German business leaders fear U.S. tariffs after Merkel-Trump talks

BERLIN (Reuters) – German business leaders voiced disappointment on Saturday over the outcome of talks between Chancellor Angela Merkel and U.S. President Donald Trump, saying they feared he would impose tariffs on steel and aluminum imports.U.S. President Donald Trump and Germany’s Chancellor Angela Merkel hold a joint news conference in the East Room of the White House in Washington, U.S., April 27, 2018. REUTERS/Brian Snyder  The United States imposed import tariffs of 25 percent on steel and 10 percent on aluminum in March, but it provided a temporary exemption until May 1 for the European Union. Trump will decide then whether to make the exemption permanent.

“I regret the fact that the chancellor’s visit to Washington produced no palpable progress on the contentious issues between Germany and the United States,” said Dieter Kempf, president of the BDI industry body.

Merkel and Trump aired differences over trade and NATO on Friday at a White House meeting where they tried to put on a show of warmth and friendship.During a joint news conference, Trump lamented his country’s trade deficit with the EU. Merkel said any decision on whether to exempt the bloc from tariffs permanently was now in the president’s hand.  “The threatened tariffs remain a major burden on transatlantic relations,” added Kempf. French President Emmanuel Macron also pressed Trump on trade during a three-day state visit in the same week as Merkel’s quick trip. Neither leader appeared to have made progress convincing Trump to make the exemptions permanent. “Unfortunately, it doesn’t look like the EU will be exempted from the unfair U.S. tariffs,” said Volker Treier of the DIHK industry and commerce chambers.

Stocks Showing A Lack Of Direction On Mixed Earnings

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Stocks have shown a lack of direction over the course of the trading session on Friday. The major averages have spent the day bouncing back and forth across the unchanged line. Currently, the major averages are posting modest losses on the day. The Dow is down 72.46 points or 0.3 percent at 24,249.88, the Nasdaq is down 14.19 points or 0.2 percent at 7,104.49 and the S&P 500 is down 2.69 points or 0.1 percent at 2,664.25. The choppy trading on Wall Street comes as traders are digesting a mixed batch of earnings news from several big-name companies. While tech giants Amazon (AMZN), Microsoft (MSFT), and Intel (INTC) reported better than expected quarterly results, energy giant ExxonMobil (XOM) reported first quarter earnings that came in below analyst estimates. Concerns about the outlook for interest rates may also be keeping traders on the sidelines following the release of a Commerce Department reporting showing stronger than expected economic growth in the first quarter. The report showed GDP growth slowed to 2.3 percent in the first quarter from 2.9 percent in the fourth quarter, although the decrease was far below economist estimates for 3.4 percent growth. A separate report from the University of Michigan showed consumer sentiment in the deteriorated by less than initially estimated in the month of April.The report said the consumer sentiment index for April was upwardly revised to 98.8 from the preliminary reading of 97.8

Steel stocks have shown a substantial move to the downside, dragging the NYSE Arca Steel Index down by 2.5 percent. The index is pulling back off its best closing level in well over a month. U.S. Steel (X) is leading the sector lower after reporting better than expected first quarter earnings but providing disappointing guidance for the current quarter. Energy stocks are also seeing some weakness in mid-day trading, as the price of crude oil for June delivery is falling $0.32 to $67.87 a barrel.

Apple is in a correction, and one market watcher sees possible bear market ahead

Apple is trading in correction territory just days before it’s set to release earnings. One market watcher sees the possibility of another 10 percent drop ahead. “We would have a hold on this. We could see potential 5 to 10 percent additional downside,” Chad Morganlander, portfolio manager at Washington Crossing Advisors, told CNBC. Apple sits 11 percent below a 52-week high set in mid-March, putting its losses at more than the 10 percent drop marking a correction. Another 10 percent decline would put its shares down more than 20 percent from that March high and tip them into a bear market.”The uncertainties are regarding China and the demand of iPhone sales within China,” said Morganlander. “People in China are not actually wanting to buy these high-end phones. So, gross margins as well as operating margin vulnerability there in the short run.” China accounts for nearly one-fifth of Apple’s total revenue. Sales in the region have contracted in the past two years after double-digit growth from 2012 to 2015. Sales in Apple’s software and services segment are forecast to pick up speed in coming quarters. Segment sales are expected to rise 19 percent in its March-ended second quarter and 16 percent for the full fiscal year. The charts don’t look good for Apple performance in the short term, according to Mark Newton, technical analyst at Newton Advisors.”Apple likely continues its string of underperformance. The relative strength really started to flatten out last November,” Newton told “Trading Nation” on Thursday. “The stock right now is up against its upper area of channel resistance going back over the last few years.”

Apple shares stalled out at $180 after hitting their one-year intraday high in mid-March and have since scaled back to levels not seen since November, Newton said. “At current levels it’s tough to see a lot of incremental upside in the stock,” he said. “It’s been going sideways really for four months and it’s really begun to underperform the broader Nasdaq and really a lot of technology.”

Apple’s stock has dropped more than 4 percent since the beginning of the year, trailing the Nasdaq’s and XLK technology ETF’s roughly 3 percent rise. “Until that shows signs of improving, I’d be a buyer on pullbacks right near $130 and really a seller up near $180,” Newton said. “I think it’s going to continue to trade really neutral and range bound for the time being.” A decline to $130 would represent a nearly 20 percent drop from current levels. Its shares are currently 11 percent from $180. Nick Note: I believe high Tech is headed for another wreck! its a bubble. the world is nt looking for a $1000 smart phone and China made phones are better and much cheaper. Wehave a trade for that!

FBI Says it Warned White House About Rob Porter in March ’17

Image: FBI Says it Warned White House About Rob Porter in March '17
Rob Porter (AP)

The FBI first flagged “derogatory information” about Rob Porter, one of President Donald Trump’s closest aides, to the White House counsel’s office in March 2017, according to a new timeline provided by the FBI to Congress and publicly released Thursday. The timeline raises new questions about the White House’s handling of spousal abuse allegations against Porter, the former staff secretary. The administration has offered several contradictory accounts of who knew what and when about the allegations.Porter was forced to resign in February after the allegations by his ex-wives were made public by the Daily Mail. He has denied them.  According to the timeline, outlined in a letter to the House Oversight Committee earlier this month, the FBI provided a “partial report” about Porter to White House counsel Don McGahn on March 3, 2017. That report included “derogatory information” about Porter, but the letter does not specify exactly what it said. A White House official suggested Thursday that McGahn had not read it.The FBI says that it then submitted a completed background investigation to the White House personnel security division in July. A month later, the FBI said, it received a request for additional information from the personal security office, including requests to re-interview Porter, his ex-wives and his girlfriend at the time. The FBI submitted that report, which it says “contained additional derogatory information,” in November.The White House has said Porter told McGahn after his second interview that there were allegations of emotional and verbal abuse against him but that he did not disclose allegations of physical assault.  The FBI also provided additional information to the office, after it had closed the investigation, in February 2018. White House officials have long insisted that they were not aware of the specific allegations against Porter until they were published, along with photographs, in the Daily Mail. The episode prompted changes in how the White House handles security clearances, and a number of staffers’ clearances were downgraded as a result.The White House official noted Thursday that a memorandum released by chief of staff John Kelly in the scandal’s aftermath included a new requirement that derogatory information uncovered during background checks now be provided in-person, directly to the appropriate person.  The official, who was not authorized to discuss specifics about Porter and spoke on condition of anonymity, said that was not the case in 2017.

Russian from Trump Tower meeting: ‘I am a lawyer, and I am an informant’

Natalia Veselnitskaya, the Russian lawyer who met with Donald Trump Jr. and others at Trump Tower during the 2016 presidential race, appears to have greater ties to the Russian government than she previously admitted. The New York Times reports that Veselnitskaya in at least one instance worked for Russia’s chief legal office against the U.S. Justice Department in a fraud case targeting a top Russian firm with government connections. And in an interview set to be broadcast Friday on “NBC Nightly News with Lester Holt” and on MSNBC’s “On Assignment with Richard Engel,” Veselnitskaya calls herself an “informant” for the Russian government, an admission that goes further than her previous claims of just being a private attorney. “I am a lawyer, and I am an informant,” she says in the NBC interview. “Since 2013, I have been actively communicating with the office of the Russian prosecutor general.” The admission also comes despite testimony Veselnitskaya submitted to the Senate Judiciary Committee in November, in which she claimed no connection to Russian President Vladimir Putin’s government. “I operate independently of any governmental bodies,” she wrote in November. “I have no relationship with Mr. Chaika, his representatives and his institutions other than those related to my professional functions as a lawyer.” Veselnitskaya was referring to Yuri Chaika, Russia’s prosecutor general, for whom on Friday she admitted to being a regular source of information. Friday’s reports raises new questions about the June 2016 Trump Tower meeting attended by Trump Jr., Trump campaign chairman Paul Manafort and Jared Kushner, Trump’s son-in-law and now senior adviser, and whether that meeting had connections to Russia’s government that were previously unknown. It was previously reported that Rob Goldstone, a British music producer who set up the meeting between Trump Jr. and Veselnitskaya, told Trump Jr. that the information the lawyer could provide was “part of Russia and its government’s support for Mr. Trump.” “If it’s what you say I love it especially later in the summer,” Trump Jr. replied to Goldstone in one email.

PPG Will Cut 1,100 Jobs Amid Growing Material Costs

Costs are rising for the raw materials it uses to make paints and coatings
 

The Pittsburgh-based company also said it would book a pretax charge of as much as $85 million in the second quarter related to severance and other cash costs.
The Pittsburgh-based company also said it would book a pretax charge of as much as $85 million in the second quarter related to severance and other cash costs. Photo: Jasper Juinen/Bloomberg News By Andrew Tangel

PPG Industries Inc. PPG +0.29% said it would cut 1,100 jobs in part to offset rising costs for the raw materials it uses to make paints and coatings. The Pittsburgh-based company also said it would book a pretax charge of as much as $85 million in the second quarter related to severance and other cash costs. PPG said it was trimming its costs as a result of “sustained, elevated raw material inflation.” A PPG spokesman didn’t immediately respond to a request for comment. It wasn’t clear how much of the workforce reduction would involve layoffs, in what locations and when.PPG said the restructuring would be substantially complete by the second quarter of 2019.  Earlier this month, PPG reported $3.8 billion in revenue in the first quarter, up 9% from a year ago. Profit of $353 million, or $1.40 a share, was up from $334 million, or $1.29, the prior year. At the time executives said they were paying more for materials including titanium dioxide, a compound used in paint. Nick Note: I don’t get it… With the great great great tax breaks and JOBS JOBS JOBS legislation corporation were suppose to save so much money they would hire MORE people.  Increase the pay of American workers and pay out bonuses. (it is amazing to be people are stupid enough to believe that SHIT!)I know i heard this over and over and over again. It goes lke this.. The 10% at most saving on taxes US companies with a foreign presence would rush to close those Mexico, China and India factories and bring the jobs “Home”.  Shit amazing leave a $5.00 labor market come back to het welcoming arms of the GREAT GREAT GREAT US worker the best in the world and pay $50.00 a hour in total costs. Well to my simple mind the math does not work. AND i guess it does not work for anyone else because this Kudlow Laughing curve is going to throw the US economy into a depression. With the national debt soaring by 2 trillion dollars this year alone. And the deficit soaring by three trillion dollars because of lost corporate tax revenue…….. If people can’t see this they deserve to stand in a bread line and sell their ass for a potato.

Dollar index on track for best week since November 2016

British pound falls to 2-month low
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The U.S. dollar rallied against most of its major rivals on Friday, putting it on track for its best weekly performance since late November 2016. The dollar was helped by a stumble by the British pound, after U.K. growth figures widely undershot analysts’ forecasts, while the euro remained on the back foot after the European Central Bank struck a relatively cautious tone at its meeting on Thursday.The U.S. dollar continued its recent uptrend, which was initially inspired by rising Treasury, but also got a boost from supportive economic data in the U.S. and disappointing data elsewhere. First quarter U.S. GDP grew 2.3%. Meanwhile, the 10-year U.S. Treasury yield TMUBMUSD10Y, -0.84% has pulled back from the psychologically important 3% mark, last trading to yield 2.973%. Sterling was the worst performer among major currencies on Friday, after official data showed the U.K. economy grew at its slowest pace in more than five years in the first quarter of 2018. The data dampen the case for an interest-rate increase from the Bank of England when it next meets in May. The Office for National Statistics said Friday that gross domestic product in the U.K. expanded by 0.1% in the first quarter. Economists had expected a reading of 0.3% in the preliminary report. It was a visible slowdown from the fourth quarter of 2017, when GDP grew 0.4%. Meanwhile, the euro added to losses from Thursday that came after the ECB’s policy meeting. The central bank kept policy unchanged, but gave no new guidance on interest rates or its bond-buying program. “We believe the trapped dollar is about to break out to the strong side. The balance between positive cyclical drivers and structural and political headwinds is leaning increasingly toward the former,” David Bloom, global head of FX strategy at HSBC, said in a note. “The Fed looks likely to match its ‘dots,’ once again confounding the market’s more dovish stance. In contrast, other central banks across the G-10 face challenges to begin or extend their tightening process,” he added.

Deutsche Bank likely to axe 1,000 U.S. investment bank jobs: source

FRANKFURT (Reuters) – Deutsche Bank (DBKGn.DE) is expected to cut around 1,000 jobs or 10 percent of its workforce in the United States, a person familiar with the matter said on Friday, as the German lender scales back its global investment banking ambitions.  The bank has already axed 400 U.S.-based employees this week – of which around three quarters worked in its trading business and the rest in corporate finance, according to a second source who is a senior U.S.-based Deutsche Bank official. “I can tell you that the people who make money here will continue to get paid and be supported, because Deutsche Bank needs the revenue,” the banker said. “The challenge now is to keep our people.”Both sources spoke on condition of anonymity. On Thursday, the bank announced that it would make “significant” cuts at its investment bank, scaling back its corporate finance operations in the United States and Asia, U.S. government bond trading, and equities.  It did not provide specific numbers or a time frame. “We do not see increased fluctuation in the core areas of the bank,” the bank said in a statement emailed to Reuters on Friday. “Europe is the region in which we want to expand our market position. Here we want to grow and gain market share. Especially in Europe, we are the first choice for many investment bankers.” Credit ratings agency Standard & Poors, which had placed the bank on “credit watch” after retail banking specialist Christian Sewing abruptly replaced John Cryan as CEO earlier this month, said late on Thursday that the bank’s new direction “lacks the specificity that we need to assess the credibility of this adjusted approach.” Deutsche Bank’s investment banking unit has been losing market share in recent years. In Europe so far this year, the bank has a 4 percent market share in investment banking fees, down from 6 percent of the market in 2013, according to ThomsonReuters data. Its ranking fell from second to sixth place.  In the United States during that same period, Deutsche’s share of fees dropped to 3.3 percent from 4.9 percent. It ranks ninth, behind all the Wall Street power houses but also European rivals such as Barclays (BARC.L) and Credit Suisse (CSGN.S).

Charter plummets 15% on big subscriber losses, drags cable stocks down

 Charter plunges on poor quarterly subscriber numbers  

Shares of Charter Communications tumbled 15 percent on Friday after the company reported a bigger-than-expected loss of video subscribers for the previous quarter.  The company reported a loss of 122,000 video subscribers for the first quarter. Analysts polled by StreetAccount expected a loss of 43,000. Charter also added 331,000 internet subscribers, less than a forecast of 370,000 additions. “The changes in the video business are significant and hard to predict, but there’s video growth capable inside of our asset base,” CEO Tom Rutledge said during a conference call. Charter’s sharp losses dragged shares of other cable companies lower. Comcast’s stock fell 2.2 percent, while shares of Altice USA dropped 9.2 percent. Cable companies have been under pressure in recent years as consumers shift away from traditional cable services to over-the-top options like Netflix and Hulu, for example.

Exxon first quarter profit misses estimates on refining, chemical woes

FILE PHOTO: A view of the Exxon Mobil refinery in Baytown, Texas September 15, 2008. REUTERS/Jessica Rinaldi/File Photo

HOUSTON (Reuters) – Exxon Mobil Corp the world’s largest publicly traded oil producer, posted a lower-than-expected quarterly profit on Friday as weakness in its chemical and refining operations offset a boost from higher crude prices  It was the second consecutive quarter of weakness in Exxon units that make gasoline, plastics and related products. Exxon blamed weak margins for the income drop in those segments. The company posted net income of $4.7 billion, or $1.09 per share, compared to $4.01 billion, or 95 cents per share, in the year-ago quarter.Profit jumped more than 50 percent in the company’s upstream division, which pumps oil and natural gas, thanks largely to rising commodity prices.

In the downstream refining unit, though, profit fell 12 percent, and in the chemical unit, profit dropped 14 percent. Production fell 6 percent to 3.9 million barrels of oil equivalent per day (boe/d).

Exxon said earlier this month it resumed production at the Papua New Guinea liquefied natural gas (LNG) project a fortnight ahead of schedule after it was shut down in the wake of a deadly earthquake in February. The shutdown cut quarterly earnings by $80 million and production by about 25,000 boe/d, Exxon said. The company has struggled in the past 16 months to unwind some of the biggest bets taken by former Chief Executive Officer Rex Tillerson, who left to become U.S. secretary of state in early 2017 before being fired by President Donald Trump last month. Exxon has recorded billions of dollars in writedowns amid falling production since Tillerson left, and successor CEO Darren Woods has moved quickly to try to repair operations. Woods laid out a bold plan last month to double annual earnings by 2025 through heavier investments in U.S. shale, Guyana and several LNG projects around the world.