The daily business briefing: August 7, 2019
China says U.S. currency manipulation charge "disregards the facts," Disney reports disappointing earnings, and more
China accuses U.S. of 'unreasonably' labeling it a currency manipulator
China on Tuesday said the United States "disregards the facts" and has acted "unreasonably" in labeling it a currency manipulator. The U.S. made the declaration on Monday after China's central bank devalued its currency to its weakest level in a decade, with the Treasury Department in a statement saying that "the purpose of China's currency devaluation is to gain an unfair competitive advantage in international trade." The People's Bank of China on Tuesday responded by saying that "the Chinese side firmly opposes this" and that "this will not only seriously undermine the international financial order, but also trigger financial market turmoil." Stock futures mostly rebounded Tuesday after the markets on Monday experienced their biggest percentage drops of 2019.
Disney reports disappointing earnings but announces streaming bundle
Disney on Tuesday reported quarterly earnings that fell short of Wall Street expectations. The entertainment giant reported its earnings were $1.35 per share. Analysts surveyed by Refinitive had estimated $1.75 per share. Revenue came in at $20.25 billion, missing the Refinitiv estimate of $21.47 billion. Disney partly blamed costs from the integration of Fox entertainment assets for the miss. It also showed bigger losses in its streaming business, largely due to investments in Hulu, ESPN+, and Disney+. Disney CEO Bob Iger said in a call with analysts that the company would offer a bundle of Disney+, ESPN+, and an ad-supported Hulu subscription for $12.99 per month, matching Netflix's price for its standard streaming video plan. The company's shares fell by as much as 3.7 percent in after-hours trading.
Walgreens to close 200 stores
Walgreens said in a Securities and Exchange Commission filing released Tuesday that it plans to close roughly 200 U.S. stores as part of a "transformational cost management program." The move comes "following a review of the real estate footprint in the United States," the pharmacy chain said. The company, which has about 9,500 stores in the country, did not immediately say which outlets it would shut down or when the stores would close. Phil Caruso, a Walgreens spokesman, said customers should not experience disruption because the company has several stores in many markets. Walgreens shares have fallen 25 percent this year as it has tried to recover after a bad quarterly earnings report in the first three months of the year.
Apple, Goldman Sachs announce virtual credit card
Apple and Goldman Sachs on Tuesday started offering sign-up invitations for a virtual credit card that will give iPhone users 2 percent cash back on purchases using Apple Pay. The card also comes with no fees, and an app for managing finances associated with it. The offering is part of Apple's push to diversify its business as iPhone sales cool. The card also will help Goldman Sachs, a leading investment bank, boost its new consumer business. Longtime Apple watcher Gene Munster, managing partner with Loup Ventures, said consumers wouldn't rush to adopt the card in its first year, but it could bring in revenue of $1.4 billion by 2023.
Stock futures fluctuate as China appears to steady currency
U.S. stock index futures rose then fell early Wednesday as fears that trade tensions would cause a global economic slowdown continued to rattle markets. Futures gained early after China took steps to steady the yuan, easing fears of a currency war. Later, futures for the Dow Jones Industrial Average and the S&P 500 were both down by about 0.5 percent, while those of the Nasdaq dropped by 0.4 percent. The People's Bank of China on Wednesday set the official yuan midpoint at 6.9996, a hair stronger than the psychologically important 7-per-dollar level. Beijing let the yuan fall below that level for the first time in 11 years on Monday following President Trump's announcement that he planned to impose new tariffs.