Trump announces that Apple's top supplier, Foxconn, is building a $10 billion TV factory in Wisconsin

• Kif Leswing
 

• 19h
• 18,119
 

President Donald Trump with Vice President Mike Pence and House Speaker Paul Ryan AP

Foxconn, a giant manufacturer of electronics like Apple's iPhone and Microsoft's Xbox, said on Wednesday that it plans to open its first major American factory in Wisconsin.

The announcement was made at the White House on Wednesday afternoon. White House officials said that the project would create 3,000 jobs and Foxconn will invest $10 billion into the factory. 

"The company's initial investment of more than $10 billion will create more than 3000 jobs at a minimum, with a potential for more than 13,000 jobs in the very near future," President Donald Trump said. 

The plant will be in House Speaker Paul Ryan's district, and represents a big win for the Republican leader. Other elected officials involved in the negotiations included Trump, White House chief of staff, Reince Priebus, Vice President Mike Pence, and Wisconsin Governor Scott Walker. 

Foxconn CEO Terry Gou was the first official to speak at the announcement, and his short talk focused on high-definition "8k" displays, which would have higher resolution than most current TV screens on the market, which are sold as "4K."

The planned Wisconsin factory will make flat-panel LCD screens for televisions and other electronics. Bloomberg previously reported that the screens could be used to make Sharp-branded televisions. 

"Mr. President, I have met you three times. Each time, you have emphasized the importance of manufacturing in America," Gou said at the announcement. "And providing high-skilled jobs for American workers." 

"Mr. President, the eagle flies," referring to the project's codename, Project Flying Eagle. The Jared Kushner-led White House Office of American Innovation was also thanked by Gou.

“Thank you to my friend, one of the great businessmen anywhere in the world, Terry Gou,” Trump said. “I would see Terry and I’d say, Terry you’d have to give us a couple of these massive, these are massive places you do such great work with. And he’s going to be doing that in a state that’s very close to my heart, Wisconsin.”

"To make such an incredible investment, Chairman Gou put his faith and confidence in the future of the American economy. In other words, if I didn't get elected, he definitely wouldn't be spending $10 billion dollars," Trump said.

“This is a great day for American workers, and manufacturing, and anyone who believes in the concept, and the label, ‘Made in the USA,’” Trump continued. 

Not an Apple plant 

Foxconn is best known as Apple's primary manufacturing partner, and it assembles products like the iPhone. Apple spent $75 billion with Foxconn in 2016.

Trump said in an  interview with The Wall Street Journal  on Tuesday that Apple CEO Tim Cook had agreed to build "three big plants — big, big, big."

But Foxconn is not Apple, though; Apple is just one of Foxconn's many customers. Apple declined to comment on Trump's remarks, on where or when the plants were planned for, or on whether the Foxconn announcement was related to Apple.

Trump hinted that there were additional Foxconn plants in the works. "Foxconn will invest in Southeast Wisconsin, while a larger facility is constructed over the coming years, and that facility is currently under negotiation. it will be about the biggest there is anywhere," Trump said. 

SEE ALSO: Trump is set to make a big jobs announcement, and all signs points to a Foxconn plant in Wisconsin

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Shares in pharma giant AstraZeneca plunge more than 15% after lung cancer drug trial setback

• Will Martin
 

• 9h
• 863

LONDON — Shares in the pharmaceutical giant AstraZeneca are dropping fast on Thursday morning after the company announced that a trial of a new drug for treating lung cancer had not produced the expected results.

In an update to the stock market, the company — which makes many widely used clinical drugs, including anaesthetics and diabetes treatments — said that initial results of the study, known as "Mystic," showed that the medicines did not "meet the primary endpoint" intended from the trial.

The trial featured an immunotherapy drug, which AstraZeneca hopes will be able to be used as an alternative to chemotherapy in the treatment of non-small cell lung cancer in future, but results were disappointing.

The setback has also proved a major negative for investors in the Anglo-Swedish firm, and the company's stock has plummet ted as a result.

By just before 8.25 a.m. BST (3.25 a.m. ET) the FTSE 100-listed stock is down more than 15%, as the chart below illustrates. If shares stay roughly where they are, the company will have its worst day on the FTSE since listing in 1993:

Investing.com

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Facebook beats across the board for Q2 with $9.32 billion in revenue

• Alex Heath
 

• 21h
• 16,415
 

Facebook CEO Mark Zuckerberg.Facebook

FB Facebook Rg-A

 172.50 3.95 (+2.30 %)

DisclaimerGet real-time FB charts here »

Facebook beat Wall Street's expectations across the board for its second quarter earnings on Wednesday with $9.32 billion in revenue driven primarily by mobile ads.

The world's largest social network maintained its steady 17% year-over-year user growth, with 66% of its 2.01 billion users visiting the service every day.

Shares dipped roughly 4% in after-hours trading over apparent confusion related to the company's recent switch to reporting GAAP numbers. Bloomberg, which is widely relied on by traders for financial info, initially reported that Facebook had missed earnings targets, but quickly issued a correction.

Facebook's stock is up roughly 40% this year, demonstrating assurance from investors that the company can diversify the sources of its revenue growth and continue to grow its user base. Traders have been the most bullish on the stock in years heading into Wednesday's earnings.

On a conference call with analysts, CFO Dave Wehner reiterated that Facebook expects a slowdown in revenue growth this year as it reaches the limit of the number of ads it can show in the News Feed. CEO Mark Zuckerberg said he expects video to be the main source of growth in the near future and that the company is investing heavily in monetizing Messenger and WhatsApp.

Here are the key numbers for Facebook's Q2 earnings:

• • EPS (GAAP): $1.32 vs. $1.13 expected, up 69% from the year-ago period.
  • Revenue: $9.32 billion vs. $9.2 billion expected, up 45% from the year-ago period.
  • Monthly active users: 2.01 billion, up from 1.94 billion last quarter.
  • Daily active users: 1.32 billion, up from 1.28 billion last quarter.

Here are some charts showing Facebook's growth from Q2:

Facebook

Facebook

Facebook

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Warren Buffett's Berkshire Hathaway could walk away from its $9 billion energy deal

• Jessica DiNapoli, Reuters

• 21h
• 3,988

AP Images

WILMINGTON, Del., July 26 (Reuters) - Warren Buffett's Berkshire Hathaway Inc will walk away from its $9 billion acquisition of Oncor Electric Delivery Co if the deal is delayed, an attorney for the parent company of Texas' largest utility told a bankruptcy judge on Wednesday.

Energy Future Holdings Corp, the bankrupt owner of Oncor, disclosed Berkshire Hathaway's warning as the judge considers a request by the utility's biggest creditor, hedge fund Elliott Management Corp, to hold up the deal with Buffett so it can put together its own $9.3 billion bid for Oncor.

"(Berkshire Hathaway) may not go away forever, but they have told us and we have no reason to doubt them, that they will go away," Energy Future's lawyer Chad Husnick told U.S. bankruptcy court Judge Christopher Sontchi at a hearing in Wilmington, Delaware.

"They may come back but it's ... going to be for a lower price," Husnick added.

Berkshire Hathaway's deal for Oncor is due to be approved by a bankruptcy court on Aug. 10, but Elliott is asking for a delay of 35 to 40 days so it can put together financing for its own bid for the utility.

If Elliott's request for a delay is granted, Berkshire has the right to end its deal, according to court papers.

Energy Future filed bankruptcy three years ago, and two earlier deals for Oncor fell apart after facing regulatory hurdles.

(Reporting by Jessica DiNapoli in Wilmington, Delaware; Additional reporting by David French in New York; Editing by Lisa Shumaker)

Read the original article on Reuters. Copyright 2017. Follow Reuters on Twitter.

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Libor will be formally ditched in 2021 says Britain's top financial regulator

• Jasper Jolly, City AM

• 6h
• 1,311

Pixabay

The infamous Libor benchmark lending rate will be dropped by 2021, the UK's top financial regulator has announced.

Andrew Bailey, head of the Financial Conduct Authority (FCA), said the benchmark rate will no longer receive the backing of regulators as the industry moves to a more reliable marker, although it remains unclear how legacy contracts referencing Libor will continue to function if it becomes defunct.

Libor, the London Interbank Offered Rate, is currently referenced in $350 trillion (£268 trillion) of contracts throughout the world, according to the Bank of England, whose governor Mark Carney this month said he wanted to move to a "less Libor-centric world".

In a speech delivered this morning in London, Bailey said banks had agreed "voluntarily to sustain Libor for a four- to five-year period, i.e., until end-2021."

City AM

The banks may still produce the rate after that point, he said, but if it does continue it will "no longer be sustained through the mechanism of the FCA persuading or obliging panel banks to stay."

Libor became sullied after the financial crisis after the banks involved in setting it were found to have manipulated it for profit.

The rate was set by taking interest rates for borrowing on the market reported by London banks. However, these rates were often not based on any actual transactions, so were open to false figures.

The scandal resulted in banks paying out billions of pounds in fines, as well as the conviction of multiple bankers.

The administration of the benchmark rate, used in corporate lending, mortgages, and even student debt, was passed from the now superseded British Bankers' Association to the independent Intercontinental Exchange (Ice) in 2014. Bailey noted the FCA has no evidence of any further wrongdoing in setting the rate, after a "step change" in the governance around setting the rate.

Bank of England governor Mark Carney pauses as he speaks during a news conference at the Bank of England in London, Britain July 5, 2016. REUTERS/Dylan Martinez

However, Bailey said the lack of liquidity in the market for unsecured wholesale term lending between banks which Libor is intended to represent meant the benchmark struggles to accurately reflect true conditions. Banks conducted only 15 transactions over the course of 2016 for one of the currency pairs, Bailey noted, despite having to give daily estimates.

He said: "In our view it is not only potentially unsustainable, but also undesirable, for market participants to rely indefinitely on reference rates that do not have active underlying markets to support them."

The FCA is aiming for a "planned and orderly" transition away from Libor over the next four years to other so-called risk-free reference rates, such as the Bank of England's Sonia, the Sterling Overnight Index Average.

Read the original article on City AM. Copyright 2017.

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Fed says unwind of its $4.5 trillion balance sheet will start 'relatively soon'

• Akin Oyedele
 

• 22h
• 9,872

Federal Reserve Board Chair Janet Yellen. Thomson Reuters

The Federal Reserve left its benchmark interest rate unchanged and planned to start shrinking its balance sheet "relatively soon," according to its policy statement released Wednesday.

Following a two-day meeting in Washington DC, traders saw a 0% likelihood that the Fed would raise interest rates, according to Bloomberg's World Interest Rate Probability data.

Markets on Wednesday were focused on the Fed's next big task: paring down the $4.5 trillion balance sheet it built by buying Treasurys and other assets after the financial crisis to keep interest rates low.

Minutes of the Fed's June meeting showed that officials were divided over when balance-sheet normalization should begin. Some Fed members thought that communicating too explicitly and too soon would signal that the Fed was getting much more aggressive with removing recession-era support systems.

Amid uncertainty about the balance sheet's effect on markets, "there should be more caution and a following of every single indicator as we approach that point and once it starts," said Seema Shah, the global investment strategist at Principal Global Investors, which manages about $420 billion in assets.

"I get the sense that people are diminishing how big" the balance sheet "really is," she told Business Insider before the Fed's announcement.

The other big focus in Wednesday's statement was the Fed's view on inflation. The core personal consumption expenditures index, which the Fed prefers to use to track price changes, has fallen further away from the central bank's 2% target for four straight months.

"On a 12-month basis, overall inflation and the measure excluding food and energy prices have declined and are running below 2 percent," the Fed said, updating its characterization from "declined recently."

Fed Board Chair Janet Yellen recently said in Congress that inflation was being watched closely. She previously indicated that temporary factors like cheaper cellphone plans and prescription drugs were behind the inflation slowdown.

The Fed raised its benchmark interest rate last month for the third time this year, signaling it believed the economy was strong enough to withstand higher borrowing costs.

Here's the full statement:

Information received since the Federal Open Market Committee met in June indicates that the labor market has continued to strengthen and that economic activity has been rising moderately so far this year. Job gains have been solid, on average, since the beginning of the year, and the unemployment rate has declined. Household spending and business fixed investment have continued to expand. On a 12-month basis, overall inflation and the measure excluding food and energy prices have declined and are running below 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee continues to expect that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace, and labor market conditions will strengthen somewhat further. Inflation on a 12-month basis is expected to remain somewhat below 2 percent in the near term but to stabilize around the Committee's 2 percent objective over the medium term. Near-term risks to the economic outlook appear roughly balanced, but the Committee is monitoring inflation developments closely.

In view of realized and expected labor market conditions and inflation, the Committee decided to maintain the target range for the federal funds rate at 1 to 1-1/4 percent. The stance of monetary policy remains accommodative, thereby supporting some further strengthening in labor market conditions and a sustained return to 2 percent inflation.

In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. The Committee will carefully monitor actual and expected inflation developments relative to its symmetric inflation goal. The Committee expects that economic conditions will evolve in a manner that will warrant gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.

For the time being, the Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee expects to begin implementing its balance sheet normalization program relatively soon, provided that the economy evolves broadly as anticipated; this program is described in the June 2017 Addendum to the Committee's Policy Normalization Principles and Plans.

Voting for the FOMC monetary policy action were: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; Charles L. Evans; Stanley Fischer; Patrick Harker; Robert S. Kaplan; Neel Kashkari; and Jerome H. Powell.

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Canada hit 2 critical warning signs for a financial crisis

• Daniel Wong, Better Dwelling

• Jun. 28, 2017, 5:16 PM
• 37,528

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AP/Mark J. Terrill

Yet another international organization is warning about Canada’s major debt problems, mostly tied to a housing addiction.

The Bank for International Settlements (BIS), an international banking organization that serves as a bank for central banks, is flashing warning indicators for Canada.

The warning signs mean that debt has reached critical levels, and will likely result in a financial crisis.

Credit-to-GDP Gap Breaches Critical Level in Canada

The credit-to-GDP gap has reached a critical level in Canada. The BIS defines this as the “difference of the credit-to-GDP ratio from its trend.” That’s bankster for “it compares credit consumption to the output of the economy.” If the level is too high, the amount of private credit is “unjustified.” The lower the number, the more credit can be “safely” consumed. BIS considers anything above 2 to be a strong gap, and anything above 10 to be a critical warning. Breaching 10 results in a banking crisis in two-thirds of economies, within three years.

Currently Canada is sitting at 14.1, the only G7 country to breach this level. China and Hong Kong are the only other countries that are higher. China is currently at 24.6, and Hong Kong is at 30.3. To contrast Australia is at -0.5, Germany is at -4.3, and the US is at -7.7. So we’re pretty far off the mark. Also worth noting that the BIS has also flagged Canada for a property price gap above critical level. This could complicate the credit-to-GDP gap even further.

BIS

Debt Service Ratio Will Hit A Critical Level If Rates Rise To "Normal" In Canada

The debt service ratio (DSR) of three countries are throwing warning signs when interest rates return to normal. A DSR is a term economists use to determine the ratio of debt payments a country will be making, compared to the country’s export earnings. It covers principal and interest payments. If the level is too high, it makes it hard for an economy to grow. You know, since people are devoting a high amount of money to stuff they already bought.

BIS modeled a 250 basis point rise in interest rates, which would put Canada back to a“normal” level according to Canadian parliament. This modest increase would send three economies above the critical warning threshold – Hong Kong, China, and Canada. The DSR of those countries are modeled to be 11.1, 8.8, and 7.6. The organization claims that when this warning threshold is breached, two-thirds of countries face a banking crisis within two years.

Canada, China, and Hong Kong are the only economies that have issues with both their credit-to-GDP gap, and their debt-service-ratios if rates rise. China is actively trying to crackdown on high amounts of leverage, even at major financial institutions. Canada and Hong Kong, not so much. Two-thirds of countries experience a banking crisis, eh?

Read the original article on Better Dwelling. We’re building a different kind of news outlet – one that aims to stimulate discussion rather than direct it, but we need your help. Like this article? Share it with a friend. Hate it? Give us a tweet and tell us why. Like us on Facebook to be notified when the next post goes live. Copyright 2017. Follow Better Dwelling on Twitter.

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