China to execute driver who killed passenger of ride-hailing firm Didi Chuxing

A Chinese court on Friday sentenced a man to death for raping and killing a female passenger of ride-hailing company Didi Chuxing last year, while he was employed as a driver.

The crime triggered fierce public and government criticism of Didi — whose backers include Uber Technologies, Apple and Japan's SoftBank Group — and led to a safety overhaul at the company.

The court in the eastern coastal city of Wenzhou announced the death penalty for 28-year-old Zhong Yuan, who committed the crime in August, in a post on its Twitter-like Weibo account.

"The criminal means were extremely cruel and the consequences of the crime are extremely serious," the court said.

Didi suspended its carpool service Hitch after the incident and pledged a business overhaul to put a greater emphasis on safety, including strict rules for drivers who want to pick up passengers late at night.

A Didi spokesman said the company had no comment on the court sentence. Reuters was unable to reach Zhong for comment.

A technology news website reported on Wednesday that Didi is looking at cutting headcount in some departments by up to 20 percent, and plans to hire more engineers experienced in safety and driver engagement.

Let's block ads! (Why?)

from Top News & Analysis https://cnb.cx/2Gfb7SD
via IFTTT

Deutsche Bank swings to first full-year net profit since 2014

Deutsche Bank posted its first full-year net profit since 2014 on Friday, despite a weak fourth quarter, amid growing merger speculation and a series of uphill struggles.

The profit number of 341 million euros ($390 million) for 2018 failed to beat market consensus, with a Reuters poll of analysts predicting a figure of 461 million euros. For the fourth-quarter alone, the bank posted as loss of 409 million euros, which also failed to match estimates.

"Our return to profitability shows that Deutsche Bank is on the right track. Now, our priority is to take the next step. In 2019 we aim not only to save costs but also to make focused investments in growth. We aim to grow profitability substantially through the current year and beyond," CEO Christian Sewing said in statement.

Net revenues came in at 25 billion euros for the year and 5.5 billion for the last quarter of 2018, which both narrowly missed estimates in a Reuters poll. Its common equity tier-1 ratio, which indicates a bank's strength, dropped to 13.6 percent in 2018, versus 14 percent at the end of 2017.

The German lender has been under immense scrutiny by investors given its prolonged and ongoing troubles. It has been plagued by fines and several failed restructuring attempts. More recently, its headquarters were raided by prosecutors amid a money-laundering investigation.

James von Moltke, the chief financial officer of Deutsche Bank, told CNBC's Annette Weisbach that the last quarter was "challenging."

"Obviously the market backdrop was very challenging, and we also went through some idiosyncratic, if you like, headlines. In light of that backdrop we are pleased with our performance," he said.

Annual net revenues at the investment banking division fell 8 percent year-on-year, with asset management also falling 14 percent from a year ago. Deutsche Bank said that its asset management arm faced "difficult" market conditions with assets under management dropping 5 percent in the fourth quarter.

"We have been working to stabilize and grow revenues after having executed on the restructuring and reshaping of the business that we did in 2018. The fourth quarter, with the environment that we faced, didn't turn out to be quarter for that turnaround but it is something we continue to work for, look for in 2019."

The bank's ongoing problems and shrinking market capitalization has led to speculation about a potential merger with rival Commerzbank. On Thursday, a Bloomberg report suggested that a merger could happen as early as mid-2019 if efforts to restructure the bank fell short of targets.

Von Moltke said there was "a lot of speculation out there, but we won't comment on mergers."

"We are executing on the plan that we have defined, and as Christian said I think a number of times, we are wholly focused on our own business and on executing the plans we defined," he added.

"We control our own fate."

Sewing said last year that the bank needs to focus on becoming profitable rather than on a merger or an acquisition. The German government has reiterated its support to Deutsche Bank.

Peter Altmaier, minister for economic affairs and energy, told CNBC in Davos last week, that the bank has suffered some setbacks but it is still sound.

"Deutsche Bank ... suffered some setbacks in the past, but it is basically sound and it can recover and so the question is what are the details of such strategy. And as we discussed with the CEO and the board and all the people concerned, I trust in Deutsche Bank and I will lend my political support to Deutsche Bank," Altmaier said.

Let's block ads! (Why?)

from Top News & Analysis https://cnb.cx/2Uwbmwf
via IFTTT

Trump denies in NYT interview that he talked to Roger Stone about WikiLeaks

U.S. President Donald Trump said he never spoke to his longtime advisor Roger Stone about WikiLeaks and stolen Democratic emails posted by the site, the New York Times reported on Thursday.

Stone was arrested last week on multiple charges that included lying to Congress about his communications with Trump campaign officials regarding stolen emails published on WikiLeaks during the 2016 presidential election. Stone pleaded not guilty to those charges.

The arrest was a major development in special counsel Robert Mueller's ongoing investigation of Russian meddling in that election.

When asked by the Times if he ever spoke to Stone about WikiLeaks, the president answered: "No, I didn't. I never did." He also denied directing anyone to talk to Stone about WikiLeaks.

Trump also said he did not help Jared Kushner, his son-in-law and senior advisor, to obtain top-secret government clearance.

NBC News reported last week that Kushner's clearance application was turned down by security specialists amid concerns about foreign influence over him. However, NBC reported, other more powerful authorities overruled those considerations and eventually granted Kushner clearance.

The president's son-in-law has long denied access to sensitive information amid concerns over his relationship with foreign governments.

Trump's denials to the Times are noteworthy as there are no widespread claims of his involvement in either the Stone or Kushner cases, political watchers say.

Read the Times' story for the full interview.

Let's block ads! (Why?)

from Top News & Analysis https://cnb.cx/2Rv9amQ
via IFTTT

Caixin manufacturing PMI for China was 48.3 in January, much lower than 49.5 forecast by Reuters

A private survey on China's manufacturing sector showed on Friday that factory activity contracted in January — confirming views that the world's second-largest economy started the new year on soft footing.

The Caixin/Markit Manufacturing Purchasing Managers' Index (PMI) came in at 48.3 in January, compared to 49.7 in December. Analysts polled by Reuters had expected the Caixin PMI to be 49.5 last month.

A reading above 50 indicates expansion, while a reading below that level signals contraction.

The PMI is a survey of businesses about the operating environment. Such data offer a first glimpse into what's happening in an economy, as they are usually among the first major economic indicators released each month. Investors have been closely watching economic indicators from the world's second-largest economy for signs of trouble amid domestic headwinds and the ongoing U.S.-China trade dispute.

The Caixin/Markit measure followed the Thursday release of China's official manufacturing PMI by the National Bureau of Statistics. The official data came in at 49.5 — higher than 49.3 expected by analysts in a Reuters poll and the 49.4 reported in the previous month.

Thursday's soft manufacturing data showed that Beijing would have to step up support for the slowing economy, economists said. Growth in China slowed to 6.6 percent last year — the lowest expansion rate in 28 years.

Chinese authorities have introduced measures to boost the economy over the past year, but those policies may take time to be effective, economists said. So, economic growth in China could stay weak in the first half of 2019 given both external and domestic challenges, Citi economists wrote in a Thursday note.

Let's block ads! (Why?)

from Top News & Analysis https://cnb.cx/2Sp4L9P
via IFTTT

How India's budget this week will shape its general elections this year

Investors will be paying close attention to India's budget.

So will voters.

As India unveils its interim budget on Friday, Prime Minister Narendra Modi and his party will likely dole out handouts to attract voters ahead of the general election that's due to be called by May. The main planks of India's budget will likely include: A farm sector relief package to attract the crucial farmers' vote, tax cuts and support for badly hit small and medium businesses.

The ruling Bharatiya Janata Party's (BJP) suffered a stinging election defeat in December, losing three key states to the opposition party. The budget is all the more crucial now as it marks the last major chance for the BJP to consolidate support from its voter base, pointed out Rajiv Biswas, Asia Pacific chief economist at IHS Markit.

The government's new budget will likely introduce measures to boost support for rural voters, as well as to small and medium businesses, that were badly affected by the unpopular demonetization program and implementation of the new Goods and Services Tax in the last few years.

The need to maintain fiscal prudence, however, will keep the government's budget in check, preventing them from giving out too many sweeteners, analysts said.

A relief package for farmers will be a key focus in the budget as they make up a large proportion of the Indian electorate and many of them struggle with high debt and crop failures, analysts said.

"A farm sector package will be a centerpiece of the upcoming Budget, due to the crucial importance of the farmers' vote, with 69 percent of India's population still living in rural areas," said Biswas.

"Key measures that could be included in the BJP's farm package include income support measures and interest relief for crop loans for small farmers to help mitigate the impact of rural debt distress in many states," Biswas added.

But the devil is in the details, as debate is ongoing as to what form that relief could take.

Rhetoric has been split on whether the package would include a cash transfer scheme for smaller farmers, loan waivers, or a broader universal income scheme, according to Radhika Rao, an economist at Singapore bank DBS.

Other measures may include personal income tax relief for low income households, and measures to reduce tax and regulatory burden on small and medium-sized businesses, according to Biswas and some other analysts.

Such measures will set the stage for a budget that would be "'popular', yet not profligate," said Vishnu Varathan, Mizuho Bank's head of economics and strategy.

However, he added: "The need for fiscal discipline means that the BJP cannot be unbridled on using the Budget to dish out 'goodies'. So a very mild positive effect may be the outcome."

The farmers relief package is thus both "a political hot potato" as well as "an onerous fiscal burden," said Varathan.

The finance ministry had cut spending amounting to 750.8 billion rupees ($10.55 billion) in the last financial year ending in March 2018.

But in its desperation to find ways to pay for pre-election spending, the government has also pressed the central bank to part with more of its reserves, causing a rift that culminated in the resignation of its governor in December.

According to a Reuters report citing two government sources, the farm relief package alone could run up to at least one trillion rupees ($14 billion) — that's if the government is to have a meaningful impact on which way voters lean in rural areas, home to two-thirds of Indians.

A Morgan Stanley report in January estimated that the farmers package could cost 0.7 percent of India's GDP if it was to focus on small and marginal farmers, or an annual 0.2 percent of GDP or 440 billion rupees.

Regardless, the pressure is on the BJP to address the ongoing farmers' distress, said Rao, as the opposition Indian National Congress has pledged a "minimum income guarantee" to the poor, if voted to power.

Experts say the likely optimal option could be a cash transfer to farmers instead of full loan waivers, but that might be somewhat of a disappointment to farmers, said Varathan.

However, "the overall political calculus will still shift against him (Modi) should he try to be far more generous than the Budget allows," Varathan said.

Given that financial constraint, any election sweeteners in the budget is likely to be long-term in nature, said Capital Economics Senior India Economist Shilan Shah.

"They could include pledges to boost spending in rural areas or exempt more SMEs from the GST. This type of announcement would give the government wriggle room to adjust course if needed at a less politically-sensitive time," he said.

— Reuters contributed reporting to this story.

Let's block ads! (Why?)

from Top News & Analysis https://cnb.cx/2Wzi8De
via IFTTT

Tesla is betting big on China, and here's what Elon Musk had to say about it

To tap into a growing market for electric vehicles in China, Tesla is betting big on the region -- and executives talked up the company's efforts there on an earnings call this week.

Specifically CEO Elon Musk and Tesla's retiring CFO Deepak Ahuja emphasized their aims to get the Tesla Shanghai Gigafactory up-and-running this year, and to deliver U.S-made Model 3 sedans to customers in China immediately. Musk expressed concern that trade tensions between China and the U.S. could escalate, resulting in higher import taxes or tariffs, and other problems for Tesla.

Electric vehicle sales have grown more rapidly in China than other parts of the world, and already comprise about 4 percent of the substantial market there. The growth is thanks, in part, to a shifting array of federal and local incentives for electric vehicle makers, and subsidies for people who buy these cars in China. Tesla wants to establish a stronger foothold in this massive market, before the subsidies and incentives go away.

The industry ministry of China expects annual "new energy vehicle" output to rise to 2 million in 2020, and sales of 7 million new energy vehicles in China by 2025, representing about 20 percent of the overall autos market there.

Tesla faces serious competition from domestic Chinese companies like: the Warren Buffet-backed BYD; SAIC, which makes Roewe electric cars; and Geely, the parent company of Volvo. It also faces competition from foreign automakers that produce electric cars or hybrid, and already know their way around manufacturing in China, like Ford, Hyundai and Toyota.

Here are some of Tesla's biggest plans for China that execs outlined Wednesday's fourth-quarter earnings call, as transcribed by FactSet:

Funding the Shanghai Gigafactory:

"The purchase of the land is a 50-year lease with the government of China. So, it's not capex, but it's operating lease, and that shows up as the cash flow from operations. However, the capex that we will invest is our equipment, and we fully own it. So that will show up as capex. The plan, as we have indicated in the letter, is still to get funding for majority of that capital spending from local China banks. And we expect very attractive rates based on the dialogue we've had and there's a lot of interest." -- Deepak Ahuja

"Yeah. I mean, as a ballpark figure, probably something in the order of $500 million in capex to get to the 3,000-vehicle rate in Shanghai, ballpark figure. And as Deepak was saying, hooking up a very competitive debt financing in China really extremely compelling interest rates and so we do not expect that to be a capital drain on the company." -- Elon Musk

Tesla's advantages in China:

"If you're in the automotive industry you understand how significant this is, but maybe it's not as obvious to everyone. Tesla has the first wholly owned manufacturing facility in China of any automotive company. So, this is profound. And we're very appreciative of the Chinese government allowing us to do this. I think it is symbolic of them wanting to open the market and apply and it farewells to everyone. I'd just say like an order of appreciation for the Chinese government in allowing us to do that. It's a very significant thing." - Elon Musk

On making batteries in Shanghai:

"We'll be making the module and the pack. So, it's really just production of cell supply. And you can essentially use any high-energy density, 2170 chemistry. We expect it to be a combination of cells produced at our Gigafactory in Nevada, cells produced in Japan and cells produced locally in China. And we feel confident of sufficient supply to hit 3,000 units a week." -- Elon Musk

Delivering a lower-priced Model 3:

"We need to bring the Shanghai factory online. I think that's the biggest variable for getting to 500,000-plus a year. Our car is just very expensive going into China. We've got import duties, we've got transport costs, we've got higher costs of labor here. And we've never been eligible for any of the EV tax credits. A lot of people criticize Tesla for being so dependent on incentives. In fact, for a company making EVs, we have the least access to incentives. It's pretty crazy. Because there's so many countries that have put price caps on the EV incentive which differentially affect Tesla. And in China, which is the biggest market for EV's, we've never had any subsidies or tax incentives for vehicles.

"So, it's difficult. Once a car is made there, it is eligible for that. That sounds like that's going to be reducing in China in the coming years. But really, bottom line is, we need the Shanghai factory to achieve that 10,000 rate and have the cars be affordable. It's important to appreciate, the demand for Model 3 is insanely high. The inhibitor is affordability. It's just that people literally don't have the money to buy the car. It's got nothing to do with desire. They just don't have enough money in the bank account. If the car can – if we made it more affordable, the demand is extraordinary." -- Elon Musk

On how demand in China stacks up versus Europe:

"Our relationship actually with Europe and China is how do we get the cars made and on order such that it reaches customers before end of quarter and we don't have a massive number of cars on the order. That's our biggest challenge. It's not demand. It's how do we get the cars there fast enough...I mean, we're not even really trying, I should point out. Our factory is like right now only making cars for China and Europe. That's all it's doing with respect to Model 3. And our whole focus is okay, how do we get those cars made, get them on a ship as fast as possible." -- Elon Musk

On U.S.-China trade relations:

"We don't know what's going to happen with the trade negotiations. So it's very important to get those cars especially to China as soon as possible. We hope the trade negotiations go well, but it's not clear. But we need to get them there while there's sort of de facto sort of a truce on the tariff war. And demand gen is really not one of the things we're thinking about." -- Elon Musk

WATCH: Elon Musk says demand for Model 3 is "insanely high," but cost is too high

Let's block ads! (Why?)

from Top News & Analysis https://cnb.cx/2TwBN4M
via IFTTT

Elizabeth Warren says she wants billionaires to 'stop being freeloaders'

Sen. Elizabeth Warren wants billionaires like Howard Schultz and Michael Bloomberg to subscribe to the United States' "social contract" and pay "their fair share" in taxes, she told CNBC on Thursday in an interview with Jim Cramer.

"I want these billionaires to stop being freeloaders," the Democratic senator said on "Mad Money." "I want them to pick up their fair share. That's how we make a system that works not just for the rich and the powerful, but works for all of us."

Warren, who is considering a 2020 run for president, proposed a "wealth tax" on Americans with over $50 million in assets earlier this month. She has also criticized former Starbucks CEO Howard Schultz — who is also weighing a 2020 presidential bid — for thinking he can "buy the presidency."

On Thursday, the Massachusetts senator broke down her problem with billionaires, even those who contribute to charities and do good social works.

"We have watched billionaires stand up and say, 'Look, I want to run for president. And one of the first planks in my plan is going to be no new taxes for billionaires,'" she told Cramer.

"The thing about taxes is everybody who is an ultra-millionaire has to pay a portion, not just those who sign up, not just those who wave their hands and say, 'I'll do it as long as it goes to the particular charity I like,'" Warren continued. "That is your obligation. That's part of the social contract. That's part of being a citizen of the United States of America."

A 2 percent tax, for example, was "not unreasonable" to impose on the "thinnest one-tenth of 1 percent" who earn multimillions, Warren said, adding that that portion of the U.S. population pays roughly 3.2 percent of their total worth in taxes, compared with the 7.2 percent the 99 percent pays.

That additional money could go to child care, lowering student loan debt, or a Green New Deal, she added.

"All I'm asking for is a little slice from the tippy, tippy top. A slice that would raise — and this is the shocking part, Jim — about $2.75 trillion over the next 10 years," the senator said. "That's money we need so that every kid in this country has a decent childcare opportunity, has an opportunity for pre-K, has an opportunity for a decent school."

Questions for Cramer?
Call Cramer: 1-800-743-CNBC

Want to take a deep dive into Cramer's world? Hit him up!
Mad Money Twitter - Jim Cramer Twitter - Facebook - Instagram

Questions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com

Let's block ads! (Why?)

from Top News & Analysis https://cnb.cx/2HKUaSh
via IFTTT

How Facebook, GE and Apple turned their struggles into stock gains: Cramer

Facebook, General Electric and Apple have all proved how powerful low expectations can be, CNBC's Jim Cramer said Thursday after Facebook and GE surprised Wall Street with their quarterly earnings reports.

Despite Facebook's numerous privacy scandals, the social media giant's fourth-quarter results handily beat analyst estimates, sending the stock 10.82 percent higher in Thursday's session. The beleaguered GE saw a similar reaction: shares of the industrial gained the most in 9 years Thursday after a much better-than-anticipated fourth quarter.

Those two stocks helped the broader market along, with the S&P 500 capping off its best January since 1987.

"You know what most of the stocks that have exploded higher this earnings season have in common? They had already gone down hard going into the quarter," Cramer said on "Mad Money" after markets closed. "We have seen this over and over and over again, including [in] today's session. [...] These stocks are all acting like coiled springs."

Leading up to Thursday's report, Facebook's fate looked especially murky. Negative reports on how the company handled user data grew deafening as revenues slowed, costs soared and people, including celebrities, left the platform.

But when Facebook reported Wednesday night, the weakness seemed to dissipate, with the platform logging user growth, advertising growth, revenue growth and lower costs for its latest quarter.

"I think the stock still has a lot more upside, even after today's glorious run," Cramer said, adding that the company's in a much better place now that its costs are fixed and its revenues are climbing. "When you have operating leverage, you can practically print money, and Facebook is back in the leverage business."

GE, which has also been a beacon of conflict, managed to give investors "a sense of confidence that the worst is over" in its Thursday report, a feat once thought by many to be nigh-impossible, the "Mad Money" host said.

"The new CEO, Larry Culp, ... laid out a road map that could eventually get GE off the do-not-resuscitate list and put it in the ICU," Cramer said. "Believe me, that's a major improvement."

While Culp didn't offer any particularly awesome projections about GE's future, he focused on progress, accelerating health-care orders, announced a tentative settlement with the Justice Department and put his own team in place, Cramer said.

"He's going root and branch, people, and when he downsizes [the] power [division] dramatically, we're going to think of GE as a nifty industrial again," he said. "No wonder it rallied."

As for Apple, the iPhone maker's savvy first-quarter pre-announcement in early January may have saved its stock ahead of earnings, which turned out better than expected. The news was followed by CEO Tim Cook's appearance on "Mad Money," during which he painted an optimistic picture about Apple's long-term prospects.

"To me, this confirms that you should simply own Apple — don't try to trade it," Cramer said. "The service revenue steam keeps growing. [...] Most of the weakness in the iPhone is coming from China, which is experiencing a nasty slowdown, as we know, and a rise in [the] trade-war that's induced a lot of economic nationalism. Plus, the strong dollar makes Apple's pricey phones even more expensive versus the competition."

"But, man, if President [Donald] Trump can work out a trade deal with the Chinese, I bet Apple could become ... close to, maybe, a $200 stock again," the "Mad Money" host added.

All in all, muted expectations can do wonders for a stock, so investors trying to profit during earnings season might want to consider picking up plays that look especially down-and-out ahead of their reports, Cramer said.

"Here's the bottom line: expectations are everything during earnings season, and when they've come down into the gutter, well, all it takes are some decent numbers and your stock can explode higher," he concluded. "So scour the losers here; they may be ready for the comeback of a lifetime."

Disclosure: Cramer's charitable trust owns shares of Facebook and Apple.

Questions for Cramer?
Call Cramer: 1-800-743-CNBC

Want to take a deep dive into Cramer's world? Hit him up!
Mad Money Twitter - Jim Cramer Twitter - Facebook - Instagram

Questions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com

Let's block ads! (Why?)

from Top News & Analysis https://cnb.cx/2Wy3vAj
via IFTTT

Job market was strong in January, but government shutdown may have played havoc with the numbers

After December's surprise surge in hiring, economists expect January's payrolls may have grown by just about 165,000, and there's a chance that may even be too high.

In December, 312,000 payrolls were created and the unemployment rate was 3.9 percent. According to Reuters, the unemployment rate is expected to hold at 3.9 percent and average hourly wages are expected to rise by about 0.3 percent.

Economists said there are a variety of factors that could create noise in the January employment report, starting with the shutdown of the federal government. The payrolls number does not include 400,000 federal workers because they were furloughed with pay, but it could include some government contractors who went unpaid.

"The pace of hiring may have slowed, but I don't think we're going to see a massive decline in the number," said Joseph Song, Bank of American Merrill Lynch economist. "I think the markets are looking at it the same way. Any weakness could be faded."

Economists say there is a chance there could be some payback for the big jump in hiring in December, or that number could be revised lower.

"The surge in seasonal hiring is going to reverse. That's seasonally adjusted but it's larger than usual hiring," said Diane Swonk, chief economist at Grant Thornton. "We could have a larger than usual seasonal layoff. Leisure, hospitality, warehousing, transportation are all areas that had a big move up in November and December."

Swonk expects 170,000 jobs were added in January. "There's a real risk it could come in on the weak side because of all these factors, not just the shutdown but it's the revision to the mean," she said.

Swonk said the shutdown could have rippled through the workforce, impacting everyone from contractors working directly for government to employees at coffee shops near federal offices.

Economists said there is a chance unemployment could rise to 4 percent because of the fact that the furloughed federal workers are counted by the government as temporarily laid off, even though they ultimately should be paid.

"We had that big pickup in participation in December. It was young women. it could easily fall back. It wouldn't be surprising with the shutdown, some people didn't throw their hat in the ring," said Swonk.

The participation rate rises when workers return to the workforce and look for jobs. It can have a negative impact on the unemployment rate and cause it to rise.

"If the participation rate keeps ticking up, even a little bit, it could mean we have much stronger job growth for a longer period of time," said Brian Rose, Senior Economist Americas at UBS Global Wealth Management's Chief Investment Office.

Besides the 8:30 a.m. ET employment report Friday, there is consumer sentiment, construction spending, and ISM manufacturing at 10 a.m. Monthly vehicle sales are also reported Friday.

Let's block ads! (Why?)

from Top News & Analysis https://cnb.cx/2t2U26h
via IFTTT

The ultra-rich are investing differently in 2019 — and it includes cannabis

Super-wealthy investors are making some changes to their portfolios for 2019.

They are increasing their cash holdings and reducing their equity exposure. They are also cutting back on some of their real estate investments and finding a "short-term solution" in fixed income, according to Michael Sonnenfeldt, founder of investment club Tiger 21.

"There's a lot of caution and some of it is [market] volatility," he said Thursday on CNBC's "Power Lunch." Then there is also the "uncertainty of government policy," he added. The members of Tiger 21 are more than 700 strong and have a total of $71 billion in assets.

However, there is one growing trend they are hopping aboard — cannabis.

The industry has seen a big boost since Canada legalized cannabis for recreational use. While marijuana use is illegal in the U.S. on a federal level, a number of states have legalized it for recreational and/or medical use. The stocks of Canadian pot companies like Tilray, which debuted on the Nasdaq last year, and Canopy Growth have since taken off — although not without a lot of wild swings.

The rich, though, are looking at more than just public equities when it comes to cannabis.

"Sometimes it's owning the land that cannabis is grown on, sometimes it's owning the real estate where there are factories, if you will, and sometimes it's owning the companies and then of course there's the public market," Sonnenfeldt said.

Another place the wealthy is investing these days is gold. The precious metal has been in a long sump but prices are now hitting eight-month highs.

For one, there has been no new supply of gold in the last eight years, Sonnenfeldt noted. Then, there is the fact that investors need an alternative to the volatile stock market.

"Typically people first think of gold as an inflation hedge but over history it's really been an instability hedge," he said.

Tiger 21 members, meanwhile, are concerned about the recent proposals to tax the wealthy. However, Sonnenfeldt said they are equally worried about a $1 trillion deficit. The nonpartisan Congressional Budget Office is projecting the U.S. deficit will hit that milestone by 2022.

"Clearly we can't run these kind of deficits and there has to be some change, perhaps, in tax policy but to tax hard work and try to redistribute wealth has never created wealth," he said. "Finding that balance is really what we need to do."

On Thursday, Sen. Bernie Sanders, I-Vt., said he'd be introducing a plan to hike the estate tax — including a 77 percent rate for over $1 billion. His proposal follows that of Massachusetts Sen. Elizabeth Warren, a possible 2020 Democratic candidate, which calls for a 2 percent tax every year on households with assets of more than $50 million. That rate would raise to 3 percent on households with assets over $1 billion. And Rep. Alexandria Ocasio-Cortez, D-N.Y., wants to target the wealthy with a 70 percent marginal tax on income above $10 million.

More from Personal Finance:
5 money mistakes that keep you from getting rich
Moving overseas won't help the very rich dodge Sen. Warren's wealth-tax plan
Here's how to invest that windfall for retirement if you're 40-something or older

— CNBC's Thomas Franck, Stefanie Kratter and Patti Domm contributed to this report.

Disclaimer

Let's block ads! (Why?)

from Top News & Analysis https://cnb.cx/2MGHE4Y
via IFTTT

Stocks making the biggest moves after hours: Amazon, Yum China, Cypress and more

Check out the companies making headlines after the bell:

Shares of Amazon rose as much as 3 percent and then dipped more than 2 percent negative in extended trading Thursday after reporting better-than-expected earnings and light guidance. The e-commerce giant beat on the top and bottom line. Earnings per share were $6.04, which beat estimates of $5.68. Revenue was $72.38 billion, compared to the $71.87 billion forecast by Wall Street. Amazon Web Services revenue beat estimates.

Shares of Cigna, CVS Health, Walgreens, Cardinal Health and United Health dropped after hours after the Trump administration proposed a rule to lower prescription drug prices by targeting backdoor rebates and creating a new transparency to drug markets. The administration's hope is that the new rule will promote competition among drug makers to have the lowest price and out-of-pocket cost to the patient.

Yum China shares jumped more than 8 percent after hours following mixed earnings released Thursday, but the stock later gave up some of those gains. The fast food restaurant company's sales were $1.91 billion, slightly missing estimates of $1.92 billion. Earnings per share were 12 cents, beating estimates by 4 cents. Overall, same-store sales increased 2 percent, beating estimates that they would be down 0.1 percent. KFC same-store sales were up and Pizza Hut same-store sales were down.

Shares of Cypress Semiconductor Corp. jumped more than 5 percent after hours Thursday based on better-than-expected earnings. The company earned $604 million in revenue, beating estimates of $599 million. Earnings per share were 35 cents, higher than the 33 cents forecast by analysts. First-quarter guidance was mostly below consensus estimates. Cypress forecasts adjusted earnings of 22 cents - 26 cents, vs. the estimated 25 cents.

Shares of Deckers Outdoor Corp. surged as much as 10 percent in extended trading following an earnings beat, though the stock later gave up more than half of those gains. The company posted earnings of $6.59 on revenue of $874 million. Those results were well above the estimated earnings of $5.30 on revenue of $824 million. The company issued weak fourth-quarter guidance. Deckers forecast earnings per share of 10 cents, compared to the 27 cent estimate. They predict revenue will be between $360 million and $374 million, well below the $392 expected by Wall Street.

Let's block ads! (Why?)

from Top News & Analysis https://cnb.cx/2WxehXC
via IFTTT

Apple brings the hammer down on Google for app that broke its rules, just like it did with Facebook

Apple on Thursday appears to have revoked Google's enterprise developer certificates in retaliation for an app that violated its policies. The move could make it impossible for Google employees to test iPhone apps and use certain internal apps. The move was first reported by The Verge.

A Google spokesperson said, "We're working with Apple to fix a temporary disruption to some of our corporate iOS apps, which we expect will be resolved soon." Apple did not return a request for comment.

Apple did the same thing to Facebook on Wednesday and, until now, it seemed that Google might have gotten away for violating the same policies as Facebook.

Apple first pulled Facebook's enterprise certificates after a TechCrunch report revealed that the company had been secretly distributing a Facebook Research app to members of a program that allowed the firm to collect data on how they used their devices.

Google was operating a similar program called Screenwise Meter that also skirted Apple's rules. It apologized on Wednesday evening and called its action a "mistake." Both Facebook and Google have shut down the programs on iPhones.

Enterprise certificates let companies develop and install apps without having to publish them to the Apple App Store. But Apple's rules require that the apps are only distributed to employees, not to outside parties.

Apple's decision was said to have "crippled" parts of Facebook, particularly among employees who could no longer access early builds of apps, such as beta versions of Instagram and Facebook Messenger, which they were working on, according to Business Insider. It also prevented Facebookers from using employee-only apps such as Mobile Home and Ride, the latter of which helps with employee transportation.

That means Google's employees could face a similar situation, particularly those who are working on early builds of new applications. Google has lots of popular apps on iPhone including Google Maps, Gmail, Calendar, Hangouts, Google Music and more. One employee who asked to remain anonymous said they were having difficulty accessing an internal app used for checking Google shuttle bus schedules.

Subscribe to CNBC on YouTube.

Let's block ads! (Why?)

from Top News & Analysis https://cnb.cx/2TkwTrO
via IFTTT

House Democrats take a big formal step toward zeroing in on Trump's tax returns

A House committee will hold a hearing next week on presidential tax returns as Democrats clamor for access to President Donald Trump's elusive financial information.

Rep. John Lewis, a Georgia Democrat and chairman of the House Ways and Means Committee's Oversight Subcommittee, announced the event will take place a week from Thursday on Feb. 7. The hearing in front of the Democratic-led panel is called "Legislative Proposals and Tax Law Related to Presidential and Vice-Presidential Tax Returns."

It marks the new Democratic House majority's first formal step on the path to focusing on Trump's tax returns. The president refused to release the documents during the 2016 campaign, in a break with decades of precedent.

The party's left wing has agitated for Ways and Means Committee Chairman Rep. Richard Neal, D-Mass., to take swifter action to get access to Trump's financial information. But Neal has said he is being cautious.

Neal told CNN on Tuesday that he was proceeding "quite judiciously."

"This is the beginning of a court case. I think the idea here is to avoid the emotion of the moment and make sure that the product stands up under critical analysis," he said. "And it will."

Democrats hope the returns can show not only whether Trump's decisions in office have affected his sprawling holdings. They are also seeking more information about any financial connections to Russia.

The president's attorney Rudy Giuliani, the former New York mayor, has said that the president was in talks to build a Trump Tower Moscow through the day that he won the presidency, though he later walked those comments back.

Special counsel Robert Mueller's investigation into whether the Trump campaign coordinated with the Kremlin's efforts to influence the 2016 election is ongoing.

Trump has repeatedly claimed he cannot release his tax returns because they are under audit.

Subscribe to CNBC on YouTube.

Let's block ads! (Why?)

from Top News & Analysis https://cnb.cx/2Shsrwv
via IFTTT

Trump and Pelosi harden positions in wall battle with 2 weeks until the next shutdown deadline

WASHINGTON – There are about two weeks until large sections of the government could shut down again, but neither President Donald Trump nor House Speaker Nancy Pelosi appear ready to back off their positions on funding for Trump's proposed southern border wall.

"There's not going to be any wall money in the legislation," Pelosi, D-Calif., told reporters on Thursday morning as congressional Democrats unveiled their opening offer for border security funding, part of a formal negotiation process currently underway on Capitol Hill.

Last week, Trump signed a short-term measure, which lacked funding for a wall despite his demands, to re-open the government and end a record-long shutdown. But as negotiators from both parties met to begin hammering out a deal that could pass the House and Senate, 16 blocks away at the White House, Trump was eagerly playing the role of third man in the room.

"I don't expect much coming out of this committee," Trump told reporters at a midday photo-op. "I keep hearing the words 'we'll give you what you want.' The problem is, if they don't give us a wall, it doesn't work. Without a wall, it doesn't work."

Trump accused Pelosi of "just playing games," and said the if the committee reached an agreement by the February 15 deadline that did not contain adequate wall funding, "I don't even want to waste my time reading what they have, because it's a waste of time. Because the only thing that works for security and safety for our country is a wall."

The president's tone appeared to shut the door on what had, briefly on Thursday, seemed like a potential opening from Pelosi, albeit one buried in the details of her proposal.

Pelosi suggested that she would be open to finishing a previously authorized project to install so-called "Normandy fencing" across parts of the border. Normandy fencing involves movable sections of metal bars arranged in an "X" pattern, and is designed to stop vehicles, not people.

"If the president wants to call that a wall, he can call that a wall. ... Is there a place for enhanced fencing? Normandy fencing would work," Pelosi said.

In 2016, nearly half of the Arizona-Mexico border was covered with vehicle fencing, including vast sections of Normandy fencing sections.

Asked Thursday whether he would accept different kinds of "physical barriers," like the kinds being suggested by Democrats, Trump replied, "No, because if there's no wall, then it doesn't work."

Several times during his remarks, Trump appeared to muddy his message about the urgency of the wall funding by insisting that the wall was already being built.

"We have a lot of wall under construction," Trump said, "we've given out a lot of contracts over the last three or four weeks … a lot of the wall is soon going to be under construction. The most important area, the Rio Grande area and others. We're not waiting for this committee."

This comment, while technically accurate, was nonetheless misleading. It's true that Customs and Border Protection awarded several contracts last fall both for replacement wall construction and the building of an eight mile stretch of new wall in Texas. But these projects were funded with money appropriated by Congress in 2017, and have nothing to do with the ongoing battle over government funding.

The previous year's budget contained $1.6 billion for border security, and Democrats have signaled a willingness to renew that amount. But Trump's most recent demand was for more than three times as much, $5.7 billion in wall funds, a figure that was dead on arrival in the Democrat-controlled House.

Despite his pessimism Thursday, Trump said he would nonetheless wait until February 15 to decide whether or not to declare a national emergency to appropriate wall funds. But he also refused to rule out the possibility of another partial government shutdown.

"By having the shutdown, we've set the table for where we are now," Trump said, who seemed to imply that Republicans were in a stronger position now than they had been before the 35 day shutdown.

"If I didn't do the shutdown, people wouldn't know anything about the subject," Trump added. "Now they understand the subject."

Wider public understanding of the subject, however, may not be a good thing for the White House.

A recent CBS News poll taken during the shutdown found that 71 percent of Americans "don't think the issue of a border wall is worth a government shutdown, which they say is now having a negative impact on the country."

Let's block ads! (Why?)

from Top News & Analysis https://cnb.cx/2UxMCDN
via IFTTT

CVS, Cigna fall after Trump administration proposes rule to lower drug prices

The Trump administration announced Thursday it plans to target "backdoor rebates" as it seeks to lower drug costs for consumers.

The Department of Health and Human Services said the proposal would address a "perverse incentive" related to rebates on prescription drugs paid by manufacturers and explicitly exclude those from the safe harbor definition of a "discount." Instead, the department said the proposal would create a new safe harbor for discounts made available to patients at the pharmacy counter.

Shares of health stocks slipped in after-hours trade following the announcement. CVS Health and Cigna fell 3 percent, while Cardinal Health slipped 2 percent. Walgreens Boots Alliance and UnitedHealth also dipped about 1 percent.

This story is developing. Please check back for updates.

Let's block ads! (Why?)

from Top News & Analysis https://cnb.cx/2ML7lkR
via IFTTT

China's Xi wants to meet US halfway on trade deal, Trump says

China's leader Xi Jinping told U.S. President Donald Trump in a letter that he hopes both sides will be able to meet each other halfway to reach a trade agreement before a March 1 deadline, Trump said on Thursday.

Trump read from the letter to reporters during a White House meeting with China's Vice Premier Liu He, who is in Washington trying to reach a deal that would ease trade tensions between the world's two largest economies.

The White House released a lengthy statement after the meeting. Read it in full below:

Statement of the United States Regarding China Talks

Office of the Press Secretary
FOR IMMEDIATE RELEASE
January 31, 2019

Statement of the United States Regarding China Talks

For the last two days, high-ranking officials from the United States and China have engaged in intense and productive negotiations over the economic relationship between our two countries. The United States appreciates the preparation, diligence, and professionalism shown throughout these meetings by Vice Premier Liu He and his team.

The talks covered a wide range of issues, including: (1) the ways in which United States companies are pressured to transfer technology to Chinese companies; (2) the need for stronger protection and enforcement of intellectual property rights in China; (3) the numerous tariff and non-tariff barriers faced by United States companies in China; (4) the harm resulting from China's cyber-theft of United States commercial property; (5) how market-distorting forces, including subsidies and state-owned enterprises, can lead to excess capacity; (6) the need to remove market barriers and tariffs that limit United States sales of manufactured goods, services, and agriculture to China; and (7) the role of currencies in the United States–China trading relationship. The two sides also discussed the need to reduce the enormous and growing trade deficit that the United States has with China. The purchase of United States products by China from our farmers, ranchers, manufacturers, and businesses is a critical part of the negotiations.

The two sides showed a helpful willingness to engage on all major issues, and the negotiating sessions featured productive and technical discussions on how to resolve our differences. The United States is particularly focused on reaching meaningful commitments on structural issues and deficit reduction. Both parties have agreed that any resolution will be fully enforceable.

While progress has been made, much work remains to be done. President Donald J. Trump has reiterated that the 90-day process agreed to in Buenos Aires represents a hard deadline, and that United States tariffs will increase unless the United States and China reach a satisfactory outcome by March 1, 2019. The United States looks forward to further talks with China on these vital topics.

Let's block ads! (Why?)

from Top News & Analysis https://cnb.cx/2DLvmFE
via IFTTT

Amazon Web Services reports 45 percent jump in revenue in the fourth quarter

Amazon's cloud-computing division said revenue jumped 45 percent in the fourth quarter, as the company continued to cement its lead over Microsoft and Google.

Sales at Amazon Web Services climbed to $7.43 billion from $5.11 billion a year ago, topping the $7.29 billion consensus estimate among analysts polled by FactSet. AWS revenue represented 10 percent of total quarterly sales at Amazon.

The cloud business has become crucial to the success of its parent, not only for revenue but also for profits.

Operating income for AWS in the quarter was $2.18 billion, exceeding the $2.09 billion FactSet consensus estimate. The unit accounted for 58 percent of Amazon's overall operating income. AWS' operating margin was 29 percent, shrinking from 31 percent the prior quarter.

AWS beat Microsoft and Google to the market for cloud infrastructure, which companies use to outsource their computing and data storage needs, and has held onto its lead.

However, Microsoft's business is growing faster, even though it's still smaller than AWS. The software company said on Wednesday that Azure cloud revenue grew 76 percent in the latest quarter.

Brian Weiser, an analyst at Pivotal Research Group, had estimated that AWS would generate fourth-quarter revenue of $7.41 billion.

"With substantial upside potential for AWS and a strong track record, we think we can safely assume significant ongoing revenue growth for the forseeable future," wrote Weiser, who initiated Amazon coverage with a "buy" rating earlier this month.

AWS' big announcements in the period included the introduction of new computing instances that rely on ARM-based server chips, custom-built chips for accelerating artificial-intelligence work and a plan to offer hardware equipped with AWS software for corporate data centers.

WATCH: It's an Amazon-Microsoft cloud battle now, says Dan Ives

Let's block ads! (Why?)

from Top News & Analysis https://cnb.cx/2GadGoZ
via IFTTT

Amazon to report fourth-quarter earnings after the bell

Amazon is reporting its all-important fourth-quarter earnings on Thursday after the bell.

The fourth-quarter is typically the largest for Amazon because it includes the holiday shopping season. Investors remain bullish on the quarter, but will be paying close attention to the top line, as revenue fell short of expectations in the last two quarters.

Here's what Wall Street is expecting for the quarter, according to Refinitiv consensus estimates:

• EPS: $5.68 vs. $3.75 per share last year

• Revenue: $71.9 billion vs. $60.5 billion last year

• AWS: $7.3 billion (FactSet estimate) vs. $5.1 billion last year

The company is expected to report earnings of $2.8 billion in the fourth quarter — only the third time above $2.5 billion.

Amazon has seen a huge boost in profitability in recent years, after seeing growth in businesses like cloud, advertising and the third-party marketplace, where margins are bigger but sales are smaller. Amazon is historically known for running on thin margins because it reinvests most of its profits back into the company.

Amazon stock is up 18 percent over the past year. Its market cap, more than $840 billion as of Thursday afternoon, is the largest of any publicly traded company in the world.

Let's block ads! (Why?)

from Top News & Analysis https://cnb.cx/2GbOPkB
via IFTTT

The Fed is on hold for now, but some in the market are still bracing for more hikes

Markets roared with approval Wednesday after the Federal Reserve cemented its "patient" approach to rate hikes, but there was little follow-through Thursday, suggesting that the road ahead may not be so smooth.

The end of rate-hiking cycles has been almost unambiguously bullish for risk assets like stocks. The S&P 500 has averaged gains of 6.1 percent three months after the central bank stops, and 23.5 percent in the two-year period, according to CNBC analysis using Kensho.

But while Fed Chairman Jerome Powell made it abundantly clear that policymakers are in pause mode for the time being, there's no telling how long that could last.

Should economic barometers hold up and some of the world's geopolitical problems get solved in a timely manner, the Fed could change its tune before 2019 is over.

"Given the right underpinning, I think he'd like to raise rates at least once or twice if there's an opportunity to do that," said Quincy Krosby, chief market strategist at Prudential Financial. "Then he'd need a global backdrop that is solid and a U.S. economy that is on solid footing. We have that now, but there still remain concerns that the economy is going to slow. That tug-of-war has not eased."

Indeed, Powell gave no indication how long the pause would last or whether his fellow officials have changed their minds from the two hikes they had indicated in their year-end forecasts in December.

He said he still sees the U.S. economy in solid condition, but pointed out global concerns like Brexit, the Chinese economy and financial conditions that have "tightened considerably," even though most gauges show they remain loose.

""I would want to see a need for further rate increases," he said at a news conference following the Federal Open Market Committee meeting.

The strikingly dovish tone of the FOMC's post-meeting statement sent stocks surging higher. But it also generated some conversation around "down-side concerns that the Fed 'knows more than we do,'" said Catherine L Mann, global chief economist at Citigoup.

Mann said, however, that her team's research indicates that concerns over growth will fade.

"Powell argued that future policy would be a function of data, and our economists' base-case is for strong domestic growth supporting two hikes in 2019," the economist said in a note.

Similarly, Lindsey Piegza, chief economist at Stifel, said the Fed probably isn't done for the year though it may not execute the planned two rate hikes in the current forecast. The fed funds rate currently is targeted between 2.25 percent and 2.5 percent, the result of eight quarter-point increases that began in December 2015.

As the year progresses, "continually solid domestic data and a reduced threat from overseas would likely create a thaw, allowing at least one further policy adjustment before the Fed throws in the towel," Piegza wrote.

The market still does not anticipate any rate hikes this year, and Citi strategists note that the Fed typically starts cutting rates eight months after the last increase. Current futures pricing points to a 25 percent chance of a quarter-point reduction by the end of the year, and no probability of a hike.

"What happens if we have a spate of unequivocally strong economic data?" Prudential's Krosby said. "I think you're going to start seeing the fed funds futures market signaling a rate hike, and probably the Fed will as well."

Let's block ads! (Why?)

from Top News & Analysis https://cnb.cx/2Uy5Olc
via IFTTT

Wild weather: Energy traders scramble to cope with arctic blast's abrupt end

It appears the polar vortex's days are numbered, and the situation is hitting natural gas prices.

According to The Weather Co.'s senior meteorologist, it's sending traders scrambling this week to adjust to the changing forecast.

"This is one of the more dramatic changes I can ever remember," Daniel Leonard said Thursday on CNBC's "Futures Now." "You don't normally see stuff like this, and this is giving our traders a lot of angst."

The new forecast calls for spring-like weather to blanket about three-quarters of the country.

"We're talking about going from minus-50 wind chills in Chicago yesterday and today to plus 50 degree temps over the weekend," he said.

While temperatures colder than Antarctica grip parts of the nation, traders are looking to unwind natural gas trades to cope with next week's milder weather. The commodity, which is closely correlated to the weather, has already fallen 9 percent over the past five sessions.

"It's really hard to get traders excited when you only have a couple of days worth of cold interspersed in a warm overall pattern," he added.

Even if the weather turns cold again in February and March, Leonard isn't sure if higher natural gas prices will hold.

"I can remember the polar vortex winter of 2014. In that particular winter, the reason why nat gas prices were so high that year is because the cold was sustainable. The polar vortex kept on coming," Leonard said. "This time around, it comes down for just a few days, and then it bounces right back out like a yo-yo."

Let's block ads! (Why?)

from Top News & Analysis https://cnb.cx/2HGH9cA
via IFTTT

Arizona lawmaker pushes porn tax to pay for Trump's border wall

An Arizona legislator has proposed a way to fund a border wall: Charge internet users a tax for viewing pornography.

Earlier this month, Arizona Republican state senator Gail Griffin proposed HB 2444. The legislation would require manufacturers and distributors of internet-connected devices to block people in the state from viewing adult content — unless those users pay a $20 tax.

Revenue from the so-called porn tax would go toward building a border wall between Mexico and the Grand Canyon State, according to the text of the bill.

President Donald Trump and Congress have been battling over the president's $5.7 billion request to build the barrier, leading to a month-long partial shutdown of the federal government. Both parties agreed to re-open the government for three weeks — up until Feb. 15 — in order to negotiate an immigration deal.

Griffin did not respond to requests for comment.

This isn't the first time state legislators around the country have set their sights on taxing or regulating adult video content. Similar measures have been proposed in other states, including South Carolina and Rhode Island.

Here's what you need to know about so-called sin or excise taxes.

Indeed, your vices have helped fund state and federal coffers in the form of excise taxes — levies that are applied to the consumption of a particular good or service.

Excise taxes on gas, airline tickets, tobacco, alcohol and more hit a total of $83.8 billion in 2017, accounting for 2.5 percent of federal tax receipts, the Tax Policy Center found.

States and municipalities also take their slice of revenue when you choose to indulge. For instance, all 50 states apply excise taxes to sales of beer and cigarettes.

"Alcohol taxes are levied at the wholesaler level and hidden from the consumer," said Katherine Loughead, a policy analyst with the Center for State Tax Policy at the Tax Foundation.

"The brewers and distillers pay them, and they are passed onto the consumer in the form of higher prices," she said.

See below to find where your state ranks in excise taxes.

Vaping and pot — vices that are relatively new to taxation — are also subject to state and local levies.

Recreational pot comes with a 37 percent sales tax in Washington state, while Minnesota applies a 95 percent tax on the wholesale value of vaping products, according to the Tax Foundation.

On paper, it would seem that sin taxes discourage bad behaviors; in reality, taxpayers find other ways to get their fix. This can cause fluctuations in revenue.

See below for a Tax Foundation chart, showing how New York's cigarette tax revenue shifted (blue line) in response to hikes on that levy (yellow line).

Right now, New Yorkers are paying $4.35 in taxes when they buy a pack of smokes — the highest in the country.

"People will shift away from smoking or they cross to lower tax jurisdictions to get their cigarettes," said Loughead.

Given the multitude of excise taxes that apply in different states and cities, keep an eye on these and other levies if you're thinking of relocating.

For instance, Nevada has no state income taxes, but sales, excise and gaming taxes all apply.

"You want to believe that taxes are cheaper in state A, but when you look at the overall picture, especially the way you structure your affairs, you'll pay more," said Troy Lewis, CPA and chair of the American Institute of CPAs' qualified business income tax force.

More from Personal Finance
Secret experiment suggests one key way to boost retirement savings
What you need to know as tax season begins
This retirement plan feature can help you save on taxes

Subscribe to CNBC on YouTube.

Let's block ads! (Why?)

from Top News & Analysis https://cnb.cx/2HLwSM6
via IFTTT

Elon Musk blames SpaceX layoffs on 'absolutely insane' Mars rocket and satellite internet projects

During Wednesday's investor call for his public car company, CEO Elon Musk took a rare moment to talk about his private rocket company.

Musk explained that the recent layoffs at SpaceX were different than those at Tesla, the latter of which he said came from the need "to be relentless about costs" to keep the electric vehicles "affordable."

Rather, Musk said the SpaceX layoffs were due to the company's "two absolutely insane projects:" Starlink (a network of thousands of tiny satellites intended to bring global high-speed internet coverage) and Starship (the enormous rocket SpaceX is building to transport humans and cargo to-and-from Mars).

Starlink and Starship would more than "bankrupt the company" if SpaceX did not reduce costs, Musk said.

"And so, SpaceX has to be incredibly spartan with expenditures until those programs reach fruition," Musk added.

This was Musk's full quote about SpaceX during the Tesla fourth-quarter earnings call:

"On the SpaceX side, the cost reduction was for a different reason unrelated to – SpaceX has two absolutely insane projects that would not only bankrupt the company. There's Starship and Starlink. And so, SpaceX has to be incredibly Spartan with expenditures until those programs reach fruition."

SpaceX this month laid off about 10 percent of its workforce, or more than 600 employees, across all its departments. SpaceX said in a statement that there are "extraordinarily difficult challenges ahead" if the company is "to succeed in developing interplanetary spacecraft and a global space-based Internet." Musk and President Gwynne Shotwell announced the layoffs at an all-hands meeting on Jan. 11. The company offered assistance with job hunting and resume-writing, as well as other severance benefits.to those who were let go. SpaceX now employs about 6,400 people, CNBC reported.

Starlink is one of the keys to the financing SpaceX's future endeavors. Musk's company is going head-to-head with several other proposed constellations of satellites, which all promise to provide high-speed broadband internet to anywhere in the world. In March, the FCC gave SpaceX permission for its plan to launch 4,425 satellites into space. SpaceX launched the first two test satellites last February.

Starship is the giant rocket SpaceX is building to send humans and cargo to Mars. A prototype "hopper" Starship is being built at SpaceX's facility near Brownsville, Texas – although the company is facing a setback in Starship's development after the top half of the rocket blew over. Musk said the damage will take "a few weeks to repair."

2019 promises to be another banner year for SpaceX. The company ended a record-breaking 2018 with the company's 21st launch of the year, sending up the first of the Air Force's new network of GPS (Global Positioning System) satellites.

Beyond the Starlink and Starship programs, SpaceX is focused on readying the Crew Dragon capsule for its maiden launch. Built as a part of NASA's Commercial Crew program, Crew Dragon is aiming for a first test launch sometime in the next month. If all goes according to plan, SpaceX will then put NASA astronauts on Crew Dragon for the second test launch – possibly representing the first time U.S. astronauts will launch from U.S. soil since the end of the Space Shuttle program in 2011.

– CNBC's Lora Kolodny contributed to this report.

Let's block ads! (Why?)

from Top News & Analysis https://cnb.cx/2RqK60t
via IFTTT

Facebook removes nearly 800 fake pages and accounts traced to Iran

Facebook on Thursday announced it removed 783 pages, groups and accounts with ties to Iran as part of the company's continued effort to rid misinformation from its services.

The company said the Iranian accounts and pages were used to push Iranian propaganda "on topics like Israel-Palestine relations and the conflicts in Syria and Yemen, including the role of the US, Saudi Arabia, and Russia."

At least one of the pages had about 2 million followers. Altogether, the accounts spent less than $30,000 on Facebook and Instagram ads, the company said. The accounts and pages also hosted eight events, dating back to May 2014. As many as 210 people expressed interest in attending at least one of the events, Facebook said.

WATCH: Here's how to see which apps have access to your Facebook data — and cut them off

Let's block ads! (Why?)

from Top News & Analysis https://cnb.cx/2sWpa7J
via IFTTT

Many Americans are doing this to get out from under debt. But beware the risks

It's a Catch-22: You want to make progress on paying off your debt but, in order to do so, you take out yet another loan.

A new study from online lending company LendingTree finds that people are using personal loans to do exactly that: manage existing debt.

That comes as outstanding personal loans have reached more than $125 billion in combined balances. And the tally of personal loans today is about 20 million, according to LendingTree.

Meanwhile, total credit card debt has climbed to more than $1 trillion.

More from Personal Finance:
You're probably blowing your budget on these non-essential costs
Secret experiment reveals one key way to boost retirement savings
Here's why cost-conscious travelers continue to blow their vacation budgets

Most personal loan requests — 61 percent — are aimed at helping people get some wiggle room on their debts, LendingTree found.

The No. 1 reason people take out personal loans is debt consolidation, followed by credit card refinancing, the company's research found.

Consumers who applied for personal loans to manage their debts were also starting out with the highest balances. The average is $14,107 for credit card refinancing and $12,670 for debt consolidation.

The research also found that individuals with fair to good credit – or credit scores from 600 to 749 – are most likely to want to take personal loans to help manage their debts.

Those who have high credit scores and low credit scores were least likely to pursue personal loans.

Personal loans can have both advantages and disadvantages for borrowers.

If you have multiple accounts, taking out a personal loan can be an opportunity to consolidate that debt into one account and possibly get a lower interest rate.

But in order to knock off those balances for good, you need to have a concrete plan for repaying them.

While personal loans typically charge less than credit cards, it might make more sense to save up and pay for new purchases with cash instead.

LendingTree's research is based on data from borrowers who sought personal loans on its platform in 2018.

Let's block ads! (Why?)

from Top News & Analysis https://cnb.cx/2WwDZLH
via IFTTT

The 15 most difficult places to buy a home in the US

For wannabe homeowners in real estate markets full of well-qualified buyers, competition is fierce, according to recent data from online loan marketplace LendingTree. Especially out West.

"Of the top 10 most competitive cities, only two, St. Louis and Boston, were not in a western U.S. state. High-paying tech jobs, common in places like Oregon, San Francisco and Seattle, likely help fuel market competitiveness in some western cities," the site reports.

In the most competitive areas, potential homeowners are vying against other buyers who are often pre-approved for mortgages, have excellent credit scores and are able to offer hefty down payments. They not only have to be strong candidates, but they have to beat out other qualified buyers as well.

Here's the full list of the 15 housing markets were competition is the toughest.

Percent of buyers with good or excellent credit: 58
Average down payment: 17 percent
Median home price: $829,000

Percent of buyers with good or excellent credit: 55
Average down payment: 14 percent
Median home price: $239,990

Percent of buyers with good or excellent credit: 52
Average down payment: 14 percent
Median home price: $124,900

Percent of buyers with good or excellent credit: 48
Average down payment: 15 percent
Median home price: $275,000

Percent of buyers with good or excellent credit: 58
Average down payment: 14 percent
Median home price: $300,000

Percent of buyers with good or excellent credit: 57
Average down payment: 16 percent
Median home price: $699,900

Percent of buyers with good or excellent credit: 50
Average down payment: 15 percent
Median home price: $312,650

Percent of buyers with good or excellent credit: 65
Average down payment: 19 percent
Median home price: $689,950

Percent of buyers with good or excellent credit: 52
Average down payment: 14 percent
Median home price: $299,900

Percent of buyers with good or excellent credit: 54
Average down payment: 15 percent
Median home price: $145,000

Percent of buyers with good or excellent credit: 65
Average down payment: 19 percent
Median home price: $939,000

Percent of buyers with good or excellent credit: 59
Average down payment: 17 percent
Median home price: $1.3 million

Percent of buyers with good or excellent credit: 57
Average down payment: 15 percent
Median home price: $449,900

Percent of buyers with good or excellent credit: 55
Average down payment: 17 percent
Median home price: $799,250

Percent of buyers with good or excellent credit: 56
Average down payment: 16 percent
Median home price: $459,900

Interestingly, the most difficult places to buy a home aren't necessarily the most expensive. Although the median home price in Denver, $459,900, according to Zillow, is significantly higher than the national median of $275,000, it's still well below the median in expensive markets like New York and San Francisco.

Other competitive cities are even cheaper: St. Louis, Missouri, with a median home price of $145,000, comes in at No. 6. And Milwaukee, Wisconsin, with a median home price of $124,000, earns the No. 10 spot.

That means that, even in a more affordable housing market, it can still be challenging to buy a home.

Like this story? Subscribe to CNBC Make It on YouTube!

Don't miss: Millennial who saved over $1 million by age 30: Paying yourself first could be holding you back

Let's block ads! (Why?)

from Top News & Analysis https://cnb.cx/2ToD5yZ
via IFTTT