Cramer: ‘I feel better’ after Starbucks CEO Schultz expressed confidence in successor

CNBC’s Jim Cramer said Friday some of his initial disappointment about Howard Schultz’s decision to step down as Starbucks CEO has been alleviated.

“I feel better,” Cramer said on “Squawk Box” after the chief executive, in an exclusive interview with CNBC, expressed confidence in his successor, Kevin Johnson.

“When I heard the news,” Cramer said, “I was immediately very disappointed because I love what Howard [has] done. He is iconic. But what Howard did subsequently in our interview is state, ‘Look, this is how it’s going to go. I’m still very much involved, but we do have technology problems.’ Kevin’s better than that, better at that than he is.”

On Thursday, Schultz said he hand over the CEO post to Johnson, the current president and COO of Starbucks. The announcement surprised investors and sent Starbucks’s stock tumbling. It was down about 2 percent in early trading Friday.

Schultz said Johnson was “well-equipped” to take the company to a higher level.

“What was clear was Kevin’s ability,” Schultz said. “He is much better prepared to manage the global operations of the company than I am at this stage.”

Before joining Starbucks, Johnson worked closely with Steve Ballmer at Microsoft and was CEO of Juniper Networks.

—CNBC’s Sarah Whitten contributed to this report.

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‘Romney disgusts me’ for the way he’s now cozying up to Trump, billionaire Ken Langone says

Romney met with Trump twice recently about the possibility of heading the State Department, a position for which Trump loyalist and former New York City Mayor Rudy Giuliani and Senate Foreign Relations Committee Chairman Bob Corker were also being considered.

Pondering Romney’s current state of mind, Langone said in exasperation: “Where is the sense of how can I say these things and then have this man [Trump] as my boss.”

Romney did not immediately respond to a request for comment.

Before endorsing Trump in the Republican race, Langone had supported New Jersey Gov. Chris Christie and then Ohio Gov. John Kasich.

In CNBC’s Friday interview, Langone also said Trump should not make a habit of pressuring companies to keep jobs in the United States, after the deal to keep a Carrier plant open in Indiana.

Langone said he respects Trump for keeping his campaign promise to save American jobs, but warned the U.S. is not a managed economy.

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‘Huge drop’ in unemployment is giving a clear signal about interest rates

Average hourly wages had increased by 0.4 percent in October, a pace that had it continued would signal wage growth heading toward 5 percent annually. Wages had been growing at about 2.5 percent annually. The November 0.1 percent decline was the lowest since December 2014.

After the report, the Dow Jones industrial average was down slightly and bond yields fell. On Thursday, yields rose sharply ahead of the number as speculation swirled that the employment report could be very strong and show wage pressures, which would be a sign the Fed may have to hike more than expected at subsequent meetings next year. The slightly disappointing report brought in buyers for Treasurys, as did concerns about this Sunday’s Italian referendum.

“It wasn’t a slam dunk number by any means. The wages (number) is the most important, but it’s important to know it came off a surge last month,” said Diane Swonk, CEO of DS Economics. “It’s a hiccup in wages, but not enough to stop the Fed.”

There was also a decline in a broader measure of unemployment from 9.5 percent to 9.3 percent, now the lowest since August 2008. The U6 rate captures a wider group, including those who work part time but would like full-time jobs, as well as people who have stopped looking for work.

“The thing that’s going to be taken away from this a few days from now is going to be the drop in

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Credit Suisse sees another 7 percent more to go for US rally as Trump’s policies unleash inflation

Credit Suisse’s global equity strategy team led by Andrew Garthwaite sees the SP 500 rising 7 percent to 2,350 by midyear 2017, up from a previous midyear forecast of 2,200, as the Donald Trump-led government takes over the task of stimulating the economy from the Federal Reserve and defensive-oriented investors race to catch up with the new paradigm.

“The key positive for 2017, in our judgement, is that investors are overweight deflation hedges (i.e. bonds) relative to inflation hedges (equities) at a time when policymakers are moving away from NIRP towards fiscal stimulus, and inflation expectations are set to continue rising,” the report says.

“Other supportive factors are: earnings revisions at a five-year high; a still reasonably elevated equity risk premium; excess liquidity; and rising economic momentum.”

But like Goldman Sachs, Credit Suisse sees a slight pullback in the second half of the year with the SP 500 ending 2017 at 2,300.

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Winners and losers of Trump’s tax reform

CNBC analyzed a list of SP 500 names with tax rates between 10 and 45 percent in fiscal 2015 and excluded companies with rates outside that range as they were likely influenced by accounting measures or one-time tax credits.

Health insurers Anthem, Aetna and UnitedHealth topped the list with tax rates of nearly 43 percent or more in fiscal 2015, according to SP Dow Jones Indices. Lowe’s and Masco, a manufacturer of home improvement products, had tax rates of more than 42 percent.

Those rates are far above the 15 percent rate U.S. President-elect Donald Trump has proposed. The current corporate tax rate is 35 percent, while the effective rate, or the one that companies in the SP 500 actually pay after deductions, is below 30 percent.

The weighted average tax rate for the SP 500 overall was 26.7 percent in the second quarter of this year, Howard Silverblatt of SP Dow Jones Indices said.

Clifton expects the tax rate could be negotiated down to 25 percent. He’s also watching for beneficiaries of Trump’s proposed one-time 10 percent tax rate on repatriated corporate profits that are now held offshore.

“I think the market is totally missing what is happening on this repatriation,” he said. Some of the stocks in Strategas’ 2015 repatriation index are Qualcomm, Ralph Lauren

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Silicon Valley’s culture, not its companies, dominates in China

A tourist in front of a Facebook sign at the entrance to the companys headquarters in Menlo Park, Calif.© Laura Morton for The New York Times
A tourist in front of a Facebook sign at the entrance to the company’s headquarters in Menlo Park, Calif.

MOUNTAIN VIEW, Calif. — The majesty of the Golden Gate, the windy chill of Alcatraz, the tourist hubbub of Pier 39 — Zhao Haoyu’s itinerary for San Francisco had it all.

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Yet when Mr. Zhao, a Chinese tourist, arrived with his wife in September, they spent their first day wandering the humdrum suburban office parks that Facebook and Google call home.

Joining a guided bus tour with a dozen other Chinese visitors, the two became part of the steady flow of Chinese tourists to Silicon Valley that represents — despite pervasive censorship and outright hostility from the Chinese government — the tremendous influence Silicon Valley wields in China.

“You hear so much about these companies in China,” said Mr. Zhao, a native of the southern Chinese city of Kunming who is in his 30s. “We just wanted to experience it.”

China in recent years has given rise to a vibrant and innovative tech industry that in some ways surpasses what Americans can do online. But it has done so despite

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Trump takes aim at companies looking to move jobs abroad

President-elect Donald J. Trump during a tour of a Carrier plant in Indianapolis last week.© Doug Mills/The New York Times
President-elect Donald J. Trump during a tour of a Carrier plant in Indianapolis last week.

WASHINGTON — President-elect Donald J. Trump on Sunday renewed his hard line on American companies that plan to shift operations abroad, using a series of early-morning Twitter posts to warn again that “there will be a tax on our soon to be strong border” of 35 percent levied against goods moved “back across the border” for sale.

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The Twitter messages came days after Mr. Trump went to Indiana to celebrate a decision by the heating and cooling giant Carrier to keep in that state about half of the 2,000 jobs it had planned to eliminate as it moved production to Mexico.

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But in the case of Carrier, it was not a large tariff that prompted it to retain the American jobs. It was $7 million in incentives from the State of Indiana, the sort of corporate giveaway that Mr. Trump railed against during the campaign. Moreover, replicating the Carrier success would be difficult on a large scale — an American president has limited tools to counter the global economic forces that prompt companies to shift production to lower-wage countries.

In his Twitter posts, Mr. Trump said: “The U.S.

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Permit denied for Dakota Access pipeline

Army corps halting work on Dakota Access Pipeline© Provided by The Hill
Army corps halting work on Dakota Access Pipeline

Federal officials have denied the final permits required for the Dakota Access Pipeline project in North Dakota.

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The Army Corps of Engineers on Sunday announced it would instead conduct an environmental impact review of the 1,170-mile pipeline project and determine if there are other ways to route it to avoid a crossing on the Missouri River.

“Although we have had continuing discussion and exchanges of new information with the Standing Rock Sioux and Dakota Access, it’s clear that there’s more work to do,” Army Assistant Secretary for Civil Works Jo-Ellen Darcy said in a statement.

“The best way to complete that work responsibly and expeditiously is to explore alternate routes for the pipeline crossing.”

The announcement comes one day before the Army Corps of Engineers’ deadline for demonstrators to leave the protest site. The governor of North Dakota had also issued an emergency evacuation order.

Protesters have clashed with police, and Attorney General Loretta Lynch said in a Sunday statement that the Department of Justice “will continue to monitor the situation in North Dakota in the days ahead” and stands “ready to provide resources to help all those who can play a constructive role in

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Sears on the brink of catastrophe

Sears© Provided by Business Insider

Things aren’t looking good for Sears.

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The company is shutting down dozens of Kmart stores in the U.S. this month and two of its highest-ranking executives left this week in the midst of the key holiday shopping season.

This comes following speculation among Sears and Kmart employees, suppliers, and several banks that the retailer will soon go bankrupt — something Sears has repeatedly dismissed.

Jeff Balagna, formerly Sears’ executive vice president, left the company Wednesday, “in order to focus on his other business interests and pursue other career opportunities,” Sears said in an SEC filing dated November 23.

Balagna did not respond to a request for comment. Sears declined to comment beyond what was stated in the filing.

Sears President and Chief Member Officer Joelle Maher also left the company this week, Sears confirmed to Business Insider. The company declined to give a reason for her departure. 

The timing of the departures — so close to Sears’ upcoming third-quarter earnings report and in the middle of the holiday season — is “highly unusual,” according to Mark Cohen, director of retail studies at Columbia Business School and the former CEO of Sears Canada.

Cohen, who was fired from Sears in 2004, is an outspoken critic of the

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Why Italy is calling the shots for markets this week

© Provided by CNBC

At least initially, Italy could call the shots for global markets in the week ahead, as the Trump rally begins to show signs of tiring.

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The dollar, bonds and stocks should continue to take their cue from any hints of policy or plans from the incoming Trump Administration, and there are a few U.S. economic reports like trade data and consumer sentiment. But the whole world is watching Italy’s constitutional referendum Sunday to see if it could cause the next Brexit-like tremor for markets.

“Particularly if the focus shifts to Europe, we think that these Trump themes could very well pause here with interest rates arguably up 70 basis points. The rally could very well have been front loaded,” said Julian Emanuel, equity and derivatives strategist at UBS. Emanuel said the rallies in sectors like industrials and the small caps are showing signs of wear.

Even though the Italian referendum is “very Eurocentric,” Emanuel said U.S. investors began to shift their attention to the uncertainty around it just as the U.S. stock market rally slowed in the past week.

The SP 500 (.SPX) was down nearly a percent at 2,191 in the past week, its first weekly loss in four weeks.

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