FILE PHOTO: A man walks past a sign board of Huawei at CES (Consumer Electronics Show) Asia 2018 in Shanghai, China June 14, 2018. REUTERS/Aly Song
April 22, 2019
HONG KONG (Reuters) – Huawei Technologies said on Monday its first-quarter revenue jumped 39 percent to 179.7 billion yuan ($26.81 billion), in the Chinese technology firm’s first-ever quarterly results.
The Shenzhen-based firm, the world’s biggest telecoms equipment maker, also said its net profit margin was around 8 percent for the quarter, which it added was slightly higher than the same period last year. Huawei did not disclose its actual net profit.
The limited results announcement comes at a time when Washington has intensified a campaign against unlisted Huawei, alleging its equipment could be used for espionage and urging U.S. allies to ban it from building next-generation 5G mobile networks.
Huawei has repeatedly denied the allegations and launched an unprecedented media blitz by opening up its campus to journalists and making its typically low-key founder, Ren Zhengfei, available for media interviews.
The Chinese firm, which is also the world’s No. 3 smartphone maker, said last week the number of contracts it has won to provide 5G telecoms gear increased further despite the U.S. campaign.
By the end of March, Huawei said it had signed 40 commercial 5G contracts with carriers, shipped more than 70,000 5G base stations to markets around the world and expects to have shipped 100,000 by May.
Huawei’s network business saw its first drop in revenue in two years in 2018. But Ren Zhengfei said in an interview with CNBC earlier this month that network equipment sales rose 15 percent while sales of the consumer business increased by more than 70 percent in the first quarter.
“These figures show that we are still growing, not declining,” Ren said.
Guo Ping, rotating chairman of the company, has said he expects all three business groups – consumer, carrier and enterprise – to post double-digit growth this year.
Huawei also said on Monday it had shipped 59 million smartphones in the first quarter. It did not disclose year-ago comparable figures, but according to market research firm Strategy Analytics, Huawei shipped 39.3 million smartphones in the first quarter of 2018.
(Reporting by Sijia Jiang and Julia Fioretti; Editing by Muralikumar Anantharaman)
FILE PHOTO: Junichiro Hironaka, chief lawyer of the former Nissan Motor chairman Carlos Ghosn, walks in front of a screen showing Ghosn’s video statement during a news conference at Foreign Correspondents’ Club of Japan in Tokyo, Japan April 9, 2019. REUTERS/Issei Kato
April 22, 2019
TOKYO (Reuters) – The lead lawyer for Carlos Ghosn said he expected a fresh indictment for the former Nissan Motor Co boss to come later on Monday.
“We haven’t heard of an indictment yet. I expect it will be this afternoon,” Junichiro Hironaka told reporters outside his office.
Ghosn is expected to be indicted by Tokyo prosecutors Monday for aggravated breach of trust. It would be the fourth charge against him since he was arrested in November on suspicion of financial misconduct. He has denied all allegations against him.
(Reporting by Tim Kelly; Editing by Himani Sarkar)
FILE PHOTO: A Tesla logo is seen on a wheel rim during the media day for the Shanghai auto show in Shanghai, China April 16, 2019. REUTERS/Aly Song/File Photo
April 22, 2019
SHANGHAI (Reuters) – U.S. electric vehicle maker Tesla Inc on Monday said it had sent a team to investigate a video on Chinese social media which showed a parked Tesla car exploding.
The video was widely shared on China’s Twitter-like Weibo, with the hashtag “Tesla self-ignites” becoming one of the most-read topics on the platform, being viewed over five million times.
“After finding out about this incident in Shanghai, we immediately sent a team to the scene. We are currently contacting relevant departments to understand the situation. Based on current information, no one was hurt,” Tesla said on its official Weibo account.
(Reporting by Brenda Goh; Editing by Christopher Cushing)
FILE PHOTO – Pedestrians are reflected on an electronic board showing stock prices outside a brokerage in Tokyo, Japan December 27, 2018. REUTERS/Kim Kyung-Hoon
April 22, 2019
By Shinichi Saoshiro
TOKYO (Reuters) – Asian stocks were steady on Monday as investors awaited the return of major financial markets from the Good Friday holiday, while oil prices spiked on a report the U.S. is likely to ask all importers of Iranian oil to end their purchases or face sanctions.
Brent futures rallied to a five-month high, after the Washington Post said U.S. Secretary of State Mike Pompeo will announce “that as of May 2, the State Department will no longer grant sanctions waivers to any country that is currently importing Iranian crude or condensate.”
Equities markets were subdued, with MSCI’s broadest index of Asia-Pacific shares outside Japan trading little changed.
The index was within reach of a nine-month peak scaled on Thursday after Chinese economic data beat expectations and eased concerns about the health of the world economy.
The advance, however, slowed as many markets in Asia, Europe and North America shut down for Good Friday.
“Equities will be looking at further corporate earnings for immediate incentives. While strong economic indicators, particularly from China, have helped sentiment, they have not formed a strong trend,” said Soichiro Monji, senior strategist at Sumitomo Mitsui DS Asset Management in Tokyo.
“The U.S.-China trade talks will have to end in one way or another for a trend to form.”
South Korea’s KOSPI was almost flat and Japan’s Nikkei shed 0.2 percent.
In currencies, the dollar index against a basket of six major currencies was a shade lower at 97.369.
The index was still within touching distance of a 1-1/2-month peak reached on Thursday after steady U.S. retail sales data.
The euro was little changed at $1.1244, having taken a hit late last week after purchasing managers’ index (PMI) releases showed weak manufacturing activity in Europe.
The dollar was steady at 111.91 yen.
The Australian dollar, sensitive to shifts in risk sentiment, inched down 0.1 percent to $0.7147.
The Canadian dollar, on the other hand, added 0.1 percent to C$1.3381 thanks to a bounce in crude oil prices.
Brent crude rose 0.83 percent to $72.57 per barrel after touching $72.58, highest since Nov. 8, 2018, underpinned by the Washington Post report.
U.S. crude futures climbed 0.84 percent to $64.54 per barrel.
The U.S. reimposed sanctions in November on exports of Iranian oil after President Donald Trump unilaterally pulled out of a 2015 nuclear accord between Iran and six world powers. Washington is pressuring Iran to curtail its nuclear program and stop backing militant proxies across the Middle East.
Crude extended gains from last week, when a drop in crude exports from OPEC’s de facto leader, Saudi Arabia, and a draw in U.S. drilling rigs and oil inventories supported prices.
(Editing by Shri Navaratnam)
FILE PHOTO: An oil pump jack pumps oil in a field near Calgary, Alberta, Canada, July 21, 2014. REUTERS/Todd Korol/File Photo
April 22, 2019
By Henning Gloystein
SINGAPORE (Reuters) – Oil prices rose early on Monday, with Brent hitting its highest level since November, driven up by a decline in U.S. drilling activity and ongoing supply cuts led by producer club OPEC.
Brent crude futures were at a November 2018 high of $72.58 per barrel at 0028 GMT, up 0.8 percent from their last close.
U.S. West Texas Intermediate (WTI) crude futures were at $64.55 per barrel, up 0.9 percent from their previous settlement.
“The path of least resistance remains higher (for oil prices),” said Stephen Innes, head of trading at SPI Asset Management, pointing to Saudi supply cuts, a decline in the U.S. rig count and supply disruptions from Libya to Venezuela as reasons for a tight market.
U.S. energy firms last week reduced the number of oil rigs operating by two, to 825, General Electric Co’s Baker Hughes energy services firm said in its weekly report on Thursday.
Outside the United States, the Organization of the Petroleum Exporting Countries (OPEC) has led supply cuts since the start of the year aimed at tightening global oil markets and to propping up crude prices.
Brent prices have risen by more than a third this year, while WTI has climbed more than 40 percent over the same period.
(Reporting by Henning Gloystein; Editing by Joseph Radford)
Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., April 18, 2019. REUTERS/Brendan McDermid
April 21, 2019
By David Randall
NEW YORK (Reuters) – It looks like something has to give in global markets.
Stocks and bonds around the world have rallied atypically together since the start of the year, rewarding investors both bullish and bearish on the direction of global growth.
The main catalyst for the gains was the Federal Reserve’s surprise decision in early January to pause its tightening policy, after four interest rate increases in 2018 raised fears it was being too aggressive as the economy cooled and inflation remained minimal. Those fears helped send global markets into a tailspin in December.
Yet with the U.S. benchmark S&P 500 near a record level and corporate junk bonds notching new highs, the question stock and bond investors are asking is whether the Fed’s next move will be a rate cut that further propels risk assets or a rate hike that cuts into the stock market’s momentum.
A move by the Fed on interest rates or a communication misstep by the central bank would likely end either the rally in the stock market or in investment-grade bonds by the end of the year, restoring the traditional give-and-take between risk and safety, investors say.
“The Fed is between a rock and a hard place,” said Kathleen Gaffney, a portfolio manager at Eaton Vance Management in Boston. “They can’t go lower because there are signs that inflation is rising and they can’t go higher because of global political uncertainty. It leaves the market on pause.”
The U.S. central bank has said it will soon stop letting bonds bought during its “quantitative easing” period following the financial crisis roll off its balance sheet, which also helped push yields on safe havens like Treasuries lower and acted as a tailwind for riskier assets.
Gaffney said the Fed will likely have to raise rates again because of rising wages and other forms of inflation by the end of the year, adding that such a move will “pierce” the high valuations in both the stocks and bond markets.
The rolling four-month percentage change in the price of the S&P 500 and the 10-Year Treasury note have both been positive for three straight months, according to a Reuters analysis. That is the longest such streak since a five-month run that ended in August 2017, it showed.
In that same 2017 period, the S&P 500 gained and 10-year Treasury yields fell as the market digested conflicting economic reports during the first year of the Trump administration, before the Federal Reserve in September began quantitative tightening that resulted in bond yields rising as the S&P 500 continued to rally.
Since January equity markets around the world have made up much of the ground they lost during a wrenching fourth quarter of 2018 that sent the U.S. stock market to the brink of a bear market.
The S&P 500 and Europe’s STOXX 600 are up almost 16% year to date, while stock indexes in China are up nearly 30%.
The ICE Merrill Lynch U.S. high yield index is up 8.6% year to date while the Merrill Lynch World sovereign bond index is up almost 1.5%.
World stocks vs bonds – https://tmsnrt.rs/2IrqXeF
A rally in benchmark 10-year Treasury notes, usually seen as a safe haven, undercuts the picture of a “risk on” market. Their yields have slid from 2.69% at the start of the year to as low as 2.34% in late March.
“At this point in the cycle, equity investors are trying to take any incremental news positively while fixed income investors are not,” said Jen Robertson, a portfolio manager at Wells Fargo Asset Management in London. “It’s quite delicate at the moment and any negative news out of first quarter earnings could impact this sharp bounce.”
Further uncertainty due to the economic impact of the UK leaving the European Union, which has now been pushed back to Oct. 31, or a deterioration in U.S.-China trade talks could be a “shock to the system” and derail both stocks and bonds, she said.
The spread between U.S. three-month bills and 10-year notes turned negative for the first time since 2007 in March, a bearish sign as a yield curve inversion has signaled an upcoming economic recession in the past.
The move initially boosted stock prices as investors predicted it would hem the Fed in from future interest rate hikes. But equities could fall soon if recession fears continue to grow, said Hiroaki Hayashi, managing director of Fukoku Capital Management in Tokyo.
“If you look at the past experiences, share prices have often rallied six to nine months after the yield curve initially inverted before entering a major correction. I believe we are exactly at such a phase now.”
Despite outsized gains this year, financial markets have not indicated investors have faith that the global economy can grow without historically low interest rates a decade after the end of the Great Recession, said Anwiti Bahuguna, head of multi-asset strategy at Columbia Threadneedle Investments.
“The bull market we’ve had for the past 10 years is essentially because of really low interest rates,” Bahuguna said.
“I don’t think that equilibrium will last much longer,” she added, saying rising inflation and low unemployment could soon test global markets’ ability to cope with tighter monetary policy.
(Additional reporting by Hideyuki Sano in Tokyo and Terence Gabriel in New York.; Editing by Alden Bentley and Tom Brown)
Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., April 18, 2019. REUTERS/Brendan McDermid
April 21, 2019
By Howard Schneider and Trevor Hunnicutt
WASHINGTON/NEW YORK (Reuters) – Risk-taking has been the rage since the Federal Reserve quit hiking interest rates at the end of last year. U.S. stocks are back near record highs and investors are stockpiling the lowest-grade corporate bonds with only a smidgen of extra compensation for the added risk.
That rebounding mood on Wall Street may be welcomed by a president that has been demanding the Fed cut rates after markets fell sharply last year, and complaining that even pausing at the current level is the wrong call.
But if anything the ‘pause party’ on Wall Street makes it even less likely that the U.S. central bank will cut rates. Recent positive news on retail sales and exports, which have eased concerns of a sharply slowing economy, makes the case for a rate cut even weaker.
Investors at least have gotten the message, and shifted from projecting a rate cut later this year to now putting the odds at only 50-50 that the Fed will move lower by early 2020.
Wall Street celebrates the Fed’s ‘pause: https://fingfx.thomsonreuters.com/gfx/mkt/11/9740/9650/Pasted%20Image.jpg
The state of financial markets, say some analysts, is evidence the Fed’s rate increases last year were on point, allowing the economy to continue growing while keeping risks in check. A rate cut at this stage would only be courting problems.
“The argument for why they should keep the possibility of a rate hike on the table is because of financial stability,” Citi chief economist Catherine Mann said in remarks on Wednesday to a conference on financial stability at the Levy Economics Institute of Bard College.
After a decade of near zero interest rates, “moving toward a constellation of asset prices that embodies risks is critical for getting us to a more stable financial market,” she said, noting that both equity prices and low-grade bond yields show a market that remains too sanguine.
In their critiques of the Fed, U.S. President Donald Trump, White House chief economic adviser Larry Kudlow, and possible Fed nominee Stephen Moore have argued that lower rates would allow faster growth and be in line with Trump’s economic plans. They contend that, with the risk of inflation low, the central bank does not need to maintain ‘insurance’ against it by keeping rates where they are.
Overlooked in that analysis are the financial stability concerns steadily integrated into Fed policymaking since the 2007 to 2009 financial crisis. Mann spoke at a conference named in honor of economist Hyman Minsky, who explored how financial excess can build during good times, and unwind in catastrophic fashion. The downturn a decade ago showed just how deeply that dynamic can scar the real economy.
Financial stability isn’t a formal mandate for the Fed, which under congressional legislation is supposed to maintain the twin goals of maximum employment and stable prices. But since the crisis the central bank has concluded that keeping financial markets on an even keel is a necessary condition for achieving the other two aims.
That doesn’t mean an end of volatility or a guarantee of profits, but rather that risks are properly priced and that the use of leverage – investments made with borrowed money – is kept within safe limits.
Keeping an eye on stock valuations: https://fingfx.thomsonreuters.com/gfx/mkt/11/9738/9648/Pasted%20Image.jpg
That’s a key reason why even policymakers focused on maintaining high levels of employment, like Boston Fed president Eric Rosengren, at times have taken on a hawkish tone in favor of rate increases. The worse outcome for workers, Rosengren and others have said, would be to let markets inflate too much, and crash again, even if that means risking a bit higher unemployment in the interim.
Markets are currently “a little rich,” Rosengren said in recent remarks at Davidson College in North Carolina.
Though not enough to warrant a rate increase, he said, it does argue against a rate reduction. Overall, Fed officials including Chairman Jerome Powell say they feel financial risks are within a manageable range, something policymakers feel has been helped along by the rate increases to date.
The state of financial markets is “something that the Fed has to wrestle with,” Rosengren said. “It’s appropriate for interest rates to be paused right now.”
Corporate bond valuations look frothy: https://fingfx.thomsonreuters.com/gfx/mkt/11/9739/9649/Pasted%20Image.jpg
(Reporting by Howard Schneider and Trevor Hunnicut; Editing by Dan Burns and Andrea Ricci)
FILE PHOTO: JD.com founder Richard Liu attends a Reuters interview in Hong Kong, China June 9, 2017. REUTERS/Bobby Yip/File Photo
April 20, 2019
SHANGHAI (Reuters) – Hundreds of people have added their names to an online petition in support of a University of Minnesota student who said she was raped last August by Richard Liu, the chief executive officer of China’s e-commerce retailer JD.com Inc.
The student, Liu Jingyao, from China, filed a civil lawsuit against JD’s CEO in a Minneapolis court on Tuesday, nearly four months after prosecutors declined to press criminal charges against him.
The law suit identified the student for the first time. The two Lius are not related.
Richard Liu, through his lawyers, maintained his innocence throughout the law enforcement investigation, which ended in December. The company did not immediately respond to an email request for comment.
It was unclear who launched the petition, which carried the hashtag #HereForJingyao, although signatories included Chinese students at foreign universities as well as in China. On Saturday, it was gathering momentum on the social media platform WeChat, with more than 500 names attached.
“To Liu Jingyao: You are not alone. We believe in survivors, we believe in your bravery and honesty, we will always stand with you. We must join hands and march together in the face of the challenge of a culture of blaming the victims of rape,” the petition said.
A Chinese-language translation of the indictment was also circulating online.
Liu Jingyao first accused Richard Liu of rape in August when he was visiting the University of Minnesota to attend a program directed at executives from China.
Liu, 46, who started JD.com as a humble electronics stall and expanded it into an e-commerce company with 2018 net revenues of $67 billion, was arrested on Aug. 31 but released without charge about 17 hours later.
A fledgling #MeToo-style movement in support of women’s rights has been slow to gain wide traction in China, where issues like sexual assault have traditionally been brushed under the carpet.
China’s ruling Communist Party, wary about grassroots organizing, has also in recent months put pressure on activists focused on issues like sexual assault on campuses and workers’ rights.
(Reporting by John Ruwitch and Shu Zhang; Editing by Nick Macfie)
A Huawei logo is pictured during the media day for the Shanghai auto show in Shanghai, China April 16, 2019. REUTERS/Aly Song
April 20, 2019
(Reuters) – U.S. intelligence has accused Huawei Technologies of being funded by Chinese state security, The Times said on Saturday, adding to the list of allegations faced by the Chinese technology company in the West.
The CIA accused Huawei of receiving funding from China’s National Security Commission, the People’s Liberation Army and a third branch of the Chinese state intelligence network, the British newspaper reported, citing a source.
Earlier this year, U.S. intelligence shared its claims with other members of the Five Eyes intelligence-sharing group, which includes Britain, Australia, Canada and New Zealand, according to the report http://bit.ly/2KT7ztd.
Huawei dismissed the allegations in a statement cited by the newspaper.
“Huawei does not comment on unsubstantiated allegations backed up by zero evidence from anonymous sources,” a Huawei representative told The Times.
The company, the CIA and Chinese state security agencies did not respond immediately to requests for comment.
The accusation comes at a time of trade tensions between Washington and Beijing and amid concerns in the United States that Huawei’s equipment could be used for espionage. The company has said the concerns are unfounded.
Authorities in the United States are probing Huawei for alleged sanctions violations.
Meng Wanzhou, Huawei’s chief financial officer and daughter of its founder, Ren Zhengfei, was arrested in Canada in December at the request of the United States on charges of bank and wire fraud in violation of U.S. sanctions against Iran.
She denies wrongdoing and her father has previously said the arrest was “politically motivated”.
Amid such charges, top educational institutions in the West have recently severed ties with Huawei to avoid losing federal funding.
Another Chinese technology company, ZTE Corp, has also been at the center of similar controversies in the United States.
U.S. sanctions forced ZTE to stop most business between April and July last year after Commerce Department officials said it broke a pact and was caught illegally shipping U.S.-origin goods to Iran and North Korea. The sanctions were lifted after ZTE paid $1.4 billion in penalties.
Reuters reported earlier this week that the United States will push its allies at a meeting in Prague next month to adopt shared security and policy measures that will make it more difficult for Huawei to dominate 5G telecommunications networks.
(Reporting by Kanishka Singh in Bengaluru; Editing by Nick Macfie)
FILE PHOTO: A Tesla logo is seen in Los Angeles, California U.S. January 12, 2018. REUTERS/Lucy Nicholson/File Photo
April 19, 2019
(Reuters) – Tesla Inc said on Friday that four members of its eleven-member board would be leaving over the next two years, as the electric car company looks to streamline its board.
Brad Buss, Antonio Gracias, Stephen Jurvetson, and Linda Johnson Rice will not be standing for re-election in the upcoming annual meetings of stockholders in 2019 and 2020, the company said https://www.sec.gov/Archives/edgar/data/1318605/000156459019012123/tsla-8k_20190418.htm in a regulatory filing.
The company said its directors reviewed the composition of the board “focusing on a phased streamlining of the size of the Board to allow it to operate more nimbly and efficiently.”
Tesla said the decision did not result from any disagreement between the company and the directors.
Of the four members who would exit the board, Buss and Gracias were part of Tesla’s disclosure controls committee, overseeing the implementation of the terms of the consent agreement between Tesla and the SEC.
Buss was also the chief financial officer of solar panel installer SolarCity for two years before retiring in 2016. Tesla bought SolarCity that year.
Gracias has been an independent director at Tesla since 2010. Last May, proxy adviser ISS recommended that investors vote against his election to the board and called him a non-independent director.
Jurvetson, the co-founder of Silicon Valley venture capital firm Draper Fisher Jurvetson, is said to be on a leave of absence from Tesla’s board since allegations of sexual harassment against him arose. Jurvetson has denied the allegations against him. (https://reut.rs/2mn57in)
The proposed changes in the board come a couple of weeks after Elon Musk’s position as the chief executive officer of Tesla was secured after a federal judge urged the billionaire to settle contempt allegations by the U.S. Securities and Exchange Commission over his use of Twitter.
Musk was sued by the SEC last year for tweeting that he had “funding secured” to take the company private. He settled the lawsuit, agreeing to step down as chairman and have the company’s lawyers pre-approve written communications with material information about the company.
But he was again accused of violating that settlement by sending a tweet about Tesla’s production that had not been vetted by the company’s attorneys.
On Thursday, a federal judge ruled that Musk and the SEC would get another week to settle a dispute over Musk’s use of Twitter.
(Reporting by Nivedita Balu in Bengaluru; editing by Diane Craft)