China’s trophy case could become discount rack 1 Aug 2017 Big dealmakers such as Anbang and Wanda might have to hold a yard sale. HNA is still keen on ousted White House adviser Anthony Scaramucci's firm SkyBridge, but it too may need to cut back. Bargain-hunters will benefit from any Chinese selling spree.
Fancy fast food makers eye China’s dining upgrade 1 Aug 2017 Changing consumer appetites in the world's largest fast food market are attracting attention from premium brands like Shake Shack – possibly at the expense of incumbents like McDonald's. The opportunity looks tasty, but competition and quality control could give them heartburn.
Scana move signals lights out for U.S. nuclear 31 Jul 2017 The South Carolina utility is pulling the plug on two unfinished reactors and banking guarantees from Toshiba. Southern has given a temporary reprieve to its plants but investors are betting it will follow Scana. The country that birthed nuclear power is sounding its death knell.
Firing Mooch solves sliver of White House problem 31 Jul 2017 New Chief of Staff John Kelly ousted financier Anthony Scaramucci as communications supremo. It’s a good first step in reining in the chaotic U.S. presidency. But the bigger task for the retired general is disciplining America’s CEO, Donald Trump. That battle may not be winnable.
Brazil pork mongers find comfort in flip-flops 31 Jul 2017 Selling trendy sandal maker Alpargatas to wealthy banking families will help meatpacking-to-pulp firm J&F pay a huge fine for bribing politicians. The original purchase, from a company also embroiled in scandal, is being probed by authorities too. It's a Brazilian microcosm.
U.S. sanctions on Venezuela a double-edged sword 31 Jul 2017 Washington is weighing fresh trade retaliation after Venezuela’s constitutional vote. New measures may embolden opposition to President Nicolas Maduro, including from the military. There’s hope for Venezuelans, but U.S. companies like Phillips 66 and Chevron will share the costs.
Shipyard spat shows Macron will put France first 31 Jul 2017 The French president angered Italy and exposed the limits of his ardor for the European Union and free markets by nationalising STX France. The silver lining is that he has a better chance of pushing through reform if he makes a show of protecting jobs and the national interest.
Discovery’s cable deal rests on rosy assumptions 31 Jul 2017 The producer of “Shark Week” is buying Food Network and HGTV owner Scripps for $14.6 bln. Cost savings won’t cover the premium, and getting distributors to pay up for more content will be a hard sell in a churning media market. The Scripps family is wise to take mostly cash.
HSBC’s new chairman inherits a bank on the up 31 Jul 2017 First-half results from the global lender show robust revenue growth, cost discipline, and healthy capital. Higher interest rates should help lift return on equity above 10 pct. Though incoming Chairman Mark Tucker will doubtless make changes, a radical shakeup looks unnecessary.
EU deposit freeze idea is counterproductive 31 Jul 2017 A proposal to stop customers’ withdrawing funds from a failing bank is under discussion. That may give regulators more time to work out a stricken lender. But extending the scheme to insured depositors would only make retail clients jumpier and bank failures more likely.
Hutchison Telecom’s sell-off is a risky call 31 Jul 2017 The Li Ka-shing-backed firm is selling its fixed-line arm for $1.9 bln. The market undervalued the unit and a better-than-expected price reflects keen competition for Asian buyouts. Yet the remaining business will be painfully dependent on Hong Kong’s wobbly mobile market.
Apple sets course for China policy minefield 31 Jul 2017 The U.S. tech giant has minted money in China for years thanks to the iPhone. But slowing sales are forcing it to turn to cloud and payment services. This puts Apple squarely in the sights of the hostile regulators and local rivals that helped drive off Facebook and Uber.
Wells Fargo testing limits of customer inertia 28 Jul 2017 The U.S. mega-bank tacked on unneeded insurance to more than 500,000 car loans, adding to the reputational damage of its fake-accounts scandal. By rights, rivals or fintech upstarts should benefit. As the financial crisis proved, though, rage doesn't often send consumers fleeing.
Repeal’s death gives new life to healthcare rally 28 Jul 2017 Republicans’ inability to repeal Obamacare offers a reprieve to the healthcare sector. Insurers, drug firms and hospitals have benefited greatly from the ACA, and it remains on the books. Political hostility may yet destabilize exchanges, but profits continue to roll in.
Elliott’s Oncor delay mainly helps Elliott 28 Jul 2017 The hedge fund won more time to find $9 bln to take the Texas utility’s parent out of bankruptcy. Its plan values Oncor more highly than Berkshire Hathaway’s agreed offer. But it looks as if Paul Singer’s fund would get most of the benefit. That makes Elliott’s deal a tough sell.
FDA crackdown on cigarettes a rare win for science 28 Jul 2017 The U.S. watchdog wants to lower nicotine levels in a hit to Big Tobacco, whose shares plunged. The agency says long-term use kills half of smokers. It’s a departure from Team Trump’s rejection of facts in climate change. The FDA is the odd regulator defying corporate interests.
Exxon looks longingly at Chevron’s primed pump 28 Jul 2017 Both oil majors reported vastly improved second-quarter results. But Chevron is boosting production as investments start to pay off, while Exxon’s output is still shrinking. CEO Darren Woods’ short-term fixes, especially in the resource-rich Permian, have yet to strike it lucky.
Earnings power gives U.S. market rally new impulse 28 Jul 2017 Notwithstanding Washington's spectacular dysfunction, corporations are beating profit forecasts, growing at a double-digit pace for another quarter. Corporate America's ability to fatten the bottom line without a spurt in the broader economy justifies bull-market convictions.
Barclays gets scant credit for new trimmer figure 28 Jul 2017 The bank is retreating from Africa, shrinking quickly to focus on its core business and has a new returns target of 10 percent. There’s no timeframe to hit the goal, which may explain why shares are trading well below book value. CEO Jes Staley can fix that by losing more fat.
Thiam has yet to move Swiss banking mountains 28 Jul 2017 The Credit Suisse boss has made the bank much more like its wealth management-heavy rival UBS. Yet his returns are less than half as good, and investors see it in second place. Lingering unwanted assets are one reason. The lender’s past U-turns in strategy may be another.
AIA’s new boss starts from position of strength 28 Jul 2017 Booming sales in China and Hong Kong helped the Asian life insurer report a 42 pct surge in new business. New CEO Ng Keng Hooi has a $11 bln surplus to play with. Even if he can’t run all of that down, that still leaves a lot of firepower to fund growth, deals, and dividends.
Baidu rebound buys time for reinvention 28 Jul 2017 Quarterly earnings leapt more than 80 pct at the $70 bln Chinese web giant. That shows the core search business is recovering after a nasty run-in with Beijing last year. This gives Baidu more room to focus on the future, chiefly its mobile offering and artificial intelligence.
Amazon rides open road with few bumps 27 Jul 2017 The $500 bln internet retailer reported another riveting quarter of top-line growth. Investors will fret about the sky-high valuation and reduced profit, but feedback loops within the company keep rivals at bay. Governments may one day intervene, but that reckoning is far off.
ADP owners cash checks from Pied Piper Bill Ackman 27 Jul 2017 The $50 bln payroll processor's stock shot up 11 pct after Bloomberg reported the hedge-fund manager had built a stake. Neither Ackman's high-profile stumbles nor the middling performance of activists broadly proved a deterrent. Following blindly is a dubious investment strategy.
Gucci gives luxury an eye-catching makeover 27 Jul 2017 Operating profit at Kering, the Italian brand’s 39 bln euro parent, rose 57 pct in the first half of 2017. The catwalk-worthy performance avoided discounting or the sector’s old trick of opening new stores. Until rivals can copy it, they will envy the French group’s look.
Stress-test reform risks handing banks easy ‘A’ 27 Jul 2017 Randal Quarles, Trump’s pick to head regulation at the Fed, thinks Wall Street should get details of the annual exam, such as models. He says it’s about providing questions rather than giving answers. That, though, may mean lenders have more clues, which could defeat the purpose.
Viewsroom: Citi lays out path to mediocrity 27 Jul 2017 CEO Mike Corbat pledged a huge earnings boost at the bank’s first investor confab in nine years. But Citi’s enduring crisis hangover will still leave it trailing most rivals. In China, HNA’s shadowy ownership may be a big problem for U.S. M&A. Plus: Google keeps clicking.
Cox: Colombia’s peace dividend won’t come easy 27 Jul 2017 The end of a long war against leftist guerrillas should allow Latin America's fourth-biggest economy to attract investment, better allocate capital and grow faster. A trip into rural Colombia reveals how infrastructure neglected for 50 years complicates the challenge ahead.
Foxconn’s U.S. move sends false reshoring signal 27 Jul 2017 The Taiwanese tech giant will build a $10 bln display plant in Wisconsin. That is a symbolic victory for the president and other Americans who want to lure factory jobs from China. But for commercial and political reasons, a mass reverse-migration remains unlikely.
M&A shops become Wall Street’s new black boxes 27 Jul 2017 Lazard, Evercore and Moelis beat earnings estimates by wider margins than their bulge-bracket peers. Yet advice ought to be easier to track than trading. That suggests the problem lies with an under-resourced sell-side. Investors, though, appreciate the boutique business model.