wednesday, according to a source close to the situation.
The cuts affect about 10 percent of ESPN's forward-facing talent group of about 1,000 people, who include TV reporters, radio reporters and writers rather than behind-the-scenes employees.
Some employers posted on Twitter the news that they would be leaving the channel.
Ed Werder Tweet: After 17 years reporting on #NFL, I've been informed that I'm being laid off by ESPN effective immediately. I have no plans to retire
Joe McDonald Tweet: After nearly eight years of covering the NHL, MLB and the NFL at ESPN, it's time for the next chapter in my career.
Jeff Goodman Tweet: Received my call. Laid off effective immediately. I love what I do and I will continue. Tough day for many with ESPN layoffs. Thx to all.
Austin Ward Tweet: I've been informed that I'm no longer employed at ESPN. Greatly enjoyed covering the B1G, and will immediately try to find a new challenge!
Dana O'Neil Tweet: Add me to the list. Just got the 'call.' I've been informed my contract will not be renewed at ESPN.
Pierre LeBrun Tweet: Well folks, as you can tell by my new Twitter handle, I was also among the cuts today at ESPN.
Other hosts posted about how difficult the day has been.
Trey Wingo Tweet: Too many dear friends to mention..but in a very tough business.. this is one of the toughest days I can remember.
Jemele Hill: It is difficult day at ESPN. So I'm seriously not here for the nonsense.
The move is aimed not just at cost cutting, but at shifting its strategy to adapt its content to digital distribution. ESPN is majority owned by ABC, a subsidiary of Walt-Disney.
"Dynamic change demands an increased focus on versatility and value, and as a result, we have been engaged in the challenging process of determining the talent—anchors, analysts, reporters, writers and those who handle play-by-play—necessary to meet those demands," ESPN President John Skipper said in a post. "We will implement changes in our talent lineup this week. A limited number of other positions will also be affected and a handful of new jobs will be posted to fill various needs."
ESPN cited one example of this new approach of providing content to viewers during all hours on any screen in its adaption of SportsCenter, a flagship program for the network. ESPN rolled out a late-night franchise, SportsCenter with Scott Van Pelt, in 2015 also in addition to SC6 with Michael Smith and Jemele Hill and more digital-only social programming and content for its app.
—With reporting by CNBC's Julia Boorstin
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ccf41a0cc66a87c197edf560627a3ed4 | https://www.cnbc.com/2017/04/26/five-ways-the-trump-economy-is-off-to-a-record-setting-pace.html | Five ways the Trump economy is off to a record-setting pace | Five ways the Trump economy is off to a record-setting pace
VIDEO2:4802:48Trump's deregulation and the marketsSquawk Alley
Cash has been flowing fast and free in the nascent Donald Trump presidency, even if some of the economic data points haven't caught up yet.
Several measures indicate record activity in the days since the Republican captured the nation's highest office in November.
Mergers and acquisitions have been in a frenzy, companies have been rushing to market with massive amounts of debt issuance, and, of course, major averages in the stock market continue to punch through new highs. Close to 3,100 deals of various stripes have been completed in just the first 100 days.
Some of the first-100-days highlights, as compiled by Thomson Reuters:
On the deal meter, M&A for cross-border transactions globally as well as U.S. company deals involving other countries both for inbound and outbound M&A are all at record levels for the first 100 days. The global cross-border dollar tally is at $344.2 billion.Issuance for both investment-grade and high-yield bonds is at record levels as well — $324.6 billion and nearly $88 billion, respectively.Follow-ons, or the issuance of more shares after companies first go public, is at a new high globally of $137.2 billion.Health care has been a particularly active sector, with a record 63 companies going to the equity markets to raise capital during the period. Those firms have raised $4.5 billion, more than seven times as much as during Barack Obama's first term and more than double the next highest level — $2.1 billion during Bill Clinton's initial four years.The Dow industrials are up more than 15 percent since Election Day, the best showing since Ronald Reagan. At the same time, market volatility has been low, with the CBOE Volatility Index falling 6.8 percent since the inauguration and tumbling some 43 percent since the Nov. 8 election.
Market participants have been debating lately the differing signals shown between "soft" economic data — or sentiment surveys from businesses, consumers and investors — and "hard" data, or actual measurements of past activity and future plans.
The soft data have been relatively strong, if weakening a bit lately, while the hard data show significant pockets of weakness, particularly in consumer spending and productivity.
Wall Street is awaiting Friday's GDP report, which is expected to show the U.S. economy expanded only about 1 percent in the first quarter.
Koji Aok | Getty Images
Some economists fear that Trump's pro-growth talk is going to give way to the reality that domestic growth is constrained by a number of factors that aren't going to go away. After all, Trump already has run into problems enacting his aggressive agenda of tax cuts, regulatory rollbacks and infrastructure spending boosts, and there are other fundamental barriers in play as well.
"The amount of policy uncertainty is still really high," Mark Doms, senior economist at Nomura Securities, said in an interview. "This can have a very significant effect on investment."
Doms thinks economic growth will remain around the 2 percent level, rather than the 3 to 4 percent range Trump has been predicting. A labor market nearing full employment and a stagnant worker base that is hampering productivity improvements will get in the way of above-trend growth, he added.
"We do not subscribe to that" notion that Trump will be able to meet his aggressive targets, Doms said. "The math is hard. Math is not their friend."
However, hopes persist that the upbeat sentiment will translate into activity, if not in the first quarter then as the year progresses.
Goldman Sachs estimates that while the consensus for first-quarter growth is around 1 percent, that number is more likely around 1.4 percent and will accelerate through the year and average 2.7 percent in the next two quarters.
"Many investors are skeptical of strong survey data," Goldman economist Daan Struyven said in a note to clients. However, he believes "soft data contain important signals about the present growth pace."
The firm measures growth through its current activity index, which blends hard and soft economic data. That index indicates that "the upbeat signal from surveys about the current growth pace is probably genuine," Struyven said, though he cautioned that some sentiment indicators can be influenced by political beliefs.
In other words, recent surveys have shown Republicans to be far more optimistic about the economy than Democrats are. That may be skewing some of the surveys.
Correction: Daan Struyven is a Goldman economist. An earlier version misspelled his name.
WATCH: Larry Kudlow takes on fears that Trump's plans will worsen debts and deficits.
VIDEO3:4703:47Kudlow: Business tax cut will pay for itself in a couple of yearsSquawk on the Street
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b4aaffcd5559f435eb2204865f535a6c | https://www.cnbc.com/2017/04/26/instagram-has-700-million-users.html | Instagram reaches 700 million users at its fastest-ever growth rate | Instagram reaches 700 million users at its fastest-ever growth rate
Instagram Co-Founder and CEO Kevin Systrom speaks onstage at the inaugural Girlboss Rally on March 4, 2017 in Los Angeles.Getty Images
Instagram is now at 700 million monthly active users, adding 100 million more users in just four months.
The Facebook-owned company announced the growth spurt on Wednesday. It attributed the gains to several reasons, including simplifying the sign-up process and making it easier to find friends on the platform.
Instagram didn't provide updated numbers on daily active users, and did not have new stats for Instagram Stories. That feature, which allows users to post photos and videos that disappear within 24 hours, is a direct competitor to Snapchat.
More than 200 million people used Instagram Stories every day as of April, an impressive feat for Instagram considering the feature was only added in August. In contrast, archrival Snapchat's currently has 161 million daily active users.
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c344753b9cd4d7ab5941ed7a19049cf1 | https://www.cnbc.com/2017/04/26/mnuchin-says-trump-has-no-intention-of-releasing-tax-returns.html | Mnuchin says Trump has 'no intention' of releasing tax returns | Mnuchin says Trump has 'no intention' of releasing tax returns
VIDEO2:3602:36Mnuchin: Trump has no intention to release his tax returnsPower Lunch
President Donald Trump has "no intention" of releasing his tax returns, Treasury Secretary Steve Mnuchin said Wednesday.
The statement is more definitive than what White House spokesman Sean Spicer gave reporters last week. When he was asked on April 17 specifically if Trump will ever make his tax returns public, Spicer said, "We'll have to get back to you on that."
Trump has repeatedly claimed that he cannot release his returns because he is under audit by the IRS. The president previously said he would make those documents public when the audit is done.
When Spicer was asked last week if Trump would authorize the IRS to provide more details of the audit, the press secretary deflected. He said, "The president's view on this has been very clear" and "the American people understood it" when they elected him.
In a Wednesday briefing with reporters, Mnuchin said Trump has released "plenty of information."
But Trump's refusal to release his returns breaks decades of tradition. Almost all major presidential candidates since the 1970s have released their tax returns. Critics have argued that he should make more financial information public due to his wealth and potential ties to countries that could pose conflicts of interest while he's in office.
In demonstrations ahead of Tax Day earlier this month, protesters in several American cities urged Trump to release his tax returns. Trump criticized the demonstrations in tweets on April 16, claiming without citing evidence that someone "paid" the protesters and declaring "the election is over!"
— CNBC's Jacob Pramuk contributed to this report.
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d9f68154e193969822c05a9ddda86799 | https://www.cnbc.com/2017/04/26/netflix-iqiyi-content-licensing-deal-could-be-immaterial.html | Netflix has a foot in the door in China, but it might not be a big deal | Netflix has a foot in the door in China, but it might not be a big deal
VIDEO2:4302:43Netflix's China deal: Will it boost earnings?
Netflix may have just secured a foothold in the world's second-largest consumer market but that could be a non-event, for now.
The streaming giant announced it had clinched a licensing deal with iQiyi, a Chinese video platform, but this could be largely "immaterial," an analyst said. IQiyi counts Chinese search company Baidu as a parent.
"(T)his is probably going to be immaterial based on other similar deals in the region," Constellation Research Principal Analyst Ray Wang told CNBC's "The Rundown."
"The question is what kind of cut does Netflix get. We don't think it's going to be much," Wang added.
Netflix has attempted to break into the China market in the past, but has acknowledged the "regulatory environment" was "challenging" in a letter to shareholders last year. The company also said it would rely on licensing content to existing streaming platforms in China instead, adding it expected licensing revenues to be "modest."
VIDEO4:1904:19Netflix closes up 6% on China licensing dealClosing Bell
Still, there could be some benefits in store for Netflix from the deal.
"This is the largest market in the world ... What they're hoping to do, I think, is to get the Netflix branding and programming into a market legally," Wang said, adding that entering the market before other Western competitors could be good for Netflix in the long term.
As for why shares of the company rose almost 6 percent after news of the licensing deal broke, Wang said it was possible that investors simply did not realize what the terms of the agreement were.
"They were probably reacting to the fact that (Netflix) was now in one of the largest consumer markets in the world," Wang said.
"Partnering is the only way for distribution to get into this market and it's still at best risky, which is why I can understand why (Netflix CEO) Reed Hastings has been very cautious (in) talking about things being immaterial in that market," Wang added.
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7ecdf0aed2a425685bd04a4016d2881b | https://www.cnbc.com/2017/04/26/north-korean-elites-increasingly-think-kim-jong-un-is-a-weak-leader-new-study-says.html | North Korean elites increasingly think Kim Jong Un is a weak leader, new study says | North Korean elites increasingly think Kim Jong Un is a weak leader, new study says
VIDEO0:4500:45More North Korean elites think Kim Jong Un is weak News Videos
More and more North Korean elites think dictator Kim Jong Un is a weak leader, according to new research published Thursday from Rand Corp. citing senior officials who have defected.
"Kim Jong Un appears increasingly to the elites as ineffective and not a particularly good leader, which is likely how he's viewed now," said Bruce Bennett, senior defense analyst at research organization Rand. "Other than North Korea's weapons and [the] ballistic missiles of this regime, Kim Jong Un doesn't really have a lot to make him feel empowered," Bennett said, noting that recent events such as the murder of the dictator's older half brother show how the leader is "clearly paranoid."
Moreover, if Kim were to die suddenly, North Korea's elites would probably not choose a successor from Kim's family, ending their dominance since the state's founding more than half a century ago, Bennett said, based on his interviews with defectors.
"North Korea's elites have heavily gone into being entrepreneurs," Bennett said. "They would look to set up an economy like the Chinese which is what the Chinese have been asking them to do."
More than two-thirds of North Korea's trade is with China, giving Beijing significant economic leverage on the rogue state. At the same time, Chinese authorities do not want North Korea to implode as it would likely spark a refugee crisis into China's economically struggling northeastern region.
South Korean leaders have supported unification of the peninsula but have been ineffective — the North has strongly been against it.
From his interviews and research, Rand's Bennett believes that both sides can effectively prepare for unification by improving policy in five areas. The key is winning over North Korea's ruling elites, who see less of a future under Kim. Rather than severely punishing all of the elites — estimated in the hundreds of thousands — for their participation in the dictatorship, Bennett said South Korea could show their support for the ruling class':
1. Individual safety and security
2. Individual position
3. Wealth
4. Family safety and position
5. Societal importance
"Peaceful unification could well mean the end of the North Korean nuclear threat especially if it's economically thriving," Bennett said.
Amid increasing tensions around North Korea in the last several weeks, President Donald Trump wants to pressure North Korea economically and diplomatically to end the nuclear threat, but the U.S. is "prepared to defend" itself and its allies, top Trump administration officials said Wednesday in a statement.
The Korea Foundation sponsored the Rand report, which was conducted within the International Security and Defense Policy Center of the Rand National Security Research Division.
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fe691d06119af2641a4deda5b1b5c197 | https://www.cnbc.com/2017/04/26/oil-prices-fall-on-lingering-oversupply-concerns.html | US crude settles at $48.97, tumbling 1.3% on Libya oilfield restart, gasoline weakness | US crude settles at $48.97, tumbling 1.3% on Libya oilfield restart, gasoline weakness
VIDEO2:2902:29Will OPEC extend output cuts?Capital Connection
Crude prices fell more than 1 percent on Thursday as the restart of two key oilfields in Libya pumped more crude into an already bloated market.
U.S. gasoline futures also led the complex lower, falling to the lowest in at least eight years for this time of year after inventories rose by the most in nearly three months and demand remained weak.
Benchmark Brent crude was down 19 cents at $51.63 a barrel by 2:35 p.m ET (1735 GMT), nearly 9 percent below this month's peak.
U.S. light crude ended Thursday's trade 65 cents, or 1.3 percent, lower at $48.98, having fallen to a fresh four-week low.
Libya's 300,000 barrels per day (bpd) Sharara oilfield and 90,000 bpd El Feel oilfield have restarted after the end of protests that had blocked pipelines there, a Libyan oil source and local official said.
VIDEO12:1212:12Cramer: The next big Trump stock is a Canadian companyMad Money with Jim Cramer
Libyan crude production stood at 491,000 bpd on Thursday, but the OPEC member was targeting 800,000 bpd soon and 1 million to 1.1 million bpd by August, the chairman of state oil firm NOC said on the sidelines of an industry event in Paris.
The news of the Libyan restarts helped push Brent below its 200-day moving average (MA) at $51.29 a barrel, a key technical support.
"The 200-day had been a bullseye and today we fell through it. So to me that could be a bullish omen," said Anthony Headrick, energy market analyst at CHS Hedging.
U.S. gasoline tumbled almost 3 percent to $1.5458 a gallon, the lowest since at least 2009 for this time of the year.
The slump in gasoline futures pushed the gasoline crack spread, an indication of refining profit margins, to an eight-year low after Wednesday's data showed record U.S. refinery throughputs last week spurred the biggest jump in gasoline inventories in three months, but that demand was down nearly two percent on the year.
Analysts warn that refiners risk worsening a fuel glut by running their facilities so hard amid tepid gasoline demand. If gas inventories remain elevated after the summer driving season, it could dent demand for feedstock crude oil.
"Gasoline is leading the way lower with ample stocks, lower demand compared to last year, and an increase in gas(oline) stocks on the east coast," said Headrick.
VIDEO6:1606:16Man who called oil price collapse now sees thisTrading Nation
Amidst concerns about the persistent global oil glut, the Organization of the Petroleum Exporting Countries and Russia are in talks to extend a six-month deal to cut 1.8 million bpd into the second half of the year.
OPEC Secretary-General Mohammad Barkindo said the oil overhang was declining, but added that stocks remained high and needed to fall further in comments pointing to an extension in cuts.
Barkindo did not comment directly on whether the cut would be extended, but he said efforts were under way led by Saudi Energy Minister Khalid al-Falih, who is OPEC president in 2017, to get a consensus before ministers meet in Vienna on May 25.
The International Energy Agency said in its latest monthly market report that oil stocks in industrialized countries stood at around 3.06 billion barrels at the end of February, some 336 million barrels above the five-year average.
But inventories have remained stubbornly high, in part because of increased production from the United States. U.S. crude output is at its highest since August 2015 at 9.27 million bpd, according to government data.
— CNBC's Tom DiChristopher contributed to this report.
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1489488e325c99fde5262823b406e118 | https://www.cnbc.com/2017/04/26/retail-stocks-move-higher-after-mnuchin-shoots-down-controversial-tax-proposal.html | Retail stocks move higher after Mnuchin shoots down controversial tax proposal | Retail stocks move higher after Mnuchin shoots down controversial tax proposal
VIDEO1:1101:11The White House just outlined its tax plan. Here's what's in itDigital Original
Retailers can breathe a collective sigh of relief.
The S&P Retail ETF rose 1.5 percent on Wednesday after Treasury Secretary Steven Mnuchin shot down the current version of a House proposal that threatened to impose a 20 percent levy on imported goods.
Retailers from J.C. Penney to Target had been extremely vocal about the impact the tax would have on their business, with Penney's CEO Marvin Ellison telling CNBC last month that it would send his chain's tax rate from 34 percent to 170 percent. That, Ellison said, would make it "virtually impossible" to turn a short-term profit.
Others, like PVH CEO Manny Chirico, argued the so-called border adjustment tax would force retailers to eliminate jobs as they looked for ways to cut costs. Meanwhile, industry lobbying groups like the National Retail Federation and the Retail Industry Leaders Association said the BAT would universally raise prices for consumers. That's because the vast majority of goods sold in the U.S. are manufactured overseas.
It appears that the White House heard the industry's complaints.
"We don't think it works in its current form, and we're going to continue to have discussions with them about revisions," Mnuchin said Wednesday.
Mnuchin's comments came as White House officials lifted the lid on President Donald Trump's tax plan. The proposal includes trimming the number of income tax brackets from seven to three, and cutting the corporate tax rate to 15 percent from 35 percent. It does not mention a border adjustment tax as outlined by the House.
—CNBC's Jacob Pramuk contributed to this report
Watch: BAT tax would be a disaster
VIDEO1:3301:33BAT tax will be a disaster: AAFA CEOSquawk on the Street
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f37f436c74da853255c3a4fdca2e3822 | https://www.cnbc.com/2017/04/26/selfie-voting-could-make-elections-safer.html | How the selfie could make elections safer | How the selfie could make elections safer
Image of a selfie.Stanislav Krasilnikov | TASS | Getty Images
The selfie, the act of self-portraiture which once threatened to spawn a society of narcissists, could be the key to a more politically engaged electorate, according to one technology company aiming to make the voting system more secure and democratic.
Smartmatic, a world-leading election technology firm, has designed a new app which enables people to vote using a selfie for authentication.
Verifying facial biometric data against government-issued ID documents, the software allows users to register and cast their vote via their mobile phone from any internet-enabled location.
Their vote is then encrypted, much like a private message on WhatsApp, and sent to a central server for counting.
It is Smartmatic's hope that the software will provide a more accessible and secure alternative to postal and booth voting, which he says are at greater risk of hacking.
Already, it is being adopted by one as yet unnamed "developed country", and is due to be rolled out later this year.
"If you look at the environments where there have been allegations of fraud it's all been because of voting interception," says Mike Summers, program manager at Smartmatic.
"Postal voting is very weak – all that's required is a date of birth and a signature, which are easy to fraud."
The selfie system, which is reliant on a two-stage authentication process, however, is more robust and places greater emphasis on confirming the individual's identity, Summers explains.
The app is the latest iteration of the company's election technology. Already it provides internet voting systems to Estonia, where almost one-third of votes are cast online, as well as holding a 15-year touch screen voting contract with Belgium.
It is also working with developing economies such as Sierra Leone to improve the voting system and has coordinated three nationwide elections in the Philippines.
Summers says the system could also provide a solution to voter apathy, which, aside from being a product of growing anti-establishment politics, is also arguably borne out of voters' frustration with traditional, time consuming voting methods.
"Every country has different problems to sort but one common interest - reduced turn out."
High abstention levels were one of the biggest threats to the first round of the French election on Sunday, which eventually generated a voter turnout of approximately 69 percent.
Low voter turnout could also impact the upcoming U.K. election. Smartmatic is due to meet the U.K. government in the coming weeks to discuss its voting system.
"There has been a reluctance to change but I think there is more of an appetite to change the technology now," said Summers, although he said it would not come ahead of this year's vote.
Currently voters in the U.K. can register online but must vote either in person or via postal vote. Last year, the website crashed shortly before the deadline for registration for the U.K. referendum, which threatened to disenfranchise thousands of would-be voters.
"I think this general election is going to be interesting because I think the turnout may be really low because of voter apathy and there will be a realisation that we need to address this.
"Registration is not the end game – voting is."
The U.K. Cabinet Office, which is responsible for elections, said it would not be providing a comment while it is in the pre-election period.
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2c04337f0220c4261b8a1f7e46b91d17 | https://www.cnbc.com/2017/04/26/surging-gasoline-stockpiles-undercut-drop-in-us-crude-inventories.html | Surging gasoline stockpiles undercut bullish drop in US crude inventories | Surging gasoline stockpiles undercut bullish drop in US crude inventories
VIDEO2:0402:04Futures Now: Crude rallies on supply dataFutures Now
Oil prices rallied on Wednesday after the U.S. government reported a bigger-than-expected drop in crude stockpiles, but there's trouble brewing elsewhere in the energy complex.
A large surge in gasoline inventories last week, pared with a rise in refinery activity, compounded worries that a fuel glut will hurt future demand for crude oil, the feed stock for most fuels. That could frustrate efforts to balance an oversupplied market and send oil prices lower later this year.
The Energy Information Administration reported that U.S. gasoline stockpiles rose by 3.4 million barrels, versus expectations for a 1 million-barrel decrease in a Reuters poll.
Meanwhile, the nation's refiners increased their activity even as demand for gasoline softened last week. They were operating at 94.1 percent of capacity, the highest level since November 2015, according to Reuters.
"They're cranking out a lot of fuel here in the face of demand that is lackluster. They could be building a glut for themselves on the other side of the refinery," said John Kilduff, founding partner at energy hedge fund Again Capital.
The inventory build is in part due to refiners ramping up production earlier than usual, in Kilduff's view. However, the increase is somewhat unusual for this time of year and remains a concern because gasoline is heading into a period when it should be the "seasonal leader" among energy commodities, he said.
On Wednesday, U.S. gasoline futures were down 1.7 percent, while U.S. crude futures were slightly positive on the day after the EIA report.
"To the extent that this is going to undermine gasoline price strength, it's bad for the complex," Kilduff said.
Tom Kloza, global head of energy analysis at Oil Price Information Service, noted that international benchmark has recently gone further into contango, a structure in which the future price of a commodity is higher than the current cost. That is the opposite of what one expects when the market is tightening, he said.
OPEC and 11 other oil-exporting nations including Russia are currently trying to reduce a global glut by cutting 1.8 million barrels a day of production in the first half of 2017. But Kloza said high U.S. refinery activity risks worsening a glut of gasoline, diesel and jet fuel.
VIDEO6:1606:16Man who called oil price collapse now sees thisTrading Nation
"The bottom line for me is I can't believe how high and hard we are running refineries, and I think ultimately that's going to sabotage the gasoline market because we keep seeing gasoline demand that is consistently below last year," Kloza said.
Analysts also worry that weak gasoline demand will cause refiners' profit margins to drop to a level that will cause them to reduce their activity later this year, further denting oil demand.
"From our perspective, the crack spread — the profitability of refining crude products — has just dropped below year-ago levels and yet we're seeing refinery runs hitting an absolute high last week of over 17.3 million barrels a day, and so it is a concern," said Matt Smith, director of commodity research at tanker-tracking firm ClipperData.
While crack spreads are lower than at this time last year, they are still sufficient enough to incentivize refiners to keep turning out fuel, Smith said. That suggests that refinery activity is not being driven by demand for gasoline, but by abundant supplies of crude oil that refiners need to burn through, he added.
Watch: Crude near 4-week low
VIDEO1:4701:47Futures Now: Crude oil near 4-week lowFutures Now
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100590fb022f8954be6883ef9eb614ed | https://www.cnbc.com/2017/04/26/the-chinese-stock-market-roller-coaster-looks-to-be-coming-back-in-full-force.html | The Chinese stock market roller coaster looks to be coming back in full force | The Chinese stock market roller coaster looks to be coming back in full force
The roller coaster that is the Chinese stock market seems to be back in full force.
Stocks in Shanghai had been in a period of relative calm so far this year, but a relatively precipitous drop of 2.7 percent this month has refocused attention on the markets.
This year, investors have been buoyed by stronger economic data — first quarter GDP growth came in at 6.9 percent, which was better than expected. Specific sectors like property and construction also got a boost after Beijing announced the creation of a new special economic zone, dubbed Xiongan New Area, in Hebei province. But, as the saying goes, what goes up must come down.
Investors chat as they sit in front of computer screens showing stock information at a brokerage house in Qingdao, China, September 7, 2015.China Daily | Reuters
Since late last week, Shanghai stocks have been on a bit of a losing streak. Monday's drop of more than 1 percent was the worst thus far this year, and Tuesday saw an uptick that left numbers little changed. The Shanghai Composite was up about 0.3 percent by 11 a.m. SIN/HK. This recent volatility complicates government efforts to keep calm in the markets ahead of a major leadership change this fall.
Only about 10 days ago, Liu Shiyu, the chairman of the China Securities Regulatory Commission, delivered a speech at the Shenzhen exchange, making an explicit call to maintain market stability, connecting the financial markets to politics directly.
Consultancy Eurasia Group pointed out that Liu said, "today there is no finance without politics, and no politics that does not closely watch finance," noting sensitivities around the coming change in top Communist Party brass and protecting the 100 million investors in China.
Regulators have more recently floated some modest market reforms, such as faster IPO approvals and more trading of new commodities securities. In the past, there has talk also of tackling insider trading, but given the focus on stability, major changes may again take a backseat.
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0da38fa1179f7e3a76f673ff8b63a84c | https://www.cnbc.com/2017/04/26/the-white-house-just-outlined-its-tax-plan-heres-whats-in-it.html?__source=newsletter%7Cyourmoneyyourvote | The White House just outlined its tax plan. Here's what's in it | The White House just outlined its tax plan. Here's what's in it
VIDEO1:1101:11The White House just outlined its tax plan. Here's what's in itDigital Original
Top White House officials outlined President Donald Trump's tax plan Wednesday, a proposal they said would be the "biggest tax cut" in U.S. history.
White House chief economic advisor Gary Cohn and Treasury Secretary Steven Mnuchin summarized the plan in a briefing to reporters at the White House. It largely echoes the proposal Trump outlined as a candidate and did not include some key details, according to a fact sheet provided by the White House.
Trump's plan will cut the number of income tax brackets from seven to three, with a top rate of 35 percent and lower rates of 25 percent and 10 percent. It is not clear what income ranges will fall under those brackets. It would also double the standard deduction.The proposal will chop the corporate tax rate to 15 percent from 35 percent. It would eliminate tax deductions, with only a few exceptions, including the mortgage interest and charitable contribution deductions. The White House said there will be a "one-time tax" on the trillions of dollars held by corporations overseas. However, Mnuchin said the rate for that tax has yet to be determined. Mnuchin said the White House is "working with the House and Senate" on a repatriation rate, saying it would be "very competitive." The plan would get rid of the estate tax, otherwise known as the "death tax." Cohn said the move will help privately held businesses and American farmers. Analysis of the estate tax reveals that it affects only a very small portion of Americans. Mnuchin also said the U.S. would go to a "territorial" tax system. Though further details were not forthcoming, such systems typically exclude most or all of the income that businesses earn overseas. Trump's plan would also repeal the alternative minimum tax and 3.8 percent Obamacare taxes.
Mnuchin would not answer if the plan would be "revenue neutral," meaning whether it would result in a larger U.S. budget deficit. He contended that it would "pay for itself with growth and with ... reduction of different deductions and closing loopholes."
VIDEO1:4201:42Mnuchin: This plan will lower debt-to-GDPPower Lunch
Even before the Trump advisors outlined parts of the plan, many Democrats criticized it. Democrats argued that Trump's campaign plan would help corporations and the wealthy more than middle-class Americans.
Most independent analyses of Trump's campaign tax plan said it would balloon the budget deficit over time even after higher tax revenue from greater economic growth is factored in.
The White House appears not to support one possible revenue-raising tool, the controversial border adjustment provision included in the House tax plan.
"We don't think it works in its current form, and we're going to continue to have discussions with them about revisions," Mnuchin said at an event hosted by The Hill on Wednesday morning.
He said earlier that the White House wants a "combined plan" with the House and Senate, which could potentially clash with the administration over some provisions.
It is not yet clear when Congress could introduce legislation on tax reform. Mnuchin said Wednesday that he wants to see it passed by the end of the year. He previously set an August goal for passing a tax-reform plan, but the White House has backed off that timeline recently.
VIDEO2:3302:33Mnuchin: This is massive tax reform & simplification Power Lunch
House Speaker Paul Ryan said earlier that he does not think Trump is overstepping by releasing the proposal Wednesday, adding that Congress and the White House are working to reach consensus on a plan.
"We've been briefed on what they're going to do, and it's basically along exactly the same lines that we want to go. ... We see this as progress is being made and we're moving and getting on the same page," Ryan told reporters at a news conference with House GOP leaders.
Asked Wednesday afternoon if he thought some Republicans could oppose the plan, Mnuchin said there is "a lot of desire from everybody" to pass tax reform.
Cohn said Wednesday the White House is in "constant dialogue" with the House and Senate about the proposal and eventually will release "very firm" details.
— CNBC's Ted Kemp contributed to this report
Watch: Bernstein says Trump's tax plan won't boost growth
VIDEO3:3103:31Jared Bernstein: Trump's tax plan won't boost economic growth Power Lunch
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13ea48c24ad09c0d81367481b4af07cc | https://www.cnbc.com/2017/04/26/these-10-retailers-could-be-next-on-activist-investors-hit-list.html | These 10 retailers could be next on activist investors' hit list | These 10 retailers could be next on activist investors' hit list
VIDEO2:1402:14Bulls shop for these retailersHalftime Report
From Kate Spade to the maker of Ugg boots, retailers over the past few months have been under the watchful eye of activist investors. Yet as massive shifts in the industry continue to accelerate, the attraction for activists is also likely just heating up.
With announced store closures in the first quarter already topping the entirety of 2016, a team of Credit Suisse analysts identified the retail companies they view most at risk of a takeover attempt by an activist investor.
Activists target companies whose shares they argue are undervalued, and identify actions that could push their stock higher.
By analyzing more than 1,000 past activist situations, Credit Suisse compiled a list of characteristics that the previously targeted companies had in common. They include negative earnings momentum, low growth expectations and a high cash position relative to their market value.
By screening 185 retailers against those criteria — and excluding companies where a single shareholder owns more than 20 percent of its outstanding stock — these are the 10 that Credit Suisse says are most likely to attract the attention of activists.
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3f53baa449d665fc9a45b3388cf85617 | https://www.cnbc.com/2017/04/26/these-companies-have-the-most-to-gain-from-trumps-tax-cut-plan.html | These companies have the most to gain from Trump's tax-cut plan | These companies have the most to gain from Trump's tax-cut plan
VIDEO0:4000:40Trump's new tax plan expected to be great for companiesNews Videos
White House officials revealed on Wednesday President Donald Trump's plan for large tax cuts for repatriated offshore corporate profits and a reduction of the corporate tax rate, providing a potential windfall for companies stashing the most cash overseas and paying the most to Uncle Sam.
Fortunately for investors, Wall Street strategists have already done the leg work giving clients ways to play this big moment for the markets. Trump's plan will propose a "one-time" lower repatriation tax rate for the more than a trillion dollars in corporate cash parked overseas. The actual reduced rate is yet to be determined, but Treasury Secretary Steven Mnuchin said it will be "very competitive."
Currently, companies must pay a 35 percent tax on international earnings brought into the U.S. Strategas Research Partners cited in December how companies that repatriated the largest percentage of their overseas profits as a percentage of their market cap quadrupled the S&P 500's performance in the year after the 2004 repatriation tax holiday. The firm shared and recommended its Strategas repatriation index on Feb. 7, which consists of firms with the highest percent of offshore cash relative to their market caps.Here are five companies in the Strategas repatriation basket.
White House chief economic advisor Gary Cohn and Mnuchin also confirmed Wednesday Trump's tax proposal calls for cutting the corporate tax rate to 15 percent from the current rate of 35 percent.Goldman Sachs strategist David Kostin in January shared a list of stocks with the highest effective tax rates that he believes will benefit the most from the lowering of the corporate tax rate. Here are seven stocks the strategist recommended in its "high tax rate" basket.
Disclaimer
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c93fe874089caf00629e959f7801563f | https://www.cnbc.com/2017/04/26/trump-tax-cut-sounds-great-but-markets-are-skeptical-it-would-send-interest-rates-flying.html | Trump tax cut sounds great but markets are skeptical it would send interest rates flying | Trump tax cut sounds great but markets are skeptical it would send interest rates flying
The plan from President Donald Trump's administration to cut the corporate tax rate by more than half was met with skepticism in financial markets because it could expand the federal deficit and send interest rates sharply higher.
But it was also seen as the opening round in a long battle to find a compromise tax plan in a divided Congress.
President Donald Trump looks on as Treasury Secretary Steve Mnuchin speaks at a signing ceremony at the Treasury Department in Washington, U.S., April 21, 2017.Aaron P. Bernstein | Reuters
While equities markets might salivate over a 15 percent corporate tax rate, in the bond market, bond traders immediately focused on the deficit-ballooning aspects of the plan which, as yet, shows little ability to raise new revenue.
Some details on the plan were released by Treasury Secretary Steven Mncuhin and chief economic advisor Gary Cohn, who said the plan would also provide a tax break to repatriate corporate taxes from overseas, but did not reveal the rate as it is under negotiation with Congress.
"If this was a strong positive, we would be talking about the Trump reflation trade," said Jim Caron, fixed income portfolio manager at Morgan Stanley Investment Management. "Equities would be skyrocketing and bond yields would be moving higher ... there's a healthy dose of skepticism over whether this will pass. The bond market is skeptical and the equity market is trying to decide at this point."
The administration plan would also eliminate the alternative minimum tax.
"I don't know if it's a good plan or a bad plan, but what I'm trading on is how the narrative is set. Who will win the narrative? Will the left win the narrative? or will the Republicans win the narrative?" said Caron.
The individual tax rate would go to three rates — 10 percent, 25 percent and 35 percent from a current seven rates. There would also be fewer deductions but three would remain — charitable donations, homeownership mortgage deduction and retirement savings.
"It's a question of how they square the circle of wanting to have the drastic tax cuts and at the same time trying to convince Congress to pass it," said Peter Boockvar, chief market analyst at The Lindsey Group. "To what extent can tax cuts pay for themselves in terms of generating more revenues than the taxes lost by the cut. The administration is going to assume it can generate a lot more revenue, and that it will essentially finance itself. Congress and historically Washington has always been skeptical of those promises."
Mnuchin and Cohn said many of the details are still being worked out.
"It will pay for itself with growth and the reduction of different deductions and closing loopholes," said Mnuchin during a briefing on the plan.
The current corporate tax rate is 35 percent, and House Republicans have their own plan to take the rate to 20 percent but with proceeds from a controversial border adjustment tax. The administration and House are also counting on revenue from the replacement of Obamacare, which could divert current tax monies used to pay for that program.The plan from Trump does not include the border adjustment tax. The president floated the idea of a 15 percent tax rate as a candidate, and at the time it was estimated it could add trillions to the deficit.
"My read is that nobody is counting on this, nobody's expecting it. There are certain aspects of this that are not palatable to members of Congress. There are still in Washington within the GOP that vanishing breed of deficit hawks that have found their voice and they are finding it on the tax bills," said Scott Clemons, chief investment strategist at Brown Brothers Harriman. Freedom Caucus members balked at changes to the health-care plan last month, and effectively kept the bill to replace Obamacare from coming to a vote. However, Freedom Caucus members on Wednesday announced they would support an amendment on a plan to repeal Obamacare.
The Trump plan was expected to include a 10 percent tax on repatriated earnings from overseas, which would hopefully provide some boost to the economy as corporations spend the cash at home. But Mnuchin said that is under discussion with Congress and he did not reveal a rate, only said it would bring back "trillions" from overseas.
But Clemons said he expects only $600 million to $700 billion of that more than $2 trillion to make its way back to the U.S.
"A lot of that cash is held offshore for reasons that has nothing to do with the tax structure," said Clemons. "That's an element of the plan that would have pretty good bipartisan support." He also said it might be something that could stand on its own, outside of a bigger tax plan, since it would be embraced by Congress.
After the Mnuchin and Cohn announcement at 1:30 p.m. ET, stocks were higher but cut their gains, and by the end of the session, the S&P 500 and Dow both closed slightly lower. The Nasdaq was flat. Bond yields were lower, with the 10-year trading at 2.30 percent.
"The bond market is going to be a daily measure on this issue. I think they're certainly questioning that he's going to get anywhere close to what he wants. If he did, [the 10-year yield] would be close to 2.60 on the upper end of the range, not 2.30 on the bottom end of the range," said Boockvar.
He said if such a plan were enacted, interest rates would adjust higher across the board, and they are already set to move up as global central banks move away from easing programs. Many economists expect the Fed to raise interest rates again in June. "Trump is the 'art of the deal' negotiator. You start at the extremes and move to the middle. ... He's not doing anything when it comes to the deficit and trying to curtail it. These numbers are going to blow up the deficit," said Andrew Brenner, global head of emerging markets, fixed income at National Alliance.
Boockvar said companies would also be impacted by a deficit spending plan. "You can offset the benefits of the tax gain through the higher cost of capital. So much debt has been accumulated in the corporate sector in the last 10 years, people can't look at the tax cut in a vacuum," he said. "The bond market is going to be the tell on what they are thinking Trump will be able to actually pass and what the growth influence is and the deficit it's going to create."
According to Boockvar, as of the fourth quarter, total business debt in the U.S. was $13.47 trillion. He said if interest rates rose 100 basis points, or 1 percentage point, it could add about $135 billion in higher interest expense. For households, he estimated $147 billion of higher interest expense on everything from mortgages to credit cards, autos and student loans.
Boockvar said the stock market has been moving higher in anticipation of the tax plan since Trump won the election Nov. 8. He now expects a long haul through Congress, as the debate focuses on whether a tax plan has to be revenue neutral. The impact on the deficit would determine whether cuts can be made permanent. The argument in favor of a plan that widens the deficit is that it would increase growth and could make the tax cuts self-financing by adding new tax revenue to the economy.
"If you have something permanent, you have to have it revenue neutral. This was just a starting point that Congress wanted the administration to lay out. Where health care is being debated within Congress, I think on the tax side people wanted Trump to create a starting point," said Boockvar.
Earlier Wednesday, Mnuchin said the White House wants a combined plan with the House and Senate. The Treasury secretary declined to provide details of the plan but called it "the biggest tax cut and largest tax reform in the history of our country."
Correction: The plan from Trump does not include the border adjustment tax. An earlier version misstated its status.
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74a71778cea423012e4c02a06cfaa7bf | https://www.cnbc.com/2017/04/26/us-steel-plunges-by-25-sector-championed-by-trump-tanks.html | US Steel plunges 25% as the sector championed by Trump just last week completely rolls over | US Steel plunges 25% as the sector championed by Trump just last week completely rolls over
Steel production at US Steel in Gary, Indiana.Justin Solomon | CNBC
After a rally last week in the wake of President Donald Trump's announcement that he would be kick starting a probe into imported steel, steel stocks tumbled Wednesday as weak earnings and slashed guidance from United States Steel sent worries through the sector.
U.S. Steel reported a quarterly loss of $1.03 per share, according to Thomson Reuters. That was quite a miss, as analysts polled by were expecting a quarterly profit of 35 cents per share. The company also slashed guidance, expecting full-year 2017 earnings of $1.50 per share, half the Street's expected figure of $3.05 per share.
Source: FactSet
Released after the bell Tuesday, the earnings report sent U.S. Steel's stock into a 26 percent nosedive Wednesday.
"While our segment results improved by over $200 million compared with the first quarter of 2016, operating challenges at our FlatRolled facilities prevented us from benefiting fully from improved market conditions" U.S. Steel CEO Mario Longhi said in a release. "However, we continue to be encouraged by the strength of our European business and we are also seeing improving energy markets."
The sector had substantial gains last week when President Trump said he was going to take a closer look at foreign steel imports deflating U.S. prices. But U.S. Steel's weak report is making waves throughout the industry, as other steel companies saw dips in action on Wednesday.
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4eb10ccd525d3cbcb74023a9c06d3538 | https://www.cnbc.com/2017/04/27/a-pair-of-plastic-pants-from-this-retailer-will-set-you-back-a-cool-100.html | A pair of plastic pants from this retailer will set you back a cool $100 | A pair of plastic pants from this retailer will set you back a cool $100
MOTO Clear Plastic Straight Leg JeansSource: Topshop
For a hundred bucks, you can have your very own pair of clear, plastic pants from Topshop.
The women's jeans, titled "Clear Plastic Straight Leg Jeans," are currently out of stock on Topshop's website. According to the item's description, these jeans are "guaranteed to get people talking."
For the more fashion-forward consumer, Topshop suggested using them as a "statement piece." The retailer also came out with "Clear Panel Mom Jeans" earlier this year, which are also currently sold out.
Topshop is in good company with its quirky designs, as Nordstrom recently featured "Barracuda Straight Leg Jeans" for $425, complete with a "muddy coating."
Consumers took to Twitter to voice their thoughts and opinions on the Topshop jeans.
@theawkwardblog: CLEAR PLASTIC JEANS ARE YOU FEELING OKAY TOPSHOP?
@lolzdonz: Is topshop having a laugh
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fe7f993158bc139fc2e6377436358162 | https://www.cnbc.com/2017/04/27/alphabet-earnings-q1-2017.html | Google-parent Alphabet's earnings smash estimates | Google-parent Alphabet's earnings smash estimates
Larry Page, CEO of Google's parent, Alphabet.David Paul Morris | Bloomberg | Getty Images
Alphabet managed to buck backlash over its ad platform in the first quarter, reporting better-than-expected quarterly earnings and revenue on Thursday.
The company saw mobile search and ongoing strength in YouTube driving ad sales higher, while sales on Google Play, hardware and cloud grew substantially, said chief financial officer Ruth Porat.
Shares rose more than 4 percent after hours, as executives said more consumers are turning to smartphones for content — and for ads.
(for Class A shares)
EPS: $7.73 vs. $7.39 a share expected, according to a Thomson Reuters consensus estimateRevenue: $24.75 billion vs. $24.22 billion expected, according to a Thomson Reuters consensus estimateThat's up compared to a year ago, when the Google parent reported adjusted first-quarter earnings of $6.02 per share on $20.26 billion in revenue (That means revenue increased 22 percent over the past year.)
Alphabet, the public holding company of Google, makes most of its money from advertising in its core search function and on YouTube.
Advertising revenues rose to $21.4 billion during the quarter, up from a little over $18 billion a year ago. Net income was $5.43 billion, up from $4.21 billion a year ago.
Those ads made headlines over the last two months after The Times of London's investigation found Google's YouTube video site ran ads for major brands next to neo-Nazi and jihadist videos. In response, major brands around the world like AT&T and Johnson & Johnson announced they would suspend some digital advertising as Google made changes to its system.
Still, revenues grew from last year in every geography: the U.S., Europe, the Middle East and Africa, Asia Pacific, and the other Americas. Alphabet shares are up more than 23.5 percent over the past year, and nearly 12.5 percent so far this year.
Traffic acquisition costs in the Google network were $4.63 billion, slightly higher than the $4.41 billion expected by StreetAccount. Mobile is more expensive to support, Porat said.
But revenue on Google properties, other revenue, and sales on the Google network all came in slightly above estimates.
Alphabet's so-called Other Bets category — which includes internet company Google Fiber, smart-home brand Nest, self-driving car company Waymo and divisions for life sciences and venture capital investing — has been under pressure as the company streamlines its spending.
VIDEO0:3700:37Alphabet earnings $7.73 vs $7.39 expectationsClosing Bell
Other Bets made big gains on its revenue over the past year, hitting $244 million over the past quarter, up from $165 million a year ago.
Porat has trimmed programs over the past few years: The company's modular phone, Project Ara, was scrapped, and smart-home unit Nest last year. More recently, Waymo has been engaged in a high-profile fight with Uber over .
Still, in a shareholder letter on Thursday, Google co-founder Larry Page highlighted the strength of these moonshot programs.
While some engineers have been moved away from Google Fiber, Google is still investing heavily in data centers, and hiring cloud engineers and product managers, Porat said.
"We clearly continue to benefit from our ongoing investments in product innovation and have great momentum in our new businesses across Alphabet," Porat said in a statement.
Watch: Alphabet reasonably valued relative to growth
VIDEO1:3201:32Alphabet reasonably valued relative to growth: ProClosing Bell
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97672a5bc0a7e3a6361debb14097c762 | https://www.cnbc.com/2017/04/27/alphabets-google-unit-grabbing-ever-more-ad-revenue-from-partners.html | Google is grabbing more and more ad revenue from partners | Google is grabbing more and more ad revenue from partners
VIDEO4:0904:09Google has to respond to brand safety challenge: WPP CEOSquawk Box Europe
Google's own Internet services grabbed an increasing share of digital advertising away from the partner sites that use its technology in the first quarter, yet another sign the Internet giant is extending its dominance over all online ad rivals other than Facebook.
The company said first quarter ad sales on its properties rose 21 percent during the period, while those on its partners' sites climbed just 8.6 percent.
Google's own sales now comprise 81 percent of the ad revenue derived from its online network, at $17.4 billion, up from 71 percent a year ago.
Total ad sales from all sources rose almost 19 percent to $21.4 billion.
"The increase in (Google) sites revenue reflects healthy growth in mobile search," Alphabet CFO Ruth Porat said on a conference call with analysts late Thursday.
Google has been updating the algorithm it uses to display search results to weed out sites marked by fake news, malware and other unsavory content.
It's also been dropping in its rankings mobile sites whose pages are unstable or take a long time to load on consumer's smartphones.
While the changes have been made in part to improve the Internet experience of online consumers, they're also benefitting the company's business.
VIDEO1:5801:58Instinet analyst: A little more pressure on Google versus AmazonPower Lunch
Alphabet reported first quarter revenue and earnings that topped Wall Street estimates, with sales rising 22 percent from a year ago to $24.75 billion.
Its shares rose as much as 4 percent in after-hours trading.
"The growth for the size of the company is actually pretty amazing," Denny Fish, a portfolio manager at Janus, told CNBC after the results were released.
The revenue gains were driven by a surge in activity on Google services, including its search page and services ranging from Gmail to YouTube.
The company said the number of paid clicks on its properties rose a whopping 53 percent year-over-year, while the rise on its partners' sites was a small fraction of that, at 10 percent.
The total number of clicks rose 44 percent.
Meanwhile, the cost-per-click on Google sites fell 21 percent as the company gets ever more efficient in providing results for advertisers.
At the same time, its YouTube property has been garnering an increasing share of video ad dollars.
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c20b7fcf93d2297c463d8d701319b9a1 | https://www.cnbc.com/2017/04/27/asian-markets-focus-on-us-tech-earnings-ecb-decision.html | Asian stocks close mixed; Trump comments on trade, defense riles Kospi | Asian stocks close mixed; Trump comments on trade, defense riles Kospi
Asian markets traded weaker on Friday as comments from President Donald Trump on an existing free trade pact with Seoul to payment for a sophisticated anti-missile system caught investors by surprise.
A businessman looks at an electronic share indicator at the window of a securities company in Tokyo on April 24, 2017.Toshifumi Kitamura | AFP | Getty Images
South Korea's Kospi index, initially in the green, dipped on news that Trump was threatening to terminate a trade agreement with the country. Trump also warned that conflict with North Korea was possible, even though he said he preferred a peaceful resolution.
South Korean officials told Reuters that the U.S. government had not yet "requested anything" from them regarding the agreement.
VIDEO2:0902:09FX markets unwinding Trump tradeStreet Signs Asia
The Kospi closed 0.18 percent or 4.02 points down at 2,205.44. Dollar/won traded lower after Trump's remarks, with the greenback fetching 1,136.35 won.
"I think what we're going to see now is markets perhaps need to price in a little bit more potential trade tension between the U.S. and (South) Korea. Even though we don't think the worst will happen — it's just a negotiating tactic — I think this is the start of more to come," said ANZ Research's Khoon Goh.
Shares of Korean automakers moved after the news, with shares of Hyundai Motors eventually closing 2.04 percent lower. Korean retailers were also hit, with Lotte Himart down by 2.83 percent and E-mart dropping by 2.13 percent at the close.
Over in Japan, the Nikkei 225 shed 0.29 percent or 55.13 points to close at 19,196.74. Australia's benchmark ASX 200 index closed 0.04 percent or 2.619 points higher at 5,924.1.
Markets in greater China were mixed. The was up 0.08 percent or 2.3794 points to close at 3,154.5663 and the Shenzhen Composite gained 0.362 percent or 6.8813 points to close at 1,906.9151. The was 0.45 percent lower.
VIDEO2:1902:19Japan: 'Inflation is nowhere near BOJ's target'Squawk Box Asia
Japan earlier reported that March CPI had increased by 0.2 percent from one year ago. This was below expectations of a 0.3 percent rise.
"(March CPI) excluding fresh food and energy ... has turned negative for the first time since 2013 ... While economic data seems to be doing okay, exports seem to be doing okay, but inflation is definitely not going the direction the Bank of Japan wants," Japan Macro Advisors Chief Economist Takuji Okubo told CNBC.
The dollar/yen strengthened slightly to trade at 111.3 earlier in the session but later reversed those gains to trade at 111.2. The greenback fetched 109.68 yen at the beginning of the week.
Over in Europe, the ECB left its monetary policy unchanged even as ECB President Mario Draghi acknowledged the economy recovery taking place in the Euro zone.
VIDEO3:1103:11'ECB meeting was a non-event'
Following the news, euro/dollar declined for a third consecutive session, trading at $1.0877 at 2:40 p.m. HK/SIN. The euro had jumped to a five-and-a-half month high at the beginning of the week after the first round of the French presidential election.
Meanwhile, shares of Japanese gaming giant Nintendo rose 2.11 percent after the company said yesterday that it was forecasting a 121 percent surge in operating profit for the new fiscal year. Nintendo expects to sell 10 million units of its latest Switch console. Nintendo shares traded at 28,045 yen a stock at the end of the session.
The dollar strengthened against a basket of rivals at 99.17, higher than the 98-handle seen earlier in the week. The Aussie gained against the dollar at $0.7473, but was in a general downward trend for the week.
Oil prices recovered but look set to end the week lower. U.S. crude was 1 percent higher to trade at $49.47 per barrel while Brent crude rose 0.95 percent to trade at $51.93.
Australia Q1 PPI and Singapore bank lending numbers were announced earlier in the session.
In the U.S., Amazon and Alphabet both beat Street expectations, causing Nasdaq 100 futures to surge after hours. The Nasdaq closed at a record high before the earnings were reported, rising 0.39 percent or 23.71 points to end at 6,048.94.
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15b9733b5a54eaa76a6aeb6d87a70bca | https://www.cnbc.com/2017/04/27/bitcoin-jumps-to-a-new-all-time-high-above-1300-capping-20-april-surge.html | Bitcoin jumps to a new all-time high above $1,300, capping 20% April surge | Bitcoin jumps to a new all-time high above $1,300, capping 20% April surge
People attend a bitcoin retail store opening in Hong Kong.Getty Images
surged to a new all-time high Thursday, capping a run of more than 20 percent in April, as investors bet that an ETF based on the digital currency was back on the table.
Bitcoin rose as much as 3 percent to a record high of of $1,331.31, according to the CoinDesk Bitcoin Price Index. The previous high was $1,325.81, reached on March 10 just before the SEC rejected a bitcoin exchange-traded fund application, which sent the digital currency reeling.
The SEC said on Monday it is reviewing its decision to reject the Winklevoss Bitcoin Trust.
VIDEO0:4200:42Bitcoin prices are on the riseNews Videos
BKCM CEO Brian Kelly doesn't see the SEC ultimately approving the ETF, but is bullish bitcoin nonetheless.
"The SEC is concerned about how most of the markets [for Bitcoin] has traded outside of the U.S. with no regulatory oversight," Kelly said. "As of this point, I don't think the SEC would approve the ETF. What would change my mind is if the ETF or SEC only traded Bitcoin on regulated exchanges."
Kelly, who has just opened a fund focused solely on investing in digital assets, said another reason for the price move this month is optimism for an upgrade to the Bitcoin software to handle transactions.
The digital currency, which was $1,079.75 at the end of March, is up 23 percent in April through Thursday. By comparison, gold futures were most recently at around 1,266 an ounce on Thursday, up 1 percent for the month.
Bitcoin Price, last 12 hours
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e3cf887be98506b92ecd14b01f87e3c6 | https://www.cnbc.com/2017/04/27/cnbc-and-inc-magazine-announce-the-iconic-tour-2017.html | CNBC and Inc. Magazine Announce the iCONIC Tour 2017 | CNBC and Inc. Magazine Announce the iCONIC Tour 2017
FULL-DAY EVENTS IN NEW YORK AND LOS ANGELES
Exclusive Evening Networking Events in Miami and Austin
ENGLEWOOD CLIFFS, N.J., April 27, 2017—CNBC, First in Business Worldwide, and Inc, Media, the publisher of Inc. Magazine, today announced the iCONIC Tour 2017, focused on entrepreneurship and innovation. The tour will consist of full-day events in New York, NY and Los Angeles, CA and exclusive evening networking events with a featured speaker in Miami, FL and Austin, TX. In its third year, the conference series combines dynamic interviews, inspiring presentations and business advice from leaders who have achieved iconic status. T-Mobile is the founding sponsor of the iCONIC Tour for the third consecutive year.
The first conference in 2017 is scheduled for Wednesday, June 7th in New York, NY, with the second full-day event scheduled for Wednesday, September 27th in Los Angeles, CA. The exclusive evening networking events will be held in Miami, FL in mid-July and Austin, TX in early December. In 2016, the iCONIC Tour traveled to Seattle, WA; Denver, CO; and Boston, MA.
"CNBC is thrilled to once again partner with Inc. to support small businesses and entrepreneurship," said Jonathan Meyers, General Manager and Senior Vice President of Events, CNBC. "This unique event brings some of the brightest and most successful entrepreneurs in the world together in an intimate setting to impart their hard-earned lessons and success stories to hardworking, aspiring entrepreneurs across the country."
"By combining forces with CNBC, we've been able to attract a wealth of marquee speakers to our iCONIC events," says Eric Schurenberg, president and editor-in-chief of Inc. Media. "This year, we're adding a new element to our star-studded programs—a series of practical, hands-on workshops to help entrepreneurs master new skills and really take their businesses to the next level."
"T-Mobile is known for breaking outdated rules and restrictions for customers – and that's why it's teaming up with iCONIC to share unfiltered business advice, mobile solutions and best practices with entrepreneurs across the U.S.," said Mike Katz, Senior Vice President for T-Mobile @Work.
At the full day events in New York and Los Angeles, attendees will be invited to participate in a custom social media marketing workshop hosted by T-Mobile, in collaboration with Facebook. The workshop will share key social media tips to help businesses grow their brands, including hands on, one-on-one sessions with select attendees.
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a27990e12a143a70c5f935f210f3aa5f | https://www.cnbc.com/2017/04/27/deutsche-bank-q1-earnings.html | Deutsche Bank shares down as lender misses revenue expectations | Deutsche Bank shares down as lender misses revenue expectations
VIDEO1:1101:11Deutsche Bank CFO: Aiming to post a profit for 2017Street Signs Europe
Deutsche Bank shares dropped more than 3 percent on Thursday morning after reporting lower-than-expected revenue for its first quarter at a time when banking stocks have seen sharp gains after centrist Emmanuel Macron emerged as the winner in the first round of French presidential elections last week.
Pre-tax profit of 878 million euro, up 52% year-on-yearRevenue: 7.3 billion versus 8.05 billion euros expected by Reuters' analysts
The bank's revenue stood at 7.3 billion euros, a 9 percent drop compared to this time last year. This missed Reuters estimate of 8.05 billion euros. The German lender said the first-quarter earnings were hit by a negative impact of credit spreads. It added however that without such impact, revenues would have been broadly flat on a yearly basis.
Net income, however, doubled to 575 million euros in the first quarter, compared to 236 million a year ago.
This was the first earnings report since the lender completed an 8.5 billion-euro capital increase earlier this month.
Marcus Schenck, Deputy CEO and CFO of Deutsche Bank, told CNBC on Thursday that the first quarter was a "decent start" into 2017 and this year "isn't going to be a loss year".
"Last year from a reported revenue point of view, we had a positive revenue as a consequence of our credit spreads widening. This quarter is the opposite. Our credit spreads, which is our wanted outcome, have come down substantially," he said.
VIDEO1:3801:38Deutsche Bank CFO: Transaction business is our only weak spot Street Signs Europe
According to Schenck, the only arm of Deutsche Bank that is slightly down is the transaction banking business after the German lender exited a number of countries and high-risk clients.
The German bank has struggled over the last few years due to weak earnings, a low-interest rate environment and penalties on past misconduct. Earlier this year, the bank paid $7.2 billion to settle a U.S. Department of Justice claim it misled investors over its handling of residential mortgage-backed securities (RMBS).
Cost-cutting has been one of the main policies to overcome such difficult times.The bank has lowered adjusted costs by 5 percent on a yearly basis. So far, 130 branches out of planned 188 closures in Germany have been completed and, in one-quarter, the bank made 1600 people redundant.
VIDEO1:4201:42Deutsche Bank CFO: In discussions with UK and the EUStreet Signs Europe
It's been reported that the biggest German lender could move 4,000 jobs from the U.K. to the euro zone as a result of the British decision to leave the European Union. Schenck clarified to CNBC that this figure is at the higher end of the spectrum.
"We all do not yet know what's the implications of Brexit on the financial industry," he said, adding that the bank is having conversations with both the U.K. and the euro zone to understand what will happen to the financial services industry.
"We'd expect that there's a number of activities that have to be moved into the euro zone and for us obviously Frankfurt is the most natural place to go. How many that's going to be? Honestly, we don't know today," Schenck said.
VIDEO1:0101:01Deutsche Bank CFO: Benefiting from strong US marketStreet Signs Europe
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e4188f792c3cffbe84ce273aa14ce989 | https://www.cnbc.com/2017/04/27/ex-treasury-sec-larry-summers-just-completely-trashed-the-trump-tax-plan.html | Ex-Treasury Secretary Larry Summers just completely trashed the Trump tax plan | Ex-Treasury Secretary Larry Summers just completely trashed the Trump tax plan
VIDEO5:1505:15Larry Summers on tax reform: 'Demonstrably false' regarded by experts as 'absurd'Squawk Alley
President Donald Trump's plan to roll back taxes in the hope that doing so will generate robust economic growth with little impact on debt and deficits is "absurd," former Treasury Secretary and White House economic advisor Larry Summers said.
In fact, Summers added in an interview with CNBC, that had he been asked to present such a plan with the notion that it would pay for itself, he would have refused.
"If I had been asked by the White House to assert a proposition as demonstrably false as the claim that this plan would produce revenue, I would have resigned rather than put the credibility of the department behind a proposition that no one with real experience would believe was true," he said.
Summers served as head of the Treasury during the Bill Clinton administration and as senior economic advisor to President Barack Obama.
The cornerstone of Trumps' economic agenda is that, as well as simplification of the tax code, it will unlock growth, which was strong under Clinton but plodding under Obama.
In a proposal rolled out Wednesday by Treasury Secretary Steven Mnuchin and Gary Cohn, Trump's chief economic advisor, the number of individual tax brackets would be cut to three and the levels for wage earners across the board would be reduced.
Larry SummersCameron Costa | CNBC
In addition, the plan would slash business taxes and give companies a much lower tax rate for profits earned overseas and brought back to the U.S.
Summers said he was surprised at the apparent lack of thought in a proposal that was presented as a single-page document.
"Most presidential campaigns during the primaries, when they put out a tax plan, they put out more than one page. They put out some analysis, some models, some careful articulation of the proposal and estimate its effects," he said.
"There's none of that coming from the administration, and yet there's this confident statement that it will pay for itself," Summers added. "I don't know how they could possibly know without having done economic work."
Comparing the Trump tax-cut plan to those launched by predecessors including Ronald Reagan and George W. Bush, Summers said there are arguments on both sides about their net effects.However, he said, there is "no — no serious read of the evidence to suggest that they came close to paying for themselves by stimulating economic growth."
Summers said sending out the Treasury secretary to make that claim undermines the office.
"I just don't understand what could cause an administration to put its secretary of the Treasury in a position to assert something ... that is generally regarded by economists as absurd," he added.
Still, White House budget chief Mick Mulvaney said Thursday that the Trump administration intended for its initial tax plan to be vague and that assessing its long-term impact is difficult right now.
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25ff79c80e8f23029562abddd4f1d496 | https://www.cnbc.com/2017/04/27/global-crude-oil-discoveries-plunge-to-record-low-and-its-gonna-get-worse.html | Global crude oil discoveries plunge to record low, and it's gonna get worse | Global crude oil discoveries plunge to record low, and it's gonna get worse
VIDEO0:3900:39Losses for Benchmark crude oil are acceleratingNews Videos
Conventional crude discoveries plummeted to a record low last year, one of the world's top energy policy advisers said.
And it likely won't get any better any time soon as energy companies gave the green light to the lowest number of new drilling projects in more than 70 years, according to the Paris-based International Energy Agency.
The IEA has warned that insufficient investment could lead to a tightening of global oil supplies. While that might seem like a welcome change in today's oversupplied market, prices could spike sharply higher in the coming years if drillers do not tee up enough new production to satisfy global demand.
Investment levels remain depressed, and exploration spending is poised to fall for a third straight year in 2017, IEA said in a new report.
VIDEO3:2803:28Trader breaks down the weakness in crudeTrading Nation
Energy companies have canceled or delayed $1 trillion in planned projects by one count, as oil prices remain mired in a slump going back to the summer of 2014. The price collapse was sparked by a boom in U.S. production and compounded by OPEC's refusal to cut output during the first two years of the downturn.
But now IEA says the pendulum could swing the other way, largely due to a drop in conventional oil projects, or those that don't require certain advanced drilling methods.
IEA's analysis finds:
Oil discoveries totaled 2.4 billion barrels in 2016, versus the average of 9 billion barrels in the last 15 years.Energy companies sanctioned 4.7 billion barrels of conventional oil resources for development, down 30 percent from 2015.Firms reached a final investment decision on the lowest number of projects since the 1940s.
Offshore drilling projects account for a big part of the pullback. Last year, just 13 percent of conventional oil projects that got the go-ahead were offshore. That compares to an average of 40 percent of projects between 2000 and 2015.
Those figures do not bode well for President Donald Trump's goal of increasing offshore drilling in the U.S. Outer Continental Shelf. He is expected to sign an executive order on Friday aimed at rolling back offshore drilling limits imposed by President Barack Obama.
While conventional oil activity is in freefall, U.S. shale drilling is on an upswing, thanks to American companies halving the cost of production, IEA notes. U.S. crude production has recovered to more than 9.2 million barrels a day, the highest level since late 2015.
Producers in the U.S. shale patch rely on an expensive method called hydraulic fraction in which they inject water, minerals and chemicals at high pressure into wellbores to break up shale rock and release oil and gas. More efficient "fracking" will help these producers grow output by 2.3 million barrels a day by 2022, IEA projects.
But shale cannot make up the shortfall in conventional oil development: Conventional sources account for 69 million barrels a day of the current global output of 85 million barrels a day.
"Every new piece of evidence points to a two-speed oil market, with new activity at a historic low on the conventional side contrasted by remarkable growth in US shale production," Dr. Fatih Birol, IEA's executive director, said in a statement. "The key question for the future of the oil market is for how long can a surge in US shale supplies make up for the slow pace of growth elsewhere in the oil sector."
VIDEO2:2902:29Will OPEC extend output cuts?Capital Connection
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cf4bd736331a2c8124b1935485e1496c | https://www.cnbc.com/2017/04/27/hong-kong-pro-democracy-activists-arrested.html | Hong Kong gets slammed after arresting pro-democracy activists | Hong Kong gets slammed after arresting pro-democracy activists
Hong Kong appears to be intensifying its crackdown on political dissent following the arrest of 11 pro-democracy advocates over two days.
On April 26, former legislators and well known pro-independence activists Yau Wai-ching and Sixtus Baggio Leung Chung-hang were charged with unlawful assembly and attempted forced entry for attending Legislative Council (LegCo) meetings last year after they were disqualified from office.
Pro-independence lawmakers Baggio Leung (L) and Yau Wai-ching (R) speak to the press outside the High Court in Hong Kong on November 30, 2016. Leung and Yau lost their appeal on November 30 against a ban preventing them from taking up their seats in parliament as Beijing faces accusations of stepping up interference in the city's politics.ANTHONY WALLACE/AFP/Getty Images
Nine more people were arrested on Thursday and charged with participating in unlawful assembly, obstructing police, and inciting disorderly conduct in a public place for their participation in a November protest. Among them were chairman of the League of Social Democrats Avery Ng Man-yuen as well as Derek Lam Shun-hin and Ivan Lam Long-yin from the Demosisto Party.
All eleven have been released on bail, but they face prosecution and possible prison sentences, according to Human Rights Watch.
"The repeated use of vague charges reeks of an orchestrated and retaliatory campaign by the authorities to punish those that advocate for democracy," said Mabel Au, director of Amnesty International Hong Kong.
"The government should be protecting freedom of expression and peaceful assembly but instead it appears intent on intimidating people who are challenging the authorities."
As many as 11,000 demonstrators took to the streets in November after China banned Leung and Yao from LegCo in a judicial review that was Beijing's most significant form of legal intervention since Hong Kong's sovereignty was transferred from the U.K. to the mainland in 1997.
VIDEO3:4703:47Why is Hong Kong housing so expensive?CNBC Explains
The duo, who won seats in the territory's parliament in September, made international headlines during their October oath-taking ceremony. Hong Kong politicians taking office must swear allegiance to the special administrative territory as part of China, according to Beijing's rules, but Yau and Leung instead pledged allegiance to "the Hong Kong nation" and held a banner saying "Hong Kong is not China."
This week's arrests are a break with Hong Kong's longstanding tradition of tolerating peaceful expression and demonstrations, Human Rights Watch said in a Friday statement.
"They are particularly alarming in light of central government advisers' statements in March that Beijing would use more legal means to strengthen control over Hong Kong," the organisation warned. "As the 20th anniversary of Hong Kong's handover approaches, the territory's autonomy looks increasingly fragile."
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3ce2f0f1c8c9ef723399bdd6f1d77138 | https://www.cnbc.com/2017/04/27/japan-data-deluge-on-cpi-retail-sales-household-spending.html | Japan's core consumer prices up 0.2% in March, miss expected 0.3% gain, retail sales surprise on upside | Japan's core consumer prices up 0.2% in March, miss expected 0.3% gain, retail sales surprise on upside
Tomohiro Ohsumi | Bloomberg | Getty Images)
Japan's core consumer prices rose 0.2 percent in March from a year earlier, government data showed on Friday.
The core consumer price index (CPI), which includes oil products but excludes fresh food prices, compared with economists' median estimate for a 0.3 percent annual gain.
Stripping away the effect of fresh food and energy, consumer prices fell 0.1 percent in March from a year ago.
Core consumer prices in Tokyo, available a month before the nationwide data, fell 0.1 percent in April from a year earlier, versus a 0.2 percent annual fall seen by analysts in a Reuters poll.
An economist told CNBC that the rise in core CPI was unlikely to change the Bank of Japan's (BOJ) policy.
"Bank of Japan's target is 2 percent and yes, the (CPI) number might be a little high but the current inflation is nowhere near the BOJ's target," Japan Macro Advisors Chief Economist Takuji Okubo said.
"(March CPI) excluding fresh food and energy ... has turned negative for the first time since 2013. So while economic data seems to be doing okay, exports seem to be doing okay, inflation is definitely not going the direction the Bank of Japan wants."
As well, data showed Japanese household spending fell 1.3 percent in March from a year earlier in price-adjusted real terms, government data showed on Friday, compared with the median forecast for a 0.3 percent decline.
And Japan's jobless rate held steady at 2.8 percent in March and the availability of jobs rose to the highest since November 1990, data from the Ministry of Internal Affairs and Communications showed on Friday. The seasonally adjusted unemployment rate compared with economists' median forecast of 2.9 percent.
In a later release, Japanese retail sales rose 2.1 percent in March from a year earlier, government data showed on Friday, compared with a median market forecast for a 1.5 percent increase.
Japan also reported that industrial output fell 2.1 percent in March from the previous month, government data showed on Friday, in a sign of a temporary slowdown in production. The result compared with the median estimate of a 0.8 percent decline in a Reuters poll of economists.
It followed a revised 3.2 percent increase in February, the data from the Ministry of Economy, Trade and Industry showed. Manufacturers surveyed by the ministry expect output to rise 8.9 percent in April and fall 3.7 percent in May.
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d5ebdecc746f88970de4561f34e1123d | https://www.cnbc.com/2017/04/27/trump-threatens-to-terminate-free-trade-deal-with-south-korea-says-he-wants-seoul-to-pay-for-thaad.html | Trump tough on South Korea: Threatens to terminate free trade deal, wants payment for THAAD missile defense system | Trump tough on South Korea: Threatens to terminate free trade deal, wants payment for THAAD missile defense system
VIDEO1:3701:37How Trump is changing US trade policyStreet Signs Asia
President Donald Trump said that he will either renegotiate or terminate a "horrible" trade deal with South Korea, Reuters reported late Thursday.
The president also said he wants South Korea to pay for the $1 billion THAAD missile defense system, Reuters said.
Responses to Trump's comments soon arose, with an official from South Korea's automakers association telling Reuters that the group is now concerned about "the uncertainty" of the free trade agreement.
Shares in Hyundai Motor fell as much as 2.4 percent following Trump's comments. South Korea's won turned weaker on the comments.
Khoon Goh, head of Asia research at ANZ, told CNBC such a reaction is expected given " massive amounts of foreign inflows" into Asia, particularly Korea and Taiwan, over the last month "as trade tensions between the U.S. and China have eased off."
"So investors are thinking that perhaps the worst on trade tensions with Asia is not going to happen," he said. "And all of a sudden, this has come from a bit of a left field, so I think what we're going to see now is markets perhaps need to start pricing a little bit more potential of trade tensions between the U.S. and Korea."
Still, he added that Trump's comments were likely "just a negotiating tactic."
An official from South Korea's Finance Ministry said that the U.S. administration had not yet requested anything on the free trade agreement.
And on the issue of THAAD payment, a foreign policy advisor to South Korea's presidential front-runner, Moon Jae-in, said that Seoul shelling out for the missile defense system is an "impossible option," according to Reuters.
A Terminal High Altitude Area Defense (THAAD) interceptor is launched during a successful intercept test, in this undated handout photo provided by the U.S. Department of Defense, Missile Defense Agency.U.S. Department of Defense | Missile Defense Agency | Reuters
The South Korean Defense Ministry said that there was no change to its position that the U.S. would bear the cost of THAAD deployment, Yonhap news agency reported. Earlier this week, Yonhap said the U.S. military had begun transferring parts of THAAD into a planned deployment site in South Korea.
The system, the Terminal High Altitude Area Defense, is designed to protect South Korea and Japan from missile attack, and it could be operational as soon as summer 2017. North Korea and its unpredictable leader Kim Jong Un possess nuclear weapons and make a habit of regularly threatening neighbors.
THAAD uses radar to track when a ballistic missile is launched and then intercepts and destroys the missile before it descends onto its target.
Now, Trump's hard stance comes as tensions are on the rise in the Korean Peninsula as U.S. rhetoric takes a sharper tone against the North.
In fact, Trump also told Reuters on Thursday that "there is a chance that we could end up having a major, major conflict with North Korea. Absolutely." Still, the president had emphasized to the news outlet that he would prefer a peaceful resolution to the situation in the region.
Some have theorized that THAAD may be an effective way to pressure China to help deescalate tensions with North Korea.
"We planted this high-end air defense system in South Korea that has obvious implications for the Chinese because the radar fans go all the way through Manchuria," former CIA Director Michael Hayden said this month, explaining that such a move will force Beijing to address the "bad toothache" of Pyongyang, according to Yonhap.
This is a breaking news story. Check back for updates.
—Reuters and CNBC's Seema Mody contributed to this report.
Correction: This article has been updated to reflect that THAAD stands for Terminal High Altitude Area Defense.
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f509f978cdf19e9dba242e74f9fcc733 | https://www.cnbc.com/2017/04/27/trumps-tax-plan-isnt-a-real-plan-commentary.html?__source=newsletter%7Cyourmoneyyourvote | Trump’s 'tax plan' isn’t a real plan | Trump’s 'tax plan' isn’t a real plan
Steven Mnuchin, U.S. Treasury secretary, right, takes a question during the White House press briefing with Gary Cohn, director of the U.S. National Economic Council, center, and Sean Spicer, White House press secretary, in Washington, D.C., U.S., on Wednesday, April 26, 2017.Andrew Harrer | Bloomberg | Getty Images
The Trump administration released a skeletal single-page outline for tax reform on Wednesday, one that was almost entirely ripped from the president's campaign proposals and concentrated on reducing rates for corporations and high earners.
The rollout focused on the easiest part of tax reform — cutting taxes — while avoiding the hard part: picking the losers of reform, who will see their taxes rise to offset the cuts.
"They are telling them all the good news," says Michael Graetz, a tax law professor at Columbia University, "but there must be some bad news for someone."
More from Vox: House Republicans have made a move to avert government shutdown — for at least a weekIf America becomes a dystopian hellscape, it might look like this Child poverty in the US is a disgrace. Experts are embracing this simple plan to cut it
There will be, eventually, if Trump hopes to craft a bill with congressional leaders that can make its way to his desk. But first, administration officials will have to fill in the blanks of his outline and make some hard choices about who — now or in the future — will pay the price of tax cuts today.
There are a lot of blanks left to fill in. Here are the most crucial ones:
The White House plan doesn't give any indication on how it expects to fill the as much as $7 trillion-plus hole that some experts say his plan could open up in the federal budget over the course of a decade.
The plan does raise revenue in a few ways, mainly by eliminating almost all personal deductions and exemptions, such as student loan payments and property tax deductions. That may offset some of the money lost from expanding the standard deduction, but no economic model has yet to predict that those changes will suffice to cover the trillions of dollars lost from lowering the tax rate on corporations and businesses.
The administration's plan also included a one-time "repatriation" tax on foreign profits that US multinational corporations have stashed overseas. Speaking at the White House, Treasury Secretary Steven Mnuchin didn't give a figure on how much that tax would be, but Trump has previously pushed for a 10 percent tax.
Right now American companies have $2.6 trillion in untaxed income earned abroad — a move many use to avoid paying the 35 corporate tax rate. Trump's "repatriation holiday" is supposed to encourage them to bring that money back at a lower tax rate, though there is no telling how many companies would do so.
Trump is also sticking to his decision to lower the tax rate for owner-operated businesses, known as pass-throughs, from 39.6 to 15 percent. Most US businesses are classified as pass-throughs because their income and deductions are filed through their personal tax returns.
The vast majority of pass-through businesses are already taxed at a 15 percent rate, so lowering the top rate would disproportionately benefit the wealthiest of them, mostly hedge fund managers, lawyers, and doctors, according to the Center on Budget and Policy Priorities. Such reductions would also be a major benefit for Trump, as most of his businesses are pass-throughs.
Lowering the tax rate on these business also encourages individuals to report their wages as business income instead of personal income, to avoid paying up to 35 percent in individual taxes (35 percent is the top individual tax rate that the plan proposes). The Tax Policy Center believes such tax avoidance would cost $650 billion.
On Wednesday, Mnuchin acknowledged this loophole, but promised to write rules to stop people from creating businesses for this reason. "Let me be clear: This is for small businesses, not a loophole for rich people to lower their tax bill," he said.
Yet at the briefing, Mnuchin didn't explain how he could close the loophole.
"That concerns me," Graetz says. "Those kinds of rules are very difficult to write. I am not sure they're even possible to write."
It's worth noting that Trump aides promised to craft such rules during the campaign, when similar concerns were raised over pass-throughs, but they never followed through.
Mnuchin said over and over Wednesday that the goal is to make these tax cuts permanent, though temporary tax cuts "are better than no tax cuts."
Calculating the cost of cuts will be crucial to the success of tax reform. The easiest route for Republicans, politically, is to get a bill passed through budget reconciliation, which only requires a simple majority in the Senate. For a permanent tax cut, the legislation would have to be revenue-neutral and not add to the deficit after 10 years. Lawmakers could skirt this rule by declaring the cuts would "sunset" after a period of years, in order to minimize their budgetary impact — and then plan to renew them later.
Mnuchin repeatedly promised the White House plan would "pay for itself," because the tax cuts will spur so much economic growth that the government will recoup most of the lost money. Yet no budget estimates using that model, known as dynamic scoring, have projected the Trump campaign cuts would produce anywhere close to enough growth to pay for themselves. The administration hasn't presented any evidence to support its rosy forecast.
This all comes back to the cost problem. One partial solution for it would be to revive the border adjustment provision that House Republicans have proposed. The idea of taxing imports and exempting exports was the House's main solution to offset the cost of cutting corporate rates.
Wednesday morning, Mnuchin suggested that the White House is warming up to the idea of reworking the border adjustment in some way. "We just don't think it works in the current form," he said.
He offered no details about how to fix it.
Commentary by Alexia Fernández Campbell, economic policy writer at Vox. Follow her on Twitter @alexiacampbell.
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d74cfdda9084613b2d79c9008c5c2634 | https://www.cnbc.com/2017/04/27/unicorn-frappuccino-bumped-up-starbucks-sales-more-quirky-drinks-to-come.html | Unicorn Frappuccino bumped up Starbucks' sales, more quirky drinks to come | Unicorn Frappuccino bumped up Starbucks' sales, more quirky drinks to come
Starbucks' Unicorn FrappuccinoSource: Starbucks
Fans of Starbucks' Unicorn Frappuccino should "stay tuned."
The "Instagramable" drink, which quickly sold out at Starbucks chains across the U.S., isn't the only funky Frappuccino that guests will be getting this year, said Howard Schultz, the company's former CEO.
"Just stay tuned because we have a lot more coming," he said during an earnings conference call Thursday.
Schultz said that the pink-and-blue drink drove significant traffic to chains during its limited run as well as brand awareness and affinity. These sales will likely be seen in the company's fiscal third-quarter earnings.
The company said same-store sales improved as the second quarter progressed, culminating with 4 percent U.S. same-store sales growth in March, and further acceleration into April.
"We will bring at least one new entirely new drink into Happy Hour this year that is going to be as good as Unicorn or better," CEO Kevin Johnson said.
The Unicorn Frappuccino was a precursor to Starbuck's Frappuccino Happy Hour, which offers half-priced fraps to customers from 3 pm to 5 pm. Rewards members will have until 6 pm to scoop up their discounted Frappuccino.
Watch: Starbuck's intros Fruitcake Frappuccino
VIDEO0:4000:40Starbucks debuts Fruitcake FrappuccinoNews Videos
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8f440c2785e149b8f6b2e231bddd77a0 | https://www.cnbc.com/2017/04/27/united-ceo-oscar-munoz-blames-david-dao-incident-on-system-failure-apologizes-for-rabbit-incident.html | United CEO Oscar Munoz blames David Dao incident on ‘system failure,’ apologizes for rabbit incident | United CEO Oscar Munoz blames David Dao incident on ‘system failure,’ apologizes for rabbit incident
VIDEO1:4201:42United offers new passenger policy following dragging incidentSquawk Box
United Airlines CEO Oscar Munoz blamed the now infamous incident where passenger David Dao was dragged off a flight on "a system failure" — even as he apologized for yet another embarrassing mishap, this time involving the death of a prized bunny rabbit.
"It was a system failure across the board," Munoz said in an exclusive interview with NBC News' Lester Holt, adding that he had introduced changes at the company because "a circumstance like we've all witnessed should have never happened, never happened."
Dao, a 69-year-old doctor, was caught on video being dragged out of his seat and off a flight at an airport in Chicago after he had been selected as one of four passengers to be removed off the plane to make room for airline staff who were heading to Louisville to be in place for a morning flight.
More of NBC News' exclusive interview with United CEO Oscar Munoz will air on Thursday on TODAY and Nightly News with Lester Holt.
Chicago Department of Aviation employees forcibly removed Dao from the plane, leaving him bloodied and with injuries that included two lost teeth, a broken nose and a "significant" concussion, according to Dao's attorney. At least four law enforcement officers have been placed on leave following the April 9 incident.
More from NBC News:
'Just kill me': Police detail doctor's removal from United flight David Dao's lawyer is repping woman in American Airlines incidentWhite House says United video Is 'troubling' as lawmakers question incident
Meanwhile, United was reeling from another public image crisis on Wednesday after a valuable giant rabbit named Simon died while on the ground after a long flight from London.
"We are deeply sorry for the loss of anything from your luggage to, of course, a loved pet," Munoz said, adding that they were continuing to fix any ongoing concerns with the airline.
When asked if the incident with Dao had hurt the company's bottom line, Munoz claimed he had not yet checked on the numbers.
"I haven't looked. And our team hasn't looked," he said.
"And so we'll see. But that hasn't been a focus for me or for us during this period," he added.
Shares of United Continental had slipped immediately following the Dao incident, but the company's quarterly earnings report slightly beat estimates later in the month.
Munoz said that while some of the company's policies and procedures were "dated," they were still working to "put the customer at the center of everything we do."
That includes customers who pay both high and low fares, he said.
"We're going to teach and broaden sort of the cultural impact of respect and dignity, regardless of where you're sitting," he added. "And that's why we've said — once you've boarded an aircraft, we're not going to take you off, except for safety and security."
@SenateCommerce tweet
Munoz also noted that United has implemented changes including requiring crew members to be booked on flights at least an hour before takeoff.
And on Thursday United announced there will be additional training for front-line employees on how to deal with difficult situations and make on-the-spot decisions. The company also says they are setting up an automated system that will ask passengers at check-in if they would be willing to give up their seat — with offers of up to $10,000 for the inconvenience.
Dao's attorney, Thomas Demetrio, in a statement early Thursday applauded United for promptly making policy changes that he said are "passenger friendly and are simple, commonsense decisions on United's part to help minimize the stress involved in the flying experience."
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d2970cbf8d2731d7baf38aef2934e55e | https://www.cnbc.com/2017/04/27/united-settles-with-passenger-dragged-off-flight.html | United settles with passenger dragged off flight | United settles with passenger dragged off flight
VIDEO1:3701:37Dragged passenger reaches settlement with UnitedClosing Bell
United Airlines has settled with Dr. David Dao after he was dragged off a flight earlier this month.
As part of the deal, the settlement amount remains confidential.
Earlier Thursday, United unveiled a slew of policy changes that it hopes will prevent a repeat of the public relations disaster that has engulfed the company after Dao was forcibly removed from a plane on April 9.
Dao was a passenger on Flight 3411 from Chicago to Louisville, which was overbooked. He and other passengers were offered $800 to give up their seats for United crew members.
The airline said it will now offer up to $10,000 to customers who volunteer to give up their seats on an overbooked flight.
Social media erupted in fury after videos and photos of the incident circulated. CEO Oscar Munoz drew fire when he used the euphemism "re-accommodate" in a public statement to describe what happened to Dao.
Munoz did not improve the situation when he said Dao was "disruptive and belligerent" in an email to employees. He has since changed his tune and repeatedly apologized for how the airline handled the situation.
United should be applauded "for this acceptance of corporate accountability," said Thomas Demetrio, one of Dao's lawyers.
VIDEO1:1601:16Attorney of removed United passenger releases statement on behalf of familyClosing Bell
"Dr. Dao has become the unintended champion for the adoption of changes which will certainly help improve the lives of literally millions of travelers," Demetrio said. "I sincerely hope that all other airlines make similar changes and follow United's lead in helping to improve the passenger flying experience with an emphasis on empathy, patience, respect and dignity."
The settlement also releases Republic Airways and the City of Chicago from any responsibility, according to Reuters. The incident occurred on a United Express flight operated by Republic Airways.
United said in a statement that it is pleased to have reached an "amicable resolution."
"We look forward to implementing the improvements we have announced, which will put our customers at the center of everything we do," the airline said.
Shares of United pared losses, nearing session highs after the news.
This story is developing. Please check back for further updates.
— Reporting by CNBC's Phil LeBeau. Written by Christine Wang. Reuters contributed to this report.
Watch: United 'pleased' it could reach an amicable resolution
VIDEO1:0401:04United: 'Pleased' we reached an amicable resolution Closing Bell
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6b2f304784b04efe632e501556dfeb55 | https://www.cnbc.com/2017/04/27/us-markets.html | Nasdaq closes at a record high ahead of major tech earnings | Nasdaq closes at a record high ahead of major tech earnings
VIDEO1:1501:15U.S. stocks traded in a narrow range ThursdayNews Videos
U.S. stocks closed higher Thursday ahead of major tech company earnings.
The Dow Jones industrial average and the S&P 500 struggled to hold opening gains, while the tech-heavy Nasdaq composite closed at a record high.
Comcast, PayPal and Amazon.com were among the greatest contributors to gains in the Nasdaq.
Ahead of the open, NBCUniversal parent Comcast reported better-than-expected quarterly profit of 53 cents per share and revenue also above forecasts. Shares climbed nearly 4 percent, tracking for their best day since Feb. 3, 2016
Information technology was among the top S&P 500 performers, while energy was the worst, dropping more than 1 percent as oil prices fell about 2 percent on oversupply concerns.
U.S. crude oil futures for June delivery hit their lowest since March 29 and settled at $48.97 a barrel, tumbling 1.3 percent.
While the summer driving season has historically helped drive oil prices higher, domestic inventory levels "remain elevated by historical standards," Lindsey Bell, investment strategist at CFRA, said in a Thursday note to clients.
"We remain hard pressed to get excited for the prospect of higher oil prices in a sub-two percent GDP growth environment as production in the U.S. continues to increase and rig counts rise," Bell said. "Incremental demand from emerging markets would be necessary to more substantially drive down inventory levels."
Alphabet, Amazon.com, Intel, Microsoft, and Starbucks are among companies set to report after the closing bell.
"It's policy grabbing the headlines but the earnings still drive the market and the matter of the fact is, the earnings have been pretty good," said JJ Kinahan, chief strategist at TD Ameritrade.
A trader works on the floor of the New York Stock Exchange (NYSE) shortly after the opening bell in New York, U.S., March 22, 2017.Lucas Jackson | Reuters
Technology, a key part of the so-called growth trade, has led the U.S. market rally so far this year.
The major U.S. stock indexes closed marginally lower Wednesday, holding within 1 percent of their intraday highs, after the announcement of President Donald Trump's tax plan. Top officials called the proposal the "biggest tax cut" in U.S. history but remained vague on highly anticipated details such as the tax rate on repatriation of overseas profits.
"I just think we're a little extended after the two-day move [earlier this week]," said Peter Coleman, head trader at Convergex. "Everybody's anticipating the tax plan. Although they gave some detail it wasn't very specific."
Durable goods orders rose a less-than-expected 0.7 percent in March. Weekly jobless claims increased more than expected to 257,000. Pending home sales fell 0.8 percent in March.
Treasury yields traded mostly lower. The euro held below $1.090.
The European Central Bank kept its benchmark interest rate at zero percent and monetary policy unchanged. ECB President Mario Draghi said in an opening statement that net asset purchases at a new monthly pace of 60 billion euros (nearly $65.6 billion) would "run until the end of December 2017, or beyond, if necessary."
Major U.S. Indexes
The Dow Jones industrial average closed 6.24 points higher, or 0.03 percent to 20,981.3. Boeing and Home Depot had the greatest positive impact, while DuPont and Caterpillar contributed the most to losses.
The rose 1.32 point, or 0.06 percent, to 2,388.77, with consumer discretionary and information technology leading five sectors higher and energy the greatest laggard.
The Nasdaq composite rose 23.71 points, or 0.39 percent, to 6,048.94.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded lower at 10.37.
About four stocks declined for every 3 that advanced on the New York Stock Exchange, with an exchange volume of 1 billion and a composite volume of 4.077 billion at the close.
U.S. light crude ended Thursday's trade 65 cents, or 1.3 percent, lower at $48.97, having fallen to a fresh four-week low.
Gold futures for June delivery climbed $1.90 to $1,266 an ounce.
On tap this week:
Thursday
Earnings: Alphabet, Microsoft, Intel, Amazon.com, Raytheon, Baidu, Starbucks, Expedia, Comcast, Bristol-Myers Squibb, Flex, GoPro, Western Digital, Vertex , Sirius XM Radio, Under Armour, American Airlines, Southwest Air, MGM Growth, Generac, Domino's Pizza, CME Group, KKR, Johnson Controls, Union Pacific, UPS, Total, Celgene, Deutsche Bank, Alexion Pharma, Nintendo, AbbVie, Bayer, Air Products
Friday
Earnings: Exxon Mobil, Chevron, Colgate-Palmolive, Honda Motor, Barclays, UBS, Sony, Synchrony Financial, Spirit Airlines, Autoliv, Sanofi, Spirit Airlines, Goodyear Tire, Calpine, Cabot Oil and Gas, Phillips 66, Weyerhaeuser
8:30 a.m. Q1 adv Real GDP
9:45 a.m. Chicago PMI
10:00 a.m. Consumer sentiment
2:30 p.m. Philadelphia Fed President Patrick Harker
*Calendar subject to change.
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e499fe0d767f816d0101ad2cec45f232 | https://www.cnbc.com/2017/04/27/white-houses-mulvaney-says-tax-plan-was-intentionally-vague.html | Trump's tax plan was intentionally vague, White House's Mulvaney says | Trump's tax plan was intentionally vague, White House's Mulvaney says
VIDEO1:0701:07OMB Director Mulvaney: No way to 'score' tax planSquawk Box
White House budget chief Mick Mulvaney said Thursday the Trump administration meant to make the tax plan outline it released vague, and assessing its long-term effects is difficult at this point.
The long-awaited proposal unveiled Wednesday did not include many key details, such as the tax rate for corporate cash repatriated from overseas. The White House was also vague about how it would pay for what it calls the biggest tax cut in U.S. history without busting the federal deficit, though Treasury Secretary Steven Mnuchin insisted economic growth and the closing of loopholes would make up for the lost revenue.
Mulvaney, a budget hawk when he served in Congress, told CNBC on Thursday "there's no way to know" yet what effect the plan will have on the deficit.
"There's no way to score what we put out yesterday. And we did it on purpose. Not to try and hide the numbers, but to say, 'Look, this is the first discussion,'" the Office of Management and Budget director told CNBC's "Squawk Box."
Mulvaney said the White House "learned a lesson" from the failed first effort led by House Speaker Paul Ryan to replace the Affordable Care Act. The administration wanted to get involved in the discussion on tax reform "much earlier," he said.
Trump's plan calls for cutting income tax brackets from seven to three, with a top rate of 35 percent and lower rates of 25 percent and 10 percent. Mulvaney said the White House is working with Congress to decide what income ranges will fall under those brackets.
The White House has signaled it will not support a border adjustment tax, a controversial revenue-raising piece of the House tax plan, as it stands. Critics of Trump's tax plan have questioned what he would do to offset the lost revenue from massive tax cuts.
Mulvaney said the White House is "looking at other ways," including the elimination of many deductions like those at the state and local level.
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80bfdff464628b30ea6f0b0bad7376ce | https://www.cnbc.com/2017/04/28/electrolux-earnings-q1-2017.html | Electrolux chief hails consumer confidence, lower interest rates for profits | Electrolux chief hails consumer confidence, lower interest rates for profits
VIDEO1:5901:59Electrolux CEO: We're in an extremely competitive industryStreet Signs Europe
Lower interest rates and increased consumer demand helped Electrolux beat analyst forecasts and report better than expected first quarter earnings, CEO Jonas Samuelson told CNBC .
The Swedish multinational home appliance manufacturer was trading at the top of the pan-European Stoxx 600 early Friday after operating earnings rose to 1.54 billion Swedish crowns ($174 million) ahead of a mean forecast of 1.33 billion in a poll of analysts.
"The consumers are there in most of our key markets. We see more confidence: low interest rates are really supporting demand and will support the continued good demand we see for this year and the coming years," Samuelson said Friday.
Electrolux's strong performance was also buoyed by a series of small to medium acquisitions in the first quarter, including Anova, Grindmaster and Kwikot.
Samuelson said he expects to see "a lot more opportunities over those lines going forward," however adding that opportunities for major acquisitions were limited. This follows the collapse of the company's attempted purchase of GE's appliance unit in late 2015.
Follow CNBC International on Twitter and Facebook.
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3a61eb0b9af2964676c0bb0efe0f16bd | https://www.cnbc.com/2017/04/28/full-interview-with-billionaire-mario-gabelli-on-a-possible-pullback-trump-stock-picks.html | Full interview with billionaire Mario Gabelli on a possible pullback, Trump, stock picks | Full interview with billionaire Mario Gabelli on a possible pullback, Trump, stock picks
Billionaire Mario Gabelli shared his views on the market, infrastructure and his top stock picks in an interview Friday on CNBC's "Power Lunch."
On the market: "The market itself to me has no margin of safety, but it's ok," Gabelli said. In May 2010, "the market had a real crash, and that was a tiny sample of what can occur in the future because of the untested ETFs, the untested flash trading, the untested absence of a buffer known as specialists both upstairs and downstairs," he said.
On infrastructure: "Infrastructure is important because it helps fiscal stimulation. It offsets monetary policy. It helps the jobs in the middle of the country. It helps everyone," Gabelli added. Gabelli is the CEO, founder and chairman of Gamco Investors.
He also discusses:
Amazon Oil Trump and taxesHis top stock picks
To watch the broadcast interview in its entirety, you must be a CNBC PRO subscriber.
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628ba158d98442352ee8129e74e13f0f | https://www.cnbc.com/2017/04/28/trump-helped-make-stock-market-a-winner-in-first-100-days-but-the-next-100-could-be-harder.html | Trump helped make stock market a winner in first 100 days, but the next 100 could be harder | Trump helped make stock market a winner in first 100 days, but the next 100 could be harder
VIDEO4:4604:46Santoli: Earnings and big tech stocks confirm what market sniffed outClosing Bell
By stock market standards, President Donald Trump has been a smashing success in his first 100 days and in the days following his election.
The more than 5 percent gain in the in the 99 days since his inauguration is the third-best performance by the index for any president's century mark since World War II. The more than 11.4 percent gain since Election Day also ranks third, behind the same two presidents—John F. Kennedy and George H.W. Bush.
But the key to his next 100 days could depend on his ability to work with Congress and show some proof that his policies will ultimately materialize into law — most importantly tax reform. His 100th day is Saturday.
"I think the equity market no doubt is pricing in hope. ... If we fast-forward to the end of the year, and nothing was done on taxes, I think this market gives up half of what we've gained," said Leo Grohowski, CIO at BNY Mellon Wealth Management. Grohowski said his forecast is not scientific, but he would expect a chunk of the market gains since Election Day to start to evaporate.
"I don't think this market is up entirely on fluff, but I do think that the economy that this administration inherited is due in large part to the aggressive stimulus from monetary policy. I think it was on a better footing, and that's responsible for some of the gains we're seeing," he said. "Tax reform, regulatory relief and infrastructure spending — that's the big three the market was taking away from the Trump election."
Since Trump won the election, confidence among consumers and businesses has improved dramatically. Some of those readings, while still elevated, are off their highs. But in the meantime, some of the "hard data," like jobs, retail sales and Friday's first-quarter GDP have been coming in below forecast and point to a possible soft patch of growth.
"We need to see a convergence of the elevated confidence to the very anemic economy, and in order to keep the equity market moving forward, you need the convergence to be driven by better economic numbers," said Julian Emanuel, equity and derivatives strategist at UBS. "We're getting to the point where people are starting to wonder whether the potential that was reflected by the surge in confidence can actually be realized, which is why the next week or two in terms of the data is important, and we obviously want to see further progress on the policy front."
S&P 500 performance in first 100 days, and election through 100 Days
Source: CFRA, data as of 4/26/17
The stock market, however, has been patient about the weaker economic reports. Economists expect the soft patch to end, and the second quarter should show a pickup, with growth closer to 3 percent than the first quarter's paltry 0.7 percent. Corporate earnings are also showing surprising strength with profits up more than 11 percent for the first quarter so far.
The corporate earnings picture is certainly helping the market rally. Trump's 11.4 percent since the election, compares with 18.3 for Kennedy and 12.3 for Bush. Kennedy's 100-day gain was 9 percent, while Bush had a 7.7 percent rally, according to CFRA. Going back further, to the Depression in the 1930s, Franklin Roosevelt had an 86.5 percent gain in his first 100 days, and a 50.4 percent gain between the election and the end of his first 100 days.
Grohowski said what is surprising is how low the volatility has been with Trump in office, compared with expectations before Election Day. Since the election, Grohowski said there's been only one day in 116 sessions, where the has declined by more than 1 percent.
Before his election, the market was apprehensive that Trump would create market turmoil, taking protectionist actions that would be negative for stocks. So far, while his administration has acted on trade, it's been mostly in ongoing cases, such as the soft lumber dispute with Canada. The Trump administration put a 20 percent tariff on that lumber this past week, in a disagreement that has been brewing since the 1980s.
His rhetoric also has softened on Mexico, despite a tumultuous several hours Wednesday when the White House threatened to drop out of the North American Free Trade Agreement but then reversed it. Despite his pre-election vows, Trump also said he would not label China a currency manipulator, and he shows signs of willingness to work on trade with China, as he also calls on its help to deal with North Korea's nuclear threat.
The president has also filled his days meeting with America's CEOs, making it clear he wants jobs to stay in the U.S., but also to get rid of burdensome regulations, making it easier to do business and be more competitive.
VIDEO4:2404:24Earnings vs. the economyPower Lunch
This past week, he unveiled his tax plan, with a 15 percent corporate tax rate and a proposal to give companies a tax break to bring back cash stashed overseas. He also simplified individual tax rates, but both plans seek to remove deductions that will not be easy to eliminate. The House also has its own tax plan, cutting corporate taxes to 20 percent but including some proposals to provide to make up for the cuts.
While the White House tax plan is a step forward, the markets are still skeptical that it does not have a clear way to raise revenues, and it will not make it through Congress without a lot of modification, and possibly sparring.
But it was also seen as the opening round in what could be a long negotiating process and that as much as anything is a concern to markets. The failure of Republicans to vote on a bill to replace Obamacare in March suggests that there may not be the smooth sailing hoped for when Republicans won the White House and both chambers of Congress.
"For us, as long as progress seems to be made, as long as it's tax reform and not a one-time tax cut, I think market participants would be more willing to wait," said Grohowski, who said the market wants to see some action by the end of the year, or early next year .
As for whether the Trump rally will fall prey to the seasonal forces of Wall Street's "sell in May" phenomena, Grohowski does not believe any losses would be deep, but the sell-off could come during the typically weaker months of the year.
"There may be some credence to that this year only because of how well the market has done. We never know what's going to cause that 3, 5 or 7 percent pullback, but given how well the market has done, and how calm things have been, I think we could be in for a more disappointing late spring and summer. There's no doubt the market might be ripe for profit-taking. We're certainly not expecting any major pullback because we continue to see these pullbacks bought quickly. There's a lot of dry powder out there," he said.
Watch: Jeremy Siegel makes the bull case for stocks
VIDEO5:2905:29Jeremy Siegel makes the bull case for stocksTrading Nation
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b7d2da451d712540c8fadb14924595a3 | https://www.cnbc.com/2017/04/28/trumps-trade-approach-a-step-back-amcham-group-says.html | Trump's trade approach 'a step back,' AmCham group says | Trump's trade approach 'a step back,' AmCham group says
VIDEO1:2301:23Multilateral vs bilateral trade dealsStreet Signs Asia
U.S. President Donald Trump's move to chuck the trade rulebook for a maverick style has been "a step back" for global commerce, said Steve Okun, vice chairman for the Asia Pacific Council of American Chambers of Commerce.
"[For] the four presidents preceding Donald Trump, we had a focus on a multi-lateral system that was rules based, and that evolved over time and it went from FTAs (free-trade agreements) and WTO (World Trade Organization) and up to the TPP (Trans-Pacific Partnership)," Okun told CNBC's "Street Signs" on Friday.
"The Trump administration seems to be shifting that from a multilateral to a bilateral and from a rules-based to a transactional," Okun said. "It is certainly a step back."
As an example, Okun cited Trump's indication that China's help with North Korea would lead to changes to any bilateral investment treaties or trying to use foreign policy over the THAAD missile defense system to pressure South Korea on trade.
Okun compared bilateral trade deals to a spaghetti bowl in their complexity.
"The U.S. has 14 different FTAs right now. The U.S.-Singapore FTA has slightly different provisions than the U.S-Korea FTA, which has slightly different provisions than the U.S.-Australia FTA, but that doesn't include countries like Malaysia and Vietnam," he said.
Shipping containers are offloaded from a cargo ship at Port Everglades in Fort Lauderdale, Florida.Getty Images
"If you're a business and you have a global supply chain and you trade across borders, how are you going to put all this together to take advantage of those bilaterals? You can't," Okun said. "The multilateral system eliminates the spaghetti bowl problem. And it also brings a set of rules that you can craft your business around and you can craft your supply chain around."
The Trump administration has created an eventful week on the trade front.
Late Thursday, Trump said he will either renegotiate or terminate a "horrible" trade deal with South Korea and he wanted the country to pay for the $1 billion THAAD missile defence system the U.S. deployed there, according to a Reuters report.
Trump also told Reuters on Thursday that he had been "psyched" to terminate the North American Free Trade Agreement, or NAFTA, between the U.S., Mexico and Canada, but that he had reconsidered.
Multiple media reports had circulated Wednesday saying Trump was considering an executive order to remove the U.S. from NAFTA, but later Wednesday evening, Trump agreed in phone calls with the leaders of Mexico and Canada that he wouldn't terminate the treaty and would re-negotiate it instead.
The U.S. Commerce Secretary Wilbur Ross seconded plans to tinker with NAFTA.
VIDEO1:3301:33Trump gets big E, for Expected, on trade: APCACStreet Signs Asia
"The rules of origin in NAFTA need some tightening. The rules of origin are what let material outside of NAFTA to come in and benefit from all the taxes and tariff reductions within NAFTA," Ross told CNBC on Thursday.
"It was a silly idea to let a lot of outside stuff in. The whole idea of a trade deal is to build a fence around the participants inside and give them an advantage over the outside. So there's a conceptual flaw in that."
To an extent, Okun agreed that NAFTA needed renegotiation.
"What Secretary Ross was talking about was one of the biggest issues that was negotiated in the TPP," Okun said. "All of that was negotiated at length in that agreement."
Previously, Trump pulled the U.S. out of the Trans-Pacific Partnership, or TPP, a broad 12-nation trade deal, which the U.S. president claimed was a "disaster" that would hurt U.S. manufacturing.
Okun added, "I wouldn't be surprised if the negotiations start with where we were on the TPP on rules of origin and then apply it to NAFTA."
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52c4f73c3ba6e041da6a4907475e0887 | https://www.cnbc.com/2017/04/29/googles-peter-norvig-how-to-prepare-for-ai-job-losses.html | Here’s how one of Google’s top scientists thinks people should prepare for machine learning | Here’s how one of Google’s top scientists thinks people should prepare for machine learning
Peter Norvig, Director of Research at Google.Source: Stevens Institute of Technology
People like famed physicist Stephen Hawking and Tesla's Elon Musk have issued dark warnings of a world where computers become so sophisticated, so quickly, that humanity loses control of them—and its own destiny as a result.
Yet Peter Norvig, a leading artificial intelligence scientist and a director of research at Google, thinks that's far-fetched. "I don't buy into the killer robot [theory]," he told CNBC this week.
The real worry is how to prepare for the mass elimination of jobs that is surely coming, he said.
"I certainly see that there will be disruptions in employment … we've already seen a lot of change, that's going to continue," Norvig said in an interview, before a lecture on machine learning at the Stevens Institute of Technology.
By now there's wide consensus on this matter, the question is really just scale — whether the impact of machine learning is minimal or whether it consumes half of all jobs over the next decade.
Although this process is well underway with manufacturing jobs, more and more it's going to creep up the value chain, altering or eliminating any number of jobs in law, finance and even media.
"The pace may be so fast that it [will] cause disruptions," Norvig said. "So we need to find ways to mitigate that."
Be aware of the various technologies and be able to use them, and apply them to whatever field you're interested in.Peter Nordvigresearch director, Google
Norvig, a former computer scientist as NASA, sympathized with anyone frightened by the prospect. "It is scary," he said.
But just as the internal combustion engine ultimately led to the demise of the stagecoach, and also to millions of new jobs, so will these destructive technologies lead to new opportunities that are now unimagined.
"It's easy to see jobs disappearing ... [but] it's hard to see the new jobs that will be invented because they don't exist yet.
"There will always be stuff to do," he said.
Young people starting on their career path shouldn't necessarily be discouraged by machine learning, or abandon career aspirations because of it, Norvig said.
Instead, "find something [you're] interested in that provides something that people want, and think deeply about it."
"Be aware of the various technologies and be able to use them, and apply them to whatever field you're interested in," he added.
Norvig also believes the rest of society has an obligation to support—either through universal basic income, a WPA-like program, or some other means—people whose livelihoods are eliminated so quickly that they are unable to adapt.
"There has to be some social program for people who say 'I had a job, and now I don't—I've got no family to fall back on, what do I do?'" he said.
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