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Wells Fargo to keep brokerage retirement plans under fiduciary rule

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A Wells Fargo branch is seen in the Chicago suburb of Evanston, Illinois, U.S. on February 10, 2015.REUTERS/Jim Young/File Photo

Wells Fargo to keep brokerage retirement plans under fiduciary rule

Wells Fargo & Co (WFC.N) said it will continue to offer individual retirement accounts that pay brokers commissions and will adjust procedures to comply with a new U.S. financial regulation that requires companies to put clients’ interests first, according to a memo sent to staff on Thursday.

Wells became the latest bank brokerage to announce plans to adopt the U.S. Department of Labor’s fiduciary rule, set to take effect in April. The regulation aims to eliminate conflicts of interest in the financial advice Americans receive on retirement accounts by requiring firms to change how brokers get paid.

While there is some question as to whether industry groups or Republicans will succeed in delaying the start date of the rule, Wells Fargo’s rivals Bank of America Corp’s (BAC.N) Merrill Lynch and Morgan Stanley (MS.N) have already started making changes to comply with the rule.

In the memo, Wells Fargo said it plans to continue offering commissions-paying accounts in a way that complies with the rule’s “best interest contract exemption,” which allows firms to keep commissions-paying retirement products if they provide greater disclosure about fees to clients.

The bank said it will provide more information on specific adjustments in the coming weeks, according to the memo.

Merrill Lynch plans to discontinue retirement accounts that pay brokers commissions, while Morgan Stanley will keep offering commissions-paying accounts under the best interest contract exemption.

Morgan Stanley has said it will meet the standards set by the new regulation by retraining brokers, having clients sign additional disclosure contracts, and adding new supervisory software.

(Reporting By Elizabeth Dilts; Editing by David Gregorio)

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Published at Thu, 01 Dec 2016 19:33:36 +0000

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UPDATE -Starbucks CEO steps down to focus on high-end coffee, shares fall

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A man walks out of a Starbucks coffee shop in Seoul, South Korea, March 7, 2016.  REUTERS/Kim Hong-Ji

A man walks out of a Starbucks coffee shop in Seoul, South Korea, March 7, 2016. REUTERS/Kim Hong-Ji

UPDATE -Starbucks CEO steps down to focus on high-end coffee, shares fall

By Lisa Baertlein and Gayathree Ganesan

Starbucks Corp (SBUX.O) co-founder Howard Schultz will step down as chief executive to focus on new high-end coffee shops, handing the top job to Chief Operating Officer Kevin Johnson, a long-time technology executive.

Schultz, who will become executive chairman in April 2017, said he would focus on building ultra-premium Reserve stores and showcase Roastery and Tasting Rooms around the world as well as setting the brand’s “social impact agenda” that includes sending employees to college and recruiting veterans.

Starbucks had signaled the change in July, but its shares fell 3.6 percent to $56.41 in extended trading on Thursday, as investors recalled the company’s decline after Schultz handed over the reins in 2000. He returned in 2008.

“Having him step down as CEO raised the anxiety level,” said Stephens analyst Will Slabaugh, who said that Schultz is the heart and soul of the brand, its entrepreneurial leader and its savior.

“We’re in a much better position on every level,” said Schultz, who returned for his second stint as CEO in the depths of the “Great Recession,” when Starbucks’ stock was trading below $10. Late last year, it hit an all-time high above $60. Schultz has put Starbucks in the national spotlight, asking customers not to bring guns into stores and urging conversations on race relations.

Many of the campaigns have generated controversy, but analysts have not seen a hit to financial results and the efforts have raised the profile of the coffee company and cemented Schultz’s status as a national figure.

“The idea that he’s replaceable, I think that’s erroneous,” said Bill Smead, CEO of Smead Capital Management in Seattle, which owns Starbucks shares. He compared the change to the retirement of long-time McDonald’s Corp (MCD.N) CEO Ray Kroc, who turned a handful of hamburger stands into the world’s biggest restaurant company.

The announcement on Thursday also came as investors worry about the restaurant industry’s stubborn traffic declines. Starbucks has held up better than most, but it has not been immune.

Johnson is a former technology executive who became president and chief operating officer at Starbucks in March 2015.

Johnson has been on the Starbucks board since 2009 but most of his career was in the technology industry. He was the chief executive of Juniper Networks Inc (JNPR.N) from September 2008 to January 2014 and prior to that held several senior positions at Microsoft Corp (MSFT.O).

On a conference call after the announcement, analysts pressed the company on timing and whether, with Schultz stepping aside, senior management still had the “merchant gene.”

“Not having retail experience could be a problem over time,” said Howard Penney, an analyst at Hedgeye Risk Management.

“I’m not leaving the company and I’m here every day,” said Schultz, whose office is connected to Johnson’s.

Traffic at established Starbucks cafes fell in the last quarter, which Johnson has attributed to a change in the company’s loyalty program, and Starbucks forecast a mid-single-digit rise in 2017 same-store sales.

The company dismissed speculation that Schultz could be preparing for a new career in politics.

“He has no plans to run for political office, as he has said many times, and will remain with the company as Starbucks executive chairman, focusing on premium coffee,” a spokeswoman said.

(Reporting by Gayathree Ganesan and Siddharth Cavale in Bengaluru; additional writing by Peter Henderson; Editing by Bill Rigby and Jonathan Oatis)

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Published at Thu, 01 Dec 2016 23:49:21 +0000

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Starbucks CEO Howard Schultz to step down

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Howard Schultz stepping down as Starbucks CEO

Starbucks CEO Howard Schultz to step down

  @mattmegan5

Howard Schultz, the visionary leader of Starbucks, will be stepping down next year as CEO of the iconic coffee giant.

Schultz’s surprise decision to step aside as the leader of Starbucks (SBUX) sent the stock sinking 3% in after-hours trading on Thursday.

Starbucks said Schultz isn’t going away completely. Effective April 3, he will become executive chairman, where he will focus on innovation, the company’s premium offerings and on social impact. Current chief operating officer Kevin Johnson, a tech industry veteran, will replace Schultz as CEO.

“This is a good thing. I’m not leaving the company,” Schultz told CNN’s Poppy Harlow by phone on Thursday.

The 63-year-old said he had been planning the move for at least a year. Asked if he’s going to Washington, Schultz laughed and said, “No, I’m not going to Washington.”

Instead, Schultz emphasized a desire to focus on the company’s social impact initiatives.

“Given the state of things in the country, there is a need to help those left behind,” Schultz told CNN.

Schultz said he also wants to focus on Starbucks’ premium offerings, such as the Roasteries that allow customers to watch freshly-roasted beans arrive.

Separately, in a conference call, Schultz said Johnson brings “unparalleled understanding of market dynamics” and he deserves a “tremendous amount of credit” for the company’s recent record results.

During the call, Johnson called Schultz “among the world’s most iconic leaders and entrepreneurs.”

Johnson seemed to choke up and his voice broke when he said it had been a “privilege to work side-by-side with Howard.”

Schultz joined Starbucks in 1982 as director of retail operations and he helped turn the company into a retail powerhouse and an iconic American brand. He stepped down as CEO in April 2000 to concentrate on executing the company’s global strategy.

But Starbucks struggled without him at the helm and seemed to have lost its way. Schultz returned as CEO in 2008 and helped guide the coffee giant through the Great Recession and get it back on track. Today, Starbucks is valued at $84 billion and it has more than 24,000 retail stores in 70 countries.

Schultz has also been outspoken on a variety of social issues. He has supported raising the minimum wage, he offered his employees free college and pushed Starbucks to open a store in Ferguson following the city’s violent protests.

Asked if he’s concerned Starbucks could suffer again in his absence as CEO, Schultz said the “differences between then and now couldn’t be greater.”

Schultz said the Starbucks management team didn’t have the “capability and experience” to navigate the Great Recession. By contrast, he praised Johnson’s skills and even said his deputy is “better prepared than I am” to be CEO at this point.

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Published at Thu, 01 Dec 2016 22:07:20 +0000

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Why Dollar General’s Comp Sales Dropped in Q3

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by TBIT from pixabay

Why Dollar General’s Comp Sales Dropped in Q3

Cuts to the federal Supplemental Nutrition Assistance Program (SNAP) — what used to be called “food stamps” — contributed to a slight drop in same-store sales for Dollar General (NYSE: DG) in the third quarter, the discount retailer said in its earnings release Thursday.

On the positive side, net sales increased 5% to $5.32 billion in Q3. Sames-store sales, however, dropped by 0.1%, which the company blamed on a decline in traffic that was partially offset by an increase in the chain’s average transaction value.

CEO Todd Vasos said in the earnings release that he expects the company to fix its same-store sales issue, but that the efforts it’s undertaking won’t have an immediate impact. And then, there’s the matter of the cuts to SNAP benefits.

“We saw an acceleration in headwinds from average unit retail price deflation and reductions in SNAP benefits in the 2016 third quarter as compared to the 2016 second quarter,” he said. We are focused on efforts to drive traffic in our stores and to control the factors we can control as we look to overcome the issues impacting our results, many of which we believe are macroeconomic and transitory in nature.”

The full year is still on track

Dollar General noted in the earnings release that it has not revised its full-year outlook. The company still expects earnings per share to come in at the low end of its forecast range of 10% to 15% growth.

So far, through three quarters of 2016, Dollar General has grown sales by 5.9% over the comparable 2015 period to $15.98 billion. And, despite the Q3 drop, same-store sales are up by 0.9% for that period, driven by an increase in average transaction amount.

What happens next for Dollar General?

Perhaps more than most retailers, the company’s future profits depend upon what kind of changes to entitlement programs for the poor come from the incoming Republican government in Washington, D.C. That’s a major unknown that makes any predictions much beyond Q4 far less reliable.

Still, despite these bumps in the road and future uncertainty, Dollar General remains committed to its long-term growth model. The company noted that it still expects to grow by 10% to 15% each year even if “in any given year, one or more key drivers of the model may be outside of the annual targets outlined” in the model.

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Published at Thu, 01 Dec 2016 18:04:05 +0000

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UPDATE 3-Lower food prices weigh on Kroger’s profit forecast

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A selection of Kroger brand products is displayed in Golden, Colorado September 15, 2009.REUTERS/Rick Wilking/File Photo

Lower food prices weigh on Kroger’s profit forecast

By Gayathree Ganesan

Kroger Co (KR.N), the biggest U.S. supermarket chain, tempered its forecasts for the remainder of the year amid pressure from falling food prices and intense competition from grocery sellers ranging from Wal-Mart (WMT.N) to Amazon (AMZN.O).

Cincinnati, Ohio-based Kroger said it now expects this fiscal year’s adjusted per share profit to be $2.10 to $2.15, down from its prior forecast of $2.10 to $2.20.

Shares in the company, whose supermarket brands also include Ralphs and Fred Meyer, were up 0.9 percent to $32.58 in midday trading after that revised forecast essentially matched analysts’ estimate of $2.13 per share for the fiscal year that ends Jan. 30, according to Thomson Reuters I/B/E/S.

Kroger, known as one of the supermarket industry’s best operators, reported slightly better-than-expected third-quarter revenue, profit in line with Wall Street expectations, and marketshare gains.

Nevertheless, its challenges continue.

“Persistent and increasing deflation” is expected to weigh on store sales in the fourth quarter, Chief Financial Officer Michael Schlotman said on a conference call with analyst.

Food prices in the United States have been deflating due to low oil and grain prices.

The food-at-home consumer price index for the third quarter was 1.9 percent lower than a year ago with milk, eggs, beef, veal, pork and poultry posting the largest declines. (bit.ly/2gYNp15)

Most grocers are passing those lower prices on to shoppers and restaurants, which have been raising menu prices to offset higher labor costs.

Kroger’s net income attributable to the company fell to $391 million, or 41 cents per share, in the third quarter ended Nov. 5, from $428 million, or 43 cents per share, a year earlier.

Excluding certain items, the company earned 41 cents per share, matching analysts’ estimate.

Net sales rose 5.9 percent to $26.56 billion. Analysts on average had expected $26.34 billion.

Kroger, whose stock has lost more than a fifth of its value this year, said it expects the current operating environment to continue in the first half of 2017.

“The extent to which the grocery market has shifted from an environment of modest inflation to one of deflation and tough price competition is evident in Kroger’s numbers,” said Neil Saunders, chief executive of research firm Conlumino.

As a result, Saunders expected the company to keep a lid on costs in the coming quarters.

(Reporting by Gayathree Ganesan in Bengaluru; Editing by Sayantani Ghosh and Bill Trott)

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Published at Thu, 01 Dec 2016 17:15:33 +0000

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How to Owe Nothing on Your Federal Tax Return

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How to Owe Nothing on Your Federal Tax Return

By Amy Fontinelle

The way you fill out the W-4 form that you turn in to your employer when you start a new job determines how much tax you will have withheld from each paycheck, which affects how much you will ultimately owe or receive as a refund in April. What you may not know is that it’s possible to submit a new W-4 form to your employer whenever you want — it’s not a one-time thing. (For more on income taxes, see our Income Tax special feature.)

If you don’t want to owe anything in April, but you also don’t want to overpay taxes and give an interest-free loan to Uncle Sam all year, read on to find out how to get your tax bill or refund closer to zero before tax time approaches.

Determine Your Total Tax Liability

Your personal situation will determine how accurately you can calculate your total tax liability for the year. If you are a salaried employee with a steady job, it’s relatively easy, because you can predict what your total income for the year will be. If you’re an hourly, seasonal or self-employed worker, make an educated guess based on your earnings history in your current line of work and how your year has gone so far. (For more information, read 3 Common Tax Questions Answered.)

You have three options for calculating your tax liability:

  1. Online Paycheck Calculator
    Online paycheck calculators can be found easily with a simple internet search. By entering your gross annual pay, the state where you work, your pay frequency, federal filing status and the number of allowances you entered on your W-4, the calculator will tell you your federal tax liability per paycheck, which you can multiply by the number of pay periods to find out your total tax liability for the year. This method is easy and the result will be reasonably accurate, but it may not be perfect since your actual tax liability will depend on whether you itemize your deductions and which tax credits you claim.
  2. IRS Tax Withholding Calculator
    The tax withholding calculator at the Internal Revenue Service website is particularly useful for people with more complex tax situations. It will ask about factors like your eligibility for child and dependent care tax credits, how much you have contributed to a tax-deferred retirement plan or health savings account (HSA) and how much federal tax you had withheld from your last paycheck. Based on the answers to your questions, it will tell you how much federal tax it expects you to owe at the end of the year, what you have paid so far and how much you will owe or be refunded. (To read more about these credits, see Give Your Taxes Some Credit.)
  3. Sample Tax Return
    If you have tax software or know how to fill out a 1040 form yourself, you can complete a sample tax return. This method will give you the most accurate picture of your end-of-year tax liability. The only thing that can make it inaccurate is if you have to use the previous year’s tax software because the current year’s software hasn’t been released yet. However, a little online research can usually uncover what tax provisions have changed from the previous year, such as the new standard deduction amount. Filling out a sample return is also ideal for people who itemize deductions, such as homeowners or those who are self-employed. (Mastering these fundamentals now will take the stress out of tax season. Read more in Next Season, File Taxes on Your Own.)

Determine Your Tax Withholding

Once you know the total amount you will owe in federal taxes, you’ll need to figure out how much you need to have withheld per pay period to get to that total, but not exceed it, by December 31.

  • If not enough tax is being withheld, the easiest way to fix the problem is to fill out a new W-4. On line 6, which says “additional amount, if any, you want withheld from each paycheck,” fill out the difference between what you should be paying each pay period and what you’re actually paying. You could also decrease the number of allowances you claim, but the results won’t be quite as accurate. And you don’t have to wait for your employer’s HR department to hand you a new W-4 form — just print it out yourself from the IRS’s website. (For more ways to fill out your W-4 for deductions, read Payroll Deductions Pay Off.)
  • If you’ve overpaying and you want to get some of that extra money back each pay period, try increasing the number of allowances you claim. It won’t match the worksheet, but that doesn’t matter. You can claim seven allowances even if the W-4 worksheet suggests you should only claim two.
  • The most important thing is to pay enough tax throughout the year to avoid penalties and interest. You’re required to pay at least 90% of your current year’s tax liability or 100% of your previous year’s tax liability, whichever is smaller. You’ll also avoid penalties if you owe less than $1,000 on your annual tax return.

If it’s so early in the year that you haven’t received any paychecks or pay stubs yet, just divide your total tax liability for the year by the number of paychecks you receive. Then, compare that amount to the amount that is withheld from your first paycheck of the year and make any necessary adjustments.

If it’s not the beginning of the year, you’ll need to compensate for all the previous pay periods when you were over- or underpaying your federal tax by filling out a new W-4 to adjust your withholding up or down for the rest of the year. Then, the following January, you’ll need to fill out a new W-4 again, or else your withholding will be off for the new year. (Finding out that you owe money when you were expecting a refund is a nasty shock. If this has happened to you, learn how to bounce back in Top 9 Solutions to an Unexpected Tax Bill.)

The basic way to resolve the under- or overpayment problem is the same, but instead of dividing the amount you’ll owe for the whole year by the number of paychecks you receive, you’ll need to figure out how much you’ve paid in federal taxes so far (your pay stub may have a running total; if not, ask your HR department). Subtract that amount from what you owe, then divide the result by the number of pay periods remaining for the year. The final number is how much federal tax you need to have withheld from each paycheck. If you’ve been underpaying, a simple subtraction calculation will show you how much extra you need to pay each month. (For more on prepaying taxes, read Money-Saving Year-End Tax Tips.)

Figuring out the reverse is trickier. There is no simple way to do it; the best method is to plug different numbers of federal allowances into a paycheck calculator until it spits out the amount closest to the calculated federal tax you want to be paying each pay period.

Remember, if you’re self-employed, have fluctuating income because you’re an hourly or seasonal worker, have multiple jobs or itemize your deductions, things get considerably more complicated. You probably won’t be able to make sure you owe nothing on your taxes with 100% accuracy, because your income and tax liability will change throughout the year. But following these steps may help you get closer to a reasonable number. You can always redo the calculations described above two or three times a year as your income picture evolves. (For more on how itemized deductions can impact your taxes, read An Overview of Itemized Deductions.)

The Bottom Line

It sometimes takes considerable effort to figure out what amount you should really have withheld from each paycheck, especially if it’s not the beginning of the year. However, a couple of hours now can either increase your monthly cash flow for the rest of the year or save you from an unexpected bill at tax time.

(Read about why having money now is more valuable than having the same money in the future in Understanding the Time Value of Money.)
Published at Thu, 01 Dec 2016 11:00:00 +0000

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State treasurers renew call for independent chair at Wells Fargo

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A Wells Fargo branch is seen in the Chicago suburb of Evanston, Illinois, U.S. on February 10, 2015.REUTERS/Jim Young/File Photo

State treasurers renew call for independent chair at Wells Fargo

By Ross Kerber

Investors, including the state treasurers of Connecticut and Illinois, called on Wells Fargo & Co to require an independent board chair, saying the bank needs stronger oversight in the wake of a scandal over fake customer accounts.

Although Wells Fargo already has shuffled its leadership structure, Connecticut Treasurer Denise Nappier on Tuesday said the investor group has filed a shareholder resolution for the San Francisco bank’s annual meeting next spring seeking a change in its bylaws.

Improvements need to be formalized, she said, because a board whose chair is also chief executive – the dual role once held by John Stumpf at Wells Fargo – creates a potential conflict of interest.

“At the end of the day, the company’s shameful conduct was fueled by poor governance that fostered a culture of irresponsibility and deficiencies in risk management,” Nappier said in a statement.

Via email, Wells Fargo spokesman Ancel Martinez said, “We appreciate the feedback that we receive from our investors and we will review the proposal.”

Stumpf resigned on Oct. 12, bowing to pressure following a $190 million settlement the bank reached with regulators in September. Reviews found the bank’s staff opened as many as 2 million accounts without customers’ knowledge to meet internal sales targets.

Stumpf was replaced as CEO by the bank’s president, Tim Sloan. The role of board chair was given to Stephen Sanger, who had been Wells Fargo’s lead director and was listed as independent in the bank’s latest proxy filing.

Nappier called the splitting of the roles “a welcome first step” but said Wells Fargo must still put a better leadership structure in place.

Co-filers of the resolution included Illinois State Treasurer Michael Frerichs, shareholder adviser Hermes EOS and Needmor Fund, which had filed before Stumpf’s departure.

In a separate news release on Tuesday, Frerichs said the bank’s “predatory and illegal banking practices have proved that the company needs a set of independent eyes to ensure stronger, unbiased oversight.”

Frerichs had earlier cut some state business with Wells Fargo, such as suspending its use as a broker dealer.

(Reporting by Ross Kerber in Boston; additional reporting by Jonathan Stempel in New York; Editing by Dan Grebler and Jonathan Oatis)

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Published at Tue, 29 Nov 2016 22:50:01 +0000

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Citigroup ‘boys’ club’ disfavors women, lawsuit claims

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A view of the exterior of the Citibank corporate headquarters in New York, New York, U.S. May 20, 2015.REUTERS/Mike Segar/Files

Citigroup ‘boys’ club’ disfavors women, lawsuit claims

By Jonathan Stempel | NEW YORK

A former Citigroup Inc financial adviser on Monday filed a lawsuit accusing the bank of running a “boys’ club” that favored men over women, treating her as a “glorified secretary,” and firing her in retaliation for whistleblowing activity.

Erin Daly is seeking double back pay, unpaid bonuses and punitive damages over the bank’s alleged harassment, hostile work environment and unlawful retaliation, according to her lawsuit filed in Manhattan federal court.

The resident of Manhattan’s Upper West side said Citigroup let her go less than two weeks after she complained that her manager demanded inside information from her work on restricted stock offerings, so that he could pass it to favored clients.

Daly said she also filed a complaint with the U.S. Equal Employment Opportunity Commission, and plans to add federal discrimination claims against the fourth-largest U.S. bank.

“We believe the claims alleged are without merit and intend to vigorously defend against them,” Citigroup spokeswoman Danielle Romero-Apsilos said.

 The lawsuit is one of many over the years accusing U.S. banks of favoring male bankers, traders and financial advisers over their female counterparts, and permitting improper conduct.

Bank of America Corp in September settled one such case, in which former co-head of global structured products Megan Messina accused it of running a “bro’s club.”

Daly said she graduated from the University of Rhode Island in 2005, and according to brokerage industry records worked for Citigroup from 2007 to 2014.

She claimed that even though she performed well, Citigroup took away many of her responsibilities, and even once forced her to apologize in writing for requesting equal treatment.

Daly also said Citigroup sometimes routed stock allocations from “hot deals,” such as Alibaba Group Holding Ltd’s $25 billion initial public offering in 2014, to a male colleague, advancing his career at her expense.

“Citi’s ‘boys’ club’ policies and practices” reflect a “culture of gender discrimination,” the complaint said. “The boys were in charge. The men were doing business. Erin was just a glorified secretary.”

A lawyer for Daly declined additional comment.

The case is Daly v. Citigroup Inc et al, U.S. District Court, Southern District of New York, No. 16-09183.

(Reporting by Jonathan Stempel in New York; editing by Diane Craft)

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Published at Tue, 29 Nov 2016 00:06:46 +0000

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Consumers, exports power U.S. third-quarter economic growth

 

A shopper walks down an aisle in a newly opened Walmart Neighborhood Market in Chicago in this September 21, 2011 file photo.REUTERS/Jim Young/Files

Consumers, exports power U.S. third-quarter economic growth

By Lucia Mutikani | WASHINGTON

The U.S. economy grew faster than initially estimated in the third quarter, notching its best performance in two years, buoyed by strong consumer spending and a surge in soybean exports.

In a separate report, U.S. home prices rose 5.5 percent in the year to September, meaning house prices overall have now fully recovered from their plunge during the 2008 financial crisis.

A third report showed U.S. consumer confidence rebounded in November to its highest level in nine years despite uncertainty surrounding the policies of President-elect Trump.

U.S. stock prices edged higher on Tuesday after the data, with the benchmark S&P 500 index .SPX now up about 6.0 percent since the Nov. 8 elections. U.S. Treasury yields ended slightly lower on Tuesday but the benchmark ten year note US10YT=RR yield has risen about 0.5 percent in the past two weeks, helping to push the U.S. dollar up to its highest levels in more than a decade against major currencies .DXY.

U.S. ECONOMIC GROWTH FASTEST SINCE 2014

U.S. gross domestic product increased at a 3.2 percent annual rate instead of the previously reported 2.9 percent pace, the Commerce Department said in its second GDP estimate on Tuesday. Economists had forecast third-quarter GDP growth being revised up to a 3.0 percent rate.

Growth was the strongest since the third quarter of 2014 and followed the second quarter’s anemic 1.4 percent pace. Output was lifted by upward revisions to business investment and home building.

Exports grew at their quickest pace since the fourth quarter of 2013, driven by a surge in soybean exports after a poor soy harvest in Argentina and Brazil. International trade contributed 0.87 percentage point to GDP growth and not 0.83 percentage point as reported last month.

Data ranging from housing to retail sales and manufacturing output also suggest the economy retained its momentum early in the fourth quarter even as exports appear to be faltering amid a reversal of the boost to growth provided by soybean exports in the third quarter.

The Atlanta Fed is currently forecasting GDP rising at a 3.6 percent rate in the fourth quarter, supporting market expectations that the Federal Reserve will raise interest rates next month.

Economic growth could also be supported next year if President-elect Donald Trump succeeds in pushing through Congress a fiscal stimulus plan that includes massive infrastructure spending and tax cuts, analysts said.

“Couple that with an increasingly enthusiastic consumer supported by stronger wage gains and the economy appears well-positioned to remain on a growth path heading into 2017,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors in Kalamazoo, Michigan.

When measured from the income side (GDI), the economy grew at a 5.2 percent clip amid a rebound in corporate profits. That was the fastest pace of increase in gross domestic income in nearly two years and followed a 0.7 percent rate of expansion in the second quarter.

The average of GDP and GDI, which economists consider to be a more accurate measure of current economic growth and a better predictor of future output, increased at a 4.2 percent rate in the third quarter, the fastest pace in two years.

That followed a 1.1 percent rate of increase in the second quarter and likely exaggerates the economy’s strength.

CONSUMER SPENDING AND CONFIDENCE UP

The Commerce Department said consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased at a 2.8 percent rate in the third quarter and not the 2.1 percent pace reported last month. That was still a slowdown from the second quarter’s robust 4.3 percent pace.

With a tight labor market lifting wage growth and boosting household sentiment, consumer spending is likely to gain further momentum for the rest of the year and in 2017.

A separate report from the Conference Board showed its consumer confidence index surged in November, climbing back to levels seen before the 2008 recession. Consumers were upbeat about the labor market and current business conditions.

Rising house prices are also likely to keep consumption supported. The Standard & Poor’s CoreLogic Case-Shiller national home price index rose 5.5 percent in the year to September and is now just above the peak seen in July 2006.

BUSINESS SPENDING MIXED

Spending on non-residential structures, which include oil and gas wells, was revised sharply higher to show it increasing at its fastest pace since the first quarter of 2014.

Business spending on equipment, however, fell at a steeper rate than previously reported, declining for a fourth straight quarter. With after-tax corporate profits rising at a 7.6 percent pace last quarter there is scope for business investment to rebound. Corporate profits declined at a 1.9 percent rate in the second quarter.

“The return to positive growth in corporate profits at least satisfies what is probably a necessary, but not sufficient, condition for a rebound in business fixed investment,” said Andrew Hollenhorst an economist at Citigroup in New York. Businesses increased spending to restock after running downinventories in the second quarter, but just not as much as previously reported. Businesses accumulated inventories at a $7.6 billion rate in the last quarter, almost half of the $12.6 billion pace reported last month.

That means inventory accumulation contributed 0.49 percentage point to GDP growth and not the 0.61 percentage point reported last month.

The third-quarter revision showed a much more favorable growth profile for the economy, analysts said. The boost from inventories was not as big as previously estimated, which suggests that businesses are not sitting on piles of unwanted goods.

This means businesses will have more scope to place new orders, which augurs well for economic growth in the coming quarters. The sharp acceleration in GDP in the last quarter should quash any lingering fears that the economy was at risk of stalling after growth averaged just 1.1 percent in the first half. That together with a labor market that is near full employment and slowly rising inflation could leave the Fed comfortable with raising hike interest rates at its Dec. 13-14 policy meeting. The U.S. central bank raised its overnight benchmark interest rate last December for the first time in nearly a decade.

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U.S. GDP tmsnrt.rs/1jLPbzV

U.S. home prices (Case-Shiller interactive) tmsnrt.rs/23LEcIe

Consumer confidence interactive tmsnrt.rs/1qUmtAm

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(Reporting by Lucia Mutikani; Editing by Andrea Ricci and Clive McKeef)

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Published at Tue, 29 Nov 2016 14:00:29 +0000

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DISH’s Sling TV Beta Tests a Cloud DVR

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by PIRO4D from Pixabay

DISH’s Sling TV Beta Tests a Cloud DVR

DISH Networks‘ (NASDAQ: DISH) Sling TV beat all other live-television streaming services to market, but now, it’s facing competition from Sony (NYSE: SNE), and more rivals are soon to come.

Sling TV has a fairly simple proposition at its core. It offers roughly 20 live-streaming cable channels for $20 a month. There are add-on packs with more channels, and users can also spring for premium services like HBO, but at its core, Sling TV is a “skinny bundle,” while Sony offers a pricier, more cable-like package of channels.

One of the challenges for Sling customers has been that the service is primarily a live one. While it includes some on-demand programming, mostly it’s a product where if you miss a show, you have missed it. That’s not always a deal breaker, but it is a mark against Sling when consumers weigh it against more traditional cable offerings.

DISH has certainly not entirely solved that problem (and it’s unlikely to any time soon, given its contracts with its various partner channels) but for a select group of users, it offers the beginnings of an answer. The company has begun a beta test with Roku to offer a cloud DVR.

What is Sling doing?

The live-streaming service is letting customers using Roku streaming devices or its Roku TVs request an invitation to the beta program. Beginning in December, the test may ultimately spread to other devices, the company said in a press release.

“Unlike other OTT services, we’re delivering a true cloud DVR with no 28-day restriction on your recordings, marking another win for Sling TV and our customers,” said Sling TV CEO Roger Lynch “Two years ago we became the first live OTT provider, and we continue to innovate and bring the best experience to our customers.”

Why is this important?

Lynch’s boasting aside, the reason some consumers hesitate to switch to Sling is the fact that the services don’t offer some features that have become common in most television packages. Sony’s service has a DVR, and even at its higher price, that could give it an edge over DISH’s service.

A DVR is no longer an exotic luxury; it’s something most people have and it’s how a lot of us consume much of our television. If DISH can offer a cloud DVR — even for an add-on price — it should be able to win over more customers. That’s especially true given that it has a lower starting price than Sony’s service, making it seem more like a cord-cutting choice, while PlayStation Vue feels more like traditional cable delivered over the internet.

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Published at Mon, 28 Nov 2016 19:49:03 +0000

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Get ready for $40 oil if OPEC deal collapses

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by tpsdave from Pixabay

 

  @mattmegan5

It’s time for the oil industry’s favorite guessing game: Will OPEC continue to flood the world with more oil, or will it finally blink and cut production?

OPEC reached a preliminary deal to much fanfare in September to cut output for the first time since 2008. That tentative agreement sent crude soaring above $50 a barrel.

 But there’s lingering skepticism over whether OPEC can really keep its word at Wednesday’s meeting in Vienna. Internal squabbling among OPEC members — especially Iran, Iraq and Saudi Arabia — has made a concrete agreement difficult to achieve.

Many believe the chances of a significant OPEC supply cut are no better than 50/50. But the oil markets remain oversupplied, so any failure by OPEC to speed up the long-awaited “rebalancing” will likely spark a wave of selling.

Fadel Gheit, managing director of oil & gas research at Oppenheimer & Co., believes OPEC is unlikely to reach a deal — and such a collapse in talks could easily send crude crashing back below $40 a barrel.

“At the end of the day, talk is cheap. If they don’t do anything, oil will be cheaper,” said Gheit.

Oil prices have rallied since plunging to a 13-year low of $26 a barrel in February. But much to the delight of this nation’s car drivers, oil prices continue to remains down by over half from the summer of 2014.

RBC Capital Markets also says $40 oil could be coming if OPEC drops the ball on Wednesday.

“This would represent a tremendous setback for the market-rebalancing act,” Helima Croft, RBC’s global head of commodity strategy, wrote in a recent report.

Antoine Halff, former chief oil analyst at the International Energy Agency, said the market is clearly “nervous” over OPEC’s decision.

“The market has started to rebalance. A production cut by OPEC would speed up the process,” said Halff, a senior fellow at Columbia University’s Center on Global Energy Policy.

The key problem for OPEC has been that some members remain reluctant to cut production — and Saudi Arabia has been unwilling to bear the pain alone.

The obvious holdout is Iran, which is determined to recover its oil output to pre-sanctions levels. It doesn’t help that Iran and Saudi Arabia are longtime enemies that have been fighting proxy wars in Yemen and Syria.

“There is no love lost. They hate each other’s guts,” said Gheit.

Other OPEC members are already producing well below their capacity, leaving little room for cuts.

Libya ramped up production to over half a million barrels a day in October — but that’s still just a third compared to the 1.6 million it pumped in June 2010 prior to the Arab Spring revolution in the Middle East.

Nigeria is pumping more than it did a few months ago but remains below its full potential. Iraq also continues to grapple with oil-related sabotage from ISIS and needs all the oil revenue it can get to keep up the fight against the terror group.

“The have-nots have nothing to give. It’s very difficult,” said Gheit. “OPEC has effectively been in a price war for over two years now. But nobody is blinking.”

There’s also concern over the ability of OPEC, notorious for cheating on its own quotas, to enforce any output ceiling given security concerns in many member countries.

“Implementation would be very difficult. Who is going to monitor the oilfields in Libya? No one is going to volunteer because they could be shot dead,” said Gheit.

Others are more optimistic about OPEC’s ability to reach a consensus on some sort of a cut. RBC’s Croft believes there’s a 50% chance OPEC slashes production by 800,000 to 1.1 million barrels per day and a 30% chance of a smaller cut of 500,000 to 700,000 barrels.

“OPEC’s leadership is cognizant of the risks posed by failing to reach a deal,” Croft wrote.

If a large cut is announced, Croft said oil prices could soar to $55 a barrel or higher.

Any rally beyond that would be “short-lived,” Croft said, because it would “open the door” for more pumping from non-OPEC producers, especially America’s increasingly-efficient shale producers.

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Published at Mon, 28 Nov 2016 20:00:12 +0000

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Samsung Electronics to consider split: Seoul Economic Daily

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The logo of Samsung Electronics is seen at its headquarters in Seoul, South Korea, July 4, 2016.REUTERS/Kim Hong-Ji/File Photo

Samsung Electronics to consider split: Seoul Economic Daily

South Korea’s Samsung Electronics Co Ltd (005930.KS) will consider splitting itself into two as proposed by U.S. activist hedge fund Elliott Management, Seoul Economic Daily reported on Monday citing an unnamed source.

A split would allow the heirs of the founding Lee family to strengthen their grip on the global smartphone leader, the crown jewel of the Samsung Group business empire. Elliott proposed a split in October to boost shareholder value.

Samsung’s board of directors will meet on Tuesday and respond to Elliott’s proposals, the newspaper said. The Korea Exchange separately asked Samsung to comment by 6 p.m. (0900 GMT) on whether it planned a spinoff.

The company did not immediately comment on the newspaper report.

The hedge fund wants Samsung Electronics to divide into a holding vehicle for ownership purposes and an operating company, pay a $26 billion special dividend, pledge to return at least 75 percent of free cash flow to investors and agree to appoint some independent directors.

Neither the Lee family nor Samsung Group have commented on restructuring plans, but the conglomerate’s reorganization efforts have accelerated since Jay Y. Lee took over the reins after his father and Samsung patriarch Lee Kun-hee was incapacitated following a May 2014 heart attack.

Samsung has sold non-core assets while pushing through a merger of two affiliates in 2015 to consolidate stakes in key affiliates under a company controlled by Jay Y. Lee and his two sisters, as the founding family moves to secure a stable transfer of control.

“Even if Samsung Electronics does not comment on specifics such as the timing of a split … the firm will at least say it will implement ownership structure changes in a reasonable manner,” HI Investment said in a report on Monday.

(Reporting by Se Young Lee; Editing by Stephen Coates)

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Published at Mon, 28 Nov 2016 02:31:18 +0000

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More company climate votes ahead, as Trump may loosen energy rules

by 2315319 from Pixabay

by 2315319 from Pixabay

More company climate votes ahead, as Trump may loosen energy rules

By Ross Kerber

| BOSTON

Activist shareholders plan a record number of resolutions focused on climate change at U.S. company annual meetings in 2017, even as President-elect Donald Trump looks set to loosen environmental regulations.

Based on filings so far, U.S. companies are on track to face roughly 200 resolutions on climate matters at their shareholder meetings next year, according to Rob Berridge, who follows the subject for Ceres, a sustainability advocacy group.

There were 174 such resolutions this year, Berridge said, compared with 167 in 2015 and 148 in 2014. Many have been directed at big oil and gas companies, though other sectors have also been targeted, including technology and retail.

Activist shareholders broadly aim to curb companies’ carbon emissions and make energy usage more efficient, or at the very least, to draw the attention of companies and investors to climate change as an urgent problem.

They have had some limited success. Investors at Exxon Mobil Corp the world’s largest publicly traded oil producer, passed a measure this year that could lead to an environmental activist joining its board. “Our position is that the risk of climate change is clear and warrants action,” said Exxon spokesman Alan Jeffers.

The rising number of shareholder votes reflects a growing concern among big investors about the environment, encouraged by steps by some boards to embrace reforms.

Deadlines are fast approaching to get resolutions on the ballot for shareholder meetings to be held in the spring.

The election victory of Trump, who is set to take over as U.S. president on Jan. 20, only seems to have added impetus.

On the campaign trail, Trump dismissed human-caused climate change as a “hoax” and pledged to dismantle the Environmental Protection Agency. He also threatened to withdraw the United States from the landmark 2015 Paris Agreement to combat climate change, although he appeared to step back from that position on Tuesday.

He vowed instead to revive the U.S. coal industry, encourage oil drilling and to scale back regulation of the energy sector.

“Despite what the administration may or may not do, I really believe that corporations understand the risks posed by climate change,” said Danielle Fugere, president of As You Sow, a California nonprofit campaign group. It sponsored 18 climate-related shareholder resolutions in 2016 and expects to file a bigger number next year.

One resolution for 2017 calls on Anadarko Petroleum Corp to report on how it would address the risk of so-called stranded assets, such as high-cost deepwater project investments, that might be caused by a drop in demand for oil and gas. The idea won support from 42 percent of shares voted at the company’s 2016 meeting, up from 29 percent in 2015.

Anadarko’s board last year called the idea “unnecessary and unproductive.” Spokesman John Christiansen said it is reviewing the proposal.

To be sure, among S&P 500 companies, investor support for climate resolutions has been relatively weak, holding steady around 22 percent since 2014, according to research firm Fund Votes.

But activists often won more backing for ideas such as urging companies to report on their strategy for dealing with climate change, according to the Sustainable Investments Institute, a research firm specializing in shareholder votes, supported by universities, pension funds and other institutional investors.

Anne Simpson, director of sustainability for the California Public Employees’ Retirement System (Calpers), which manages about $300 billion, said it plans to file or back resolutions at U.S. oil and gas companies for 2017, though she declined to discuss specifics.

Last year the boards of mining companies including Rio Tinto Plc and Glencore Plc endorsed resolutions Calpers submitted calling for reports on climate risk, and the measures passed by wide margins.

More companies will likely embrace shareholder proposals to head off disruption caused by climate change, Simpson said.

“Economics is driving this, not politics,” she said.

(Reporting by Ross Kerber in Boston; Editing by Bill Rigby)

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Published at Fri, 25 Nov 2016 12:21:43 +0000

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Wells Fargo tries to kill fake account lawsuit

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A man walks by a bank machine at the Wells Fargo & Co. bank in downtown Denver, Colorado, U.S. April 13, 2016.   REUTERS/Rick Wilking/File Photo

A man walks by a bank machine at the Wells Fargo & Co. bank in downtown Denver, Colorado, U.S. April 13, 2016. REUTERS/Rick Wilking/File Photo

Wells Fargo tries to kill fake account lawsuit

  @mattmegan5

Wells Fargo may be sounding a more friendly tone these days, but the big bank is still playing legal hard ball with victims in the fake account scandal.

Wells Fargo (WFC) customers have opened a class action lawsuit against the bank over the opening of unauthorized accounts in their names.

But Wells Fargo is trying to derail that lawsuit. The bank on Wednesday asked the U.S. District Court in Utah, where the class action suit was filed, to force dozens of those customers to resolve their claims quietly in closed-door arbitration instead of open court.

Wells Fargo and other financial companies have frequently used this tactic to stop class action lawsuits. They point to the agreements customers sign that contains fine print requiring them to enter arbitration.

But these forced arbitration clauses are controversial because it helps hide misbehavior by companies in private mediation rather than opening it up to scrutiny in public court documents. And customers suing large corporations for small amounts of money may not be able to find lawyers willing to take on the case.

Wells Fargo is being sued over the creation of as many as 2 million accounts that customers did not authorize. The overwhelming majority of those victims were already customers of the bank, which means they may have signed away their right to join class action lawsuits.

Still, angry politicians have asked Wells Fargo to waive this arbitration clause for customers claiming to have been hurt by the fake accounts. The scandal sparked a national outrage, congressional hearings, countless investigations and the sudden retirement of longtime CEO John Stumpf.

Wells Fargo has apologized for the wrongdoing and alleged mistreatment of workers. The bank launched a national TV advertising campaign that aired during the World Series and featured the company’s iconic stagecoach. The ad pledged, “Wells Fargo is making changes to make things right.”

However, Wells Fargo recently signaled it would continue to try to enforce these arbitration clauses. In response to questions from Senate Democrats over this issue, Wells Fargo said it “believes that the use of arbitration is a fair and efficient process that serves the needs of both parties.”

Zane Christensen, a lawyer representing customers in the class action, said that his firm is “saddened” by Wells Fargo’s response and will “vigorously defend” against the bank’s motion.

“Wells Fargo isn’t concerned about making things right with their customers. Wells Fargo is worried about making things right in public relations,” Christensen said.

In a statement, Wells Fargo said it is “working hard to rebuild trust in our company” and noted that it makes “every attempt” to resolve complaints directly with customers before going to arbitration.

The bank said it’s offering “fast and free” mediation at no cost to customers through an impartial third-party.

Wells Fargo had come under fire during the presidential campaign for its use of forced arbitration clauses. Hillary Clinton said, “We can’t let corporations like Wells Fargo use these fine print ‘gotchas’ to escape accountability.”

While Clinton said she would call on Congress to give federal agencies the power to restrict the use of arbitration clauses, President-elect Donald Trump has not indicated his stance on the Wells Fargo lawsuits.

 CNNMoney (New York)First published November 25, 2016: 11:54 AM EST
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Published at Fri, 25 Nov 2016 16:55:02 +0000

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Israeli Leviathan partners get up to $1.75 bln HSBC, JPMorgan financing

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Israeli Leviathan partners get up to $1.75 bln HSBC, JPMorgan financing

The main Israeli partners developing the large Leviathan natural gas site said on Sunday they signed commitment letters with HSBC and J.P. Morgan for up to $1.75 billion of financing.

 

Delek Drilling and Avner Oil Exploration said the funds would go towards the A1 development stage of the project.

Delek and Avner, units of conglomerate Delek Group, hold a combined 45.3 percent of Leviathan. Texas-based Noble Energy owns nearly 40 percent.

Leviathan, which is expected to start production in 2019 or 2020, was discovered in the eastern Mediterranean in 2010. Much of its 622 cubic meters of natural gas is earmarked for exports.

 

The Leviathan partners have already signed a number of supply deals within Israel as well as a $10 billion contract with Jordan. Israel has also been searching for the best way to export the gas, including possible pipelines to Turkey, Egypt and Cyprus.

The $1.5-$1.75 billion loan will be provided against the encumbrance of the partners’ shares in Leviathan, with variable interest due every three months. The principal will be repaid in a single instalment after four years through a raising of long-term bonds.

 

The A1 development stage for Leviathan includes the supply of gas from Leviathan to the domestic market, Jordan, the Palestinian Authority and other regional agreements, if signed.

 

“We … are committed to act in order to pipe gas from Leviathan to the Israeli market and for export already in late 2019. The Leviathan project is taking a significant step forward today,” Delek Drilling CEO Yossi Abu said in a statement.

(Reporting by Steven Scheer)

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Published at Sun, 27 Nov 2016 09:02:13 +0000

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Retail stock rally leaves few bargains for investors

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Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., November 22, 2016.REUTERS/Brendan McDermid

Retail stock rally leaves few bargains for investors

By Noel Randewich | SAN FRANCISCO

Wall Street expects consumers to open their wallets a little wider this holiday shopping season but bargains among red-hot retail stocks could be hard to find, especially as profit growth proves elusive for many big names.

Retailers, including Best Buy, Kohls Corp and Macy’s, that were pummeled in last year’s disappointing holiday quarter have seen their shares surge recently on expectations that the worst is over, and that an improved economy will send more shoppers into their stores.

Those gains in recent days have helped push the S&P 500 to a record high.

With U.S. consumers bolstered by wage gains and higher employment, holiday sales will grow 3.6 percent, National Retail Federation predicts. Last year’s growth was a modest 3.2 percent, short of the federation’s 3.7-percent growth forecast.

But some investors believe a healthy holiday shopping season and higher sales are already built into share prices, with some surging in the past few weeks. In November alone, shares of Best Buy and Macy’s have each jumped more than 20 percent, while Kohls’ stock is having its best month in more than 16 years with a 25 percent rise.

“We do not necessarily expect these sales gains to translate into outperformance for the consumer sectors, but we suspect they may be good enough to not spook markets,” wrote LPL Financial Chief Investment Officer Burt White in a recent research note.

Not helping matters for stores, mall crowds were relatively thin on Friday in an underwhelming start to the holiday shopping season.

A selection of 15 large retailers that are big Black Friday players, including traditional brick-and-mortar chains and online heavyweight Amazon, averaged a total return of 12 percent this year, including dividends, according to Thomson Reuters data. Best Buy’s stock has jumped 55 percent in 2016 and Macy’s surged 26 percent.

Expectations that tax cuts under President-elect Donald Trump could leave consumers with more disposable income have also fueled gains in the retail sector, with the SPDR S&P Retail exchange traded fund rallying 10 percent in November.

Since the election, that fund has been a big outperformer, outpacing most other industry-tracking funds with a 12.2-percent gain. The wider S&P 500 is up just over 3 percent in the same period.

That’s made it more difficult to find bargains, said Telsey Advisory Group analyst Joseph Feldman. He recommends Home Depot, which is benefiting from a resilient housing market, and Dick’s Sporting Goods, which stands to gain market share following the recent bankruptcy of rival Sports Authority.

Macy’s, Nordstrom and other mall retailers have suffered heavily in recent years due to relentless competition from Amazon.com, a trend expected to continue even as retailers refine their own online sales strategies. A consumer shift away from expensive apparel and toward vacations, home improvement and electronics has also crippled many retailers.

Still, recent forecasts from retailers are encouraging: After reporting better-than expected quarterly profit on Nov 16, Target said it expects consumer spending to remain strong through the holidays, while Macy’s and Kohls have predicted an acceleration this quarter that could help both revive their lagging bottom lines.

Macy’s has seen year-over-year profit declines for six quarters in a row. Kohls’ profit rose last quarter but had fallen for the previous four.

The 15 Black Friday retailers tracked by Reuters are expected on average to grow their revenue by 3.3 percent in the fourth quarter, which would be better than the 2.5 percent increase the year before, according to Thomson Reuters data. But without online shopping goliath Amazon, the group’s revenue is seen edging up just 1.7 percent, slightly better than its 1.1 percent increase last year.

Despite Target’s upbeat comments on holiday spending, its fourth-quarter revenue is seen falling 3 percent, with its net income shrinking 0.8 percent. Wal-Mart Stores on average is expected to report a 16-percent drop in net income, while Nordstrom’s net income is expected to fall 2.8 percent.

Best Buy, which is trading near a six-year high, has said it expects same-stores sales to rise or fall by 1 percent in the current quarter.

(Reporting by Noel Randewich; Editing by Dan Burns and Nick Zieminski)

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Published at Sat, 26 Nov 2016 09:56:33 +0000

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Stores far from overwhelmed as Black Friday sales begin

by cocparisienne from Pixabay

by cocparisienne from Pixabay

Stores far from overwhelmed as Black Friday sales begin

By Nandita Bose and Siddharth Cavale

Crowds were thin at U.S. malls and stores on Black Friday morning, formerly the traditional start of the holiday shopping season, with stores opening earlier and online sales expected to take the biggest share of gains in retail sales over last year.

In the New York and Chicago areas, shoppers said stores were less busy than previous years on the day after the Thanksgiving holiday.

“Nobody was busting down the doors at 6 a.m.,” said Tracy Watkins, a Bed, Bath and Beyond (BBBY.O) store manager at the Chicago Ridge Mall, as temperatures outside lurked below freezing.

“I’ve been here on other Black Fridays and it was bad, but I guess this year because of the hours it’s not bad. Really calm,” said shopper Lauren Green, who was in line outside a Zara clothing store in the Roosevelt Field Mall on Long Island east of New York at 5:20 a.m.

By Thanksgiving evening, online spending by U.S shoppers had climbed to $1.13 billion, according to Adobe Digital Index, surging almost 14 percent from a year ago.

Target Corp (TGT.N) said on Thursday it had seen one of its “strongest days ever” online. Wal-Mart Stores Inc (WMT.N), the largest bricks-and-morter retailer in the United States, said Thanksgiving Day was “one of the of the top online shopping days of the year.”

The deepest average discounts for Black Friday came from leading online retailer Amazon.com Inc (AMZN.O), with an average of 42 percent off, compared with 33 percent off on Walmart, 35 percent on Target and 36 percent on Best Buy (BBY.N) , according to e-commerce analytics firm Clavis Insight.

President-elect Donald Trump also stepped into the online sales excitement. On Friday morning, Trump’s online store announced it was offering a 30 percent-off deal on all campaign products, including a $149 Christmas ornament.

“President-elect Trump loves a great deal,” a promotional email said.

For years, Black Friday has started the holiday shopping season in the United States with retailers offering steep discounts. But its popularity has been on the wane with the emergence of online shopping and cheap deals through the year from retailers.

“There will be continuing dominance in online sales today as consumers increasingly realize they will get the same deals in-store and online,” said Brent Schoenbaum, a partner at Deloitte & Touche LLP. Schoenbaum, who was out visiting stores in Glendale, California, said customer traffic in-store remained subdued.

“It used to be very busy, but for the past two years the mornings are not very crazy,” said Gina Reynolds, a 39-year-old housewife who was shopping at a Macy’s (M.N) store in the Water Tower Place Mall in Chicago.

Crowds were also relatively thin at other retailers in the mall, including department store J.C. Penney (JCP.N) and apparel seller Abercrombie & Fitch (ANF.N).

The holiday shopping season, which runs through Thanksgiving and Christmas on Dec. 25, can account for as much as 40 percent of retailers’ annual sales.

The National Retail Federation has said it expects sales this holiday season to increase by 3.6 percent to about $656 billion, mainly due to the rise in online shopping.

(Additional reporting by Svea Herbst Bayliss in Providence, Renita Young and Nandita Bose in Chicago, Siddharth Cavale in Bangalore, Amy Tennery and Stephanie Brumsey in New York; Editing by Ted Kerr)

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Published at Fri, 25 Nov 2016 17:31:46 +0000

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Q&A: Skincare detoured Anthony Sosnick on his road to success

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Handout photo of Anthony Sosnick provided by Anthony Brands. Anthony Brands via REUTERS

Q&A: Skincare detoured Anthony Sosnick on his road to success

By Cheryl Lu-Lien Tan | NEW YORK

When Anthony Sosnick was a real estate developer at the turn of the millennium, he took a little detour.

Sosnick was looking for skincare products and realized there was an unexplored niche in the cosmetics industry for men’s skincare. He jumped in by launching Anthony Logistics for Men in 2000 out of his home in Bloomfield Hills, Michigan.

The business eventually morphed into Anthony Brands, which now has five skincare labels targeted at both men and women; Anthony, Shaveworks, Emily & Tony, Grandma Stelle’s and ACTION Solutions for Men.

Sosnick, 47, credits some of his earliest life lessons for the business successes he’s had. He shared those, and some other tips, with Reuters.

Q: What early lessons about money have stuck with you?

A: My grandfather had built a large business but unfortunately had some money problems. Essentially, he spent more than he saved.

My father, who is one of my biggest role models, always believed in the importance of saving. When he first started his business, he saved the majority of what he earned from his initial break out deal which led to him starting a company. I learned a lot by watching him manage and grow money.

Q: How did your first job shape or change your work ethic and life ambitions?

A: For my first job, I worked as a caddy at a golf club on the weekends. I used to wake up and ride my bike to the golf course at 4:30 a.m. I would always be one of the first caddies in line and was able to fit in two rounds of golf into the day, essentially doubling what I was able to make. It taught me dedication and self-discipline.

As a 12-year-old kid, waking up at the crack of dawn on the weekends wasn’t always exactly what I wanted to do, but I learned that if you want to be successful, you have to make sacrifices and work hard.

Q: As you became more established in your career, what did you learn about handling wealth?

A: I’ve lived through two recessions. During those times, you saw a lot of wealthy people losing millions of dollars and it’s devastating, not only to them but to their families as well. I think the best advice I can give is to enjoy the payoff from your hard work, but not at the expense of not having enough for a rainy day or a few rainy days.

I don’t want to give my kids an easy ride by any means, but I want to make sure that they are provided for and have money set aside for college.

Q: What has the skincare business taught you about finances?

A: The cosmetics industry can be extremely volatile and as fast as you make money, you can lose it. Timing is everything, in addition to product quality, of course. The skincare business has taught me to take strategic, calculated risks.

Q: How do you decide where to allocate your charitable money?

A: I only give to the charities that I feel passionate about. When I was starting Anthony Brands, my father passed away from cancer and a close friend of mine had suffered from Lymphoma. Because these two diseases hit so close to home, I decided to donate a portion of all Anthony and Shaveworks proceeds to research and awareness to prevent these cancers.

I am also very involved in Guitar Mash, which works to bring musicians of all ages and levels of expertise together to play with some of music’s key players.

Q: What money lessons do you pass down to your own kids?

A: I tell my children all the time: You can do whatever you want with your money, but after you spend it, it’s gone.

I think that laying the foundation for understanding the value of money early on helps establish a sense of financial responsibility. If my kids want to make money, I give them the opportunity to come into my office for a few hours after school or do chores around the house to earn money versus receiving it as gifts for holidays or birthdays. I’ve noticed that the harder they have to work to earn money, the more careful and cautious they are when spending it.

(Editing by Bernadette Baum)

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Published at Wed, 23 Nov 2016 14:57:02 +0000

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Dark clouds hover over big banks’ Trump party

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How the Dow got to 19,000

Dark clouds hover over big banks’ Trump party

  @mattmegan5

Big banks are partying like Jamie Dimon himself was just elected president.

Since Donald Trump’s surprise victory, bank stocks have helped carry the market to new heights. The rally has been underpinned by higher interest rates but it also represents a bet that Trump will reduce big banks’ regulatory burden.

Dimon’s bank JPMorgan Chase (JPM) has soared 11% since Election Day. Goldman Sachs (GS)stock has raced up 16%, while Bank of America (BAC) has surged 19% and is now on track for its best month since 2012.

Even Wells Fargo (WFC), just two months removed from its fake account scandal, is up 14% since Trump defeated Hillary Clinton.

The post-election bank euphoria suggests that investors have forgotten, or are willing to overlook, Trump’s anti-Wall Street stance and populist tone on the campaign trail.

Few seem to recall that Trump advocated for breaking up big banks by reinstating the Depression era law Glass-Steagall.

And the President-elect has named as his top strategist Steve Bannon, a Wall Street critic, who has blamed the 2008 global financial crisis on greedy bankers. Bannon also took issue with the fact that none of the bank execs faced criminal charges.

“There is much more risk to the biggest banks than the market appears to appreciate,” Jaret Seiberg, a Cowen & Co. analyst, wrote in a recent note.

Seiberg urged “caution” for those who assume Trump will be a friend to big banks. In fact, he said some reforms could help regional banks at the expense of mega banks.

“It remains unclear if the Trump administration will turn pro-big bank…or revert to its campaign stance of being anti-Wall Street,” Seiberg wrote.

Wall Street seems to be banking on Trump’s ability and willingness to repeal the Dodd-Frank financial overhaul. Doing that would relieve banks of rising regulatory burdens.

But Chuck Schumer, the incoming Senate minority leader, said on NBC’s Meet the Press on Sunday that he’s got the votes to block any attempt to repeal or roll back Dodd-Frank.

Others wonder if Trump wants to follow through on this promise, pointing to how unpopular it would be with the Rust Belt voters of Ohio and Pennsylvania who helped fuel the billionaire’s rise.

“They didn’t vote for Trump because he was going to kickstart the CDO market,” Michael Block, chief market strategist at Rhino Trading, wrote in a recent note, referring to complex Wall Street securities that played a role in the financial crisis.

“They voted for him for quite the opposite reasons, frankly. How soon we forget,” Block wrote.

James Fotheringham, analyst at BMO Capital Markets, warned investors to “curb your enthusiasm” about bank stocks.

Fotheringham does believe big banks will face less regulation due to Trump’s victory, but he warns in a report that “Trump’s election promise to ‘repeal Dodd-Frank’ will prove an empty one.”

BMO also warns that alternatives to Dodd-Frank could hurt big banks. For instance, Jeb Hensarling, chairman of the powerful House Financial Services Committee, has championed the Financial Choice Act. The legislation would be a “negative” for big banks because it would encourage them to bulk up on lots more capital than they currently have.

Targets in Hensarling’s legislation suggest “significant capital shortfalls” for JPMorgan, Wells Fargo, Bank of America, Citigroup, Goldman Sachs and Morgan Stanley.

The biggest wildcard of all would be if Trump carried out his campaign promise to bring back Glass-Steagall, the Great Depression-era law that bans banks from serving both Wall Street and Main Street. Such legislation, which the GOP included in its official platform at Trump’s urging, would force mega banks like JPMorgan and Citi to shrink themselves.

The cries to shrink big banks may only grow louder after a new Financial Stability Board report this week concluded that Citi (C), Wells Fargo and Bank of America all pose a greater risk to the financial system than they did last year.

“Critics will argue this proves Dodd-Frank did not end too big to fail,” Seiberg wrote. He added that it will fuel support for structural changes such as restoring the Glass-Steagall separation between commercial banking and trading.

Bannon, Trump’s chief strategist and one of the architects of his election upset, appears to be in favor of just that.

Bannon told Buzzfeed two years ago, “You really need to go back and make banks do what they do: Commercial banks lend money, and investment banks invest in entrepreneurs and to get away from this trading.”

Published at Wed, 23 Nov 2016 13:24:04 +0000

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In wake of Wells Fargo, U.S. regulator mulls tougher bank sanctions

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In wake of Wells Fargo, U.S. regulator mulls tougher bank sanctions

A U.S. banking regulator is considering whether to harden sanctions against lenders that abuse their clients or violate banking laws, according to a draft plan, seen by Reuters, that was drawn up in the wake of a scandal at Wells Fargo.

Wells Fargo in September agreed to pay $190 million to settle charges that bank employees opened as many as 2 million accounts without customers’ knowledge. The fraud went on for at least five years, said the San Francisco-based bank that fired 5,300 employees involved.

The Office of the Comptroller of the Currency – the chief regulator for national banks – waived its right to curb executive payouts, screen new leadership and other controls at Wells Fargo following the scandal.

But, according to a memo outlining the new policy, the agency expects tougher scrutiny on when to issue such exemptions in the future and senior officials should be involved in any decision.

The memo said that officials with the agency should not waive sanctions “until appropriate OCC personnel have conducted a case-by-case evaluation about whether granting such relief is warranted.”

In recent years, other national lenders such as Bank of America and Citibank have been granted exemptions similar to those Wells Fargo received.

Until a thorough, written policy is developed by the OCC, officials should refrain from granting relief from the toughest sanctions permitted, according to the memo dated November 18.

An OCC spokesperson was not immediately available for comment.

On Friday, the OCC voided the exemptions that it had originally granted Wells Fargo in a September settlement.

(Reporting By Patrick Rucker; Editing by Simon Cameron-Moore)

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Published at Wed, 23 Nov 2016 04:27:03 +0000

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