United States of America

U.S. bank M&A is a money box waiting to be raided

16 November 2020

PNC’s merger with BBVA’s American business will unlock $900 mln of savings, the lenders think. That would cover two-thirds of the purchase price. With over 4,000 banks in the country, there’s vast scope for consolidation, if regulators can stomach it. They have reason to do so.

BBVA shows European banks how to exit the U.S.

16 November 2020

The Spanish lender is selling its struggling American unit to PNC for $11.6 bln, a chunky premium to book value. The deal gives boss Carlos Torres firepower to expand elsewhere. Rivals Santander and HSBC should follow suit, but face a shortage of similarly deep-pocketed buyers.

DoorDash is a dish that gets hotter with time

13 November 2020

The food-delivery firm’s IPO is an obvious attempt to capitalize on runaway growth during Covid-19. Sales have more than tripled. Supervoting shares and vicious competition reduce the appeal a little. Even so, DoorDash’s most recent valuation of $16 bln now looks almost modest.

Stricken polls can work to investors’ advantage

13 November 2020

Opinion surveys once again underestimated Republican support in the U.S. presidential election. Yet backup options, like economy-based models and prediction markets, have their own problems. Investors’ safest bet is to watch the polls – then apply their own analytical scepticism.

Republicans try packing the Fed before Trump exits

13 November 2020

The U.S. Senate will vote on Judy Shelton’s nomination to the central bank’s board. She was in limbo partly due to fringe ideas, like a return to the gold standard, and has shown her partisan colors. Installing her before the White House changes hands is bad monetary policy.

Vaccine is inexact bonus for freight and freezers

13 November 2020

Pfizer’s Covid-19 shots must be kept at ultra-low temperatures. Distributing billions of doses is therefore a big opportunity for makers of super-freezers and delivery groups like DHL and UPS. The size of the windfall depends on whether the jabs bring long-lasting immunity.

Trump fires messy parting shot at Beijing

13 November 2020

The lame-duck president is banning U.S. investment in 31 Chinese companies with military ties, erasing $8 bln of value from index heavyweight China Mobile alone. It creates another headache for U.S. fund managers and momentum for further decoupling that may be hard to roll back.

Goldman’s partners more diversified than diverse

12 November 2020

The 60 staff elevated to the Wall Street firm’s inner circle are as diverse as can be expected from a predominantly white, male industry. But this year’s class says something about the bank’s changing mix. Goldman’s trading desks are no longer a stairway to partnership heaven.

Biden’s finance squad is a progressive fig leaf

12 November 2020

Wall Street alumni are notably lacking in the transition teams sizing up bodies like the Treasury. But bankers should still have the president-elect’s ear. Amplifying left-leaning voices may signal new priorities, like racial inequities, but not a finance-unfriendly agenda.

Elliott takes power punch to greener pastures

12 November 2020

Paul Singer’s fund wants utility Evergy to engage with NextEra, the largest U.S. renewable energy firm. Regulators have frowned upon NextEra’s ambitions. But its valuation helps justify deals without tasking ratepayers. Elliott’s presence might help Evergy get over deal-phobia.

ECB has chance to avoid Fed’s strategy revamp flaw

12 November 2020

Christine Lagarde’s central bank is examining basics, like how it defines its price goal. Its U.S. peer earlier this year switched to aiming for inflation that averages 2% over time. But leaving things as vague as Jerome Powell did undermines efforts to lift price expectations.

Viewsroom: Chinese tech crackdown, The vax trade

12 November 2020

Beijing took Alibaba, Tencent and others to task over monopolistic practices; and global financial markets got a boost from Pfizer’s revelation that its Covid-19 vaccination may be super-effective. Breakingviews columnists around the world weigh in on both developing stories.

TikTok mess is a trap for America’s next president

11 November 2020

A deadline for Chinese owner ByteDance to sell the app’s U.S. business by Nov. 12 may not be binding after Donald Trump lost the election. But the big question remains: what to do with an internet firm that’s deemed a security risk? Joe Biden may not find it any easier to answer.

Vaccine trade may redraw outdated stock boundaries

11 November 2020

Upbeat jab news, and jumping bond yields, sent share prices tumbling for some high-flying, lockdown-friendly firms, like Zoom and Peloton. Meanwhile, battered leisure-related stocks, like Delta, are up this week. But traditional growth and value definitions may get scrambled.

Fed is only half way to climate-change conversion

10 November 2020

The U.S. central bank finally acknowledged that a warming planet poses real risks to the financial system. The Damascene moment is late but sets the scene for more concrete action now that the politics looks more favorable. And at least the Fed will have a late-mover advantage.

Billionaires hang on Georgia as U.S. tax firewall

10 November 2020

Donors like Blackstone’s Steve Schwarzman have already given millions to keep the Senate in Republican hands. Now that effort will focus on the Peach State with two runoff races in January. Much is at stake, both for Wall Street’s highest paid and for the companies themselves.

Jeff Bezos and Margrethe Vestager can get along

10 November 2020

The Amazon CEO may balk at charges from Europe’s antitrust tsar that his company distorts retail competition. Possible remedies, like sharing data or erecting internal firewalls, will hurt. Still, Vestager is trying to cope with Amazon’s dominance, not end it. That’s something.

U.S. Latino vote shows economic progress relative

10 November 2020

Support for Donald Trump among Hispanics jumped in Florida and Texas where many have flourished economically since 2016. But Arizona, where income inequality is more apparent, tilted leftward. Joe Biden wants to close the wealth gap, which helps the Democrats, at least for now.

Beyond Meat serves up double helping of ineptitude

10 November 2020

The plant-based burger maker posted a surprise loss, as an earlier sales surge turned out to be partly due to panic buying. Beyond Meat also can’t say whether a new venture with McDonald’s is a threat or an opportunity. The company could end up as lunch, in more ways than one.

VF’s Supreme buy doesn’t need much kick

9 November 2020

The Vans owner is paying $2.1 bln to buy the cult-like streetwear brand from Carlyle. Expanding Supreme aggressively risks taking away its scarcity value. But at some 4 times sales, less than Nike’s multiple, VF has baked in room for Supreme’s growth to be no better than basic.