GDP for second quarter is back on track! CNBC reports:
Category: U.S. Economy
Q1 Growth Predictions Waver
The U.S. economy is growing slightly slowly than previously projected, with first quarter GDP revised from 2.3% to 2.3% expected growth.
CNN reports:
Small Business See Major Growth in 2018
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.
Businesses Against New Import Taxes
Business groups throughout the U.S. are speaking out against the Trump Administration’s plan to increase taxes on imports from China. Bloomberg reports:
Avengers: Infinity War Breaks Global Opening Weekend Record
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.”
Hasbro Picking Up After Toys R Us Announcement
Hasbro Inc., a leading toymaker, took a hit last quarter when Toys R Us US declared bankruptcy and liquidated its operations, only to rebound when CEO Brian Goldner reassured shareholders that demand would increase elsewhere as a result. Bloomberg reports:
Think Differently Apple!
In January of 2018, JANA Partners LLC and the California State Teachers’ Retirement System, which collectively own about $2 billion in value of shares of Apple Inc., wrote an open letter to the technology giant. As they wrote, “As shareholders, we recognize your unique role in the history of innovation and the fact that Apple is one of the most valuable brand names in the world.” In the letter, they urge Apple “to offer parents more choices and tools to help them ensure that young consumers are using your products in an optimal manner. “
They cited the growing body of evidence that shows the consequences of technology for children. Such research includes:
* “67% of the over 2,300 teachers surveyed observed that the number of students who are negatively distracted by digital technologies in the classroom is growing and 75% say students’ ability to focus on educational tasks has decreased.”
* “8th graders who are heavy users of social media have a 27% higher risk of depression.”
* “A study by UCLA researchers showed that after 5 days at a device-free outdoor camp, children performed far better on tests for empathy than a control group.”
JANA Partners and the California State Teachers’ Retirement System, in the letter in the site called Think Differently About Kids, offered a number of suggestions for Apple. Apple issued a statement saying, “We think deeply about how our products are used and the impact they have on users and the people around them. We take this responsibility very seriously and we are committed to meeting and exceeding our customers’ expectations, especially when it comes to protecting kids.”
Fendi Announces New Chairman and Chief Executive
Fendi has just named a new chairman and chief executive, Serge Brunschwig. This is part of an internal reshuffle as he replaces Pietro Beccari, who will now be the Chairman and CEO of LVMH’s Christian Dior Couture arm.
Netflix Hits the $100 Billion Mark
Netflix has hit the $100 billion mark for the first time. Shares jumped 9% to over $248 in after-hour trading on Monday. The company now sits with their program in more than 50% of all US broadband houses and has spread out to 190 countries.They ended the year with 1.98 million additional subscribers in the US and 117.58 million streaming subscribers around the world.
They actually plan to spend as much as $8 billion this year on TV shows and movies to compete with Disney, Amazon.com, Hulu and others.
Read more about them and their steady growth.
Good News for Consumer Spending
Good news for the consumer goods industry. Mastercard Inc has reported that shoppers spent over $800 billion during the season. Their report cites sales in stores and online between November 1 and December 24 as having risen 4.9%. This is the fastest year-on-year pace of increase since 2011.
This is certainly good news since most U.S. retailers have found that their sales are tumbling due to online stores like Amazon. Read all the details to learn more.