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The Morning Ledger: As Trade Friction Intensifies, Early Winners Fade |
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Washing machines for sale at Home Depot in Chicago, Ill., U.S., Oct. 2017. PHOTO: SCOTT OLSON/GETTY IMAGES
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Good morning. Continued escalation in global trade friction has taken a toll on Whirlpool Corp., one of the early beneficiaries of the Trump administration's foray into reshaping U.S. trade policy, report the WSJ's Andrew Tangel and Josh Zumbrun.
Does anybody win a (trade) war? Whirlpool's stock is down 15% after protection against overseas competitors from tariffs on imported washing machines was more than negated by subsequent metals tariffs. The levies are also expected to hit Plains All American Pipeline LP, a U.S. firm which requested to be exempted from the tariffs on imported steel pipes but got rejected by the Commerce Department.
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Tariffs won't change trade flows: U.S. dependence on foreign aluminum, for example from Canada, is unlikely to change despite recent tariffs the Trump administration hopes will boost the American metals sector. “The reality is there’s not enough aluminum made here,” said Eric Krepps, who runs the North American automotive business at Constellium NV, a Dutch aluminum company.
Everyone is going to court: The U.S. on Monday filed separate claims against China, the European Union, Canada, Mexico and Turkey with the World Trade Organization, a retaliation to lawsuits other countries have filed over President Trump's steel and aluminum tariffs.
Trade tensions could snuff out global growth: Escalating trade tensions are threatening to derail a global upswing that’s already losing momentum amid weaker-than-expected growth in Europe and Japan as financial markets seem complacent to the mounting risks, the International Monetary Fund warned, reports Bloomberg.
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U.S. industrial production data is due out at 9.15 a.m. ET, with economists expecting a 0.5% uptick in factory output.
Federal Reserve Chairman Jerome Powell heads to Congress on Tuesday to begin two days of testimony on the state of the economy.
CSX Corp., Charles Schwab Corp., United Continental Holdings Inc. and Progressive Corp. are among the companies reporting earnings today.
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Shareholder proposals -- a key tool that investors use to steer corporate decision making -- have fallen in number but are better at hitting the mark, according to a report by law firm Gibson, Dunn & Crutcher LLP.
Investors lodged 788 proposals to companies during this year’s proxy season, down 5% from 2017, the report said. This was the third straight year of declines, and comes in part as companies have responded to past missives and incorporated changes to their business practices.
Investors’ missives are also becoming more successful. The average support for proposals that came to a vote rose to 32.7%, up from 28.7% in 2017.
“We have seen a number of large institutional investors announcing voting policy changes indicating that they’re more likely to support these proposals,” said Elizabeth Ising, a partner at Gibson Dunn and co-chair of the firm’s securities regulation and corporate governance practice.
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Mitie Group PLC’s rising revenue and improving order book are signs of turning fortunes for the struggling U.K. facility management company that finance chief Paul Woolf joined in November 2017. “We are removing the areas of concern,” Mr. Woolf told CFO Journal's Nina Trentmann.
Still, gains have been slow. Mitie posted a loss of £27.1 million ($35.9 million) for fiscal 2018, ended March 31, an improvement on the £184 million loss it reported for fiscal 2017.
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The U.K.’s largest companies were asked to improve the quality of their financial reporting as part of the new corporate governance rules released by the Financial Reporting Council on Monday.
The revamp of the Corporate Governance Code -- a rule book for company behavior first published in 1992 -- aims to strengthen the U.K.’s international reputation and comes as the country battles a number of high-profile corporate scandals ahead of its exit from the European Union, reports Ms. Trentmann.
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General Electric CEO John Flannery at the New York Stock Exchange in New York, U.S., June 2018. PHOTO: PHOTO: RICHARD DREW/ASSOCIATED PRESS
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General Electric Co. continues to work with bankers and advisers to determine the best way to proceed with GE Capital, the lending unit that nearly sank the company in the financial crisis.
Walmart Inc. agreed to use Microsoft Corp.’s cloud technology, deepening a partnership between two of Amazon.com Inc.’s most powerful rivals.
Netflix Inc. shares fell 14% to $344 in after-hours trading Monday after the company said it added 4.47 million international customers, short of its guidance of 5 million, and 670,000 streaming customers in the U.S., below its estimate of 1.2 million subscribers.
The chairman of Germany’s Thyssenkrupp AG has resigned, deepening a leadership vacuum triggered by the exit of Chief Executive Heinrich Hiesinger 10 days earlier amid pressure from activist shareholders, reports Reuters.
Microsoft Corp. finance chief Amy Hood played a key role in persuading employees, customers and investors to believe in the world’s largest software maker again after it spent more than a decade losing its way, reports Bloomberg.
Berkshire Hathaway Inc. Chairman Warren Buffett has donated shares valued at $3.4 billion to five foundations, marking another round in his pledge to donate most of his wealth to charities and philanthropic endeavors.
Bank of America Corp. reported a 33% increase in second-quarter profit on the back of rising interest rates and a massive tax cut.
Boeing Co. and Airbus SE announced more than $43 billion in airliner orders, adding pressure on both to further boost plane production despite supply-chain bottlenecks that have hampered output this year.
BlackRock Inc., the world’s largest asset manager, pulled in $20 billion in new investor cash in the second quarter, its lowest haul in two years as a global trade rift made investors increasingly skittish.
Papa John’s International Inc.’s founder said “it was a mistake” to step down as chairman and is questioning how the company’s board investigated his use of a racial slur.
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Uber has struggled to overcome a reputation for being permissive of chauvinism. PHOTO: CHRIS RATCLIFFE/BLOOMBERG NEWS
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Uber Technologies Inc. is being investigated by the U.S. Equal Employment Opportunity Commission over a complaint about gender inequity, say people familiar with the matter. It is one of a series of federal probes of the ride-hailing giant.
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U.S. Federal Communications Commission Chairman Ajit Pai said in a written statement that he had “serious concerns” about Sinclair Broadcast Group Inc.’s $3.9 billion acquisition of Tribune MediaCo., and took action to block the deal.
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Ford Motor Co. has agreed to pay at least $299.1 million to resolve a class-action lawsuit over its use of defective Takata Corp. airbag inflaters in more than 6 million vehicles.
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A shopper carries an L Brands Inc. Victoria's Secret bag in New York, June 9, 2018. PHOTO: MARK KAUZLARICH/BLOOMBERG NEWS
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U.S. retail sales -- a measure of spending at stores, websites and restaurants -- rose 0.5% in June from the prior month, the Commerce Department said Monday.
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The European Union has signed one of the world's biggest free trade deals with Japan, a move that contrasts sharply with the actions of the Trump aministration, reports the BBC.
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China has enough policy room to counter external shocks given its low fiscal deficit and government debt ratios, sufficient bank capital buffers and declining corporate debt, the state planning agency said on Tuesday, reports the South China Morning Post.
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Car sales in the European Union showed robust growth in June, as volumes for the month reached a record high despite mixed results across the bloc’s major markets, reports MarketWatch.
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Houston is set to get its own oil futures, a sign of the city’s growing importance as the U.S. sends more crude abroad.
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Century Aluminum Co., the Chicago aluminum producer, named Craig Conti as chief financial officer. Mr. Conti will join the company on July 30 and will report to the CEO.
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He succeeds Stephen Heyroth, who resigned as vice president, controller and chief accounting officer to accept a position at another company. Michelle Harrison, senior vice president of finance and treasurer, had assumed Mr. Heyroth’s duties on an interim basis.
Mr. Conti is currently corporate vice president of financial planning and analysis at Illinois Tool Works Inc., and served as CFO of the welding segment from 2014 to 2017. Prior to that, Mr. Conti held several positions at General Electric Corp. from 1999 to 2014. He will receive a base salary of $400,000 and a bonus equal to 70% of base salary, prorated from his start date. Mr. Conti will also receive other equity awards, including stock to compensate him for equity lost as a result of leaving his current employer, according to a filing.
Spire Healthcare Group PLC, a U.K. private healthcare company, has appointed Jitesh Sodha as CFO, effective Oct. 1. David Lomas will continue as Spire's interim CFO until then. Mr. Sodha was formerly CFO of passport maker and banknote printer De La Rue PLC. Compensation details were not immediately available.
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