Trump can use these powers to pressure US companies to leave China

President Donald Trump speaks to the media as he departs the White House in Washington, DC, on August 21, 2019. Jim Watson | AFP | Getty ImagesHours after China announced retaliatory tariffs on U.S. goods on Friday, President Donald Trump ordered U.S. companies to “start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.” The stakes are high: U.S. companies invested a total of $256 billion in China between 1990 and 2017, compared with


President Donald Trump speaks to the media as he departs the White House in Washington, DC, on August 21, 2019. Jim Watson | AFP | Getty ImagesHours after China announced retaliatory tariffs on U.S. goods on Friday, President Donald Trump ordered U.S. companies to “start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.” The stakes are high: U.S. companies invested a total of $256 billion in China between 1990 and 2017, compared with
Trump can use these powers to pressure US companies to leave China Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-24
Keywords: news, cnbc, companies, emergency, china, chinese, leave, international, pressure, law, legal, companies, trump, tariffs, president, powers


Trump can use these powers to pressure US companies to leave China

President Donald Trump speaks to the media as he departs the White House in Washington, DC, on August 21, 2019. Jim Watson | AFP | Getty Images

Hours after China announced retaliatory tariffs on U.S. goods on Friday, President Donald Trump ordered U.S. companies to “start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.” The stakes are high: U.S. companies invested a total of $256 billion in China between 1990 and 2017, compared with $140 billion Chinese companies have invested in the United States, according to estimates by the Rhodium Group research institute. Some U.S. companies had been shifting operations out of China even before the tit-for-tat tariff trade war began more than a year ago. But winding down operations and shifting production out of China completely would take time. Further, many U.S. companies such as those in the aerospace, services and retail sectors would be sure to resist pressure to leave a market that is not only huge but growing. Unlike China, the United States does not have a centrally planned economy. So what legal action can the president take to compel American companies to do his bidding? Trump does have some powerful tools that would not require approval from U.S. Congress:

More tariffs

Trump could do more of what he’s already doing, that is hiking tariffs to squeeze company profits enough for them to make it no longer worth their while to operate out of China. Trump on Friday boosted by 5 percentage points the 25% tariffs already in place on nearly $250 billion of Chinese imports, including raw materials, machinery, and finished goods, with the new higher 30% rate to take effect on Oct. 1. He said planned 10% tariffs on about $300 billion worth of additional Chinese-made consumer goods would be raised to 15%, with those measures set to take effect on Sept. 1 and Dec. 15. In addition to making it more expensive to buy components from Chinese suppliers, tariff hikes punish U.S. firms that manufacture goods through joint ventures in China.

“National Emergency”

Trump could treat China more like Iran and order sanctions, which would involve declaring a national emergency under a 1977 law called the International Emergency Economic Powers Act, or IEEPA. Once an emergency is declared, the law gives Trump broad authority to block the activities of individual companies or even entire economic sectors, former federal officials and legal experts said. For example, by stating that Chinese theft of U.S. companies’ intellectual property constitutes a national emergency, Trump could order U.S. companies to avoid certain transactions, such as buying Chinese technology products, said Tim Meyer, director of the International Legal Studies Program at Vanderbilt Law School in Nashville. Trump used a similar strategy earlier this year when he said illegal immigration was an emergency and threatened to put tariffs on all Mexican imports. Past presidents have invoked IEEPA to freeze the assets of foreign governments, such as when former President Jimmy Carter in 1979 blocked assets owned by the Iranian government from passing through the U.S. financial system. “The IEEPA framework is broad enough to do something blunt,” said Meyer. Using it could risk unintended harm to the U.S. economy, said Peter Harrell, a former senior State Department official responsible for sanctions, now at the Center for a New American Security. U.S. officials would need to weigh the impact of China’s likely retaliation and how U.S. companies would be affected. Invoking IEEPA could also trigger legal challenges in U.S. courts, said Mark Wu, a professor of international trade at Harvard Law School.

Federal procurement curbs

Another option that would not require congressional action would be to ban U.S. companies from competing for federal contracts if they also have operations in China, said Bill Reinsch, a senior adviser at the Center for Strategic and International Studies think tank. Such a measure might be targeted specifically at certain sectors since a blanket order would hit companies such as Boeing (BA.N), which is both a key weapons maker for the Pentagon and the top U.S. exporter. Boeing opened its first completion plant for 737 airliners in China in December, a strategic investment aimed at building a sales lead over its European arch-rival Airbus (AIR.PA). Boeing and Airbus have been expanding their footprint in China as they vie for orders in the country’s fast-growing aviation market, which is expected to overtake the United States as the world’s largest in the next decade.

1917 Trading with the Enemy Act


Company: cnbc, Activity: cnbc, Date: 2019-08-24
Keywords: news, cnbc, companies, emergency, china, chinese, leave, international, pressure, law, legal, companies, trump, tariffs, president, powers


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Trump says he’s ordering American companies to immediately start looking for an alternative to China

President Donald Trump on Friday said he was ordering U.S. companies to “immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.” Trump also said he was ordering all U.S. postal carriers, including FedEx, Amazon, UPS and United States Post Office, “to SEARCH FOR & REFUSE all deliveries of Fentanyl from China (or anywhere else!).” And Trump said he will respond this afternoon to China’s newest round of tariffs on U.S. good


President Donald Trump on Friday said he was ordering U.S. companies to “immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.” Trump also said he was ordering all U.S. postal carriers, including FedEx, Amazon, UPS and United States Post Office, “to SEARCH FOR & REFUSE all deliveries of Fentanyl from China (or anywhere else!).” And Trump said he will respond this afternoon to China’s newest round of tariffs on U.S. good
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Company: cnbc, Activity: cnbc, Date: 2019-08-23  Authors: kevin breuninger
Keywords: news, cnbc, companies, postal, respond, american, companies, powell, trump, orders, immediately, tweets, ups, start, china, looking, president, ordering, hes, alternative


Trump says he's ordering American companies to immediately start looking for an alternative to China

President Donald Trump on Friday said he was ordering U.S. companies to “immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.”

Trump also said he was ordering all U.S. postal carriers, including FedEx, Amazon, UPS and United States Post Office, “to SEARCH FOR & REFUSE all deliveries of Fentanyl from China (or anywhere else!).”

And Trump said he will respond this afternoon to China’s newest round of tariffs on U.S. goods.

The White House did not immediately respond when asked if the announcement, delivered in a four-part Twitter thread Friday morning, constituted an official order from the president.

It was not immediately clear how, or under what authority, the president could implement these declared orders, or whether he had already done so.

Stocks sank to session lows shortly after Trump’s tweets. The Dow Jones Industrial Average fell more than 435 points, or 1.6%, while the S&P 500 slid 1.7% and the Nasdaq Composite dove 2%.

In a statement, UPS said that it “follows all applicable laws and administrative orders of the governments in the countries where we do business. We work closely with regulatory authorities to monitor for prohibited substances.”

FedEx also responded: “FedEx already has extensive security measures in place to prevent the use of our networks for illegal purposes. We follow the laws and regulations everywhere we do business and have a long history of close cooperation with authorities.”

Amazon and the Postal Service were not immediately available for comment.

Trump’s tweets followed another missive against Federal Reserve Chairman Jay Powell, who had just pledged to “act as appropriate” to sustain the U.S. economy amid the “deteriorating” global economic outlook.

In an apparent response, Trump tweeted: “Who is our bigger enemy,” Powell or Chinese President Xi Jinping?


Company: cnbc, Activity: cnbc, Date: 2019-08-23  Authors: kevin breuninger
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EU drafts plan for hundred billion-dollar fund to take on US tech firms, reports say

Ursula von der Leyen, incoming president of the European Commission, left, speaks during news conference at the European Parliament, in Strasbourg, France, on Tuesday, July 16, 2019. European Union officials drafted a plan to launch a sovereign wealth fund to invest in companies that could compete with U.S. and Chinese tech giants, according to reports in the Financial Times and Politico. The reports, citing an internal document, said EU officials have drafted a document for a “European Future F


Ursula von der Leyen, incoming president of the European Commission, left, speaks during news conference at the European Parliament, in Strasbourg, France, on Tuesday, July 16, 2019. European Union officials drafted a plan to launch a sovereign wealth fund to invest in companies that could compete with U.S. and Chinese tech giants, according to reports in the Financial Times and Politico. The reports, citing an internal document, said EU officials have drafted a document for a “European Future F
EU drafts plan for hundred billion-dollar fund to take on US tech firms, reports say Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-23  Authors: elizabeth schulze
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EU drafts plan for hundred billion-dollar fund to take on US tech firms, reports say

Ursula von der Leyen, incoming president of the European Commission, left, speaks during news conference at the European Parliament, in Strasbourg, France, on Tuesday, July 16, 2019.

European Union officials drafted a plan to launch a sovereign wealth fund to invest in companies that could compete with U.S. and Chinese tech giants, according to reports in the Financial Times and Politico.

The reports, citing an internal document, said EU officials have drafted a document for a “European Future Fund” that would invest 100 billion euros ($110 billion) in “high-potential European companies.”

The proposal would mark a drastic step from the EU to try to encourage companies within the continent to catch up with competitors from the U.S. and China. The FT said the document specifically named threats from U.S. tech giants Google, Apple, Facebook and Amazon and Chinese firms Baidu, Alibaba and Tencent.

“Europe has no such companies,” the FT quoted the document as saying. “This presents a risk to growth, jobs, and to Europe’s influence in key strategic sectors.”


Company: cnbc, Activity: cnbc, Date: 2019-08-23  Authors: elizabeth schulze
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Apple and chip stocks slide after Trump orders US companies to look for alternative to China

Semiconductor stocks and shares of Apple slid more than their peers in the tech sector on Friday, after President Donald Trump said U.S. companies should “immediately start looking for an alternative” to their operations in China. Among the chip companies, Qualcomm slid 4.7%, Nvidia lost 5.2%, Advanced Micro Devices dropped 7.4%, Micron fell roughly 4% and Broadcom slid 5.3%. Apple has felt the effects of Trump’s trade war with China more than most technology companies. Trump’s comments on Frida


Semiconductor stocks and shares of Apple slid more than their peers in the tech sector on Friday, after President Donald Trump said U.S. companies should “immediately start looking for an alternative” to their operations in China. Among the chip companies, Qualcomm slid 4.7%, Nvidia lost 5.2%, Advanced Micro Devices dropped 7.4%, Micron fell roughly 4% and Broadcom slid 5.3%. Apple has felt the effects of Trump’s trade war with China more than most technology companies. Trump’s comments on Frida
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Company: cnbc, Activity: cnbc, Date: 2019-08-23  Authors: annie palmer
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Apple and chip stocks slide after Trump orders US companies to look for alternative to China

Semiconductor stocks and shares of Apple slid more than their peers in the tech sector on Friday, after President Donald Trump said U.S. companies should “immediately start looking for an alternative” to their operations in China.

Shares of Apple ended the day down 4.6%, while the VanEck Vectors Semiconductor ETF declined 4.1%. Among the chip companies, Qualcomm slid 4.7%, Nvidia lost 5.2%, Advanced Micro Devices dropped 7.4%, Micron fell roughly 4% and Broadcom slid 5.3%.

The tech-heavy Nasdaq was off 2.6%, while the Dow Jones Industrial Average slid 2.3% and the S&P 500 fell 2.5%.

Apple has felt the effects of Trump’s trade war with China more than most technology companies. The company conducts the majority of its manufacturing process in China and the Chinese market represents a significant portion of its sales.

Trump’s comments on Friday mark the latest fallout in the trade war between the U.S. and China.

Markets immediately began to turn lower after Trump tweeted: “Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing … your companies HOME and making your products in the USA.”

Trump’s tweet came after China on Friday pledged to levy tariffs on $75 billion more of U.S. goods, including autos. The new tariffs followed Trump’s plan to impose duties on $300 billion worth of China’s goods by December.


Company: cnbc, Activity: cnbc, Date: 2019-08-23  Authors: annie palmer
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VMware adjusts for a ‘two trading-bloc world’ due to US-China trade war, says CEO

American companies are having to adjust to operating in two distinct Chinese and American marketplaces as the trade war escalates, VMware CEO Patrick Gelsinger told CNBC on Friday. “We are adjusting our strategy to really be in a two trading-bloc world,” Gelsinger said. The escalating trade war between the world’s two largest economies has been going on for over a year, with China announcing retaliatory measures Friday. The cloud software company also announced Thursday that it’s acquiring softw


American companies are having to adjust to operating in two distinct Chinese and American marketplaces as the trade war escalates, VMware CEO Patrick Gelsinger told CNBC on Friday. “We are adjusting our strategy to really be in a two trading-bloc world,” Gelsinger said. The escalating trade war between the world’s two largest economies has been going on for over a year, with China announcing retaliatory measures Friday. The cloud software company also announced Thursday that it’s acquiring softw
VMware adjusts for a ‘two trading-bloc world’ due to US-China trade war, says CEO Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-23  Authors: jessica bursztynsky
Keywords: news, cnbc, companies, vmware, business, tradingbloc, american, companies, world, trade, adjusts, uschina, war, gelsinger, software, china, ceo


VMware adjusts for a 'two trading-bloc world' due to US-China trade war, says CEO

American companies are having to adjust to operating in two distinct Chinese and American marketplaces as the trade war escalates, VMware CEO Patrick Gelsinger told CNBC on Friday.

“We are adjusting our strategy to really be in a two trading-bloc world,” Gelsinger said. “Everybody has sort of realized this dispute will go on for a while and we’re working through how best to manage our businesses in light of that.”

The escalating trade war between the world’s two largest economies has been going on for over a year, with China announcing retaliatory measures Friday.

Beijing will impose new tariffs on $75 billion worth of U.S. goods and resume duties on American autos, starting Sept. 1 and Dec. 15, respectively. It follows President Donald Trump’s threat to impose 10% tariffs on $300 billion of Chinese goods not already subject to duties, also set to be implemented on Sept. 1 and Dec. 15.

“I believe in many cases, customers are saying, ‘how do I continue to do business with and within China even as there’s an increasing challenge?'” Gelsinger said. “I think most companies are already figuring out how to live in that kind of world already. And clearly, we expect that our strategy needs to accommodate that.”

Gelsinger appeared on CNBC’s “Squawk Box” a day after VMware’s second-quarter earnings and revenue beat beat Wall Street estimates. The cloud software company also announced Thursday that it’s acquiring software companies Pivotal Software and Carbon Black in separate deals.

Shares of VMware were down 8.9% on Friday afternoon.

VMware “saw good results from our China business last quarter,” Gelsinger said.

“Not to the level we would have hoped, but still saw growth there,” the CEO added. “We’re making adjustments to it even as we’re long-term committed to China. We also expect there will be increasing long-term barriers between the two markets. And we have to adjust, and I believe every other business will do likewise.”


Company: cnbc, Activity: cnbc, Date: 2019-08-23  Authors: jessica bursztynsky
Keywords: news, cnbc, companies, vmware, business, tradingbloc, american, companies, world, trade, adjusts, uschina, war, gelsinger, software, china, ceo


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Huawei launches A.I. chip as it looks to defy US pressure, pitting it against giants like Qualcomm and Nvidia

Huawei announced the commercial availability of an artificial intelligence (AI) chip Friday, pitting it against major American giants like Qualcomm and Nvidia, as it looks to defy continued U.S. pressure and prove it can still bring out core technology. The chip, called the Ascend 910, was first unveiled in October last year and is aimed at data centers. Companies using AI applications require huge amounts of data to train smart algorithms, which can take several days or weeks. It is on a blackl


Huawei announced the commercial availability of an artificial intelligence (AI) chip Friday, pitting it against major American giants like Qualcomm and Nvidia, as it looks to defy continued U.S. pressure and prove it can still bring out core technology. The chip, called the Ascend 910, was first unveiled in October last year and is aimed at data centers. Companies using AI applications require huge amounts of data to train smart algorithms, which can take several days or weeks. It is on a blackl
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Company: cnbc, Activity: cnbc, Date: 2019-08-23  Authors: arjun kharpal
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Huawei launches A.I. chip as it looks to defy US pressure, pitting it against giants like Qualcomm and Nvidia

Huawei announced the commercial availability of an artificial intelligence (AI) chip Friday, pitting it against major American giants like Qualcomm and Nvidia, as it looks to defy continued U.S. pressure and prove it can still bring out core technology.

The chip, called the Ascend 910, was first unveiled in October last year and is aimed at data centers. Companies using AI applications require huge amounts of data to train smart algorithms, which can take several days or weeks. Huawei claims that its chip can process more data in a faster amount of time than its competitors and help train networks in a matter of minutes.

“We have been making steady progress since we announced our AI strategy in October last year,” Eric Xu, one of Huawei’s rotating chairmen, said in a press release. “Everything is moving forward according to plan, from R&D (research and development) to product launch. We promised a full-stack, all-scenario AI portfolio. And today we delivered.”

It comes as Huawei continues to face pressure from the U.S. government. It is on a blacklist in the U.S. known as the Entity List which restricts American companies from doing business with the Chinese company. Huawei has been granted another 90-day reprieve to allow U.S. firms to carry out specific transactions with the firm. Huawei relies on a number of U.S. suppliers for key technology.


Company: cnbc, Activity: cnbc, Date: 2019-08-23  Authors: arjun kharpal
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Amazon expands its online grocery business to India

Amazon is expanding its online grocery business to India as part of its plans for the fast-growing market, the company announced Thursday. The move comes one day after Amazon launched its biggest campus in the world in Hyderabad, India, according to Reuters. The company has invested roughly $5 billion in the first five years of its business there, according to BloombergQuint. Last year, CNBC affiliate CNBC TV-18 reported the company is set to invest another $2 billion in the country. While India


Amazon is expanding its online grocery business to India as part of its plans for the fast-growing market, the company announced Thursday. The move comes one day after Amazon launched its biggest campus in the world in Hyderabad, India, according to Reuters. The company has invested roughly $5 billion in the first five years of its business there, according to BloombergQuint. Last year, CNBC affiliate CNBC TV-18 reported the company is set to invest another $2 billion in the country. While India
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Company: cnbc, Activity: cnbc, Date: 2019-08-22  Authors: lauren feiner
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Amazon expands its online grocery business to India

Amazon Founder and CEO Jeff Bezos addresses the audience during a keynote session at the Amazon Re:MARS conference on robotics and artificial intelligence at the Aria Hotel in Las Vegas, Nevada on June 6, 2019.

Amazon is expanding its online grocery business to India as part of its plans for the fast-growing market, the company announced Thursday.

Amazon Fresh will be available to customers in some parts of Bengaluru through its main India website and app, the company said, and it will later be rolled out to other cities. The service will deliver groceries within two hours between 6 a.m. and midnight, according to a press release.

The move comes one day after Amazon launched its biggest campus in the world in Hyderabad, India, according to Reuters. The campus will serve as an outpost for 15,000 employees and sprawl over 9.5 acres, Reuters reported, saying the company currently has 62,000 employees in the country.

Amazon has already invested heavily in India, with hundreds of open positions listed in the region as of January, including in its retail and marketplace divisions. The company has invested roughly $5 billion in the first five years of its business there, according to BloombergQuint. Last year, CNBC affiliate CNBC TV-18 reported the company is set to invest another $2 billion in the country.

While India’s large population represents a huge opportunity for Amazon, local regulations could also slow down its growth in the region. India’s new e-commerce law came into effect in February, banning companies like Amazon and its local competitor Flipkart from selling products from companies in which they have an equity stake. Analysts estimated the rules would have a short-term impact on the e-commerce companies while they build new models to comply with the rules.

Subscribe to CNBC on YouTube.

WATCH: How America’s biggest grocer is fighting back against Amazon and Walmart


Company: cnbc, Activity: cnbc, Date: 2019-08-22  Authors: lauren feiner
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Digital wave and values-based business are driving Salesforce’s growth, CEO says

Modern corporations have shifted focus to partner with companies that are value-focused, Salesforce’s Keith Block said on CNBC Thursday. That’s why Salesforce joined about 200 other businesses to proclaim that pleasing shareholders is no longer their main goal, Block said. “A lot of this, Jim, is really powered by this wave of digital transformation that we’re seeing all over the world,” he said. “Everybody needs to get closer to the customer, everybody is trying to improve that customer experie


Modern corporations have shifted focus to partner with companies that are value-focused, Salesforce’s Keith Block said on CNBC Thursday. That’s why Salesforce joined about 200 other businesses to proclaim that pleasing shareholders is no longer their main goal, Block said. “A lot of this, Jim, is really powered by this wave of digital transformation that we’re seeing all over the world,” he said. “Everybody needs to get closer to the customer, everybody is trying to improve that customer experie
Digital wave and values-based business are driving Salesforce’s growth, CEO says Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-22  Authors: tyler clifford
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Digital wave and values-based business are driving Salesforce's growth, CEO says

Modern corporations have shifted focus to partner with companies that are value-focused, Salesforce’s Keith Block said on CNBC Thursday.

That’s why Salesforce joined about 200 other businesses to proclaim that pleasing shareholders is no longer their main goal, Block said. The co-CEO was responding to a question from Jim Cramer about how the company is having an “Impact Per Share” — what companies are doing to promote eco-friendly and sustainability initiatives.

On top of catering to shareholders, “it’s about stakeholders, it’s about your employees, it’s about you partners and suppliers. It’s about the community, it’s about the environment,” Block said in a “Mad Money” interview. “When we speak to CEOs all over the world, they want to know what our values are all about. And if they’re going to bet their business on us, they want to be aligned with those values.”

The Business Roundtable, a group of chief executive officers from major U.S. corporations led by J.P. Morgan Chase’s Jamie Dimon, released a statement earlier this week about the “purpose of a corporation,” which comes at a time where more and more consumers are care about shopping at mission-driven businesses.

After the market closed Thursday, Salesforce delivered shareholders a beat-and-raise quarter. The company topped earnings and revenue expectations while upping its guidance for the full year, CNBC reported.

Revenue grew 22% to $4 billion in the quarter and the full-year outlook was increased to $16.9 billion, which would equate to 27% year-over-year growth, Block said in the “Mad Money” one-on-one.

“A lot of this, Jim, is really powered by this wave of digital transformation that we’re seeing all over the world,” he said. “Everybody needs to get closer to the customer, everybody is trying to improve that customer experience, and that’s where Salesforce really brings value to the table.”

When it comes to tariffs on Chinese imports and services, Salesforce appears to be immune, Cramer said. In response, Block said it’s because companies won’t stop investing into digitizing their operations.

“That’s why you’re seeing this growth, you’re seeing these results,” he said. “And we’re just co-innovating and co-creating with these companies and that’s why we’re having so much success on their behalf.”

Shares of Salesforce rose slightly on Thursday ahead of its earnings call. The stock climbed 7% in after hours trading.


Company: cnbc, Activity: cnbc, Date: 2019-08-22  Authors: tyler clifford
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Corporate earnings show trade war straining US economy as companies lean on shoppers to prop up profits

Federal Reserve members expressed concerns last month about weak sectors of the economy like manufacturing. But strong job growth, wages that are rising — if slowly — and robust consumer spending are fueling the economy and some pockets of strong earnings. Consumers still spending but growth has slowedU.S. consumer spending, which drives the lion’s share of the economy, is growing but at a slower pace. In June, U.S. consumer spending increased 0.3%, down from the 0.5% monthly increase posted in


Federal Reserve members expressed concerns last month about weak sectors of the economy like manufacturing. But strong job growth, wages that are rising — if slowly — and robust consumer spending are fueling the economy and some pockets of strong earnings. Consumers still spending but growth has slowedU.S. consumer spending, which drives the lion’s share of the economy, is growing but at a slower pace. In June, U.S. consumer spending increased 0.3%, down from the 0.5% monthly increase posted in
Corporate earnings show trade war straining US economy as companies lean on shoppers to prop up profits Cached Page below :
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Corporate earnings show trade war straining US economy as companies lean on shoppers to prop up profits

Looking for reasons to be optimistic about the U.S. economy? Try the aisles of Target. Target’s stock soared more than 20% to a record $103 a share on Wednesday after the retailer reported a 17% jump in second-quarter profit, higher sales and a sunnier full-year outlook as its big investments in same-day delivery and in-store pickup services drew more customers. The retailer and some of its big competitors like Walmart are standouts in what’s shaped up to be a lackluster earnings season for U.S. companies on the whole. The S&P 500, with more than 94% of its companies reporting the most-recent quarterly earnings, is on track for a ho-hum 1.2% increase in quarterly profits from a year earlier, according to data compiled by Refinitiv as of Wednesday afternoon. Sales at the 500 largest publicly traded U.S. companies rose by an average of 4.7% in the last quarter, the slowest growth rate since the third quarter of 2016.

Unwelcome news

The performance is unwelcome news at a time of stock market volatility and when forecasters are trimming economic growth outlooks, trade tensions are intensifying and driving up the cost of imported goods and economists are scratching their heads to figure out if we are headed for recession. “We’ve reached a very high plateau, but it is a plateau,” said David Kelly, chief global market strategist at J.P. Morgan Asset Management. “The economy is slowing.” The U.S. economy expanded by 2.1% in the second quarter, the lowest rate since the first quarter of 2017 and down from 3.1% in the first three months of this year. Federal Reserve members expressed concerns last month about weak sectors of the economy like manufacturing. They said trade uncertainty amid the tit-for-tat trade battle with China, coupled with global growth worries, continues “to weigh on business confidence and firms’ capital expenditure plans,” according to minutes from the Fed’s July meeting. At that meeting, the Federal Reserve cut interest rates for the first time in a decade, but the minutes released Wednesday said the move shouldn’t be viewed as a “pre-set course ” for future cuts, meaning companies may not be able to count on borrowing at lower rates. But strong job growth, wages that are rising — if slowly — and robust consumer spending are fueling the economy and some pockets of strong earnings. “The economy doesn’t look like it’s heading into a recession because the consumer is still strong,” said Jeremy Zirin, head of Americas equities at UBS Global Wealth Management’s Chief Investment Office.

Consumers still spending but growth has slowed

U.S. consumer spending, which drives the lion’s share of the economy, is growing but at a slower pace. In June, U.S. consumer spending increased 0.3%, down from the 0.5% monthly increase posted in May, the Commerce Department said late last month. But a slew of earnings reports from retailers shows that companies are still growing while their weaker competitors struggle as U.S. consumer shopping habits continue to shift. “The underlying U.S. consumer is doing well, making more money, they’re employed and, more importantly, they’re spending more money,” Bank of America CEO Brian Moynihan said in an interview on CNBC on Tuesday, adding that the bank’s own customers are spending more. “The U.S. consumer continues to spend, and that will keep the U.S. economy in good shape.” U.S. airlines, for example, which make money from flying passengers and from selling frequent-flyer miles to banks that offer rewards to customers who spend with co-branded or other rewards credit cards, are on track for a 10th consecutive year of profitability. Executives at large carriers said on earnings calls last month that the strong U.S. economy helped them grow revenues.

Not all retailers are equal

But the spoils aren’t spread equally. On the retail front, big-name stores like Target and Walmart, which invested in their companies to better take on Amazon, have posted strong results. “There are clear winners and losers in the industry today … and the winners are companies like Target investing in stores,” Target CEO Brian Cornell said on a media call after reporting earnings Wednesday. He didn’t name companies specifically but said there are “share donors” aiding Target’s performance. Stores that anchor U.S. malls like troubled J.C. Penney and Macy’s continue to struggle as fewer consumers seek out such big shopping complexes to buy clothing, accessories and other goods. Instead, one-stop shopping destinations like Target and Walmart are appealing to more consumers with their revamped in-house brands, broad selection of national labels, speedy delivery options and real estate spread across the U.S., putting them closer to customers’ homes. J.C. Penney’s stock last month fell below $1, putting it at risk of being delisted by the New York Stock Exchange. “These retailers exemplify the bifurcation taking place in retail between larger cap, off-mall based chains and on-mall retailers facing chronic traffic declines,” said Retail Metrics founder Ken Perkins. He said many apparel chains are the ones still “struggling.” Urban Outfitters this week reported a 35% decline in second-quarter profit and slower sales. L Brands, parent of lingerie company Victoria’s Secret, posted higher-than-expected profits this week but weaker sales. Barneys New York filed for bankruptcy protection this month and said it planned to close stores in Chicago, Las Vegas and Seattle. Even executives at companies that are doing well are cautious. Home-improvement giant Home Depot beat earnings estimates this week but trimmed its outlook because of the potential impact of tariffs on its business.

Weak patches

There are weaker patches in the economy though. Lower fuel prices hurt energy company performance in the last quarter, while global trade tensions, weaker growth and tariffs weigh on the materials and the industrial sectors. Boeing’s 737 Max crisis stemming from two fatal crashes prompted the company to post its biggest loss ever in the second quarter. It has also slowed production and halted deliveries, impacting several suppliers including already-struggling General Electric, which makes engines for the beleaguered jets with its French joint-venture partner Safran. “I think it’s always better when the economy is firing on all four cylinders,” said Kate Warne, chief strategist at Edward Jones, who noted that companies in general “have had more headwinds this year.” However, profit growth appears weak in comparison with last year, when large corporations reported a surge in profits after the big corporate tax cut, she said.

Fragile business confidence


Company: cnbc, Activity: cnbc, Date: 2019-08-22  Authors: leslie josephs
Keywords: news, cnbc, companies, straining, strong, prop, companies, spending, consumer, growth, month, war, economy, target, shoppers, lean, corporate, profits, quarter, trade, earnings


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Box CEO says it would be a disaster if the US-China trade war turned into a ‘digital cold war’

The CEO of cloud storage company Box Inc. told CNBC on Thursday the U.S. should be doing everything possible to avoid a “digital cold war.” “I think it would be a disaster if we end up in that direction,” Box’s Aaron Levie said on “Squawk Alley. ” “I think the general volatility of the market, trade wars, tariffs, all of that is never a good thing for business. Tech companies like Facebook, Google and Microsoft rely heavily on workers born outside the U.S. to fill software engineer positions. In


The CEO of cloud storage company Box Inc. told CNBC on Thursday the U.S. should be doing everything possible to avoid a “digital cold war.” “I think it would be a disaster if we end up in that direction,” Box’s Aaron Levie said on “Squawk Alley. ” “I think the general volatility of the market, trade wars, tariffs, all of that is never a good thing for business. Tech companies like Facebook, Google and Microsoft rely heavily on workers born outside the U.S. to fill software engineer positions. In
Box CEO says it would be a disaster if the US-China trade war turned into a ‘digital cold war’ Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-22  Authors: jasmine kim
Keywords: news, cnbc, companies, trade, cold, uschina, obtain, digital, software, talent, companies, ceo, ability, world, business, war, box, turned, think, tech, disaster


Box CEO says it would be a disaster if the US-China trade war turned into a 'digital cold war'

The CEO of cloud storage company Box Inc. told CNBC on Thursday the U.S. should be doing everything possible to avoid a “digital cold war.”

“I think it would be a disaster if we end up in that direction,” Box’s Aaron Levie said on “Squawk Alley. ”

The entrepreneur addressed the importance of global trade and business with China. “I think the general volatility of the market, trade wars, tariffs, all of that is never a good thing for business. … We want our customer base to be able to do trade globally in a very efficient way.”

“The ability to impact every consumer or business around the world is the real opportunity and vision for most start-ups and software companies,” he added. “So the ability to do business in China and ability to do business all across the world is an important aspect of being a software company.”

“We don’t want to create a Balkanized internet where you’re doing business on a per-country basis in a very different type of way,” he continued. “What the tech industry is generally looking for is more stability and more long-term thinking around these approaches.”

When addressing his concerns around trade, he also brought attention to issues relating to immigration.

“There’s a lot of conversations around this topic. Unfortunately, they probably don’t [rise] to the same level as some of the other areas that are generating a lot more noise right now,” he said.

He said current immigration policies are “not helping America’s ability to be innovative and [to] bring on the best talents.”

Levie is not the first to bring up these topics as H-1B foreign work visas have been increasingly difficult to obtain for many Silicon Valley employees.

Tech companies like Facebook, Google and Microsoft rely heavily on workers born outside the U.S. to fill software engineer positions. In fact, American tech companies are among the top 30 employers with the most H-1B approvals. However, the Trump administration has started requesting more evidence and paperwork, making it harder for foreign employees to obtain visa status and costing these companies time and money.

“Hopefully in a more stable political environment, we’d be able to have much healthier conversations around talent, education, what the future of STEM looks like and how [we can] make sure that America’s competitive for the next generation of talent. These are the issues that I think every technology company is going to be dealing with for decades to come,” Box CEO said.


Company: cnbc, Activity: cnbc, Date: 2019-08-22  Authors: jasmine kim
Keywords: news, cnbc, companies, trade, cold, uschina, obtain, digital, software, talent, companies, ceo, ability, world, business, war, box, turned, think, tech, disaster


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