Morning Brief: Trump economic adviser resigns amid tariff spat

Wednesday, March 7, 2018

What to watch today

President Donald Trump’s chief economic adviser Gary Cohn has resigned. Cohn had been seen as the leading voice against Trump’s current plan to implement tariffs on steel and aluminum imports and had been widely viewed by markets as the economic voice of reason inside the administration. Before Trump nominated Jerome Powell as Federal Reserve chair, Cohn was seen as a potential successor to former Fed Chair Janet Yellen.

Following news of Cohn’s departure, the dollar was lower and stock futures were getting hit. Expect Cohn’s departure to be a major driver of the market action and conversation on Wednesday with his absence in the administration likely seen by markets as a sign that Trump’s proposed tariffs on aluminum and steel imports will be passed, with additional tariffs now a possibility.

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Top news

CVS bets big with $40 billion bond sale: Pharmacy chain CVS Health Corp. (CVS) sold $40 billion of bonds Tuesday to help pay for its acquisition of health insurer Aetna Inc. (AET) months before it needs the money, seeking to get ahead of an expected rise in interest rates and a flood of borrowing across the economy. The sale, the largest in two years, showed there is still eager demand from investors for corporate bonds issued by financially strong borrowers. [The Wall Street Journal]

Investor group scraps deal for Weinstein assets: The female-led investor group that had agreed to buy The Weinstein Company’s assets pulled its offer on Tuesday, and lead investor Maria Contreras-Sweet said the decision was made after the group “received disappointing information.” Two sources familiar with the matter told Reuters that the investor group pulled the offer after discovering the Hollywood studio’s liabilities were higher than previously disclosed. [Reuters]

Walmart, Nike suppliers put on notice by China tariff threat:  Some of China’s biggest manufacturers that supply U.S. multinationals from Walmart Inc. (WMT) to Nike Inc. (NIKE) find themselves in President Donald Trump’s cross hairs as his administration discusses new import tariffs. The U.S. is considering taxing imports from shoes and clothing to consumer electronics, putting on the hook companies including Yue Yuen Industrial Holdings Ltd. and Li & Fung Ltd. that help fuel the about $450 billion in Chinese goods imported to America annually. Chinese manufacturers won’t be the only ones hurt in a trade war, as their close relationships as suppliers to American brands will likely create a ripple effect. [Bloomberg]

Oprah sells part of Weight Watchers stock:  Oprah Winfrey has sold part of her holdings in Weight Watchers International Inc. (WTW) as part of a portfolio diversification and donated some shares to her foundation engaged in philanthropy. The media mogul continues to be a significant shareholder of the New York-based weight-loss company as well as a board member, adviser and ambassador, according to the statement distributed by PR Newswire Tuesday. [Bloomberg]

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Greek taxi drivers chant slogans during a protest in central Athens on March 6, 2018 against the UBER (Tourism Vehicle with Driver VTC) text to be voted in parliament. Uber operates in over 600 cities worldwide, facing widespread resistance including from taxi driver unions that accuse them of unfair competition. (Photo credit LOUISA GOULIAMAKI/AFP/Getty Images)

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