Amazon launches a credit card for the ‘underbanked’ with bad credit

Amazon is finding a way to get its rewards credit card in the hands of more people. The e-commerce giant partnered with publicly traded bank Synchrony Financial to launch “Amazon Credit Builder” — a program that lends to shoppers with no credit history or bad credit, who would otherwise be exempt from Amazon’s loyalty cards. The card has the same perks, like 5% cash back on purchases, that come with the popular Amazon Store card, which Synchrony also powers. These rewards cards incentivize shopp


Amazon is finding a way to get its rewards credit card in the hands of more people. The e-commerce giant partnered with publicly traded bank Synchrony Financial to launch “Amazon Credit Builder” — a program that lends to shoppers with no credit history or bad credit, who would otherwise be exempt from Amazon’s loyalty cards. The card has the same perks, like 5% cash back on purchases, that come with the popular Amazon Store card, which Synchrony also powers. These rewards cards incentivize shopp
Amazon launches a credit card for the ‘underbanked’ with bad credit Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-10  Authors: kate rooney
Keywords: news, cnbc, companies, shoppers, cards, quindlen, rewards, amazon, credit, synchrony, card, launches, loyalty, underbanked, banks, bad


Amazon launches a credit card for the 'underbanked' with bad credit

Amazon is finding a way to get its rewards credit card in the hands of more people.

The e-commerce giant partnered with publicly traded bank Synchrony Financial to launch “Amazon Credit Builder” — a program that lends to shoppers with no credit history or bad credit, who would otherwise be exempt from Amazon’s loyalty cards.

“There’s always going to be people that we can’t give credit to — this is a large population that we weren’t able to reach,” Tom Quindlen, Synchrony executive vice president and CEO of the bank’s retail card operation, told CNBC in a phone interview. “It’s a new segment of the market.”

The card has the same perks, like 5% cash back on purchases, that come with the popular Amazon Store card, which Synchrony also powers. These rewards cards incentivize shoppers to use Amazon instead of an alternative and helps drive loyalty within its customer base, Quindlen said. Banks such as J.P. Morgan have also bet on rewards cards that would theoretically make customers spend more and in turn bring in more interest and returns.


Company: cnbc, Activity: cnbc, Date: 2019-06-10  Authors: kate rooney
Keywords: news, cnbc, companies, shoppers, cards, quindlen, rewards, amazon, credit, synchrony, card, launches, loyalty, underbanked, banks, bad


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Trump likes EU fines against big US tech companies and would like some of that money, too

President Donald Trump told CNBC on Monday that the U.S. could benefit from some of the cash windfall European regulators are getting from lawsuits with major American technology companies. Trump said that as a byproduct of the fines, the EU gets “all this money — we should be doing that.” “We should be doing what they’re doing,” the president told “Squawk Box ” co-host Joe Kernen. U.S. regulators and lawmakers have also increased efforts domestically to rein in big tech companies. The president


President Donald Trump told CNBC on Monday that the U.S. could benefit from some of the cash windfall European regulators are getting from lawsuits with major American technology companies. Trump said that as a byproduct of the fines, the EU gets “all this money — we should be doing that.” “We should be doing what they’re doing,” the president told “Squawk Box ” co-host Joe Kernen. U.S. regulators and lawmakers have also increased efforts domestically to rein in big tech companies. The president
Trump likes EU fines against big US tech companies and would like some of that money, too Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-10  Authors: kate rooney
Keywords: news, cnbc, companies, theyre, big, fines, european, doing, regulators, told, companies, think, general, trump, money, eu, president, likes, tech


Trump likes EU fines against big US tech companies and would like some of that money, too

President Donald Trump told CNBC on Monday that the U.S. could benefit from some of the cash windfall European regulators are getting from lawsuits with major American technology companies.

He pointed to the European Union’s probes into tech giants and said “they’re great companies” but “something’s going on” when it comes to their concentrated power.

Trump said that as a byproduct of the fines, the EU gets “all this money — we should be doing that.”

“We should be doing what they’re doing,” the president told “Squawk Box ” co-host Joe Kernen.

The European Commission has slapped $9.5 billion in antitrust fines against Google since 2017. Facebook has been subject to probes across the EU since a strict new set of privacy rules called the General Data Protection Regulation went into effect last year. U.S. regulators and lawmakers have also increased efforts domestically to rein in big tech companies.

The president said European regulators think of the lawsuits as “easy money” where they’ll “sue Apple for $7 billion and win the case.”

“I think it’s a bad situation, obviously,” Trump said. “But I think there is something going on in terms of monopoly.”

Google, Facebook, Apple and Amazon have come under pressure from both sides of the political aisle heading into the 2020 presidential election. Sen. Elizabeth Warren has been arguably the most vocal presidential candidate on the issue, and in March unveiled the clearest proposal from a Democrat yet to limit the growth of Silicon Valley. Her campaign sponsored a billboard in San Francisco that said “BREAK UP BIG TECH.” Trump has also repeatedly criticized Amazon CEO and Washington Post owner Jeff Bezos and argued that social media platforms look to silence conservative pundits.

Still, the president said the U.S. attorney general will take a different approach with these companies than his European counterparts.

“We have a great attorney general, we’ll look at them differently,” Trump said.

— CNBC’S Elizabeth Schulze contributed reporting.


Company: cnbc, Activity: cnbc, Date: 2019-06-10  Authors: kate rooney
Keywords: news, cnbc, companies, theyre, big, fines, european, doing, regulators, told, companies, think, general, trump, money, eu, president, likes, tech


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Fed ‘insurance’ rate cuts while the economy is fine usually boost the stock market, history shows

When the central bank cuts interest rates as a preventative measure, U.S. equity markets have historically done very well. J.P. Morgan pointed out three “insurance cut” easing cycles in 1980, 1995 and 1998 that appear to be outliers. The only other time the S&P 500 saw stronger performance following a rate cut was in 1980. The overall trajectory of equity markets following the first Fed rate cut has been predominantly negative. U.S.Treasury have historically rallied, and the curve continued to s


When the central bank cuts interest rates as a preventative measure, U.S. equity markets have historically done very well. J.P. Morgan pointed out three “insurance cut” easing cycles in 1980, 1995 and 1998 that appear to be outliers. The only other time the S&P 500 saw stronger performance following a rate cut was in 1980. The overall trajectory of equity markets following the first Fed rate cut has been predominantly negative. U.S.Treasury have historically rallied, and the curve continued to s
Fed ‘insurance’ rate cuts while the economy is fine usually boost the stock market, history shows Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-10  Authors: kate rooney
Keywords: news, cnbc, companies, insurance, history, fed, economy, market, cut, equity, usually, morgan, markets, rate, easing, panigirtzoglou, shows, stock, fine


Fed 'insurance' rate cuts while the economy is fine usually boost the stock market, history shows

When the central bank cuts interest rates as a preventative measure, U.S. equity markets have historically done very well.

So-called “insurance ” rate cuts with a backdrop of strong growth — which happened in 1995 and 1998 — resulted in solid equity market performance, according to analysis by J.P. Morgan. But not all rate cuts are created equal. The stock market reaction depends on the justification for slashing rates.

“If the reason is weakening growth then this is not a good environment for equities overall, especially cyclical sectors, even as defensive and bond like equities do relatively well in such environment,” J.P. Morgan global markets strategist Nikolaos Panigirtzoglou said in a note to clients Monday.

J.P. Morgan pointed out three “insurance cut” easing cycles in 1980, 1995 and 1998 that appear to be outliers. The late 1990s rate cuts were used as insurance against Mexican and Russian default and collapse of hedge fund Long-Term Capital Management at the time, bolstered the equity market. The only other time the S&P 500 saw stronger performance following a rate cut was in 1980. At the time, there was an 8.5% reduction in the Fed funds rate from 20% to 11.5% — a level of monetary easing that is “obviously not possible in the current conjuncture,” Panigirtzoglou said.

The overall trajectory of equity markets following the first Fed rate cut has been predominantly negative. Distinguishing which type of easing cycle 2019 will turn out to be “is the challenge for equity markets going forward,” he said. For now, markets appear to be assuming that Federal Reserve officials’ dovish comments are signs of a preemptive, rather than reactive move.

Investors have been focused on the likelihood of an “insurance” interest-rate cut this year. That would theoretically provide a buffer against any economic weakness caused by an ongoing trade war and tariffs with China.

Weaker employment data last week added to the investors’ hopes of a rate cut. The economy added only 75,000 jobs in May, less than half of what economists had expected. Now that the job market is showing signs of strain, economists and investors now firmly believe the Federal Reserve will move to cut rates this year. The market is now pricing in a 95 percent chance of a quarter-point cut in July, according to BMO rate strategist Jon Hill. The Fed next meets June 18-19 and July 30-31.

On the other hand, if the central bank ends up being “reactive,” markets may not see the same benefits, Panigirtzoglou said. This could play out if the Federal Reserve decides to wait until later in the year, or it proves to be “too late” and the U.S. economy has already entered a weak phase, he said.

“Then the equity market could follow a weak trajectory similar to more typical previous Fed easing cycles rather than the strong trajectory seen during 1995 or 1998,” Panigirtzoglou said.

Other asset classes have mixed reactions. U.S.Treasury have historically rallied, and the curve continued to steepen for up to six months on average after a Fed rate cut. The dollar rallied for up to three months, but eventually tended to give up previous gains, according to the J.P. Morgan analysis.

— CNBC’s Patti Domm and Jeff Cox contributed reporting.


Company: cnbc, Activity: cnbc, Date: 2019-06-10  Authors: kate rooney
Keywords: news, cnbc, companies, insurance, history, fed, economy, market, cut, equity, usually, morgan, markets, rate, easing, panigirtzoglou, shows, stock, fine


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These stocks may be winners as the globalization trend reverses

Swiping a credit card or paying online is one consumer area that may be relatively immune to slowing globalization — or as Morgan Stanley puts it, “slowbalization.” And at the moment, China does not figure meaningfully into Morgan Stanley’s investment for the “MVP stocks” — MasterCard, Visa, and PayPal. The stocks are outperforming the S&P 500, which is down about 0.4% percent in the same time period. Winners in this “slowbalization” backdrop are China internet stocks like Alibaba and small to m


Swiping a credit card or paying online is one consumer area that may be relatively immune to slowing globalization — or as Morgan Stanley puts it, “slowbalization.” And at the moment, China does not figure meaningfully into Morgan Stanley’s investment for the “MVP stocks” — MasterCard, Visa, and PayPal. The stocks are outperforming the S&P 500, which is down about 0.4% percent in the same time period. Winners in this “slowbalization” backdrop are China internet stocks like Alibaba and small to m
These stocks may be winners as the globalization trend reverses Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-08  Authors: kate rooney
Keywords: news, cnbc, companies, tariffs, globalization, countries, stanley, morgan, faucette, stocks, visa, mastercard, trend, winners, reverses, national, payments


These stocks may be winners as the globalization trend reverses

Chris Hutchins, co-founder of financial planning company Grove, has roughly 16 credit cards. Here are just a few.

Swiping a credit card or paying online is one consumer area that may be relatively immune to slowing globalization — or as Morgan Stanley puts it, “slowbalization.”

Given their exposure to domestic factors, importance to the banking system and tax collection, and compounding growth effects, Morgan Stanley equity analyst James E. Faucette is looking to names like Visa, Mastercard and PayPal to emerge as “national champions.”

As the world becomes increasingly nationalistic, trade wars with multiple countries drag on and global commerce backtracks, Faucette “expects that the payments sector will be an on-going net beneficiary because of the long-term secular shift to electronification and compounding efficiencies,” he said in a note to clients last week.

There are some headwinds though. Payments continue to shift online, meaning countries may have more of a national interest to protect them or build their own for activities like tax collections and economic data indicators. while countries may want have control over those networks, Faucette expects a “combination” where global networks from partner countries can benefit, too.

“Most countries view the payments system as a logical extension of the banking system, which many consider to be an integral part of national sovereignty,” he said. “We expect some combination of domestically developed payments schemes and/or countries allowing global payments operators (i.e. Visa and Mastercard) access to their markets.”

Global payment companies like Visa and MasterCard already have a huge existing scale advantage, Faucette said —making them the logical low-cost alternative. And at the moment, China does not figure meaningfully into Morgan Stanley’s investment for the “MVP stocks” — MasterCard, Visa, and PayPal.

Shares of PayPal have jumped 4% in the past month, Visa is up 6%, while Mastercard is up 8.5%. The stocks are outperforming the S&P 500, which is down about 0.4% percent in the same time period.

Much of the headwinds and slow down in globalization have to do with the China and the U.S.’s ongoing stalemate on trade. After back and forth retaliatory tariffs and President Donald Trump blacklisting Chinese telecom giant Huawei, Beijing has threatened to cut off its rare earth mineral supply to the U.S., which is crucial to the tech supply chain. The U.S. Defense Department is now looking to slow American reliance on rare earth materials from China.

The tariff worries spread to countries with exposure to Mexico after the president threatened to slap 5% duties on all Mexican imports on June 10. The tariffs will gradually increase to 25% in October if Mexico does not stem illegal immigration across its northern border, the White House said.

Trump announced on Friday that the U.S. had suspended the planned tariffs against Mexico indefinitely after reaching a deal to step up immigration enforcement.

Winners in this “slowbalization” backdrop are China internet stocks like Alibaba and small to mid-cap U.S. internet stocks like Yelp, according to Morgan Stanley. Groups with the most headwinds, or so-called “slowbalizers,” are telecom, autos, semis, information technology and large U.S. tech stocks.

“For industries where the products and production processes are not critical to national or economic security, and their production is not benefited by an overseas supply chain, we think few changes will result from ‘Slowbalization,'” Morgan Stanley analyst Michael D Zezas said in a separate note to clients Wednesday.


Company: cnbc, Activity: cnbc, Date: 2019-06-08  Authors: kate rooney
Keywords: news, cnbc, companies, tariffs, globalization, countries, stanley, morgan, faucette, stocks, visa, mastercard, trend, winners, reverses, national, payments


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PayPal opens up access to e-commerce platform that’s already used by Instagram and Facebook

PayPal is rolling out a new e-commerce platform that gives small businesses the same access to the online shopping infrastructure as tech giants like Facebook. The new platform brings together existing parts of PayPal’s payments business — letting merchants accept money online and shoppers to check out through PayPal. Partners and online marketplaces are a steady part of PayPal’s business, which was once purely e-commerce as the payment option for eBay. PayPal spun off from eBay in 2015 and has


PayPal is rolling out a new e-commerce platform that gives small businesses the same access to the online shopping infrastructure as tech giants like Facebook. The new platform brings together existing parts of PayPal’s payments business — letting merchants accept money online and shoppers to check out through PayPal. Partners and online marketplaces are a steady part of PayPal’s business, which was once purely e-commerce as the payment option for eBay. PayPal spun off from eBay in 2015 and has
PayPal opens up access to e-commerce platform that’s already used by Instagram and Facebook Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-03  Authors: kate rooney
Keywords: news, cnbc, companies, thats, access, small, business, million, online, paypal, sellers, instagram, facebook, paypals, checkout, ecommerce, opens, used, ready, platform


PayPal opens up access to e-commerce platform that's already used by Instagram and Facebook

PayPal is rolling out a new e-commerce platform that gives small businesses the same access to the online shopping infrastructure as tech giants like Facebook.

The new platform brings together existing parts of PayPal’s payments business — letting merchants accept money online and shoppers to check out through PayPal. It also opens up back-end systems like fraud protection, compliance, and authenticating an account, which would be expensive and “almost impossible” for a small start-up to build on its own, PayPal COO Bill Ready said.

“This is a huge and rapidly growing market and we’re looking to go enable much more of that,” Ready told CNBC in a phone interview. “Sellers are trying to figure out how they can go compete with the very largest online retailers. This is a huge opportunity for them.”

Instagram Checkout and Facebook Marketplace are already running on this platform. According to Ready, this is a way to “broaden out” the offering and allow companies more access to the same back-end system that allows someone to shop off of their social news feeds.

“There’s all these new places where sellers can go meet a customer,” Ready said. “We want to democratize access to that so all these millions of sellers can go engage more customers online.”

Partners and online marketplaces are a steady part of PayPal’s business, which was once purely e-commerce as the payment option for eBay. On the last earnings call, Ready said PayPal’s top 20 marketplaces grew 40% year over year and approached $90 billion in volume last year alone. Ready, former CEO of Braintree, which was later bought by PayPal, said this could also be a way to add to the company’s existing 277 million users and 22 million merchants.

PayPal spun off from eBay in 2015 and has since expanded well beyond online checkout. The San Jose, California-based company is leaning into mobile payments, which makes up roughly 40 percent of its business, and small business lending. Its popular peer-to-peer app Venmo, which can also be used in checkout on the commerce platform, now has 40 million users.

The new commerce platform includes other back-end processes like onboarding, payouts and disputes management, AI and machine learning-powered fraud protection. The product will first be available across the United States, U.K. and Europe but over time, but Ready said PayPal plans to expand to all other markets where they operate.


Company: cnbc, Activity: cnbc, Date: 2019-06-03  Authors: kate rooney
Keywords: news, cnbc, companies, thats, access, small, business, million, online, paypal, sellers, instagram, facebook, paypals, checkout, ecommerce, opens, used, ready, platform


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This under-the-radar freight indicator is raising concerns that the U.S. economy is slowing

A slowdown in trucking and transportation is causing some on Wall Street to worry about an impending slowdown in the U.S. economy. The Cass Freight Index, a broad measure of freight shipment activity, fell 3.2% in April from the previous year. “There is no broader measure of economic activity for the U.S. than Freight shipments.” The April freight report, written by Donald Broughton and published by Cass Information Systems, painted a bleak picture for the industry. “If a contraction occurs, the


A slowdown in trucking and transportation is causing some on Wall Street to worry about an impending slowdown in the U.S. economy. The Cass Freight Index, a broad measure of freight shipment activity, fell 3.2% in April from the previous year. “There is no broader measure of economic activity for the U.S. than Freight shipments.” The April freight report, written by Donald Broughton and published by Cass Information Systems, painted a bleak picture for the industry. “If a contraction occurs, the
This under-the-radar freight indicator is raising concerns that the U.S. economy is slowing Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-03  Authors: kate rooney
Keywords: news, cnbc, companies, indicator, index, cass, slowdown, undertheradar, concerns, economic, wilson, weeks, freight, report, economy, slowing, broughton, raising


This under-the-radar freight indicator is raising concerns that the U.S. economy is slowing

A slowdown in trucking and transportation is causing some on Wall Street to worry about an impending slowdown in the U.S. economy. The Cass Freight Index, a broad measure of freight shipment activity, fell 3.2% in April from the previous year. That drop was before President Trump’s surprise announcement of new tariffs on Mexico, suggesting growth was “slowing before the trade tensions re-escalated,” Morgan Stanley strategist Mike Wilson wrote in a note to clients Monday.

“While we have seen many data points the past month supporting our view for an earnings recession and economic slowdown, none were as convincing as the Cass Freight Index report for April, ” strategist Mike Wilson said in a note to clients Monday. “There is no broader measure of economic activity for the U.S. than Freight shipments.” The April freight report, written by Donald Broughton and published by Cass Information Systems, painted a bleak picture for the industry. Broughton, founder and managing partner of Broughton Capital, said he was “more cautious” today than since he “began predicting the recovery of the U.S. industrial economy and the rebirth of the U.S. consumer economy in the third quarter of 2016.” With April’s drop, Broughton outlined a “material and growing downside risk to the economic outlook.”

A container delivery truck heads for one of the terminals at the Port of Long Beach in Long Beach, California. Frederic J. Brown | AFP | Getty Images

To be sure, Broughton said more data in coming weeks was needed before calling whether or not this is “merely a pause in the rate of economic expansion, a retrenchment, or the beginning of an economic contraction.” But falling oil prices, and five straight months of negative shipment volume are cause for concern. “Evidence is accumulating that this is more than ‘just a pause’,” he said in the report. “If a contraction occurs, then the Cass Shipments Index will have been one of the first early indicators once again.” Shares of Kansas City Southern, Union Pacific Corporation, Fed Ex, other freight companies have taken a hit in recent weeks on news of tariffs on Mexican imports. Roughly 30% of Kansas City Southern’s volumes are exposed to cross-border Mexico traffic, while Union Pacific has around 11%, according to Credit Suisse research analyst Allison Landry, .


Company: cnbc, Activity: cnbc, Date: 2019-06-03  Authors: kate rooney
Keywords: news, cnbc, companies, indicator, index, cass, slowdown, undertheradar, concerns, economic, wilson, weeks, freight, report, economy, slowing, broughton, raising


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Crypto entrepreneur to pay $4.6 million for charity lunch with bitcoin skeptic Warren Buffett

A cryptocurrency entrepreneur will pay millions to have lunch with one of the most notable bitcoin skeptics out there: Warren Buffett. Justin Sun, founder of cryptocurrency TRON and CEO of file-sharing company BitTorrent, had the winning bid at $4.57 million. When asked for comment, Buffett laughed out loud and told CNBC’s Becky Quick he was looking forward to the lunch. Based on his comments since 2013, Buffett would probably disagree with that characterization of cryptocurrency. Buffett and ot


A cryptocurrency entrepreneur will pay millions to have lunch with one of the most notable bitcoin skeptics out there: Warren Buffett. Justin Sun, founder of cryptocurrency TRON and CEO of file-sharing company BitTorrent, had the winning bid at $4.57 million. When asked for comment, Buffett laughed out loud and told CNBC’s Becky Quick he was looking forward to the lunch. Based on his comments since 2013, Buffett would probably disagree with that characterization of cryptocurrency. Buffett and ot
Crypto entrepreneur to pay $4.6 million for charity lunch with bitcoin skeptic Warren Buffett Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-03  Authors: kate rooney
Keywords: news, cnbc, companies, bitcoin, longterm, entrepreneur, cryptocurrency, blockchain, warren, letter, ceo, buffett, strategy, crypto, million, skeptic, charity, value, cryptocurrencies, pay, lunch, company


Crypto entrepreneur to pay $4.6 million for charity lunch with bitcoin skeptic Warren Buffett

A cryptocurrency entrepreneur will pay millions to have lunch with one of the most notable bitcoin skeptics out there: Warren Buffett.

Justin Sun, founder of cryptocurrency TRON and CEO of file-sharing company BitTorrent, had the winning bid at $4.57 million. In an open letter posted on Medium, Sun said he would invite other blockchain industry leaders to dine with the legendary value investor in New York.

When asked for comment, Buffett laughed out loud and told CNBC’s Becky Quick he was looking forward to the lunch.

Sun said in the letter that he was “a long-term believer (and certainly a big fan) of Buffett and his long-term value investing strategy,” adding that “the long-term value investment strategy and cryptocurrency, in my eyes, are one in the same.”

Based on his comments since 2013, Buffett would probably disagree with that characterization of cryptocurrency. The Berkshire Hathaway CEO has labeled the world’s first and largest digital currency everything from “rat poison squared” to a “delusion” that “attracts charlatans.” Berkshire Vice Chairman Charlie Munger has called it a “turd,” and said at the annual shareholder meeting that trading cryptocurrencies is “just dementia.”

They are in good company — Jamie Dimon and Bill Gates, economists Nouriel Roubini and Robert Shiller, and the fund managers Ray Dalio and Howard Marks have all questioned bitcoin’s legitimacy. Buffett and others have been less critical of bitcoin’s underlying technology blockchain, which has use cases aside from cryptocurrencies.


Company: cnbc, Activity: cnbc, Date: 2019-06-03  Authors: kate rooney
Keywords: news, cnbc, companies, bitcoin, longterm, entrepreneur, cryptocurrency, blockchain, warren, letter, ceo, buffett, strategy, crypto, million, skeptic, charity, value, cryptocurrencies, pay, lunch, company


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Avocados will probably get more expensive under Trump’s Mexico tariffs

Avocado toast and that extra side of guacamole are probably going to get more expensive if President Donald Trump’s newest trade threat becomes a reality. Higher avocado prices would likely eat into corporate profits for Chipotle, according to Wedbush managing director and research analyst Nick Setyan. “If avocado prices go up, it’s impactful to their bottom line,” Setyan told CNBC in a phone interview. But Setyan pointed out that avocado prices are already volatile, known to swing 20% to 30% in


Avocado toast and that extra side of guacamole are probably going to get more expensive if President Donald Trump’s newest trade threat becomes a reality. Higher avocado prices would likely eat into corporate profits for Chipotle, according to Wedbush managing director and research analyst Nick Setyan. “If avocado prices go up, it’s impactful to their bottom line,” Setyan told CNBC in a phone interview. But Setyan pointed out that avocado prices are already volatile, known to swing 20% to 30% in
Avocados will probably get more expensive under Trump’s Mexico tariffs Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-05-31  Authors: kate rooney
Keywords: news, cnbc, companies, retailers, mexico, prices, tariffs, higher, fruit, probably, expensive, avocado, trumps, supply, setyan, avocados, chipotle


Avocados will probably get more expensive under Trump's Mexico tariffs

Avocado toast and that extra side of guacamole are probably going to get more expensive if President Donald Trump’s newest trade threat becomes a reality.

The United States gets the vast majority of its supply of the popular fruit from Mexico. If Trump’s surprise threat of 5% tariffs on imports from the country is carried out, companies ranging from importers such as Calavo Growers to restaurants such as Chipotle Mexican Grill will likely start paying more. And analysts say the increases are likely to get passed onto consumers.

Shares of Chipotle — where diners already pay extra for guacamole— fell 2% Friday on the threat of rising prices. The burrito purveyor goes through more than 450,000 avocados per day, according to the company.

“Over the last year, our supply chain team has been working to diversify our produce supply consistent with our food with integrity principles,” the company said in a statement to CNBC. “If the announced tariffs are enacted, they would negatively impact our costs and we are monitoring the situation and working with our suppliers to minimize the impact.”

Chris Brandt, chief marketing officer at Chipotle, said last year that “guac has long been one of Chipotle’s most beloved items,” adding that customers order roughly 50 million pounds of it per year.

The company is already grappling with rising prices. “Avocados are a tough thing to predict,” Chipotle Mexican Grill Chief Financial Officer John Hartung said in the company’s first-quarter earnings call, adding that rising avocado prices are the reason second-quarter food costs would be about 100 basis points higher. “We’re paying a lot more right now.”

Higher avocado prices would likely eat into corporate profits for Chipotle, according to Wedbush managing director and research analyst Nick Setyan.

“If avocado prices go up, it’s impactful to their bottom line,” Setyan told CNBC in a phone interview. “If we do see another big step up because of tariffs, and it is a longer-lasting issue, the cost would probably get passed on to the consumer.”

Avocado prices began to spike in late March — based on higher demand from retailers advertising the fruit, lower expected short-term supply, less harvesting during the Easter holiday and a lighter California crop this year, said Setyan, who has a “neutral” rating and $700 price target on the stock.

By one metric provided by Wedbush Securities, prices of the Hass avocado from Michoacan have already rallied 58.8% year to date.

But Setyan pointed out that avocado prices are already volatile, known to swing 20% to 30% in a year. Much of that is already reflected in Chipotle’s forward guidance.

In that context “a 5% move might not be all that big of a deal — you do get those wild swings sequentially,” Setyan said.

International farm products company Calavo Growers sources most of its fruit from Mexico and was also under pressure Friday. Shares of the Santa Paula, California-based company were down as much as 4%.

Stephens analyst Ben Bienvenu said that in recent years, Mexican crop has accounted for 80% to 90% of total avocado volumes entering the U.S. supply for the full year. That amount was set to be higher in 2019, since California trees are in an “off year” from production given the fruit’s two-year production cycle.

This year, the crop prices from Mexico have doubled from $25 in January to more than $50, according to the U.S. Department of Agriculture. Because Calavo buys fruit in bulk from Mexico, and retailers charge customers per piece, there is still some “cushion” to “better absorb cost increases” by passing them on to the consumer, Bienvenu said.

“While these tariffs have the potential to create margin pressure for importers like Calavo, we would note that the mechanics of how avocados are purchased and sold create flexibility for the supply chain to pass along higher costs to the consumer,” Bienvenu said in a note to clients Friday. “Additionally, avocados are some of the more profitable produce that retailers sell — these robust margins allow retailers to manage cost pressures as they occur.”

According to the White House, new tariffs are meant to pressure Mexico to improve border security measures and are expected to go into effect June 10. The president tweeted Thursday night the tariffs will remain in place until “the Illegal Immigration problem is remedied.” The White House said those tariffs could increase to as much as 25% on Oct. 1 if Mexico does not substantially stem illegal immigration across its northern border.


Company: cnbc, Activity: cnbc, Date: 2019-05-31  Authors: kate rooney
Keywords: news, cnbc, companies, retailers, mexico, prices, tariffs, higher, fruit, probably, expensive, avocado, trumps, supply, setyan, avocados, chipotle


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UBS cuts Apple price target, citing smartphone slowdown and ongoing trade war

Slowing iPhone demand, trade war headwinds and possible ripple effects from a Huawei battle don’t bode well for Apple, according to a UBS analyst. The Swiss bank cut its 12-month price target on the iPhone maker to $225 — down from a previous $235. “We believe a slightly lower multiple is prudent given soft smartphone market and ongoing US/China trade issues,” Arcuri said. Apple shares have taken a beating in May as Washington and Beijing remain locked in a stalemate on trade. WATCH: As the US p


Slowing iPhone demand, trade war headwinds and possible ripple effects from a Huawei battle don’t bode well for Apple, according to a UBS analyst. The Swiss bank cut its 12-month price target on the iPhone maker to $225 — down from a previous $235. “We believe a slightly lower multiple is prudent given soft smartphone market and ongoing US/China trade issues,” Arcuri said. Apple shares have taken a beating in May as Washington and Beijing remain locked in a stalemate on trade. WATCH: As the US p
UBS cuts Apple price target, citing smartphone slowdown and ongoing trade war Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-05-22  Authors: kate rooney
Keywords: news, cnbc, companies, smartphone, iphones, war, price, target, trade, citing, ongoing, china, cuts, apple, worth, huawei, uschina, headwinds, arcuri, iphone, slowdown, ubs


UBS cuts Apple price target, citing smartphone slowdown and ongoing trade war

Slowing iPhone demand, trade war headwinds and possible ripple effects from a Huawei battle don’t bode well for Apple, according to a UBS analyst.

The Swiss bank cut its 12-month price target on the iPhone maker to $225 — down from a previous $235. Apple closed at $186 Thursday.

UBS still has a “buy” rating on the stock but cited evidence from a survey of 8,000 people across six countries that suggests consumers are in no rush to upgrade their phones. For iPhones specifically, “purchase intention” looked to be stabilizing at a low level in all regions except China, UBS analyst Timothy Arcuri said in a note to clients Wednesday.

“We believe a slightly lower multiple is prudent given soft smartphone market and ongoing US/China trade issues,” Arcuri said.

Apple shares have taken a beating in May as Washington and Beijing remain locked in a stalemate on trade. Shares are down 7% for the month, as of Tuesday’s close. The U.S. raised tariffs to 25% on $200 billions worth of Chinese goods earlier in May, and China retaliated by upping levies on $60 billion worth of U.S. imports.

Most of Apple’s supply chain is in mainland China, including the iPhone’s final assembly by Foxconn. Apple’s China business accounted for more than $10 billion — more than 17% of sales — in its fiscal second quarter.

Arcuri also said the “Huawei situation” could indirectly impact Apple. On Thursday, the Wall Street Journal reported that a microchip company backed by Microsoft and Dell accused Chinese tech giant Huawei and one of its executives of stealing trade secrets. Last week, the U.S. Department of Commerce added the company to Entity List — meaning American companies would need a license to work with Huawei.

“Apple is not directly impacted, but relaxation of some sort is possible,” Arcuri said. “Negotiations between US/China are ongoing and an extension has been granted for some critical items, but we do think a nationalistic movement – similar to the one we saw at the time of the arrest of Huawei’s CFO in November – seems quite probable and would impact iPhone sales.”

UBS isn’t the only one cautious on Apple. Earlier on Thursday, Goldman Sachs analyst Rod Hall said in a note to clients that Apple earnings could drop 29% if the company’s products were banned in mainland China.

To be sure, Arcuri said Apple would likely rebound in the event those headwinds ease.

“After a year that is impacted by China demand slowdown and elongating replacement cycles, we think iPhones can grow as these headwinds abate,” Arcuri said.

— CNBC’s Fred Imbert contributed reporting.

WATCH: As the US plays hardball with China, Stephen Roach warns odds of a trade deal are ‘rapidly receding’


Company: cnbc, Activity: cnbc, Date: 2019-05-22  Authors: kate rooney
Keywords: news, cnbc, companies, smartphone, iphones, war, price, target, trade, citing, ongoing, china, cuts, apple, worth, huawei, uschina, headwinds, arcuri, iphone, slowdown, ubs


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