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Author: skywalker   |   Latest post: Fri, 21 Sep 2018, 11:05 AM


Wall Street Breakfast: Europe Goes After American Brands

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The European Union intends to target €2.8B of U.S. goods ranging from jeans and bourbon to motorcycles and boats should President Trump go ahead with his plan to impose a 25% tariff on foreign steel. That's according to a list drawn up by the European Commission and obtained by Bloomberg News. It's also weighing filing a WTO complaint and introducing "safeguard" measures to prevent steel shipments from being diverted and flooding the European market. Related tickers: BF.B, DEO, HOG


White House economic adviser Gary Cohn is reportedly summoning executives of U.S. companies that depend on metal imports to meet with President Trump this week in an attempt to halt his proposed tariffs. The decision is viewed inside the White House as a possible breaking point for Cohn. House Speaker Paul Ryan also urged Trump to reconsider his decision yesterday, but the president insisted that "we're not backing down."

"To complete NAFTA 2.0, we will need agreement on roughly 30 chapters. After seven months, we have completed just six," U.S. Trade Representative Robert Lighthizer said as the seventh round of NAFTA talks wrapped up in Mexico City. "I fear that the longer we proceed, the more political headwinds we will feel," such as the upcoming presidential elections in Mexico, U.S. mid-term elections, and provincial elections in Ontario and Quebec.

It will be "necessary to exchange views with overseas central banks in the event the BOJ exits ultra-loose monetary policy," according to Governor Haruhiko Kuroda. "We need to avoid triggering a spike in long-term interest rates that deviates from economic and price fundamentals. If the BOJ were to debate an exit, we need to move cautiously so as not to hurt the economy and prices."

Meeting with South Korean government officials for the first time, North Korean leader Kim Jong-un said it was his "firm will to vigorously advance" and "write a new history of national reunification" with Seoul. Kim Jong-un has met very few foreign officials since he became leader in 2011 and the last time envoys from the South visited Pyongyang was in 2007. KOSPI +1.5% to 2,411.

Senate Majority Leader Mitch McConnell has filed a motion to have a procedural vote today on a bill, sponsored by Senate Banking Committee Chairman Mike Crapo, that would roll back key regulations of Dodd-Frank. The measure spikes the asset level at which a bank becomes "systemically important" from $50B to $250B, freeing dozens of regional banks from stringent rules like additional capital buffers and stress tests. Related tickers: ALLY, AXP, BBT, BBVA, BMO, CIT, CFG, CMA, DB, DFS, FITB, HBAN, KEY, MTB, NTRS, RF, SAN, STT, STI, ZION


SpaceX has just reached another milestone, launching its 50th Falcon 9 from the same pad that hosted its maiden flight in 2010. The rocket has since grown more than 50 feet and gained 600K lbs of additional thrust. Dominating the industry? It took Falcon 9 (Private:SPACE) about seven years and nine months to hit the 50-mark, compared to the nine years and seven months for United Launch Alliance's (BA, LMT) Atlas V rocket.

"Bringing back the 767 (passenger version) - I just don't see it," said Randy Tinseth, Boeing (NYSE:BA) VP of Commercial Marketing. There had been some speculation that Boeing would revive the jet to offer airlines a low-price backstop in case a proposed brand-new mid-market plane suffered delays, or in case it didn't go ahead with the project.

Fiat Chrysler plans to list shares of auto-parts business Magneti Marelli in Italy through a spinoff instead of an IPO, according to a Reuters exclusive. The move could be announced by FCA (NYSE:FCAU) CEO Sergio Marchionne, who carved out and listed luxury sports car maker Ferrari (NYSE:RACE) in 2015, when he unveils his new strategy plan on June 1.

3M is getting another "M." Michael Roman will replace Inge Thulin as CEO, effective July 1, while the latter will be appointed to the newly created position of executive chairman of the board. "3M will benefit greatly from having two strong leaders involved going forward," said lead director Mike Eskew. Roman most recently served as COO and has been with 3M for over 30 years.

Kobe Steel CEO Hiroya Kawasaki is stepping down to take responsibility for a widespread data fraud scandal, with his successor to be decided at a board meeting to be held soon. Kobe (OTCPK:KBSTY), which supplies makers of cars, planes and trains worldwide, admitted last year to falsifying quality specifications to about 500 customers, roiling supply chains and triggering similar admissions from other Japanese steel manufacturers.

Based on a count of more than half of the votes already cast, Broadcom (NASDAQ:AVGO) would win a majority of Qualcomm's (NASDAQ:QCOM) board seats, according to information obtained by Bloomberg. If that result holds up when the final vote takes place, Broadcom would have a mandate to overturn Qualcomm management's opposition to the $117B deal, although it's still being investigated by U.S. security agency CFIUS.

Nordstrom shares slipped 2.7% in after-hours trading after the retailer's founding family experienced their second setback in trying to take the company private. A special committee of the board rejected their roughly $8B buyout as too low and will terminate discussions unless their bid is "substantially" improved. The $50 per share offer was below Nordstrom's (NYSE:JWN) latest closing price.

Add two more areas where Amazon (NASDAQ:AMZN) can deliver Whole Foods groceries in under two hours - Atlanta and San Francisco. Amazon first announced the Prime service last month and kicked it off in four markets: Austin, Cincinnati, Dallas and Virginia Beach. More perks? The company recently announced that shoppers who pay with their Amazon Prime Visa card would start getting 5% back at Whole Foods.

The Trump administration is backing the effort. South Dakota is asking the U.S. Supreme Court to overturn a 1992 ruling which determined that companies with no physical presence in a state are not required to collect an online state sales tax. A lower court decision favored Internet retailers Wayfair (NYSE:W), Overstock.com (NASDAQ:OSTK) and Newegg in the dispute. Supreme Court justices are scheduled to hear arguments on April 17 and a ruling is expected by late June.

Today's Markets

In Asia, Japan +1.8%. Hong Kong +2.1%. China +1%. India -1.3%.
In Europe, at midday, London +1%. Paris +0.8%. Frankfurt +1.2%.
Futures at 6:20, Dow +0.6%. S&P +0.4%. Nasdaq +0.6%. Crude -0.5% to $62.85. Gold +0.5% to $1326.40. Bitcoin -4.4% to $10929.
Ten-year Treasury Yield +1 bps to 2.89%

Today's Economic Calendar

8:55 Redbook Chain Store Sales
10:00 Factory Orders
7:00 PM Fed's Reserve Gov. Lael Brainard: Economic and Monetary Policy Outlook
8:30 PM Fed's Kaplan speech


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