Dow futures are flat amid ongoing trade anxiety - CNBC

U.S. stock index futures fell on Wednesday as trade worries increase while declines in Qualcomm and retailer shares dragged down market sentiment.

At around 8:30 a.m. ET, Dow Jones Industrial Average futures were down 123 points, indicating a decline of 119 points at the open. Futures on the S&P 500 and Nasdaq 100 were also lower.

The ongoing trade war — as well as restrictions on Chinese telecom giant Huawei — have led China to rethink its entire economic relationship with the U.S., according to a report from The South China Morning Post. 

The report said China is still open to restarting trade talks, but added that government advisors are highlighting the risks of sourcing supplies from the U.S. as the trade war drags on.

President Donald Trump followed through with his threat to increase tariffs on $200 billion in Chinese goods from 10% to 25% earlier this month. China immediately responded by upping the tariffs on $60 billion of U.S. goods to as high as 25%. Treasury Secretary Steven Mnuchin told CNBC's Ylan Mui on Wednesday that U.S. officials had yet to schedule talks in Beijing. 

Meanwhile, Qualcomm shares fell 11% in the premarket after a U.S. judge ruled the chipmaker violated antitrust law by unlawfully suppressing competition in the cellphone chip space. The news dragged down the VanEck Vectors Semiconductor ETF (SMH) down by 1.9%.

Shares of Qualcomm have been under pressure all month, falling 9% in May.

The U.S. recently added Chinese telecoms giant Huawei to a trade blacklist, which puts curbs on its ability to do business in America. However, some of those restrictions were eased on Monday. Relief over Washington's relaxation of curbs against Huawei helped boost U.S. stocks in the previous session.

"This will weaken the Huawei ban by US in our opinion and gives leverage to China in chip battle heading into G-20 talks," Dan Ives, analyst at Wedbush Securities, said in an email referring to the ruling. "Qualcomm is dealt a blow with this FTC ruling as the main US 5G arms dealer, Huawei leverage is strengthened on 5G."

Retailers were also under pressure after the release of quarterly results from companies in the sector. Lowe's fell more than 8% on weaker-than-expected earnings. Nordstrom, meanwhile, dropped nearly 11% as its quarterly earnings and revenue missed expectations. 

Target was the bright spot among retailers. The company's stock rose more than 7% as its earnings and revenue topped analyst expectations. Same-store sales, a key metric for retailers, also surpassed estimates. 

Meanwhile, investors are likely to closely monitor the release of the U.S. central bank's meeting minutes. The Federal Reserve is expected to provide insights into the May 1 meeting, when policymakers left interest rates unchanged and signaled little appetite to adjust them any time soon.

Ahead of the minutes' release, St. Louis Fed President James Bullard, a voting member of the central bank's policymaking committee, said the Fed may have raised rates too much last year. "Rates are at a good place in the U.S. right now, if anything we are a little restrictive I would say," he told Bloomberg News. "I am concerned we may have slightly overdone it with our December rate hike but I was pleased that the committee pivoted."

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https://www.cnbc.com/2019/05/22/stock-market-dow-in-focus-amid-ongoing-trade-war-anxiety.html

2019-05-22 07:39:12Z
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TransferWise is now Europe's most valuable fintech start-up, with a $3.5 billion valuation - CNBC

TransferWise co-founders Taavet Hinrikus and Kristo Kaarmann.

TransferWise

TransferWise, the money transfer company that's taking on Western Union, is valued at $3.5 billion after a new investment round, making it Europe's most valuable financial technology start-up.

In lowering fees and adding a slick online platform to help consumers move money globally and track their transfers, the London-based company is taking a modern approach to a staid business that's been dominated by giants like Western Union and MoneyGram.

The company says it's been pushing for more transparency around the fees banks and currency exchange services charge their customers for transferring money abroad.

"Eight years ago we had a dream, and in a way the whole world was against us," said TransferWise co-founder and Chairman Taavet Hinrikus in an interview. "And we've been able to step by step build the business and also change the environment around us to be much more consumer friendly."

TransferWise isn't adding fresh cash to its balance sheet with the investment, but instead giving employees and early investors the chance to sell some of their stake in a $292 million secondary deal.

European private equity group Vitruvian Partners and U.S. investment firms Lone Pine Capital and Lead Edge Capital bought shares from existing investors, while early investors Andreessen Horowitz and Baillie Gifford increased their holdings in the company. Funds managed by BlackRock also contributed to the round.

"We have been a profitable company for the past two years, we have a significant amount of cash sitting on our balance sheet," Hinrikus said. "The company does not need any cash."

TransferWise booked a net profit of £6.2 million ($7.9 million) for the fiscal year ending March 2018, while annual revenue almost doubled to £117 million. The company says it's signing up 10,000 new business customers a month, and now has 5 million total customers, processing £4 billion in monthly transactions.

The latest fundraising means TransferWise is now the most valuable fintech start-up in Europe, surpassing British digital lender OakNorth, which was last valued at $2.8 billion.

Hinrikus said the company isn't in a rush to go public.

"While we believe we'll be a public company eventually, that doesn't help us do what we want to do in the next couple of years," he said.

For now, the company is focused on growth. TransferWise currently has more than 1,600 employees worldwide and will hire 750 more over the next 12 months, Hinrikus said.

WATCH: How TransferWise has integrated its product into bank apps

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https://www.cnbc.com/2019/05/22/transferwise-valued-at-3point5-billion-after-292-million-secondary-sale.html

2019-05-22 04:26:58Z
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Coca-Cola is bringing back New Coke in honor of 'Stranger Things' - CNN

The company is bringing back a limited number of New Coke cans in honor of the upcoming third season of "Stranger Things," in which the product is featured.

"Stranger Things" creators Ross and Matt Duffers came up with the idea to bring New Coke back as a way to promote the show, which will start streaming on Netflix (NFLX)on July 4. The third season of the show takes place during the summer of 1985 — when Coca-Cola (KO) debuted a new recipe for its iconic beverage.

So-called New Coke was a flop: Consumers reacted so poorly to the new drink that Coca-Cola pulled it from shelves after a few months. New Coke was rebranded as Coke II, and sold in some places after 1985. But this is the first time Coca-Cola is bringing back New Coke with that branding.

Bringing New Coke back is a way for Coca-Cola to "not take ourselves too seriously," Stuart Kronauge, president of Coke's sparkling business unit and senior vice president of marketing for Coca-Cola North America, told CNN Business. And it wasn't easy to recreate the product: Coca-Cola had to reach into its archives to get the design of right, and dig through its vault to recover the recipe.

"Maybe a while ago we wouldn't have done this," Kronauge said. "But we're changing and trying to innovate in ways that are beyond traditional new products. This is a cultural innovation." Coca-Cola recently partnered with Disney Parks & Resorts on custom designs for Coke products being sold at Disney's new "Star Wars" theme park, "Galaxy's Edge."

The partnership is a way for Coke to reach people in an evolving media landscape.

"Buying a 30-second ad to drop into a certain time-frame is not as valuable as it once was," Kronauge said.

"The world is changing into streaming and non-ad platforms and subscription-based platforms," she added. "So it's important for us to make sure that we are where our consumers' eyeballs and hearts and spirits are." The new promotion is designed to "break the internet" Kronauge said.

There are three ways for customers to get the retro product: As a gift when they buy limited-edition "Stranger Things" Coke and Coke Zero Sugar glass bottles online starting Thursday, through "Stranger Things" themed pop up vending machines that will be in cities this summer, or as a giveaway when they purchase a gift or ticket at the World of Coca-Cola in Atlanta. Coca-Cola has produced under 500,000 of the New Coke 12-ounce cans, and expects to run out quickly.

The company is also selling "Stranger Things" themed cans of regular Coke and Coke Zero Sugar, and is releasing a remake of a 1980s ad featuring characters from the show.

For Netflix, the partnership is a way to advertise in new channels.

"We exist on the internet, and Coke has a century of experience in building consumer products that are physical," Barry Smyth, Head of Global Partner Marketing at Netflix, told CNN Business. The streaming platform is also partnering with a number of other companies, including Lego, H&M, Schwinn and Baskin-Robbins, to promote the upcoming season.

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2019-05-21 14:49:00Z
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Jamie Oliver restaurant chains collapse - BBC News

Celebrity chef Jamie Oliver has said he is "saddened" after his restaurant group went into administration, with 1,000 jobs being lost.

The group, which includes the Jamie's Italian chain, Barbecoa and Fifteen, has appointed KPMG as administrators.

In total, 25 restaurants are affected by the move, 22 of which are from the Jamie's Italian chain.

Mr Oliver, who put in £4m cash this year, said: "I appreciate how difficult this is for everyone affected."

Following the appointment of administrators, all but three of the group's 25 eating establishments have closed. Two Jamie's Italian restaurants and Jamie Oliver's Diner at Gatwick Airport will continue to trade in the short term.

"The group had recently undertaken a process to secure additional investment into the business and, since the beginning of this year, Jamie Oliver has made available additional funds of £4m to support the fundraising," said the administrators in a statement.

"However, with no suitable investment forthcoming and in light of the very difficult current trading environment, the directors resolved to appoint administrators."

Jamie Oliver's Fifteen Cornwall at Watergate Bay, which operates under a franchise, is unaffected. The international restaurants trading as Jamie's Italian, Jamie's Pizzeria and Jamie's Deli will also continue to trade as normal.

'Passion'

Mr Oliver added: "I would also like to thank all the customers who have enjoyed and supported us over the last decade, it's been a real pleasure serving you.

We launched Jamie's Italian in 2008 with the intention of positively disrupting mid-market dining in the UK High Street, with great value and much higher quality ingredients, best-in-class animal welfare standards and an amazing team who shared my passion for great food and service. And we did exactly that."

Notices have appeared in the windows of the 22 branches which have already closed.

The Unite union said the development was a "devastating blow for the chain's hardworking and loyal workforce".

"Restaurants are not being helped by the current economic uncertainty, although those businesses like Jamie Oliver's that dashed for expansion in recent years seem particularly precarious. As ever, it is the workers at the restaurant and in the supply chain who bear the heavy cost of boardroom decisions."

The union also asked for assurances assurances that staff will be "protected and paid all the money they're owed, including wages, holiday and redundancy".

Fame

Mr Oliver is known for his Naked Chef books and TV shows, broadcast in dozens of countries, after first being shown in the UK 20 years ago.

He has also campaigned for healthier eating, including in school meals.

His chain is the latest victim of a tough trading environment on the UK High Street.

Earlier this year, cafe chain Patisserie Valerie fell into administration, and 70 outlets closed, with the loss of 920 jobs, although 96 shops were saved.

Other mid-market chains that have struggled in recent years have included Byron Burger, Prezzo and Carluccio's.

Mr Oliver's business has faced difficulties over the past two years, with a number of Jamie's Italian and Barbecoa restaurants shutting.

In 2017, he closed the last of his Union Jacks restaurants and also shut his magazine Jamie, which had been running for almost 10 years.

In December of that year the chef also put £3m of his own money into his restaurant businesses.

Simon Mydlowski, a partner at law firm Gordons and an expert in the hospitality industry, said Jamie's had failed to keep up with changing trends.

"To be successful in this sector you have to be constantly evolving - from the menus and the drinks choice, to the way you engage with customers."

"Faced with higher rent, rising food prices and increased competition, restaurants need a point of difference - it's no coincidence that smaller brands with the freedom and flexibility to keep things fresh are currently the ones performing well."

Have you been affected by this news? Please share your experiences by emailing haveyoursay@bbc.co.uk.

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https://www.bbc.com/news/business-48352026

2019-05-21 14:26:15Z
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Wall Street bounces as Huawei reprieve sparks rally - Investing.com

© Reuters. Traders work on the floor at the NYSE in New York

By Shreyashi Sanyal

(Reuters) - U.S. stock indexes rose in a broad-based rally on Tuesday, as Washington's decision to temporarily ease curbs on China's Huawei Technologies allayed concerns over a further escalation in trade war between the two countries.

Chipmakers, which bore the brunt of Monday's sell-off, rose after the United States granted the Chinese telecoms equipment maker a license to buy U.S. goods until Aug. 19.

The Philadelphia Semiconductor Index gained 1.61% and was on track to end a three-day slump. Companies that have been supplying to Huawei including Intel Corp (NASDAQ:), Qualcomm (NASDAQ:) Inc, Xilinx Inc (NASDAQ:) and Broadcom (NASDAQ:) Inc rose between 1% and 2%.

The broader technology sector rose 1.08%, the most among the 11 major S&P sectors trading higher.

"The easing up on Huawei is being seen as a sign that while the United States and China are unhappy with each other, neither side wants to burn the negotiation bridge at the moment," said Connor Campbell analyst at Spreadex in London.

U.S. President Donald Trump added Huawei to a trade blacklist last week, leading several companies to suspend business with the world's largest telecom equipment maker and triggering fears that the decision could deeply impact the global technology sector.

Reuters reported on Sunday that Alphabet (NASDAQ:) Inc's Google would stop providing Huawei access to its proprietary apps and services. But Huawei said on Tuesday it was working closely with the U.S. company to resolve the restrictions.

Wall Street has been impacted by mounting concerns about a prolonged trade war, with the S&P 500 set to post its worst monthly decline since the December sell-off. The benchmark index is trading 3.3% below its all-time high hit earlier in May.

"This is a pure case of cautiousness and we're stuck in a trading range. The recent behavior is of indecisiveness," Peter Cardillo, chief market economist at Spartan Capital Securities in New York, said.

At 9:49 a.m. ET the was up 137.73 points, or 0.54%, at 25,817.63. The S&P 500 was up 19.20 points, or 0.68%, at 2,859.43 and the was up 67.04 points, or 0.87%, at 7,769.41.

Investors also focused on earnings reports from a handful of retailers, which proved to be disappointing.

Home Depot Inc (NYSE:) shares dipped 0.5%, the most on the Dow, after the home improvement chain reported its slowest growth in quarterly same-store sales in at least three years.

Kohl's Corp plunged 12.4%, the most among S&P 500 companies, after the department store operator cut its full-year profit forecast and reported quarterly same-store sales and profit that missed expectations.

Rival J.C. Penney Co Inc fell 7.4% after the company reported a bigger-than-expected fall in quarterly comparable-store sales.

Advancing issues outnumbered decliners by a 3.78-to-1 ratio on the NYSE and by a 2.78-to-1 ratio on the Nasdaq.

The S&P index recorded 21 new 52-week highs and four new lows, while the Nasdaq recorded 30 new highs and 29 new lows.

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2019-05-21 14:08:00Z
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Tech stocks are feeling the pain but may emerge better off after trade war - CNBC

Robert Neely prepares to load a silicon wafer machine in a clean room at the Texas Instruments semiconductor fabrication plant in Dallas, Texas, U.S., on Tuesday, June 16, 2009. Texas Instruments Inc., the second-largest U.S. semiconductor maker, reported sales and profit that beat analysts' estimates on stronger demand for chips used in mobile phones and communications networks in China. (Photo by Jason Janik/Bloomberg via Getty Images)

Jason Janik | Bloomberg | Getty Images

Technology stocks are a casualty of the trade war, but analysts say there's a longer-term chance some companies might emerge stronger, depending on terms of any deal between the U.S. and China.

For now, no deal is in sight and no talks seem to be set. Tech stocks are reacting to the trade concerns and White House and Commerce Department actions against China telecom company Huawei that would bar it from buying U.S. components. Tech stocks bounced Tuesday, after the Commerce Department said it would grant some temporary exceptions to the export blacklist against Huawei.

The biggest tech casualties have been chipmakers, with the Philadelphia semiconductor index, SOX, down 13.5% this month. Other companies have also been hit, like Apple, which is off 8.8% for the month as investors worry it could be hurt by Chinese retaliation and negative sentiment among Chinese consumers.

The Commerce Department said it would grant a temporary license for U.S. exports to Huawei and dozens of its affiliates, giving some suppliers and customers a 90-day reprieve.

Analysts expect China to respond to the Huawei action by increasing its focus on building out its own semiconductor supply chain, but that is a longer-term solution. In the near term, there is concern China will find ways to retaliate against companies that operate in China.

"Part of what this is all about is trying to keep our intellectual property safe. It's not easy to say, 'I'm going to be a manufacturer of chips.' The process to build some of these things takes decades to get there," said Dan Niles, founding partner of AlphaOne Capital Partners. "If you can't steal it ... or if you can't force U.S. companies into a joint venture, it's much harder to get up the curve quickly."

Analysts note that some companies were hit harder than they deserved, but the chip group had been hitting highs, even with negative earnings outlooks just weeks ago. The VanEck Vectors Semiconductor ETF hit an all-time high on April 24. Since May 1, it was down 12.9% but is still up 16% for the year.

"We've said very consistently that we're negative on semiconductors. That hasn't changed," said Niles. Short term, companies would see an earnings hit if the U.S. sticks with its clamp-down on Huawei. Niles said investors have to assess whether the stocks should have been priced at such high levels in the first place.

"The way I explain it is you should be able to take some short-term pain for the longer-term gain it brings to the U.S.," said Niles.

"This is a good thing from a long-term perspective. ... China has been brilliant in all of this, for 20 years, they've gotten everything they wanted. They made our companies work with them in joint ventures. They made U.S. companies team up so they could learn from the U.S. companies. They've been masterful with this. The U.S. fell down on the job. We're trying to go from a position of weakness," he said.

Analysts also say the talks do not appear to be going well and intellectual property is an area that's difficult to tackle.

"I think it's going to be a long shot that you're going to fix all the problems with China in one trade deal," said Lori Calvasina, chief U.S. equities strategist at RBC. "Everybody agrees that the business community wants things to be better with China, but it just doesn't seem like we're heading in that direction at the moment. The goals are worthy. I don't know that we have a magic wand that's going to make all the problems go away."

Buying opportunity?

Calvasina said software was also hit hard Monday, even though it is less exposed to trade issues. She said it appears investors were taking profits there, since it is an overcrowded space and high priced. Software was down 1.3% and tech hardware was off 2.9%, while semiconductors were down 3.9% Monday

"In the short term, you're [semiconductors are] going to have to go through some pain," Niles said. "Are they going to go out of business? Absolutely not. If this continues, will Huawei go out of business? Yes they will." The U.S. previously took similar action against Huawei rival ZTE, but later reversed it.

Wedbush tech analyst Dan Ives said he's been overweight technology and he sees the sharp decline in semiconductors as a buying opportunity. "In my opinion, the Street is baking in somewhere between a middle to worst case scenario with some of these names," he said. Ives said if there are signs a deal is coming when President Donald Trump and China President Xi Jinping attend the G-20 summit, that could create a buying opportunity.

"Right now, the bark is worse than the bite, and that's why we'd be a buyers of these names. On the semiconductor side, the ones that stick out continue to be ones that are exposed to 5G," Ives said.

B. Riley FBR analyst Craig Ellis pointed to 5G companies like Qorvo, Skyworks, Xilinx, Qualcomm, Broadcom and Analog Devices. But in a note he said Marvell had been more resilient last week because its customers include Nokia and Samsung, and not Huawei. But Marvell was down 3.9% Monday, as the whole group was sold.

Niles said he expects investors to be more discerning, viewing the Huawei-connected names differently.

Calvasina said the chip stocks ran up on optimism for a trade deal as a group during the months of negotiations.

"I think they deserve what they're getting," she said.

"The reality is either that the talks really did break down or they were not as advanced as we were led to believe. The reasons semis rallied so hard was expectations for a deal, she said. "I do think it makes sense to give back some of the gains."

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https://www.cnbc.com/2019/05/21/tech-stocks-are-feeling-the-pain-but-may-emerge-better-off-after-trade-war.html

2019-05-21 12:01:23Z
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JC Penney Continues to Hemorrhage - WJON News

PLANO, Texas (AP) -- Losses are widening at J.C. Penney and sales are falling after the retailer shed its furniture and major appliance businesses.

Same store sales tumbled 5.5% and shares fell by about as much Tuesday.

The company on Tuesday reported a loss of $154 million in its first quarter, or 48 cents per share. Losses, adjusted for one-time gains and costs, came to 46 cents per share. That's worse than the per share loss of 39 cents Wall Street was expecting, according to a survey by Zacks Investment Research.

The Plano, Texas-based company's revenue was $2.56 billion, down 5.6%.

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2019-05-21 12:02:00Z
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