June 2019

Hock Tan, chief executive officer of Broadcom

Martin H. Simon | Bloomberg | Getty Images

Shares of chipmaker Broadcom fell more than 8% on Thursday after the company reported lower-than-expected revenue for the second quarter of its 2019 fiscal year, which ended on May 5, and cut its revenue guidance.

Here are the key numbers for the quarter:

  • Earnings: $5.21 per share, excluding certain items, vs. $5.16 per share as expected by analysts, according to Refinitiv.
  • Revenue: $5.52 billion, vs. $5.68 billion as expected by analysts, according to Refinitiv.

Broadcom's revenue grew 10% year over year in the quarter, according to a statement.

Broadcom's biggest business segment, semiconductor solutions, produced $4.09 billion in revenue, below the $4.18 billion FactSet consensus estimate. The infrastructure software segment, including contributions from the CA business Broadcom acquired in 2018, had revenue of $1.41 billion, below the $1.37 billion FactSet estimate.

In recent weeks other semiconductor companies have lowered their forecasts following the U.S. government's efforts to limit Huawei's ability to purchase products from U.S. companies. Piper Jaffray analysts Harsh Kumar and Matthew Farrell estimated that Huawei represents 3% of Broadcom's revenue at about $150 million per quarter in a note distributed to clients on May 24. The analysts lowered their full-year earnings and revenue estimates for Broadcom in light of the blacklisting, which was announced in mid-May.

Broadcom lowered its guidance for the full 2019 fiscal year, saying it now expects to achieve $22.50 billion in revenue in that period. The consensus among analysts polled by Refinitiv was $24.31 billion in revenue for the 2019 fiscal year. In the previous quarter Broadcom had guided $24.50 billion in full-year revenue.

"We currently see a broad-based slowdown in the demand environment, which we believe is driven by continued geopolitical uncertainties, as well as the effects of export restrictions on one of our largest customers. As a result, our customers are actively reducing their inventory levels, and we are taking a conservative stance for the rest of the year," Broadcom CEO Hock Tan was quoted as saying in Thursday's statement.

Tan elaborated on the situation on Thursday's conference call with analysts, noting that while last year Broadcom received about $900 million in revenue from Huawei, the issues go beyond the dependency on that one company.

"Compression of supply chain is what's driving this reduction more than anything else, and it's broad-based," he said.

At the same time, Tan said the company expects a decline in orders from global device makers, which are working to lower their own inventory levels in the midst of the ongoing U.S.-China trade war.

"The environment is very, very nervous," he said.

Broadcom stock has risen 10% since the beginning of 2019.

WATCH: Chips rebound after trade restrictions temporarily lifted


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Emergency crews survey damage on a rooftop of a building after a helicopter crash in New York City, New York, U.S., June 10, 2019.

New York City Fire Department via Reuters

A helicopter crash on top of a Manhattan office building that killed the pilot and plunged midtown into chaos on Monday afternoon is raising safety questions about choppers flying in the densely populated city.

Federal officials said they are investigating whether the pilot, who was killed after his Agusta A109E helicopter crashed on the roof of 787 Seventh Ave. in heavy fog, violated any flight rules. The pilot was the sole fatality and only person on board the private helicopter.

Helicopter pilots usually contact the tower at LaGuardia Airport in neighboring Queens when they take off from the East 34th Street Heliport, where the helicopter that crashed reportedly took off. But the pilot did not make that contact and there isn't a requirement to do so, according to a Federal Aviation Administration spokeswoman.

The helicopter was also flying in a restricted area, about a half mile from Trump Tower, according to the New York Police Department. The FAA had put restrictions on flights in that area after Trump's election in 2016.

Following Monday's crash, Rep. Carolyn Maloney, a New York Democrat whose district includes a large swath of midtown Manhattan, renewed calls for a ban on "non-essential" helicopters over New York City.

"Today, New York City experienced yet another deadly helicopter crash, this time, with our nightmare of having a helicopter crash into a building," Maloney said in a statement. "We cannot rely on good fortune to protect people on the ground. It is past time for the FAA to ban unnecessary helicopters from the skies over our densely-packed urban city. The risks to New Yorkers are just too high."

The pilot on Monday was flying in low visibility when most other choppers around the city had remained grounded.

"This was not a normal flight," said John Goglia, former member of the National Transportation Safety Board. "I think he was struggling for control and to put it down but he couldn't."

The building does not have a helipad, according to officials. Helipads on buildings have been largely banned from New York rooftops after a helicopter's rotor blade snapped off in 1977 atop what was then the Pan Am building, killing five people. Public helipads in Manhattan, of which there are now three, have been confined to the coasts of the island.

Helicopter accidents are relatively uncommon compared with other modes of transportation, but recent incidents have sparked calls for tighter restrictions.

After a tour helicopter crashed in the East River in March 2018, killing five passengers on board, Maloney and six other lawmakers wrote a letter to the FAA and NTSB to tighten safety regulations for tourism flights.

New York City officials in 2016 announced a plan to halve the number of helicopter tourism flights in the city to 30,000.

New York Yankees pitcher Cory Lidle and his flight instructor were killed in 2006 when Lidle's small plane crashed into a 42-story building on the Upper East Side of Manhattan. Eighteen people were injured in the crash.


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A Hong Kong protest rally on June 9, 2019.

Kelly Olsen | CNBC

Hong Kong runs the risk of losing its special customs status with the U.S. if its autonomy is seen to be eroded with the contentious extradition bill, according to one analyst.

There's much at stake for Hong Kong, a special administrative region in China, with the risk that it is increasingly perceived as a "weak link" amid the U.S-China trade war, Eleanor Olcott, China policy analyst at research firm TS Lombard, wrote in a note on Thursday.

Protesters have taken to the streets in Hong Kong, calling on the government to drop a proposed change to a law that will allow extraditions to China. The heart of the issue, demonstrators say, is the city ceding its autonomy to Beijing.

Under the U.S.-Hong Kong Policy Act of 1992, Washington treats Hong Kong as a separate region from mainland China even after the former British colony transferred to Chinese rule in 1997. That includes treating Hong Kong as a separate customs territory.

Therefore, Hong Kong exports to the U.S. are not subject to the tariffs that the Trump administration has imposed on goods from mainland China.

With the U.S.-China trade fight in full swing, however, "the risk is that (Hong Kong) is seen by the U.S. as a weak link in the economic and technology conflict," wrote Olcott.

That is especially since Hong Kong firms are increasingly turning to the "first sale rule" — which Olcott says is "a legal loophole" in American trade legislation that allows exporters to avoid the full cost of Trump's China tariffs.

Under the  "first sale rule," tariffs are payable on the original price — which in this case, is what the Hong Kong-based company pays the factory in China, instead of the price paid by the American buyer.

"The danger is that the U.S. starts to view this practice as akin to a weak-point in its trade war," she wrote, explaining that some companies could re-route their goods to a third destination in order to avoid higher tariffs.

The extradition bill is posing a risk to Hong Kong — in large part due to its timing, Olcott said, as the U.S. is currently "reappraising its China policy."

"The US administration ... has drifted away from its pre-Trump strategy of deepening economic ties with allies in the region as a hedge against the (People's Republic of China)," she said, citing the U.S. decision to back out of the Trans-Pacific Partnership as an example.

American politicians are already warning about what could come if the extradition bill is passed.

U.S. Speaker of the House Nancy Pelosi suggested that if the extradition changes are made official, Hong Kong may no longer be "sufficiently autonomous" to justify a special trade arrangement between the territory and the United States.

Passing the law could be seen as a "major tipping point" in the erosion of Hong Kong's autonomy and will come "precisely (at) the moment that the U.S. is sharpening its weapons in the trade war," Olcott said.

— CNBC's Grace Shao contributed to this report.


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A Hong Kong protest rally on June 9, 2019.

Kelly Olsen | CNBC

Hong Kong runs the risk of losing its special customs status with the U.S. if its autonomy is seen to be eroded with the contentious extradition bill, according to one analyst.

There's much at stake for Hong Kong, a special administrative region in China, with the risk that it is increasingly perceived as a "weak link" amid the U.S-China trade war, Eleanor Olcott, China policy analyst at research firm TS Lombard, wrote in a note on Thursday.

Protesters have taken to the streets in Hong Kong, calling on the government to drop a proposed change to a law that will allow extraditions to China. The heart of the issue, demonstrators say, is the city ceding its autonomy to Beijing.

Under the U.S.-Hong Kong Policy Act of 1992, Washington treats Hong Kong as a separate region from mainland China even after the former British colony transferred to Chinese rule in 1997. That includes treating Hong Kong as a separate customs territory.

Therefore, Hong Kong exports to the U.S. are not subject to the tariffs that the Trump administration has imposed on goods from mainland China.

With the U.S.-China trade fight in full swing, however, "the risk is that (Hong Kong) is seen by the U.S. as a weak link in the economic and technology conflict," wrote Olcott.

That is especially since Hong Kong firms are increasingly turning to the "first sale rule" — which Olcott says is "a legal loophole" in American trade legislation that allows exporters to avoid the full cost of Trump's China tariffs.

Under the  "first sale rule," tariffs are payable on the original price — which in this case, is what the Hong Kong-based company pays the factory in China, instead of the price paid by the American buyer.

"The danger is that the U.S. starts to view this practice as akin to a weak-point in its trade war," she wrote, explaining that some companies could re-route their goods to a third destination in order to avoid higher tariffs.

The extradition bill is posing a risk to Hong Kong — in large part due to its timing, Olcott said, as the U.S. is currently "reappraising its China policy."

"The US administration ... has drifted away from its pre-Trump strategy of deepening economic ties with allies in the region as a hedge against the (People's Republic of China)," she said, citing the U.S. decision to back out of the Trans-Pacific Partnership as an example.

American politicians are already warning about what could come if the extradition bill is passed.

U.S. Speaker of the House Nancy Pelosi suggested that if the extradition changes are made official, Hong Kong may no longer be "sufficiently autonomous" to justify a special trade arrangement between the territory and the United States.

Passing the law could be seen as a "major tipping point" in the erosion of Hong Kong's autonomy and will come "precisely (at) the moment that the U.S. is sharpening its weapons in the trade war," Olcott said.

— CNBC's Grace Shao contributed to this report.


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A Hyundai NEXO fuel cell vehicle with Aurora self-driving systems.

Aurora

Hyundai Motor Group is investing in Aurora, a developer of self-driving technology for autos, with a plan to bring the systems to Hyundai and Kia models.

The companies have been working for the past year to develop and integrate the "Aurora Driver" into Hyundai's NEXO fuel cell vehicles as well as on other projects.

It's an extension of an existing partnership and furthers the work that large auto manufacturers are doing with developers of driverless technology. General Motors acquired Cruise in 2016, and Ford took a stake in Argo.ai the following year. Aurora still aims to provide autonomous systems to many different players.

On Monday, Aurora announced a partnership with Fiat Chrysler to develop self-driving vehicles for corporate clients. It also works with Chinese electric vehicle maker Byton.

Aurora CEO Chris Urmson

Aurora

In a statement, Aurora co-founder and chief product officer Sterling Anderson — previously the director of Autopilot programs at Tesla — said the company's aim with its partners is to "deliver the benefits of self-driving technology safely, quickly, and broadly." After reportedly failing to acquire Aurora last summer, Volkswagen concluded a partnership with the company on Tuesday.

Aurora employs lidar, or light ranging and detection sensors, as part of its autonomous systems. That's different than Tesla, which uses cameras and radar primarily to power its "full self-driving" and Autopilot features.

Led by CEO Chris Urmson, former technical lead of Google's self-driving efforts, Aurora has raised at least $700 million in funding. Other investors include Amazon, Greylock, Sequoia, Shell Energy's venture group and T. Rowe Price. The size of Hyundai's investment wasn't disclosed.

WATCH: The best way to get self-driving vehicles on the road


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Rendering of Mitsubishi's new medium-range plane, the SpaceJet

Mitsubishi

Mitsubishi Aircraft is getting closer to launching the first Japan-made airliners in more than half a century: the SpaceJet.

The Japanese aircraft manufacturer, a unit of Mitsubishi Heavy Industries, now needs regulators and customers to get on board.

Ahead of the Paris Air Show, Mitsubishi unveiled on Thursday the retrofuturistic new brand name and outlined plans to get the program — long plagued by production delays — finally up in the air.

It tweaked the design of the smaller of the two planes in the Mitsubishi Regional Jet family to lengthen the cabin and downsize the wings. And it recently started test flights for the larger one, the SpaceJet M90 (or MRJ90) with the Federal Aviation Administration and the Japan Civil Aviation Bureau in Washington state, where it recently opened new U.S. headquarters.

The 88-seat M90 has a range of about 1,300 miles, or around the distance between New York and Miami.

The more fuel-efficient planes compared with previous models are part of a wave of designs for aircraft smaller than the single-aisle Boeing and Airbus planes that dominate air travel and fit from about 150 to more than 200 passengers.

Rendering of Mitsubishi's new medium-range plane, the SpaceJet

Mitsubishi

These planes come with large overhead bins, more spacious seats and bigger cabins than some of the older and more cramped regional planes some flyers dread.

Customers for Mitsubishi's M90, which it plans to deliver in 2020, have included Japan's All Nippon Airways (ANA) and SkyWest, a North American regional carrier which counts United Airlines, American and Delta as its clients.

But if Mitsubishi wants to break in to the regional jet market in North America, size matters.

That's because of pilot union rules in the U.S. that cap the number of seats on regional jets at 76 and limits take-off weight, so that more flying isn't outsourced from large, mainline carriers to smaller regional airlines, where crew pay is lower.

So Mitsubishi is offering a tweaked smaller version of the plane, the SpaceJet M100, to fit those rules. It plans to debut the plane's interior at the Paris Air Show.

"In the U.S. market, the aircraft is optimized to be scope clause compliant in the 65-76 seat, three-class cabin configuration," Mitsubishi Aircraft said in a release on Thursday.

The rebranding comes at a turning point for the regional jet industry.

Mitsubishi has reportedly been considering taking over Canadian competitor Bombardier's regional jet business, which would give the Japanese manufacturer access to a large aftermarket support network.

Airbus last year took majority control of Bombardier's C-Series program and renamed the planes A220. And Boeing is in the midst of taking over Brazil-based Embraer's commercial jet business.


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Lilium says its five-seater jets can travel up to 300 kilometers in one hour.

Lilium

Flying cars have for years been limited to the world of fiction. Now there are plenty of companies hoping to make the sci-fi dream a reality.

One such firm is Lilium, a Munich-based start-up with big ambitions for the future of transportation: a five-seater electric air taxi, due to launch commercial flights in 2025.

The main goal Lilium is hoping to achieve, according to Chief Commercial Officer Remo Gerber, is making such a service an affordable one that people can use just like they would a ride-hailing app like Uber.

Around the time Lilium was established, its founders realized they didn't want to make a "luxury product" or "something we sell to rich individuals," but a "service that's affordable," Gerber told CNBC in an interview.

To get a better idea of just how much that would cost, the executive used the example of taking New Yorkers from Manhattan to JFK Airport within six minutes for about $70.

For reference, Uber plans to take passengers in its helicopter ride-sharing service from Manhattan to JFK for a roughly $200 flight that takes around eight minutes.

Lilium says its aircraft, which takes off and lands vertically, can travel 300 kilometers in an hour after a single charge. In the U.K. that means it would be able to take someone from London to Manchester — in other words, from the South to the North of England – in one journey.

In terms of general pricing, Gerber explained that a typical short-distance ride would cost about the same as a trip with a ride-hailing firm like Uber or Lyft. Long-distance flights would cost the equivalent of traveling economy class in an airplane, he added.

With a route like London to Manchester in the U.K., Gerber said, customers would have to fork out a similar amount to what they would pay for a train ticket. According to travel metasearch engine Gopili, an average train ticket on that route costs £60 ($76).

The German start-up's five-seater jet took to the skies for the first time last month, a key milestone for the company. Prior to that, Lilium had tested a two-seater variant in 2017.

Lilium was founded in 2015 by three friends from the Technical University of Munich. To date, it's raised about $100 million from investors including China's Tencent and the London-based venture capital firm Atomico.

Six years from now, Lilium will be available in "a number of cities around the world," Gerber said.

And while Lilium's aircraft is controlled by a pilot, the firm says it's putting together a team of experts focused on unmanned jets. According to Morgan Stanley, the market for autonomous flying cars could be worth $1.5 trillion by 2040.

Other than Uber, Lilium faces stiff competition from major aerospace players Boeing and Airbus, as well as the German start-up Volocopter, which is also working on a vertical take-off and landing air taxi.

Watch: Uber unveiled its flying taxi prototype, which looks like a giant drone


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Zhang Peng | LightRocket | Getty Images

Adidas shares fell 3% on Wednesday on news that one of the German sportswear company's top shareholders, Groupe Bruxelles Lambert (GBL), was preparing to sell a portion of its near 4 billion euro ($4.5 billion) stake, three traders said.

Belgian investment firm GBL was placing a tenth of its 7.5% holding, or 1.37 million shares, at 257.75 euros on the market for sale, a 1.7% discount to Tuesday's closing price, the traders added.

The sale is worth 353.1 million euros.

GBL and Adidas, whose shares hit record highs on Tuesday, declined to comment.

Adidas is in the midst of a share buyback, planning to repurchase 3 billion euros in stock between March 2018 and May 2021, which has gradually pushed up GBL's relative stake.

Adidas share price has more than doubled since GBL invested in the company as CEO Kasper Rorsted focused on improving profitability, expanding in North America and China and boosting online sales.

In GBL's recent annual report, it said it intends not to have a single asset exceeding 15 to 20% of its portfolio. Adidas made up 17.5% of GBL's portfolio at the end of March, with the stock's value surging to record highs this year.

At 0919 GMT, Adidas shares were down 2.6% at 255.4 euros and lagging the broader DAX index, which was down 0.5%.

GBL, founded by Belgium's richest man Albert Frere, who died in December at the age of 92, first invested in Adidas in 2015 with the purchase of a 3% stake.

GBL also holds stakes in some of Europe's biggest companies, including Pernod Ricard, LafargeHolcim, and Total.


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Elon Musk

Jim Watson | AFP | Getty Images

On Tuesday, during Tesla's annual shareholder meeting, CEO Elon Musk said an insurance offering that he expected his car company to launch in May this year is actually still in the works.

Musk said, "We're pretty close to being able to release that. We have a small acquisition that we need to complete and a bit of software to write."

Back in April, Musk said on an earnings conference call that Tesla would be launching its own insurance product in about a month. He said that Tesla has an advantage in insurance, because it has "direct knowledge" of a person's risk profile "based on the car," which gives Tesla an "information arbitrage opportunity."

In 2017, Automotive News reported that Tesla clashed with auto-insurance providers AAA The Autoclub Group when they raised premiums for Tesla drivers, based on research by the Highway Loss Data Institute and others. They had said the Model S and Model X had high claim frequencies and high costs of insurance claims.

The idea behind Tesla offering its own insurance would be to lower rates for drivers, leveraging internal data from Tesla's AutoPilot systems to justify that.

Berkshire Hathaway's Warren Buffet predicted that Tesla will struggle if it goes into the insurance business. "I'd bet against any company in the auto business" getting into insurance, he said. "I worry much more about Progressive." About one third of Berkshire Hathaway's business is in the insurance space and that includes Geico.

-- CNBC's Fred Imbert contributed to this story.

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British consumer goods giant Reckitt Benckiser on Wednesday named PepsiCo executive Laxman Narasimhan to succeed Rakesh Kapoor as chief executive officer.

Narasimhan, PepsiCo's global chief commercial officer, will join Reckitt as CEO-designate and be appointed to the board on July 16.

He will become group CEO on Sept. 1, the company said in a statement.

Narasimhan's initial priorities will be to focus on delivering outperformance, especially in the health business unit, and to drive the Lysol maker's plan to split the firm into two business units under the same company, Reckitt said in a statement.

Kapoor said in January that he would leave by the end of 2019 after more than eight years at the helm.


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The U.S. economy may be pushed into a "Trump recession" if Washington follows through on its threat to impose new tariffs on billions of dollars worth of Chinese goods, the president and CEO of a U.S.-based trade organization said Tuesday.

Speaking to CNBC at the CES Asia technology conference in Shanghai, Gary Shapiro from the Consumer Technology Association called tariffs an "economic fence" and said they are "not a good strategy" to help Washington resolve its trade dispute with Beijing.

"They are taxes, they hurt consumers, they hurt American companies," Shapiro said, noting that positive assessments of U.S. President Donald Trump's hard-line tariff approach are not widely held by economists outside the White House.

As Beijing and Washington remain deadlocked in an increasingly aggressive trade dispute, some economists have said that tariffs on Chinese goods — which Trump has repeatedly said will benefit the U.S. — may eventually backfire and tip the U.S. economy into a recession.

Despite such fears and a worse-than-expected jobs data for May, U.S. Treasury Secretary Steven Mnuchin told CNBC on Sunday that the U.S. economy is still the "bright spot of the world" — and he doesn't see any signs of an economic downturn.

Trump on Monday renewed his tariff threats on China after Myron Brilliant, the head of international affairs at the U.S. Chamber of Commerce, told CNBC that Trump's "weaponization of tariffs" hurts the U.S. economy and "creates uncertainty" with trading partners.

Trump confirmed that an additional raft of levies will be slapped on Beijing if Chinese President Xi Jinping does not show up at the G-20 meeting in Japan — an event investors and economists will be watching for signs of a breakthrough in the trade impasse.

Huawei dispute could 'escalate out of control'

The current tensions between the U.S. and China appeared to reach a new height when Washington placed Huawei on a U.S. entity list in May, limiting the Chinese telecom giant's ability to purchase goods from American firms.

While the U.S. Commerce Department has granted a 90-day reprieve to Huawei, China has already been ramping up development of its own semiconductor industry — which could ultimately hurt the profits of U.S. companies.

According to Shapiro, restrictive measures in the tech space could escalate "out of control" and cause both consumers and U.S. chip companies to be "trampled."

The blacklisting of Huawei will not only push China to become more closed off to the rest of the world, but will also hinder the United States' ability to maintain "world leadership" in the technology market, Shapiro told CNBC's Arjun Kharpal.

"We have these great American chip companies ready to sell to all around the world," he said. "And the fact is, I think the U.S. policy may be really pushing China to do everything by itself, and not only put up walls around China, but we're putting up an economic fence around the United States."

If the U.S. wants to advance "and be innovative, maintain world leadership, we have to be out there in the world marketplace," he added.

President Donald Trump speaks during a press conference with China's President Xi Jinping at the Great Hall of the People in Beijing on November 9, 2017.

Nicholas Asfouri | AFP | Getty Images

Tech bifurcation possible

As tensions between the world's two largest economies rise, experts have said a bifurcation in the global internet space — otherwise known as the "splinternet," with two different systems of technology and regulations — has become increasingly likely.

Shapiro echoed that sentiment, saying that a "standards bifurcation" in tech is a "possibility."

"We see in electricity, different outlets in different regions of the world," he said. "There has been an economic fence put up around China in terms of Internet access,."

However, Shapiro said he believes that countries like the U.S., Europe, Canada, Australia and New Zealand share a "cultural bond" that will drive them together.

"China has a good strategy for China — 1.4 billion people; they feed them, they do good things," Shapiro said. "But the reality is, it's a very insular strategy. That is not something I want as an American."

—CNBC's Arjun Kharpal contributed to this report.


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A Pratt & Whitney PW1000G turbofan engine sits on the wing of an Airbus A320neo aircraft during a delivery ceremony outside the Airbus Group SE factory in Hamburg, Germany, on Friday, Feb. 12, 2016.

Bloomberg | Krisztian Bocsi

United Technologies has struck a deal to combine its booming aerospace business with defense contractor Raytheon, a surprise twist capable of rattling customers and competitors alike.

The deal would create a giant, one-stop shop with products that range from Tomahawk missiles and radar systems to jet engines that power passenger planes and the seats that fill them.

Under one roof, the companies could put more pressure on suppliers and customers as well as encourage their industrial conglomerate competitors to seek deals of their own.

Raytheon and United Technologies have a combined market value of close to $166 billion. The stock price of each has gained more than 21% this year, far outpacing the broader market, as they've reaped the benefits of strong defense spending and record orders for passenger planes around the world.

The new company, which they plan to name Raytheon Technologies, would have approximate annual sales of $74 billion, putting it behind Boeing as the second-largest aerospace and defense company in the U.S. by revenue.

The combined company, with big footprints in both the fast-growing commercial aerospace business and an increase in military spending, may be emboldened to push back on big customers like Boeing, Airbus and Lockheed Martin in terms of pricing, aftermarket work and intellectual property.

Boeing itself has been trying to gain more direct control over certain parts of its supply chain and strengthen its services businesses that can provide revenue streams long after aircraft are delivered.

In June 2018, Boeing 737 said it formed a joint venture with French engine manufacturer Safran to make auxiliary power units for planes, a business that competes directly with United Technologies' Pratt and Whitney unit and with Honeywell.

Earlier that year, Boeing unveiled a joint venture to make airplane seats with Adient.

The United Technology-Raytheon tie-up "creates this monster supplier in aerospace and defense," said Richard Aboulafia, aerospace analyst at Teal Group.

Raytheon and United Technologies don't have a lot of the overlap that generally draws regulatory opposition to such deals. But customers may have other views. Boeing initially expressed concerns about United Technologies' $23 billion-acquisition of avionics and aircraft seat maker Rockwell Collins.

The combination of the two companies may shake up competitors as well. The deal comes just as industrial conglomerates are rethinking their businesses and scrambling to focus on highly profitable units.

United Technologies last November announced it would split into three companies, spinning out its Carrier HVAC business and Otis elevator unit. The aerospace business, which includes United Technologies' newly acquired Rockwell Collins and engine maker Pratt and Whitney, would be the unit merging with Raytheon.

The deal could pressure others in the sector, like Honeywell International and General Electric, both of which make jet engines and other airplane parts and have shed other businesses, to look for partners to bulk up top-performing units.

Last year, military equipment suppliers Harris Corp and L3 Technologies agreed to merge in the largest ever deal for that sector.

"Clearly the logic of size keeps marching on," Aboulafia said. "It increases pressure on them to do something."

The new company, called Raytheon Technologies, would be headquartered in the Boston area. Raytheon is based in Waltham, Mass., a Boston suburb.


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Susan Wojicki CEO of YouTube speaking at the 2019 Code Conference on June 10th, 2019 in Scottsdale, Arizona.

Asa Mathat | Vox Media

SCOTTSDALE, Arizona — YouTube's chief executive apologized on Monday for the hurt she said is caused by videos with anti-gay slurs, but said the company was right to let the videos remain on its service.

CEO Susan Wojcicki, in an on-stage interview at the tech-focused Code Conference in Scottsdale, Arizona, spoke publicly for the first time since YouTube last week imposed a stricter ban on hate speech, including videos that promote ideas of racial superiority.

But rather than being lauded for tackling Nazism, Wojcicki was met with a barrage of questions about videos she has decided to leave up. The questions were prompted by journalist Carlos Maza launching a campaign last month to bring attention to homophobic abuse and harassment he says he received from a conservative YouTube personality.

Maza said that he has been the subject of targeted harassment for years that included both anti-gay and anti-Mexican slurs. Several activists are lobbying to ban YouTube's parent company, Google, from the San Francisco Pride march this month over what they see as the service's inaction.

"I know the decision we made was very hurtful to the LGBTQ community," Wojcicki said. "That was not our intention at all. We're really sorry about that."

But, she added, YouTube looked at the videos in question, "and in the end, we decided it was not violative of our policy."

"I do agree this was the right decision," she said.

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Wojcicki, a high-profile Silicon Valley executive, faced a skeptical crowd at the annual conference for tech and media professionals. When Ina Fried, a journalist from Axios, suggested during a question-and-answer period that Wojcicki wasn't actually sorry, the audience greeted the question with applause.

YouTube, like Facebook and other online services that rely on users for content, is facing growing scrutiny over material that shows violence, promotes hatred or is objectionable in other ways. The service's rulebook bans harassment, for example, but only when it is "malicious."

Wojcicki said that YouTube has a "high bar" for what counts as malicious material, and that the service faced a challenge in being consistent. She said the same rules needed to apply across the board, including to late-night comedy shows or rap music videos.

Last week, YouTube said it would begin banning videos promoting Nazi ideology and those denying "well-documented violent events" such as the Holocaust or the Sandy Hook massacre.

The service is the biggest of its kind, with users uploading more than 500 hours of video per minute on average.

Interviewer Peter Kafka, senior correspondent for digital tech website Recode, which hosted the conference, pressed Wojcicki on whether she was sorry, or just sorry that people expressed offense. Wojcicki apologized again.

"I'm really personally very sorry. It was not our intent," she said. "YouTube has always been a home of so many LGBTQ creators."

"As a company we really want to support this community, but from a policy standpoint we need to be consistent," she added. "We don't just want to be knee-jerk."


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Salesforce CEO Marc Benioff defended his company's largest acquisition to date in a Monday appearance on CNBC's "Mad Money."

The stock plummeted as much as 8% during the session before paring losses and closing down 5.26%. Salesforce announced Monday it would purchase data visualization firm Tableau for $15.3 billion in stock.

"Tableau didn't want our cash — they wanted our equity, because they know that the real value here is in the company that we're creating together," Benioff told Jim Cramer in an interview. "We would have been more than happy to give them any currency they wanted, but ultimately they want our stock and, hey, I can't blame them."

Salesforce, which offers a cloud-based customer relationship management platform, is finding strong growth in helping clients in digital transformation. Benioff said the merger between the two software companies helps his company complete the third leg to support that segment.

The first two cornerstones, he said, are the customer and data integration, which was aided by the company's $6.5 billion purchase of Mulesoft in 2018. Tableau fulfills the need for analytics and visualization that companies need to track business operations.

"There's no more amazing company in that category than Tableau, whose mission is to make sure that the world can see and understand data, and that is what excites us, as well," Benioff said.

Salesforce's stock price fell more than $8 during the session after investors learned that the Tableau deal would put a dent in its fiscal 2020 earnings.

Tableau, on the other hand, saw its shares touch an all-time high of $173.37 before settling around $167. The stock gained 33.70% in the session.

Cramer chats with Marc Benioff about Salesforce's acquisition of Tableau

Disclosure: Cramer's charitable trust owns shares of Salesforce.com.

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In most public and private schools across the nation, Chromebooks, iPads or Windows devices are everywhere.

But things look very different at Waldorf Schools, where technology and screens aren't used at all through 8th grade, and are scarce even in high school. The Waldorf teaching philosophy is used at more than 1,000 institutions in 91 countries, including 136 schools in the U.S.

Watch the video to see what a Waldorf School is like, and why parents are seeking them out in places like Silicon Valley.


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Sending everyday people to space has been a dream since the days of the Apollo missions but space travel has long been out of reach for all but a select few humans in history.

However, space tourism is slowly coming closer to reality, with companies like Richard Branson's Virgin Galactic and Jeff Bezos' Blue Origin closing in on taking short trips up to the edge of space and back.

But what if spaceships went farther — and faster?

A recent UBS report analyzed the market for what's known as point-to-point space travel. It's been touted by SpaceX as one of the business lines of the massive Starship rocket that Elon Musk's company is developing.

In essence, point-to-point space travel would be the equivalent of flying on an airplane across the world — but in less than an hour, rather than 16 hours.

UBS believes that, if the obstacles to point-to-point space travel can be overcome, the service would represent an annual market of more than $20 billion.

But some disagree, saying the technology's safety is nowhere close to being reliable or that the travel method doesn't solve key logistical issues to long haul air travel.

Watch the video above to learn more about Elon Musk's goal of point-to-point space travel and the challenges implementation may face.

See more:


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Passengers' luggage and passengers are seen during the weather-related cancellation at the John F. Kennedy Airport in New York.

Mohammed Elshamy | Anadolu Agency | Getty Images

Airlines spend a great deal of time, energy and money competing against each other for your travel dollars and loyalty, even though high fares and excessive fees often make it seem like they're in cahoots to make sure your journey is a frustrating, expensive nightmare.

But sometimes the industry works together to take global action in your favor.

At the International Air Transport Association's recent annual meeting, the industry trade group passed a handful of resolutions aimed at making the passenger experience better for everyone. Two of the resolutions that might make a noticeable difference on your next flight, and on flights into the future, address bag tracking and accessibility for people with disabilities.

Better baggage tracking. Fewer lost bags.

Most frequent travelers can share a story or two about a checked bag that got mangled, arrived days late or went missing. But while passenger numbers soared 64% between 2007 and 2017, information technology company SITA found that the bag mishandling rate per thousand of passengers fell by 70.5%.

In 2018, 4.36 billion travelers checked in more than 4.27 billion bags.

"More bags makes things more challenging," said Peter Drummond, SITA's director of baggage. "Everyone across the industry needs to look beyond the process and technology improvements made in the past decade and adopt the latest technology such as tracking to make the next big cut in the rate of mishandled bags."

Right now, most airlines use bar code technology to track bags along the journey. But some airlines, such as Delta, have switched to RFID (radio frequency identification) tracking, a form of wireless communication used to track objects with an embedded RFID chip.

IATA considers RFID tracking to be a more cost-efficient method to achieve the industry's target of 100% bag tracking. And at its annual general meeting, IATA adopted a resolution supporting the global deployment of RFID.

"Passengers want to arrive with their bags. And on the rare occasion when that does not happen, they want to know exactly where their bag is," said Alexandre de Juniac, IATA's director general and CEO. "Deploying RFID and adopting modern baggage messaging standards will help us to cut mishandlings by a quarter and recover bags that are mishandled more quickly."

While fewer lost bags will make airline customers happy, the push for RFID tracking move isn't entirely altruistic.

While the industry has already seen a 46.2% cut in the annual cost of baggage mishandling due to better tracking, IATA estimates industry-wide adoption of RFID bag tracking will see a return on investment of over $3 billion to the industry.

Smoother travel for passengers with disabilities

About 1 billion people – 15% of the world's population – live with some form of disability.

The World Health Organization expects this number to rise due to aging populations, the spread of chronic diseases, better measurement tools and refinements in the definition of what constitutes a disability.

Of course, people with disabilities are also travelers. An Open Doors Organization market study from 2015 found that adults with disabilities spend $17.3 billion annually on their own travel. ODO said since these individuals typically travel with one or two other adults, the economic impact is at least doubled, to $34.6 billion.

But air travel poses a myriad of challenges for people with disabilities.

Note: Southwest's figures do not include any manual wheelchairs. American said the way it accounted for the number of wheelchairs enplaned may not have been consistent across all of its operating units and its code sharing partners during the period studied.

For example, between Dec. 4 and Dec. 31, 2018 (the first month the Department of Transportation required airlines to track this category) major U.S. carriers mishandled more than 700 wheelchairs and scooters, more than 2% of the 32,229 mobility devices loaded on airplanes.

"That's 25 people a day who may have been stranded, unable to work or participate in a family activity," said Chris Wood of Flying Disabled.

Noting that improving the air travel experience for people with disabilities is not only "the right thing to do," but good for business, IATA also passed a resolution committing airlines worldwide to ensuring that passengers with disabilities have access to safe, reliable and dignified travel.

An elderly Southwest Airlines passenger needing assistance is pushed through the terminal in a wheelchair supplied by the airline company at Albuquerque International Sunport in Albuquerque, New Mexico.

Robert Alexander | Getty Images

The industry trade group said its aim is to change the focus "from disability to accessibility and inclusion" by bringing the travel sector together with governments to "harmonize regulations and provide the clarity and global consistency that passengers expect."

In its resolution, IATA says one option under consideration is developing standard practices worldwide for loading passengers' moblity aids.

The resolution has the ability to enhance the passenger experience not only for people who currently have disabilities, but also for those in years to come, said Eric Lipp, founder and executive director of ODO.  Organization.

"Most importantly," said Lipp."This is the first time IATA has recognized this on an international level. And this is in good timing with the UN Convention on the Rights of Persons with Disabilities. Globally the time is right. "


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Chinese President Xi Jinping attends a Russian-Chinese energy and business forum on the sidelines of the St. Petersburg International Economic Forum (SPIEF), Russia June 7, 2019.

Maxim Shemetov | Reuters

China will not allow the U.S. to interfere in its legislative process and economic policies, but it seems to be showing a readiness to keep its sales in American markets on a steep and steady downward path.

According to data released June 6 by the U.S. Department of Commerce, Chinese goods exports to the U.S. in the first four months of this year declined 12.8% from the same period of 2018, driving the trade surplus down 10%.

Although Chinese data released Monday morning point to a widening Chinese surplus on U.S. trade in the course of May, that wasn't directly comparable to U.S. figures because of differing methodologies. Regardless, the trend of more balanced trade will — and must — continue if Beijing wants to return to normal trade relations with Washington.

Indeed, the signal is clear that China has decided to operate a radical change in its U.S. trade. Taken at an annual rate, China's trade surplus with the U.S. in the January-April interval would be 23.5% below China's surplus for all of last year.

It is a great pity the U.S. and China missed a chance to initiate such a rebalancing trend of their bilateral trade accounts when the Trump administration took office in January 2017.

China's leaders were warned during the U.S. presidential campaign in 2015 and 2016 that Donald Trump, if he became president, would not tolerate excessive and systematic Chinese trade surpluses on their U.S. trades. As the saying goes, China could read the writing on the wall.

China's finally made a wise move

Why Beijing decided to aggravate its trade case with a $901.7 billion merchandise trade surplus during the tenure of an administration virulently opposed to such trade developments is a mystery.

Washington, therefore, could be forgiven for seeing such Chinese policy behavior as a brazen provocation that required a strong American response. And that's what the U.S. did by building a trade complaint including intellectual property violations, forced technology transfers, illegal industry subsidies, non-tariff trade barriers, restricted access to American firms on Chinese markets, Beijing's exchange-rate manipulations and more.

Briefly put, China found itself in a situation where the U.S. called for far-reaching legislative changes in Beijing and closely scrutinized monetary policies as conditions for balancing U.S.-China trade accounts and a continuation of fair, free and reciprocal trade relations.

And as China balked at Washington's demands — while continuing to accumulate nearly a trillion dollars of U.S. trade surpluses on Trump's watch — America stepped up pressure with trade tariffs, adopted an increasingly firm negotiating stance and limited access to U.S. markets and technologies for Chinese companies.

By appearing to ignore Washington's trade warnings, China just made things difficult for itself. Beijing is now doing, under duress, what it should have done three years ago under much more favorable conditions, if it genuinely wanted to promote its policy of harmonious "great power relations."

It is, therefore, pleasing to read the reported comments, made last Friday, by Chinese President Xi Jinping at an international economic forum in Russia: "It's hard to imagine a complete break of the United States from China or of China from the United States. We are not interested in this, and our American partners are not interested in this. President Trump is my friend and I am convinced he is also not interested in this."

The Fed has plenty of room to support the economy

A very welcome sea of change indeed, and an auspicious sign for Xi's meeting with Trump during the G-20 meeting in Osaka, Japan later this month.

China has definitely decided, at the highest levels of state, that a balanced trade relationship with the United States is in the best interest of its economy, its tenuous security ties in Asia and the major role it wishes to play on the world stage.

Such a policy always made sense.

As big as China's exports to the U.S. are — $422.4 billion at an annual rate in the first four months of this year — that is small change compared to what its companies can earn by focusing on vast programs of, what Xi called, "the great rejuvenation of the Chinese nation."

China's estimated 300-plus million middle class citizens represent a formidable market to serve with increasingly sophisticated products and services. And they now seem to be more interested in lucrative investments at home, instead of dropping their millions on overseas trophy purchases.

The only thing I don't like about those new China numbers on U.S. trade are Beijing's precipitously falling purchases of American goods. China's imports from the United States in the January-April interval were a pitiful $34 billion, a whopping 21% decline from the year earlier, and only 24% of what China sold to the U.S. during the same period.

That's got to change. Washington should insist that the balancing of bilateral trade accounts must substantially raise the volume of Chinese purchases of American goods and services.

At any rate, markets can now confidently expect that the big realignment of U.S.-China trade flows is finally under way.

With the prospect of the trade war now virtually over, markets can also count on the Federal Reserve's ample liquidity provisions.

The Fed is trimming its huge balance sheet — $3.3 trillion as of June 5, 2019 — while still maintaining an extraordinarily large amount of bank's excess reserves: $1.4 trillion of funds that banks are ready to lend to businesses and households. And that's what the banks are doing. Their lending to households accelerated in the course of April at an annual rate of 6%.

The doomsayers should note that easy credit and strong labor markets have kept U.S. household spending (about 70% of GDP) growing at an annual rate of 2.8% during the first four months of this year. That's an acceleration from the pace in the previous four months, when consumer outlays are traditionally high as a result of year-end holidays.

Investment thoughts

Trade problems with China are on the mend. China's excessive trade surpluses on U.S. trades have been falling in the first four months of this year at an annual rate of 10%. On current trends, that surplus could fall 24% by the end of this year.

Markets can consider that the big China trade issue is mostly out of the way.

The Fed — a much more important market mover — is maintaining extraordinarily easy liquidity conditions, and it has ample room to do more in an unlikely case of weakening labor markets, falling household incomes and a sustained decline of household consumption.

U.S. equities are still some of the best global assets available.

Commentary by Michael Ivanovitch, an independent analyst focusing on world economy, geopolitics and investment strategy. He served as a senior economist at the OECD in Paris, international economist at the Federal Reserve Bank of New York, and taught economics at Columbia Business School.


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Yichuan Cao | NurPhoto | Getty Images

Claire Stapleton, an employee at Google's YouTube who spearheaded employee-led policy change movements, has left the company after 12 years, claiming retaliation by company leaders.

"The heads of my department branded me with a kind of scarlet letter that makes it difficult to do my job or find another one," Stapleton wrote in a note shared on Medium on Friday morning. "If I stayed, I didn't just worry that there'd be more public flogging, shunning, and stress, I expected it."

Stapleton, a YouTube marketing manager, confirmed with CNBC that she quit on Wednesday. Her departure comes as some Google employees claim they have faced retaliation for questioning the company's handling of policies spanning anti-harassment to equal rights for contractors.

Stapleton was one of seven Google employees who organized a massive protest, called the Google Walkout for Real Change, in which 20,000 Google employees and contractors in 50 cities walked off campuses last November to protest the company's handling of sexual harassment cases. That resulted in Google changing some of its policies, including ending forced arbitration.

Stapleton claimed that while Google publicly praised her and the organizers' work, it was a different story internally, alleging managers retaliated against her and a fellow Walkout organizer. Stapleton said at the time that she was demoted and told to take medical leave even though she wasn't ill.

Walkout organizers again questioned the company's public branding this week when YouTube flip-flopped its enforcement of anti-harassment policies for a far-right user who regularly featured homophobic and racial slurs, all while claiming to support LGBTQ employees for Gay Pride Month. Stapleton left that day, though it isn't clear whether the incident had a direct bearing on her departure.

"I hope that leadership listens," Stapleton continued in her Medium post. "Because if they won't lead, we will."

Google said in a statement, "We thank Claire for her work at Google and wish her all the best. To reiterate, we don't tolerate retaliation. Our employee relations team did a thorough investigation of her claims and found no evidence of retaliation. They found that Claire's management team supported her contributions to our workplace, including awarding her their team Culture Award for her role in the Walkout."

WATCH NOW: Google employees protest the company's harassment policies.


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A promotional person vaping.

John Keeble | Getty Images

U.S. regulators slapped four e-cigarette companies with warning letters Friday for failing to follow federal advertising rules for tobacco on Instagram, Facebook and Twitter.

The Food and Drug Administration and Federal Trade Commission reprimanded Solace Technologies, Hype City Vapors, Humble Juice Co. and Artist Liquids Laboratories for failing to disclose the health and safety risks of vaping in postings by social media influencers who are paid to help market their products.

Regulators say the companies violated advertising rules and misbranded their products by failing to include the statement: "WARNING: This product contains nicotine. Nicotine is an addictive chemical," which the FDA has required since August.

"Given the significant risk of addiction, the failure to disclose the presence of and risks associated with nicotine raises concerns that the social media postings could be unfair or likely to mislead consumers," the agencies said in separate letters to all four companies. They also told the companies to review their marketing materials and postings by social media influencers to ensure they include the proper disclosures and warnings.

Regulators do not restrict companies from using this kind of marketing to promote e-cigarettes. However, the FDA requires them to include a warning statement saying the products contain nicotine and that nicotine is an addictive chemical.

"Years of progress to combat youth use of tobacco is now threatened by an epidemic of e-cigarette use by kids, and unfortunately research shows many youth are mistaken or unaware of the risks and the presence of nicotine in e-cigarettes," acting FDA Commissioner Ned Sharpless said in a statement. "That's why it's critical we ensure manufacturers, retailers and others are including the required health warning about nicotine's addictive properties on packages and advertisements — especially on social media platforms popular with kids."

Influencers are individuals who have a large number of followers and are often paid to help promote products on Twitter, Instagram and Facebook where it appears to be more authentic than an advertisement. Using social media is a popular form of e-cigarette advertising, though the practice is coming under scrutiny. Market leader Juul shuttered its accounts in the fall amid pressure from the FDA, which has an ongoing investigation into the company's marketing practices.

The FDA is trying to crack down on what it's calling a teen vaping "epidemic." High school seniors' use of e-cigarettes surged 78% last year, according to a federal survey.

Public health groups have called on regulators to restrict e-cigarette advertising. Philip Morris International's use of influencers to promote its new heated tobacco product iQOS came under fire after Reuters found one of the models was 21, violating the company's marketing code, and posted seductive photos in luxurious settings. The company in response suspended its social media campaign.

The four companies cited Friday have 15 working days to respond to concerns regulators raised and specify what actions they're taking to address them.

A Solace Vapor spokesman said all of its "internal packaging, marketing and nicotine warnings are compliant with FDA standards" and it will review and terminate influencers "who may not be compliant with our marketing practices." The other three companies did not immediately respond to CNBC's request for comment.


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Canadian Minister of Finance William Morneau speaks at the World Bank Group/International Monetary Fund Annual Meetings in Washington on October 12, 2017.

Saul Loeb | AFP | Getty Images

I can't say that I necessarily have a sense of optimism, because we're at an impasse. It's a difficult moment.

Bill Morneau

finance minister, Canada

Complicating the situation is continued tension between the United States and China. Canada is a close ally of the U.S. and has been accused by China's state-run media of helping Washington humiliate Beijing.

Morneau, speaking to CNBC's Nancy Hungerford on Saturday, said the U.S.-China relationship is integral to how his country can move forward with Beijing. But Washington and Beijing have halted high-level talks, and any progress between Canada and China appears stalled for now, he said.

"Generally, what we can say quite clearly is the idea that we're going to put people in jail around effectively a trading issue is just inappropriate. There's no way for us to conduct business over the long term — that's been clearly communicated," the minister said at the G-20 Summit and Ministerial Meetings in Japan.

"I can't say that I necessarily have a sense of optimism, because we're at an impasse. It's a difficult moment," he added.

China's cancellation of canola shipments from Canada also doesn't make sense, according to Morneau, adding that he's concerned Beijing could extend the same treatment to other products from his country.

"I don't want to speculate on what might be next but we don't think that ... the stoppage of canola trade is really one that's done on grounds that make sense," he said.

"And of course we're concerned with the spectra of other products being either delayed at the border or in some way taken out of the trading relationship," the minister added. "This is a real concern."

'Good news' that Mexico tariffs are off table

WATCH: Canada to move 'in tandem' with the US to ratify the USMCA


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A number of hotel CEOs at the NYU Hospitality Conference in New York this week said tariffs and heightened rhetoric between officials in Washington, D.C., and Beijing have made the U.S. a less appealing destination for international travelers.

"The concern is that the image out around the world, where millions and millions are traveling for the first time, is that the U.S. is not a welcoming destination … and we continue to lose market share," Jonathan Tisch, CEO and chairman of Loews Hotels, told CNBC.

The latest data from the U.S. Commerce Department shows Chinese tourism to the U.S. has dropped for the first time in 15 years amid the ongoing trade war.

However, the U.S.-China tensions have emboldened U.S. hotel operators to double down on their expansions across China to ensure they get their brand in front of the important Chinese traveler.

Large hotel operators Marriott, Hilton and Hyatt have been aggressively expanding across China in 2019.

"On a global basis, one of the key megatrends is Chinese outbound travel," Hyatt CEO Mark Hoplamazian told CNBC.

Hyatt operates 70 hotels and counts 100 more in development across the country.

Intercontinental Hotels Group, the owner of Holiday Inn and Kimpton Hotels, is also laser-focused on expanding across China.

"I was just over in China two weeks ago and talking to top developers in China," IHG CEO Keith Barr told CNBC. "They are signing more hotels with us. We've just signed our 400th hotel there and have 400 more in development — so, real momentum there. But there is that uncertainty [due to tariffs]."

While market participants have grown worried about a consumer boycott of American brands in China, major hotel operators do not see signs of one inside the country.

"We haven't seen anything that would lead us to be concerned about that," Hyatt's Hoplamazian said. "I would also point out that we are a significant employer in China. We've got a number of important partnerships with major Chinese corporations that own our hotels. When you really think about the impact of a boycott or some sort of action against a brand like ours, it would actually impact a lot of local Chinese businesses including some state-owned enterprises."

Hyatt and IHG are also seeing opportunity in Vietnam, which has increasingly become a bigger tourist destination.

"One interesting thing I always pay attention to is do you see foreigners going into a country and buying real estate," said Hoplamazian. "And we've seen a surge in real estate acquisitions in Vietnam's resort destinations. A lot of people from China, Korea, even Japan are buying resort properties [in Vietnam]. We see this as a sign of an attractive market."

Vietnam has become a bigger focus for manufacturing, as well, with more U.S. companies looking to decouple from China in light of tariffs.

A recent study from Nomura's Asia team found that Vietnam is by far the largest beneficiary of the U.S.-China trade diversion, gaining 7.9% of GDP between the first quarter of 2018 and the first quarter of 2019.


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Chesnot | Getty Images

Dozens of social media accounts displaying suspicious behavior have been uncovered in a new report that sees pro-Iranian messaging promoted by profiles impersonating real people, as well as journalists and activists who don't seem to exist.

The accounts, which promoted often aggressive messages and hashtags in support of the Iranian government, have also taken on the personas of Republican members of congress and ordinary Americans, according to the latest investigative report from California-based cybersecurity firm FireEye.

The firm describes their findings as a "network of social media accounts" impersonating U.S. political candidates and "leveraging U.S. and Israeli media in support of Iranian interests."

While Iranian influence campaigns carried out from within the country are not new, FireEye's findings dissect yet more individual accounts that have surfaced in various media outlets engaging in "inauthentic behavior … that we assess with low confidence was organized in support of Iranian political interests," the report's authors said.

These profiles were included in a sweep of nearly 3,000 Twitter accounts that were removed by the social media giant, who says they originated in Iran. 

Yoel Roth, head of site integrity at Twitter, posted a tweet last week saying that the accounts "employed a range of false personas to target conversations about political and social issues in Iran and globally. Some engaged directly through public replies with politicians, journalists, and others."

Hijacking real people's pictures with multiple names and locations

FireEye itself stresses the words "low confidence", adding that it has not yet been able to attribute the activity to a geographic location or to Iranian state sponsorship. But the behavior follows patterns that the company investigated last year, illustrated in its August 2018 report that uncovered an extensive network of fake news sites and associated accounts it believes were linked to the Islamic Republic and government cyber actors.

"Narratives promoted by these and other accounts in the network included anti-Saudi, anti-Israeli, and pro-Palestinian themes," the report mentioned. This included support for the 2015 Iran nuclear deal and criticism of the Trump administration's designation of Iran's Islamic Revolutionary Guard Corps (IRGC) as a Foreign Terrorist Organization.

While much of those positions are held by ordinary people, FireEye describes "several limited indicators that the network was operated by Iranian actors." Iran's Foreign Affairs Ministry did not reply to CNBC's request for comment, but the government in Tehran has denied accusations of offensive cyber activity.

Journalists that don't exist

Some accounts with American names of individuals claiming to be U.S.-based journalists — one for instance called "@AlexRyanNYC" who falsely claimed to be a Newsday journalist and had appropriated a genuine person's photo — had their under interfaces set to Persian or had posted tweets in Persian years back in their history, the report described. These individuals could not be traced to any other legitimate public profiles or company bios.

Another highlighted account in the FireEye report was a persona called "Mathew Obrien", who also claimed to be a Newsday reporter and had pro-Iranian government 'letters to the editor' published in various local U.S. newspapers in Texas.

The name would appear with slight spelling variations — also spelled Matthew O'Brien and Mathew Obrien — and claimed to be based in several different U.S. cities, while posting tweets in often faulty English, the report claimed. Several of the personas in this network falsely claimed affiliations with U.S. outlets like New York Daily News and the Seattle Times, and would often promote each other's tweets.

Lee Foster, FireEye's senior manager for information operations analysis, says the accounts are still being investigated.

"Some of (the personas) use the same headshot in different forums with different names, some submitted identical letters (to newspapers) but under different names… this leads us to suspect, with low confidence, that they're inauthentic. We do know it's possible that there is some authentic behavior there as well, but collectively, it's all very unusual."

Geographic attribution is hard to attain however, and the clues vary, he says. "You're looking for stronger technical indicators tying it to a geography, to a state, more than simply the behavior."

In previous investigations, FireEye's intelligence analysts have spotted indicators like heavy use of Persian language or Iranian phone numbers used to register accounts. Technical clues, like those found in cases of Russian-led security breaches, include forensic indicators in the malware being used. Persian has also been found in ransomware code targeting systems in different countries including Saudi Arabia, South Korea and the U.S.

Political influence campaigns: no signs of stopping

Political influence campaigns, lately most associated with Russia but practiced by numerous actors, are on the rise as social media platforms and governments grapple with how to combat them.

Iran has been testing social media, influence campaigns and "temporary disruptive effects, similar to its data deletion attacks against dozens of Saudi governmental and private-sector networks in late 2016 and early 2017," officials from the Office of the Director of National Intelligence (ODNI) told Congress in January.

U.S. social media companies like Facebook and Twitter are increasingly — but tentatively — cooperating with U.S. intelligence on monitoring for misinformation campaigns, ODNI director Dan Coates said at the time, but the debate over the companies' roles in policing and removing online content continues.

CNBC's Kate Fazzini contributed to this report.


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