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Stocks Lose Steam as Nerves Persist, Euro Dips

A gauge of world equities was little changed after giving up early gains on Thursday, continuing a pattern seen for the past several sessions, while the euro eased after the European Central Bank formally ended its bond purchasing scheme.

In the United States, the S&P and Nasdaq finished in the red while the Dow closed well off its session highs as cautious trade optimism faded.

Nervousness has heightened volatility in stocks recently, with a tendency for stocks to lose morning gains as the day wears on. 

In Beijing, a commerce ministry spokesman said China and the United States were in close contact over trade, and any U.S. trade delegation would be welcome to visit.  

Although signs of a trade thaw have been welcomed by investors, other worries have kept stocks from sustaining gains.

“It’s a market that’s been very nervous. Investors get excited in the morning and then their fears come back,” said Omar Aguilar, chief investment officer of equities at Charles Schwab Investment Management in San Francisco. 

“We need a catalyst to get us a more consistent trend — it could be good economic data or more clarity on the Fed’s intentions for next year or more certainty in U.S.-China. I don’t think it’s going to happen any time soon.”

Dow Jones rises while S&P 500 dips

The Dow Jones Industrial Average rose 70.11 points, or 0.29 percent, to 24,597.38, the S&P 500 lost 0.53 points, or 0.02 percent, to 2,650.54 and the Nasdaq Composite dropped 27.98 points, or 0.39 percent, to 7,070.33.

U.S. economic data showed jobless claims fell last week to near 49-year lows, while import prices dropped as the cost of petroleum products tumbled. Shares in Europe edged lower to snap a two-session winning streak, as concerns about Britain’s exit from the European Union and euro zone growth outweighed a budget compromise in Italy.

The pan-European STOXX 600 index lost 0.17 percent and MSCI’s gauge of stocks across the globe gained 0.05 percent.

Help from ECB to continue

Britain’s weakened prime minister, Theresa May, survived a late night no-confidence vote, and then said she did not expect a quick breakthrough in Brexit talks that would help get the deal through parliament. 

The ECB officially ended its post-crisis asset purchase program but promised to keep feeding stimulus into an economy struggling with an unexpected slowdown and political turmoil.

The euro and sterling were choppy on the Brexit uncertainty and in the wake of comments from ECB President Mario Draghi investors viewed as dovish following the policy announcement.

Dollar index slightly up 

The dollar index rose 0.02 percent, with the euro down 0.04 percent to $1.1363.

Sterling, rebounding from earlier declines, was last trading at $1.2662, up 0.26 percent on the day.

Oil prices were higher after data showed inventory declines in the United States and as investors began to expect the global oil market could have a deficit sooner than previously thought.

U.S. crude settled up 2.8 percent at $52.58 per barrel and Brent was last at $61.45, up 2.16 percent.

 

  

  

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Apple Deepens Austin Ties, Expands Operations East and West

Apple will build a $1 billion campus in Austin, Texas, break ground on smaller locations in Seattle, San Diego and Culver City, California, and over the next three years expand in Pittsburgh, New York and Colorado.

The tech giant said Thursday that the new campus in Austin, less than a mile from existing Apple facilities, will open with 5,000 positions in engineering, research and development, operations, finance, sales and customer support. The site, according to Apple, will have the capacity to eventually accommodate 15,000 employees.

The three other new locations will have more than 1,000 employees each.

Early this year, Apple said that it would make more than $30 billion in capital expenditures in the U.S. over the next five years. That, the company said in January, would create more than 20,000 new jobs at existing and new campuses that Apple planned to build.

Where U.S. companies open new facilities or plants has always had the potential for public and political backlash.

That potential has intensified under the Trump administration, which has pushed companies to keep more of their operations inside the country’s borders.

While CEO Tim Cook has steered mostly clear President Donald Trump’s ire, Apple did receive some push back three months ago from the White House.

Apple sent a letter to the U.S. trade representative warning that the burgeoning trade war with China and rising tariffs could force higher prices for U.S. consumers.

Trump in a tweet told Apple to start making its products in the U.S., and not China.

Apple uses a lot of facilities overseas to produce components and its products, including China.

Top tech executives from Google, Microsoft, IBM, Oracle and Qualcomm gathered at the White House earlier this month to discuss strained ties between the administration and the industry, and trade tensions with China. Cook was not among them, nor was Amazon’s Jeff Bezos.

There are already 6,000 Apple employees in Austin, its largest operation outside of company headquarters in Cupertino, California, where 37,000 people are employed.

“Apple has been a vital part of the Austin community for a quarter century, and we are thrilled that they are deepening their investment in our people and the city we love,” said Austin Mayor Steve Adler in a prepared statement Thursday.

Apple said nearly a year ago that it would begin canvassing the U.S. for another campus.

Cities offered incentives to lure the company, but Cook avoided a high-profile competition that pitted them against one another as Amazon did over the last year and a half.

Amazon, too, expands

Amazon announced in November after a 14-month search it had selected Long Island City, Queens, and Arlington, Virginia, as the joint winners. Each site will employ around 25,000 people.

Cities are eager to bring in more tech employers because companies like Apple and Amazon ladle out six-figure salaries to engineers and other skilled workers.

The infusion of thousands of new and highly paid residents can ripple through an economy, with those employees filling restaurants, theaters, buying property and paying taxes.

Annual pay will vary at the new locations, but Apple workers in Cupertino have an average annual salary of about $125,000, according to a report the company submitted to the city.

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Wall Street Gains on Better Signs in US-China Trade Talks

Wall Street stocks finished higher on Wednesday due to improved hopes for the US-China trade talks.

The Dow Jones Industrial Average added 0.6 percent at 24,527.27.

The broad-based S&P 500 advanced 0.5 percent to 2,651.07, while the tech-rich Nasdaq Composite Index jumped 1.0 percent to 7,098.31.

Wall Street stocks have been volatile in recent weeks in part due to unpredictable and ambiguous events connected to the Beijing-Washington trade negotiations.

The latest indicators have been more upbeat, with a Chinese Huawei executive granted bail in a Canadian court in a closely-watched legal case and confirmation from Commerce Secretary Wilbur Ross in a television interview that Beijing had offered to cut tariffs on autos imported from the United States and resume soybean purchases.

Unlike the last two sessions, there were no major gyrations lower on Wednesday. But stocks still finished well below their session highs, with the Dow falling about 300 points from its peak in the last three hours of trading.

Gainers included some equities that have been seen as vulnerable to a trade war with China. Boeing advanced 1.5 percent, Caterpillar 1.7 percent and Deere 0.8 percent.

Tech shares were also upward-bound, with Google parent Alphabet winning 1.1 percent, Amazon 1.2 percent and Netflix 3.6 percent.

Tencent Music, in its first session after going public, jumped 7.7 percent a day after the music streaming company raised $1.1 billion in an initial public offering.

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Sustainable Tree Farming Means Better Lives for Kenyan Farmers

Wood consumption — including logging and the production of charcoal — is a leading cause of forest degradation in Africa. In some of Kenya’s coastal regions, recurring droughts have made the problem even worse.  Now, farmers in those regions are planting trees, putting their once-barren land to use in a venture that enables them to earn a living and conserve the environment at the same time. 

At Be Sulubu Tezo, in Kilifi county, Kenya, Kanze Kahindi Mbogo tends to her tree farm. She thins out the trees whose wood is now strong enough for her to sell for home-building and making fences.  

The money she makes is for her six children. 

A better life

Kahindi says she has been able to educate her children, pay a couple of debts and do lots of other things. She adds she was also able to take one of her sons to college and right now he is a driver.

Before growing trees, putting food on the table was difficult in this land where droughts are common and crops often fail.

With the help of NGOs and entrepreneurs, farmers are learning how agroforestry can make them money and at the same time save the environment. One of those firms is Komaza, a Kenyan firm that is working with 14,000 farmers to plant drought-resistant trees for harvest, reducing the drive to deforest. 

Help with the harvest

“Farmers are able to nurture the seedlings into trees, and then the trees become fully grown trees ready to harvest,” said Allan Ongang’a, a manager at Komaza.  “Once they are ready for harvest we have the operations team from the forestry department that identify trees that are ready for harvest, agree with the farmers on a fair price, the trees are marked and harvested.”

The firm trains farmers on cultivation and selective harvesting.  

But not all farmers have the resources to plant a tree and wait for it to grow, so some farm subsistence crops among the trees.  Researchers say this arrangement counters the effects of climate change. 

Everybody benefits

“Trees end up absorbing carbon dioxide when they making their food and therefore essentially the trees are actually getting to bring carbon from the atmosphere into the tree stem and therefore on land,” explained researcher John Recha with the Climate Change Agriculture and Food Security Program, a private entity in Nairobi.. “That means there is the benefit of reducing greenhouse gas emission through more enhanced agroforestry systems.”

For these Kenyan farmers, environmentalism begins to make sense when it starts to translate into a sustainable income. 

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Malaysian Ex-PM Slapped with New Charge Over 1MDB Scandal

Former Malaysian Prime Minister Najib Razak was charged Wednesday with tampering with the final audit report into a defunct state investment fund, adding to a long list of corruption allegations against him since his ouster in May elections.

Najib was charged along with Arul Kanda Kandasamy, the former head of the 1MDB fund, which is being investigated in the U.S. and other countries for alleged cross-border embezzlement and money laundering.

Najib pleaded not guilty to abusing power to order the modification of the report in February 2016 before it was presented to the Public Accounts Committee, in order to protect himself from disciplinary and legal action. Kandasamy, who was detained overnight by anti-graft officials, pleaded not guilty to abetting Najib.

​The charges came after the auditor-general revealed last month that some details had been removed from the 1MDB report. Kandasamy led 1MDB from 2015 until he was terminated in June. The two men were released on bail, and face up to 20 years in prison if found guilty.

Najib set up 1MDB when he took power in 2009 to promote economic development, but the fund amassed billions in debts. U.S. investigators say Najib’s associates stole and laundered $4.5 billion from the fund, including some that landed in Najib’s bank account. 

Public anger over the scandal led to the defeat of Najib’s long-ruling coalition in May 9 elections and ushered in the first change of power since Malaysia gained independence from Britain in 1957.

The new government reopened the investigations stifled under Najib’s rule. Najib, his wife and several top-ranking former government officials have been charged with multiple counts of corruption, criminal breach of trust and money laundering. 

Najib, 65, has accused the new government of political vengeance.

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Avianca Brasil Airline Declares Bankruptcy

Cash-strapped Avianca Brasil, the country’s fourth-largest airline, on Tuesday sought bankruptcy protection from creditors but reassured passengers that flights will continue.

“Due to resistance from the lessors (of their aircraft) to reaching a friendly settlement, we have filed seeking protection from creditors, to protect clients and passengers,” a company statement said.

Operations are not expected to be affected and “passengers can have complete peace of mind to make reservations and buy tickets, since all sales will be honored and flights will be operating,” it said.

The airline has debts of almost 493 million reais ($127 million) with multiple creditors, the business daily Valor reported.

Avianca Brasil, a brand of Oceanair Linhas Aereas SA (Oceanair), is not part of the group Avianca Holdings S.A, based in Colombia.

But both are parts of a holding company led by the same investor, German Efromovich.

Brazilian media said the carrier is in debt to creditors including state oil giant Petrobras and Sao Paulo’s Guarulhos Airport.

Avianca Brasil serves domestic and international routes with 60 jets. The company is facing lawsuits for the return of 26 planes and 52 engines, Valor said.

The airline recorded net losses in the first half of the year of 175.6 million reais, up 24.4 percent from the same period last year.

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Experts: Millions Invested But Gold Mining ‘Under-Exploited’ in W. Africa

Mining companies have invested at least $5 billion towards gold exploration in West Africa in the last decade but significant reserves are under-exploited, mineral industry experts said on Tuesday.

Delegates at the Ecomof mining and petroleum forum in the Ivory Coast commercial capital Abidjan were told that more must be done to attract international investors to develop mining potential.

“Throughout West Africa there are interesting minerals, gold, iron, nickel, manganese among others,” said Kadjo Kouame, managing director of Sodemi, the Ivory Coast mining development company.

Ivory Coast and Ghana are among the world’s top cocoa producers but are now seeking to diversify their economies by mining precious metals and newly discovered reserves of oil.

“But there is a real job to do to attract investors and diversify projects, too focused on gold,” Kouame added.

Gold is currently attracting the most investment, according to figures shared at the forum, with West Africa now the world’s fourth-largest gold region.

Ghana is Africa’s second largest gold producer after South Africa.

Some 8 million ounces of gold were mined in West Africa 2016, according to figures from the World Trade Council supplied by Endeavour Mining. 

Between 2006 and 2019, new gold deposits of 79 million ounces were discovered in West Africa — the highest in the world. A third was located in Burkina Faso, followed by Ghana, Mali and Ivory Coast, the forum was told.

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EU Will ‘Follow Closely’ French Deficit after Macron Measures

EU economics affairs commissioner Pierre Moscovici on Tuesday said Brussels will keep close watch over France’s new spending plans, a day after President Emmanuel Macron unveiled new measures to quell violent protests.

“The European Commission will closely monitor the impact of the announcements made by President Macron on the French deficit and any financing arrangements,” Moscovici told AFP.

“We are in constant contact with the French authorities,” added Moscovici, who was attending a plenary session of European Parliament in Strasbourg.

Meeting the EU’s three percent deficit limit has been a centrepiece of Macron’s European strategy in order to win the trust of powerful Berlin and its backing for EU reforms.

Before the “yellow vests” protests, the 2019 public deficit was expected to reach 2.8 percent of gross domestic product (GDP), just below the threshold.

Among the potentially costly measures Macron announced on Monday was a 100 euro ($113) monthly increase in the minimum wage as of next year paid for by the government, not employers.

The 40-year-old centrist also announced he would roll back most of an unpopular increase in taxes on pensioners introduced by his government.

And he called on all businesses “that can afford it” to give employees a one-off “end of year bonus” which would be tax free.

The EU rules on public spending are “binding for everybody that is clear,” said senior German MEP Manfred Weber, when asked by reporters about France’s new expenditure.

But he added that “what we should not do as the European Union is intervene in domestic policies so when a government in Italy is presenting its budget it is an Italian budget and in France it is the same.”

Italy’s budget for 2019 was the first in history to be rejected by Brussels for breaking bloc rules on spending.

 

 

 

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Taiwan Reinforces Ban on Huawei Network Equipment

Taiwan is reinforcing its five-year-old ban on network equipment produced by Chinese companies Huawei Technologies and ZTE Corp. amid security concerns.

Officials sought over the weekend to reassure lawmakers and the public that such measures have been effective and the threat to the communications sector is minimal.

 

Huawei has established a presence in Taiwan, with its handsets among the top sellers. The company also sponsors a Christmas extravaganza in a Taipei suburb that features a giant Santa emblazoned with Huawei’s logo.

 

While several countries have similar bans in place, the risk for Taiwan is potentially greater since China claims the island as its own territory and threatens to use military force to bring it under its control. Back-doors that some allege Huawei has built into its products could give Beijing access to military and economic secrets or even to disable crucial infrastructure in the event of a conflict.

 

Taiwan has already accused China of meddling in last month’s local elections by spreading false news online.

 

On Monday, legislators called for extending a ban on Huawei to the financial industry, where it reportedly has sought business providing digital finance services.

 

Financial Supervisory Commission Chairman Wellington Koo was quoted by local media as saying the government would have to look into the legality of such a move.

 

Huawei, based in southern China’s Shenzhen, near Hong Kong, is the world’s largest supplier of network gear. ZTE is one of its rivals.

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Disney Again Makes History with Earning Above $7B for 2018

Walt Disney Studios is again ending the year on a high note, posting more than $7 billion in global box office earnings, thanks to hits such as “Black Panther” and “Avengers: Infinity War.”

“This is only the second time in history any studio has surpassed the $7 billion mark, after Disney’s own industry-record 2016 global gross of $7.6 billion,” the company said in a statement on Monday.

“The Studios’ estimated international box office gross through December 9 is an estimated $4.069 billion, marking our second biggest year and the third biggest in industry history,” it added.

Disney’s success comes as the studio is set to release “Mary Poppins Returns” on December 19, which is expected to top the box office during the holiday season.

​”To date, four of the top eight worldwide releases of the year are from The Walt Disney Studios, including the top two global and top three domestic releases,” the company said.

“Avengers: Infinity War,” made by Disney’s Marvel subsidiary, led the way, earning $2 billion alone. It is followed by superhero movie “Black Panther,” which earned $1.35 billion worldwide.

“Incredibles 2,” made by Pixar, another Disney subsidiary, earned $1.24 billion.

Other top box office earners for 2018 are “Ant-Man and The Wasp,” “Solo: A Star Wars Story,” and “Ralph Breaks the Internet,” which has held the number one spot at the North American box office for the third consecutive week.