Business

Analysis: For Tech CEOs, Not Attending White House Summit Is Greater Risk

Technology executives at odds with the Trump administration see a bigger problem than attending a White House brainstorming session Monday—not attending. Silicon Valley has been among the most vocal critics of President Donald Trump over his positions on issues such as climate change and immigration. Still, representatives from Apple Inc., Amazon.com Inc., Microsoft Corp. MSFT 0.14% and Alphabet Inc.’s Google, companies that have opposed his policies, are expected to make the cross-country trip to ensure their voices are heard. Also expected to attend are Intel Corp. Chief Executive Brian Krzanich, Oracle Corp. co-CEO Safra Katz, a member of Mr. Trump’s transition team, and Cisco Systems Corp. CSCO 0.16% Chief Executive Chuck Robbins. “If you don’t show up, I think that’s the worst scenario,” Apple Chief Executive Tim Cook said in early May, when asked about the company’s relationship to the White House during an interview with CNBC. “Because then you’re quiet and this doesn’t do your cause any good, or your point of view any good.” Communication between the White House and Silicon Valley, already strained by the president’s proposed ban on travel to the U.S. by people from six Muslim-majority countries, was shaken after the White House pulled the U.S. out of the Paris climate accord. Elon Musk, CEO of both Tesla Inc. TSLA -1.05% and Space Exploration Technologies Corp., announced after the move he was quitting his role on councils that advise the president. He had been among the most vocal and visible Silicon Valley contacts for the White House. A Tesla spokesman declined to comment. Salesforce.com CEO Marc Benioff, who tweeted his disappointment after the Paris decision, isn’t attending the Monday session because of a scheduling conflict that arose after the summit was rescheduled, a person familiar with the matter said. Others plan to attend despite the tensions. “You have to take a look at the landscape and see where you can find some common ground,” said Linda Moore, chief executive of Technet, a Washington-based lobbying group comprising U.S. technology companies and executives. Those areas include tax reform and workforce development, she said. Aaron Levie, CEO of the digital-storage company Box Inc., said in an interview last month the risk of the administration making decisions without hearing directly from the tech industry is too great. “It’s not a given that the policy decisions are going to be aligned with the long-term trends that I think at least the tech industry is witnessing on the front lines,” he said. Mr. Levie, along with Cisco chairman John Chambers and venture capitalist John Doerr, met in April with White House officials and members of Congress to discuss tech issues including education and privacy. “Everyone’s kind of got their own comfort level and their own desire of how much they want to engage,” said Ms. Moore. Mr. Cook, for example, spoke to the White House following both its immigration order and its exit from the Paris accord. Apple didn’t respond to requests for comment. In March, Mr. Benioff attended a White House roundtable on workforce development with Mr. Trump, German Chancellor Angela Merkel and other CEOs, during which he suggested the aspirational goal of creating five million apprenticeships by 2020. Earlier this week, Mr. Trump signed an executive order to reduce barriers to apprenticeships.

…which was awesome, and huge news!!  And yet, the dominantly liberal mainstream media swept it under the carpet almost immediately…..and instead continues their pathological obsession with liberal agenda-driven fake news nonsense like Comey testimonies, (already dispelled) so-called “collusion” by the Trump Campaign (and now Administration) with Russia…and on and on..  While the liberal media (i.e. NY Times, Washington Post, CNN, NPR/PBS, ABC, CBS, NBC, and of course the absolute worst..MSNBC..among others) focuses on bs like that which has NO bearing or impacts the lives of ordinary Americans, the President and a handful of his allies are actually getting work done they promised the voters they would.  It’s good to see these tech giants leading by example and putting their political differences aside and sitting down with our new administration to work on tech issues that affect all of us, and the tech industry.  The liberal media, Dems in Congress, and spineless establishment GOP House and Senate members could learn a thing or two from these corporate tech leaders.  Excellent!!    🙂

Verizon to Buy Straight Path in $3.1B Deal

Straight Path Communications said it agreed to be bought by No.1 U.S. wireless carrier Verizon Communications Inc for an enterprise value of about $3.1 billion. The $184 per share all-stock offer represents a discount of 17.8 percent to Straight Path’s close on Wednesday. The stock has surged nearly five-fold since April 7, a day before the company first received a takeover bid from AT&T Inc. Verizon will pay, on behalf of Straight Path, a termination fee of $38 million to AT&T, the company said.

Apple CEO Pledges $1 Billion Towards Creation of US Manufacturing Jobs

Apple CEO Tim Cook announced Wednesday that his company is investing $1 billion in the creation of US manufacturing jobs. Speaking to Mad Money host Jim Cramer on CNBC, Apple CEO Tim Cook announced that the company would be creating a $1 billion fund to promote advanced manufacturing jobs across America. “We’re announcing it today. So you’re the first person I’m telling,” said Cook to Jim Cramer on Wednesday. “Well, not the first person because we’ve talked to a company that we’re going to invest in already.” Apple will reportedly announce their first investment in May. Apple has created two million jobs in the US, but many of their computer components are manufactured overseas. During his campaign, President Donald Trump famously vowed to bring Apple’s production back to the US. “We’re going to get Apple Computer to build their damn computers and things in this country, instead of in other countries,” he said. “We gotta bring back the jobs from China, we gotta bring back the jobs from Japan, and all these countries that are ripping us off. And we’re gonna do that.”

Brick-and-Mortar Stores Are Shuttering at a Record Pace

American retailers are closing stores at a record pace this year as they feel the fallout from decades of overbuilding and the rise of online shopping. Just this past week, women’s apparel chain Bebe Stores Inc. said it would close its remaining 170 shops and sell only online, while teen retailer Rue21 Inc. announced plans to close about 400 of its 1,100 locations. “There is no reason to believe that this will abate at any point in the foreseeable future,” said Mark Cohen, the director of retail studies for Columbia Business School and a former executive at Sears Canada Inc. and other department stores. Through April 6, closings have been announced for 2,880 retail locations this year, including hundreds of locations being shut by national chains such as Payless ShoeSource Inc. and RadioShack Corp. That is more than twice as many closings as announced during the same period last year, according to Credit Suisse. Based on the pace so far, the brokerage estimates retailers will close more than 8,600 locations this year, which would eclipse the number of closings during the 2008 recession. At least 10 retailers, including apparel seller Limited Stores Co., electronics chain Hhgregg Inc. and sporting-goods chain Gander Mountain Co., have filed for bankruptcy protection so far this year. That compares with nine retailers that declared bankruptcy, with at least $50 million liabilities, for all of 2016. The seeds of the industry’s current turmoil date back nearly three decades, when retailers, in the throes of a consumer-buying spree and flush with easy money, rushed to open new stores. The land grab wasn’t unlike the housing boom that was also under way at that time. “Thousands of new doors opened and rents soared,” Richard Hayne, chief executive of Urban Outfitters Inc., told analysts last month. “This created a bubble, and like housing, that bubble has now burst.”

J.C. Penney Won’t Be Closing Stores Just Yet

Planned store closures have lured more shoppers than expected through J.C. Penney’s (JCP) doors. The struggling retailer confirmed to FOX Business Thursday evening it has pushed back planned liquidation processes at 138 stores in 41 states from April 17 to May 22. What’s more, those stores, which were set to close in mid-June, will now shutter on July 31. Since the announcement of the store closures last month, which represent about 14% of Penney’s overall store portfolio that produces about 5% of total annual sales, the impacted locations have seen better than expected sales and traffic, a spokesperson for the company explained. “Traffic typically increases in closing store locations for a variety of reasons, including curiosity, nostalgia and the lure of lower prices,” the spokesperson said. “It’s advantageous for the company to continue selling through spring and summer merchandise at current promotional levels by pushing liquidation back another month.” The decision to slim down its bricks-and-mortar portfolio is part of a previously-announced plan from February to jump start growth at the company and pivot focus to boosting sales and traffic on JCPenney’s e-commerce platforms. While the company saw double-digit sales growth online in the fourth quarter, sales at stores open at least a year – a key metric for the retail industry — slid 0.7%, which compared to a 4.1% bump during the same period the year prior. At the time of the announcement, CEO Marvin Ellison said JCPenney’s buy online, pick up in store initiatives have been effective but the company needs to better coordinate its overall online and in-store strategies. “We believe closing stores will allow us to adjust our business to effectively compete against the growing threat of online retailers,” Ellison said in February. “We believe the future winners in retail will be the companies that can create frictionless interaction between stores and e-commerce while leveraging physical locations to minimize growing operational costs of delivery.” Shares of JCPenney have seen a 27% drop so far this year, and a more than 40% plunge over the last year.

Fed Raises Rates as Labor Market, Inflation Fuel Confidence

As expected the Federal Reserve raised short-term interest rates by 0.25% and reiterated there will likely be two more increases from the central bank this year. Click here for analysis, market reaction and a press conference with Fed Chief Janet Yellen who detailed the Fed’s newest projections for the U.S. economy, the first since President Trump took office.

Bloomberg’s U.S. Consumer Comfort Index Highest It Has Been in a Decade

Bloomberg’s U.S. Consumer Comfort Index has reached its highest point in a decade following positive assessments about the economy and the buying climate, according to Bloomberg Markets. The consumer comfort index rose to 50.6 as of March 5, the highest it has been since March 2007, from 49.8. The index has surpassed 50 only six times since April 2002. A measure of the economy rose to 48.2, the highest since August 2001, from 46.8, while a measure of buying climate rose to 44.5, the highest since April 2002, from 43.7. The stock market has jumped to record highs and the job market has been particularly strong since President Trump’s inauguration, causing the consumer comfort index to rise. Respondents to the index view the buying climate as the most favorable it has been in 15 years, a sign that there might be an uptick in household spending after a slow start in 2017. Sentiment has been strong among Republicans as well as political independents, who were the most confident about the economy and the buying climate since July 2001. Republicans’ sentiment has surpassed that of the Democrats by the most since September 2013. Confidence among people in the South and Midwest, part-time employees, and married Americans rose. For part-time employees, they were the most confident since October 2015, while married Americans saw the highest levels of comfort in a decade. Confidence did, however, fall for people living in the West and Northeast.

More positive news!!   🙂