The daily business briefing: September 18, 2019
FedEx shares fall as trade tensions hurt profits, UAW and GM make progress in talks to end strike, and more
FedEx shares fall after trade tensions dent profits
FedEx shares plunged by 8 percent in after-hours trading on Tuesday after the shipping and logistics company reported quarterly profits that fell short of expectations and lowered its projections for the full year partly due to "increasing trade tensions." "Our performance continues to be negatively impacted by a weakening global macro environment driven by increasing trade tensions and policy uncertainty," Chief Executive Frederick W. Smith said in a statement. FedEx reported adjusted earnings of $3.05 per share, down from $3.46 per share in the same quarter last year. Analysts had expected adjusted earnings of $3.15 per share.
UAW, GM make progress but fall short of deal to end strike
The United Auto Workers and General Motors made some progress in their contract talks on Tuesday, although the union's more than 49,000 GM workers remained on strike through a second day. "They are talking, they've made progress, we'll see how long it takes," said Brian Rothenberg, spokesman for the UAW. The walkout shut down operations at more than 50 GM factories and parts warehouses. The UAW is demanding better pay and health benefits, as well as increased job security. President Trump said Monday that "Federal mediation is always possible," and Politico reported Tuesday that the White House was trying to broker a deal to end the strike. The White House denied it was involved, although Deputy Press Secretary Judd Deere said Trump "would like to see a fair and speedy conclusion to these talks."
NBCUniversal reveals details on new streaming service
NBCUniversal on Tuesday announced new details of its upcoming streaming service, including what it's called: Peacock, a reference to the NBC logo. Peacock, launching in April 2020 is set to feature more than 15,000 hours of programming, including reboots of Battlestar Galactica, Punky Brewster, and Saved by the Bell. The service will also feature content outside of the NBC network, including movies from Universal Pictures and DreamWorks Animation. Peacock will also be the exclusive streaming home of The Office, which is set to leave Netflix, where it has been among the streamer's most popular offerings. This announcement comes a few weeks before Apple launches its new streaming service, Apple TV+, which will shortly be followed by Disney's service, Disney+.
EPA to revoke California auto emissions authority
The Trump administration on Wednesday is expected to revoke California's authority to impose tailpipe emissions rules that are tougher than federal ones. The announcement reportedly will come as President Trump travels in the state and attends fundraisers. The move will serve as a slap in the face to California's liberal leaders, who often spar with Trump, and at the same time continue his effort to roll back environmental regulations dating to the Obama administration. Xavier Becerra, California's attorney general, said the state would file a lawsuit to challenge Trump. "While the White House clings to the past, automakers and American families embrace cleaner cars," he wrote in an email, according to The New York Times.
Stock futures edge higher ahead of Fed decision
U.S. stock index futures inched down early Wednesday, pointing to a slightly lower open as investors awaited a decision from the Federal Reserve on interest rates later in the day. Futures for the Dow Jones Industrial Average, the S&P 500, and the Nasdaq were all down by 0.1 percent or slightly more. The Dow gained 0.1 percent on Tuesday, while the S&P 500 and the Nasdaq rose by 0.3 percent and 0.4 percent, respectively. The Fed is expected to cut rates by 25 basis points. The modest rate cut is still expected despite a surge in oil prices following a weekend attack that disrupted Saudi Arabia's production, posing a new threat to the global economy. The Fed made a similar cut in July — its first in more than a decade — and indicated it would take further action if necessary to maintain the U.S. economic expansion.