TheChek News Flow

FT : France and Germany prepare for no deal as May arrives in Brussels

France and Germany prepare for no deal as May arrives in Brussels

EU strikes conciliatory tone amid concern over chaotic UK exit from the bloc

Theresa May arrived in Brussels for a European summit insisting that the deadlock in Brexit talks could be broken — even as Germany and France ramped up preparations for a chaotic “no-deal” exit.

The British prime minister’s decision to put Brexit negotiations on hold last weekend because of the split in her own cabinet overshadowed the start of the European Council, but the mood among the rest of the EU was conciliatory.

Ahead of the summit, Mrs May’s spokesman insisted that the two sides were “moving close to one another” — highlighting progress made before the talks broke down.

Michel Barnier, chief EU negotiator, said: “We need time, we need much more time, and we will continue to work in the next weeks calmly and patiently.”

The prime minister addressed the EU27 leaders for 15 minutes and gave “a positive assessment of the progress made and the two sides being close to a deal”, according to an official briefed on the discussions. Ms May also said the UK was “open to considering” an extended transition period, said the official.

Antonio Tajani, president of the European Parliament, said Ms May had brought “nothing new in content” but there was a willingness to keep negotiating with the UK and welcome “body language”.

“The content is not yet acceptable but the tone is someone who wants to continue with negotiations and not let them breakdown,” said Mr Tajani.

But while EU leaders insisted that talks in coming weeks could settle the dispute over a “backstop” to prevent a hard border in the island of Ireland — the biggest outstanding issue — they are stepping up preparations for a disorderly Brexit.

France published a draft bill to handle a no-deal exit in March 2019 that empowered the government to use emergency decrees to reimpose customs checks and impose visa requirements on British citizens visiting France.

German Chancellor Angela Merkel told the Bundestag that Germany was “preparing for every scenario”, including additional burdens on customs authorities and the private sector.

Arriving in Brussels, the EU leaders took pains to avoid confrontational language, fearing a repeat of the acrimonious atmosphere over Brexit at their previous summit in Salzburg last month.

Ms Merkel said: “There is still a chance that we can achieve a good and viable withdrawal treaty on time.”

French president Emmanuel Macron said: “We have made a lot of progress. But now it’s time to find an agreement.”

But Dalia Grybauskaitė, Lithuania’s president, articulated a frustration felt by many EU leaders: “We don’t know what they want,” she said. “They do not know themselves what they really want. That’s a problem.”

There was no prospect of a decisive breakthrough at the Brussels gathering, but EU leaders are expected to pencil in a possible Brexit summit in November to seal a deal, leaving a scheduled European Council in December as the ultimate deadline.

Some leaders noted that there could even be positive aspects to an disorderly UK departure.

Peter Pellegrini, the Slovak prime minister, said: “Slovakia could become attractive for companies currently residing in the UK.”

FT : Caesars Entertainment approached about merger with Golden Nugget

Caesars Entertainment approached about merger with Golden Nugget

Shares in group jump as billionaire Tilman Fertitta makes cash-and-stock offer

Tilman Fertitta, the billionaire owner of the Houston Rockets basketball team, has approached Caesars Entertainment about a possible combination of his Golden Nugget Casinos chain with the Las Vegas owner of Caesars Palace.

Mr Fertitta had approached Caesars in recent days, two people familiar with the situation said, although they cautioned that a deal was not certain to be agreed.

One said Mr Fertitta made a $13 per share cash-and-stock offer but that he did not extend it to Caesars’ former private equity owners, Apollo Global Management and TPG Capital. The firms remain among Caesars’ largest shareholders after its emergence from bankruptcy a year ago and could present a significant hurdle for Mr Fertitta to overcome.

Shares in Caesars were up almost 11 per cent at $10.12 in afternoon trading after Reuters and CNBC first reported the approach, giving it an equity value valuing its equity at $7bn.

The stock remains below its February high of more than $14, however, after Caesars shocked investors this summer by saying that it had seen pressure on room rates in Las Vegas.

Mr Fertitta, who also controls the Landry’s restaurant chain, bought the Houston Rockets last year for $2.2bn, an NBA record. This year he spent $308m on a Louisiana food delivery start-up called Waitr and opened the Post Oak Hotel in Houston.

With a fortune estimated by Forbes at $4.5bn, he hosts a CNBC show called Billion Dollar Buyer, bought his first private plane at 35 and owns a $40m, 164-foot superyacht.

Mr Fertitta’s pursuit of Caesars comes as Mark Frissora, Caesars’ chief executive, has been investing in renovating its hotel rooms, revitalising its loyalty programme and expanding its hospitality business.

Mr Frissora has also voiced hopes for growth in sports betting revenues after the US Supreme Court struck down a federal law that had banned betting on matches in all but a few states.

In a recent CNBC interview, Mr Fertitta said the “world of gambling on sports is going to totally change in the next five years”. Nevertheless, he pointed to pressure in Atlantic City, one of the largest US casino hubs, where, he said, “there is not enough room for this many casinos”.

Analysts have been forecasting consolidation among US casino owners. Penn National Gaming this week completed its $2.8bn purchase of rival Pinnacle Entertainment, and industry observers are expecting more deals.

WSJ : Uber Targets Trucking With New Trailer-Rental Business

Uber Targets Trucking With New Trailer-Rental Business

Company continues to move beyond ride-hailing with an IPO looming

Uber Technologies Inc., in its ongoing quest to move beyond its unprofitable business of connecting drivers with passengers, is adding a new tractor-trailer rental business to help big-rig truckers haul freight around the country.

The San Francisco company is set to announce a new division called Powerloop that will connect small- and medium-sized carriers with fully filled trailers from businesses such as brewer Anheuser-Busch InBev SA BUD 0.95% . Uber has leased hundreds of trailers from an undisclosed company and is renting them to carriers for $25 a day, planning to profit from the difference.

It may sound like a departure from Uber’s business of connecting urbanites with rides around town, but Uber says the technology behind its core app translates well to the shipping industry. Its related Freight division, which alerts truckers with their own empty trailers to waiting cargo loads through smartphones, has been growing, expanding from Texas last year to nationwide.

For Uber, the success of Powerloop and Freight is important to demonstrating the company is more than a one-trick product, particularly as it eyes an IPO that banks are proposing could value the company at as much as $120 billion next year, The Wall Street Journal reported Tuesday.

Uber has found some success with prepared food delivery unit UberEats, which is expected to be profitable before the core ride-hailing business and potentially underwrite losses, according to people familiar with the company’s finances.

The Freight business is unprofitable, according to people familiar with the matter. Chief Executive Dara Khosrowshahi has said as recently as August it is on a pace to achieve $500 million in revenue within the next year.

Regarded by the tech industry as cumbersome and labor-intensive, the trucking business has attracted a number of startups aiming to shake up the industry.

Venture capital and other investors have, according to market research firm Armstrong & Associates, bet $662 million since 2011 on digital-friendly, load-matching startups such as Cargomatic Inc., Flexport Inc. and Jeff Bezos-backed Convoy, which last month gained a $1 billion valuation in a round led by Alphabet Inc.

Uber may be seizing on an opportunity as trucking capacity has been strained amid a fast-growing U.S. economy. Rates for last-minute truck transportation were up nearly one-third over the summer from a year earlier, during what is typically a slow time of year.

Uber said its matchmaking system will spare carriers from waiting around as trailers get loaded with goods and allow shippers to load them at their convenience, rather than waiting for trailers to arrive. For now, Uber will be testing Powerloop in Texas, though the company expects to expand it to other U.S. regions.

Among Uber’s first customers is Anheuser-Busch, the brewer behind Budweiser and Bud Light. On-demand rentable trailers could cut the time carriers spend at a shipping site by 25%, said Ties Soeters, Anheuser-Busch’s vice president of logistics procurement in North America. The brewer has already arranged for about 250 trailers of beverages to be hauled off using Powerloop as part of a trial, he said. About 30% of Anheuser-Busch’s U.S. volume is live-loaded, or done while a big rig truck is waiting, said Mr. Soeters.

Of course, trucking is far from a sure thing as manufacturing could take a turn if the economy’s growth slows. And Uber faces stiff competition from a handful of big, tech savvy players, such as C.H. Robinson Worldwide Inc. and Echo Global Logistics .

Armstrong & Associates President Evan Armstrong said the Powerloop project potentially faces an uphill climb against the biggest players. “Shippers could just as easily contract with the larger trucking companies and negotiate prices" better than Uber can offer, he said.

Ft : Construction of new homes at six-year low in London

Construction of new homes at six-year low in London

Pace of housebuilding slows in UK capital due to uncertainty over Brexit and stamp duty changes

The number of new homes breaking ground in London has dropped to its lowest level in six years as a slump in the luxury apartments market is compounded by Brexit concerns.

Construction of some 3,700 units started in the third quarter of this year, the lowest figure since the same quarter in 2012, according to Molior London, which monitors property developments in the capital.

This brought the total of new homes started in the first three quarters of this year to about 17,000, putting the total for this year on track to be the lowest since 2013.

Planning applications show that this trend will continue, according to Molior. The number of new applications in 2018 is set to be the lowest in four years.

Sales of new-build homes have also dropped to a six-year low, with 4,160 sold during the third quarter, and the annual total is also set to be the lowest since 2012 if the current trend continues.

“To a certain extent much of this should be expected given that the country has recently voted twice for a period of uncertainty — both in the 2016 European Union membership referendum and in the subsequent general election,” Molior said.

The slow sales were not spread evenly across the market, said Molior. Developments in zone 3 and further out, where prices are lower and buyers tend to use the government’s Help to Buy equity loan scheme, are selling relatively well.

Specific, popular developments closer to the centre are also chalking up sales, the group said, such as one within the former BBC Television Centre in west London.

“There are buyers in the market, but they are faced with a lot of choice and will only pay for the best on offer,” Molior said

The decline in the new-build market has been led by central London, where expensive developments planned during a boom in investor purchases are now struggling to sell units.

Changes to stamp duty have deterred some buyers, while a downward trend in prices has cut into the numbers of investors buying homes. However, Molior said that some Chinese buyers were still purchasing London property, despite the market slowdown and restrictions on capital outflows from mainland China.

The decline in construction numbers presents a challenge for London mayor, Sadiq Khan, as he seeks to push up housebuilding in the capital in response to an affordability crisis.

Molior monitors developments across the capital but does not cover those with fewer than 20 units.

(ZH) "They Cut Him Up While He Was Still Alive": Grisly Details Of Saudi Journal

"They Cut Him Up While He Was Still Alive": Grisly Details Of Saudi Journalist Killing Emerge

by Tyler Durden

Wed, 10/17/2018 - 06:26

Twitter Facebook Reddit Email Print

While President Trump would love it if the Western media, along with prominent executives in tech and finance, would buy Saudi Crown Prince Mohammad bin Salman's claims that he had "no knowledge" of the confrontation at the Saudis' consulate in Istanbul that's believed to have precipitated the killing of insider-turned-Washington Post columnist Jamal Khashoggi, yet more evidence has emerged this morning to contradict the official Saudi narrative.

Trial balloons floated by the kingdom in the Western press, as well as Trump's own suggestions, point to "rogue operatives", but in a story published last night, the New York Times managed to corroborate Turkish officials' claims that several suspected members of the 15-man 'hit squad' have been directly linked with MbS.

And now, in what has been billed as the first glimpse of the grisly circumstances of Khashoggi's murder, the Middle East Eye and the Wall Street Journal have reported that "it took seven minutes for Khashoggi to die."

But in what was probably the most gruesome details from the report, MEM reported that Dr. Salah Muhammad al-Tubaigy, who was identified by the Times and other media outlets as an "autopsy expert" whose presence cuts against Saudis' suggestions that the killing wasn't premeditated, started cutting Khashoggi's body into pieces while the journalist was unconscious, but still breathing. Previously, Khashoggi had been knocked unconscious after being injected with a mysterious substance.

MEM attributed its information to a person who had listened to the Turkish government's recording of the murder (its agents had apparently bugged the Saudi consulate, which is unsurprising given the tense relations between the two Muslim powers that only deteriorated during last year's Qatari crisis). That recording, which hasn't been publicly shared, has served as the basis for dozens of media reports about Khashoggi's death. According to this source, after arriving at the consulate, Khashoggi was dragged from the consul-general’s office at the Saudi consulate in Istanbul into his study next door, before being pinned down on the table and injected with an unknown substance. During the attack, horrifying screams were heard by witnesses.

After Khashoggi had been knocked unconscious (never to awaken again), al-Tubaigy put on his headphones and started the grim process of dismembering the body with a bone saw.

Tubaigy began to cut Khashoggi’s body up on a table in the study while he was still alive, the Turkish source said. The killing took seven minutes, the source said.

As he started to dismember the body, Tubaigy put on earphones and listened to music. He advised other members of the squad to do the same.

"When I do this job, I listen to music. You should do [that] too," Tubaigy was recorded as saying, the source told MEE.

A three-minute version of the audio tape has been given to Turkish newspaper Sabah, but they have yet to release it.

A Turkish source told the New York Times that Tubaigy was equipped with a bone saw. He is listed as the president of the Saudi Fellowship of Forensic Pathology and a member of the Saudi Association for Forensic Pathology.

According to WSJ, voices on the tapes can be heard asking the Saudi consul to leave his office before the hit squad murdered Khashoggi. The consul, Mohammad al-Otaibi, departed Turkey for Riyadh Tuesday afternoon after the Saudis, in a sudden reversal, denied Turkey's requests to search Otaibi's residence, saying his home was off limits to investigators.

Should other media organizations confirm these reports (which has become a pattern since Khashoggi disappeared into the consulate on Oct. 2 after being asked to return to pick up a marriage license), calls for sanctions, an arms sales ban - or even the deposing of Crown Prince Mohammad bin Salman could grow louder.

But while MbS remains ensconced in his protective shield of power, those directly involved in the killing have good reason to be afraid. The United Nations human rights chief Michelle Bachelet has called for the lifting of diplomatic immunity for any facilities and persons tied to the killing, which means that, even if Saudi Arabia gives its nominal "rogue operatives" a pass, extradition requests from Turkey or another UN member would greatly increase their chances of arrest.

FT : Veteran investor Terry Smith raises largest new UK investment trust

Veteran investor Terry Smith has set a new record for the most popular UK investment trust launch with an initial public offering of £822m, far exceeding the initial £250m target and dethroning fellow popular UK investor Neil Woodford.

Mr Smith is one of the UK’s best known investors, having built up assets worth £17bn in his Fundsmith Equity fund, launched in 2010, with his mantra of buying “good companies” and trading infrequently. The fund is now one of Europe’s 20 largest actively managed funds and has returned 273 per cent to investors since launch.

The Smithson investment trust was pitched as the ‘son of’ Fundsmith equity and raised £822.5m in its initial public offering on Wednesday.

The company initially sought £250m but after “very significant demand” from investors, raised that to a £600m target with the ability to increase to £900m. Just over 82m shares were issued at a price of £10 per share with trading due to start on Friday.

Analysts said the unprecedented investor interest was particularly striking given investors’ nervousness in the market and investors’ hesitance towards rival investment trust launches in recent months.

Ewan Lovett-Turner, analyst at Numis said: “We had expected to see strong demand for Smithson, but were still surprised by the amount of capital raised.”

Unlike most investment trust launches, Mr Smith’s company Fundsmith bore all of the costs associated with the launch, meaning investors will receive the full value of their investment on the first day of trading. Mr Smith is also personally investing £25m into the new trust.

Smithson will invest in smaller companies compared to Fundsmith Equity, hoping to gain an edge on the market due to the lower analyst coverage of smaller companies and their greater potential for growth over the long term.

The portfolio will consist of between 20 and 40 small and mid-cap global companies and will not be managed by Mr Smith himself but fund managers Simon Barnard and Will Morgan.

Darius McDermott, managing director at broker Chelsea Financial Services said: “The original, open-ended fund, is now huge, so wouldn’t be able to invest in some ideas, even if the managers wanted it too, so this will enable the team to make good use of ideas further down the cap scale.”

The launch is a stark contrast to recent unsuccessful investment company IPOs. In October 2017 the former chief executive of the UK’s asset management trade body was forced to scrap plans for a new investment trust following a lack of demand.

Gavin Haynes, managing director at broker Whitechurch Securities said: “Given the nervousness amongst investors at present, it is testament to how highly regarded Terry Smith has become with retail investor that his Smithson Investment Trust has raised over £800m.”

Fellow renowned investor Neil Woodford previously held the record for most popular investment trust launch, having raised £800m in 2015 for Woodford Patient Capital Trust to invest in high-growth, early-stage companies in sectors like biotech.

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance:

FMS -18.3% (guidance), TACO -6.7% (also issued downside guidance for FY18 EPS and revs), IBM -4.6%, ADTN -3.9%, UFPI -3.2%, NTRS -3.1%, IBKR -2.8%, SBH -2.2% (provided selected preliminary fourth quarter results, seeing same store sales improved to flat in Sally Beauty segment), ABT -2%, HCSG -0.9%

Other news:

EIGR -6.4% (announced 'positive' results from Phase 2 PREVENT study and announced that Phase 2 ULTRA study did not meet primary or secondary endpoints)

TEVA -3.4% (migraine drug to be excluded from Express Scripts' (ESRX) coverage, according to Reuters)

O -1.3% (appointed COO Sumit Roy to position of CEO and reaffirmed 2018 AFFO per share guidance of $3.16-3.21)

BHP -0.9% (reports Q3 copper production increased 2%; lowers FY18 production guidance by 3% amid outages)

ICFI -0.8% (won re-compete contract for USAID valued at over $200 mln)

EVH -0.8% (proposed offering of $125.0 mln aggregate principal amount of convertible senior notes due 2025)

Analyst comments:

SND -11% (downgraded to Underperform from Hold at Jefferies)

HCLP -8.9% (downgraded to Underperform from Hold at Jefferies)

SLCA -4.9% (downgraded to Hold from Buy at Jefferies)

KBH -2.6% (downgraded to Underperform from Neutral at Credit Suisse)

MLM -2.2% (downgraded to Neutral from Buy at BofA/Merrill)

LOW -2% (downgraded to Neutral from Outperform at Credit Suisse)

HD -1.2% (downgraded to Neutral from Outperform at Credit Suisse)

Click here to read the full comment.

Portfolio Ticker Matches: SCANX

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>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance:

VICR +21.8%, WGO +13.4%, NFLX +11% (also guided for Q4; sees subscriber additions above estimates), HOPE +8.6% (bad trade) LRCX +6.8% (also guided Q2 EPS above consensus), UAL +5.9% (also raised low end of EPS guidance for FY18), MTG +4.7%, FULT +2.3%, LTXB +2.2% (also increased quarterly dividend to $0.22/share), CREE +2.1% (also signed agreement valued at $85 mln to supply Wolfspeed silicon carbide wafers), PSO +2.1%, ASML +1.9%, CSX +1.7% (also updated FY18 revenue guidance on call), MTB +1.5%, USB +0.9%

Other news:

ROKU +3.5% (to resume sales of Roku devices in Mexico)

AMAT +3.3% (following upbeat first quarter report from Lam Research)

AGLE +3.1% (announces 'new positive' interim clinical data from ongoing Phase 1/2 trial of pegzilarginase in patients with the rare genetic disease Arginase 1 Deficiency

JBLU +2% (following guidance from United Continental)

LUV +2% (following guidance from United Continental)

Analyst comments:

AZRX +8% (initiated with an Outperform at Oppenheimer)

AAL +4.1% (upgraded to Buy from Hold at Deutsche Bank)

NTAP +3.3% (added to Conviction Buy List at Goldman)

AKRX +3.3% (upgraded to Overweight from Neutral at Piper Jaffray)

DAL +3.2% (upgraded to Buy from Hold at Deutsche Bank)

PSTG +2.1% (upgraded to Neutral from Sell at Goldman)

WDAY +2.1% (upgraded to Outperform from Mkt Perform at Bernstein)

MDB +1.1% (initiated with a Outperform at Oppenheimer)

ANET +1% (upgraded to Outperform from Market Perform at BMO Capital Markets)

WP : Donald Trump may be remembered as the most honest president in modern Ameri

Donald Trump may be remembered as the most honest president in modern American history.

Don’t get me wrong, Trump lies all the time. He said that he “enacted the biggest tax cuts and reforms in American history” (actually they are the eighth largest) and that “our economy is the strongest it’s ever been in the history of our country” (which may one day be true, but not yet). In part, it’s a New York thing — everything is the biggest and the best.

But when it comes to the real barometer of presidential truthfulness — keeping his promises — Trump is a paragon of honesty. For better or worse, since taking office Trump has done exactly what he promised he would.

Trump kept his promise to move the U.S. Embassy in Israel from Tel Aviv to Jerusalem, something his three immediate predecessors also promised yet failed to do. He promised to “crush and destroy ISIS,” and two years later he is on the verge of eliminating the Islamic State’s physical caliphate. He promised to impose a travel ban on countries that he saw as posing a terrorist threat, and after several false starts the final version of his ban was upheld by the Supreme Court. He promised to punish Syria if it used chemical weapons on its people, and, unlike his immediate predecessor, he followed through — not once but twice.

Trump pledged to nominate Supreme Court justices “in the mold of Justice [Antonin] Scalia,” and now Neil M. Gorsuch and Brett M. Kavanaugh sit on the high court. Trump also pledged to fill the federal appellate courts with young, conservative judges, and so far the Senate has confirmed 29 — more than any recent president at this point in his administration.

Trump vowed to pass historic tax reforms and signed the first major overhaul of the tax code in three decades. He vowed an unprecedented regulatory rollback, with a strict policy to eliminate two existing regulations for every new regulation. In his first year, he achieved $8.1 billion in lifetime regulatory savings and is on track to achieve an additional $9.8 billion this year.

During the campaign, he told African American voters, “What do you have to lose? . . . I will straighten it out. I’ll bring jobs back. We’ll bring spirit back.” On his watch, African American unemployment reached the lowest level ever recorded, and his tax reform included a little-noticed provision creating “Opportunity Zones” to try to revitalize struggling towns and inner-city communities.

Trump promised to cancel President Barack Obama’s Clean Power Plan, withdraw from the Paris climate accord, approve the Keystone XL and Dakota Access pipelines, and open the Arctic National Wildlife Refuge to oil exploration. He fulfilled all of those pledges.

On trade, he kept his promise to withdraw from the Trans-Pacific Partnership and impose tariffs on steel and aluminum. He also committed to renegotiating NAFTA and the U.S.-Korea Free Trade Agreement — and recently signed new deals with Mexico, Canada and South Korea. He committed to imposing tariffs on China to force it to open its markets and stop its theft of intellectual property — and is following through on that pledge. Whatever one thinks of Trump’s trade policies, he is doing exactly what he said.

The president pledged historic increases in defense spending, and delivered. He pledged to bring back manufacturing jobs, and manufacturing jobs are growing at the fastest pace in more than two decades. He pledged to sign “Right to Try” legislation to give dying Americans access to experimental treatments, and did. He pledged to take on the opioid epidemic and will soon sign a sweeping bipartisan opioids package into law.

Where Trump has failed to keep promises, such as building the wall or repealing Obamacare, it has not been for a lack of trying. Only in a few rare instances has he backtracked on a campaign pledge — such as when he admitted that he was wrong to promise a complete withdrawal of U.S. forces from Afghanistan and reversed course. I’m glad he did.

But whether one agrees or disagrees is not the point. When Trump says he will do something, you can take it to the bank. Yes, he takes liberties with the truth. But unlike his predecessor, he did not pass his signature legislative achievement on the basis of a lie (“If you like your health care plan, you can keep it ”) — which is clearly worse than falsely bragging that your tax cut is the biggest ever.

The fact is, in his first two years, Trump has compiled a remarkable record of presidential promise - keeping. He’d probably say it’s the best in history — which may or may not end up being true. It’s too soon to tell.

>>> US Early premarket gappers

Early premarket gappers

Gapping up:

VICR +21.6%, NFLX +11.6%, HOPE +8.6%, LRCX +5.7%, UAL +5.7%, ROKU +4.1%, AMAT +3.6%, DAL +3.5%, ASML +3.2%, MTG +3.1%, CREE +2.3%, FULT +2.3%, LTXB +2.2%, LUV +1.6%, USB +1.5%, JBLU +1.1%

Gapping down:

TACO -8.2%, HCSG -7.1%, EIGR -6.4%, IBM -3.9%, ADTN -3.9%, UFPI -3.2%, IBKR -2.8%, SBH -2.2%, O -1.3%, ICFI -0.8%, EVH -0.8%, SONC -0.5%