Wednesday, May 31, 2017

Wednesday, May 31, Morning Global Market Roundup: Asia Stocks Cap Fifth Month Of Gains On China Relief; Sterling Slips

By Saikat Chatterjee 
Reuters
May 31, 2017

Asian stocks held steady on Wednesday, capping a fifth consecutive month of gains as data showed China's factory activity grew at a steady clip this month, reassuring investors worried about a slowdown in the world's second-biggest economy.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was broadly flat on Wednesday as Chinese stocks .SSEC .SZSC ran out of steam after an early run higher.

Japan's Nikkei .N225 edged 0.3 percent lower.

Stock index futures in Europe were pointing to a slightly firmer start.

"The market remains positive and the favorable PMI data reinforces the trend, though investors should be careful of chasing markets higher as liquidity conditions can change quickly," said Alex Wong, a fund manager at Ample Capital Ltd in Hong Kong, with about $130 million under management.

Activity in China's manufacturing sector grew at the same pace in May as in April, with a headline reading of 51.2, official data showed, in a reassuring sign the world's second-biggest economy is not losing too much steam after a solid first quarter performance.

Analysts had seen a slight slowing to 51.0.

Growth in China's steel industry rebounded to the strongest level in a year, supported by an increase in new orders, according to an industry survey, buoying prices of iron ore and steel rebar futures in Shanghai.

In a further vote of confidence, Moody's Investors Services said the improving outlook for global growth in 2017 appeared sustainable as some of the biggest risks to the developed economies seem to have subsided.

Despite signs of improvement in the global economy, investors are wary of chasing markets higher with stock trading volumes on the mainland and Hong Kong trending lower in recent days, signaling diminishing investor confidence.

On a price-to-earnings basis, Hong Kong is now valued in line with its 20-year average while the broader Asia-ex Japan market is above its long term average, indicating Asian stocks aren't cheap any more after a 17 percent rise this year.

In currency markets, the pound fell briefly to $1.2791 GBP=D4, near a one-month low of $1.2775 touched on Friday before recovering slightly. It also slipped to 0.8738 pound per euro EURGBP=D4, near Friday's eight-week low of 0.8750.

New constituency-by-constituency modeling by YouGov showed the Conservative Party might lose 20 of the 330 seats it holds while the opposition Labour Party could gain nearly 30 seats, The Times said.

"The U.K. election chances will likely see the pound go through a bad case of yo-yo syndrome in the weeks ahead," said Stephen Innnes, senior trader at OANDA.

The news came after a string of opinion polls showed a narrowing lead for May's Conservatives, shaking investors' confidence that May would easily win a majority in a national election on June 8 and potentially fuelling market uncertainty.

The dollar held near two-week lows against the safe-haven yen as investors turned cautious amid political worries in Europe as well as weaker stock and commodity markets after a long U.S. holiday weekend.

The dollar fell to near two-week low of 110.665 yen JPY= and last traded at 110.99 yen.

The greenback's weakness was also accentuated after the U.S. Treasury yields resumed their downward trend after a brief spike earlier this month. Ten-year yields were trading at 2.21 percent compared to 2.41 percent, two weeks ago.

In commodities, oil prices remained soft, as concerns lingered about whether the extension of output cuts by OPEC and other producing countries will be enough to support prices.

U.S. crude futures CLc1 slipped about 0.6 percent to $49.61 a barrel. Global benchmark Brent LCOc1 was down as well at $51.59 per barrel.

Gold XAU= edged lower to $1,262 an ounce.


Article Link To Reuters:

Oil Falls As Rising Libyan, U.S. Output Undermines Cuts

By Henning Gloystein
Reuters
May 31, 2017

Oil prices fell on Wednesday, as rising output from Libya added to concerns about increasing U.S. production that is undermining OPEC-led production cuts aimed at tightening the market.

Brent crude futures LCOc1, the international benchmark for oil prices, were at $51.59 per barrel, down 25 cents, or 0.5 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $49.34 per barrel, down 32 cents, or 0.6 percent, from their last settlement.

Traders said the price declines were a result of higher output in conflict-torn Libya, which was adding to a relentless rise in U.S. production.

Libya's oil production is expected to rise to 800,000 barrels per day (bpd) this week, state-run National Oil Corporation said on Monday.

That would likely boost its exports. Shipping data in Thomson Reuters Eikon shows that, excluding pipeline exports, Libya shipped out an average of 500,000 bpd of crude oil so far this year, compared with just 300,000 bpd shipped on average in 2016.

Libya's rising production and exports add to soaring U.S. output, which largely thanks to shale oil drilling has jumped by more than 10 percent since the middle of last year to over 9.3 million bpd C-OUT-T-EIA, close to top producers Saudi Arabia and Russia.

"Libyan and shale oil production seems to have occupied the mind of traders overnight. That's consistent with my sense that this is all about inventories and the associated supply overhang in crude oil markets at the moment," said Greg McKenna, chief market strategist at futures brokerage AxiTrader.

Rising output from the United States and Libya undermines efforts by the Organization of the Petroleum Exporting Countries (OPEC) and other producers including Russia to tighten an oversupplied market by cutting production by around 1.8 million bpd until the end of the first quarter of 2018.

The cuts, which have been in place since January and were initially due expire in June, have so far not had the desired effect of substantially drawing down excess inventories.

Libya is an OPEC member, but it was exempt from the cuts. The United States is not participating in the self-imposed production cuts.

To rein in the global fuel supply overhang, bloated inventories need to be drawn down, analysts say.

"Stocks are at least 170 million barrels above the 2011-15 average. Hence coming near that figure in the next few weeks appears to be optimistic," said Sukrit Vijayakar, director of energy consultancy Trifecta.


Article Link To Reuters:

If Trump Wants To Fight Iran, He'll Soon Get The Chance In Syria

Forces backed by U.S., Iran in race to take Islamic State land; ‘This is the most complicated battlespace anyone’s ever known’


By Henry Meyer and Nafeesa Syeed
Bloomberg
May 31, 2017

Islamic State’s self-declared caliphate in eastern Syria is surrounded by some of the world’s strongest military powers. Their forces are advancing on several fronts. The battlefield odds aren’t even close.

That’s why the commanders of those armies -- in Washington, Moscow and Tehran, as well as Damascus and Ankara -- are looking beyond the coming showdown with the jihadists. When they’re killed or driven out, who’ll take over? It’s an especially sharp dilemma for President Donald Trump. Because for the second time this century, the U.S. risks defeating one Middle Eastern enemy only to see another one, Iran, emerge as the big winner.

The U.S. invasion of Iraq in 2003 toppled Iran’s bitter rival Saddam Hussein and replaced him with a sympathetic Shiite-led government. In Syria today, Iranian ally Bashar al-Assad has survived six years of civil war during which U.S. leaders repeatedly insisted that he had to go. His army, fighting alongside militias loyal to Tehran, is driving into Islamic State-held territory, setting up a race with U.S.-backed forces to liberate it. Even the areas where the Americans arrive first may eventually revert to Assad’s control.

That might not have been a problem for Trump the candidate. Before the election, he vowed to smash Islamic State without getting sucked into a wider war, and said he’d work with Russia, Assad’s other key backer. It could be a problem for the President Trump who told America’s regional allies last week that he’ll help roll back Iranian power -- a promise that, in Syria at least, won’t be easy to keep.

‘Cares More’

“There’s not much the U.S. can do about Iran in Syria,” said Cliff Kupchan, chairman of Eurasia Group, a New York-based risk consultancy. “They’re just not going to walk,” he said. “Iran is closer, and cares more.”

Iran faces growing hostility from Saudi Arabia and its Gulf allies to the south. That makes preserving the Shiite-friendly governments to its west, in Baghdad and Damascus, even more important. A land corridor through those countries allows Iran to supply weapons to the Hezbollah militia in Lebanon, a key instrument of Iranian power, which is also fighting on Assad’s side.

Islamic State’s stronghold in eastern Syria blocked that route -- and the blockage will remain if American-backed forces take over. In Raqqa, the jihadist capital, it’s likely that they will. The ground campaign there is mostly being waged by Kurdish fighters armed, trained and given air support by the U.S.



After they win, “what we envision is a governance reflective of the local population” in Raqqa, which is mostly Arab, Defense Department spokesman Eric Pahon said in an interview. He said the U.S. could provide “civil affairs troops” as it’s done elsewhere, giving guidance on how to fix infrastructure, for instance.

Still, it’s not clear what relationship those new local authorities would have with Assad’s government, which says it expects to regain power over the whole country. Damascus has extended an olive-branch to the Kurds, saying their fight against Islamic State is “legitimate.” And the Kurds say they’re ready to negotiate with Assad for autonomy -- because the opposition groups backed by Turkey and Gulf Arabs are radical Islamists who are “even worse,” according to Abdsalam Ali, a representative of the Syrian Kurdish PYD party in Moscow.

So some of America’s local allies, at least, are ready to cut a deal with the Iranian camp. If others aren’t, it’s not clear what kind of backup they could expect.

‘Bunch Of Tanks’

The U.S. “would certainly respond as necessary” to protect local partners, Pahon said. But in the event of an Assad advance on Raqqa, “I don’t think our response would necessarily be to move in a whole bunch of tanks,” as diplomatic options would be pursued, he said.

The Kurds face another threat from Turkey, which also has troops inside Syria and strongly opposes any move toward Kurdish autonomy there. Last month, after Turkish planes bombed Kurdish fighters, the U.S. had to send soldiers to shield one of its allies from another.

Farther south, it’s the forces of the Assad-Russia-Iran alliance -- which has shown little sign of internal dissension -- that are leading the fight to oust Islamic State. They’re pushing toward Deir Ezzor, a city about 140 kilometers (85 miles) southeast of Raqqa, which has been besieged by the jihadists since 2015, and also offers control of the frontier with Iraq.

The border regions have seen the most direct clash so far between the American and Iranian sides. On May 18, American planes bombed a convoy of pro-Assad fighters. The Pentagon said they ignored warnings to stop approaching a base at At-Tanf, near the border with Iraq and Jordan, where U.S. troops are training anti-Assad militias.

‘Anything Can Happen’

As armies from both camps maneuver around a smallish stretch of land in eastern Syria, there’s the potential for more such flashpoints. “Anything can happen,” the Pentagon’s Pahon said. “This is the most complicated battle-space anybody has ever known.”

Pahon said the U.S. hasn’t pivoted toward taking on Assad. The At-Tanf strike was in response to a direct threat and, “now that they’ve backed off, we’re not going after them,” he said. “This is not a new policy.”

America’s stance has already shifted under Trump. He ordered missile strikes on Syrian army positions last month, as punishment for a chemical attack he blamed on Assad; in a similar situation, his predecessor Barack Obama decided against military action. Still, defeating Islamic State has remained the overwhelming U.S. priority.

That’s a short-sighted view of the Middle East, a region that’s already witnessed “the most dramatic collapse of American power since World War II” on Obama’s watch, according to James Jeffrey, a former U.S. ambassador to Turkey and Iraq.

America “gravitates toward fighting ISIS and claiming that’s the center of everything, which is easy to do and wins universal applause,” but doesn’t constitute a “long-term strategy,” he said. “In 2017, ISIS is not a threat to regional stability. The threat now is Iran.”

In the Persian Gulf and Israel this month, Trump heard a similar message.

But to policy makers in Russia, it’s the U.S. and its allies who are destabilizing Syria, and their anti-Iranian rhetoric lacks realism.

“Does anyone think Iran is going to leave this region and Syria?” Russian Middle East envoy Mikhail Bogdanov said in an interview. “As if you could wave a magic wand and Iran would disappear?”


Article Link To Bloomberg:

Another Warning Sign Flashes For Subprime Auto Loans

Data may show subprime consumers are weaker, Wells Fargo says; Last decade, slowing credit card payments were early alarm.


By Matt Scully
Bloomberg
May 31, 2017

Fewer subprime borrowers are paying off their auto loans early, a possible sign that consumers with weaker credit scores are struggling more, according to a report by Wells Fargo & Co. researchers.

Borrowers are making fewer extra payments on loans that were bundled into bonds in 2015 and 2016, compared with loans in 2013 and 2014 bonds, according to Wells Fargo analysts led by John McElravey. The data on prepayments may offer another sign that subprime consumers are having more trouble paying their bills, the analysts wrote in a note dated Tuesday. Borrowers are already defaulting on a growing amount of auto debt.

Last decade, slower monthly payment rates on credit cards were an early sign of the consumer credit cycle changing for the worse, the analysts wrote. For auto loans, slower prepayment may be more of a coincident indicator than a leading one, they wrote.

Growth in auto debt since the financial crisis has set off alarm bells on Wall Street and among regulators who are concerned that borrowers may be overburdened and used car prices are falling. Government enforcement officials have expressed concern that lenders may be making loans that borrowers can’t repay, and packaging them into bonds that investors are willing to buy.

Total issuance of subprime auto loan-backed securities rose to $7.1 billion in the first quarter from $5.9 billion in the same quarter last year, according to data compiled by Bloomberg. The growth came even as losses from the debt have risen beyond levels last seen in the aftermath of the 2008 financial crisis.

The researchers at Wells Fargo, the number one seller of bonds backed by subprime auto loans, have said that the bonds pose few risks to bondholders, even though they recommend investors cut their risk exposure because of valuations.


Article Link To Bloomberg:

'Green' Mutual Funds Bounce Back After Trump-Induced Retreat

By Ross Kerber 
Reuters
May 31, 2017

After U.S. President Donald Trump's election last November, investors pulled nearly $68 million from so-called "green" mutual funds, reflecting fear that his pro-coal agenda would hurt renewable energy firms.

But now investors are pouring money back in, boosting net deposits in 22 green funds to nearly $83 million in the first four months of 2017, according to data from Thomson Reuters' Lipper unit.

Investors' renewed faith in the funds reflects a growing belief the president will not succeed in reviving the coal industry and will not target the government subsidies that underpin renewable power, which have bipartisan support.

(For a graphic on "green" funds drawing new investor cash click tmsnrt.rs/2rir2pw)

It also sends a positive sign for the wind, solar and energy efficiency firms and make up a large portion of the green-fund portfolios.

The coal industry faces problems in the marketplace that are too big for any government to solve, said Murray Rosenblith, a portfolio manager for the $209 million New Alternatives Fund (NALFX.O), among the U.S. green funds seeing investor inflows.

"Trump can't bring back coal," he said. "There's nothing that can bring it back."

A Reuters survey of some 32 utilities in Republican states last month showed that none plan to increase coal use as a result of Trump’s policies. Many planned to continue a shift to cheaper and cleaner alternatives, including wind and solar.

A White House official did not respond to a request for comment about the administration’s efforts to boost coal or its position on wind and solar subsidies.

Lipper classifies "green" funds as those with screening or investment strategies that are based solely on environmental criteria. Many make it a point to avoid purchasing shares of traditional oil, gas or mining companies.

For a graphic showing the turnaround in green-fund investments, see: tmsnrt.rs/2qPISl4

The funds, while still an investment niche, have become increasingly popular over the past decade amid rising worries about climate change. They tend to draw younger and more environmentally minded investors who see profits in the burgeoning renewable power industry.

"Solar and wind power are creating a lot of jobs. There is a long-term secular trend taking place," said Joe Keefe, Chief Executive of Pax World Management LLC, whose $418 million Pax Global Environmental Markets fund is one of the biggest in the green fund sector.

Solar firms employed about 374,000 workers in 2016, while the wind industry employed 101,738. Combined, they produced job growth of about 25 percent over 2015, according to the U.S. Department of Energy.

The average fund among the group of 22 green funds tracked by Lipper posted a six-month return of 9.37 percent. That lagged the S&P 500 index’s 12.14 percent, excluding dividends, over the same period through April 30, but beat the S&P's oil and gas index, along with several major coal companies which have slumped since the election.

The growth helped boost the group’s combined assets under management to $2.4 billion by the end of April, up from $2.1 billion in November, according to the data.

Tom Roseen, Lipper's head of research, said the inflows into green funds could reflect value-shopping after the election triggered an initial sell-off in the solar and wind energy sectors.

He cited solar module maker First Solar Inc (FSLR.O), a popular stock among green funds, trading at about $39.50 a share, far off the highs above $70 it reached last year but up more than 35 percent from a drop it suffered after the election.

Trump Skeptics

Trump campaigned on a promise to revive the ailing oil and coal industries, in part by dismantling former President Barack Obama’s environmental regulations aimed at cutting carbon dioxide emissions.

He also vowed to pull the United States out of a global pact to fight climate change, a promise White House officials said Trump is now reconsidering, under pressure from lawmakers, global allies, and scores of major oil, coal and other companies.

Trump’s more conservative supporters - including the man who led his transition at the Environmental Protection Agency, Myron Ebell - have complained about the slow pace of progress in dismantling Obama-era climate initiatives.

While many drilling and mining companies have applauded Trump’s efforts, some investors are skeptical that repealing climate regulation will provide a big boost to fossil fuels.

The government subsidies that are crucial for growth of wind and solar power, meanwhile, seem to enjoy bipartisan support in Congress.

Existing tax credits for solar and wind projects were extended for five years at the end of 2015 by a Republican-controlled Congress. A number of Republican lawmakers represent states with burgeoning wind and solar industries, such as Texas and North Dakota.

Trump administration policy has yet to affect renewable energy firms - and may not affect them much going forward, said Mike Garland, Chief Executive of wind farm owner Pattern Energy Group Inc. (PEGI.O).

“Most investors are starting to realize that the federal government is limited in its impact and the risk to (green energy subsidies) is relatively low," he said.

Pattern’s stock has gained 20 percent since the beginning of the year, after falling 10 percent between the November election and the end of 2016.

Many of the green funds tracked by Lipper are heavily invested in renewable energy companies with overseas operations that reduce their exposure to U.S. politics.

One of the top holdings of Rosenblith’s fund, for example, is Vestas Wind Systems,(VWS.CO) the Danish company that produces and services wind turbines. If U.S. policies turned against wind power, Vestas could still expect strong demand elsewhere, Rosenblith said.

A number of exchange-traded funds focused on renewable energy also attracted money this year, led by Guggenheim Investments' Solar ETF, (TAN.P) which took in $28.5 million.

Its top holdings include Arizona-based First Solar and China’s Xinyi Solar Holdings (0968.HK).

William Belden, Guggenheim's head of ETF business development, said the inflows suggest that "some of the early responses to the Trump administration were overdone."


Article Link To Reuters:

Once Costly Deep-Sea Oil Turns Cheap, To OPEC's Dismay

Deep-water drilling costs are coming down, Wood Mackenzie says; Oil at $50 seen sustaining some deep-water projects by 2018.


By Serene Cheong, Sharon Cho, and Dan Murtaugh
Bloomberg
May 31, 2017

Reports of deep-sea drilling’s demise in a world of sub-$100 oil may have been greatly exaggerated, much to OPEC’s dismay.

Pumping crude from seabeds thousands of feet below water is turning cheaper as producers streamline operations and prioritize drilling in core wells, according to Wood Mackenzie Ltd. That means oil at $50 a barrel could sustain some of these projects by next year, down from an average break-even price of about $62 in the first quarter and $75 in 2014, the energy consultancy estimates.

The tumbling costs present another challenge for the Organization of Petroleum Exporting Countries, which is currently curbing output to shrink a glut. In 2014, when the U.S. shale boom sparked oil’s crash from above $100 a barrel, the group embarked on a different strategy of pumping at will to defend market share and throttle high-cost projects. Ali Al-Naimi, the former energy minister of OPEC member Saudi Arabia, said in February 2016 that such producers need to either “lower costs, borrow cash or liquidate.”

“There is life in deep-water yet,” said Angus Rodger, director of upstream Asia-Pacific research at Wood Mackenzie in Singapore. “When oil prices fell, many projects were deferred, but the ones that were deferred first were deep-water because the overall break-evens were highest. Now in 2017, we’re seeing signs that the best ones are coming back.”



The falling costs make it more likely that investors will approve pumping crude from such large deep-water projects, the process for which is more complex and risky than drilling traditional fields on land. That may compete with OPEC’s oil to meet future supply gaps that the group sees forming as demand increases and output from existing wells naturally declines.

Saudi Arabia’s Al-Naimi left his post shortly after his speech targeting high-cost producers, and his successor Khalid Al-Falih organized production cuts by OPEC and some other nations that are set to run through March 2018. In a speech in Malaysia this month, Al-Falih bemoaned the lack of investment in higher-cost projects and said he fears the lack of them could cause demand to spike above supply in the future.

Warnings from OPEC of a looming shortage are “overstated and misleading,” Citigroup Inc. said in a report earlier this month. The revolution in unconventional supplies like shale is “unstoppable” unless prices fall below $40 a barrel, and deep-water output could grow by more than 1 million barrels a day by 2022, according to the bank.

Royal Dutch Shell Plc in February approved its Kaikias deep-water project in the U.S. Gulf of Mexico, saying it would break even with prices below $40 a barrel. That followed BP Plc’s decision in December to move forward with its Mad Dog Phase 2 project in the Gulf, with costs estimated at $9 billion compared to $20 billion as originally planned.

Over the next three years, eight offshore projects may be approved with break-even prices below $50, according to a Transocean Ltd. presentation at the Scotia Howard Weil Energy Conference in New Orleans in March. Eni SpA could reach a final investment decision on a $10 billion Nigeria deep-water project by October.

West Texas Intermediate, the U.S. marker, was trading in New York at $49.34 a barrel by 1:08 p.m. Singapore time, compared with its 2014 peak of more than $105. Brent crude, the benchmark for more than half the world’s oil, was at $51.59 in London, down from more than $115 a barrel in mid-2014.

Shale Boom

As rising U.S. output and OPEC’s unbridled production exacerbated the biggest price crash in a generation, Rodger estimates energy companies shelved projects that would have produced more than 20 billion barrels of oil equivalent since 2014 until the start of 2016. About two-thirds of that were deep-water, he said.

Meanwhile in America’s shale country, companies quickly reduced costs and improved productivity, driving break-even costs in the best parts of fields from Texas to North Dakota into the $30s. The cost reductions have helped the number of drilling rigs in the U.S. more than double since last year.

That increased activity is causing costs to rise again, though, said Jonathan Garrett, an upstream analyst at Wood Mackenzie. Prices for pressure-pumping equipment and sand, both of which are necessary for the hydraulic fracturing that makes shale production possible, have increased by more than 20 percent this year.
Renewed Momentum

While costs for shale production, known as tight oil, are edging higher now, expenses associated with deep-water drilling is finally coming down, Rodger said. Rental rates for drilling rigs have been cut in half since 2014, and companies are redesigning projects to be more cost efficient instead of to maximize output.

Deep-water exploration will see “renewed momentum” over the rest of 2017 as large integrated oil companies look to capitalize on lower service costs and strengthening fiscal positions, Fitch Group’s BMI Research said in a May 3 note. In the U.S. Gulf of Mexico, a more cost-efficient design for deep-water projects has reduced the break-even cost at many wells to below $40 a barrel, it said.

“The deep-water cost curve is much higher, but over time that deep-water cost curve is coming down and over time that tight oil cost curve is going up a bit,” Wood Mackenzie’s Rodger said. “So there’s still some clear water between the two but it’s now getting closer to each other.”


Article Link To Bloomberg:

If Trump Won’t Dump Paris Deal, He’s A Chump

By Rich Lowry
The New York Post
May 31, 2017

For a bull in the china shop, President Trump has so far gingerly stepped around the Paris climate accord. That dance could end as soon as this week, with Trump deciding whether to stay in or opt out.

Out should be the obvious answer. No US interest is served by remaining part of the accord, which even its supporters say is mostly an exercise in window dressing — that is, when they aren’t insisting that the fate of the planet depends on it.

The treaty’s advocates, hoping to forestall a Trump exit, are trying to save the accord by arguing that it is largely meaningless.

In this spirit, a piece on the liberal Web site Vox explained, the Paris accord “asks participants only to state what they are willing to do and to account for what they’ve done. It is, in a word, voluntary.”

In other words, “Nothing to see here, just us climate-change alarmists playing pretend.”

And there is indeed much to be said for the worthlessness of Paris. Beijing pledges that China’s emissions will “peak around 2030.” By one estimate, this is when its emissions would peak regardless. So the world’s largest emitter is using the accord as a platform for climate virtue-signaling.

According to Benjamin Zycher of the American Enterprise Institute, even if Paris is fully implemented and you accept the EPA’s model for how emissions affect warming, it will produce a rounding error’s worth of decline in the global temperature by 2100 — .17 of a degree, Celsius.

If Paris is such a nullity, why shouldn’t we simply pull out? This is where it’s supporters reverse field and contend that it will be a global disaster if the United States leaves.

Supposedly the moral suasion involved in countries coming up with voluntary targets and having to defend their performance meeting them will drive an ever-escalating commitment to fight global warming.

Once upon a time, Paris was portrayed as a tool for steadily tightening restrictions on fossil fuels. The Obama team referred to one provision in the accord as “ratcheting up ambition over time.”

Whatever their opportunistic salesmanship at the moment, this clearly is still the goal of the treaty’s supporters and a reason why Trump should get out while the getting is good.

International agreements acquire a dead-weight momentum of their own. Witness how hard it is to pull out of the Paris accord now, when it went into effect only last November. In another couple of years it will acquire the sanctity of the Peace of Westphalia.

The treaty may be notionally voluntary, but climate-change activists will surely hunt for a judge willing to find a reason that the US emission target in the accord is binding. Trump’s unhappy experience in the courts with his travel ban should make him highly sensitive to this judicial threat.

In the context of Trump’s handling of other international agreements, getting out of Paris shouldn’t be a close call. To have pulled out of TPP — a free-trade agreement with tangible strategic benefits in Asia — and stay in Paris would be a travesty. To irk our European allies with less than explicit restatements of our commitment to NATO, then placate them by standing by Paris would be strategic folly.

The shrewdest option would be to submit the agreement to the Senate for ratification, where it would certainly be rejected.

President Obama pretended that the treaty was an executive agreement — even though it involves 195 countries, and purports to bind future US presidents — precisely so he could do an end-run around the Senate.

Honoring the Senate’s constitutional role in considering such a treaty would make it that much harder for the next Democrat president simply to sign on again unilaterally.

Failing that, Trump should say farewell to Paris on his own, and never look back.


Article Link To The New York Post:

The Russia Probe Is Too Important To Be Muddled By Politics

By Ralph Peters
The New York Post
May 31, 2017

President Trump’s immediate Russia problem is that he insists he doesn’t have a Russia problem. He does.

Whether the multiple investigations underway reveal indisputable evidence of subversive relationships or give the president a clean bill of political health, they must be pursued to the end. It’s essential to the integrity of our system of government.

Given the allegations and the extraordinary, if largely circumstantial, evidence already accumulated, every American, whatever his or her political bent, should want answers. Instead, we have Democrats prematurely demanding impeachment, while Republicans dismiss a paramount security threat as a witch hunt.

Let the independent counsel, the FBI, Treasury and other relevant agencies do their jobs.

What do we know that merits investigation?

At least five Trump campaign advisers have had dubious ties to Russia. Carter Page shared energy-industry information with Russian agents. Roger Stone, who’s known Trump since the 1980s, appears to have had advance knowledge of Russian mischief during the election. Paul Manafort made a fortune working for Vladimir Putin’s now-vanquished puppet regime in Ukraine and had extensive Moscow ties.

Retired Lt. Gen. Michael Flynn, once a fine soldier, disgraced his uniform by taking payment from the Putin regime (and by surreptitiously flacking for Turkey) then attempting to cover it up. He lied to Vice President Mike Pence, obfuscated with investigators and deceived the Pentagon.

Now Trump’s son-in-law Jared Kushner has been placed, along with Flynn, in a secretive meeting with Russia’s US ambassador, Sergey Kislyak, reportedly for the purpose of establishing clandestine back-channel communications with Moscow (the line was never activated). Whether the idea was first broached by Flynn and Kushner or by the Russians, this isn’t business as usual. Even Henry Kissinger, pursuing his opening with China, didn’t rely upon Chinese intelligence-service communications.

Kushner also met with Sergey Gorkov, Russian spy-school grad and head of Vnesheconombank, a Russian international bank under US sanctions that appears to serve as a slushfund for Putin. Why? This isn’t business as usual, either.

-- Recent reports claim US intelligence intercepted Russian chatter during the campaign in which our enemies discussed holding compromising information on Trump or his associates. The president’s defenders dismiss this as Russian disinformation — but why would the Russians compromise the most pro-Moscow major-party candidate for president since FDR’s last campaign? Or his pro-Russian staffers?

 -- The president fired FBI Director James Comey, who had been heading the investigation into Russian campaign activities. Then Trump told the Russian ambassador and Foreign Minister Sergey Lavrov that getting rid of Comey took the pressure off of Russia-related matters. That isn’t business as usual.

-- Trump made it clear that, in the recent French presidential elections, he preferred pro-Putin candidate Marine le Pen (who lost by a landslide). Trump mirrors Putin’s line on the European Union and, to a worrisome degree, NATO. And while the president is swift to criticize allies, he doesn’t criticize Putin. That isn’t business as usual.

 -- All US intel agencies agree the Russians actively interfered in our presidential election, hoping to defeat Hillary Clinton. As a former intelligence officer, I can assure readers that this isn’t a “deep-state conspiracy” to “get Trump.” The intel agencies do their best to remain nonpartisan — and ironically, intel professionals probably voted overwhelmingly for Trump, given how severely they condemned Clinton’s misbehavior.

 -- The members of the relevant Senate and House committees who’ve had access to closely held intelligence believe further investigation is required.

 -- White House media surrogates make much of the fact that “no charges have been filed.” Well, not yet. The FBI doesn’t work that way (nor does Treasury, the ringer in this match). Arguably the most methodical government agency, the FBI, doesn’t recommend charges in any case until it has squeezed out each last drop of evidence — and that takes time, even years. That is business as usual.

And when, after his brief tenure as national-security adviser, Gen. Flynn asked Congress for immunity in return for his testimony — a request that was promptly denied — it suggested that prosecutions of at least some of the figures enmeshed in this saga will lead to a courtroom and, perhaps, a prison.

It’s unfortunate that this vital national-security issue has been muddied by the shamelessly biased media (on both sides) and by hysterical partisan loyalties. This transcends politics. It’s about the safety of the republic, the integrity of our national elections and possible hostile penetration of a presidential administration.

No matter which side of the political divide we’re on, as Americans we should want to know the truth, the whole truth and nothing but the truth.


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Activist Probing Ivanka Trump's Brands In China Arrested

Reuters
May 31, 2017

A man has been arrested and two are missing in China after conducting an investigation into a Chinese company making Ivanka Trump-branded shoes, China Labor Watch, a New York-based advocacy group, said on Wednesday.

Labor activist Hua Haifeng was arrested in Jiangxi province on suspicion of illegally using eavesdropping equipment, according to Li Qiang, executive director of the group China Labor Watch.

The three men had been investigating factories that produce shoes for Ivanka Trump, the daughter of President Donald Trump, and other Western brands, he said in an email.

"We appeal to President Trump, Ivanka Trump herself, and to her related brand company to advocate and press for the release our activists," China Labor Watch said in the email to Reuters.

The Ivanka Trump brand declined to comment.

The White House and Ivanka Trump's lawyer, Jamie Gorelick, did not immediately respond to requests for comment.

Calls to provincial police in Jiangxi and Ganzhou city police were not answered.

The reported arrest and disappearances come at a time of sustained pressure on labor activists in China amid a crackdown on civil society under President Xi Jinping.

In recent years, many labor rights activists have reported being intimidated and harassed, temporarily detained, or restricted in their movement.

Li said in 17 years of activism, including investigations of hundreds of factories in China, his group had never had anyone arrested on suspicion of having committed a crime.

"This is the first time we've come across this kind of situation," he said, adding the accusation against Hua had "no factual basis".

Li said Hua and another investigator, Li Zhao, had worked covertly at a shoe factory in the city of Dongguan, in Guangdong province, that was owned by the Huajian Group.

A third, Su Heng, had worked at a related factory in the city of Ganzhou in Jiangxi but went incommunicado after May 27. Both factories produced Ivanka Trump-branded shoes, Li Qiang said.

Hua had been investigating a vocational school in Jiangxi affiliated with the parent company of the factories when he was arrested.

The investigators had discovered evidence that workers' rights had been violated, Li said.

A woman surnamed Mu who said she was in charge of recruitment at Huajian said she had not heard about the case.

A switchboard operator at Huajian's headquarters declined to transfer Reuters to company officials in a position to address questions about the situation.

Hua and Li Zhao had been warned by authorities weeks ago that they were suspected of having broken the law, Li Qiang said.


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China May Factory Activity Holds Up On Boost From Steel, Construction

By Yawen Chen and Ryan Woo 
Reuters
May 31, 2017

China's manufacturing and services sectors expanded at a solid pace in May thanks to robust construction and infrastructure investment, welcome news for authorities trying to strike a balance between maintaining stable economic growth and defusing debt risks.

The official manufacturing Purchasing Managers' Index (PMI) was at 51.2 in May, unchanged from April, a monthly survey by the National Bureau of Statistics showed on Wednesday. Analysts polled by Reuters had predicted a reading of 51.0.

The survey results suggest authorities were having some success in stabilizing the broader economy without risking a sharper slowdown in growth as they try to defuse bubble risks from years of credit-fueled stimulus.

On the whole, "China's economy is changing into a trend of stabilization from a momentary spike and drop," Zhang Liqun, an analyst with the China Logisticas Information Centre, said in a statement.

Most analysts agree that momentum in China will slow after strong first quarter growth of 6.9 percent, as Beijing's crackdown on its financial sector is expected to take a toll on corporates' financing costs.

So far the slowdown has been benign, however, with some key sectors such as construction activity holding up well.

The statistics bureau said construction remained robust despite slowing a notch from the previous month, as infrastructure investment speeded up, boosting demand for steel.

Indeed, activity in the steel industry expanded the most in a year in May, supported by higher new orders, a separate industry survey showed, suggesting still-solid demand in construction.

Growth in the services sector also accelerated to 54.5 as commercial services such as retail and railway transportation expanded on rising demand.

New orders for China's manufacturers kept pace with April at 52.3, with export orders firming a touch by 0.1 percentage point to 50.7, suggesting external demand held up.

Production stayed well within expansionary territory, though growth eased to 53.4 compared to last month's 53.8.

Growth Risks

The government has set a more modest growth target of around 6.5 percent for 2017, after achieving a slightly higher 6.7 percent target in 2016.

The crackdown on financial risks, however, is seen pushing borrowing costs up and dragging on growth.

ANZ analysts estimate the average lending rate has edged up by around 30 basis points in the past few months.

"We suspect that the current stability of growth will prove temporary," said Julian Evans-Pritchard, a Singapore-based China economist at Capital Economics.

"With the regulatory crackdown on financial risks still weighing on credit growth, it will be difficult to avoid a further slowdown in the coming months."

There are also doubts about whether other sectors of the economy will be able to pick up the slack if the property market slows as persistent curbs gradually take the heat out of the market.

Those worries were inflamed last week when Moody's Investors Service downgraded China's credit ratings for the first time in nearly 30 years, saying it expects the financial strength of the economy will erode in coming years as growth slows and debt continues to rise.

China's growth impulse is also being challenged by a slowing trend in producer price inflation. Official data showed on Saturday profits earned by Chinese industrial firms slowed to its weakest in four months in April.

The input price sub-index dropped to 49.5 in May, according to the statistics bureau's May PMI survey, after easing to 51.8 in April, as the tailwind from a commodities boom weakens.

Output prices also slipped to 47.6 from April's 48.7.

China's biggest steelmaker, Baoshan Iron & Steel, for instance, cut its main steel product prices for May and June after a long series of increases.

Property sales growth also slipped in April and a strong rebound in commodity prices appears to have peaked, pointing to a continued slowdown in the industrial sector.

On whole, however, analysts don't expect economic growth to slow sharply this year, noting the government is keen to maintain stable economic and financial conditions heading into a key political leadership reshuffle later in the year.

"In the months leading up to the 19th Party Congress in November, stability will remain the top priority for Chinese policymakers," said ANZ's chief China economist Raymond Yeung.


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Social Media CEOs In The Dock

Ask Edison: Life-altering technologies come with a big dose of fear.


By Holman W. Jenkins, Jr.
The Wall Street Journal
May 31, 2017

It often falls to CEOs, usually young ones, to lead society’s adjustment to life-altering technologies. Thomas Edison didn’t just invent the lightbulb and a practical electrical distribution system. He had to teach people what electricity was for, and how not to be afraid. An early failure was setting fire to Henry Vanderbilt’s house, after which Mrs. Vanderbilt refused to return until Edison removed his generator.

On Mark Zuckerberg falls the onus to adjust us to the downsides of social media. In every particular, there is nothing new here. People have committed crimes for publicity before. The media have dwelled on the details to satisfy our prurience before. Consider the irony today of press accounts that lovingly recount a handful of rapes, beatings and murders staged for social media, then wring their hands over our appetite for such details.

Mr. Zuckerberg is told he must develop algorithms to protect the public from such material (or buck up the existing media monopoly on it), which in practice will mean developing algorithms to protect Facebook ’s brand from what some of its users choose to do with its technology.

What would be truly useful, of course, is an algorithm to identify those Facebook users likely to commit such crimes beforehand.

Travis Kalanick, the much vilified CEO of Uber, is next up the hierarchical scale of CEOs whose business involves a heavy dose of social responsibility. If not in every one of his actions, in his generally feisty and heedless demeanor, he’s the chief needed by a company that offers the public a service of huge and transformative value that is opposed by a phalanx of retrograde, self-protecting vested interests and their political handmaidens.

He has been vilified for arguing with one of his drivers as an equal rather than as a small and vulnerable child, which is apparently how many in the media believe tech billionaires should be required to relate to the rest of us.

He has been vilified for a software program, Greyball, that helped protect a service of great value to passengers and drivers from entrapment by bureaucrats seeking to shut it down.

Mr. Kalanick certainly needs to adjust his persona for the conflicting demands on a CEO. He perhaps is already trading notes with Brian Chesky, the comparatively invisible head of Airbnb, which combines a similar need to be nicey-nice for the consuming public with an unrelenting readiness to fight for its right to exist.

We come now to the most explosive techno-social anxiety of the moment, though far from visible is a CEO to spank for the social consequences of that nonexistent product, the self-driving car.

Whole academic and media careers are being built on the threat it poses. The truly self-driving car may not have delivered a passenger to a destination yet, but it has delivered renewed life to a century-old, utopian proposal of a universal, taxpayer-funded basic income to support a future humanity consisting mostly of the non-employed.

Mark Fields, recently fired chief of Ford, some have tried to turn into the lightning rod CEO we need. But perhaps we are getting ahead of ourselves. Google recently began recruiting volunteers for an experimental-vehicle program in the Phoenix area. Like other such pilot programs, Google’s self-driving car will come with a Google employee to keep a hand on the wheel.

Such experiments are transitional, naturally, but they point to a paradox. For the elderly, the disabled, children and others for whom a self-driving car would be a godsend, it will be less of a godsend if it doesn’t also come with a human to help them get in and out with their baggage.

Then there’s an even more destabilizing paradox: Exactly the same technology that allows a self-driving car to find its way through the physical world will also make it unnecessary for people to move through the physical world.

The machine vision and real-time mapping that will let your car navigate to the Kwik-E-Mart will also transport you instantly to San Marco Square in Venice in all its glory. It will let you shop the aisles of a supermarket whose selection and layout are customized entirely for you. It will let you join friends for cocktails in Sydney without leaving Detroit.

But at least the self-driving Tesla in your garage will mean jobs for coal miners to keep it juiced with electricity for the trips it increasingly won’t be taking.

Our social world surely will be transformed by technologies being born today, and in ways we don’t grasp as well as we think we do. In the meantime, Mr. Zuckerberg might borrow an idea from Hollywood. He could just put an R rating on certain Facebook content in much the way the movie industry once used R ratings to signal to minors which films might be especially interesting to see.


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5 Stocks Beyond Amazon That Are Ripe For A Share Split

Look at 3M, Cracker Barrel, Markel, Regeneron and Chipotle


By Jeff Reeves
MarketWatch
May 31, 2017

It has been 20 years since Amazon.com Inc.’s initial public offering, and a mere $100 invested in the IPO would have delivered more than $57,000 over the past two decades.

But those gains have been largely without stock splits. In fact, there hasn’t been an effort to rein in Amazon’s AMZN, +0.09% per-share price since the 1990s, right before the dot-com crash. As a result, this high-flying technology company is pushing up against $1,000 a share.

Personally, I don’t care much about per-share pricing. To me it’s like slicing up a pizza — the quality of the pie doesn’t change whether it’s in one giant circle, four big slices or eight modest servings. But many investors care a great deal about individual share pricing, and prefer nominally “cheaper” stocks that allow them to buy in round lots or perhaps more easily make sense of related metrics such as earnings per share.

Unfortunately for those in this mindset, splits are increasingly uncommon. According to research cited in a recent Wall Street Journal report, just six companies in the S&P 500 split last year, down from 93 splits 20 years ago.

As one of the hottest stocks on the market as well as the priciest, Amazon is an easy target for those advocating for more stock splits. But there are plenty of other lesser-known targets that should split their shares.

Here are five, all outside the technology sector:

3M

•Industry: Industrial products

•Last split: 2003

When investors think about sectors that boast expensive companies on a per-share basis, they typically think technology. That’s what makes the triple-digit price of chemicals giant 3M Co. MMM, +0.88% such an outlier. Not only does the company trade for roughly $200 a share, it is right up against all-time highs after an impressive run of nearly 20% in the past 12 months.

Furthermore, history shows that 3M used to be a big believer in splits up until pretty recently. That includes three 2-for-1 splits across just 16 years — in 1987, 1994 and again in 2003. This materials stock may not be the first candidate for a split on many investors’ lists, but it certainly seems overdue.

Cracker Barrel

•Industry: Restaurants

•Last split: 1993

Another example of an under-the-radar split candidate is Cracker Barrel Old Country Store Inc. CBRL, +0.16% The corporation executed a flurry of splits in its early years of trading; after its 1981 IPO, CBRL split 3-for-2 seven times across the next 12 years. But that last split was way back in 1993, and since then shares have soared to well more than $100 a share.

Admittedly, Cracker Barrel hasn’t had an Amazon-like run in the intervening years, with its share price only topping the triple-digit mark back in 2013. However, a five-year return of about 180% and continued strength in shares hints that it’s time for this restaurant stock to serve up another split.

Markel

•Industry: Insurance

•Last split: 1989

For one, Markel Corp. MKL, +0.07% boasts a sky-high share price that is one of the biggest on Wall Street; it, too, is approaching $1,000 a share. Also noteworthy is recent success for the stock, including a run of 125% or so in the past five years vs. just 85% or so for the S&P 500 SPX, -0.12%

The company is very stable with about $2 billion in cash on the books, but it has no dividend to speak of and shares have pretty much flatlined in the last 12 months. If the company wants to reinvigorate its investors and catch the attention of Wall Street, a big split might be the way to do it.

Regeneron

•Industry: Biopharmaceuticals

•Last split: Never

To the best of my knowledge, biotech darling Regeneron Pharmaceuticals Inc.REGN, -1.43% has never split its shares. That’s not entirely surprising: It traded under $30 for most of its first 26 years on the public markets, and its shares only recently ramped up dramatically. The stock attained triple-digit territory at the beginning of 2012, and across the past five years has gained about 250%.

While shares are off considerably from all-time highs of nearly $600 in 2015, the current share price in the mid-$400 range is among the most expensive on Wall Street and could warrant a split.

Chipotle

•Industry: Restaurants

•Last split: Never

After its 2006 IPO, Chipotle Mexican Grill Inc. CMG, -0.93% more than tripled through the end of 2007, achieving a share price of more than $100 right before the financial crisis gripped Wall Street. Shares declined with the rest of the market, of course, but Chipotle quickly emerged as one of investors’ favorite growth stories and raced up to a peak of more than $700 a share in 2015. Investors were calling for splits left and right … and then food poisoning scares, supply chain woes and a big drop in share prices took center stage.

Fast-forward to 2017, and the company seems to be stabilizing at last, posting strong earnings in April and approaching a new 52-week high while trying to top $500 for the first time since 2015. If Chipotle reaches that pinnacle and holds it, it may be time for the company to consider a stock split – both as a sign of confidence in shares and to entice investors who had given up on the stock a few years back.


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Analysts See More Gains As Amazon Shares Break $1,000

By Rodrigo Campos
Reuters
May 31, 2017

Amazon.com on Tuesday became the second of the current S&P 500 components to hit the $1,000 price mark, beating Google parent Alphabet to the punch and underscoring a massive rally in large-cap technology-related stocks.

Shares of Amazon have risen 33 percent so far in 2017 alone, adding roughly $120 billion to its market value. Priceline was the first S&P 500 stock to hit $1,000, doing so in September 2013. Analysts on average expect Amazon to rise another 10 percent according to the median price target of $1,100.

"The world is becoming more and more aware of how unstoppable the business plan is," said Tim Ghriskey, chief investment officer of Solaris Asset Management in New York. He said Amazon accounts for 3.5 percent to 5 percent of the firm's portfolios.

"The $1,000 is a bit of a psychological barrier for any stock, but it is just another number and we're still big believers in it."

Among the other four largest U.S. companies by market cap, Apple and Facebook share prices have also risen nearly 33 percent this year while Alphabet has gained 26 percent and Microsoft has added 13 percent.

The combined market cap of the top five is near $3 trillion, or more than 13 percent of the S&P 500 index stocks' capitalization.

Amazon, the only one of the top five not in the technology sector, accounts for 17 percent of the market cap of the S&P 500 consumer discretionary sector.

In terms of stock prices, Amazon's high of $1,001.20 is second among the S&P 500 behind Priceline, which recently hit $1,850.50. Priceline's near $92 billion market cap is, however, runs far below Amazon's $476 billion.

Apple dominates that metric with a capitalization of more than $800 billion.

Amazon beat Alphabet, which recently hit $994.32, in a race to $1,000. The other S&P component above $900 per share is Intuitive Surgical, at $912.80.

Apple three years ago split its stock in seven. If it had not, its current stock price would be about $1,080.11.

Amazon is ahead of Facebook in the race to become the fourth U.S. company with a market cap of more than half a trillion dollars, joining Apple, Alphabet and Microsoft.


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Uber Fires Self-Driving Car Chief At Center Of Court Case

By Alexandria Sage
Reuters
May 31, 2017

Uber Technologies Inc said on Tuesday it fired the technology whiz it had hired to lead its self-driving unit, Anthony Levandowski, after he failed to comply with a court order to hand over documents at the center of a legal dispute between Uber and Alphabet Inc's (GOOGL.O) Waymo unit.

Uber had hoped Levandowski, one the most respected self-driving engineers in Silicon Valley, would help the ride services company catch up to rivals including Waymo, in the race for self-driving technology. Instead the hiring led to a court fight and the threat of criminal charges. Uber replaced him as the head of its self-driving car unit in April before finally making the decision to fire him.

Levandowski formerly worked for Alphabet's Waymo self-driving division, which says he stole trade secrets by downloading more than 14,000 documents before he left. Levandowski is not a defendant, but his actions are at the heart of Alphabet's lawsuit against Uber.

Uber said in a letter to Levandowski filed in federal court on Tuesday that it was firing him because he had not complied with a court order to hand over the documents. (tmsnrt.rs/2rBPNzW)

He has declined to cooperate, citing his Fifth Amendment right not to incriminate himself. Levandowski's lawyer did not immediately respond to a request for comment.

Uber and Alphabet are battling over technology expected to revolutionize the way people use cars. Waymo claims its trade secrets made their way into Uber's Lidar technology, which bounces light pulses off objects so self-driving cars can "see" the road. Uber denies these claims.

Levandowski has 20 days to comply with the court orders, according to the Uber letter.

Last month, Uber named Eric Meyhofer to replace Levandowski as head of its Advanced Technologies Group. Meyhofer will continue to lead the team, an Uber spokeswoman said via email.

The New York Times reported Levandowski's exit earlier on Tuesday, citing an internal email sent to employees. (nyti.ms/2qD4X3h)

"Over the last few months Uber has provided significant evidence to the court to demonstrate that our self-driving technology has been built independently," Angela Padilla, Uber’s associate general counsel for employment and litigation, wrote in an email to employees, cited by the Times.

An Uber spokeswoman confirmed the letter's authenticity and said the company has urged Levandowski to "fully cooperate."

Waymo has said Levandowski received stock worth more than $250 million for joining Uber, along with his portion of the $680 million that Uber paid last year for Otto, the self-driving truck company he formed after leaving Google. That amount assumes certain targets would be met, and it was not clear how his firing would affect those payments.

A source familiar with the matter said Levandowski had not yet vested his Uber shares.

Levandowski Refusal


Levandowski, a top engineer on self-driving technology, has turned into a liability for Uber in court. The company has acknowledged that his refusal to testify has hurt its defense efforts. Uber has never denied that he took the Waymo documents.

Asked last month why Uber did not threaten to fire Levandowski to pressure him into turning over the documents, Uber attorney Arturo Gonzalez told Reuters, "We can fire him but we still don't get the documents."

Uber had argued that it was acceptable to sideline Levandowski by preventing him from working on Lidar technology, but not firing him. But U.S. District Court Judge William Alsup criticized the company, telling lawyers: "You keep on your payroll someone who took 14,000 documents and is liable to use them."

The judge theorized that Levandowski could have used Waymo's documents himself even if he did not turn them over to Uber.

"What prevented him from bringing a laptop to work every day and consulting the files?" Alsup asked Uber lawyers in April.

Uber has been hit by a string of departures of senior executives and other negative news. Earlier this year, Uber was caught using its technology to avoid government regulators. Chief Executive Officer Travis Kalanick was seen on video berating an Uber driver, and the company also faced accusations of sexual harassment that led to an internal probe led by former U.S. Attorney General Eric Holder.

The Holder report will be shown to the board this week, a source familiar with the matter said, adding that next week, Uber plans to speak with employees about it.


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Deceptively Quick, India's Economy Seen Staying Course As Global Pacesetter

By Rajesh Kumar Singh 
Reuters
May 31, 2017

India is set to hang onto its status as the world's fastest growing major economy thanks to stronger consumer demand, if data due out later on Wednesday matches economists expectations for a 7.1 percent year-on-year expansion in the March quarter.

Having completed three years in office last week, Prime Minister Narendra Modi could view the gross domestic product figures with some satisfaction after the doubts raised by his shock decision last November to scrap high-value banknotes in a move to flush out all the money Indians hide from the taxman.

That move pounded consumer demand. But the setback to an economy where most people are paid and buy what they need with cash appears to have been mercifully shortlived.

"The initial impact of demonetisation was not as strong as was feared," said Shilan Shah, an economist at Capital Economics in Singapore. "Consumer spending just got delayed, it didn't get abandoned."

The injection of new banknotes as well as robust demand generated by the traditional wedding season and people buying fridges and air conditioners to cope with a blistering heatwave have since led a rebound in consumer spending, which fuels more than half of India's economic growth.

The median forecast from 35 economists polled by Reuters put annual GDP growth INGDPQ=ECI for the January-March quarter at just tad faster than 7.0 percent posted in the previous quarter, but still ahead of the 6.9 percent expansion clocked by China during the same period.

Forecasts ranged from 6.5 to 7.8 percent.

The federal statistics office will release the figures at 1200 GMT.

A stronger growth outturn will support the Reserve Bank of India's (RBI) forecast of a V-shaped recovery from the cash clampdown. Analysts expect the RBI to keep interest rates on hold at its upcoming monetary policy review next month.

Good Omens, Lingering Doubts

India doesn't publish national figures on retail sales, but high-frequency indicators such as car sales, retail lending and goods imports show consumer spending has roared back to life.

Analysts still worry over India's uneven growth and ground realities, notably subdued private sector investment and a state banking sector laden with bad debt.

But monsoon rains arrived early in the country's south this week, raising prospects of bountiful harvests that will boost farm incomes. And with government pay hikes also in the works, the outlook for a sustained recovery looks good.

The expected introduction of a nationwide goods and services tax in July, replacing multiple state taxes, should also spur growth by making India an easier place to do business.

A stronger global economy has boosted demand for exports of Indian goods also. And the combination of buoyant external and domestic demand should underpin a recovery in the industrial sector and lift low capacity utilization at Indian factories.

Economists are reluctant, however, to take India's GDP figures at face value after a change in methodology two years back that transformed a sluggish economy into a world-beater overnight.

Shah reckons economic growth could be overstated by as much as 150 basis points. By his estimate, real economic growth is nearer 6 percent.

The latest GDP data could add fuel to the debate as it will rely on newly rebased indices for wholesale prices and industrial production, which analysts say will increase chances of the headline growth figure surprising on the upside.


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