After Hours Summary: STIX +12% up on repurchase authorization; CXM +7.5% trading higher on earnings; PACW +3% after joining S&P SmallCap 600; SMTC -8.8%, CNXC -5.6% (also combining with Webhelp), and RH -4.9% down on earningsAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: CXM +7.5%, PL +1.4% (also acquiring the business of Holding Sinergise)
Companies trading higher in after hours in reaction to news: STIX +12% (authorizes $5 mln additional repurchases), AKRO +3.2% (positive end-of-phase 2 meeting with FDA), PACW +3% (joining S&P SmallCap 600), CR +2.3% (joining S&P MidCap 400), FC +1.6% (approves $50 mln for repurchases), WW +0.8% (Millennium Management discloses 5.1% stake), PHR +0.1% (partners with Unlimited Systems Partners), WFC +0.1% (FDIC considering pressuring big banks to fill $23 bln hole, according to Investing.com)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: SMTC -8.8%, CNXC -5.6% (also combining with Webhelp), RH -4.9%, VRNT -3.1%, FUL -1.3%
Companies trading lower in after hours in reaction to news: PRQR -7.5% (stock offering by selling shareholders), AVDL -4.4% (enters royalty agreement with RTW Investments; commences public offering), VKTX -3.6% (stock offering), BTU -3.2% (confirms fire at Shoal Creek Mine), GPRE -1.5% (Chairman retiring), EVH -0.2% (expands partnership with Centene), MRK -0.1% (FDA converts to full approval indication for KEYTRUDA), JPM -0.1% (FDIC considering pressuring big banks to fill $23 bln hole, according to Investing.com), TSLA -0.1% (SES SA talking with Intelsat about combination)
Closing Stock Market SummaryToday's trade had a decidedly positive tone following the two-day Congressional hearing on the SIVB bank failure. For most of the session, the main indices chopped around a fairly narrow range, albeit sporting nice gains. Ultimately, though, a late afternoon push higher had the main indices close near their highs of the day, leaving the S&P 500 above its 50-day moving average (4,014).
The tech-heavy Nasdaq paced its peers thanks to strong leadership from mega caps and chipmakers. Investors reacted favorably to Micron's (MU 63.54, +4.26, +7.2%) quarterly results and many semiconductor stocks traded up in sympathy. The PHLX Semiconductor Index rose 3.3% today.
Strength from semiconductor components helped drive a 2.1% gain in the S&P 500 information technology sector, which closed near the top of the leaderboard along with real estate (+2.3%) and consumer discretionary (+1.9%).
All 11 sectors closed with gains, but the defensive-oriented consumer staples (+0.5%) and health care (+0.2%) sectors lagged the broader market with the slimmest gains of the day.
Market breadth reflects a strong positive bias behind today's gains. Advancers led decliners by a nearly 4-to-1 margin at the NYSE and a 2-to-1 margin at the Nasdaq.
Notably, the positive price action today followed relatively strong gains in many overseas indices. Germany's DAX rose 1.2%, the U.K.'s FTSE rose 1.1%, and France's CAC 40 rose 1.4%. Market participants were reacting to the news that UBS AG (UBS 20.10, +0.83, +4.3%) named Sergio P. Ermotti as CEO, effective April 5.
Treasuries settled little changed from yesterday's closing levels. The 2-yr note yield rose one basis point to 4.07% and the 10-yr note yield was unchanged at 3.57%.
- Nasdaq Composite: +14.0% YTD
- S&P 500: +4.9% YTD
- S&P Midcap 400: +1.3% YTD
- Russell 2000: +0.6% YTD
- Dow Jones Industrial Average: -1.3% YTD
Reviewing today's economic data:
- The weekly MBA Mortgage Applications Index rose 2.9% with purchase application jumping 2.0% (-35% yr/yr) while refinancing applications rose 5.0% (-61% yr/yr).
- Pending home sales rose 0.8% in February (consensus -2.3%) following a 8.1% increase in January.
- The weekly EIA Crude Oil Inventories showed a draw of 7.49 million barrels following last week's draw of 1.06 million barrels.
Looking ahead to Thursday, market participants will receive the following economic data:
- 8:30 ET: Weekly Initial Claims (consensus 196,000; prior 191,000), Continuing Claims (prior 1.694 mln), Q4 GDP -- third estimate (consensus 2.7%; prior 2.7%), and GDP Deflator -- third estimate (consensus 3.9%; prior 3.9%)
- 10:30 ET: Weekly natural gas inventories (prior -72 bcf)
UK re-entry into EU Horizon programme threatened by cash dispute
Britain seeks to reduce contributions to €95bn research network seen as vital by country’s scientists
The UK’s bid to rejoin the EU’s Horizon research programme, expected to be one of the early “wins” of the recent Northern Ireland trade deal, is threatened by a dispute over money.
UK scientists say membership of the €95.5bn programme is vital for research and investment in science but Britain has been blocked from the scheme since 2021 because of a row over post-Brexit trade in Northern Ireland.
With London and Brussels hailing a new chapter in relations after the Windsor framework on Northern Ireland trade arrangements was finalised last week, readmission to Horizon seemed likely.
But the UK argues that its annual contribution to the seven-year programme should be reduced because its late entry has diminished the value of programme’s returns.
“The EU’s delays over the last two years have had a damaging and lasting impact on UK R&D,” said a UK government spokesperson. “Discussions on a way forward will need to reflect the financial reality that we have missed over two years of the seven-year programme.”
As members of Horizon until 2020, British institutions received research grants worth roughly the same as their government’s contribution. Once blocked from the programme, UK researchers could participate in, but not lead, Horizon-funded projects, with their work funded directly by London.
However, the UK contribution to EU programmes such as Horizon is set under the terms of the Brexit Trade and Cooperation Agreement.
Under the terms of the TCA, the UK must contribute an amount proportionate to the size of its economy, which is around 18 per cent of that of the EU, according to statistics agency Eurostat.
Britain had been expected to contribute £15bn for the full seven-year programme. The Financial Times calculates that according to the TCA, the pro rata fee for the remaining years of the programme, which ends in 2027, could add up to as much as €11bn — equivalent to £9.7bn — depending on when the UK rejoins Horizon.
Neither the UK nor the European Commission would confirm the figure. But reducing London’s contribution would involve reopening the TCA, something Brussels refuses to countenance.
British ministers argue that Brussels should cut Britain a fair financial deal.
Allies of Rishi Sunak, the prime minister, have confirmed he is considering taking Britain back into Horizon but say he is “sceptical” about the programme and has asked science minister George Freeman to look into a Plan B, based on global collaboration.
But academics are demanding to rejoin the programme. This month 18 research bodies issued a joint demand for London and Brussels to get Britain’s readmission “swiftly over the line, finally ending the damaging impasse”.
Vivienne Stern, chief executive of Universities UK, which represents the sector, said she was “delighted” talks were beginning and that she understood the EU had accepted “reasonable adjustments” to the cost to UK should be made.
More than 40 countries are associated with Horizon, and EU diplomats say they have to be fair to other late joiners such as New Zealand. “To change the payment amount you would have to reopen the TCA. That is a no go,” said one.
Similar financial arguments will dog negotiations for the UK to join other EU programmes such as Copernicus, an earth-monitoring satellite system, and Euratom, the nuclear energy body.
The commission said: “At the EU-UK Partnership Council on March 24, the European Commission and the UK government reaffirmed their desire to exploit fully the potential of the TCA, and maximise the potential of the relationship between the EU and the UK in ways that benefit both parties.”
Talks are expected to begin after Easter and aim to secure an agreement by June.
Walt Disney ousts Marvel chair Isaac Perlmutter after he clashed with CEO Bob Iger
Move is part of efforts to eliminate 7,000 roles, say people briefed on the matter
Isaac “Ike” Perlmutter, the billionaire who sold Marvel to Disney in 2009 and had clashed with the company’s chief executive Bob Iger, has been ousted as the entertainment group embarks on thousands of job cuts.
Perlmutter’s $4bn sale of Marvel was transformative for Disney, which has turned it into one of the most enviable franchises in entertainment history with blockbusters including The Avengers and Iron Man. But he was also considered difficult to work with, leading to disputes with Iger and other Disney executives, said current and former executives.
Over the past year he also used his significant shareholding to back an effort by activist investor Nelson Peltz to gain a seat on Disney’s board, putting him in contention with Iger, who resisted the push.
Peltz backed down in February after Iger announced plans to cut costs and eventually reinstate the dividend, which had been suspended during the Covid-19 outbreak.
Iger has had a tense relationship with Perlmutter. In 2015, Iger reorganised Marvel to allow film producer Kevin Feige to report to the head of the Disney studio rather than the Marvel chair — a move that is said to have outraged Perlmutter.
That reorganisation also left Perlmutter with a smaller role as chair of Marvel Entertainment, a unit with a few hundred employees overseeing comic book publishing and consumer products.
The comics division will now be overseen by Disney Entertainment group, while consumer products will be folded into another unit as part of a restructuring. Other Marvel executives are also losing their jobs.
In February, Iger told CNBC that Perlmutter had been “intent on firing” Feige at the time. After Iger stepped in to block the move, Perlmutter “was not happy about it”, Iger said, adding: “I think that unhappiness exists today.”
As Marvel president, Feige has overseen the release of some of the highest-grossing movies of all time, including Avengers: Endgame and Black Panther.
This week, Iger started the process of cutting about 7,000 jobs at the company in an effort to save about $5.5bn. Since his return as Disney chief executive, he has stressed the need to reach profitability at its streaming operations by next year. He has said he plans to slash $3bn from content budgets and $2.5bn in other costs.
In a 2019 book on his tenure at Disney, Iger described Perlmutter as “a legendarily tough, reclusive character” and as having a reputation for being “penurious to the extreme”. But while he acknowledged having “disagreements” with Perlmutter, he “respected where he’d come from in his life”.
Perlmutter, who made a fortune as an investor in distressed assets, began working with Marvel in the mid-1990s, when he controlled Toy Biz, a company that owned the exclusive licence to produce toys based on Marvel’s characters.
After the group went into bankruptcy, Perlmutter fended off Carl Icahn and other investors to gain control of Marvel.
Credit Suisse Violated Plea Deal in Tax Case, Senate Report Says
The Swiss bank failed to disclose transfers linked to a continuing tax conspiracy, according to a Senate investigation
WASHINGTON— Credit Suisse Group AG CS +3.48% violated the terms of a 2014 criminal plea agreement in which it promised to stop helping Americans hide assets from the U.S. tax authorities, according to a Senate report released Wednesday.
The Senate Finance Committee’s Democratic staff said Credit Suisse failed to report bank transfers tied to what it says may be an ongoing criminal tax conspiracy involving more than $100 million held by a family with dual citizenship in the U.S. and Latin America.
The bank also, partly in response to the committee inquiry, recently identified more accounts that may be tied to Americans.
“It is deeply concerning that almost nine years after executives testified before Congress that the bank would clean up its act, Credit Suisse is still disclosing hundreds of millions of dollars in secret offshore accounts belonging to wealthy U.S. taxpayers,” the report said.
The findings are another setback for Credit Suisse, which is being bought by rival UBS Group AG UBS +4.26% in a deal urged and supported by Swiss regulators. UBS agreed to take on Credit Suisse’s substantial legal liabilities in the takeover.
In its 2014 plea agreement with the Justice Department, Credit Suisse admitted that it had helped Americans evade taxes for years. It agreed to pay $2.6 billion and said it would comply with U.S. law.
Justice Department officials found deficiencies in the bank’s handling of its 2014 plea agreement, The Wall Street Journal reported last November, citing people familiar with the case. The bank said at the time it had devoted substantial resources to improve its compliance.
An Internal Revenue Service spokesperson declined to comment. A spokesperson for the Justice Department didn’t immediately respond to a request for comment.
“Credit Suisse does not tolerate tax evasion,” said a Credit Suisse spokesperson. “The report describes legacy issues, some from a decade ago, and we have implemented extensive enhancements since then to root out individuals who seek to conceal assets from tax authorities,” the spokesperson said. The bank is cooperating with the Justice Department to address “remaining legacy conduct or policy concerns,” the spokesperson said.
UBS is expected to close its takeover of Credit Suisse next month.
A UBS spokesperson said as part of the acquisition the bank “made an assessment of outstanding litigation and investigation matters. We expect the transaction will be accretive to our shareholders in a wide range of business scenarios.”
The Senate report suggests that there are gaps in the U.S. system for finding Americans’ foreign account holdings and calls on the IRS and the Justice Department to investigate further. And it says that the Swiss government or any entity buying Credit Suisse should be responsible for fines stemming from violations of the 2014 plea deal.
For many years, banks in Switzerland and elsewhere enabled tax evasion by wealthy Americans, who could park assets in accounts that weren’t reported to the IRS.
That started changing in the 2000s, and the U.S. used whistleblowers, criminal prosecutions and voluntary-disclosure programs to stem tax evasion by wealthy Americans.
The U.S. Congress in 2010 also passed a law that effectively required foreign banks to report Americans’ accounts to the U.S. government. That law has made banking abroad difficult for U.S. citizens living outside the country, but it has limited any opportunities for Americans to hold secret foreign bank accounts.
The committee started its investigation in April 2021, prompted by the prosecution and guilty plea of businessman Dan Horsky for tax fraud. According to the report, Mr. Horsky controlled $220 million in accounts at the bank but the U.S. government learned of them from a whistleblower, not from Credit Suisse.
Most of that activity occurred before the plea deal but the committee report notes that Mr. Horsky was still being invited to bank events for top customers in 2015.
Mr. Horsky’s case prompted the Senate committee’s investigation into other Credit Suisse clients, including the family with dual citizenship. The report doesn’t identify the family and cites Credit Suisse as saying that the matter involves ongoing cooperation with U.S. law enforcement.
According to the report, Credit Suisse registered the accounts in its system using the non-U.S. documentation in its records, though the bank also had information showing U.S. passports and residences.
Using information provided by Credit Suisse and informants, the committee determined that the family closed eight Credit Suisse accounts in 2012 and 2013, moving the money to banks in Switzerland, Israel and Andorra.
Under its plea agreement, Credit Suisse was supposed to disclose those transfers but didn’t do so for most of them until December 2021, after the Senate investigation started, according to the report.
Jeffrey Neiman, an attorney for the whistleblowers, who could receive a monetary award for their involvement, said the Justice Department should collect $1.3 billion because of Credit Suisse’s failure to abide by the plea agreement, regardless of the bank’s current financial troubles and takeover.
Adidas Ends Its Opposition to Black Lives Matter Logo
Sportswear maker had called the advocacy group’s three-stripe emblem too similar to its own
Adidas AG ADDYY 3.71% said it would drop its opposition to Black Lives Matter’s bid to trademark its logo design, which, like the sportswear company’s emblem, features three stripes.
The German brand has in the past fiercely defended its logo design, which comprises three diagonal stripes, albeit with mixed success. The Black Lives Matter Global Network Foundation’s logo, which the advocacy group is seeking to trademark, consists of three parallel yellow lines on a transparent background.
Adidas had submitted its opposition to the BLM logo to the U.S. Patent and Trademark Office in a filing dated Monday. In the filing, the company said it had been using its three-stripe logo for more than 70 years and that the BLM logo was “confusingly similar.”
Trademarking the BLM foundation’s logo would dilute the distinctiveness of the three-stripe mark, Adidas said. “Registration would be a source of damage and injury,” it added.
On Wednesday, Adidas said it was dropping its attempt to block BLM’s application “as soon as possible.” Adidas decided to drop its objection because the company didn’t want to be misinterpreted as objecting to BLM’s cause, which it supports, according to a person familiar with the matter.
The BLM foundation didn’t immediately respond to a request for comment. BLM was founded in 2013 and gained greater prominence in 2020 following the murder of George Floyd, a Black man, while in police custody. The organization submitted its application to trademark its logo in 2020.
The decision by Adidas to back away from a potential trademark dispute comes as the company embarks on a turnaround plan under new Chief Executive Bjørn Gulden, and seeks to move on from criticism related to race issues.
Adidas last year terminated its once-lucrative Yeezy partnership with rapper Kanye West, who goes by Ye, in response to the Mr. West’s antisemitic remarks.
Earlier this month, Mr. Gulden said the company would proceed with extreme care in deciding what to do with its huge inventory of unsold Yeezy products in light of the offense Mr. West had caused. One option under consideration could see Adidas sell the Yeezy stock and then donate the proceeds to charity, Mr. Gulden said.
Adidas in 2020 faced employee complaints about the company’s culture and lack of diversity. The criticism prompted Karen Parkin, the sneaker maker’s human resources chief and a member of its executive board, to retire. The departure came after she told an employee meeting that racism was “noise” that was only discussed in America, and that she didn’t believe the brand had an issue with racism.
At the time Ms. Parkin apologized and said she had chosen her words poorly, while affirming that both she and Adidas stood firmly against racial discrimination.
Adidas’s move Wednesday to drop its opposition to BLM’s trademark application follows the company’s failure earlier this year to prevent U.S. fashion designer Thom Browne from using a four-stripe motif, which appears on his jackets and other menswear. He had earlier switched from a three-stripe design in response to objections from Adidas.
The judge in that case ruled that the use of stripes wouldn’t necessarily confuse or mislead consumers and declined to award damages as requested by the German company. Legal commentators said Mr. Brown’s victory could make it more difficult for Adidas to block other logos or designs featuring stripes in future.
A rally in Hong Kong stocks reverberated across Asia after news of a planned revamp of Alibaba Group Holdings Ltd. bolstered demand for Chinese technology shares. Gains for mainland and Hong Kong equities pushed a gauge of regional stocks higher for a second day. Japanese and Australian equities also gained, while US equity futures advanced to effectively unwind a decline on Tuesday. The Hang Seng Index climbed more than 2% and an index of Hong Kong’s tech stocks jumped over 3% as investors rushed back to Alibaba shares and other large tech companies that have been stung by a crackdown from Beijing over the past two years. Alibaba surged 13%, Tencent Holdings Ltd. jumped 3% and Baidu Inc. rose more than 2%. Shares in Japan-listed Softbank Group Corp., which owns a large stake in Alibaba, surged as much as 6.5%. The gains for Alibaba broadly matched an advance in its US-listed shares on Tuesday after the e-commerce giant said it would split into six units in a shakeup that promises to yield several initial public offerings. Swaps traders have priced in more than a 50% probability the Fed will raise rates by a quarter point at its next meeting, with plans to ease thereafter. However, several strategists have joined BlackRock Investment Institute in saying markets are wrong in expecting imminent rate cuts. Investors were also focused on European banks after French prosecutors said lenders including Societe Generale SA and BNP Paribas SA face collective fines of more than 1 billion euros ($1.1 billion) as part of a probe into tax fraud and money laundering. oil was higher after a clash between Iraq and its Kurdish region curtailed exports. Gold was little changed and Bitcoin traded around $27,300. US After Hours LULU +12.2%, CALM +3.7% higher on earnings; MU -1.1%, PRGS -2.8% lower on earnings; BPMC +3.5% higher as FDA lifts partial clinical hold.
Nikkei +0.57% Hang Seng +1.91% CSI +0.24% Shanghai -0.04% Shenzen +0.12%
Eur$ 1.0835 CNH 6.8870 CNY 6.8868 JPY 131.64 GBP 1.2326 CHF 0.9206 RUB 77.0875 TRY 19.1187 CLA 73.53 +0.46% Gold 1,967 -0.33% BTC 27,385 +0.26% ETH 1,781.50 +0.37%
S&P +0.64% Nasdaq +0.61% EuroStoxx +0.48% FTSE +0.21% Dax +0.41% SMI +0.36%
Macro :
- Italy Wants to Ban Cultivated Food to Protect Culinary Heritage
- EU Commission to Work on Standards for Small Reactors: Simson
- European Equity Volatility Returned to War Peak With CS Failure
- European Real Estate Faces ‘Major’ Headwind From Yields: JPM
Keep an eye on :
Keep an eye on :
- ACLN SW : Accelleron FY Revenue Meets Estimates
- ACS SM :*FCC, ACS, SACYR VIE FOR PORTUGAL HIGH-SPEED TRAIN: ECONOMISTA
- ADS GY : Watch Adidas, Puma as Lululemon Beats Estimates on High Demand
- BABA US : Alibaba’s Cheap Valuation Shows Big Room to Grow With Overhaul
- MT NA : ArcelorMittal Shares Rise After UBS Raises to Buy From Sell
- AT1 GY : Aroundtown FY FFO I per Share Beats Estimates, Aroundtown Suspends 2022 Dividend Payout
- AT1 GY : Aroundtown Announces Cash Tender Offers for 2025, 2026 Notes
- 1211 HK : BYD Gains as Strong EV Sales Drive Spike in Profit
- COLL SS : Collector Bank Board Proposes Name Change to Norion Bank
- DNO NO : Oil Firm Starts Shutdown in Kurdistan Amid Iraq-Turkey Dispute
- DRX LN : Drax Investor Asks UK Biomass Firm to Drop Canada Forest Permits
- ECV GY : Encavis Sees 2023 Oper Ebitda Above EU310M, Est. EU344.8M
- HOLN SW : Holcim Buys Quimexur, No Financial Terms Disclosed
- IFX GY :*INFINEON SEES 2Q REV. ABOVE EU4B, SAW ABOUT EU3.9B, Raises Estimates on Strength in Auto, Industrial Sales
- IFX GY : Infineon Rises in US After Raising Revenue, Margin Forecasts
- ICOS IM : Intercos Holders L Catterton, OTPP Offer 5.5m Shares @ EU13.25/Share
- JEN GY : Jenoptik 4Q Ebitda Beats Estimates
- SKB GY : Koenig & Bauer Sees 2023 Ebit Margin About 3%
- KTN GY : Kontron Sees 2023 Net Income EU66M, Saw Above EU60M
- LULU US : Lululemon FY Net Revenue Forecast Beats Estimates
- MAERSKB DC : Maersk CEO Says Slow Steaming Makes Ship Idling Unnecessary Now
- MBG GY : Kuwaiti Wealth Fund to Sell About 20 Million Mercedes Shares, Offering Placement Price €69.27/SHR
- MBG GY : Kuwaiti Wealth Fund to Sell About 20 Million Mercedes Shares, Offering Placement Price €69.27/SHR
- MU US : Micron Sees 3Q Adj Rev $3.5B to $3.9B, Est. $3.75B: Snapshot
- NESN SW : Nestle Is Said to Make Bid to Acquire BRF’s Pet Food Unit
- OCI NA : Activist Ubben Urges Chemicals Producer OCI to Explore Options
- SWTQ SW : Schweiter Technologies CFO Martin KlöTi to Step Down in Sept.
- SNH GY : Steinhoff’s Plan to Implement Maturity Extension Transaction
- SREN SW : Sergio P. Ermotti to Step Down as Swiss Re Chairman After AGM
- TRI FP : Trigano 2Q Revenue Misses Estimates
- UBSG SW : UBS Names Sergio P. Ermotti as New Group CEO
- UCG IM : ECB Backs UniCredit Buyback in Sign of Confidence for Banks
- WIE AV : Wienerberger May Buy Back Up to 1M Shares, or Up to About 0.9%