• Broker wars go crypto as Thiel-backed startup BlockFi offers free trades
    Yahoo Finance

    Broker wars go crypto as Thiel-backed startup BlockFi offers free trades

    New Jersey-based BlockFi is extending their services to allow customers to trade their cryptocurrencies with zero fees attached.

  • Paypal (PYPL) Stock Sinks As Market Gains: What You Should Know
    Zacks

    Paypal (PYPL) Stock Sinks As Market Gains: What You Should Know

    Paypal (PYPL) closed at $104.59 in the latest trading session, marking a -0.39% move from the prior day.

  • Microsoft (MSFT) Gains But Lags Market: What You Should Know
    Zacks

    Microsoft (MSFT) Gains But Lags Market: What You Should Know

    In the latest trading session, Microsoft (MSFT) closed at $149.93, marking a +0.05% move from the previous day.

  • Visa (V) Outpaces Stock Market Gains: What You Should Know
    Zacks

    Visa (V) Outpaces Stock Market Gains: What You Should Know

    Visa (V) closed at $181.99 in the latest trading session, marking a +0.77% move from the prior day.

  • Thomson Reuters StreetEvents

    Edited Transcript of GS earnings conference call or presentation 15-Oct-19 3:00pm GMT

    Q3 2019 Goldman Sachs Group Inc Earnings Call

  • Amazon Roundup: Thanksgiving Weekend Results & More
    Zacks

    Amazon Roundup: Thanksgiving Weekend Results & More

    Amazon challenged Pentagon contract award to Microsoft as the holiday season started.

  • Fourth Quarter & 2020 Earnings Previews & Buy RH Stock at New Highs?
    Zacks

    Fourth Quarter & 2020 Earnings Previews & Buy RH Stock at New Highs?

    The latest U.S.-China trade war updates and some positive U.S. economic data. A dive into third quarter 2019 earnings and what to expect from Q4 and 2020. Plus, a look at why RH is a Zacks Rank 1 (Strong Buy) stock right now...

  • Saudi Aramco Raises $25.6 Billion in World’s Biggest IPO
    Bloomberg

    Saudi Aramco Raises $25.6 Billion in World’s Biggest IPO

    (Bloomberg) -- Saudi Aramco raised $25.6 billion from the world’s biggest initial public offering, closing a deal that became synonymous with the kingdom’s controversial crown prince and his plans to reshape the nation.The state-owned oil giant set the final price of its shares at 32 riyals ($8.53), valuing the world’s most profitable company at $1.7 trillion. It received total bids of $119 billion.For Crown Prince Mohammed Bin Salman, pulling off the sale could help get his ambitious plan to overhaul the economy back on track. It’s been derailed by problems at home, including the backlash against his purge of the elite, and abroad by the outrage over the murder of Washington Post columnist Jamal Khashoggi and the war in Yemen.But the deal ended up being very different from what the prince had envisaged when he first floated the idea in 2016 with an ambition to raise as much as $100 billion. Aramco offered just 1.5% of its shares and opted for a local listing after global investors balked at its hopes of valuing the company at $2 trillion.Instead, Aramco relied heavily on local investors and funds from neighboring Gulf Arab monarchies. In the offering for individuals, almost 5 million people applied for shares. The institutional tranche closed on Wednesday and attracted bids totaling 397 billion riyals.The kingdom’s richest families, some of whom had members detained in Riyadh’s Ritz-Carlton hotel during a so-called corruption crackdown in 2017, are expected to have made significant contributions. Global banks working on the deal were sidelined after Saudi Arabia decided to focus on selling the shares to local and regional investors.Still, Aramco will become the world’s most valuable publicly traded company once it starts trading, overtaking Microsoft Corp. and Apple Inc.The deal opens up one of the world’s most secretive companies, whose profits helped bankroll the kingdom and its ruling family for decades, to investors and Saudi individuals. Until this year, Aramco had never published financial statements or borrowed in international debt markets.It will also mean the company now has shareholders other than the Saudi government for the first time since it was nationalized in the late 1970s.Saudi Arabia had been pulling out all the stops to ensure the IPO is a success. It cut the tax rate for Aramco three times, promised the world’s largest dividend and offered bonus shares for retail investors who keep hold of the stock.Goldman Sachs Group Inc., acting as share stabilizing manager, has the right to exercise a so-called greenshoe option of 450 million shares. The purchase option can be executed in whole or in part at any time on or before 30 calendar days after the trading debut. It could raise the IPO proceeds to $29.4 billion.Funds from the sale will be transferred to the Public Investment Fund, which has been making a number of bold investments, plowing $45 billion into SoftBank Corp.’s Vision Fund, taking a $3.5 billion stake in Uber Technologies Inc. and planning a $500 billion futuristic city.The sale is the first major disposal of state assets since Prince Mohammed launched a much-touted plan to reduce the economy’s addiction to oil revenue in 2016.The last major government privatization, the 2014 IPO of National Commercial Bank, received $83 billion in subscriptions from investors.\--With assistance from Nour Al Ali, Claudia Maedler, Bruce Stanley and Archana Narayanan.To contact the reporter on this story: Matthew Martin in Dubai at mmartin128@bloomberg.netTo contact the editors responsible for this story: Stefania Bianchi at sbianchi10@bloomberg.net, Alaa Shahine, Shaji MathewFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Bloomberg

    Qualcomm Broadens Challenge to Intel in Laptops with New Chips

    (Bloomberg) -- Qualcomm Inc. is under no illusions about how long it will take to make a dent in Intel Corp.’s dominance of the laptop market. But a new set of chips it’s offering will make it tougher to keep Qualcomm out of computers.San Diego-based Qualcomm, whose processors are the heart of most of the world’s high-end smartphones, is trying to carve out a niche for its technology with laptops that last more than a day on a single battery charge and are always connected to the internet. Current models, such as Microsoft Corp.’s Surface Pro X, cost more than $1,000. Qualcomm is now rolling out new chips that will allow PC makers to build machines that compete with budget systems retailing for as low as $300.“We were not confused. We knew this market would take a long time,” said Qualcomm product director Miguel Nunes. “We still understand it’s going to take longer.”More affordable devices will help, Nunes said. But Qualcomm and other interlopers need new ways to reach consumers if they’re to overcome Intel’s brand recognition and marketing spending. One thing that’s helping is the sale of Qualcomm chip-based laptops by mobile phone service providers. Like phones, they’re increasingly being offered on monthly installment purchase plans, making the devices more affordable, Nunes said. Carriers like the cellular component of Qualcomm chips which ties customers to their networks, he said.Corporations like the idea that the the machines they give to employees are always connected to the internet. Interest from that market has surprised Qualcomm. Knowing where the machines are and being able to update them all the time are advantages of a cellular link, Nunes said.Qualcomm’s attempts to get into PCs are part of a broader push to push mobile technology into devices outside of the smartphone market. Growth in smartphones has slowed as consumers have shown less interest in upgrading to devices that offer marginal improvements over existing models. Qualcomm is targeting PCs in particular where it believes chips based on mobile technology can offer huge improvements in battery life, promised but not delivered by Intel-based devices, and have them continually connected to the internet.“One of the challenges we’ve seen is that the computing industry was plagued by a lot of lies when you talk about battery life,” Nunes said. “Consumers don’t believe you.”Qualcomm-based devices go days without needing to be plugged in, he said. With coming fifth-generation networks, they’ll also get extremely fast data all the time, enabling them to take advantage of more powerful computing over the internet, he said.The company is holding its annual conference in Hawaii. It has introduced new 5G chips for mobile phones, including ones that will enable cheaper handsets from early next year, and a new offering for virtual reality and augmented realty headsets.To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.netTo contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Molly Schuetz, Andrew PollackFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Bloomberg

    Amazon Suit Claims Trump Bias Tainted Cloud Bid, Judge Says

    (Bloomberg) -- Amazon.com Inc. claims it lost a Pentagon cloud contract valued at as much as $10 billion because of political interference by President Donald Trump, according to the judge overseeing the case.Federal Claims Court Judge Patricia Campbell-Smith said during a court proceeding last week that Amazon’s lawsuit argues that the Pentagon didn’t award the cloud deal to Microsoft Corp. on the basis of a fair evaluation of the companies’ bids.“Plaintiff contends that the procurement process was compromised and negatively affected by the bias expressed publicly by the president and commander in chief Donald Trump against plaintiff,” Campbell-Smith said in a recording of a status hearing released Thursday by the U.S. Court of Federal Claims in Washington.The judge’s comments were the first public confirmation that Amazon cited bias by Trump as grounds to overturn the award to Microsoft. Trump has long criticized Amazon founder Jeff Bezos on everything from the shipping rates his company pays the U.S. Postal Service to his personal ownership of what Trump calls “the Amazon Washington Post.”The contract was awarded to Microsoft “despite what plaintiff characterizes as its depth of experience, superior technology and proven record of success in handling the most sensitive government data,” Campbell-Smith said.Amazon filed a lawsuit under seal with the court last month to formally protest its loss of the Pentagon’s Joint Enterprise Defense Infrastructure, or JEDI, cloud contract.For More: Amazon’s $10 Billion Pentagon Challenge: Proving Trump MeddledCampbell-Smith said Amazon is seeking to prohibit the Defense Department from proceeding without a new evaluation or award decision. The company is requesting that the Pentagon either reevaluate bids or reopen the procurement to allow for bid revisions, the judge said.Campbell-Smith also granted Microsoft’s request to intervene in the suit.In July, Trump stunned lawmakers and technology companies when he openly questioned whether the JEDI contract was being competitively bid, citing complaints from Microsoft, Oracle Corp. and International Business Machines Corp.Dana Deasy, the Pentagon’s chief information officer, said during his confirmation hearing in late October that to the best of his knowledge, no one from the White House reached out to any members of the JEDI cloud contract selection team.The Pentagon’s JEDI cloud project is designed to consolidate the department’s cloud computing infrastructure and modernize its technology systems. The contract is worth as much as $10 billion over 10 years and could offer the winner a bigger foothold in the burgeoning federal cloud market.(Updates with Amazon seeking new evaluation and decision from seventh paragraph)To contact the reporter on this story: Naomi Nix in Washington at nnix1@bloomberg.netTo contact the editors responsible for this story: Sara Forden at sforden@bloomberg.net, Larry LiebertFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • USD/CAD – Canadian Dollar Hits 1-Mth High
    FX Empire

    USD/CAD – Canadian Dollar Hits 1-Mth High

    The Canadian dollar is steady on Thursday, after an optimistic Bank of Canada rate statement boosted the currency. Higher oil prices have also contributed to the Canadian dollar gaining ground.

  • Zacks Market Edge Highlights: AAPL, GM, MSFT, SHW and VOO
    Zacks

    Zacks Market Edge Highlights: AAPL, GM, MSFT, SHW and VOO

    Zacks Market Edge Highlights: AAPL, GM, MSFT, SHW and VOO

  • Bloomberg

    ‘Fake Ebitda’ to Worsen Next Slump, $33 Billion Debt Maven Warns

    (Bloomberg) -- Alan Waxman was just 31 when he made partner on a Goldman Sachs team that bet the firm’s own cash for wild profits. He later co-founded TPG Sixth Street Partners and helped build it into a $33 billion force in credit markets.Now he’s raising alarms about those same markets.In a private conference earlier this week, Waxman, 45, warned investors there’s an epidemic of fake earnings projections that will be exposed in the next economic slump and may even exacerbate it. Too many companies are addicted to making creative accounting adjustments that bump up operating profits known as Ebitda -- and investors are turning a blind eye, he said, according to a person with knowledge of his comments.“It’s not normal, as a lender, to lend money against fake Ebitda and fake collateral,” he said in the presentation.In theory, lenders focus on Ebitda -- an acronym for earnings before interest, taxes, depreciation and amortization -- to get a clear sense of a company’s financial health before it pays down its debts. Yet suspicions have mounted in recent years that some executives are padding their projections for Ebitda. In 2017, one Moody’s analyst coined a new definition for Ebitda: Eventually busted, interesting theory, deeply aspirational.Much of the consternation focuses on adjustments known as “add-backs,” in which companies exclude certain expenses from future earnings. A traditional add-back, for example, could account for the expected savings from a cost-cutting program. But some companies have resorted to creative or aggressive items with descriptions that can be difficult to understand. Last year, a Federal Reserve official called out the use of add-backs as an area of mounting concern.Inflating Ebitda distorts the loan-to-value ratio that guides the $2.9 trillion market for junk bonds and loans in the U.S. and Europe, he said. Part of the problem, Waxman said in his presentation, is that investors have tolerated so much deviant behavior that it has become normalized.Some companies and their private-equity owners are goosing projections and presenting assumptions about returns that are more aggressive than their own internal models, he said. One alarming stat he points to: More than half the companies that were part of a leveraged buyout in 2016 missed their earnings projections by more than 25% last year. And that’s in a growing economy.The result is that in many cases creditors actually have a smaller cushion between the last dollar of risk they take and the real value of the company to which they lend, he said. There’s also a risk investors are committing capital based on an available pool of collateral that could disappear because of the lack of restrictive covenants that have historically protected lenders -- “fake collateral”, as Waxman put it.“The sacred lending principle of loan-to-value integrity is the single most important thing in credit investing,” he said. “When it is severely compromised, as it is now, credit stops being credit. It’s just cheap capital.”Waxman helped start his firm in 2009, a year after leaving Goldman Sachs Group Inc., with $2 billion from buyout fund TPG and much of his old team from Goldman. At the time, it was called TPG Opportunities Partners. Now often referred to as TSSP, the firm has returned 20% annualized, before fees, over the last decade.One prominent example of a company whose figures have confounded investors in recent times was office-sharing firm WeWork, which became known for its reliance on an unconventional accounting metric known as “community-adjusted Ebitda.” The company said it captured the profitability of WeWork locations, excluding general and administrative expenses. But the benchmark was questioned by analysts after it first came up in financial documents tied to a 2018 bond sale. It surfaced again in early drafts of the company’s S-1 filing for a public stock debut, only to be omitted from the final version.“The party will go on in the leverage finance markets until we have a catalyst,” Waxman told investors.The catalyst will most likely come from the BBB-rated credit market, where 43% of debt is levered over 4 times, according to Waxman. About 70% of that universe is at risk of losing its investment grade status, he said. Once that happens, the quantity of debt will overwhelm the high-yield market and create substantial dislocations, he said.A $1 Trillion Powder Keg Threatens the Corporate Bond Market\--With assistance from Davide Scigliuzzo.To contact the reporters on this story: Sridhar Natarajan in New York at snatarajan15@bloomberg.net;Katia Porzecanski in New York at kporzecansk1@bloomberg.netTo contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, ;Sam Mamudi at smamudi@bloomberg.net, David Scheer, Dan ReichlFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Zacks.com featured highlights include: ResMed, Microsoft, Zoetis and Ruth's Hospitality
    Zacks

    Zacks.com featured highlights include: ResMed, Microsoft, Zoetis and Ruth's Hospitality

    Zacks.com featured highlights include: ResMed, Microsoft, Zoetis and Ruth's Hospitality

  • Cboe Global's (CBOE) November Volumes Weak, Decline Y/Y
    Zacks

    Cboe Global's (CBOE) November Volumes Weak, Decline Y/Y

    Cboe Global's (CBOE) November volumes reflect decrease in options and futures contract.

  • MongoDB (MDB) to Report Q3 Earnings: What's in the Offing?
    Zacks

    MongoDB (MDB) to Report Q3 Earnings: What's in the Offing?

    MongoDB's (MDB) third-quarter fiscal 2020 results are expected to reflect the growing adoption of its cloud-based platform, Atlas.

  • Citrix Expands Ties With Amazon for Improved ADC Deployment
    Zacks

    Citrix Expands Ties With Amazon for Improved ADC Deployment

    Citrix (CTXS), in collaboration with AWS, is striving to boost efficiency of Citrix ADC deployment in hybrid environments.

  • Warren Is Drafting U.S. Legislation to Reverse ‘Mega Mergers’
    Bloomberg

    Warren Is Drafting U.S. Legislation to Reverse ‘Mega Mergers’

    (Bloomberg) -- U.S. Senator Elizabeth Warren is drafting a bill that would call on regulators to retroactively review about two decades of “mega mergers” and ban such deals going forward.Warren’s staff recently circulated a proposal for sweeping anti-monopoly legislation, which would deliver on a presidential campaign promise to check the power of Big Tech and other industries. Although the Trump administration is currently exploring their own antitrust probes, the proposal is likely to face resistance from lawmakers.According to a draft of the bill reviewed by Bloomberg, the proposal would expand antitrust law beyond the so-called consumer welfare standard, an approach that has driven antitrust policy since the 1970s. Under the current framework, the federal government evaluates mergers primarily based on potential harm to consumers through higher prices or decreased quality. The new bill would direct the government to also consider the impact on entrepreneurs, innovation, privacy and workers.Warren’s bill, tentatively titled the Anti-Monopoly and Competition Restoration Act, would also ban non-compete and no-poaching agreements for workers and protect the rights of gig economy workers, such as drivers for Uber Technologies Inc., to organize.A draft of Warren’s bill was included in an email Monday from Spencer Waller, the director of the Institute for Consumer Antitrust Studies at Loyola University Chicago. Waller urged fellow academics to sign a petition supporting it. He said Warren was working on the bill with Representative David Cicilline, the most prominent voice on antitrust issues in the House. Waller declined to comment on the email.Representatives for Cicilline and Warren declined to comment. The existence of the bill and Warren’s support of it were reported earlier this week by the technology publication the Information.In Washington, there is some support across the political spectrum for increased antitrust scrutiny of large technology companies. Warren positioned herself as a leader on the issue this year while campaigning on a plan to break up Big Tech. She has repeatedly called for unwinding Facebook Inc.’s acquisitions of WhatsApp and Instagram, along with Google’s purchase of YouTube and advertising platform DoubleClick.Read more: Warren Accuses Michael Bloomberg of ‘Buying the Election’It’s not clear when a bill would be introduced or whether it would move forward in its current form. Cicilline has said he would not introduce antitrust legislation until he concludes an antitrust investigation for the House Judiciary Committee in early 2020.Amy Klobuchar, a Senator from Minnesota who’s also vying for the Democratic nomination, has pushed legislation covering similar ground. Klobuchar plans to introduce additional antitrust legislation soon, according to a person familiar with the matter who wasn’t authorized to discuss the plans and asked not to be identified.Any proposal would face significant hurdles to becoming law, and Warren’s version could be particularly problematic because it promotes the idea that antitrust enforcement is equivalent to being against big business, said Barak Orbach, a law professor at the University of Arizona who received a draft of the bill. “The way I read it is that Elizabeth Warren is trying to make a political statement in the course of her campaign,” Orbach said. “It’s likely to have negative effects on antitrust enforcement, so I just don’t see the upside other than for the campaign.”The bill proposes a ban on mergers where one company has annual revenue of more $40 billion, or where both companies have sales exceeding $15 billion, except under certain exceptions, such as when a company is in immediate danger of insolvency. That would seemingly put a freeze on many acquisitions for Apple Inc., Alphabet Inc., Facebook, Microsoft Corp. and dozens of other companies. The bill would also place new limitations on smaller mergers.Chris Sagers, a law professor at Cleveland State University, said the proposal would serve as an effective check on corporate power. “I don’t think you’ll have new antitrust policy until Congress says the courts have incorrectly interpreted the statutes,” he said. “Someone has to do what Elizabeth Warren is doing.”(Michael Bloomberg is also seeking the Democratic presidential nomination. Bloomberg is the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News.)To contact the reporters on this story: Eric Newcomer in San Francisco at enewcomer@bloomberg.net;Joshua Brustein in New York at jbrustein@bloomberg.netTo contact the editor responsible for this story: Mark Milian at mmilian@bloomberg.netFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Fear of an Inverted Yield Curve Is Still Alive for 2020
    Bloomberg

    Fear of an Inverted Yield Curve Is Still Alive for 2020

    (Bloomberg Opinion) -- About a year ago to the day, the U.S. yield curve inverted for the first time during this business cycle. Sure, it wasn’t the part that has historically predicted future recessions, but it foreshadowed the more consequential inversion —  the part of the curve from three months to 10 years — which happened in March and lasted for much of the rest of the year through mid-October.This wasn’t much of a shock to Wall Street. Even in December 2017, many strategists saw an inverted yield curve as largely inevitable, with short- and longer-dated maturities meeting somewhere between 2% and 2.5%. That’s just what happened. It was enough to spur the Federal Reserve into action. The central bank proceeded to slash its benchmark lending rate by 75 basis points in just three months. Now the curve looks positively normal again.“Inverted Yield Curve’s Recession Flag Already Looks So Last Year,” a recent Bloomberg News article declared. Indeed, the prospect of the curve steepening in 2020 is drawing money from BlackRock Inc. and Aviva Investors, among others, Liz Capo McCormick and John Ainger reported. Praveen Korapaty, chief global rates strategist at Goldman Sachs Group Inc., told them the spread between two- and 10-year yields will be wider in most sovereign debt markets. PGIM Fixed Income’s chief economist Nathan Sheets said “the global economy has skirted the recession threat.”Yet beneath that bravado, the fear of another bout of yield-curve inversion remains alive and well on Wall Street.John Briggs at NatWest Markets, for instance, predicts the curve from three months to 10 years (or two to 10 years) will invert again, possibly for a couple of months, because the Fed will resist cutting rates again after its 2019 “mid-cycle adjustment.” “I see the economy slowing to below trend growth, the market seeing it and recognizing the Fed needs to do more, especially with inflation low, but the Fed will be slow to respond,” he said in an email. Then there’s Societe Generale, which is calling for the U.S. economy to fall into a recession and for 10-year Treasury yields to end 2020 at 1.2%, which would be a record low. Even though the curve doesn’t invert in the bank’s quarter-end forecasts, it’s quite possible during a bond rally, according to Subadra Rajappa, SocGen’s head of U.S. rates strategy.“Over time, if the data weakens, the curve will likely bull flatten and possibly invert akin to what we saw in August,” she said. “If the data continue to deteriorate and the economy goes into a recession as per our expectations, then we expect the Fed to act swiftly to provide accommodation.”To be clear, another yield-curve inversion is by no means the consensus. The prevailing expectation is that the economy is in “a good place” (to borrow Fed Chair Jerome Powell’s line) and that Treasury yields will probably drift higher, particularly if the U.S. and China reach any kind of trade agreement. In that scenario, central bankers will be just fine leaving monetary policy where it is.Bank of America Corp.’s Mark Cabana summed up the bond market’s base case at the bank’s year-ahead conference in Manhattan: There will probably be no breakout higher in U.S. economic growth (capping long-term yields) but also no need for the Fed to cut aggressively (propping up short-term yields). That should leave the curve range-bound in 2020.That range, though, is not all that far from zero. Ten-year Treasury yields are now 20 basis points higher than those on two-year notes, and 22 basis points more than three-month bills. At the end of 2018, those spreads were nearly the same — 19 basis points and 31 basis points, respectively. That is to say, it’s not much of a stretch to envision the curve flattening in a hurry if anxious bond traders clash with a patient Fed.For now, traders seem to be pinning their hopes on resilient American consumers powering the global economy, using evidence of strong holiday shopping numbers to back their thesis. My colleague Karl Smith isn’t so sure that’s the best strategy, given that the spending is actually weakening relative to 2018, plus it usually serves as a lagging indicator anyway. Markets are also on alert for any cracks in the U.S. labor market, which has been the bastion of this record-long recovery. November’s jobs numbers will be released Friday.As for the Fed, its interest-rate moves are a clunky way to fine-tune the world’s largest economy. But that’s not the case for addressing angst around the U.S. yield curve. If the central bank doesn’t like its shape, it has the policy tools to directly and immediately bend it back.It comes down to which scenario Fed officials consider a bigger risk in 2020: Allowing the Treasury curve to remain flat or inverted, or moving too quickly toward the lower bound of interest rates? Judging by dissents around the more recent decisions, this is very much an open question.To get another inversion, “you’d need a Fed that wants to hold policy constant through a period of economic weakness: front end remains anchored near current levels due to policy expectations, long end drops due to diminishing growth/inflation forecasts,” said Jon Hill at BMO Capital Markets. “Not impossible by any means.” An inversion would probably come in the first or second quarter of 2020, fellow BMO interest-rate strategist Ian Lyngen said, though that’s not his base case.That sounds about right. Fed officials seem satisfied with dropping rates by the same amount as their predecessors did during other mid-cycle adjustments. Now they want to wait and see how lower interest rates trickle into the economy, perhaps making them more entrenched over the next several months. It’s hard to say for sure, though, given that Treasury yields have behaved since the central bank’s last meeting. The market simply hasn’t tested the Fed’s resolve.Relative calm like that rarely lasts, particularly when one tweet on trade sends investors into a tizzy. The path forward is almost never as linear as year-ahead forecasts make it appear.The same is true for the yield curve. We might very well be past “peak inversion,” but ruling out another push below zero could be a premature wager.To contact the author of this story: Brian Chappatta at bchappatta1@bloomberg.netTo contact the editor responsible for this story: Daniel Niemi at dniemi1@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Japan Leans on Fiscal Stimulus to Keep Recession at Bay
    Bloomberg

    Japan Leans on Fiscal Stimulus to Keep Recession at Bay

    (Bloomberg) -- Explore what’s moving the global economy in the new season of the Stephanomics podcast. Subscribe via Apple Podcast, Spotify or Pocket Cast.Japan’s Prime Minister Shinzo Abe announced stimulus measures to support growth in an economy contending with an export slump, natural disasters and the fallout from a recent sales tax increase.The total stimulus package amounts to around 26 trillion yen ($239 billion) spread over the coming years, with fiscal measures around half that figure, according to a government document released after a cabinet meeting Thursday evening. The stimulus will boost growth in the economy by about 1.4 percentage point, the document said.“We shouldn’t miss this chance, this is exactly when we should accelerate Abenomics and overcome our challenges,” Abe said, shortly before the cabinet meeting approving the measures. End of Line for BOJ Leaves Kuroda Talking Up Fiscal FirepowerThe extra spending comes amid a rising awareness around the world that more government help is needed to keep economies growing in the face of a global slowdown that is exposing the limits of relying on central banks to do the heavy lifting of economic management.“In any country, the positive impact of extra monetary stimulus is limited, which is especially true in Japan and Europe where rates have turned negative. You have no effective choice but to execute fiscal measures to support growth,” said Harumi Taguchi, Tokyo-based principal economist at IHS Markit.Earlier in the day, Abe described the stimulus as a three-pillared package designed to aid disaster relief, protect against downside economic risks and prepare the country for longer-term growth after the 2020 Tokyo Olympics.He said the stimulus would be funded by a supplementary budget for the current fiscal year ending in March, and special measures in the following year. The package outlines 4.3 trillion yen in funding for the measures in an extra budget this fiscal year.While the package was slightly larger than expected, the fresh spending measures of under 10 trillion yen left markets largely unimpressed. The officially released figures at the end of the day all matched the numbers contained in a draft seen by Bloomberg News earlier Thursday.Economists, meanwhile, cast doubt on whether the extra spending really packed the punch claimed in the draft. They said the government could have timed the tax increase better, but also asked if a perfect time for a tax hike exists.Bond Traders Shrug Off Japan’s $239 Billion Bid to Boost EconomyWith the package, Abe looks intent on minimizing the risk of a recession that would tarnish the record of his Abenomics growth program, while shoring up his own political support after recent scandals. To that end, an array of measures with a large price tag that can be paid for with the bare minimum of extra borrowing would fit the bill for a country with the developed world’s largest debt load.The package earmarks spending to improve the country’s resilience to extreme weather, to extend a rebate system for cashless payments and to put a tablet or device on every school child’s desk through the end of junior high school.“The size of the package is pretty big considering the official government assessment of the economy is that it remains on a recovery trend,” said Yuichi Kodama, chief economist at Meiji Yasuda Life Insurance Co. in Tokyo. “We’ve heard a lot about preventive interest rate cuts, but these are preventive fiscal measures.”Extra government spending gives the Bank of Japan welcome breathing space to keep its monetary easing policy on hold as fiscal policy takes the driving seat in propping up growth.Barclays Changes BOJ Call, Expects No Easing Through FY2021Ahead of the announcement of the plan, some economists had already switched their forecasts on the BOJ’s policy stance toward a holding pattern rather than additional action, taking into account the likelihood of the stimulus package and the central bank’s lack of extra ammunition.The BOJ has already piled up assets worth more than the size of Japan’s entire economy in its bid to support growth and inflation. But the mounting side effects of its easing program on the banking sector and a perceived lack of effectiveness of taking yet more action are keeping the bank on hold unless absolutely necessary.Japan’s economy kept growing in the first three quarters of 2019 despite an export slump exacerbated by the U.S.-China trade war, but it is forecast to shrink 2.7% in annualized terms this quarter. The sales tax hike and typhoon damage, combined with weak exports are the factors set to push the economy into reverse.The package aims to get Japan’s economy up and running again to avoid any further deterioration in global demand triggering a recession early next year.Punching PowerStill, economists were skeptical that the measures would boost growth by the 1.4 percentage point set out by the government.Based on rough calculations following the news, Masaki Kuwahara, senior economist at Nomura Securities Co., saw a boost of around 1 percentage point over time from the package. More specifically, he said the economy would get a 0.6 percentage point gain over the next two fiscal years.Takashi Shiono, economist at Credit Suisse Group AG, said the kick from the spending would be up to 0.2 percentage point in the coming year.“That’s probably smaller than the consensus view, but we think the budget for public spending can’t be spent so quickly because of labor shortages and already solid demand for construction companies,” Shiono said.What Bloomberg’s Economist Says“Japan’s fiscal stimulus package appears to be a marginally larger than expected, going by the size of the planned extra budget and actual spending in the draft reported by Bloomberg News. This is clearly positive for growth -- likely helping avert a recession -- but it won’t be sufficient to prevent a significant slowdown in 2020.”\--Yuki Masujima, economistClick here to read more.(Updates with official confirmation of figures, comment from Prime Minister Abe)\--With assistance from Emi Urabe and Emi Nobuhiro.To contact the reporters on this story: Toru Fujioka in Tokyo at tfujioka1@bloomberg.net;Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net;Takashi Hirokawa in Tokyo at thirokawa@bloomberg.netTo contact the editors responsible for this story: Malcolm Scott at mscott23@bloomberg.net, Paul Jackson, Jason ClenfieldFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

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    Edited Transcript of NVDA earnings conference call or presentation 14-Nov-19 10:30pm GMT

    Q3 2020 NVIDIA Corp Earnings Call

  • Google Facing New Front With U.K. Probe Into $2.6 Billion Deal
    Bloomberg

    Google Facing New Front With U.K. Probe Into $2.6 Billion Deal

    (Bloomberg) -- Google is facing a U.K. investigation into its $2.6 billion takeover of data company Looker Data Sciences Inc., opening up another front in the Alphabet Inc. unit’s ongoing battle with lawmakers.The Competition and Markets Authority on Thursday said that it issued an initial enforcement order, which prevents companies from integrating their services while the regulator carries out a early-stage review of the acquisition. The CMA has asked for comments on the deal by Dec. 20 before it decides whether to begin a formal probe.Google announced in June that it planned to buy U.S.-based Looker for its cloud unit, which lags far behind Amazon.com Inc. and Microsoft Corp. with just 4% of the cloud-computing infrastructure market as of 2018, according to the most-recent figures from analyst Gartner Inc. U.S. regulators cleared the deal in November.The U.K. review -- likely to focus on how Google plans to wield its power over data -- comes as Margrethe Vestager, the European Union’s Competition Commissioner, leads the charge into looking into how companies collect and use information. In August, she called tech giants “robot vacuum cleaners” sucking up valuable data in a way that can undermine competition.Vestager is currently investigating “the data business model” used by Google and others to collect information on how people use the web. She said the EU has posed “many questions to Google and others to get their views” and help the EU understand how the industry works, with a focus on contractual terms.Google agreed to buy smartwatch maker Fitbit Inc. for $2.1 billion. The tie-up, announced in October, has come under scrutiny from U.S. lawmakers.Though Google isn’t a leader in smartwatches or fitness trackers, regulators in the U.S. and elsewhere will likely have questions about what Google intends to do with the data Fitbit users have shared over the years, including intimate health and location information.\--With assistance from Jonathan Browning.To contact the reporter on this story: Giles Turner in London at gturner35@bloomberg.netTo contact the editors responsible for this story: Giles Turner at gturner35@bloomberg.net, Peter Chapman, Nate LanxonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Bloomberg

    Mobile-Gaming Billionaires Are Buying Rivals Instead of Selling Out

    (Bloomberg) -- Playrix Holding Ltd., a mobile-game developer that made billionaires of its Russian founders, has bought into about a dozen studios to take on the likes of Activision Blizzard Inc. and Electronic Arts Inc.Brothers Igor and Dmitry Bukhman said in an interview that by 2025 they want Playrix’s sales to catch up with those of the U.S. gaming giants. Over the past year they’ve spent more than $100 million on acquisitions and are planning to more than quadruple their portfolio of titles from about four that are available now.While the gaming industry is awash in investors from KKR & Co. to Zynga Inc., the Bukhman brothers are determined to go it alone. They told Bloomberg News in April that while Wall Street dealmakers such as Goldman Sachs Group Inc. had been in touch, they wanted to expand the business themselves.Since then, the brothers haven’t been persuaded of the merits of giving up control over Playrix in favor of a bigger pot of cash to spend. They prefer to leverage their understanding of the industry to act as a consolidator and nurture smaller players.“Many firms are seeking acquisition targets to add to their revenue and show growth to investors,” Igor said. “We don’t have this pressure and are taking a more long-term approach -- we are helping our portfolio companies to grow. We are sharing our experience and playing a role in their growth.”Playrix said 2019 revenue is likely to reach $1.5 billion, as much as 30% more than the previous year’s, from sales of existing games including Gardenscapes. It was the ninth-biggest publisher last year, according to independent gaming data provider App Annie.New TitlesThe Bukhman brothers are betting their new titles, to be released over the next two years, will push sales into the realm of rivals such as Activision, which reported $7.5 billion in revenue for 2018.“Within five years, we are seeking to join the same league as Activision Blizzard or NetEase Inc., but in the European region,” said Igor, without specifying a revenue target.Playrix’s purchases include studios in Ukraine, Serbia, Russia, Croatia and Armenia, and the 600 people added boost its headcount by more than 50%. The investments range from 30% holdings to controlling stakes in companies that will continue to operate independently. These include Nexters, based in Cyprus and one of Europe’s 10 top-grossing game developers, and Vizor Games, based in Belarus.The brothers are valued at about $1.4 billion each by the Bloomberg Billionaires Index. They landed in the rankings by creating a new variety of match-3 games, which involve completing rows of at least three elements to progress through an animated storyline. The latest acquisitions will allow expansion into gaming genres such as hidden object and simulation.The mobile gaming business is set to exceed $68 billion in revenue this year, according to researcher Newzoo, and have been attracting attention from investors. Playrix will have to compete against these deep-pocketed players if it’s to achieve its goals.Zynga acquired Finnish developer Small Giant Games for $560 million last year, while Israeli Playtika Ltd bought Germany’s Wooga and Austria’s Supertreat. KKR-backed AppLovin invested in Belarusian developer Belka Games and two other firms in September.“Capturing lightning in a bottle twice is the true challenge for a creative firm,” said Joost van Dreunen, managing director of SuperData, Nielsen’s game research arm. “With the popularity of Gardenscapes, Playrix has finally established itself as a force to be reckoned with. However, to build a legacy it will need to repeat this trick.”(Adds analyst comment in last paragraph.)To contact the reporters on this story: Ilya Khrennikov in Moscow at ikhrennikov@bloomberg.net;Alex Sazonov in Moscow at asazonov@bloomberg.netTo contact the editors responsible for this story: Rebecca Penty at rpenty@bloomberg.net, Jennifer Ryan, Thomas PfeifferFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.