Tim Cook is now Tim Apple on Twitter
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Photo by Chip Somodevilla/Getty Images
Apple CEO Tim Cook has slyly changed his name to “Tim Apple” on Twitter, an apparent reference to the president of the United States, perhaps mistakenly, messing up his name at a meeting. Technically, it’s “Tim ,” but only Mac and iOS users can see the Apple logo symbol.
Last night at a typical American Workforce Policy Advisory Board meeting, President Trump flubbed Cook’s name and unmistakably called him “Tim Apple.” Shortly after The Verge first reported the mistake, it took off on social media, ultimately becoming a trending Twitter moment. Now, Cook has changed his display name on Twitter in an apparent attempt to laugh alongside everyone on the Internet.
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The Apple character isn’t a Unicode symbol and is only visible on Apple operating systems, unfortunately. So if you’re using an Android or Windows device, you’ll only see a blocked-out square or another “failed to render” symbol.
All of these non-Apple symbols are virtually unpronounceable and mean nothing to the average person. The one below this paragraph for example? That might as well be “Tim Xbox.”
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Cook’s new name viewed from an Android device
Here are a few other ways the symbol appears on non-Apple devices:
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If you somehow missed the original clip from the meeting last night, here it is:
This could be the beginning of the end for Facebook’s social network
Facebook is pushing more deeply into private, encrypted communication. What does that mean for your News Feed?
Facebook’s future is private messaging.
That much was clear from a post CEO Mark Zuckerberg shared on Wednesday outlining the company’s newly stated direction. Intimate, encrypted, private messaging services like WhatsApp and Messenger are in. Facebook’s semi-public, not-very-private News Feed is out.
“I believe the future of communication will increasingly shift to private, encrypted services where people can be confident what they say to each other stays secure and their messages and content won’t stick around forever,” Zuckerberg wrote. “This is the future I hope we will help bring about.”
The post was significant for a number of reasons, perhaps most importantly because Facebook has built a $55 billion annual advertising business on products that aren’t really private, don’t have end-to-end encryption, and do stick around forever. (Or pretty darn close.)
This is, on the surface, a dramatic shift in Facebook’s thinking. And it leads to a number of questions.
Why is Facebook doing this?
Zuckerberg answers that question without explicitly answering that question. “In a few years,” he wrote, “I expect future versions of Messenger and WhatsApp to become the main ways people communicate on the Facebook network.” It’s as simple as that. Facebook doesn’t make product decisions without consulting user data. And if Zuckerberg says he expects that WhatsApp and Messenger are the future, it’s because that’s where Facebook sees that users are already spending their time.
Facebook foreshadowed this announcement last fall when it told investors that Stories, the ephemeral photo and video montages it copied from Snapchat, was blowing up in terms of popularity. “I just think that this is the future,” Zuckerberg said at the time. “People want to share in ways that don’t stick around permanently, and I want to be sure that we fully embrace this.”
Facebook can see what its users are doing — they’re sending private messages and sharing disappearing photos and videos — and it’s leaning into those trends.
What will happen to Facebook and Instagram?
Nothing yet. Zuckerberg didn’t say anything about abandoning Facebook or Instagram, and it sounds like Instagram will eventually get more privacy and encryption features that fit with Facebook’s new mission. The reality is that Zuckerberg couldn’t abandon those products even if he wanted to: The vast majority of Facebook’s revenue comes from those two apps, so they won’t be going anywhere.
What this does seem to signal, though, is something rather startling: This feels like the beginning of the end of Facebook’s core social network. No, Facebook isn’t going away anytime soon. Yes, Facebook may still be relevant a decade from now. And it’s likely the company will continue to invest in building Facebook features, like Marketplace and Facebook Watch.
But Facebook’s core social network is primarily a place to post photos and videos and comments that aren’t private and don’t disappear. That’s not the future Facebook is building toward — and apparently not the future that users actually want. What that actually means for your News Feed is unclear, though it’s not likely to change anytime soon.
Will this impact Facebook’s business?
This may be the most important question, and it’s one Zuckerberg didn’t address in his post. But Facebook’s entire business is built on a data-driven advertising model. Facebook puts ads into users’ feeds, and messaging apps don’t have those feeds. Those ads are also valuable to advertisers because Facebook can target people based on information that they keep on their profile. If everyone is using private messaging apps with high levels of encryption, it’s fair to wonder what data Facebook will use to target people with ads moving forward.
That doesn’t mean there is no business model for private messaging — WhatsApp and Messenger have Stories, for example, and Facebook can sell ads alongside those Stories. WhatsApp is also building out a business product, which will let brands and retailers communicate with users via messages. Given Facebook’s interest in cryptocurrencies, it seems that there may be an opportunity for the company to push deeper into commerce and payments as things become more and more private and secure.
But WhatsApp and Messenger are not big businesses for Facebook despite having more than 1 billion users apiece. Figuring out how to make money from messaging will be crucial to this process. It appears Facebook has time. The company’s stock barely moved on the news Wednesday, which means it’s clear investors aren’t concerned, at least in the short term.
Are there risks to having everything encrypted?
Yes, there are definite tradeoffs. Messages that are end-to-end encrypted are not accessible by Facebook, which is great news for privacy, but also make it easier for bad actors to use Facebook products to do harm. WhatsApp is already dealing with this in India, where so-called fake news as been a real problem, in some cases leading to real offline violence. In Brazil, a WhatsApp executive was arrested a few years ago because the government wanted access to some user messages, which Facebook claims it couldn’t provide. Zuckerberg said that in Facebook’s private, encrypted future, the company will not be able to catch posts on “child exploitation, terrorism, and extortion,” but that it still has “a responsibility to work with law enforcement and to help prevent these wherever we can.”
There are benefits to encryption, too. Most people would probably say they don’t want Facebook (or Apple or Google) accessing their private messages. And as Zuckerberg pointed out, this could also be important as messaging apps become a place for financial transactions.
Ultimately, though, Zuckerberg says the trade-offs are worth it. “We understand there are a lot of trade-offs to get right, and we’re committed to consulting with experts and discussing the best way forward,” he wrote.
Is this why Facebook wants to merge all of its messaging apps?
It’s a big part of it, yes. If people are flocking toward private messaging, it behooves Facebook to integrate its services so that’s it’s easier to create one massive network. Zuckerberg said as much on Wednesday.
“Today if you want to message people on Facebook you have to use Messenger, on Instagram you have to use Direct, and on WhatsApp you have to use WhatsApp,” Zuckerberg wrote. “We want to give people a choice so they can reach their friends across these networks from whichever app they prefer.”
Eventually, Zuckerberg wants this to “extend” to text messages as well.
It’s also possible Facebook is doing this to avoid anti-trust problems. There has been a lot of talk in the past year that Facebook is too big, and may need to be broken up. That would be a lot harder to do if all its apps and services are linked.
How quickly will all this happen?
It’s going to take some time for Facebook to reorient its products to feel more private. Zuckerberg said this transition would happen “over the next few years.” It’s not at all uncommon for Facebook to announce things that never come to fruition, but this feels a little too big to just fall by the wayside.
One thing to keep in mind: Facebook can’t merge all of its individual messaging apps until, at a minimum, they’re all end-to-end encrypted. That can be a lengthy process; it took WhatsApp years to fully roll it out. It may not take that long this time around, and one source inside Facebook said the goal is to make some noticeable movements on this merging process during the second half of 2019. But this entire transition to more encryption and more privacy won’t be done anytime soon.
Airbnb is acquiring a hotel company. So is Airbnb now a hotel company?
HotelTonight, last valued at over $450 million, is joining Airbnb.
Airbnb is making what could be its biggest acquisition yet, plunging fully into the hotel space by acquiring HotelTonight, the provider of last-minute, boutique options for a night’s stay.
The announcement further cements Airbnb’s transformation from a mere platform for wayward travelers looking for a spare room in an off-beat home into a full-fledged travel company that is increasingly similar to the hotel incumbents it began to replace more than a decade ago.
Airbnb has over the last several years been trying to expand its revenue lines beyond its core business of facilitating the rental of rooms in people’s houses. It launched an experiences line that sells things like fitness classes and has slowly added hotel rooms from more independent providers — like those found on HotelTonight.
Deal terms weren’t immediately disclosed, but HotelTonight’s last private valuation almost two years ago was north of $450 million. The company has said it was profitable since 2016. So it’s safe to say this is costing a good bit of change to Airbnb, which is preparing to go public likely early next year. Airbnb’s biggest prior acquisition was its purchase in 2017 of Luxury Retreats for a reported price of around $200 million.
“A big part of building an end-to-end travel platform is serving every guest, whether they plan their trip a year or a day in advance,” said Airbnb CEO Brian Chesky. “Working with the incredible team at HotelTonight, we will offer guests an unparalleled last-minute travel experience that provides unique, memorable hospitality on every trip, on any schedule, at any time.”
Airbnb has been working to add alternative options to the couch-in-a-living-room that originally gave the company its prominence. Last year, the company unveiled changes like a loyalty program and began to allow its guests to book rooms through the portal in boutique hotels, bed-and-breakfasts, and vacation homes.
At its founding, Airbnb was on a warpath against the incumbent hospitality industry — and the feeling was pretty mutual. Hotel chains have lobbied intensely against Airbnb and tried to say that the home-sharing rival plays by a different set of rules than the Hiltons and Marriotts of the world.
Airbnb is now encroaching further on their turf, as the HotelTonight acquisition makes clear. But in some ways, that cultural disconnect represents a challenge for Airbnb: It is no longer merely a bonhomie startup filling some spare beds in a few apartment buildings.
But as it expands into fields like travel content, perhaps airlines, and now a full menu of boutique hotels, the task for Airbnb will be to maintain the mission that made it a $30 billion company in the first place.
Afraid to Dirty Your Pricey Air Jordans? Call In the Super Sneaker Cleaners
Fancy footwear fans find best way to get their shoes clean is to pay someone else to do it; ‘works of art’
Moshood Olafunmishe rarely wore his $660 Kanye West-designed, limited-edition Yeezy Boost sneakers, preserving them for special occasions only.
When he did finally wear the shoes to a party recently, the unthinkable happened: Someone spilled a drink on them.
“It was a massive stain on the front,” said the London-based 28-year-old market researcher. “I was so annoyed when I looked at it and knew there was no way I was going to be able to do them justice.” Because the shoes are made of knitted fused yarn, suede and have a fabric loop at the heel, he knew they would require a clean beyond his expertise. He put the Yeezys away in a box to languish in limbo. “I was on the brink of throwing them away.”
Pressure to keep limited-edition, expensive footwear looking good has long been high among luxury sneaker lovers. But a toothbrush and soapy water are no match for today’s lavish styles which can cost more than $1,000 and feature at least three different materials whether mesh, suede, leather or some type of fabric in addition to rubber.
Hardcore fans, known as “sneakerheads,” are increasingly finding the best way to get their shoes clean is to pay someone else to do it for them. Some of the most effective cleaners turn out to be ex-Marines.
Mr. Olafunmishe eventually discovered a sneaker-cleaning business on Instagram with before-and-after pictures of cleaned-up kicks. After mailing in his Yeezys and paying about $35, he says he got them back a few weeks later looking practically brand new. Now, he can take out any of his 20 high-end sneakers whenever he wants.
The desire to keep these harder-to-clean shoes looking “fresh out the box,” has created an emerging industry of self-proclaimed sneaker-cleaning specialists. Companies generally charge about $35 for a “basic cleaning” and more for advanced services; Other Peoples Kicks, a Moreno Valley, Calif.-based cleaner, charges $150 for sneakers “in critical condition.”
Coveted styles such as the Nike Air Jordan 11 “Concord” can retail for $220 and Balenciaga’s blue and orange Balenciaga’s Triple S sneakers sell for $950. They can sell for hundreds more on the resale market. With those kind of prices, cleaners bet some owners won’t blink at their prices.
”I wouldn’t want to waste my money on a new pair of sneakers that I already had if I could clean them up,” said Prentice Burleson, who launched Other Peoples Kicks in January. The 41-year-old used to clean and restore sneakers from his own extensive collection, currently at around 400 pairs, as a hobby, learning from YouTube. “I would see someone do it and go through the steps with them,” he said.
Confident he had mastered the skills after two years, the retired Marine set up “a catchy name,” business cards, a website and UPS Drop Box. “I love helping people,” he said.
How-to-clean videos abound on YouTube with sometimes elaborate step-by-step directions. Methods vary, but can include disinfectant wipes, non-gel toothpaste, a lightly damped cloth, a leather moisturizer and a suede and leather protector spray.
Tramaine Oxley, whose seven-month-old business goes by the name Sneaker_staykrisp, works out of the kitchen of his Brooklyn apartment, in the wee hours before and after work. The 37-year-old, who drives for Uber by day, says he is self-taught, having cleaned his and his friends’ sneakers for years. His tools include a microfiber cloth, a soft brush, a hard-bristle brush, hot water, a cleaning solution, and an eraser.
It can be a dirty business. “I’ve had people whose sneakers smell horrible,” Mr. Oxley said. “Some people wear sneakers without socks. Feet sweat.” He uses a sneaker laundry detergent plus a deodorizing spray in those cases.
Some traditional shoe-repair shops are adding sneaker cleaning to their services. “We’ve been seeing a younger demographic bringing in designer luxury sneakers,” said David Mesquita, vice president and co-owner of Leather Spa, a New York-based service with five locations in the city including a Saks Fifth Avenue men’s store. “It’s definitely 50% more luxury sneakers business now than two years ago.”
Customers are often ecstatic when they get their dirty or damaged sneakers back from a cleaner. “I said ‘Are you sure you didn’t just buy a new pair?’,” said Sindu Carty, a 27-year-old college student from Brooklyn, after seeing what Mr. Oxley had done on her scuff-marked and dirty $500 Yeezys. “I didn’t believe it.” She was relieved after having been teased about the condition of her sneakers by friends.
“A sneakerhead can’t walk around in dirty sneakers; that’s like a huge faux pas,” said Richard Dudley, a security consultant who in 2015 founded Bespoq, a Washington, D.C.-based service that specializes in shoe shines and sneaker cleaning. He started the business after being unable to find repair shops that could properly clean his own footwear, including limited-edition sneakers.
Military training comes in handy. He is a 45-year-old former Marine. “Properly cleaned and maintained footwear is a part of our genetic makeup,” he said. “I got a couple of buddies of mine, former military guys, to help me. These are people that know how to do this.”
For Kenneth Collier, of Richmond, Va., who operates Sole Bandit Restorations out of the back of a barbershop in an office complex, this isn’t just a side job. “This is my everyday hustle,” the 24-year-old said. “If I don’t touch shoes every day, I don’t eat.” He is grateful the high-end sneaker boom hasn’t shown signs of slowing down.
“People see them as like maybe works of art,” said Reon Codrington, who launched his sneaker-cleaning service, Crep Guardiola, in London last year.
The 30-year-old travel agent cleans and restores expensive sneakers out of the garage of his home. He decided to start the business after getting comments on how clean his own sneakers were.
“I was just winging it in the beginning, to be fair,” he said. He made “not too many mistakes” that he was able to cover up. Now he counts Mr. Olafunmishe among his clients. A beat-up pair of Balenciaga sneakers from another customer took him about two hours to get in decent shape. “I wasn’t able to get it ‘factory fresh’ but he was happy with them,” he said. “Luckily enough the person I was cleaning it for was a friend of a friend.”
Never Solved the Rubik’s Cube? This High-Tech Version Will Help
The GoCube—a high-tech update with a companion app—offers games and coaching to help you finally solve the notorious puzzle
I’VE SOLVED a Rubik’s Cube only once, if you consider peeling off the stickers and reattaching them “correctly” a solution. As a 10-year-old, I considered it a stroke of brilliance; my cousin, whose toy I’d ruined, disagreed. I recently had the opportunity to re-establish my genius credentials a bit more ethically with the GoCube—a high-tech update of the notoriously vexing ’70s puzzle.
“The [original] Cube is really complex and it’s really frustrating,” warned Udi Dor, one of the inventors of GoCube and CEO of Particula, a tech company that started out crafting tricks for magicians. “Only once you solve it do you start to enjoy it. It’s like riding a bicycle. All the trials are hard, but once you get the hang of it, you can enjoy the ride.”
On the outside, GoCube ($119, getgocube.com) resembles its iconic predecessor: six sides, six colors, 54 squares. Instead of stickers, however, it’s covered in handsomely hued plastic tiles and rimmed with LEDs. But inside is the real trick. Thanks to wireless smart sensors built into each face that track your rotations and an embedded gyro and accelerometer to track the 3D position of each square in real time, you can link the toy to a phone or tablet app via Bluetooth and watch the colors shift as the GoCube spins. To grasp the intricacies of how to solve the puzzle, follow along as on-screen tutorials offer coaching.
You’ll need the help—more than 43 quintillion combinations are possible with both the classic and the upgraded cubes, and though the world’s best “speedcubers” can crack the original puzzle in five seconds, that comes from dedicating their lives and hands to training.
I don’t have that kind of time, but the GoCube helped accelerate my learning. To start, the app shows you the basic moves, alerts you when you confuse clockwise and counterclockwise and reveals critical secrets (e.g., the center boxes on all six sides are anchored to the core, so white and yellow will always be on opposite sides). To ease you into the right way to spin the sections, the app offers games. In one, it depicts a grid of nine GoCubes, assigning colors to each of the 81 squares to form a mosaic (say, a duck). You’re challenged to manipulate the GoCube in your hands until, one by one, you “solve” each portion of the grid. I successfully manipulated my way to the image of a pixelated “Space Invaders” monster.
It’s admittedly tough to learn the cube when your eyes are glued to a smartphone’s screen. Your hands are moving, but you’re not really paying attention as the faces turn solid, only realizing successes when the GoCube glows in your hand as a reward. As I grasped the cube’s logic, my hands and eyes synced and I began to twist it more purposefully. If I jumbled the colors to the point of crisis, I resorted to the app’s “Solver,” a shortcut to victory.
You can also time each attempt to complete the puzzle, battle live opponents in head-to-head matches and more. In May, the creators will release “Cube Academy”—a more in-depth set of tutorials.
Having played with the GoCube for a week, obsessively fiddling day and night (a surprisingly satisfying pursuit), I finally, triumphantly solved it myself. If only my bitter cousin could see how far I’ve come.
Slow Global Growth Likely Keeps Fed on Hold, Spurs ECB Action
The European Central Bank announced new stimulus plans and the Federal Reserve signaled more reluctance to raise U.S. interest rates this year
The European Central Bank made a U-turn on Thursday with new plans to stimulate the eurozone’s faltering economy, while Federal Reserve officials signaled increasing reluctance to raise U.S. interest rates at all, as evidence mounts of a slowing global economy.
The ECB, acting less than three months after it phased out a €2.6 trillion ($2.9 trillion) bond-buying program, said it would hold interest rates at their current levels at least through the end of this year—months longer than previously signaled. It also will issue a fresh batch of cheap long-term loans for banks starting in September.
Federal Reserve officials, meanwhile, appeared more cautious on U.S. interest rates. The U.S. economic outlook “appears to have softened against a backdrop of greater downside risks,” said Fed governor Lael Brainard on Thursday. “Prudence counsels a period of watchful waiting.” She made no mention of the need to raise interest rates, a shift from her position last year.
Investors quickly reacted to a ECB response to slowing global growth that was more aggressive than they had expected.
Shares slid, with the Stoxx Europe 600 falling 0.8% and the Dow Jones Industrial Average down 1%. The euro fell 0.4% against the dollar, as yields on Italian and German bonds declined, a sign investors are uncertain about prospects for growth and inflation.
As recently as December, the Fed, ECB and other developed economy central banks expected to raise interest rates this year because they projected solid global growth. The turnaround reflected a significant rethink of the outlook.
Negative interest rates in Europe and Japan, together with historically low nominal rates in other rich nations, leave central bankers with little room to cut borrowing costs to provide stimulus if their economies fall into recession. The fall of German 10-year bund yields to 0.09% from 0.12% is a sign of the continued extraordinarily loose lending conditions in the eurozone.
As a result, global central bankers appear to be moving preemptively to shore up flagging growth before any slowdown deepens.
The Bank of Canada on Wednesday held its key interest rate steady at 1.75%, and officials expressed more caution about the outlook while revising down domestic growth forecasts. Australia’s central bank likewise held its rate steady on Tuesday and warned of growing risks to the global economy.
China’s government has unveiled growth-enhancing efforts, including new tax cuts and increased bank lending to small and private companies.
ECB President Mario Draghi said Thursday the likelihood of a recession is very low, but risks to the economy remain prevalent. The ECB’s decision was unanimous, he said at a press conference.
“We never thought we were behind the curve,” Mr. Draghi said, and “in any event today we are not behind the curve, for sure.”
The Fed signaled in January it was moving to the sidelines after raising rates four times last year. As recently as December, officials had projected two more rate increases for 2019. Officials are set to lower these projections at their meeting in two weeks, likely showing either one or zero rate increases for the year.
The Fed’s January shift helped calm markets that turned more volatile last December, when trade tensions between the Trump administration and China flared and the federal government began a partial shutdown that lasted for 35 days, a record. The S&P 500 slid 11% between the end of November and Jan. 3, and it has rallied 13% since Mr. Powell first signaled the pause on Jan. 4. The index is 6% below the all-time high reached last September.
The Fed is also preparing to announce when this year it will end the gradual runoff of its $4 trillion asset portfolio, which will leave the Fed with a much larger balance sheet than officials had anticipated when they began shrinking the holdings in 2017.
Fed and ECB officials have pointed to rising dangers of slower global growth and political uncertainties exacerbated by trade disputes between Washington and several allies as well as the United Kingdom’s pending exit from the European Union.
Fed officials have also highlighted muted inflation readings in justifying their turn away from raising rates. Several U.S. central bankers have suggested the combined effects of higher borrowing costs and a fall in stock prices late last year and a slowdown in foreign economies could keep a lid on domestic price pressures.
Several Fed officials, meanwhile, have set a high bar to raise rates again, particularly now that the target range for their benchmark rate is at the low end of estimates of a neutral setting that neither spurs nor slows growth.
One camp has said rates are still below neutral, and their baseline outlook has the Fed raising rates once more this year.
Another camp has said it sees little need to raise interest rates so long as inflation isn’t rising above the central bank’s 2% target. San Francisco Fed President Mary Daly said in an interview last month that If her current outlook of 2% growth and inflation at or just under the 2% target is realized, “the case for interest rate increases is not there.”
Two top allies of Fed Chairman Jerome Powell have indicated their views may align with this latter camp. In remarks last week, Fed Vice Chairman Richard Clarida said it was appropriate for the Fed to step back from a framework that had guided rate increases over the last three years.
For years, officials moved rates up based on the theory that a falling unemployment rate would eventually generate price pressures and that, even with inflation running below its 2% target, the Fed needed to act preemptively to contain such pressures.
Mr. Clarida said last week that Fed officials must now focus on “maximizing the odds of being right given the reality that the models that we consult are not infallible.” For example, he said, “were a model to predict a surge in inflation, a decision for preemptive hikes before the surge is evident in actual data would need to be balanced against the considerable cost of the model being wrong.”
New York Fed President John Williams, another top lieutenant to Mr. Powell, said Wednesday he believed U.S. interest rates had nearly reached neutral and that he expected the domestic economy to grow at its 2% trend level this year. That outlook would be consistent with holding rates steady.
The ECB’s moves reflect sustained weakness in several economies. In 2017, boosted by its stimulus measures—including bond buying and negative interest rates—and a surge in demand for its exports from China and elsewhere, the eurozone’s economy grew at the fastest pace in a decade, outpacing the U.S. But it slowed sharply last year as those sources of support waned, growing at its weakest pace since 2014.
European officials are seeking to shore up an economy that has been rattled by shocks ranging from a slowdown in China to mass protests in France and bottlenecks in Germany’s crucial auto industry. They are treading a careful path between providing sufficient support for the region’s softening economy while avoiding any appearance of panic, which could ricochet through financial markets.
Still, the ECB refrained from more extreme measures such as restarting its bond-buying program or cutting its deposit rate further from minus 0.4%. These options weren’t discussed, Mr. Draghi said.
“In a dark room, you move with tiny steps,” he said.
Closing Stock Market SummaryThe S&P 500 lost 0.8% on Thursday, as a negative economic outlook from the European Central Bank (ECB) helped fuel growth concerns and profit-taking interest. Thursday's risk-off mindset was made apparent by the underperformance of cyclical sectors and the flight-to-safety trade in the U.S. Treasury market where the 10-yr yield dropped six basis points to 2.64%.
The Dow Jones Industrial Average lost 0.8%, the Nasdaq Composite lost 1.1%, and the Russell 2000 lost 0.9%. A technical violation of the S&P 500's and Nasdaq Composite's 200-day moving averages also contributed to some selling interest; both closed below that key technical level.
10 of the 11 S&P 500 sectors finished lower with consumer discretionary (-1.4%), financials (-1.1%), and information technology (-0.9%) leading the retreat. Conversely, the utilities sector (+0.3%) was the lone group to finish higher.
The European Central Bank issued a dovish-minded policy stance, which was an acknowledgement of the slowing growth in the eurozone.
The ECB left its key interest rates unchanged, but it also (1) pushed out its guidance for rates to stay at their present level at least through the end of 2019, versus prior guidance of at least through the summer of 2019; and (2) reintroduced a targeted long-term refinancing operation (TLTRO) that will begin in September 2019 and continue through March 2021.
At the same time, the ECB cut its real GDP growth forecast for 2019 to 1.1% from the 1.7% growth forecast it provided as recently as December.
The timing served as a reinforcement of the concern that the global economy is weakening and that the U.S. market has gotten ahead of itself pricing in a more upbeat growth outlook that isn't being corroborated with falling earnings estimates.
Earnings growth for multinational companies will remain at risk from a strengthening dollar. Pronounced weakness in the euro following the ECB decision (-1.1% to 1.1183 against the dollar) drove a 0.8% gain in the U.S. Dollar Index (97.70, +0.82).
Kroger (KR 25.61, -2.83, -10.0%) and Burlington Stores (BURL 147.28, -19.90, -11.9%) were among the more notable companies Thursday that issued downside earnings guidance.
Reviewing Thursday's economic data, which included the weekly Initial and Continuing Claims report and revised fourth quarter Unit Labor Costs and Productivity, and the Consumer Credit report for January:
- Initial claims for the week ending March 2 were low at 223,000 (consensus 224,000), as expected, while continuing claims for the week ending February 23 fell by 50,000 to 1.755 million.
- The key takeaway from the report is that the low level of initial claims is consistent with prior readings that have been consistent with the understanding that labor market conditions remain tight.
- Nonfarm business sector labor productivity increased 1.9% (consensus 1.7%) in the fourth quarter. Unit labor costs increased 2.0% (consensus 1.5%).
- The key takeaway from the report is that the annual average productivity from 2017 to 2018 was a lowly 1.3%, which is below the long-term rate of 2.1% from 1947 to 2018.
- Total outstanding consumer credit increased by $17.0 billion in January (consensus $17.0 billion) after increasing a revised $15.4 billion (from $16.5 billion) in December.
- Once again, credit growth was rooted in nonrevolving debt, like car loans and student loans, while revolving credit (credit cards) expanded at a more muted pace.
Looking ahead, investors will receive the Employment Situation Report for February and the Housing Starts and Building Permits Report for January on Friday.
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