The 2019 stock market reversal: how it happened 18 Dec 2018 Few people would have disagreed at the beginning of the year that the nine-year-long bull market was reaching its end phase. That didn’t diminish the shock when stocks began to plunge in earnest. Breakingviews lays out a fictional account of how the good times came to an end.
Goldman Sachs will spend 2019 in velvet handcuffs 18 Dec 2018 New boss David Solomon starts the year with a mission to grow, lots of ambition and a crosstown rival that has steadily upped its game. A big deal – say, buying an asset manager – could help Solomon vault ahead of Morgan Stanley. That’s if the 1MDB scandal doesn’t bind his hands.
Boeing foots the bill for competitive misstep 17 Dec 2018 The aerospace giant lifted its offer for control of Embraer’s regional-jet business to $4.2 bln. It’s not the greatest deal – rival Airbus got Canada’s Bombardier for a song after Boeing’s aggressive trade tactics backfired. But it’s better to pay up than leave a flank exposed.
Facebook might be the JPMorgan of the tech world 17 Dec 2018 Mark Zuckerberg’s social network faces more Washington pain in 2019. But tougher internet regulation could increase the burden on rivals, as Dodd-Frank financial rules did to small lenders. Facebook may emerge stronger, like Jamie Dimon’s bank after its time in the hot seat.
Wall Street could use remedial lectures on culture 17 Dec 2018 The New York Fed’s push to improve industry behavior deserves top watchdog billing. Goldman’s 1MDB mess is only one reminder the message hasn’t totally sunk in. Slower economic growth in 2019 could expose more lapses. It’s a good time for boss John Williams to badger his charges.
Canada faces off against vampire squid to south 17 Dec 2018 U.S. tax cuts and protectionism are going to suck the life out of the Canadian economy. Prime Minister Justin Trudeau has two options: join the fiscal race to the bottom, or address the reasons Canada was already falling behind its neighbor. Looming elections add to the urgency.
The Exchange: Gary Shteyngart 17 Dec 2018 To create the hedge fund manager character Barry Cohen – the protagonist in his latest novel “Lake Success” – Shteyngart spent lots of time with real-life financiers, from quants to activists. He discusses what he learned about Wall Street and the money business with Rob Cox.
Hitachi buys live wire in ABB power deal 17 Dec 2018 The Japanese conglomerate is paying a handsome $11 bln valuation for the lacklustre power grid unit of its Swiss rival. Activists there will be placated by the proceeds and a restructuring. Hitachi becomes an industry giant but finding other benefits, like synergies, will be tricky.
SoftBank writedown will cloud Son’s way forward 17 Dec 2018 The group and its $97 bln Vision Fund paid toppy prices for the likes of ARM and WeWork. With tech valuations and growth under pressure, CEO Masayoshi Son may have to mark down some valuations in 2019. Financial backers and fund staff could struggle to maintain the momentum.
J&J’s talc crisis will linger for years 14 Dec 2018 Investors erased $40 bln of market value after Reuters revealed the U.S. company knew for decades its baby powder was sometimes tainted by asbestos. Based on past consumer scandals, the real hit could be smaller but long-lasting. Lawsuits and brand damage don’t easily dissipate.
German carmakers could show Trump art of the deal 14 Dec 2018 VW, Daimler and BMW are vulnerable to 25 pct auto tariffs threatened by the U.S. president, who’s also railing against GM for idling plants. The Germans could win some goodwill by taking up some of their American rivals’ spare capacity. That’s easier done for some than others.
Review: The attack of the killer fridges has begun 14 Dec 2018 The world is ever more connected via the internet, from cars and power grids to home appliances and toys. That means ever more things are dangerously hackable, security expert Bruce Schneier writes in “Click Here to Kill Everybody.” His title isn’t as hyperbolic as it may sound.
Trump can get what he wants from Saudi in 2019 14 Dec 2018 As the year closes, oil prices have fallen to well below highs that riled the U.S. president. The risk is OPEC supply cuts and sanctions on Iran will send them back up. Yet scope to influence the kingdom on output – as well as its behaviour in the region - gives him a hedge.
Japan Post tries overseas diversification at home 13 Dec 2018 It might buy a stake in $33 bln U.S. insurer Aflac, which does business mostly in Japan. Financial conglomerates that mix banking and insurance have a patchy record; so does Japan Post when it comes to overseas acquisitions. At least this would be a watered-down version of both.
Investors could use a bit more skepticism on trade 13 Dec 2018 Stocks have rallied after signs Beijing is giving ground on some U.S. demands, including cutting tariffs and opening markets. Yet America's hawks won’t be wooed by skin-deep changes and tensions extend broadly, including to Chinese hacking. Any truce could easily be tripped up.
Amazon HQ2 meets NIMBY 2.0 13 Dec 2018 A month after picking New York for its new location, the $810 bln e-commerce giant is being bashed by local politicians and unions. It’s a rude shock for a firm used to getting its way. This kind of opposition can be eased with money. As Amazon gets bigger, the cost rises.
Peugeot boss has better option to running Renault 13 Dec 2018 Carlos Tavares may be the most obvious European car executive to fill the Ghosn gap. But buying 22 bln euro Fiat Chrysler may be a more appealing alternative, so long as the Agnellis are looking to hand things over to the leader who best resembles the late Sergio Marchionne.
China’s murky moves hand Trump more ammo 13 Dec 2018 Ottawa has lost contact with another citizen after Beijing detained an ex-diplomat. It will be considered retaliation for the arrest of Huawei’s CFO. Despite other concessions, such tactics stand to alienate China scholars, embolden U.S. hardliners and make trade peace harder.
Market forces put more coal in Trump’s stocking 12 Dec 2018 U.S. usage of the black stuff will hit a 39-year low and plant closings double in 2018 despite the president’s support. Cheaper natural gas and renewables are driving the trend, and will encourage other countries to follow. Miners will suffer but the world will breathe easier.
Approach of peak chicken brings vat meat closer 12 Dec 2018 Today’s bird weighs up to five times as much as 60 years ago, putting it on track to be the world’s protein of choice. Yet the rate of growth is slowing because of the fowl’s physical limits. That’s a recipe for lab-grown alternatives, just as regulators clarify the rules.