Walmart says higher tariffs on China goods will increase prices for U.S. shoppers - Yahoo Finance

By Nandita Bose

(Reuters) - Walmart Inc said on Thursday that prices for shoppers will go up due to higher tariffs on imports from China as the world's largest retailer reported its best comparable sales growth for the first quarter in nine years.

Walmart shares, which have gained 7% so far this year, rose 2.4% to $102.30 in premarket trade.

U.S. President Donald Trump increased tariffs on $200 billion worth of Chinese imports to 25% from 10% last week. The move is widely expected to raise prices on thousands of products including clothing, furniture and electronics. China retaliated on Monday, though on a smaller scale.

Walmart Chief Financial Officer Brett Biggs told Reuters that higher tariffs will result in increased prices for consumers. He said the company will seek to ease the pain, in part by trying to obtain products from different countries and by working with suppliers' "costs structures to manage higher tariffs."

Moody's analyst Charlie O'Shea said the potential impact on Walmart and its shoppers (from tariffs) is limited by its food business. Its grocery operation, which includes fresh food, contributes roughly 56 percent to overall revenue.

"We believe Walmart has the wherewithal both financially and via its vendor relationships to minimize the impact on both itself and its shopping base," he said.

CFO Biggs said the retailer has not seen signs of a slowdown in consumer spending, but he declined to comment on the health of the consumer in the near term.

Investors and analysts expect U.S. spending to slow this year against a backdrop of rising debt, tariffs and economic uncertainty.

U.S. retail sales unexpectedly fell in April as households cut back on purchases of vehicles and a range of other goods, reflecting a slowdown in economic growth after a temporary boost from exports and inventories in the first quarter.

Earlier this week, Walmart stepped up its battle with Amazon.com Inc by offering one-day delivery in some markets without a shipping fee, weeks after Amazon announced a similar plan. Walmart said it will cost the company less than two-day shipping since orders will be delivered from warehouses closer to the customer and arrive in a single box rather than multiple packages.

Sales at Walmart's U.S. stores open at least a year rose 3.4%, excluding fuel, in the quarter ended April 30. Analysts estimated growth of 3.1%, according to IBES data from Refinitiv.

Adjusted earnings per share increased to $1.13 per share, beating expectations of $1.02 per share.

Online sales rose 37%, slowing from the previous quarter's 43% increase but stronger than online sales growth at most of its brick-and-mortar rivals. The company has forecast a 35% increase in online sales this year.

Total revenue was up 1% at $123.9 billion but lower than analysts' estimates of $125.03 billion dragged down by currency impact and lower international sales. Excluding currency, revenue was up 2.5% at $125.8 billion.

On Tuesday, Walmart said it was considering a stock market listing for its British supermarket arm Asda, whose attempt to combine with rival J Sainsbury Plc was blocked by UK regulators last month.

(Reporting by Nandita Bose in Washington; Editing by Jeffrey Benkoe)

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2019-05-16 12:39:00Z
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US housing starts rose more than expected in April - CNBC

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U.S. homebuilding increased more than expected in April and activity in the prior month was stronger than initially thought, suggesting declining mortgage rates were starting to provide some support to the struggling housing market.

Housing starts rose 5.7% to a seasonally adjusted annual rate of 1.235 million units last month, driven by gains in the construction of both single- and multi-family housing units, the Commerce Department said on Thursday. Groundbreaking was also likely boosted by drier weather in the Midwest.

Data for March was revised up to show homebuilding rising to a pace of 1.168 million units, instead of falling to a rate of 1.139 million units as previously reported.

The government revised the seasonally adjusted data back to January 2014. The unadjusted series will be revised in July.

Building permits rose 0.6% to a rate of 1.296 million units in April. Building permits had declined for three straight months. Permits for single-family housing, however, fell for a fifth straight month, suggesting a moderation in homebuilding activity in the months ahead.

Economists polled by Reuters had forecast housing starts would increase to a pace of 1.205 million units in April.

The 30-year fixed mortgage rate has dropped to 4.10% from a peak of about 4.94% in November, according to data from mortgage finance agency Freddie Mac. Decreasing mortgage rates reflect a recent decision by the Federal Reserve to suspend its three-year monetary policy tightening campaign.

A survey on Wednesday showed confidence among homebuilders rose to a seven-month high in May. While lower borrowing costs are boosting demand, builders said they "continue to deal with ongoing labor and lot shortages and rising material costs that are holding back supply and harming affordability."

The housing market has been mired in a soft patch since last year. Investment in homebuilding contracted at a 2.8% annualized rate in the first quarter, the fifth straight quarterly decline.

Single-family homebuilding, which accounts for the largest share of the housing market, increased 6.2% to a rate of 854,000 units in April. Single-family homebuilding surged in the Midwest, which had suffered flooding in prior months. Single-family starts also rose in the Northeast and West, but fell in the South, where the bulk of homebuilding occurs.

Permits to build single-family homes dropped 4.2% to a rate of 782,000 units in April.

Starts for the volatile multi-family housing segment advanced 4.7% to a rate of 381,000 units last month. Permits for the construction of multi-family homes rebounded 8.9% to a pace of 514,000 units last month.

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2019-05-16 12:31:42Z
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Walmart says tariffs 'will increase prices' for shoppers - CNBC

The biggest retailer in the world is warning another round of tariffs could hit consumers hard.

"As we have said before, our goal is to be the low-price leader," Walmart CFO Brett Biggs said Thursday, as the company reported first-quarter earnings. "We want to manage margins with customers and shareholders in mind. We have mitigation strategies that have been in place for months. But increased tariffs will increase prices for customers."

The White House on Monday evening released 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.

That's after the Trump administration raised tariffs to 25% from 10% on $200 billion worth of Chinese goods last week. But retailers, for the most part, scooted by unscathed, with many of the items impacted by that hike hurting agricultural workers more than anything else. Some consumer-related goods on that list included furniture and handbags.

Walmart says it's "monitoring" tariff discussions closely, "hopeful that an agreement can be reached."

The company sources about two-thirds of its good domestically, largely because of its massive food business. The remaining one-third of items comes from overseas, including from China.

Macy's CEO Jeff Gennette had similar remarks on Wednesday. He said it would be hard for Macy's to get to a place "where you don't have a customer impact" if the additional tariffs go into effect.

Another analyst has warned the tariff hike could cause "widespread" store closures.

Walmart shares were last up about 3% in premarket trading Thursday, after Walmart reported earnings that topped Wall Street expectations, but sales came up short.

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2019-05-16 11:59:52Z
CAIiELq7YnJd0LtVUK6qwppAvBIqGQgEKhAIACoHCAow2Nb3CjDivdcCMO7tngY

European shares recover, but trade worries mount - Yahoo Finance

FILE PHOTO: A trader works at his desk whilst screens show market data at CMC Markets in London, Britain, January 16, 2019. REUTERS/John Sibley

By Saikat Chatterjee

LONDON (Reuters) - European stocks rose half a percent to the day's highs on Thursday, erasing earlier losses, while the euro gained in volatile trade as the threat of auto tariffs were pushed back.

But falling government bond yields globally meant attention remained focused on the trade dispute between China and the United States, after Washington hit Chinese telecoms company Huawei with sanctions.

"Manufacturing growth in Europe continues to be a source of concern as seen by recent PMI data and unless we see a firm resolution on the trade war front, the uncertain outlook will continue to be a headwind for markets," said Mike Bell, a global markets strategist at JP Morgan Asset Management in London.

European shares rose half a percent, up nearly a percent from the day's lows. German stocks also surged. U.S. stock futures were up 0.4 percent, signaling a stronger start on Wall Street.

The surge in European stocks and gains by Chinese and Hong Kong stocks pushed an index of global stocks into positive territory.

German government bond yields were near their lowest in almost three years. Dutch bond yields were about to reach negative territory, a level not seen since October 2016. German yields are now four basis points below their Japanese counterparts, the biggest gap since late 2016.

Late on Wednesday, the U.S. Commerce Department said it was adding China's Huawei Technologies Co Ltd and 70 affiliates to its "Entity List" - a move that bans Huawei from acquiring components and technology from U.S. companies without government approval.

The move surprised global markets, which had steadied the day before after Reuters reported that U.S. President Donald Trump was planning to delay tariffs on auto imports.

RATE CUT BETS GROW

As trade tensions re-emerged, weak U.S. data ratcheted up market expectations of the Federal Reserve would cut U.S. interest rates this year. Retail sales unexpectedly fell in April and industrial production dropped 0.5%, the third decline this year.

Yields on 10-year U.S. Treasury bonds fell to 2.3%, near a 15-month low of 2.340% on March 28.

Fed funds rate futures are fully pricing in a rate cut by the end of this year and more than a 50% chance of a move by September.

"That is a sea change from a year ago, when the consensus was three to four rate hikes a year," said Akira Takei, bond fund manager at Asset Management One.

Falling U.S. yields have eroded support for the dollar, which was flat against a basket of other currencies.

Oil prices gained on concern mounting tensions in the Middle East would hitting global supplies. Brent crude rose 0.1% to $72 a barrel and U.S. West Texas Intermediate (WTI) crude reached $62.73, half a percent higher.

Gold slipped 0.2% to $1,293.9 per ounce.

(Reporting by Saikat Chatterjee; additional reporting by Hideyuki Sano and Daniel Leussink in Tokyo; editing by Larry King)

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2019-05-16 11:57:00Z
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EU fines banks €1bn for currency rigging - BBC News

Five banks have been fined a total of €1.07bn (£935m) by the European Commission for forming illegal cartels to rig the foreign exchange market.

Four banks in the "Banana Split" cartel - Barclays, RBS, Citigroup and JP Morgan - were fined €811m in all.

Another three banks in the "Essex Express" cartel - Barclays, RBS and MUFG - were fined €258m.

A sixth bank, UBS, was excused financial penalties for revealing the cartels' existence.

The European Commission said the market-rigging took place from 2007 to 2013.

Competition Commissioner Margrethe Vestager said the banks' behaviour "undermined the integrity of the sector at the expense of the European economy and consumers".

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2019-05-16 10:17:00Z
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Citigroup, JPMorgan Among Banks Fined $1.2 Billion in FX Probe - Bloomberg

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Citigroup, JPMorgan Among Banks Fined $1.2 Billion in FX Probe  Bloomberg

Citigroup Inc., Royal Bank of Scotland Group Plc and JPMorgan Chase & Co. are among five banks that agreed to pay European Union fines of about 1.07 ...

https://www.bloomberg.com/news/articles/2019-05-16/citigroup-jpmorgan-among-banks-fined-1-2-billion-in-fx-probe

2019-05-16 09:46:00Z
CAIiEIL59iZUaswn_J7wHT24H8EqGQgEKhAIACoHCAow4uzwCjCF3bsCMIrOrwM

U.S. sanctions on Huawei send stocks reeling; yields fall - Yahoo Finance

FILE PHOTO: A trader works at his desk whilst screens show market data at CMC Markets in London, Britain, January 16, 2019. REUTERS/John Sibley

By Saikat Chatterjee

LONDON (Reuters) - European stocks fell, government bond yields slipped and the Japanese yen firmed on Thursday after the U.S. government hit Chinese telecoms giant Huawei with severe sanctions, further straining Sino-U.S. trade ties.

An index of European shares fell as much as 0.5% in early European trading with the German stock index down 0.4%. U.S. stock futures were down 0.4%, pointing to a weak start on Wall Street.

The broad weakness in European markets was somewhat offset by small gains in Chinese and Hong Kong stock indexes leading to only marginal losses on a global stock index as investors expected state authorities to step in to support the market and stabilize sentiment.

"Chinese stocks are up as markets expect authorities to intervene to support sentiment but this kind of activity is not sustainable and unless we see a clear resolution in the China-U.S. trade conflict, overall sentiment will remain weak," said Neil Mellor, a senior FX strategist at BNY Mellon in London.

While benchmark indexes in China and Hong Kong were up between 0.3-0.8% at the close of trading, bond markets were signalling more pain for risk appetite.

Core German government bond yields were flirting with their lowest level in nearly three years while Dutch bond yields were about to dip into negative territory, a phenomenon not seen since October 2016.

Late on Wednesday, the U.S. Commerce Department said it was adding Huawei Technologies Co Ltd and 70 affiliates to its "Entity List" - a move that bans the company from acquiring components and technology from U.S. firms without government approval.

The move took global markets by surprise as sentiment had steadied somewhat in the previous session on news that U.S. President Donald Trump was planning to delay tariffs on auto imports after a swathe of weak U.S. and Chinese economic data.

RATE CUT BETS GROW

As trade tensions have made a reappearance on investors' radars, weak U.S. data has also ratcheted up market expectations of a U.S. interest rate cut in the coming months.

In the United States, retail sales unexpectedly fell in April as households cut back on purchases of motor vehicles and a range of other goods, while industrial production fell 0.5% in April, the third drop this year.

Yields on 10-year U.S. Treasury bonds eased to 2.366%, near a 15-month low of 2.340% touched on March 28.

Fed funds rate futures are fully pricing in a rate cut by the end of this year and more than a 50% chance of a move by September.

"The markets are inching step by step in pricing in a rate cut. That is a sea change from a year ago when the consensus was three to four rate hikes a year," said Akira Takei, bond fund manager at Asset Management One.

Falling U.S. yields have eroded support for the greenback with the dollar down 0.1 percent against a basket of its rivals.

Oil prices gained on the prospect of mounting tensions in the Middle East hitting global supplies despite an unexpected build in U.S. crude inventories.

Brent crude rose 0.3% to $71.99 a barrel, while U.S. West Texas Intermediate (WTI) crude fetched $62.26, also half a percent higher.

Gold edged up to $1,296.9 per ounce.

For Reuters Live Markets blog on European and UK stock markets, please click on: [LIVE/]

(Reporting by Saikat Chatterjee; Additional reporting by Hideyuki Sano and Daniel Leussink in TOKYO; Editing by Andrew Cawthorne)

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2019-05-16 08:26:00Z
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