WSJ : Tiffany, LVMH Near Agreement on New Deal Terms

Tiffany, LVMH Near Agreement on New Deal Terms
New agreement calls for LVMH to pay $131.50 a share, down from $135

Tiffany TIF +1.20% & Co. is nearing agreement to lower the price of its purchase by LVMH LVMUY -4.40% Moët Hennessy Louis Vuitton SE to $131.50 a share, according to people familiar with the matter.

(ZH) Gundlach: Trump Will Win Next Week, And By 2027 "There Will Be Some Sort Of

Gundlach: Trump Will Win Next Week, And By 2027 "There Will Be Some Sort Of Revolution"


Back at the start of 2016, when nobody else would even consider such an outcome, DoubleLine Capital CEO Jeff Gundlach shocked the economic, financial and political establishments when during the January Barron's roundtable of that year, he predicted that Donald Trump would become the next US president. He was right.
Fast forward to today when one week before the elections, and in an environment when most polls predict that Biden will crush Trump and where Nate Silver gives Trump just as 13% chance of defeating Trump, Jeffrey Gundlach is predicting another victory for President Donald Trump.
As Financial Advisor magazine reported, during a Tuesday webcast as part of Schwab’s 2020 IMPACT conference, Gundlach said that despite polls, analysis and betting odds that suggest otherwise, Trump is likely to outpace former Democratic vice president Joe Biden in the contest.
"The polls right now say he isn’t going to win, but they said that four years ago," said Gundlach referring to the following chart.

"Mind you, my conviction is way lower than it was four years ago. But back in [that period], when Trump was little more than an asterisk in the betting odds, I predicted he was going to win. This one is much more murky, but in my eyes, it favors a Trump win."
Addressing the elephant in the room, Gundlach said that public political polls are often "designed to create impressions" rather than illustrate reality, said Gundlach, and shouldn’t be trusted (for more on this read our post from 2016 "New Podesta Email Exposes Playbook For Rigging Polls Through "Oversamples"). He also argued that many Trump voters are unwilling to engage with pollsters and the media because they fear retribution for their political beliefs, also known as the "shy voter" phenomenon according to which "Over 10% Of Trump Voters Won't Admit Preferences To Pollsters." Biden also faces an enthusiasm problem, said Gundlach.
Gundlach then went on to crush hopes of a Blue Wave, arguing that Republicans will likely keep the Senate regardless of who wins – mainly because of uncertainty around Biden. "Some people will hedge their bets and split their vote towards retaining the Republican Senate because they view Biden as risky," said Gundlach, who noted that Trump is often portrayed as riskier than Biden. And yet, in the four years of his presidency, there have been no international conflicts, despite some outrageous and bellicose language.
"You might dislike Trump or some of his policies, but risk is not what you’re getting with him, particularly compared to turning the presidency over to another party, and particularly when that party’s candidate isn’t saying what some of his policy positions are."
If Gundlach is wrong, and Biden wins the election and eventually rolls back or eliminates the corporate tax reduction from 2017’s Tax Cuts and Jobs Act, U.S. equity valuations would increase sharply, said the DoubleLine CEO, but he added that the reduction in after-tax earnings would mean that stock prices would not appreciate. Interest rates, volatility and inflation would also rise, said Gundlach.

"Markets don’t like certainty, and with Trump, I think you have more certainty,” said Gundlach. “With Biden, you have peak uncertainty because there’s been very little information given to the public.”
Gundlach clarified that he doesn’t think Biden is a socialist, but that pressured by the Democratic Party’s base, his administration would pursue higher taxation and “socialist policies,” but it’s hard to be sure because Biden has changed many of his positions over his long political career.
The opposite is true of Biden’s running mate, California Senator Kamala Harris, who Gundlach called “one of the most left-leaning people in all of the Senate” who is not shy about sharing her opinions.
Gundlach then said that Americans should consider the all too real possibility that a Biden victory means that at some point within the next four years, Harris will ascend to the presidency.
"We have to discount the probability of outright socialist policies with outrageous amount of deficit spending,” said Gundlach. "That would pose a big problem for stock and bond markets."
Yet no matter who the winners is on Nov 3, Gundach said that 2020 is just another in a series of election cycles that have increased in their tumult and oddity.
At this point Gundlach went "full Zero Hedge", and predicted that by 2027, economic inequality, strained by fiscal and monetary policy, would come to the point of some sort of revolution, which would put the 2024 presidential election directly in the path of massive social, economic and political change. Which, incidentally, is more or less everything that we have been saying for the past 12 years.
"When I said that I think Trump is going to win in 2016, I also said that if you think 2016 is weird, just wait for 2020,” said Gundlach.
"Well, if you think 2020 is weird, just wait until 2024. You ain’t seen nothing yet."

(ZH) Liquidation? Gold, Silver, Bonds, & Bitcoin Dumped As Dollar Spikes

Liquidation? Gold, Silver, Bonds, & Bitcoin Dumped As Dollar Spikes

If we didn't know better we would suggest that today's stock market puke was reflexively driving a desperate rush for liquidity as the dollar spikes higher as bonds (barely moving despite the massive puke), bullion (gold and silver slammed), Bitcoin (a recent favorite hiding place) are all exhibiting signs of liquidation...
Since the open, stocks are being dumped...
Bitcoin is back below $13000...

Bullion is puking (gold <$1900)...
...and silver < $24...
And bonds are also being sold along with stocks...

And all of that is driving the dollar higher...

FT : PSA rebounds but lockdown concerns resurface

PSA rebounds but lockdown concerns resurface
French group’s core auto division sales increase but shares slip on country’s impending restrictions

Peugeot owner PSA’s core revenues rebounded in the third quarter, but the French carmaker warned it could be thrown off course by looming new restrictions to curb the spread of Covid-19 in Europe.

PSA said that overall sales in the quarter were down 0.8 per cent compared with the same period last year to €15.5bn. However, sales at its key automotive division were up 1.2 per cent at €12bn. 

The number of cars it sold fell but a “strong product mix and pricing policy” — highlighting the renewed focus on more profitable models pushed by chief executive Carlos Tavares — helped keep revenues in the autos division positive.

Revenues had fallen sharply in the first half, with the automotive division down 35.5 per cent as PSA, along with peers, suffered as lockdowns closed dealerships and cut demand for cars. 

Philippe Houchois, an analyst at Jefferies, said PSA’s overall revenues were 5.6 per cent above consensus estimates while the auto division revenues were 10 per cent ahead.

The revenue uptick failed to lift PSA’s shares, which slipped 3.8 per cent, mirroring falls on the wider benchmark CAC 40 index as the country awaits new Covid-19 related restrictions likely to be announced by President Emmanuel Macron on Wednesday evening. PSA’s stock has shed more than a quarter of its value this year.

Carmakers’ sales across Europe have improved in recent weeks as economies and dealerships have reopened. But with fresh restrictions looming, analysts are warning the coming months could be challenging. 

Philippe de Rovira, PSA chief financial officer, said the group should generate positive free cash flow at the end of the year, and that it planned to increase production in the fourth quarter. However, he warned those plans were “valid except if we face a second major lockdown like in the first half of the year”.

Mr de Rovira added that PSA was working with 25 per cent less inventory than last year as “we want to be sure that if there is a second lockdown, we don’t have cash that is trapped and we don’t want to be forced to make a destocking in a disorderly manner”.

PSA is also merging with Italian-American Fiat-Chrysler, which was agreed last year and will create the world’s fourth-largest carmaker, to be called Stellantis.

EU competition authorities are expected to allow the deal to complete in the first quarter of next year, with Mr de Rovira saying on Wednesday that he saw no other significant obstacles in the way.

The two groups have already agreed to amend the terms of their €50bn merger to preserve more cash within the combined business — by cutting expected payouts to shareholders — to help the carmakers weather the global economic impact of the coronavirus pandemic.

On Wednesday, the companies said they would sell up to a 7 per cent stake in Faurecia, which is 46 per cent owned by PSA, to make sure the new merged group would not own the car parts supplier. The proceeds of the sale and the rest of the shares will be handed out to Stellantis’s shareholders.

Electrek : Tesla should sell its self-driving computer chips, says comma.ai’s Ge



George Hotz, CEO of comma.ai, argues that Tesla should sell its self-driving computer chip and create some competition to Nvidia in the process.

Hotz rose to fame through his hacking feats as a teen, but more recently, he has become a highly respected programmer and he founded comma.ai, which aims to solve self-driving while delivering level 2 driver-assist features in the process.
As we previously reported, comma.ai aims to be to Tesla what Android is to Apple iOS, but with self-driving technology.
In order to develop its technology, the startup relies on powerful computers powered by chipmaker giant Nvidia.
Until recently, Tesla was in the same situation and using Nvidia’s chips, but the automaker has developed its own “Full Self-Driving chip,” also known as its Hardware 3.0 (HW 3.0) self-driving computer.
Tesla hired a team of famed chip designers, including Jim Keller, to design the chip.
They claim a factor of 21 improvement in frame-per-second processing versus the previous generation Tesla Autopilot hardware, which was powered by Nvidia hardware, while only barely increasing the power consumption.
Tesla is also developing its own super computer, nicknamed Dojo, to train its neural nets for self-driving.
In a new interview with Lex Fridman, Hotz made the argument that Tesla should sell those computer chips:

Hotz argues that Nvidia basically enjoys a monopoly right now when it comes to training self-driving vehicles:
You basically have two options right now to train. Your options are Nvidia or Google — and Google is not even an option since their TPUs are only accessible through Google Cloud. Google has absolutely horrendous terms of service restrictions. They may have changed it, but it used to explicitly say that you are allowed to use Google Cloud ML for training autonomous vehicles or doing anything that competes with Google without their prior permission.
The computer programer says that he used to like Nvidia, but he believes that the company has changed a lot in recent years following the financial success that they experienced.
Nvidia stock rose from $30 a share to now over $500 a share in about 4 years:
Hotz believes that they are using their monopoly to overcharge for their high-end chips, which benefit from extremely high margins.
He said:
Somebody has got to take Nvidia down.
Comma.ai’s CEO believes that Tesla could be the one to compete with Nvidia:
They should sell that chip (Dojo) and even their accelerator (HW 3.0 computer) that is in all the cars. Sell it. Why not? If you sell the chip, here’s what you get: you make money off the chip. It doesn’t take anything away from your chip and the world is going to build an ecosystem of tooling for you.
While Hotz might not be able to buy a Tesla chip anytime soon, Elon Musk did say that Tesla plans to offer machine-learning training as a web service with its new “Dojo” supercomputer.
Would he trust Tesla more than Google with a cloud-based training service?

>>> US Gapping down

Gapping down
In reaction to earnings/guidance:

  • SUM -10.5%, SIX -9.5%, EAT -5.1%, CHRW -5%, TWOU -4.9%, AKAM -4.5%, ANTM -4.1%, CHEF -3.7%, ZYXI -3.2%, YNDX -2.9%, FCAU -2.9%, HES -2.3%, UNM -2.2%, MSFT -2%, HA -1.8%, FTV -1.5%, TMHC -1.5%, DENN -1.4%, TW -1.3%, IART -1.2%, MXIM -1.1%, LSCC -0.8%, CME -0.8%

Other news:

  • BBBY -8.8% (presenting at investor day)
  • ELY -4% (to combine with Topgolf; also guides for Q3)
  • CCL -3.8% (Princess Cruises extends pause in Australian ops thru May 2021)
  • CZR -3.7% (CZR to sell Tropicana Evansville to GLPI and TRWH for $480 mln)
  • EQT -2.5% (EQT to acquire Appalachia assets from CVX for $735 mln; also prices offering of 20 mln shares of common stock at $15.50 per share)
  • CVX -2.2% (EQT to acquire Appalachia assets from CVX for $735 mln)
  • EXAS -1.6% (issues statement regarding draft colorectal cancer screening guidelines)

Analyst comments:

  • VNE -6.8% (downgraded to Underperform from Neutral at Credit Suisse)
  • FANG -4% (downgraded to Equal Weight from Overweight at Barclays)
  • FRO -3.5% (downgraded to Underperform from In-line at Evercore ISI)
  • SAP -3.3% (removed from Goldman's Conviction Buy List)
  • LVGO -2.4% (downgraded to Neutral from Overweight at Piper Sandler)
  • FBK -2.3% (downgraded to Underweight from Neutral at JP Morgan)
  • EXAS -1.6% (downgraded to Neutral from Buy at Citigroup)
  • DTE -1.5% (downgraded to Market Perform from Outperform at BMO Capital Markets)

>>> US Gapping up

Gapping up
In reaction to earnings/guidance:

  • FSLR +12%, CYH +11.6% (also names new CEO), APAM +10%, TUP +7.9%, JBT +7.4%, SKY +7%, BG +6.3%, CSV +5.1%, FVRR +5%, HZO +4.9%, SEE +4.8%, GE +4.4%, HIW +4.3%, SNE +4.2%, RRR +4.1%, BDC +4%, JNPR +3.9% (also says it will remain opportunistic with share buybacks), MKSI +3.8%, TEX +3.6%, ADP +3.6%, OI +3.5%, DB +3.5%, DBD +3.4%, CLS +3.3%, FEYE +3.1%, RES +3%, FISV +2.8%, ENVA +2.8%, EXTR +2.8%, AFL +2.7%, GRMN +2.4%, GLPI +2.2% (also announces exchange agreements with CZR and TRWH), FLOW +2%, SWI +1.9%, OKE +1.8%, TENB +1.8%, ROL +1.5%, ENPH +1.4%, MSTR +1.4%, ESI +1.4%, NYCB +1.4%, OC +1.3%, BX +1.2%, WYND +1.1%, BA +1%

Other news:

  • SRRK +11.9% (stock offering; intends to use funds to advance SRK-015)
  • ARAY +3.3% (announces collaboration with Brainlab to expand CyberKnife treatment platform for the neuro-radiosurgery market)

Analyst comments:

  • AMD +0.5% (upgraded to Overweight from Equal Weight at Barclays)

>>> Boeing beats by $0.55, beats on revs; --> +1.2% Pre-Mkt

Boeing beats by $0.55, beats on revs; co expects to continue lowering staffing levels due to pandemic
  • Reports Q3 (Sep) core loss of $(1.39) per share, excluding non-recurring items, $0.55 better than the S&P Capital IQ Consensus of ($1.94); revenues fell 29.2% year/year to $14.14 bln vs the $13.96 bln S&P Capital IQ Consensus.
    • Co says the pandemic continued to add pressure to its business this quarter, and co is aligning to this new reality by closely managing liquidity and transforming its enterprise.
    • 737 MAX: Following the lead of global regulators, Boeing made steady progress toward the safe return to service of the 737 MAX, including rigorous certification and validation flights conducted by the FAA, Transport Canada and the European Union Aviation Safety Agency. The 737 MAX has now completed around 1,400 test and check flights and more than 3,000 flight hours as it progresses through the robust and comprehensive certification process.
    • Boeing expects to continue lowering overall staffing levels through natural attrition as well as voluntary and involuntary workforce reductions, and recorded additional severance costs in Q3.
Segment Overview:
  • Commercial Airplanes revenue fell 56% yr/yr to $3.60 bln, reflecting lower delivery volume primarily due to COVID-19 impacts as well as 787 quality issues and associated rework.
    • Commercial Airplanes added the final 777X flight test airplane to the test program and the GE9X engine received FAA certification.
    • In October, the company decided it will consolidate 787 production in South Carolina in mid-2021, which did not have a significant financial impact on the program in Q3.
    • Commercial Airplanes delivered 28 airplanes during the quarter, and backlog included over 4,300 airplanes valued at $313 bln.
  • Defense, Space & Security revenue decreased 2% yr/yr to $6.85 bln, primarily due to derivative aircraft award timing, partially offset by higher fighter volume.
    • Co received an award for eight F-15EX advanced fighter aircraft for the U.S. Air Force and a contract extension for the International Space Station for NASA, as well as contracts for nine additional MH-47G Block II Chinook helicopters for the U.S. Army Special Operations and four additional 702X satellites.
    • Backlog was $62 bln, of which 30% represents orders from customers outside the US.
  • Global Services revenue decreased 21% yr/yr to $3.69 bln, driven by lower commercial services volume due to COVID-19, partially offset by higher government services volume.