Money

Amazon to buy Whole Foods in $13.7B deal

Amazon (AMZN) stormed into the world of food retail Friday with a stunning announcement it will acquire Whole Foods Market (WFM), a move that sent shares of industry mainstays sharply lower as many fear an imminent disruption of the way consumers shop for groceries will continue to pressure margins and potentially upend existing business models. The $475 billion e-commerce giant will snap up the struggling supermarket chain for $42 per share in an all-cash deal valued about $13.7 billion including debt. “Whole Foods Market has been satisfying, delighting and nourishing customers for nearly four decades – they’re doing an amazing job and we want that to continue,” said Amazon CEO Jeff Bezos in a statement. Under the deal, Whole Foods will continue to operate stores under its independent brand and the company’s CEO and founder, John Mackey will remain in his position. Mackey said the partnership allows the Austin, Texas-based food retailer to continue efforts to bring high-quality foods to its customers across America. The deal, subject to approval by regulators and Whole Foods shareholders, is expected to close in the second half of this year. News of the acquisition sent Amazon shares up nearly 3%, their biggest gain since January as Whole Foods leaped 27% in their biggest rally since 2009 to $42.35. At the same time, data from Dow Jones showed investors wiped out roughly $55 billion form the market value of other grocery names including Walmart (WMT), Target (TGT), Costco (COST) and Kroger (KR), which cut its full-year earnings guidance on Thursday, extended losses, falling 13% Friday. Whole Foods, largely credited with igniting a large-scale shift in consumer purchasing trends to fresh and sustainably-sourced food offerings, has long been a target of takeover speculation as it continues to face mounting pressure from longtime industry players including Walmart (WMT) and Kroger (KR) as they aggressively move into the fresh and organic food space. In the most recent quarter, Whole Foods booked adjusted earnings of 37 cents a share on revenue of $3.72 billion as sales at stores open at least a year fell 2.8% while transactions declined 3%. aimed at overhauling its purchasing program and category management while also accelerating

Car shoppers shelling out hundreds more in down payments

U.S. auto sales have moderated this year, but here’s a positive sign for dealerships: Consumers are spending hundreds of dollars more on down payments. Car buyers are digging deep to pay more money up front and lower their monthly payments, according to a new report from Edmunds, the car-shopping platform. Down payments on new cars nearly hit a record high in May, rising to an average of $3,801. That’s an increase of $233, or 6.5%, compared to May 2016. Used vehicles also attracted higher down payments. The average buyer paid an additional $93 up front, a jump of 3.8%. With interest rates and sticker prices climbing, the increase in down payments has helped buyers make up the difference. Edmunds also noted that shoppers have more confidence in a stronger economy, which has encouraged them to spend more for a car with extra bells and whistles. “In our increasing credit-based culture where consumers are willing to finance everything from cellphones to vacations, more money up front shows car buyers aren’t completely sacrificing practicality in order to get the cars they really want,” Edmunds Executive Director of Industry Analysis Jessica Caldwell said. Consumers have also cut their monthly payments by taking advantage of longer loan terms. The average loan for a new vehicle hit 69.1 months in May, marking a 6.6% increase over the last five years.

‘America First’ — certified

On Inauguration Day, President Trump declared: “From this day forward, it’s going to be only America first.” Since then, he has repeatedly committed to “delivering for the American worker” — the working-class voter who propelled him to the White House. The president recently backed up the rhetoric by signing a “Buy American, Hire American” executive order, directing federal agencies to implement his campaign promises and support U.S. workers in assigning infrastructure projects. But how will the government know which businesses buy and hire American? And do Americans even care? Surprisingly to some, the president’s patriotic pleas are not simply political, but actually reflect the public’s increasingly pro-American preferences. According to a newly-released Harvard-Harris poll, 65 percent of Americans approve of Mr. Trump’s “America First” philosophy. Even more — 74 percent — agree that the federal government should adopt a “Buy American, Hire American” policy. A landmark 2012 survey from the Boston Consulting Group found that 80 percent of Americans agree purchasing American-made goods shows patriotism. The issue of outsourcing unites Democrats and Republicans, who almost universally sympathize with U.S. workers and the businesses with a proven track record of bolstering local economies. As Scott Paul, president of the Alliance for American Manufacturing, puts it, “It’s something that an overwhelming majority of people, regardless of their political affiliation, agree with.” And are Americans willing to spend more to put America first? Resoundingly, yes. According to an Opinion Research Corporation poll conducted in April of this year, nearly 70 percent of Americans claim that supporting “America First” businesses is important to them. More than 80 percent of these Americans say that they would choose an “America First” product even if it “costs a little more.” So how do these consumers identify “America First” businesses? While the Trump administration’s “Buy American, Hire American” agenda symbolizes a shift in U.S. trade policy, the private sector must take up the mantle and implement “America First” policies through proper certification procedures. In other words, how does a patriotic business publicly differentiate itself from a competitor outsourcing labor or paying taxes overseas? Until recently, American consumers had a very difficult time identifying which businesses paid taxes to a foreign country or used Chinese and Indian workers. Likewise, U.S. businesses found it difficult to publicize their domestic-based tax practices and use of homegrown labor. While traditional “Made in the USA” labels reward manufacturers that make products domestically, they do not incentivize nonmanufacturers to hire Americans, source their materials and services from other U.S. businesses, locate themselves in America, and pay taxes to federal, state, and local governments. In other words, “Made in the U.SA.” labels only apply to a very specific sector of the economy, leaving out establishments like restaurants, law firms, accounting practices, and pet stores — to name just a few — whose patriotic business practices go unnoticed. Take your local bookstore. Even if the business sources all of its bookshelves and accounting services from U.S. companies, you might not even know about it. When most Americans vow to support patriotic establishments, this becomes a massive problem for customers looking for them and the businesses looking to meet demand. Fortunately, there is a solution. The “America First” certification program was recently introduced to help businesses publicize themselves and inform curious customers. The program certifies businesses that buy, hire, and source American by looking at five key metrics: People, products, places, sourcing, and taxation. This allows businesses large and small to demonstrate their commitment to American workers and products, while giving customers a method to easily identify who exactly buys and hires American. As Mr. Trump promotes an “America First” agenda, more and more businesses will emerge claiming to be patriotic to win over customers. Now, they can actually prove it.

Stocks Hit New Records After Rising for Sixth Straight Day

Stocks closed higher Thursday for a sixth straight day of gains, the longest winning streak since February. The Dow Jones Industrial Average rose 70.53 points, or 0.3 percent, to close at 21,082.95. That is forty points shy of the record closing high set on March 1. The broader S&P 500 index hit a record 2,4155.07 on a rise of 0.4 percent. The leading sectors were tech and consumer-discretionary. Shares of Best Buy rose 21% after the company reported better than expected results. The Nasdaq Composite Index rose 0.7 percent to a record 6,205.26.

🙂

Social Security Not Keeping up With Seniors’ Rising Costs

For the fifth year in a row, the 60 million people who depend on Social Security have had to settle for historically low increases. For the average recipient the adjustment adds up to a monthly increase of less than $4 a month. Meanwhile, older Americans report that their household budgets jumped substantially last year, despite the lack of growth in their Social Security benefits, according to a new survey by The Senior Citizens League (TSCL). “The gap between benefit growth and retiree costs was particularly pronounced due to rising prices of the most essential items in retirees’ budgets, — medical and food costs,” says Mary Johnson, TSCL’s Social Security and Medicare policy analyst. TSCL sent a letter this month to Congressional leaders calling upon them to enact legislation that would provide a modest boost to Social Security benefits. Johnson discussed with FOX Business these additional findings from the survey, and what you need to know to adjust your household budget. To read that exchange, click here.

Despite Record Collections, 52,062,499 Filers Paid No Income Taxes in 2014

In tax year 2014, according to a report published by the Internal Revenue Service, the federal government hauled in a then-record $1,377,797,136,000 in individual income taxes. Nonetheless, of the 148,606,578 individual income tax return filers that year, 52,062,499 (or 35 percent) filed what the IRS calls “nontaxable returns,” which means they paid no net individual income taxes. Among these 52,062,499 filers who did not pay income taxes in 2014, according to Table 3.3 in the report, were 31,129,405 filers who also received $90,276,007,000 in payments from the federal government for “refundable” tax credits. “In total, taxpayers claimed $105.6 billion in refundable tax credits,” said the IRS report. “Of this, $5.5 billion was applied against income taxes and $9.8 billion against all other taxes. The remaining $90.3 billion in refundable tax credits was refunded to taxpayers.” “Tax credits are used to offset taxes,” the report explains. “Certain tax credits are also refundable in that if the credit exceeds the total tax owed, the excess can be refunded to the taxpayer.” One example of a refundable tax credit is the “Earned Income Tax Credit.” “The Earned Income Tax Credit for 2014,” the IRS explains, “was a maximum of $496 for taxpayers with no qualifying children, $3,305 for one qualifying child, $5,460 for two qualifying children, and $6,143 for taxpayers with three or more qualifying children.” For a married couple filing jointly to be eligible for the EIC in 2014, said the IRS, “earned income and adjusted gross income had to be less than $43,941 for one child, $49,186 for two children and $52,427 for three children or more.” A married couple with two children earning $50,000 or more would not qualify for this refundable credit.

On this official tax day, just think..  35% of Americans pay no net income tax.  Now, just smile as you file.    🙂

Consumers Prices Dropped in March for First Time in 13 Months

Consumer prices dropped 0.3 percent in March, which is the largest single-month drop in over two years. A labor department release from Friday revealed that the Consumer Price Index (CPI) dropped 0.3 percent in the month of March, the largest drop since prices fell 0.6 percent in January 2015. This is the first monthly decline in consumer price in 13 months. According to the release, a decline in gasoline prices played a significant factor in the decline in consumer prices. The wireless telephone services industry, the auto industry, and the clothing industry all saw price decreases in March. Hourly wage increases, after adjusted for inflation, saw a 0.3 percent increase. Despite the drop, some economists remain skeptical. Ian Shepherdson, chief economist at Pantheon Macroeconomics Ltd., suggested that another month with a significant consumer price drop is unlikely. “One very soft month does not make a new trend, though, so we will be looking for a clear rebound in April,” he offered. ““Another month like March, though, and a June rate hike will become much less likely.” Some sectors saw price increases. In March, the indexes for motor vehicle insurance, medical care, tobacco, airline fares, and alcoholic beverages all increased.