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Inside Finance (Aug 14th, 2019)

1. Stocks are sharply down today. At last check, the Nasdaq was down nearly 2.6 percent. The Dow and the S&P 500 were both down about 2.3 percent. Financial stocks are getting hit especially hard, with major U.S. bank stock values dropping more than 10 percent off their 52-week highs. The sharp drop has renewed expectations for the Fed to cut rates. Many investors (and the president) see that move as a way to juice stock markets. – CNN

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2. If you're planning on buying a new phone or video game console in the next few months, you're in luck—tariffs planned on the products have been delayed. President Trump told reporters, "we've delayed [the tariffs] so they won't be relevant" during the holiday shopping season. Some tariffs will still take effect on Sept. 1, but those on laptops, video games, phones, and some apparel items won't take effect until Dec. 15. A few items were dropped from the list altogether. The U.S. no longer has plans to impose tariffs on Chinese imports of Bibles (most imported Bibles in the U.S. come from China), some frozen fish fillets, and radioactive products. – NPR

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3. By the Numbers: WeWork Opens its Books

$904 million – That's how much WeWork lost in the first half of 2019, according to its recent IPO filings.

25 – That's 25 percent more of a loss than WeWork saw in the first half of 2018.

$1.5 billion – That's how much WeWork earned in revenue in the first half of 2019. That's double the revenue from the first half of 2018.

$1.8 billion – For comparison, Uber lost $1.8 billion in all of 2018. Lyft lost $911 million in 2018.

$1 billion – That's how much WeWork hopes to raise through its IPO.

$6 billion – That's how much debt WeWork expects to rack up.

$47 billion – That was WeWork's value in the wake of a $2 billion investment from SoftBank in January.

As a reminder, when WeWork goes public, I plan to cover it with a takeover issue. Reports have suggested that could happen in September. – CNN and CNBC

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4. All financial news this morning was focused on the yield curve, which just inverted in a way that hasn't been seen since before the Great Recession of 2008. Key two-year yields are now worth more than key 10-year yields. To financial newcomers, it's a complicated concept (here's a good explainer article), but the basic idea is that there's a widespread fear that the economy won't be as strong in the long-term as it will be in the short-term. Similar inverted yield curves appeared before every recession since 1956. But it's important to note that, historically, inverted yield curves haven't signaled an immediate recession. The inverted curve preceding the 2008 crash first appeared in 2005. – AP

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5. Looking overseas, new data shows that Germany's economy is now shrinking. In the second quarter of the year, Germany's GDP shrank by 0.1 percent. Analysts say the China-U.S. trade war is partially to blame. The German economy largely depends on exports, and trade wars add uncertainty to the global trade market. Brexit is another factor adding uncertainty to global trade. It's also a rough time for the auto industry, which is big in Germany. Those companies are facing pressure from environmental pressures to reduce emissions, and from the increased popularity of ride-hailing apps. Germany's economy is the largest in the EU, so the effects of the slowdown will likely be felt across the continent. – BBC

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6. Uber's stock value hit an all-time low this morning. A single share in Uber dropped to $33.36, but at last check the price has bounced back slightly to $33.81. This is actually this week's second all-time low for Uber. On Monday, the company set a new low at $37. The rough week comes after the company reported more than $5 billion in losses in the second quarter alone. – CNBC

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7. CBS and Viacom, soon to become one company again, hope the reunion will help the media giant compete in the streaming space. That's according to ViacomCBS CEO Bob Bakish, speaking after the two companies officially announced their highly anticipated merger deal. For those who don't follow the vast web of media ownership, Viacom is the company behind Paramount Studios, Showtime, and basic cable channels like Nickelodeon, Comedy Central, and MTV. The merger will convert each Viacom stock into 0.59625 of CBS stock. – AP

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8. Former Federal Reserve Chair Alan Greenspan said there's "no barrier" to U.S. bond rates dipping into negative territory. Negative yield rates have been used in other countries, but not in the U.S. If imposed, it would essentially mean that money invested in U.S. bonds would pay back less than the invested amount. So why would anyone buy a bond with a negative yield? In theory, it's for the perceived security in owning government debt—the idea being that governments are more likely to pay back debt than individuals. – MARKETWATCH

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9. Democratic presidential hopeful Sen. Elizabeth Warren (D-Massachusetts) is calling for an investigation into the Federal Trade Commission, in relation to the agency's statements on the Equifax data breach compensation. Equifax initially advertised up to $125 in compensation for those affected by the massive 2017 data breach. However, Equifax only set aside $31 million for compensation payouts. If each claim were to receive the full $125, Warren notes that $31 million would only cover less than one percent of affected Americans. Warren points to one FTC statement that claimed Equifax was offering "free credit monitoring OR $125 if you decide not to enroll." – CNBC

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10. Earnings season is over for the most part, but there's one big company left to report: Walmart. So far this year, Walmart's stock gains have been just behind the S&P 500 overall. – BARRON'S

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Schuyler Durham writes Inside Finance. He’s a lifelong Portlander who got his start covering the local music scene, but later became enamored with the complexities of financial and political reporting. After three years in broadcast news, he's now diving back into the digital realm. You can keep up with his writing on Twitter at @SchuylerWriter or watch him goof around on Instagram at @bitterbuddha.

Editor: David Stegon (senior editor at Inside, whose reporting experience includes cryptocurrency and technology).

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