Puerto Rico exposes dearth of bond vigilantes 7 Jan 2016 Tax perks and a thirst for yield meant bond buyers tolerated bad fiscal practices for years. They only seriously pushed up borrowing costs after the island’s $70 bln debt crisis became all too obvious. Foolish financial crowds had better wise up to other U.S. danger zones.
Morgan Stanley revamp puts a CEO on the market 7 Jan 2016 The Wall Street bank’s boss James Gorman has chosen Colm Kelleher as heir apparent, leaving wealth management chief Greg Fleming up for grabs. Kelleher may be the ultimate survivor, but Fleming’s skills may be of use to firms from BlackRock to Amex to U.S regional banks.
Apple doldrums echo early 2014 false alarm 6 Jan 2016 The $570 bln iPhone maker’s stock is off 15 pct since the end of November. Reports that suppliers are cutting production are the latest concern. Sales didn’t surge last time Apple offered an only slightly upgraded handset, either. The company’s shares are even cheaper this time.
Netflix global sprawl adds risk as well as growth 6 Jan 2016 The $50 bln video-streaming company is launching in India and 130-odd other countries. Netflix has 70 mln members in its current 60-plus markets, but growth is slowing. The rollout may allay that worry, but it’s also costly - and it takes profit off the table for a while.
Valeant’s temporary boss has his work cut out 6 Jan 2016 The drugmaker’s ex-CFO replaces a muddled three-headed approach implemented after CEO Mike Pearson fell ill with pneumonia. Former Goldman banker Howard Schiller helped build the acquisitive Valeant. Buying is one thing. Running an embattled company requires different skills.
Pioneer puts stamp on its oil outlier status 6 Jan 2016 The $17 bln Texas oil driller is issuing $1.4 bln of equity to expand production, even as crude languishes below $40 a barrel and rivals scramble to survive. Low debt, prime resources and savvy hedging leave Pioneer in a rare position. The share price reflects a refuge premium.
Soros aura brings rare $4.5 bln hedge-fund startup 5 Jan 2016 Scott Bessent, the famed investor’s ex-CIO, has raised one of the biggest totals ever for his firm, Key Square. That’s remarkable in an era of subpar hedgie returns, even if $2 bln comes from Bessent’s former boss. It’s also evidence of the lasting power of industry pioneers.
Gene-editing IPO tests DNA of investors 5 Jan 2016 New disease-fighting techniques have captured the imagination of the medical community. A planned stock sale by Editas, backed by Google and Bill Gates, will see if financing follows. Though the market could be huge, patents are being challenged and therapies seem a decade away.
Cox: How gun control is like zero interest rates 5 Jan 2016 A White House order to require more dealers selling their wares at gun shows to conduct background checks has kicked off the third firearms bubble of Obama’s presidency. As in previous booms, bringing forward future demand stores up trouble down the road for the weapons trade.
Managerial competence makes the difference in 2016 5 Jan 2016 Markets are getting choppier. Capital is becoming more expensive in the world’s largest economy. Globalization is taking big knocks. Economic growth is middling. Good managers will distinguish winners from losers as much as valuable assets do from lousy liabilities.
Wanda’s Hollywood ambitions show legendary savvy 5 Jan 2016 The Chinese entertainment group is adding the U.S. studio behind “Jurassic World” to a portfolio that includes a Spanish soccer team and Ironman races. Buying Legendary Entertainment should help fill seats in its cinemas globally – and perhaps even bolster China’s soft power.
VW’s U.S. lawsuit shows reboot is only half done 5 Jan 2016 A strongly worded government complaint has undermined Volkswagen’s progress in tackling its emissions scandal. U.S. laws are tougher than in Europe, and the German carmaker’s lobbying clout there is smaller. VW needs drastic steps to win goodwill.
GM CEO gets wrong reward for do-over year 4 Jan 2016 Mary Barra is adding the chairman’s job. She boosted margins and steered the Detroit automaker through an ignition-switch fiasco that marred her first 12 months. But she had help. Giving her both roles is bad governance. And GM’s history shows a need for more oversight, not less.
Lost decade demands Viacom get with the programs 4 Jan 2016 The MTV owner’s shares have barely budged since it split from CBS 10 years ago. In that time, boss Philippe Dauman oversaw some $21 bln in stock buybacks, more than Viacom’s current $17 bln market value. It’ll take greater creativity to rejuvenate Sumner Redstone’s networks.
Healthcare M&A will wear down in 2016 4 Jan 2016 Obamacare and tax avoidance spurred over $550 bln of U.S. deals in 2015. That’s three times more than the previous record. With the obvious combinations already struck, acquisitive companies hurting and trustbusters sharpening their pencils, a repeat will be challenging.
Technology can help banks do a hard reset on costs 4 Jan 2016 U.S. lenders face slow growth, barely rising interest rates and a likely jump in bad loans. They ought to pinch a few ideas from the financial-technology crowd. That could make banks far more efficient - and do wonders for the sector’s mediocre returns.
GM’s $500 mln Lyft stake hedges against tech’s rise 4 Jan 2016 The bet gets the U.S. carmaker a way into the growing ride-hailing industry and another partner for developing autonomous vehicles. The deal taps into potential changes in car ownership and usage, and even employment – all threats to the traditional business of building vehicles.
Viacom, Time Warner among 2016 merger wannabes 31 Dec 2015 U.S. media distributors such as cable outfit Comcast have bulked up, and Apple, Amazon and the like have built new streaming models. The giants have 12-digit valuations. With the exception of Disney, traditional content makers are looking puny. They’ll feel the urge to merge.
Oil will blow past $80 a barrel in 2016 30 Dec 2015 Low-cost OPEC producers will win the hydrocarbon price war because they can fight harder for longer. For now, OPEC is flooding the market with cheap crude. But it is building power over prices by making rival output uneconomic. The next big move in the oil price will be up.
Jamie Dimon, 10 years on, is hard bank CEO to beat 30 Dec 2015 Looking back on a decade running JPMorgan, the boss has had missteps like the London Whale, big legal fines and clashes with regulators. Yet Dimon has fashioned a bank with leading market share, top-tier returns and a head start in fintech. It’s well placed for the next 10 years.