The daily business briefing: February 14, 2019
1.
Airbus said Thursday that it is halting production of its superjumbo A380 in 2021 due to a lack of buyers. The European aircraft maker said that the airline Emirates, its key customer for the double-deck, 500-plus-seat plane, is reducing its orders, so "we have no substantial A380 backlog and hence no basis to sustain production." The decision could threaten as many as 3,500 jobs. "It's a painful decision for us," CEO Tom Enders said. "We've invested a lot of effort, a lot of resources, a lot of sweat ... but we need to be realistic." The A380 was praised for its roominess and quieter engines when it started flying in 2008, but airlines were cautious about committing to the costly plane, which is so big airports had to build new runways for it. [The Associated Press]
2.
Germany's economy showed zero growth in the last quarter of 2018, and narrowly avoided tipping into recession territory, the country's statistics office announced on Thursday. Forecasters had been expecting Germany, a key economic engine for Europe, to show 0.1 percent growth. Economists said U.S. tariffs that have hit German steel makers contributed to the disappointing data. The U.S. trade war with China also hurt, because tariffs on Chinese goods contributed to the slowing of China's economy, in turn reducing crucial Chinese sales of German cars and other products. In the third quarter, Germany's economic output shrank by 0.2 percent from the previous quarter. "The German economy is stuck in neutral," Gregor Eder, an economist for insurer Allianz said in a note to clients. [The New York Times, The Associated Press]
3.
The Securities and Exchange Commission on Wednesday filed a lawsuit accusing former Apple executive Gene Levoff with insider trading. The SEC complaint said Levoff, a former high-ranking lawyer for the iPhone maker, "violated the duty of trust and confidence he owed Apple and its shareholders." The SEC said that at least three times in 2015 and 2016, Levoff exploited his position to illegally trade Apple stock before the company posted its quarterly earnings reports. In the summer of 2015, for example, Levoff allegedly found out Apple was going to fall short of quarterly iPhone sales estimates, and sold $10 million worth of Apple stock before the news came out, according to the SEC. Levoff attorney Kevin Marino said his client was highly regarded at Apple and had never been accused of wrongdoing. [The Washington Post]
4.
Amazon, which doubled its profits and made more than $11 billion in 2018, won't pay any federal income taxes for the second year in a row, the Institute on Taxation and Economic Policy reported on Wednesday. The company will not be required to pay the standard 21 percent income tax rate on its 2018 profits, and is claiming a tax rebate of $129 million, which ITEP describes as "a tax rate of negative 1 percent." Amazon drew ire in 2018 for not paying federal taxes on its $5.6 billion in profits the year before, which was made possible due to tax credits and stock-based compensation. Last year was the first time Amazon paid no federal income tax; prior to the GOP's tax overhaul, the company paid at a rate of 11.4 percent. [ITEP, Politifact]
5.
U.S. stock index futures rose early Thursday as investors continue to react to positive signs relating to U.S.-China trade talks. Futures for the Dow Jones Industrial Average, the S&P 500, and the Nasdaq-100 were all up by 0.3 percent or more. The rise came after President Trump said Wednesday that trade talks in China were "going very well." Both sides are hoping to reach an agreement on resolving their trade war before a truce expires in early March. Chinese President Xi Jinping reportedly plans to meet Friday with U.S. delegates, including Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer. [CNBC]