The daily business briefing: May 23, 2018
1.
The House voted Tuesday 258-159 to roll back Dodd-Frank rules for midsize and regional banks put in place after the 2008 financial crisis. The bill, already passed by the Senate, lets banks with up to $250 billion in assets avoid supervision from the Fed and stress tests. Under Dodd-Frank, banks with at least $50 billion in assets had to abide by tougher financial rules. Republican lawmakers say easing the regulations will make it easier for small banks and credit unions to lend more money to people. Some Democrats warned the bill also assists some large regional banks that failed during the financial crisis. The bill does not affect the biggest banks, like Bank of America and Wells Fargo. [NPR]
2.
Ten female McDonald's workers have filed sexual harassment complaints with the federal government in the last few days after they said the fast-food chain ignored or retaliated when they reported the behavior internally. The complaints were filed with the Equal Employment Opportunity Commission by women in Detroit, Chicago, Los Angeles, and six other cities. The women said their bosses ignored, mocked, or terminated them after they reported the mistreatment. "I felt I had no choice but to tolerate it," said Kimberley Lawson, 25, who works at a McDonald's in Kansas City, Missouri. McDonald's said in a statement it takes sexual harassment allegations "very seriously and are confident our independent franchisees who own and operate approximately 90 percent of our 14,000 U.S. restaurants will do the same." [Reuters, CNN]
3.
J.C. Penney CEO Marvin Ellison, a former Home Depot executive, is leaving to become president and CEO of Lowe's, the home-improvement chain announced Tuesday. Ellison, one of just a few black chief executives at a Fortune 500 company, joined J.C. Penney just four years ago. He tried to turn around the struggling retailer by refocusing on home appliances and beauty products as consumers reduced spending on clothes. Analysts said his departure, coming days after J.C. Penney reported disappointing results, suggested Ellison was not optimistic about the company's prospects. He will take over in July from Robert Niblock at Lowe's, which has had trouble keeping up with rival Home Depot as the housing market gained strength. [The Associated Press, CNBC]
4.
U.S. stock futures dropped sharply early Wednesday as trade frictions and geopolitical concerns resurfaced. Dow Jones Industrial Average futures fell by 0.8 percent, while those of the S&P 500 and the Nasdaq-100 dropped by 0.7 percent and 1 percent, respectively. On Tuesday, all three of the main U.S. indexes lost ground, with the Dow losing the most with a 0.7 percent decline. Among the geopolitical developments that troubled many investors were statements by President Trump that he was not happy with progress in U.S.-China trade talks, and that his planned June summit with North Korean leader Kim Jong Un could be postponed or canceled. Trump also said his administration would propose more tax cuts before November. [MarketWatch]
5.
Target's stock dropped by 6.9 percent in pre-market trading Wednesday after the retailer announced disappointing quarterly profits, which the company blamed on poor spring weather that hurt sales of "temperature-sensitive" goods. Same-store sales grew by 3.0 percent, beating the FactSet consensus estimate of 2.8 percent, and revenue came in at $16.8 billion, exceeding the FactSet consensus of $16.6 billion. Profit, however, fell short of forecasts. Adjusted earnings per share, excluding non-recurring items, came in at $1.32, below the FactSet consensus of $1.39. Target's stock had risen by 15.7 percent in 2018 through Tuesday, and the company predicted second-quarter adjusted earnings per share of $1.30 to $1.50, in line with analysts' expectations of $1.35. [CNBC, MarketWatch]