The Department of Justice does not plan to appeal the DC appeals court ruling backing AT&T’s (T) acquisition of Time Warner.
If Congress fails to raise the debt ceiling ahead of a March 1 deadline, a new report says the Treasury may only be able to keep the government running through September.
The federal government will run up against the debt limit Friday. If Congress does not extend or increase the limit before then, that will force the Treasury Department to take so-called “extraordinary measures” to keep paying America’s bills.
But according to the bipartisan Congressional Budget Office, the Treasury will only be able to borrow using those extraordinary measures though the end of the fiscal year. The Bipartisan Policy Center has previously estimated those measures will last through midsummer, while others have said they could last into the fall.
A borrowing crunch is different than last month’s government shutdown, which was essentially an accounting problem. Without borrowing authority, the Treasury will run out of operating cash – at which point, according to the report, “the government would be unable to pay its obligations fully, and it would delay making payments for its activities, default on its debt obligations, or both.”
Earlier Tuesday, Federal Reserve Chairman Jerome Powell told lawmakers it would be unfathomable for the US government to cross a “bright line” in failing to raise the debt ceiling.
The U.S. national debt currently stands at more than $22 trillion, a record number.
US markets retreated slightly on Tuesday, shaking off an early slide driven by disappointing earnings and economic reports.
A series of reports painted a mixed picture about the health of the US economy. While US housing starts unexpectedly plunged in December, US consumer confidence rebounded strongly in February.
Against that conflicting backdrop, Federal Reserve Chairman Jerome Powell told lawmakers on Tuesday the central bank will take a “patient approach” on interest rates.
JM Smucker (SJM) rallied 5% as sales rose more than expected. Caterpillar (CAT) retreated 2% after receiving a double downgrade from UBS to “sell” due to global growth concerns.
JJ Kinahan, TD America’s chief market strategist, said the Caterpillar downgrade could have broader implications because industrial companies have led the market higher in 2019.
The FTC is taking aim at the tech industry with a new task force that will review both proposed mergers as well as those that have already been completed.
Bureau of Competition Director Bruce Hoffman said the task force was not created in response to any specific merger and declined to name any specific transactions that it plans to review. But he did mention that it will investigate tech firms that acquire smaller competitors to limit the threat they pose to their business. That’s what Facebook was been accused of doing with its 2012 acquisition of Instagram, for example.
“Technology markets, which are rapidly evolving and touch so many other sectors of the economy, raise distinct challenges for antitrust enforcement,” said Hoffman, who will oversee the task force.
Facebook is now directly competing with television networks for ad dollars. The company said Tuesday it will participate in the competitive Upfront ad sales season this year for the first time.
At a press event in New York City, Facebook (FB) announced a new premium video ad program, called Facebook Showcase, for advertisers to target audiences within videos on the platform. It’ll let advertisers book ads months in advance through a new option called “in-stream reserve.”
The move is part of a larger effort to keep Facebook’s ad sales machine churning as it reaches a limit for how many it can show in users’ News Feeds.
The video content, which will range from sports to fashion, news and other categories, will be vetted by human moderators and deemed to be brand safe when ads show up.
Facebook also announced new shows exclusive its Facebook Watch platform, including one with actors Anna Kendrick and Zac Efron.
Federal Reserve Chairman Jerome Powell struggled to answer a question by Democratic Sen. Brian Schatz of Hawaii on whether he has “directly or indirectly” communicated with anyone about interest rates from the White House.
“That’s kind of a broad question,” said Powell immediately in response. To which, Schatz replied, “It is a broad question.”
“It’s probably not appropriate to discuss my private conversations with any other government officials,” he finally responded without clearly acknowledging whether he had or had not discussed the matter.
He quickly stressed that decisions made by the Fed in setting interest rate policy are “non-political.”
Powell earlier this month had dinner at the White House with President Donald Trump along with Treasury Secretary Steven Mnuchin and his deputy Richard Clarida.
In a statement following the dinner, the Fed said the men did not discuss future interest rate policy.
The markets are wobbling between positive and negative territory as Federal Reserve Chairman Jerome Powell continues his testimony. Here’s where they stand:
Here are some market movers:
Here’s the full, 35-page opinion an appeals court wrote about today’s decision:
Though the three-judge panel of the appeals court has ruled in AT&T’s (T) favor, this isn’t necessarily the end of the road.
The Justice Department could ask all the judges in the U.S. Court of Appeals for the D.C. Circuit to hear its case.
It could also ask the Supreme Court to consider the case - though there’s no guarantee the justices will take it.
There is some desire in the legal community for the Supreme Court to rule on the case, because this is a vertical merger — a merger between two companies that are not direct competitors — and the court hasn’t heard a case on a vertical merger since the 1970s.
The Justice Department has not said yet if it will appeal further.
AT&T (T) has commented on the ruling that cleared the way for its acquisition of Time Warner.
Here’s what David McAtee, AT&T’s general counsel, said in a statement:
Shares are slightly up on the news.
An appeals court has rejected the Justice Department’s bid to overturn a ruling that cleared the way for AT&T’s (T) acquisition of Time Warner.
At a hearing in December, D.C. Circuit Court of Appeals judges Judith W. Rogers, Robert L. Wilkins and David B. Sentelle grilled the Justice Department’s attorneys about their contention that the original decision by Judge Richard Leon was incorrect.
Rogers was appointed by former President Bill Clinton, Wilkins by former President Barack Obama, and Sentelle by former President Ronald Reagan.
The Justice Department could decide to ask the full appeals court to hear the case or to appeal the ruling to the Supreme Court.
Time Warner has since been renamed WarnerMedia. CNN is part of WarnerMedia.
This is a developing story. Follow it here.
Wall Street is starting Tuesday on a negative note ahead of Federal Reserve Chairman Jerome Powell’s Senate testimony.
Markets were pressured by a string of disappointing economic reports, including a sharp decline in US housing starts in December to a two-year low.
Home Depot (HD) declined 3% after posting an earnings miss and weaker-than-expected outlook. Caterpillar (CAT) lost 4% on a double downgrade to “sell” by UBS.
Tesla (TSLA) retreated 3% after the SEC asked a federal judge to hold CEO Elon Musk in contempt for violating a settlement deal.
In brighter news, JM Smucker (SJM) soared 8% on an earnings beat and optimistic outlook from the maker of Folgers.
Home Depot, which has deftly navigated the transition to online shopping, fell short of Wall Street’s high expectations for the retailer on Tuesday.
Home Depot (HD) said sales at stores open at least a year increased 3.2% during the most recent quarter, which fell short of analysts’ forecasts. The company’s stock fell 3% during early trading Tuesday.
Home Depot’s outlook also came in lower than investors predicted. The company said comparable sales will increase 5% in 2019, down slightly from last year.
Home Depot’s success is tied closely to housing market swings.
Home prices rose in December at the slowest pace in three and a half years, which may have discouraged some home owners and contractors to dish out at Home Depot stores.
Lowe’s (LOW), Home Depot’s top rival, fell 2% Tuesday. Lowe’s reports quarterly earnings on Wednesday and will provide another snapshot of the economy’s health.
The British pound shot above $1.32 to its highest level in five months Tuesday after Prime Minister Theresa May offered UK lawmakers the chance to vote on delaying Brexit if she’s unable to win parliamentary approval for the divorce deal she negotiated.
If parliament takes her up on the offer, lawmakers could rule out the possibility of Britain leaving the European Union on March 29 without a deal to protect trade.
While anything can still happen because of the highly unsettled political situation, any movement toward avoiding a disorderly exit will be cheered by investors and companies.
Kit Juckes, a currency strategist at Societe Generale, said the pound could strengthen to $1.40 if a disorderly break is avoided.
The pound also got a boost after the UK’s main opposition party said it would back a second referendum if its Brexit proposals are rejected by parliament later this week.
The number of new homes under construction fell to a two-year low in December, according to new data from the Commerce Department.
Here’s more from our Matt Egan:
Despite the plunge, analyst Peter Boockvar said the data is “dated and not reflecting enough time for consumers to respond to lower mortgage rates.”
More bad news: Home prices rose in December at the slowest pace in three and a half years.
Macy’s sales for the all-important holiday stretch inched up slightly, but the retailer still faces challenges in its turnaround effort.
Sales at store open at least a year increased 0.7% during its most recent quarter compared to last year, Macy’s said Tuesday.
Investors breathed a sigh of relief. Macy’s (M) stock plunged close to 18% in January, its worst day in history, after warning it fell short of its holiday expectations. On Tuesday, Macy’s was flat in pre-market trading.
The results signal that Macy’s strategies to grow sales are paying off.
The company is adding discount sections, which it calls Macy’s Backstage, inside around 120 stores. It’s also rolled out buy online, pickup in store to all of its 690 stores, and it’s introduced a new loyalty program.
But 2019 could be difficult for Macy’s. It expects comparable sales to increase only around 1%.
Macy’s faces pressure from Amazon (AMZN), which has ramped up its clothing business, as well as discount chains like TJMaxx (TJX). Target (TGT) and Walmart (WMT) have also improved their clothing brands.
To offset Macy’s investments in its supply chain and new tech, the company said it would begin a restructuring plan to save around $100 million a year. Macy’s will cut around 100 upper management jobs as part of the plan.
Boeing (BA) has nominated Nikki Haley, the former US ambassador to the United Nations and governor of South Carolina, to its board of directors.
The company said in a release that Haley brings “an outstanding record of achievement in government, industry partnership, and successfully driving economic prosperity for communities.”
Haley said it’s an “honor to have the opportunity to contribute to Boeing’s continued success as a cutting edge industry leader and a great American company.”
Shareholders will vote for company directors at Boeing’s annual shareholder meeting on April 29.
Tesla (TSLA) CEO Elon Musk fired back after yesterday’s Securities and Exchange Commission decision.
He tweeted that something is broken with the agency:
This is his second response since the SEC asked a judge yesterday to hold Musk in contempt for violating a settlement deal reached with the powerful regulator last year. He earlier cited a Tesla earnings transcript about production numbers.
Musk said in September that he had secured funding to take Tesla private at $420 a share. But he had not secured the funding, according to the SEC.
Tesla (TSLA) shares are down nearly 4% in premarket trading.
Here’s why:
Etsy (ETSY) shares are surging 10% in premarket trading:
