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 for the day will be.
The stock markets were closed Friday, due to Good Friday holiday. Thursday, the Dow Jones Industrial average fell 16.31 points, or 0.1%, to close at 16,408.54. The S&P 500 index rose 2.54 points, or 0.1%, to 1,864.85. The NASDAQ added 9.29 points, or 0.2%, to 4,095.52. Benchmark U.S. crude for May delivery rose 54 cents to close at $104.30 a barrel in New York.
US NEWSPAPER INDUSTRY REVENUE FELL 2.6% IN 2013, HURT BY DROP IN PRINT AD REVENUE
NEW YORK, N.Y. – U.S. newspaper industry revenue continued to fall last year, as increases in circulation revenue failed to offset shrinking demand for print advertising. The Newspaper Association of America says the industry’s revenue fell 2.6 per cent to $37.59 billion in 2013. Revenue from print advertising dropped 8.6 per cent to $17.3 billion, while circulation revenue rose 3.7 per cent to $10.87 billion. Newspapers have looked in recent years to replace declining print advertising and circulation revenue with contributions from online sources. While digital advertising revenue increased 1.5 per cent to $3.42 billion last year, it is still less than 10 per cent of the industry’s overall revenue. The NAA’s numbers are based on a sample of public and private company data collected on a confidential basis.
MORE BUSINESSES SAW HIGHER COSTS FOR MATERIALS, LABOR IN Q1, REPORT FINDS
NEW YORK, N.Y. – Rising costs for materials and labor appear to be pressuring businesses, according to a quarterly survey from the National Association of Business Economics. During the first quarter of the year, 31% of businesses surveyed reported higher material costs, more than double the 15 per cent that saw costs rise in the previous survey. Additionally, 35% reported rising wages and salaries at their businesses in the past three months, up from 23% in January. Yet those who said they raised the prices they charge in the past three months remained unchanged at 20%, according to the latest NABE survey of 72 members, which was conducted between March 18 and April 1. “It appears that businesses were not able to pass on costs increases, resulting in increased pressure on margins,” the survey findings said.
The quarterly survey by NABE is intended to gauge business conditions at members’ firms or industries. The April survey reflects first quarter results, as well as the near-term outlook. Despite the cost pressures, businesses seem more upbeat about the direction of the broader economy. The survey found that 80% said they expect the GDP to rise at least 2% over the next year. Nearly three-quarters also said they expect labor market conditions to improve, with unemployment easing to between 5% and 6% in the next one to three years. And over the next six months, 43% of respondents expect their firms to expand employment.
Still, a majority expect wage growth to remain subdued, with growth of up to 3% over the next three years. The number of businesses that reported rising sales in the first quarter fell to 53%, down from 63% in the previous quarter. Jack Kleinhenz, president of NABE and chief economist at the National Retail Federation attributed the decline to “a very rough winter” in a statement.
Capital spending rose for 38% of respondents, up from 28% in January. Meanwhile, those reporting rising profit margins during the period declined slightly to 32%, from 34% in the previous survey. Looking ahead to the coming quarter, 41% said they expect costs to increase up to 5%. Whether they’ll be able to pass that on to customers is uncertain; 31% said they expect their businesses to raise prices. That’s down from the 43% who said they planned to raise prices in January, but still an elevated level from most of last year.
ASIAN STOCKS MIXED AFTER HOLIDAY WEEKEND AS INVESTORS LOOK AHEAD TO KOREA, CHINA DATA
BEIJING, China – Asian stocks were mixed Monday in light trading after Japan reported a jump in its trade deficit and investors looked ahead to economic data this week from China and Korea. Oil declined but stayed above $104 per barrel amid concern over simmering tensions in Ukraine. The regional heavyweight, Tokyo’s Nikkei 225 index, added 0.7% to 14,620.45 despite the government’s announcement that the country’s trade deficit widened by nearly 70 per cent to a record high in the year ending March 31. It was Japan’s third straight deficit year.
China’s benchmark Shanghai Composite Index shed 0.1% to 2,096.75. Investors are waiting for the preliminary version of HSBC Corp.’s survey of Chinese manufacturing due out Wednesday for signs of whether an economic slowdown has bottomed out. The flash purchasing managers index “will be closely watched after a raft of mixed (but mostly soft) data,” said Mizuho Bank in a report. “Potential for upside resides more in stimulus prospects rather than activity pick-up.”
Taiwan’s Taiex shed 0.2% to 8,951.10 and Seoul’s Kospi lost 0.3 per cent to 1,997.36. Korea is due to report data Thursday that are expected to show economic growth slowed in the first quarter. Singapore was flat while Manila and Jakarta rose. Australia, New Zealand and Hong Kong were closed for the Easter holiday.
Oil shed 23 cents to $104.07 in electronic trading on the New York Mercantile Exchange amid concern about tensions in Ukraine following an Easter morning shootout at a checkpoint manned by pro-Russian insurgents. The contract added 44 cents in the previous session to $104.30 on concern Russian supplies might be disrupted if Europe or the United States impose sanctions. In currency markets, the dollar gained 0.2 per cent to 102.66 yen and the euro was flat at $1.381.
ASIAN STOCKS SUBDUED ON UKRAINE CAUTION IN HOLIDAY THINNED-TRADE
TOKYO (Reuters) - Asian stock markets started the week on a subdued note on Monday, as tensions in Ukraine kept investors cautious amid an absence of catalysts as several markets remained closed for the Easter holiday.
MSCI's broadest index of Asia-Pacific shares outside Japan inched down 0.1 percent.
Japan's Nikkei stock average rose 0.9% on the back of a weaker yen. Tensions in Ukraine, signs of slowing growth in China and uncertainty over when the U.S. Federal Reserve would start to tighten interest rates have buffeted global markets in recent weeks, although Fed Chair Janet Yellen's dovish comments last week helped soothe some nerves. The dollar edged up to a two-week high against the yen after data showed Japan posted its largest-ever trade deficit in the fiscal year through March 2014 due to a soaring energy import bill. The greenback rose to 102.71 yen, its highest point since April 8, and remained well bid after upbeat U.S. factory data and jobless claims late last week. Analysts said signs that the U.S. economy had shaken off disruptions caused by harsh winter weather would help the U.S. currency in the longer run. "With momentum building behind the U.S. industrial cycle, tentative signs of wage-based pressure building, and further labor market improvements likely, falling U.S. rates are unlikely to continue to be a major driver of dollar weakness," strategists at Barclays said in a note to clients. The encouraging U.S. data saw the 10-year U.S. Treasury note yield spike on Friday to a 10-day peak of 2.726%, pulling back sharply from a six-week trough of 2.596 percent hit earlier last week.
AT MT. GOX BITCOIN HUB ‘GEEK’ CEO SOUGHT BORHT CONTROL AND ESCAPE
TOKYO (Reuters) - In June 2011, when customers of now-bankrupt bitcoin exchange Mt. Gox agitated for proof that the Tokyo-based firm was still solvent after a hacking attack, CEO Mark Karpeles turned to the comedy science fiction novel "The Hitchhikers Guide to the Galaxy". During an online chat, Karpeles moved the equivalent of $170 million in bitcoin at today's market rates - the virtual equivalent of a bank manager flashing a wad of cash in a wallet to establish credit. The gesture - with a sly wink to the "geek" culture Karpeles believed he shared with many of his 50,000 customers at the time, including an interest in coding, Japanese manga comics and science fiction - succeeded.
By moving 424,242 bitcoins, Karpeles, then 26, evoked the random number, 42, described as the "meaning of life" in Douglas Adams' sci-fi novel. "Don't come after me claiming we have no coins," Karpeles said, according to a transcript of that online discussion. "42 is the answer." As the price of bitcoin soared from a few dollars to above $1,000, Mt. Gox grew to become the world's largest exchange for the digital currency, handling flows worth $3 billion in 2013, by the company's own reckoning.
But even as Mt. Gox boomed, French-born Karpeles seemed both keen to maintain total control of key operations and indifferent to commercial success, according to former staff and associates who spoke to Reuters, but asked not to be named because of ongoing investigations into the exchange's collapse. Creditors who want to know how Mt. Gox at one point lost some $500 million worth of bitcoin and another $27 million in cash from its bank accounts, are seeking answers from Karpeles, who has spent recent days huddled in meetings with lawyers in Tokyo.Lawyers for Karpeles told a U.S. judge last week that he was "not willing" to travel to the United States - as ordered by the judge to answer questions in a bankruptcy court - until his attorneys can "get up to speed" on a new subpoena from the U.S. Treasury Department. Karpeles doesn't want to go to the U.S. as he fears he could be arrested by authorities there, a person familiar with his thinking said.
"Regardless of whether it was a massive fraud or whether he was just grossly negligent, at the end of the day he's at fault," said Steven Woodrow, a lawyer representing a U.S. class action against Karpeles brought by Mt. Gox creditors. Mt. Gox's bid to resuscitate its business was dismissed by a Tokyo court on Wednesday, and the court-appointed administrator said that meant the firm was likely to be liquidated. He added that Karpeles was likely to be investigated for liability in the exchange's collapse.
CUSHMAN & WAKEFIELD TAP NEW BOARD CHAIRMAN
NEW YORK CITY—Cushman & Wakefield has announced John Elkann as chairman of its board of directors, effective immediately. Elkann is chairman and CEO of EXOR, S.p.A., Cushman & Wakefield’s controlling shareholder, and chairman of Fiat, S.p.A., where he has been serving as a board member since December 1997. Carlo Barel di Sant'Albano will be stepping down as Chairman to take on a greater operational role in the newly created position of international CEO. In addition to EMEA, his new responsibilities will include all business and client activities in Asia Pacific and South America. Says Edward Forst, Cushman’s president & CEO “We are all delighted to welcome John Elkann to the role of Chairman of Cushman & Wakefield. He brings with him significant international perspective and a record of dynamic leadership. He has also been a strong supporter of C&W since EXOR became our majority shareholder in 2007 and his appointment as Chairman will help accelerate the execution of our strategy as we drive toward the firm’s centennial in 2017.” Adds John Elkann, “Cushman & Wakefield is one of EXOR’s largest investments and we are strongly committed to supporting its development, helping it to achieve its full potential as a premier global real estate firm. I look forward to working closely with Ed, his leadership team and the 16,000 professionals of C&W all around the world.” Elkann is a member of the International Advisory Council of the Brookings Institution and a trustee of the Museum of Modern Art. He also serves as vice chairman of the Italian Aspen Institute. Sant’ Albano became interim CEO of Cushman last summer after Glenn Rufrano stepped down.