Real Estate Daily News Buzz is designed to give news snippets to readers that our (yet to be award winning) editors thought you could use to start your day. They come from various business perspectives, real estate, government, the Fed, local news, and the stock markets to save you time. Here you will find the headlines and what the news buzz of the day will be.
Tuesday, the Dow Jones Industrial average lost 190.48 points, or 1%, to 18,041.54. The Standard & Poor’s 500 index gave up 21.86 points, also 1%, to 2,104.20 and the NASDAQ composite fell 56.61 points, or 1.1, to 5,032.75.
Benchmark U.S. crude fell $1.69 to close at $58.03 a barrel in New York. Brent crude, a benchmark for international oil used by many U.S. refineries, fell $1.80 to close at $63.72 in London. Wholesale gasoline fell 5.6 cents to close at $1.998 a gallon. Heating oil fell 5.3 cents to close at $1.900 a gallon. Natural gas fell 6.5 cents to close at $2.822 per 1,000 cubic feet.
More Americans bought new homes in April — evidence that the stronger job market is powering the housing sector. The Commerce Department said Tuesday that new-home sales climbed 6.8 per cent last month to a seasonally adjusted annual rate of 517,000. Sales recovered from a 10 per cent dip in March to an annual pace of 484,000. The gains point to the positive momentum created by robust hiring over the past year. Employers have added more than 3 million jobs as the unemployment rate has steadily dropped to 5.4 per cent. Those new paychecks are now starting to trickle into the real estate sector, as more people are shopping for homes. (US News)
Chinese shares marched higher in yet another session today, after the country announced over the weekend it would would allow funds domiciled in Hong Kong and China to be sold in each other's market starting July 1. China also said it would slash duties on some imported goods in a bid to boost consumer spending at home. The Shanghai Composite rose 2% to 4,910.90, taking its six-day rally to over 14%, while Hang Seng climbed 0.9% to 28,250.
Greece has threatened to default on its loan repayments again, saying it would be unable to meet pension and wage bills in June and also reimburse the IMF without a bailout deal with creditors. "This money will not be given and is not there to be given," Nikos Voutsis, the interior minister, told the Greek television station Mega. "We won’t accept blackmail that says it's either liquidity with a memorandum or bankruptcy." Euro -0.7% to $1.0899.
It's "misleading" to give so much importance to the Fed's first interest rate hike, since the process of returning to a more normal level will take a few years, Fed Vice-Chair Stanley Fischer declared at a conference in Israel. Any upcoming hike will be determined by data and not by date, he added. In a highly anticipated speech on Friday, Janet Yellen made clear the central bank was poised to raise interest rates this year, but also stressed that economic data would determine the tightening process.
Following the upbeat comments from the Fed and Friday's improved inflation data, the dollar rose against a basket of currencies on Tuesday, hitting an eight-year high of 122.76 against the yen. But whether the U.S. currency is ready for an attack on parity with the euro in the weeks ahead will largely depend on U.S. economic data improving after a disappointing Q1. Today's durable goods orders will be among the latest U.S. health indicators. U.S dollar index +0.7% to 97.15.
Charter Communications has agreed to buy Time Warner Cable (NYSE:TWC) for $55B, finally clinching an agreement after its early 2014 bid was rejected and Comcast (NASDAQ:CMCSA) abandoned its offer. Charter (NASDAQ:CHTR) will pay $195.71 a share - 14% above Time Warner Cable's May 22 close - with $100 in cash and the remainder in its own stock according to a statement Tuesday. Bright House Networks, a smaller cable company Charter previously agreed to buy, will also be merged into the combined entity. TWC +9.1% premarket. The deal comes a month after Comcast, the country’s largest cable provider and owner of NBCUniversal, walked away from a $45.2 billion bid for Time Warner Cable, the No. 2 cable company, after intense pressure from regulators. The government worried that the company would be able to undermine increasingly popular online video competitors like Netflix because the bigger Comcast would have more than half the country’s high-speed Internet customers.
Bowing to regulatory pressure, Amazon (NASDAQ:AMZN) has begun booking European revenue in the countries in which sales were recorded, rather than funneling it through the low-tax haven of Luxembourg. The change, which could have a big long-term effect on Amazon's EU income tax payments, went into effect on May 1. The company's move could be a sign of things to come: Apple (NASDAQ:AAPL), Google (GOOG, GOOGL), Microsoft (NASDAQ:MSFT), Starbucks (NASDAQ:SBUX), and a slew of other U.S. multinationals have also come under fire for their use of tax havens to cut their EU tax bills.
Amazon is also prepping Handmade, a marketplace for handcrafted goods that takes direct aim at market leader ETSY. Etsy sellers have reportedly received invites offering a sneak peek at Handmade, directing them to a questionnaire regarding which products they offer. Amazon's (AMZN) huge customer base and fulfillment infrastructure could quickly make it a thorn in Etsy's side, however, Etsy's cult following and large network effect of craft/vintage goods buyers and sellers arguably make it tough to dislodge.
Samsung Group has announced the merger of two major affiliates, as it reconstructs itself to smooth the path for management succession within the founding Lee family. The all stock deal, approved by the boards of both firms, would see Samsung's de facto holding company Cheil Industries acquire building firm Samsung C&T, which has a key stake in Samsung Electronics (OTC:SSNLF), for 8.9T won ($8.1B).
With the scope of his design work having gradually expanded over the last few years, Apple's (AAPL) Jony Ive will now hold the title of Chief Design Officer, CEO Tim Cook said in a company memo. As a result of the change, Ive will hand over "day-to-day managerial responsibilities" for industrial and UI design to executives Richard Howarth and Alan Dye.
Twitter "has been engaged in an ongoing series" of discussions to acquire popular mobile reader app Flipboard in a $1B+ all-stock deal, Re/code reports, although the talks appear to have stalled. Flipboard, whose apps provide content from dozens of sources (including Twitter (NYSE:TWTR)) in a mobile-friendly magazine format, was valued at $800M in a 2013 funding round.
The mystery in Hong Kong continues after Goldin Properties surged as much as 52% today, after plunging more than 60% this past Thursday. CFO Kenas Chan said previously the company had no explanation for the decline. Despite the confusion, the stock has skyrocketed over 350% this year, the steepest rally on the Hang Seng Composite Index.
AstraZeneca's goal of topping $45B in revenue by 2023 has been dealt a severe blow by a problem with an experimental psoriasis drug that the company had viewed as a potential billion-dollar plus seller. Amgen (NASDAQ:AMGN), its partner on the project, announced late on Friday it was ending a collaboration to develop brodalumab after suicidal thoughts were observed in patients taking the medicine. AZN -1.6%; AMGN -0.8% premarket.
Ryanair said full-year profits surged 66% in the year to March as passenger numbers grew almost 11% to 90M on improved service and lower fares. Net income came in at €867M from €523M a year earlier, while sales increased 12% to €5.7B. Europe's largest budget airline said it also expects to carry more than 100M passengers for the first time this year and anticipates net profit of €940M-€970M. Ryanair (NASDAQ:RYAAY) shares are up 5.3% in London.
Fiat Chrysler Automobiles CEO Sergio Marchionne made a direct approach to General Motors (NYSE:GM) about a merger last March, according to NYT. An e-mail from the FCAU CEO pitched the strategic advantages of a combination of the two auto heavyweights, but was rebuffed by GM. In the last month, Marchionne made a highly entertaining trip to Silicon Valley and has been backing the company's 25-page thesis titled "Confessions of a Capital Junkie" in which it highlights the benefits of automobile industry consolidation.
Meanwhile, Justice Department investigators have identified criminal wrongdoing in General Motors' (GM) failure to disclose its defective ignition switch tied to at least 104 deaths and are negotiating what is expected to be a record penalty, NYT reports. A final settlement number is still being negotiated but is expected to exceed the $1.2B paid last year by Toyota (NYSE:TM) for concealing unintended acceleration problems in its vehicles.
Foot Locker Inc. reported a better-than-expected 14% increase in profit in its first quarter amid continuing sales growth. The company posted earnings of $184 million for the quarter ended May 2, up from $162 million last year. Sales increased 2.6% to $1.92 billion. Same-store sales increased 7.8%. The retailer’s gross margin rate improved to 35% of sales from 34.6% a year ago, while the selling, general, and administrative expense rate improved to 18% of sales from 19%. As of May 2, 2015, Foot Locker operated 3,419 stores in 23 countries in North America, Europe, Australia, and New Zealand.In addition, 55 franchised Foot Locker stores were operating in the Middle East and South Korea, as well as 27 franchised Runners Point and Sidestep stores in Germany and Switzerland.
Hewlett-Packard announced Thursday it was selling a 51% stake in its China-based server business, creating a joint venture with Tsinghua Holdings that will be a sector leader in China. The tech giant said it would sell the stake for $2.3 billion, creating a new business called H3C worth $4.5 billion that would be the leader in China in computer servers, storage and technology services. The deal brings together HP with the investment arm of China's Tsinghua University in a company with some 8,000 employees and $3.1 billion in annual revenue. HP said the deal would not affect its existing China-based enterprise services, personal computer business and other operations, which would remain 100% owned by the California group.
Fearing defeat at the Supreme Court, more than a dozen members of Congress from California and Arizona introduced legislation Friday to preserve the congressional boundaries set by independent redistricting commissions. HR 2501 specifically bars the legislatures in six states, including Arizona, from redrawing the lines ahead of the 2020 decennial census. That preserves the current political balance of power of each state’s congressional delegation. The move comes as the high court could rule as early as Monday on a challenge to the authority of the Arizona Independent Redistricting Commission to craft congressional districts. (AZ Central)
Taco Bell and Pizza Hut say they’re getting rid of artificial colors and flavors, making them the latest big food companies scrambling to distance themselves from ingredients people might find unappetizing. Instead of “black pepper flavor,” for instance, Taco Bell will start using actual black pepper in its seasoned beef, says Liz Matthews, the chain’s chief food innovation officer. The Mexican-style chain also says the artificial dye Yellow No. 6 will be removed from its nacho cheese, Blue No. 1 will be removed from its avocado ranch dressing and carmine, a bright pigment, will be removed from its red tortilla strips. (USA Today)
IRS says thieves stole tax info from 100,000 - Thieves used an online service provided by the IRS to gain access to information from more than 100,000 taxpayers, the agency said Tuesday. The information included tax returns and other tax information on file with the IRS. The IRS said the thieves accessed a system called “Get Transcript.” In order to access the information, the thieves cleared a security screen that required knowledge about the taxpayer, including Social Security number, date of birth, tax filing status and street address. (USA Today)
Consumer confidence rebounded slightly this month as the job market showed signs of improvement. The Conference Board’s consumer confidence index rose to 95.4 in May from 94.3 in April. Last month’s reading had been sharp drop from March’s 101.4. A year ago, the index stood at 82.2. Consumers’ assessment of current economic conditions improved, but their outlook for the next six months slipped. Their expectations for the job market improved, however. Consumers were more likely this month to say they planned to buy a car, home or major appliance within the next six months.
Olive Garden isn’t finished dreaming up new ways to use its breadsticks. The Italian restaurant chain said earlier this month it would introduce “breadstick sandwiches” as part of a broader menu revamp intended to play up its most popular offerings. The sandwiches don’t arrive until June 1, but Olive Garden already has a follow-up act planned with “breadstick crostini” in August. The “breadstick crostini” — or toasted bread — will be sliced and used as part of an appetizer, said Jose Duenas, Olive Garden’s executive vice-president of marketing.
Amtrak said Tuesday it will install video cameras inside locomotive cabs to record the actions of train engineers, a move that follows a deadly derailment earlier this month in which investigators are searching for clues to the train engineer’s actions before the crash. The Amtrak engineer, Brandon Bostian, suffered a head injury in the accident in Philadelphia and has told investigators he can’t remember what happened. Northeast Regional train 188 accelerated to a speed of 106 miles per hour in the last minute before entering a curve where it derailed. The speed limit for the curve is 50 mph. The crash left eight people dead and about 200 injured.