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The Morning Ledger: Global Economy Loses Steam as U.S. Powers Ahead |
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A Volkswagen factory in Wolfsburg, Germany. PHOTO: KRISZTIAN BOCSI/BLOOMBERG NEWS
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Good day. The recent economic slowdown in China, Japan and Germany points to stress in the broader global economy and poses a risk to the robust growth in the U.S. should the trend persist, reports The Wall Street Journal.
Warning signs: Economic output in Japan and Germany contracted in the third quarter, while in October consumer spending in China hit its slowest pace in five months and bank lending fell, showed data released Wednesday. By contrast, the U.S. economy expanded at an annualized rate of 3.5% in the quarter.
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Trade worries: Economists and business executives across the globe warn about a common denominator that is hurting growth: trade battles between the U.S., China and others. A.P. Moller-Maersk AS, the world’s largest containership operator and a bellwether for global trade, on Wednesday reported slower than expected unit growth in its shipping division during the third quarter.
Big picture: Few economists predict a global downturn, particularly given the strong momentum of the U.S. economy. However, the economic data increasingly show that the global economic cycle is entering a mature phase.
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U.S. retail sales for October are due out at 8:30 a.m. ET. Economists surveyed by the WSJ predict consumer spending at retail stores and restaurants picked up 0.5% from the prior month.
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U.S. business inventories for September are due out at 10 a.m. ET. Economists predict stockpiles ticked up 0.3%, compared with a 0.5% increase in the prior month.
The U.S. Food and Drug Administration is expected as soon as Thursday to announce it is working on a rule to ban menthol-flavored cigarettes. The cigarette industry says it may fight such a measure in the courts.
A data warehouse created to track all U.S. stock and options orders is expected to launch on Thursday with less functionality than previously anticipated including limits on how many users can search it, according to people familiar with the matter.
J.C. Penney Co., Nordstrom Inc., NVIDIA Corp. and Williams-Sonoma Inc. are among the companies reporting earnings Thursday.
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Finance chiefs and controllers have more data than ever at their fingertips, but the process of sorting through countless facts and figures can be burdensome for many, reports CFO Journal's Nina Trentmann.
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Nearly half of the financial executives surveyed by Ernst & Young LLP said they spend more time gathering and processing information than they do analyzing it, according to a survey released by the accounting firm on Wednesday.
“While more and more organizations are looking at data as a strategic asset, there are still many that unfortunately have further to go before they can execute on that strategy,” said Dana Bober, financial accounting advisory services leader at EY Americas, in the survey.
Among the more than 1,000 CFOs and controllers responding to the survey, 63% said their teams resist digital innovation, dialing up the pressure on executives to get employee support for these changes. EY polled executives across 25 countries from companies with annual revenue in excess of $500 million.
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Ratings firms in recent weeks have cut GE’s credit rating to BBB-plus, three notches above junk. PHOTO: JOHN MINCHILLO/ASSOCIATED PRESS
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General Electric Co. raised $115 billion of debt on a reputation as one of the U.S.’s safest borrowers. Now, revelations of losses and questions about its accounting have shaken investors’ confidence, driving bond prices sharply lower in recent weeks.
Uber Technologies Inc. is seeing slower sales growth ahead of its planned initial public offering next year. Third-quarter revenue was up 38% from a year earlier to $2.95 billion, a slowdown from the 63% year-over-year jump notched in the second quarter.
Lockheed Martin Corp. has been awarded a roughly $22.7 billion contract from the U.S. Department of Defense to deliver 255 F-35 jets, a move that comes after the defense contractor was tasked with lowering the price of its planes.
Facebook Inc.’s difficult year is taking a toll on employee morale, with several key measures of internal sentiment taking a sharp turn for the worse over the past year.
Berkshire Hathaway Inc. took a $4 billion stake in JPMorgan Chase & Co. in the third quarter, adding to a list of other large holdings in major American financial institutions.
Dell Technologies Inc. plans to sweeten a $22 billion deal to buy out an affiliate and return to the public markets—five months after the PC and data-storage giant’s initial proposal sparked intense shareholder opposition.
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President Donald Trump and congressional Republicans celebrate the passage of the GOP’s tax overhaul bill in Washington, D.C., Dec. 20, 2017. PHOTO: JIM LO SCALZO/EPA/SHUTTERSTOCK
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U.S. Tax Overhaul Tops List of Factors Impacting Corporate
Finance |
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One-third of finance professionals ranked the U.S. tax law overhaul as the most impactful event shaping corporate finance over the past two years, according to a survey by data and analytic company Dun & Bradstreet Corp.
The sweeping revision of U.S. tax legislation—which lowered the corporate tax rate to 21% from 35%—topped a list of influential events and conditions since 2016, reports CFO Journal’s Ezequiel Minaya. Other items included Federal Reserve interest rate hikes, picked by 22% of respondents, internal adoption of technology, at 15%, and new revenue recognition rules, cited by 8%.
And although strained trade relations between the U.S. and China dominate the headlines, tariffs were not a top concern of survey respondents. Only 13% said they viewed international tariffs and trade agreements as the most influential event since 2016. The survey results were gathered from 158 respondents attending the AFP 2018 Treasury and Finance Conference in Chicago last week.
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Three South Korean companies agreed to plead guilty and pay $236 million in criminal and civil penalties for conspiring to fix prices on fuel supplied to U.S. military bases in their country, the U.S. Justice Department said.
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Steve Wynn, the former CEO of Wynn Resorts Ltd., filed a motion in Nevada state court Tuesday seeking a temporary order to stop Massachusetts gambling regulators from releasing a report on their investigation into sexual-misconduct allegations.
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U.S. Federal Reserve Board nominee Michelle “Miki” Bowman on Wednesday cleared an important procedural hurdle toward Senate confirmation when a majority of senators voted to end debate on her candidacy.
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Chinese Premier Li Keqiang spoke in Singapore on Tuesday. PHOTO: ATHIT PERAWONGMETHA/REUTERS
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Chinese officials have outlined a series of potential concessions to the Trump administration for the first time since the summer as they continue to try to resolve the trade tensions between the two countries, Bloomberg reports.
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British Prime Minister Theresa May secured cabinet approval for her Brexit deal Wednesday evening, setting the stage for a battle in Parliament that could unravel the agreement with the European Union for Britain’s orderly withdrawal. Two senior cabinet members resigned Thursday morning.
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International companies in the U.S. rate potential tariffs on automobile and auto-parts imports as the most damaging of the Trump administration’s trade actions, a new survey finds.
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Opportunity zones knock. Hedge funds and other investors are keen to incorporate new opportunity zones–and accompanying tax breaks–into their investing strategies.
Companies pay themselves first. Companies are paying down debt in a big way, thanks to cash freed up by last year’s tax overhaul.
The tax debate returns. Democrats could seek to pay for infrastructure and other spending by rescinding tax cuts for the wealthy. Meantime, President Trump’s tax returns are high on the list of Democratic oversight priorities, after the Russian-meddling inquiry.
R-E-S-P-E-C-T. Gaining taxpayers’ respect is among the new Internal Revenue Service commissioner’s top goals.
Little change for 1031 exchanges. A real-estate tax break that survived the tax overhaul remains broadly useful.
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Dean Foods Co., the Dallas dairy products maker, said Chief Accounting Officer Scott Vopni resigned on Nov. 8, but is expected to remain with the company until the end of the year to assist with the transition of his duties.
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The company's Chief Financial Officer and Executive Vice President Jody Macedonio will oversee accounting functions and personnel until a new CAO is named. Mr. Vopni is leaving to pursue other opportunities, the company said. He joined Dean Foods in 2008 and served is several senior roles in the company's finance team, including as interim CFO in 2017.
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