The daily business briefing: February 28, 2019
1.
U.S. stock index futures edged down early Thursday and Asian markets dropped to close down after President Trump and North Korean leader Kim Jong Un abruptly ended their summit in Vietnam early without a deal. Fading optimism over the prospect of a U.S.-China trade deal also dampened sentiment. Futures for the Dow Jones Industrial Average were down by roughly 0.1 percent, while those of the S&P 500 and the Nasdaq fell by 0.2 percent and 0.3 percent, respectively. South Korea's stock market dropped sharply to close down by 1.8 percent; Japan's main Nikkei 225 share index fell by 0.8 percent. Trump and Kim appeared confident earlier in the day about improving relations, but their talks broke down over Kim's demand that the U.S. lift all economic sanctions in exchange for only partial denuclearization. [The Washington Post, CNBC]
2.
Southwest Airlines said Wednesday that the Federal Aviation Administration had approved it to start flying to Hawaii from the West Coast. The low-cost carrier will announce within days when it plans to start selling tickets on the new routes to the islands from several California cities. The Hawaii routes account for much of Southwest's projected growth this year. Southwest had hoped to start selling tickets before the end of 2018, but its plans were delayed by the partial government shutdown. The company also has been dealing with an increase in the number of its planes that are out of service as it faces a dispute with its mechanics' union. [CNBC]
3.
U.S. farm debt is the highest it has been since the 1980s when the agriculture community was last in calamity, reports Reuters. The amount of debt has risen to over $400 billion, and loan demand is "historically high," Agriculture Secretary Sonny Perdue said Wednesday. The current crisis is being caused by weakness in commodity prices, weather damage to crops, and a loss of profitable export markets like China. President Trump announced last year that the government would supply $12 million in aid to farmers in order to offset economic losses from tariff hikes, but farmers have made it clear they would rather have trade relations return to normal than receive a bailout from the government. [Reuters]
4.
Square Inc. shares dropped by 6 percent in after-hours trading on Wednesday after the payment-processing company reported quarterly earnings that beat expectations but gave a first-quarter outlook that fell short of the FactSet consensus estimate. Revenue growth also slowed. The company posted a fourth-quarter loss of 7 cents per share, compared to 6 cents a share in the same period a year earlier. Adjusted earnings were 14 cents a share, beating the FactSet consensus by one cent. Square said it expected adjusted earnings per share of 6 to 8 cents in the first quarter, falling short of Wall Street expectations of 12 cents per share, but it put its full year outlook at 74 cents to 78 cents in adjusted earnings per share, surpassing estimates of 70 cents. [MarketWatch]
5.
U.S. Trade Representative Robert Lighthizer on Wednesday told Congress there was no guarantee the U.S. and China would quickly resolve their trade war. The remark ran counter to President Trump's recent assertion that the world's two biggest economies were "very, very close" to a deal. Trump delayed a planned early March increase in tariffs on Chinese imports after signs of progress. "Let me be clear," Lighthizer told members of the House Ways and Means Committee, "much still needs to be done both before an agreement is reached and, more importantly, after it is reached, if one is reached." Lighthizer said any agreement would require tough follow-up to make sure China sticks to reforms to make its trade practices more fair to the U.S. [Politico]