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Goldman Sachs slants research to help Democrats, top White House adviser says

Kevin Hassett: Goldman Sachs ‘looks like the Democratic opposition’ Kevin Hassett, one of President Donald Trump’s top economic advisers, suggested that Goldman Sachs may be slanting its economic research to help Democrats ahead of the midterm elections. The Goldman Sachs economics team “almost at times looks like the Democratic opposition,” Hassett told CNN’s Poppy Harlow on Tuesday. The comment came after Harlow asked Hassett about a Goldman Sachs research report warning that a 25% US tariff on all imports from China could wipe out corporate profit growth in 2019. Hassett said he hadn’t read the research, but went on to criticize Goldman’s track record. Hassett claimed its analysis of last year’s tax cuts was “really, really wrong and timed in a partisan way.” He said Goldman’s analysis predicted the tax cuts would be “really harmful” to the economy or have little impact before jacking up its forecast after they passed. ... Read More »

Land O'Lakes CEO Beth Ford, from the cornfield to the C-suite

Land O’Lakes CEO: Farmers need answers on trade Beth Ford’s first job paid $2 an hour. Early in the morning, she climbed on the school bus to go detassel corn, joining other kids in Sioux City, Iowa, who did it as a summer job. “Back then, two dollars an hour, that was real money,” Ford tells CNN’s Poppy Harlow in the latest episode of Boss Files. Now, as the first female CEO of Land O’Lakes — and the first openly gay female CEO in the Fortune 500 list of largest US companies — Ford remembers a conversation with her mother years ago that taught her that “while we may not have everything, we have enough, and given what we have, much was expected of us.” “She said, ‘Do you understand what is expected of you? Do you understand how much you have? Don’t disappoint,’ and I was like, ‘I’ve gotta ... Read More »

The next big test for Elon Musk arrives this week

Elon Musk is being sued by the SEC 1. Back to business: The SEC is off Elon Musk’s back. Now he and Tesla can return to that other pesky problem — making and selling cars. Tesla will turn in a critical production report on Tuesday that will show investors whether the company can sustain and surpass its long-promised target of building 5,000 Model 3s per week. That report will go a long way toward determining whether Tesla (TSLA) can fulfill Musk’s pledge to turn a profit in the third and fourth quarters. Since it went public, Tesla has recorded only two quarters in the black. It posted the largest loss in its history in the second quarter as it cranked up production to clear the 5,000 bar in the last week of June. That seems like a long time ago. In early August, Musk sent the tweet that led to ... Read More »

CEOs are cashing in on the market boom

Will stocks keep climbing in 2019? CEOs are using the market boom to quietly cash in their own chips. Insiders at US companies have dumped $5.7 billion of stock this month, the highest in any September over the past decade, according to an analysis of regulatory filings by TrimTabs Investment Research. It’s not a new trend. Insiders, which include corporate officers and directors, sold shares in August at the fastest pace in 10 years as well, TrimTabs said. The selling is noteworthy because it occurred as the market rebounded sharply from an early 2018 tumble. Fueled by tax cuts and a strong economy, the Dow recently notched its first record high since January. Some corporate insiders have much of their net worth tied up in stock, so it could be that they are simply exercising caution. The bull market, already the longest history, can’t last forever. “It’s a very prudent ... Read More »

General Electric is in a sharp decline

GE changed our lives. Why was it kicked out of the Dow? General Electric, once America’s most valuable company, is now in sharp decline. In a year full of dubious landmarks, GE has encountered another: The storied conglomerate is now worth less than $100 billion. That hasn’t happened since March 2009 — during the Great Recession. GE’s (GE) stock crash — down by nearly two-thirds since the end of 2016 — has knocked the company down to the 59th most valuable in the S&P 500. It’s a stunning reversal. GE was No. 1 in the S&P 500 as recently as 2004, according to S&P Dow Jones Indices. At the time, it was worth nearly $400 billion. Now GE is worth just a tenth of Apple (AAPL), the $1 trillion top dog of the market, and it’s fallen behind Salesforce (CRM), PayPal (PYPL) and Nvidia (NVDA). GE’s struggles got it kicked ... Read More »

Corporate America, not banks, could cause the next recession

The collapse of Lehman Brothers: 10 years later 1. The next debt crisis: There’s a $6.3 trillion elephant in the room. And it just might cause the next recession. The last downturn was triggered by Wall Street and Americans accumulating too much debt — particularly in the sizzling housing market. A decade later, it’s Corporate America borrowing with gusto. Egged on by extremely low rates, US companies have piled on a record-setting $6.3 trillion of debt, according to S&P Global Ratings. All that debt is easy to ignore right now. Default rates are minuscule. Companies are sitting on tons of cash, and their coffers are growing thanks to the soaring US economy and corporate tax cuts. But eventually, both the economy and corporate profits will slow, leaving companies less firepower to pay down debt. And it won’t be as easy to roll over the debt that’s due. Debt-laden companies would ... Read More »

Blind Brexit? Businesses fear even more uncertainty

Steel company caught between tariffs and Brexit Business is worried enough about Britain crashing out of the European Union. Now it has a new nightmare: a blind Brexit that could extend the uncertainty over trade for years. Fears are rising that the United Kingdom may leave the European Union in March 2019 with a deal so vague that it gives companies and investors no greater clarity on the future than they had in June 2016 when voters backed Brexit in a referendum. The political pressure increased Thursday when the only firm proposal for Brexit was panned by a key EU leader and French President Emmanuel Macron described people who said leaving the bloc would be easy as “liars.” “The prospect of a vague Brexit, with only a slimline political declaration about the future EU-UK relationship published alongside a legally-binding withdrawal agreement, is gaining ground,” said Mujtaba Rahman of the political ... Read More »

Dow sets first record high since January

El-Erian: Investors recognize trade fears are short-term What trade war? The Dow just soared to its first record high since late January. The milestone shows that Wall Street is mostly unfazed by the escalating trade clash between the United States and China. The Dow’s 251-point leap on Thursday marked its 100th record close since President Donald Trump’s election, according to S&P Dow Jones Indices. The S&P 500 also notched an all-time high. The Dow closed at 26,657. It has spiked about 3,300 points since a low on April 2, when investors were more worried about trade. They’re betting that the strong US economy will power through the outbreak of tariffs. “The market is showing incredible strength,” said Paul Hickey, co-founder of Bespoke Investment Group. Stocks spiked late last year and in January after Republicans enacted a sweeping corporate tax cut. The euphoria sent the Dow soaring from 25,000 to 26,000 ... Read More »

China strikes back by going after America's energy companies

This is what a trade war looks like The United States has an abundance of natural gas that pollution-riddled China badly needs to wean itself off coal. Eying China’s voracious demand, Cheniere Energy, ExxonMobil (XOM) and other American energy companies are racing to build more than two dozen expensive facilities to export liquefied natural gas, which is super-cooled natural gas that can be transported by ship. China even marked President Donald Trump’s visit to Beijing last fall by agreeing to invest as much as $43 billion into an LNG project in Alaska. But this pairing of an able buyer and well-supplied seller no longer looks like a slam dunk. As part of the escalating trade war, China on Tuesday said it will impose a 10% tariff on $60 billion of US products — including LNG. The trade tensions could make it more difficult for the next wave of LNG export ... Read More »

China says it will never use its currency as a weapon in the trade war

GoPro CEO: We’re ‘actively looking’ to source outside of China The trade war between China and the United States is intensifying, but Beijing has just taken one potential weapon off the table. Premier Li Keqiang told an audience of global executives and policymakers that China would not weaken the yuan to boost trade with the rest of the world. “China will never go down the path of stimulating exports by devaluing its currency,” Chinese Premier Li Keqiang said Wednesday. His comments came a day after the United States and China announced that they would impose their biggest rounds of tariffs yet on each other’s exports, starting next week. That brings the value of goods hit by tariffs in the escalating conflict to more than $360 billion. President Donald Trump has threatened to hit another $267 billion of Chinese goods with tariffs. China, which buys far less from the United States ... Read More »

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