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Market Morning: Ford Emissions Questions, US/China Haggling, Kraft Heinz Plunge, Walmart Shines

ME Staff

Ford Trying To Nip Possible Emissions Scandal In Bud

Is Ford (NYSE:F) about to get in trouble for misleading regulators about emissions and mileage? Possibly fearing that possibility, the auto giant has hired “outside experts” to probe whether it made mistakes calculating mileage based on emission tests before submitting the data to regulators. It said that it was evaluating changes to the way it calculates the numbers it submits to consumers and regulators in terms of fuel economy and emissions. Strange because all you need to do is drive the thing in highway and city conditions and do some basic division. Ford has voluntarily provided all the necessaryy information to the Environmental Protection Agency on the theory that coming clean now is a stitch in time, which will save nine.

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Haggling Going On Between US, China, Says Media

The United States’ and China’s trade delegation are haggling, which sounds alright and seems to mean that basic understandings have been agreed upon, and now it’s just the details that are holding up a final announcement of a deal. Either that or these headlines are fed by the powers that be in an attempt to calm markets. Either way, a March 1st deadline is fast approaching, now just a week away, before tariffs on Chinese imports rise by 150%, from 10% to 25%, in what would surely disrupt global trade and have unforeseen consequences that are not going to be rosy. The two teams are headed by Robert Lighthizer, not a free trade guy, and Chinese Premier Liu He, also not a free trade guy. Discussions are taking place in the Eisenhower Executive Office Building just next door to the White House. Chinese equity markets (NYSEARCA:FXI) meanwhile are sharply higher, with Shanghai trading up nearly 2%.

Kraft Heinz Got the Blues, Crashes in Explosion of Macaroni Ketchup Hotdogs

To the dismay of all ketchup and macaroni and cheese lovers around the world, Kraft Heinz (NASDAQ:KHC) is not doing too well and sold off 20% in after hours trading yesterday. Earnings came in at 84 cents a share, 10 cents lower than consensus estimates. Revenue missed by $50M. Including goodwill write-downs though, Kraft reported a loss of $12.61 billion thanks to a $15B impairment from valuation losses associated with Kraft and Oscar Meyer brands. Dividends were slashed to $1.60 a share from $2.50 a share, putting the current dividend yield at about 4%. The SEC is investigating whether Kraft Heinz deliberately misled shareholders leading up to the disappointing earnings announcement. The SEC does not wish it were an Oscar Meyer wiener.

Walmart Catching Up to Amazon? Could Be

Walmart’s (NYSE:WMT) e-commerce segment has doubled in the past two years according to its latest earnings statement, in a sign that the retailer is catching up to rival Amazon (NASDAQ:AMZN) thanks to heavy investment in Walmart.com. Shares were battered during the late 2018 decline but didn’t come all that close to 52 week lows. Management signaled that the transformation of the company will continue, with still more emphasis on e-commerce as well as a delivery push to attract shoppers that wouldn’t otherwise go out of their way to Walmart. Part of the success is due to better inventory and product quality and breadth, with deals both large and small contributing to variety. One more example from just yesterday is a deal with security/technology firm Nxt-ID (NASDAQ:NXTD), maker of Notifi911, a PERS device that connects a user to 911 from anywhere there is cell phone service. According to Nxt-ID, The product is less than 10% of the cost of competing emergency response devices with a battery time of 3 months before needing a recharge. As a recession-proof stock since people shop at Walmart more when they need to save more money, it could have a particularly good 2019 if 2018 earnings are anything to go by.

Top NBA Draft Pick Zion Williamson’s Shoe Disintegrates On Court, Nike Ponders

Nike (NYSE:NKE) shares were down over 1% yesterday, with headlines attributing the fall to the epic shoe fail involving college basketball star Zion Williamson’s PG2.5 basketball shoe, which basically just fell apart as he was trying to juke an opponent. Nike is “working to identify the issue,” with probably no pun intended, though this was not specified. (Get it? Issue?) Probably nobody thinks that this signals anything systemic about the company and people will forget it about it in a few weeks, or perhaps minutes, but people just love seeing things fall apart and big athletes fall down, so if you want to pick up Nike here and you’re generally bullish, now may be a decent time to pull the trigger, assuming the company will fix the shoe issue, which it almost certainly will.

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