DAILY MARKET REPORTS
- Wall Street’s main indexes rose on Tuesday as fears of faster interest rate hikes eased after a tepid U.S. consumer prices data and investors shrugged off news of U.S. Secretary of State Rex Tillerson’s ouster.
- U.S. President Donald Trump fired Tillerson on Tuesday after a series of public rifts over issues including North Korea and Russia, replacing his chief diplomat with loyalist CIA Director Mike Pompeo.
- The consumer-price index, which measures what Americans pay for everything from shampoo to hotel stays, rose 0.2% in February.
- In corporate news, shares of chip maker Qualcomm fell 2.8% after President Trump on Monday blocked Broadcom’s $117 billion hostile takeover bid on national security grounds.
- General Electric was among the top decliners, falling 4% after JPMorgan cut its price target on the stock to $11 from $14, saying the industrial conglomerate was not a “safety stock” in a volatile market.
US FINANCIAL MARKET
Trump Takes Qualcomm Off the Market
- President Donald Trump late Monday ordered Singapore-based Broadcom to call off its unsolicited attempt to acquire Qualcomm for $117 billion in cash and stock.
- The order cited “credible evidence” that Broadcom “might take action that threatens to impair the national security of the United States” if it came into control of Qualcomm.
- This came just a week after the Committee on Foreign Investment in the United States, or CFIUS, decided to look into the matter, citing Qualcomm’s role in developing 5G technology—in which the Trump Administration has taken a keen interest.
- The order effectively ends a four-month saga that saw Qualcomm, the world’s fourth-largest chip company by annual revenue, targeted by a smaller company with greater momentum.
Apple to Acquire Digital-Magazine-Subscription Service Texture
- Apple said it will acquire Next Issue Media and its digital-magazine-subscription service Texture, a product developed by top magazine companies that bundles together some 200 subscriptions into one monthly service.
- Terms of the deal weren’t disclosed. Next Issue Media and Texture are owned by Condé Nast, Meredith, Hearst, Rogers Communications and KKR.
- The acquisition comes as Apple looks to beef up its services business, which includes music streaming and mobile payments.
- Apple has set a goal of increasing total revenue from services to more than $40 billion by 2020.
- Texture offers a monthly, $10 subscription to magazines such as Vanity Fair, Good Housekeeping, Time, Sports Illustrated, and National Geographic.
GE’s Top Executives Miss Out on Cash Bonuses for the First Time
- General Electric didn’t pay a cash bonus last year to its top executives at corporate headquarters, which it said was the first time in the company’s 125-year history.
- The company said that its board withheld the 2017 bonuses and canceled some 2015 equity awards that executives would have partly received. It cited the conglomerate’s struggles last year, which forced GE to slash its dividend, cut thousands of jobs and overhaul its leadership.
- The only senior executive to receive a cash bonus for 2017 was David Joyce, the head of GE Aviation, which makes jet engines.
- Mr. Joyce received a cash bonus of $1.4 million and total compensation of $5.2 million in 2017, less than half of what he received the year before.
Apple Music hits 38 million paid subscribers
- Apple’s streaming music service now has 38 million paid subscribers, up from 36 million in February.
- Apple’s number compares to 71 million premium subscribers at the end of 2017 at industry leader Spotify.
- Amazon Music Unlimited has 16 million paying subscribers, and Pandora Media has 5.48 million total subscribers.
- Google does not release paid subscriber numbers for its service, Google Play Music.
Amazon recalls 260,000 portable power banks for fire hazard
- Amazon is recalling 260,000 AmazonBasics portable power banks that can “overheat and ignite,” according to a release by the Consumer Product Safety Commission.
- Amazon has received more than 50 reports of the power banks overheating in the U.S., causing chemical burns and property damage.
- Amazon is contacting everyone who purchased one of the affected devices.
US ECONOMY & POLITIC
U.S. Consumer Prices Rose 0.2% in February, Up 2.2% on Year
- U.S. consumer prices rose moderately in February, although at a slightly slower pace than in the prior month.
- The consumer-price index, which measures what Americans pay for everything from shampoo to hotel stays, rose 0.2% in February after rising a seasonally adjusted 0.5% in January.
- Excluding the volatile food and energy categories, so-called core prices rose 0.2%, compared with 0.3% in January.
- In the year to February, overall prices rose 2.2%, while core prices were up 1.8% on the year.
Rex Tillerson Is Out as Secretary of State; Donald Trump Taps Mike Pompeo
- President Donald Trump said Tuesday that Rex Tillerson is out as secretary of state, after months of speculation over his fate, and that Central Intelligence Agency Director Mike Pompeo would be nominated to be the U.S.’s top diplomat.
- Mr. Trump said in a morning tweet that Gina Haspel, currently deputy director of the CIA, would succeed Mr. Pompeo as the spy agency’s chief.
- Both nominations are subject to Senate confirmation.
U.S. Federal Budget Gap Widens as Fiscal Income Declines
- U.S. tax revenue declined in February and government spending rose, as the share of wages withheld for taxes dipped as a result of the tax cut passed by Congress late last year.
- Government revenue declined by 9%, or $16 billion, in February compared with the same period a year earlier, due to a decrease in the amount withheld from workers’ paychecks and a jump in refunds for individuals and corporations
- Meanwhile, the budget deficit reached $706 billion, 3.6% of gross domestic product, over the 12 months ended February, compared with $583 billion, or 3.1% of GDP, for the same period one year earlier.
- The deficit, or the difference between the amount of money the government spent and what it took in, stood at $391 billion in October through February. That was $40 billion, or 12%, higher compared with the same period a year earlier.
Lawrence Kudlow Being Considered for Top White House Economic Post
- Top White House officials have reached out to gauge Lawrence Kudlow’s interest in becoming President Donald Trump’s top economic adviser, and the CNBC commentator was expected to interview for the position as soon as this week, people familiar with the discussion said.
- Despite his misgivings over Mr. Trump’s trade policy, Mr. Kudlow is interested in the job, according to people who have spoken to him about the role.
- Mr. Kudlow’s elevation would be a surprising comeback for an early campaign backer who wasn’t given a top job after Mr. Trump’s election.
Republicans on House Panel Find No Collusion Between Russia and Trump Campaign
- Republican lawmakers on the House Intelligence Committee have drafted a report saying the panel’s yearlong probe into Russian election interference found no evidence that Moscow colluded with Donald Trump’s campaign or that the Kremlin favored Mr. Trump in the 2016 race.
- The panel found “bad judgment” and some “inappropriate meetings” between members of the Trump campaign and Russians, but no sign that those amounted to collusion.
- In the 150-page draft report, Republicans wrote that Russia carried out an “active measures” campaign in the 2016 election and was likely to do so again in future elections, but said they saw no sign that Moscow was seeking to help Mr. Trump.
- The findings of the Republican report, which will not be released for months, are at odds with parts of a January 2017 report by U.S. intelligence, which concluded that Russian President Vladimir Putin had ordered a campaign to influence the outcome of the 2016 U.S. presidential election in Mr. Trump’s favor.
Republicans struggle to salvage congressional seat in Pennsylvania
- The White House and the National Republican Congressional Committee have worked overtime in the lead-up to Tuesday’s election, where Saccone, 66, and Lamb, 33, are running neck-and-neck for a congressional seat vacated by Rep. Tim Murphy.
- A final Gravis poll released days before the election found Saccone leading Lamb by 3 percentage points (45 to 42 percent), putting him within the 3.3 percent margin of error.
- The result of the special election could be potentially significant, given the district is an area Trump carried by 20 points less than a year and a half ago.
- The victor on Tuesday will remain in office until November, when Murphy’s term would normally have ended.
- They will then have to run again in a newly configured district due to the state supreme court’s recent decision to reverse a Republican gerrymander and redraw the congressional map.
US shale oil will surge to nearly 7 million barrels a day in April: Dept. of Energy forecast
- S. shale oil output will hit nearly 7 million barrels a day next month, the Energy Information Administration forecasts.
- The Energy Information Administration sees drillers in the seven shale regions pumping 6.95 million barrels a day in April, up more than 25 percent from a year ago.
- Output from seven shale regions will grow by 131,000 barrels a day, driven by gains in the Permian Basin in Texas and New Mexico.
- The Permian Basin in Texas and New Mexico will see production jump by 80,000 barrels a day.
- The Eagle Ford shale, also in Texas, is seen kicking in 23,000 barrels a day towards the regions’ growth. Meanwhile, North Dakota’s Bakken shale and the Niobrara region in Colorado and surrounding states will each grow output by 12,000 barrels a day.
EUROPE & WORLD
Volkswagen assigns 20 billion euros in battery orders, speeds EV push
- Volkswagen has selected partners to provide battery cells and related technology worth around 20 billion euros ($24.7 billion) for electric-vehicle (EV) projects in Europe and China, pushing ahead with a shift to zero-emission cars.
- Although grappling with billions of euros in costs and fines for its diesel emissions scandal, VW has pledged to spend 34 billion euros on EVs, autonomous driving and new mobility services by the end of 2022, one of the most ambitious programs in the industry.
- Europe’s largest automaker said on Tuesday it will expand EV production to 16 factories worldwide through the end of 2022.
- VW has a goal to launch 80 new electric cars across the group by 2025 and offer an electric version of each of its 300 group models by 2030.
China conditionally approves Bayer’s acquisition of Monsanto
- Bayer secured conditional approval from China’s commerce ministry for its planned acquisition of the world No. 1 seed company Monsanto, chalking up a victory in the onerous struggle to win over watchdogs across the globe.
- The ministry also ordered the German drug and crop chemicals maker to spin off some businesses globally, including vegetable seeds, corn, soybean, cotton, and herbicide.
- Bayer has already pledged to sell certain seed and herbicide assets for 5.9 billion euros ($7.27 billion) to BASF to address EU regulatory concerns and has separately offered to sell its vegetable seeds business to BASF.
- Bayer has secured the go-ahead from Brazilian regulators, while people familiar with the matter told Reuters two weeks ago that Bayer was in the frame to win conditional antitrust approval from the European Union for the $62.5 billion deal.
- Bayer said at the time that the U.S. review was not as far advanced as EU’s, but it was confident it would make progress there over the next few weeks.
Starbucks signs licensing agreement with Brazil private equity firm
- Sao Paulo private equity firm SouthRock Capital has signed an agreement with Starbucks that gives it the right to develop and operate branches of the Seattle-based chain in Brazil, the companies said late on Monday.
- With the agreement, the value of which was not disclosed, all of Starbucks’ retail operations in Latin America are now wholly licensed rather than directly managed.
- Starbucks now has 113 stores across the populous states of Sao Paulo and Rio de Janeiro.
TODAY in HISTORY
- Cambridge College was renamed Harvard University. (1639)
- “Uncle Sam” cartoon appeared for the first time in N.Y. Lantern weekly. (1852)
- The Senate began President Andrew Johnson’s impeachment (1868)
- Clyde W. Tombaugh announced the discovery of the planet Pluto. (1930)
- The Encyclopedia Britannica discontinued its print edition after 244 years. (2012)
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