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Larry Fink says BlackRock focused on onshore presence in China

FILE PHOTO: Larry Fink, Chief Executive Officer of BlackRock, stands at the Bloomberg Global Business forum in New York
FILE PHOTO: Larry Fink, Chief Executive Officer of BlackRock, stands at the Bloomberg Global Business forum in New York, U.S., September 26, 2018. REUTERS/Shannon Stapleton/File Photo

April 8, 2019

(Reuters) – BlackRock Inc Chief Executive Officer Larry Fink said on Monday that his ambition was to build an onshore presence in China and become the leading global asset manager there.

Rising demand for more diversified and long-term investment solutions in China was likely to drive the growth in assets under management in Asia by 50 percent over the next five years, Fink said in his annual letter http://bit.ly/2OXDWoE to shareholders published on Monday.

The chief executive of the world’s largest asset manager said his China ambitions have not been dented by the prolonged tariff war between the United States and China.

“If anything the Chinese are looking for greater participation of global firms in their asset management space because they also have a growing retirement crisis,” he said https://on.ft.com/2OVqbad in an interview to the Financial Times.

China has slowly started opening its financial markets, allowing foreign institutions to set up operations in the country.

In 2017, it raised the foreign ownership ceiling to 51 percent in securities firms, mutual fund houses, life insurers as well as futures brokerages and said all ownership restriction would be scrapped in three years.

BlackRock already has a foot in the door in China.

It has held talks with China’s CICC Fund Management, a unit of state-backed investment bank China International Capital Corps, for a majority stake in it, according to the FT report that cited people close to the situation.

BlackRock has also been in talks with a handful of other Chinese groups, a person close to the asset manager told FT.

(Reporting By Aparajita Saxena in Bengaluru; Editing by Arun Koyyur)

Source: OANN

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R. Kelly Formally Requests The Court Give Him The Alleged Sex Tapes

Lauryn Overhultz | Columnist

R. Kelly was back in court Friday — this time to ask the court for access to the alleged sex tapes that led to his 10 counts of sexual abuse charges.

The hearing Friday was the start of the discovery phase where the prosecutor began to hand over evidence to the court. Kelly’s legal team did not receive access to the sex tapes during this first phase of discovery, according to TMZ.

Kelly’s lawyer, Steven Greenberg, said they are most anxious to see the sex tapes that Michael Avenatti allegedly turned over to the prosecutors. Greenberg and Kelly have yet to see the tapes that reportedly show Kelly engaging in sexual acts with a 14-year-old girl. (RELATED: R. Kelly Reportedly Asked To Fly To Dubai For A Concert)

Greenberg claims that without access to the sex tapes, he can’t even begin to put together Kelly’s defense. If they believe that it is Kelly in the tapes, Greenberg says they will do a full forensic analysis on the tapes. If not, they’ll attempt to go straight to trial.

Kelly pleaded “not guilty” to 10 counts of sexual abuse charges in Cook County Court on Feb. 25. He recently filed a motion to request access to his passport so that he could perform outside of the U.S.

Source: The Daily Caller

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VW China chief says in talks with five potential battery cell suppliers

People pass in front of a Volkswagen logo ahead of the Shanghai Auto Show
People pass in front of a Volkswagen logo ahead of the Shanghai Auto Show, in Shanghai, China April 15, 2019. REUTERS/Aly Song

April 15, 2019

SHANGHAI (Reuters) – Volkswagen wants to broaden its base of battery cell suppliers in China beyond CATL and is reviewing five companies to see whether they can meet quality and volume requirements for the multi-brand group.

“We are working with five battery cell suppliers qualifying them to group level. With one or two of them it may lead to more close cooperation. In China we have chosen to do this with Chinese players,” Stephan Woellenstein (55), CEO of Volkswagen China Passenger Cars said in Shanghai on Monday.

The push to broaden the company’s supplier base reduces VW Group’s dependency on CATL as its main supplier, Woellenstein said at the Shanghai Auto Show.

Volkswagen needs 160 Gigawatt hours of battery cell capacity as part of a mass production push into electric cars, Woellenstein said.

(Reporting by Edward Taylor; Editing by Tassilo Hummel)

Source: OANN

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Lives forever changed by Christchurch shootings

The Wider Image: Lives forever changed by Christchurch shootings
A flower tribute is seen outside Al Noor mosque where more than 40 people were killed by a suspected white supremacist during Friday prayers on March 15, in Christchurch, New Zealand March 27, 2019. REUTERS/Edgar Su

April 8, 2019

By Edgar Su and Charlotte Greenfield

CHRISTCHURCH, New Zealand (Reuters) – On a small farm on the outskirts of Christchurch in New Zealand, Omar Nabi digs a small hole and sharpens a knife as he prepares to slaughter a sheep as a blessing to his father – a victim of the mass killings at the Al Noor mosque.

Hunched between his father’s collection of rusted cars, Nabi softly said a prayer and slit the animal’s neck, facing it towards Mecca. He removed the pelt and prepared the meat for cooking. Blood was pooled in a hole where he plans to plant a tree. No part of the animal was wasted, he said.

Nabi first slaughtered a sheep when he was 11, each step supervised by his father. Nabi is now 43.

“My father was my whole life… I give thanks for my father, he’s done a lot,” he said. His father, Haji Daoud Nabi, had hoped to build a small mosque on the property, a plan his son intends to complete. “This means a lot to me, Dad put a piece of heaven in Christchurch.”

Several weeks after an attack on Muslim worshippers that killed fifty people and left dozens wounded, the lives of survivors and the families of victims have changed irrevocably. Some survivors feel emboldened, others are haunted by memories of the attack and haven’t been able to return to the mosque.

Burying loved ones brought relief to many families, but reminders of their losses are never far away, from an empty seat at a dinner table to the prospect of Ramadan celebrations in a few weeks.

The shootings on March 15 shook New Zealand and prompted the government to tighten gun laws and launch a powerful national inquiry into the country’s worst peacetime massacre. An Australian man, a suspected white supremacist, has been charged with 50 murders and 39 attempted murders.

(For a photo essay of survivors of the attack and victim’s families, please click this link: https://reut.rs/2WSIG1M)

IN LIMBO

Survivor Mark Rangi, 59, feels his future is in limbo following wounds to both legs. The New Zealander, who lives in Sydney, had never been to Al Noor Mosque before the attack.

After visiting relatives in a nearby town, he had attended the mosque before his return flight to Sydney so he could seek spiritual guidance on the direction of his life.

Instead, he ended up running for his life, bleeding heavily from shrapnel wounds in his legs. After surgery, he is able to walk slowly but Rangi is doubtful he can return to work as a baggage handler in Sydney.

“I wouldn’t have a clue (what to do now). I want to be independent,” he said from a youth hostel where he is staying, overlooking piles of flowers placed in a makeshift memorial. “I’m very lucky that I didn’t get injured worse, so I’m grateful for that.”

SOMETHING’S MISSING

In a one-storey house a short drive from Al Noor mosque, Zahra Fathy turned pages in a photo album compiled by her husband Hussein Moustafa, who died in the massacre. As part of the customary four-month and 10 day-mourning period, she wears simple, unadorned clothing and spends most of her time at home.

“It’s hard to stay thinking about what happened, so I have to escape this and think about what’s next,” she said.

Her husband had spent time at the mosque on most days, organizing its library of religious texts and tending to a vegetable garden, which provided the community with pumpkins, rocket and broccoli.

She is now considering visiting her extended family in Alexandria, Egypt, where she and her husband both grew up, for Ramadan.

“Being all on your own during Ramadan is tough,” said her son, Mohammed, who flew home from a new job in Saudi Arabia on learning of his father’s death.

After some trepidation, Mohammed worshipped last Friday at the Al Noor mosque for the first time since his father’s death.

“I’m praying in the same area, the same corner that my dad used to pray. I wanted to do that,” he said. “It was a bit emotional at first, I got a few tears, it was quite tough. I kept imagining him next to me, I kept looking around, looking for the bullet holes.”

Before Ramadan, Zahra and her family plan to mark the graduation of her youngest son, Zeyad, 22, who also returned to Christchurch from a new job, in Canberra. “He was very, very proud of you,” Zahra told her son.

The family had an active WhatsApp messaging group to stay in touch. Zeyad had shared a recent trip to Europe, where his father had also traveled as a young man, and to Egypt. His father had provided long history lessons on the places Zeyad visited and was overjoyed his son was meeting his Egyptian relatives. Now, the WhatsApp group is not so active.

“It feels like something’s missing… It’s hard to explain, I think it just feels weird if we use it,” Zeyad said.

SENSE OF MISSION

In a sleepy Christchurch suburb where he owns a homeopathy business, Farid Ahmed has worked to bring his community and his country together. Farid, a wheelchair user, survived the shooting but his wife Husna was killed.

He spent one recent Sunday going door-to-door to thank his neighbors for their support. 

When his neighbors heard of his wife’s death, “they came running… they were in tears,” he said. “That was wonderful support and expression of love.”

His message of forgiveness and peace to avoid “a heart that is boiling like a volcano” has made headlines around the world and was broadcast in a heartfelt speech at a national memorial service.

“I admire him. I couldn’t do that,” said a neighbor, a Christian who lives four doors down. “We’ve learnt a lot about Islam over the last few days… (it’s) crazy how similar our two faiths are.”

COPING

Across the city, survivor Sardar Faisal has thrown himself with vigor into helping co-ordinate dozens of volunteers who prepare meals and run errands for the widows of victims of the attack. As a result, he realized he was not spending much time with his own wife and young children.

“Maybe it’s survivor’s guilt, maybe it’s empathy because whenever I visit the affected families, the only thing I think about is that when I was in that area, they were being shot, the bullets that I heard,” he said over tea at a friend’s house.

On the day of the shootings, Faisal was late to the mosque, an uncharacteristic trait that possibly spared his life. When the gunman burst in and started shooting worshippers at prayer, Faisal was in the bathroom, just about to wash in preparation for prayer and so was able to hide from the gunman.

What he saw and heard that day haunts him, he said. He struggles to focus at work and suffers nightmares as deadly scenarios, almost like a video game, run on repeat through his sleep.

REBORN

Alongside sorrow and pain, others feel the close call has reinvigorated their lives.

“It gave me courage,” said Hazem Mohammed, originally from Baghdad, who played dead in Al Noor mosque as the gunman stood over him, wounded and surrounded by the bodies of fellow worshippers.

“I cry for two reasons. The first half because I lost friends, they are gone,” he said. “And the other tears… these tears are for joy, because I was reborn again on Friday the 15th of March 2019.”

(Reporting by Charlotte Greenfield and Edgar Su in Christchurch; additional reporting by Jill Gralow, Natasha Howitt and Tom Westbrook; Editing by Neil Fullick)

Source: OANN

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Rwanda honors those killed in genocide that began 25 years ago

Flowers are seen on a grave site for victims of the Rwandan genocide at the Genocide Memorial in Gisozi in Kigali
FILE PHOTO: Flowers are seen on a grave site for victims of the Rwandan genocide at the Genocide Memorial in Gisozi in Kigali, Rwanda April 6, 2019.REUTERS/Baz Ratner

April 7, 2019

By Clement Uwiringiyimana

KIGALI (Reuters) – Rwandans will gather on Sunday to begin a solemn commemoration of the lives of 800,000 Tutsi and moderate Hutus murdered during the Rwandan genocide, a three-month-killing spree that began 25 years ago.

The ceremony marks the beginning of a week of events to honor the dead. Rwandan President Paul Kagame is scheduled to lay a wreath at Gisozi genocide memorial site, where over a quarter a million of people are buried.

In the afternoon, officials will join around 2,000 people in a “walk to remember” from parliament to the national soccer stadium, where candles will be lit in a night vigil.

At least 10 heads of state were expected to attend, Stephanie Nyombayire, head of communication at the president’s office, told journalists on Saturday. Canadian Governor General Julie Payette and European Commission President Jean-Claude Juncker were also expected.

The 100 days of slaughter began on April 6, 1994, after President Juvenal Habyarimana and his counterpart Cyprien Ntaryamira of Burundi – both Hutus – were killed when their plane was shot down over the Rwandan capital. The attackers have never been identified.

The attack mobilized Hutu government soldiers and allied extremist militia, who orchestrated the genocide to exterminate the Tutsi minority.

In villages across the densely populated country, neighbor turned on neighbor as men, women and children were hacked to death, burned alive, clubbed and shot.

As many as 10,000 people were killed daily. Seventy percent of the minority Tutsi population was wiped out, and over 10 percent of the total Rwandan population.

The fighting ended in July 1994 when the Rwandan Patriotic Front (RPF), a Tutsi-led rebel movement led by Kagame, swept in from Uganda and seized control of the country.

Official policy is to strongly discourage any talk of ethnicity, but the opposition says the tight control of the media and political sphere is also used to stifle dissent, something the government denies.   

(Editing by Katharine Houreld and Keith Weir)

Source: OANN

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Exclusive: Foreign insurers gear up to tap China’s $1.6 trillion pensions business – sources

The logo of British life insurer Prudential is seen on their building in London
The logo of British life insurer Prudential is seen on their building in London, Britain March 17, 2019. REUTERS/Simon Dawson

April 12, 2019

By Sumeet Chatterjee and Alun John

HONG KONG (Reuters) – Foreign insurers including Generali and Prudential Plc are in early talks with authorities to enter China’s private pensions sector, people with knowledge of the matter said, as Beijing opens up to overseas companies.

Hong Kong-based AIA Group and Manulife Financial are also considering similar moves, they said.

Beijing gave approval to the first foreign joint-venture firm to establish a pensions insurance business last month and two of the people said China has been running pilot projects in three provinces involving foreign firms. Those projects end later this year.

Foreign insurers would compete with eight established Chinese pension insurance firms that dominate the potentially lucrative market, where the fast-greying population is set to produce 250 million people older than 60 by 2020.

“The average longevity of people in China is increasing but the pension market remains under-penetrated,” Prudential Asia Chief Executive Nic Nicandrou told Reuters.

Some of the foreign companies are expected to submit applications in the second half of this year to set up pensions businesses, the people said. They declined to be identified as the plans are not firm yet and also are not public.

“POISED”

Last month, Heng An Standard Life, a joint venture between Standard Life Aberdeen and Tianjin TEDA International, became the first foreign joint-venture entity to receive regulatory approval by China to establish a pensions insurance company.

China’s pensions assets, including those managed by the state, grew by 20 percent in 2017 to 11 trillion yuan ($1.64 trillion) and are expected to more than quadruple by 2025, consultancy KPMG said in a report this year.

Underlining the potential, consultant Willis Towers Watson said China has one of the lowest ratios of private-employee annuity pension assets to GDP among major economies at 1.5 percent. That compares with 120.5 percent of GDP in the United States and more than 130 percent in Australia.

Prudential has a 50-50 life-insurance venture with China’s CITIC Group. Nicandrou said the venture is “well poised” to participate in the pension market but he did not elaborate on any specific plans.

Rob Leonardi, Asia regional officer for Italy’s top insurer Generali, said the firm was seeing progress in pensions reform in China.

“If this trend continues, we can expect more foreign funded companies to express further interest in the coming months,” he said. The company declined to give details about its plans for the market.

AIA, which operates the only wholly owned foreign life insurance business in China, declined to comment.

“MATTER OF TIME”

Global asset managers have been lobbying Beijing to offer tax benefits and other incentives to encourage investment in mutual funds for retirement.

Manulife, which signed a pact with Agricultural Bank of China in 2017 to jointly explore opportunities in China’s pension and retirement market, is looking to establish a joint-venture pension management company.

It plans to draw upon its life insurance and asset management joint ventures in China to launch retirement solutions and products, said Calvin Chiu, head of Asia retirement at Manulife Asset Management.

“The government has expressed willingness to open up the financial services sectors in the country, it’s just a matter of time and priority. They do recognize the value that foreign players can add in the pension space,” he said.

China Banking and Insurance Regulatory Commission and the Ministry of Human Resources and Social Security did not respond to Reuters requests for comment.

“All countries are trying to shift pensions away from the iron rice bowl concept,” Gerry Grimstone, chairman of Heng An Standard Life said.

“There have been some attempts at this in China, but, the fact is, there is technology in the west, and an approach to this which the Chinese were keen to bring into their market.”

(Reporting by Sumeet Chatterjee and Alun John; Editing by Neil Fullick)

Source: OANN

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Nadler claims there is ‘open collusion’ between Trump and Russia despite Mueller findings

Despite Attorney General William Barr saying that Special Counsel Robert Mueller found no evidence of wrongdoing regarding the Trump campaign’s contact with Russian operatives, Rep. Jerry Nadler, D-N.Y., concluded on Sunday that there is still evidence of “open collusion.”

Speaking on CBS’ “Face the Nation,” the chairman of the House Judiciary Committee said that the meeting between Donald Trump Jr., Jared Kushner and Russian associates in 2016 at Trump Tower signified that “there was in plain sight open collusion with the Russians.”

In a four-page letter sent late last month, Barr wrote that Mueller's investigation did not find evidence that President Trump's campaign "conspired or coordinated" with Russia to influence the 2016 presidential election.

The letter to Congress also said Mueller's report "does not exonerate" the president on obstruction and instead "sets out evidence on both sides of the question." Barr said there was not sufficient evidence to determine an obstruction of justice offense against Trump.

HOUSE JUDICIARY COMMITTEE DEMOCRATS AUTHORIZE SUBPOENAS FOR MUELLER REPORT

Nadler called Barr a “very biased person” who serves the interests of the White House and called on the attorney general to release the full, un-redacted version of Mueller’s report to the judiciary committee. He argued that his committee has a solid track record of making sure no sensitive information is leaked to the public.

"The committee has a very good record of protecting information which it decides to protect,” he said.

Nadler also addressed Republican complaints over his calls for the release of the Mueller report, despite vehemently opposing the release of the Starr report in 1998.

Nadler was one of the 17 lawmakers still serving in the lower house of Congress today, who back in 1998 voted against release of Independent Counsel Ken Starr’s report on his investigation into President Bill Clinton.

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The Starr Report began in 1994 under Independent Counsel Robert Fiske as a probe into “Whitewater,” a land deal involving President Bill Clinton and First Lady Hillary Clinton when he was governor of Arkansas. But it eventually morphed into questions of obstruction of justice involving Clinton over his relationship with Monica Lewinsky.

The House voted 363-63 to release the Starr Report on Sept. 11, 1998, with all 63 no votes coming from Democrats.

Nadler called the comparison “apples and oranges,” and argued that the Starr report concerned the release of grand jury information to the public rather than to Congress.

Source: Fox News Politics

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FILE PHOTO: An aerial photo looking north shows shipping containers at the Port of Seattle and the Elliott Bay waterfront in Seattle
FILE PHOTO: An aerial photo looking north shows shipping containers at the Port of Seattle and the Elliott Bay waterfront in Seattle, Washington, U.S. March 21, 2019. REUTERS/Lindsey Wasson/File Photo

April 26, 2019

NEW YORK (Reuters) – U.S. economic growth is running at a 1.1% pace in the second quarter as the gains in exports and inventories recorded in the first quarter are expected to reverse, Morgan Stanley economists said on Friday.

“Our preliminary expectations for growth in the second quarter sees large drags from net exports and inventories after their contributions in 1Q,” they wrote in a research note.

Gross domestic product increased at a 3.2% annualized rate in the first three months of the year, driven by a smaller trade deficit and the largest accumulation of unsold merchandise since 2015, the Commerce Department said earlier Friday.

(Reporting by Richard Leong)

Source: OANN

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FILE PHOTO: The Deutsche Bank headquarters are pictured in Frankfurt
FILE PHOTO: The Deutsche Bank headquarters are pictured in Frankfurt, Germany, April 25, 2019. REUTERS/Ralph Orlowski/File Photo

April 26, 2019

By Tom Sims

FRANKFURT (Reuters) – Within hours of the collapse of merger talks with Commerzbank, Christian Sewing scrambled to convince investors and employees that Deutsche Bank can stand on its own two feet.

The Deutsche Bank chief executive told staff, many of whom opposed a merger because of significant job losses, that while he had not been “skeptical” about the Commerzbank talks, he was cautious about the chances of success from the start.

And another top Deutsche Bank executive said on Friday that it had been Commerzbank that initiated the talks, suggesting there was no desperation on their part for a deal.

Commerzbank denied that version of events, ending the apparent truce between the normally highly competitive cross-town Frankfurt rivals over the past six weeks.

German hopes of creating a national banking champion able to challenge global competitors were finally dashed on Thursday when Deutsche Bank and Commerzbank ended their talks due to the risks of doing a deal, restructuring costs and capital demands.

For Sewing, the failure to clinch a deal has left the 49-year-old chief executive of Germany’s largest bank, who took over just over a year ago, with his back to the wall.

Credit ratings agency Standard & Poor’s, which downgraded Deutsche Bank last year, said on Friday that Deutsche Bank “will remain under strain”, adding that it “seems to have acknowledged the need to adjust its strategy”.

Under Sewing, a new leadership has tried to revive Deutsche Bank’s fortunes, but it has faced money laundering allegations and failed stress tests, as well as ratings downgrades.

At the heart of the debate over its future is whether it should focus its business on Germany and draw a line under its costly global ambitions to take on Wall Street’s big guns.

“MARKET PLAY”

Without a deal, Deutsche Bank now finds itself back at the mercy of equity and debt markets, with UBS analysts warning that in a “stress scenario” it could again “be forced into a ‘debt-driven capital increase’ even with solid capital ratios”.

“Deutsche remains a levered market play vulnerable to external events,” the UBS analysts said in a note.

Sewing, along with many analysts, believes Deutsche Bank can go it alone in the short-term, but will be counting on a turnaround in market conditions to do so in the long-run given its dependence on volatile investment bank earnings.

“To reach our return objective, we also need to see a revenue recovery in our more market-sensitive business,” Sewing said on Friday after reporting results.

“These revenues are available to us in better market conditions given our leading positions in many of these businesses, but we need to capture them,” he added.

Revenue at Deutsche Bank’s bond trading division fell 19 percent in the first quarter, it said on Friday, underscoring weakness at its investment bank.

If those earnings do not improve, Berlin’s desire to keep its biggest bank out of foreign hands may start to wane.

“Germany’s globally active companies need competitive financial institutions that can support them around the world,” German finance minister Olaf Scholz said on Thursday.

(Writing by Alexander Smith; Editing by Keith Weir)

Source: OANN

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Panama's former president Ricardo Martinelli yells to the media while arriving to the Electoral Court in Panama City
Panama’s former president Ricardo Martinelli reacts to the media while arriving to the Electoral Court in Panama City, Panama April 26, 2019. REUTERS/Erick Marciscano

April 26, 2019

PANAMA CITY (Reuters) – Panama’s electoral tribunal has ruled that former President Ricardo Martinelli, who is awaiting trial on wiretapping charges, cannot take part in elections on May 5 in which he was running for mayor of Panama City and a seat in Congress, a spokesman for Martinelli said on Friday.

“The ruling of the electoral tribunal has disqualified him as candidate,” said the spokesman, Eduardo Camacho, calling the court’s ruling a “political decision.”

Officials at the tribunal did not immediately confirm the ruling, which also was reported in local media in Panama.

Martinelli, a supermarket tycoon who ran the Central American country from 2009 to 2014, was extradited to Panama last June from the United States and charged with spying on 150 people, including politicians, union leaders and journalists.

A judge had previously cleared Martinelli to run for mayor of the capital. His critics vowed to appeal that decision.

(Reporting by Elida Moreno and Stefanie Eschenbacher; Editing by Bill Trott)

Source: OANN

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FILE PHOTO: Amazon boxes are seen stacked for delivery in the Manhattan borough of New York City
FILE PHOTO: Amazon boxes are seen stacked for delivery in the Manhattan borough of New York City, January 29, 2016. REUTERS/Mike Segar/File Photo

April 26, 2019

(Reuters) – Shares of Walmart, Target and other U.S. retailers fell on Friday as Amazon.com Inc unveiled a one-day delivery plan for its Prime members in a move to further disrupt the fiercely competitive retail landscape.

The e-commerce giant’s announcement on Thursday could cause other brands, manufacturers, retailers, and logistics companies to have to invest more aggressively to compete with Amazon and its delivery, analysts said.

Retailers in recent years have poured billions into ecommerce and faster shipping options and are trying to close the gap with Amazon.

“This is about making it more expensive to catch up and affirms our world view that only the largest and smartest will survive,” Bernstein analyst Brandon Fletcher said.

The move is expected to heighten consumer expectations on e-commerce delivery just like Amazon did with its two-day shipping option for members of its loyalty club Prime, noted analysts.

“The faster you ship, the more people buy,” RBC Capital Markets analyst Mark Mahaney said.

The challenge for non-Amazon players was that very few of the existing logistics and parcel delivery players now have the ability to do nationwide one-day delivery, Morgan Stanley analyst Brian Nowak said.

“And even fewer can do it at the vast scale and reasonable cost that AMZN would need for Prime delivery,” Nowak said in a note.

Walmart Inc’s shares fell about 3 percent, while Target Corp dropped about 5 percent in morning trade.

Shares of Kohl’s Corp, Macy’s Inc and Nordstrom Inc fell about 1 percent. Grocer Kroger Co was nearly 3 percent lower, while consumer electronics retailer Best Buy Inc dropped 2.1 percent.

(Reporting by Soundarya J and Akanksha Rana in Bengaluru; Editing by Maju Samuel)

Source: OANN

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A Chinese woman adjusts a Chinese national flag next to U.S. national flags before a Strategic Dialogue expanded meeting, part of the U.S.-China Strategic and Economic Dialogue (S&ED) in Beijing
A Chinese woman adjusts a Chinese national flag next to U.S. national flags before a Strategic Dialogue expanded meeting, part of the U.S.-China Strategic and Economic Dialogue (S&ED) held at the Diaoyutai State Guesthouse in Beijing, July 10, 2014. REUTERS/Ng Han Guan/Pool (CHINA – Tags: POLITICS BUSINESS)

April 26, 2019

By April Joyner

NEW YORK (Reuters) – Even as the lift from optimism over prospects for U.S.-China trade detente shows signs of wearing off for the wider U.S. stock market, upbeat sentiment around China’s economy could bolster shares of materials companies.

Shares of S&P 500 industrial and technology companies, which were buffeted by last year’s tit-for-tat tariffs as well as slowing global demand, have been very responsive to progress in U.S.-China trade relations and a strengthening Chinese economy. This year, those sectors have outpaced the ascent in the S&P 500, which reached a record closing high on Tuesday.

Materials stocks have not been as sensitive, however, even though they also stand to benefit as a stronger Chinese economy lifts global consumption and industrial output. As China has taken measures to stimulate its economy, its economic data have turned more upbeat. That in turn could aid global growth, which has flagged as a result of China’s cooldown.

“What we’re seeing is China spending more on stimulus: fiscal stimulus and monetary stimulus,” said Kristina Hooper, chief global market strategist at Invesco in New York. “That’s likely to be a positive for materials.”

The People’s Bank of China has cut banks’ reserve requirement ratio five times over the past year and is widely expected to ease policy further to spur lending and reduce borrowing costs. The stimulus appears to have boosted Chinese economic data, with factory activity growing in March for the first time in four months.

Yet so far in 2019, the S&P 500 materials index has underperformed the S&P 500 at large, rising just 11.9% compared with 16.7% for the benchmark index. Moreover, it is among the biggest decliners in the period since the S&P’s previous record closing level on Sept. 20. The materials index has fallen 7% over those seven months, versus a 5.2% gain for technology and a 3% loss for industrials. Only the energy index has dropped more over that period.

A trade agreement could serve as a catalyst for a bump in materials shares as a drag on China’s economy is lifted, some market strategists say. Some commodity prices, including those for copper and oil, have ascended this year as the prospects for the global economy have somewhat brightened.

“It all goes back to the global growth outlook,” said Andrea DiCenso, portfolio manager for alpha strategies at Loomis Sayles in Boston. “With the front run in hard data, we’re beginning to see a pretty significant rally.”

Additionally, a trade agreement is expected to include commitments from China to purchase higher quantities of U.S. products such as soybeans, which could benefit companies that make agricultural chemicals, including DowDuPont Inc and CF Industries Holdings Inc.

CF Industries is scheduled to report quarterly results after the bell on Wednesday, and DowDuPont is scheduled to report before the market open on Thursday.

To be sure, even with a trade agreement, some materials companies could face price pressures. Shares of Freeport-McMoRan Inc fell 10.1% on Thursday after the copper mining company posted a lower-than-expected profit as its production slipped and its costs rose.

A rollback of tariffs on Chinese imports, particularly aluminum and steel, would likely prompt a fall in some commodity prices, which could hurt prospects for certain materials companies, said Gene Goldman, chief investment officer at Cetera Investment Management in El Segundo, California.

Even so, those drawbacks may be outweighed by the support for global demand fostered by a U.S.-China trade agreement.

“You could see a number of companies with lowered expectations bring them back up as they talk favorably about the impact that a trade deal would have on them,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.

(Reporting by April Joyner; additional reporting by Sinéad Carew; editing by Jonathan Oatis)

Source: OANN

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