Norwegian CEO Bjørn Kjos steps down - International Flight Network

A Norwegian Air Shuttle Boeing 737-800. Photo: © Andy Mitchell

Norwegian Air Shuttle founder and CEO Bjørn Kjos will step down effective immediately, the company has announced.

The 72-years old Kjos took over as CEO of the company in 2002 and is responsible for the rapid expansion in previous years. He transformed the 1993-established Norwegian regional carrier into Europe’s third biggest low-cost airline with subsidiaries in Sweden, the UK, Ireland and Argentina.

At the same time, the struggling carrier has announced a Q2 net profit of US$9.2 million and says it will cut several year-round long-haul routes to summer seasonal routes.

Norwegian has accumulated a debt of over US$500 million during the past years and has seen two failed takeover bids from British Airways parent IAG (International Airlines Group).

The airline originally started only with short-haul flights in Norway before Kjos took the role as CEO and transformed Norwegian into a rapidly expanding airline. Long-haul flights were started in early 2013 with flights from Oslo and Stockholm to New York and Bangkok. Norwegian and its various subsidiaries operate a combined fleet of 162 aircraft, most of them being Boeing 737-800 and the currently grounded 737 MAX 8 as well as 36 Boeing 787 Dreamliner aircraft.

Previously, the airline announced that it will close several crew bases to improve its overall operation. The Argentinian subsidiary is also not doing as well as expected and has been given a few more months to improve load factors and revenue, otherwise it would be shut down. 90 ordered Airbus A320neo family aircraft (ordered by Norwegian’s leasing company Arctic Aviation Assets) have also been put up for sale.

Jan-Hendrik is an aviation enthusiast from southern Germany, loves to travel the world and fly on as many aircraft as possible. His first flight was with a Condor 757 to Spain and has been into aviation ever since. He is most interested in aircraft deliveries and passenger experience (PaxEx).

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2019-07-11 09:22:33Z
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Avocado prices are skyrocketing, but it's not because of tariffs - USA TODAY

Kelly Tyko USA TODAY

Published 4:01 AM EDT Jul 11, 2019

Yes, it's not your imagination: Avocados are more expensive. But no, Trump's tariffs aren't to blame. 

But there are a few reasons the price of the popular fruit has spiked and is expected to continue to rise in the coming weeks.

For the first week of July, the wholesale prices of mid-sized avocados from Mexico were 129% higher than this time last year, said David Magaña, vice president and senior analyst at Rabobank based in Fresno, California.

“This is the highest price for this time of the year in at least a decade probably more,” Magaña said, noting the wholesale price was $84.25 for a 25-pound box compared to $37 the week of Independence Day 2018.

The increased wholesale price has been making its way to grocery stores.

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According to the most recent U.S. Department of Agriculture weekly retail price report, the average national price of a Haas avocado was $2.10 July 5, compared to $1.17 from the July 6, 2018 report.

Liz Garrison, a nurse in St. Louis Park, Minnesota, said she was shocked when the bag of six small avocados she normally buys at Trader Joe's was $6.50 this week. She's paid $2.50 for the same bag on past trips.

“I eat an avocado a day. That’s a lot to spend on something I’m eating so frequently,” Garrison said. 

Why are prices up?

Magaña outlined three main reasons fueling the increase.

"One is expanding global demands including U.S. demand, it just continues to grow,” he said. “Avocados are not only consumed now for Super Bowl or during Cinco de Mayo celebrations but year-round consumption.”

California's avocado season is coming to an end and was the smallest crop in more than a decade, he said.

“These high prices have to do with seasonal production in Mexico,” Magaña said. “It’s normally the lowest at this time of the year.”

Mexico is the top supplier of fruits and vegetables to the U.S. with $13 billion imported from the country last year. Almost 90% of avocados come from Mexico. 

“We’ve had the possibility of (Mexico) tariffs and the border closing and also a few weeks ago the probability of tariffs on all commodities coming from Mexico and we’ve observed a few price spikes,” Magaña said. “But now is only a supply and demand combination.”

How long will this last?

While prices may continue to increase over the next couple of weeks, the high prices may only be temporary.

“They should come down when the new Mexican production ramps up three, four weeks from now,” Magaña said.

Garrison hopes the high prices aren't long-term. After rationing her last avocado from last week's Trader Joe's haul, she ended up picking avocados at the nearby Cub Foods two for $4.

“If it’s something that’s short-lived like for a week or two, I wouldn’t mind spending the extra money,” she said.

Contributing: Paul Davidson

Follow USA TODAY reporter Kelly Tyko on Twitter: @KellyTyko

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2019-07-11 08:01:00Z
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Fed rate cut would ease pressure on China's central bank, analysts say - CNBC

Pedestrians walk past the People's Bank of China headquarters in Beijing, China, on Monday, Jan. 7, 2019.

Giulia Marchi | Bloomberg | Getty Images

A widely expected interest rate cut by the U.S. Federal Reserve would give China more breathing room in shoring up its slowing economy, some analysts said.

Overnight, markets took Fed Chairman Jerome Powell's comments during the first of a two-day Congressional testimony as affirming expectations for easier monetary policy in the U.S. The S&P 500 briefly topped 3,000 for the first time, and Treasury yields edged lower.

A looser monetary policy environment would reduce pressure on China's central bank to ease monetary policy. Amid trade tensions with the U.S., China's economy has struggled to gain momentum.

Private surveys released last week by Caixin showed services activity fell in June to its lowest since February, and the manufacturing sector contracted, after three months of expansion.

Among several measures to support the economy over the last several months, the People's Bank of China (PBoC) has made targeted attempts to lower financing costs to privately run enterprises, which account for the majority of the country's economic growth and employment.

"If the Fed does go ahead and cut rates, which I don't think is a given ... it simply means the PBoC has a little breathing room to see if the policies it has implemented have an impact on the real economy," Hannah Anderson, global market strategist at J.P. Morgan Asset Management, told CNBC on Thursday by phone.

The central bank will also face less pressure to allow the yuan to depreciate, making it easier to maintain a goal of keeping the exchange rate stable, she said, while higher Treasury prices would boost the paper value of the PBoC's holdings, increasing confidence.

The U.S. dollar index fell about 0.4% overnight amid Powell's comments. The People's Bank of China set the mid-point of the yuan mildly stronger against the greenback on Thursday at 6.8677.

Some analysts expect if the Fed cuts rates, it will go so far as to prompt China's central bank to take similar action.

"If (make that when) the Fed cuts rates then it's quite likely the PBOC will follow suit," Leland Miller, chief executive officer of China Beige Book, said in an email. The firm publishes a quarterly review of the Chinese economy based on a survey of more than 3,300 Chinese firms.

"But a benchmark interest rate cut is almost purely a symbolic move that won't affect most corporates," Miller said. He noted that "only a small subset of (state-owned enterprises) pay the benchmark rate, and most of those firms don't have to repay their loans anyway."

A Reuters poll released on Wednesday showed economists anticipate the People's Bank of China will keep its benchmark rate unchanged this year, while reducing banks' reserve requirement ratio twice in the second half of this year.

While easing monetary policy would help support growth, Beijing has also turned to fiscal tools such as tax cuts to boost the economy in the latest round of stimulus.

However, Larry Hu, chief China economist at Macquarie, said he does not expect the Chinese central bank to follow the Fed in cutting the benchmark interest rate, since economic data doesn't indicate enough of a slowdown to warrant a major policy change right now.

"In the US, it's significant for the Fed to cut rate(s)," Hu said in a note Wednesday. "But in China, stimulating infra(structure) and property ... is what really matters."

Instead, he anticipates policymakers will wait until the fourth quarter to possibly cut the benchmark rate, or take some similar action. China's benchmark 1-year lending rate has stayed the same since 2015, Hu noted.

Reuters' poll showed China's economic growth is expected to slow to a 29-year low of 6.2% this year, amid uncertainty from the ongoing trade dispute with the U.S.

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2019-07-11 07:01:56Z
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Defiant Fed boss says Trump won't make him quit - BBC News

The world's most powerful central banker has brushed off criticism from Donald Trump, saying he would not step down if the US president asked him to.

Federal Reserve chairman Jerome Powell told a hearing in Washington: "The law gives me a four-year term and I fully intend to serve it."

Mr Trump has criticised the Fed for not cutting interest rates.

But the president could soon get his wish, as Mr Powell also hinted at a cut soon to bolster the US economy.

Mr Powell is giving evidence to the House of Representatives Financial Services Committee, the first of two days of testimony on Capitol Hill.

He and the Fed have faced sustained criticism for not cutting rates, which Mr Trump blames for unnecessarily slowing the US economy. "Our Federal Reserve doesn't have a clue!" was one of the president's tweets.

Asked at Wednesday's hearing if Mr Powell would step down if requested, he replied "no". Pressed on whether he thought the president did not have the authority to remove him, he said: "What I have said is the law gives me a four-year term and I fully intend to serve it."

Disagreement over interest rate policy could ease, however, as Mr Powell signalled that a cut could come soon in remarks that sent the S&P 500 surging past 3,000 points for the first time and prompting a fall in the dollar.

He told the committee that "uncertainties about the outlook have increased in recent months". Although he expected continued US growth, he warned of economic weakness in other major economies, and a downturn in business investment driven by trade war worries.

"Concerns about the strength of the global economy continue to weigh on the US outlook," Mr Powell said.

"Apparent progress on trade turned to greater uncertainty, and our contacts in business and agriculture reported heightened concerns over trade developments."

The comments come despite last week's strong US jobs figures and an easing of trade tensions with China.

Analysis by Andrew Walker, BBC economics correspondent

As ever in a Federal Reserve Chair's remarks, there was no commitment to cut interest rates.

But the emphasis on economic uncertainties and below target inflation suggests an increasingly high probability that the Fed will do just that.

The concerns he raised included weaker momentum in some foreign economies which could affect the US. He also mentioned "government policy issues that have yet to be resolved".

His reference to trade developments was partly about the tension between the US and China. But there was one item on this list that isn't for the US to address- Brexit.

He didn't spell out the reasons, but the fact that he flagged it up indicates a concern that the UK's departure from the EU might have an adverse impact on the US economy.

The Fed has kept its current benchmark overnight interest rate in a range of between 2.25% and 2.50% since December. Mr Powell had first opened the door to a rate cut in comments made last month.

"Powell is setting it up, certainly for a July rate cut," said Jack Ablin, chief investment officer at Cresset Capital.

And Briefing.com analyst Patrick O'Hare said Mr Powell's comments "gave the market what it was looking for".

The financial markets are indicating that the Fed at its 31 July meeting will cut interest rates by 25 basis points, although some analysts have seen the possibility of a larger cut.

His appearance on Capitol Hill comes at a sensitive time for both the Fed and Mr Powell personally, with President Donald Trump lashing out in a series of tweets for not cutting interest rates and needlessly slowing the economy.

At the same time, some blame Mr Trump's own policies, in particular higher tariffs, and his unpredictable approach, for increasing the economic risks.

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2019-07-10 16:07:30Z
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S&P 500 hits 3,000 as Powell's comments raise rate cut bets - One America News Network

Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., July 1, 2019. REUTERS/Brendan McDermid

July 10, 2019

By Medha Singh

(Reuters) – The benchmark S&P 500 briefly crossed the 3,000 points mark for the first time on Wednesday, as bets for a sharp interest rate cut later this month were boosted by Federal Reserve chairman Jerome Powell’s dovish comments.

The Nasdaq and the Dow Jones Industrials also hit all-time highs after Powell said the central bank stands ready to “act as appropriate” to support record U.S. economic growth.

Gains of near 1% each in Amazon.com, Apple Inc and Facebook Inc also lifted the Nasdaq and the S&P.

“Investors already got what they wanted when Powell’s statement was released. They got news that the Fed was ready to cut (interest rates) in July,” said Michael Antonelli, market strategist at Robert W. Baird in Milwaukee.

“What the bulls are really hoping for is that this is just a growth scare. That the Fed steps in with an insurance cut in July and that’s it, so the economy can continue at its ‘muddle-along’ pace of growth.”

Alluding to the strong jobs data that tempered hopes of a sharp rate cut at the end of the month, Powell said the report did not fundamentally change the central bank’s outlook and that there is important economic data before the meeting.

Traders raised the chances of a 50 basis point reduction to 23% following the comments, according to the CME Group’s FedWatch tool. They had nearly abandoned hopes of an aggressive reduction while still expecting the first U.S. rate cut since the financial crisis at the July 30-31 meeting.

Investors will now parse minutes from the Fed’s June policy meeting when it will be released at 2 p.m. ET.

At 11:06 a.m. ET, the Dow Jones Industrial Average was up 71.72 points, or 0.27%, at 26,855.21, the S&P 500 was up 9.57 points, or 0.32%, at 2,989.20. The Nasdaq Composite was up 37.25 points, or 0.46%, at 8,178.98.

Nine of the 11 major S&P sectors were higher, with energy, technology and communication services leading the gainers.

Energy stocks benefited from a jump in oil prices as U.S. crude inventories shrank more than expected and major producers evacuated rigs in the Gulf of Mexico ahead of an expected storm.

Shares of rate-sensitive banks retreated 0.89% after Powell’s comments. The financial sector shed 0.3%.

Generic drugmaker Mylan NV’s shares fell 4% after rival Amneal Pharmaceuticals Inc cut its 2019 core earnings forecast.

Advancing issues outnumbered decliners by a 1.76-to-1 ratio on the NYSE and by a 1.04-to-1 ratio on the Nasdaq.

The S&P index recorded 63 new 52-week highs and one new low, while the Nasdaq recorded 78 new highs and 28 new lows.

(Reporting by Medha Singh, Manas Mishra and Shreyashi Sanyal in Bengaluru; Editing by Sriraj Kalluvila)

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2019-07-10 15:45:00Z
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Oil Jumps On Hefty Crude Draw | OilPrice.com - OilPrice.com

The Energy Information Administration reported a huge oil inventory draw of 9.5 million barrels for the week to July 5, confirming and even exceeding the American Petroleum Institute’s estimate of an 8.13-million-barrel draw.

Today’s figure follows an estimated a 1.1-million-barrel draw in oil inventories for the last week of June.

In gasoline, the EIA reported a draw of 1.5 million barrels for last week, which compares with a draw of 1.6 million barrels a week earlier. Gasoline production averaged 10.4 million bpd, which compares with 9.9 million bpd a week earlier.

In distillate fuels, the authority reported an increase in inventories of 3.7 million barrels, versus a build of 1.4 million barrels for the previous week. Production last week averaged 5.4 million bpd, compared with 5.3 million bpd a week earlier.

As oil producers begin to evacuate staff from their platforms in the Gulf of Mexico ahead of a possible storm, oil prices continued upwards, booking their fourth consecutive daily gain in a row. Among the factors driving them higher, in addition to the now chronic Middle Eastern tension, was the news Russia’s oil production had fallen near a three-year low in June, later supported by API’s inventory report.

On the flip side for prices, worry about the direction the global economy is taking continues as persistent as the fears of an open military conflict in the Middle East only with a negative effect on prices.

As demonstrated after OPEC’s announcement about an extension to the 1.2-million-bpd production cuts into 2020, traders are too concerned with global economic growth and, consequently, crude oil demand. For now, this concern is keeping a lid on prices despite the recent rally.

At the time of writing, Brent crude was trading at US$65.98 a barrel, with West Texas Intermediate at US$59.52 a barrel. Both were up by almost three percent from yesterday’s close. This week’s hurricane updates will probably act as additional tailwind for WTI in the next few days and maybe into next week.

By Irina Slav for Oilprice.com

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2019-07-10 14:42:41Z
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Dow Jones Industrial Average Jumps on Federal Reserve Chair Jerome Powell Testimony - Barron's

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The Dow Jones Industrial Average has erased pre-open losses to gain more than 100 points following the release of the text of Fed Chair Jerome Powell’s prepared comments.

The Dow has advanced 111.72 points, or 0.4%, to 26,895.21, while the S&P 500 has risen 0.5% to 2993.75, and the Nasdaq Composite has gained 0.7% to 8199.59.

In the prepared text, Powell notes that investment has slowed because of trade fears, that economic growth may have slowed, and that uncertainties that have emerged since the May meeting have made the economic outlook more uncertain. “Apparent progress on trade turned to greater uncertainty, and our contacts in business and agriculture report heightened concerns over trade developments,” the text says. “Growth indicators from around the world have disappointed on net, raising concerns that weakness in the global economy will continue to affect the U.S. economy.”

To outside observers, this looks like preparation for at least one rate cut in July, and more to follow.

“Looks like we are going to get the ‘Dove’ Scenario,” writes NatAlliance Securities’ Andrew Brenner.

“Powell’s prepared testimony struck a decidedly dovish cord with ‘uncertainties’ over trade and global growth SINCE the June FOMC meeting characterized as having dimmed the outlook,” writes BMO’s Ian Lyngen.”

And the market apparently agrees.

Markets Now is a quick take on what’s happening with the Dow Jones Industrial Average and other major market indexes. Don’t forget to check out the rest of Barron’s markets coverage.

Write to Ben Levisohn at Ben.Levisohn@barrons.com

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2019-07-10 15:07:00Z
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