Federal Reserve: Markets rise on rate cut hopes
Facing a renewed round of trade war threats, the Federal Reserve this week “signaled that rates could come down to keep the economy on solid ground,” said Mary Romano in Fortune.com. The central bank is still watching and waiting, but analysts now estimate the chance of a rate cut at more than 90 percent. Prospects of a Fed cut that would stimulate the economy revived markets that had been battered by “worry that President Trump’s trade war with China and Mexico could exacerbate a slowdown in economic growth.”
Real estate: A $19 billion deal for warehouses
In “the biggest private real estate transaction ever,” Blackstone Group agreed this week to pay $18.7 billion for a network of industrial warehouses, said Liz Hoffman in The Wall Street Journal. The buyout of Singapore-based GLP and its 1,300 properties around the U.S. is “a big bet on the continued explosion of e-commerce.” GLP’s largest tenant, Amazon, and other e-commerce companies have turned warehouses into prized investments, particularly around big cities, where they “help solve the ‘last-mile’ puzzle” for storing and shipping deliveries. Blackstone already owns $140 billion in real-estate assets.
Aerospace: New wing problems in troubled Boeing jet
The Federal Aviation Administration concluded this week that more than 300 of Boeing’s 737 jets may have faulty wing parts, said Leslie Josephs and Spencer Kimball in CNBC.com. The affected planes include the Max jets that were involved in two fatal crashes, prompting their grounding. As many as 148 parts from one Boeing supplier don’t meet strength and durability standards. The agency said the faulty parts—called slats—would “not result in the loss of the aircraft,” but could lead to damage during flight. Boeing still expects the 737 Max planes to fly again by the end of the year.
Autos: Tesla sales still far below promises
Tesla’s sales picked up this month, but whether the electric-car maker “can ever achieve sustainable profits remains an open question,” said Russ Mitchell in the Los Angeles Times. While CEO Elon Musk told Wall Street the company would sell 360,000 to 400,000 cars this year, demand “remains far below the level in late 2018.” The release of Tesla’s midrange Model 3 has cannibalized sales of its more expensive models. Tesla’s “plan was to sell so many Model 3s that higher volume would make up for smaller profit margins,” but Model 3 sales are running at less than half the levels Musk hoped for.