The Fed will have a hard time giving everyone what they want, from stock traders to Trump - CNBC

This just might be Fed Chair Jerome Powell's toughest meeting yet, because whatever the outcome, odds are high that it will disappoint a large group of people, and that's not even counting President Donald Trump.

The Fed began its two-day meeting Tuesday, and by 2 p.m. ET today, markets will be pouncing on whatever the Fed has decided on interest rates, future rate cuts and the state of the economy. Most economists expect the Fed to pass on cutting rates, but move to a tone in its statement and in its forecasts that suggest a rate cut is coming, which many believe will be in July.

That's where it gets tricky. The Fed now says it is "patient," willing to watch the incoming data and weigh what to do about policy. But after Fed officials signaled in various comments that they could cut rates, the markets now anticipate a new rate cutting period. That means the Fed will also likely transition from being "patient" to becoming something else. What other language it uses could determine how dovish or hawkish the market will believe it to be.

"With the market pricing in a 1 in 5 chance of a rate cut for the current meeting, and a 100% probability of a 25 [basis-point] cut at the July meeting, it is relatively easy for the Fed to disappoint risky assets," notes Alan Ruskin, head of G-10 foreign exchange strategy at Deutsche Bank. "The biggest dilemma for the Fed is how to maintain maximum policy 'optionality' for July without having risky assets reprice sharply negative."

In fact, a negative 'reprice' of risk assets — or simply a stock market sell-off — has been the norm for the Fed meeting day since Powell took over from former Fed Chair Janet Yellen. Ruskin notes that after all of Powell's 10 meetings, the S&P 500 was lower on nine of them.

Source: Deutsche Bank

"If the Fed shows considerable flexibility and a strong bias to cut rates in July, but is some way from pre-committing because they are data and politics dependent, it would be expected that the [dollar] will be stronger against almost all currencies," Ruskin wrote. The Fed's next rate cut will be its first since it cut rates to zero in late 2008.

Powell speaks to the press at 2:30 p.m. ET, following the meeting, and he could use that time to clarify the Fed's message.

"I know he's Mr. Volatility ... he tends to generate a lot of volatility," said Ward McCarthy, chief financial economist at Jefferies. "Who knows, especially coming on the heels of Draghi's comment and Trump's tweet. Almost no matter what he does is going to surprise someone." McCarthy is in a minority of Street economists not expecting the Fed to cut rates this year.

On Tuesday, European Central Bank President Mario Draghi laid out a framework for the ECB saying it could buy more assets and even cut its negative rates. Those comments sent German and French yields into record negative territory and the U.S. 10-year close to 2%. Draghi was seen as adding pressure on the Fed to be more aggressive about easing, since he widened the gulf between U.S. and European rates.

In a tweet, Trump criticized the ECB for moving to easier policy since it would send the euro lower against the dollar. He also criticized the Fed again Tuesday for not easing, and when asked if he'd demote Powell, he said: "Let's see what he does."

McCarthy said the Fed could be very clear that it has options by changing the message on its 'dot plot' chart, literally a chart it uses to show what individual, but anonymous, Fed officials see as the path of the fed funds rate. The dot plot still shows higher rates next year, and McCarthy said that could change.

"The Fed has been trying to get optionality since last December. I think they'll achieve that today but have the dot line flatline. You still have a positive slope.They'll take that slope out," McCarthy said. "For the most part, that puts the ball in Trump's court because it's trade negotiations that will determine things. Trump may get what he wants in lower rates, and it will be because he drops the ball."

Bespoke also studied market moves post-Fed meeting and found the string of stock declines after Powell meetings to be a bit unusual.

"While the S&P usually trades higher on Fed Days, over the last 10, the S&P has averaged a decline of 0.30%. Aside from the S&P's 1.55% gain on the day of the January 2019 meeting, the S&P has fallen on 9 of the last 10 Fed Days. As shown in the chart below, there have only been three other periods over the last 25 years where the rolling 10-Fed Day average % change for the S&P has dipped into negative territory for multiple months like it has recently — early 2001, early 2006, and early 2014," Bespoke noted.

The firm also noted that when the Fed does make a move, either raising or cutting interest rates, the S&P averages declines in the month following those moves. But it has averaged a gain of 0.9% in the month after the meetings where it has not made rate changes.

"The Fed has left rates unchanged for two consecutive meetings, and in the month following each of the last two, the S&P gained 4.17% and 2.97%, respectively. A Fed on hold suggests that things are running smoothly, and that's just what the market tends to like — not too hot or not too cold," Bespoke wrote.

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2019-06-19 15:05:21Z
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Should Passengers Dread The A321XLR? - One Mile at a Time

I’m sure everyone is tired of hearing about the A321XLR by now, but in this post I wanted to address a big picture concern that many readers have had with the plane.

The A321XLR is no doubt incredibly innovative in terms of the route possibilities it opens up, but should us passengers really be dreading this plane? Here’s my take:

In this post:

The basics of the A321XLR

Airbus officially launched the A321XLR this week. When it enters production in 2023, it will be the longest range single aisle plane in the world, as it will have the range to fly about 5,400 miles nonstop.

As aircraft technology improves, we’re not only seeing planes become more fuel efficient, but we’re also seeing creative ways that more fuel tanks can be added and maximum takeoff weights can be raised, allowing airlines to operate longer flights without compromising on payload.

As such the concept of long haul flying with narrow body planes isn’t completely new — the Boeing 757 has been operating transatlantic flights for years, and recently even the 737 has operated some transatlantic flights.

However, in all those cases long haul flying with these planes was the exception rather than the norm, while in the case of the A321XLR, it’s exactly what it was built for. Beyond that, the plane can fly further than the 737 or 757.

With a range of 4,700 nautical miles (about 5,400 statute miles), you can expect that many passengers will be spending 10-12 hours on these planes, when you factor in boarding, taxi time, etc.

So let’s take a closer look at what the A321XLR means for passengers, crew members, and more.

Rendering of the A321XLR

Does the A321XLR represent a step back for business class?

We’ve seen a massive amount of innovation the past few years with business class. We’ve gone from angled seats, to fully flat seats, to seats with direct aisle access, to seats with doors.

Qatar Airways’ spectacular Qsuites

So will the A321XLR represent a step back for business class? I’d say yes… slightly… in most cases.

To find a happy medium between a great product and something that’s economical, my guess is that most airlines will choose a staggered configuration in business class, where most seats feature direct aisle access, but not all. Think something like JetBlue’s Mint.

JetBlue’s A321 Mint

I say this because airlines like Aer Lingus and TAP Air Portugal are using the A321LR for transatlantic flights, and that’s basically the configuration they’ve chosen. So in some cases I do think this will represent a slight step backwards for business class. In fairness, for those airlines those are the same seats they have on their wide body planes.

There are also some creative business class products with direct aisle access for narrow bodies. For example, when JetBlue launches Europe flights, it’s highly likely they’ll offer the VantageSolo seat, which is from the same supplier they currently use (Thompson Aero).

Thompson’s VantageSolo seat

These cabins feature direct aisle access from every seat.

Thompson’s VantageSolo seat

Thompson’s VantageSolo seat

Even so, I’d say that’s not as good as some other business class products. It’s essentially the same as a herringbone seat, given that it faces the aisle, and that’s hardly new technology.

Turkish Airlines’ herringbone A330 business class

So my point is that I do think there’s a slight compromise when it comes to product for business class on narrow bodies, but those are very minor when you consider the A321XLR has the potential to open up new routes.

Will the A321XLR have premium economy?

Obviously every airline is going to make a different decision here, but I do have general concerns about the existence of premium economy on A321XLRs. One of the great innovations we’ve seen in the airline industry the past few years is the introduction of premium economy.

Qantas’ 787 premium economy

It’s a great middle ground, as economy keeps getting worse and business class keeps getting better.

However, my guess is that while many airlines are installing premium economy on a majority of their wide body planes, many A321XLRs probably won’t feature premium economy. That’s a shame, because it gives passengers fewer options.

Of course I’m generalizing here — I’m sure some airlines will choose a really premium A321XLR configuration, perhaps where half the plane is business class and premium economy, and the rest of the plane is economy.

However, the economics of a premium heavy configuration can be challenging, especially during an economic downturn.

I doubt we’ll see configurations as premium as British Airways’ A318

How will economy be on the A321XLR?

The A321XLR should actually be good news for economy, at least as far as the seats specifically go. The Airbus A320 family of aircraft has among the widest seats in economy, as they’re generally 18″ wide.

That’s wider than you’ll find on most planes, including on the 737, 757, 777, 787, etc.

The great thing is that there’s no way they’re going to squeeze in a seventh seat per row in economy. Even on the A350 they’re now considering making a 10th seat in each row standard, so that plane may lose some width.

So from the perspective of comfort in economy, the A321XLR shouldn’t be bad news. Hopefully airlines opt to have personal televisions and wifi on these planes as well, to keep people entertained.

SriLankan Airlines’ A321neo cabin

The A321XLR cabin won’t be spacious

The way I view it, the biggest downside to the A321XLR will be the lack of space in the cabin. The seats as such shouldn’t be significantly worse, but there simply will be no space to stretch or walk.

On a wide body plane you can easily walk between aisles to make a “loop,” and there’s also usually less congestion in the aisles, since there are larger galley and exit areas where you can stand and wait for the lavatory.

I’m guessing no A321XLRs will have an onboard bar

Unfortunately on narrow body planes you don’t have that ability. In reality if you want to stand you’ll just have to do so in the aisle, and that’s not pleasant for anyone.

So the way I view it, that’s the biggest downside to the plane. If you’re looking to get any movement, the A321XLR is going to disappoint.

The A321XLR cabin pressurization

Planes like the 787 and A350 promise to fight jet lag with how they pressurize the cabin. They claim the pressurization is the same as being at 6,000 feet, compared to other planes, where it’s higher.

It’s my understanding that the A321XLR won’t have those features.

Here’s the thing — I’ve always found that to be marketing hype, and I can’t say that I’ve found I’ve been more well rested having flown a 787 vs. a 777, for example. So I’m not sure I buy into it.

Others swear by it, though. So that is something to be aware of with the A321XLR, and I’d put this squarely in the “your mileage may vary” camp.

I haven’t found the A350’s cabin pressurization to make a difference

Crews will hate the A321XLR

Unless Airbus somehow gets really creative (by somehow installing bunks in the cargo hold), I think the biggest losers with the A321XLR will be crews. They’ll in many cases have 12 hour days where they’re working this plane, and on most modern wide body aircraft they’re used to having private crew rests with fully flat beds.

The A321XLR is not going to be fun for them to work:

• Unless Airbus figures something really creative out, they won’t have proper crew rests, but rather flight attendants may just have some economy seats blocked off (meanwhile I imagine pilots will get one business class seat)
• On bigger planes the galley space is bigger, so crews at least have a bit of privacy during the flight, but I imagine on the A321XLR they’ll constantly be crowded by people
• Navigating a single, long aisle with a cart is gong to be a pain, especially as people want to constantly get up during the meal service

Obviously crews will just have to deal with it, but they won’t like it. It’s one thing to fly an A321XLR once in a while on a 10-12 hour flight, but that pales in comparison to crews having to constantly operate the plane.

The A321XLR could usher in new routes

If the A321XLR is simply being used to increase frequencies on highly trafficked routes, I’d probably avoid it. For example, if I could choose between a 787 and A321XLR between New York and London, I’d go with the former.

On the A321XLR you are giving up some slight comforts across the board, in particular when it comes to the ability to move around the cabin.

But I don’t think that’s the right way to view this plane. The question should be, would you rather fly nonstop on an A321XLR, or connect on a bigger plane?

For example, we could see Aer Lingus launch routes like Dublin to Houston with this plane. Would you fly rather fly nonstop from Houston to Dublin on an A321XLR, or fly from Houston to London on a 747, connect at Heathrow, and then connect to a (very) uncomfortable intra-Europe aircraft?

Personally I think the former sounds better, but to each their own.

Bottom line

My first instincts with the A321XLR are as follows:

• I suspect the A321XLR will represent a slight step backwards in terms of business class, simply because the narrower cabin restricts creative design opportunities
• I do think the A321XLR will lead to a reduction in premium economy, since many airlines will opt for a two class layout rather than a three class layout
• In economy the opportunity is there for the seats to be more comfortable than on wide bodies, since we should expect 18″ of seat width, rather than the 17″ we see on many other planes

The big challenge with the A321XLR will be the lack of cabin spaciousness. On a four or five hour flight that’s not a big deal, but when you’re on a plane for 10-12 hours it’s a different story.

But if that allows you to skip a connection, which saves you time, eliminates the risk of misconnecting, reduces the risk of your bags being lost, and allows you to avoid an uncomfortable regional flight, then maybe it’s a fair trade-off?

I’m curious what you guys think — are you excited by the opportunities the A321XLR opens up, or do you dread the prospect of being on a narrow body plane for over 10 hours?

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2019-06-19 13:56:47Z
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Will the Fed boost or disappoint markets? Dow opens slightly higher - CNN

The Dow (INDU) opened 0.1%, or 35 points higher, while the S&P 500 (SPX) and Nasdaq Composite (COMP) opened 0.1% and 0.2% up, respectively. Both the S&P and Nasdaq pared their gains and dipped into negative territory just a few minutes into trading.

Hopes for an impending interest rate cut rose earlier this month, when Powell said the central bank would act as appropriate in ensuring that the US economy will keep growing. The market took this to mean that an economy-boosting rate cut was imminent and stocks rallied, as lower interest rates are good for companies.

At today's meeting, the Fed is expected to signal that lower rates are coming. That's why Powell's press conference following the 2 pm ET policy statement will be so closely watched.

Investors expect that Powell will drop the word "patient" from the statement. Since January, the Fed has said it would be patient in terms of future policy action. But those days might be over.

If Powell meets market expectations Wednesday, stocks could climb higher once again.

The likelihood for a cut at the Fed's July meeting is at 84%, according to the CME FedWatch tool.

But Powell could disappoint hopes for such swift policy action as well, which would likely push markets lower.

"Given that US unemployment is at a 50-year low, and earnings are outstripping inflation, the Fed might catch out some dealers, and deliver a more neutral update, and should that be the case, we might see stocks pullback from the recent highs," said David Madden, market analyst at CMC Markets.

Perhaps the central bank is looking for more economic data to show that the US economy is slowing and thus support a rate cut. That strategy would leave hopeful investors high and dry at least until the September policy meeting.

Either way, it could be a volatile day.

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https://www.cnn.com/2019/06/19/investing/dow-stock-market-today-fed/index.html

2019-06-19 13:47:00Z
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Frontier Becomes First US Airline To Order A321XLR - One Mile at a Time

Read more: In the first couple of days we’ve seen A321XLR orders from Qantas, Jetstar, Aer Lingus, Iberia, Frontier, JetSMART, and Wizz Air, and American. Should passengers dread the A321XLR, though?

At the beginning of the week the A321XLR was launched, and the orders for the plane just keep coming in. This plane will launch in 2023, and will be the longest range single aisle plane in the world, with a range of 5,400 miles.

Indigo Partners orders 50 A321XLRs

Phoenix-based Indigo Partners is a private equity fund that invests in airlines around the world. If the name sounds familiar, it’s because they were looking at saving WOW Air a few months back, but that didn’t end up happening.

Indigo Partners has invested in airlines like Frontier Airlines, JetSMART, Volaris, and Wizz Air.

Today Indigo Partners has signed a memorandum of understanding to acquire 50 A321XLRs. This includes new orders for 32 A321XLRs, as well as the conversion of 18 existing A320neo orders.

Indigo Partners has already revealed how these planes will be distributed between airlines:

• 20 A321XLRs will be allocated to Wizz Air (Hungary)
• 18 A321XLRs will be allocated to Frontier (US)
• 12 A321XLRs will be allocated to JetSMART (Chile)

Wizz Air is getting 20 A321XLRs

What I find interesting here is that this makes Frontier the first US airline to order the A321XLR. There were rumors that American would be interested and that an order might be imminent, but Frontier beat them to the punch here.

Frankly I’m a bit surprised, because Frontier isn’t among the first US airlines I would have expected to order this plane.

What could Frontier do with A321XLRs?

Frontier is an ultra low cost carrier based in Denver. Their fleet consists exclusively of Airbus A320-family aircraft. They currently have just under 90 planes in their fleet, with nearly 200 more on order, split between the A320neo, A321neo, and now A321XLR.

The reason I find this move so fascinating is because Frontier operates very few international routes. A vast majority of their routes are domestic, and then they have a very limited number of routes to Canada, Mexico, and the Caribbean.

Today Frontier’s CEO hinted at a few possibilities for the planes:

• Frontier currently struggles to fly coast-to-coast in winter with a full payload, and the A321XLR would make this easy
• Frontier wants to use the A321XLR to add service to Hawaii and Alaska
• In the future Frontier would consider adding flights to Europe or South America, or at least that’s not out of the question

Frontier is getting 18 A321XLRs

With Denver being Frontier’s primary hub, here’s the A321XLR’s approximate range from Denver (though they could use the plane out of other hubs as well):

I find Frontier’s order to be interesting. In the case of Aer Lingus or Iberia or Qantas I can totally say “oh, the use for these planes is obvious.”

It’s not quite as straightforward with Frontier. It seems Frontier will mostly use the planes for coast-to-coast and Hawaii flights, both of which are well within range of the A321XLR, and don’t take advantage of the full potential of the plane.

Frontier is good at sticking to their core competency, so personally I don’t think they’ll use the plane for huge expansion to South America or Europe, for example.

After all, if there’s one thing we’ve learned in the airline industry in the past few years it’s how challenging the ultra low cost transatlantic business model is.

Bottom line

A321XLRs are selling as fast as red hats and mini-constitutions in Orlando last night. This is a plane with a real market. At this point there’s almost competition between airlines to order the A321XLR — if airlines want any chance of getting delivery slots for this plane in the next decade, they’re going to have to order soon.

So there’s not only real demand for the plane, but also competition for securing slots. I think the orders will keep rolling in, even well after the Paris Air Show.

What do you make of Indigo Partners’ A321XLR order?

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2019-06-19 13:43:42Z
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Bringing Shoe Manufacturing Back To The United States Poses Challenges - NPR

Enlarge this image

Workers makes shoes at a factory in Jinjiang, in southeast China's Fujian province. Nearly all shoes sold in the U.S. are foreign-made. China's share has declined, but it's still a major source. Stringer/AFP/Getty Images hide caption

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Stringer/AFP/Getty Images

For Douglas Clark, the darkest part of working for Nike in the 1980s was watching American shoe manufacturing "evaporate" in the Northeast in a mass exodus to Asia in pursuit of cheaper labor.

"As a true Yankee — and my father was a Colonial historian — you know, it was heartbreaking," he said.

Clark would go on to a long career in footwear, at Converse, Reebok, Timberland, then his own line of shoes at New England Footwear. And there, he would devote eight years to one mission: creating a model to make shoemaking in America profitable again.

This was a tall order. At a time when President Trump speaks of rebuilding American manufacturing, footwear is a telling example of how hard it is to turn back time.

These days, 99% of shoes sold in the U.S. are imported, many of them from China, Vietnam and Indonesia. China's share has declined in recent years, but it remains a key source of America's shoes and shoe parts. That's why some U.S. footwear companies have been loud opponents of Trump's threat of more tariffs for almost everything imported from China.

"We'd love to make shoes in the United States," Steve Madden CEO Ed Rosenfeld told NPR. "It's very hard to envision a scenario where we'd make the types of products that we make, at the prices that we make them, in the United States."

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For a shoe-factory job paying $12 an hour, the actual cost of shoemaking — when adding benefits — grows to $16 an hour, compared with about $3 an hour in China, said Mike Jeppesen, head of global operations at Wolverine Worldwide, which owns brands like Merrell, Sperry and Keds. And that cost of making shoes in America quadruples after wholesale and retail markups, he said, ballooning into a $50 price difference between a pair made in the U.S. versus in China.

"There's really very little commercial reason for why you would make footwear in the U.S. today," Jeppesen said. He acknowledges one exception to that: factories that work to meet constant demand for American-made shoes by the U.S. military.

Indeed, many of the remaining 200-some U.S. footwear factories serve the military, said Tom Capps, whose Capps Shoe Co. in Virginia mainly makes uniform shoes for the government.

Capps said he employs 125 to 175 workers, depending on the factory's workload. That's on the high end for an industry where most firms employ fewer than 10 people, according to the Footwear Distributors and Retailers of America.

Owners of U.S. factories that make nonmilitary shoes in America said they found their own reasons to stay. Many cited their love of the craft and tradition. Capps said he also found a niche by offering a large selection of sizes. Olivier Marchal, of Sense of Motion Footwear in Colorado, worried about the environmental impact of shipping shoes and materials from across the world in Asia.

But U.S. factory owners also listed two major challenges of domestic footwear manufacturing: finding skilled workers and affordable parts and materials.

As shoemaking jobs disappeared, so did the support network for the industry. Suppliers of things like the little metal eyelets and colorful leather followed the industry overseas. Many shoe factories turned into warehouses and offices.

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San Antonio Shoemakers has been making shoes in Texas since the 1970s. SAS recently got a big contract to make sneakers for the U.S. military. Carson Frame/The American Homefront Project hide caption

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Carson Frame/The American Homefront Project

Dan Heselton runs Maine Mountain Moccasin out of one such factory that vacated during the exodus.

"We'll post jobs," he said, "and it's very seldom that someone under the age of 40 is coming in the door to apply." Among the workers who remain, arthritis is a common struggle.

"A lot of the people have said multiple times that they definitely don't want their son or daughter doing this," Heselton said. "That's tough to hear."

With the higher costs of U.S. labor and materials, the remaining manufacturers tend to rely on their shoppers choosing to pay more for the "Made in America" brand.

"We know that we can't make a $19 shoe to be sold at Target or Walmart. That's just not going to be possible for us," said Nancy Richardson, CEO of SAS, a midsize company that has been making shoes in San Antonio since the 1970s. "So we focus on having people feel like they get an $800 pair of shoes for $150 or $200."

The mass-market companies, meanwhile, have been turning their U.S. operations more toward design and marketing, leaving all the cutting, gluing and stitching to manufacturers overseas.

Clark wanted to change that. On his mission to return mainstream manufacturing to America, he zeroed in on the cost and complexity of the labor involved in shoemaking.

U.S. factory owners often say they wish people realized just how many parts and processes it takes to make a shoe. There are multiple layers to create the sole alone, including lots of heavy-duty sewing. Securing the bottom of the shoe takes multiple steps. By the time the shoe is ready to wear, dozens of people might have worked on it.

Clark knew about this, and about the U.S. manufacturers' struggles with materials, parts and workers. But he also knew that history was already starting to repeat itself in China. Wages have been going up there. Footwear companies have been moving — yet again — to other countries, chasing lower costs.

This could be the opening for America's comeback, Clark thought. But for it to work, the process had to be simplified — maybe a dozen parts instead of 50 — and more automated. Maybe then, he said, the manufacturing could be "where the markets are, instead of where the labor is."

A few years back, he got a contract with a big brand and a grant to get started. He began with making top parts, or uppers, "that didn't involve a lot of labor," he said.

Footwear manufacturing has long included machines — cutting or gluing soles. But higher-level innovation? Ironically, factory owners said that's happening where the industry is — overseas.

Major brands, like Nike and Adidas, have been developing new technologies, including in U.S. But they still rely heavily on factory workers abroad. Because unlike humans, robots aren't nimble — they can't notice imperfections or quickly switch to a new fashion style.

"Robots are not forgiving," Clark said.

For Clark, the story had a frustrating end. Developing automation got very expensive and progressed more slowly than expected. He was draining his funds and agreed to sell his factory to a technology company, which knew a lot about robots. The factory is now closed.

Clark had signed a noncompete agreement, so now "I'm essentially retired unwillingly," he said. He had hoped his legacy would be reviving American shoe manufacturing. Instead, he is now in real estate.

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2019-06-19 11:07:00Z
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What's the future for cash? Target register outages prove physical loot still has its place - USA TODAY

Edward C. Baig USA TODAY

Published 6:45 AM EDT Jun 19, 2019

Does the use of cash have an expiration date?

The evidence that physical loot is on borrowed time is slowly but surely mounting. But don’t read the last rites for cash just yet.

If anything, the checkout register outages at Target stores over the weekend were a reminder that point-of-sale machines aren’t foolproof, and nothing beats cash when technology fails.

With that in mind, you may want to keep a modest stash handy.

Still, you’ve gotten quite comfortable leaving most bills and coins behind. More of you, in fact, are placing your smartphone or smart watch near the checkout registers to pay for this or that thing, using services such as Apple Pay or Google Pay. Your wallet, and any money stashed inside, remains in your pocket.

You’re equally cool, and so are your buddies, settling debts and swapping funds digitally, via the likes of Venmo, PayPal or Zelle. 

Americans generally are becoming less reliant on physical currency, with 29% of U.S. adults indicating in a recent Pew study that they make no purchases using cash during a typical week, up from 24% in 2015.

Facebook's cryptocurrency

You can’t help but look to the future assaults on cash either. At the very least you’re curious, if a long way from being sold yet, on the idea behind the Libra global “cryptocurrency” that Facebook announced Tuesday. The social network is pushing this alternate digital payment system with more than two-dozen financial and tech partners, including eBay, Uber, Lyft, PayPal, Spotify, Coinbase, Mastercard and Visa, and basing the pricing on other financial instruments.

Facebook currency: Would you trust Facebook with your money? What Libra cryptocurrency means for users

Yolo app: New Yolo anonymous Q&A app attracts millions of teenage users, has parents wary

Never mind that you’re still baffled by concepts such as Bitcoin and blockchain, and aren’t exactly thrilled with Facebook’s lousy reputation concerning privacy. That has to be a cause of concern for Facebook as it also launches a new subsidiary with plans for a crypto-digital wallet called Calibra, expected to launch on Messenger, WhatsApp and as a standalone app in 2020. 

You may even be wondering where you might carry cash someday, given the inevitable long-term demise of the Costanza-sized physical wallet. 

Sixty-eight percent of smartphone owners surveyed by SurveyMonkey Audience on USA TODAY’s behalf recently say it is likely that smartphones will eventually replace the need for wallets entirely. Nearly half (45%) think wallets will be obsolete in five years or less. 

How much cash should you keep for an emergency?

The Target episode proved that you shouldn’t count out cash. Some Target shoppers on Sunday reported that the stores could accept cash (or checks) but not process their credit cards, though this snag was much smaller than far bigger outages that took out Target registers a day earlier, which prevented payments via plastic, and yes, cash too. 

“I think (the Target episode) is a blip that everybody will quickly forget about,” says Greg McBride, chief financial analyst at Bankrate.com. “However, it is a reminder to all of us that we have to have a certain amount of cash just in case of isolated occurrences,” such as in the aftermath of a hurricane when the power goes out.

How much cash you should keep around for emergencies varies of course, depending on your circumstances. McBride, who frequently travels for business, says he keeps enough to hop in a cab to the airport.

Other people USA TODAY canvassed said they typically carry between $20 and $50, though the amount is sometimes less.

“The big picture still is you don’t want to have an overabundance of cash either in your pocket or stuffed under the mattress due to the risk of loss and theft. Plastic offers protections against those scenarios, cash does not,” McBride says.

As you would expect, Mastercard senior vice president for communications Seth Eisen makes a similar pitch.

“Electronic payments – the credit, debit and prepaid cards we’re all familiar with no matter what form they take – are an opportunity to provide people and businesses with greater security, greater transparency and greater certainty when they make a payment or are paid themselves,” he says. 

Cash is still king when it comes to the smallest purchases. Forty-five percent of consumers who own rewards credit cards polled last year by CreditCards.com were using cash for purchases under $10. That compared to 30% of consumers who use debit cards for such purchases, and 23% who use credit cards.

The survey also found that $25 was the median purchase total at which rewards cardholders indicated it made sense to use credit.

“I’m tempted to quote Mark Twain. The death of cash has been greatly exaggerated,” says McBride. “It’s definitely in decline and will continue to decline. When it goes away completely, it’s hard to put a time frame on it.”

Readers: Do you foresee giving up cash altogether? Email: ebaig@usatoday.com; Follow @edbaig on Twitter

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https://www.usatoday.com/story/tech/2019/06/19/cash-proves-its-worth-when-target-cash-registers-go-down/1490495001/

2019-06-19 09:30:00Z
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Dow futures pause as investors await Fed meeting - CNBC

U.S. stock index futures were marginally higher on Wednesday morning, as investors wait to hear from Federal Reserve Chairman Jerome Powell.

Around 6 a.m. ET, Dow futures indicated a positive open of nearly 20 points. Futures on the S&P and Nasdaq were both slightly higher, too.

There's a special focus on the outcome of the Federal Reserve meeting Wednesday. Not only are traders are keen to understand the chances of rate cuts this year, but they are also interested to know if President Donald Trump has any influence on the central bank.

The U.S. president, when asked Tuesday whether he wants to remove Jay Powell from his position, said "Let's see what he does." This comes after a Bloomberg News report argued that the White House looked into demoting the chairman of the Fed back in February. Larry Kudlow, director of the National Economic Council, told reporters Tuesday that Trump is not planning to demote Powell, however.

Earlier in the day, President Trump had accused ECB President Mario Draghi of currency manipulation, after the latter's speech at a conference in which he suggested that the European Central Bank could provide more stimulus if inflation does not pick up in the euro zone. Draghi responded later saying the central bank's remit is clear. "Our mandate is price stability defined as a rate of inflation which is close to but below 2% over the medium term," Draghi said.

Meanwhile, President Trump also said he will be having an "extended meeting" next week with the Chinese leader at the G-20 meeting in Japan.

There are no data items to note Wednesday.

In terms of corporate earnings, Oracle and Winnebago will be updating investors.

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https://www.cnbc.com/2019/06/19/dow-futures-modestly-higher-as-investors-await-fed-meeting.html

2019-06-19 06:26:09Z
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