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Rabu, 15 Mei 2019

Stocks pressured as China's economic data slumps - Yahoo Finance

Stocks pressured as China's economic data slumps

Stocks opened lower Wednesday as a recovery rally from the session prior lost steam.

The S&P 500 (^GSPC) fell 0.55%, or 15.7 points, as of 9:37 a.m. ET. The Dow (^DJI) declined 0.67%, or 171.79 points, while the Nasdaq (^IXIC) fell 0.43%, or 33.34 points.

On Tuesday, stocks ended in the green as investors weighed the prospects of further trade talks with China ending in a deal. President Donald Trump said earlier this week that he plans to meet with China’s Xi Jinping at the G20 summit at the end of June, potentially providing an avenue to make strides in reaching a trade agreement.

Through Tuesday’s close, the S&P 500 was down 3.8% since May 3, the last trading session before Trump announced a higher rate of tariffs on billions of dollars worth of Chinese goods, sending financial markets reeling over the past week and a half. China has since vowed to retaliate with tariffs on U.S.-made goods starting at the beginning of June.

Wednesday morning, weaker-than-expected new retail sales and industrial output data from China stoked fears of a slowdown in the world’s second largest economy amid an escalating trade war with the U.S.

Retail sales, a proxy for consumer strength, rose 7.2% year-over-year in China, marking the weakest pace of growth since 2003 and underperforming against estimates for 8.6% growth.

China’s industrial output rose 5.4% year-over-year in April, also missing expectations. The disappointing new data from the country’s key manufacturing sector reversed the apparent rebound seen in March, when industrial output growth hit a four-and-a-half year high of 8.5%.

The tepid retail sales and industrial output results come after the Chinese government earlier this year unleashed a stimulus program to cut taxes and fees for companies in effort to prop up the economy.

Evidence of weak economic growth in China has been viewed by many analysts as a signal that the U.S. may have more leverage in negotiating a trade deal, as the domestic economy has shown continued signs of resilience based on recent GDP and labor market data.

Meanwhile, Trump is anticipated to sign an executive order that would ban U.S. companies from using telecommunication equipment produced by firms deemed to pose a national security risk – a move which would create a block on doing business with Chinese tech giant Huawei, according to a Reuters report.

Such action would likely add to tensions between the U.S. and China, given Huawei’s centricity to China’s goal of scaling the ranks to become a leader in global technology. The U.S. has alleged that Huawei’s equipment could be used by the Chinese state to spy, but the company has repeatedly denied these claims.

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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2019-05-15 13:37:00Z
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Industrial production falls 0.5% amid big decline in auto output - CNBC

A worker loads a tray of green rubber to be molded into golfball cores at the Acushnet Holdings Corp. Titleist Ball Plant III facility in New Bedford, Massachusetts.

Scott Eisen | Bloomberg | Getty Images

U.S. industrial production fell in April, dragged by a big drop in factory output as production of autos and auto parts continued to slide.

The Federal Reserve says industrial output — reflecting total production at factories, utilities and mines — dropped 0.5% in April after a 0.2% March gain. Industrial production fell 0.5% in February.

Manufacturing output fell 0.5%, led by a 2.6% decline in motor vehicles and parts, which has fallen in three of the past four months.

Production at the nation's utilities fell a sharp 3.5%. Production at mines, a sector that also covers oil and gas drilling, rose 1.6%.

Manufacturing has struggled over the past year, reflecting weakness in auto sales and the global economy.

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https://www.cnbc.com/2019/05/15/industrial-production-april-2019.html

2019-05-15 13:16:03Z
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Macy's shares soar as earnings crush estimates, boosted by online sales - CNBC

Macy's reported first-quarter earnings and same-store sales that topped analysts' expectations, as its initiatives to refresh outdated stores and get more people to shop using its mobile app showed signs of paying off.

But its sales still fell from a year ago, as the department store chain continues to face many of the same challenges impacting all retailers today. It's not easy to draw people to the mall to buy clothes, when they could just shop on online at Amazon, or from platforms like Stitch Fix and Rent the Runway.

Its shares initially soared more than 7% in premarket trading on the news. The stock was last up about 4.4%.

Macy's also reaffirmed its previously issued profit outlook for the full year.

Here's what Macy's reported compared with what analysts were expecting, based on Refinitiv data:

* Earnings per share: 44 cents vs. 33 cents expected
* Revenue: $5.504 billion vs. $5.505 billion expected
* Same-store sales: up 0.7% vs. a decline of 0.2% expected, on an owned plus licensed basis

CEO Jeff Gennette said e-commerce revenues grew at a double-digit percentage rate during the quarter, while mobile remained Macy's fastest-growing channel for sales growth.

There was some impact to the business because the Easter holiday fell later in the season this year than last, he added, and colder, wetter weather has blanketed much of the country for the start of spring, encouraging more consumers to stay indoors.

But Macy's is doing especially well with its most loyal shoppers, the CEO said. Transaction growth of 5.7% during the quarter was driven by Macy's most loyal customers "shopping more frequently than ever," Gennette said.

Macy's reported net income for the quarter ended May 4 of $136 million, or 44 cents a share, compared with $139 million, or 45 cents per share, a year ago. That was ahead of analysts' expectations for 33 cents, based on Refinitiv data.

Sales dropped to $5.504 billion from $5.541 billion. That was about in-line with analysts' expectations for revenues of $5.505 billion.

Sales at Macy's stores open for at least 12 months, on an owned plus licensed basis, were up 0.7%, better than an expected 0.2% drop.

For fiscal 2019, Macy's is still calling for net sales to be about flat with the prior year. Same-store sales on an owned plus licensed basis are forecast to be flat to up 1%. And Macy's still expects adjusted earnings per share to fall within a range of $3.05 to $3.25. Analysts had been calling for annual earnings of $3.09 a share.

Macy's has been trying to clean up its apparel offering, as its inventories have been inflated in the past, with items left sitting on shelves unsold and thus pressuring profits. More broadly, it's still trying to find trend-right fashion to compete with the likes of Zara, Lululemon and Madewell.

"We believe the biggest department store sector vulnerability remains women's apparel — and specifically the need to better attract and retain new millennial and Generation Z customers," Cowen & Co.'s retail analysts said in a research note.

Some of Macy's other recent initiatives to draw shoppers in include adding rotating marketplaces for popular brands in more than two dozen stores, using virtual-reality headsets to sell furniture and rolling out a mobile checkout option across the U.S. to cut costs and grow sales. Macy's has also said it plans to start downsizing some of its larger locations, not requiring so much real estate.

Macy's, with a market cap of roughly $6.7 billion, has watched its shares fall nearly 27% so far this year. That's compared with the S&P 500 Retail ETF's (XRT's) gains of about 5%.

Meantime, tariffs are still another looming threat for retailers like Macy's, with the White House just earlier this week releasing a fresh list for about $300 billion in Chinese goods that President Donald Trump has said he's contemplating hitting with tariffs as high as 25%. The list includes everything from clothing and sneakers to sporting goods and other accessories, often found at the mall.

— CNBC's Courtney Reagan contributed to this reporting.

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2019-05-15 12:16:58Z
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Former Goldman Sachs CEO backs Trump's China tariffs as 'effective negotiating tool' - Fox Business

Former Goldman Sachs CEO Lloyd Blankfein is backing President Trump’s tariffs on China as a tool to pressure the Asian nation into a trade agreement with the U.S.

“Tariffs might be an effective negotiating tool. Saying it hurts us misses the point. China relies more on trade and loses more,” he tweeted on Tuesday evening.

Amid warnings from corporate America, Main Street businesses, economists and others that Trump’s tariffs on China will increase costs for U.S. consumers, Blankfein said they could “eventually switch their purchases to domestic or non-Chinese companies” or pay more as “part of the process to assert pressure to level the playing field.”

China’s economic success is largely pegged to its exports and the country ships far more goods to the U.S. than it imports.

Trump capitalized on the discrepancy in pushing forward with tariffs on $250 billion of Chinese goods, as well as the potential for another $300 billion in products, to exert pressure on President Xi Jinping to make significant concessions in the ongoing trade talks.

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While China said it would retaliate with its own duties on $60 billion in U.S. shipments, experts say U.S. consumers are unlikely to see much of an impact on prices.

Instead, the country has other tools at its disposal to push back against the Trump administration, including making it more difficult for American businesses to operate in China.

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Negotiations on a trade deal between the two nations are at a standstill, but White House officials expect additional talks in the coming weeks. Trump and Xi are also expected to meet in June at the G20 summit in Japan.

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2019-05-15 11:25:03Z
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China is under pressure to boost its economy as the trade war escalates - CNN

Key indicators of economic activity, like industrial output and retail sales, cooled significantly last month, according to figures posted by the National Bureau of Statistics on Wednesday.

Industrial output, which measures manufacturing, mining production and other sectors in China, grew 5.4% in April compared to the previous year, significantly lower than analysts had expected. It was also a sharp dip from last month, when growth came in at 8.5%.

China's economy had a steady start to 2019

Analysts say the slump could prompt China to take more action to boost activity in the world's second biggest economy as increased US tariffs take effect after a breakdown in trade negotiations. Beijing has already instituted several measures in recent months, like cutting taxes and increasing infrastructure spending, as economic growth slumped to a near three-decade low.

"Downbeat data strengthen the case for more easing," Julian Evans-Pritchard, senior China economist at Capital Economics, said in a research note. "Given budget constraints on local governments, monetary policy will probably take the lead," he added.

While further stimulus could spark a slight uptick in growth this year, Evans-Pritchard says it's unlikely to be large enough for a "strong recovery."

China's retail sales growth slowed to a 16-year low last month, raising questions about consumer confidence in one of the world's biggest markets. Sales grew by 7.2%, far weaker than analyst forecasts of 8.6%.

But activity in the sector also decelerated because there were fewer holidays in April this year than last, said Jingyang Chen, a China economist at HSBC, in an analyst note.

People walking through a shopping area in Shanghai. China's retail sales growth cooled significantly last month, according to figures released Wednesday.

Nonetheless, economists now widely expect the government to introduce more stimulus to support the private sector in the coming months.

The US-China trade war remains one of the biggest risks to China's economy, with tariffs expected to hurt economic growth on both sides. Last week, Washington increased tariffs on $200 billion of Chinese goods, prompting Beijing to respond by hiking tariffs on roughly $60 billion of American exports.

And if trade tensions continue to escalate, experts say that will only put more pressure on Beijing to step up easing measures.

"The need for further stimulus is amplified by the trade war escalating last week," wrote Katrina Ell, an economist at Moody's Analytics. "The task before Beijing to stabilize domestic demand amidst slower global growth and a festering trade war is not easy."

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https://www.cnn.com/2019/05/15/economy/china-economy-us-china-trade/index.html

2019-05-15 09:39:00Z
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Amazon started building its $1.5 billion airport, with Jeff Bezos taking the controls of a front loader to begin the work - Business Insider

Jeff Bezos broke ground at the new Amazon airport site on Tuesday.YouTube/WCPO.com

Jeff Bezos kicked off work at Amazon's new $1.5 billion airport development in Kentucky on Tuesday.

Bezos, who reportedly made a surprise appearance at the opening, hopped aboard a front loader to lift the first pile of dirt. "If you're wondering, that's fun," he said after stepping down from the machinery.

Amazon agreed to a 50-year lease for more than 900 acres of property from Cincinnati/Northern Kentucky International Airport in 2017. This space is close to the size of the global hubs of top cargo airlines, according to the Associated Press.

Amazon plans to take greater control of its shipping process and become less reliant on carries such as UPS, FedEx, or the USPS, to cut costs and speed up delivery times. This will be especially pertinent as it rolls out one-day shipping for Prime members.

"This hub is going to let us get packages to customers faster...We're going to move Prime from two-day [delivery] to one day, and this hub is a big part of that," Bezos said, according to WCPO-TV.

The development is expected to open in 2021 and bring 2,000 jobs to the airport.

Watch Jeff Bezos' full video here:

We’re investing $1.5 billion in our new air hub to get you your packages faster. Three million square feet, and it’s going to create 2,000 jobs. And if you’re guessing that driving a front loader was fun, you’re right! #amazon #prime pic.twitter.com/Cud4orKrC4
— Jeff Bezos (@JeffBezos) May 14, 2019

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2019-05-15 09:25:17Z
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China weakness; Mixed markets; Retail sales - CNN

Industrial production and retail sales, key indicators of economic activity, cooled sharply last month, according to government data released Wednesday. That could spook investors, who had been tracking signs of China's recovery earlier this year.

The softness comes as the trade war between the United States and China is back in full swing.

Higher US tariffs on Chinese exports worth $200 billion, enacted last week, have been weighing on markets and are expected to hit growth. The threat of US tariffs on another batch of exports worth $300 billion looms large.

The big question now: Will Beijing move ahead with additional stimulus measures? Analysts say that's increasingly likely.

2. Mixed markets: The trade fears that have gripped Asian markets in recent days appear to be tapering off.

Hong Kong's Hang Seng index rose 0.5% Wednesday, while the tech-heavy Shenzhen Composite added 2.4% — helped by talk of new economic stimulus. Japan's Nikkei index gained almost 0.6%.

The picture is less sunny in Europe, where the Stoxx 600 index is down about 0.1%. Britain's FTSE 100 is up 0.2%. Markets in Germany are lower despite strong first quarter GDP growth.

US stock futures are pointing down, too. The Dow is set to drop about 20 points, or 0.1%, when markets open. The S&P 500 is pacing for a similar decline. The Nasdaq could open flat.

Such calm would follow a rough week for US markets, which recovered on Tuesday from big sell-offs. The Dow closed up more than 200 points, or 0.8%. The S&P 500 was up 0.8%, and the Nasdaq was up 1.1%.

3. Retail sales: The Census Bureau will release its US retail sales report for April at 8:30 a.m. ET.

The retail industry is turning into a tale of the haves and the have-nots. While Walmart (WMT), Amazon (AMZN) and Kohl's (KSS) have adapted well to quickly changing consumer demands, others like JCPenney (JCP) and Sears (SHLDQ) are falling short.

People are still buying stuff, though — they're just buying in different ways and at different places. Economists surveyed by Refinitiv expect retail sales rose 0.2% last month.

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4. Companies: Alibaba (BABA), Tencent (TCEHY) and Macy's (M) will release earnings before the US open Wednesday.

Disney (DIS) on Tuesday revealed that it will take full control of streaming service Hulu. Shares rose 1.4% and are poised to keep gaining Wednesday.

5. Coming this week:
Wednesday — Alibaba (BABA), Tencent (TCEHY) and Macy's (M) earnings; US April retail sales
Thursday — Walmart (WMT), Baidu (BIDU) and NVIDIA (NVDA) earnings; VivaTech conference starts in Paris
Friday — US consumer sentiment

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https://www.cnn.com/2019/05/15/investing/premarket-stocks-trading/index.html

2019-05-15 09:25:00Z
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