Trump’s fanciful budget relies on voodoo economics 22 May 2017 Paid parental leave and caps on repaying student loans sound appealing. But the rest of the president’s budget plan to cut $3.6 trln relies on pie-in-the-sky assumptions about employment rates and reforming Obamacare and welfare. It’s a non-starter even for a Republican Congress.
Bill Ford deserves some blame for carmaker pain 22 May 2017 The Model T creator's great-grandson won plaudits for stepping down as CEO in 2006. But as executive chairman he was on hand for everything that led to Mark Fields’ ouster. The family's supervoting stake guarantees Ford’s job, but slashing his 2017 pay should be a no-brainer.
Wal-Mart’s online therapy may revive ailing retail 22 May 2017 Embracing e-commerce sparked a turnaround at the behemoth, while stocks plummeted at internet laggards Macy’s, J.C. Penney and others after poor sales. The industry’s online revenue is set to grow 70 pct by 2021. Stragglers risk ceding yet more business to Wal-Mart and Amazon.
Wasted time is U.S. healthcare’s big hidden cost 22 May 2017 America spends 18 pct of GDP on the medical-industrial complex, almost double most countries and for poorer results. Yet the figure excludes the effort of finding approved doctors, getting reimbursed and the like. That makes the potential gains of health reform even greater.
Clariant-Huntsman tests formula for big M&A 22 May 2017 The $14 bln Swiss-American chemicals merger stacks up strategically, is fairly priced and could create $2.6 bln in post-tax savings. Yet the market initially factored in only half of the upside. The unpredictability of antitrust vetting and U.S. politics may explain the gap.
CEO ejection hardly gets Ford back in the race 22 May 2017 The $43 bln carmaker lags domestic rivals on many fronts, including self-driving and electric vehicles. The stock's 36 pct decline under Mark Fields was the most visible manifestation of it flaws. But naming a 62-year-old furniture executive to replace him is a puzzling remedy.
Saudis place $20 bln bet against U.S. dysfunction 21 May 2017 The Kingdom's pledge to Blackstone may turn into $100 bln of firepower aimed at upgrading American infrastructure. The problem is finding states and cities that want private cash. Riyadh will need a lot more patience than with its equally huge SoftBank-led tech venture.
OPEC caught in vicious Permian cycle 19 May 2017 As President Trump heads to Saudi Arabia, the oil cartel looks set to extend production cuts. It may buoy prices and keep drills running. But efficient U.S. wells in the Permian and elsewhere will benefit most, limiting increases. It’ll be hard for OPEC to regain the upper hand.
Review: Democrats’ chief firebrand fumbles message 19 May 2017 Elizabeth Warren's "This Fight is Our Fight" reads like a marker for a 2020 White House run. The senator from Massachusetts targets Donald Trump, lobbyists and Wall Street. Tales of struggling Americans are engagingly woven into the outrage. But her rote views limit her appeal.
Active-passive battle will end in ceasefire 19 May 2017 Index-trackers are eating into traditional investment managers' business – and could soon own half of U.S. equities held in funds. Even so, managers can find refuge in some places, like emerging-country debt. Shrinking market share may also help active investors outperform.
Alpha-seekers hedge their bets on America 18 May 2017 Despite being rejected by the White House, erstwhile fund manager Anthony Scaramucci is keeping the faith in Trump and his agenda. Many billionaire investors at his Sin City shindig are shorting the trade. Their money is on making European and emerging-market returns great again.
Guest view: U.S. energy independence is flawed aim 18 May 2017 The Trump administration is making oil self-sufficiency a top priority. Pursuing such a policy, however, puts the country at risk of missing out on important benefits of being a global buyer and seller, EY energy analysts argue. Interdependence, they say, is the better option.
Cox: Time to contemplate Mike Pence-onomics 18 May 2017 There is a whiff of impeachment in the air in Washington. That may still be an unlikely outcome, but Donald Trump's flawed stewardship of the Oval Office should be inspiring risk managers to run their rules over the fiscal views of the vice president from central casting.
Elliott turns activist hose on burning Bush 18 May 2017 Medical-software firm Athenahealth trades at a big discount to rivals after expanding poorly and often missing estimates. Elliott’s 9 pct stake in the $5 bln company should allow it to douse colorful and erratic founder Jonathan Bush’s role as boss or force an outright sale.
Alibaba’s $6bln buyback disrupts financial reality 18 May 2017 Repurchasing shares will offset dilution from paying staff in equity, the Chinese e-commerce giant says. Only, buybacks don’t do that as they leave companies with less cash. Alibaba is replacing one pretence – that investors should ignore stock-based compensation – with another.
SoftBank’s $100 bln fund looms over satellite deal 18 May 2017 The Japanese telco's OneWeb unit is offering creditors in rival Intelsat slightly better terms, while giving its shareholders less. Boss Masayoshi Son had to find a way to get this merger done, without making it so costly it could not be folded into his new mega-fund.
Trump visit exposes Saudi Arabia’s insecurity 18 May 2017 The U.S. president is heading to Riyadh to rejuvenate an ailing alliance. Trade has suffered and America’s shale oil boom has undermined the kingdom’s status as a key energy supplier and security priority. Rather than build confidence, Trump’s trip could open old wounds.
Insurers take one step closer to intelligibility 18 May 2017 New accounting rules will force insurers to give a clearer picture of their liabilities. That should sweep aside national oddities, and stop firms using outdated assumptions that complicate comparisons. Yet while a step forward, aligning capital positions will remain a chore.
Viewsroom: CEO presidency needs boardroom pushback 17 May 2017 Donald Trump’s promise to run the government like a business is proving difficult but Congress could act like strong independent directors to rein in his wayward management. China’s ambitious Silk Road project could leave its people holding the bag. Plus: job cuts at Ford.
Wall Street waking up to Washington reality 17 May 2017 A notable dip in the S&P 500 Index represents only a minor setback for the so-called Trump rally. The dollar, however, has given back nearly all its post-election gains. Treasury yields also have retrenched. Stockholders remain too optimistic about any D.C. policy uplift.