Amazon HQ2 choices disappointingly undisruptive 18 Jan 2018 The e-commerce giant has cut the field for its second headquarters to 20 prime locations including Dallas, Atlanta and New York. Hundreds of cities hoped Amazon would think outside the box, but a desire for talent and a welcoming environment led it to the usual hot spots.
Cineworld CEO can crush any rebel forces 18 Jan 2018 The UK movie-theatre group wants $2.4 bln from shareholders to fund a bid for U.S. peer Regal. A deal that was already unappealing looks even less so now that U.S. tax cuts have removed part of its logic. But CEO Mooky Greidinger’s large shareholding will ensure he gets his way.
Guest view: Market rocket fuel will run out 18 Jan 2018 Investors are pushing up U.S. equities with little regard for an array of warning signals, writes former Citibank executive William Rhodes. The Federal Reserve is running out of time to warn them about their “irrational exuberance” before a probable market correction this year.
Wall Street puts trading axiom to test 18 Jan 2018 Investment banks say underwriting for companies brings in more trading revenue and vice versa. Morgan Stanley's performance in debt over the past five years bears that out. Goldman's, though, suggests that's not always the case.
Tim Cook goes as American as Apple’s pie 17 Jan 2018 The iPhone maker will pay $38 bln in tax on its huge pile of overseas cash. It’s also pulling an Amazon with plans to open a new U.S. campus, invest $30 bln and create 20,000 jobs. The Apple boss has cleverly engineered some common ground with Donald Trump.
Wall Street owes Steinhoff a billion thanks 17 Jan 2018 The South African retailer’s woes forced Citi and three peers to take hits totaling more than $1 bln. The pain is manageable. Like the collapse of UK builder Carillion, though, the episode offers a chance to review risks before a broader downturn brings more red ink - and faces.
Celgene readies $10 bln mix of need and hope 17 Jan 2018 The drug group may buy Juno Therapeutics, a biotech promising ways to modify immune cells to fight cancer. The two already have a partnership, but Celgene needs to grow. If it’s also sensing real potential, it could pay an eye-watering price for a firm with no approved products.
Ford stock’s staying power makes no sense 17 Jan 2018 The Motown automaker expects costs and currencies to impede its earnings recovery. It also trails GM on autonomous cars and is having to double its electric-vehicle investments. Yet Ford trades at a higher multiple than its Michigan rival. GM's prospects look brighter.
Hadas: Malthus, Condorcet and “shithole” economics 17 Jan 2018 The English curate was totally wrong about permanent poverty, but the legacy of his grim expectations still clouds judgments. His lesser-known French rival was a better guide. Condorcet would have expected the recent progress in countries the U.S. president seems to despise.
BofA finally has a share price to live up to 17 Jan 2018 As last year’s best-performing big-bank stock, the U.S. lender now trades at a respectable multiple of book value. U.S. tax cuts only partly justify that. Boss Brian Moynihan needs to boost earnings by almost half for Bank of America to deserve its elevated status.
Goldman’s new hope tainted by old habits 17 Jan 2018 With trading revenue falling, it’s no wonder Lloyd Blankfein’s bank has pushed into new business lines. Consumer lending, say, might one day be a big part of Goldman Sachs’ value. Yet a passion for the new is mirrored by an unhelpful attachment to the past – notably, commodities.
Pearson investors need their homework checking 17 Jan 2018 The $8 bln education publisher’s revenue has stopped cratering after it stemmed a decline in sales of U.S. textbooks. The relief may be temporary. Colleges are shifting to cheaper course materials and a price war is looming. That is hard to square with a rich valuation.
Disney’s future turns board geeks to possible rats 16 Jan 2018 Facebook’s Sheryl Sandberg and Twitter CEO Jack Dorsey are leaving the entertainment giant’s board. Convergence with technology – in virtual reality, say – makes conflicts of interest likelier. That can dent directors’ effectiveness. Put less blandly, it can make them dangerous.
Sugar-for-supplements swap will test Nestlé boss 16 Jan 2018 The KitKat maker is selling its U.S. candy arm to Ferrero for a sweet $2.8 bln to invest in products with better growth than junk food. But high valuations for alternatives like vitamin pills limit CEO Mark Schneider’s opportunities to make Nestlé a clean-living champion.
BlackRock’s social activism stick is big and pointy 16 Jan 2018 Larry Fink’s investment firm is demanding companies make a positive contribution to society for the long term. Having $4.1 trln of passively managed assets gives a big bully pulpit. BlackRock may have self-interest at heart, but if the private sector bucks up, that’s just fine.
GE’s legacy losses reinforce case for breakup 16 Jan 2018 A $6.2 bln charge relating to reinsurance - a business the company exited over a decade ago - shows the challenge of managing a conglomerate. CEO John Flannery is struggling to shrug off the past and turn to the future. At least he’s open-minded enough to consider a GE carve-up.
Citi investors go through the tax looking glass 16 Jan 2018 U.S. tax cuts pushed the lender into an $18.3 bln loss, but should boost future earnings. That means boss Mike Corbat can be more ambitious about recently set growth targets. Citi’s recovery may be driven largely by forces beyond its control, but that’s not always a bad thing.
Shareholders leave Autos 2.0 on the hard shoulder 15 Jan 2018 Ford is more than doubling its electric-battery investment to $11 bln, and GM is pushing its driverless car. But as industry gathers for its annual Detroit confab, investors still seem to doubt carmakers can turn new technology into dollars. Tesla remains the exception.
Sanctions purgatory haunts EU as much as Iran 15 Jan 2018 Donald Trump has again waived nuclear sanctions on the Islamic Republic, a short-term relief for the domestic economy. It’s also a near-miss for the European Union: fresh curbs on non-American firms in Iran could spark a transatlantic standoff. But the reprieve is only temporary.
Mnuchin and Dudley exemplify a political dilemma 12 Jan 2018 The U.S. Treasury secretary, contradicting forecasts, expects tax cuts to pay for themselves. The New York Fed chief fears growing deficits and debt. Republicans may nod to the former but enough probably worry about the latter to hamper new outlays on infrastructure and the like.