The daily business briefing: March 8, 2018
Stocks try to shake off Cohn's departure as Trump's tariff decree looms, Snap announces its biggest layoffs yet, and more
Stocks struggle to recover from ongoing concerns about Cohn's resignation
The Dow Jones Industrial Average fell sharply on Wednesday before regaining some ground and closing down by 0.3 percent as investors fretted over the news that President Trump's top economic adviser, Gary Cohn, is resigning. Cohn was one of the administration's most powerful advocates of free trade, and some analysts said his departure could mean Trump will push ahead with steel and aluminum tariffs that some fear could spark an all-out trade war. "In the eyes of the market, [Cohn] was viewed as the adult in the room on many items," said Gene Tannuzzo, senior portfolio manager at Columbia Threadneedle Investments in Minneapolis. U.S. stock futures were mixed early Thursday as investors waited for President Trump to sign a decree laying out his tariff plans.
Snap announces biggest layoffs yet
Snap Inc. plans to announce within a week that it is cutting about 100 jobs in its engineering department, its largest round of layoffs yet, business news outlet Cheddar reported Wednesday. The job cuts amount to less than 10 percent of Snap's engineering positions. The company, operator of the Snapchat messaging app, laid off about a dozen employees in its hardware and recruiting divisions in 2017, and let go another two dozen people in January. It had about 3,069 employees at the end of last year. Snap also withheld employees' 2017 cash bonuses after it failed to meet company-wide targets, but it gave CEO Evan Spiegel a $637 million stock award for taking the company public.
Trump prepares to sign tariff decree
President Trump plans to move ahead to formally impose tariffs on steel and aluminum imports, the White House said Wednesday. The move, expected on Thursday, could exempt Canada, Mexico, and other countries on "national security" grounds, White House Press Secretary Sarah Huckabee Sanders said. Canada and European countries have strongly urged Trump not to go through with the tariffs, and threatened to retaliate if he does. The tariffs would not take effect immediately. The statute under which Trump has authority to impose them calls for a two-week implementation period that would give affected countries and companies time to lobby for changes to Trump's plan, although Trump has said offering some countries exemptions would create more problems.
Bitcoin dives after SEC says cryptocurrency exchanges must register
Bitcoin plunged by nearly 10 percent on Wednesday, dropping below the psychologically important $10,000 level after the Securities and Exchange Commission said it would require digital asset exchanges to register with the regulatory agency. The SEC statement sparked renewed fears among investors of tightening regulations for cryptocurrencies. "The SEC staff has concerns that many online trading platforms appear to investors as SEC-registered and regulated marketplaces when they are not," the SEC statement said. "Many platforms refer to themselves as 'exchanges,' which can give the misimpression to investors that they are regulated or meet the regulatory standards of a national securities exchange." Bitcoin, the largest cryptocurrency by market capitalization, has now fallen by about 50 percent since it hit all-time highs near $20,000 in December.
Icahn denies prior knowledge of steel tariffs before stock sale
Billionaire investor Carl Icahn, a former unofficial adviser to President Trump, denied knowing about Trump's plan to impose steel tariffs before selling $31 million worth of stock in The Manitowoc Co., a company heavily dependent on steel. According to a regulatory filing, Icahn sold nearly a million shares in Manitowoc from Feb. 12 through Feb. 22. On March 1, Trump announced he would impose tariffs of 25 percent on imported steel and 10 percent on aluminum. Manitowoc's share price has fallen by nearly 7 percent since Trump's announcement. Icahn said in a post on his website Wednesday that he sold the Manitowoc shares "for legitimate investment reasons" unrelated to Trump's announcement, and any suggestion he had prior knowledge of the tariffs "is categorically untrue."