Netflix finances keep producing stranger things 18 Jan 2017 The $57 bln video-streaming service blew past quarterly subscriber expectations, quickly approaching 100 mln as it celebrated a decade online. After burning through still more cash, its share price soared to a new high. Apparently growth can come at almost any cost for Netflix.
Student-loan case throws down regulatory gauntlet 18 Jan 2017 In a page from the crisis playbook, the CFPB accused Navient of cheating borrowers paying for college. Suing days before Donald Trump becomes president is a bold gambit for the same agency that nailed Wells Fargo for fake accounts. It's fighting as much for survival as consumers.
U.S. mega-banks look longingly to Minneapolis 18 Jan 2017 Citi's 6.2 pct return on equity leaves it at the bottom of the banking heap, below BofA. JPMorgan and Wells Fargo at least covered the cost of capital. Meanwhile, U.S. Bancorp CEO Richard Davis is retiring after beating them on most major metrics. Simplicity has its advantages.
Wilbur Ross helpfully plays Trump trade translator 18 Jan 2017 The commerce secretary nominee played down the possibility of a trade war. Instead, Ross, a billionaire investor, focused on practices like steel dumping by China. That's the broadly preferred path in Congress. NAFTA talks will reveal if everyone is speaking the same language.
Talking down dollar makes policy mix trickier 18 Jan 2017 President-elect Donald Trump wants to boost growth by cutting corporate taxes, but also shrink the U.S. import-export gap. Now he says the currency is so robust it hurts competition with China. Reconciling it all will be hard without a trade war or a full assault on the Fed.
A Trump FAQ for American business leaders in Davos 18 Jan 2017 The virtual absence of senior Republicans and top dogs from the soon-to-be Trump administration at the World Economic Forum leaves U.S. executives to field queries about the country's direction from their worried global counterparts. Breakingviews offers a helpful cheat sheet.
Goldman Sachs and Trump scratch each other’s backs 18 Jan 2017 The president-elect hired the bank's president, Gary Cohn, and impact-investing head Dina Powell. The Q4 trading boost after Trump's election boosted Goldman's earnings and bonus pool. Fold in layoffs and the average Goldmanite will barely notice the firm's 9 pct revenue drop.
Pearson chief Fallon gets an F 18 Jan 2017 The education publisher's shares fell almost 30 pct after a profit warning from boss John Fallon - not his first. A hit to textbook sales through retailers should have been foreseen, and Fallon's tenure has been bad for investors. This latest shocker puts him on the naughty step.
GM rolls Trump-friendly buzzword off factory floor 17 Jan 2017 The automaker recently harangued by the president-elect for building cars in Mexico is bragging about "insourcing" 6,500 jobs to America. CEO Mary Barra isn't the first to use the term, but is ahead of the curve as more firms try to curry favor with the next commander-in-chief.
Moody’s offers both crisis coda and timely warning 17 Jan 2017 The firm's $864 million deal with prosecutors closes the door on rating agencies' role in the financial meltdown. Moody's has also pledged to insulate analysts from commercial pressures, a reminder as the credit cycle matures that Wall Street's potential for conflicts endures.
Trump nominee spreads insider-trading disease 17 Jan 2017 Tom Price, who has been tapped to be health and human services secretary, is raising new conflicts-of-interest concerns. He bought shares in Zimmer Biomet and other companies while working on bills affecting them. It reflects badly on him, the president-elect and Congress.
Cox: Quest begins for immaculate M&A conception 17 Jan 2017 Dealmakers, many of them gathering in Davos this week, will be on the hunt for mergers that can keep the boom rolling while satisfying President-elect Donald Trump's obsession with jobs. That means synergies are out and "transformation" is in. Shareholders may pay the price.
Morgan Stanley bares limits of animal spirits 17 Jan 2017 The bank led by James Gorman impressively almost doubled quarterly profit to $1.7 bln from a year earlier. As at rivals, though, bond traders reaped less than in usually slower summer months. Improved returns remain subpar. Rules and rate hikes are what will power Wall Street.
Trump void lets Xi Jinping cosy up to Davos Man 17 Jan 2017 The Chinese president defended trade and international cooperation at the global conflab. Beijing is a highly flawed champion of globalisation. But if America turns inward under its new president, China can play a bigger global role in everything from trade to climate change.
Slow burn pays off for BAT and Reynolds 17 Jan 2017 British cigarette maker British American Tobacco has bumped its offer for its U.S. rival, offering $49 bln for the shares it doesn’t already have. The deal should easily hit BAT’s return targets, even if savings aren’t huge. Reynolds was right to hold out.
Politics could flatter or flatten global growth 16 Jan 2017 Last year the world economy grew at its slowest rate since 2009, the IMF reckons. Stimulus in China and the promise of Donald Trump’s tax cuts mean the next two years should be better. However, increased risks of protectionism make forecasts even more tentative than usual.
Trump may force Germany to do more for Europe 16 Jan 2017 Donald Trump is threatening to slap U.S. import tariffs on German cars. For all the economic pain, this could give the EU a new lease of life. Internal pressure failed to make Berlin spend more or give fiscal concessions to southern Europe. External threats might work better.
PETA’s anti-leather push at LVMH faces handbagging 13 Jan 2017 The animal-rights group has acquired an undisclosed stake in the French luxury firm. It will keep LVMH on its toes. Yet a likely rebound in bag margins this year means that the usual goal of the activist – disposals of offending businesses – is firmly off the agenda.
BlackRock makes it hard to go with the flow 13 Jan 2017 Despite attracting $200 bln last year to grow the investment firm's tally to $5.2 trln, revenue fell. Slashing expenses and buying back stock enabled BlackRock to exceed fourth-quarter estimates. Only its scale and diversity help mitigate the costly stampede into low-cost ETFs.
Big U.S. banks lay out their Washington base-case 13 Jan 2017 BofA, JPMorgan and Wells Fargo did well in the fourth quarter. Even so, BofA's return on equity was just 7 pct, Wells missed its own target and JPMorgan socked away less than usual for pay. To justify big stock gains will require relaxed rules and lower taxes to come through.