The daily business briefing: April 1, 2019

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Harold Maass
Johnson & Johnson products
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1.

China manufacturing data improves for 1st time in 4 months

China's statistics bureau and an industry group said Sunday that a gauge of Chinese manufacturing improved in March for the first time in four months. The data suggested that Beijing's efforts to reverse an economic slowdown, worsened by a trade war with the U.S., might be paying off. "The confidence of enterprises, production, and operation activities are showing a recovery trend," said the statistics bureau and the China Federation of Logistics & Purchasing in a statement. China's monthly purchasing managers' index rose to 50.5 on a 100-point scale, up 1.3 points from February. Anything above 50 indicates increasing factory activity. Chinese manufacturing dropped last year as the trade war cut into exports. The government tried to boost the economy by increasing spending and loosening lending controls. [The Associated Press, Reuters]

2.

Johnson & Johnson rejects India quality test findings

Drug regulators in India's Rajasthan state have ordered two batches of Johnson & Johnson's "No More Tears" to be withdrawn after samples failed quality tests. The Rajasthan Drugs Control Organization said the samples contained "harmful ingredients." A J&J spokesperson said the regulators reported that the shampoo contained formaldehyde, a known carcinogen, but the company rejected the report. "We do not accept the interim results given to us, which mentioned samples to 'contain harmful ingredients — identification positive for formaldehyde,'" the spokesperson told Reuters. Indian authorities in recent months started an investigation into J&J Baby Powder to determine whether it contains asbestos. [The Times of India, Reuters]

3.

Report: Kellogg near deal to sell Keebler, Famous Amos

Kellogg is close to a deal to sell its Keebler, Famous Amos, and fruit snacks businesses to Nutella-owner Ferrero, CNBC reported Sunday, citing people familiar with the discussions. The deal is expected to be worth $1 billion to $1.5 billion. An announcement is expected as soon as Monday. Ferrero reportedly beat out lead contender Hostess Brands, owner of Twinkies and Ho-Hos, for the Kellogg cookie assets. The deal would be the latest of several acquisitions for Ferrero, which was founded in Italy more than 70 years ago. It entered the U.S. in 1969 with Tic Tac mints, and has expanded its presence in the last two years with the purchases of the Ferrara Candy Company and Nestle's U.S. candy business. [CNBC]

4.

AMI says Bezos affair report source was girlfriend's brother

American Media Inc., the publisher of the National Enquirer, said in a statement on Sunday that it based reports on Amazon Chief Executive Jeff Bezos' relationship with his girlfriend, Lauren Sanchez, on information from a single source: Sanchez's brother, Michael Sanchez. The statement followed an article in The Daily Beast by Bezos security chief Gavin de Becker that said Saudi Arabia's government had obtained private information from Bezos' phone. AMI said it was Michael Sanchez "who tipped the National Enquirer off to the affair on Sept. 10, 2018." The company said he "provided all of the materials for our investigation" over four months. "There was no involvement by any third party whatsoever," it added. [Reuters]

5.

U.S. stock futures rise on China manufacturing, trade optimism

U.S. stock index futures rose early Monday as strong manufacturing data from China boosted markets around the world. Futures for the Dow Jones Industrial Average and the S&P 500 gained nearly 0.7 percent, and those of the Nasdaq jumped by 0.9 percent. As the China data eased fears of a global slowdown, negotiators from the U.S. and China prepared to meet in Washington this week to resume talks on ending the trade war between the world's two biggest economies. China last week reportedly made proposals on key issues, including forced technology transfers, that went beyond previous offers, suggesting progress. [CNBC]