Business
Trump isn’t killing the bull market. Here’s why
Increasingly more enterprise leaders and Wall Road strategists are expressing their worries about what President Donald Trump’s protectionist insurance policies and unpredictable nature would possibly do to the markets and economic system.
However everyone knows that motion speaks louder than phrases. What traders are literally doing is in stark distinction to what persons are saying. The Dow, S&P 500 and Nasdaq hit all-time highs once more on Friday.
And the Russell 2000, an index of small firm shares that are inclined to do most of their enterprise within the U.S., is now only a few factors away from the all-time excessive it hit final December within the wake of Trump market euphoria.
What’s extra, the VIX (VIX), a measure of volatility referred to as Wall Road’s concern gauge, is down practically 25% this 12 months as nicely. If traders had been actually frightened of Trump, the VIX ought to be a lot greater.
And CNNMoney’s personal Worry & Greed Index, which appears on the VIX and 6 different measures of investor sentiment, is displaying indicators of Greed and isn’t removed from Excessive Greed ranges.
In fact, Trump nonetheless can not seem to assist himself from tweeting about issues that, let’s be sincere, will not do something to assist the economic system — though Nordstrom traders are richer regardless of Trump attacking them for dumping his daughter Ivanka’s model.
However to present credit score the place it is due, it appears like the principle cause that shares have taken off once more these days is as a result of Trump has promised to unveil a “phenomenal” tax plan quickly.
Associated: Uncommon streak for U.S. shares: Lengthy stretch and not using a 1% dive
Trump additionally pledged once more to take a position extra on infrastructure when he met with airline CEOs on Thursday.
That is what the market desires to listen to.
“We nonetheless count on fiscal stimulus, decrease taxes and fewer regulation,” mentioned Matt Lockridge, supervisor of the Westwood Small Cap Worth Fund. “The timing is the massive query, however it’s coming.”
Lockridge thinks that many firms that generate a majority of their revenues from America ought to profit if Trump stimulus winds up kicking the economic system into a better gear.
He likes shares in quite a lot of industries, similar to movie show proprietor Masco (MAS), snack meals agency J & J (JJSF) and aerospace gear firm Kaman (KAMN).
One other cash supervisor mentioned he is additionally nonetheless bullish on small U.S. shares that might get a carry from Trump insurance policies.
Associated: Wall Road has highly effective seat at Trump’s desk
Barry James, president and CEO of James Funding Analysis, mentioned he purchased the iShares Russell 2000 ETF (IWM) the day after the election as a result of he is assured Trump’s stimulus plan will enhance progress for U.S small companies.
“When Trump mentioned America first, I actually assume that is what he means,” James mentioned, including that he thinks Web telephone service Vonage (VG), rent-to-own retailer Aaron’s (AAN) and low cost chain Massive Heaps (BIG) might all thrive if Trump’s proposals undergo.
However there’s one more reason why the U.S. markets are close to all-time highs. Regardless of the entire uncertainty in Washington, the U.S. continues to be seen as a paragon of relative stability in comparison with different elements of the world.
Europe’s economic system continues to be a giant wild card because of Brexit, the rise of populism in France resulting in worries a couple of so-called Frexit and extra worries about the issue that by no means appears to go away — Greece’s debt woes.
Japan’s economic system stays stagnant as nicely. We’re speaking about greater than only a misplaced decade now. It is plural. And China’s economic system is slowing down too.
Bond fund supervisor Invoice Gross has usually joked that America is like what Johnny Money and Kris Kristofferson sang about in “Sunday Morning Coming Down” — the “cleanest soiled shirt.”
To that finish, analysts at bond score agency Fitch wrote in a report Friday that “components of President Trump’s financial agenda could be constructive for progress,” however added that “the current steadiness of dangers factors towards a much less benign international consequence.”
In fact, there are two sides to that coin. Trump’s bombast might come again to hang-out him.
Associated: Oreo make is fearful about rise of populism
His continued penchant for reprimanding firms that he disagrees with on Twitter might dent investor confidence.
And whereas his proposed journey ban on immigrants from seven largely Muslim international locations has been overturned by the U.S. courtroom system for now, the president has vowed to battle for its reinstatement.
Even when he loses that battle, it is nonetheless clear that Trump is critical on turning extra inward, with plans for tariffs and border-adjusted taxes that might ignite commerce wars with Mexico, China and Japan. That might harm large U.S. multinational corporations and result in job cuts.
However traders nonetheless appear to consider/hope that the deserves of Trump’s pro-growth stimulus plans and tax cuts will outweigh the impression of isolationism. Let’s hope they’re proper.
Traders could also be holding their noses, closing their eyes and stuffing cotton of their ears to drown out the president. However they’re nonetheless shopping for shares.
CNNMoney (New York) First printed February 10, 2017: 11:55 AM ET
Business
Albertsons to pay $3.9 million over allegations it overcharged, lied about weight of groceries
Grocery titan Albertsons will pay $3.9 million to resolve a civil law enforcement complaint alleging that it ripped off customers at hundreds of its Vons, Safeway and Albertsons stores in California, authorities said Thursday.
According to the complaint, groceries sold by Albertsons Cos. — including produce, meats, baked goods and other items — had less product in the package than indicated on the label. The company also is accused of charging customers prices higher than its lowest advertised price.
“False advertising preys on consumers, who are already facing rising costs, and unfairly disadvantages companies that play by the rules,” L.A. County Dist. Atty. George Gascón said. “This kind of corporate conduct is especially egregious when it comes to essential groceries, as Californians rely on accurate advertised prices to budget food for their families.”
The case was filed in Marin County Superior Court in partnership with the consumer protection units of the district attorney’s offices of Los Angeles, Marin, Alameda, Sonoma, Riverside, San Diego and Ventura counties.
The settlement will be divided among the seven counties and used to support future enforcement of consumer protection laws, according to the Marin County district attorney’s office. None of the money will be paid back to consumers.
The fine comes just over a year after the same company was ordered to pay $3.5 million for selling expired over-the-counter drug products. The company is also currently fighting a federal antitrust lawsuit that seeks to block its planned merger with grocery giant Kroger Inc.
Albertsons Cos. operates 589 Albertsons, Safeway and Vons stores in California. The company did not admit wrongdoing. It cooperated with the investigation and has taken steps to correct the violations, according to the L.A. County district atttorney’s office.
In a statement on the settlement, the company said it takes the matter seriously and is committed to ensuring its customers can shop with confidence.
“We have taken steps to ensure our price accuracy guarantee is more visible to customers by posting signage at multiple locations at the front of our stores,” the company stated. “We have conducted additional comprehensive training for associates to reinforce the importance of price accuracy and customer transparency. Additionally, we have enhanced price tracking systems to better ensure real-time accuracy at stores.”
Prosecutors in the lawsuit alleged that the company failed to implement a price accuracy policy ordered by a court in 2014.
The policy requires that customers who are overcharged for an item either receive the item for free or receive a $5 gift card, depending on which option is worth more. It is designed to encourage customers to immediately report false advertising.
Under the judgment reached Thursday, the grocery giant must implement this policy and ensure staff are properly trained to place accurate weight labels on products.
The serial overcharging was discovered through inspections by Marin County’s Department of Agriculture, Division of Weights and Measures and its counterparts across the state.
“We could not have achieved this result without the outstanding work of our Weights and Measures inspectors as well as vigilant consumers,” said Deputy Dist. Atty. Andres Perez, who prosecuted the case for Marin County.
For the next three years, Albertsons Cos. is required to hire an independent auditor to ensure it is complying with the terms of the judgment.
Business
Disney faces class action lawsuit over employee data breach
Walt Disney Co. has been hit with a class action lawsuit accusing the Burbank-based entertainment giant of negligence, breach of implied contract and other misconduct in connection with a massive data breach that occurred earlier this year.
Plaintiff Scott Margel submitted the complaint on Thursday in Los Angeles County Superior Court against Disney and Disney California Adventure. The 32-page document also accuses the company of violating privacy laws by not doing enough to prevent or notify victims of the extent of the leak.
The class members, estimated to number in the thousands, are described in the complaint as individuals who gave “highly sensitive personal information” to Disney in connection with their employment at the company — information that was allegedly compromised in the breach.
Representatives of Disney did not immediately respond Friday to The Times’ request for comment.
The lawsuit cites an article published in September by the Wall Street Journal, which reported that a hacking group known as NullBulge publicly released data spanning more than 18,800 spreadsheets, 13,000 PDFs and 44 million internal messages sent via the workplace communication platform Slack.
According to the Journal, the compromised Slack messages contained sensitive information belonging to Disney cruise employees, including passport numbers, visa details, birthplaces and physical addresses; at least one spreadsheet listed the names, addresses and phone numbers of some Disney Cruise Line passengers. The publication later reported that Disney planned to stop using Slack after the breach.
The plaintiff and class members “remain, even today, in the dark regarding which particular data was stolen, the particular malware used, and what steps are being taken, if any, to secure their [personal information] going forward,” the complaint reads.
The plaintiff and class members “are, thus, left to speculate as to where their [data] ended up, who has used it and for what potentially nefarious purposes.”
In July, NullBulge said that it had leaked roughly 1.2 terabytes of Disney data in rebuke of the company’s treatment of artists, “approach to AI” and “pretty blatant disregard for the consumer.” The self-proclaimed hacktivists told CNN that they were able to penetrate Disney’s system thanks to “a man with Slack access who had cookies.”
A Disney spokesperson said in a statement at the time that the company was “investigating this matter.”
Margel is demanding that Disney take steps to reinforce its security system and educate class members about the risks associated with the breach. The plaintiff is also seeking unspecified damages and a jury trial.
Business
Rivian cuts production forecast, citing supply chain issue; its stock dips
Electric vehicle maker Rivian saw its shares dip Friday after the Irvine-based company cut its production targets amid ongoing supply issues.
Citing a shortage of a component used to build its electric pickups, sport utility vehicles and vans, Rivian said production could drop as much as 18% this year at its lone U.S. assembly plant.
Rivian did not specify the part that is in low supply but noted that the shortage has become more acute in recent weeks.
The company now forecasts its full-year production will be between 47,000 and 49,000 vehicles, down from an earlier estimate of 57,000. During the most recent quarter, Rivian produced 13,157 vehicles and delivered 10,018, falling short of analysts’ expectations.
Shares of Rivian ended the day at $10.44, down 3.2%. The company’s stock has been battered since the start of the year, falling by more than 50% amid underwhelming financial reports. In the second quarter this year, Rivian posted a net loss of $1.46 billion compared with a loss of about $1.12 billion during the same period a year earlier. The company is scheduled to announce its third-quarter earnings next month.
Rivian received a lifeline in June when Volkswagen agreed to a massive investment in the company that is expected to total $5 billion. Rivan has nonetheless continued to struggle in the face of dropping demand for electric vehicles and other supply chain issues that forced the company to pause its production of commercial vans for Amazon.com in August.
Early this year, the automaker announced a 10% cut in its workforce that sent stocks plummeting 25% in one day. The pool of interested wealthy buyers who don’t already own an electric vehicle is shrinking, analysts said, while the broader market weighs the advantages and feasibility of switching to electric.
The average car buyer is not likely to be able to afford a Rivian vehicle, and concerns remain about charging infrastructure and the distance vehicles can drive on a single charge. Rivian’s R1T electric pickup truck starts at around $70,000; its R1S SUV starts at nearly $75,000.
With sleek design and outdoorsy features, Rivian’s vehicles garnered much attention from analysts and attracted investors such as Amazon and Volkswagen. The company exceeded expectations during its initial public offering of stock in 2021, ending its first day of trading valued at nearly $88 billion.
The production issues announced this week could get in the way of Rivian’s goal of achieving positive gross profits by the fourth quarter of this year. According to analysts, the company’s gross margins are expected to remain in negative territory in the final three months of 2024.
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