U.S. Stocks Slide as Fears of Trade War Rise Anew
The S&P 500 and Dow Jones Industrial Average closed lower for the third session on Wednesday. With fears of a potential trade war resurfacing again, the S&P 500 slid by 0.6% while the blue-chip index fell 1%. The tech-heavy Nasdaq Composite Index went down by 0.2%.
U.S. President Donald Trump announced that his administration will aim to bring down the country’s trade deficit with China by $100 billion via tariffs. With this latest issue, China is preparing to counter with punitive tariffs if the U.S. goes out of line.
New Sanctions on Wells Fargo Due to Auto Insurance Payouts
Last July, Wells Fargo pointed to third-party vendors for incorrectly layering insurance policies and forcing them onmore than half a million auto borrowers.
However, the bank’s primary regulator, the Office of the Comptroller of the Currency (OCC), found out that Wells Fargoreceived commissions on those auto insurance policies but failed to report them.
According to Reuters sources, U.S. regulators are preparing to issue new sanctions on the third largest U.S. lender as it received and profited from payouts when those policies were written. The bank executives are being questioned if they knew about the payments and whether they should have stopped them sooner.
Qualcomm Walks the Tightrope
After U.S. President Donald Trump blocked Broadcom Ltd.’s (AVGO) takeover bid, Qualcomm (QCOMM) is now forced to walk the tightrope. The U.S. government sees the company as a ‘trusted’ supplier and that it is determined to prevent giving China the advantage in the next generation of mobile communications.
The decision to force Broadcom to abandon the deal places Qualcomm in an awkward position. China is their most lucrative market because of patent licensing fees it receives from smartphone vendors such as Apple (AAPL), Samsung, and Xiaomi.
From here on, Qualcomm would need to do a balancing act. The trade disputes and political tensions between the two countries could impact heavily on their business and deals.
IHeart Media Files for Bankruptcy
The largest U.S. radio station owner, filed for Chapter 11 bankruptcy on Thursday. IHeart Media Inc., together with some of its units, reached an in-principle agreement with creditors to restructure its more than $10 billion debt.
IHeartMedia has been struggling to repay its $20 billion of debt and contend with falling revenue at its 858 radio stations. However, the company said the cash on hand and generated funds from ongoing operations will be adequate to fund sustain the business during the bankruptcy process.
Fair Trade Regulator Raids Amazon Japan
On Thursday, Amazon Japan admitted that it had been raided by the country’s fair trade regulator due to suspicion of a possible anti-trust violation. The Asahi Daily reported that the online retailer is suspected of demanding suppliers to pay a “collaboration fee.”