Wall Street Breakfast: ECB Meeting Takes Center Stage
Author: skywalker | Publish date: Thu, 9 Mar 2017, 08:09 PM
The ECB is set to keep monetary policy on hold today as it casts a nervous eye ahead of upcoming elections in France, the Netherlands and the first meeting of G20 finance leaders since President Trump took office. While the economic data is picking up, Mario Draghi is likely to keep arguing the inflation surge is temporary, growth is fragile, and the outlook is clouded with risks, though he might bump up some forecasts or tweak guidance.
Scotland's First Minister Nicola Sturgeon said autumn next year would be the "common sense" time for a second Scottish independence referendum - the clearest signal yet that she is to demand a vote be staged before Brexit. No final decision has yet been made, but Sturgeon is expected to make an announcement about another vote at next week's SNP conference.
President Trump is pushing his White House team to craft a $1T infrastructure spending plan that would pressure states to streamline local permitting, WSJ reports. He suggested a 90-day deadline to start projects and said they would be financed through public and private capital. Meanwhile, the ADP released a blowout employment report yesterday, stating a whopping 298K new jobs were added in February (it beat expectations by more than 100K).
Hawaii has become the first state to sue to stop President Trump's revised travel ban, which places restrictions on travelers from six Muslim-majority countries. It also sued over the initial executive order, but the lawsuit was put on hold while other cases played out across the country. Fallout? Emirates President Tim Clark said bookings at the airline have fallen by 35% since the ban.
Oil prices fell again this morning following a steep 5% drop in the previous session after a surge in U.S. crude inventories dragged on sentiment. Stocks in the U.S., the world's top oil consumer, surged last week by 8.2M barrels, handsomely beating forecasts of a 2M barrel build. WTI crude is now down 2.1% to $49.25/bbl, trading below $50 for the first time since mid-December.
"All options are on the table" to deal with North Korea, declared Nikki Haley, U.S. Ambassador to the United Nations, adding: "We are making those decisions now and we will act accordingly." According to Reuters, the Trump administration is also weighing a deployment of up to 1,000 American soldiers to Kuwait to serve as a reserve force in the fight against ISIS.
Prices in China rose less than expected in February, marking the third piece of Chinese data that raised eyebrows this week. The consumer price index inched up 0.8% Y/Y, while the producer price index soared 7.8%, following an unexpected jump in forex reserves and a rare trade deficit. Lunar New Year distortions may mean investors will have until March data is released.
The leader of South Korea's Samsung Group (OTC:SSNLF), Jay Y. Lee, has denied all of a special prosecutor's charges against him, his lawyer said at the opening of a hearing against him. The case - dubbed "the trial of the century" by local media - could influence future investigations on other C-suite leaders accused of crony capitalism in Asia's fourth-largest economy.
Westinghouse Electric Co., the U.S. nuclear power plant developer owned by Toshiba (OTCPK:TOSYY), has brought in bankruptcy attorneys from law firm Weil Gotshal & Manges LLP, sources told Reuters. The move comes after a $6.3B writedown last month wiped out Toshiba's shareholder equity and caused it to seek divestments to create a buffer for any fresh financial problems.
Faced with a challenging retail environment and an unsatisfying partnership with Sprint (NYSE:S), RadioShack (NYSE:RSH) has filed for bankruptcy for the second time in a little over two years. RadioShack will close approximately 200 stores and evaluate options on the remaining 1,300, while several hundred locations will be converted into Sprint corporate-owned stores.
Altice has reported a 16% jump in quarterly core operating profit, but gave no update on whether it might list its U.S. business. An IPO would help tycoon Patrick Drahi expand his budding U.S. cable empire by giving its subsidiary public stock that could be used as currency to finance more acquisitions. Sources previously said Altice USA (OTCPK:ATCEY) could go public sometime in 2017.
Mexico's telecommunications regulator has stepped up antitrust rules against America Movil (NYSE:AMX), including ordering it to separate out part of its fixed-line infrastructure. Controlled by billionaire Carlos Slim, the company has been subject to tougher regulations since 2014 as part of a sweeping sector reform aimed at making the market more competitive.
While investors debate whether Tesla's (NASDAQ:TSLA) transformation from electric carmaker to sustainable energy company will pay off, its battery systems are already having an impact on at least one state. Tesla has installed 272 power packs - that will draw energy from 54,978 solar panels - to provide power to the Hawaiian island of Kauai at night. The project is expected to reduce diesel fuel usage by 1.6M gallons per year.
General Electric CEO Jeffrey Immelt received a $21.3M compensation package last year, down 35% Y/Y, as the company's shares underperformed the S&P amid the oil market slump that held back demand for industrial equipment. Immelt got a $3.8M salary and $5.94M in cash awards, as well as restricted and performance-linked shares worth $4.67M and $2.14M in GE stock options.
As part of a plan to reshape its business, Royal Dutch Shell is selling its oil sands interests in Canada in a two-part deal worth $7.25B. It will offload stakes and reduce its share in the Athabasca Oil Sands Project for $8.5B in shares and cash, while jointly purchasing Marathon Oil Canada Corporation (NYSE:MRO) with Canadian Natural Resources (NYSE:CNQ) for $1.25B. RDS.A, RDS.B -2% premarket.
ExxonMobil has emerged as the buyer for a 25% indirect stake in Eni's (NYSE:E) Mozambique operations after weeks of speculation the Texan oil giant was the frontrunner. The agreed terms include a cash price of approximately $2.8B. In separate news, ExxonMobil (NYSE:XOM) CEO Darren Woods will meet with Russia's Vladimir Putin today. E -1% premarket.
No chemical love? Akzo Nobel (OTCQX:AKZOY) has rejected an unsolicited takeover bid from U.S. rival PPG Industries (NYSE:PPG), saying the €20.9B offer "undervalued" the company. The Dutch paints and coatings maker is instead considering floating or selling its Specialty Chemicals business, which had €4.8B in sales in 2016.
Uber news roundup... UBER self-driving cars are back on California streets, after a public spat with regulators last year. The company has also prohibited the use of its "Greyball" technology, ending a program that had been critical in helping Uber evade authorities. Encroaching on its territory? Apple-backed (NASDAQ:AAPL) rival Didi Chuxing (Private:DIDI) just opened an R&D center in Silicon Valley.
Months after Roger Ailes left Fox News Channel (FOX, FOXA) under a cloud of accusations of sexual harassment, the cable network is still dealing with matters of a similar nature. Former contributor Tamara Holder has reached a settlement worth more than $2.5M, NYT reports, while the executive she claimed sexually assaulted her, Fox News Latino VP Francisco Cortes, was fired after an investigation.
Republicans in Congress are moving to repeal regulations adopted by the Obama administration in October that would have subjected internet service providers to stricter scrutiny than websites to protect customers' private data. Last week, the FCC temporarily blocked some of the rules from taking effect, a victory for internet providers such as AT&T (NYSE:T), Comcast Corp (NASDAQ:CMCSA) and Verizon (NYSE:VZ).
The investor group led by Edgar Bronfman Jr. has walked away from its bid for venerable publisher Time Inc. (NYSE:TIME), according to media reports. That would appear to leave Meredith (NYSE:MDP), publisher of Family Circle, Shape and Better Homes and Gardens, in the driver's seat, if it's still interested. Meredith had explored a combination with Time in 2014. TIME +1.1% premarket.
In Asia, Japan +0.3%. Hong Kong -1.1%. China -0.6%. India +0.1%.
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