DAILY MARKET REPORTS
- Major U.S. stock indexes fell Tuesday, as investors assessed the potential fallout from the Trump administration’s threat to impose new tariffs on European imports.
- The Trump administration on Monday released a list of some $11 billion worth of European goods it was considered putting tariffs on, including bicycles, kitchens and civil aviation products like the Airbus aircraft, ratcheting up trade tensions between Brussels and Washington.
- U.S. Trade Representative Robert Lighthizer said the Trump administration would wait for World Trade Organization clearance to implement the duties.
- The International Monetary Fund (IMF) released its latest world economic outlook, which cut estimates for global growth again, with all major advanced economies seeing deterioration in their outlook.
- Minutes from the Federal Reserve’s most recent meeting are expected Wednesday.
US FINANCIAL MARKET
IMF Cuts 2019 Global Growth Outlook as World Economy Stumbles
- The IMF’s latest forecasts cut the outlook for growth in 2019 to 3.3% from estimates of 3.5% in January and 3.7% in October.
- The decline has been broadly felt, with all major advanced economies, including the U.S., and most major emerging-market economies seeing deterioration in their outlook.
- Growth forecasts dropped 0.5 percentage points from January for Germany, Italy and Mexico, 0.6 points for Latin America as a whole, 0.4 points for Canada, 0.3 points for the U.K., and 0.9 points for the Middle East.
- In Europe, the report also pointed to declining consumer and business sentiment, and the difficulties brought about by political uncertainty in Italy and the United Kingdom and protests in France that halted its economic growth.
- World trade, which had been growing at about 5%, expanded by 3.8% last year and is forecast to rise 3.4% in 2019.
- While trade was clearly decelerating in the IMF’s quarterly forecasts released in January, the new data represent an additional downgrade of 0.6 percentage points for trade growth.
American Airlines trims quarterly revenue forecast, shares fall 3%
- American Airlines on Tuesday trimmed its first-quarter revenue forecast after cancelling hundreds of flights during the period, mainly due to the global grounding of Boeing’s 737 MAX.
- Shares of American fell 3% after the airline said it now expects here revenue per available seat mile, a closely followed measure of performance, to be flat to up 1% compared with the prior forecast of flat to 2% growth.
- The carrier also cut its first-quarter outlook for margins, citing higher fuel prices. Excluding special items, the company now expects pre-tax margin to be about 2% to 4%, compared with its prior forecast of 2.5% to 4.5%.
- American owns 24 MAX jets, the brand-new, fast-selling Boeing aircraft whose use was suspended around the world in March following two deadly crashes.
China Aircraft Leasing says no change to Boeing 737 MAX order
- China Aircraft Leasing Group on Tuesday said it has not put its order for 100 Boeing Co 737 MAX jets on hold, rebutting an earlier report by the South China Morning Post (SCMP) newspaper.
- The SCMP attributed its information to comments from CALC Chairman Chen Shuang, and the lessor said Chen was misquoted.
- The Hong Kong-based newspaper later on Tuesday updated its story to quote CALC Chief Executive Mike Poon as saying the company had not stopped payment, but as deliveries were on hold, it did not need to make any payment for the time being.
Wells Fargo Sells Institutional Retirement and Trust Arm for $1.2 Billion
- Wells Fargo is selling off its retirement and trust business to Principal Financial for $1.2 billion, the companies said Tuesday.
- Wells said the business includes its retirement plan record-keeping and administrative services, executive deferred compensation, institutional trust and custody and institutional asset advisory businesses.
- The deal is expected to close in the third quarter of 2019.
Facebook Bends to EU Pressure on ‘Misleading’ Fine Print
- Facebook has bowed to demands from European Union regulators to change what the bloc had called its misleading terms of service, the latest example of a broader effort by governments globally to exercise more control over tech firms.
- The European Commission, the EU’s executive arm Tuesday said that Facebook has agreed to address a list of outstanding concerns that it and a group of national consumer-protection authorities had articulated about the company’s terms of service.
- Among the commitments disclosed, Facebook will spell out how it makes money by using information about users to sell advertising, and clarify that it can be held liable for misuse of user data when it “has not acted with due professional diligence.”
Saudi Aramco’s Debut International Bond Gets $100 Billion Orders
- Saudi Aramco received more than $100 billion in orders for its debut international bond due Tuesday, as investors shrugged off concerns about the kingdom’s human-rights record in order to access the world’s most profitable company.
- Government-owned Aramco, known officially as Saudi Arabian Oil Co., is expected to raise about $10 billion from the sale.
- Investor interest in the bond will be an important bellwether for the oil giant’s initial public offering, which is expected in 2021 according to Saudi officials.
Bank of America Aims to Raise Minimum Wage to $20 an Hour by 2021
- Bank of America said it is raising the minimum wage so it hits $20 an hour in 2021.
- Part of the changes will go into effect May 1, when the bank increases its minimum wage to $17 an hour, it said Tuesday.
- Bank of America increased its minimum wage to $15 an hour two years ago.
Walmart Is Rolling Out the Robots
- Walmart is expanding its use of robots in stores to help monitor inventory, clean floors and unload trucks, part of the retail giant’s efforts to control labor costs as it spends more to raise wages and offer new services like online grocery delivery.
- The largest private employer said at least 300 stores this year will add machines that scan shelves for out-of-stock products.
- Autonomous floor scrubbers will be deployed in 1,500 stores, after a test in hundreds of stores last year.
- The number of conveyor belts that automatically scan and sort products as they come off trucks will more than double, to 1,200.
- The company said the addition of a single machine can cut a few hours a day of work previously done by a human, or allow Walmart to allocate fewer people to complete a task, a large saving when spread around 4,600 U.S. stores.
Twitter’s Jack Dorsey paid $1.40 in 2018
- Twitter said on Monday it paid its Chief Executive Officer Jack Dorsey $1.40 in 2018.
- Dorsey had declined all direct compensation and benefits for three years in 2015, 2016 and 2017.
- In 2018 he declined all compensation and benefits other than a salary of $1.40, the social media company said in an SEC filing.
China wants to ban bitcoin mining
- China’s state planner wants to eliminate bitcoin mining in the country, according to a draft list of industrial activities the agency is seeking to stop in a sign of growing government pressure on the cryptocurrency sector.
- China is the world’s largest market for computer hardware designed to mine bitcoin and other cryptocurrencies, even though such activities previously fell under a regulatory grey area.
- The National Development and Reform Commission (NDRC) said on Monday it was seeking public opinions on a revised list of industries it wants to encourage, restrict or eliminate. The list was first published in 2011.
- The draft for a revised list added cryptocurrency mining to more than 450 activities the NDRC said should be phased out as they did not adhere to relevant laws and regulations, were unsafe, wasted resources or polluted the environment.
US ECONOMY & POLITICS
U.S. Job Openings Fell in February by the Most Since 2015
- U.S. job openings decreased in February by the most since 2015 while still exceeding the number of unemployed Americans, a sign of some potential relaxation in what’s been a consistently tight labor market.
- The number of positions waiting to be filled decreased by 538,000 to 7.09 million from an upwardly revised 7.63 million in the prior month, according to the Labor Department’s Job Openings and Labor Turnover Survey, or JOLTS, released Tuesday.
- The quits rate held at 2.3% for a ninth straight month, indicating Americans feel confident in their ability to find new employment.
U.S. Moves to Impose Tariffs on $11 Billion of EU Goods
- The Trump administration moved Monday toward imposing tariffs on about $11 billion in imports from the European Union, saying the move was justified by the bloc’s subsidies for European aircraft manufacturer Airbus.
- The U.S. has been in litigation at the World Trade Organization over Airbus subsidies since 2004, and said it was releasing a list of items proposed for tariffs in anticipation of a ruling soon from the WTO.
- The proposed list contains a number of civil aviation products, including Airbus aircraft, the USTR said. It also includes a range of nonaviation items, from cheese to bicycles to kitchen knives to artists’ brushes.
- The EU won a round in March in its WTO counter-case against U.S. subsidies provided to Boeing, a ruling puts the EU on track to compose a similar list of tariffs against U.S. goods and services in several months’ time.
- The EU is starting to prepare its own list of tariffs, the Commission official said.
Attorney General Says He Can Release Mueller Report Within a Week
- Attorney General William Barr said Tuesday he will be able to release the special counsel’s still-secret report within a week, and vowed to be transparent about his reasons for blacking out parts of the roughly 400-page document.
- Hearings Tuesday and Wednesday before the House and Senate appropriations committees—Mr. Barr’s first public appearances since the report was delivered—have the potential to escalate what is expected to be a bitter and protracted political fight that is almost certain to land in the courts.
- Barr has said he would make the document, with redactions, public by mid-April, but Democrats have called that insufficient.
- They want to see the complete conclusions of Robert Mueller’s 22-month investigation, and have threatened to issue a subpoena for the report in the coming days if their demands aren’t met.
Chinese Woman Arrested at Mar-a-Lago Had Cache of Electronics, Prosecutor Says
- A Chinese woman arrested for entering President Trump’s Mar-a-Lago resort without authorization had $8,000 in U.S. and Chinese currency and a cache of electronic devices in her hotel room.
- Yujing Zhang 32 years old, had a device that can detect hidden cameras, nine USB drives and five SIM cards in her room, among other piece of equipment, the prosecutor said Monday.
- Ms. Zhang’s attorney portrayed her actions as innocent and said she planned to attend an event publicized by Charles Lee, a Chinese national who is an event promoter.
- Mr. Lee also has connections to Cindy Yang, the former owner of a massage parlor in West Palm Beach where New England Patriots owner Robert Kraft was recently arrested for soliciting prostitution.
Spread of Measles Accelerates, With U.S. Cases Rising to 465 So Far This Year
- The spread of measles is accelerating in the U.S., driven mostly by an outbreak in New York City, data released Monday show, signaling the difficulties public-health officials are confronting as they try to stop the spread of the highly contagious disease.
- The number of measles cases that have occurred in the U.S. since the beginning of the year has jumped to 465 from 387 the previous week, the federal Centers for Disease Control and Prevention reported Monday.
- The twin developments suggest the measles virus, which authorities declared eliminated in the U.S. in 2000, has surged as a result of exposures overseas and then been transmitted among populations that have shunned vaccinations.
- Health authorities are now trying both to halt the virus’s spread and correct misperceptions about vaccinations.
Klobuchar, Booker Each Raised $5 Million for Democratic Presidential Campaigns
- Ms. Klobuchar of Minnesota said Monday she raised about $5.2 million in seven weeks, and Mr. Booker of New Jersey earlier said he had raised about $5 million in February and March.
- Sen. Bernie Sanders of Vermont appears to be leading the pack of 17 Democratic candidates, having said he raised $18.2 million in the six weeks since he announced his second presidential campaign.
- Among others, former Beto O’Rourke said he brought in $9.4 million in the first 18 days of his Democratic presidential run; Kamala Harris raised $12 million; Mayor Pete Buttigieg raised $7 million; and Andrew Yang collected about $1.7 million.
- The Democratic presidential candidates and President Trump must report first-quarter fundraising information to the Federal Election Commission by April 15.
California Rep. Eric Swalwell Announces 2020 Democratic Presidential Campaign
- Rep. Eric Swalwell of California opened a long-shot bid for the Democratic presidential nomination, injecting youth and a prosecutor’s zeal into the crowded 2020 field.
- Mr. Swalwell, 38 years old, is the 18th Democrat to announce a 2020 campaign and the third candidate younger than 40, joining Pete Buttigieg, the mayor of South Bend, Ind., and Rep. Tulsi Gabbard of Hawaii.
Prosecutors Net 14 New Guilty Plea Agreements in College Cheating Probe
- Thirteen parents and one college coach agreed to plead guilty for their roles in the college-admissions cheating scandal, a turning point in the case and a likely first step toward at least some of the parents serving prison time for attempting to secure spots for their children at elite colleges.
- The parents, including actress Felicity Huffman, agreed on Monday to plead guilty to one felony count of conspiracy to commit mail fraud and honest-services mail fraud.
- While the charge carries a penalty of up to 20 years in prison, prosecutors are recommending that the parents pleading early face sentences ranging from less than six months to a few years, according to the plea filings.
EUROPE & WORLD
EU plans for own retaliation in aircraft dispute with U.S.
- The European Union has begun preparations to retaliate over Boeing subsidies, an EU official said on Tuesday, a day after Washington listed EU products it plans to hit with tariffs in their aircraft dispute.
- A European Commission source said on Tuesday the level of proposed U.S. countermeasures was “greatly exaggerated”, adding the amount of retaliation could only be determined by a World Trade Organization arbitrator.
- The two sides are closing in on the climax of a record subsidy dispute that has been grinding its way through the WTO for almost 15 years.
Potential U.S. auto tariffs would hurt Germany, Japan, Korea: Moody’s
- Ratings firm Moody’s said on Tuesday that potential auto tariffs by the United States would be a risk to global growth, hindering economic momentum in Germany, Japan and Korea.
- However, such a move would be less severe for China as Chinese vehicle exports were already subject to trade restrictions, Moody’s said in a report, adding that it would also be broadly credit negative for the global auto industry.
- “Auto trade restrictions would cause a broader hit to business and consumer confidence globally in an already slowing global economy,” Moody’s Associate Managing Director Elena Duggar wrote.
Hungary sees Huawei as strategic partner despite security concerns
- Hungary regards China’s Huawei Technologies as a strategic IT partner, the Finance Ministry said on Tuesday, shrugging off security concerns about using its products among many western governments.
- In a statement issued after Finance Minister Mihaly Varga met a senior Huawei executive in Beijing, Varga was quoted saying Huawei would help Hungary develop its broadband internet network and meet its goal of high-speed internet access for 90% of families by 2025, as per an earlier agreement
- Elsewhere in the region, the Czech Republic’s largest telecommunications network operator CETIN said last month that risks related to Huawei’s technology were manageable.
TODAY in HISTORY
- Robert E. Lee surrendered to Gen. Ulysses S. Grant at Appomattox Court House. (1865)
- Winston Churchill became the first honorary U.S. citizen. (1963)
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