Trade tensions; BMW profits slump; Anadarko snubs Chevron - CNN

US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin said China reneged on previous commitments over the weekend, undermining progress towards a detailed trade agreement.

As of Friday, penalties on $200 billion of Chinese goods will be lifted to 25% from 10%. President Donald Trump has also warned that he could tax nearly all Chinese exports to the United States.

The big question for investors is whether a deal can be salvaged when Chinese officials arrive in Washington later this week. Beijing is still sending its top trade negotiator.

Stock markets in China stabilized Tuesday after a sharp sell-off on Monday. US markets were also able to recover most of their lost ground after a steep initial plunge.

S&P 500 and Dow futures were down roughly 0.4% on Tuesday. Fears appeared to be waning in Europe and Asia, where stocks were mixed.

2. BMW hammered: The German carmaker reported a sharp decline in profits and set aside funds to pay a potential EU antitrust fine.

BMW's first quarter profits fell 78% to € 589 million ($660 million), and its automotive division posted a loss.

The company said it had set aside € 1.4 billion ($1.6 billion) to pay fines resulting from an EU investigation into whether Germany carmakers colluded in holding back technology to reduce harmful vehicle emissions. BMW (BMWYY) has denied wrongdoing and says it will contest any fines.

The carmaker warned that business conditions are expected to remain volatile for the rest of the year, and it cited uncertainty over Brexit and international trade policies as risks. Shares dropped 1% in Frankfurt.

3. Anadarko snubs Chevron: Anadarko Petroleum (APC) says the revised offer it's received from Occidental Petroleum (OXY) is superior to a previously accepted bid from Chevron (CVX).

Occidental has bid $76 per share for Anadarko, $59 of which is cash. Chevron has until May 10 to make a counter offer, although that deadline could be extended.

Occidental was backed last week by Berkshire Hathaway's (BRKA) Warren Buffett, who invested $10 billion in the company to help finance its takeover of Anadarko.

The bidding war for Anadarko reflects an intense desire by US oil companies to acquire America's best shale assets. Occidental is already the No. 1 oil producer in the vast Permian Basin.

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4. Earnings and economics: Cinemark (CNK), Dean Foods (DF), Energizer (ENR), Marriot Vacations (VAC) and SeaWorld Entertainment (SEAS) will release earnings before the open.

Electronic Arts (EA), Lending Club (LC), Match Group (MTCH), Papa John's (PZZA), Sprint (S), TripAdvisor (TRIP) and Western Union (WU) will follow after the close.

Shares in Anheuser-Busch InBev (BUD) gained less than 1% in Brussels after the company reported first quarter revenue growth of 5.9%. The brewer said it had seen strong growth in Brazil and improvement in the United States.

5. Coming this week:
Tuesday — US JOLTS; Anheuser-Busch InBev (BUD) and Papa John's (PZZA) earnings
Wednesday — SALT Conference; GE (GE) annual meeting
Thursday — SALT Conference; China consumer price inflation; US jobless claims and trade data for March; Ford (F) annual meeting
Friday — US consumer price inflation; UK GDP; Marriott (MAR) earnings

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https://www.cnn.com/2019/05/07/investing/premarket-stocks-trading/index.html

2019-05-07 09:26:00Z
CAIiEO7hiayWfnsBna90mAOpurUqGQgEKhAIACoHCAowocv1CjCSptoCMPrTpgU

BMW Profit Slumps on Weaker Markets, $1.6 Billion Provision - Bloomberg

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1. BMW Profit Slumps on Weaker Markets, $1.6 Billion Provision  Bloomberg
2. BMW quarterly profit tumbles 78 percent, hit by 1.4 billion euro legal provision  Reuters
3. BMW Quarterly Profit Slumps on $1.6 Billion Antitrust Provision  Yahoo Finance
4. BMW profit falls 74 per cent as €1.4bn set aside for possible EU fine  Financial Times
5. BMW Q1 profit falls 78%, hit by €1.4bn legal provision  RTE.ie
6. View full coverage on Google News

https://www.bloomberg.com/news/articles/2019-05-07/bmw-first-quarter-profit-slumps-on-1-6-billion-fine-provision

2019-05-07 05:45:00Z
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Retailers struggle to keep CBD on shelves in Canada - CBC.ca

Retailers across Canada are struggling with a shortage of all cannabis, but there's one product they're especially desperate to keep on shelves: cannabidiol or CBD, a non-intoxicating extract vaunted for its purported health benefits.

The extract, most commonly sold as oil, has been promoted as a natural cure for pain, anxiety and insomnia, despite limited medical research. Many customers are coming in asking for it, especially first-time and older users, store owners say.

"I don't think the licensed producers really realized how popular CBD was, so there's none available, really,'' said Krystian Wetulani, founder of City Cannabis Co. in Vancouver.

"When something becomes available on the cannabis wholesale ordering sheet, everybody tries to get all that's available. It's like a race. That's one of the biggest opportunities we're facing in the legalized market.''

A customer tries a free sample of a pain cream that contains cannabidiol (CBD) for her arthritis at Minnesota Hempdropz in Maplewood, Minn., last year. (Jean Pieri/Pioneer Press via the Associated Press)

Companies are ramping up hemp growth to produce the trendy extract, but observers expect the shortage to persist until late this year. Meanwhile, scientists are working to separate the hype from reality when it comes to medical claims about the drug.

While licensed producers were preparing for legalization last year, they assumed most of the demand was going to be for cannabis high in THC, the intoxicating ingredient, said Khurram Malik, CEO of Biome Grow.

The buzz around CBD grew with the passage last year of a U.S. law known as the farm bill, which allows for the growing of hemp for the purposes of extracting cannabidiol, he said. Similar regulations came into effect in Canada in October.

But it was the U.S. law that drove up media coverage and social-media influencer chatter, Malik said. Kim Kardashian West recently posted on Instagram about her "CBD baby shower,'' where she invited guests to make cannabidiol-infused salt scrubs and body oil.

"Because of the farm bill passing, the sexiness or the in-vogue profile of CBD went through the roof,'' said Malik. "The demand side just blew up and caught everyone by surprise, on both sides of the border.''

Chef Travis Petersen adds THC distillate to geoduck crudo dishes during a multi-course cannabis-infused meal in Vancouver last year. The 34-year-old former MasterChef Canada contestant will then dose the forthcoming multi-course dinner with the appropriate amount of THC and CBD. (Darryl Dyck/The Canadian Press)

Extracting CBD from hemp, which is low-THC and high-CBD, is more affordable because the crop can be grown outdoors on a large scale under Canadian rules that are less restrictive than those for producing high-THC marijuana, Malik said.

Biome Grow has partnered with CBD Acres, which Malik said will supply his company with up to 20,000 kilograms of cannabidiol concentrate annually in order to serve Canadian and international markets.

The CBD shortage affects jurisdictions across Canada, said provincial distributors in British Columbia, Nova Scotia, and Newfoundland and Labrador.

"There has been a significant learning curve for licensed producers as they transition into supplying a new market,'' said B.C.'s Liquor Distribution Branch in a statement. "Licensed producers are working towards becoming more efficient, however many of their expansion projects have not yet been fully ramped up.''

'It has been a challenge'

The branch added it expects supply to increase in the second half of 2019 as expansions come online and more producers receive licences to enter the marketplace.

Beverley Ware, a spokesperson for the Nova Scotia Liquor Corp., said while it has "CBD-leaning'' products, it has not been able to consistently carry pure CBD oil due to the national shortage.

Customers looking for CBD products would prefer not to smoke them and don't want the added THC, said Darrell Smith, spokesperson for the Newfoundland and Labrador Liquor Corp.

"It has been a challenge to source a steady supply of these products as they are often reserved for the medical cannabis community,'' he said.

Research into health benefits limited

Despite the hype, research into the health benefits of cannabidiol has been fairly limited, said Dr. Gabriella Gobbi, a psychiatrist at McGill University who has studied the drug.

Gobbi's team published a study in the journal Pain last October that pinpointed the effective dose of CBD for safe relief of pain and anxiety. The U.S. Food and Drug Administration has also approved a CBD drug to treat children with severe epilepsy.

A worker adds cannabidiol (CBD) to a drink at a coffee shop in Fort Lauderdale, Fla., earlier this year. (Jennifer Lett/South Florida Sun-Sentinel via The Associated Press)

But more research is still needed, particularly on CBD's effects on anxiety and insomnia, Gobbi said.

Some patients who try it experience no effects and studies have also indicated a placebo effect in some people with anxiety, depression and pain, she added.

"Today there is a dominant culture of cannabis, a dominant culture of everything that is natural is good. This is why ... cannabidiol is so popular.''

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May 06, 2019 at 11:14PM

HBC reviewing strategic options for Lord & Taylor, including possible sale - BNNBloomberg.ca

Hudson’s Bay Co. (HBC.TO) said Monday it is reviewing strategic alternatives for its Lord & Taylor business including a possible sale.

“This review of strategic alternatives for Lord & Taylor is another example of how we are exploring options to position HBC for long-term success,” said HBC’s Chief Executive Officer Helena Foulkes in a release on Monday.

The Toronto-based retailer said it has hired U.S. investment bank PJ Solomon as its advisor for the review.

The announcement comes after HBC said in February it is shuttering its Home Outfitters business in Canada and may close as many as 20 Saks Off Fifth locations in the U.S. in an effort to increase profitability. HBC has already closed several Lord & Taylor locations, including the flagship Manhattan store on Fifth Avenue.

Lord & Taylor, the oldest department store in the U.S., was acquired by HBC in 2012. The Canadian retailer said in a statement that Lord & Taylor had $1.4 billion in annual revenue in 2018.

The Lord & Taylor chain has more than 40 stores in the northeastern and mid-Atlantic regions of the U.S., as well as an online business.

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May 06, 2019 at 08:46PM

Bausch Health shares jump after the company, formerly Valeant Pharmaceuticals, raises 2019 outlook - CNBC

Joseph Papa

Scott Mlyn | CNBC

Shares of Bausch Health, formerly known as Valeant Pharmaceuticals, jumped as much as 3% in premarket trading Monday after the company raised its 2019 outlook.

The drugmaker raised its full-year revenues from between $8.3 billion and $8.50 billion to a range of $8.35 billion and $8.55 billion. It raised its full-year earnings from between $3.35 billion and $3.5 billion to a range of $3.4 billion and $3.55 billion.

It also generated first-quarter revenues of $2.02 billion, up slightly from $2 billion a year ago. It narrowed its loss to $52 million from a loss of $2.58 billion a year earlier. The company did not provide a number for adjusted earnings, but Wall Street analysts were expecting 86 cents per share.

The company's Bausch & Lomb International business accounted for about 55% of its revenue in the first quarter, bringing in $1.118 billion compared with $1.103 billion a year ago.

Late last month, Bausch Health said its dermatology business, Ortho Dermatologics, received FDA approval for its DUOBRII lotion to treat plaque psoriasis. The drugmaker conducted two clinical trials, with 36% of patients in the first study and 45% in the second study seeing their skin clear up.

Bausch Health shares are up more than 26% this year. The stock has risen more than 30% over the last 12 months through Friday's close.

For more on investing in health-care innovation, click here to join CNBC at our Healthy Returns Summit in New York City on May 21.

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May 06, 2019 at 06:32PM

Kraft Heinz to restate earnings amid procurement misconduct - BNNBloomberg.ca

Kraft Heinz Co. (KHC.O), which has now received two subpoenas related to its procurement practices, plans to restate earnings and says it found evidence of employee misconduct that increased the cost of products sold.

The effects of the restatements for 2016, 2017 and part of 2018 for supplier rebates and other misstatements are expected to be less than 2 per cent in each year on adjusted earnings per share, the packaged-food giant said in a regulatory filing Monday.

The company said it didn’t find any evidence of misconduct by senior managers in its investigation, which is now complete. It delayed filing its annual report earlier this year because of the probe, and said it would do so as soon as possible. Kraft Heinz said it is taking remedial steps, including personnel actions and changing some internal controls, to prevent such misconduct in the future. Shareholder Warren Buffett, who helped finance the merger that created Kraft Heinz, said Monday that he’s confident in the company.

“During the course of a thorough internal investigation, some discrepancies were uncovered which affected the way earnings were calculated between periods,” Kraft Heinz said in the filing.

Shares of the company gained as much as 1.1 per cent in New York. The stock had dropped 24 per cent this year through the close of trading on Friday.

Kraft Heinz has been reeling since February, when it took a US$15.4 billion writedown, reported weaker-than-expected profit and disclosed a subpoena from the U.S. Securities and Exchange Commission. The news sent shares spiraling and last month, the company said that Chief Executive Officer Bernardo Hees, who has led the company since it was created in 2015 merger, will be replaced by Miguel Patricio, as of July.

Troubles are piling on at the owner of Jell-O and Velveeta: The company said in Monday’s filing that it had received another subpoena from the SEC on March 1, related to its goodwill assessment and requesting documents related to its procurement practices. It said it’s fully cooperating with the agency.

The adjustments to earnings before interest, taxes, depreciation and amortization, excluding some items, totaled about US$244 million, the company said in the filing. When reflected over the periods in question, they “are not quantitatively material to any prior year or quarter,” it said.

Buffett played a crucial role in the formation of Kraft Heinz, teaming up with 3G Capital to help create the merger of Kraft Foods Group Inc. and H.J. Heinz in 2015. 3G is known for more cost-cutting than building brands and it boosted profit margins by slashing expenses at Kraft Heinz. The company has been battered since a 2017 bid to buy Unilever collapsed.

In an interview Monday with CNBC, Buffett said he had been briefed earlier about the restatement issues.

“The company has my confidence,” Buffett said. “If we had just bought Heinz, it would have been a better investment.”

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May 07, 2019 at 12:29AM

Bank of Canada urges lenders to offer longer-term mortgages - The Globe and Mail