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Boeing needs MAX insurance more than a dividend

22 January 2020

The $175 bln aircraft giant’s new CEO, David Calhoun, says he won’t cut its $4.6 bln a year dividend. Yet Boeing will burn cash as long as the 737 MAX remains grounded. Borrowing more can paper over problems, but cutting the payout would be prudent in case of further delays.

Billionaires’ cash wins over critics in U.S. race

22 January 2020

Mike Bloomberg and Tom Steyer boosted their presidential poll ratings after doling out a total of $380 mln for political ads. That’s more than twice the outlay of all other contenders combined. But Bernie Sanders’ small-donor approach may well prove more potent in the end.

Italy’s honeymoon with EU is under threat

22 January 2020

Luigi Di Maio looks set to step down as head of the 5-Star Movement, the largest party in the ruling coalition. That will strain the alliance. If a crucial regional election on Sunday produces a victory for eurosceptic Matteo Salvini, it may imperil the fragile pro-EU government.

How Jamie Dimon can grab Larry Fink’s green halo

21 January 2020

Now that the BlackRock boss has got serious about climate change, the focus is on his JPMorgan peer. As CEO of the biggest U.S. bank, Dimon’s sway over corporate debt gives him more power than any equity activist. Deploying it would turn his bank from laggard to leader.

Netflix investors risk ruing streaming-stock binge

21 January 2020

Reed Hastings’ firm has little if any need for TV ratings, box-office sales or ads, unlike rivals. Shareholders focus on subscriber and revenue growth, fueling its stock-market success. But a slowdown in new users and an excessive, if declining, cash burn put that under threat.

Democratizing U.S. data access has drawbacks

21 January 2020

Plans to change how journalists handle some releases, including the crucial jobs report, aim to ensure traders and the public get them at the same time. But markets may become jumpier. And those with big bucks will still contrive to get the data a few microseconds sooner.

Donald Trump wins most insufferable title at Davos

21 January 2020

It’s a high bar, but the U.S. president is in an acutely braggadocious mood. He signed a China trade deal, stocks are at record highs and Iran’s top general is dead. Impeachment aside, the global elite will be even more annoyed by him because he has real things to brag about.

Africa’s richest woman is Angola’s trickiest issue

20 January 2020

The petrostate’s government is scrutinising the $2 bln business empire of Isabel dos Santos. Reports of nepotism clearly hurt the daughter of Angola’s ex-ruler. But proving graft will be hard, and seizing her stakes in local firms might hit the economy.

The gayest Davos in history still isn’t gay enough

20 January 2020

Adding an LGBTQ panel to the annual outing and giving an award to a transgender artist beats the “don’t ask, don’t tell” posture of the past. But with 70 countries still persecuting same-sex relations, and many WEF corporate sponsors supportive of equality, more can be done.

Inequality extends to hedge fund elite

20 January 2020

The top 20 managers like Ray Dalio and George Soros have made over $550 bln for investors over time. In part that’s longevity, but the group also raked in a third of industry gains in 2019 on under a fifth of assets. Most hedgies are still struggling to outrun cheap index funds.

Guest view: Extinction Rebellion, finance’s friend

20 January 2020

The radical UK climate movement may sound like the corporate sector’s last idea of a kindred spirit. But spokesperson Rupert Read argues its focus on fast, deep carbon reductions are simple common sense, for financiers too. That’s why he is in Davos this week.

China’s shadow bankers sneak back to market

17 January 2020

GDP grew 6.0% last quarter, but lending disappointed. A drive to cut bad debt while pushing banks to prop up small risky firms has squeezed healthier private companies. With informal, pricey credit moving to fill the gap, officials may have to tolerate a shadow loan revival.

Exxon is climate activism’s great white whale

16 January 2020

The $292 bln oil producer is too big to push around, even though it’s at odds with green priorities of investors like BlackRock. Boss Darren Woods almost never shows up for earnings calls. Still, shareholders could land a blow by aiming anew at Woods’ dual chair-and-CEO role.

Bombardier trips twice in deleveraging two-step

16 January 2020

The indebted Canadian group warned 2019 profit would fall short. It’s trying to cut borrowing, so the last thing it needs is a charge against rail projects combined with a possible cash call at its joint venture with Airbus. Exiting the JV in a hurry may be the least bad option.

Morgan Stanley puts decent cap on forgettable year

16 January 2020

The Wall Street firm’s 2019 revenue hit $41 bln, partly thanks to lumpy private equity gains. Overall, strong wealth management was offset by relatively weak trading. More worryingly for 2020, costs outpaced revenue. At least James Gorman isn’t the only CEO with room to improve.

Wannabe bank Goldman should take its own advice

15 January 2020

Its vaunted consumer bank still makes less than $1 bln, and building it is a grind. If it were a client, Goldman would be preparing a pitchbook of acquisition targets by now. America has plenty of bite-sized banks, and the political environment may be as friendly as it gets.

Putin picks good time for Potemkin reshuffle

15 January 2020

The Russian government has resigned, amid plans to change the constitution. However it’s resolved, Vladimir Putin’s grip on the state he has ruled for two decades will endure. But given the manner of the extension still matters, he has chosen a relatively calm time to act.

BofA’s Moynihan is a survivor if not a winner

15 January 2020

The $318 bln lender’s boss oversaw shrinking revenue last quarter as rivals’ grew. The bank routinely reports middling returns on equity and as an investment has been just okay. But given the hand he was dealt, Brian Moynihan’s 10-year stint looks like a financial success story.

Germany’s rich-country problems matter for Europe

15 January 2020

The continent’s biggest economy grew just 0.6% in 2019. A hefty budget surplus creates room for fiscal stimulus. But Chancellor Angela Merkel’s coalition government is divided over what to do and may not act decisively enough. What hurts domestic growth hurts regional prospects.