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6b9126c181d96def0bb2cbf946cf6d9a | https://www.cnbc.com/2017/04/29/ron-paul-fed-actions-will-soon-cause-a-long-overdue-correction.html | Ron Paul: Fed actions will soon cause a long-overdue correction | Ron Paul: Fed actions will soon cause a long-overdue correction
VIDEO7:1907:19Ron Paul on the Fed, stocks and goldTrading Nation
Former Rep. Ron Paul, who has run for president several times, is predicting the Federal Reserve's actions will have serious consequences for the stock market, just as the latest growth figures suggest the economy may have hit a soft patch.
According to government figures released on Friday, the nation's gross domestic product fell to 0.7 percent in the first quarter — the lowest rate in three years — as personal spending slid to its worst level since 2009. That data came on the heels of a jobs report that showed the economy created far fewer jobs in March than the prior month, even as the unemployment rate fell.
Paul told CNBC a correction is "inevitable," even as investors cheer the new record highs.
"We spend too much, we borrow too much, and we distort the markets," Paul said on "Trading Nation" this week. "The bigger the distortions have lasted, the bigger the bust will be."
The Federal Reserve holds its meeting on interest rates the first week in May. Wall Street doesn't predict a rate hike this time, but the consensus still calls for two more rate hikes this year.
In coming months, the Fed also plans to unwind its balance sheet, which holds $4.5 trillion in bonds.
But Paul, a Republican known for his libertarian policies, predicted it will be too little, too late. He warned the Fed is going to push the economy over the edge and should have let the market determine the rate of interest.
"It has been especially bad in the last 10 to 15 years. I mean they have driven these interest rates so terribly low, and everybody was recognizing it even when Greenspan was there," said Paul. He said the Fed is likely to unwind during a market downturn.
"There's enough evidence around it even though there's some euphoria on Wall Street. I still think there are serious problems in the economy," he added.
Paul said the main problems are "uncontrollable spending" and financial issues affecting the middle class.
"When monetary policy destroys the currency, it always destroys the middle class," he said.
Not even the 's historic milestone is altering Paul's read on the markets. The index broke 6,000 this week for the first time ever.
"All you have to do is go back to the year 2000, and the Nasdaq was at 5,000. And now it's all the way up to 6,000, after what, 17 years?" asked Paul, who's been invested in gold.
"Gold back then was less than $300, and it's $1,200. So I would say gold has done very, very well in that period of time," Paul said. "And besides the 20 percent increase in the Nasdaq, if you discount for the inflation ... that's not the greatest investment in the world. "
Want to be a part of the Trading Nation? If you'd like to call in to our live Wednesday show, email your name, number and a question to TradingNation@cnbc.com
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eebf67eeb2afe57fad7ccb732722d8e2 | https://www.cnbc.com/2017/05/01/bill-gates-roger-federer-played-tennis-for-charity.html | Bill Gates and Roger Federer teamed up to play tennis for charity | Bill Gates and Roger Federer teamed up to play tennis for charity
Add tennis star to Bill Gates' resume.
Gates paired up with Roger Federer for a one-set doubles exhibition match against tennis pro John Isner and Mike McCready of Pearl Jam in Seattle on Sunday.
Gates and Feder won 6 - 4, mostly on the strength of the tennis pro's prowess. However, Gates wasn't a silent partner and managed to get some shots in. The head-scratching match-up was in the name of Match for Africa 4, a fundraiser for the Roger Federer Foundation. The event, which main draw was a friendly match between Federer and Isner sans their celebrity partners, raised $2 million towards educating children in Africa according to Tennis.com.
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cbf2a2868c515c6c8ef598c3014cc835 | https://www.cnbc.com/2017/05/01/fed-could-cut-its-balance-sheet-in-half-bernanke-says.html | Fed could cut its balance sheet in half, Bernanke says | Fed could cut its balance sheet in half, Bernanke says
VIDEO1:3401:34Ben Bernanke: Defending Fed's balance sheetSquawk Box
Former Federal Reserve Chairman Ben Bernanke says the central bank could reduce its $4.5 trillion balance sheet by as much as half.
"I think they're aiming for something in the vicinity of $2.3 to $2.8 trillion, something like that," he said Monday on CNBC's "Squawk Box."
Bernanke did not expect the Fed would return its balance sheet to precrisis levels of less than $1 trillion.
During the financial crisis, the monetary-policy setting Federal Open Market Committee bought a massive amount of assets and cut short-term interest rates to near zero in an effort to stimulate the economy.
Former Fed Chairman Ben Bernanke.Cameron Costa | CNBC
The central bank began moving back toward more normal policy in the last three years by halting new asset purchases and hiking rates three times. The Fed is expected to raise rates at least two more times this year, and March meeting minutes showed policymakers intend to cut the size of the balance sheet in 2017.
"They're going to want to maintain more bank reserves than before the crisis because they want run to monetary policy with a large amount of reserves," Bernanke said.
Total assets of the Federal Reserve
Source: Federal Reserve
In January, Bernanke said in a Brookings Institution blog post that the Fed should not reduce its balance sheet until "short-term interest rates are comfortably away from their effective lower bound" to prevent potential financial markets disruption.
The Fed holds a two-day meeting on Tuesday and Wednesday but is not expected to raise interest rates until at least June.
See what markets are doing here.
— CNBC's Jeff Cox contributed to this report.
VIDEO1:3401:34Ben Bernanke: Defending Fed's balance sheetSquawk Box
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dfbe09dd152a92f7790ef26c5af6409d | https://www.cnbc.com/2017/05/01/russias-military-buildup-in-arctic-has-u-s-watching-closely.html | Russia’s military buildup in Arctic has US watching closely | Russia’s military buildup in Arctic has US watching closely
VIDEO0:4300:43The US is closely watching Russia's military build-up in the Arctic News Videos
An RPG shell whistles towards its target, exploding in a ball of fire just as a group of soldiers in white fatigues, zip past on skis, bullets flying from their white rifles.
It was all part of a training exercise by Russia's newly formed 80th Motor Rifle Arctic Brigade, which was established two years ago as part of the Kremlin's bid for dominance in the Arctic. The soldiers are trained to operate in some of the least hospitable climates in the world — where temperatures can drop to -40 — using tanks, military hardware and even reindeer sleds to get around in the frozen terrain.
More from NBC News:
Deal on Government Funding Reached, Averting Shutdown
Trump on North Korea's Kim Jong Un: 'He's a Pretty Smart Cookie'
Pence: Tax Plan Could Increase Deficit 'Maybe in the Short Term'
NBC News was granted rare access to the Alakurtti base this week, along with several other foreign media organizations. Located near the border with Finland in the Murmansk region, the Soviet-era base was refurbished and formally opened in 2015.
Under President Vladimir Putin, Russia has launched the biggest military build-up in the Arctic since the fall of the USSR - bolstering its fleet of nuclear-fueled icebreakers, reopening abandoned Soviet military bases and building a string of new ones.
Russia isn't alone in its Arctic ambition. The United States, Russia, Canada, Denmark, Norway and Iceland all lay claim to the area and its abundant natural resources.
The U.S. Geological Survey estimates the Arctic may contain 13 percent of the world's undiscovered oil and 30 percent of its natural gas. And thanks to climate change, melting polar ice is expected to make drilling, mining and shipping even easier.
With billions of dollars in potential profits at stake, the race to control the region's riches is on.
Russia is trying to claim 460,000 square miles of the Arctic Ocean as its national territory — an area that includes the North Pole. Russian divers even planted a national flag on the North Pole seabed in a symbolic claim to the region's energy riches.
Washington is watching closely. Asked about Russia's military build-up in the Arctic at his confirmation hearing, U.S. Defense Secretary James Mattis said it was "not to our advantage to leave any part of the world" to others. American Marines have even been deployed to train for Arctic warfare in Norway.
In this photo taken on Tuesday, April 25, 2017, soldiers of the Arctic motorised rifle brigade of Russia's Northern Fleet took stand near APCs during military exercise in Alakyrtti, Murmansk region, Russia.Dmitry Kozlov | AP
Back at the Alakurtti base, soldiers demonstrated their hand-to-hand combat skills as journalists were herded from building to building, touring the canteen, the barracks and a brand-new medical facility.
Russia insists it isn't looking for a confrontation.
"The aim behind the creation of the brigade was to defend the interests and security of the Russian State in the Arctic," says Colonel Ilia Pavlovsky, Commander of 80th Motor Rifle Arctic Brigade.
But with tensions between Washington and Moscow at an all-time low, the Arctic could become the coldest front line in a new faceoff between Russia and the West.
Lucy Kafanov
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6b833fd5d41bd302f9ef644631ec84fd | https://www.cnbc.com/2017/05/01/treasury-secretary-mnuchin-it-will-probably-take-2-years-to-get-to-3-growth.html | Treasury Secretary Mnuchin: It will probably take 2 years to get to 3% growth | Treasury Secretary Mnuchin: It will probably take 2 years to get to 3% growth
Steve MnuchinMike Blake | Reuters
Treasury Secretary Steven Mnuchin said Monday that it will probably take two years to get to 3 percent growth.
"In our projections it will probably take two years to get up to three percent growth and then we can have a sustained level. That's what we're projecting," Mnuchin said. "Obviously the sooner we can pass taxes, the sooner we can get regulatory relief the better we're going to be."
"I think we can create what's incredible economic growth in this country," he said. The Treasury Secretary was speaking on stage in an interview with Maria Bartiromo of Fox Business News at the Milken Institute Global Conference in Los Angeles, California.
Earlier, former Fed Chair Ben Bernanke said on CNBC's "Squawk Box" that U.S. economic growth would not likely break above the 3 percent mark.
The U.S. economy grew in the first quarter at its slowest pace in three years, according to a government report Friday.
Mnuchin also said there are three components to improving economic growth: tax reform, regulatory relief, and fairer trade policies. "On my area we're all focusing on financial services regulation. I know there's a few people in this room who care a lot about that," he said. "You should all thank me for your bank stocks doing better."
The financial stocks are the best performer in the S&P 500 since the election, but have not recovered their pre-financial crisis highs. The has repeatedly hit record highs in the last few months.
for the latest on the markets.
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38f7ff55a0096a1a8144b4e3115295e1 | https://www.cnbc.com/2017/05/01/trump-repeats-that-hes-open-to-meeting-kim-jong-un-says-he-would-be-honored-to-do-it.html | Trump repeats that he's open to meeting Kim Jong Un, says he 'would be honored to do it' | Trump repeats that he's open to meeting Kim Jong Un, says he 'would be honored to do it'
North Korean leader Kim Jong Un visits Baekdu Mountain Architecture Research Institute in this undated picture provided by KCNA in Pyongyang on March 11, 2017.KCNA | Reuters
"Under the right circumstances," President Donald Trump said Monday he would be open to meeting North Korean leader Kim Jong Un.
"If it would be appropriate for me to meet with him, I would absolutely, I would be honored to do it," Trump said in a Bloomberg interview. "If it's under the, again, under the right circumstances. But I would do that."
Later Monday, White House spokesman Sean Spicer said that while the meeting could happen under the right circumstances, "those circumstances do not exist now." He added that there would have to be "significant change" for a meeting between Trump and Kim to be a possibility.
When a reporter pressed Spicer on why Trump would consider it an "honor" to meet with the North Korean leader, the press secretary said Kim is "still a head of state."
Spicer also said that Trump is "doing everything diplomatically, economically and militarily" to stave off the nuclear threat that North Korea poses to the United States.
The president's remarks come after North Korea conducted yet another failed missile test early Saturday, a move Trump said "disrespected the wishes of China."
@realDonaldTrump: North Korea disrespected the wishes of China & its highly respected President when it launched, though unsuccessfully, a missile today. Bad!
As a candidate, Trump had expressed similar willingness to meet the North Korean leader. In a CBS interview that aired Sunday, Trump called the North Korean dictator "a pretty smart cookie," repeating other compliments of Kim that he made on the campaign trail.
When asked about these remarks, Spicer said Kim "assumed power at a young age" and has fended off potential threats to his rule.
"He's obviously managed to lead the country forward despite the obvious concerns that we and so many other people have. He is a young person to be leading a country with nuclear weapons," Spicer said, adding that the president does recognize the threat North Korea presents.
Kim's uncle, Jang Song Thaek, was executed in 2013 after being declared a traitor. He had long been considered the isolated nation's second in command and mentor to Kim. But North Korea's state news agency turned on Jang, claiming that he sought to capitalize on the death of Kim Jong Il and challenge his son, Kim Jong Un, to claim power for himself.
Trump's positive comments of Kim stand in contrast to those made by other political leaders.
On Friday, Secretary of State Rex Tillerson urged the United Nations to take new sanctions against North Korea. A day earlier, Tillerson said North Korea's closest major ally, China, has pledged to impose unilateral sanctions should Pyongyang carry out another nuclear test.
House Majority Leader Rep. Kevin McCarthy said on Thursday that the chamber would hold a vote on sanctions this week, which he said would target North Korea's shipping industry and "those who employ North Korean slave labor abroad."
Read the full report on Bloomberg.
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04843d017c0c99cdb445a65301d38b9c | https://www.cnbc.com/2017/05/01/us-markets.html | Nasdaq closes at all-time high; bank shares rebound after Trump discusses breakup | Nasdaq closes at all-time high; bank shares rebound after Trump discusses breakup
VIDEO0:4600:46Nasdaq closes at all-time high MondayNews Videos
U.S. equities closed mostly higher in choppy trade Monday, shaking off comments from President Donald Trump said about breaking up the big banks.
The Dow Jones industrial average traded 42.12 points lower after Trump made the remarks. The 30-stock index briefly erased those losses but closed about 25 points lower.
Trump said he is "looking at that right now," in an interview with Bloomberg News.
VIDEO4:1104:11May markets open with a modest boost upSquawk on the Street
"Talking about breaking up the big banks is not necessarily conducive to deregulation," said Art Hogan, chief market strategist at Wunderlich Securities. One of these things is not like the other."
Dow intraday chart
Source: FactSet
The S&P 500 gained 0.2 percent, with financials, information technology and real estate leading advancers. The Financial Select Sector SPDR Fund ETF (XLF) traded about 0.7 percent higher.
The SPDR S&P Bank ETF (KBE) fell sharply before rising 0.7 percent.
KBE intraday
Source: FactSet
"I think we're stuck between risk on and risk off," said Mike Bailey, director of research at FBB Capital Partners. "Investors aren't quite ready to go to the dark side of risk-off selling. They may not want to miss out on more potential earnings gains."
Several individual bank stocks, including Bank of America and Citgroup, whipsawed following Trump's remarks.
Bank stocks have been some of the best performers since Trump was elected in November. Investors piled into the group betting the Trump administration would loosen up certain regulations, including Dodd-Frank.
Bank of America and Citigroup
Source: FactSet
The Nasdaq hit record intraday and closing highs, rising 0.7 percent.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 10.1 after hitting its lowest level since 2007.
Investors also parsed through several economic data releases. The ISM manufacturing index slipped to 54.8 in April from 57.2 and came in below consensus. Also, construction spending in March from a record high.
The Commerce Department said consumer spending remained flat in March, while personal income rose less than expected.
Several key economic data will also be released this week, including monthly U.S. jobs report. The Federal Reserve's policymaking committee is also slated to meet this week, but they are largely expected to hold rates steady.
Market expectations for a rate hike on Wednesday are just 4.8 percent, according to the CME Group's FedWatch tool.
Traders on the floor of the New York Stock Exchange.Andrew Burton | Getty Images
"It's a busy week for macro news," said Peter Cardillo, chief market economist at First Standard Financial. "This week boils down to our reaction to the Fed and economic data."
Meanwhile, lawmakers reached a deal Sunday to keep the government funded for the next five months, aides to senior members of Congress told NBC News.
The full House and Senate must still approve the bipartisan pact, which would be the first major legislation to clear Congress since Trump became president on Jan. 20.
Prompt passage of the legislation is expected this week.
"It's one less thing the market has to worry about," said Mark Luschini, chief investment strategist at Janney Montgomery Scott. "Typically, we see some weakness in anticipation of a shutdown but what we've [also] seen with previous governments is that the market tends to bounce back quickly from them."
"The set-up is for the market to keep performing well with solid corporate and market fundamentals," he said.
Earnings season also continues this week, with Apple, Facebook, Tesla and BP all reporting.
This earnings season has been strong thus far, with more than 75 percent of companies beating profit estimates and about 70 percent topping sales forecasts as of Friday morning, according to data from The Earnings Scout.
John Butters, senior earnings analyst at FactSet, said in a Friday note that the number of companies topping profit and sales estimates in the first quarter was above the five-year average.
Major U.S. Indexes
The Dow Jones industrial average fell 27.05 points, or 0.13 percent, to close at 20,913.46, with Boeing leading decliners and Apple the top advancer.
The advanced 4.13 points, or 0.17 percent, to end at 2,388.33, with information technology leading five sectors higher and telecommunications lagging.
The Nasdaq gained 44 points, or 0.73 percent, to 6,091.60.
About four stocks advanced for every three decliners at the New York Stock Exchange, with an exchange volume of 753.89 million and a composite volume of 3.193 billion at the close.
—CNBC's Jeff Cox and Reuters contributed to this report.
On tap this week:
Tuesday
Earnings: Apple, Aetna, Archer-Daniels Midland, Merck, Pfizer, CVS Health, BP, MasterCard, Altria, ConocoPhillips, WebMD, Weight Watchers, FireEye , Devon Energy, Etsy, Gilead Sciences, Newfield Exploration, Anadarko Petroleum, Cummins, Coach, Mosaic, Allstate, Becton Dickinson, Eaton, Lumber Liquidators
April vehicle sales
Two-day Fed meeting begins
Wednesday
Earnings: Facebook, Time Warner, Volkswagen, AIG, Kraft Heinz, MetLife, Tesla Motors, Avis Budget, Tableau Software, Pioneer Natural Resources, Yamana Gold, Estee Lauder, Southern Co, Garmin, Sprint, Wellcare Health, Molson Coors Brewing, Humana, Cheesecake Factory, Fitbit, MetLife, Groupon
8:15 a.m. ADP payrolls
9:45 a.m. Services PMI
10:00 a.m. ISM non-manufacturing
2:00 p.m. Fed decision
Thursday
Earnings: A-B InBev, Occidental Petroleum, Royal Dutch Shell, Adidas, Kellogg, Viacom, Beazer Homes, AMC Networks, Siemens, Dunkin Brands, Chesapeake Energy, Marathon Oil, Allscripts Healthcare, El Pollo Loco, Shake Shack, PerkinElmer, Zynga, Zillow, Wageworks, DeVry Education, CBS, Activision Blizzard, Herbalife
8:30 a.m. Jobless claims
8:30 a.m. Trade deficit
8:30 a.m. Productivity
8:30 a.m. Unit labor costs
10:00 a.m. Factory orders
Friday
Earnings: TransCanada, Cognizant Tech, Moody's, Cigna, CenterPoint
8:30 a.m. Nonfarm payrolls
3:00 p.m. Consumer credit
11:30 Fed Vice Chairman Stanley Fischer at Hoover Institution Monetary Policy Conference
12:45 a.m. San Francisco Fed President John Williams
1:30 p.m. Chicago Fed President Charles Evans, Boston Fed President Eric Rosengren, St. Louis Fed President James Bullard on panel at Hoover Institution
1:30 p.m. Fed Chair Janet Yellen in webcast from Brown University at event on 125 Years of Women at Brown
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b5c04c3759ce0cd52f8f6a4f2c9eeed0 | https://www.cnbc.com/2017/05/01/why-people-keep-buying-apple-products.html | Here’s why people keep buying Apple products | Here’s why people keep buying Apple products
VIDEO3:5203:52Walter Isaacson: Apple needs to innovate with a big new productSquawk Alley
There's one big reason people buy Apple products: the ecosystem.
People don't buy iPhones by the tens of millions just because they like the hardware, though that's a huge part of it, but because they're tied into an ever-growing, sprawling ecosystem of software and services that allow you to do more with the products if you continue to invest in that ecosystem.
Let me explain.
When Apple introduced the iPhone in 2007, iPod users who were already using iTunes saw something familiar and much more consumer-friendly than BlackBerry, Windows Mobile and Palm devices offered at the time. iTunes was the seed of an ecosystem that, in the past ten years, has grown into a towering elm.
The App Store launched in 2008. After that, when people bought apps and games they were also continuing to buy into Apple. As they shelled out $0.99 here and $1.99 there for new software that only ran on their Apple devices, they were digging deeper into Apple's offering and further away from BlackBerry and a new operating system that was on the horizon: Android.
Apple continued to build out this ecosystem by changing the way its products interacted with one another. Apple added the ability to use iMessage and FaceTime from an iPad, for example, allowing you to carry on your iPhone conversations on a tablet. Then it introduced a similar feature to Macs, also adding in support for full phone calls. The more Apple devices you used, the better they worked together.
Siri launched on iPhone and iPad and eventually on Mac and Apple TV and even the Apple Watch. It became a familiar voice to answer your questions, no matter where you were.
Apple TV grew from what Apple CEO Tim Cook once referred to as a "hobby" to a real home streaming device with its own app store. And if you have an iPhone or iPad, all of your pictures through Apple's Photos app are available across devices, even on the TV in your living room.
Home, an app in iOS, lets you control light bulbs, window shades, door locks and more, so long as they're build using Apple's HomeKit set of developer tools. As consumers buy these products, they're making a decision to stick with Apple.
Customers are more likely to know about them, too, because Apple has a huge retail presence.
Walk into an Apple Store and trained employees will show you exactly how to use any of the Apple products you own. Or browse the shelves and purchase any number of products that'll work seamlessly with your iPhone or iPad.
The Apple Store is also the company's support hub, where you can go in with any questions, damaged products and more for assistance. If you have AppleCare+, the company's premium warranty plan, it often costs very little to repair your expensive Apple products, sometimes in the same day.
Apple's competitors are trying to do something similar. But they're going about it in a much more chaotic way that will confuse most consumers, who don't spend their lives following the ins and outs of the tech industry.
Google is making parallel moves to integrate products like the Google Home, the Pixel smartphone, the Chromecast smart TV and more, and that's a step in the right direction.
But Google relies mostly on partners to build and maintain its ecosystem of products, and that can be incredibly confusing.
How does the owner of an LG Android smartphone know what smart home products it works with? If that same customer buys an Android TV box built by NVIDIA and a smartwatch made by Huawei, who do they go to for support? (Answer: NVIDIA and Huawei, not Google.)
Samsung is getting better at creating an ecosystem like Apple's. It sells smartphones, tablets, TVs, wearables, and laptops in the U.S., and it has apps such as SideSync that allow you to interact with your smartphone from a Samsung tablet or laptop. It has services like Samsung Pay, which is arguably better than Apple Pay because it's accepted in more locations.
Samsung also owns SmartThings, a smart home technology company that it acquired in 2014 for $200 million. SmartThings is more open than Apple HomeKit, allowing it to support Android and iOS smartphones and a large variety of smart home products ranging from power outlets to door locks and cameras.
The difference between SmartThings and Apple Home is that people have heard of Apple Home — you can hardly miss the yellow icon staring at your from your new iPhone — and can manage it easily through a single app on their smartphone. But SmartThings can be controlled by any number of apps and gadgets, including Google Assistant and the Amazon Echo. While it's versatile, it's also a lot more for a consumer to digest, and a lot harder for a consumer to get started. There's no glaring yellow app begging you to dive in on your new smartphone.
Todd Haselton | CNBC
Samsung doesn't have an big app store. Samsung doesn't have a place to buy music, movies and TV shows. And Samsung doesn't provide as seamless an experience across all of its products (though it's becoming better at it with apps like Samsung Connect, which provide a one-stop destination for viewing and interacting with your Samsung gadgets.)
Nor do Samsung or Google have hundreds of high-profile stores around the world. Instead, they rely on small flagship viewing-only locations, pop-up events or dedicated corners in Best Buy, as places to better understand the products.
This doesn't help. As product ecosystems become more powerful, consumers need a single easy place to go to learn more about how they can be used.
Consumers also need a place to go for support. If you break your Samsung smartphone, you're going to be on the phone with your smartphone insurance provider -- if you bought insurance at all. If you have an iPhone, just walk into an Apple Store. Apple may charge you a premium depending on your warranty status, but you'll have some sort of solution from the company you bought your phone from. That's a big deal.
Competitors may be able to build a better smartphone, or better laptop, or better augmented reality device than Apple. But Apple has a years-long head start in building an ecosystem of products that leverage each other's strengths. That's why its services business now is almost the size of a Fortune 100 company alone. That will take a long time for any competitor to equal.
And that's why people will keep buying Apple products.
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1ce6727c625312680f5d70fe732d3ffd | https://www.cnbc.com/2017/05/02/macron-victory-start-of-political-upheaval-for-france.html | Macron victory could mark the start of political upheaval for France | Macron victory could mark the start of political upheaval for France
Owen Franken | Getty
France's political course is likely to remain far from certain even with a win for presumed victor Emmanuel Macron, as his inability to form a parliamentary majority threatens to undermine his authority both domestically and across Europe, political analysts have suggested.
Sunday's second round runoff will mark the start of a period of tension for the country as the successful candidate waits to see if they can garner a large enough parliamentary majority in June's legislative election to enact change, Dominique Reynié, professor of political science at the Sciences Po institute in Paris, told CNBC Tuesday.
"I'm not worried about Macron's ability to win, but the question surrounds what kind of turnout he will achieve and what his ability to gain a majority in the June election will be," explained Reynié.
Polls are currently pitching centrist Macron to gain anywhere from a 59 percent to a 64 percent lead on his far-right opponent Marine Le Pen.
However, this lead will do little to boost Macron's authority in government, Reynié suggests. The independent will have to gain significant support from other parties if he is to form a majority when France once again heads to the polls on June 11 and June 18 to elect the 577 members of its National Assembly.
"It will all depend on his margin of victory. A 55 to 45 percent win for Macron would be a disaster. Even 60 to 40 is not at all a triumph; a 20 percent margin would be very difficult.
"It would be a crisis. It is not normal and would be a problem both on the streets of France and for Europe," said Reynié.
In the first round of voting, Macron's En March!, or Onwards! party, achieved a majority in 240 constituencies versus Le Pen's 216. However, Reynié says this is simply not enough.
"The smaller Macron's majority the harder it will be for him to win the general election in June. He needs support; it is not possible to have power as President without support.
"This could cause parliament to be largely fragmented like in the first round, with discussions taking place in fractured groups. Macron will have to negotiate with MPs and will be fragile and unpopular."
Fellow presidential hopefuls Jean-Luc Melenchon obtained 67 seats, Francois Fillon 53 and Benoit Hamon zero. They would need to align themselves with Macron in order for his polices to receive approval.
While former opponent Fillon spoke out for his voters to back Macron in a bid to ward off rising support for Eurosceptic Le Pen, other candidates have been less willing to offer him their support.
In 2002, when Le Pen's father and the founder of the National Front, surprised voters by making it through to the second round, campaigners rallied to throw support behind his opponent Jacques Chirac.
"The context has changed," Marjorie Alexandre, confederal assistant at workers union Force Ouvriere, told CNBC Tuesday, the day after protestors took to the streets of France for traditional pre-election May Day protests.
"We are here to defend workers' particular rights; we are not here to defend the rights of the nation," she said, arguing that she would not encourage members to support Macron in order to stave off Le Pen.
Meanwhile, Le Pen showed a change of tact over the weekend when she teamed up with former rival right wing politician Nicolas Dupont-Aignan and softened her stance on one of her flagship policies, suggesting there would not be an imminent departure from the euro. The move comes as part of her efforts to widen her appeal, particularly among right-wing voters.
Le Pen told the Sud Ouest newspaper that "if everyone is agreed we could take a year or a year and a half to organise a co-ordinated return to national currencies," allaying fears of a sudden exit from currency union, which opponents said would massively hurt France's economy.
She also said that she would make Dupont-Aignan, who gained 4.7 percent in the first round of voting, her prime minister if elected.
VIDEO3:1503:15Le Pen victory could cause violent market reaction: ExpertSquawk Box Europe
"The point that she made on Friday, in her alliance with Monsieur Dupont-Aignan, is that you can push through economically protectionist policies without necessarily leaving the euro," Charles Lichfield, Europe associate at Eurasia Group, told CNBC Tuesday.
"She hasn't completely flip-flopped but she's moved it down the timeline a bit. I think it makes sense but I just think it's a bit too late to convince those right-wing voters and I think many will abstain if they can't vote for Macron."
The move could threaten to undermine Macron's chances of gaining undecided voters, and could further increase the anticipated high voter abstention levels. Already it is expected that the upcoming holiday weekend will impact voter turnout, hurting Macron most significantly.
"French people are less in favour of Europe than the euro, but now Le Pen has moved on this so it has become more difficult for voters to vote for Macron," explained Reynié.
"He's a sort of centrist but he's coming from the left of government so he's a difficult choice for right-wing voters.
The two are set to face each other Wednesday evening in their first head-to-head televised debate since the first round knockout.
The opponents attacked each other's records in May Day rallies Monday. Macron denounced Le Pen as a "danger for democracy" while Le Pen criticised Macron's establishment roots, calling him a "puppet of finance."
French voters will head to the polls on Sunday May 7.
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51aee7afbf96171f7615443ae89e3dc6 | https://www.cnbc.com/2017/05/02/the-city-of-philadelphia-just-gave-wells-fargo-its-walking-papers.html | The city of Philadelphia just gave Wells Fargo its walking papers | The city of Philadelphia just gave Wells Fargo its walking papers
Police officers direct pedestrians in Philadelphia.Mark Makela | Reuters
Efforts by Wells Fargo to move beyond its bogus accounts scandal have been set back by the loss of a big government contract.
The Philadelphia City Council voted Monday to change handlers of its $2 billion payroll account, according to published reports. Instead of continuing the arrangement with Wells, the city chose to hire Citizens Bank for the next fiscal year starting in July.
The move comes under the dark cloud that has enveloped Wells since the second-largest bank by assets in the U.S. agreed to pay $185 million in fines for opening some 2 million accounts for customers without their knowledge.
More than 5,000 Wells Fargo employees lost their jobs, and several top executives were sacked. The scandal emanated from aggressive cross-selling goals in which sales people were encouraged to enroll customers in as many programs as possible.
Philadelphia city officials said the decision to switch payroll providers was not related directly to the scandal, though it seemed to play at least some role.
"Time and time again their actions have revealed them to be the antithesis of corporate social responsibility," Councilwoman Cindy Bass said in a statement. "I want to thank my colleagues on the committee for doing the right thing and sending a message that we will not do business with companies that engage in unethical business practices."
VIDEO1:3901:39Wells Fargo CEO: Going to make sure we fix everything brokenPower Lunch
For its part, the bank said it understood the city's decision and said it will cooperate with the transition to Citizens.
"We are proud of the support that we have diligently and professionally provided to the city in a number of capacities as its operating bank for the past several years and our highly experienced and proven government banking, securities, and treasury management teams stand ready to continue delivering outstanding service to the City of Philadelphia," the bank said, according to a statement cited by the Philadelphia Business Journal.
Wells Fargo will remain a depository bank for the city.
Several other cities have stopped doing business with the bank.
The bank's public standing has suffered even as it has taken measures to correct its internal problems. The sales goals have been removed, several top executives have been forced to give back pay, and multiple other measures have been taken to ensure proper practices.
However, Wells' directors faced withering criticism during a shareholder meeting last week, and public perception continues to wane.
A recent survey by Morning Consult showed Wells Fargo second-to-last in terms of overall impressions among banks, ahead of only Goldman Sachs.
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87460dedfab6027c3520ba40299a6280 | https://www.cnbc.com/2017/05/02/trump-administration-set-to-replace-top-banking-regulator-thomas-curry-wsj.html | Trump administration set to replace top banking regulator Thomas Curry: WSJ | Trump administration set to replace top banking regulator Thomas Curry: WSJ
Thomas CurryGetty Images
The Trump administration plans to replace Comptroller of the Currency Thomas Curry as chief overseer of federally chartered banks, the Wall Street Journal reported on Monday.
The change, which could happen as soon as this week, could lead to President Donald Trump replacing Curry with an acting head of the agency, WSJ reported, citing people familiar with the matter.
The Office of the Comptroller of the Currency (OCC), which oversees the federal banking system, administers hundreds of bank supervisors stationed inside large U.S. financial firms.
Curry, appointed by the Obama administration for a five-year term that expired in April, could remain in the role until a new appointment is made.
President Trump is considering Joseph Otting, a former banker at OneWest Bank who worked with Treasury Secretary Steven Mnuchin, to take on the responsibility of this office and replace Curry, the paper said.
Keith Noreika, a banking lawyer at Simpson Thacher & Bartlett, is being considered as acting comptroller, WSJ said. Noreika was part of Trump's transition team for Treasury. He also advised Treasury on its $250 billion Troubled Asset Relief Program, or TARP, in 2008.
The White House and OCC were not immediately available for comment.
Noreika did not immediately respond to an email seeking comment.
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a8981993ca65739e0cee28f12143f104 | https://www.cnbc.com/2017/05/02/uber-drivers-in-norway-fear-losing-license-or-car.html | Uber drivers in Norway fear losing their license, or even their car | Uber drivers in Norway fear losing their license, or even their car
Electric cars crowd the bus lane during the morning rush hour towards Oslo.Pierre-Henry Deshayes | AFP | Getty Images
There's no shortage of Uber cars on the road in Oslo, Norway's capital city, but the region remains highly contested in the ongoing fight between between traditional taxi companies and the burgeoning ride-sharing industry.
Police, helped by the local association representing taxi companies, have cracked down in recent months on unlicensed drivers working for Uber's POP service, the company's most affordable option for riders.
To evade detection, drivers often ask for the rider to sit in the front, as I discovered during my trip to Oslo this week.
"The taxi companies represent a big monopoly in Norway," says Christin Staubo, a local resident who works in the tech industry in Oslo.
The UberPOP service is widely used in Oslo, and incorporates surge pricing during busy hours. Staubo said that Uber prices have increased in the past 9 months to become more comparable to the taxi companies.
Despite the prevalence of cars on the road, Uber drivers expressed fears to me that they would lose their license or even their car, if they get caught.
In 2015, local prosecutors interviewed by the Norwegian business newspaper Dagens Næringsliv warned that Uber drivers should "not feel secure," despite Uber's communication team stressing that it's drivers operated within the framework that current laws allow.
Uber has struggled to roll out in the Nordics, as Norway, Sweden and Finland have all put up legal barriers to stop the service. In Denmark, Uber shut down its operation following the introduction of new taxi laws.
The embattled company is awaiting a decision from the European Union on whether it should be considered a transportation company or merely software.
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b437d5196d51aa2a3a9ebe25048f1909 | https://www.cnbc.com/2017/05/03/apple-earnings-china-sales-tim-cook-enthusiastic.html | Apple may have 'hit a ceiling' in China as sales fall 14%, but CEO Tim Cook is still 'enthusiastic' | Apple may have 'hit a ceiling' in China as sales fall 14%, but CEO Tim Cook is still 'enthusiastic'
VIDEO0:4700:47Tim Cook is still 'enthusiastic' about China, despite Apple's lagging sales thereNews Videos
Apple reported another quarter of declining revenues in China but CEO Tim Cook said he remained "very enthusiastic" about the opportunity in the world's largest smartphone market, with analysts suggesting the upcoming iPhones could return the company to growth.
The U.S. technology giant reported fiscal second quarter earnings on Tuesday that beat expectations, but its sales figures showed it sold fewer iPhones than the market had expected, and revenues also missed Street estimates.
One area weighing on revenues was China sales, which fell 14 percent from last year to $10.7 billion in Apple's March quarter. On a quarterly basis, China revenues fell 34 percent. Worryingly, the annual dip came despite Apple reporting a 26 percent decline in the fiscal second quarter of 2016, meaning there was an easier comparable.
Still, Cook said that the company had total store revenues in China up 27 percent over the last year, while comparable store revenue rose 7 percent. He pointed to an improvement in the last two fiscal quarters of 2016.
VIDEO2:3802:38This analyst says Apple already has "a lot of innovation" Squawk Box Asia
"First half (2017) revenue was down 13 percent year over year, about a third which was attributable to FX (foreign exchange). That's in contrast to a 32 percent revenue decline in the second half of last year," Cook said on an earnings call on Tuesday.
"Our March quarter results were in line with our expectations and similar to the year-over-year performance we experienced in the December quarter. We continue to be very enthusiastic about our opportunity in China."
China revenues declined 12 percent in the December quarter.
Apple has 'hit a ceiling'
But the company has struggled to sustain momentum in China, often seeing a spike in the first quarter of its fiscal year when the full force of its new iPhones is felt. Sales were up on a quarter-on-quarter basis in the fiscal first quarter of 2016 and 2017. But from the March quarter of 2016, Apple has experienced five quarters of year-on-year declines in China revenues.
The problem for Apple is the challenge it faces from Chinese upstarts such as Oppo and Vivo, which are known for making high-spec devices at lower prices, selling them via a network of physical stores across the country. Last year, Oppo saw 122.2 percent year-on-year growth of smartphones in China, with its market share more than doubling to 16.8 percent, IDC data show. Huawei has been making a push in the high-end phone space to challenge Apple and is the number two player in China with a 16.4 percent market share.
Meanwhile, Apple's market share fell to 9.6 percent in 2016 in China, from 13.6 percent the year before.
Apple CEO Tim Cook attends China Development Forum 2017 - Economic Summit at Diaoyutai State Guesthouse on March 18, 2017 in Beijing, China.VCG | Getty Images
There's concern that Apple won't see the growth in China that it experienced when it released the iPhone 6 Plus – it's first large screen device.
"China is roughly a 100 million shipment market per quarter, with the premium segment accounting for close to 25 percent of the market on average. Apple has hit a ceiling in terms of the total premium market it can capture," Neil Shah, research director of devices and ecosystems at Counterpoint Research, told CNBC by phone on Wednesday.
"Those who wanted an iPhone already have one, and the upgrade cycle for iPhone has extended in China. Previously they used to have strong sales in older generation iPhones, but that is not happening because in that segment, Oppo and Vivo are putting good handsets and taking away share from Apple."
China growth ahead?
But Apple is reportedly gearing up to launch three new iPhones later this year with one being a special anniversary edition boasting a souped-up camera and display. This could help it regain favor with Chinese consumers.
"Edge to edge screen technology which maximizes screen size for gaming, video and best suits Chinese language is in future products, and that will help Apple in China for sure," Neil Campling, head of global technology, media, telecom research at Northern Trust Capital Markets, told CNBC by phone on Wednesday.
"I do think Apple will return to growth in China, and that will come through most clearly I suspect in this March quarter next year."
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77bc555938011ffd68a051c7b8e0f398 | https://www.cnbc.com/2017/05/03/cowen-and-company-iphone-8-will-be-delayed.html | IPhone 8 could be delayed due to issues with fingerprint tech, says firm | IPhone 8 could be delayed due to issues with fingerprint tech, says firm
Apple CEO Tim CookJustin Sullivan | Getty Images
If the iPhone 8 is delayed, blame production issues with the fingerprint reader, said one Wall Street firm.
In a note to investors Wednesday, Cowen and Company said fingerprint reader production issues are to blame for the iPhone 8's delay, which has been reported by Apple watchers.
Many observers had been expecting Apple to launch the iPhone 8 in September, along with updates to the iPhone 7s and iPhone 7s Plus.
KGI Securities' Ming-Chi Kuo said in April that the iPhone 8 may not launch until October or November, while Drexel Hamilton's Brian White also pointed to delays.
Cowen said Apple and its partners are struggling to cram the fingerprint reader under the new glass panels expected on the iPhone 8.
"Fingerprint yield issues remain unresolved (integrating the fingerprint under glass creates a much higher yield hurdle because the entire display must be scrapped rather than just the fingerprint module)," Cowen said. "While still possible, Apple will have to put the fingerprint on the back [of the phone.] It appears likely that Apple will slightly delay contract manufacturing assembly timelines by 4-6 weeks to buy more time to fix the issues and make a final decision."
In other words, Apple may be able to avoid the issue altogether and skirt a delay by simply moving the Touch ID fingerprint reader to the back of the smartphone. This isn't unheard of; Android manufacturers often place the fingerprint reader on the back — the Google Pixel being one example.
Kuo and White also pointed to delays related to the iPhone 8's display. White also believes that expected 3-D sensing technology is causing a holdup.
Correction: This story was revised to correct that KGI Securities' Ming-Chi Kuo said the iPhone 8 may not launch until October or November.
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12ea1bce3aea12520b2dbbe8804457a9 | https://www.cnbc.com/2017/05/03/facebook-earnings-q1-2017.html | Facebook shares dip despite better-than-expected earnings | Facebook shares dip despite better-than-expected earnings
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VIDEO1:4201:42Facebook daily active users up 18% year-over-yearClosing Bell
Facebook smashed analysts' earnings estimates in the first quarter of the year, shaking off "fake news" controversy and posting revenue that topped estimates.
The company added 80 million monthly users in the first few months of the year, as ad revenue popped 51 percent from a year ago.
But shares dipped in after-hours trade, as investors digested a new format for the company's earnings report. Facebook said it is no longer reporting adjusted expenses, income, tax rate, and earnings per share that are not in line with generally accepted accounting principles.
"Given that stock is an important part of our compensation structure, we believe that investors should focus on our financial performance with stock-based compensation included," chief financial officer David Wehner told analysts on a conference call on Wednesday.
GAAP EPS: $1.04 per diluted share vs. 87 cents expected by a Thomson Reuters consensus estimateRevenue: $8.03 billion vs. $7.84 billion expected by a Thomson Reuters consensus estimateMonthly active users: 1.94 billion vs. 1.91 billion expected by StreetAccountDaily active users: 1.28 billion vs. 1.26 billion expected by StreetAccount
That's way up from first-quarter earnings of 60 cents per diluted share, by generally accepted accounting principles, on revenue of about $5.38 billion in the year-ago period.
Facebook CEO Mark Zuckerberg Justin Sullivan | Getty Images
Weeks after he laid out his vision for Facebook's "Act Two," in augmented reality, Wall Street is getting its chance to grill Mark Zuckerberg on Wednesday night.
"We had a good start to 2017," Zuckerberg said in a statement with Wednesday's earnings release. "We're continuing to build tools to support a strong global community."
The social media platform makes most of its money by connecting advertisers to its massive user base. It earned $7.86 billion in advertising revenue, up 51 percent from a year ago, and higher than the $7.68 billion expected by a StreetAccount estimate. Average revenue per user was $4.23, higher than the $4.17 expected by StreetAccount.
Daily watch time of live video has quadrupled since last year, Zuckerberg told analysts on a conference call on Wednesday.
But the hot streak may not last much longer, if warnings from prior quarters are any indication.
Increasing ad load — the number of ads on the website — has been one of three main factors of Facebook's growth, along with user growth and increasing time spent on the platform, Wehner said in November. But ad load could "come down meaningfully" after mid-2017, Wehner said at that time.
And accusations of promoting fake news and extreme videos have weighed on the company.
Zuckerberg vowed on Wednesday ahead of earnings to hire thousands of workers over the next year to monitor sensitive content, after gruesome and violent acts have been streamed on Facebook Live.
Costs rose 40 percent to about $4.71 billion, up from just $3.37 billion a year ago, as headcount ballooned 38 percent from a year ago.
Facebook also has some prominent new competition from a year ago: Snap, which went public this spring. The company has unleashed a string of rival tools to compete with Snap's ad dollars.
New research released on Wednesday by App Annie shows that many Snap users — 35 percent — cannot be reached on Facebook on any given day. The figures are even higher — 46 percent and 58 percent, respectively — for Facebook's Instagram and Messenger.
Still, more Facebook users are accessing the site on mobile than last year. Eighty-five percent of ad revenue for the first quarter was mobile, up from 82 percent a year ago, Facebook said. Instagram stories also has 200 million daily active users, and WhatsApp Status has 175 million daily active users, Zuckerberg said.
Then there's Oculus, Facebook's virtual reality company that has shuffled its key workers amid scandals. Co-founder Palmer Luckey has left the company, and Oculus is on the hook for $500 million after losing a key lawsuit.
It's also been a year since Facebook unveiled an unusual new share structure, which would potentially allow Facebook CEO Mark Zuckerberg to sell some of his shares while still maintaining control of the company.
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1dbaf1476bf5c10f396923a056ed425f | https://www.cnbc.com/2017/05/03/first-hyperloop-route-could-be-ready-by-2020.html | Passengers can ride the hyperloop by 2020, says HTT CEO | Passengers can ride the hyperloop by 2020, says HTT CEO
Commuters can ride the hyperloop, a futuristic, super-fast transportation system, as early as 2020 and the United Arab Emirates could be the first market for it, according to the chief of one of the companies involved in developing the technology.
Dirk Ahlborn, CEO of Hyperloop Transportation Technologies (HTT), told CNBC on the sidelines of the Innovfest Unbound conference in Singapore that the company put the first hyperloop capsule into production three weeks ago.
Hyperloop Transportation Technologies CEO Dirk Ahlborn.Sergei Fadeichev | TASS | Getty Images
It will take about a year to produce, after which it will head to the company's R&D center in Toulouse for integration optimization and then it'll head to the first commercial track, where construction will start later this year.
"We will be announcing one of the first commercial routes probably in between the next three to six months," Ahlborn said.
A hyperloop would work by propelling pods through a large tube at speeds of 750 mph using magnets, and is seen as a solution to long distance travel and also means of alleviating congestion. Other startups working on this technology include HTT rival Hyperloop One.
HTT has plans to build a hyperloop track in Quay Valley, California, where the company is doing an environmental study. It has also been exploring feasibility of building in countries from Indonesia to the Czech Republic. But Ahlborn said the first track will unlikely be in Quay Valley.
"(It) is a commercial project that makes sense when the city is there. Until they start construction, it doesn't make sense for us to start there," Ahlborn said, adding it made more sense for HTT, which is largely privately backed, to focus efforts in markets where "governments actually pay us."
That's where the United Arab Emirates (UAE) could potentially have the first operational hyperloop track. Last year, Abu Dhabi's Department of Municipal Affairs and Transport signed the UAE's second hyperloop feasibility study with HTT.
"The Emirates are very pushy," Ahlborn said. "They want to see (the hyperloop) happen and ideally they want to see it happen in the Emirates first."
VIDEO1:4201:42Rail, metros don't make economic sense: HTT CEO Shaping the future
Ahlborn said HTT was also exploring opportunities in India and China. Local reports in February said HTT was in talks with five Indian states to build hyperloop tracks and was looking to raise $100 million to invest in India.
Strategically, countries like India and Indonesia are key markets to conquer because their vast consumer base and growing economies can offer companies like HTT, which works with transportation companies and licenses its technology, the ability to scale up.
Pricing a hyperloop ticket can be tricky in these markets — if it's too expensive, it could become unaffordable to a large user base. Yet, for a new technology like this, building the infrastructure and the ecosystem would present high fixed costs initially.
But Ahlborn said there were many funds and investors looking into financing the infrastructure.
"Ideally, we would like it to be free (for the passenger). I don't believe that a ticket is the right way to make money on transportation," Ahlborn said, adding there could be other ways to monetize the technology.
— CNBC's Arjun Kharpal contributed to this report.
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e9f9ce7203a54d72fb2f98eac79791fc | https://www.cnbc.com/2017/05/03/marine-le-pen-floats-idea-of-capital-controls-if-she-wins-presidency.html | Marine Le Pen has a plan in case she wins and France starts bleeding money | Marine Le Pen has a plan in case she wins and France starts bleeding money
Marine Le Pen, French National Front (FN) candidate for 2017 presidential election, speaks during an interview with Reuters in Paris, France, May 2, 2017.Charles Platiau | Reuters
Marine Le Pen, the far-right French presidential candidate, told Reuters on Tuesday that she could use capital controls if she wins the presidential election and triggers a flight of money out of the country.
Capital controls allow a government to limit the flow of money into or out of a country. There are worries that France could get hit by capital flight if it negotiates to bolt from the European Union, as Le Pen has promised to do.
"I found her comments strange because, by saying that, she essentially admitted her policies would cause that kind of turmoil," said Charles Lichfield, Europe associate at Eurasia Group.
Le Pen has been a staunch proponent of taking France out of the European Union and out of the euro currency. She told Reuters she would replace it with something similar to the European Currency Unit, a basket of currencies that preceded the euro. That would exist alongside a national currency.
VIDEO2:2102:21Less than a week to go: Le Pen vs. Macron Squawk Box Europe
Capital markets breathed a sigh of relief after the first round of the French presidential election on April 23, when Le Pen and centrist Emmanuel Macron advanced to Sunday's runoff vote. The euro shot up to a 5-1/2-month high, while a rally in European equities spilled over into U.S. trading.
Macron, contrary to Le Pen, is in favor of keeping France in the EU and is expected to win the runoff by a wide margin, according to recent polls.
That said, the polling industry has been a terrible predictor of a number of global events, most noticeably the U.S. election and the United Kingdom's own referendum to leave the EU.
If Le Pen were to somehow win, "capital controls would be a must," said Andrea Montanino, director of the global business and economics program at the Atlantic Council.
"If you don't have capital controls, you will have a massive outflow" of cash out of France, he said. "And, if the banks lose liquidity, they could fail."
Le Pen made her comments on capital controls as she is scrambling to broaden her appeal beyond the base that voted for her in the first round of the election. France holds two rounds in its presidential races.
This week, Le Pen held a major rally in the Paris suburb of Villepinte, hoping to broaden her appeal. While she has gained ground, she has not managed to significantly narrow the gap with Macron in the polls.
Macron is seen winning on Sunday with 60 percent of the vote, according to Opinionway, a French polling firm. That said, Le Pen might have one more chance to make it a close race.
"The next test will be tonight at the televised presidential debate, in which Macron has a lot more to lose," said Eurasia Group's Lichfield.
The debate will be held Wednesday afternoon ET.
Watch: What could the French election mean for the markets?
VIDEO1:2001:20What could the French election mean for the markets?Worldwide Exchange
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2f2b3dab52073222f3eab5fbfcbe7c1e | https://www.cnbc.com/2017/05/03/oil-eases-near-weakest-since-late-march-on-small-u-s-stocks-decline.html | US crude plunges 4.8% to $45.52, posting worst close in more than five months | US crude plunges 4.8% to $45.52, posting worst close in more than five months
VIDEO5:1705:17Oil prices plunge to five-month lowsHalftime Report
Oil prices collapsed on Thursday to their lowest since late November as investor worries about the world's stubbornly persistent glut of crude erased most of the gains that followed last year's OPEC's output cut.
The slide worsened after OPEC delegates downplayed the chance that their group and other producing countries would deepen their output cuts when they meet on May 25. They did say current output cuts were likely to be extended.
U.S. West Texas Intermediate (WTI) crude futures ended trading down $2.30, or 4.8 percent, at $45.52 a barrel. Brent crude oil futures were down $2.53, or 5 percent, at $48.26 a barrel by 2:53 p.m. (1853 GMT).
Both contracts slid during the session to the lowest since Nov. 30, the day OPEC agreed to cut supply. They were on track for their biggest daily percentage declines March 8.
A laborer works at the Nahr Bin Umar oil field, southeast of Baghdad, Iraq.Essam Al-Sudani | Reuters
"The market continues to hunt for a bottom," said Gene McGillian, manager of market research at Tradition Energy in Stamford, Connecticut.
Late last year, the Organization of the Petroleum Exporting Countries and other producing countries announced oil output cuts of 1.8 million barrels per day (bpd) for the first six months of this year.
Even so, McGillian said, "We still have a near record overhang and signs of increasing production in areas of the world outside the producers that agreed to the cuts."
Crude output has surged in the United States, with increasing rig counts for the past 11 months.
Weekly U.S. government data on Wednesday showed crude stocks fell 930,000 barrels, less than half the 2.3 million barrel drop analysts had expected. Stocks stand just 7 million barrels off a record high.
U.S. gasoline futures were down nearly 4 percent after the stockpile report indicated continued weakness in gas demand. They are have fallen more than 8 percent this year.
OPEC oil output fell for a fourth straight month in April, a Reuters survey found on Tuesday, as top exporter Saudi Arabia kept production below its target, which helped offset weaker compliance by other members.
VIDEO2:3002:30Don’t expect oil price to move much higher in coming months: ProSquawk Box Europe
"Saudi Arabia is the only country that has fulfilled its obligation every month since January. On one hand, it shows its commitment from OPEC's kingpin to make the supply cut agreement work. On the other hand, one can only ponder how long they are willing to shoulder the burden of supporting oil prices on their own," PVM Oil Associates analyst Tamas Varga said.
Russia, which has contributed the largest production cut outside OPEC, said as of May 1, it had cut output by more than 300,000 bpd since hitting peak production in October.
Russia's Energy Minister, Alexander Novak, said in written comments his country is inclined to extend its output cuts. But many in the market believe steeper cuts are needed to reduce the glut significantly.
"At some point, the market should recognize OPEC isn't the most important player in the market any more," said Commerzbank's Eugen Weinberg, "That is non-OPEC, and, above all, U.S. shale."
U.S. energy company shares fell along with crude on Thursday. Chevron was down 2 percent, Exxon Mobil was down 1.3 percent and EOG Resources was down 3.8 percent.
— CNBC's Tom DiChristopher contributed to this report.
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69c4288a0f70753147bcdd0f5fa674ed | https://www.cnbc.com/2017/05/03/strong-demand-at-taco-bell-drives-yum-brands-profit-beat.html | Strong demand at Taco Bell drives Yum Brands' profit beat | Strong demand at Taco Bell drives Yum Brands' profit beat
Beer and twisted Freezes are sold along with Mexican-inspired food at a Taco Bell Cantina restaurant on September 22, 2015 in Chicago, Illinois.Getty Images
Yum Brands reported a better-than-expected quarterly profit due to strong global same-store sales growth, driven by robust demand at its Taco Bell restaurants and lower costs at its KFC chain.
Shares of the company were up 3 percent at $68.40 before the bell on Wednesday.
Sales rose 8 percent at Taco Bell restaurants open for more than a year, topping the 3.7 percent growth expected by analysts polled by research firm Consensus Metrix.
Taco Bell performed well in the quarter by avoiding over discounting and through the successful launch of the Naked Chicken Chalupa, a taco with a shell made of chicken, Morningstar analysts wrote in a pre-earnings note.
While KFC's same-store sales growth of 2 percent missed analysts' estimates, its operating profit jumped 12 percent on lower costs and as it sold more restaurants to franchisees.
Pizza Hut continued to struggle, reporting a 3 percent drop in same-store sales, its third straight quarterly decline, even as rival Domino's Pizza Inc last week reported domestic growth of 10.2 percent.
Yum Brands' income from continuing operations rose to $280 million, or 77 cents per share, in the first quarter ended March 31, from $226 million, or 54 cents per share.
Excluding items, the company earned 65 cents per share, beating the average analyst estimate of 60 cents per share, according to Thomson Reuters I/B/E/S.
Total revenue fell 1.8 percent to $1.42 billion as it sold more restaurants to franchisees but managed to beat Street expectations of $1.35 billion.
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709f3a3c139dcf4b6df9934fa06a2c53 | https://www.cnbc.com/2017/05/04/barclays-sign-eight-fintech-start-ups-and-spinoff-intrapreneur.html | Barclays sign eight FinTech start-ups and spinoff ‘intrapreneur’ | Barclays sign eight FinTech start-ups and spinoff ‘intrapreneur’
Luke MacGregor | Bloomberg | Getty Images
Barclays, Britain's second biggest bank, has given formal engagements to eight of the 11 financial technology (FinTech) start-up companies that pitched yesterday at its Rise event in London, U.K., after graduating from their 13-week business Accelerator program run jointly with Techstars.
The Demo Day was held at the new Rise London offices the lender has just opened, which it claims is the biggest FinTech center in Europe. It houses 40 FinTech start-ups and the lender's in-house banking technology teams.
One of the eight firms, Nivo, is an 'intrapreneur' internal team that is being spun out from the bank as a separate secure mobile messaging company. It will run a pilot scheme with Barclays' Premier banking unit in the forthcoming months and is focused on improving customer service.
The Accelerator graduates pitched to a collection of 250 investors, technologists and bankers at the Demo Day in London yesterday after winning their places on the program earlier in the year.
Other start-ups to secure deals with Barclays, included:
Simudyne: who will work with the bank's risk team on scenario planning and other strategic end uses.Barac: will work with Barclays' UK and International divisions, using its real-time analytics on predictive anti-fraud and computer outage tasks.Flux: will run a pilot of its technology with over 10,000 Barclays UK and Barclaycard customers, providing in-app digital receipts.Alyne: the operational risk firm will help the bank improve its control functions and react to new regulations and compliance demands more effectively.
The other three FinTech start-ups that will work with the bank are Shieldpay, Courtsdesk and Homeppl.
Commenting on the Demo Day in a subsequent press release, Michael Harte, Barclays Group head of innovation, said: "Financial services is experiencing a period of major technological disruption. Rise, and specifically our Accelerator, has created a platform for experimentation, with new generation businesses and entrepreneurs, to build new products, services and platforms."
Applications are now open for the next accelerator event in New York and the Tel Aviv program is already underway. Companies in Israel are presently receiving business, marketing, technology and other forms of assistance to get them ready for the imminent Demo Day there and to make them viable businesses. Other programs in the global Accelerator series are based in Mumbai, Cape Town, Manchester, and Vilnius.
Barclays' Accelerator program is run by Techstars, a global network that exists to help entrepreneurs succeed across various different sectors. The bank sponsors its FinTech program and helps run it.
According to Chris Adelsbach, managing director of Techstars, this latest class in London joins 1,024 other companies in the Techstars Accelerator portfolio that together have a market cap of $8 billion. The Techstars network has 14,000 founders, mentors, investors, and corporate partners in it and spans 168 countries.
"The Barclays Accelerator, powered by Techstars, once again showed why our program in London is the pre-eminent FinTech accelerator in the world," said Adelsbach in a press release on Wednesday.
"FinTech is an exciting vertical for us," he added. "These companies are using technology to solve large real-world problems that impact so many of us. I'm excited by their prospects and look forward to supporting them on their journey."
Follow CNBC International on Twitter and Facebook.
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d4daf86157f0497c572b1077181ce392 | https://www.cnbc.com/2017/05/04/gop-congressman-i-dont-think-any-individual-has-read-health-bill.html | GOP congressman on Obamacare replacement: 'I don't think any individual has read the whole bill' | GOP congressman on Obamacare replacement: 'I don't think any individual has read the whole bill'
Speaker Paul Ryan, R-Wis., conducts a news conference with members the GOP caucus in the Capitol Visitor Center to announce a new amendment to the health care bill to repeal and replace the ACA, April 6, 2017.Tom Williams | CQ Roll Call | Getty Images
Hours before a scheduled vote on a Republican bill that would repeal and replace major parts of Obamacare, a GOP congressman suggested that neither he — nor anyone else — has actually read the entire bill.
But Rep. Thomas Garrett of Virginia said his "staff" had read all of the parts of the bill — which he plans to vote for.
"Oh, gosh," Garrett said on MSNBC on Thursday morning when asked if he has read the entire text of the GOP's American Health Care Act.
"Let's put it this way: People in my office have read all parts of the bill."
"I don't think any individual has read the whole bill," Garrett said. "That's why we have staff."
Republicans for years have accused Democrats of ramming through Obamacare legislation, known as the Affordable Care Act, through Congress without lawmakers having a full grasp of the implications of that law.
They and other Obamacare foes have repeatedly pointed to a statement that then-House Speaker Nancy Pelosi, D-Calif., said about the ACA in 2010.
"We have to pass the bill so that you can find out what is in it — away from the fog of the controversy," Pelosi said.
Referring to the ACA in 2009, Rep. Paul Ryan, R-Wis., said: "I don't think we should pass bills that we haven't read that we don't know what they cost."
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But Ryan, who is now House speaker, and other GOP leaders on Wednesday night scheduled the vote Thursday without having in hand an analysis of their revised repeal bill by the Congressional Budget Office.
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The CBO at some point will project how much the bill will cost the federal government, how it will affect insurance premiums, and how many more people are likely to become uninsured as a result of it.
"I have said all along that it was sort of hypocrisy for us to lament passing a bill without finding out what's in it and then to do the same thing," Garrett said Thursday.
"But I think that was with the original [Republican] bill," Garrett said, referring to a prior version of the legislation, which was yanked from a planned vote in late March after GOP leaders saw it did not have enough votes to pass. He noted that the House had just 17 days to consider that first version.
"We now have [had] several months" to have consider the bill, Garrett said. "So that's how it's different from what happened in 2009."
Garrett said that lag has given analysts enough time to understand the implications of the bill.
The CBO's "score" of the original bill estimated that 24 million more Americans would become uninsured by 2026 than would be the case if Obamacare remained in place, and that individual premiums would be about 15 to 20 percent higher in the first two years of the bill becoming law.
Since the aborted vote in late March, Republicans have made a series of amendments to the bill, each of which would alter the CBO's original analysis of the legislation.
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c795245fecadefdb84f0a823e3039170 | https://www.cnbc.com/2017/05/04/gops-obamacare-replacement-bill-would-protect-just-5-percent-of-people-with-pre-existing-conditions-analysis.html?__source=newsletter%7Cyourmoneyyourvote | GOP's Obamacare replacement bill would protect just 5 percent of people with pre-existing conditions: Analysis | GOP's Obamacare replacement bill would protect just 5 percent of people with pre-existing conditions: Analysis
VIDEO4:1904:19Fmr. WH advisor: CBO score could be materially different for health-care vote outcomeSquawk Alley
The Republican bill to repeal and replace Obamacare does not allocate nearly enough money to protect people with pre-existing health conditions from potentially higher insurance premiums, an analysis finds.
The bill's $23 billion in funding specifically for such people would cover just 110,000 Americans, according to the Avalere Health study released Thursday.
That's only 5 percent of the 2.2 million current enrollees in the individual insurance market with some type of pre-existing chronic condition.
And even if states were to add in all the other money in the bill's $100 billion Patient and State Stability Fund, only a total of 600,000 people with pre-exisiting conditions could be covered, the study found.
Avalere said the gap between funding and need could leave many people with health problems unable to afford insurance coverage if the GOP's American Health Care Act becomes law.
"Texas alone has approximately 190,000 enrollees in its individual market with pre-existing chronic conditions, nearly 80,000 more people than the funds earmarked for the entire country would cover," Avalere said. "Florida has 205,000, nearly 95,000 more than the funds allotted nationally ... would cover."
The study was released hours before the House was expected to vote on the Republican bill. That vote was successful and the bill now will head to the Senate for consideration.
That bill would allow states to obtain waivers for insurers that would let those companies charge sicker people more money for coverage than healthier people if they let their insurance plans lapse, as long as the state creates a program to give those sicker people financial aid for their coverage.
To offset some of the cost of those higher charges, the bill also sets aside funding to subsidize coverage for people with pre-existing conditions through high-risk pools in individual states.
But Obamacare defenders have said that past efforts by states that ran high-risk pools for such people have failed to cover enough people, and did not have adequate funding.
Avalere's analysis suggests that history could repeat itself if the Republican bill becomes law.
"Given the amount of funding in the bill, the program can only afford a few small states to opt into medical underwriting," said Caroline Pearson, senior vice president at Avalere. Medical underwriting is the practice of determining health insurance rates based on an individual customer's health status.
"If any large states receive a waiver, many chronically ill individuals could be left without access to insurance," Pearson said.
Rep. Ileana Ros-Lehtinen, R-Fla., on Thursday blasted the bill being pushed by her own party, citing the effect on her constituents in the Sunshine State who have pre-existing conditions.
"Despite amendments and changes, the AHCA still fails to provide for the needs of my constituents," said Ros-Lehtinen, who is retiring, in a statement. "I will not support a bill that has the potential to severely harm the health and lives of people in South Florida and therefore I remain steadfast in my commitment to vote NO on the AHCA."
"The recent addition of further funds to high-risk pools continues to be inadequate and fails to cover those who need it most," she said. "If enacted, the older and poorer South Floridians will be worse off and will find it more difficult to obtain quality health care. My constituents should not have to take a step backward in their ability to obtain treatment for any illness and thus, I will vote NO."
Watch: GOP has the votes
VIDEO6:0606:06Rep. Mullin: GOP has votes to cross the floorPower Lunch
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2278684c5e3dc0b6c27e2daf12a8d4d4 | https://www.cnbc.com/2017/05/04/heres-how-many-jobs-apple-has-created-so-far.html | Apple's investing $1 billion to expand US jobs—here's how many it's created so far | Apple's investing $1 billion to expand US jobs—here's how many it's created so far
VIDEO12:0912:09Exclusive: Apple just promised to give US manufacturing a $1 billion boostMad Money with Jim Cramer
On Wednesday, Apple CEO Tim Cook announced plans for a $1 billion fund to expand advanced manufacturing jobs in the United States, but the company is no stranger to job creation.
Apple has already created 2 million jobs in the U.S., from engineers to app developers to suppliers, Cook told "Mad Money" host Jim Cramer. (Read the full interview here.)
Directly and indirectly, Apple has employed workers in all 50 states, boasting 80,000 company workers in areas like research and development, customer support, financial services and Apple's 271 U.S. stores.
U.S.-based suppliers such as Corning, which provides glass for the iPhone and iPad, and 3M, which Apple calls on for adhesive materials, credit the company for 450,000 jobs.
Additionally, 1,530,000 jobs can be attributed to what Apple calls "the App Store ecosystem," a network of designers and developers for the ever-growing roster of iPhone apps.
"These are folks from really small businesses, a party of one, to larger companies, and they're writing apps that change the world," Cook said Wednesday.
On its website, Apple cites a number of statistics, including a 1,500 percent increase in U.S. workers since 1998. The company also lists key investment projects in California, Texas, Arizona, North Carolina and Oregon to build new facilities and hire more employees.
"We actually spent over $50 billion last year in this country. I mean, this is incredible," Cook told Cramer. "We're not satisfied with just 2 million. And so you can bet we're going to be hiring thousands of employees in the future."
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73cc4322500166d4344ed0b96312cb6e | https://www.cnbc.com/2017/05/04/imagination-technologies-apple-supplier-dispute-resolution-procedure.html | After clash with Apple, key supplier Imagination Technologies says it has started a 'dispute resolution procedure' | After clash with Apple, key supplier Imagination Technologies says it has started a 'dispute resolution procedure'
Imagination Technologies, a key supplier of components for Apple products, said Thursday that it's beginning a "dispute resolution procedure" with the U.S. technology giant after the two clashed earlier this year.
The U.K. firm design graphics processing units (GPU), which are vital components in Apple products allowing high-quality images on its retina displays.
said that it's developing its own "independent graphics design" and will be "reducing its future reliance on Imagination's technology" over the next 15 to 24 months.
Regis Duvignau | Reuters
Shares of Imagination Technologies plunged after the announcement and are down over 61 percent year-to-date.
Imagination said it's been in discussions with Apple regarding its commercial relationship but "has been unable to make satisfactory progress with Apple to date regarding alternative commercial arrangements for the current licence and royalty agreement."
"Imagination has therefore commenced the dispute resolution procedure under the licence agreement with a view to reaching an agreement through a more structured process," the company said in a statement.
"Imagination has reserved all its rights in respect of Apple's unauthorized use of Imagination's confidential information and Imagination's intellectual property rights."
Shares of Imagination were trading marginally lower on Thursday morning.
Imagination said it was unable to give any more information about the logistics of the dispute resolution procedure when contacted by CNBC. Apple was not available for comment at the time of publication.
Analysts said that the messaging from Imagination shows that Apple is unlikely to buy the company — a path that was at one point potentially on the cards.
"A dispute resolution process has been initiated with Apple, which seemingly removes any optionality around alternative commercial arrangements being struck, or that Apple is playing some form of Machiavellian game for a price cut or to buy PowerVR at a knock-down price," Investec analyst Roger Phillips said in a note on Thursday.
"The comment over 'rights being reserved' suggests the allegation of patent infringement still hangs in the air. The problem for IMG is whether it has the time and resources to pursue this avenue; this may end up being optionality for an eventual buyer of the GPU business."
PowerVR is Imagination's core graphics processing technology.
Apple's comments in April were a large blow for Imagination as the U.S. firm accounts for the majority of the British company's revenue. In April, when the two organization's clashed, Imagination noted that Apple focusing on making its graphics chips could breach the duo's current licensing agreement.
"Apple has not presented any evidence to substantiate its assertion that it will no longer require Imagination's technology, without violating Imagination's patents, intellectual property and confidential information," Imagination said in a press release in April.
"This evidence has been requested by Imagination but Apple has declined to provide it."
Focus on GPU
Imagination also said Thursday that it is looking to sell its embedded processor business MIPS, and mobile computing chip segment called Ensigma. It will focus on PowerVR.
"With continued investment, the Group considers PowerVR to be well placed in mobile, automotive, digital TV/set top boxes and the rapidly emerging AR/VR (augmented reality/ virtual reality) market and having the potential to exploit investments for artificial intelligence in the medium term. Imagination will continue to make the appropriate investments in the PowerVR business," the company said.
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23814956d48d743b790deac56bc7f1b8 | https://www.cnbc.com/2017/05/04/look-at-how-your-congressman-voted-on-the-republican-obamacare-replacement-bill.html?__source=newsletter%7Cyourmoneyyourvote | Look at how your representative voted on the Republican Obamacare replacement bill | Look at how your representative voted on the Republican Obamacare replacement bill
Speaker of the House Paul Ryan walks from the House Chamber after the U.S. House of Representatives approved a bill on Thursday to repeal major parts of Obamacare and replace it with a Republican healthcare plan in Washington, U.S., May 4, 2017.Kevin Lamarque | Reuters
The Republican bill to repeal and replace major parts of Obamacare drew 217 "yes" votes in the House, and 213 "no" votes on Thursday.
All 193 Democrats voting on the American Health Care Act opposed it. They were joined by 20 Republicans.
Click here to see how your member of Congress voted.
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d67de193d62b6e585c02dd4f65b66543 | https://www.cnbc.com/2017/05/04/oil-just-dropped-to-a-5-month-low-below-47-and-analysts-say-it-could-go-much-further.html | Oil just dropped to a 5-month low below $46 and analysts say it could go much further | Oil just dropped to a 5-month low below $46 and analysts say it could go much further
VIDEO0:4400:44Price of oil his 5-month lowNews Videos
VIDEO5:1705:17Oil prices plunge to five-month lowsHalftime Report
Oil prices struck a new 2017 low on Thursday as mixed U.S. stockpile data compounded bearishness that has permeated the energy complex in recent weeks.
U.S. West Texas Intermediate crude fell below $46 and international benchmark breached $49, both sinking to the lowest level since Nov. 30, the day the Organization of the Petroleum Exporting Countries agreed to cut output.
Analysts said WTI could eventually decline to $42 now that it broke this key level.
U.S. West Texas Intermediate 3-day performance
The move lower came after the U.S. Energy Information Administration reported a much smaller-than-expected drop in crude oil inventories and another week of soft gasoline demand.
John Kilduff, founding partner at energy hedge fund Again Capital, said there was no one headline moving oil on Thursday. Instead, he chalked it up to more technical trading.
"That $47 level ... is huge," he said.
On Tuesday, oil breached the previous week's low of $48.20, sparking a round of high-volume, late-afternoon selling.
There is some support around the $45 level, Kilduff said. But if U.S. crude settles below $47 a barrel on Thursday, he believes the contract could plunge to the November lows of $42 a barrel.
Just before noon, U.S. crude broke through a major support zone at $45.90 flagged by Seaport Global Securities earlier in the day. The next critical level is $42.70, the firm said in a morning research note.
Roberto Friedlander, head of energy trading at Seaport Global Securities, pointed to "terrible" demand for refined products, uncertainty around future oil consumption and "what seems like an endless supply of oil."
VIDEO2:0702:07Futures Now: Oil falls on supply data Futures Now
Both Kilduff and Friedlander said oil futures appeared to be getting caught up in a broader sell-off in commodities on concerns about Chinese demand.
Thursday's sell-off appeared to validate the bearish views of technical traders who analyze charts, said Tom Kloza, global head of energy analysis at Oil Price Information Service.
"Chartists have been the smartest guys in the room, and the smartest guys in the room, their charts say expect something in the $45 to $46 range before this whole chapter is all done," he said.
Investors are looking forward to OPEC's May 25 meeting, where the exporter group will decide whether to extend its six-month production cut through the second half of 2017. OPEC and other exporters agreed to reduce output by 1.8 million barrels a day late last year.
While OPEC compliance has been good and many expect the group to extend its share of the cuts, global inventories have so far remained stubbornly high, including in the United States.
A Reuters survey indicating that compliance with the output cut deal fell among some OPEC members in April has weighed on oil prices. News of growing output from OPEC member Libya, which is exempt from the deal, also hurt sentiment.
VIDEO0:4400:44Price of oil his 5-month lowNews Videos
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adb2e23b549a87f8641a2173cc692141 | https://www.cnbc.com/2017/05/04/poor-credit-can-cost-you-as-much-as-288-more-on-homeowners-insurance.html | Poor credit can cost you as much as 288% more on homeowner's insurance | Poor credit can cost you as much as 288% more on homeowner's insurance
Filing a claim isn't the only thing that can cause your homeowners insurance rate to spike. Paying your credit card bill late can do some serious damage, too.
That's because underwriters often use a credit-based insurance score to set your premium, which looks at things like debt and late payments, among other factors.
"It's not intuitive that how I handle my credit card can affect things like my auto or home insurance," Peter Kochenburger, deputy director of the University of Connecticut's Insurance Law Center, told CNBC.
Getty Images
Having a fair credit score can result in rates that are an average 36 percent higher than what people with excellent scores pay, according to a new InsuranceQuotes.com study. The penalty is even more dramatic for those with poor credit — who pay an average 114 percent more than people with excellent credit.
(Credit scores range from 300 to 850, and the higher the better. In 2015, according to WalletHub.com, more than half of Americans had a FICO score that is 700 or greater — typically enough to get some of the best rates on a loan or credit card.)
But in some states, you're lucky if you're paying 36 percent — or even 114 percent — more. (See charts below .)
Experts say this is another reason why it's smart to shop around for homeowners insurance.
"Insurers don't always use the same methodology in utilizing credit scores, and it pays to shop around, ask an insurance agent, or also talk to your state insurance department about the use of credit scores," said Kochenburger.
Improving your credit can help you see better offers the next time you re-shop your insurance, said Loretta Worters, a vice president at the Insurance Information Institute.
"To protect your credit, pay bills on time, don't obtain more credit than you need and keep your credit balances as low as possible," she said.
Look for other opportunities to cut premiums, too. Purchasing your home and auto insurance from the same insurer may help get you a 5 percent to 15 percent discount on your premium, said Worters. Home improvements, like a home security system, can also yield better rates.
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cb29f97d4a65e309320bfb1201e7f7e0 | https://www.cnbc.com/2017/05/04/study-up-scoring-ap-credit-for-college-isnt-easy.html | Study up: Scoring AP credit for college isn't easy | Study up: Scoring AP credit for college isn't easy
If you're counting on Advanced Placement credits to cut the cost of a college degree, better start studying your school's policies, too.
In the next few weeks, more than 2.7 million students will take at least one AP exam, according to estimates from the College Board, which runs the program. Collectively, students will sit for more than 4.9 million AP exams over 38 course areas including art history, chemistry, psychology and Spanish literature.
VIDEO0:0000:00How much to borrow for collegeCollege Game Plan
Ideally, a good score can turn one $93 test into a three-credit college course worth roughly $1,800 to $3,000, offering a head start on the number of credits needed for a bachelor's degree. Multiply that by several Advanced Placement classes throughout high school, and it's a good recipe for graduating in under four years — or at least, on time.
"They can graduate early, and that can save them time and money," said David Levy, editor of Edvisors.com.
But experts say it's important for families to consider how colleges use such credits. Depending on your school of choice, your efforts might save thousands of dollars — or nothing.
"There's no guarantee they'll receive credit for their AP scores," said Paul Weinstein, director of Johns Hopkins University's graduate program in public management.
In September 2016, Weinstein assessed policies of the top 153 universities and colleges, as ranked by U.S. News and World Report. His study found 86 percent of them restrict AP credit in some way.
Three-quarters of colleges limited which AP subject areas they accept for credit, for example, while 38 percent capped the number of AP credits they award per student. Some will only accept a score of 4, or only accept a 5, Weinstein said. (Exam scores range from 1 to 5, with the College Board noting a 3 shows the student as "qualified," or capable of doing the work of an introductory-level college course.)
Hill Street Studios | Getty Images
Nine schools in the study — including Dartmouth University and Brown University — did not offer course credit for AP work, he said, although some may still use scores to determine course placement. In other words, you won't be a few credits closer to graduation, but you won't have to take Chemistry 101, either.
The College Board says it has seen positive trends in the past year, with more colleges granting credit for AP scores of 3 and accepting a broader array of subject areas.
"What we've seen in the 2017 data is a shift back," said Trevor Packer, senior vice president of AP and instruction at the College Board.
Much of the change stems from state policymakers passing legislation requiring public colleges to accept qualified AP scores for credit, Packer said. (Nearly half of states now have such a policy.) Among private colleges, he said, many see a liberal AP policy as a good recruiting tool.
The college knows it's not a class that has been watered down. [Scoring] a 4 or 5 is a real accomplishment.Mark KantrowitzVice president of strategy, Cappex.com
Here's how to make the most of your advanced classwork:
Search the College Board database to see how your colleges of choice handle Advanced Placement credit. Reach out to the college to confirm the current policy, or to get details if those publicly available aren't clear, said Weinstein.
"Some schools are very non-communicative about this," he said.
Nearly three-quarters of students considered college AP credit policies when making their enrollment decision, according to a College Board survey of 2016 test takers. That's smart: A college's willingness to accept AP scores, or not, could shift the value of its offered aid package, Levy said. The value of those course credits might add up to more than a scholarship.
"This should be another tool families are looking at," he said — and another negotiating point.
If the college policy is to use credits only for course placement, that can still work to your advantage, said Mark Kantrowitz, vice president of strategy for college and scholarship search site Cappex.com. That flexibility can free you up to take more advanced classes within your field of study or to graduate with a double major.
"Even if your [high] school doesn't offer AP tests, check with the college to find out what other options they offer," Kantrowitz said.
Some colleges may let you take a placement exam once you arrive on campus and use a good score to waive introductory course requirements, he said. They may also be willing to accept scores from other advanced-standing exams, either for credit or placement.
Course credit is only one way a great AP exam score can work to your advantage, Kantrowitz said. Good grades in an Advanced Placement class can boost your GPA above a 4.0, and colleges like to see those courses and scores on applications, he said.
"It benefits you in college admission, because they are challenging classes," he said. "The college knows it's not a class that has been watered down. [Scoring] a 4 or 5 is a real accomplishment."
Private universities that have restrictive AP credit policies tend to value the scores more when it comes to admissions and awarding scholarships, said Packer of the College Board.
Kantrowitz said he's even heard of employers asking job and internship applicants for proof of how they fared on AP exams because the standardized tests speak to knowledge of a specific subject area.
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7cf81bc18e950da1acb8b06cc15eb577 | https://www.cnbc.com/2017/05/04/with-house-vote-obamacare-replacement-heads-to-more-skeptical-senate.html?__source=newsletter%7Cyourmoneyyourvote | With House vote, Obamacare replacement heads to more skeptical Senate | With House vote, Obamacare replacement heads to more skeptical Senate
VIDEO3:1603:16Speaker Ryan: Still have a lot work to do before it is lawClosing Bell
The Republican replacement plan for Obamacare just narrowly cleared the House — but the bill will almost certainly face more skepticism in the Senate.
The House GOP passed its bill by a 217-to-213 margin on Thursday, sending it to the Senate after a swift process. A series of last-minute amendments won over enough wary conservative and moderate Republicans for the plan to get approved.
But even before the divisive proposal passed the House, several Republicans in the Senate signaled that it could see major revisions. Reports also indicated that the chamber could write its own version of a bill, further complicating the yearslong effort to repeal the law.
GOP Sen. Bob Corker of Tennessee told MSNBC on Thursday morning that there is "zero chance" the bill will go unchanged in the Senate.
"I don't see any way that it goes back [to the House] in the form that it comes," he said.
The timeline on a Senate vote is unclear, but Corker indicated Thursday that the bill could spend at least a month in the chamber.
Republicans hold a narrower majority in the Senate — 52 out of 100 seats — and would need a majority vote to pass the bill. Some moderate and conservative Republicans have been wary of the plan since the House introduced it earlier this year.
Some Republican senators have raised concerns about its rollback of the Medicaid expansion, which the nonpartisan Congressional Budget Office (CBO) cited in its estimate that 24 million more people would be uninsured in the next decade under the GOP plan. Others criticized its potential effect on older Americans, whose premiums are expected to rise under the plan.
GOP Sen. Rand Paul of Kentucky has argued the bill does not go far enough to repeal Obamacare, calling it "Obamacare Lite."
VIDEO1:3101:31Javers: This is a healing moment for the House Republican CongressClosing Bell
Many of those issues stirred concerns even before amendments, including one that allowed states under some conditions to waive the Obamacare requirements to cover essential health benefits or guarantee that people with pre-existing conditions will not see premiums spike.
Republican Sens. Lamar Alexander of Tennessee and Roy Blunt of Missouri signaled the chamber could write its own version, Bloomberg reported. GOP Sen. Lisa Murkowski of Alaska also said Thursday that she hoped to start with a "clean slate" in the Senate, according to Bloomberg.
The amended House plan has not yet been scored by the CBO to assess its costs or effects on people's coverage. That raised concerns for Republican Sen. Lindsey Graham of South Carolina.
Sen. Lindsey GrahamGetty Images
He tweeted Thursday that the bill "should be viewed with caution" because it was "finalized yesterday" and "has not been scored."
A bill -- finalized yesterday, has not been scored, amendments not allowed, and 3 hours final debate -- should be viewed with caution.
GOP Sen. Rob Portman of Ohio said in a statement that he supports changes to the health-care system, but they "must be made in a way that does not leave people behind," according to NBC News.
"I've already made clear that I don't support the House bill as currently constructed, because I continue to have concerns that this bill does not do enough to protect Ohio's Medicaid expansion," he said.
Republicans can afford only two defections to pass a bill, assuming all the Democrats and the two independents in the Senate oppose it.
Assuming the bill passes the Senate, it would return in whatever modified form to the House for a vote.
Senate Minority Leader Chuck Schumer said in a statement that the bill will go "nowhere fast" in the Senate. He urged Senate Republicans to "refuse to follow their colleagues over a cliff," and to help Democrats fix the current system rather than repeal Obamacare.
A CBO score on the amended House plan could come next week.
Watch: Health care bill passes House, heads to Senate
VIDEO1:5101:51Health-care bill passes House vote, now moves to SenatePower Lunch
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664e6772f931b02a09b46cb8108fcea0 | https://www.cnbc.com/2017/05/05/crude-is-crashing-and-heres-where-i-see-it-going-next-trader.html | Crude is crashing, and here's where I see it going next: Trader | Crude is crashing, and here's where I see it going next: Trader
Trader sees even more pain ahead for crude oilOil and gas service stocks are the group trader Todd Gordon believes will be hardest hit.
VIDEO2:5702:57The crude crush spells trouble for one group of energy stocksTrading Nation
Crude just had its worst day in five months, and one technically minded trader who has had a hot hand calling crude's next move sees even more trouble.
With crude hitting below $46 on Thursday for the first time since Nov. 30, Todd Gordon of TradingAnalysis.com said the commodity may retest old lows from 2016. "That opens the door to not only lower $40s, but possibly into the $30s," he said Thursday on CNBC's "Trading Nation."
Indeed, West Texas Intermediate continued the slide Friday, slipping to $45.36.
Gordon sees crude possibly dropping back down to its summer 2016 low, which sat at around $39.30. But according to the trader, crude itself won't be the biggest victim of its plunge. Gordon has made bold and correct calls on oil in the past. In November 2015, Gordon correctly predicted that crude would touch $26 a barrel.
Now Gordon has his eye on a plunge for oil and gas exploration stocks. Overlaying a chart of XES, the ETF that tracks oil and gas service and equipment stocks, over a chart of crude, Gordon points out that XES has already fallen below its summer 2016 lows compared to crude, which is "still a good $5 to $6 away" from those summer lows. In other words, Gordon believes that oil service and exploration stocks are underperforming crude and therefore in a more precarious position should oil continue its fall.
And within XES, there are two stocks in particular whose charts Gordon describes as "terrible." The first is Halliburton, which Gordon says has broken below an "uptrend support" that had been in place since March 2016. Technicians often look at trend lines for direction on a stock's next move. Now that Halliburton is below that "support" line, Gordon believes it will serve as "resistance" at around the $49 to $50 region, implying that Halliburton has more room to drop.
The second stock that has Gordon worried is Diamond Offshore. Gordon points out that a "head and shoulders pattern" had formed in the past few months, but that the stock has fallen below the "neckline" of the pattern at around the $15 region. As a result, Gordon believes that $15 is no longer "support" and that "a downside is certainly in play" for Diamond Offshore.
"As long as that crude oil continues down into the $40s and $30s, these underlying stocks are going to have some problems," concluded Gordon.
XES has actually plunged more than 25 percent this year, while oil has only fallen 15 percent year to date by comparison, including Thursday's plunge.
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36d956791813bb4470cf2b315db42c4e | https://www.cnbc.com/2017/05/05/le-pen-claims-victory-is-within-reach-election-france.html | Le Pen claims victory is within reach | Le Pen claims victory is within reach
Marine Le Pen, French National Front (FN) political party leader and candidate for French 2017 presidential election, celebrates after early results in the first round of 2017 French presidential election, in Henin-Beaumont, France, April 23, 2017.Pascal Rossignol | Reuters
Far-right candidate Marine Le Pen told CNBC she has not given up and is still well-placed to become the next president of France.
"Victory is in our reach," Le Pen, head of the Front National, told CNBC on Friday.
"The media seem not to hear the anger in our country that will express itself in the polls on Sunday, to get a real change of politics and a real break away from socialism represented by Emmanuel Macron," the far-right candidate said.
France is heading to the polls this Sunday in a closely-watched election. Polls indicate that the centrist Emmanuel Macron will win the run-off with about 60 percent of the votes. However, political analysts are alert for potentially higher-than-expected abstention figures.
This is the second time that a far-right candidate has reached the final stage of the presidential run-off. The party has gathered strong support in the last few years due to a number of terrorist attacks and rising concerns over security and immigration.
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b759602d030dd37f4bb8924f19af611a | https://www.cnbc.com/2017/05/05/oil-went-through-a-flash-crash-overnight.html | Oil went through a flash crash overnight, putting an already fragile market on edge | Oil went through a flash crash overnight, putting an already fragile market on edge
VIDEO4:4804:48Oil marooned near five-month lowsSquawk Box Europe
Oil prices plunged below $44 a barrel overnight in a matter of minutes, putting the market on edge as futures tested yet another key technical level. Traders blamed forced margin calls and computer trading for the so-called flash crash but were not quite sure what caused the drop.
At about 11:17 p.m. ET, U.S. West Texas Intermediate crude was trading at $45.36. By 11:31 p.m. ET, it had plunged 3 percent to a low of $43.76, the lowest price since Nov. 15. Futures then rebounded slightly back above $44 and stayed there for awhile until rallying back above $45 by 4 a.m. ET.
U.S. West Texas Intermediate crude futures 2-day performance
The flash crash was frightening to traders who bet on higher oil prices, "but it looks to be anomalous even in a market that is technically very weak and searching for strong fundamentals," said Tom Kloza, global head of energy analysis at Oil Price Information Service.
"So for now, it looks to be more of a brief nightmare than a template for the next couple of days," he told CNBC in an email.
Futures have plunged through a number of key levels this week. The sudden drop brought it within striking distance of another "major support zone" at $42.70, which Seaport Global Securities flagged on Thursday.
A close below $44 a barrel could trigger technical targets in the neighborhood of $40.50 a barrel, Kloza said.
John Kilduff, founding partner at energy hedge fund Again Capital, said the overnight plunge looks like forced margin-call selling. Kilduff added that he would not be surprised to hear that a hedge fund "blew up," meaning it was forced to sell its positions.
International benchmark also extended losses overnight, dropping to $46.64 a barrel after breaking below $50 on Thursday for the first time in six weeks.
VIDEO2:0102:01OPEC hasn't taken crude oil exports off the markets: AnalystSquawk Box Asia
More important than Brent falling below $50 a barrel is the drop in both Brent and WTI below their 200-day moving averages, according to Matt Smith, director of commodity research at tanker tracking firm ClipperData.
"Breaking through that sort of long-term trend line has really just forced this waterfall of sell orders to come in, and that's why once we broke those levels we saw a huge sell-off overnight," he told CNBC Asia.
Traders say so-called sell stops — or trades set to execute once an asset reaches a certain price level — sparked sharp declines first on Tuesday afternoon and again on Thursday.
Yesterday's close triggered a liquidation in long positions — or bets that oil prices will rise — which accelerated when U.S. crude breached $45 a barrel, said Andy Lipow, president of Lipow Oil Associates. The extension of the liquidation can be seen in the rise in trading volume for WTI's front-month contract to over 340,000, he said.
Traders tell CNBC there were no major headlines pushing prices below key technical levels, though a disappointing report on U.S. crude stockpiles and news of higher output in Libya has weighed on market sentiment this week.
Oil prices rebounded strongly to end Friday's session about 1.5 percent higher, mostly on signs that Russia is inclined to extend oil production cuts through the second half of 2017. Russia is the largest contributor to a deal among a group of non-OPEC crude exporters to remove more than a half million barrels a day from the market.
The sharp sell-off and subsequent bounce "probably marks a near-term bottom for now," Kilduff said.
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720f6d56b8c8cb574e5b3a45c0067056 | https://www.cnbc.com/2017/05/05/where-the-jobs-are-rural-hospitals-desperately-need-more-nurses.html | Where the jobs are: Rural hospitals desperately need more nurses | Where the jobs are: Rural hospitals desperately need more nurses
VIDEO2:3002:30Where the jobs are: Nurses in demandHealth and Science
Nursing has never been an easy job, but with staffing shortages and patients piling up, the gig is getting tougher across the country.
Navicent Health in the small community Macon, Georgia, is the second-largest hospital in the state. Located just an hour outside of Atlanta, the hospital has more than 600 acute-care beds and 1,900 nurses. But attracting and retaining qualified staff has proven difficult, leaving Navicent with a shortage of over 150 nurses at a time when the aging population is creating myriad headwinds for the industry.
"The biggest challenge here is just the workload," chief nursing officer Tracey Blalock said. "It can sometimes be a little overwhelming. Caring for five or six patients can get very difficult if they're acutely ill."
The nursing shortage goes well beyond Macon, and the challenge is layered — patients are living longer than ever before, requiring more care than in the past. More nurses are also aging out of the workforce, leaving a skills gap as they wind down their careers. Recruiting new talent is more challenging in rural areas and smaller facilities, which offer lower pay and a less vibrant social scene.
VIDEO1:5001:50Where the jobs are: Nursing shortageSquawk Box
"We are seeing growing shortages in different states and geographic reasons. It's a real distribution issue that is only getting worse," said Pamela Cipriano, president of the American Nurses Association. "When we talk to nurse executives and staff around the country, we hear they have difficulty recruiting, and nurses are short-staffed."
Meanwhile, the outlook for registered nurses is set to grow by some 16 percent through 2024, adding nearly half a million jobs, according to Bureau of Labor Statistics. Salaries within the industry can vary widely, according to the American Nurses Association, from $45,000 a year on the low end to $150,000 annually, depending on the degree of education, specialty and location.
Travel nursing plays another factor as it's become increasingly popular, and Blalock has seen many nurses at her facility follow that path. "They can go anywhere in the United States and make $10 to $15 more an hour than they were here," Blalock said, noting that the average salary is $62,000 annually at Navicent.
VIDEO1:0901:09How a nursing shortage is impacting hospitalsHealth and Science
The hospital aims to motivate employees and recruits with a nurse externship program for students and a residency program with advanced training for nurse graduates. There's also tuition reimbursement and a program to help cover payments, book fees and more.
The aging population contributes to the nursing shortage beyond just patient care and nursing staff retirements. Nurse educators are also aging out of the field.
About 150,000 registered nurses graduate from nursing programs across the country each year, but Cipriano says schools don't have faculty to teach all the qualified applicants in their programs.
"Our schools are telling us that they are turning away over 68,000 qualified applicants a year," Cipriano said. "The average faculty member is older than the average clinically practicing nurse, and so they are approaching retirement age faster."
Navicent Health nurses take care of a patientSource: CNBC
It's an issue the University of Maryland School of Nursing faces, as its enrollments grow. It has some 1,900 students across this year, up from about 1,700 in 2010.
"We've been very purposeful in terms of admitting more entry-level nursing students," said Jane Kirschling, the dean, adding that the state is projected to have a shortage of some 10,000 nurses in the years to come. "We feel a personal responsibility for making sure Maryland has enough registered nurses and professional nurses to meet care needs of our residents."
One of those students in 26-year-old Jasmine Noronha, who is advancing her degree as a nurse practitioner. The Bowie, Maryland, native wants to work in a rural facility on Maryland's Eastern Shore once she graduates because she believes that's where she'll be able to make the greatest difference.
VIDEO1:0301:03Training for a career in nursingHealth and Science
"I really enjoy the patients there. A lot of them haven't sought care in a couple of years, because they don't know how important it is for their diet and nutrition to see a doctor," Noronha said.
Despite long days and headwinds within the field, Noronha remains eager.
"At the end of the day when I go home, I may have had a hard day and not sat down, and not eaten lunch," she said. "But I can look back on my day, and say 'I made a difference.'"
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d640e85f6eddaa898bff97430c74c642 | https://www.cnbc.com/2017/05/06/investors-are-missing-the-glaring-risk-of-a-recession-david-tice.html | Investors are missing the glaring risk of a recession: David Tice | Investors are missing the glaring risk of a recession: David Tice
VIDEO6:2006:20David Tice makes the bear case on the marketTrading Nation
Investor David Tice is going deeper into bear territory, predicting that the economy is months away from a deep correction that will send stocks down by as much as 50 percent.
Tice is known for his tenure as manager of the Prudent Bear Fund. He sold the fund, which depends on market pullbacks for profits, to Federated Investors just as the financial crisis was unfolding in 2008.
Since the acquisition, he's been involved in private equity, film producing and charities. But he's planning his emergence from hibernation to capitalize on the potential downturn.
"The market has tended to go down about every seven years. It went down in 1987, 1994, 2001 and 2008," Tice told CNBC's "Trading Nation" on Friday. "During these periods after the declines, it rallies like crazy. But now bad things are about to happen again."
He sold his bear fund when it had $1.2 billion in assets under management. According to Morningstar, it has just $254.7 million right now under Federated's leadership. CNBC reached out to Federated for a comment.
The steep losses could just be a stark reminder of the nature of the stock market rebound. The Index rebounded 92 percent since the financial crisis hit in September 2008.
"The catalyst is we're 93 months into an economic recovery. We have the [Federal Reserve] starting to tighten. We have banks actually starting to tighten," he said. Tice pointed out the economy is not doing very well, with the gross domestic product growing by an anemic 0.7 percent in the first quarter.
Tice's timing in selling the Prudent Bear Fund may have been pretty good, but his calls on a pullback haven't materialized.
He's calling for a 30 to 50 percent S&P pullback over the next six to 10 months. He also made that prediction in 2012 and 2014. It never happened.
"The bears are always early. I've certainly always been early," said Tice. "Policymakers end up doing what they think is right in order to kick the can down the road. However, now we have so many issues."
If there is a correction, Tice says there are two protection plays investors should consider. Gold, which is down more than 6 percent over the past three years, is one of them.
"You should own gold stocks... They're still priced very, very well compared to the bullion," he said.
Tice says makes a lot of sense, too. Unlike the bearish activity in gold, bitcoin has soared 253 percent since 2014.
"It's been looked on as a fraud, as a fad, etc.," added Tice. "It truly is a competitor to debased currency. And it makes a lot of sense just from a transactional basis."
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8d8e856c134077b3680e7b6b4110eab4 | https://www.cnbc.com/2017/05/07/french-election-markets-dodge-a-bullet-after-macron-defeats-le-pen.html | Markets dodge a bullet after Emmanuel Macron defeats Marine Le Pen in French election | Markets dodge a bullet after Emmanuel Macron defeats Marine Le Pen in French election
Supporters of Emmanuel Macron celebrate near the Louvre museum after results were announced in the second round vote of the 2017 French presidential elections, in Paris, France May 7, 2017.Benoit Tessier | Reuters
Investors across the globe got what they expected — and what many of them hoped for — after centrist Emmanuel Macron defeated far-right candidate Marine Le Pen in the second round of the French election.
"We took one of the biggest risk events of the year off the table," said Tom Hainlin, global investment strategist at Ascent Private Capital Management. "I think people will now be focusing on the fundamentals — which have been good — and the European Central Bank, which continues to be accomodative."
Macron was projected to get 65.1 percent of the votes and Le Pen just 34.9 percent, according to exit polling firm Ipsos. Most other polls had Macron defeating Le Pen by a similar margin.
The euro climbed to its highest level in six months, breaking above $1.10 for the first time since the U.S. presidential election.
Euro/dollar since April 23
Source: FactSet
The common currency jumped above $1.09 after the first round of France's vote last month and held around that level as most market participants expected Macron — the pro-European candidate — to win. A Le Pen victory would have raised questions about France's future in the European Union and the euro zone.
"The euro's appreciation is probably largely done," Komal Sri-Kumar, president of Sri-Kumar Global Strategies, told CNBC via email. "This is because investors' attention will now shift focus on if, and how, President Macron will be able to implement reforms."
This is the second bullet global markets have dodged from European elections. Earlier this year, the Netherlands far-right party — led by Geert Wilders — came in second place in Dutch elections, a disappointment considering the party led most polls leading up to the election.
U.S. President Donald Trump congratulated Macron on the victory in a Twitter post.
Tweet
"Despite the low turnout, Macron's victory is an unambiguous win for the French center, for Europe, and consequently for global markets," said Quincy Krosby, chief market strategist at Prudential Financial, in a note. "We should initially expect a 'risk on' market before investors revert to fundamentals."
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c2da830cc0d69e07fb9fae613af8113e | https://www.cnbc.com/2017/05/07/get-ready-for-dramatically-lower-stock-market-returns-over-the-next-decade.html | Get ready for dramatically lower stock market returns over the next decade | Get ready for dramatically lower stock market returns over the next decade
VIDEO0:5200:52Get ready for dramatically lower stock market returnsNews Videos
Enjoy the stock indexes riding at record highs for now, but get ready for much stingier markets in the years to come.
That's the message consistently conveyed these days by investment counselors and finance scholars, who argue that with today's starting equity valuations and low interest rates, the coming decade should produce dramatically lower returns than the historical average.
The leaders of Vanguard Group, overseers of some $4 trillion in client assets, have been advising investors to expect a typical 60 percent stocks/40 percent bonds portfolio to deliver two- to- three percentage points less in nominal annual returns than its long-term norm. (Since 1926, such an asset mix has returned better than 8.5 percent annualized.)
Other forecasts are even less generous. Research Affiliates, a quantitative and "smart beta" fund manager, projects that U.S. stocks might only offer one percent a year for the next decade, after inflation. This is based largely on the so-called Shiller P/E, a ratio of the S&P 500 index to its trailing ten-year average earnings, which is now above 29 and higher than any period aside from the run-up to the 1929 and 2000 market peaks.
Jeremy Grantham of institutional value manager GMO has, by his admission, been wrong for years in assuming that corporate profit margins and equity valuations would revert to their pre-1990s trend levels. Yet even accounting for some more permanent upward shift in these gauges, he sees real (after inflation) returns of 2-3 percent a year looking out two decades.
And a simple plot of the market's forward P/E ratio against subsequent market returns shows that, since 1978, when starting at today's multiple of around 17.5 forecast earnings, ensuing seven- and 15-year nominal returns (before inflation) have been clustered in the mid- to low-single digits.
These forward-return calculations vary in their approach and assumptions, but all are anchored on today's stock valuations, long-term norms in corporate-profit growth and current interest rates. Stocks, even during the depths of the last bear market, never got dramatically cheap compared to prior cycles and certainly didn't stay inexpensive for very long.
And with risk-free 10-year government debt yielding a skimpy 2.3 percent in the U.S. and far less elsewhere, all other financial assets have repriced for skimpier future returns as well.
The first thing to say about this chorus of sober forecasts is that no one truly knows. Valuations have certainly adjusted into a higher range the past two decades, and if one wants to argue that corporate profit margins can climb higher still from record levels due to technology or whatever other factor, it can't be refuted outright.
The second point to note is that low long-term returns can be arrived at via numerous paths. Stocks can keep galloping higher for the next few years in a late-'90s rerun, and then drop a lot. Current valuations have almost no predictive power over the next one or three years, but only exert their pull beyond half a decade.
We've been told to brace for a "low-return environment" for years now, and still the S&P 500 has delivered nearly 14 percent the past five years. The benchmark at this multiple in a rising-earnings phase, with a 2 percent dividend yield and few imminent recession signals, doesn't seem like a market firetrap one needs to escape this minute. (Or is that assessment itself the trap the consensus has fallen into?)
And it's at least mildly interesting to note that the plot of forward P/E against future returns shows a clustering of very good seven-year gains starting at valuations only slightly lower than today's level.
Or stocks could succumb to a bear market soon and give patient cash holders a chance to add exposure at cheaper levels for the return trip higher. Or they could trudge along for years with mild rallies and muted setbacks, clocking so-so gains and boring us all along the way.
What is an investor to do, then, in a less fruitful investing future, however it unfolds?
The clear first step would be to save more, if possible. A mistake investors make is to expect the market to do much of one's saving for them. And, interestingly, by adding more savings to a broad portfolio, an investor would, and likely should, be buying more stocks, despite their reduced return expectations.
Celia Dallas, chief investment strategist for institutional investment advisor Cambridge Associates, notes that investors "are still being compensated for taking more risk," even as expected returns have receded across all capital markets. In other words, equities should still net more than bonds and cash.
She adds that investors can also help themselves by cutting their investment costs. For her pension clients, that means negotiating lower fees directly. For individuals, it means sticking to low-cost index of quantitative funds, which charge perhaps a percentage-point less per year than did the typical mutual fund in the fat market years of the 1990s.
Diversifying into foreign assets also seems to make sense. U.S. stocks have outperformed for years and are a good deal more expensive. For good reason, you say? Maybe right now, but over long stretches, buying the cheaper underperformers and rebalancing regularly to keep a portfolio mix on track tends to win out.
Vanguard suggests, as a broad guideline, keeping some 40 percent of equity assets in overseas stocks. Rob Arnott, founder of Research Affiliates, pegs developed-market expected real returns for the next decade around 5 percent, and emerging markets closer to 7 percent - vastly better than the stateside setup.
A final suggestion for investors: Stay open-minded about how markets might behave. Absorb the careful conclusions of the finance math that argues for subdued returns for years to come, be prepared for some bad stretches in there, and allow for pleasant surprise if markets turn out to be more generous than expected.
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db99af2770f0b611ea35a635ab4599f4 | https://www.cnbc.com/2017/05/07/macron-email-leaks-far-right-wikileaks-twitter-bots.html | US far-right activists, WikiLeaks and bots help amplify Macron leaks: Researchers | US far-right activists, WikiLeaks and bots help amplify Macron leaks: Researchers
U.S. far-right activists helped amplify a leak of hacked emails belonging to leading French presidential candidate Emmanuel Macron's campaign, some researchers said on Saturday, with automated bots and the Twitter account of WikiLeaks also propelling a leak that came two days before France's presidential vote.
The rapid spread on Twitter, Facebook and the messaging forum 4chan of emails and other campaign documents that Macron's campaign said on Friday had been stolen recalled the effort by right-wing activists and Russian state media to promote hacked documents embarrassing to Democratic U.S. presidential candidate Hillary Clinton last year.
It also renewed questions whether social media companies have done enough to limit fake accounts or spammed content on their platforms and how media organizations should report on hacked information.
Twitter declined to comment on whether it had taken any specific action in response to the Macron leak. Facebook did not respond to a request for comment.
Chesnot | Getty Images
Analysis conducted by The Atlantic Council's Digital Forensic Research Lab published on Saturday found that the hashtag #MacronLeaks reached 47,000 tweets in three and a half hours after it was first used by Jack Posobiec, a writer in Washington for the far-right news organization The Rebel. Posobiec's online biography said he coordinated grassroots organizing for a group that supported U.S. President Donald Trump's campaign.
Posobiec's initial tweet on the Macron documents was retweeted fifteen times within one minute and 87 times in five minutes, Atlantic Council senior fellow Ben Nimmo wrote in a blog published on Medium.
Posobiec is prolific on Twitter, where he has a large following of more than 100,000 accounts. Contacted by Reuters, Posobiec said he did not operate bots and that he used his account to share a post he saw on 4chan.
Bots helped move the hashtag from the United States to France, according to Nimmo, where surveys show far-right leader Marine Le Pen trailing Macron by more than 20 points heading into Sunday's election.
French electoral law forbids candidates from commenting during Saturday and until polling stations close on Sunday.
WikiLeaks, the anti-secrecy group that published hacked emails belonging to Democrats during the 2016 presidential election, provided the largest boost of attention on Twitter to the Macron emails, Nimmo said.
The group did not publish the information itself but tweeted about the leak at least 15 times.
"As the dominant publication in the field we were hours ahead of all other major outlets," WikiLeaks said in a private Twitter message to a Reuters reporter. "That's what our readers expect."
Some researchers also observed the use of identical phrasing in blogs about the leaks, which they alleged was aimed at driving Alphabet Inc's Google search result rankings. Google did not immediately respond to a request for comment.
About nine gigabytes of data purporting to be documents from the Macron campaign were posted on Pastebin, a site that allows anonymous document sharing.
VIDEO1:3701:37Macron vs Le Pen: Who will win the election on Sunday?Squawk Box Europe
Other recent high-profile political leaks, including those during the U.S. presidential election, have often been dumped by WikiLeaks, which has a sizeable online following and international recognition.
"There is a noticeable lack of a persona taking credit for this," said John Hultquist, a cyber researcher at FireEye, adding that such an absence made attribution more difficult.
The U.S. cyber intelligence firm Flashpoint told Reuters late Friday that an initial review of the Macron leaks indicated that APT 28, a group tied to the GRU, the Russian military intelligence unit, may be behind the leak, though evidence was not yet conclusive. Among other indicators, the firm said metadata contained in one of the leaked files showed it had been modified by someone who works in the technology industry in Moscow.
But other cyber researchers said that analysis was premature, and western security officials contacted by Reuters were cautious about assigning any attribution. The Kremlin has repeatedly denied accusations it has attempted to use cyber attacks to meddle in either the French or U.S. elections.
The Macron leaks prompted swift alarm in the United States, where many believed Russian President Vladimir Putin was again trying to put his thumb on the scales of a Western election.
U.S. intelligence agencies concluded that Putin ordered the hacking of Democratic emails during the U.S. election to benefit Republican Trump, who has been at times dismissive of those findings and resurfaced his claim earlier this week that China could have been responsible.
U.S. Senator Mark Warner, the top Democrat on the Senate Intelligence Committee, said in a statement to Reuters that the Macron leak demonstrates the urgency of his panel's investigation into Russia's alleged interference in last year's U.S. election.
Noting the Macron dump may contain fake documents mixed in with authentic material, as some analysts have suggested, Representative Adam Schiff, the top Democrat on the House Intelligence Committee, said in a statement that the leak may represent "yet another dangerous escalation of cyber interference in a Western nation's democracy."
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8d14250103afdd54448d793a92d973c4 | https://www.cnbc.com/2017/05/08/amazon-ceo-jeff-bezos-long-term-thinking.html | Amazon CEO Jeff Bezos has a pretty good idea of quarterly earnings 3 years in advance | Amazon CEO Jeff Bezos has a pretty good idea of quarterly earnings 3 years in advance
When Amazon reports quarterly results, investors watch closely and shares move accordingly, but for Chief Executive Jeff Bezos, the earnings are the result of plans set in motion three years prior.
In a talk at the Internet Association's annual gala last week, Bezos was talking about what makes his e-commerce and cloud company tick. As well as being customer focused, the CEO also said that the company is "long-term oriented".
"I ask everybody to not think in two-to-three-year time frames, but to think in five-to-seven-year time frames," Bezos told an audience in Washington, D.C.
"When somebody … congratulates Amazon on a good quarter … I say thank you. But what I'm thinking to myself is … those quarterly results were actually pretty much fully baked about 3 years ago. Today I'm working on a quarter that is going to happen in 2020. Not next quarter. Next quarter for all practical purposes is done already and it has probably been done for a couple of years."
Jeff Bezos speaking at the New York Economic Club luncheon in New York on Oct. 27, 2016Adam Jeffery | CNBC
Amazon reported first-quarter earnings at the end of last month that topped analyst estimates. Businesses such as Amazon Web Services (AWS), its cloud division, helped boost earnings. AWS launched in 2006 and is an example of growth seen in Amazon businesses beyond e-commerce which are now seeing big results.
Long-term thinking helps businesses focus on planning and where to spend their energy, Bezos explained, but it's not an easy thing to do.
"It's not natural for humans. So it's a discipline you have to build. The get rich slowly schemes are not big sellers on infomercials. That's something that you have to … teach over time," Bezos said.
To sum up, Bezos said that Amazon is a "collection of principles" such as long-term thinking and a customer-centric approach, something that has helped build the company into a giant, and clearly has made its founder happy.
"I dance into work," Bezos said.
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ad494c20778a8bbe1d94e600323eb988 | https://www.cnbc.com/2017/05/08/booming-go-jek-started-by-seeing-jakartas-traffic-jams-as-an-opportunity.html | Booming Go-Jek started by seeing Jakarta's traffic jams as an opportunity | Booming Go-Jek started by seeing Jakarta's traffic jams as an opportunity
A scene of Jakarta, Indonesia.Adek Berry | AFP | Getty Images
What began as a call center in Jakarta for bike hailing in 2010 is now reportedly valued at $3 billion, operating in 25 Indonesian cities.
Go-Jek has evolved beyond ride-sharing into logistics, lifestyle services and more recently mobile payments becoming the world's largest on-demand platform with end to end control over its 15 vertical businesses. It is sometimes referred to as Indonesia's only Unicorn.
Go-Jek says it is a social enterprise, hoping to make money by making life easier with the numbers showing substantial progress as its Go-Jek app has been downloaded 22 million times in the past year. More than 250,000 drivers, take passengers on motorcycles or by cars as well as carry packages and food from place-to-place as as well as massage therapists, according to Piotr Jakubowski, chief marketing officer.
The $3 billion valuation was reported by TechCrunch and aided by significant investment from Tencent. Jakubowski attributes Go-Jek's success with targeting the problem of mobility in a populous city like Jakarta such that consumers are able to receive services without getting stuck in traffic.
"What Go-Jek has done actually is we've created our own definition of mobility. We've been put in the same competitive set with other players who are solely focused on the concept of mobility from a linear perspective - they are moving people from A to B", Indonesian-born Jakubowski told CNBC's Akiko Fujita on Squawk Box Asia.
VIDEO0:0000:00Indonesian startup Go-Jek has a new spin on mobility and it's paying offShaping the future
This business strategy of actually solving the problem of mobility in Indonesia enabled Go-Jek to surpass its competitors Uber and Grab, even though it was late to launch its ride sharing app in Jakarta.
"The regional, or the global guys, took a business that worked in other places and just implemented it in Jakarta. Fact of the matter is, it doesn't matter whose car you're sitting in, you still can't get anywhere," Jakubowski said.
In fact, Go-Jek's rapid expansion beyond ride sharing such as food delivery, on- demand massage services and cleaning services came about from being receptive to what Indonesian consumers wanted.
"And that's where a lot of the expansion has started, you know, you take a look at food delivery, you take a look at logistics and courier services, you take a look at very local things like massage and cleaning. Having people coming to your house and clean your house. This was stuff that had kind of naturally progressed and now we've just become a one-stop shop for everything you need to get done", Jakubowski said.
"Maximizing the consumer experience" is Go-Jek's key focus at the moment, Jakubowski said.
The company launched in 10 more Indonesian cities in the past month and operates in 25 cities, with no plans to expand beyond the archipelago.
On the social side, he said that by providing work, the company is doing good.
"We are Indonesian and we are dedicated to the future of the country and its digital economy not by pledges, but by the foundations we have already put down and the perseverance we have showcased as a company."
Follow CNBC International on Twitter and Facebook.
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e12822525ca80c2c7d3545e9bdab12e1 | https://www.cnbc.com/2017/05/08/i-did-my-job-yates-says-of-travel-ban-that-got-her-fired.html | 'I did my job,' Yates says of travel ban that got her fired | 'I did my job,' Yates says of travel ban that got her fired
VIDEO2:1302:13Yates: Compromise was number one concernClosing Bell
Former acting Attorney General Sally Yates defended her decision to not defend President Donald Trump's executive order on immigration.
Speaking before the Senate Judiciary Committee, Yates said she determined that the order was unlawful.
"Look, I understand that people of good will, who are good folks can make different decisions about this. I understand that, but all I can say is that I did my job the best way I knew how," Yates said.
Yates was promptly fired after she refused to defend Trump's first immigration order, which would have restricted travel from seven Muslim-majority nations.
Sen. Ted Cruz pressed Yates, saying that the U.S. Code grants the president broad authorization to impose entry restrictions.
Yates agreed that the president has that authority, but pushed back, citing another legal provision that prevents visa discrimination based on race or place of birth. Yates said, however, that her main concern was "whether or not the executive order here violated the Constitution, specifically the establishment clause and equal protection and due process."
Cruz argued that Yates made her decision after the office of legal counsel approved the order's legality. The Republican senator pushed Yates, asking if she knew of any precedent for her decision to contradict a determination made by the office.
"I'm not, but I'm also not aware of a situation where the office of legal counsel was advised not to tell the attorney general about it until after it was over," she said.
The Department of Justice was not only left out of the development of the order, but Yates also said she learned about the directive from media reports.
The former acting attorney general added that the office of legal counsel only looks at the face of a document, and not the intent.
"It was appropriate for us to look at the intent behind the president's actions and the intent is laid out in his statements," Yates said.
Earlier Monday, Trump's campaign website removed a 2015 statement calling for a "total and complete shutdown of Muslims entering the United States."
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26ffec272a4f3b326c35e197fac35995 | https://www.cnbc.com/2017/05/08/tom-insel-is-leaving-verily-.html | Another high-profile departure for Alphabet's 'Other Bets': Thomas Insel leaves Verily | Another high-profile departure for Alphabet's 'Other Bets': Thomas Insel leaves Verily
Thomas Insel speaks before presenting Natural Sciences award winners Xu Liu and Steve Ramirez at the Smithsonian Magazine 3rd Annual American Ingenuity Awards dinner at the National Portrait Gallery on October 16, 2014 in Washington, DC.Larry French | Getty Images
Dr. Thomas Insel, one of Verily's most prestigious hires from the health-care sector, has left the company.
Insel joined in December 2015 to head up the company's mental health team, but left in the past few weeks.
Verily is the life sciences arm of Alphabet, Google's parent company. The company confirmed Insel's departure with CNBC, and later in a blog post. After conducting "in-depth user studies," the authors say the team will focus on "enabling greater access to a human-centered care experience."
The mental health effort will continue in his absence, but it's too soon to say whether his role will be replaced, Verily spokesperson Carolyn Wang said.
Insel, a neuroscientist, was heading up an initiative to develop new technologies to combat anxiety and depression. Prior to joining the company, he led the National Institute of Mental Health. Insel recruited several other high-profile technologists and academics to his team, including Verily product manager Collin Walter; UC San Francisco's Danielle Schlosser and Stanford psychiatrist Honor Hsin.
Verily's chief medical officer Jessica Mega is also involved with the initiative.
"Verily is resolved to make a difference for people with mental health conditions," said Wang, who stressed that the team will continue the mental health program without disruption.
Insel is the latest in a series of high-profile departures from Alphabet's "other bets," which spun out from Google. These companies are targeting futuristic markets beyond Google's core Internet advertising business. Unlike the majority of these initiatives, Verily is reportedly already profitable.
Those who exited Alphabet in 2016 include Tony Fadell, who left Nest in the summer of 2016; Bill Maris, from investment arm GV; Google Fiber chief Craig Barratt; and Project Wing drone program head Dave Vos.
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68a49590d666695e8361a1d39ccfc97a | https://www.cnbc.com/2017/05/09/a-way-to-get-real-estate-income-without-buying-a-home-mortgage-reits.html | A way to get real estate income without buying a home: Mortgage REITs | A way to get real estate income without buying a home: Mortgage REITs
Fixed-income investors can earn yields of nearly 10 percent, perhaps more, if they can overcome a 10-year aversion to mortgage-backed securities that were blamed for the financial crisis.
These high yields are offered by mortgage real estate investment trusts, or mREITs, a subset of the REIT universe. mREITs invest in mortgage-backed securities and other loans to homeowners and businesses, while equity REITs, the more common variety, own actual real estate — commercial, residential and industrial properties.
The National Association of Real Estate Investment Trusts (NAREIT) says yields on the 34 mREITs averaged 9.87 percent at the end of the first quarter, compared to 4.01 percent for equity REITs.
Daniel Acker | Bloomberg | Getty Images
Brad Case, senior economist at NAREIT, says with mREITs currently yielding in excess of 7 points more than 10-year Treasury notes, they can be expected to return 8.9 percent a year over the next three years, based on patterns dating back to 1990.
mREITs can be a good choice for investors seeking steady income, as dividends from borrowers' payments are distributed to investors monthly rather than the longer intervals used by many fixed-income investments, says Allen Shayanfekr, co-founder of Sharestates, a real estate crowdfunding site.
Exchange-traded funds that specialize in mREITs, such as Market Vectors Mortgage REIT Income ETF (MORT) and iShares Mortgage Real Estate Capped (REM), are yielding 7.05 percent and 8.92 percent, respectively. ETF flows data shows that broad REIT funds are more popular. In the past one-year period, the Vanguard REIT ETF (VNQ) and iShares U.S. Real Estate ETF (IYR) have taken in $3.3 billion and $864 million, respectively. REM has taken in $348 million and MORT only $31 million, according to XTF.com.
(Source: National Association of Real Estate Investment Trusts)
There are risks, of course. mREIT dividends come from borrowers' loan payments, so a rise in defaults could drive yields down, taking mREIT shares down as well.
But advocates note that the economy is far healthier than in the financial crisis, when mortgage securities got a black eye. Loan defaults and unemployment have fallen, and home prices have gone up — reducing default risk.
Noted bond investor Jeff Gundlach of DoubleLine Capital is among the big names in the market who find mortgages attractive relative to other income opportunities.
"The market is stronger today than it was in the peak before the financial crisis," Shayanfekr says. However, he added that investors focused on long-term growth might do better in equity REITs, to profit from rising property values in addition to earning rental income.
More from ETF Strategist: 'Market crack': Leveraged ETFs ratchet up the risk again ETFs are taking in more than $1 billion a day this year The death of active funds explained in one article
Another hazard is "prepayment risk" when borrowers refinance their loans, stopping interest income on the old loans and returning investor's principal early — typically at a bad time to reinvest because yields are down. But prepayments are a major hazard only when interest rates are falling, and most experts think rates will continue to climb slowly, keeping this risk low.
Liquidity risk, or the prospect of not being able to buy or sell when you want to, is another concern, especially for investors trading in small volumes, says Steven N. Violin, senior vice president and portfolio manager at F.L. Putnam Investment Management Company in Wellesley, Massachusetts. Also, many mREITs bet on the spread between short- and long-term loan rates and use leverage to amplify results, making them especially hazardous if things go wrong.
VIDEO1:2601:26Real estate CEOs on housing under TrumpSquawk Alley
Then there is interest-rate risk, when older, interest-paying securities lose value because investors prefer newer ones with higher yields.
"In today's market we are primarily concerned about interest-rate risk and particularly how companies will fare in a 'bear flattening' of the yield curve, where short-term interest rates rise faster than long-term rates," Violin said. "This can be something of a double whammy for mREITs, as it hurts asset values as well as dividends."
But many mREIT advocates say the danger is not serious if rate increases are gradual and don't go too high, since mREITS will gradually replace older securities with newer ones that are more generous. The Federal Reserve has said it will raise rates, but slowly and modestly.
Among individual mortgage securities, the yields can go significantly higher than the ETFs that invest in dozens of mREITS. Some examples of publicly traded mREITS with double-digit yields, from REIT.com:
AGNC Investment Corp (AGNC): 10.54 percentAnnaly Capital Management (NLY): 10.27 percentChimera Investment (CIM): 10.31 percentCYS Investments (CYS): 11.79 percentDrive Shack (DS): 11.88 percentDynex Capital (DX): 10.43 percentNew Residential Investment (NRZ): 11.33 percentWestern Asset Mortgage Capital (WMC): 11.81 percent
"Mortgage REITS are generally stable investments in a rising interest-rate market," Shayanfekr said. But that doesn't guarantee good times, as the expected rise in mREIT yields can be dampened if higher mortgage rates cut the pace of lending, causing a shortage of new loans with higher yields. "As rates increase, it's true that the overall yield will increase, but you'll also see a decrease in home values and likely fewer qualified borrowers, meaning less mortgage loan product," he said.
Investors can protect themselves from interest-rate risk by purchasing mREITs that invest in adjustable-rate loans, since interest rates on those will go up as rates rise, increasing the mREIT yield. Examples include issues among commercial REIT and residential mortgage REIT niches:
Blackstone Mortgage Trust (BXMT): 8.09 percentStarwood Property Trust (STWD): 8.54 percentAGNC Investment (AGNC): 10.54 percentAG Mortgage Investment Trust (MITT): 10.12 percent.
"Rising home-loan rates tend to benefit mREITs that hold floating-rate loans," Violin said. "We prefer the commercial real estate loan segment in particular, where floating-rate securities are more readily available and yields seem relatively attractive in some sub-segments."
Christopher Dukes, president of Dukes Wealth Management, based in Culver City, California, is also a fan of mREITS containing floating-rate loans but prefers those that own residential rather than commercial loans, because he finds residential loans can adjust to rising rates more quickly.
"I've seen returns in the 5-6.5 percent range in early 2017," he said. "Given that many fixed rate investments pay considerably less, this asset class is a nice addition for someone looking for income. ... Investors should expect a five to seven-year time frame to maximize return on their investment."
— By Jeff Brown, special to CNBC.com
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7829f2a8c70c26fb3b9cefe3c61a2bdd | https://www.cnbc.com/2017/05/09/amazon-just-announced-a-new-echo-with-video-calling-and-a-touchscreen.html | Amazon's new Echo Show features video calling and a touchscreen | Amazon's new Echo Show features video calling and a touchscreen
VIDEO2:2202:22Cramer: 'Alexa, order me a pizza'Squawk on the Street
Amazon unveiled the Echo Show on Tuesday, a new voice-controlled speaker that sports a touchscreen display and can be used to make video calls.
The Echo Show will help Amazon continue to dominate the voice-controlled speaker market. A recent study published by eMarketer shows the company has a 70.6 percent market share, and also that number of users of voice-controlled speakers is expected to double to 35.6 million this year.
The Echo Show features a 7-inch touchscreen display and a front-facing camera that can be used for video calls. It supports voice calling between Alexa devices, including other Echo units and smartphones with the Alexa app installed.
Amazon
It's also compatible with smart home products such as Ring and Arlo smart cameras, which means users can ask the Echo Show to pull up a live camera feed of, for example, the front door camera or a baby's room. Like other Echo devices, it can be used to control other smart gadgets such as lights and thermostats.
A source told CNBC that Amazon plans to use its Alexa and Echo technology in the enterprise market, too, and that announcements on that front may come later this year. The source said Amazon will be specifically disruptive to unified voice tech from companies like Cisco.
This is Amazon's fourth Echo-branded product. The original Amazon Echo launched in 2014, followed by the smaller Echo Dot, the portable Echo Tap and, most recently, the Amazon Echo Look, which features a built-in camera and can provide outfit recommendations.
The Echo Show will be available in white or black and will launch on June 28 for $229.99, though interested parties can now preorder it.
Correction: This story was revised to correct the spelling of eMarketer.
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0a5a6d877bf6bb7baae82b427cabbe57 | https://www.cnbc.com/2017/05/09/china-crrc-chairman-on-us-operations-jobs-and-investments.html | China's state-owned rail manufacturer CRRC wants to be part of Trump's US growth story | China's state-owned rail manufacturer CRRC wants to be part of Trump's US growth story
VIDEO3:5003:50China's CRRC 'achieved success participating in the One Belt One Road initiative': ChairmanSquawk Box Asia
One of China's largest train makers is angling for a piece of the U.S. administration's pro-growth infrastructure investment plans.
CRRC Chairman Liu Hualong told CNBC in an exclusive interview Tuesday that he hoped the rail car maker would continue contributing to development in the U.S. through investments and job creation.
"Since the company entered the U.S., we brought benefits such as employment; we provide almost 400 jobs," Liu said.
CRRC, which was formed by a merger between two state-owned enterprises — China CNR Corp. and CSR Corp. — has been rapidly expanding its presence Stateside by winning contracts in major states.
In 2014, before the merger, CRRC won a bid to supply 284 subway trains to Boston for $567 million. The company also invested in a manufacturing facility in Springfield, Massachusetts.
In addition, the company won a $1.3 billion contract from the Chicago Transit Authority and is also eyeing contracts in other major cities, such as New York.
More recently, CRRC signed a contract with the Los Angeles County Metropolitan Transportation Authority worth as much as $647 million. CRRC said it will invest in a new facility in the Los Angeles region to manufacture major components, including propulsion, heating and air conditioning.
When asked if he was concerned about the anti-China rhetoric coming from the White House, Liu said he hadn't seen any impact on CRRC yet.
The China Railway Rolling Stock Corporation (CRRC) stand at the 3rd Russian-Chinese Expo at the 2016 Innoprom International Industrial Trade Fair at the Ekaterinburg Expo International Exhibition Center.Donat Sorokin | TASS | Getty Images
"No matter who is president, that person will want to maximize ways to develop the country," he said. "We should share the fruits of that development."
To be sure, in recent months, President Donald Trump reversed some of the harsh rhetoric he used on the campaign trail. For example, he told the Wall Street Journal in April he would not label the world's second-largest economy a currency manipulator in a report.
Trump also met Chinese President Xi Jinping in the same month and said an "outstanding" relationship was developing, and that "goodwill and friendship were formed, but only time will tell on trade."
Liu explained the U.S. is lucrative for CRRC because it has the biggest railway network in the world.
It is also a competitive, high-end market, which could bring CRRC industry recognition and an opportunity to improve its business and better compete, according to the chairman.
"Within the industry, people only see you as a high-end market play if you are in the U.S.," he said.
— CNBC's Sophia Yan contributed to this report.
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e729dd551515793f20bf0dc4de35a980 | https://www.cnbc.com/2017/05/09/owners-of-dead-giant-rabbit-on-united-flight-seek-damages-probe.html | Owners of dead giant rabbit on United flight seek damages, probe | Owners of dead giant rabbit on United flight seek damages, probe
VIDEO0:4300:43A legal battle is brewing over the giant rabbit who died after a United flightNews Videos
The owners of a giant rabbit named Simon who was found dead after a United Airlines flight demanded on Monday that the airline pay damages, order an outside investigation and re-evaluate how it handles animals on flights.
Attorneys for Simon's owners, who purchased him in hopes of winning the title of world's largest rabbit at the Iowa State Fair this summer, said they would take legal action if United failed to respond within seven days.
The lawyers say it is possible the 3-foot-long (1-meter) hare died after being placed in a freezer for 16 hours upon landing in Chicago on a flight from London. They say the airline then destroyed his remains without permission.
"United Airlines can issue any statement they like but their company's credibility is under question when they immediately cremate the giant rabbit Simon without anyone's consent," said Guy Cook, lead attorney for the three-person investment group that owned the rabbit. "They destroyed the proof."
United Airlines spokesman Charles Hobart denied Simon died in a freezer. He said in a written statement the company was reviewing a letter outlining the claims, was saddened by Simon's death and takes its responsibilities for transporting pets seriously. The statement did not say how much the owners were seeking in damages.
Hobart said the hare arrived in Chicago in apparent good condition and was seen moving around his kennel some 35 minutes later.
"Shortly thereafter, a kennel representative noticed Simon was motionless and that he had passed away," Hobart said. He did not address the cremation allegations.
Cook said it would be difficult to establish a cause of death because the rabbit's remains had been destroyed but, in the letter, demanded that United turn over all records of its investigation, including closed-circuit television footage.
The attorney also requested an independent investigation as well as compensatory and economic and punitive damages.
Cook said that Simon, a Continental rabbit whose father is considered the world's largest hare, was expected to exceed his father's size to claim that title and that his owners should be compensated for their potential economic losses from exhibiting him.
The investment group purchased Simon from a breeder in England and was flying him to the United States, where he would have been displayed at the Iowa State Fair in August and ultimately crowned world's largest rabbit, Cook said.
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7c1d13356a5a72343a71e945aef998a3 | https://www.cnbc.com/2017/05/10/amazon-snapchat-are-most-popular-apps-among-the-young-study.html | Amazon is the 2nd most popular app among teens, higher than Instagram | Amazon is the 2nd most popular app among teens, higher than Instagram
Mike Harrington | Getty Images
When it comes to apps they're using these days, teens and millennials say Snapchat is king — no surprise there.
But second place? It's not Instagram: It's Amazon.
This is according to a survey — The 2017 Love List Brand Affinity Index, run by Condé Nast and Goldman Sachs — that asked 2,345 U.S. millennial and Gen Z shoppers about their fashion, retail and consumer preferences. The survey skewed towards younger consumers.
One question asked which apps they were using currently that they weren't using a few months ago: Snapchat and Amazon came in first and second. (Other popular apps— Instagram, Twitter and Pinterest — came in third, fourth and fifth respectively.)
"Users are looking for efficiency, speed and convenience, and Amazon hits all those buckets," said Conde Nast chief marketing officer Pam Drucker Mann told CNBC.
Buying online allows Gen Z and millennial buyers to get feedback on the products, something they wanted in their shopping experience.
"They're very much paying attention to ratings and reviews," Mann said. "If you're going to brick and mortar, you don't have the same user endorsement that you do online. It's why we think Amazon is doing so well, because they do check all those boxes, allowing people to shop with those things in mind and allowing them to be smarter."
Other apps popular among teens and younger millennials included fashion and shopping apps Poshmark (7), Wish (12), Mercari (14) and rebate app Ibotta (20) — each notable because they were not pre-set answer options, meaning survey takers filled in those names.
"They really pride themselves on being this smart shopper," Mann said. "People had assumed users are really looking for discounts. With this millennial and Gen Zer ... there's a sense of pride or sense of savviness when it comes to shopping, and it's easier to navigate that online."
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2d8f0a59ad0085ddca46c6ea0153ae89 | https://www.cnbc.com/2017/05/10/verizon-wins-bidding-war-to-acquire-straight-path-for-more-than-3-billion-report.html | Verizon wins bidding war to acquire Straight Path for more than $3 billion | Verizon wins bidding war to acquire Straight Path for more than $3 billion
VIDEO0:5600:56Verizon strikes deal to buy Straight PathSquawk Box
Verizon Communications won an intense bidding war to buy Straight Path Communications for more than $3 billion, beating out AT&T.
Verizon will acquire Straight Path for $184 a share in an all-stock transaction, reflecting an enterprise value of approximately $3.1 billion, the companies said.
Straight Path and Verizon's boards have both approved the deal.
Straight Path was worth around $400 million two months ago and had just nine employees as of October.
The company's large trove of 28 GHz and 39 GHz millimeter wave spectrum used in mobile communications would give a new owner an advantage in 5G development.
Verizon will pay a termination fee of $38 million to AT&T on behalf of Straight Path.
Verizon and AT&T are seeking to gain an edge in the race to develop a fifth-generation network (5G) that would offer faster downloads and boost internet-reliant products such as self-driving cars.
Evercore served as financial advisor to Straight Path and Weil, Gotshal & Manges served as counsel. Debevoise & Plimpton served as counsel to Verizon.
News of the acquisition was first reported by the Wall Street Journal.
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af70406edf3ae6ee661d40ef4153d9b2 | https://www.cnbc.com/2017/05/10/wal-marts-jet-com-tests-fresh-grocery-concept-in-new-york.html | Wal-Mart's Jet.com brings grocery concept to New York, showing how it can take on AmazonFresh | Wal-Mart's Jet.com brings grocery concept to New York, showing how it can take on AmazonFresh
Walmart and Jet.com test grocery concept in New York.Jet.com
Wal-Mart has quietly made its next move in taking on Amazon to bring fresh groceries to the masses.
On Wednesday, Jet.com — which Wal-Mart acquired for $3.3 billion in 2016 — is beginning testing a temporary grocery concept in New York in partnership with Rachel Shechtman's Story retail store.
In buying the e-commerce company last year, Wal-Mart has hoped to beef up its online ordering offerings, bringing in Jet's co-founder and CEO Marc Lore, who now leads all of Wal-Mart's e-commerce operations.
Jet wasn't immediately available to comment.
"What's fresher than fresh?" Story wrote in release announcing the partnership with Jet. "Having healthy produce dropped at your door — and you don't even have to be home to receive it. This is the magic of Jet.com."
Jet will sell select grocery items at the New York Story location for six weeks. There also will be a number of in-store events with chef Mario Batali and makeup guru Bobbi Brown, among others.
Shechtman, a former brand consultant for Kraft and TOMS shoes, founded Story in 2011. The 2,000-square-foot "start-up store" in Manhattan features a rotating line-up of merchandise, which changes every four to eight weeks, the company says.
Jet's physical debut comes at a time when e-commerce giant Amazon has been investing more in its AmazonFresh business, and testing brick-and-mortar locations to expand its reach.
One store concept, called AmazonFresh Pickup, is a drive-in-type grocery store for Prime members that lets users shop online, reserve a time to pick up the groceries and have them loaded into their car at the store. Amazon also plans to boost the number of physical book stories it operates, and is testing a smart convenience store, Amazon Go, near its Seattle headquarters.
Meanwhile, Wal-Mart has been rapidly expanding its own online grocery business and concentrating on the so-called click-and-collect model, which allows consumers to pick up their orders at stores.
Last year, Wal-Mart announced a partnership with Uber and Lyft to delivery groceries to customers' homes.
While e-commerce is the fastest growing portion of the food retail business, few shoppers buy their groceries online. Wells Fargo Zachary Fadem estimates that just 1 to 2 percent of total grocery spending occurs online.
Since Lore's arrival at Wal-Mart, the big-box retailer has been beefing up its digital operations, recently adding to its portfolio women's clothing retailer Modcloth, for $150 million, and outdoor recreational retailer Moosejaw, for $50 million.
—CNBC's Jeff Daniels contributed to this report.
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e497eed85f02ecd84e3f8da3319f137b | https://www.cnbc.com/2017/05/11/amazon-echo-show-alexa-criticism.html | Voice assistants like Amazon's Alexa are 'far too stupid' to speak to humans, analyst says | Voice assistants like Amazon's Alexa are 'far too stupid' to speak to humans, analyst says
Amazon's Alexa and other voice assistants are "far too stupid" to hold conversations with users and the e-commerce giant's latest Echo Show product with a screen is an attempt to address the "shortcomings" of voice interaction, an analyst has claimed.
On Tuesday, Amazon unveiled the Echo Show, a voice-controlled speaker with a touchscreen display which will be available in June for $229.99. It's the next generation of its Echo speaker product.
But one analyst has criticized Alexa, the artificial intelligence (AI)-powered voice assistant that allows users to interact with the device.
"The problem is simply that Alexa (and all other others) are far too stupid to be able to hold a meaningful conversation with a user. Google Assistant is currently the best but remains woefully short of what one would consider to be a useful assistant," Richard Windsor, analyst at Edison Investment Research, wrote in a note on Wednesday.
"Digital assistants were designed to replace the human variety but because their intelligence is so limited, they are unable to hold a coherent conversation with the user. Human assistants do not need to use screens to understand requests, relay information and carry out tasks meaning that the perfect digital assistant should not either."
Google Assistant is the U.S. search giant's own voice assistant which competes with Alexa, Apple's Siri, and Microsoft Cortana.
VIDEO1:0301:03Amazon rolls out free calls and messages on all Echo devicesDigital Original
Windsor said that having a screen does make interactions with the machine easier and also could open the door for Amazon to use this space to advertise. But ultimately, the screen is an attempt to "make up for the huge shortfall in Alexa's cognitive ability," the analyst said.
Amazon did not respond to a request for comment when contacted by CNBC on Wednesday.
Windsor's comments come despite recent reports suggesting Amazon's dominance in the voice-controlled speaker arena. A recent study published by eMarketer shows the company has a 70.6 percent market share, and also that number of users of voice-controlled speakers is expected to double to 35.6 million this year.
And in March, RBC suggested that Alexa could bring in $10 billion in revenues by 2020, driven by sales of devices containing the voice assistant, shopping, and cloud computing solutions that Amazon could sell to developers.
Source: Amazon
Windsor said that the Echo Show is unlikely to sell in large numbers with consumers favoring the $50 Echo Dot – a smaller version of the Echo speaker. This means developers are unlikely to create new "skills" or apps for the Echo Show.
"This is where Google Assistant has a huge advantage as it has already been designed to run with a screen (smartphones) meaning that adapting to having a screen on the Google Home product should be much easier and much better," the analyst said.
"We still think that Google Home has the advantage here as it has a much better assistant than Alexa, but its lack of developer support for the smart home is starting to be a real problem. Google really needs to pull its finger out and show developers love, especially as Microsoft looks set to launch something similar to Echo Show but using Cortana."
Other analysts suggest that voice assistants are in the "first innings", meaning it is early days for the technology and Amazon's Alexa is, in fact, taking a lead.
"I'd argue that Amazon is actually, from a technology footprint, years ahead of rivals. If you focus too much on Amazon Echo then you completely miss the bigger picture which is the operating system opportunity of Alexa that goes way beyond Echo," Neil Campling, technology, media and telecoms analyst at Northern Trust Capital Markets, told CNBC by email on Wednesday.
Indeed, Alexa could act like an operating system – similar to what Google's Android is to mobile – to power the Internet of Things (IOT), which refers to millions of internet-connected devices.
"Until now basically everything connected is essentially individually connected rather than harmoniously linked on a unified platform or operating system. And it is voice assistants, or actually the operating system behind them, that can provide that bridge," Campling said in a separate note earlier in the week.
"Even the partnerships, product announcements and technologies it feels to us as if Amazon's Alexa has the chance to do to IOT what Windows did to computing."
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1f6e652f5a2c695b4e68e8ef1322b48d | https://www.cnbc.com/2017/05/11/dakota-access-pipeline-spilled-oil-84-gallons-of-oil-in-south-dakota.html | Dakota Access Pipeline spilled oil 84 gallons of oil in South Dakota | Dakota Access Pipeline spilled oil 84 gallons of oil in South Dakota
Veterans march with activists near Backwater Bridge just outside of the Oceti Sakowin camp during a snow fall as "water protectors" continue to demonstrate against plans to pass the Dakota Access pipeline adjacent to the Standing Rock Indian Reservation, near Cannon Ball, North Dakota.Lucas Jackson | Reuters
The Dakota Access Pipeline leaked 84 gallons of crude oil at a pump station in South Dakota last month, according to state documents, just weeks before the pipeline is set to start commercial service.
The spill, the equivalent of two barrels of oil, occurred on April 4 in Tulare township in Spink County, according to South Dakota's Department of Environmental and Natural Resources.
The $3.8 billion project drew environmental protesters from around the world after the Standing Rock Sioux tribe said the pipeline would desecrate a sacred burial ground and that any oil leak would poison the tribe's water supply.
Energy Transfer Partners, the company behind the construction of the pipeline, received approval from the U.S. Army Corps of Engineers in early February after months of delays. It is currently line filling and will be in service on June 1.
After the April 4 spill was reported, recovered oil was put back into the system. Any gravel or soil that had oil was cleaned and disposed of, said Brian Walsh, an environmental scientist with the agency.
The leak occurred some 100 miles (160 km) east of Lake Oahe, a part of the Missouri River system that has been the focal point of the protests.
"This is what we have said all along: oil pipelines leak and spill," Standing Rock Sioux Chairman Dave Archambault II said in a statement on Wednesday.
The Tribe is involved in a lawsuit challenging the project.
The 1,172-mile (1,885-km) Dakota Access line runs from western North Dakota to Patoka, Illinois, where it will link up with another pipeline to bring shale oil from North Dakota's Bakken play to the Gulf Coast.
An Energy Transfer Partners spokeswoman, Vicki Granado, said the spill occurred during the pipeline's commissioning activities. She added the spill occurred in a containment area, so there was no impact on the wider area.
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8c055ff289e2943f93bf41a270736951 | https://www.cnbc.com/2017/05/11/most-americans-call-it-inappropriate-for-trump-to-fire-fbis-comey.html | Most Americans say it was inappropriate for Trump to fire FBI's Comey | Most Americans say it was inappropriate for Trump to fire FBI's Comey
VIDEO4:0304:03Poll: More Americans think Comey firing was 'inappropriate'Fast Money
Most Americans say President Donald Trump's firing of FBI Director James Comey was inappropriate and diminishes their confidence in a fair investigation of potential ties between his campaign and Russians who interfered with the 2016 election.
Those are the findings of a new NBC News/Survey Monkey online poll conducted May 10-11 after Trump's abrupt action. The survey of 3,746 likely voters carries a margin for error of 2.5 percentage points.
Only 38 percent of Americans call the president's action appropriate, while 54 percent call it not appropriate. Those numbers almost perfectly track Trump's latest approval numbers (38 percent to 55 percent) in the Gallup tracking poll. Similarly, 55 percent said Trump's move makes them less confident that the Russia investigation will be conducted fairly, while 36 percent say it makes them more confident.
A 46 percent plurality said Trump acted because of Comey's handling of the Russia investigation — an explanation the White House insists is not true. Just 24 percent ascribed the decision to Comey's handling of the Hillary Clinton email investigation, which the White House initially cited in explaining the president's motivation. Some 22 percent said it was something else.
The poll also makes clear that Americans do not share Trump's view that the subject represents "fake news." A 54 percent majority call the allegations involving Russians and the Trump campaign "a serious issue," while 40 percent call it "more of a distraction."
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4529861575765290b80816a0b345e28a | https://www.cnbc.com/2017/05/11/philippines-claims-foreign-media-has-misrepresented-drug-war.html | Philippines claims foreign media has misrepresented drug war | Philippines claims foreign media has misrepresented drug war
PHNOM PENH — Foreign media are constantly misrepresenting Philippines President Rodrigo Duterte's war on drugs, one of his ministers claimed on Thursday.
Addressing a small room of journalists during the World Economic Forum's ASEAN meeting in Cambodia, newly-appointed Secretary of Foreign Affairs Alan Peter Cayetano said that international news agencies always focused on Duterte's brash remarks and never publicized his presidential statements. "They don't show the statements where he says police cannot abuse."
VIDEO0:3700:37Campaign against drugs protects human rights: Philippine SenatorSquawk Box Asia
International journalists also often use the wrong death toll figures when reporting on the country's situation, he continued. Reuters estimates 8,000 have died since the drug war launched in July last year, while Human Rights Watch pins the number at more than 7,000. Cayetano said, however, that those figures are related to homicides.
"1.2 million Filipinos, who were either pushers or users, have surrendered voluntarily and close to 3,000 have been killed in presumed legitimate police operations, those are the real numbers," he said.
Philippine President Rodrigo DuterteLean Daval Jr. | Reuters
"In the six years under (former President Benigno Aquino III), there were more than 90,000 operations against drugs. In only 10 months (under Duterte), there have been 50,000 operations, so naturally, the more operations, the more arrests — 60,000 people have been arrested," he added.
Political activists have said the bulk of deaths in the drug war were extra-judicial killings and concerns of police impunity are rampant. But Philippine officials reject those claims and have instead blamed other parties, including vigilantes and drug gangs. In an April report, Human Rights Watch said the 3,603 killings that police attribute to vigilantes and drug gangs were just a strategy to shield police from culpability.
Cayetano, Duterte's running mate in the 2016 presidential election, was only appointed to his new role on Monday and recently defended the president's administration to the United Nations Human Rights Council.
"May we invite you, the foreign media, to visit the Philippines. Do it with an open mind, and we will show you that the country is now becoming more peaceful and we will protect you and your businesses and your persons," Cayetano said.
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7aa65ae6e12ea8da5e28f41accdb4fbe | https://www.cnbc.com/2017/05/11/trump-denies-any-links-to-russia-no-loans-no-nothing.html | Trump denies any links to Russia: 'No loans, no nothing' | Trump denies any links to Russia: 'No loans, no nothing'
President Donald Trump again firmly denied Thursday that he has any financial links to Russia.
In an exclusive NBC News interview, Trump said he had a private law firm send a letter to Republican Sen. Lindsey Graham of South Carolina asserting that he has "nothing to do with Russia." The president has repeatedly fought the assertion that he or people close to him have ties to the country amid probes into Moscow's interference, reported by U.S. intelligence services, in the 2016 election.
"I have had dealings over the years where I sold a house to a very wealthy Russian many years ago. I had the Miss Universe pageant — which I owned for quite a while — I had it in Moscow a long time ago. But other than that, I have nothing to do with Russia," Trump said.
Trump specifically said he has no investments or loans in or from Russia.
Earlier this week, Graham, who chairs a subcommittee investigating alleged Russian interference, said he was curious to see more about Trump's business ties.
Many Democrats have demanded to see Trump's tax returns so as to better assess his potential financial conflicts of interest around the world. Trump bucked decades of precedent among presidential nominees by not releasing his tax returns as a candidate, ostensibly because he is being audited by the revenue agency.
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d19b057974d3b0d16fc9b533244fa877 | https://www.cnbc.com/2017/05/11/wall-street-is-increasingly-worried-facebook-is-crushing-snapchat.html | After disastrous first report, Wall Street is increasingly worried 'Facebook is crushing Snapchat' | After disastrous first report, Wall Street is increasingly worried 'Facebook is crushing Snapchat'
VIDEO1:4001:40Snap's billion dollar number is 'haunting them': CramerSquawk on the Street
Most of Wall Street took a very cautious stance on Snap as shares of the social network took a beating Thursday after the company's first-quarter results missed estimates across the board.
Even after a drop of more than 20 percent that normally would bring out the value buyers on Wall Street, Snap's ratings list looks decidedly bearish for what's supposed to be a hot new social media stock.
Seventeen percent of analysts still say the name is a sell and 47 percent say it's still just merely a hold, according to FactSet, a rare lukewarm majority on Wall Street after the big morning decline. There's still 36 percent of analysts who call it a buy, according to FactSet.
There were some exceptions. Smaller firms Oppenheimer and Cantor Fitzgerald upgraded the stock but the Cantor move was just from underweight to neutral. Also, two underwriter firms for Snap's IPO, Goldman and Credit Suisse, defended the company as unique and misunderstood.
Most of the notes, however, centered on competition from Facebook taking away Snap's uniqueness.
Barclays' Ross Sandler wrote that the users added last quarter by Snap "were not strong enough to disprove the 'Facebook Is crushing Snapchat' thesis, which we think persists for a while."
Nomura Instinet's Anthony DiClemente reiterated his reduce rating on the stock and lowered his price target to $14 from $16, citing "fierce competition" from Facebook.
Check out a wrap of some of the Wall Street opinions from Wednesday night and Thursday morning, including DiClemente and Sandler:
Ross Sandler, Barclays, rating: equal weight, price target: $18
The 7m DAU net-adds were not strong enough to disprove the "Facebook Is crushing Snapchat" thesis, which we think persists for a while. The problem with such a print right out of the gate is that there is little near-term valuation support given the lack of profitability and massive lock up expiration around the corner (ala TWTR early 2014). We still like the long-term backdrop for snap's innovation and overall potential, and given the sharp pullback, we are getting more interested now [that] the market is starting to discount a lower bar for future execution.
Anthony DiClemente, Nomura Instinet, rating: reduce, price target: $14
It now faces incrementally fierce competition from deeper-pocketed rivals including FB, and continues to trade at a valuation that looks quite lofty to us, even considering yesterday's aftermarket selloff. Some had thought SNAP's initial quarters of monetization would follow more of a benign path given the potential for marketers to put experimental ad budgets to work on an app with a heavily engaged millennial user base, but YoY ad revenue/ARPU growth rates decelerated substantially once again, just as they did in the quarters leading up to the IPO. Revenue growth estimates will come down in our model, and as such, we maintain our Reduce rating and lower our Target Price to $14.
Justin Post, Bank of America Merrill Lynch, rating: neutral, price target: $23:
We are encouraged by early signs of a rebound in Android user growth and growing user time spent, and we think Snap will effectively monetize its user base over the long-run. However, deceleration of user growth, competitive concerns, volatility due to absence of Street expectations management, and lock-up expiration are overhangs that are likely to continue.
Mark May, Citi, rating: buy, price target: $24
We expect pressure on the stock to continue near term as the 1Q17 report did little to address investor concerns over the growth outlook for users. That being said, we remain encouraged by other engagement KPIs, with avg. time spent on Snapchat now over 30 minutes per day (vs. 25-30 minutes previously reported), snaps taken per day growing to 3bn (vs. >2.5bn previously reported), and avg. sessions per day rising in the quarter.
Jason Helfstein, Oppenheimer, rating: buy, price target: $23:
We are establishing a $23 target and upgrading SNAP to Outperform from Perform, after the stock fell 23% in after-hours trading to $17.68, only marginally above the $17 IPO price. … Gross profit and EBITDA were ahead partially on lower cloud costs. Products will continue to be made for universal use, not tailored toward on-boarding older users. Target assumes 16x/12x 2018-19E ad sales vs. FB trading at 8x/6x 2018-19E ad sales.
Lloyd Walmsley, Deutsche Bank, rating: buy, price target: $23
We continue to believe in the management team's ability to innovate on product and ultimately grow and monetize the user base. Given the rich valuation, the company needed to show faster DAU growth to better validate the long-term potential. While nothing in this quarter was thesis changing in our view, each quarter the company fails to surprise with faster DAU growth is likely to result in option value decay.
Brian Fitzgerald, Jefferies, rating: buy, price target: $30:
Engagement continues to increase on the platform with users on average spending 30+minutes/day. Expected seasonality in revenue led to a Q/Q decline in ARPU, but we expect Snap to buck that trend as it has opportunities to increase ad load as well as offer advertisers better targeting capability.
Kip Paulson, Cantor Fitzgerald, rating: neutral, price target: $17:
Although intense competition for users and digital brand dollars from entities such as Facebook, YouTube, and Twitter (particularly Facebook's Instagram) may continue, Snap still has a rich/engaging canvas for brand advertisers that are targeting the hard-to-reach, but highly desirable, 18-34 year-old demo, and valuation has improved post sell-off (relative to growth).
Heath Terry, Goldman Sachs, rating: buy, price target: $27
While SNAP remains a near venture stage investment with all of the risks that implies, we continue to believe its audience and engagement represent a unique asset that will benefit from growth and diversification of internet usage and advertiser adoption as both mature.
Stephen Ju, Credit Suisse, rating: outperform, price target: $30
We expect the positive aspects of SNAP's 1Q17 report (North America monetization, hosting cost leverage) to be overshadowed by the revenue and DAU miss, as this was certainly NOT in the script for its first report as a public company. And although we would certainly have preferred to have seen higher DAUs reported vs. our expectations and a higher reset to BOTH our revenue and Adj. EBITDA estimates, we settle for profit dollars for now, and our long-term investment thesis has not changed on the back of this report.
Disclosure: CNBC parent NBCUniversal is an investor in Snap.
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d42083939e18225a8f86f8a0e6399d5b | https://www.cnbc.com/2017/05/12/president-trump-tells-nbc-news-we-are-a-very-divided-country.html | President Trump tells NBC News: 'We are a very divided country' | President Trump tells NBC News: 'We are a very divided country'
NBC's Lester Holt interviews Donald Trump on May 11, 2017.NBC
President Donald Trump acknowledged that "we have a very divided country" when asked during an exclusive interview with NBC News whether the legitimacy of his presidency was under attack.
But "Republicans are very much behind me," Trump added in a segment of the interview that aired Friday on NBC's "TODAY" show. "I''m helping people today."
He also sought to justify his firing of FBI Director James Comey earlier this week, and he asserted he "has nothing to do with Russia."
During the interview with NBC's Lester Holt, Trump described a moment during the White House celebration last week of the passage of the Republican bill to replace Obamacare. During the Rose Garden event, he recalled, he turned around to a group of Republican members of Congress were standing behind him and seemed to express surprise that he actually was president.
"I think everybody does," Trump said. "I think when you become president it's very special — when you're in the White House it's very special."
"I had all my Republican friends — who have frankly been in politics all their lives and have done a great job. We had congressmen and some senators," Trump said of the event.
"I looked around and said, 'Sorry folks can you believe it's me?'" the president recalled. "And the truth is that — I think that anybody that becomes president of the United States has to every once in a while say that's really amazing, it's an incredible feeling and it's a great feeling."
Trump told Holt in the White House interview that although there is divisiveness in the United States over his presidency, Republicans "love what we're doing on health care."
"Obamacare is dead it's a disaster it's a complete disaster," Trump said.
Trump was asked whether he, his family or associates had investments or loans from Russian individuals or institutions.
"I just sent a letter to [South Carolina Republican] Sen. Lindsey Graham from one of the most prestigious law firms in the country — tremendous, highly rated law firm — that I have nothing to do with Russia. I have no investments in Russia. None whatsoever," Trump told Holt.
Trump's categorical answers come as the FBI and congressional committees investigate his presidential campaign's suspected contacts with Russia.
"I don't have property in Russia. A lot of people thought I owned office buildings in Moscow. I don't have property in Russia. And I'm ... in total compliance in every way," Trump said.
"Now, I have to tell you. I file documents, hundreds of pages worth of documents with the federal elections bureau. Everybody's seen them. I built a great company. But I'm not involved with Russia," Trump said.
"I have had dealings over the years where I sold a house to a very wealthy Russian many years ago. I had the Miss Universe pageant — which I owned for quite a while — I had it in Moscow a long time ago. But other than that I have nothing to do with Russia."
In a portion of the interview released Thursday, Trump called Comey a "showboat," and said there was "no collusion" between his campaign and Russia.
Trump also said he had asked Comey whether he was under investigation for alleged ties to Russia.
"I actually asked him" if I were under investigation, Trump said, noting that he spoke with Comey once over dinner and twice by phone.
"I said, if it's possible would you let me know, am I under investigation? He said, 'You are not under investigation.'"
"I know I'm not under investigation," Trump told Holt.
The president also said he supports a full investigation into suspected Russian interference in the U.S. election last year, saying he wants the probe to be done "absolutely properly."
It would be highly unusual for someone who might be the focus of an FBI probe to ask whether he was under investigation and to be directly told by the FBI director that he was not. Several legal experts told NBC News the president's action was improper.
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6a1d7e010ab1801eb008326ee1333136 | https://www.cnbc.com/2017/05/12/snaps-dismal-dip-since-ipo-isnt-slowing-good-and-bad-tech-ipo-market.html | The IPO market is back, and CNBC Disruptors are poised to take advantage | The IPO market is back, and CNBC Disruptors are poised to take advantage
"We're in the best of all IPO markets. If you're not moving forward, you need to have your head examined."
That's the assessment of Renaissance Capital's Kathleen Smith, who keeps close track of the IPO pipeline and says several 2016 CNBC Disruptor 50 companies could go public by the end of the year.
And the companies on CNBC's Disruptor 50 list are bigger and more mature than ever. Seven have been named to the list for four straight years: Airbnb, Dropbox, Palantir, Pinterest, SpaceX, Spotify and Uber. Combined they're worth more than $120 billion; Uber has the highest valuation, at $68 billion, according to PitchBook.
VIDEO1:3301:33Disruptor all-stars, where are they now? Squawk Box
It's already been a record year for Disruptor 50 IPOs. Four of the 2016 class have gone public since the list came out last year, the most since CNBC started the list in 2013. Three — Snap, Okta and Cloudera — have happened since March 1. The Snap IPO was the biggest tech deal since Facebook. Many say the other — Twilio — opened the window for a new wave of venture-backed companies to IPO. But only Cloudera remains substantially higher than its opening-day price.
More from the CNBC Disruptor 50:SoFi's big stock sale Print your own car, really! Police don't have James Bond cool, but they're getting his gadgets
The overall surge of IPOs is expected to continue, putting 2017 on track for the first annual increase in IPOs in four years. In the first quarter of the year, there were 24 U.S. IPOs, triple the number in the year-ago quarter. And there's already a robust pipeline; 33 new registrants in the quarter, up from 26 in the year-earlier quarter. These IPOs aren't just drawn to the record market; some of them are also being pushed by VCs pulling back and the risk of "down rounds" —investors lowering private-company valuations.
Who's next?
VIDEO1:2301:23Who’s Next? Unicorn Watch Power Lunch
Kathleen Smith thinks Dropbox and Spotify have the best chance of going public by the end of the year. Dropbox has reportedly lined up banks for a possible IPO, and CEO Drew Houston told Bloomberg in April that the company has hit certain revenue and profit milestones that further clear the way for it to go public. Spotify has said it's been exploring an unconventional plan to go public, and CNBC reported Friday morning that it is pursuing a direct listing on the NYSE for 2018, forgoing a traditional IPO. Airbnb, which is reportedly profitable, is expected to go public in 2018. And Lyft may file before its larger rival, Uber, which is facing PR headaches plus a Department of Justice investigation. Lyft also has a partnership with, and investment from, GM to help drive its next leg of growth.
One problem for Disruptor IPOs: Performance
The Renaissance IPO ETF (IPO) that tracks recent IPOs is up 18 percent year-to-date, driven in large part by Shopify, a company from the inaugural 2013 Disruptor 50 list whose stock is up more than 115 percent year-to-date and almost 250 percent over the past 12 months. But Shopify is quite an outlier; the track record of Disruptor 50 IPOs is mixed.
While Snap and Twilio both had big, celebrated IPOs, their stocks have been struggling. Snap soared out of the gate before sinking on concerns about competition from Facebook and then plummeting on a disappointing first earnings report. While Twilio also rallied, nearly doubling on its first day of trading last June, the stock started to drop last fall on concerns about slowing growth. Then it plummeted after its most recent earnings report on news that it's losing a chunk of its business from Uber.
VIDEO1:2501:25Crazy earnings season for past Disruptors Closing Bell
Snap and Twilio's dramatic drop in earnings speak to the pressure that Disruptors are under to keep innovating, and to avoid being squashed by the companies they originally aimed to challenge. Snap is a perfect example: Its service threatened to disrupt ad giants such as Facebook, stealing their user base and ad dollars. Now investors are worried about the impact of Facebook copying its most popular features. And Etsy's suffering from a failure to keep innovating this quarter, resulting in the ousting of its CEO.
Two surprise success stories this quarter came from the founder and CEO of two Disruptor 50 companies — Jack Dorsey. Despite concerns that Twitter was stagnating beside its innovative social media rivals, Twitter beat expectations on both revenue and earnings and re-accelerated user growth. And Square showed its scope as a disruptor: successfully diversifying its revenue streams, with broader geographic reach, and the growth of its banking and loan service.
Okta and Cloudera, which went public with far less fanfare last year, have done the best of recent IPOs — Cloudera is 10 percent above its opening-day price, and Okta is flat. But neither has released their first quarterly earnings yet.
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2273ca97828ec801882e094160253ff7 | https://www.cnbc.com/2017/05/12/wells-fargo-fake-account-scandal-may-be-bigger-than-thought.html | Wells Fargo fake account scandal may be bigger than thought | Wells Fargo fake account scandal may be bigger than thought
VIDEO1:2601:26Lawyers seek to expand Wells Fargo fake account investigationClosing Bell
Attorneys for alleged victims of the Wells Fargo fake account scandal are now saying that the bank may have been responsible for more unauthorized accounts than previously thought.
In a legal filing, plaintiffs' attorneys in a class-action lawsuit say: "Based on public information, negotiations, and confirmatory discovery, the parties estimate the number of unauthorized accounts for the period 2002-2017 is approximately 3.5 million. This number may well be over-inclusive, but provides a reasonable basis on which to estimate a maximum recovery."
It's important to note that based on the results of the independent board review of the scandal, former CEO John Stumpf was not made aware of the systemic nature of the bank's sales practice problems until 2012, but was first aware of specific cases as early as 2002.
"The unauthorized account number reported in yesterday's filing are estimates made by the plaintiff attorneys based on a hypothetical scenario and have not been verified," Wells Fargo representative Ancel Martinez said in a statement. "The number of unauthorized accounts estimated in the filing do not reflect actual unauthorized accounts."
Wells Fargo disclosed it entered into a settlement agreement in April 2017 in the company's most recent 10-Q. The bank disclosed it planned to pay $142 million for remediation, attorneys' fees and settlement fund claims administration. It also noted that the settlement was still subject to approval by the District Court.
The case is being handled in the U.S. District Court, Northern District of California, in San Francisco.
Watch: Buffett says Wells Fargo obviously incentivized the wrong thing
VIDEO4:3504:35Buffett: Wells Fargo obviously incentivized the wrong thingIconic Tour
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664742f40a9a7293ae59f92e368f8772 | https://www.cnbc.com/2017/05/13/what-your-wife-says-about-you-on-social-media-may-not-be-what-she-thinks-ex-googler-warns.html | What your wife says about you on social media may not be what she thinks, ex-Googler warns | What your wife says about you on social media may not be what she thinks, ex-Googler warns
VIDEO3:4003:40What your Google searches says about you: AuthorSquawk Box
Want to really get to know someone? Well, you may not find the real answers on their social media accounts, ex-Google data scientist Seth Stephens-Davidowitz told CNBC on Friday.
In an interview on "Squawk Box," Stephens-Davidowitz, who left Google after spending the last five years studying aggregate search data, said people search Google for things they might not divulge to anyone else.
"People are constantly lying. They lie to friends, family members, to surveys, to social media, even to themselves. But they tend to be really honest with Google," said Stephens-Davidowitz, author of "Everybody Lies: Big Data, New Data, and What the Internet Reveals About Who We Really Are."
Stephens-Davidowitz, who calls Google "digital truth serum," said people's search histories reveal some pretty bizarre and disturbing things. He said people living in areas you wouldn't expect to have high levels of racism often search for racist content. People also search about anxieties and insecurities that they wouldn't post about in real life or on social media.
In the book, Stephens-Davidowitz said sometimes the findings are amusing. For example, wives on social media may call their husbands "amazing," "the best" or "so cute." On Google, however, they might search "a jerk" or "annoying."
The data from Google could present a potential gold mine for marketers and business leaders who rely on using real data from people. Stephens-Davidowitz recommends those businesses use Google Trends, which he says is an underused source.
Stephens-Davidowitz said all the data researched is anonymous and is pretty safe from a privacy perspective. But he warned about hacks to personal accounts that could reveal such data.
"If someone hacked my account, I'm screwed. We're all screwed," he said.
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e2762aeda10ea84504214f464414255f | https://www.cnbc.com/2017/05/14/germany-will-not-rush-into-fiscal-union-in-the-euro-zone.html | Op-Ed: Germany will not rush into euro area fiscal union | Op-Ed: Germany will not rush into euro area fiscal union
Hannelore Foerster | Getty Images
There was a time, not so long ago, when the German Green Party, governing with Social Democratic Party (SDP), was forcefully advocating a federal EU government to preserve and advance the European project of a political, social, economic and monetary union.
More recently, Martin Schultz, the man leading the SPD in the general elections next September, is championing the same idea – with the fiscal union at its core.
The Greens lost power in 2005, and a German commentator quipped last week that Schultz "will get his bill for federalist ideas in the fall," anticipating that SDP will be trounced by the center-right Christian Democrats in the forthcoming elections.
Interestingly, calls for the federal Europe tend to be revived at times of crisis. In the aftermath of the last financial debacle earlier this decade, Germany's hard-put euro area partners pleaded for solidarity – a short-hand for issuing euro area bonds to finance their deficit- and recession-ridden economies. Germany refused, arguing that the euro area was not a federal state with a unified fiscal policy.
Don't blame the "populists"
As a result, the only thing Berlin offered was a devastating pro-cyclical fiscal austerity in countries already sinking into recessions, with soaring unemployment, poverty, Caritas soup kitchens, falling governments and changing political leaderships, with more than 120 million Europeans experiencing various forms of marginalization and economic precarity.
The ensuing social, economic and political problems have become the sources of "populism," "nationalism," EU exits and people's alienation from their once cherished dreams of peace, prosperity and brotherhood symbolized by the EU anthem of Beethoven's Ninth Symphony "Ode to Joy."
Now what? "More Europe" say those who believe that problems were caused by an inadequate integration process that allowed policy mistakes by incompetent national governments. To avoid similar mistakes in the future, they are now urging a unified fiscal policy to complete the monetary union.
That is what the French call the "fuite en avant" – a semiotic delight roughly translated as fleeing from an unsolvable problem.
Here is what that problem looks like: The fiscal union implies a euro area federal state with a common management of public finances. The area's budget, public debt financing, tax policies, transfer payments, etc. would be managed by a euro area finance ministry. That would also require harmonization of labor, health care and education policies, and a whole range of other social welfare programs.
Institutionally, this integration drive cannot stop at the finance ministry. There would also have to be a euro area executive and legislative authority to exercise administrative and democratic controls over tax and spend decisions.
If you think that this is "mission impossible," here is an even harder part to the story.
Shall we dream?
How could Germany, with a budget surplus last year of 0.8 percent of GDP and the public debt of 68.3 percent of GDP, accept a fiscal union with Spain running the euro area's largest budget deficit of 4.5 percent of GDP and a public debt of 100 percent of GDP?
France and Italy have similar public finance profiles. Last year, France had a second-largest euro area budget deficit of 3.4 percent of GDP and a public debt of 96 percent of GDP. During the same period, Italy ran a budget deficit of 2.4 percent of GDP and a public debt of 133 percent of GDP.
This means that half of the euro area economy (France, Italy and Spain), with serious structural problems of public finances, would become part of a de-facto federal state with a fiscally sound Germany.
Hard to imagine, isn't it? And yet, that's the program that the new French President Emmanuel Macron will apparently discuss tomorrow (Monday, May 15) when he visits the German Chancellor Angela Merkel in Berlin.
Chancellor Angela Merkel speaks with President Barack Obama outside the Elmau castle in Kruen near Garmisch-Partenkirchen, Germany.Michael Kappeler | Reuters
France, Italy and Spain already know the answer. Chancellor Merkel is relieved and delighted that the most dangerous anti-EU parties in France and The Netherlands lost the recent elections, but her government is firmly opposed to the euro area fiscal union.
The German public opinion fully shares that position. And the German media of all political stripes are having a field day lampooning the idea that German taxpayers should be asked to pay for countries that cannot control their debts and deficits.
This is also an awkward moment to even talk about the call on the German public purse while the country is gearing up for general elections on Sept. 24, 2017.
The best that Germany can offer, under these circumstances, is a strict enforcement of existing euro area fiscal rules: Budget deficits limited to 3 percent of GDP and the gross public debt to 60 percent of GDP. About half of the euro area members are now falling far short of these criteria.
I believe that is what Germany will do. After the elections -- which will most probably leave the center-right Christian Democrats in charge of a new governing coalition -- Germany will also insist on further budget deficit cuts and declining public debt in the euro area by stepping up the supervisory pressures through the EU Commission.
Investment thoughts
But Germany will be under pressure, too. Advocates of "more Europe" will demand an irreversible march (no pun intended) toward a euro area federal state. They consider that the monetary union should serve as a "hard core," "avant garde" and an unassailable rampart to protect from "vulgar anti-European populist hordes."
I believe these people are wrong, dead wrong. They are just showing a total disconnect between EU elites and the people they are supposed to serve. They don't understand that economically unsound and mismanaged integration projects will fall apart, leaving them as an easy prey to "populist hordes" they abhor. And I wonder how these integrationists-at-all-costs can realize that jobs, incomes and people's welfare should be the litmus test of any further measures of shared sovereignty.
Germany, in particular, would do well to heed this warning from Jürgen Habermas, one of its most distinguished contemporary philosophers: "Germany is dozing on a volcano." And more explicitly: "Germany is risking a historic failure with its shortsighted wrangling."
Investors will be reminded of this as they see the "wrangling" unfold in the months ahead, because Chancellor Merkel has to win her re-election next September.
Meanwhile, the euro area fiscal union should not be investors' main concern. They should watch instead the progress toward the convergence – if any -- to euro area's existing fiscal rules.
That convergence would imply a significant degree of fiscal restraint, which should be offset by an appropriately easy monetary stance.
If implemented, such a policy mix could support the euro area's moderate growth dynamics in an environment of low cost and price pressures, increasing corporate profits and sustained asset valuations.
For more insight from CNBC, follow @CNBCopinion on Twitter.
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8076cacae7593a234a2295d6ef73547a | https://www.cnbc.com/2017/05/14/sinopec-expects-to-double-foreign-investment-to-more-than-30-billion.html | Sinopec expects to double foreign investment to more than $30 billion | Sinopec expects to double foreign investment to more than $30 billion
China's giant state-owned oil and gas firm Sinopec is planning to splash big money into a continued expansion abroad to shore up access to energy resources as Beijing touts its main foreign policy initiative.
Sinopec expects to boost foreign investment to more than $30 billion, Dai Liqi, director of the firm's foreign cooperation office, told CNBC. That could mean double the $16 billion the firm spent between 2010 and 2015 in outward investment targeted in 30 countries, where the firm has 50 different projects. Dai, however, didn't specify the time frame for the increased investment.
China Petroleum & Chemical Corp. (Sinopec) signage is displayed on one of the company's storage tanks in the Tsing Yi area of Hong Kong, China, on Monday, Aug. 26, 2013.Jerome Favre | Bloomberg | Getty Images
The company's push falls under a broader Chinese government initiative, dubbed "One Belt, One Road," a giant plan to strengthen China's investment, influence and trade links to the rest of the world. It's meant to increase the country's global clout, to help China shore up access to energy resources and to seek growth abroad as the domestic economy slows.
Both state-owned and private firms are applauding the initiative — a government-approved line of spending that could help companies circumvent tighter capital controls that have curbed overseas investment recently.
"We think this policy is very good — we have enjoyed the benefits of China opening up over time," Dai said. "For Sinopec, this presents us favorable opportunities."
Sinopec has the money for continued overseas investment — the company's balance sheet remains robust with 135 billion yuan (about $19.56 billion) in cash, wrote Alliance Bernstein's Neil Beveridge in a recent note. Last year, the firm sunk $1 billion to buy Chevron's assets in south Africa.
China has been importing energy resources for decades to meet growing demand. As such, the government has long encouraged energy firms to acquire overseas assets.
"We are still quite poor in domestic resources … in Chongqing, we have discovered this new shale gas resource," Dai said, adding that "it's still not enough to meet our needs and we have to furnish resources from abroad."
One of Sinopec's largest foreign investments came in 2013, when it bought one-third of U.S. firm Apache's Egypt business for around $3 billion. At the time, a coup had recently toppled the democratically elected president and sparked deadly protests.
Despite the unrest, Sinopec was quick to snap up a stake in Egypt's "valuable" assets, Shao Jingyang, Sinopec's general manager in Egypt, told CNBC. "We were very confident … and determined to make the decision."
Critics of OBOR have said that Chinese companies don't have the know-how to manage operations in areas where stability and security can pose a risk.
Sinopec, Dai said, recognizes the challenges and has worked to "teach and train our own people to adapt to different countries, cultures and languages."
"Managing international expansion operations will create different interim issues," he said. "You have to understand the situation where you are going, you have to adapt to the local environment, and you have to assess the risks of investing there."
The country touts its Egypt venture as a success. Even as oil prices have fallen globally, Sinopec said it has maintained its momentum, producing 350,000 barrels of oil a day in Egypt, turning a profit of $620 million.
The firm has reinvested about $1 billion in Egypt over the last three years with an eye to long-term growth, and is currently in discussions to invest billions to help develop a petrochemical refinery complex south of the Suez Canal. "We see a bright future here," Shao said. "We want to make full-spectrum cooperation with Egypt."
But a big challenge is "past due receivables," he said. Experts have continually highlighted risks if countries are unable to pay back China.
Shao suggested the issue could be eased if more transactions settled in Chinese renminbi, adding another possible currency to the pool to handle payments.
The Chinese government has been keen to globalize the renminbi — it's acceptance last year into the International Monetary Fund's special basket of currencies was a symbolic move in that direction.
In the long run, the "One Belt, One Road" initiative "could boost internationalization of the renminbi by encouraging its use in both trade and financial transactions," wrote Tianjie He of Oxford Economics in a recent note.
In January 2016, Chinese President Xi Jinping announced billions in investment and aid deals during a trip to Egypt, the first by a Chinese head of state in a dozen years, state media reported.
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4c1aba4a60b9c88bda6e36de2815be4c | https://www.cnbc.com/2017/05/15/china-data-sparks-concerns-of-a-consumer-led-slowdown-in-worlds-second-largest-economy.html | China data sparks concerns of a consumer-led slowdown in world's second-largest economy | China data sparks concerns of a consumer-led slowdown in world's second-largest economy
VIDEO4:2304:23Concerns over whether One Belt, One Road will be a success in the long runSquawk Box Europe
Benchmark equity indices in mainland China and Hong Kong closed higher on Monday as resurgent hopes for a significant public stimulus boost captured investors' attention more than did the release of a batch of poor activity and spending data.
Weakness was evident nearly across the board and continued a trend of disappointing news from the world's second-largest economy in recent months.
Industrial production expanded by an annual 6.5 percent in April, dropping from 7.6 percent in March and falling notably short of expectations while fixed investment data suggested a slowdown to 8.3 percent in April from 9.4 percent the previous month. Retail sales and fixed asset investment also underperformed forecasts.
"This slowdown as a result of weakening demand is also reflected in the prices of key industrial commodities like iron ore," said Sebastian Lewis, content director for Greater China at S&P Global Platts in an email to CNBC on Monday, pointing out that the price of iron ore had dropped 30 percent since February alone.
Partially offsetting the weakness, record steel output implied a positive read-through for construction while property development activity registered higher investment figures.
A Chinese flag flies in front of cranes at a construction site in the Fun City apartment complex, developed by China Vanke Co., in the Fangshan district of Beijing, China.Tomohiro Ohsumi | Bloomberg | Getty Images
In sum, slowing domestic consumption growth and softer external demand appear to have driven the slowdown from the start of this quarter, said Julian Evans-Pritchard, China economist at Capital Economics, in a note to clients on Monday.
"For now at least, infrastructure and property investment are holding up, helping to stave off a sharper deceleration," Evans-Pritchard explained.
"But we doubt the current strength in these areas can be sustained given that policy is being tightened and the property market is starting to cool," he added ominously.
Chinese authorities have recently doubled down on efforts to rein in debt and prevent potential asset bubbles in areas such as property. Effects have been clearly seen in the short-term debt market where yields on five-year government bonds last week hit a two and a half year high, closing above those on 10-year bonds in a rarely seen example of yield curve inversion between the securities, as regulators focus on discouraging the use of borrowed money to buy government debt.
VIDEO2:5402:54OBOR a boost to global growth?Squawk Box Asia
'New Silk road'
Yet recent credit data suggests such attempts have not been particularly successful to date, argued Emily Nicol, economist at Daiwa Capital Markets in a note on Monday.
"With credit data released Friday significantly stronger than expected despite the authorities' efforts to curb leverage, it remains to be seen whether the weakening in the indicators of new business in the April manufacturing and services sector surveys will indeed manifest themselves in an ongoing slowdown in activity over coming months," Nicol highlighted.
The data releases came against the backdrop of a summit in Beijing in honour of President Xi Jinping's "Belt and Road Initiative" which China's official news agency Xinhua describes as "a Chinese solution to global economic blues".
President Xi's pledge of $124 billion on Sunday to go towards expanding links along his hoped-for "new Silk road" between Asia, Africa and Europe, helped investors look past the flagging data indications to drive the Shanghai Composite to close 0.22 percent higher and the CSI 300 up 0.41 percent on Monday.
"We have very positive thinking on the Belt and Road initiative", Jyrki Katainen, vice-president of the European Commission, told CNBC at the conference on Monday.
"It aims to deepen economic ties and trade links between Europe and China and it focuses not only on infrastructure but also on wider issues. In our agenda, trade policy, especially investment agreements, is most important as it would strengthen connectivity between the European economy, European companies and China," he explained, adding data protection and infrastructure projects were also key elements of the strategy.
However, the proof of the initiative's success will be in the pudding, Katainen cautioned.
"Everything depends on the implementation."
Follow CNBC International on Twitter and Facebook.
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e8c4c03837a2a196bff613fe032e2534 | https://www.cnbc.com/2017/05/15/its-been-a-fantastic-voyage-to-31-billion-what-airbnbs-next-big-trip-isnt-booked.html | It's been a trip to $31 billion. Now Airbnb wants to remake the entire travel industry | It's been a trip to $31 billion. Now Airbnb wants to remake the entire travel industry
VIDEO5:5305:53This company takes #1 spot on CNBC's Disruptor 50 listSquawk Alley
Airbnb is unusual among privately held start-ups in that it's already profitable.
The No. 1 company on the 2017 CNBC Disruptor 50 list has reportedly said it can reach $3 billion in profit by 2020. It was valued at $31 billion last year, meaning that only Marriott's $39 billion valuation is greater in the lodging industry.
But after forcing the biggest changes in travel since Priceline and Expedia, it's running out of easy room to grow against the lodging companies. To keep up its rapid growth, Airbnb needs to upend the entire travel experience.
Airbnb's recent $1 billion round of financing was huge, but also showed its lowest valuation step-up — a measure of valuation increase from financing round to round — in the history of the company. In its 2014 Series D, Airbnb's valuation increased at almost three times the rate of the median start-up at that stage. In its first quarter 2017 Series F, Airbnb's valuation increase was barely above the median rate, according to data from venture capital research firm PitchBook.
Dan Cook, a PitchBook senior analyst, said when growth stops accelerating and begins to level off, it's harder to maintain huge valuation step-ups.
"Airbnb supply is still growing aggressively, and there is a lot more demand today, but [hotel investors] were more freaked out in 2014 and 2015," said Jared Shojaian, leisure, gaming and lodging analyst at Wolfe Research.
Brian Chesky, co-founder and CEO of AirbnbRex Features | AP Images
"They are not Amazon to retail," Shojaian said. "It won't destroy the hotel industry. Maybe hotels can't drive the same type of rate growth that they have had historically because of this new competitor, but who knows how big it will continue to get," he said.
That's why Airbnb CEO and co-founder Brian Chesky recently told Fortune magazine that its core Homes business will account for less than half of Airbnb's revenue someday. He also said that by 2021 the majority of Airbnb's offerings "will be the new things that we are doing as of 2017 on."
Airbnb has hinted since last November about taking its travel touch to the online flight-booking space. That would put Airbnb in direct competition with Expedia and Priceline Group, the two largest players in the traditional online travel agency industry, where overall bookings grew 10 percent last year, to $62.5 billion, according to research firm Phocuswright.
Meet the 2017 CNBC Disruptor 50 companies
In a March appearance at Oxford Union, Chesky said he wants Airbnb "to one day redefine how we fly." Then he added, "The funny thing about flying is, no matter how successful you are in life, you are reminded how much of a mere mortal you are, [so] that's another area we really want to invest in."
The flight-booking space is tough, with lower margins than hotel and car rentals, and airlines tightly controlling inventory. But it could be a natural stepping stone to the greater online travel agency market, where Airbnb can try to preserve its incredibly fast growth story as it pursues an eventual IPO.
"In the flight-booking area in general, the obvious [thing missing] is also one that plagues hotels, which is, everything is the same; there is no differentiator," said Douglas Quinby, senior vice president of research at Phocuswright. "The airlines have tried hard to differentiate by adding different types of fare bundles or services, but right now the shopping experience across airlines is commoditized and price-driven."
Big online travel agencies are moving in on Airbnb's turf as well. In the most recent quarter, Priceline's Booking.com offered roughly 650,000 "alternative lodging" properties — many which include multiple listings — an increase of more than 50 percent from a year before. Priceline's valuation of $89 billion is bigger than both Marriott and Airbnb combined.
Expedia said its alternative lodging subsidiary, HomeAway, experienced 30 percent growth in the most recent quarter. It has 1.4 million listings.
More from CNBC Disruptor 50:How Lyft is outmaneuvering Uber in the heated ridesharing spaceWhy Warren Buffett is betting on this software start-upSnap out of it! This is 'the best of all IPO markets'
Airbnb is considering different options for breaking into the market, including acquiring an online travel agency.
"They bring their massive base of users to the arena — that's big," said Dennis Schaal, executive editor of Skift, an online hub for travel news and research. "They could bring a local flavor to flights, combining them with a stay at an Airbnb, but the flight business is hard. You have to build a customer service department, deal with canceled flights and rebooking passengers. Does Airbnb really want to get into that? It'll take their focus off their core business as well."
Airbnb is also tapping into the idea that travelers want a more unique experience than hopping a tour bus to the Eiffel Tower. Under its new Trips platform, Airbnb launched its Experiences initiative last year in 12 cities, allowing guests to take part in unusual events.
For instance, visitors to Miami can spend $120 to spend four hours learning about leatherworking, which includes lunch, wine and a hands-on workshop on stitching and soldering. Airbnb takes a 20 percent commission on each Experience.
While Experiences marks an easy extension of Airbnb's travel-like-a-local brand, analysts are unsure of how it can scale to ever become more than a single-digit share of the company's business.
Early indicators are that this could even surpass our Homes business. We're growing much faster than we did at a comparable point in the early days of Homes.Andrea La MesaAirbnb's director of Trips
"There is definitely a market for this authentic, local experience, but a fundamental problem is scaling this thing," said Phocuswright's Quinby.
"If I have a home, it's always there and I can rent it out, but if I'm a professional photographer and I want to make some extra money doing a photography tour of L.A., I have to take time out to do it; I can only scale so much unless I build a business or hire other photographers," Quinby said.
He added, "Once I start doing that, I'm no longer a peer-to-peer experience. I've become a tour company."
Diners in front of a shark tank at the Aquarium de Paris, booked through Airbnb in April 2016 in Paris.Chesnot | Getty Images
"Eight in 10 millennials say the best way to learn about a place is to live like the locals do, so we know there's a healthy market for these types of local-led immersions," said Andrea La Mesa, Airbnb's director of Trips. "Early indicators are that this could even surpass our Homes business. We're growing much faster than we did at a comparable point in the early days of Homes," La Mesa said.
Airbnb says 6,000 people have completed Experience submissions (40,000 have started the process). More than 800 hosts have met Airbnb requirements for the service, and the platform now has over 1,100 active Experiences available to book in 24 cities. More than half of the Experiences are under $200; the typical price paid for an Experience so far has been $91 per person.
The hotel industry, with its millions of physical properties around the world, hasn't been as nimble as Airbnb to adapting to the millennial crowd. But it has played a good game of catch-up.
As an example, John Hach, senior industry analyst at TravelClick, pointed to Marriott placing timeshare units — a better match for Airbnb listings than hotel rooms — into its general inventory in markets like Orlando. "Hotels have done creative things," he said.
Morgan Housel, a partner at Collaborative Fund, which has invested in sharing-economy start-ups like Kickstarter and Lyft (but not Airbnb), said that "2016 was a great year for traditional hotels in terms of revenue per room, so much of their response is likely looking at what can happen in five to 10 years."
He added, "When you have something like Airbnb that has grown as quickly as it has, if you're a senior manager of a global hotel brand, you have to be looking at it, saying, 'What can I copy from these models and trends before [an Airbnb] catches up to us one way or another?'"
A Moxy brand sample hotel room is housed in a shipping container as part of the Innovation Lab at the Marriott International headquarters in Bethesda, Maryland.T.J. Kirkpatrick | Bloomberg | Getty Images
Marriott's Moxy Hotels, launched in 2014, is a line of seven mid-priced urban hotels in Europe and the United States, with open-plan communal spaces (think game rooms and a bar that doubles as the check-in counter), internet TV and mobile device to TV in-room streaming. The brand will open 13 more locations this year.
Hilton is debuting its new midscale-priced brand (Tru by Hilton) this year — a modernly-designed chain with more than 300 locations in the works aimed at budget-conscious millennials. Tru follows the recent launch of Curio Collection, a Hilton concept aimed at the other end — boutique hotels around the world targeting upscale travelers that provide ties to local hot spots.
The Darcy Washington, D.C., offers a pop-up version of a well-known D.C. flower purveyor, a cocktail cart and mixologist that guests can order to their room, and a service that provides ties, cuff links and other accessories for guests to borrow.
French multinational AccorHotels became one of the first big hotel firms to buy into a home-sharing start-up last year when it took a minority stake in Oasis, which facilitates the renting of fully-vetted upscale homes, along with an in-person concierge. Parker Stanberry started the firm in 2009 as a New York expat in Buenos Aires because he wanted better access to local amenities — like a good Spanish tutor.
Hotels have also proved resilient at keeping market share and sales, even in the face of competition from Airbnb, although they're probably facing price pressure.
"If you're able to charge two times the prevailing ADR [average daily rate] during a high-compression period, who's to say you couldn't charge 3 times were it not for Airbnb?" said Richard Hightower, head of real estate research at Evercore ISI.
Hotels' growth is also slowing. A TravelClick measure of hotel bookings shows deceleration continuing into the first quarter of 2018, and Airbnb is among the drivers of that trend.
But its success, according to analysts, has been mostly limited to leisure travelers, the biggest markets in the United States, and around major events. Airbnb has yet to make any real impact on the business travel market.
A recent report from research firm STR shows that from July 2015 to July 2016, Airbnb's share of market demand and revenues in the $199 billion industry was 4 percent and 3 percent, respectively. And while Airbnb's listings outnumber by three units to one the inventory of the world's largest hotel company, Marriott International, about 2 million Airbnb units aren't exactly comparable: shared spaces, "the yurts, boats and igloos — if you take those units out that aren't necessarily everyone's cup of tea, you get a slightly different count," said Jan Freitag, STR's senior vice president of lodging insights.
Analysts do expect it to make further gains across the United States as brand awareness grows — Google search traffic for Airbnb hit an all-time high in April. And even as growth in Airbnb's core vertical slows, analysts pointed to one qualitative sign that may say the most about Airbnb's upending of the hotel industry as it begins a major push into other sectors of the travel industry: the unexpected alliances that Airbnb has forced the hotel giants to seek.
"I can't think of another issue where you have large corporations (and their corresponding industry lobby) sitting on the same side of the table as labor unions and affordable housing advocates," said Evercore's Hightower.
— By Maggie Overfelt, special to CNBC.com
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1309a840fc99e55a8e04f63393a8d8db | https://www.cnbc.com/2017/05/15/singapore-sovereign-fund-gic-pares-ubs-stake-at-a-loss.html | Singapore sovereign fund GIC pares UBS stake at a loss | Singapore sovereign fund GIC pares UBS stake at a loss
Singapore sovereign wealth fund GIC Pvt. Ltd., which invested in UBS to support it during the 2008-09 global financial crisis, said it has cut its stake in the Swiss bank at a loss, partly because of changes in the lender's strategy and business.
GIC, which manages more than $100 billion globally, said it has reduced its stake to 2.7 percent from 5.1 percent.
"GIC made the UBS sale despite the loss because conditions have changed fundamentally since GIC invested in UBS in February 2008, as have UBS' strategy and business," Lim Chow Kiat, chief executive of GIC, said in a statement issued on Monday.
"It makes sense now for GIC to reduce its ownership of UBS and to redeploy these resources elsewhere," he said.
The fund said, however, that its investment in U.S. bank Citigroup Inc., also made at the height of the global financial crisis, was in the black and that combined returns for UBS and Citi were positive in "mark-to-market terms."
GIC measures its performance on an overall portfolio basis, based on long term rather than annual returns.
GIC is keeping its profitable investment in Citi.
The logo for the Government Of Singapore Investment Corporation (GIC) is pictured in the company headquarters in SingaporeMunshi Ahmed | Bloomberg | Getty Images
"We remain a shareholder of Citibank. As with all our investments, we continue to manage our position based on our assessment of the fair value of Citigroup and other investment opportunities," a GIC spokeswoman said in an email to Reuters on Tuesday.
The sovereign fund had reduced its stake in Citi to under 5 percent in 2009 from over 9 percent, but didn't disclose subsequent holdings.
Reuters data on Monday showed GIC was not listed as among the top 50 Citi shareholders
UBS, the world's biggest wealth manager, said separately on Monday GIC intended to place up to 93 million existing shares in UBS Group through a sale to institutional investors.
Shares of the Swiss bank closed 1.3 percent lower at 16.61 Swiss francs after the news, which unusually came during trading hours.
At the closing price, 93 million shares would be worth 1.54 billion Swiss francs ($1.55 billion).
GIC, owned by the government of Singapore, was one of the first sovereign funds to pump billions into Western banks, which were rocked by the financial crisis and suffered deep losses.
Singapore took a 9 percent stake in UBS in 2007 via an emergency capital injection when UBS unveiled $10 billion worth of subprime writedowns. UBS said at that time that GIC would invest 11 billion francs.
The sovereign fund converted its 11 billion franc investment in UBS notes into shares in 2010.
Lee Kuan Yew, Singapore's first prime minister, who ruled the city-state for three decades and was formerly the chairman of GIC, said in 2009 that the sovereign fund had invested "too early" in global banks such as Citigroup and UBS. Lee died in 2015.
UBS's website listing of major shareholders said that Singapore as the owner of GIC had held a stake of 7.07 percent as of December 2014.
GIC Private Limited and its associates have agreed to a 90-day lockup period for the remaining UBS shares, UBS said.
UBS Investment Bank is acting as placement agent on the sale.
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70583243bbc781d43743c5bff9ee04e5 | https://www.cnbc.com/2017/05/15/snap-hires-hussein-mehanna-machine-learning-star-from-facebook.html | Snap poaches machine learning star from Facebook | Snap poaches machine learning star from Facebook
VIDEO0:3600:36Snap snaps up one of Facebook's starsNews Videos
Snap has hired one of Facebook's machine learning stars. The move comes as Snap staffs up its research and development division while it deals with Facebook copying some of its features.
Last month Hussein Mehanna joined Snap as a director of engineering. At Facebook he had been engineering director of the core machine learning group inside Facebook's applied machine learning organization, which in turn works with the company's highly regarded artificial intelligence research group.
Mehanna joined Facebook in 2012, before the company made a major commitment to AI by hiring Yann LeCun, a luminary in the field. Since then Alphabet, Apple, Amazon and Microsoft have brought on more AI talent right alongside Facebook.
VIDEO0:4700:47Mark Cuban: I was tempted to buy Snap sharesFast Money
At Facebook, Mehanna's team built software for making sense of users' text and a system for running employees' machine learning workloads.
Snap launched its own research group in 2015. The head of the group, Jia Li, left and joined Alphabet in November. Her successor, David Salesin, joined in February from Adobe Research, where he led the creative technologies lab, and was followed by colleague Joel Brandt.
In the first quarter, Snap's research and development expenses ballooned, costing the company $805 million, up from $28 million a year earlier, primarily because stock awards associated with the company's successful IPO were paid out.
But Snap added "the increase was also driven by an increase in research and development headcount of approximately 260 percent." In recent months Facebook has brought Snapchat-like camera and video features to its Instagram, Messenger and WhatsApp.
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03c9f657ae6512d96d751c88763dfdf8 | https://www.cnbc.com/2017/05/16/a-pair-of-diamond-earrings-sell-for-57-point-4-million-at-auction-setting-record.html | A pair of diamond earrings sell for $57.4 million at auction, setting record | A pair of diamond earrings sell for $57.4 million at auction, setting record
VIDEO2:0802:08The allure of colored diamond earrings Street Signs Europe
A pair of fancy colored diamond earrings sold for a whopping $57.4 million at auction Tuesday, setting a new record.
The pear-shaped earrings were being auctioned separately by Sotheby's, however, they were sold to a single, anonymous buyer.
The buyer snatched up "The Apollo Blue" earring for $42.1 million, and "The Artemis Pink" diamond for $15.3 million. Combined, the pair set a record for the most expensive earrings ever sold at auction.
The prior record was held by the Miroir de l'Amour earrings sold by Christie's last year for $17.6 million.
The Apollo stone is a 14.54-carat blue diamond, while the nearly identical Artemis stone is a 16-carat pink diamond.
The auction house had estimated that the pink diamond would sell for between $12.5 million and $18 million, while the blue stone would go for between $38 million and $50 million.
Sotheby's said demand for colored diamonds remains strong. This spring the auction house broke the world record for the most expensive diamond ever sold at auction with the $71.2 million sale of the "Pink Star" diamond.
"In the last five to 10 years, the price seems to be escalating rapidly. And we just sold this world record stone, and that was a pink diamond," said David Bennett, worldwide chairman of Sotheby's International Jewellery division, ahead of the auction. "Certainly people who own important colored diamonds are aware that the market is strong."
For more record-breaking rocks, check out CNBC's "Secret Lives of the Super Rich."
—CNBC's Louise Connelly contributed to this report.
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957cbb8a86ecf0bcb5c4b6901af0c062 | https://www.cnbc.com/2017/05/16/spotting-the-next-facebook-how-we-picked-the-2017-cnbc-disruptor-50.html | Spotting the next Facebook: How we picked the 2017 CNBC Disruptor 50 | Spotting the next Facebook: How we picked the 2017 CNBC Disruptor 50
It's not easy trying to find the next high flier about to revolutionize an industry and, in the process, disrupt the status quo. Most investors would love to find these hidden jewels that are often privy to venture capitalists and Silicon Valley insiders. That's because these private companies tend to run on rocket fuel. They find a lucrative niche overlooked by corporate titans and exploit it with new products or services that often wow the masses.
Meet the 2017 CNBC Disruptor 50 companies
CNBC's fifth annual Disruptor 50 list exemplifies the trend. Thirty-one companies are unicorns — with valuations of $1 billion or more — growing at unprecedented rates. The CNBC Disruptor 50 companies have raised nearly $44 billion in venture capital at a combined implied valuation of $239 billion, according to PitchBook. And they represent breakthrough ideas in a wide swath of industries — from biotech and medicine to retail and transportation.
VIDEO3:3203:32Who made the 2017 Disruptor 50 list?Squawk Box
Topping the list is Airbnb, the home-sharing giant that is active in 63,000 cities and 191 countries. In nine years since its founding, the company has raised $4.4 billion in venture capital from such investors as Andreessen Horowitz and Sequoia, pushing its market valuation to $31 billion. It is followed by Lyft (No. 2 Disruptor) and WeWork (No. 3 Disruptor).
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So what methodology is used to to choose which companies make the cut? Companies nominated were scored across a wide range of quantitative metrics, including amount of venture capital raised, off-the-record information on sales and user growth, along with a holistic qualitative assessment by CNBC editorial staff and an advisory council of 39 leading thinkers in the field of innovation and entrepreneurship from such institutions as Babson College, MIT and Stanford.
Facebook founder and CEO Mark Zuckerberg walks onto the stage prior to his keynote conference during the first day of the Mobile World Congress in Barcelona.Getty Images
The quantitative criteria were ranked by their ability to disrupt established industries and public companies. This year the council found that scalability and user growth were the most important criteria, and these categories received the highest weighting.
The quantitative information was supplemented with data from our partners: Pitchbook provided data on funding and valuations; IBIS World analyzed industry disruption; MCAM evaluated companies' ability to protect their proprietary technology.
The result is a diverse list of notables, many of which already have strong global brand names, such as Airbnb, Dropbox, Palantir Technologies, Pinterest, SpaceX, Spotify and Uber — disruptors that have made the list all five years.
While 28 companies on this year's Disruptor 50 list are based in Silicon Valley and 10 are from New York, the rest are headquartered throughout the United States and abroad, in places like Durham, North Carolina; American Fork, Utah; Bangalore, India; and Stockholm. This reflects the growth of entrepreneurial ecosystems emerging in all parts of the world.
Investors in these start-ups run the gamut, but leading the pack are Kleiner Perkins Caufield & Byers, Fidelity Investments, Goldman Sachs, DST Global (the VC firm led by Yuri Milner, the Moscow-based tech entrepreneur) and Andreessen Horowitz.
Not surprisingly, more than a dozen companies on this year's list are IPO candidates. Bloom Energy, the fuel-cell maker, filed with the SEC for a proposed initial public offering last October, and others — including Blue Apron, Spotify, Airbnb and MongoDB — could opt to go public in the months ahead.
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de6b40c04256aafc9f342dcb72deea34 | https://www.cnbc.com/2017/05/16/trump-allegedly-asked-comey-to-consider-imprisoning-members-of-the-press.html | Trump reportedly asked Comey to consider imprisoning members of the press | Trump reportedly asked Comey to consider imprisoning members of the press
VIDEO0:3900:39Trump reportedly asked former FBI Director Comey to drop the investigation into Michael FlynnNews Videos
The New York Times delivered a bombshell report — also confirmed by NBC News — on Tuesday evening that revealed that former FBI director James Comey wrote in a memo that President Donald Trump asked him to drop the bureau's investigation into former national security advisor Michael Flynn.
Buried in the Times report is a note that Trump asked Comey to consider imprisoning reporters for publishing classified information.
"Alone in the Oval Office, Mr. Trump began the discussion by condemning leaks to the news media, saying that Mr. Comey should consider putting reporters in prison for publishing classified information, according to one of Mr. Comey's associates," The New York Times said.
The Reporters Committee for Freedom of the Press has since responded to those comments, noting that the "President doesn't get to jail journalists."
It's worth noting that Trump has complained about leaks in the press quite frequently, both while in office and during his time on the campaign trail. His concerns surfaced again earlier this week after another report revealed that Trump discussed highly classified information while Russian diplomats were visiting the White House.
Trump often speaks in hyperbolic language, however, which means he may not have necessarily expected Comey to ever imprison members of the press, despite what sounds like a rather frightening suggestion.
Trump also regularly makes himself available to the press, often speaking to reporters and appearing in televised interviews.
NBC News has verified information from the original New York Times report with two separate sources.
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610ad696f5efecb70b18d6545f718ae7 | https://www.cnbc.com/2017/05/16/why-warren-buffett-is-betting-on-this-software-start-up.html | Why Warren Buffett is betting on this software start-up | Why Warren Buffett is betting on this software start-up
VIDEO3:4803:48Uptake Technologies turning data into actionSquawk Box
Brad Keywell is enjoying a repeat act. In the short period of time since he co-founded Chicago-based Uptake Technologies in July 2014, Keywell has seen his start-up reach a $2 billion valuation on the back of $146 million in funding, including $40 million from Revolution Growth, the venture firm of AOL co-founder Steve Case. It makes Uptake one of the fastest start-ups to ever reach $2 billion in value, along with Groupon, the daily deals company also based in Chicago, which Keywell co-founded in 2008.
Warren BuffettDavid A. Grogan | CNBC
But Uptake is nothing like Keywell's previous performance. Keywell's new start-up is in the business of predictive analytics, creating platform software that crunches data compiled by companies in a variety of industries — construction, energy and retail, to name a few — and mines that data for patterns and insights to help companies improve.
"The goal of insight platforms in industry is to increase uptime and increase safety. You're trying to increase productivity and reliability," CEO Keywell said. "So you subscribe to the Uptake platform, and what you get ... presents to you analytic insights specific to the issues in your industry."
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Caterpillar uses the platform — the construction equipment manufacturer was Uptake's launch partner — to detect when machinery is on the verge of breaking down. Now Warren Buffett's Berkshire Hathaway Energy — a portfolio worth $85 billion that includes renewable-energy companies — is getting in on the action. In March, Berkshire Hathaway Energy announced that two of its subsidiary companies (though not parent-company BHE itself) would use the Uptake platform to track their wind turbines, keeping tabs on when turbines are malfunctioning or in need of maintenance in an effort to increase efficiencies and reduce costs.
For BHE's subsidiaries, it's a savvy move. Wind turbines today are outfitted with hundreds of sensors, each one tracking different pieces of data: wind speed, oil pressure, torque, vibrations in the wind blades and more. In the aggregate, it's a mesmerizing, intimidating set of information to parse. Uptake's analytics platform does this automatically and in real time, sensing potential problems before they become real ones. On Uptake's 730-person staff, about 70 data scientists and 80 technologists are the minds behind this analytics platform.
"Wind turbines have all been fitted with numerous sensors so you can get more visibility into what's going on in your wind farm operations," said Stuart Ravens, an energy research analyst with the worldwide consulting firm Navigant. "You can become a far more profitable business just by using predictive analytics."
Predictive analytics is just the next iteration of the Internet of Things (IoT), the networked amalgamation of machinery, tools and appliances that work smarter and detect problems more quickly, thanks to the reams of data they collect for processing and analysis. Whereas big data was a mere buzzword only a few short years ago, advances and price reductions in sensor quality, cloud computing and data science allow start-ups like Uptake to come in and parse data for big companies, in turn enabling those companies to make their workplaces safer and cut expenses.
"Many enterprises have been capturing information for years, but they don't necessarily have the expertise and the skills internally to bring together this real-time, connected information," said Michele Pelino, an IoT analysts with Forrester.
It's a lucrative, growing field. By 2020 the market for predictive analytics is expected to reach $3.6 billion.
But Uptake is competing in a crowded market with a number of big players, some of which have their own big deals with the energy industry. Pelino said that one direct competitor to Uptake is C3 IoT, a company that's been developing enterprise analytics software since 2009 and counts Con Edison and Pella as customers. General Electric signed a deal with Exelon last fall for the energy utility to use its analytics software in 48 states. What's more, because GE has its own predictive analytics division, it enables the company to not only sell products but also subsequent services. So GE's aviation division, for example, not only sells jet engines, it also sells maintenance on that engine, and based on tracking data that GE collects and analyzes, it knows when to contact customers regarding maintenance.
"Instead of selling you just an airplane engine, you're being sold uptime for an engine," Pelino said. "They're not even selling a product anymore; they're selling a service that the product is enabling."
Brad Keywell, co-founder and CEO of Uptake.Source: Uptake
Uptake's not in that game, although Keywell claims the start-up is driving disruption of predictive analytics in other ways. Because Uptake's platform works across industries, knowledge gained in one industry can be applied to others. Tire pressure, and when it's running low, is an insight useful to both the construction and aerospace industries, for instance. In addition, Keywell argues that because Uptake is still a start-up, it has the flexibility to tailor its analytics platform for specific customers without wrangling legacy code or applications: It's building platforms with customers, as opposed to for customers.
And Uptake's platform's capabilities aren't just limited to industry. Through the start-up's civic innovation arm, Beyond. Uptake, the analytics platform it has created will soon be used by non-profit organizations in Nepal focused on identifying people lost to human trafficking. The illegal underworld of trafficking generates roughly $150 billion in profits each year, principally from the roughly 4.5 million people trafficked for sexual exploitation, according to the International Labor Organization.
"One challenge the human trafficking field has had for the past 15 to 20 years is a real lack of information on where or how trafficking happens. As a result, it's hard to structure policies and prevention to disrupt trafficking networks," said Jennifer Penrose, director of data analysis for Polaris, the Washington, D.C., nonprofit that uses data to try to interrupt human trafficking practices.
Data analytics allows organizations the ability to recognize trafficking patterns. By getting a better sense of where trafficking is prevalent and who's doing the trafficking, anti-trafficking groups can develop strategies to shut down larger networks — the hubs of human trafficking — as opposed to smaller businesses like massage parlors where some trafficking victims end up.
Meet the 2017 CNBC Disruptor 50 companies
The complete history of the CNBC Disruptor 50
This little-known start-up is disrupting Facebook, Google and Amazon
The initial step, of course, is gathering the data and analyzing it in a discernible way. That's where Uptake will make its contribution in Nepal. A business intelligence application for non-profits trying to disrupt human trafficking in Nepal is going live later this month, according to an Uptake spokesperson.
Whether it's for a social mission or in the field of business, Keywell said Uptake's predictive analytics platform uses machine learning to give it a unique advantage. After a company has started using the Uptake platform, the platform refines the insights it delivers over time as it compares its recommendations offered against what actions technicians in the field performed.
The platform, in other words, is self-correcting, and capable of delivering better recommendations to technicians in the six industries Uptake now serves: construction, retail, aerospace, mining, rail, and energy, where new customer BHE is hoping to reap the rewards of predictive analytics.
Keywell, naturally, thinks that will happen. One recent example he cited took place earlier this month at a wind farm in northwest Iowa that has been using Uptake's platform. A problem was uncovered in one turbine's main bearing; the platform detected the problem and offered as an insight a recommendation to shut down the turbine. A technician, after verifying, in-person, the problem with the bearing, followed through. In Keywell's telling, shutting down the turbine and fixing the bearing was a cost of a few thousand dollars, as opposed to the quarter-million dollars that would have been lost in downtime, missed revenue, and repairs were the turbine allowed to keep operating with a defective bearing.
"People talk about the fourth Industrial Revolution — that's not a joke," Keywell said. "If you can give people super-human skills through predictive insights delivered through technology, companies can be safer and better."
— By Andrew Zaleski, special to CNBC.com
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51d534b398ff7c68b8ce82856655f3db | https://www.cnbc.com/2017/05/17/cnbcs-christina-farr-amazon-is-hiring-people-to-break-into-the-multibillion-dollar-pharmacy-market.html | CNBC’s Christina Farr: Amazon is Hiring People to Break into the Multibillion-Dollar Pharmacy Market | CNBC’s Christina Farr: Amazon is Hiring People to Break into the Multibillion-Dollar Pharmacy Market
All references must be sourced to CNBC.com.
Amazon is hiring people to break into the multibillion-dollar pharmacy market
Each year, Amazon holds an annual meeting to discuss whether it should break into the pharmacy market, said a source familiar.This year, it is getting more serious and is looking to hire a general manager.Industry experts say this could be a multibillion market opportunity for the e-commerce company.
Christina Farr | @chrissyfarr
Amazon is hiring a business lead to figure out how the company can break into the multibillion-dollar pharmacy market.
For the last few years, Amazon has held at least one annual meeting at its Seattle, WA headquarters to discuss whether it should enter the pharmacy business, says two people familiar with the company's plans.
But this year, with the rise of high-deductible plans and the trend towards consumers paying for health care, it is ready to get more serious.
Two people said that it's not a done deal that Amazon will move into this space, given the complex web of established players. But it is bringing on a new general manager to lead the team and formulate a strategy, and is deep in discussions with industry experts. That hire would sit under the consumables business, the source said.
Another person said it's started to recruit more broadly from the pharmacy space.
The company recently started selling medical supplies and equipmentin the U.S., and is hiring for its "professional health care program" to ensure that the company is meeting regulatory requirements. It also hired Mark Lyons two months ago from Premera Blue Cross. A source said that Lyons is tasked with building an internal pharmacy benefits manager for Amazon employees, which might be later scaled out.
Amazon declined to comment.
Japan Times reported in April of this year that the company expanded its Prime Now delivery service to include drug and cosmetic sales, with the support of local partners. Amazon's category page on its Japanese site now includes "pharmaceuticals," and sells drugs to patients with approval from a pharmacist.
Amazon often tests new product lines in non-U.S. markets, before it assesses whether to roll it out in the domestic market. The company tested its secret drone-delivery program in Canada, for instance.
In the United States alone, more than 4 billion prescriptions are ordered every year. In 2015, patients, insurance companies and other payers spent an estimated $300 billion on prescription drugs.
For Amazon, it's a lucrative market that would require navigating a variety of existing players. For consumers with a high dollar deductible, Amazon could someday be a go-to destination to shop for drugs.
"I think Amazon would introduce a lot of transparency to what drugs really cost," said Stephen Buck, a health entrepreneur and co-founder of GoodRx, a service that promises to save consumers on the price of prescription meds. Buck sees a slew of potential opportunities for Amazon, including a product that competes with pharmacy benefits management or PBM giants, like Express Scripts and CVS Health.
Buck estimates that it's a $25 to $50 billion market opportunity for Amazon, if executed well. But the company would also face challenges entering a regulated market it. "Prescription transfer laws and e-prescribing make a little bit more difficult than putting something in a cart and checking out," he said.
Amazon previously backed a "dotcom" darling called Drugstore.com in the late 1990s, with CEO Jeff Bezos taking on a director role. At that time, it was speculated that Amazon could carve out a huge chunk of the prescription and over-the-counter drug sales market. Drugstore.com later sold to Walgreens, which eventually shut it down.
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7133e8aec2b5eb14af419b28451d7a90 | https://www.cnbc.com/2017/05/17/elysium-space-spacex-rocket-funerla-ashes-orbit.html | You can send your loved one's ashes into space on Elon Musk's SpaceX rocket for $2,500 | You can send your loved one's ashes into space on Elon Musk's SpaceX rocket for $2,500
VIDEO0:4700:47You can send your loved one's ashes into space on Elon Musk's SpaceX rocket for $2,500CNBC Reports
A company planning to send the ashes of dead people into orbit said on Tuesday that it will hitch a flight on one of Elon Musk's SpaceX rockets.
San Francisco-based Elysium Space describes itself as a "memorial spaceflight" company made of ex-NASA personnel and funeral experts. The business aims to "change the vision of death from the underground to the celestial."
Each customer who signs up will receive a kit containing a custom ash capsule to collect the cremated remains of their loved one. This is then sent back to Elysium Space and is placed in the company's spacecraft. This will be launched into orbit on a SpaceX Falcon 9 rocket.
"For about 2 years, our memorial spacecraft will respectfully and peacefully orbit the Earth," Elysium Space CEO Thomas Civeit, told CNBC by email on Tuesday.
"Eventually, in a last poetic moment, the spacecraft will harmlessly re-enter the Earth's atmosphere, blazing as a shooting star."
In this handout provided by the National Aeronautics and Space Administration (NASA), SpaceXs Falcon 9 rocket and Dragon spacecraft lift off from Launch Complex 40 at the Cape Canaveral Air Force Station for their eighth official Commercial Resupply (CRS) mission on April 8, 2016 in Cape Canaveral, Florida.NASA | Getty Images
Family and friends can follow the progress of the spacecraft with an Apple iOS or Google Android app.
So far the company has 100 participants booked. Each reservation starts at $2,490.
The launch date is in the hands of SpaceX Civeit said and there is no time set as of yet. It will take place at the Vandenberg Air Force Base in California when it does happen.
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0ea5eb3d75ecd4f279c77900b718ab38 | https://www.cnbc.com/2017/05/17/google-introduced-the-second-version-of-its-tpu-for-ai.html | Google is making a big-time move in silicon that should scare Nvidia | Google is making a big-time move in silicon that should scare Nvidia
VIDEO0:4700:47Google's latest AI chip could mean bad news for chip supplier NvidiaNews Videos
Google has spent a decade building servers that can handle billions of web searches a day. The company is now developing chips to deliver the smartest results.
At its annual developer conference on Wednesday, Alphabet introduced the second generation of Google's tensor processing unit (TPU), which is designed for artificial intelligence (AI) workloads. Google unveiled the first version in 2016 and said it had started work on the "stealthy project" a few years earlier.
The upgraded version is the latest indication that Google doesn't want to depend on other companies for core computing infrastructure. It's potentially troubling news for Nvidia, whose graphics processing units (GPUs) have been used by Google for intensive machine learning applications. Nvidia even named Google Cloud as a notable customer in its latest annual report.
Deep learning, a trendy type of AI, typically involves two stages: training artificial neural networks on lots of data, and then directing the networks to make inferences about the new data. Over the past five years, GPUs have become a standard for the training stage of deep learning, which can be used for image recognition, speech recognition and other applications.
While the original TPU was only meant for the inference stage of deep learning, the new version can handle training as well.
"I would expect us to use these TPUs more and more for our training needs, making our experiment cycle faster and more rapid," said Jeff Dean, a senior fellow and head of the Google Brain research team, in a media briefing on Tuesday. The company is sill using "GPUs internally for some kinds of models," he said.
Google’s second-generation tensor processing unit (TPU).Source: Google
It takes a day to train a machine translation system using 32 of the best commercially available GPUs, and the same workload takes six hours atop eight connected TPUs, Dean said.
Unlike Nvidia and Intel, Google operates this equipment inside its own data centers rather than selling it to other device makers. Facebook has done much the same, although it has opted to share the designs publicly through the Open Compute Project it established in 2011.
People outside Google will be able to rent out virtual machines (VMs) with acceleration from the second-generation TPUs. Google will also introduce VMs that draw on the Volta GPU that Nvidia announced earlier this month.
Over time, Nvidia could find itself getting less business for AI directly from Google. There could also be a more indirect impact, as some users of Nvidia GPUs for AI processing might run that work in Google's data centers.
Nvidia has been a Wall Street darling of late. The stock price has surged nine-fold over the past four years and the company is now worth more than $80 billion. In addition to data center customers, Nvidia also sells GPUs for professional workstations, gaming rigs and even vehicles.
Last month, Google published a paper comparing TPUs to existing chips and said its own processors are running 15 to 30 times faster and 30 to 80 times more efficient than the competition. Nvidia CEO Jen-Hsun Huang shot back and said his company's current chips have "approximately twice the performance of the TPU — the first-generation TPU."
A spokesperson for Nvidia did not respond to a request for comment on Wednesday's announcement.
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af98f7e6191a59058df944bf9faac28e | https://www.cnbc.com/2017/05/17/google-to-launch-google-for-jobs-to-help-americans-find-work.html | Google to launch Google for Jobs to help Americans find work | Google to launch Google for Jobs to help Americans find work
Sundar Pichai, Google CEODavid Paul Morris | Bloomberg | Getty Images
MOUNTAIN VIEW, Calif. — 's mission is to steer people to the information they need in their daily lives. One crucial area the Internet giant says could use some work: Jobs.
So Google is launching a new initiative, Google for Jobs, that includes a feature in search that collects and organizes millions of job postings from all over the web to make them easier for job seekers to find.
In coming weeks, a Google search for a cashier job in Des Moines or a software engineering gig in Boise will pop up job openings at the top of search results. With Google for Jobs, job hunters will be able to explore the listings across experience and wage levels by industry, category and location, refining these searches to find full or part-time roles or accessibility to public transportation.
Google is determined to crack the code on matching available jobs with the right candidates, CEO Sundar Pichai said during his keynote address Wednesday at Google's annual I/O conference for software developers here.
"The challenge of connecting job seekers to better information on job availability is like many search challenges we've solved in the past," he said.
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Pichai says he hopes Google's new job search function will surface new opportunities for job seekers who often don't know there's a job opening "right next door."
Google is the latest Silicon Valley company to announce an effort to boost American jobs after President Donald Trump's call to put America first. The aggressive push into jobs could help Google attract even more employment-related advertising. Already, it's expected to pull in three-quarters of search ad spending in the U.S. this year, according to research firm eMarketer.
It's also another example of the consumer-centric company's dive into the corporate sector as it hunts for new revenue sources beyond advertising.
Anytime an 800-pound gorilla like Google enters a market, it sends shudders through the established players in the targeted industry. Google's leap into travel search was a game changer for the travel booking industry. In job search, the heavyweight is Indeed, which says it's the largest job search engine, with more than 20 million job postings and 200 million unique visitors a month.
"We are happy to see that 13 years after Indeed launched, Google has woken up to the fact that searching for jobs is one of the most important searches in anyone's life," Indeed President Chris Hyams told USA TODAY.
Other job-search companies — such as Monster and CareerBuilder — are partnering with Google, an unusual amount of cooperation from its competitors.
Google scours the web, pulling from a broad cross-section of job listings, including from Glassdoor, Facebook, LinkedIn and ZipRecruiter. The aim is to "increase the efficiency of job matching," said Nick Zakrasek, a product manager for Google search, who gave USA TODAY a first look at the new search results job seekers will soon see.
Job seekers who find a listing via Google search are then taken to the company or job-search site listing, where they can apply.
Google for Jobs could prove useful to Americans whose economic anxiety is growing despite low unemployment rates, as more jobs are being displaced by technological advances, increased automation and spreading globalization. Google is very much a part of those advances: It's charting an artificial intelligence-powered future that promises to radically transform how people earn a living in the years ahead.
"Google's always looking at new things it can do with the skill set it has, and particularly ways it can get deeper into search and deeper into enterprises," said Jan Dawson, chief analyst with Jackdaw Research. "Jobs is a good fit for both of those, where it can provide a custom or deep search function for job listings on the consumer side and also offer businesses a system to hire workers on the enterprise side."
For employers, identifying the right candidates can be daunting, with nearly half of U.S. companies saying they face challenges in filling open positions.
On the employer front with Google for Jobs, Google is selling artificial intelligence and search technology to companies to make make it easier for them to find qualified recruits on their websites and job boards, Pichai says.
In November, Google launched a piece of that technology — Clouds Jobs API, which employers access through Google Cloud. The pilot program with FedEx, Johnson & Johnson, Health South and CareerBuilder is being expanded to include more than 30 employers, job boards and staffing agencies, he said.
"It's still early days, but we've seen promising results," Pichai said. For example, since using the Cloud Jobs API, Johnson & Johnson has found that 18% of job seekers are more likely to apply for a job on the company's career site, he said.
Some Google competitors in job search says the launch of Google for Jobs will help their own job listings businesses.
Facebook says it launched its own jobs feature to ease the strain of job searches on its nearly 2 billion users. "This partnership with Google helps us accomplish that goal," Facebook product manager Gaurav Dosi said in a statement.
Google for Jobs is good for the American economy and "has the potential to radically improve discovery of the millions of jobs on LinkedIn," Dan Shapero, vice president of careers and talent at LinkedIn, said in a statement.
Frustrations
For many job seekers, applying for jobs online can feel like tossing a resume into a fathomless digital abyss. Google says millions of people each day start their hunt for jobs on its search engine. But finding the right job can be a lot trickier than Googling the next movie times.
Job posts are notoriously hard for search engines to classify because of the wide range of keywords used to describe job functions and inconsistency across industries and organizations in job titles. And many people have very specific requirements for the job they are seeking, such as location, accessibility to public transit and special skills.
"It's something we see in the search logs. We see signs of our users being frustrated and being stressed while they're doing job seeking queries," he said.
How it works
For example, when conducting a search for sales jobs in Raleigh, North Carolina, openings will soon begin to appear at the top of results.
A job seeker can narrow the search by applying filters, such as jobs posted in the last three days, entry level versus management roles, full-time roles versus part-time, and roles in a particular industry such as retail. Once a job seeker spots something promising, they can click through to the website where the listing is hosted and apply there.
The goal for Google is to provide a comprehensive set of job postings that include blue-collar and white-collar positions, Zakrasek said. Google will also be able to point job seekers to jobs that have typically been much harder to search for and classify such as retail and service jobs.
He recently received a thank you note from the brother of a Google engineer who found a job using the feature while it was being tested.
"This guy had done computer repair, which means opening a computer box and fiddling with the wiring. It's kind of a dying job in this day and age and he had had trouble finding work," says Zakrasek. With Google for Jobs, "he was able to find a position he hadn't seen anywhere else."
Follow USA TODAY senior technology writer Jessica Guynn @jguynn
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39794c761552ba85745d215db99d9ae2 | https://www.cnbc.com/2017/05/17/if-trump-resigned-tomorrow-dow-would-go-up-1000-points-jeremy-siegel.html | If Trump resigned tomorrow, Dow would go up 1,000 points: Jeremy Siegel | If Trump resigned tomorrow, Dow would go up 1,000 points: Jeremy Siegel
VIDEO4:3104:31Trump drama does not derail GOP agenda: SiegelClosing Bell
Fears surrounding President Donald Trump drove U.S. markets sharply lower Wednesday, but longtime bull Jeremy Siegel certainly isn't concerned.
That's because the market rally has been based on the Republican agenda, not the Trump agenda, he said. In fact, he believes Wall Street would prefer a President Michael Pence rather than Trump.
"If Donald Trump resigned tomorrow I think the Dow would go up 1,000 points," the Wharton School finance professor said in an interview Wednesday with "Closing Bell."
Speculation about Trump's impeachment or resignation heated up after news that fired FBI Director James Comey left a memo detailing a conversation in which Trump allegedly asked him to stop his investigation of former national security advisor Michael Flynn.
That sent equities tumbling. The Dow Jones industrial average closed about 370 lower on Wednesday, while the dropped 1.8 percent. The Nasdaq shed 2.6 percent.
Siegel sees the sell-off as a buying opportunity and thinks tax reform will still get done no matter what happens with Trump.
"The Republicans have a lock. Nothing can change that for two years," Siegel argued.
And he believes Trump will sign whatever tax or regulatory reform the GOP presents.
"Trump will more likely, if he stays in power, be really controlled by Congress."
— CNBC's Fred Imbert contributed to this report.
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9359401ae598c84d48099ec047ed8d0f | https://www.cnbc.com/2017/05/17/trumps-favorite-tools-hyperbole-and-exaggeration-turn-into-traps.html | Trump's favorite tools — hyperbole and exaggeration — turn into traps | Trump's favorite tools — hyperbole and exaggeration — turn into traps
VIDEO2:0402:04Comey kept memos of Trump interactions: SourcesSquawk on the Street
The absence of credibility costs presidents dearly. And the bill for Donald Trump's years of falsehoods is now coming due.
Just four months into his presidency, Trump faces a mortal threat to his political survival. Contemporaneous memos kept by James Comey, the FBI director he fired last week, indicate Trump in February requested that he end an investigation into ex-national security advisor Michael Flynn.
If that happened, it could constitute obstruction of justice and fuel efforts to force his removal from office. The president, through a White House aide, said it didn't happen.
But few Americans believe the president's word anymore.
The man who touted "hyperbole" and "exaggeration" in his best-selling business book and seized the political spotlight with fabricated doubts about the President Barack Obama's birthplace, entered the presidency making transparently untrue statements about the size of his inauguration crowds. He holds the weakest reputation for honesty of any recent president.
Last month's NBC News/Wall Street Journal poll makes that clear. Only 25 percent of Americans rate Trump highly for being "honest and trustworthy."
Twice that many — 53 percent — give him low marks for honesty. That reflects condemnation of his truthfulness by virtually all Democrats and a solid majority of independents. Only a bare majority of Republicans — 53 percent — praise his truthfulness, even though more than 8 in 10 of them voted for him last fall.
VIDEO2:4102:41Trump asked Comey to shut down Flynn probe: SourcesWorldwide Exchange
Over the last quarter-century, Trump's predecessors have all been able to tap larger reservoirs of public faith. In the spring of Obama's first year in office, the NBC/WSJ poll showed that Americans praised Obama's truthfulness by a 3-1 margin. Some 90 percent of Democrats, 57 percent of independents and even 37 percent of Republicans rated his honesty highly.
President George W. Bush held comparable standing at the outset of his term in 2001. Only President Bill Clinton — whose numerous crises of credibility led critics to dub him "Slick Willie" — was near Trump territory. Yet even Clinton began his term with a net positive assessment, 34 percent to 30 percent, of his commitment to "keep his word."
The credibility hole Trump is stuck in bears directly on how Americans and, of more immediate consequence, congressional Republicans, process the news of the past 10 days. The president fired Comey amid an FBI investigation of his campaign and Russian interference in the 2016 election, and then acknowledged publicly the investigation was part of the reason. Now he faces Comey's word that he tried to stop the investigation of Flynn.
House Speaker Paul Ryan expressed confidence in the president on Wednesday morning and stressed that the role of Congress right now is to "gather facts."
But the danger for Trump is that these cascading developments collapse his support among congressional leaders, which has softened due to nonstop controversy since Inauguration Day. One sign was the assessment Wednesday morning from veteran Rep. Tom Cole of Oklahoma, a former executive director of the Republican National Committee who now represents a safely red Oklahoma district.
"While I am no Comey fan, I won't defend anyone who obstructs justice," Cole told CNBC. "I believe it is time for Comey to appear before Congress, answer questions under oath, and turn over all relevant documents to Congress and the Justice Department."
Cole did not say he believes Trump.
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d19230dfefaa9cd6ca6ccf72cf6f7e40 | https://www.cnbc.com/2017/05/18/5-questions-to-ask-when-choosing-a-credit-card.html | 5 questions to ask when choosing a credit card | 5 questions to ask when choosing a credit card
David Shopper | Getty Images
Using a credit card can be a great way to boost your credit score, earn rewards points and get cool perks. But, choosing the wrong credit card could leave you with rewards you don't use, high fees and sky-high interest rates.
At least one in five credit card holders are using the wrong credit card, a J.D. Power study revealed. "Keeping the wrong credit card at the top of your wallet is like being in a bad relationship: You're stuck giving more than you get, making the most of the terrible terms and defending your choices to your family and friends," as NerdWallet explains.
If you're signing up for your first card or looking to upgrade to a better card for your needs, ask these five questions about any credit offer you're looking at.
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American Express has an invitation-only credit card with a $7,500 initiation fee and a $2,500 annual fee. The Black Card, or Centurion Card, is a "status symbol," according to Travel + Leisure — but it is one many millennials are rejecting. Savvy millennials are looking for cards offering more bang for their buck.
This means assessing whether annual fees are worth it at all. There are great no-fee options, like Citi Double Cash, offering 2% cash back on purchases, or Capital One Quicksilver Cash Rewards, with 1.5% cash back.
Paying annual fees is smart if you earn enough rewards to exceed the fees, use perks the card provides or get free services you'd otherwise pay for. "If you need to purchase primary auto rental coverage each time you get a rental car, it might be wise to get a rewards card that offers that coverage as a cardholder perk instead," the Simple Dollar explained.
So before you dismiss fee cards out of hand, estimate how much you'd need to spend for the rewards to surpass the fee. Or, ask the creditor to waive the fee — surprisingly many consumers are successful when requesting a fee waiver.
2. How will you reward me for spending with your card?
No-frill cards without rewards points actually still exist, but why anyone would want one is a mystery. "Every time you use your credit card, the merchant pays a fee (called interchange), most of which goes to your bank," Forbes explained. "Your goal should be to get as much of that interchange back as possible." You should be rewarded somehow for using a card, whether that reward is cash, gifts cards, free flights or an all-expenses paid trip to Rock 'n' Roll Fantasy Camp.
When shopping for a card, find out how many points you earn for purchases, what each point is worth and what you can redeem your points for. Capital One VentureOne offers 1.25 miles per dollar spent, for example, while Chase Sapphire Reserve gives you three points per dollar spent, which equates to around a 6.3% return if you do the math.
Also, make sure to look for rewards you'll use, as almost a third of credit card holders don't redeem points. You could miss out on really cool stuff by not using your rewards. "For my husband's 40th birthday we took an around-the-world trip. We flew business class to Amsterdam, Singapore and the Maldives, where we stayed in a private villa. The trip would have cost tens of thousands of dollars. In total, our award tickets cost 240,000 United miles, plus around $200," Summer Hull told Travel + Leisure.
Speaking of travel, if you're going to be taking some Instagram-worthytrips, find out what a card charges for foreign transaction fees. Most cards have a fee charge around 3%, so if you'll be crossing borders, look for a card that's not going to charge extra if you pay in Pesos or Euros.
"Cards without foreign transaction fees are widely available in a highly competitive market as banks fight to attract and keep customers," Nessa Feddis, vice president and senior counsel for the American Bankers Association told CreditCards.com. Capital One Quicksilver World Elite Mastercard and BankAmericard Travel Rewards Visa Signature Card are a couple examples.
If you're not a jet-setter, you can still find a card that offers you cool perks. If $200 in free Uber rides sounds sweet, an American Express Platinum card has you covered. Love music, movies or sports? Citi Private Pass will help you score pre-sale packages for concerts, sporting events and screenings.
With so many cards offering similar deals on rewards points, it's the perks that can differentiate one card from another. "While most credit cards offer some kind of cash-back or points program these days, travel cards can pay for themselves in spades with some of the perks and benefits they afford," Thrillist explains.
Narrow down your list to one or two cards offering generous rewards, then ask for a complete list of perks to pick the card with the coolest offerings.
"Right now, it's a really good time to be a customer, especially one with good credit. The issuers are really going after each other with lucrative deals," Matthew Goldman, the chief product officer for the credit card sites at Bankrate, told the New York Times.
Card issuers are offering huge sign-up bonuses, like a 50,000 mile bonus if you spend $3,000 on a Barclaycard Arrival Plus World Elite MasterCard within three months of opening the card.
"What's great about signup bonuses is that you can earn a generous amount of rewards by spending only a fraction of the amount you'd ordinarily need to spend to earn the same amount of rewards," the Balanceexplains. Just make sure you actually spend enough to earn the bonus, which usually only pays out after you hit a minimum spending threshold in a designated time.
This could be the most important factor — or the least important — depending on whether you carry a balance.
"If you carry a balance, then choosing the best credit card rates is the way to go," the Balance explains. "Common sense would point to the fact that accumulating rewards or mileage points while paying compounding high interest over the span of years will end up costing you much more than the price of an airline ticket or a non-discounted gallon of gas."
If you are in credit card debt already, one of your best options may be a credit card with a 0% balance transfer offer — like the Citi® Diamond Preferred® Card offering 0% interest for 21 months with a 3% fee to transfer your balance — so you can consolidate your debts onto one card which won't charge you monthly.
If you always carry a balance and just want the low rate and no annual fee, consider a card like the Barclaycard Ring Mastercard, which has a 13.74% annual percentage rate after the 0% interest introductory period ends.
But, if you pay off your card every month, interest doesn't matter much and you can shop for a card based on fun stuff, like the cool rewards you'll claim.
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d5629c2dda5996326714712884732e92 | https://www.cnbc.com/2017/05/18/basquiat-painting-sets-new-record-for-us-artist-at-auction.html | Basquiat painting sets new record for US artist at auction | Basquiat painting sets new record for US artist at auction
VIDEO0:4700:47Basquiat painting scores record $110.5M at auctionSquawk Box
A work of art by Haitian-American painter Jean-Michel Basquiat sold for $110.5 million at Sotheby's New York on Thursday, according to the auction house.
The previous record was $105.4 million paid for Andy Warhol's "Silver Car Crash (Double Disaster)" four years ago, multiple outlets reported.
Sotheby's tweet: #WorldAuctionRecord Basquiat's seminal 'Untitled' work from 1982 soars to $110.5 million - after 10 minutes of bidding
Basquiat's piece, called "Untitled," was created in 1982 and features a black skull on top of a colorful background. It was purchased by Japanese billionaire Yusaku Maezawa, who founded e-commerce site Zozotown.
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24c226f08f37d40abbabf7aef4190299 | https://www.cnbc.com/2017/05/18/facebook-fine-eu-whatsapp-takeover.html | Facebook fined $122 million by EU for giving 'misleading information' about its takeover of WhatsApp | Facebook fined $122 million by EU for giving 'misleading information' about its takeover of WhatsApp
VIDEO0:5100:51Facebook takes a $122 million hit for giving EU regulators misleading information about WhatsAppTech Transformers
has been fined 110 million euros ($122 million) by European regulators for providing "misleading information" about its acquisition of messaging service WhatsApp.
The European Commission, the European Union's executive arm, announced the fine on Thursday.
"Today's decision sends a clear signal to companies that they must comply with all aspects of EU merger rules, including the obligation to provide correct information. And it imposes a proportionate and deterrent fine on Facebook," EU Commissioner Margrethe Vestager said in a statement.
"The Commission must be able to take decisions about mergers' effects on competition in full knowledge of accurate facts."
Facebook bought WhatsApp in 2014 for $19 billion. The Commission's issue centers around the U.S. social networking giant linking Facebook accounts to WhatsApp user identities. In 2014, the Commission said that Facebook told it that there was no possibility to establish "reliable automated matching between Facebook users' accounts and WhatsApp users' accounts."
Facebook CEO Mark Zuckerberg Justin Sullivan | Getty Images
But in 2016, Facebook released an update to its terms of service that raised the possibility of linking accounts from both platforms.
"By coordinating more with Facebook, we'll be able to do things like track basic metrics about how often people use our services and better fight spam on WhatsApp," the messaging firm said in a blog post at the time.
"And by connecting your phone number with Facebook's systems, Facebook can offer better friend suggestions and show you more relevant ads if you have an account with them."
But the Commission said that contrary to Facebook's statements in 2014 saying it wasn't able to link accounts, the U.S. firm was aware that such a possibility existed.
However, the fine will not impact the EU body's previous decision to approve the acquisition.
"The Commission at the time also carried out an 'even if' assessment that assumed user matching as a possibility. The Commission therefore considers that, albeit relevant, the incorrect or misleading information provided by Facebook did not have an impact on the outcome of the clearance decision," a Commission statement read.
It added that Thursday's fine is unrelated to any ongoing national antitrust or data protection issues that may arise following the update that WhatsApp rolled out in 2016.
Facebook said that to the best of its knowledge, the information it provided was correct.
"We've acted in good faith since our very first interactions with the Commission and we've sought to provide accurate information at every turn. The errors we made in our 2014 filings were not intentional and the Commission has confirmed that they did not impact the outcome of the merger review," a Facebook spokesperson told CNBC by email.
"Today's announcement brings this matter to a close."
Under European Union rules, a company can be fined up to 1 percent of its aggregated turnover if it intentionally or negligently provides incorrect or misleading information about a merger or acquisition.
The Commission said that Facebook's infringements "are serious because they prevented it from having all relevant information for the assessment of the transaction."
But the EU body did say that Facebook co-operated in the investigation into the WhatsApp takeover and as such, the Commission has taken this into account when setting the fine.
"On the basis of these factors, the Commission has concluded that an overall fine of 110 million euro is both proportionate and deterrent," it said.
The fine is small when taken in the context of Facebook's overall revenue which was $27.6 billion in 2016, and just over $8 billion in the first quarter of 2017 alone.
It is the first time that the Commission has imposed a fine on a company for incorrect or misleading information since the 2004 Merger Regulation – under which it is fining Facebook – has come into force.
The EU has been aggressively pursuing U.S. technology companies on several fronts from mergers to tax and competition concerns. Alphabet-owned Google for example is under investigation by the Commission over alleged antitrust practices in regard to its Android mobile operating system.
And Apple was forced to pay 13 billion euros back to Ireland after the Commission deemed that the country offered the U.S. firm "illegal tax benefits".
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9229e1b9f8664540d6e4c31c7e218362 | https://www.cnbc.com/2017/05/18/google-ceo-sundar-pichai-machine-learning-big-data.html | Making sense of Google CEO Sundar Pichai's plan to move every direction at once | Making sense of Google CEO Sundar Pichai's plan to move every direction at once
Google CEO Sundar PichaiGetty Images
Google CEO Sundar Pichai has laid out a plan that could, if successful, help parent company Alphabet maintain double-digit growth in sales and profit: Use Google's massive scope to build the best machine learning systems in the world. Then use that expertise to build apps and services that consumers can't live without.
In the process, Google could once again reshape how consumers use the Internet.
Pichai kicked off a sprawling two-hour keynote presentation on Wednesday at Google I/O 2017, the company's annual conference for programmers, by throwing out some impressive stats. The crowd was particularly impressed when Pichai said 2 billion devices were now running Android. The company also announced that Google Drive, the company's online storage service, now tops 800 million users a month. Google Photos, a way to organize and share photos online, is over 500 million.
VIDEO3:4003:40What your Google searches says about you: AuthorSquawk Box
But these billions of users are just a prelude. What Pichai is really excited about is machine learning -- software that gets smarter over time by munging reams and reams of data.
"Thanks to advances in deep learning, we're able to make images, photos and videos useful" for finding things, he said. "Speech and vision are becoming as important to computing as the keyboard."
Google's ability "to understand images and video has profound implications" for all of what it does, he said.
To that end, he introduced Google Lens, a product for recognizing and locating images within videos and photos, and noted that Google Home -- the company's competitor to Amazon's popular Echo -- can distinguish between different voices. A slide behind him also noted that Google's error rate in voice recognition is now just under 5 percent, down from 8.5 percent in July, 2016, according to one slide behind Pichai.
But the plan is bigger than the company's own services. Pichai also wants to make it easier for developers to use these artificial intelligence advances in their own apps -- and this was a conference for developers, after all.
"We want it to be possible for hundreds of thousands of developers to use machine learning," Pichai said.
Google will make this intelligence available through its cloud computing service, made more powerful by an update to a new kind of chip called the Tensor Processing Unit, or TPU. Google has been working on this project for several years, and while it won't sell the chips, it will allow any developer to access the power they provide through Google's cloud services.
If his plan succeeds, Google technology will be able to provide answers to a broad swath of consumer questions and solve a growing number of their problems.
The most valuable tech firms — powerful rivals all — are attacking similar problems.
Amazon has built a personal assistant that beat Google to market with hands-free calling and product-image recognition, and makes its own AI services available through its market-leading cloud service, AWS. Microsoft is also in the game with its personal assistant, Cortana, and machine learning services available through its Azure cloud.
Apple has Siri and is surely working on bigger things in the background. Uber is pursuing self-driving cars and doing the the AI work necessary for that initiative. Facebook, IBM, Salesforce, even Snap -- all of them are in the game. In fact, you can't listen to a start-up pitch in Silicon Valley today without hearing the words "machine learning."
But Google has a much broader scope than any of them. No other company has a market-leading mobile platform, online video service, web browser, and multiple online services with hundreds of millions of users.
In the machine learning game, the more data you have, the faster your programs learn. That's what Pichai and Google were really showing off on Wednesday. It may have seemed like a disorganized sprawl, but that diversity is Google's biggest strength, and could give it the edge it needs to win the next generation of computing.
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6e8a91ba78dd1ed59d743511811fdbdc | https://www.cnbc.com/2017/05/18/leon-coopermans-omega-settles-with-sec-report-citing-letter.html | Leon Cooperman's Omega settles with SEC; 'No restriction on my ability to invest' | Leon Cooperman's Omega settles with SEC; 'No restriction on my ability to invest'
VIDEO0:3100:31Omega to pay $4.9M in settlementClosing Bell
Leon Cooperman's Omega Advisors has settled with the U.S. Securities and Exchange Commission for $4.9 million.
The hedge fund admitted to no wrongdoing and chairman and CEO Cooperman will not be barred or suspended from the industry.
"I look forward to putting this matter behind me, with no restriction on my ability to invest and manage client assets, for much less than it would have cost to continue defending the case," Cooperman said in a statement to CNBC.
The SEC did not immediately return a CNBC request for comment.
Last September, the SEC accused Cooperman of insider trading. The billionaire hedge fund manager has maintained that the charges are "without merit."
Cooperman told CNBC in January that assets under management shrank by more than half to $3.4 billion.
The settlement was first reported by Dow Jones.
— CNBC's Leslie Picker contributed to this report.
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af23a133721ed845bb4ef826c5cae5ab | https://www.cnbc.com/2017/05/18/mercedes-benz-and-vivint-solar-partner-to-compete-with-tesla-in-home-energy.html | Mercedes-Benz and Vivint Solar partner to compete with Tesla in home energy | Mercedes-Benz and Vivint Solar partner to compete with Tesla in home energy
VIDEO0:4800:48Mercedes-Benz/Vivint partnership offers home energy to homeownersNews Videos
Mercedes-Benz is partnering with U.S.-based Vivint Solar to compete with Tesla and similar companies in residential solar energy and storage.
Mercedes-Benz Energy will combine its 2.5 kilowatt-hour energy storage batteries with a Vivint's rooftop to make a combined product for homeowners.
"As Mercedes-Benz electrifies its vehicle fleet, solar plus storage is essential to enable those vehicles to be powered by clean energy," said Boris von Bormann, CEO of Mercedes-Benz Energy Americas, in a press release. He added that a similar program has already been successful in Europe.
Costs will vary depending on the system, but a fully installed 2.5 kWh battery system, when paired with a solar energy system will cost about $5,000, according to a Vivint Solar spokesperson. A 20 kWh home energy storage system — made of several connected batteries —will cost about $13,000 fully installed.
The offering includes the complete package: batteries, inverter, all required technical components, professional installation, permitting, system design and consultation with Vivint Solar. The installation of the entire system, including the solar panels and the battery, typically takes one to two days, once permits are secured.
With the partnership, both companies will be able to provide a product offering similar to those that other firms are bringing to market.
Tesla in particular has touted the benefits of selling energy storage batteries with solar panels. The company has begun taking orders for its solar roof tiles, which can be connected to its Powerwall batteries.
But the news also comes at a time when some indicators have suggested slowdowns in the solar power business.
The Vivint/Mercedes program will begin rolling out in California in the second quarter, according to a press release.
"The choice to work with Mercedes-Benz Energy, a world-class innovator in energy storage, was an easy one," said David Bywater, CEO of Vivint Solar, in the release. "We believe their energy storage system is going to delight our customers and are impressed with their ambitious plans for the future."
Mercedes has been moving quickly toward electrifying its vehicle fleet, and some have suggested the company could become a formidable competitor to Tesla, especially in luxury vehicles.
For, example, the German carmaker announced in March that it plans to speed up the debut 10 battery-powered cars by three years, from 2025 to 2022.
Vivint Solar is one of the three largest residential solar installers in the U.S., though it trails SolarCity, which Tesla acquired late last year.
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8440d7d64f03de4044cbc36fe812587d | https://www.cnbc.com/2017/05/18/these-u-s-stocks-have-the-most-at-risk-from-the-emerging-brazil-crisis.html | These US stocks have the most at risk from the emerging Brazil crisis | These US stocks have the most at risk from the emerging Brazil crisis
VIDEO4:0004:00This hedge fund manager is still betting on emerging marketsFast Money
Brazil's latest political scandal crushed its stock market and rippled across financial markets, including to the U.S.-traded shares of Brazilian and some U.S. companies with exposure to the South American country.
President Michel Temer, who replaced ousted President Dilma Rousseff, was reported to have been recorded negotiating a bribe to win the silence of ex-House Speaker Eduardo Cunha. The news report cast in doubt not only the economic reforms proposed by Temer, but also his tenure in office. Temer was also reported to be under investigation by the country's top court.
VIDEO3:3003:30Is history suggesting buy the Brazil breakdown?Fast Money
Citigroup economists said Thursday that if Temer were ousted, it would have negative implications for the Brazilian economy. His social security reform would be in jeopardy, and if he is removed, there would be an indirect election in two months. Citi had expected interest-rate cuts by the Brazilian Central Bank due to a decline in inflation, but that could be in doubt.
"At this point, despite being extremely hard to assess not only the magnitude of this shock on macroeconomic variables but also its temporal dimension, it definitely has the potential power of being a game change," they noted. That makes the future also cloudy for companies that do business there.
Goldman Sachs identified companies with significant revenue exposure to Brazil.
Source: Goldman Sachs
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e8f2c540f6e9f672a986f9e7eaf5aa27 | https://www.cnbc.com/2017/05/18/trump-again-blows-up-white-house-statement-with-a-tweet.html | Trump again blows up a careful White House statement with a tweet | Trump again blows up a careful White House statement with a tweet
VIDEO1:0701:07Former FBI Chief named special counsel in Russia investigationSquawk on the Street
President Donald Trump lashed out again Thursday at the ongoing inquiries into his presidential campaign and Russia, counteracting an earlier, more measured response from the White House.
On Wednesday, the Justice Department appointed former FBI Director Robert Mueller as a special counsel to lead the probe into alleged Russian interference in the 2016 U.S. election. Among the things being investigated are possible links between Trump campaign associates and the Kremlin.
In a pair of Thursday morning tweets, Trump asked why no special counsel was appointed for what he called "all of the illegal acts" of Hillary Clinton's campaign and the Obama administration. He then called the Russia investigation "the single greatest witch hunt in American political history."
Trump tweet: This is the single greatest witch hunt of a politician in American history!
Trump's tweets took a starkly different tone from the official statement the White House released in his name Wednesday night:
"As I have stated many times, a thorough investigation will confirm what we already know — there was no collusion between my campaign and any foreign entity. I look forward to this matter concluding quickly. In the meantime, I will never stop fighting for the people and the issues that matter most to the future of our country."
It marks at least the third time in just over a week that Trump has either contradicted or muddled a statement from his White House.
Trump last week fired ex-FBI Director James Comey, whose agency was investigating the president's campaign, and reports since then have raised questions about whether he had tried to influence the investigation.
After Trump ousted Comey, the White House first said the president did so because of a Justice Department memo criticizing the FBI chief's performance. Later, though, Trump told NBC News that he would have fired Comey "regardless" and was thinking of the "Russia thing" when he did so.
White House officials also vehemently denied reports that Trump shared highly classified information in a meeting with Russian diplomats last week. But in later tweets, the president said he did share information about threats with the Russian officials, though he neither confirmed nor denied if it was classified.
The mixed messages come as rumors have swirled about a possible shake-up of White House communications staff.
On Wednesday, Trump complained in the middle of a U.S. Coast Guard Academy commencement speech that he has been "treated worse" than any politician "in history."
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2d4c336afc5b24aa13200b941a44001a | https://www.cnbc.com/2017/05/18/uber-launches-uber-freight.html | Uber's new app for truckers could disrupt one of America's core industries | Uber's new app for truckers could disrupt one of America's core industries
Uber launched a new app on Thursday called Uber Freight, which matches trucking companies with loads to haul.
The formal launch of the app marks Uber's long-anticipated move into the trucking industry — potentially disrupting one of the most popular professions in the U.S.
With 9.73 million workers, transportation and material moving is the fourth-largest employment group in the U.S., behind office staff, salespeople and food preparation workers, according to May 2016 data from the Bureau of Labor Statistics. Of transportation workers and movers, general freight trucking and specialized freight trucking are among the industries with the highest employment levels, the BLS said.
An Uber Freight truck.Source: Travis Kalanick | Twitter
Uber said in a blog post that the new app will relieve stress for drivers by confirming rates and loads within seconds, and delivering payments within a few days, much faster than the month-long waiting periods that are typical in the industry.
Business Insider and The Verge have reported some early details of the program over the past year.
The program has been in testing mode for a couple of months and is currently operating in Texas. Like Uber's existing ride-hailing app, it is based on location, an Uber spokeswoman told CNBC.
Uber's ride-hailing business has been criticized by taxi unions and labor advocates, who say the services's flexible hours and fares "destroyed driver incomes" and that drivers should be employees that can unionize — not independent contractors.
Source: Uber Newsroom
An Uber spokeswoman told CNBC that only professional drivers can use the Freight app.
"We fundamentally believe that by focusing on drivers' pain points we can solve the industry's biggest challenges," Uber said in the blog post. "Happy drivers means happy shippers, and ultimately everyone benefits, including the end consumers of the goods."
Another interesting tidbit: Uber Freight is led by Lior Ron, the co-founder of Otto. Otto is a trucking start-up, now owned by Uber, that has been at the center of an intense lawsuit with 's Waymo.
Waymo alleges that Otto's other co-founder, Anthony Levandowki, stole key trade secrets related to Alphabet's self-driving car program, a claim Uber has called "." But despite Ron's involvement, Uber Freight relies on human drivers, who can sign up for the program on Uber's website.
— CNBC's Morgan Brasfield contributed to this report
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eeb8cebd09a0b0686f5534c9884aea5a | https://www.cnbc.com/2017/05/18/walmart-reports-first-quarter-earnings.html | Wal-Mart earnings top Street estimates as retailer's digital sales jump 63% | Wal-Mart earnings top Street estimates as retailer's digital sales jump 63%
VIDEO2:2202:22Wal-Mart posts mixed Q1 resultsSquawk Box
Wal-Mart's U.S. business is thriving in a challenging environment, as aggressive pricing helped bring more shoppers into stores, while efforts to expand its digital business are paying off in robust growth.
The retailer's U.S. comparable sales — an important metric for retail stocks — grew for the 11th consecutive quarter, climbing 1.4 percent compared with a FactSet estimate for 1.3 percent growth.
Notably, Wal-Mart was also able to increase traffic to its U.S. stores again, at a time when others are seeing fewer shoppers. The retailer said its comparable sales traffic grew 3 percent, on a two-year stacked basis.
Wal-Mart's e-commerce sales rose a whopping 63 percent, compared with 29 percent growth last quarter. Despite making a number of acquisitions, the majority of these sales were organic through Walmart.com, the company said.
Shares of Wal-Mart were up 2.7 percent to $77.15 in early trading Thursday.
Wal-Mart's total fiscal first-quarter revenue grew 1.4 percent, to $117.54 billion, falling slightly short of a $117.74 billion forecast by analysts.
Earnings per share rose 2 percent to $1.00, up from 98 cents a year ago. The profit was higher than a Thomson Reuters consensus estimate for 96 cents a share.
"Inside the company we can see that we're moving faster to combine our digital and physical assets to make shopping easier and more enjoyable for customers, but we can also see plenty of room to improve," Wal-Mart CEO Doug McMillon said on Thursday's earnings conference call.
The big-box retailer has been making strides to expand and improve its e-commerce platform. The company recently acquired Jet.com, bringing in new talent to help manage its digital operations. Jet.com's founder, Marc Lore, is now the CEO of Wal-Mart's e-commerce division.
This comes at a time when Wal-Mart is locked in an online battle with players like Amazon and Target. Wal-Mart recently rolled out free two-day shipping for online orders over $35, prompting Amazon to slash its free-shipping threshold for shoppers who don't have a Prime membership.
"We need to scale our e-commerce business further and see some additional strength in our store comps to deliver the results we know we're capable of — so that's what we're focused on," McMillon went on.
During the first quarter, Wal-Mart's online gross margin values rose 69 percent, management added.
"E-commerce is working [for Wal-Mart]," Barclays food and staples retail analyst Karen Short told CNBC on Thursday morning. "And it's not coming at the expense of brick-and-mortar, because you need both to survive."
Despite Amazon wanting to eat everyone's lunch, Wal-Mart stands out from its peers in being able to capture customers online, Short said. After its purchase of Jet.com, smaller acquisitions of sites like ModCloth and Moosejaw are evidence of this, she added. "Wal-Mart is definitely a winner."
Source: Walmart
At U.S. stores, the company said its grocery business continued to improve, with food categories delivering the strongest quarterly comparable sales performance in more than three years, due in part to a lack of market deflation in food.
"From our data, Walmart is ... also picking up some customers from mainstream grocers," GlobalData Retail managing director Neil Saunders wrote in a note to clients. "The response to Walmart flexing its price muscles has been good, and we expect further small gains over the rest of this year. A more disciplined focus on low prices is also important as Aldi, and now Lidl, expand into the market."
However, Wal-Mart's heavy discounting, coupled with lower sales of higher-ticket items at the start of the quarter, resulted in a slight decline in average ticket amounts.
Meanwhile, all of Wal-Mart's U.S. store formats showed positive comparable sales to start the year, the company said.
For example, Wal-Mart's Sam's Club's comparable sales, excluding fuel, rose 1.6 percent, while traffic grew by 1.1 percent. Digital growth at Sam's Club "Club Pickup" increased nearly 30 percent, the company reported.
With respect to its international locations, sales were $27.1 billion for the first quarter, a decrease of 3.5 percent.
Wal-Mart no longer reports an overarching global figure for its e-commerce growth, instead choosing to focus on the U.S. market. Its domestic online performance has been outpacing results overseas, the retailer has said.
Seven of Wal-Mart's 11 international markets reported positive comps to start the year, CFO Brett Biggs told analysts and investors on the conference call.
"There is a sense that Walmart is getting to grips with some of the issues, but we believe it will be some time before all parts of international make a solid contribution," Saunders said in the note.
Wal-Mart said it now expects to earn between $1 and $1.08 per share during the second quarter, excluding a net benefit from the sale of Suburbia, the retailer's apparel format in Mexico. Thomson Reuters analysts had forecast earnings of $1.07 a share for this period.
During the same period, U.S. same-store sales, excluding fuel, should grow between 1.5 and 2 percent, the company said. Sam's Club comparable sales are estimated to rise between 1 and 1.5 percent.
"In our view, Walmart's investments in price, its focus on service in stores, and its omnichannel push are all paying dividends," Saunders added. "The delay in tax refunds, which resulted in lower sales of higher ticket merchandise over the early part of the quarter, put a small dent in growth, but not by enough to cause serious concern."
For fiscal 2018, Wal-Mart has said it expects to earn between $4.20 and $4.40 a share.
"Overall, [Wal-Mart's] investments have resulted in positive comparable store sales trends and improving traffic," Stifel analyst Mark Astrachan wrote in a recent note to clients. "Walmart's success, along with broadly weakening brick and mortar shopping trends, has caused competing retailers to respond with their own pricing actions."
On Wednesday, big-box retail rival Target reported earnings, sales and comparable sales that topped Street expectations. Target is in the midst of a multiyear turnaround effort, as it attempts to compete with Wal-Mart's "Everyday Low Price" strategy and Amazon's encroaching presence over the industry.
"While [Target] is not trying to directly undercut Walmart on prices, it is trying to use everyday lower prices on daily use items to drive customers into remodeled stores that provide a better experience than Walmart," Astrachan said.
As of Wednesday's close, shares of Wal-Mart have climbed nearly 19 percent over the past 12 months and are up about 9 percent for the year-to-date period.
Source: FactSet
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9f801626ff6e43444a73f996564fab88 | https://www.cnbc.com/2017/05/19/foursquare-ceo-no-limit-to-the-industries-mobile-data-will-disrupt.html | Foursquare CEO says 'there's no limit' to the industries that mobile data will disrupt | Foursquare CEO says 'there's no limit' to the industries that mobile data will disrupt
VIDEO1:0101:01Foursquare CEO: "No limit' to industries mobile data will disruptMad Money with Jim Cramer
Since his company broke into big data, Foursquare's new CEO, Jeff Glueck, finds the possibilities for big data companies to be endless.
"I think there is no limit to the industries that are going to be disrupted by mobile data," Glueck told "Mad Money" host Jim Cramer on Friday.
With about 100 million places in the world mapped on Foursquare's servers, the company has made a powerful foray into the big data space, serving 50 of the 100 largest advertisers in the world and roughly 100,000 technology companies.
Meet the 2017 CNBC Disruptor 50 companies
The refurbished platform allows Foursquare, No. 46 on CNBC's Disruptor 50 list, and its array of customers to understand people's movements across 200 countries, giving them an accurate sense of economic shifts and patterns across the globe.
"Every business in the world has this fingerprint. There's different WiFis that are available on the tenth floor than the third floor, GPS signals, Bluetooth beacons. We've taken billions of signals, called check-ins, and we provided these wonderful apps for people," Glueck said. "But in the process of checking in at 100 million places, they've mapped the world for us. And that allows us to do some magical things."
More from CNBC Disruptor 50:
How Pinterest will escape the advertising traps that snared other social media platformsBill and Melinda Gates are placing bets on this biotech in the race to develop a Zika vaccineThe rise of the world's next great superpower
The tech companies Foursquare serves are not just startups using the platform to make their apps more intelligent. Their clients include some of tech's biggest players, putting Foursquare in the ranks of Facebook and Google when it comes to understanding where people are going.
"It allows us to make technology that lets you tag a tweet on Twitter from where you're standing. It lets Snapchat make better geofilters. Uber drivers, if you use that app, they're using our database of the world's places kept fresh by people checking in and a million different people, kind of Wikipedia-style, editing. So all of these technology companies are benefiting from this living, breathing set of explorers that are mapping the world every day," the CEO said.
Glueck added that an advantage of Foursquare is that the service is "Switzerland" when it comes to fierce competition in the tech space, making a point to remain neutral while providing key information to its customers.
Watch the full segment here:
VIDEO7:2907:29Foursquare CEO says 'there's no limit' to the industries that mobile data will disruptCNBC Disruptor 50
"The interesting thing about it is everyone who's not Facebook and Google is pretty much using our platform," he said. "We are one of only three companies in the world that can recognize, across the world, when phones walk in and out of these places. And if you look at all our paying customers, it's Apple, it's Microsoft, it's Snap, it's Twitter, it's Uber, it's Pinterest, it's Samsung, and 100,000 other companies."
And although Foursquare has been around for a while, its constantly evolving platform and strategic position in the big data space makes the future look pretty bright, Glueck said.
"Take a look at real estate in the future. It's something we're thinking about," the CEO said. "We know who's on every block in 150 countries and how far they've come from and what kinds of people [they are], and so we think in the future we can help not just technology companies and big advertisers but also real estate and, you name it, urban planning."
When Cramer asked whether the company is considering an initial public offering, Glueck said his goal is to become profitable before entering the public market.
"We did 74 percent revenue growth last year, and we're growing about that fast this year, so we've said we're on track to be $100 million revenue business in the near future and from there, the sky's the limit," he said.
The complete history of the CNBC Disruptor 50
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a1c4c79cdeba30eb3f7953a71aa9986f | https://www.cnbc.com/2017/05/19/man-detained-after-trying-to-break-into-honolulu-bound-american-airlines-flight.html | Military jets scramble to escort Honolulu-bound American Airlines flight after cockpit incident | Military jets scramble to escort Honolulu-bound American Airlines flight after cockpit incident
American Airlines flight 31 on the tarmac in Honolulu after a disturbance was reported mid-flight on May 19, 2017.Photo: Jaren Yang
Two military fighter jets escorted a Honolulu-bound American Airlines aircraft on Friday after a man allegedly tried to break into the cockpit.
The airline said Flight 31, an Airbus A321 aircraft, landed safety at Honolulu International Airport at 11:35 a.m. local time. The flight originated from Los Angeles International Airport.
"Two Pacific Command F-22 Raptors from the Hawaii Air National Guard scrambled this morning in response to a reported disturbance on a civilian airliner making an approach to Honolulu International Airport," U.S. Navy Commander Dave Benham told CNBC in an emailed statement.
According to the U.S. Pacific Command spokesman, the fighter jets "escorted the airliner to the airport in accordance with homeland defense procedures. Local law enforcement responded once the civilian airliner was on the ground."
"Due to a disturbance during the flight, the crew requested that law enforcement meet the aircraft upon landing in Honolulu," American said. "American is in touch with federal law enforcement."
One of the passengers on the flight has since posted video on Instagram that appears to have been filmed after the plane landed. It shows a handcuffed individual being taken off the plane by FBI agents.
The incident happened about two hours before the flight landed in Honolulu, according to the FBI's Honolulu field office.
"A disturbance aboard a flight alarmed flight crew to the point where an off-duty law enforcement officer and others subdued a passenger," the FBI office said in a statement. It confirmed the individual who caused the apparent disturbance was taken into custody when the plane landed.
Also, the FBI said passengers were escorted off the plane and interviewed as part of the agency's ongoing probe into the incident.
The FBI identified the man as a Turkish national, Anil Uskanil. FBI special agent Paul Delacourt told reporters Friday the government was preparing a complaint to charge Uskanil for interference with a flight crew. As a precaution, the FBI also said he was taken for a medical evaluation.
The 25-year-old Uskanil was involved in another incident early Friday morning that caught the attention of law enforcement, according to police at Los Angeles International Airport.
LAX police said in a statement they received a radio call around 2:45 a.m. local time on Friday about a passenger going through a door from the terminal concourse that led onto the airfield ramp. They said Uskanil, a ticketed passenger who had gone through U.S. Transportation Security Administration (TSA) screening, was allegedly spotted by an alert contractor and detained.
Police said they investigated the incident at LAX and "Uskanil was arrested for misdemeanor trespassing, cited, given a pending court date and released from custody."
The Turkish national was allowed to board Flight 31 for Hawaii despite the morning incident at LAX. A spokesman for TSA defended allowing him to get on the passenger plane.
"From our perspective, he met the requirements that we had to get him on an airplane," TSA spokesman Nico Melendez said Friday "He did something post-security that police dealt with as they thought they should."
The aircraft departed at 8:34 a.m. local time from LAX with 181 passengers and six crew members on a flight that lasted about six hours.
"Several hours in, passengers and authorities said, he allegedly tried to break through the cockpit door, throwing himself up against a beverage cart as he tried to force his way into the first-class cabinet," HawaiiNewsNow reported.
NBC station KHNL of Honolulu interviewed several passengers who described the terrifying scene.
"I was just laying there sleeping, I get up, hear a noise," passenger Tainoa Foster recalled. "Everybody's like kind of freaking out. I look up and a man has a blanket over his head, and they're like can somebody please help."
Added Foster, "I thought he was like tripping at first but I guess .... [he] rushed the cockpit."
"Well, it was all kind of surreal," passenger Peggy Lorenzen told the Honolulu station. "It all transpired ... so quickly — him rushing the cockpit. It was pretty serious what was going on."
Added Lorenzen, "There were some sturdy guys back there that were helping hold him down."
The FBI said interviews confirmed that the cockpit door of the American Airlines plane was not breached. They also confirmed the suspect was in the aisle way of the plane but said it was "unclear" exactly what his motivation was at the time.
Bomb technicians searched the jetliner and personal belongings of the suspect, and no explosives were found, according to the FBI. American Airlines said the aircraft returned to service Friday night.
The U.S. Department of Homeland Security said Secretary John Kelly was briefed on the incident. "DHS is prepared to assist other federal and local law enforcement agencies as they investigate the incident," DHS said.
"This unfortunate incident highlights the tremendous professionalism of American's team members, and specifically, in this situation, our flight attendants," American Airlines said in a statement Saturday. "Their decisive actions ensured the safety of everyone onboard the flight."
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46112021003503b3a51dd7d76beffcd3 | https://www.cnbc.com/2017/05/19/russia-trump-putin-us-relations-have-become-extremely-paranoid-says-ceo-of-russias-largest-bank.html | Russia-US relations have become 'extremely paranoid', says CEO of Russia's largest bank | Russia-US relations have become 'extremely paranoid', says CEO of Russia's largest bank
VIDEO3:3403:34Sberbank CEO: For now, there’s little chance of any changes in US-Russian relationsSquawk Box Europe
Diplomatic relations between America and Russia have deteriorated to such an extent that contacts between the two countries have become extremely paranoid of one another, the chief executive of Russia's largest bank has told CNBC.
"From what we see here in Russia and from the programs we see from the U.S., the unfolding situation is fairly complex. And there are certain signs of a certain... paranoid attitude to Russia and to every single contact with Russia real or imagined," Herman Gref, CEO, said via a translator.
The White House has been enveloped in political turmoil since last week, after President Donald Trump fired James Comey, then director of the FBI, as it investigated possible ties between the Trump campaign team and the Kremlin.
U.S. intelligence agencies believe Moscow tried to advance the likelihood of a Trump victory in November's presidential election. At a news conference on Thursday, Trump again denied any collusion with Russian contacts during his election campaign.
When asked whether Gref harbored any concerns about the consequences of having met with Trump in the past, he replied, "I think the situation has become extremely paranoid for one to suspect that these sort of contacts could lead to political consequences."
VIDEO5:3805:38The inability to access international markets is painful, says Sberbank CEOSquawk Box Europe
Speaking in January at the World Economic Forum in Davos, Sberbank's CEO had predicted the Trump administration could re-establish close ties with the Kremlin and expressed his hope the newly-elected U.S. president could mark a "new beginning" for the two countries.
On Friday, Gref suggested it was still too early to judge the success of Trump's presidency however conceded that, for the time-being at least, relations between American and Russia were unlikely to change for the better.
Moscow is currently enduring the sharp end of tough international sanctions from Washington as a result of its annexation of Crimea and alleged part in the destabilization of eastern Ukraine.
"Well, I have to say that this has had an effect on us in the last two years… The inability to access international markets is painful for us," Gref said.
"You know, sanctions were put in place for political reasons and most likely their removal will also be motivated by politics… To some extent (it) is a kind of deadlock which has resulted in us to predicate our three-year strategy towards a more negative scenario that does not foresee an end to the sanctions," he added.
VIDEO1:1601:16Planning to set a record on net profit in 2017: Sberbank CEOSquawk Box Europe
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52616fe8004b2e5c10bf4befdf25ec86 | https://www.cnbc.com/2017/05/19/trump-to-russians-in-oval-office-firing-nut-job-comey-eased-pressure-nyt.html | Trump to Russians in Oval Office: Firing 'nut job' Comey eased pressure, NYT reports | Trump to Russians in Oval Office: Firing 'nut job' Comey eased pressure, NYT reports
VIDEO5:0105:01White House responds to New York Times and Washington Post reportsClosing Bell
In an Oval Office meeting last week, President Donald Trump reportedly told Russian diplomats that ex-FBI Director James Comey is a "nut job" and that firing him relieved "great pressure," according to The New York Times.
"I just fired the head of the FBI. He was crazy, a real nut job," Trump reportedly said. "I faced great pressure because of Russia. That's taken off."
The newspaper cited a document summarizing the meeting. The summary was read to the Times by an American official.
The newspaper notes that press secretary Sean Spicer "did not dispute the account." The White House also did not dispute it when asked subsequently by NBC News.
The White House spokesman said in a statement to CNBC that Comey "created unnecessary pressure on our ability to engage and negotiate with Russia."
President Donald Trump (C) and Russia's Foreign Minister Sergei Lavrov (L) meet at the Oval Office of White House in Washington, D.C., on May 10, 2017.Alexander Shcherbak | TASS | Getty Images
The meeting with Russia's foreign minister, Sergey Lavrov, and its ambassador to the U.S., Sergey Kislyak, came a day after Trump abruptly fired Comey. The FBI is investigating Russian meddling in the 2016 U.S. election.
That probe extends to looking into any possible ties between the Trump campaign and the Kremlin. The Justice Department this week appointed former FBI Director Robert Mueller as a special counsel in the investigation.
The president on Thursday muddled his explanation for firing Comey last week, saying he ousted him because he was "very unpopular with most people." He also highlighted the "very, very strong recommendation" he got from Deputy Attorney General Rod Rosenstein.
However, Trump told NBC News last week that he would have fired Comey "regardless" of what the Justice Department said. He added that he was thinking of the "Russia thing" when he did so.
Read the full Times story here.
Watch: Trump says firing Comey eased pressure
VIDEO1:3701:37Trump told Russians firing Comey eased pressureClosing Bell
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a8a14fc82dd5775d9f752046576a3113 | https://www.cnbc.com/2017/05/20/george-zachary-cancer-scare-led-to-health-tech-biotech-investments.html | This VC had a near-death experience and it totally changed what he invests in | This VC had a near-death experience and it totally changed what he invests in
VIDEO3:1003:10Why top Silicon Valley VC George Zachary is placing all of his bets in biotechDigital Original
Silicon Valley investor George Zachary has a knack for betting early on Internet successes, with Twitter and Microsoft-owned Yammer among his lucrative wins.
But you won't hear the venture capitalist touting those businesses anymore. Not since a doctor gave him the scare of his life. Two years ago, a sudden bout of intense abdominal pains sent Zachary, now 51, to the emergency room at Stanford University Medical Center for some tests and an X-Ray.
The next morning, Zachary got a call from the radiologist that changed everything. A mass the size of his fist was located near his pelvis. Based on a preliminary analysis of the image, the doctor said that it looked like sarcoma, a rare cancer found in connective tissues.
"I nearly fell off my chair," recalled Zachary, a general partner at Charles River Ventures, after hearing the doctor utter the word cancer for the first time. "That started the process of me learning whether I was going to live or die."
What followed was a firsthand view of a broken healthcare system that forced Zachary to take matters into his own hands, in a desperate effort to get timely answers and accurate results.
It's a story he's kept quiet about publicly until now. And it was the impetus for shifting his investment area away from consumer internet and software businesses, into what he describes as "advancing health through computer science."
"My experience as a patient was insane," he said. "I couldn't believe how screwed up the health system was."
George ZacharyJeniece Pettitt | CNBC
It all started in 2010, when Zachary went on a health kick. His family has a history of heart disease and two close friends died of cancer in recent years. Zachary, who has a twin boy and girl, started testing his blood monthly, exercising regularly and experimenting with a protein-rich diet, inspired by his Greek ancestors.
Then came the excruciating pain in 2015 that led him to the hospital. He thought it was related to statins he'd been taking as a preventative measure. Following the X-ray, he knew it was far more serious, but he struggled to get answers. It would take two terrifying months to get a diagnosis.
"It was rough," recalled Zachary's close friend Jamis MacNiven, owner of the legendary Silicon Valley restaurant Buck's of Woodside. "We all sent him off to different specialists that we knew, but it was weeks before it was definitive."
My experience as a patient was insane.George Zacharypartner at Charles River Ventures
An MRI couldn't be scheduled for several weeks. And after tapping his network of friends and family in the medical field, Zachary learned that a tissue biopsy could pose some serious risks. If the mass was malignant, an operation could cause the cancer to spread. When he asked his doctor about it, Zachary said the response was, "Do you have a medical degree?"
A pathologist at Stanford later diagnosed Zachary with a lipoma, a non-cancerous tissue growth that's typically not life-threatening. Zachary's gut told him there was more to it, but he couldn't convince the pathologist to take a second look. That was despite Zachary being categorized as a "VIP" after administrators learned of his successful venture career.
Eventually, Zachary headed north to San Francisco's UCSF Medical Center. His fears were confirmed: The mass was not a lipoma and it needed to be removed.
The decision to have surgery was particularly frightening. The surgeon told Zachary that he may have to amputate his leg to help curb the spread of the cancer. With a sense of helplessness, Zachary agreed to let him do it if necessary.
Hours later, he was relieved to wake up with both legs. And there was more good news: The tumor was benign. Zachary would live.
Zachary didn't immediately jump into biotech investing after his recovery. For a time, he continued to meet with tech startups, but he fell into cycles of denial and depression.
"Some blah blah blah app would come in, but I wasn't receptive to listening to any tech-related thing," he said.
On a family vacation in the Virgin Islands the following summer, Zachary made the decision to invest in an area that would make a difference and save lives. When he returned, he told his partners that he had to change direction towards health care, or he would need to step aside. The experience of feeling like a "dead man walking," as he put it, got him thinking about other patients that lacked his network and resources.
Jeniece Pettitt | CNBC
"I needed to do something to help these people," he said. "That didn't necessarily mean bringing them a new better version of an app; it meant giving them the ability to live."
In April, Zachary addressed a roomful of CRV's limited partners about his new passion. He talked at length about the growing market for what he was calling "deep insight bioengineering," which would reshape the multi-trillion dollar health system. He said that he wouldn't be a traditional biotech investor, putting money into promising scientific research that requires decade-long development cycles.
What he saw instead was an opportunity to bring new technologies like machine learning to medicine, to help surface new diagnostic tools and therapies.
He got the green light, turning CRV into one of a growing number of Silicon Valley tech firms to focus on health care. Investors poured $4.2 billion into the intersection of health and technology in 2016: Andreessen Horowitz now has a bio fund, GV (formerly Google Ventures) has doctors and academics on its team, and Khosla Ventures has made a number of early-stage health hardware bets. CRV had made a few health-tech bets in the past, led by Zachary.
Some blah blah blah app would come in, but I wasn't receptive to listening to any tech-related thing.George Zachary
Annie Kadavy, a former CRV investor, said Zachary was obsessive about doing his homework when assessing a deal.
"He was always the partner that had the most interest in health," said Kadavy, who sat with Zachary in dozens of briefings. "He'd walk into the meeting with a digital health founder, and know just as much, if not more, about the market."
Traditional life sciences investors have mixed feelings about Silicon Valley's heightened interest in the space, especially if tech investors bring the hype and drive up valuations to Internet company levels.
"I hope that (new) backers understand that patients' lives are at stake," said Alexis Borisy, a partner at biotech firm Third Rock Ventures, speaking about the growing number of tech investors in the space.
On one cross-country flight, Zachary ended up seated next to a seasoned biopharma venture capitalist, who was looking into a health-tech company that Zachary was also pursuing. (Zachary declined to name the investor to avoid jeopardizing their relationship.)
As they were talking, the investor asked, "What did you do your PhD in to think you can invest in this area?" Zachary recalled.
Zachary responded that he didn't have a PhD. And neither, he added, did his friend Elon Musk, who's now developing autonomous cars and supersonic rockets.
"I would say every minute I am learning about this space," Zachary said. "It's very different than investing in tech."
His first deal was a start-up called Freenome. To make the case to his partners, Zachary wrote a 16-page memo. He spent six weeks doing his homework, which he said is more than the "sum amount of diligence" he did in the past 10 years of his venture career.
Freenome aims to use machine learning to detect early signs of cancer in the blood. To succeed, it will need to demonstrate the efficacy and accuracy of its test in a series of costly clinical trials, and then win over clinicians.
"He seemed really committed and read all the scientific papers that our technology was based on," said Gabriel Otte, a co-founder of Freenome. "We were very selective of our tech investors and wanted to make sure they had either knowledge or experience in our space."
Zachary isn't interested in trivial advances. He wants to invest only in companies that are chasing "big enough breakthroughs" to save lives and prevent their families from experiencing unnecessary misery.
He remembers what it was like being in a hospital bed, surrounded by other patients.
"I saw people with cancer waiting to hopefully live to return to their families and $15-an-hour jobs," said Zachary. "All I know is that I wanted to stay alive to take care of my wife and kids."
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6dbf1010342de0764226797aa86d465e | https://www.cnbc.com/2017/05/20/us-saudi-arabia-seal-weapons-deal-worth-nearly-110-billion-as-trump-begins-visit.html | US-Saudi Arabia seal weapons deal worth nearly $110 billion immediately, $350 billion over 10 years | US-Saudi Arabia seal weapons deal worth nearly $110 billion immediately, $350 billion over 10 years
VIDEO1:3401:34Trump's billion-dollar deals abroadSquawk Box
The United States sealed a multibillion arms deal with Saudi Arabia, the White House announced on Saturday, a move that solidifies its decades-long alliance with the world's largest oil exporter just as President Donald Trump begins his maiden trip abroad as leader of the free world.
The agreement, which is worth $350 billion over 10 years and $110 billion that will take effect immediately, was hailed by the White House as "a significant expansion of…[the] security relationship" between the two countries.
Simultaneously, Saudi Arabia is in a broad-based push for economic reform, and as part of that effort signed a flurry of deals with private U.S. companies worth tens of billions of dollars.
Lockheed Martin, one of the world's largest defense contractors whose technology was part of the U.S-Saudi accord, said in a statement that the deal "will directly contribute to [Saudi Arabia's] Vision 2030 by opening the door for thousands of highly skilled jobs in new economic sectors."
The arms package represents an enhancement of Saudi Arabia's military capabilities as tensions flare in the region, with the U.S. viewing the Saudis as a linchpin in efforts to check the global ambitions of Iran. The country, the hub of Islam's most revered sites, but is also a target of radical Islamic extremism.
"This package of defense equipment and services support the long-term security of Saudi Arabia and the Gulf region in the face of Iranian threats, while also bolstering the Kingdom's ability to contribute to counter terrorism operations across the region, reducing the burden on the U.S. military to conduct those operations," the White House said in a statement.
For the Saudis, Trump's visit represents a diplomatic and public relations coup for Mohammed bin Salman, the Kingdom's 31-year old deputy crown prince. The U.S.-Saudi partnership has been fraught with controversy since the Sept. 11 attacks, which culminated last year in a Congressional vote to allow 9/11 families to sue the country for its suspected links to the attackers.
Saudi Arabia is the primary destination for U.S. arms sales, according to the Council on Foreign Relations, with the Kingdom purchasing nearly 10 percent of U.S. exports from 2011 to 2015.
We welcome @POTUS Trump to KSA. Mr. President, your visit will strengthen our strategic cooperation, lead to global security and stability.
The pomp and circumstance of the two-day Saudi visit also gives Trump — who sold himself to voters as an inveterate deal maker — a victory to merchandise abroad, just as his political pressures have intensified at home.
Over the course of the last week, the White House has been overwhelmed by news stemming from an inquiry into the Trump campaign's alleged links to Russia, and the abrupt dismissal of former FBI Director James Comey.
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3b2cfe40e650bcf15779248502fc5de0 | https://www.cnbc.com/2017/05/21/this-bull-market-might-not-be-hated-but-it-still-isnt-trusted.html | This bull market might not be hated, but it still isn't trusted | This bull market might not be hated, but it still isn't trusted
A statue of a girl facing the Wall Street Bull in the financial district in New York.Brendan McDermid | Reuters
Hate, as your mother probably told you, is a strong word, and it no longer seems to capture the public's attitude toward stocks. Yet the typical investor still doesn't quite trust this market, feeling wary of its heights and suspicious of its foundations.
The way this mistrust plays out from here will be a big factor helping to determine how long and far the bull market can carry on.
Investor ambivalence can be glimpsed from a few angles. The monthly Bank of America Merrill Lynch global fund manager survey shows a record percentage of pros see a "just right" investment backdrop of strong growth and low inflation. Yet those calling stocks "overvalued" is also near record highs, and cash levels remain above average — hints of caution tempering the optimism.
Yale economist Robert Shiller has surveyed professional and amateur investors for decades about their market expectations. Right now, both groups' confidence that stocks will rise over the next year is near a multi-decade high. Yet the counterpart "Buy the Dips" and "Crash Confidence" indexes show elevated anxiety that the good times could end suddenly and painfully.
Other surveys show a fairly familiar pattern, with professional investors (tracked by Investors Intelligence, Market Vane, National Association of Active Investment Managers) largely bullish, refusing to fight a sturdy tape, while Main Street's faith in stocks is fragile, with the latest American Association of Individual Investors poll showing just 24 percent bullish on equities.
Source: www.aaii.com
The movement of real investor cash conveys mixed messages of its own. Flows into stock funds have been uneven, with net withdrawals over the past three weeks as the market stalled near record highs. And when money does go into stock funds, it's overwhelmingly into passive index vehicles.
Year to date, $178 billion has gone into index funds, with $52 billion exiting actively managed portfolios that seek to beat an index. Since the end of 2008, there have been net redemptions from domestic equity funds, with the $756 billion into exchange-traded funds not quite offsetting the $877 billion out of traditional mutual funds. And over the past decade, Merrill says, $2.2 trillion has entered passive funds while the same amount fled active.
It's tough to pull a clear investor-sentiment signal from the sheer dominance of index funds. On the one hand, low-cost passive investments are simply a better mousetrap in many respects, one that's finally reached mass adoption.
Some argue that investors' willingness simply to accept the broad market's return shows a lack of the greed and hubris that often accompanies market peaks. Yet indexing also tends to be embraced in the latter stages of bull markets, as the public figures the asset class itself will give them plenty without paying a manager to try and outsmart it.
It's worth noting that whatever investors say and however they direct their marginal dollar, the public is plenty exposed to stocks right now, thanks mostly to market appreciation. Ned Davis Research tracks the percentage of household financial assets in equities, using Federal Reserve data. At last look it was 38.5 percent — well above the 28 percent long-term average and higher than at any time aside from the late-'90s bubble.
Seeing market metrics that are "highest ever aside from the Tech Bubble" has become commonplace. Broad equity valuations fit that description. The trailing price/earnings ratio on the median stock is now 23.8, likewise the highest outside of the years 1997-2000.
BAML equity strategist Savita Subramanian last week set out a thoughtful mock conversation between bulls and bears, detailing each group's prevailing arguments about valuation, growth, financial risk and the age of the economic cycle.
Her bottom line: We're overdue for a 5 percent-plus pullback, but with few signs of a bear market visible she sees stocks slightly higher by year-end: "Our work continues to suggest upside risk to stocks, driven by the simple fact that we have yet to witness euphoria on stocks."
Euphoria, presumably, defined in late-'90s terms.
Ever since Barry Ritholtz of Ritholtz Wealth Management called the then-six-month-old upswing "The Most Hated Rally in Wall Street History" in October 2009, observers have noted the skepticism surrounding this market cycle.
To many investors traumatized by two 50-percent market drops in the past 17 years, this bull market has been easy to denigrate — as conjured by central banks, goosed by cheap debt and share buybacks or unrepresentative of a slow-growth economy producing miserly wage gains and social unrest.
Yet it's worth asking whether all bull markets must last long enough for the man and woman on the street to get giddy.
Nearly a decade ago, I wrote a Barron's cover story about the conspicuous absence of the euphoric little guy in that bull market. The arguments paralleled those of Subramanian: Sure stocks weren't cheap and the pros were all in, but can we have a market top without small investors fully involved?
The article quoted a seasoned strategist thus: "One reason we remain cyclically positive on the broad market is that retail investors still have not participated. Instead, the public remains infatuated with global equities and corporate bonds. It is doubtful that the equity market would cyclically peak before the retail-investor enthusiasm for stocks had reached a more fevered pitch."
The article was published July 23, 2007. The , it turned out, had only about 2 percent more upside over the next two-and-a-half months before the bear market, Great Recession and global financial crisis struck.
Yes, there were many extreme extenuating circumstances then: The public's greed, over-investment and excess borrowing had been going on outside of stocks in houses, and the credit markets were already under heavy stress at the time.
Today, credit is steady, corporate earnings are rising, economic excesses are largely in check and every little wobble in the market — such as last week's one-day dip — brings out overheated doomsday talk. The S&P 500 is up only 12 percent the past two years, and in the broad market half of all stocks are down 10 percent or more from the high — a discriminating, selective market pushing slowly higher for now.
Still, that 2007 example should give pause to anyone who thinks that all markets are safe from harm unless and until Main Street starts fully trusting Wall Street again.
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690cc7cc2f38a62f5e1afb99df433d34 | https://www.cnbc.com/2017/05/22/amazon-shareholders-meeting-protest-prime-air-pilots.html | Amazon Prime Air pilots are heading to shareholders meeting to confront execs over low wages | Amazon Prime Air pilots are heading to shareholders meeting to confront execs over low wages
VIDEO0:5200:52Dozens of Amazon Prime Air pilots plan to protest at the company's shareholders meetingNews Videos
When Mike Griffith, a career pilot, learned last year that his company Atlas Air signed a big contract to fly for Amazon's Prime Air program, he was ecstatic to take part in what he believed to be the future of logistics.
Twelve months later, Griffith's excitement has turned to angst. Dozens of his colleagues have fled for higher pay and better benefits elsewhere, whether cargo operations like UPS or commercial airlines like Delta.
Griffith, 52, is so concerned about his company's ability to hold up its end of the Amazon deal that he's heading to Seattle for its shareholders meeting on Tuesday. Griffith will be picketing along with about 50 other pilots from Atlas and air cargo conglomerate Air Transport Services Group (ATSG), which also has a contract with Amazon.
"Shareholders are being sold a bill of goods by vendors saying that they can bring in labor at below-market rates and make it successful," Griffith said in an interview on Friday from his home in Los Angeles. "We're seeing record attrition."
Griffith said that a report released internally showed that Atlas lost 92 pilots in the first four months of the year, double the number it lost in all of 2016.
Last week, the International Brotherhood of Teamsters, which represents pilots at Atlas and ATSG, sent a letter to Amazon's board expressing concern that "our employers, in their efforts to contain costs, will hamper Prime Air's growth and ultimately force Amazon to reconsider the strategic development of Prime Air."
Ken Hall, the union's general secretary-treasurer, said in the letter that he welcomes a meeting with Amazon executives to discuss the problem and potential solutions.
VIDEO0:0000:00Amazon Prime Air will deliver a package to your doorDigital Original
Amazon investors have reason to care. The company is trying to build out an end-to-end supply chain to control every aspect of freight delivery and storage as it aims to provide even faster service to Prime members. As Amazon sees it, Prime Air will eventually mean drone delivery to your door.
For now, it's about airplanes. Last year, Amazon agreed to lease 20 planes each, including crew, maintenance and insurance, from Atlas and ATSG, with operations expected to be fully up and running by 2018.
Additionally, Amazon acquired warrants to buy up to 20 percent of each carrier over a five-year period. As of Friday's close, 20 percent of the two companies had a total value of $516 million. At Atlas, the stake could eventually increase to 30 percent.
The pilots are taking the case straight to Amazon, because they say their own executives won't talk to them and contract negotiations are at a standstill. They want Jeff Bezos to use his clout to put pressure on the carriers before it's too late.
"Everyone wants the company they work at to be a success," said Griffith, who's worked at Atlas for 19 years. "That flows to better contracts in the future, more work and continuous work."
An Atlas spokeswoman said in an email that the company is meeting all of its customer commitments and will continue to do so. The company had 1,700 pilots at the end of 2016, an increase of 600 over a two-year span. In complaining about employee churn, the pilots and union are attempting to pressure the company in contract negotiations, she said.
"We remain committed to negotiating a competitive, single-collective-bargaining agreement in accordance with the terms of our existing labor agreements, which recognizes our pilots' valued contributions," she said.
An ATSG representative said the company's airlines have "had no attrition issues, nor have they had a problem attracting new hires." All but two of the aircraft in the Amazon contract have been delivered and the other two are scheduled in coming months. "We have complete confidence in our ability to fulfill the terms of our contracts," the spokesman said.
According to the letter from the Teamsters to Amazon, Atlas and ATSG pay their pilots 50 to 60 percent below the prevailing market rate. On top of that, Griffith said his employer has no retirement benefits apart from a basic 401(k) plan.
An Amazon-branded Boeing 767 freighter, nicknamed Amazon One, flies over Lake Washington during the Seattle Seafair Air Show on Aug. 5, 2016 in Seattle.Getty Images
While cost-cutting was the name of the game for many years, the trend has changed now that carriers are facing a severe pilot shortage. Delta agreed to give its pilots a 30 percent raise by 2019, and American Airlines said last month that pilots are being offered 8 percent midcontract raises. United also bolstered its pay.
The industry has an even bigger shortage problem ahead. The Teamsters' letter to Amazon said that 35 percent of current U.S. pilots are likely to retire over the next 10 years and that demand will outstrip supply by up to 15 percent. Amazon is currently partnering with companies on the wrong side of the market, the letter said.
"Career destination airlines are having little trouble staffing their operations and fulfilling commitments to customers, while all other air carriers have become a revolving door," the union wrote. "Pilots enter and then rapidly exit the business, creating massive training and staffing difficulties — not to mention added costs — which impede these air carriers' ability to deliver on customer expectations."
An Amazon spokesman said that while questions about the working environments of particular partners are best answered by them, "we are pleased with our partners' performance and their continued ability to scale for our customers."
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75b9fea438227b72bc37ec8dd7acaf59 | https://www.cnbc.com/2017/05/22/heres-how-apples-stock-can-get-to-a-1-trillion-market-cap-in-2018-rbc-capital.html | Here's how Apple's stock can get to a $1 trillion market cap in 2018: RBC Capital | Here's how Apple's stock can get to a $1 trillion market cap in 2018: RBC Capital
A man holds his new iPhone 7 at an Apple store in Beijing.Thomas Peter | Reuters
Investors should buy Apple shares because the iPhone 8 and its services business may drive the company's value above $1 trillion next year, according to RBC Capital, which reiterated its outperform rating on the smartphone maker."We believe AAPL's current stock price creates an attractive entry point for investors to benefit from its ability to return to revenue and EPS growth in FY17," analyst Amit Daryanani wrote in a note to clients Monday entitled "The path to a trillion dollars – yes, we can." "AAPL has potential to achieve a $1.0 trillion dollar market cap and even surpass that over the next 12–18 months," he added. Daryanani raised his official price target for Apple to $168 from $157, representing 10 percent upside from Friday's close. Apple has a market value of $798 billion, according to FactSet, so his target does not get the shares to the $1 trillion mark.However, the analyst shared the financial inputs of his trillion-dollar market value scenario for Apple:
"(1) higher revenue growth through FY18/19 (mid- to high-single-digit) driven by ASP [average selling price] tailwind (blended ASP ~ $800) and unit growth; (2) gross margins expanding by 20–30bps (services contribution offset by iphone BOM); (3) operating margins expanding by ~100bps via. SG&A controls; and (4) sustained buyback-driven tailwinds enabling low-teens EPS growth; and (5) repatriation tailwind (not baked into our scenario but could add upside to EPS)."
Daryanani cited the upcoming "premium-priced" iPhone 8 and "high teens" annual growth from Apple's services business as key drivers for the tech giant's future financial results. "In aggregate, we see a scenario where in FY19 AAPL sustains $12+ EPS and, assuming the valuation frameworks remains stable/improves, it should get AAPL stock toward $192–195/sh, which would equate to market cap > $1.0 trillion," he wrote. Apple is one the best-performing stocks in the market this year. Its shares are up 32 percent year-to-date compared with the 6 percent return in the same time period.
Currently only one out of 38 analysts, Drexel Hamilton's Brian White, has a price target for Apple that values the company at over $1 trillion, according to FactSet.
— CNBC's Michael Bloom contributed to this story.
Disclaimer
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e0510eaac22e1520ad21e17618224760 | https://www.cnbc.com/2017/05/22/tax-reform-could-reduce-charitable-giving-by-up-to-13-billion-per-year.html | Tax reform could reduce charitable giving by up to $13 billion per year | Tax reform could reduce charitable giving by up to $13 billion per year
VIDEO3:3803:38Charitable giving and capital gainsYour Money, Your Future
The charitable tax deduction has been a part of the U.S. tax code for a century. During last year's U.S. presidential campaign, then-candidate and now President Donald Trump proposed capping the deduction for wealthy taxpayers but backed off that idea in his latest tax plan.
Yet tax reform could reduce donations even if capping charitable deductions isn't part of current proposals from the White House and Republican lawmakers.
A doubling of the standard deduction and cutting the top tax rate to 35 percent, from nearly 40 percent, would reduce charitable giving by up to $13 billion annually, according to new research by the Indiana University Lilly Family School of Philanthropy. The analysis was commissioned by Independent Sector, which is a coalition of nonprofits, foundations and corporate giving programs.
"On the margins, we see charitable giving respond to tax incentives, even with giving to religious organizations," said Patrick Rooney, associate dean for academic affairs and research at the IU Lilly Family School of Philanthropy, who worked on the analysis.
Here's a comparison of how charitable deductions are treated under current law, Trump's latest tax plan, the House Republicans' blueprint and the 2014 Tax Reform Act proposed by former House Ways and Means Committee Chairman Dave Camp:
Under current tax law, you can deduct charitable contributions of money or property made to qualified organizations if you itemize your deductions. Generally, you can deduct up to 50 percent of your adjusted gross income in charitable contributions, but deductions can be limited to 20 percent to 30 percent of your income in some cases.
Lowering the top tax rate would mean that a charitable deduction would be worth about 35 cents on the dollar under tax reform if the rate is cut to 35 percent, compared to 40 cents on the dollar now.
Increasing the standard deduction under tax reform would mean that there would be a higher hurdle to claim the charitable deduction. Why? Because you have to itemize in order to earn that tax break. Currently, only about 30 percent of taxpayers itemize their returns.
To be sure, $13 billion is less than 4 percent of the $373.25 billion Americans gave in 2015 to charity, according to the Giving USA Foundation. "The magnitudes that [the researchers] are talking [about] are not particularly big," said Scott Greenberg, an analyst with the Center for Federal Tax Policy at the Tax Foundation.
More from Your Money Your Future: Frugal retirees ditch 4 percent rule, hoard savings instead An IRA strategy if you think tax reform happens by next year Six common myths that can really mess up your retirement
Tax reform is a moving target. Republican lawmakers in the Senate have yet to unveil details for how they will approach any changes. A recent Quinnipiac University poll shows poor support for Trump's tax plan. And Goldman Sachs is worried that Wall Street is too sanguine about the prospects of tax reform given the legislative uncertainty.
This is not the first time charitable giving has been threatened by tax reform. President Barack Obama tried to cap the charitable deduction for high-income taxpayers in his budget proposals during the later years of his administration but failed to get any traction in Congress.
"Charitable giving is a small piece of a much bigger puzzle," said Eugene Steuerle, a fellow at the Urban Institute who has researched tax policy and its effects on charities. "Giving might go down under tax reform, but it is not going to be wiped out."
Worried about how tax reform might affect your giving? Financial advisors recommend you accelerate your donations now to get a bigger tax benefit or use a donor-advised fund that allows you to make a charitable contribution, receive an immediate tax break and then recommend grants from the fund to your favorite charities over time.
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079169620981fa49b2419e65113a9a47 | https://www.cnbc.com/2017/05/22/white-house-to-pay-insurers-while-obamacare-case-kept-on-ice-sources.html | White House to pay insurers while Obamacare case kept on ice: Sources | White House to pay insurers while Obamacare case kept on ice: Sources
Getty Images
The House of Representatives and Department of Justice plan to ask the District of Columbia federal appeals court Monday to keep on hold for another 90 days a lawsuit that questions the legality of cost-sharing subsidies in the Affordable Care Act, according to four people familiar with the matter.
The White House, during that time, will continue to make payments to insurers, according to a senior administration official.
The payments, called "cost-sharing reductions," represent billions of dollars annually to the insurance industry to offset plans for low-income participants on the ACA exchanges.
Insurers intending to offer plans on Obamacare exchanges in 2018 must submit their proposed pricing in the coming days and weeks.
If the executive branch had decided Monday to drop its defense of the case — which would then let stand a federal judge's decision that the payments to insurers were illegal — insurers were expected to request even higher premium rates for Obamacare health plans next year than they otherwise would have.
However, the delay in resolving the case will continue uncertainty over the fate of the cost-sharing subsidies, which also could cause insurers to price plans higher to reflect the chance the money might go away by next year.
The dispute relates to the ACA's requirement that insurers offer lower-income Obamacare customers reduced charges for out-of-pocket health expenses, including copayments, deductibles and coinsurance. Insurers offer those discounts up front, but then expect to be reimbursed for them by the federal government.
A federal district court judge had previously ruled in favor of House Republicans, who in 2014 sued over billions of dollars in payments to insurance companies under the Affordable Care Act because they had not been granted via a congressional appropriation. The Obama administration appealed the case, and the Trump administration asked to put the case on hold while it established its position on the matter.
In February, the judge requested the two parties to submit status reports every 90 days beginning Monday.
The expected request for a delay would give the parties an additional 90 days to decide how to proceed in the case.
"If the administration seeks a delay on Monday, presumably they would continue to pay the cost-sharing reductions but they don't have to actively defend the lawsuit in the short term," said Chiquita Brooks-Lasure, a managing director at Manatt Health, who as an Obama administration official played a key role in implementing Obamacare.
The White House had told congressional leaders it would make the monthly payment for May, which were due on May 19, but had stayed mum on payments thereafter. Next month's payment is due June 20.
President Donald Trump reserves the right to unilaterally cut off the payments, made monthly by the Department of Health and Human Services, if he disagrees with a recommendation to do otherwise.
In an interview with The Economist on May 4, Trump weighed that option publicly, saying: "You know when people say, 'Oh, Obamacare is so wonderful,' there is no Obamacare, it's dead. Plus we're subsidising it and we don't have to subsidise it. You know if I ever stop wanting to pay the subsidies, which I will."
With passage of any new health-care legislation still months away, a senior administration official and four people familiar with the case expect the parties on Monday will suggest keeping the lawsuit on ice.
The implications of the case for the insurance industry could be costly. The Congressional Budget Office estimated the Department of Health and Human Services would pay some $7 billion in subsidies — technically termed "cost-sharing reductions" — and that total would rise to $16 billion by 2027.
Democratic attorneys general and eight health-care industry groups have voiced concerns in the days leading up to Monday's deadline.
A joint letter sent to Senate leadership by the industry groups — spearheaded by America's Health Insurance Plans acknowledges that the Senate is working toward a legislative solution but asks for stability in the intervening months. "Unless CSRs are funded, a tremendous number of Americans will simply go without coverage and move to the ranks of the uninsured," the groups wrote.
The civil division of the Department of Justice and the House of Representatives general counsel's office declined to comment. The Department of Health and Human Services did not respond to multiple requests for comment. The White House Press Office did not respond within deadline.
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1616b30d748cdef4674b957e4732e247 | https://www.cnbc.com/2017/05/22/world-champion-go-player-takes-on-googles-alphago.html | World champion Go player takes on Google's AlphaGo | World champion Go player takes on Google's AlphaGo
Computer hackers can be foiled if users take precautions when banking online.David Woolfall | Getty Images
WUZHEN, China -- It's man versus machine. The world's number one champion of the ancient Chinese board game Go is battling against a computer program built by Google in a set of three matches beginning Tuesday.
Chinese player Ke Jie, 19, is going up against machine AlphaGo, and the stakes are high. If he wins, he gets $1.5 million in prize money, and maintains his status as the world's top ranked master. But if he loses, it would mean machine domination over humans in one of the world's most complex board games, solidifying Google's significant strides in artificial intelligence.
"We're keeping pretty confident, I think, that AlphaGo is going to play well," Demis Hassabis, CEO of Google DeepMind, which created the machine, told CNBC.
"I'm just very excited to see actually what creative things Ke Jie is going to come up with and to see, to test the machine to its limits."
Demis Hassabis, co-founder of Google's artificial intelligence (AI) startup DeepMind.Jeon Heon-Kyun | Getty Images
Teaching computers to master Go has been considered a holy grail for artificial intelligence scientists, as it's a complex game with more possible configurations of the board than there are atoms in the universe.
The game, which originated thousands of years ago in China, has two players taking turns placing black and white stones on a square board of 19 lines by 19 lines. The object is to take territorial control of the board by surrounding the opponent. Games can go on for hours, and playing requires immense mental stamina, intuition and strategy.
The computing power of AlphaGo is astonishing -- the machine has established neural networks that have captured intuitions about the game based on how human experts have played, said Dave Silver, the lead programmer.
VIDEO3:4503:45AlphaGo: What's next for A.I.?Street Signs Asia
"AlphaGo uses a very deep tree search and at times looks ahead something like 50 moves into the future," Silver said. The machine runs "through this tree of possibilities to work out the best path that will lead to the best possible outcome."
This is the kind of technology that Google DeepMind wants to apply to the rest of the world, from medicine to energy, to help humans live better by making the best decisions for the future.
AI is already a part of the modern day -- think speech and image recognition. Over the next few years, consumer devices like phones are set to get smarter and more useful, Hassabis said.
In the long run, these systems should "increase efficiency [and] that should increase productivity, so that should be good for the world economy," he said. "But the thing is that you have to make sure is that it benefits everyone, not just a few people or a few companies."
Innovator Kai-Fu Lee has said in the past that half of all jobs will be replaced by robots over the next decade.
VIDEO1:3201:32The golden age of A.I.Squawk Box Asia
Sounds scary, but experts have stressed that this age old question comes every time a new technology appears. Still, the idea is that a more efficient world will give humans greater opportunity to add value with other creative endeavors.
As it stands, computer systems can't replace things like human emotions and imagination. And Hassabis says there's a long way to go for machines to tackle issues like memory, planning, and abstract reasoning.
But AlphaGo remains a strong program that has already clocked a number of victories against top players around the globe -- a huge breakthrough occurring about a decade sooner than experts anticipated.
Last year, AlphaGo beat one of the world's best Go players, South Korea's Lee Sedol, obliterating him 4-1 in a set of five matches.
Earlier this year, Google DeepMind put AlphaGo onto online board game platforms to test the machine further against humans. AlphaGo clocked 60 wins and zero losses.
And before that, AlphaGo beat European Go champion Fan Hui in five consecutive games.
It all started back in the 1990s, when software programs got smart enough to play classic board games, like backgammon. Things peaked with a historic victory of IBM's Deep Blue computer over world chess champion Gary Kasparov in 1997.
Fast forward two decades and artificial intelligence is now taking on the mind-boggling complexities of Go -- and winning with a machine that, until recently, could only compete with human amateurs.
The games, held in China, are being live streamed by Google online.
But given that Beijing authorities already block a number of Google services, such as Gmail and YouTube, those interested in watching the game inside China will have to get creative to circumvent government censors, for instance by using a virtual private network (VPN) to make it look like they're accessing the websites from a location outside the country.
Ke Jie has welcomed the games this week against AlphaGo, but the odds are stacked against him given the machine's winning streak.
Though not a serious Go player -- Hassabis made his name in his early teens as a world chess champion -- even he hasn't tried to play against AlphaGo.
"There would be no point in me playing AlphaGo," he said. "It's way too strong for me."
Follow CNBC International on Twitter and Facebook.
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fb9e4af555675307644badde5c8ee05a | https://www.cnbc.com/2017/05/23/aston-martins-upcoming-car-will-3-d-scan-your-body-for-the-driver-seat.html | Aston Martin's future car will 3-D scan your body for the driver's seat | Aston Martin's future car will 3-D scan your body for the driver's seat
VIDEO1:1901:19Aston Martin's future car 3-D scans your body to customize the driver's seatCNBC Reports
Imagine a Formula One style performance car pulling up next to you at a red light and you have the vision behind Aston Martin's next ambitious project.
"Valkyrie", due in 2019, is a collaboration between Aston Martin and Red Bull and will be made custom for its owner. For one, the driver seat will be made using a 3-D scan of the body, which adds a bit of pressure to the owner to keep his or her figure.
"It's a road car, but we're talking about an extreme performance car," said Patrik Nilsson, Aston Martin's Asia Pacific President.
Aston Martin Valkyrie, due in 2019, is a collaboration between Aston Martin and Red Bull
"We're not focused on maximum top speed. We are focused on how dynamic the car is," Nilsson said. "Much like in Formula One, the winning car is the one that breaks the quickest, goes around the corner the quickest, and accelerates the quickest. Not necessarily the one with top speed."
The project is part of Aston Martin's long-term plan to continue to grow the company through engineering special models, of which the company aims to create two per year.
"We always see the interest for special models is very high," Nilsson said. "They're all cherished and collectables, so it's an integral part of the plan."
Follow CNBC International on Twitter and Facebook.
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7d950f593545be30914524d0a85c78cd | https://www.cnbc.com/2017/05/23/fitness-trackers-bad-at-calorie-counting-stanford-study.html | Fitness trackers are terrible at counting calories, says Stanford study | Fitness trackers are terrible at counting calories, says Stanford study
Kelly Loughlin | Getty Images
Wearable makers, like Apple Watch and Fitbit, are getting better at tracking heart rate, according to a new study from researchers at Stanford University School of Medicine.
But those that measure calories are far from accurate.
The researchers conducted a study to assess the quality of wearable trackers after finding a lack of data in peer-reviewed journals. "Anytime we get data from a patient via a device, we have questions about the accuracy," said Euan Ashley, an associate professor at Stanford, who focuses on cardiovascular medicine.
These devices aren't regulated, as they aim to optimize health rather than to detect disease, so they're not held to the same standards as their medical device counterparts. But many patients will still use them on a regular basis.
So Ashley's team evaluated 7 devices -- the Apple Watch, Basis Peak, Fitbit Surge, Microsoft Band, Mio Alpha 2, PulseOn and Samsung Gear S2 -- with a group of 60 volunteers using rather than using treadmills and stationary cycles in the lab. The researchers compared the devices to FDA-approved gold standards, rather than to each other.
Here's what they learned:
Not all wearables are created equal. The Apple Watch was a clear winner in both heart rate and energy expenditure, while Samsung's device reported the highest error rates. The devices were consistently terrible at tracking energy expenditure, with the most accurate device off by an average of 27 percent. Ashley said the error rate should be less than 10 percent when these devices are used in non-medical settings. Heart rate measurements have improved over the years. He described some of the early wearables as "random number generators." Ashley said that users can rely on this data-point. The devices were better at measuring data collected during cycling than walking.Errors also tended to be more common in men versus women, those with a greater body mass index, and with a darker skin tone.
Why are these devices so off when it comes to energy expenditure? "People are so variable," said Ashley. "Some people walk smoothly and others waddle along, and that has an impact."
Ashley now advises people to avoid trusting data like calories burned and using that to make decisions about what to eat. He warns against eating ice cream, for instance, simply because a tracker suggests that a user has burned sufficient calories.
Ashley hopes that wearable makers will respond to studies like these by releasing more data, whether it's positive or negative. The next iteration of his study will involve the volunteers wearing the devices in their daily lives rather than the lab.
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2686b2e151ab818e734e359dcd86f6d7 | https://www.cnbc.com/2017/05/23/mnuchin-backs-off-pledge-of-no-absolute-tax-cut-for-the-wealthy.html | Treasury Secretary Mnuchin backs off pledge of 'no absolute tax cut' for the wealthy | Treasury Secretary Mnuchin backs off pledge of 'no absolute tax cut' for the wealthy
VIDEO2:4502:45Sec. Mnuchin: We need a competitive business tax systemSquawk on the Street
Treasury Secretary Steven Mnuchin once promised "no absolute tax cut" for wealthy Americans.
But on Tuesday, he hedged on that pledge.
After Trump's election, Mnuchin told CNBC that wealthy Americans would get no "absolute tax cut." That would mean any cuts they did get under Trump's plan — including a big drop in the top income tax rate — would be offset by closing loopholes the wealthy use.
At the Peterson Foundation Fiscal Summit on Tuesday, Mnuchin appeared to temper expectations. He said delivering a "middle-income tax cut" is the White House's "intent," but he added that he "can't say what the results will be" because of Congress.
Mnuchin also said the Trump administration hopes to pass an overhaul of the U.S. tax system by the end of the year.
He stated clearly that "we're not going to get that done by August" — again backing away from an earlier statement on the original timeline the White House set for tax reform.
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5653417038d065f8796cdcb30a6d53cf | https://www.cnbc.com/2017/05/24/ford-microsoft-backed-start-up-pivotal-could-ipo-by-mid-2018.html | Ford, Microsoft and Dell EMC-backed start-up Pivotal could IPO by mid-2018, sources say | Ford, Microsoft and Dell EMC-backed start-up Pivotal could IPO by mid-2018, sources say
Enterprise software company Pivotal Software, which was spun out of EMC and its subsidiary, VMware, a few years ago, is looking at an initial public offering by the middle of next year, according to sources familiar with the matter. They did not give details on the size of the estimated float.
Rob Mee, CEO, Pivotal SoftwareBrendan Moran | Sportsfile | Getty Images
The San Francisco-based company is an offshoot of software development consulting firm Pivotal Labs, which was previously acquired by EMC. Pivotal Software started with cloud technology from VMware, big data capabilities provided by EMC and a $105 million investment from General Electric.
It is also backed by major names like Ford, which led a funding round along with Microsoft and others that valued Pivotal at $2.8 billion.
When asked about the IPO, Pivotal CEO, Rob Mee, told CNBC, "We'll definitely do it when the market conditions and the business conditions are just right."
Last year, VMware, EMC and Pivotal became subsidiaries of Dell Technologies.
Pivotal helps companies build, test, deploy and update software applications that can run either on public cloud such as Amazon Web Services and Microsoft Azure or on private cloud.
Mee said there is an emphasis on doing knowledge transfer at the firm that allows developers to continuously learn and that Pivotal does not hold anything back as competitive advantage.
"Everything that we do is open-source ... in that mode of openness, now that we provide cloud technology as well, which we have built over the last four years, (the cloud business) has become a big growth engine for us," said Mee.
Last year, the cloud business saw a 130 percent on-year increase, with its flagship software — Pivotal Cloud Foundry — selling over $270 million in annual bookings.
Mee said he expects the business to grow again in 2017 because there is a realization among well-heeled legacy companies that they need to develop agile, cloud-based software to remain on par with their industry disruptors.
For years, established companies have been on the defensive as they tackled threats from venture-backed start-ups, many of which created new markets for e-commerce, ride sharing, social networks and others, and reaped the commercial benefits.
Industry experts say that cloud computing has become a crucial part of the business for most companies. Earlier this year, Gartner said the global public cloud services market is expected to grow 18 percent in 2017 to $246.8 billion, up from $209.2 billion in 2016, but may taper off over the next few years. Cloud application services are predicted to grow 20.1 percent to $46.3 billion this year.
"The future for cloud is bright ... adoption will increase within the majority of organizations," Michael Warrilow, research vice president at Gartner, told CNBC. "There is definitely a place for smaller companies to use big public cloud providers for their advantage."
Businesses are now thinking in terms of what Mee called a "DevOps" (Development Ops) mindset, where there's greater collaboration between software developers and information technology professionals to create cloud-focused solutions that can be modified quickly to change business needs.
"Companies want a multi-cloud strategy," he said.
Pivotal counts over a third of the Fortune 100 companies as clients, including six of the top automakers, seven of the largest banks and five major insurers in the world.
Indeed, the firm addresses a pain point that consultants at PwC previously called the "Goldilocks syndrome", where changing regulations, productivity pressures and complex customer engagement models left businesses unsure how much to customize their software. Too much leaves a system expensive to maintain, while generic versions force firms to cram their business model into the software's function.
"Software development is optimized for continuous change is essentially what it is," said Mee. "Prior to that, software development had tried to limit change because it was seen as risky. It turns out that in order to move safely, you have to move much more quickly."
Pivotal has also expanded its presence Asia, and picked up key customers including Singapore's largest lender DBS Bank and Australian telco giant Telstra.
Though legacy companies in the region have yet to face the same kind of disruption their counterparts in the U.S. have experienced, Lionel Lim, managing director for Asia Pacific and Japan at Pivotal, told CNBC that Pivotal's strategy in Asia is to go after the large customers first. "Because they will be the ones that'll be hit first," he said.
Mee added, "The timing is really good for us to step up investment in Asia in a big way."
— CNBC's Anita Balakrishnan contributed to this report.
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