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Author: skywalker   |   Latest post: Fri, 25 May 2018, 09:21 AM


Wall Street Breakfast: Push To Repeal Net Neutrality

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Net neutrality is in focus as the FCC gears up for a vote today that will likely roll back one of the signature Internet policies from the Obama-era. Chairman Ajit Pai maintains that current rules went too far in imposing stifling regulatory burdens on broadband providers, while consumer advocates and tech firms feel they protect Internet users and website owners. Related stocks: CMCSA, CVC, T, VZ, NFLX, CTL, CHTR, FTR, ELNK, DISH, CCOI


Following Wall Street's worst day of 2017... Global equities took another hit overnight after Reuters reported at least 18 calls between Russian officials and advisers to the Trump campaign (including Michael Flynn) during the last seven months of the presidential election. The DOJ has meanwhile appointed former FBI Director Robert Mueller as special counsel to oversee the Russia investigation, adding pressure on President Trump and turmoil to Capitol Hill.

Looking to calm some of the storm, President Trump on Wednesday met with four candidates to lead the FBI, including Acting Director Andrew McCabe, former Sen. Joe Lieberman, former Oklahoma Gov. Frank Keating and ex-FBI official Richard McFeely. Trump has promised a "fast decision" for a new director, telling reporters on Saturday that he thinks "the process is going to move quickly."

Japan's economy picked up speed in the first three months of 2017, extending its most recent stretch of growth under Shinzo Abe to five quarters and marking the longest expansion in a decade. Stronger global demand, especially for tech-related items, and an improvement in household spending helped GDP beat forecasts and rise 2.2% on an annualized basis.

Details on China's "One Belt, One Road" initiative remain scarce, but Pakistani newspaper Dawn has given a look into how comprehensive it really is. Beijing is set to invest more than $55B in its neighbor, building power plants, roads and railways that connect China to the Arabian Sea. The projects could account for 20% of the country's GDP over the next five years and boost growth by about 3 percentage points.

"I believe profoundly in the overhaul of the Europe," French President Emmanuel Macron told reporters last night, before meeting with the European Council President and stating he was "counting" on him for the revamp. "Europe needs your energy, imagination and courage," Donald Tusk responded. "Hope for a Europe that protects, wins and looks to the future."

A fresh political crisis is hitting Brazil, reminiscent of last year's impeachment saga, following reports that President Temer was secretly recorded discussing hush money pay-offs to a jailed associate. According to O Globo, the tapes were presented to prosecutors as part of a plea bargain by Joesley and Wesley Batista, brothers who run the country's biggest meat-packing firm JBS (OTCQX:JBSAY).

Is the Iran deal still intact? The Trump administration has taken a step to adhere to the nuclear agreement by signing a sanctions waiver for Tehran, as stipulated in the pact. At the same time it's ratcheting up other sanctions related to human rights abuses and the country's ballistic missile program a day ahead of elections across the Islamic Republic.


Apple is tapping the debt market again, issuing a dual-tranche euro denominated bond, even as it maintains a cash pile of over $250B. Pricing for the 8- and 12-year note is expected to be finalized today, while order books for the bonds are said to have surpassed €5B. "We intend to use such net proceeds for general corporate purposes," Apple (NASDAQ:AAPL) said in an SEC filing.

Calling it a "proportionate and deterrent fine," the European Commission has slapped Facebook (NASDAQ:FB) with a €110M penalty for providing "misleading information" about its purchase of WhatsApp in 2014. Facebook had said it could not automatically match user accounts on its namesake platform and WhatsApp but two years later launched a service that did exactly that.

Today also marks the five-year anniversary of Facebook's (FB) IPO. In case you don't remember, it didn't go smoothly. Shares began trading late and investors complained their orders weren't confirmed, leading to lawsuits and big banks cutting estimates. While many analysts at the time thought shares were overvalued, Facebook has returned over 256% since its IPO and now has a market cap of nearly $420B.

Plagued by inappropriate behavior and a troubling culture, Fox News (FOX, FOXA) has been making big changes to its upper management, and now it's overhauling its physical newsroom. The network said the redesign will enhance communication and creativity among its programming, news and digital teams and create a much more open space than what currently exists at its Midtown headquarters.

Intel has thrown cold water on rumors stating it's licensing graphics chip technology from Advanced Micro Devices (NASDAQ:AMD). After AMD failed to disclose any such deal yesterday - during its annual analyst meeting - its stock plunged over 12%. AMD is continuing its downward spiral before the open, falling almost 3%, while Intel (NASDAQ:INTC) is unchanged.

Highlights from Google's I/O developer conference: Mobile phone apps took center stage, as well as new features for Google Home (GOOG, GOOGL), a job search tool and even new virtual reality headsets. Google Assistant, which will now be available on iPhone, will soon be able to complete transactions and supply information about objects captured via camera. Android O will come out later this summer.

Pandora Media +8% premarket on the latest report that Sirius XM (NASDAQ:SIRI) is in talks for a takeover of the struggling streamer. One of NY Post's most "optimistic" sources put a bid as high as $12-$13 a share, a price "immediately shot down" by familiar sources. In March, Pandora (NYSE:P) chief Tim Westergren said the company wasn't for sale and would get to profitability this year.

The U.S. Commerce Department will launch an investigation today into Boeing's (NYSE:BA) unfair trade claims against Bombardier (OTCQX:BDRAF). It's a two-track action that could lead to duties on the Canadian firm's new CSeries plane and pits Boeing against Bombardier customer Delta Air Lines (NYSE:DAL). Boeing alleges the jetliners are being dumped below cost in the U.S. market.

Despite strong opposition from the airline industry, the U.S. government met European officials in Brussels yesterday to discuss expanding a ban on laptops in airplane cabins. It comes amid fears a bomb could be concealed in electronic devices. While a decision is not expected this week, the two sides will meet again in Washington next week for more talks about risks to air travel. Related tickers: AAL, DAL, UAL

Legal action against Fiat Chrysler is bubbling over. FCAU shares are down 4.2% premarket after reports emerged that the U.S. Justice Department will sue the automaker over excess diesel emissions. The company maintains that software in its cars wasn't designed to cheat emissions tests, but investigators say Fiat still hasn't fully explained its purpose.

Once the world's biggest car company in terms of sales, General Motors (NYSE:GM) has been retreating from several major and unprofitable markets under CEO Mary Barra. The latest moves? GM will stop selling vehicles in India, but will continue to manufacture and export cars from the country, and sell its operations in South Africa.

Wednesday's Key Earnings

Cisco (NASDAQ:CSCO) -7.7% AH on layoffs, disappointing guidance.
Target (NYSE:TGT) +0.9% after topping expectations.

Today's Markets

In Asia, Japan -1.3%. Hong Kong -0.6%. China -0.5%. India -0.7%.
In Europe, at midday, London -1.4%. Paris -1.2%. Frankfurt -0.9%.
Futures at 6:20, Dow -0.5%. S&P -0.4%. Nasdaq -0.3%. Crude -1.8% to $48.54. Gold +0.4% to $1263.30.
Ten-year Treasury Yield -3 bps to 2.19%

Today's Economic Calendar

8:30 Initial Jobless Claims
8:30 Philly Fed Business Outlook
9:45 Bloomberg Consumer Comfort Index
10:00 Leading Indicators
10:30 EIA Natural Gas Inventory
1:15 PM Fed's Mester speech
4:30 PM Money Supply
4:30 PM Fed Balance Sheet


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