Month: February 2018

Trump focuses on mental health and school security, but doesn’t mention gun laws, in speech on Florida shooting massacre

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asian stocks rise after US gains; many markets closed for Lunar New Year

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Gains on Wall Street lifted Asian equities on the last day of the week, but trading in the region was subdued with many markets shut for the Lunar New Year holiday.

Major US indexes extended their winning streak to five days on Thursday, with the Dow and S&P 500 breaking above their 50-day moving averages as bond yields hit fresh multiyear highs.

On the US data front, jobless claims increased by 7,000 to a seasonally adjusted 230,000, rebounding from a near 45-year low. The producer price index, meanwhile, rose 0.4 percent in January, in line with expectations.

Over in Asia, there’s set to be less activity than normal, with markets in China, Hong Kong, Taiwan, South Korea, Malaysia and Vietnam closed.

Japan’s benchmark Nikkei rallied 1.26 percent as the yen weakened. The currency earlier fetched 106.06 per dollar, hitting a new 15-month high for the second consecutive day, but then depreciated to 106.23 by 9:20 a.m. SIN/HK.

Utilities were among the biggest gainers, with Kansai Electric Power and Chubu Electric Power both jumping more than 4 percent.

Used-car dealer Idom soared 3.7 percent on news that it is partnering with Uber in Africa.

Japanese Prime Minister Shinzo Abe’s administration is expected to submit nominees for the position of central bank governor and deputy governor on Friday. Current chief Haruhiko Kuroda is expected to get re-appointed for another five-year term.

Australian shares climbed 0.17 percent, led by gains in financials. Commonwealth Bank of Australia jumped 0.81 percent while insurance provider Suncorp rallied 2.85 percent.

Private hospital operator Healthscope jumped 5 percent on hopes for a potential sale of its Asian pathology business.

The Reserve Bank of Australia plans to leave interest rates at their current record lows for a while, Governor Philip Lowe said on Friday, adding that he hoped for gradual improvement in the unemployment rate.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Amazon surpasses Microsoft in market value for the first time

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Amazon is now worth more than Microsoft.

Amazon’s market value — its closing share price multiplied by the number of shares outstanding — rose to $702.5 billion on Wednesday, and for the first time passed Microsoft, which is worth $699.2 billion as of the close of trading.

Only Apple and Alphabet are now ahead of Amazon among the most valuable companies in the world. Microsoft is fourth, followed by China’s Tencent and Facebook, as the six biggest companies by market cap all come from the technology industry.

Amazon climbed 2.6 percent on Wednesday to $1451.05, while Microsoft rose 1.6 percent to $90.81.

With Amazon’s 73 percent surge over the past year, CEO Jeff Bezos has become the world’s richestperson, surpassing — you guessed it — Microsoft co-founder Bill Gates. Still, Microsoft shares have notched a 41 percent rally in the past 12 months and the software maker remains flush with cash.

The two companies come from very different places, with Amazon dominating e-commerce and Microsoft owning the desktop. But they’re now going head to head in cloud infrastructure, where Amazon’s big early lead is generating plenty of excitement on Wall Street.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Amazon has partnered with Bank of America for its lending program: Sources

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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In his shareholder letter two years ago, Amazon CEO Jeff Bezos said he was looking to team up with banks that could help his company expand its lending program for small businesses that sell on Amazon’s websites.

CNBC has learned that Amazon Lending, which launched in 2011, ultimately found a partner in Bank of America Merrill Lynch, according to people familiar with the matter who asked not to be named because the alliance is confidential.

Partnering with Bank of America allows Amazon to reduce its risk and access capital specifically to provide credit to more merchants so they can acquire inventory.

Amazon Lending is an invitation-only program that makes loans of $1,000 to $750,000, with terms of up to a year, for companies that may have difficulty landing traditional business loans. In June 2017, Amazon said it issued more than $1 billion in loans during the previous 12-month period, compared to $1.5 billion in combined loans for the four years prior to that.

Scaling back

But even with the Bank of America deal, Amazon Lending has been tapping the brakes on growth of late. After almost doubling to $661 million in 2016, outstanding loans just barely increased last year to $692 million, according to Amazon’s annual report earlier this month.

One person familiar with the program said there was a deliberate effort by Amazon to slow the expansion in 2017 as the company attempts to better understand the credit risks that come with a large-scale lending practice. The total staff size was also reduced as the team scaled back its customer outreach efforts, the person said.

Another source involved with Amazon Lending said the slowdown is not surprising because the team has always taken a measured approach to growth. For example, there’s never been a public website to promote the lending service, and it still remains available only to top Amazon sellers that need additional financing. The program is not oriented around making money from interest payments, but to support merchants selling on Amazon’s marketplace and to boost Amazon’s overall sales growth, this person said.

Amazon indicated in its 2016 annual report, published a year ago, that it received a $500 million revolving credit facility from a “lender” in October 2016. The company said in its latest annual report that the facility was raised to $600 million “and may from time to time increase in the future subject to lender approval.”

Sources said the lender referenced in the filings is Bank of America.

Representatives for Amazon and Bank of America declined to comment.

Amazon Lending isn’t the best bet for many businesses once they’ve matured, especially as competition emerges from companies including PayPal, Square and Kabbage. One source with knowledge of Amazon Lending said annual rates typically range from 6 percent to 14 percent.

Stephan Aarstol, the owner of Tower Paddle Boards, was mentioned in Bezos’s 2016 letter as having one of the fastest growing companies in San Diego, “with a little help from Amazon Lending.” But Aarstol said he no longer borrows from Amazon, which charged him between 11 percent and 13 percent annually, because his company has grown big enough to get more attractive rates elsewhere.

“If Amazon was the only game in town, I’d happily take money from them at whatever rate,” Aarstol said. He said that he didn’t leave because of a bad experience, “but due to the stage of my business.”

The slowdown in lending coincides with Amazon’s recent company-wide effort to reallocate its resources. Just this week, Amazon said it’s cutting hundreds of jobs to improve efficiency in slower businesses while it accelerates faster-growth areas.

Schwark Satyavolu, an investor at Trinity Ventures and co-founder of financial tech company Yodlee, said Amazon may be seeing better areas than merchant lending to spend its capital.

“It starts to become a return-on-capital question,” he said. “Do I lend money and make a few percent on that capital invested, or do I take that capital and plow it into something like Whole Foods, which could give you a much higher return?”

Still, sources told CNBC that lending is likely to pick back up now that Amazon has a banking partner. Additionally, Amazon’s lending team started sending out a newsletter in November promoting its program for the first time.

“Welcome to the first edition of Amazon Lending’s Newsletter!” it said. “The Newsletter is designed to connect with sellers like you, to share information that we hope will help you grow your business.”

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asian stocks advance following sharp US gains

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian stocks advanced early on Thursday, taking cues from the rally on Wall Street following the release of stronger-than-expected US inflation data overnight.

The Nikkei 225 rose 1.14 percent, or 242.61 points, in early trade.

The benchmark had come under pressure in the last session, closing lower by 90.51 points, after the dollar fell to 15-month lows against the yen during Asian trading hours on Wednesday.

On the data front, Japan’s December core machinery orders fell 11.9 percent, Reuters said — a larger decline than the 2.3 percent median fall projected.

Over in Sydney, the S&P/ASX 200 rose 0.81 percent, with the energy, materials and gold sectors among the best-performing sectors in the morning. Major miners were higher early on: Rio Tinto rose 2.59 percent and BHP gained 3 percent.

Australian insurer Suncorp fell 3.08 percent after it reported that half-year net profit fell 15.8 percent to 452 million Australian dollars (USD 358 million), missing a Thomson Reuters I/B/E/S forecast of AUSD 486 million. It cited higher-than-expected natural hazard claims as a factor affecting its earnings.

Other corporates due to release earnings on Thursday include Japan’s Sapporo Holdings and Asahi Group Holdings.

Markets in China, South Korea, Taiwan and Vietnam are closed on Thursday for the Lunar New Year holiday.

Wednesday marked the fourth day of gains for stock indexes in the US, with the three major indexes posting gains of more than 1 percent.

Stocks stateside had initially begun the session in negative territory following the release of highly anticipated U.S. inflation data, although they later reversed those losses. The consumer price index rose 0.5 percent last month, topping the 0.3 percent forecast in a Reuters poll.

Yields on US government debt rose following the release of inflation data. The yield on the 10-year US Treasury note jumped to 2.92 percent on Wednesday, its highest levels in four years.

Other economic data released overnight included US retail sales for the month of January, which missed expectations. Retail sales decreased 0.3 percent last month, compared to the 0.2 percent increase projected in a Reuters poll.

In currencies, the dollar index, which tracks the US currency against a basket of rivals, fell to trade at 89.121 by the end of Wednesday. The overnight decline in the greenback came despite expectations that price pressures would influence the Federal Reserve’s interest rate hike path.

Against the yen, the dollar traded at 106.70 after slipping as low as 106.70 overnight. Meanwhile, the Australian dollar was steady at USD 0.7926, above levels around the USD 0.78 handle seen at the beginning of the week.

On the commodities front, oil prices were slightly higher after rallying on Wednesday, on the weaker greenback and a less-than-expected rise in US crude inventories.

US crude futures rose 0.35 percent to trade at $60.81 per barrel after settling more than 2 percent higher overnight. Brent crude futures, which had yet to trade, rose 2.6 percent to settle at USD 64.36 in the last session.

What’s on tap

Here’s the economic calendar for Thursday (all times in HK/SIN):

12:30 p.m.: Japan industrial production

Indonesia’s central bank is expected to make its interest rates decision later in the day.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Europe markets mixed amid earnings; Randstad shares up 2.5%

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The pan-European Stoxx 600 was 0.07 percent lower in early deals with sectors and major bourses moving in different directions.

Auto stocks were among the top losers in early trade, down by 0.2 percent, weighed on by tiremaker Michelin. Shares of the company dropped more than 1 percent after reporting its latest results and adding that its profits are likely to be hurt by currency moves.

Travel and leisure stocks were the top performers, up by 0.4 percent. In particular, shares of Tui Group were up by 2.5 percent after narrowing its net loss in its first quarter and confirming its full-year guidance.

Overall, stocks held on to the rebound seen earlier this week as investors regained some confidence after last week’s steep losses. Looking across the European benchmark, most market moves were driven by earnings. Ubisoft led the gains, up by 5.3 percent, after reporting higher revenues for its third quarter.

Randstad rose above 2.5 percent after beating analysts expectations with a core profit up by 15 percent in its fourth quarter.

Elsewhere, UK inflation data for January is expected to be published at around 9:30 a.m. London time.

In commodity markets, oil prices were up on Tuesday morning, supported by the global market rebound and a fall in the US dollar. Brent was up by 0.4 percent, trading at USD 62.84, and WTI rose 0.3 percent, being sold at USD 59.47 at about 8.20 a.m. London time.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Amazon is cutting hundreds of employees to shift resources to fast-growing businesses

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Amazon is laying off employees in the “low hundreds” an in effort to shift head count allocation to businesses that are growing, CNBC has learned.

The Seattle Times first reported that Amazon was laying off “hundreds” of employees and “managing out” others as the company consolidates its retail operations.

A person familiar with the matter says the cuts are focused on Amazon’s Seattle headquarters and will affect some workers globally. The layoffs will occur in the consumer retail business, which includes Amazon’s toys, books and groceries units, to make room for head count in businesses that are growing, like Alexa, AWS and digital entertainment. Jeff Bezos, in a statement in the last earnings report, said Amazon would “double down” on Alexa after blowing past projections.

While Amazon supports thousands of jobs, the layoffs are in sharp contrast to its rapid expansion over the past few years. It created 130,000 jobs worldwide last year, not including the nearly 90,000 it added with its acquisition of Whole Foods. It has nearly 4,000 corporate jobs currently open in Seattle and 12,000 worldwide.

“As part of our annual planning process, we are making head count adjustments across the company — small reductions in a couple of places and aggressive hiring in many others,” an Amazon spokesperson told CNBC. “For affected employees, we work to find roles in the areas where we are hiring.”

The layoffs follow a rumored hiring freeze put in place late last year. In December, it was reported that Amazon was sharply cutting down on hiring, the first sign of a slowdown in its rapid expansion over the past few years. Amazon also had the smallest number of open positionsfrom August to December of last year, making it the slowest hiring four-month period for Amazon in King County.

The change in Amazon’s hiring plan comes as the e-commerce giant seeks the location for its second headquarters. The company drew 238 bids from 54 different regions across North America for the second headquarters, and narrowed it down to 20 finalists last month. Amazon said the winning city will get more than $5 billion in investment and employ over 50,000 people.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Dow closes more than 400 points higher after its worst week in 2 years

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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U.S. stocks rose on Monday as the major indexes rebounded from their worst weekly performances in two years.

The Dow Jones industrial average closed 410.37 points higher at 24,601.27 and rose as much as 574.26. DowDuPont and Apple were the best-performing stocks in the Dow, advancing 3.4 percent and 4 percent, respectively.

The S&P 500 gained 1.4 percent to finish at 2,656, with materials and information technology as the best-performing sectors. The Nasdaq composite advanced 1.6 percent to close at 6,981.96.

Shares of Amazon, Bank of America and Apple — which fell sharply last week — all rose by at least 2.5 percent.

JJ Kinahan, chief market strategist at TD Ameritrade, said the market is trying to find its balance point after last week’s wild swings. “There’s more volatility ahead. These things take a few weeks to get worked out,” he said.

The Dow and S&P 500 both pulled back 5.2 percent last week, notching their worst weekly declines since January 2016. The Nasdaq composite, meanwhile, dropped 5.1 percent, marking its biggest one-week pullback since February 2016. The indexes also dipped into correction territory.

The major indexes closed out last week on a high note, with the Dow rising 330 points on Friday while the S&P 500 and Nasdaq gained more than 1.4 percent.

The 30-stock Dow closed more than 1,000 points lower twice last week and rose more than 300 points in two other trading days. The S&P 500, meanwhile, posted moves greater than 1 percent in four-of-five trading days last week.

“This looks like a corrective phase rather than the start of a bear market,” said Katie Stockton, founder of Fairlead Strategies. “The biggest risk to the marker prior to this sell-off was sentiment and we’ve seen that go from overly bullish to overly bearish.”

Stockton noted, however, it could take a few more weeks until this correction is over.

“The market is trying to bounce here, but we have yields climbing and that could dampen enthusiasm,” said Peter Cardillo, chief market economist at First Standard Financial.

Investors have been on edge as of late over concerns surrounding higher interest rates, therefore moves in the bond market will continue to be of key importance going forward. The benchmark 10-year U.S. note yield rose to a four-year high on Monday before trading at 2.858 percent.

The latest move higher follows news that the White House will unveil a long-awaited infrastructure plan that includes $200 billion in federal infrastructure spending over 10 years.

“It is no surprise that Trump’s agenda will provide a great deal of fiscal stimulus from tax cuts, and more spending on defense and infrastructure,” Ed Yardeni, president and chief investment strategist at Yardeni Research, said Monday. “The jury is still out on whether all that fiscal stimulus will revive inflation. [We] don’t think so, but the Bond Vigilantes are saddling up.” He also said his firm raised its 2018 forecast on the 10-year yield to a range of 3-to-3.5 percent.

There were no major economic data releases on Monday, but investors looked ahead to the release of the latest Consumer Price Index reading. The CPI numbers are scheduled for release Wednesday at 8:30 a.m. ET.

Jonathan Golub, chief U.S. equity strategist at Credit Suisse, told CNBC’s “Squawk on the Street” the CPI number was important. “The expectations are that inflation is actually going to be coming down a tiny bit, both on the core and the headline,” he said. “Unless we get a problematic surprise, I think Wednesday can actually be the event that calms the markets down.”

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Dubai-based port operator DP World has its sights set on building out India’s logistics network

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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India is set to experience massive shipping industry growth, so Dubai-based port operator DP World is looking into ways to get involved in logistics and transport infrastructure in the country,

Speaking to CNBC at the World Government Summit over the weekend in Dubai, DP World CEO Sultan Ahmed Bin Sulayem said he was optimistic about India’s shipping industry.

“India is going to be the biggest growth. We feel it. And there are many initiatives by the Indian prime minister to basically increase production … the ease of doing business, the financial systems, all that means there is going to be growth,” he added.

Although the ease of doing business in India is improving and things are getting done faster, Bin Sulayem said infrastructure is still a problem — it takes a long time to move cargo into the city.

That problem is exacerbated by the state of trucking in the country.

“The problem is trucking is difficult in India. So we are looking at waterways, rivers, transportation. That will simplify the operations that we have,” he said.

The port operator recently signed a $3 billion joint venture with the National Indian Infrastructure Fund to improve logistics in various areas.

According to the DP World website, the company is currently operating or developing ports in six cities in India: Mundra, Nhava Sheva, Cochin, Chennai, Visakhapatnam and Kulpi. In Asia, the firm also works in Thailand, Vietnam, China, Indonesia, the Philippines and South Korea.

Although the environment in the United States is “good for business” now, DP World has not found the right opportunity to enter the market there, Bin Sulayem said.

“[President Donald] Trump is lifting his foot from the brake. He removed regulations that are becoming bottlenecks for businesses,” he said. “He gave some visibility of what he wants to do.”

The CEO also took a positive tone on Trump’s trade rhetoric.

“What he’s talking about is not protectionism. What he’s talking about is free trade,” Bin Sulayem said. “He’s saying, ‘I want free trade to be fair trade — if you don’t open your markets, why should we open our market?’ I think it’s fair.”

But the “expensive” costs to operate ports in the U.S. are prohibitive now, he said.

“There is nothing to stop us to go to the United States, we can always go. We haven’t found the right opportunity. The cost of operations in the States makes the returns very low.”

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Mike Pence says the US is open to a discussion with North Korea

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The world’s largest economy is willing to talk with North Korean leadership even as it continues applying maximum pressure on the rogue state’s economy, according to U.S. Vice President Mike Pence.

Speaking to the Washington Post en route home from a five-day Asia trip, the president’s second-in-command described the strategy as “maximum pressure and engagement.”

The new plan was agreed upon during Pence’s stay in South Korea last week, during which he had “substantive conversations” with South Korean President Moon Jae-in, the newspaper reported.

Both officials agreed that Seoul would first engage with North Korean leader Kim Jong Un’s team — the two neighbors recently held landmark talks — after which the U.S. may follow suit, the Washington Post said. Pence told the newspaper that he had conferred with President Donald Trump “every day he was in Asia.”

This unified strategy marks a major change in Trump’s attempts to resolve Pyongyang’s nuclear aggression and differs from the administration’s previous attempts at economic punishment.

Trump and Moon have long clashed on how to reign in Kim’s missile program — the White House has advocated force while Seoul has emphasized dialogue, a method that Moon’s critics believe amounts to appeasement.

Speaking in Tokyo on Wednesday, Pence said that Washington would soon unveil “the toughest and most aggressive round of economic sanctions on North Korea ever.”

It’s not the first time U.S. officials have expressed an interest in talking with Pyongyang.

In December, Secretary of State Rex Tillerson offered to begin direct talks with the isolated nation without pre-conditions. Trump himself said last month that he was willing to talk to Kim despite recent heated exchanges between the two leaders.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow