DAILY MARKET REPORTS
- The S&P 500 index tumbled by the most since March before paring losses, signaling a potentially volatile week on Wall Street after Trump tweeted a plan to hike tariffs this coming Friday.
- Seeking to ramp up pressure on China for more concessions, Trump threatened in two tweets to more than double tariffs on $200 billion of Chinese goods and impose a fresh round of duties on top of that.
- Adding to a complex global picture, North Korea carried out a weapons test that potentially included its first ballistic missile launch since 2017, challenging Trump’s bottom line in nuclear talks.
- Monday’s volatile drops follow months of relative calm, after a turbulent 2018 left investors scarred.
- Stocks and bonds rose in 2019, with U.S. equities recently touching all-time highs.
- The S&P 500, for example, added 16% this year.
- Markets observers had said optimism about U.S.-China trade talks helped underpin that climb.
US FINANCIAL MARKET
Berkshire swings to big profit; Buffett laments Kraft Heinz
- Warren Buffett’s Berkshire Hathaway on Saturday said gains in its stock investments fueled a big first-quarter profit, while improved results from its Geico auto insurer and BNSF railroad units boosted operating results.
- Berkshire also said it repurchased $1.7 billion of its stock in the quarter, reflecting Buffett’s troubles to find better uses for the Omaha, Nebraska-based conglomerate’s cash hoard, which now totals $114.2 billion.
- Operating profit, which Buffett considers a better performance measure, rose 5 percent to $5.56 billion in the quarter from $5.29 billion a year earlier.
- For the full year, overall profit rose $21.66-billion compared with a year-earlier net loss of $1.14 billion and a fourth-quarter net loss of $25.39 billion.
Tyson Foods beats profit estimates, eyes fatal hog disease
- Tyson Foods said on Monday that quarterly profits beat Wall Street estimates and projected the meat company could reap significant gains from an incurable hog disease spreading across Asia.
- Tyson, which sells beef, pork and chicken, said all proteins could benefit from outbreaks of African swine fever.
- In China, up to 200 million pigs could be culled or die due to African swine fever, according to Rabobank.
- Net income rose to $426 million in the second quarter from $315 million a year earlier.
- Tyson’s quarterly sales rose 6.9 percent to $10.44 billion.
- Analysts on average had expected $10.29 billion, according to IBES data from Refinitiv.
Kraft to Restate Financial Results Following Investigation
- Kraft Heinz said it is restating a host of its financial results dating as far back as 2016, after it determined they included certain misstatements
- The food company also said an investigation revealed misconduct by several staffers in its procurement division.
- A number of staff in that division were let go as part of the probe.
Apple to Reveal New Home-Grown Apps, Software Features at WWDC
- Apple is planning to unleash a slew of new apps, features and development tools at its annual software conference next month.
- The Worldwide Developers Conference, or WWDC, starts June 3.
- The company will reveal updates to the operating systems that run the iPhone, iPad, Mac, Apple Watch, and Apple TV. Highlights include upgrades to core iPhone apps such as Maps, Reminders and Messages; new apps for the Apple Watch that make it more independent from the iPhone, and enhancements to the health tracking capabilities of Apple devices, according to people familiar with the plans.
Anadarko Is Likely to Accept Revised Occidental Bid Monday
- Anadarko Petroleum’s board of directors is likely to decide Monday that Occidental Petroleum’s sweetened $38 billion takeover bid is superior to Chevron Corp.’s, according to a person familiar with the matter.
- The board is set to meet after Occidental boosted the cash portion of its proposal.
- The Houston-based company said Sunday that 78 percent of the deal will be paid in cash, up from 50 percent, and it has eliminated the need for a shareholder vote, which had previously been cited as a sticking point for Anadarko’s directors.
- Occidental also pledged to cover the $1 billion breakup fee Anadarko would have to pay for abandoning an already-agreed to deal with Chevron.
Google’s New Privacy Tools to Make Cookies Crumble, Competitors Stumble
- Google is set to launch new tools to limit the use of tracking cookies, a move that could strengthen the search giant’s advertising dominance and deal a blow to other digital-marketing companies, according to people familiar with the matter.
- After years of internal debate, Google could as soon as this week roll out a dashboard-like function in its Chrome browser that will give internet users more information about what cookies are tracking them and offer options to fend them off, the people said.
XFL Strikes TV Deals with Fox and Disney
- Terms of the three-year deal weren’t disclosed, but people familiar with the matter said no cash is changing hands.
- Disney and Fox will keep all the television advertising inventory for the games and cover production costs while the football league will sell sponsorships, the people said.
- All of the league’s 43 games will be televised either on broadcast or cable, the companies said.
- More than half will be split between Disney’s ABC network and the Fox network, while Disney’s ESPN and Fox’s Fox Sports 1 will be the cable homes.
- The majority of games will be played on Saturday and Sunday afternoons.
- One goal the XFL has to differentiate itself from the NFL is shorter games.
- The league wants to keep games under three hours and will do that with a shorter play clock and what it hopes will be faster instant-replay reviews.
Boeing Knew About Safety-Alert Problem for a Year Before Telling FAA, Airlines: WSJ Reports
- Boeing didn’t share information about a problem with a cockpit safety alert for about a year before the issue drew attention with the October crash of a 737 MAX jet in Indonesia, and then gave some airlines and pilots partial and inconsistent explanations, according to industry and government officials.
- It was only after a second MAX accident in Ethiopia nearly five months later, these officials said, that Boeing became more forthcoming with airlines about the problem.
- And the company didn’t publicly disclose the software error behind the problem for another six weeks, in the interim leaving the flying public and, according to a Federal Aviation Administration spokesman, the agency’s acting chief unaware.
US ECONOMY & POLITICS
Trump slams China on trade, says won’t lose to Beijing
- U.S. President Donald Trump on Monday slammed China over its trade practices, saying the United States was losing billions to Beijing and vowing to protect American commerce as tension escalated following his weekend threat to hike tariffs.
- On Sunday, Trump said he would ratchet up tariffs on $200 billion worth of imports from China.
- He also said he would impose tariffs of 25 percent on $325 billion of Chinese goods “shortly,” which would essentially mean all goods imported from China into the United States would be blanketed by duties.
- Global stock markets tumbled on Monday.
- Chinese shares fell 6 percent, U.S. stock market futures tumbled 1.6 percent and European stocks slid to a one-month low.
- Trump appeared to defend his Sunday statement, citing the trade deficit between the United States and China. “Sorry, we’re not going to be doing that anymore!” he tweeted early Monday.
- Mr. Trump’s weekend tweets surprised Chinese negotiators, led by Vice Premier Liu He, who were aiming to wrap up the trade talks with their U.S. counterparts during a trip to Washington scheduled for this week.
Household Income and Spending Rose for All but the Lowest Earners
- Households among the bottom 20 percent saw their average annual income drop 2.2 percent to $11,335 in the 12 months ending June 2018 from a year prior, according to data from the Bureau of Labor Statistics.
- As income dropped, these households also cut back on consumption and spent 0.5 percent less than the prior year.
- Still these households with lower income were spending more than they earned, signaling the drawdown of savings from a large number of retirees and to a lesser extent the taking on of additional debt.
- The other 80 percent of households experienced rising income, with the top quintile of households seeing the highest gains at 5 percent.
Barr Faces Contempt Vote on Refusal to Share Full Mueller Report
- House Judiciary Chairman Jerrold Nadler set up a Wednesday vote to hold Attorney General William Barr in contempt of Congress for failing to provide Congress with a fully unredacted version of Special Counsel Robert Mueller’s report.
- The 10 a.m. markup would include a vote on a resolution and an accompanying report on the contempt resolution, the committee said in a statement released Monday morning shortly after Barr missed a deadline set by Nadler.
- Nadler said in a statement Mueller’s report — even in redacted form — “offers disturbing evidence and analysis that President Trump engaged in obstruction of justice at the highest levels,” adding that Congress must see the full report and underlying evidence to determine what to do.
- “The attorney general’s failure to comply with our subpoena, after extensive accommodation efforts, leaves us no choice but to initiate contempt proceedings in order to enforce the subpoena and access the full, unredacted report,” he said.
- “If the Department presents us with a good faith offer for access to the full report and the underlying evidence, I reserve the right to postpone these proceedings.”
EUROPE & WORLD
China trade team still plans on U.S. talks as Trump vows to raise tariffs
- China said that a delegation was still preparing to go to the United States for trade talks, even as U.S. President Donald Trump dramatically increased pressure on Beijing to reach a deal, saying he would hike tariffs on Chinese goods this week.
- “We are also in the process of understanding the relevant situation. What I can tell you is that China’s team is preparing to go to the United States for the discussions,” Chinese Foreign Ministry spokesman Geng Shuang told a news briefing.
- “What is of vital importance is that we still hope the United States can work hard with China to meet each other half way, and strive to reach a mutually beneficial, win-win agreement on the basis of mutual respect,” Geng said.
Mitsubishi plans $1.4 billion rescue for plant engineering firm Chiyoda: Nikkei
- Japanese trading house Mitsubishi Corp and MUFG Bank plan to rescue plant engineering company Chiyoda with a $1.4 billion lifeline, betting on a turnaround fueled by greater LNG demand.
- Chiyoda, one of the world’s leading builders of liquefied natural gas (LNG) plants, has struggled with losses after a hurricane hit its Cameron LNG project in Louisiana.
Airbus considers legal action against Germany over Saudi ban: sources
- Airbus is considering suing the German government as its freeze on arms exports to Saudi Arabia means the company is unable to complete a border security system for the Gulf state.
- In October, Germany decided to reject future arms exports licenses to Saudi Arabia over the killing of journalist Jamal Khashoggi, and to freeze deliveries of already approved equipment – a move that infuriated allies and defense companies.
- Airbus is looking at taking legal action against Berlin over the security system for the border between Saudi Arabia and Yemen – a contract worth some 3 billion euros ($3.36 billion), of which around 1 billion euros remains open, the sources said.
TODAY in HISTORY
- Congress passed the Chinese Exclusion Act over President Chester A. Arthur’s veto (1882)
- The Universal Exposition opened in Paris, marking the completion and dedication of the Eiffel Tower (1889)
- The German airship Hindenburg blew up and burst into flames at Lakehurst, N.J. (1937)
- Dictator Joseph Stalin became the premier of Russia (1941)
- The Chunnel between England and France officially opened (1994)
- Scotland elected its first separate parliament in three centuries (1999)
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