Southern Business Review

Category: Economy and Policy

Economic trends, analysis, and policy discussions that impact businesses and industries in the Southern United States. This section may provide in-depth articles and reports on topics such as regional economic growth, business regulations, tax policies, and the influence of state and federal legislation on local markets. It could also cover issues like labor markets, trade policies, infrastructure developments, and government initiatives designed to stimulate economic activity in the South. Additionally, this section might feature expert opinions, interviews with policymakers, and case studies of how businesses are adapting to changing economic conditions. The goal is to provide valuable insights for business leaders, investors, and policymakers seeking to understand and navigate the economic and policy landscape in the region.

  • US STOCKS-Wall St dips after disappointing forecasts from video game companies

    (Reuters) – U.S. stocks dipped on Wednesday as disappointing forecasts from videogame makers pulled the communications sector lower, but a boost from technology companies kept the indexes near two-month highs.

    FEBRUARY 5, 2019 – WASHINGTON, DC: President Donald Trump delivered the State of the Union address, with Vice President Mike Pence and Speaker of the House Nancy Pelosi, at the Capitol in Washington, DC on February 5, 2019. Doug Mills/Pool via REUTERS

    Electronic Arts Inc slid 14.4 percent after cutting its yearly revenue outlook, while Take-Two Interactive Software Inc fell 12.8 percent after its revenue forecast disappointed investors.

    Activision Blizzard Inc also fell 8.7 percent.

    Leading the gains on the technology sector was Skyworks Solutions Inc, up 14.2 percent after the analog semiconductor maker announced a $2 billion buyback. The gains also pushed the Philadelphia chip index up 3.11 percent.

    “Investors are focusing on earnings and the next big thing, that is trade,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

    “There is no enthusiasm following last night’s State of the Union message and the reason for that is investors are worried about political fighting and that is concerning.”

    On Tuesday, the President outlined his political priorities for the year and reiterated his vow to build a wall along the U.S.-Mexico border. His reference to the Feb. 15 deadline for a budget deal also reminded investors that a second shutdown was not fully off the table.

    U.S. Treasury Secretary Steven Mnuchin told CNBC there was progress in U.S.-China trade talks, but a lot of work still needed to be done ahead of another round of meetings next week to push for a deal before the March 2 deadline.

    Optimism on a possible U.S.-China trade truce and the Federal Reserve’s signal of ending its monetary policy tightening has now put the S&P 500 about 7 percent away from its record closing high in September.

    Earnings have also been contributing to market optimism. About 71 percent of more than half of the S&P 500 companies that have reported earnings have topped profit expectations, according to IBES data from Refinitiv.

    At 9:56 a.m. ET the Dow Jones Industrial Average was down 37.22 points, or 0.15 percent, at 25,374.30, the S&P 500 was down 2.80 points, or 0.10 percent, at 2,734.90 and the Nasdaq Composite was down 2.07 points, or 0.03 percent, at 7,400.02.

    The communication services sector fell 0.62 percent, the most among the 10 major S&P sectors trading lower.

    Capri Holdings Ltd, formerly Michael Kors, jumped 11.5 percent after posting better-than-expected holiday-quarter profit and raising its full-year revenue forecast.

    Also on deck is Fed Chairman Jerome Powell’s address at 7:00 p.m. ET (0000 GMT) in Virginia.

    Declining issues outnumbered advancers for a 1.37-to-1 ratio on the NYSE. Advancing issues outnumbered decliners for a 1.06-to-1 ratio on the Nasdaq.

    The S&P index recorded five new 52-week highs and two new lows, while the Nasdaq recorded 17 new highs and eight new lows.

    Reporting by Medha Singh in Bengaluru; Additional reporting by Amy Caren Daniel; Editing by Shounak Dasgupta

  • CANADA STOCKS-TSX falls on drop in oil prices, BoC's trade warning

    Feb 6 (Reuters) – Canada’s main stock index dropped on Wednesday, after a fall in oil prices dragged the energy sector lower and Bank of Canada’s comment that U.S. trade policies were holding back Canadian investments weighed on the market sentiment.

    * At 9:40 a.m. ET (1440 GMT), the Toronto Stock Exchange’s S&P/TSX Composite index was down 12.44 points, or 0.08 percent, at 15,690.25.

    * Four of the index’s 11 major sectors were down, with the energy sector fell the most at 1.4 percent.

    * Oil prices declined after a report showed a rise in U.S. crude inventories, countering expectations of a tightening market in 2019 due to OPEC-led supply cuts and the U.S. sanctions on Venezuela.

    * U.S. crude prices fell 0.6 percent, while Brent crude lost 0.6 percent.

    * A deputy governor of the Bank of Canada said despite strong economic fundamentals, uncertainty over the U.S. trade policies are temporarily slowing growth.

    * Lower oil prices and a softening housing market are also factors hindering growth in the country, in contrast to the U.S. economy, which is powering ahead on the effects of stimulus.

    * The Canadian dollar will extend this year’s rally over the coming 12 months, according to a Reuters poll, as the U.S. dollar is expected to broadly fall, while global monetary policy to stay looser than previously expected.

    * The financials sector gained 0.3 percent.

    * On the TSX, 100 issues were higher, while 125 issues declined for a 1.25-to-1 ratio to the downside, with traded volume touching 16.72 million shares.

    * The largest percentage gainer on the TSX were ATS Automation Tooling Systems Inc, which surged 12 percent after the company’s quarterly results topped expectations.

    * Aphria Inc fell 5.9 percent, the most on the TSX, after rejecting a hostile takeover bid from U.S. cannabis retailer Green Growth Brands Inc, saying the offer significantly undervalued the company.

    * The second biggest decliner was fellow cannabis firm, Canopy Growth Co, down 3.5 percent.

    * The most heavily traded shares by volume were Aurora Cannabis, Aphria and Bombardier.

    * The TSX posted 12 new 52-week highs and one new low.

    * Across all Canadian issues, there were 23 new 52-week highs and three new lows, with total volume touching 26.81 million shares. (Reporting by Shreyashi Sanyal in Bengaluru; Editing by James Emmanuel)

  • Humana says overhaul of drug rebate rule could raise premiums

    Feb 6 (Reuters) – Health insurer Humana Inc said on Wednesday the U.S. government’s proposal to overhaul the drug rebate rule could raise premiums for the “broader population”.

    The U.S. government last week proposed a rule to end a decades-old system of after-market discounts called rebates that pharmacy benefit managers receive from drugmakers.

    “(The) issue is more around the impact on the customer, the broad customer who is going to see a premium increase and a meaningful one,” Chief Financial Officer Brian Kane said on a post-earnings call.

    Chief Executive Officer Bruce Broussard said the proposed rule could raise the cost of drugs through insurance. (Reporting by Aakash Jagadeesh Babu in Bengaluru; Editing by Maju Samuel)

  • DXB Entertainments says Six flags Dubai put on hold over finance

    DUBAI, Feb 6 (Reuters) – DXB Entertainments PJSC said on Wednesday that the Six Flags theme park project in Dubai cannot proceed as a syndicated finance facility is no longer available.

    DXB Entertainment said the decision came after its board mandated a strategic review of its future development plans and capital deployment.

    “In the intervening period, actions, including formal notification by Six Flags, resulted in funders’ concerns being raised specifically in relation to the revised projections for the Six Flags Dubai Project,” the firm said in a statement. (Reporting by Asma Alsharif Editing by Alexander Smith)

  • Broadcaster CME to wait before deciding on dividends or buyback

    PRAGUE, Feb 6 (Reuters) – Broadcaster Central Europe Media Enterprises (CME) expects it will have more clarity toward the end of 2019 on chances of its capital allocation alternatives beyond deleveraging, its co-chief executive said on Wednesday.

    CME has seen profits rise, prompting analyst questions of whether it could begin paying dividends or launching a share buyback after years of trying to pay down a debt pile that had reached over $1 billion.

    “We would be better served if we see how the year goes on,” co-CEO Michael Del Nin told an earnings call. “When we are closer to year-end, I think with more information at hand we will be able to come out with something a little bit more definitive (on plans).” (Reporting by Jason Hovet, editing by Louise Heavens)

  • Pfizer CEO Bourla plans to testify at Senate drug pricing hearing

    NEW YORK (Reuters) – U.S. drugmaker Pfizer Inc said on Wednesday that its Chief Executive Albert Bourla plans to testify later this month at a Senate hearing examining rising prescription drug prices.

    Republican Senator Chuck Grassley, chairman of the Senate Finance Committee, and Democratic Senator Ron Wyden, ranking member of the committee on Monday invited executives from seven pharmaceutical companies to testify at the hearing.

    Merck & Co Inc said on Tuesday that its CEO Ken Frazier plans to testify. The other companies invited to send executives are AbbVie Inc, AstraZeneca Plc , Bristol-Myers Squibb Co, Johnson & Johnson and Sanofi SA.

    Reporting by Michael Erman; Editing by Chizu Nomiyama

  • CANADA STOCKS-TSX drops at open on lower oil prices, BoC comment

    Feb 6 (Reuters) – Canada’s main stock index dropped at open on Wednesday, after a slide in oil prices hurt the energy sector and Bank of Canada’s comment that U.S. trade policies were holding back Canadian investments weighed on the sentiment.

    * At 9:30 a.m. ET (1430 GMT), the Toronto Stock Exchange’s S&P/TSX Composite index was down 23.72 points, or 0.15 percent, at 15,678.97. (Reporting by Shreyashi Sanyal in Bengaluru; Editing by Arun Koyyur)

  • EMERGING MARKETS-Latam FX weaken, Brazil stocks down more than 2 pct

     Feb 6 (Reuters) - Latin American currencies weakened against
    a firmer U.S. dollar on Tuesday, weighed by Brazil's real as it
    awaited a central bank decision on interest rates, while the
    country's stock market tumbled amid a drop in shares of lenders. The real declined 1.1 percent and was on course for
    its worst day in two weeks. Brazil's central bank is expected to
    stand pat on interest rates at 6.50 percent and hold off on
    hiking the benchmark borrowing rate for the rest of the year, a
    Reuters poll showed. The decision is expected later in the day, with analysts
    saying the focus may slowly be shifting to whether the bank's
    next policy move could be a rate cut. "We think such speculation (rate cut) is way premature,"
    analysts at Commerzbank said in a note, pointing to the fact
    that a much-anticipated pension reform was yet to be passed. "The central bank had always stressed that fiscal policy
    reforms were necessary to keep inflation in check. Against this
    backdrop, the central bank should stay cautious and not fuel
    rate cut speculation further." Over the year, however, a separate Reuters poll showed that
    the Brazilian real will advance on hopes President Jair
    Bolsonaro will deliver on his economic reform agenda, although
    investors' optimism may already largely be priced in. The Bovepsa stock index slumped more than 2 percent,
    with all sectors in the red. Top lenders were the biggest drags
    on the finance-heavy index. Meanwhile, Mexico's peso fell after gains in the
    previous session when President Andres Manuel Lopez Obrador said
    his government would take extraordinary measures to support
    debt-laden state oil company Pemex after it was recently
    downgraded by Fitch rating agency. Mexico's central bank is to meet on Thursday to decide on
    interest rates, with expectations that it would hold the key
    rate at 8.25 percent. "We think that the board will leave the door open to further
    hikes if the inflation scenario were to worsen," Credit Suisse
    analysts said in a note. "It will likely acknowledge a clear
    worsening in the growth outlook in early 2019 partly due to the
    gasoline shortages in several areas of the country last year." "We are inclined to think that the bank will likely maintain
    the same policy guidance as in previous statements." The Chilean peso broke a six-day wining streak and
    was down 0.3 percent, while oil exporter Colombia's peso
    slipped, in line with a decline in oil prices. Key Latin American stock indexes and currencies at 1415 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1050.11 -0.17 MSCI LatAm 2906.61 -1.76 Brazil Bovespa 96371.66 -1.97 Mexico IPC - - Chile IPSA 5447.97 -0.34 Argentina MerVal - - Colombia IGBC - - Currencies Latest Daily % change Brazil real 3.7079 -1.14 Mexico peso 19.1475 -0.62 Chile peso 653.2 -0.34 Colombia peso 3109.88 -0.09 Peru sol - - Argentina peso - - (interbank) (Reporting by Susan Mathew in Bengaluru; Editing by Bernadette
    Baum)

  • US STOCKS SNAPSHOT-Wall Street dips at open after Trump's speech

    FEBRUARY 5, 2019 – WASHINGTON, DC: President Donald Trump delivered the State of the Union address, with Vice President Mike Pence and Speaker of the House Nancy Pelosi, at the Capitol in Washington, DC on February 5, 2019. Doug Mills/Pool via REUTERS

    (Reuters) – U.S. stocks opened slightly lower on Wednesday as investors evaluated developments around U.S.-China trade talks and President Donald Trump’s State of the Union address, which offered no specific economic policy initiatives.

    The Dow Jones Industrial Average fell 39.95 points, or 0.16 percent, at the open to 25,371.57.

    The S&P 500 opened lower by 2.65 points, or 0.10 percent, at 2,735.05. The Nasdaq Composite dropped 1.64 points, or 0.02 percent, to 7,400.44 at the opening bell.

    Reporting by Medha Singh in Bengaluru; Editing by Arun Koyyur

  • US STOCKS-Wall Street set for flat open following Trump's key speech

    (For a live blog on the U.S. stock market, click or type LIVE/ in a news window)

    * Electronic Arts, Take-Two tumble after results

    * Capri Holdings jumps on profit beat, forecast raise

    * Snap soars after better-than-expected user metrics

    * Futures up: Dow 0.07 pct, S&P 0.05 pct, Nasdaq 0.24 pct (Adds comment, adds details, updates prices)

    By Medha Singh

    Feb 6 (Reuters) – Wall Street was set to open flat on Wednesday as investors evaluated developments around U.S.-China trade talks ahead of the March deadline and President Donald Trump’s State of the Union address which offered no specific economic policy initiatives.

    At the State of the Union address on Tuesday, the President outlined his political priorities for the year and reiterated his vow to build a wall along the U.S.-Mexico border. His reference to the Feb. 15 deadline for a budget deal also reminded investors that a second shutdown was not fully off the table.

    “There is no enthusiasm following last night’s State of the Union message and the reason for that is investors are worried about political fighting and that is concerning,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

    “Investors are focusing on earnings and the next big thing, that is trade. Before the March deadline, there will be some positive news on trade, whether its a trade deal, a partial trade deal or an extension of trade talks.”

    U.S. Treasury Secretary Steven Mnuchin told CNBC there was progress in U.S.-China trade talks, but a lot of work still needed to be done ahead of another round of meetings next week between the world’s largest economies to push for a deal before the March 2 deadline.

    The strong rally in stocks has been supported by optimism regarding a possible U.S.-China trade truce, the Federal Reserve’s signal of ending its monetary policy tightening and a largely positive earnings season.

    About 71 percent of more than half of the S&P 500 companies that have reported earnings have topped profit expectations, according to IBES data from Refinitiv.

    The benchmark S&P 500, which has notched five straight days of gains, now stands about 7 percent away from its record closing high in September, after having fallen about 20 percent from that level last year.

    At 8:53 a.m. ET, S&P 500 e-minis were up 0.05 percent. Dow e-minis were up 0.07 percent and Nasdaq 100 e-minis were up 0.24 percent.

    Videogame makers were among the biggest losers with Electronic Arts Inc sliding 15.2 percent in premarket trading after cutting its yearly revenue outlook, while Take-Two Interactive Software Inc slumped 9.0 percent after its forecasts for fourth-quarter and full-year adjusted revenue disappointed investors.

    Activision Blizzard Inc also fell 5.9 percent.

    Capri Holdings Ltd, formerly Michael Kors, jumped 9.5 percent on posting better-than-expected holiday-quarter profit and on raising its full-year revenue forecast.

    Walt Disney Co rose 1.2 percent after the company topped Wall Street estimates helped by its booming theme park business and growth at its ABC broadcast network.

    Snap Inc jumped 21.9 percent after the company said the number of people using its Snapchat app would remain at current levels this quarter, easing worries it would continue to lose users to rival Facebook Inc’s Instagram.

    Latest data showed November U.S. trade deficit dropped 11.5 percent to $49.3 billion amid declines in imports of cellphones and petroleum products.

    Also on deck is Fed Chairman Jerome Powell’s address at 7:00 p.m. ET (0000 GMT) in Virginia. (Reporting by Medha Singh in Bengaluru; Additional reporting by Amy Caren Daniel; Editing by Shounak Dasgupta)