Selasa, 11 Februari 2020
WATCH LIVE: Federal Reserve Chairman Powell testifies on coronavirus, state of economy - Washington Post
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2020-02-11 14:56:46Z
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Fed chairman: Coronavirus could hurt the global economy - CNN
"We are closely monitoring the emergence of the coronavirus, which could lead to disruptions in China that spill over to the rest of the global economy," Powell said in his prepared testimony before the House Financial Services Committee, where he is set to deliver his semiannual report to Congress. He will testify again before the Senate Banking Committee at 10:00 am ET on Wednesday.
The outbreak of the coronavirus, which has now killed more than 1,000 people, has added uncertainty to the global outlook -- and the US economy -- as companies have shuttered plants and shifted supply chains to contain spread of the infectious disease.
In late January, Powell described the outbreak as a "very serious issue," but at the time, he noted the virus was still in its early stages and it remained uncertain how far it would spread and what the macroeconomic effects would be.
Holding rates steady
Powell spent last year guiding the Fed to help buffer the US economy from turbulent trade tensions between the United States and China. The trade war led to weakness in the manufacturing sector, hurt business investment and slowed global growth.
The Fed slashed interest rates three times last year -- in July, September and October -- to a range of between 1.25% and 1.5%. Since then, Powell has signaled the central bank plans to take a wait-and-see approach for this year, a stance he once again reinforced in his testimony to lawmakers.
"The current stance of monetary policy will likely remain appropriate," said Powell. Adding, "If developments emerge that cause a material reassessment of our outlook, we would respond accordingly."
In his testimony, Powell sought to thread the needle of sending a reassuring message that the US economy is still in "a good place," but that policymakers would act as needed to continue the longest-running expansion on record, now in its 11th year.
Low unemployment, but a ballooning deficit
The Fed chairman has routinely pointed to the country's record low unemployment rate as a benefit to low-and middle-income families, who have been among the last to reap rewards from the economic expansion. He pointed to higher wages for those communities, particularly those with lower-paying jobs.
Even so, Powell cautioned that the country continues to face challenges, including drawing in more workers into the labor force, boosting productivity and reconciling with a ballooning federal deficit.
The renewed warning by Powell to Congress to get the nation's fiscal house in order comes weeks after the nonpartisan Congressional Budget Office released its latest report, projecting that the deficit would widen over the coming decade, reaching a total of $1.7 trillion in 2030.
"Putting the federal budget on a sustainable path when the economy is strong would help ensure that policymakers have the space to use fiscal policy to assist in stabilizing the economy during a downturn," said Powell. "A more sustainable federal budget could also support the economy's growth over the long term."
With interest rates at historic lows, the Fed's ammunition to rescue the economy is diminished, requiring fiscal policies by Congress to help offset any economic weakness.
Powell's testimony comes a day after the White House released President Donald Trump's fiscal 2021 budget blueprint, which calls for deep cuts in safety net programs and projects a balanced budget by 2035 assuming the economy returns 3% economic growth annually.
That's significantly higher than what most economists and the Federal Reserve forecast.
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2020-02-11 13:41:00Z
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Fed’s Powell says risks to the U.S. economy remain, particularly from the coronavirus - MarketWatch
Some of the forces that held down U.S. economic growth last year have eased, but risks to the outlook remain, particularly from the coronavirus, Federal Reserve Chairman Jerome Powell said Tuesday.
“We are closely monitoring the emergence of the coronavirus, which could lead to disruptions in China that spill over to the rest of the global economy,” Powell said, in testimony prepared for a House Financial Services Committee hearing later Tuesday.
The Fed’s report to Congress on monetary policy noted fragility in China’s corporate and financial sector that could leave it vulnerable to an adverse shock.
Read : Fed concerned about world’s second-largest economies
Earlier Tuesday, Tedros Adhanom Ghebreyesus, the director general of the World Health Organization, said coronavirus is “a grave threat for the rest of the world” amid some signs the rate of infection may be slowing.
Although the semi-annual hearing on Fed monetary policy doesn’t start until 10 a.m., the House panel decided to release the Fed chairman’s testimony a few hours early.
Worried about the health of the economy, the U.S. central bank cut interest rates by a quarter point at three successive meetings last fall, bringing its benchmark rate down to a range of 1.5%-1.75%.
These fears have eased somewhat. Over the past two policy meetings in December and January, Fed officials have left the key policy rate unchanged.
Powell said the Fed was able to hold policy steady over the past 12 weeks because some uncertainties surrounding trade had diminished recently and there were some signs that global growth “may be stabilizing.”
Fed officials believe the current accommodative stance of policy is appropriate to support growth and push inflation up to the central bank’s 2% target, Powell said.
If incoming data back up this belief, the current stance of monetary policy will remain appropriate, Powell said.
But things could change.
“If developments emerge that cause a material reassessment of our outlook, we would respond accordingly” Powell said.
Roberto Perli, a former Fed staffer and now a fellow at Cornerstone Macro, said Powell’s language about monitoring the coronavirus significantly lowers the bar for a rate cut.
Financial markets think the Fed will cut its benchmark rate in July, according to the CME Group’s FedWatch tool. Other economists think the Fed will remain on hold throughout 2020.
Over the last six months of 2019, the U.S. economy appeared to be growing at a moderate rate, and the labor market strengthened further, Powell said. The government’s initial reading of first-quarter GDP won’t come until the end of April.
While consumer spending moderated toward the end of the year, “fundamentals supporting household spending remain solid,” Powell said. Consumer spending has been the main driver of economic growth over the past year, as manufacturing has stumbled and business investment dried up due in part to uncertainties related to the Trump administration’s trade policies.
Overall inflation, based on the price index for personal consumption expenditures, was up 1.6% over the past 12 months ending in December, well below the Fed’s 2% target.
“Over the next few months, we expect inflation to move closer to 2%,” Powell said, as some low readings from early last year drop out of the 12-month calculation.
If the economy stumbles, with the Fed’s benchmark rate already so low, it will be important for fiscal policy to help support the economy, Powell told lawmakers.
He urged Congress to put the federal budget on a more sustainable path while the economy remains healthy.
The Congressional Budget Office recently forecast deficits above $1 trillion over the next ten years.
The recent reduction in interest rates has benefitted the stock market. The Dow Jones Industrial Average DJIA, +0.60% is up 738 points, or 2.6% so far this year.
https://news.google.com/__i/rss/rd/articles/CBMiemh0dHBzOi8vd3d3Lm1hcmtldHdhdGNoLmNvbS9zdG9yeS9mZWRzLXBvd2VsbC1zYXlzLXJpc2tzLXRvLXVzLWVjb25vbXktcmVtYWluLXBhcnRpY3VsYXJseS1mcm9tLXRoZS1jb3JvbmF2aXJ1cy0yMDIwLTAyLTEx0gFPaHR0cHM6Ly93d3cubWFya2V0d2F0Y2guY29tL2FtcC9zdG9yeS9ndWlkLzM2REVGQUI0LTRDNEUtMTFFQS1CQUU2LTMyOUQzNDIzNjUxNg?oc=5
2020-02-11 13:30:00Z
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Judge approves $26 billion merger of T-Mobile and Sprint - CNBC
Shares of Sprint soared Tuesday after a U.S. District judge ruled in favor of its $26 billion deal to merge with T-Mobile.
The stock was up 73% in premarket trading. It had risen after hours Monday after The Wall Street Journal reported the judge was expected to rule in favor of the deal. Shares of T-Mobile were up more than 9% before markets opened.
The ruling clears one of the final hurdles for the deal, which still can't close until the California Public Utilities Commission approves the transaction.
Attorneys general from New York, California, Connecticut, Hawaii, Illinois, Maryland, Michigan, Minnesota, Oregon, Wisconsin, Massachusetts, Pennsylvania, Virginia and D.C. originally brought the lawsuit to block the deal following approval from the Justice Department of Federal Communications Commission. The states had argued that combining the No. 3 and No. 4 U.S. carriers would limit competition and result in higher prices for consumers. The companies had argued their merger would help them compete against top players AT&T and Verizon and advance efforts to build a nationwide 5G network.
In a statement following the ruling, New York Attorney General Letitia James, who helped led the states' push, said the states "disagree with this decision wholeheartedly, and will continue to fight the kind of consumer-harming megamergers our antitrust laws were designed to prevent." She called the ruling and called it a "loss" for Americans who rely on wireless networks and said the states will review their options, including a potential appeal.
"From the start, this merger has been about massive corporate profits over all else, and despite the companies' false claims, this deal will endanger wireless subscribers where it hurts most: their wallets," James said.
California Attorney General Xavier Becerra, who also led the states' efforts, said in a statement, "Our fight to oppose this merger sends a strong message: even in the face of powerful opposition, we won't hesitate to stand up for consumers who deserve choice and fair prices. We'll stand on the side of competition over megamergers, every time. And our coalition is prepared to fight as long as necessary to protect innovation and competitive costs."
T-Mobile and Sprint agreed to certain concessions to the government before the agencies cleared the deal. The companies told the FCC they would deploy a 5G network covering 97% of the U.S. population within three years of closing the deal. Sprint also agreed to sell Boost Mobile, Virgin Mobile and other prepaid phone businesses, as well as some of its wireless spectrum to Dish Network for $5 billion before gaining approval from the Justice Department.
FCC Chaitman Ajit Pai said in a statement that he was "pleased" with the court's ruling and that the merger "will help close the digital divide and secure United States leadership in 5G," calling it "a big win for American consumers."
In his decision filed Tuesday, Judge Victor Marrero wrote, "The resulting stalemate leaves the Court lacking sufficiently impartial and objective ground on which to rely in basing a sound forecast of the likely competitive effects of a merger."
The judge laid out three points on which the court rejected the states' objections to the merger. First, he said, they failed to convince the court that the merged party "would pursue anticompetitive behavior that, soon after the merger, directly or indirectly, will yield higher prices or lower quality for wireless telecommunications services."
Second, the court rejected that Sprint would be able to continue operating effectively as a wireless services competitor without the merger.
"The Court is thus substantially persuaded that Sprint does not have a sustainable long-term competitive strategy and will in fact cease to be a truly national [mobile network operator]," the ruling said.
And finally, the court rejected the states' argument that Dish "would not enter the wireless services market as a viable competitor nor live up to its commitments to build a national wireless network."
If approved by the California commission, the deal would create a new wireless competitor in Dish, which has tried for years to become a provider, spending billions on airwaves it has stored away. Under a previous deal between Dish and the DOJ and FCC, the company had a deadline this year to build a narrowband internet of things (IoT) network connecting "people and sensors and microprocessors." If the deal clears, Dish will instead focus its efforts on building a 5G network covering 20% of the country by June 2022 and 70% of the U.S. population by June 2023, with the consequence of facing a $2.2 billion payment to the U.S. Treasury if it fails to live up to its commitments.
Shares of Dish were up 10% on the judge's ruling.
T-Mobile CEO John Legere announced last year he would step down from the role and be succeeded by President and COO Mike Sievert. Legere had been expected to step down once the company's merger with Sprint was completed. Sprint and T-Mobile had initially said Legere would lead the combined company when they announced their intention to merge in April 2018.
-CNBC's Alex Sherman contributed to this report.
This story is developing. Check back for updates.
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2020-02-11 13:17:00Z
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Under Armour shares tank on sales miss, sees $50 million to $60 million hit from coronavirus - CNBC
An Under Armour store front is seen on November 04, 2019 in Sunrise, Florida.
Joe Raedle | Getty Images
Under Armour shares plummeted Monday morning after the company reported sales that missed analysts' estimates during the holiday quarter and issued a bleak outlook.
It said it is facing "ongoing demand challenges" for its athletic apparel and sneakers, and is calling for sales to be down a low-single digit percentage in fiscal 2020. That includes a high-single-digit drop in sales in North America, Under Armour said. Analysts had been calling for overall sales to be up 4.2% for the year.
Providing its 2020 outlook, Under Armour said it expects the coronavirus outbreak in China to lower sales by roughly $50 million to $60 million during the fiscal first quarter.
The company is also embarking on a restructuring plan, which among other things could entail not opening its New York City flagship location. It could take between $325 million and $425 million in estimated pretax charges this fiscal year tied to these efforts, it said, including about $225 million to $250 million related to not opening the store.
Under Armour shares sank as much as 17% in premarket trading on the news.
Here's how Under Armour did for the quarter ended Dec. 31, compared with what analysts were expecting, based on a poll by Refinitiv:
- Earnings per share: 10 cents, adjusted, vs. 10 cents expected
- Revenue: $1.44 billion vs. $1.47 billion expected
Under Armour reported a net loss of $15.3 million, or 3 cents per share, compared with net income of $4.2 million, or a penny a share, a year ago. Excluding one-time items, Under Armour earned 10 cents a share during the fourth quarter, in line with analysts estimates, based on Refinitiv data.
Revenue grew slightly to $1.44 billion from $1.39 billion a year ago. But it was short of expectations for $1.47 billion.
Sales in North America were up 1.9% during the quarter and rose 9.8% in Asia-Pacific. Apparel sales were up 0.2% overall, while footwear revenue was up 10.3% and accessories sales grew 1.6%.
Under Armour has been struggling to grow sales for the past few years. The company reported its first quarterly loss in 2017, as momentum for the brand started to slow. It faces intense competition from the likes of Nike, Lululemon and Adidas in the U.S. It also is more reliant on wholesale partners, such as Kohl's, which analysts say has hurt Under Armour's business as those retailers have suffered.
Patrik Frisk notably took over as CEO from Under Armour founder Kevin Plank on Jan. 1. Plank remains executive chairman and brand chief.
As of Monday's market close, Under Armour's stock has fallen about 1.5% this year. The company has a market cap of about $9.2 billion.
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2020-02-11 12:10:00Z
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Viral chicken sandwiches aren't enough for Wall Street: Morning Brief - Yahoo Finance
Tuesday, February 11, 2020
Get the Morning Brief sent directly to your inbox every Monday to Friday by 6:30 a.m. ET. Subscribe
The general public isn’t the investing public
Make no mistake: Popeyes chicken sandwich is a runaway hit.
In the fourth quarter, same-store sales at Popeyes rose 34.4% and system-wide sales at Popeyes stores grew 42.3%.
As Jose Cil, CEO of Restaurant Brands (QSR) — Popeyes parent company — said on Monday, Popeyes chicken sandwich “has proven to be a game changer for the brand in every way.”
In a note to clients last week, analysts at Bank of America Global Research explored the 2019 phenomenon that became known as the chicken sandwich wars. Looking at trends on social media, BofA found that, “brand penetrations of ‘chicken sandwich’ Instagram posts and Tweets show that Popeyes has been able to take a meaningful share of conversations.”
This work led to BofA suggesting that fourth quarter comp sales growth at Popeyes would likely come in around 20%. Actual results, of course, were more than 50% better than this estimate.
Popeyes viral chicken sandwich is a marketing dream. And the results have backed up the hype.
But one viral sandwich still hasn’t been enough to get investors excited about the stock. And this episode serves as a great illustration of how the general public and the investing public look differently at brands, sales, and what makes a good investment.
The sustained buzz and hype surrounding the Popeyes chicken sandwich has very obviously led to strong sales. Following a Peter Lynch-style “invest in what you know” maxim might lead to you taking a position in the stock.
But during the fourth quarter, shares of Restaurant Brands fell over 9% during a quarter when the S&P 500 rose some 12%. For the full-year 2019, shares of Restaurant Brands rose about 19% against a gain of nearly 30% for the S&P 500.
And the story for Restaurant Brands is fairly simple: the success at Popeyes isn’t enough to paper over the struggles at its Tim Hortons brand.
Same-store sales at Tim Hortons fell 4.3% during the fourth quarter.
This Aug. 21, 2019, photo, shows Popeye's new chicken sandwich, the spicy version, in New Rochelle, N.Y. (AP Photo/Julia Rubin)
As Cil said: “At Tim Hortons, our performance did not reflect the incredible power of our brand and it is clear that we have a large opportunity to refocus on our founding values and what has made us famous with our guests over the years, which will be the basis for our plan in 2020.”
In the fourth quarter of 2018, system-wide sales at Tim Hortons totaled $1.73 billion against Popeyes sales of $934 million. In the fourth quarter of 2019, Tim Hortons sales fell to $1.68 billion with Popeyes totaling $1.33 billion during the same quarter. And so just a year after Tim Hortons had nearly double the quarterly sales of Popeyes, the brand saw quarterly revenues top those at its smaller family brand by just 30%.
These struggles are also more acute for the stock because Tim Hortons is a much larger part of the Restaurant Brands profit picture.
In the fourth quarter, adjusted EBITDA at Tim Hortons totaled $297 million, accounting for just under 48% of the company’s quarterly adjusted EBITDA. The fourth quarter of 2018, Tim Hortons recorded adjusted EBITDA of $297 million with that income accounting for more than half of the entire company’s quarterly adjusted profit.
Popeyes, in contrast, saw adjusted EBITDA rise more than 50% from the prior year, but still accounts for less than 10% of the company’s quarterly total.
Chicken sandwich virality hasn’t fundamentally changed the profit outlook for Restaurant Brands. At least not quite yet.
And while some readers might roll their eyes at being alerted to the fact that profits matter to investors, sentiment around the stock of Popeyes parent company seems divorced from consumer enthusiasm for their chicken sandwich.
To the general public, the Popeyes chicken sandwich is one of the most interesting business stories of the year. To the investing public, the chicken sandwich is just part of a profit picture that is under pressure.
By Myles Udland, reporter and co-anchor of The Final Round. Follow him at @MylesUdland
What to watch today
Economy
6 a.m. ET: NFIB Small Business Optimism, January (103.5 expected, 102.7 in December)
10 a.m. ET: JOLTS Job Openings, December (7000 expected, 6800 in November)
Earnings
Pre-market
6:30 a.m. ET: Hasbro (HAS) is expected to report adjusted earnings of 88 cents per share on $1.44 billion in revenue
6:55 a.m. ET: Under Armour (UAA) is expected to report adjusted earnings of 10 cents per share on $1.47 billion in revenue
Post-market
4:05 p.m. ET: Lyft (LYFT) is expected to report an adjusted loss of 54 cents per share on $985.77 million in revenue
Top News
FILE - In this April 27, 2010 file photo, a woman using a cell phone walks past T-Mobile and Sprint stores in New York. Sprint and T-Mobile called off a potential merger, saying the companies couldn't come to an agreement that would benefit customers and shareholders. The two companies have been dancing around a possible merger for years, and were again in the news in recent weeks with talks of the two companies coming together after all. But in a joint statement Saturday, Nov. 4, 2017, Sprint and T-Mobile said they are calling off merger negotiations for the foreseeable future. (AP Photo/Mark Lennihan, File)
US district judge expected to rule in favor of Sprint-T-Mobile merger [Reuters]
UK economy flatlined ahead of the election [Yahoo Finance UK]
FAA says approaching 737 MAX test flight, awaits Boeing proposals [Reuters]
YAHOO FINANCE HIGHLIGHTS
Coronavirus not material enough of a risk to move rates, Fed officials say
How Bernie Sanders is helping Mike Bloomberg
Chinese manufacturer finds success in the U.S. by embracing local labor standards
—
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, YouTube, and reddit.
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2020-02-11 11:16:00Z
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Senators Slam Amazon Over 'Intolerable' Warehouse Conditions - HuffPost
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2020-02-11 10:42:00Z
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