REcode : Apple is basically blaming Trump’s trade war for disappointing iPhone s


Recode : Apple is basically blaming Trump’s trade war for disappointing iPhone sales in China
But that’s not the only reason people are buying fewer iPhones.

Apple stock trading was halted on Wednesday when the company dropped its revenue expectations nearly 8 percent to $84 billion from its average guidance in November. Apple had previously said it expected $89 billion to $93 billion in sales for the holiday quarter, which ended December 29.

The company blamed “emerging market challenges” and lackluster iPhone sales. In both instances, China was a driving force behind the lower-than-expected numbers, the company said.

“We believe the economic environment in China has been further impacted by rising trade tensions with the United States,” Tim Cook wrote in a letter to investors, in a not-so-thinly-veiled stab at President Donald Trump’s trade battle with the world’s most populous country.

“While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China,” he added. “In fact, most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad.”

China’s economy has been experiencing a slowdown, in part because of Trump’s trade war.

Apple is also dealing with the fact that phone upgrade cycles are getting longer so people aren’t buying new phones as often. New generations of iPhones are so expensive that consumers are more likely to stick with their current phones, even if it means simply replacing a battery by “taking advantage of significantly reduced pricing for iPhone battery replacements.”

So while it may be true that Trump’s China policies are in fact doing damage to that country’s economy — and to Apple — Apple also needs a new blockbuster business if current iPhone purchasing trends continue.

CNBC : Another hedge fund all star struggled last year with Dan Loeb down 11%

Another hedge fund all star struggled last year with Dan Loeb down 11%
  • Third Point lost about 6 percent in December alone, bringing the yearly loss to about 11 percent.
  • Billionaire manager David Einhorn also had a tough year, with his main hedge fund losing 34 percent in 2018.
Activist hedge fund manager Dan Loeb is another all star that struggled big time in 2018.
His firm Third Point lost about 6 percent in December alone, bringing its yearly loss to about 11 percent, according to figures obtained by CNBC's Leslie Picker.
Loeb is not alone in losing big money last year. Billionaire manager David Einhorn had a tougher year, with his main hedge fund losing 34 percent in 2018, the worst performance since Einhorn started the firm in 1996. The stock market, stirred by the trade conflicts and worries on a slowing economy, ended 2018 with the S&P 500 down 6 percent.

Prior to 2018, Loeb had nearly doubled the S&P 500′s return for more than two decades. His main hedge fund returned 18.1 percent in 2017, while many of his peers significantly underperformed the market. The fund gained 6.1 percent in 2017.
Third Point has a roughly 7 percent stake in Campbell Soup, which Loeb has been lobbying to add five directors to Campbell's board.

>>>US Close Dow -2.83% S&P -2.48% Nasdaq -3.04% Russell -1.84% VIX +8.79%(25.26)

Closing Market Summary: Stocks Fall on Apple Warning, Weak Manufacturing Data

The S&P 500 dropped 2.5%, as a revenue warning from Apple (AAPL 142.19, -15.73, -10.0%) and weak manufacturing data stoked worries about a slowdown in global economic growth. The Dow Jones Industrial Average lost 2.8%, the Nasdaq Composite lost 3.0%, and the Russell 2000 lost 1.8%.

Nine of the 11 S&P 500 sectors finished in the red. The heavily-weighted information technology sector led the retreat with a loss of 5.1%, as Apple dragged on the group with a steep loss of 10.0%, which sent the stock to a level not seen since mid-2017. The industrials (-3.0%) and materials (-2.8%) sectors also underperformed the broader market. 

Apple rattled the market when it lowered its revenue guidance for the first time since 2002. CEO Tim Cook attributed the lower outlook to weaker demand in China, where the economy has been decelerating notably.

Selling accelerated after the ISM Manufacturing Index for December (Briefing.com consensus 57.8) came in below consensus at 54.1, falling from 59.3 in November.

While growth concerns are not new, today's setbacks exacerbated fears that economic growth might be slowing more quickly than anticipated, which would present a headwind to corporate earnings.

Delta Air Lines (DAL 45.61, -4.48), for its part, fell 8.9% after its pre-announced fourth quarter results included softer than expected unit revenue. 

Fears over growth and corporate earnings had investors flocking to risk-free U.S. Treasuries. Consequently, the 2-yr yield and 10-yr yield fell 11 basis points each, to 2.38% and 2.55%, respectively. The rally in Treasuries took place amid building expectations for a rate cut by the end of the year. The fed funds futures market now sees a 46.1% implied likelihood of a rate cut in December, up sharply from yesterday's implied probability of just 9.6%. The U.S. Dollar Index lost 0.6% to 96.23.

The drop in interest rates did benefit some companies within the S&P 500. Namely those within the utilities (+0.1%) and real estate (+0.5%) spaces.

Reviewing Thursday's economic data, which included the ISM Manufacturing Index for December; the ADP Employment Change report for December; the weekly MBA Mortgage Applications Index; and the weekly Initial and Continuing Claims report:

  • The ISM Manufacturing Index for December decreased to 54.1% (consensus 57.8%) from 59.3% in November.
    • The key takeaway from the report is that the December decrease was fueled by a sharp pullback in the New Orders component, which is the same element that lifted the November ISM Manufacturing Index into the neighborhood of its high from 2018.
    • According to the ISM, the past relationship between the PMI and overall economy indicates the December reading corresponds to a 3.4% increase in real GDP on an annualized basis.
  • The ADP National Employment Report showed an increase of 271,000 in December (consensus 170,000), and the November reading was revised to 157,000 (from 179,000).
  • The weekly MBA Mortgage Applications Index decreased 8.5%, which is lower than the decrease of 5.8% from two weeks ago.
  • Initial claims for the week ending December 29 increased by 10,000 to 231,000 (consensus 220,000) from last week's revised reading of 221,000 (from 216,000). Continuing claims for the week ending December 22 increased by 32,000 to 1.740 million from last week's revised reading of 1.708 million (from 1.701 million).
    • The key takeaway from the report is that claims continue hovering within a sideways range that has been maintained since mid-2018.

Looking ahead, investors will receive the Employment Situation Report for December on Friday.

  • Russell 2000 -1.3% YTD
  • S&P 500 -2.4% YTD
  • Nasdaq Composite -2.6% YTD
  • Dow Jones Industrial Average -2.8% YTD

>>> US Notable movers of interest

Notable movers of interest -- Bristol-Myers' (BMY) acquisition of Celgene (CELG) makes waves in the healthcare sector
The following are some of today's most notable movers of interest, categorized by market capitalization (large cap over $10 billion and mid cap between $2-10 billion) and ranked by % change (all stocks over 100K average daily volume).
Large Cap Gainers
  • CELG (81.91 +22.91%): To be acquired by Bristol-Myers Squibb (BMY) for approx. $74 bln; the cash and stock consideration to be received by co's shareholders is valued at $102.43/share, a premium of approx. +51% to shares' 30-day volume-weighted average; each share will receive one tradeable CVR; co's shareholders are expected to own approx. 31% of the company post-acquisition; co's shares had hit a multi-year low in late December.
  • INCY (68.36 +7.55%): Upgraded to Buy from Neutral at Guggenheim; appointed Christiana Stamoulis, a 20-year veteran of the biotechnology industry and former CFO of Unum Therapeutics (UMRX), as EVP and CFO, effective February 11, replacing David Gryska upon his planned retirement.
  • TEVA (16.52 +4.23%): Resolved ongoing dispute with Amgen (AMGN) over co's generic cinacalcet HCI product; co has agreed to stop selling its generic until at latest its license date in mid-2021 and to pay Amgen an undisclosed sum; upgraded to Buy from Underperform at BofA/Merrill Lynch, which eyes upside potential from pipeline catalysts.
Large Cap Losers
  • BMY (44.78 -13.93%): Acquiring biopharmaceutical peer Celgene (CELG) in a cash and stock transaction that has an equity value of approx. $74 bln, amounting to approx. a +54% premium to Celgene shareholders based on the closing price of Celgene shares yesterday; co notes that the among the portfolio of the combined companies will be nine products representing diverse core areas of medical need with more than $1 bln in annual sales and "significant potential for growth" and sees near-term launch opportunities that represent more than $15 bln in potential revenue, with six expected near-term product launches; expects to realize run-rate cost synergies of approx. $2.5 bln by 2022; combination is expected to be more than +40% accretive to EPS in the first full year following the transaction's close; expects to execute an accelerated share repurchase program of up to approx. $5 bln.
  • STM (12.08 -12.08%): Semiconductor stocks pressured, leading the tech sector lower, as Apple (AAPL) suppliers and other chip stocks feel the weight of Apple's lowered first quarter guidance and the fresh visibility it provides on macroeconomic risks, particularly in connection with slowdown in activity in Greater China. (Related: OLED, SWKS, AMD, QRVO...)
  • DAL (45.57 -9.02%): Reported December operating performance and pre-announced Q4 results, raising EPS guidance to $1.25-1.30 from $1.10-1.30; noted total unit revenue excluding refinery sales of +3% vs prior guidance for +3.5% and original guidance of +3-5%; reported that "the pace of improvement in late December was more modest than anticipated"; shares reach lowest level since September 2017.
Mid Cap Gainers
  • SBS (9.68 +7.08%): At highest levels since April as a number of Brazilian stocks, including peer utilities name Centrais Eletricas Brasileiras (EBR), see continued strength.
  • GFI (3.71 +5.7%): Gold stocks trend higher; co's shares reach highest levels since the beginning of August. (Related: EGO, AUY, AU...)
  • SBRA (16.73 +4.08%): REIT names outperform. (Related: MPW, BDN, HCP...)
Mid Cap Losers
  • BGNE (121.32 -10.82%): Co's strategic collaboration with Celgene (CELG) to develop and commercialize co's BGB-A317 (tislelizumab) for patients with solid tumor cancers in the U.S., Europe, Japan, and the rest of the world outside Asia could be impacted by Celgene's merger with Bristol-Myers Squibb (BMY); included among features of the partnership between co and Celgene, as established in July 2017, were co's acquisition of Celgene's commercial operations in China and Celgene's purchase of an equity stake in co, among various licensing rights and related fees.
  • BILI (12.92 -9.56%): Moves lower alongside a number of Chinese tech/Internet peers. (Related: WUBA, GDS, WB, BIDU, TME...)
  • XLRN (40.1 -9.05%): Rival oncology names move generally lower upon Bristol-Myers Squibb's (BMY) blockbuster acquisition of Celgene (CELG), which shifts acquisition and pipeline opportunities for other companies in the space. (Related: NKTR, CLVS...)

>>> Moody's reviewing Bristol Myers for downgrade after Celgene acquisition - Mo

Moody's reviewing Bristol Myers for downgrade after Celgene acquisition
- Moody's Investors Service ("Moody's") placed the ratings of Bristol-Myers Squibb Company ("Bristol") under review for downgrade, including the A2 senior unsecured long-term rating and the Prime-1 commercial paper rating.

This rating action follows the announcement that Bristol will acquire Celgene Corporation ("Celgene") in a transaction valued at approximately $74 billion plus debt and contingent value rights.

The acquisition is subject to regulatory reviews and shareholder approvals and is expected to close in the third quarter of 2019.

>>> FDIC chair says no concerns about U.S. bank health amid market turmoil

Reuters

FDIC chair says no concerns about U.S. bank health amid market turmoil

WASHINGTON, Jan 3 (Reuters) - A top U.S. bank regulator said on Thursday she had no concerns that volatility in the equities and futures markets posed a threat to the banking system, telling Reuters the country's lenders have plenty of capital to weather further market swings.

Federal Deposit Insurance Corporation (FDIC) Chairman Jelena McWilliams also told Reuters that banking regulators had begun a review of the so-called CAMELS rating system used to assess the health of the nation's banks.

"Frankly, recent market movements have not given us any reason to be concerned," she said in an interview. "Banks are well capitalized. Actually, they are superbly well capitalized at this point in time.

"Nothing that happened in December gave us concern."

U.S. stocks posted a loss in 2018 for the first time in a decade, amid fears over a weakening global economy and a trade war between the United States and China, sparking fears the turmoil could spread to other parts of the financial system.

Those jitters have continued into the new year, with stocks falling roughly 2 percent on Thursday following weak manufacturing data and a surprise revenue warning from Apple Inc..

McWilliams' comments mark the latest vote of confidence from bank regulators after the Office of the Comptroller of the Currency said on Wednesday banks are well positioned to navigate a market downturn.

McWilliams, who took office in June and was appointed by President Donald Trump to review post-crisis rules, has said some new rules can be tailored to help small banks.

On Thursday, she told Reuters regulators have begun a review of the system used to rate the financial health of banks.

She said the Federal Financial Institutions Examination Council, an interagency group comprising the country's bank regulators, was reviewing whether agencies are applying the CAMELS rating consistently.

McWilliams said she was worried that any differences could encourage banks to seek out less rigorous regulators.

"You don't want to have any sort of forum shopping," she said. "You want to ensure the banks know that they're going to get the same shot" regardless of the regulator.

Regulators use CAMELS ratings as a measure of capital adequacy, asset quality, management capability, earnings, liquidity and risk sensitivity. The ratings are of critical important to bank management, as poor scores can lead to additional regulatory restrictions. But industry groups have complained the confidential scoring system can be opaque and is in need of an update.

If the interagency group finds inconsistencies in how ratings are applied, the regulators could seek public input on overhauling the process, McWilliams added.

>>> Celgene/Bristol-Myers Squibb: Deal has been contemplated for 'quite some tim

Celgene/Bristol-Myers Squibb: Deal has been contemplated for 'quite some time' - exec
03 JAN 2019
New York-based Bristol-Myers Squibb [NYSE:BMY], which is buying fellow cancer drug-maker Celgene [NASDAQ:CELG], had been “discussing” the potential for the transaction for “quite some time,” said the acquirer’s CEO Giovanni Caforio on today’s (3 January) conference call.
When an analyst posed a question about potential rival bidders, a Celgene executive remarked that the transaction with Briston-Myers was the best alternative for Celgene shareholders as it allows them to participate in the combined company’s future growth.
The companies announced the cash-and-stock transaction valued at about USD 74bn earlier today. Celgene shareholders will receive 1 Bristol-Myers Squibb share and USD 50 in cash for each Celgene share they hold. Bristol-Myers Squibb shareholders would own around 69% of the combined company, with Celgene shareholders owning the remaining 31%.
The deal stipulates a break-up fee as is customary in transactions of this size and nature, an executive said on the call, answering an analyst’s query. There was no collar, with the fee being a straight one-to-one exchange, an executive said in response to another question.
Celgene shareholders will also receive one trade-able Contingent Value Right (CVR) for each Celgene share they hold. The CVR will entitle the holder to a payment based on the achievement of future regulatory milestones.
Speaking on the conference call with analysts, Bristol-Myers’ Caforio also said there were no major overlaps between the two companies.
The deal is subject to regulatory approvals from the US and EC, besides other unidentified jurisdictions.