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Selasa, 04 Juni 2019

Fed's Powell, in dovish pivot, is prepared to respond if trade war escalates - Fox Business

Federal Reserve Chairman Jerome Powell said on Tuesday the U.S. central bank is watching how global trade developments are impacting the U.S. economic outlook and is prepared to act as necessary to sustain the near-record expansion.

“We do not know how or when these issues will be resolved. We are closely monitoring the implications of these developments for the U.S. economic outlook and, as always, we will act as appropriate to sustain the expansion, with a strong labor market and inflation near our symmetric 2 percent objective,” he said in a speech.

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Powell’s comments ahead of the “Conference on Monetary Strategy, Tools and Communications Practices” come in the midst of increased calls for interest rate cuts by the Fed.

The CME’s FedWatch Tool, which analyzes the probability of rate moves for upcoming Fed meetings, is currently predicting a 55.9 percent chance of a rate cut in July, with 49.7 percent of traders anticipating the benchmark federal funds rate will be moved into the 2 percent to 2.25 percent range. Only 13.6 percent of traders think interest rates will remain at the current range of 2.25 percent to 2.5 percent by September.

In his speech, Powell stressed that policymakers would respond if inflation remains persistently low, although he did not specify what actions the Fed would take. Core inflation currently remains below the Fed's 2 percent target, although it ticked up slightly in April.

“In this setting, a similar low-side surprise, if it were to persist, would bring us uncomfortably closer to the ELB,” he said, referring to the effective lower bound for interest rates. “My FOMC colleagues and I must — and do — take seriously the risk that inflation shortfalls that persist even in a robust economy could precipitate a difficult-to-arrest downward drift in inflation expectations.”

Despite the more-dovish pivot, however, Powell avoided any other specific issues relating to the current economic condition.

The Fed has not cut interest rates since 2008 when it lowered the interbank lending rate to 0.25 percent -- essentially zero -- in the aftermath of the financial crisis. Interest rates remained at that level until 2015, when the central bank began tightening once again. The Fed has hiked rates nine times since 2015, including four times last year.

During the last Federal Open Market Committee meeting, Powell told reporters that policymakers did not see a strong case for moving in either direction.

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"We do think our policy stance is appropriate right now," he said at the time.

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2019-06-04 15:43:49Z
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Powell says the Fed will 'act as appropriate to sustain the expansion' - CNBC

Federal Reserve Chairman Jerome Powell said the central bank is watching current economic developments and will do what it must to keep the near-record expansion going.

Financial markets have been nervous lately over an escalating trade war that has spread from China and now could include Mexico. At the same, government bond yields are behaving in a way that in the past has been a reliable recession indicator.

Powell began a speech Tuesday in Chicago by addressing "recent developments involving trade negotiations and other matters."

"We do not know how or when these issues will be resolved," he said in prepared remarks. "We are closely monitoring the implications of these developments for the U.S. economic outlook and, as always, we will act as appropriate to sustain the expansion, with a strong labor market and inflation near our symmetric 2 percent objective."

Powell's comments came at the "Conference on Monetary Strategy, Tools and Communications Practices," a kickoff for an examination the Fed is conducting this year about the tools it has to meet its goals as well as the way it is communicating its actions to the public.

He did not address any other specific issues relating to current conditions. Market are broadly expecting the policymaking Federal Open Market Committee to cut its benchmark rate twice before the end of the year in response to current conditions.

For his part, Powell has stuck to the position that the Fed remains data dependent. The most recent FOMC statement, from its May meeting, indicated that the committee is taking a patient stance toward policy changes at conditions evolve.

Looking down the road

In his speech Tuesday, Powell took a longer view, outlining the challenges the Fed faces ahead for when the next crisis hits. The current low rate environment leaves the Fed little room before it hits the zero lower bound, or the point where the Fed's nominal benchmark rate can't be lowered much more.

"In short, the proximity of interest rates to the ELB has become the preeminent monetary policy challenge of our time, tainting all manner of issues with ELB risk and imbuing many old challenges with greater significance," he said.

The Fed faces a problem with inflation, which has yet to sustain at the central bank's 2% goal. Powell said persistently low inflation could lead to "a difficult-to-arrest downward drift" in expectations.

At issue for the future are three main considerations: where current policy is enough to address inflation misses; if the Fed's toolkit of rate moves and asset purchases is enough to achieve the dual mandate of full employment and price stability, and how best to communicate policy to the public.

One consideration is whether the "dot plot" of individual FOMC members' rate projections is helping. Powell suggested that during times of stress, the closely followed "median dot" actually could become the "least likely outcome."

Powell said the tools used during the crisis — near-zero rates and asset purchases that took the balance sheet to more than $4.5 trillion — are likely to be deployed again.

"Perhaps it is time to retire the term 'unconventional' when referring to tools that were used in the crisis. We know that tools like these are likely to be needed in some form in future ELB spells, which we hope will be rare," he said.

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2019-06-04 14:31:33Z
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Silicon Valley in the crosshairs: Google, Facebook, Amazon and Apple face bipartisan onslaught - Fox News

Big Tech's moment of reckoning has finally arrived.

After years of expansion and disruption, while seeming to escape regulatory scrutiny relatively unscathed in the United States, the world's most powerful tech companies are suddenly staring down the barrel of a bipartisan gun that could severely curtail their growth, subject them to invasive probes, saddle them with new regulations and potentially force them to break up.

In recent days, antitrust investigators at the Federal Trade Commission and the Department of Justice have set their sights on four of the largest players in Silicon Valley: Google, Amazon, Facebook and Apple. The two U.S. agencies have reportedly decided to divide and conquer, with the Justice Department taking the lead on investigating Google, while the FTC is set to examine the practices of Amazon.

Facebook, which came to an agreement with the FTC in 2011, has been rumored to be close to a new deal with the agency that would subject it to billions in fines and new regulatory oversight around privacy. Apple would fall under the purview of the Justice Department, which has a history with the Cupertino, Calif. company. The Justice Department found in 2014 that Apple engaged in a conspiracy with five publishers to increase the price of ebooks, ultimately costing the company $450 million.

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"This is more of a warning to the companies that they’re being carefully scrutinized and they need to be careful not to play fast and loose given their dominant positions in the digital marketplace," Gene Kimmelman, a former senior antitrust official at the Justice Department who is now president of the consumer group Public Knowledge, told The New York Times.

From left: Apple CEO Tim Cook, Amazon CEO Jeff Bezos, Google CEO Sundar Pichai and Facebook CEO Mark Zuckerberg. Big Tech is facing a regulatory reckoning.

The antitrust scrutiny comes as lawmakers on both sides of the aisle have vowed to curtail the power of Big Tech, which critics say has stifled competition and innovation while allowing the spread of misinformation and hate speech. A number of Democrats running for the 2020 presidential nomination have called for greater regulation of Silicon Valley but Sen. Elizabeth Warren, D-Mass. has put forth the most aggressive proposal to break up several tech giants on antitrust grounds.

The House Judiciary Committee on Monday announced a bipartisan investigation that will use the power of subpoenas and public testimony to focus on three key areas: documenting competition problems in digital markets; examining whether dominant firms are engaging in anti-competitive conduct; and assessing whether existing antitrust laws, competition policies and current enforcement levels are adequate to addresses the issues.

"Unwarranted, concentrated economic power in the hands of a few is dangerous to democracy – especially when digital platforms control content. The era of self-regulation is over," House Speaker Nancy Pelosi, D-Calif., said in a statement on Twitter, adding that the probe is "long overdue."

Shares of Facebook and Alphabet, which owns Google, both tumbled on Monday, pulling the Nasdaq Composite Index into correction territory.

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"Technology has become a crucial part of Americans' everyday lives," said Antitrust Subcommittee Ranking Member Jim Sensenbrenner, R-WI, in a statement. "As the world becomes more dependent on a digital marketplace, we must discuss how the regulatory framework is built to ensure fairness and competition."

The tech industry poured $77.9 million into lobbying U.S. lawmakers in 2018, compared with $16.4 million a decade earlier, The Wall Street Journal reports. Both Google and Amazon have also funded more than 30 nonprofit groups, including think tanks on the left and the right, that have a voice in the public debate over antitrust, according to the Journal.

However, all of that money may not be enough to stave off regulators and investigators.

People familiar with the investigations told Reuters that neither the Justice Department nor the FTC has contacted Google or Amazon about any probes, and that company executives are unaware of what issues regulators are reviewing.

The world's largest online retailer, Amazon, has faced heat for the power it wields over third-party sellers on its platform. The Seattle-based tech giant has also been criticized for damaging traditional retailers, although government regulators did allow its purchase of Whole Foods to proceed in 2017.

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Apple is being examined by the European Union thanks to a complaint from streaming music company Spotify that Apple has abused its power over app downloads. Although Apple has frequently touted the privacy of its hardware and taken subtle shots at Facebook, a new report suggests that a range of different iPhone apps are sending out users' information to third parties. The Tim Cook-led company recently announced that it was killing iTunes.

In April, Facebook said it expects to be fined up to $5 billion by the FTC, which has been probing the social network's role in sharing the data of 87 million of its users with the data-mining firm Cambridge Analytica. The Menlo Park, Calif. company, which also owns WhatsApp and Instagram, has been slammed by critics over the proliferation of fake news on its platform.

“We’re still waiting on long overdue FTC action on Facebook’s violated consent decree,” Sarah Miller, co-chair of Freedom From Facebook, a group which has called for the social network to be broken up, said in a statement to Fox News via email. “Facebook’s violation of the consent decree already gives the FTC grounds to break up Facebook’s monopoly, and they should. But, a potential bigger-picture antitrust investigation is also long overdue."

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The FTC previously settled an investigation into Google in 2013 with a reprimand, but the Sundar Pichai-led firm has been fined multiple times by European regulators in recent years for anticompetitive practices. According to ad research firm eMarketer, Google is expected to capture 37 percent of the $129 billion spent on online ads in the U.S. in 2019, compared to 22 percent for Facebook and 10 percent for Amazon.

"After four decades of weak antitrust enforcement and judicial hostility to antitrust cases, it is vital for Congress to step in to determine whether existing laws are adequate to tackle abusive conduct platform gatekeepers or if we need new legislation," said Antitrust Subcommittee Chairman David Cicilline, D-RI, in a statement.

Still, not everyone agrees that Silicon Valley's biggest tech companies should be broken up.

“The Justice Department’s investigation of Google will come to the same conclusion as the FTC’s did in 2013 -- that there is no antitrust case,” said Carl Szabo, VP of NetChoice, an e-commerce trade association, in a statement to Fox News. "It’s illogical that the DOJ is investigating competitors in the same market for monopoly behavior. Amazon, Apple, and Google all compete with each other in a vibrant and competitive marketplace."

Google, Facebook and Amazon did not comment on the record for this story. Fox News also reached out to Apple.

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2019-06-04 14:27:25Z
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CVS turning 1,500 stores into HealthHUB locations with less retail, more health care - USA TODAY

Nathan Bomey USA TODAY

Published 8:19 AM EDT Jun 4, 2019

Get ready for less retail floor space and more room for health care services at one of your local CVS stores.

CVS Health is poised to expand a concept store focused on health care to 1,500 locations by the end of 2021, the company said Tuesday.

The drugstore chain launched the concept store, called HealthHUB, in the Houston area earlier this year.

The premise stems from the company's effort to reduce its reliance on sales of retail goods and increase its commitment to health care services. The company recently closed 46 struggling stores as it competes with Amazon and other retail rivals for customers.

It's also reducing floor space for slow-selling items like greeting cards and adding space in hundreds of stores for teeth-straightening service SmileDirectClub.

At the HealthHUBs, more than 20% of the floor space is devoted to health care services like wellness and personalized care.

For example, HealthHUB stores have space for yoga classes and extra room for CVS Minute nurse practitioners to perform services such as phlebotomy, diabetic screening and sleep apnea assessment.

CVS CEO Larry Merlo told USA TODAY in November that he plans to shift more retail space toward health purposes.

The company announced Tuesday that the new HealthHUBs would roll out first in Houston, Atlanta, Philadelphia, southern New Jersey and Tampa.

See the list: CVS closing 46 struggling stores

Straighten your teeth: 'Hundreds' of CVS Pharmacy stores to get SmileDirectClub shops

"By bringing those services to help them better manage their chronic diseases, we can really increase their awareness, their engagement, the experience with those services and ultimately help them manage their own diseases and be healthier, which in turn lowers overall health care costs," CVS chief transformation officer Alan Lotvin told USA TODAY in February.

Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.

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https://www.usatoday.com/story/money/2019/06/04/cvs-health-healthhubs/1337100001/

2019-06-04 12:19:35Z
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CVS announces further expansion into health care services - The Boston Globe

CVS leaders think the company can play a key role in this movement by making health care routine instead of something people think about only when they visit a doctor.

‘‘The ultimate goal is bring more health services into people’s communities where they can access them as part of their daily life,’’ Executive Vice President Dr. Alan Lotvin said.

But the drugstores may face questions about their motive, never mind competition from major doctor groups and hospital systems that have their own support staff working to keep patients healthy.

The management of chronic illnesses has become a big source of health care spending, noted Harvard researcher Dr. Ateev Mehrotra, who has studied retail clinic growth.

‘‘This is sort of the pot at the end of the rainbow that everyone wants to get to,’’ he said.

CVS Health, based in Woonsocket, Rhode Island, runs more than 9,800 retail locations nationally. Late last year, it added health insurance when it acquired one of the nation’s biggest insurers, Aetna, in a roughly $69 billion deal that is still being reviewed by a federal judge.

Soon after announcing that deal, CVS officials started talking about plans to provide more health care help to customers.

Aside from visits with dietitians, HealthHub stores also give customers a chance to get screened for eye problems caused by diabetes, talk to a pharmacist about their treatment plan or get help tracking their blood pressure.

The stores reduced space for things like seasonal merchandise in order to add community rooms that can be used for free chair yoga sessions or nutrition classes.

The company started testing the changes in Houston late last year and will add more to that market this year as well as expand to Atlanta, the Philadelphia area and Tampa. CVS officials say they expect to run 1,500 HealthHub stores by the end of 2021.

Separately, Walgreens has added primary care clinics to some of its stores in the Houston area. It’s also testing clinics in Kansas City that focus on older patients through a partnership with the insurer Humana. The drugstore chain wants to improve access to primary care for its customers, said Walgreens executive Dr. Pat Carroll.

‘‘We have an aging population,’’ he said. ‘‘It is difficult in many communities to actually find a primary care physician.’’

Both Mehrotra, the Harvard researcher, and Dr. Kevin Pho said drugstore services may make it easier for some patients to get help. But they said it is critical for a patient’s regular doctor to stay updated on all care, especially if the patient has a few conditions and takes several medications.

Pho, a New Hampshire-based physician, also worries that drugstores may use their health care services to drum up prescription business or sales in the rest of their store.

CVS is offering additional health care in stores many customers already visit routinely and is focused on putting those customers on ‘‘a path to better health,’’ Executive Vice President Kevin Hourican said.

Frequent CVS customer Grace Bennett said she thinks the expanded health care services are a ‘‘fantastic step.’’

The 28-year-old New Yorker has diabetes that led to eye surgery. She said screenings for that condition and other health care services available through the drugstores will make it easier for people to get help without having to juggle schedules or worry about finding an open appointment.

‘‘I think they’ll be helpful to a whole lot of people,’’ she said

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2019-06-04 11:14:37Z
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FANG stocks just lost nearly $130 billion in market cap, and chart points to more pain - CNBC

Fears of increased government scrutiny just crushed FANG stocks.

Facebook, Amazon, Netflix and Alphabet tanked Monday, shedding nearly $130 billion in market cap collectively. Those losses sent Facebook, Netflix and Alphabet into a bear market, having dropped at least 20% from recent records.

The drop came on the first trading day after The Wall Street Journal reported that the Justice Department is readying an antitrust investigation against Google over its search practices and other issues. Alphabet declined to comment.

The NYSE Fang+ index, which tracks the big tech companies and a handful of other stocks, could be in for more pain, says Ari Wald, head of technical analysis at Oppenheimer.

"As a group, this particular index has not fared well. If you look at the NYSE Fang+ index -- it's an equal weighted composite of 10 related names, it's the four we know plus stocks like Tesla and Alibaba are in there as well -- it's trading at the same level it first traded at back in December of 2017, " Wald said on CNBC's "Trading Nation " on Monday. "It's been a very tough market for this index in what's really been a better environment for high growth in general."

The NYSE Fang+ index tumbled 4% on Monday, and remains just 1% higher for the year. By comparison, high-growth sectors including software, consumer discretionary and communication services have rallied by at least 10%.

"For this particular index, I can say that there's really no signs that this underperformance is abating, and for exposure we prefer software and services. We think that's going to be the part of high growth that outperforms," said Wald.

Gina Sanchez, CEO of Chantico Global, says just the threat of increased regulatory oversight could stymie the FANG trade for some time.

"These companies will be very, very mired in the process of being scrutinized," Sanchez said during the same segment. "They could actually keep these companies so involved in this process over the next two years that they won't be able to effectively run and do the things that growth companies do."

The degree of oversight could mirror the intense antitrust scrutiny given to Microsoft during the 1990s, says Sanchez. The U.S. government accused Microsoft of illegally maintaining a monopoly, a case it won in a 2000 ruling.

"The market response is appropriate given the fact that everybody saw what happened to Microsoft, they had to take their eye off the ball, and so this could be one of those moments," said Sanchez.

Microsoft's stock price was largely unaffected over the course of the case. From the point at which the Department of Justice filed antitrust charges in May 1998 to the April 2000 ruling, Microsoft shares more than doubled.

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2019-06-04 11:03:46Z
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CVS to open 1,500 HealthHUB stores over next two years - CNBC

CVS will open 1,500 HealthHUB stores by the end of 2021, the company announced Tuesday ahead of its investor day.

The HealthHUBs are remodeled drugstores that focus more on health services and products and less on candy and greeting cards. CVS opened its first three HealthHUB locations in Houston in February. It plans to open more in Houston, Atlanta, Philadelphia, southern New Jersey and Tampa, Florida, by the end of the year.

"We're pleased with the customer feedback we've received on the HealthHUBs," CVS Pharmacy Kevin Hourican said in an interview. He said these stores have seen higher traffic in the MinuteClinics, increased sales in the front of the store and more prescription volumes.

HealthHUBs include an expanded health clinic, with a lab for blood testing and health screenings. There are also wellness rooms for yoga and seminars, dietitians and respiratory specialists in the HealthHUBs.

Alan Lotvin, CVS executive vice president of transformation, said the 50 stores CVS will add this year will include these same features, while the ones added next year and the year after may look slightly different as the company improves on the design. CVS may tweak the designs for different markets and store sizes. For example, Hourican said stores in the Northeast tend to be smaller than the ones in Texas, so the company will need to pare it down.

Like other retailers, CVS needs to figure out how to keep people coming into its stores, and health services gives consumers something they can't buy online.

The company in May said it decided to close 46 underperforming stores. Hourican said he does not anticipate "meaningful" store closures. However, he said 500 store leases come up for renewal every year and CVS will review those.

Executives also think the HealthHUBs will help advance CVS' vision for its $70 billion acquisition of health insurer Aetna. The combined company says it wants to keep its members healthier and lower its health-care expenses and that managing chronic conditions in its drugstores will help accomplish that.

Measuring progress on this front may take longer, Hourican said. The company will track how its members are engaging with the services in stores and whether that leads to behavior change, clinical outcomes and cost reductions.

"It really is measuring at each step along the way, are you getting what you expect to get," he said. "When you get the clinical outcomes you see the cost savings we modeled."

CVS' announcement comes as executives try to impress analysts and shareholders on their strategic vision at the company's investor day in New York on Tuesday. The company's stock price has slid 20% this year. Executives warned that 2019 would be challenging, between integrating Aetna, navigating regulatory pressure and shrinking profitability for filling prescription drugs.

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2019-06-04 10:49:38Z
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