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00cdb9dffe18fab60bbff98d46208ffd | https://www.cnbc.com/2017/06/22/big-banks-make-it-through-stress-tests-investors-await-cash-release.html | Big banks make it through stress tests, investors await cash release | Big banks make it through stress tests, investors await cash release
VIDEO3:0203:02Goldman Sachs: We're seeing the evolution of stress testingClosing Bell
U.S. banks made it through the latest round of stress testing relatively unscathed, setting investors up for news next week of payouts from the industry's biggest names.
Test results released Thursday by the Federal Reserve show that the 34 institutions under scrutiny have enough capital to make it through the two scenarios regulators posed β one akin to the financial crisis and another entailing a shallower downturn.
Under the scenarios, the banks tested "would experience substantial losses." However, in total, the institutions "could continue lending to businesses and households, thanks to the capital built up by the sector following the financial crisis."
The tests marked the third straight year the banks all met the Fed's standards for health and could boost arguments from Republican legislators and President Donald Trump for loosening regulations.
"This year's results show that, even during a severe recession, our large banks would remain well-capitalized," Fed Governor Jerome H. Powell said in a statement. "This would allow them to lend throughout the economic cycle, and support households and businesses when times are tough."
In the most severe scenario, bank losses are projected to be $493 billion. In the less severe, the losses were put at $322 billion.
The tests are part of the Dodd-Frank reforms instituted after the crisis that mandated banks raise capital levels to brace against another crisis.
Thursday's results are the first in a two-step process, with the second and more important happening Wednesday when the Fed will approve or disapprove the banks' plans to return capital to shareholders. Indications are that some of the largest banks want to return more than 100 percent of profits.
Bob Rowan | Getty Images
That would indicate a major change in confidence on the part of both banks and regulators as the institutions would begin actually reducing capital positions.
"Today's results reaffirm that U.S. banks are strong and remain well-positioned to continue playing their important role in accelerating economic growth," Rob Nichols, president of the American Bankers Association, said in a statement. "Banks' robust capital and liquidity positions would allow them to continue to function well under even the most extreme scenarios."
Fed officials emphasized that the stress tests don't come with pass or fail grades though the results bode well for banks passing the second part of the test next week. The second round, however, uses different criteria, so that solid results from Thursday do not automatically signal that all the plans will be approved.
But in terms of whether the banks have enough top-quality assets compared to liabilities, Thursday's results indicated that the institutions were on safe ground. That measure, called the tier-one capital ratio, was exceeded by all 34 banks. As a whole, the industry would see its current tier-one ratio fall from 12.5 percent to 9.2 percent. For individual banks, the Fed requires a level of 4.5 percent.
Under the most severe scenario, which also entails heightened stress in corporate loan markets and a 35 percent decline in commercial real estate prices, banks are projected to lose $493 billion over a period of nine quarters.
In addition, the eight largest firms would see $86 billion in trading losses, with JPMorgan Chase, the biggest bank by assets, suffering the biggest losses at $25 billion.
The results come at a time when Washington lawmakers are looking at rolling back some of the Dodd-Frank measures. A Republican-sponsored measure would reduce the authority that regulators have and raise the level of assets for which banks would undergo the type of scrutiny that the stress tests employ. The Fed uses $50 billion as the current yardstick, but some legislators would like to raise the level to about $250 billion.
Bank stocks traded broadly lower Thursday and have been sideways since getting a big boost after Trump's November election victory.
β With reporting by CNBC's Dawn Giel.
Watch: Large banks remain well-capitalized
VIDEO1:3801:38Large banks would remain well capitalized under stress: Fed Governor PowellClosing Bell
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b68066acb77eee47c4aa964d7606381d | https://www.cnbc.com/2017/06/22/enough-gop-senators-to-block-obamacare-replacement-will-oppose.html?__source=newsletter%7Cyourmoneyyourvote | Four GOP senators will not support current Obamacare replacement, push for changes | Four GOP senators will not support current Obamacare replacement, push for changes
VIDEO4:3504:35Sen. Rand Paul: Senate health bill 'looks a lot like Obamacare'Closing Bell
Four Republican senators β enough to thwart passage β said Thursday they will not support the current Senate Obamacare replacement plan and will seek changes.
Conservatives Rand Paul of Kentucky, Ted Cruz of Texas, Ron Johnson of Wisconsin and Mike Lee of Utah said in a statement that they "are not ready to vote" for the proposal Senate Republicans released Thursday.
"There are provisions in this draft that represent an improvement to our current health care system, but it does not appear this draft as written will accomplish the most important promise that we made to Americans: to repeal Obamacare and lower their health care costs," the senators said.
Paul told reporters that "my hope is not to defeat the bill, but to make the bill better." He said, "We want the bill to look more like a repeal."
Cruz told reporters that "I think we can get there, but the current draft doesn't do nearly enough."
Senate Republicans on Thursday morning released a draft of their secretive Obamacare replacement bill, called the "Better Care Reconciliation Act of 2017." The plan would repeal Obamacare taxes, restructure subsidies to insurance customers that are based on their incomes and phase out Medicaid's expansion program. It contains some key differences from the version the House passed last month.
VIDEO1:4501:45At least three GOP senators to oppose health-care bill: NBC NewsPower Lunch
The House GOP initially faced enough skepticism from its members to sink its health-care plan. But Republicans won over skeptical members with last-second amendments and passed the bill by a narrow margin.
Senate Republicans now face the same problem their House counterparts did: appeasing the party's conservative wing without alienating moderates. Some senators have previously expressed concerns about how quickly the House plan phased out Medicaid expansion and the nonpartisan Congressional Budget Office's estimate that it would make costs spike for older, poorer Americans.
If three Republicans defect, the party cannot reach the majority vote it needs to pass the measure.
Moderate GOP Sens. Susan Collins of Maine, Lisa Murkowski of Alaska, Rob Portman of Ohio, Shelley Moore Capito of West Virginia and Dean Heller of Nevada are among those who could potentially oppose the plan.
In a statement, Heller did not endorse or support it but said that, "at first glance, I have serious concerns about the bill's impact on the Nevadans who depend on Medicaid." Most other moderate senators said they needed to take more time to review the plan.
Senate Majority Leader Mitch McConnell said Thursday that a report on the bill's effects from the CBO is expected next week. He may push for a vote on it as soon as late next week.
Opposition to the House version appears to be growing. Americans consider the House Republican health-care bill to be a bad idea by a 3-to-1 margin, according to a new NBC News/Wall Street Journal poll.
β CNBC's Dan Mangan contributed to this report
VIDEO2:3302:33Only 16 percent of Americans think GOP health bill is good idea: NBC News pollHalftime Report
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b1281cc1e29853d6132a0ac152520629 | https://www.cnbc.com/2017/06/22/nordstrom-family-private-equity-buyer.html | Nordstrom family moves ahead with finding a private equity buyer | Nordstrom family moves ahead with finding a private equity buyer
VIDEO0:5300:53Nordstrom family moving to find private equity partner: CNBC's David FaberSquawk on the Street
The Nordstrom family is moving ahead with finding a private equity buyer for the Seattle-based department store chain, sources said.
A special committee of the board has been formed and bankers, lawyers and an outside public relations firm have been hired to help in the task, the sources said. The Nordstrom family owns about 30 percent of the company.
The company said earlier this month that the family had begun to explore a take-private deal, though they had not yet made a proposal. Retailers are struggling with an industry-wide slowdown in sales that has hit shares of major department store operators. Nordstrom shares are up 13.8 percent since the closing price on June 7, the day before the company announced the possible deal. They are up 3.9 year to date.
A private equity owner might help Nordstrom restructure. Members of the family pursuing a deal include Co-Presidents Blake, Peter and Erik Nordstrom, the great-grandchildren of the co-founder.
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2ef269a28e86aa6d3438b61514ada49b | https://www.cnbc.com/2017/06/22/senate-republicans-finally-unveil-their-big-obamacare-replacement-bill.html?__source=newsletter%7Cyourmoneyyourvote | Here are the details of Senate Republican Obamacare replacement bill | Here are the details of Senate Republican Obamacare replacement bill
VIDEO3:2003:20Former Medicare administrator: Millions will still lose coverage under Senate health-care billSquawk Alley
Senate GOP leaders on Thursday finally released their secret health-care reform bill, which would repeal Obamacare taxes, restructure subsidies to insurance customers, and both phase out Medicaid's expansion program and cap Medicaid spending.
Republicans plan to bring the controversial bill that was drafted in secret to a quick vote next week, but face potentially fatal opposition to it from several members of their own caucus.
The 142-page bill, if passed into law, would sharply reduce financial aid that currently helps millions of people obtain health coverage, while at the same time offering a tax break to primarily wealthy Americans to the tune of hundreds of billions of dollars. And it would loosen rules in a way that could lead to states allowing insurers to offer less-generous health plans.
The bill would repeal, retroactive to the beginning of 2016, the Obamacare rule requiring most Americans to have some form of health coverage or pay a tax penalty fine. That repeal is expected to sharply increase the number of people who don't have insurance, which could in turn lead insurers to raise premiums.
And it would repeal, retroactively to the beginning of 2016, the "employer mandate," which requires large employers to offer health insurance to workers or be fined.
Read the entire bill here
The bill also would continue for at least two years to offer reimbursements to health insurance companies for subsidies that reduce out-of-pocket costs for low income customers of Obamacare plans. But those subsidies would end in 2020, which would increase deductibles and other out-of-pocket health expenses for millions of customers.
The federal government's share of funding for Medicaid, which is jointly run with individual states, would fall over the course of seven years to end up at around 57 percent of the cost of that program, which offers health coverage to the poor.
Under Obamacare, the federal government had guaranteed that its funding for adults newly eligible for Medicaid because of the Affordable Care Act would fall to no lower than 90 percent of their costs. That expansion program would begin being phased out in 2021, and fully repealed by three years later.
VIDEO2:1402:14Tax credit based on income for GOP health billClosing Bell
In another cost-cutting move, the bill would lower the maximum income level a household could have to still qualify for federal subsidies that help reduce the premiums people pay for enrollment for individual health plans. Obamacare currently bars subsidies to families that earn more than 400 percent of the federal poverty level. The new bill would reduce that cap to 350 percent of the poverty level.
Younger people, as a group, would end up paying less of a share of their income toward their individual health plans under the bill in comparison to what they pay now under Obamacare, while older people as a group would end up paying a larger share of their income.
Health plans that offer abortion services would not be eligible for the subsidies, according to the draft released Thursday.
The federal government also would end up spending less money subsidizing people's insurance purchases by changing how the value of those subsidies are calculated. The bill would use a less-expensive type of individual health plan to calculate those subsidies, as opposed to the pricier plan used under Obamacare.
The bill also seeks to repeal, to the start of 2017, the 3.8 percent tax on net investment income.
The Trump administration is expected to back the bill, which most GOP senators were learning the details of during a meeting Thursday morning. The bill is named the "Better Care Reconciliation Act of 2017."
"It's going to be very good," President Donald Trump said about an hour after the bill's release. "A little negotiation, but it's going to be very good." Trump did not elaborate.
The House's version of the bill, dubbed the American Health Care Act, is broadly unpopular among the public, and had been reportedly called "mean, mean, mean," by Trump during a meeting with senators. Weeks earlier, Trump and House members who voted for the ACHA celebrated its passage in the Rose Garden of the White House.
A new NBC News/Wall Street Journal Poll released Thursday found that just 16 percent of Americans thought the House bill was a good idea, with 48 percent saying it is a bad idea.
"In broad strokes, the Senate bill is just like the House: Big tax cuts, big cut in federal heath spending, big increase in the uninsured," tweeted Larry Levitt, an Obamacare expert at the Kaiser Family Foundation.
"Under the Senate bill, low-income people would pay higher premiums for bigger deductibles," Levitt said.
He had noted on Twitter on Wednesday that "A 60 year-old at 351% of poverty currently gets a premium subsidy of $5,151 per year on average." The Senate bill would eliminate all of that federal financial aid if it becomes law.
VIDEO1:0301:03Obamacare collapsing right before our eyes: Sara FagenPower Lunch
Senate GOP leaders want to have a vote on the bill by late next week, before Congress' Fourth of July recess. They do not plan to hold any hearings on the legislation, infuriating Democrats, who were frozen out of the drafting process.
To pass, Republicans must get at least 50 GOP senators to vote for the bill, since no Democrat or independent is expected to vote for it. Vice President Mike Pence would break any tie, and would be expected to vote for the bill. There are 52 Republican senators.
On Thursday, about an hour after the bill was posted online, NBC's Chuck Todd tweeted that a group of a conservative Republican senators were meeting, and that there are at least three GOP senators, and possibly more, who plan to announce later today that they will oppose the bill.
If that number proves to be accurate, it could be a death blow to the bill.
Sen. Rand Paul, R-Ky., told NBC that he and several other members of the GOP caucus would be making a statement on the bill later Thursday.
"It looks like we're keeping Obamacare, not repealing it," said Paul, who declined to say whether that meant he would vote against the bill.
Senate Majority Leader Mitch McConnell of Ky., center, followed by Majority Whip John Cornyn, R-Texas, leaves a Republican meeting on healthcare, Thursday, June 22, 2017, on Capitol Hill in Washington.Jacquelyn Martin | AP
Senate Majority Leader Mitch McConnell, R-Ky., said Thursday, "There will be ample time to analyze" and discuss the bill before the legislation is put to a vote.
While McConnell praised the bill on the floor of the Senate, many of his Republican caucus members avoided speaking with reporters staking them out in Congress, who wanted to ask about the legislation.
Democrats promptly blasted the bill, and castigated Republicans for planning to call a vote on it just a week after its details were released.
"The Republicans want to give a tax break to the wealthiest Americans," said Senate Minority Leader Chuck Schumer, D-NY, on the floor of the Senate after release of the bill. "Simply put this bill will result in higher costs, less care, and millions of Americans will lose their health insurance."
"It's every bit as bad as the House bill. In many ways it's even worse," Schumer said. "The Senate bill is a wolf in sheep's clothing, but this wolf has even sharper teeth than the House bill."
House Speaker Paul Ryan, R-Wisc., during a press conference said, "From what I understand, their bill tracks along lines of House bill ... [I] think that's very good."
Leslie Dach, director of the Obamacare-supporting group Protect Our Care Campaign, tore into the Senate's bill, which, like Ryan, he compared to the House's earlier bill.
"Senate Republicans promised to start over and write a plan that improves people's health care," Dach said. "Instead they doubled down on the failed House repeal approach that puts everyone's health care last, and tax breaks for the wealthy first."
"The heartless Senate health care repeal bill makes health care worse for everyone β it raises costs, cuts coverage, weakens protections and cuts even more from Medicaid than the mean House bill," said Dach, who had served as senior counselor at the Department of Health and Human Services in the Obama administration.
VIDEO3:5203:52GOP health bill has more to do with elimination of taxesPower Lunch
"They wrote their plan in secret and are rushing forward with a vote next week because they know how much harm their bill does to millions of people."
But Seema Verma, administrator for the federal Centers for Medicare and Medicaid Services, praised the Senate's bill as she criticized Obamacare, a program that CMS oversees.
"I appreciate the work of the Senate as they continue to make progress fixing the crisis in health care that has resulted from Obamacare," Verma said. "Skyrocketing premiums, rising costs and fewer choices have caused too many Americans to drop their insurance coverage."
"Today, Obamacare is in a death spiral and millions ofAmericans are being negatively impacted as a result. They are trapped by mandates that force them to purchase insurance they don't want and can't afford," she said. "The Senate proposal is built on putting patients first and in charge of their health-care decisions, bringing down the cost of coverage and expanding choices. Congress must act now to achieve the President's goal to make sure all Americans have access to quality, affordable coverage."
The Congressional Budget Office said it expects to release an analysis of the bill early next week Monday. The analysis will estimate how many people are likely to become uninsured in the next decade if the bill becomes law, as well as how premiums for individual health plans would be affected.
Tweet
The CBO "score" would also include projections on the bill's impact on federal spending.
The release of the draft comes more than six weeks after GOP leaders in the House barely managed to win passage for their own health-care legislation.
The House bill, the American Health Care Act, is widely unpopular, multiple polls have shown.
The nonpartisan CBO, in analyzing that bill, found that 23 million more Americans would become uninsured by 2026 if it became law than if Obamacare remained in place.
While many of those people would voluntarily cease buying insurance plans because of the elimination requirement that they have some form of health coverage or pay a fine, millions more would find their plans unaffordable because of either rising prices, the loss of government subsidies or both factors.
VIDEO4:3504:35Sen. Rand Paul: Senate health bill 'looks a lot like Obamacare'Closing Bell
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2221eb37f5ffc28bbe216fbb49bd8077 | https://www.cnbc.com/2017/06/22/what-to-do-if-theres-no-health-plan-in-your-state-next-year.html | States of (ill) health: As insurers exit exchanges, patient options dwindle | States of (ill) health: As insurers exit exchanges, patient options dwindle
VIDEO1:5601:56Senate releases long-awaited health-care billYour Money, Your Future
States continue to grapple with the fate of their health insurance exchanges in 2018, even as the Senate released its version of the repeal to Obamacare.
As of June 20, some 31,268 insurance exchange enrollees in 44 counties, all based in Missouri, Ohio and Washington state, are at risk of having no insurers available to them next year, according to the Kaiser Family Foundation.
Individuals who require financial assistance to afford a policy would be hit especially hard by these changes, as they can only use their federal subsidies for coverage from the exchanges.
Large insurer Anthem also announced it would leave exchanges in Ohio, Wisconsin and Indiana in 2018.
The Senate's bill, called the "Better Care Reconciliation Act," would continue to reimburse health insurers for subsidies that lower out-of-pocket expenses for low-income customers.
"In 2018, the worst-case scenario is that you're not able to avail yourself of the subsidies and you can't afford to buy coverage at all," said Karen Pollitz, senior fellow, health reform and private insurance at Kaiser.
To provide exchange customers with some certainty for next year, state insurance regulators have gone back to the drawing board in a bid to keep insurers selling in these "bare counties."
Here's what you might see unfold in your state if your local marketplace is looking thin in 2018.
As legislators prepare to duke it out over the health-care bill, insurance regulators are taking steps to shore up the market in their respective states.
In Washington state, for instance, two counties were at risk of having no insurers in 2018. Earlier this week, following discussions with Insurance Commissioner Mike Kreidler, Premera Blue Cross agreed to remain in one of the counties.
"We have to make sure that we take the steps necessary to make it easier for insurers to work in rural counties where they face challenges," Kreidler said.
VIDEO5:1505:15Sen. Cantwell on health care bill behind closed doorsPower Lunch
"This includes fewer providers, greater challenges building provider networks, and lower income and more poverty in those rural counties," he said.
States can also take some of the risk off the table for insurers to entice them to stay by funding their own reinsurance pools.
Alaska, Minnesota and Maine have experimented with these programs to strengthen their individual markets.
"A carrier with a disproportionate share of bad risk can be reimbursed by the state, which makes it easier for the carrier to participate in the market and offer affordable premiums," said John Barkett, director of policy affairs at Willis Towers Watson.
In 2018, the worst-case scenario is that you're not able to avail yourself of the subsidies and you can't afford to buy coverage at all.Karen Pollitzsenior fellow, health reform and private insurance at Kaiser Family Foundation
Iowa this month proposed a stopgap measure to the Centers for Medicare and Medicaid Services, aiming to ensure that customers in the state have access to individual coverage in 2018.
The proposal calls for Iowa to repurpose federal money to provide age- and income-based premium subsidies and bolster a reinsurance program that will reimburse insurers for high-cost claims.
In order for insurance companies to participate in the reinsurance program, the state will require them to offer a standardized plan that meets ACA requirements in 2018.
David Paul Morris | Bloomberg | Getty Images
Finally, states can squeeze insurers, requiring them to cover certain counties in order to continue selling in other markets within the state, said Katherine Hayes, health policy director at the Bipartisan Policy Center.
That tactic is iffy.
"If it creates too big of a burden and the insurer believes this drives up premiums for everyone else, they might make that argument against it," Hayes said. "They may also argue that they'll leave the market [in that state] completely."
Your choices are limited if you wind up residing in a place with no available coverage via the exchanges and you depend on federal subsidies.
Here are a few suggestions for next year if you end up in this predicament:
Do your homework: Contact a local insurance broker to see if there's coverage that's available outside of the exchanges. An insurer may back out of a state marketplace, but still offer individual coverage through brokers.If you obtain individual coverage: Ask whether your policy is compliant with the Affordable Care Act, said Barkett of Willis Towers Watson. That is, does it cover essential health benefits, including hospital care, pregnancy and childbirth, and doctors' services?If you're your own boss: See about obtaining coverage through associations, and be sure to ask about the details of the plan.For instance, a small-business owner may be able to get insurance through the National Federation of Independent Business, while members of the Freelancers Union may have access to coverage.
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379f5c328050fb5bd4e9f40cd7a97026 | https://www.cnbc.com/2017/06/22/youtube-claims-1-point-5-billion-monthly-users.html | YouTube claims 1.5 billion monthly users as it races to boost video-ad business | YouTube claims 1.5 billion monthly users as it races to boost video-ad business
Susan Wojcicki, chief executive officer of YouTube.David Paul Morris | Bloomberg | Getty Images
's YouTube unit says it now reaches 1.5 billion viewers every month -- and its users watch more than an hour of mobile videos per day -- as it expands its video programming to sell more digital ads.
YouTube CEO Susan Wojcicki shared the news in a blog post the same day she gave a keynote address at VidCon, a conference for online video creators in Anaheim, California.
Google CEO Sundar Pichai tweeted about the milestone soon after Wojcicki's post: tweet
Wojcicki also wrote that YouTube Red, the company's foray into original videos, has launched 37 series that have generated "nearly a quarter billion views."
YouTube Red has 12 new projects in the works, she said.
VIDEO0:4700:47Google outlines 4 steps to tackle terrorist-related content on YouTubeTech Transformers
In addition, YouTube TV will expand to 10 more markets "in just a couple of weeks," including Dallas-Fort Worth, Washington, D.C., Houston, Atlanta, Phoenix, Detroit, Minneapolis-St. Paul, Miami, Orlando and Charlotte, N.C.
And YouTube also unveiled a new virtual reality technology, called VR180, that will make it easier for video creators to make VR content.
The company is working with camera makers to create products that can feature the new technology, which shows only a view of what's in front of a VR camera, rather than a 360-degree view of a scene.
In April, rival unveiled a new VR camera that employs a 360-degree view.
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227a14d3cd768288ca4db6bf208c7298 | https://www.cnbc.com/2017/06/23/cord-cutting-is-accelerating-thanks-to-hulu-not-netflix-analyst-says.html | Cord cutting is accelerating thanks to Hulu, not Netflix, analyst says | Cord cutting is accelerating thanks to Hulu, not Netflix, analyst says
VIDEO4:0004:00Expert: I don't think the idea that cord-cording is accelerating is a surprise Power Lunch
Hulu, not Netflix, appears to be driving the recent increase in cord-cutting, according to Corey Barrett, a senior media analyst at M Science.Cord-cutting, long said to represent the demise of cable companies, is when customers eliminate paid TV from their service provider bundle. Barrett said a recent study from M Science shows the trend is on the rise."What really stood out to us was that [cord-cutting] was most pronounced among Hulu subscribers," Barrett told "Power Lunch" on Friday. "There's a misconception that Netflix is actively driving cord-cutting behavior."The study found that Netflix subscribers eliminated their cable package at similar rates to the average consumer, while Hulu members saw a higher rate of cord-cutting.The findings also identified Charter Communications as potentially a victim of the practice, "relative to Comcast," according to Barrett.He called the practice "a generational shift" and warned disruption could grow in the coming years thanks to more nontraditional firms entering the field."As a function of that, you have players coming from outside the existing pay-TV ecosystem that are likely much more disruptive to the current ecosystem and drive heavier cord-cutting than what we've seen," Barrett said.
Disclosure: CNBC parent company NBCUniversal is an investor in Hulu. Comcast is the owner of NBCUniversal, the parent company of CNBC and CNBC.com.
VIDEO4:3204:32Hulu CEO: Streaming wars will be won or lost by viewer experience and contentSquawk Box
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c4adeeaabc44b0db7d1c7451470a5724 | https://www.cnbc.com/2017/06/23/shares-of-foodservice-distributors-fall-amazon-may-enter-space.html | Food service distributors including Sysco, US Foods fall on report Amazon wants to enter space | Food service distributors including Sysco, US Foods fall on report Amazon wants to enter space
A worker exits the cab of a delivery truck outside of the Sysco distribution center in Concord, North Carolina.Luke Sharrett | Bloomberg | Getty Images
Amazon may want to dive into food service distribution, potentially shaking up an industry now dominated by three large players, according to a report.
"The risk has increased that AMZN becomes a disruptor to food service distribution models," said JPMorgan analyst John Ivankoe in a research note published Friday. It said Amazon could do it through building its own operation or through an acquisition of an existing player in the industry.
The report is sparking a sell-off in food service distribution stocks as some investors worry Amazon's entry would squeeze profit margins in an industry already known for stiff competition and tight margins. And it comes just a week after Amazon announced plans to pay $13.7 billion for Whole Foods, the major organic and natural foods grocery chain.
In trading, Sysco stock ended down 5.4 percent, US Foods fell 3.4 percent and Performance Food Group dropped 1.7 percent. Amazon shares rose fractionally.
On Friday, JPMorgan also removed Sysco stock from the firm's focus list, citing added risk within the space. JPMorgan pointed out that since the Amazon-Whole Foods deal was announced, Sysco and US Foods shares have been under pressure.
Sysco and US Foods declined to comment. CNBC also reached out to Performance Food Group and Amazon but didn't hear back at deadline.
"We think Amazon will pivot their focus on the at-home consumer and include independent restaurants in their customer set," JPMorgan said. "They buy larger pack sizes, demand larger sizes and are highly repetitive in terms of what they buy as menu inertia is true for most independent restaurants."
JPMorgan estimates the small/independent restaurant market in the U.S. is a roughly $256 billion market opportunity and represents more than 300,000 outlets.
Joe Pawlak, managing principal at food service research firm Technomic, estimates that margins for typical food service distributors are in the low single digits after adjusting for warehousing, trucks and sales forces. But he said the independent restaurant operator side, or "street business," is a sweeter spot of the market and growing.
Pawlak said the independent restaurant operators are always looking for more options for purchasing because they realize many of the food service distributors charge higher prices to the independents so they can pass on lower prices to the larger customers, including major restaurants chains.
"Many of the independent restaurant operators are going to club stores where they can get lower prices," said Pawlak.
Indeed, Amazon could go after mom-and-pop restaurant operators that now buy from warehouse chains such as Costco Wholesale and Wal-Mart Stores' Sams Club. And Technomic is looking for the sales at independent restaurants to grow about 5 percent through 2020, outpacing the 3 percent forecast for the larger chain restaurants.
Sysco and US Foods are the two largest players in the food service distribution industry (together they represent almost one quarter of the market), although there are thousands of smaller companies that compete for business. It estimates that both Sysco and US Foods each derive at least 30 percent of revenue serving the independent restaurant category.
Performance Food Group, meantime, controls about 5 percent of the food service distribution market and it serves corporate-owned and franchisee locations of large chains such as Burger King, Subway and Church's and others.
According to JPMorgan, Amazon Prime's demographic fits well into the typical independent restaurant owner. Moreover, it said Amazon presently has ties to restaurants as a prepared food delivery service in more than 25 markets and could "bundle services and offer better pricing" by perhaps adding food service supply.
As for possible acquisitions in the space, JPMorgan said the firm "would rule out no one but believe USFD is the most likely to combine." It pointed out that US Foods proposed merger with Sysco a few years back ended up getting blocked by the Obama administration's Federal Trade Commission and the courts.
"Should this merger process be restarted, these political obstacles likely drop," JPMorgan said. "Further, we believe AMZN itself could benefit from the national distribution of USFD and a head start in technology."
VIDEO2:0102:01How Amazon's Whole Foods deal will change the US grocery businessDigital Original
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06a6ddba23e28bb7747618d567cfa70f | https://www.cnbc.com/2017/06/23/the-senate-health-bill-would-hugely-roll-back-womens-health-care.html?__source=newsletter%7Cyourmoneyyourvote | The Senate health bill would hugely roll back women's health care | The Senate health bill would hugely roll back women's health care
U.S. Capitol Police remove a protester from in front of the office of Senate Majority Leader Mitch McConnell (R-KY) inside the Russell Senate Office Building on Capitol Hill, on June 22, 2017 in Washington, DC.Getty Images
Senate Republicans' plan to repeal and replace Obamacare, called the Better Care Reconciliation Act, would make it harder for Americans to access health care, and specifically make it harder for women to access crucial health benefits β from birth control to maternity coverage. This may come as no surprise, given that the bill was written by 13 men.
The Affordable Care Act made several changes to improve women's access to health care in the US. The law expanded contraceptive access, required (at long last) private small-group insurers to cover maternity care, and broadened the number of people who could access Medicaid β which pays for half of all births in this country.
These advances mattered to public health when you think about how poorly American women fare compared with women in other rich countries when it comes to several health outcomes. (We have some of the worst maternal health and mortality outcomes in the developed world, and life expectancy for women is going down.) They also gave women some relief from worrying about the cost of accessing very basic health services.
More from Vox: A CNN reporter lost it at the Trump White House on Twitter The Bad Batch isn't a great dystopian film, but it's definitely an interesting one Why telling Democrats to abandon identity politics is "dangerous"
Doctors and reproductive health advocates are saying the GOP's Senate health care billlooks like a big step backward. On Thursday, the bill was released to the public after a secretive deliberation process, and the Senate is expected to cast a vote on it next week. Here are the four key ways this bill could undermine the health of American women.
Medicaid is incredibly important for reproductive health: The program for low-income Americans pays for half of all births, including two-thirds of unplanned births. Three-quarters of the public dollars spent on family planning are Medicaid dollars, and in 17 states, Medicaid programs also cover abortion with state dollars.
The core idea behind the Better Care Act is cutting spending on health care for the poor to finance tax cuts for the rich, as Vox's Andrew Prokop explained. In practice, this means phasing out Medicaid expansion (which made more people eligible for the program) by 2021.
But that's only the beginning. "Once the Medicaid expansion is repealed, Republicans get to work on Medicaid itself, tying the amount it can spend to an inflation index that lags behind how much health care actually costs," Vox's Ezra Klein explains. This will involve converting Medicaid to a "per capita cap" system, which means states would only allot a fixed sum of money to each enrollee, instead of covering all their medical bills. "The result is Medicaid will be able to cover fewer people and cover less of their health care in the future," Klein added.
If fewer people can access Medicaid, and Medicaid is skimpier, that means fewer people can get the women's health and reproductive services that do things like cover cancer screenings, improve access to birth control, and make sure moms and babies have health care throughout a pregnancy and in the months after a baby is born.
If you search the latest draft of the bill and its amendments for language about Planned Parenthood, you won't find it. But provisions about "prohibited entities" are basically attempts to defund Planned Parenthood.
In essence, these sections of the bill say groups that are primarily engaged in family planning services, reproductive health, and providing abortions (other than abortions that are medically necessary or responses to cases of incest or rape) β and whose Medicaid receipts exceeded $350 million in fiscal year 2014 β are barred from receiving federal dollars through several health programs, most importantly Medicaid, for one year.
One group obviously meets that description: Planned Parenthood.
@CecileRichards: There's no question: this is the worst bill for women's health in a generation. We must fight to #ProtectOurCare.
If passed, the provision would mean that if a woman has Medicaid as her health insurance plan, she can't go to Planned Parenthood for her health care and get those services covered. Planned Parenthood would no longer be able to be reimbursed for these services.
Three-quarters of the public dollars spent on family planning in this country are Medicaid dollars. And right now 2.5 million people rely on Planned Parenthood for a range of health care services, like birth control and cancer screenings.
The nonpartisan Congressional Budget Office said that defunding Planned Parenthood will leave thousands of women without access to health care services β and will also result in more unintended pregnancies.
In addition to the attempt to defund Planned Parenthood, there are other ways the bill will make it more difficult for women to access health care.
Effective January 2018, the bill would ban individuals and small employers from using their tax credits to buy health plans that cover abortion (except for when a pregnancy is the result of rape or incest, or an abortion necessary to save the life of the mother).
@nicholas_bagley: Starting pretty much immediately, you can't use subsidies to buy health plans that cover abortion. Period.
"If your plan covers abortion services today, it may not cover abortion services as of January 2018 if this bill were to pass," health law expert Nicholas Bagley told Vox.
Before the ACA went into place, an anti-abortion faction of Congress wanted to make sure federal tax credits to help people buy private insurance on the Obamacare exchanges couldn't be used to pay for plans that provided abortions.
The result was that under Obamacare, private health insurance plans on the exchanges could pay for elective abortions β but couldn't use money from federal tax credits and subsidies to cover those costs. (Instead, insurers were required to have a separate premium for abortion coverage and pay for that coverage through a special fund.)
"With this change, all qualified health plans can't include abortions," said Laurie Sobel, associate director for women's health policy at the Kaiser Family Foundation. It also means employers cannot get tax credits if their plans include abortion coverage. "The effect is that it'll strongly discourage smaller employers from offering coverage that includes abortion," Sobel added.
There's a third way the Senate bill curtails coverage for abortion: It includes a provision banning insurance issuers from accessing funds in the State Stability and Innovation Program β a $115 billion pool of money states could use to keep insurance plans from leaving the market or to lower premiums, among other things β if they offer abortion coverage (again, outside cases of rape, incest, or when a pregnancy endangers a woman's life).
"That means insurers can only pull funds from the program if they do not include abortion coverage beyond Hyde restrictions," Sobel said, referring to the 1976 Hyde Amendment, which restricts federal money from being used to fund elective abortions.
All together, these changes will likely eliminate abortion coverage in the individual health insurance marketplace for individual health insurance nationwide, and have a chilling effect on employer sponsored coverage of abortion too, explained Adam Sonfield, senior policy manager at the Guttmacher Institute, a research and policy organization for sexual and reproductive health and rights.
So access to health care and abortion will be more limited through the defunding of Planned Parenthood (assuming health centers wind up closing), and coverage will be more limited through these restrictions on tax credits and access to funding. That's going to make getting a safe abortion very difficult for a lot of people.
In an attempt to make the insurance marketplace fairer and more viable, the Affordable Care Act required insurance plans sold on the individual market or the fully insured small-group market, and through Medicaid expansion, to cover a list of 10 "essential health benefits."The 10 included pretty basic medical care β like pregnancy and maternity care, as well as mental health and addiction treatment, and lab tests.
Republicans in Congress have consistently tried to scrap this part of the law. And with their latest proposal, they'll have another shot at the EHBs. In a push to win support from the more conservative Freedom Caucus, lawmakers are making EHB requirements optional for states.
"The Senate bill seems to allow states to opt out of Obamacare's marketplaces and essential health benefits requirement," Sarah Kliff explained.
And opting out of the EHBs will be easier than ever. The original ACA included a waiver provision, but states could only take advantage of it if they demonstrated an insurance plan would cover as many people but wouldn't cost more. The new Senate bill would allow states to get a waiver whether or not they could demonstrate they'd cover as many people, and whether or not the coverage would be as comprehensive. "Instead they could get a waiver if they show their plan wouldn't cost the federal government any more," Bagley explained.
Before the ACA, only 11 states required maternity coverage on the individual and small-group markets. And this is what we may be looking at if the GOP gets its way on health care reform. If the Better Care Act passes, it could mean we could turn back to a time before the Affordable Care Act, when some 88 percent of plans on the individual market did not provide maternity coverage.
The Senate chose to try to pass their health reform bill through "budget reconciliation," a process that allows bills to pass with only 50 votes, as Vox's Dylan Scott explained.
The reconciliation process was designed for dealing with bills related to the federal budget, and in particular budget deficit reductions. Under Senate rules (the Byrd Rule in particular), bills passed this way are supposed to be focus on the budget.
Anything in the bill designed for other purposes is suspect and may be stripped out β and the abortion coverage restrictions and defunding of Planned Parenthood are two things that may violate these Senate rules. If the bill is allowed to stand as is, though, it's going to have a major impact on women and, eventually, their children.
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46be57783619d932a89ad1f3d1ab059e | https://www.cnbc.com/2017/06/23/trump-base-will-likely-stick-with-him-if-unpopular-gop-health-care-bill-passes.html | Trump's core voters could suffer most under GOP health bill, but they may not punish him for it | Trump's core voters could suffer most under GOP health bill, but they may not punish him for it
VIDEO0:5500:55Trump's core voters could suffer most under GOP health bill, but they may not punish him for itNews Videos
The Senate health-care bill has sharpened the central political question surrounding the 2017 Republican agenda: Will the voters who made Donald Trump president rebel?
Like the House health-care bill, the Senate version would roll back Obamacare's expansion of insurance coverage under Medicaid. While cutting Obamacare's taxes on the rich, it would shrink both subsidies and requirements on insurers for coverage on exchange marketplaces, leaving many beneficiaries with skimpier protection and higher deductibles. Those changes threaten financial hardship for the very constituency that won Trump the 2016 Republican nomination and tipped the electoral votes that put him in the White House. They violate his explicit pledges to protect Medicaid from cuts and reduce their out of pocket expenses for health care. Yet that doesn't mean those voters will lash out if Congress enacts the cuts and Trump signs them. As an in-depth recent examination of the president's supporters shows, they backed him for different reasons. A broad-based group of analysts conducted the study with support from the Democracy Fund. Emily Ekins of the libertarian Cato Institute identified five distinct groups of Trump voters. Most of them are consistent Republicans. The least loyal Republican group, which formed the core of Trump's support for the nomination from the beginning, is what Ekins calls "American Preservationists." She described this segment β about 20 percent of Trump backers overall β as having relatively low levels of income and formal education. They are the most likely Republican group to be on Medicaid and to be disabled. These voters lean left on economic issues such as trade, income inequality, anger at Wall Street and support for federal entitlement programs. For those reasons, Trump's rhetoric about protecting entitlement programs and raising taxes on the rich offered a natural fit. But so did Trump's tough stance on immigration and harsh words for Mexicans crossing the border. Overwhelmingly white like other Trump voters, "American Preservationists" also hold distinctive views on race. They "have a strong sense of their own racial identity β¦ and believe that anti-white discrimination is as pervasive as other forms of discrimination," Ekins wrote. "They have cooler feelings toward minorities. They agree in overwhelming numbers that real Americans need to have been born in America, or have lived here most of their lives, and be Christian." And the study found that those views of racial solidarity helped propel Trump's general election victory more than his "populism" on trade or entitlements. "What stands out most," concluded George Washington University political scientist John Sides, "is the attitudes that became more strongly related to the vote in 2016: attitudes about immigration, feelings toward black people and feelings toward Muslims." As president, Trump has reflected their attitudes through a series of actions. His administration has toughened immigration enforcement, pursued his travel ban targeted at six majority-Muslim nations, and targeted Obama administration initiatives designed to change law enforcement and sentencing practices. Though five months of controversy have eroded the president's public standing, polls show Trump retains backing from roughly 8 in 10 Republicans. What's unclear now is whether a direct hit from health-care legislation could trigger accelerated fallout among his base of white working-class support. In the swing states Trump carried, those voters gained health insurance coverage in large numbers from Obamacare. They included 376,000 whites without college degrees in Ohio, 355,000 in Michigan, and 242,000 in Pennsylvania, according to an Urban Institute analysis. Trump states such as Kentucky (279,000), Arkansas (128,000) West Virginia (119,000), also reduced the proportion of noncollege whites without health insurance by 47 percent or more. All have Republican senators who have wavered on the legislation. Yet few doubt that Trump will sign whatever health bill House and Senate Republicans agree on β and count on his ability to hold his core supporters. The same is true of forthcoming tax-reform legislation, which from all available indications will confer disproportionate benefits on the wealthiest Americans. "I'm not sure they will punish him," said Sides. The economy is currently healthy, insurance cutbacks will take years to phase in, and Trump's emotional bond with those voters has been strong. Republican House members and some senators, however, must face voters in 2018, two years before Trump does. An economic downturn could upset their calculus. Their relationship with Trump voters is also different than Trump's. Next week's planned Senate vote will test whether they share his confidence.
VIDEO0:3700:37Police forcibly remove disabled protesters from Capitol Hill Digital Original
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46381abd9e7c5ccb07e47b05e0879929 | https://www.cnbc.com/2017/06/23/wall-street-bear-tom-lee-slashes-earnings-estimates-for-the-sp-500.html | Already bearish strategist Tom Lee slashes his earnings estimates for the S&P 500 | Already bearish strategist Tom Lee slashes his earnings estimates for the S&P 500
VIDEO4:0504:05Lower inflation means revenue growth pressures: Tom LeeHalftime Report
Fundstrat's Tom Lee slashed his earnings estimates for the market, but remained bullish on FANG stocks due to their strong growth rates.FANG is an acronym created by CNBC's Jim Cramer for a basket of high-growth technology stocks β Facebook, Amazon, Netflix and Google parent Alphabet. "As we approach mid-year, we are revising [2017 and 2018 earnings] to reflect weaker inflation, flattening yield curve, rising labor costs and 'pushed out' timing of White House agenda," Lee wrote in a note to clients Friday. "Investors argued low inflation [is] good for stocks via multiple (higher P/E) β this ignores developing profit margin squeeze, as unit labor costs rise."The strategist lowered his S&P 500 earnings-per-share forecast for 2017 to $127.50 from $134.63. He also reduced his estimate for 2018 to $138 from $146.63. In a lower profit environment, Lee recommended investors "focus on higher EPS growers" such as FANG stocks."You want to buy secular growth which is FANG," Lee said on CNBC's "Halftime Report" Friday. "I think the business cycle is a little out of whack. Capacity utilization is still low β¦ The only thing a little tight is the labor market. So we have labor inflation coming."Lee reaffirmed his year-end 2,275 price target for the S&P 500, representing 7 percent downside from Thursday's close. The forecast ranks as the lowest target on Wall Street, according to CNBC's Market Strategist Survey.
Disclaimer
VIDEO3:3103:31Why Wall Street's most accurate analyst urged traders to buy the tech wreckFast Money
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baa705fe4475ca5e2f7e799a0288a482 | https://www.cnbc.com/2017/06/24/wesearchr-charles-johnson-alt-right-causes.html | The far right uses this site to fund its favorite causesβand its founder hopes to build a 'very profitable business' | The far right uses this site to fund its favorite causesβand its founder hopes to build a 'very profitable business'
Charles βChuckβ JohnsonPhoto by Peter Duke Β©2017 used with kind permission
When supporters of Andrew Anglin, editor of neo-Nazi website The Daily Stormer, wanted to raise funds to help him in a legal battle against the Southern Poverty Law Center, they turned to the only site that would allow them to host this type of campaign: WeSearchr.
In less than two months, the Daily Stormer vs. SPLC Legal Defense Fund campaign raised more than $155,000. The money will allow Anglin to fight a lawsuit brought against him by Tanya Gersh and the SPLC. The plaintiffs allege Anglin motivated his followers to threaten Gersh after Anglin believed she harassed the mother of "alt-right" figure Richard Spencer.
Many people turn crowdfunding sites to tap into the generosity of the public for social causes. However, most crowdfunding companies like Kickstarter, Indiegogo and GoFundMe have a strict policy against campaigns they consider racist, sexist, or encouraging harassment.
WeSearchr welcomes them allβand takes a steep 15 percent cut, about three times what its competitors charge.
"They don't do controversial bounties or controversial crowdfunds," said WeSearchr co-founder Charles "Chuck" C. Johnson. "They'll just throw them off. We're willing to take pretty much anyone, so long as the cut is larger."
WeSearchr was never meant to be a platform just for the "alt-right," Johnson insists, although he's the founder of a news site called Gotnews.com that is clearly to the right of mainstream news outlets.
But he believes left-leaning publications and websites have created a hole for people with these ideological values, he said. That's where WeSearchr steps in.
"We're basically the monopoly for people on the right," he said. "There's literally nowhere else for them to go."
Johnson, born in 1988, got his start as a right-wing journalist and provocateur. At Claremont McKenna college, he created a blog called the Claremont Conservative and often engaged in public spats with campus figures, according to a profile in Mother Jones. After graduation, he gained notoriety for provocations like trying to identify "Jackie," the anonymous source who told Rolling Stone about being gang-raped at the University of Virginia; the magazine retracted the story after further investigations found no evidence the event ever happened.
Johnson founded Wesearchr in 2015 with Pax Dickinson, an engineer who left Business Insider in 2013 after other publications called attention to offensive remarks he had made on Twitter. (Dickinson cut ties with Johnson and the site earlier this year.)
Johnson says the idea came after he heard of the story of a Oregon couple who was trying to raise legal funds after they were sued for refusing to bake a wedding cake for a gay couple. The couple was kicked off GoFundMe, which changed its policy to ban "campaigns in defense of formal charges or claims of heinous crimes, violent, hateful, sexual or discriminatory acts."
Although Johnson supports gay marriage, he also feels strongly that everyone should have the right to defend themselves regardless of view.
"I think the market created an opportunity," Johnson said.
As the world grows more fragmentedβespecially when it comes to political thoughtβpeople are looking for new ways to share their opinions, agrees Matt Britton, the CEO of marketing firm Crowdtap.
"People are voting with their money," Britton said. "If they want to invest in something, they feel like they should have the right to."
The idea that crowdfunding can be politicized isn't exactly newβin some senses, political campaigns have been doing it forever.
"You can treat political campaigns as the original source of crowdfunding," said Christophe Jammet a director at DDG, a firm that helps businesses figure out their digital strategies. "In that sense, crowdfunding has been happening for a long time."
WeSearchr works by letting a userβcalled an "asker"βpost a request for information on a certain subject. They can also ask community members to donate money to motivate people to find the answer.
After fundraising reaches a certain threshold, the asker and the WeSearchr staff review submitted answers. If both agree information provided addresses the original prompt, the evidence is released to the asker. The asker has the option to publish the information or ask WeSearchr to help find an outlet.
If the information is not discredited within 30 days, 75 percent of the funds go to the person who provided the answer, 10 percent goes to the asker, and WeSearchr keeps 15 percent. We Searcher's cut is higher than other crowdfunding platforms, Johnson says, to offset mounting costs from things such as fending off online attacks and arguments with payment processing companies, Johnson said.
Other crowdfunding sites show that these kinds of microdonations can add up. Kickstarter has raised over $3.1 billion for projects since it launched in 2009, with funds from more than 13 million people. Indiegogo said it raised more than $800 million has for creative, entrepreneurial and cause-related projects through 2015.
"I intend to build a very profitable business to get a return for my investors, and I intend to build it up in a more serious way so it is as well known as the other crowdfunding sites," Johnson said.
The platform's open policy has turned it into a destination for personal fundraising causes.
For instance, there's a legal defense fund for Laura Loomer, a woman who was arrested for protesting a performance of "Julius Caesar" in New York where a President Donald Trump-inspired Caesar is murdered on stage. People are also raising money for Republican Montana congressional candidate Greg Gianforte who allegedly "body slammed" a reporter during an interview. It's also raised more than $87,000 in legal support for Kyle "Based Stick Man" Chapman, who became an alt-right hero after a clip of him breaking a wooden sign on the head of an anti-Trump protester went viral.
One of its new popular campaigns is for Katie McHugh, a Breitbart editor who was fired after tweeting "There would be no deadly terror attacks in the U.K. if Muslims didn't live there. #LondonBridge" on June 3.
You may not agree with McHugh's sentiments, but you can still support her need for healthcare and to give her the opportunity to seek other employment, Johnson said.
"There's a lot of different contentions people have when they donate money, and I think that's what a lot of people miss out on," Johnson said.
Charles βChuckβ JohnsonPhoto by Peter Duke Β©2017 used with kind permission
Johnson has been accused of seeding the site with prompts for evidence he already had. A February Heat Street article reported during the first six months of WeSearchr, only five of the campaigns were funded enough to reach payout status, and two were solved by Johnson himself.
One of the issues with crowdfunding sites is there's very little protection for the consumer or those donating money, DDG's Jammet points out. About one in 10 Kickstarter projects never get sent to backers, according to Fast Company. There's no guarantee where your money goes.
"(Crowdfunding's) not an investment vehicle," Jammet said. "They're just means for people to throw money towards causes or ideas that they are very supportive of. The prospect of any return on investment or reward is tenuous at best."
Johnson admitted he could have been clearer between the distinction between prompts that needed evidence and those that already had known existing documentation.
But he says the evidence in a case he solvedβa video of Barack Obama during an early trip to Kenya which raised over $10,000 and an purported early manuscript of "Dreams From My Father" which raised over $7,800βcost Johnson and his team money to obtain, he said.
"We put it up," Johnson said. "People crowdfunded it. If they wanted to pay it off that's fine. If they didn't that's fine with me too."
The misunderstanding gave Johnson his next big idea, which could be the first step toward building an entire right-wing media empire. He's working on a site called WeLeaker, which he called "a crowdfunded TMZ to buy stories," which he hopes to launch in the next few months.
He's also working on the backend of WeSearchr so one day people can create their own ideologically based crowdfunding sites, like one specifically for Christians. Johnson is also considering investing in businesses to process the cash from medical marijuana, and has started a bitcoin mining operation. "I want to be a serial entrepreneur, investor, in addition to my political stuff," Johnson said.
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fc674219db3601222efe5a75c3edddd8 | https://www.cnbc.com/2017/06/25/investors-setting-themselves-up-for-painful-trade-strategist-warns.html | VIDEO1:3701:37Too much fear in market, strategist saysFutures Now
Bond investors may soon pay a hefty price for being too pessimistic about the economy, according to portfolio manager Joe Zidle.
Zidle, who is with Richard Bernstein Advisors, believes the vast amount of money flowing into long-duration bonds is signaling a costly mistake.
"Last week alone, there is a that in one week got more inflows than all domestic equity mutual funds, and all domestic equity ETFs combined year-to-date," he said recently on "Futures Now."
He added: "I think investors are going to be in a real painful trade."
The yield on the 30-year bond, often referred to as the long bond, sank as low as 2.71 percent on Friday, its lowest level since November 9th.
The action in the bond market comes as the has ripped higher, having hit new records this year along with other stock benchmarks.
"Here we are, midway through 2017, and equity markets are up as much year-to-date as they were in all of 2016. And yet investors are afraid," said Zidle.
He notes that the underlying fundamentals suggest the economy is heating up, and that bodes very well for the stock market's performance.
"The data tells you that earnings all around the world are accelerating while interest rates still remain pretty low. That's actually really good for corporate profits," he said.
Therefore, Zidle is encouraging investors to reach for cyclical stocksβparticularly financials which have been market laggards so far this yearβinstead of putting money into bonds.
"I think financials could be the big surprise for the second half of 2017," Zidle said. "Banks and financials are very cyclical. As the economy does better, they're going to do better."
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42f00b3129dd800983d3e88ba9b4cf83 | https://www.cnbc.com/2017/06/25/startup-india-.html | Facebook's WhatsApp is so huge in India that one app reached 9 million users without spending a dime | Facebook's WhatsApp is so huge in India that one app reached 9 million users without spending a dime
VIDEO0:4600:46Facebook's WhatsApp is so huge in India that one app reached 9 million users without spending a dimeNews Videos
Emerging brands in the U.S. count on Facebook to promote themselves online. In India, they also rely on a Facebook service, but one that doesn't cost them anythingβWhatsApp.
According to Mary Meeker's annual internet trends report published last month, WhatsApp is the most popular Android app in India, followed by Facebook Messenger at number two and the core Facebook service at number five.
With over 200 million users in India, WhatsApp is how digital health start-up 1mg went viral, even without founder Prashant Tandon having to spend any money promoting it. Since its launch in 2015, more than 9 million people have downloaded his app, which helps users research prescription drugs and find the lowest prices.
"One of our users created a long WhatsApp message on what a public service it was, and people just started sharing it," said Tandon, a graduate of Stanford Business School who returned to India in 2009 to build digital tools for the country's health care system. "We didn't do any marketing to get where we are."
Facebook CEO Mark Zuckerberg took a massive gamble on WhatsApp in 2014, shelling out $19 billion for a wildly popular messaging service that generated almost no revenue. While WhatsApp is still early in proving out a business model, analysts at Pacific Crest Securities predict that in coming years each active user could produce at least $2 of revenue per month.
In the debate over rising drug prices, both drugmakers and PBMs claim innocence
Tandon's entrepreneurial endeavors started with his first company HealthKart, which sold health and wellness products online. He spun out 1mg from HealthKart after noticing that there was a big price differential between the various generic medicines in India. He figured he could point consumers to the cheapest option.
Tandon expected that it would be reasonably popular, as most people in the country have an incentive to check pricing as they buy their drugs out-of-pocket. He pulled together information about medicines from books, pamphlets, and distribution records.
Developers for 1mg then put that database on an app, later adding a transaction component so consumers could use it to buy prescription drugs, order diagnostic tests and consult with a physician online. That proved to be particularly appealing to those in rural areas with little access to doctors.
The company's rapid growth attracted investment from Silicon Valley's technology investors. Maverick Capital, Sequoia Capital and Omidyar Network invested in a $16 million round last year.
"1mg has the potential to be the pervasive healthcare app for India," said Shailesh Lakhani, an India-based investor with Sequoia Capital.
The app now gets 65 million page views per month, said Tandon, making it one of the largest digital health companies in the region.
It also an option to upload a prescription to the app via a smartphone photo. And as a reminder that 1mg is an e-commerce company, the medicine is delivered straight to the user's doorstep.
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b17ba66e320a8c267dd5e068f998da81 | https://www.cnbc.com/2017/06/26/2017-international-paris-air-show-boeing-airbus-lockheed-martin.html | Paris Airshow 2017 | Paris Airshow 2017
Traditional plane makers, space adventurers, software developers, and futuristic concepts were all battling for attention at the 52nd Paris Air Show last week.
The event ran until June 25 and CNBC looks back at some of the hardware that stole the headlines.
Source: Boeing
Boeing won the orders race at Paris and the one big reason was its unveiling of the Boeing 737-Max 10. It is the latest version of Boeing's fastest ever selling airplane.
The 737 MAX 10 has been launched as a competitive answer to the successful Airbus A321neo. The narrow body single-aisle plane took 371 orders and intentions from 16 different customers at the show. That equates to around $46 billion worth of business at list price, which is generally in excess of what the plane actually sells for.
Source: Boom Supersonic
The last commercial supersonic flight was, of course, Concorde in 2003. Now, a U.S. firm says it wants to bring back traveling faster than the speed of sound by 2023. Boom Supersonic announced 76 orders from "five major airlines", although only Virgin has been unveiled.
The plane isn't built yet but testing will take place on a smaller "Baby Boom" plane next year. The full plane comes with two configurations of either 55 business class seats or 15 business with 30 first class seats on longer flights. A business class return ticket from London to New York is estimated at $5,000.
A U.S. soldier stands guard as a Lockheed Martin F-35 Lightning II aircraft is moved, on the eve of the 52nd Paris Air Show at Le Bourget Airport near Paris, France June 18, 2017.Pascal Rossignol | Reuters
Lockheed Martin and the U.S. Department of Defense showcased the F-35B fighter jet at Paris as the troubled program attempted to win over doubters. Dubbed the most expensive weapon ever, the F-35 is expected to cost the Pentagon $379 billion over 40 years to buy more than 2,400 of the warplanes.
Maintenance is not included in that figure. Despite the cost overruns, ongoing technical issues and years of delays, it seems the plane is still attractive to some. Reuters reported that Lockheed Martin is on the brink of a huge $37 billion deal to sell 440 F-35 fighter jets to 11 nations.
Source: Airbus
Airbus announced $39.7 billion worth of new business during the 2017 Paris Air Show. More than three-quarters of this business came from 306 orders and commitments for versions of its narrow body A320 family. The U.S. carrier Delta Airlines ordered 10 more Airbus A321s, adding to its previous commitment to buy 30. The A321 can hold up to 236 passengers and comes with a stated range of 3,700 miles.
Getty Images | Workhorse
A safer version of the helicopter is the aim of Workhorse founder and CEO Steve Burns, who says the Surefly Octocopter concept came to him when stuck in commuter traffic while on a school run. Running on gasoline, the concept vehicle offers a 50-mile range and can be taken to an altitude of 3,000 feet.
It comes complete with battery backup in case of engine failure and even a parachute if all else fails. The Surefly founders say farmers who can't afford helicopters could be a typical customer. Workhorse wants it certified by 2019 and is envisioning a price tag of around $200,000.
Getty Images | Marlene Awaad
Another traffic busting option on show at Paris was the Slovakian AeroMobil 4.0 flying car. Running on gasoline, the AeroMobil as a car can hit a top speed of 100 miles per hour and as a plane more than 200 miles per hour.
The foldable wings allow transformation of the vehicle from car to plane in 3 minutes. The AeroMobil has started a two-year countdown to flight certification and will eventually be on sale for an estimated $1.2 million dollars. The firm says high net-worth individuals from business, sport and music are already showing interest.
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926a849bbaac2eb9f78afb117c2dc744 | https://www.cnbc.com/2017/06/26/rbs-to-cut-443-jobs-in-uk-move-many-of-them-to-india.html | RBS to cut 443 jobs in UK, move many of them to India | RBS to cut 443 jobs in UK, move many of them to India
ATM cash machines outside a branch of the Royal Bank of Scotland in Edinburgh.Getty Images
British lender Royal Bank of Scotland is planning to cut 443 jobs dealing with business loans and many of them will move to India, the bank said.The Edinburgh-based bank said the cuts were part of a restructuring aimed at becoming a smaller bank."We realise this will be difficult news for staff and we will do everything we can to support those affected," the bank said in a statement. "All roles which require customer contact will remain in the UK."RBS, which is more than 70 percent state-owned, is in the midst of a major restructuring aimed at returning the bank to profit after almost a decade of straight years of losses.The bank was rescued with a 46 billion pound ($58.48 billion) state bailout during the 2007-09 financial crisis.
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bd4f34d5393028e1a304e94378fc4bdc | https://www.cnbc.com/2017/06/27/chinese-ceos-are-less-optimistic-about-the-global-economy-than-peers-survey-finds.html | Chinese CEOs are less optimistic about the global economy than peers, survey finds | Chinese CEOs are less optimistic about the global economy than peers, survey finds
Chinese CEOs are less optimistic in their growth outlooks for the world economy than their global peers, according to a study released by professional services firm KPMG on Tuesday.
Only 54 percent of CEOs at China-based firms surveyed say they're confident in the global economic growth outlook, versus 69 percent of top executives at firms around the world.
Jack Ma, Chairman of Alibaba Group at the World Economic Forum in Davos, Switzerland.David A. Grogan | CNBC
There are also growing concerns and questions about how to position for a changing geopolitical climate. More than one-third of the China CEOs said they are reassessing their global footprint given shifting environments because of globalization and protectionism. In fact, over half of the business leaders said the uncertainty of the current geopolitical environment has had more impact on their organizations than they had seen in a number of years.
China, home to the world's second-largest economy, is now seeing a dramatic shift in how it seeks continued growth. Once nearly synonymous with cheap labor and low-priced goods, the government is now looking for new ways to add value and growth to the economy by boosting innovation, consumption and the services sector.
On top of that, technology continues to disrupt a number of industries. And given China's rapid rise, authorities are working to catch up with new policies and regulations.
"China's restructuring process and an increasingly sophisticated consumer are leading to both challenges and opportunities," KPMG China Chairman Benny Liu said in a statement. CEOs are adapting to the new environment, working to embrace innovation and disruption, he said.
What that means is a rapidly moving backdrop for companies operating in China and, as such, focusing on innovation is a key priority going forward for China CEOs.
But even as risks and challenges have arisen, top executives aren't shying away from continued investment in a number of areas, including cybersecurity, digital infrastructure and innovation. It's all part of wider efforts to stay one step ahead in products and business models.
The survey also found that more CEOs from the U.S. and Europe are looking to their own domestic economics to seek growth, while ones from Asia are looking to international markets. Chinese CEOs in particular are interested in Australia, Germany and the U.K. as overseas growth opportunities.
KPMG surveyed 1,261 global CEOs, 125 of whom are from China-headquartered companies, operating in 11 key industries including automotive, banking, insurance, investment management, energy, life sciences, retail and more.
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d4358857b2b2c248fd6102a07bff34f5 | https://www.cnbc.com/2017/06/27/could-the-senate-gops-obamacare-repeal-lower-your-premiums-it-depends.html | Could the Senate GOPβs Obamacare repeal lower your premiums? It depends | Could the Senate GOPβs Obamacare repeal lower your premiums? It depends
Senate Majority Leader Mitch McConnell, R-Ky., followed by Sen. John Barrasso, R-Wyo., and Sen. Cory Gardner, R-Colo.Bill Clark | CQ Roll Call | Getty Images
Here's how the Senate GOP's health-care bill could affect you.
The Congressional Budget Office estimates the Senate's health-care reform bill will bring the uninsured rate back to pre-Obamacare levels by 2026, resulting in 22 million people not having coverage due to "lower spending on Medicaid and substantially smaller average subsidies for coverage" in the individual market.
The CBO estimates that under the Senate's proposal, premiums will be based on a benchmark plan that includes less coverage and higher deductibles, which will mean lower premium subsidies.
The difference could be especially pronounced for baby boomers like independent consultant John Nehls, whom we met this spring. He's worried about rates next year, because once again there will be just one insurer offering coverage on the exchange.
"Our only choice will be whatever Blue Cross decides to offer," said the 55-year-old Knoxville, Tennessee, resident, who makes about $40,000 a year.
This year, Nehls' exchange plan for his family of three cost $23,640, but because he was eligible for a tax subsidy his net premium was $6,240 for the year. His subsidy is based on a more generous mid-tier silver plan.
Because of his age, under the Senate plan insurers could charge him up to five times more than a younger person, and he would have to kick in more of his income toward his premium before he would be eligible for a tax subsidy.
For a single person around 60 years old and in Nehls' income bracket this year, a mid-tier silver plan in Knoxville costs about $12,530 a year, according to analysts from the Kaiser Family Foundation. With an $8,450 tax subsidy, the net cost falls to $4,080 or about 10 percent of the person's income.
Under the Senate plan, the annual premium on a silver plan for the 60-year-old would shoot up to about $16,800, while the tax credit would decrease to $7,750. The net annual cost would be $9,080, or about quarter of the individual's income.
"That's pretty steep to be paying for health care," said Nehls, who has high medical needs after a biking accident left him in a wheelchair three years ago.
For a younger person earning roughly the same income, prices would be dramatically cheaper, according to the Kaiser Family Foundation.
Under Obamacare, a 27-year-old in Knoxville would pay about $4,840 a year for a silver plan. With the new age rating under the Senate plan, that gross premium would drop to $4,460. Under the Senate plan, the 27-year-old would only be expected to pay 8 percent of his or her income, which would mean a net premium of less than $3,200 β 22 percent less than under Obamacare.
The CBO estimates for working poor enrollees who earn less than the federal poverty level, access to subsidies under the Senate bill would still not be enough make coverage affordable.
In one example, CBO researchers estimate that for the 2.6 million Americans in states that did not expand Medicaid, like Texas and Florida, net annual premiums by 2026 would be just $300 a year, after subsidies for a low-tiered bronze plan.
However, those cheap plans would come with unaffordable out-of-pocket costs. For a person earning below $11,500 "the deductible would be more than half their annual income" under the Senate plan, according to CBO analysts.
The CBO expects about half of the U.S. population would be in states that would seek waivers to provisions of Obamacare's essential health benefits, but that under the Senate bill there would be more pressure on states to compete for federal funding "to pursue their policy goals."
Nehls has hopes that if Republicans push through legislation to let people buy insurance across state lines in more balanced markets, that it would foster greater competition.
For now, the thought of not having a plan that he can afford to pay for is frightening.
"That you could literally have nothing β then what?" he asked. "Walk into the hospital and say: Treat me?"
Read more: The Senate bill's new health coverage penalty is a throwback
VIDEO0:5500:55Kellyanne Conway has a message for the 75 million people on Medicaid: Just get a jobDigital Original
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166a9d0baadc8cc89dec34f846619a41 | https://www.cnbc.com/2017/06/27/goldman-buy-and-hold-investing-stock-picks.html | Goldman says βbuy and holdβ investing is broken, but this new strategy will work | Goldman says βbuy and holdβ investing is broken, but this new strategy will work
Ramin Talaie | Getty Images
Goldman Sachs told clients that the environment is more difficult for picking stocks of quality companies, and as a result investors should be willing to accept longer holding periods and hold fewer stocks.
The Wall Street firm has revised a list of recommended stocks it calls the GS Sustain 50 to reflect the new market realities."Quality investing faces challenges it isn't used to," Goldman's Hugo Scott-Gall wrote in a research note Sunday. Returns aren't as strong from simple buy-and-hold quality strategies, he said. "With returns on capital falling and growth lower, fewer companies are in the virtuous compounding circle."
"Buying and holding" quality companies with high returns on capital, a measure of how effectively a firm can turn capital into profits, worked from 2005 to 2011, he said. The top 20 percent of companies as measured by return on capital outperformed their sector by 13.1 percent per year in that time period. However, the same strategy only beat its peers by 2.5 percent per year from 2010 to 2016. The strategist said returns have suffered because companies invested less, which led to lower sales growth. For example, the three-year trailing sales growth for the top 20 percent of companies as measured by return on capital went from 11 percent per year from the 2007 to 2009 and 2011 to 2013 time periods to 6 percent per year from 2014 to 2016. As a result, Goldman made some key changes to its strategy. "While maintaining our bedrock focus on competitive advantage β¦ we prioritize growth and positive momentum in returns on capital β companies which won't just maintain high returns but also expand them," he wrote. In addition, the firm reduced the size of its recommended list as its analysis revealed that funds with fewer total positions have done better over time. Here are six buy-rated stocks in the new GS Sustain stocks idea basket.
Disclaimer
VIDEO0:5800:58How Warren Buffett makes long-term investmentsMake It
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f740fdc54d980850cc072505c7b9e92f | https://www.cnbc.com/2017/06/27/google-says-its-appeal-of-eu-fine-isnt-likely-to-work.html | Google said in a filing it expects to pay $2.7 billion EU fine, suggesting appeal might not work | Google said in a filing it expects to pay $2.7 billion EU fine, suggesting appeal might not work
Google CEO Sundar PichaiGetty Images
Google was hit with a massive $2.7 billion antitrust fine by the European Union on Tuesday, and it sounds like the company expects to pay it.
In an 8-K filed with the United States Securities and Exchange Commission, Google said it will "review the formal decision, but expects that it will accrue the fine in the second quarter of 2017."
In other words, Google may not see much of a chance to win in a potential appeal of the suit, and instead expects that it'll just pay the fine and move onward.
The European Union fined Google for promoting its own shopping results ahead of competitors. Google responded to the fine and argued that its ads help smaller European merchants compete directly with Amazon and eBay. Speaking of Amazon, Google said it views the company as a "formidable competitor" in the space.
In addition to the fine, the EU directed Google to terminate its anti-competitive practices.
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709803354cfaf8ea78e4291ce7951eb6 | https://www.cnbc.com/2017/06/27/jpmorgan-partners-with-ges-current-to-reach-lofty-environmental-goals.html | JPMorgan partners with GE's Current to reach lofty environmental goals | JPMorgan partners with GE's Current to reach lofty environmental goals
Source: JP Morgan
JPMorgan Chase announced Wednesday that it has partnered with General Electric and its energy startup, Current, to reduce the company's environmental impact across 4,500 branches in the U.S.
The company's goals are to reduce total energy consumption by 15 percent, including a 50 percent reduction in lighting consumption β equivalent to removing 27,000 cars from the road annually for 10 years.
The company will also reduce water consumption by 20 percent, pilot solar technology at branches across California, and invest more than $200 million to reduce its carbon footprint.
These steps are all helping the company reach its long-term goals of reducing greenhouse gas emissions 50 percent below 2005 levels by 2020, offsetting 100 percent of employee air travel emissions on an annual basis and bringing new renewable energy capacity to the grid.
David Owen, chief administrative officer of JPMorgan, listed multiple reasons for implementing these environmentally friendly changes.
"As we think about the future of our branch and workplace, we're always looking for smart strategies that make our business and buildings more sustainable," said Owen in Wednesday's press release. "This technology will help us run our facilities more efficiently, reduce energy consumption and improve the experience for our clients, customers and employees."
The initiative will also lead to some financial benefits. A spokesperson at JP Morgan said that the company expects to reduce their branch energy expense by around 15 percent and save about $200 million over 10 years.
This newly announced project is the second step of a 2016 collaboration between JPMorgan and GE, when JPMorgan worked with Current to build the world's largest LED installation.
The company is committed to retrofitting 4,400 branches as well as 60 corporate sites with LED lights, according to Michael Norton, managing director of real estate. It is already halfway through, and on track to reach its target completion date: the end of 2017.
The second phase of the LED project involves installing building management systems at 40 branches, which is predicted to be completed within the next 18 months. Norton called the BMS "the brain behind [the project] to actually control the lighting, sprinklers, and AC."
So far, the project has caused very minimal disruption, as the work has been done after hours, and BMS systems can be installed in one night.
Norton said that other companies could follow suit in reducing their environmental impact.
"When I've worked on retrofits of this scale in the past, I've often had calls from other firms who ask, 'How can we play in this arena? We should consider this as well,'" said Norton.
Maryrose Sylvester, president and CEO of Current, said to expect more collaboration announcements between Current and other companies in the summer and into the fall.
"[JPMorgan] is the first big headline deal. We know this space where this would make sense for early adoption is retail banking, big box retail, industrial facilities and cities. The goal is to become a trusted adviser on energy and then move them to a digital platform. ... We think this is a major platform play," said Sylvester.
β CNBC's Morgan Brennan contributed.
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a72fdcd5d35eac9e934ffbaa03d1ace5 | https://www.cnbc.com/2017/06/27/republican-democrat-fannie-mae-freddie-mac.html | A Republican and a Democrat team up to split Fannie Mae and Freddie Mac | A Republican and a Democrat team up to split Fannie Mae and Freddie Mac
Sen. Mark Warner, D-Va., left, speaks with Sen. Bob Corker, R-Tenn.Bill Clark | CQ Roll Call | Getty Images
In the Senate, a Republican and a Democrat are working on a bipartisan deal to change the housing finance industry.
Tennessee Republican Bob Corker and Virginia Democrat Mark Warner are considering a plan that would split up Fannie Mae and Freddie Mac, according to Bloomberg. The government took control of the two companies in 2008 when the housing market collapsed and has since pumped $187.5 billion into them.
The lawmakers are debating splitting Fannie and Freddie's single-family businesses and multi-family businesses, which finances apartment rentals, sources told Bloomberg. From there, they could continue to divide the single-family business into smaller companies.
Fannie and Freddie back more than $4 trillion in housing securities, according to Bloomberg. Lawmakers have worried that the size of the two companies encourages taxpayer-funded bailouts if they run into trouble.
The two Senate Banking committee members started working on the plan earlier this year, according to Bloomberg. The committee held a housing finance hearing last month and plans to hold another on June 29.
Read the full Bloomberg story here.
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724f37280543b27d5c2c7d30b8e349cd | https://www.cnbc.com/2017/06/27/senate-obamacare-replacements-tax-cuts-would-help-the-rich.html?__source=newsletter%7Cyourmoneyyourvote | Senate GOP health-care bill's tax cuts would be a big boon for the rich, analysis says | Senate GOP health-care bill's tax cuts would be a big boon for the rich, analysis says
VIDEO3:5603:56Sen. Casey: GOP health care bill is 'obscene'Squawk Box
Nearly half of the tax benefits from the Senate's Obamacare replacement bill would go to the top 1 percent of households by income, according to a new analysis.
About 45 percent of the benefits from the Republican health-care bill's tax cuts will go to households making $875,000 or more, according to the analysis by the Urban Institute and the Brookings Institution's Tax Policy Center released Monday. That group would see an average rise in after-tax income of about 2 percent, versus a 1 percent increase for the lowest 20 percent of households and 0.4 percent for middle-income Americans.
The Senate proposal, the Better Care Reconciliation Act, like a similar bill that passed the House, repeals an array of Obamacare taxes including the 3.8 percent tax on net investment income. It takes the 0.9 percent Medicare surtax off the books in 2023 and delays the so-called Cadillac tax on high-cost employer plans until 2026, among other tax-related measures in the plan.
The Tax Policy Center breaks down how much of the tax cut would go to each American income group.
Source: Tax Policy Center
In a report Monday, the Congressional Budget Office said the Senate proposal would reduce federal revenues by $701 billion. Savings of $1.02 trillion β much of that from scaling back Medicaid spending β would lead to a deficit reduction of $321 billion over a decade, according to the CBO.
When the bill was unveiled, Democrats immediately slammed the plan's tax provisions, with some claiming that the GOP described a tax cut as a health-care bill. Senate Minority Leader Chuck Schumer said last week that "Republicans want to give a tax break to the wealthiest Americans."
The GOP aims to follow the passage of a health-care bill with a tax reform plan that slashes corporate and income tax rates. The White House has contended that it seeks middle-income tax relief, though some analyses of President Donald Trump's campaign tax reform plan showed that it could benefit wealthy Americans the most.
The Tax Policy Center notes that the analysis "excludes health insurance tax credits, which under current law mostly benefit low- and middle-income households."
The analysis of taxes in 2026 follows the CBO report projecting the bill's effects through that year. The office estimated that the Senate bill would lead to 22 million more Americans uninsured.
Senate Majority Leader Mitch McConnell's office and the White House did not immediately respond to requests to comment on the analysis.
Read the full Tax Policy Center analysis here.
CBO: 22 million more people to lose insurance by 2026 under Senate health-care bill
VIDEO1:3701:37CBO: 22 million more people to lose insurance by 2026 under Senate health-care billSquawk Box
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ecb1f685fc64f7a69a48d5237b367c8c | https://www.cnbc.com/2017/06/27/senate-will-delay-vote-on-health-care-bill-until-after-july-4.html?__source=newsletter%7Cyourmoneyyourvote | Mitch McConnell is forced to delay vote on Senate GOP health-care bill as several members oppose plan | Mitch McConnell is forced to delay vote on Senate GOP health-care bill as several members oppose plan
VIDEO0:2700:27Mitch McConnell: Working on getting 50 people to support health-care billPower Lunch
Senate Republicans will delay a vote on their Obamacare replacement bill until after July 4, Senate Majority Leader Mitch McConnell said Tuesday, as the party faces opposition from enough GOP members to block the measure.
The move marks a setback for the Kentucky Republican, who had hoped to win support to approve the bill this week before senators leave for the holiday recess.
"We're going to continue the discussions within our conference on the differences that we have that we're continuing to try to litigate. Consequently, we will not be on the bill this week, but we're still working toward getting at least 50 people in a comfortable place," McConnell said, adding that he is still "optimistic" about passing Obamacare replacement legislation.
As of Tuesday afternoon, five Republican senators β enough to block a procedural motion to move forward with the bill β said they would oppose the motion barring changes to the plan. A Congressional Budget Office score on Monday estimated that the proposal would lead to 22 million more uninsured Americans by 2026, only complicating matters for moderate GOP senators on the fence.
Republicans face difficulties in winning over skeptical senators, as tweaks to appease conservatives could alienate moderates, or vice versa. The hurdles threaten to delay a key plank of the sweeping agenda Republicans hoped to pass when President Donald Trump won the White House and the GOP held onto both chambers of Congress.
Senate Majority Leader Mitch McConnell (R-KY) speaks during a press conference after a closed-door Senate GOP conference meeting on Capitol Hill, June 27, 2017 in Washington, DC.Getty Images
At a White House meeting with GOP senators later Tuesday, Trump shrugged off the delay and said "we're getting very close" to striking a deal despite the disagreements.
After the meeting, McConnell told reporters, "either Republicans will agree and change the status quo, or the markets will continue to collapse and we'll have to sit down with Senator Schumer." The Senate majority leader said he suspects the Republicans would not be able to get the reforms they want if they have to negotiate with the Democrats.
Trump tweeted Tuesday evening that the Republicans are working hard without support from the other side of the aisle.
@realDonaldTrump: With ZERO Democrats to help, and a failed, expensive and dangerous ObamaCare as the Dems legacy, the Republican Senators are working hard!
GOP Sen. Susan Collins of Maine, a swing vote, said Monday night she would vote "no" on the motion to proceed, tweeting that the Senate bill does not "fix the flaws" of Obamacare. She joined Sen. Dean Heller, a vulnerable Nevada Republican who previously said he would vote against advancing the bill as written due to its rollback of Medicaid expansion.
On the conservative side, Sens. Rand Paul of Kentucky and Ron Johnson of Wisconsin also said they would not back a motion to proceed this week for the bill as written. Sen. Mike Lee of Utah also said he would oppose the procedural move barring tweaks to the bill, according to The Associated Press.
Those senators and Ted Cruz of Texas were the first to publicly announce opposition to the current bill. They argue that the plan does not go far enough to repeal Obamacare.
After meeting with Trump at the White House earlier Tuesday, Paul said in a tweet that the president is "open to making the bill better." He questioned whether "Senate leadership" was open to making what he calls improvements.
Paul: Just came from WH. @realDonaldTrump is open to making bill better. Is Senate leadership?
After the vote was delayed, three Republican senators β Jerry Moran of Kansas, Rob Portman of Ohio and Shelley Moore Capito of West Virginia β announced opposition to the current bill. Portman and Capito were considered swing votes because their states have expanded Medicaid and are hotbeds in the U.S. opioid crisis.
The GOP could still win skeptical senators over with amendments. House Republicans did the same to gather more votes before the chamber narrowly passed its own Obamacare replacement last month.
The House GOP had to abruptly pull one form of its health-care bill from the floor in March when it became apparent that it would not get enough votes. But the chamber eventually passed the plan with tweaks.
House Speaker Paul Ryan said Tuesday that he has "every expectation" the Senate will pass a health-care bill, adding, "I would not bet against Mitch McConnell."
VIDEO3:3803:38Chuck Schumer: The Republican health-care bill is rotten at the corePower Lunch
After McConnell announced the delay, Senate Minority Leader Chuck Schumer, D-N.Y., said, "The fight is not over" and Democrats do not yet feel "any sense of accomplishment." He argued that the bill is "fundamentally flawed" regardless of the tweaks Republicans make.
Schumer said he would work with Republicans on fixing Obamacare's problems if it does not repeal parts of the law, roll back Medicaid expansion and cut taxes for wealthy Americans. He said he wanted a less secretive process, as well.
Asked earlier whether he expected to work with Democrats, McConnell said, "They're not interested in participating in this."
CBO: 22 million more people to lose insurance by 2026 under Senate health-care bill
VIDEO1:3701:37CBO: 22 million more people to lose insurance by 2026 under Senate health-care billSquawk Box
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3c786fb3548a084d2545d6dea661a5fa | https://www.cnbc.com/2017/06/27/senates-proposed-medicaid-cuts-may-imperil-plans-for-special-needs-kids.html?__source=newsletter%7Cyourmoneyyourvote | GOP's proposed Medicaid cuts would slash aid for special needs kids | GOP's proposed Medicaid cuts would slash aid for special needs kids
VIDEO4:3004:30We should moving in direction of people gaining coverage: Andy SlavittClosing Bell
If you depend on Medicaid to supplement the cost of care for your special needs child, now is the time to reassess your long-term plans.
Some 11.2 million children in the U.S. have special needs β and of these, nearly 5 million rely on coverage from Medicaid and its Children's Health Insurance Program, according to the Kaiser Family Foundation.
Now, funding to those programs is imperiled as the House and Senate debate their health-care bills. The House proposal, the American Health Care Act, would reduce Medicaid spending by $834 billion from 2017 to 2026, according to the Congressional Budget Office.
Meanwhile, under the Senate bill, known as the Better Care Reconciliation Act, federal spending on Medicaid would decrease by $772 billion from 2017 to 2026, according to the Congressional Budget Office. The bill phases out Obamacare's Medicaid expansion program.
Warren Photography | Getty Images
Medicaid isn't limited to doctor's visits and lab work. These benefits also include physical, occupational and speech therapy, nurses for people with chronic conditions, home- and community-based services.
"More than likely, parents of children with special needs may come to the conclusion that they can't rely on benefits, and they will have to be proactive," said Russell J. Fishkind, an estate planning attorney and partner at Saul Ewing in Princeton, New Jersey.
If you have a special needs child, now might be the time to reassess your long-term plan and secure additional funding in the event the Medicaid income you needed is no longer there.
Medicaid and Supplemental Security Income are instrumental in special needs planning, but beneficiaries face "means testing" in order to qualify for these benefits.
Individuals with more than $2,000 in assets and couples with more than $3,000 won't qualify for the SSI program.
This year, the monthly maximum for SSI benefits is $735 for an eligible individual and $1,103 for a couple. In most states, a child eligible for SSI can also obtain Medicaid to cover medical services and special health care needs.
To maximize available resources, family members can set up a third-party special needs trust and fund it with assets that aren't owned by the child, including life insurance and other property.
This way, the child is still eligible for SSI and Medicaid benefits. Upon his or her death, assets remaining in a third-party special needs trust can go to other family members or to charity.
A benefit of the third-party special needs trust β which is also known as a supplemental needs trust β is that assets that remain after the demise of the disabled individual do not have to be paid back to Medicaid.
This is because the assets never belonged to the beneficiary in the first place.
On the other hand, in a self-settled special needs trust β which holds assets that belong to the beneficiary β Medicaid will need to be reimbursed after the disabled person's death.
VIDEO3:4403:44Imagine paying a college tuition for the rest of your childβs lifeβ¦hereβs how one family managedMy Success Story
A good example would be how the Fernandez family of Newton, Massachusetts, used life insurance and a special needs trust to cover the $3 million lifetime cost of care for their 23-year-old son, Alex, who has autism. (See video above.)
Estate attorneys are encouraging clients to review their special needs trusts and ensure they allot more money toward the care of their disabled children.
This can help make up for any shortfalls in the event federal funding is slashed.
More than likely, parents of children with special needs may come to the conclusion that they can't rely on benefits, and they will have to be proactive.Russell J. Fishkindestate planning attorney and partner at Saul Ewing
"Look at your life insurance and think about allocating larger portions of your estate to the child with the disability," said Michael Gilfix, an estate planning attorney at Gilfix & La Poll Associates in Palo Alto, California.
To maximize your child's protection, consider increasing the death benefit of the life insurance policy that's held within your special needs trust. This can help contribute to any funding that might be lost during Medicaid cuts.
Now is a good time to build or revisit your life care plan, a document that details your child's medical needs, social circles, successor trustees and income needs.
If you're new to special needs planning, here's where to begin, according to Fishkind.
Establish your team: Paying for care with a variety of assets can get complicated quickly, so you may want to coordinate with a team of experts, including an estate planning attorney, an accountant and a life insurance professional.Create a life care plan: To provide your loved one with the best care, draft a document that will list his or her medical needs, social circles, dietary needs and the successor trustees involved. Detail the financial resources available, too."Many individual trustees are concerned about assuming responsibilities for a loved one," said Fishkind. "If you show them the resources are there and give them directions to dispense their fiduciary duty, it's not as daunting."Review your beneficiary designations: The biggest mistake you can make is to name your special needs child as the beneficiary of a qualified plan or life insurance policy, as this will hurt his or her ability to get government aid.
"We've seen a tremendous shift from the Obama administration to the Trump administration in goals and objectives for providing health-care plans," Fishkind said.
"You need to take matters into your own hands," he said.
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e30c57af33f9ff541972648cdeff14e0 | https://www.cnbc.com/2017/06/28/a-secret-to-netflixs-success-social-media.html | A secret to Netflix's success: Social media | A secret to Netflix's success: Social media
Reed Hastings, CEO, NetflixGetty Images
There's a secret to Netflix's success: social media.
The subscription-based video on demand site is more conducive to producing "viral" original content, which could give it a sustainable advantage over traditional networks and other on-demand providers such as Hulu and Amazon Prime Video, said Jefferies analyst John Janedis.
New Netflix original shows generated an average of 30 percent more mentions on Twitter when compared with new shows on network or cable television, he said, recommending investors hold Netflix shares, setting the 12-month price target at $141, a 6.6 percent downside from Tuesday's close price of $153.08.
"Management has tied the outperformance of original programming to periods of higher [subscriber] growth, which continues to be the biggest driver for the stock on a quarterly basis," Janedis wrote in a note on Wednesday. "If NFLX's platform is more conducive to producing 'viral' content, this could be a sustainable advantage over traditional media platforms as well as other digital platforms with less scale."
Twitter activity can gauge the future success or cancellation of original programming, Janedis said. Following the second season launches of "The Get Down" and "Sense 8," two Netflix original series, marked declines in social media activity preceded each show's cancellation.
Netflix releases entire seasons at once, unlike traditional television networks and cable, allowing viewers to binge watch content and help it "go viral" through social media messaging.
Recent hit series "13 Reasons Why" and "Narcos" "resulted in a surge of social media activity that was sustained for several weeks after the shows premiered," wrote Janedis. "Alternatively, 'Westworld' (HBO) and 'Empire' (FOX), two of the most popular shows on TV, generated Twitter mentions that were more evenly spread throughout a season, tied to the live airing of each episode."
Also unlike traditional networks, Netflix is not evaluated on viewership ratings around the launch of content, which may allow new shows a chance to accrue a larger audience. Thus, after a new show premieres, an uptick in social media mentions can "elevate consumers' perception of the content, and can ultimately drive new subscribers to the platform at a lower cost relative to traditional TV network," noted Janedis.
Janedis remains cautious though, as Netflix remains caught in the midst of growing competition for subscribers as Hulu and Amazon continue to invest in their own entertainment platforms.
In a long-awaited announcement, Apple announced earlier this month that Amazon is coming to Apple's TV app and all Apple TVs with Amazon Prime video.
"Our longer term view is unchanged," concluded Janedis. "We continue to believe that emerging competition, elevated programming costs, and cash burn trends are risks that are not fully appreciated in NFLX's valuation."
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409c51f0f906def503dc248bba429818 | https://www.cnbc.com/2017/06/28/blue-apron-lowers-its-ipo-range.html | Blue Apron slashes its IPO range | Blue Apron slashes its IPO range
VIDEO3:4003:40Blue Apron lowers IPO target rangeSquawk Box
Blue Apron, which delivers ingredients for meals people can cook at home, on Wednesday slashed the range of its initial public offering.
The company now estimates it will price its IPO at $10 to $11 a share, down from the $15 to $17 a share it initially expected.
The new pricing range implies a valuation of up to $2.08 billion, compared with $3.2 billion earlier.
Last week, the company submitted a filing that kicked off the process to go public on the New York Stock Exchange under the symbol "APRN." Blue Apron had said it hoped to raise $100 million with its IPO.
The company is now in the final stages of preparing to go public in an already competitive meal-kit landscape.
Amazon, which is preparing to buy Whole Foods in a $13.7 billion deal, has tested food delivery, through its AmazonFresh offering, and meal kits, which deliver ingredients and recipes to Prime subscribers.
New York-based Blue Apron, though, still holds the title of being the largest U.S. meal-kit delivery service.
A Blue Apron Holdings Inc. meal-kit delivery package sits outside a home.Dan Acker | Bloomberg | Getty Images
Blue Apron said Wednesday it now estimates the net proceeds from the sale of class A common stock in its IPO will be about $292.7 million. The company intends to use the net proceeds from the IPO for working capital, capital expenditures and general corporate purposes.
Despite the high valuation Wall Street is looking for, Blue Apron has never turned a profit. Though it doubled its revenue to $795.4 million last year, the company still posted a net loss of $54.9 million as it poured money into logistics and marketing. In fact, the company has posted steeper net losses each year since 2014, according to regulatory filings.
Blue Apron was founded in 2012 by Matthew B. Salzberg, Matt Wadiak, and Ilia Papas with an objective to deliver ingredients and recipes that would allow customers to prepare meals at home.
Other players in the meal-kit space include HelloFresh and Chefs Plate. One threat for these companies, including Blue Apron, is that more than half of meal-kit subscribers cancel their subscriptions within the first six months, according to data from Cardlytics.
A delivery service, such as Blue Apron, tends to give big discounts or freebies to lure subscribers, and if that upfront cost doesn't pay off in converting trial runs into real subscribers, the added overhead could hit a company's bottom line.
Meanwhile, Blue Apron is insisting its market opportunity is broad, as more customers choose to buy its meals instead of shopping at grocery stores, ordering takeout or eating at restaurants.
Blue Apron's offering is expected to be priced Wednesday, and the stock is scheduled to debut Thursday on the NYSE.
Bessemer Venture Partners, Stripes Group and Fidelity are among Blue Apron's investors. Goldman Sachs, Morgan Stanley, Citigroup and Barclays are among the underwriters to its IPO.
βCNBC's Nick Wells and Reuters contributed to this report.
Read more: Amazon just dealt a blow to Blue Apron's IPO plans
VIDEO1:3001:30Why everyone's into meal kits like Blue Apron, until they're notThe Big Crunch
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bc4835e501bec61e45de4bce55788e30 | https://www.cnbc.com/2017/06/28/jpmorgan-commits-to-largest-buyback-since-crisis.html | JPMORGAN UNLEASHED: Bank commits to largest buyback since crisis | JPMORGAN UNLEASHED: Bank commits to largest buyback since crisis
A pedestrian walks past the JPMorgan Chase headquarters building in New York.Scott Mlyn | CNBC
JPMorgan Chase announced Wednesday its biggest share buyback since the 2008 financial crisis.
The financial giant said it has authorized share buybacks of up to $19.4 billion between July 1 and June 30 next year. That's more than the other banks announcing buybacks on Wednesday.
The $19.4 billion buyback plan surpasses a $12.81 billion repurchase program announced in 2012, according to Richard Peterson, principal analyst at S&P Global Market Intelligence. Since the subprime mortgage crisis, big banks like JPMorgan have had to seek formal approval from the Federal Reserve for buybacks and dividend payouts.
Shares climbed more than 2 percent in extended trade. The stock is the eighth-largest in the S&P 500 by market capitalization and a member of the Dow Jones industrial average.
VIDEO1:1901:19Fed clears capital plans for all 34 banksClosing Bell
JPMorgan also said it would raise its quarterly dividend by 6 cents to 56 cents a share, effective the third quarter of 2017.
"Given the financial strength of the company and the significant capital and liquidity advancements we have made over the last several years, we are pleased to further increase capital returns to our shareholders while continuing to invest in our businesses for long-term profitability," Jamie Dimon, Chairman and CEO of JPMorgan Chase said in a release.
Citigroup also announced a $15.6 billion buyback, its biggest ever, according to S&P Global Market Intelligence.
The capital return plan announcements followed the Federal Reserve's approval of shareholder payout plans from 34 major banks. All firms reviewed passed the second part of the Fed's annual stress test since it was implemented after the financial crisis.
"The positive implication is the Fed's looking at capital growth, not just earnings," said Jeffery Harte, principal at Sandler O'Neill. He said Wednesday's announcements would likely lead to more share buybacks.
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498eb3af7556d17f9237368d0edaab4b | https://www.cnbc.com/2017/06/28/researchers-have-developed-a-paint-which-can-absorb-solar-energy-and-produce-hydrogen.html | Researchers have developed a paint which can absorb sunlight and produce hydrogen | Researchers have developed a paint which can absorb sunlight and produce hydrogen
Peter T. Clarke | RMIT
As technology and innovation open up new ways of generating energy, some advances seem to come straight out of the science fiction playbook.
Now, researchers in Melbourne, Australia have developed a "solar paint" which is capable of absorbing water vapor and then splitting it to produce hydrogen, a clean source of energy.
In a news release earlier this month, RMIT University said the paint contained a newly developed compound which behaved like silica gel. The university added that unlike silica gel, the new material acted as a semi-conductor and was able to catalyze "the splitting of water atoms into hydrogen and oxygen."
Torben Daeneke was the lead researcher on the project. In a statement on the RMIT website, he explained how the compound, when mixed with titanium oxide particles, lead to a "sunlight absorbing paint" able to generate hydrogen fuel from solar energy and moist air.
"The developed paint offers two properties at the same time," Daeneke explained to CNBC via email. "It is strongly water absorbing, so it can take water vapor out of air⦠(and) it absorbs solar energy and uses that energy to split the water into hydrogen and oxygen gases. Hydrogen is a clean and green fuel."
According to the U.S. Office of Energy Efficiency and Renewable Energy, hydrogen can be used in fuel cells to produce power, with water and heat the only by-products.
Daeneke went on to explain that the real world applications of the work being done by himself and his colleagues were diverse.
"We are currently optimizing the system to maximize the hydrogen production rate and to facilitate the collection of the produced fuel," he said. "Ultimately we envisage using the solar paint as a cheap alternative to traditional photovoltaics." Photovoltaics, also known as solar PV, refers to a way of directly converting sunlight into electricity.
"The solar paint might be particularly suitable to cover wall surfaces that do not receive enough light to make solar cells economically viable, while receiving enough light to produce hydrogen with this low cost alternative," Daeneke said.
Daeneke's colleague, Kourosh Kalantar-zadeh, told CNBC that the environmental benefits of the paint were another positive. "The paint will help to reduce our reliance on fossil fuels," Kalantar-zadeh, a distinguished professor at RMIT's School of Engineering, said.
"Today about 95% of all hydrogen is produced from fossil fuels, which contribute to greenhouse gas emissions," he added. "Hydrogen as an energy carrier will also reduce the reliance on lithium ion batteries. The mining of lithium salts creates significant damage to the environment."
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caf540c632ede9d65a51caf69dde4a61 | https://www.cnbc.com/2017/06/28/that-shiny-new-car-is-out-of-reach-for-many-americans.html | That shiny new car is out of reach for many Americans | That shiny new car is out of reach for many Americans
VIDEO0:4300:43That shiny new car is out of reach for many AmericansNews Videos
As wages stagnate and the cost of living continues to rise, paying for a new car is a challenge for consumers, according to a new study.
The report by Bankrate.com shows that in all but one of the 25 largest U.S. metro areas, households with median incomes cannot afford the average price of a new car. In six of the surveyed areas, they can afford less than half the amount.
"The [average] household can't comfortably afford to buy a new vehicle," said Claes Bell, a Bankrate.com analyst. "That means a lot of households are overextending themselves on car costs, and that can potentially crowd out other priorities such as saving for retirement."
As a way to measure affordability, the study applied the so-called 20/4/10 rule: a 20 percent down payment, a four-year loan, and payments and insurance comprising 10 percent of a household's gross (pre-tax) income.
With the average new-car price at more than $33,000 in May, according to the latest data from Kelley Blue Book, only the Washington, D.C., metro area's nearly $100,000 median income could qualify.
In the worst market for affordability β Miami/Fort Lauderdale/West Palm Beach β a median-income household (around $51,000) could afford a $13,577 car, while the average new car there would cost more than double that ($35,368 including local sales tax), according to Bankrate data.
A lot of households are overextending themselves on car costs.Claes BellBankrate analyst
"This issue of affordability isn't just about the price of cars. It's about the stagnation of wages," Bell said. "Car costs are not rising all that quickly over time, but things like health care and college costs are going up and wages aren't [keeping up]. Budgets are being stretched."
Auto loan delinquencies β when payments are 30 or more days overdue β rose more than other types of household debt in last year's fourth quarter, according to the American Bankers Association. Separately, data from the Federal Reserve Bank of New York shows that 90-day delinquencies stood at 3.8 percent of all loans as of March 31.
"People fall in love with cars they can't afford, and that's how they get in trouble," said John Gajkowski, a certified financial planner and co-founder of Money Managers Financial Group.
Lured by low interest rates and dealer incentives, consumers now carry close to $1.2 trillion in auto debt including both loans and leases. While high, it's only about 10 percent of the $12.73 trillion that households carry in total debt, according to the Federal Reserve.
Part of what causes people to overextend themselves when it comes to car buying, Bell said, is lack of planning.
"People should prepare for a car purchase by saving for a down payment," Bell said. "Sometimes people impulsively go to a car lot and get sold on buying a new car. But if they don't have a sufficient down payment saved, it will be hard to fit the payment into their budget."
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f98ec8198e6f8ab502ab48729b1eee61 | https://www.cnbc.com/2017/06/29/pwc-probed-by-accounting-watchdog-over-scandal-at-bts-italian-division.html | PwC probed by accounting watchdog over scandal at BTβs Italian division | PwC probed by accounting watchdog over scandal at BTβs Italian division
PWC signage on building in New YorkScott Mlyn | CNBC
Global audit giant PwC is being investigated by U.K. regulators over a scandal involving broadcaster BT's Italian division, which has been blighted by claims of "inappropriate management behavior" and "historic accounting errors."
The Financial Reporting Council (FRC) announced on Thursday that it would be investigating the audits by PricewaterhouseCoopers LLP (PwC) of BT's financial statements from 2015 to 2017. It added that the investigation related to the scandal of the telecommunication giant's Italian division, called BT Italia.
A PwC spokesman told CNBC in an email: "We will continue to co-operate fully with the FRC in its enquiries. The regulator has a duty to investigate where they believe there is a public interest, in order to give confidence to the financial markets."
Jason Alden | Bloomberg | Getty Images
"Audit quality is of paramount importance to the firm. The FRC's annual reviews of our audit work, policies and procedures show a continued trend of improvement in our work and we use the FRC's insights, together with our own reviews, to continuously improve how we deliver high quality audits," the spokesperson added.
The spokesman said that the FRC investigation did not mean there was an assumption of blame.
Some experts have compared the FRC's handling of the BT audit to investigations conducted by the U.K.'s Serious Fraud Office, a non-ministerial government department which investigates serious fraud cases in England and Wales.
Ben Rose, regulatory law expert at Hickman & Rose, said: "Since gaining its new powers the FRC has been compared by some to the SFO (Serious Fraud Office). Its investigation of KPMG over Rolls Royce announced earlier in the year, and now PwC in connection with BT, demonstrate its willingness to tackle the big four accountancy firms."
"This should act as a wakeup call to auditors and accountants alike," he added. "The FRC is stepping up as a major league investigator."
VIDEO2:1902:19Extremely angry about Italy fraud scandal: BT CEOStreet Signs Europe
The FRC is partially funded by the U.K. government, and has the power to issue fines or bans to companies it deems to be found in serious breach of its rules. The investigation follows a scandal which saw BT's shares tank to their worst ever daily fall on Tuesday January 24 β a three-and-a-half year low, according to Reuters.
In March, BT's CEO told CNBC he was "extremely angry" about the BT Italia fraud debacle. "That type of fraud has no role to play in our business at all," he said.
"I'm extremely angry about it, very disappointed that a few individuals have tarnished the name of the company overall, and I'm determined to ensure that that sort of behavior does not exist anywhere in BT."
BT replaced PwC as its auditor in June, with the U.K. accounting firm KPMG.
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df8a4c5f6d24ef7bd3b0eb74ab70ae1a | https://www.cnbc.com/2017/06/29/rolls-royce-secures-7000-jobs-as-firm-looks-to-double-airplane-engine-production.html | Rolls-Royce secures 7,000 jobs as firm looks to double airplane engine production | Rolls-Royce secures 7,000 jobs as firm looks to double airplane engine production
Chris Ratcliffe | Bloomberg | Getty Images
The aerospace engine maker, Rolls-Royce, said Thursday it has saved 7,000 jobs following a decision to upgrade testing facilities at its plant in Derby.
The U.K. firm is to spend Β£150 million ($192.8 million) on new and existing facilities as it looks to double its engine production and delivery.
"We are doubling the production of new engines at the same time as introducing three new engines to the market.
"With this investment, we are creating the capacity and flexibility to deliver on our goals, while committing to sustain employment in the U.K. and I would like to thank the unions for their support in delivering this important package of investment," said Eric Schulz, Rolls-Royce President of Civil Aerospace in a statement.
Rolls-Royce said the investment in Derby would help to sustain more than 7,000 company jobs in the region.
Unite Union negotiator Simon Hemmings described it as a good news story for both staff and Rolls-Royce.
"The agreement we've reached shows how companies and trade unions can work together differently to deliver the investment and productivity improvements needed to secure the success of a business for the next generation," said Hemmings.
Bloomberg | Bloomberg | Getty Images
The new test facility will be used on the Trent XWB, which powers the Airbus A350 XWB, and is the world's fastest selling civil large engine, with more than 1,600 currently on the manufacturer's order books.
Other engines under construction include the Trent XWB-97, which will power the Airbus A350-1000; the Trent 1000 TEN, which will be fixed to all variants of the Boeing 787 Dreamliner family; and the Trent 7000 which will power the Airbus A330neo.
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ff032d1d53414b52764505a328ac3356 | https://www.cnbc.com/2017/06/29/walgreens-scraps-rite-aid-deal-to-buy-some-stores-instead.html | Walgreens scraps Rite Aid deal, to buy some stores instead | Walgreens scraps Rite Aid deal, to buy some stores instead
VIDEO0:4200:42Walgreens scraps Rite Aid deal, to buy some stores insteadNews Videos
Drugstore chain Walgreens Boots Alliance on Thursday called off its deal to buy Rite Aid after struggling to win antitrust approval.
Instead, Walgreens will acquire nearly half of the smaller rival's U.S. stores for $5.18 billion in cash, something Walgreens CEO Stefano Pessina told analysts and investors is "more attractive than the transaction it replaces." Notably, Walgreens won't assume any debt from Rite Aid in this deal.
Walgreens has also terminated a related deal to sell 865 Rite Aid stores to Fred's, which sent Fred's shares plunging 27 percent in premarket trading Thursday.
Rite Aid's shares tumbled 17 percent, to $3.24, while Walgreens' shares were up about 4.4 percent, at $80.51, after the announcement.
"We believe this new transaction addresses competitive concerns previously raised with respect to the prior transaction," Pessina said in a statement Thursday. "It will allow us to expand and optimize our retail pharmacy network in key markets in the U.S."Fred's CEO Michael Bloom said in a statement Thursday that "this is a disappointing outcome." Though, he added that the termination of the transaction between Walgreens and Rite Aid has no impact on Fred's "transformation strategy" or "ability to execute." Walgreens had initially offered to buy Rite Aid for $9.5 billion in late 2015, but the chain struggled to gain approval as federal regulators worried that a merger between the two would lead to a monopoly of sorts.
VIDEO1:3701:37Walgreens and Rite Aid replace merger agreement with new pactSquawk Box
"[In today's deal] Walgreens likely focused on the stores that wouldn't be in dispute," Raymond James analyst John Ransom told CNBC's "Squawk Box" on Thursday. "For Rite Aid, this is a thermonuclear war."
Ransom said that retail pharmacy companies make up one of the most difficult sectors to cover as an analyst today because of the evolving landscape, and Rite Aid is in a position now where it needs to "retrench" and figure out how to grow its business, he added.
"I think the drug stores are going to be dragged kicking and screaming into doing some sort of home delivery," the analyst told CNBC. "Teaming up with an Uber" could be one way to go, Ransom said.
Even Walgreens CEO Pessina said Thursday that it continues to be a "challenging market for pharmacy," with those challenges continuing and possibly intensifying in the months and years to come.
Other analysts are predicting Amazon β which just announced its plans to acquire grocery chain Whole Foods β will make moves into pharmacy operations in the future.
But retail analyst Ransom said he isn't sold on that idea, yet. "I think the Amazon threat is overstated because it's hard to get into the drug business."
Walgreens said it expects the initial closing of the deal to happen within six months, and then it will begin buying the 2,186 Rite Aid stores and convert them to Walgreens. The larger drugstore chain will also pay Rite Aid a $325 million termination fee.
Rite Aid, which had nearly 4,600 stores in the U.S. as of May, said the stores included in the Walgreens deal are primarily located in the Northeast, mid-Atlantic and Southeast.
The deal also includes three Rite Aid distribution centers located in Connecticut, Philadelphia and South Carolina.
Rite Aid added that it will provide certain transition services to Walgreens for up to three years after the deal closes.
"While we believe that pursuing the merger with [Walgreens] was the right thing to do for our investors and customers, this new agreement provides a clear path forward and positions Rite Aid as a strong, independent, multi-regional drugstore chain and pharmacy benefits manager with a compelling footprint in key markets," Rite Aid CEO John Standley said in a statement.
"The transaction offers clear solutions to assist us in addressing our pharmacy margin challenges and allows us to significantly reduce debt, resulting in a strong balance sheet and improved financial flexibility moving forward," Standley added.
For Walgreens, the new deal is expected to modestly add to adjusted earnings per share in the first full year after its close and generate savings of more than $400 million.
Rite Aid said it expects to use a majority of the net proceeds from the transaction to repay existing debt.
After the completion of the transaction, Rite Aid will continue to operate EnvisionRx, its pharmacy benefit manager, RediClinic and Health Dialog subsidiaries in key communities, the chain said.
Now the question is how Rite Aid will survive as a smaller entity, GlobalData Retail managing director Neil Saunders said in an email. After the deal, Rite Aid will be struggling with "economies of scale, especially for a company that is already struggling to turn a profit even before interest payments are taken into account," he added.
"For Walgreens, the deal allows it to boost both the top and bottom lines at a time when growth is harder to come by. ... The costs of converting stores to the Walgreens format should, by and large, be neutral thanks to the improved margins Walgreens brings."
β Reuters contributed to this report.
VIDEO3:4103:41FTC's been torturing Walgreens, Rite Aid deal for two years: John Ransom of Raymond JamesSquawk Box
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38dc732475c71acf01c012eaf5bab0b2 | https://www.cnbc.com/2017/06/30/3-d-printed-parts-are-making-their-way-into-your-aircraft-cabin.html | 3-D printed parts are making their way into your aircraft cabin | 3-D printed parts are making their way into your aircraft cabin
An Airbus A350 being assembled in Toulouse.Harriet Baskas
More and more parts of an aircraft cabin will soon be 3-D printed, according to one firm working with airlines and plane makers.
Stratasys is a 3-D printing manufacturer that, among other industries, prints tools and parts for cars, planes and medical products.
In 2014, the U.S.-Israeli firm said that its production system had been used to make "more than 1,000 flight parts" for the Airbus A350 XWB aircraft.
Speaking at the Paris Air Show, the President of EMEA at Stratasys, Andy Middleton, said more visible elements of a cabin interior will now be made from the heat gun of a printer.
"Passengers don't realize that some of the air ducting is already 3-D printed. They also don't see the hidden cable harnesses which are 3-D printed. But very soon the surround of their entertainment system will be 3-D printed," Middleton said.
"And in the near future, parts of their seat will be 3-D printed. The arm-rest, and the table on which we have our delicious lunch are both predestined to be printed."
Boeing, Airbus, Singapore Airlines and Etihad are all customers of Stratasys and Middleton, said the firms were enjoying two areas of advantage.
"On final parts, it is primarily weight saving that is a benefit and because a 3D part has no geometric restrictions, you will also have smarter components.
"But in tooling especially, we can make massive time savings. Additive printing a composite tool instead of using a conventional metal can shorten lead times by months," he said.
A Boeing 787 Dreamliner in flight.Boeing Company | Paul Weatherman
Structural parts
In April, the first 3-D printed components to be used for the structure of a commercial plane received a green light thanks to a partnership between U.S. aerospace giant Boeing and Norwegian firm, Norsk Titanium.
Norsk has now received a production order from Boeing for 3-D printed structural titanium components to be used on the new Dreamliner 787.
The Dreamliner will be the first plane to fly with 'Additive-Manufactured' 3-D parts that make up part of the plane's load-bearing structure.
On the release, Boeing said the new process should save on the cost of production.
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453c69dedbbec16e18e87d7bc2088383 | https://www.cnbc.com/2017/06/30/china-builds-military-facilities-south-china-sea-islands.html | China builds new military facilities on South China Sea islands: think tank | China builds new military facilities on South China Sea islands: think tank
DigitalGlobe imagery of the Fiery Cross Reef located in the South China Sea. Fiery Cross is located in the western part of the Spratly Islands group.DigitalGlobe | Getty Images
China has built new military facilities on islands in the South China Sea, a U.S. think tank reported on Thursday, a move that could raise tensions with Washington, which has accused Beijing of militarizing the vital waterway.
The Asia Maritime Transparency Initiative (AMTI), part of Washington's Center for Strategic and International Studies, said new satellite images show missile shelters and radar and communications facilities being built on the Fiery Cross, Mischief and Subi Reefs in the Spratly Islands.
The United States has criticized China's build-up of military facilities on the artificial islands and is concerned they could be used to restrict free movement through the South China Sea, an important trade route.
Last month, a U.S. Navy warship sailed within 12 nautical miles of Mischief Reef in a so-called freedom of navigation operation, the first such challenge to Beijing's claim to most of the waterway since U.S. President Donald Trump took office.
China has denied U.S. charges that it is militarizing the sea, which also is claimed by Brunei, Malaysia, the Philippines, Taiwan and Vietnam.
Chinese soldiers march past Tiananmen SquareKevin Frayer | Getty Images
Trump has sought China's help in reining in North Korea's nuclear and missile programs, and tension between Washington and Beijing over military installations in the South China Sea could complicate those efforts.
China has built four new missile shelters on Fiery Cross Reef to go with the eight already on the artificial island, AMTI said. Mischief and Subi each have eight shelters, the think tank said in a previous report.
In February, Reuters reported that China had nearly finished building structures to house long-range surface-to-air missiles on the three islands.
On Mischief Reef, a very large antennae array is being installed that presumably boosts Beijing's ability to monitor the surroundings, the think tank said, adding that the installation should be of concern to the Philippines due to its proximity to an area claimed by Manila.
A large dome recently was installed on Fiery Cross and another is under construction, indicating a sizeable communications or radar system, AMTI said.
Two more domes are being built at Mischief Reef, it said.
A smaller dome has been installed near the missile shelters on Mischief, "indicating that it could be connected to radars for any missile systems that might be housed there," AMTI said.
"Beijing can now deploy military assets, including combat aircraft and mobile missile launchers, to the Spratly Islands at any time," it said.
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7bc7d68139f11bdb05c5bc3d0728917a | https://www.cnbc.com/2017/06/30/petya-ransomware-attack-nato-says-state-actor-to-blame.html | NATO think-tank says a 'state actor' was behind the massive ransomware attack and could trigger military response | NATO think-tank says a 'state actor' was behind the massive ransomware attack and could trigger military response
A "state actor" was behind the cyberattack that hit over 12,000 devices in around 65 countries on Tuesday hitting major industries from advertising to oil, according to a NATO-affiliated think-tank .
The "Petya" ransomware attack encrypted files on a computer and demanded $300 worth of the cryptocurrency bitcoin in order to unlock them. Kaspersky Lab estimates at least 2,000 targets were affected, mostly in Russia and the Ukraine, but attacks were registered in several other countries, including Germany, the U.K. and China.
Researching the attack, a NATO-affiliated research institution says it was likely launched by a state actor, or by a non-state actor with support and approval from a state, as the operation was very complex and expensive.
"The operation was not too complex, but still complex and expensive enough to have been prepared and executed by unaffiliated hackers for the sake of practice. Cyber criminals are not behind this either, as the method for collecting the ransom was so poorly designed that the ransom would probably not even cover the cost of the operation," NATO's Cooperative Cyber Defense Centre of Excellence (CCDCOE), said in a press release on Friday.
Kacper Pempel | Reuters
The implications of this mean that the cyberattack could be interpreted as an act of war, according to the organization. On Wednesday, NATO secretary general Jens Stoltenberg said a cyber attack could trigger Article 5, the principal of collective defense.
"As important government systems have been targeted, then in case the operation is attributed to a state this could count as a violation of sovereignty. Consequently, this could be an internationally wrongful act, which might give the targeted states several options to respond with countermeasures," TomΓ‘Ε‘ MinΓ‘rik, researcher at NATO's CCDCOE law branch, in the press release.
The investigators added that the cyberattack was a "declaration of power" and a demonstration of the culprit's ability to cause disruption.
More than 30 percent of affected firms were financials, according to analysis by Kaspersky Lab, while at least half of those targeted were industrial organizations, such as utilities, oil and gas, transportation, logistics, manufacturing and other companies.
"The nature of this malware is such that it could easily stop the operation of a production facility for a considerable amount of time", said Kirill Kruglov, security expert at Kaspersky Lab, in a press release published Thursday.
A laptop displays a message after being infected by ransomware as part of a worldwide cyberattack on June 27, 2017.Rob Engelaar | AFP | Getty Images
Initially it seemed the attack was caused by cybercriminals looking to extract ransoms from victims, but NATO's analysis appears to put this theory aside. In terms of the bitcoin ransom demanded, it appears the attackers haven't made much. Only a total of 3.99 bitcoins has been paid in ransom so far, worth a total of $10,284 at today's bitcoin price.
Even if someone paid the ransom, the associated email address has been shut down by the web provider. This means victims cannot get their files back, and any encrypted files are effectively lost.
"The underlying motive appears to be aimed at wreaking the maximum amount of disruption in Ukrainian infrastructure, while merely operating under the guise of ransomware," said Tyler Moffitt, a senior threat research analyst with cybersecurity firm Webroot, in a blog post on Thursday.
"This suspicion is supported by the absence of a payment portal or functional email address to deliver the ransom payment."
A message demanding money is seen on a monitor of a payment terminal at a branch of Ukraine's state-owned bank Oschadbank after Ukrainian institutions were hit by a wave of cyber attacks earlier in the day, in Kiev, Ukraine, June 27, 2017.Valentyn Ogirenko | Reuters
Other experts have echoed this. Cisco's security research organisation Talos said the intent of the actor behind the cyberattack was destructive, not economically motivated, in a blog post updated on Thursday.
Gavin O'Gorman, investigator in Symantec Security Response, shared two theories for the motive behind the attack.
The first is that it was caused by a technologically capable but not otherwise smart criminal, as they only used one bitcoin wallet and gave just one email account to contact, which will make it difficult to receive and make use of any ransom.
The other theory is that it was intended to cause as much disruption as possible.
"Perhaps this attack was never intended to make money, rather to simply disrupt a large number of Ukrainian organizations. Launching an attack that would wipe victim hard drives would achieve the same effect, however, that would be an overtly aggressive action," O'Gorman said in a blog post published Wednesday.
"Effectively wiping hard drives through the pretense of ransomware confuses the issue, leaving victims and investigators to ask: 'Are the attackers politically motivated, or criminally motivated?'"
O'Gorman added that he believed the attacks were politically motivated.
Correction: this article was updated to clarify Gavin O'Gorman's statement and the nature of NATO CCDCOE .
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622f696ca5b074052f278573e7deb650 | https://www.cnbc.com/2017/06/30/your-credit-score-may-jump-starting-this-month.html | Your credit score may jump starting this month | Your credit score may jump starting this month
VIDEO0:0000:00Changing credit scoresOn the Money
Some consumers may suddenly have a higher credit score.
That's because improved standards for utilizing new and existing public records were implemented on Saturday for the three major credit reporting companies. As part of this change, a majority of civil debts and tax liens are excluded, which means some credit scores will edge higher.
The new criteria come on the heels of a report by the Consumer Financial Protection Bureau that found problems with credit reporting companies and recommended changes to help consumers.
Altogether, about 7 percent of the population will have a judgment or lien removed from their credit file, according to a report by Fair Isaac. The company calculates and sells FICO scores, one of the most commonly used scores by lenders.
Once that information is stripped out, their numbers could rise by up to 20 points, Fair Isaac said.
On the other hand, "analyses conducted by the credit reporting agencies and credit score developers FICO and VantageScore show only modest credit scoring impacts," the Consumer Data Industry Association said in a statement. The association represents Equifax, Experian and TransUnion.
Credit reporting and scores play a key role in most Americans' daily life. The process can determine the interest rate a consumer is going to pay for credit cards, car loans and mortgages β or whether they will get a loan at all.
In the near term, "it will lower the cost of borrowing," said Andrei Andreev, an adjunct professor of finance at San Diego State University.
For consumers who are not directly affected, there could be consequences as well. With more borrowers now qualifying for better terms, banks may eventually have to "increase interest rates to compensate for that additional risk," said Thomas Brown, a senior vice president for LexisNexis Risk Solutions. LexisNexis also provides lenders with data to make credit risk decisions on consumer loans.
"What it really means is that there is vital information that is being ignored, and the net result will disadvantage the other 93 percent of consumers," Brown said.
"It will take us a little while to know exactly what the overall impact is," said Ofer Mendelevitch, vice president of data science at online lender LendUp.
For now, by eliminating those large sources of potential for errors, "we think it will represent credit worthiness better," he said. (Incorrect information on a credit report is the top issue reported by consumers, according to the CFPB.)
"On the Money" airs on CNBC Saturdays at 5:30 a.m. ET, or check listings for air times in local markets.
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5f20e6ab2d0159842a2058f960c6f834 | https://www.cnbc.com/2017/07/01/cyberattacks-rely-on-consumers-and-thats-a-problem-says-anti-fraud-app-ceo.html | Cyberattacks rely on the consumer and thatβs a problem, says anti-fraud fintech firm's CEO | Cyberattacks rely on the consumer and thatβs a problem, says anti-fraud fintech firm's CEO
Getty Images
In March 2016, John Podesta, the former chairman of Democratic candidate Hillary Clinton's presidential campaign, was fooled into entering his password for his private Gmail account. And last week, ransomware cyberattacks again ravaged the globe, locking down files of major corporations and demanding they pay a ransom to unlock them. According to the CEO of an anti-fraud financial technology (fintech) company, this is because cybersecurity places the onus on consumers to protect themselves β and that's a problem.
Rodger Desai, the chief executive officer of New York startup Payfone, said that recent cyberattacks rely on individual consumers to operate. "Security today involves the consumer to secure themselves, and that's the problem," he told CNBC in a phone interview on Friday. "Whenever consumers are involved β and they're always involved β people can socially engineer the consumer."
Desai heads the fintech firm Payfone, which uses automated customer identity authentication technology, to remove the need for using passcodes or security questions.
Tony C French | Getty Images
"There are so many ways in which cyberattacks are getting more sophisticated," he added. "What we realized when we started the company is that these kind of attacks would grow. For example, if I wanted to reset my password with the bank and I'd forgotten it, they're going to send my phone a code. That could be someone else."
Last year, the malicious software "Pegasus" hacked into the phone of a human rights activist in the United Arab Emirates, forcing Apple to issue a critical software update to protect its users.
The startup's technology verifies users' SIM cards so that they are able to speak with customer-service representatives without having to enter passcodes or answer security questions.
Payfone's boss told CNBC that the company's technology could detect inconsistencies, such as unauthorized users attempting to access a mobile app or service. The company believes this will speed up the verification process for legitimate clients and businesses while preventing hackers and insurance fraudsters from accessing users' phones.
VIDEO3:1003:10Petya ransomware attack more complex than Wannacry: Corey ThomasSquawk Box
Desai continued: "I think the key thing is removing the consumer from the security process. Cyberattacks will only escalate because the funding of them has gone from small-time criminals to organized gangs to state sponsorship and until we remove the consumer, they will never end."
"Petya is a different kind of malware from WannaCry," said Jonathan Care, fraud expert and research director at Gartner, in a blog post last week. "Common delivery methods are via phishing emails, or scams, however it seems increasingly likely that Petya uses an infected application update from a breached software vendor as its initial infection vector."
In early June, Desai's company was announced as the authentication provider for the peer-to-peer mobile payments network Zelle, which is backed by several big banks including Bank of America, Citibank, JPMorgan Chase and Wells Fargo.
Payfone globally debuted its authentication technology at the Mobile World Congress, Shanghai, a conference which showcases new mobile technologies and products.
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c653d5e0054c6cc36f2754f8d3d44c45 | https://www.cnbc.com/2017/07/03/nasdaq-data-glitch-google-yahoo-display-incorrect-stock-market-prices.html | Data glitch: Google, Yahoo finance sites display incorrect stock market prices | Data glitch: Google, Yahoo finance sites display incorrect stock market prices
Chris Hondros | Getty Images
A wave of erroneous market data appeared on several finance sites in early Asia hours on Tuesday, with Nasdaq-listed stocks such as Apple, Google, Amazon and Microsoft all showing prices of $123.47 each.
The incorrect data was discovered on Google Finance and Yahoo Finance. Bloomberg terminals were also showing incorrect data, according to a Dow Jones report.
A Nasdaq spokesman told CNBC that the glitch came about after some test results were wrongly distributed by the third party finance sites.
Data glitch: Nasdaq-listed stocks Apple, Google, Amazon and Microsoft were showing prices of $123.47 per pieceCNBC
"As part of its normal process, the UTP distributed test data and certain third parties improperly propagated the data. Nasdaq is working with third party vendors to resolve the matter," the spokesman said.
A Google spokesperson confirmed to CNBC that its third-party finance data provider was providing inaccurate information received from Nasdaq.
"This is currently being fixed and we hope to update our stock price data shortly," she said.
Bloomberg and Yahoo did not immediately respond to CNBC's request for comment.
Correction: This article has been corrected to reflect that Nasdaq indicated the incorrect data was distributed by third parties.
βCNBC's Steve Kopack contributed to the report.
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6c459fa9e03194b359bd54b5e13bb81c | https://www.cnbc.com/2017/07/03/police-arrest-man-they-say-planned-to-kill-french-president-emmanuel-macron-at-bastille-day-parade.html | Police arrest man they say planned to kill French President Emmanuel Macron at Bastille Day parade | Police arrest man they say planned to kill French President Emmanuel Macron at Bastille Day parade
French President Emmanuel Macron walks through the Galerie des Bustes (Busts Gallery) to access the Versailles Palace's hemicycle for a special congress gathering both houses of parliament (National Assembly and Senate), near Paris, France, July 3, 2017.Etienne Laurent | Reuters
A 23-year-old was arrested and charged with plotting to kill French President Emmanuel Macron at a Bastille Day parade this month, the BBC reports.
The man is believed to be a far-right extremist who told police he also wanted to attack "Muslims, Jews, blacks, homosexuals," Agence France-Presse reports. Police arrested him in a Paris suburb last Wednesday after users of a video game chat room notified police when the man allegedly said he wanted to buy a gun, the BBC said.
Police found three kitchen knives in the man's car and possible targets he searched on the internet, according to the BBC.
This is not the first time the suspect has faced legal trouble connected with terrorism. He was convicted last year for condoning terrorism after he praised Anders Breivik, who murdered 77 people in Norway in 2011. He was supposed to spend three years in jail, but half the sentence was suspended, the BBC reports.
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0ff3836fbe39803f4ae206c0d88913eb | https://www.cnbc.com/2017/07/03/states-yank-electric-car-aid-add-new-fees-to-pay-for-infrastructure.html?source=Snapzu | States yanking electric-car incentives and slapping on new fees to pay for infrastructure | States yanking electric-car incentives and slapping on new fees to pay for infrastructure
VIDEO0:5400:54States yanking electric-car incentives and slapping on new fees to pay for infrastructureNews Videos
For drivers of electric cars, going green is starting to take more green.
A growing number of states are imposing new fees on electric vehicles as officials scrounge for ways to pay for infrastructure projects they say are long overdue. At least five states, including California, passed bills targeting the cars this year, bringing the total number with fees on the books to 13. The charges generally range from $100 to $200 a year.
"Safe and smooth roads make California a better place to live and strengthen our economy," Gov. Jerry Brown said in a statement when the bill passed this spring. "This legislation will put thousands of people to work."
The passage of the fee in California β home to one of the most prominent names in electric vehicles, Tesla Motors β underscores the shift in sentiment toward the technology. Many states initially encouraged drivers to make the switch to cleaner cars through tax incentives and other measures. But now, cash-strapped and pothole-ridden, states are asking the eco-friendly to pay up.
"We see this as a concerning trend," said Gina Coplon-Newfield, director of the electric vehicles initiative at the Sierra Club. "We certainly want to see funding raised to support roads and bridges and transit. β¦ But penalizing electric vehicle drivers is not the way to solve this problem."
The shift comes just as Tesla gives the green light for its first mass-production car, the Model 3.
VIDEO2:5002:50Elon Musk green-lights Tesla Model 3 production, says deliveries start July 28Squawk Box
Proponents of the fees say the issue is one of fairness. Since 2013, 24 states and the District of Columbia have moved to raise their gas tax, including five states just this year, according to the National Conference of State Legislatures. In California, a 12-cent hike in the gas tax is expected to pay for nearly half of the state's $52.4 billion infrastructure package to repair roads and alleviate congestion.
But since electric cars don't need gas, those drivers don't pay the tax β even though they use the same roads as traditional cars. California's new $100 annual fee on electric vehicles will go into effect in 2020 and is expected to raise $200 million over the next decade.
"This landmark legislation offers counties real hope to catch up on a significant backlog of deferred maintenance," California State Association of Counties President Keith Carson said in a statement. "We're finally going to be able to start fixing potholes, improving pavement and making sure our bridges are structurally sound."
But environmental advocates worry the fees could curtail electric vehicle sales. Edmunds.com estimates the cars account for just 0.6 percent of the auto market. Sales growth has slowed dramatically, from 227 percent in 2013 to just 5 percent last year, according to the data.
In addition to the fees, the Sierra Club counted seven states that have eliminated rebates for purchasing an electric vehicle. Coplon-Newfield said sales plummeted in Georgia after the state enacted new ownership fees and got rid of the incentives.
Also facing extinction: a $7,500 federal tax credit for buying an electric car. The credit expires once manufacturers sell 200,000 vehicles, and major automakers such as Tesla, General Motors and Nissan are on track to hit that limit within the next few years. But advocates are concerned that the credit could wind up on the chopping block even sooner amid sweeping efforts to simplify the tax code.
Genevieve Cullen, president of the Electric Drive Transportation Association, said her organization is willing to help fund infrastructure projects. But she said the current fees are arbitrary. She pointed to the debate in Vermont, where a recent state government report instead recommends postponing electric-car taxes until they make up 15 percent of vehicles on the road. The report projected that would happen in 2025.
"Everyone needs to pay their fair share, but the fact is that we think it's premature to impose fees on a technology that's contributing to so many other national, state and local goals," Cullen said. "As part of a comprehensive fix of infrastructure funding, let's put everything on the table. β¦ But in the meantime, to create impediments to a new technology that has a lot to offer seems not the best solution."
VIDEO1:1301:13Elon Musk's new underground tunnel project will transport cars at 125 mphDigital Original
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04c82c295b30f303e2234d0d416954ad | https://www.cnbc.com/2017/07/03/tesla-q2-deliveries-are-lackluster-but-all-eyes-are-on-the-model-3.html | Tesla deliveries lackluster in second quarter, but all eyes are on Model 3 | Tesla deliveries lackluster in second quarter, but all eyes are on Model 3
Tesla Motors' Model 3 electric cars.Tesla Motors File Photo | Reuters
With most investors focused on the rollout of its highly anticipated Model 3, Tesla announced lackluster second-quarter sales, due in part to supply issues with 100 kWh battery packs.
"The Q2 Deliveries will be viewed as a negative by investors," said James Albertine, analyst with Consumer Edge Research. "But that story ... can be more than offset by the Model 3 in the second half of the year."
Overall, Tesla delivered just over 22,000 vehicles in the second quarter, bringing its first half deliveries to 47,100, within the company's guidance of between 47,000 and 50,000 vehicles. What was the problem?
Tesla said it experienced "a severe production shortfall of 100 kWh battery packs, which are made using new technologies on new production lines." The company said it resolved the problem in early June and dramatically increased battery-pack production.
While some may be concerned with Tesla's delivery issues, the focus for most is the rollout of the Model 3. The very first one that will ultimately be sold is scheduled to be built later this week. It will be delivered with 29 others at the end of July.
Elon Musk tweeted a rough guideline for ramping up the Model 3 assembly line.
"Production grows exponentially, so Aug should be 100 cars and Sept above 1500," Musk tweeted. "Looks like we can reach 20,000 Model 3 cars per month in Dec."
That forecast is consistent with Tesla's prior guidance of building 5,000 of the lower-priced electric cars per week, by the end of the year.
Yes, there will likely be cynics and bears who will see the second-quarter production problems with battery packs as just an excuse. Whatever comments they have probably won't change the likelihood of greater price swings for Tesla shares.
"Over the last few months, as Tesla has moved higher, it may not have been as volatile because a lot of people were waiting for the Model 3," said Albertine. "Now that it's almost here, that could change."
Questions? Comments? .
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861d481e03d5c5da64b61a6c2777ea96 | https://www.cnbc.com/2017/07/04/martin-shkrelis-lawyer-objects-to-gag-order-blames-media-baiting.html | Martin Shkreliβs lawyer objects to gag order, blames media and clientβs βfrail emotional stateβ for courthouse rant | Martin Shkreliβs lawyer objects to gag order, blames media and clientβs βfrail emotional stateβ for courthouse rant
VIDEO3:2903:29Pharma Bro's defense attorney expresses frustration over his talking to pressFast Money
Martin Shkreli's defense attorney objected to a prosecution request that the "pharma bro" be gagged during his ongoing securities fraud trial, and blamed reporters for baiting his emotionally fragile client into publicly blasting prosecutors, witnesses and the press.
Shkreli's "comments are clearly not designed" to affect the "integrity of the judicial process," of the trial in Brooklyn, New York, federal court, wrote his lawyer, Benjamin Brafman, to Judge Kiyo Matsumoto on Monday night.
"Rather his comments are the somewhat natural, though unfortunate, consequence of a young man with a demonstrated history of significant anxiety being at the center of a supremely difficult time in his life," Brafman wrote.
Brafman also said, "In fairness to Mr. Shkreli, the Court should be aware that certain representatives of the press have gone out of their way to try to 'bait' Mr. Shkreli into making public statements that we all have worked very hard to avoid."
In fact, Shkreli last Friday walked, uninvited, into a courtroom that reporters use to monitor a video and audio feed from his trial's courtroom, and began speaking to journalists freely. Shkreli answered questions from the reporters, and also asked them questions during an exchange that featured him making scathing comments about the prosecution, commenting on the evidence against him, and criticizing some of their coverage of the case.
Shkreli only stopped talking when Brafman poked his head into the room and asked him to step outside.
Martin Shkreli, former chief executive officer of Turing Pharmaceuticals and KaloBios Pharmaceuticals Inc, departs with his attorney Benjamin Brafman after a hearing at U.S. Federal Court in Brooklyn, New York, U.S., June 26, 2017.Lucas Jackson | Reuters
Brafman, in his letter Monday, wrote that Shkreli, 34, believes he is "being targeted" by federal prosecutors "not because of his conduct, but because of who he is." He also believes the press is focusing "unfairly on negative aspects of him" in its coverage of the case, the lawyer wrote.
"Having said that, we also note that Mr. Shkreli is under enormous pressure that is compounded by his clearly frail emotional state."
Brafman told the judge that "we have spoken to Mr. Shkreli and we will make every effort to remove this issue from the case."
"We object strongly to the gag order," the lawyer wrote. He added that if the media coverage "remains prejudicial" defense attorneys must be allowed to respond to that coverage, if necessary.
The lawyer's response in a letter to Matsumoto came after prosecutors filed a motion asking to bar Shkreli from making any more public comments about the case, either to the press, on Twitter or other social media, as long as the trial is ongoing.
Prosecutors also want defense lawyers and themselves gagged from making public comments.
Shkreli is charged with securities fraud in connection with his alleged looting millions of dollars from Retrophin, the publicly traded drug company he founded. Prosecutors claim he used the money to repay investors whom he allegedly defrauded at two hedge funds he had run, in addition to paying off personal debts.
In their motion, prosecutors cited Shkreli's surprising, impromptu meeting with reporters covering the case last Friday, among other incidents.
During that meeting, Shkreli called the prosecutors "the "junior varsity," criticized a witness against him, and lambasted headlines about the case.
Those prosecutors said Shkreli's off-the-cuff remarks, made against the desperate wishes of his lawyers, "risks tainting the jury."
Prosecutors, who believe that Shkreli has resumed posting on Twitter under a pseudonym despite being banned from the social media platform earlier this year for harassing a female reporter, also want him barred by the judge from tweeting further about the case.
If they don't get the gag order granted, prosecutors want a semi-sequestration of jurors to protect them from hearing or reading Shkreli's comments during his trial on charges of securities fraud.
VIDEO3:0203:02Pharma executive testifies at Martin Shkreli trialPower Lunch
The prosecutors' filing cites a video featuring a CNBC reporter asking Shkreli's lawyer Brafman how he felt about his client's scathing remarks after court recessed Friday.
Shkreli, who was walking alongside Brafman interjected, "He'll do whatever he wants."
When the reporter asked Shkreli, "You can do whatever you want, Martin?" Shkreli replied, "Yes," according to the prosecutors' motion.
Tweet
Brafman, in own letter Monday, claims the reporter was needling both him and Shkreli.
Also attached to prosecutors' motion were several news articles about Shkreli's comments, as well as suspected tweets under the Twitter handle @BLMBro.
Prosecutors wrote: "The government respectfully moves this Court for an order to limit extrajudicial statements by the defendant Martin Shkreli and counsel for all parties during the pendency of this trial."
Defense attorney Ben Brafman stands at the defense table with Martin Shkreli during his opening statement.Elizabeth Williams | CNBC
"Since the empanelment of the jury, Shkreli has engaged with the press β in apparent contravention of the instructions of his lawyers β in the courthouse itself, directly outside the courthouse and on digital media in a manner that risks tainting the jury," the motion says.
"In order to protect the public's interest in a fair trial in which the jury will reach a verdict based solely on the evidence presented in the courtroom, the defendant should be restrained from further public comment during the pendency of the trial. In addition, or in the alternative, the government seeks semi-sequestration of the jury."
Prosecutors also wrote: "Unfortunately, despite the assurances of defense counsel prior to trialβas well as efforts by defense counsel to control Shkreliβonce the jury was selected and empaneled, Shkreli embarked on a campaign of disruption by commenting on trial evidence and witnesses to the press and on social media, and by making a spectacle of himself and the trial directly on the courthouse grounds."
The prosecutors also noted that during his visit to reporters on Friday, "in addition to his comments on the evidence and witnesses, Shkreli also made inappropriate personal attacks on current and former prosecutors in this case."
Potential jurors don't hold back in the Martin Shkreli trial
VIDEO1:0301:03Potential jurors don't hold back in the Martin Shkreli trialDigital Original
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4111ebf7ec526cb87394cf1186786ce6 | https://www.cnbc.com/2017/07/05/bitcoin-could-nearly-double-and-reach-5000-soon-says-standpoint-research.html | Bitcoin could nearly double and reach $5,000 soon, says Standpoint Research | Bitcoin could nearly double and reach $5,000 soon, says Standpoint Research
VIDEO0:5400:54Bitcoin could nearly double and reach $5,000 soon, says Standpoint ResearchNews Videos
Stock research analyst Ronnie Moas said he bought bitcoin this weekend and thinks it could reach $5,000 within a year.
"$5,000 could happen in a few months. It's only starting to gain traction right now," Moas, founder of Standpoint Research, told CNBC in a phone interview Wednesday. "It's starting to spread like wildfire right now."
He pointed out that since only 21 million bitcoin can ever exist, increasing demand for the digital currency will naturally drive its price up.
briefly tripled in value this year, hitting a record $3,025.47 on June 11, according to CoinDesk. The digital currency traded Wednesday near $2,600, still more than double its Dec. 31 price of $968.
"This is not something I could keep my hands off of," Moas said. "What would be more painful than losing [money in cryptocurrencies] is not acting."
The research analyst said he invested a few hundred U.S. dollars each in bitcoin, ethereum and another digital currency called litecoin through Coinbase.com. After he releases a 40-page report on cryptocurrencies in the next few weeks, Moas said he plans to invest more in them.
The research analyst's view on bitcoin joins the optimistic views of others on Wall Street. On Sunday, Goldman Sachs' technical analyst Sheba Jafari said in a note that bitcoin could rise as high as $3,915.
VIDEO0:4700:47Goldman Sachs says bitcoin could rise another 50%News Videos
"In the next 6 to 12 months you're going to have a little bit of a hysteria," Moas said. However, "this has a long, long way to go before it gets to bubble territory."
Moas' reasoning is so little of global capital is in cryptocurrencies right now that the young digital currencies can absorb more of those funds without becoming overvalued.
McKinsey Global Institute estimated that the value of the world's stocks and debt rose to $212 trillion in 2010.
On the other hand, CoinMarketCap data showed the market capitalization of all cryptocurrencies has grown from below $20 billion at the start of this year to about $100 billion, still less than a tenth of a percent of global capital markets. Bitcoin has a market value of about $42 billion, according to CoinMarketCap.
"There will be scams, there will be accounts wiped out, there will be people that get hurt, like every other technology that is going on," Moas said. But "I think the cryptocurrency is here to stay. I think we're in the second inning of a 9-inning ball game."
Many, including some on Wall Street, believe that the blockchain technology behind bitcoin can fundamentally change the way the world operates, just like the internet did.
VIDEO2:2102:21Here's what sets ethereum apart from its rival bitcoinDigital Original
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7edeb0fbc4418b33272614d7ddc69639 | https://www.cnbc.com/2017/07/05/cramer-why-the-market-seems-unfazed-by-plunges-in-autos-and-retail.html | VIDEO2:3502:35Market seems unfazed by plunges in autos, retailMad Money with Jim Cramer
When Jim Cramer noticed that the market stayed high on Wednesday despite massive declines in two of its most important sectors, he had to investigate.
The "Mad Money" host watched swaths of the auto sector topple after auto parts retailer O'Reilly Automotive reported a stark earnings miss, with declines stretching as far as retailers Home Depot and Lowe's, both of which have auto components to their sales.
"For the longest time, this kind of concentrated selling could bring the entire market down β makes sense given that autos and retail are so heavily linked to the overall economy," Cramer said.
But on Wednesday, dramatic declines in both areas did not seem to drag the market down with them. Why?
"Because there have been some fundamental changes in the U.S. economy that are not being acknowledged by many people on air, on web, whatever, and they're allowing the market to blossom without the traditional spurs of retail sales or autos," the "Mad Money" host said.
Watch the full segment here:
VIDEO12:4812:48Cramer: Why the rest of the market seems unfazed by plunges in autos and retailMad Money with Jim Cramer
More specifically, Cramer named 10 areas contributing to the market's overall strength based on the 52-week high list he follows almost religiously: travel and leisure, health care, capital goods, oil and gas derivatives, the stay-at-home economy, defense, aerospace, housing, e-commerce and the banks.
First, Cramer sees travel and leisure's boom as a direct result of millennials' disinterest in material goods. They are choosing to spend their money on seeing and doing, in part due to the rise of the "selfie generation," and in part because of a genuine desire to see the world, he said.
"Whatever, travel and leisure stocks, everything from hotels and time shares to airlines and cruises, live on the new-high list, and with good reasons: they all seem to have endless runs of better-than-expected earnings β remember, that's what drives stocks β and, crucially, these industries employ a huge number of people," Cramer explained.
Second, health care bills may be burdensome, but Cramer insists that the country's health-care-related woes β including the holdup of the Republican health care bill in the Senate β have been blessings to insurance providers, medical device makers, hospitals, biotechnology companies and pharmaceutical giants.
Third, capital goods companies have been seeing healthy earnings boosts, which Cramer attributed to an improving global economy.
"Many of our capital goods businesses realized years ago that they had to diversify away from the United States and they spread their wings to Europe and Asia and all sorts of emerging markets," he said. "Those moves turned out to be poorly timed, sub-optimal, at least until this year. With the rest of the world now in recovery mode, heavy equipment makers are experiencing what I am regarding as a nirvana moment."
Fourth, while the oil and gas space is struggling, companies that use natural resources to make things like plastic have grown "seemingly unstoppable" as they enjoy cheaper energy sources, Cramer said.
Fifth, the stay-at-home economy may seem like a death sentence for brick-and-mortar retailers, but it is a boon to home entertainment giants like Netflix and video game makers like Activision Blizzard.
"The point is, the money's actually going somewhere, just not where it used to go," the "Mad Money" host said.
Sixth, defense is top of mind for many given North Korea's recent missile test, so giants like Lockheed Martin and General Dynamics are also seeing healthy earnings streams.
Seventh, aerospace orders are up, ushering in a bull market for the sector that only serves to prop up names like Boeing.
"Eighth, we know housing is an industry that punches above its weight. It accounts for only about 10 percent of consumer spending, but the demand for housing is off the charts versus the supply, which explains why the homebuilders endlessly hit the 52-week high list even though the overall housing start numbers aren't that strong and rates are going higher," Cramer said.
Ninth, with Amazon at the center of Wall Street buzz given the announcement of its bid for Whole Foods, e-commerce is shaping up to be the driver for an array of related industries, from logistics to shipping to data centers, the "Mad Money" host said.
Finally, the banks are a new but formidable addition to the new-high list given the Federal Reserve's commitment to its agenda of raising interest rates despite low inflation.
"So, here's the bottom line: it's true, autos and traditional retail may be weak. But these 10 other sectors can justify an awful lot of strength, certainly enough to make it possible for the stock market to plow higher, even without the usual suspects helping us along," Cramer said.
Questions for Cramer? Call Cramer: 1-800-743-CNBC
Want to take a deep dive into Cramer's world? Hit him up! Mad Money Twitter - Jim Cramer Twitter - Facebook - Instagram - Vine
Questions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com
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3163e5968ea560084b90a975c2e85740 | https://www.cnbc.com/2017/07/05/geelys-volvo-to-go-all-electric-with-new-models-from-2019.html | Geely's Volvo to go all electric with new models from 2019 | Geely's Volvo to go all electric with new models from 2019
The 2017 Volvo S90.Volvo
Geely-owned Volvo Car Group said on Wednesday all new models launched from 2019 will be fully electric or hybrids, spelling the eventual end to nearly a century of Volvos powered solely by the internal combustion engine.
The Gothenburg-based company will continue to produce pure combustion-engine Volvos from models launched before that date, but said it would introduce cars across its model line-up that ranged from fully electric cars to plug-in hybrids.
Volvo's plans make it the first major traditional automaker to set a date for the complete phase-out of combustion-engine-only models though electrification has long been a buzzword across the industry and Elon Musk's Tesla Motors has been a pure-play battery carmaker from day one.
"This announcement marks the end of the solely combustion engine-powered car," Volvo Cars Chief Executive Hakan Samuelsson said in a statement.
Five new models set to be launched in 2019 through 2021 - three of them Volvos and two Polestar-branded - will all be fully or partially electric. "These five cars will be supplemented by a range of petrol and diesel plug in hybrid and mild hybrid 48-volt options on all models," Volvo said.
"This means that there will in future be no Volvo cars without an electric motor."
Volvo has invested heavily in new models and plants since being bought by Zhejiang Geely Holding Group from Ford Motor Co. in 2010, establishing a niche in a premium auto market dominated by larger rivals such as Daimler's Mercedes-Benz and BMW.
VIDEO0:5700:57Geely will decide on an IPO: Volvo Cars CEO Squawk Box Europe
Part of its strategy has also been to embrace emerging technologies which allow higher performance electric vehicles as well as, eventually, self-driving cars.
Only last month, Volvo said it would reshape its Polestar business into a standalone brand, focused on high-performance electric cars aimed at competing with Tesla and the Mercedes AMG division.
Volvo has also taken steps towards an eventual listing, raising 5 billion crowns from Swedish institutional investors through the sale of newly issued preference shares last year, though the company has said no decision on an IPO has been made.
Follow CNBC International on Twitter and Facebook.
VIDEO0:5400:54Elon Musk announces release date for Tesla's mass-market Model 3Digital Original
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95272a9844cf686503821783dedbffb2 | https://www.cnbc.com/2017/07/05/oracle-riding-cloud-to-all-time-highs-above-dotcom-bubble-levels.html | Oracle is riding the cloud to all-time highs above dotcom bubble levels | Oracle is riding the cloud to all-time highs above dotcom bubble levels
Mark Hurd, CEO of OracleAdam Jeffery | CNBC
Amazon isn't the only company that will make money from cloud computing and artificial intelligence, according to KeyBanc Capital Markets. The firm raised its rating on Oracle shares to overweight from sector weight, predicting its cloud sales will double during the next two years. "We are upgrading ORCL based on solid cloud execution and partner feedback that increases our confidence in its ability to accelerate the conversion of more than 400,000 existing customers to its new cloud offerings," analyst Monika Garg wrote in a note to clients Tuesday. "New AI and ML [machine learning] functionality could further solidify this multiyear transformation, in our view." Garg initiated her price target for Oracle at $61, representing 24 percent upside from Monday's close.
Oracle shares reached an all-time high last month, surpassing dot-com bubble era levels for the first time. Investors are driving the stock higher as they grow optimistic on the company's transition to cloud-based offerings. The analyst said her checks with consulting firms at industry conferences revealed rising adoption of Oracle's cloud services by its customers. She cited how only 3.4 percent of the firm's customer base have signed up for its cloud-based offerings, which means there is a large opportunity for growth. As a result, the analyst predicts cloud sales will rise to 25 percent of Oracle's total revenue by 2019 from 13 percent this year. "Oracle is in the midst of a multiyear transition from traditional on-premise software licensing and maintenance support to a model driven by cloud subscriptions," she wrote. "Unlike previous innovation cycles, the value of AI will be derived from the scale of data, helping elevate the power of incumbency for those having a large customer installed base and unique data sets."
Oracle is now the highest weighted stock in the CNBC IQ 100 index.
VIDEO2:5502:55Oracle and Microsoft lead tech stocks in CNBC's IQ 100 indexSquawk Alley
β CNBC's Michael Bloom contributed to this story.
Disclaimer
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20cffaf8eac107d0157b8fe6dd7481af | https://www.cnbc.com/2017/07/05/reports-of-a-us-retirement-crisis-are-off-the-mark-think-tank-study.html | Reports of a retirement crisis are off the mark: Think tank | Reports of a retirement crisis are off the mark: Think tank
VIDEO0:5600:56Reports of a retirement crisis are off the mark: Think tankNews Videos
These days, hardly anybody believes the American retirement dream is doing all right. In fact, 88 percent of Americans agree that the nation faces a retirement crisis, according to a 2017 survey by the Washington, D.C.-based National Institute on Retirement Security pension research group.
However, a small but vocal group of scholars is advancing an opposing viewpoint. They say Americans' chances for financial security in retirement are in better shape than is commonly supposed.
VIDEO3:2203:22How Baby Boomers and Gen-X are preparing for retirementSquawk Box
So is it possible the retirement crisis is oversold?
"It's not merely possible, it's probable," said Andrew Biggs, a scholar with the American Enterprise Institute in Washington and former deputy commissioner for policy at the Social Security Administration. For one thing, he notes that while many contend low-earning Americans aren't saving enough for retirement, poverty is lower during retirement than during people's working years.
A 2016 Census Bureau report shows that in 2015 just 8.8 percent of people 65 and older were impoverished, compared to 19.7 percent of children under 18 and 12.4 percent of 18- to 65-year-olds.
If there were a crisis, Biggs says, retired people should be complaining. Yet a 2016 Gallup poll found 74 percent of U.S. retirees say they are living comfortably. And a 2017 Vanguard report found just 16 percent of retirees were dissatisfied with their financial situation, compared with 21 percent of pre-retirees.
More from FA Playbook: The pros, cons of paying off mortgages before retirement Swelling ranks of retirees negatively impacting returns Retirement saving remains a challenge for many women
Perhaps most surprisingly, Biggs points to recent research suggesting retiree incomes generally match or even exceed their pre-retirement incomes. A 2017 study by Internal Revenue Service and Investment Company Institute researchers analyzed tax returns and found most people experience no income dropoff after claiming Social Security. In fact, the median household's income rises after retirement.
"It's hard to paint a picture where this leads to a true retirement crisis," Biggs said.
Retirement policy can get tangled up in ideology, partisan politics and Beltway power struggles. Presumably, those concerns would not influence a Canadian such as Frederick Vettese, chief actuary at Toronto-based human resource advisor Morneau Shepell and author of The Essential Retirement Guide: A Contrarian's Perspective.
Vettese also doubts the retirement crisis. "The retirement savings crisis has definitely been oversold," he said. "A good indication of this is that pre-retirees have a significantly higher level of concern about whether they are financially prepared for retirement than is the case for retirees."
Buttressing Vettese's point, the 2017 Vanguard study found that 10 percent of U.S. pre-retirees considered their financial situation to be in crisis, while just 4 percent of retired people felt likewise.
Vettese says those who warn of crisis are basing their concern on "highly flawed" estimates of what a comfortable retirement costs.
The General Accounting Office in 2015 examined competing claims for existence of a retirement crisis and agreed that varying estimates of post-retirement spending needs explained most of the disagreement.
In general, financial planners say retirees need about 70 percent of pre-retirement income to be secure in retirement. Some believe the figure should be much higher. In fact, the National Institute of Retirement Security uses 85 percent as a benchmark.
Vettese says his analysis shows even the lower figures are too high. "In the case of the typical middle-income household that paid off a mortgage, raised children and made the usual payroll deductions, the real target is closer to 50 percent," he said.
Although those who disregard the retirement-crisis warnings can muster great assurance and quantities of data and analysis to support their views, crisis defenders are also well equipped with stats.
"It's as serious as it could be," said Alicia Munnell, director of the Center for Retirement Research at Boston College, which produces regular reports on the topic.
Munnell says poverty is a poor benchmark and that a better one would measure the degree to which retirement will mean a less comfortable lifestyle. "About half of today's working-age households are at risk of not being able to maintain their standard of living in retirement," Munnell noted.
What is the chance that a company that makes its business by selling retirement savings products is going to tell you that you're saving too much for retirement?Andrew Biggsscholar with the American Enterprise Institute
Munnell says two powerful factors drive the shortfall. "First, people will need more retirement income in the future because we are living longer, retiree health-care costs continue to grow rapidly, and interest rates remain low," she said. "Second, people will have less from traditional sources."
Social Security benefits have already been effectively cut by raising the full retirement age to 67 from 65, she explained, and few workers today can join defined-benefit pension plans.
Munnell suggests falling post-retirement spending such as Vettese describes occurs because retirees can't afford to spend more. "While it is true that spending declines as people age, this pattern may simply track declining income rather than an actual preference," she said.
Also sounding the crisis alarm is Teresa Ghilarducci, a labor economist, director of the Schwartz Center for Economic Policy Analysis at The New School in New York and author of How to Retire with Enough Money.
Ghilarducci says the real crisis is one of downward mobility, not poverty. "Members of the middle class will experience downward mobility and end up in near poverty in retirement," she said.
Only a minority of "independent and rigorous" researchers consider that retirement savings are adequate, Ghilarducci explained. "Most scholars do not think so," she said, pointing to the 2015 GAO report that examined a number of efforts to research whether Americans have saved enough for retirement. "The studies generally found about one-third to two-thirds of workers are at risk of falling short of this target."
Both sides believe some of the problems around the reporting of the retirement crisis derive from profit-motivated financial firms and credulous financial journalists. They are the source of the viewpoints they disagree with.
"All these vendors make a lot of money when they say there's a crisis and we'll help you get out of it," Ghilarducci said.
Biggs at the American Enterprise Institute agrees. "What is the chance that a company that makes its business by selling retirement savings products is going to tell you that you're saving too much for retirement?" he said. "They're not lying."
He added, "They believe in their product. But people are credulous about this, particularly in the media."
β By Mark Henricks, special to CNBC.com
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77170fa7c0d3428b4b1a423179d5236d | https://www.cnbc.com/2017/07/05/some-fed-officials-are-concerned-stock-prices-may-be-too-high.html | Some Fed officials are concerned stock prices may be too 'high' | Some Fed officials are concerned stock prices may be too 'high'
VIDEO1:2401:24Fed minutes: General support for gradual rate hikesPower Lunch
Several Federal Reserve officials are worried about rising risks in the U.S. stock market, according to minutes released Wednesday from June's Federal Open Market Committee meeting.
"A few participants expressed concern that subdued market volatility, coupled with a low equity premium, could lead to a buildup of risks to financial stability," according to minutes.
Some policymakers also suggested investors may be too comfortable with buying risky assets like stocks and some officials believed "equity prices were high when judged against standard valuation measures," according to the meeting notes.
U.S. stocks have surged to all-time highs as the bull market stretches past its 8th year on the back of low interest rates from the central bank. Meanwhile investors grow increasingly complacent. The CBOE Volatility Index (.VIX) fell in early June to 9.37, its lowest since Dec. 27, 1993. The VIX traded near 11 Wednesday.
Fed officials also appeared concerned the central bank's attempts to raise interest rates β theoretically making it more expensive to borrow money β were not having an effect on financial markets. Corporate and Treasury yields have decreased this year even as the Fed hikes rates.
VIDEO1:4301:43Market ready for Fed to reduce balance sheet: ProPower Lunch
"According to some measures, financial conditions had eased even as the Committee reduced policy accommodation and market participants continued to expect further steps to tighten monetary policy," the minutes said.
Possible reasons for the decline in yields could be expectations of sluggish economic growth and the "elevated level of the Federal Reserve's longer-term asset holdings."
Many on Wall Street have worried easy monetary policy has artificially supported stock market gains and left central banks with little ability to stimulate the economy in case of another recession.
Now, the Fed is leading major central banks in tightening monetary policy. The Fed raised its benchmark interest rate in June for the fourth time since December 2015 and said it planned to begin reducing its $4.5 trillion balance sheet this year.
Last week, Bank of America Merrill Lynch's chief investment strategist, Michael Hartnett, said in a note that "central banks have exacerbated inequality" and that it is "no longer politically acceptable to stoke [the] Wall St. bubble."
The Federal Reserve and the European Central Bank are "now tightening to make Wall St. poorer," likely setting up for a "big top" in stock markets this fall, Hartnett said.
VIDEO4:4904:49Cramer says Janet Yellen is 'torn' on future Fed rate hikesSquawk on the Street
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9391b702d0f1e86f05ce56c3d8661061 | https://www.cnbc.com/2017/07/05/three-retirement-savings-strategies-to-use-if-you-plan-to-retire-early.html | Three retirement savings strategies to use if you plan to retire early | Three retirement savings strategies to use if you plan to retire early
VIDEO1:5001:50Signs it's time to convert your IRARetire Well
If you're lucky to have saved enough money to leave the rat race early, you still need to a retirement strategy that minimizes taxes and penalties.
Retirement account rules are stacked against early retirees. People may face a 10 percent early withdrawal penalty if they take money out of their traditional IRAs before age 59Β½ and before age 55 with traditional 401(k) plans and other workplace retirement plans.
Here are some strategies early retirees can use to maximize their retirement savings:
There is an exception to the early withdrawal penalty for IRAs. The IRS allows you to take "substantially equal periodic payments" under Rule 72(t).
To avoid the 10 percent penalty once you begin distributions, you must continue to take the required distribution for the longer of five years, or until you reach age 59Β½. Once distributions begin, if the series of payments is modified in any way, the 10 percent penalty will be imposed retroactively beginning with the first year of distribution.
The 72(t) withdrawals are taxed at your income tax rate and the distributions are inflexible, said Josh Stillman, a certified financial planner with Capitol Financial Consultants in McLean, Virginia. "[This strategy] locks in a fixed distribution, making it hard to absorb unexpected expenses or partake in discretionary expenses, like a big trip early in retirement," he said.
Plenty of free online calculators can help you estimate what distributions may look like under Rule 72(t).
Early retirees will have several years, perhaps decades, before they can tap their traditional retirement accounts without penalty.
"These years present a perfect opportunity to convert workplace funds to a Roth," said Dana Anspach, a CFP and CEO of Sensible Money in Scottsdale, Arizona.
Roth accounts have several advantages over traditional ones for early retirees. Funded with after-tax dollars, you can withdraw contributions you made to your Roth IRA any time, tax- and penalty free. However, you may have to pay taxes and penalties on the earnings in your Roth IRA before age 59Β½.
Unlike traditional retirement accounts, Roth IRAs have income restrictions. This year, a single person with a modified annual adjusted gross income of $133,000 or more and a married couple making more than $196,000 cannot directly fund a Roth IRA.
I did not convert my 401(k) into a Roth IRA because I did not want to 'give up' and pay taxes to the government. Once you pay taxes to the government up front, you lose.Sam Dogenearly retiree and creator of Financial Samurai
However, you can avoid those income limits if you convert your traditional IRA to a Roth. You will pay income taxes on the amount you convert to a Roth and that could raise you to another tax bracket in the year you do the conversion.
"[Roth conversions] require careful tax analysis each year, after the year is over, and before taxes are filed to determine the capacity for additional withdrawals or conversions," said Pearce Landry-Wegener, a CFP at Summit Place Financial Advisors in Summit, New Jersey.
Converting to a Roth can be a bad idea if you live in a high-tax state and plan to move to a state with lower or no state income taxes later in retirement.
Not every early retiree is a fan of Roth conversions. Sam Dogen, the creator of the personal finance website Financial Samurai, retired in 2012 at age 34 after a 13-year career in finance.
Dogen said he has not dipped into his tax-advantaged retirement accounts because he lives off a passive income stream of certificates of deposits, stock dividends and real estate investments that he expects will generate roughly $211,000 this year.
"I did not convert my 401(k) into a Roth IRA because I did not want to 'give up' and pay taxes to the government. Once you pay taxes to the government up front, you lose," Dogen said.
In a taxable account, the money in the account is yours, minus capital gains taxes, without any strings attached to distributions.
"When you retire, using funds from a taxable account first and allowing tax-deferred money to continue to grow for a few more years, when you could potentially be in a lower tax bracket anyway, can be very impactful," said Melissa Sotudeh, a CFP with Halpern Financial in Rockville, Maryland.
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cf31a907e7f443590404c625fd87ae59 | https://www.cnbc.com/2017/07/06/asia-markets-bond-yields-china-forex-reserves-nfps-in-focus.html | Asian markets pressured after softer US close and rise in bond yields | Asian markets pressured after softer US close and rise in bond yields
Most Asian markets closed lower on Friday after the weaker close stateside and as global bond yields rose.
The Nikkei 225 declined 0.32 percent, or 64.97 points, to close at 19,929.09 and the Kospi slid 0.33 percent, or 7.94 points, to end at 2,379.87.
Down Under, the S&P/ASX 200 tumbled 0.96 percent, or 55.196 points, to close at 5,703.567, with broad-based losses across all its sub-indexes. Its energy sub-index led the losses and closed down 2.07 percent.
Shares in greater China closed mixed after cautious trade. The closed lower by 0.49 percent, or 124.37 points, at 25,340.85. On the mainland, the rose 0.16 percent, or 5.1687 points, to close at 3,217.6127 and the Shenzhen Composite edged up 0.185 percent, or 3.5466 points, to end at 1,918.1324.
Movements in the bond markets were in the spotlight as sovereign bond yields rose overnight. Bond yields move inversely to prices.
The selloff in the bond markets came amid expectations of more hawkish central bank policy.
The benchmark 10-year U.S. Treasury yield rose to nearly two-month highs overnight. At 4:12 p.m. HK/SIN, 10-year yields were at 2.38 percent, off a high of 2.39 percent seen earlier in the session, compared with the 2.33 percent seen earlier in the week.
In the previous session, the German 10-year bund yield crossed the 0.5 percent level for the first time since January 2016. The yield was at 0.57 percent at 4:11 p.m. HK/SIN.
VIDEO1:3501:35Don't expect bond yields to rise too much: ExpertCapital Connection
National Australia Bank economist Tapas Strickland said the selloff in bonds came after a weak French 30-year bond auction. That was reinforced by minutes from the European Central Bank indicating that officials had discussed removing the Bank's easing bias.
"The clear implication here is that buyers have less appetite for European debt as they expect yields to head higher and for the ECB to gradually remove policy accommodation in the near future," Strickland said in a Friday morning note.
In Japan, the Bank of Japan stepped up buying of five- to 10-year Japanese government bonds (JGB) under its quantitative easing program, Reuters reported. The BOJ has set a target of keeping the 10-year JGB yield at zero.
This week, the 30-year and 40-year JGBs have touched their highest yields since February of 2016, while the 10-year touched a five-month high of 0.105 percent, Reuters reported.
The BOJ's bond-buying sent the yen lower, with the greenback fetching 113.72 yen at 4:00 p.m. HK/SIN, yen, compared with around 113.10 before the bond moves.
VIDEO2:0502:05What OPEC must do to normalize inventoriesCapital Connection
Oil prices sank after settling moderately higher overnight. Brent crude futures fell 1.58 percent to trade at $47.35 a barrel and U.S. crude futures declined 1.8 percent to $44.70.
Energy stocks in Australia sold off following the drop in oil prices. Australia's Santos shed 2.64 percent and Oil Search closed down 1.97 percent.
Stephen Innes, a senior trader an OANDA, told CNBC that he has been "quite nervous" about developments in the oil patch. "There is an air of uncertainty around the commodity patch given oil markets' far-reaching implications across all asset classes," he added.
In South Korea, shares of Samsung Electronics were down 0.42 percent after the electronics giant said profit for the second quarter was expected to increase 72 percent on-year.
Meanwhile, Korean Air Lines closed down 2.18 percent following news that police had conducted a raid at the company's headquarters in Seoul, South Korea.
Shares of commodities trader Singapore-listed Noble Group were down 9.38 percent after jumping 36 percent in the previous session. It remained unclear what drove the sudden rush into the stock. Shares of the company were down more than 65 percent year-to-date.
VIDEO2:0402:04US employment growth is moderating, but...The Fed
In economic news, U.S. private payrolls data from ADP on Thursday indicated that 158,000 jobs were created in June, compared with the 185,000 expected. The ISM non-manufacturing index, however, indicated that non-manufacturing activity grew, coming in at 57.4 in June, compared with the 56.5 forecast.
Data out of the U.S. on Thursday encapsulated the current economic conundrum, said Michael McCarthy, chief strategist at CMC Markets.
"Around the globe, an ongoing increase in activity is only weakly lifting employment, and both wages and prices are showing little signs of life. A low inflation environment endangers the withdrawal timetable and increases market risks," McCarthy warned in a Friday note.
Ahead, nonfarm payrolls data due Friday in the U.S. were likely to also be closely watched by markets.
In currencies, the euro was mostly flat after strengthening overnight on the back of the release of the ECB's minutes. The common currency traded at $1.1419 to the dollar at 3:58 p.m. HK/SIN, compared with levels around the $1.13 handle seen earlier in the week.
Meanwhile, the dollar index, which measures the dollar against a basket of rival currencies, firmed to trade at 95.880 at 3:58 p.m. HK/SIN β but remained lower than the 96 handle seen for most of the week.
Data for China's June foreign exchange reserves released after the market close showed reserves rose for a fifth straight month, but remained lower than forecasts, Reuters reported. Reserves rose by $3 billion to come in at $3.057 trillion in June, compared to the $3.06 trillion forecast.
Stateside, stocks closed lower, with the Dow Jones industrial average falling 0.74 percent, or 158.13 points, to close at 21,320.04.
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70ad7eddcbf92790ceffad101bd4a20a | https://www.cnbc.com/2017/07/06/challenger-jobs-cuts-report-june-2017.html | Planned job cuts total 31,105 in June: Challenger report | Planned job cuts total 31,105 in June: Challenger report
Andrew Cribb | Getty Images
The number of planned layoffs at U.S. firms fell in June to its lowest level of the year as employers opted to hold onto existing jobs in a tight labor market where skilled laborers are harder to find, a report released on Thursday showed.
U.S. companies announced 31,105 planned job cuts in June, a 6.0 percent decline from 33,092 in May, according to outplacement consultancy firm Challenger, Gray & Christmas Inc.
The previous month's figure was downwardly revised from 51,692 after Ford Motor Co reported it would cut 1,400 workers, not 20,000, as initially reported.
Overall, June's job cuts were down 19.3 percent from a year earlier, when 38,536 layoffs were announced in June 2016.
"Some companies are not making their layoffs this year, which they might have done if the labor pool wasn't so stretched, especially for skilled labor," John Challenger, chief executive officer of Challenger, Gray and Christmas, told Reuters.
With the unemployment rate at 4.3 percent, its lowest since May 2001, employers are having a harder time finding the talent they need so they keep existing workers, Challenger said.
The slowdown in layoff activity in June is reflected in the year-to-date totals as well, with the number of planned workforce reductions falling by 28 percent to 227,000 in the first six months of 2017 from more than 313,000 in the first half of 2016.
The technology sector, for instance, reported 23,813 job cuts for the first six months of the year, down 52.5 percent from 50,161 announced in the first half of 2016.
One notable exception is in the retail sector, where announced layoffs in the first half of 2016 are the highest since the recession as big chains such as Macy's Inc close stores and companies restructure to focus on online sales.
The sector had announced 60,127 job cuts through June, a 42 percent increase from the 42,095 cuts reported through the first half of 2016. This represents the highest number of layoffs in the first half since 2009, according to Challenger.
Though the retail sector reported over 5,000 store closings this year, the worst of the layoffs may be behind. Challenger said retailers typically trim their staff in the first quarter after the holiday season before they start to expand again.
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f69ebebac59facd7977819c1ce3a8fe7 | https://www.cnbc.com/2017/07/06/martin-shkreli-lawyer-and-cowboy-venture-capitalist-duel-over-horses.html | Martin Shkreli's lawyer and 'cowboy' venture capitalist duel over what horses and investments are worth | Martin Shkreli's lawyer and 'cowboy' venture capitalist duel over what horses and investments are worth
VIDEO0:5400:54Martin Shkreli's lawyer and 'cowboy' venture capitalist duel over what horses and investments are worthNews Videos
This "cowboy" sure plays coy when it comes to horses and money.
A Texas biotech investor who prosecutors claim was defrauded by Martin Shkreli refused to disclose his estimated net worth under cross-examination at the "Pharm Bro's" federal securities fraud trial. The refusal by Darren Blanton, 52, came even though he has bragged previously about owning frozen semen worth $20 million alone from just one of his horses.
The line of questioning by defense attorney Benjamin Brafman about Blanton's worth appeared to be part of an effort to portray him as a sophisticated investor who was capable of dealing with Shkreli and hedge fund investments.
Prosecutors accuse Shkreli of using stock in his Retrophin pharmaceutical company to pay off investors like Blanton, who were allegedly defrauded at two Shkreli-run hedge funds.
Asked on Thursday by Brafman what he's currently worth, Blanton told the court: "I have no idea right now."
"It's based on a lot of private investments," Blanton added, suggesting it would be difficult to value those investments.
When Brafman pressed further in the federal court trial, suggesting he was worth more than $100 million, Blanton said, "I have an idea."
"But I choose not to disclose it," said Blanton, who runs an investment vehicle called Cold Ventures, and who served as an adviser for the transition of President Donald Trump.
Asked if he had told Shkreli that Blanton's horses alone were worth more than $70 million, Blanton said he did not believe he had told him that.
Asked how much the horses that he owns are worth, Blanton again ducked, "That all depends on what someone pays for them."
Blanton didn't budge when Brafman asked if the horses were worth more than $20 million.
"Is it more than $100?" Brafman finally asked.
"Yes," Blanton conceded, drawing laughs from reporters covering the trial.
Brafman later asked, "Would you consider yourself a success?"
"Not yet," Blanton said.
A 2015 Dallas Morning News referred to Blanton as "the cowboy venture capitalist" and said Blanton wants to be a billionaire and is close to achieving that ambition.
"That's my goal," Blanton told the newspaper. "Most of my companies are private, so you can't really put a market value on them. I could make past that threshold if one of them breaks out."
Blanton testified on Thursday that The Morning News "misquoted me" on the billionaire reference in the story.
The story also said Blanton parlayed a $1 million investment Halozyme Inc. into almost $40 million. It said he "has made another 50 or so biotech investments, several of which have turned into billion-dollar-plus companies."
The article reported that "Blanton's most prized transaction was his purchase three years ago of the legendary cutting horse sire High Brow Cat, whose 1,300-plus "Cat" offspring have netted more than $70 million in prize money in the competitive Western performance horse world."
"He owns 45 Cat offspring, including an actual clone, Copy Cat, and has another 20 on the way next year," the story said.
"He also has the now-sterile 28-year-old stallion's frozen semen as a futures play. 'I figure the Cat inventory is worth about $20 million," he says."
The newspaper said Blanton is a nonprofessional participant in cutting horses competitions. Cutting horses are used in separating cattle from a herd.
Martin Shkreli, former chief executive officer of Turing Pharmaceuticals AG.Peter Foley | Bloomberg | Getty Images
Two months ago, his company's receipt of payments from the Trump presidential campaign were highlighted in another story.
A May 4 Washington Post story said that Federal Election Commission reports reveal that Trump's presidential campaign paid $200,000 on Dec. 5 for "data management services" to Blanton's firm Colt Ventures, which is an investor in a social media company called VizSense, a social-media company.
That company was co-founded by Jon Iadonisi, whom the Post noted is a friend and business associate of fired Trump national security adviser Michael Flynn. Flynn's contacts with Russians are under investigation by federal authorities.
The Post quoted Trump campaign executive director Michael Glassner as saying that invoices "show Colt Ventures was paid for a Βsocial-media project that involved video-content creation and 'millennial engagement' in the campaign's final month."
"He declined to comment on why the payment went to a venture-capital firm and whether campaign officials were aware of the firm's connection to VizSense and Iadonisi," the Post story said.
The article went on to say that "Blanton met frequently with Trump strategist Stephen K. Bannon at Trump Tower during the campaign, according to people who saw him there."
Blanton did not respond to the Post for its story when asked for comment.
Earlier this week, Blanton testified that he had to pester Shkreli for almost three years to get his $1.3 million investment in Shkreli's hedge fund redeemed.
Blanton said he only got $200,000 in cash, and the rest came in the form of stock in Retrophin. And that stock was given to him through a purported "consulting agreement" with Retrophin. Prosecutors claims that agreement was a sham.
Blanton testified that he made $2.4 million on selling some of his Retrophin stock, and that he still retains other shares that are worth nearly $3 million.
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51d03177df16065d33dbe104ca5c35e1 | https://www.cnbc.com/2017/07/06/missing-the-employer-match-could-derail-your-retirement-goals.html | 1 in 5 workers misses out on this free money for retirement | 1 in 5 workers misses out on this free money for retirement
Squeezing more money out of your boss might be as easy as reassessing your 401(k) contribution.
Even as workers set aside more for retirement, many are still missing out on free money in the form of matching contributions from their company.
"Would you like your employer to give you a raise?" asked Kevin Meehan, a certified financial planner and the regional president of Wealth Enhancement Group in Itasca, Illinois. "Well, here is a way to get it without having to ask, because your employer has already volunteered."
One in 5 workers isn't contributing enough to get the full match from his or her employer, according to data in a forthcoming report from benefits administrator Alight Solutions, which assessed behaviors of 3.5 million workers at 125 companies who are eligible to participate in their workplace plan. Fidelity, which crunched numbers for CNBC on 2.6 million participants in 6,295 plans, came up with the same figure.
Young workers and those with lower salaries are more apt to miss the match, but the trend persists even among those who are older or well compensated. (See charts below.)
A new analysis from Wells Fargo found that one-quarter of boomers aren't saving enough in their workplace retirement account to get the full match. For Gen Xers, it's 31 percent and millennials it's 37 percent. The bank analyzed habits from 4 million workers in more than 5,000 plans.
Employee savings by age
Employee age Below match threshold At match threshold Above match threshold 20-2929%38%34%30-3925%34%41%40-4921%29%50%50-5916%25%58%60+14%26%61%
Some of those workers are just shy of the mark.
Fidelity estimates that 20 percent of those missing out are only 1 percentage point below a full match. Wells Fargo puts the average value of the lost match at $750 per year. Over a career, even a small annual loss could amount to nearly $100,000 less in your retirement account.
"On first reaction people may say, 'That's not a lot,' but when you think about that over a 40-year period β¦ it really adds up," said Joe Ready, executive vice president and director of Wells Fargo Institutional Retirement and Trust.
So why are workers leaving free money on the table? Experts say several factors might be at play, chief among them competing debts and goals for those paycheck dollars.
"A number of people just don't have the personal cash flow to make the contribution, period," Meehan said.
Employee savings by income
Salary Below match threshold At match threshold Above match threshold $20,000-$39,00035%35%30%$40,000-$59,00026%33%41%$60,000-$79,00020%31%50%$80,000-$99,00014%29%57%$100,000+8%22%69%
Consumers could also be missing out because they aren't aware of key plan details. About half of employer plans that automatically enroll eligible workers put them in at a contribution level below that of a full match, said Rob Austin, director of research at Alight Solutions. Many of those plans escalate contributions over time, but not all do.
Another miss: Some plans allow both pretax and Roth contributions, but match only pretax ones, Austin said.
VIDEO0:0000:00Millennial money movesBalancing Priorities
If you can afford to contribute, there's no reason to leave that employer match on the table. Even if the match isn't particularly generous β say 25 cents on the dollar β "that is still a guaranteed 25 percent return on your investments right away," Austin said.
Here's how to make sure you're snagging all the free money available:
Confirm match details. "Double-check that you are getting the full amount," Austin said. That's something easy to confirm with a call or email to human resources or your plan administrator.Reassess your budget. Do a personal inventory of your expenses to see where you could save money or cut back, said Ready. A recent Banktivity survey found that Americans waste an average $140 each month on things they don't necessarily need.Create an escalation plan. If you can't afford to bump up contributions just yet, check to see if your plan allows you to schedule an increase or sign up for an annual increase program, Austin said. Time that to coincide with your next pay raise
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8b4e18f4f42dabfc7ff8daf17fef44ae | https://www.cnbc.com/2017/07/06/the-british-open-is-now-awarding-its-prize-in-dollars-after-154-years-of-using-pounds.html | The British Open is now awarding its prize in dollars after 154 years of using pounds | The British Open is now awarding its prize in dollars after 154 years of using pounds
Sweden's Henrik Stenson poses for pictures in front of the clubhouse as he kisses the Claret Jug, the trophy for the Champion golfer of the year after winning the 2016 British Open Golf Championship at Royal Troon in Scotland on July 17, 2016.Ben Stansall | AFP | Getty Images
In what is perhaps a subtle jab at last year's Brexit decision, the organizers behind the British Open announced this year's prizes will be awarded in dollars, rather than pounds, as has been done previously.
The winner will receive $1,845,000 at the 146th Open at Royal Birkdale golf course in coastal Southport. That translates to Β£1,422,842 based on today's exchange rates.
The total prize fund will be $10,250,000.
According to Martin Slumbers, chief executive of The R&A, the governing body that organizes the event, "We are operating in an increasingly global marketplace and have made the decision to award the prize fund in US dollars in recognition of the fact that it is the most widely adopted currency for prize money in golf."
The British Open is the oldest of golf's four major championships, taking place every year since 1860 except during the world wars. But it wasn't until 1863 that a cash prize was given out. Since then, the prize has always been doled out in pounds. Now, 154 years later, that is changing.
The pound has been on a downward spiral against the dollar since last year's vote for Britain to exit the European Union.
In a twist caused by that plunging exchange rate, last year's winner, Henrik Stenson, received less in dollars than the previous year's winner. The prize money for the winner increased slightly in 2016, but in dollars the prize ended up being about $300,000 less than in 2015.
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82e502f38656d335ff91afc1f716ca35 | https://www.cnbc.com/2017/07/06/trump-us-stands-firmly-behind-nato-article-5.html | Trump endorses NATO's mutual defense pact in Poland, after failing to do so on first Europe trip | Trump endorses NATO's mutual defense pact in Poland, after failing to do so on first Europe trip
VIDEO5:5005:50Trump: Europe must do moreSquawk Box
President Donald Trump on Thursday explicitly endorsed NATO's mutual defense clause after failing to do so during his previous European trip.
Speaking in Warsaw, Poland, Trump defended his calls for allies in the 28-member North Atlantic Treaty Organization to pay more for their defense. He then endorsed Article 5, which ensures that allies will come to each other's defense in the event of an attack.
"To those who would criticize our tough stance, I would point out that the United States has demonstrated β not merely with its words but with its actions β that we stand firmly behind Article 5, the mutual defense commitment," Trump said.
"Words are easy, but actions are what matters. And for its own protection, Europe β and you know this, everybody knows this, everybody has to know this β Europe must do more."
Trump, who won the White House with an anti-global message, has repeatedly bashed NATO and the European Union, which have formed the basis of U.S.-Europe cooperation in the decades since World War II. At a NATO summit in May, Trump declined to explicitly endorse Article 5, creating unease among European leaders at the event.
The ceremony in Brussels dedicated a memorial to the only time NATO has invoked that automatic defense clause β after the Sept. 11, 2001, attacks β when those same NATO nations came the America's defense by sending troops to Afghanistan and elsewhere.
Trump's doubts about committing to Article 5, which started when he was a candidate, came as Russia has become more militarily assertive. He eventually publicly committed the U.S. to the clause during a press conference in June, saying: "I'm committing the United States to Article 5."
Trump also said Thursday that "a strong Europe is a blessing to the West and the world."
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873a8fd79b33fb6c3d51d0a417355f5b | https://www.cnbc.com/2017/07/06/unprotected-server-leaves-3-million-wwe-fans-personal-data-available.html | Unprotected server leaves 3 million WWE fans' personal data vulnerable: report | Unprotected server leaves 3 million WWE fans' personal data vulnerable: report
Sin Cara jumps during the WWE Live Dusseldorf event at ISS Dome on Feb. 22, 2017 in Dusseldorf, Germany.Lukas Schulze | Bongarts | Getty Images
An employee of German security firm Kromtech uncovered an unprotected WWE database containing more than 3 million users' personal information, according to a report published Thursday by Forbes.
The data was stored on an Amazon server without any username or password protection, Forbes reported, and was accessible to anyone who knew which web address to search.
Displayed in easily readable plain text, users' home and email addresses, birthdates, ethnicities, children's age ranges and genders were included in the leak, Forbes said, among other information.
"Although no credit card or password information was included, and therefore not at risk, WWE is investigating a vulnerability of a database housed on Amazon Web Services (AWS), which has now been secured," a WWE spokesperson said in a statement.
"WWE utilizes leading cyber security firms Smartronix and Praetorian to manage data infrastructure and cybersecurity and to conduct regular security audits on AWS. We are currently working with Amazon Web Services, Smartronix and Praetorian to ensure the ongoing security of our customer information," the spokesperson said.
According to Forbes' source, another database was left on an Amazon server containing more information on primarily European fans.
Read more about the WWE leak in Forbes' report.
VIDEO2:1902:19In sports media, WWE is the champMad Money with Jim Cramer
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8e12456009b91336a6d4191d84b53786 | https://www.cnbc.com/2017/07/07/berkshire-hathaway-buffetts-texas-holdem-strategy.html | Warren Buffett has invested billions in Texas, and is at it again | Warren Buffett has invested billions in Texas, and is at it again
VIDEO0:3600:36Elliot Management explores rival bid for OncorPower Lunch
Berkshire Hathaway's Warren Buffett has a thing for Texas.
The Omaha, Nebraska-based conglomerate's $9 billion all-cash deal for electricity transmission company Oncor is just the latest bet by the billionaire on the Lone Star State, something it was careful to mention in its press release Friday.
"Oncor is an excellent fit for Berkshire Hathaway, and we are pleased to make another long-term investment in Texas," Buffett said in the statement. "When we invest in Texas, we invest big!" (exclamation point included)
Berkshire owns nearly a dozen other companies headquartered in the state as the result of acquisitions over the years. Some of them are well-known names, such as Burlington Northern Santa Fe Railway, the Fort Worth company Berkshire assumed total ownership of in 2010.
Others aren't exactly household names, like LiquidPower Specialty Products, a Houston company that makes the chemical agents that improve the operations of energy pipelines, or McLane, a Temple-based food distribution business acquired from Wal-Mart in 2003.
When Berkshire acquired the rest of BNSF it didn't already own, for a total investment of $34 billion, Buffett said, "It's an all-in wager on the economic future of the United States. I love these bets."
It could also be a bet on the Texas economy. The state added jobs at a 2.4 percent annualized rate in May, the latest figures available on the Dallas Fed's website, and growth of 2.5 percent year to date outpaced the nation's 1.3 percent increase. The Dallas Fed says economic growth is accelerating in the state, with job growth forecast to be 2.7 percent this year, more than the 2.1 percent long-term average.
Berkshire might have some company in the Oncor deal. Activist hedge fund Elliott Management, run by billionaire Paul Singer, is mulling its own bid for the company, according to a Reuters report on Friday afternoon. Elliott is already a major creditor of Energy Future Holdings, the owner of most of Oncor. An Elliott spokesman wasn't immediately available to comment on the report.
Among Berkshire's other Texas holdings are Acme Brick and Justin Brands, a brickmaker and cowboy boot purveyor, respectively, both based in Fort Worth (they were once part of the same company acquired by Berkshire in 2000); Allie Beth Allman & Associates, a Dallas luxury real estate firm; and Berkshire Hathaway Automotive, the Dallas-based product of a 2014 deal for the largest private auto dealership once based in Phoenix.
Speaking of which, local newspapers were aflutter this spring when Buffett paid a visit to state lawmakers about a state law that made it tough for Berkshire's dealerships to conduct business there. The so-called Buffett Bill, seeking an exemption for Berkshire to that law, quickly gained steam in the Capitol but ultimately died, according to local accounts.
VIDEO1:4801:48Warren Buffett bets on utilities with $9 million Oncor dealPower Lunch
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2e72f4e9179067a34569e21f7823e86e | https://www.cnbc.com/2017/07/07/cybersecurity-stocks-rally-on-mondelez-hacking.html | Trader Talk | Trader Talk
VIDEO2:1102:11Cyber attacks cost companies more than $15M per yearClosing Bell
Cybersecurity stocks like FireEye, Barracuda, Symantec and Palo Alto Networks rallied Friday, as snack food and beverage giant Mondelez International became the latest victim of a cyber attack. The company said it was hit with an attack on June 27 that compromised its ability to ship and send invoices during the last four days of its second quarter.
What made this call unusual is that the company quantified exactly how much the attack hurt them: Its preliminary estimate of the impact indicates a 3 percent slice off its revenue growth rate for the quarter.
Unlike the recent WannaCry ransomware attack, this hacking, as well as similar ones reported by Reckitt Benckiser and others, appear to be designed to simply cause as much destruction as possible.
And analysts say it's only going to get worse. In a report yesterday to clients, KeyBanc noted that security concerns will increase in importance as companies shift to the cloud and that 2016 was already a record year for data breaches:
Cyber crime in 201635 percent rise in business ransomware58 percent increase in distributed denial of service (DDoS) attacks78 percent increase in phishing sitesSource: KeyBanc
There is plenty of room for growth. The cybersecurity business is still relatively small: KeyBanc notes it is only $35 billion but growing fast. It's remarkably fragmented: Symantec's enterprise business is the largest player, with only 7 percent market share. In part, that's because there are many different parts to the security business that are not served by all the players: firewall, identity & access management, data loss prevention, messaging security, etc.
Widely reported events like the WannaCry ransomware attack and the "Petya" malware attack get a lot of attention, but more knowable events on the horizon are generating interest for cybersecurity companies. KeyBanc notes that a "firewall refresh cycle" will likely start in six to nine months, and that new European regulatory standards for all companies handling data in the European Union will come into effect in May 2018 that will create opportunities for vendors specializing in data loss prevention and database activity monitoring. That means more business for companies like Box and Okta.
VIDEO2:2902:29Maersk hit by Petya cyber attack: APAC CEOSquawk Box Asia
Most importantly, business appear to be shifting priorities. In the past, prevention was the priority, with detection and correction less important. In 2014, 80 percent of enterprise security budgets were devoted to prevention, with only 10 percent devoted to rapid detection & response. That is now reversing: KeyBanc estimates the 60 percent of enterprise security budgets will be devoted to rapid detection & response by 2020.
The big question, according to Ilya Kundozerov at Morningstar, who covers cybersecurity stocks, is this: How much of this negative news will get translated into top-line growth for cybersecurity companies?
"This industry is driven by negative news," Kunderozerov said. In the past, similar events have led to an increase in revenues. FireEye, for example, is extra sensitive to these kind of events because they are often the company that gets the first call. Kunderozerov says it's still too early to tell if Wannacry and Petya will generate significant revenue growth.
What is remarkable to Kunderozerov is that many of these recent attacks were not due to amazing, sophisticated cyber hacks: They were due to the failure of companies to simply keep their software updated.
"There certainly are very sophisticated cyber attacks, but a lot of companies have very old software that no one wants to touch, and the companies have decided to let it be and leave it unpatched and unprotected," he said. "These were old vulnerabilities that should have been patched. Nothing has happened to these systems, but now it's payback time. These legacy systems need to be completely isolated, or patched, or migrated to new software."
VIDEO0:2700:27Modelez: Recent cyber attack to cut Q2 revenue growthFast Money
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6f645f31ac97b7293f3ca4095e48d851 | https://www.cnbc.com/2017/07/07/inpex-ichthys-lng-project-investors-are-worried-theres-a-multibillion-dollar-crack.html | Investors are worried there's a multibillion-dollar crack in one of the world's largest LNG projects | Investors are worried there's a multibillion-dollar crack in one of the world's largest LNG projects
One of the biggest, most expensive liquefied natural gas projects in history may have developed a physical crack β and the managing company isn't answering questions from investors.
A picture shows the logo of Japanese Energy firm Inpex during the World Gas Conference exhibition in Paris on June 2, 2015.Eric Piermont | AFP | Getty Images
They may have reason to worry. The crack, which is believed to be in a floating production storage and offloading (FPSO) unit, could add billions of dollars in upfront costs, and it could delay the project even further, likely costing more down the line as a major competitor plans to swoop in.
The floating unit is sitting at a yard in Busan, South Korea, and is set to eventually operate at "Ichthys" β a giant gas and condensate field offshore western Australia led by Japan's Inpex, with a 30 percent stake from France's Total. That project first broke ground in 2012 and is set to be a mega-scale operation that produces about 8.9 million tons of LNG every year if it reaches full capacity.
Inpex said earlier this month that the unit would "soon" sail away to Australia, and the Japanese operator said the unit is undergoing "last-minute preparation work" including commissioning, cleaning and certification work.
One person familiar with the project, however, told CNBC that they have firsthand knowledge of an unannounced crack in the equipment, which was driving up costs and delaying the unit's journey to Australia, previously expected for 2015. An additional three sources said they had been told there was a crack, but could not independently confirm the defect.
When CNBC reached out to the company and asked whether the rumored crack is real, Inpex said it "cannot provide details concerning reasons for the delay."
According to one person familiar with the matter, Inpex recently hired as many as 300 welders to fix the damage. Several sources said they believe the damage is the main reason for the delay.
The alleged fault is in the unit's "turret," a central part of an FPSO that conveys "almost everything that will enter or leave" the unit, including chemical injection lines and power cables, Ichthys LNG Project Offshore Director Claude Cahuzac said in comments available on Inpex's website.
A fault in a big piece of liquid natural gas equipment isn't so abnormal, industry analysts told CNBC, with one suggesting LNG projects generally require "lots of trials and errors." What is less common, they said, is the amount of investor concern being generated by the Ichthys project.
The Ichthys LNG Projectβs massive central processing facility, to which the floating production storage and offloading unit will connect.Inpex Australia
Naturally enough, that concern comes down to money. The original budget of the project back in 2008 was around $20 billion. Inpex's estimate now stands at $37 billion plus an additional amount of spending, Mizuho Securities said following an analyst briefing in May this year.
In fact, one portfolio manager who reviewed the recent spending projections by Inpex said that "with the 2018 capital expenditure guidance increasing by around 50 percent over the last six months, it may suggest Inpex has lost control over costs."
In November 2016, the company's capital expenditure forecast for 2018 was $3.75 billion. Six months later, however, the company's forecast was $5.4 billion at current dollar-yen exchange rates. With $1.65 billion added to the spending forecast in a matter of six months, some are now estimating the investment in the project could break $40 billion.
Another thing on investors' minds: Any additional cost blowouts could hit Inpex's credit rating. Moody's wrote in a May 29 report, "Given the large size of the project, a significant further delay or cost overrun would pressure Inpex's credit rating in the next 12 months."
As rumors of a major crack began to brew, a team of investors and an analyst tried to carry out on-site reconnaissance themselves, according to multiple sources.
The team climbed to the top of tall buildings near the site in an attempt to get a better view, one member of the group told CNBC, because they couldn't access the construction yard β let alone get more information on the crack from Inpex. But the unit was blocked from view, the team member said.
Although doubts about the unit are now creeping through the investment community, the project still holds much promise. Energy consultancy Wood Mackenzie called the project a "game changer" for Inpex, writing in a recent note that "once up and running, it will bring Inpex into the elite LNG club of global LNG operators, dominated by the major international oil companies" To be a member of that club, however, Inpex may have to race to the field and start drilling quickly.
Another large-scale LNG project is coming right next door to the Ichthys field. Royal Dutch Shell's Prelude floating LNG production facility was towed from South Korea to waters near Australia late last month. Analyst Saul Kavonic from Wood Mackenzie added in his note that, "whichever project starts up first will end up taking some of the neighboring gas and producing more gas overall. So it's a case of 'whoever sucks first will suck most.'"
Inpex says it currently has more than 70 projects in more than 20 countries. That makes it Japan's largest oil and gas exploration and production company.
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1bee9c1efa05b61715c77bd460d4d3d4 | https://www.cnbc.com/2017/07/07/states-say-remington-settlement-doesnt-go-far-enough-want-it-overturned.html | States say Remington rifle settlement doesn't go far enough, want it overturned | States say Remington rifle settlement doesn't go far enough, want it overturned
An attendee sights a rifle in the Remington Arms booth on the exhibition floor of the 144th National Rifle Association (NRA) Annual Meetings and Exhibits at the Music City Center in Nashville, Tennessee, U.S., on April 11, 2015.Daniel Acker | Bloomberg | Getty Images
Attorneys general from several states and the District of Columbia are asking a federal appeals court to overturn a landmark class action settlement involving millions of allegedly defective Remington rifles, because they say the agreement does not go far enough.
The settlement, approved by a federal judge in Kansas City in March, is aimed at fixing some 7.5 million Remington firearms, including the iconic Model 700 rifle. A 2010 CNBC documentary investigated allegations that Remington covered up a design defect that allows the guns to fire without the trigger being pulled. Remington has steadfastly denied the allegations, continues to say the guns are safe, and says the hundreds of injuries and dozens of deaths that lawsuits have linked to the alleged defect are all the result of user error.
Nonetheless, the company agreed in 2014 to replace the triggers in millions of the guns, free of charge, under the class action settlement. The company said it was settling the case to put the matter behind it once and for all. But from the start, critics have argued the settlement deliberately downplayed the risk, and would leave millions of dangerous guns in the public's hands while relieving Remington of the liability.
VIDEO0:3900:39Remington hits back at rifle settlement criticsNews Videos
That is the argument in the new brief filed in the Eighth United States Circuit Court of Appeals by Massachusetts Attorney General Maura Healey on behalf of her counterparts in New York, California, Hawaii, Maine, Illinois, Maryland, New Mexico, Pennsylvania, Rhode Island, Vermont, Washington State, and the District of Columbia.
"Under the settlement, fewer than 25,000 (0.3%) of those guns will be fixed," the brief says. "The defect at issue in this settlement presents a serious and continuing public safety problem."
Two Remington Model 700 owners, Lewis Frost of Louisiana and Richard Denney of Oklahoma, formally appealed the settlement last month, saying the process to notify customers of their rights under the settlement was woefully inadequate, and that the benefits β which are as little as a $10 product voucher for some of the oldest models β were not nearly enough.
"This result cannot stand in a case involving a defective product currently in use that can kill and maim," Frost and Denney said in a court filing last month.
At the time the settlement was approved, only about 22,000 gun owners had filed claims to get their guns retrofitted, a process that is on hold because of the appeal.
But an attorney for the class action plaintiffs, Eric Holland of St. Louis, said the number of claims have grown to 28,641 as of June 27. In an e-mail to CNBC, Holland accused the attorneys general of having a hidden agenda.
"If this group really cared about the people in their states, wouldn't they be dedicating their resources to educating the public about this trigger fix and encouraging claims instead of press releases, court filings, and sending people to court on the government's dime?" Holland wrote to CNBC. Attorneys for Remington did not respond to a request for a comment from CNBC.
Remington has argued in court that the settlement is fair. Plaintiffs' attorneys, who stand to collect $12.5 million in fees under the agreement, said that despite the relatively low claims rate, the settlement should be allowed to go forward because of the lives it would potentially save.
The parties have until July 14 to respond to the appeal.
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59db439a237bcdc4aed173c49623d9cd | https://www.cnbc.com/2017/07/07/strategist-tom-lee-weighs-sees-bitcoin-going-as-high-as-55000.html | Top Wall Street strategist sees bitcoin 'cannibalizing' gold, worth as much as $55,000 | Top Wall Street strategist sees bitcoin 'cannibalizing' gold, worth as much as $55,000
VIDEO0:4900:49First major Wall Street strategist weighs in on bitcoin, sees it worth as much as $55,000News Videos
Fundstrat's Tom Lee on Friday became the first major Wall Street strategist to formally lay out his views on bitcoin.
The digital currency could be worth as much as $55,000 by 2022, Lee said in a report titled "A framework for valuing bitcoin as a substitute for gold."
"We believe one of the drivers [of bitcoin] is crypto-currencies are cannibalizing demand for gold," Lee said in the report. "Based on this premise, we take a stab at establishing valuation framework for bitcoin. Based on our model, we estimate that bitcoin's value per unit could be $20,000 to $55,000 by 2022."
traded near $2,540 on Friday. The digital currency has more than doubled in value for the year, and high interest prompted a Goldman Sachs technical analyst, a team of Morgan Stanley analysts and Citi researchers to issue reports on bitcoin or the blockchain technology behind it in the last few months.
However, Lee is the first widely followed market strategist to issue a report dedicated to predicting bitcoin's price. Lee also happens to be the most bearish strategist on U.S. stocks currently. He was JPMorgan Chase's chief equity strategist from 2007 to 2014 before co-founding Fundstrat Global Advisors, where he is managing partner and head of research.
The strategist's case for bitcoin is a basic supply-and-demand story, similar to the argument other proponents of bitcoin use when playing up its future as "digital gold."
Gold's market value of $7.5 trillion is exponentially greater than bitcoin's $41 billion. But Lee pointed out the precious metal's supply "is surging as mining soars to all-time highs," while the number of available bitcoins is rapidly approaching its inherent 21 million-coin limit.
"A simulation shows that this will slow even further to less than 1.5% growth by ~2020, meaning bitcoin supply will grow even slower than gold," Lee said.
Bitcoin is also theoretically a better way to store value, proponents contend, since governments can easily decrease a currency's worth by printing more of it.
The constraints on bitcoin's supply and the potential worth of the digital currency mean there will be high demand for a limited product, driving up the price. Bitcoin has already surged from below $1,000 on Dec. 31 to briefly top $3,000 in June.
Lee also expects investors could look at bitcoin as a substitute for gold, and his model shows the digital currency could be valued at $20,300 by 2022. Adding more variables to the model puts the value of bitcoin in five years in a potential range of $12,000 to $55,000.
"In other words, substantial upside exists in owning cryptocurrencies here," Lee said.
He also expects central banks will consider buying the digital currencies if the total market value tops $500 billion. Including bitcoin and its rival ethereum, the value of all cryptocurrencies hovers around $100 billion, according to CoinMarketCap.
"In our view, this is a game changer, enhancing the legitimacy of the currency and likely accelerating the substitution for gold (by investors)," he said.
Lee noted a Bloomberg news report that central banks have looked into the possibility of owning digital currencies.
In March, Federal Reserve Governor Jerome Powell cautioned in a speech about the potential challenges for a central bank to issue a digital currency, including privacy.
To be sure, digital currencies such as bitcoin often swing wildly and operate in unregulated markets. While the lack of regulation is what has attracted many buyers, many consider bitcoin the "Wild West." Three years ago, Mt.Gox, the largest bitcoin exchange then, filed for bankruptcy and said it lost 750,000 of its users bitcoins and 100,000 of the exchange's own.
The future of bitcoin is also in question. This summer, the digital currency could split if developers don't agree on the same system to upgrade bitcoin.
Lee acknowledged bitcoin's volatility in his report, noting that annualized bitcoin volatility is 75 percent, "substantially higher than gold's 10%. But as noted, gold's volatility approached 90% from 1971 to 1980 as the U.S. abandoned the gold standard β hence, we expect this to improve over time."
VIDEO2:2102:21Here's what sets ethereum apart from its rival bitcoinDigital Original
Correction: This story has been updated to reflect the market value of bitcoin is $41 billion.
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64e359a0a78624490d590e20e729f1cb | https://www.cnbc.com/2017/07/09/dalian-wanda-to-sell-hotels-tourism-projects-to-sunac-for-9-point-3-billion.html | Dalian Wanda to sell hotels, tourism projects to Sunac for $9.3 billion | Dalian Wanda to sell hotels, tourism projects to Sunac for $9.3 billion
China's Dalian Wanda said in a statement that it will sell 76 hotels and 13 cultural and tourism tourism projects to Sunac, a Tianjin-based property developer for 63.18 billion yuan ($9.29 billion).
The transaction will enable the two companies to play to their advantages, the statement added.
Dalian Wanda chairman Wang Jianlin told business magazine Caixin that the proceeds from the sale will be used to reduce Wanda's debt pile and help the company move toward "asset light" operations.
"The group's debt-asset ratio will drop dramatically," Wang told Caixin.
Wang Jianlin, Chairman of the Dalian Wanda Group.ChinaFotoPress | Getty Images
The property-to-entertainment group said it will sell 76 of its hotels in China to Sunac for 33.6 billion yuan ($4.94 billion) and 91 percent of its stake in 13 cultural and tourism projects for 29.58 billion yuan ($4.35 billion).
Shares of Wanda Hotel Development spiked over 150 percent on the news and were 74.1 percent higher at HK$1.01 at 1:36 p.m. SIN/HK.
The cultural and tourism projects include theme parks, which Wang appeared to be bullish on last year when competitor Shanghai Disneyland opened.
"At Wanda I always say we want to ensure Disney is not profitable for 10 to 20 years in this business segment in China," Wang told state television station CCTV in May 2016.
In 2015, Wang told CNBC that he is confident Dalian Wanda can defeat Disney and Universal Studios, the latter of which is building a theme park in Beijing.
Despite the impending change in ownership, Dalian Wanda said in its statement it will still manage and operate the theme parks that will also remain under the Wanda brand.
The Wanda hotels to be sold include Beijing Wanda Hotel.
Sunac shares in in Hong Kong were suspended from trade on Monday ahead of an announcement of a "substantial acquisition."
Controlled by Wang, who is one of China's richest men, Dalian Wanda is reportedly one of several large overseas assets buyers that China's banking regulatory is probing. It is China's largest commercial property developer.
Sunac meanwhile is also one of China's largest developers. Founded by billionaire Sun Hongbin, the company has expanded quickly to more than 44 cities in 2016 from four in 2011, according to Bloomberg. Sunac has already made 14 acquisitions this year, excluding the latest one, the news agency added.
Sunac was in the spotlight recently for its $2.2 billion investment into cash-strapped tech company, LeEco, announced in January.
Disclosure: NBCUniversal is the parent company of Universal Studios and CNBC.
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c3f604665a5817d6204697974a209459 | https://www.cnbc.com/2017/07/09/how-china-buys-the-silence-of-the-worlds-human-rights-critics.html | How China buys the silence of the world's human rights critics | How China buys the silence of the world's human rights critics
As Nobel Peace Prize laureate Liu Xiaobo struggles on his sick bed in a heavily guarded Chinese hospital, leaders of G20 nations gathered in Germany made no official mention of the activist.
It was a telling sign of the waning momentum of China's human rights movement: the name of China's most famous political prisoner was not even officially brought up as Chinese President Xi Jinping and German Chancellor Angela Merkel instead bonded over pandas and soccer.
Protestors prepare to post postcards written to terminally-ill Chinese Nobel laureate Liu Xiaobo on July 5, 2017Anthony Wallace | AFP | Getty Images
Rather than upset the leader of the world's second-largest economy and a major global ally, officials of foreign nations would rather keep their lips buttoned in public and focus on trade and bilateral ties.
This is in stark contrast to the days when international pressure could make a difference in the fate of individuals fighting for rights in China β when Beijing was still sensitive enough to listen.
More from the South China Morning Post:What the next Korean war will be like Sick Chinese dissident 'can be moved safely for overseas treatment' Face to face again, Xi and Trump paper over differences
Late Chinese astrophysicist Fang Lizhi, who was among the "black hands" blamed for instigating the 1989 Tiananmen Square protest, was welcomed into the Beijing embassy on June 5 that year as a guest of former US president George Bush with the help of veteran sinologist Perry Link. Fang and his wife hid in the embassy for 13 months before going on to live as exiles in the US. They also could be thankful for the negotiations of diplomat Henry Kissinger and Brent Scowcroft, who was then the US national security adviser.
Former political prisoner Wei Jingsheng, who spent about 18 years in jail, was released at the request of former US president Bill Clinton. Wei was deported by Beijing in 1997 after being granted medical parole, and headed to the US.
"The effect of foreign pressure on the [Chinese] government is diminishing," said Link, a comparative literature and foreign languages professor at the University of California at Riverside who co-translated the Tiananmen Papers, which detailed the Chinese government's response to the 1989 democracy protests. He also translated into English "Charter 08", the document that Liu co-authored calling for political reform in China.
Given the treatment of Liu and the government's massive crackdown on lawyers and activists since July 2015, observers say the disappearing pressure over China's rights record could in turn embolden Beijing to turn the screws further on dissident voices.
VIDEO2:3502:35China strengthens Great Firewall with new online regulationsSquawk Box Asia
Maya Wang, a senior researcher with Human Rights Watch's Asia division, warned that the Chinese government would be "rewarded and encouraged [to continue] its impunity in mistreating political activists".
"If G20 nations fail to publicly press the Chinese government to free Liu, they would lose credibility in pressing for human rights everywhere, not just in China," Wang said.
China has gathered economic strength and political influence as its authoritarian regime expanded in the years following the 2007-08 global economic crisis.
Steve Tsang, director of the SOAS China Institute in London, said: "The size and importance of the Chinese economy, with all that entails, meant others are now much more careful in raising human rights issues with Beijing."
Recent examples of foreign governments putting economic interests ahead of lobbying for rights in China indeed suggest the nation is rich enough to mute critics. Cases in point are the financially embattled Greek government's vetoing of a European Union statement condemning China's rights record at a UN meeting last month and Norwegian Prime Minister Erna Solberg's refusal last week to comment on calls for Liu's release. Bilateral ties between Norway and China were only normalised in December following a six-year freeze that began when Liu, by then behind bars, was awarded the 2010 Nobel Peace Prize in absentia.
Robert Daly of the Kissinger Institute on China and the United States at the Washington-based Woodrow Wilson Centre, said Beijing was aware its authoritarianism prevented it from gaining the international respect it sought; but it needed to weigh global approval against domestic stability, especially when "[global] concerns over human rights" could be bought off.
"For now, China can be confident that the West will not launch an effective challenge to Beijing's crackdown on free expression," Daly said.
He added that Beijing had also grown "more self-certain" by providing "investment, aid and other international public goods which are winning it international influence, if not admiration".
China demonstrated its unwillingness to put up with any more criticism of its rights record in June last year, when Foreign Minister Wang Yi vented his anger at a Canadian journalist who raised the issue at a joint press conference with the Canadian foreign minister in Ottawa.
"Other people don't know better than the Chinese people about the human rights condition in China and it is the Chinese people who are in the best situation, in the best position, to have a say about China's human rights situation," Wang said, going on to label the journalist's questions "groundless and unwarranted accusations".
Tsang said Beijing "does not feel that foreign powers have any right to put pressure on what it sees as domestic affairs".
"As far as the [Communist Party] is concerned, China's human rights conditions are excellent, and no changes are required, though there would always be scope for the party to take an even stronger leadership role," Tsang said. "If they see no problem, they see no scope for improvement, only scope for the party to tighten control."
Beijing previously appeared less inured to international pressure, which was credited with playing a role in improving the treatment of individual human rights defenders.
In February 2007, Gao Yaojie, a retired gynaecologist best known for her Aids-prevention work during an HIV epidemic in Henan province, was placed under house arrest. However, the local authorities soon bowed to international pressure and allowed her to travel to the US, where she now lives.
In previous decades, Western countries collectively pressured China to improve its rights record, but that was no longer the case, Daly said.
"Since the second world war, the United States and many other free nations have believed that promoting representative governance, open markets and human rights worldwide served their national interests. That commitment seems to be fading, but whether this is a long-term trend or a temporary fashion is uncertain," Daly said.
"Is there still a collective West capable of expressing values or acting in concert in the absence of American leadership? The presidency of Donald Trump and growing nationalism in other nations have called the idea of the West into question. I think the historical validity of "the West" runs deep and that it is profoundly in the West's interest that liberalism remains a global force, but that can't happen in the absence of leadership."
Blind civil rights activist Chen Guangcheng, who set off a diplomatic crisis in April 2012 when he escaped house arrest after surviving extensive torture and fled to the US embassy in Beijing, said he had the international community to thank for being allowed to leave China with his family a month later.
He told the South China Morning Post recently that Liu's situation could be compared to that of Otto Warmbier, an American student who was sentenced to 15 years of hard labour for stealing a propaganda banner during a visit to North Korea last year and who died six days after being released on medical parole last month.
"When democratic countries led by the United States are tolerating or compromising in exchange for cooperation with China, this hurts the interests of civilians living under the authoritarian regime and their own international reputation," Chen said. "It's not that the US is running out of means to pressure China in freeing Liu Xiaobo, but rather if they would play the card on moral grounds serving the nation's founding values."
Although Chen managed to flee China under US' lobbying, he still harbours mixed feelings over his rescue in 2012. Chen said he was first warmly received by the deputy ambassador, who "personally took me into the embassy".
"But I soon felt a change of attitude on the 27th [of April], when [former US president Barack] Obama had a change of heart and decided to "not affect the Sino-US bilateral relationship based on human rights", Chen said.
"No one at that point would stand up [for] human rights and they wanted to get me out of the embassy," he said.
Chinese and US governments negotiated his fate. When he left the embassy six days later, US officials said Chen would have preferred to stay in China but pleaded for help to leave.
Although he was able to depart for the US two weeks after the ordeal, Chen, who now lives in the US, said he felt abandoned after Obama put China and US ties before him.
Gary Locke, who was the US ambassador in Beijing when Chen was seeking refuge at the embassy, urged the US to remain vigilant and outspoken about human rights.
"Concern for human rights is in the DNA of America ... it is unfortunate that [US] President [Donald] Trump is not as forceful on the issue as past presidents, both Democratic and Republican," Locke told the Post.
He called on China to immediately release Liu on humanitarian grounds and allow him to seek medical care overseas with his family.
"That would be the kind and decent thing to do, but that would also enhance China's image in the world," Locke said.
Apart from economic interests, foreign nations rely on China for help in dealing with many other issues, including climate change, the fight against terrorism and resolving the nuclear crisis in North Korea, veteran activist Hu Jia said.
"Hence, they are forced to make compromises to soften their stances over human rights," Hu said.
Calls on China to free rights activists are often met with strong opposition from the government, which has sternly warned Western countries not to "meddle in Chinese domestic affairs".
"Xi Jinping will not want to be seen as caving in to foreign pressure in the run-up to the 19th party congress," Daly said. "He won't want to appear weak."
The exiling of Chinese dissidents in past decades had done nothing to strengthen the rule of law in China or improve civil liberties, he said.
However, Link said "China is much bigger than the Communist Party of China and the motive in China to improve human rights will live longer than the CCP does".
"[Liu Xiaobo's plight] will highlight [China's human rights] issue, at least for a time. But long-term improvement can come only from inside China, including Hong Kong," he said, adding: "There are still plenty of smart and good people in China".
That sentiment was also shared by veteran activist Hu, who said he believed that momentum to improve human rights lay within China.
"Even the darkest darkness cannot stop the light within humanity to shine through," he said. "Humanity even prevailed over the worst, even during the madness of the Cultural Revolution.
"China's real social reform will come from the people themselves," Hu said. "Civil awareness is consolidating as the economy grows and private rights protection is enhancing."
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55778a47298bed01a6c512db64a1cca5 | https://www.cnbc.com/2017/07/10/opec-and-non-opec-production-cuts-can-go-longer-and-deeper-if-necessary-says-russia-energy-minister.html | OPEC and non-OPEC production cuts can go longer and deeper if necessary, says Russia energy minister | OPEC and non-OPEC production cuts can go longer and deeper if necessary, says Russia energy minister
VIDEO3:1303:13OPEC, non-OPEC cuts can go longer and deeper if necessary: Russian oil ministerSquawk Box Europe
OPEC and non-OPEC producers have the capacity to extend and deepen their production cuts should the oil market's situation become even more complex, Russia's Oil Minister Alexander Novak told CNBC on Monday.
"If necessary, we can extend the agreement. If necessary, we can increase the amounts that need to be reduced or on the contrary, we can move to reduce them," Novak said, according to a CNBC translation, on the sidelines of the World Petroleum Congress in Istanbul.
In May, OPEC and allied non-OPEC members, such as Russia, agreed to cap oil production through to March 2018. However, despite OPEC and non-OPEC producers ratifying a deal to extend output cuts, prices have slumped.
Brent crude futures, the international benchmark for oil prices, have tumbled more than 9 percent since the announcement, in part because of the increased production levels of Nigeria and Libya β two OPEC members exempt from cutting output.
Novak argued it was important to remember a precedent had been created which meant OPEC and non-OPEC members could "take any decision that might have a positive influence on the industry."
Kazakhstan's Energy Minister, Kanat Bozumbayev, reportedly told Russia's TASS news agency on Sunday that the country wanted a gradual exit from the OPEC-led deal either one or two months after the agreement is due to expire.
When asked whether the comments from Kazakhstan's energy minister could signal a potential 'free for all' at the end of March 2018, Novak stressed it was "too early" to predict how countries would act from April 1 next year.
"When the first agreement was signed for six months, people immediately started asking me, what's going to happen in six months? And then as soon as we extended it for another nine months everyone is interested in what will happen in nine months. It's an endless and eternal question," Novak said.
VIDEO2:1902:19The oil industry has become more competitive: Russia oil ministerSquawk Box Europe
On Friday, OPEC delegates told Reuters they were encouraged by Russia's openness to discussing changes regarding an OPEC-led deal to curb supplies.
The world's leading exporter and OPEC kingpin, Saudi Arabia, and top producer Russia had previously said there was no immediate requirement for additional measures to support prices.
Several key OPEC ministers are expected to meet with Russian representatives to discuss the situation in oil markets on July 24 in St Petersburg.
Brent crude traded at around $46.82 a barrel on Monday afternoon, up 0.26 percent, while U.S. crude was around $44.32 a barrel, up 0.18 percent.
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d2aaa0a54048f715a82fcd6a1f85744b | https://www.cnbc.com/2017/07/10/trump-russia-headlines-are-leading-to-legislative-paralysis.html | Trump-Russia headlines leading to 'legislative paralysis' that will take down dollar, says Credit Suisse | Trump-Russia headlines leading to 'legislative paralysis' that will take down dollar, says Credit Suisse
President Donald Trump and Donald Trump Jr.Jabin Botsford | The Washington Post | Getty Images
A slew of negative headlines about the Trump administration's relationship with Russia could delay tax reform, hitting the U.S. dollar, Credit Suisse said Monday.
"The prospect of legislative paralysis as a result of these controversies may weigh further on the USD," London-based Credit Suisse analyst Honglin Jiang said in a note titled, "Trump faces new criticism over Russia."
Last week, during the G-20 meeting in Germany, President Donald Trump met with Russian President Vladimir Putin for the first time since the U.S. election. Trump's focus on moving the two countries' relationship "forward" rather than pressing Putin on Russia's interference in the U.S. election drew the criticism of John McCain and other prominent Republicans.
Then over the weekend, Trump's eldest son, Donald Trump Jr., said he met in June 2016 with a Russian lawyer who offered damaging information about then-Democratic candidate Hillary Clinton. In a statement, Trump Jr. said the lawyer's "vague" statements "made no sense" and that his father "knew nothing of the meeting or these events." Music publicist Rob Goldstone told The Washington Post he had arranged the meeting at the request of a Russian client and had attended it.
Questions about ties to Russia have swirled around the Trump administration for months, from document leaks to the resignation of Michael Flynn as National Security Advisor. The latest reports could further distract the Republican majority in Congress, a concern for markets waiting for tax reform.
The U.S. dollar index surged to a 14-year high following Trump's election as traders bet the new administration's pro-growth policies would strengthen the U.S. economy. However, delays in passing a new health-care bill pushed out expectations for tax reform, pressuring the U.S. dollar. The Senate is expected to vote on health care by August.
The U.S. dollar index traded little changed near 96.06 Monday, down nearly 2 percent since the election and off 6 percent year-to-date.
That said, a major weight in the dollar index, the euro, has strengthened in the last several weeks after the European Central Bank signaled monetary policy could begin tightening soon. The euro traded near $1.140 Monday, just off a June 30 high of $1.1445 that marked the highest in more than a year.
The U.S. dollar strengthened Monday against the , hitting a near 2-month high of 114.29 after Bank of Japan Governor Haruhiko Kuroda reiterated the central bank will keep monetary policy easy until inflation can stay above the 2 percent target.
Credit Suisse expects the euro-dollar will climb to $1.150 in the next three months and stay there for the next 12 months. The firm expects the yen to strengthen to 110 against the dollar in three months, and 107 in the next 12 months.
β CNBC's Gina Francolla and Reuters contributed to this report.
VIDEO1:4301:43Trump backtracks on Russia cybersecurity effortSquawk Box
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b46713aad7c3bf46951a66c18f4e2b15 | https://www.cnbc.com/2017/07/11/biggest-state-winners-and-losers-in-competition-for-companies-jobs.html | On the move: Biggest winners and losers in states' battle to lure corporations, jobs | On the move: Biggest winners and losers in states' battle to lure corporations, jobs
It is a good time to raise money in Massachusetts. Start-ups in the Bay State attracted some $5.8 billion in venture capital last year, according to the National Venture Capital Association and research firm PitchBook. That is the best fundraising year in the state since 2007, and it helps Massachusetts to a three-way tie with Pennsylvania and Connecticut for most improved state in the Top States for Business 2017 ranking. Each state rises 10 spots this year, yet it is Massachusetts' foray into the top 10, from No. 20 last year, that is most impressive: It is the state's first top 10 finish since 2011.
Massachusetts has always dominated our Education and Technology & Innovation categories, and this year is no exception β the state takes first place in both. But the big change this year is in Access to Capital, where the state moves to No. 7 from No. 19 last year. We measure a variety of financing methods, but where Massachusetts really shines is in venture capital, where it trails only California and New York.
Massachusetts Governor Charlie Baker, second from left, and GE chairman and former CEO Jeff Immelt, at podium, break ground for new GE headquarters. May 8, 2017Pat Greenhouse | Boston Globe | Getty Images
The improvement is no accident. First-term Gov. Charlie Baker, a former health-care executive, has been focused on improving the state's business climate. He has made progress based on our rankings, but the state still must improve its No. 41 Infrastructure ranking and reel in its high costs in order to join the truly elite.
Pennsylvania notches the best all-around improvement, rising in 5 of our 10 categories of competitiveness. Even so, the Keystone State just barely makes it into the top half, at No. 23.
Pennsylvania's biggest improvement is in Education, where it moves up 11 spots to No. 10, thanks to rising high school test scores and modest progress in modernizing school classrooms. But a sharp divide between rich and poor school districts still plagues the state.
America's Top States for Business 2017
The state improves eight spots to No. 21 in Workforce as more working-age people are moving into the state, and eight spots to No. 34 in Economy as the housing market begins to recover. But Pennsylvania still struggles with high costs, and its infrastructure is in the bottom tier.
Also jumping 10 spots overall this year is Connecticut, but the move seems a bit less impressive when you consider that the state only moves to No. 33 from last year's No. 43. The move is thanks in large part to a 15-place jump in Education, to No. 3 from No. 18. Even that can be deceiving, however. The improvement in the category is primarily due to improved high school test scores. The state maintains strong support for its Kβ12 schools, but a change in the school funding formula is on the table as the Constitution State confronts some serious budget issues.
Despite the overall improvement, Connecticut continues to rank near the worst in Infrastructure and Cost of Living and is facing an exodus of high-profile corporations from the state.
Other big gainers:
No. 9 Tennessee and No. 22 Missouri each jump nine spots on improving economies.An improving Workforce ranking helps New Hampshire rise eight places to No. 18.Economy powers No. 7 Virginia's six-place move.Three states exhibit five-place moves: No. 16 Ohio, No. 25 Maryland and No. 45 Rhode Island. While still moored near the bottom, Rhode Island's finish is the best it has ever done in our 11 years' ranking the states.
The biggest decline in this year's rankings belongs to No. 27 Wyoming, which plummets 14 spots. As the nation's largest coal producer and an important oil state in its own right, the Cowboy State is especially vulnerable to swings in energy prices. The price of Powder River Basin coal fell sharply during much of last year. While it has rebounded a bit this year, it is still down more than 11 percent from its recent highs in 2014. Partly as a result, Wyoming's Economy rank plunges to No. 43 from No. 14 last year.
Also falling in the Economy category is New York, which finishes No. 38 overall β a drop of 11 spots in the ranking β on slowing growth. Another concern for the Empire State is the budget, with state Comptroller Thomas DiNapoli already warning of a revenue shortfall in the fiscal year that just began.
VIDEO1:3501:35These are America's worst states for businessTop States for Business
Illinois does not even have a budget β and hasn't had one for three years. The Land of Lincoln's fiscal dysfunction has begun to clearly outweigh its inherent business advantages, dropping the state seven spots, to No. 31, overall.
Another state dropping seven spots is last year's Top State for Business, Utah. A surge in state support for education helped the Beehive State take top honors last year, but it may have been a one-time thing. This marks only the third time in 11 years that Utah has failed to make the top five.
And North Dakota, whose oil-drenched economy was the envy of the nation not long ago, drops another seven spots, to No. 19, overall this year. With the apparent end to the domestic oil boom, the Peace Garden State's economy contracted by 6.5 percent last year, the worst performance in the nation.
More from Top States for Business:America's Top States for Business 2017: Complete coverageThe 10 best states for jobs in AmericaThe 10 best American states for education
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ba04e956e50e9da6b2d91a32dc7f4422 | https://www.cnbc.com/2017/07/11/blue-apron-aprn-hits-52-week-low-after-northcoast-capital-note.html | Blue Apron closes at new low after analyst slaps on $2 price target | Blue Apron closes at new low after analyst slaps on $2 price target
Traders work on the floor of the Exchange ahead of the Blue Apron IPO on the New York Stock Exchange in New York, June 29, 2017Lucas Jackson | Reuters
Tuesday was another crushing day for Blue Apron on Wall Street.
Shares fell more than 12 percent, hitting a new closing low of $7.14 a share, just above the all-time intraday low of $7.08 a share. The move lower came after Northcoast Research released a note recommending clients sell the stock, placing the target price at $2 a share.
The note from analyst Chuck Cerankosky marked one of the first formal reactions to Blue Apron's June IPO from a Wall Street analyst. Shares have fallen more than 20 percent month to date, amid jitters surrounding the company's valuation and a merger between Amazon and Whole Foods.
"Our financial outlook for the company is one of continued losses," Cerankosky said. "Sales growth seems to be dependent at this time upon promotional discounts."
VIDEO0:5800:58Blue Apron's official options market debutOptions Action
Blue Apron, backed by First Round Capital, SG Growth Partners and Bessemer Venture Partners, lost nearly as much money in the first quarter of 2017 ($52 million, on quarterly revenue of $244 million) as it did in all of 2016 (when it lost $55 million on $795 million in revenue).
Despite investments from technology investors, Cerankosky wrote that Blue Apron "is not a technology company just because orders are received digitally," pointing to its labor-intensive assembly process for each meal kit. Blue Apron might not become profitable even in Cerankosky's model of a best-case scenario for the company.
Still, Blue Apron said in IPO filings that the company relies "on our proprietary technology and data to forecast demand and predict our customers' orders [and] determine the amounts of ingredients and other supply to purchase." That, the company says, will make it more efficient over time.
Many more analysts are likely to share their opinions on the company in the coming weeks, and may or may not agree with Cerankosky.
"When you have a company that's not making money, the anchor for its valuation is very weak," Kathleen Smith, principal at Renaissance Capital, a manager of IPO-focused ETFs, told CNBC last week.
β With reporting by CNBC's Michael Bloom
VIDEO4:2804:28Are Blue Apron and Snap the worst IPOs ever?Fast Money
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2777befc6295dfedecc49e4b5d897b4e | https://www.cnbc.com/2017/07/11/dominion-energy-and-dong-energy-offshore-wind-project.html | Dominion Energy Virginia and Dong Energy team up for offshore wind project | Dominion Energy Virginia and Dong Energy team up for offshore wind project
The Block Island Wind Farm, pictured above, began commercial operations at the end of 2016.Scott Eisen | Getty Images
Dominion Energy Virginia has signed an agreement and strategic partnership with Denmark's Dong Energy to construct two 6-megawatt turbines 27 miles off the coast of Virginia Beach.
In an announcement on Monday, Dominion Energy said that it remained sole owner of the project, and that the two businesses would start to refine agreements for engineering, procurement and construction. The business added that it was the mid-Atlantic's first offshore wind project in a federal lease area.
"Virginia is now positioned to be a leader in developing more renewable energy thanks to the Commonwealth's committed leadership and Dong's unrivaled expertise in building offshore wind farms," Thomas F. Farrell II, Dominion Energy's chairman, president and chief executive officer, said in a statement. "While we have faced many technological challenges and even more doubters as we advanced this project, we have been steadfast in our commitment to our customers and the communities we serve."
Virginia is a member of the U.S. Climate Alliance, a coalition made up of states including California, Hawaii, New York and Oregon, all committed to upholding the Paris Accord and taking action on climate change.
Commenting on the news regarding Dominion Energy Virginia and Dong Energy, Governor Terry McAuliffe said it marked "the first step in what I expect to be the deployment of hundreds of wind turbines off Virginia's coast that will further diversify our energy production portfolio, create thousands of jobs, and reduce carbon emissions in the Commonwealth."
"Today's announcement advances our efforts to build a new Virginia economy that is cleaner, stronger, and more diverse," he added.
At the end of 2016, America's first offshore wind farm, located off the coast of Rhode Island, commenced commercial operations.
According to the U.S. Department of Energy's Office of Energy Efficiency and Renewable Energy, offshore wind resources "are abundant, stronger, and blow more consistently than land-based wind resources."
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b5cbc325949aba401bf56e9edd9dd47c | https://www.cnbc.com/2017/07/11/stocks-amazon-killling-prime-day.html | Amazon's victims: These stocks have lost $70 billion so far this year | Amazon's victims: These stocks have lost $70 billion so far this year
VIDEO0:4100:41The 'Death by Amazon' index is at a four-year low as e-commerce giant hosts Prime DayNews Videos
Amazon stock was lower on Prime Day and some of the retailers it has been crushing were moving higher Tuesday, but the longer-term trend shows its competitors hitting rock bottom.
Amazon's own stock was down about 0.7 percent Tuesday, as the company offered shoppers hundreds of deals on the shopping holiday it concocted to promote its Prime membership and other products. Prime membership provides shoppers with free shipping, Amazon TV programming and other services and deals.
But Amazon, trading 2.6 percent off its all-time high, has made lofty gains compared with its brick-and-mortar rivals. For the year so far, its stock is up 32 percent, while many store chains, such as Macy's and J.C. Penney, are down more than 40 percent.
Bespoke Investment Group created an index of the major retail names it thought would be most hurt by Amazon, called "Death by Amazon," and it was trading at a four-year low as of Monday. The index of 54 stocks is down more than 20 percent on an equal weighted basis this year. But in market cap, the group has lost $70 billion this year alone, while Amazon has gained $120 billion, according to Bespoke.
Some of the retailers in the index edged higher, including Macy's, which was offering free shipping to its customers Tuesday. Kohl's, Costco, TJX, Kroger and Target were also all slightly higher Tuesday. Rite-Aid and Walgreen Boots Alliance were lower.
Most of the stocks on the list are sharply lower for the year, with a few exceptions. HSN, which is in a merger with QVC, was up 14 percent year to date. Wal-Mart, which battled back against Amazon with its purchase of Jet.com, was up about 6 percent so far this year.
"I think [Wal-Mart] got a big bounce from that move. The Jet.com acquisition was taken as a sign the company was going to get serious about online. That was one of the reasons the stock rebounded," said Paul Hickey, co-founder of Bespoke. "It pulled in a little, and it hasn't regained its footing since the Whole Foods news was announced."
Amazon announced a merger last month with grocer Whole Foods Markets, rattling retail stocks, as well as some food companies. Some of those companies were selling off Tuesday, including Kellogg and General Mills.
VIDEO2:1102:11Pro: Amazon a danger to brand names and marketingClosing Bell
Analysts expect Amazon, with supermarket distribution, to affect pricing for a whole raft of packaged foods. It could also be a strong booster of the Whole Foods 365 brand, creating a bigger rival for some name brands.
"I think consumer loyalty towards brands is evaporating. ... This isn't because of Amazon for these companies specifically. Consumers don't necessarily equate quality with these old-style brands anymore," Hickey said.
Another factor, he said, is a rally in the agricultural commodities, which means costs for cereal makers and other food companies will be higher.
As for the "Death by Amazon" index, Hickey said many more names could have been added, such as mall REITs, which have been hurt by online shopping.
But when Bespoke created the index, it chose to include only the most vulnerable retailers. The range of categories shows how broad the Amazon effect has spread. From Vitamin Shoppe to Foot Locker, Bed Bath and Beyond to Dick's Sporting Goods, Amazon has spread pain across the retail spectrum.
Hickey said some retailers were excluded from the list because they either sold Amazon-proof products or had their own developed web strategy, like Home Depot.
Other stocks were merged away and are no longer part of the list, such as Safeway, which combined with Albertsons.
"These are the companies we think are most 'Amazonable,'" he said. "Prime day is on 7/11, and [7-Eleven is] probably the only store that isn't Amazonable."
Hickey said Prime Day is a boon for Amazon, in part because of the Prime membership. "It's the business they are building up. It's the recurring revenues," he said.
For other retailers, it just means future pain.
"In the U.S. retail environment, compared to other countries, there's a ton of overcapacity in terms of square footage in stores," Hickey said. "Until you see some of the spare capacity worked off, it's just not a good environment for the retail sector β and the fact that Amazon is coming after them."
Of the stocks in the index, the worst-performing year to date are Stein Mart, off 75 percent, and Rite-Aid, down 71 percent. Fred's, Tuesday Morning and Ascena Retail are all off more than 60 percent. Hibbett Sports, Zumiez, Genesco, and Smart and Final, are all down more than 40 percent so far this year.
Stocks that are down just single digits this year are Nordstrom, PriceSmart, TJMaxx, Williams-Sonoma, Costco, Big Lots and Walgreen.
VIDEO5:1905:19An antitrust case against Amazon is unlikely: ExpertPower Lunch
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6948c962d348158c251e8c960e662d7c | https://www.cnbc.com/2017/07/11/trump-jr-shares-email-chain-that-set-up-meeting-with-russian-lawyer.html | Donald Trump Jr. releases emails saying he was offered Clinton dirt as part of Kremlin's 'support' for his father | Donald Trump Jr. releases emails saying he was offered Clinton dirt as part of Kremlin's 'support' for his father
VIDEO0:5100:51Donald Trump Jr. releases emails saying he was offered Clinton dirt as part of Russia's 'support' for his fatherNews Videos
Donald Trump Jr. on Tuesday released a chain of emails offering "high level and sensitive information" that would incriminate Hillary Clinton as part of "Russia and its government's support" for his father's presidential campaign.
"If it's what you say I love it," Trump said in part of his response to the possible information in June 2016.
The email exchange was with Rob Goldstone, a music publicist who worked with a Russian musician who has ties to President Donald Trump. It took place before the younger Trump met with a Russian lawyer who reports said was linked to the Kremlin.
Trump Jr.: Here's my statement and the full email chain
Trump Jr.: Here is page 4 (which did not post due to space constraints).
Trump Jr. said he released the emails "in order to be totally transparent" about the June 9, 2016, meeting at Trump Tower with attorney Natalia Veselnitskaya. The New York Times, which first reported on the meeting, was set to report on details of the emails when Trump Jr. chose to release them.
"To put this in context, this occurred before the current Russian fever was in vogue," the younger Trump said. "As Rob Goldstone said just today in the press, the entire meeting was 'the most inane nonsense I ever heard. And I was actually agitated by it.'"
VIDEO2:4202:42Donald Trump Jr. releases email exchange that led to meeting with Russian lawyerSquawk Alley
The meeting matters because a special counsel and congressional committees are investigating Russian attempts to influence the 2016 election and whether the Trump campaign colluded with the Kremlin. The probe has dogged and frustrated President Trump since he took office, and he has denied collusion with Russia.
In an exclusive interview with NBC News that aired Tuesday, Veselnitskaya denied she had Kremlin connections. However, in an email, Goldstone described his contact as a "Russian government attorney."
The email exchange starts on June 3, 2016, six days before the meeting. Jared Kushner, Trump Jr.'s brother-in-law and advisor to then-candidate Trump, as well as then-campaign manager Paul Manafort, attended the meeting.
The email chain Trump shared appears to have been forwarded to Kushner and Manafort. Trump Jr. previously said the pair was not aware of the substance of the meeting before it took place.
The president's legal team has said Trump did not attend the meeting and had no knowledge of it. White House spokeswoman Sarah Huckabee Sanders on Tuesday released a statement from the president regarding Trump Jr. and the emails: " My son is a high quality person and I applaud his transparency."
Goldstone first emailed Trump Jr. on the morning of June 3, saying that the musician, Emin Agalarov, "called and asked me to contact you with something very interesting." Goldstone went on to offer to send the information directly to the elder Trump, though it is unclear if he did so:
The Crown prosecutor of Russia met with his [Agalarov] father Aras this morning and in their meeting offered to provide the Trump campaign with some official documents and information that would incriminate Hillary and her dealings with Russia and would be very useful to your father. This is obviously very high level and sensitive information but is part of Russia and its government's support for Mr. Trump - helped along by Aras and Emin. What do you think is the best way to handle this information and would you be able to speak to Emin about it directly? I can also send this info to your father via Rhona, but it is ultrasensitive so wanted to send to you first.
Trump Jr. responded on June 3:
Thanks Rob I appreciate that. I am on the road at the moment but perhaps I just speak to Emin first. Seems we have some time and if it's what you say I love it especially later in the summer. Could we do a call first thing next week when I am back?
In a June 6 exchange, Goldstone and Trump discussed setting up a call between Emin Agalarov and Trump.
On June 7, Goldstone wrote that Emin "asked that I schedule a meeting with you and The Russian government attorney who is flying over from Moscow for this Thursday." Trump then discussed setting up the meeting "at our offices," Trump Tower in New York.
Goldstone responded:
Perfect...I won't sit in on the meeting, but will bring them at 3pm and introduce you etc. I will send the names of the two people meeting with you for security when I have them later today.
Trump said:
Great. It will likely be Paul Manafort (campaign boss) my brother in law and me. 725 Fifth Ave 25th floor.
On June 8, Goldstone asked to move the meeting time "as the Russian attorney is in court."
Trump Jr. and the White House have repeatedly defended his conduct with the meeting. Earlier Tuesday, he tweeted, "If this nonsense meeting is all they have after a yr, I understand the desperation!"
Trump Jr.: Media & Dems are extremely invested in the Russia story. If this nonsense meeting is all they have after a yr, I understand the desperation!
Critics, however, have called the meeting improper, with some going as far as to call it potentially treasonous.
Trump Jr. has offered to speak to the Senate Intelligence Committee about the meeting.
The New York Times first reported on the meeting on Saturday. At the time, Trump Jr. said it was primarily about an adoption program.
He then acknowledged on Sunday that he was told the lawyer might have information "helpful" to his father's presidential campaign. He denied knowing her name going into the meeting.
He added that she offered information about Clinton, but the attorney's statements were "vague" and "made no sense." He said he determined that she had "no meaningful information," and he discovered that her "true agenda" was to discuss the Magnitsky Act, an American law meant to punish Russian human rights violators that Russian President Vladimir Putin has opposed.
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7a7513768f9fd4340238e5f95f3e5c2c | https://www.cnbc.com/2017/07/12/an-antarctic-iceberg-nearly-the-size-of-delaware--one-of-the-largest-on-record--has-broken-off.html | An Antarctic iceberg nearly the size of Delaware β one of the largest on record β has broken off | An Antarctic iceberg nearly the size of Delaware β one of the largest on record β has broken off
VIDEO1:0601:06The largest Antarctic iceberg on record has just broken offDigital Original
One of the largest icebergs ever recorded broke off from an ice shelf in Antarctica, British scientists announced Wednesday.
The 1 trillion ton iceberg, which is twice of the volume of Lake Erie, broke off from the Larsen C Ice Shelf between Monday and Wednesday, according to Project MIDAS, which has been monitoring the ice shelf. At 2,200 square miles, the chunk of floating ice is nearly the size of Delaware.
Over the past several months, an ever-lengthening and widening crack in the Larsen C ice shelf captivated the world. Now, the 120-mile crack first spotted in 2011 finally made its way back to the sea, "calving" off the massive berg.
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"The iceberg is one of the largest recorded and its future progress is difficult to predict," said Adrian Luckman, a professor of Swansea University and the lead investigator of Project MIDAS. "It may remain in one piece but is more likely to break into fragments. Some of the ice may remain in the area for decades, while parts of the iceberg may drift north into warmer waters."
Previously, he said the iceberg breaking off "will fundamentally change the landscape of the Antarctic Peninsula." The calving reduced the size of the ice shelf by some 12%.
Al Gore tweet
"We have been anticipating this event for months, and have been surprised how long it took for the rift to break through the final few kilometers of ice,". Luckman said. "We will continue to monitor both the impact of this calving event on the Larsen C Ice Shelf, and the fate of this huge iceberg."
Unfortunately, there are no public websites allowing a live view of the iceberg or ice shelf. The development of the rift over the last year was monitored using data from the European Space Agency Sentinel-1 satellites, a radar-imaging system capable of acquiring images regardless of cloud cover, and throughout the current winter period of polar darkness.
"It's the Antarctic winter now, and lack of sunlight means that no optical satellite data is being collected," Luckman said in June.
Scientists obtain radar images from orbiting European satellites using microwave energy to watch the area. But the images themselves reveal nothing, and it is only by special processing of the data that scientists can track the iceberg, Luckman said.
As for how long the iceberg will stick around, it depends on how quickly it moves to a warmer climate, and how quickly it breaks into smaller pieces.
The iceberg β or icebergs if it breaks up ever further β may remain in the region, where the ocean is quite cold, and stick around for years or even decades. Or it could move with ocean currents and winds in a northward direction, where it will be eroded more quickly.
A similar event happened 15 years ago with the dramatic break-up of part of the nearby Larsen B ice shelf.
Ice shelves are permanent floating sheets of ice connected to a landmass, according to the National Snow and Ice Data Center. Since the ice is already floating, the newly created iceberg won't contribute to rising sea levels.
Project MIDAS said there is no evidence to directly link the calving of the iceberg to climate change. However, it is widely accepted that warming ocean and atmospheric temperatures have been a factor in earlier disintegrations of ice shelves elsewhere on the Antarctic Peninsula, most notably Larsen A in 1995 and Larsen B in 2002.
Global warming has pushed temperatures up to 5 degrees higher in the region since the 1950s and could increase up to 7 degrees more by the end of the century, putting more stress on the ice, according to Climate Central.
Regardless of whether climate change is a factor, calving is a natural part of the cycle of ice shelves. Ice flows gradually into the shelf, the shelf expands until stresses become too much, and then icebergs are formed. Whether or not Larsen C will reform is unclear.
Scientists think there is a possibility the remaining shelf is now too fragile to grow back to its former size.
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b1d1933fbdba2ed8fef0f3ab5650e2fe | https://www.cnbc.com/2017/07/12/bitcoin-falls-to-near-one-month-low-amid-bubble-concern-scaling-debate.html | Bitcoin falls to near one-month low with $12 billion wiped off value since record high 30 days ago | Bitcoin falls to near one-month low with $12 billion wiped off value since record high 30 days ago
VIDEO0:5600:56Bitcoin falls to near one-month low with $12 billion wiped off value since record high 30 days agoTech Transformers
hit a near one-month low on Wednesday and has seen more than $12 billion wiped off its value in the last 30 days, amid nervousness in the cryprocurrency market.
The price of bitcoin fell to $2,272.32, its lowest level since June 15, when it slumped to $2,185.96, according to data from CoinDesk. The price did recover on Wednesday slightly to a high of $2,354.41.
It's also significantly off the $3,025.47 all-time high reached on June 11, just over a month ago. In this timeframe, its market capitalization or value has fallen by $12.2 billion.
VIDEO0:5200:52Ethereum's drop is making some say the Crypto-bubble is burstingDigital Original
A major pullback is taking place at the moment in the cryptocurrency world after huge rallies. When bitcoin hit its record high in June, it had seen a more than 600 percent rally since the start of the year. Even with Wednesday's fall, it is still up nearly 450 percent year-to-date.
That has raised concerns about the frothiness in the market at the moment, which could be part of the reason for the pullback. Richard Turnill, BlackRock's global chief investment strategist, earlier this week warned about a potential bubble in cryptocurrencies.
"I look at the charts, and to me that looks pretty scary," Turnill said, according to a Reuters report.
Cryptocurrency traders are also uncertain with some unsure about the future trading pattern for bitcoin.
VIDEO1:1201:12China's central bank has realized that bitcoin is not affecting exchange rates: BTCC CEOSquawk Box Europe
"I'm waiting for more downside before I rebuy, but frankly I'm even having trouble telling what it's going to do, which probably reflects the uncertainty in the market itself," cryptocurrency trader Jason Hamilton, told CNBC via Twitter.
Roy Sebag, who is the CEO of GoldMoney, a platform to let people buy and trade the precious metal, is also a notable investor in cryptocurrencies. But the entrepreneur told CNBC via a Twitter exchange that he sold most of his bitcoin holdings because the market has reached the top.
TWEET
The bitcoin community is also nervous about a planned change to the underlying code of the cryptocurrency's protocol. Bitcoin transactions are taking longer than ever to process because the size of transactions on the blockchain, which is the technology that underpins the cyrptocurrency, is limited.
This so-called "scaling debate" has led to two separate proposals about how to increase the block size and speed up transactions. Transactions by users are gathered into "blocks" which is turned into a complex math solution. So-called miners, using high-powered computers work these solutions out to determine if the transaction is possible. Once other miners also check the puzzle is correct, the transactions are approved and the miners are rewarded in bitcoin.
But there is a big backlog in transactions and the speed at which these are processed is slowing. That's because the rules of bitcoin only allow a certain amount of transactions through in one block.
One solution proposed by Bitcoin Core, a group of developers that guard bitcoin's code, suggests a solution known as SegWit, which is explained here. This would lead to a so-called "soft fork" which would increase the block size. But it could mean less fees for miners, which are the people who verify and process transactions on the blockchain.
VIDEO4:4404:44What is Blockchain?CNBC Explains
These miners are unhappy with SegWit and have suggested an alternative code change known as Bitcoin Unlimited. This would increase the block size significantly, but would also make their version of the bitcoin protocol incompatible with the original version.
As a result, a "hard fork" would take place, splitting the bitcoin blockchain in two, and even resulting in two separate coins. Investors would theoretically then hold some of the original bitcoin tokens, as well as the new Bitcoin Unlimited.
Each proposal requires large support from the participants in the bitcoin's ecosystem, but there is strong disagreement.
BTCC is a massive bitcoin exchange in China which signaled support for the SegWit proposal. Its CEO Bobby Lee told CNBC that he is "confident" a solution will be found, but the uncertainty could be a reason why the bitcoin price has paused for breath.
"Not everyone is on the same page, there are people worried, some may be selling bitcoin," Lee told CNBC by phone on Wednesday.
VIDEO0:0000:00These are the unexpected winners of the cryptocurrency crazeDigital Original
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68f666db1686f1b1fefbcf1b98b71e7b | https://www.cnbc.com/2017/07/12/facebook-takes-down-pages-of-some-legal-alaska-pot-shops.html | Facebook takes down pages of some legal Alaska pot shops | Facebook takes down pages of some legal Alaska pot shops
Denis Balibouse | Reuters
Facebook has shut down pages set up by several businesses licensed to legally sell marijuana in Alaska, severing what some shop owners consider a critical link to their customers.
The social media giant said its standards describe what users can post, and content promoting marijuana sales isn't allowed. The issue has popped up over the last few years in states that have legalized recreational and medical pot, often coming in waves, industry officials said.
Cary Carrigan, executive director of the Alaska Marijuana Industry Association, said the industry has been forced to fight the same battles repeatedly as marijuana gains broader acceptance nationally.
The drug is legal for recreational use in eight states, but it remains illegal on the federal level. It wasn't clear why the crackdown in Alaska happened within the past couple weeks or what specifically prompted it.
But it comes as social media sites grapple with setting boundaries for what users can post. Twitter has announced efforts to address abusive behavior, while Facebook has said it would do more to help keep violent material and hate speech off the platform.
Jana Weltzin, an Anchorage-based attorney who works with the cannabis industry, said pulling Facebook pages of marijuana businesses "has an incredibly negative, chilling effect on the commercial speech of these companies."
TV and radio stations often do not allow marijuana advertising, so social media is a way for businesses to communicate directly with their consumers, she said. In Alaska, rules for pot advertising are unclear and inconsistent, Weltzin said.
Taylor West, deputy director of the National Cannabis Industry Association, said her organization has sought clear guidelines from Facebook without much success.
She suggests affected businesses appeal their account suspensions or deletions to Facebook and press for more information. In the past, that has yielded mixed results, she said.
"In some cases, people never hear back. In other cases, they get their accounts back, fully restored," West said.
For Leah Levinton's pot business, Enlighten Alaska, there was no advance warning that the Facebook page would be taken down.
She wasn't sure how much it has affected the Anchorage business but said the shop has fielded calls from people who saw the page was down and wanted to know if the shop was still open.
"It's just frustrating," she said, noting that the industry already faces a number of restrictions. "We're already so limited that when something else that is almost like a privilege is taken away, it's just like, what do you do?"
She does not want to contact Facebook for fear that her page β with its followers and content β will be deleted. She worries, too, that it's only a matter of time before its Instagram account is shut down. Facebook owns the photo-sharing site.
James Barrett, co-owner of Rainforest Farms in Juneau, said his business pre-emptively took down its Facebook page when it saw what was happening. It has about 2,000 followers and doesn't want to lose them.
He said the business wants to see if Facebook provides more clarity when it comes to pot-related posts.
Rainforest Farms doesn't post prices, gears its advertising to those older than 21, and often uses the site to let people know when they're open, he said.
It has other ways to reach consumers, including a website, an email distribution list and a hotline.
"But a lot of people use Facebook," he said. "It's a tool in their pocket. They want to see what's going on, they're in an area. They rely on Facebook for that kind of stuff."
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adfcabdad73f9ea93594edb793560cf5 | https://www.cnbc.com/2017/07/12/imf-lagarde-financial-crisis-janet-yellen.html | I wouldn't rule out another financial crisis, says IMFβs Lagarde | I wouldn't rule out another financial crisis, says IMFβs Lagarde
VIDEO1:1801:18A financial crisis never comes from where we expect it: IMF's LagardeSquawk Box Europe
The International Monetary Fund's Managing Director, Christine Lagarde, has said that she would not rule out another financial crisis in her lifetime, indicating that comments made recently by Federal Reserve Chair Janet Yellen may have been premature.
"There may, one day, be another crisis," Lagarde told CNBC Tuesday on the sidelines of a joint conference with the IMF and the Croatian National Bank in Dubrovnik.
Lagarde's comments responded to a statement made by Yellen a fortnight earlier in which she said she does not expect to see another financial crisis in her lifetime.
"I plan on having a long life and I hope she (Yellen) does, too, so I wouldn't absolutely bet on that because there are cycles that we have seen over the past decade and I wouldn't exclude that," Lagarde said.
She, however, noted the unpredictability of financial crises and said that finance ministers and policymakers should act with caution to prepare for such eventualities.
VIDEO3:3803:38Monetary policy-wise, every region is in a different place at present: LagardeSquawk Box Europe
"Where it will come from, what form it takes, how international and broad-based it will be is to be seen, and typically the crisis never comes from where we expect it," she added.
"Our duty, and certainly the message that we give to the finance ministers, to the policymakers, is 'be prepared'. Make sure that your financial sector is under good supervision, that it's well regulated, that the institutions are rock-solid, and anticipate at home with enough buffers so that you can resist the potential crisis."
Janet Yellen is to outline her Monetary Policy Report to Congress later Wednesday in a meeting which is also likely to also pose questions about the Fed's "tapering" plans and her own future at the central bank.
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180411e7d8cbb7845bb4da960236c862 | https://www.cnbc.com/2017/07/12/mark-zuckerberg-former-gold-mine-in-south-dakota.html | Mark Zuckerberg visits an old gold mine where scientists now study atomic particles | Mark Zuckerberg visits an old gold mine where scientists now study atomic particles
When Mark Zuckerberg said he planned to travel to all parts of the U.S. to meet more Americans and learn about their lives, he wasn't kidding.
Zuckerberg on Wednesday traveled to a former gold mine -- located a mile underground in South Dakota -- that's now home to physicists and other researchers looking into things like neutrino particles and anti-matter.
"We're live from a mile underneath the earth's surface," Zuckerberg said during a video streamed to his Facebook page.
The Facebook CEO made the trip to the Sanford Underground Research Facility to champion the work of scientists and encourage more people to pursue research careers.
"I hope more people who are watching this think about going into scientific research," Zuckerberg said during the video, which has been watched by more than 1 million people.
The visit -- made via a roughly 10-minute elevator ride -- was also undertaken to highlight communities whose economies have been disrupted by globalization.
"There are a lot of places that have had their economies focused on natural resources or on the land that are shifting to modern knowledge economies," Zuckerberg said, as he stood in what he said had been one of the world's largest gold mines.
The trip was part of what Zuckerberg in the video called his "year of travel," an effort to see all the U.S. states he hasn't yet visited by the end of 2017.
Announced in January, shortly after President Donald Trump was elected and after what Zuckerberg had called "a tumultuous last year," the trip's goal is "to get out and talk to more people about how they're living, working and thinking about the future."
At the time, Facebook faced heavy criticism from those who said fake news on the site helped elect Trump.
The Facebook founder this week was clad in his usual attire of blue jeans, gray T-shirt and gray Nike sneakers with a black swoosh -- plus one extra item: A miner's helmet with a built-in lantern flashlight.
As the video camera rolled, he discussed the facility's experiments on matter and anti-matter with several scientists.
He also spoke with another worker there who had toiled at the site years ago when it was still a gold mine.
As he did, Zuckerberg noted the benefits that are possible in moving away from an industrial or agricultural-based economy.
"Rather than fighting over resources...with a knowledge economy that's not the case. You learn something new, you discover something and everyone can benefit," Zuckerberg said.
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f582edacaa06a18c0d6773504c64729a | https://www.cnbc.com/2017/07/12/serena-williams-on-motherhood-and-money.html | Serena Williams on motherhood and money | Serena Williams on motherhood and money
VIDEO1:3701:37Here's how tennis superstar Serena Williams has built a brand off the courtCareers
She's one of the world's highest-paid athletes, but Serena Williams says money wasn't a motivator.
Over the course of her career, the 35-year-old has earned tennis Grand Slam titles, Olympic gold medals and more than $84 million in prize money on top of a slew of endorsement deals and multimillion-dollar partnerships. She is the only woman to land on Forbes' 2017 list of The World's 100 Highest Paid Athletes (at No. 51).
"I just played for the love of the sport," Williams said. "I've never played for money. Not once did I think about a check."
Of course, the checks have poured in. The superstar athlete has signed deals with Puma, Nike, Delta, Gatorade, IBM and JPMorgan Chase among others.
But Williams said her father Richard Williams' hands-off approach when it came to money encouraged her to learn about finance early on.
"Since I was a teenager I've made every financial decision in my life, and I've had to learn how to make good ones," she said in a conversation with Maverick Carter in an episode of "Kneading Dough," a new series by Chase and digital media company Uninterrupted.
When she received the first check in the amount of $1 million, she simply deposited it directly into her account. "I didn't touch it," she said. "I should have taken a picture of it, but selfies didn't exist back then."
Serena Williams of the United States returns a shot to Kiki Bertens of the Netherlands during their Women's Singles Second Round match on Day Three of the 2015 US Open.Getty Images
Williams, along with sister Venus, has also been successful in their fight to narrow the gender pay gap in their sport.
The tennis great, who is expecting her first child this fall with Alexis Ohanian, the co-founder of Reddit, said her hope is to further that goal for the next generation of women players.
"If my daughter were to play in a sport, and she was able to have ... equal pay or equal rights, that would be a success," Williams said. "If not, I would want her to speak up for it."
Williams shared the lessons she learned, the role money has played in her life and her hopes for child in the latest episode of the "Kneading Dough" series. Earlier episodes featured Cleveland Cavaliers' superstar LeBron James and Draymond Green of the Golden State Warriors.
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8379fe86e1dbba80f1b4d7cc26f4b9cc | https://www.cnbc.com/2017/07/12/uber-2017-earnings-bookings-up-losses-down-report-says.html | Uber's financials saw an uptick this year, report says | Uber's financials saw an uptick this year, report says
Uber head of global operations Ryan Graves (R) eats with fourth grader Frederick Dozier during Cooking Matters, a nutrition class taught by 18 Reasons, a local partner of Share our Strength at Glen Park Elementary School in San Francisco, California, December 10, 2014.Beck Diefenbach | Reuters
Despite a recent HR crisis and looming trial with , Uber's business improved so far this year, according to a report Bloomberg.
The preview of Uber's second-quarter results, shared on a conference call with investors, indicate that Uber is collecting more money in fares and is narrowing losses, people familiar with the matter told Bloomberg.
Q2 bookings grew more than 10 percent from last quarter, compared with 9 percent Q1 growthQ1 loss (before interest, taxes and stock-based compensation): $708 million, down from $991 million in the prior quarter
But profitability remains elusive, Bloomberg reported, as Uber spends heavily on autonomous driving research, expansion in Asia and swelling headcount. And Uber has plenty of other issues to focus on, including an intellectual property battle over its self-driving cars, an uneasy relationship with drivers, and a dearth of executive leadership.
Waymo has accused a former Uber engineer of using in Uber's self-driving car designs. But while no formal arrangement has been made, Uber's lawyers noted that the company is in court-mandated settlement discussions with Waymo. The case is similar to other cases that have settled out of court, according to Bloomberg's sources.
(Waymo told CNBC it still believes it has "strong evidence to put in front of a jury" in the case.)
Ryan Graves, , did not reveal much about the , but did focus on the company's to appease drivers, Bloomberg said.
For more on the story, see the full report at Bloomberg.com.
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ee162a11a458bf0fb50330ce02d4bb90 | https://www.cnbc.com/2017/07/12/why-this-investor-is-shorting-the-us-stock-market.html | Why this investor is shorting the US stock market | Why this investor is shorting the US stock market
VIDEO2:1502:15Why this CIO is shorting the USSquawk Box Europe
U.S. stock markets aren't offering the best opportunity and investors should taking bets against them, a chief information officer at a London-based investment manager has told CNBC.
Patrick Armstrong, the CIO at Plurimi Investment Managers, believes that very high valuations, an expected tightening in monetary policy and too much optimism over tax cuts and new fiscal spending should leave investors cautious on the United States.
"Valuation doesn't matter in the short term but at current CAPE (cyclically adjusted price to earnings, which gives a more clear indication of a stock price in comparison to average earnings over the last 10 years) of 29 times, U.S. equities have historically delivered negative real returns over periods of two to five years," he said in an investment outlook published earlier this month.
The U.S. Federal Reserve has begun normalizing its policy in the wake of improved economic growth and low unemployment levels. According to Armstrong, the easy monetary policy of the past had boosted equities but this might change with the Fed's plans to hike rates and reduce its balance sheet.
"I think there was a clear warning in the last (meeting) minutes talking about risk premium, price earnings and investors haven't acknowledged it, but when the Fed starts worrying about equity markets, as an equity investor they've given you that warning," he told CNBC on Tuesday.
The third reason to be "short" β where a trader takes a bet that prices will fall - on U.S. equities is the government's plans on fiscal policy. President Donald Trump promised tax cuts and big infrastructure spending, which made U.S. equities rally since he took office last November. However, such policies are yet to reach the consultation stage and doubts have emerged over the president's ability to deliver.
In the Plurimi investment outlook, the company says that it has sold stock of Apple, Alphabet and Microsoft since last month. It also has a short position on the S&P 500 and the Russell 2000, but is bullish on U.S. biotech, health care and telecoms.
VIDEO3:4403:44Expect next Fed rate hike in December: FidelityStreet Signs Europe
Speaking to CNBC Tuesday, Armstrong suggested that investors aren't listening to the U.S. Federal Reserve. "What investors are completing underestimating is how low the bar is for the United States Federal Reserve. They have told us what they intend to do, the markets don't believe any of it," Armstrong said.
"The Fed says it's going to hike again this year, markets says 50-50. The Fed says three, four times next year, the market says it's not going to happen at all," he added.
U.S. Fed Chair Janet Yellen is due to address Congress on Wednesday and Thursday. Market analysts believe that Yellen will reiterate that the central bank is on track to continue raising rates.
"We expect Yellen to present a relatively upbeat outlook and continue to guide market participants toward the commencement of balance sheet normalization as well as another rate hike by yearend," Deutsche Bank analysts said in a note on Tuesday.
According to a Reuters poll, about 45 percent of economists expect another rate hike at the December meeting, but 55 percent doubt that there will be any change in policy at that time. As we move into 2018, most people see higher chances of policy changes.
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6c81b8eef7f174dbe201823749ce3dbb | https://www.cnbc.com/2017/07/12/yellens-surprise-comments-jolt-bond-market.html | Yellen's surprise comments jolt bond market | Yellen's surprise comments jolt bond market
VIDEO1:1201:12Yellen's surprise comments jolt bond marketNews Videos
The bond market's rally picked up steam when Fed Chair Janet Yellen's testimony was taken to mean the central bank won't be hiking rates all that much.
The gains started Tuesday with the surprise release of Donald Trump Jr.'s emails on his meeting with a Russian lawyer that suggested the Russian government supported his father's campaign.
The testimony released for Yellen's appearance before a House committee Wednesday morning highlighted that the Federal Reserve believes it is not that far from the neutral rate. While some strategists said the comments were not particularly new, Fed Governor Lael Brainard discussed the issue Tuesday and the market took her commentary as highly dovish.
The neutral rate is the level where the Fed's benchmark rate does not either boost or hold back the economy.
"That's what the market thinks, but I think that's flawed thinking. Everything she's said before is boilerplate on the neutral rates," said George Goncalves, head of fixed income strategy at Nomura. "I feel like there's some extrapolation from Brainard's comment yesterday. People were thinking she's confirming what Brainard said. That's wrong, in my thinking. ... The Fed still thinks they're not at neutral and they'll be heading toward it. On top of that, they think it will rise further."
Economists at Goldman Sachs, however, did see the comment as slightly dovish since Yellen confirmed she expects the neutral rate to rise but stay below historic levels.
Bond prices jumped and yields moved lower when Yellen's testimony was released, as traders responded to the headline, as well as another from Yellen that suggested more uncertainty about the course of inflation than her previous remarks.
"There is, for example, uncertainty about when β and how much β inflation will respond to tightening resource utilization," she said in the testimony.
The Fed has been telling the market that the drop in inflation is transitory.
"It's a small step away from inflation is transitory. That's what the market is responding to," said John Briggs of NatWest Markets.
VIDEO5:3205:32Yellen: Premature to say we are not on the path of 2% inflationSquawk on the Street
Later in response to a question, Yellen told the House committee that the Fed is monitoring inflation carefully. "Temporary factors appear to be at work. It's premature to reach the judgment that we're not on the path to 2 percent inflation over the next couple of years. As we indicate in our statement, it's something we're watching very closely, considering risks around the inflation outlook." she said.
She added that monetary policy is not on a preset course. "We're watching this very closely and stand ready to adjust our policy if it appears the inflation undershoot appears consistent."
The 10-year yield dipped below 2.30 percent briefly, and was at 2.32 percent as Yellen spoke to Congress. The yield had been at about 2.38 percent before revelations Tuesday that Trump Jr. was told in an email that he would be given disparaging information on Hillary Clinton, as part of the Russian government's support for President Donald Trump's campaign.
"I think the narrative of where we're going to continue to see the Fed tightening at all costs is being questioned at the moment," said Ian Lyngen, head of U.S. rates at BMO.
The move lower in yields is a sharp contrast to the recent move higher in global rates. The yield on the German bund also moved sharply lower. Global rates had been rising on the theory that central banks are heading to tighter policy, with the Fed taking the lead.
"Momentum measures shifted. We were oversold and reversed abruptly," said Lyngen, when the emails were released by Trump's son. That move Tuesday set up the Treasury market for more buying, which sends rates lower and bond prices higher.
"I think the 2.30 level [on the 10-year yield] is important. It's been a focal point in recent months. The 200-day moving average comes in at 2.26 percent and that's going to be a difficult level to break without something softer in terms of data or a stronger 10-year auction," Lyngen said. The Treasury is scheduled to auction $20 billion of 10-year notes at 1 p.m.
"We're going to see how the auctions are being taken down. I can't help but imagine the events of this morning are supportive of the 10-year and 30-year supply," he said.
Lyngen and other strategists said the market is also concerned about the latest developments in the investigation into the Trump campaign's ties to Russia.
"I think the political uncertainty associated with the Russia election probe is adding an underlying bullish tone to the Treasury market as well," said Lygen. "I think [10-year yield] is not going to get back to 2.65 if there's all this uncertainty. It's not so much if this leads to significant legal proceedings or not. It's more does it become a situation where Trump is considered to be so bogged down with the scandal issues that he becomes an ineffective president."
VIDEO3:3803:38Monetary policy-wise, every region is in a different place at present: LagardeSquawk Box Europe
Correction: Donald Trump Jr. released emails on his meeting with a Russian lawyer on Tuesday. An earlier version misstated the day.
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ae3e4adc8e9adf9b02194a12cbc94d0e | https://www.cnbc.com/2017/07/13/drone-racing-league-offers-100000-to-this-years-champion.html | Drone racers will compete in abandoned malls and stadiums for $100,000 prize | Drone racers will compete in abandoned malls and stadiums for $100,000 prize
VIDEO1:4601:46Drone racers will compete in abandoned malls and stadiums for $100,000 prizeDigital Original
There's $100,000 on the line for the winner of this year's Drone Racing League.
Sixteen competitors will travel the world to fly their drones on different courses, but only one will walk away with the jackpot. All sorts of courses are planned, from abandoned shopping malls to huge professional sports stadiums, where racers will fly drones up and around obstacles.
These aren't cheapo drones picked up in toy stores, either. Models cost between $500 and $1,000 and require expert hand-eye coordination and expert depth perception, Nicholas Horbaczewski, CEO of the Drone Racing League, told CNBC.
Pilots fly the drones wearing headsets that allow them to see in a first-person perspective, and most are in their mid-20s.
Check out the video above for a closer look.
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57cd1a33115bffe6466341804e7a21d5 | https://www.cnbc.com/2017/07/13/earnings-season-sectors-to-watch-and-risks-for-second-half-of-the-year.html | Trader Talk | Trader Talk
Diego J. Robles | The Denver Post | Getty Images
Earnings season begins unofficially Friday. Here's what to look for:
The stock market is holding up because the global economy is improving and earnings are improving. The market turned around in the second quarter of 2016, which is when the earnings recession came to an end, after earnings declined for five straight quarters. The turnaround has been impressive and this is the main reason stocks have moved to new highs:
S&P 500 earnings(Year-over-year)2016Q1: down 6.7 percentQ2: down 3.1 percentQ3: up 2.8 percentQ4: up 5 percent2017Q1: up 14 percentQ2: (est): up 7 percentQ3: (est) up 8 percentSource: Factset
Those second- and third-quarter numbers will go up β most likely they will be above 10 percent. The market is betting on it.
The market is relying on significant earnings growth from its two largest sectors: technology and financials, and a big boost from its most beaten-up sector, energy.
Q2 earnings: What matters(estimates)Technology: up 11.2 percentFinancials: up 7.5 percentEnergy: up 600 percentSource: Thomson Reuters
Those three sectors account for 83 percent of the earnings gains traders are expecting for the quarter.
"Semiconductors have been on fire, and that's a big boost for tech," David Aurelio from Thomson Reuters told me. "Bank estimates have come down a bit because rates have not moved up as much as expected, but they are still expected to post gains. But the big boost is coming from oil stocks, which hit rock bottom in the first quarter of last year."
The largest risk is in energy. About 40 percent of the growth in earnings is coming from this one group, according to Aurelio, which is a lot, considering energy is only 7 percent of the S&P 500. Earnings for this group are expected to be up 600 percent.
How could that happen? How could anything be up 600 percent? Because the profits of the big oil companies suffered a historic collapse in the first and second quarters of last year. In the second quarter of 2016, all the energy stocks made roughly $1.26 billion in profits (these numbers are adjusted for market capitalization). For the second quarter of 2017, analysts are expecting them to collectively report earnings of $8.18 billion, according to Thomson Reuters.
And this is where things get a bit dicey. Let's start with energy. Oil stock prices and oil are closely correlated. Oil prices dropped about 20 percent in the second quarter. There is a 93 percent correlation between oil prices and S&P 500 energy sector earnings. Analysts were expecting oil prices to be closer to $60 a barrel by this time, not $40-$45. They had been pricing in much higher earnings for the second quarter. At the start of the second quarter in April, analysts were expecting $10.4 billion in profits for the energy group, but since they have been cutting the numbers almost every day, now down to $8.18 billion.
That's a drop of about 25 percent in expected profits! And you can see what this has done to oil stocks: The main oil ETF (XLE) is down 6 percent since April, after dropping more than 10 percent in the first quarter.
And the numbers are still coming down. Thursday morning, Evercore lowered its earnings estimates for big oil companies by 16 percent for the second quarter and 6 percent for the full year.
Yikes! The key is that analysts have already adjusted for this quarter, so it's the commentary on the third quarter that will move the markets. And expectations are still high for the third quarter. If oil remains close to $40, you'll see the numbers come down for that quarter as well.
Here are other risks to earnings in the second half of the year:
A strong dollar. Technology generated nearly 60 percent of its revenues overseas. Industrials also generate significant profits overseas, so any rally in the dollar β which would make exports more expensive β is a problem. Fortunately, the dollar has been generally weaker in the second quarter (particularly against the euro), though it has been stronger against the British pound and the Mexican peso. Several companies mentioned the effect of a higher dollar as a negative or potential negative in this quarter's earliest round of companies reporting, including Walgreens Boots Alliance, Constellation Brands and McCormick & Co.Higher wages. Janet Yellen, in her congressional testimony Thursday, noted again that the labor market was tight and that this might lead to upward pressure on wages. Margins could come under pressure if wages keep rising. FedEx and AutoZone both noted wage pressure in their recent reports. So did Darden Restaurants: "Restaurant labor was unfavorable 10 basis points as continued wage pressures slightly offset productivity gains."Capital spending. Cash reserves for corporate America are at an all-time high. Spending on buybacks has been reduced slightly this year and spending on capital expenditures has increased. CEO optimism is on the rise: The Business Roundtable's CEO Economic Outlook index reached its highest level in three years. All of this is good news for further capital spending, which would have a positive impact on industrials and materials.Tax cuts. The Trump administration said earlier this week that it was committed to getting tax reform completed sooner rather than later, i.e. this summer.
It's coming at the right time. For earnings, tax cuts are a 2018 event, as no one is raising 2017 estimates on hopes of a tax cut. The problem: Business executives are losing confidence that anything will happen this year. A report from the Tax Council and Ernst & Young indicated that only 26 percent of U.S. business tax executives believe that tax reform will happen this year, down from 48 percent in January.
Will a tax cut really be worth the wait? There is still some premium in the market in expectation of tax cuts for 2018, but how great is not clear. Will it have an impact on earnings? The short answer is yes, depending on the extent of the cut. CFRA Research estimates that 2018 earnings will grow by 12 percent without a tax cut. A cut in the corporate tax rate from 35 percent to 20 percent would improve earnings growth to 20.4 percent, an 8 percentage point improvement. That is significant. A cut to 30 percent would only bring earnings growth to 13.7 percent, a little less than a 2 percentage point improvement.
So the size of the cut matters a lot, and it's likely this may matter more to the market soon.
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36ce7eb78488b8bbea3b424c6afbaf24 | https://www.cnbc.com/2017/07/13/oil-prices-dip-on-high-supplies-improving-industry-efficiency.html | US crude rises 5.2% this week, closing at $46.54, as global appetite for oil looks healthier | US crude rises 5.2% this week, closing at $46.54, as global appetite for oil looks healthier
VIDEO0:4800:48Oil prices hold gains as US rig count rises by 2 to 765News Videos
Oil prices edged higher in volatile trading on Friday as signs of strengthening demand was offset by still-high global stocks and concerns about economic growth.
Benchmark Brent and U.S. WTI crude oil contracts were on track for weekly gains, but fluctuated between intraday gains to losses amid conflicting signals on the supply-demand picture.
Brent crude futures, the international benchmark for oil prices, were up 52 cents, or 1.1 percent, at $48.94 per barrel at 2:35 p.m. (1835 GMT). U.S. West Texas Intermediate (WTI) crude futures rose 46 cents, or 1 percent, $46.54.
Prices briefly pulled back after Baker Hughes reported its weekly count of oil rigs operating in the United States jumped by 2 rigs to a total of 765. The rig count has only dipped twice this year, but has shown signs of plateauing recently.
"It's been a jumpy Friday in the oil market," said Ole Hansen, head of commodity strategy with Saxo Bank, adding that the volatility was "primarily driven by traders covering what up until recently was an extended short position."
VIDEO1:1801:18The oil market could stay quite volatile: Russia's Elvira NabiullinaCentral Banks
Prices spiked earlier in the day following a force majeure declaration on exports of Nigeria's Bonny Light crude, but sank into negative territory after data showed U.S. retail sales unexpectedly fell in June, casting doubt on demand in the world's largest oil consumer.
Both contracts rose about 5 percent this week, aided by reports of accelerating demand growth from the International Energy Agency, crude oil import growth in China and falling crude stocks in the United States.
China's crude oil imports over the first six months of 2017 were 13.8 percent above the same period in 2016, customs data showed. Asian traders are selling oil products out of tanks amid soaring demand, while the EIA reported the largest drop in U.S. crude oil inventories in the week to last week in 10 months.
Analysts at Commerzbank said a reduction in the developed world's oil stocks was likely to continue "so long OPEC does not significantly increase its output any further."
Still, oil stocks remained comfortably above the five-year average, and prices are more than 16 percent below their 2017 highs, despite an extension to March 2018 of output cuts of 1.8 million barrels per day (bpd) coordinated by the Organization of the Petroleum Exporting Countries.
VIDEO3:1503:15Oil remains 'range bound' as Libya and Nigeria undermine production: Tamar EssnerSquawk Box
"For the first half of 2017, OECD inventories are likely to finish higher, rather than lower ... The most plausible explanation is that OPEC compliance has been not as high as has been suggested," brokerage firm Sanford C. Bernstein said.
"OPEC will have to cut deeper and for longer if it wants to eliminate the inventory overhang and prices to rise," Bernstein said.
Crude prices are around levels in late November last year, when a group of oil producers including Russia and OPEC pledged to withhold around 1.8 million barrels per day (bpd) of output between January this year and March 2018 to tighten the market.
OPEC's rebalancing effort has been stymied in part by rising output from Libya and Nigeria, which were exempt from cuts and were producing close to 700,000 bpd more than at the time of the initial November OPEC cut agreement, according to U.S. investment bank Jefferies.
Kuwait's OPEC governor told Reuters in an interview that it would be premature to cap Nigerian and Libyan oil production.
VIDEO3:1603:16Trader says crude's issues aren't overFutures Now
U.S. oil production has also risen by more than 10 percent over the past year to 9.4 million bpd.
"It's not too long before the market starts looking at the supply situation ... which is anything but encouraging," Varga said.
Goldman Sachs said that the crude oil price outlook remained weak, largely due to rising cost efficiency from U.S. shale drillers.
"We see potential for shale to break even at $45 ... (and) we see $45-$55 per barrel annual WTI range," the U.S. investment bank said.
β CNBC's Tom DiChristopher contributed to this report.
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54f666c38cd4adc0c7832c78a7b1ca50 | https://www.cnbc.com/2017/07/13/trump-ive-done-more-in-five-months-than-practically-any-president-in-history.html | Trump: I've 'done more in five months than practically any president in history' | Trump: I've 'done more in five months than practically any president in history'
VIDEO0:5100:51Trump: I've 'done more in five months than practically any president in history'News Videos
President Donald Trump claimed Wednesday that the current mood in the White House is "fantastic," despite recent pressure following allegations surrounding his son's involvement with Russia during last year's election campaign.
In a wide ranging interview with Reuters, the president also claimed that his administration "had done more in five months than practically any president in history."
"If you look at Iraq and if you look at Syria and you see the progress we've made with ISIS, it's been almost complete," he said, referring to militant and terrorist group Islamic State, according to a transcript of the interview posted on Reuters' website.
"The White House is functioning beautifully. The stock market has hit a new high. Job numbers are the best they've been in 16 years. We have a Supreme Court judge already confirmed. Energy is doing levels that we've never done before. Our military is doing well. We're knocking the hell out of ISIS, which Obama wasn't. There's not a thing that we're not doing well in."
VIDEO7:3107:31Barry Diller on Trump: Hopefully will be over soonPower Lunch
Trump's assertion about the current mood in the White House flies in the face of media reports this week. The Washington Post said Wednesday, citing officials and outside advisors, his team had been thrusted into "chaos" after revelations of a meeting between Donald Trump Jr. and a lawyer characterized as linked to the Russian government.
Trump continues to split opinion in the U.S, and around the globe, and many would also question his comments on his team's achievements. Speaking to CNBC on Wednesday, Barry Diller, chairman of IAC, said Trump's presidency has so far been a "joke."
"He hasn't done anything, really. I think it's just a joke. Hopefully it will be over relatively soon," Diller said. "It inexplicably began and it will inexplicably end."
βAdditional reporting by Anita Balakrishnan
VIDEO1:1801:18President Trump was bathed in praise at his first cabinet meetingDigital Original
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dbdfc41fc16b9ae87c50253ee11461b8 | https://www.cnbc.com/2017/07/14/base-closings-hot-potato-issue-again-as-pentagon-insists-new-round-could-save-tens-of-billions.html | Base closings 'hot potato' issue again as Pentagon insists new round could save tens of billions | Base closings 'hot potato' issue again as Pentagon insists new round could save tens of billions
A file photo of US Marine Corps during the US-JAPAN military exercise outside the USMC base in Pendleton, California.Joe Klamar | AFP | Getty Images
An effort by the Trump administration to get a new round of military base closures faces an uphill battle after the House rejected it last week.
But behind the scenes, there's an effort by two key members of the Senate Armed Services Committee that would still allow for base closures.
"This is one the few political third-rail items because lawmakers are essentially voting for a process that would allow bases and installations to potentially in their districts and states to be closed or downsized," said Roman Schweizer, a defense analyst at Cowen.
No doubt, base closings are a politically unpopular idea for members of Congress, with some analysts likening it to a "hot potato" because of the general uneasiness of lawmakers to support something could result in job losses and economic hardship back home.
"We cannot afford for parochial interests to get in the way of what is the best interests of our troops," Rep. Adam Smith, Democrat of Washington, said in comments last week in support of the study of new base closures.
VIDEO4:0004:00US tops with military drones, but China owns consumer market, says former special ops analyst turned CEO
Earlier this year, Senate Armed Services Chairman John McCain, Republican of Arizona, called member hesitation to revisit base closings "cowardice" because he believes it provides money being wasted that could go to more pressing defense needs.
A Pentagon study from 2016 warned there is "significant excess capacity" in the nation's military infrastructure and urged Congress to take action to generate savings. Overall, it estimates there is 22 percent excess basing capacity across the Department of Defense, with the Army and Air Force having the most and the Navy the least, based on projected force levels in 2019.
In its fiscal 2018 budget request, the Trump administration asked Congress to authorize what's known as a Base Realignment and Closure, or BRAC, round, which would formally study the possible closing or realignment of military facilities. In some cases, BRAC process could lead to the expansion of military facilities.
The 2018 National Defense Authorization Act, legislation which sets forth the Pentagon's budget and major programs for the next fiscal year, passed the House last Friday but contains a provision blocking funding for a new BRAC round. A measure sponsored by California Republican Rep. Tom McClintock to strike the language from the final NDAA failed last week.
"When we squander billions of dollars keeping obsolete military bases open in order to satisfy congressional constituencies, we directly rob our military forces of the resources that we're constantly reminded that they desperately need," McClintock said last week on the House floor in arguments in favor of his pro-BRAC legislation.
While the House's version of the NDAA doesn't include funding for a new BRAC round, there's still a chance the Senate might allow it. The full Senate still has to vote on the NDAA, which cleared the Senate Armed Services Committee last month and also would bar funding for reducing bases.
Yet McCain has a draft proposal that would open the door to another BRAC and possible base closures. Rhode Island Democrat Sen. Jack Reed, ranking member of the committee, also signed on to the McCain effort, but it's unclear whether there's broad support in the chamber for another round of base closures.
Pentagon officials have said a new BRAC round, once completed, could capture savings of approximately $20 billion over 10 years.
"The bottom line is that Congress refusing to allow a BRAC is forcing the military to spend money that it doesn't want to spend and doesn't need to spend," said Christopher Preble, vice president for defense and foreign policy studies at the Cato Institute, a Washington think-tank.
Preble said a new BRAC round wouldn't mean denying the military land it might need in the future, but said it's about "rationalizing what properties they have and what they need."
When including all five of the previous BRAC rounds since the 1980s, there have been annual savings estimated at more than $12 billion β and nearly $5 billion alone from the last one in 2005.
An F-35A Lightning IIU.S. Air Force | Tech. Sgt. Bennie J. Davis III | Airman Magazine
Money savings from a new round of BRAC would be enough to buy 22 F-18 Hornet fighter jets or four Virginia-class submarines, according to McClintock. It also could buy another large batch of F-35 stealth fighters.
"BRAC reduces fixed costs they would have with infrastructure," said Frederico Bartels, policy analyst for defense budgeting at the Heritage Foundation, a Washington think tank. "That is the only way at getting at those fixed costs because there are a long of congressional limitations placed on what DoD can do with its physical infrastructure."
Heritage Foundation supports a new round of BRAC to "right-size" the DOD infrastructure, saying it would allow the Pentagon to do "a rigorous and transparent review of its current and future infrastructure needs, including closing bases and facilities as appropriate." Even so, the conservative think tank also believes "some excess infrastructure may be worth keeping, as a hedge against future needs."
Some of the opposition for another round of base closures comes from lawmakers who say the costs of consolidation are too high and that local communities depend on these bases for their livelihood.
Mandy Smithberger, director of the Straus Military Reform Project at the Project on Government Oversight, said the federal government usually helps communities adjust to base closures. She also said a U.S. Government Accountability Office study found that communities closed under the last BRAC round in 2005 actually did better under the Great Recession than average communities across the country.
"There are ways to have soft landings," said Smithberger.
However, there are others who suggest a new round of BRAC should wait until President Donald Trump completes his plans to expand the military, including his stated goal to add more troops.
Also, some congressional critics of the BRAC program maintain that the 2005 consolidation ended up having savings below original expectations.
The 2005 BRAC was advertised originally by the Pentagon of having an implementation cost of about $21 billion, but that number grew to about $35.1 billion, largely reflecting cost overruns from construction costs. It impacted 24 facilities nationally and resulted in the relocation of around 125,000 people, including troops, their families and civilian employees.
Even though the last BRAC round did turn out to be perhaps more expensive than expected, proponents of the process say it wasn't entirely a base closure program but was a realignment of large facilities. There also were several projects related to support the F-35 Joint Strike Fighter program, including training and operations support.
Cato's Preble said resistance in Congress to another BRAC comes from a misconception that when a military base closes it always means bad news for local communities and that they can't bounce back.
"There's' a lot of resistance on Capitol Hill, unfortunately. There's a belief that when a base closes it has a devastating impact on the surrounding communities. And my research shows that that's not actually the case."
Added Preble: "In most cases, the surrounding community finds a way to redirect those resources to more productive ends and they end up β sometimes quite quickly β with a much more diverse economic base. They have a stronger workforce, better pay, and are less dependent on a single source."
As an example, he said when Philadelphia's Naval Shipyard closed in the 1990s it was "a grim time and people were pretty pessimistic." But he said the area bounced back and today is "just unbelievable" with a business building commercial ships and private businesses and retail establishments.
He also cited the success following the closure of Naval Air Station Brunswick in Maine, part of the 2005 BRAC round. The facility was turned over to civilian use and attracted new companies and development, adding significant property tax revenue for local communities and new jobs. Likewise, Austin's Bergstrom Air Force Base, located seven miles outside downtown, was closed and later converted to a commercial airport serving the growing community.
"The Austin airport is now a huge, modern airport that Austin was desperate to build for a long, long time," said Preble. "The closure of the Air Force base, in many respects, solved a critical problem for the city."
VIDEO1:4101:41US military plans to order 2,400 F-35'sSquawk Box Europe
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c2f8c8ba33d556bc4b23f9bba652c7c6 | https://www.cnbc.com/2017/07/14/heres-where-people-on-main-street-give-trump-a-76-percent-approval-rating.html | CNBC | SurveyMonkey Small Business Survey | CNBC | SurveyMonkey Small Business Survey
A recent CNBC/SurveyMonkey Small Business Survey shows that small-business owners under 35 are more likely to identify themselves as independents than as Republicans or Democrats.Andrew Harrer | Getty Images
(President Donald Trump signs an executive order to decrease regulations while surrounded by small-business leaders in the Oval Office of the White House.)
The first-ever CNBC/SurveyMonkey Small Business Survey found that small-business owners in all regions of the country are more optimistic than they were pessimistic on the economy and the future of their businesses. But the survey also uncovered that President Donald Trump is causing regional rifts in an entrepreneur's level of bullishness.
The poll, conducted April 17-28, surveyed 2,030 self-identified small business owners nationwide.
Most striking is the very close correlation between the level of confidence and the level of approval of Trump. According to the survey, Trump enjoys a 76 percent approval rating among small-business owners in the South Atlantic region, and that region had the highest confidence level (64). He also has the same approval rating in North West Centralβ Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakotaβ although the confidence level is lower at 63. In the least confident region, the Pacific, Trump has a 48 percent approval rating.
Here's more on how the eight U.S. census regions differ in their views, and in their demographics, in order of the least confident to most confident. (Note: The East South Central region, which includes the states of Alabama, Kentucky, Mississippi and Tennessee, is not included, because there was a statistically insignificant total of fewer than 100 responses from that region.)
A supporter of Republican presidential candidate Donald Trump holds a sign during his campaign rally at the Orange County Fair and Event Center, April 28, 2016, in Costa Mesa, California.David McNew | Getty Images
States: Alaska, California, Hawaii, Oregon, Washington
Confidence index (0β100 scale): 53
Trump approval/disapproval: 48%/49%
Respondents in the Pacific region reported the lowest confidence index score of all the regions, but at 53 the region's small business owners are still slightly more optimistic than it is pessimistic.
Pacific small-business owners were more likely than any other region to report current business conditions as "bad" (15 percent) and expect revenue to decrease (17 percent). They are also more likely to expect changes in tax policy, trade policy and immigration policy to have a negative effect on their businesses compared to other regions.
Demographically, the region has the smallest percentage of white respondents (57 percent) and the highest percentage of those reporting "other" as their race or ethnicity (18 percent). Pacific small-business owners are 8 percent black, 8 percent Hispanic and 9 percent Asian.
Republican presidential nominee Donald Trump stops at Geno's Steaks in Philadelphia, Pennsylvania, on September 22, 2016.Mandel Ngan | AFP | Getty Images
States: New Jersey, New York, Pennsylvania
Confidence index (0β100 scale): 56
Trump approval/disapproval: 46%/54%
This is the most polarized region when it comes to how business owners feel about Trump. Thirty-two percent strongly approve of the way he is handling his job, while 39 percent strongly disapprove. Respondents in this region were much less likely to have a moderated view of the president.
Twenty-nine percent of the Middle Atlantic group think changes in trade policy will have a negative effect on their businesses over the next 12 months, which is more than any other region except the Pacific region (also at 29 percent).
Mid-Atlantic small-business owners are also much more likely to have a web page for their business compared to other regions. Sixty-six percent of this group say they have a web page.
In 2011, a sign outside a hair salon welcomes Donald Trump on April 27, 2011 in Portsmouth, New Hampshire.Getty Images
States: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont
Confidence index (0β100 scale): 59
Trump approval/disapproval: 50%/50%
Small-business owners were most likely to say they "Strongly Disapprove" of the job Trump is doing as president (40 percent). Not surprising, since the president won only one of the region's 33 electoral votes last November. Despite that, 48 percent of respondents say business conditions are "good," and 37 percent expect to increase headcount in the next 12 months (more than any other region.)
This was the only region with more owners (25 percent) saying customer demand was the most critical issue facing their business (for all other regions, "Taxes" was the most popular choice). They're also more likely than other regions to say terrorism or foreign policy matter most to them right now.
Demographically, only 28 percent of New England small-business owners to respond to the survey are women, which is fewer than any other region. Twenty-three percent of respondents have a post-graduate degree, more than any other region.
(A sign in front of a hair salon in Portsmouth, New Hampshire, welcomes Trump during campaign.)
Then Republican Presidential candidate Donald Trump waves to photographers during his trip to the border in Laredo, Texas on July 23, 2015.Getty Images
States: Arkansas, Louisiana, Oklahoma, Texas
Confidence index (0β100 scale): 61
Trump approval/disapproval: 63%/26%
Small-business owners in this region are most likely to say business conditions are "good" (48 percent). Sixty-two percent expect revenue to increase, which is more than any other region except the South Atlantic (64 percent).
Small-business owners in this region are more likely to say education is the issue that matters most to them right now. That's interesting, because 9 percent of the respondents in this region never finished high school and only 39 percent have a college degree (compare that to 51 percent of New England small-business owners).
The West South Central region also has the highest percentage of Hispanic respondents (20 percent).
(Trump visits the Texas-Mexico border.)
Candidate Donald Trump speaks at the 2016 Western Conservative Summit at the Colorado Convention Center on July 1, 2016 in Denver.Getty Images
States: Arizona, Colorado, Idaho, Montana, New Mexico, Nevada, Utah, Wyoming
Confidence index (0β100 scale): 61
Trump approval/disapproval: 60%/40%
The Mountain region was the only region with a majority of respondents saying health care is the issue that matters most to them right now. For all other regions, "jobs and economy" was the most popular response.
The region also had the highest number of respondents (14 percent) saying immigration is the most important issue. Twenty-nine percent say changes to immigration policy will have a positive effect on their business, which is second highest among all the regions.
Republican presidential candidate Donald Trump speaks to guests at a campaign rally on December 21, 2015 in Grand Rapids, Michigan.Getty Images
States: Illinois, Indiana, Michigan, Ohio, Wisconsin
Confidence index (0β100 scale): 63
Trump approval/disapproval: 65%/35%
Small-business owners in the region that arguably won Trump the presidency still have a high opinion of his early efforts, with 39 percent strongly approving of his performance.
Taxes are very important to this region, and most appear to think the new administration will deliver better tax policy. Fifty-four percent of respondents in this region say that changes in tax policy over the next 12 months will have a positive impact on their businesses. Thirty-one percent of respondents in this region also say taxes are the most critical issue facing their business.
They're also optimistic about other elements of the Trump agenda, with 31 percent saying changes in immigration policy over the next 12 months will have a positive effect on their businesses (more than any other region), and 41 percent saying changes in regulation will have a positive effect.
Forty-six percent of East North Central small-business owners have at least a college degree, making this region's small-business owners the second-best educated, behind New England.
A Trump sign in Dexter, Iowa.Getty Images
States: Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota
Confidence index (0β100 scale): 63
Trump approval/disapproval: 76%/24%
More small-business owners strongly approve of Trump in this region (45 percent) than in any other region. Perhaps it's because they believe the administration will deliver on its promise to pass new health-care legislation.
Respondents in this region are more likely than all other regions to say "cost of employee health care" is the most critical issue facing their business. Forty-nine percent of respondents expect changes in government regulations to have a positive effect on their businesses, also more than any other region.
Eighty-nine percent of respondents in this region are white, making it the least diverse region in the country for small-business owners.
President Donald Trump holds a campaign rally at the AeroMod International hangar at Orlando Melbourne International Airport on February 18, 2017.Getty Images
States: Delaware, District of Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, West Virginia
Confidence index (0β100 scale): 64
Trump approval/disapproval: 76%/24%
Nowhere is the correlation between small-business confidence and Trump approval stronger than in the South Atlantic, where the confidence index is 64 (higher than any other region), and 76 percent of respondents approve of the way Trump is handling his job.
Sixty-four percent of respondents in the South Atlantic expect sales to increase, and 33 percent expect to increase headcount in the next 12 months. Forty-five percent say changes in tax policy will help their businesses, and 44 percent say changes in government regulations will help their businesses.
The South Atlantic region is the largest in terms of number of respondents and the most diverse. Forty-seven percent of respondents in this region are female (more than any other region), and 19 percent are black (also more than any other region). Another 10 percent are Hispanic. Forty-one percent have a college degree, but 24 percent are running their businesses with just a high school diploma or GED.
(Trump goes tieless for a rally in Orlando.)
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89b6ded09812a891ca7635297728a51f | https://www.cnbc.com/2017/07/14/trump-claims-of-chinese-dumping-lift-us-steel-shares.html | Trump claims of Chinese dumping lift US steel shares | Trump claims of Chinese dumping lift US steel shares
President Donald Trump and First Lady Melania Trump board Air Force One prior to departing Paris Orly Airport on July 14, 2017.Saul Loeb | AFP | Getty Images
Shares in US-listed steel companies rose sharply late on Thursday after Donald Trump accused China of dumping cheap steel in the American market and was considering imposing both tariffs and quotas on imports.
The rally was part of a longer-run increase for the industry, which has been awaiting a US Department of Commerce report that is expected to find underpriced imports poses a national security threat.
On Air Force One en route to Paris for a presidential visit, Mr Trump told reporters China and other countries were "dumping steel [in the US] and destroying our steel industry", adding: "They've been doing it for decades and I'm stopping it. It'll stop.
"There are two ways: quotas and tariffs. Maybe I'll do both. We're like a dumping ground, OK?"
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The comments by Mr Trump were initially off the record and not reported by journalists travelling with the president, who was on his way to Paris to attend Bastille Day festivities. However, the White House later changed the ground rules and released a transcript of his remarks, sparking the steel rally. AK Steel, a Pittsburgh-based producer, closed 7.1 per cent higher, while US Steel, the largest domestically based US steel producer, rose 3.8 per cent. Nucor, the largest mini-mill steelmaker, gained 2.7 per cent, ArcelorMittal was up 2.1 per cent and Steel Dynamics jumped 2.3 per cent.
Nonetheless, share prices in the sector remain off their peaks from earlier in the year, as investors' optimism over the Trump administration's policy agenda has faded. The commerce department steel report was due at the end of June, and investors have grown concerned Mr Trump may not move forward with his threat of tariffs.
On Thursday, Wilbur Ross, the commerce secretary, told members of the Senate Finance Committee that he would present Mr Trump with the options for potential action as early as next week.
Several agricultural lobby groups have signed a joint letter to Mr Ross, claiming any restrictions on steel or aluminium imports could lead to other countries retaliating by restricting imports of agricultural products from the US.
"If the . . . investigations on steel and aluminium result in new trade barriers, the aftermath could be disastrous for the global trading system and for US agriculture in particular," the letter read.
Mr Trump was asked on the flight whether he would use trade as a bargaining chip with China over its relationship with North Korea.
"The biggest strength we have are these horrendous trade deals, like with China," he said. "That's our strength. But we're going to fix them. But in terms of North Korea, our strength is trade."
More from the Financial Times:Who's who in the Trump-Russia email chain?Donald Trump defends son's Russian meeting as 'standard politics'The rot inside America's first family
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8feeeb66d2088911a08a97a130047b52 | https://www.cnbc.com/2017/07/14/us-consumer-price-index-june-2017.html | US Consumer Price Index unchanged in June vs 0.2% increase expected | US Consumer Price Index unchanged in June vs 0.2% increase expected
A worker sets up a display in a Walmart Super Center in Compton, California.Mike Blake | Reuters
The U.S. Consumer Price Index was forecast to rise 0.2 percent in June, after edging up 0.1 percent a month earlier.
U.S. consumer prices were unchanged in June as the cost of gasoline and mobile phone services declined further, pointing to benign inflation that could cast doubts on the Federal Reserve's ability to increase interest rates for a third time this year.
The Labor Department said on Friday that the unchanged reading in its Consumer Price Index followed a 0.1 percent dip in May. The lack of a rebound in the CPI in June could trouble Fed officials who have largely viewed the recent moderation in price pressures as transitory.
In the 12 months through June, the CPI increased 1.6 percent - the smallest gain since October 2016 - after rising 1.9 percent in May. The year-on-year CPI has been softening steadily since February, when it hit 2.7 percent.
Economists polled by Reuters had forecast the CPI edging up 0.1 percent last month and climbing 1.7 percent from a year ago.
The so-called core CPI, which strips out food and energy costs, edged up 0.1 percent in June, rising by the same margin for three straight months. The core CPI increased 1.7 percent year-on-year after a similar gain in May.
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9cc401695ef356f19a87f9038c2a6c9d | https://www.cnbc.com/2017/07/14/white-house-publishes-voter-fraud-feedback-exposes-personal-information.html | White House publishes voter-fraud feedback, exposes personal information | White House publishes voter-fraud feedback, exposes personal information
Vice President Mike Pence.Getty Images
President Donald Trump's voter-fraud commission is receiving further backlash, now in the form of public feedback.
Led by Vice President Mike Pence, the White House commission published a 112-page document of comments received from June 29 through July 11, including personal email addresses, phone numbers and even home addresses. The vast majority of the comments are from harsh critics of the commission.
One of the commission's first actions, after Trump created it by executive order, was to request extensive personal information from state governments about its voters. In response, 45 states mounted a bipartisan rebellion against the commission, citing privacy concerns and partisan motivations.
"The request is simply too broad and includes sensitive information of Arkansas voters," Republican Arkansas Gov. Asa Hutchinson said in a statement.
"There's not enough bourbon here in Kentucky to make this request seem sensible," Kentucky Secretary of State Alison Grimes, a Democrat, said.
Allowing members of the public to submit comments has proven little fruit, as voters join their state representatives in pushing back. Many expressed disgust in their emails.
"America the Beautiful doesn't need you or your ilk," Patrick Scroggin wrote.
"I am a Teddy Roosevelt Republican. He would never condone such un-American behavior," Jerold Coburn said.
And others found the commission's purpose dubious at best, as Scott D. Morrow wrote: "I'm more likely to get hit by lightening [sic] than for someone to vote illegally in Colorado."
The White House notes the possibility it will release commenters' contact information in a disclaimer on its blog.
"Please note that the Commission may post such written comments publicly on our website, including names and contact information that are submitted," the website said.
The White House did not immediately respond to a request for comment.
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abd745d3ba0be30fb8aebaa6cfed2007 | https://www.cnbc.com/2017/07/15/china-super-regulator-closed-door-policy-meeting-fuels-speculation-that-its-building-its-regulator.html | China closed-door policy meeting fuels speculation that it's building its financial 'super regulator' | China closed-door policy meeting fuels speculation that it's building its financial 'super regulator'
Emmanuel Wong | Getty Images
Speculation is rife that China could create a "super regulator" at a major policy meeting this weekend as part of its efforts to curb risk in its financial system.
The gathering, called the National Financial Work Conference, occurs every five years and started in 1997 in the wake of the Asian financial crisis. The closed-door meeting of top Chinese finance officials has addressed ways to manage the country's financial system and help support economic growth. This year's conference is expected to focus on reining in risks and on improving coordination among regulators.
Chinese state financial paper, China Security Times, suggested that the current system of having one central bank and three regulatory agencies for banking, securities, and insurance, has entrenched interests which could present challenges.
VIDEO2:4802:48China regulatory crackdown isn't sinister: Victor ChuDalian - World Economic Forum
"It is a hard nut to crack to change this model," the Times said. "The biggest obstacle is attempting to re-assign responsibilities, power, and personnel."
China's financial markets are monitored and regulated by the People's Bank of China (PBOC), China Banking Regulatory Commission, China Securities Regulatory Commission, and China Insurance Regulatory Commission. At times, the regulatory bodies do not act in tandem.
The creation of a super regulator has been widely discussed within financial circles for years and gained traction after the 2015 stock market turmoil. At that time, President Xi Jinping ordered a plan to streamline financial oversight. President Xi is said to be attending this year's conference.
One option believed to be debated is to consolidate regulatory power at the PBOC. Another proposal is to create a coordinating committee within the central bank. Either way, economists such as Xu Hongcai feel encouraged by the conference's agenda.
"In grey areas in the financial markets, none of the (three regulatory commissions) were taking responsibility to fully monitor the situation," Xu, deputy chief economist at the China Center for International Economic Exchanges, told CNBC.
"So certain products were left to grow wildly and this has created a lot of risk and fostered bribery and corruption."
VIDEO1:5001:50What people are missing on ChinaSquawk Box Asia
Past conferences have led to important decisions such as the establishment of the sovereign wealth fund. Implementation for any plans this year will likely be on hold until after after the 19th National Congress which is expected to result in a leadership reshuffle in the fall.
Even so, Xu believes any announcement encouraging more coordinated regulation and an effort to deleverage risk further in China's financial markets will only be received positively by international investors.
"This meeting sends a good signal to investors in China and abroad," Xu said. "It shows that China will have more stable and open financial markets and that China will continue to work on internationalizing its capital markets and its economy."
The National Finance Work Conference began on July 14 and, according to local media reports, will continue to run through the weekend.
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e0391adeebdb32d9d142626c330f47d6 | https://www.cnbc.com/2017/07/16/delta-fires-back-at-ann-coulter-after-she-rages-about-seat-reassignment.html | Delta fires back at Ann Coulter after she rages about seat reassignment | Delta fires back at Ann Coulter after she rages about seat reassignment
VIDEO1:0001:00Delta fires back at Ann Coulter after she rages about seat reassignmentNews Videos
Conservative author Ann Coulter had a bone to pick with Delta Air Lines on Saturday, after she said the airline moved her from a pre-booked, "extra room" seat.
She railed against the company on Twitter, calling Delta the "worst airline in America," and complained that it had given her seat to someone who was neither old, a child, sick, nor an "air marshall (sic) or tall person." Coulter shared photos of the passenger who was given the seat she had booked, and that of a flight attendant, with her approximately 1.6 million followers.
Ann Coulter Tweet: Just when you think it's safe to fly them again, the worst airline in America is STILL: @Delta
Ann Coulter Tweet: Hey @Delta, you mind telling me why it was an "emergency" to move someone else into the seat I had carefully chosen in advance and booked?
Coulter was on a flight to West Palm Beach, Florida, from New York's LaGuardia airport when she was reassigned from an aisle to a window seat on the same exit row, with extra leg room.
Delta said Coulter had originally booked a window seat and then within 24 hours of the flight's departure, she changed it to an aisle seat on the same row. At the time of boarding, the airline said it moved Coulter to another window seat on the same row to accommodate seating requests from other passengers.
The company said there was some confusion with seating assignments during boarding, and that a flight attendant then asked the passengers to move to the seats noted on their respective tickets. Delta said its customers had complied, the flight departed without incident and crew members did not report any problems. It said it only learned of Coulter's complaints after she began tweeting about it on July 15, following the flight's arrival.
A Delta spokesman told CNBC the airline's social media and customer care teams had reached out to Coulter several times and that it had connected with her by Sunday evening. He did not elaborate on what was discussed.
On Sunday evening, Delta responded to Coulter on Twitter and said it will refund the $30 she had paid for the preferred seat. The airline also called her tweets "about our other customers and employees" unacceptable and unnecessary. Coulter also tweeted that she was still waiting for an explanation.
Delta Tweet: @AnnCoulter We're sorry you did not receive the preferred seat you paid for and will refund your $30. (cont.)
Delta Tweet: @AnnCoulter Additionally, your insults about our other customers and employees are unacceptable and unnecessary.
In a separate statement, Delta added, "Each of our employees is charged with treating each other as well as our customers with dignity and respect. And we hold each other accountable when that does not happen."
"Delta expects mutual civility throughout the entire travel experience," the statement said.
Coulter had alluded to Delta employees being rough, tweeting: ".@Delta employee questionnaire: What is your ideal job: Prison guard? Animal handler? Stasi policeman? All of the above: HIRED!" She also accused them of "summarily snatching my ticket from my hand & ordering me to move w/o explanation, compensation or apology."
Previously, when United Airlines drew criticisms for the rough-handling of a passenger and carrying him off the aircraft, Coulter was seemingly unsympathetic. She tweeted:
Tweet: Sorry about the dragging, but the convicted pill-mill doctor should be deported. Dreamland amzn.to/2p2LA6M
VIDEO0:5600:56Heat waves to disrupt airplanes' ability to take offDigital Original
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d54fd9046fb0360703a20a2c6850ff1c | https://www.cnbc.com/2017/07/17/china-keeping-a-close-eye-on-overseas-investments.html | China to keep monitoring 'irrational' overseas investments | China to keep monitoring 'irrational' overseas investments
Chinese authorities will continue to monitor the trend of "irrational" overseas investments in the real estate, hospitality and film industries, a spokesman for the state planner said on Tuesday.
The Chinese government has cracked down on outbound investment by Chinese firms since late last year after accelerating capital outflows exacerbated depreciation of the yuan.
After rising 44 percent last year, outbound direct investment by Chinese firms fell 45 percent year-on-year in the first half of this year.
While Beijing says it supports legitimate overseas investment, regulators since late 2017 have warned against what they call irrational investments in certain sectors.
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34725db44967859bc38a989451e63f16 | https://www.cnbc.com/2017/07/17/president-donald-trump-calls-for-lawmakers-to-repeal-failing-obamacare-now-without-replacement-plan.html | GOP gives up on replacing Obamacare now: McConnell and Trump call for simply repealing | GOP gives up on replacing Obamacare now: McConnell and Trump call for simply repealing
VIDEO0:4500:45GOP gives up on replacing Obamacare now: McConnell and Trump call for simply repealingNews Videos
Senate Majority Leader Mitch McConnell on Monday night abruptly called for a vote to repeal Obamacare without an immediate replacement after the latest Republican effort to overhaul the U.S. health-care system fizzled out.
"Regretfully, it's now apparent that the effort to repeal and immediately replace the failure of Obamacare will not be successful," McConnell said in a statement. "So, in the coming days, the Senate will vote to take up the House bill with the first amendment in order being what a majority of the Senate has already supported in 2015 and that was vetoed by then-President Obama: a repeal of Obamacare with a two-year delay to provide for a stable transition period to a patient-centered health care system that gives Americans access to quality, affordable care."
President Donald Trump, who had pressed for a repeal and replacement plan, urged Republican lawmakers to repeal Obamacare first, and then come up with a solution for replacing it. It is unclear if the GOP has the votes to repeal the law without an immediate replacement, as it risks destabilizing insurance markets.
Donald Tweet: Republicans should just REPEAL failing ObamaCare now & work on a new Healthcare Plan that will start from a clean slate. Dems will join in!
Earlier Monday, two more Republican senators said they would oppose the current Republican health-care bill β enough to doom its passage barring changes.
In messages posted to Twitter, Sens. Jerry Moran, R-Kan., and Mike Lee, R-Utah, became the third and fourth GOP senators to say they would not support their party's Obamacare replacement plan as written. They said they would not even back a motion to allow a procedural vote that would have started debate on the bill. The GOP, which holds 52 seats in the Senate, had already seen two defections and could not afford a third.
VIDEO1:3401:34Senate health-care bill fails to gain supportSquawk Box
It was the latest setback to the GOP's effort to repeal and replace Obamacare, a Republican campaign promise for most of the last decade that has stalled multiple times this year amid party divisions. The GOP chose to address the health-care overhaul before it took on tax reform, another key campaign plank, and every setback is seen as delaying the party's broader agenda.
Before Trump's tweet, a White House official said in a statement that "inaction is not an option. We look forward to Congress continuing to work toward a bill the President can sign to end the Obamacare nightmare and restore quality care at affordable prices."
Moving toward a vote on a repeal-only plan would require two of the four GOP senators who said they would vote "no" on the motion to proceed to change their tunes. Additionally, it remains to be seen if several other senators who were undecided on the replacement plan will get behind a repeal-only bill.
The GOP-controlled Congress passed a bill in 2015 to repeal Obamacare without a replacement, though the lawmakers cast their votes knowing that the bill would face a presidential veto from then-President Barack Obama.
The Senate voted by a 52-47 margin to only repeal Obamacare in 2015. Many of the current health-care swing votes supported the bill. GOP Sen. Susan Collins of Maine, a strong opponent of the latest Obamacare replacement bill, voted against it.
In 2015, the nonpartisan Congressional Budget Office estimated that repealing Obamacare would lead to 30 million to 32 million more Americans uninsured.
After the Senate's initial struggles to reach a health-care consensus in June, Trump and Sen. Rand Paul, R-Ky., both publicly floated the prospect of repealing Obamacare without a replacement plan.
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d573fe571facff917f99a82a64773275 | https://www.cnbc.com/2017/07/17/senators-mike-lee-and-jerry-moran-oppose-senate-health-care-bill.html | GOP loses enough senators to sink its current health-care bill | GOP loses enough senators to sink its current health-care bill
VIDEO2:0102:01Two more GOP senators oppose health-care billSquawk Box Asia
Two more Republican senators said Monday they will oppose the current Republican health-care bill β enough to doom its passage, for now.
Following the announcement, Senate Majority Leader Mitch McConnell abruptly called for a vote to repeal Obamacare without an immediate replacement as the replacement effort seemed to collapse.
In messages posted to Twitter, Sens. Jerry Moran, R-Ks., and Mike Lee, R-Utah, became the third and fourth GOP senators to say they would not support their party's Obamacare replacement plan as written. They said they would not even back a motion to proceed β a procedural vote that would start debate on the bill.
The GOP, which holds 52 seats in the Senate, had already seen two defections and could not afford a third.
Jerry Moran tweet: My colleague @SenMikeLee and I will not support the MTP to this version of BCRA. #HealthcareBill
Mike Lee tweet: My colleague @JerryMoran and I will not support the MTP to this version of BCRA #HealthcareBill
Their opposition marks just the latest setback to the GOP's effort to repeal and replace Obamacare, a Republican campaign promise for most of the last decade that has stalled multiple times this year amid party divisions. The GOP chose to address the health-care overhaul before it took on tax reform, another key campaign plank, and every setback is seen as delaying the party's broader agenda.
Following the senators' announcement, President Donald Trump urged Republican lawmakers to repeal Obamacare first, and then come up with a solution for replacing it. It is unclear if the GOP has the votes to repeal the law without an immediate replacement, as it risks destabilizing insurance markets.
Donald Tweet: Republicans should just REPEAL failing ObamaCare now & work on a new Healthcare Plan that will start from a clean slate. Dems will join in!
Before Trump's tweet, a White House official said in a statement that "inaction is not an option. We look forward to Congress continuing to work toward a bill the President can sign to end the Obamacare nightmare and restore quality care at affordable prices."
McConnell then called for a vote on a bill to repeal Obamacare without an immediate replacement.
"Regretfully, it's now apparent that the effort to repeal and immediately replace the failure of Obamacare will not be successful," McConnell said in a statement. "So, in the coming days, the Senate will vote to take up the House bill with the first amendment in order being what a majority of the Senate has already supported in 2015 and that was vetoed by then-President Obama: a repeal of Obamacare with a two-year delay to provide for a stable transition period to a patient-centered health care system that gives Americans access to quality, affordable care."
Senate Republicans released a revised Obamacare replacement bill last week, hoping to win over both conservative and moderate holdouts who opposed an earlier version of the plan. Two GOP senators β Rand Paul of Kentucky and Susan Collins of Maine β almost immediately opposed it, while several others expressed skepticism.
The conservative Lee previously argued that the Senate bill did not go far enough to a full repeal of Obamacare. In his statement announcing opposition Monday, Lee said that he made his decision after studying the Consumer Freedom Amendment, a provision championed by conservative Sen. Ted Cruz, R-Tex., that allows insurers to offer skinnier plans with fewer benefits as long as they offer more robust Obamacare-compliant plans.
"In addition to not repealing all of the Obamacare taxes, [the bill] doesn't go far enough in lowering premiums for middle class families; nor does it create enough free space from the most costly Obamacare regulations," he said.
VIDEO1:3801:38GOP senators face health-care protesters on Capitol HillClosing Bell
Moran said Monday that the bill "fails to repeal the Affordable Care Act or address health care's rising costs." He also criticized what he called Republicans' "closed-door process" that led to the plan.
"We must now start fresh with an open legislative process to develop innovative solutions that provide greater personal choice, protections for pre-existing conditions, increased access and lower overall costs for Kansans," he said in a statement.
The GOP already had to delay its plan to vote on a motion to proceed this week as Sen. John McCain, R-Ariz., recovers from a surgery to remove a blood clot above his eye.
Some senators, like Collins, have previously suggested that the GOP should push for a bipartisan plan to fix Obamacare's flaws and address the issues of rising premiums and insurers leaving the individual market in some states.
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009f7eb6fcc279279a68774197cc3979 | https://www.cnbc.com/2017/07/18/google-glass-enterprise-market-size.html | Best case, Google Glass for work could add $2 billion a year to Alphabet's annual revenue | Best case, Google Glass for work could add $2 billion a year to Alphabet's annual revenue
Doctor Huang Yunchao, wearing Google Glass, performs a live surgery to remove a tumor at The Third Affiliated Hospital of Kunming Medical University.VCG | Getty Images
Google's digital glasses, rejected by consumers three years ago as an elite, privacy-invading toy, have picked up a lunchpail and gone to work.
The research arm that produced Google Glass, known as X and led by Google co-founder Sergey Brin, has focused on a corporate version targeted at workers ranging from doctors to warehouse managers.
But to create meaningful revenue for its parent company, Google will have to find a way to get the product into a market in which its only experience is selling cloud computing and digital advertising.
Google in the past has sold the unit for a price of $1,500, while a report from the market research firm Forrester Research predicts 14.4 million American workers will be using them by 2025.
Given those assumptions, the market for augmented-reality glasses like Google Glass could be worth between $1 billion to $2 billion in eight years -- if the product captures between 50 percent and 100 percent of it.
By way of comparison, Alphabet booked $90.3 billion in revenue last year, and Google's non-advertising businesses (including enterprise and Google Play) collectively booked just over $10 billion in 2016.
An email from CNBC to Google asking for the latest price on the device was referred to X, which declined comment.
To get there, will need to either find a distribution partner (or partners) with experience getting hardware into the enterprise or find a new way to market them at small- to mid-sized businesses.
Its current plan, according to a blog post by Jay Kothari, who leads the Google Glass project, is "collaborating with the Google Cloud team and our partners to help customers across a variety of business sectors make the most of Glass."
After years of trying, however, Google's cloud unit behind rivals and .
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56aaf8676683cd9f5be40026eed01eec | https://www.cnbc.com/2017/07/18/google-glass-new-version.html | One of Google's biggest flops returns to the enterprise | One of Google's biggest flops returns to the enterprise
Alphabet's Glass being used in manufacturingAlphabet
Google parent company Alphabet has officially launched the "Enterprise Edition" of its smart glasses hardware, which is now available to a network of Google partners.
The company's developer partners range from logistics and manufacturing to patient care. These apps have long-been involved with the product formerly known as Google Glass through the business-focused "Glass at Work" program.
In a blog post Tuesday, Glass project leader Jay Kothari said partners such as GE Aviation, AGCO, DHL, Dignity Health, NSF International, Sutter Health, Boeing and Volkswagen have been using Glass over the past several years, and make up just a sampling of 50 companies using the wearable.
Wired said several of these companies found the original Google Glass to be very useful in factories and other enterprise environments. Google discovered this and began work on a product built by a team dedicated to building a new version of Glass for the enterprise.
According to Kothari, the Glass Enterprise Edition glasses are lighter and more "comfortable for long term wear." They also offer more power and longer battery life and, offer support for folks with prescription lenses, Wired said. The glasses, too, are stronger and do double duty as safety glasses.
Folks who disliked the first version of Glass because of privacy concerns will also be pleased to learn that this model, which has an upgraded 8-megapixel, has a red light that glows when the camera is recording.
Google initially unveiled the device with much fanfare in 2012, but it failed to catch on with consumers. Where it did succeed is with professionals, like field workers and doctors, who use the device to record information without needing to use their hands. As an example, an app called Augmedix uses Glass to help doctors transcribe notes from patient interactions.
"Now the Glass product team is back at X, and we'll be collaborating with the Google Cloud team and our partners to help customers across a variety of business sectors make the most of Glass," Kothari said. "Together, we're looking forward to seeing more businesses give their workers a way to work faster and in a more focused way, hands-free."
Correction: The new product is called simply "Glass," and is overseen by the X business unit, which is part of Alphabet's "Other Bets" and is not part of Google.
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cde5d9e77f928cd2c588d7e2f226323e | https://www.cnbc.com/2017/07/18/student-loan-interest-rates-edge-higher-and-higher.html | Student loan interest rates edge higher and higher | Student loan interest rates edge higher and higher
Students protest ballooning student loan debt for higher education and rally for tuition-free public colleges in New YorkCem Ozdel | Anadolu Agency | Getty Images
When it comes to college, tuition costs rising, and so are the interest rates on the loans to cover the tab.
Earlier this month, interest rates rose on new federal loans for the coming year. For new loans disbursed from July 1, 2017, to June 30, 2018, undergraduates will pay 4.45 percent. That's an increase from this year's rate of 3.76 percent.
And the private student loan market, which is already a more expensive way to borrow, is also edging higher. Both variable and fixed interest rates on private student loans rose nearly a point over the last year, according to a recent report by LendEDU, an online marketplace for student loans and student loan refinancing.
The average variable rate on a private student loan is now 7.81 percent, while the average fixed rate stands at 9.66 percent, LendEDU said. (See chart below.)
"Students are put in a tough spot," said Michael Brown, a research analyst at LendEDU. "With tuition costs continuing to rise, federal loans won't cut it, so some are forced to take private student loans, where the interest rates are high right now." (Tuition has historically risen about 3 percent to 5 percent a year, according to the College Board.)
While most student borrowers rely on federal student loans, more than 1.4 million students a year use private student loan debt to bridge the gap between the cost of college and their financial aid and savings, LendEDU said. The site based its findings on 80,000 users who inquired about private loans over the last year.
The top concern parents and students said they now share β across the board β is the amount of debt they are about to take on to pay for a degree, according to a separate report by The Princeton Review. Contrast that to a decade ago, when the most commonly cited answer was not getting into their first-choice school.
About 60 percent of graduates leave college with some amount of student debt, owing an average of $28,400 per borrower, according to LendEDU.
Altogether, total student loan debt in the U.S. tops $1.4 trillion (including more than $165 billion of private student loan debt), which makes it the second-largest expense an individual is likely to make in a lifetime β right after purchasing a home.
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11b4829d0a32b7bb3ad5e97b64db5333 | https://www.cnbc.com/2017/07/18/the-us-is-losing-ground-to-other-nations-on-retirement-security.html | The US is losing ground when it comes to retirement security | The US is losing ground when it comes to retirement security
VIDEO0:4800:48The US is losing ground when it comes to retirement securityNews Videos
All your retirement dreams can come true, just maybe not in the U.S.
Among the leading nations for retirement security, the United States didn't even crack the top 15, according to the 2017 Global Retirement Index by Natixis Global Asset Management.
Europe, however, continued to dominate the top spots, with Norway at No. 1 for the second year in a row, followed by Switzerland and Iceland. Sweden ranked No. 4 and New Zealand rounded out the top 5, Natixis reported.
The top 20 nations, along with their standing in last year's Global Retirement Index, are:
1. Norway (No. 1 in 2016)6. Australia (6)11. Canada (10)16. Czech Republic (18)2. Switzerland (2)7. Germany (7)12. Finland (11)17. United States (14)3. Iceland (3)8. Denmark (12)13. Austira (9)18. United Kingdom (17)4. Sweden (5)9. Netherlands (8)14. Ireland (16)19. France (20)5. New Zealand (4)10. Luxembourg (13)15. Belgium (15) 20. Israel (19)
With more retirees around the world responsible for their own financial security, the countries that ranked the best benefited from a combination of strong social programs, widely accessible health care and low levels of income inequality, according to Natixis.
Recent public spending in top-ranked Norway has bolstered the nation's pension plans, helped in part by the country's massive sovereign wealth fund. Other high-ranked countries, such as New Zealand and Australia, have universal, mandatory retirement savings plans.
Meanwhile, the United States slipped three spots to 17th for retirement security, according to the report.
Despite high per-capita income, stable financial institutions, low inflation, low unemployment and clean air, the U.S. also has one of the highest levels of income inequality among developed nations and a growing ratio of retirees to employment-age adults, which means there are fewer workers to support programs such as Social Security and Medicare.
VIDEO1:0701:07How living longer changes your retirement planningRetire Well
A little more than half of working-age households are at risk of being unable to maintain their current standard of living in retirement, according to the National Retirement Risk Index measurement from the Center for Retirement Research at Boston College.
As a result, many workers say they are expecting to work past age 70, if they retire at all. And as they approach retirement age, older Americans are becoming steadily more pessimistic about their future economic prospects, according to a separate study by United Income, a startup that aims to apply big-data analysis to financial planning.
As much as 88 percent of Americans agree that the nation faces a retirement crisis, according to one survey by the Washington, D.C.-based National Institute on Retirement Security pension research group.
Natixis examined access to financial services and quality health care as well as the ability to live comfortably in a clean, safe environment across 43 countries.
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64b7ddb3f62e93d883a3030d62a346c6 | https://www.cnbc.com/2017/07/19/6-things-elon-musk-must-do-now-to-keep-tesla-on-track.html | 6 things Elon Musk must do now to keep Tesla on track | 6 things Elon Musk must do now to keep Tesla on track
VIDEO1:2901:295 things Elon Musk must do to keep Tesla on trackDigital Original
Elon Musk's Tesla is finally delivering the first of its Model 3 cars β the mass-market all-electric vehicle, priced as low as $35,000 before tax credits, that will go a long way toward showing whether Tesla will ever live up to its stock market hype.
Yet Musk and his company remain dogged by skeptics, who point to Tesla's losses, debt load and shaky record of delivering on near-term promises about shipments and manufacturing as reasons to sell the shares short. Even as Tesla's stock has risen more than 50 percent this year, short interest has reached nearly 30 percent of shares that don't belong to insiders, as other investors bet on a big drop. Tesla stock is down 13 percent in the past month.
Even Musk thinks the stock is a little bit crazy, and helped to spark more selling on July 17 with comments that shares are "higher than we deserve right now."
What should Musk do to justify the hype while also meeting the legitimate issues that skeptics identify? We came up with suggestions based on Wall Street research and analysis from market pundits.
The most persistent criticism of Musk and Tesla has been that it makes promises it doesn't keep, especially about how quickly the company can expand auto production.
One solution: Hire a big-name chief operating officer with a reputation as a manufacturing guru. On a team led by a largely self-taught production expert who also runs a solar-panel company (the former SolarCity, which Tesla acquired last fall) and the rocket firm SpaceX, adding an executive who lives and breathes manufacturing excellence and fills in gaps in Musk's background would be a clear win. And Musk can keep on making pronouncements at offsite conferences about climate change and machine learning that suggest he's really more into vision β which he does better than nearly anyone β than operations.
Charley Grant, who covers Tesla for The Wall Street Journal's "Heard on the Street" column, rarely tires of pointing out that Tesla hasn't updated the number of Model 3's on back order for more than a year. It's hard to come up with a number that would tell investors more about the company's medium-term future and whether demand for Teslas is softening as competitors roll out electric models, like Chevrolet's Bolt.
On the other hand, the Bolt has sold about 8,000 units so far since its launch in December 2016. The Model 3 backlog is about 400,000. On Monday, Chevy said it was extending a production shutdown at a Bolt plant due to high inventory.
Jim Cramer noted on CNBC that Musk has evaded questions about whether missed guidance on shipments of Model X SUV crossovers and Model S sedans is a sign that demand for the expensive electric vehicles has reached a plateau. And no one really knows how to evaluate Musk's comment last year that the Model Y compact SUV, not even expected to hit the market until 2019 or 2020, will sell as many as 1 million units annually.
Tesla Motors CEO Elon Musk introduces the "falcon wing" door on the Model X electric sports-utility vehicle during a presentation in Fremont, California, on September 29, 2015.Stephen Lam | Reuters
The answer is to give Wall Street more information.The best way to shut down guesses and surmises about demand is with real information that will let analysts and investors evaluate the long-term trajectory of Tesla's business.
When Tesla's stock wobbles, as in the drop over the last month, it's often because the company has had a minor miss on a promise about delivery schedules, sometimes driven by short-term manufacturing issues (see "Hire a Chief Operating Officer"). The most recent drop happened when Tesla said it shipped 22,000 vehicles in the second quarter, pushing first-half sales to the low end of its guidance range.
More from iCONIC Tour:The crucial decision Elon Musk made when he was brokeMeet the $30 million fruit seller keeping Elon Musk's employees happyPeter Thiel is backing a 22-year-old's dream to clean the oceans
One obvious answer is to stop making short-term promises about details that will come out in the wash once the market knows if Tesla can really sell a million Model 3 units a year, as Musk has predicted. (Global unit sales of all cars and light trucks this year are expected to be about 93.5 million, according to IHS Markit). A few thousand cars, give or take in a given quarter, simply won't matter within a year. Tesla's successes, or failures, will be on a bigger scale. So give the noise machine one less thing to talk about and focus on the things (like demand) that matter in the long run.
Looming competition from Apple and Alphabet make Tesla bulls' favorite idea β that its electric cars will end up powering a ride-sharing network of self-driving vehicles β less and less certain. Wall Street knows Tesla is interested in the ride-service business, but details of how fast it might happen, and how Tesla might work with partners to bring it to market, remain obscure.
The solution: Decide on a strategy relatively quickly and begin communicating it to Wall Street, including ballpark estimates of what it will cost to go to market and when. Musk's commentary on the subject has been in broad terms. The time to begin explaining how it will work is at hand. If the market decides the plan is workable, Tesla shares should move up toward the $500 best-case targets of bullish analysts like Morgan Stanley's Adam Jonas, who thinks a mobility service would justify the price.
Morgan Stanley estimates that Alphabet's Waymo mobility business could be worth $70 billion by 2030 if it takes even 1 percent of the world market for mobility, measured in miles. That's more than Tesla's worth now. CNBC's Jim Cramer has observed that self-driving car services companies, and those that sell technology to them, are likely to command much higher stock multiples than a maturing automaker like Tesla will be able to in the medium term.
It's hard to say precisely what multiple of sales or profit Tesla Mobility might command as a separate business, or as a tracking stock if Musk chooses to manage Tesla's manufacturing and service units as one company for operational reasons. But either a pure information-technology seller or a tech-driven car service would likely command a much higher multiple than an automaker. A software-driven business that supplies multiple automakers (think Amazon Web Services, rather than Apple's closed operating system) should also be able to become profitable faster, with better long-term margins, than any business that depends on bending steel.
Mobility will eventually generate a lot of money, for Tesla or a competitor. And a well-timed spinoff or tracking stock may be the best way to put the biggest share of that money in shareholders' pockets.
The biggest argument bears have about Tesla is that it consumes too much money, as investment in its Gigafactory battery plant in Nevada and other expansion projects led to nearly $2 billion in negative free cash flow over the 12 months ending in March. The fear stoked is that at some point the bond market will give up on Tesla, refuse to buy the new bonds, and the shares will go into a tailspin. The company's relatively low bond rating β Standard & Poor's rates its debt B-, which is below investment grade β feeds the argument.
"In our opinion, the direction of Tesla's share price will be dominated by (a) its pace of cash consumption, (b) the excellence and excitement of its products and (c) the openness of capital markets to fund the company's plan," Jonas wrote last week.
The solution is to wean Tesla off of its near-term dependence on the capital markets by turning at least modestly profitable, which Goldman Sachs projects will happen by next year. Tesla has done something like this before, making $574 million of operating cash flow in the middle two quarters of 2016. Whether they can soon do it again depends on how many Model 3's Musk's company can sell. Tesla's $834 million R&D budget was spread over just $7 billion in sales.
That should become a much less painful bite when, or if, the company demonstrates it can manufacture cars rapidly enough to meet pent-up demand, letting Tesla continue to invest in mobility while still showing the markets that a long-running payoff on its Tesla investment is just around the corner. But it could mean Musk has to go slower on other expansions, something he might not be willing to do.
β By Tim Mullaney, special to CNBC.com
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dbb458287bbd10ab60c912a51b15a318 | https://www.cnbc.com/2017/07/19/iphone-pro-will-arrive-on-time-but-in-limited-quantities-jpmorgan-says.html | 'IPhone Pro' will arrive on time but in limited quantities, JPMorgan says | 'IPhone Pro' will arrive on time but in limited quantities, JPMorgan says
VIDEO0:4000:40'IPhone Pro' will arrive on time but in limited quantities, JPMorgan saysNews Videos
JPMorgan said Wednesday the Apple iPhone Pro, also often referred to as the iPhone 8, isn't delayed.
Instead, the bank said, Apple's highest-end iPhone will launch on time but will only be available in limited quantities at first.
This follows several reports around Wall Street that have suggested Apple's iPhone won't launch until October or even December, due to issues related to embedding a fingerprint reader into the phone's screen.
"Importantly, we do not believe that Apple's production schedule is still changing materially with most current delay reports simply dated reverberations of decisions Apple made back in the spring," JPMorgan's Rod Hall said in a note to investors. "We expect a small amount of late September EMS [electronics manufacturing service] output for the Pro model and then ramping production through October with target output levels achieved in late October/early November."
The firm expects the iPhone to cost more due to higher production costs and has increased its expected average selling price of the iPhone by $100 to $1,100. The company said it's retaining its December 2018 price target of $165.
The new iPhone, whether it's called the iPhone 8 or the iPhone Pro, is expected to offer new features including a brighter and more colorful OLED screen from Samsung, wireless charging and face recognition.
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