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  • U.S. stocks extended gains in a broad-based rally on Friday, as a sharp slowdown in May domestic job growth raised hopes of an interest rate cut, while the United States’ decision to delay tariffs on Chinese goods lifted the mood.
  • The U.S. officially granted Chinese exporters two more weeks to get their products into the country before increasing tariffs, according to a U.S. government notice posted online.
  • A Labor Department report showed nonfarm payrolls increased by 75,000 jobs last month, much smaller than the 185,000 economists had forecast, suggesting the loss of momentum in economic activity was spreading to the labor market.
  • Investors who trade futures have placed a 79% chance of a rate cut at the Fed’s July meeting, and a 95% chance of at least one cut by the meeting after that in September, according to CME Group.
  • The interest-rate sensitive banking index dropped 0.47%, while the broader financial sector fell 0.04%, and was the only S&P sector trading lower.
  • Beyond Meat shares surged 25.9% after the maker of plant-based burgers and sausages said it expects to more than double its revenue and report breakeven EBITDA this year.


Beyond Meat sees sales more than doubling in 2019, shares jump 26%

  • Beyond Meat, a maker of plant-based burgers and sausages, said it expects to more than double its revenue and report breakeven EBITDA this year, sending the its shares up over 26%.
  • First-quarter net revenue came in at $40.2 million, an increase of 215%, from last year’s $12.8 million.
  • Analysts had expected revenue of $38.9 million.
  • Net loss widened to $6.6 million in the quarter, from $5.7 million a year earlier. Analysts anticipated a $6.7 million net loss.
  • The company said it expects to record revenue of $210 million in 2019, with break-even earnings, before interest, tax, depreciation and amortization (EBITDA).
  • Analysts forecast full-year sales of $205 million, and a loss, before interest, tax, depreciation and amortization, of $10.28 million.

Elliott Management to Buy Barnes & Noble in $475 Million Deal

  • Barnes & Noble agreed to be bought by hedge fund Elliott Management in an all-cash deal valued at about $475 million, the companies said Friday.
  • Elliott said it will pay $6.50 a share for each Barnes & Noble share held.
  • The deal represents a 9.1% premium to the bookseller’s Thursday closing price and about a 42% premium to Wednesday’s closing price of $4.59, before the Journal’s report.

Facebook Revamps Defense Team as Antitrust Scrutiny Increases

  • Facebook is revamping the leadership of its defense teams in the face of what is potentially the most serious antitrust threat to the company in its 15-year history.
  • Over the past year, Facebook has appointed new heads of its legal and communications teams, as well as hiring Nick Clegg, Britain’s former deputy prime minister, to lead its lobbying and public-relations efforts overall.
  • Several executives in those departments who had been at Facebook for a decade or longer have recently stepped down.
  • The turnover means those key units’ leaders weren’t with Facebook at the time of the Cambridge Analytica episode—involving a user-data leakage of intense interest to regulators—or when the company snared Instagram and WhatsApp, acquisitions that punctuated its dominant position in social networking.
  • Facebook continues to build its defense team, seeking in particular people with experience dealing with the government. The effort includes trying to fill a new job titled “senior public policy manager, competition.”

New Huawei Phones Won’t Come With Facebook, Instagram or WhatsApp

  • Facebook will no longer allow its apps to come pre-installed on mobile devices made by Huawei following the U.S. blacklisting of the Chinese tech giant, dealing another blow to its booming smartphone business.
  • Facebook, which owns popular apps including Instagram and WhatsApp, is one of many software makers whose apps come pre-installed on Huawei phones, which outsold Apple’s iPhone globally in the first quarter of this year.
  • Huawei will no longer be able to pre-install those apps, according to a person familiar with the matter, though those who already own Huawei phones will continue to have access to Facebook apps and updates.
  • It isn’t clear if Huawei phone users without the apps will be able to download the apps and updates themselves.

Google flags U.S. national security risks from Huawei ban: FT

  • Google has warned if the U.S. administration moves ahead with sweeping ban on Huawei, it risks compromising national security, the Financial Times reported on Thursday.
  • While the sanctions are expected to hurt Huawei in the short term, industry experts say it could force the company – and other Chinese firms – to become self-reliant by developing more home-grown technologies, hurting the dominance of American companies such as Google in the longer term.
  • Google in particular is concerned it would not be allowed to update its Android operating system on Huawei smartphones, which it argues would prompt the Chinese company to develop its own version of the software.
  • The search giant argued a Huawei-modified version of Android would be more susceptible to being hacked, the newspaper said.

Google’s Stadia Streaming Service Faces Skepticism

  • Google plans to charge $10 a month to access mostly older videogames through its new cloud-streaming service, an offering that analysts expect to face difficulty in standing out among seasoned rivals.
  • The service will be available in 14 countries in November, including the U.S., Google said Thursday, but it didn’t provide a specific launch date for the service.
  • Stadia users who play the service on a TV will need a Google Chromecast Ultra streaming device.
  • Google said it is offering an introductory package with that item and a game controller, plus three months of access to Stadia and the shooter game “Destiny 2” for $129.
  • Users will also be able to buy games without subscribing to Stadia’s monthly service, Google said.

AT&T Eyes $16- to $17-a-Month Streaming Service in Strategy Shift

  • AT&T’s WarnerMedia is discussing plans to package HBO, sister channel Cinemax and its vast Warner Bros. TV and movie library into a streaming service costing between $16 and $17 a month, a strategy aimed at keeping the media giant competitive against lower-priced offerings in a crowded field.
  • The new streaming service, which will debut in “betaform later this year, essentially includes all of WarnerMedia’s entertainment offerings and will feature its own new, original content.
  • Yet it will cost barely more than the company’s stand-alone HBO Now streaming service, which sells for $14.99 a month.
  • Cinemax, meanwhile, can cost as much as $12.99 a month for cable customers.
  • According to a survey conducted last year by Magid Research, people who abandon traditional cable-TV packages said they are willing to pay for about six different services that cost a total of about $38.

Spirit cuts workweek in wake of 737 MAX groundings: union

  • Boeing’s largest supplier Spirit AeroSystems is reducing its workweek to 32 hours in response to the 737 MAX groundings, a labor union for the aerospace industry said on Friday.
  • The changes will be effective June 21 for all salaried, management and executive employees working on commercial airplane programs, the Society of Professional Engineering Employees in Aerospace said.
  • Spirit said employees have the flexibility to take either Monday or Friday off during the workweek, according to the union.

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U.S. Added 75,000 Jobs in May as Hiring Slowed

  • Employers tapped the brakes on hiring in May, signaling companies are taking a more cautious approach at a time of slowing global growth and trade tensions and adding to other signs of slowing U.S. economic growth this spring.
  • The economy added 75,000 jobs in May, marking the 104th straight month of gains, but pulling back from two months of stronger hiring, the Labor Department said Friday.
  • The jobless rate held steady at 3.6%, a near-50-year low.
  • Wages were up 3.1% on the year in May, and appear to be stabilizing around 3% rather than accelerating in a tight labor market.
  • The labor-force participation rate, or the share of Americans holding or seeking a job, clocked in at 62.8% in May, unchanged from the previous month.
  • The broadest measure of unemployment (U6)—which includes those too discouraged to look for work, plus Americans stuck in part-time jobs but who want to work full-time—fell to 7.1% in May from 7.3% the prior month.
  • The share of adults aged 25 to 54 in the labor force—which filters out many Americans who are still in school or who have retired—fell to 82.1% in May, the Labor Department said Friday.
  • That was the lowest rate since September 2018.

Household Net Worth Rose 4.5% in First Quarter

  • American households more than made back their losses from last year’s stock market turbulence in the first quarter of 2019, according to a Federal Reserve report released Thursday.
  • Household net worth grew 4.5% in the first quarter to $108.6 trillion, the largest quarterly gain since the fourth quarter of 2004, offsetting a 3.7% decline in the fourth quarter of 2018.
  • Much of that gain comes from a 12.4% increase in the value of household holdings of corporate equities due to the recovery in the stock market, while equity in real estate owned by households rose 1.7%.
  • Growth in household debt slowed to a seasonally adjusted annual rate of 2.3% in the first quarter from 2.8% in the fourth quarter of 2018 and 3.5% in the third quarter.
  • Business debt grew at a seasonally adjusted annual rate of 6.6% in the first quarter up from a 3.9% rate in the previous quarter.

U.S. April wholesale inventories revised slightly higher

  • U.S. wholesale inventories rose a bit more than initially thought in April, with stocks in the automotive sector increasing by the most in eight months.
  • The Commerce Department said on Friday wholesale inventories rebounded 0.8%, instead of increasing 0.7% as reported.
  • They rose 7.6% on a year-on-year basis in April.
  • In April, wholesale auto inventories increased 3.8%, the largest gain since August 2018, after falling 0.3% in the prior month.
  • Sales at wholesalers dropped 0.4% in April after gaining 1.8% in March.
  • At April’s sales pace it would take wholesalers 1.34 months to clear shelves, up from 1.33 months in March.

U.S.-Mexico Border Negotiations Continue Amid Signs of Progress

  • Negotiators for the U.S. and Mexico prepared for a third day of meetings Friday to build on the new momentum in their border-security talks, as the clock wound down ahead of President Trump’s threatened sanctions on Mexican imports next week.
  • The U.S. has pressed Mexico to designate itself a “safe third country,” which would mean people entering Mexico from Guatemala, Honduras and El Salvador wouldn’t be eligible to claim asylum in the U.S.
  • Absent a deal, President Trump has threatened to impose escalating tariffs on Mexico.
  • Mexican President Andrés Manuel López Obrador said he remains optimistic an agreement can be reached before Monday.
  • He declined to say whether his government is willing to accept becoming a safe third country, saying that was up to Foreign Minister Marcelo Ebrard and his negotiating team.

Auto Makers Push Trump for Fuel-Economy Compromise With California

  • A group of the world’s largest auto makers is urging President Trump to work out a compromise with California on new fuel-economy regulations, warning that his plan to ease standards could provoke a standoff that would hamstring future planning.
  • In a letter signed by GM, Ford, Toyota and more than a dozen other car companies, the auto makers urge Mr. Trump to find a middle ground between a stricter, Obama-era plan that would ratchet up fuel-economy standards through 2026 and a plan put forth by his administration last year that would essentially freeze regulations at their 2020 levels.
  • Regulators in California have already criticized the White House’s proposal, and the state has federal authority to set its own fuel-economy standards.

U.S. gives Chinese imports more time before more tariffs hit

  • U.S. officials officially granted Chinese exporters two more weeks to get their products into the United States before increasing tariffs on those items, according to a U.S. government notice posted online on Friday
  • In the official notice published in the Federal Register on Friday, USTR said it was extending the deadline from June 1 to June 15 for certain products to enter the United States without being subject to an additional 25% tariff.

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Analysts trim Asian firms’ 2019 profit outlook on trade woes

  • Analysts are downgrading their full-year profit forecasts for Asian companies, Refinitiv data showed, as fears mounted over the impact of a festering Sino-U.S. trade war on regional firms.
  • In the last 30 days, analysts slashed their outlook for Asian companies’ earnings by about 2%, the data showed.
  • At least 55% of Asian companies have missed their net profit forecasts in the first quarter, Refinitiv data showed.
  • South Korea and Malaysian firms were the worst performers with over 60% earnings miss, according to the data.

Europe’s 5G to cost $62 billion more if Chinese vendors banned: telcos

  • A ban on buying telecoms equipment from Chinese firms would add about 55 billion euros ($62 billion) to the cost of 5G networks in Europe and delay the technology by about 18 months, according to an industry analysis seen by Reuters.
  • The estimate is part of a report by telecoms lobby group GSMA, which represents the interests of 750 mobile operators.
  • The 55-billion-euro estimate reflects the total additional costs implied by a full ban on purchases from Huawei and Chinese peer ZTE for the roll out of 5G networks in Europe.
  • The two Chinese vendors have a combined market share in the European Union of more than 40%.
  • According to the report, a ban would also delay the deployment by 18 months of 5G technology, which will be used in areas ranging from self-driving cars to health and logistics.
  • Nokia said this week it had moved ahead of Huawei in total 5G orders and had seen increased interest in its 5G offering from European countries that have been debating the role of Chinese vendors in their networks.

Toyota speeds up electric vehicle schedule as demand heats up

  • Toyota aims to get half of its global sales from electrified vehicles by 2025, five years ahead of schedule, and will tap Chinese battery makers to meet the accelerated global shift to electricity-powered cars.
  • The change illustrates the breakneck growth in the electric vehicle (EV) market, which is transforming the auto industry, and is also an acknowledgment by Japan’s top car maker that it may not be able to meet demand for batteries on its own.
  • Toyota is now faced with a higher-than-expected demand for cars that use batteries, rather than gasoline, Executive Vice President Shigeki Terashi told a briefing on Friday.
  • Still, EV sales are expected to trail gasoline hybrid vehicle volumes by 2025, with the former expected to be fewer than 1 million vehicles, Terashi added.

Canada Jobless Rate Fell in May to Record Low

  • Employment growth in Canada slowed in May after an extraordinary jobs gain in April, while the jobless rate fell to a record low as the number of people searching for work declined sharply.
  • The Canadian economy added a net 27,700 jobs in May on a seasonally adjusted basis, Statistics Canada said Friday.
  • Market expectations were for an increase of 5,000 jobs
  • The unemployment rate in May declined to a record low 5.4%, from 5.7% in the previous month.
  • Expectations were for the jobless rate to remain unchanged at 5.7% in May.

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  • Louis XIV was crowned king of France. (1654)
  • Homer Plessy was arrested for his refusal to move from a whites-only seat on a train. This led to the Plessy Ferguson Supreme Court decision. (1892)

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