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.
Tencent and Spotify are streaming’s dueling banjos 12 Dec 2018 Tencent Music’s IPO valued it at the same $23 bln as its Swedish rival, even though the Chinese service is profitable and Spotify is not. Their business models are worlds apart, but as one moves into video and the other builds up subscriptions they will sound increasingly alike.
Climate change on carbon is coming to Wall Street 12 Dec 2018 Extreme weather and wildfires underscore the threat of rising greenhouse-gas emissions. White House obstructionism at the global climate conference isn’t helping. But 2019 will bring more investor activism, broader funding options, better data and more realistic carbon prices.
Hadas: What oil price volatility is trying to say 12 Dec 2018 A barrel of oil costs 31 pct less than in early October. The message is not about investment needs or a big demand shift. The tumble is big because the geopolitical racket makes lesser moves inaudible. Stock markets may also be speaking up.
Vincent Bolloré will break up Vivendi 12 Dec 2018 The 66-year-old tycoon is smarting from a drubbing by Elliott in Italy, and his media group suffers from a huge conglomerate discount. A partial sale of Universal Music may help. But dismantling the whole group would release $10 bln in value, and keep potential activists at bay.
Pernod Ricard served a shot of Diageo by Elliott 12 Dec 2018 The French booze group lags its rival on some counts, such as operating margins, but has bested it on others, notably share-price performance. Narrowing the gap on profitability, and improving corporate governance, as the activist urges, are worthy and achievable objectives.
Activism anxiety will grip French establishment 12 Dec 2018 Between the state and raiders like Vincent Bolloré, France is no stranger to meddling investors. But this year some blue-chips will face cage rattling. Pernod is just the start. The likes of Saint-Gobain, Danone, Renault - and even Bolloré’s Vivendi - are no longer off-limits.
China-U.S. trade war will get a lot more personal 12 Dec 2018 Washington and Beijing’s tariff truce is looking fragile. The arrest of tech giant Huawei's CFO on U.S. behest complicates matters. Detention is a common business negotiation tactic in China, as a Canadian ex-diplomat just found out. U.S. executives have good cause to worry.
Stitch Fix models tech’s terminal problem 11 Dec 2018 The outfit-delivery service’s shares fell 29 pct despite profit that beat expectations. That’s because tech valuations hang on terminal value – the cash flows that come once the business is mature. Slowing customer growth raises doubt about whether this one will reach middle age.
Goodbye tracking stocks – don’t hurry back 11 Dec 2018 Dell’s $23.9 bln plan to buy back paper that mirrored the performance of subsidiary VMware received shareholder approval. Like most tracking stocks, it consistently traded at a discount because holders had few rights. That sounds like a bug; for Dell it proved a handy feature.
Google finds Congress still searching for a clue 11 Dec 2018 U.S. lawmakers who grilled company chief Sundar Pichai failed to land a blow, and showed themselves ill informed about what the search engine actually does. The knowledge gap is risky for tech firms, because it increases the risk of regulation that misses the mark.
Big Tech has a mission in U.S. flyover country 11 Dec 2018 Facebook and its rivals need friends in Washington, yet they mostly aid the urban elites. That’s a missed opportunity, because it’s in America’s interior that they can do more good, by creating jobs. That would be a slow but lasting way to build goodwill.
CVC’s $3 bln Nordic LBO do-over needs new tricks 11 Dec 2018 The buyout firm is taking control of Ahlsell again, two years after selling out of the Swedish distributor. Its recent ownership suggests there won’t be much scope to cut more costs. To get a decent return this time, CVC will have to pile on debt and hope for revenue to pick up.
General Electric can go from bad to worse in 2019 11 Dec 2018 The industrial group led by Larry Culp is mostly being propped up by its aviation arm as its power business sucks wind and its finance unit consumes cash. The risk is that cyclical, financial and competitive headwinds kick the strongest leg of the stool out from shareholders.
Global equities offer value trap in 2019 11 Dec 2018 After two sharp corrections in 2018, U.S. earnings multiples are near 10-year averages. Yet aside from the dot-com bubble, U.S. stock valuations have never been higher in cyclically adjusted terms. With leading economic indicators stretched, they may be built on sand.