Fed Chair Powell: US Economy can operate at lower rate of unemployment than thought - Testimony before joint economic committee
- Does not know where maximum employment level is
- Needs to approach policy with humility, lot to like about today's labor market, and would like to see it continue
- We might have expected wages to move up more this late in expansion, one possibility is slack in the labor market
Gapping down
In reaction to earnings/guidance:
- CSIQ -10.9%, SSYS -8.8%, CPRX -8.1%, CMCM -7.9%, SDC -7.6%, TSEM -7.6%, HALO -7.5%, MTOR -6.1%, HTHT -5.4%, SWKS -5.2%, SSTI -4.7%, TLRY -3.6%, VIPS -3.1%, SCSC -2.1%, BEST -1.4%, VREX -1.2%
Other news:
- BCRX -8.9% (announces public offering of $55 mln of its common stock)
- HALO -7.5% (proposes offering of $400 mln aggregate principal amount of convertible senior notes due 2024)
- NXTC -6.4% (files for 3.2 mln share common stock offering)
- SE -4.6% (announces proposed offering of US$1 bln in aggregate principal amount of convertible senior notes due 2024)
- REPL -4.3% (proposes public offering of up to 5,000,000 shares of its common stock)
- SWAV -3.9% (announces public offering of $75.0 mln of shares of its common stock)
- RNG -2.4% (files for Class A Common Stock shelf offering; discloses issuance of 2,170,785 shares of its Class A common stock to Avaya (AVYA) in connection with strategic partnership)
- CDAY -2.2% (affiliates of Thomas H. Lee Partners and Cannae Holdings intend to offer 5 mln shares each of the Company's common stock)
- ET -2% (continued weakness after reports of pipeline approval investigation)
Analyst comments:
- DPLO -4.8% (downgraded to Equal Weight from Overweight at Barclays)
- I -3.4% (downgraded to Neutral from Overweight at JP Morgan)
- AA -2.7% (downgraded to Underperform from Neutral at BofA/Merrill)
- MOS -2.4% (downgraded to Underweight from Neutral at JP Morgan)
- QRVO -2.1% (downgraded to Hold from Buy at Canaccord Genuity)
- LB -1.7% (initiated with an Underweight at Barclays)
- NTGN -1.6% (downgraded to Neutral from Buy at BofA/Merrill)
- AAL -1.3% (initiated with a Sell at UBS)
- GPS -0.9% (initiated with an Underweight at Barclays)
Gapping up
In reaction to earnings/guidance:
- CDLX +22.6%, TWOU +13.7%, DDOG +12.8%, FVRR +9%, GOOS +6.8%, ADT +5.8%, ADPT +5.6%, YY +4.4%, HUYA +4.2%, ENR +3.6%, VRAY +3.2%, OMER +2.9%, MTSI +2.9%, RUN +2.5%, LK +2.2%, HCAT +1.5%, HIIQ +1.4%, SPB +1.4%, KWR +0.8%, MUFG +0.7%
M&A news:
- TECD +3.7% (enters definitive agreement to be acquired by funds managed by affiliates of Apollo Global Management (APO) for $130/share)
- CBPX +1.5% (to be acquired by Saint-Gobain for $37.00 per share)
Other news:
- IO +4.3% (awarded "large" two-year ocean bottom nodal data processing and imaging contract by ARGAS)
- ACRX +2.2% (announces a publication analyzing pooled dosing and efficacy data from use of the sufentanil sublingual tablet (SST) 30 mcg among multiple demographic subgroups)
- AMRN +2.1% (continued strength)
- REAL +1.2% (issues statement to "[set] the record straight on its authentication process")
Analyst comments:
- INFN +0.9% (upgraded to Neutral from Underweight at JP Morgan)
Early premarket gappers
- Gapping up:
- CDLX +25%, TWOU +14.8%, DDOG +13.7%, GOOS +9.5%, ADPT +6.3%, ADT +5.8%, TECD +4.4%, IO +4.3%, LK +3.3%, VRAY +3.2%, HUYA +3.1%, YY +3%, OMER +2.9%, MTSI +2.9%, CBPX +1.7%, HCAT +1.5%, HIIQ +1.4%, RUN +1.3%, REAL +1.2%, AMRN +1.1%, GSK +0.8%, KWR +0.8%, MUFG +0.7%, USB +0.5%, SPB +0.5%
- Gapping down:
- CPRX -11.4%, BCRX -8.9%, TSEM -8.5%, HALO -7.6%, HALO -7.6%, SWKS -6.4%, CSIQ -5.8%, SDC -4.8%, SSTI -4.7%, REPL -4.3%, SE -4.2%, HTHT -4.1%, TLRY -4%, SWAV -3.9%, I -3.3%, SCSC -2.1%, RNG -1.9%, MTOR -1.9%, ET -1.3%, VREX -1.2%, NXTC -1.1%, BEST -0.7%, VIPS -0.6%, AAL -0.5%
Toshiba launches tender offers for three listed subsidiaries
Lossmaking Japanese conglomerate seeks to improve governance amid activist pressure
Toshiba has launched offers to buy out three of its listed subsidiaries as the lossmaking Japanese conglomerate seeks a definitive break from a 2016 crisis that brought it to the edge of collapse.
The company, which has shed 53 of its 350 subsidiaries in a crash diet of divestments over the past six months, said it would spend ¥200bn ($1.83bn) to take full ownership of the companies in which it holds significant stakes.
Nobuaki Kurumatani, the former banker appointed group chief executive in the wake of the company’s problems, linked the deals to governance, an area in which Toshiba faced severe criticism as it lurched from an accounting fraud scandal to the collapse of its nuclear business in the US and its demotion to the second tier of the Tokyo Stock Exchange.
“The issue of listed subsidiaries is a huge issue for corporate Japan’s governance problem,” he said on Wednesday.
Toshiba launched its tender offers for Toshiba Plant Systems & Services, NuFlare Technology and Nishishiba Electric with hefty premiums of 42, 50 and 60 per cent respectively on the averages of their share prices over the past three months.
Analysts said the generous-looking offers were probably an effort to avoid confrontation with increasingly vocal activist investors camped out on the shareholder registers of the three companies expecting an offer before the end of the year.
The move follows months of mounting pressure from Toshiba shareholders — whose ranks were suddenly joined by activist funds after the company rescued its balance sheet with an emergency issuance of $6bn of new shares in 2017.
“We are very happy with what they are doing. I think the independent directors are really doing their job,” said one Toshiba shareholder who has held the stock through the company’s crisis, referring to its new board where 10 out of 12 directors are independent.
An additional factor in the pressure on Toshiba has been the progress of its close rival Hitachi, another Japanese conglomerate that grew to a wildly ungovernable size and came close to collapse. Hitachi’s decade-long process of thinning itself down through sales or buyouts of listed subsidiaries is widely viewed as a model of how radically some Japanese companies need to pare themselves back to become competitive and profitable.
The most controversial element of Toshiba’s efforts to pull itself back from the brink during its crisis was the $18bn sale of its crown jewel memory chip business to a consortium led by Bain Capital.
Mr Kurumatani was grilled at Toshiba’s earnings presentation on Wednesday on whether it was really worth spending $2bn for three subsidiaries with only moderate growth potential.
He said the move improve would boost earnings per share by 21 per cent in the next financial year.
The acquisitions will also give Toshiba access to combined net cash of ¥150bn, money activists hope the Japanese group would use to launch a new buyback programme to follow its recently completed record ¥700bn scheme.
A year after Mr Kurumatani laid out the conglomerate’s new growth strategy, Toshiba continued to suffer, with a net loss of ¥5.5bn in the three months to the end of September because of a downturn in the memory chip business in which it still owns a stake.
But on an operating level the company reported a seven-fold increase in profits from a year earlier after it sold off many of its struggling divisions, including its overseas nuclear businesses and its US liquefied natural gas unit.
“We’re basically done with getting rid of our negative legacy,” Mr Kurumatani said. “I’m starting to feel confident about a V-shaped recovery.”
>>> Up
* ArcelorMittal ADRs Raised to Overweight at KeyBanc; PT $21
* Dialog Semi Raised to Buy at AlphaValue
* Hugo Boss Raised to Buy at Hauck & Aufhaeuser; PT 55 euros (+)
* Infineon Raised to Buy at Bankhaus Metzler; PT 23 euros
* Intertek Raised to Neutral at Goldman; PT 5,200 pence
* Norma Raised to Buy at Berenberg
* Petrofac Raised to Buy at Canaccord; PT 500 pence (+)
* Prosegur Raised to Buy at Goldman; PT 5.80 euros
>>> Down
* Aareal Bank Cut to Sell at Citi; PT 25 euros
* Ahold Delhaize Cut to Market Perform at Bernstein
* Amerisur Cut to Underperform at RBC; PT 17 pence
* Aperam Cut to Neutral at Citi; PT 28 euros
* Bankia Cut to Underweight at JB Capital Markets; PT 1.65 euros (+)
* BayWa Cut to Neutral at Oddo BHF; PT 26 euros (+)
* Cofinimmo Cut to Sell at SocGen; PT 118 euros
* Cramo Cut to Hold at SEB Equities; PT 13.50 euros
* Gjensidige Cut to Sell at Goldman; PT 145 kroner
* *INTELSAT CUT AT JPMORGAN AS C-BAND PROCESS LOOKS MORE COMPLEX
* Intesa Sanpaolo Cut to Reduce at Oddo BHF; PT 2.30 euros
* Kiadis Pharma Cut to Sell at NIBC; PT 1 euro
* Kiadis Pharma Cut to Neutral at Piper Jaffray; PT 2 euros
* Land Sec. Cut to Underperform at Jefferies; PT 735 pence
* Norway Royal Salmon Cut to Hold at DNB Markets; PT 230 kroner
* Paragon Cut to Hold at Canaccord; PT 519 pence (+)
>>> Initiation
* Cineworld Rated New Underweight at Morgan Stanley; PT 200 pence
* Corticeira Amorim Rated New Outperform at BBVA; PT 12.20 euros
* Hikma Reinstated Equal-Weight at Morgan Stanley; PT 1,900 pence
* Mowi Rated New Buy at Berenberg
* Sartorius Rated New Overweight at JPMorgan; PT 180 euros
* Sartorius Stedim Rated New Overweight at JPMorgan; PT 152 euros
* VERALLIA INITIATED WITH BUY RATING AT CITI, PRICE TARGET EU33
* *VERALLIA INITIATED WITH OVERWEIGHT, PT EU31.5 AT BARCLAYS (+)
>>> Call
* Aareal’s Trend Diverging From Peer, Downgrade to Sell: Citi
* Aperam Upside Is Now Limited After Rally, Citi Cuts to Neutral
* Land Securities Hit by Retail Weakness, Jefferies Cuts Rating
* Mowi New Buy; Salmon Sector Has ‘Golden Years’ Ahead: Berenberg
* Norma Becoming a Self-Help Story, Berenberg Says, Raising to Buy
* Sell Cineworld Amid Weak 2020 Film Slate, Streaming Threat: MS
What lies behind a Leonardo masterpiece?
‘The Virgin of the Rocks’ is the subject of a new immersive show at London’s National Gallery
One of the skills of the curator is knowing how much explanation, if any, should accompany the objects or artworks placed in front of the viewer. Ask people to plough through too much textual information and you risk losing their attention or straying into academia. Say too little and rudderless visitors can come away feeling uninformed or, worse, short-changed.
A show which dedicates five large gallery rooms to celebrating a single work of art — Leonardo da Vinci’s masterpiece “The Virgin of the Rocks” — was always likely to fall into the first trap. But in fact, it leaves itself far more vulnerable to the latter criticism.
This stunning painting, one of the best known works in the National Gallery collection, has been given a three-month exhibition — or “immersive experience” in the gallery’s on-trend phrase — to mark the 500th anniversary of Leonardo’s death.
Commissioned in 1483 to adorn a chapel in the church of San Francesco Grande in Milan, the large-scale painting was acknowledged on its completion as a triumph, a revolutionary work that brought together many of the Italian master’s advances and preoccupations in science, technique and artistry over the 25 years he took to paint it (in two versions, the other of which is in the Louvre).
It shows the Virgin Mary, draped in lustrous blue cloth with her face radiant under a single overhead source of light. Beside her are the infant St John the Baptist, a kneeling angel and Christ as a plump and healthy baby. Set in a verdant, primordial scene, with rocky outcrops fading into the distance (Leonardo counted geology among his interests) and flowers tumbling over assorted greenery, this graceful quartet communicate a sense of harmony to one another as well as to the viewer.
Acquired by the National Gallery in 1880, the painting is now deemed too fragile to be loaned. And so, with the Louvre and the Royal Collection staging blockbuster Leonardo exhibitions that were years in the planning, the National Gallery opted for the radical approach of focusing on this single work and marshalling interactive and visual aids as well as lighting and sound techniques to explore it. As partners in its departure from gallery tradition, the curators brought in the theatrical company 59 Productions, with a CV that includes the National Theatre’s War Horse and a record-breaking David Bowie show at the Victoria & Albert Museum.
One room — the most successful of the show — presents an artist’s studio cum conservation laboratory filled with paraphernalia such as easels, paints and crusty palettes alongside modern scientific equipment. The centre of attention is a large easel on which an animated projection looping over several minutes shows how Leonardo built his painting up layer by layer to achieve his innovative effects. A voiceover by two of the gallery’s conservators explores the high-tech analysis that revealed the secrets hidden beneath the surface.
Like many artists, Leonardo sometimes altered his compositions in the course of a commission, either for aesthetic reasons or after discussions with those paying the bill. In 2005, an entirely different composition was discovered lying beneath “The Virgin of the Rocks”, and this year scientists using the latest macro X-ray fluorescence (XRF) technology revealed the zinc pencil lines of an earlier design for the angel and baby Christ. Analysis of the paint layers also showed how the artist had pared back the shoulder of the Virgin’s cape, painting background brown over the blue folds of the cape.
Leonardo’s intense interest in the science of optics is the subject of another room. Included in the glorious eclecticism of his notebooks are experiments and diagrams on how the position and intensity of light created different effects; the anatomy and function of the eye; and the use of perspective and colour tones to create the impression of depth. In this room, viewers can use levers and dials to alter the position of light on objects, including a model posed in the manner of the Virgin.
As fun as this is, the lack of any explanatory text — bar a couple of terse sentences at the room’s entrance — leaves viewers helpless to understand the connections between the exhibits and Leonardo’s scientific thinking or the painting that awaits them at the culmination of the show. A spotlight swings like a pendulum against a perfectly black wall, each pass of the beam illuminating a different “object” hanging from the surface. Why is it here? What does it have to do with Leonardo? Since no explanation is offered, we can only guess.
In the final room, the show’s denouement finds Leonardo’s work surrounded by an imagined version of the highly decorated and sculpted altarpiece that would originally have housed it in the chapel at San Francesco Grande. Little is known about what this looked like, so the curators used other work by the sculptor Giacomo del Maino to come up with a well-researched guess, projected as a digital animation around Leonardo’s painting. It is a clever idea, but it comes with the downside that the viewer’s attention is constantly switching between the ever-changing imagery of the altarpiece and quiet contemplation of what was surely intended as the star of the show — the painting itself.
The flaws in a show that contains some bold ideas are frustrating. The communications gap is particularly tantalising, not least because the gallery has already done the work of explaining the painting’s meaning and significance in admirably clear prose on an accompanying website. For an institution sometimes accused of conservatism, the gallery’s willingness to experiment with new ways of engaging people should be applauded. But visitors should not be surprised to find their thirst for knowledge unquenched.