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Showing posts with label CNBC News.. Show all posts
Showing posts with label CNBC News.. Show all posts

Oct 15, 2018

Bank of America earnings Q3 2018 I CNBC News


Hugh Son


Bank of America beat analysts' estimate for third-quarter profit and revenue as the firm set aside less than expected for loan losses.
The bank posted 66 cents per share in earnings on Monday, a 43 percent increase, compared to the 62 cent estimate of analysts surveyed by Refinitiv. The firm's revenue rose by a more modest 4 percent, to $22.8 billion, compared to the $22.67 billion estimate.
The bank's provision for credit losses decreased by $118 million to $716 million, well below the $964.2 million estimate. Meanwhile, the bank managed to cut expenses 2 percent to $13.1 billion, matching analysts' expectations.
Chief Executive Officer Brian Moynihan, 59, has focused on cutting costs while looking for profit opportunities that fit his "responsible growth" mantra. Increasingly, that means avoiding what management deems unnecessary risks. His bank was the first major wirehouse to ban the purchase of penny stocks at its Merrill Lynch brokerage, CNBC reported last month. The firm's investment banking head, Christian Meissner, reportedly left recently after clashing with Moynihan over the division's resources.
"Responsible growth, backed by a solid U.S. economy and a healthy U.S. consumer, combined to deliver the highest quarterly pre-tax earnings in our company's history," Moynihan said in the earnings release. It was the 15th straight quarter the firm was able to improve operating leverage, he said.
Despite the risk management, Bank of America's shares have fallen along with its peers in the last month. A recent surge in U.S. interest rates has investors concerned that banks will be forced to pay depositors more for holding their money, compressing profit margins. Shareholders have also been scrutinizing loan growth for signs that it is slowing, which would cap interest income, one of the main ways lenders make money.
The lender's shares have fallen 6 percent in the last month, compared to the 6.2 percent decline of the KBW Bank Index.
This story is developing. Please check back for updates.

Sep 28, 2018

Facebook discovered 'security issue' affecting 50 million accounts I CNBC News


Michelle Castillo


Facebook discovered a security issue that allowed hackers to access information that could have let them take over around 50 million accounts, the company announced Friday.
"This is a very serious security issue, and we're taking it very seriously," said CEO Mark Zuckerberg on a call with reporters.
Facebook shares, which were already down about 1.5 percent before the announcement, extended losses after the disclosure and ended down 2.6 percent.
The company said in a blog post that its engineering team found on Tuesday that attackers identified a weakness in Facebook's code regarding its "View As" feature. Facebook became aware of a potential attack after it noticed a spike in user activity on Sept. 16.
"View As" lets users see what their profile looks like to other users on the platform. This vulnerability, which consisted of three separate bugs, also allowed the hackers to get access tokens — digital keys which let people stay logged into the service without having to re-enter their password — which could be used to control other people's accounts.
Almost 50 million accounts had their access tokens taken, and Facebook has reset those tokens. The company also reset tokens for an additional 40 million accounts who used the "View As" feature in the last year as a precautionary measure, for a total of 90 million accounts. Facebook had 2.23 billion monthly active users as of June 30.
The reset will require these users to re-enter their password when they return to Facebook or access an app that uses Facebook Login. They will also receive a notification at the top of their News Feed explaining what happened.
In addition, the company suspended the "View As" feature while it reviews its security. Facebook said it fixed the issue on Thursday night and has notified law enforcement including the FBI and the Irish Data Protection Commission in order to any address General Data Protection Regulation (GDPR) issues.
Facebook said it has just begun its investigation and has not determined if any information was misused, but the initial investigation has not uncovered any information abuse. The hackers did query Facebook's API system, which lets applications communicate with the platform, to get more user information. The company is not sure if the hackers used that data, nor does it know who orchestrated the hack or where the person or people are based.
The company said there is no need to change passwords. If additional accounts are affected, Facebook said it will immediately reset those users' access tokens. Facebook is doubling the number of employees who are working to improve security from 10,000 to 20,000, the company reiterated.
"Security is an arms race, and we're continuing to improve our defenses," Zuckerberg said. "This just underscores there are constant attacks from people who are trying to underscore accounts in our community."
Zuckerberg addressed the issue in a Facebook post on his account. Read it below:

Sep 21, 2018

Pound plummets as UK prime minister stands firm on Brexit: CNBC News


David Reid


British Prime Minister Theresa May said Friday that the European Union and the United Kingdom are at an "impasse" in talks over Brexit.
The U.K. leader reiterated that she will not overturn the result of the 2016 referendum and "nor will I break up my country."
Speaking from inside Number 10 Downing Street, May repeated that the options on offer from the EU were unacceptable and would "make a mockery of the referendum we had two years ago."
May also called on the EU to provide more detail on its negotiating position.
"Yesterday, (European Council President) Donald Tusk said our proposals would undermine the single market. He didn't explain how in any detail or make any counter-proposal. So we are at an impasse."
In an apparent jab at the tone of other European leaders during negotiations, May added that healthy future relations were at risk.
"Throughout this process, I have treated the EU with nothing but respect. The U.K. expects the same. A good relationship at the end of this process depends on it," she said.
Sterling had fallen almost 1 percent in trading Friday prior to the speech, and was down to 1.3 percent at the end of May's statement.
Her comments came a day after European Union leaders rejected her plans during a summit in Austria.
After a dinner in Salzburg, the EU leaders said would continue to press for a Brexit deal next month but rejected May's proposal to seek a free trade area for goods with the EU.
EU leaders further cautioned May that talks could collapse if she didn't give leeway on the issues of Northern Ireland's border and trade.
After those warnings, May faced reporters Thursday evening and repeated that Britain was prepared to walk away from the EU without a deal. She further dismissed any suggestion that if the U.K. parliament was to reject her plan for leaving the EU, there could be a second referendum.
"There will be no second referendum," she said.
Under May's "Chequers plan," a U.K.-EU free trade area would be created with a "common rulebook" for industrial and agricultural goods. Britain's rule book on the goods would "harmonize" with that of the European Union.
It also calls for a "facilitated customs arrangement" to allow the smooth movement of goods between the U.K. and EU countries after Brexit.
Britain is due to leave the EU on March 29, 2019 and will then have 21 months to make the transition to full withdrawal at the end of 2020.

Sep 9, 2018

CBS close to cutting ties with Moonves, end fight with NAI I CNBC News.


David Faber


Les Moonves, president and chief executive officer of CBS Corp.
Adam Jeffery | CNBC
Les Moonves, president and chief executive officer of CBS Corp.
CBS' board of directors is near completion of a settlement that would both end its litigation with its controlling shareholder National Amusements — and sever ties with long time CEO Leslie Moonves, according to people familiar with the situation.
The talks are described as fluid, but the parties hope to complete a settlement prior to the start of trading on Monday morning. The settlement talks are reaching their conclusion as new charges of sexual harassment against Moonves were detailed in a New Yorker article released Sunday morning.
Last week CNBC reported that Moonves had been negotiating an exit from CBS that would entitle him to roughly $100 million in severance. Sources now indicate that Moonves would exit the company without any additional compensation, pending the results of an investigation into charges of sexual misconduct detailed in two separate New Yorker articles, as well as any other findings of the investigators employed by CBS's board.
In a statement released to CNBC, CBS said it took the allegations against Moonves "very seriously. Our Board of Directors is conducting a thorough investigation of these matters, which is ongoing."
As CNBC previously reported, current COO of CBS Joe Ianniello is expected to take over as CEO on an interim basis. The settlement with CBS controlling shareholder National Amusements would end the litigation between the two parties, result in an expanded and refreshed board of directors at CBS, and prevent NAI from initiating a combination with Viacom for a period of 18 months.
It would not abridge NAI's rights to vote its control position on any other transaction undertaken by CBS, sources said. While in all negotiations of such complexity there is a possibility they will not reach fruition, the parties were focused on reaching an agreement prior to end of day Sunday.
Correction: The correct spelling of the name of CBS's COO is Joe Ianniello.

Aug 10, 2018

Before The Bell I Political concerns keep investors on edge I CNBC News


Alexandra Gibbs






U.S. stock index futures fell deep into the red ahead of Friday's open, following negative sentiment in markets overseas.
Around 5:35 a.m. ET, Dow futures dropped 93 points, indicating a negative open of -93.23 points, with the S&P 500 and Nasdaq futures also pointing to a downbeat start to the day.
Traders and financial professionals work ahead of the closing bell on the floor of the New York Stock Exchange (NYSE), June 25, 2018 in New York City.  Drew Angerer | Getty Images
Traders and financial professionals work ahead of the closing bell on the floor of the New York Stock Exchange (NYSE), June 25, 2018 in New York City. 
During yesterday's trade, the Nasdaq Composite scored its longest winning streak in close to a year, boosted by positive trade out of tech stocks including Amazon and Apple.
On Friday, however, red is striking markets across the board, as political woes and trade fears send jitters across global markets.
In politics, the U.S. remains embroiled in a trade dispute with China and on Wednesday announced that it planned to inflict sanctions on Russia over its alleged chemical poisoning of an ex-spy in England earlier this year.
Russia's Prime Minister Dmitry Medvedev warned the States on Friday that enacting these sanctions could be treated as a declaration of economic war, according to Reuters. Consequently, investors have been keeping a close eye on the Russian ruble.
Likewise, investors continue to monitor trade tensions between Washington and Beijing. This week both governments announced the possibility of imposing tit-for-tat tariffs on an additional $16 billion worth of goods.
In economic data, consumer price index (CPI) figures are due out at 8:30 a.m. ET, followed by the Monthly Treasury Statement at 2 p.m. ET.
No earnings are scheduled to come out Friday.

Jul 17, 2018

David Solomon to become next CEO I CNBC

cnbc.com

David Solomon to become next CEO

Hugh Son


David Solomon, Goldman Sachs & Co. Andrew Harrer | Bloomberg | Getty Images
David Solomon, Goldman Sachs & Co.
Goldman Sachs finally made it official: David Solomon, an investment banker who rose through the ranks while finding time to pursue a hobby as an electronic dance music disc jockey, will be the next leader of the 149-year old investment bank.
Solomon, 56, will now have time to put his stamp on his organization after officially being named as the incoming CEO. He will take on the CEO role on Oct. 1 and Blankfein will remain chairman until the end of the year.
The announcement marks the end of an era. Under Lloyd Blankfein's 12-year tenure, Goldman successfully navigated the financial crisis, making lucrative bets that the U.S. housing market would collapse. It stumbled in the public eye after being labeled a "Vampire Squid" by Rolling Stone magazine, but the true test for management came later, as the firm's vaunted trading businesses struggled under placid markets and heightened post-crisis regulation. That brought critiques from investors and analysts that the bank was slow to adjust to the new realities.
In response, Goldman unveiled a $5 billion revenue-boosting plan in September, disclosing a plan to broaden its client base, find growth in smaller markets and push into consumer retail products. The consumer business offers savings accounts and loans, but could ultimately spread to credit cards, mortgages, car loans and life and health insurance through its Marcus brand, according to a May presentation from the bank.
Solomon worked at Drexel Burnham Lambert and Bear Stearns before joining Goldman as a partner in 1999. His ascent has been expected since he was named sole president of the bank in March, edging out his former co-President Harvey Schwartz. But the timing of the announcement is coming sooner than first thought. Many had expected it wouldn't come until the fall.
The incoming CEO will have to focus on the firm's historic strengths in trading and advisory while also building out the firm's nascent businesses. Goldman's shares have lagged rivals this year, declining 9.2 percent.
Solomon, who is an electronic dance music disc jockey in his spare time under the name DJ D-Sol, has said employee diversity is a priority at Goldman and has cited his unusual hobby as an ice breaker in conversations with junior bankers.

Separately, Goldman Sachs was scheduled to report second-quarter earnings before the opening bell on Tuesday.

Johnson and Johnson earnings q2 2018 I CNBC

cnbc.com

Johnson and Johnson earnings q2 2018

Angelica LaVito

Emile Wamsteker | Bloomberg | Getty Images
Johnson & Johnson shares dipped Tuesday as investors digested the company's second-quarter earnings results.
The sprawling health company beat revenue and adjusted earnings estimates for the quarter and narrowed its full-year forecast. J&J's pharmaceutical business and medical device segments topped expectations, while and its consumer unit fell short.
“It feels like consumer and (medical technology) are still in turnaround mode a bit,” said Jefferies analyst Jared Holz. “The analyst day they recently had, the key component was to get the focus on the longer term growth dynamics of those businesses versus the near term. I think that’s sort of what you’re seeing here.”
The company posted adjusted earnings of $2.10 per share, compared with the $2.07 Wall Street analysts polled by Thomson Reuters expected. Revenue hit $20.8 billion, up 10.6 percent from the previous year, surpassing estimates of $20.39 billion.
Here's how the company did compared with what Wall Street analysts polled by Thomson Reuters expected:
  • Adjusted earnings: $2.10 vs. $2.07 per share
  • Revenue: $20.8 billion vs. $20.39 billion
J&J reported net income of $4 billion, or $1.45 per share, in the second quarter. After stripping out amortization expenses and special items, the company earned $5.7 billion, or $2.10 per share, topping analyst estimates of $2.07 per share.
In the quarter, J&J's revenue increased 10.6 percent o $20.8 billion from $18.84 billion a year earlier. On an operational basis, J&J's revenue grew 8.7 percent. Excluding the impact of acquisitions, divestitures and currency, worldwide sales were up 6.3 percent.
J&J refined its full-year revenue forecast to between $80.5 billion and $81.3 billion, from a previously given $81 billion and $81.8 billion. It tweaked its full-year adjusted earnings forecast to between $8.07 and $8.17 per share from $8 and $8.20 per share.
Pharmaceuticals, particularly cancer drugs, have fueled J&J’s success. In the quarter, the business posted $10.4 billion in revenue, a 20 percent year-over-year increase that topped expectations of $9.95 billion, according to consensus estimates from StreetAccount. Excluding the net impact of acquisitions and divestitures, worldwide sales increased 17.6 percent.
J&J's medical device unit increased 3.7 percent on an operational basis from last year, reaching $7 billion and topping Street estimates of $6.90 billion. Excluding the net impact of acquisitions and divestitures, worldwide sales increased 1.9 percent.
The company has continued pruning its medical device business, including selling its LifeScan diabetes unit to private-equity firm Platinum Equity for $2.1 billion. It received a binding offer last month from Fortive Corp. for its Advanced Sterilization Products business for $2.8 billion.
Consumer continued to lag. In the quarter, it generated $3.50 billion in revenue up 0.7 percent from the year-ago quarter and short of the $3.59 billion analysts had expected. Excluding the net impact of acquisitions and divestitures, worldwide sales increased 0.4 percent.
In May, the company unveiled its revamped baby care product line, which it plans to roll out to stores in August.
A Missouri jury last week ordered J&J to pay $4.69 billion to 22 women who claim the company's talc-based products, including its baby powder, contained asbestos and allegedly caused them to develop ovarian cancer. J&J has vowed to fight the verdict.
Shares of J&J slid 0.5 percent Tuesday in premarket trading. They have shed nearly 11 percent this year.

Jul 16, 2018

Netflix Q2 2018 earnings I CNBC News

According to CNBC: Netflix falls more than 9%

cnbc.com

Netflix Q2 2018 earnings

Michelle Castillo


Netflix CEO Reed Hastings Ethan Miller | Getty Images
Netflix CEO Reed Hastings
Netflix missed its subscriber addition projections for the first time in five quarters, leading shares to tumble more than 13 percent.
The company reported second-quarter earnings after the market closed on Monday. Despite beating estimates on revenue, Netflix posted a huge miss on subscriber additions. The company only added 5.15 million subscribers, about one million less than forecast. Domestic additions were only a little more than half than projected, while it just added 4.5 million subscribers internationally.
Netflix reported:
  • Revenue: $3.91 billion vs. $3.94 billion estimated, according to a Thomson Reuters consensus estimate.
  • Domestic subscriber additions: 670,000 vs. 1.23 million subscribers estimated, per FactSet and Street Account
  • International subscriber additions: 4.5 million subscribers vs. 5.11 million subscribers estimated, per FactSet and Street Account
  • Earnings per share (EPS): 85 cents (including $85 million in non-cash unrealized gain)
Some analysts were worried the company could not sustain its share price growth, which is over 100 percent year-to-date. They also raised concerns as competitors like Amazon ramp up their streaming efforts, while others like Disney and AT&T are prepared to invest in more digital content. Netflix is expected to spend up to $8 billion this year on 700 original series.
Netflix also issued a weaker guidance for the third quarter than expected, saying it is expecting to add 5 million subscribers total compared to an analyst estimate of more than 6 million. It is projecting 650,000 new subscribers in the U.S. and 4.35 million internationally.
This is breaking news. Please check back for updates.

Jul 13, 2018

Citigroup earnings Q2 2018 I CNBC News.

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Citigroup earnings Q2 2018

Fred Imbert


A Citibank branch in Hong Kong. Vincent Isore | IP3 | Getty Images
A Citibank branch in Hong Kong.
Citigroup reported on Friday second-quarter earnings that beat expectations, while revenue for the period came in slightly below estimates.
Here is what Wall Street is expecting from the global banking giant:
  • Earnings: $1.63 per share vs $1.56 forecast by Thomson Reuters
  • Revenue: $18.469 billion vs $18.512 billion expected by Reuters
The company said its earnings per share grew by 27 percent on a year-over-year basis as net income rose 16 percent to $4.49 billion and as its shares outstanding decreased by 8 percent. Revenue grew by 2 percent, as lower revenue in corporate offset growth in institutional clients group and global consumer banking segments, Citigroup said.
Shares of Citigroup were down more than 8 percent for the year heading into Friday’s report, lagging peers such as Bank of America and J.P. Morgan Chase. Bank of America and J.P. Morgan were down more than 2 percent and 0.8 percent, respectively.
Citigroup announced in late June that it would hike its quarterly dividend by 13 cents to 45 cents a share, and buy back $17.6 billion in stock over the next 12 months after passing the Federal Reserve’s annual stress test.
The bank reported better-than-expected earnings and revenue for the first quarter in April. Its results from that time period got a boost from lower corporate taxes and strong trading revenue.
Earlier Friday, J.P. Morgan kicked off earnings season when it reported its second-quarter results.

Jul 11, 2018

Trump attacks Germany at NATO summit: Says it's 'totally controlled by Russia' I CNBC

cnbc.com

Trump attacks Germany at NATO summit: Says it's 'totally controlled by Russia'

Sam Meredith, Natasha Turak


Donald Trump, President of the United States, speaks at NATO's summit meeting with NATO Secretary General Stoltenberg at the Brussels residence of the American ambassador. Bernd von Jutrczenka | picture alliance | Getty Images
Donald Trump, President of the United States, speaks at NATO's summit meeting with NATO Secretary General Stoltenberg at the Brussels residence of the American ambassador.
President Donald Trump launched a scathing attack on German support for one of Europe's most contentious energy developments Wednesday, saying Germany is “totally controlled” by Russia.
Speaking in Brussels, Belgium on the first leg of his European trip, the U.S. president said a flurry of oil and gas deals had given Moscow far too much influence over the continent’s largest economy. In particular, he singled out the Nord Stream 2 gas pipeline project as being especially "inappropriate."
“Germany is totally controlled by Russia … They will be getting between 60 and 70 percent of their energy from Russia and a new pipeline, and you tell me if that is appropriate because I think it's not,” Trump said, before criticizing Berlin's failure to significantly increase defense spending.
Trump was speaking at a press conference Wednesday morning in front of NATO representatives ahead of a two-day summit.
“I think it is a very bad thing for NATO and I don’t think it should have happened and I think we have to talk to Germany about it. On top of that, Germany is just paying a little bit over 1 percent (on defense) … And I think that is inappropriate also,” he added.
The Nord Stream 2 gas pipeline is an $11 billion project directly connecting Germany with Russia. Critics argue that the pipeline — which is to be laid under the Baltic Sea — will increase Europe's dependence on Russian gas. A number of other EU states have also flagged national security concerns.
Nonetheless, German Chancellor Angela Merkel has previously expressed support for the project and insisted it is a private commercial venture.
Trump is scheduled to meet Merkel later on Wednesday, before sitting down with Russian President Vladimir Putin in Helsinki, Finland on Monday.

'An attack on Germany and Russia'

Trump has long criticized Berlin and other NATO allies for “freeriding” on Washington’s defense capabilities. Currently only five of NATO’s 29 member states actually allocate the 2 percent of their gross domestic product (GDP) to military spending that they are formally committed to as part of the alliance. Those five are the U.S., the U.K., Greece, Estonia and Poland.
In May, Germany pledged to increase its defense spending to 1.5 percent of GDP by 2025, up from a low of 1.1 percent in 2015.
The Trump administration’s policies indicate it views security and trade as intimately linked. And when it comes to the trade balance, no ally will be spared.
The U.S. president frequently laments Germany’s trade surplus with the U.S., and has threatened to slap tariffs on German cars, which would strike at the heart of the country’s export-led economy. Trump has already enacted sweeping steel and aluminum tariffs on all exporters to the U.S., including the EU, which had been temporarily exempt.
For Michael Browne, a fund manager at London-based investment firm Martin Currie, Trump's comments would do little to deescalate trade tensions.
“That was an attack on Germany and an attack on Russia,” Browne told CNBC’s "Squawk Box Europe" moments after the president’s comments on Wednesday morning.
“What Trump is saying is ‘I can’t control Russia, unless I can control Germany pumping money into Russia.’ That says to me that the attitude of Trump’s administration in terms of tariffs towards Germany, which means autos, is going to be really tough.”

Jul 6, 2018

China hits back with tariffs, accusing US of launching the 'largest trade war in history I CNBC

cnbc.com

China hits back with tariffs, accusing US of launching the 'largest trade war in history'

Sam Meredith


Xi Jinping delivers a report to the 19th National Congress of the Communist Party of China (CPC) on behalf of the 18th Central Committee of the CPC at the Great Hall of the People in Beijing, capital of China, Oct. 18, 2017. Xinhua | Ju Peng | Getty Images
Xi Jinping delivers a report to the 19th National Congress of the Communist Party of China (CPC) on behalf of the 18th Central Committee of the CPC at the Great Hall of the People in Beijing, capital of China, Oct. 18, 2017.
China implemented retaliatory tariffs on some imports from the U.S. on Friday, immediately after new U.S. duties had taken effect.
The move signals the start of a full-blown trade war between the world’s two largest economies, after President Donald Trump’s administration had initially made good on threats to impose steep tariffs on Chinese goods.
At midnight Washington time, the U.S. imposed new tariffs on $34 billion of annual imports from China. That prompted Beijing to respond in kind with levy tariffs on U.S. imports, China's foreign ministry said Friday, though it did not provide any immediate detail on the implementation or scale of these charges.
Chinese state news agency Xinhua reported the country's tariff rate on U.S. goods, at 25 percent, was equal to Washington's rate on Chinese imports.
A spokesperson at China’s Ministry of Commerce said Friday that while the Asian giant had refused to "fire the first shot," it was being forced to respond after the U.S. had "launched the largest trade war in economic history."
“This act is typical trade bullying,” the spokesperson said, before adding: “It seriously jeopardizes the global industrial chain … Hinders the pace of global economic recovery, triggers global market turmoil and will affect more innocent multinational companies, general companies and consumers.”
China's Ministry of Commerce also said it would look to report the U.S. to the World Trade Organization (WTO) on Friday, accusing Washington of breaching international trade laws.

Market confusion

China's soymeal futures plunged over 2 percent during Friday afternoon trade in Asia before recovering most of its losses, amid market confusion over whether Beijing had actually implemented tariffs on soybeans and other U.S. goods.
The China Daily, the country's state-run English language newspaper, initially reported China had taken countermeasures against the U.S. on Friday, before rescinding its story without an explanation.
Meanwhile, the absence of an official statement specifically clarifying China's response to U.S. tariffs also did little to alleviate a sense of ambiguity among market participants.
The prospect of a tit-for-tat trade war is widely expected to make soymeal more expensive, supporting soymeal futures, particularly over the coming months when the U.S. is projected to become China's primary soybean supplier.

How did we get here?

The Trump administration initiated the dispute in April, announcing the tariffs and accusing China of using "unfair" tactics to build a large trade surplus with the U.S. and expropriating American technology.
The White House has also pressed Congress to tighten rules on Chinese investment in U.S. technology.
Nonetheless, despite the urging of business groups and lawmakers to negotiate a truce, there was little sign Friday that the two sides would reach a compromise anytime soon.
Beijing and Washington have held several rounds of high-level talks since early May, but the Trump administration has since said it is considering expanding the list of targeted Chinese imports. Trump said Thursday that another $16 billion of tariffs are expected to go into effect in two weeks, before ratcheting up the stakes to warn that measures totaling $500 billion in Chinese goods could soon come into force.
External observers have widely criticized this approach, saying such protectionist rhetoric undermines free trade policies that have shaped the global exchange of goods in recent decades.
CNBC's John W. Schoen contributed to this report.

Jun 29, 2018

Deutsche Bank fails Fed stress test while 3 US lenders stumble I CNBC News

cnbc.com

Deutsche Bank fails Fed stress test while 3 US lenders stumble

CNBC


Deutsche Bank AG's U.S. subsidiary failed on Thursday the second part of the U.S. Federal Reserve's annual stress tests due to "widespread and critical deficiencies" in the bank's capital planning controls.
The Fed board's unanimous objection to Deutsche Bank's U.S. capital plan marks another blow for the German lender, sending its shares down 1 percent after hours. Its financial health globally has been under intense scrutiny after S&P cut its rating and questioned its plan to return to profitability.
The Fed also placed conditions on three banks that passed the test. Goldman Sachs Group and Morgan Stanley cannot increase their capital distributions and State Street Corp must improve its counterparty risk management and analysis, the Fed said.
Deutsche Bank last week easily cleared the Fed's easier first hurdle that measures its capital levels against a severe recession, the strictest ever run by the Fed.
Thursday's second test focuses on how the bank's plan for that capital, such as dividend payouts and investments, stands up against the harsh scenarios.
"Concerns include material weaknesses in the firm's data capabilities and controls supporting its capital planning process, as well as weaknesses in its approaches and assumptions used to forecast revenues and losses under stress," the Fed said in a statement.
While failing the U.S. stress test would not likely affect the bank's ability to pay dividends to shareholders, it will require Deutsche Bank to make substantial investment in technology, operations, risk management and personnel, as well as changes to its governance.
It also means the bank would not be able to make any distributions to its German parent without the Fed's approval and could potentially result in the bank further paring back some of its U.S. operations.
In a statement on Thursday, Deutsche Bank said it had made significant investments to improve its capital planning capabilities as well as controls and infrastructure at its U.S. subsidiary and would work with regulators to "continue to build on these efforts."
The newly created U.S. subsidiaries of six foreign lenders, Deutsche Bank, Credit Suisse Group AG, UBS Group AG, BNP Paribas SA, Barclays Plc and Royal Bank of Canada, went through the test for the second time this year had their results publicly released for the first time.
Deutsche Bank's results cover DB USA Corp, a holding company with $133 billion in assets, according to Deutsche Bank's March filings. This includes all of Deutsche Bank's non-branch U.S. assets, including its mortgage lending and debt financing subsidiary, and its sizable Wall Street broker-dealer trading business.
The Deutsche Bank AG logo sits on an office building in Frankfurt, Germany. Krisztian Bocsi | Bloomberg | Getty Images
The Deutsche Bank AG logo sits on an office building in Frankfurt, Germany.
The test results follow months of turmoil for Germany's largest lender, whose shares are down 43 percent this year in Frankfurt.
The bank abruptly reshuffled management in April after three consecutive years of losses. It then announced it would scale back its global investment bank and refocus on Europe and its home market. It has flagged cuts to U.S. bond trading, equities and the business that serves hedge funds.
But Thursday's result will raise further questions among analysts and investors as to whether regulators should take a tougher line and even push the bank to more aggressively pare back its U.S. operations.
David Hendler, an independent analyst at New York-based Viola Risk Advisors, which specializes in risk management, said he was "astounded" that the results showed continued risk management and operational problems at the subsidiary of a major global bank.
"It's like a plane that isn't safe to fly because the flight systems are malfunctioning," he said.
The focus will now shift to European authorities and how they plan to tackle Deutsche's problems, he added.

Conditional approvals

The Fed otherwise approved the capital plans for 34 lenders, allowing them to use the extra capital for stock buybacks, dividends and other purposes.
These included household names like JPMorgan Chase & Co, Citigroup Inc, Bank of America Corp and Wells Fargo & Co, as well as major regional lenders like Capital One Financial Corp, PNC Financial Services Group Inc and U.S. Bancorp.
The country's top regulator said it conditionally approved the capital plans for Goldman Sachs and Morgan Stanley whose capital levels had been adversely affected during the test by last year's changes to the U.S. tax code.
Those banks will maintain their capital distribution levels in-line with those paid in recent years to bolster their capital cushion, the Fed said.
After the results were announced, Morgan Stanley said that it will distribute $6.8 billion, in line with last year's payout.
Goldman Sachs said it would return up to $6.3 billion, including $5 billion through share buybacks and $1.3 billion in dividends, which will rise to a quarterly rate of 85 cents per share from 80 cents.

Mar 19, 2018

CNBC Stocks making the biggest moves premarket: NWL, QCOM, UTX, VFC, AAPL, FB, BABA & more

cnbc.com

Stocks making the biggest moves premarket: NWL, QCOM, UTX, VFC, AAPL, FB, BABA & more

Peter Schacknow

Traders work on the floor of the New York Stock Exchange Brendan McDermid | Reuters
Traders work on the floor of the New York Stock Exchange
Check out which companies are making headlines before the bell:
Newell Brands – The company behind consumer brand names like Rubbermaid and Sunbeam announced an agreement with investor Carl Icahn, who owns about 6.9 percent of Newell's shares. The company agreed to appoint four independent directors designated by Icahn, with Icahn agreeing to vote in favor of the company's proposed director slate at the upcoming annual meeting.
Qualcomm – Former chairman Paul Jacobs won't be renominated to the chipmaker's board, following news that he explored an effort to put together a potential buyout of the company his father founded. Reports say the board felt Jacobs could not be a director and work on a bid at the same time.
United Technologies – CEO Greg Hayes told CNBC's Jim Cramer on Friday's Mad Money that the company needs to explore the idea of breaking up and give investors an answer by the end of this year.
VF Corp. – The apparel and footwear company struck a deal to sell the Nautica brand business to privately held Authentic Brands. Terms of the deal were not disclosed.
Apple – Apple is said to be developing its own MicroLED screens in California, according to a Bloomberg report. The screens would not appear an iPhones for at least three to five years, but the news could hurt suppliers like touchscreen technology company Synaptics.
Facebook – Facebook is facing increasing criticism and calls for new regulation, following allegations that political consulting firm Cambridge Analytica inappropriately obtained and used Facebook user data. Shares of the social media giant fell 3 percent amid the fallout.
Alibaba – Alibaba is investing an additional $2 billion in Southeast Asian e-commerce firm Lazada Group, doubling its prior investment. It has also tapped long-time Alibaba executive Lucy Peng to take over as Lazada's CEO.
Micro Focus – Chief Executive Chris Hsu has resigned, to be replaced by Chief Operating Officer Stephen Murdoch. The executive shift comes as the British software company cuts its annual revenue forecast.
CSRA – CSRA is a takeover target of fellow defense contractor CACI International, which said it had offered $44 per share in cash and stock. CSRA had already agreed to be bought by General Dynamics for $40.75 per share in cash. CSRA said its board would review the CACI offer.
Baidu – The China internet company's video streaming unit iQiyi plans to go public on the Nasdaq with an IPO worth up to $2.4 billion. It plans to offer 125 million American Depositary shares at $17 to $19 each, according to a Securities and Exchange Commission filing.
Barclays – Activist investor Sherborne Investors Management has acquired a 5.2 percent stake in Barclays. The bank said it welcomes Sherborne as an investor.
Meredith Corp. – The media company is expected to cut 200 to 300 jobs as soon as this week, according to The Wall Street Journal. That follows the completion of Meredith's acquisition of Time Inc.
GGP – The mall operator received a revised takeover bid from real estate firm Brookfield Property Partners according to Reuters. GGP had rejected a $14.8 billion cash and stock offer from Brookfield in late 2017, but the new offer is said to contain a slightly higher cash portion as well as a new security that would trade as a real estate investment trust.

Mar 17, 2018

CNBC News | Cambridge Analytica denies using Facebook data for Trump campaign, says its cooperating with the social network. March 17, 2018.

cnbc.com

Cambridge Analytica denies using Facebook data for Trump campaign, says its cooperating with the social network

Javier E. David

Facebook's news feed Thanasak Wanichpan | Getty Images
Facebook's news feed
Cambridge Analytica, a data analytics firm used by the Trump campaign during the 2016 elections, insisted on Saturday that it did not misuse or hold data obtained from Facebook users, despite having been sanctioned by the platform for doing so.

On Friday, Facebook announced that it had suspended Cambridge Analytica, suggesting the firm had not been honest about deleting user data sent to it by the makers of a popular psychology test app.
That particular app, called "thisisyourdigitallife," was itself banned by Facebook back in 2015. However, the social network has accused Cambridge Analytica of holding that data, despite assurances to the contrary.
"Several days ago, we received reports that, contrary to the certifications we were given, not all data was deleted," Facebook said in a blog post. "We are moving aggressively to determine the accuracy of these claims. If true, this is another unacceptable violation of trust and the commitments they made."
Cambridge Analytica now finds itself in the middle of a political firestorm, amid a roiling debate over 'information warfare' that is being used to influence the electoral process. It stands accused of harvesting Facebook user data to profile voters that that were ultimately targeted by the Trump campaign, which spent over $6 million on information obtained by the firm.
Yet on Saturday, Cambridge Analytica issued a statement insisting it "fully complies" with Facebook's terms of service, and was working with the site to resolve the issue.
"Cambridge Analytica's commercial and political divisions use social media platforms for outward marketing, delivering data-led and creative content to targeted audiences. They do not use or hold data from Facebook profiles," the firm said, as it sought to distance itself from a company it originally contracted to mine information.

"In 2014, we contracted a company led by a seemingly reputable academic at an internationally-renowned institution to undertake a large scale research project in the United States," Cambridge Analytica said.
"This company, Global Science Research (GSR), was contractually committed by us to only obtain data in accordance with the U.K. Data Protection Act and to seek the informed consent of each respondent," it added.
"When it subsequently became clear that the data had not been obtained by GSR in line with Facebook's terms of service, Cambridge Analytica deleted all data received from GSR," Cambridge said.
"We worked with Facebook over this period to ensure that they were satisfied that we had not knowingly breached any of Facebook's terms of service and also provided a signed statement to confirm that all Facebook data and their derivatives had been deleted," it added.
People listen as Republican Presidential candidate Donald Trump speaks at a rally on October 22, 2016 in Cleveland, Ohio. Spencer Platt | Getty Images
People listen as Republican Presidential candidate Donald Trump speaks at a rally on October 22, 2016 in Cleveland, Ohio.
The firm, initially funded by a multimillion investment by conservative billionaire Robert Mercer and helmed by former Trump advisor Steve Bannon, touted tools using data to identify and sway voters. That approach is now under fire on both sides of the Atlantic.
"All parties involved — including the SCL Group/Cambridge Analytica, Christopher Wylie and [thisisyourdigitallife creator] Aleksandr Kogan— certified to us that they destroyed the data in question," said Paul Grewal, Facebook's vice president and deputy general counsel.
"In light of new reports that the data was not destroyed, we are suspending these three parties from Facebook, pending further information. We will take whatever steps are required to see that the data in question is deleted once and for all — and take action against all offending parties," Grewal added.
Despite Facebook's claims that Cambridge Analytica used the information in the service of Trump's presidential ambitions, the firm dismissed the notion.
"No data from GSR was used by Cambridge Analytica as part of the services it provided to the Donald Trump 2016 presidential campaign," it said. "Cambridge Analytica only receives and uses data that has been obtained legally and fairly."
Christopher Wylie, one of Cambridge Analytica's founders who left the firm in 2014, spoke disparagingly about the company in an interview with The New York Times published on Saturday.
"Rules don't matter for them. For them, this is a war, and it's all fair," Wylie told the publication. "They want to fight a culture war in America," he added. "Cambridge Analytica was supposed to be the arsenal of weapons to fight that culture war."
Below is Cambridge Analytica's full statement:
Cambridge Analytica fully complies with Facebook's terms of service and is currently in touch with Facebook following its recent statement that it had suspended the company from its platform, in order to resolve this matter as quickly as possible.
Cambridge Analytica's Commercial and Political divisions use social media platforms for outward marketing, delivering data-led and creative content to targeted audiences. They do not use or hold data from Facebook profiles.
In 2014, we contracted a company led by a seemingly reputable academic at an internationally-renowned institution to undertake a large scale research project in the United States.
This company, Global Science Research (GSR), was contractually committed by us to only obtain data in accordance with the UK Data Protection Act and to seek the informed consent of each respondent. GSR was also contractually the Data Controller (as per Section 1(1) of the Data Protection Act) for any collected data. GSR obtained Facebook data via an API provided by Facebook.
When it subsequently became clear that the data had not been obtained by GSR in line with Facebook's terms of service, Cambridge Analytica deleted all data received from GSR.
We worked with Facebook over this period to ensure that they were satisfied that we had not knowingly breached any of Facebook's terms of service and also provided a signed statement to confirm that all Facebook data and their derivatives had been deleted.
No data from GSR was used by Cambridge Analytica as part of the services it provided to the Donald Trump 2016 presidential campaign.
Cambridge Analytica only receives and uses data that has been obtained legally and fairly. Our robust data protection policies comply with US, international, European Union, and national regulations.

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