Saudis’ OPEC tightrope has trade war safety net 22 Jun 2018 The kingdom’s desire for oil output hikes faces pushback from Iran, its usual antagonist. Even if it strikes a deal in Vienna on Friday, lost supply from Venezuela may still push up prices. Riyadh’s saving grace could come if a trade war between the U.S. and China saps demand.
America Inc. may want to revise China growth plans 22 Jun 2018 Trade tensions might hit the U.S. stock market from another angle. A Communist Party tabloid just published an op-ed warning Beijing could target DJIA constituents such as Apple and Boeing. The scope of retaliation is limited by economics, but big expansion could be curbed.
U.S. sales-tax fix has global parallels 21 Jun 2018 The Supreme Court scrapped precedent and said states can force retailers to collect levies on sales to residents even if the sellers aren’t physically present. States will regain a tax base eroded by geographical arbitrage and the internet – two causes of worldwide tax tensions.
Tax reform puts utilities’ good credit at risk 21 Jun 2018 Debt investors have long favored power companies because their regulated monopoly status provides good assurance of payback. But tax cuts are limiting companies' billing power and their ability to deduct investment spending. Natural disasters add an extra layer of risk.
People’s Fed will provide armor in economic dip 21 Jun 2018 Chairman Jay Powell says he’ll speak in plain English about what the U.S. central bank does. He also admits the Fed doesn’t have all the answers. Demystifying it should strengthen its credibility. That will be handy when the economy turns and politicians are pointing fingers.
Viewsroom: Disney, Comcast go from zero to berserk 21 Jun 2018 The Magic Kingdom and the cable company are driving up the price for parts of Twenty-First Century Fox in a global M&A battle that throws financial logic out the window. But does it make sense strategically? Plus: India’s cricket league takes a few pages from the NFL playbook.
Intel scandal matters little today, a lot tomorrow 21 Jun 2018 The ouster of CEO Brian Krzanich for a relationship that breached company policy need not be a disaster. It shows the relevant rules apply to all, and Intel can run itself smoothly for a while. Mounting tech challenges, however, make it critical to find the right replacement.
Trade war tariffs eat Daimler’s homework 21 Jun 2018 The carmaker’s tariff-induced profit warning is odd, since Chinese duties would hit U.S. cars but not imports from elsewhere. Daimler’s statement could cover for poor performance, or make a political point about a trade war’s costs. Expect other companies to try the same.
Wilbur Ross proves bad behavior is new norm 20 Jun 2018 Lawmakers hammered the U.S. commerce secretary about the effect of tariffs – but barely mentioned his sale of a company’s shares days ahead of a negative news story. Congress, occupied with trade battles, is growing numb to shady conduct. Calling it out, though, matters.
Buffett and pals pick good medic for U.S. tapeworm 20 Jun 2018 Berkshire Hathaway, Amazon and JPMorgan chose Atul Gawande to lead their fight against rising medical bills. The surgeon has written extensively on how the system rewards excess, but not outcomes. Changing this focus would be a good start, even if neither easy nor sufficient.
High Times’ creative financing is far out 20 Jun 2018 The marijuana magazine is using a novel crowdfunding method to sell discounted shares before it goes public. Legalization efforts could generate buzz and draw crowds to the company’s events. But the publishing industry remains tough, and investors’ money could go up in smoke.
Starbucks plots a skinny-latte future 20 Jun 2018 The coffee chain is serving slowing sales in the U.S. and China, and a lukewarm valuation. Boss Kevin Johnson is using his tech background to attract customers, but still faces venti-sized challenges. Starbucks is shaking up the menu. It could also consider slimming down faster.
Disney hurls magic and moolah to woo Murdoch 20 Jun 2018 Boss Bob Iger leapfrogged Comcast by raising his offer for parts of Fox to $71 bln, including a generous dollop of cash. He retains Rupert Murdoch’s support, and has room to go higher still. The cable firm may yet go hostile, but would be better off focusing its efforts on Sky.
Hadas: Irresponsible companies feed bad politics 20 Jun 2018 Two new studies show rising markups and major tax-shifting at successful corporations. Winner-take-most industries push up inequality, squeeze governments and ultimately drag down growth – all economic nutrients for populism. Cures are available, but prospects are not bright.
EU’s best bet is to indulge Trump on car tariffs 20 Jun 2018 Europe’s tit-for-tat response to U.S. metal duties risks a trade war that hits EU carmakers. Better to offer President Donald Trump the carrot of lower auto tariffs, which have little effect anyway. That could humour his trade antics, but cause less economic damage.
Apple supplier’s M&A bite looks too much to chew 20 Jun 2018 British chipmaker Dialog is eyeing U.S. touchscreen group Synaptics. That would help it diversify away from main client Apple, which recently cut orders, and the returns look good. Yet funding a winning bid may mean taking on a slug of costly debt or raising equity.
Market swoon undercuts Chinese consumer tale 20 Jun 2018 Mainland stocks are at their lowest in a year, and bonds and the yuan have slumped as fears of a full-blown tariff war intensify. This economy relies less on exports than it used to do, but domestic demand isn’t immune to trade tension. The central bank’s jitters are justified.
Dow Jones ejection is least of GE’s worries 19 Jun 2018 The charter member of the iconic benchmark stock average is being replaced by drugstore chain Walgreens due to slumping profit and a withering share price. It could make CEO John Flannery’s turnaround bid harder. Investors can only hope it will spark the radical changes GE needs.
BJ’s goes for refreshingly no-frills IPO 19 Jun 2018 The discount wholesaler’s private equity owners are aiming for a $2.1 bln valuation. BJ’s resembles pile-'em-high retailer Costco, but priced much more like the more modestly rated Walmart. The lack of a racy growth story or strategic gamble makes it a rarity – in a good way.
Bad economics worsen cruel U.S. immigration push 19 Jun 2018 Separating children from parents illegally entering the country isn’t just immoral, it’s expensive. Detention costs could hit up to $100 mln for one month, eating into a $3.2 bln deportation budget. Given immigrants are good for the economy, it’s a double whammy of dumb policy.