Sabtu, 09 November 2019

Scandinavian Wine? A Warming Climate Tempts Entrepreneurs - The New York Times

SKAERSOGAARD, Denmark — On a mild autumn morning, Sven Moesgaard climbed a sunbathed hill and inspected an undulating expanse of neatly planted vines. A picking crew was harvesting tons of hardy Solaris grapes that he would soon turn into thousands of bottles of crisp white and sparkling Danish wine.

A decade ago, winemaking was regarded as a losing proposition in these notoriously cool climes. But as global temperatures rise, a fledgling wine industry is growing from once-unlikely fields across Scandinavia, as entrepreneurs seek to turn a warming climate to their advantage.

“We’re looking for the opportunities in climate change,” said Mr. Moesgaard, the founder of Skaersogaard Vin, cradling a cluster of golden grapes. “In the coming decades, we’ll be growing more wine in Scandinavia while countries that have traditionally dominated the industry produce less.”

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Credit...Charlotte de la Fuente for The New York Times

Nordic vintners are betting that they can develop what were once mainly hobbyist ventures into thriving commercial operations. The dream is to transform Scandinavia into an essential global producer of white wines, which are beginning to flourish along Europe’s northern rim.

The growth has been rapid: Denmark now boasts 90 commercial vineyards, up from just two 15 years ago, and around 40 have sprung up in Sweden. Nearly a dozen vineyards are operating as far north as Norway.

But many are in the start-up stage and are tiny compared with established wineries in Europe, which has 10 million acres of vineyards — enough to cover almost all of Denmark. Producers in France, Italy and Spain own three-quarters of that land, dominating the European industry. By contrast, Denmark and Sweden have European Union approval to grow less than 1,000 acres of vineyards, and questions persist about quality and price.

“We’re still a drop in the bucket,” said Hans Münter, the head of the Danish Wine Association. “Right now, we don’t have the volume to evaluate if this is a good business or just a business.”

Yet in 50 years, Scandinavia’s climate is forecast to be more like northern France’s, as regional temperatures climb as much as 6 degrees Celsius. In the last decade alone, warming has produced milder winters, a longer growing season — and a small but rising number of award-winning wines.

“You’re seeing a natural progression of pioneers looking for cool climate limits for viticulture, and we will likely see more development,” said Gregory Jones, a climatologist who is the director of the Evenstad Center for Wine Education in Oregon. “Whether a strong vibrant industry will emerge, time will tell.”

Nordic vintners are emboldened to invest as they watch Southern European wine producers struggle with a more volatile climate. Grapes, including sensitive varieties used for white wine, burned on the vine this summer in parts of France, Spain and Italy as temperatures topped 105 degrees Fahrenheit.

Climatologists say the global wine map could be transformed by 2050. Dominant producing countries in Europe and Latin America, along with parts of California and Australia, may become too hot to grow grapes, while areas not traditionally known for winemaking — including China — take off.

Winemakers in France are experimenting with grapes from warmer countries like Tunisia to see if they can retain the blockbuster tastes and yields that generate billions of euros in worldwide sales. Spanish and Italian winemakers are planting higher on mountainsides or on shaded north-facing slopes to keep wine flavors recognizable.

But half a century from now, those regions may no longer be a safe haven, while the climate for growing in Denmark and neighboring countries may improve. Already, winemakers here are credited with creating white wines with crisp, structured flavors that are fading in southern climes where heat is reducing grape acidity.

“We’re trying to define the Nordic style of wine,” said Tom Christensen, who founded Dyrehoj Vingaard, Denmark’s largest winery, a decade ago with his sister, Betina Newberry. That includes investing in grape varieties with an acidic, fresh quality and an organic production without pesticides and sprays.

“People expect Nordic products to be cleaner,” he said.

The winery, on the lush Rosnaes peninsula, produces 50,000 bottles of premium white and sparkling wines, and he plans to expand. “If I had a Spanish vineyard, I’d hedge my bets by buying land here,” Mr. Christensen said. “In 20 years, you’d have a leading business in Europe.”

The hurdles are steep. Rising temperatures have improved growth conditions but are increasingly volatile, bringing acute heat one year and excess rain the next. That makes for uneven harvests. The amount of wine produced is still small, and most is consumed domestically, leaving little for export. Revenue from wine in Denmark, Norway and Sweden was an estimated €14 million this year, compared with €28 billion in France.

More wine will have to be produced for an industry to be sustainable, said Odd Wollberg, a winemaker in Norway. Mr. Wollberg, a former mechanic, and his wife took over the Lerkekasa Vingard winery, once considered Europe’s northernmost vineyard, in December from owners who planted vines a decade ago. Nearly a dozen other vineyards were established nearby in recent years.

So far, Mr. Wollberg has squeezed just 350 liters of wine from Riesling and other cool-weather grapes, and he is losing money. But volumes could surge with an improving climate, he said.

“If it gets warmer, we can produce more, and more wineries will open when people see that others have succeeded,” he said.

To capture consumers, though, the price must drop. Nordic wines average €30 to €40 ($33 to $44) a bottle because of labor costs that are triple those in France, Italy and Spain. Southern winemakers also get billions in European Union subsidies, which help them improve pricing and dominate the market. Denmark won European Union approval for winemaking only by promising to forgo subsidies.

Some experts say that the quality does not yet justify the cost, and that investments in grapes that will produce superior tastes in the Nordic climate are needed. At Fiskebaren, a bustling seafood restaurant in Copenhagen, only two out of nearly 300 wines offered are Danish.

“They’re improving, but they still have a ways to go,” said Frederik Kordt Lassen, the chief sommelier.

In Sweden, winemakers are looking to build business by refining the wine. “People now are just happy they can produce something drinkable,” said Sveneric Svensson, head of the Swedish Wine Association. Businesses are “focusing on optimizing the quality” by advancing vine management and winemaking techniques, he said.

Nordic vintners point to southern England, where a world-class sparkling wine industry has emerged around a warming climate. Companies including Taittinger of France have invested in land in Britain to hedge against the effect of temperature spikes in Champagne.

Mr. Moesgaard, who produces 20,000 bottles a year — including 6,000 bottles of bubbly — is betting that foreign wine houses will one day do the same in Denmark. His Don’s label, named after the Dons region where his vines are planted, won high ratings from the wine critic Robert Parker and at festivals in France and Germany — proof, he said, that quality is there.

Last year, the European Union approved 1,200 acres near his property to be labeled authentic terroir for producing distinctive wines. He purchased 185 acres of that land, which will allow him to double output, and is hoping that daring wine pioneers will cultivate the rest.

“It’s an investment in the future,” he said, eyeing a tract of rolling green hills quilted with vines.

The hills sloped toward a majestic fjord, where cows grazed on a grassy meadow and fishermen caught trout under gold-leafed birch trees. The land near the fjord was damp and muddy. But on the hills where his vines are planted, the soil was sandy with stones and no clay — good for growing grapes.

“We are going to produce wine where it was not possible before,” Mr. Moesgaard said. “No one can say they are happy about climate change,” he added. “But we should take advantage of the opportunities it brings.”

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https://www.nytimes.com/2019/11/09/business/wine-scandinavia-climate-change.html

2019-11-09 08:00:00Z
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This Red Alert Is Now Flashing Bright on the Bond Trader’s Radar - Bloomberg

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  1. This Red Alert Is Now Flashing Bright on the Bond Trader’s Radar  Bloomberg
  2. This Red Alert Is Now Flashing on the Bond Trader’s Radar Screen  Yahoo Finance
  3. View full coverage on Google News

https://www.bloomberg.com/news/articles/2019-11-09/this-red-alert-is-now-flashing-bright-on-the-bond-trader-s-radar

2019-11-09 05:00:00Z
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Jumat, 08 November 2019

A Recession Warning Reverses, but the Damage May Be Done - The New York Times

The message from Wall Street is clear: The American economy is not in the kind of trouble that investors feared earlier this year.

Stocks are at all-time highs and climbing. Yields on long-term government bonds, which reflect expectations for growth and inflation, are also rising. Corporate bond spreads show that investors are more confident in the prospects for businesses.

Then there’s the yield curve, an indicator from the bond market that just a few months ago set off alarms about the risk of a recession. It has gone back to normal, and that signal has been met with relief in the markets.

But as far as the economy is concerned, it might not matter. Once the yield curve has predicted a recession, one usually follows even if that signal changes later.

To understand why, it’s important to remember what the fuss over the yield curve was about in the first place.

The yield curve measures the difference between interest rates on short-term government bonds and long-term government bonds (like three-month Treasury bills and 10-year Treasury notes).

Usually, long-term interest rates are higher because, like any borrower, the government ought to be paying more to borrow for 10 years than for three months. But every once in a while, things get flipped around in the bond market and short-term interest rates rise above the long term, in a sign that investors expect slower economic growth or interest rate cuts — or both.

When it does, the yield curve becomes what economists call “inverted.” It happened this year, starting in March, and it got attention because an inverted yield curve is considered one of the financial world’s most reliable predictors of a recession.

In fact, each recession of the last 60 years was preceded by a yield curve inversion.

So the return to normal, what’s referred to as a “steep” yield curve, is being taken as a good sign.

“A steep curve is a signal that people think that the future is bright, and that is very important to investors,” said Jonathan Golub, chief United States equity strategist at Credit Suisse Securities. “This was an incredibly important thing for us to see.”

It’s important to note that the mood in financial markets can change overnight, and that all these feel-good signals could evaporate if investors are confronted with evidence that they’re wrong.

The recent optimism overlooks the fact that economists continue to see the global economy, including in the United States, decelerating as trade slows and manufacturing contracts.

But there are some reasons investors are right to relax a little, after months of anticipating the damage of the trade war on the United States economy: The job market is holding up, corporate profit reports have been better than expected, and the hope is that the Federal Reserve’s decision to cut interest rates three times so far this year will help keep things going.

Lately, officials in Beijing and Washington have telegraphed that they’re making progress in de-escalating the trade war. On Thursday, yields on the 10-year Treasury note rose to their highest level since July, and the S&P 500 closed at a new high.

Those who have studied the yield curve and its relationship to the economy stress that, historically speaking, it doesn’t matter if the yield curve returns to normal. The recession predictor is that it inverted at all — though the downturn can take as long as two years to arrive.

“In a way, the damage is done,” said Campbell Harvey, a Duke University finance professor whose research first showed the predictive power of the yield curve in the mid-1980s. “If you look at the track record, if you’ve got an inversion, there is a recession that follows.”

One reason is that the yield curve has a real-world impact on the banking system. Banks borrow money at short-term rates and then lend it out — in a 30-year home mortgage, for example — at long-term rates.

So when short-term rates are higher than long-term rates, bank profits are crushed and they cut back on lending. That’s bad news for the economy.

Then there’s the market’s feedback loop, which can stymie decision-making by executives, discouraging new investments.

“When the yield curve is inverted, investors pull in risk taking,” Mr. Golub of Credit Suisse said.

Mr. Harvey stressed, however, that history didn’t always repeat precisely.

And this time, something is slightly different. Since the yield curve inverted, the Fed’s three rate cuts have largely been seen as effective ways to keep the economic expansion rolling.

The first of those, in July, came just a few months after the yield curve first inverted.

That’s a marked difference from the last time the yield curve inverted, in 2006. Then it was roughly a full year before the Fed began to lower short-term rates. (The last recession began in December 2007.)

“In the face of the inversion, it did nothing,” Mr. Harvey said, referring to the Fed. “This inversion, they actually did cut.”

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https://www.nytimes.com/2019/11/08/business/yield-curve-recession-indicator.html

2019-11-08 14:16:00Z
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Price of Gold Fundamental Daily Forecast - There's A Lot of Air Between $1465.00 and $1412.00, The Next Downside Target - FX Empire

Gold futures are trading lower on Friday as rising Treasury yields continue to offset the precious metal’s appeal as an investment. Let’s face it, gold is an investment that doesn’t pay interest or a dividend to hold. So why buy it when yields are rising? That’s what investors are saying at this time.

At 12:34 GMT, December Comex gold is trading $1457.60, down $8.80 or -0.58%.

Gold is currently in a position to post its worst weekly loss since May 2017. The selling pressure represents a major shift in investor sentiment, which could lead to a test of its August 1 low of $1412.10.

Why did we pick August 1? Because that’s the day that U.S. 10-year Treasury yields hit a 2.06 percent yield, the highest level in more than three months. It was a big day for the USD/JPY also. It hit a high of 109.317 that day before plunging to 104.463 on August 26.

Do you see the connections? The 10-year Treasury Note bottomed on August 1 along with gold and the Japanese yen. At that time, it was the fear of a recession driving the price action. Furthermore, the Fed just made the first of its three rate cuts on July 31.

Now that the Fed has announced its “mini-rate cut” cycle is over and other major central banks have signaled that their easing phases are probably over, there is no longer the fear of a recession in the market and therefore, no reason to own gold as protection.

Based on this assessment, it stands to reason that gold will continue to weaken over the short-run with its August 1 bottom at $1412.10 the primary downside target. If it reaches this level then the aforementioned markets will be in sync until another force comes along to drive the price action.

Daily Forecast

I wouldn’t say gold is bearish, but I do think it’s overpriced relative to T-Notes and the Japanese Yen. So I’m looking for further downside action.

The key story driving the price action is the easing of tensions between the U.S. and China. Barring a few snags along the way, a deal is expected to be completed although no one knows when or where the agreement will be signed.

Of course, at this time, no one is taking protection against a collapse in the trade talks, which is why the markets are moving smoothly and trending. A breakdown in talks will certainly shock the markets, but this is the only reason why gold prices could rally over the near-term. As long as the U.S. and China continue to work towards a trade deal and yields continue to rise, there is no compelling reason to buy gold. If you do feel inclined to buy gold then wait until it hits a value area between at least $1412.10 and $1396.40.

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https://www.fxempire.com/forecasts/article/price-of-gold-fundamental-daily-forecast-theres-a-lot-of-air-between-1465-00-and-1412-00-the-next-downside-target-611455

2019-11-08 13:06:51Z
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Black Friday: 6 Amazon Prime membership benefits that will help you shop - CNET

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Your Amazon Prime benefits make Black Friday shopping easier.

Sarah Tew/CNET

Black Friday, a time to shop huge sales online and in stores, is almost here and Amazon already has its early deals ready to go Nov. 22. If you've got an Amazon Prime membership, you'll want to know how to take full advantage of the benefits

For example, while you probably know you can get free two-day shipping as a Prime member, did you know you can also get packages sooner, or schedule a delivery date that's more convenient for you?

Black Friday and Cyber Monday have become two of the biggest shopping days of the year, with retailers fighting for your dollar through sales and perks. Amazon's enormous catalog, loyal subscriber base and massive shipping empire put it in a position to be extra aggressive in getting your business. Here are all the ways the Prime membership you already have can help you shop this Nov. 29 and Dec. 2.

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Schedule a convenient shipping date during checkout with Amazon Day.

James Martin/CNET

Schedule a convenient shipping date for your package

Everyone knows about Amazon's free two-day shipping, but another option is to choose a delivery date during checkout. It's called Amazon Day and it's helpful if there's a specific day you know someone will be at home to answer for packages -- especially if it's something pricey that you don't want to risk sitting outside unattended. 

If you order multiple items on different days, you can have them delivered on the same day as long as they're eligible for this offer.

If you have an Amazon Echo of any kind, you can use it to track your orders. 

Just say "Alexa, where's my package?" and yuor Echo will let you know where it is and when it'll arrive. Once your order has been delivered, the Echo's ring light will pulse yellow.

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Use any Amazon Echo to track your packages.

Sarah Tew/CNET

Shop Early Access deals before non-Prime members

If something you've been eyeing says "Prime Early Access," as a Prime member, you can shop that sale 30 minutes before non-Prime members. However, you'll have to compete with other members who are also interested in the product before it sells out.

Now playing: Watch this: How to win Black Friday and Cyber Monday in 2019

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Use Prime Now to get what you ordered in a couple of hours

If there's a product you want same-day, you can see if it's available in Prime Now. Amazon will deliver from morning until evening, so you won't have to worry about receiving your order at 3 a.m. 

This way of shopping is nifty for when you really need to go to the grocery, but can't risk losing out on that new item, like a fresh Echo device that might go on sale. Prime Now isn't available in all locations, so enter your ZIP code at primenow.amazon.com to see if you're eligible.

Share your Prime perks with family

If you've got another adult living in your household, like a significant other or friend, you can share your Prime membership with them. You'll still be able to keep your personal accounts separate, which is helpful if you're shopping for the holidays, but you'll both have access to all the same Prime benefits. 

You can also share your account with up to four teens and up to four children in your household. While they'll have their own logins, you can still manage their profiles.

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Amazon employees can leave a package inside your house with Amazon Key.

Tyler Lizenby/CNET

Amazon can leave your package inside your house

When you know you're not going to be home for a while and you've got a shipment on the way, it's much safer to have an Amazon employee leave your items inside your house to avoid theft. 

If you have the Amazon Key Home Kit, you can request to have your expensive packages left in your home, and even your vehicle or garage, for free. The kit itself costs $290 and comes with a cloud cam ($80 at Amazon) and a smart lock, so you'll be in charge of letting the delivery person in and can watch as it's happening.

If you're wary of letting a complete stranger in your home, keep in mind that you'll also receive notifications during the entire process. 

These Prime benefits just scratch the surface of Amazon's Black Friday and Cyber Monday extravaganza. Check out the best Amazon early Black Friday deals and all the Black Friday Amazon device sales revealed.

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https://www.cnet.com/how-to/black-friday-6-amazon-prime-membership-benefits-that-will-help-you-shop/

2019-11-08 12:00:01Z
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As WeWork Grew, Wall Street Lent It Money and Credibility - The Wall Street Journal

‘If the largest lender in this country can get comfortable with this, then everybody should,’ We Co. founder Adam Neumann said. Photo: Noam Galai/Getty Images

Banks jockeying for a role in WeWork’s public debut wooed founder Adam Neumann with sky-high valuations that would make him a billionaire many times over. Their loans to the company told a different story.

JPMorgan Chase & Co., Goldman Sachs Group Inc. and other banks arranged giant fees and strict protections that reflected their concerns about WeWork’s unproven business model and Mr. Neumann’s unpredictable behavior.

When Wells Fargo & Co. signed on to a $6 billion loan earlier this year, Mr. Neumann said: “If the largest lender in this country can get comfortable with this, then everybody should.”

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Yet Wells Fargo, the fourth-largest U.S. bank, only started lending to WeWork after an executive at the bank promised to keep an eye on Mr. Neumann, according to people familiar with the matter.

Banks harbored significant doubts about We Co., as the WeWork parent is known, even as they pitched its stock to investors, according to interviews and documents reviewed by The Wall Street Journal. Running out of cash, the company was rescued last month by Japanese conglomerate SoftBank Group Corp. in a deal that bounced Mr. Neumann.

WeWork’s unraveling has hit hardest the wallets and reputations of SoftBank and other venture-capital investors who enabled Mr. Neumann and his company’s rise. But with its money and credibility, Wall Street also fed the company’s breakneck growth and its image as a superhot technology company.

WeWork’s model—leasing office space, outfitting it with touches like free beer and fruit-infused water, then subleasing it—required a constant supply of credit. Landlords demanded bank letters that guaranteed several months of rent upfront. These letters could be recycled as the short-term pledges expired.

JPMorgan was one of the biggest lenders to WeWork and to Mr. Neumann, who counted CEO James Dimon and asset-management chief Mary Erdoes, whose division had lent to Mr. Neumann, among his confidants.

In 2015, JPMorgan led a group of banks extending a $650 million loan to WeWork. Two years later, the company went back for another $500 million, and Wells Fargo joined the group.

Wells Fargo bankers acknowledged internally that WeWork’s business model was unproven but agreed to lend $100 million if the company set aside cash as collateral, according to people familiar with the matter and a memo reviewed by the Journal.

WeWork would be a profitable client in Silicon Valley, where Wells Fargo doesn’t have a strong presence, they argued in the memo. It also could land the bank a role in WeWork’s IPO and future stock sales, which the bankers estimated could bring in $12 million in fees, according to the internal memo about whether to approve the loan.

An internal committee initially rejected the loan, raising concerns about the company’s prospects and Mr. Neumann’s style, the people said. Roy March, the head of Wells Fargo’s Eastdil real-estate unit, assured executives he was close to Mr. Neumann and would personally mentor him, the people familiar with the situation said. Perry Pelos, a top Wells Fargo executive, ultimately signed off after several appeals, the people said. Wells Fargo sold most of Eastdil this year.

This summer, as WeWork prepared to go public, Mr. Neumann told friends a new round of bank financing would “blow the market away,” according to a person familiar with the matter. He had been meeting with Mr. Dimon and Goldman CEO David Solomon, people familiar with the conversations said.

Bankers at JPMorgan and Goldman, meanwhile, were vying for roles in the company’s IPO. They had told Mr. Neumann it could be worth as much as $60 billion (JPMorgan) and $90 billion (Goldman), according to people familiar with the matter. Lining up a loan would help them win the assignment.

JPMorgan proposed a $6 billion loan that required WeWork to raise $3 billion in the stock market by the year’s end. The package included a $2 billion line of credit it could use to continue to sign deals for new space.

Here’s a look at WeWork’s business model. Photo: David 'Dee' Delgado/Bloomberg

Goldman proposed $3.65 billion in loans, secured by income from WeWork’s buildings, people familiar with the matter said. The deal would allow WeWork to borrow more if it hit certain milestones—up to $10 billion over time—and didn’t require the company to go public, some of the people said. WeWork executives wanted more money upfront, they said.

JPMorgan won.

The bank pushed other lenders to commit at least $750 million apiece toward the $6 billion total, dangling a role in the IPO, according to people familiar with the negotiations. Some bankers worried JPMorgan’s initial terms were too lenient and demanded WeWork set aside more cash to back the loan, the people said.

Eventually, the $2 billion line was 100% collateralized, meaning WeWork would have to pledge a dollar of cash for each dollar it borrowed, the people said. Goldman, Wells Fargo and six other big banks agreed to participate.

The lenders would split about $250 million in fees upfront, according to people familiar with the deal, a high sum for a low-risk arrangement. A day after it was finalized, WeWork said it had chosen JPMorgan and Goldman to lead its IPO. The other banks got junior roles.

The IPO ran into trouble almost immediately after documents were filed in August. Investors balked at WeWork’s growing losses and unusual financial arrangements between the company and Mr. Neumann. Bankers offered shares at a lower price; investors still didn’t bite.

The company pushed Mr. Neumann out as CEO and called off the IPO in September, which killed the loan deal. WeWork, suddenly dangerously low on cash, found the banks unwilling to reup.

It turned back to JPMorgan, seeking a $5 billion lifeline, people familiar with the matter said.

This time, the bank refused to lend its own money without gauging demand from investors, people familiar with the matter said. It eventually offered the full $5 billion itself.

WeWork took SoftBank’s money instead.

Mr. Dimon defended his bank’s dealings with WeWork in a television interview this week.

“We helped WeWork get to a proper conclusion,” Mr. Dimon said. “Now it has a chance to succeed.”

Write to David Benoit at david.benoit@wsj.com, Maureen Farrell at maureen.farrell@wsj.com and Liz Hoffman at liz.hoffman@wsj.com

Copyright ©2019 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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https://www.wsj.com/articles/as-wework-grew-wall-street-lent-it-money-and-credibility-11573209003

2019-11-08 10:30:00Z
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Dow futures point to a slightly higher open after record close - CNBC

U.S. stock index futures edged higher on Friday morning following Thursday's record close for the Dow Jones Industrial Average.

Around 6 a.m. ET, Dow futures indicated a positive open of more than 30 points. Futures on the S&P and Nasdaq were both little changed.

Stocks rose to record highs on Thursday after the world's two largest economies reportedly agreed to remove existing trade tariffs, sparking a huge rotation into equities and out of bonds.

Investors are closely monitoring news on the China-U.S. trade front after a spokesperson for the Chinese commerce ministry said that both sides had agreed to cancel existing tariffs in phases.

Furthermore, data released Friday morning showed that Chinese exports and imports declined less than expected in the month of October, according to Reuters.

Meanwhile, Jean-Claude Juncker, president of the European Commission, said there "won't be any auto tariffs" from the U.S. on Europe next week. U.S. President Donald Trump has until Nov. 13 to decide whether he will pursue with car tariffs on the EU.

Data, earnings

On the data front, consumer sentiment figures are due out at 10 a.m. ET, as well as wholesale trade numbers.

In corporate news, Allianz, Duke Energy, and Honda Motor are set to report earnings before the opening bell.

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https://www.cnbc.com/2019/11/08/dow-futures-us-china-trade-tariffs-consumer-data.html

2019-11-08 07:20:00Z
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