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DAILY MARKET REPORTS

  • Stocks edged higher Thursday after the European Central Bank unveiled a sweeping stimulus package and President Trump said he would delay an increase in tariffs on some Chinese imports.
  • The ECB cut its key deposit rate and said it would begin €20 billion ($22.04 billion) a month of asset purchases, an action commonly known as quantitative easing, starting Nov. 1.
  • It also moved to support banks, which have seen their profits hit by negative interest rates, by insulating some of their holdings from the negative key deposit rate.
  • The Fed is expected to follow the ECB next week in cutting interest rates to cushion the economy from a global slowdown.
  • With trade talks due to be held in Washington next month between the U.S. and China, President Trump postponed new tariffs on $250 billion in goods that were due to take effect on Oct. 1, a conciliatory gesture that could point to easing tensions.
  • Meanwhile, the number of weekly U.S. jobless claims fell more than expected in the latest week.

US FINANCIAL MARKET

Oracle Co-CEO Mark Hurd Taking Medical Leave

  • Oracle said one of its two chief executives, Mark Hurd, will take a medical leave of absence, removing the technology giant’s top executive for sales and strategy at a time of intensifying competition in the business-software market.
  • Oracle reported fiscal first quarter revenue of $9.22 billion, which was roughly flat on an annualized basis.
  • Revenue from cloud services and license support, the company’s largest segment, rose 3% to $6.81 billion.
  • In the latest period, Oracle said its profit fell 6% from a year earlier to $2.13 billion, in line with analysts’ estimates.
  • On a conference call, Oracle executives forecast revenue rising in the current quarter between 1% and 3% from a year earlier, compared with the 2.4% growth expected from analysts.

Kroger’s Sales Rise after Digital Investments

  • Kroger’s quarterly same-store sales and profit beat Wall Street estimates on Thursday as the supermarket chain’s investment to boost its delivery services and online business paid off.
  • The increase to $28.2 billion in sales from $28 billion a year earlier was lower than the gains analysts expected.
  • Sales at supermarkets open for more than a year, excluding the impact of fuel prices, rose 2.2%, its best since the launch of its turnaround plan. Analysts were expecting 1.91% increase.
  • Digital sales grew 31%.
  • Net earnings fell to $297 million in the in the second quarter, from $508 million a year earlier, mainly due to losses stemming from its stake in online grocer Ocado.

AT&T sees weakness in wireless gear unit weighing on third-quarter revenue

  • AT&T said on Wednesday weakness in its wireless equipment unit could weigh on its third-quarter revenue.
  • Low upgrade rates are hurting its wireless equipment revenue, AT&T said.
  • The company also said it expects current-quarter revenue at its WarnerMedia unit to fall by $400 million from a year earlier, mainly due to a strong second half last year at Warner Bros.

Walmart expands ‘unlimited’ grocery delivery as competition heats up

  • Walmart said on Thursday it would expand the roll out of its “unlimitedgrocery delivery service to 1,400 stores across the United States, as competition intensifies among retailers to deliver online orders faster.
  • The retailer’s service gives customers the option to pay a yearly $98 fee, or a monthly $12.95 fee, to get grocery orders.
  • The service will be available in more than 1,600 stores in the U.S. and over 50% of the country by the end of the year.

GE begins divestment of Baker Hughes with $2.7 billion share sale

  • General Electric on Wednesday said it plans to reduce its ownership in oil and gas company Baker Hughes to 38.4% from 50.4% at June-end, and aims to raise $2.7 billion in the process.
  • The U.S. conglomerate, which will lose majority control of Baker Hughes, said it would raise the amount through a public offering of 115 million Baker Hughes Class A shares priced at $21.50 each, and through a private sale of $250 million Class B Baker Hughes shares to the oilfield services provider.
  • General Electric said it expects to continue divesting the remainder of its holding in Baker Hughes over time.

Purdue Pharma reaches tentative opioid settlement with some: sources

  • OxyContin maker Purdue Pharma LP reached a tentative agreement with some plaintiffs to resolve litigation over its alleged role in fueling the U.S. opioid crisis and plans to tussle with states opposing the settlement offer in bankruptcy proceedings as soon as next week, people familiar with the matter said.
  • On Wednesday, lead lawyers representing more than 2,000 cities, counties and other plaintiffs suing Purdue, along with 23 states and three U.S. territories, were on board with an offer from the company and its controlling Sackler family to settle lawsuits in a deal valued at up to $12 billion, the people said.
  • More than a dozen other states remain opposed or uncommitted to the deal, setting the stage for a legal battle over Purdue’s efforts to contain the litigation in bankruptcy court, they said.

Uber Vows to Fight California Legislation on Gig Economy

  • California lawmakers passed landmark employment legislation that challenges the business model of “gig-economy” companies such as ride-hailing giants Uber Technologies and Lyft.
  • The legislation, which intends to force companies to reclassify certain contract workers as employees, is considered a serious threat to Uber and Lyft, already losing billions of dollars a year combined, as their business models have relied on flexible labor and minimal worker costs.
  • Both ride-hailing companies have relied on drivers who earn wages based on the rides they complete versus the hours they work, and who have been responsible for their own car expenses.
  • Under the bill, known as Assembly Bill 5, the drivers could be entitled to benefits that include a minimum hourly wage and workers’ compensation.

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US ECONOMY & POLITICS

U.S. Consumer Prices Rose 0.1% in August

  • U.S. consumer prices rose slowly in August, held down by weak energy prices that masked a broader firming in price pressures.
  • The consumer-price index (CPI), which measures what Americans pay for items from fresh whole milk to lawn-care services, rose a seasonally adjusted 0.1% in August from a month earlier, matching economists’ expectations.
  • Core consumer prices, which exclude the volatile categories of food and energy, increased 0.3% from the previous month.
  • From a year earlier, consumer prices increased 1.7% in August and core consumer prices climbed 2.4%, the fastest annual pace since July 2018 when core prices also rose 2.4%.

Weekly Jobless Claims Fall

  • Data on Thursday showed the number of Americans filing applications for unemployment benefits dropped to a five-month low last week suggesting the labor market remains healthy, which should continue to underpin consumer spending.
  • The Labor Department said initial claims for state unemployment benefits declined 15,000 to a seasonally adjusted 204,000 for the week ended Sept. 7, the lowest level since April.
  • Economists had forecast claims slipping to 215,00 in the latest week.
  • The number of people already collecting unemployment benefits, known as continuing claims, dipped by 4,000 to 1.67 million.

Trump to Delay Tariffs on China by Two Weeks

  • President Trump said the U.S. will delay by two weeks a planned increase in tariffs on some Chinese imports, a move that could ease chilled relations between the two nations ahead of planned trade talks in Washington next month.
  • Mr. Trump said on Twitter Wednesday that the U.S. will delay a tariff increase that was to go into effect on roughly $250 billion in goods on Oct. 1.
  • He termed the delay a goodwill gesture made at the request of Chinese Vice Premier Liu He, as Oct. 1 marks the 70th anniversary of the founding of the People’s Republic of China.
  • The planned tariff increases were to cover largely nonconsumer items—materials businesses use to produce goods—with the levy going from 25% to 30%.

China Seeks to Narrow Trade Talks with U.S. in Bid to Break Deadlock

  • China is looking to narrow the scope of its negotiations with the U.S. to only trade matters, putting thornier national-security issues on a separate track in a bid to break deadlocked talks with the U.S.
  • Chinese officials are hoping that such an approach would help both sides resolve some immediate issues and offer a path out of the impasse, according to people familiar with the plan.
  • In preparation for a new round of talks scheduled to take place in Washington early next month, Chinese negotiators are making plans to boost purchases of U.S. agricultural products, give American companies greater access to China’s market and bolster intellectual-property protections, these people said.
  • In Washington, Treasury Secretary Steven Mnuchin said Thursday he was cautiously optimistic the two sides could make meaningful progress.

Top U.S. trade official submits USMCA ideas to Democrats: lawmakers

  • The Trump administration on Wednesday sent U.S. House of Representatives Democrats its latest proposals for addressing legislators’ concerns about the new U.S.-Mexico-Canada trade deal, lawmakers and congressional sources said.
  • Democrats are reviewing the proposals, a spokeswoman for the House Ways and Means Committee said, without providing any details.
  • The long-awaited response from U.S. Trade Representative Robert Lighthizer sets the stage for weeks of intense negotiations before a congressional vote on the agreement that will replace the North American Free Trade Agreement.

House Panel Approves Procedures for Trump Impeachment Probe

  • The House Judiciary Committee formalized procedures for its investigation into whether to recommend articles of impeachment against President Trump, ratcheting up a probe that has lasted all year.
  • The resolution, passed by the committee early Thursday, authorizes Chairman Jerrold Nadler of New York to designate certain hearings as part of the continuing investigation.
  • It also gives committee lawyers the chance to question witnesses for an hour after all lawmakers have asked questions, and gives the White House counsel a chance to respond in writing to information presented to the panel.

Mnuchin Says U.S. Looking Closely at Issuing 50-Year Bond

  • The Treasury Department is “very seriously considering” issuing a 50-year Treasury bond next year, Treasury Secretary Steven Mnuchin said Thursday, as the Trump administration looks to take greater advantage of low interest rates to slow soaring borrowing costs.
  • The Treasury said last month it was once again exploring the possibility of issuing debt with maturities beyond 30 years, after considering and then dropping the idea in 2017.
  • Mr. Mnuchin said he thinks it would be good thing to expand the U.S. government’s borrowing capabilities.

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EUROPE & WORLD

ECB Launches Major Stimulus Package, Cuts Key Rate

  • The European Central Bank cut its key interest rate and launched a sweeping package of bond purchases Thursday that lays the ground work for what is likely to be a long period of ultraloose monetary policy, jolting European financial markets and triggering an immediate response from President Trump.
  • In a statement, the ECB said it would cut its key interest rate by 0.1 percentage point, to minus 0.5%.
  • It will start buying €20 billion ($22 billion) a month of eurozone debt, restarting a so-called quantitative easing program that it only phased out last December.
  • The new QE program is expected to “run for as long as necessary,” and only to end shortly before the bank starts raising interest rates, the ECB said.

Huawei’s device business earned 11 billion yuan in first half of 2019: filing

  • Huawei Technologies’ device business, comprising mainly smartphones, made a 11 billion yuan ($1.55 billion) profit in the first half of this year – as much as it earned in all of 2018 – a rare regulatory filing showed.
  • Huawei said last month that, while the impact of the curbs was weaker than previously expected, it would still push the smartphone unit’s revenue lower by about $10 billion this year.
  • The company had so far disclosed annual profit figures for the entire company and the filing provide a rare window into the growing profit contribution from Huawei’s consumer business.
  • Huawei previously said smartphone shipments in the first half of the year jumped 24% jump to 118 million units, as demand surged from patriotic buyers amid rising rhetoric in local media that Huawei was being treated unfairly by the United States.

As trade talks loom, Chinese firms look into buying U.S. farm goods

  • Chinese companies have started to inquire about prices for U.S. agricultural goods purchases, Beijing said on Thursday, in a further sign of potential de-escalation in the bitter and protracted trade war between the world’s two largest economies.
  • Possible purchases of U.S. farm goods included pork and soybeans, Chinese Commerce Ministry spokesman Gao Feng said, both of which are still subject to hefty Chinese duties.
  • Despite tariffs of 62% in place since last year, U.S. exports of pork to China jumped 51% in the first seven months of 2019 over last year to 240,000 tonnes, according to the U.S. Meat Export Federation.

U.K. Government Outlines ‘Worst-Case Scenario’ for No-Deal Brexit

  • The British government described potential shortages of fuel and medicines, long traffic jams at ports and rising food prices in a report outlining its “reasonable worst-case scenario” if the U.K. left the European Union without a deal to smooth its exit.
  • The report, which the government was compelled to publish on Wednesday after opposition lawmakers voted for its release in Parliament, paints a bleak picture of fuel shortages in London and worries over access to medicines caught up in a traffic snarl at ports in France as customs and other checks are implemented for the first time in more than four decades.
  • Much of the predicted chaos stems from a huge traffic jam at ports on either side of the English Channel that would build up from day one, when the flow of trucks would drop by as much as 60%.

UK says to decide on Huawei soon but China must play by rules

  • Britain will make a decision soon about whether to allow Huawei equipment to be used in its 5G networks but China must play by the rules if it gets access to Western markets, Defense Secretary Ben Wallace said.
  • Asked when a decision would be made by the United Kingdom on Huawei, Wallace said on Wednesday: “The government will come to its position soon. We will get to a decision pretty soon.
  • He added: “We will not allow anything to compromise our sensitive networks in the UK but our technical advice is that there are places we can go to mitigate any security risk.

Yahoo Japan Takes on Amazon, Rakuten with $3.7 Billion Deal

  • A billionaire entrepreneur’s midlife crisis helped SoftBank affiliate Yahoo Japan strike the biggest deal in its history and lift its e-commerce business against rivals such as Amazon.com.
  • That shift will accelerate with Yahoo Japan’s $3.7 billion plan to take a 50.1% stake in Japanese online fashion retailer Zozo Inc.
  • Zozo founder Yusaku Maezawa, who is selling most of his 36.8% stake to Japan Yahoo and resigned as chief executive on Thursday, said he wanted to leave the company he built and focus on personal ambitions including traveling into space—twice.
  • With Zozo in its stable, Yahoo Japan hopes to attract younger fashion-conscious consumers in competition with Amazon, whose Japan unit had sales of $13.8 billion last year, and homegrown rival Rakuten.

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TODAY in HISTORY

  • Henry Hudson began his exploration of the Hudson River. (1609)
  • Future President John F. Kennedy married Jacqueline (1953)

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