EU toughens Brexit stance
On Monday, diplomats in Brussels began a week of talks among the European Union’s members about the United Kingdom’s plan to exit to the trade bloc. EU government officials toughened their position on Brexit, as they added demands on citizens’ residency rights in the U.K. and limits on financial services, Bloomberg reported, citing a document obtained by the wire service. In that document, financial services were separated from the trade deal, ensuring “any future framework should safeguard financial stability in the Union and respect its regulatory and supervisory standards regime and application.” The wording is a blow to U.K. Prime Minister Theresa May’s pledge for a trade deal with the EU that would include financial services, yet allow Britain to operate outside the oversight of EU laws.
Trump tempers NAFTA talk
After calling The North American Free Trade Agreement “the worst trade deal in the history of the world,” President Donald Trump said on Wednesday he will seek better terms for the U.S., rather than ending the trade deal completely. During the campaign, and up until the announcement on Wednesday, Trump had said he was ready to pull out of NAFTA. Bloomberg reported the president decided to hold off on a final decision after calls from the leaders of Canada and Mexico. The move marks “a continued softening” of Trump’s trade rhetoric, after he also said recently he would not declare China a currency manipulator—another campaign accusation, according to Bloomberg.
Profs earn a “C” in activist investing
The May 2017 edition of The Atlantic took a look at what happens behind the scenes when activist shareholders target a public company. Two professors used their retirement savings to purchase more than 18,000 shares of Tejon Ranch, a public real estate company that owns a 270,000-acre parcel of land in California. The professors, who write about shareholder activism, sought to mimic large activist investors such as Bill Ackman and Carl Icahn, who push to improve transparency and performance of much larger public companies, often shaking up the board. While the professors made a little money, (which they attribute to luck, rather than their activism) they concluded small public companies such as Tejon Ranch are unlikely to be targeted by big activist funds—to the detriment of shareholders and the economy as a whole.
Administration reveals tax plan
On Wednesday, the Trump administration revealed the outline of a massive tax reform that would drastically lower corporate and personal tax rates at the federal level. While White House officials have said higher economic growth will prevent the tax cuts from swelling the federal deficit, economists and budget analysts have warned the plan could increase federal debt by $7 trillion over a decade, The New York Times reported. One nonpartisan group, the Committee for a Responsible Federal Budget, warned that the economy would need to grow at a rate of 4.5 percent—more than double its projected rate—to make the plan debt neutral.
United vows to fly right
More than two weeks after a viral video showed a Chicago police officer violently dragging a passenger off a United Airlines flight, the airline on Thursday provided a detailed account of the incident and its plan to prevent future crises. The airline unveiled new limits on when passengers can be removed and new financial limits: up to $10,000 in travel vouchers for those who volunteer to give up their seats, The New York Times reported. United has pledged to change its booking and boarding procedures this year, including promising that it will not use law enforcement officers to remove passengers unless there is a valid safety or security issue. The viral video has damaged the company’s chief executive, Oscar Munoz, who will no longer become chairman of the company.
Albertsons flirts with Whole Foods
Boise-based Albertson may be weighing whether to make a bid for Whole Foods Market, USA Today reported, citing a published report. Cerberus Capital Management, which controls Albertsons, Safeway, Shaw’s and Jewel-Osco, is reportedly talking with Whole Foods about buying the company. Both companies declined to comment for the story. Cerberus also has been reportedly considering purchasing Sprouts Farmers Market, which, like Whole Foods, offers organic foods, but at lower prices. Whole Foods has more than 465 stores throughout the U.S., Canada and the U.K.