Business

Hostess employees get a year’s worth of free Twinkies and Ding Dongs as a bonus

On January 31, Hostess Brands Inc. announced that not only would their employees receive monetary bonuses this year, but that they would also get a year’s worth of free baked goods! After enacting tax legislation, Hostess will be rewarding its 1,036 bakery and corporate employees bonuses of $750 in cash, a 401(k) contribution of $500, and a year’s worth of free product. “The recent tax reform changes have given us the opportunity to review our benefit and compensation structure with an eye toward further investing in our workforce — our extraordinary team of employees who have and continue to help make Hostess so successful,” said executive chairman C. Dean Metropoulos in a press release by the baked goods brand. “As we have done in the past, the company’s management and board take great pleasure in sharing the company’s success with our employees.” No, employees will not have to fill their cars with a year’s worth of Twinkies and Ding Dongs. On a weekly basis, a representative from each bakery location will choose a “product of the week” for the bakery and all eligible employees will be able to take home one multi-pack of the chosen item every week for an entire year.

🙂

U.S. Service Sector Hits 13-Year High

The U.S. service sector picked up momentum in January, reversing a slowdown at the end of 2017. The Institute for Supply Management on Monday said its nonmanufacturing index rose by more than four points to 59.9 in January, a far stronger reading than the 56.6 expected by economists. In December, the index slipped to 55.9. January’s figure is the highest in 13 years. A reading above 50 indicates that non-manufacturing business is expanding, while a reading below signals contraction. The survey tracks the performance of service-oriented companies, such as banks and restaurants, as well as real estate and construction. Fifteen of the 18 business sectors tracked by ISM experienced growth in January. ISM’s gauge of non-manufacturing employment rose to an all-time high of 61.6, up from 56.3 in December. Its index of new orders surged 8.2 percentage points to 62.7. The survey shows that the economy is off to a strong start in 2018.

Indeed!!   🙂

Comcast hopes for a TV windfall from Super Bowl, Olympics

Comcast’s NBC is airing both the Super Bowl and the Olympics in February, a double-whammy sports extravaganza that the company expects to yield $1.4 billion in ad sales, helping it justify the hefty price it’s paying for both events. NBC is banking heavily on these sports events since traditional TV ratings have slumped in recent years. Live sports are marquee TV events that draw most of the largest TV audiences, but even those ratings have declined. More Americans are dumping their cable packages — Comcast lost 33,000 video customers in the fourth quarter and 151,000 for all of 2017 — and advertisers are following consumers to their phones. Spending on U.S. TV ads is expected to grow an anemic 0.4 percent this year, according to eMarketer. In the October-December quarter, NBCUniversal’s broadcast TV ad revenue fell 6.5 percent, after a boost in 2016 from election ads. As it adapts to a slowing TV market, NBC is continuing some digital efforts from Rio and expanding others to meet viewers wherever they are — whether in front of a TV or not. The Super Bowl reaches more than 100 million people in the U.S., outstripping every other TV event. It’s the most expensive ad time on TV. This year’s Super Bowl is Feb. 4 and follows a two-year slump in regular-season NFL ratings, according to ESPN . But NBC has said it is not worried about a lack of interest. The game is an event that “transcends sport and even the game itself,” Dan Lovinger, an NBC Sports ad-sales executive, said in January, about three weeks before the game. NBC said then that it had nearly sold out Super Bowl ad spots and that on average, companies are paying more than $5 million for 30-second ads during the game. Kantar Media expects rates slightly higher than last year’s $5.05 million. Fox aired the Super Bowl in 2017, and said it had $500 million in ad revenues for the day. NBC has predicted about $500 million for the game and associated events this year. NBC also makes money from ads during events before and after the game and a special episode that day of its hit drama, “This is Us.” For the first time, it’s selling ads for the game that will only appear on its app or website. NBC is paying $963 million for the broadcast rights to the Winter Olympics in Pyeongchang, South Korea, which follow a Summer Olympics in Rio two years ago that disappointed in some ways. NBC ruled the airwaves during the Rio Games, besting other networks, and raked in $250 million in profit. But ratings for the prime-time broadcast declined compared to the London Olympics in 2012, so NBC had to give advertisers some extra ad slots to make up for it. This time around, NBC will sell ads for this Olympics based on total viewership, counting cable and digital viewers as well as those who tune into NBC proper. That gives them more leverage with advertisers, said Brian Wieser, an ad analyst for Pivotal Research Group. NBC expects to sell more than $900 million worth of ads for the Olympics, which it says would be the highest ever for a Winter Games. (Summer Games are more popular.) The company is offering more hours of programming this year, both on TV and online, than it did for the Sochi Games in 2014. Past Olympics have been criticized by fans for tape-delayed events. This year, NBC will air its nightly prime-time broadcast simultaneously across the country. That means the West Coast evening broadcast will start early, at 5 p.m.

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Senate confirms Jerome Powell as Fed chairman in 85-12 vote

Senators delivered a show of confidence in Jerome Powell, President Trump’s pick for chairman of the Federal Reserve System, voting overwhelmingly Tuesday to confirm him to the position. Mr. Powell, who’s been part of the Fed’s board of governors, will replace Janet Yellen, whom Mr. Trump declined to nominate for a second term. As chairman, Mr. Powell will be the most important voice in deciding how the Federal Reserve moves forward with the economy appearing to be humming yet again, even as banks chafe against restrictions imposed in the wake of the 2008 Wall Street collapse. Tuesday’s 85-12 vote saw just four Republicans and eight members of the Democratic Caucus vote against Mr. Powell, who had enjoyed bipartisan support before. “He has served as a steady voice and thoughtful leader,” Majority Leader Mitch McConnell said in urging his confirmation. The U.S. Chamber of Commerce called Mr. Powell the “right man at the right time.” The Federal Reserve is an independent government agency charged with keeping inflation in check and supporting job growth. It took on an outsized role in the Wall Street collapse, sparking criticism from some quarters that it had overstepped. More recently the Fed has raised some key interest rates, hoping to keep the economy growing without overheating. Mr. Trump had criticized Ms. Yellen’s performance during the presidential campaign, but in office he changed his tone, even calling her tenure “excellent.” But he did not give her a second term, making her the first chair in decades to be ousted after one four-year period. Her predecessor, Ben Bernanke, served for two terms, and before that Alan Greenspan served for nearly two decades.

Apple CEO: Trump Tax Plan ‘Will Result in Job Creation and a Faster Growing Economy’

Apple CEO Tim Cook said in a recent interview that President Trump’s tax plan would result in a faster-growing economy and greater job creation. In an interview with ABC News, Cook discussed a number of recent announcements by Apple, including their plan to invest $350 billion in the U.S. economy over the next five years and how President Trump’s tax plan will help the U.S. economy. Cook refused to “take a position” on how the new tax plan will affect individual Americans but commented on the corporate tax saying, “I do believe the corporate side will result in job creation and a faster growing economy.” Cook added that under Obama’s tax plan, the $38 billion tax payment the company plans to make as part of repatriating offshore cash would not have been paid. “I hope — I have that faith — that it will be used for great purpose for the country,” said Cook, “whether that’s infrastructure or education, or what have you, that will further supply jobs in the U.S.” Cook criticised the Obama-era tax plans saying that he “never thought” that the old tax system was “good for the United States.” Cook stated that he believed the harsh tax restrictions forced “people to invest elsewhere instead of within the country.” Cook also believes that a company like Apple could only have been founded in America and they have a responsibility to give back to the country, “one of the ways to do that is to create jobs,” said Cook. Cook also discussed the company’s decision to pay employees $2500 in stock grants, “We’re one of the few — we’re probably the only company of our size where every person is an owner in the company,” Cook said. “… Instead of a onetime kind of bonus, we wanted to do something that lasts a longer period of time.” Apple will reportedly be focusing on three areas in the future: direct employment by Apple, spending and investment with U.S. suppliers and manufacturers, and helping to grow the thriving app-store economy. “We believe deeply in the power of American ingenuity,” said Cook, “and we are focusing our investments in areas where we can have a direct impact on job creation and job preparedness. We have a deep sense of responsibility to give back to our country and the people who help make our success possible,” Cook said in a press release.

Major kudos to Tim Cook and Apple for this breathtaking investment in our economy.  Wow!!     🙂

Dow surges 322 points, closes above 26,000 for first time

The Dow closed above 26,000 for the first time in its history, as bank earnings, Boeing (BA) and IBM (IBM) drove the blue-chip index higher Wednesday. The Dow Jones Industrial Average surged 322 points to 26,115. The S&P 500 and Nasdaq Composite also hit all-time highs. The S&P 500 advanced 26 points to 2,802. The Nasdaq gained 74 points to 7,298. An early rally Tuesday morning pushed the Dow past 26,000, clinching the fastest 1,000-point climb for the Dow. Although Wall Street pared its gains later in the session, the rally picked back up a day later. Brad McMillan, chief investment officer for Commonwealth Financial Network, said the brief pullback after the Dow first cracked 26,000 on Tuesday was a healthy sign for the market. “With the economy growing at a healthy rate, with corporate earnings rising, and with the Fed still stimulating, there is simply no trigger for a pullback,” McMillan wrote in a note to clients. “Even if we did get a pullback, as we did in early 2016, it would be unlikely to last, and for the same reasons.” On Wednesday, Boeing jumped more than 4% on news that the aircraft maker will partner with automotive supplier Adient (ADNT) to create an exclusive supplier of high-end aircraft seats. Shares of IBM, another Dow component, rose about 3% after analysts at Barclays (BCS) upgraded the stock to overweight from underweight. UnitedHealth (UNH) also continued to march higher, with shares up 2.4%. The health insurer on Tuesday beat Wall Street’s expectations for fourth-quarter earnings and raised its outlook for 2018, citing federal tax reform.

More great economic news!!    🙂

Apple announces plans to repatriate billions in overseas cash, says it will ‘contribute’ $350 billion to the US economy over the next 5 years

Apple on Wednesday made a slew of announcements about its investment in and contribution to the U.S. economy. The headline from Apple is that it will “contribute” $350 billion in the U.S. economy over the next five years, although it’s unclear exactly how the company came to that number. But the company promised to create 20,000 new jobs and a new campus thanks, in part, to the prospect of tax reform. It anticipates a $38 billion tax bill for repatriated cash, as a result of the new tax bill. This implies it will bring back virtually all of its $250 billion in overseas cash. Apple also said it would spend over $30 billion in capital expenditures over the next five years. About $10 billion in capital expenditures will be investments in U.S. data centers, the company said. Apple also says it will spend $5 billion as part of an innovation fund, up from the $1 billion it previously announced CNBC’s “Mad Money.” The job creation will focus on direct employment, but also suppliers and its app business, which it had already planned to grow substantially. The new campus will focus on customer support. The announcement raises the bar for the world’s most valuable company — now a huge driver of the economy — to continue its dominance and growth in the wake of political pressure on big tech companies. The plan calls for Apple to keep up 2018’s $55 billion spending rate with domestic suppliers and manufacturers. “We have a deep sense of responsibility to give back to our country and the people who help make our success possible,” chief executive Tim Cook said in a statement. In 2016, then president-elect Donald Trump publicly called out Apple’s reliance on its Chinese supply chain, telling The New York Times that he would “get Apple to build a big plant in the United States, or many big plants in the United States.” Wednesday’s announcement indicates that Apple will still have hundreds of billions of dollars in cash. It could spend that money on buybacks, dividends or acquisitions or moonshot projects. Apple shares were up about half a percent after the announcement, adding about $5.6 billion to the company’s market capitalization after the stock opened Wednesday’s trading session down 0.3 percent. Click here to see the full release.