Jumat, 31 Januari 2020

Amazon blows past $1 trillion valuation after monster earnings report - Business Insider

jeff bezosAmy Harris/AP Photos

  • Amazon shares soared as much as 11% in early Friday trading, driving the company's market valuation above $1 trillion for the first time since July.
  • The company announced fourth-quarter figures after Thursday's close, topping estimates for revenue and earnings.
  • Amazon Web Services continued to see revenue growth slow quarter-over-quarter, but net sales beat expectations.
  • CEO Jeff Bezos said the company had more than 150 million Prime members around the world. Less than two years ago, Amazon announced it had 100 million global members.
  • Watch Amazon trade live here.
  • Visit Business Insider's homepage for more stories.

Amazon shares tore as much as 11% higher in early Friday trading, pushing the company's market valuation above $1 trillion for the first time since July.

The e-commerce giant announced fourth-quarter financials after the market closed on Thursday, beating expectations for revenue and profit. Amazon Web Services, a rapidly growing revenue stream for the firm, also topped estimates despite a continued slowdown in sales growth.

The results showed that heavy investments in AWS, Prime one-day shipping, and its retail footprint were beginning to pay off after years of squeezed margins. The company said it spent $1.5 billion less than expected in the fourth quarter because of shipping efficiencies, though the new one-day service boosted total shipping costs to $12.9 billion, up 43% year-over-year.

"We are getting more efficient both in our transportation and delivery methods and also in our warehouses," Chief Financial Officer Brian Olsavsky said in a call with analysts.

Here are the key figures:

  • Revenue: $87.4 billion, versus the $86.2 billion estimate
  • Earnings per share: $6.47, versus the $4.11 estimate
  • Operating income: $3.88 billion, versus the $2.75 billion estimate
  • AWS net sales: $9.95 billion, versus the $9.89 billion estimate

"Prime membership continues to get better for customers year after year. And customers are responding — more people joined Prime this quarter than ever before, and we now have over 150 million paid Prime members around the world," founder and CEO Jeff Bezos said in the report. Less than two years ago, the company said it had 100 million Prime members worldwide.

Amazon first jumped above the $1 trillion threshold in early September 2018, becoming the second company to achieve the feat, after Apple. Shares dropped through the rest of the year before hitting the market-cap milestone again in July, though the company's valuation didn't stay above the lofty level for long.

The only other companies trading with valuations above $1 trillion are Apple, Microsoft, and Saudi Aramco.

The earnings beat followed a less enthusiastically received third-quarter report. Amazon topped estimates for revenue but fell below hopes for quarterly profits when it reported earnings on October 24. The profit miss drove Amazon shares as much as 8.6% lower in after-hours trading.

Amazon closed at $1,870.68 per share on Thursday, up about 1.3% year-to-date.

The company has 53 "buy" ratings, four "hold" ratings, and no "sell" ratings, with a consensus price target of $2417.03, according to Bloomberg data.

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2020-01-31 13:59:51Z
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There's a new kind of Coke on shelves. You'll be forgiven if you missed it - CNN

Four varieties, including Coke Energy, Coke Energy Zero Sugar, Coke Energy Cherry and Coke Energy Cherry Zero Sugar, recently reached US retail shelves. The Coke-energy-drink hybrid beverage became available in international markets last year.
Coke Energy, which is made with guarana extracts and B-vitamins, has 114 mg of caffeine per 12-ounce serving. A 12-ounce can of regular Coke has about 34 mg of caffeine. But the two products should taste about the same.
"It's the energy you want and the taste you love," Geoff Cottrill, senior vice president of strategic marketing at the company, told CNN Business, adding that the proposition is "very simple and very direct."
Coke Energy landed on US retail shelves earlier this month.
It may seem like an unusual drink, but it's an important part of Coke's strategy: Coca-Cola has been diversifying its portfolio of beverages while innovating its core product.
So far, the product may have flown under the radar. But Coke is planning a splashy US rollout for the drink.
"We're putting the full marketing muscle behind our Coke Energy launch in the US," CEO James Quincey said during a call discussing the fourth quarter and full year financial results Thursday.
To ensure Americans are aware of the energy drink, Coca-Cola is advertising the product during the Super Bowl. It also plans to offer samples across the country.
Americans will get a slightly different version of the drink than people in other places around the world, Quincey said, describing it as a "version 2.0." The US version will taste more like classic Coca-Cola, while the international version is more citrusy, he said.
People are increasingly seeking functional beverages, which offer an added nutritional or practical benefit, like a boost of energy.
Coke Energy and Coke Plus Coffee, which is made with real coffee and is more caffeinated than regular Coke, could help those consumers from losing interest in cola, Coca-Cola's most important product. Expanding the Coke portfolio is also a way to give diehard Coke fans more options.
The efforts are paying off so far.
Coca-Cola thinks Americans are finally ready for Coke with coffee
Last year, trademark Coke, which includes variations on the classic cola, popped 6% in terms of retail value globally, driven in part by Coca-Cola Zero Sugar. The company reported overall net revenue growth of 16% for the quarter and 9% for the year. Its stock jumped about 3% on the news during trading hours Thursday.
The energy category in particular is a good bet for Coke.
US energy drinks and shots sales amounted to about $13.5 billion in 2018, a growth of about 30% from 2013, according to the research company Mintel. The market will continue to grow, according to Mintel's projections.
"We're looking to expand the access to the energy category, and we think Coke can do that," Quincey said. Coca-Cola already has a distribution agreement with Monster Energy.
Coca-Cola is also leaning into other trends with product launches, revamps and acquisitions.
AHA, the company's new caffeinated flavored seltzer water brand, reaches shelves in March. Powerade, the sports drink made by Coca-Cola, is redesigning packages and launching new products this winter. And earlier this month, Coca-Cola announced the acquisition of Fairlife, which sells lactose-free milk, to cash in on interest in specialty dairy drinks.

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2020-01-31 14:44:00Z
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Here’s the daring way Europe’s largest fund manager is reacting to the coronavirus outbreak - MarketWatch

There is considerable debate whether to “buy the dip” or not as financial markets react to the coronavirus outbreak.

Amundi Asset Management, Europe’s largest fund manager with €1.45 trillion ($1.6 trillion) in assets under management, is taking it one step further, and saying it sees opportunities in emerging market equities.

“Unless the ‘elevated uncertainty’ is able to derail the global economy into a shock—which is not our scenario now—excessive downward setbacks in prices could provide entry points for asset classes with attractive valuations and good fundamentals. In particular, we see selective opportunities in EM [emerging market] equity given the reacceleration of earnings growth, attractive valuations and the prospect of a weaker U.S. dollar DXY, -0.16%. The short-term issue due to the Chinese situation is an opportunity to add to this asset class, barring any disruption to the global outlook,” said Pascal Blanqué, Amundi’s chief investment officer.

In particular, the firm is recommending emerging markets that are relatively insulated from the virus and can benefit from either strong domestic demand or the continuing shift in the value chain.

“For example, we expect strong growth to remain in Vietnam, activity to slightly rebound in Indonesia and, the Singapore economy to benefit from stabilization and the eventual pickup of industrial production and global trade,” he wrote. On China, Amundi recommended being more cautious on vulnerable sectors such as hospitality and aviation, as well as tourism-related companies sensitive to Chinese demand.

Also see: Mark Mobius says he’s boosting emerging-market bets

The buzz

The State Department warned Americans not to travel to China in the wake of the coronavirus, even as the World Health Organization said there was no need to cut off travel. The U.K. reported its first two cases.

The technology sector was in focus on two major stories. Amazon AMZN, +0.68%  was on track toward a $1 trillion valuation after reporting a $3.3 billion quarterly profit on stronger-than-forecast holiday sales. IBM IBM, -0.67%  announced Ginni Rometty’s eight-year run as chief executive will end and that she’ll be replaced by Arvind Krishna, who currently runs the cloud division.

Reynolds Consumer Products REYN, +0.00%  said late on Thursday it priced its initial public offering at $26 a share, raising $1.2 billion. World Wrestling Entertainment WWE, +2.23%  may stumble after the resignation of its two co-presidents.

Oil giants Exxon Mobil XOM, +1.06%  and Chevron CVX, +0.93%  both reported stronger-than-expected.

A wave of U.S. data showed steady wage growth and spending that slightly outpaced income. Chinese PMI data didn’t disappoint, though the survey period was largely before the spread of the coronavirus. South Korean and Japanese industrial production improved, while the eurozone economy barely grew in the final three months of the year.

On the political front, the U.K. officially exits the European Union on Friday night, though the relationship will be largely unchanged until the end of the year. The remaining drama from the impeachment trial ended on Thursday night as Sen. Lamar Alexander said he opposes calling witnesses, likely sealing a quick end.

The markets

U.S. stock futures ES00, -0.45%  declined on Friday, after three consecutive gains for the Dow Jones Industrial Average DJIA, +0.43%.

Gold GC00, -0.29%  edged lower while crude oil CL.1, +0.35%  inched up.

Asian stocks ADOW, -0.29%  rose and European stocks SXXP, -0.33%  fell.

Random reads

The 2011 thriller Contagion has surged into the iTunes Top 10 U.K. movie rental chart because of the coronavirus.

Sweet home, Alabama—suddenly, the Yellowhammer state is near the top of the rankings for incoming U-Haul trucks.

Neil Young compared the MacBook Pro’s audio capabilities to Fisher-Price’s.

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2020-01-31 13:42:00Z
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Here’s the daring way Europe’s largest fund manager is reacting to the coronavirus outbreak - MarketWatch

Need to Know

By Steve Goldstein

Published: Jan 31, 2020 7:18 am ET

An aerial view shows commercial and residential buildings in central Singapore, June 22, 2019.

An aerial view shows commercial and residential buildings in central Singapore, June 22, 2019.

There is considerable debate whether to “buy the dip” or not as financial markets react to the coronavirus outbreak.

Amundi Asset Management, Europe’s largest fund manager with €1.45 trillion ($1.6 trillion) in assets under management, is taking it one step further, and saying it sees opportunities in emerging market equities.

“Unless the ‘elevated uncertainty’ is able to derail the global economy into a shock—which is not our scenario now—excessive downward setbacks in prices could provide entry points for asset classes with attractive valuations and good fundamentals. In particular, we see selective opportunities in EM [emerging market] equity given the reacceleration of earnings growth, attractive valuations and the prospect of a weaker U.S. dollar DXY-0.06% The short-term issue due to the Chinese situation is an opportunity to add to this asset class, barring any disruption to the global outlook,” said Pascal Blanqué, Amundi’s chief investment officer.

In particular, the firm is recommending emerging markets that are relatively insulated from the virus and can benefit from either strong domestic demand or the continuing shift in the value chain.

“For example, we expect strong growth to remain in Vietnam, activity to slightly rebound in Indonesia and, the Singapore economy to benefit from stabilization and the eventual pickup of industrial production and global trade,” he wrote. On China, Amundi recommended being more cautious on vulnerable sectors such as hospitality and aviation, as well as tourism-related companies sensitive to Chinese demand.

Also see: Mark Mobius says he’s boosting emerging-market bets

The buzz

The State Department warned Americans not to travel to China in the wake of the coronavirus, even as the World Health Organization said there was no need to cut off travel. The U.K. reported its first two cases.

The technology sector was in focus on two major stories. Amazon AMZN+0.68%  was on track toward a $1 trillion valuation after reporting a $3.3 billion quarterly profit on stronger-than-forecast holiday sales. IBM IBM-0.67%  announced Ginni Rometty’s eight-year run as chief executive will end and that she’ll be replaced by Arvind Krishna, who currently runs the cloud division.

Reynolds Consumer Products REYN  said late on Thursday it priced its initial public offering at $26 a share, raising $1.2 billion. World Wrestling Entertainment WWE+2.23%  may stumble after the resignation of its two co-presidents.

Oil giants Exxon Mobil XOM+1.06%  and Chevron CVX+0.93%  report results.

The economics calendar features the employment cost index, personal income and Chicago purchasing managers index data. Chinese PMI data didn’t disappoint, though the survey period was largely before the spread of the coronavirus. South Korean and Japanese industrial production improved, while the eurozone economy barely grew in the final three months of the year.

On the political front, the U.K. officially exits the European Union on Friday night, though the relationship will be largely unchanged until the end of the year. The remaining drama from the impeachment trial ended on Thursday night as Sen. Lamar Alexander said he opposes calling witnesses, likely sealing a quick end.

The markets

U.S. stock futures ES00-0.35%  declined on Friday, after three consecutive gains for the Dow Jones Industrial Average DJIA+0.43%

Gold GC00-0.31%  edged lower while crude oil CL  inched up.

Asian stocks XX:ADOW-0.32%  rose and European stocks XX:SXXP-0.35%  fell.

Random reads

The 2011 thriller Contagion has surged into the iTunes Top 10 U.K. movie rental chart because of the coronavirus.

Sweet home, Alabama—suddenly, the Yellowhammer state is near the top of the rankings for incoming U-Haul trucks.

Neil Young compared the MacBook Pro’s audio capabilities to Fisher-Price’s.

Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. Be sure to check the Need to Know item. The emailed version will be sent out at about 7:30 a.m. Eastern.

Follow MarketWatch on Twitter, Instagram, Facebook.

See original version of this story

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2020-01-31 11:20:00Z
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As the coronavirus spreads, fear is fueling racism and xenophobia - CNN

The headlines drew immediate outrage. Readers accused the paper of using ignorant and offensive language.
"Yellow Peril" was an old racist ideology that targeted East Asians in Western countries. The phrase embodies the worst of anti-Asian fears and stereotypes, which have plagued immigrant communities since the first waves of Chinese immigration to the United States began in the 19th century.
In the US, government propaganda and pop culture at the time spread wildly racist and inaccurate images of Chinese people as unclean, uncivilized, immoral, and a threat to society.
To invoke the term now, in a story about death and illness in Asia, seems thoughtless at best and blatantly racist at worst.
The newspaper apologized quickly and said they had no intention of perpetuating "racist stereotypes of Asians." But the damage is not so easily undone, and the paper is not the sole culprit -- merely the latest in a wave of anti-Chinese sentiment as the coronavirus spreads worldwide.
The escalating global health crisis has claimed more than 200 lives -- all in China -- and infected close to 10,000 people worldwide. As they seek to contain the virus, authorities in multiple countries are balancing the need for warnings against the risk of creating global panic.
However, there are signs that's already happening, with face masks selling out in stores and people locking themselves at home. Some people in central China -- the epicenter of the outbreak -- are desperately taking any flight out, regardless of destination, as governments worldwide suspend flights from China and impose restrictions on travelers from the mainland.
But the panic has also taken another, more familiar form -- the re-emergence of old racist tropes that portray Asians, their food, and their customs as unsafe and unwelcome.

As panic spreads, so does racism

As news of the virus has spread, many people of Asian descent living abroad say they have been treated like walking pathogens.
Writing for the UK's Guardian newspaper, one British-Chinese journalist in London said a man quickly moved seats when he sat down on a bus.
A Malaysian-Chinese social worker experienced the same thing on a London bus this week. "A couple people at an East London school I work in have asked me why Chinese people eat weird food when they know it causes viruses," she told CNN.
In Canada, there have been reports of Chinese children being bullied or singled out at school. In New Zealand -- where there are no confirmed coronavirus cases -- a Singaporean woman says she was confronted and faced racist harassment in a mall.
These instances echo a long history of racism in the West. During the Yellow Peril era, anti-Chinese fears led to lynchings of Chinese immigrants, racial violence, systemic discrimination -- even an outright ban on Chinese immigrants for 61 years in the US under the country's Exclusion Act.
That's why the term "Yellow Peril," which contains centuries of trauma, is so charged -- and why the use of it in a contemporary headline was so stunning.
However, this time around anti-Chinese racism is spreading beyond the West. In Vietnam, signs have been seen outside restaurants declaring "No Chinese." The tourist who took the photo told CNN the sign appeared in the past week. Similar signs were also posted outside a Japanese shop, turning away Chinese customers.
And people online from various different places are making racially driven jokes; when TV host James Corden posted a photo with Korean-pop band BTS, one person tweeted, "BREAKING: James Corden dies of the coronavirus." The joke racked up nearly 25,000 likes on Twitter.
Signs outside restaurants in Hoi An, Vietnam, taken in January 2020.

Targeting Chinese food

Perhaps the most widespread form of xenophobia comes in fearmongering, sensationalist stereotypes about Chinese food.
The novel coronavirus is believed to have started in a Wuhan seafood and wildlife market, and scientists have pointed to bats and snakes as possible virus carriers. And while the wildlife trade poses legitimate problems, the outbreak has prompted a racially tinged wave of disgust toward Chinese food, and anger from many who accuse Chinese people of recklessly causing a potential global pandemic.
"Because of some folks in China who eat weird (foods) like bats, rats, and snakes, the entire world is about to suffer a plague," said one popular tweet.
This idea has been reinforced by recent media coverage of the coronavirus, some of which has featured misleading videos or photos. One widely shared video, of a Chinese travel blogger eating bat soup, was filmed three years ago in the Pacific island nation of Palau, and the dish has been sampled by Western TV hosts in the past.
The video and the blogger have no connection to Wuhan or the current outbreak -- but the video has gone viral nonetheless, with many Western viewers expressing horror on social media. There was such an uproar that the blogger came forward to apologize last week.
What viral misinformation and breathless media coverage often miss is that only a small minority of people in China actually eat wild animals. Most people eat much of the same things you would see in other cuisines, like pork or chicken. Ultimately, what people like to eat is culturally relative -- a lot of the Western disgust toward "weird" Chinese food is itself Eurocentric.
That's not to say all criticism of Chinese food is invalid; the country does have a problem with badly-regulated trade of wild animals, which has led to previous outbreaks.
Chinese officials crack down on wildlife markets as coronavirus outbreak nears 3,000 cases
The deadly 2003 outbreak of severe acute respiratory syndrome (SARS) was traced to the civet cat, considered a delicacy in southern China. And though the government has introduced some measures limiting wildlife trade, it has been reluctant to take more aggressive action, and illegal trade continues.
It's also difficult to end these practices because of the cultural significance and prevalence of traditional Chinese medicine. Many of these wild animals are thought to hold important medicinal properties -- for instance, people drink snake soup for arthritis and snake bile for a sore throat.
There is undoubtedly a larger issue that needs to be addressed -- how the government can balance tradition with safer regulations.
But the beliefs and customs that drive consumption of these foods are centuries old and interwoven in peoples' lives -- they are not so easy to undo, even less so when they are dismissed as primitive and unclean by foreign countries.

'Standing with our Chinese community'

Right now, we are only seeing early signs of a xenophobic backlash against the East Asian diaspora -- tasteless jokes online, bad headlines, people acting fearfully in public. But if the 2003 SARS epidemic is any model to go by, these strands of xenophobia could potentially escalate into more dangerous, explicit forms of racism.
At the peak of the 2003 outbreak, people of Asian descent were treated like pariahs in the West. There were reports of white people covering their faces in the presence of Asian coworkers, and real estate agents who were told not to serve Asian clients.
Asian people suffered threats of eviction, had job offers rescinded with no explanation, and some Asian Canadian organizations received outright hate messages. Chinese and Asian businesses suffered heavy losses; in Boston, an April Fool's hoax falsely warned of infected employees at a Chinese restaurant, reportedly causing a 70% drop in the restaurant's business.
An employee of an empty Chinatown restaurant in Chicago on April 24, 2003, as fears over the SARS epidemic kept customers away.
This all happened 17 years ago, when China was still slowly opening up. Now it's an emerging superpower, and its role in a range of recent conflicts -- the ongoing US-China trade war, security concerns surrounding telecommunications company Huawei, allegations of Chinese spies in America and Australia -- mean that many in the West already view China with greater suspicion and tension than they did before.
Add the threat of a global pandemic, and a wave of heightened discrimination could be even uglier this time around.
Diaspora communities and local authorities are preparing for this, with many trying to calm fear before it becomes hysteria. In France, the newspaper controversy sparked a social media campaign, with many French Chinese citizens using the hashtag #JeNeSuisPasUnVirus -- I am not a virus.
In a statement confirming the first case of coronavirus in Los Angeles this week, the local health department stressed that "people should not be excluded from activities based on their race, country of origin, or recent travel if they do not have symptoms of respiratory illness."
The head of Toronto Public Health also warned that misinformation about the virus had created "unnecessary stigma against members of our community."
"I am deeply concerned and find it disappointing that this is happening," said the head, Eileen de Villa, in a statement Wednesday. "Discrimination is not acceptable. It is not helpful and spreading misinformation does not offer anyone protection."
Toronto Mayor John Tory also spoke out this week about the coronavirus panic. "Standing with our Chinese community against stigmatization and discrimination," he said. "We must not allow fear to triumph over our values as a city."

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2020-01-31 06:59:00Z
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Kamis, 30 Januari 2020

Dow Jones Today, Stocks Pare Opening Losses; Microsoft, ServiceNow Rally; Facebook Dives - Investor's Business Daily

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  1. Dow Jones Today, Stocks Pare Opening Losses; Microsoft, ServiceNow Rally; Facebook Dives  Investor's Business Daily
  2. Stocks fall as coronavirus death toll rises, Facebook shares tumble  CNBC
  3. World markets tumble as fears over virus outbreak spread  Yahoo Finance
  4. Recovery From Monday's Gaps; NASDAQ And Dow At Channel Support  Investing.com
  5. Stock market live updates: Dow falls 150, Facebook is biggest loser, GDP not great  CNBC
  6. View full coverage on Google News

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2020-01-30 14:59:00Z
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U.S. economy grew 2.3 percent in 2019, the slowest of Trump’s presidency - The Washington Post

Growth was 2.1 percent in the final three months of the year, better than economists expected and a sign the economy is not falling into a recession. But it is a pace that has been typical of this decade-long recovery and it was helped by a big decline in imports as companies had rushed to bring in goods from China before Trump’s latest tariffs went into effect in September. Growth was 2.1 percent in the third quarter and 2 percent in the second.

The U.S. economy is largely driven by consumer spending, and American households continued to buy goods and experiences at a steady pace. Numerous polls and surveys show that consumer confidence is high because Americans believe it is easy to get a job and their incomes are likely to stay the same or improve in the coming months.

Government spending has also increased under Trump, providing a boost to economic growth. The deficit neared $1 trillion in 2019, an unprecedented level during good economic times when there is not a major war effort underway. Trump’s tax cuts and additional funding for the military and domestic programs have pushed the gap wider.

Despite the additional government stimulus, Trump has yet to achieve a year of 3 percent economic growth as he vowed before taking office. Trump has repeatedly blamed the Federal Reserve for the shortfall, but most economists say Trump’s escalating trade war and weak growth abroad were major drag on the economy last year. The ongoing fallout at Boeing after the two 737 Max plane crashes also dampened growth since Boeing is usually the largest U.S. exporter but orders dried up after the tragedies.

“The United States is by far the strongest economic power in the world,” Trump said in a speech last week at the World Economic Forum in Davos, Switzerland. “It’s despite the fact that the Fed has raised rates too fast and lowered them too slowly.”

But economists point out that companies have a lot of cash on hand and the Fed has set interest rates at relatively low levels, meaning firms aren’t struggling for money right now. Instead, business confidence plummeted over the summer as Trump escalated his trade war with China and threatened to hit Mexico with extensive tariffs. Business investment outside of housing shrank 1.5 percent in the fourth quarter, 2.3 percent in the third quarter and 1 percent in the second quarter of last year.

Trump has frequently boasted about the economy’s performance since his election. Growth so far during his tenure in office has exceeded the average under President Obama’s and President George W. Bush’s first or second terms, but it is not unprecedented growth. Growth under President Clinton and President Reagan both exceeded Trump’s average so far.

Economists caution against giving presidents too much credit for economic growth, but surveys show voters often feel otherwise. Late last year, a Washington Post-ABC News poll found 44 percent of Americans said the economy had improved under Trump, and among that group, nearly 4 in 5 said he deserves at least a good amount of the credit.

Gross Domestic Product represents all of the more than $20 trillion of goods and services produced in the U.S. last year, with adjustments for things like international trade and business inventories. The preliminary estimate released this month is the culmination of a yearlong effort to measure everything from fenders to blenders that U.S. consumers and firms have purchased or produced this year. It will be revised in the coming months as more information rolls in.

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2020-01-30 13:54:00Z
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U.S. economy grew 2.3 percent in 2019, the slowest of Trump’s presidency - The Washington Post

Growth was 2.1 percent in the final three months of the year, better than economists expected and a sign the economy is not falling into a recession. Growth was 2.1 percent in the third quarter and 2 percent in the second.

The U.S. economy is largely driven by consumer spending, and American households continued to buy goods and experiences at a rapid pace. Numerous polls and surveys show that consumer confidence is high because Americans believe it is easy to get a job and their incomes are likely to stay the same or improve in the coming months.

Government spending has also increased under Trump, providing a boost to economic growth. The deficit neared $1 trillion in 2019, an unprecedented level during good economic times when there is not a major war effort underway. Trump’s tax cuts and additional funding for the military and domestic programs have pushed the gap wider.

Despite the additional government stimulus, Trump has yet to achieve a year of 3 percent economic growth as he vowed before taking office. Trump has repeatedly blamed the Federal Reserve for the shortfall, but most economists say Trump’s escalating trade war and weak growth abroad were major drag on the economy last year. The ongoing fallout at Boeing after the two 737 Max plane crashes also dampened growth since Boeing is usually the largest U.S. exporter but orders dried up after the tragedies.

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2020-01-30 13:34:00Z
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Japan Issues Arrest Warrants for Three Men Suspected of Helping Ghosn Escape - The Wall Street Journal

Carlos Ghosn in Beirut on Jan. 8. Photo: mohamed azakir/Reuters

TOKYO—A Japanese court on Thursday issued arrest warrants for three Americans who prosecutors said were suspected of helping former Nissan Motor Co. Chairman Carlos Ghosn escape Japan in late December by hiding inside luggage.

Tokyo prosecutors said former Green Beret Michael Taylor, 59, and his son Peter Taylor, 26, as well as Lebanese-born U.S. citizen George Zayek, 60, were suspected of violating Japan’s immigration-control laws. The three didn’t immediately respond to a request for comment.

In a statement, prosecutors confirmed the widely reported outlines of Mr. Ghosn’s daring escape, saying he hid in a piece of luggage and boarded a private jet that departed Kansai International Airport in Osaka at about 11 p.m. on Dec. 29. Tokyo deputy chief prosecutor Takahiro Saito also described for the first time what he said was the central role played by the younger Mr. Taylor.

Carlos Ghosn Details Why He Escaped Japan

Former automotive executive Carlos Ghosn said he “fled injustice” in Japan. WSJ’s Chip Cummins explains what a recent crowded press conference in Beirut tells us about Mr. Ghosn’s next steps. Photo: Maya Alleruzzo/Associated Press

Mr. Saito said Peter Taylor came to Japan in the summer of 2019 and met Mr. Ghosn four times at the office of Mr. Ghosn’s Japanese lawyer in Tokyo. Peter Taylor and Mr. Ghosn met again on Dec. 6 and Dec. 28, the day before Mr. Ghosn’s escape, according to the prosecutor, who declined to give the location of those meetings. He said authorities believed the meetings were to plan an escape.

Mr. Saito said he believed Mr. Taylor handed Mr. Ghosn a key to a Tokyo hotel room at the Dec. 28 meeting. On the afternoon of the next day, Mr. Ghosn went to the hotel from his Tokyo house and let himself into a room reserved by Mr. Taylor, the prosecutor said. Mr. Ghosn changed his clothes at the hotel before heading to Osaka, prosecutors said.

Michael Taylor and Mr. Zayek accompanied Mr. Ghosn to the Kansai airport and onto the private jet, Mr. Saito said, confirming earlier reports in The Wall Street Journal. He didn’t say what Peter Taylor did after helping Mr. Ghosn prepare for the journey, but a Japanese magazine called Friday said an American in his 20s resembling Peter Taylor took a taxi to Tokyo’s Narita Airport from the Tokyo hotel and left the country.

At the Kansai airport, Mr. Ghosn sneaked onto the private jet by hiding inside luggage, evading the immigration officers who normally check those departing the country, and flew to Turkey en route to Lebanon, prosecutors said.

Prosecutors didn’t specify the type of luggage in which Mr. Ghosn hid, but The Wall Street Journal has reported it was a black box normally used to carry musical equipment.

Mr. Ghosn was living in Tokyo awaiting trial on financial charges before his escape. After spending 130 days in jail over two separate stints, he was freed on bail in April 2019. He was permitted to travel within Japan but was barred by the Tokyo District Court from leaving the country.

Mr. Saito, the prosecutor, said a raid Wednesday on the office of former Ghosn lawyer Junichiro Hironaka, in which prosecutors broke open drawers to view documents, was aimed at gathering evidence against Peter Taylor.

Mr. Ghosn has said he is innocent of the charges against him. Citing his lengthy detention after his arrest and Japan’s conviction rate of more than 99% for people charged with a crime, he has said he couldn’t get a fair trial in Japan and fled injustice. Another former lawyer for Mr. Ghosn, Takashi Takano, has said he understands why Mr. Ghosn chose to flee given what he described as the Japanese justice system’s bias in favor of prosecutors.

Mr. Saito said people who expressed such views were spreading lies. He said his office, which typically doesn’t announce the issuance of arrest warrants, made an exception in the case of the alleged Ghosn collaborators to make clear its view that the escape was a crime and Mr. Ghosn should have stayed in Japan to face trial.

Write to Peter Landers at peter.landers@wsj.com

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2020-01-30 09:47:00Z
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The Hang Seng is down 5% in two days and the yuan is slumping as the coronavirus spreads - CNN

The Hang Seng (HSI) slid 2.6% on Thursday, adding to losses posted Wednesday when investors returned from an extended break over the Lunar New Year and subjected the index to its worst trading session in months.
In total, the index has fallen more than 6% this month.
The yuan tumbled in offshore trading, briefly breaking below the 7 yuan per US dollar mark for the first time this year. That amount is considered to be a psychologically important marker — when the yuan crossed that threshold last year, markets were briefly rattled.
The currency was last trading offshore, where it moves more freely than on the mainland, at 6.997 yuan per US dollar.
Japan's Nikkei 225 (N225) and South Korea's Kospi (KOSPI) each ended down 1.7% Thursday. Among other Asian markets, Taiwan's benchmark Taiex sank 5.8%, making it the biggest loser in the region.
European stocks and US futures are also falling. The Dow (INDU), S&P 500 (SPX) and Nasdaq Composite (COMP) were all down roughly 0.6%.
The coronavirus crisis keeps escalating. It has now left 170 people dead in mainland China. Mainland China also has more than 7,700 confirmed cases of the virus, with dozens more worldwide.
Airlines around the world have suspended flights to China in response. And analysts have said the virus could hurt China's economy.
"We expect Asian investors to remain focused on the downside risk from the coronavirus outbreak for now as the number of confirmed cases continue to rise, albeit the majority of them in China," said Tai Hui, Asia chief market strategist for JP Morgan Asset Management.
US Federal Reserve Chairman Jerome Powell, meanwhile, said Wednesday that the central bank is "carefully" monitoring the coronavirus situation. Powell predicted it will probably disrupt the Chinese economy. But he also noted that the economic disruption from the disease remains in "very early stages," and it's unclear how far it will spread and how much damage it will do to economies.
The Fed held interest rates steady at its meeting, as expected.
Chinese markets remain closed on Thursday for the Lunar New Year holiday and are expected to reopen Monday.
On the oil market, Brent crude and US oil futures each dropped 1.4% during Asian trading hours. Prices have fallen since last week because of worries that the coronavirus outbreak could affect global oil demand.
— Donna Borak contributed to this report.

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2020-01-30 09:24:00Z
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Rabu, 29 Januari 2020

Coronavirus Outbreak Tests World’s Dependence on China - The New York Times

HONG KONG — The world is quickly learning how much it depends on China.

Ford and Toyota will idle some of their vast Chinese assembly plants for an extra week. Apple is rerouting supply chains. Starbucks has closed thousands of stores and is warning of a financial blow.

On Wednesday, British Airways suspended all flights to mainland China, while United Airlines and Air Canada are joining the growing number of carriers reducing service. Japan’s leaders are bracing for a possible hit. Hotels and tour operators across Asia are watching fearfully as the world’s largest source of tourism dollars tightens its borders.

The mysterious, pneumonialike coronavirus that has killed more than a hundred people and sickened thousands has virtually shut down one of the world’s most important growth engines. Desperate to slow the fast-moving virus, the Chinese authorities have extended the country’s national holiday to Feb. 3, and crippled land, rail and air transport. Entire cities have shut down.

An impoverished nation just four decades ago, China has become an essential part of the modern global industrial machine. China alone accounts for roughly one-sixth of global economic output. It is the world’s largest manufacturer and trader.

It has become so crucial to the operations of American companies that some members of the Trump Administration cite that dependence as a justification for the trade war President Trump initiated two years ago against Beijing, an economic conflict that is forcing businesses to consider shifting their factories in China to countries with better relations with Washington.

Now the coronavirus is testing that dependence.

Automakers like General Motors and Nissan plan to close their factories until the week of Feb. 3 to comply with the longer mandated holiday, while Toyota and Ford said this week that they would close some of their factories a week longer than that because of virus-related disruptions. Companies like G.M., Honeywell, Facebook and Bloomberg restricted travel for employees in China and established their own self-quarantine measures.

On Tuesday, the Seattle-based coffee company Starbucks said it had closed more than half of its 4,292 stores in its second biggest market and said it would take a quarterly and full year financial hit.

The full extent of the hit to the broader business world is not yet clear. Most of China had already been shut down since at least Friday for the annual Lunar New Year holiday, a weeklong nationwide hiatus. But with the outbreak showing no signs of slowing, many companies are already preparing for a longer slowdown.

“Our members are dealing with varying degrees of disruption in their businesses, including supply chain issues, temporary closings of some retail outlets and factories, and other challenges,” said Jake Parker, the senior vice president of the US-China Business Council, which represents major companies. “If travel restrictions and quarantines are expanded or the holiday extended beyond Feb. 8, that will amplify these problems.”

China’s importance goes beyond what it makes. Its consumers buy more cars and smartphones than anybody else. When they go abroad, Chinese tourists spend $258 billion a year, according to the World Tourism Organization, nearly twice what Americans spend.

Global companies were reconsidering their China strategies even before the trade war began. Its growth is slowing, its labor costs are rising, local companies are increasingly competitive and the government has become less accommodating. Still, its skilled worker base, extensive highway and rail systems and vast consumer market make China tough to quit.

Many companies are now looking for temporary stopgaps.

Tim Cook, the chief executive of Apple, said on Tuesday that the iPhone maker was looking for alternative suppliers to “make up for any expected production loss.” Foxconn, a Taiwanese company with an extensive network of factories in China that make gadgets on behalf of Apple and others, said its factories would continue to follow the new holiday schedule.

Apple is not the only company that has had to pivot quickly. Just last week, executives of Honeywell, the American engineering company, traveled to Wuhan for a ceremony related to its plans to open an innovation headquarters. Two days later, Wuhan was put under lockdown by the authorities. Honeywell has since restricted travel to certain parts of China.

Wuhan in particular appeals to major companies because it is a major national transport hub. The auto industry, including General Motors, Honda, Nissan and many others have set up shop there, and many of their suppliers have followed. It is the home to more than one third of all French investment in China.

On Monday, PSA Group, the French automaker, said it had set up crisis communications between Wuhan and its Paris headquarters to determine the potential impact on production. The company employs about 2,000 people in Wuhan through its joint venture and was evacuating 38 expatriates.

It is not clear how quickly businesses will bounce back. During the deadly SARS outbreak 17 years ago, which began in China and killed hundreds globally, some factories paid higher wages to bring workers back and get factories humming again.

Right now, businesses do not know enough to make those kinds of plans. Cummins, the Indiana company, does not know whether it will be able to open its seven sites in Wuhan after the Feb. 3 holiday extension because the city remains under lockdown. The facilities make fuel and power systems for rail and marine industries.

“Literally, we are evaluating on an ongoing basis in real time,” said Jon Mills, a spokesman for Cummins, “and I imagine other places are in the same position as we are.”

Ford, which does not have any operations in Wuhan, said several of its major plants would nevertheless be idled until Feb. 10. A spokesman declined to disclose further details. The factories in four cities churn out nearly half a million vehicles a year, or an average of 9,400 cars a week.

Businesses in other countries are also trying to determine the impact.

In Japan on Tuesday, Yasutoshi Nishimura, the minister of state for economic and fiscal policy, told a group of reporters that, “If the situation takes longer to subside, we’re concerned it could hurt Japanese exports, output and corporate profits.” Chinese visitors account for about 30 percent of all foreign tourists, and Chinese companies are major buyers of Japanese-made components, like semiconductors and lenses.

In Thailand, Chinese sightseers spend nearly $18 billion annually, totaling about a quarter of tourist spending.

“Chinese tourists are the number one tourists to Thailand,” said Yuthasak Supasorn, the governor of the Tourism Authority of Thailand. Mr. Yuthasak said in an interview that the government was exploring ways to compensate business owners who have lost money from the drop in tourists over the past few weeks. The government was even considering reducing parking fees for airlines and excise tax on jet fuel to lure more tourists, he said.

Anan Buates, 45, runs a business driving tourists. Chinese tourists are crucial to his business. So he grew alarmed when tour operators started making last-minute cancellations as the coronavirus emerged. Then, last week, China canceled overseas group tours.

“It’s their right and it’s their policy to prevent the spreading of the coronavirus,” Mr. Anan said. Still, he knows he faces a daunting challenge.

“We survive the whole year because they come the whole year.”

Eimi Yamamitsu contributed reporting from Tokyo, Ryn Jirenuwat from Bangkok and Cao Li from Hong Kong.

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2020-01-29 11:05:00Z
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