April, 2017

 

Twitter posts strongest growth in monthly users in a year

(Reuters) – Twitter Inc reported its strongest growth in monthly active users in more than a year and a much better-than-expected quarterly profit, despite stiff competition from Facebook and Snapchat, sending its shares up 11 percent.

The microblogging service said average monthly active users increased 6 percent to 328 million in the first quarter from a year earlier.

Analysts on average had expected 321.3 million monthly active users, according to market research firm FactSet StreetAccount.

Revenue fell 7.8 percent to $548.3 million, its first drop since its initial public offering.

Net loss narrowed to $61.6 million, or 9 cents per share, in the first quarter ended March 31, from $79.7 million, or 12 cents per share, a year earlier. (bit.ly/2phNNZH)

Twitter’s user growth has stalled in the past few quarters and the company has been trying to convince advertisers that it will strengthen its user base.

As part of its efforts, the company has updated its product offerings including live video broadcasts from its app and launched new features to attract users.

Twitter’s weak performance has raised questions about CEO Jack Dorsey’s leadership and whether the company would be bought by a bigger media firm. Financial markets speculated about a sale of Twitter last year, but no concrete bids were forthcoming.

Excluding items, the company earned 11 cents per share, beating the estimate of 1 cent per share.

Twitter’s advertising revenue fell 11 percent to $474 million in the quarter, above the average analyst estimate of $442.7 million, according to market research firm FactSet StreetAccount.

(Reporting by Rishika Sadam in Bengaluru; Editing by Saumyadeb Chakrabarty)

 


Turkey says detains 1,000 ‘secret imams’ in police purge

ANKARA (Reuters) – Turkish authorities arrested more than 1,000 people on Wednesday they said had secretly infiltrated police forces across the country on behalf of a U.S.-based cleric blamed by the government for a failed coup attempt last July.

The nationwide sweep was one of the largest operations in months against suspected supporters of the cleric, Fethullah Gulen, a former ally of President Tayyip Erdogan who is now accused by the government of trying to topple him by force.

Interior Minister Suleyman Soylu said the overnight crackdown targeted a Gulen network “that infiltrated our police force, called ‘secret imams’.

“One thousand and nine secret imams have been detained so far in 72 provinces, and the operation is ongoing,” he told reporters in Ankara.

In the aftermath of the failed July coup, authorities arrested 40,000 people and sacked or suspended 120,000 from a wide range of professions including soldiers, police, teachers and public servants, over alleged links with terrorist groups.

The latest detentions came 10 days after voters narrowly backed plans to expand Erdogan’s already wide powers in a referendum which opposition parties and European election observers said was marred by irregularities.

The referendum bitterly divided Turkey. Erdogan’s critics fear further drift into authoritarianism, with a leader they see as bent on eroding modern Turkey’s democracy and secular foundations.

Erdogan argues that strengthening the presidency will avert instability associated with coalition governments, at a time when Turkey faces multiple challenges including security threats from Islamist and Kurdish militants.

“In Turkey, there was an attempted coup with a goal of toppling the government and destroying the state,” he told Reuters in an interview late on Tuesday.

“We are trying to cleanse members of FETO inside the armed forces, inside the judiciary and inside the police,” he said, using an acronym for the label, Gulenist Terrorist Organisation, which the government has given to Gulen’s supporters.

The president compared the struggle against Gulen with the state’s battle against Islamic State and Kurdish PKK militants, who are designated terrorist organizations by Turkey, the European Union and the United States.

“We are going to keep up the fight in terms of democracy, fundamental rights and liberties, but at the same time we are going to keep up the fight against PKK, FETO and other terrorist organizations such as Daesh (Islamic State),” he said. “We will continue down this path in a very committed fashion.”

Mass detentions immediately after the attempted coup were supported by many Turks, who agreed with Erdogan when he blamed Gulen for orchestrating the putsch which killed 240 people, mostly civilians. But criticism mounted as the arrests widened.

Many relatives of those detained or sacked since July say they have nothing to do with the armed attempt to overthrow the government, and are victims of a purge designed to solidify Erdogan’s control.

(Editing by Dominic Evans and Angus MacSwan)


World stocks hit record high as corporate America shines

LONDON (Reuters) – World stocks hit a record high on Wednesday after strong earnings and the prospect of tax cuts for corporate America boosted U.S. shares and the euro held on to recent gains as political concerns in France ebbed.

European shares edged higher towards 20-month highs hit earlier this week after centrist Emmanuel Macron’s win in the first round of French presidential elections considerably reduced the risk of a French exit from the single currency.

On Wednesday, high-than-expected earnings from European companies helped European stocks reverse early falls and edge higher.

“We have had 25 percent of companies reporting, and a majority of those have beaten estimates,” said Emmanuel Cau, global equity strategist at JP Morgan.

“Pretty much every single euro zone data point out has surprised to the upside, and this is driving upgrades.”

Overall, first-quarter earnings for STOXX 600 companies were expected to rise 5.5 percent, according to Thomson Reuters I/B/E/S data. Revenues are expected to increase 5.7 percent.

That compares to the 11.4 percent earnings growth expected for top U.S. companies.

The euro EUR= held on to the bulk of the gains made earlier this week; it fell 0.27 percent to $1.0897 against a strengthening dollar, but is still up over 1.5 percent from Friday’s close.

Against a backdrop of receding concern over the French presidential elections, U.S. President Donald Trump struck a conciliatory note and flagged tax cuts, boosting investor optimism and demand for risky assets.

This, along with a strong set of earnings for U.S. companies for the first quarter pushed the MSCI world equity index .MIWD00000PUS, which tracks shares in 46 countries, up 0.1 percent to a fresh record high. It is up nearly 2 percent this week and 8.35 percent since the start of the year.

“On top of (the French election result) we have had a very decent set of corporate earnings in the U.S. and that helped push the market further along the same direction,” said Investec economist Philip Shaw.

“I am unsure how further along we really are on the tax cutting agenda, but it is certainly not doing market sentiment any harm,” he added.

Further details on President Trump’s tax cutting plans are expected to be announced later on Wednesday, potentially reviving reflation bets.

The threat of a U.S. government shutdown this weekend also receded after Trump backed away from demanding Congress include funding for his planned border wall with Mexico in a spending bill.

The slew of positive news pushed the Nasdaq composite to a record high on Tuesday while the Dow and S&P 500 brushed against recent peaks.

U.S. Treasury yields, meanwhile, rose above 2.30 percent for the first time in two weeks. US10YT=RR

“U.S. bond yields have broken higher without the support of commodity prices which is one of the clearest signs that the Trump trade is back,” Morgan Stanley analysts said in a note.

Oil prices LCOc1 resumed their downward trend on Wednesday as data showed a rise in U.S. crude inventories and record supplies in the rest of the world cast doubt on OPEC’s ability to cut supplies and tighten the market.

Euro zone government bond yields nudged up ahead of Trump’s keenly anticipated tax announcement.

Investors were also looking ahead to Thursday’s policy meeting of the European Central Bank.

While no changes are expected, policymakers see scope for sending a small signal in June towards reducing monetary stimulus, according to sources, another factor underpinning the single currency.

For Reuters Live Markets blog on European and UK stock markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets

(Additional reporting by Helen Reid, Editing by Toby Chopra)


U.S. moves THAAD anti-missile to South Korean site, sparking protests

SEOUL (Reuters) – The U.S. military started moving parts of an anti-missile defense system to a deployment site in South Korea on Wednesday, triggering protests from villagers and criticism from China, amid tension over North Korea’s weapons development.

The earlier-than-expected steps to deploy the Terminal High Altitude Area Defense (THAAD) system was also denounced by the frontrunner in South Korea’s presidential election on May 9.

South Korea’s defense ministry said elements of THAAD were moved to the deployment site, on what had been a golf course, about 250 km (155 miles) south of the capital, Seoul.

“South Korea and the United States have been working to secure an early operational capability of the THAAD system in response to North Korea’s advancing nuclear and missile threat,” the ministry said in a statement.

The battery was expected to be operational by the end of the year, it said.

The United States and South Korea agreed last year to deploy the THAAD to counter the threat of missile launches by North Korea. They say it is solely aimed at defending against North Korea.

But China says the system’s advanced radar can penetrate deep into its territory and undermine its security, while it will do little to deter the North, and is adamant in its opposition.

“China strongly urges the United States and South Korea to stop actions that worsen regional tensions and harm China’s strategic security interests and cancel the deployment of the THAAD system and withdraw the equipment,” Chinese foreign ministry spokesman Geng Shuang told a briefing.

“China will resolutely take necessary steps to defend its interests,” Geng said, without elaborating.

China is North Korea’s sole major ally and is seen as crucial to U.S.-led efforts to rein in its bellicose, isolated neighbor.

The United States began moving the first elements of the system to South Korea in March after the North tested four ballistic missiles.

South Korea has accused China of discriminating against some South Korean companies operating in China because of the deployment.

The liberal politician expected to win South Korea’s election, Moon Jae-in, has called for a delay in the deployment, saying the new administration should make a decision after gathering public opinion and more talks with Washington.

A spokesman for Moon said moving the parts to the site “ignored public opinion and due process” and demanded it be suspended.

Television footage showed military trailers carrying equipment, including what appeared to be launch canisters, to the battery site.

Protesters shouted and hurled water bottles at the vehicles over lines of police holding them back.

The Pentagon said the system was critical to defend South Korea and its allies against North Korean missiles and deployment would be completed “as soon as feasible”.

‘WE WILL FIGHT’

More than 10 protesters were injured, some of them with fractures, in clashes with police, Kim Jong-kyung, a leader of villagers opposing the deployment, told Reuters.

Kim said about 200 protesters rallied overnight and they would keep up their opposition.

“There’s still time for THAAD to be actually up and running so we will fight until equipment is withdrawn from the site and ask South Korea’s new government to reconsider,” Kim told Reuters by telephone.

A police official in the nearby town of Seongju said police had withdrawn from the area and were not aware of any injuries.

The United States and North Korea have been stepping up warnings to each other in recent weeks over North Korea’s development of nuclear weapons and missiles in defiance of U.N. resolutions.

North Korea’s nuclear and missile threat is perhaps the most serious security challenge confronting U.S. President Donald Trump. He has vowed to prevent North Korea from being able to hit the United States with a nuclear missile.

North Korea says it needs the weapons to defend itself and has vowed to strike the United States and its Asian allies at the first sign of any attack on it.

The United States is sending the USS Carl Vinson carrier strike group to waters off the Korean peninsula, where it will join the USS Michigan, a nuclear submarine that docked in South Korea on Tuesday. South Korea’s navy has said it will hold drills with the U.S. strike group.

North Korea’s foreign ministry denounced a scheduled U.N. Security Council meeting on Friday, chaired by U.S. Secretary of State Rex Tillerson, saying the United States was “not morally entitled” to force members states to impose sanctions on it.

“It is a wild dream for the U.S. to think of depriving the DPRK of its nuclear deterrent through military threat and sanctions. It is just like sweeping the sea with a broom,” the North’s KCNA cited a foreign ministry spokesman as saying.

DPRK stands for the Democratic People’s Republic of Korea, the North’s official name.

China’s envoy on North Korea, Wu Dawei, met his Japanese counterpart, Kenji Kanasugi, for talks in Tokyo and they agreed that they would “respond firmly” to any further North Korean provocation, Japan’s foreign ministry said.

“We are against anything that might lead to war or chaos,” Wu said.

KCNA said earlier leader Kim Jong Un had supervised the country’s “largest-ever” live-fire drill to mark Tuesday’s 85th founding anniversary of its military, with more than 300 large-caliber, self-propelled artillery pieces on its east coast.

“The brave artillerymen mercilessly and satisfactorily hit the targets and the gunshots were very correct, he said, adding that they showed well the volley of gunfire of our a-match-for-a-hundred artillery force giving merciless punishment to the hostile forces,” KCNA cited Kim as saying.

There had been fears North Korea would mark the anniversary with its sixth nuclear test or a long-range missile launch.

(Additional reporting by Ben Blanchard in Beijing; Editing by Lincoln Feast, Robert Birsel)


Reuters Wednesday Morning Briefing

Washington

U.S. President Donald Trump is proposing to slash the corporate income tax rate and offer multinational businesses a steep tax break on overseas profits brought into the United States, officials said. Trump will also call for a sharp cut in the top rate on pass-through businesses, including many small business partnerships and sole proprietorships, to 15 percent from 39.6 percent, an administration official said. Trump’s proposal will not include a controversial “border-adjustment” tax on imports that was floated by Republicans in the House of Representatives as a way to offset revenue losses resulting from tax cuts. here

Public pension funds in at least seven U.S. states have invested millions of dollars in an investment fund that owns a New York hotel and pays one of President Trump’s companies to run it, according to a Reuters review of public records. That arrangement could put Trump at risk of violating an obscure constitutional clause, some legal experts say. here

The U.S. Congress was moving closer to crafting a deal to avoid shutting down at the stroke of midnight on Friday, but the details and even broad strokes of an agreement were still murky. here

Trump’s 100 days: Trump’s victories dimmed by misfires here

Today Trump will order a review of national monuments created over the past 20 years with an aim toward rescinding or resizing some of them – part of a broader push to reopen areas to drilling, mining and other development. here

Syria

French intelligence has concluded that forces loyal to Syrian President Bashar al-Assad carried out a sarin nerve gas attack on April 4 in northern Syria and that Assad or members of his inner circle ordered the strike, a declassified report showed. here

North Korea

The U.S. military started moving parts of an anti-missile defense system to a deployment site in South Korea, triggering protests from villagers and criticism from China, amid tension over North Korea’s weapons development. here

Turkey

Turkish authorities arrested more than 1,000 people they said had secretly infiltrated police forces across the country on behalf of a U.S.-based cleric blamed by the government for a failed coup attempt last July. here

A boy greets a veteran in a wheelchair during the annual ANZAC (Australian and New Zealand Army Corps) Day march through central Sydney, Australia, April 25, 2017. REUTERS/Steven Saphore here

China

A Chinese court sentenced a U.S. citizen to three-years and six-months in prison for espionage but then ordered she be deported, her lawyer said, in a case that has added to U.S.-China tension. here

China launched its first domestically built aircraft carrier. here

China says its Silk Road initiative is helping create “a new era of globalization” open to all, according to a draft communique for a summit next month on the project, as Beijing burnishes its free trade credentials amid protectionist forces elsewhere. here

France

French President Francois Hollande told government ministers to do all they can to ensure the biggest defeat possible for far right leader Marine Le Pen in the May 7 vote for the presidency against Emmanuel Macron, his spokesman said. here

Business

World stocks hit a record high today after strong earnings and the prospect of tax cuts for corporate America pushed U.S. shares to stratospheric levels and the euro held onto recent gains as political concerns in France ebbed. here

PepsiCo reported higher-than-expected quarterly revenue and profit as the company benefited from demand for its healthier drinks and snacks and kept a tight leash on costs. here

As scores of investment bankers profit from the fee bonanza offered by Chinese companies hunting for deals in the United States, one group is conspicuously absent – Chinese banks. here

‘I was just saving them (for myself)”

Serena Williams had no intention of sharing her pregnancy with the world last week but spilled the beans when she accidentally uploaded the “20 weeks” photo of herself on Snapchat, the world number one said. here


Trump resorting to unilateralism with steel probe: China Daily

(Reuters) – Washington’s move to probe steel imports could trigger a trade dispute between the United States and its major trading partners, who are likely to take retaliatory steps, the official China Daily said in an editorial on Monday.

The article was the strongest official response yet to U.S. President Donald Trump on Thursday launching an investigation of China and other steel producers for dumping cheap steel products into the United States.

“By proposing an unjustified investigation into steel imports in the guise of safeguarding national security, the U.S. seems to be resorting to unilateralism to solve bilateral and multilateral problems,” the China Daily said.

The probe could result in efforts by the United States to curb imports that will affect the interests of a number of its major trade partners, including China, it said.

“If the U.S. does take protectionist measures, then other countries are likely to take justifiable retaliatory actions against U.S. companies that have an advantage … in fields such as finance and high-tech, leading to a tit-for-tat trade war that benefits no one,” it said.

The article called on the United States, the world’s top economy, to use the settlement mechanism under the World Trade Organization to resolve the dispute over steel.

Reducing imports will not alter the weak competitiveness of U.S. steelmakers, help restore U.S. manufacturing or bring back jobs, as President Trump hopes, it said.

It was a marked shift from official comments on Friday. China’s Foreign Ministry spokesman Lu Kang said in a briefing the country needed to ascertain the direction of any U.S. investigation before it could make a judgment.

(Reporting by Josephine Mason; Editing by Tom Hogue)


At least 15 drown as migrant boat sinks off Greece’s Lesbos

(Reuters) – At least 15 people, including a child, drowned when an inflatable boat carrying refugees and migrants sank off Greece’s Lesbos island, officials said on Monday.

Eight bodies were recovered in Greek territory and another seven in Turkish waters, a Greek coastguard official said. The boat is believed to have set sail from Turkey late on Sunday.

Citing survivors, the United Nations refugee agency UNHCR said 25 people were on board. Two survivors, one of whom is pregnant, were from Cameroon and the Democratic Republic of Congo, the agency said.

Though fewer than 10 nautical miles separate Lesbos from Turkish shores, hundreds of people have drowned trying to make the crossing since the refugee crisis began in 2015.

In that year, Lesbos was the main gateway into the European Union for nearly a million Syrians, Iraqis and Afghans.

A deal in March 2016 between the EU and Ankara has all but closed the route down and just over 4,800 refugees and migrants have crossed to Greece from Turkey this year, according to UNHCR data. An average of 20 arrive on Greek islands each day.

At least 173,000 people, mostly Syrians, landed in Greece in 2016.

The number of refugees and migrants in Greece has swelled to about 62,000 in the last year, about 13,000 of whom are in camps on five eastern Aegean islands waiting for their asylum applications to be processed.

Violence has broken out in overcrowded camps on several occasions, as have protests against asylum delays. Twelve Syrian Kurds living in Lesbos’s Moria camp for months began a hunger strike on Friday, the Athens News Agency reported.

(Reporting by Karolina Tagaris in Athens and Tom Miles in Geneva; Editing by Catherine Evans)


China clamps down on excess steel as Japan decries Trump ‘protectionism’

(Reuters) – Twenty-nine Chinese steel firms have had their licenses revoked as Beijing kept up its campaign to tackle overcapacity in the sector and days after U.S. President Donald Trump said he would open a probe into cheap steel exports from China and elsewhere.

Analysts say the revocations were unlikely to be a direct response to Trump’s plan, but rather a part of China’s reform measures aimed at reducing surplus steel capacity that many estimate at around 300 million tonnes, about three times Japan’s annual output.

The official China Daily said Washington’s move to investigate steel imports could trigger a trade dispute between the United States and its trading partners. In Japan, the world’s second-biggest steel producer after China, the head of its steelmakers’ group expressed concern over Trump’s protectionist policy.

“We are greatly concerned over Trump’s protectionism, although we hear he has softened his tone on some issues with a grasp of reality,” Japan Iron and Steel Federation chairman Kosei Shindo told a news conference on Monday.

China’s Ministry of Industry and Information Technology released a list on Monday of 29 firms that will be removed from its official register of steel enterprises. Most have already stopped producing steel, but some had illegally expanded production or violated state closure orders.

“It’s all enveloped in this strategy to improve the financial condition of the industry which has been weighed down by excess capacity for some time, partly as a result of inefficient operations,” said Daniel Hynes, commodity strategist at ANZ.

China is aiming to shed between 100 million to 150 million tonnes of excess capacity over the 2016-2020 period. It also plans to shut around 100 million tonnes of low-grade steel production by the end of June.

On Monday, another 40 steel firms have been asked to make changes in areas such as environmental protection and safety.

The majority of the companies were accused of failing to comply with emergency output restrictions during heavy pollution periods, and they must fully “rectify” their violations within a prescribed period, the industry ministry said, without giving a specific time frame.

Hynes said China may take a more gradual approach in shutting inefficient mills rather than force “a lot of closures at once” and cause a spike in steel prices, which is what happened in the third quarter last year.

China set up an official steel firm register in 2009 to impose order on the poorly regulated industry and to help companies during price negotiations with iron ore suppliers overseas.

The register was also supposed to identify the mergers and closures required to meet a target to put 60 percent of China’s steel capacity in the hands of its 10 biggest producers by the end of 2015.

However, industry consolidation rates actually fell to 34.2 percent over the 2011-2015 period, from 48.6 percent in the previous five-year period, and China has now pushed back the 60 percent target until 2025.

According to figures published by the official China Metallurgical News earlier this month, 292 out of a total of 635 firms in 12 provinces and cities have already ceased production or shut down completely.

(Reporting by Manolo Serapio Jr in Manila and Beijing Monitoring Desk; Editing by Tom Hogue and Christian Schmollinger)


Bomb attack hits U.S. base in eastern Afghanistan

(Reuters) – Suspected Taliban insurgents on Monday attacked a U.S.-operated base in Afghanistan’s eastern province of Khost, officials said, but gave few immediate details of an assault that coincided with a visit to Kabul by U.S. Secretary of Defense James Mattis.

The attackers had detonated a car bomb at an entrance to Camp Chapman, a secretive facility manned by U.S. forces and private military contractors, said Mubarez Mohammad Zadran, a spokesman for the provincial governor.

But he had little immediate information on any damage or casualties.

“I am aware of a car bomb attack at one of the gates in the U.S. base, but we are not allowed there to get more details,” the spokesman said.

A spokesman for the U.S. military in Afghanistan, Capt. William Salvin, confirmed the car bomb attack. He said there appeared to be a number of Afghan casualties but none among U.S. or coalition personnel at the base.

The attack came just three days after more than 140 Afghan soldiers were killed in an attack on their base by Taliban fighters disguised in military uniforms.

(Reporting by Ahmad Shah and Josh Smith; Writing by James Mackenzie; Editing by Clarence Fernandez)


Reuters Monday Morning Briefing

French elections

Global markets reacted with relief to Sunday’s French election results, which show centrist Emmanuel Macron beating far-right opponent Marine Le Pen in an upcoming run-off. Though Macron, 39, is a comparative political novice who has never held elected office, new opinion polls on Sunday saw him easily winning the final clash against the 48-year-old Le Pen.

More:

Europe’s populist wave stalls

Gallery: Le Pen and Macron head to a run off

Washington

U.S. President Donald Trump will sign new executive orders before he completes his first 100 days in office this week. On Wednesday, he’s expected to sign an executive order related to the 1906 Antiquities Act, which enables the president to designate federal areas of land and water as national monuments to protect them from drilling, mining and development, a source said. On Friday, he’s expected to sign an order to review areas available for offshore oil and gas exploration, as well as rules governing offshore drilling.

Congress returns to work today with a deadline looming to avert a U.S. government shutdown this week. President Trump will lean on Democrats to include funding for his promised border wall with Mexico in spending legislation.

The U.S. Chamber of Commerce chief says he expects a basic NAFTA deal by mid-2018.

Commentary: Should the State department be singing a line from Hamilton?

Racka sheep are seen during celebrations for the start of the new grazing season in the Great Hungarian Plain in Hortobagy, Hungary, April 22, 2017. REUTERS/Laszlo Balogh

Racka sheep are seen during celebrations for the start of the new grazing season in the Great Hungarian Plain in Hortobagy, Hungary, April 22, 2017. REUTERS/Laszlo Balogh

Tesla

As Tesla races to complete a self-imposed September deadline for its Model 3 orders, it’s choosing to skip a key “beta” production test, ordering permanent equipment instead of cheap materials in order to deliver doors that fit, body panels with the right shape and dashboards that don’t have gaps or seams.

North Korea

Chinese President Xi Jinping called for all sides to exercise restraint in a telephone call about North Korea with U.S. President Donald Trump, as Japan conducted exercises with a U.S. aircraft carrier strike group headed for Korean waters.

North Korea detained a U.S. citizen on Saturday as he attempted to leave the country, bringing the total number of Americans held by the isolated country to three.

Colas, cigarettes: North Korean airline diversifies as sanction threats mount

China

Twenty-nine Chinese steel firms have had their licenses revoked as Beijing kept up its campaign to tackle overcapacity in the sector and days after U.S. President Donald Trump said he would open a probe into cheap steel exports from China and elsewhere.

U.S.

Arkansas plans to execute two inmates tonight, which would make it the first U.S. state in 17 years to put a pair of convicts to death on the same day.

Afghanistan

Afghanistan’s defense minister and army chief of staff resigned after the deadliest ever Taliban attack on a military base in which more than 140 Afghan soldiers were killed, threatening to overshadow a visit by U.S. Defense Secretary Jim Mattis as Washington looks to craft a new strategy for the country.