Retail

FILE PHOTO: Homes are seen for sale in the southwest area of Portland
FILE PHOTO: Homes are seen for sale in the southwest area of Portland, Oregon March 20, 2014. REUTERS/Steve Dipaola/File Photo

June 19, 2019

NEW YORK (Reuters) – U.S. mortgage applications declined last week from about a 33-month peak as most home borrowing costs moved up from their lowest levels since September 2017, the Mortgage Bankers Association said on Wednesday.

The Washington-based group’s seasonally adjusted index on loan requests, both to buy a home and to refinance one, fell to 511.8 in the week ended June 14. It fell 3.4% from the prior week’s 529.8, which was the highest reading since September 2016.

Interest rates on 30-year fixed-rate “conforming” mortgages, or loans whose balances are $484,350 or less, averaged 4.14% last week. They were up 2 basis points from prior week’s 4.12%, the lowest level since September 2017.

Other 30-year mortgage rates MBA tracks were unchanged to 3 basis points higher from the week before.

Meanwhile, 15-year mortgage rates averaged 3 basis points lower at 3.50%, while the average borrowing costs on five-year adjustable home loans rose 2 basis points to 3.45%.

Mortgage rates generally increased in line with higher bond yields last week as traders pared their safe-haven bond holdings after U.S. President Donald Trump called off threatened tariffs on Mexico and encouraging data on retail sales and industrial output.

MBA’s seasonally adjusted gauge on refinancing applications fell 3.5% to 1,888.8 from prior week’s 1,956.5, which was the highest since November 2016.

The refinance share of mortgage activity grew to 50.2% of total applications from 49.8% the week before.

“Borrowers were sensitive to rising rates, but the refinance share of applications was still at its highest level since January 2018, and refinance activity was at its second highest level this year,” Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a statement.

The group’s barometer on loan applications for home purchases, which is seen as proxy on future housing activity, slipped 3.5% to 268.6. The latest figure was up almost 4% from a year ago.

“Strong demand from first-time buyers and low unemployment continue to push this year’s purchase activity above a year ago,” Kan said.

(Graphic: U.S. mortgage applications interactive – https://tmsnrt.rs/2RnEpRD)

(Reporting by Richard Leong; Editing by Chizu Nomiyama and Jonathan Oatis)

Source: OANN

FILE PHOTO: Sweden's prime minister speaks at campaign rally in Stockholm
FILE PHOTO: Sweden’s Prime Minister Goran Persson speaks at a campaign rally one day before Sunday’s general election in Stockholm September 16, 2006. REUTERS/Bob Strong/File Photo

June 19, 2019

By Johan Ahlander and Esha Vaish

STOCKHOLM (Reuters) – Swedbank shareholders elected Goran Persson as chairman on Wednesday, with the former Swedish Prime Minister pledging to “clean the house” after a money-laundering scandal.

Sweden’s oldest retail bank has lost its chief executive, chairman and a third of its stock market value this year as its Estonian business was embroiled in a money laundering inquiry.

Swedbank, which is under investigation in the United States, the Baltics and Sweden, now faces the potential threat of sanctions and fines as it seeks to regain public confidence.

The most recent allegations against Swedbank, reported by Swedish state TV in March, say it processed gross transactions of up to 20 billion euros a year from high-risk, mostly Russian non-resident clients, through Estonia from 2010 to 2016.

Swedbank suspended its two top Estonian executives on Tuesday as part of an internal inquiry into its compliance with anti-money laundering rules which it launched in April under shareholder pressure for greater transparency.

Swedbank bulked up its board with three appointments at its annual shareholder meeting, including the addition of Persson, as it seeks to regain investor confidence following the scandal, which has also engulfed neighboring Danske Bank.

The 70-year-old former Swedish politician has emerged as a troubleshooter since playing an instrumental role in reviving Sweden’s economy after a financial crisis in the 1990s.

Persson, a Social Democrat who served as prime minister for a decade until 2006 and has since sat on several boards including smaller regional lender Alandsbanken, vowed to restore confidence in Swedbank and work for a better corporate culture.

“We’re going to clean our house. That work starts now,” Persson said after his election as chairman of Swedbank, whose shares were up 1% to 140.50 Swedish crowns at 1031 GMT.

Shareholders also voted in Bo Magnusson and Josefin Lindstrand as new members of the board, which also faces the task of finding a new chief executive for the bank.

Persson expects a new CEO to be in place by “end of autumn.”

(Reporting by Johan Ahlander and Esha Vaish in Stockholm; editing by Johannes Hellstrom and Alexander Smith)

Source: OANN

A car passes in front of Toyota dealer in Dhahran, Saudi Arabia
A car passes in front of Toyota dealer in Dhahran, Saudi Arabia June 15, 2019. Picture taken June 15, 2019. REUTERS/ Hamad I Mohammed

June 19, 2019

By Marwa Rashad and Stephen Kalin

RIYADH (Reuters) – Saudi Arabia began courting Toyota two years ago to build a large car plant as part of Crown Prince Mohammed bin Salman’s grand plan to wean the kingdom off oil revenues and create jobs for young Saudis.

But the Japanese carmaker has rebuffed Riyadh’s overtures following talks that dragged on without tangible results because high labor costs, a small domestic market and a lack of local supplies gave Toyota pause for thought, four sources said.

Securing a deal with a major automaker by 2020 for a car plant is a key target in the Gulf state’s national industrial strategy, part of a broader agenda to diversify the economy of the world’s largest oil exporter.

Failure to do so would be a setback for Prince Mohammed, coming after the listing of oil giant Saudi Aramco was shelved and the killing of journalist Jamal Khashoggi tarnished the kingdom’s image.

“Nobody would say ‘No, full stop’ … but they politely conveyed they’re not interested,” said an industry source familiar with the Toyota talks.

Toyota said it could not comment on the current internal discussions and communication with the Saudi government.

Saudi Arabia’s ministry of energy, industry and mineral resources and the government media office did not respond to requests for comment.

As part of measures designed to create 1.6 million manufacturing and logistics jobs by 2030, Prince Mohammed wants to localize half the production of imported vehicles and weapons – which are expected to account for up to $100 billion in spending by Saudi government entities and consumers by 2030.

Under the deal Toyota signed in March 2017, the Japanese company agreed to conduct a feasibility study for an industrial project to make vehicles and car parts in the kingdom.

Two sources familiar with the matter said Toyota concluded after the study and negotiations that Saudi Arabia would need to provide huge subsidies for the project to be viable.

“They found that production costs will be similar to other countries only if there is a 50% government incentive. But even then, they aren’t sure it will be profitable,” said one source with knowledge of the negotiations.

(GRAPHIC: Saudi Arabia GDP breakdown – https://tmsnrt.rs/2WDjAZb )

TOUGH SELL

When it comes to establishing manufacturing, Riyadh hopes to replicate its 1980s push into petrochemicals – the cornerstone of an industrial drive that turned Saudi Basic Industries (SABIC) into the world’s fourth biggest petrochemicals firm.

Hundreds of thousands of Saudis work in petrochemicals, one of the biggest contributors to the economy outside oil. But it took decades to build up the industry, even with huge government funding and cheap raw materials.

Saudi Arabian Military Industries, owned by the kingdom’s sovereign wealth fund, is spearheading the drive to localize military spending. It aims to generate $10 billion in revenue over the next five years and hopes to generate 30% of revenues from export markets by 2030.

For cars, the National Industrial Development and Logistics Program (NIDLP) wants half the roughly 400,000 vehicles bought each year in Saudi Arabia to be made there by 2030, one source said.

But Toyota, which has a 30 percent market share, only proposed a small plant producing up to 10,000 vehicles using imported goods and the Saudis wanted a bigger factory, the industry source and the source familiar with the talks said.

A strategy document posted on NIDLP’s website acknowledged that Saudi Arabia had a major competitive disadvantage and state incentives would be needed to create “substantial commercial justifications” to attract carmakers.

It did not provide specifics about the disadvantages, nor the size and kind of state incentives required.

At NIDLP’s launch in January, the state approved 45 billion riyals ($12 billion) of incentives to develop an auto sector, including duty rebates, human resources subsidies and tax holidays, but it wasn’t enough, the industry source said.

NIDLP did not respond to requests for comment.

Asked if it would consider the project if the economic conditions changed, Toyota said: “We do not comment on assumptions about the current and future situations.”

(GRAPHIC: Economy by sector in 2018 – https://tmsnrt.rs/2IUeZbs)

JOBS PUSH

The NIDLP is aiming to create 27,000 jobs in the automotive sector by 2030 by attracting so-called original equipment manufacturers (OEMs).

One obstacle, though, is the absence of a local supply chain for car parts, three automotive industry executives said.

Riyadh would need to build integrated economic districts producing components such as windows, batteries and wheels to lower costs, a senior executive at a Western auto firm said.

“If I have to open a manufacturing process in Saudi and then import every single component from abroad, I do not have any economical plus,” he said. “The problem is not really setting up a plant, but having the entire value chain.”

The local market is also relatively small. Demand for cars in Saudi Arabia has fallen by some 50% over three years to about 450,000 cars in 2018, as a drop in oil prices and departure of expatriates hit consumption, said Subhash Joshi, director of mobility practice at research firm Frost & Sullivan.

“Saudi Arabia and (Gulf) countries have been persistently disappointing in terms of sales in recent years, so it’s not as if OEMs would be entering a booming market,” said Justin Cox, director of global production at LMC Automotive.

Cox said countries such as Egypt and Turkey had more advantages for carmakers.

Toyota has a 1.2 billion euro plant with an annual capacity of 150,000 vehicles in Turkey, which is in a customs union with Europe. A plant Nissan set up in Egypt in 2005 with a $200 million investment will produce 28,000 cars this year.

Cars imported into the GCC customs union which includes Saudi Arabia only attract a 5% tariff, offering little protection against cheap imports for countries trying to get domestic car production off the ground.

CARMAKERS WARY

Turkey and Egypt also provide experienced, cheap manpower while Riyadh has been reducing the number of foreign laborers to create jobs for Saudis, who prefer higher-paying public jobs. Some 10 million foreigners have been doing the strenuous, lower-paid jobs largely shunned by the 20 million nationals.

Khalid al-Salem, who oversees the development of industrial cities, said the authorities were working on incentives to lure Saudis to industrial jobs instead of retail, where entry requirements are easier and pay is higher. He did not elaborate.

It’s not the first time Saudi Arabia has attempted to lure automakers.

In 2012, Jaguar Land Rover signed a deal to explore producing 50,000 Land Rovers a year in the kingdom at a cost of 4.5 billion riyals ($1.2 billion), but it never moved forward.

The industry source said the British luxury brand, owned by India’s Tata Motors, got a better offer from a European country.

“We continually review our global manufacturing footprint. At this time, our focus remains on our manufacturing presence in the UK, China, Brazil and mainland Europe,” Jaguar Land Rover said in an emailed response when asked about the Saudi project.

Two of the sources said Riyadh has also approached Nissan Motor Co in recent years.

They said the Japanese firm considered contract manufacturing through a 75% Saudi-owned venture – without the Nissan brand – but the arrest of former chairman Carlos Ghosn last year meant it was off the table for now.

Nissan declined to comment.

MINING AND PHARMACEUTICALS

While Saudi Arabia is struggling to lure carmakers, it does have a truck assembly industry. But analysts say assembling vehicles imported in kit form requires less investment and doesn’t create as many jobs as building cars from scratch.

Economists say, however, that Saudi Arabia does have the potential to build competitive industries and create jobs in the mining and pharmaceutical sectors.

The state is looking to triple mining’s contribution to gross domestic product by 2030 by focusing on untapped reserves of bauxite, phosphate, gold, copper and uranium.

Saudi authorities estimate the country holds 500 million tonnes of phosphate ore, about 7% of global proven reserves and a new mining law to boost foreign investment is being drafted.

Monica Malik, chief economist at Abu Dhabi Commercial Bank, said investment in mining infrastructure would likely have the most direct impact on developing new manufacturing industries.

Pharmaceuticals is another strategic sector for NIDLP. About 25 local manufacturing plants produce 30% of prescription drugs consumed now and the government wants to double the sector’s contribution to non-oil gross domestic product to 1.97% by 2020.

Suhasini Molkuvan, program manager at Frost & Sullivan, said the target was almost close to reality though a lack of investment in research and development and intellectual property left local firms dependent on multinationals.

“Diversity is easier said than done,” said a senior Riyadh banker. “It might be achievable in 15 to 20 years if they continue to make the push.”

(Additional reporting by Sylvia Westall, Tuqa Khalid and Saeed Azhar in Dubai, Costas Pitas in London, Naomi Tajitsu in Tokyo and Norihiko Shirouzu in Beijing; editing by Ghaida Ghantous and David Clarke)

Source: OANN

FILE PHOTO: Japan's SoftBank Group Corp Chief Executive Masayoshi Son bows his head after his presentation at a news conference in Tokyo
FILE PHOTO: Japan’s SoftBank Group Corp Chief Executive Masayoshi Son bows his head after his presentation at a news conference in Tokyo, Japan, November 5, 2018. REUTERS/Kim Kyung-Hoon

June 19, 2019

By Sam Nussey

TOKYO (Reuters) – Most investors in SoftBank Group Corp’s $100 billion Vision Fund want to join the group’s forthcoming second fund, founder and Chief Executive Masayoshi Son said on Wednesday, adding discussions would begin soon.

The entrepreneur said in May a second fund would launch “soon”, with SoftBank likely to be the only investor initially.

Raising further funds is essential if Son is to extend his spending spree on late-stage startups around the world.

Investors in the first fund include the sovereign wealth funds of Saudi Arabia and Abu Dhabi, Apple Inc and Foxconn, formally known as Hon Hai Precision Industry Co Ltd.

The Vision Fund will ramp up its employee numbers to 1,000 from 400 currently, Son said at the group’s annual general meeting.

The fund’s head, Rajeev Misra, said he sees investment rising to 100-150 companies, from around 80 at present.

Internet firms now dominate rankings of the world’s largest companies but have transformed just two industries, advertising and retail, which make up only a small part of the economy, Son told investors.

While SoftBank has invested in those industries in less mature markets – in, for instance, South Korea’s Coupang and Indonesia’s Tokopedia – its tech bets have been focused on startups looking to disrupt other industries like transport, insurance and healthcare.

Son also said he wants to be the conductor in an AI-driven technological revolution.

“The conductor doesn’t play anything but actually he plays everything,” Son said.

Shareholder responses at the meeting included a plea for Son to take care of his health, concern over the number of injuries at the Fukuoka SoftBank Hawks baseball team, and from one father who said he had taken his son to SoftBank’s headquarters in the hopes of glimpsing the founder.

Outside the venue in Tokyo, Japan’s taxi lobby protested Son’s support for the ride-hailing industry, which remains strictly regulated domestically.

SoftBank portfolio companies including recently listed Uber Technologies Inc and China’s Didi Chuxing control 90% of the industry globally.

(Reporting by Sam Nussey; Editing by Christopher Cushing)

Source: OANN

FILE PHOTO: The U.S. Securities and Exchange Commission logo adorns an office door at the SEC headquarters in Washington
FILE PHOTO: The U.S. Securities and Exchange Commission logo adorns an office door at the SEC headquarters in Washington, June 24, 2011. REUTERS/Jonathan Ernst/File Photo

June 18, 2019

By Katanga Johnson

WASHINGTON (Reuters) – The U.S. Securities and Exchange Commission said on Tuesday it is considering boosting the number of options in private stock sales by broadening access to more potential investors and revamping the capital-raising process of private companies.

The agency invited the public to comment on whether it should expand its private-offering framework.

SEC Chairman Jay Clayton said he considers public consultation a step toward addressing concerns over the large amount of capital raised in the private versus public markets, and the way it bars some investors from participating.

“We are taking a critical look at our exemptions from registration to ensure that our multifaceted private offering framework works for investors and entrepreneurs alike, no matter where they are located in the United States,” Clayton said.

He added that the goal is to expand investment opportunities while maintaining appropriate protections.

Tuesday’s request for comment seeks public feedback on whether the SEC should take steps to facilitate a company’s transition from one form of offering to another, and whether retail investors should be allowed greater exposure to companies through pooled investment, the agency said.

It will also consider the limitations on who, and in what amount, a person can invest in a private company stock sale.

The agency said it welcomes responses from startups, entrepreneurs and investors.

Some industry advocates welcome the SEC’s public consultation, arguing that both companies and investors stand to win if the agency moved to adopt a proposal that expanded investor access to private offerings.

“There is huge interest from retail investors in getting in on the ground floor of the next large successful company,” said Dina Ellis Rochkind, an attorney with the Paul Hastings law firm. There would be equally strong interest from startups to raise capital from retail investors, she added.

Democrat-appointed Commissioner Rob Jackson said he voted in favor of letting the public in to more private deals but was hesitant because of the potential for fraud to less-savvy investors.

“The questions in this release involve a fundamental tradeoff: the costs families suffer when investors are victims of fraud versus the benefits of broader access to capital,” Jackson said.

(Reporting by Katanga Johnson; Editing by Susan Thomas and Bill Berkrot)

Source: OANN

FILE PHOTO: Neil Woodford is seen in this undated handout picture
FILE PHOTO: Neil Woodford, founder and fund manager at Woodford Investment Management, is seen in this undated handout picture released on June 10, 2019. Jonathan Atkins/Handout via REUTERS/File Photo

June 18, 2019

By Carolyn Cohn and Muvija M

(Reuters) – British money manager Neil Woodford faced further pressure on Tuesday after retail platform Fidelity International stopped its customers from making new investments in one of his smaller funds.

Woodford, one of Britain’s best-known fund managers, suspended the 3.7 billion pound ($4.6 billion) LF Woodford Equity Income fund on June 3 due to a rise in redemption requests, leaving investors unsure about when they will get their money back.

This has put Woodford’s business under scrutiny by regulators and politicians, and led to outflows from the Income Focus fund, his other open-ended investment fund.

Fidelity’s decision to curb new investments in the Income Focus fund is the latest setback for Woodford, after British wealth manager St James’s Place ended a 3.5 billion pound investment mandate with Woodford Investment Management.

Meanwhile, investment platform Hargreaves Lansdown removed the Equity Fund, which has come under fire for investing in unlisted and illiquid stocks, from its ‘Wealth 50’ list and cut its exposure to the Income Focus fund.

Fidelity said in an emailed statement that its move was “in the best interest of our platform clients unless and until uncertainties are resolved,” adding it was not restricting withdrawals from the fund.

It said that the restrictions were temporary and a “precautionary measure”.

The Income Focus fund “doesn’t have any exposure to illiquid or unquoted securities”, a Woodford spokesman said in an email, adding that it contains “a combination of large, mid and small-sized companies”.

The Income Focus fund’s assets under management (AUM) have dropped 32% since the Equity Income fund suspension, to 325 million pounds, Morningstar data shows. Redemptions and market movements can contribute to a drop in AUM.

The suspension of Woodford’s fund could become a “very big problem” if it caused investors to doubt the integrity of the financial system, Bank of England policymaker Anil Kashyap said on Tuesday.

And PIMFA, the trade association for investment managers and financial advisers, said it represented “an erosion of trust”, while retail investor lobbyist Gina Miller called for an independent review into the regulator.

Woodford’s only listed fund, the Woodford Patient Capital Trust, hit record lows on Tuesday, down more than 30% since the Equity Income fund suspension. It recovered ground to 55 pence by 1220 GMT, down 0.2%.

(Reporting by Carolyn Cohn in London and Muvija M in Bengaluru; Editing by Bernard Orr and Alexander Smith)

Source: OANN

FILE PHOTO: Swedbank sign is seen on the local headquarters building in Tallinn
FILE PHOTO: Swedbank sign is seen on the local headquarters building in Tallinn, Estonia March 25, 2019. REUTERS/Ints Kalnins

June 18, 2019

STOCKHOLM (Reuters) – Swedbank has suspended the two top executives at its Estonian business with immediate effect, acting on an internal investigation into compliance with money-laundering rules at the bank.

Sweden’s oldest retail bank has faced a turbulent year after being linked to a money laundering scandal originating at Danske Bank, which has said its Estonia branch was used to move 200 billion euros ($225 billion)of suspicious funds from 2007 to 2015.

Swedbank – whose group CEO and chairman departed amid the turmoil – admitted in late April to failings in combating money laundering and announced an internal inquiry to review its current and historic customer relationships through its Baltic units.

Swedbank said late on Monday the probe was continuing as it announced findings from the investigation so far had prompted it to suspend Robert Kitt, who has been Estonia CEO from 2015, and Vaiko Tammevali, Estonia CFO since 2014.

“Today’s decision is a consequence of the ongoing internal investigation,” Swedbank’s head of Baltic Banking, Charlotte Elsnitz, said in a statement.

“We are fully committed to the Estonian market and to all our employees, customers and other stakeholders. Estonia is one of four home markets of Swedbank.”

Kitt and Tammevali could not immediately be reached for comment.

The bank’s shares, which have lost about a third in value since the scandal broke, were down 1.5 percent at 138.55 Swedish crowns at 0735 GMT.

The most recent allegations against Swedbank, reported by Swedish state TV, stated that the lender had processed gross transactions of up to 20 billion euros a year from high-risk, non-resident clients, mostly Russian, through its Estonian branch from 2010 to 2016. Previous allegations had related to a period between 2007 and 2015.

Credit Suisse analysts said that the removals meant that essentially all top management in Estonia had been changed, which could help bank in any discussions with authorities.

The Estonian financial regulator declined to comment and said that their ongoing forward investigation with Sweden and other Baltic authorities was ongoing.

Swedbank said it was cooperating fully with authorities in Sweden, the United States and the Baltic countries in their investigations.

The lender said Olavi Lepp, currently chief risk officer, had been named acting CEO of Swedbank Estonia, while Anna Kouts, currently head of treasury, would become acting CFO.

(Reporting by Johannes Hellstrom and Esha Vaish, editing by Deepa Babington/Keith Weir)

Source: OANN

Illustration photo of Australian dollars
Australian dollars are seen in an illustration photo February 8, 2018. REUTERS/Daniel Munoz

June 18, 2019

By Hideyuki Sano and Stanley White

TOKYO (Reuters) – The Australian dollar on Tuesday eased to its lowest levels since early January after the nation’s central bank flagged a further rate cut, while the British pound was hobbled by rising worries of a no-deal Brexit

With markets focused on U.S. Federal Reserve and Bank of Japan meetings later this week, traders latched on to minutes of the Reserve Bank of Australia’s (RBA) June meeting which showed policymakers were prepared to cut rates once more to revive wages growth and inflation.

“The market is already pricing in two rate cuts (in Australia), and there are some speculative moves to push the Aussie lower,” said Yukio Ishizuki, foreign exchange strategist at Daiwa Securities.

The RBA minutes sent the Aussie slumping to $0.6833, its lowest since the flash crash of early January. It was last fetching $0.6837.

Markets are pricing in about 50% chance of another rate cut next month by the RBA, which delivered its first easing in almost three years just two weeks ago..

The pound was under pressure after former foreign minister Boris Johnson got a boost on Monday in his campaign to become prime minister as one of his former rivals and EU supporter Matt Hancock backed him.

That rattled markets as Johnson, the face of the official campaign to leave the European Union in the 2016 referendum, has promised to lead Britain out of the EU with or without a deal.

The pound, which tumbled to a 5-1/2-month low of $1.2532 on Monday, last traded at $1.2530. It also fell to its weakest level since January against the euro, which climbed to 89.74 pence, compared to a two-year low of 84.56 touched just over a month ago.

The pound could be in for a rough ride in coming days, with a raft of potentially market-moving events ahead, including consumer inflation and retail sales data, due on Wednesday and Thursday respectively, and the Bank of England’s policy announcement on Thursday.

The dollar eased slightly to 108.23 yen on Tuesday as a decline in Japanese stocks triggered about of risk aversion.

“The yen may have a little more room to rise if U.S. stocks take a hit and trigger a bout of risk aversion,” Daiwa Securities’ Ishizuki said.

The dollar index measuring its value against six major currencies also declined slightly to 97.446, undermined by the New York Fed’s business index fell this month by a record to reach its weakest level in more than 2-1/2 years.

The Fed’s two-day policy meeting starting later on Tuesday is the next major focus after markets have priced in more than two 25 basis-point rate cuts by year-end.

That marks a sharp contrast to the Fed’s official forecast in March, which showed policymakers deemed the next move would be a hike.

“As markets are now pricing in rate cuts in the second half of this year, the question is how the Fed will respond to such an outlook,” said Shinichiro Kadota, senior strategist at Barclays.

The euro was little changed in Asia, trading at $1.1231.

(Editing by Shri Navaratnam)

Source: OANN

Illustration photo of Australian dollars
Australian dollars are seen in an illustration photo February 8, 2018. REUTERS/Daniel Munoz

June 18, 2019

By Hideyuki Sano and Stanley White

TOKYO (Reuters) – The Australian dollar on Tuesday eased to its lowest levels since early January after the nation’s central bank flagged a further rate cut, while the British pound was hobbled by rising worries of a no-deal Brexit

With markets focused on U.S. Federal Reserve and Bank of Japan meetings later this week, traders latched on to minutes of the Reserve Bank of Australia’s (RBA) June meeting which showed policymakers were prepared to cut rates once more to revive wages growth and inflation.

“The market is already pricing in two rate cuts (in Australia), and there are some speculative moves to push the Aussie lower,” said Yukio Ishizuki, foreign exchange strategist at Daiwa Securities.

The RBA minutes sent the Aussie slumping to $0.6833, its lowest since the flash crash of early January. It was last fetching $0.6837.

Markets are pricing in about 50% chance of another rate cut next month by the RBA, which delivered its first easing in almost three years just two weeks ago..

The pound was under pressure after former foreign minister Boris Johnson got a boost on Monday in his campaign to become prime minister as one of his former rivals and EU supporter Matt Hancock backed him.

That rattled markets as Johnson, the face of the official campaign to leave the European Union in the 2016 referendum, has promised to lead Britain out of the EU with or without a deal.

The pound, which tumbled to a 5-1/2-month low of $1.2532 on Monday, last traded at $1.2530. It also fell to its weakest level since January against the euro, which climbed to 89.74 pence, compared to a two-year low of 84.56 touched just over a month ago.

The pound could be in for a rough ride in coming days, with a raft of potentially market-moving events ahead, including consumer inflation and retail sales data, due on Wednesday and Thursday respectively, and the Bank of England’s policy announcement on Thursday.

The dollar eased slightly to 108.23 yen on Tuesday as a decline in Japanese stocks triggered about of risk aversion.

“The yen may have a little more room to rise if U.S. stocks take a hit and trigger a bout of risk aversion,” Daiwa Securities’ Ishizuki said.

The dollar index measuring its value against six major currencies also declined slightly to 97.446, undermined by the New York Fed’s business index fell this month by a record to reach its weakest level in more than 2-1/2 years.

The Fed’s two-day policy meeting starting later on Tuesday is the next major focus after markets have priced in more than two 25 basis-point rate cuts by year-end.

That marks a sharp contrast to the Fed’s official forecast in March, which showed policymakers deemed the next move would be a hike.

“As markets are now pricing in rate cuts in the second half of this year, the question is how the Fed will respond to such an outlook,” said Shinichiro Kadota, senior strategist at Barclays.

The euro was little changed in Asia, trading at $1.1231.

(Editing by Shri Navaratnam)

Source: OANN

Shoppers ride escalators at the Beverly Center mall in Los Angeles
FILE PHOTO: Shoppers ride escalators at the Beverly Center mall in Los Angeles, California November 8, 2013. Picture taken November 8. REUTERS/David McNew

June 17, 2019

By Jason Lange, Chris Prentice and David Lawder

WASHINGTON/NEW YORK (Reuters) – This year’s holiday season could be tighter for many Americans if the U.S. government imposes tariffs on another $300 billion worth of Chinese imports – because that will include tech products, game consoles, toys, cribs, ornaments and Santa hats.

The tariffs would add 25% to the import cost of these and many other consumer items just as retail outlets throughout the world’s largest economy begin to gear up for the peak end-of-year shopping season.

Consumers have been largely shielded until now from the direct impact of the trade war between China and the United States as the administration of President Donald Trump has focused previous rounds of tariffs on imports sold to manufacturers rather consumers.

But Trump is escalating the trade war and preparing to extend tariffs to nearly all Chinese imports after talks for a deal broke down in May. The U.S. government is pushing for wide-ranging economic and trade reforms from Beijing.

Trump said he would decide whether to trigger the next round of tariffs after talks with Chinese President Xi Jinping at the G20 summit in Japan later this month.

In preparation for the new round, the U.S. Trade Representative’s Office (USTR) on Monday began seven days of hearings for testimony from retailers, manufacturers and others impacted. Thousands of business filed comments to the USTR ahead of the hearings.

Toys, phones and televisions are all on the tariff list and represent some of the most valuable categories of products that Americans buy from China, according to a Reuters analysis of data from the U.S. Census Bureau.

The new tariffs would hit cellphones whose import bill from China totaled $43 billion in 2018 – more than 80% of total cellphone imports.

They would also cover a broad set of toys, including scooters and doll carriages, whose imports totaled $11.9 billion last year. China supplied about 85% of America’s total imports of those toys.

Further pain for parents could come in the form of proposed levies on more than $5 billion worth of video game consoles. Chinese imports amounted to 98% of total U.S. imports of those consoles last year.

And U.S. imports from China of targeted Christmas products – including ornaments, nativity scenes and Christmas tree lights – totaled at least $2.3 billion last year.

An executive from a family-owned, Christmas goods supplier in upstate New York said the company has looked “long and far” to find another supplier for many typical holiday products.

“However, trying to find other countries to manufacture everything else, from Santa hats, to stockings, to glass ornaments, has been a struggle and we have been unable to do so,” Nathan Gordon of Gordon Companies Inc in Cheektowaga said in public comments posted on June 12.

HE’S MAKING A LIST

Some products previously spared by the Trump administration to avoid hitting consumers’ pockets are now on the list. That includes an array of safety and play equipment for children – including high chairs, play pens, and swings.

The proposed tariffs would hit at least $800 million of these goods.

Smart watches, smart speakers and Bluetooth audio are also included. The Consumer Technology Association estimates that 2018 imports in this category from China were up to $17.9 billion.

Retailers Walmart Inc, Target Corp, and more than 600 other companies urged Trump in a letter last week to resolve the trade dispute with China, saying tariffs hurt American businesses and consumers.

Worry over potential cost increases for Americans from tariffs has raised concern about inflation, though across the economy, prices rises remain below the U.S. Federal Reserve target of 2%.

Trump has said that China pays the tariffs, but U.S. importers actually foot the bill and either pass them on to consumers or suppliers.

(Reporting by Jason Lange and David Lawder in Washington and Chris Prentice in New York; Editing by Simon Webb and Rosalba O’Brien)

Source: OANN

FILE PHOTO: The Federal Reserve building is pictured in Washington, DC
FILE PHOTO: The Federal Reserve building is pictured in Washington, DC, U.S., August 22, 2018. REUTERS/Chris Wattie/File Photo

June 17, 2019

By Ann Saphir and Howard Schneider

SAN FRANCISCO/WASHINGTON (Reuters) – The U.S. Federal Reserve, facing fresh demands by President Donald Trump to cut interest rates, is expected to leave borrowing costs unchanged at a policy meeting this week but possibly lay the groundwork for a rate cut later this year.

New economic projections that will accompany the U.S. central bank’s policy statement on Wednesday will provide the most direct insight yet into how deeply policymakers have been influenced by the U.S.-China trade war, Trump’s insistence on lower interest rates, and recent weaker economic data.

Analysts expect the “dot plot” of year-end forecasts for the Fed’s benchmark overnight lending rate – the federal funds rate – will show a growing number of policymakers are open to cutting rates in the coming months, though nowhere near as aggressively as investors expect or Trump wants.

The Fed is also widely, though not universally, expected to remove a pledge to be “patient” in taking future action on rates, opening the door to a possible cut at its coming policy meetings.

Risks may be rising, but “I don’t think they want to box themselves into a corner,” said Carl Tannenbaum, chief economist at Northern Trust. “The markets are set up for a cut in July, and if they don’t get it, financial conditions will tighten.”

The federal funds rate is currently set in a range of 2.25% to 2.50%.

The Fed’s policy-setting committee is due to release its latest statement and economic projections at 2 p.m. EDT (1800 GMT) on Wednesday after the end of a two-day meeting. Fed Chairman Jerome Powell will hold a press conference shortly after.

MIND THE DOTS

The Fed’s last set of economic and policy projections, released in March, showed most policymakers foresaw no need to change rates this year and only very gradual rate hikes thereafter. (For a graphic of the gap between market and Fed expectations, please see https://tmsnrt.rs/2WzJ6tu.)

But since that meeting the economic outlook has become cloudier.

Recent U.S. retail sales numbers were strong. But while unemployment has held near a 50-year low of 3.6%, U.S. employers created a paltry 75,000 jobs in May. Inflation, which Powell says is low in part because of temporary factors, continues to undershoot the Fed’s 2% target.

The Atlanta Fed forecast on Friday that gross domestic product will increase at a 2.1 percent annualized rate in the April-June quarter, a drop from the 3.1 percent pace of the first three months of the year.

Trade uncertainty has increased as well, with Trump using the threat of tariffs on goods from Mexico to force the country to curb the number of mostly Central American immigrants crossing the U.S.-Mexico border.

He has also vowed to slap more tariffs on Chinese imports if no trade deal is reached when he meets Chinese President Xi Jinping at a Group of 20 summit at the end of this month in Japan.

Concern that mounting tariffs could further slow U.S. and global economic growth is one of the chief reasons traders in interest rate futures loaded up on contracts anticipating three U.S. rate cuts by the end of the year.

Fed officials may have reason to trim their rate outlook a bit, but meeting market expectations would involve a dramatic shift. Nine of the Fed’s current 17 policymakers would have to move their rate projections downward for the median to reflect a single cut, let alone three.

“Powell will do what he can to try to downplay the dots especially if they don’t show what the markets want them to show,” said Roberto Perli, economist at Cornerstone Macro. “He will have a tough time.”

Adding to the pressure for a rate cut is a yield curve inversion in parts of the market for U.S. government debt, historically a precursor of recessions. The three-month Treasury bill, for instance, has paid out a higher rate than a 5-year Treasury note for the last several months running.

And Trump, who has said that rates should be lowered by perhaps a full percentage point or more, continues to publicly berate the Fed and Powell, his handpicked chairman, for refusing to act.

“I’ve waited long enough,” Trump said in an interview with ABC News last week, talking favorably of the “old days” when Presidents Lyndon Johnson and Richard Nixon intervened forcefully in Fed policy – and set the stage, many economists argue, for the high inflation, economic volatility and recessions that followed in the 1970s.

DOWNWARD SHIFT

Most of the more than 100 economists polled June 7-12 by Reuters say they are not penciling in a rate cut until the third quarter of next year. But views are shifting rapidly. Forty respondents expected at least one rate cut sometime in 2019, up from just eight who did in the previous poll.

Within the U.S. central bank, St. Louis Fed President James Bullard is the only policymaker who has said a rate cut may be needed “soon.”

Several others have signaled a readiness to move off their wait-and-see stance, with Powell saying earlier this month in a speech in Chicago that the Fed will act “as appropriate” in the face of risks posed by the global trade war and other developments.

The word “patient,” which had been repeatedly used by the Fed since early this year to signal its willingness to hold off further rate hikes, was notably absent from Powell’s remarks, though the Fed chief stopped well short of suggesting a rate cut was coming soon.

The Fed raised rates four times in 2018 but has since abandoned plans to continue lifting borrowing costs this year.

It is likely to avoid signaling any move to cut rates until it is ready to deliver, predicted Bruce Monrad, a high-yield bond portfolio manager at Boston-based Northeast Investors Trust.

Nevertheless, Monrad added, Fed policymakers may have tied their own hands by letting bets in financial markets stray so far. “They have had six months to control the rhetoric. They really haven’t walked back the market.”

(Reporting by Ann Saphir and Howard Schneider; Editing by Paul Simao)

Source: OANN

FILE PHOTO: A man looks at an electronic board showing the Nikkei stock index outside a brokerage in Tokyo
FILE PHOTO: A man looks at an electronic board showing the Nikkei stock index outside a brokerage in Tokyo, Japan, January 7, 2019. REUTERS/Kim Kyung-Hoon

June 17, 2019

By Tomo Uetake

TOKYO (Reuters) – Asian shares got off to a shaky start on Monday as investors were cautious ahead of a closely-watched Federal Reserve meeting, while political tensions in the Middle East and Hong Kong kept risk-appetite in check.

MSCI’s broadest index of Asia-Pacific shares outside Japan opened slightly lower and was last little changed, while Japan’s Nikkei average stood flat.

Wall Street stocks ended lower on Friday as investors turned cautious before this week’s Fed meeting, while a warning from Broadcom on slowing demand weighed on chipmakers and added to U.S.-China trade worries.[.N]

“The week ahead is likely to provide some clarification for investors on three fronts that have been a source of uncertainty. The FOMC meeting, with updated forecasts, is center stage,” said Marc Chandler, chief market strategist at Bannockburn Global Forex.

A private gauge on eurozone’s manufacturing sector as well as U.S.-China trade frictions will also be watched closely, Chandler said.

Financial markets have been sideswiped since a sudden escalation in Sino-U.S. trade tensions in early May, with growing anxiety among investors that a protracted standoff could tip the global economy into recession.

Adding to the tensions between the world’s two biggest economies, U.S. Secretary of State Mike Pompeo told Fox News on Sunday that U.S. President Donald Trump would raise the issue of Hong Kong’s human rights with China’s President Xi Jinping at a potential meeting of the two leaders at the G20 summit in Japan later this month.

On Sunday, hundreds of thousands of black-clad protesters in Hong Kong demanded that Beijing-backed city leader Carrie Lam step down over her handling of a bill that would have allowed extradition to China, resulted her to issue a rare apology.

Geopolitical tensions in the Middle East added another layer of uncertainty for investors after the United States blamed Iran for attacks on two oil tankers in the Gulf of Oman last week.

Hopes that global central banks will keep the money spigot open have helped to temper some of the fears, and all eyes are on the Fed’s two-day meeting starting on Tuesday.

Strong U.S. retail sales data on Friday rolled back expectations of a Fed rate cut at this week’s meeting to 21.7%, from 28.3% on Thursday, according to CME Group’s FedWatch tool. But bets of an easing at the July meeting remain high at 85%.

The Bank of Japan also meets this week and is widely expected to reinforce its commitment to retain a massive stimulus program for some time to come.

The retail report also sent short-dated U.S. Treasury yields higher, flattening the yield curve.[L2N23L10H]

Benchmark 10-year notes was last at 2.091%, while two-year bond yield edged up, shrinking the spread between two- and 10-year yields to 23.6 basis points compared to more than 30 earlier this month.

A Reuters poll showed a growing number of economists expect the Fed policymakers to cut interest rates this year, although the majority still see it holding steady.

In currency markets, the dollar index against a basket of six major currencies climbed to 97.583 on Friday, its highest level in almost two weeks, after the U.S. retail sales data eased fears that the world’s largest economy is slowing sharply.

The index last stood at 97.511, while the euro fetched $1.1220, near the lower end of its weekly trading range.

Oil extended gains on Monday after the attacks on two oil tankers last week raised concerns about potential supply disruptions, but prices remained on track for a weekly loss on fears that trade disputes will dent global oil demand. [O/R]

Brent futures rose 0.2% to $62.13 a barrel, while U.S. West Texas Intermediate (WTI) crude futures rose 0.2% to $52.60.

Spot gold eased 0.1% to $1,340.25 an ounce after hitting a 14-month peak on Friday.

Bitcoin jumped overnight to $9,391.85, its highest level in 13 months. It was last quoted at $9150.15.

(Reporting by Tomo Uetake; Editing by Shri Navaratnam)

Source: OANN

FILE PHOTO: U.S. dollar notes are seen on a desk at a currency exchange booth in Karachi
FILE PHOTO: U.S. dollar notes are seen on a desk at a currency exchange booth in Karachi, Pakistan December 3, 2018. REUTERS/Akhtar Soomro/File Photo

June 17, 2019

By Shinichi Saoshiro

TOKYO (Reuters) – The dollar hovered near a two-week high early on Monday, as strong U.S. retail sales data tempered some of the fears about a sharp downturn in the world’s largest economy.

That provided some relief to the dollar ahead of the Federal Reserve’s policy meeting this week. While few expect the Fed to cut rates at Wednesday’s policy review, traders are wagering that policy makers will do just that in coming months.

The dollar index versus a basket of six major currencies was little changed at 97.509 after rising to 97.583 on Friday, its highest since June 3.

The index had declined to a 2-1/2-month low of 96.459 a little more than a week ago after a weak U.S. jobs report heightened Fed rate cut prospects.

Expectations of an interest rate cut at the Fed’s June 18-19 meeting fell from 28.3% on Thursday to 21.7% according to CME Group’s FedWatch tool. But bets of an easing at the July meeting remain high at 85%.

“In addition to the upbeat U.S. data, the dollar is supported by weakness in other currencies, notably the euro and antipodeans,” said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo.

“The Fed might cut rates sooner or later but so might its antipodean counterparts as well as the European Central Bank, and such views put the dollar at an advantage.”

With growth slowing and inflation staying well below the its target, the ECB recently raised the prospect of even more stimulus, arguing that a rate cut or even more asset purchases may become necessary.

The central banks of Australia and New Zealand face a similar predicament as the global economy braces for fallout from the U.S.-China trade conflict.

Australian bond yields slipped to a record low last week as investors priced in further easing by the Reserve Bank of Australia, which already cut rates to a record low 1.25% earlier this month.

The euro was little changed at $1.1216 after shedding about 0.6% on Friday, when it fell to an eight-day trough of $1.1203.

The Australian dollar crawled up 0.1% to $0.6878 but remained within reach of a five-month low of $0.6862 set on Friday, when the currency retreated nearly 0.7%.

The New Zealand dollar, which slumped more than 1% during the previous session, traded near a three-week low of $0.6488 brushed toward the end of last week.

The dollar was flat at 108.570 yen after edging up 0.15% on Friday.

(Graphic: World FX rates in 2019 – http://tmsnrt.rs/2egbfVh)

(Reporting by Shinichi Saoshiro; Editing by Shri Navaratnam)

Source: OANN

FILE PHOTO: The Walmart logo is displayed on a screen on the floor of the NYSE in New York
FILE PHOTO: The Walmart logo in New York, U.S., May 1, 2018. REUTERS/Brendan McDermid/File Photo

June 14, 2019

By Daina Beth Solomon

MEXICO CITY (Reuters) – Mexican officials blocked Walmart Inc’s deal to buy delivery app Cornershop because Walmart could not guarantee a level playing field for rival retailers, whose customers use the app to order groceries and other goods, according to an official document and an interview with the top competition regulator this week.

Cornershop operates in Mexico and Chile, promoting the app as providing delivery of “groceries to your front door in one hour” from retailers including Costco Wholesale Corp, Chedraui and Walmart. It charges retail chains a commission for its services.

Walmart had struck a deal to buy the popular app for $225 million in a bid to boost its e-commerce ambitions in Mexico, one of the retailer’s priority markets, and better compete with Amazon.com online.

The deal would have put Walmart in the unusual position of owning an online platform selling its own merchandise alongside goods sold by rivals, with potential access to data about orders placed with competitors.

That raised a red flag for the regulator in Mexico, where Walmart’s Walmex unit is already a dominant bricks-and-mortar retailer. Walmex operates 2,459 stores in Mexico, and is the country’s largest supermarket chain by far.

After months of analysis, Mexico’s Federal Economic Competition Commission (Cofece) last week opposed the deal, saying Walmart and Cornershop could “displace” competitors.

“It all has to do with Walmart’s size,” Cofece’s president, Alejandra Palacios, told Reuters in an interview at the regulator’s headquarters. “If you’re going to discriminate against or help one of the parties, you’re usually going to help the big one.”

A 92-page resolution, obtained independently by Reuters ahead of publication, underlines the depth of Cofece’s worries about the deal, which now likely will be tough for Walmart to revive.

Walmart made a number of proposals to address Cofece’s concerns, including not allowing overlapping board members between Walmart and Cornershop, according to the document. The commission rebuffed the attempts as too weak to guarantee they could be carried out properly.

“It is not clear to the commission that there would be independence between the Cornershop MX business and the interests of Walmart,” the document says. “Walmart has incentives to favor its supermarkets and price clubs or bestow unfavorable treatment to its competitors.”

Walmart has said it is analyzing how to respond to Cofece and that the deal would be positive for consumers and competition. The retailer declined to comment on Cofece’s findings in the document and comments from Palacios when contacted by Reuters.

The surprise denial could hurt Walmart’s ambitions for online supremacy in Mexico, its largest market outside the United States by store count.

Although Walmart rakes in nearly 60 percent of Mexico’s total supermarket sales, it does only about 1 percent of those sales online.

The threat of Amazon’s encroaching on Walmart’s territory began to loom larger in Mexico last year, when the online powerhouse launched deliveries of non-perishable groceries like beer and coffee.

Cofece’s denial also likely dashed Walmart’s hopes that Cornershop could serve as a model in its global quest to quickly deliver household products and fresh foods to shoppers’ homes.

In the United States, Walmart has struggled to get some of its delivery partnerships with third-party companies to work. For example, Walmart in the past year has ditched its grocery-delivery partnerships with Uber, Lyft and Google-backed Deliv, and has struggled to get its employees to deliver groceries, although it announced last week a revival of a service to use its own workers to deliver groceries straight to customers’ refrigerators.

It has had stumbles in the online realm. Walmart on Wednesday said it would overhaul start-up Jet.com, which it acquired in 2016 for over $3 billion, in a move that will reduce the unit’s scope and importance.

MARKET RISKS

Palacios said the Mexico deal could have hindered business for both supermarket and delivery app competitors, given Walmart’s potential to control Cornershop’s terms. For example, she said, Walmart could deliver fresh fruit in its own orders but rotten fruit from other stores.

In addition, Walmart might have used data from other stores on shopper habits for its own benefit, she said, and it might harm other delivery apps by choosing not to participate on them, in favor of Cornershop.

Palacios said Walmart’s proposals to resolve Cofece’s concerns would have been difficult to enforce.

“We didn’t think they were strong enough to mitigate the risks,” she said.

According to the Cofece document, Walmart and Cornershop said Cornershop board members, executives and staff would not be allowed to use store data to benefit Walmart. Cofece responded that the burden should fall on both companies to prevent leaks, not just one.

The commission requested information from delivery apps Rappi and Mercadoni, plus grocers Soriana, La Comer, Chedraui and Costco, to complete its analysis, according to the document.

Palacios declined to comment when asked if Cofece saw Amazon as a competitor to Walmart or Cornershop.

(Reporting by Daina Beth Solomon in Mexico City; Additional reporting by Nandita Bose in Washington; Editing by Christian Plumb and Leslie Adler)

Source: OANN

FILE PHOTO: Traders work on the floor at the NYSE in New York
FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., June 3, 2019. REUTERS/Brendan McDermid

June 14, 2019

By Shreyashi Sanyal

(Reuters) – U.S. stocks dropped on Friday, as shares of chipmakers sank on a warning from sector major Broadcom of a broad weakening in global demand and Chinese data pointed to the worst slowdown in industrial growth in 17 years.

Shares of Broadcom Inc fell 6.53% after it cut its full-year revenue forecast by $2 billion, blaming the U.S.-China trade conflict and export curbs on Huawei Technologies Co Ltd.

Shares of Apple Inc also slipped 1% and weighed the most on the three main indexes. Broadcom is a major supplier to the iPhone maker.

“Until there’s a resolution or some type of clarity on the trade deal with China, you’re going to see the chipmakers show weakness,” said Ryan Nauman, market strategist at Informa Financial Intelligence in Zephyr Cove, Nevada.

Losses in chip companies, who both source product and sell heavily in China, dragged the benchmark S&P 500 index lower, with the Philadelphia Semiconductor index tumbling 2.67%.

“People are backing off of optimism that a trade deal will get done and it’ll probably drag out longer into the year,” Nauman said.

China’s industrial output growth in May slowed below expectations and showed signs of weakening demand, sending a chill through stock market investors globally.

Technology stocks fell 0.8%, the most among the 11 major S&P sectors. The trade-sensitive industrials slipped 0.61%.

At 11:27 a.m. ET the Dow Jones Industrial Average was down 41.61 points, or 0.16%, at 26,065.16, the S&P 500 was down 7.07 points, or 0.24%, at 2,884.57 and the Nasdaq Composite was down 41.69 points, or 0.53%, at 7,795.44.

The S&P 500 index has gained 4.8% in June so far and was on track to end the week slightly higher, on hopes the Federal Reserve will soon cut interest rates.

A Fed meeting next week may provide the acid test of market expectations that the U.S. central bank could cut rates as much as three times this year, while a G20 summit at the end of the month may yet yield more progress on a trade deal.

In a bright spot, data showed U.S. retail sales increased in May and sales for the prior month were revised higher, suggesting a pick-up in consumer spending that could ease fears the economy was slowing down sharply in the second quarter.

Online pet products retailer Chewy Inc rose 63% in its market debut on Monday, at a valuation of over $14 billion and joined a host of high-profile companies, such as Lyft Inc and Uber Technologies Inc that listed on U.S. stock exchanges this year.

Declining issues outnumbered advancers for a 1.74-to-1 ratio on the NYSE and a 1.96-to-1 ratio on the Nasdaq.

The S&P index recorded 24 new 52-week highs and two new lows, while the Nasdaq recorded 31 new highs and 50 new lows.

(Reporting by Shreyashi Sanyal and Aparajita Saxena in Bengaluru; Editing by Patrick Graham and Arun Koyyur)

Source: OANN

FILE PHOTO: A man walks past the Bank of England in the City of London
FILE PHOTO: A man walks past the Bank of England in the City of London, Britain, February 7, 2019. REUTERS/Hannah McKay//File Photo

June 14, 2019

By Huw Jones

LONDON (Reuters) – Many of Britain’s fast-growing fledgling banks have little experience of downturns and could underestimate potential loan losses if markets turned sour, a Bank of England review of 20 lenders showed.

Britain has encouraged many new lenders to compete in a market dominated by HSBC, Barclays, RBS and Lloyds, known as the Big Four.

Over the past year the central bank has been reviewing the business models and activities of 20 “fast-growing” smaller lenders that have balance sheets of at least 750 million pounds ($945.5 million).

Melanie Beaman, a BoE director for UK deposit takers supervision, said in a letter to chief executives of the 20 banks that many of them were “overly optimistic” with regard to the potential impact that stressed markets would have on their business.

“This was most apparent in their assumptions about stressed impairment rates that could emerge and their ability to raise capital, dispose of parts of their business or widen their margins in the context of a market-wide stress,” Beaman said in the letter posted on the central bank’s website.

It comes after the BoE’s scrutiny of Metro Bank, which last month had to raise 375 million pounds to repair its balance sheet after disclosing in January that it had under-reported risks on its loan book.

Unlike its annual test of leading lenders such as HSBC and Barclays, the Bank has not named the 20 smaller lenders placed under the microscope or any of their individual results in the study.

The lenders, however, showed concentrations in higher-risk market segments that could be more vulnerable, Beaman said.

Many of these banks have ambitious growth plans that expect the additional income from new business to offset higher impairment charges, she added.

“We do not consider it appropriate to assume that significant growth would be available in generally falling markets,” said Beaman, who works at the BoE’s Prudential Regulation Authority.

Some of the fast-growing banks could also be in too much of a hurry, the study said.

“Firms are reminded to be mindful of the speed of decision-making in commercial lending cases and whether this might be compromsing the quality of analysis and robustness of the underwriting process,” Beaman said.

Some of the banks relied almost entirely on funding from competitively priced short-term, fixed-rate retail deposits, she added.

“You can expect your supervisory team to discuss the points raised in this letter with you as part of our ongoing supervisory engagement,” Beaman said.

($1 = 0.7933 pounds)

(Reporting by Huw Jones; Editing by David Goodman)

Source: OANN

Traders work on the floor at the NYSE in New York
Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., June 5, 2019. REUTERS/Brendan McDermid

June 14, 2019

(Reuters) – 1/THE FIRST CUT…

With President Donald Trump’s trade policies heightening fears of a U.S. recession, expectations of a Fed rate cut have dramatically increased in the past month. Money market pricing became even more aggressive after Federal Reserve Chair Jerome Powell threw open the door to a cut, promising on June 4 the Fed would act “as appropriate” to address risks from the trade dispute. It was the second sudden shift in the Fed’s tone, after January when it abandoned its bias toward steady tightening.

So when would it be appropriate for the Fed to act?

The Federal Open Market Committee might answer that question at its June 18-19 meeting. Money markets price a cut by July; by end-2019 they reckon the Fed will have cut twice at least.

The CME Group’s FedWatch tool shows traders assign an 88% probability of a cut in July. They put chances of a June cut at 23%, up from around 17% a week back. Vanguard, one of the world’s largest asset managers, is one investor who reckons the Fed will announce an “insurance” interest rate cut on June 19.

POLL-Trade war risks forcing Fed rate cut this year, say economists

WRAPUP 1-U.S. weekly jobless claims rise; imported inflation weak

UPDATE 1-Delay the ‘dot plot’? Fed policymakers face communications quandary

https://tmsnrt.rs/2R8CbGs

2/…WILL OTHERS FOLLOW?

If the Fed’s pivot to full-on dovishness in a short space of time was remarkable, the U-turn by other G10 central banks is as astonishing. From Canada to Japan, developed countries are now seen cutting interest rates.

Markets’ eyes will be firmly fixed on the ECB’s annual three-day shebang in Sintra and policy meetings in Japan and Britain. It was in Sintra two years ago that Mario Draghi sparked a bond selloff by remarking on the euro zone’s “strengthening and broadening” economic recovery. Sadly, that was a false alarm; two years later Draghi is winding up his term with little sign of growth or inflation and a real likelihood of more rate cuts.

Similarly, the Bank of Japan has watched its 2% inflation target recede into the distance. As the Fed gears up to cut rates, the BOJ may have no choice but to follow suit, possibly as early as September. It could cut rates to minus 0.3% from minus 0.1%, some predict. Bank of England policymakers have been at pains to stress rate hikes are still possible. The problem is that no one believes them: markets are pricing rate cuts by next June.

Upcoming meetings will be mostly about signaling. But they may show if policymakers intend to eventually walk that talk.

– ECB’s Rehn: tiering, rate cuts, more QE all on the table

– Bank of Canada done raising rates, 40% chance of cut by end-2020

-Australia jobless rate fails to fall, argues for July rate cut

https://tmsnrt.rs/2Igfo8O

3/IT ALL DEPENDS…

Despite a run of weak data and simmering trade tensions, the jury is out on whether the growth outlook is dire enough to merit immediate central bank action. But markets’ rate-cut fixation means the upcoming data deluge takes on greater significance than usual.

China’s May house price data and Germany’s closely-watched ZEW sentiment index are out Tuesday. Wednesday will bring Japanese export figures and UK inflation and on Thursday, we get the U.S. Philly Fed business index, British retail sales and an early reading of euro zone consumer confidence for June.

The week ends with a key snapshot of the world’s economic health – the Purchasing Managers’ Indexes (PMI) of business activity. U.S. manufacturing PMIs are still holding above the 50-mark that indicates an economy is growing. A move below is what everyone is watching for.

-China’s May industrial output growth cools to 17-yr low as trade war bites

-Muted U.S. inflation strengthens case for Fed rate cut

-World bonds wave recession flags as future inflation evaporates

https://tmsnrt.rs/2RdT02A

4/CHINA-HONG KONG (DIS) CONNECT

Perhaps nothing sums up the global zeitgeist better than the recent scenes in Asia’s leading finance hub, Hong Kong, where there were clashes between protesters and police but also it seemed between two visions of the world.

    Hong Kongers plan to continue protesting a proposed bill that allows people to be sent to mainland China for trial. Opponents of the bill highlight risks to human rights protections as well as the autonomy of Hong Kong’s legal system, one of its main competitive advantages.

The fear is that retail sales and tourism receipts could drop as seen during the 2014 “Umbrella” protests. But a greater problem would arise if the United States decides Hong Kong is not autonomous enough to justify the special treatment it receives — its current status shields it from import tariffs, visa rules and other curbs that apply to mainland China.

    Spiraling cash demand due to the standoff has pushed interbank rates to decade-highs while HK stocks have tumbled. The backwash for Beijing too may be unpleasant — Hong Kong is a useful channel for Chinese trade, IPOs and investment. Some $1 trillion in trade passed through it last year and the Stock Connect program with Hong Kong contributes to turnover on mainland exchanges. Watch those protests.

-BREAKINGVIEWS-Hong Kong risks its future as global business hub

-U.S. senators propose law requiring annual certification of Hong Kong autonomy

-Heated Hong Kong protests dent stocks, spike cash demand

https://tmsnrt.rs/2X9rU2d

5/IF AT FIRST YOU DON’T SUCCEED…

Voters in Turkey head back to the polls on June 23 for a re-run of the Istanbul mayoral contest. Authorities scrapped the result of the original March 31 vote. That was lost by President Tayyip Erdogan’s candidate, after his AKP Party said the result was invalid. The ousted mayor Ekrem Imamoglu, who represents the main CHP opposition party disagrees, and calls the election a “battle for democracy”.

Indeed, the outcome of the vote will be a good indication of the future direction of policy in Turkey. A victory for the CHP could bolster calls for reforms to revive the economy, while proving potentially damaging for Erdogan’s authority. But an AKP win could allow Erdogan to tighten his grip on power.

Raising the stakes further is that the election takes place at a testing time — tensions are running high between Ankara and Washington over the purchase of Russian S-400 defense systems. U.S. threats of sanctions have caused a selloff in the lira while risk-insurance costs for Turkey are on the rise.

-Turkey says would retaliate against U.S. sanctions over Russian S-400s

-Turkey says it has already bought Russian S-400 defense systems

-Ousted Istanbul mayor says election re-run a battle for democracy

https://tmsnrt.rs/2XKCIAR

(Reporting by Sujata Rao, Dhara Ranasinghe, Tom Arnold and Saikat Chatterjee in London; Marius Zaharia in Hong Kong and Jennifer Ablan in New York; Editing by Toby Chopra)

Source: OANN

FILE PHOTO: The inside of the Gadsden Mall is pictured in Gadsden, Alabama
FILE PHOTO: The inside of the Gadsden Mall is pictured in Gadsden, Alabama, U.S., December 10, 2017. REUTERS/Carlo Allegri

June 14, 2019

WASHINGTON (Reuters) – U.S. retail sales increased in May and sales for the prior month were revised higher, suggesting a pick-up in consumer spending that could ease fears the economy was slowing down sharply in the second quarter.

The Commerce Department said on Friday retail sales rose 0.5% last month as households bought more motor vehicles and a variety of other goods. Data for April was revised up to show retail sales gaining 0.3%, instead of dropping 0.2% as previously reported.

Economists polled by Reuters had forecast retail sales climbing 0.6% in May. Compared to May last year, retail sales increased 3.2%.

Excluding automobiles, gasoline, building materials and food services, retail sales advanced 0.5% last month after an upwardly revised 0.4% rise in April. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product.

They were previously reported to have been unchanged in April. Consumer spending accounts for more than two-thirds of economic activity.

The solid gains in core retail sales in April and May suggested consumer spending was gaining speed in the second quarter after braking sharply in the January-March quarter.

That could see economists raising their second-quarter GDP growth estimates, which are currently below a 2.0% annualized rate. The economy grew at a 3.1% pace in the January-March quarter after getting a temporary boost from exports and an accumulation of inventory.

Exports dropped in April and inventory investment is slowing. In addition, manufacturing production and home sales fell in April. The outlook for consumer spending is mixed. While consumer confidence remains strong, wage growth retreated in May and hiring moderated sharply.

Overall, the economy is losing steam as the stimulus from last year’s $1.5 trillion tax cut and increased government spending dissipates. The trade war between the United States and China, which escalated recently, is also hurting the economy.

Last month, sales at auto dealerships accelerated 0.7% after dropping 0.5% in April. Receipts at service stations rose 0.3%.

Building materials and garden equipment sales edged up 0.1%, while online and mail-order purchases jumped 1.4%.

Sales at clothing stores were unchanged and receipts at furniture outlets nudged up 0.1%. Sales at bars and restaurants increased 0.7% last month, while those at hobby, musical instrument and book stores rose 1.1%.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

Source: OANN

A sample of industrial hemp seeds is shown at a research station site in Haysville, Kansas
A sample of industrial hemp seeds is shown at a research station site in Haysville, Kansas, U.S., May 2, 2019. REUTERS/Julie Ingwersen

June 14, 2019

By Julie Ingwersen and David Randall

HAYSVILLE, Kansas (Reuters) – A growing number of U.S. farmers battered by low grain prices and the threat of a prolonged trade war with China are seeking salvation in a plant that until recently was illegal: hemp.

A cousin of cannabis plants that produce marijuana, hemp is used in products ranging from food to building materials and cannabidiol, or CBD oil, which is being touted as a treatment for everything from sleeplessness to acne to heart disease.

Interest in hemp picked up with the passage of the 2018 Farm Bill in December, which removed hemp from the federal Drug Enforcement Administration’s list of controlled substances and put it under the oversight of the U.S. Department of Agriculture (USDA). Unlike marijuana, industrial hemp doesn’t contain enough of the psychoactive chemical THC to give users a high.

The new rules call for the USDA to award hemp planting licenses to farmers but the agency has not yet regulated the process, meaning individual states are still issuing the licenses.

Industrial hemp plantings this year could double from the 78,176 acres seeded in 2018, said Eric Steenstra, president of advocacy group Vote Hemp. In 2017, 25,713 acres were planted on pilot programs authorized under the 2014 farm bill.

The U.S. hemp market is growing along with supply. U.S. sales of hemp reached $1.1 billion in 2018 and are projected to reach $1.9 billion by 2022, according to Vote Hemp and the Hemp Business Journal, a trade publication.

The profit potential is high: A good yield of food-grade hemp, for instance, can net farmers about $750 per acre, said Ken Anderson, founder of Prescott, Wisconsin-based hemp processor Legacy Hemp. Hemp seeds can be baked in to bread or sprinkled onto cereal or salads.

“That’s a profit that blows corn and wheat and everything else out of the water,” he said.

By comparison, soybeans bring in $150 or less per acre, and sales of the U.S. crop to China have fallen sharply since the onset of the trade war last year.

Before they can cash in on hemp, however, U.S. farmers must learn the science of producing an unfamiliar crop and wrestle with shifting regulations and other uncertainties.

“Nobody has any experience whatsoever,” said Rick Gash, 46, a businessman in Augusta, Kansas, who plans to grow his first-ever hemp crop on a horse pasture on his old family property.

NEW FRONTIER FOR REGULATION

CBD oil, which is concentrated in the hemp plant’s flowers, made up an estimated 23 percent of hemp sales in 2017, according to the Hemp Business Journal.

While the USDA oversees hemp planting, regulation of hemp products mostly falls to The Food and Drug Administration (FDA). Though the agency has not approved food and supplements containing CBD, such products are widely available and the agency has done little to curtail their sales.

Furthermore, the FDA mainly has jurisdiction over commerce between states, meaning products developed and sold locally in states that have more tolerant laws for hemp products is legal.

“To date, the FDA has only gone after people making aggressive claims – cancer treatment claims, AIDS treatment claims and the like,” said attorney Jonathan Havens, former FDA regulatory counsel and current co-chair of cannabis law practice at Saul Ewing Arnstein & Lehr.

Other CBD products with no health claims or ‘soft’ claims have drawn no federal enforcement, he said, “causing many people to confuse availability with legality.”

The FDA said in a statement to Reuters it had developed a strategy to evaluate existing CBD products and create lawful pathways for bringing them to market. The agency knows some companies are marketing products containing hemp-derived compounds in ways that violate the law but has prioritized those making unwarranted health claims for enforcement action, the FDA said.

“Our biggest concern is the marketing of products that put the health and safety of consumers at greatest risk, such as those claiming to prevent, diagnose, treat, or cure serious diseases, such as cancer,” the agency said in the statement.

CBD ICE CREAM?

Despite the uncertainty, analysts at U.S. financial services firm Cowen & Co estimate that products with CBD as an ingredient will generate $16 billion in retail sales for humans and animals in the U.S. by 2025.

Companies are also making big bets: Kroger Co, the nation’s largest grocery chain, said on Tuesday it plans to sell CBD creams, balms and oils in nearly 1,000 stores across 17 states.

Unilever Plc’s Ben & Jerry’s ice cream chain said in a May 30 statement it planned to debut CBD-infused ice cream flavors as soon as consuming the oil is “legalized at the federal level.”

In Kentucky, which launched a pilot program for hemp in 2014, farmers who used to grow tobacco are finding hemp grown for CBD oil to be a profitable alternative with a better reputation.

“When I was growing tobacco, everyone said I was growing something that’s bad for your health,” said Brian Furnish, an eighth-generation tobacco farmer. “It’s fun to grow something that is making people feel better.”

Farther west, in the U.S. midsection where farmers are more familiar with commodity crops like corn and wheat and have been more scarred by the trade war, some see hemp as a rotational crop grown on a larger scale for seed and fiber, rather than for its labor-intensive CBD oil.

EXPENSIVE SEED, HARVESTING BY HAND

The Kansas Department of Agriculture began issuing licenses to growers this spring, allowing the crop to be cultivated in the state this year for the first time in decades.

    Jason Griffin, a specialist at Kansas State University, remains skeptical of the crop’s potential and cringes when he hears descriptions like ‘gold rush’ to describe it.

Beyond navigating changing regulations, expensive seed is one of many challenges that pioneering hemp farmers will face.

Special equipment for harvesting hemp may also be required, although some growers have been able to re-purpose the combines they already own. The hemp plant’s flowers are typically harvested by hand, while hemp for fiber is grown in fields and must be cut mechanically and dried in the field before storage.

Farmers are particularly dependent on the end buyers of hemp, as there are few third-party brokers to sell it as there are for other cash crops.

“You can’t just go to the local grain elevator and ask what’s your cash price for hemp grain right now,” said Legacy Hemp’s Anderson.

He often cautions farmers not to plant seeds until they have a contract with a buyer because prices vary widely. Legacy Hemp signs contracts with farmers before the planting season.

Other farmers are concerned over the long-term prospects. Montana wheat farmer Nathan Keane is growing female hemp plants exclusively for CBD oil, starting in a greenhouse and transplanting each plant later by hand.

“Honestly, I think the CBD thing is going to be a bubble,” he said. “I will ride the wave … but I’m really hoping the sustainability of hemp is going to be in the grain and the fiber.”

(Reporting by Julie Ingwersen and David Randall; Additional reporting by Richa Naidu; Editing by Caroline Stauffer and Brian Thevenot)

Source: OANN

FILE PHOTO: People are seen in a coffee shop in Dubrovnik
FILE PHOTO: People are seen in coffee shop in Dubrovnik, Croatia, August 2, 2018. Picture taken August 2, 2018. REUTERS/Antonio Bronic/File Photo

June 14, 2019

ZAGREB (Reuters) – Croatia’s tourism industry, a key engine of the economy, urged the government on Friday to allow more foreign workers into the sector to help staff bars and restaurants in the high season.

Croatia, the youngest European Union member, is highly dependent on mostly summer tourism receipts, with the industry contributing almost 20 percent to gross domestic product.

“Ahead of the main tourist season, the situation with workforce is critical and opening of some tourist capacities, including bars and restaurants, is in jeopardy,” Croatia’s association of tourist firms (HUT) and the national association of employers (HUP) said in a joint appeal to officials.

In December, Croatia raised the number of licenses for foreign workers for 2019 to 65,100 from 38,769 last year. The quota for workers in tourism was raised to 15,611 from 8,930. [nL8N1YP2GE]

The sectors that suffer most from a shortage of qualified workers are tourism, construction, retail, manufacturing and transport.

“It is our goal primarily to employ domestic workforce but the local people are not available or interested to take jobs in tourism,” the HUT said.

The average monthly salary in Croatia was 6,464 kuna ($983.60) in March. The unemployment rate in April was 8.6 percent.

Foreign workers who come to Croatia are mostly from non-EU Balkan states, but some also arrive from more distant nations such as Ukraine or even Asian countries.

(Reporting by Igor Ilic; Editing by Mark Potter)

Source: OANN

Man is seen in front of an electronic board showing stock information on the first day of trading in the Year of the Pig at a brokerage house in Hangzhou
FILE PHOTO: A man is seen in front of an electronic board showing stock information on the first day of trading in the Year of the Pig, following the Chinese Lunar New Year holiday, at a brokerage house in Hangzhou, Zhejiang province, China February 11, 2019. REUTERS/Stringer

June 14, 2019

By Shinichi Saoshiro

TOKYO (Reuters) – Asian stocks were subdued on Thursday ahead of key Chinese data that could provide more clues on how heavily the U.S.-Sino trade war is weighing on the economy, while oil prices were supported by supply concerns after attacks on tankers in the Gulf of Oman.

China will release May industrial production along with retail sales and investment numbers at 0700 GMT.

Economists polled by Reuters expect industrial production in China to have risen 5.5% in May from 5.4% in April and believe retail sales increased 8.1% from 7.2% the previous month.

But even if the data is better than forecast, expectations of more stimulus in China are growing as the trade dispute threatens to escalate into a full-blown trade war that could push the global economy into recession.

MSCI’s broadest index of Asia-Pacific shares outside Japan edged down 0.2%.

For the week, it was headed for a gain of nearly 1%, as global stock markets were lifted by factors including expectations for Federal Reserve rate cuts and relief over a U.S.-Mexico tariff deal.

The Shanghai Composite Index dipped 0.1%, Australian stocks added 0.1% and Japan’s Nikkei climbed 0.25%.

“Risk assets have been struggling for direction as competing themes battle to decide the tone of global risk sentiment,” wrote strategists at ANZ.

“On one hand, the prospect of Fed easing assuages some fear of a global slowdown, but on the other hand trade issues still

present downside risk.”

U.S. stocks rose on Thursday after two days of declines, with energy shares rebounding on the back of crude oil’s surge. [.N]

Wall Street shares have had a strong run in June on hopes the Federal Reserve will ease monetary policy soon to counter pressure on the U.S. economy from the escalating trade war. The S&P 500 index is up about 5% so far for the month.

The Fed’s June 18-19 meeting will give investors an opportunity to see if the Fed’s monetary policy stance is in sync with market expectations for a near-term rate cut.

A Reuters poll this week showed a growing number of economists expect a Fed rate cut this year but the majority still expect it to stay on hold.

“There is a large degree of uncertainty going into next week’s FOMC (Federal Reserve Open Committee) meeting as market reaction will differ significantly depending on whether the Fed hints toward easing policy,” said Shusuke Yamada, chief Japan FX and equity strategist at Bank Of America Merrill Lynch.

“A wait-and-see mood is likely to begin prevailing in the markets ahead of the FOMC.”

In commodities, Brent crude futures edged up 0.2% to $61.43 per barrel after rallying 2.3% the previous day.

Brent surged on Thursday after two oil tankers were attacked in the Gulf of Oman, one Norwegian-owned and the other Japanese-owned.

The United States has blamed Iran for the assaults. But U.S. and European security officials as well as regional analysts left open the possibility that Iranian proxies, or someone else entirely, might have been responsible.

U.S. crude slipped 0.13% to $52.21 per barrel after rising more than 2 percent on Thursday.

The dollar index against a basket of six major currencies was little changed at 97.023 after ending the previous day nearly flat, with caution ahead of the next week’s Fed meeting keeping the greenback in a tight range.

The euro was steady at $1.1276 while the greenback dipped 0.1% to 108.300 yen .

The Australian dollar extended overnight losses and fell to a three-week low of $0.6892.

The Aussie has lost 1.4% this week, during which soft domestic labor data added to expectations of a rate cut by the Reserve Bank of Australia.

(Editing by Simon Cameron-Moore & Kim Coghill)

Source: OANN

Man is seen in front of an electronic board showing stock information on the first day of trading in the Year of the Pig at a brokerage house in Hangzhou
FILE PHOTO: A man is seen in front of an electronic board showing stock information on the first day of trading in the Year of the Pig, following the Chinese Lunar New Year holiday, at a brokerage house in Hangzhou, Zhejiang province, China February 11, 2019. REUTERS/Stringer

June 14, 2019

By Shinichi Saoshiro

TOKYO (Reuters) – Asian stocks were subdued on Thursday ahead of key Chinese data that could provide more clues on how heavily the U.S.-Sino trade war is weighing on the economy, while oil prices were supported by supply concerns after attacks on tankers in the Gulf of Oman.

China will release May industrial production along with retail sales and investment numbers at 0700 GMT.

Economists polled by Reuters expect industrial production in China to have risen 5.5% in May from 5.4% in April and believe retail sales increased 8.1% from 7.2% the previous month.

But even if the data is better than forecast, expectations of more stimulus in China are growing as the trade dispute threatens to escalate into a full-blown trade war that could push the global economy into recession.

MSCI’s broadest index of Asia-Pacific shares outside Japan edged down 0.2%.

For the week, it was headed for a gain of nearly 1%, as global stock markets were lifted by factors including expectations for Federal Reserve rate cuts and relief over a U.S.-Mexico tariff deal.

The Shanghai Composite Index dipped 0.1%, Australian stocks added 0.1% and Japan’s Nikkei climbed 0.25%.

“Risk assets have been struggling for direction as competing themes battle to decide the tone of global risk sentiment,” wrote strategists at ANZ.

“On one hand, the prospect of Fed easing assuages some fear of a global slowdown, but on the other hand trade issues still

present downside risk.”

U.S. stocks rose on Thursday after two days of declines, with energy shares rebounding on the back of crude oil’s surge. [.N]

Wall Street shares have had a strong run in June on hopes the Federal Reserve will ease monetary policy soon to counter pressure on the U.S. economy from the escalating trade war. The S&P 500 index is up about 5% so far for the month.

The Fed’s June 18-19 meeting will give investors an opportunity to see if the Fed’s monetary policy stance is in sync with market expectations for a near-term rate cut.

A Reuters poll this week showed a growing number of economists expect a Fed rate cut this year but the majority still expect it to stay on hold.

“There is a large degree of uncertainty going into next week’s FOMC (Federal Reserve Open Committee) meeting as market reaction will differ significantly depending on whether the Fed hints toward easing policy,” said Shusuke Yamada, chief Japan FX and equity strategist at Bank Of America Merrill Lynch.

“A wait-and-see mood is likely to begin prevailing in the markets ahead of the FOMC.”

In commodities, Brent crude futures edged up 0.2% to $61.43 per barrel after rallying 2.3% the previous day.

Brent surged on Thursday after two oil tankers were attacked in the Gulf of Oman, one Norwegian-owned and the other Japanese-owned.

The United States has blamed Iran for the assaults. But U.S. and European security officials as well as regional analysts left open the possibility that Iranian proxies, or someone else entirely, might have been responsible.

U.S. crude slipped 0.13% to $52.21 per barrel after rising more than 2 percent on Thursday.

The dollar index against a basket of six major currencies was little changed at 97.023 after ending the previous day nearly flat, with caution ahead of the next week’s Fed meeting keeping the greenback in a tight range.

The euro was steady at $1.1276 while the greenback dipped 0.1% to 108.300 yen .

The Australian dollar extended overnight losses and fell to a three-week low of $0.6892.

The Aussie has lost 1.4% this week, during which soft domestic labor data added to expectations of a rate cut by the Reserve Bank of Australia.

(Editing by Simon Cameron-Moore & Kim Coghill)

Source: OANN

U.S. dollar notes are seen in this picture illustration
FILE PHOTO: U.S. dollar notes are seen in this November 7, 2016 picture illustration. REUTERS/Dado Ruvic/Illustration

June 14, 2019

By Daniel Leussink

TOKYO (Reuters) – The dollar held steady early in Asia on Friday, and was set ot show a weekly rise as investor focus turned to next week’s Federal Reserve meeting for cues on a possible interest rate cut in light of rising risks to trade and global growth.

The dollar index against a basket of six rivals was basically unchanged at 97.001, and on track for a near 0.5% gain this week. The index had touched an 11-week low of 96.459 last Friday.

The Federal Open Market Committee’s (FOMC) two-day policy meeting is set to begin on Tuesday. With trade tensions rising, U.S. growth slowing and hiring in May declining, markets have priced in at least two rate cuts by the end of 2019.

There was only an 11.3% expectation on Thursday that U.S. interest rates will be at current levels in July of this year, compared to 74.1% a month ago, according to the CME Group’s FedWatch tool.

“Ahead of the FOMC meeting, people are expecting dovish comments from the Fed, which is weighing on the dollar in general,” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities.

“However, other currencies like euro and sterling are weak and their weakness is helping the strength of the dollar,” he said.

Investors’ attention on Friday will also be on U.S. retail sales data due later in the day for insights into the state of domestic demand in the world’s biggest economy.

Against the yen, the dollar dipped 0.05% to 108.34 yen. The yen showed little reaction to the latest round of trade negotiations between Tokyo and Washington on Thursday.

Japan and the United States deepened their understanding over each other’s position on trade and will continue discussions, Japan’s economy minister Toshimitsu Motegi said after meeting with U.S. Trade Representative Robert Lighthizer.

Motegi said the two would probably meet again ahead of the G20 summit meeting in Osaka, Japan late this month.

The euro edged up 0.03% to $1.1280, holding up after falling during the past two sessions, though it was still set for a weekly loss of 0.44%.

Elsewhere, the Australian dollar was a shade lower at $0.6913, staying within reach of this month’s low of $0.6901 touched on Thursday.

Oil futures dipped in early trading on Friday, having risen sharply on Thursday following attacks on two tankers near Iran and the Strait of Hormuz, a key passage for seaborne oil cargoes.

Mizuho’s Yamamoto said rising oil prices resulting from geopolitical tension in the Middle East could create a drag on the dollar, adding that higher crude prices were not necessarily bad for the global economy.

(Editing by Simon Cameron-Moore)

Source: OANN

FILE PHOTO: The logo of AMP Ltd, Australia's biggest retail wealth manager, adorns their head office located in central Sydney, Australia
FILE PHOTO: The logo of AMP Ltd, Australia’s biggest retail wealth manager, adorns their head office located in central Sydney, Australia, May 5, 2017. REUTERS/David Gray

June 13, 2019

SYDNEY (Reuters) – Australia’s banking watchdog on Friday said it had issued directions and license conditions on AMP Ltd’s pension fund units to force it to comply with regulations governing the superannuation industry.

The Australian Prudential Regulation Authority (APRA) said the conditions apply to AMP Superannuation Limited and N.M. Superannuation Proprietary Limited, collectively known as AMP Super.

“The new directions and conditions are designed to deliver enhanced member outcomes by requiring AMP Super to make significant changes to its business practices,” APRA said in a statement.

Problems identified included conflicts of interest, management, governance and risk management practices, breach remediation processes, addressing poor risk culture and strengthening accountability mechanisms.

The directions also require AMP Super to renew and strengthen its board, and to engage an external expert to report on remediation and compliance.

(Reporting by Wayne Cole; editing by Grant McCool)

Source: OANN

FILE PHOTO: People walk past a Topshop and Topman store, owned by Arcadia Group, in central London
FILE PHOTO: People walk past a Topshop and Topman store, owned by Arcadia Group, in central London, Britain, June 5, 2019. REUTERS/Henry Nicholls/File Photo

June 13, 2019

By James Davey

LONDON (Reuters) – Philip Green’s Topshop-to-Dorothy Perkins fashion empire staved off a collapse into administration on Wednesday as creditors approved his sweetened restructuring plan.

The restructuring will close stores, cut rents and make changes to the funding of the group’s pension schemes, but it will enable it to keep operating under the Green family’s ownership.

All seven of the Company Voluntary Arrangements (CVAs) proposed by Green’s Arcadia Group were approved by the required majority of creditors, including its pension trustees, suppliers and landlords, the retailer said.

“We are extremely grateful to our creditors for supporting these proposals,” Arcadia’s CEO Ian Grabiner said.

“The future of Arcadia, our thousands of colleagues, and our extensive supplier base is now on a much firmer footing.”

A week ago the creditors’ meeting was adjourned after several landlords chose not to back Green’s plan.

He responded on Friday by offering better terms to landlords, with the costs met by Tina Green – his Monaco-based wife and the ultimate owner of the group.

“IRRELEVANT”

A string of British store groups have either gone out of business or announced plans to close shops over the last two years as they struggle with subdued consumer spending, rising labour costs and business property taxes and growing online competition.

CVAs have been carried out by UK retailers including fashion chain New Look, floor coverings firm Carpetright, mother-and-baby goods group Mothercare and department store chains House of Fraser and Debenhams.

But they are no guarantee of survival. Toys r Us UK and department store group BHS, once also owned by Arcadia, both carried them out but still ended up going out of business.

Arcadia owns Topshop, Topman, Burton Menswear, Dorothy Perkins, Evans, Miss Selfridge and Wallis.

“Topshop and Topman still have a strong following among millennials, however many of the others, such as Miss Selfridge and Dorothy Perkins, are now irrelevant in a highly saturated market and chances of revival are slim,” said Chloe Collins, senior retail analyst at GlobalData.

Green’s plan involves closing an initial 23 of Arcadia’s 566 UK and Irish stores and rent reductions of 25% to 50% across 194 locations over three years.

It will see Tina Green invest 50 million pounds ($63.4 million) of equity into the group and provide affected landlords with the right to a pro-rata share of 20% of any equity value in the group from a future sale. Affected landlords will also be able to claim from a 40 million pounds creditor fund.

Arcadia will provide 210 million pounds of security over assets for its pension schemes to help close a funding deficit, while Tina Green would also contribute 100 million pounds to the schemes over three years.

Arcadia’s own annual contributions to its pension schemes will be reduced from 50 million pounds to 25 million pounds for three years.

REPUTATION

Green, 67, did not attend the meeting and has not been seen in Britain for months.

Once known as the “king of the high street” his star has dramatically waned in recent years.

His reputation was badly damaged by the collapse of BHS in 2016 and its aftermath. Green had sold BHS to a collection of little-known investors for a nominal sum of a pound the previous year.

Last October Green was named in parliament as having taken legal action to try to prevent publication of allegations of sexual harassment against him, while last month he was charged with four counts of misdemeanour assault in the United States. He denies the allegations.

Some of the earlier landlord opposition to Green’s restructuring plan stemmed from criticism of his stewardship of Arcadia, including a perceived lack of investment, and his family’s enormous wealth.

In 2005 Arcadia famously took on more debt and paid Tina Green a 1.2 billion pound dividend.

(Reporting by James Davey, editing by Kate Holton and Susan Fenton)

Source: OANN

People tour The Shops during the grand opening of The Hudson Yards development in New York
People tour The Shops during the grand opening of The Hudson Yards development, a residential, commercial, and retail space on Manhattan’s West side in New York City, New York, U.S., March 15, 2019. REUTERS/Brendan McDermid

June 12, 2019

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. consumer prices barely rose in May, pointing to moderate inflation that together with a slowing economy could increase pressure on the Federal Reserve to cut interest rates this year.

The report from the Labor Department on Wednesday, however, showed some pockets of inflation, with rents and healthcare costs rising solidly, which could buy the U.S. central bank some time before easing monetary policy.

Fed policymakers are scheduled to meet on June 18-19 against the backdrop of rising trade tensions, slowing growth and a sharp step-down in hiring in May that has led financial markets to price in at least two interest rate cuts by the end of 2019.

Fed Chairman Jerome Powell said last week that the central bank was closely monitoring the implications of the trade war on the economy and would “act as appropriate to sustain the expansion.” A rate cut is not expected next Wednesday.

The consumer price index edged up 0.1% last month as a rebound in the cost of food was offset by cheaper gasoline, the government said. The CPI gained 0.3% in April.

In the 12 months through May, the CPI increased 1.8%, slowing from April’s 1.9% gain. Economists polled by Reuters had forecast the CPI would rise 0.1% in May and 1.9% year-on-year.

Excluding the volatile food and energy components, the CPI nudged up 0.1% for the fourth straight month. The so-called core CPI was held down by a sharp decline in the prices of used cars and trucks as well as motor vehicle insurance.

In the 12 months through May, the so-called core CPI rose 2.0% after advancing 2.1% in April.

The U.S. dollar dropped sharply against a basket of currencies after the release of the data while U.S. Treasury yields fell. U.S. stock index futures pared losses slightly.

RENT, HEALTHCARE COSTS RISE

A report on Tuesday showing core producer prices advancing solidly for a second consecutive month in May had offered hope for a firmer core CPI reading in May, as well as in the inflation measure tracked by the Fed for monetary policy.

The Fed’s preferred inflation measure, the core personal consumption expenditures (PCE) price index, increased 1.6 percent in the year to April after gaining 1.5% in March. Data for May will be released later this month. The core PCE price index has been running below the Fed’s 2% target this year.

Gasoline prices fell 0.5% in May after rising 5.7% in April. Food prices rebounded 0.3% in May after dipping 0.1% in the prior month. Food consumed at home increased 0.3% last month.

Owners’ equivalent rent of primary residence, which is what a homeowner would pay to rent or receive from renting a home, increased 0.3% in May after rising 0.3% in April.

Healthcare costs increased 0.3%, matching April’s rise. The solid increase in healthcare costs at both the consumer and production levels last month suggests a pickup in the core PCE price index in May.

The cost of hospital services increased 0.5% in May and the cost of doctor visits ticked up 0.1%. But the prices for prescription medication fell 0.2%.

Apparel prices were unchanged in May after tumbling 0.8% in the prior month. They had declined for two months in a row after the government introduced a new method and data to calculate apparel prices.

Prices for used motor vehicles and trucks tumbled 1.4%. That was the largest drop since last September and marked the fourth straight monthly decrease. The cost of motor vehicle insurance fell 0.4%, the most since May 2007. There were also decreases in the cost of recreation.

But prices for airline tickets, household furnishings and new vehicles rose last month. Household furnishings are likely to trend higher in the coming months because of U.S. President Donald Trump’s decision in early May to slap additional tariffs of up to 25% on $200 billion of Chinese goods.

(Reporting by Lucia Mutikani; Editing by Paul Simao)

Source: OANN

A worker arranges consumable goods inside a Patanjali store in Ahmedabad
FILE PHOTO: A worker arranges consumable goods inside a Patanjali store in Ahmedabad, India, March 28, 2019. REUTERS/Amit Dave

June 12, 2019

By Alexandra Ulmer and Rajendra Jadhav

HARIDWAR, India (Reuters) – Three years ago, Indian yoga guru and entrepreneur Baba Ramdev was riding high.

The consumer goods empire he co-founded had tapped into a wave of Hindu nationalism after the election of Prime Minister Narendra Modi. Customers were snapping up Patanjali Ayurved’s affordable, Indian-made products such as coconut oil and ayurvedic remedies, in a mounting threat to foreign companies that had bet big on India.

“Turnover figures will force multinational companies to go for kapalbhati,” saffron-robed Ramdev declared in 2017, in reference to a yoga breathing exercise, vowing sales would more than double to 200 billion rupees ($2.84 billion) in the year to March 2018.

But instead Patanjali’s sales plunged 10% to 81 billion rupees, according to its annual financial report.

And in the last fiscal year, it likely deteriorated further, say company sources and analysts. Provisional data indicated sales of just 47 billion rupees in the nine months to Dec. 31, CARE Ratings said in April, based on information from Patanjali.

(Graphic: Patanjali yearly sales link: https://tmsnrt.rs/2WZ0MiW)

According to interviews with current and former employees, suppliers, distributors, store managers, and consumers, Patanjali’s ambitions have been hobbled by missteps.

In particular, they highlight inconsistent quality as Patanjali expanded very quickly.

The company says its rapid expansion did bring some teething problems, but that they had been overcome.

Patanjali also suffered, like many others, from Modi’s 2016 ban on high-denomination banknotes and 2017 introduction of a new goods and services tax. The moves disrupted economic activity.

“PROBLEMS WERE EXPECTED”

Patanjali says it has 3,500 distributors that supply some 47,000 retail counters across India. Patanjali shops, mostly popular with rural Indians rising into the middle class, sell snacks like mango candy or ayurvedic remedies promising to cure joint pain.

Ramdev, a household name whose TV yoga shows are watched by millions, has been the public face of Patanjali since it was set up in 2006 and remains its brand ambassador – his bearded face smiles down from ubiquitous billboards and hoardings in Indian villages.

But the company is owned by his business partner Acharya Balkrishna, who met Ramdev at a Sanskrit school three decades ago and holds 98.55% of Patanjali’s shares, according to a 2018 company filing.

The 46-year-old Balkrishna, whose net worth Forbes puts at $4.9 billion, brushed aside concerns about the company’s health during an April interview at one of Patanjali’s yoga centers near Haridwar, an ancient pilgrimage site in northern India.

“We suddenly expanded, we started three-four new units, and so problems were expected. We have solved that network problem,” said Balkrishna, referring to supply chain issues that affected deliveries. The problems were concentrated in “set-up and networking”, he said, without elaborating.

One ex-employee said issues included not having long-term deals with transporters, which complicated planning and increased costs. Patanjali executives also lacked the software needed to effectively track sales, another former worker said.

Balkrishna declined to give sales estimates for the current fiscal year or last but said future results would be “better”.

Reuters sent follow-up questions to Patanjali’s public relations officer K.K. Mishra, who said the queries had been forwarded to a special committee. Calls and messages to Balkrishna’s assistant about the queries went unanswered.

THIRD PARTY SUPPLIERS

As Patanjali has ramped up its offering to more than 2,500 goods, it has prioritized scale over quality and farmed out production to third parties, which has dented quality, two former office executives and a supplier said.

In 2017, Nepal’s drug watchdog found that six Patanjali medical products had microorganism content above a maximum ceiling set by the regulator. Santosh K.C., an official at Nepal’s Department of Drug Administration, said there were no problems with other Patanjali products.

Balkrishna denies there have been quality issues, noting that India’s national laboratories accreditation board has approved Patanjali’s central lab.

“Quality is not a problem,” Balkrishna said.

Patanjali products marketed as ayurvedic come under the regulatory purview of the Ministry of Ayush, created in 2014 to promote alternative therapies including Ayurveda, an ancient Hindu healing method. The ministry did not respond to a request for comment on Patanjali’s product quality.

India’s food regulator FSSAI, which oversees Patanjali’s processed foods, declined to disclose data on quality tests, saying it only did so in the event of safety concerns.

Balkrishna said only “a few products”, including wheat, pulses and rice, were sourced externally.

Reuters reviewed 81 Patanjali products in a Mumbai Patanjali store and found that 27 of them had labels that listed the goods as partially or wholly manufactured by other Indian producers.

These suppliers either declined to comment or did not respond to questions.

The construction of Patanjali’s own factories has been dogged by delays, which the company attributes to starting multiple projects simultaneously.

A food plant in Maharashtra due by April 2017 and an ayurvedic and herbal products factory outside Delhi expected by 2016 are now slated for 2020, according to Patanjali.

UNPAID SUPPLIERS, DWINDLING ADS

Some unpaid suppliers are turning their backs on the company, according to interviews with three suppliers as well as letters, reviewed by Reuters, sent to the company by those owed money.

A chemical supplier said Patanjali started delaying payments by a month or two in 2017. By 2018, delays had grown to almost six months.

Two managers at stores of leading Indian retailers and two mom and pop stores owners, all in Mumbai, said they were only keeping a handful of Patanjali products in stock due to faltering demand.

Faced with the threat from Patanjali, competitors such as Hindustan Unilever and Colgate Palmolive India Ltd have launched ayurvedic products themselves, adding to competition.

Meanwhile, Patanjali has slashed ad spending. In 2016, it was third biggest Indian television advertiser, but by last year it did not make the top 10, according to Broadcast Audience Research Council India data.

Patanjali’s main advertising agency, Mumbai-based Vermmillion, declined to comment.

Abneesh Roy, a senior retail analyst at broker Edelweiss, said Patanjali would likely lose market share as a result.

(Graphic: Patanjali Ad Insertions link: https://tmsnrt.rs/2WVLADb)

FRAUGHT BROMANCE

Ramdev passionately backed Modi in the 2014 election. He tapped into his following as a TV celebrity, mobilizing voters and synchronizing messaging with Modi’s Hindi nationalist Bharatiya Janata Party (BJP).

Patanjali has benefited from more than an estimated $46 million in discounts for land acquisitions in BJP-controled states, Reuters revealed in May 2017.

More recently, however, Ramdev seemed to have cooled on Modi, a fellow yoga aficionado.

In its 2017-2018 financial statement Patanjali complained that demonetization “affected consumers’ spending habits,” while the sales tax hit “costing and pricings of inputs and products”.

Ramdev also told journalists earlier this year he had withdrawn himself politically. But he popped up on the campaign trail to support the BJP in the April-May election, saying Modi was “the pride of mother India”.

The mixed message has ruffled some in the BJP’s powerful fountainhead, the Rashtriya Swayamsevak Sangh (RSS). “Ramdev,” one senior RSS official said, “makes different kinds of statements that makes it difficult to put trust in him.”

Representatives for Modi, who cruised to re-election, did not respond to requests for comment.

APP FLOP

Devotees and detractors alike say Patanjali’s management style is a far cry from standard corporate culture.

Employees at Patanjali’s main food plant in Haridwar gather to chant “om” every morning. Senior managers must dress in white. Failure to follow wardrobe rules and late arrivals result in pay deductions, current and former employees said.

Patanjali, which said it employs around 25,000 people, last year advertised for salesmen across India. But one ex-employee said Patanjali had also chopped several hundred posts since mid-2017. The company did not respond to queries about staffing.

Patanjali has also announced plans to sell SIM cards, solar panels, bottled water, phones and jeans.

Balkrishna said the diversification was working.

“Solar is good. Our apparel division is going… We have big plans for bio-organic products,” he said.

In 2017, computer scientist Aditi Kamal pitched Ramdev the idea of an Indian-made messaging app.

“When I said ‘WhatsApp rival and all,’ he said: ‘This is great, why didn’t we think of this before?’” recounted Kamal.

Kamal said she was hired, and six months later was overseeing 100 employees.

But the 2018 launch of the app, called Kimbho, was marred by privacy flaws and Patanjali halted the venture.

“We have not dropped the project completely, but we have stopped,” said Balkrishna.

(Reporting by Rajendra Jadhav in Nagpur and Alexandra Ulmer in Haridwar, India; Additional reporting by Rupam Jain in New Delhi and Gopal Sharma in Kathmandu; Writing by Alexandra Ulmer; Editing by Martin Howell and Alex Richardson)

Source: OANN

Demonstrators protest to demand authorities scrap a proposed extradition bill with China, in Hong Kong
Protest placards and flowers are displayed during a demonstration to demand authorities scrap a proposed extradition bill with China, in Hong Kong, China June 11, 2019. REUTERS/Tyrone Siu

June 11, 2019

By James Pomfret and Greg Torode

HONG KONG (Reuters) – Hundreds braved thunderstorms in Hong Kong on Tuesday for a fresh wave of protests against a proposed extradition bill that would allow people to be sent to mainland China for trial, but the Chinese-ruled city’s leader said she would not back down.

Hong Kong Chief Executive Carrie Lam said she would push ahead with the bill despite deep concerns across vast swaths of the Asian financial hub that on Sunday triggered its biggest political demonstration since its handover from British to Chinese rule in 1997.

“When the fugitive extradition bill is passed, Hong Kong will become a ‘useless Hong Kong’,” said Jimmy Sham, convenor of Civil Human Rights Front, the main organizer of Sunday’s demonstration.

“We will be deep in a place where foreign investors are afraid to invest and tourists are afraid to go. Once the ‘Pearl of the Orient’ (it) will become nothing.”

In a rare move, prominent business leaders warned that pushing through the extradition law could undermine investor confidence in Hong Kong and erode its competitive advantages.

The bill, which has generated unusually broad opposition at home and abroad, is due for a second round of debate on Wednesday in the city’s 70-seat Legislative Council. The legislature is controlled by a pro-Beijing majority.

SECURITY BLANKET

Security was tight around the legislature building, with riot police deployed in some areas. Protesters stood under umbrellas in heavy rain, some singing “Hallelujah”, as police conducted random ID checks.

An online petition has called for 50,000 people to surround the legislature building overnight into Wednesday.

Scores of young passers-by had their bags searched by police and some were detained briefly in a nearby metro station. A police officer on the scene who declined to be named said they were searching for weapons to try to stave off any violence.

The Civil Human Rights Front strongly condemned the searches, saying authorities had made people afraid to participate in peaceful gatherings.

Strikes and transport go-slows were also announced for Wednesday as businesses, students, bus drivers, social workers, teachers, Christian groups and others all vowed to protest, in a last-ditch effort to block the bill.

Britain handed Hong Kong back to China under a “one-country, two-systems” formula, with guarantees that its autonomy and freedoms, including an independent justice system, would be protected.

But many accuse China of extensive meddling, denying democratic reforms, interfering with local elections and of being behind the disappearance of five Hong Kong-based booksellers, starting in 2015, who specialized in works critical of Chinese leaders.

Beijing denies those accusations and official Chinese media this week said “foreign forces’ were trying to hurt China by creating chaos over the extradition bill.

Sunday’s protest rally plunged Hong Kong into political crisis, just as months of pro-democracy “Occupy” demonstrations did in 2014, heaping pressure on Lam’s administration and her official backers in Beijing.

Nearly 2,000 mostly small retail shops, including restaurants, grocery, book and coffee shops, have announced plans to strike, according to an online survey, a rare move in the staunchly capitalist economy.

Eaton HK Hotel, which is owned by Langham Hospitality Investments and operated by Great Eagle Holdings, said it respected workers’ “political stances” and would allow them to rally.

Human rights groups have repeatedly cited the alleged use of torture, arbitrary detentions, forced confessions and problems accessing lawyers in China, where the courts are controlled by the Communist Party, as reasons why the Hong Kong bill should not proceed.

China denies accusations that it tramples on human rights.

(Reporting By James Pomfret, Greg Torode, Jessie Pang, Felix Tam, Kane Wu, Vimvam Tong, Thomas Peter, Twinnie Siu; Writing by Anne Marie Roantree; Editing by Gareth Jones)

Source: OANN

FILE PHOTO - A huge advertisement for a branch of fastfood giant McDonald's is seen on the outskirts of Berlin
FILE PHOTO – A huge advertisement for a branch of fastfood giant McDonald’s is seen on the outskirts of Berlin, Germany, April 22, 2016. REUTERS/Kai Pfaffenbach

June 11, 2019

ZURICH (Reuters) – Nestle could expand its plant-based burger sales partnership with fast food chain McDonald’s beyond Germany and is also looking for other partners, the Swiss food giant’s head said on Tuesday.

“McDonald’s is an exciting and big customer, but it is not the only option and we have quite good capacity to cope with a (possible) extension beyond Germany,” Marco Settembri, the Chief Executive of Nestle’s Europe, Middle East and North Africa business said.

The market for meat substitutes could soar to $140 billion over the next decade, according to Barclays, as many health- and climate-conscious consumers seek to reduce their meat consumption.

Nestle launched its plant-based Incredible Burger in April under the Garden Gourmet brand in several European countries. The same month, McDonald’s started selling the patties as “Big Vegan TS” in its 1,500 restaurants in Germany.

Early results of the launch in Germany were promising, Settembri said, and Nestle and McDonald’s were discussing next steps.

“For both (of us), if we do it, if we go ahead, we want to do it right. We have capacity of course, but we really need to plan it and we need to do it well,” he told a Deutsche Bank conference.

Nestle is also working with other operators to supply products to business customers but Settembri insisted that the company’s retail channel, a “historical strength”, was very important as well.

He said he didn’t see the meat alternatives as a threat to Nestle’s existing business as it doesn’t have many meat products and recently put its Herta meat and cold cuts unit on the block.

Switzerland-based Nestle has also announced plans to launch a plant-based burger in the U.S. later this year, where it will compete with products made by Beyond Meat and Impossible Foods.

In an interview with Reuters last week, the heads of Nestle’s Sweet Earth brand, Kelly and Brian Swette, said their Awesome Burger would be available from retailers and at restaurants in the U.S. in September or October.

They declined to comment on a possible launch with McDonald’s.

(Reporting by Silke Koltrowitz. Additional reporting by John Revill and Siddharth Cavale; Editing by Kirsten Donovan)

Source: OANN

Shoppers carry bags of purchased merchandise at the King of Prussia Mall, United States' largest retail shopping space, in King of Prussia
FILE PHOTO: Shoppers carry bags of purchased merchandise at the King of Prussia Mall, United States’ largest retail shopping space, in King of Prussia, Pennsylvania, U.S., December 8, 2018. REUTERS/Mark Makela

June 11, 2019

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. producer prices increased solidly for a second straight month in May, boosted by a surge in the cost of hotel accommodation and gains in a range of other services, pointing to a steady pickup in underlying inflation pressures.

The report from the Labor Department on Tuesday likely supports the Federal Reserve’s view that the recent weak inflation readings are probably transitory.

Fed policymakers are scheduled to meet on June 18-19 against the backdrop of rising trade tensions, slowing growth and a sharp step-down in hiring in May that have led financial markets to price in at least two interest rate cuts by the end of 2019.

Fed Chairman Jerome Powell said last week that the U.S. central bank was closely monitoring the implications of the trade tensions on the economy and would “act as appropriate to sustain the expansion.” A rate cut is, however, not expected next Wednesday.

Producer prices excluding food, energy and trade services rose 0.4% last month, matching April’s gain, the government said. The so-called core PPI increased 2.3% in the 12 months through May after rising 2.2% in April.

Weaker energy and food prices, however, partially offset the increase in services last month. That led the producer price index for final demand to edge up 0.1% in May after gaining 0.2% in April. In the 12 months through May, the PPI climbed 1.8%, slowing from April’s 2.2% advance.

Economists polled by Reuters had forecast the PPI would nudge up 0.1% in May and rise 2.0% on a year-on-year basis.

U.S. Treasury yields ticked up and the dollar rose to a session high against a basket of currencies after the release of the data. U.S. stock index futures were trading higher.

FOOD PRICES FALL

The services-led increase in the core PPI last month is likely to translate into a slightly higher reading for other underlying inflation measures in May. According to a Reuters survey of economists, core consumer prices probably increased 0.2% last month after nudging up 0.1% in April. The consumer price data will be published on Wednesday.

The Fed’s preferred inflation measure, the core personal consumption expenditures (PCE) price index, increased 1.6 percent in the year to April after gaining 1.5% in March. Data for May will be released later this month.

In May, wholesale energy prices fell 1.0% after rising 1.8% in the prior month. Goods prices slipped 0.2% last month after gaining 0.3% in April.

Wholesale food prices fell 0.3% in May. Core goods prices were unchanged for a second straight month. Prices for hotel accommodation surged 10.1% in May, the most since April 2009.

That accounted for nearly 80 percent of the rise in services prices in May. Services prices rose 0.3% after gaining 0.1% in April.

The cost of healthcare services increased 0.2% last month after increasing 0.3% in April. There were increases in the prices for both inpatient and outpatient care last month. Those healthcare costs feed into the core PCE price index.

There were also gains in prices for passenger transportation and portfolio management.

(Reporting by Lucia Mutikani; Editing by Paul Simao)

Source: OANN

Big Tech is under the Hot Seat… Will someone make these Monopolies do the right thing? Will those cast out be let back in?

Big Tech on a rare bipartisan hot seat
Big Tech and its practices will be under a bipartisan microscope as the House Judiciary Committee on Tuesday will launch its investigation into the market dominance of Silicon Valley’s biggest names. It will begin with a look at the impact of the tech giants’ platforms on news content, the media and the spread of See More misinformation online. The House Judiciary Committee’s investigation of tech market power stands out because it’s bipartisan and the first review by Congress of industry that dominated with generally little interference from federal regulators.

But with regulators at the Justice Department and Federal Trade Commission apparently pursuing antitrust investigations of Facebook, Google, Apple and Amazon, and several state attorneys general exploring bipartisan action of their own, the tech industry finds itself being increasingly accused of operating like monopolies. Rep. David Cicilline, D-RI, will lead Tuesday’s subcommittee hearing and vowed that the panel will broadly investigate the digital marketplace and “the dominance of large technology platforms,” with an eye toward legislative action to increase competition.

Investigators seek clues behind NYC helicopter crash
The helicopter pilot killed in Monday’s crash in New York Cityhas been identified as a former volunteer fire chief and a “dedicated, highly professional and extremely well trained firefighter,”as well as a skilled pilot. Tim McCormack died Monday after he made a “crash landing” on the roof of 787 Seventh Avenue in MidtownManhattan around 2 p.m. as rain and strong winds hammered the city, the Fire Department of New York (FDNY) said. Investigators believe he was conducting “executive travel” and was headed to the “home airport in Linden, N.J.” New York City Mayor Bill de Blasio later told reporters that there appeared to be no connection to terrorism.

The Federal Aviation Administration said the National Transportation Safety Board was in charge of the investigation and “will determine probable cause of the incident.” McCormack had been involved in a bird strike-related emergency landing for a helicopter in 2014.

DOJ casts wide net in probe of surveillance abuses in Russia investigation
As part of its ongoing “multifaceted” and “broad” review into potential misconduct by U.S. intelligence agencies during the 2016 presidential campaign, the Justice Department revealed Monday it is also investigating the activities of several “non-governmental organizations and individuals.” In addition, the DOJ announced that the probe, let by Connecticut U.S. Attorney John Durham, was looking into the involvement of “foreign intelligence services.”

The DOJ’s announcement came as House Judiciary Committee Chairman Jerrold Nadler announced Monday that he plans to hit pause on efforts to hold Attorney General William Barr in contempt, after reaching a deal with the Justice Department for access to evidence related to former Special Counsel Robert Mueller’s Russia report. Separately, John Dean, the former White House counsel to Richard Nixon, testified Monday that he sees “remarkable parallels” between Watergate and the findings of Special Counsel Robert Mueller’s report – at a dramatic Capitol Hill hearing that Republicans panned as a political “show.”

Kim Jong Un’s half-brother was CIA informant: Report
Kim Jong Un’s half-brother was working as a CIA informant before he was brazenly murdered in a Malaysian airport in 2017,according to a report Monday. Kim Jong Nam, the late North Korean dictator Kim Jong Il’s eldest son, “met on several occasions with agency operatives,” according to the Wall Street Journal. “There was a nexus” between Kim Jong Nam and the intelligence agency,according to the Journal’s source. Little else is known about what Kim Jong Un’s older brother told the feds; however, the report did state he “was almost certainly in contact with security services of other countries, particularly China’s.”

Ortiz back in Boston
Retired Red Sox player David Ortiz landed in Boston in an air ambulance Monday night after a targeted shooting at a bar in Santo Domingo forced doctors in his home nation of the Dominican Republic to remove his gallbladder and part of his intestine. Ortiz, 43, arrived in Boston around 10:30 p.m. after the Red Sox sent a plane to transport him to Massachusetts General Hospital.

TODAY’S MUST-READS
Dems halt effort to secure pay increase for lawmakers, as contempt votes, funding drama loom.
Justin Amash gone from House Freedom Caucus after saying Trump’s conduct was ‘impeachable.’
Jonathan Morris: My decision to leave the Catholic priesthood.

MINDING YOUR BUSINESS
Walmart vs. Amazon: Who is ahead in battle for retail dominance?
Makan Delrahim, Ajit Pai met Friday to discuss T-Mobile-Sprint deal as DOJ decision looms.
Why Americans should get into the housing market now.

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FILE PHOTO: The Goldman Sachs company logo is seen in the company's space on the floor of the NYSE in New York
FILE PHOTO: The Goldman Sachs company logo is seen in the company’s space on the floor of the New York Stock Exchange, (NYSE) in New York, U.S., April 17, 2018. REUTERS/Brendan McDermid/File Photo

June 11, 2019

LONDON (Reuters) – Saga, the British tourism and insurance firm for the over-50s, said on Tuesday it ways teaming up with Goldman Sachs on savings products, as part of a drive to revive its bottom line after a profit warning in April.

Saga said it was one of several initiatives aimed at returning the company to its “heritage of delivering high quality products and services to its customers”.

The company lowered its profit forecast in April, warning older Britons were cutting back on their travel plans because of uncertainty over Brexit. It was also facing margin pressure in its insurance business and cut its dividend, knocking its shares.

Marcus, Goldman’s retail banking foray, was launched in Britain in September 2018 and has attracted 250,000 customers, Saga said.

“We know that our customers hold a large proportion of their wealth in savings and want to know that they’re getting a great return with a brand they can trust,” said Saga Chief Executive Lance Batchelor in a statement.

(Reporting by Huw Jones; Editing by Mark Potter)

Source: OANN

FILE PHOTO: The Goldman Sachs company logo is seen in the company's space on the floor of the NYSE in New York
FILE PHOTO: The Goldman Sachs company logo is seen in the company’s space on the floor of the New York Stock Exchange, (NYSE) in New York, U.S., April 17, 2018. REUTERS/Brendan McDermid/File Photo

June 11, 2019

LONDON (Reuters) – Saga, the British tourism and insurance firm for the over-50s, said on Tuesday it ways teaming up with Goldman Sachs on savings products, as part of a drive to revive its bottom line after a profit warning in April.

Saga said it was one of several initiatives aimed at returning the company to its “heritage of delivering high quality products and services to its customers”.

The company lowered its profit forecast in April, warning older Britons were cutting back on their travel plans because of uncertainty over Brexit. It was also facing margin pressure in its insurance business and cut its dividend, knocking its shares.

Marcus, Goldman’s retail banking foray, was launched in Britain in September 2018 and has attracted 250,000 customers, Saga said.

“We know that our customers hold a large proportion of their wealth in savings and want to know that they’re getting a great return with a brand they can trust,” said Saga Chief Executive Lance Batchelor in a statement.

(Reporting by Huw Jones; Editing by Mark Potter)

Source: OANN

A member of staff from Alibaba Group introduces the company's newly released cut-price voice assistant speaker Tmall Genie during a press conference in Beijing
A member of staff from Alibaba Group introduces the company’s newly released cut-price voice assistant speaker Tmall Genie during a press conference in Beijing, China, July 5, 2017. REUTERS/Stringer

June 11, 2019

SHANGHAI (Reuters) – China’s Alibaba Group Holding Ltd on Tuesday said its voice-controlled assistant will feature in local vehicles from Audi AG, Renault SA and Honda Motor Co Ltd, as the tech giant expands in artificial intelligence.

The Tmall Genie Auto smart speaker will allow drivers to use voice commands to, for instance, place orders on Alibaba’s online retail platform and buy movie tickets, Alibaba said at the CES Asia 2019 technology trade show in Shanghai.

In the near future, the speaker will also allow drivers to monitor and control smart devices at houses equipped with a Tmall Genie-compatible device, Alibaba said in a joint statement with the three automakers, without specifying vehicle models.

“We are thrilled to partner with global, distinguished auto brands such as Audi, Renault and Honda,” said Miffy Chen, general manager at Alibaba AI Labs. “Together, we can greatly enhance our in-car services and make driving experiences more intelligent and interconnected.”

The Tmall Genie is akin to Amazon.com Inc’s Echo. Alibaba launched the device in 2017 and released an auto version in April last year. Other automakers that have said they will install the device in their vehicles include BMW and Volvo Cars.

Amazon also has a vehicle version of its Echo, dubbed the Echo Auto, which it announced in September.

(Reporting by Brenda Goh and Josh Horwitz; Editing by Christopher Cushing)

Source: OANN

Neil Woodford is seen in this undated handout picture
FILE PHOTO: Neil Woodford, founder and fund manager at Woodford Investment Management, is seen in this undated handout picture released on June 10, 2019. Jonathan Atkins/Handout via REUTERS

June 10, 2019

By Huw Jones, Simon Jessop and Carolyn Cohn

LONDON (Reuters) – British politicians and regulators piled pressure on Neil Woodford following the suspension of his flagship fund a week ago, while investors pulled money from his other products and a major backer distanced itself from the frozen fund.

Woodford Investment Management suspended its equity income fund on June 3, a rare move for a product aimed at retail equity investors, after a run of redemption requests.

Nicky Morgan, a senior British lawmaker, on Monday called for greater action from the regulator over the suspension, citing “a significant concern about its impact on investors, as well as the wider regulation and supervision of funds.”

Morgan’s comments came after Andrew Bailey, chief executive of Britain’s markets regulator, the Financial Conduct Authority, said the suspension raised “important questions” about how illiquid investments should be regulated.

Woodford, one of Britain’s best known fund managers, last week cut stakes in more than 20 companies to free up cash. His fall from grace featured prominently in British newspapers over the weekend.

Fund supermarket Hargreaves Lansdown, whose customers accounted for more than 30% of the fund at the end of last year, said it was “considering the Woodford Equity Income fund’s contribution carefully” in its multi-manager funds.

Morningstar data showed assets under management at the frozen fund, which still provides daily pricing data based on underlying market movements, fell 4% to 3.55 billion pounds ($4.50 billion) on June 6 from May 31.

Investors do not know when it will reopen, and the freezing of the assets has led to a war of words between regulators in Britain and offshore dependency Guernsey, where some of its assets are listed.

VOTING WITH THEIR FEET

With the main fund suspended, investors have voted with their feet in withdrawing from Woodford’s other two funds.

Woodford Patient Capital Trust’s shares fell around 20% last week after the equity income fund was suspended. WPCT sought to reassure investors on Monday, saying it was pleased with the progress of its portfolio companies.

Despite that, shares in the fund slid further and were down 5.7% by 1430 GMT, near their record low and the biggest faller on Britain’s FTSE mid-cap index.

The unlisted Woodford Income Focus fund fell 14% between May 31 and June 6 to 425.2 million pounds, according to Morningstar.

Morgan, chairman of the influential Treasury Committee which oversee all finance-related issues, asked the FCA to detail its supervisory contact with Woodford, whether it planned to investigate the suspension and how long the suspension should last for.

LEARNING LESSONS

The FCA was already looking at toughening up rules for funds and is due to announce final changes later this year.

“We will take into account the lessons of the Woodford fund when finalizing these rules,” Bailey said in the Financial Times.

Bailey said that investment platforms also have responsibilities when it comes to recommending “best buys”.

Hargreaves Lansdown picks out a number of funds it considers to be among the best value for its ‘Wealth 50’ list.

Many retail investors would likely have chosen to invest in Woodford’s fund in part because of the support of Hargreaves.

To try and stem the tide of bad publicity, Hargreaves Chief Executive Chris Hill apologized personally to clients in a statement on the firm’s website, but defended the “benefits” of favorite fund lists like the Wealth 50.

(Reporting by Huw Jones, Simon Jessop and Carolyn Cohn; Editing by Rachel Armstrong, Alexander Smith and Keith Weir)

Source: OANN

Men sleep in a supply truck loaded with sacks of cauliflower at a vegetable wholesale market in Mumbai
Men sleep in a supply truck loaded with sacks of cauliflower at a vegetable wholesale market in Mumbai, India, February 14, 2019. REUTERS/Francis Mascarenhas

June 10, 2019

By Tushar Goenka

BENGALURU (Reuters) – India’s retail inflation likely accelerated to a seven-month high in May on rising food prices, but it is expected to remain well below the Reserve Bank of India’s target, giving it room to ease policy further, a Reuters poll found.

The RBI changed its stance to “accommodative” from “neutral” last week and cut interest rates for the third time in a row, bringing the borrowing rate to a nine-year low of 5.75%.

According to a June 4-7 Reuters poll of over 40 economists, the retail inflation rate rose to 3.01 percent in May from a year earlier, up from 2.92 percent in April. Forecasts ranged between 2.83-3.50%.

If the consensus forecast is met, consumer prices will rise at their fastest pace since October, but would still be lower than the central bank’s medium-term target for a 4.0% increase for a tenth consecutive month.

Food prices have steadily risen since March after contracting from October 2018-February 2019. Food prices constitute nearly half of India’s inflation basket.

“The uptick in retail inflation is because of higher vegetable prices,” said Sameer Narang, chief economist at Bank of Baroda.

“Pre-monsoon rains have been delayed and are below normal. It has put sowing a bit behind (schedule) because of which productivity will be low, pushing prices higher.”

In a country where agriculture largely relies on rain instead of irrigation, a weak monsoon can lead to a sharp rise in food prices.

The RBI also highlighted that risk last week and raised its inflation forecasts for the first half of the current fiscal year.

But core inflation, which excludes volatile components like food and energy, has been on a downward trajectory since February, suggesting weakness in economic activity.

In the January-March quarter, India’s economic growth slowed more sharply than expected to 5.8% – lagging China’s pace for the first time in nearly two years – raising the prospect of fiscal stimulus and further policy easing.

“The weaker-than-expected GDP spooked the MPC, with all six members voting to cut. It’s now more than clear that the MPC under Governor Shaktikanta Das cares more about lifting economic growth than keeping strictly to the RBI’s fledging inflation targeting framework,” noted Miguel Chanco, senior Asia economist at Pantheon.

But Vishnu Varathan, an economist at Mizuho Bank, was not convinced interest rate cuts are the only solution when the risk to inflation is skewed to the upside.

    “I would be a lot more consoled if one more rate cut is accompanied by a lot of efforts to improve policy transmission rather than cutting and using the knife as the only tool,” he said.

(Polling by Anisha Sheth and Khushboo Mittal; Editing by Kim Coghill)

Source: OANN

Founder, Chairman, CEO and President of Amazon Jeff Bezos unveils his space company Blue Origin's space exploration lunar lander rocket called Blue Moon during an unveiling event in Washington
FILE PHOTO: Founder, Chairman, CEO and President of Amazon Jeff Bezos unveils his space company Blue Origin’s space exploration lunar lander rocket called Blue Moon during an unveiling event in Washington, U.S., May 9, 2019. REUTERS/Clodagh Kilcoyne

June 6, 2019

By Jeffrey Dastin

LAS VEGAS (Reuters) – Amazon.com Inc Chief Executive Jeff Bezos said on Thursday he expects there will be commercial robots in the next 10 years that can grasp items as reliably as humans, a development that could lead to the automation of warehouse jobs around the world.

The remark, made on stage at Amazon’s “re:MARS” conference in Las Vegas, underscored how companies and university researchers are rapidly developing technology to perform human tasks, whether for elder care in the home or for the picking and stowing of goods in retail warehouses.

“I think grasping is going to be a solved problem in the next 10 years,” he said. “It’s turned out to be an incredibly difficult problem, probably in part because we’re starting to solve it with machine vision, so (that means) machine vision did have to come first.”

Bezos did not discuss any Amazon deployments of the technology, which it has tested from the Boston-area startup Soft Robotics, for instance, a person familiar with the matter told Reuters previously https://www.reuters.com/article/us-amazon-com-automation-exclusive/exclusive-amazon-rolls-out-machines-that-pack-orders-and-replace-jobs-idUSKCN1SJ0X1.

The company has said it views automation as a way to help workers.

Still, Amazon is known for its drive to mechanize as many parts of its business as possible, whether pricing goods or transporting items in its warehouses. It employs hundreds of thousands of people, many of whose primary task is grasping, scanning and placing customer orders.

A variety of companies other than Amazon have also rolled out robotic hands for limited warehouse pilots.

In the on-stage interview, Bezos also discussed Project Kuiper, Amazon’s recent bet to launch thousands of satellites to expand broadband internet access, which he said was “close to being a fundamental human need.”

“It’s also very good business for Amazon because it’s (a) very high capex undertaking; it’s multiple billions of dollars of capex,” he said. “Amazon is a large enough company now that we need to do things that if they work can actually move the needle.”

Asked whether people ever say “no” to Bezos, the world’s richest person and a famously scrupulous boss, he joked, “No! Certainly not twice. No, seriously, I do get told ‘no’ all the time. I seek it out.”

“People who are right a lot, they listen a lot. They also change their mind a lot,” he said earlier in the interview. “They wake up, and they re-analyze things all the time.”

(Reporting By Jeffrey Dastin in Las Vegas; Editing by Meredith Mazzilli)

Source: OANN

A logo is pictured on a Credit Agricole bank branch in Paris
A logo is pictured on a Credit Agricole bank branch in Paris, France, May 16, 2018. REUTERS/Charles Platiau

June 6, 2019

By Inti Landauro and Matthieu Protard

PARIS (Reuters) – French bank Credit Agricole unveiled a new set of higher profit targets for 2022 after it had met its 2019 targets a year ahead of schedule, and said it now expected annual net profits above 5 billion euros ($5.6 billion) in 2022.

The profit target of 5 billion euros for 2022 compares to its net profit figure of 4.4 billion in 2018, with Credit Agricole hoping to win over clients for its retail banks in Italy and France and expects to attract mid-sized companies with corporate banking services such as cash management.

Nevertheless, while Credit Agricole sees its bottom line rising more than 3% per year, its profitability – as measured by return on tangible equity – will slow down in the period.

The bank’s return on tangible equity will fall to 11% in 2022 down from 12.7% in 2018.

“The economic scenario is based on persistent low interest rates,” Credit Agricole said in a statement.

Major European banks such as Credit Agricole have struggled to drive profitability because low interest rates have constrained returns from retail banking, while corporate and investment banking is vulnerable to financial market volatility.

While its French rivals BNP Paribas and Societe Generale have experienced wild swings from their corporate and investment banking units over the past few quarters, Credit Agricole has had more stable levels of profits.

As part of its efforts to boost profits and deliver steady profit increases, Credit Agricole expects to lower its common equity tier one ratio, a measure of the bank’s solvency, to 11% down from 11.5% at the end of 2018.

Credit Agricole’s parent bank, Groupe Credit Agricole, will instead raise its ratio in 2022 to 16% up from 15% in 2018.

The company will also invest 15 billion euros in new technology to keep pace with new banking habits such as mobile banking and real-time payment services.

(Reporting by Inti Landauro and Matthiew Protard; Editing by Leigh Thomas/Sudip Kar-Gupta)

Source: OANN

Workers milk cows using milking machines at Baladna farm in the city of Al-Khor
Workers milk cows using milking machines at Baladna farm in the city of Al-Khor, north of Doha, Qatar May 21, 2019. REUTERS/Naseem Zeitoon

June 5, 2019

By Eric Knecht

DOHA (Reuters) – Two years after flying in thousands of dairy cows to beat a trade embargo, Qatari milk producer Baladna has made its first exports.

Qatar is the world’s top liquefied natural gas exporter but a net importer of nearly everything else. The small but wealthy country has been under a trade and transport boycott by Saudi Arabia and its allies since June 2017 that has forced it to retool an economy once heavily reliant on fellow Gulf states.

Saudi Arabia, the United Arab Emirates, Bahrain and Egypt accuse Qatar of supporting Islamist terrorist groups. Doha denies this and says the boycott, which closed its only land border and disrupted shipping routes, is an attempt to infringe on its sovereignty.

Baladna received its first cows a month after the boycott and set up a huge diary farm. It says it now supplies more than half of Qatar’s fresh milk and is exporting to Afghanistan, Yemen and Oman, and soon to Libya.

Soon after the boycott was imposed, Doha developed new trade routes to replace its former Gulf partners. In late 2017 it opened a $7.4 billion port designed to become a regional transport hub.

Government officials say Baladna’s rapid expansion shows the embargo has made Qatar’s economy stronger. Their goal is to encourage local producers.

In April, Baladna rolled out a line of fruit juices. In Qatar’s supermarkets, brands like Mazzraty, which opened the country’s largest poultry plant in January, sit beside “Qatar Farms” displays of local fruit and vegetables.

Vegetable output is up about 20% since mid-2017 to around 66,000 tonnes per year and is expected to increase by 20,000-40,000 tonnes next year as new farms come online, said Sheikh Faleh Bin Naser Al Thani, an agriculture official at the Ministry of Municipality and Environment.

Qatar is now self-sufficient in dairy and fresh poultry. Before 2017 it produced only about 20% and 10% percent of its needs in those sectors, respectively.

“Qatar after June 5, 2017 is not like Qatar before,” said Baladna communications director Saba al-Fadala, referring to the start of the boycott. “We now don’t want or need anyone.”

Schoolchildren tour the milking parlors of Baladna’s farm, where 20,000 cows live in vast air-conditioned sheds. The visitors learn how flying in cows restored milk supplies that had been trucked in before Saudi Arabia closed the border.

TAKING A HIT

But other sectors of Qatar’s economy have suffered, with real estate and retail taking a hit. Shopping malls and hotels once filled with Saudi and UAE tourists at times appear nearly abandoned. Property prices fell sharply amid a supply glut in the run-up to Qatar hosting the World Cup 2022.

In March, Qatar Airways reported its second straight annual loss. Barred from the airspace of countries imposing the boycott, the state-owned carrier has had to re-route many flights, increasing their duration and cost.

At the same time, the boycott has forced Qatar to mount a public relations drive in the United States and Europe to counter claims by rivals that it finances terrorism.

It has also adopted a lower profile in the region after losing many of the bets it placed during the 2011 Arab Spring in Syria, Libya, and Egypt, where Qatar backed Islamist groups such as the Muslim Brotherhood.

But with a national population of just over 320,000 and a $320 billion sovereign fund, Qatar is well-placed to weather the embargo, diplomats and analysts say.

“If you are going to be subject to a blockade, then you better have a lot of money,” one banker told Reuters.

In the early months of the crisis, Qatar liquidated nearly $3 billion in U.S. treasury investments and drew down over $40 billion in foreign reserves to support its currency and banks.

The economy has since stabilized, growing 2.2% year-on-year in the third quarter of 2018. Qatar’s banks have been replenished by foreign deposits replacing much of the Saudi and Emirati money that left, and its stock market was the top performer in the Middle East last year.

Qatar’s goal of greater food self sufficiency has required launching agriculture on a commercial scale in one of the world’s harshest desert climates.

Nasser al-Khalaf, the managing director of Agrico, a produce grower and greenhouse manufacturer, says his business has boomed since he designed a system to keep fruit and vegetables cool enough to grow year-round.

In a polycarbon greenhouse, rows of ripening hydroponic tomatoes are cooled below 28 degrees Celsius as the temperature outside tops 40. Khalaf said the system allowed him to more than triple fruit and vegetable production to over 15 tonnes per day

Khalaf said his greenhouses are attracting investors looking at farming for the first time, drawn partly by increased subsidies for power, fertilizer and seeds since 2018.

“We never before saw businessmen investing in farms. They liked to invest in buildings and industry, anything but farms,” said Sheikh Faleh, the Qatari official.

Rabban Agriculture is one of the new entrants.

Owner Al Rabban Holding – with investments in property, transport and bottled water – is tapping initiatives like a 1 million riyal ($275,000) collateral-free loan from Qatar’s Development Bank to build a greenhouse farm, said deputy chairman Khalifa al-Rabban.

REFORMS AND OUTREACH

Qatari officials and diplomats said there was no sign of a let-up in the Gulf dispute, which has bolstered domestic support for 38-year-old ruler Emir Tamim bin Hamad Al Thani.

This has allowed him to accelerate reforms requested by Western allies that would have previously have faced local opposition, such as wider labor rights and a liberalized investment code for foreign ownership.

The reforms are intended to position Qatar as “like-minded with the Euro-U.S. community”, said a Western diplomat.

Doha pledged nearly $2 billion to expand Al-Udeid, the largest U.S. air base in the region. Qatar Petroleum aims to invest $20 billion in the United States, while the Qatar Investment Authority wants to expand its U.S. portfolio to $45 billion from $30 billion. 

Nader Kabbani, director of research at Brookings Doha, said Qatar’s tone had changed from initially wanting to resolve the dispute to asserting it can go it alone.

Qatar can do that, said a Western diplomat, thanks to its gas wealth, World Cup exposure and international outreach efforts.

(Editing by Ghaida Ghantous and Giles Elgood)

Source: OANN

Workers milk cows using milking machines at Baladna farm in the city of Al-Khor
Workers milk cows using milking machines at Baladna farm in the city of Al-Khor, north of Doha, Qatar May 21, 2019. REUTERS/Naseem Zeitoon

June 5, 2019

By Eric Knecht

DOHA (Reuters) – Two years after flying in thousands of dairy cows to beat a trade embargo, Qatari milk producer Baladna has made its first exports.

Qatar is the world’s top liquefied natural gas exporter but a net importer of nearly everything else. The small but wealthy country has been under a trade and transport boycott by Saudi Arabia and its allies since June 2017 that has forced it to retool an economy once heavily reliant on fellow Gulf states.

Saudi Arabia, the United Arab Emirates, Bahrain and Egypt accuse Qatar of supporting Islamist terrorist groups. Doha denies this and says the boycott, which closed its only land border and disrupted shipping routes, is an attempt to infringe on its sovereignty.

Baladna received its first cows a month after the boycott and set up a huge diary farm. It says it now supplies more than half of Qatar’s fresh milk and is exporting to Afghanistan, Yemen and Oman, and soon to Libya.

Soon after the boycott was imposed, Doha developed new trade routes to replace its former Gulf partners. In late 2017 it opened a $7.4 billion port designed to become a regional transport hub.

Government officials say Baladna’s rapid expansion shows the embargo has made Qatar’s economy stronger. Their goal is to encourage local producers.

In April, Baladna rolled out a line of fruit juices. In Qatar’s supermarkets, brands like Mazzraty, which opened the country’s largest poultry plant in January, sit beside “Qatar Farms” displays of local fruit and vegetables.

Vegetable output is up about 20% since mid-2017 to around 66,000 tonnes per year and is expected to increase by 20,000-40,000 tonnes next year as new farms come online, said Sheikh Faleh Bin Naser Al Thani, an agriculture official at the Ministry of Municipality and Environment.

Qatar is now self-sufficient in dairy and fresh poultry. Before 2017 it produced only about 20% and 10% percent of its needs in those sectors, respectively.

“Qatar after June 5, 2017 is not like Qatar before,” said Baladna communications director Saba al-Fadala, referring to the start of the boycott. “We now don’t want or need anyone.”

Schoolchildren tour the milking parlors of Baladna’s farm, where 20,000 cows live in vast air-conditioned sheds. The visitors learn how flying in cows restored milk supplies that had been trucked in before Saudi Arabia closed the border.

TAKING A HIT

But other sectors of Qatar’s economy have suffered, with real estate and retail taking a hit. Shopping malls and hotels once filled with Saudi and UAE tourists at times appear nearly abandoned. Property prices fell sharply amid a supply glut in the run-up to Qatar hosting the World Cup 2022.

In March, Qatar Airways reported its second straight annual loss. Barred from the airspace of countries imposing the boycott, the state-owned carrier has had to re-route many flights, increasing their duration and cost.

At the same time, the boycott has forced Qatar to mount a public relations drive in the United States and Europe to counter claims by rivals that it finances terrorism.

It has also adopted a lower profile in the region after losing many of the bets it placed during the 2011 Arab Spring in Syria, Libya, and Egypt, where Qatar backed Islamist groups such as the Muslim Brotherhood.

But with a national population of just over 320,000 and a $320 billion sovereign fund, Qatar is well-placed to weather the embargo, diplomats and analysts say.

“If you are going to be subject to a blockade, then you better have a lot of money,” one banker told Reuters.

In the early months of the crisis, Qatar liquidated nearly $3 billion in U.S. treasury investments and drew down over $40 billion in foreign reserves to support its currency and banks.

The economy has since stabilized, growing 2.2% year-on-year in the third quarter of 2018. Qatar’s banks have been replenished by foreign deposits replacing much of the Saudi and Emirati money that left, and its stock market was the top performer in the Middle East last year.

Qatar’s goal of greater food self sufficiency has required launching agriculture on a commercial scale in one of the world’s harshest desert climates.

Nasser al-Khalaf, the managing director of Agrico, a produce grower and greenhouse manufacturer, says his business has boomed since he designed a system to keep fruit and vegetables cool enough to grow year-round.

In a polycarbon greenhouse, rows of ripening hydroponic tomatoes are cooled below 28 degrees Celsius as the temperature outside tops 40. Khalaf said the system allowed him to more than triple fruit and vegetable production to over 15 tonnes per day

Khalaf said his greenhouses are attracting investors looking at farming for the first time, drawn partly by increased subsidies for power, fertilizer and seeds since 2018.

“We never before saw businessmen investing in farms. They liked to invest in buildings and industry, anything but farms,” said Sheikh Faleh, the Qatari official.

Rabban Agriculture is one of the new entrants.

Owner Al Rabban Holding – with investments in property, transport and bottled water – is tapping initiatives like a 1 million riyal ($275,000) collateral-free loan from Qatar’s Development Bank to build a greenhouse farm, said deputy chairman Khalifa al-Rabban.

REFORMS AND OUTREACH

Qatari officials and diplomats said there was no sign of a let-up in the Gulf dispute, which has bolstered domestic support for 38-year-old ruler Emir Tamim bin Hamad Al Thani.

This has allowed him to accelerate reforms requested by Western allies that would have previously have faced local opposition, such as wider labor rights and a liberalized investment code for foreign ownership.

The reforms are intended to position Qatar as “like-minded with the Euro-U.S. community”, said a Western diplomat.

Doha pledged nearly $2 billion to expand Al-Udeid, the largest U.S. air base in the region. Qatar Petroleum aims to invest $20 billion in the United States, while the Qatar Investment Authority wants to expand its U.S. portfolio to $45 billion from $30 billion. 

Nader Kabbani, director of research at Brookings Doha, said Qatar’s tone had changed from initially wanting to resolve the dispute to asserting it can go it alone.

Qatar can do that, said a Western diplomat, thanks to its gas wealth, World Cup exposure and international outreach efforts.

(Editing by Ghaida Ghantous and Giles Elgood)

Source: OANN

The GameStop store sign is seen at its shop in Westminster
FILE PHOTO: The GameStop store sign is seen at its shop in Westminster, Colorado January 14, 2014. REUTERS/Rick Wilking

June 4, 2019

(Reuters) – GameStop Corp on Tuesday halted its quarterly dividend after reporting a 13.3% fall in first-quarter revenue that missed analysts’ estimates, hurt by slowing sales of video games and consoles at its stores.

Shares of the company fell 10% to $7.04 in extended trading.

The stoppage of dividend will save about $157 million per annum, besides helping in cutting its nearly $500 million debt burden.

“The stock is down because they eliminated the dividend. It was a 20% yield, so I’m surprised the stock isn’t down more,” Wedbush Securities analyst Michael Pachter said.

The gaming retailer has been struggling with shrinking profits as consumers shift to downloadable videogames instead of buying physical versions from stores.

GameStop also faces a major threat from the rising advent of game streaming, with technology giants like Alphabet Inc’s Google, Microsoft and others getting into the still nascent space.

New hardware sales plunged 35%, with an increase in Nintendo Switch sales more than offset by a decline in Microsoft Corp’s Xbox One and Sony Corp’s PlayStation 4 console sales, GameStop said.

The company forecast comparable sales for the full-year to fall between 5% and 10%, while analysts were expecting a 4.9% drop in same-store sales.

GameStop, which saw several changes in management since Chief Executive Officer J. Paul Raines passed away last March, has been cutting costs to remodel itself in the face of a changing retail landscape.

Two months ago, the company named retail industry veteran George Sherman as chief executive officer, its fifth CEO in just over a year, and it named James Bell as its chief financial officer last week.

“I have been undertaking a thorough review of the business and working closely with the team to improve our operational and financial performance, address the challenges that have impacted our results and execute both deliberately and with urgency,” Sherman said in a statement.

Sales of pre-owned products fell 20.3% to $395.3 million in the first quarter, while sales from its collectibles business rose 10.5% to $157.3 million.

GameStop’s net income fell to $6.8 million, or 7 cents per share, in the quarter ended May 4, from $28.2 million, or 28 cents per share, a year earlier.

Net sales declined to $1.55 billion from $1.79 billion.

Analysts on average had expected a loss of 3 cents per share on revenue of $1.64 billion, according to IBES data from Refinitiv.

(Reporting by Supantha Mukherjee and Arjun Panchadar in Bengaluru; Editing by James Emmanuel)

Source: OANN

Vishal Gondal, CEO and founder of GOQii poses for a picture inside his office premises in Mumbai
Vishal Gondal, CEO and founder of GOQii poses for a picture inside his office premises in Mumbai, India, June 3, 2019. REUTERS/Francis Mascarenhas

June 4, 2019

By Aditya Kalra

NEW DELHI (Reuters) – An Indian startup’s legal challenge against a Walmart unit claiming losses caused by sharp discounting of its products is winning support from other online sellers, in what is shaping as a key test of how the giant retailer operates in the country.

The legal tussle between GOQii, a seller of smartwatch-type health devices, and Walmart’s Flipkart unit, comes just months after India imposed stricter rules for foreign investment in e-commerce that were aimed at deterring such sharp discounts.

GOQii sued Flipkart last month in a Mumbai court, alleging its devices were discounted by around 70% to the retail price, much more than the two sides had agreed to, legal documents related to the case showed.

The case will next be heard on Friday. Flipkart has denied any wrongdoing, saying it was not responsible for any discounts which are only determined by third-party companies which sell on the e-commerce website.

The legal spat has brought to the fore concerns long raised by small traders and a right-wing group close to Prime Minister Narendra Modi’s ruling party. They say companies such as Flipkart and Amazon.com deeply discount some products by burning billions of dollars to lure customers onto their sites in the expectation that they will also buy other goods.

“It will set a precedent if the final decision goes against Flipkart for predatory pricing,” said Salman Waris, a partner at TechLegis Advocates & Solicitors.

“Small traders’ associations and other startups may take other marketplaces adopting deep discounting strategy to court.”

The GOQii case could snowball. The All India Online Vendors Association told Reuters in a statement it plans to file a plea to join GOQii’s case against Flipkart on behalf of 3,500 online sellers it represents.

Flipkart said in a statement it takes legal compliance seriously and was compliant with Indian law. “We are engaged with the supplier to come to a swift resolution,” it said.

With a 19 percent market share, GOQii was the second-biggest player in India’s so-called wearables market last year, data from industry tracker IDC in December showed. The market is dominated by China’s Xiaomi, with Samsung a small player.

GOQII VS FLIPKART

GOQii’s dispute with Flipkart centers around two of its wearables devices that allow users to track exercise measurements, such as the number of steps walked, or heart rates.

GOQii’s Chief Executive Vishal Gondal told Reuters the firm signed an agreement in September with a Flipkart unit, allowing it to sell the two GOQii devices at a price not below 1,999 rupees and 1,499 rupees, after discounts.

But GOQii last month found Flipkart’s website showed the devices on sale for 999 rupees and 699 rupees. The company wrote to Flipkart, saying it was giving “unauthorized” discounts and resorting to “predatory pricing”, violating the agreement, its legal notice showed.

Flipkart was just a business-to-business wholesale venture which sells good to re-sellers, its law firm, Shardul Amarchand Mangaldas, said in its response that was seen by Reuters.

That’s central to how Flipkart operates – as India prohibits foreign e-commerce firms from stocking and selling their own inventory on its websites, their wholesale units purchase goods in bulk and sell them to re-sellers. Those re-sellers use Flipkart’s own website to sell some of those goods to customers.

Flipkart does not control or influence prices which were determined by such re-sellers, the law firm said, adding that it reserves “the right to institute actions for defamation, both civil and criminal”.

GOQii’s Gondal, however, said he was in possession of WhatsApp messages and e-mails from Flipkart’s employees that show the company was aware and involved in discounting products on its website. He declined to share those with Reuters, citing the ongoing court case.

Gondal said about 500,000 device orders were canceled after GOQii’s other customers accused the startup of cheating them when they saw cheaper prices on Flipkart. The company was also assessing monetary damages it plans to seek from court.

“It’s a matter of survival. It’s not easy to take on a multi-billion-dollar company,” Gondal said.

In interim relief, the court has ordered the sellers, who are also party to the case, to remove the wearable devices from the Flipkart platform.

WALMART’S STRUGGLES

India’s new foreign investment rules introduced in February were troubling for Flipkart and Amazon as they barred companies from selling products via firms in which they have an equity interest and stopped them from pushing their sellers to sell exclusively on their websites.

The policy was aimed at deterring deep discounts and helping small traders, but it shocked Walmart as it had just months ago closed its biggest deal by investing $16 billion in Flipkart.

Swadeshi Jagran Manch (SJM), the economic wing of the Rashtriya Swayamsevak Sangh, the ideological parent of Modi’s ruling party, said on Tuesday the government must investigate online discounts.

“We are standing behind any small trader, businesses who suffer online,” said Ashwani Mahajan, SJM’s co-convenor, adding it would discuss GOQii’s legal case against Flipkart with government officials.

(Reporting by Aditya Kalra in New Delhi; Editing by Martin Howell and Muralikumar Anantharaman)

Source: OANN

A CVS Pharmacy store is seen in the Manhattan borough of New York City
FILE PHOTO: A CVS Pharmacy store is seen in the Manhattan borough of New York City, New York, U.S., November 30, 2017. REUTERS/Shannon Stapleton

June 4, 2019

By Caroline Humer

NEW YORK (Reuters) – CVS Health Corp said it will offer expanded health services such as nutrition counseling and blood pressure screenings in 1,500 stores by the end of 2021, following through on plans announced during the pharmacy chain’s 2018 acquisition of health insurer Aetna.

It plans to convert a total of 50 stores this year in Houston, Atlanta, Philadelphia, and Tampa, representing about 15% of the stores in each of the markets, the company said ahead of a meeting on Tuesday with Wall Street analysts and investors in New York. The bulk of the expansion will be split between 2020 and 2021.

CVS first launched a handful of these stores with expanded health services it is calling health hubs in Houston earlier this year. The new format includes an employee with the title of “care concierge” who will direct customers to health services such as a nutritionist or nurse practitioner. It also will offer screenings for sleep apnea and opthalmology issues related to diabetes, among other services.

These CVS stores have experienced increases in foot traffic, front-of-store sales and MinuteClinic visits per day, as well as prescriptions dispensed, CVS pharmacy executive Kevin Hourican said in a phone interview. He declined to provide specific figures. MinuteClinics are walk-in health clinics located in CVS pharmacies.

When CVS bought Aetna for $69 billion, it said the companies would work to bring more health services into its stores beyond the MinuteClinic offerings to tackle chronic conditions like obesity, high blood pressure and diabetes.

Separately, CVS this week is in federal court in Washington D.C., where a judge is reviewing the Aetna deal. The U.S. Department of Justice and the companies agreed on an anti-trust settlement that included the sale of Medicare prescription drug plans to WellCare Health Plans Inc, but the court has not yet signed off on it.

In addition to its retail stores with pharmacies, CVS is one of the nation’s largest pharmacy benefit managers.

(Reporting by Caroline Humer; Editing by Bill Berkrot)

Source: OANN

Illustration photo of a U.S. Dollar note
FILE PHOTO: A U.S. Dollar note is seen in this June 22, 2017 illustration photo. REUTERS/Thomas White/Illustration

June 4, 2019

By Shinichi Saoshiro

TOKYO (Reuters) – The dollar struggled to shake off a harsh overnight session, slipping to a five-month low against the yen on Tuesday, hurt by a sharp slide in U.S. Treasury yields thanks to rising bets for a near-term rate cut by the Federal Reserve.

The benchmark 10-year Treasury yield fell to its lowest level since September 2017 overnight, coming within reach of the 2% threshold after St. Louis Federal Reserve President James Bullard said a rate cut “may be warranted soon” given the rising risk to economic growth posed by global trade tensions as well as weak U.S. inflation.

Treasury yields had already been on a steep decline as investors have been piling into safe-haven government bonds in the face of escalating trade tensions between Washington and its trade partners.

The dollar traded a touch lower at 108.010 yen after brushing 107.860, its lowest since Jan. 10.

The dollar index against a basket of six major currencies was steady at 97.182 after shedding 0.6% the previous day.

“The dollar is even falling against currencies such as the euro. Participants have found an incentive to finally cover euro shorts on the sharp fall in U.S. yields,” said Yukio Ishizuki, senior currency strategist at Daiwa Securities.

“The dollar has been a safe-haven during the current ‘risk off’ phase, but it’s strength is waning as the unexpected pace of the drop in U.S. yields has become too much to ignore.”

The euro nudged up 0.1% to $1.1250 after rallying roughly 0.7% overnight to $1.1262, its highest since May 13.

The single currency has drawn support from a weaker dollar but analysts remain cautious on its longer term prospects.

“Considering the euro zone’s close ties with the Chinese economy, the euro is one of the currencies that stands to be most affected by a Chinese economic downturn – a risk associated with the escalating U.S.-China trade war,” said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo.

The Australian dollar was flat $0.6975 after climbing to a three-week peak of $0.6983 the previous day in the wake of the broadly weaker greenback. The Aussie showed little reaction to weaker-than-expected domestic retail sales data for April.

Immediate focus was on the Reserve Bank of Australia’s (RBA) policy decision at 0430 GMT, when it is widely expected to cut its cash rate to an all-time low of 1.25%.

With a policy easing largely priced in, traders are keenly waiting on the RBA’s statement for any hint of further rate cuts.

Financial markets are fully pricing in a second cut by the RBA in September and see a 50-50 chance for a third move by Christmas. [AUD/]

The pound was flat at $1.2667, having crawled off a five-month trough of $1.2560 set on Friday thanks to the dollar’s underperformance.

Sterling had sunk to the five-month low, weighed by the prospect of Britain choosing a eurosceptic prime minister who could take a hard line on Brexit.

(Editing by Shri Navaratnam)

Source: OANN

The Citgo Petroleum Corporation headquarters are pictured in Houston
FILE PHOTO: The Citgo Petroleum Corporation headquarters are pictured in Houston, Texas, U.S., February 19, 2019. REUTERS/Loren Elliott

June 3, 2019

(Reuters) – The U.S. Department of Justice is seeking documents from Citgo Petroleum Corp as part of an investigation into bribery by U.S. suppliers involving its Venezuelan parent, state-owned Petroleos de Venezuela.

Citgo confirmed the receipt of a subpoena and said in a statement on Monday it agreed to cooperate with the U.S. probe.

The Houston-based oil refiner appointed a new board of directors earlier this year and cut ties with PDVSA following U.S. sanctions designed to stop the flow of U.S. dollars to Venezuela and ratchet up pressure to force socialist President Nicolas Maduro from power.

“Earlier this year, under the direction of its newly appointed Board, Citgo engaged outside counsel to conduct an independent investigation, and is committed to taking all appropriate remedial actions in response to the findings,” the company’s statement said. A spokeswoman declined further comment.

The Justice Department’s probe into bribery at PDVSA has resulted in charges against 21 people, 16 of whom have pleaded guilty as of this month. Maduro’s government has described the U.S. investigations as politically motivated.

The disclosure of a Citgo subpoena, which was earlier reported by Bloomberg, followed a guilty plea by Miami business owner Jose Manuel Gonzalez Testino over bribes paid to PDVSA and Citgo to obtain energy and logistics contracts.

Gonzalez admitted he and co-conspirators between late 2012 and mid-2013 paid at least four Citgo officials and provided gifts to a senior Citgo executive in return for help winning contracts, the Justice Department said last week. He was charged with paying at least $629,000 to a PDVSA procurement official.

Citgo’s outside lawyers have been reviewing procurement activity during the period that Gonzalez admitted to running the scheme, the company told employees last week.

“These charges are quite troubling,” Citgo Chairwoman Luisa Palacios and Executive Vice President Rick Esser wrote to employees. “Citgo takes seriously all allegations of unlawful or improper activity.”

Citgo, which earned $851 million on more than $23 billion in 2018 revenues, operates three U.S. refineries that supply about 4 percent of U.S. fuels. It employs about 3,400 workers and supplies a retail network that spans about 30 states.

(This story has been refiled to remove word fragment at end of third paragraph).

(Reporting by Gary McWilliams; Editing by Peter Cooney)

Source: OANN

FILE PHOTO: Fresh vanilla pods are seen at a plantation in Ambavala, near Andapa
FILE PHOTO: Fresh vanilla pods are seen at a plantation in Ambavala, near Andapa, Sava region, Madagascar July 14, 2018. REUTERS/Clarel Faniry Rasoanaivo/File Photo

June 3, 2019

By Richa Naidu

CHICAGO/ANTANANARIVO, Madagascar (Reuters) – A kilo of vanilla beans costs more than a kilo of silver.

Cultivated painstakingly over years from an orchid plant, vanilla is the second most expensive spice in the world, after saffron.

In less than five years, the wholesale price has risen nearly 500 percent, partly because of growing global demand for healthy, natural ingredients. But supply is an issue too: Cyclones, drought and crop-theft have hit Madagascar in recent years, slashing into the tender crop’s quality and quantity. The African island nation produces about 80 percent of the world’s vanilla.

For McCormick & Co, the world’s largest spice company, the scarcity of vanilla has become too big a risk to ignore, spurring it to begin cultivating an alternative source on the north coast of Papua, Indonesia. McCormick, which sells vanilla and its extract to retailers, restaurants and packaged food makers, said it has been passing the higher costs on to buyers.

The price of black whole-bean Madagascar vanilla, the benchmark product, costs $520 per kilo. While this isn’t quite the spice’s record-high of $635 per kilo – reached after a ruinous cyclone in 2017 – it is still nearly six times the price of $87.50 per kilo in early 2015.

Back-to-back typhoons in 2017 and 2018 “definitely put input pressure on costs,” Nestle SA U.S. CEO Steve Presley recently told Reuters.

The world’s No.1 food company raised prices for U.S. ice cream products in 2017, partly due to mounting vanilla prices, he said. The Swiss food giant makes Haagen-Dazs, Edy’s and Skinny Cow ice creams, which tout natural vanilla flavoring or beans on their labels.

General Mills, which sells Haagen-Dazs outside the United States and in the brand’s international ice cream parlors, said higher vanilla costs were forcing prices upward.

Now, Donald Pratt, managing director of McCormick’s global procurement arm, said the company is looking to Indonesia as a possible solution to the industry’s supply problem.

But pulling this off may be an uphill task.

Indonesia produces only about 100 tonnes of whole vanilla beans a year, a far cry from Madagascar’s output of about 2000 tonnes, Pratt said. And some others who have tried to cultivate a secondary source for vanilla have not been successful – Unilever’s Ben & Jerry’s, for instance, “invested heavily” in a similar project that backfired in Uganda.

‘THE DARK SIDE OF VANILLA’

Vanilla – sometimes called green gold – is so coveted thieves will kill for it.

“This is the dark side of vanilla. You don’t realize because it’s such a sweet thing,” said Cheryl Pinto of Ben & Jerry’s, which uses vanilla in most of its ice creams, as well as in other items such as cookie-dough chunks. Pinto said she is in charge of managing the company’s supply chain with a “social mission” in mind.

To protect their crop in Uganda, “farmers were sleeping in these fields and there were murders and beatings,” she said. “It was awful.”

This month, when setting harvest dates, the Ugandan government called out “cases of theft and loss of lives” spurred by higher prices. The violence goes both ways: Last year, Reuters reported Malagasy growers defending their fields by beating apprehended suspects to death.

Vanilla is valuable largely because it is laborious to grow.

For a graphic on vanilla cultivation and cost, see https://tmsnrt.rs/2WzjXmM

New vanilla vines take three to four years to produce orchids and can only be pollinated – by hand – a few days each year during a pre-dawn, four-hour window. From bloom to sale, the average production cycle is 16-18 months, and 600 hand-pollinated flowers yield only about 1 kilo of dried beans.

The vines can flourish only if intertwined with small trees that provide support and shade. And they must be grown close to the equator.

Bourbon vanilla, which McCormick sells, is by far the most popular variety in the world. Though it has historically been cultivated in Mexico, it mostly has been produced in Madagascar for the past century because many farmers elsewhere found it such a time-consuming, delicate crop, not worth the uncertainty and price fluctuations. Pratt said he doesn’t yet know how much Indonesia would have to produce to calm market prices. Tam Hun Man Tombo, a vanilla exporter in Madagascar, is skeptical farmers elsewhere are up to the task.

“I’ve been in the vanilla business for more than 30 years, and every time I hear the same refrain: Buyers are looking for other origins, buyers will be working with farmers in other countries,” he said. “It is a threat to which we are accustomed. But we do not fear that too much. Indonesia cannot produce vanilla as good as Madagascar.”To boost production quickly, McCormick is scaling up training programs in Papuan farming communities. To produce beans of Madagascar’s quality – to which consumers are accustomed – McCormick has been changing some practices related to soil and water management.

McCormick is in discussions with CARE, a non-governmental organization that helped re-establish the market in Madagascar after the 2017 cyclone destroyed about 30 percent of the island’s vanilla crops. The agency has founded cooperatives in Indonesia as well as Madagascar that provide training for growers – often women – on crop production and management, as well as aspects of financial literacy. CARE has suggested other geographic alternatives, as well, including Uganda and Tanzania, said Elly Kaganzi, deputy director of CARE’s agriculture & market systems.

Pinto told Reuters Ben & Jerry’s efforts in Uganda foundered, however, because eastern buyers – mainly from China – swooped in and “showed up to the village with a boatload of cash” ahead of the government-sanctioned harvest date.

“We have not been able to get any vanilla out of Uganda,” Pinto said.

Ben & Jerry’s says it hasn’t raised prices due to vanilla costs, choosing to absorb them and stay competitive. But retail prices for other companies’ vanilla-containing products, from coffee sweetners to yogurt to extract, continue marching upward.

As of May 30, a 2-fluid ounce bottle of McCormick’s Vanilla Extract from Walmart.com cost $8.12, up from $5.94 in May 2015, according to the retail consulting firm GlobalData.

“Vanilla has always been a store-cupboard staple, a common product,” said Neil Saunders, who heads the firm. “Consumers might be surprised at the high cost, but what can they do if everyone from Amazon to Walmart is raising prices?”

(Reporting by Richa Naidu in Chicago and Lovasoa Rabary in Antananarivo; Editing by Vanessa O’Connell and Julie Marquis)

Source: OANN

FILE PHOTO: The logo of Amazon is seen at the company logistics centre in Boves
FILE PHOTO: The logo of Amazon is seen at the company logistics centre in Boves, France, January 19, 2019. REUTERS/Pascal Rossignol/File Photo

June 2, 2019

LONDON (Reuters) – Online retail giant Amazon said it would open pop-up shops in Britain to give more than 100 small online businesses an opportunity to sell on the high street for the first time.

The first of the 10 stores, which are branded “Clicks and Mortar” and will sell homeware, health and beauty, food and drink and electronics, opens in Manchester, north England, on Monday, Amazon said.

The British high street has struggled in recent years, as major chains including Marks & Spencer and Debenhams have announced store closures. Others such as Toys R Us and Maplins have shut up shop entirely, with the rise of internet shopping one of the factors in their demise.

Amazon, which is working with small business support group Enterprise Nation on the project, said it would submit independent research on the success of the pilot stores to help develop the government’s “Future High Street” strategy.

“Small businesses are one of our most important customer groups, and we’re thrilled to work with Enterprise Nation to design a comprehensive package to help entrepreneurs across the UK grow their businesses, both in-store and online,” said Doug Gurr, UK Country Manager, Amazon.

Amazon is also providing 1 million pounds ($1.26 million) to train over 150 full-time apprentices to help small businesses increase their productivity and boost their online sales.

Foldable adult scooter company “Swifty Scooters”, leather smartphone accessories maker “Torro Cases” and men’s skincare product maker “Altr for Men” are among the online brands that will be selling in the shops for the first time, Amazon said.

(Reporting by Paul Sandle; editing by David Evans)

Source: OANN

FILE PHOTO: Chinese Vice Commerce Minister and Deputy China International Trade Representative Wang Shouwen attends a news conference during ongoing session of the NPC in Beijing
FILE PHOTO: Chinese Vice Commerce Minister and Deputy China International Trade Representative Wang Shouwen attends a news conference during the ongoing session of the National People’s Congress (NPC) in Beijing, China March 9, 2019. REUTERS/Jason Lee

June 2, 2019

By Cate Cadell

BEIJING (Reuters) – The United States cannot use pressure to force a trade deal on China, a senior Chinese official and trade negotiator said on Sunday, refusing to be drawn on whether the leaders of the two countries would meet at the G20 summit to bash out an agreement.

Trade tensions rose sharply last month after U.S. President Donald Trump’s administration accused China of having “reneged” on its previous promises to make structural changes to its economic practices.

Washington later slapped additional tariffs of up to 25% on $200 billion of Chinese goods, prompting Beijing to retaliate.

Speaking at a news conference, Chinese Vice Commerce Minister Wang Shouwen said it was irresponsible of the United States to accuse China of backtracking.

“If the U.S. side wants to use extreme pressure, to escalate the trade friction, to force China to submit and make concessions, this is absolutely impossible,” said Wang, who has been part of China’s negotiating team.

Switching into English, he said: “Nothing is agreed until everything is agreed”.

“During the consultations, China has overcome many difficulties and put forward pragmatic solutions. However, the U.S. has backtracked, and when you give them an inch, they want a yard,” he said.

Wang said the U.S. had made “unreasonably high” demands and insisted on adding “demands relating to China’s sovereign rights” to the countries’ agreement. The raising of tariffs escalated tensions and severely frustrated the talks, he added.

His comments were echoed by Chinese Defense Minister Wei Fenghe at a defense forum in Singapore on Sunday.

“If the U.S. wants to talk, we will keep the door open. If they want a fight, we will fight till the end,” Wei said.

Trump has said he will meet President Xi Jinping at the G20 summit in Osaka at the end of the month, though China has not confirmed the meeting.

When asked if Xi would meet Trump in Japan, Wang said: “I don’t have any information on this to provide.”

WHITE PAPER

Wang, who was speaking at the unveiling of a new government policy paper on the trade war, said U.S. officials overestimate the trade deficit between the two countries and China should not be blamed for a decline in U.S. manufacturing jobs.

The U.S. goods and services deficit with China is closer to $150 billion and not the $410 billion quoted by U.S. officials, he said, adding that China’s processing trade with the United States should not be included in deficit calculations.

The white paper cited three instances of the U.S. backtracking on its commitments, adding that Washington was reponsible for setbacks in the talks.

It said China had enough fiscal and monetary policy tools and “good momentum” to sustain economic development despite the trade war. Data last week showed China’s factory activity shrank in May at a more severe pace than expected.

It followed soft data in China’s retail, export and construction sectors, raising expectations that Beijing may need to roll out more stimulus to support the economy.

Wang also rejected assertions that Beijing is directing domestic companies on overseas acquisitions and investments.

“China’s government is not involved in the specific commercial behavior of companies, and won’t instruct or require companies to invest in a project or buy a technology,” he said.

Wang reiterated that China is willing to meet demand for rare earths from other countries, but it would be unacceptable if some nations used Chinese rare earths to create products that limited China’s development.

Xi’s visit to a rare earths plant last month sparked speculation that China would use its dominant position as an exporter of rare earths to the United States as leverage in the trade war.

Wang said the commerce ministry is investigating reports of delays in customs checks and will make efforts to speed up inspections and reduce costs for importers.

A top U.S. business lobby group said last month that its members face increased obstacles in China such as government inspections, slower customs clearance and slower approval for licensing and other applications.

(Reporting by Cate Cadell; Additional reporting by Meng Meng and Andrew Galbraith in SHANGHAI and Lee Chyen Yee in SINGAPORE; Writing by Andrew Galbraith; editing by Darren Schuettler)

Source: OANN

Children's furniture is seen displayed in a showroom at New York-based Delta Children in New York
Children’s furniture is seen displayed in a showroom at New York-based Delta Children, the biggest U.S. supplier of baby furniture from China and other countries to major retailers like Walmart, William-Sonoma Inc’s Pottery Barn and Wayfair Inc. in New York, U.S., May 29, 2019. REUTERS/Mike Segar

May 31, 2019

By Lisa Baertlein and Richa Naidu

LOS ANGELES/CHICAGO (Reuters) – After President Donald Trump announced higher tariffs on Chinese imports earlier this month, Francis O’Brien slapped a new 4% fee on every item of furniture he sells.

The fee, said O’Brien, who owns two Furniture Market retail stories Modesto, California, will help him cover any added costs he will face due to Trump’s 25% levy on $200 billion of Chinese imports that hits on June 1.

“I don’t have any other option,” he said of his decision to raise prices on all his furniture. “It’s too hard to go through the 5,000 products I have and figure out what’s from China.”

O’Brien is hardly alone. More than a dozen furniture retailers, manufacturers, and vendors interviewed by Reuters described a variety of steps they are taking to mitigate the impact of the tariffs, imposed as part of the escalating trade dispute between Washington and Beijing.

Like O’Brien, some are hiking prices. Others said they are canceling or pausing orders. Still others are imposing tough new contract terms, rerouting sourcing and discussing ways to share costs with each other.

When Trump first imposed 10% tariffs on furniture and other Chinese goods in September, some furniture retailers, wholesalers and manufacturers agreed to divvy up the costs.

For instance, reclining chair and sofa maker Manwah Holdings, which ships around $470 million annually to large U.S. furniture retailers from its factory outside Shenzen, absorbed 5% of the 10% U.S. tariffs.

Now, with tariffs rising to 25%, Manwah is back in negotiations with retailers. “Manwah has committed to additional tariff relief dollars but the amount will be based on an individual conversation with each of our customers,” spokesman Kevin Castellani said in an email.

But such offsets are often limited to the big factories and purchasers, and many in the $114 billion U.S. retail furniture industry are scrambling to cope with a sharp rise in costs from their biggest supplier.

Last year, the U.S. imported $5.7 billion in wood furniture; $5.3 billion in upholstered furniture; $7.2 billion in “metal and other” furniture and almost $1 billion in mattresses from China for residential use, according to an analysis by investment banking and advisory firm Mann, Armistead & Epperson. (Graphic: https://tmsnrt.rs/2YIy72f https://tmsnrt.rs/2YIy72f))

Jeff Child, president of Berkshire Hathaway’s RC Willey Home Furnishings, canceled an order for leather chairs and sofas after one Chinese manufacturer declined to help cover the extra tariff. Unable to make the higher price work for his 12-store chain, Child scrapped the 15-container order, worth just over $300,000.

Many of Child’s Chinese manufacturers covered up to half of the 10% tariffs, but the additional 15% is a heavy lift. “It’s a big bite for them too,” Child said.

BEYOND CHINA

For some, the answer to the tariffs has been to look beyond China for supplies.

Manwah, for instance, is more than doubling the size of its factory in Vietnam, which now ships 1,000 containers per month.

U.S. imports of Chinese-made furniture by retailers such as IKEA, Home Depot Inc and Target Corp fell 13.5 percent in the first quarter. That was partly offset by a 37.2 percent rise in shipments from Vietnam and a 19.3 percent increase in imports from Taiwan, according to S&P Global Market Intelligence’s trade data firm Panjiva. [L1N21S1CX]

The strategy is not without risks. Alternate countries lack China’s experienced labor force and efficient shipping and manufacturing infrastructure – something that concerns Harvey Karp, chief executive of startup Happiest Baby.

“It’s a complex product so we can’t just go to Vietnam, Indonesia or India,” Karp said.

Karp said paying the 25% tariff would threaten the viability of his business because many parents already consider his $1,295 self-rocking bassinet – sold at Best Buy Co, Crate & Barrel and Amazon.com Inc – too expensive.

Others raised similar concerns about pricing and demand. A typical furniture seller would have to raise the retail price of a table that wholesales for $400 to about $999 from $799 to cover the 25% tariff costs, said Stephen Antisdel, founder of Precept Partners, an e-commerce consultancy.

Big-ticket items like sofas and kitchen tables are subject to sticker-shock and, unlike necessities, are purchases that can be put off by consumers.

“Furniture isn’t food. Rarely is it a case where somebody has to buy it,” Antisdel said.

None of the industry players have enough profit margin to absorb the 25% tariffs, said Wallace Epperson, managing director at Mann, Armistead & Epperson.

“The incremental 15% is really beginning to cut into the meat,” Epperson said.

Big retailers have already begun squeezing the baby furniture supply chain by canceling or pausing orders and demanding contracts that will keep prices the same even with higher tariffs, said Kelly Mariotti, who heads the Juvenile Products Manufacturers Association, which represents about 200 makers of baby furniture and gear.

Top importers of Chinese furniture, including Walmart Inc, Target, Amazon, Home Depot, IKEA and Costco Wholesale Corp, declined to give specifics on how the tariffs are changing purchasing patterns.

But Delta Children, which supplies baby furniture to retailers like Walmart, William-Sonoma Inc’s Pottery Barn and Wayfair Inc, is witnessing the shifts in buying patterns first hand. Delta raised prices 3% when the 10% tariffs hit – but still lost $8-$10 million in sales after some retail stores withdrew orders, said Joe Shamie, Delta Children’s president, who declined to say which clients balked.

It was just recovering from that blow when Trump said he would raise the tariff to 25%. That reignited anxiety among retailers, some of whom have canceled parts of orders.

“The retailers are scared that the consumer is not going to be able to afford products so it’s a trickle-down effect. And the cost of crib, or a child’s bed or car-seat or bassinet is going up by 25%, if not more. The average middle American can’t afford it,” Shamie said.

(Graphic: China furniture imports, https://tmsnrt.rs/2YIy72f)

(Reporting by Lisa Baertlein in Los Angeles and Richa Naidu in Chicago; Editing by Vanessa O’Connell and Paul Thomasch)

Source: OANN

FILE PHOTO: A collection of Bitcoin (virtual currency) tokens are displayed in this picture illustration
FILE PHOTO: A collection of Bitcoin (virtual currency) tokens are displayed in this picture illustration taken December 8, 2017. REUTERS/Benoit Tessier/File Photo

May 31, 2019

By Tom Wilson

LONDON (Reuters) – Regulators need to step up risk assessments of the cryptocurrency sector as current rules are patchy, and quick technological change may lead to gaps in policies on digital money, the global financial stability watchdog said.

They should work to foresee risks in the emerging industry that could impact financial stability, the Financial Stability Board (FSB) said on Friday in a report for G20 finance ministers and central bank governors.

An assessment of banks’ and other financial firms’ exposure to digital money was one potential tool, the FSB said, adding that digital coins did not currently present a material stability risk.

Though global bodies including the Organisation for Economic Co-operation and Development and the Basel Committee on Banking Supervision are looking at cryptocurrencies and investor protection, financial stability and money laundering, rules vary across jurisdictions, the FSB said.

In their first decade, cryptocurrencies have caused headaches for global and national policymakers.

Bitcoin muscled its way onto regulators’ radars in 2017, when frenzied retail buying saw it approach $20,000. But last year the bubble burst, and it lost three-quarters of its value, underscoring its volatility.

Regulators’ approaches have varied from a near-total ban in China to Japan’s efforts to license cryptocurrency exchanges. Others, including the United States and Britain, are still working out their response.

The Switzerland-based FSB said crypto-assets – a term that includes bitcoin and No.2 digital coin ethereum – at times fall outside the scope of market or payments watchdogs, partly because of the lack of global standards.

Furthermore, quick technological change meant the “risks associated with crypto-asset markets and the level of significance of potential regulatory gaps will keep evolving.”

Views among members – national authorities responsible for financial stability and other bodies – vary on whether more international coordination is needed, it added.

This year, bitcoin has surged by around 125%, and on Friday was trading around $8,300. Its 2019 rally has been punctuated by double-digit price swings reminiscent of 2017.

With the rise has come renewed interest from risk-tolerant investors. Major financial firms including Fidelity International have also moved to offer cryptocurrency-related services.

(Reporting by Tom Wilson; editing by John Stonestreet)

Source: OANN


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