Wednesday, March 1, 2017

Wednesday, March 1, Morning Global Market Roundup: Fed Trumps Trump As Dollar, U.S. Treasury Yields Soar

By Jemima Kelly
March 1, 2017

The dollar and U.S. Treasury yields jumped on Wednesday, while stocks were mixed, as investors focused less on U.S. President Donald Trump's first speech to Congress and more on what they see as a growing chance of a U.S. interest rate hike this month.

Trump took a measured tone in his keenly awaited speech on Tuesday, saying he was open to immigration reform, but failing again to provide much detail on his plans for tax reform and infrastructure spending.

For markets, the speech was overshadowed by comments from a handful of Federal Reserve policymakers, who suggested rate-setters are worried about waiting too long to raise interest rates in the face of pending economic stimulus from Washington.

New York Fed President William Dudley -- one of the most influential U.S. central bankers, and usually considered a dove -- said the case for tightening monetary policy had become "a lot more compelling", while San Francisco Fed President John Williams said he saw "no need to delay" raising rates.

Having priced in only around a 30 percent chance that the Fed would move this month before the Fed comments, investors moved to price in around a 68 percent probability of a March hike, according to Reuters data. By June, an 84 percent chance of at least one hike has now been priced in.

The dollar index, which measures the greenback against a basket of other major currencies, climbed as much as 0.7 percent to its highest levels in seven weeks .DXY, having also been helped by data showing robust U.S. consumer spending.

Two-year U.S. Treasury yields US2YT=RR jumped to 1.304 percent, the highest since December, to match their highest levels since 2009. The gap between them and their German equivalents DE2YT=TWEB increased to its widest since 2000.

"After dominating the markets since November, President Trump could now fade into the background as the focus shifts to the Fed and the prospect of rate increases," said Kathleen Brooks, Research Director at City Index in London.

"Fed members don't just let words slip out when they speak to the press - this was a message for the markets, and the markets have duly reacted."

Short On Detail

European shares gained, with basic resources the top-performers on Trump's promise of $1 trillion of infrastructure spending.

The pan-European STOXX 600 index rose 1 percent, with Germany's DAX .GDAXI and France's CAC 40 .FCHI outperforming peers to climb 1.3 percent and 1.4 percent respectively, helped by strong company earnings reports.

The global MSCI ACWI index .MIWD00000PUS, which has risen more than 10 percent since Trump's election in November, was flat, with gains in Europe offsetting earlier falls on Asian and U.S. bourses. The MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS dipped 0.2 percent.

Trump pledged to overhaul the immigration system, improve jobs and wages for Americans and deliver "massive" tax relief to the middle class and tax cuts for companies, but offered few clues on how they would be achieved.

"The market has been looking for reassurance that Trump intends to follow through on his campaign promises for fiscal spending, tax cuts and deregulation," said James Woods, global investment analyst at Rivkin in Sydney.

"He mentioned these policies but did not provide any actual details or time lines, which is what investors are looking for."

U.S. stock futures still pointed to a higher open after Trump's address. E-mini S&P futures ES1 rose 0.5 percent, after the Dow Jones Industrial Average .DJI snapped a 12-day winning streak to close down 0.1 percent in the prior session.

A raft of surveys pointing to stronger factory activity in China, Japan and other parts of Asia were largely overshadowed by Trump's speech. [L3N1GE2BU]

In commodity markets, crude oil prices lost more ground, with rising U.S. oil output adding pressure on the market, although OPEC production cuts continued to offer support. [O/R]

The stronger dollar weighed on gold XAU=, which dropped 0.3 percent to 1,244.36 an ounce, extending Tuesday's decline.

Article Link To Reuters:

U.S. Military Marches Forward On Green Energy, Despite Trump

By Timothy Gardner 
March 1, 2017

President Donald Trump and his top advisors have often scoffed at government support of green energy. His chief strategist called it “madness.”

But the largest U.S. government agency - the Department of Defense - plans to forge ahead under the new administration with a decade-long effort to convert its fuel-hungry operations to renewable power, senior military officials told Reuters.

The reasons have nothing to do with the white-hot debate over climate change. In combat zones, green energy saves lives by, for instance, reducing the need for easily attacked convoys to deliver diesel fuel to generators at U.S. bases. Mobile solar-power units allow soldiers to prowl silently through enemy territory.

At sea, gas-electric hybrid battleships save fuel and allow for fewer stops – making them less vulnerable to attacks like the bombing of the USS Cole in 2000, when al-Qaeda militants killed 17 U.S. soldiers during a refueling stop in Yemen.

The military’s zeal for renewable power has already had broad impacts on energy contractors, generating hundreds of millions in contracts for solar companies and helping to reduce fuel consumption by the world's largest single petroleum buyer.

The armed forces nearly doubled renewable power generation between 2011 and 2015, to 10,534 billion British thermal units, or enough to power about 286,000 average U.S. homes, according to a Department of Defense report.

The number of military renewable energy projects nearly tripled to 1,390 between 2011 and 2015, department data showed, with a number of utilities and solar companies benefiting. Many of those projects are at U.S. bases, where renewable energy allows the military to maintain its own independent source of power in case of a natural disaster or an attack - or cyber attack - that disables the public grid.

The White House did not respond to Reuters requests for comment on the military’s use of green energy. Although Trump has blasted solar subsidies, vowed to boost fossil fuel development and questioned the science behind climate change, military leaders remain confident that the president won’t halt their march toward renewable power.

"We expect that it's going to continue during the Trump administration," said Lt. Col. Wayne Kinsel, head of the infrastructure unit of the Air Force Asset Management Division for Logistics, Engineering and Force Protection. "It's really not political."

Other senior officials in the Navy, Air Force and Army also told Reuters that they expected their renewable energy programs to continue.

Lt. Col. J.B. Brindle, a Defense Department spokesman, said the agency "spends very little appropriated funding" on renewable energy projects, but declined to give any figures or to answer additional questions about such efforts.

Trump's Secretary of Defense, Jim Mattis, has long supported efforts to reduce troop dependence on petroleum. He saw first-hand the vulnerability of diesel convoys to attacks by militants while serving as Commander of the Marine Corps Combat Development Command in Afghanistan and Iraq in the early 2000s. As far back as 2003, he urged Navy researchers to find innovative ways to unleash the military from the "tether of fuel."

Launched By A Republican

The military's push into alternative energy started under Republican President George W. Bush in 2007, when he signed a law requiring the Pentagon to get 25 percent of the electricity for its buildings from renewable energy by 2025.

The effort accelerated under President Barack Obama, who required the Army, Air Force and Navy to each deploy 1 gigawatt of renewable power and directed the Army to open a lab developing energy technologies for combat vehicles.

In an apparent nod to Obama's efforts to curb global warming, the Pentagon also reported to Congress in 2015 that the droughts and floods caused by climate change pose a security threat – contributing to foreign political and economic instability that could require substantial troop deployments.

Former Defense Secretary Ash Carter said in his parting memo in January that the Navy has already met its goal, producing 1 gigawatt of electricity - while the other forces are on track to meet their targets.

The programs have their opponents. The conservative Heritage Foundation, for example, has railed against the military's support of renewable power and biofuels.

"The administration right now needs to focus specifically on combat power," said Rachel Zissimos, a Heritage researcher. "Investing money on optional initiatives right now I think is problematic."

High Stakes For Military Suppliers

Solar companies such as SunPower Corp (SPWR.O) and utilities including Sempra Energy (SRE.N) and Southern (SO.N) have won utility-scale renewable energy contracts worth hundreds of millions of dollars in recent years, according to the companies and Department of Defense documents reviewed by Reuters.

Southern (SO.N), for example, has 11 solar projects totaling 310 megawatts on bases in states including Georgia and Alabama. In December, Sempra (SRE.N) completed the 150-megawatt Mesquite Solar 3 in Arizona to provide about a third of the power needed at 14 Navy and Marine bases in California for 25 years.

SunPower has already landed a major deal under the Trump administration - a $96 million contract finalized on Feb. 3 to provide power to Vandenberg Air Force base in California until 2043, according to a Pentagon database.

Sempra and Southern said they were committed to serving their customers but declined to comment on whether they were discussing new contracts with the military. SunPower did not comment.

Last year, the Navy began outfitting Arleigh Burke destroyers with gas-electric hybrid engines developed by L3 (LLL.N), which won a $119 million contract in 2013.

Tesla (TSLA.O), which produces electric cars and batteries, is another company that analysts say could benefit from military contracts. A Tesla spokesman said the company is "supportive” of the military's interest in clean energy but declined comment on whether it was pursuing Defense Department contracts.

The U.S. military's use of oil, meanwhile, fell by more than 20 percent between 2007 and 2015. The bulk of the decline likely stems from declining combat operations rather than rising efficiency and use of renewable energy. But traditional military fuel suppliers - such as Exxon Mobil (XOM.N), BP (BP.L), and Shell (RDSa.L) - nonetheless have a lot at stake if the military accelerates its move away from fossil fuels. (For a graphic on Pentagon's oil purchases click

The military’s average annual oil bill was about $14.28 billion between 2007 and 2015.

BP is constantly reviewing its marketing strategies to ensure growth, a spokesman said.

"As fuel slates change, we will adapt, and continue to provide our customers with the products they demand," he said in response to questions about the potential impact of the military’s increased use of renewable fuels.

Solar-Powered Soldiers

Hauling fuel to the battlefield has been a hazard for militaries since at least World War I and continues to take a grim toll. One in nearly 40 fuel convoys in Iraq in 2007 resulted in a death or serious injury, according to a study commissioned by the Defense Department. In Afghanistan the same year, one in 24 fuel convoys suffered casualties.

Marines in Afghanistan began carrying solar panels in 2009 to forward bases in battles with Taliban fighters. They used them to power batteries for communications, GPS and night-vision goggles. The panels not only reduced the need for convoys, they allowed marines to shut off generators, hushing operations and making them harder for enemies to detect.

Arotech ARTX subsidiary UEC has sold $25 million worth of the solar arrays and expects a bigger business in systems working with batteries and solar to slash dependence on generators, said business manager Nancy Straight.

Col. Brian Magnuson, the head of the Marines' expeditionary energy office, established in 2009, said his office aims to replace diesel-powered generators on the battlefield with solar power, and to reduce energy use with efficiency measures such as insulated tents and the deployment of advanced batteries.

"These technologies are a way to become more effective in combat," Magnuson said. "This is about war-fighting capability.” (For a graphic on a boom in military green energy projects, click

Article Link To Reuters:

Oil Firms As Trump Offers Little On Plans To Boost U.S. Output

By Naveen Thukral
March 1, 2017

Crude oil prices rose on Wednesday as the dollar trimmed gains and a speech by U.S. President Donald Trump offered little on plans by his administration to boost U.S. oil production.

The market is being underpinned by OPEC's production cuts while rising U.S. shale oil output is keeping a lid on prices.

West Texas Intermediate crude futures gained 11 cents, or 0.2 percent, to $54.12 a barrel and Brent crude added 15 cents, or 0.3 percent, to $56.66.

Market participants had been expecting President Trump to include details on energy policy in a speech to the U.S. Congress but his remarks lacked any specifics.

"With oil you are going to see prices move higher into London session just because no news is good news. If Trump had announced de-regulations of some of the environment protections to make it easier to pump more oil, that might have put pressure on WTI," said Jeffrey Halley, senior market analyst at futures brokerage OANDA in Singapore.

"Now all the attention is around to EIA's crude inventories data tonight."

U.S. stock futures and the dollar trimmed their gains on Wednesday as Trump promised immigration and tax reforms in a speech that contained few specifics or surprises.

On the fundamental front, U.S. crude stockpiles have risen for seven straight weeks. Forecasts for another build last week, this time of 3.1 million barrels, have fueled worries that demand growth may not be sufficient to soak up the global crude oil glut.

U.S. stockpiles rose 2.5 million barrels in the week to Feb. 24, according to a report from trade group the American Petroleum Institute. Gasoline stockpiles rose unexpectedly and distillate stockpiles fell more than expected, the API said. Crude declined slightly on the report.

The official report from the U.S. Energy Information Administration is due at 1530 GMT on Wednesday.

The Organization of the Petroleum Exporting Countries (OPEC) has cut its oil output for a second month in February, a Reuters survey found on Tuesday, showing the exporter group has boosted already strong compliance with its supply curbs on the back of a steep reduction by Saudi Arabia.

Brent oil looks neutral in a range of $55.93 to $57.26 per barrel, and an escape could suggest a direction, said Wang Tao, a Reuters market analyst for commodities and energy technicals.

U.S. oil may edge up to a resistance at $54.28 per barrel, a break above which could lead to a further gain to $54.62.

Article Link To Reuters:

The Great Aussie Growth Comeback May Not Be So Great After All

China’s resource binge has emboldened the Australian consumer; But still few signs of meaningful private or public investment.

By Michael Heath
March 1, 2017

Australia’s smashing growth may not be quite as good as it seems.

It’s clear that China’s renewed resource binge has brought back the good times for its commodity-driven economic satellite, emboldening Aussie households to ease up saving and ramp up spending. And the outlook for the world’s No. 2 economy looks like it will remain good for some time: factory gauges are stronger and the Communist party this year holds a twice-a-decade reshuffle of senior leadership posts, so it must.

But the robustness of the Aussie consumer is questionable. Wage measures in Wednesday’s GDP report were miserable: employee compensation fell 0.5 percent in the final three months of 2016 to be just 1.5 percent higher over the year. It was only a substantial reduction in the savings ratio that financed a jump in consumer spending; and with household debt at a record high, its debatable whether this will continue.

The upshot: while on the face of it, 2.4 percent annual growth puts the economy on track to reach the Reserve Bank of Australia’s forecast of 3 percent later this year, Wednesday’s report might prove something of a false dawn. It’s private and public investment that are needed for the economy to keep accelerating, and neither shows signs of emerging.

Michael Blythe, chief economist at Commonwealth Bank of Australia, says “governments need to lose their fear of debt” by supporting infrastructure investment to spur growth. Similarly, businesses “need to cut their hurdle rates when evaluating investment projects as 10 percent to 16 percent makes no sense in a low yield, low inflation and low return environment.”

When it comes to stimulus, the central bank also appears likely to remain on the sidelines: Governor Philip Lowe has made clear his opposition to further easing, citing the threat to financial stability of increased borrowing to chase higher property prices.

“For the RBA, the ongoing softness in wages and prices means higher interest rates are a very long way away,” said Deutsche Bank’s Chief Economist Adam Boyton. “Indeed if the bank thinks core inflation is likely to be sub-2 percent until about the middle of 2019, that would make that year the first that we would seriously countenance a rate hike. ”

Mining Bounce

Still, being the most China-reliant economy in the developed world is helping Australia: an iron ore price hovering above $90 -- more than double its low of just over a year ago -- is lifting national income and helped provide a 50 percent boost to company profits. That’s good news for a government desperately trying to shore up its budget and avoid a downgrade of its AAA rating.

Secretary to the Treasury John Fraser, speaking to a parliamentary panel shortly before the GDP release, said if higher commodity prices are sustained then the government “should prioritize budget repair” and ensure any additional revenue was used to strengthen the bottom line.

“We need to take great care not to fall into the trap of spending unexpectedly higher revenue, should it arise, in a way that would structurally weaken the budget as may have occurred through the early 2000s,” Fraser said, referring to the Howard government’s spending spree at the start of the mining boom.

On the AAA rating, Fraser told lawmakers that messages from the three main agencies are mixed, but the continued focus on budget repair will help Australia’s cause. Since the mid-year budget update in December "the winds have probably blown a little more in our favor" in terms of avoiding a downgrade, he said.

Aussies like competition. Wednesday’s return to growth after a shock third-quarter contraction means the economy has now expanded for more than 25 years, and is closing in on the record held by the Netherlands.

Article Link To Bloomberg:

Germany's Volatile INSA Poll Shows SPD Again Ahead Of Merkel's Party

March 1, 2017

Germany's Social Democrats (SPD) moved back ahead of Chancellor Angela Merkel's conservatives in a poll by the INSA institute for Bild newspaper on Wednesday, marking the third time in the last three weeks the lead has changed hands in the INSA poll.

The INSA poll, which is more volatile than other leading polls, showed the SPD rising 2 percentage points in the last week to 32 percent, while the Christian Democrats and Christian Social Union (CSU) fell 1 point to 30.5 percent.

Three weeks ago, INSA had the SPD ahead of the CDU/CSU by 31-30.

Chancellor Angela Merkel is seeking a fourth term in the election on Sept. 24. Other polls show the two main parties running neck-and-neck.

In the INSA poll, the Greens were steady at 6.5 percent, the hard-left Linke fell 1.5 points to 8 percent, and the Free Democrats (FDP) gained 1.5 points to 7 percent. The anti-immigrant Alternative for Germany (AfD), which has no coalition allies, was unchanged, at 11 percent.

Article Link To Reuters:

Snap To Price Long-Awaited IPO On Wednesday Amid Signs Of Brisk Demand

By Lauren Hirsch
March 1, 2017

Snap Inc, owner of popular messaging app Snapchat, will price its initial public offering after the U.S. stock market closes on Wednesday in the most eagerly awaited technology IPO since Chinese e-commerce giant Alibaba went public in 2014.

The pricing will be the first test of investor appetite for a social-media app beloved by teenagers and 20-somethings but which has yet to turn a profit. The company's losses widened last year, and it is experiencing decelerating user growth in the face of intense competition from larger rivals such as Facebook.

Despite the challenges in converting "cool" into cash, Snap is targeting a valuation of between $19.5 billion and $22.3 billion from listing on the New York Stock Exchange on Thursday, the richest valuation in a U.S. tech IPO since Facebook in 2012.

Snap is looking to price 200 million shares on Wednesday night at a range of $14 to $16 dollars a share.

The sale, which aims to raise around $3 billion, has the advantage of favorable timing. The market for technology IPOs hit the brakes in 2016, the slowest year for such launches since 2008, and investors are keen for fresh opportunities.

A successful launch could encourage debuts by other unicorns, the moniker given to tech start-ups with private valuations of $1 billion or more.

Early indications for selling shareholders and the company have been positive. The IPO book is said to be over-subscribed with orders coming in at the high end of the range or higher. At least one new investor indicated it was willing to buy a large chunk of the IPO and not sell it for a year, a rare commitment to make. [L2N1GD0TL]

The company cut its price range last month from an original target of between $19.5 billion and $22.3 billion after investor concern over its unproven business model. It had been valued at up to $20 billion in nine separate private funding rounds over the past five years.

Have Faith In Spiegel

Although Los Angeles-based Snap is going public at a much earlier stage in its development than social media giants Twitter Inc or Facebook Inc, the five-year-old company is valuing itself at roughly 49 times revenues at the top of its suggested range, nearly double the 27 times revenue Facebook fetched when it went public in 2012.

To justify its suggested valuation and fend off concerns about slowing user growth, Snap has highlighted how much time its users spend on the app and the revenue potential of the emerging trend for young people to communicate with video rather than text.

The company has been vague on its specific plans to lead and monetize image-driven conversations, but it has suggested investors have faith in the vision of its co-founder Evan Spiegel, whom it introduced in its investor roadshow as a "once in a generation founder."

The 26-year-old will walk away with a roughly 17 percent stake valued at as much as $3.8 billion.

Spiegel and co-founder Bobby Murphy will each be selling 16 million shares in the IPO that could earn them $256 million apiece. Spiegel will also receive a bonus equivalent to 3 percent of its market capitalization or up to $669 million.

Dozens of other Snap investors could become overnight millionaires.

Spiegel and Murphy will maintain tight control over Snap's stock through a unique three-share class structure. The structure will give Spiegel and Murphy the right of 10 votes for every share. Existing investors will have one vote for each of their shares, while new investors will have no voting rights.

Article Link To Reuters:

Stocks Struggle As Trump Offers Few Policy Details, Dollar Firms On Rate Talk

By Nichola Saminather
March 1, 2017

U.S. stock futures pared gains on Wednesday on disappointment that President Donald Trump did not offer further details on his plans for infrastructure spending and tax reforms, but the dollar firmed on growing expectations of a rate hike this month.

Trump pledged to overhaul the immigration system, improve jobs and wages for Americans and promised "massive" tax relief to the middle class and tax cuts for companies, but offered few clues on how they would be achieved.

"Investors had little to grasp, and market reaction during the speech was choppy and directionless," market strategists Paul Christopher, Scott Wren and Sameer Samana at Wells Fargo Investment Institute in St. Louis said.

"The speech was short on details and did not even prioritize the president’s goals."

Capital Economics' Paul Ashworth said Trump was struggling to implement his agenda.

"With Congress getting bogged down by Republican infighting over efforts to repeal and replace existing health care legislation, it will take considerably longer to pass tax reform than we initially thought on election night," Ashworth said in a note.

"There is now a good chance that it won't happen until early next year."

U.S. stock futures still pointed to a higher open after Trump's address, though gains shrank as the speech progressed.

E-mini S&P futures edged up 0.2 percent, after the Dow Jones Industrial Average snapped a 12-day winning streak to close down 0.1 percent in the prior session.

The dollar index, which tracks the greenback against a basket of trade-weighted peers, advanced almost 0.4 percent to 101.49 after wobbling during the speech.

The U.S. currency also rebounded against the yen, rising 0.35 percent to 113.16 yen, after earlier erasing its gains.

Reaction in Asian stock markets to Trump's speech was also largely muted, with the MSCI's broadest index of Asia-Pacific shares outside Japan down about 0.2 percent.

A raft of surveys pointing to stronger factory activity in China, Japan and other parts of the region were largely overshadowed by Trump's speech.

"The market has been looking for reassurance that Trump intends to follow through on his campaign promises for fiscal spending, tax cuts and deregulation," said James Woods, global investment analyst at Rivkin in Sydney.

"He mentioned these policies but did not provide any actual details or time lines, which is what investors are looking for."

"However, in particular I think his rhetoric has been toned down around protectionism when mentioning China and Mexico easing concerns around trade wars."

Markets took note of that shift, with the Mexican peso trading higher after Trump's speech. While still pledging to build a wall on the U.S.'s border with Mexico, Trump made no mention of his earlier promises to make the latter pay for it.

The dollar fell 0.1 percent to 20.0815 pesos.

In Asian markets, Chinese stocks advanced 0.4 percent after the stronger-than expected factory readings.

Japan's Nikkei jumped 1.1 percent, buoyed by a weaker yen and data showing manufacturing activity expanded in February at the fastest pace in almost three years.

Australian shares were off 0.5 percent despite stronger-than-expected GDP data, though the Australian dollar edged up 0.1 percent to $0.7663 on confirmation the economy had returned to growth in the fourth quarter.

Treasury yields, which had jumped after Fed officials suggested an interest rate rise might be delivered later this month, remained near that level after Trump's speech.

U.S. 2-year Treasury yields were at 1.2999 after Trump's speech, after touching 1.304, their highest level since Dec. 15, earlier in the session.

New York Fed President William Dudley, among the most influential U.S. central bankers, said overnight on CNN that the case for tightening monetary policy "has become a lot more compelling" since Trump's election.

U.S. 10-year Treasury yields rose to 2.4221, after touching a session high of 2.4260 on Wednesday.

Traders now see a better than 62 percent chance of a rate increase in March from the current level of 0.5 to 0.75 percent, a surge from 31 percent earlier, according to CME Group's FedWatch tool.

The sharp shift came despite disappointing U.S. fourth-quarter gross domestic product growth, as downward revisions to business and government investment offset robust consumer spending.

Data releases later in the session include German unemployment for February, and U.S. personal consumption expenditure, inflation and manufacturing activity.

In commodities, oil prices inched higher as supply cuts by the Organization of Petroleum Exporting Countries offset concerns about rising U.S. crude inventories.

U.S. crude rose almost 0.2 percent to $54.10 a barrel.

Global benchmark Brent jumped 1.9 percent to $56.64.

The stronger dollar weighed on gold, which slumped 0.5 percent to 1,242.30 an ounce, extending Tuesday's 0.3 percent decline.

Article Link To Reuters:

Uber CEO Says He Must 'Grow Up' After Argument With Driver

By Peter Henderson
March 1, 2017

Uber Technologies Inc Chief Executive Travis Kalanick on Tuesday said it was time for him to "grow up" and get help after a video was published showing him getting into an argument with a driver for the ride service who complained about pay rates.

Bloomberg on Tuesday published a video of Kalanick, a co-founder of the company, arguing with a driver who tells him that rates have been cut and he has lost money. The 40-year-old Kalanick responds angrily that some people don't take responsibility for their own actions.

The video is the latest in a series of challenges and embarrassments for the ride service. Last week, Alphabet Inc's self-driving vehicle unit Waymo sued Uber for allegedly stealing designs related to autonomous vehicles, a claim that Uber has denied.

Uber also is investigating allegations of sexual harassment in its own organization. Earlier this month, a female former engineer at Uber said in a widely read blog post that managers and human resources officers at the company had not punished her manager after she reported his unwanted sexual advances, and even threatened her with a poor performance review.

In the video published by Bloomberg on Tuesday, the driver in a dash cam tells Kalanick, a passenger, that "people are not trusting you anymore," and complains that rates for drivers have fallen.

Kalanick responds, "Some people don't like to take responsibility for their own shit. They blame everything in their life on somebody else. Good luck!"

In his statement released later on Tuesday, Kalanick said he was ashamed for treating the driver disrespectfully, and he apologized to the driver and others.

"It’s clear this video is a reflection of me - and the criticism we’ve received is a stark reminder that I must fundamentally change as a leader and grow up. This is the first time I’ve been willing to admit that I need leadership help and I intend to get it," he wrote.

Article Link To Reuters:

Penguin Random House Crowned Winner Of $60M Obama Book War

By Natalie O'Neill
The New York Post
March 1, 2017

The bidding war over Barack and Michelle Obama’s book deal skyrocketed to more than $60 million before Penguin Random House was crowned the winner on Tuesday night.

The publisher announced that the pair had signed with them after reportedly delivering the highest bid earlier in the day.

“We are very much looking forward to working together with President and Mrs. Obama to make each of their books global publishing events of unprecedented scope and significance,” Penguin Random House CEO Markus Dohle said in a statement.

“With their words and their leadership, they changed the world, and every day, with the books we publish at Penguin Random House, we strive to do the same.”

The former president and first lady are writing separate books, but selling them together, according to the Financial Times.

Penguin Random House did not reveal any titles, publishing dates or other details about the works also were not immediately available.

By contrast, publishers only plunked down $15 million for Bill Clinton’s 2004 autobiography “My Life” and $10 million for George W. Bush’s memoir “Decision Points,” according to past reports.

At least four publishing firms — including HarperCollins, Macmillan and Simon & Schuster — are vying for the rights, sources told the paper.

Penguin Random House has already published three other books by Barack Obama, including “Dreams from My Father,” which earned $6.8 million in royalties after it was released in 1995, The Hill reported.

Obama’s book “The Audacity of Hope” raked in $8.8 million as a bestseller in 2006, according to Forbes.

Article Link To The New York Post:

Markets Need To Hear More Details From Trump

By Mohamed A. El-Erian
The Bloomberg View
March 1, 2017

President Donald Trump’s first speech to Congress on Tuesday night was wide-ranging in coverage, nationalistic in tone and presidential in delivery.

The president repeated many of the themes he advocated during the campaign and has reiterated since the Nov. 8th election. He declared the opening of “a new chapter of American greatness,” the “renewal of the American spirit,” and the country’s readiness to lead globally but only “by putting its own citizens first.”

In his comments on the economy, he set out his main areas of policy focus but left for later the details of what specific measures he wants to take, how they will be funded (where needed), and when they will be implemented.

Characterizing the country’s economic condition as worrisome after years of deindustrialization, eroding competitiveness, rising inequality and too many Americans lacking jobs, he stated that his administration was developing a “historic tax reform” that, along with a “big tax cut,” would enable U.S. companies to compete better at home and abroad.

While on the topic of global competition, he lamented “the exports of U.S. jobs and wealth” to other countries. He warned them that the U.S. would no longer accept an uneven playing field, especially when it comes to import tariffs and surcharges. “Free trade also has to be fair trade,” is how he put it.

Noting that “the time has come for a new program of national rebuilding,” he reiterated his intention to embark on an ambitious infrastructure plan that emphasizes “buy American and hire American.” While noting that this would be done through both partnerships and fiscal channels in the context of a budget that would also make more room for military spending, he stopped short of commenting on the balance of deficit financing and new revenues. Also, citing the example of the coal industry, Trump repeated his commitment to the further removal of what he regards as excessive regulation.

Many of these themes have already been embraced by equity markets that have embarked on a record-setting run higher. As such, investors will welcome Trump’s restatement of his pro-growth agenda. But those hoping for clarity on the “how” and “when” of his execution must wait. Their rollout was not on Tuesday night’s agenda. The question now is how patient markets will remain.

Article Link To The Bloomberg View:

American Industries See Two Sides Of Trump

By Megan McArdle
The Bloomberg View
March 1, 2017

Late in election season, as pundits tried to feign uncertainty about the inevitable Clinton coronation, a few folks considered what might happen to the financial markets if Donald Trump were elected. The answer a lot of them came up with was pretty dire: a big crash. Against all predictions, Trump was elected. And then, right on schedule … the stock market indices soared to new records?

Umm, what?

That’s the question that a lot of folks in the punditocracy are asking: why do markets seem so happy about Trump? While Washington is swooning in despair at the incompetence of his early days -- the late-night Twitter storms, the failure to even fill the staff jobs he’ll need to get anything done, the total absence of anything resembling a detailed policy plan -- Wall Street seems pretty pleased with how things are going. Why the disconnect?

So when I sat down to listen to Trump’s speech tonight, I asked myself how this would sound to folks on Wall Street, or businessfolk elsewhere. The answer I came back with was that it probably sounded a lot like his earlier pronouncements: a decidedly mixed bag.

On the one hand, lower corporate taxes! Pipeline approvals! A trillion dollars for infrastructure! A less ponderous and fussy FDA!

On the other hand, Fair Trade (pronounced “protectionism”), immigration crackdowns and a jeremiad against “artificially high” prescription drug prices. And where’s he getting that trillion dollars, anyway?

For businesses, in other words, there’s a Good Trump and a Bad Trump. Wall Street seems to have decently strong faith that Good Trump will do what he promises, while Bad Trump is probably just saying that stuff to keep the voters pacified, but doesn’t really mean it.

Like most Washingtonians, I think that Wall Street fundamentally misunderstands how stuff happens in my city. Good Trump is promising stuff that will cost an astronomical amount of money. To make good on those promises, he will need to get bills through Congress. Those bills will have to be scored by the Congressional Budget Office, which is going to report, correctly, that they will cost an astronomical amount of money. Good Trump is going to have to prioritize, or confess to voters that he’s sticking their grandchildren with the bill for his warm personal gift to the corporation that shipped jobs overseas.

Bad Trump, on the other hand, is promising popular-sounding stuff that can often be accomplished, at least in part, by the executive branch without new legislation. If I had to bet on which Trump will predominate, I’d put my money on nativism, not tax reform.

This speech doesn’t really move that needle. Of course, “business” is not monolithic; certain industries were undoubtedly keenly interested in what he had to say tonight. Health-care companies, for example, were probably hanging on every word as he gave the most detailed outline yet of his vision for an Obamacare replacement. (Not very detailed, and basically a restatement of the tentative consensus among Republicans. But baby steps.) Pharmaceutical companies were undoubtedly riveted by his discussion of drug prices and the FDA, though I doubt many of them would willingly accept price controls or weakened patent protection in exchange for somewhat faster regulatory approvals.

But most of the companies that stand to benefit from the policies he outlined -- heavy construction companies and small manufacturers threatened by foreign competition, for example -- didn’t really hear anything new, though I’m sure they were glad of a recommitment in a major speech. And most of the industries that stand to lose, such as those that employ large numbers of low-skilled immigrants, were probably unsurprised to hear him reiterate his desire to shield American workers from foreign competition.

I will be surprised if American stock markets react strongly to this speech in either direction. For now, I expect that investors will keep betting on Good Trump, at least until he decisively proves them wrong. And at that point … well, in hindsight, some predictions turn out to be flatly wrong. Others, in the fullness of time, stand revealed as extraordinarily prescient -- just slightly premature.

Article Link To The Bloomberg View:

Fed Officials Jolt Market With Talk Of Pending Rate Hike

By Ann Saphir and Jonathan Spicer 
March 1, 2017

A handful of Federal Reserve policymakers on Tuesday jolted markets into higher expectations for a March U.S. interest rate increase, with comments that suggested rate-setters are worried about waiting too long in the face of pending economic stimulus from Washington.

New York Fed President William Dudley, among the most influential U.S. central bankers, said on CNN that the case for tightening monetary policy "has become a lot more compelling" since the election of President Donald Trump and a Republican-controlled Congress.

John Williams, president of the San Francisco Fed, said that with the economy at full employment, inflation headed higher, and upside risks from potential tax cuts waiting in the wings, "I personally don’t see any need to delay" raising rates.

"In my view, a rate increase is very much on the table for serious consideration at our March meeting."

In remarks to a joint session of Congress, Trump offered little detail about planned tax cuts or new infrastructure spending beyond the broad strokes he offered during the election campaign -- leaving policymakers with little to add to their analysis.

Williams, unlike Dudley, is not a voter this year on policy, but his views are seen as influential among his colleagues.

The comments sparked a flurry of selling in the bond market, with the two-year Treasury yield jumping to its highest level since December.

Interest rate futures implied traders saw a nearly a 57 percent chance the Fed would raise rates at its March 14-15 meeting, up from roughly 31 percent late on Monday, and around 20 percent a week ago, according to Reuters data.

Market expectations are likely to be shaped further this week when Fed Gov. Lael Brainard speaks on Wednesday in Boston and when Fed Chair Janet Yellen updates her views on the economy in a Chicago address on Friday. The Fed's next meeting is in two weeks.

The comments on Tuesday before Trump's speech included remarks from Philadelphia Fed President Patrick Harker calling for three rate hikes this year.

A counterpoint came Tuesday evening from St. Louis Federal Reserve President James Bullard, who feels only a single rate hike is needed this year and argued there is no need to anticipate the possible impact of tax and spending plans that are still not fleshed out and may take months to pass Congress.

"The idea of being preemptive would be overkill," in an economy with weak growth and no serious sign yet of a run-up in inflation, Bullard said.

It is possible, he said, that a well constructed tax plan could spur investment and productivity, and add to growth without the inflationary impact some Fed members fear.

A string of better-than-expected economic data including evidence that inflation, that has remained below a Fed target since 2008, was rising to a 2-percent target has raised expectations both inside and outside the Fed for rate hikes this year. The central bank has hiked rates only once in each of the last two years.

Dudley, a close ally of Fed Chair Janet Yellen and a permanent voter on policy, said we have seen a "very large" rise in household and business confidence and "very buoyant" financial markets since the November election, "and we have the expectation that fiscal policy will probably move in a more stimulative direction."

Williams said that raising rates in March, rather than waiting until June, gives the Fed room to raise rates this year more than the three times that most Fed policymakers currently feel would be appropriate.

Thomas Simons, senior money market economist at Jefferies, said in a note that for the normally dovish Dudley, "this is as hawkish and specific as you're going to get."

"All of this looks like a coordinated effort by Fed policymakers to raise expectations for a rate hike at the March meeting," Simons added.

Article Link To Reuters:

Five Takeaways From Trump’s Big Speech

By Niall Stanage
The Hill
March 1, 2017

President Trump addressed a joint session of Congress on Tuesday evening. It was his biggest set-piece moment since his inaugural address. What were the main takeaways?

Trump’s speech was conventional — to the GOP’s relief

The president won election while flouting every established rule of politics — a pattern that has persisted in the White House, giving heartburn even to Republican allies.

By contrast, Trump on Tuesday was at his most restrained. There were no attacks on the media; no especially flamboyant claims or personal jabs; and few significant digressions from the prepared text of his speech.

Trump is an unconventional president, but his speech felt remarkable at times for being so normal.

All of that will be just fine with GOP lawmakers. They have been desperately wanting Trump to curb what they see as self-defeating impulses which distract from an effective underlying message.

They are looking for leadership from Trump, and while the president provided few policy details on Tuesday night, he set out clear objectives in a way that could boost his party’s rank-and-file.

The night recalled the announcement of Trump’s nomination of Neil Gorsuch to the Supreme Court — another occasion when he stayed within the orthodox parameters.

Trump’s tribute to Carryn Owens, the widow of a Navy SEAL killed last month in a raid in Yemen, was handled expertly by Trump. It provided the kind of emotional highpoint presidents often aim for in speeches like this.

It also drew tributes from across the aisle, with CNN commentator Van Jones warning liberals that Trump will be in the White House for eight years if he can create other, similar moments.

Out with the grim ‘carnage,’ in with the sunny ‘new chapter’

In his Jan. 20 inaugural address, Trump talked about “American carnage” and saw a land where “rusted out factories [are] scattered like tombstones across the landscape of our nation.”

Tuesday’s address was sunny by comparison. In its early stages, the president insisted that “a new chapter of American greatness is now beginning.” As it neared its conclusion, he encouraged his audience to “think of the marvels we can achieve if we simply set free the dreams of our people.”

Trump doesn’t trade in unalloyed optimism. There were other less cheery passages, as he spoke about crime rates and what he sees as the dangers of lax enforcement of immigration laws.

But the broader message — “everything that is broken in our country can be fixed. Every problem can be solved. And every hurting family can find healing, and hope” — was more harmonious than we are used to hearing from Trump.

An uplifting tone on one night won’t suddenly change the minds of the millions of Americans who are vehemently opposed to the president and his agenda. But it could at least make him a more palatable figure to centrists and independent-minded voters.

Trump is an American nationalist — love it or hate it

Most recent presidents, Republican or Democrat, have depicted themselves as inherently global figures — the leaders of the free world. Trump might claim that title too, but he speaks a different lexicon.

“My job is not to represent the world,” he said at one point. “My job is to represent the United States of America.”

The influence of Trump’s controversial chief strategist Steve Bannon can be heard most clearly at such moments. Bannon is a fierce believer in the importance of the nation-state, in part as a bulwark against dark forces of corporatism and globalism. Trump, in an apparent reference to institutions such as NATO and the UN, said on Tuesday, “We will respect historic institutions but we will also respect the sovereign rights of nations.”

When it came to the battle against the Islamic State in Iraq and Syria (ISIS), Trump conspicuously promised to work with “our friends and allies in the Muslim world.”

But he did not back away from the basic idea behind his deeply contentious executive order on immigration and refugees. “My administration has been working on improved vetting procedures, and we will shortly take new steps to keep our nation safe — and to keep out those who would do us harm,” he said.

Trump’s critics contend that he has inflamed racial and religious divisions, and Hillary Clinton criticized him on Twitter on Monday for failing to speak out forcefully enough against bigotry.

But he made a clear attempt to rebut those criticisms in his opening remarks, condemning anti-Semitic threats as well as a suspected hate crime in Kansas City in which one Indian man was killed and another wounded.

He wants healthcare utopia

Trump reiterated his desire to see the Affordable Care Act repealed and replaced — in the process earnings some thumbs-down gestures from Democratic lawmakers.

But Republicans will be wondering how they craft legislation that comes close to realizing what Trump promised.

He insisted it ought to be possible to get new laws that “expand choice, increase access, lower costs and, at the same time, provide better health care.”

He added that ObamaCare’s famous “mandate” was “never the right solution for America” but that people with pre-existing conditions should still have access to coverage and that no-one should be “left out” of Medicaid — the program for lower-income Americans that Obama’s legislation greatly expanded.

Most experts simply don’t believe such a “best of all worlds” solution is possible — and it seems especially unlikely in a deeply divided Congress.

He got a better fact-checker

One of the Trumpian traits that most frustrates his critics is a tendency to play fast and loose with the facts.

At times, that has created public embarrassment. Less than two weeks ago, at a White House press conference, the president was challenged by Peter Alexander of NBC News on his untrue assertion that he had won the biggest electoral victory since President Reagan. “I was given that information,” Trump said with a shrug. “Actually, I’ve seen that information around.”

There was little sign of such a cavalier approach on Tuesday. Comments Trump made on the 2015 murder rate and on violent crime in Chicago were accurate, in contrast to previous remarks on those same subjects.

In his litany of complaints about the Affordable Care Act, he noted that premiums in Arizona have increased 116 percent, a finding backed up by a Department of Health and Human Services report.

Critics will argue with his broader interpretations of other topics, such as the economic impact of immigration or his implied assertion that he deserved credit for various job announcements.

But, at first look, Trump appeared to have avoided the kind of misstep that would give his detractors a cudgel to beat him with.

The difference did not go unnoticed.

“This speech appears to have been nominally fact-checked,” Glenn Thrush of the New York Times tweeted.

Article Link To The Hill:

Trump’s Speech To Congress Was Oblivious To Reality

The president did little on Tuesday night to save his failing agenda.

By Brian Beutler
The New Republic
March 1, 2017

In September 2009, after a month that nearly saw legislative support for his domestic agenda collapse, President Barack Obama convened a joint session of Congress to focus the minds of wavering Democrats on the task at hand: reforming the nation’s health care system.

For nearly an hour, Obama defined the goals of his proposal, explained its importance and its function, and listed his criteria for signing legislation. (It was in this address, after Obama said his health reform plan would not subsidize illegal immigrants, that Republican Congressman Joe Wilson shouted “you lie” at the president, setting the tone for Republican opposition for the coming seven years.)

Legislative momentum is a nebulous concept. It is possible that the speech saved his legacy, or that the Affordable Care Act would’ve passed anyhow. But with his signature initiative on the line, Obama left nothing to chance.

The joint address President Donald Trump gave Tuesday night was a more traditional event. Every new president gives one, much like a state of the union address, but before a new president has had a chance to shape the union itself. It is unsurprising that Trump would be tempted to use his speech to re-champion his vision for the country and place himself above the parliamentary squabbling that powers Congress.

But if anything, at this extremely early date, Trump’s legislative agenda is more imperiled than Obama’s was in that September speech. It is conceivable that Republicans in Congress will find themselves unable to repeal Obamacare—the first domino in a procedural cascade that will leave the GOP with little or nothing to show for consolidating control of government.

Trump could have offered his congressional foot soldiers moral support and guidance. Instead he gave an address crafted almost entirely with his own immediate political fortunes in mind.

In the most superficial sense, Trump met his objective.

Trump peppered his remarks with a more balanced mix of banal platitudes, lies, and characteristically offensive agitation than marked his inaugural address and other speeches—aimed more squarely at lazy pundits primed to celebrate Trump’s latest “pivot” than at insecure members of the Republican congressional conferences. With such a large, captive television audience, it wouldn’t surprise me if the address fleetingly, but perhaps substantially, lifts his approval ratings.

But against a backdrop of severe congressional dysfunction, when his members are deeply divided over the substance and ordering of their agenda, nothing he said made their marching orders clearer. With his agenda on the brink, and his party in need of direction, Trump sought to shore up his personal tracking poll numbers.

The health care portion of his speech, in which he asked Democrats and Republicans to “save Americans from this imploding Obamacare disaster,” comprised five sentences, recapitulating the health care reform blueprint House Speaker Paul Ryan has drafted, but that right-wing members and vulnerable incumbents do not support (at least not yet).

Trump spoke, as many presidents do, with an eye toward how the story of his presidency will be written. To a staggering degree, he has approached governing as a largely publicity-driven enterprise. If a presidency were composed of a series of addresses to Congress, and Trump delivered this one over and over, history might well remember him as a competent leader.

But Trump is on the verge of being remembered as a president too incompetent to execute an agenda that would, in principle, break faith with his most devoted supporters. He did little Tuesday night to change that trajectory.

Article Link To The New Republic:

Trump Strikes a Better Tone. So What?

By Jonathan Bernstein
The Bloomberg View
March 1, 2017

Donald Trump finally gave a first-class nomination acceptance speech. Unfortunately, he's running about eight months behind what he needs to be doing now.

After 40 days of presiding over a remarkably dysfunctional and chaotic administration, Trump didn't spend (much) time rehashing the election, bashing the media, or ad-libbing nonsense. There were a few whoppers, but my guess (before the fact-checkers do their work) is that for a convention speech addressed to partisans and curious independents, most of the exaggerations and misstatements were relatively normal.

That, along with a couple of days without nutty stuff on Twitter, offers good news for those worried about his self-discipline.

The bad news is it isn't summer 2016, and Trump isn't a candidate sketching out broad themes and aspirations. He is the President of the United States of America. For a president giving one of his few major speeches in support of his legislative agenda, substance matters. Trump came up as short as ever. Whether it was taxes, health care, immigration, or infrastructure, the speech wasn't just light on details; it was almost entirely lacking in them.

Which would be okay if Trump already had, say, a health care and a tax plan. Or, for that matter, if Republicans in Congress were moving ahead solidly on one or more of his legislative priorities.

But none of that is true.

Governing, the old saw says, is choosing. To the joint session of Congress, Trump made no choices at all. It was an hour plus of cotton candy. I suspect it'll get excellent reviews; a lot of pundits who have been brutal to Trump will welcome the chance to praise him, and I suspect everyone is pleased to have the president toss aside his clown act, at least for one night.

But it's a sugar high, and there won't be much if anything remaining of it after a few hours.

There was simply nothing in this speech to break the deadlock Republicans in Congress are facing on health care. Nothing to reconcile Trump's instincts for promising huge tax cuts and huge new spending with budget realities, let alone with his complaints about the debt. He talked big on infrastructure, but we know the Republican leadership in Congress has already indicated they have no interest, and it's hard to see anything in this speech to change that. And the immigration section followed a day of flipping and flopping around on the topic.

Meanwhile, there was hardly anything on foreign and national security policy. Or trade policy. Oh, he used the words "radical Islamic terrorism," and he complained as always that everyone is taking advantage of the United States on trade. But he didn't, for example, say anything about what new trade deals he might want, or how he would propose to fix the ones he considers unfair. On Islamic State, he merely said he had asked the Pentagon for a new plan to defeat it.

At best, this speech, in which Trump declared that the "time for trivial fights is behind us," could be heard as a promise to make up for the time he lost during the campaign, the transition, and during his first month. Or at least not to lose any more time. We'll see soon if that's a promise he'll really keep.

Article Link To The Bloomberg View:

Trump Just Delivered The Best Speech Of His Political Career

By Michael Goodwin
The New York Post
March 1, 2017

Sometimes a speech is just a speech. And sometimes it heralds the prospect of a great national revival.

Donald Trump gave the best speech of his short political life last night, and it had nothing to do with grand oratory. He was thoroughly presidential, speaking plainly and yet masterfully in projecting an optimistic vision of the America he aims to build.

It is a vision so optimistic and encompassing that even steaming Democrats had to join boisterous Republicans in the applause at times.

Anything you could possibly want, he served it up in a feast of ideas and promises. Trump was at turns resolute, as when he talked about the “broken promises” of ObamaCare.

And he never once mentioned the media or fake news. Hallelujah!

His speech was well written, and well delivered, chock full of initiatives and full of changes in mood.

Trump was aggressive when he wondered how Democrats opposed to border control would feel if they talked to an American who lost his job and maybe a loved one because of an illegal immigrant.

He showed flashes of humor and talked with compassion about the power of school choice to save children from failing schools while recounting the story of a young woman in the audience. She was one of several nonwhites he singled out in a display of diversity that most Dems couldn’t resist.

Most of all, the president led the Capitol to an emotional crescendo by introducing one of his guests, the tearful widow of Ryan Owens, the Navy Seal killed in a recent raid in Yemen. The loud, sustained applause was simultaneously heartbreaking and inspiring.

The president’s goals are huge, but this was no mere laundry of list of government spending and imposition. Instead, Trump infused his core principles — fixing immigration and trade, broad tax cuts, repealing ObamaCare and rebuilding the military — with unifying themes that would make America more fair, more just, more prosperous and yes, great again.

He began by talking about a new “national pride” and a “surge of optimism,” and finished with a flourish, saying, “I am asking everyone watching tonight to seize this moment and –Believe in yourselves.

Believe in your future. And believe, once more, in America.”

It was a not-so-subtle request that citizens keep the pressure on congress to deliver Trump’s agenda.

It is one of the virtues of single-party rule — the same voters put Trump and GOP congressional leaders there, and they have the right to demand action, not talk.

In more immediate terms, the speech slammed the brakes on the building sense that Trump was being hemmed in. Day after day, headline after headline carried a sense of impossibility about his infant presidency. There were too many problems, too much chaos, too much division–there wasn’t much he could do.

Obviously, the president was having none of it, and his performance was another reminder that he is a singular figure in our era. Trump, as he did in the campaign, again displayed an ability to rise to the occasion and seize the momentum from his critics and opponents.

Democrats underestimate him at their peril. Then again, maybe they are trying to destroy him because they don’t underestimate him–they fear him.

Put it this way: If the Trump of last night is the Trump who shows up to the Oval Office every day, he will be an extraordinary force with the potential to reshape the political landscape of both parties.

Not boxed in by ideology or doctrinal straitjackets, he wants to get big things done for all Americans. Unions allied with Dems are already drifting in his direction because of his commitment to good-paying jobs, and his grace notes on race and religion are not partisan.

Sure, he can be his own worst enemy, but there will be no stopping him if he can bottle last night’s approach. “The time for trivial things is over,” he said at one point in an appeal to Democrats.

Some of them grumbled, but most Americans would agree with him that it’s time to get on with doing big things for the country. He’s ready to lead the way.

Article Link To The New York Post: