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Daily from Wall Street, Feb 15

 

 

  • Exclusive: EU preparing early China summit in message to Trump – Reuters informs frmom  sources

BRUSSELS The European Union is preparing an early summit with China in April or May in Brussels to promote free trade and international cooperation in the face of a more protectionist and inward-looking Washington, three EU officials said.

China and the EU hold a summit every year, usually in July, and a date has yet to be fixed formally for 2017. One of the officials said Beijing had requested it to take place as early as possible. China’s Foreign Ministry declined to comment.

“With an early summit, China wants to send a message to the United States that it has friends in Europe,” said one official, who helps formulate EU policy.

Today’s Markets

In Asia, Japan +1%. Hong Kong +1.2%. China +0.2%. India -0.7%.
In Europe, at midday, London +0.4%. Paris +0.5%. Frankfurt +0.2%.

Ten-year Treasury Yield +1 bps to 2.48%

Wall Street opened mixed on Wednesday after inflation rate came above expectations at 2.5%.  Yet, the Dow Jones gained 31 points or 0.2% to 20,535.63, a new high and the Nasdaq rose 5 points or near 0.1% to 5,787.21, also a fresh high.

Tuesday’s Key Earnings

AIG (NYSE:AIG) -4.5% AH due to a large reserve charge.
Devon Energy (NYSE:DVN) +1% AH beating expectations.
LendingClub (NYSE:LC) -6.5% AH plagued by its scandal.
T-Mobile (NASDAQ:TMUS) +1.2% after topping estimates.

 

dollar-win-strike-jpg

The Dollar Index is extending its recent winning streak on this move – now up 11 days in a row, the longest streak since May 2012.

 

Stocks

Shares in Toshiba tumbled almost 9% overnight after the conglomerate said it would book a $6.3B hit to its U.S. nuclear unit. Facing a March 27 deadline to avoid a delisting, CEO Satoshi Tsunakawa said he would consider selling the entire memory chip division, a reversal of a previous plan to limit the sale to 20%. That would leave Toshiba (OTCPK:TOSYY) with few growth prospects, relying on public infrastructure projects, elevators and a struggling consumer electronics business.

SoftBank’s Masayoshi Son, who has boasted of creating the “Berkshire Hathaway of tech,” has thrown himself into the world of private equity and hedge funds with a $3.3B acquisition of Fortress Investment Group (NYSE:FIG). The deal comes as SoftBank (OTCPK:SFTBY) emerges as one of the world’s largest investors with the imminent launch of its record-setting $100B technology fund. FIG climbed 27.2% in after-hours trading.

The Obamacare exodus continues… this time with a major health insurer. Humana (NYSE:HUM) said it will pull out of the Affordable Care Act marketplace in 2018, making the announcement after it ended a merger agreement with Aetna (NYSE:AET). President Trump said the decision was proof that “Obamacare continues to fail” and “will repeal, replace & save healthcare for ALL Americans.”

Meanwhile, Cigna is looking to terminate its merger agreement with Anthem (NYSE:ANTM), seeking a $1.85B break-up fee and additional damages exceeding $13B. The suit comes in the wake of a federal court’s decision blocking the planned $54B merger between the two insurers – a deal Cigna (NYSE:CI) argues is effectively dead. Wave good-bye to U.S. health insurer consolidation?

In its biggest year to date, the U.S. solar market nearly doubled its annual record, according to Greentech Media, topping out at 14,625 megawatts of solar PV installed in 2016. More records? For the first time ever, U.S. solar ranked as the number one source of new electric generating capacity, while growth of nonresidential installations surpassed residential solar for the first time since 2011. Related tickers: ASYS, AXTI, CSIQ, CSUN, CVV, DQ, EMKR, ENPH, FSLR, GEX, GLBL, HQCL, JASO, JKS, RGSE, SEDG, TSLA, SOL, SKYS, SPWR, TAN, TERP, TSL, VSLR, YGE

Due to problems with the output voltage, Toyota (NYSE:TM) is recalling all of its Mirai fuel cell vehicles. The automaker has about 2,800 of the zero-emissions cars on the road in Japan, the U.S., some markets in Europe and the UAE. Toyota dealers will update the fuel cell system software at no cost to the customer (the process will take about half an hour).

Pilots at American Airlines have denounced the carrier’s chief executive, Doug Parker, citing his decision last week to skip a meeting with President Trump. The Allied Pilots Association issued a symbolic vote of “no-confidence” in his leadership abilities, and cited lagging pay increases and “questionable economic and strategic decisions.” At the time, American (NASDAQ:AAL) said Parker would miss the meeting due to a previously scheduled event.

With more countries engaging in cyber attacks against each other, more civilians are being caught in the crossfire. That’s why Microsoft (NASDAQ:MSFT) President Brad Smith is calling for a “Digital Geneva Convention.” World governments would pledge not to hack the private sector or stockpile security vulnerabilities to steal user data, and promise to work with businesses to identify security threats when they occur.

Currently in charge of Today, Noah Oppenheim has been named the new president at NBC News (NASDAQ:CMCSA), replacing Deborah Turness. Alongside, NBC News is tapping into the international market with its purchase of a 25% holding in Euronews (to be renamed Euronews NBC). The network reaches 277M households across EMEA, but has a small viewership. NBC reportedly spent about $30M for its stake.

Facebook has announced a soon-to-come app that will allow users to stream videos in their news feed through set-top boxes such as Apple TV (NASDAQ:AAPL), Samsung Smart TV (OTC:SSNLF) and Amazon Fire TV (NASDAQ:AMZN). The move extends Mark Zuckerberg’s effort to transform Facebook (NASDAQ:FB) into a “video-first” company and compete for TV ad dollars.

CEO Jack Dorsey bought $7M worth of TWTR shares this week, showing investors just how much confidence he has that Twitter can turn around its business. He tweeted about the stake on Valentine’s Day, appropriately adding the hashtag “Love Twitter.” The 426,000 shares ranged in price from $15.84 to $16.60.

Around the industry, it’s known as getting “blanked,” or getting a “goose egg,” or “doughnut.” Goldman Sachs (NYSE:GS) didn’t pay any 2016 bonuses to about 100 investment bankers, according to Bloomberg, signaling that their services are best provided elsewhere. According to sources, the move is more draconian than in the past when underperformers still got a little something and the absolute number (100) is also larger than past years.

Investor moves: Procter & Gamble (NYSE:PG) +2.7% premarket after Nelson Peltz’s Trian Fund Management took a $3.5B stake in the company. Warren Buffett’s Berkshire Hathaway (BRK.A, BRK.B) sharply increased bets on airlines (LUV, DAL, AAL), Apple (AAPL) and Sirius XM (NASDAQ:SIRI) in Q4, while taking a stake in Monsanto (NYSE:MON). In another 13F filing, Carl Icahn listed increased holdings in Herbalife (NYSE:HLF) and Hertz (NYSE:HTZ), but exited his stake in Voltari (NASDAQ:VLTC).

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