Upbeat Republicans lift sentiment index
ANN ARBOR, Mich. -- Consumer sentiment climbed in August to a seven-month high as a measure of the outlook for the U.S. economy and personal finances registered the largest one-month advance since the end of 2011, according to University of Michigan survey data released Friday.
The sentiment index rose to 97.6 from 93.4 in July.
A robust labor market remains a primary driver behind the improving attitudes about the economy. A favorable outlook for the economy was anticipated by 55 percent of all respondents, the highest share in two years. The caveat is that most Republican households expected gains, while most Democrats forecast declines.
Half of all consumers in each of the last three Michigan surveys reported that their finances had recently improved, the best reading since 2000, the report showed.
Households that view their financial well-being as improving are more likely to boost consumer spending, which powers the economy.
-- Bloomberg News
Sugar consumption rising, but slowly
ROSEVILLE, Calif. -- The growth rate of sugar consumption is slowing down, a change can be attributed to several factors, according to a new report from Rabobank.
The factors include warnings about rising obesity rates, government initiatives such as soda taxes, and manufacturers' commitments to reformulating processed foods to lower their sugar content.
And emerging markets aren't likely to provide an alternative for the sugar industry. Rising incomes tend to slow the consumption of processed foods, and sugar with them.
"This whole movement has gone beyond the fad stage and become a trend," said Andy Duff, a global strategist at RaboResearch and an author of the report. "It does give the market a shake. We're saying it's something you shouldn't dismiss."
The trend is evident at the grocery store and in the news. Snacks are getting healthier. People are drinking less soda. Processed foods once heavy on the corn syrup are being replaced with those bearing "clean labels" and shorter ingredients lists, so artificial sweeteners aren't taking sugar's place.
-- Bloomberg News
U.K. McDonald's workers vote to strike
LONDON -- McDonald's Corp. workers at two restaurants in England have voted in favor of a strike -- in what would be the first industrial action by staff of the American fast-food chain in the U.K.
Workers at one site in Crayford, near London, and a second in Cambridgeshire voted following a dispute over intentionally unpredictable scheduling and the company's handling of internal grievances.
"Workers have found themselves living on low wages -- with no guarantee of hours," the Bakers', Food and Allied Workers Union said in a statement after the vote on Friday. "This has been viewed by some as punishment for joining a union," it said, adding that a strike is planned for later this year.
Staff are now seeking a pay rise to $12.89 an hour, with workers currently awarded the minimum wage of about $9.66 for staff aged 25 and over, union president Ian Hodson said by phone.
The union cites the pay rise given by McDonald's to U.S. workers in 2015 and their continued push to achieve a pay rate of $15. "McDonald's workers in the U.K. will fight to achieve the same impressive results seen by their trans-Atlantic colleagues," it said.
-- Bloomberg News
Power firm Calpine will sell for $5.6B
HOUSTON -- Private equity firm Energy Capital Partners and a consortium of investors struck a deal to buy U.S. power generator Calpine Corp. for $5.6 billion in cash.
Calpine investors will get $15.25 a share, the Houston-based company said in a statement on Friday, 13 percent more than Thursday's closing price. The investor group includes Access Industries and Canada Pension Plan Investment Board.
Power generators that sell supplies directly into wholesale markets like Calpine have seen their margins squeezed by cheap natural gas, a surge in renewable energy and subsidies for nuclear reactors in some states.
The rout has touched off a wave of consolidation and plant sales with companies including FirstEnergy Corp. and American Electric Power Co. looking to get out of the business altogether.
"Calpine is the premier power generator," Timothy Winter, a St. Louis-based analyst for Gabelli & Co. who rates Calpine a buy, said Friday by phone. "The market doesn't appreciate the story. It doesn't appreciate the whole independent power producer business. It seems like private equity does."
Calpine shares jumped $1.42, or 10.5 percent, to close Friday at $14.92. The deal is expected to close in the first quarter of 2018, pending approval from shareholders and regulators.
-- Bloomberg News
Analyst bullish on copper, aluminum
SAN MATEO, Calif. -- The booming demand for electric vehicles will create demand for more than just lithium or cobalt over time. The switch from gasoline to electric will require a large amount of infrastructure, which takes a lot of copper and aluminum too, according to Franklin Templeton's fund manager Stephen Land.
"With [the push for electric vehicles], it's hard not to feel optimistic for aluminum and copper demand," according to Land, 41, who co-manages the roughly $1.08 billion Franklin Gold and Precious Metals Fund. Copper has always seen demand stemming from auto and electronic devices, and this push for electric vehicles will accelerate that demand.
Aluminum has a lot of supply globally, but most of it comes from China, which is itself trying to reduce output because of environmental issues. This "supply/demand scenario would create an interesting setup over the medium-term" for both metals, according to Land.
Supply disruptions at major mines have also helped to lift copper prices to the highest in nearly three years, while aluminum is the best performer this year on the Bloomberg Commodity Index after the Chinese government ordered output curbs.
Electric cars contain about three times more copper than a regular vehicle, according to Glencore. Even more is needed for charging stations.
-- Bloomberg News
Business on 08/19/2017