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Selasa, 04 Juni 2019

Fed's Powell, in dovish pivot, is prepared to respond if trade war escalates - Fox Business

Federal Reserve Chairman Jerome Powell said on Tuesday the U.S. central bank is watching how global trade developments are impacting the U.S. economic outlook and is prepared to act as necessary to sustain the near-record expansion.

“We do not know how or when these issues will be resolved. We are closely monitoring the implications of these developments for the U.S. economic outlook and, as always, we will act as appropriate to sustain the expansion, with a strong labor market and inflation near our symmetric 2 percent objective,” he said in a speech.

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Powell’s comments ahead of the “Conference on Monetary Strategy, Tools and Communications Practices” come in the midst of increased calls for interest rate cuts by the Fed.

The CME’s FedWatch Tool, which analyzes the probability of rate moves for upcoming Fed meetings, is currently predicting a 55.9 percent chance of a rate cut in July, with 49.7 percent of traders anticipating the benchmark federal funds rate will be moved into the 2 percent to 2.25 percent range. Only 13.6 percent of traders think interest rates will remain at the current range of 2.25 percent to 2.5 percent by September.

In his speech, Powell stressed that policymakers would respond if inflation remains persistently low, although he did not specify what actions the Fed would take. Core inflation currently remains below the Fed's 2 percent target, although it ticked up slightly in April.

“In this setting, a similar low-side surprise, if it were to persist, would bring us uncomfortably closer to the ELB,” he said, referring to the effective lower bound for interest rates. “My FOMC colleagues and I must — and do — take seriously the risk that inflation shortfalls that persist even in a robust economy could precipitate a difficult-to-arrest downward drift in inflation expectations.”

Despite the more-dovish pivot, however, Powell avoided any other specific issues relating to the current economic condition.

The Fed has not cut interest rates since 2008 when it lowered the interbank lending rate to 0.25 percent -- essentially zero -- in the aftermath of the financial crisis. Interest rates remained at that level until 2015, when the central bank began tightening once again. The Fed has hiked rates nine times since 2015, including four times last year.

During the last Federal Open Market Committee meeting, Powell told reporters that policymakers did not see a strong case for moving in either direction.

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"We do think our policy stance is appropriate right now," he said at the time.

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https://www.foxbusiness.com/economy/powell-in-dovish-pivot-says-fed-is-prepared-to-respond-if-trade-war-escalates

2019-06-04 15:43:49Z
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Powell says the Fed will 'act as appropriate to sustain the expansion' - CNBC

Federal Reserve Chairman Jerome Powell said the central bank is watching current economic developments and will do what it must to keep the near-record expansion going.

Financial markets have been nervous lately over an escalating trade war that has spread from China and now could include Mexico. At the same, government bond yields are behaving in a way that in the past has been a reliable recession indicator.

Powell began a speech Tuesday in Chicago by addressing "recent developments involving trade negotiations and other matters."

"We do not know how or when these issues will be resolved," he said in prepared remarks. "We are closely monitoring the implications of these developments for the U.S. economic outlook and, as always, we will act as appropriate to sustain the expansion, with a strong labor market and inflation near our symmetric 2 percent objective."

Powell's comments came at the "Conference on Monetary Strategy, Tools and Communications Practices," a kickoff for an examination the Fed is conducting this year about the tools it has to meet its goals as well as the way it is communicating its actions to the public.

He did not address any other specific issues relating to current conditions. Market are broadly expecting the policymaking Federal Open Market Committee to cut its benchmark rate twice before the end of the year in response to current conditions.

For his part, Powell has stuck to the position that the Fed remains data dependent. The most recent FOMC statement, from its May meeting, indicated that the committee is taking a patient stance toward policy changes at conditions evolve.

Looking down the road

In his speech Tuesday, Powell took a longer view, outlining the challenges the Fed faces ahead for when the next crisis hits. The current low rate environment leaves the Fed little room before it hits the zero lower bound, or the point where the Fed's nominal benchmark rate can't be lowered much more.

"In short, the proximity of interest rates to the ELB has become the preeminent monetary policy challenge of our time, tainting all manner of issues with ELB risk and imbuing many old challenges with greater significance," he said.

The Fed faces a problem with inflation, which has yet to sustain at the central bank's 2% goal. Powell said persistently low inflation could lead to "a difficult-to-arrest downward drift" in expectations.

At issue for the future are three main considerations: where current policy is enough to address inflation misses; if the Fed's toolkit of rate moves and asset purchases is enough to achieve the dual mandate of full employment and price stability, and how best to communicate policy to the public.

One consideration is whether the "dot plot" of individual FOMC members' rate projections is helping. Powell suggested that during times of stress, the closely followed "median dot" actually could become the "least likely outcome."

Powell said the tools used during the crisis — near-zero rates and asset purchases that took the balance sheet to more than $4.5 trillion — are likely to be deployed again.

"Perhaps it is time to retire the term 'unconventional' when referring to tools that were used in the crisis. We know that tools like these are likely to be needed in some form in future ELB spells, which we hope will be rare," he said.

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https://www.cnbc.com/2019/06/04/powell-says-the-fed-will-act-as-appropriate-to-sustain-the-expansion.html

2019-06-04 13:55:07Z
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CVS turning 1,500 stores into HealthHUB locations with less retail, more health care - USA TODAY

Nathan Bomey USA TODAY

Published 8:19 AM EDT Jun 4, 2019

Get ready for less retail floor space and more room for health care services at one of your local CVS stores.

CVS Health is poised to expand a concept store focused on health care to 1,500 locations by the end of 2021, the company said Tuesday.

The drugstore chain launched the concept store, called HealthHUB, in the Houston area earlier this year.

The premise stems from the company's effort to reduce its reliance on sales of retail goods and increase its commitment to health care services. The company recently closed 46 struggling stores as it competes with Amazon and other retail rivals for customers.

It's also reducing floor space for slow-selling items like greeting cards and adding space in hundreds of stores for teeth-straightening service SmileDirectClub.

At the HealthHUBs, more than 20% of the floor space is devoted to health care services like wellness and personalized care.

For example, HealthHUB stores have space for yoga classes and extra room for CVS Minute nurse practitioners to perform services such as phlebotomy, diabetic screening and sleep apnea assessment.

CVS CEO Larry Merlo told USA TODAY in November that he plans to shift more retail space toward health purposes.

The company announced Tuesday that the new HealthHUBs would roll out first in Houston, Atlanta, Philadelphia, southern New Jersey and Tampa.

See the list: CVS closing 46 struggling stores

Straighten your teeth: 'Hundreds' of CVS Pharmacy stores to get SmileDirectClub shops

"By bringing those services to help them better manage their chronic diseases, we can really increase their awareness, their engagement, the experience with those services and ultimately help them manage their own diseases and be healthier, which in turn lowers overall health care costs," CVS chief transformation officer Alan Lotvin told USA TODAY in February.

Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.

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https://www.usatoday.com/story/money/2019/06/04/cvs-health-healthhubs/1337100001/

2019-06-04 12:19:35Z
CAIiEMc9NqngWg1MVHnpaBATWpUqGQgEKhAIACoHCAowjsP7CjCSpPQCMPCg0wU

CVS announces further expansion into health care services - The Boston Globe

CVS leaders think the company can play a key role in this movement by making health care routine instead of something people think about only when they visit a doctor.

‘‘The ultimate goal is bring more health services into people’s communities where they can access them as part of their daily life,’’ Executive Vice President Dr. Alan Lotvin said.

But the drugstores may face questions about their motive, never mind competition from major doctor groups and hospital systems that have their own support staff working to keep patients healthy.

The management of chronic illnesses has become a big source of health care spending, noted Harvard researcher Dr. Ateev Mehrotra, who has studied retail clinic growth.

‘‘This is sort of the pot at the end of the rainbow that everyone wants to get to,’’ he said.

CVS Health, based in Woonsocket, Rhode Island, runs more than 9,800 retail locations nationally. Late last year, it added health insurance when it acquired one of the nation’s biggest insurers, Aetna, in a roughly $69 billion deal that is still being reviewed by a federal judge.

Soon after announcing that deal, CVS officials started talking about plans to provide more health care help to customers.

Aside from visits with dietitians, HealthHub stores also give customers a chance to get screened for eye problems caused by diabetes, talk to a pharmacist about their treatment plan or get help tracking their blood pressure.

The stores reduced space for things like seasonal merchandise in order to add community rooms that can be used for free chair yoga sessions or nutrition classes.

The company started testing the changes in Houston late last year and will add more to that market this year as well as expand to Atlanta, the Philadelphia area and Tampa. CVS officials say they expect to run 1,500 HealthHub stores by the end of 2021.

Separately, Walgreens has added primary care clinics to some of its stores in the Houston area. It’s also testing clinics in Kansas City that focus on older patients through a partnership with the insurer Humana. The drugstore chain wants to improve access to primary care for its customers, said Walgreens executive Dr. Pat Carroll.

‘‘We have an aging population,’’ he said. ‘‘It is difficult in many communities to actually find a primary care physician.’’

Both Mehrotra, the Harvard researcher, and Dr. Kevin Pho said drugstore services may make it easier for some patients to get help. But they said it is critical for a patient’s regular doctor to stay updated on all care, especially if the patient has a few conditions and takes several medications.

Pho, a New Hampshire-based physician, also worries that drugstores may use their health care services to drum up prescription business or sales in the rest of their store.

CVS is offering additional health care in stores many customers already visit routinely and is focused on putting those customers on ‘‘a path to better health,’’ Executive Vice President Kevin Hourican said.

Frequent CVS customer Grace Bennett said she thinks the expanded health care services are a ‘‘fantastic step.’’

The 28-year-old New Yorker has diabetes that led to eye surgery. She said screenings for that condition and other health care services available through the drugstores will make it easier for people to get help without having to juggle schedules or worry about finding an open appointment.

‘‘I think they’ll be helpful to a whole lot of people,’’ she said

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2019-06-04 11:14:37Z
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CVS to open 1,500 HealthHUB stores over next two years - CNBC

CVS will open 1,500 HealthHUB stores by the end of 2021, the company announced Tuesday ahead of its investor day.

The HealthHUBs are remodeled drugstores that focus more on health services and products and less on candy and greeting cards. CVS opened its first three HealthHUB locations in Houston in February. It plans to open more in Houston, Atlanta, Philadelphia, southern New Jersey and Tampa, Florida, by the end of the year.

"We're pleased with the customer feedback we've received on the HealthHUBs," CVS Pharmacy Kevin Hourican said in an interview. He said these stores have seen higher traffic in the MinuteClinics, increased sales in the front of the store and more prescription volumes.

HealthHUBs include an expanded health clinic, with a lab for blood testing and health screenings. There are also wellness rooms for yoga and seminars, dietitians and respiratory specialists in the HealthHUBs.

Alan Lotvin, CVS executive vice president of transformation, said the 50 stores CVS will add this year will include these same features, while the ones added next year and the year after may look slightly different as the company improves on the design. CVS may tweak the designs for different markets and store sizes. For example, Hourican said stores in the Northeast tend to be smaller than the ones in Texas, so the company will need to pare it down.

Like other retailers, CVS needs to figure out how to keep people coming into its stores, and health services gives consumers something they can't buy online.

The company in May said it decided to close 46 underperforming stores. Hourican said he does not anticipate "meaningful" store closures. However, he said 500 store leases come up for renewal every year and CVS will review those.

Executives also think the HealthHUBs will help advance CVS' vision for its $70 billion acquisition of health insurer Aetna. The combined company says it wants to keep its members healthier and lower its health-care expenses and that managing chronic conditions in its drugstores will help accomplish that.

Measuring progress on this front may take longer, Hourican said. The company will track how its members are engaging with the services in stores and whether that leads to behavior change, clinical outcomes and cost reductions.

"It really is measuring at each step along the way, are you getting what you expect to get," he said. "When you get the clinical outcomes you see the cost savings we modeled."

CVS' announcement comes as executives try to impress analysts and shareholders on their strategic vision at the company's investor day in New York on Tuesday. The company's stock price has slid 20% this year. Executives warned that 2019 would be challenging, between integrating Aetna, navigating regulatory pressure and shrinking profitability for filling prescription drugs.

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https://www.cnbc.com/2019/06/04/cvs-to-add-healthhub-stores-drugstore-announces-ahead-of-investor-day.html

2019-06-04 10:49:38Z
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Feds crank up antitrust heat on Big Tech - Axios

Broad U.S. antitrust action against Big Tech moved firmly from the speculative realm to the investigative mode in the last 72 hours, as both Congress and regulatory agencies appeared to be moving forward with inquiries.

The big picture: While the pressure on the likes of Google, Facebook, Amazon and Apple has been mounting for years, the one-two punch of a public Congressional investigation into their dominance and possible antitrust probes by regulators marks a major escalation in tensions.

Last year saw high-profile testimony by CEOs like Facebook's Mark Zuckerberg, but the action will now shift to more mundane yet substantial document and evidence gathering that would form the basis of court cases or settlements.

Driving the news: The House Judiciary Committee said Monday that it was launching a bipartisan investigation into whether big tech platforms are engaged in monopolistic practices.

A person familiar with the investigation said that, in addition to public hearings, the inquiry would include requesting documents from a wide range of companies.
That could allow the committee to receive information from small competitors of the tech giants who would otherwise be wary of testifying publicly, the person said.
"Given the growing tide of concentration and consolidation across our economy, it is vital that we investigate the current state of competition in digital markets and the health of the antitrust laws," said Rep. Jerrold Nadler (D-NY), the committee's chairman.
Tech stocks fell in Monday trading as the federal interest in the companies came into focus.

Between the lines: The investigation could help lawmakers develop a factual record to shape legislation overhauling the nation's antitrust laws, which reformers say are inadequate for reining in corporate power as it exists today.

The announcement followed reporting over the weekend and into Monday that the Justice Department and the Federal Trade Commission had split up the field of investigations into anti-competitive behavior by tech giants.

Why it matters: Of the many ways critics want to address concerns about Big Tech, antitrust action has always been among the most significant — although it was largely seen as the least likely route.

It could result in action as serious as the firms being broken up, but even if it doesn't, it could seriously distract the platforms' efforts to grow their main businesses and anticipate new waves of tech innovation. Microsoft learned this lesson the hard way after its antitrust fight with Washington two decades ago.

What we're watching: Congressional hearings on the issue will unfold in the coming months, and signs that DOJ and FTC are moving forward with formal investigations into the tech giants could leak out in the form of official inquiries sent to the companies or their competitors.

Our thought bubble: Once inquiries like this get started, they develop their own momentum even as they proceed at what feels like a leaden pace to tech insiders. These companies likely face years of entanglement.

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https://www.axios.com/google-facebook-amazon-apple-antitrust-investigations-91349658-684c-47c2-9ce3-ca9307d7cc59.html

2019-06-04 10:00:08Z
CAIiEG2sSuDdd7zgHh_VhqO98rsqGQgEKhAIACoHCAowysWECzCkqIEDMO-pgwY

The close: TSX slips as energy stocks drop with oil - The Globe and Mail

A flight to safe-haven assets pushed U.S. Treasury yields to their lowest since September 2017 on Monday, while gold prices jumped more than 1 per cent.

A gloomy economic outlook is prompting traders to increase bets that the U.S. Federal Reserve will cut interest rates sooner rather than later. Markets appeared to price in higher chances of recession and rate cuts by the Fed and other central banks.

Investors have also been seeking protection from market volatility as trade conflicts between the United States and its trading partners have deepened.

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Yields on U.S. two-year notes were on track for their biggest two-day fall since 2008, and U.S. benchmark 10-year Treasury yields earlier hit 2.071 per cent, their lowest since September 2017. German government bond yields fell to an all-time low.

“What the bond market is telling us is that all of these pressures put together create a likely economic slowdown which is pushing yields down,” said Eric Kuby, chief investment officer, North Star Investment Management Corp in Chicago.

Treasury yields briefly extended their decline following remarks from St. Louis Federal Reserve President James Bullard who said a U.S. rate cut may be “warranted soon” because of global trade tensions and weak U.S. inflation.

In addition to increasing tariffs on Chinese imports in recent weeks, the White House has hardened its stance toward other countries, including Mexico.

Factory activity slowed in the United States, Europe and Asia last month, while the escalating trade war between Washington and Beijing raised fears of a global economic downturn and heaped pressure on policymakers to step up support.

The U.S. dollar fell to a 4-1/2-month low earlier against the Japanese yen and a two-month low against the Swiss franc.

The dollar index fell 0.54 per cent, while the Japanese yen strengthened 0.37 per cent versus the greenback at 108.13 per dollar.

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Nonetheless, an index of global stocks mostly edged higher on Monday after a volatile May that wiped $3 trillion off global equities.

Canada’s main stock index slipped slightly on Monday, as energy stocks dropped with oil prices.

The Toronto Stock Exchange’s S&P/TSX composite index was unofficially down 21.60 points, or 0.13 per cent, at 16,016.89.

The materials sector, which includes precious and base metals miners, gained 3 per cent as gold prices rose to their highest in more than two months.

The energy sector reserved course and sat 1.4 per cent lower after oil prices retreated.

Hurting sentiment, though, was data that showed the downturn in Canada’s manufacturing sector deepened in May as the depressed state of global trade led to a further decline in production.

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On Wall Street on Monday, the three major U.S. stock indexes declined on Monday and Nasdaq confirmed it was in a correction, dragged down by Alphabet, Facebook and Amazon.com on fears the companies are the targets of U.S. government antitrust regulators.

The Dow Jones Industrial Average rose 4.74 points, or 0.02 per cent, to 24,819.78, the S&P 500 lost 7.74 points, or 0.28 per cent, to 2,744.32 and the Nasdaq Composite dropped 120.13 points, or 1.61 per cent, to 7,333.02.

“The concerns that the government is going to get involved and possibly break these companies up or impose fines on their operations is a major concern here,” said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC in New York.

The pan-European STOXX 600 index rose 0.39 per cent and MSCI’s gauge of stocks across the globe gained 0.28 per cent.

In commodities, spot gold added 1.4 per cent to $1,323.60 an ounce.

Oil fell on Monday as U.S. trade disputes with Mexico and China deepened concerns about weakening global crude demand, while a slump in equities also weighed on crude futures.

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Brent crude futures settled at $61.28 a barrel, losing 71 cents, or 1.2 per cent. U.S. West Texas Intermediate (WTI) crude ended 25 cents, or 0.5 per cent, lower at $53.25 a barrel.

Mexico said it would reject a U.S. idea to take in Central American asylum seekers if it is raised at talks this week with U.S. President Donald Trump’s administration, which is threatening the tariffs over immigration concerns.

The possibility of tariffs on Mexico comes on top of a drawn-out trade war between the United States and China that has bruised oil prices.

“Focus has shifted from the supply to the demand side as a U.S.-China trade agreement has proven elusive and as worries over the debilitating effects of tariffs on global economic growth have now shifted to Mexico,” Jim Ritterbusch of Ritterbusch and Associates said in a note.

A downturn on Wall Street, which crude prices sometimes follow, worsened losses in oil futures, analysts said.

Comments from Saudi Arabia, OPEC’s de facto leader, indicating that the Organization of the Petroleum Exporting Countries and its allies would continue working towards oil market stability in the second half of the year, helped limit Monday’s loses.

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Reuters

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June 03, 2019 at 04:25PM