Wall Street Articles

Author: skywalker   |   Latest post: Mon, 19 Mar 2018, 12:08 PM


Wall Street Breakfast: Week Starts On A Weak Note

Author: skywalker   |  Publish date: Mon, 19 Mar 2018, 12:08 PM

Markets are beginning the week with caution amid tensions in Washington and important economic events on the horizon. Amid "phase two" tax cut talk in Washington, President Trump lashed out at Special Counsel Robert Mueller following the weekend firing of Deputy FBI Director Andrew McCabe. Lawmakers are also expected to unveil a spending bill today that would fund the government until October as investors count down to this week's Fed meeting and EU Brexit Summit.


Washington has opposed the EU's plans for a levy on digital revenues, while Brussels published a list of 200 U.S. products that would be targets for higher duties if it failed to secure an exemption from U.S. metal tariffs. According to a draft proposal by the European Commission, large digital companies operating in the EU, such as Alphabet (GOOG, GOOGL), Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), Facebook (NASDAQ:FB) and Twitter (NYSE:TWTR), could face a 3% tax on their gross revenues based on where their users are located.

Steel and aluminum users that depend on imported products not available from U.S. producers may have to wait up to 90 days for an exclusion from the Trump administration's new tariffs. "The request should clearly identify, and provide support for, the basis upon which the exclusion is sought," according to a Commerce Department document. The tariffs are expected to go into effect on March 23.

Federal borrowing nearly doubled during the presidency of Barack Obama, and it has continued to rise under President Trump. According to the U.S Treasury, the national debt exceeded $21T for the first time this past week, a little more than six months after it reached $20T on Sept. 8. It comes after Congress and Trump passed a debt limit suspension in February, allowing unlimited borrowing until March 1, 2019.

China has elevated a key confidante of President Xi as part of a broad reshuffle of government positions that now mostly consist of his Communist Party allies. Yi Gang, a vice governor of the PBOC, has been nominated to replace Zhou Xiaochuan, who has run China's central bank for more than 15 years. He has pledged to follow "prudent" monetary policy, promote reform and maintain financial stability.

Representatives of North Korea, South Korea and the United States are reportedly meeting in Finland for talks on denuclearization. So-called "track 1.5 talks" bring together a mixture of current government officials and nongovernmental experts. The gathering comes amid a flurry of recent diplomatic activity before an expected meeting between President Trump and Kim Jong-un by the end of May.

Russian President Vladimir Putin won re-election by a wide margin Sunday, extending his rule amid an escalating confrontation with the West. The Kremlin's longest-serving leader since Joseph Stalin scored almost 77% of the vote, putting him on track for a new six-year term. The landslide victory comes despite a stagnating Russian economy that follows the longest recession in two decades.

Russia has also ordered the expulsion of 23 British diplomats in response to a similar move by the U.K. government, which blames Moscow for a nerve agent attack on a former spy and his daughter. In further retaliation, Moscow decided to close the British Council in Russia and withdraw permission for Britain to open a consulate in St. Petersburg.

President Trump is set to unveil his Initiative to Stop Opioid Abuse in New Hampshire, which will seek to cut opioid prescriptions by a third over the next three years, as well as the death penalty for some drug traffickers. While Congress recently appropriated $6B to combat the epidemic, today's plan will lay out how the administration believes that money should be spent. According to the CDC, opioids were involved in more than 42,000 overdose deaths in 2016.


Several Apple screen suppliers traded sharply lower overnight, including Samsung (OTC:SSNLF), Sharp (OTCPK:SHCAF), LG Display (NYSE:LPL) and Japan Display (OTCPK:JNNDF), following a report from Bloomberg stating the tech giant was making displays of its own. Apple (AAPL) has made a "significant investment in the development of next-generation MicroLED screens" at a facility near its California headquarters, but consumers will "probably have to wait a few years before seeing the results."

Following similar action by Facebook (FB) and Google (GOOG, GOOGL), Twitter (TWTR) is set to be the next to bar a range of advertisements for cryptocurrencies. The ban would apply to ads for initial coin offerings, token sales and wallets, according to the report from Sky News, and may include ads for exchanges as well with limited exceptions.

Meanwhile, Mastercard is "very happy to look at" facilitating the use of cryptocurrencies, but only as long as those virtual currencies are issued by central banks, FT reports. Mastercard (NYSE:MA) and its rival Visa (NYSE:V) both made it more difficult for users to buy bitcoin this year by reclassifying such purchases as "cash transactions," which attract higher fees.

The U.S. State Department and Coca-Cola (NYSE:KO) are launching a project using blockchain's digital ledger technology to create a secure registry for workers that will help fight the use of forced labor worldwide. This will "further increase transparency and efficiency of the verification process related to labor policies within our supply chain," said Brent Wilton, the company's global head of workplace rights.

Igniting a firestorm over how it manages third-party access to its users' information, Facebook (FB) was slammed by U.S. and British lawmakers over the weekend for not providing more information about its ties to Cambridge Analytica. The data firm, which worked for President Trump in the 2016 election, improperly kept Facebook (FB) user data for years despite saying the records were destroyed. FB -3.3% premarket.

Google is teaming up with retailers including Target (NYSE:TGT), Walmart (NYSE:WMT), Home Depot (NYSE:HD), Costco (NASDAQ:COST) and Ulta Beauty (NASDAQ:ULTA) on a new program called Shopping Actions, Reuters reports. In exchange for search listings and linking to loyalty programs, the companies will pay Google (GOOG, GOOGL) a piece of each purchase. According to analysts, the current default choice for many consumers is a Google search that ends with a transaction on Amazon (AMZN).

Alibaba is investing an extra $2B in Southeast Asian e-commerce firm Lazada (Private:LZDA) and tapped one of Alibaba's 18 founders, long-time executive Lucy Pen, to take over as chief executive. The region "is a key part of Alibaba’s global growth strategy," Alibaba (NYSE:BABA) said in a statement. It held an 83% stake prior to the investment, which now totals $4B after a $2B infusion over the past two years.

In the midst of a turnaround that hopes to achieve same-store sales growth, Macy's (NYSE:M) detailed some new app experiences at the ShopTalk conference in Las Vegas. The company will roll out a mobile checkout option at every location by the end of the year and announced the expansion of a successful virtual reality pilot for furniture to 60 stores by this fall.

UPS's entire central London fleet will soon be made up of electric vehicles, marking the "beginning of the end" of what the company called reliance on the internal combustion engine. The new "intelligent smart grid" from UPS will stagger when delivery trucks charge, solving the problem of needing to recharge a large number of vehicles simultaneously without having to pay for an expensive power supply upgrade.

The NHTSA is opening a probe into why some air bags failed to deploy in Hyundai (OTCPK:HYMLF) and Kia (OTCPK:KIMTF) vehicles after crashes in which four people were reportedly killed and another six injured. The agency is specifically reviewing 425,000 2012-2013 Kia Forte and 2011 Hyundai Sonata cars, but also said it will determine if any other manufacturers used similar air bag control units.

General Dynamics intends to proceed with its tender offer to acquire all outstanding shares of CSRA for $40.75 per share in cash, or a total of $9.6B, despite CACI's unsolicited stock and cash offer of $44 per share. General Dynamics (NYSE:GD) said it had secured all necessary regulatory approvals and has the funding in place to complete the transaction in early April. CACI +2.1% premarket

Today's Markets

In Asia, Japan -0.9%. Hong Kong flat. China +0.4%. India -0.8%.
In Europe, at midday, London -1.3%. Paris -0.7%. Frankfurt -1%.
Futures at 6:20, Dow -0.6%. S&P -0.5%. Nasdaq -1.4%. Crude -0.4% to $62.15. Gold -0.1% to $1312.80. Bitcoin +0.3% to $8223.
Ten-year Treasury Yield +1 bps to 2.86%

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Wall Street Breakfast: Divining The Quad Witching Session

Author: skywalker   |  Publish date: Fri, 16 Mar 2018, 08:38 AM

Stir the brew. It's quadruple witching day, which refers to the simultaneous expiration of stock-index futures, stock-index options, single-stock futures and stock options, which can lead to higher volatility for markets and more trading volume. The event happens four times a year - on the third Friday of March, June, September and December - but this time around the S&P Dow Jones predicts the rebalancing could force $23.1B of trades, up from around $18.6B a year ago.


"Tariffs could lead to a destructive trade war with serious consequences for U.S. economic growth and job creation," according to Chamber of Commerce President Thomas Donohue. "Tariffs of $30B a year would wipe out over a third of the savings American families received from the doubling of the standard deduction in tax reform. If the tariffs reach $60B... the impact would be even more devastating."

President Trump has decided to remove H.R. McMaster from the administration, according to The Washington Post, marking the second White House national security advisor to leave since Trump took office. "Just spoke to @POTUS and Gen. H.R. McMaster - contrary to reports they have a good working relationship and there are no changes at the NSC," tweeted Press Secretary Sarah Sanders, in response to the rumor.

The U.S. has accused the Russian government for a campaign of cyber attacks stretching back at least two years that targeted critical infrastructure, including energy, nuclear, water and commercial facilities. The Trump administration also hit targeted Russians with sanctions for alleged election meddling, prompting a swift threat of retaliation from Moscow, which said a response was being prepared ahead of presidential elections on Sunday.

"Saudi Arabia doesn't want to acquire any nuclear bomb, but without a doubt, if Iran developed a nuclear bomb, we will follow suit as soon as possible," Crown Prince Mohammed bin Salman told 60 Minutes. The kingdom already has plans to build 16 nuclear power reactors within 25 years, and the cost of the projects could reach $80B, a huge opportunity for the companies that build and operate nuclear plants.

Angela Merkel will reportedly push back against Emmanuel Macron's plans to overhaul the EU at a meeting in Paris this afternoon, reaffirming her skepticism over the pooling of fiscal resources and liabilities among eurozone members. The French president's pledge to strengthen the EU and buttress the foundations of its common currency was a core part of the message that led to his election last year.


China and Hong Kong are preparing to launch depository receipts. That would open the door to some of the country's top tech firms issuing a form of shares on the mainland, according to Shanghai Securities News. Further sources suggest that the guidelines for China depositary receipts (CDRs), similar to American depositary receipts, are likely to be finalized in the second half of this year. Related tickers: BABA, BIDU, JD, XI

With reports surfacing about a possible buyout of Broadcom (NASDAQ:AVGO) following its failed bid for Qualcomm (NASDAQ:QCOM), Intel (NASDAQ:INTC) CEO Brian Krzanich disclosed that it's not in the company's immediate interests. "I can't speak about rumors, but I can tell you we've made two big acquisitions with Altera and Mobileye. We're heads down on making those successful and right, and they're our growth engines for the future."

Another suitor? Former Qualcomm (QCOM) Chairman Paul Jacobs is seeking to partner with other investors to launch a takeover offer for the company, FT reports. While he's held talks with several investment firms, including SoftBank's (OTCPK:SFTBY) Vision Fund, so far he's been unable to secure the necessary financing and may face conflicts due to the latter's ownership of ARM Holdings (NASDAQ:ARMH). QCOM +4.4% premarket.

Steve Wynn may seek to sell some or all of his holdings in Wynn Resorts (NASDAQ:WYNN) now that he and ex-wife Elaine Wynn have scrapped an agreement preventing them from offloading their combined 21% stake. Wynn resigned last month as chairman and CEO of the casino operator following allegations that he had engaged in sexual misconduct against employees.

Citing delays in some business disposals, Deutsche Bank (NYSE:DB) is warning on costs for this year, even as Germany's largest lender said it expected revenues to rise for the full year. "We currently do not expect the planned €900M of cost savings to materialize in 2018," the bank said in its annual report for 2017. DB -0.5% premarket.

Healthineers started trading at €29.10 in its debut on the Xetra bourse in Frankfurt after shares were priced at the lower end of its guidance range and experienced an opening delay of 45 minutes. Siemens's (OTCPK:SIEGY) medical equipment unit would still be valued at €28B, making it one of Germany's biggest listings in recent years and one of the largest European IPOs this year.

Whistle blown at Walmart... The world's largest retailer has been sued by a former executive, Tri Huynh, who accused the company of issuing misleading e-commerce results and firing him for complaining about it. "Walmart (NYSE:WMT) cut corners and cheated in a race to expand and gain market-share," having been "desperate to gain the ground it had long lost to Amazon (NASDAQ:AMZN)."

Nike's No. 2 executive has resigned, setting off a management shuffle at the sportswear giant. Trevor Edwards, brand president and potential successor to CEO Mark Parker, will stay on as company advisor until his retirement from the company in August. Nike (NYSE:NKE) also disclosed that it recently received reports of "behavior occurring within our organization that do not reflect our core values."

In a dramatic statement out of Detroit, Ford (NYSE:F) announced it's going all-in on hybrids. 75% of its lineup will be replaced in the hybrid push, while the automaker will add four new trucks and SUVs. The news comes as UBER discusses the possibility of installing its self-driving systems in Toyota (NYSE:TM) minivan models, expanding its partnerships with outside companies.

Following a ruling by a federal judge, owners of Dodge Ram and Jeep Grand Cherokees across eight U.S. states can now proceed toward trial over allegations that their vehicle software was designed to hide emissions up to 20x the legal limit. The Michigan-based unit of Fiat Chrysler (NYSE:FCAU) was the first U.S. carmaker to be sued after VW (OTCPK:VLKAY) admitted to malfeasance in September 2015 in a scandal that eventually became known as Dieselgate.

New space race in the making... Vladimir Putin has announced a mission to Mars next year, followed by manned trips in a bid to colonize the Red Planet. NASA is also planning a mission - for the summer of 2020 - when the positions of the two planets relative to each other are optimal for a landing. Private companies are also in the mix, with SpaceX's (Private:SPACE) Mars rocket likely ready for test flights in 2019.

Meanwhile, the U.S. Air Force has awarded rocket launch competitors United Launch Alliance (BA, LMT) and SpaceX (SPACE) over half a billion dollars in new satellite contracts. Not over yet! There is another $10B in further Air Force contracts up for grabs to produce the 22 next-generation GPS III satellites. Lockheed won the first phase of the contract in 2008 but suffered delays due to issues with the navigation payload.

Thursday's Key Earnings

Adobe (NASDAQ:ADBE) +3.8% AH on strong subscriber growth.
Broadcom (AVGO) -1.8% AH despite FQ1 beat, Brocade buy.
Dollar General (NYSE:DG) +4.8% posting a solid holiday quarter.

Today's Markets

In Asia, Japan -0.6%. Hong Kong -0.1%. China -0.7%. India -1.5%.
In Europe, at midday, London +0.2%. Paris +0.2%. Frankfurt +0.6%.
Futures at 6:20, Dow -0.1%. S&P flat. Nasdaq -0.1%. Crude +0.4% to $61.41. Gold +0.2% to $1320.30. Bitcoin -1.7% to $8116.
Ten-year Treasury Yield flat at 2.81%

Today's Economic Calendar

8:30 Housing Starts
9:15 Industrial Production
10:00 Consumer Sentiment
10:00 Job Openings and Labor Turnover Survey
1:00 PM Baker-Hughes Rig Count


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Wall Street Breakfast: Unilever Abandons U.K. Headquarters

Author: skywalker   |  Publish date: Thu, 15 Mar 2018, 10:57 AM

Unilever is consolidating its headquarters in the Netherlands, abandoning a U.K. base it has maintained for nearly a century. While it looks like a Brexit blow to Theresa May, the move reflects "the fact that the Dutch NV represents 55% of the group's overall share capital and that the shares listed in the Netherlands are more liquid." Unilever (UL, UN) shares will still continue to be listed in London and New York.


The U.S. Senate has voted 67 to 31 to ease bank rules, bringing Congress a step closer to passing the first rewrite of the Dodd-Frank reform law enacted after the financial crisis. The bill spikes the asset level at which a bank becomes "systemically important" from $50B to $250B and exempts banks with less than $10B in assets from rules banning proprietary trading.

Inputting the numbers from yesterday's soft retail sales print for February, the Atlanta Fed tracker now sees just 1.9% Q1 GDP growth. That's down from 2.5% a few days ago, about 4% a month ago, and above 5% six weeks ago. Had the original forecast stuck, it would have been the best quarter since the Great Recession ended in mid-2009.

Larry Kudlow has agreed to take the job of top economic advisor to President Trump, replacing Gary Cohn. "We don't agree on everything, but in this case I think that's good," Trump said earlier this week. "I want to have different opinions. We agree on most. He now has come around to believing in tariffs as a negotiating point."

The U.S. solar industry installed 10.6 gigawatts of new photovoltaic capacity in 2017, according to the U.S. Solar Market Insight Report, put together by GTM Research and the SEIA. The number, while still considerable, represents a 30% fall year-on-year from 2016. The study also predicts installations between 2018 and 2022 to be 13% lower than originally forecast due to U.S. tariffs on panel imports and new federal tax laws.

"Gas demand is set to rise again from the end of the week across north-western Europe," according to a report from S&P Platts. "Russian gas supplies are considered the only swing source of gas under current conditions. Domestic production and other import sources are effectively maxed out." Worries for the U.K.? Russia has already called the expulsion of 23 diplomats "shortsighted" and said "response measures will not be long in coming."

Global oil demand is expected to pick up more quickly this year, but supply is still growing at a faster pace leading to a rise in inventories in Q1 of 2018, according to the IEA's latest monthly report. Crisis-hit Venezuela could soon tip the crude market "decisively into deficit," added the Paris-based organization, while warning that a trade war would have "strong consequences" for oil demand.


Sign of the times? The biggest radio broadcaster in the U.S. - with almost 850 stations - has filed for bankruptcy protection amid competition from on-demand streaming services and stagnating ad revenue. The agreement with holders of more than $10B of its outstanding debt and financial sponsors will see iHeartMedia (OTCPK:IHRT) continue daily operations during its restructuring process.

Shakeup in the Mouse House! Walt Disney (NYSE:DIS) is reorganizing itself into four segments to focus its businesses on internet streaming services and merchandising. It comes as the media firm prepares to ingest most of 21st Century Fox (NASDAQ:FOXA) and will spark fresh questions about who will succeed CEO Bob Iger if he leaves after his newly extended contract ends in 2021.

"Prime Originals" appear to be paying off. Amazon's (NASDAQ:AMZN) top television shows drew more than 5M people worldwide to its Prime shopping club by early 2017, according to company documents reviewed by Reuters. They also revealed Amazon's total U.S. audience. Customers for all video programming on Prime, including films and TV shows it licenses from other companies, were about 26M.

Meanwhile, Amazon Japan has been raided by the country's antitrust regulator on allegations of asking vendors for a percentage of their sales revenue, or "cooperation payments," starting in 2017. The online retailer is also being investigated for asking suppliers to shoulder part of the cost incurred from selling their products at a discount on Amazon Japan (AMZN).

U.S. regulators are preparing to sanction Wells Fargo (NYSE:WFC) for receiving commissions on auto insurance policies it helped force on more than half a million drivers. That will form the backbone of fresh penalties against the bank, sources told Reuters. Wells is investigating the auto insurance abuses back to 2005 and estimates it will need to refund $145M to borrowers, and adjust account balances by another $37M.

The next in line to be CIO at Equifax (NYSE:EFX), Jun Ying, exercised all of his vested stock options and then sold the shares after learning of the company's massive data breach. According to the SEC, that led him to reap proceeds of nearly $1M, while avoiding losses of more than $117K by selling prior to the disclosure. Late last year, a special committee of the board cleared four executives of trading on insider knowledge.

The SEC has also charged Elizabeth Holmes, founder of flameout Theranos (Private:THERA), and former President Ramesh Balwani with "massive fraud." The pair is said to have exaggerated the amount of money the company was going to generate in 2014 by a factor of 1,000. Holmes must now return her 18.9M shares, pay a $500K fine and cannot serve as an officer or director of a public company for 10 years.

Tesla is manufacturing a surprisingly high ratio of flawed parts and vehicles, several current and former employees told CNBC, leading to more rework and repairs than can be contained at its factory in Fremont, California. The result has been a delay to the Model 3 production timeline. Tesla (NASDAQ:TSLA) shares closed down 4.5% on Wednesday following the news.

General Electric has begun flight trials of the world's largest jet engine after several delays caused by technical problems. The GE9X will power the Boeing (NYSE:BA) 777-9 and 777-8, which are scheduled to enter service in 2020 and 2022, respectively. Despite the problems, GE feels "very confident" it will meet a 2019 target date for safety certification.

Reports are suggesting blown engines as two naval aviators have been declared dead after their F/A-18 Super Hornet crashed off the coast of Key West, Florida. "The cause of the mishap is currently under investigation," according to the U.S. Navy. During a visit to a Boeing (BA) facility on Wednesday, President Trump called the fighter plane a work of "art," and said that he's working with Congress to fund 24 new jets.

Today's Markets

In Asia, Japan +0.1%. Hong Kong +0.3%. China flat. India -0.4%.
In Europe, at midday, London +0.1%. Paris +0.2%. Frankfurt +0.2%.
Futures at 6:20, Dow +0.2%. S&P +0.1%. Nasdaq flat. Crude flat at $60.98. Gold -0.2% to $1323.20. Bitcoin -1.2% to $8100.
Ten-year Treasury Yield flat at 2.81%

Today's Economic Calendar

8:30 Initial Jobless Claims
8:30 Philly Fed Business Outlook
8:30 Empire State Mfg Survey
8:30 Import/Export Prices
9:45 Bloomberg Consumer Comfort Index
10:00 NAHB Housing Market Index
10:30 EIA Natural Gas Inventory
4:00 PM Treasury International Capital
4:30 PM Money Supply
4:30 PM Fed Balance Sheet


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Wall Street Breakfast: Latest Bite In The Grocery Wars

Author: skywalker   |  Publish date: Wed, 14 Mar 2018, 08:21 AM

Walmart is expanding its online grocery delivery service to a total of 100 metropolitan areas by the end of the year, up from six currently, a push that will help the retailer reach 40% of American households. Orders will be packed by Walmart (NYSE:WMT) employees before they are handed off to delivery companies, a costly model it previously resisted as Amazon (NASDAQ:AMZN), Kroger (NYSE:KR) and Target (NYSE:TGT) invest in similar services.


Crude is back over $61/barrel following the firing of Secretary of State Rex Tillerson. Some assume that will clear the way for President Trump to make good on his promise to withdraw from the Iran nuclear deal, which is theoretically bullish for oil, as sanctions would be reinstituted against the Islamic Republic. Saudi Arabia and others still have enough spare capacity to make up for any deficit.

Democrat Conor Lamb is the apparent winner of a House seat in Pennsylvania's 18th congressional district, a region President Trump won by 20 percentage points in 2016. Lamb was said to have only won by a few hundred votes, so it's possible that there may be a recount ordered. The election was watched nationwide as a sign of political tides eight months ahead of congressional elections.

The U.S. government has hit the Canadian forestry industry with more duties after finding that exporters underpriced uncoated groundwood paper by as much as 22.16% and will collect cash corresponding to those rates. "President Trump made it clear from the beginning that we will vigorously administer our trade laws to provide U.S. industry with relief from unfair trade practices," said Commerce Secretary Wilbur Ross.

Shares in Asia buckled under pressure overnight despite positive economic data out of China. Industrial output grew 7.2% in January-February, while fixed-asset investment expanded 7.9% and retail sales rose 9.7%. Equities seemed to be nervous over impending U.S. tariffs, which may now target up to $60B worth of goods, as well as punitive measures against intellectual property theft.

"We currently see inflation converging toward our aim over the medium term, and we are more confident than in the past this convergence will come to pass," Mario Draghi told the the annual ECB and Its Watchers conference. "But we still need to see further evidence that inflation dynamics are moving in the right direction. So monetary policy will remain patient, persistent and prudent."

Theresa May is preparing to set out a range of reprisals against Russia after a midnight deadline passed for the Kremlin to explain why a former spy was poisoned by a Russian-manufactured nerve agent. Maria Zakharova, Russian foreign affairs ministry spokeswoman, said Britain must not try to threaten Moscow and announced that there would be retaliation against any fresh sanctions.


Singapore-based Broadcom is still pressing on with a plan to move its base to the U.S. despite President Trump blocking its bid for Qualcomm (NASDAQ:QCOM) on national security grounds, Reuters reports. It will cost the company about $500M a year under a higher tax rate, but Broadcom (NASDAQ:AVGO) believes the relocation will allow it to make acquisitions of U.S. companies that will not fall within the jurisdiction of CFIUS.

Following a similar hard-line approach taken by Facebook (NASDAQ:FB), Google (GOOG, GOOGL) will ban crypto-related advertising starting in June, including ICOs, wallets, and trading advice across any of its platforms. "We don't have a crystal ball to know where the future is going to go with cryptocurrencies, but we've seen enough consumer harm or potential for consumer harm," said Scott Spencer, Google's director of sustainable ads.

Coinbase has obtained a bank account with U.K. lender Barclays (NYSE:BCS) in a move that will make it easier for British customers to use its product. The deal marks the first major partnership between a U.K. bank and a cryptocurrency exchange. Coinbase, which has nearly 12M users, was also granted an e-money license by the U.K.'s Financial Conduct Authority.

President Trump will visit a Boeing (NYSE:BA) plant in St. Louis today to tout the impacts of the tax overhaul bill signed into law in December. The stop comes amid recent steel and aluminum tariffs that may make the iconic American planemaker a vulnerable target for retaliation. Boeing employs 137K people in the U.S., nearly as many workers as the entire primary steel and aluminum industries.

State-run Korea Development Bank has agreed to provide short-term loans to GM Korea after April. However, the agreement is conditional on the automaker cooperating with due diligence, which started in earnest today and will continue for two months. General Motors' South Korean unit has previously said that without new funding from its major shareholders it would have a first-quarter "cash crisis."

Volkswagen has secured €20B in battery supplies to underpin an aggressive push into electric cars in the coming years, ramping up pressure on Tesla (NASDAQ:TSLA) as it struggles with production issues for its Model 3. VW (OTCPK:VLKAY) is committed to electrifying all of its brands by 2030, with 30 new plug-in hybrids and 50 new battery electric vehicles due by that date.

A Senate Commerce subcommittee has set a March 20 hearing on the largest-ever recall in automotive history that some lawmakers say is moving too slow. It will include the independent monitor of the Takata (OTCPK:TKTDQ) recall program, as well as representatives from Honda (NYSE:HMC), Ford (NYSE:F) and the NHTSA. Takata will have recalled almost 125M vehicles worldwide by 2019 for its inflators that can explode with excessive force.

Blow to the toy industry... After more than half a century in business, Toys "R" Us could file a court motion for its liquidation plan by the end of today, resulting in the closing of all 800 stores in the U.S. Shares of Mattel (NASDAQ:MAT) have dropped 8% since reports that the retailer was weighing a bankruptcy filing in September, while rival Hasbro's (NASDAQ:HAS) stock has shed almost 5%.

Amazon has launched its first-ever debit card in Mexico as the local e-commerce sector gains in popularity. "Clients that don’t have a credit or debit card will find Amazon Rechargeable an easy and practical way to convert cash into a payment method," said Fernando Ramirez, Amazon's (AMZN) product manager in Mexico. According to a 2017 government report, less than a third of adults in Mexico have credit cards.

Netflix is in the early stages of developing a news show similar to CBS's 60 Minutes and ABC's (NYSE:DIS) 20/20. A hole in the market was spotted for a "current affairs TV show encompassing both sides of the political divide," a source told MarketWatch. Netflix (NASDAQ:NFLX) is expected to spend roughly $8B on content in 2018 to fund 700 shows and films, rising to $12.2B in 2020.

Looking to halt the spread of misinformation, YouTube (GOOG, GOOGL) is introducing a new tool to combat online conspiracy theories and divisive content. Videos about "widely accepted events" will include "information cues" - a text box that links to third-party sources including Wikipedia. "These features will be rolling out in the coming months," according to a YouTube spokeswoman.

Today's Markets

In Asia, Japan -0.9%. Hong Kong -0.5%. China -0.6%. India -0.1%.
In Europe, at midday, London +0.3%. Paris +0.3%. Frankfurt +0.2%.
Futures at 6:20, Dow +0.4%. S&P +0.3%. Nasdaq +0.4%. Crude +0.6% to $61.08. Gold -0.1% to $1325.20. Bitcoin -4.7% to $8716.
Ten-year Treasury Yield flat at 2.85%

Today's Economic Calendar

7:00 MBA Mortgage Applications
8:30 Producer Price Index
8:30 Retail Sales
10:00 Atlanta Fed's Business Inflation Expectations
10:00 Business Inventories
10:30 EIA Petroleum Inventories


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Wall Street Breakfast: CPI Comes On By

Author: skywalker   |  Publish date: Tue, 13 Mar 2018, 08:51 AM

The consumer price index will likely be a sleeper for investors today, but if it's not, interest rates could spike and equities might sell off. It's expected to come in at 0.2% M/M for both headline inflation and core, which excludes energy and food, or 2.2% and 1.9% Y/Y. A CPI figure that misses or meets estimates is likely to reaffirm the case for just three rate hikes in 2018, but rising inflation could get the Fed, which meets next week, to change its forecasts.


U.K. Treasury chief Philip Hammond is due to present his Spring Statement today, but it's the first time the event will not feature the traditional "red box" and budget, which has been moved to the autumn. Britain's economy is in better shape than forecast, he's expected to say, while arguing that the U.K.'s national debt is still far too high and the need for fiscal prudence ahead of Brexit.

The OECD has released new forecasts for growth in major economies, raising its projections for the U.S. in response to the tax and spending bills passed in recent months. While the agency didn't incorporate the impact of new U.S. tariffs into its "Interim Economic Outlook," it joined other organizations and governments in warning of the dangers posed by a trade conflict.

China has unveiled plans for overhauling government bureaucracy, combining some financial, competition and business regulators as part of President Xi's efforts to strengthen Communist Party control over levers of power. Since the beginning of last year, Beijing has cracked down on leverage and risky market practices, with Chinese regulators releasing many new rules in an attempt to rein in risks.

The House Intelligence Committee has ended its yearlong interference probe into the 2016 U.S. presidential election, discovering "no evidence of collusion" between the Trump campaign and Russia. Separately, Republican Rick Saccone and Democrat Conor Lamb are said to be neck-and-neck ahead of today's special election for Pennsylvania's 18th congressional district, a region Trump won by 20 percentage points in 2016.

Larry Kudlow is the leading contender to head the White House National Economic Council and would take the job if offered it, according to several sources. His emergence is notable because he publicly came out against President Trump's tariffs on steel and aluminum - the plan that proved the last straw for Gary Cohn, who resigned on March 6.

Canada's exemption from U.S. metal tariffs have nothing to do with talks on the NAFTA, Canadian Prime Minister Justin Trudeau told CNBC, but he thanked President Trump for the "special consideration." The EU is not mincing any words, however, as French finance minister Bruno Le Maire said member states should form a united response and could even retaliate alongside nations from outside Europe.


Blocked! "There is credible evidence that leads me to believe that Broadcom (NASDAQ:AVGO)... through exercising control of Qualcomm (NASDAQ:QCOM)... might take action that threatens to impair the national security of the U.S.," reads an order issued by CFIUS and signed by President Trump. "All 15 individuals listed as potential candidates filed by Broadcom... are also hereby disqualified from standing for election as directors of Qualcomm." QCOM -5% premarket.

Apple closed at an all-time high on Monday, briefly surpassing an intraday market cap of $925B for the first time. It comes after Apple Music (NASDAQ:AAPL) hit 38M paid subscribers, up 2M from last month, and signed on its first animated series show from Loren Bouchard, creator of Bob's Burgers. Apple also acquired digital magazine subscription app Texture for an undisclosed amount.

General Electric did not pay cash bonuses last year to its senior executives for the first time in the company's 126-year history. John Flannery, who took over as CEO on Aug. 1 with a $2M annual salary, received $9M in total compensation for 2017, including stock options and changes in values in his pension plan. Former GE CEO Jeff Immelt received $8.1M in total compensation, down from $21.3M in 2016.

Women working in U.S.-based technical jobs at Microsoft (NASDAQ:MSFT) filed 238 internal complaints about gender discrimination or sexual harassment between 2010 and 2016, according to court filings that were just made public. The figure was cited by plaintiffs suing the world's largest software company for systematically denying pay raises or promotions to women. Microsoft denies it had any such policy.

Data breach victims can sue Yahoo - meaning, Verizon (NYSE:VZ) - in the U.S., according to U.S. District Judge Lucy Koh. Yahoo has been accused of being too slow to disclose three data breaches in 2013 and 2016 that compromised 3B users, increasing the risk of identity theft and requiring them to spend money on credit freeze, monitoring and other protection services.

Overheated tech market? Dropbox (Pending:DBX) has offered a $16-$18 price range for shares in its IPO set for Friday that would value the cloud storage company at up to $7.1B, nearly a third below the valuation it commanded in 2014. Investors are carefully watching Dropbox for signs of how other highly valued tech companies will be received by the public markets.

Saudi Arabia is increasingly looking to just float Aramco (Private:ARMCO) locally, Reuters reports, as the kingdom counts on being awarded emerging market status by MSCI in June to help attract international funds. Saudi Energy Minister Khalid al-Falih said last week that Aramco was too important to risk listing in the U.S. because of litigation concerns, like existing climate change lawsuits against rival oil companies.

A "shared sacrifice" is needed to fix GM Korea, President Dan Ammann told Reuters. "It's a classical restructuring where everybody needs to contribute something," while unions and the South Korean government need to quickly agree on a restructuring. Nearly 2T won ($1.88B) of GM Korea's debts to its parent are due by end-March or early April.

Airbnb for cars? General Motors (NYSE:GM) is also planning to start a pilot program this summer through its Maven car-sharing unit that will enable car owners to rent out their vehicles when they aren't using them, Bloomberg reports. GM will try to grow the pilot into a full-fledged business if it's successful, marking another step towards transitioning from manufacturer to mobility provider.

The world's first commercial autonomous flying taxi service is hitting the runway in New Zealand. The venture has been unveiled by Prime Minister Jacinda Ardern, alongside Zephyr Airworks, the local operator of Kitty Hawk, which is backed by Alphabet (GOOG, GOOGL) CEO Larry Page. The self-flying taxi called Cora has a dozen lift fans - all powered by batteries - for vertical take-off and landing, and can fly about 62 miles and carry two passengers.

Today's Markets

In Asia, Japan +0.7%. Hong Kong flat. China -0.5%. India -0.2%.
In Europe, at midday, London flat. Paris +0.4%. Frankfurt +0.2%.
Futures at 6:20, Dow +0.3%. S&P +0.2%. Nasdaq +0.1%. Crude +0.3% to $61.54. Gold -0.2% to $1318.60. Bitcoin -1% to $9021.
Ten-year Treasury Yield +1 bps to 2.88%

Today's Economic Calendar

6:00 NFIB Small Business Optimism Index
8:30 Consumer Price Index
8:55 Redbook Chain Store Sales
1:00 PM Results of $13B, 30-Year Note Auction


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Wall Street Breakfast: Jobs Data Brings On Risk Appetite

Author: skywalker   |  Publish date: Mon, 12 Mar 2018, 10:10 AM

Shares across the globe are starting the week with a bounce after a strong U.S. jobs report seemed to erase any potential concerns investors may have had about a looming trade war or inflation. Friday also marked the nine-year anniversary of the current bull market for U.S. stocks, which have logged more than 108 months without posting a decline of 20% that marks a retreat into bear territory.


The EU and Japan pressed the U.S. to exempt them from steel and aluminum tariffs on Saturday as the three sides met in Brussels as part of a trilateral effort to combat unfair trade practices. There was "no immediate clarity on the exact U.S. procedure for exemption however, so discussions will continue next week," EU Trade Commissioner Cecilia Malmstrom announced after the meeting.

President Trump is strongly considering Christopher Liddell, a former executive at Microsoft (NASDAQ:MSFT) and General Motors (NYSE:GM), to succeed his departing top economic adviser, Gary Cohn. Liddell is currently the White House's director of strategic initiatives and has worked closely with Jared Kushner on efforts to streamline and update government functions.

The recent volatility in global financial markets should not deter top central banks from lifting interest rates or ending years of unprecedented stimulus, according to the Bank for International Settlements. "Some volatility is healthy" after the "insidious... illusion of permanent calm," said the central bank of central banks, but those fears and trade war worries are making the "delicate task" of trying to normalize policy more complicated.

Japan's big political scandal just got worse. The finance ministry has admitted to tampering with records to remove references to Shinzo Abe, his wife and finance minister Taro Aso that related to a questionable real estate deal which became public last year. Abe has previously said he would resign if he or his wife were shown to be involved in heavily cutting the price of public land sold to a school operator in Osaka.

China's rubber-stamp parliament has passed a series of constitutional amendments, including one that removes presidential term limits, allowing President Xi to remain in office indefinitely. It comes after the U.S. reportedly asked China to import more cars, aircraft, soybeans and natural gas as part of a plan to cut its bilateral trade deficit by $100B and avoid placing tariffs on Chinese imports.

It's unlikely Greece will require a precautionary credit line after its bailout ends in August, according to the head of the European Stability Mechanism. "But it very much depends whether it's really needed," declared Klaus Regling. "If everything remains quiet, reforms continue and Greece continues to develop its market access, then based on what we know today it's probably not needed."

A new Polish law banning almost all trade on Sundays has taken effect, with supermarkets and most other retailers closed for the first time since liberal shopping laws were introduced in the 1990s. In Hungary, another ex-communist country, a ban on Sunday trade imposed in 2015 was so unpopular that authorities repealed it the next year. Elsewhere in Europe, including Germany and Austria, people have long been accustomed to a day of commercial rest.

Six decades of rule by the Castros is coming to an end in Cuba as the nation of 11M went to the polls on Sunday for pre-selected ruling party candidates to fill the 600-plus seat National Assembly. The members will then choose a successor to President Raul Castro when he steps down next month. All signs point to Miguel Diaz-Canel, current first vice president who is expected to stick to Cuba's economic and political path.


Longtime Dow Chemical leader Andrew Liveris will step down next month, ending a nearly 14-year tenure that culminated with the company's combination last year with rival DuPont. Jim Fitterling, current COO of DowDuPont's (NYSE:DWDP) material sciences division, will take on the role of Dow CEO after the firm's breakup next year into three units: agriculture, specialty products and material sciences.

The IPO of Saudi Aramco could be delayed from this year until 2019 at the earliest, with advisors struggling to arrive at the $2T valuation sought by Crown Prince Mohammed bin Salman, FT reports. The wait could also represent a setback to Saudi efforts in reforming its economy, as the Aramco (Private:ARMCO) listing, which would likely be the world's biggest IPO, is seen as a linchpin of its strategy.

South Korea held an initial meeting today for its due-diligence of General Motors' (GM) local unit to decide whether to provide funds for the troubled operations. GM said last month it would shut one of its factories in South Korea and decide on the fate of the three remaining plants in the coming weeks, unless it received government support and wage concessions from unions.

Tesla has confirmed a temporary Model 3 production suspension during a week in late February as it targets 2,500 units per week by the end of the first quarter and 5,000 a week by the end of Q2. "These periods are used to improve automation and systematically address bottlenecks in order to increase production rates. This is common in production ramps like this," said a Tesla (NASDAQ:TSLA) spokesperson.

Top managers at Deutsche Bank will forgo their annual bonuses, according to CEO John Cryan, after coming under fire for awarding big incentive payouts despite the bank's third annual loss in 2017. Variable compensation will still be paid to other staff as planned. Deutsche Bank (NYSE:DB) will release more details when it publishes its annual report on Friday.

Thomson Reuters is launching a bitcoin sentiment gauge for crypto traders, with a new version of its MarketPsych Indices scanning over 400 websites to capture market-moving sentiment and themes. "News and social media are driving the investment and risk management process more than ever with the continuing rise of passive and quant-driven trading," said Thomson Reuters' (NYSE:TRI) Austin Burkett.

Black Panther is continuing its winning streak. This weekend it crossed the $1B global box office mark in just 26 days of release, with a little help from a solid Friday debut in China, making it Disney's (NYSE:DIS) 16th movie to hit the milestone, as well as the fifth Marvel film. Black Panther's U.S. total is also good enough for ninth-biggest film of all time.

Pricing pressures in the drug industry... Regeneron (NASDAQ:REGN) and Sanofi (NYSE:SNY) are willing to grant discounts of up to 69% for their potent cholesterol drug if insurers and PBMs expand their coverage of the medicine. That would bring Praluent's net price within a range of $4,500 to $8,000 annually per patient, down from its list price of $14,600. The drug had U.S. sales of $131.4M in 2017.

The DOJ formally submitted a regulation on Saturday to ban "bump stocks," a modification to rifles that lets them fire automatically. The White House also pledged help from the Justice Department for training armed American teachers and adopting so-called "red flag" laws, but dropped an earlier idea of raising the age limit on gun purchases from 18 to 21. Related tickers: AOBC, RGR

Israel is selling state-owned IMI Systems, maker of the Uzi submachine gun, to Elbit Systems (NASDAQ:ESLT) in a deal that would likely see the latter top Israel Aerospace Industries as the country's biggest defense contractor. The sale price was set at NIS 1.8B ($520M), with an added NIS 100M ($29M) to be paid by Elbit later if IMI reaches specified overseas sales goals in 2018.

"I think we will be able to do short flights, short up and down flights, probably in the first half of next year. This is a very big booster and ship," said SpaceX (Private:SPACE) CEO Elon Musk, commenting on an upcoming Mars mission. The rocket system (codenamed BFR) is also expected to have the capability of return trips to the Moon with in-space refueling and space station resupply missions.

Today's Markets

In Asia, Japan +1.8%. Hong Kong +1.9%. China +0.6%. India +1.8%.
In Europe, at midday, London flat. Paris +0.2%. Frankfurt +0.8%.
Futures at 6:20, Dow +0.4%. S&P +0.3%. Nasdaq +0.6%. Crude -0.5% to $61.71. Gold -0.5% to $1317.90. Bitcoin +3.1% to $9827.
Ten-year Treasury Yield flat at 2.89%

Today's Economic Calendar

11:30 Results of $28B, 3-Year Note Auction
1:00 PM Results of $21B, 10-Year Note Auction
2:00 PM Treasury Budget


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