Best Buy misses quarterly same-store sales estimates - CNA

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Best Buy Co Inc reported a smaller-than-expected rise in quarterly same-store sales on Thursday, as the biggest U.S. consumer electronics retailer sold fewer video game consoles and other entertainment products.

FILE PHOTO: People wait in line to shop at Best Buy during a sales event on Thanksgiving day in Westbury, New York, U.S., November 22, 2018. REUTERS/Shannon Stapleton

29 Aug 2019 07:21PM

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REUTERS: Best Buy Co Inc reported a smaller-than-expected rise in quarterly same-store sales on Thursday, as the biggest U.S. consumer electronics retailer sold fewer video game consoles and other entertainment products.

Best Buy's overall same-store sales 1.6per cent in the second quarter ended Aug. 3. Analysts on average had expected a 2.15per cent increase, according to IBES data from Refinitiv.

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Revenue rose to US$9.54 billion from US$9.38 billion, a touch below expectations of US$9.56 billion.

The company also narrowed its full year sales forecast to a range of US$43.1 billion to US$43.6 billion, from a US$42.9 billion to US$43.9 billion range, citing planned further increases in U.S. tariffs on Chinese goods.

(Reporting by Uday Sampath in Bengaluru; Editing by Tomasz Janowski)

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2019-08-29 11:24:38Z
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Jack Ma, once proponent of 12-hour work days, now foresees 12-hour workweeks - The Washington Post

Aly Song Reuters Alibaba executive chairman Jack Ma, left, with Tesla chief executive officer Elon Musk in Shanghai on Thursday.

BEIJING — Jack Ma, the Chinese tech billionaire known for arguing in favor of a 12-hour work day, sees a future in which people will have to work only 12 hours a week.

The founder of e-commerce behemoth Alibaba said Thursday that technological advancements would enable people to live longer and work far fewer hours.

“Every technology revolution, people start to worry. In the last 200 years we have worried [that] new technology is going to take away all the jobs,” he said in a discussion in Shanghai on Thursday with Elon Musk, Tesla’s billionaire founder. Tesla is building an electric-vehicle factory in the city, and the two were on the stage at the World Artificial Intelligence Conference there. 

Ma has previously courted controversy with his endorsement of the “996” work practices prevalent in China’s tech industry, under which employees are expected to work 9 a.m. to 9 p.m., six days a week.

In remarks earlier this year, Ma said that the opportunity to work such hours was a “blessing” and that without this kind of working culture, China’s economy was “very likely to lose vitality and impetus.”

Another tech titan went further, declaring that the 996 culture was for slackers. Richard Liu, chief executive of rival e-commerce company JD.com, said he works “8116+8” — or 8 a.m. to 11 p.m. Monday to Saturday, then a mere eight hours on Sunday.

But speaking with Musk on Thursday, Ma said that in the future, people would be able to enjoy a much shorter workweek.

 “In the next 20 to 30 years, human beings will live much longer. Life science technology is going to make people live probably 100 or 120 years,” he said. “That may not be a good thing because you get your grandfather’s grandfather still working hard.”

But it didn’t matter, he said, as the world wouldn't need a lot of jobs.

 “I think people should work three days a week, four hours a day,” he said, citing previous technological leaps like the Industrial Revolution and the use of electricity as improving work-life balance. 

“The power of electricity is that we make people more time, so you can go to the karaoke in the evening, you can go to dancing parties in the evening,” he said in English.

“I think that because of artificial intelligence, people will have more time to enjoy being human beings. I don’t think we’ll need a lot of jobs,” Ma told Musk. “The jobs we need are [ones to] make people happier. People experience life, enjoy [being] human beings.”

[ In a workaholic China, the stressed-out find a refuge with monks and Sanskrit ]

China’s netizens were unimpressed.

“Ma has said previously that 996 was a blessing. How can he say now that people can work three days a week, four hours a day, and go to karaoke or dance parties in the evening,” asked one person using the nickname “Be a friend with time daily” on Weibo, the Chinese version of Twitter.

“Previously he talked in Chinese about 996. That’s for us. This time, he said ‘three days a week, four hours a day’ in English. That’s for foreigners.”

Another, using the name “Soda water,” used a Chinese saying that means two things don’t fit together: “Musk will find that this dialogue is like putting a donkey’s lips on a horse’s mouth.”

Liu Yang contributed to this article.

Read more

A year into the trade war, China learns to ride out Trump’s turbulence

Trump retaliates in trade war by demanding companies cut ties with China

Today’s coverage from Post correspondents around the world

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2019-08-29 09:26:31Z
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US futures turn higher after 'calm' trade comments from China - CNBC

U.S. stock index futures turned positive Thursday morning, after China said it wished to resolve its protracted trade dispute with the world's largest economy with a "calm" attitude.

At around 04:00 a.m. ET, Dow futures rose 184 points, indicating a positive open of more than 197 points. Futures on the S&P and Nasdaq were both slightly higher, reversing earlier losses.

When asked about its ongoing trade war with the U.S., China's commerce ministry reportedly said Thursday that it was opposed to escalating trade tensions.

The comments appeared to soothe investor concerns at a time when many are worried about the possibility of a global recession.

On Wednesday, the rate on the benchmark 30-year Treasury bond sank to an all-time low, while the U.S. yield curve inverted even further.

The closely-watched spread between the 10-year Treasury yield and the 2-year rate briefly fell to negative 6 basis points in the previous session. The move extended losses from earlier in the week, when the spread registered its lowest level since 2007.

A 10-year rate below the 2-year yield is viewed by fixed income traders as an important recession prognosticator, marking an unusual phenomenon as bondholders receive better compensation in the short term.

U.S. bond yields hovered marginally above record lows on Thursday morning.

Data, earnings

On the data front, the latest weekly jobless claims, a second reading of second-quarter GDP (gross domestic product) and advance economic indicators for July are all scheduled to be released at 8:30 a.m.

Pending home sales for July will follow slightly later in the session.

In corporate news, Toronto-Dominion Bank, Best Buy and Dollar General are among some of the companies expected to report earnings before the opening bell.

Dell, Marvell Tech and Workday are scheduled to release their latest quarterly results after market close.

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https://www.cnbc.com/2019/08/29/stock-market-wall-street-in-focus-amid-recession-fears.html

2019-08-29 06:33:12Z
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U.S. 30-year bond yields hit record low, curve inversion grows - Reuters

NEW YORK (Reuters) - U.S. Treasury debt yields fell on Wednesday, with 30-year yields setting all-time lows, as fears about a recession and trade tensions between China and the United States stoked unrelenting demand for low-risk government debt.

A specialist trader works at his station on the floor at the New York Stock Exchange (NYSE) in New York, U.S., August 2, 2019. REUTERS/Brendan McDermid

Inversion is spreading across the U.S. yield curve, where short-dated yields are running above long-dated ones, which has also unsettled investors as yield curve inversion often precedes a recession.

“A deeper inversion is sending a stronger statement that a meaningful slowdown is coming,” said Brian Rehling, co-head of global fixed income strategy at Wells Fargo Investment Institute in St. Louis, Missouri. “A recession is a possibility in the next 12 to 18 months, but it’s not a done deal.”

Investors added to their safe-haven holdings of Treasuries as UK Prime Minister Boris Johnson sought to limit parliament’s opportunity to derail his Brexit plan by suspending the House of Commons for around a month, starting in mid-September.

GRAPHIC: U.S. yield curve inversion - here.png

Treasury prices pared their gains as Wall Street rose, reversing earlier losses.

While some fund managers view Treasuries as expensive, they are hard pressed to make a case to sell them given the uncertain outcome of the trade developments between Beijing and Washington.

“It’s hard to see where the endgame is with the trade tensions,” said James Barnes, director of fixed income at The Bryn Mawr Trust Co. in Devon, Pennsylvania.

The Federal Reserve is also monitoring the trade tensions in its economic outlook.

Interest rates futures implied traders fully expect the U.S. central bank to lower key borrowing costs by at least a quarter point at its Sept. 17-18 policy meeting, following up on its first rate cut since 2008.

GRAPHIC: U.S. Fed's next rate cut? - here

Meanwhile, the Treasury Department sold $18 billion in two-year floating-rate notes and five-year fixed-rate debt to solid demand.

It will complete this week’s $113 billion of fixed-rate government note supply with a $32 billion sale of seven-year debt on Thursday.

In late Wednesday trading, the yields on 30-year government bonds were 1.939%, down 2.2 basis points from late Tuesday. They hit an all-time low of 1.905% earlier Wednesday.

The 30-year yield is below 3-month T-bill rates, which has not happened since 2007.

As for the rest of the yield curve, the spread on three-month T-bill rates over 10-year yields widened to as much as 55 basis points, a level not seen since March 2007, while the premium on 2-year yields above 10-year yields increased to as high as 6.5 basis points, according to Refinitiv and Tradeweb data.

GRAPHIC: Biggest monthly fall in 30-year USTs since 2011 - tmsnrt.rs/2zrV0MJ

Additional reporting from Dhara Ranasinghe in London; editing by Jonathan Oatis and Chris Reese

Our Standards:The Thomson Reuters Trust Principles.

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https://www.reuters.com/article/us-usa-bonds/u-s-30-year-bond-yields-hit-record-low-curve-inversion-grows-idUSKCN1VI2DF

2019-08-28 19:22:00Z
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Why record low bond yields could keep heading lower as market fears 'disaster scenario' - CNBC

Traders signal offers in the Ten-Year Treasury Note Options pit at the Chicago Board of Trade.

Scott Olson | Getty Images

Bond yields are heading south, and there appears to be no stopping them for now.

The benchmark 10-year Treasury note yield, which influences everything from business loans to home mortgages, has been hugging three-year lows and was at 1.45% Wednesday. That's below the 2-year yield of 1.5%, and the move has been signaling recession.

The 30-year Treasury bond yield fell to an all-time low 1.91% Wednesday as yields around the world, which move opposite price, slid to multi-year or record lows. U.S. rates followed a global move lower, with the Japanese 10-year yield falling to a new negative three-year low and the German 10-year bund yield sliding to its own record, minus-0.72%.

"This is one big trade," said Gregory Faranello, head of U.S. rates at Amerivet Securities. "The momentum and trends that are in place right now are pretty steadfast. There's nothing glaring to me that will change the dynamics right now. We're in the latter stages of the summer months. Liquidity is definitely an issue. When you look at it globally right now, it encompasses a lot of different, diverse things. Today we have the headline from the U.K.; you have this ongoing trade war, and this global yield structure just continues to unfold."

Strategists said the bond market has been caught between a number of forces and is now a vortex sucking in investors who have to buy yield, which keep getting lower as bond prices move higher. In the past several days, investors have begun to believe that there's a very good chance the trade wars between the U.S. and China could continue for a very long time, and possibly until after the presidential election.

Fear factors

The global economy is slowing, and increasingly there are warning signs that make it appear Europe could enter a recession. China's slowdown has sent a chill across emerging market economies, which have seen a decline in exports.

Then there is political uncertainty, which got even murkier in the U.K. on Wednesday, after Prime Minister Boris Johnson pushed back the reopening of Parliament until mid-October, limiting the amount of debate time and increasing the chances of a no-deal Brexit. Sterling fell and the 10-year gilt yield dropped to its lowest level in three years.

"The disaster scenario is if yields fall dramatically from here," said Michael Schumacher, director rates at Wells Fargo. "Hypothetically, if the trade situation intensifies, if maybe Hong Kong goes badly and Brexit seems like it results in a hard exit ... then what you probably get is a massive rally again in Treasurys."

"Anyone who is handing you a hard forecast in that scenario is throwing darts," he said. After the 10-year yield broke through the psychologically important 1.50% level Tuesday, Schumacher said investors are looking for the next target on the benchmark note at the record low it reached in the weeks after the U.K. voted for Brexit, or to leave the European Union.

"People seem to be fixated on 1.35%," he said.

For investors, he said a good place to hide might be in very short-term Treasurys. For instance, the 1-month Treasury bill was yielding 2.06%, well above other securities. "Why be a hero?" he said.

Many strategists do not expect U.S. bonds to follow the rest of the world into negative yields, but they concede it could happen. The other side of the falling yield story is that bond yields could quickly snap higher, if for instance there was significant progress in the trade situation. But strategists are skeptical that will happen any time soon.

"Clearly, the trade war is such a big piece of this and it remains so incredibly unpredictable. Most people feel like it's elevated to such an extent that it's highly unlikely to get anywhere," said Ralph Axel, rates strategist at Bank of America Merrill Lynch. He said people are wondering why China would sign a long-term deal with President Donald Trump ahead of the election.

Sinkhole of global yields

Another major factor driving yields lower is the fact that more than $16 trillion in bonds around the world now have negative yields, and the U.S. Treasury market has been a magnet for investors looking for yield, as well as safety.

Axel said he has a 1.25% target on the 10-year, and he also expects the 30-year yield to be at that level by the second quarter of next year.

Faranello said yields move lower because buying forces in more buyers as investors look to lock in yield. The question is will the consumer, who has been holding up the U.S. economy, begin to react to what's scaring markets.

"If you're a U.S. consumer, you see volatility in markets. You don't understand it. They see negative interest rates. You see the inverted yield curve, which consumers don't understand, and there's talk of recession," Faranello said. "This could be self-fulfilling at some point, and the Fed has to keep an eye on it."

Data in the next week could be important since it includes the monthly employment report next Friday and also ISM manufacutring and PMI, two indicators that have been signaling a slowdown in manufacturing

"The yield curve is telling us essentially that we're looking at zero percent GDP growth next year. That's what the front end of the curve would imply. The question is will the yield curve win out or will policy makers be able to support the data enough," Faranello said. "I have no idea how it's going to play out, but there's very incredible fear and focus on a recession."

Central banks behind the curve

Central banks around the world have been driving rates down as their economies slow, and the worry is that they are in a race to the bottom as they defend their currencies. Another worry is they don't have the ammunition they once had before the financial crisis since so many embarked on extraordinary easing efforts or already have super low rates. They also failed in the decade since the financial crisis to do much to spark inflation.

The Fed is widely expected to cut rates by a quarter point when it meets on Sept. 17 and 18.

"I think the Fed needs to go 50 [basis points]. The Fed, I think, has to change the tone globally. Heading into September, they need to hit it. They need to hit it 50. They need to change the tone and psychology of the market. Right now, we're in a vice," Faranello said.

Even before the Fed meets, the European Central Bank is meeting on Sept. 12, and it is expected to take action, including its already negative rate and possibly announcing asset purchases.

"We'll see what the ECB does. They have a lot of bad choices," Faranello said. "They're probably going to do several different things but the market is not convinced they have much power to turn the economy around now, and you're going to have to start thinking about fiscal boosts, but that's a sticky process when you have a [political] union. The big issue is central banks globally are just out of bullets, just at the same time tings are moving south...You feel like the central bank puts are less powerful.

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2019-08-28 18:30:12Z
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Daily Crunch: Peloton finances revealed - TechCrunch

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here.

1. Peloton files publicly for IPO

Peloton previously filed a confidential S-1, but now its IPO documents have been revealed publicly, showing that the fitness tech company brought in $915 million in revenue during its most recent fiscal year, with losses of $245.7 million.

Co-founder and CEO John Foley laid out a grand vision in the documents, writing that “Peloton is so much more than a Bike — we believe we have the opportunity to create one of the most innovative global technology platforms of our time.”

2. Anthony Levandowski, former Google engineer at center of Waymo-Uber case, charged with stealing trade secrets

If convicted, Levandowski faces a maximum sentence of 10 years and a fine of $250,000 — plus restitution — for each violation, according to the U.S. Attorney’s office.

3. Fitbit’s CEO discusses the company’s subscription future

At a small event in Manhattan this week, Fitbit laid out its future for the press. Tellingly, the event was far more focused on the company’s software play. (Extra Crunch membership required.)

Image via Getty Images /
franckreporter

4. US border officials are increasingly denying entry to travelers over others’ social media

The latest case saw a Palestinian national living in Lebanon and would-be Harvard freshman denied entry to the U.S. just before the start of the school year.

5. ThoughtSpot hauls in $248M Series E on $1.95B valuation

ThoughtSpot was started by a bunch of ex-Googlers looking to bring the power of search to data. Seven years later the company is growing fast, sporting a valuation of almost $2 billion and looking ahead to a possible IPO.

6. Google will shut down Google Hire in 2020

Google built Hire in an effort to simplify the hiring process, with a workflow that integrated into Google’s G Suite things like searching for applicants, scheduling interviews and providing feedback about potential hires.

7. Rwanda to phase out gas motorcycle taxis for e-motos

The government of Rwanda will soon issue national policy guidelines to eliminate gas motorcycles in its taxi sector in favor of e-motos.

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2019-08-28 18:09:52Z
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Peloton Is a Phenomenon. Can It Last? - The New York Times

As far as indoor cycling machines go, the $2,245 Peloton bike is nothing special. It has a sleek black and red frame. It has a big screen. It’s on Wi-Fi.

But a combination of aspirational infomercials (“This … is fitness evolved.”) and streaming classes taught by glamorous instructors has led Peloton to sell 577,000 of its bikes and treadmills in five years. Richard Branson is a fan. So are Jimmy Fallon, Kate Hudson and the Obamas.

Now as Peloton prepares to go public, the New York City-based company — which investors have privately valued at $4 billion — is facing questions about how long it can stay on top. Fitness is a historically faddish category. Exercise manias, from the Thighmaster to Tae Bo, have all come and gone. SoulCycle pulled its initial public offering entirely.

For Peloton, some troublesome signs have emerged. The company’s losses have more than quadrupled in the last year. It is embroiled in legal fights over music and patents. Competitors and copycats are moving in aggressively. And the boutique spinning craze has started to wane.

“Consumer fitness for at-home use has been through any number of cycles, going back to the 1990s when you had the ab roller,” said Michael Swartz, an analyst with SunTrust Robinson Humphrey.

Peloton, which made its offering prospectus public on Tuesday, declined to comment ahead of the I.P.O. In an interview last year, William Lynch, Peloton’s president, said the company had studied the fitness market’s “baggage” and determined that past crazes failed because they pushed empty claims about results.

Peloton, he said, is focused on bringing “serious fitness” into people’s homes in a “fresh and relevant” way with its growing library of classes. “We think if we do that, our members are going to stay with us,” he said.

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John Foley, a tech executive, founded Peloton in 2012.CreditJeenah Moon for The New York Times

Stage Race

Peloton was started, naturally, by a spin devotee.

John Foley, a tech executive who previously ran Barnes & Noble’s e-commerce business, founded Peloton in 2012 and became its chief executive. He was a fan of spin studios like SoulCycle and Flywheel, which became popular for their pumping music, camaraderie and energetic instructors.

But as a parent of two children, he found it difficult to get to spin class. So he created Peloton to bring SoulCycle’s vibe into people’s homes.

Mr. Foley, now 48, initially struggled to attract venture capital funding. For investors, scars lingered from Fitbit, the fitness tracking company that rode a wave of hype but stumbled under competition from Apple and Samsung.

“People were asking, ‘As an expensive hardware play, how big could that be?’” said Hans Tung, an investor at the venture capital firm GGV, which invested in Peloton last year.

In 2014, Peloton began shipping its internet-connected stationary bikes with a screen attached, charging $39 a month for access to streaming classes. Mr. Foley opened showrooms in shopping centers around the country, where people could test the bikes and the streaming classes.

Vicki Reed, a former head of marketing at Peloton who left in 2016, calls Peloton’s classes “exertainment,” meaning they are so engaging they distract people from what they’re doing.

“They were smart enough to grab it and go with it,” she said.

Sales quickly soared. Peloton’s spin instructors became stars, snagging endorsement deals and amassing social media followings. Lively online communities of riders sprang up, with people applauding one another’s workouts, gossiping about instructors and sharing fitness tips.

Jed Katz, a managing partner at Javelin Venture Partners who personally invested in Peloton in 2012, said he was surprised that a workout bike could “go viral so fast.” Peloton “became a ‘have to have’ product,” he said.

Crystal O’Keefe, 41, a Peloton owner in St. Louis, said she had made so many new friends through Peloton that she travels to New York several times a year for meet-ups. “It’s just a whole new family,” she said.

In its prospectus on Tuesday, Peloton revealed it lost $195.6 million in the fiscal year that ended June 30, compared with a loss of $47.9 million a year ago. Revenue rose to $915 million from $435 million over that same period.

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Peloton has sold 577,000 of its bikes and treadmills in five years.CreditRoger Kisby for The New York Times

New Competition

There are now at least a dozen rivals that sell Peloton-style “studio” bikes for as little as $199.

A brand called Echelon, which has raised funding from the investment firm of Jay Galluzzo, a co-founder of Flywheel, offers a blatant knockoff, down to a round black logo, for $899.99. Lou Lentine, president of Echelon Fitness Multimedia, acknowledged the similarities with Peloton but said Echelon’s models were more affordable.

In August, Equinox, the parent company of SoulCycle, also announced plans for its own streaming indoor cycling and treadmill classes.

And Icon Health & Fitness, which owns NordicTrack and ProForm, sells internet-connected bikes with $15 and $39 monthly subscriptions for digital classes called iFit. NordicTrack’s bikes and treadmills, which automatically adjust speed and incline as part of its workouts, incorporate more technology than Peloton’s, said Colleen Logan, vice president for marketing.

“Theirs is really like an old-fashioned spin bike. You just, rrr, rrr, twist it with your fingers,” she said.

Icon is increasingly orienting itself around Peloton-style digital subscriptions. The 42-year-old company expects to one day make more revenue from streaming classes than from workout equipment, said Chase Watterson, iFit’s head of marketing. The digital classes now have 287,436 subscribers.

Other start-ups are mimicking Peloton’s model of combining different kinds of fitness equipment with a monthly streaming subscription. The start-ups Hydrow and Crew are the “Pelotons of rowing,” FightCamp is “Peloton for boxing,” and Mirror offers workouts on an internet-connected mirror. The companies have raised more than $160 million in funding.

“You name the sport and someone is trying to be the Peloton of that,” Mr. Katz said. The “Pelotons of X” even have their own copycats: Echelon sells a Mirror-like product called “Echelon Reflect.”

Last year, Peloton sued Flywheel, which introduced a competing stationary bike and streaming service, accusing it of violating patents it holds for technology on its bike. The lawsuit has yet to be resolved.

David Chene, a managing partner at Flywheel’s owner, Kennedy Lewis Investment Management, said Peloton “failed to disclose” its pending litigation, noting that the Patent Trial and Appeal Board stated that Flywheel has a “reasonable likelihood of prevailing” in its arguments against three of Peloton’s patents.

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Peloton’s classes are “exertainment,” said a former company executive, meaning they are so engaging they distract people from what they’re doing. CreditDolly Faibyshev for The New York Times

Spin Fatigue

Bright-burning trends fade quickly. And spinning is not as hot as it was when Peloton got started.

In February, Randal Konik, an analyst with Jefferies, said an oversupply of spin studios in American cities had led some companies to reduce their prices. SoulCycle pulled its I.P.O. plans last year, citing market conditions. (The company declined to comment.) In May, Flywheel was taken over by creditors amid Peloton’s lawsuit over patent infringement.

To keep people from losing interest, Peloton has expanded into other areas, including a treadmill it began selling in 2018 for $3,995.

Last year, Peloton also offered subscriptions to digital classes for exercises like high-intensity interval training, barre, yoga, boot camp and meditation — no bike or treadmill required — for $19.49. It’s a bet that once someone enters the Peloton “ecosystem,” they will stay there for all their workouts. The company counts 102,000 digital-only subscriptions.

It’s hard to know just how many of its subscribers will stick with it. The company reported that less than 1 percent of its subscribers canceled each month on average. But half of its 511,000 subscribers have joined in the last year.

In the end, Mr. Tung said, “there are going to be copycats here and elsewhere, so it comes down to who can execute faster.”

For now, Peloton is in favor. The company can keep riding larger trends, like the boom in fitness spending and the popularity of social workouts, said Mr. Swartz of SunTrust Robinson Humphrey. Spinning may not be as hot as it was, but he said it “still has legs.”

That includes with Paul Gerhardt, 32, a tech entrepreneur in Oakland, Calif. He belongs to a group of 35,000 Peloton riders who do a rigorous style of classes called “Power Zone.” His bike is the first thing he sees when he starts his day and when he arrives home from work.

“Would I rather have the Peloton or Netflix?” he said. “I would rather have the Peloton.”

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https://www.nytimes.com/2019/08/28/technology/peloton-ipo.html

2019-08-28 16:10:00Z
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