Last thing Brazil’s economy needs is Zika panic 3 Feb 2016 The toll the virus may take on unborn babies is tragic, but it isn’t as infectious as Ebola or SARS. A bigger worry for tourists and Olympic athletes is dengue fever. Direct Zika costs also should be negligible. The danger is that headlines fracture already fragile confidence.
Syngenta up against element of regulatory surprise 3 Feb 2016 The Swiss seed maker says its $43 bln sale to ChemChina shouldn’t raise U.S. national security fears, despite hot-button facets like chemicals, food and China. Yet Philips’ blocked lighting-unit deal shows Uncle Sam can veto without explanation. That’s reason enough to be wary.
GM will struggle to take recovery up another gear 3 Feb 2016 The Chevy maker rode booming U.S. car sales to record full-year profit, hitting a 10 pct North America full-year margin goal 12 months early. GM thinks it can boost earnings, profitability and cash flow in 2016. Peaking U.S. demand means the climb will get harder from here.
EU curbs on free data flows are basically useful 3 Feb 2016 Europeans may get rights to stop indiscriminate U.S. data-snooping if national agencies agree to a new political pact called Privacy Shield. Multinationals won’t know how it works until April at the earliest. But this is the basis for a welcome check on Big Tech’s power.
Lowe’s makes an offer even Canada can’t refuse 3 Feb 2016 The U.S. home-retailing chain has won over Rona with a 104 pct premium valuing its northern counterpart at C$3.2 bln. Protectionism helped thwart a bid from Lowe’s in 2012. A strong dollar made a knockout bid easier now. And it turns out the color of money suits any flag.
Comcast proves it doesn’t need Time Warner Cable 3 Feb 2016 Not even a year has passed since Brian Roberts’ $45 bln bid for his cable rival blew up. With a 9 pct increase in quarterly revenue and a surprising glimpse of cord-cutting defiance with 89,000 new customers for video, Comcast’s pace is picking up despite industry consolidation.
Yahoo keeping all of its bad options open 3 Feb 2016 The internet firm topped a $4.5 bln Q4 writedown with plans to pursue “strategic proposals” for its search and ad operations. CEO Marissa Mayer also mentioned cutting staff, closing offices and jettisoning products. Selling the core business is still the best of lousy choices.
Fed stress-tests idea of negative interest rates 2 Feb 2016 That’s part of the “severely adverse” scenario that big U.S. banks have to run this year to satisfy regulators. The ECB and now the Bank of Japan are giving it a try. The Fed has started pushing rates upward – but going negative is becoming a very plausible downturn assumption.
Marco Rubio must walk a fine line with donors 2 Feb 2016 The Republican U.S. senator’s third-place finish in Iowa’s presidential caucus could be enough to lure financiers fed up with his extreme rivals. Voters are wary, though, of candidates closely tied to Wall Street. His challenge will be to avoid biting the hands that feed him.
Exxon’s cutbacks pose a dilemma for oil bulls 2 Feb 2016 The U.S. energy titan axed 2016 capex plans by more than expected and halted share buybacks, even as Q4 profit beat forecasts. It suggests Exxon is girding for a prolonged slump. The more the industry slashes, however, the greater the odds of an eventual rally in crude prices.
Lazard M&A bankers go big or go home 2 Feb 2016 The advice shop and asset manager run by Ken Jacobs reported a 29 pct fall in quarterly profit. One reason was that despite working on six of last year’s 10 largest deals, only one closed. Increasingly complex merger plans give white knuckles to all involved.
Wall Street loses Iowa election kickoff 2 Feb 2016 Ted Cruz beat Donald Trump while Hillary Clinton and Bernie Sanders were in a virtual tie in the first U.S. presidential balloting. The outcome partly reflects how bashing bankers resonates with voters. Goldman Sachs and its rivals can expect to keep hearing their names called.
Investment acronyms shift from optimism to angst 2 Feb 2016 BRICS has been buried. Just as well: it was a “Bloody Ridiculous Investment Concept”. Now VIIPs and TICKs vie to take its place. But searching for groups of vibrant economies jars with the gloomy mood. The most appropriate new acronym might be a set of worries labelled CFO.
Alphabet spells relief with R&D 1 Feb 2016 Google’s parent broke out the cost of chasing so-called moon shots like internet-by-balloon and driverless cars. Such investments lost $3.6 bln last year, but isolating them also revealed strong operating margins in ad-based businesses. Alphabet for now can have it both ways.
Express Scripts left vulnerable by contract spat 1 Feb 2016 Shares of the $48 bln drugs middleman were dealt a blow when heavyweight insurer Anthem went public with ambitions to get a better deal. Express will want a quick resolution before serial dealmaker Stefano Pessina at Walgreens Boots opportunistically lobs in a lowball bid.
Puerto Rico’s 46 pct haircut may grow, not reduce 1 Feb 2016 The broke U.S. territory is suggesting creditors write off nearly half some $49 bln of debt. There’s also an earnout if – big if – growth picks up enough. Puerto Rico would still be heavily indebted. Lenders will see it as an opening gambit, but they need to accept reality, too.
Online poker CEO gives shareholders an out 1 Feb 2016 The boss of Amaya, owner of PokerStars and other gambling sites, is offering to take the company private for up to C$4.4 bln. Though the shares have fallen by half over the past year, there’s a 40 pct premium in the woolly bid. It could pay to cash out now in case it’s a bluff.
Bank dark-pool cases deserve harsh light of trial 1 Feb 2016 Barclays and Credit Suisse will pay $150 mln to settle U.S. charges of duping clients in their trading venues. Ending costly probes makes sense, but it’s unlikely savvy investors didn’t know of high-frequency traders and other risks. A court test would clear up some mysteries.
Alere board’s diligence brings 51 pct premium 1 Feb 2016 A $5.8 bln sale to $56 bln healthcare group Abbott caps a series of good decisions. Appointing a separate chairman, jettisoning Alere’s deal-hungry founder, rejecting his low-ball bid and focusing the business all helped. It shows what engaged investors and directors can achieve.
Chevron Q4 loss raises stakes for gas mega-project 29 Jan 2016 The $160 bln oil giant unveiled its first red ink since 2002. The CEO has cut capex, sold assets and borrowed to bolster dividends amid tumbling oil prices. Imminent production from a $54 bln Australian gas field should relieve some pressure. Any hiccups, though, could be costly.