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►  Target expands Google Express offer nationwide to counter Amazon

Target, looking to keep pace with Wal-Mart Stores and, is expanding its pact with Google’s shopping service to the entire U.S. and will soon add voice-activated smartphone purchases.

The nationwide home-delivery service broadens an offering that’s been available in New York City and California for the past few years. Soon, shoppers will also be able to buy Target goods like Cat & Jack kids’ apparel and Archer Farms food by voice over some Android and Apple phones.

The move is Target’s latest attempt to attract more online shoppers as the holidays approach. In August, it acquired a software company that manages local and same-day deliveries, and it’s also now offering curbside pickup of online orders in the Twin Cities area. For Google, the deal extends the appeal of its online mall at a time when more shoppers are beginning their online product searches on Amazon.

Target’s online sales rose 32 percent last quarter, well behind the 60 percent jump seen by Wal-Mart, which joined Google’s online mall last month. E-commerce sales across all retailers are expected to swell by 18 percent to 21 percent from November to January, compared with last year’s growth rate of 14 percent, according to Deloitte LLP.

“We’re excited to offer this service nationwide in time for the busy holiday season,“ Mike McNamara, Target’s chief information and digital officer, said in a statement.

Target and Google will also let shoppers buy with Target’s store credit cards next year, which offer a 5 percent discount and free shipping. Purchases from Target made over Google Express include free two-day delivery for orders over $35. Also in 2018, customers will be able to pick up orders in-store and link their accounts to Google for personalized offers.

Google previously charged $10 a month or $95 per year for Express, but recently dropped its membership fee for the service as it struggled to keep pace with Amazon’s growth. Almost two out of three U.S. internet users shopped on Amazon in the second quarter, according to Wells Fargo analysts.

►  Amazon is making it easier for teens to use their parents’ credit cards, already the most popular online retailer among adults, is setting its sights on a new demographic: teenagers.

The company’s newest efforts are aimed at getting shoppers ages 13 to 17 to purchase items on its site – with approval from their parents. Teens can now log into and the company’s app using their own accounts to make purchases and stream videos. Their parents, meanwhile, can approve their purchases by text message or set spending limits per order. (Jeffrey Bezos, the founder and chief executive of Amazon, also owns The Washington Post.)

“As a parent of a teen, I know how they crave independence, but at the same time that has to be balanced with the convenience and trust that parents need,“ Michael Carr, vice president of Amazon Households, said in a statement. “We’ve listened to families and have built a great experience for both teens and parents.“

Analysts say the teenage market could be particularly lucrative for Amazon, as mall staples such as Aeropostale, Wet Seal and rue21 file for bankruptcy protection and shutter hundreds of stores. Many other retailers, such as Claire’s and Abercrombie & Fitch, are also struggling.

“Teenagers are at least as comfortable buying things online as their parents are, so it makes sense to go after them directly,“ said Jan Dawson, chief analyst at technology research and advisory firm Jackdaw. “This is a move that will get families deeper into Amazon, while also cultivating future Prime members.“

The company also said this week that it will begin offering Prime memberships to college students for $5.49 per month. (An annual Amazon Prime Student membership costs $49, compared with $99 for regular members.)

The announcements come as Amazon gains popularity among younger shoppers. Nearly half – 49 percent – of teenagers listed Amazon as their favorite website, a 9 percent increase from a year earlier, according to a survey by financial firm Piper Jaffray. Among other teen favorites: Nike, with 6 percent of the vote, and American Eagle, with 5 percent.

Under Amazon’s new program, teenagers can log into the site using their own credentials. They can shop online, stream videos and tap into the perks of their parents’ Prime memberships. Amazon notifies parents – either by text message or email – of any purchases. Parents can review each item, its cost and the payment method being used before finalizing the transaction.

“By default, parents approve every order,“ Amazon said. “Parents receive itemized notifications for every order and can cancel and return any item in accordance with Amazon’s policies.“

Amazon – which had annual revenue of $136 billion last year – accounts for roughly one-third of all online U.S. sales.

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►  Equifax says it’s looking into another possible hack

Equifax has taken one of its web pages offline following a report that an independent security researcher encountered malicious links during multiple visits to the company’s website.

“We are aware of the situation identified on the website in the credit report assistance link,“ Equifax spokesman Wyatt Jefferies said in a statement. “Our IT and Security teams are looking into this matter, and out of an abundance of caution have temporarily taken this page offline. When it becomes available or we have more information to share, we will.“

On Thursday, Ars Technica reported that security analyst Randy Abrams was prompted to download fraudulent Adobe Flash updates when he visited the Equifax website to contest his credit report. Abrams determined that when those updates were clicked, adware would infect a visitor’s computer. Abrams also encountered those links during at least three subsequent visits, according to Ars Technica.

The web page in question currently displays an error message that tells visitors “the website is currently down for maintenance.“ Previously, people could access the page under the “Credit Report Assistance” heading.

The possibility of another malicious hack at Equifax comes just a week after the company’s former chief executive, Richard Smith, was grilled by angry lawmakers over a massive data breach that may have compromised the sensitive information of as many as 145 million people. Equifax first disclosed that breach in September. But lawmakers and several federal agencies, including the FBI and the Federal Trade Commission, are investigating the company’s response to the breach, why it took Equifax more than a month to notify the public and whether executives engaged in insider trading.

Equifax and the Internal Revenue Service also are facing pressure from lawmakers over a $7.2 million contract that Equifax was awarded, after the breach was made public, for the company to verify taxpayer identities and help prevent fraud.

►  Real average hourly earnings decrease 0.1% in September

Real average hourly earnings decreased 0.1 percent in September, seasonally adjusted.

Average hourly earnings increased 0.5 percent, and CPI-U increased 0.5 percent. Real average weekly earnings decreased 0.1 percent over the month.

►  CPI for all items increases 0.5% in September as gasoline index rises sharply

In September, the Consumer Price Index for All Urban Consumers increased 0.5 percent seasonally adjusted; rising 2.2 percent over the last 12 months, not seasonally adjusted.

The index for all items less food and energy rose 0.1 percent in September (SA); up 1.7 percent over the year (NSA).

U.S. Market Weekly Summary – Week Ending 10.13.2017

S&P 500 Posts 0.2% Weekly Rise as Real Estate, Staples, Utilities Lead Gainers But Telecom, Financials Weigh
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The Standard & Poor’s 500 index edged up 0.2% this week as gains across a number of sectors led by real estate, consumer staples and utilities managed to slightly outweigh declines led by telecommunications and financial stocks.

The market benchmark ended the week at 2553.17, up from last week’s closing level of 2,549.33. Despite the weekly gain being so slight, the S&P 500 also reached a new record high Friday at 2,557.65.

On the upside, the real-estate sector rose 1.8% this week, the largest percentage gain among the sectors. Its advancers included Host Hotels & Resorts (HST), which added 6.5% as Deutsche Bank upgraded its investment rating on the hotel owner’s stock to buy from hold. The upgrade comes ahead of the real-estate investment trust’s Q3 report, set for release Nov. 1.

The consumer-staples sector, which rose 1.5% this week, reflected the market’s more defensive positioning amid some trepidation ahead of Q3 reports. Consumer staples are considered defensive because they are seen as necessary regardless of how the economy performs.

The sector’s gainers included Kroger (KR), whose shares rose 3.2% this week as the supermarket operator unveiled a plan for creating shareholder value and reaffirmed its 2017 guidance. The plan includes the investment of an incremental $500 million in human capital over the next three years as well as redesigning the front end to maximize stores for self-checkout, including the expansion of its currently 20-store Scan, Bag, Go pilot to 400 stores in 2018.

The utilities sector, which rose 1.3% this week, also benefited from investors’ defensive as they tread cautiously ahead of companies’ Q3 financial reports. Utilities are typically considered defensive because they provide services that are seen as necessary regardless of how the economy is doing. Among those due to report by the end of the month, Edison International’s (EIX) shares edged up 0.5% this week.

On the downside, the telecommunications sector shed 4.6% this week. AT&T (T) shares fell 7.5% as the company warned investors that damage and related impacts from recent hurricanes and earthquakes will reduce its reported Q3 consolidated revenue by nearly $90 million. The company also said it expects a hit of about $210 million, or $0.02 per diluted share, to its reported pretax earnings, and warned it anticipates “further reductions in the fourth quarter as we continue to assess damage to our network and fully restore service.“

The financial sector declined 0.9% this week as some of the reports from big banks that began this week included some disappointments. The Q3 results released from JPMorgan Chase (JPM) included a decline in revenue from fixed income market activity while Wells Fargo (WFC) posted weaker-than-expected revenue. Shares of JPMorgan were down 1.1% on the week while Wells Fargo’s shares dropped 3.4%.

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►  Trump to issue stop-payment order on health care subsidies

In a brash move likely to roil insurance markets, Donald Trump will “immediately” halt payments to insurers under the Obama-era health care law he has been trying to unravel for months.

Before sunrise Friday morning, Trump went on Twitter to urge Democrats to make a deal: “The Democrats ObamaCare is imploding,” he wrote. “Massive subsidy payments to their pet insurance companies has stopped. Dems should call me to fix!”

The Department of Health and Human Services had made the announcement in a statement late Thursday. “We will discontinue these payments immediately,” said acting HHS Secretary Eric Hargan and Medicare administrator Seema Verma. Sign-up season for subsidized private insurance starts November 1, in less than three weeks, with about 9 million people currently covered.

In a separate statement, the White House said the government cannot legally continue to pay the so-called cost-sharing subsidies because they lack a formal authorization by Congress. Officials said a legal opinion from the Justice Department supports that conclusion.

However, the administration had been making the payments from month to month, even as Trump threatened to cut them off to force Democrats to negotiate over health care. The subsidies help lower copays and deductibles for people with modest incomes.

Halting the payments would trigger a spike in premiums for next year, unless Trump reverses course or Congress authorizes the money. The next payments are due around October 20.

The top two Democrats in Congress sharply denounced the Trump plan in a joint statement.

“It is a spiteful act of vast, pointless sabotage leveled at working families and the middle class in every corner of America,” said House and Senate Democratic leaders Nancy Pelosi of California and Chuck Schumer of New York. “Make no mistake about it, Trump will try to blame the Affordable Care Act, but this will fall on his back and he will pay the price for it.”

In a subsequent tweet, Trump asserted, “Obamacare is a broken mess. Piece by piece we will now begin the process of giving America the great HealthCare it deserves.”

The president’s action is likely to trigger a lawsuit from state attorneys general, who contend the subsidies to insurers are fully authorized by federal law, and say the president’s position is reckless.

“We are prepared to sue,” said California Attorney General Xavier Becerra. “We’ve taken the Trump Administration to court before and won.”

Word of Trump’s plan came on a day when the president had also signed an executive order directing government agencies to design insurance plans that would offer lower premiums outside the requirements of President Barack Obama’s Affordable Care Act.

Frustrated over setbacks in Congress, Trump is wielding his executive powers to bring the “repeal and replace” debate to a head. He appears to be following through on his vow to punish Democrats and insurers after the failure of GOP health care legislation.

On Twitter, Trump has termed the payments to insurers a “bailout,” but it’s unclear if the president will get Democrats to negotiate by stopping payment.

Experts have warned that cutting off the money would lead to a double-digit spike in premiums, on top of increases insurers already planned for next year. That would deliver another blow to markets around the country already fragile from insurers exiting and costs rising. Insurers, hospitals, doctors’ groups, state officials and the U.S. Chamber of Commerce have urged the administration to keep paying.

Leading GOP lawmakers have also called for continuing the payments to insurers, at least temporarily, so constituents maintain access to health insurance. Senate Health, Education, Labor and Pensions Committee Chairman Lamar Alexander, R-Tenn., is working on such legislation with Democratic Senator Patty Murray of Washington.

The so-called “cost-sharing” subsidies defray copays and deductibles for people with low-to-modest incomes, and can reduce a deductible of $3,500 to a few hundred dollars. Assistance is available to consumers buying individual policies; people with employer coverage are unaffected by the dispute.

Nearly 3 in 5 customers qualify for help, an estimated 6 million people or more. The annual cost to the government is currently about $7 billion.

But the subsidies have been under a legal cloud because of a dispute over whether the Obama health care law properly approved them. Adding to the confusion, other parts of the Affordable Care Act clearly direct the government to reimburse the carriers.

For example, the ACA requires insurers to help low-income consumers with their copays and deductibles.

And the law also specifies that the government shall reimburse insurers for the cost-sharing assistance that they provide.

But there’s disagreement over whether the law properly provided a congressional “appropriation,” similar to an instruction to pay. The Constitution says the government shall not spend money unless Congress appropriates it.

House Republicans trying to thwart the ACA sued the Obama administration in federal court in Washington, arguing that the law lacked specific language appropriating the cost-sharing subsidies.

A district court judge agreed with House Republicans, and the case has been on hold before the U.S. appeals court in Washington. Up to this point the Trump administration continued making the monthly payments, as the Obama administration had done.

While the legal issue seems arcane, the impact on consumers would be real.

The Congressional Budget Office estimated that premiums for a standard “silver” plan will increase by about 20 percent without the subsidies. Insurers can recover the cost-sharing money by raising premiums, since those are also subsidized by the ACA, and there’s no legal question about their appropriation.

Consumers who receive tax credits under the ACA to pay their premiums would be shielded from those premium increases.

But millions of others buy individual health care policies without any financial assistance from the government and could face prohibitive increases. Taxpayers would end up spending more to subsidize premiums.

►  Social Security benefits to rise by 2 percent in 2018

Millions of Social Security recipients and other retirees will get a 2 percent increase in benefits next year. It’s the largest increase since 2012 but comes to only $25 a month for the average beneficiary.

The Social Security Administration announced the cost—of-living increase Friday.

The COLA affects benefits for more than 70 million U.S. residents, including Social Security recipients, disabled veterans and federal retirees. That’s about one in five Americans.

By law, the COLA is based on a broad measure of consumer prices generated by the Bureau of Labor Statistics. Advocates for seniors claim the inflation index doesn’t accurately capture rising prices faced by seniors, especially for health care.

“It’s squeezing them. It’s causing them to dip into savings more quickly,” said Mary Johnson of The Senior Citizens League. “The lifetime income that they were counting on just isn’t there.”

Some conservatives argue that the inflation index is too generous because when prices go up, people change their buying habits and buy cheaper alternatives.

Consumer prices went up only slightly in the past year despite a recent spike in gasoline prices after a series of hurricanes slowed oil production in the Gulf Coast, said Max Gulker, senior research fellow at the American Institute for Economic Research.

“For the most part, there was a decline in energy prices for a lot of the year,” Gulker said. “But at the end of the year we saw that uptick in gas from the hurricanes.”

The average monthly Social Security payment is $1,258, or about $15,000 a year.

Congress enacted automatic annual increases for Social Security in 1975. Presidents often get blamed when increases are small or zero. But Donald Trump has no power to boost the increase, unless he persuades Congress to change the law.

In 2009, President Barack Obama persuaded Congress to approve one-time payments of $250 to Social Security recipients as part an economic stimulus package.

Over the past eight years, the annual COLA has averaged just above 1 percent. In the previous decade, it averaged 3 percent.

Johnson noted that multiple years of small or no COLA’s reduces the income of retirees for the rest of their lives.

“Think about the length of a retirement period. Eight years is about a third of a (healthy) retirement,” Johnson said.

The COLA is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, a broad measure of consumer prices. It measures price changes for food, housing, clothing, transportation, energy, medical care, recreation and education.

The August report says energy prices are up 6.5 percent from the previous year, while the cost of medical care is up just 1.7 percent. The cost of food is up 1.1 percent.

The COLA is calculated using the average CPI-W for July, August and September, and comparing it to the same three months from the previous year.

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