>>> Europe : Brokers Upgrades & Downgrades - 27th October 2022

>>> Up
* Ferrari Raised to Buy at HSBC
* Novo Nordisk Raised to Buy at Intron Health; PT 900 kroner
* Scanfil Raised to Buy at Inderes; PT 7.25 euros
* Suominen Raised to Accumulate at Inderes; PT 3 euros
* TT Electronics Cut to Hold at Jefferies; PT 165 pence

>>> Down
* Ageas Cut to Hold at Berenberg
* Dassault Systemes Cut to Underweight at JPMorgan; PT 31 euros
* Konecranes Cut to Hold at Handelsbanken
* Meta Platforms Cut to Sector Weight at KeyBanc
* Meta Platforms Cut to Equal-Weight at Morgan Stanley; PT $105
* PATRIZIA SE Cut to Reduce at Baader Helvea; PT 8 euros

>>> Initiation
* Brooks Macdonald Reinstated Add at Numis; PT 2,340 pence
* Intl Petroleum Rated New Outperform at ATB Capital
* Rathbones Group Reinstated Hold at Numis; PT 2,015 pence
* Telenor Maintained at Buy at New Street Research

>>> Call
* Ageas Downgraded to Hold at Berenberg Following Profit Warning
* Dassault Systemes Cut at JPMorgan on Slowdown in License Sales
* Morgan Stanley Slashes China Stock Outlook After Party Congress

>>> What to look at today - 27th October 2022

Stocks advanced, with US futures bouncing back from tech earnings worries while Hong Kong’s benchmark gauge rallied for a second day.  An index of global shares headed for a fifth day of gains, its longest stretch in more than two months, amid growing expectations of moderating US rate hikes.  A tech rally powered Hong Kong shares to further erode losses incurred earlier this week after President Xi Jinping tightened his grip on power. Japanese stocks led declines in Asia.  The dollar stabilized after a two-day drop and the offshore yuan gave up some of Wednesday’s gains.  The yield on the 10-year Treasury bond sat around 4% after inching below the threshold earlier, with investors positioning for less aggressive rate hikes as earnings and economic data indicate a slowdown. The benchmark US yield has dropped more than 20 basis points over the past two days.  Amid the challenges for equities investors, central banks are providing some optimistic signals that less aggressive monetary tightening may be on the horizon. The Bank of Canada raised interest rates by a smaller amount than expected on Wednesday, adding to suggestions that the Federal Reserve is also getting closer to shifting down in gears. A contraction in services and manufacturing and fewer new home sales showed the Fed’s efforts to cool the economy seem to bearing some fruit. Still, economists expect the Fed to hike by 75 basis points for the fourth time in a row when it meets next week.  US futures climbed, overcoming a 24% decline for Meta Platforms Inc. in after-hours trading following underwhelming third-quarter earnings. Wednesday’s declines for the Facebook parent, Amazon.com Inc., Alphabet Inc. and Microsoft Inc. dragged the S&P 500 to a loss as investors grew uneasy over tech profits. South Korea’s Samsung Electronics Co. was little changed after reporting weak earnings.
Oil gained further ground after touching the highest level in about two weeks after US Secretary of State Anthony Blinken said a deal with Iran would be unlikely to advance in the short term. Traders placed bets on a soaring price for aluminum as the US considers adding the metal to sanctions against Russia, a major producer. US After Hours SNBR -25.9%, ALGN -17.7%, META -17.4%, FORM -15.5%, NTGR -6.8% lower on earnings; NOW +13.2%, PI +13.2%, TDOC +9.9%, PLXS +3.7%, ORLY +2.8%, KLAC +2% higher on earnings

Nikkei -0,13% Hang Seng +1,74% CSI -0,12% Shanghai -0,07% Shenzen -0,01%

Eur$ 1,0073 CNH 7,2286 CNY 7,2176 JPY 145,81 GBP 1,1623 CHF 0,9861 RUB 61,55 TRY 18,6061 WTI$ 88,11 Gold 1,666,60 +1,2% BTC 20,828 ETH 1,563

S&P +0,59% Nasdaq +0,52% EuroStoxx -0,25% FTSE -0,23% Dax -0,14% SMI -0,15%

Macro :
- Argentina Cut by Fitch, Citing Deep Macroeconomic Imbalances
- Morgan Stanley’s Wilson Says Bear Market May End in Early 2023
- Morgan Stanley Slashes China Stock Outlook After Party Congress

Keep an eye on :
- ABI BB : *AB INBEV SEES FY ADJ EBITDA +6% TO +8%, SAW +4% TO +8%
- AC FP : Accor Sees FY Ebitda High End of EU610M to EU640M, Est. EU616.4M
- ADP FP : ADP Sees FY Ebitda Margin Above 34.5%, Saw 32% to 37%
- AGN NA : Aegon to Combine Dutch Ops With ASR; Plans €1.5B Capital Return
- AIR FP : Boeing May Drop 737 Max Variants Unless Deadline Is Extended
- AIXA GY : Aixtron Boosts FY Ebit Margin Forecast
- AMUN FP : *AMUNDI, CVC, TPG ARE SAID AMONG BIDDERS FOR KBANK ASSET MANAGER
- ARCAD NA : Arcadis 3Q Net Revenue EU740M Vs. EU636M Y/y; CEO to Retire
- ARGX BB : Argenx 9M Operating Income $263.2M Vs. $505.7M Y/y
- ATE FP : Alten 9M Revenue EU2.78B Vs. EU2.13B Y/y
- AWE LN : Holders to Sell 31.7m Shares in Alphawave IP Group by Placing
- BFSA GY : Befesa Sees FY Ebitda at Least EU220M, Saw EU220M to EU270M
- BEI GY : Beiersdorf Sees FY Organic Revenue +9% to +10%, Est. +8.51%
- BMG SS : BHG Group 3Q Adjusted Ebit Misses Estimates
- BMPS IM : Investor urges ECB to block €2.5bn rights issue at Italian bank
- BONAVA SS : Bonava 3Q Net Sales Beats Estimates
- BUCN SW : Bucher 9M Sales CHF2.62B Vs. CHF2.36B Y/y
- BVI FP : Bureau Veritas 3Q Revenue Beats Estimates
- CAP FP : Capgemini 3Q Sales at Constant Exchange Rates Beats Estimates
- CAPMAN FH : CapMan 9M EPS EU0.220
- CNE LN : Activist Palliser Seeks to Break Up Capricorn’s NewMed Deal
- CA FP : Carrefour Sees FY Net Free Cash Flow Above EU1B
- CO FP : Casino 3Q Organic Revenue +4.6%
- CO FP : Casino Considers Potential Sale of Partial Assai Stake for $500M
- CLN SW : Clariant Boosts FY Sales Forecast
- CLAB SS : Cloetta 3Q Operating Profit Beats Estimates
- COOR SS : Coor 3Q Net Sales Misses Estimates
- CRBN NA : Corbion 9M Revenue EU1.08B Vs. EU797.6M Y/y
- CSGN SW : Credit Suisse Plans to Raise Capital, Gross Proceeds ~CHF4.0B
- CSGN SW : Apollo Group in Advanced Talks to Buy Credit Suisse SPG Assets
- CSGN SW : Credit Suisse Posts $4 Billion Loss on Charge, Investment Bank
- CSGN SW : Saudi National Bank to Invest up to CHF1.5b in Credit Suisse
- DTG GY : Daimler Truck FY Revenue Forecast Beats Estimates, Daimler Truck Lifts Outlook on Strong Demand, Firm Prices
- DRW3 GY : Draegerwerk 3Q Ebit Loss EU36.6M Vs. Profit EU47.9M Y/y
- ELIS FP : Elis Organic Growth Beats as Costs Rise, Morgan Stanley Says
- ERA FP : Eramet Cuts FY Ebitda Forecast
- FGR FP : Eiffage Buys Getlink Stake From TCI Fund Mgmt for €1.19 Billion
- GET FP : Getlink Welcomes Eiffage Buying TCI’s Stake to Hold 18.79%
- FLOW NA : Flow Traders 3Q Normalized Net Trading Income EU111.7M
- GSK LN : GSK Says FDA Panel Supports Daprodustat for Dialysis Patients
- HFG GY : HelloFresh Maintains FY Adjusted Ebitda Forecast
- IPN FP : Ipsen 3Q Sales Beats Estimates
- JMT PL : J. Martins 3Q Revenue Beats Estimates
- KIN BB : Kinepolis 7.4 Million Visitors in 3Q, +74% Compared to 3Q 2019
- KGX GY : Kion 3Q Revenue Beats Estimates
- KNIN SW : Kuehne+Nagel Partners With Pepco for Contract Logistics Services
- LAND SW : Landis + Gyr Still Sees FY Net Revenue +6% to +10%
- LIFE NO : Lifecare Offering of 18m Shares Prices at NOK2.50/Share
- LHA GY : Lufthansa 3Q Adjusted Ebit EU1.13B Vs. EU251M Y/y
- MDM FP : Maisons du Monde 3Q Sales EU278.5M
- MONC IM : Moncler 3Q Revenue Meets Estimates
- NEM GY : Nemetschek Maintains FY Ebitda Margin Forecast
- NXI FP : Nexity 9M Revenue EU2.95B Vs. EU3.08B Y/y
- ORK NO : Orkla 3Q Adjusted Ebit Misses Estimates
- PHARMA NA : Pharming 9M Operating Profit $28.4M Vs. $15.3M Y/y
- PRS SM : *SPAIN'S PRISA STUDIES €150M CAPITAL INCREASE: EL CONFIDENCIAL
- CASH SM : Prosegur Cash Increases Buyback Authorization, Extends by a Year
- REP SM : *REPSOL 3Q ADJ NET EU1.48B, EST. EU1.52B
- RXL FP : Rexel Sees FY Same-Day Sales +12%, Saw +7% to +9%
- RBREW DC : Royal Unibrew 3Q Net Revenue Meets Estimates
- SAB SM : Sabadell 3Q Net Income Beats Estimates
- SPM IM : Saipem Sees FY Revenue Above EU9.00B, Est. EU8.69B
- SANN SW : Santhera, ReveraGen Seek FDA’s Priority Review For Vamorolone
- SU FP : Schneider Electric 3Q Organic Revenue Beats Estimates
- SCHA NO : Schibsted 3Q Ebitda Beats Estimates
- SOW GY : Software AG 3Q Adjusted Ebita Misses Estimates
- SOI FP : SOITEC 2Q Revenue Beats Estimates
- STM FP : STMicroelectronics 4Q Net Revenue Forecast Meets Estimates
- SWECB SS : Sweco 3Q Operating Profit Misses Estimates
- SWEDA SS : Swedbank 3Q Net Interest Income Beats Estimates
- SCMN SW : Swisscom FY Net Revenue Forecast Meets Estimates
- FTI US : TechnipFMC 3Q Adj EPS Cont Ops Misses Estimates
- TNET BB : Telenet 3Q Adjusted Ebitda Matches Estimates
- TSLA US : Tesla’s Lithium Supply Talks Fail With Australian Miner Core
- TIETO FH : TietoEVRY 3Q Adjusted Operating Profit Beats Estimates
- TOD IM : DeVa Finance Says Tod’s Offer Threshold Not Fulfilled
- URW NA : Unibail Boosts FY Adjusted Recurring EPS Forecast
- UNI SM : Unicaja 3Q Net Income Beats Estimates
- VASTN NA : Vastned Sees FY EPS High End of EU1.95 to EU2.05
- VERK FH : Verkkokauppa.com 3Q Net Income Misses Estimates
- VOS GY : Vossloh 9M Ebit EU55.0M Vs. EU62.2M Y/y
- VOLVB SS : Volvo Cars 3Q Operating Income Misses Estimates
- VOW GY : VW Will Make Only Electric Cars in Europe Within Next 10 Years
- VOW GY : Ford, VW-Backed Argo AI is Shutting Down: TechCrunch
- WCH GY : Wacker Chemie Cuts FY Ebitda Forecast, Misses Estimates
- WHA NA : Wereldhave Narrows FY EPS Forecast
- XXL NO : XXL 3Q Ebitda Misses Estimates

>>> US After Hours Summary: SNBR -25.9%, ALGN -17.7%, META -17.4%, FORM -15.5%,

After Hours Summary: SNBR -25.9%, ALGN -17.7%, META -17.4%, FORM -15.5%, NTGR -6.8% lower on earnings; NOW +13.2%, PI +13.2%, TDOC +9.9%, PLXS +3.7%, ORLY +2.8%, KLAC +2% higher on earnings

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: NOW +13.2%, PI +13.2%, TDOC +9.9%, GSHD +9.5%, COUR +7.5%, OII +6.9%, ETD +6.6%, PPC +6.2%, ALSN +5.8%, VMI +5.5%, MOH +4.9%, UCTT +4.6% (also authorizes new $150 mln share repurchase program), FLEX +4.4%, PLXS +3.7%, PTEN +3.2%, BHE +3%, OMF +2.9%, ORLY +2.8%, MUSA +2.4%, KLAC +2%, NLY +1.5%, ENSG +1.2%, VFC +1.1%, AEM +1%, AGI +0.9%, CACI +0.6%, URI +0.6% (also authorizes new $1.25 bln share repurchase program), RE +0.4%, RJF +0.4%, AM +0.3%, FBHS +0.3%, QS +0.3%, MSA +0.2%, PGRE +0.2%, WFG +0.2%, ASGN +0.1%, AXS +0.1%, CCS +0.1%, CLB +0.1%, ESS +0.1%, MAA +0.1%, UDR +0.1%

Companies trading higher in after hours in reaction to news: AMSF +4.3% (declares special cash dividend of $4/sh), AWK +1.9% (acquires City of Blue Grass wastewater system), CS +1.4% (CS nearing sale of its securitized-products group to APO and PIMCO, according to WSJ), SKX +1% (issues statement on Kanye West unauthorized visit), MRO +0.2% (increases dividend), MRK +0.1% (names new chairman)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: WOLF -27.2%, SNBR -25.9%, ALGN -17.7%, META -17.4%, FORM -15.5%, TROX -13.3%, SLP -10.4%, LC -9.1%, NTGR -6.8%, FTI -6.6%, DLR -5.2%, BOOT -5%, CYH -4.7%, CHDN -3%, AR -2.4%, EQT -1.8%, F -1.8% (also resumes modest share repurchase program; to wind down Argo AI investment), INVH -1.2%, SAVE -0.9%, PEGA -0.8%, UPWK -0.3%, GL -0.2% (also co-CEOs both stepping down; names 2 new co-CEOs), EHC -0.1%, ESI -0.1%, GGG -0.1%, OLN -0.1%, STC -0.1%, TYL -0.1%

Companies trading lower in after hours in reaction to news: PSTL -0.1% (increases dividend), GENI -0.1% (expands partnership with Football DataCo for Premier League)

>>> US Close Dow +0,01% S&P -0,74% Nasdaq -2,04% Russell +0,46%

Closing Stock Market Summary

The stock market had a choppy session today. The S&P 500 was above its 50-day simple moving average (3860.02) and up 0.7% at today's high. It closed with a loss of 0.7%. The major averages were steered by price action in the mega cap stocks. 

Alphabet (GOOG 94.82, -10.11, -9.6%) and Microsoft (MSFT 231.32, -19.34, -7.7%) led the downside charge following their earnings reports, yet worries about what may come for Apple (AAPL 149.35, -2.99, -2.0%) and Amazon.com (AMZN 115.66, -4.94, -4.1%), when they report later this week, undercut the heavily-weighted and widely-held stocks. 

The Dow Jones Industrial Average was able to close just a whisker above the flat line thanks in part to the earnings-driven gain in Visa (V 203.33, +8.95, +4.6%). Index level gains were limited, however, due to a big loss in Boeing (BA 133.79, -12.86, -8.8%). The company reported disappointing quarterly results and said its path to recovery is taking a bit longer than expected driven by the challenging macro environment. Supply constraints continue to impact production in both its commercial and defense businesses.

There was underlying strength in today's trade, however, as the Invesco S&P 500 Equal Weight ETF (RSP) closed with a 0.2% gain. Also, advancers led decliners by a roughly 4-to-3 margin at both the NYSE and the Nasdaq. 

Factors supporting the broader market included favorable quarterly results from names like Harley-Davidson (HOG 41.80, +4.68, +12.6%) and Bristol-Meyers (BMY 74.45, +1.68, +2.3%), a growing belief that the Fed will soften its approach after the November meeting, and a pullback in Treasury yields. The 10-yr note yield fell nine basis points to 4.02% and the 2-yr note yield fell four basis points to 4..42%.

Roughly half of the 11 S&P 500 sectors closed with a gain, led by energy (+1.4%) amid rising oil prices. WTI crude oil futures rose 3.4% to $87.86/bbl. 

Meanwhile, the communication services sector (-4.8%) was the worst performer by a wide margin, largely due to Alphabet and Meta Platforms (META 129.82, -7.69, -5.6%). Information technology (-1.1%) was another top laggard thanks to its mega cap components, but its losses were limited by big earnings-driven gains in Enphase Energy (ENPH 291.87, +26.28, +9.9%) and Visa.

Small and mid cap stocks fared better than their larger peers today. The Russell 2000 (+0.5%) and S&P Mid Cap 400 (+0.2%) both logged a modest gain on the day. 

Ahead of Thursday's open, Comcast (CMCSA), Anheuser-Busch InBev (BUD), Caterpillar (CAT), Merck (MRK), Northrop Grumman (NOC), Honeywell (HON), AutoNation (AN), McDonald's (MCD), Mastercard (MA), and Altria (MO) are set to report earnings.

Thursday's economic data includes:

  • 8:30 ET: Advance Q3 GDP (consensus 2.3%; prior -0.6%), advance Q3 Chain Deflator (consensus 5.3%; prior 9.0%), weekly Initial Claims (consensus 220,000; prior 214,000), Continuing Claims (prior 1.385 mln), September Durable Orders ( consensus 0.6%; prior -0.2%), and Durable Orders ex-transportation ( consensus 0.2%; prior 0.2%)
  • 10:30 ET: Weekly natural gas inventories (prior +111 bcf)

Reviewing today's economic data:

  • Weekly MBA Mortgage Application Index -1.7%; Prior -4.5%
  • September Adv. Intl. Trade in Goods -$92.2 bln; Prior -$87.3 bln
  • September Adv. Retail Inventories 0.4%; Prior 1.4%
  • September Adv. Wholesale Inventories 0.8%; Prior was revised to 1.4% from 1.3%
  • September New Home Sales 603K ( consensus 575K); Prior was revised to 677K from 685K
    • The key takeaway from the report is that it reflects how the spike in mortgage rates has created affordability pressures for lower-income buyers. The jump in median and average selling prices was skewed by higher-priced homes accounting for a larger percentage of total new homes sold.

Dow Jones Industrial Average: -12.4% YTD
S&P Midcap 400: -15.9% YTD
S&P 500: -19.6% YTD
Russell 2000: -19.6% YTD
Nasdaq Composite: -29.9% YTD

WWD : Gagosian Denies It Is in Talks With LVMH

Gagosian Denies It Is in Talks With LVMH
Speculation that the world's biggest art gallery and the luxury conglomerate are in talks about a deal has been swirling.


Gagosian, the world’s biggest art gallery, has denied speculation that it is in talks with LVMH Moët Hennessy Louis Vuitton.

Talk of a potential deal between the two has wide been circulating both within the art and luxury goods worlds, with two art publications — the Art Newspapers Italian edition and Artnet News — reporting on the speculation. The speculation suggested that LVMH was in talks to invest in Gagosian, the mega-gallery founded by Larry Gagosian in Los Angeles, California, in 1980 and which now encompasses some 16 spaces worldwide.

Multiple sources also told WWD and ARTnews, its sister publication within Penske Media Corp., that they were aware of talk of
But on Tuesday, a Gagosian representative vigorously disputed that any deal is in the works.

“There is absolutely no truth to the rumor and the company is not for sale,” the Gagosian spokesperson said in an email.

LVMH declined to comment.

LVMH’s operations span from Christian Dior and Louis Vuitton to Moët Champagne, the Cheval Blanc hotels and the yacht manufacturer Princess Yachts. Owning or investing in Gagosian would give the conglomerate a foothold in the rapidly expanding art market.

The speculation comes as the art market directed its attention last week to the French capital. Paris+, the first edition of a new Art Basel fair, just completed its first edition in the city, where Gagosian has two locations, plus a third in the nearby suburb of Le Bourget. Numerous luxury brands, including several owned by LVMH, had activations around the art fair, as reported.

The talk also arrived as Gagosian begins to plot its future. Larry Gagosian, who is 77 years old, has begun to reveal his succession plans in the past few years, naming Andrew Fabricant as the gallery’s chief operating officer in 2019. Details have been scant since then, however, leading to speculation about where the gallery is headed in the years to come.

Previously, Fabricant has advocated for a total merger of the art and fashion sectors. “You have [Bernard] Arnault buying Tiffany’s and then buying a Basquiat painting and then producing a Patek Philippe limited[-edition] watch that is first seen on Jay-Z’s wrist,” he told WWD earlier this year. “The interaction of art and commerce and fashion is inevitable. It’s just being accelerated by the consolidation of all these issues, whether it’s Kardashian, Arnault or the Gagosian Gallery having 19 galleries. It’s just more, more, more. It’s also mutually beneficial.”

While Gagosian’s main competitors — David Zwirner, Hauser & Wirth and Pace — have made forays into industries beyond the art world, none can boast an investment from a company as large as LVMH.

Gagosian represents some of the world’s most high-profile artists, including Georg Baselitz, Theaster Gates, Michael Heizer, Damien Hirst, Takashi Murakami, Richard Serra and Jordan Wolfson. These artists appear side by side on the roster with younger ones with loyal market followings, like Jadé Fadojutimi and Anna Weyant.

Gagosian reportedly accounts for a billion dollars in sales annually.

Meanwhile, Bernard Arnault, LVMH’s chairman and chief executive officer, is one of the world’s top art collectors. Arnault is known to buy various Gagosian artists, including Hirst, Murakami and Richard Prince. Arnault and other members of his family are also believed to be close with Larry Gagosian. The luxury titan also founded the Fondation Louis Vuitton in Paris that houses some of his collection in a spectacular museum designed by Frank Gehry.

The acquisition of a stake in Gagosian would give Arnault a leg up in the art world over his business rival, François Pinault, the founder of French luxury goods company Kering, which owns the auction house Christie’s. Pinault is also a major collector with his own museum in Paris dedicated to his collection.

Another art connection is its portfolio, which at one point included a stake in the Phillips auction house. LVMH acquired the stake in 1999, then divested itself of it four years later amid a period of financial strain at Phillips.

Talk of LVMH’s potential investment in Gagosian comes as the boundary between art galleries and lifestyle brands has become increasingly blurred.

Gagosian, for its own part, operates a series of shops that sell branded offerings. Pace recently opened a teahouse in Seoul, South Korea, that’s partnered with the luxury brand Osulloc, and Manuela and Iwan Wirth, the founders of Hauser & Wirth, run a hospitality arm.

TechCrunch : Twitter’s Elon problem could soon become Apple’s Elon problem, too

Twitter’s Elon problem could soon become Apple’s Elon problem, too

Reports indicate Elon Musk is on track to close his purchase of mildly popular bird website Twitter dot com as of this Friday, which is when he’s been ordered by the judge in the ongoing legal fracas to do so anyway. The deal closing is bound to have huge impacts — for Twitter employees themselves; for global political leaders; for news media; and, potentially, for Apple and its escalating in-app-purchase land grab.

Apple updated its developer guidelines this week, mending the wall on its garden where there gaps existed previously around digital revenue opportunities for third-party developers. One of these focused on crypto and NFTs, but another seeks rent on revenue made by social networks around promoted posts, including paid promotional efforts in Meta’s Facebook and Instagram apps, for example. Those rules also apply to Twitter, but that social network already makes use of Apple’s IAP program to enable them on iOS devices, meaning the iPhone-maker already gets its cut.

If Twitter’s already cool with Apple’s skim, then everything should be fine… except that Musk has waded into the wider debate about what’s fair for Apple to charge its partners when it comes to digital transactions on its platform. Early on Wednesday, the billionaire serial founder tweeted a response to his longtime investor Bill Lee, agreeing that “30% is a lot” for Apple to charge developers for IAP transactions. This isn’t the first time he’s expressed disapproval of the fee, either.

Right now, Musk has little stake in this fight, but come Friday that could change significantly, especially as he looks for ways to boost Twitter’s revenue once he takes over control. Apple already has its fair share of influential vocal developer opposition, including Epic’s Tim Sweeney and Spotify’s Daniel Ek, but the influence Musk wields with his zealous troll army is on another level entirely.

A Musk-owned Twitter is going to have ripple effects that extend far and wide, but this could be one that shakes up some of the foundations upon which the modern tech ecosystem is based.

TechCrunch : Ford, VW-backed Argo AI is shutting down

Ford, VW-backed Argo AI is shutting down

Argo AI, an autonomous vehicle startup that burst on the scene in 2017 stacked with a $1 billion investment, is shutting down — its parts being absorbed into its two main backers: Ford and VW, according to people familiar with the matter.

During an all-hands meeting Wednesday, Argo AI employees were told that some people would receive offers from the two automakers, according to multiple sources who asked to not be named. It was unclear how many would be hired into Ford or VW and which companies will get Argo’s technology.

Employees were told they would receive a severance package that includes insurance and two separate bonuses — an annual award plus a transaction bonus upon the deal close with Ford and VW. All Argo employees will receive these. For those who are not retained by Ford or VW, they will additionally termination and severance pay, including health insurance. Several people told TechCrunch that it was a generous package and that the founders of the company spoke directly to its more than 2,000 workforce.

TechCrunch will update this story with official comment.

Argo was founded in 2016 by Bryan Salesky and Pete Rander. The company came out of stealth in February 2017 when Ford announced it would invest $1 billion over five years into Argo. Since then, the company has raised more than $2.6 billion, primarily from Ford and VW, in a pursuit to develop, test and eventually commercialize its automated driving system.

The initial Ford investment came at a particularly hype-y time for the nascent autonomous vehicle industry. Startups, many founded by early pioneers of Google’s self-driving project, were landing eye-popping venture capital deals. A string of acquisitions followed: GM bought Cruise for $1 billion in 2016; Delphi, which is now Aptiv, acquired nuTonomy for $450 million; and Amazon bought Zoox.

The promises around commercializing AV technology have proven more difficult than expected. A wave of consolidation washed over the industry with companies folding, being absorbed into other companies, including Apple, and others turning to SPACs in hopes of gaining the capital it needs to continue its mission.


Argo seemed to be gaining ground in the past year. The company’s self-driving Ford Fusion vehicles, and now Ford Escape Hybrids, were frequently seen testing on public roads in Austin, Detroit, Miami, Palo Alto and Pittsburgh, where it is headquartered. In the EU, Argo was using the all-electric Volkswagen ID Buzz for its testing programs in Hamburg and Munich. Argo also has several pilot programs underway in Austin, Miami and Pittsburgh with Lyft, Walmart and 412 Food Rescue.

And just last month the company revealed an ecosystem of products and services designed to support commercial delivery and robotaxi operations. The products — a list that includes fleet management software, data analytics, high-definition mapping and cloud-based communication tools — stretches far beyond the self-driving system that allows a vehicle to navigate city streets without a human driver behind the wheel. Argo appeared to be telling the world it was open for business.

This story is developing …

More TechCrunch

FT : Traders urge ECB to ease collateral shortage in repo market

Traders urge ECB to ease collateral shortage in repo market
International Capital Market Association warns of ‘rising dysfunction’ in money markets

The eurozone’s repo and money markets are becoming more dysfunctional and threatens the European Central Bank’s ability to push its monetary policies through markets, an influential trade group has warned.

The International Capital Market Association, which represents the bond market’s biggest traders, said it had become concerned about the functioning of Europe’s €10tn repo markets because of a scarcity of liquid assets, and excess liquidity in the region’s banking system.

ICMA’s warning comes amid fears climbing global interest rates and poor trading conditions have heightened the risk of market instability.

UK gilt markets descended into chaos last month after the government’s ill-fated “mini” Budget of unfunded tax cuts sharply worried investors, sending their yields soaring — although this was because of a lack of buyers of gilts, rather than excess liquidity.

Repo markets are a crucial source of short-term funding and collateral for banks, helping them meet margin requirements for derivatives trades. The European Central Bank also sees it as a critical mechanism for transmitting monetary policy.

ICMA said that while the imbalance in eurozone repo markets has led to ructions, notably in March 2020 at the onset of the coronavirus pandemic, the normalisation of interest rates increased the potential for bigger and more frequent market dislocations.

“Rising dysfunction in the market could imperil the transmission of monetary policy,” ICMA wrote in a letter to the ECB’s director-general of market operations, signed by division heads at BlackRock, Axa Investment Managers, Barclays and UBS.

“We’ve moved from an environment where you’ve needed to inject liquidity on a large scale to questioning at what pace that should be reduced,” Bryan Pascoe, chief executive of ICMA, told the Financial Times. “There are contradictory pressures of rates needing to move higher while avoiding demand destruction. It’s a fine balancing act.”

ICMA recommended the ECB consider other measures to help markets, such as a reverse repo facility similar to the one introduced by the Federal Reserve in 2013. In it, the US central bank sells securities to counterparties and buys them back later, similar to a short-term loan.

ICMA also highlighted the Swiss National Bank’s plan to issue tradable Treasury bills, saying it was simpler to create than a reverse repo facility and “would have the additional advantage of not tying up bank balance sheets”.

Germany’s debt agency this month sought to address the scarcity problem by creating more government debt securities that it can lend out to investors via repo markets.

The ECB has also taken some steps to address the issue, increasing the amount of cash that can be used as collateral in its securities lending facility in December and removing a zero per cent cap on interest for government deposits last month.

The central bank also discussed the idea of launching a reverse repo facility or issuing its own debt certificates at a meeting last month of its money market contact group, a forum for discussions with financial institutions. But the ECB has since pushed back against the idea that it is planning to imminently adopt such proposals.

The ECB, which declined to comment on the ICMA letter, has acquired a €5tn portfolio of mostly government bonds over the past decade, which has increased excess liquidity at banks and created a scarcity of high-quality securities.

This has put downward pressure on risk-free rates at a time when the central bank is trying to raise them. Konstantin Veit, portfolio manager at Pimco, said: “As there are limited safe options out there to invest in, this leads to collateral scarcity and drives a large part of the money market to trade well below the ECB’s deposit rate.”

Veit said he expected the ECB to consider creating a similar vehicle to the Fed’s reverse repo facility or to even issue its own debt, while adding that such a move was not imminent.

ICMA warned “pressures on short-term markets and collateral scarcity could be further accentuated” by the changes expected to be announced by the ECB this week to its €2.1tn of ultra-cheap loans to banks, known as targeted longer term refinancing operations (TLTRO).

The ECB is expected to encourage banks to repay a big chunk of TLTRO loans in December by making them less attractive. However, officials think this should help to ease the scarcity of high-quality bonds by freeing up the collateral pledged against the loans and reducing the €5tn of excess liquidity in the euro area.

(ZH) Roubini Warns Of Imminent Dollar Crash: The Fed Is Going To "Wimp Out" In T

Roubini Warns Of Imminent Dollar Crash: The Fed Is Going To "Wimp Out" In The Inflation Fight

Economist Nouriel Roubini says Federal Reserve is going to “wimp out” on the inflation fight and that will lead to a dollar crash.

Roubini is the Professor Emeritus at the Stern School of Business, New York University. He recently appeared on Bloomberg Markets and Finance to talk about threats to the global economy.
Roubini predicted the housing bubble would pop in an IMF position paper in 2006. When asked if we were there again, he emphatically said, “Yes.”
Yes, we are here again. But in addition to the economic, monetary and financial risks — and there are new ones now, we’re going toward stagflation like we’ve never seen since the 70s — in the book, I point out that there are also geopolitical risks.”

These include possible confrontations with China and Russia, environmental risks, health risks, and technological risks. Roubini called it a confluence of “mega risks.”
You might not expect Roubini to talk like this. He served in the Clinton administration as a senior economist in the White House Council of Economic Advisers and then moved to the Treasury department as a senior adviser to Timothy Geithner who was undersecretary for international affairs at the time. Despite his work in a Democratic Party administration, he sounds a lot like Peter Schiff when it comes to his views on the trajectory of the economy.
Roubini pointed out the amount of debt in the global financial system. Debt to GDP has gone from 200% to 350% globally. In the US the debt to GDP ratio is higher than after the Great Depression and WWII. After the 2008 financial crisis and during the pandemic, Zombie households, corporations, banks and governments were bailed out by negative interest rates and quantitative easing.
This time around is different because we have so much debt and central banks like the Fed have to increase interest rates to fight inflation so that zombie institutions are going to go bankrupt. That’s why not only are we going to have inflation and stagflation, but we’ll have a stagflationary debt crisis.”
We had supply shocks in the 70s similar to those we’ve experienced in the post-pandemic era. But at that time in most of the developed world, debt ratios were low. There were no debt crises in developed nations. But we did see debt crises in Latin America because those countries like Brazil, Mexico and Argentina had borrowed too much. When Volker jacked up interest rates to 20%, they went bankrupt.
Today, we have the worst of the 70s. We have a massive amount of stagflationary negative supply shock … and at the same time, we have a debt ratio like we’ve never seen before. So, we get a stagflationary debt crisis.”
The IMF identifies around 40 emerging market countries on the verge of a sovereign debt crisis. And Roubini said we are starting to see these problems spilling to developed nations. He specifically mentioned the United Kingdom being forced to monetize reckless fiscal stimulus.
Right now, all central banks are playing tough, and talking tough, and acting tough – hawkish – because they have a problem of credibility. But in my view, there are two problems. One problem is if they try to get to 2% inflation, they cause a recession. And this recession is not going to be short and shallow. It is not going to be garden variety. It’s not going to be plain vanilla. It’s not going to be two quarters of negative growth and then inflation collapses and they can ease again. … It’s going to be a severe recession because of the debt ratio — because we’re going into fiscal and monetary tightening. And at the same time, not only do we have an economic crash, you’re going to have also a fiscal crash.”
Roubini called it a debt trap. There is so much private and public debt that any attempt to seriously fight inflation will ultimately cause a crash in financial markets.
And not just the stock market. That’s the least important. Credit markets and bond markets — And that crash and the financial crash feeds on the economic crash and vice versa. And therefore, they’re going to wimp out and they’re going to blink.”
The Bank of England already blinked. Roubini said the Federal Reserve is going to do the same.
Roubini also warns of an impending dollar crash. He said the greenback is at risk due to the twin deficits – budget and trade. He also mentions the weaponization of the dollar. But the real catalyst will be the Fed “wimping out.”
Once the Fed is going to essentially prevent an economic and financial crash – or try to prevent it by … stopping raising rates, even though inflation is too high, then the dollar is going to start to sharply weaken. That is going to be the trigger for it. Because what is raising the dollar is tight monetary policy.”
So, what can you do to protect yourself? Roubini recommends buying gold.
Gold has not done very well because you have tight monetary policy and a strong dollar. But if central banks are going to blink and wimp out, gold is going to rise in value.”

FT : Cryptos: stable coins, but in the wrong way

Cryptos: stable coins, but in the wrong way
Rising rates have shown how dependent cryptocurrencies were on broader bullishness

Cryptos, never easy assets for non-believers to rationalise, are presenting yet another conundrum. Instead of gyrating wildly, as they had previously done, they have stabilised.

Bitcoin has been rangebound around $20,000 for the past four months. Ethereum is stuck at about $1,300. The S&P 500 index, to which some cryptocurrencies had shown a close relationship, has gained and lost about 20 per cent over the same period.

You might think that cryptos have vanquished critics and proved their worth as an uncorrelated asset and a store of value. If so, think again.

Bitcoin has crashed from its peak of $68,000 in November last year. Crypto businesses such as Voyager Digital and Celsius Network have gone bust. So-called stablecoins — terra, luna — have evaporated. A host of entities with horrendous risk management were caught in a whirlpool of contagion and flushed out of the cryptosphere.

The value destruction has been immense. The market worth of all bitcoins in existence has fallen from $1.3tn in November to about $400bn today. Since its launch last October, the world’s first exchange traded fund tracking the price of bitcoin has lost just under $1.2bn. That is about two-thirds of investors’ money and a bigger money bonfire than for any other misfiring ETF debut.

The crash may also be the death knell for El Salvador’s much-hyped billion dollar bitcoin bond. The first and so far only country to accept bitcoin as legal tender appears to have quietly shelved an issue originally slated for March this year.

More than half of all bitcoin wallets are in the red. This has happened before. But crypto is in its first bear market since the end of the money-printing, zero interest rate era. “Bitcoin was launched into the biggest bull run in history,” says Dan Ashmore, a crypto data analyst. “It has never existed in a wider bear market.”

Higher energy costs have made profits harder for bitcoin miners to realise. The price crash appears to have flushed out the wild, leveraged investors. That leaves true believers and habitual speculators “HODLing” on for dear life.

Bitcoin retains its utility to buyers as a speculative asset, ideological badge or currency for illicit transactions. You could theorise that its current price represents that residual value. Lex had been using bitcoin as a benchmark of irrational exuberance. That function is in abeyance while rising rates make bears of us all.