Strong Jobs Report Has A Big Soft Spot; Dow Jones Falls - Investor's Business Daily

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1. Strong Jobs Report Has A Big Soft Spot; Dow Jones Falls  Investor's Business Daily
2. Stock market news live: Stocks sink despite blowout January jobs data  Yahoo Finance
3. Dow drops more than 150 points on concern coronavirus will dramatically slow China's economy  CNBC
4. Stocks Moving Premarket: Peloton Interactive, Qualcomm, Twitter  Barron's
5. US STOCKS-Wall St scales new highs as China moves to limit coronavirus impact  Yahoo Finance
6. View full coverage on Google News

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2020-02-07 15:49:00Z
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Credit Suisse CEO Tidjane Thiam resigns after spying scandal - CNN

The board of directors unanimously accepted Thiam's resignation at a meeting on Thursday, appointing Credit Suisse (CS) veteran Thomas Gottstein as the new CEO, the Swiss investment bank said in a statement Friday.

Last year, Credit Suisse's ex-chief operating officer, Pierre-Olivier Bouée, was implicated in two separate spying operations, one involving the former head of wealth management Iqbal Khan. Khan had defected to crosstown rival UBS and Bouée reportedly feared that he might try to poach Credit Suisse employees and clients. The bank said he had ordered the surveillance to protect its interests.

Bouée stepped down after that operation came to light. More recently, he was blamed for ordering a spying operation on Credit Suisse's former head of human resources for several days last February.

"I had no knowledge of the observation of two former colleagues. It undoubtedly disturbed Credit Suisse and caused anxiety and hurt. I regret that this happened and it should never have taken place," Thiam said in the statement.

Thiam will step down following the presentation of 2019's fourth quarter and annual results next week.

Credit Suisse said previously that former COO Bouée had not informed Thiam or any other member of the bank's senior leadership of the surveillance on Khan. It added in December that it found no indication that Thiam and other members of the executive board or board of directors knew anything about the second spying case until the media reported on it.

Bouée and Thiam worked closely together for nearly two decades at various firms before joining the Swiss bank, according to their Credit Suisse biographies. The pair were at McKinsey in Paris between 2000 and 2002. Bouée followed Thiam to British insurer Aviv (AVVIY)in 2004. They both joined Prudential, another British insurer, in 2008 before heading to Credit Suisse in 2015.

Shares in Credit Suisse lost as much as 5% in Zurich on Friday, before trading about 2.5% lower. The stock has fallen 46% since Thiam became CEO, reflecting a challenging period for European banks, which have had to contend with falling investment banking revenue and the impact of record low interest rates on lending margins. Shares in major rival UBS (UBS) have dropped about 40% over the same period.

Thiam was a surprising choice to lead the bank. He had no direct investment banking experience and was an outsider to the closeted world of Swiss finance. At the time, Credit Suisse Chairman Urs Rohner cited his experience in wealth management, which has become a much bigger focus for European banks as they tried to offset the investment banking decline and the impact of negative rates.

Under Thiam, Credit Suisse implemented a three-year drive to focus on managing the assets of wealthy clients, scale back investment banking and restructure its global markets business. Analysts say the bank still needs to do more to shift its resources away from investment banking in New York and London to wealth management in Asia.

Credit Suisse posted a $3 billion loss in its 2015 financial year. Those losses narrowed in Thiam's first years in charge before the bank returned to profit in 2018. On Friday, Rohner credited Thiam with returning the bank to profit and placing it "on a very solid foundation."

Still, Credit Suisse has now handed the reigns back to an insider. Gottstein has been with the bank for more than two decades and has worked in the industry for more than 30 years. He has been responsible for the bank's Swiss business since 2015, Credit Suisse said.

In Friday's statement, the bank's lead independent director Severin Schwan said Rohner had led the board "commendably during this turbulent time."

"After careful deliberations, the Board has been unanimous in its actions, as well as in reaffirming its full support for the chairman to complete his term until April 2021," Schwan added.

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2020-02-07 14:31:00Z
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Uber’s plan to turn billion-dollar losses into profits isn’t crazy - Ars Technica

Enlarge / Uber CEO Dara Khosrowshahi in December 2019.

Scott Heins/Getty Images

Uber announced on Thursday that it lost $1.1 billion in the fourth quarter of last year. As I said last quarter, this wasn't a surprise. After all, Uber lost $1 billion in the first quarter of 2019, a lot more than $1 billion in the second quarter (though most of it was one-time charges related to Uber's IPO), and $1.1 billion last quarter. Uber has been burning cash at about this rate since at least 2017.

The losses might seem endless, but CEO Dara Khosrowshahi says that the end is actually in sight. The company previously said it was aiming for profitability in 2021. In a Thursday conference call with investors, Khosrowshahi said that Uber was actually on track to turn a profit even earlier: by the fourth quarter of this year.

Could Uber really reach profitability so quickly after years of 10-figure quarterly losses? Uber management has always argued that the situation was temporary—that big losses were driving Uber's rapid growth and would turn into profits once Uber's growth leveled out.

This argument has more merit than it might appear at first glance. Uber really does face a tradeoff between growth and profitability. Until now, the company has leaned heavily on the growth side of the scale, regularly offering big discounts to attract more customers. If it simply stops doing that, it will do wonders for Uber's cashflow.

A good illustration of this point is the contrast between Uber's original rides business and its newer Uber Eats service. Rides grew just 20 percent (adjusting for currency changes) between Q4 2018 and Q4 2019, which is slow compared to Uber's early years, and slightly slower than last quarter. And at least on an EBITDA (earnings before interest, taxes, depreciation, and amortization) basis, the rides business is profitable. It earned $742 million in the last three months of 2019—more than last quarter's figure and a lot more than the $195 million Uber earned in the same quarter of 2018.

By contrast, Uber Eats is still growing rapidly, with gross bookings rising 71 percent (again, adjusting for currency fluctuations) between Q4 2018 and Q4 2019. But that rapid growth has come with massive losses: Uber says Eats lost $461 million (again, on an EBITDA basis) in Q4 2019. That's a remarkable figure because Uber's Eats revenue (excluding money that went straight to restaurants or drivers) was only $734 million. In other words, Uber lost more than 60 cents on every dollar of Eats revenue it took in.

So the case for optimism about Uber is that the company's cashflow will naturally improve as its growth levels off. With ride-hailing near saturation in many markets, it no longer makes sense for Uber to heavily subsidize rides. As the company has cut back on subsidies, the rides business has naturally gotten more profitable. Perhaps that trend—less growth but more profits—will continue in the rides business in the coming quarters. And perhaps Uber Eats is on a similar trajectory—just a year or two behind. As the meal delivery business saturates, Uber will stop offering big discounts there, too. That will naturally make the service—and perhaps Uber as a whole—more profitable.

One thing that's clear is that Uber is in no danger of running out of money. Uber says it has $11.3 billion in cash and short-term investments—enough to continue at its current burn rate for almost three years.

Investors seem to find Khosrowshahi's new profit target credible; the stock has risen about six percent in after-hours trading since Uber released its financial results.

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2020-02-07 12:39:00Z
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US job growth surges in January, with 225,000 added - Fox Business

FOX Business’ Edward Lawrence breaks down the January jobs report.

U.S. hiring topped expectations in January, as the economy added 225,000 jobs, kicking off the decade on a stronger-than-expected note.

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It marks the 112th month of straight gains.

Unemployment ticked up slightly to 3.6 percent, as more people were looking for work, the Labor Department said Friday. The labor force participation rate edged up slightly to 63.4 percent. Average hourly earnings, meanwhile, rose by 7 cents over the past year to $28.44

"Taken together, the first report of 2020 is a healthy one—showing that a possible redux of the roaring twenties updated for the 21st Century isn't off the table yet," Daniel Zhao, Glassdoor senior economist, said.

Powered by an unseasonably warm winter, the final payroll number of 2019 surged past the estimate of 160,000 from economists surveyed by Refinitiv, who also saw the unemployment rate holding steady from December's 3.5 percent, a half-century low.

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Weather-sensitive industries led the way in job creation: Construction accounted for 44,000 positions, well above its 2019 average of 12,000. Leisure and hospital also padded the number, adding 36,000 jobs.

Professional and business services increased by 21,000, while transportation and warehousing grew by 28,000.

“The labor market is continuing at a solid pace, and unemployment remains low," said CareerBuilder CEO Irina Novoselsky. "It’s a crowded market for those battling to attract top talent and businesses are seeing the most traction when touting company culture along with their open positions."

Still, the report contained a bad omen for manufacturing, which has been in a year-long rut: In January, the sector lost 12,000 jobs, most of which stemmed from motor vehicles and parts.

PRIVATE SECTOR JOB GROWTH BLOWS PAST WALL STREET'S EXPECTATIONS IN JANUARY WITH 291,000 ADDED

As the U.S. continues the longest economic expansion on record, investors are looking at the Department of Labor’s monthly payroll and unemployment data for signs that the rapid job growth over the past two years is softening and lending way to an overall growth slowdown.

Still, there was some bad news: Annual long-term revisions published by the Labor Department showed that employers added 514,000 fewer jobs than first estimated as of March 2019, up slightly from the initial 500,000 that economists projected in August. It was the biggest revision in almost a decade.

The Bureau of Labor Statistics publishes monthly employment statistics, but once a year, checks and revises the estimates those numbers are based on, known as the “benchmark revision.” The number, which is considered more precise, is based on data from state unemployment tax records.

Revisions to December and November brought the two months' combined totals up by 7,000. The initial estimate for November was adjusted up to 256,000, while December's rose to 147,000.

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2020-02-07 13:56:49Z
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Credit Suisse CEO Tidjane Thiam resigns after spying scandal - CNN

The board of directors unanimously accepted Thiam's resignation at a meeting on Thursday, appointing Credit Suisse (CS) veteran Thomas Gottstein as the new CEO, the Swiss investment bank said in a statement Friday.

Last year, Credit Suisse's ex-chief operating officer, Pierre-Olivier Bouée, was implicated in two separate spying operations, one involving the former head of wealth management Iqbal Khan. Khan had defected to crosstown rival UBS and Bouée reportedly feared that he might try to poach Credit Suisse employees and clients. The bank said he had ordered the surveillance to protect its interests.

Bouée stepped down after that operation came to light. More recently, he was blamed for ordering a spying operation on Credit Suisse's former head of human resources for several days last February.

"I had no knowledge of the observation of two former colleagues. It undoubtedly disturbed Credit Suisse and caused anxiety and hurt. I regret that this happened and it should never have taken place," Thiam said in the statement.

Thiam will step down following the presentation of 2019's fourth quarter and annual results next week.

Credit Suisse said previously that former COO Bouée had not informed Thiam or any other member of the bank's senior leadership of the surveillance on Khan. It added in December that it found no indication that Thiam and other members of the executive board or board of directors knew anything about the second spying case until the media reported on it.

Bouée and Thiam worked closely together for nearly two decades at various firms before joining the Swiss bank, according to their Credit Suisse biographies. The pair were at McKinsey in Paris between 2000 and 2002. Bouée followed Thiam to British insurer Aviv (AVVIY)in 2004. They both joined Prudential, another British insurer, in 2008 before heading to Credit Suisse in 2015.

Shares in Credit Suisse lost as much as 5% in Zurich on Friday, before trading about 2.5% lower. The stock has fallen 46% since Thiam became CEO, reflecting a challenging period for European banks, which have had to contend with falling investment banking revenue and the impact of record low interest rates on lending margins. Shares in major rival UBS (UBS) have dropped about 40% over the same period.

Thiam was a surprising choice to lead the bank. He had no direct investment banking experience and was an outsider to the closeted world of Swiss finance. At the time, Credit Suisse Chairman Urs Rohner cited his experience in wealth management, which has become a much bigger focus for European banks as they tried to offset the investment banking decline and the impact of negative rates.

Under Thiam, Credit Suisse implemented a three-year drive to focus on managing the assets of wealthy clients, scale back investment banking and restructure its global markets business. Analysts say the bank still needs to do more to shift its resources away from investment banking in New York and London to wealth management in Asia.

Credit Suisse posted a $3 billion loss in its 2015 financial year. Those losses narrowed in Thiam's first years in charge before the bank returned to profit in 2018. On Friday, Rohner credited Thiam with returning the bank to profit and placing it "on a very solid foundation."

Still, Credit Suisse has now handed the reigns back to an insider. Gottstein has been with the bank for more than two decades and has worked in the industry for more than 30 years. He has been responsible for the bank's Swiss business since 2015, Credit Suisse said.

In Friday's statement, the bank's lead independent director Severin Schwan said Rohner had led the board "commendably during this turbulent time."

"After careful deliberations, the Board has been unanimous in its actions, as well as in reaffirming its full support for the chairman to complete his term until April 2021," Schwan added.

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2020-02-07 12:28:00Z
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Credit Suisse CEO Tidjane Thiam resigns after spying scandal - CNN

The board of directors unanimously accepted Thiam's resignation at a meeting on Thursday, appointing Credit Suisse (CS) veteran Thomas Gottstein as the new CEO, the Swiss investment bank said in a statement Friday.

Last year, Credit Suisse's ex-chief operating officer, Pierre-Olivier Bouée, was implicated in two separate spying operations, one involving the former head of wealth management Iqbal Khan. Khan had left Credit Suisse for crosstown rival UBS (UBS).

Bouée stepped down after that operation came to light. More recently, he was blamed for ordering a spying operation on Credit Suisse's former head of human resources for several days last February.

"I had no knowledge of the observation of two former colleagues. It undoubtedly disturbed Credit Suisse and caused anxiety and hurt. I regret that this happened and it should never have taken place," Thiam said in the statement.

Thiam will step down following the presentation of 2019's fourth quarter and annual results next week.

Credit Suisse said previously that former COO Bouée had not informed Thiam or any other member of the bank's senior leadership of the surveillance on Khan. It added in December that it found no indication that Thiam and other members of the executive board or board of directors knew anything about the second spying case until the media reported on it.

Bouée and Thiam worked closely together for nearly two decades at various firms before joining the Swiss bank, according to their Credit Suisse biographies. The pair were at McKinsey in Paris between 2000 and 2002. Bouée followed Thiam to British insurer Aviva (AVVIY) in 2004. They both joined Prudential, another British insurer, in 2008 before heading to Credit Suisse in 2015.

In Friday's statement, the bank's lead independent director Severin Schwan said Chairman Urs Rohner had led the board "commendably during this turbulent time."

"After careful deliberations, the Board has been unanimous in its actions, as well as in reaffirming its full support for the chairman to complete his term until April 2021," Schwan added.

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2020-02-07 08:48:00Z
52780594795711

Credit Suisse CEO Tidjane Thiam resigns after spying scandal - CNN

The board of directors unanimously accepted Thiam's resignation at a meeting on Thursday, appointing Credit Suisse (CS) veteran Thomas Gottstein as the new CEO, the Swiss investment bank said in a statement Friday.

Last year, Credit Suisse's ex-chief operating officer, Pierre-Olivier Bouée, was implicated in two separate spying operations, one involving the former head of wealth management Iqbal Khan. Khan had left Credit Suisse for crosstown rival UBS (UBS).

Bouée stepped down after that operation came to light. More recently, he was blamed for ordering a spying operation on Credit Suisse's former head of human resources for several days last February.

"I had no knowledge of the observation of two former colleagues. It undoubtedly disturbed Credit Suisse and caused anxiety and hurt. I regret that this happened and it should never have taken place," Thiam said in the statement.

Thiam will step down following the presentation of 2019's fourth quarter and annual results next week.

Credit Suisse said previously that former COO Bouée had not informed Thiam or any other member of the bank's senior leadership of the surveillance on Khan. It added in December that it found no indication that Thiam and other members of the executive board or board of directors knew anything about the second spying case until the media reported on it.

Bouée and Thiam worked closely together for nearly two decades at various firms before joining the Swiss bank, according to their Credit Suisse biographies. The pair were at McKinsey in Paris between 2000 and 2002. Bouée followed Thiam to British insurer Aviva (AVVIY) in 2004. They both joined Prudential, another British insurer, in 2008 before heading to Credit Suisse in 2015.

In Friday's statement, the bank's lead independent director Severin Schwan said Chairman Urs Rohner had led the board "commendably during this turbulent time."

"After careful deliberations, the Board has been unanimous in its actions, as well as in reaffirming its full support for the chairman to complete his term until April 2021," Schwan added.

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2020-02-07 08:28:00Z
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