Wall Street Articles

Author: skywalker   |   Latest post: Wed, 29 Mar 2017, 07:28 AM


Wall Street Breakfast: U.K. Pulls Article 50 Trigger

Author: skywalker   |  Publish date: Wed, 29 Mar 2017, 07:28 AM

Unraveling four-decade-old ties, Theresa May will invoke Article 50 of the Lisbon Treaty at around 7:30 a.m. ET with a hand-delivered letter to EU President Donald Tusk. That will set the stage for two years of landmark negotiations, including trade, immigration and the future of Britain's $2.6T economy. While the Brexit decision last summer came as a surprise and rocked markets, stocks quickly recovered and have since notched record highs.


Scottish lawmakers have voted 69-59 to seek a new referendum on independence within the next two years, presenting the British government with an unwelcome distraction as it pushes the EU exit button. "The mandate for a referendum is beyond question, and it would be democratically indefensible - and utterly unsustainable - to attempt to stand in the way of it," declared First Minister Nicola Sturgeon.

Companies looking to build President Trump's border wall will now have until April 4 to submit offers after the DHS extended today's deadline. Almost 700 businesses have already placed bids, including U.S. Concrete (NASDAQ:USCR), KBR, Martin Marietta (NYSE:MLM) and Fluor (NYSE:FLR). The wall must be at least 18 feet high, can't be climbed, prevents digging below it for at least six feet and has a U.S.-facing side that is "aesthetically pleasing."

Fraternal Order of Police leaders have warned President Trump that he could endanger public safety if he follows through with cuts in federal grants to "sanctuary cities." On Monday, U.S. Attorney General Jeff Sessions said the Justice Department would restrict grants to jurisdictions that do not cooperate with federal immigration authorities.

New commercial satellite imagery suggests that North Korea is preparing to test its sixth nuclear device, as U.S. and Chinese leaders plan to meet next month on how to contain Pyongyang's weapons program. Secretary of State Rex Tillerson recently ruled out direct talks with North Korea for now, and suggested that tighter sanctions could be implemented.


The Samsung Galaxy S8 is set to be unveiled in New York, with a press conference starting at 11 a.m. ET. What we know from leaks: There are two sizes (5.8 and 6.2 inch screens), no home button and a virtual assistant named Bixby. Samsung (OTC:SSNLF) has to pretty much hit a home run with the device after its fiasco with the exploding Note 7.

Following last week's vote in the Senate, the U.S. House has voted 215-205 to repeal Obama-era regulations governing consumer privacy protection at Internet service providers. If passed into law, the repeal will again allow ISPs to sell consumer information including browsing history without customer consent. Related tickers: T, VZ, CMCSA, CHTR, OTCPK:ATCEY, FTR, CTL, WIN, CCOI

Under pressure from large corporate customers, Cisco (NASDAQ:CSCO) is getting ready to disrupt one of its biggest businesses. According to The Information, the firm plans to sell operating system software for networking devices without requiring the purchase of high-end hardware. That means customers could use the company's cheaper switches that run on chips made by other shops like Broadcom (NASDAQ:AVGO).

The U.S. Commerce Department will remove Chinese telecom equipment maker ZTE Corp. (OTCPK:ZTCOY) from a trade blacklist after the company admitted to violating sanctions on Iran. At the same time, severe restrictions will be imposed on former ZTE chief executive, Shi Lirong, whom the agency accused of approving efforts to circumvent the sanctions.

More trouble? The biggest state-owned bank on Turkey's stock market plunged 19% overnight after its deputy chief executive was arrested in the U.S., accused of using his position to help facilitate evasion of U.S. sanctions on Iran. "The main concern is whether Halkbank (OTCPK:THBIY) will face a penalty or not, and how much that would be if it happened," said Michel Danechi, a fund manager at Duet Asset Management.

Seeking to limit losses that have plunged it into crisis, Toshiba's (OTCPK:TOSYY) board has approved a U.S. bankruptcy filing for its Westinghouse division. Chapter 11 would allow the nuclear unit to renegotiate or break its construction contracts, although the utilities that own the projects, including Southern Co. (NYSE:SO) and Scana (NYSE:SCG), would likely seek damages.

Meanwhile, a consortium led by SK Hynix (OTC:HXSCF) has offered to pay more than $9B for a majority stake in Toshiba's (OTCPK:TOSYY) memory chip business, the Maeil Business Newspaper reports. The Japanese firm put the business up for sale in response to a $6.3B writedown expected from exposure to Westinghouse.

Lockheed Martin is expected to receive Pentagon approval tomorrow to begin production for 200 new CH-53K King Stallion heavy cargo helicopters. The $27B program would replace the CH-53E Super Stallion, which has operated as the backbone of field logistics for the U.S. Marines since the mid-1980s. Terms of Lockheed's (NYSE:LMT) production deal are still being finalized.

A Boeing 737 operated by Peruvian Airlines caught fire Tuesday evening while landing at an airport in central Peru; all 141 people on board the flight were evacuated safely. The fire likely started when the wing scraped the runway, according to Interior Minister Carlos Basombrio, but Boeing (NYSE:BA) said it was aware of the incident and was gathering information.

Expanding beyond their code sharing agreement, Delta (NYSE:DAL) and Korean Air Lines have agreed to form a joint venture to share costs and revenue on flights across the Pacific amid intense competition. Earlier this week, American Airlines (NASDAQ:AAL) agreed to buy a 2.68% stake in China Southern Airlines (NYSE:ZNH) for $200M in a deal that also involves code sharing.

EU antitrust regulators have blocked a $14B merger between Deutsche Boerse (OTCPK:DBOEY) and the London Stock Exchange (OTCPK:LNSTY) because of the companies' combined market power. "As the parties failed to offer the remedies required to address our competition concerns, the commission has decided to prohibit the merger," said Margrethe Vestager, the EU's antitrust commissioner.

Wells Fargo is setting aside $110M to settle a class-action lawsuit over the creation of millions of unauthorized customer accounts. The lawsuit dates from May 2015, more than a year before the bank agreed to pay $185M in penalties to settle regulatory charges over opening 2M accounts without customers' permission. Wells (NYSE:WFC) expects the settlement to resolve other pending class actions.

The evolution of stock picking has taken a toll on jobs and fees at BlackRock (NYSE:BLK) after the world's biggest money manager said it will increasingly rely on data-mining technology to make investment decisions. Over forty staff will be laid off, including some portfolio managers. The revamp marks BlackRock's biggest attempt to rejuvenate its actively managed equities business as investors shift to ETFs.

Elliott Advisors, the hedge fund with a 3.25% stake in Dutch paint maker Akzo Nobel (OTCQX:AKZOY), has identified shareholders representing 25% of the company's owners who want it to engage in takeover talks with PPG Industries (NYSE:PPG). Akzo previously rebuffed a €24.4B takeover proposal and declined "engaging" with the U.S. company, saying it will instead detail plans to spin off its chemicals division.

Exxon Mobil has written to the Trump administration urging it to keep the U.S. in the 2015 Paris climate agreement. Calling the accord "an effective framework," Exxon (NYSE:XOM) cited a number of reasons to stay in the pact, including the opportunity to support greater use of natural gas, since it creates lower carbon emissions than coal when used for power generation.

Today's Markets

In Asia, Japan +0.1%. Hong Kong +0.2%. China -0.4%. India +0.4%.
In Europe, at midday, London -0.2%. Paris +0.1%. Frankfurt +0.3%.
Futures at 6:20, Dow -0.1%. S&P flat. Nasdaq flat. Crude +0.5% to $48.61. Gold -0.3% to $1251.30.
Ten-year Treasury Yield flat at 2.41%

Today's Economic Calendar

7:00 MBA Mortgage Applications
9:20 Fed's Evans speech
10:00 Pending Home Sales
10:30 EIA Petroleum Inventories
11:30 Fed's Rosengren: Economic Outlook
11:30 Results of $15B, 2-Year FRN Auction
1:00 PM Results of $28B, 7-Year Note Auction


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Wall Street Breakfast: Amazon Enters The Middle East

Author: skywalker   |  Publish date: Tue, 28 Mar 2017, 07:04 AM

Souq.com has been bought by Amazon (NASDAQ:AMZN) for an undisclosed amount, a day after a counteroffer of $800M from Dubai's Emaar Malls became public. "Amazon and Souq.com (Private:SOUQ) share the same DNA - we're both driven by customers, invention, and long-term thinking," said Russ Grandinetti, Amazon SVP of International Consumer. The acquisition is expected to close in 2017.


Undoing a slew of Obama-era policies, President Trump will sign an executive order today that will start the process of unwinding directives to combat climate change. Called the "Energy Independence" order, it will permit more carbon emissions from power plants, rescind a ban on coal leasing on federal lands, and reverse rules to curb methane emissions from oil and gas production.

The Dow extended its losing streak to eight sessions yesterday - the longest for the index since 2011 - but traders seem keen to move past the healthcare reform issue. In fact, future values are predicting a positive market open. "I don't think this is the beginning of a full-blown correction, but it's definitely a reversal in sentiment," said Peter Cardillo, chief market economist at First Standard Financial.

There are more than a dozen speeches from members of the Fed this week so the narrative is coming thick and fast from the central bank. One highlight will be Janet Yellen's speech in Washington today on workforce development challenges in low-income communities. Watch to see if the officials signal a plan for two additional rate increases this year, as proposed in their latest projections.

Despite corporate woes and political turmoil, South Korea's GDP grew more than expected in Q4, expanding 0.5% from the previous quarter and 2.4% year-on-year. Meanwhile, North Korea has carried out another test of a rocket engine that U.S. officials believe could be part of its program to develop an ICBM. It's the third such test in recent weeks.

South African President Jacob Zuma plans to fire Finance Minister Pravin Gordhan, unnerving investors who see him as an emblem of stability. The rand fell more than 3% on the news and bonds tumbled. While Gordhan has led efforts to keep spending in check and fend off a junk credit rating, Zuma wants to embark on a "radical economic transformation" that will tackle racial inequality and widespread poverty.


"Oil has been placed in the Dakota Access Pipeline underneath Lake Oahe," Energy Transfer (NYSE:ETE) said in a federal court filing, as it makes final preparations to start moving the oil. Once at full capacity, the $3.8B project will be able to ship 570K bpd of crude across four states to Patoka, Ill., where the fuel can be diverted to markets across the Midwest and Gulf Coast.

"The restrictive measures adopted by the Council in response to the crisis in Ukraine against certain Russian undertakings, including Rosneft (OTC:RNFTF), are valid," Europe's top court ruled today. The bloc slapped sanctions on Russia after it annexed Crimea in 2014 and stepped them up as Moscow went on to support a separatist rebellion in Ukraine's industrial east.

The U.K.'s biggest retailer will pay £214M over its 2014 accounting scandal as shareholders line up to oppose its $4.7B takeover of food wholesaler Booker (OTCPK:BOKGY). Tesco (OTCPK:TSCDY) has provisionally agreed to pay £129M under a deferred prosecution agreement with the Serious Fraud Office and £85M to compensate investors.

Replacing ousted chief Brad Grey, Jim Gianopulos, the longtime head of Twentieth Century Fox (FOX, FOXA), has been officially tapped to turn around Viacom's (VIA, VIAB) troubled Paramount Pictures. The move fills one of two gaps atop major Hollywood studios. Sony Pictures (NYSE:SNE) is still on the hunt for a replacement for outgoing chief Michael Lynton.

Comcast is planning to rebrand and expand a streaming video option for broadband subscribers who do not want to pay for a traditional cable package. The service, dubbed Xfinity Instant TV, will be priced as low as $15 a month to roughly $40 a month, sources told Reuters. Comcast (NASDAQ:CMCSA) will include major broadcast networks as well as add-on options.

Credit Suisse will finalize capital raising plans "as soon as possible," according to CEO Tidjane Thiam, who didn't give specific details on the timing or the type of fundraising. But reports suggest Credit Suisse (NYSE:CS) is considering $3B-$5B as it continues to restructure globally and recover from a recent $2B charge for selling toxic mortgage securities.

Just six months after a profit warning, Ericsson (NASDAQ:ERIC) has revealed that restructuring charges will be twice the original forecast, amounting to SEK6B-SEK8B ($680M-$910M) in 2017. The telecoms equipment maker will also write down SEK3B-SEK4B ($342M-$456M) of assets in Q1, while taking provisions of an estimated SEK7B-SEK9B.

Jack Dorsey will do "whatever it takes" to make sure Twitter (NYSE:TWTR) and Square (NYSE:SQ) do well, amid calls for the tech founder to focus on one over the other. "I'm going to make sure both succeed," he told CNBC, adding that there are "potential synergies" between the two firms and that Square was looking for further acquisitions, particularly in the machine-learning space.

The No. 1 U.S. airline has become the latest to seek a foothold in China by securing a tie-up with one of the country's big three state-run carriers. American Air (NASDAQ:AAL) is making a $200M equity investment in China Southern Airlines, equivalent to a 2.68% stake. The two will also begin a code-sharing agreement under which they can sell tickets on some of the other's flights.

A spokeperson with Uber said the company's self-driving cars are being put back on the road in Tempe, Arizona and Pittsburgh, Pennsylvania. It's a quick reversal from yesterday's news that the test program was being suspended. According to local police, the high-impact crash in Arizona was due to human error of the other vehicle and not UBER's driverless technology.

Ford will announce investments in three of its Michigan manufacturing facilities this morning, including the Michigan Assembly Plant, Flat Rock Assembly Plant and Romeo Engine Plant, sources told The Detroit News. It's unclear how many jobs will be created or the total dollar amount, however, one of the sources characterized the investments as "significant." F +1.1% premarket.

Besides guiding SpaceX (Private:SPACE), Tesla (NASDAQ:TSLA) and several more companies, Elon Musk is launching a new startup called Neuralink. "Difficult to dedicate the time, but existential risk is too high not to," he wrote in a tweet. It's expected to specialize in electrodes connected to the brain, which may ultimately lead to the uploading and downloading of thoughts.

Fired from Pimco four decades after he co-founded the investment firm, Bill Gross has finally settled his lawsuit against the company. The asset management giant is reported to have agreed to pay $81M to the legendary investor, who has pledged to give the money to charity. For its part, Pimco (OTCQX:AZSEY) said Gross's increasingly erratic behavior was behind the firing.

More drama at Valeant? Former CEO Michael Pearson is suing the firm over unpaid stock awards and consultation fees. Based on VRX's stock price of $10.81 at the close of trading on Monday, the 3M shares have a market value of about $32.43M. Valeant fell to a 7-year low earlier this month after activist Bill Ackman sold the last of his stake in the struggling drugmaker.

Today's Markets

In Asia, Japan +1.1%. Hong Kong +0.6%. China -0.4%. India +0.6%.
In Europe, at midday, London flat. Paris +0.1%. Frankfurt +0.6%.
Futures at 6:20, Dow flat. S&P +0.1%. Nasdaq +0.1%. Crude +0.9% to $48.14. Gold -0.2% to $1253.50.
Ten-year Treasury Yield flat at 2.37%

Today's Economic Calendar

International trade in goods
8:55 Redbook Chain Store Sales
9:00 S&P Corelogic Case-Shiller Home Price Index
10:00 Consumer Confidence
10:00 Richmond Fed Mfg.
10:00 State Street Investor Confidence Index
12:45 PM Fed's George speech
1:00 PM Results of $26B, 5-Year Note Auction


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Wall Street Breakfast: Markets Rethink The Trump Agenda

Author: skywalker   |  Publish date: Mon, 27 Mar 2017, 09:14 AM

World stocks and the dollar are under pressure amid rising doubts over President Trump's ability to pass legislative reforms. He was dealt a major political setback on Friday when Republican leaders pulled a bill to overhaul the U.S. healthcare system. The President said he will move on to "tax reform" while Obamacare "explodes," but questions are rising about Trump's ability to implement his economic agenda.


"The time has come to defeat globalists," French presidential candidate Marine Le Pen told a rally on Sunday, stating "the EU will die because the people do not want it anymore." "It must be done in a rational, well-prepared way," she later told Le Parisien. "I don't want chaos... the euro would be the last step because I want to wait for the outcome of elections in Germany."

Turkey may hold a second referendum on whether to continue with European Union accession talks, following a planned vote on April 16 that could give President Erdogan sweeping new powers. The news comes a day after Erdogan vowed to review all political and administrative ties with the EU, including a deal to curb illegal migration, but maintain economic relations with the bloc.

German business morale hit its highest level in nearly six years in March, adding 1.2 points to reach 112.3, suggesting executives in Europe's largest economy are brushing off concerns about the upcoming national election. In the weekend's local election in Saarland, Angela Merkel's CDU Party polled almost 41% of the votes, while the resurgent left SPD party got 30%.

Hong Kong's electoral committee has picked a staunchly pro-China candidate, Carrie Lam, to lead the city in voting that underscores Beijing's growing political influence on the former British colony. In 2014, parts of the city were paralyzed when tens of thousands of protesters blocked major roads for nearly three months to demand Beijing allow full democracy.

Police detained hundreds of protesters across Russia on Sunday, including opposition leader Alexei Navalny, after thousands took to the streets to demonstrate against corruption and demand the resignation of Prime Minister Dmitry Medvedev. It was the biggest show of defiance since a 2011-2012 wave of demonstrations rattled the Kremlin and led to harsh new laws aimed at suppressing dissent.

A joint committee of ministers from OPEC and non-OPEC oil producers has agreed to evaluate whether a global pact to limit supplies should be extended by six months. At a weekend meeting in Kuwait, the committee requested a technical group and the OPEC Secretariat "review the oil market conditions and revert... in April, 2017 regarding the extension of the voluntary production adjustments."


It's a busy week for competition authorities in Brussels. The $140B merger between Dow Chemical (NYSE:DOW) and Dupont (NYSE:DD) is expected to win approval, while a veto is anticipated for the €29B tie-up of LSE (OTCPK:LNSTY) and Deutsche Boerse (OTCPK:DBOEY). Antitrust officials are also expected to bless a second agrichemical megamerger - ChemChina's purchase of Syngenta (NYSE:SYT) - next week.

Westinghouse Electric could file for bankruptcy protection as early as tomorrow and is seeking support from South Korea's Korea Electric Power (NYSE:KEP), sources told the Nikkei. The U.S. nuclear unit of Toshiba (OTCPK:TOSYY) reportedly plans to meet with American utilities today, looking to continue construction on two behind-schedule nuclear power plants during bankruptcy.

Tesla will begin taking orders for its solar roof tiles next month, a product unveiled before the company's acquisition of SolarCity. Tesla (NASDAQ:TSLA) CEO Elon Musk revealed no new details on cost, but previously said the new roof tiles will cost less to manufacture and install than a traditional roof, even before savings from the power bill.

Hoping to speed up development, Royal Dutch Shell (RDS.A, RDS.B) and Anadarko Petroleum (NYSE:APC) may let a 10-year joint venture in the Permian Basin expire to split their properties. The divorce and re-parceling of acreage would let each company drill and develop new wells at its own pace in the hottest development area of the U.S. oil industry.

Just weeks after President Trump ordered a review, the world's largest asset managers have called on U.S. officials to delay landmark laws set to govern America's $16T retirement industry. BlackRock (NYSE:BLK) and Vanguard are warning that the so-called fiduciary rule, which is due to come into force next month, risks confusing investors and adding unnecessary financial costs.

UPS's legal fight with New York has gone up in smoke. A federal judge said the shipping giant ignored "red flags" that its brown trucks were being used to transport millions of untaxed cigarettes from Indian reservations and will determine the award as soon as next month. A similar suit is also pending against UPS rival FedEx (NYSE:FDX).

Iran has imposed sanctions on 15 American companies for alleged human rights violations and cooperating with Israel, just days after the U.S. slapped penalties on 30 foreign entities for transferring sensitive technology to Tehran. The firms include United Technologies (NYSE:UTX), ITT Corp. (NYSE:ITT), Raytheon (NYSE:RTN), Re/Max Real Estate (NYSE:RMAX), Oshkosh (NYSE:OSK) and Elbit Systems (NASDAQ:ESLT).

A committee of 63 aviation specialists from across China has agreed the C919 is technically ready for its maiden flight, Xinhua reports. China's first national passenger jet aims to challenge the dominance of Boeing's (NYSE:BA) 737 and Airbus's (OTCPK:EADSY) A320 in the global commercial aviation market. COMAC has already received 570 orders for C919 planes.

More sources have revealed that American Airlines (NASDAQ:AAL) is considering taking a stake in China Southern Airlines (NYSE:ZNH), boosting routes between the world's two largest travel markets. The potential deal would make American the second U.S. carrier to own part of a Chinese airline after Delta bought 3.55% of China Eastern Airlines for $450M in 2015.

A PR disaster or dress code standards? Two young girls were barred from a United Airlines (NYSE:UAL) flight on Sunday because they were wearing leggings, a decision that drew an uproar on social media and customer threats to boycott the airline. United later clarified that as "pass riders," or relatives of employees, the girls did not meet its dress policy, but released a statement entitled "To our customers... your leggings are welcome!"

Following a high-impact crash in Tempe, Arizona, UBER is suspending its self-driving car program. The accident occurred when the driver of a second vehicle "failed to yield" to the Uber car while making a turn, according to Tempe Police Sgt. Josie Montenegro. Even so, the company is grounding driverless vehicles in Arizona, Pittsburgh and San Francisco pending the outcome of an investigation.

Amazon is mulling opening stores that sell furniture and home appliances, sources told the NYT. In an ironic twist, Amazon (NASDAQ:AMZN) is considering using the stores as showrooms to help sell items online that consumers might want to touch and feel. Some of the innovations being explored by Bezos and team include augmented/virtual reality, automation at checkout and robots.

BT has been slapped with a £42M fine from Ofcom and has set aside £300M to repay telecom providers, marking the largest penalty the U.K. regulator has ever handed down. It found BT's Openreach division had cut compensation payments to providers, including Vodafone (NASDAQ:VOD), for delays in installing high-speed lines between early 2013 and late 2014.

Investor sentiment towards Snap appears to be changing. Goldman Sachs and Jefferies have both issued Buy ratings on the stock, while JPMorgan started coverage at Neutral, after SNAP was hit with a flurry of Sell and Hold ratings when it first listed. Snap shares are still down around 7% since their debut, but remain above their IPO price. SNAP +2.5% premarket.

Hollywood studios are getting ready to upend decades of tradition by making movies available at home less than 45 days after their big-screen release. According to WSJ, the only question for so-called premium video-on-demand is when and on what terms it starts, not whether it happens. Related tickers: TWX, FOX, CMCSA, SNE, VIA, AMC, RGC, NFLX

Today's Markets

In Asia, Japan -1.4%. Hong Kong -0.7%. China -0.1%. India -0.6%.
In Europe, at midday, London -0.8%. Paris -0.3%. Frankfurt -0.8%.
Futures at 6:20, Dow -0.7%. S&P -0.9%. Nasdaq -0.8%. Crude -0.9% to $47.52. Gold +0.7% to $1257.60.
Ten-year Treasury Yield -3 bps to 2.37%

Today's Economic Calendar

10:30 Dallas Fed Manufacturing Survey
1:00 PM Results of $26B, 2-Year Note Auction
1:15 PM Fed's Evans speech


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Wall Street Breakfast: Art Of The Healthcare Deal

Author: skywalker   |  Publish date: Fri, 24 Mar 2017, 08:54 AM

President Trump has delivered a message to House Republicans: If the American Health Care Act doesn't pass today, we're moving on. That means Obamacare would stay in place if enough conservative lawmakers don't get behind the new healthcare legislation. Investors regard the vote as a test for the Trump administration that could show whether it can muster the backing needed to push through its economic agenda.


Dallas Fed President Robert Kaplan sees three interest rate rises in 2017 as "a reasonable baseline." I'm not "looking for a pause" in rate raises as long as U.S. employment and inflation figures continue to improve, he told reporters, adding that it would be right for the Fed to begin trimming its balance sheet in the future. Kaplan is a voting member on the FOMC.

There is "no reason" to withdraw the bank's massive monetary stimulus now or raise bond yield targets, as inflation remains far from its 2% goal, BOJ Governor Haruhiko Kuroda said at a Reuters Newsmaker event. He also dismissed market concerns that the central bank will eventually lose its ability to control long-term interest rates under its yield curve control framework.

The possibility of the United States branding South Korea a currency manipulator cannot be ruled out, according to Finance Minister Yoo Il-ho. Those "problems" could happen if America changes its criteria. A formal declaration of currency manipulation requires the U.S. Treasury to seek negotiations to resolve the situation or could result in punitive tariffs.

Belgian authorities are tightening security around Antwerp after a man drove his car at high speed through a busy shopping area, forcing pedestrians to jump out of the way. Police have arrested the suspected driver, identified as Mohamed R., a 39-year old French man of North African origin. Knives, a shotgun and a canister with an unknown liquid were found in his vehicle.

Economic activity in the eurozone accelerated in March, bolstering optimism over the region in the face of Brexit. Markit's flash composite PMI rose to 56.7, hitting a nearly six-year high, from 56.0 in February. "It signals GDP growth of 0.6% in the first quarter," said Chris Williamson, chief economist at IHS Markit. "It's an economy firing on all cylinders."

Oil is set for its third weekly drop ahead of this weekend's meeting in Kuwait, at which OPEC and its production-cutting allies will assess the effectiveness of their actions to date. Talks will also be overshadowed by the question of whether the persisting glut requires curbs to be extended beyond the summer.


On a party-line vote of 50-48, the Senate has approved overturning Obama-era regulations that put strict requirements on consumer privacy protection. The agency, then led by Tom Wheeler, voted to require ISPs to get consumer consent before using data like health and financial information, as well as precise geolocation in ads and internal marketing. Major providers opposed the restrictions at the time. Related tickers: T, VZ, CMCSA, CHTR, FTR, CTL, WIN, CCOI, OTCPK:ATCEY

The YouTube advertising exodus continues as Johnson & Johnson (NYSE:JNJ), JPMorgan (NYSE:JPM) and LYFT pull ads from the platform amid concerns they may have appeared on channels that broadcast offensive videos. Whether the recent events are a harbinger of bigger problems may depend on whether Google can give businesses more control over ad placement. Alphabet (GOOG, GOOGL) shares this week have already fallen more than 3%.

Looking to create a new revenue stream, Twitter (NYSE:TWTR) is exploring a subscription-based premium version of its Tweetdeck interface. "We're conducting this survey to assess the interest," a spokeswoman told The Verge. Tweetdeck's core service would remain free, but the advanced platform - including new analytics, alerts about breaking news and other tools - could run about $20 per month.

Four tech giants are heading back to the line of scrimmage. Amazon (NASDAQ:AMZN), Facebook (NASDAQ:FB), Twitter (TWTR) and YouTube (GOOG, GOOGL) have all submitted proposals to the NFL in the hope of streaming Thursday Night Football games next season. Twitter won the contest last season with a $10M bid (CBS and NBC pay a lot more for the rights to broadcast the 10 games on TV).

CEOs must speak up to ensure America remains globally competitive, BOX chief Aaron Levie told CNBC, declaring "we are at a point where business and politics are inseparable." Corporate leaders must take a more active role in telling Washington what they think about things like immigration reform, encryption policy, privacy issues, global trade and healthcare, which, "is certainly going to impact a lot of different markets."

HSBC plans to add as many as 1,000 new employees to its Chinese retail banking and wealth management arm this year, most of them in the Pearl River Delta, the heart of the bank's growth strategy in China. If that target is hit, the new additions will mean HSBC will have hired twice as many people for the business as it did in 2016, suggesting its growth in the region remains strong.

Brexit boost... Deutsche Bank (NYSE:DB) +1% premarket after choosing a new office for its London headquarters, signaling a vote of confidence in Britain's capital. Employing around 7,000 people in London, the German lender is due to begin transferring staff to the new building, which will house its corporate and investment bank, in the second half of 2023.

Credit Suisse has restated its full-year earnings to reflect a charge of 272M francs after reaching a settlement on toxic mortgage securities with the U.S. National Credit Union Administration. The move comes as the bank increased its bonus pool by 6%, defying a trend toward smaller payouts at many of its peers to prevent an exodus of top talent. CS +1.1% premarket.

Marking another setback for the agency in a high-profile international corporate tax case, Amazon (AMZN) has won a more than $1.5B tax dispute with the IRS over its transactions with a Luxembourg subsidiary. Judge Albert Lauber of the U.S. Tax Court rejected a variety of IRS arguments, and found that on several occasions it abused its discretion, or acted arbitrarily or capriciously.

Hershey and the trust that control it are filling positions on their respective boards following a year marked by a $23B acquisition overture from Mondelez (NASDAQ:MDLZ) and a series of resignations. The departures followed criticism of poor governance, excessive compensation and unnecessary expenses at the Hershey Trust (NYSE:HSY) by its overseer, the Pennsylvania attorney general.

Theranos founder Elizabeth Holmes plans to give out personal shares in the company to investors who promise not to sue her or the blood testing firm. Investors could get about two additional shares for each one they bought, meaning the effective cost would be lowered to about $5, WSJ reports. Though Theranos (Private:THERA) raked in more than $600M in its latest funding rounds, it now has about $150M or less in cash, excluding debt.

"There are serious discussions with the New York Stock Exchange (NYSE:ICE) about having the NYSE be one of the exchanges for the Aramco (Private:ARMCO) IPO and I believe the decision will be made on the financial merits," Saudi foreign minister Adel al-Jubeir told Fox News. "Our objective is to try to complete the IPO sometime in 2018."

The U.S. State Department is expected to approve the construction of TransCanada's (NYSE:TRP) Keystone oil pipeline today, Reuters reports, ahead of Monday's deadline to complete a review of the project. The move would mark the beginning of a process that could be lengthy; approvals are needed from state regulators, and the endeavor, which was previously blocked by the Obama administration, could face legal challenges. TRP +1.6% premarket.

Thursday's Key Earnings

Conagra Brands (NYSE:CAG) -0.3% as sales declined.
GameStop (NYSE:GME) -11.3% AH after weak guidance.
Micron (NASDAQ:MU) +10.3% AH on strong NAND demand.

Today's Markets

In Asia, Japan +0.9%. Hong Kong +0.1%. China +0.6%. India +0.3%.
In Europe, at midday, London -0.2%. Paris -0.5%. Frankfurt -0.2%.
Futures at 6:20, Dow +0.2%. S&P +0.2%. Nasdaq +0.2%. Crude +0.7% to $48.01. Gold -0.3% to $1243.70.
Ten-year Treasury Yield flat at 2.42%

Today's Economic Calendar

8:00 Fed's Evans speech
8:05 Fed's Bullard speech
8:30 Durable Goods
9:45 PMI Composite Flash
1:00 PM Baker-Hughes Rig Count


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Wall Street Breakfast: High Stakes For Healthcare Vote

Author: skywalker   |  Publish date: Thu, 23 Mar 2017, 09:49 AM

The odds of getting an Obamacare replacement bill passed by the House improved late Wednesday as the White House reportedly offered to get rid of the set of minimum benefits health insurers are now required to provide customers. That could win over some members of the Freedom Caucus ahead of today's crucial healthcare vote, which investors see as a litmus test for President Trump's broader plans and trade on Wall Street.


The Metropolitan police have revised the toll in yesterday's terror attack in London, confirming 4 dead and 29 injured, while revealing that seven suspects have been arrested in overnight raids. Authorities have asked the media not to identify the assailant while they are "at a sensitive stage in the investigation," but police believe the attack was inspired by "Islamist-related terrorism."

"If Europe continues this way, no European in any part of the world can walk safely on the streets," President Erdogan declared in his latest salvo in a row over campaigning by Turkish politicians in Europe. On Tuesday, EU Enlargement Commissioner Johannes Hahn told Bild that "with regard to the strict accession criteria, Turkey has been moving further and further away from the EU for some time."

The ECB is about to give lenders a last offer of free long-term cash. The final round of Targeted Longer-Term Refinancing Operations - four-year loans at an interest rate that starts at zero and could go lower - will be allotted to banks this morning. Economist estimates for the size of the uptake by banks vary tremendously, from €30B to as high as €750B.

Germany's large current account surplus is the result of competitiveness and the government has no influence over it, the finance ministry said in a report, adding that the surplus will shrink in the near future. It has led Europe's largest economy to be under fire for years, but the Trump administration recently stepped up criticism, accusing it of unfairly benefiting from weak currencies at America's expense.

The Swiss National Bank carried out foreign exchange interventions totaling 67.1B Swiss francs in 2016 in order to counter "an undesired tightening of monetary conditions." That was down from 86.1B francs in 2015, when the SNB intervened heavily at the start of the year following its decision to remove a cap on the franc's value against the euro.

Canada unveiled modest new spending in its 2017 budget plan on the belief its multibillion-dollar stimulus program introduced last year is boosting consumption and economic growth. The lack of major spending also suggests Ottawa is willing to wait until U.S. policy becomes clearer, as proposed changes to trade could have major ramifications for the Canadian economy.

Continuing the week of Fedspeak... Janet Yellen is set to give opening remarks this morning at the Federal Reserve System Community Development Research Conference in Washington, D.C. At the same event, Minneapolis Fed President Neel Kashkari will speak on "U.S. education outcomes and achievement gaps." Later today, Dallas's Robert Kaplan participates in a moderated Q&A session on the economic outlook and monetary policy.


Teva Pharmaceutical plans to cut as many as 6,000 jobs, or about 11% of its global workforce, Israel's Calcalist reports. It has had a rough year, with a series of costly acquisitions, along with delayed drug launches and heavy competition. Erez Vigodman resigned as CEO last month and Teva's (NYSE:TEVA) U.S.-traded shares are near a ten-year low at $32.61. TEVA +1.1% premarket.

U.S. wireless carriers have suspended digital advertising on Google's (GOOG, GOOGL) YouTube and other advertising platforms not related to search over concerns that their ads may have run next to extremist videos. The move by Verizon (NYSE:VZ) and AT&T (NYSE:T) adds more significant advertisers to the backlash, which also includes consumer brands McDonald's (NYSE:MCD), Honda (NYSE:HMC), Toyota (NYSE:TM) and L'Oreal (OTCPK:LRLCY).

After working for almost a year without a contract, 17,000 AT&T (T) workers have gone on strike against the company in California and Nevada. The employees are picketing call centers and offices, citing "unilateral changes in job requirements." "A walkout is not in anybody's best interest," AT&T spokesperson Marty Richter said, but the company is "very prepared to continue serving customers" despite it.

Becoming the first to update its entire network, Wells Fargo (NYSE:WFC) plans to upgrade all 13,000 of its ATMs next week to allow customers to access their funds using cellphones instead of bank cards. Clients would get a unique eight-digit code from the Wells Fargo smartphone app and enter it into the ATM along with their PIN number.

The European Commission is set to formally block a tie-up between Deutsche Boerse (OTCPK:DBOEY) and the London Stock Exchange (OTCPK:LNSTY) before the end of this month, according to Reuters. The deal has been on the verge of collapse since February, when the LSE said it wouldn't be able to meet Brussels's request for it to sell its fixed-income trading platform MTS.

Facing a backlash for promising to hire refugees, Starbucks (NASDAQ:SBUX) plans to step up its military hiring. The coffee retailer will hire 25,000 veterans and their spouses by 2025, on top of more than 10,000 brought on board since a pledge made four years ago. In support of military communities, the chain also said it's opening 100 more locations near major U.S. bases in the next five years.

Attempting to quell bankruptcy fears, Sears (NASDAQ:SHLD) CFO Jason Hollar reiterated efforts the company has made to cut costs and shore up its liquidity, and said the inclusion of new language in Sears' 10-K was meant to adhere to regulatory standards. "Sears remains focused on executing our transformation plan and will continue to meet our financial obligations."

France's economy minister is not ruling out cutting the government's stake in Renault (OTCPK:RNLSY), but added that any sale would have to take place at the best possible market conditions. "I don't want to make French people lose money," Michel Sapin told BFM radio. France currently holds just under 20% of Renault, whose shares are down by around 6% so far in 2017.

Statoil has "reset" its exploration campaign in the Gulf of Mexico by placing top bids for 13 offshore deepwater leases there in the latest auction. It follows years of declining offshore interest that dates back before the downturn in oil and gas prices. Statoil (NYSE:STO) made total bids of $44.5M, second only to Shell (RDS.A, RDS.B) and ahead of Hess (NYSE:HES), Chevron (NYSE:CVX) and Exxon (NYSE:XOM).

Following two reports of the life-saving allergy shot failing to work in emergencies, Mylan (NASDAQ:MYL) has recalled about 81,000 EpiPen devices in countries outside the U.S. In both situations, patients were able to obtain treatment through the use of an alternate EpiPen. The recall affects devices distributed in Australia, New Zealand, Japan and Europe.

The U.S. utilities that are clients of Toshiba's (OTCPK:TOSYY) Westinghouse nuclear unit have hired advisers to prepare for its potential bankruptcy, sources told Reuters. Scana (NYSE:SCG) and Southern Co. (NYSE:SO), among Westinghouse's largest creditors, hope to recover the cost overruns on projects, which tally in the billions of dollars.

Chinese telecom equipment maker ZTE Corp. has pleaded guilty in U.S. federal court in Texas for conspiring to violate American sanctions by illegally shipping U.S. goods and technology to Iran. The guilty plea was part of an agreement ZTE (OTCPK:ZTCOY) reached earlier this month with U.S. authorities that also called for up to $1.2B in fines and other penalties.

Microsoft has finished development of a Windows 10 version customized for Chinese government use, which could boost its China prospects after sales were hit by Beijing's cybersecurity crackdown. Microsoft (NASDAQ:MSFT) declined to say how the software was modified, but in general China's government is concerned about technology products that could contain hidden "back doors" to enable foreign surveillance.

European countries won't be following the U.S. and U.K. by adopting a cabin ban on large electronic devices. Officials in France, Germany and the Netherlands say they haven't received enough information to introduce the restrictions on certain Middle Eastern flights. Carrier worries? Businessmen may live with the disruption for the sake of convenience but other passengers may start to shop around. Related tickers: OTCQX:DLAKY, OTCPK:AFLYY

Today's Markets

In Asia, Japan +0.2%. Hong Kong flat. China +0.1%. India +0.6%.
In Europe, at midday, London -0.1%. Paris flat. Frankfurt +0.2%.
Futures at 6:20, Dow flat. S&P +0.1%. Nasdaq flat. Crude +0.6% to $48.32. Gold -0.1% to $1248.30.
Ten-year Treasury Yield +2 bps to 2.41%

Today's Economic Calendar

8:00 PM Janet Yellen speech
8:30 Initial Jobless Claims
9:45 Bloomberg Consumer Comfort Index
10:00 New Home Sales
10:30 EIA Natural Gas Inventory
12:00 PM Fed's Kashkari speech
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
7:00 PM Fed's Kaplan: Economic Outlook and Monetary Policy


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Wall Street Breakfast: Reevaluating The 'Trump Trade'?

Author: skywalker   |  Publish date: Wed, 22 Mar 2017, 09:31 AM

There appear to be growing worries that President Trump's tax reform, infrastructure spending and deregulation may take longer to pass than initially thought. Concerns the House will not have enough votes to repeal and replace Obamacare yesterday led stock averages to record their worst losses since the election. With the selloff continuing across the globe overnight, is the "Trump trade" showing signs of cracking?


Japan's Nikkei share average skidded 2.1% following North Korea's latest missile test, which apparently exploded within seconds after liftoff. The failed launch comes after Pyongyang vowed to fight back against any U.S. move to broaden sanctions and "accelerate" its missile programs. Overnight, Japan also posted a February trade surplus of ¥813.4B ($7.3B), much larger than the surplus of ¥239.9B reported a year earlier.

Italy is calling for unambiguous support for an open global economy at a finance ministers summit in May, after the U.S. forced a watering down of tough trade language at last weekend's G20 finance meeting. "Our hope is that the G7 in Taormina will yield a strong and clear message... against any temptation of protectionist closure," PM Paolo Gentiloni said at a press conference.

Puerto Rico Electric Power Authority bondholders are resisting the island's effort to overhaul the utility's existing deal to restructure its business and more than $8B of debt. The government proposal, which would reduce service reserves and lengthen maturities, earned a quick rebuke ahead of today's U.S. congressional hearing on the PREPA restructuring plan.

According to House Speaker Paul Ryan, President Trump "hit it out of the park" in his trip yesterday to Capitol Hill to convince GOP members to vote for the Obamacare repeal. The quick take is that the proposed replacement would cover fewer people, meaning less money/more unpaid bills for hospitals and clinics. QHC, CYH, THC, HCA, LPNT tumbled on the news.


The chief scientist helping drive Baidu's (NASDAQ:BIDU) push into artificial intelligence is quitting the Chinese search giant, putting at risk its efforts to put AI at the center of a business revival. Andrew Ng, former head of Google Brain (GOOG, GOOGL), didn't provide details on his next move except to say he was excited "to continue working toward the AI transformation of our society."

Disney has been slapped with a lawsuit alleging it ripped off the idea for its Oscar-winning, billion-dollar-grossing Zootopia from a Hollywood veteran whose credits include Total Recall and Minority Report. Gary Goldman claims he pitched the plot, theme and name Zootopia to the studio in 2000 and 2009, but according to Disney (NYSE:DIS), the "lawsuit is riddled with patently false allegations."

Airbnb is doubling down on China... Not only is the home rental company doubling investments in the country and tripling its local workforce, it's also got new branding to match. Airbnb (Private:AIRB) has registered Chinese name Aibiying, which means to "welcome each other with love." The business will also introduce its Trips platform, which helps visitors find interesting experiences, to Shanghai.

Snap closed more than 2% higher on Tuesday after receiving its second Buy rating from a Wall Street firm. "Snap is a very unique tech company that should not be pigeonholed in a particular industry, or investors risk missing the forest for the trees," Drexel Hamilton said in a research note, assigning a $30 price target. SNAP +1.5% premarket.

Following a wave of ugly developments, UBER is vowing to head down a new road and become a more humane company. The pledge came in a contrite conference call that focused mostly on the firm's diversity efforts and its search for a COO. Even as it acknowledges past mistakes, the fallout hasn't damaged its business - last week riders in the U.S. took more trips with Uber than ever before.

The top five places in the global investment banking league table now firmly belong to U.S. banks, according to industry analytics firm Coalition, reflecting their domination over struggling European peers. The gap has widened consistently since 2011, when the U.S.-European split was roughly 50-50. American banks now take in around a two-thirds share of the investment banking revenue pie. Tickers by score: JPM, C, GS, BAC, MS, DB, BCS, CS, HSBC

An ING spokesman has confirmed a Dutch criminal investigation, but wouldn't comment beyond the information presented in the bank's annual report. It relates to the "on-boarding of clients, money laundering, and corrupt practices," according to the 10-K filing, and can result in "significant" penalties. ING -3.8% premarket.

Deutsche Bank won't be subject to a class action over $3.1B in toxic mortgage losses, according to U.S. District Judge Alison Nathan, who ruled investors cannot pursue their claims as a group. Separately, the Handelsblatt newspaper reported that Deutsche (NYSE:DB) agreed to a €450M settlement with shareholders in connection with the bankruptcy of Iceland's Kaupthing.

The SEC will hold a meeting today to vote on rules shortening the amount of time it takes for a securities trade to settle from three to two business days. Wall Street and consumer groups are largely supportive of the effort, as it reduces credit and market risk exposure. The current SEC settlement cycle has not been updated since 1993.

AkzoNobel has rejected a second unsolicited merger proposal from PPG Industries (NYSE:PPG), stating it failed to recognize the value of the company and address significant risks and uncertainties. AkzoNobel's (OTCQX:AKZOY) board raised concerns in their initial €20.9B rejection on March 9, but said they still have not been addressed. It also warned that a merger would lead to significant job cuts.

After China, Chile, Hong Kong, South Korea and the EU suspended imports, how big is the fallout from Brazil's rotten meat scandal? Moody's Investors Service said it's too soon to quantify the implications for credit ratings, as much will depend on the outcome of the investigation (dubbed "Weak Flesh") and the reaction by Brazil's trade partners. Related tickers: BRFS, OTCQX:MRVSY, OTCQX:JBSAY

The U.K. has followed the U.S. by introducing a cabin baggage ban on electronic devices. Laptops, tablets and phones larger than 6.3" in length will have to be checked in on all direct inbound flights from Turkey, Lebanon, Jordan, Egypt, Tunisia and Saudi Arabia. The British government said the ban followed talks on air security and was "necessary and proportionate." Related tickers: OTCPK:ICAGY, OTCQX:ESYJY

Lockheed Martin CEO Marillyn Hewson is "more optimistic than ever" about growth prospects, because refocusing the company on its core defense business has helped make weaponry more affordable for cost-conscious governments, including the Trump administration. Additional growth could come from international customers and Lockheed's (NYSE:LMT) innovations in 21st century weapons including directed energy.

Amazon isn't faking its desire to root out counterfeits. As soon as next month, it will start a registry for companies to list their logos and intellectual property with the world's largest online store, said Peter Faricy, VP of Amazon Marketplace. The registry, currently being tested, will let Amazon (NASDAQ:AMZN) remove listings and potentially cancel seller accounts.

Payless competitors, including DSW (NYSE:DSW) and Caleres (NYSE:CAL), are watching closely as the struggling discount shoe chain prepares to file for bankruptcy as soon as next week, with plans to close 400-500 stores as it reorganizes. Its been a tumultuous year in retail. Sears (NASDAQ:SHLD) just acknowledged "substantial doubt" about its ability to keep operating, raising fresh concerns about a company that has lost more than $10B in recent years.

Costco is ramping up its home grocery delivery efforts by teaming up with a third-party service. Shipt will launch the new offering in Tampa, FL, with plans to move into 50 markets and more than 30M households by the end of 2017. The online service requires a membership, which costs $99 a year for unlimited delivery, but a Costco (NASDAQ:COST) card won't be required to purchase items through the app.

Tuesday's Key Earnings

FedEx (NYSE:FDX) +2.1% AH with better Ground margins.
General Mills (NYSE:GIS) -0.8% on mixed results.
Nike (NYSE:NKE) -4% AH following tepid U.S. growth.

Today's Markets

In Asia, Japan -2.1%. Hong Kong -1.1%. China -0.5%. India -1.1%.
In Europe, at midday, London -0.8%. Paris -0.5%. Frankfurt -0.5%.
Futures at 6:20, Dow -0.2%. S&P -0.1%. Nasdaq -0.1%. Crude -1.4% to $47.56. Gold -0.1% to $1245.80.
Ten-year Treasury Yield -2 bps to 2.41%


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