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Sep 23, 2019

U.S. Politics: Trump ordered hold on military aid days before calling Ukrainian president, officials say

Karoun Demirjian



President Trump told his acting chief of staff, Mick Mulvaney, to hold back almost $400 million in military aid for Ukraine at least a week before a phone call in which Trump is said to have pressured the Ukrainian president to investigate the son of former vice president Joe Biden, according to three senior administration officials.
Officials at the Office of Management and Budget relayed Trump’s order to the State Department and the Pentagon during an interagency meeting in mid-July, according to officials who spoke on the condition of anonymity to discuss internal deliberations. They explained that the president had “concerns” and wanted to analyze whether the money needed to be spent.
Administration officials were instructed to tell lawmakers that the delays were part of an “interagency process” but to give them no additional information — a pattern that continued for nearly two months, until the White House released the funds on the night of Sept. 11.
Trump’s order to withhold aid to Ukraine a week before his July 25 call with Volodymyr Zelensky is likely to raise questions about the motivation for his decision and fuel suspicions on Capitol Hill that Trump sought to leverage congressionally approved aid to damage a political rival. The revelation comes as lawmakers clash with the White House over a related whistleblower complaint made by an intelligence official alarmed by Trump’s actions.
Trump denies explicitly tying U.S. military aid to demand for Ukrainian probe of Biden
Republican senators on the Senate Appropriations Committee said Sept. 12 that the aid to Ukraine had been held up while the Trump administration explored whether Zelensky, the country’s new president, was pro-Russian or pro-Western. They said the White House decided to release the aid after Sen. Richard J. Durbin (D-Ill.) threatened to freeze $5 billion in Pentagon funding for next year unless the money for 2019 was distributed.
One senior administration official said Monday that Trump’s decision to hold back the funds was based on his concerns about there being “a lot of corruption in Ukraine” and that the determination to release the money was motivated by the fiscal year’s looming close on Sept. 30.
There was concern within the administration that if they did not spend the money, they would run afoul of the law, this official said, noting that, eventually, Trump gave the OMB’s acting director, Russell Vought, permission to release the money. The official emphatically denied that there was any link between blocking the aid and pressing Zelensky into investigating the Bidens, stating: “It had nothing to do with a quid pro quo.”
But on Capitol Hill, Democrats were calling for an investigation of what they viewed as potential “extortion,” as Sen. Robert Menendez (N.J.), the Senate Foreign Relations Committee’s ranking Democrat, put it Monday. Trump, he said, is trying to “reshape American foreign policy” to advance his personal and political goals.
“I don’t think it really matters . . . whether the president explicitly told the Ukrainians that they wouldn’t get their security aid if they didn’t interfere in the 2020 elections,” said Sen. Chris Murphy (D-Conn.). “There is an implicit threat in every demand that a United States president makes of a foreign power. . . . That foreign country knows that if they don’t do it, there are likely to be consequences.”
Trump administration again pushes limits of authority in shielding whistleblower complaint from Congress
Trump on Monday repeated his denial of doing anything improper and insisted that his July 25 conversation with Zelensky was “a perfect phone call.” He also hinted that he may release a transcript of it.
But the Ukrainian leader was apparently left with a different impression. Murphy, who spoke with Zelensky during an early September visit to Ukraine, said Monday that the Ukrainian president “directly” expressed concerns at their meeting that “the aid that was being cut off to Ukraine by the president was a consequence” of his unwillingness to launch an investigation into the Bidens.
Hunter Biden served for nearly five years on the board of Burisma, Ukraine’s largest private gas company, whose owner came under scrutiny by Ukrainian prosecutors for possible abuse of power and unlawful enrichment. Hunter Biden was not accused of any wrongdoing in the investigation. As vice president, Joe Biden pressured Ukraine to fire its top prosecutor, Viktor Shokin, who Biden and other Western officials said was not sufficiently pursuing corruption cases — at one point, threatening to withhold $1 billion in loan guarantees. At the time, the investigation into Burisma was dormant, according to former Ukrainian and U.S. officials.
Trump’s allies have frequently said he has been better about distributing military aid, and specifically lethal aid, to Ukraine than his predecessor. Yet according to Democratic and Republican aides, no administration has withheld funds as long and as mysteriously as the Trump administration did this year since the United States began helping Ukraine fend off Russian-backed separatists in the country’s eastern provinces.
Congressional officials were notified twice this year, on Feb. 28 and again on May 23, that the administration intended to release large tranches of military aid to Ukraine. Congress approved two large pots of military aid for Ukraine during fiscal 2019: $250 million, to be managed by the Pentagon, for equipment such as sniper rifles, counter-artillery radar systems, ammunition and grenade launchers; and $141 million, to be funneled through the State Department, for maritime security, NATO interoperability and various initiatives to help Ukraine’s military fend off Russian aggression.
Despite those notifications, the money was not transmitted until this month.
According to administration officials, discussions about Ukrainian aid began in June. Withholding aid from foreign governments is something the president has frequently requested, such as with Central American countries when he believed they were not doing their part to help the United States with immigrants amassing at the southern border.
Former national security adviser John Bolton wanted to release the money to Ukraine because he thought it would help the country while curtailing Russian aggression. But Trump has said he was primarily concerned with corruption.
“It’s very important to talk about corruption,” Trump told reporters. “If you don’t talk about corruption, why would you give money to a country that you think is corrupt?”
Besides Bolton, several other administration officials said they did not know why the aid was being canceled or why a meeting was not being scheduled.
The decision was communicated to State and Defense officials on July 18, officials familiar with the meeting said.
By mid-August, lawmakers were acutely aware that the OMB had assumed all decision-making authority from the Defense and State departments, and was delaying the distribution of the aid through a series of short-term notices. Several congressional officials questioned whether the OMB had the legal authority to direct federal agencies not to spend money that Congress had already authorized, aides said.
Spokespeople for the Pentagon and the State Department declined to comment.
Mid-August is also when a whistleblower from the intelligence community filed a complaint regarding Trump and Ukraine to Intelligence Community Inspector General Michael Atkinson. Atkinson informed the House and Senate intelligence committees of the complaint’s existence Sept. 9 — the same day three House committees launched an investigation to determine whether Trump and his lawyer, Rudolph W. Giuliani, had improperly pushed Ukraine to investigate the Bidens.
Capitol Hill has not been briefed on the details of the whistleblower complaint, on orders of the acting director of national intelligence, Joseph Maguire, who after consulting with the Justice Department and the White House declined to transmit the complaint to lawmakers. On Thursday, Maguire is set to testify publicly before the House Intelligence Committee and in a closed session before the Senate Intelligence Committee.
Shane Harris, Anne Gearan and Paul Sonne contributed to this report.

EU - FX | Currencies: Dollar finds support as trade talks stay on track, euro nurses losses

3-4 minutes - Source: CNBC




GP: Chinese Currency Exchange Rate Fell Beyond 7 190826
A bank employee counts U.S. currency and Chinese currency notes at a bank in Nantong, Jiangsu Province of China.
Xu Jinbai | Visual China Group | Getty Images
The euro nursed losses on Tuesday after weak readings on German manufacturing rattled confidence, while the dollar found broad support as investors looked for signs of progress from Sino-U.S. trade negotiations.
The single currency shed 0.2% overnight after a survey showed European business activity stalling, and in fact going backwards in powerhouse Germany where a manufacturing recession deepened.
It held around $1.0990 in Asian hours, while the dollar edged higher against the Japanese yen to buy 107.58 yen and held its ground on the Australian and New Zealand dollars.
Against a basket of currencies, the dollar edged higher to 98.621.
“The U.S. dollar is rising by default rather than anything U.S.-specific,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney, adding that volumes were low as traders mostly kept to the sidelines waiting for news.
“Trade is never far from the markets’ radar, but I think currency markets are increasingly expecting (U.S-China tensions) to be protracted, I think optimism has dissipated.”
The British pound wallowed at $1.2431, near a one-week low, ahead of a UK Supreme Court ruling due around 0930 GMT.
The court will rule on whether Prime Minister Boris Johnson acted unlawfully when he suspended parliament just weeks before Brexit, with the case’s outcome potentially complicating his plans to lead his country out of the European Union next month.
The Australian and New Zealand dollars were steady ahead of a speech by Reserve Bank of Australia Governor Phil Lowe at 1005 GMT, with the market expecting a dovish tone after weak jobs data last week lifted expectations of an imminent rate cut.
Both currencies sat near three-week lows, with the Aussie buying $0.6772 and the kiwi $0.6290.
“We think Lowe will provide a strong signal that the RBA is ready to cut rates again, endorsing our view for a 25bp cut in October,” said Tapas Strickland, a director of economics and markets at National Australia Bank in Sydney.
“Any comments on the scope for unconventional policy will also be critical for the market.”
The Bank of Japan’s governor Haruhiko Kuroda is also due to speak today, around 0530 GMT.
Meanwhile a delicate upbeat mood broadly held, with Chinese importers’ decision to buy 10 boatloads of U.S. soybeans seen as a positive sign leading in to trade negotiations next month.
China’s yuan strengthened very slightly to 7.1056 in offshore trade.
U.S. Treasury Secretary Steven Mnuchin told Fox Business that discussions were scheduled in two weeks and that he and U.S. Trade Representative Robert Lighthizer would meet Chinese Vice Premier Liu He.

Bonds | Treasury Yield Report: Treasury yields fall after weak data stokes global growth worries

Fred Imbert, Sam Meredith



GS: Bond Traders Treasury Notes 071031
Traders signal offers in the Ten-Year Treasury Note Options pit at the Chicago Board of Trade.
Scott Olson | Getty Images
U.S. government debt prices rose on Monday as investors looked for safety after the release of weak European economic data stoked worries about the global economy.
The benchmark 10-year Treasury yield dropped more than 4 basis points to 1.7034% while the 2-year rate slid to 1.66%. Yields move inversely to prices.

U.S. Markets Overview: Treasurys chart

TICKER COMPANY YIELD CHANGE %CHANGE
US 3-MOU.S. 3 Month Treasury1.9460.000.00
US 1-YRU.S. 1 Year Treasury1.8130.000.00
US 2-YRU.S. 2 Year Treasury1.6790.010.00
US 5-YRU.S. 5 Year Treasury1.5940.0120.00
US 10-YRU.S. 10 Year Treasury1.7160.0080.00
US 30-YRU.S. 30 Year Treasury2.1590.0060.00
German manufacturing activity dropped to its lowest level since the financial crisis this month, according to data from IHS Markit. Germany’s services sector also grew at its slowest pace in nine months. Overall, manufacturing in the euro zone fell to a more than six-year low while services grew at is slowest pace in eight months, the data showed.
Yields in Europe also fell broadly. Germany’s 10-year rate slid more than 7 basis points to negative 0.582%. France’s benchmark yield fell to negative 0.289%. Italy’s 10-year note yield dropped 9 basis points to 0.828%.
“These are not good numbers and they do not imply global economic stabilization is occurring,” said Tom Essaye, founder of The Sevens Report, in a note.
U.S. manufacturing activity rebounded to a five-month high, IHS Markit said, but the firm noted the data was till near three-year lows. “Prospects also look gloomy, with inflows of new business down to the lowest since 2009.”
Investors also kept an eye on U.S.-China trade developments. The U.S. and China described over the weekend last week’s deputy-level trade talks as “constructive.”
October’s high-level trade talks remain on track, but a breakthrough appeared unlikely after President Donald Trump told reporters on Friday that he was “not looking” for a partial deal and Chinese officials canceled goodwill visits to U.S. farmers.
“When you look at the world as we know it right now, the risks out there still remain,” said Gregory Faranello, head of U.S. rates at AmeriVet Securities, in a note. “Flexibility will be the key in the coming weeks. And in the end, the biggest driver going forward will be trade.”

U.S. Market | Wall Street Closing Report: Stocks close little changed amid worries about the global economy

Fred Imbert



Stocks closed little changed Monday as weak economic data out of Europe stoked worries over the state of the global economy.
The Dow Jones Industrial Average was up 66 points, or 0.3%, led by a gain in American Express. The S&P 500 and Nasdaq Composite climbed 0.2% each.
Manufacturing activity in Germany fell to its lowest level since the financial crisis this month, data from IHS Markit showed. Germany’s services sector also grew at its slowest pace in nine months. Overall, manufacturing in the euro zone fell to a more than six-year low while services grew at is slowest pace in eight months, IHS Markit said.
European stocks fell broadly on the weak data. The German Dax dropped 1.2% while France’s CAC 40 slid 1.1%.
The U.S. manufacturing sector hit a five-month high in September, while the services sector grew at its fastest pace in two months, according to data from IHS Markit. However, IHS noted the manufacturing data remained among the weakest since 2016. “Prospects also look gloomy, with inflows of new business down to the lowest since 2009.”
Monday’s moves come after the major indexes snapped a three-week winning streak on Friday as they struggled to reach July’s record highs. Entering Monday’s session, the Dow and S&P 500 were more than 1% from their all-time highs. The Nasdaq Composite was 2.7% away.
Traders work on the floor of the New York Stock Exchange (NYSE) on November 28, 2018 in New York City.
Spencer Platt | Getty Images
“Trends remain largely intact from mid-August lows, but still largely a poor Risk/reward for new longs until many US indices and sectors can get back above July highs, which might be difficult during one of the more seasonally bearish weeks of the year,” Mark Newton, managing member at Newton Advisors, wrote in a note.
Stocks have struggled at these levels amid lingering trade tensions between China and the U.S. However, senior Chinese trade officials said talks held last week were “constructive.” U.S. officials said in a statement the two sides held “productive” trade talks ahead of formal negotiations next month.
President Donald Trump has said China would increase its purchases of U.S. agricultural products as part of a bilateral trade deal.
“Trade wars and isolationist policies pose a major threat heading forward, and are being fueled in part by the reduction in global trade and manufacturing jobs,” said Phillip Colmar, partner at MRB Partners, in a note. “So far, the direct impact has been modest, but the indirect impact on manufacturing sentiment and activity has been meaningful given the starting point of subdued global export demand.”
Amazon shares pulled back by 0.4% after an analyst at Morgan Stanley lowered its price target on the e-commerce giant to $2,200 from $2,300. The analyst cited Amazon’s one-day shipping for the target trim, but noted this will “will likely only deepen their moats” long term.
American Express rose 1.3% after the company authorized a buyback program of up to 120 million shares. The company also hiked its dividend by 10% to 43 cents per share.
—CNBC’s Silvia Amaro contributed to this report.

Press Release | Violation of Auditor Independence Rule: The SEC Charges PwC LLP With Violating Auditor Independence Rules and Engaging in Improper Professional Conduc

4-5 minutes - SEC



Washington D.C., Sept. 23, 2019 —
The Securities and Exchange Commission today charged accounting firm PricewaterhouseCoopers LLP with improper professional conduct in connection with 19 engagements on behalf of 15 SEC-registered issuers and violating auditor independence rules in connection with engagements for one issuer where the firm performed prohibited non-audit services. The SEC also charged PwC partner Brandon Sprankle with causing the firm’s independence violations. Both respondents have agreed to settle the charges and PwC will pay over $7.9 million in monetary relief.
The SEC’s order finds that PwC violated the SEC’s auditor independence rules by performing prohibited non-audit services during an audit engagement, including exercising decision-making authority in the design and implementation of software relating to an audit client’s financial reporting, and engaging in management functions. In connection with performing non-audit services for 15 SEC-registered audit clients, the order states that PwC violated Public Company Accounting Oversight Board (PCAOB) Rule 3525, which requires an auditor to describe in writing to the audit committee the scope of work, discuss with the audit committee the potential effects of the work on independence, and document the substance of the independence discussion. According to the order, PwC’s actions deprived numerous issuers’ audit committees of information necessary to assess PwC’s independence. As further detailed in the order, the violations occurred due to breakdowns in PwC’s independence-related quality controls, which resulted in the firm’s failure to properly review and monitor whether non-audit services for audit clients were permissible and approved by clients’ audit committees.
“Auditors play a fundamental role in protecting the reliability and integrity of financial reporting and must ensure that non-audit services do not come at the cost of their independence on audits of public companies,” said Anita B. Bandy, Associate Director of the SEC’s Division of Enforcement. “PwC repeatedly provided non-audit services without having effective quality controls in place for monitoring whether the services impaired its independence on audit engagements and were properly disclosed to audit committees.”   
The SEC’s orders find that PwC and Sprankle violated the auditor independence provisions of the federal securities laws and caused one audit client to violate its obligation to have its financial statements audited by independent public accountants. The order also finds that PwC and Sprankle engaged in improper professional conduct within the meaning of Rule 102(e) of the SEC’s Rules of Practice.
PwC and Sprankle consented to the SEC’s order without admitting or denying the findings and agreed to cease and desist from future violations. PwC agreed to pay disgorgement of $3,830,213, plus prejudgment interest of $613,842 and a civil money penalty of $3.5 million, and to be censured. Sprankle agreed to pay a civil money penalty of $25,000, and to be suspended from appearing or practicing before the Commission, with a right to reapply for reinstatement after four years. PwC also agreed to perform a detailed set of undertakings requiring the firm to review its current quality controls for complying with auditor independence requirements for non-audit services and for evaluating its provision of non-audit services.
The SEC’s investigation was conducted by Matthew Finnegan and Paul Gunson and was supervised by Ms. Bandy and Douglas McAllister. The SEC appreciates the assistance of the PCAOB.

Energy | Oil | Oil Price Report: Oil steadies on hopes of full Saudi output restart

3-4 minutes - Source: CNBC




GP: Oil refinery at Corio silhouetted at sunset 190923
Richard I’Anson | Lonely Planet Images | Getty Images
Oil stabilized on Monday, after gaining nearly 7% last week, as lingering concerns over global supplies following the Sept. 14 attack on Saudi oil facilities offset prospects for a faster-than-expected restoration of the kingdom’s output and on signs of European economic weakness.
Saudi Arabia has restored around 75% of crude production lost in the attacks that knocked down 5.7 million barrels per day, or more than half of the kingdom’s oil production, a source, briefed on the latest developments in the attack on Saudi oil facilities, told Reuters.
Global benchmark Brent futures were down 9 cents to $64.19 a barrel, while U.S. West Texas Intermediate (WTI) crude was up 1 cent to $58.10.
“Although the market has settled down in recent sessions, we still feel that it has drifted into a new and higher trading range given the loss of Saudi production that has already developed and the need for a sizable risk premium to account for the possibility that another drone attack could be forthcoming,” Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois, said in a report.
A survey showing euro zone business growth stalled this month, dragged down by shrinking activity in Germany where a manufacturing recession deepened unexpectedly, also weighed on oil and other markets such as equities.
“Oil prices are tracking European markets lower ... understandably knocked by the woeful manufacturing data from the bloc and the implications for global growth and demand,” said Craig Erlam, analyst at OANDA.
Brent, however, has still gained over 19% this year, helped by a supply-limiting pact led by the Organization of the Petroleum Exporting Countries, although concern about slowing economic growth has limited the advance.
Tension in the Middle East has escalated since the Saudi attack. The Pentagon has ordered additional U.S. troops to be deployed in the Gulf region to strengthen Saudi Arabia’s air and missile defenses.
Britain believes Iran was responsible for the attack and will work with the United States and European allies on a joint response, Prime Minister Boris Johnson said. The United States and Saudi Arabia have also blamed Iran, which denies responsibility.
The Saudi attacks have refocused investor attention on the prospect of supply disruptions in other OPEC producers. Investors had been less concerned about supply risks due to ample supplies.
“The geopolitical risk premium has returned with a vengeance and supply-side developments have been thrust back into the spotlight,” Stephen Brennock of oil broker PVM said.
“While Saudi oil facilities smolder, the potential for fresh outages in Nigeria, Libya and Venezuela continues to hang over the market.”

Futures & Commodities | Gold | Gold Price Report: Gold hits 2-week high on growth fears, palladium scales new peak

3 minutes - Source : CNBC




GP: Gold bars 171204
An employee arranges gold bars for a photograph at the YLG Bullion International headquarters in Bangkok, Thailand on January 13, 2016.
Dario Pignatelli | Bloomberg | Getty Images
Gold rose on Monday to its highest in over two weeks as weak economic data from the euro zone stoked global recession fears and forced investors to seek refuge in bullion, while palladium soared to a record on a sustained supply shortfall.
Spot gold was up 0.5% at $1,524.71 per ounce, after hitting its highest since Sept. 6. U.S. gold futures rose 1.1% to $1,532.40 an ounce.
“The weak German PMI numbers gave a little bit of a shock to the stock market and led investors into safety like gold and silver,” said Phillip Streible, senior commodities strategist at RJO Futures.
Gold could hit $1,550 in this supportive environment of “weak interest rates, increasing geopolitical risks, no (trade) agreement with China and weak data that shows we are slipping into recession,” Streible added.
German private sector activity shrank for the first time in 6-1/2 years in September as a manufacturing recession deepened unexpectedly and growth in the service sector lost momentum, while euro zone business growth stalled, a survey showed on Monday.
Meanwhile, better-than-expected U.S. manufacturing PMI data helped stock markets pare some losses, but failed to dent gold’s upward momentum.
Investors are also keeping a close eye on U.S.-China trade ties, after a Chinese agriculture delegation cancelled their visit to U.S. farm states, adding to the uncertainty in the drawn-out dispute that has weighed on the global economy.
Adding to geopolitical tensions, U.S. President Donald Trump on Friday approved sending American troops to bolster Saudi Arabia’s air and missile defenses after the largest-ever attack on the kingdom’s oil facilities.
Meanwhile, palladium prices soared to a record high of $1,664.50 an ounce. The autocatalyst metal has risen nearly 8% or about $115 so far this month.
“People are starting to realize that auto sales and production outside of China is actually not so bad and so demand from the industrial sector is stronger that what people thought,” said Jeffrey Christian, managing partner of CPM Group.
“In addition to that, there are a lot of investors moving in that market and in such a small, illiquid market, it doesn’t take a lot of investors to drive the price higher.”
Elsewhere, silver gained 3.5% to $18.61 per ounce and platinum rose 1.8% to $962.55.

Europe I Europe Markets Closing Report: European stocks fall close lower as weak German data rattles markets; Thomas Cook collapses

Sam Meredith, Ryan Browne



European shares were sharply lower Monday afternoon, as investors reacted to weaker-than-expected economic data and the collapse of one of the world’s most well-known tour operators.

European Markets: FTSE, GDAXI, FCHI, IBEX

TICKER COMPANY NAME PRICE CHANGE %CHANGE VOLUME
FTSEFTSE 100FTSE7326.08-18.84-0.26484053582
DAXDAXDAX12342.33-125.68-1.0180383570
CACCACCAC5630.76-60.02-1.0681625014
The pan-European Stoxx 600 was down around 0.8% during afternoon deals, with most sectors and major bourses in negative territory.
Europe’s autos sector, mining sector, and banking index all traded sharply lower. France’s Peugeot Citroen, Germany’s Commerzbank and the Netherlands’ ArcelorMittal were the worst performers from their respective sectors.
Fragile market sentiment deteriorated on Monday after business activity data from the bloc’s biggest economy added to investors’ recession fears.
German private sector activity shrank for the first time in six-and-a-half years in September, survey data showed, as a manufacturing recession deepened unexpectedly and growth in the service sector lost momentum.
Markit’s flash reading of composite German PMI (purchasing managers’ index) came in at 49.1 in September, down from 51.7 in the previous month.
The manufacturing element was particularly troubling, coming in 41.4. That’s the lowest gauge of German factory sentiment for more than a decade. Any number below 50 indicates contraction.

Thomas Cook

Travel and leisure stocks traded marginally higher Monday afternoon. It comes after British tour operator Thomas Cook announced it had collapsed, leaving thousands of holidaymakers stranded.
CEO Peter Fankhauser apologized to the group’s customers and staff, adding it was “a matter of profound regret” the firm was unable to secure a rescue package from its lenders. The tour operator’s failure has put 22,000 jobs at risk worldwide.
European airlines and tour operator TUI rose to the top of the benchmark during lunchtime trade, with Britain’s easyJet also surging higher on the news.
The collapse of Thomas Cook could cut come overcapacity that has hurt profits and weighed on holiday prices in recent years, Reuters reported, citing traders. Shares of TUI jumped more than 7% for the day.

Trade developments

Market focus was largely attuned to the latest progress in U.S.-China trade negotiations. The two countries had described their latest talks as “productive” and “constructive,” but stocks on Wall Street fell Friday after Beijing officials canceled a visit to U.S. farms in Montana, cutting their trip to the country short.
Washington and Beijing have slapped tariffs on billions of dollars’ worth of each other’s goods since the start of an intense trade dispute which began last year.
Back in Europe, Britain’s opposition Labour Party kicked off its annual party conference over the weekend. According to Reuters, the party is expected to decide between two Brexit policies on Monday — to campaign to remain in the EU in a second referendum or defer a decision on what position to take until after an election. The U.K. is slated to leave the EU on Oct. 31.
— Reuters contributed to this report.

Climate Change: Climate activists plan to block traffic in U.S. capital

Timothy Gardner



WASHINGTON (Reuters) - Activists seeking to pressure U.S. politicians to fight climate change aim to blockade major traffic hubs in the U.S. capital on Monday, drawing attention to a U.N. Climate Summit that will be attended by leaders from about 60 countries.
FILE PHOTO: Activists take part in a demonstration as part of the Global Climate Strike in Manhattan, September 20. REUTERS/Carlo Allegri
Those attending the New York summit will include the leaders of small island states most at risk from rising sea levels and companies expected to make fresh pledges to cut emissions of greenhouse gases.
“One thing we’ve learned is that shutting down a city is a very effective way to communicate the gravity of the climate crisis,” said Kaela Bamberger, a spokeswoman for Extinction Rebellion DC, one of the roughly two dozen groups participating.
The protest, called Shut Down DC, is also backed by the Metro D.C. chapter of the Democratic Socialists of America and Black Lives Matter D.C.
By late Sunday night, nearly 1,150 people had signed up for the protests on a dedicated web site, organisers said.
Activists will target four locations, including Farragut Square, in downtown Washington, Columbus Circle, near the Union Station train terminal, and Folger Park on Capitol Hill.
Actions at some sites would begin at 6:30 a.m. (1030 GMT), the groups said, without revealing the exact streets they plan to shut.
DC metropolitan police said they were equipped to handle a demonstration of any size.
Extinction Rebellion, which says it is backed by hundreds of scientists, promotes non-violent civil disobedience to press governments to cut carbon emissions and avert a climate crisis it fears will bring starvation and social collapse.
Over 11 days in April, the group disrupted parts of London, stopping trains and defacing the building of energy giant Shell.
Protesters aim to pressure U.S. government workers who are helping to make Washington an obstacle in international climate negotiations, Bamberger said.
President Donald Trump, who is not scheduled to attend the U.N. climate meet and intends to pull the United States out of the 2015 Paris accord, has rolled back Obama-era rules on emission cuts and wants to maximize U.S. energy output.
Monday’s protest also seeks to support the strikes of Greta Thunberg, a 16-year-old Swedish climate activist who traveled to New York in a sailboat and is participating in the U.N. summit.
Reporting by Timothy Gardner; Editing by Clarence Fernandez

DealBook Briefing: WeWork May Be Headed for Civil War

12-15 minutes Source: NYT



Image
CreditCreditEduardo Munoz/Reuters
Good Monday morning. (Was this email forwarded to you? Sign up here.)
Some directors and large investors in WeWork — including the company’s biggest backer, SoftBank — are discussing whether and how to oust its co-founder Adam Neumann as C.E.O., the NYT reports. But Mr. Neumann doesn’t want to go, setting up a potential boardroom battle for the ages.
The discussions arose after some big money managers refused to invest in WeWork unless the company brought in an experienced operator, according to the NYT. Their reluctance to take part in WeWork’s I.P.O. led the company to postpone the stock offering — even after reducing its valuation to as low as $15 billion, from $47 billion.
Having SoftBank on board for any insurrection is key. The Japanese tech giant has invested over $10.5 billion in WeWork. While SoftBank has tried to cultivate an image of supporting entrepreneurs, defending Mr. Neumann has become harder.
Ousting Mr. Neumann could be tricky, since he controls the company through a special class of shares. The WSJ notes that he could replace the entire board — though that would be a hugely risky move unlikely to ease investors’ concerns over the company’s stability.
Several investors have floated the idea of threatening Mr. Neumann with legal action, potentially over self-dealing, the NYT reports. Some have also expressed support for investigating his use of corporate money and whether he used drugs on the job.
Expect the drama to heat up quickly. The board, which is expected to meet as soon as this week, hasn’t yet formally approached Mr. Neumann about stepping down. Whether he bows to the pressure or prepares for a battle remains to be seen.
____________________________
Today’s DealBook Briefing was written by Andrew Ross Sorkin, Michael J. de la Merced, Lindsey Underwood and Stephen Grocer.
____________________________
Image
CreditHannah Mckay/Reuters
The European Court of Justice is scheduled to rule on two cases this week that could further expand the right of European citizens to ask a website to take down material considered old or inaccurate, Adam Satariano and Emma Bubola of the NYT write.
Google could be forced to scrub search results for users outside the E.U. for the first time. People could also have an easier time forcing Google and others to delete links to websites with certain personal information, such as health and religion.
The search engine has been the most frequent target of the policy. Since 2014, Google said, it has received more than 3.3 million requests in Europe to delete links from search results. The company has accepted about 45 percent of such requests.
Supporters say the right to be forgotten is an important online privacy tool. The concept has inspired similar legislation in jurisdictions like California, Brazil, Canada and India.
Others say that it has started to infringe on journalists’ work. A small Italian news site, for example, had to fold after a legal battle about its reporting of a stabbing. “There has been real mission creep with the right to be forgotten,” Daphne Keller, a lawyer at Stanford University’s Center for Internet and Society, told the NYT.
Image
CreditSeth Wenig/Associated Press
The vaping company has tried over the past year to clean up its image amid growing scrutiny about teenage use of its products. That has failed, badly, Jennifer Maloney and Stephanie Armour of the WSJ write.
• “The company flooded the White House with lobbyists and other advocates, making it appear that it was bypassing the F.D.A., which irked officials in the agency and some in the administration, according to people familiar with the discussions,” the WSJ reports.
• “Juul launched an anti-vaping program for schools despite warnings that the effort was reminiscent of one by major tobacco companies years ago that seemed aimed more at luring new smokers than dissuading them.”
• “And it made unauthorized claims to children and adults that its products were safer than cigarettes, the F.D.A. concluded, prompting a formal rebuke from the agency.”
• “ ‘I think Juul put the entire category at risk by pursuing top-line growth and market share without a real eye toward what was going on and who was using them,’ said Scott Gottlieb, who as federal Food and Drug Administration commissioner clashed with the start-up last year.”
More: Walmart announced Friday that it will no longer sell e-cigarettes.
As Beijing builds out enormous databases meant to control its 1.4 billion citizens — including a system known as “social credit” that grades compliance with Chinese laws and policies — it is putting pressure on companies, too, Alex Stevenson and Paul Mozur of the NYT write.
• “Social credit is one aspect of the Communist Party’s efforts under Xi Jinping, its top leader, to strengthen its hold over the country,” Ms. Stevenson and Mr. Mozur write. It’s being coupled with facial-recognition technology and other monitoring systems.
• For many companies, “social credit has become a fact of life. In September, China’s central economic planning agency announced that it had completed a first evaluation of 33 million businesses, giving them ratings from 1 for excellent to 4 for poor.”
• “It’s supposed to affect the decision making of businesses to conform to what the party wants,” Samantha Hoffman, a fellow at the Australian Strategic Policy Institute, told the NYT.
• The idea is to pressure businesses, many of which have openly flouted regulations for years. Such violations have led to “widespread pollution, rampant violations of labor laws and other problems.”
• China is also using the ratings to pressure foreign companies. American Airlines, Delta and United Airlines were told that their social credit score could be hit unless their websites labeled Hong Kong, Macau and Taiwan as part of China.
Image
CreditLindsey Wasson/Reuters
Indonesian investigators have reportedly concluded that problems in the design and oversight of the 737 Max played key roles in the crash of a Lion Air flight last year, the WSJ reports, citing unnamed sources.
It’s the first formal government finding of fault in two fatal crashes involving the 737 Max, the WSJ notes. Together, the incidents killed 346 people and forced a monthslong grounding of the Boeing jets.
The draft report comes as Boeing strives to get the 737 Max airborne again. Though the company continues to work on updates to the plane — including to automated pilot software suspected of playing a crucial role in the crashes — it appears that global airline regulators are unlikely to let the plane fly again before the end of the year.
And it comes amid increased scrutiny on the F.A.A. for how it oversaw the plane’s development. Both the National Transportation Safety Board and Congress have proposed changes to the agency’s airplane certification process.
The final report is due in November, the WSJ reports.
Image
CreditEnrique Calvo/Reuters
Thomas Cook, the world’s oldest travel firm, collapsed early this morning after last-minute negotiations to save the company failed. That left hundreds of thousands of customers stuck overseas.
The company ran hotels, resorts and airlines serving 19 million travelers a year, according to Reuters. But it has been hurt by online rivals, a big debt load and geopolitical tensions, and had sought to raise over 1 billion pounds, or about $1.25 billion, in emergency funding.
Negotiations failed over the weekend, however, leaving the company with “no choice but to take steps to enter into compulsory liquidation with immediate effect,” the board said.
The British government rejected a bailout request from the company, the FT reports. Prime Minister Boris Johnson confirmed that the company had requested £150 million, but added, “That’s a lot of taxpayers’ money and sets up a moral hazard.”
The collapse left 150,000 British travelers stranded abroad. The British government will work to bring them home in what it described as the largest repatriation in peacetime history. Another 350,000 travelers from outside Britain are also affected, according to the FT.
Humphrey Singer will step down as the C.F.O. of the embattled British retailer Marks and Spencer.
Deals
• Airbnb’s plans to go public reflect frustration among its 6,000 employees that they haven’t been able to cash in the stock they received as part of their compensation. (NYT)
• The hedge fund Elliott Management is reportedly planning to raise $5 billion in new funding to help it invest if the economy enters a downturn. (FT)
• Walt Disney’s C.E.O., Bob Iger, said he withdrew from a deal to buy Twitter at the last minute because the “nastiness” on the social network was “extraordinary.” (NYT)
• The I.P.O. of SmileDirectClub, a maker of teeth-straightening products, performed so badly that its C.E.O. was said to have called Jamie Dimon of JPMorgan Chase, the offering’s lead underwriter, to ask what went wrong. (Business Insider)
• Fitbit is reportedly considering selling itself. (Reuters)
Politics and policy
• The Iranian foreign minister said that President Trump had “closed the door” to talks between Tehran and Washington to resolve a crisis over attacks on Saudi oil facilities. But Mr. Trump is unlikely to get other allies to put additional pressure on Iran. (FT, WSJ)
• Democratic lawmakers are increasingly calling to begin impeachment proceedings against Mr. Trump after he confirmed discussing corruption accusations against Joe Biden with Ukraine’s leader. (NYT)
• Democratic presidential candidates like Senator Elizabeth Warren and Mr. Biden are campaigning with striking U.A.W. workers, hoping to lock up support from organized labor groups. (NYT)
• Senator Bernie Sanders has called for eliminating $81 billion of Americans’ medical debt. (NYT)
• Mr. Trump held an unusual rally with Prime Minister Narendra Modi of India, hoping to build support for his re-election campaign among Indian-Americans. (NYT)
Brexit
• British trade groups reportedly fear retribution from Prime Minister Boris Johnson if they raise warnings about the consequences of a no-deal Brexit. (FT)
• Fissures have opened up within the opposition Labour Party over whether it should openly support Britain remaining in the E.U. (BBC)
Trade
• Washington and Beijing say that trade discussions remain “productive,” even as tensions remain high. (NYT)
• Speaking of which: The U.S. Justice Department warned that Chinese theft of American trade secrets was growing. (CNBC)
• A Minnesota auto parts maker has filed more than 10,000 appeals against U.S. tariffs on Chinese imports. (WSJ)
Tech
• Uber sued the New York City Taxi and Limousine Commission over new limits on the number of ride-hailing vehicles allowed on city streets. (Bloomberg)
• The owner of the New York Stock Exchange has opened a Bitcoin exchange. (WSJ)
• The House Judiciary Committee reportedly asked more than 80 companies to explain how they had been harmed by Amazon, Apple, Facebook and Google. (NYT)
• Facebook said it suspended “tens of thousands” of apps after the Cambridge Analytics scandal, a far bigger number than it had previously reported. (NYT)
• “Across Silicon Valley, anxious tech workers are finally admitting they have a problem. And they are going to therapy.” (NYT)
Best of the rest
• Credit Suisse reportedly hired detectives to follow a former star banker after he left for its rival UBS. (Bloomberg)
• The S.E.C. brought 50 percent more Ponzi scheme prosecutions in the decade after Bernie Madoff’s arrest than in the 10 years before. (NYT)
• Is the Impossible Whopper actually better for you and for the environment than a regular one? (NYT)
• A high-profile scientific project at the M.I.T. Media Lab, the Open Agricultural Initiative, is under scrutiny after researchers who worked on the project said it had been promoted with misleading claims. (NYT)
• Errors and controversies involving several high-profile books are forcing writers and publishers to reconsider how they handle fact-checking. (NYT)

Market Insider | Biggest Moves Premarket: Stocks making the biggest moves premarket: Viacom, Facebook, Caesars, Tesla, GM, Fitbit & more

Peter Schacknow





Check out the companies making headlines before the bell:
Viacom – Viacom bought the exclusive cable TV rights to the hit sitcom “Seinfeld” from Sony Pictures Entertainment, beginning in October 2021. Netflix had recently acquired the global streaming rights to “Seinfeld.”
Facebook – Facebook competitors like Snap have been talking to the Federal Trade Commission about the company’s hardball tactics, according to The Wall Street Journal. The paper said those discussions are part of a broader antitrust investigation into Facebook’s business practices.
Caesars Entertainment – Caesars announced the sale of its Rio hotel and casino in Las Vegas to an affiliate of Imperial Cos. for $516.3 million. Caesars will continue to operate the property for a minimum of two years.
Tesla – Tesla’s board of directors must face a shareholder lawsuit over CEO Elon Musk’s pay package. The automaker had asked a judge to dismiss the suit, but that request was rejected.
Exact Sciences – The drugmaker won Food and Drug Administration approval for use of its at-home colon cancer screening test Cologuard for patients aged 45-49. It had previously only been approved for patients at least 50 years old.
Mallinckrodt – Mallinckrodt said its burn treatment StrataGraft met its goals in a phase 3 study.
Lululemon – Piper Jaffray initiated coverage of the apparel maker with an “overweight” rating and a $227 per share price target, predicting market share gains for the company in a category experiencing strong secular growth.
General Motors – GM and United Auto Workers union representatives met over the weekend for talks on a new contract, but a strike by union members heads into its 8th day today.
NVR – NVR will join the S&P 500 prior to the open on Thursday. The home builder’s stock replaces Jefferies Financial Group in the benchmark index.
Con Edison – Con Edison was upgraded to “overweight” from “sector weight” at KeyBanc, which cites a number of factors including relative valuation. The utility’s stock has already gained nearly 21% this year.
Sanofi – Sanofi was upgraded to “overweight” from “equal-weight” at Morgan Stanley, which points to optimism surrounding the French drugmaker’s new CEO, Paul Hudson.
Fitbit – Fitbit shares remain on watch, following a rise Friday on reports that the maker of wearable fitness devices has hired an investment firm to explore a possible sale.
Chewy – The pet products retailer was upgraded to “buy” from “neutral” at Nomura Instinet, saying worries about company profit margins are overblown, and that Chewy’s fulfillment network is not easily replicated.
PG&E – The utility formally executed the $11 billion agreement announced last week that resolved insurance subrogation claims related to California wildfires in 2017 and 2018.
Kimberly-Clark – Barclays upgraded the consumer products maker’s stock to “overweight” from “equal weight,” based on a widening of the stock’s relative discount to that of its peers. Barclays feels that discount does not reflect Kimberly-Clark’s prospective relative operating performance compared to its competitors over the next 12 to 18 months.

U.S.Market I Futures Indicator: US futures point to slightly lower open

Silvia Amaro



U.S. stock index futures were slightly lower Monday morning.
At around 0:36 a.m. ET, Dow futures fell 47 points, indicating a negative open of more than 80 points. Futures on the S&P and Nasdaq were both higher.
The moves in pre-market trade come after Chinese officials cut short their trip to the United States, where they held discussions on trade. China described the talks as “constructive” and both sides said they would remain in contact. President Donald Trump had said China would increase its purchases of U.S. agricultural products as part of a bilateral trade deal. The cancellation may be seen by some investors as a sign the two countries are no closer to reaching a trade deal.
As a result, Wall Street ended Friday mostly lower.
Meanwhile, the U.S. Department of Justice has warned companies against Chinese theft. Speaking to CNBC Monday, the U.S. Deputy Assistant Attorney General, Adam Hickey, said: “More cases are being opened that implicate trade secret theft.
On the data front, there will be manufacturing and services PMIs at 09:45 a.m. ET.
In the corporate world, there are no significant earnings releases. However, there’s a strong focus on WeWork after Softbank is reportedly in favor of ousting CEO Adam Neumann.

Asia | Asia Markets Closing Report: Asia shares mostly down as investors watch US-China trade developments

Eustance Huang



Shares in Asia were mostly lower on Monday as investors watched for developments on the U.S.-China trade front
Mainland Chinese shares declined on the day, with the Shanghai composite falling 0.98% to about 2,977.08 and the Shenzhen composite down 0.912% to approximately 1,660.06.
Hong Kong’s Hang Seng index shed 0.57%, as of its final hour of trading. Shares of companies related to China’s Fosun saw declines, following the collapse of the world’s oldest travel firm Thomas Cook — the Chinese conglomerate is the largest shareholder in the British firm. Fosun Tourism dropped 4.36% and Fosun International declined 1.34%.
South Korea’s Kospi finished largely flat at 2,091.70, while the S&P/ASX 200 in Australia closed 0.28% higher at 6,749.70.
Over in India, shares bucked the overall downward trend regionally as the Nifty 50 and S&P BSE Sensex both jumped more than 3% each, adding to large gains seen last Friday after a surprise tax cut was announced.
Overall, the MSCI Asia ex-Japan index shed 0.15%.
Markets in Japan were closed on Monday for a holiday.

Asia-Pacific Market Indexes Chart

TICKER COMPANY NAME PRICE CHANGE %CHANGE
NIKKEINikkei 225 IndexNIKKEI22079.0934.640.16
HSIHang Seng IndexHSI26222.40-213.27-0.81
ASX 200S&P/ASX 200ASX 2006749.7018.900.28
SHANGHAIShanghaiSHANGHAI2977.08-29.37-0.98
KOSPIKOSPI IndexKOSPI2091.700.180.01
CNBC 100CNBC 100 ASIA IDXCNBC 1008032.14-6.06-0.08

US-China trade

On the trade front, China’s Ministry of Commerce said over the weekend that economic and trade teams from the two economic powerhouses held “constructive” discussions in Washington late last week. They added that both the U.S. and China agreed to maintain in contact.
Shares stateside had slipped last Friday after the Chinese delegation canceled a visit to U.S. farms in Montana and Beijing officials headed back to China earlier than planned, dampening expectations of a trade deal being reached.
“The starting point is they’re not on the same page, the collateral damage is going to be far more pernicious because even if China is implicated it’s not just China that’s implicated,” Vishnu Varathan, head of economics and strategy at Mizuho Bank, told CNBC’s “Squawk Box” on Monday. “I don’t think anyone is winning the trade war.”

Oil prices jump

Oil prices jumped in the afternoon of Asian trading hours, with international benchmark Brent crude futures gaining 0.84% to $64.82 per barrel and U.S. crude futures jumping 0.96% to $58.65 per barrel.
Shares of oil companies regionally, however, were mixed. Australia’s Beach Energy jumped 1.95% and Santos gained 0.64%, while South Korea’s S-Oil rose 0.49%. Hong Kong-listed shares of China’s CNOOC, on the other hand, slipped 0.95% as of their final hour of trading.
The moves in crude prices came after reports surrounding Saudi Arabian state oil firm Aramco, which recently saw attacks at major facilities. The Wall Street Journal reported Sunday that repairs at Aramco could take months longer than the firm expects, citing Saudi officials and contractors.
That came following a Nikkei Asian Review report that Aramco told Japanese refiner JXTG about a potential change in shipments, raising questions over the kingdom’s ability to supply crude.

Currencies

The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 98.536 after seeing an earlier low of 98.446.
The Japanese yen traded at 107.74 against the dollar after seeing lows above 108.3 in the previous trading week. The Australian dollar changed hands at $0.6772 after declining from levels above $0.685 last week.
— CNBC’s Fred Imbert contributed to this report.