Friday Morning Reads, Options, News
- Hedge Fund Titans Pull Money From Funds
- Ties to Gun Industry
- What Shareholders Should Do Now
- Chipmakers’ Rout Widens
- A Mega Casino Rises
- ‘Fearless Girl’ Will Be Moving
- Whistle-Blower Scandal
- How Do You Filter Out Noisy Trade Signals?
- The Tyranny of Benchmarking
Open Interest Changes:
Unusual Option Action:
The IMF and the World Bank will kick off their spring meetings today, with finance ministers and central bankers from around the globe gathered in Washington. A Group of 20 meeting will take place on the sidelines. In its World Economic Outlook this week, the IMF listed trade tensions as a key downside risk to the global recovery and warned that it could hurt economies connected by international supply chains.
The U.S. Treasury Department is considering using an emergency law to curb Chinese investments in sensitive technologies as the Trump administration looks to punish China for what it sees as violations of American intellectual property rights. A law may be used known as the International Emergency Economic Powers Act, passed in 1977, which could affect foreign investment in industries like semiconductors and 5G.
Russia stands ready to retaliate against the latest round of U.S. sanctions, according to Finance Minister Anton Siluanov, but said the country is "not in favor of sanction-swapping." "We need to talk, we need to find agreements, we need to look for ways out in order to solve problems not by imposing sanctions but through political agreements."
"We recognize the timelines that are in play," Canadian Prime Minister Justin Trudeau said about NAFTA negotiations, referencing the Mexican election in July and U.S. mid-terms in the fall. "As I've said many times we are looking for a deal that is win win win. We are going to stand up for the interests of Canada in every way."
For the first time in six decades, Cuba has a new president without the last name Castro. But in his acceptance speech, Miguel Díaz-Canel said he would continue the policies of the Castro brothers after being elected by the National Assembly. While Raul Castro is stepping down as the president of Cuba's Council of State, he will remain as head of the country's Communist Party until the next scheduled party congress in 2021.
Sub-Saharan Africa is falling into a new debt crisis, with 40% of the region now at high risk of debt distress - double the proportion of five years ago. Officials at the IMF are now urging all African countries to raise taxes to provide more scope for paying interest, which has increased to levels last experienced at the start of the century.
"We are in a good position to finalize the [restructuring] program with Greece," Eurogroup President Mario Centeno declared, outlining that there are still a "few issues" to iron out. The restructuring has been one of the most controversial issues in the country's third bailout program. At first, European creditors did not want to forego Greece's debt, while at a later stage their estimations were different from the IMF's.
Prior to the fatal engine accident aboard a Southwest (NYSE:LUV) jet earlier this week, the airline had clashed with CFM - a joint venture between General Electric (NYSE:GE) and Safran (OTCPK:SAFRY) - over the timing and cost of proposed inspections. The failure couldn't have come at a worse time for GE - the Dow's worst performer - which is responsible for maintenance work on all of its engines and reports earnings this morning.
The South Korean government has offered 500B won ($470M) to keep General Motors (NYSE:GM) in the country as the automaker hits a Friday deadline for deciding whether to wind down its Korean operations. An agreement on the restructuring - like job cuts and benefit reductions - needs to be reached today or else bankruptcy protection would be "unavoidable" given payments due next week.
Vowing to safeguard its interests through all legal means, China's ZTE (OTCPK:ZTCOY) said a U.S. ban on the sale of parts and software was "extremely unfair" and threatens its survival. The Commerce Department had slapped a seven-year ban on the telecom equipment maker for breaking terms of an agreement reached last year after it was found to be illegally shipping goods to Iran.
An auditor reviewing Facebook's (NASDAQ:FB) privacy practices gave the company a clean bill of health last year, well after the social network discovered that Cambridge Analytica improperly obtained millions of users' personal data. "In our opinion, Facebook's privacy controls were operating with sufficient effectiveness to provide reasonable assurance to protect the privacy of covered information," PricewaterhouseCoopers told the FTC.
Qualcomm is cutting 1,500 jobs across multiple divisions at its offices in California as part of its promise to slash annual expenses by $1B. It's also the beginning of a goal to lay off 4.4% of the company's workforce starting in June. Though Qualcomm (NASDAQ:QCOM) first considered cost reductions without firings, it concluded that job cuts are needed to support long-term growth and success.
Hours after announcing its own neural network chip, the Ali-NPU, Alibaba (NYSE:BABA) has made another step towards strengthening its new semiconductor business with the acquisition of local chip designer C-SKY Microsystems. It follows the U.S. barring American firms from selling chips and components to China's ZTE, a move that rekindled discussion in China about the need for self-sufficient tech supply chains.
Mattel CEO Margo Georgiadis is leaving the toy maker after about a year in the job, a surprising announcement for the company, which is searching for a strategy to end a sales slump that started in 2014. Former studio executive Ynon Kreiz will take over the position on April 26, becoming the fourth person to hold the Mattel (NASDAQ:MAT) CEO title in as many years.
Shire shares dropped almost 4% in London overnight after Allergan (NYSE:AGN) ruled out a bid, while Takeda (OTCPK:TKPYY) slipped 5% in Tokyo as Shire rejected its third $63B cash-and-stock offer. Shire (NASDAQ:SHPG) said the bid significantly undervalued its growth prospects and drugs in development. Under U.K. takeover rules, Takeda has until April 25 to make a firm offer or walk away.
Looking to streamline origination, settlement, interest rate payments and other processes, JPMorgan (NYSE:JPM) has tested a new blockchain platform for issuing financial instruments with the National Bank of Canada (OTCPK:NTIOF). The system was built over more than a year using Quorum, a type of open-source blockchain that JPMorgan developed in-house and is in discussions to spin off.
Barclays CEO Jes Staley has been fined by the UK's Financial Conduct Authority and Prudential Regulation Authority for his attempts to unmask a whistleblower within the bank, though the amount was not disclosed. The watchdogs also noted that Staley's actions do not display "lack of integrity" or lack of "fitness and propriety," allowing him to continue serving at Barclays (NYSE:BCS).
It's the latest blow to Wells Fargo. The bank is close to settling claims by federal regulators related to its risk management, involving a fine of as much as $1B. The penalty by the CFPB and the Office of the Comptroller of the Currency will punish Wells Fargo (NYSE:WFC) for forcing customers to buy auto insurance policies they did not need and other misdeeds.
In Asia, Japan -0.1%. Hong Kong -0.9%. China -1.5%. India flat.
In Europe, at midday, London +0.5%. Paris +0.6%. Frankfurt +0.1%.
Futures at 6:20, Dow -0.1%. S&P flat. Nasdaq -0.1%. Crude +0.4% to $68.59. Gold -0.4% to $1343.30. Bitcoin +3% to $8518.
Ten-year Treasury Yield flat at 2.92%