Trump Blames Fed Interest Rates as US Consumer Prices Hit Wall
Consumer prices edged up a slight 0.1 percent in September as energy prices retreated after a big gain in August.
The Labor Department said Thursday that the September gain in its closely watched consumer price index followed a 0.2 percent rise in August. It was the smallest monthly gain since June.
Inflation has been on a slight rise this year after a prolonged stretch when prices kept falling below the 2 percent target set by the Federal Reserve. For the 12 months ending in September, consumer prices were up 2.3 percent.
Core inflation, which excludes volatile energy and food costs, rose 0.1 percent in September, the same level as in August. It is up 2.2 percent over the past year.
The Federal Reserve has raised interest rates three times this year and signaled that it will raise rates one more time in 2018 in an effort to make sure that a strong economy and low unemployment do not trigger an unwanted rise in inflation. The jobless rate fell to a 49-year low of 3.7 percent in September.
But President Donald Trump has stepped up his criticism of the Fed’s rate hikes, calling them unwarranted. Rising interest rates were one of the factors blamed for the big sell-off on Wall Street this week.
Trump, who has often pointed to the stock market surge as evidence that his economic policies are working, said Wednesday that the Fed had “gone crazy” raising short-term interest rates.
“The Fed is making a mistake. They’re so tight,” Trump told reporters before a campaign rally in Pennsylvania on Wednesday evening.
Shareholders Must Vote on Musk’s Return as Tesla Chairman
If Tesla CEO Elon Musk wants to return as chairman, shareholders will have to vote on it.
The requirement is detailed in a court brief filed Thursday by Tesla and the Securities and Exchange Commission. The brief was required by a federal judge who must approve a securities fraud settlement reached with Musk and the company last month.
Musk and Tesla agreed to pay $20 million each and make concessions to settle an SEC lawsuit alleging Musk duped investors with statements about a plan to take the company private.
The settlement allows Musk to remain CEO but requires him to relinquish his role as chairman for at least three years.
U.S. District Judge Alison Nathan ordered the brief, which is a common practice in the court.
US Envoy: Continue Sanctions Until Russia Exits East Ukraine
The United States’ envoy for the conflict in eastern Ukraine says the West must remain firm with sanctions against Moscow because Russia is not withdrawing its forces from the separatist region.
Kurt Volker spoke to reporters on Thursday from Brussels, where he is meeting EU officials about keeping the sanctions in place.
Volker was appointed under President Donald Trump to push for resolution of the conflict. More than 10,000 people have been killed since 2014 in fighting between Ukrainian forces and Russia-backed separatists.
Sanctions imposed by Washington and the EU include asset freezes and travel bans.
“It’s very important that we continue to keep sanctions in place given that Russia has not withdrawn its forces from Ukraine or made any steps really toward resolving the conflict there,” he said.
German Government Cuts Growth Forecast Amid Trade Tensions
The German government has cut its forecast for the country’s economic growth this year to 1.8 percent from 2.3 percent, in part because of rising global trade tensions.
The government also trimmed its 2019 outlook for Europe’s biggest economy on Thursday, saying that it now expects 1.8 percent growth rather than the 2.1 percent expansion it predicted in April. Last year, gross domestic product grew 2.2 percent, Germany’s strongest performance in six years.
Economy Minister Peter Altmaier said a statistical revision and delays in registering new cars accounted for most of the change, but “smoldering trade conflicts worldwide” played a part.
He said an escalation of tensions between the U.S. and Europe was averted, but “the underlying problems haven’t yet really been solved” and U.S.-China tensions are affecting global growth.
IMF Team to Visit Pakistan After Request for Bailout Loans
The head of the International Monetary Fund says it will send a team to Pakistan in the coming weeks after the government requested emergency bailout loans.
IMF Managing Director Christine Lagarde confirmed that Pakistan had requested the loans after meeting with Finance Minister Asad Umar in Indonesia on Thursday, without saying how much the Pakistanis had asked for.
Analysts say Pakistan is seeking $8 billion in loans in order to confront a balance of payments crisis. The government is also seeking fresh loans from China, which is already heavily invested in transport and energy.
Pakistan’s currency plunged by around 7 percent earlier this week after word of the loan request was made public.
Walgreens: Fiscal 4Q Earnings Snapshot
Walgreens Boots Alliance Inc. (WBA) on Thursday reported fiscal fourth-quarter earnings of $1.51 billion.
On a per-share basis, the Deerfield, Illinois-based company said it had net income of $1.55. Earnings, adjusted for one-time gains and costs, came to $1.48 per share.
The results beat Wall Street expectations. The average estimate of 11 analysts surveyed by Zacks Investment Research was for earnings of $1.44 per share.
The largest U.S. drugstore chain posted revenue of $33.44 billion in the period, which missed Street forecasts. Nine analysts surveyed by Zacks expected $33.64 billion.
For the year, the company reported profit of $5.02 billion, or $5.05 per share. Revenue was reported as $131.54 billion.
Walgreens expects full-year earnings in the range of $6.40 to $6.70 per share.
Walgreens shares have dropped slightly since the beginning of the year. The stock has risen 3.5 percent in the last 12 months.
Delta Profits Soar as Demand Drives Ticket Prices Higher
Delta topped third-quarter profit expectations with strong travel demand pushing ticket prices higher.
The Atlanta carrier posted earnings of $1.31 billion, or $1.91 per share. Removing one-time charges, per-share profit was $1.80, which is six cents better than expected, according to a survey by Zacks Investment Research.
Revenue was $11.95 billion, about in line with expectations.
Delta said Thursday that it took a $30 million hit from Hurricane Florence and had a $655 million fuel cost increase in the quarter, but benefited from a lower share count and changes in the tax law.
Hurricane Florence caused at least 3,500 flight cancellations last month, mostly in the Carolinas. Delta said on Sept. 17 that it canceled 275 to that point and was still dealing with disruptions at two airports.
But ticket prices are up across the board, led by business and first-class tickets, where revenues increased almost 20 percent.
Shares of Delta Air Lines Inc. climbed more than 2 percent before the opening bell.
With Few Seeing Second Act for Sears, Company Shares Routed
Sears is being pummeled before the opening bell on a report that banks are pushing the 130-year-old retailer to liquidate.
The report Thursday in The Wall Street Journal comes one day after stock in Sears Holdings Corp. tumbled 30 percent.
Shares, which have fallen 86 percent this year, tumbled another 15 percent in premarket trading. The company’s stock fell below $1 this month with few seeing a second act for the company that revolutionized how American shop.
Only a quarter of the 4,000 stores operating just six years ago still have the lights on and a significant debt repayment is looming. CEO and chairman Eddie Lampert, who owns 31 percent of outstanding shares, appears to be unwilling to extend another lifeline.
“The prognosis is gloomy, just as it has been for many years,” said Neil Saunders, managing director of GlobalData Retail.
Word that lenders are pushing for liquidation, Saunders said, is a sign that Sears is a company with no inherent value and is “broken operationally as well as financially.”
“At some point, the music has to stop,” Saunders said. “We believe that time is now.”
Sears is based outside of Chicago in Hoffman Estates, Illinois. It still employs 89,000 people.
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