Date: August 17, 2018
Trump Seeks SEC Study of 6-Month Reporting Instead of Quarterly
President Donald Trump said he’s asked the Securities and Exchange Commission to study ending quarterly reporting for U.S. businesses in order to ease regulations and spur growth. “In speaking with some of the world’s top business leaders I asked what it is that would make business (jobs) even better in the U.S. ‘Stop quarterly reporting & go to a six month system,’ said one. That would allow greater flexibility & save money. I have asked the SEC to study!” Trump said in a Twitter post. Some corporate leaders and trade groups have vented about public companies’ focus on short-term earnings and revenue goals, arguing that it can prevent firms from growing their businesses and creating jobs. One criticism is that if companies are striving to report profit gains every quarter, they are more likely to buy back shares and cut costs than invest in their businesses. Earlier this year, Berkshire Hathaway Inc.’s Warren Buffett and JPMorgan Chase & Co.’s Jamie Dimon urged companies to stop issuing quarterly earnings guidance. But moving away from reporting earnings every three months would be a much more dramatic change that would almost certainly trigger resistance from shareholders who want transparency from the companies they invest in. Quarterly reporting by public companies has long been a cornerstone of U.S. capital markets, with Wall Street analysts known for making closely monitored recommendations on buying or selling stock. While some business leaders have groaned about the rigors associated with having to meet targets and metrics four times a year, the SEC has been reticent to make any changes. SEC Chairman Jay Clayton, a Trump nominee, has said increasing the number of public companies and initial public offerings are among his top priorities. Still, Clayton hasn’t floated reducing the number of times that companies must disclose their financial performance each year. As an independent agency, the SEC enjoys some level of independence from the White House.
U.K. Retail Sales Rebound in July on Warm Weather, Discounts
U.K. retail sales bounced back strongly in July as warmer weather and extended discounts at stores encouraged shoppers to open their wallets. Sales gained 0.7 percent from June, compared with a median estimate of a 0.2 percent gain in a Bloomberg survey. The increase was led by online sales, food and clothing, according to data from the Office for National Statistics in London. Excluding auto fuel, sales jumped 0.9 percent. Britons enjoyed a heat wave this summer that lifted spending, while the soccer World Cup helped boost sales of food and drink. Still, the warm weather may have kept people away from some high-street stores as online spending climbed to a record proportion of total. The pound climbed after the data and was 0.2 percent higher at $1.2730 as of 9:34 a.m. in London. The Bank of England raised interest rates this month to the highest level in almost a decade on concern that domestic price pressures are building. A report yesterday showed the inflation rate climbed to 2.5 percent, above the central bank’s 2 percent target. Still, the depreciation of the pound triggered by Brexit and meager wage growth so far have made it harder for consumers. The country is only just emerging from a year in which price gains outstripped wage growth. That’s been brutal for U.K. retailers. Department store House of Fraser needed a rescue package this month to avoid insolvency. Home improvement chain Homebase said it will close more than 40 stores in Britain and Ireland. In the past year, the sector has seen BHS, Maplin Electronics and the U.K. arm of Toys “R” Us Inc fall victim to the squeeze. Traditional bricks-and-mortar stores are struggling in the face of competition from the internet. Spending online jumped to a record 18.2 percent of all retailing in July, the same level as in department stores, while summer discounts lasted longer than usual this year both online and in stores, the ONS said. Over three months, sales gained 2.1 percent from the previous period, the ONS said. From a year ago, retail sales increased 3.5 percent in July. Excluding fuel, annual growth was 3.7 percent.
China, Unsure of How to Handle Trump, Braces for ‘New Cold War’
Perhaps nowhere outside America’s heartland is Donald Trump given more credit than in Beijing. In government offices and think tanks, universities and state-run newsrooms, there is an urgent debate underway about what many here see as the hidden motive for Washington’s escalating trade war against President Xi Jinping’s government: A grand strategy, devised and led by Trump, to thwart China’s rise as a global power. “The Trump administration has made it clear that containing China’s development is a deeper reason behind the tariff actions,” said He Weiwen, a former commerce ministry official and now a senior fellow at the Center for China and Globalization, an independent research group filled with former bureaucrats. These sentiments were echoed by many of the more than two dozen current and former government officials, business executives, state-affiliated researchers, diplomats and state-run media editors interviewed for this article. Most requested anonymity to speak their minds about sensitive matters. A common suspicion ran through the conversations — that the tariffs are just a small part of Trump’s plan to prevent China from overtaking the U.S. as the world’s largest economy. Several people expressed concern that the two nations may be heading into a long struggle for global dominance that recalls the last century’s rivalry between the U.S. and Soviet Union. “The trade war has prompted thinking in China on whether a new cold war has begun,” said An Gang, a senior research fellow at the Pangoal Institution, an independent research group in Beijing whose experts include former government officials. The dispute, he says, “now has military and strategic implications” — reflecting concern among some in Beijing that tensions could spill over into Taiwan, the South China Sea and North Korea.