Day: November 23, 2018

U.S. stocks closed lower after a shortened session Friday, bumping the benchmark S&P 500 index into a correction, or drop of 10 percent below its most recent all-time high in September. 

Energy companies led the market slide as the price of U.S. crude oil tumbled to its lowest level in more than a year, reflecting worries among traders that a slowing global economy could hurt demand for oil. 

“Oil is really falling sharply, continuing its downward descent, and that appears to be giving investors a lot of concern that there’s slowing global growth,” said Jeff Kravetz, regional investment director at U.S. Bank Private Wealth Management. “You have that, and then you have the recent sell-off in tech and in retail, and then throw on there trade tensions and rising rates.” 

Losses in technology and internet companies and banks outweighed gains in health care and household goods stocks. Several big retailers declined as investors monitored Black Friday for signs of a strong holiday shopping season. 

Trading volume was lighter than usual, with the markets open for only a half day after the Thanksgiving holiday. 

The S&P 500 index fell 17.37 points, or 0.7 percent, to 2,632.56. The index is now down 10.2 percent from its last all-time high set Sept. 20. The last time the index entered a correction was in February. 

The latest correction came as investors worry that corporate profits, a key driver of stock market gains, could weaken next year. 

“The market is repricing and trying to assess where we’re going to be in the early part of 2019,” said Quincy Krosby, chief market strategist at Prudential Financial. 

The Dow Jones industrial average lost 178.74 points, or 0.7 percent, to 24,285.95. The Nasdaq composite dropped 33.27 points, or 0.5 percent, to 6,938.98. The Russell 2000 index of smaller-company stocks picked up 0.40 point, or 0.03 percent, to 1,488.68. 

Crude oil prices fell for the seventh straight week on worries that a slowing global economy could hurt demand, even as oil production has been increasing.  

The benchmark U.S. crude contract slid 7.7 percent to settle at $50.42 per barrel in New York. That is the lowest since October 2017. Brent crude, the international standard, lost 6.1 percent to close at $58.80 per barrel in London. 

Saudi Arabia and other OPEC members have recently signaled a willingness to consider production cuts at the oil cartel’s meeting next month. Such cuts would prop up oil prices. The U.S. has been increasing pressure on Saudi Arabia and OPEC to not cut production. 

The slide in oil prices weighed on energy stocks. Concho Resources, a developer and explorer of oil and natural gas properties, slumped 6.3 percent to $126.96. 

Tesla fell 3.7 percent to $325.83 after the electric auto maker said it intends to cut prices for its Model X and Model S cars in China to make them more affordable. 

Traders had their eye on retailers as Black Friday, the traditional start to the crucial holiday shopping season, began. Shares in L Brands, operator of Victoria’s Secret and Bath & Body Works, added 2 percent to $29.97. Other retailers put investors in a selling mood. Kohl’s fell 3.7 percent to $63.83, while Target lost 2.8 percent to $67.35. Macy’s dropped 1.8 percent to $32.01. 

Rockwell Collins climbed 9.2 percent to $141.63 after Chinese regulators conditionally approved the sale of the maker of communications and aviation electronics systems to United Technologies Corp. 

Investors will be watching next week when Presidents Xi Jinping and Donald Trump meet at the Group of 20 summit in Argentina for signs that the two leaders can find common ground to begin unwinding the spiraling trade dispute. 

The dispute between the U.S. and China has weighed on the market, stoking traders’ worries that billions in escalating tariffs imposed by both countries on each other’s goods will hurt corporate earnings at a time when the global economy appears to be slowing.  

“If you can get President Trump and President Xi to even just come closer with their rhetoric and make a bit of progress on the trade front, that could be the catalyst for markets to move higher,” Kravetz said. 

It may take more than a meeting to work out deep-seated issues between Washington and Beijing, which resumed talks over their trade dispute earlier this month. According to The Wall Street Journal, the U.S. has asked its allies to stop using telecommunications equipment from Huawei, which is Chinese-owned. The report cited people familiar with the matter. 

Bond prices fell Friday. The yield on the 10-year Treasury note rose to 3.05 percent from 3.04 percent late Wednesday. 

The dollar fell to 112.88 yen from 112.97 yen late Thursday. The euro weakened to $1.1330 from $1.1406. The pound eased to $1.2810 from $1.2876. 

Gold declined 0.4 percent to $1,223.20 an ounce. Silver dropped 1.8 percent to $14.24 an ounce. Copper slid 1 percent to $2.77 a pound. 

In other commodities trading, wholesale gasoline plunged 7.9 percent to $1.39 a gallon. Heating oil lost 4.8 percent to $1.88 a gallon. Natural gas fell 3.2 percent to $4.31 per 1,000 cubic feet. 

Major indexes in Europe finished mostly higher after shaking off an early slide. 

Traders were weighing the latest developments in the negotiations for Britain’s exit from the European Union. Both sides were finalizing the terms of the divorce Friday and expected to sign off on the deal Sunday, though it’s unclear whether the British Parliament will pass the deal. 

The FTSE 100 index of leading British shares slipped 0.1 percent. Germany’s DAX index rose 0.5 percent, while France’s CAC 40 gained 0.2 percent. 

Earlier in Asia, South Korea’s Kospi shed 0.6 percent and Hong Kong’s Hang Seng index dropped 0.4 percent. Australia’s S&P/ASX 200 bucked the trend, gaining 0.4 percent. Shares fell in Taiwan and rose in Singapore, Thailand and Indonesia. Japanese markets were closed for a holiday. 
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It would have been easy to turn on their computers at home over plates of leftover turkey and take advantage of the Black Friday deals most retailers now offer online.  

But across the country, thousands of shoppers flocked to stores on Thanksgiving or woke up before dawn the next day to take part in this most famous ritual of American consumerism. 

Shoppers spent their holiday lined up outside the Mall of America in Bloomington, Minn., by 4 p.m., and the crowd had swelled to 3,000 people by the time doors opened an hour later. In Ohio, a group of very determined women booked a hotel room Thursday night to be closer to the stores. In New York City, one woman went straight from a dance club to a department store in the middle of the night.  

Many shoppers said Black Friday is as much about the spectacle as it is about doorbuster deals.  

Kati Anderson said she stopped at Cumberland Mall in Atlanta on Friday morning for discounted clothes as well as “the people watching.” Her friend, Katie Nasworthy, said she went to the mall instead of shopping online because she likes to see the Christmas decorations. 

“It doesn’t really feel like Christmas until now,” said Kim Bryant, shopping in suburban Denver with her daughter and her daughter’s friend, who had lined up at 5:40 a.m., then sprinted inside when the doors opened at 6 a.m.  

Brick-and-mortar stores have worked hard to prove they can counter the competition from online behemoth Amazon. From Macy’s to Target and Walmart, retailers are blending their online and store shopping experience with new tools like digital maps on smartphones and more options for shoppers to buy online and pick up at stores. And customers, frustrated with long checkout lines, can check out at Walmart and other stores with a salesperson in store aisles.  

Consumers nearly doubled their online orders that they picked up at stores from Wednesday to Thanksgiving, according to Adobe Analytics, which tracks online spending. 

Priscilla Page, 28, punched her order number into a kiosk near the entrance of a Walmart in Louisville, Ky. She found a good deal online for a gift for her boyfriend, then arrived at the store to retrieve it.  

“I’ve never Black Friday-shopped before,” she said, as employees delivered her bag minutes later. “I’m not the most patient person ever. Crowds, lines, waiting, it’s not really my thing. This was a lot easier.” 

The holiday shopping season presents a big test for a U.S. economy, whose overall growth so far this year has relied on a burst of consumer spending. Americans upped their spending during the first half of 2018 at the strongest pace in four years, yet retail sales gains have tapered off recently. The sales totals over the next month will be a good indicator of whether consumers simply paused to catch their breath or feel less optimistic about the economy in 2019. 

The National Retail Federation, the nation’s largest retail trade group, is expecting holiday retail sales to increase as much as 4.8 percent over 2017 for a total of $720.89 billion. The sales growth would be a slowdown from last year’s 5.3 percent but yet remain healthy.   

The retail economy is also tilting steeply toward online shopping. Over the past 12 months, purchases at non-store retailers such as Amazon have jumped 12.1 percent as sales at traditional department stores have slumped 0.3 percent. Adobe Analytics reported Thursday that Thanksgiving reached a record $3.7 billion in online retail sales, up 28 percent from the same period a year ago. For Black Friday, online spending was on track to hit more than $6.4 billion, according to Adobe.  

Target reported that shoppers bought big-ticket items like TVs, iPads and Apple Watches. Among the most popular toy deals were from Lego, L.O.L. Surprise from MGA Entertainment, and Mattel’s Barbie. It said gamers picked up video game consoles like Nintendo Switch, PlayStation 4 and the Xbox One. 

Others reported stumbling onto more obscure savings. At a Cincinnati mall, Bethany Carrington scored a $29 all-in-one trimmer for her husband’s nose hair needs and, for $17, “the biggest Mr. Potato Head I’ve ever seen.”  

Black Friday itself has morphed from a single day when people got up early to score doorbusters into a whole month of deals. Plenty of major stores including Macy’s, Walmart and Target started their deals on Thanksgiving evening. But some families are sticking by their Black Friday traditions. 

“We boycotted Thursday shopping; that’s the day for family. But the experience on Friday is just for fun,” said Michelle Wise, shopping at Park Meadows Mall in Denver with her daughters Ashleigh, 16, and Avery, 14.  

By midday Friday, there had not been widespread reports of the deal-inspired chaos that has become central to Black Friday lore — fistfights over discounted televisions or stampedes toward coveted sale items.  

Two men at an Alabama mall got into a fight, and one of the men opened fire, shooting the other man and a 12-year-old bystander, both of whom were taken to the hospital with injuries. Police shot and killed the gunman. Authorities have not said whether the incident was related to Black Friday shopping or stemmed from an unrelated dispute.  

Candice Clark arrived at the Walmart in Louisville with her daughter Desiree Douthitt, 19, looked around and remarked at how calm it all seemed. They have long been devotees of Black Friday deals and for years braved the crowds and chaos. Clark’s son, about 10 years ago, got hit in the head with a griddle as shoppers wrestled over it. They saw one woman flash a Taser and threaten to use it on anyone who came between her and her desired fondue pot.  

They’ve watched over the years as the traditional madness of the day has dissipated as shopping transitioned to online and stores stretched their sales from a one-day sprint to a days-long marathon. 

“It seems pretty normal in here,” said Roy Heller, as he arrived at the Louisville Walmart, a little leery of Black Friday shopping, but pleasantly surprised to find that he didn’t even have to stand in line.  

He had tried to buy his son a toy robot on Amazon, but it was sold out. Friday morning, he frantically searched the internet and found one single robot left, at a Walmart 25 miles from his home. He bought it online and arrived an hour later to pick it up.  

Employees delivered his bag, he held it up and declared: “I got the last one in Louisville!” 
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China will go along with changes meant to update global trade rules so long as they protect Beijing’s status as a developing country, a Cabinet official said Friday.

The deputy commerce minister, Wang Shouwen, said any changes also must address protectionism and abuse of export controls and security reviews — a reference to Beijing’s trade clash with U.S. President Donald Trump.

China agreed in June to work with the European Union to propose changes to the World Trade Organization to address technology policy, subsidies and state industry — all areas in which Beijing faces complaints. U.S. officials complain the global trade referee is too bureaucratic and slow to adapt to changing business conditions.

Wang said each country’s “development model” must be respected — a reference to China’s state-dominated economy, which has provoked repeated complaints Beijing is violating its market-opening obligations.

Beijing has accused Trump of wrecking the global trading system by going outside the WTO to hike tariffs on Chinese imports. Trump says that was necessary because the global body is unable to respond to complaints about Chinese technology theft, subsidies and state-led industry development.

China is “willing to assume obligations” that are “compatible with our own level of development,” Wang said at a news conference.

“We will not allow other members to deprive China of the special and differential treatment that developing members deserve,” he said.

Wang gave no details of changes Beijing might support. But he said they also must address agricultural subsidies — a frequent complaint by developing countries against industrialized economies — and “discrimination against state enterprises,” a reference to restrictions on Chinese government companies abroad.

Beijing’s insistence that it is a developing country and entitled to special protections despite having grown into the second-largest global economy and a major manufacturer rankles its trading partners. That might dampen chances of reaching agreement on WTO reforms that would satisfy the United States, Europe and other governments.

Other governments dislike Trump’s tactics but echo U.S. complaints about Chinese market barriers and technology policy.

Washington and Beijing have imposed penalty tariffs on billions of dollars of each other’s goods in their dispute over U.S. complaints that China steals or pressures foreign companies to hand over technology.

The United States, Europe and other governments also object to Chinese plans including “Made in China 2025” for state-led creation of competitors in robotics and other technology. American officials worry those might erode U.S. industrial leadership.

The EU filed a WTO challenge in June to Chinese rules on technology licensing that it said improperly discriminate against foreign companies.

Trump and his Chinese counterpart, Xi Jinping, are due to meet this month in Buenos Aires during a gathering of the Group of 20 major economies. Private sector analysts say there is little chance that meeting by itself will produce a settlement.

Wang, the commerce official, gave no details of Xi’s possible negotiating stance. But he said China hopes G-20 members can have an “effective discussion” about WTO reform.

“China hopes the G-20 meeting can support the multilateral trading system (and) oppose unilateralism and trade protectionism,” he said.

Wang warned that an issue that “endangers the WTO’s existence” is the status of judges to mediate disputes. The Trump administration has blocked the appointment of judges to the WTO’s appeal body, leaving only three members on the seven-seat panel.

That is a dispute “between the United States and all other WTO members,” said Wang. “We believe this should be resolved as soon as possible.”

 
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Cities in Russia, Japan and Azerbaijan are about to find out which one of them gets to host the 2025 World Expo, an event expected to draw millions of visitors and showcase the local economy and culture.

The 170 member states of the Paris-based Bureau International des Expositions are voting Friday on whether to award the Expo to Yekaterinburg, Osaka or Baku.

Past world’s fairs brought the world such wonders as the Eiffel Tower, the Ferris Wheel and Seattle’s Space Needle — and today’s version is aimed at finding solutions to challenges facing humanity.

World Expos are held every five years; Milan hosted the last one in 2015, and Dubai in the United Arab Emirates is set to host the next one in 2020 . Cities also hold specialized exhibitions in the interim years. No U.S. city has hosted a world’s fair since the 1980s.

They can last up to six months and cost millions of dollars to host, but can help put a city on the global map by bringing in international visitors and attention.

Yekaterinburg is trying for a second time after an earlier failure to win the expo, and Russian President Vladimir Putin presented the bid Friday via video message — before a Russian singer tried to rev up the crowd with song and dance. This time the Russian city, on the boundary between Europe and Asia in Russia’s Ural Mountains, is promising an expo demonstrating technological innovation and how to balance it with quality of life. Russia’s fourth-largest city, it was one of several Russian sites that hosted World Cup matches this year.

Osaka is pitching itself as the safe, reliable choice — notably because it already held the 1970 Expo, while the other cities are lesser known and would be first-time hosts. It’s proposing an expo on a man-made island on the theme of “Society 5.0” and how to leverage robotics and artificial intelligence for the public good.

Leaders in Osaka, Japan’s third-largest city and the largest in western Japan, are hoping the expo will revitalize a city that has lost much of its luster to Tokyo, the nation’s political and economic capital. They have plans to transform the site into a casino resort after the expo, though there is opposition from residents to bringing casino gambling to town.

Baku has the advantage of having lots of oil money thanks to its Caspian Sea reserves. Its expo would highlight ways to improve human health and redefine human roles in an automating world — and the proposed venue would be designed to evoke the geometry of Azerbaijani carpets. The ex-Soviet, Caspian Sea city of 2.2 million has recently hosted a series of international events, including the Eurovision Song Contest and F1 Grand Prix. It is set to host some UEFA Euro 2020 matches.
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Some of Amazon’s workers in Europe are protesting against what they call unfair work conditions, in a move meant to disrupt operations on Black Friday.

Amazon Spain said around 90 percent of workers at a logistics depot in near Madrid joined a walkout Friday. Only two people were at the loading bay, spokesman Douglas Harper said.

However, he said Amazon had diverted cargo deliveries to its other 22 depots in the country.

On a picket line, 38-year-old employee Eduardo Hernandez said the walkout intended to hurt the company financially.

“It is one of the days that Amazon has most sales, and these are days when we can hurt more and make ourselves be heard because the company has not listened to us and does not want to reach any agreement,” said Hernandez, who has worked for five years at Amazon.

Unions in Britain said they would stage protests at five sites to complain about safety conditions. Amazon said the safety record at its warehouses is above the industry average. Protests were also reported or due in France and Germany.

While Black Friday discounts have traditionally been a U.S. retail event, companies have increasingly been offering discounts in other countries, too.
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