Deutsche Bank sinks to $3.5 billion loss as overhaul costs hurt - CNN

Deutsche Bank (DB) said Wednesday that it took a charge of €3.4 billion ($3.8 billion) for the three months ending in June, leading to a net loss of €3.1 billion ($3.46 billion).

The performance was even worse than the bank had telegraphed: It said on July 7 that costs related to the overhaul would push it to a net loss of €2.8 billion ($3.1 billion) for the second quarter.

Shares dropped about 5% in Frankfurt on the news.

Without the restructuring cost, Deutsche Bank said it would have reported a net profit of €231 million ($257.4 million), down 42% on the same period last year.

"Excluding transformation charges the bank would be profitable and in our more stable businesses revenues were flat or growing," CEO Christian Sewing said in a statement.

But even that profit number was below what analysts had predicted.

Deutsche Bank is cutting 18,000 jobs and dramatically shrinking its investment bank as part of the overhaul. Sewing has described the plans as "nothing short of reinventing" Deutsche Bank.

For years, the lender has struggled to bring in consistent profits, and its stock hit an all-time low in June. But shifting the bank toward more reliable sources of revenue, such as corporate money management, is an expensive project. The transition is expected to carry a price tag of €7.4 billion ($8.3 billion) by 2022.

So far, more than 900 employees have either been given notice or informed that their role will be eliminated, according to the bank.

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https://www.cnn.com/2019/07/24/investing/deutsche-bank-net-loss/index.html

2019-07-24 08:11:00Z
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Technology giants' power to be probed in US - BBC News

The US Justice Department has announced an investigation into leading online platforms, examining whether they are unfairly restricting competition.

The DoJ did not name any firms, but companies such as Facebook, Google, Amazon and Apple are likely to be scrutinised in the wide-ranging probe.

It was sparked by "widespread concerns" about "search, social media, and some retail services online," the DoJ said.

It marks the latest scrutiny of tech firms' power over the US economy.

The DoJ has sweeping powers to investigate firms it suspects of breaching competition laws, and it can even break up companies that it thinks are too dominant.

The US Federal Trade Commission is already looking into similar concerns, while there are also investigations taking place in the European Union.

Last month, the Justice Department was reported to be preparing an investigation of Google to determine whether the search engine giant had broken anti-trust law.

The US Department of Justice said its anti-trust review would consider "whether and how market-leading online platforms have achieved market power and are engaging in practices that have reduced competition, stifled innovation or otherwise harmed consumers".

It is likely to examine issues including how the largest tech firms have grown in size and power, and expanded into additional businesses, as well as how they have used the powers that come with having very large networks of users.

"Without the discipline of meaningful market-based competition, digital platforms may act in ways that are not responsive to consumer demands," Assistant Attorney General Makan Delrahim, who heads the Anti-trust Division, said in a statement.

"The department's anti-trust review will explore these important issues."

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The Department of Justice hasn't said specifically which companies are under investigation, but it can be safely assumed Apple, Amazon, Facebook and Google will be the focus of their attention.

The broad question is whether newcomers are truly able to compete against the scale and riches of the Silicon Valley giants. What will make these firms nervous is that the DoJ isn't looking at any specific allegation, but instead embarking on a look at how the companies came to power, and what they've done to remain there.

This latest investigation is in addition to an ongoing probe by the US Federal Trade Commission into similar concerns, as well as investigations taking place in the European Union.

The tech companies insist they have viable competition, and warn that breaking up big American firms might pave the way for foreign competitors, particularly out of China.

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Google and Facebook now dominate online advertising as consumers use their smartphones to order food, watch films and socialise online.

Meanwhile the growing popularity of online shopping has boosted the fortunes of firms such as Amazon.

Daniel Ives, an analyst at research firm Wedbush Securities, said the DoJ investigation was a "major shot across the bows" of big tech companies.

However, he said the end result was likely to result in "business model tweaks" or in a worst-case scenario potential fines rather than forced break-ups of the underlying businesses.

Technology companies are facing a growing global backlash, driven by concerns that they have too much power and are harming users and business rivals.

Google and Apple declined to comment, while Facebook and Amazon did not immediately comment.

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2019-07-24 07:17:35Z
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Coca-Cola will sell an alcoholic drink nationwide in Japan after a successful test run - CNN

The company will officially launch the Lemon-do alcoholic soft drink in Japan in October, Coca-Cola spokesperson Scott Leith told CNN on Tuesday.

The lemon-flavored drink debuted in May 2018 in Kyushu, Japan's southernmost island, in three varieties ranging from 3% to 7% alcohol, Leith said.

It's modeled after Japanese "chu-hi," a popular canned drink made with a distilled alcohol called shochu, carbonated water and flavoring, Coca-Cola Japan business unit president Jorge Garduño said in February 2018.

Lemon-do is the company's first stab at hard seltzer, and it may be the only product of its kind for some time. Garduño said since the drink was created for a "specific slice" of Coca-Cola's market, it'll likely stay a Japanese exclusive.

"I don't think people around the world should expect to see this kind of thing from Coca-Cola," he said.

"I think the culture here is still very unique and special, so many products that are born here will stay here."

The company has higher hopes for the mass appeal of its new coffee product. Coca-Cola With Coffee, a riff on 2006's unsuccessful Coca-Cola Blak, will launch in 25 international markets by the end of 2019, the company told CNN in May.

Unlike the Japanese spiked seltzer, the coffee concoction actually contains Coke and a hefty dose of caffeine. It's not guaranteed, but Javier Meza, the company's global chief marketing officer of sparkling beverages, said that it could see a US debut as soon as 2020.

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2019-07-23 17:39:00Z
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These dividend stocks haven’t been scooped up by investors yet - MarketWatch

Easy-money policies of global central banks have made dividend stocks more important than ever for investors who need income.

The U.S. Federal Reserve, European Central Bank, Swiss National Bank and other central banks around the world are in loosening mode, which is pushing down interest rates and inadvertently hurting income investors. On the other hand, U.S. stock prices are near record highs.

So a prudent strategy for dividend investors might be to scour the U.S. for underperforming shares of companies that generate enough cash to cover payouts.

Fed frenzy

Investors are convinced the Federal Open Market Committee will start a new round of interest-rate cuts as early as July 31. There has been plenty of discussion in the financial media about the Fed needing to “compete” with other central banks, whose policies have led to $13 trillion in bonds with negative yields. As absurd as that might seem, especially when developed economies aren’t in recession, this type of craven monetary policy has gone mainstream. (Here’s an IMF working paper touting the use of negative interest rates to spur economic growth during recessions.)

OK, fine. But how will that work when rates in so much of the developed world are already negative?

In his daily Out of the Box commentary, Mark Grant, B. Riley’s chief global strategist for fixed income, wrote on July 22 that the negative yields exist “for one reason only, and it is because the nations of the European Union, Switzerland and Japan have mandated that their central banks take rates to these levels so that their countries can survive.”

Grant elaborated in a later commentary: “Most nations in Europe cannot afford their budgets, or their social programs, and have lost their ability to raise taxes without having their politicians thrown into the streets, and so they manufactured money in their computer rooms and lowered the yield on their bonds, to less than zero, in many cases.”

All this, with low inflation. If you are planning to retire 10 years from now and fund a significant portion of your expenses with interest or dividend income from savings or investments, you may have to change your plans. Unless inflation quickens and forces a complete change in central banks’ policies, interest rates and dividend yields may be too low for a simple change “from growth to income” to fund your golden years.

This is why in March we listed stocks of companies with very long track records for dividend increase that had recently increased their payouts significantly.

Another piece features two money managers’ approaches to building portfolios of stocks with rising dividends.

How to get higher dividend income now

The Federal Open Market Committee’s last policy statement June 19 fed the current rate-cut frenzy. There was a clear change in the market that has helped push the S&P 500 SPX, +0.29%  and Dow Jones Industrial Average DJIA, +0.32% to new highs, while prices for bonds and preferred stocks soared.

Here are large lists of dividend stocks that have the highest yields, with payouts comfortably supported by free cash flow published during the June 18-19 FOMC meeting.

A new list of potential bargains

One reason U.S. stocks have performed so well this year is that the S&P 500 Index SPX, +0.29%  itself has a dividend yield of 1.95%, according to FactSet. For someone expecting a yield above 5%, that is not very impressive, but it’s infinitely higher than a negative-yielding European government bond and not far behind the yield on 10-year U.S. Treasury notes TMUBMUSD10Y, +0.17%

With the benchmark index rising 19% this year through July 19 (excluding dividends), you would be hard-pressed to find high-yield dividend stocks in the S&P 500 that have fallen this year. But it turns out there are 25 with dividend yields higher than 3% with payouts that are in most cases well-supported by free cash flow, earnings per share (for banks) or funds from operations (for real-estate investment trusts) that also haven’t cut their dividends for at least five years.

Here’s the list, sorted by dividend yield, with more explanations below:

Company	Ticker	Industry	Price change - 2019 through July 19	Dividend yield	Free cash flow yield	‘Headroom’
Macerich Co.	MAC, +1.08%	Real-estate investment Trusts	-25%	9.30%	11.50%	2.20%
Macy's Inc.	M, +0.54%	Department Stores	-26%	6.83%	9.39%	2.55%
Newell Brands Inc.	NWL, -0.46%	Industrial Conglomerates	-23%	6.42%	8.76%	2.34%
AbbVie Inc.	ABBV, +0.16%	Pharmaceuticals	-26%	6.24%	12.96%	6.72%
Occidental Petroleum Corp.	OXY, -1.53%	Oil & Gas Production	-15%	6.04%	6.13%	0.09%
Kohl's Corp.	KSS, +0.02%	Department Stores	-26%	5.43%	15.29%	9.86%
Simon Property Group Inc.	SPG, +0.81%	Real-estate investment Trusts	-7%	5.18%	7.86%	2.68%
Gap Inc.	GPS, -1.34%	Apparel/ Footwear Retail	-27%	5.17%	5.60%	0.44%
WestRock Co.	WRK, +3.50%	Containers/ Packaging	-4%	5.02%	12.26%	7.24%
Nordstrom Inc.	JWN, -1.74%	Apparel/ Footwear Retail	-36%	4.98%	12.45%	7.47%
Tapestry Inc.	TPR, +0.78%	Apparel/ Footwear Retail	-10%	4.46%	8.48%	4.02%
Molson Coors Brewing Co. Class B	TAP, +3.15%	Beverages: Alcoholic	-3%	4.18%	10.77%	6.60%
Kellogg Co.	K, +2.75%	Food: Major Diversified	-1%	3.96%	4.04%	0.08%
Wells Fargo & Co.	WFC, +1.93%	Major Banks	0%	3.91%	10.52%	6.61%
Marathon Petroleum Corp.	MPC, +0.71%	Oil Refining/ Marketing	-6%	3.84%	10.37%	6.53%
Bristol-Myers Squibb Co.	BMY, -0.40%	Pharmaceuticals: Major	-17%	3.78%	7.39%	3.60%
Foot Locker Inc.	FL, -0.33%	Apparel/ Footwear Retail	-21%	3.62%	10.85%	7.24%
CVS Health Corp.	CVS, +0.40%	Drugstore Chains	-15%	3.58%	8.49%	4.92%
Pfizer Inc.	PFE, +0.37%	Pharmaceuticals	-2%	3.37%	5.46%	2.09%
Walgreens Boots Alliance Inc.	WBA, +0.24%	Drugstore Chains	-20%	3.36%	9.00%	5.64%
3M Co.	MMM, +1.41%	Industrial Conglomerates	-9%	3.34%	5.59%	2.25%
Amgen Inc.	AMGN, -0.01%	Biotechnology	-8%	3.25%	8.70%	5.45%
NetApp Inc.	NTAP, -0.44%	Computer Peripherals	0%	3.23%	7.89%	4.66%
Genuine Parts Co.	GPC, -0.52%	Wholesale Distributors	-1%	3.20%	5.14%	1.93%
State Street Corp.	STT, +0.29%	Regional Banks	-5%	3.13%	9.17%	6.04%
Source: FactSet

A company’s free cash flow is its remaining cash flow after planned capital expenditures. This is money that can be used to pay dividends, buy back shares, expand organically, fund acquisitions or for other corporate purposes. For the above list, free cash flow per share is for the most recent four quarters reported through July 19. If we divide free cash flow per share by the current share price, we have the free cash flow yield, which can be compared with the current dividend yield to see if there appears to be “headroom” to increase the dividend.

For the banks, free cash flow per share data isn’t available, so we used earnings per share, which for banks is generally considered to be an accurate reflection of cash flow.

For real-estate investment trusts, we used funds from operations (FFO). FFO is a non-GAAP calculation that adds depreciation and amortization back to earnings per share, while subtracting gains on the sale of real estate. In the REIT industry, FFO is generally considered to be an accurate estimate of a REIT’s dividend-paying ability.

If free cash flow yields were calculated for the two REITs on the list instead of FFO, then for Macerich MAC, +1.08%  a free cash flow yield of 6.32% would mean “negative headroom” of 2.98%. By this measure, Macerich didn’t generate enough cash over the past 12 months to cover its dividend. For Simon Property Group SPG, +0.81% a free cash flow yield of 7.07% would leave “headroom” of 1.89%, showing the dividend well-covered under this calculation method.

Both REITs own shopping malls, which may explain why investors have been shying away from them, even though both have been steadily increasing their dividend payouts.

Cash flow to cover dividends is very important, especially when looking at a group of companies that may be slow growers or may even have suffered recent sales declines. This isn’t a list of growth stocks.

You can click on the tickers for more about each company, including news coverage. You should certainly do a lot more research before buying any stock. You not only need to understand what may be driving this year’s underperformance, you need to be confident in their ability to continue operating and supporting these (or higher) dividends for many years to come.

Here’s a summary of sell-side analysts’ opinions of these companies. Keep in mind that this group of analysts bases its recommendations on 12-month price targets and that a year is a short period for a serious long-term investor looking to generate dividend income.

Company	Ticker	Share 'buy' ratings	Share neutral ratings	Share ‘sell’ ratings	Closing price - July 19	Consensus price target	Implied 12-month upside potential
Macerich Co.	MAC, +1.08%	22%	67%	11%	$32.26	$41.24	28%
Macy's Inc.	M, +0.54%	19%	56%	25%	$22.10	$23.50	6%
Newell Brands Inc.	NWL, -0.46%	15%	85%	0%	$14.33	$18.77	31%
AbbVie Inc.	ABBV, +0.16%	30%	70%	0%	$68.54	$81.63	19%
Occidental Petroleum Corp.	OXY, -1.53%	15%	85%	0%	$52.33	$60.31	15%
Kohl's Corp.	KSS, +0.02%	50%	40%	10%	$49.33	$61.41	24%
Simon Property Group Inc.	SPG, +0.81%	71%	29%	0%	$156.44	$189.53	21%
Gap Inc.	GPS, -1.34%	12%	72%	16%	$18.78	$21.63	15%
WestRock Co.	WRK, +3.50%	40%	53%	7%	$36.23	$46.21	28%
Nordstrom Inc.	JWN, -1.74%	13%	74%	13%	$29.72	$35.88	21%
Tapestry Inc.	TPR, +0.78%	82%	18%	0%	$30.30	$43.15	42%
Molson Coors Brewing Co. Class B	TAP, +3.15%	42%	42%	16%	$54.59	$64.19	18%
Kellogg Co.	K, +2.75%	25%	55%	20%	$56.58	$57.89	2%
Wells Fargo & Co.	WFC, +1.93%	26%	61%	13%	$46.03	$48.80	6%
Marathon Petroleum Corp.	MPC, +0.71%	95%	5%	0%	$55.24	$78.35	42%
Bristol-Myers Squibb Co.	BM, +3.81%	50%	50%	0%	$43.33	$56.00	29%
Foot Locker Inc.	FL, -0.33%	58%	32%	10%	$42.04	$57.89	38%
CVS Health Corp.	CVS, +0.40%	65%	35%	0%	$55.94	$67.96	21%
Pfizer Inc.	PFE, +0.37%	69%	31%	0%	$42.77	$47.00	10%
Walgreens Boots Alliance Inc.	WBA, +0.24%	14%	72%	14%	$54.44	$58.42	7%
3M Co.	MMM, +1.41%	18%	70%	12%	$172.61	$177.27	3%
Amgen Inc.	AMGN, -0.01%	50%	50%	0%	$178.39	$205.53	15%
NetApp Inc.	NTAP, -0.44%	46%	40%	14%	$59.42	$70.19	18%
Genuine Parts Co.	GPC, -0.52%	15%	85%	0%	$95.18	$102.90	8%
State Street Corp.	STT, +0.29%	36%	55%	9%	$60.08	$64.78	8%
Source:FactSet

Don’t miss: Big banks’ earnings reports point to near-term pain and long-term opportunity

Create an email alert for Philip van Doorn’s Deep Dive columns here.

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2019-07-23 12:30:00Z
CAIiEMbcAczfD_ZoWh_FxDStzNEqGAgEKg8IACoHCAowjujJATDXzBUwiJS0AQ

Orange Vanilla and New Coke are giving Coca-Cola a boost - CNN

The beverage company said on Tuesday that net revenues grew 6% to $10 billion in the second quarter, attributing the growth in part to innovations within the classic Coke brand. Sparkling soft drinks grew 3% for the quarter, the company said, driven by 4% growth in Coke.

Shares of the company rose nearly 3% on the results.

Although Coca-Cola (KO) strives to be a "total beverage company" by acquiring juice and seltzer brands and coming up with new products within those categories, it also needs to make sure that people don't abandon it's most recognizable product.

To do that, it has launched new flavors, like Orange Vanilla Coke, as well as new platforms, like Coca-Cola with Coffee and a Coca-Cola energy drink (those two are available only internationally, for now).

Coca-Cola said its energy drink, which is sold in 14 countries, is showing early signs of success. By the end of the year, Coca-Cola plans to make it available in 20 markets.

In addition to the new lines, stunts also raise interest in the signature product. When Disney opened it's new "Star Wars" theme park, it sold custom bottles of Coca-Cola, Diet Coke, Sprite and Dasani that looked like Droids. And the company brought back New Coke for a limited time as a promotion for Netflix's "Stranger Things."

Low-sugar Coke products are also performing well. Coke Zero Sugar, a consistent sales driver, grew double-digits by volume for the seventh quarter. The company also unveiled a sleek new look and trendy flavors within Diet Coke in 2018.

Coca-Cola is also making progress with its line of ready-to-drink coffees. The beverage company completed its acquisition of the UK coffee chain Costa earlier this year, and has since launched a canned coffee line under the Costa brand in Great Britain.

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2019-07-23 12:24:00Z
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Alibaba welcomes U.S. small businesses to sell globally on its platform - Reuters

NEW YORK (Reuters) - Chinese e-commerce giant Alibaba Group Holdings Ltd (BABA.N) will now allow small businesses in the United States to sell on Alibaba.com, the company said on Tuesday, an effort to tap into the business-to-business e-commerce market and fend off fierce competition from rivals like Amazon.com Inc (AMZN.O).

FILE PHOTO: A logo of Alibaba Group is seen at an exhibition during the World Intelligence Congress in Tianjin, China May 16, 2019. REUTERS/Jason Lee/File Photo

Previously, U.S.-based businesses were only able to buy items on Alibaba.com.

Roughly one-third of buyers on Alibaba.com are U.S.-based. More than 95% of sellers come from China. This plan will open up markets to U.S. merchants in countries including India, Brazil and Canada. U.S. merchants will also be able to sell to other U.S.-based businesses.

Alibaba’s pitch to U.S. small businesses comes as the company faces lean e-commerce revenue growth, which has been further threatened by the U.S.-China trade spat and increased competition from rivals such as recently listed Pinduoduo Inc (PDD.O).

Alibaba, which does not sell inventory of its own, hopes to win over local U.S. businesses as their marketplace platform of choice by offering small- and medium-sized businesses global selling power. Alibaba highlighted its interest in winning over manufacturers, wholesalers and distributors.

Last month, the company launched an English-language website for its Tmall Global marketplace aimed at merchants, in an attempt to double the number of international brands on the platform to 40,000 in the next three years.

Rival Amazon, in addition to selling its own inventory, allows third-party vendors to list products for sale on its website. Those vendors may store their products in Amazon’s warehouses or ship directly to customers.

The business-to-business e-commerce market (B2B) is valued at $23.9 trillion, according to the U.S. International Trade Commission. The business-to-consumer e-commerce market is valued at $3.8 trillion.

Alibaba said U.S. sellers will have to pay a membership fee of roughly $2,000 to get their online stores on Alibaba.com up and running, in addition to any marketing and advertising costs. Amazon charges third-party sellers by the month or per item.

“You get to compete and act like a multinational company in a way you’ve never had the tools or technology to be able to do so,” John Caplan, head of North America B2B at Alibaba Group, told Reuters.

The United States is the first market where the company is focusing on globalizing supply, Caplan said, but Alibaba has a “very clear approach to other markets.”

Reporting by Melissa Fares in New York; Editing by Leslie Adler

Our Standards:The Thomson Reuters Trust Principles.

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2019-07-23 11:35:00Z
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Coca-Cola raises revenue forecast after earnings beat, sending shares higher - CNBC

Ramin Talaie | Getty Images

Coca-Cola on Tuesday reported quarterly earnings and revenue that beat analysts' expectations, driven by sales of its namesake soda brand.

Shares of the company jumped 1.5% in premarket trading.

"Our strategy to transform as a total beverage company has allowed us to continue to win in a growing and vibrant industry," CEO James Quincey said in a statement.

Here's what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

• Earnings per share: 63 cents, adjusted, vs. 61 cents expected
• Revenue: $10.00 billion vs. $9.99 billion expected

The beverage giant reported fiscal second-quarter net income of $2.61 billion, or 61 cents per share, up from $2.32 billion, or 54 cents per share, a year earlier.

Excluding items, Coke earned 63 cents per share, topping the 61 cents per share expected by analysts surveyed by Refinitiv.

Net sales rose 6% to $10.00 billion, narrowly beating expectations of $9.99 billion. Coke raised its full-year outlook for revenue and now expects organic revenue growth of 5%.

It reiterated its fiscal 2019 earnings forecast, saying that earnings per share could fall or rise by 1%. 

The company attributed its strong performance during the quarter to 4% volume and transaction growth in Coke's namesake brand. Its Zero Sugar line once again saw double-digit volume growth across the globe.

During its second quarter, Coke partnered with Netflix to bring back New Coke to promote the third season of "Stranger Things" and rolled out Coca-Cola Plus Coffee in more markets, as the company expands into different kinds of caffeinated drinks.  

Coke also rolled out its first energy drink under the Coca-Cola brand during the quarter. Coca-Cola Energy uses caffeine from naturally derived sources and is available in 14 countries, including Japan and South Africa. By the end of 2019, the beverage giant plans to bring it to Mexico, Brazil and four more countries. Coke has not shared any plans yet to sell Coca-Cola Energy in the U.S. since an arbitrator ruled in July that it can peddle the energy drink under the terms of its contract with Monster Beverage.

The company has also launched its first product line with Costa Coffee since it acquired the U.K. coffee brand for $5.1 billion. The canned coffee drinks contain double shots of espresso and will launch in Poland and China by the end of the year. There are no plans to introduce the ready-to-drink coffee beverages in the U.S.

This story is developing. Please check back for updates.

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2019-07-23 11:03:03Z
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