Fed chairman: Coronavirus could hurt the global economy - CNN

"We are closely monitoring the emergence of the coronavirus, which could lead to disruptions in China that spill over to the rest of the global economy," Powell said in his prepared testimony before the House Financial Services Committee, where he is set to deliver his semiannual report to Congress. He will testify again before the Senate Banking Committee at 10:00 am ET on Wednesday.

The outbreak of the coronavirus, which has now killed more than 1,000 people, has added uncertainty to the global outlook -- and the US economy -- as companies have shuttered plants and shifted supply chains to contain spread of the infectious disease.

In late January, Powell described the outbreak as a "very serious issue," but at the time, he noted the virus was still in its early stages and it remained uncertain how far it would spread and what the macroeconomic effects would be.

Holding rates steady

Powell spent last year guiding the Fed to help buffer the US economy from turbulent trade tensions between the United States and China. The trade war led to weakness in the manufacturing sector, hurt business investment and slowed global growth.

The Fed slashed interest rates three times last year -- in July, September and October -- to a range of between 1.25% and 1.5%. Since then, Powell has signaled the central bank plans to take a wait-and-see approach for this year, a stance he once again reinforced in his testimony to lawmakers.

"The current stance of monetary policy will likely remain appropriate," said Powell. Adding, "If developments emerge that cause a material reassessment of our outlook, we would respond accordingly."

In his testimony, Powell sought to thread the needle of sending a reassuring message that the US economy is still in "a good place," but that policymakers would act as needed to continue the longest-running expansion on record, now in its 11th year.

Low unemployment, but a ballooning deficit

The Fed chairman has routinely pointed to the country's record low unemployment rate as a benefit to low-and middle-income families, who have been among the last to reap rewards from the economic expansion. He pointed to higher wages for those communities, particularly those with lower-paying jobs.

Even so, Powell cautioned that the country continues to face challenges, including drawing in more workers into the labor force, boosting productivity and reconciling with a ballooning federal deficit.

The renewed warning by Powell to Congress to get the nation's fiscal house in order comes weeks after the nonpartisan Congressional Budget Office released its latest report, projecting that the deficit would widen over the coming decade, reaching a total of $1.7 trillion in 2030.

"Putting the federal budget on a sustainable path when the economy is strong would help ensure that policymakers have the space to use fiscal policy to assist in stabilizing the economy during a downturn," said Powell. "A more sustainable federal budget could also support the economy's growth over the long term."

With interest rates at historic lows, the Fed's ammunition to rescue the economy is diminished, requiring fiscal policies by Congress to help offset any economic weakness.

Powell's testimony comes a day after the White House released President Donald Trump's fiscal 2021 budget blueprint, which calls for deep cuts in safety net programs and projects a balanced budget by 2035 assuming the economy returns 3% economic growth annually.

That's significantly higher than what most economists and the Federal Reserve forecast.

Let's block ads! (Why?)

https://news.google.com/__i/rss/rd/articles/CBMiWWh0dHBzOi8vd3d3LmNubi5jb20vMjAyMC8wMi8xMS9lY29ub215L2ZlZGVyYWwtcmVzZXJ2ZS1jaGFpcm1hbi1wb3dlbGwtZWNvbm9teS9pbmRleC5odG1s0gFdaHR0cHM6Ly9hbXAuY25uLmNvbS9jbm4vMjAyMC8wMi8xMS9lY29ub215L2ZlZGVyYWwtcmVzZXJ2ZS1jaGFpcm1hbi1wb3dlbGwtZWNvbm9teS9pbmRleC5odG1s?oc=5

2020-02-11 13:41:00Z
52780603554697

Fed’s Powell says risks to the U.S. economy remain, particularly from the coronavirus - MarketWatch

Some of the forces that held down U.S. economic growth last year have eased, but risks to the outlook remain, particularly from the coronavirus, Federal Reserve Chairman Jerome Powell said Tuesday.

“We are closely monitoring the emergence of the coronavirus, which could lead to disruptions in China that spill over to the rest of the global economy,” Powell said, in testimony prepared for a House Financial Services Committee hearing later Tuesday.

The Fed’s report to Congress on monetary policy noted fragility in China’s corporate and financial sector that could leave it vulnerable to an adverse shock.

Read : Fed concerned about world’s second-largest economies

Earlier Tuesday, Tedros Adhanom Ghebreyesus, the director general of the World Health Organization, said coronavirus is “a grave threat for the rest of the world” amid some signs the rate of infection may be slowing.

Although the semi-annual hearing on Fed monetary policy doesn’t start until 10 a.m., the House panel decided to release the Fed chairman’s testimony a few hours early.

Worried about the health of the economy, the U.S. central bank cut interest rates by a quarter point at three successive meetings last fall, bringing its benchmark rate down to a range of 1.5%-1.75%.

These fears have eased somewhat. Over the past two policy meetings in December and January, Fed officials have left the key policy rate unchanged.

Powell said the Fed was able to hold policy steady over the past 12 weeks because some uncertainties surrounding trade had diminished recently and there were some signs that global growth “may be stabilizing.”

Fed officials believe the current accommodative stance of policy is appropriate to support growth and push inflation up to the central bank’s 2% target, Powell said.

If incoming data back up this belief, the current stance of monetary policy will remain appropriate, Powell said.

But things could change.

“If developments emerge that cause a material reassessment of our outlook, we would respond accordingly” Powell said.

Roberto Perli, a former Fed staffer and now a fellow at Cornerstone Macro, said Powell’s language about monitoring the coronavirus significantly lowers the bar for a rate cut.

Financial markets think the Fed will cut its benchmark rate in July, according to the CME Group’s FedWatch tool. Other economists think the Fed will remain on hold throughout 2020.

Over the last six months of 2019, the U.S. economy appeared to be growing at a moderate rate, and the labor market strengthened further, Powell said. The government’s initial reading of first-quarter GDP won’t come until the end of April.

While consumer spending moderated toward the end of the year, “fundamentals supporting household spending remain solid,” Powell said. Consumer spending has been the main driver of economic growth over the past year, as manufacturing has stumbled and business investment dried up due in part to uncertainties related to the Trump administration’s trade policies.

Overall inflation, based on the price index for personal consumption expenditures, was up 1.6% over the past 12 months ending in December, well below the Fed’s 2% target.

“Over the next few months, we expect inflation to move closer to 2%,” Powell said, as some low readings from early last year drop out of the 12-month calculation.

If the economy stumbles, with the Fed’s benchmark rate already so low, it will be important for fiscal policy to help support the economy, Powell told lawmakers.

He urged Congress to put the federal budget on a more sustainable path while the economy remains healthy.

The Congressional Budget Office recently forecast deficits above $1 trillion over the next ten years.

The recent reduction in interest rates has benefitted the stock market. The Dow Jones Industrial Average DJIA, +0.60%   is up 738 points, or 2.6% so far this year.

Let's block ads! (Why?)

https://news.google.com/__i/rss/rd/articles/CBMiemh0dHBzOi8vd3d3Lm1hcmtldHdhdGNoLmNvbS9zdG9yeS9mZWRzLXBvd2VsbC1zYXlzLXJpc2tzLXRvLXVzLWVjb25vbXktcmVtYWluLXBhcnRpY3VsYXJseS1mcm9tLXRoZS1jb3JvbmF2aXJ1cy0yMDIwLTAyLTEx0gFPaHR0cHM6Ly93d3cubWFya2V0d2F0Y2guY29tL2FtcC9zdG9yeS9ndWlkLzM2REVGQUI0LTRDNEUtMTFFQS1CQUU2LTMyOUQzNDIzNjUxNg?oc=5

2020-02-11 13:30:00Z
52780603554697

Judge approves $26 billion merger of T-Mobile and Sprint - CNBC

Shares of Sprint soared Tuesday after a U.S. District judge ruled in favor of its $26 billion deal to merge with T-Mobile.

The stock was up 73% in premarket trading. It had risen after hours Monday after The Wall Street Journal reported the judge was expected to rule in favor of the deal. Shares of T-Mobile were up more than 9% before markets opened.

The ruling clears one of the final hurdles for the deal, which still can't close until the California Public Utilities Commission approves the transaction.

Attorneys general from New York, California, Connecticut, Hawaii, Illinois, Maryland, Michigan, Minnesota, Oregon, Wisconsin, Massachusetts, Pennsylvania, Virginia and D.C. originally brought the lawsuit to block the deal following approval from the Justice Department of Federal Communications Commission. The states had argued that combining the No. 3 and No. 4 U.S. carriers would limit competition and result in higher prices for consumers. The companies had argued their merger would help them compete against top players AT&T and Verizon and advance efforts to build a nationwide 5G network.

In a statement following the ruling, New York Attorney General Letitia James, who helped led the states' push, said the states "disagree with this decision wholeheartedly, and will continue to fight the kind of consumer-harming megamergers our antitrust laws were designed to prevent." She called the ruling and called it a "loss" for Americans who rely on wireless networks and said the states will review their options, including a potential appeal.

"From the start, this merger has been about massive corporate profits over all else, and despite the companies' false claims, this deal will endanger wireless subscribers where it hurts most: their wallets," James said.

California Attorney General Xavier Becerra, who also led the states' efforts, said in a statement, "Our fight to oppose this merger sends a strong message: even in the face of powerful opposition, we won't hesitate to stand up for consumers who deserve choice and fair prices. We'll stand on the side of competition over megamergers, every time. And our coalition is prepared to fight as long as necessary to protect innovation and competitive costs."

T-Mobile and Sprint agreed to certain concessions to the government before the agencies cleared the deal. The companies told the FCC they would deploy a 5G network covering 97% of the U.S. population within three years of closing the deal. Sprint also agreed to sell Boost Mobile, Virgin Mobile and other prepaid phone businesses, as well as some of its wireless spectrum to Dish Network for $5 billion before gaining approval from the Justice Department.

FCC Chaitman Ajit Pai said in a statement that he was "pleased" with the court's ruling and that the merger "will help close the digital divide and secure United States leadership in 5G," calling it "a big win for American consumers."

In his decision filed Tuesday, Judge Victor Marrero wrote, "The resulting stalemate leaves the Court lacking sufficiently impartial and objective ground on which to rely in basing a sound forecast of the likely competitive effects of a merger."

The judge laid out three points on which the court rejected the states' objections to the merger. First, he said, they failed to convince the court that the merged party "would pursue anticompetitive behavior that, soon after the merger, directly or indirectly, will yield higher prices or lower quality for wireless telecommunications services."

Second, the court rejected that Sprint would be able to continue operating effectively as a wireless services competitor without the merger. 

"The Court is thus substantially persuaded that Sprint does not have a sustainable long-term competitive strategy and will in fact cease to be a truly national [mobile network operator]," the ruling said.

And finally, the court rejected the states' argument that Dish "would not enter the wireless services market as a viable competitor nor live up to its commitments to build a national wireless network."

If approved by the California commission, the deal would create a new wireless competitor in Dish, which has tried for years to become a provider, spending billions on airwaves it has stored away. Under a previous deal between Dish and the DOJ and FCC, the company had a deadline this year to build a narrowband internet of things (IoT) network connecting "people and sensors and microprocessors." If the deal clears, Dish will instead focus its efforts on building a 5G network covering 20% of the country by June 2022 and 70% of the U.S. population by June 2023, with the consequence of facing a $2.2 billion payment to the U.S. Treasury if it fails to live up to its commitments.

Shares of Dish were up 10% on the judge's ruling.

-CNBC's Alex Sherman contributed to this report.

This story is developing. Check back for updates.

Subscribe to CNBC on YouTube.

Let's block ads! (Why?)

https://news.google.com/__i/rss/rd/articles/CBMiX2h0dHBzOi8vd3d3LmNuYmMuY29tLzIwMjAvMDIvMTEvc3ByaW50LXNvYXJzLWFmdGVyLWp1ZGdlLWFwcHJvdmVzLWl0cy1tZXJnZXItd2l0aC10LW1vYmlsZS5odG1s0gFjaHR0cHM6Ly93d3cuY25iYy5jb20vYW1wLzIwMjAvMDIvMTEvc3ByaW50LXNvYXJzLWFmdGVyLWp1ZGdlLWFwcHJvdmVzLWl0cy1tZXJnZXItd2l0aC10LW1vYmlsZS5odG1s?oc=5

2020-02-11 13:17:00Z
52780602018683

Under Armour shares tank on sales miss, sees $50 million to $60 million hit from coronavirus - CNBC

An Under Armour store front is seen on November 04, 2019 in Sunrise, Florida.

Joe Raedle | Getty Images

Under Armour shares plummeted Monday morning after the company reported sales that missed analysts' estimates during the holiday quarter and issued a bleak outlook.

It said it is facing "ongoing demand challenges" for its athletic apparel and sneakers, and is calling for sales to be down a low-single digit percentage in fiscal 2020. That includes a high-single-digit drop in sales in North America, Under Armour said. Analysts had been calling for overall sales to be up 4.2% for the year.

Providing its 2020 outlook, Under Armour said it expects the coronavirus outbreak in China to lower sales by roughly $50 million to $60 million during the fiscal first quarter.

The company is also embarking on a restructuring plan, which among other things could entail not opening its New York City flagship location. It could take between $325 million and $425 million in estimated pretax charges this fiscal year tied to these efforts, it said, including about $225 million to $250 million related to not opening the store.

Under Armour shares sank as much as 17% in premarket trading on the news.

Here's how Under Armour did for the quarter ended Dec. 31, compared with what analysts were expecting, based on a poll by Refinitiv:

• Earnings per share: 10 cents, adjusted, vs. 10 cents expected
• Revenue: $1.44 billion vs. $1.47 billion expected

Under Armour reported a net loss of $15.3 million, or 3 cents per share, compared with net income of $4.2 million, or a penny a share, a year ago. Excluding one-time items, Under Armour earned 10 cents a share during the fourth quarter, in line with analysts estimates, based on Refinitiv data.

Revenue grew slightly to $1.44 billion from $1.39 billion a year ago. But it was short of expectations for $1.47 billion.

Sales in North America were up 1.9% during the quarter and rose 9.8% in Asia-Pacific. Apparel sales were up 0.2% overall, while footwear revenue was up 10.3% and accessories sales grew 1.6%.

Under Armour has been struggling to grow sales for the past few years. The company reported its first quarterly loss in 2017, as momentum for the brand started to slow. It faces intense competition from the likes of Nike, Lululemon and Adidas in the U.S. It also is more reliant on wholesale partners, such as Kohl's, which analysts say has hurt Under Armour's business as those retailers have suffered.

Patrik Frisk notably took over as CEO from Under Armour founder Kevin Plank on Jan. 1. Plank remains executive chairman and brand chief.

As of Monday's market close, Under Armour's stock has fallen about 1.5% this year. The company has a market cap of about $9.2 billion.

Read the full earnings press release here.

Let's block ads! (Why?)

https://news.google.com/__i/rss/rd/articles/CBMiYWh0dHBzOi8vd3d3LmNuYmMuY29tLzIwMjAvMDIvMTEvdW5kZXItYXJtb3VyLXVhYS1yZXBvcnRzLWZpc2NhbC1mb3VydGgtcXVhcnRlci0yMDE5LWVhcm5pbmdzLmh0bWzSAWVodHRwczovL3d3dy5jbmJjLmNvbS9hbXAvMjAyMC8wMi8xMS91bmRlci1hcm1vdXItdWFhLXJlcG9ydHMtZmlzY2FsLWZvdXJ0aC1xdWFydGVyLTIwMTktZWFybmluZ3MuaHRtbA?oc=5

2020-02-11 12:10:00Z
52780603425419

Senators Slam Amazon Over 'Intolerable' Warehouse Conditions - HuffPost

HuffPost is now part of the Verizon Media family. We (Verizon Media) and our partners need your consent to access your device, set cookies, and use your data, including your location, to understand your interests, provide relevant ads and measure their effectiveness. Verizon Media will also provide relevant ads to you on our partners' products. Learn More

How Verizon Media and our partners bring you better ad experiences

To give you a better overall experience, we want to provide relevant ads that are more useful to you. For example, when you search for a film, we use your search information and location to show the most relevant cinemas near you. We also use this information to show you ads for similar films you may like in the future. Like Verizon Media, our partners may also show you ads that they think match your interests.

Learn more about how Verizon Media collects and uses data and how our partners collect and use data.

Select 'OK' to allow Verizon Media and our partners to use your data, or 'Manage options' to review our partners and your choices. Tip: Sign In to save these choices and avoid repeating this across devices. You can always update your preferences in the Privacy Centre.

Let's block ads! (Why?)

https://news.google.com/__i/rss/rd/articles/CBMiW2h0dHBzOi8vd3d3Lmh1ZmZwb3N0LmNvbS9lbnRyeS9zZW5hdG9ycy1sZXR0ZXItYW1hem9uLWplZmYtYmV6b3Nfbl81ZTQyMzVkZWM1YjZiNzA4ODcwNjVlNTXSAT9odHRwczovL20uaHVmZnBvc3QuY29tL3VzL2VudHJ5L3VzXzVlNDIzNWRlYzViNmI3MDg4NzA2NWU1NS9hbXA?oc=5

2020-02-11 10:42:00Z
52780602908462

Reports: Judge to Rule in Favor of Dreaded T-Mobile and Sprint Merger - Gizmodo

Sprint’s Marcelo Claure, left, and T-Mobile’s John Legere, right, at a House Commerce subcommittee hearing in February 2019.

Photo: Jose Luis Magana (AP)

U.S. District Judge Victor Marrero is set to allow the $26.5 billion T-Mobile and Sprint merger to go forward, clearing the path to merge the nation’s third and fourth-largest wireless carriers into a single behemoth that would rival Verizon and A&T, reports indicated on Monday night.

The New York Times and Wall Street Journal both wrote that Marrero is expected to rule against the attorneys general of 13 states and D.C. who are suing to block the merger on antitrust grounds, citing sources who have been briefed on the decision. That suit is the final legal obstacle between T-Mobile and the smaller, ailing Sprint finally being able to consummate their planned union, as antitrust officials at the Federal Communications Commission and Department of Justice have already signed off. Both papers reported that the verdict is expected to drop on Tuesday morning.

Advertisement

Allowing the merger to go through would drop the number of major carriers competing in the U.S. from four to three, for years at the very least. Under the terms of a deal with the DOJ, T-Mobile owner Deutsche Telekom would be forced to sell off wireless spectrum to Dish, while Sprint would have to do the same with Boost Mobile. This supposedly would create a replacement contender to fill the fourth spot, though the viability of Dish’s plans to create a competitive national 5G network have drawn extensive scrutiny. It will launch with around nine million customers, mostly from Boost Mobile, according to the Journal. Meanwhile, the merged titan, doing business as T-Mobile, will have over 100 million customers.

Companies routinely claim that mergers will allow them to offer more competitive pricing with vague assurances of increased efficiency. But research has shown the exact opposite is much more likely to happen: price increases from increased market power. These kind of outcomes can be plainly observed in industries from medical care to pay TV. (A ProPublica investigation found that many academic proponents of mega-mergers often receive huge sums of money from companies that stand to benefit from friendly testimony in anticompetition lawsuits.) Sprint and T-Mobile have both promised not to raise prices and to build a 5G network, and T-Mobile has launched low-cost plans in an effort to assuage critics. However, fewer mobile network operators in a country is associated with much higher prices and the two firms were already planning on building 5G networks.

State attorneys general involved in the lawsuit argued that the Sprint/T-Mobile merger will cost subscribers of both companies up to $4.5 billion annually. The FCC and DOJ both argued in favor of it in the suit, according to Ars Technica, saying a victory for the plaintiffs could block “substantial, long-term, and procompetitive benefits for American consumers.”

What isn’t clear at this point is whether the ruling is a total win for Sprint and T-Mobile or Marrero has implemented further conditions on the deal. Those could ultimately have some impact on the ultimate outcome for consumers.

Advertisement

As the Times noted, Sprint executive chairman Marcelo Claure and T-Mobile CEO John Legere built DC connections while lobbying for the deal. Claure hosted a fundraiser for Republican senator and net neutrality opponent Marsha Blackburn’s successful 2018 campaign, while Legere spent a suspicious amount of time and money ($195,000) at a D.C. hotel owned by Donald Trump.

Let's block ads! (Why?)

https://news.google.com/__i/rss/rd/articles/CBMiVWh0dHBzOi8vZ2l6bW9kby5jb20vcmVwb3J0cy1qdWRnZS10by1ydWxlLWluLWZhdm9yLW9mLWRyZWFkZWQtdC1tb2JpbGUtYW5kLTE4NDE1OTA0MDnSAVlodHRwczovL2dpem1vZG8uY29tL3JlcG9ydHMtanVkZ2UtdG8tcnVsZS1pbi1mYXZvci1vZi1kcmVhZGVkLXQtbW9iaWxlLWFuZC0xODQxNTkwNDA5L2FtcA?oc=5

2020-02-11 04:45:00Z
52780602018683

Judge Is Said to Rule for T-Mobile Merger With Sprint - The New York Times

The judge in a contentious lawsuit that tried to stop the long-in-the-works merger between T-Mobile and Sprint is planning to rule in favor of the deal, according to three people briefed on the matter.

The verdict, expected Tuesday, will come at the end of an unusual suit filed in June by attorneys general from 13 states and the District of Columbia. The challenge came after federal regulators gave their blessing to the deal, which would combine the nation’s third- and fourth-largest wireless carriers and create a new telecommunications giant to take on the two largest, AT&T and Verizon. The states argued that the combination of T-Mobile and Sprint would reduce competition in the telecommunications industry, lead to higher cellphone bills and place a financial burden on lower-income customers.

Judge Victor Marrero of United States District Court in Manhattan presided over the case. Final arguments took place last month.

None of the parties have read the ruling yet, the three people said, leaving open the possibility that the decision includes conditions or restrictions. Both companies are planning to make announcements on Tuesday, the people said. Shares in Sprint shot up more than 60 percent and T-Mobile stock rose about 10 percent in aftermarket trading.

The lawsuit was the final roadblock to the merger, which made steady progress through the approval process since it was announced in April 2018. If the judge’s ruling goes in favor of the two companies, the deal will create a new telecommunications giant, called T-Mobile, that will have more than 100 million customers.

T-Mobile and Sprint have long said the merger was crucial to their futures in an industry challenged by pricing wars that have undercut profits and stalled growth. By combining with Sprint, T-Mobile has said it would be able to accelerate its development of 5G, the next generation of cellular networks.

The deal is also important to Sprint, which has bled cash and subscribers in recent years. SoftBank, the Japanese conglomerate the controls Sprint, has been looking to raise cash for its newest tech investing fund.

The new company will be led by Mike Sievert, a T-Mobile executive who will take over for John Legere, the face of the company whose contract is up in April.

Mr. Legere, the flamboyant, social-media-savvy chief executive of T-Mobile since 2012, helped drive the merger, which won the approval of the Justice Department and the Federal Communications Commission last year. To get the nod from the government, T-Mobile and Sprint agreed to sell off significant portions of their businesses to the pay-television operator Dish Network as part of a plan to create a potential new major wireless company.

Marcelo Claure, the executive chairman of Sprint, became a close ally of Mr. Legere’s throughout the campaign to secure approval for the deal. Mr. Legere made numerous visits to both the Federal Communications Commission and the Justice Department. Mr. Claure hosted a fund-raiser for Representative Marsha Blackburn, a Tennessee Republican who was eventually elected to the Senate in November 2018.

Several lawmakers expressed misgivings over Mr. Legere’s Washington visits, noting the dozens of times that he and other T-Mobile executives stayed at the Trump International Hotel there. The companies have denied doing anything inappropriate to curry favor with federal officials.

The deal also represents a victory for Masayoshi Son, the billionaire entrepreneur and outspoken leader of SoftBank, which has recently come under pressure from the activist investor Elliott Management. SoftBank’s outsize investments in tech start-ups, including WeWork, have failed to deliver for investors, and Mr. Son has struggled to raise more cash for a new investment fund. He has been trying to unload Sprint for years.

Let's block ads! (Why?)

https://news.google.com/__i/rss/rd/articles/CBMiTGh0dHBzOi8vd3d3Lm55dGltZXMuY29tLzIwMjAvMDIvMTAvYnVzaW5lc3MvbWVkaWEvc3ByaW50LXRtb2JpbGUtbWVyZ2VyLmh0bWzSAVBodHRwczovL3d3dy5ueXRpbWVzLmNvbS8yMDIwLzAyLzEwL2J1c2luZXNzL21lZGlhL3NwcmludC10bW9iaWxlLW1lcmdlci5hbXAuaHRtbA?oc=5

2020-02-10 23:28:00Z
52780602018683