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WALL STREET DROPS AS TECH STOCKS, NIKE WEIGH

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US FINANCIAL MARKET | US ECONOMY & POLITICS
 EUROPE & WORLD | TODAY IN HISTORY

DAILY MARKET REPORTS

  • U.S. stocks tumbled on Tuesday as a drop-in heavyweights Facebook and Nike added to worries over trade negotiations between the United States and other major economies.
  • Nike was the top drag on the Dow, as calls for a boycott of the sportswear giant gained traction on social media after it chose Colin Kaepernick as a face for adverts marking the 30th anniversary of its “Just Do It” slogan.
  • Investors are cautious as a fresh round of U.S tariffs on $200 billion worth of Chinese goods are expected to take effect after a public comment period ends on Sept. 5.
  • Talks between Canada and the United States to renegotiate the North American Free Trade Agreement (NAFTA) ended on a sour note on Friday, but officials set plans to resume their talks on Wednesday.
  • Despite the looming tariff threats and trade uncertainties, the major U.S. indexes closed higher in August, with the Nasdaq posting its largest monthly gain since January.
  • The energy sector gained as oil prices rose after the evacuation of two Gulf of Mexico oil platforms ahead of the approach of Gordon, which is expected to come ashore as a hurricane.

US FINANCIAL MARKET

(Uday Sampath KumarEmma Thomasson)

  • Shares of Nike fell on Tuesday as calls for a boycott of the sportswear giant gained traction on social media following its choice of Colin Kaepernick as a face for the 30th anniversary of its “Just Do It” slogan.
  • Over 30,000 people were tweeting with the hashtag #NikeBoycott on Tuesday morning U.S. eastern time, making it among the top trending topics on Twitter.
  • Still, there were a large number of other users who took positively to Nike taking a stand on social issues.
  • Athletes including LeBron James and Kevin Durant showed support, posting images of the ad on their Instagram profiles.
  • Retail industry analysts were divided on whether the heat around the campaign would be a commercial positive for Nike or ultimately alienate and lose customers.

U.S. SUV sales surge again in August

  • Ford reported a nearly 4.1% rise in U.S. auto sales in August, helped by high demand for sport utility vehicles and pickup trucks.
  • The automaker sold 218,504 vehicles in August, compared with 209,897 a year earlier when two hurricanes depressed sales.
  • Sales of Ford brand SUVs grew 20.1% to 78,809 vehicles. Pickup truck sales rose 5.7%.
  • Rival Toyota earlier reported a 2% fall in U.S. auto sales, hurt by a slump in passenger cars, although it said SUV sales rose 8.9%.
  • The No.3 U.S. automaker said it sold 223,055 vehicles in August, compared with 227,625, a year earlier.

Ford to cut car models as part of restructuring

  • Ford plans to drop production of some of its automobile models as part of a planned restructuring announced earlier this year.
  • The British newspaper reported that Ford planned to end production of Mondeo, Galaxy and S-Max models and focus on more lucrative sport utility vehicles.
  • Ford also plans to cut its number of dealerships.
  • Analysts at Morgan Stanley said Ford could lay off as many as 12% of its more than 200,000 workers and that the layoffs would largely be concentrated in Europe.

Lockheed to make wings for F-16 jet in India with partner Tata

  • Lockheed Martin will build wings for its F-16 combat plane in India with its local partner, Tata Advanced Systems Limited.
  • Lockheed is bidding for a contract – estimated at more than $15 billion – to supply the Indian air force with 114 combat planes, which must be all manufactured locally under Prime Minister Narendra Modi’s flagship Make in India program.
  • Boeing has pitched its F/A-18 Super Hornet for the Indian contract as well as Sweden’s Saab with its Gripen fighter. France’s Rafale, the Eurofighter Typhoon, and Russian aircraft are also in the fray.
  • Lockheed’s announcement came just days ahead of top-level talks between the United States and India aimed at expanding defense ties.

Alcoa braces for alumina strike vote in Western Australia

  • A vote by striking workers at Alcoa’s giant west Australian operations will close on Thursday, with the union anticipating a strong “no” vote that could prolong the four-week-old strike.
  • Around 1,500 workers at three alumina refineries and two bauxite mines in Western Australia state walked out on Aug. 8 over a new workplace agreement that they say does not offer sufficient job security.
  • The refineries are around 9.3 million tons of capacity or 8% of the world supply of alumina, used to make aluminum.

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US ECONOMY & POLITIC

(Lucia Mutikani)

  • U.S. construction spending barely rose in July as increases in homebuilding and investment in public projects were overshadowed by a sharp drop in private nonresidential outlays.
  • The Commerce Department said that construction spending edged up 0.1%. Economists had forecast construction spending increasing 0.5% in July.
  • Data for June was revised up to show construction outlays declining 0.8% instead of the previously reported 1.1% drop.
  • Spending on private residential projects rebounded 0.6% in July following two straight months of declines.

Trump to Test High-Pressure Negotiating Style as U.S.-Canada Nafta Talks Resume

  • President Trump this week will put his bare-knuckles negotiating the strategy to a new test, as his aides resume efforts to persuade Canada of his vision for overhauling the North American Free Trade Agreement, the pact he has long branded a disaster.
  • Mr. Trump set the stage for talks slated to reopen on Wednesday with holiday-weekend tweets threatening Ottawa with expulsion from the bloc, which includes Mexico and attacking two U.S. groups whose support he needs to enact a new Nafta.
  • Nearly 75% of Canadian exports are U.S. bound, or the equivalent of 20% of the country’s economic output. The Canadian economy has the most to lose from Nafta’s demise.

Democrats protest as U.S. high court nominee’s chaotic hearing opens

  • The Senate confirmation hearing for Brett Kavanaugh, President Donald Trump’s U.S. Supreme Court pick, opened in chaos on Tuesday, as Democrats complained about Republicans blocking access to documents stemming from the nominee’s previous work in the White House under President George W. Bush.
  • Moments after the Judiciary Committee’s Republican chairman Chuck Grassley opened the hearing, Democrats protested the withholding of the documents and asked to have the proceedings adjourned.
  • Democrats have demanded in vain to see documents relating to the three years Kavanaugh spent as staff secretary to Bush, a job that involved managing paper flow from advisers to the president.
  • Republicans also have released some but not all of the existing documents concerning Kavanaugh’s two years as a lawyer in the White House Counsel’s Office prior to becoming staff secretary.
  • Senator Dianne Feinstein, the committee’s senior Democrat, said 93% of documents from Kavanaugh’s White House tenure had not been given to senators and 96% not released to the public.

Trump warns Syria not to ‘recklessly attack’ Idlib province

  • U.S. President Donald Trump on Monday warned Syrian President Bashar al-Assad and his allies Iran and Russia not to “recklessly attack” Syria’s rebel-held Idlib province, warning that hundreds of thousands of people could be killed.
  • The northern province and surrounding areas are the last major enclave held by insurgents fighting Assad, who has been backed by both Russian and Iranian forces in Syria’s seven-year-old civil war.
  • They are home to some three million civilians.
  • Iran called for militants to be “cleaned out” of Idlib, as it prepared for talks with Syria and Russia about confronting the last major enclave held by rebels opposed to Assad.
  • Nikki Haley, the U.S. ambassador to the United Nations, wrote on Twitter late on Monday: “All eyes on the actions of Assad, Russia, and Iran in Idlib. #NoChemicalWeapons”

Self-Driving Technology Threatens Nearly 300,000 Trucking Jobs, Report Says

  • Autonomous driving could replace some 294,000 long-distance truck drivers over the next 25 years, a lighter impact than some have predicted but one that could still significantly reshape freight-industry employment, according to a new research paper.
  • The changes would likely eliminate some of the best-paid positions held by the more than 2 million truck drivers in the U.S.
  • Using autonomous vehicles for long-haul cargo runs, the most likely near-term scenario would also spur increased demand for delivery and local trucking jobs, which tend to be lower-paid and often have poor working conditions, the report said.
  • Trucking companies are interested in the technology because it could help them address high driver turnover and safety regulations that limit truckers’ hours behind the wheel.

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EUROPE & WORLD

(Nick Kostov)

  • Shares in WPP dropped Tuesday as the ad industry’s upheaval took a heavy toll on the world’s largest advertising company, underscoring the challenges facing new chief executive Mark Read.
  • First-half revenue fell 2.1% to £7.49 billion from £7.65 billion a year before due to unfavorable exchange rates.
  • Like-for-like net sales—a figure closely watched by analysts to measure the company’s underlying performance—dropped 3.3% in North America over the quarter.
  • WPP said pretax profit rose 8.6% to £846.5 million ($1.1 billion) for the first half, compared with £779.2 million a year earlier.
  • Net profit increased 13% to £672.4 million.

Lego Tempers Ambitions for a New, Slow-Growth Era

  • Sales of Lego dinosaurs and a Bugatti sports car helped the Danish toymaker stabilize revenue in the first half of this year after a drop in 2017 for the first time in more than a decade.
  • Overall, consumer sales grew 1% during the half, while revenue was flat in constant currencies and fell 5% in Danish crowns to 14.3 billion crowns ($2.23 billion).
  • Excluding foreign-exchange moves, revenue was flat for the first six months of the year, compared with a 6% currency-adjusted fall a year earlier.
  • Net profit fell 10% to 3 billion kroner ($472 million).

With drugs pipeline in focus, Bayer considers job cuts

  • Bayer is considering job cuts and outsourcing as part of a wide-ranging review of drug research and development that will last until at least November.
  • The savings that Bayer – the inventor of aspirin and maker of Yasmin birth control pills – could make as part of the overhaul would give it financial wiggle room as it competes with larger rivals to buy the right to promising treatments from biotech firms.
  • The review will look at whether drug testing services should be outsourced to cheaper contractors.

Electric Mercedes opens German assault on Tesla

  • Mercedes-Benz is set to unveil its much-anticipated electric SUV on Tuesday, marking the start of a German onslaught against Tesla’s dominance of the fast-growing market for premium battery cars.
  • The Mercedes EQC – whose launch program in Stockholm features yoga in a direct appeal to the Millennials who have flocked to Tesla – is the first production model under the carmaker’s electric EQ sub-brand.
  • The new Mercedes, due to reach its first customers next year, will be priced close to the fuel-burning GLC to compete in the same bracket as Tesla’s $49,000 Model 3, helped by its hotter-selling SUV form.

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TODAY in HISTORY

  • President Harry S. Truman inaugurated transcontinental television service in the U.S. when AT&T carried his address to the opening session of the Japanese Peace Convention in San Francisco. (1951)

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