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Hong Kong tensions rattle world stock markets, oil tumbles

Catherina Ploumidakis

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Hong Kong tensions rattle world stock markets, oil tumbles

NEW YORK/LONDON (Reuters) – Oil prices tumbled and global equity markets fell on Friday as China’s move to impose a new security law on Hong Kong further strained U.S.-China relations and clouded economic recovery prospects.

FILE PHOTO: Floor traders work space is seen on the trading floor after the closing bell, following traders testing positive for Coronavirus disease (COVID-19), at the New York Stock Exchange (NYSE) in New York, U.S., March 19, 2020./File Photo

China also dropped its annual growth target for the first time, adding to uncertainty about the fallout from the COVID-19 pandemic, boosting safe-haven investments such as U.S. Treasuries US10YT=RR and the dollar.

China said it would impose new national security legislation on Hong Kong, leading President Donald Trump to warn that Washington would react “very strongly” against any attempt to gain more control over the former British colony.

Emerging market shares slid -2.72%. Stocks in Europe closed mostly flat and on Wall Street finished mixed as investors prepared for a long weekend in the United States, the UK and elsewhere.

After trading lower most of the session, Wall Street trended upward in late trading, with the S&P and the Dow managing to finish higher.

“The market just keeps battling higher, it just wants to go higher,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York. “It’s anticipating improvement and we’ve seen all the bad news.”

Tensions between the world’s two largest economies have risen in recent weeks, with Washington ramping up criticism of China over the origins of the coronavirus pandemic, raising fears the rhetoric could crimp economic growth.

The U.S. Commerce Department said late in the session that it is adding 33 Chinese companies and other institutions to a blacklist for human rights violations and to address U.S. national security concerns.

The resurgent U.S.-China standoff weighed on oil prices.

“You have these doubts over China that is triggering this sell-off in oil, and it’s going to gain steam. If oil sells off, it’s hard to have a strong stock market,” said Ed Moya, senior market analyst at OANDA in New York.

Of major asset classes, crude oil has rebounded the most off the year’s lows on hopes world economies will soon recover from coronavirus-induced business shutdowns, he said, adding that he believed oil’s rally was overdone.

“There’s just too much uncertainty, and that’s going to likely keep on weighing on risk appetite,” Moya said.

MSCI’s all-country world stock index .MIWD00000PUS shed 0.40%, but the pan-European STOXX 600 index closed down just 0.3%.

On Wall Street, the Dow Jones Industrial Average .DJI fell 8.96 points, or 0.04%, to 24,465.16. The S&P 500 .SPX gained 6.94 points, or 0.24%, to 2,955.45, and the Nasdaq Composite .IXIC added 39.71 points, or 0.43%, to 9,324.59.

Earlier in Asia, Hong Kong’s Hang Seng index .HSI slid more than 5% to a seven-week low, its biggest daily percentage fall since 2015. MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS lost 2.7%; Japan’s Nikkei .N225 fell 0.8%.

Analysts said extensive central bank stimulus continues to underpin sentiment and buoy equity markets.

Japan’s central bank unveiled a lending program to channel nearly $280 billion to small businesses hit by the coronavirus. India slashed rates for a second time this year and the European Central Bank, in the minutes from its last meeting, said it was ready to expand emergency bond purchases as early as June.

U.S. crude CLc1 fell 67 cents to settle at $33.25 a barrel, paring about half earlier losses of more than 5%. Brent LCOc1 settled at $35.13, down 93 cents on the day.

FILE PHOTO: A man wearing a protective face mask walks past the London Stock Exchange Group building in the City of London financial district, London, Britain, March 9, 2020. REUTERS/Toby Melville

The dollar index =USD rose 0.331%, with the euro EUR= down 0.42% to $1.0903. The Japanese yen JPY= strengthened 0.01% versus the greenback at 107.62 per dollar.

Benchmark 10-year U.S. Treasury yields fell 0.2 basis points to 0.6574% US10YT=RR.

Spot gold XAU= added 0.5% and U.S. gold futures GCv1 settled up 0.8% at $1,735.50 an ounce.

Reporting by Dhara Ranasinghe and Herbert Lash; Editing by Dan Grebler, David Gregorio and Leslie Adler

Catherina previously worked as a journalist for several local newspapers until she realized the potential of internet for news reporting. She joined the team as a contributor which provided her a platform to dedicate her experience and knowledge for a wider range of audience. She excels in curating business news for the website.

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Kylie Jenner and the end of the Instagram influencer business model

Erin Fox

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Kylie Jenner and the end of the Instagram influencer business model

Influencer culture as we know it is over.

Kylie Jenner, the youngest and most popular member of Instagram’s first family and the pioneer of the Instagram influencer business model, cannot keep up with it herself.

This Insta-business model that Jenner perfected is based on two primary revenue streams: sponsored posts and branded products. Once an influencer has mastered the art of the sponsored post, there is the opportunity to attain the Holy Grail of influence, making the leap from hawking other brands’ products to pushing their own custom-branded merchandise.

Influencers who start their own line make a powerful statement signaling they have graduated from glorified bikini model, vegan muffin maker or whatever their niche may be, to insert-niche-here mogul who can afford to build a tangential product.

In Jenner’s case, she capitalizes on her 179 million followers to reportedly pull in seven figures for sponsored posts. She taps back into that same audience to promote her multimillion-dollar cosmetics business without having to spend a dime on traditional marketing. Both sides of the business grow together, jobs are created, fans are satisfied. It would appear as though everybody wins.

Aspiring influencers look to Jenner’s model as the gold standard that, in theory, works across all categories — take, for example, dog lovers, twin moms and even anti-vaxxers. This leads starry-eyed influencers to believe that if they follow the Jenner model of success, they, too, will reach the promised land of Instagram-fueled fame and fortune.

However, with Forbes’ recent expose revoking her title as the “Youngest Self-Made Billionaire,” the underlying issue is not that Jenner fell from being a billionaire to a mere $900-millionaire. Nor is the issue that she allegedly doctored her tax returns (not my issue, at least). Instead, the problem here is the inherent pressure to do something like produce fake tax returns in order to prove how successful a business is. That’s because in the world of Instagram influence, the appearance of success is more important than success itself. (Jenner has denied Forbes’ allegations.)

As the curtain is pulled back, the Insta-economy is revealed to be flimsy at best. The influencer business model centers around the idea that followers translate to sales. Now that Jenner’s sales figures have been exposed, we see this is blatantly not the case. Though Jenner has gained millions of Instagram followers year after year, these increases have not led to additional revenue for her spin-off lines.

Molly Borman Heymont
Molly Borman Heymont, author of “The Instagram Iceberg: Changing the Way We Think About Instagram as a Business Tool”Alicia Siegel

Jenner’s self-reported sales figures showed Kylie Cosmetics pulling in an inflated $360 million per year, yet we know now the real numbers, revealed following the sale of a majority of the company to Coty, are closer to a third of that. Interestingly, it is reported that Jenner’s digital sales between 2016 and 2018 took a 62 percent nosedive, all while her social media following continued to grow. If followers do not equal sales, how can this possibly continue to pay the bills?

It can’t, but more importantly, it never actually did when you factor in all of the costs associated with building and scaling an Instagram-driven business today.

Jenner’s large follower count has no doubt benefited from her famous-for-being-famous family, but what about the influencers who aren’t born into royalty? In the influencer world, Jenner is an outlier.

To put it into perspective, civilian influencers, (aka non-celebrities) trail so far behind Jenner’s 179 million fans, it’s a wonder they are even able to compete, as the standard of excellence and high-quality content expectations for all those promoting on Instagram is the same, celebrity or not.

By comparison, some of the biggest non-celebrity names do not even come close to Jenner’s following, with mega-influencer Chiara Ferragni boasting 20.2 million followers and Danielle Bernstein totaling 2.4 million — both with many self-branded business ventures to their names. It’s worth noting that if even Jenner, who has everything possible going for her in this Instagram ecosystem that she created, had to fabricate her own success, there is truly no hope for those with a fraction of her influence and resources.

In the Instagram world, where it’s all about the appearance of success, the business model so many aspire to is on its deathbed. Does this mean influencers are going away? Absolutely not. Our Instagram feeds will be filled with beautiful people shilling protein powder and laxative teas for the foreseeable future, but the financial model influencers are accustomed to isn’t as powerful as we once thought.

Molly Borman Heymont is the author of “The Instagram Iceberg: Changing the Way We Think About Instagram as a Business Tool” (New Degree Press), out now.

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Jeff Bezos claps back at Amazon customer who said ‘All Lives Matter’

Erin Fox

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Jeff Bezos claps back at Amazon customer who said 'All Lives Matter'

Amazon’s Jeff Bezos is making no bones about his support of the Black Lives Matter movement, telling the world on Instagram that he stands firmly against a customer angry over the anti-police demonstrations.

Bezos, the world’s richest man with a net worth of nearly $150 billion, posted both an email from the woman, who was upset by a banner on the retailer’s website that reads: “Black lives matter” and his response, the Daily Mail reported.

Amazon put up the banner just days after the killing of George Floyd.

In her email, the customer told Bezos: “I am for everyone voicing their opinions and standing up for what you believe in, but for your comp any to blast this on your website is very offensive to me … ALL LIVES MATTER!”

Bezos replied: “I have to disagree with you. ‘Black lives matter’ doesn’t mean other lives don’t matter.

“Black lives matter speaks to racism and the disproportionate risk that Black people face in our law enforcement and justice system,” Bezos went on.

“I have a 20-year-old son, and I simply don’t worry that he might be choked to death while being detained one day. It’s not something I worry about. Black parents can’t say the same.”

Bezos and his ex-wife MacKenzie have four children — three sons and an adopted daughter. Preston, 20, is the oldest.

Bezos’ support for Black Lives Matter hasn’t kept Amazon grocery subsidiary Whole Foods from being vandalized, the Daily Mail reported.

In Manhattan, graffiti on one boarded-up Whole Foods story read “guillotine for Bezos.”

On the West Coast, in Los Angeles, looters smashed through the doors of a Whole Foods.

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Mending JPM chief drops into Mt. Kisco Chase branch

Erin Fox

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Mending JPM chief drops into Mt. Kisco Chase branch

Jamie Dimon’s first public sighting since he underwent heart surgery three months ago has resulted in a photo of him kneeling at a local Chase branch — sparking questions about whether he was “taking a knee” in solidarity with widespread racial justice protests.

The 63-year-old CEO of JPMorgan Chase underwent emergency heart surgery on March 5, before the coronavirus crisis escalated, and has been away from the office ever since due to Empire State lockdown orders.

According to a JPMorgan spokesperson, the photo took place at his local Chase branch in Mt. Kisco, NY, and is the result of Dimon’s first interaction with his staff since his emergency acute aortic dissection.

Sources say Dimon dropped in on the branch on Friday while wearing a face mask and ended up chatting with 10 staffers there. He fielded questions on topics ranging from how he’s feeling post-surgery to how small business clients are faring in the area, and congratulated the Mt. Kisco branch on staying open throughout the pandemic.

At some point during the impromptu powwow, the man sometimes referred to as “America’s Banker” dropped to one knee alongside five other masked staff members. Five more staffers stood behind them in front of the bank’s massive vault, while another staffer took the photo.

Jamie Dimon
Jamie DimonAFP via Getty Images

Chase declined to comment on whether Dimon’s kneel was a show of support for protests that have engulfed America following the death of George Floyd at the hands of Minneapolis Police. Footage of the arrest shows an officer kneeling on the neck of an unarmed Floyd for more than eight minutes.

Earlier this week, Dimon issued a statement in support of the protests.

“Let us be clear — we are watching, listening and want every single one of you to know we are committed to fighting against racism and discrimination wherever and however it exists,” he wrote as part of his memo to staff.

Dimon, who has been working from home since early April, is returning to an economy crushed by widespread lockdowns. But he appeared to predict a quick return to normalcy last week during a virtual financial conference held by Deutsche Bank.

“You could see a fairly rapid recovery,” Dimon said at the time, citing government stimulus and reopening the consumer economy as a potent combination.

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