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  • U.S. stocks edged higher on Tuesday, as investors picked up beaten-down technology and industrial stocks following optimistic comments from Washington and Beijing that tempered concerns about a further escalation in the trade war.
  • The S&P 500 and the Dow recorded their largest percentage drops since Jan. 3 on Monday in one of Wall Street’s worst selloffs this year after China hit back with tariffs on $60 billion worth U.S. goods.
  • Prospects of the global economy being derailed by the United States and China sliding into a fiercer, more protracted dispute has knocked more than 4% off the S&P 500 since hitting an all-time high on May 1, putting the index on course for the biggest monthly decline since December.
  • U.S. President Donald Trump said on Monday he would talk to Chinese President Xi Jinping at a G20 Summit in late June and China said both sides have agreed to keep the talks going, helping inject some calm into the markets.
  • A Labor Department report showed U.S. import prices rose less than expected in April as increases in the cost of petroleum and food were tempered by the largest drop in the price of capital goods in 10 years, suggesting inflation could remain tame.


Ralph Lauren profit beats on international demand

  • Ralph Lauren beat analysts’ estimates for fourth-quarter revenue and profit on Tuesday, as the luxury apparel maker benefited from higher demand in international markets especially China.
  • Overall, net revenue fell 1.5% to $1.51 billion due to a strong dollar, but beat estimates of $1.48 billion.
  • Revenue in Asia rose 10% on a constant-currency basis, powered by a 30% growth in mainland China, while Europe also saw 11% revenue growth on a constant-currency basis.
  • Net income fell to $31.6 million in the fourth quarter, from $41.3 million a year earlier.

Disney takes control of Hulu before own streaming launch

  • Comcast has agreed to give Walt Disney full control of Hulu in a deal that puts a minimum future value on the streaming service of $27.5 billion while laying the groundwork for the creation of a powerful competitor for Netflix.
  • In a statement on Tuesday, the companies said Disney would immediately assume full operational control of Hulu under an agreement that allows either company to trigger a sale of Comcast’s 33% stake to Disney after January 2024.
  • Disney and Comcast also said they had agreed to fund Hulu’s recent buyout of AT&T’s 9.5% interest in the company.

Bayer Shares Fall After $2 Billion Roundup Verdict

  • Bayer shares resumed their monthslong fall on Tuesday after the company was hit by a more-than $2 billion jury award over its Roundup herbicide, marking a sharp escalation in the chemical and drug giant’s legal woes.
  • A California jury on Monday awarded $2.055 billion to a couple who blamed the weedkiller for causing their cancer, a significantly higher amount than the two-digit million figures Bayer is facing in previous cases.
  • After the first verdict, Bayer obtained a substantial reduction in the amount of the award and analysts were optimistic Tuesday that this week’s $2 billion award would be reduced too.

FAA Didn’t Treat Suspect 737 MAX Flight- Control System as Critical Safety Risk

  • An internal Federal Aviation Administration review has tentatively determined that senior agency officials didn’t participate in or monitor crucial safety assessments of a 737 MAX flight-control system later implicated in two fatal crashes.
  • The results also indicate that during the certification process, Boeing didn’t flag the automated stall-prevention feature as a system whose malfunction or failure could cause a catastrophic event.
  • Such a designation would have led to more intense scrutiny.
  • FAA engineers and midlevel managers deferred to Boeing’s early safety classification, the inquiry determined, allowing company experts to conduct subsequent analyses of potential hazards with limited agency oversight.

Saudi Arabia Oil Pipeline Attacked by Drones

  • Saudi Arabia said Tuesday it halted pumping on a major oil pipeline after it was hit by armed drones, the latest attack on its energy infrastructure after two of its oil tankers were damaged near the Strait of Hormuz over the weekend.
  • The armed drones attacked two pump stations on a pipeline that transports oil from the Eastern Province to Yanbu port on the Red Sea, said Saudi Energy Minister Khalid al-Falih in a statement.
  • The attack early in the morning caused minor damage and a fire that has since been contained, he said.

U.S. Says Iran Likely Behind Ship Attacks

  • An initial U.S. assessment indicated Iran likely was behind the attack on two Saudi Arabian oil tankers and two other vessels damaged over the weekend near the Strait of Hormuz, a finding that could further inflame military tensions in the Persian Gulf.
  • The assessment, while not conclusive, was the first suggestion that Iran was responsible for the attack and comes after a series of U.S. warnings against aggression by Iran or its allies and proxies against military or commercial vessels in the region.
  • The U.S. official, who declined to be identified, didn’t offer details about what led to the assessment or its implications for a possible U.S. response.

Pilates. Spinning. Furnished Office Space? Equinox Adds Co-Working

  • Equinox is teaming with co-working operator Industrious to offer furnished office space near the fitness company’s upscale gyms, the latest sign that the office, fitness and hospitality industries are starting to converge.
  • The first workspace in the partnership is slated to open later this year in a 72-story skyscraper in Manhattan’s Hudson Yards, said Industrious’s co-founder and chief executive Jamie Hodari.
  • The deal marks the latest effort to combine flexible office space with other services popular among professionals, such as gyms and lodgings, as many embrace more integration between their on- and off-the-clock lives.

WhatsApp to refer security breach to U.S. authorities

  • Facebook’s WhatsApp said on Tuesday a security breach on its messaging app had signs of coming from a private company working on surveillance and it had referred the incident to the U.S. Department of Justice.
  • WhatsApp is used by 1.5 billion people monthly and it has touted its high level of security and privacy, with messages on its platform being encrypted end to end so that WhatsApp and third parties cannot read or listen to them.
  • WhatsApp informed its lead regulator in the European Union, Ireland’s Data Protection Commission (DPC), of a “serious security vulnerability” on its platform.

Starbucks, Mercon announce separate sustainability loans

  • Starbucks and Mercon Coffee Group separately announced sustainability-focused loan facilities on Monday, signaling the coffee sector’s growing emphasis on sustainability as climate change and low global prices threaten the future of the crop.
  • Starbucks announced a $1 billion sustainability bond, its third such bond but largest to date, proceeds of which will go to supporting the purchase of ethically sourced coffee, farmer support programs, and the building of greener retail stores.
  • Mercon announced a $450 million sustainability-linked senior secured revolving credit facility, which will specifically fund initiatives related to sustainability, such as programs through which Mercon will help offer technical assistance to farmers.

San Francisco Poised to Ban Facial-Recognition Surveillance

  • San Francisco is likely to become the first U.S. city to ban the use of facial recognition by local agencies, adding to a broad push to regulate a technology that critics argue can perpetuate police bias and give authorities excessive surveillance powers.
  • The proposed ban is included in an ordinance that both proponents and opponents say the city’s Board of Supervisors is likely to pass Tuesday.
  • The ordinance also would require any city agency that wants to buy a surveillance system bring it before the board first.

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Trump Sees China Trade Deal ‘When the Time Is Right’

  • President Trump signaled he was in no rush to reach a deal with China and pledged that the federal government would come to the financial aid of American farmers hurt by Beijing’s retaliatory tariffs as the trade fight between the two nations continues.
  • Escalating tariffs are expected to fall hard on successful exporters to China, such as American farmers.
  • Commodity prices and exports have dropped sharply during the conflict, taking a bite out of farm income.
  • Trump said that the federal government would replace farmers’ lost income with federal aid, a pledge first unveiled last week.

U.S. import prices up slightly; underlying imported inflation weak

  • U.S. import prices rose less than expected in April as increases in the cost of petroleum and food were tempered by the largest decrease in the price of capital goods in 10 years, suggesting inflation could remain tame for a while.
  • Import prices increased 0.2% last month after an unrevised 0.6% increase in March.
  • Economists had forecast import prices would climb 0.7% in April.
  • In the 12 months through April, import prices fell 0.2% after edging up 0.1% in March.

China says U.S. has agreed to keep talking over trade war

  • China and the United States have agreed to keep talking about their trade dispute, the Chinese government said on Tuesday, as U.S. President Donald Trump said he thought recent discussions in Beijing would be successful.
  • The slightly more optimistic comments came after both sides ramped up their trade war, with China announcing details of new tariffs against U.S. imports on Monday, following a U.S. move last week to target Chinese imports.
  • Sources have said talks stalled after China tried to delete commitments from a draft agreement that its laws would be changed to enact new policies on issues from intellectual property protection to forced technology transfers.

Montana Gov. Steve Bullock Enters 2020 Democratic Presidential Race

  • Steve Bullock, the governor of Montana, entered the crowded Democratic presidential contest Tuesday morning with a strong emphasis on his record running a red state.
  • The second-term governor, is the 22nd major candidate looking to challenge Trump as the Democratic nominee next year.
  • Key to his pitch: He is the only Democratic hopeful elected to statewide office in a state Mr. Trump carried in 2016.
  • Mr. Bullock was re-elected in 2016, defeating now-Rep. Greg Gianforte (R., Mont.) with a slim majority of the overall vote; that same year, Mr. Trump beat Democrat Hillary Clinton in the Montana presidential contest by 20 points.

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China Invokes Patriotic Spirit as Trade Fight Escalates

  • China amped up its rhetoric in a tariff battle with the U.S., playing to nationalistic sentiment with strident state-media criticisms aimed at Washington, even as Beijing reiterated its preference for a negotiated resolution.
  • As China announced plans on Monday to raise levies on $60 billion worth of U.S. imports, state media issued defiant commentaries that asserted their country’s economic strength and girded citizens for a bitter trade fight.
  • The trade war is “no big deal” for China, as it will “advance through difficulties” and “turn peril into opportunity,” China Central Television declared on its nightly newscast, in remarks widely shared on social media.

Foxconn Profit Falls as iPhone Sales Flag

  • Foxconn Technology’s profit fell about 17.7% in the first quarter after its biggest customer, Appel, reported an accelerated decline in sales of the iPhone.
  • Foxconn’s revenue for the quarter rose some 2.5% to NT$1.054 trillion from the previous year’s NT$1.029 trillion.
  • Foxconn said Tuesday that its net profit in the January-to-March quarter was 19.83 billion new Taiwan dollars (US$637 million), lower than the NT$23.05 billion average estimate.
  • Its net profit over the same period in 2018 was NT$24.08 billion.

Japan’s Takeda forecasts 193 billion yen annual operating loss on Shire deal

  • Takeda Pharmaceutical forecast on Tuesday it would have an operating loss in the current financial year, as it books costs associated with the multibillion-dollar Shire deal.
  • Japan’s biggest drugmaker expects an operating loss of 193 billion yen ($1.76 billion) for the year to March 2020, compared with a 205 billion yen profit a year earlier.
  • That compares with an average estimate for the current year of 227.5 billion yen profit from 12 analysts.

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  • Edward Jenner administered the first smallpox vaccine to 8-year-old James Phipps. (1796)

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