Losses Expected After Top Economic Adviser Quits
Gary Cohn, the top economic adviser to U.S. President Donald Trump announced on Tuesday he was resigning from his post. The news of Cohn’s resignation sent global stocks and the dollar reeling on Wednesday. It also raised fears of a trade war.
Cohn is regarded as a voice for Wall Street in Trump’s administration. His resignation signaled that Trump’s plan to impose steel and aluminum import tariffs is almost certain.
Being a free trade advocate and opposed to protectionist measures, Cohn apparently lost to the forces supporting the metals tariffs.
U.S. stock futures dropped sharply on Tuesday evening with the Dow Jones and S&P 500 going down. With the negative reaction to Cohn’s sudden exit, losses are expected when US markets open for trading on Wednesday.
Tariffs will not Impact on Prices of Boeing Jetliners
If U.S. President Donald Trump decides to impose tariffs on imported steel and aluminum, the price of a Boeing Co. jetliner or fighter plane will not increase. The effect would be insignificant and therefore belies fears the tariffs are a big blow to the U.S. aerospace industry.
However, analysts believe retaliation by other countries would have greater impact on Boeing. China is one of their biggest customers that would likely retaliate if the tariffs are eventually implemented. About 70% of Boeing’s delivery of 763 jetliners last year went to customers overseas and 22% were delivered to China.
Daunting Task for Exxon’s CEO on His Second Year
The CEO of Exxon Mobil Corp. (XOM), the world’s largest publicly traded oil producer, is facing serious challenges as he enters his second year as Chief Executive. Darren Woods is faced with the daunting task of reversing Rex Tillerson’s legacy of failed projects.
Rex Tillerson used to be Exxon’s CEO before becoming the Trump’s secretary of state. He was responsible for the write-downs that amounted to billions of dollars amid falling production. Exxon shares also lagged behind its peers in the stock market. Woods is facing the prospect of slow growth and huge spending that could impact on results for years.
Exxon plans about $24 billion in capital spending. Things will not get any better until the windfall from new exploration under Woods comes. Their rivals, Chevron (CVX) and Royal Dutch Shell, have capped or cut their spending after finishing expansion projects.
Blackberry Goes After Facebook Over Patent Infringement
A lawsuit was filed by Blackberry Ltd. on Tuesday against Facebook Inc. (FB) over patent infringement. The company is running after Facebook claiming the technology and features of the WhatsApp and Instagram apps were copied from the BlackBerry Messenger. Blackberry once dominated the smartphone market but has since lost market share.
BlackBerry spokeswoman Sarah McKinney said, “Protecting shareholder assets and intellectual property is the job of every CEO but the lawsuit was not central to BlackBerry’s strategy.” She added that the lawsuit followed years of negotiation and the company has an obligation to shareholders to pursue appropriate legal remedies.
Fox Networks to Cut Commercial Time
Fox Networks Group has a new advertising goal. The company which is owned by the media conglomerate 21st Century Fox (FOX) wants their networks to cut commercial time and limit it to 2 minutes per hour. They hope to hit that target by 2020 and shall apply to the Fox broadcast network and cable channels like FX and Fox’s sports networks.
Executive Vice-President David Levy said the company might adjust ad pricing which would mean charging more in some instances. Levy told CNN on Tuesday that some of their platforms like the FX digital service, FXNOW, has already cut commercials.
Analysts expected the move from traditional TV networks since younger viewers have shifted to streaming services like Netflix. Time Warner’s (TWX) TNT and TruTV have trimmed down ad time while Comcast’s (CMCSA) NBCUniversal would do the same this fall during their original prime time shows.