Bus. Of Fashion : The Billionaire Who Backed Michael Kors Is Investing in Influe

Arielle Charnas | Source: Courtesy



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BoF Professional Exclusive
BY RACHEL STRUGATZAUGUST 15, 2019 05:18
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NEW YORK, United States — Billionaire tycoon Silas Chou made his name in fashion as an early investor in Tommy Hilfiger and Michael Kors.
His latest bet is on Arielle Charnas, an influencer with 1.2 million Instagram followers but no design experience.
Chou and his Vanterra Capital fund are participating in a $10 million funding round that values the Charnas brand at close to $45 million. Other investors include Harry’s and Warby Parker backer Box Group, M3 Ventures, Silas Capital, Third Kind Ventures and Rent the Runway co-founder Jennifer Fleiss.
The investment is one of the biggest secured by an influencer to date, and indicates that Charnas has ambitions far beyond her licensing agreement with Nordstrom, which expires at the end of the year. The influencer has hired Matt Scanlan, co-founder and chief executive of the cashmere brand Naadam, to turn her Something Navy brand into an independent business. Scanlan will remain at the helm at Naadam.
For now, Something Navy’s chief asset is its founder’s Instagram-famous face. Though Charnas employs a small team that works with her on social media content, Nordstrom has handled the design, manufacturing and logistics involved in the brand’s apparel and accessories lines.

Silas Chou participated in a $10 million round of funding | Source: Courtesy
Those collections have generated big sales for the department store, including $4 million in a single day last September. Shortly after, Nordstrom Co-president Pete Nordstrom called Charnas’ collections the “most successful launches for any brand” at the retailer. Charnas’ final collection with Nordstrom comes out in November. Chou and the other investors are gambling that her personal brand is strong enough to stand on its own.
“She’s not a designer … neither was Ralph Lauren … Calvin Klein … [or] Tommy Hilfiger,” Scanlan said. “These guys were just style merchandising icons. They understood the lifestyle that they wanted to position for people and they had a clear, concise vision of what that looks like and could communicate that.”
Scanlan will hire between 12 and 20 employees in the next 18 months to build a direct-to-consumer “lifestyle brand.” The initial focus will be on apparel, with 10 to 20 “core styles” dropping every 30 to 40 days at the brand’s online shop and, eventually, a network of her own brick-and-mortar stores. Over the next few years, they plan to roll out accessories, home decor, childrenswear and beauty.
In striking out on her own, Charnas is taking on more risk; it will now be her and her investors, not a third-party retailer, who must grapple with design and the complications that inevitably arise at any fledgling e-commerce operation, from cost overruns to production hiccups to the inevitable flop releases. She also won’t be able to rely on Nordstrom’s marketing engine to get the word out about her products.

Charnas’ Instagram account will therefore remain central to the operation. It will act as a platform to crowdsource ideas and present new products, Charnas said. She added that she’ll continue to work with other brands and retailers, though she plans to scale back on the sponsored content.
“I want to make girls that can’t be in the fashion industry and can’t afford runway designs to feel included,” she told BoF.
Even with a loyal fanbase, it’s still a gamble. Charnas is launching her business at a time when many of her fellow influencers are backing businesses ranging from swimsuits to co-working spaces. Meanwhile, consumers bombarded with ads and sponsored content are growing increasingly disenchanted with what they see on social media.
And Charnas herself has attracted controversy as her star has risen. Diet Prada accused Charnas of knocking off designers for her some of her Nordstrom pieces, posting side-by-side photos on the fashion watchdog’s popular Instagram account. The New York Timespublished an article last week detailing potential harmful effects of posting about one’s children without their permission. Charnas was not named in the story, but took to Instagram to defend putting her family life on public display.
It’s really hard to be an influencer and to gain the respect from anyone in the industry
Charnas intends to work with an in-house team to create original designs. She said she won’t copy what comes down the runway but she’ll continue to draw inspiration from “designers and runway and street style.”
The influencer’s evolution into proprietor of a lifestyle brand has potential to succeed, said Lauren Goodsitt, an analyst at Mintel. But assembling a strong team is one of the most important steps in that transition, she said.
“[Fans are] looking at them as more than just, ‘Oh, these are the women who post pretty pictures on social media,’” Goodsitt said. “They’re really becoming brands in and of themselves.”
Still, Charnas said she’s well aware she’ll need to fight the perception that being an Instagram fixture and a businesswoman are mutually exclusive.
“So many people just don’t want influencers to succeed. I mean, they hate influencers,” she said. “It’s really hard to be an influencer and to gain the respect from anyone in the industry, but I think that this is the time that we’re actually going to really show the effect that we have on the customer. We are the future of fashion and the future of retail.”

(Bus. OfFashion) Revlon Taps Goldman to Explore Strategic Alternatives The makeu

Revlon Taps Goldman to Explore Strategic Alternatives
The makeup company backed by billionaire Ronald Perelman is under pressure from smaller rivals and exploring all options.

NEW YORK, United States — Revlon Inc. retained financial advisers from Goldman Sachs Group Inc. to explore strategic alternatives for the cosmetics company, according to a person with knowledge of the matter.
The makeup company backed by billionaire Ronald Perelman and under pressure from smaller rivals, is exploring all options, including potential sales of parts or all of the business, said the person, declining to comment further. No deals have been reached, but Revlon is reviewing all strategies, according to the person, who asked not to be identified discussing a private situation. A representative for Goldman Sachs confirmed the bank was hired by Revlon but declined to comment further.
Revlon’s shares rose as much as 17 percent on the news, trading at $15.56 as of 2:44 pm in New York.
Revlon has struggled to remain relevant and stem falling sales amid competition from Estée Lauder and a host of smaller companies that have used social media to rapidly gain prominence. It reported $107.5 million of liquidity, including $63 million of unrestricted cash. The company’s cash flow strengthened during the most recent period, but sales continue to slide in its North American segment due to overall challenges in the U.S. market and lower foot traffic at retail locations, S&P said in a report re-affirming the company’s CCC+ rating.
Majority owned by Perelman’s MacAndrews & Forbes Inc., Revlon offers over 15 brands in over 150 countries, including Elizabeth Arden and Elizabeth Taylor. The company has more than $3 billion of debt on its balance sheet, a majority of which comes due starting in 2020. Representatives for Revlon and MacAndrews & Forbes declined to comment.
The cosmetic company got some financial breathing room recently after getting a $200 million loan from existing lender Ares Management Corp. Proceeds of the new loan will be around $187 million after fees.
Revlon sought to grow by acquiring Elizabeth Arden in 2016 for about $419 million — but the results haven’t panned out. Perelman acknowledged the challenges in January 2018 after his daughter, Debra Perelman, was tapped to take over as chief executive officer after the departure of Fabian Garcia, who was in the top role for less than two years.
The company’s mounting losses and junk-rated debt have fueled speculation that Perelman will seek some kind of deal or asset transfer. The billionaire held about 87 percent of the company’s shares as of June 7 according to data compiled by Bloomberg. Revlon’s $500 million of 5.75 percent senior unsecured notes trade around 89 cents on the dollar, according to Trace bond trading data. Its $1.8 billion first-lien loan due 2023 is quoted around 76 cents on the dollar, according to prices compiled by Bloomberg.

Some investors and researchers have raised questions over the prospect of Revlon doing a J. Crew-style debt makeover. That retailer transferred assets to an offshore subsidiary, leaving less collateral for lenders to claim in a potential restructuring. Revlon’s then-Chief Financial Officer Chris Peterson sought to tamp down those concerns last year. “A material asset transfer is not being considered,” he said in a statement at the time.
Revlon faces a substantial debt wall in the next two years, which S&P expects the company will address in the coming months. The ratings agency maintains a negative outlook on the company, reflecting a risk of downgrade if Revlon is unable to refinance its unsecured notes before they come current in February 2020. Revlon’s support from owner MacAndrews & Forbes should help the company refinance its capital structure, S&P said.

>>> NVIDIA up 6% after upside second quarter results, mixed third quarter guidan

NVIDIA up 6% after upside second quarter results, mixed third quarter guidance (148.77 -1.30)
NVIDIA (NVDA) is trading 6% higher after beating second quarter estimates but issuing mixed guidance for the third quarter.
NVIDIA reported Q2 non-GAAP EPS down 36% yr/yr with revenue down 17%.
  • Gaming segment rev +24% Q/Q but down 27% yr/yr to $1.13 bln, reflecting a decline in shipments of gaming desktop GPUs and SOC modules for gaming platforms, partially offset by growth in gaming notebook GPUs.
  • Data center +3% Q/Q but down 14% yr/yr to $655 mln, reflecting lower hyperscale revenue.
  • Auto +4% yr/yr to $209 mln.
NVIDIA guided Q3 revenue to $2.842-2.958 bln vs. $2.98 bln S&P Capital IQ Consensus. However, guidance down the income statement implies EPS of $1.48-1.66 vs. $1.53.
The first priority of the company's cash balance is the purchase of Mellanox (MLNX). The company will return to repurchasing its stock after the close of the Mellanox acquisition, expected by the end of this calendar year.
Susquehanna analyst on CNBC said the report was better than feared as the stock has underperformed peers. Strong gross margin guidance implies potential upside in the data center segment (enabling AI for 'hyperscalers' like GOOG/FB/MSFT/AMZN/BABA etc.), which is the key market for the company despite gaming being 51% of total revenue. He rates the stock Positive.
NVDA +6% after hours, peer AMD +1.5%, SMH +0.9%

WSJ : ECB Has Big Bazooka Primed for September, Top Official Says

ECB Has Big Bazooka Primed for September, Top Official Says
The central bank is preparing a ‘very strong package’ of stimulus measures to support the flagging eurozone economy

HELSINKI—The European Central Bank will announce a package of stimulus measures at its next policy meeting in September that should exceed investors’ expectations, a top official at the central bank said.

Speaking in his offices in Finland’s capital on Thursday, Olli Rehn said the slowing global economy would see the ECB rolling out fresh stimulus measures that should include “substantial and sufficient” bond purchases as well as cuts to the bank’s key interest rate.

“It’s important that we come up with a significant and impactful policy package in September,” said Mr. Rehn, who sits on the ECB’s rate-setting committee as governor of Finland’s central bank.

“When you’re working with financial markets, it’s often better to overshoot than undershoot, and better to have a very strong package of policy measures than to tinker,” Mr. Rehn said.

Economic data from Germany and China on Wednesday showed two of the world’s economic powerhouses flagging amid headwinds in the global economy that range from trade tensions to the possibility of a disorderly Brexit.

ECB President Mario Draghi last month raised the prospect of fresh ECB action in September, but the new comments from Mr. Rehn indicate that the level of stimulus is likely to be at the upper end of analysts’ expectations.

Analysts expect the ECB will announce next month a 0.1 percentage-point cut to its key interest rate, currently set at minus 0.4%, as well as around €50 billion ($56 billion) a month of fresh bond purchases under its quantitative easing program. The program had previously been phased out at the end of last year.

By raising market expectations for the ECB’s September meeting, Mr Rehn’s comments could put pressure on any ECB policy makers critical of a large stimulus package to fall into line, said Frederik Ducrozet, an economist with Pictet Wealth Management in Geneva.

The comments suggest the ECB might cut interest rates by more than expected in September, perhaps by 0.2 percentage points, and could start to purchase new types of assets, Mr. Ducrozet said.

Eurozone government bond yields fell shortly after Mr. Rehn made his comments. The 10-year bund yield fell to a new low of -0.688%, while 10-year Italian BTP yields slid to 1.375%, a level last seen in October 2016, according to Tradeweb.

The ECB could also sweeten the terms of a new batch of long-term loans for banks by lowering their interest rate or extending their maturity, Mr. Rehn said.

A package of several measures “has a stronger impact than sequencing various measures over time,” due to synergies among different policy tools, Mr. Rehn said.

To provide space for fresh bond purchases, the ECB could adjust the rules of its bond-buying program, which currently prohibit the bank from buying more than 33% of the debt of any individual eurozone government, he added.

Mr. Rehn said he didn’t rule out a move to purchase equities under the QE program, but that would depend on the assessment of ECB staff.

He pointed to a range of risks threatening Europe’s economy, including the unstable political situation in Italy, China’s economic slowdown, uncertainties in the global economy caused by trade tensions between the U.S. and China, and the possibility of a hard Brexit.

“In my view, there is a certain weakening of the economic outlook for Europe in the last couple of months,” Mr. Rehn said. That worsening economic backdrop “justifies taking further action in monetary policy, as we intend to do in September,” Mr. Rehn said.

A strong majority in the ECB’s rate-setting committee will likely favor an aggressive stimulus package, according to officials.

Investors currently expect the ECB to cut its key interest rate to minus 0.7% and to hold rates below their current level through 2024, according to futures markets. Mr. Rehn said those market expectations showed that investors had understood the ECB’s guidance.

To offset the impact on eurozone banks of a longer period of negative interest rates, the ECB could introduce a tiered-deposit system, under which only a portion of bank deposits might be subject to negative rates, Mr. Rehn said.

The ECB could also alleviate the stress on banks by sweetening the terms of new long-term loans, known as targeted longer-term refinancing operations, he said.

Mr. Rehn was considered one of the front-runners in the race to succeed Mario Draghi as ECB President earlier this year, a job that eventually went to International Monetary Fund Managing Director Christine Lagarde. The Finn was subsequently shortlisted by European officials in the race to succeed Ms. Lagarde at the IMF, but he withdrew his name earlier this month.

A former Finnish economy minister, he served as the European Union’s economic and monetary czar during the region’s debt crisis.

WSJ : Earnings Outlook for S&P 500 Companies Looks Bleak

Earnings Outlook for S&P 500 Companies Looks Bleak
Wall Street analysts cut third-quarter profit estimates, adding to concerns including trade dispute

Investors counting on a corporate earnings rebound in the second half of the year are risking disappointment.

Wall Street analysts have cut their third-quarter profit estimates in recent weeks, painting a bleak picture for investors already grappling with a simmering trade war, pockets of economic weakness and ominous signs from the bond market.

Despite this week’s partial reprieve from the Trump administration, the latest round of tariffs on Chinese imports compound the problems already facing many companies and threaten to stifle their profit margins. Especially vulnerable are manufacturers, miners and retailers.

At best, earnings across the companies in the S&P 500 will grow 1.5% this year, FactSet projects, far short of estimates for growth of more than 6% that analysts initially forecast in January. Worse, a few analysts predict earnings could end up contracting for 2019 as a whole.

Dozens of companies, including Eastman Chemical Co. EMN 0.90% , Macy’s Inc., M -3.81% Caterpillar Inc. CAT 0.03% and Cisco Systems Inc., have issued downbeat outlooks for the rest of the year, contributing to the pullback in profit expectations.

“Everyone in April and through the beginning of May thought that the economy was going to get better in the back half of the year, trade war was going to sort of settle, certainly not escalate,” Eastman Chemical Chief Executive Mark Costa said on an earnings call last month. “And now we’re just in a very different world where I don’t think that’s true…There’s not a lot of signs of economic recovery coming in the second half.”

To be sure, surprises to the upside are fairly common with earnings reports because analysts tend to be conservative with their estimates. The first and second quarters were no different in that regard. And other companies, such as retail giant Walmart Inc., have offered more optimistic outlooks on the rest of the year as they take market share from struggling competitors, bucking the broader trend.

Still, analysts said investors shouldn’t take the slowdown in earnings growth lightly, especially as the outlook for later quarters dims. Hanging over the stock market is a diverging U.S. economy. Manufacturing activity in the U.S. has slowed for four straight months. Service activity, which includes companies in the health-care, finance and restaurant industries, has held up better as Americans maintain a solid spending appetite and as employment remains strong.

Although U.S. growth is slowing, it is holding up better than other parts of the world. The latest economic figures out of China showed its jobless rate in cities hit a record. Europe is also stumbling as Germany said its economy shrank last quarter.

A healthy U.S. economy is important, but corporate profits are the real engine behind stock market gains, said Yana Barton, a portfolio manager at Eaton Vance. Stocks tend to meet less resistance if earnings growth is robust, keeping valuation metrics such as price/earnings ratios in check. Instead, P/E ratios drifted as high as 17.5 last month, which is considered somewhat expensive as earnings growth flatlined, she said.

Without profit expansion, stocks could be more susceptible to bouts of volatility, especially when investors have been grappling with trade tensions for more than a year, along with signs that economic growth in the U.S. is slowing.

“There are times we’ve been aggressively positive, but we haven’t been that way over the last year,” said Ed Keon, chief investment strategist at QMA LLC. The bleak earnings outlook and a wide range of geopolitical issues contribute to his cautious view, he said. In response, he said he has been hedging his exposure to stocks by buying bonds.

The S&P 500 has slumped 4.7% in August, including Wednesday’s 2.9% drop, leaving the broad index roughly where it was 12 months ago. And moves in the bond market have signaled an economic slowdown could be on the horizon.

Ms. Barton said stocks would have a catalyst to move higher if the U.S. and China were to reach a trade deal or if economic data improves. The S&P 500, for example, logged one of its best days in months on Tuesday after the U.S. decided to delay some of the tariffs it planned to impose next month.

But that decision doesn’t fully alleviate concern or the cost pressures that have already mounted on companies, analysts and investors said.

Analysts’ latest revisions show the S&P 500 faces a 3.15% contraction in third-quarter earnings from a year earlier, according to FactSet. And for the fourth quarter, the S&P 500 is now on track to increase profits by less than 4%, down from the nearly 10% growth rate analysts expected at the beginning of the year.

Cisco Systems, for one, guided revenue and earnings expectations for the rest of the year lower late Wednesday due to a decline in business from service providers and China. Macy’s had also lowered its outlook for the year on Wednesday, pointing to a buildup in inventories. Tariffs on some Chinese apparel imports are expected to further strain the department-store chain. Shares of Cisco fell 8.2% Thursday, while Macy’s declined 4.4%, extending its pullback this week to 17%.

In some cases, companies are mitigating the costs of trade tariffs and the paralyzing effect they are having on business spending. But that isn’t always reflected in share prices.

Scotch tape maker 3M Co. MMM -0.34% , for example, cut production and reduced inventory because of waning industrial demand. Those moves helped it beat second-quarter profit estimates, but shares are down 17% this year.

Procter & Gamble Co. PG 1.38% , meanwhile, reported higher sales after raising prices, bucking some of investors’ concerns regarding mounting costs. Shares have risen 26% this year and have only slid 1.9% so far this month.

Tariffs aren’t the only factor to blame for the weaker outlooks. Second-quarter profit margins across all S&P 500 sectors are down from a year earlier, according to FactSet. Rising labor and commodity costs, as well as a strong dollar, have helped to dent profits.

Caterpillar, for example, cut its profit forecast last month, blaming higher labor costs, as well as trade tariffs. Its shares have fallen this year after notching steep declines this month.

“Caution is warranted as you look out to the end of the year,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management. “There’s still a reset in motion that will result in earnings being lower than what’s expected. It’s one reason why we think the market goes sideways from here.”

FT : The Business of Fashion strikes deal with the Financial Times

The Business of Fashion strikes deal with the Financial Times
News organisation buys minority stake in fashion media start-up

The Business of Fashion, the media start-up that has become an established read for the fashion and luxury sector, has sold a minority stake to the Financial Times.

The FT is leading BoF’s Series B funding round, alongside existing backers including Index Ventures and Felix Capital. It declined to disclose the size of the stake and the value of the funding round.

Imran Amed, BoF’s chief executive and editor in chief, founded the company in 2007 as a blogger with no experience in the fashion business. The London-based company now has an international audience of 5m people for its online, print and events business, including 35,000 paying members. Its conferences regularly attract big names, including Stella McCartney and Kim Kardashian.

“There are so many things we share with the FT in terms of values and business model that it was a natural fit,” Mr Amed said. “In a media landscape that had traditionally been dominated by advertising revenue, this move to subscription is a really important marketplace shift.”

John Ridding, chief executive of the FT Group, added: “There is a natural alignment between our global mindset and our focus on reader revenue to support quality journalism.”

Mr Amed said the investment would allow BoF to dedicate more resources to its membership business. The publication is also expanding its coverage into industries that are adjacent to fashion, such as beauty, watches and jewellery.

The FT has built a large digital subscription business and FT Strategies, its new consulting arm, will provide BoF with support and technology expertise. “In many ways, the FT and BoF are building a business in a similar way,” said Frederic Court, managing partner and founder at Felix Capital.

Other opportunities to collaborate were also being explored, the companies said.

The deal to take a minority stake in BoF builds on the FT’s position in the luxury sector, from How to Spend It magazine to the long-running FT Business of Luxury conference. “This investment will give us greater presence in the B2B and industry agenda,” said Mr Ridding.

>>> US Close Dow +0.39% S&P +0.25% Nasdaq -0.09% Russell -0.40%

Closing Stock Market Summary

The stock market finished mixed on Thursday, as investors weighed the resiliency of the U.S. consumer against familiar growth concerns. The S&P 500 (+0.3%) and Dow Jones Industrial Average (+0.4%) finished higher, while the Nasdaq Composite (-0.1%) and Russell 2000 (-0.4%) finished lower.

The market has been on edge this month amid the volatility and recessionary fears, which have been heightened by weakening global data and a trade dispute with China. On Thursday, China added to those worries after it threatened to retaliate against U.S. tariffs on Chinese imports but said it hopes the U.S. can meet halfway in trade talks. 

U.S. economic data, meanwhile, helped placate some growth concerns. The big report today, Retail Sales for July, showed retail sales increase 0.7% m/m last month (Briefing.com consensus 0.3%). The data coincided with upbeat results and guidance from Walmart (WMT 112.69, +6.49, +6.1%), which corroborated the view that the U.S. consumer could be the key to ward off a recession. 

Still, there wasn't a lot of conviction in today's action with the market swaying between gains and losses. Leadership was concentrated among the defensive-oriented sectors -- consumer staples (+1.5%), real estate (+1.3%), and utilities (+1.3%) -- which benefited from Walmart's report and another drop in U.S. Treasury yields. 

Today's laggards included the S&P 500 cyclical sectors. The energy sector (-0.5%) fell alongside oil prices ($54.38/bbl, -$0.77, -1.4%). The industrials sector (-0.2%) was subject to a 11.3% drop in shares of General Electric (GE 8.01, -1.02) after it was accused of accounting fraud. Information technology (-0.2%) was weighed down by disappointing guidance from Cisco Systems (CSCO 46.25, -4.36, -8.6%). 

The U.S. Treasury market, meanwhile, continued to draw in buyers. Yields took a sharp leg lower during the day following some central bank news: (1) The Wall Street Journal reported that the European Central Bank is preparing a "very strong package" of stimulus measures to boost the eurozone economy and (2) the Mexican Central Bank lowered its key lending rate for the first time in over five years. 

The 2-yr yield finished nine basis points lower at 1.49%, and the 10-yr yield finished five basis points lower at 1.53%. The 30-yr yield fell below 2.00%, finishing five basis points lower at 1.98%. The U.S. Dollar Index increased 0.1% to 98.10. 

Reviewing Thursday's big batch of economic data:

  • Retail sales increased 0.7% m/m in July (Briefing.com consensus 0.3%) and were up 1.0%, excluding autos (consensus 0.3%).
    • The key takeaway from the report is that it offered a clear reminder that the U.S. consumer is still in good shape, which is key to fending off a recession.
  • Initial claims for the week ending August 10 increased by 9,000 to 220,000 (consensus 215,000). Continuing claims for the week ending August 3 jumped by 39,000 to 1.726 million.
    • The key takeaway from the report is that there wasn't any meaningful shift in the underlying trend (which is solid) for initial claims, as the four-week moving average moved up just 1,000 to a low 213,750.
  • Nonfarm business sector productivity increased 2.3% in the second quarter (consensus 1.3%) after increasing a revised 3.5% in Q1 (from 3.4%), according to the preliminary reading. Unit labor costs increased 2.4% in the second quarter (consensus 1.6%) after increasing a revised 5.5% (from -1.6%) in Q1.
    • The key takeaway from the report is the improved trend in productivity, which was up 1.8% from the second quarter of 2018 to the second quarter of 2019 versus the annual average of 1.3% for 2018 and 2017, and 0.3% in 2016.
  • Industrial production decreased 0.2% in July (consensus 0.1%) after increasing a revised 0.2% (from 0.0%) in June. The total industry capacity utilization rate fell to 77.5% (consensus 77.8%) from a revised 77.8% (from 77.9%) in June.
    • The key takeaway from the report is that the July decrease in industrial production has reduced the yr/yr growth rate to just 0.5%.
  • The Empire State Manufacturing Survey for August increased to 4.8 (consensus 1.1) from the prior month's reading of 4.3.
  • The Philadelphia Fed Index for August came in at 16.8 (consensus 10.0), below the 21.8 reading in July.
  • The NAHB Housing Market Index increased to 66 in August from 65 in July.

Looking ahead, investors will receive Housing Starts and Building Permits for July and the preliminary University of Michigan Index of Consumer Sentiment for August on Friday.

  • Nasdaq Composite +17.1% YTD
  • S&P 500 +13.6% YTD
  • Dow Jones Industrial Average +9.7% YTD
  • Russell 2000 +8.4% YTD

WSJ : ECB Stimulus Package May Beat Expectations, Official Says

ECB Stimulus Package May Beat Expectations, Official Says
ECB President Mario Draghi last month flagged the prospect of fresh action in September

HELSINKI—The European Central Bank will announce a package of stimulus measures at its next policy meeting in September that should overshoot investors’ expectations, a top official at the central bank said.

“It’s important that we come up with a significant and impactful policy package in September,” said Olli Rehn, who sits on the ECB’s rate-setting committee as governor of Finland’s central bank, in an interview on Thursday.

“When you’re working with financial markets, it’s often better to overshoot than undershoot, and better to have a very strong package of policy measures than to tinker,” Mr. Rehn said.

Economic data from Germany and China on Wednesday showed that two of the world’s economic powerhouses are flagging amid headwinds in the global economy that range from trade tensions to the possibility of a disorderly Brexit.

ECB President Mario Draghi last month flagged the prospect of fresh action in September, but the new comments from Finland’s central banker indicate that the level of stimulus is likely to be at the upper end of analysts’ expectations.