Author: scott.hodges

Texas Takes All

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When it comes to being on top in business, Texas takes it all!  According to a CNBC report last week, Texas was ranked America’s 2018 Number 1 state for business!   At Enchanted Rock, a live CNBC broadcast featuring Governor Greg Abbott announced Texas’ rating following a comprehensive study of all 50 states.  64 metrics in 10 categories were used to make the determination.  Abbott’s response to the news was:

“Texas offers a blueprint for business success.  The Texas economy is the fastest growing in the nation, and more Texans are working than ever before. This is not an accident – reforming taxes, removing regulatory barriers, encouraging participation in the sharing economy, investing in our education system, and securing Texans’ freedom to aspire is our formula for success. As Governor, I will work to continue to keep Texas the best state to build a business big or small, and implement a blueprint for a new era of economic expansion.”

Post US Tax Cuts Repercussions

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How does the US economy look half a year after the implementation of the 2017 Tax Cuts and Jobs Act? Mattie Duppler recently took a look at where we are today with this in a review in The Hill.

She commented that:

“Gone is the outdated system that took too much of our money, sent our jobs overseas, and stagnated our economy. Individuals are now seeing thousands of dollars in tax relief and bigger paychecks. Families are benefitting from a doubling of the standard deduction and child tax credit. Lower taxes on businesses of all sizes are stimulating our economy. Americans are feeling the effects of a reinvigorated economy.”

She added support to this with the following numbers:

“More than four million people are receiving bonuses, benefit increases, and higher wages from hundreds of companies, totaling some $4 billion back into the pockets of the working class. Companies like Apple, Comcast, Boeing, and Bank of America have given workers across the country bonuses, in addition to pledging new investments into our national economy. Many more small businesses have done the same in their communities by growing their operations and hiring more people.”

According to an analysis by Willliam Gale, Hilary Gelfond, Aaron Krupkin, Mark J. Mazur and Eric Toder published last month, while the law “reduce[s] federal revenues by significant amounts, even after allowing for the impact on economic growth. It will make the distribution of after-tax income more unequal. If it is not financed with concurrent spending cuts or other tax increases, TCJA will raise federal debt and impose burdens on future generations. If it is financed with spending cuts or other tax increases, TCJA will, under the most plausible scenarios, end up making most households worse off than if it had not been enacted.”

LG Makes First International Robotic Investment in Bossa Nova

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LG Electronics has made its first major international investment in US-based Bossa Nova Robotics. The Korean company invested $3 million in the robot developer as part of their efforts to expand in robotics.

LG has stated its intentions to become more competitive in the robotics industry across the globe, and has made several large investments in South Korean robotics already, in companies including SG Robotics, Robotis, Acryl and Robostar. It’s investment in Bossa Nova Robotics was its first big step into the overseas market. The American company has an impressive track record, with over 50 Walmart supermarket chains relying on their supply.

The Korean tech leader has also showcased several robots, including a sophisticated guide navigation technology at Incheon International Aiport. The company now plans to focus on AI and self-driving technologies.

Small Business See Major Growth in 2018

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American small businesses are thriving, and investors prefer them over larger companies this year. The Russel 2000 index, which includes largely the shares of smaller businesses, is up 7% this year and trading at an almost all-time high. Other indexes, including the Dow and S&P 500, which include major stocks such as Apple, Coca Cola and Boeing, have only increased by 1% or 2%, each approximately 5% below record highs.

The shift is a result of several factors, including some changes within the US economy itself. First, smaller businesses like those in the Russel 2000 are growing profits at a much faster rate than larger corporations, with projections of another 40% increase this year and an additional 23% in 2019. According to Nationwide chief of investment research Mark Hackett, “President Donald Trump’s tax cut and deregulation policies favor smaller companies over large, multinational blue chips.”

Indeed, the companies in the Russell 2000 are supported primarily by the American economy, while global corporations like Coke generate revenue from all over the world.

Small businesses have also paid higher taxes in the past, so recent corporate tax cuts have had a greater impact on them than on their larger counterparts.

Small businesses can also be considered lower risk, as they are influenced less by international market fluxes. US-China trade talks and global growth have little to do with local American businesses.

“A lot of large caps stumbled earlier this year and there has been volatility. People are looking to small caps. There are just more opportunities,” said Dave Harden, president and CIO at Summit Global Investments.

Analysts believe smaller businesses will continue to grow in the U.S. in the coming years, carving a new, permanent space in the stock market.

Nestle Teams Up with Starbucks to Boost International Standing

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Switzerland-based company Nestle has recently signed a treaty with one of its biggest competitors: Starbucks Corp. Nestle will be paying $7.15 billion in cash for the Starbucks business, which has annual sales of up to $2 billion, and plans to market the chain’s consumer and food-service products internationally. The arrangement does not include Ready-to-Drink drinks or the sales of products within Starbucks coffee shops.

The move comes as part of Nestle’s recent mission to attract higher-end coffee enthusiasts. Mark Schneider, Nestle CEO, said: “With Starbucks, Nescafe and Nespresso, we bring together three iconic brands in the world of coffee.”

Several hundred Starbucks employees will join the Nestle team, and will continue to operate in Seattle, Washington, once the agreement closes by the end of this year.

According to Bloomberg, “Nestle has been bolstering its presence in the U.S., and last year added niche brands Blue Bottle Coffee and Chameleon Cold-Brew to expand its portfolio. Nespresso has introduced a machine that’s more attuned to American’s preference for bigger cups of joe three years ago.”

 

Avengers: Infinity War Breaks Global Opening Weekend Record

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The new release Avengers: Infinity Wars shot past the latest Star Wars movie, setting a new record for the highest opening weekend of all time with earnings of $250 million. It also set a new global opening record at $630 million prior to its launch in China, the second-largest movie market in the world.

Star Wars: The Force Awakens earned a close $248 million on opening weekend. Both films belong to Disney, which has seen massive success in recent years and currently owns nine out of the top ten opening weekends of all time, six of which were Marvel, including the ground-breaking Black Panther.

Disney’s head of distribution Dave Hollis said: “To have now the biggest movie of domestic history as one of the Marvel cinematic universe films seems like a fitting tribute to the Marvel Studios team which has had just an astounding, unmatched run in the last decade.”

Indeed, Marvel has released 18 movies in the last 10 years, making around $15 billion in the box office. Its newest Infinity War was an enormous enterprise, running 2 hours and 40 minutes long and shot over 18 months along with its sequel, which is due for release next summer. Response for the first installment has been extremely positive, earning an A CinemaScore from its audience and a 84% fresh rating on Rotten Tomatoes.

Greg Fpster of IMAX Corp explained that Marvel’s success comes from its originality. “This isn’t something that their parents saw. This isn’t an old franchise that their parents saw when they were 20,” he said. “This is their. The Marvel universe is the group of characters that this generation owns.”