Altria’s chance of writing down its Juul investment has ‘increased materially,’ Fitch says

The chance that Altria writes down the value of its $12.8 billion investment in Juul has “increased materially” amid uncertainty around the e-cigarette industry, Fitch credit analysts say. Altria took a 35% stake in e-cigarette market leader Juul late last year to help offset declining sales in its main business, cigarettes. Altria’s stake valued the start-up at $38 billion. “The probability Altria impairs the value of its 35% investment in Juul has increased materially due to considerably dimin


The chance that Altria writes down the value of its $12.8 billion investment in Juul has “increased materially” amid uncertainty around the e-cigarette industry, Fitch credit analysts say. Altria took a 35% stake in e-cigarette market leader Juul late last year to help offset declining sales in its main business, cigarettes. Altria’s stake valued the start-up at $38 billion. “The probability Altria impairs the value of its 35% investment in Juul has increased materially due to considerably dimin
Altria’s chance of writing down its Juul investment has ‘increased materially,’ Fitch says Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-10-09  Authors: angelica lavito, in angelicalavito
Keywords: news, cnbc, companies, chance, analysts, altria, juul, value, fitch, stake, investment, ecigarette, materially, sales, altrias, increased, writing


Altria's chance of writing down its Juul investment has 'increased materially,' Fitch says

Menthol pods for Juul Labs Inc. e-cigarettes are displayed for sale at a store in Princeton, Illinois, U.S., on Monday, Sept. 16, 2019.

The chance that Altria writes down the value of its $12.8 billion investment in Juul has “increased materially” amid uncertainty around the e-cigarette industry, Fitch credit analysts say.

Altria took a 35% stake in e-cigarette market leader Juul late last year to help offset declining sales in its main business, cigarettes. The number of cigarettes Altria sells has been falling for years with smoking rates declining and existing customers quitting or dying.

Juul’s sales were booming when the deal was announced last December. Altria’s stake valued the start-up at $38 billion. Since then, scrutiny around Juul and the e-cigarette industry as a whole has heightened.

State and local lawmakers are banning flavored e-cigarettes, while the Trump administration is readying a plan to remove these products from shelves across the country. An outbreak of a deadly vaping-related lung disease has stoked panic, causing at least some people to reconsider using e-cigarettes.

“The probability Altria impairs the value of its 35% investment in Juul has increased materially due to considerably diminished and uncertain e-vaping growth prospects,” Fitch analysts Bill Densmore and Carla Norfleet Taylor wrote in a note Tuesday.

Hedge fund Darsana reportedly slashed the value of its stake in Juul by more than a third to a price that values the vaping company at $24 billion.

Altria previously said it expects the U.S. e-cigarette industry’s volume sales to grow between 15% and 20% annually with international revenue that equals domestic revenue by 2023, the analysts wrote. That would partially offset the declines in cigarette sales.

“However, long-term growth prospects are now likely reduced due to the uncertain implications from increased regulatory scrutiny and potentially lower consumer confidence in e-vaping products,” they said.

Fitch downgraded Altria’s credit ratings two notches to BBB after Altria made the Juul investment because the deal increased Altria’s leverage. The firm’s forecast has “minimal dividend contributions” from Juul, so a write down would not harm the firm’s negative rating sensitives, the analysts wrote.

Altria and Juul declined to comment.


Company: cnbc, Activity: cnbc, Date: 2019-10-09  Authors: angelica lavito, in angelicalavito
Keywords: news, cnbc, companies, chance, analysts, altria, juul, value, fitch, stake, investment, ecigarette, materially, sales, altrias, increased, writing


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China services sector growth falls to 7-month low, private survey shows

Services account for more than half of China’s economy, providing a key buffer as persistent trade tensions with the United States weigh heavily on the country’s manufacturing sector. The Caixin/Markit services purchasing managers’ index (PMI) fell to 51.3 last month, the weakest since February, versus August’s 52.1. New orders for services in September grew at the fastest pace since January 2018, buoyed by product launches and stronger customer demand. But operating costs hit a one-year high be


Services account for more than half of China’s economy, providing a key buffer as persistent trade tensions with the United States weigh heavily on the country’s manufacturing sector. The Caixin/Markit services purchasing managers’ index (PMI) fell to 51.3 last month, the weakest since February, versus August’s 52.1. New orders for services in September grew at the fastest pace since January 2018, buoyed by product launches and stronger customer demand. But operating costs hit a one-year high be
China services sector growth falls to 7-month low, private survey shows Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-10-08
Keywords: news, cnbc, companies, economy, pmi, orders, growth, private, low, labour, increased, trade, survey, shows, increase, pace, signs, falls, 7month, china, services, sector


China services sector growth falls to 7-month low, private survey shows

A man uses his phone in front of a display showing the Chinese national flag in Beijing, China, on Oct. 23, 2017.

China’s services sector grew at its slowest pace in seven months in September despite a strong increase in new orders, as operating expenses continued to rise at the end of the third quarter, a private survey showed on Tuesday.

Services account for more than half of China’s economy, providing a key buffer as persistent trade tensions with the United States weigh heavily on the country’s manufacturing sector.

The Caixin/Markit services purchasing managers’ index (PMI) fell to 51.3 last month, the weakest since February, versus August’s 52.1. It has stayed above the 50-point that separates growth from contraction on a monthly basis since late 2005.

The fall was in line with the marginal drop in the official non-manufacturing PMI published by the National Bureau of Statistics. It was also in step with signs of general cooling this year as the world’s second-largest economy continues to lose momentum.

New orders for services in September grew at the fastest pace since January 2018, buoyed by product launches and stronger customer demand.

But operating costs hit a one-year high because of an increase in labour, fuel and raw material expenses.

A continued push among firms to stay competitive also limited the increase in prices that they charged, pressuring profit margins.

“China’s economy showed signs of marginal recovery in September, as the labour market improved and domestic demand increased at a faster pace,” said Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group, in a statement alongside the data.

“However, fluctuations in exchange rates, and rising costs of labour and raw materials increased pressure on companies, which restrained business confidence.”

The volume of new work from abroad received increased for the third straight month in September. But after seasonal adjustments, the pace of growth further eased from July.

Expectations regarding the one-year outlook for business activity softened slightly in September. But services firms added jobs at the fastest pace since January 2017.

Beijing has rolled out a mix of fiscal stimulus and monetary easing since early 2018 to cushion the economic slowdown, including hundreds of billions of dollars in infrastructure spending and tax cuts for companies.

But those measures have been slow to trickle through the economy, and with U.S. trade pressure persisting, analysts say a deeper downturn could be inevitable without further policy support.

Caixin’s composite manufacturing and services PMI, also released on Tuesday, rose to a five-month high of 51.9 in September from 51.6 in August, though new export orders again contracted.


Company: cnbc, Activity: cnbc, Date: 2019-10-08
Keywords: news, cnbc, companies, economy, pmi, orders, growth, private, low, labour, increased, trade, survey, shows, increase, pace, signs, falls, 7month, china, services, sector


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Pepsi’s stock jumps as higher advertising spending fuels sales growth and earnings beat

“Given our performance year-to-date, we now expect to meet or exceed our full-year organic revenue growth target of 4%,” CEO Ramon Laguarta said in a statement. The company’s strategy for sales growth includes investing more on marketing and advertising its products. Johnston said that the company is seeing increased financial results as a result of advertising, not just increased sales growth. Revenue growth from those healthier snacks and well-known chip brands helped offset the double-digit s


“Given our performance year-to-date, we now expect to meet or exceed our full-year organic revenue growth target of 4%,” CEO Ramon Laguarta said in a statement. The company’s strategy for sales growth includes investing more on marketing and advertising its products. Johnston said that the company is seeing increased financial results as a result of advertising, not just increased sales growth. Revenue growth from those healthier snacks and well-known chip brands helped offset the double-digit s
Pepsi’s stock jumps as higher advertising spending fuels sales growth and earnings beat Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-10-03  Authors: amelia lucas
Keywords: news, cnbc, companies, growth, higher, spending, earnings, share, company, billion, advertising, pepsis, brands, revenue, beat, jumps, increased, stock, sales, fuels


Pepsi's stock jumps as higher advertising spending fuels sales growth and earnings beat

PepsiCo on Thursday announced quarterly earnings and revenue that topped expectations, as its increased spending on advertising and marketing paid off for brands like Gatorade.

Shares of the food and beverage giant gained 2.6% in premarket trading.

“Given our performance year-to-date, we now expect to meet or exceed our full-year organic revenue growth target of 4%,” CEO Ramon Laguarta said in a statement.

The company reaffirmed its earnings outlook for fiscal 2019. It expects adjusted earnings per share, assuming constant foreign currency exchange rates, to decline by 1%.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

Earnings per share: $1.56, adjusted, vs. $1.50 expected

Revenue: $17.19 billion vs. $16.93 billion expected

Pepsi reported fiscal third-quarter net income of $2.1 billion, or $1.49 per share, down from $2.5 billion, or $1.75 per share, a year earlier. The company’s strategy for sales growth includes investing more on marketing and advertising its products.

“The increased advertising that we have is causing consumers to shop us more aggressively, and our customers are rewarding us with that [grocery] space because they know that we can help them grow,” CFO Hugh Johnston said on CNBC’s “Squawk on the Street.”

Johnston said that the company is seeing increased financial results as a result of advertising, not just increased sales growth.

Excluding the impact of foreign exchange, restructuring charges and other items, Pepsi earned $1.56 per share, topping the $1.50 per share expected by analysts surveyed by Refinitiv.

Net sales rose 4.3% to $17.19 billion, beating expectations of $16.93 billion. Pepsi’s organic revenue also grew by 4.3% during the quarter.

Frito Lay North America, which includes brands like Cheetos and Doritos, saw revenue growth of 5.5%.

“We’re gaining share, but the category is also very healthy. Of course, we’re a very big part of the category,” Laguarta told analysts on the conference call.

Pepsi has been expanding its snack lineup with healthier options, through brands like Bare and Off the Eaten Path. Revenue growth from those healthier snacks and well-known chip brands helped offset the double-digit sales declines of Sabra hummus and guacamole dips. Pepsi owns a 50% stake of the hummus maker through a joint venture with Strauss Group.

Its North American beverage business also performed well, with 3.5% revenue growth. Gatorade improved its market share and saw positive net revenue growth during the quarter. The brand’s no-sugar line, Gatorade Zero, which launched in May 2018, surpassed $500 million in retail sales.

Bubly, which the company expects will be one of its next billion-dollar brands, is continuing to gain market share in the flavored sparkling-water category against competitors like La Croix.

Laguarta said that he believes that Pepsi has a “very good portfolio” in North America to address existing and future demand for food and beverages, although he left open the idea of acquiring smaller brands.

Pepsi’s most recent acquisition is the $1.7 billion deal for South Africa-based Pioneer Foods. It has not yet closed.

“We’re putting capital against a market opportunity that will deliver itself in the next 20 years,” Laguarta said.

Read the full PepsiCo earnings release here.


Company: cnbc, Activity: cnbc, Date: 2019-10-03  Authors: amelia lucas
Keywords: news, cnbc, companies, growth, higher, spending, earnings, share, company, billion, advertising, pepsis, brands, revenue, beat, jumps, increased, stock, sales, fuels


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Health insurance premiums increased more than wages this year

The average annual health insurance premiums for family coverage for employer-sponsored health plans has topped $20,000 for the first time, according to data from the Kaiser Family Foundation’s annual employer benefits survey. On top of higher premiums, deductibles and other out-of-pocket expenses are also on the rise for over half of the non-elderly U.S. population covered by employer insurance. “The average premium for family coverage has increased 22% over the last five years and 54% over the


The average annual health insurance premiums for family coverage for employer-sponsored health plans has topped $20,000 for the first time, according to data from the Kaiser Family Foundation’s annual employer benefits survey. On top of higher premiums, deductibles and other out-of-pocket expenses are also on the rise for over half of the non-elderly U.S. population covered by employer insurance. “The average premium for family coverage has increased 22% over the last five years and 54% over the
Health insurance premiums increased more than wages this year Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-09-26  Authors: alicia adamczyk
Keywords: news, cnbc, companies, deductible, costs, average, increased, wages, deductibles, family, health, premiums, coverage, workers, pay, insurance


Health insurance premiums increased more than wages this year

The average annual health insurance premiums for family coverage for employer-sponsored health plans has topped $20,000 for the first time, according to data from the Kaiser Family Foundation’s annual employer benefits survey. On top of higher premiums, deductibles and other out-of-pocket expenses are also on the rise for over half of the non-elderly U.S. population covered by employer insurance. Here are some of the key takeaways from KFF’s report:

Premium increases have outpaced wage growth

The average annual premiums for single coverage in 2019 are $7,188, and $20,576 for family coverage for workers covered by their employer’s plan. That’s a 4% and 5%, respectively, increase over 2018. At the same time, wages increased by 3.4% and inflation by 2%. “The average premium for family coverage has increased 22% over the last five years and 54% over the last ten years, significantly more than either workers’ wages or inflation,” the report notes.

Workers don’t pay that full amount, but the portion they are on the hook for is also steadily increasing. Singles will pay $1,242 this year, on average, while families will pay $6,015, an increase of 71% in the past decade. Earnings have grown by 26% during the same time frame. Premiums vary by coverage, plan type and firm size.

Deductibles are also rising

As premiums have steadily risen, so has the share of insured who pay a deductible. Workers who have deductibles must pay, typically, thousands of dollars out-of-pocket, on top of their monthly premiums, before their coverage kicks in. The number of people with employer-sponsored insurance who have deductibles has increased from 63% to 82% in the past 10 years, and the deductibles have risen from $826 to $1,655, on average. What’s more, the share in High Deductible Health Plans, defined as having a deductible of at least $1,350 for single coverage and $2,700 for family coverage, is also increasing. As the report notes, the percentage of workers with an annual deductible of $2,000 or more for single coverage has grown from 18% to 28% over the past five years. Deductibles vary by coverage, plan type and firm size.

Other costs stay steady

On top of premiums and deductibles, many workers must also pay a set dollar amount or percentage of the covered amount when they visit an in-network doctor or are admitted to a hospital. Both of these have remained close to the 2018 figures. Many plans have an in-network limit on the total amount of money a worker will pay for out-of-pocket costs, including the deductible and copays. This varies widely by employer and coverage type.

Costs will increase more next year

Workers can expect their costs to rise again in 2020, according to a separate report from the National Business Group on Health. Total, employees of large companies “are expected to shoulder about $4,500 in costs next year, including out-of-pocket spending,” CNBC reported. Employers, too, will pay more to cover workers. Don’t miss: Your health insurance costs are about to go up in 2020 Like this story? Subscribe to CNBC Make It on YouTube!


Company: cnbc, Activity: cnbc, Date: 2019-09-26  Authors: alicia adamczyk
Keywords: news, cnbc, companies, deductible, costs, average, increased, wages, deductibles, family, health, premiums, coverage, workers, pay, insurance


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Here’s where the jobs are — in one chart

The August jobs report showed weaker hiring overall as continued strength in the service sectors struggled to offset anemic manufacturing gains and losses in the mining and extraction industry. The Labor Department’s report also notes that an unusual swell of government hiring — the second-best performer in term of net jobs gains in August — stemmed from the employment of temporary workers tasked with conducting the 2020 census. The government reported Friday that payrolls increased 130,000 duri


The August jobs report showed weaker hiring overall as continued strength in the service sectors struggled to offset anemic manufacturing gains and losses in the mining and extraction industry. The Labor Department’s report also notes that an unusual swell of government hiring — the second-best performer in term of net jobs gains in August — stemmed from the employment of temporary workers tasked with conducting the 2020 census. The government reported Friday that payrolls increased 130,000 duri
Here’s where the jobs are — in one chart Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-09-06  Authors: thomas franck
Keywords: news, cnbc, companies, jobs, chart, net, report, payrolls, hiring, heres, labor, care, employment, increased, gains


Here's where the jobs are — in one chart

The August jobs report showed weaker hiring overall as continued strength in the service sectors struggled to offset anemic manufacturing gains and losses in the mining and extraction industry.

The Labor Department’s report also notes that an unusual swell of government hiring — the second-best performer in term of net jobs gains in August — stemmed from the employment of temporary workers tasked with conducting the 2020 census.

The government reported Friday that payrolls increased 130,000 during the month, 20,000 below the 150,000 economists polled by Dow Jones had forecast. The government also said wages increased at a solid clip, up 0.4% in August and 3.2% over the year.

CNBC studied the net changes by industry for August jobs based on data from the Labor Department contained in the employment report.

The professional and business sector — a consistent employment juggernaut over the last year — topped the list in August with a net gain of 37,000 payrolls, albeit well shy of the 66,000 clinched in July. Health care and social services, another key area of job growth including ambulatory outpatient care, hospitals and nursing, added 32,000.


Company: cnbc, Activity: cnbc, Date: 2019-09-06  Authors: thomas franck
Keywords: news, cnbc, companies, jobs, chart, net, report, payrolls, hiring, heres, labor, care, employment, increased, gains


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Job growth falls short of expectations as August payrolls rise just 130,000

Job growth continued at a tepid pace in August, with nonfarm payrolls increasing by just 130,000 thanks in large part to the temporary hiring of Census workers, the Labor Department reported Friday. The increase fell short of Wall Street estimates for 150,000, while the unemployment rate stayed at 3.7%, as expected. An alternative measure of the jobless rate, which includes discouraged and underemployed workers, increased to 7.2% from 7% in July, due mainly to a 397,000 increase in those working


Job growth continued at a tepid pace in August, with nonfarm payrolls increasing by just 130,000 thanks in large part to the temporary hiring of Census workers, the Labor Department reported Friday. The increase fell short of Wall Street estimates for 150,000, while the unemployment rate stayed at 3.7%, as expected. An alternative measure of the jobless rate, which includes discouraged and underemployed workers, increased to 7.2% from 7% in July, due mainly to a 397,000 increase in those working
Job growth falls short of expectations as August payrolls rise just 130,000 Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-09-06  Authors: jeff cox, fred imbert
Keywords: news, cnbc, companies, payrolls, working, workers, unemployment, underemployed, growth, job, expectations, increased, increase, increasing, short, wall, rise, 130000, falls, rate


Job growth falls short of expectations as August payrolls rise just 130,000

Job growth continued at a tepid pace in August, with nonfarm payrolls increasing by just 130,000 thanks in large part to the temporary hiring of Census workers, the Labor Department reported Friday.

The increase fell short of Wall Street estimates for 150,000, while the unemployment rate stayed at 3.7%, as expected. An alternative measure of the jobless rate, which includes discouraged and underemployed workers, increased to 7.2% from 7% in July, due mainly to a 397,000 increase in those working part-time for economic reasons.

Wage growth remained solid, with average hourly earnings increasing by 0.4% for the month and 3.2% over the year; both numbers were one-tenth of a percentage point better than expected.

Labor force participation also increased, rising to 63.2% and tying its highest level since August 2013. The total number of Americans considered employed surged by 590,000 to a record 157.9 million, according to the household survey, which is conducted separately from the headline establishment count.

The difference between the two surveys inspired some optimism.


Company: cnbc, Activity: cnbc, Date: 2019-09-06  Authors: jeff cox, fred imbert
Keywords: news, cnbc, companies, payrolls, working, workers, unemployment, underemployed, growth, job, expectations, increased, increase, increasing, short, wall, rise, 130000, falls, rate


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Here’s how much college cost the year you were born

One hundred years later, nearly 20 million students are enrolled in college. The College Board estimates that during the 1998 – 1999 school year, average published costs at public institutions (including tuition, room and board) were $12,000 and the average net cost for public university students after grants and scholarships was about $8,850. But calculating the cost of college over time is challenging, because few Americans attended college during the first half of the 20th century and there i


One hundred years later, nearly 20 million students are enrolled in college. The College Board estimates that during the 1998 – 1999 school year, average published costs at public institutions (including tuition, room and board) were $12,000 and the average net cost for public university students after grants and scholarships was about $8,850. But calculating the cost of college over time is challenging, because few Americans attended college during the first half of the 20th century and there i
Here’s how much college cost the year you were born Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-09-04  Authors: abigail hess
Keywords: news, cnbc, companies, born, board, increased, school, college, public, room, heres, average, cost, tuition, students


Here's how much college cost the year you were born

In 1919, an estimated 598,000 students were enrolled in American colleges. One hundred years later, nearly 20 million students are enrolled in college.

And while college attendance has increased dramatically over time, so have costs. The College Board estimates that during the 1998 – 1999 school year, average published costs at public institutions (including tuition, room and board) were $12,000 and the average net cost for public university students after grants and scholarships was about $8,850. During the 2018 – 2019 school year, those figures increased to $21,370 and $14,880, respectively.

But calculating the cost of college over time is challenging, because few Americans attended college during the first half of the 20th century and there is limited information on the cost of college before the 1960s. In the early 1900’s, college was mostly reserved for wealthy white men. It wasn’t until Servicemen’s Readjustment Act of 1944, better known as the GI Bill of Rights, that college access increased to include large swaths of veterans. The Higher Education Act of 1965 increased accessibility for women and minorities.

According to Discover, the average cost of college for full-time undergraduate students has increased 143% since 1963. The financial services company estimates that during the 1963-1964 school year, the average student paid the equivalent of $9,818, in 2017 dollars, for tuition, fees, room and board. During the 2016-2017 school year, students paid approximately $23,091 to cover the same costs.

Using data collected as part of the Higher Education General Information Survey and the Integrated Postsecondary Education Data System, The College Board took a look at tuition, fees, room and board at private and public colleges between the 1971 – 1972 and 2018 – 2019 school years.

Here’s how much college cost the year you were born in 2018 dollars, according to The College Board:


Company: cnbc, Activity: cnbc, Date: 2019-09-04  Authors: abigail hess
Keywords: news, cnbc, companies, born, board, increased, school, college, public, room, heres, average, cost, tuition, students


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Trump’s trade threats increased the chances for a recession, but also a Fed rate cut

Trump, in a pair of tweets, criticized Powell for a lack of action, and asked who is a bigger enemy, the Fed chairman or the president of China? Trump then went on to tweet that the U.S. does not need China, China has been stealing from America, and that U.S. companies are “ordered” to look for alternatives. An inverted yield curve, where investors look for more yield on shorter term securities, has been a fairly reliable recession warning. “It’s almost like the administration was expecting the


Trump, in a pair of tweets, criticized Powell for a lack of action, and asked who is a bigger enemy, the Fed chairman or the president of China? Trump then went on to tweet that the U.S. does not need China, China has been stealing from America, and that U.S. companies are “ordered” to look for alternatives. An inverted yield curve, where investors look for more yield on shorter term securities, has been a fairly reliable recession warning. “It’s almost like the administration was expecting the
Trump’s trade threats increased the chances for a recession, but also a Fed rate cut Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-23  Authors: patti domm
Keywords: news, cnbc, companies, manufacturing, cut, increased, powell, trumps, threats, tariffs, trade, rate, recession, curve, chances, china, economy, president, fed


Trump's trade threats increased the chances for a recession, but also a Fed rate cut

The latest escalation in the trade war between the U.S. and China increases odds the U.S. economy will fall into recession— and that the Federal Reserve will try to stop it with more aggressive interest rate cuts.

President Donald Trump called on U.S. companies Friday to find alternatives to China, following a new round of Chinese tariffs on $75 billion in U.S. goods, including automobiles.

Trump fired off an angry tweetstorm against China, shortly after he once more criticized Fed Chairman Jerome Powell, who gave a measured speech at the Fed’s annual Jackson Hole symposium Friday morning. Powell left the door open for more rate cuts but did not go so far as to promise any — clearly disappointing the president, as well as some market pros who wanted to hear a more dovish Fed.

Trump, in a pair of tweets, criticized Powell for a lack of action, and asked who is a bigger enemy, the Fed chairman or the president of China?

Trump then went on to tweet that the U.S. does not need China, China has been stealing from America, and that U.S. companies are “ordered” to look for alternatives. Treasury yields slid and stocks sold off, with companies doing business in China among the hardest hit.

“Chinese retaliation clearly shows they are making no progress on negotiations for a deal, and the president just upped the ante again. They are firing at each other without any restraint at this point. Recession odds are a lot higher. He’s about to push the economy off the rails. It’s very close,” said Mark Zandi, chief economist at Moody’s Analytics.

As the Dow lost 2% Friday afternoon, the 2-year to 10-year curve flattened and briefly inverted. An inverted yield curve, where investors look for more yield on shorter term securities, has been a fairly reliable recession warning.

“These are risk-off moments that we think do mean more tightening in financial conditions and increases in spikes and volatility, that tend to be unhelpful for the outlook,” said Michael Gapen, chief U.S. economist at Barclays. “It raises the amount of insurance the Fed needs to put into place to support the economy.”

Gapen said Powell indicated he could do more easing when he spoke Friday, and that there were more risks since the Fed met in July, including the protests in Hong Kong and risks around Italian politics. But the overriding concern he mentioned was trade uncertainties.

“I think the Fed was prepared to ease in September. This locks that in. I suppose if things deteriorate enough, we start asking do they do 50 basis points instead of 25,” said Gapen.

Art Hogan, chief market strategist at National Securities, said the tensions are now at a heightened level, creating an even more uncertain level for markets. “It’s almost like the administration was expecting the Fed to announce a rate cut at the Jackson Hole meeting. And since Powell did not deliver, he went to def-com 5, ” said Hogan.

Historically, the Fed does not act at its annual Jackson Hole retreat.

Gapen said the trade war is hurting global trade revenues. For the U.S., exports make up about 15% of GDP, but for other countries, the contribution is about twice as much. Trade issues are hitting economies globally, and Germany, for instance, has seen a modest contraction in growth while the U.S. is still growing at about 2%.

“The risk is it gives you the illusion the U.S. economy will do fine,” said Gapen, adding that there’ s a question of how long the U.S. can avoid also seeing a downturn.

Citigroup global economist Cesar Rojas said it’s possible Trump’s tweet threats could be a precursor to a much more intense phase of the trade wars, which would be even more damaging to both economies.

“To me that sounds like he will eventually announce that tariffs on China will be increased and companies will perhaps have six months, or a year, before these tariffs go up to these levels, or even that trade with China is blocked,” said Rojas.

Economists said the Chinese tariffs and Trump’s comments on Twitter raise the level of uncertainty for U.S.businesses, which already have curbed spending.

“I think businesses are already on the edge,” Zandi said. “If the president pushes this, they’ll go over the edge. It will be too much to bear. They are right now sitting on their hands. But if the president goes much further, they’re going to start cutting, and laying off workers. That’s recession. Manufacturers are already in recession.”

On Thursday, the IHS Markit Purchasing Managers Index showed that the U.S. manufacturing sector was in contraction in July, for the first time since the financial crisis. A weakening in services PMI showed that the manufacturing downturn may be spreading, but service PMI remained above 50, which means expansion..

Zandi said Moody’s Analytics has an indicator for daily recession odds based on financial inputs, like credit spreads, stock volatility. The indicator shows a 45% chance of recession in the next 12 months. That includes yield curve metrics so it rose, as the curve inverted this week.

“What we’re seeing right now is it’s going to hurt both economies,” said Rojas. “Basically, the extent of where we are in the U.S. economy is that external factors are already weighing on manufacturing and agriculture.” He said the manufacturing PMI confirmed that the U.S. will become more sensitive to tariffs and trade wars.


Company: cnbc, Activity: cnbc, Date: 2019-08-23  Authors: patti domm
Keywords: news, cnbc, companies, manufacturing, cut, increased, powell, trumps, threats, tariffs, trade, rate, recession, curve, chances, china, economy, president, fed


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Salesforce shares rise on revenue beat and increased forecast

Salesforce shares climbed about 7% in extended trading on Thursday after the software company reported better-than-expected quarterly revenue and raised its forecast for the year. 66 cents per share, excluding certain items, vs. 47 cents per share as expected by analysts, according to Refinitiv. Revenue: $4 billion, vs. $3.95 billion as expected by analysts, according to Refinitiv. Sales Cloud, the company’s biggest product, generated $1.13 billion in revenue, up 13%, and Service Cloud, the seco


Salesforce shares climbed about 7% in extended trading on Thursday after the software company reported better-than-expected quarterly revenue and raised its forecast for the year. 66 cents per share, excluding certain items, vs. 47 cents per share as expected by analysts, according to Refinitiv. Revenue: $4 billion, vs. $3.95 billion as expected by analysts, according to Refinitiv. Sales Cloud, the company’s biggest product, generated $1.13 billion in revenue, up 13%, and Service Cloud, the seco
Salesforce shares rise on revenue beat and increased forecast Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-22  Authors: jordan novet ari levy, jordan novet, ari levy
Keywords: news, cnbc, companies, analysts, revenue, share, expected, forecast, company, salesforce, cents, billion, vs, rise, cloud, increased, beat, shares


Salesforce shares rise on revenue beat and increased forecast

Salesforce shares climbed about 7% in extended trading on Thursday after the software company reported better-than-expected quarterly revenue and raised its forecast for the year.

Here are the key numbers for the second quarter of fiscal 2020:

Earnings: 66 cents per share, excluding certain items, vs. 47 cents per share as expected by analysts, according to Refinitiv.

66 cents per share, excluding certain items, vs. 47 cents per share as expected by analysts, according to Refinitiv. Revenue: $4 billion, vs. $3.95 billion as expected by analysts, according to Refinitiv.

Revenue climbed 22% from a year earlier, the company said in a statement. Sales Cloud, the company’s biggest product, generated $1.13 billion in revenue, up 13%, and Service Cloud, the second-largest division, grew 22% to $1.09 billion.

While Salesforce is still generating organic growth as more large businesses move their applications to the cloud, the company has also been on a spending spree to move into new areas and open the door to new expansion opportunities. Earlier this month, Salesforce closed the $15.3 billion acquisition of Tableau, by far its biggest deal ever, pushing into data visualization tools.

That follows last year’s $6.5 billion purchase of MuleSoft, which put Salesforce into the business of data integration, more of a back-end technology.


Company: cnbc, Activity: cnbc, Date: 2019-08-22  Authors: jordan novet ari levy, jordan novet, ari levy
Keywords: news, cnbc, companies, analysts, revenue, share, expected, forecast, company, salesforce, cents, billion, vs, rise, cloud, increased, beat, shares


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The US budget deficit is up 27% and getting closer to $1 trillion

The U.S. budget deficit widened another $119.7 billion, good for a 27% increase over a year ago, according to government figures released Monday. Total outlays increased by 22.8% over last July as receipts grew 11.6%. The deficit increase came largely due to increased spending on health care and the military. Though the tax cut lowered the rate corporations have to pay from 36% to 21%, tax receipts actually are up 3.2% year to date. Individual income tax receipts have risen just shy of 1%.


The U.S. budget deficit widened another $119.7 billion, good for a 27% increase over a year ago, according to government figures released Monday. Total outlays increased by 22.8% over last July as receipts grew 11.6%. The deficit increase came largely due to increased spending on health care and the military. Though the tax cut lowered the rate corporations have to pay from 36% to 21%, tax receipts actually are up 3.2% year to date. Individual income tax receipts have risen just shy of 1%.
The US budget deficit is up 27% and getting closer to $1 trillion Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-12  Authors: jeff cox
Keywords: news, cnbc, companies, receipts, 27, trump, getting, outlays, deficit, pay, tax, increased, budget, trillion, billion, spending, closer


The US budget deficit is up 27% and getting closer to $1 trillion

The U.S. budget deficit widened another $119.7 billion, good for a 27% increase over a year ago, according to government figures released Monday.

Total outlays increased by 22.8% over last July as receipts grew 11.6%. For the year, receipts were up 3% in the October to July period, totaling $2.86 trillion, while expenditures were at $3.73 trillion, an 8% rise.

That brings the fiscal year deficit through July to $866.8 billion, a little over a year and a half after the Trump administration ushered through a $1.5 trillion tax cut that the White House has vowed would pay for itself. At this point last year, the deficit was $684 billion.

There are two months left in this fiscal year, and the Treasury Department is projecting a deficit of just over $1 trillion.

The monthly rise was in line with Wall Street estimates.

The deficit increase came largely due to increased spending on health care and the military. Medicare outlays rose 11% to $66 billion. Defense spending also was up $10 billion year over year to $53 billion.

A two-year budget deal that Trump negotiated with Congress earlier in August likely will only add to the red ink as the spending plan authorized increased spending on defense and domestic programs.

Though the tax cut lowered the rate corporations have to pay from 36% to 21%, tax receipts actually are up 3.2% year to date. Individual income tax receipts have risen just shy of 1%.


Company: cnbc, Activity: cnbc, Date: 2019-08-12  Authors: jeff cox
Keywords: news, cnbc, companies, receipts, 27, trump, getting, outlays, deficit, pay, tax, increased, budget, trillion, billion, spending, closer


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