Home Business Trade tensions; BMW profits slump; Anadarko snubs Chevron – CNN

Trade tensions; BMW profits slump; Anadarko snubs Chevron – CNN

14 min read

US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin said China reneged on previous commitments over the weekend, undermining progress towards a detailed trade agreement.
As of Friday, penalties on $200 billion of Chinese goods will be lifted to 25% from 10%. President Donald Trump has also warned that he could tax nearly all Chinese exports to the United States.
The big question for investors is whether a deal can be salvaged when Chinese officials arrive in Washington later this week. Beijing is still sending its top trade negotiator.
Stock markets in China stabilized Tuesday after a sharp sell-off on Monday. US markets were also able to recover most of their lost ground after a steep initial plunge.
S&P 500 and Dow futures were down roughly 0.4% on Tuesday. Fears appeared to be waning in Europe and Asia, where stocks were mixed.
2. BMW hammered: The German carmaker reported a sharp decline in profits and set aside funds to pay a potential EU antitrust fine.
BMW’s first quarter profits fell 78% to € 589 million ($660 million), and its automotive division posted a loss.
The company said it had set aside € 1.4 billion ($1.6 billion) to pay fines resulting from an EU investigation into whether Germany carmakers colluded in holding back technology to reduce harmful vehicle emissions. BMW (BMWYY) has denied wrongdoing and says it will contest any fines.
The carmaker warned that business conditions are expected to remain volatile for the rest of the year, and it cited uncertainty over Brexit and international trade policies as risks. Shares dropped 1% in Frankfurt.
3. Anadarko snubs Chevron: Anadarko Petroleum (APC) says the revised offer it’s received from Occidental Petroleum (OXY) is superior to a previously accepted bid from Chevron (CVX).
Occidental has bid $76 per share for Anadarko, $59 of which is cash. Chevron has until May 10 to make a counter offer, although that deadline could be extended.
Occidental was backed last week by Berkshire Hathaway’s (BRKA) Warren Buffett, who invested $10 billion in the company to help finance its takeover of Anadarko.
The bidding war for Anadarko reflects an intense desire by US oil companies to acquire America’s best shale assets. Occidental is already the No. 1 oil producer in the vast Permian Basin.
4. Earnings and economics: Cinemark (CNK), Dean Foods (DF), Energizer (ENR), Marriot Vacations (VAC) and SeaWorld Entertainment (SEAS) will release earnings before the open.
Electronic Arts (EA), Lending Club (LC), Match Group (MTCH), Papa John’s (PZZA), Sprint (S), TripAdvisor (TRIP) and Western Union (WU) will follow after the close.
Shares in Anheuser-Busch InBev (BUD) gained less than 1% in Brussels after the company reported first quarter revenue growth of 5.9%. The brewer said it had seen strong growth in Brazil and improvement in the United States.
5. Coming this week:
Tuesday — US JOLTS; Anheuser-Busch InBev (BUD) and Papa John’s (PZZA) earnings
Wednesday — SALT Conference; GE (GE) annual meeting
Thursday — SALT Conference; China consumer price inflation; US jobless claims and trade data for March; Ford (F) annual meeting
Friday — US consumer price inflation; UK GDP; Marriott (MAR) earnings

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