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  • U.S. stocks gained on Wednesday after data showed that the private sector added fewest jobs in May since 2010, raising the odds that the Federal Reserve would cut interest rates to counter a potential slowdown.
  • Private-sector jobs rose by 27,000 last month, according to the ADP, much below expectations of a 180,000 increase.
  • The report comes a day after Fed Chairman Jerome Powell said the central bank would respond “as appropriate” to risks posed by a global trade war, adding to expectations after dovish remarks from St. Louis Federal Reserve President James Bullard.
  • The World Bank lowered its outlook for global growth, noting that international trade and investment flows dropped faster than expected in the first six months of the year, curtailing economic activity.
  • Among stocks, rose 3.95% after its quarterly revenue and profit beat analysts’ estimates and the company forecast full-year results above expectations.
  • Campbell Soup jumped 6.5%, the most on the S&P index, after the food company raised its full-year profit forecast after better-than-expected quarterly earnings.


Salesforce forecasts full-year results above expectations, shares rise

  • beat analysts’ estimates for quarterly revenue and profit and forecast full-year results above expectations, as customers looking to rein in costs boosted demand for its Sales Cloud product.
  • The company’s total revenue rose 24% to $3.74 billion from $3.01 billion.
  • Revenue from the company’s flagship product, Sales Cloud, rose 11% to $1.1 billion in the first quarter.
  • Salesforce’s net income rose to $392 million in the first quarter, from $344 million a year earlier.
  • The company raised its full-year 2020 adjusted profit forecast to be in the range of $2.88 to $2.90 per share and revenue between $16.10 billion and $16.25 billion. Analysts on average were expecting a profit of $2.66 per share on revenue of $16.12 billion.

Campbell Soup raises profit outlook after quarterly results beat estimates

  • U.S. food company Campbell Soup raised its full-year profit forecast after reporting better-than-expected quarterly earnings, boosted by higher demand for its snack brands, including Pepperidge Farm and Goldfish.
  • Net sales climbed 16% to $2.18 billion, boosted by its acquisition of snacks maker Snyder’s Lance for $4.87 billion last year.
  • Net income was $84 million in the third quarter, compared with a loss of $393 million a year earlier when the company recorded an impairment charge related to its fresh segment.
  • The company now expects full-year adjusted profit between $2.50 and $2.55 per share, compared with prior forecast of $2.45 and $2.53, factoring in the impact of its fresh business divestitures.

GameStop’s dividend halt, revenue miss drag shares down 36%

  • GameStop halted its quarterly dividend after reporting a 13.3% fall in first-quarter revenue that missed analysts’ estimates, hurt by slowing sales of video games and consoles at its stores.
  • Net sales declined to $1.55 billion from $1.79 billion. Analysts on average had expected revenue of $1.64 billion.
  • New hardware sales plunged 35%, with an increase in Switch sales crushed by a decline in Xbox and PlayStation console sales.
  • Same-store sales declined 10.3% from a year earlier; analysts had expected a 7% drop.
  • GameStop’s net income fell to $6.8 million in the quarter, from $28.2 million a year earlier.
  • The company forecast comparable sales for the full-year to fall between 5% and 10%, while analysts were expecting a 4.9% drop in same-store sales.

American Eagle sales beat on strong demand for jeans, Aerie lingerie

  • American Eagle Outfitters beat Wall Street estimates for quarterly same-store sales on Wednesday, helped by growing demand for its jeans and Aerie line of lingerie, sending its shares up more than 7% in trading before the bell.
  • Total net revenue rose 7.7% to $886.3 million, beating analysts’ estimates of $855.6 million.
  • The company’s same-store sales rose 6% in the first quarter, beating analysts’ average estimate of a 3.13% increase.
  • Net income rose to $40.8 million, from $39.9 million a year earlier.

Skyworks Guidance Cut Due to Huawei Ban

  • Skyworks lowered its quarterly earnings and revenue forecast on Tuesday, saying it stopped shipping products to Huawei.
  • Skyworks said that for the fiscal third quarter, which ends this month, the company reduced its revenue forecast by $60 million to a range between $755 million and $775 million.
  • It lowered its earnings-per-share forecast by 16 cents to $1.34.
  • Skyworks said sales to Huawei makeup 12% of the company’s total sales.

Top tech executives will be asked to testify in U.S. probe

  • Leaders of big tech companies will be asked to testify as part of an investigation into whether the companies misuse their massive market power, the head of the U.S. House Judiciary subcommittee leading the probe said on Tuesday.
  • The comments came a day after sources said the U.S. executive branch is gearing up for a probe of Amazon, Apple, Facebook and Google, setting up what could be an unprecedented, wide-ranging investigation of some of the world’s largest companies.
  • The House of Representatives Judiciary Committee opened its own investigation into competition in digital markets on Monday, with both Republicans and Democrats expressing concern about the power exercised by several of the companies.

Developers Sue Apple Over App Store Costs

  • Developers have sued Apple over the costs associated with selling apps on the company’s App Store, accusing the tech business of monopolizing app distribution.
  • The lawsuit claims that the plaintiffs are forced to sell their iOS apps through the App Store because Apple has a monopoly over app distribution.
  • It says the company has charged developers a commission of 30% for nearly 11 years on selling apps and products within the apps. The suit also alleges the company restricts pricing.
  • Android users are able to buy apps outside of the Google Play store.
  • Google receives a 30% cut for apps bought in its store.

Google, Facebook have tight grip on growing U.S. online ad market: report

  • The U.S. internet advertising industry is projected to hit $160 billion by 2023 from $107 billion last year, led by fast-growing categories like mobile video with Google and Facebook firmly controlling the market, consultancy PwC said on Wednesday.
  • The two tech giants commanded nearly 60% of the U.S. internet advertising market in 2018, up 3% from the previous year.
  • U.S. wireless carrier AT&T, despite spending $85 billion for media company Time Warner to transform into a media and advertising firm, has only managed to eke out single digit market share, according to PwC.
  • Amazon has been able to gain the most ground over the past year, though it too only has single-digit market share, PwC said.

Microsoft, Oracle team up on cloud services in jab at Amazon

  • Microsoft and Oracle reached an agreement to make their two cloud computing services work together with high-speed links between their data centers, targeting big business users and uniting against cloud computing leader Amazon Web Services.
  • The two companies said the high-speed link between their data centers would start with facilities in the eastern United States and spread to other regions.
  • They will let joint users log into to services from either company with a single user name and get tech support from either.
  • The move comes as both Oracle and Microsoft are courting large businesses and government customers considering moving computing tasks currently handled in their own data centers to cloud providers.

Oil sinks 3% as US crude stockpiles unexpectedly surge by 6.8 million barrels

  • Oil prices resumed their slide on Wednesday, dragged down after an unexpected gain in U.S. inventories, but losses were capped by a recovery in global equities on hopes of an interest rate cut from the Federal Reserve.
  • U.S. crude inventories rose unexpectedly last week, while gasoline and distillate stockpiles built more than expected, data from the American Petroleum Institute showed on Tuesday.
  • Crude stocks rose by 3.5 million barrels in the week to May 31 to 478 million barrels, compared with analysts’ expectations for a decrease of 849,000 barrels.

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Nonfarm Private Sector Added 27,000 Jobs in May

  • The nonfarm private sector in the U.S. added 27,000 jobs for the month of May, the latest ADP National Employment Report showed, a number that was significantly lower than what economists were expecting.
  • Economists were expecting 173,000 new jobs.
  • Large businesses, or those that have at least 500 employees, added 68,000 new jobs, but those gains were largely wiped out by a decline of 52,000 jobs for small businesses, or those with 49 employees or fewer.
  • This Friday, the U.S. Bureau of Labor Statistics will report the number of nonfarm jobs added in the U.S. in May.
  • Economists are expecting 180,000 new nonfarm jobs and a 3.6% unemployment rate.

U.S. service sector activity picks up in May

  • U.S. services sector activity picked up in May and industries hired more workers, which could ease concerns that the economy was slowing sharply following a recent spate of weak reports.
  • The ISM said its non-manufacturing activity index increased 1.4 points to a reading of 56.9 last month.
  • A reading above 50 indicates expansion in the sector, which accounts for more than two-thirds of U.S. economic activity.

U.S., Mexico Officials Hold Talks on Border Dispute

  • The White House will host talks Wednesday afternoon with a high-level delegation of officials from Mexico, who are making a last-ditch effort to avoid tariffs threatened on roughly $350 billion a year of Mexican imports amid a dispute over border security.
  • Vice President Mike Pence, Secretary of State Mike Pompeo and U.S. Trade Representative Robert Lighthizer will meet Mexico’s delegation, led by its foreign minister Marcelo Ebrard.
  • The Mexican government has responded by sending a high-level delegation to convince the U.S. it is already taking strong steps to reduce the flow of migrants and to try to salvage the U.S.-Mexico-Canada Agreement that the three nations agreed last year.
  • Critics of the tariffs, including those in the administration, have said ratification of the pact would be threatened by the tariffs.

Senate Republicans Threaten to Block Trump on Mexico Tariffs

  • Senate Republicans threatened Tuesday to block the White House’s planned tariffs on Mexico, hours after President Trump signaled, he was prepared to move ahead with the levies barring a last-minute deal over border security.
  • Democrats have roundly opposed Mr. Trump’s border stance and his plan to impose tariffs on Mexico, which are set to start at a 5% rate and ratchet up to 25% by October.
  • His plan has also triggered blowback from many Senate Republicans, who returned from a Memorial Day recess ready to consider their options to stop him, citing executive overreach and possible economic pain for U.S. consumers and businesses.
  • Sen. Rand Paul (R., Ky.) predicted that the Senate would vote on the matter, telling CNN that the opponents of the tariffs could potentially muster enough support to override a Trump veto.

Republican, Democratic senators seek to block Trump Saudi arms sales

  • Republican and Democratic U.S. senators said on Wednesday they would introduce 22 separate joint resolutions seeking to block President Donald Trump’s plan to sidestep congressional review and complete more than $8 billion in military sales to Saudi Arabia, the United Arab Emirates and Jordan.
  • Backers said the introduction of the resolutions was intended to “protect and reaffirm Congress’ role of approving arms sales to foreign governments.”
  • Declaring an emergency because of tensions with Iran, the Trump administration informed congressional committees on May 24 that it was going ahead with 22 military deals worth $8.1 billion, circumventing a long-standing precedent for lawmakers to review major weapons sales.

Farmer sentiment hits its lowest level since before Trump’s election as the China trade war drags on

  • Farmer sentiment plunged in May to its lowest level in nearly three years as the trade war with China escalated and concerns about economic conditions grew, according to a survey released Tuesday.
  • May’s Purdue University/CME Group Ag Economy Barometer declined 14 points from the prior month to a reading of 101, which is the lowest point since October 2016.
  • Farmers have been facing one of the wettest spring seasons in decades as a result of heavy rains and flooding in large sections of the Midwest and Eastern Plains region.
  • Corn and soybean planting paces are the slowest on record since the mid-1990s, according to the U.S. Department of Agriculture.

Biden, Sanders lead Trump in battleground state Michigan poll

  • In an early sign of the potential weakness of U.S. President Donald Trump’s path to reelection, two Democratic presidential primary frontrunners are outshining the incumbent Republican in a poll of Michigan voters released on Wednesday.
  • Only 36% of likely voters in Michigan said they would vote for Trump, the poll showed.
  • The poll also matched Trump against three other presidential hopefuls – Pete Buttigieg, Elizabeth Warren and Kamala Harris.
  • All three also outdid Trump in the poll, although by much smaller margins that Sanders and Biden.

Los Angeles homelessness rises sharply as housing crisis deepens

  • Los Angeles County’s homeless population has swelled by 12% during the past year as a shortage of affordable housing deepens in and around America’s second-largest city, pushing more people into poverty, a study released on Tuesday found.
  • Still, the 12% homelessness rise in Los Angeles County was modest compared with corresponding increases in less populous neighboring counties – up 28% in Ventura, 43% in Orange and 50% in Kern.
  • Homelessness in the city of Los Angeles proper, meanwhile, jumped by 16%, despite a concerted push by local officials to move more people from the streets into permanent housing.
  • Overall, the authority counted nearly 59,000 people sleeping on sidewalks, in makeshift tents, in abandoned vehicles or in shelters and government-subsidized “transitional housing” on any given night in Los Angeles County.
  • The number in the city of Los Angeles alone, including the notorious downtown Skid Row district that ranks among the greatest concentrations of homeless in the United States, reached 36,300, the study said.

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Global Economy Cools Faster Than Expected as Trade Tensions Rise, World Bank Says

  • The global economy has stumbled sharply in the first half of the year with trade and investment flows between countries falling faster than expected, according to semiannual forecasts released by the World Bank on Tuesday.
  • With nearly half a year of data under its belt, the World Bank lowered its global growth forecast to 2.6% from 2.9% in January—and cut its forecast for growth in trade to 2.6% from 3.6%.
  • The bank’s forecasts since January were downbeat across a broad range of countries.
  • More than half of the countries tracked had growth downgrades of 0.1 percentage point or more, with declines for both advanced and emerging economies.
  • Forecasts for the U.S. and China, which already incorporated a sharp slowdown, were unchanged in the latest update.
  • The U.S. is forecast to slow to 2.5% in 2019 from 2.9% in 2018, while China is expected to slow to 6.2% from 6.6%.

Samsung Electronics to cut China phone output as market share sinks

  • Samsung plans to cut production at a smartphone plant in China, as competition from domestic rivals squeezes its share of the world’s biggest smartphone market to less than a paltry 1%.
  • The output reduction at the factory in the southern city of Huizhou comes just six months after Samsung said it would close its only other handset plant in China, in the northeastern city of Tianjin, in a move it said would enhance efficiency.

TSMC expects short-term impact from U.S. ban on China’s Huawei

  • Washington’s move to ban U.S. companies from doing business with China’s Huawei Technologies will have a short-term impact on Taiwan’s TSMC, its chairman said on Wednesday, although he was upbeat on the outlook for this year.
  • TSMC previously said shipments to its main client Huawei were not affected by U.S. action aimed at curbing the telecom equipment maker’s access to American technology, and that it would continue to be a supplier to Huawei.
  • TSMC Chairman Mark Liu said the company’s profit outlook for 2019 remained unchanged, and he was upbeat on a possible recovery in the second half thanks to new smartphone launches and rising demand for 5G telecoms infrastructure.
  • TSMC in January forecast 2019 revenue to grow about 1-3%.

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  • Robert F. Kennedy was shot by an assassin and died the next day. (1968)

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