U.S. judge rules seized Trump lawyer documents to be independently reviewed

By Brendan Pierson and Doina Chiacu

NEW YORK/WASHINGTON (Reuters) – A federal judge ruled on Thursday that a court-appointed independent official should be the first to examine documents seized by FBI agents from U.S. President Donald Trump’s personal lawyer, Michael Cohen.

The agents raided Cohen’s office and home on April 9, an action that infuriated the president. Prosecutors said in a court filing several days later that they have been investigating the lawyer for months, largely over his business dealings rather than his legal work.

The seizure of the documents has led to a legal spat as to who should be allowed to review them.

Lawyers for Cohen and Trump wanted to seek to limit prosecutors’ ability to review the documents, citing attorney-client privilege.

But prosecutors initially said the documents should be reviewed by a “taint team” of lawyers within their own office, who would be walled off from the main prosecution team. Cohen filed a legal action to block them from reviewing the documents, arguing that his lawyers should get a first look. Both sides also said they would be open to an independent ‘special master’ getting a first look.

In the end, the judge opted for the ‘special master.’

“The letters I received from counsel for Mr Cohen and the intervenors has convinced me that this process can go quickly with the special master, assuming everyone works as hard as you have represented you will work,” said U.S. District Judge Kimba Wood.

(Reporting by Brendan Pierson and Johnathan Stempel in New York and Doina Chiacu in Washington; Writing by Doina Chiacu and Rosalba O’Brien; Editing by Tom Brown, Frances Kerry and Susan Thomas)

Trump to visit Britain, hold talks with UK’s May July 13

WASHINGTON (Reuters) – U.S. President Donald Trump will travel to Britain in July for a working visit with Prime Minister Theresa May, after months of back-and-forth over when the U.S. president would visit what traditionally has been the United States’ closest ally.

Representatives for the White House and 10 Downing Street said Trump would visit the United Kingdom on July 13 and hold bilateral talks with May but gave no other details.

It was also not immediately clear how long Trump would stay on his visit, which would come more than a year after taking office.

The delay has raised questions about the U.S.-UK relationship, and the working visit signals a more low-key affair than an official state visit.

Trump had planned a trip to London to open a new U.S. embassy there but canceled in January.

Many Britons have vowed to stage protests if Trump visits.

(Reporting by Roberta Rampton in Washington and Paul Sandle in London; writing by Susan Heavey; editing by Jonathan Oatis)

Mattis expects ‘re-energized’ effort against Islamic State in Syria

WASHINGTON (Reuters) – U.S. Defense Secretary Jim Mattis said on Thursday that he expected a “re-energized” effort against Islamic State militants in eastern Syria in the coming days.

“You’ll see a re-energized effort against the middle Euphrates River Valley in the days ahead and against the rest of the geographic caliphate,” Mattis told a Senate Armed Services Committee hearing, referring to territory held by the group.

U.S. airstrikes, troops and U.S.-backed Syrian militias have dealt heavy blows to Islamic State in Syria but the group still holds some areas and is widely expected to revert to guerrilla tactics if the last remnants of its once self-styled “caliphate” are captured.

U.S. officials have said that in recent days they have seen fighters from the U.S.-backed Syrian Democratic Forces (SDF), an alliance of militias in northern and eastern Syria dominated by the Kurdish YPG, returning to the middle Euphrates River Valley to fight against Islamic State.

A Turkish offensive in Afrin against the Kurdish YPG militia, which Ankara regards as an extension of a Kurdish insurgency at home, led to an “operational pause” in the fight against Islamic State in eastern Syria in March.

Mattis added that he was also expecting increased operations against Islamic State militants on the Iraqi side of the border and France had reinforced the fight against the militant group in Syria with special forces in the past two weeks.

U.S. President Donald Trump on Tuesday said he wants to withdraw American troops from Syria “relatively soon” but not before their mission is completed, adding that negotiations over the crisis there should be part of a larger deal regarding Iran.

(Reporting by Idrees Ali and Phil Stewart; Editing by Alistair Bell)

New York Times names company veteran Roland Caputo as CFO

(Reuters) – The New York Times Co <NYT.N> on Thursday named Roland Caputo as its next chief financial officer, tapping a company veteran to succeed James Follo whose retirement was announced in October.

Caputo, who has had a 32-year career at the Times, has been serving as interim finance chief since March.

Caputo, 57, has also served as the executive vice president of the newspaper publisher’s print products and services group. [nBw4zGD50a]

(Reporting by Laharee Chatterjee in Bengaluru; Editing by Sai Sachin Ravikumar)

New CEO declares Volkswagen on right path despite profit hit

By Andreas Cremer

BERLIN (Reuters) – Volkswagen’s <VOWG_p.DE> first-quarter operating profit fell on Thursday, but optimism over its new chief executive, the carmaker’s financial health and lower provisions for the diesel emissions scandal lifted its shares.

Two weeks after elevating brand chief Herbert Diess to group CEO as part of the biggest management shake-up in more than a decade, Europe’s biggest carmaker is shifting the focus to making its operating business more efficient.

“The Volkswagen group is in a robust economic position. The quarterly results confirm that we are on the right path,” Diess said after VW posted group earnings before interest and taxes of 4.21 billion euros ($5.1 billion), a fall of 3.6 percent.

This was below the 4.47 billion euro consensus forecast in a Reuters poll of banks and brokerages.

VW said negative effects of 300 million euros from switching to the IFRS accounting standard contributed to the profit drop, adding that underlying earnings slightly exceeded last year’s 4.37 billion if the changes were excluded.

The group said it set aside no more significant funds between January and March to cover fines, compensation and vehicle refits related to its 2015 emissions scandal, after it raised provisions by another 600 million euros in the fourth quarter to a total of 25.8 billion euros.

“The market is hoping for Diess to push further profitability gains and is taking joy from the fact that Dieselgate risks are abating,” said NordLB analyst Frank Schwope who has a “Buy” recommendation on the stock, in reference to the diesel emissions test cheating scandal which has cost VW about $30 billion in fines and other costs.

Net cash flow, a benchmark for financial health and a buffer against future challenges, increased to 2.4 billion euros from minus 2.6 billion a year earlier, VW said, even excluding 800 million euros in cost outflows for the “Dieselgate” scandal.

“We believe the market needs to wake up to the underlying cash strength of this company,” Evercore ISI analyst Arndt Ellinghorst said.

The scandal has prompted major changes at the German group, which is reorganizing its multiple car brands and carving out truck operations while shouldering billions of investments in battery-powered and self-driving vehicles.

But investors have urged more progress in cutting R&D and material costs as VW keeps grappling with high complexity in products and parts although it has pledged to scale back model variants, platforms and drivetrains.

Quarterly profitability at VW’s core namesake brand slid to 4.4 percent from 4.6 percent a year ago on advance costs for its electric-car offensive and eased to 8.5 percent from 8.7 percent at luxury division Audi <NSUG.DE> amid spending to launch over 20 redesigned and new models this year.

Czech division Skoda, the biggest intra-group beneficiary from VW’s modular production platforms, kept its return on sales at 9.6 percent, only lagging sports car brand Porsche where investment in electric-car assembly brought down the operating margin to 17.3 percent from 18.5 percent.

VW shares were up 2.1 percent to 170.50 euros at 0957 GMT, outperforming Germany’s benchmark DAX <.GDAXI> index.

Despite the quarterly profit drop and second-half risks expected from introducing so-called WLTP lab tests related to car emissions and fuel consumption, VW stuck to its full-year guidance published in February, predicting a return on sales of between 6.5 and 7.5 percent before special items, compared with 7.4 percent in 2017.

Revenue is expected to exceed the 2017 record of 231 billion euros by as much as 5 percent while group deliveries may moderately exceed last year’s 10.7 million vehicles, VW said.

($1 = 0.8207 euros)

(Reporting by Andreas Cremer; Editing by Maria Sheahan, Alexander Smith and Adrian Croft)

Wall Street rises as tech earnings impress, yields pull back

By Sruthi Shankar

(Reuters) – Wall Street stocks rose on Thursday, as strong earnings from Facebook and a handful of chipmakers powered technology stocks, and U.S. bond yields pulled back.

The tech-laden Nasdaq Composite index opened more than 1 percent higher, on track to break its five-day losing streak, its longest since November 2016. The S&P technology index rose 1.4 percent, the biggest gainer among the 11 major S&P sectors.

Facebook jumped 7.6 percent after strong results calmed nerves on fallout from the Cambridge Analytica privacy scandal.

Visa’s 3.1 percent jump, following the payments network’s better-than-expected profit and earnings forecast raise, provided the biggest boost to the Dow Jones Industrial Average index.

Advanced Micro Devices and Qualcomm were up 11.5 percent and 2.1 percent after the chipmakers posted quarterly results that beat Wall Street estimates, easing concerns about weak demand for smartphones after some Asian peers warned of slower growth.

The gains pushed the Philadelphia Semiconductor index up by more than 1 percent.

“We are right in the thick of earnings season and some of them have been a bit of a surprise,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.

Despite strong results from most U.S. firms that have reported so far, investors have been reacting to signs that rising inflation could take a toll on corporate profits.

The 10-year U.S. Treasury yield, the benchmark for global borrowing costs, crossed the 3 percent level on Tuesday for the first time in four years, on an increase in federal borrowing, inflation concerns and bets on further rate increases by the Federal Reserve.

However, the 10-year yield pulled back slightly to trade at 2.9847 percent. [US/]

“A slight pullback in yields is likely to give investors a chance to focus on corporate results,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

At 9:54 a.m. ET, the Dow Jones Industrial Average was up 84.36 points, or 0.35 percent, at 24,168.19, the S&P 500 was up 11.18 points, or 0.42 percent, at 2,650.58 and the Nasdaq Composite was up 60.25 points, or 0.86 percent, at 7,063.98.

Of the 154 S&P 500 companies that reported first-quarter earnings as of Wednesday, 81.2 percent topped profit estimates. Analysts now expect earnings growth of 22 percent, according to Thomson Reuters data.

Industrial stocks took a hit after Union Pacific’s 3.6 decline as the No. 1 U.S. railroad warned on a key operating metric.

General Motors also fell about 2.4 percent after it reported a lower quarterly profit.

AT&T was down 4.9 percent after the No. 2 U.S. wireless carrier reported a lower-than-expected profit as the company lost subscribers from its pay TV business.

Advancing issues outnumbered decliners by a 1.46-to-1 ratio on the NYSE and by a 1.48-to-1 ratio on the Nasdaq.

The S&P index recorded seven new 52-week highs and seven new lows, while the Nasdaq recorded 30 new highs and 24 new lows.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta)

Oil rises as concern heats up over Iran sanctions, Venezuelan output

By Amanda Cooper

LONDON (Reuters) – Oil rose on Thursday, supported by expectations of renewed U.S. sanctions on Iran, declining output in Venezuela and continuing strong demand.

Brent crude oil futures <LCOc1> were up 59 cents at $74.59 a barrel at 1354 GMT, having touched a session high of $74.97, while U.S. West Texas Intermediate (WTI) crude futures rose 23 cents to $68.28 a barrel.

The oil price has risen by 15 percent in the last four weeks thanks to expectations that the United States will reimpose sanctions on Iran, a major oil producer and member of the Organization of the Petroleum Exporting Countries (OPEC).

French President Emmanuel Macron said on Wednesday he expected U.S. President Donald Trump to pull out of a deal with Iran reached in 2015 in which the Islamic Republic suspended its nuclear program in return for Western powers lifting crippling sanctions.

Trump will decide by May 12 whether to restore U.S. sanctions on Tehran, which would probably result in a reduction of Iranian oil exports.

“Geopolitical concerns in the Middle East, together with Venezuela’s deteriorating macroeconomic situation, are supporting oil prices. It is widely anticipated that President Trump will pull the U.S. out of the Iran nuclear deal, which is bullish for prices”, said Abhishek Kumar, senior energy analyst at Interfax Energy’s Global Gas Analytics.

“However, (the) full impact of the move will not materialize unless it is supported by European allies of the U.S.”

Venezuela’s crude production <PRODN-VE> has fallen from almost 2.5 million barrels per day (bpd) in early 2016 to around 1.5 million bpd due to a political and economic crisis.

Plunging Venezuelan output and looming U.S. sanctions against Iran come against a backdrop of strong demand, above all in Asia, the world’s biggest oil-consuming region.

However, not all market indicators point toward tighter supplies.

U.S. crude oil inventories <C-STK-T-EIA> rose by 2.2 million barrels in the week to April 20 to 429.74 million barrels.

U.S. crude production <C-OUT-T-EIA> rose by 46,000 bpd on the previous week, to 10.59 bpd.

Soaring U.S. output has made WTI crude around $6 per barrel cheaper than Brent and drawn exports to record highs.

Dutch bank ING said “the wide discount for WTI to Brent saw exports rising 582,000 bpd week-on-week to a record high of 2.33 million bpd.”

With U.S. output and exports surging, some analysts warn that the 20 percent climb in Brent prices since February is starting to look overdone.

“The market does look a little toppish,” said Greg McKenna, chief market strategist at futures brokerage AxiTrader.

(Additional reporting by Henning Gloystein in Singapore; Editing by Mark Heinrich and Jon Boyle)

EU strikes deal forcing Netflix, Amazon to fund European content

BRUSSELS (Reuters) – EU lawmakers and member states on Thursday struck a deal that will allow countries to force online streaming services including Netflix and Amazon’s video service to help fund the production of European films and TV shows.

The new rules are part of an overhaul of the European Union’s broadcasting rules and include a quota of 30 percent for European works on video-on-demand platforms, the European Parliament said.

Video-sharing platforms like Google’s YouTube and Facebook will also have to take measures against content “inciting violence, hatred and terrorism.”

Proxy firm Glass Lewis opposes Tesla’s massive stock award to Musk

(Reuters) – Influential proxy advisory firm Glass Lewis said Tesla Inc <TSLA.O> shareholders should vote against a proposal to grant Chief Executive Officer Elon Musk performance-based stock options worth about $2.62 billion.

If Musk earned the full grant, he would own 28.3 percent of the company, although Tesla’s proxy statement showed that his ownership was expected to be lesser, Glass Lewis said in a report dated Feb. 28.

“The cost of the grant is staggering relative to executive compensation levels among public companies worldwide,” Glass Lewis said. The grant would dilute other investors and prove too costly, it added.

The proxy firm values the award at about $3.7 billion, based on a different valuation model it used.

The award is seen as an effort by Tesla to reassure investors that Musk will continue to helm the electric car maker in the long term and that his interests will align with those of Tesla stockholders, Glass Lewis said.

Some analysts have questioned whether Musk’s other interests, from space exploration to tunnel boring technology, are a distraction at what is seen as a critical time for Tesla.

Musk has touted 2018 as an important year in the Silicon Valley company’s history, highlighting plans to ramp up production of its Model 3 sedan that has faced numerous production delays over the past year.

Tesla declined to comment on the Glass Lewis report.

(Reporting by Tamara Mathias in Bengaluru; Editing by Sai Sachin Ravikumar)

China boosts defense spending, rattling its neighbors’ nerves

By Christian Shepherd and Michael Martina

BEIJING (Reuters) – China on Monday unveiled its largest defense spending increase in three years, setting an 8.1 percent growth target this year, fuelling an ambitious military modernization program and making its neighbors nervous.

The 2018 defense budget will be 1.11 trillion yuan ($175 billion), according to a report issued at the opening of China’s annual meeting of parliament.

The defense spending figure is closely watched worldwide for clues to China’s strategic intentions as it develops new military capabilities, including stealth fighters, aircraft carriers and anti-satellite missiles.

China will “advance all aspects of military training and war preparedness, and firmly and resolvedly safeguard national sovereignty, security, and development interests,” Premier Li Keqiang told the opening session in an address.

“Faced with profound changes in the national security environment” the absolute leadership of the military by the ruling Communist Party must be observed, and the unity between the government and the military, and the people and the military, must always be “strong as stone,” he said.

Li also said China had basically completed efforts to cut back its armed forces by 300,000, a move President Xi Jinping announced in 2015 to improve efficiency that had caused unease in the ranks.

The U.S. Defense Department did not immediately respond to a request for comment on the increased spending by its main strategic rival in Asia.

However, a State Department official said on condition of anonymity that “we continue to carefully monitor China’s military developments and to encourage China to exhibit greater transparency with respect to its capabilities and intentions.”

“We encourage China to use its military capabilities in a manner conducive to the maintenance of peace and stability in the Indo-Pacific region,” the official added.

U.S. President Donald Trump has proposed the largest military budget since 2011, focused on beefing up the United States’ nuclear defenses and countering the growing strength of China and Russia.

The proposal would provide the Pentagon with $617 billion and an additional $69 billion to fund ongoing wars in fiscal 2019. That is $74 billion more than in the previous fiscal year.

China’s military build-up has unnerved its neighbors, particularly because of its increasing assertiveness in territorial disputes in the East and South China Seas and over Taiwan, a self-ruled territory Beijing claims as its own.

“We would like to see China be more transparent about its defense policy, including spending and the direction of its military power,” Japan’s Chief Cabinet Secretary, Yoshihide Suga, told a regular briefing.

Taiwan’s China policy-making Mainland Affairs Council said China’s moves to raise defense spending and military drills have increased tension.

“China should take international concerns seriously, increase its defense budget’s transparency and give up its targeted military deployment towards Taiwan in order to avoid an escalation of regional tension,” it said.

The 2018 defense spending increase comes as China’s economy expanded 6.9 percent last year, the first annual growth pick-up since 2010. But China kept its 2018 economic growth target at around 6.5 percent, said Li, the same as in 2017, despite exceeding that year’s target.

Last year, defense spending was set to increase just 7 percent, to 1.044 trillion yuan ($164.60 billion), or about one-quarter of the proposed U.S. defense spending for the year. In 2016, it grew 7.6 percent.

“The pace and scale of this build-up are really dramatic. It is extremely alarming for Australia and many other countries in the region,” said Sam Roggeveen, a visiting fellow at the Strategic and Defense Studies Center of the Australian National University in Canberra.

“There is every indication that China wants to expand what it will call defense capabilities in the South China Sea. I expect eventually we will see warships and aircraft there regularly, if not based there permanently. What is unclear, however, is whether the United States will want to rise to that challenge.”

HIDDEN SPENDING

China does not provide a breakdown of its defense budget, leading neighbors and other military powers to complain that Beijing’s lack of transparency has added to regional tension.

Diplomats say China’s defense numbers probably underestimate true military spending for the People’s Liberation Army, the world’s largest armed forces, which are in the midst of an impressive modernization program overseen by Xi.

One senior Asia diplomat said before the announcement that the real rise would probably be at least double what China revealed, considering its efforts to build up the industrial military complex and deepen military-civilian integration.

“Some spending will be hidden in civilian spending,” said the diplomat, speaking on condition of anonymity.

With worries about potential disputes with the United States in the region, China’s military had mounted what defense sources and diplomats viewed as a lobbying campaign for more spending.

In an article on its website, China’s Defense Ministry cited Chen Zhou, a researcher at the Academy of Military Science, as saying the spending increase was “reasonable” and “sustainable” and that there were no “hidden military funds.”

Chinese Vice Foreign Minister Zhang Yesui said on Sunday that China’s “moderate” defense spending rises in the past few years were less than for other major countries and would not threaten anyone.

(Reporting by Christian Shepherd, Michael Martina, and Ben Blanchard; Additional reporting by Colin Packham in SYDNEY, Kaneko Kaori in TOKYO, Yimou Lee in TAIPEI and David Brunnstrom and Idrees Ali in WASHINGTON; Editing by Kim Coghill, Nick Macfie and Richard Chang)