United States of America

What Carney can learn from Yellen

21 September 2017

Fed Chair Janet Yellen showed rate-setters can shock markets even when they stick to the script. That’s a lesson for the Bank of England’s Mark Carney, who has talked up a rate rise this year. Like her, he may have to hike without having solved a host of economic puzzles.

CRH deal cements its U.S. infrastructure bet

21 September 2017

The building materials company is buying Kansas-based Ash Grove for $3.5 bln including debt. It’s a full price for a group which likes to buy cheap. Despite doubts over President Trump’s pledge to rebuild highways and bridges, pushing into its key market makes sense for CRH.

HTC tethers itself to a new virtual reality

21 September 2017

The ailing Taiwanese firm will sell part of its handset unit to Google for $1 billion. This will free up HTC to focus more on its risky but promising VR business, where it is winning market share. Deeper ties with the U.S giant might also help fend off rivals Sony and Facebook.

Fed balance-sheet runoff could rock fiscal boat

20 September 2017

The U.S. central bank will start shrinking its $4.5 trln bond portfolio next month. The timing is risky, with lawmakers set to spar over government funding and the debt ceiling. Fed downsizing will also cut the $92 bln it sent to Treasury last year, adding to budget pressures.

Harvard endowment risks wasting its big advantage

20 September 2017

An 8.1 pct gain in the year to June was far from Ivy League. Newish boss Narv Narvekar says it will take years to fix performance. But worrying about short-term returns misses a Harvard strength. Its $37 bln pot is ideally suited for the ups and downs of very long-term investing.

Options hurt Bill Ackman’s cause at ADP

20 September 2017

The pushy hedge-fund boss owns most of his 8.3 pct stake in the $50 bln payroll processor with derivatives. It's a common ploy, but Ackman's plan is lackluster and investors can pick from plenty of activist campaigns. His choice of securities only makes it harder to gain support.

Uber hops in driving seat to serve ad firms notice

20 September 2017

The ride-sharing firm sued a digital advertising agency claiming fraud and seeking some $40 mln in damages. Clients rarely, if ever, take Madison Avenue to court. Already under pressure to prove their value, the case is another sign ad middlemen need to clean up their act.

Toys R Us equity owners aren’t exactly wiped out

19 September 2017

KKR, Bain and Vornado privatized the retailer for $6.6 bln more than 12 years ago. Now their stock is worthless. Even without dividends, though, they’ve collected some $600 mln in fees, interest and other payments. It shows how buyout firms play the game in multiple ways.

China “Belt and Road” waves red flag for investors

18 September 2017

Beijing’s vision of infrastructure connecting some 70 countries already has fund firms rushing to create vehicles to lure investment. But broad index ETFs miss that many projects make little commercial sense. Skeptical punters should focus on a narrower set of potential winners.

Post serves unappetizing $1.5 bln breakfast combo

19 September 2017

The Grape-Nuts-to-Weetabix maker has ordered up a side of sausage and home fries by agreeing to buy Bob Evans. Post shares have been on a roll, but it's paying a hefty 15 times EBITDA, before trimming any fat. An estimated return of 5 pct is no way to start an investor's day.

Jefferies signals a tighter squeeze on Wall Street

19 September 2017

Sharp rises in underwriting and deal revenue helped the investment bank double profit in the latest quarter. While bond trading was depressed, the firm led by Richard Handler seems to be picking up market share in the advice business. These are bad omens for bigger rivals.

Market returns Best’s IPO plans to sender

19 September 2017

The Alibaba-backed logistics firm has cut the price of its New York flotation, and slashed the deal’s size to $495 mln, IFR reports. Best has belatedly recognised it was asking too much of investors, given the poor performance of rival ZTO, and its own evolving business model.

Activist has fighting chance with China’s Sina

19 September 2017

U.S. hedge fund Aristeia is going after the $8 bln Chinese web company. Sina looks like a good target: it is clearly undervalued and its boss is not protected by super-voting shares. A big stake in microblogging affiliate Weibo offers some straightforward ways to create value.

Climate-investing deal targets sustainable returns

18 September 2017

London-based Impax’s purchase of U.S. rival Pax stacks up financially and creates one of world’s largest climate-change specialist investors - with $13 bln in assets. Rising environmental risks should heat up demand for such funds, but also draw competition from bigger players.

Jes Staley’s share price misery is undeserved

18 September 2017

Though the Barclays CEO has delivered on his targets the bank’s shares are down 16 pct this year, making it the UK’s worst-performing major lender. Self-inflicted regulatory and litigation worries haven’t helped. But concerns about headwinds in the U.S. and Britain are overdone.

Northrop plays on global angst with $7.8 bln deal

18 September 2017

The drone and B2 bomber maker is going ballistic by buying missile and satellite maker Orbital. Cost savings fall short of covering the all-cash deal’s premium. But with tensions growing over North Korea’s nuclear threat, the target’s interceptor business may be set to rocket.

U.S. electricity grid is a Category 5 problem

18 September 2017

Hurricane Irma left much of Florida without power after ripping down transmission lines. Burying cables is one fix, if time-consuming. But storms are just one catastrophe threatening the nation’s aging electricity infrastructure. Upgrading it could cost as much as $2 trillion.

Roku IPO warrants swimming against stream

18 September 2017

The TV-gadget maker may capitalize further on the cord-cutting trend. Some 15 mln accounts are helping grow revenue and reshape the business model. A $1.3 bln valuation is lofty, though, if TiVo and Pandora are guides. Elusive profit and a dual-class structure are also turnoffs.

Next SoFi CEO needs both social and finance skills

15 September 2017

The foolish plan to keep founder Mike Cagney around amid a sex scandal has ended quickly. Whoever steps in will have to clean up the culture quickly. Growth targets also should be revisited at SoFi, last valued at $4.3 bln. Picking a woman with this talent mix might help, too.

Exxon’s M&A machine faces Permian dilemma

15 September 2017

Buying a West Texas driller is the quickest way for the $337 bln oil giant to catch up with peers on replacing reserves. Valuations have fallen a third or more while Exxon’s remains steady. The trick for CEO Darren Woods is to find enough cost cuts to justify paying a premium.