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Mar 8, 2019

FX | Currencies | Dollar retreats as US job growth turns cold, Swedish crown falls

Seema Mody




Premium: US dollar notes 180430
studioEAST | Getty Images
The dollar fell against most major currencies on Friday as data showed U.S. employers hired far fewer workers than forecast in February, although the jobless rate fell and wages grew more than expected.
The Swedish crown fell to a 16-year low, as Riksbank joined its central bank counterparts in Europe and Canada in adopting a cautious outlook.
The greenback reversed some of its biggest one-day gains in nearly seven months on Thursday as the European Central Bank and other overseas central banks hinted they might pump more stimulus, either by buying more assets or lowering interest rates to help their struggling economies.
Traders sold the dollar a bit more early Friday after a measly 20,000-job increase in domestic payrolls last month, far fewer than 180,000 forecast among analysts polled by Reuters. But traders were encouraged by the unemployment rate falling back below 4 percent and the average hourly earnings accelerating by 0.4 percent.
“The dollar sold off mildly. It doesn’t look that bad when you look at the details,” said Peter Ng, senior currency trader at Silicon Valley Bank in Santa Clara, California.
At 2:20 p.m. EST, an index that tracks the dollar against a basket of six currencies was down 0.34 percent at 97.34. It touched 97.710 on Thursday, the highest since Dec. 14.
On the week, the dollar index was on track to gain 0.85 percent. Much of the greenback’s weekly rise stemmed from a dramatic sell-off in the euro on Thursday when the ECB offered a fresh round of cheap loans to banks and pushed back any plan to raise rates into 2020.
The common currency rose 0.43 percent to $1.124, rebounding from a 20-month low of $1.11765 reached on Thursday. Friday’s rise reduced the euro’s weekly loss against the dollar to 1.17 percent, which would be its steepest one-week decline since late September.
Among other G10 currencies, the Swedish crown succumbed to further selling pressure, hitting 9.4890 on Friday, its weakest since August 2002.
The crown slipped again a day after Swedish Central Bank Governor Stefan Ingves struck a dovish note in a statement to Parliament. Data showed Swedish house prices fell in the three months ending in February.
“Yesterday, the Riksbank suggested that its forecasts for repo rate hikes were simply that a forecast but not a promise,” HSBC strategists said in a daily note.

Source: CNBC

Bond Yields Report on March 8, 2019 | Treasury yields whipsaw after jobs shortfall and strong wage gains

Thomas Franck




U.S. government debt yields gyrated on Friday after the Labor Department said the U.S. economy added far fewer jobs than expected, but wages moved higher in the month of February.
At 10:31 a.m. ET, the yield on the benchmark 10-year Treasury note was slightly higher at around 2.643 percent. The benchmark rate hit a session low of 2.607 percent following the report’s release. Yields move inversely to prices.
Job growth ground to a halt in February, with nonfarm payrolls increasing by just 20,000 even as the unemployment fell to 3.8 percent. February was the worst month for job creation since September 2017, though average hourly earnings advanced more than expected. Economists had expected 180,000 nonfarm payroll additions.
Average hourly earnings increased by 3.4 percent on a year-over-year basis, the best of the economic recovery that began nearly 10 years ago. Economists had been expecting an increase of 3.2 percent. Average hourly earnings increased 11 cents to $27.66, a 0.4 percent increase from the prior month.
“Generally you don’t see the economy downshift from 300,000 to 20,000. This in conjunction with the jobless claims number that has been drifting higher; momentum in the job market is probably slowing,” said Mike Feroli, chief U.S. economist at J.P. Morgan Chase. “I think in a way it could all be related to the fact that it’s a very tight labor market and it’s more difficult to fill vacancies and it’s hard to draw people back into the labor market.”
Housing starts and building permits figures for January are both expected to follow later in the trading day.
U.S. investors swarmed into sovereign debt in the prior session after Europe’s central bank cut its GDP forecast, rekindling fears that a slowdown overseas could send shock waves into the American economy.
But where the European Central Bank took investors mostly by surprise was in its decision to announce a new round of stimulus and push back its timeline for future rate hikes “at least through the end of 2019.” It also lowered its inflation projection to 1.2 percent, well below its target rate of just under 2 percent.
ECB President Mario Draghi didn’t try to sugarcoat the situation either, telling reporters Thursday morning that “the weakening in economic data points to a sizable moderation in the pace of the economic expansion that will extend into the current year.”
Unlike peers, Europe has used the ECB’s easy monetary policy as a crutch to boost growth since the financial crisis. The U.S. Federal Reserve, in contrast, has hiked rates several times over the past few years as the American economy collected itself in the aftermath of the recession.
— CNBC’s Sam Meredith and Jeff Cox contributed reporting.

Source: CNBC

Wall Street Closing Report | Stocks post 5-day losing streak, notch worst week of 2019 after anemic jobs report

Fred Imbert





Stocks fell on Friday after the U.S. government released employment data that badly missed expectations, adding to growing concerns that the global economy may be slowing down.
The Dow Jones Industrial Average pulled back 126 points as Exxon Mobil and Pfizer lagged. The S&P 500 fell 0.65 percent as the energy and consumer discretionary sectors dipped. The Nasdaq Composite slid 0.6 percent.
Equities came well off their lows in late-morning trading. At its session low, the Dow was down more than 200 points.
The U.S. economy added just 20,000 jobs in last month, marking the weakest month of jobs creation since September 2017. Economists polled by Dow Jones expected a gain of 180,000.
“February’s anemic 20,000 new jobs will inevitably exacerbate widespread fears of slowing economic growth, making it harder to be optimistic about corporate earnings,” said Alec Young, managing director of global market research at FTSE Russell. “All in all, there’s little in this report to excite investors.”
Treasury yields fell along with futures. The benchmark 10-year rate dipped to 2.619 percent while the 2-year yield traded at 2.45 percent.
Traders work on the floor of the New York Stock Exchange (NYSE) on March 04, 2019 in New York City.
Spencer Platt | Getty Images
The data come amid growing concerns about the global economy possibly slowing down. Data out of China showed its exports slumped 20.7 percent from a year earlier, far below analyst expectations and wiping out a surprise jump in January.
Analysts cautioned that data from China at the beginning of the year may be distorted by week-long Chinese New Year public holidays, which started in early February this year. In 2018, Chinese New Year holidays started in mid-February.
The weak data all come less than 24 hours after the European Central Bank slashed its growth forecasts for the euro zone and announced a new round of policy stimulus.
“Most investors would agree we are late in the cycle,” said George Schultze, founder of Schultze Asset Management. “Having said that, GDP growth remains pretty solid. We’ve had about 10 years of solid growth. … There are also a lot of things pushing it along, including accommodative monetary policy.”
Equities were on track to post their biggest declines of the year. The major indexes are all down more than 2 percent this week. The Nasdaq was on pace to snap a 10-week winning streak, while the Dow was set to notch its second weekly decline of the year.
The weekly decline comes amid growing fears that most of the positive news on the U.S.-China trade front may be baked in. At this point, most investors expect the two countries to strike a trade deal later this month. There are also worries that a deal may not be sure thing.
CNBC learned through sources that China and the U.S. have talked about holding further discussions in Beijing after the National People’s Congress concludes on March 15. This was first reported by The New York Times.
“A pullback in risk assets was needed, but underlying technical and fundamental conditions are positive,” Peter Perkins, partner at MRB Partners, wrote in a note to clients. “The global growth outlook remains mixed, but there are signs that economic growth momentum in China and the euro area is bottoming, while the U.S. economy continues to chug along at a moderately above-potential pace.”
—CNBC’s Kayla Tausche and Sam Meredith contributed to this report. 

Source: CNBC

Commission Actions | Four Defendants Agree to Settle FTC Allegations They Deceived Consumers with Business Coaching Scheme

3-4 minutes



Four defendants in a multi-million dollar business coaching scheme known as Digital Altitude, including the scheme’s former CEO, will pay $1.9 million to settle Federal Trade Commission allegations that they deceived consumers by claiming they could earn “six figures in 90 days.”
In its complaint, the FTC alleged that the defendants behind Digital Altitude took in millions of dollars by persuading consumers to pay for a series of tiered memberships with increasing fees and falsely claimed that consumers would learn how to make substantial income with an online business. The defendants promised consumers they would receive individualized coaching from successful marketers that would provide what they needed to build a successful business. In reality, these marketers were merely salespeople selling higher membership levels in the defendants’ program, according to the FTC’s complaint.
The settlement orders with former Digital Altitude CEO Michael Force, former Digital Altitude Chief Operating Officer Mary Dee, former Digital Altitude Chief Technology Officer Alan Moore and Thermography for Life, LLC (also doing business as Living Exceptionally, Inc.) impose a $54 million judgment, which will be suspended after they surrender assets totaling approximately $1.9 million. The full judgment will become due immediately if the defendants are found to have misrepresented their financial condition.
As part of the settlement orders, the defendants also are permanently banned from creating, marketing, promoting, or offering businesses coaching or investment opportunity services; engaging in credit card laundering and fraudulent payment processing activities; and making misleading claims related to business and coaching opportunities.
The FTC last year announced settlements with three other defendants involved in the coaching scheme: Sean Brown, who allegedly helped operate the scheme; Morgan Johnson, an officer of Digital Altitude LLC; and The Upside LLC, which processed credit card payments for the scheme. The remaining defendants, including Digital Altitude LLC, are in default; the Court has granted the FTC’s motion for default judgment related to those defendants.
The Commission vote approving the stipulated final orders with the four defendants was 5-0. The U.S. District Court for the Central District of California entered the orders on March 5, 2019.
The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook, follow us on Twitter, read our blogs, and subscribe to press releases for the latest FTC news and resources.

Source: FTC

Crude Oil Price Report | US crude falls 1 percent, settling at $56.07, after weak US jobs report

Tom DiChristopher




Reusable: Oil well pump jack Permian Basin Texas
An oil well owned an operated by Apache Corporation in the Permian Basin is shown in Garden City, Texas, Feb. 5, 2015.
Getty Images
Oil prices fell on Friday, but managed to retrace losses after plunging on data that showed recent U.S. job gains grinding to a halt in February.
Crude futures were also under pressure after data showed a slump in Chinese imports and exports last month and the European Central Bank slashed its outlook for economic growth on the continent.
U.S. West Texas Intermediate crude futures fell 66 cents, or 1.2 percent, to $56 around 2:30 p.m. ET. WTI earlier fell more than 3 percent to a three-week low at $54.52. The contract is on pace to rise half a percent this week.
Brent crude futures were down 54 cents, or nearly 1 percent, to $65.76 a barrel, bouncing from a three-week low at $64.02. The international benchmark for oil prices was on pace for a roughly 1 percent gain on the week.

Crude futures extended losses in early morning trade after U.S. government data showed the country added just 20,000 jobs in February, compared with estimates for a gain of 180,000 positions.
Also in February, China’s exports fell nearly 21 percent and its imports slipped about 5 percent, data released Friday showed. The trade figures raise fresh concerns about the world’s second largest economy.
Despite the headline figures, Chinese crude oil imports surged 21.6 percent to 10.23 million barrels per day, the third-highest volume on record, according to Reuters analysis.
On Thursday, crude futures came under pressure after Europe’s central bank slashed its growth estimate to 1.1 percent, down from its last forecast for 1.7 percent expansion. ECB President Mario Draghi said the European economy was in “a period of continued weakness and pervasive uncertainty.”
The oil market has also struggled to post gains this week in the face of strong U.S. production and a buildup in the nation’s crude stockpiles.
American drillers are pumping at records near 12 million bpd, according to preliminary weekly data. Meanwhile, U.S. crude stockpiles surged by 7.1 million barrels in the week through March 1, the Energy Information Administration reported.
The number of oil rigs operating in U.S. fields fell for a third straight week, oilfield services firm Barker Hughes reported on Friday. The firm’s closely watched oil rig count fell by nine during the latest week.
Investment bank Jefferies on Friday said that U.S. output growth was largely being fueled by onshore shale production, which had recently benefited from investments by oil majors like Exxon Mobil and Chevron.
“The majors bring scale, steady capital investment and science to the play,” the U.S. bank said, adding that this could lead to a higher growth trajectory and cap the upside oil prices.
Rising U.S. output is offsetting efforts by major oil producers to drain oversupply from the market.
OPEC and its allies including Russia are trying to remove 1.2 million bpd from the market during the first six months of the year, following a collapse in crude prices in the final months of 2018.
The supply curbs have helped to boost oil prices by 19-20 percent this year. U.S. sanctions on Iran and Venezuela’s state oil firm PDVSA have also tightened global supplies.
— Reuters contributed to this report.

Source: CNBC

Metals Price Report on Friday 8, 2019 | Gold breaches $1,300 mark as weak US jobs data dents dollar

Tom DiChristopher




Reusable Gold coins and bars
Gold rose a percent to a one-week high on Friday, briefly breaching the pivotal $1,300 ceiling, as weak U.S. payroll data dented the dollar and risk sentiment, while also exacerbating a gloomy global economic picture.
U.S. job growth almost stalled in February with the economy creating only 20,000 jobs amid a contraction in payrolls in construction and several other sectors.
Spot gold was up 1.05 percent at $1,298.96 per ounce as of  1:57 p.m. EST, en route to a weekly gain. Prices on Thursday fell to $1,280.91, within striking distance of a more than five-week low touched earlier this week.
U.S. gold futures settled $13.20 higher at $1,299.30.
“We saw a surprisingly weak non-farm jobs number that pressured the dollar and the U.S. stock markets, which in turn supported the rally in gold,” said Jim Wyckoff, senior analyst at Kitco Metals. “Gold is going to be influenced by the dollar index.”
The dollar held its earlier losses versus a basket of currencies, making bullion cheaper for holders of other currencies, while Wall Street was set to fall after the jobs data.
“Growth in the U.S. is going to slow as the country has reached full employment and productivity is very high so there isn’t much space for growth ... And we’re coming to an end of the Federal Reserve’s rate cycle, which should weaken the dollar further,” said Natixis analyst Bernard Dahdah.
While Friday’s report from the Labor Department did have a few bright spots, such as dip in the unemployment rate and an upward revision to December and January data, it did indicate the U.S. economy is slowing, supporting the Fed’s “patient” approach toward interest rate hikes this year.
The jobs number could be revised up and the “internals” were not so bad, Kitco’s Wyckoff said.
“I don’t think this particular report alone will alter the Fed’s monetary policy,” he said. “If we get a string of weak numbers next couple of months, then that’s a different story, but right now that 20,000 rise in non-farm is an anomaly.”
Investors also kept a close eye on trade talks between the United States and China, with mixed signals from Washington on the likelihood of a breakthrough.
Meanwhile, palladium slipped 1.47 percent to $1,505 per ounce, on track for its biggest weekly decline since the week ended Nov. 23.
Silver gained 1.89 percent to $15.30, after slipping to its lowest since late December in the previous session.
Platinum fell 0.28 percent to $811, after touching its lowest since Feb. 19 at $806.50 earlier. It was down about 4.9 percent so far this week, its biggest weekly percentage decline since mid-August.


Source: CNBC

CNN Video | Ken Starr and Joe Lockhart spar over Trump and collusion

Financial Institution Letter | Revisions to the Consolidated Reports of Condition and Income and Other Regulatory Reports

3-4 minutes



FIL-12-2019
March 8, 2019

Printable Format:

FIL-12-2019 - PDF (PDF Help)

Summary:

The banking agencies, under the auspices of the Federal Financial Institutions Examination Council (FFIEC), have finalized revisions to the Consolidated Reports of Condition and Income (Call Report) and certain other FFIEC reports that primarily address changes in the accounting for credit losses under the Financial Accounting Standards Board's Accounting Standards Update (ASU) 2016-13. Other revisions to these reports result from the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA) and relate to the reporting of high volatility commercial real estate (HVCRE) exposures and reciprocal deposits. These revisions, which were issued for comment in September 2018, are subject to approval by the U.S. Office of Management and Budget.
Statement of Applicability to Institutions under $1 Billion in Total Assets: This Financial Institution Letter applies to all FDIC-supervised banks and savings associations, including community institutions.

Highlights:

  • The changes related to credit loss reporting affect all three versions of the Call Report (FFIEC 031, FFIEC 041, and FFIEC 051), as well as the following FFIEC reports that are applicable to a limited number of institutions:
    • Foreign Branch Report of Condition (FFIEC 030),
    • Abbreviated Foreign Branch Report of Condition (FFIEC 030S), and
    • Regulatory Capital Reporting for Institutions Subject to the Advanced Capital Adequacy Framework (FFIEC 101).
  • The changes to the Call Report and the FFIEC 101 report implement the agencies' recent revisions to the regulatory capital rules for the current expected credit losses (CECL) methodology in ASU 2016-13, including a CECL regulatory capital transition.
  • Because ASU 2016-13 has different effective dates for different institutions, the reporting changes related to credit losses will be phased in between March 31, 2019, and December 31, 2022.
  • The reporting changes involving the reporting of HVCRE exposures and reciprocal deposits arise from two sections of EGRRCPA that were effective upon enactment on May 24, 2018. As a consequence, these changes affected reporting in the Call Report and the FFIEC 101 report beginning as of the June 30, 2018, report date.
  • Redlined copies of the FFIEC report forms showing the reporting changes related to credit losses are available on the report forms webpage on the FFIEC's website.
  • The agencies currently are considering the comments received on a separate proposal to implement Section 205 of EGRRCPA on reduced reporting for covered institutions in the Call Report (see FIL 74-2018, dated November 19, 2018). Although the proposal included revisions to the FFIEC 051 reporting requirements that were proposed to take effect March 31, 2019, these reporting changes, if finalized, would take effect no earlier than June 30, 2019.
Source FDIC

Breaking News | Bill Shine resigns from the White House to advise Trump's 2020 campaign

Jacob Pramuk




GS: Bill Shine 190119
White House Communications Director Bill Shine looks on as United States President Donald J. Trump hosts a naturalization ceremony in the Oval Office of the White House in Washington, DC on Saturday, January 19, 2019.
Pool | Getty Images News | Getty Images
White House communications director Bill Shine will resign from his administration post and advise President Donald Trump’s 2020 re-election campaign, the White House announced Friday.
The former Fox News executive joined Trump’s communications staff last year.

Source: CNBC


Real Time Economics | Bad Jobs Report?

The Wall Street Journal.
Percentage logo.
Real Time Economics
U.S. employers added a scant 20,000 jobs, the unemployment rate fell to 3.8% and hourly wages posted their best annual gain in nearly a decade in February. Jeff Sparshott and Greg Ip here to take you through some of the numbers.
 

The Unemployment Rate Says 'Don’t Worry'

At first blush the job market behaved strangely in February. Nonfarm payrolls barely grew, by 20,000, far less than expected. Yet unemployment dropped to 3.8% from 4%. Payrolls are based on a survey of employers while unemployment is drawn from a survey of households. In recent months the two had moved in opposite directions, producing strong payroll growth but rising unemployment. February’s moves correct some of that divergence. Both have likely been distorted by the partial federal government shutdown and cold weather. Averaging over the last three months eliminates those distortions and sends a reassuring message: payroll growth averaged 186,000, about double its underlying demographic trend. The unemployment rate, averaged over three months has still edged up, but may be trending down again. Bottom line: the economy is slowing from last year’s robust 3% pace, but the job market gives no reason to think it’s in trouble. —Greg Ip


Key Themes

For the Fed, a Little More Patience

The February employment report bolsters the Federal Reserve’s decision to stop raising interest rates. Fed officials have been assessing whether market turmoil, trade tensions and a partial government shutdown at the end of 2018 left a mark on the U.S. economy. Housing, consumer spending data and purchasing managers indexes have hinted at a slowdown. A weak jobs report piles on. To be sure, the latest numbers come with an asterisk: Payrolls may have been distorted by the effects of the shutdown and severe weather. Fed officials will want to see another month of data before reaching any conclusions. But Friday’s report will make officials even more patient until data either confirm of falsify the latest blip, Nick Timiraos writes.

Round Mound of Rebound

During the current expansion, the labor market has delivered just a few really ugly months. The worst were followed by big rebounds. January 2011 registered a gain of 20,000 jobs, March 2011 jumped to 213,000. May 2016 was a paltry 15,000, June 2016 was 282,000. September 2017 slipped to 18,000, October 2017 hit 260,000. There's no guarantee that the pattern will repeat, but it's a reminder to look at broader trends.   

Silver Linings

The brightest spots in Friday's jobs report: measures of unemployment and hourly wages. For starters, the broadest measure of unemployment—which includes the discouraged and part-time workers who want full-time work—fell to its lowest level since 2001.

And average hourly earnings rose at the fastest pace in nearly a decade. Weekly hours fell a little, dragging down take-home pay, but subsiding inflation should help bolster real disposable income.

Gray Cloud

The labor-force participation rate didn't budge—and for prime-age workers actually fell a touch. To keep growing, the economy needs to draw more potential workers off the sidelines.

Winners and Losers

The weak sectors of the job market last month included construction, mining and retail, while the health-care and business-services industries created jobs in February. Despite job creation stalling last month, figures from the two prior months were revised higher.

What Economists Are Saying

As the economy slows, a reduction in the pace of job creation is to be expected. It seems likely that both the unexpectedly strong payroll gain in January and the surprisingly weak result in February were both anomalies. —Jim Baird, Plante Moran Financial Advisors
The labor market remains robust and that the economy remains quite strong despite the weak February number. —Tendayi Kapfidze, Lendingtree.com
We can debate whether today’s payroll number signals a broader slowdown of the economy, but the bottom line is slack in the labor market is harder to see, especially considering the increases we have witnessed in wage data over the past few months. —Charlie Ripley, Allianz Investment Management
The U.S. economy has slowed over the past three months and hiring eased along with it. —Joseph Brusuelas, RSM US
This morning’s jobs report ... may be an early sign that slowing global growth, trade tensions, stock market volatility, and the recent federal government shutdown are weighing on the job market. —Andrew Chamberlain, Glassdoor
The sharp slowdown in payroll employment growth in February provides further evidence that economic growth has slowed in the first quarter. That adds weight to our view that the Fed will not be raising interest rates this year. —Michael Pearce, Capital Economics



Europe Markets Closing Report | Europe markets close down after weak China, US data; Sterling sinks on Brexit deadlock

Chloe Taylor, Silvia Amaro



Stocks in Europe fell during Friday's session amid poor U.S. data and as investors continued to digest news of further stimulus in the euro zone.

European Markets: FTSE, GDAXI, FCHI, IBEX

TICKERCOMPANYNAMEPRICECHANGE%CHANGEVOLUME
FTSEFTSE 100FTSE7116.56-40.99-0.57429641810
DAXDAXDAX11471.87-45.93-0.4059868407
CACCACCAC5242.39-25.53-0.4964129000
The pan-European Stoxx 600 was provisionally down 0.78 percent percent during Friday trade, with every sector but telecoms in the red. All major European bourses were in negative territory too.
Market sentiment was influenced by weaker-than-expected Chinese trade data. Chinese exports dropped 20.7 percent in February from a year ago, which has raised questions about broader economic growth in the region — a key element to global growth. Friday also saw disappointing data from the U.S., with numbers showing job growth almost stalled in February.
Sterling dipped sharply hit a two week low as doubts existed over whether Europe and the U.K. could break the Brexit deadlock. There are three weeks until Britain leaves the European union and still no deal has been arranged.
Stateside, stocks opened lower as investors reacted to the weak figures. Wall Street's poor performance during early trade signaled the fifth consecutive day of losses.
Back in Europe, investors are still digesting an announcement from the European Central Bank (ECB) Thursday. President Mario Draghi unveiled a fresh round of loans to boost lending in euro zone banks and, thus, stimulate the real economy. He also said that interest rates would continue to remain at current levels for at least until the end of the year. The ECB also slashed its growth forecast for the euro zone from 1.7 to 1.1 percent for this year.
"The European Central Bank tried to get ahead of the curve. The measures demonstrate the ECB's determination but will do little to tackle the drivers of the current slowdown," Carsten Brzeski, chief economist at ING Germany, said in a note Thursday.
Euro zone government bond yields extended their falls into Friday on the back of the central bank's announcement.
Vonovia was a top performer in Europe after reporting strong full-year results, Reuters reported. Meanwhile, shares of GVC dropped about 12 percent after its chairman and CEO sold shares of the firm.
In other corporate news, reports emerged on Friday that the CEOs of Deutsche Bank and Commerzbank had resumed merger talks. Many analysts have been critical of the rumored merger, with European regulators saying it would not give either lender a much-needed profit boost. Commerzbank stock fell 2 percent on the back of the news, while Deutsche Bank was 1.4 percent lower.
Elsewhere, the U.K.'s Foreign Minister Jeremy Hunt said Friday morning that there had been progress in Brexit talks over the last few days. "There's a bit more to make. It's entirely possible to get there," he said, according to Reuters.
The EU urged the U.K. to come up with proposals to overcome the impasse over the Irish border by Saturday to ensure that there is a positive outcome next week, when U.K. lawmakers vote on the Brexit deal. Pressure is mounting ahead of March 29 departure deadline.

Source: CNBC

Public Safety | Chelsea Manning sent to jail for refusing to testify in WikiLeaks case

By Rachel Weiner




Chelsea Manning leaves the Albert V. Bryan U.S. District Courthouse on Tuesday, March 5, 2019, in Alexandria, VA. (Jahi Chikwendiu/The Washington Post)

Rachel Weiner
Local reporter covering federal court in Alexandria, Va. and local court in Arlington and Alexandria.
Former Army intelligence analyst Chelsea Manning will be held in jail until she testifies before a grand jury or that grand jury is no longer operating, a federal judge in Alexandria ruled Friday.
Most of the hearing at which prosecutors argued for Manning to held in contempt was sealed, but the court was open to the public for Judge Claude M. Hilton’s ruling.
“I’ve found you in contempt,” Hilton said. He ordered her to custody immediately, “either until you purge yourself or the end of the life of the grand jury.”
Manning was called to testify in an investigation into WikiLeaks, the anti-secrecy website she shared classified documents with back in 2010. Manning served seven years of a 35 year prison sentence for her leak before receiving a commutation from then-President Barack Obama.
Outside court before the hearing, Manning said she was prepared to go to jail.
“These secret proceedings tend to favor the government,” she said. “I’m always willing to explain things publicly.”
Manning’s attorney, Moira Meltzer-Cohen, said it would be “an act of tremendous cruelty” to send the transgender ex-private to jail given medical and safety concerns.
Prosecutor Tracy McCormick said the jail has experience handling both transgender inmates and public figures.
“The government does not want to confine Ms. Manning,” McCormick said. “She could change her mind right now and decide to testify.”
Manning’s attorney did thank prosecutors for working in “good faith,” saying “they bent over backwards to accommodate” medical needs linked to Manning’s gender reassignment.
Hilton said any medical concerns Manning has should be addressed with the U.S. Marshals, but that the court was available if she has problems.
Read more:



Market Insider | Stocks making the biggest moves premarket: Big Lots, Navistar, Tilray & more

Peter Schacknow



Check out the companies making headlines before the bell:

Big Lots — The discount retailer reported adjusted quarterly profit of $2.68 per share, above the consensus estimate of $2.30 a share. Revenue also beat forecasts, as did comparable-store sales.
Vail Resorts — The resort operator earned $5.02 per share for its latest quarter, 19 cents a share above estimates. Revenue beat forecasts, as well. Vail lowered its 2019 guidance, however, due to a variety of factors, including fewer than expected destination visits in the pre-holiday period, as well as shortfalls at its Tahoe and Whistler resorts, as it had previously warned. Separately, Vail announced a 20 percent dividend hike.
Navistar — The truck maker earned 11 cents per share for its latest quarter compared to a consensus estimate of 16 cents a share, though that number was impacted by some one-time items. Revenue jumped 28 percent and was above Street forecasts thanks to better truck sales, and the company said the quarter was its best since 2010.
Exxon Mobil — Cowen cut its rating on the stock to “market perform” from “outperform,” saying the energy giant’s long-term dividend commitment could be a negative for investors who may give more weight current excess free cash flow to future free cash flow.
Tilray — Jefferies began coverage of the cannabis producer with an “underperform” rating, saying Tilray has arguably inferior positioning in certain parts of its business compared to its peers.
Caesars Entertainment — Investor Carl Icahn increased his stake in the casino operator to 15.53 percent from the prior 9.78 percent, according to a Securities and Exchange Commission filing. Icahn reached an agreement with Caesars last week to add three of his nominees to the board.
Costco — Costco reported quarterly profit of $2.01 per share, beating the consensus estimate of $1.69 a share. Revenue came in below Wall Street forecasts. Costco saw a 6.7 percent jump in overall comparable-store sales, and also saw a 25.5 surge in comparable online sales. Separately, Costco raised its starting wage for workers to $15 per hour from $14, its second dollar-per-hour increase in less than a year.
Tesla — Tesla reached agreement with Chinese lenders for a 12-month credit facility of up to $521 million for its Shanghai plant that is expected to be finished in May. The automaker has put the total cost of its so-called Gigafactory at $2 billion.
Deutsche Bank — Deutsche Bank and Commerzbank have no mandate from their supervisory and management boards to engage in merger talks, according to sources who spoke to Reuters. Focus magazine had reported that the CEOs of the two German banks had resumed talks about a potential merger on orders from those boards.
Sprint, T-Mobile US — The FCC has halted its 180-day review clock on the proposed merger of Sprint and T-Mobile, giving the public three extra weeks to comment on the $26 billion dollar combination of the two wireless carriers.
Insys Therapeutics — Insys has hired Lazard to advise it on possible strategic options, and the drugmaker also said it was in talks to sell its fentanyl spray product Subsys. Insys had said in November that it was reviewing options for its opioid-related assets.
GlaxoSmithKline — Glaxo reported positive results for an experimental two-drug HIV treatment in a late stage study. The drug combination would be administered just one time per month.
American Outdoor Brands — American Outdoor reported quarterly profit of 16 cents per share, 4 cents a share above estimates. The firearms maker’s revenue also came in above forecasts. Without an adjustment for a restructuring charge, the company formerly known as Smith & Wesson reported a quarterly loss.
Okta — Okta reported a quarterly loss of 4 cents per share, smaller than the 8 cents a share that Wall Street analysts were forecasting. The maker of identity management tools also saw revenue beat forecasts, but it also gave a weaker-than-expected outlook.
The Buckle — The stock was downgraded to “sell” from “hold” at Deutsche Bank, which expects the accessories retailer to miss consensus estimates for its fourth quarter. The company is scheduled to report its quarterly results on March 15.

Wealth | Wealthy millennials boosting the art market

Brenna Hughes Neghaiwi



ZURICH (Reuters) - The global art market experienced another uptick in 2018, helped by an increase in the spending power of millennials, a report published by UBS and Art Basel said on Friday.
The logo of Sotheby's auction house is seen at a branch office in Zurich, Switzerland October 25, 2016. REUTERS/Arnd Wiegmann
A survey of wealthy individuals conducted by UBS and art economist Clare McAndrew for the report found millennials were buying art more actively and frequently taking to the internet to do so. It found that more of them were willing to shell out big money on art than their older peers.
They also provided a boost for female artists.
“For a generation that might never own a car, their appetite for buying art is encouraging,” UBS Group Chief Marketing Officer Johan Jervøe told Reuters.
“It may be a reflection of the unique and often experiential qualities of art and collectibles as long-term assets.”
Overall sales in the art market grew 7 percent to $67.4 billion in 2018, according to UBS and Art Basel’s third annual art market report.
People between 22 and 37 years of age made up nearly half of the wealthy art buyers who regularly spent $1 million or more on an artwork over the past two years, the survey found, despite representing just over a third of the high-net-worth individuals surveyed.
The results of the survey, which was conducted in Britain, Germany, Japan, Singapore and Hong Kong, offered a silver lining for the art world as geopolitical and economic worries have weighed on overall sentiment.
As millennials grow into greater wealth, and benefit from a generational shift in wealth inherited from aging parents, their wealth could reach $24 trillion by 2020, according to Deloitte.
Millennials’ spending habits could provide significant potential for both online sales and art’s squeezed middle, Jervøe said, benefiting the industry’s overall health.
Long-lost Caravaggio painting to be auctioned in June in France
This younger generation of collectors with over $1 million in household assets to spend or invest helped buoy the digital art marketplace to $6 billion sales last year.
And a majority of them also took to photo-sharing social media platform Instagram to source and buy art.
Between 2016 and 2018, 93 percent of the millennials made purchases online, spending $106,930 on average, while the slightly older Generation X - between 38 and 52 years of age -spent around half a million dollars on an average web purchase, but did so with less frequency.
Reporting by Brenna Hughes Neghaiwi; Editing by Mark Heinrich

Source: Reuters

Davos | Stock futures fall on global growth concerns; jobs data awaited

Medha Singh



(Reuters) - U.S. stock futures slipped on Friday on global growth worries after Chinese data showed exports tumbled the most in three years, while investors turned their focus to domestic monthly employment report.
FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., March 7, 2019. REUTERS/Brendan McDermid
China’s exports in February fell 20.7 percent from a year earlier compared to a 4.8 percent drop expected by economists polled by Reuters, pointing to a further slowdown in the economy and stirring talk of a “trade recession”.
The bleak China trade data overnight added to worries of a slowing global economy, after European Central Bank’s cut growth forecasts and unveiled a new round of stimulus, which led the U.S. stocks to record their fourth day of declines.
Adding to investor nerves was a comment from U.S. ambassador to China that the two sides have yet to set a date for a summit to resolve their trade dispute as neither side feels an agreement is imminent, the Wall Street Journal reported.
Tariff sensitive Boeing Co fell 0.9 percent before the bell and Caterpillar Inc edged 0.6 percent lower, while chipmakers, which derive a large chunk of their revenue from China, also dropped.
Nvidia Corp, Advanced Micro Devices Inc and Micron Technology Inc fell about 1 percent each.
The heavyweight FAANG group of stocks were also among early losers, with Facebook Inc, Amazon.com Inc, Apple Inc, Netflix Inc and Alphabet Inc down between 0.7 percent and 0.9 percent.
In the spotlight is the Labor Department’s data expected at 8:30 a.m. ET, which is likely to show U.S. job growth slowed to a five-month low in February.
Nonfarm payrolls is expected to rise 180,000 last month from a 304,000 increase in January.
At 7:20 a.m. ET, Dow e-minis were down 113 points, or 0.44 percent. S&P 500 e-minis were down 11.75 points, or 0.43 percent and Nasdaq 100 e-minis were down 37.5 points, or 0.53 percent.
U.S. trade gap balloons to 10-year high
In a relatively slow week for markets, Wall Street’s main indexes are eyeing their fifth day of declines and are on pace for their steepest weekly fall in at least two months after starting the year on a strong note.
The S&P 500 closed below a closely watched 200-day moving average level in the previous session for the first time in about a month.
In corporate news, Costco Wholesale Corp jumped 4.7 percent after the warehouse club operator’s quarterly profit trumped estimates as margin pressures eased.
A separate report from the Commerce Department is expected to show permits for future home construction fell to 1,289,000 units in January, down from 1,326,000 units in December.
Reporting by Medha Singh and Amy Caren Daniel in Bengaluru; Editing by Arun Koyyur

Source: Reuters

Company News | 3 Reasons Big Investors Are Pouring Billions Into ETFs

By Mark Kolakowski Updated Mar 8, 2019



Contrary to their reputation as an vehicle designed for retail investors, especially individuals with relatively small accounts, ETFs are finding increasing favor with large institutional investors. Indeed, ETFs represented 24.8% of institutional asset managers' portfolios by late 2018, up from 18.5% in 2017, according to a survey conducted by financial data firm Greenwich Associates, as reported in Business Insider. Three of the major reasons for this trend are summarized n the table below.
Why Big Investors Love ETFs
Source: Business Insider

Significance for Investors

Greenwich Associates surveyed 181 investment managers, institutional funds, insurance companies, investment advisors, and other entities. Most of them had $5 billion or more in assets under management (AUM).
Risk management. The institutional investors surveyed by Greenwich Associates named managing risk as their number one priority by far. Among the biggest contributors to market risk right now are the U.S.-China trade conflict, Brexit, and the uncertain economic outlook in China. Respondents cited the ease and low cost of using ETFs as a risk management tool.
Poor performance of active managers. The poor performance of active managers in the volatile market of late 2018, an environment that was supposed to be ideal for them, convinced many respondents to switch to index-tracking ETFs that outperformed the stock pickers. An increasing number of institutional investors also are switching to ETFs in place of index mutual funds and individual stocks.
Passively-managed large cap equity mutual funds and ETFs now control more assets than actively-managed funds. This is largely the result of deteriorating performance by active managers, according to research by Morningstar.
Indeed, a key impetus for the rapid growth of ETFs during the past decade was the failure of actively-managed funds to protect investors during the financial crisis of 2008 and the recession of 2007 to 2009. "People were disappointed that active management didn't help them. They said they'd be able to protect you on the downside and a lot of managers didn't deliver on that promise," as Alex Bryan, director of passive strategies research at Morningstar, told CNBC.
Facilitating portfolio shifts. The increasingly wide variety of investment themes that ETFs follow are making them attractive means for establishing and changing core allocations, getting international diversification, and even managing cash and liquidity. ETFs also are gaining popularity as a means to make fixed income investments.
Rapid growth. U.S.-listed ETFs controlled about $3.75 trillion of assets as of the end of Feb. 2019, per ETF.com. This is more than seven times their value in 2008. Retail investors have been trading individual stocks for ETFs at an accelerating rate, per analysis by Bank of America Merrill Lynch cited by CNBC.

Looking Ahead

The trend towards passive investment management, increasingly through ETFs, is gaining momentum. With big institutional investors now embracing those trends, active managers are under escalating pressure to prove their worth.

World News | Without vaccine, hundreds of children die in Madagascar measles...

Lova Rabary



ANTANANARIVO (Reuters) - Two months ago, giggles floated through the home of fisherman Dada as his four-year-old son played ball outside with his two younger cousins on one of Madagascar’s famed sun soaked beaches.
Malagasy fisherman Dada holds a photo of three cousins who died of measles one week apart in Fort Dauphin, Madagascar February 28, 2019.
A few weeks later, all three children were dead, victims of the worst measles outbreak on the Indian Ocean island in decades.
Measles cases are on the rise globally, including in wealthy nations such as the United States and Germany, where some parents shun life-saving vaccines due to false theories suggesting links between childhood immunizations and autism.
In Madagascar, one of the world’s poorest countries, parents are desperate to vaccinate their children, many trudging for miles to get to clinics for shots. But there are not enough vaccines, the health ministry says, and many people are too poor to afford them.
Fisherman Dada – like many Malagasy, he only uses one name – had taken his son Limberaza to be vaccinated once already in their home in the southern district of Fort Dauphin.
But a second-dose booster shot cost $15 at a clinic - and the whole family survives on less than $2 a day - so he took the boy to a back-street doctor instead.
“I could not afford to take him to the hospital,” Dada said quietly as his young wife silently held Limberaza’s two-year-old brother.
In January, Limberaza began to cough. A rash followed. After a week, he died, his body afire with fever.
By then Dada’s niece, three-year-old Martina, was also sick. Her weeping mother Martine stroked her face as her fever spiked.
She died eight days later.
That evening, his other sister Pela’s three-year-old son Mario died as she clutched his hands.
“They were so full of life,” Dada said, his voice breaking.
The three cousins are among the almost 1,000 people, mostly children, who have died from measles in Madagascar since October.
Their deaths show the grim reality for those left unprotected from one of the world’s most contagious diseases. The virus, which can cause blindness, pneumonia, brain swelling and death, is able to survive for up to two hours in the air after a cough or sneeze, where it can easily infect people nearby.
Even though there is a highly effective vaccine, globally, around 110,000 people died from measles in 2017, according to the World Health Organization (WHO). Most, like Limberaza and his cousins, were children under the age of five.

SHOTS FOR LIFE

During 2000 to 2017, the WHO estimates that widespread use of measles vaccinations prevented 21.1 million deaths - making the shots one of what the United Nations’ health agency calls the “best buys in public health.”
Yet misinformation is knocking confidence in the safety of vaccinations and has jeopardized progress against measles - allowing the disease to gain a hold again in places where it was considered almost beaten.
Europe last year saw its highest level of measles cases in a decade, and in January, the WHO named “vaccine hesitancy” - the reluctance or refusal to vaccinate - as one of the top ten global health threats for 2019.
In Madagascar, poverty is a bigger risk. While wealthy tourists flock to its rainforests to spot wide-eyed lemurs and business people bargain for its luminous sapphires and fragrant vanilla, nearly half of Madagascar’s children are malnourished, the highest rate in Africa.
The former French colony has been battered by decades of coups and instability. Foreign aid plummeted after a 2009 coup sparked bitter political street fighting. Corrupt leaders ignored the crumbling healthcare system despite frequent outbreaks of plague, hemorrhagic fevers and deadly viruses.
Measles is endemic on the island but the last vaccination drive was in 2004. Nearly two-thirds of children have not been vaccinated, according to the WHO and coverage needs to be around 95 percent to prevent the virus spreading in communities.
The country is $3 million short of the $7 million needed for enough measles vaccines to cover its population, the WHO said last month.
There are other hurdles. The vaccines must be kept cold, but less than 15 percent of people in Madagascar have electricity. Roads are mostly mud in the tropical country; journeys are arduous and expensive.
At least 922 people - mostly children - have died of measles in Madagascar since October, the WHO says, despite an emergency program that has vaccinated 2.2 million of the 26 million population so far.
Some of those, like Limberaza, had previously been vaccinated but had only received one shot, and still needed a second booster jab. Madagascar hopes to roll out a free routine two-dose vaccination program this year. Currently, the first shot is free but the booster is not.

OBSTACLE COURSE

Despite the difficulties, some parents walk miles seeking shots, said Jean Benoît Mahnes, deputy representative for the United Nations Children’s Fund in Madagascar. But they often arrive to find the clinic closed, or a doctor with no vaccine, or a vaccine that has expired.
“Vaccinating a child can be a real obstacle course here,” he said.
Lydia Rahariseheno, 33, said she had to walk an hour and a half to a clinic along a road plagued by robbers to get her three children vaccinated. She has only managed to get one shot so far because the doctor is often not there.
The health system’s failures mean poverty-stricken parents often take sick children to traditional healers who prescribe a herb, tingotingo, which is boiled and given to them to drink.
The children are only brought to a hospital when their condition deteriorates, said Manitra Rakotoarivony, director of health promotion at the Ministry of Public Health.
Limberaza’s father hoped a second, cheaper shot would protect him - but it didn’t. His cousins Mario and Martine weren’t vaccinated at all.
Now the family is desperate to protect their remaining children.
“We did not expect the failure to vaccinate him would kill him,” wept Pela, Mario’s mother. “My other child, for sure, I am going to take him to get vaccinated.”
Additional reporting by Kate Kelland in London; writing by Katharine Houreld; editing by Carmel Crimmins

Source: Reuters