Activists’ guide to 2018 (sponsored by P&G) 2 Jan 2018 Investors seeking new strategies, more dividends or board seats aren't going away. The siege of the Pampers maker by Trian, which ultimately won a board seat, will embolden others to take up the cause. Resistance isn't futile, but needs to be more carefully considered.
Passive funds will claim a CEO scalp in 2018 2 Jan 2018 Index trackers keep winning market share but companies can’t take their passivity for granted. State Street campaigns for gender diversity, Vanguard and BlackRock defied Exxon on climate change, and the latter backed Nelson Peltz at P&G. Firing a poor manager is the next step.
Our 2018 predictions on Reuters TV 31 Dec 2017 From the CEOs who should run for U.S. president, to the banks that ought to be sizing up mergers, our writers give their take on the coming year in a series of Reuters video reports.
Viewsroom: Investors target sexual misconduct 29 Dec 2017 Companies that sweep settlements for bad behavior under the carpet will feel shareholder ire in 2018, Breakingviews predicts. Plus, Apple will float past the EU’s roving eye, splintering political parties are a ticking U.S. time bomb and bank bosses may hang up their hats.
America better at finding natural gas than using it 29 Dec 2017 Booming production has made the country a net exporter. But consumers are on pace to use less electricity from natural gas in 2017. As issues from Atlanta to Florida pressure the grid, shale’s promises of “energy independence” hit policy and infrastructure obstacles.
Goldman loses on tax swings, gains on roundabouts 29 Dec 2017 President Trump’s tax reform will knock $5 bln off the Wall Street firm’s bottom line, two-thirds of it from a one-time hit to foreign earnings. That’s just noise for investors to filter out. Other goodies, like a lower overall rate, should leave Goldman substantially better off.
Icahn wins SandRidge battle but war isn’t over 29 Dec 2017 The oil driller has dropped its $746 mln bid for rival Bonanza, something the activist and others wanted. But its poison pill – which bars Icahn from upping his stake and makes a takeover more difficult – remains in place. The investor should see this fight through to the end.
U.S. junk bonds are time bomb with a long fuse 29 Dec 2017 Low default rates, a lack of alternatives and foreign demand will support high-yield bonds in 2018. Yet with spreads near record lows, covenants weak and leverage rising, the seeds of a bear market are plentiful. Investors should keep a wary eye for the first shoots of trouble.
Trump tax cut is sack of coal for foreign banks 29 Dec 2017 The U.S. president says reduced corporate taxes are a Christmas present. But a levy on interest payments to overseas companies could hit lenders with U.S. subsidiaries. The provision, the base erosion and anti-abuse tax, might even cancel out the benefit of a lower headline rate.
Wanted: Italian-American carmaker seeks new driver 29 Dec 2017 CEO Sergio Marchionne will soon head for FCA’s off ramp. A blizzard of well-timed deals helped spark stellar returns, but the group has low margins and big gaps. Marchionne also wears too many hats. Breakingviews imagines a consultant advising the board on picking his successor.
Apple and Saudi test out their comfort zones 28 Dec 2017 Saudi Arabia’s large population and income make it logical that the smartphone giant is in talks to open a shop. Enticing a cutting-edge global tech firm would also gloss the crown prince’s rule and modernizing campaign. There are risks for both; Saudi’s gamble may be bigger.
U.S. buyback surge will incinerate wealth in 2018 28 Dec 2017 Companies will get a windfall from Republican tax cuts and repatriated profits. The White House claims the money will spur jobs and wages, but a similar Bush policy mostly fueled share repurchases. If GE’s experience is any guide, the largesse will burn value on a grand scale.
Wells Fargo boss will vault over bank’s woes 28 Dec 2017 Tim Sloan will contend for banking’s comeback award in 2018. He struggled in his first year to contain fallout from the lender’s fake-accounts fiasco, but he’s cleaning up the company and, crucially, its culture. That should get investors, regulators and customers back onside.
Temperance is the new craft beer for drinks groups 28 Dec 2017 Health awareness and restrained young drinkers are driving demand for booze-free tipples. Growth in volumes of low-alcohol beer will outstrip traditional drinks fivefold next year. It’s a new source of expansion for global companies as the craft beer craze loses its froth.
GE exits 3D-printing fight only slightly bruised 27 Dec 2017 The U.S. group ended a 15-month tussle for ownership of Sweden’s Arcam by buying hedge fund Elliott’s stake at a modest premium. GE should benefit from having full control of a technology critical to its aviation business, even if it nets Elliott’s Paul Singer a handsome profit.
Hulu’s slimmed-down ownership adds complexity 27 Dec 2017 Disney will have a majority stake in the streaming service after absorbing Fox’s 30 pct share. A further 30 pct sits with Comcast, currently muzzled because of an antitrust deal struck with regulators. It’s likely one will end up owning Hulu outright – but not without a fight.
Once-stodgy banks will gain upper hand in fintech 27 Dec 2017 Scandals hit SoFi and Lending Club. Earnest’s down-round sale showed building scale is hard. Such ill fortune is a boon for traditional players as they start cranking out more of their own tech-enabled tools to improve customer service and cut costs. It’s their battle to lose.
Even rich geeks can’t escape the Grim Reaper 22 Dec 2017 Silicon Valley’s best and brightest have earned fortunes by solving complex problems. Now many are turning brains and wealth toward conquering death. Applying an engineering mindset to health issues may benefit humanity, but it’s more likely to burn capital than discover the fountain of youth.
Big Oil’s discipline reinforces shale’s swing role 22 Dec 2017 OPEC’s restraint has put a floor under the price of crude, but big oil companies will put a lid on it in 2018. Majors worried about oversupply will tighten budgets and focus on areas with quick payback. U.S. shale will be the big beneficiary, reinforcing its global influence.
Taxes done, Paul Ryan has pick of Midwest boards 22 Dec 2017 The U.S. House speaker just delivered Corporate America its biggest gift ever by cutting rates to 21 pct. As he considers his next move, Ryan's wonkiness wins out over his schmoozer credentials, making Wall or K Streets a bad fit. Breakingviews imagines a recruiter's pitch.