Global & FX

  • Monday, May 21, 2018
    • Tencent (OTCPK:TCEHY, OTCPK:TCTZF) acquires a majority stake in “Path of Exile” publisher Grinding Gear Games.
    • Grinding Gear Games announced via blog post and said it will remain an independent company. 
    • Path of Exile launched on PC in 2013 and Xbox One in 2017 and had more than 14M players as of 2016. Last year, the game saw a 56% Y/Y increase in player engagement.
    • The New Zealand-based publisher plans to launch new Exile expansions this year and next with version 4.0.0 expected to enter beta in early 2020.  
    • Alibaba’s (NYSE:BABA) Ant Financial leads an over $200M Series D round in motion sensing company Orbbec.
    • The round also included SAIF Partners, R-Z Capital, Green Pine Capital Partners, and Tianlangxing Capital. 
    • Orbbec designs and manufactures 3D sensors that work for facial and gesture recognition, 3D measurement, and map reconstructions. The sensors can work in smartphones, robots, or smart home devices.
    • Alibaba shares are up 1.3% to $197.51 on the easing US-China trade tensions. 
    • Previously: Stocks surge at the open as U.S.-China trade war 'on hold' (May 21)
    • Indonesia's central bank will conduct three foreign exchange swap auctions this week to ensure there is enough rupiah liquidity in the market following the hike in its key rate, the 7-day reverse repo rate by 25 bps to 4.50%
    • The overnight contract for the Jakarta Interbank Offered Rate rose to 4.22528 percent on average the following day, from 4.02500 percent.
    • The rupiah has been under pressure in past weeks as U.S. Treasury yields rose and the dollar rallied. The currency continued to fall despite BI's rate hike and on Monday it softened further to trade at 14,195 to the dollar, its weakest since October 2015.
    • Source: Investing.com
    • China's 21Vianet Group (NASDAQ:VNET) is up 11.6% on heavy volume in a delayed move after Thursday's earnings report.
    • Shares are at their highest point since March 23. They're now down just 16% YTD.
    • On Thursday, the company reported EBITDA nearly doubled to 196M yuan, with EBITDA margin jumping to 24.5% from the prior year's 11.6%.
    • China to "actively and steadily" deleverage and tackle financial risks, citing the country's five-year plan (2016-2020) for the financial sector.
    • China will significantly boost the share of direct financing in its financial system, especially equity financing.
    • China will continue to promote the process of yuan internationalization, expecting cross-border yuan payments to account for over a third of all cross-border payments by 2020.
    • Source: Investing.com
    • The supposedly bullish news of a power-sharing agreement between Italy's Five Star Movement and The League isn't doing much to help that country's market for government debt, and chatter about a eurozone break up is again entering the conversation.
    • Italy's 10-year government bond has exploded higher by 18 basis points today to 2.40%. Against Germany, it looks even worse, as 10-year Bund yields are down six basis points.
    • Italian stocks are the worst performers on the Continent as well, with the FTSE MIB down 1.5% vs. the Stoxx 600's 0.3% advance.
    • Checking another peripheral name, Spanish 10-year yields are up 7.5 basis points to 1.50%, and the IBEX 35 is off 0.45%.
    • ETFs: EWP, EWI, HEWI, HEWP, DBSP, DBIT, FLIY
    • Baidu (NASDAQ:BIDU) announces it will divest its global ad and tools business Global DU business.
    • After the completion of the transaction, Baidu will own about 34% of Global DU’s outstanding shares and won’t have effective control. 
    • The transaction is expected to close in Q3.   
    • Baidu shares are down 5.1% to $240.11.    
    • "Carmen Reinhart dropped an interesting stink bomb on the markets last week," JPMorgan Asset Management Global CIO Bob Michele tells Bloomberg.
    • Economist Reinhart took note of higher debt levels in emerging markets, as well as the increased exposure of that debt to foreign currency.
    • Michele agrees: "These economies have levered up and it’s not clear they can absorb higher funding rates going forward." 2016's taper tantrum ended up being a nothing-burger, says Michele, but this time, monetary tightening is the real deal - QE is over and a central bank rate hike cycle shows no signs of slowing.
    • ETFs: EEM, VWO, IEMG, EDC, SCHE, EDZ, EMF, MSF, ADRE, EEV, EUM, EET, SPEM, EEME, XSOE, DBEM, FEM, HEEM, EWEM, ROAM, ESGE, EDBI, EMLB, FLQE, KEMP, EMSA, KLEM, RFEM, EMEM, MFEM, PPEM
    • Altice (OTCPK:ALLVF) is off 1.8% in U.S. trading after word from MSCI that it will delete Altice A shares from its global standard and large-cap indexes.
    • The move is effective May 22, the day the stock goes ex-dividend for a separation of Altice USA (ATUS -3.3%), where Altice shareholders will get 0.4163 share of Altice USA for each share of Altice held.
    • Shares of Altice Class A are down 7.8% in Amsterdam.
    • WestJet Airlines (OTC:WJAFF, OTC:WJAVF) responds on Twitter to reports of works disruptions and a potential strike by pilots.
    • "We have not received any notification of labour action and remain actively engaged in negotiations. We will provide additional updates should this change as they become available," tweets the airline.
    • SoftBank’s (OTCPK:SFTBF, OTCPK:SFTBY) Fortress Investment Group is raising a $400M fund for suing tech companies over IP infringement, according to the NY Post.
    • Fortress will buy companies with patent portfolios and lend money to small-cap companies with rich patent portfolios. Fortress has conducted that type of lending for years. 
    • The fund will be the first IP fund for Fortress, which SoftBank acquired in December for $3.3B with the stipulation that Fortress would run independently. 
    • SoftBank’s $100B Vision Fund invests in larger tech companies more likely to be on the receiving end of IP infringement suits.  
    • Previously: SoftBank planning second Vision Fund, Saudi Arabian office (May 15)
    • Fiat Chrysler Automobiles (NYSE:FCAU) is planning to make a major production change in Italy, sources tell Automotive News.
    • The automaker is expected to stop making small cars like the Fiat Punto and Alfa Romeo MiTo Italy in order to focus on upscale Maserati and Jeep models.
    • The shift is part of a broad strategy by CEO Sergio Marchionne to focus on premium cars and hybrid electric vehicles over diesel-powered cars.
    • Japan +0.31%.
    • Hong Kong +0.60%.
    • China +0.66%.
    • India -0.67%.
    • London +0.90%.
    • Paris +0.72%.
    • Frankfurt -0.25%.
    • Stocks, oil prices and the dollar are all getting a boost, with the Dow set to leap 228 points, amid easing U.S.-China tensions that have roiled global markets this year. Dow +0.9%; S&P 500 +0.6%; Nasdaq +0.7%.
    • "We are putting the trade war on hold. Right now, we have agreed to put the tariffs on hold while we try to execute the framework,” Treasury Secretary Steven Mnuchin told Fox News.
    • Trade Representative Robert Lighthizer still cautioned that tariffs remained an important tool to "protect our technology."
    • Oil is up 0.4% at $71.65/bbl, gold is 0.6% lower at $1284/ounce and the 10-year Treasury yield is flat at 3.07%.
    • ETFs: SPY, QQQ, DIA, SH, SSO, VOO, SDS, IVV, SPXU, TQQQ, UPRO, PSQ, SPXL, RSP, SPXS, SQQQ, QID, DOG, QLD, DXD, UDOW, RWL, SDOW, VFINX, EPS, DDM, QQEW, QQQE, SPLX, SFLA, QQXT, SPUU, SPXE, LLSP, UDPIX, OTPIX, RYARX, SPXN, SPDN, SPXT, SPXV
    • The average price of regular-grade gasoline in the U.S. is now $3.00 per gallon after jumping $0.10 over the past two weeks.
    • Most expensive/cheapest in the nation? $3.79 in the San Francisco Bay Area and $2.54 in Baton Rouge, Louisiana.
    • Though prices at the pump are likely to be the highest since 2014, AAA is still projecting the largest Memorial Day weekend travel volume since 2005.
    • ETFs: UGA
    • Political instability in Italy seems to be coming to an end with a power sharing agreement between the Five Star Movement and The League.
    • While both parties are due to present their deal to the country's president later today, such a government could raise concerns across the eurozone due to planned higher spending.
    • Italy's main stock market index, the FTSE MIB, started the week more than 1.8% lower on the news.
    • ETFs: EWI, HEWI, DBIT, FLIY
    • With Argentina on the brink of a financial crisis, the IMF has formally begun bailout negotiations, without any objection from the Trump administration.
    • Such measures rarely advance without U.S. support.
    • The peso has fallen drastically against the dollar, while the nation has been dogged by persistent budget deficits, high inflation and trade imbalances.
    • ETFs: ARGT
    • Nasdaq Dubai plans to start equity futures of leading listed Saudi Arabian firms, giving investors new hedging tools to take long and short positions on the shares.
    • The UAE further plans to allow 100% foreign ownership in companies and grant long-term visas to some investors as the second-biggest Gulf economy seeks to attract more investments.
    • ETFs: UAE
    • Paving the way for heavier international sanctions, Venezuela's Nicolas Maduro won a new six-year term on Sunday in an election deemed illegitimate by the opposition and foreign governments.
    • The economy has been in recession since 2014, with the bolivar currency down 99% in the past year and inflation at an annual 14,000%, according to the National Assembly.
  • Friday, May 18, 2018
    • Wells Fargo (NYSE:WFC) is looking at a plan in case of Brexit that involves heavy expansion in Dublin, The Times reports.
    • A source tells the paper that the bank could add 100-300 positions in Dublin when Britain's EU exit occurs.
    • That would build on about 115 staffers currently in place in the Dublin office. It's likely to add the positions both through relocation and local hires.
    • Cogeco Communications (OTCPK:CGEAF) has won 23 spectrum licenses at auction, for C$24.3M.
    • The company's subsidiary Cogeco Connexion was the successful bidder on the licenses of 2500 MHz and 2300 MHz spectrum, mainly in the Ontario and Quebec wireline footprint.
    • “As stated in the past, the company has an interest in entering the mobile market only to the extent that it can operate a profitable business within its financial means," says Chief Technology and Strategy Officer Luc Noiseux.
    • "A wireless offering would be complementary to Cogeco Connexion’s current offering to its customers. This is a first positive step in the exploration of our options in the mobile wireless market.”
    • Phoenix New Media (NYSE:FENG) saw its American Depositary Receipts cut to Hold by First Shanghai, but still finished higher in U.S. trading.
    • The bank set its price target on the ADRs to $6.25; they closed on NYSE today at $5.55, up 0.7%.
    • The ADRs are down 15.1% in 2018, but up 73.3% over the past 12 months.
    • The Sierra Wireless (NASDAQ:SWIR) annual shareholder meeting went as management expected, according to results it's announced today.
    • All seven management nominees were elected to board seats, with margins of 91.25% or better
    • Shareholders also signed off on: the firm's accountants (98.48% approval); amendments to the restricted share unit plan (94.2% approval); and executive compensation (89.68% approval).
    • Fiat Chrysler (NYSE:FCAU) is down 1.66% after a report from Bloomberg News indicates that the automaker discussed using illegal software to cheat emissions tests as far back as 2010.
    • A Fiat employee tried to convince an exec at a supplier in e-mails that the software shouldn't be considered a mechanism to fool emissions tests.
    • The e-mails were release today in testimony at a federal court in San Francisco.
    • Xunlei Limited (XNET -0.5%) says Chief Operating Officer Peng Huang is resigning for personal reasons.
    • The move is effective May 31.
    • Huang will continue to support the company in the role of strategy consultant after his exit.
    • NetEase is set to add to post-earnings declines, down 0.9% premarket after a downgrade to Neutral at CCB International Securities.
    • The cut is from a previous Outperform rating; analyst Ronnie Ho lowered the price target on ADRs to $280 from $300, implying 14% upside.
    • The ADRs are down 28.7% so far in 2018, taking some edge off gains in November and December.
    • Previously: NetEase -9.1% after miss, analyst caution on costs (May. 17 2018)
    • Previously: NetEase -4.1% as forex losses spur miss on earnings (May. 16 2018)
    • The European Union tries to save the Iran nuclear deal and protect EU companies investing in the country by launching a process to activate its blocking statute that bans any EU company from complying with U.S. sanctions and does not recognize court rulings that enforce U.S. penalties.
    • The measure has been threatened but never implemented, and is viewed as a political weapon more than a regulation because its rules are vague and difficult to enforce; the global reach of the U.S. financial system and the U.S. presence of many European companies also raise questions about its effectiveness.
    • EU officials say the blocking statute will be revamped to encompass Pres. Trump’s decision to revive Iran-related sanctions, including sanctions aimed at Iran’s oil sector and transactions with its central bank.
    • European firms with major operations in the U.S., such as oil and gas producers Royal Dutch Shell (RDS.A, RDS.B) and Total (NYSE:TOT), are seeking waivers from sanctions on a case-by-case basis.
    • German automobile regulator KBA asks Porsche (OTCPK:POAHF, OTCPK:POAHY) to recall 60K Macan and Cayenne diesel SUVs to remove a defeat device that masks true emissions levels.
    • The recall actions covers Porsche Cayenne and Macan models with Euro-6 diesel engines.
    • Baidu (NASDAQ:BIDU) announces that Qi Lu will step out of the COO role effective July 2018.
    • Qi Lu will continue to serve as VP of the board of directors.
    • The change is attributed to Qi Lu being “no longer able to work in China on a full-time basis” for “personal and family reasons.”  
    • Baidu shares are down 6% premarket to $262.86. 
    • Japan +0.40%.
    • Hong Kong +0.34%.
    • China +1.24%.
    • India -0.86%.
    • London -0.08%.
    • Paris -0.18%.
    • Frankfurt -0.45%.
    • North Korea has suspended talks with the South over joint military exercises with the U.S. as the rhetoric between the nations ratchets up once again.
    • Speaking in the Oval Office, President Trump said Kim Jong-un could remain in power if the two sides reached a deal to rid the North of nuclear weapons. Otherwise, the country should expect "total decimation."
    • ETFs: EWY, KF, KORU, KEF, DBKO, FKO, DXKW, KOR, HEWY, FLKR
    • Although they have yet to agree on a prime minister, Italy's Five Star Movement and the League have struck a deal on a common platform to bring a populist government to the eurozone's third largest economy.
    • Key points: Universal basic income of €780 per person per month, no mention of a referendum on membership of either the EU or the euro, and no plans to ask the ECB to cancel debt.
    • ETFs: EWI, HEWI, DBIT, FLIY
    • The crude rally towards $80 a barrel is being seen as a short-term spike driven by geopolitics rather than any supply shortage, according to four OPEC delegates, a sign the group is not rushing yet to rethink its output cut agreement.
    • Saudi Arabia is meanwhile discussing concerns over volatile oil prices with other OPEC members and Russia amid supply worries following the U.S. withdrawal from the 2015 Iran nuclear deal.
    • ETFs: USO, OIL, UWT, UCO, DWT, SCO, BNO, DBO, DTO, USL, DNO, OLO, SZO, OLEM, WTIU, OILK, OILX, WTID, USOI, USOU, USOD, UBRT, DBRT, OILD, OILU, USAI
    • Greece and neighboring Macedonia are close to resolving a decades-old naming dispute that has prevented the latter from joining the EU.
    • The former part of Yugoslavia, then known as the Socialist Republic of Macedonia, adopted the shortened version Macedonia when it became independent in 1991, but Greece has since blocked accession talks as it contains a region with the same name.
    • A deal would likely see the Balkan nation go by "Upper Macedonia."
    • ETFs: GREK
    • "The NAFTA countries are nowhere near close to a deal," U.S. Trade Representative Robert Lighthizer declared, pointing to "gaping differences" on issues like intellectual property, agricultural access, labor and energy.
    • It comes as House Speaker Paul Ryan said there could still be a few weeks of "wiggle room" for a deal to be considered by the current Congress, but stressed even that seemed uncertain.
    • ETFs: EWW, FXC, EWC, MXF, MXE, CNDA, DBMX, EWCS, HEWW, QCAN, FCAN, HEWC, MEXX, FLCA, FLMX
  • Thursday, May 17, 2018
    • Sony (NYSE:SNE) is making more cuts at its film and TV units as part of ongoing streamlining that will lead to folding home entertainment into its TV arm, Variety reports.
    • Three president-level execs were let go after February's announcement that TV distribution president Keith Le Goy would take over home entertainment.
    • And theatrical marketing is next up for cost savings, according to the report. Domestic marketing chief Christine Birch was forced out last month and hasn't been replaced.
    • Some 12 employees were let go in the past week at streaming service Crackle, which is merging its digital ad sales and ad solutions divisions in a restructuring.
    • Xunlei Limited (XNET -1.9%) has announced developments in blockchain infrastructure it says are products to build a blockchain ecosystem.
    • StellarCloud is a shared platform designed to extend its existing content delivery network services to Infrastructure as a Service; it's intended to help companies in their transition to cloud services.
    • Coinciding with that announcement, it said iQiyi (IQ -1.1%) had joined in a strategic cooperation deal regarding StellarCloud.
    • Meanwhile, Xunlei says ThunderChain is high-performance blockchain infrastructure that can hit more than a million transactions per second.
    • NetEase (NASDAQ:NTES) is 9.1% lower and at its lowest point since January 2017 after an earnings miss exacerbated by foreign exchange and the prospect of ongoing rising costs.
    • Analysts are responding to the report with caution. Jefferies has slashed its price target to $276 from $310, pointing to an "across the board" increase in operating expenses in the miss. The company should be able to expand its addressable base of gamers with new genres, but that move could carry "lower margin on higher marketing spend and lower average revenue per unit," the firm says. (h/t Bloomberg)
    • A smaller target reduction comes from Benchmark, which has reduced to $340 from $355. It's maintaining a Buy rating.
    • And Barclays reiterated its Hold stance with a price target of $280.
    • Shares in YY are up 3.3% in Nasdaq trading after getting an initiation at Buy by Hua Tai Securities.
    • The firm set its price target at $126.50, implying 17% upside from current pricing. It joins nearly two dozen analysts who have Buy-equivalent ratings on the stock.
    • YY is down 7.4% YTD, but shares have nearly doubled (up 94%) over the past 12 months.
    • Earlier, the company announced the full exercise of the over-allotment option in the IPO of spin-off Huya; HUYA is now up 4.5%.
    • Japan +0.53%.
    • Hong Kong -0.54%.
    • China -0.48%.
    • India -0.74%.
    • London +0.12%.
    • Paris +0.47%.
    • Frankfurt +0.29%.
  • Wednesday, May 16, 2018
    • Singapore Telecommunications (OTCPK:SGAPY) fell slightly short on revenues though underlying profit was in line in the company's fourth quarter earnings.
    • Group revenue of S$4.33B ticked up just 0.4% Y/Y but was up 2.8% in constant currency.
    • EBITDA of S$1.235B compared to expecations for S$1.23B despite falling nearly 6% from the prior year.
    • Free cash flow was S$800M, up 4.8%.
    • For 2019, the company's expecting revenues to grow in low single digits, and for EBITDA to be stable. Free cash flow is projected at S$1.9B; cash capex and accrued capex is forecast at S$2.2B (A$1.4B for Optus, S$0.8B for the rest of Singtel).
    • Press release
    • In first-quarter earnings, NetEase (NASDAQ:NTES) fell well short of profit expectations while revenues came in at the high side thanks to heavy gains outside its core gaming business.
    • Shares are down 4.1% in after-hours trade.
    • Net revenues of 14.2B yuan (about $2.3B) were up 3.9% Y/Y.
    • Non-GAAP net income, meanwhile, fell to 1.3B yuan (about $213.2M) from last quarter's 1.9B yuan and the prior year's 4.3B yuan; NetEase took a heavier foreign exchange loss of 375.1M yuan (vs. last quarter's 159.1M yuan and last year's 48.5M yuan) due mainly to unrealized exchange losses from dollar-denominated bank deposits and short-term loan balances.
    • Adjusted earnings per ADR were $1.61, below expectations for $2.15.
    • Revenue by segment: Online game services, 8.8B yuan (about $1.4B, down 18.4% in yuan terms); E-commerce, 3.7B yuan (about $595M, up 101%); Advertising services, 462M yuan (about $73.7M, up 3.8%); E-mail and others, 1.2B yuan ($194.1M, up 102%).
    • Liquidity came to 43.5B yuan (about $6.9B), up slightly from 43.2B yuan as of Dec. 31. Cash flow from operations was 1.9B yuan, down from last quarter's 3.9B yuan and last year's 4B yuan.
    • Conference call to come at 9 p.m. ET.
    • Press release
    • BT Group (NYSE:BT) is 1.8% lower on NYSE and at a seven-year low following a loss of faith from bullish Bernstein, throwing in the towel with a downgrade to Market Perform.
    • The firm sees "signs of a business in turmoil" in dim guidance and a restructuring program, and shares are likely to stay at low levels for a while, the firm says. There's a "dramatic erosion" of earnings capacity and flat outlook for growth ahead. (h/t Bloomberg)
    • The firm has cut its price target to £2.15 from £3.05; shares closed in London at £2.03 today.
    • Vipshop Holdings (VIPS +3.8%) is rallying in the face of downgrades after its earnings prompted a sell-off this week.
    • KeyBanc has downgraded to Sector Weight from Overweight, pointing to "uncertain visibility of T/J contributions [those from partners Tencent and JD.com] and secular margin pressure" that more than make up for possible growth re-acceleration and multiple expansion. (h/t Bloomberg)
    • The bank cut its price target to $13 from $20; shares have jumped to $12.54 on NYSE today.
    • Meanwhile, Daiwa has downgraded the shares to Hold as well, with a price target cut to $16 from $25.
    • Earnings call slides
    • Earnings call transcript
    • Sea Limited (NYSE:SE) is up 10.1% in NYSE trading following Q1 earnings where it added new growth in its gaming unit and exponentially increased its e-commerce wing.
    • Digital Entertainment adjusted revenues grew 42.6% and EBITDA rose 48.6% to $55M. Quarterly active users hit 126.7M, up 125% Y/Y and up 44.3% Q/Q. Average revenue per users was $1.2, vs. a year-ago $1.8.
    • In E-commerce, gross merchandise value was $1.9B, a tripling of last year's total and up 23% Q/Q. Gross orders were up 217% to 111.4M. EBITDA, though, was -$179.6M vs. a year-ago -$62.7M.
    • Revenue by segment: Digital Entertainment, $110.7M (up 26.3%); E-commerce, $27.3M (up from $34,000); Digital Financial Services, $3.7M (up 81.9%).
    • The company boosted full-year revenue guidance to $780M-$820M (40.9%-48.1% growth Y/Y) from a previous range of $730M-$770M. It also sees e-commerce GMV at $8.2B-$8.7B, up from $7.5B-$8B.
    • Press release
    • Tencent (OTCPK:TCEHY, OTCPK:TCTZF) reports Q1 net profit of 23.29B yuan (consensus: 17.5B), which represents a 61% Y/Y growth. Revenue grew 48% to 73.53B yuan (consensus: 71.04B).
    • Revenue breakdown: VAS business, 46.9B yuan (+34%); Online game, 28.8B yuan; Smartphone game, 21.7B yuan (+68%); Social networks, 18.1B (+47%); Online ad business, 10.7B (+55%); Social and others ad, 7.4B (+69%); Other businesses, 15.96B (+111%). 
    • Key metrics: Capital expenditure, 6.3B yuan (+200%); Adjusted EBITDA, 30.9B (+45%); FCF, 13M (-46% Y/Y); net debt, 14.5B.
    • Margin improvement: Operating margin was 39%, up 42% on the year and 8% on the quarter. Tencent’s operating margin fell in Q4 and earlier this year, the company said it was focusing on investments over short-term margins. 
    • Press release.    
    • Previously: Chinese internet stocks drop with Tencent news (March 22)
    • Japan -0.44%.
    • Hong Kong -0.13%.
    • China -0.70%.
    • India -0.49%.
    • London +0.03%.
    • Paris -0.09%.
    • Frankfurt -0.23%.
    • North Korea is expanding on its threat to cancel the June 12 summit between Kim Jong-un and President Trump.
    • Besides protesting the joint air force drills taking place in South Korea, Pyongyang said the U.S. must stop insisting it "unilaterally" abandon its nuclear program and lashed out at national security advisor John Bolton, who talked about a disarmament similar to "Libya 2004."
    • ETFs: EWY, KF, KORU, KEF, DBKO, FKO, DXKW, KOR, HEWY, FLKR
  • Tuesday, May 15, 2018
    • With Supreme Court action spurring a sea change in sports betting, British firm Paddy Power Betfair (OTC:PDYPF) is in talks to buy FanDuel (DUEL), according to the Financial Times.
    • Some kind of news about any talks could come with tomorrow's market open. FanDuel may not get the same valuation it had at its peak, and DraftKings (DRAFT) will keep an eye on any pricing.
    • PPB has reportedly been talking for weeks with American gambling groups, anticipating the Supreme Court decision.
    • It already operates a Betfair online casino in New Jersey and paid $48M to buy fantasy sports site Draft.
    • OTC:PDYPF closed up 8.1% in U.S. trading.
    • The number of people in employment in the UK rose by 197,000 in the three months to April compared to forecasts for an increase of 129,000.
    • The number of people claiming unemployment benefits rose to 31,200 from 15,700 previously.
    • The unemployment rate remained unchanged at a 42-year low of 4.2%, in line with forecasts.
    • Source: Investing.com
    • ETFs: FXB, EWU, GBB, DBUK, FKU, EWUS, HEWU, QGBR, DGBP, FLGB, UGBP
    • SoftBank (OTCPK:SFTBF, OTCPK:SFTBY) CEO Masayoshi Son says it’s “just a matter of time” before the company launches the second version of its Vision Fund.
    • Son doesn’t provide a potential launch date beyond “in the near future.”
    • The $100B Vision Fund launched about a year ago and has acquired stakes in ARM Holdings, Nvidia, and WeWork. The fund also provides cushioning for some SoftBank investments like ride-hailing companies Uber and Didi.
    • Fund investors include Apple, Qualcomm, and the sovereign-wealth funds of Saudi Arabia and Abu Dhabi.
    • In other SoftBank news, the company plans to open a Saudi Arabian office, according to Reuters sources
    • Previously: Report: SoftBank mulls keeping stake in Flipkart as taxes sort out (May 10)
    • A top shareholder has taken sides against a key investor advisory firm in the fight over the fate of the chairman's seat at ad giant WPP.
    • Glass Lewis has recommended shareholders vote against the re-election of Roberto Quarta as chairman.
    • But Harris Associates partner David Herro tells Bloomberg "We do not agree with Glass Lewis ... In our view, the release of the conduct report is not a critical issue. We are more concerned with an orderly succession process and the selection of an excellent and capable CEO."
    • Harris is WPP's No. 3 shareholder, Bloomberg says, with just under 8% of shares.
    • WPP shares are down 2%.
    • Previously: FT: Ex-AOL chief Armstrong a prospect for WPP CEO job (May. 11 2018)
    • Eurozone economy slowed slightly to an annualized 2.5% in the first quarter, compared to the consensus of 2.7%, following 2.7% annual growth in the fourth quarter.
    • Speaking after the bank’s latest policy meeting in April, ECB President Mario Draghi acknowledged that the pace of the euro area recovery had moderated since the start of the year, but signaled no change in monetary policy.
    • Draghi said his overall assessment was one of “caution tempered by an unchanged confidence” that inflation is moving towards the ECB’s target of just below 2%.
    • Source: Investing.com
    • EWP, HEWP, EZU, FEUZ, HDEZ
    • Samsung (OTC:SSNNF, OTC:SSNLF) is in talks with smartphone makers including China’s ZTE to supply mobile processor chips to bring direct competition to Qualcomm.
    • Samsung gets most of its profits from its basic memory chips but has increased development of logic chips like mobile processors and its Exynos mobile chips power its Galaxy smartphones. 
    • Currently, China’s Meizu Tech is the only external company using the Exynos chips. 
    • Samsung’s logic chip development head Inyup Kang tells Reuters, “We are talking to all OEMs.” 
    • The US recently hit ZTE with a seven-year ban on receiving components from US-based companies.  
    • Previously: Stocks start higher as U.S.-China trade tensions ease (May 14)
    • German economic sentiment held at -8.2 in May compared to the consensus of the index to improve slightly to -8.0 points underlining concern over the health of the euro zone's largest economy.
    • The Current Conditions Index dropped to 87.4 from 87.9 in April compared to the consensus of 86.2.
    • The German economy grew by 0.3% in the first three months, the slowest rate since the third quarter of 2016.
    • Source: Investing.com
    • ETFs: EWG, DAX, GF, DXGE, HEWG, DBGR, EWGS, FGM, QDEU, FLGR
    • Xunlei Limited (NASDAQ:XNET) is 7% lower after posting Q1 earnings where revenue more than doubled and the company swung to a gain, but it guided to as much as a 28% sequential drop in revenues.
    • Gross profit was down 5.2% sequentially to $37.7M, and gross margin declined to 47.8% from last quarter's 48.2%.
    • Operating income rose to $7.4M from last quarter's $3.9M. And non-GAAP net income rose to $7.9M from the prior quarter's $4.8M (and a year-ago loss of $7M).
    • Revenue by segment: Cloud computing and Internet value-added services, $48.1M (up 316.4%); Subscription, $23.4M (up 12.3%); Online advertising, $7.3M (up 92.2%).
    • Cash, equivalents and short-term investments came to $355.6M, down from $372.4M as of Dec. 31.
    • For Q2, it's guiding to revenues of $56M-$62M (53.2% growth at the midpoint).
    • Earnings call transcript
    • Press release
    • Nokia (NOK -1.7%) has named Sri Reddy to its leadership team, putting Reddy in as co-president of its IP/Optical Networks business group.
    • Current ION president Basil Alwan will continue as a member of the Group Leadership Team as a co-president of that business and adviser to the CEO.
    • Reddy played a key role in building the IP routing business from the ground up, Nokia says; he led the IP Software Engineering team for more than 10 years before leading the IP Routing business unit for the past five.
    • As for the responsibility split, Reddy will mainly handle day-to-day operational matters and jointly manage strategy and overall performance.
    • "I am pleased to see the bench strength of great leaders at Nokia, which allows us to benefit from the capabilities of all our team members," says CEO Rajeev Suri.
    • Seven Stars Cloud (NASDAQ:SSC) is off 5.1% after revenue more than quintupled Y/Y in its Q1 earnings -- a 461% jump the company attributes to expanding business in crude oil trading in October -- but the company said it would need to work on gross profitability.
    • Costs of revenue grew in line with that jump, and gross profit fell to $0.4M from a year-ago $3.8M. Much of the prior-year total was one-time consulting fees, it says.
    • The company swung to a net loss of $0.06/share from year-ago gains of $0.04/share.
    • Cash was $3.9M, not including $40M subscription agreement funds from recent private placement.
    • For the full year, it's sticking with previous guidance of $280M (despite the record $186M in Q1) and $35M in EBITDA.
    • Conference call to come at 4:05 p.m. ET.
    • Press release
    • Malaysian Prime Minister Mahathir Mohamad plans to remain in power for one or two years following his shock election win, but expects criminal charges to be filed against former leader Najib Razak following an investigation into the 1MDB scandal.
    • Questions over how long he plans to stay in power risk undermining an agenda that include cutting spending, scrapping a goods-and-services tax and reviewing large infrastructure projects.
    • ETFs: EWM
    • Japan -0.21%.
    • Hong Kong -1.23%.
    • China +0.57%.
    • India -0.11%.
    • London +0.23%.
    • Paris +0.09%.
    • Frankfurt -0.08%.
    • Italy's 5 Star Movement and the League are seeking more time to complete a pact to form a governing coalition and find a suitable prime minister to both parties.
    • Key points include scrapping an unpopular pension reform, tougher rules on immigration, tax cuts and renegotiation of EU treaties.
    • If the deal falls apart, it would pitch Italy into fresh elections, only months after elections in March.
    • ETFs: EWI, HEWI, DBIT, FLIY
    • Turkey's lira is in trouble. The currency slid to its weakest level ever against the dollar, down 13% to 4.3990 YTD, after President Erdogan revealed plans to take greater control of the economy.
    • He said the central bank was independent, but it cannot ignore signals from the head of the executive following the switch to a new presidential system next month that will grant him sweeping authority.
    • ETFs: TUR, TKF
    • Argentina's peso has fallen to a record low, tumbling almost 7% to 25 per U.S. dollar, as the the IMF said it won't set any exchange-rate targets for a stand-by arrangement.
    • That pushes the currency's decline this year to 26%, the worst in emerging markets.
    • President Mauricio Macri also spoke by phone with President Trump on Monday, and said the U.S. supported his discussions with the IMF.
    • ETFs: ARGT
  • Monday, May 14, 2018
    • Steel Dynamics (NASDAQ:STLD) has a definitive deal to acquire the Indiana-based Heartland flat roll operations from CSN Steel, a wholly owned subsidiary of Companhia Siderurgica Nacional (NYSE:SID).
    • The transaction price comes at $400M in cash inclusive of $60M of normalized working capital -- what Steel Dynamics believes is current replacement value.
    • It will expand annual flat roll shipping capacity to 8.4M tons, with total shipping capability growing to 12.4M tons.
    • Corporate approvals have been received from all parties; the deal just needs regulatory approvals. It's expected to be wrapped before the end of Q3.
    • The company expects the transaction to be accretive to near-term earnings and cash flow per share.
    • Altice USA (NYSE:ATUS) has declared a one-time cash dividend of $2.035/share of its Class A and Class B common stock.
    • That's payable to stockholders of record at the close on May 22, and the payment date for the dividend is set two business days prior to the separation date planned for Altice USA's total separation from Altice NV (OTCPK:ATCEY), so the exact payment date will be set when the separation date is finalized.
    • Some 78.6% of the divident (or $1.60/share) will be taxable and the other 21.4% as a return of capital, Altice USA says.
    • Shares are up 1.7% after hours.
    • Phoenix New Media (NYSE:FENG) is 5.7% lower after hours following Q1 earnings with a narrower loss than expected but light revenue guidance for the current quarter.
    • Revenues fell 3.4% in renminbi terms; net advertising revenues grew 0.7% to 242.9M yuan and paid services revenues fell 22.2% to 41.6M yuan. The company adopted ASC 606 standards as of Jan. 1.
    • Gross profit grew to 156.2M yuan (about $24.9M) from 132M yuan a year ago. Gross margin was 54.9%, up from a year-ago 44.8%.
    • Loss from operations was 54.4M yuan vs. a year-ago loss of 31.8M yuan. Net loss widened to 57.5M yuan (about $9.2M) from a prior-year loss of 32.2M yuan.
    • For Q2 (and considering new ASC 606 standards), the company's guiding to revenue of 361.4M-376.4M yuan (about $57M-$59.4M). Net advertising revenues are forecast at 320.5M-330.5M yuan, and paid services revenues are seen at 40.9M-45.9M yuan.
    • Under the old ASC 605 standard, guidance would be for revenues of 396.8M-411.8M yuan (about $62.6M-$64.97M, below consensus for $65.5M); net advertising revenues of 353.5M-363.5M yuan and paid services of 43.3M-48.3M yuan.
    • Conference call to come at 9 p.m. ET.
    • Press release