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U.S. chipmaker Micron Technology Inc gave on Tuesday quarterly sales and profit forecasts well below Wall Street estimates, citing a market glut of memory chips as consumer and business demand for phones and computers is weakening.


A very cautious optimism remains among Asian companies in the fourth quarter as they wait to see whether there will be any breakthrough in a trade dispute between the United States and China, a Thomson Reuters/INSEAD survey showed.


Asian share markets played second string to bonds on Wednesday as a spectacular fall in the price of oil spurred speculation the U.S. Federal Reserve might be done with tightening after its policy meeting later in the session.


U.S. oil prices rose on Wednesday to claw back part of their more than 5 percent losses from the previous session, with worries about oversupply and a slowing global economy keeping markets under pressure.


SoftBank Corp shares slumped more than 10 percent on debut, as investor appetite for Japan's biggest ever IPO was hurt by a recent service outage at the telecoms operator and worries over its exposure to Chinese telecoms gear maker Huawei.


National Australia Bank shareholders delivered an unprecedented protest vote against the lender's executive remuneration plans on Wednesday, the latest display of investor disquiet over poor governance in the country's financial sector.


Bankrupt U.S. retailer Sears Holdings Corp will take a charge of about $443 million arising from store closures, a regulatory filing showed on Tuesday.


Oil prices tumbled more than 5 percent on Tuesday in heavy trade due to fears of oversupply and deteriorating demand, extending a selloff that has taken major crude benchmarks down more than 30 percent from an October peak.


The Boring Company, Elon Musk's underground transit venture, planned an unveiling of its first tunnel on Tuesday, two years after the billionaire entrepreneur complained about Los Angeles traffic and vowed to "just start digging" as a remedy.


FedEx Corp on Tuesday slashed its 2019 forecast after Europe's economy weakened and the U.S. trade row exacerbated a slowdown in China, sending shares in the package delivery company tumbling more than 6 percent after the closing bell.


Japanese group Softbank, known for investing in future technology, has debuted a $23.5bn share sale of its telecom unit.


Britain risks driving banks overseas if current high levels of taxation on the industry are maintained after Brexit, a bank lobby group said on Wednesday.


FILE PHOTO: A combination photo shows Yahoo logo in Rolle, Switzerland (top) in 2012 and a Verizon sign at a retail store in San Diego, California, U.S. In 2016. REUTERS/File Photos/

  • Oath is changing its name to Verizon Media Group, according to an announcement Tuesday.
  • News of the rebranding was accompanied with what many guessed to be the new logo — the letter "Y."
  • The Y logo appears to have been a gaffe that immersed the rebranding effort in confusion.

Verizon announced Tuesday that Oath, the business unit comprising Yahoo and AOL, will be rebranded as Verizon Media Group starting January 8.

verizon media group y logo

But the brand's name change wasn't what necessarily caught the attention of those who viewed the announcement. Instead, people were puzzled by the graphic at the top of the announcement — a purple box with the letter "Y."

It was not clear whether the graphic was supposed to be the new logo for the rebranded business. Although the purple and white Y is very likely related to Yahoo (which uses a similar looking purple Y in its logo), Verizon's use of the Y seemed incongruous with the new Verizon branding. 

And Twitter users didn't waste any time in roasting the company.

Verizon did not immediately respond to Business Insider's inquiry seeking clarification about the "Y" logo.

But later on Tuesday, the announcement had been updated. Gone was the "Y" logo. In its place was a box bearing the names of various Verizon Media Group owned brands, such as Yahoo!, Yahoo! Mail, Tumblr, Aol, and HuffPost.

Verizon

News of Oath's rebranding comes a week after Verizon said in a Securities and Exchange Commission filing it expected to write down the value of Oath by $4.6 billion. The write-down was due to competitive pressures in the digital ad business, Verizon said.

Business Insider first broke the news in April 2017 that the combined unit of AOL and Yahoo would be named "Oath." The new division was created following Verizon's acquisition of Yahoo for about $4.8 billion in cash.

Read more: AOL and Yahoo plan to call themselves by a new name after the Verizon deal closes: Oath

Verizon paid about $9 billion to acquire AOL and Verizon. The integration of the two companies as Oath never achieved the benefits Verizon hoped for, the company said in its SEC filing.

SEE ALSO: Russia's disinformation campaign wasn't just on Facebook and Twitter. Here are all the social media platforms Russian trolls weaponized during the 2016 US elections

Join the conversation about this story »

NOW WATCH: We tested out $30 tiny spy cameras from Amazon by spying on our co-workers



fedex employee

  • FedEx released its 2019 Q2 earnings report today.
  • FedEx won't achieve its operating income goals by fiscal 2020, the company said today. 
  • It's also going to start offering buyouts to eligible employees along with other cost-cutting measures.
  • Executives attributed the "weakened" business to economic slowdowns in Europe and Asia.

FedEx Express' goal of achieving an operating income of $1.5 billion by fiscal 2020 won't be achieved, the company said in its earnings report on Tuesday.

The Memphis, Tennessee-based company also dropped its 2019 earnings guidance to $15.50 to $16.60 per share. Previously, the company forecasted $17.20 to $17.80 a share. In after-hours trading, FedEx shares dropped by 6%. 

"Global trade has slowed in recent months and leading indicators point to ongoing deceleration in global trade near-term," said Alan Graf, FedEx executive vice president and chief financial officer, in the report. "These trends, coupled with the change in service mix at FedEx Express, are negatively impacting the segment's financial results."

Read more: A fiasco of tariffs, the holiday season, and a truck-driver shortage may make December the most expensive month ever for moving freight

In a call to investors on Tuesday, FedEx executives highlighted economic troubles in Europe as a key reason for the company's lowered expectations. Express package volume has been lower than expected in the region.

Graf said, because of that, FedEx will cut costs and "focus on increasing efficiency across the organization."

While executives underlined FedEx's "record-setting holiday season" in the US, American employees may see some of the effects of that cost-cutting. FedEx will offer "a voluntary buyout program" to its US employees that's expected to save the company $225 million to $275 million. 

Other initiatives include limiting hiring, reducing discretionary spending, and reducing international network capacity. 

These mediocre earnings come after the December 10 resignation of David Cunningham, previously the head of FedEx Express. Cunningham left the role after just two years, while his predecessor led the air freight division for 17 years. The sudden departure concerned investors and analysts, who called it "out of character."

FedEx CEO Fred Smith praised Cunningham's 30-year tenure at FedEx in the investor call on Tuesday, calling the departure a retirement.

SEE ALSO: MORGAN STANLEY: Monthly truck orders are starting to 'unwind' for the first time in years

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NOW WATCH: Craig Jackson of Barrett-Jackson Auction Company has one of the world's most expensive private garages — take a look inside



donald trump

  • Tariffs are costing US firms $6 billion a month, a sudden surge because of President Donald Trump's trade war.
  • According to data from Bespoke Investment Group, tariff costs as a percentage of the US GDP have doubled in the past few months.
  • Tariffs as a percentage of total imports have also soared to historic levels.
  • While the costs are still small, the sudden jump is another issue for US companies to handle.

President Donald Trump's trade war is nearing its nine-month mark, and according to new data, US companies are starting to pay the price.

The US Treasury confirmed in recent data that American importers paid about $6 billion in custom duties during the month of October, double the amount during the same month a year ago. The sudden increase in tariff payments is largely a function of the Trump administration's tariffs on Chinese goods, steel, and aluminum.

One chart from Bespoke Investment Group laid out the significance of this sudden increase in tariffs in the context of the broader US economy and historical norms.

Read more: US companies forked over a record amount in tariffs in October — $6.2 billion! — because of Trump's trade war

  • "On a 3-month average basis, September to November saw customs duties collected at a pace of 30 basis points (o.3%) of GDP," Bespoke said.
  • "Historically (since this data series begins in 1998) that number typically runs between 15 and 20 basis points (0.15% to 0.2%) of GDP, so relative to the size of the economy import tariffs are nearly twice their historic range."

Screen Shot 2018 12 18 at 1.05.44 PM

In addition to tariff costs growing compared to the US economy, the value of tariffs as a percentage of total imports is also on the rise:

  • According to Bespoke, tariff costs were equal to 2.3% of the total value of goods imported into the US from September to November.
  • That compares with a historical average of 1.5% over the past 20 years.

But while the numbers have risen dramatically in the past few months, it's still a relatively small problem in context for companies at this point.

"In other words, the tax rate on imports has risen very sharply, but it’s still very small relative to, for example, sales taxes in most states," Bespoke said.

Read more: Trump's trade war could cost every middle-class American family $453 and could eliminate 292,000 US jobs

But in a time when cost pressures from rising wages and slowly rising interest rates are already putting a squeeze on US businesses, the added cost of tariffs represents another problem for these firms to manage.

That could get worse if the US and China fail to reach an agreement on a longer-term trade deal by a March 1 deadline. At that point, tariffs on $200 billion worth of Chinese goods would increase to 25%, and Trump could start the process to impose tariffs on the rest of Chinese goods not caught up in the trade war.

A possible tariff on imported cars and trucks, another longtime threat of Trump's, also remains in the mix.

SEE ALSO: Trump is losing the trade war with China based on his favorite report card, and it's probably going to keep getting worse

Join the conversation about this story »

NOW WATCH: Anthony Scaramucci claims Trump isn't a nationalist: 'He likes saying that because it irks these intellectual elitists'



The benchmark S&P 500 stock index ended little changed in a choppy trading session on Tuesday as the possibility of a partial U.S. government shutdown raised investor jitters ahead of a highly anticipated meeting of the Federal Reserve.


Johnson & Johnson on Monday scrambled to contain fallout from a Reuters report that the healthcare conglomerate knew for decades that cancer-causing asbestos lurked in its Baby Powder, taking out full-page newspaper ads defending its product and practices, and readying its chief executive for his first television interview since investors erased tens of billions of dollars from the company’s market value.


Lockheed Martin Corp has been awarded a $585 million U.S. defense contract for a Homeland Defense Radar in Hawaii, the Pentagon said on Tuesday.


US bank’s global head of forex prime brokerage is out after currency debacle


Trump tells reporters ‘too early to say’ if deal can be reached before Friday deadline


Canada Marijuana

  • The Royal Bank of Canada's investment banking arm is moving into the marijuana industry. 
  • "We're going to be selective in our approach, frankly, but within the bank we've established a policy that we're comfortable with," RBC Capital Markets head Doug McGregor told Bloomberg in a Tuesday interview.
  • RBC joins the Bank of Montreal in initiating coverage and actively pursuing deals in the marijuana industry. 

One of Canada's largest banks is moving into marijuana dealmaking. 

The Royal Bank of Canada's investment banking arm will begin advising marijuana companies on takeovers and stock sales, encroaching on territory that has recently been dominated by smaller investment banks like Canaccord Genuity.

"Under certain circumstances with certain customers, we'll participate," RBC Capital Markets head Doug McGregor told Bloomberg in a Tuesday interview. "We're going to be selective in our approach, frankly, but within the bank we've established a policy that we're comfortable with."

RBC also announced in December that it would begin research coverage of the cannabis sector. 

Read more: Big law firms are building out specialized pot practices to chase down a red-hot market for weed deals

RBC Capital Markets joins the Bank of Montreal in both initiating coverage of the cannabis sector and actively pursuing deals. The Canadian banks are competing for a slice of an industry that BMO estimates could hit $194 billion globally. 

In recent years, small and middle-market investment banks like Canaccord and Roth Capital Partners have boosted their business through the thriving market for marijuana companies pursuing reverse mergers to go public on the Canadian Securities Exchange. 

RBC's entrance into the industry is a sign that bigger investment banks, once reticent, are becoming increasingly comfortable with cannabis deals. Marijuana is legal in Canada, though it's illegal at the federal level in the US. 

Read more: Marijuana companies are using a 'backdoor' strategy to tap the public markets — and it's fueling an M&A boom

In August, Goldman Sachs advised Constellation Brands on the beermaker's $4 billion acquisition of a stake in Canadian marijuana producer Canopy Growth.

And in December, Lazard's Canadian arm advised the marijuana producer Cronos Group in a deal that saw Altria pour $1.8 billion into the company

Many of these firms, RBC included, don't want to instigate US regulators by through their involvement in the marijuana industry. 

"We were being careful around cannabis, especially at the start of the year, before some things got clarified with the U.S. authorities," McGregor said.

Perhaps an ode to the bank's Ontario roots, McGregor added: "It’s safety first here." 

Join the conversation about this story »



A federal judge said on Tuesday that he was considering using a court-appointed monitor to make sure CVS Health Corp refrains from fully integrating with insurer Aetna while he examines the companies' settlement with the government.


Search company Yelp and lobby group Consumer Watchdog lost their joint bid to intervene in Google's challenge of a 2.4 billion euro ($2.7 billion) EU antitrust fine after a court said they had no direct interest in the case.


Uber Technologies Inc received approval from Pennsylvania to resume self-driving car testing on public roads this week, state records show, nine months after it suspended the program following a deadly accident in Arizona.


Brent crude tumbles 5.6% and WTI is down 7.3% in volatile trading


U.S. President Donald Trump on Tuesday further sought to pressure the Federal Reserve as the central bank prepared to start its two-day policy meeting, warning the Fed's board not to "make yet another mistake" ahead of an expected interest rate hike.


Global equity markets dipped on Tuesday as nervous investors awaited indications whether the Federal Reserve will be able to raise interest rates much further amid turbulent markets and a weakening outlook for the global economy.


Russia hacker

  • Russia influence on the 2016 presidential election spanned beyond Facebook and Twitter, according to new reports provided to the Senate intelligence committee.
  • The research concluded that the disinformation campaign reached several social media platforms previously unnamed, including Instagram, Vine, and Pinterest.
  • Business Insider has compiled all the social media platforms named in the reports, and the roles that each platform played in the Russian-linked influence operation.

The use of social media to spread political disinformation has been widely acknowledged, but two new reports show that the Russian-linked influence campaign spread way beyond Facebook and Twitter.

The two new reports, conducted for the Senate's intelligence committee, detailed the widespread impact of online propaganda leading up to the 2016 presidential election. Researchers found that the Internet Research Agency, the Russian troll farm behind the disinformation campaign, left few social media platforms untouched.

IRA-linked content was found heavily on popular platforms Instagram and YouTube, and also on smaller platforms like Pinterest, SoundCloud, Vine, and even Pokémon Go.

"The breadth of the attack included games, browser extensions, and music apps created by the IRA and pushed to targeted groups," New Knowledge researchers wrote in their report. "It was designed to exploit societal fractures, blur the lines between reality and fiction, erode our trust in media entities and the information environment, in government, in each other, and in democracy itself."

Here are all the social media platforms identified in the most recent reports on the Russia-linked disinformation campaign:

SEE ALSO: New reports show Russia's political influence campaign on social media targeted black voters — and the NAACP is now calling for a boycott of Facebook and Instagram

Instagram

The breadth of Instagram's role in Russian propaganda was relatively unknown until now. Monday's reports showed just how central Instagram, a Facebook-owned photo-sharing platform, was to the operation: an estimated 116,000 posts from 133 accounts, 20 milion users reached, and 187 million engagements.

"Instagram was a significant front in the IRA’s influence operation, something that Facebook executives appear to have avoided mentioning in Congressional testimony," New Knowledge said in its report.

Researchers found that Instagram engagement actually outperformed Facebook, which it attributed to the photo-sharing service "being more ideal for memetic warfare."

Memes were used often by the accounts, and were recycled and repurposed often. They were used to post conspiracy theories, voter fraud allegations, recruit human assets, and organized public events.

The reports saw an uptick in Instagram activity from the IRA after the 2016 presidential election, which researchers credit as a response to "increased scrutiny" put on Facebook and Twitter.

The New Knowledge report concluded that Instagram would be "a key battleground" platform for propaganda and political influence in the future. 

A Facebook spokesperson issued the following statement to Business Insider:

“As we've said all along, Congress and the intelligence community are best placed to use the information we and others provide to determine the political motivations of actors like the Internet Research Agency. We continue to fully cooperate with officials investigating the IRA's activity on Facebook and Instagram around the 2016 election. We've provided thousands of ads and pieces of content to the Senate Select Committee on Intelligence for review and shared information with the public about what we found. Since then, we've made progress in helping prevent interference on our platforms during elections, strengthened our policies against voter suppression ahead of the 2018 midterms, and funded independent research on the impact of social media on democracy.”



YouTube

The two reports analyzed more than 1,100 YouTube videos, across almost 20 channels, connected to the disinformation campaign. YouTube was one of the platforms that researchers looked into the most and found to be among the most impactful — along with Instagram, Facebook, and Twitter.

The report from Oxford and Graphika found that YouTube videos "were predominantly used to target African Americans." New Knowledge identified 59% of the channels and 96% of the content on YouTube from the IRA was "related to Black Lives Matter & police brutality." 

The New Knowledge report also criticized Google for its comments in 2017 that "these ​channels’ ​videos ​were ​not ​targeted ​to ​the ​U.S. ​or ​to ​any ​particular ​sector ​of ​the ​U.S. population." Researchers say that with the findings, the statement "appears disingenuous now."

Google declined to comment to Business Insider.



Tumblr

From the New Knowledge report: "Tumblr was used to disseminate memes and reblog existing content – particularly those found on Instagram ... There were extensive efforts to target Black communities on Tumblr, particularly youth and urban communities."

Operations that took place on Tumblr were referenced in proceedings during the federal investigation — and indictment — into Russians associated with the disinformation campaign, the report notes.

Tumblr has confirmed its platform was used for "state-sponsored disinformation campaigns," and that Tumblr accounts were used for "cross-pollination" with related Facebook pages and Twitter users. In March 2018, Tumblr started in to post usernames it determined were engaging in propaganda activities. With the latest additions in November, the list is up to 197 names.

Tumblr did not provide additional comment to Business Insider, but did point to a post written in March detailing steps the platform had taken.



See the rest of the story at Business Insider


CEO of MoviePass Mitch Lowe attends 'An Evening with Beverly Luff Linn' Dinner presented by MoviePass on January 20, 2018 in Park City, Utah.

  • Helios and Matheson, the parent company of MoviePass, reached an agreement with its creditors Tuesday to reduce its outstanding debt.
  • The move also will eliminate all of its outstanding convertible notes and replace them with non-convertible notes.
  • By eliminating its convertible notes, the company freed itself up to sell potentially billions of new shares of stock.
  • But the move comes on the same day that the Nasdaq could delist Helios and Matheson's stock.

The parent company of MoviePass, just gave itself some more room to maneuver, at least from a financial perspective.

Helios and Matheson reached an agreement with its creditors that reduces the amount it owes them and frees it up to sell billions of additional shares of its stock.

The company announced Tuesday that it will exchange two sets of convertible notes — debt that could be converted into stock — for new non-convertible ones. As part of that of that agreement, it will reduce the outstanding principal that it owes creditors from $44.5 million to $11.3 million. And the agreement allows the company to pay off the debt early for just half that amount, or about $5.7 million.

"Following consummation of the transactions contemplated by the exchange agreements, the company no longer has any outstanding convertible notes," Helios and Matheson said in a regulatory filing. 

Representatives of the company did not immediately respond to an email seeking comment.

Helios and Matheson's future is in doubt

The reduction of the debt is significant for the company. The company has repeatedly warned investors that there is "substantial doubt" about its ability to continue as a going concern. As of September 30, it had just $4.9 million in cash on hand, while its operations had burned through more than $100 million in cash in the previous quarter. 

But the cancellation of the convertible notes could also prove important for Helios and Matheson. The company has funded its ongoing operational losses from MoviePass' money losing theater ticket subscription service largely by issuing and selling new shares of stock, massively diluting shareholders in the process.

Read this: MoviePass' parent company increased its share count by an incredible 9,000% in less than two weeks — and just after reverse splitting its stock to combat dilution

In recent months, though, its outstanding convertible notes have inhibited it from selling large numbers of new shares. The company has had to keep in reserve a certain number of shares if those notes were redeemed. As the company's stock price declined with its past dilution, the number of shares it had to set aside grew in inverse proportion, so that combined with the number of shares Helios and Matheson already had in circulation, the combined number exceeded the 5 billions shares it was authorized to issue.

In October, the company exchanged convertible notes it issued in June for non-convertible ones, alleviating some pressure on its share count. This move frees it up further still.

The agreement frees it up to sell more shares

Prior to the new agreement with its creditors, Helios and Matheson had 1.7 billion shares in circulation and 2.6 billion in reserve for the convertible notes, employee stock awards, and other purposes, according to documents it filed Tuesday with the Securities and Exchange Commission. With the cancellation of the convertible notes, it will only have to keep of fraction of those 2.6 billion shares in its reserves. 

Unfortunately for the company, the move comes on the same day as it's in danger of being delisted by the Nasdaq. After Helios and Matheson's stock fell below $1 a share in May, the exchange warned the company that it would delist its stock unless it got it back above $1 a share on a consistent basis.

The company has been unable to do that, despite reverse splitting its stock in July. Helios and Matheson cancelled a shareholder vote that would have given it permission to do a second reverse split after encountering widespread investor resistance.

Should the company's stock be delisted, Helios and Matheson could find it harder to sell new shares and raise additional funds. 

SEE ALSO: MoviePass' parent company has boosted its share count by an unbelievable 80,000% since July — but it's run out of room to issue new stock

Join the conversation about this story »

NOW WATCH: Watch BMW's self-driving motorcycle accelerate, turn, and brake to a stop



MUFG

  • Mitsubishi UFJ Financial Group has hired hedge-fund executive John Karabelas to run fixed-income sales in the Americas.
  • Karabelas, a 25-year vet with long stints at Deutsche Bank and BNP Paribas, will join as head of Institutional Investor Sales in the Americas in January.
  • His hire is the latest in a string of senior management changes in the Japanese bank's US credit sales business.

Mitsubishi UFJ Financial Group has hired a hedge-fund executive to run credit sales as it continues to shake up its fixed income business in the US.

John Karabelas, president of the credit hedge-fund Kildonan Castle Asset Management, will join MUFG in January as the head of Institutional Investor Sales in the Americas, a purview including rates, credit, and structured products, a bank spokeswoman confirmed. 

Karabelas is a 25-year industry vet who spent 15 years in credit sales at Deutsche Bank before leaving in 2010 to run North American credit sales at BNP Paribas. He left BNP for Kildonan in 2017. 

He'll report to Bill Mansfield, CEO of MUFG Securities Americas, and Paul Lavelle, global head of Institutional Investor Sales at MUFG.

"MUFG is committed to building the momentum we’ve already established across our institutional investor client base, and John’s depth and breadth of experience will be a natural fit into that plan," Mansfield said in a statement to Business Insider.

MUFG is the largest bank in Japan, and the fifth-largest in the world by assets, but its investment bank is a smaller player in the US market — it focuses primarily on debt and fixed-income and doesn't crack the top-10 on the overall industry league tables, according to data and consulting firm Coalition.

But the bank of late has been quietly overhauling its fixed-income management team, a primary revenue generator in its US operation, as it looks to capture more business in the US market. 

The hiring of Karabelas comes on the heels of a number of senior departures in credit sales a little over a month ago — Thomas Daly, David Nixon, John Cahil, and Tim Cavanaugh left in late October, according to FINRA records. 

The firm additionally hired Dwyer Fleming, formerly an interest rate sales exec in hedge fund sales at Deutsche Bank, earlier this year, FINRA records show

This post has been updated with additional information. 

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NOW WATCH: The legendary economist who predicted the housing crisis says the US will win the trade war



Michael Corbat Brian Moynihan

  • Citigroup is facing $180 million in losses on loans gone sour to an Asian hedge fund, according to Bloomberg.
  • The fund reportedly got battered on foreign-exchange bets that went sideways. 
  • The bank's board is reviewing the issue and has already moved to shake up the unit responsible, and a key executive has left the firm after more than 20 years. 

Citigroup is reportedly staring down losses of as much as $180 million on loans to an Asian hedge fund after the fund's foreign-exchange trades went sideways.

The situation is fluid, but Citi's board is grappling with the substantial losses and is already shaking up the unit responsible, according to a report from Bloomberg. 

Citi's FX prime brokerage unit — which lends to hedge funds — will be pulled from the currency trading division and put instead under its prime finance and securities services division, according to the report.

Sanjay Madgavkar, a more than two-decade veteran of Citigroup who was head of the FX prime brokerage unit, is leaving the firm. He's being replaced by Chris Perkins, currently the head of over-the-counter clearing. 

CFO John Gerspach revealed earlier this month that the bank's markets revenues had taken a hit in the fourth quarter, especially in rates and currencies, amid the market volatility, and that the bank may not hit its 2018 efficiency target.

See also:

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Aphria Vic Neufeld

  • Short seller Andrew Left's firm Citron Research on Tuesday afternoon released a bullish report on Canadian marijuana producer Aphria. 
  • Aphria was recently targeted by short sellers who called three recent Latin America acquisitions the NYSE-listed marijuana producer made "largely worthless." The shorts predicted Aphria's stock would sink to $0. 
  • Citron said Aphria could be a takeover target as big consumer companies, like Diageo, look for ways to play the booming marijuana industry. 

How the tables have turned: famous short seller Andrew Left is going long on a marijuana stock that was recently targeted by short sellers.

Left's firm, Citron Research, on Tuesday afternoon released a bullish report on the Canadian marijuana producer Aphria.

"Expect an $APHA major partnership or total buyout SOON," Citron tweeted on Tuesday, touting the report. 

Citron's report says Aphria's stock, now trading around $5.93, will go north of $8 by year-end. Perhaps more impactful, Citron says Aphria could be an acquisition target for a major consumer packaged goods company — or even another marijuana producer. 

Shares of Aprhia rose 8% on the Ciron report. 

A spokesperson for Aphria couldn't be reached for comment.

Why Aphria could be a prime acquisition target 

Large consumer companies companies are both a) interested in gaining exposure to the booming marijuana industry, and b) see publicly traded Canadian marijuana growers, as the safest way to play, according to Citron's note. 

Canada legalized marijuana federally on October 17, while the US government considers marijuana an illegal, Schedule I drug. That means no large corporations will invest in or acquire any marijuana companies that sell THC-containing products in the US, fearing federal regulators. 

Read more: Big law firms are building out specialized pot practices to chase down a red-hot market for weed deals

Large consumer packaged goods companies are already dabbling in cannabis. 

Constellation Brands — the third largest beer company in the US — in August paid $4 billion in August for a 38% stake of Canopy Growth. Earlier this month Altria — the tobacco maker behind Marlboro — announced its intent to sink $1.8 billion into Cronos Group, a move that most Wall Street analysts cheered as bringing further legitimacy to the nascent marijuana sector. 

Aphria has an existing partnership with Southern Glazer, a spirit and wine distributor, that some bigger alcohol companies could see as a sort of litmus test.

"If one of the larger beverage companies wants to see how cannabis might play out on a global recreational level, this one particular partnership might be worth the value of the whole company," the Citron report said. 

marijuana

Could it be Diageo — or could it be Tilray?

As for who would make a play for Aphria, Citron has some interesting theories. One leading hypothesis: Diageo, the maker of Guinness and Smirnoff, is on the prowl for a cannabis play. A former Diageo exec, Jakob Ripshtein, is now Aphria's president.

Diageo's chairman, Javian Ferran, has also stated he's keeping a close eye on the cannabis industry, per Bloomberg.

Another hypothesis: a larger competitor could scoop up Aphria, in what Citron said would be a "Machiavellian move." 

For Tilray, it could "gain a real business to justify it's overvalued stock price" while removing a competitor from the market, Citron said.

Read more: 'My lips are wet, my mouth is watering to get a piece of that': A war is brewing between US and Canadian marijuana companies to claim a $75 billion market

Or, Aurora — a company that went on a dealmaking tear in 2018 — could buy Aphria outright. Aurora merged with rival firm Medreleaf in a $2.3 billion stock deal in May. Citron said that Aphria is generating similar revenue to Medreleaf prior to the takeover deal. 

Buying Aphria could also give either Tilray or Aurora a better shot at an investment from a major CPG company, Citron said. 

Going long where others are short 

Citron's position comes on the heels of a recent short report from Quintessential Capital Management and Hindenburg Research, which alleged that the marijuana producer is "part of a scheme orchestrated by a network of insiders to divert funds away from shareholders into their own pockets."

The short seller's report centers on three Latin American acquisitions Aphria purchased from Scythian Biosciences — now Sol Global Investments — which the short sellers say are "largely worthless." Aphria shares dropped as much as 30% after QCM's Gabriel Grego presented his position at an investor conference earlier in December, though the stock has since recovered some of its losses.

Read more: Marijuana companies are using a 'backdoor' strategy to tap the public markets — and it's fueling an M&A boom

Grego couldn't be reached for comment prior to publication. 

In response to the short sellers' claims, Aphria contracted John M. Herhalt, an independent board member of Aphria and a former senior partner at KPMG, a Big Four audit firm. 

"While we look forward to the results of the investigation, we find them irrelevant now to the greater story," Citron said. 

Join the conversation about this story »



Suspended infrastructure projects revived as US trade war piles pressure on growth


mark zuckerberg

  • Facebook has changed its policy around location data collection and now makes it impossible for users to avoid being tracked for ads purposes, according to a Gizmodo report on Tuesday
  • “There is no way for people to opt out of using location for ads entirely,” a Facebook spokesperson said told Gizmodo. 
  • Such is a change of policy for Facebook, which said in a blog post back in 2014 that users "will only see ads based on their recent location if location services are enabled on their phone.”
  • Facebook contends that providing relevant ads based on a user's location provides a better experience.

Facebook has changed its policy around location data collection and now makes it impossible for users to avoid being tracked for advertisement purposes, according to a Gizmodo report on Tuesday

A Facebook spokesperson told Gizmodo that the company does not use WiFi data to track locations for ads if a user has "Location Services" turned off, though it does use IP information, and other information like check-ins and the current city on a user's profile, regardless. 

“There is no way for people to opt out of using location for ads entirely,” the Facebook spokesperson said told Gizmodo. 

Aleksandra Korolova — an Assistant Professor of Computer Science at the University of Southern California —confirmed in a report, also published on Tuesday, that is was indeed impossible to avoid being followed by Facebook. 

"The Location Controls provided by Facebook give an illusion of control over the data that informs one’s ad experience, not actual control," Korolova said in her report. 

Facebook wants to provide a 'good service'

Taking away the ability for users to keep their location information private is a change of policy for Facebook, which said in a blog post back in 2014 that "people have control over the recent location information they share with Facebook and will only see ads based on their recent location if location services are enabled on their phone.”

According to Gizmodo, Facebook said it would need to update the out-of-date blog post.

Read more: Facebook's latest privacy scandal: The private photos of millions of users were accidentally shared with 1,500 apps

Facebook contends that providing relevant ads based on a user's location provides a better experience.

The company told Gizmodo that it uses location data to "ensure we are providing people with a good service—from ensuring they see Facebook in the right language, to making sure that they are shown nearby events and ads for businesses that are local to them.”

But in an age when online privacy is becoming an increasing concern, wouldn't complete control over location tracking be the ultimate user experience? 

Facebook did not immediately respond to Business Insider's request for comment. 

SEE ALSO: From Elon Musk to Satya Nadella: Here are the 29 top tech CEOs of 2018, according to employees

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NOW WATCH: We tested out $30 tiny spy cameras from Amazon by spying on our co-workers



Trump’s former national security adviser is told ‘arguably, you sold your country out’


Charles Michel quits over nationalist opposition to UN migration pact


jay clayton

  • The Securities and Exchange Commission said it's soliciting public comment on how to ease burdens associated with corporate financial reports for publicly listed companies. 
  • In August, President Donald Trump suggested shelving the quarterly reporting system.
  • Any potential changes are expected to focus on smaller companies.

The Securities and Exchange Commission wants to know how to make required financial disclosures easier for publicly listed companies, months after President Donald Trump recommended getting rid of quarterly reports.

The regulator said in a press release Tuesday it's seeking public comment on how to reduce burdens associated with earnings releases and quarterly reports. Officials are also studying whether the existing system may foster an overly short-term focus.

"There is an ongoing debate regarding the effects of mandated quarterly reports and the prevalence of optional quarterly guidance," SEC Chairman Jay Clayton said. "Our markets thirst for high-quality, timely information regarding company performance and material corporate events."

The SEC said it planned to solicit public comment on the issue after Trump suggested ditching rules that require listed companies to release financial reports every three months.

"In speaking with some of the world's top business leaders I asked what it is that would make business (jobs) even better in the U.S.," he said in a tweet in August. "'Stop quarterly reporting & go to a six month system,' said one. That would allow greater flexibility & save money. I have asked the SEC to study!"

According to Reuters, changes are expected to focus on smaller public companies, while the current system would hold for larger firms.

The public comment period will be open until March.

SEE ALSO: The Fed's next decision is its most important in recent memory — and the future of the stock market is at stake

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NOW WATCH: The equity chief at $6.3 trillion BlackRock weighs in on the trade war, a possible recession, and offers her best investing advice for a tricky 2019 landscape



yelling broker

  • Tagomi Holdings will begin offering prime brokerage services, a staple of traditional equity markets, to institutional crypto traders.
  • The solution will include best execution, custody and post-trade reporting, among other services, in a complete package.
  • Crypto traders say the move is a positive step towards attracting more Wall Street money into digital assets. 
  • However, small — but important — nuances between cryptocurrencies and traditional assets still exist that make an immediate influx of big fund investors unlikely, say some traders. 

The crypto industry just checked off another box on its to-do list for attracting billions in Wall Street money.

Tagomi Holdings, a startup backed by investors including Peter Thiel, went live this week with its electronic prime brokerage services for cryptocurrency markets.

While prime brokers have long been a staple of traditional equities markets, offering a variety of services throughout the trading life cycle to large funds, they haven't yet existed in the still nascent crypto market. Crypto market experts have said that lack of prime brokerage services are one of the biggest pain-points keeping out mainstream institutional money. 

Tagomi, which has raised $16 million in funding from Thiel's Founders Fund, Collaborative Fund, SV Angel and Joe Lonsdale, among others, offers best execution, settlement, custodian and post-trade reporting services to clients as part of one big package. While others companies in the crypto space have offered some of these services, Tagomi's offering is the first all-encompassing one, market participants said. 

“Most of these clients are looking for better price execution,” said Jennifer Campbell, cofounder and CEO at Tagomi. “It’s folks who have seen, ‘Hey, we have these tools in traditional equity markets and security markets. Where are these set of tools in this space?'”

The question of custody has long been a bugaboo for institutional firms interested in trading digital assets. The same custodian banks commonly found in traditional markets like State Street and BNY Mellon have yet to materialize in cryptocurrency. As part of the solution, Tagomi will partner with and assess the different custody solutions that exist in the space to offer secure transfers to a client's preference.

Read more: Crypto investors are complaining about the same 'biggest pain point,' and fixing it could add billions to the bitcoin market

Greg Tusar, a former Goldman electronic trading head who is now the cofounder and chief technology officer at Tagomi, said the electronic brokerage will eventually look into offering coin lending and margin trading services as those markets become more institutionalized.

“Being able to have an intermediary like Tagomi that incorporates the trading and the custody function together and wraps that up in one complete, end-to-end service is kind of how we see the starting point for prime services in digital assets,” said Tusar in an interview. “Bringing some of the things that have been done in other markets but translating into something that is uniquely crypto, and in some ways is the same but in other ways is very different.”

After seeing incredible growth towards the end of 2017, crypto markets have been hit hard in 2018. Bitcoin, which nearly touched $20,000 at the end of last year, has struggled over the last 12 months, dropping roughly 81% to $3,592 as of Wednesday.

Chris Hehmeyer, CEO at Chicago-based proprietary trading firm Hehmeyer Trading that runs a crypto trading desk, said he's potentially interested in becoming a Tagomi customer once he has more information about pricing. 

If Tagomi's promises are true, "it brings something that others haven’t brought so far," Hehmeyer said. 

Prime brokers like Tagomi will help build trust for large funds who may have been nervous in the past about getting into the crypto space, he added. 

"People like their trusted third party. They like their banks. They like their brokerage companies. They feel comfortable," Hehmeyer said. "These folks, it looks like, are trying to bring trusted third-party services to the digital space, the digital ledger technology area. That should definitely help bring comfort to the fiduciaries of the world, which is the where the institutional money is."

However, offering prime brokerage services won’t necessarily lead to an influx of new institutional money, according to the global head of trading at one crypto trading firm.

While it's a positive step, prime brokerage services aren't the cure-all for easing big investors' worries about wading into the crypto waters, he said. 

While Tagomi offers services around managing the custodian process for clients, there's still a larger issue with crypto markets generally. No custodian currently manages the full set of wallets a firm looking to trade a large book of cryptocurrencies would need. That requires firms to build a solution in-house, an option he said many firms considering trading digital assets would likely not be willing to do, he said. 

Reconciliation can also be a problem, as some crypto products are structured in ways firms' middle and back offices might not have existing frameworks to manage, he said. 

Fiat currency risk is another unsolved problem for the industry, the head of trading pointed out. Foreign exchange markets close at 5 p.m. ET on Friday, reopening at Sunday at 4 p.m. ET. If a firm were to conduct a trade on Saturday night between bitcoin and a fiat currency, it faces FX exposure because the reference rate hasn't been refreshed by banks yet. 

But despite these concerns, prime services are a positive step in the crypto market's maturation. 

"It is like seven yards on first down," Hehmeyer said. "That is a really good gain."

Join the conversation about this story »



Elon Musk

  • Tesla turned a profit in the third quarter, but many Wall Street analysts see a new funding round as pivotal for continuing the company's successes. 
  • Adam Jonas of Morgan Stanley says a $2.5 billion equity round could help "reduce many investors' concerns about financial pressure."

Tesla may have turned a profit on its most recent earnings report, but not all Wall Street analysts are convinced its sustainable.

With $920 million worth of debt coming due in March (and $11 billion in long-term debt looming behind it), Morgan Stanley sees a cash infusion of at least $2.5 billion in equity necessary to assuage nervous investors and help the company continue capital investments in things like a second Gigafactory in China.

"We acknowledge that in Tesla's most recent communications to financial analyst, they state the company does not need to raise capital and has no current intention of doing so, although they do not rule it out in the future" Adam Jonas, the firm's autos analyst, said in a note to clients Tuesday.

"In our opinion, a capital raise could reduce many investors' concerns about financial pressure during a critical time of market expansion and strategic partnership."

Read more: Tesla is reportedly planning to pay off its next chunk of convertible debt in an odd way

Jonas, who has an "equal-weight" rating for Tesla shares with a price target of $291, expects the company to report free-cash flow of $648 million for the current quarter, slightly below what it reported last quarter.

What's more, the "extraordinary efforts to delivery Model 3s before the end of the year" could drive that cash flow total "substantially higher," Jonas says.

"While we acknowledge the significance of Tesla's very strong 3Q result," Jonas said. "We do not believe investors will assume the company is fully self-sufficient without a more sustained period of execution."

Shares of Tesla are up 7.5% this year.

Now read: 

Tesla stock price

SEE ALSO: Tesla employees were reportedly told not to walk past Elon Musk's desk because of his wild firing rampages

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franklin tennessee houses

  • Buying a home these days is more expensive than ever.
  • We calculated how much the median value of a home has changed over nearly 50 years using data from the US Census Bureau.
  • The national median home value adjusted for inflation has increased by 103% — and more than half of all states have seen their median home value more than double.

The cost to buy a home in America is more expensive than it's ever been — so much so that millennial homeownership is at record lows because they have to spend more time saving money for a down payment.

So just how much has the value of a home changed over the past 50 years?

To find out, we took to the US Census Bureau, which provides a table showing median home values from previous decades in each state and the District of Columbia. We compared the median home value in 1970, adjusted for inflation to 2017 dollars using the Consumer Price Index, to the median home value in 2017, according to the Census Bureau's American Community Survey, and calculated the percentage change.

Note that median means that half of the homes are valued above that number and half below. This data technically covers the past 47 years, but as the US Census Bureau's table provided information on a decade basis, it's the closest information available to the past 50 years.

In 1970, the national median home value adjusted for inflation was $107,291; in 2017, it's $217,600 — that's a 103% increase. In fact, more than half of all US States (including Washington, DC) have seen a median home value increase of more than 100%.

Take a look below, ranked from lowest to highest median home value percentage change.

SEE ALSO: We did the math to calculate how much money you need to save monthly to buy a home by 35

DON'T MISS: The only right way to save money for a house

51. Ohio

Cost of a home in 1970: $111,078

Cost of a home in 2017: $144,200

Percentage change from 1970 to 2017: 30%



50. Michigan

Cost of a home in 1970: $110,447

Cost of a home in 2017: $155,700

Percentage change from 1970 to 2017: 41%



49. Illinois

Cost of a home in 1970: $124,963

Cost of a home in 2017: $195,300

Percentage change from 1970 to 2017: 56%



See the rest of the story at Business Insider


Alan Greenspan Visits 'The Daily Briefing' at Fox News Channel Studios on October 17, 2018 in New York City.

  • Former Federal Reserve Chairman Alan Greenspan said in an interview with CNN that stock market investors should "run for cover" amid the recent volatility.
  • He also said that a notable rise in interest rates had proved to be the "key factor which is bringing the stock market down" and that the pressure would most likely continue.
  • Asked whether he thought stocks were still in a bull market, he said, "Not really, no."

Former Federal Reserve Chairman Alan Greenspan said in a television interview on Tuesday that he thought investors ought to "run for cover" amid the recent volatility.

Asked whether the stock market was still in the midst of a bull run, Greenspan told the CNN anchor Julia Chatterley: "Not really, no, it's beginning to fumble. You can see it by the reaction in recent days."

He added: "It would be very surprising to see it sort of stabilize here and take off again. But it's happened in the past. However, at the end of that run, run for cover."

A brutal start to December has US markets on track for their worst final month of the year since 1931. The past three months have been particularly painful for investors, with the S&P 500, which touched a 14-month low on Monday, down nearly 12% over that time. The primary driver behind the sell-off was the notable rise in long-term interest rates, he said.

Greenspan, who served as Fed chairman from August 1987 until January 2006, added that pressure from interest rates on stocks would persist. On Wednesday, the central bank is widely expected to announce an interest-rate hike for the fourth time this year and ninth time since the financial crisis.

He said he'd observed a "pronounced" rise in real long-term interest rates, a "key factor" he said was "bringing the stock market down."

He added: "In fact, it accounts for all of the weakness recently, and I think it's going to continue to account for it, because we're in a period now where I think long-term rates are going to rise."

More broadly, Greenspan sees the US economy moving toward a so-called stagflation environment in which there is both price inflation and a weakening economic backdrop.

To be sure, critics have viewed the former Fed chairman as having missed factors that contributed to the financial crisis. He wrote in a 2010 paper that he'd been "lulled into a sense of complacency."

Now read:

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NOW WATCH: The equity chief at $6.3 trillion BlackRock weighs in on the trade war, a possible recession, and offers her best investing advice for a tricky 2019 landscape



Welcome to Finance Insider, Business Insider's summary of the top stories of the past 24 hours. Sign up here to get the best of Business Insider delivered direct to your inbox.

The Fed’s next decision is its most important in recent memory — and the future of the stock market is at stake

The Federal Reserve will announce its next rate-hike decision on Wednesday, and the stakes have rarely been higher.

A big part of that stems from the turbulence that's rocked the stock market in recent weeks. With major US indexes already in correction territory, one wrong step could open the floodgates for more selling.

As a result, the Fed finds itself in a difficult situation. If the central bank signals too much future monetary tightening for the market's tastes, the 10-year bull market could meet its demise. And if the Fed adopts a more dovish tone than expected, there will be speculation that it was been strong-armed by politicians.

Facebook's catastrophic year has caused Mark Zuckerberg to lose more money than any of the world's other 500 richest billionaires

Mark Zuckerberg's net worth took a major hit this year after scandals plagued Facebook.

Zuckerberg's wealth took its biggest nosedive after Facebook's disastrous second-quarter earnings were announced in July.

Zuckerberg began the year with about $75 billion, but, according to Bloomberg's Billionaire Index, he was worth about $56 billion on Monday. That's a $19 billion drop.

Barclays just hired two Wall Street veterans in its chief investment office

Barclays just hired two senior executives, Sanjeev Mordani and Ravi Singh, to work under the chief investment officer of its international unit, Art Mbanefo.

Mordani, who led cross asset solutions and strategies at Bank of America Merrill Lynch, will join Barclays in the chief investment office and will be responsible for driving the structured finance business in the Americas.

"We are confident that his creativity and strong client relationships will accelerate our efforts to enhance Barclays' client offering," the bank said in a memo sent to staff and seen by Business Insider.

In markets news

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trump jerome powell

  • The Federal Reserve's interest-rate-hike decision on Wednesday will be one of the most important and closely watched in recent memory.
  • Monetary-tightening guidance from the central bank has been a major driver of stock-market fluctuations this year, and that's certain to continue.
  • President Donald Trump is complicating matters by criticizing the Fed on Twitter in an attempt to keep it from raising rates.
  • Experts across Wall Street are also torn about the Fed's path ahead and the impact its decision will have on the market.

The Federal Reserve is set to announce its next interest-rate-hike decision on Wednesday, and the stakes have rarely been higher.

A big part of that stems from the turbulence that has rocked the stock market in recent weeks. With major US indexes already in correction territory, one wrong step could open the floodgates for more selling.

As a result, the Fed finds itself in a difficult situation. If the central bank signals too much future monetary tightening for the market's tastes, the 10-year bull market could meet its demise. And if the Fed adopts a more dovish tone than expected, there will be speculation that it was strong-armed by politicians.

But while the December rate decision is arguably the most important in recent memory, equities have actually been taking their cues from the Fed all year, for better or for worse.

Read more: We just got the most alarming sign yet that investors are bracing for a stock market crash

Take the February stock-market correction, for example. While a big fuss was made about the collapse of an unsustainable volatility trade, ground zero for the sell-off was the blockbuster jobs report for January.

The US economy added way more jobs than expected, and wages rose at their fastest pace in a decade. That fueled speculation that the Fed would hike interest rates at a faster pace than previously indicated, a dynamic that would make bonds more attractive compared to stocks. So equities sold off — and hard.

Then, ahead of the so-called Red October for stocks, Fed Chair Jerome Powell catalyzed another correction, this time with his words. He said the central bank was a "long way" from neutral on interest rates, sparking more concern about a faster path for rate hikes.

But Powell can also be a market ally. In late November, he said rates were "just below" a neutral level, which sent the Dow Jones Industrial Average surging 600 points, its biggest increase in eight months.

With all of that established, it's clear that the market will be hanging not just on the rate-hike decision — which is expected by the vast majority of economists to be a 25-basis-point increase — but also on the accompanying commentary.

They'll devour any bit of guidance from Powell and his colleagues for any hint of what's ahead for interest rates. And how they interpret those signals will go a long way toward deciding the direction of the stock market through the end of 2018 and into next year.

The Trump factor

The blond-haired elephant in the room when it comes to the Fed decision is President Donald Trump's continued insistence upon criticizing the Fed. He's seen the effect a hawkish Fed can have on stocks, and he doesn't want the central bank to further destabilize markets.

As such, he's made a habit out of criticizing the Fed on Twitter, an unorthodox ploy that challenges the institution's long-standing independence.

Read more: We interviewed Wall Street's 8 top-performing investors to get their best ideas for 2019

It's been happening with increased regularity in recent weeks as Trump attempts to exert influence over the Fed's decision. In late November, the president blamed the central bank for layoffs at General Motors. And this week, he fired off tweets in consecutive days, highlighting low inflation and a strong dollar — two things he thinks should preclude the Fed from tightening at all in December.

Other members of the Trump administration have also gotten in on the action. The White House trade adviser Peter Navarro echoed the president's sentiments on Monday, saying it would be ill-advised for the Fed to raise interest rates just to assert its independence.

There's no way to know just how much these pressures will affect the Fed. But regardless of what the decision ends up being, the specter of political influence will continue to loom large.

Conflicting expert opinions

As if the Fed situation weren't difficult enough, experts across Wall Street can't seem to agree on the proper way forward. They also can't come to a consensus about what the Fed's plan will be in 2019.

Last week, billionaire investor Paul Tudor Jones argued that the latest market conditions would keep the central bank from raising rates after a 25-basis-point increase in December.

"There's a high probability that this hike, assuming they hike, will be the last one for a long time," he told CNBC in a December 10 interview.

Meanwhile, DoubleLine Capital CEO Jeff Gundlach — also known as the "Bond King" — doesn't think the Fed should hike at all in December.

"The bond market is basically saying, 'Fed you've got no way you should be raising interest rates,'" he told CNBC on Monday.

Read more: 100 BlackRock investing pros got together to formulate a game plan for 2019 — and we got an exclusive look at their 3 big themes for the year

Kate Moore, the chief equity strategist at the BlackRock Investment Institute, doesn't have a firm view of how the Fed will continue to tighten in 2019. She's more concerned about what the side effects will be in the market. In her mind, the fate of risk assets like stocks rests largely on the shoulders of the Fed.

"I would say focusing on the Fed, and all of the language and communication they give us over the next couple of months — what their plans are in March and in June, in particular," she told Business Insider in a recent interview. "I think that will really dictate and really sort of help frame how people think about risk assets throughout the year."

How to trade the Fed in 2019

The back-and-forth is a lot to absorb, and it fails to answer the main question on the minds of investors: How on earth should you trade this sort of environment? Luckily, Goldman Sachs has an idea.

At the center of the bank's recommendation for 2019 is its belief that Fed overtightening fears are overblown.

"We think the front end of the US Treasury yield curve is currently underpricing future Fed hikes," Charles Himmelberg, the chief markets economist and head of global markets research at Goldman, said in a recent note. "In our view, the risk that the Fed gets derailed from its intended path over the next 2-3 hikes is low."

To that end, Goldman has put together a trade designed to take advantage of a mispriced yield curve.

Ultimately, all of the dynamics laid out above show just how dicey the situation facing the Fed is at the moment and how small the margin of error will be. Even if the central bank manages to avoid roiling markets in the short term, it will have its work cut out going forward.

Because once the December decision has passed, everyone will start looking ahead at the next one. And we'll get to go through this process all over again.

Now read:

We just got the most alarming sign yet that investors are bracing for a stock market crash

We interviewed Wall Street's 8 top-performing investors to get their secrets for success — and their best ideas for 2019

Goldman Sachs unveils its best trade to profit from an unexpected move from the Fed in 2019

SEE ALSO: We just got the most alarming sign yet that investors are bracing for a stock market crash

Join the conversation about this story »

NOW WATCH: The equity chief at $6.3 trillion BlackRock weighs in on the trade war, a possible recession, and offers her best investing advice for a tricky 2019 landscape



Trump Immigration 4x3

  • In a tweet Tuesday, President Donald Trump asserted illegal immigration costs the US more than $200 billion a year.
  • That contradicts widespread estimates, even from conservative and anti-immigration groups. 
  • It also is at odds with his own previous assertions.

President Donald Trump on Tuesday claimed without evidence that immigrants unlawfully in the United States cost the country hundreds of billions of dollars per year, contrary to expert findings.

"Illegal immigration costs the United States more than 200 Billion Dollars a year," he wrote on Twitter. "How was this allowed to happen?"

Estimates on the net costs of illegal immigration vary, but most are a fraction of that number. A 2013 report from the conservative Heritage Foundation, for example, estimated that illegal immigrant households impose a fiscal burden of about $54.5 billion per year.

Neither the White House nor the Department of Homeland Security responded to emails requesting comment.

"I have no idea where that number comes from," said Alex Nowrasteh, an immigration policy analyst at the Cato Institute, a libertarian research organization. "It seems to be conjured out of thin air. I haven't seen any fiscal cost estimates, either reputable or disreputable, that place the number at $200 billion per year."

Trump's claim even left anti-immigration groups flummoxed. It exceeded estimates from the Federation for American Immigration Reform, a Southern Poverty Law Center-designated hate group that seeks to reduce both legal and illegal immigration.

"We're not sure how the president is sourcing his number and really wouldn't want to speculate," said David Ray, communications director for FAIR.

The president has also repeatedly contradicted his own estimates, claiming two weeks ago that the net cost of illegal immigration was $250 billion. And during the 2016 campaign, he asserted that cost was $113 billion a year.

"This is an issue that he goes back to again and again," said Daniel Hopkins, a political scientist at the University of Pennsylvania. "He tries to mobilize his base and to signal to core longtime Republican constituencies that he's fighting on one of their signature issues."

His most recent claim comes as a standoff over border-security funding threatens a partial government shutdown. Last week, Trump demanded $5 billion from Congress for his long-promised wall at the southern border.

SEE ALSO: Here's what happens to Social Security and disability benefits during a government shutdown

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Blue Apron

  • Blue Apron shares fell below $1 for the first time on Tuesday.
  • The company's initial public offering priced at $10 in June 2017. 
  • Amazon bought Whole Foods just days before Blue Apron's IPO and then soon after announced it was entering the meal-kit space. 
  • Watch Blue Apron trade live.

Blue Apron became a penny stock Tuesday, falling below the $1 mark for the first time as a publicly traded company. Shares touched a low of $0.88 — down more than 90% from their $10 initial-public-offering price in June 2017.

The meal-kit maker has had a rough go of things since announcing its plans for a public listing. First Amazon announced plans to buy Whole Foods, causing Blue Apron to slash its IPO range to $10 to $11 a share, down from $15 to $17, as investors fretted over the competition such a deal would bring. Then, less than a month later, Amazon rolled out its meal-kit business

But that was only the beginning of Blue Apron's problems. In May of this year, with the stock already trading near $2.75, the banks that took the company public said shares were worth only $3 apiece.

And a few months later, Blue Apron announced it was having trouble keeping its customers. It said that its total number of customers plunged by 24% in the second quarter versus last year and that revenue per customer dipped by $1 to $250.

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Nio EP9

  • China announced Friday plans to roll back import charges on US vehicles and auto parts.
  • The announcement is a "negative headline for domestic Nio, but positive for the likes of imported automakers, especially Tesla," said Matthew Unterman, director of the financial analytics firm S3 Partners.
  • As a result, Nio, widely seen as the Tesla of China, tanked 10% in two days, bringing $26.9 million mark-to-market profit to investors betting against the stock.
  • Watch Nio trade live.

President Donald Trump's trade-war truce has been a windfall for short sellers who bet against Nio, widely seen as the Tesla of China, with shares falling 10% in the two days after Beijing said it would roll back import charges on US vehicles and auto parts.   

China's Ministry of Finance said Friday that it will temporarily suspend an additional 25% tariff on $66 billion of US cars and trucks and a 5% duty on $60 billion of US auto parts starting January 1, 2019. As a result, China's import tax on American-made cars will be reduced from 40% to 15%, in line with those for cars made in other countries.

The announcement is a "negative headline for domestic Nio, but positive for the likes of imported automakers, especially Tesla," Matthew Unterman, director of the financial technology and analytics firm S3 Partners, said in a note out Monday.

With Nio shares tanking following China's compromise on auto tariffs, short sellers have generated a $26.9 million mark-to-market profit so far, yielding a positive 8.6% return, according to S3 data

"Demand by bearish speculators to secure borrow to short sell the ADRs had been revving higher since its September IPO," Unterman said. "We anticipate short seller demand to remain elevated at least until the upcoming IPO Lockup Expiry in early March."

Nio, a four-year-old electric-car startup backed by the Chinese tech giant Tencent, went public on the New York Stock Exchange in September. 

In October, Nio said it delivered 3,268 ES8s — its first volume-manufactured vehicle —in the third quarter, exceeding its own target of 2,900 to 3,000 vehicles. The company added that it has sold 3,350 ES8s — a seven-seater high-performance electric SUV — since beginning delivery on June 28, and targets to launch its second vehicle, the five-seater ES6 premium SUV, in June or July of 2019.

Nio was up 4.6% since going public in September.

Read more stories on the Tesla of China:

Nio

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Deal with NY attorney-general comes as judge rebukes ex-aide for crimes ‘in the West Wing’


US has lobbied several countries to ban Chinese telecoms group over security concerns


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