>>> US Gapping down


Gapping down
In reaction to disappointing earnings/guidance:

  • N/A.

M&A news:

  • SIRI -5% (aquires Pandora (P) for $3.5 bln)
  • CMCSA -4.6% (Comcast (CMCSA) wins auction for Sky with $40 bln bid)

Other news:

  • LOOP -13.9% (Loop Industries and Indorama Ventures 'announced a joint venture to manufacture and commercialize sustainable polyester resin')
  • TLRY -11.4% (continued weakness; cautious Barrons article)
  • CRON -2.6% (cautious Barrons article)
  • MU -1.6% (continued weakness post earnings)
  • ENDP -1.0% (agrees to additional stay of its litigation against the FDA until December 31)

Analyst comments:

  • NTNX -5.7% (downgraded to Negative from Neutral at Susquehanna)
  • CZR -2.8% (initiated with a Sell at UBS)
  • SFM -2% (downgraded to Market Perform from Outperform at Wells Fargo)
  • TXRH -1.5% (downgraded to Underperform from Market Perform at BMO Capital Markets)

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance:

  • PBA +1.2% (raises FY18 adjusted EBITDA guidance)

M&A news:

  • P +8.8% (to be acquired by SiriusXM (SIRI) in all-stock transaction valued at approximately $3.5 bln, or implied price of $10.14/share)
  • GOLD +6.9% (confirms merger with Barrick Gold)

Other news:

  • AMRN +299.7% (announces topline results from Vascepa cardiovascular outcomes trial -- REDUCE-IT met its primary endpoint demonstrating an approximately 25% relative risk reduction) CGC +26.2% (cautious Barrons article)
  • XON +25.9% (announces advances in the development of its microbial platform to produce cannabinoids for medical uses)
  • EPZM +18% (FDA lifts partial clinical hold on tazemetostat clinical program)
  • AKCA +9.9% (Akcea Therapeutics & Ionis Pharmaceuticals (IONS) announce 'positive' topline results from a Phase 2 clinical study of AKCEA-APO(a)-LRx in patients with established cardiovascular disease and elevated levels of lipoprotein)
  • ALXN +6.6% (positive topline results from the Phase 3 PREVENT study of Soliris)
  • INSY +4.8% (recently completed a human proof-of-concept study of dronabinol inhalation)
  • IAG +3.8% (announces updated Resource and Reserve estimate for its Rosebel Gold Mine in Suriname)
  • ABT +2.8% (positive clinical study results from a randomized controlled trial comparing treatment with the MitraClip device)
  • TRXC +2.3% (acquires assets of MST Medical Surgery Technologies)
  • SRPT +1.3% (FDA has lifted the clinical hold for the Company's Duchenne muscular dystrophy micro-dystrophin gene therapy program) 

Analyst comments:

  • AVP +3.3% (upgraded to Buy from Neutral at DA Davidson)
  • MIDD +1% (upgraded to Buy from Neutral at Buckingham Research)
  • PAA +0.8% (upgraded to Buy from Hold at Stifel)

>>> US Early premarket gappers


Early premarket gappers

Gapping up:

  • AMRN +272.6%, EPZM +25.4%, GOLD +6.4%, SA +5.8%, AVP +4.5%, EQNR +4%, ABX +3.4%, ESV +2.6%, ABT +2.5%, TOT +2.1%, WLL +1.8%, INSY +1.5%, RDS.A +1.5%, BP +1.5%, CHK +1.4%, STM +1.4%, SLB +1.4%, RIG +1.3%, MRO +1.2%, ASML +1%, NEM +1%, E +0.9%, AMD +0.9%, SWN +0.9%, COP +0.7%

Gapping down:

  • CMCSA -5.4%, XNET -3.2%, TTM -2.9%, SOGO -2.9%, IBN -2.4%, OASM -1.7%, SAN -1.7%, VALE -1.7%, BABA -1.7%, TAL -1.4%, BIDU -1.4%, MU -1.4%, BUD -1.3%, CHU -1.2%, VIPS -1.1%, GTXI -0.6%, TSLA -0.6%

FT : The productivity conundrum

The productivity conundrum
Has the internet revolution helped or hindered economic growth?

As every Swampian knows, economic growth is nothing more than productivity plus demographics. Given that birth rates in most parts of the world are falling, bolstering productivity is crucial for ensuring that our children have a better standard of life than we do. Yet at a time when there appears to be more productivity bolstering technology around us than ever before, productivity rates are stubbornly flat. Why is this? Some academics, like Robert Gordon at Northwestern University, who wrote the fine book The Rise and Fall of American Growth, think that the digital revolution simply isn’t all that. He points out that we got a far greater boost to standards of living from the Industrial Revolution than the advent of computers (Gordon loves to poll people as to whether they’d rather have running water and electricity or an iPhone). He also points out that it took 70 years for the gains of the Industrial Revolution to flow through society, and we are only about 20 years or so into the internet revolution.

Others – most notably those in Silicon Valley – feel that we aren’t measuring productivity correctly. One high-level executive at Google once told me that he felt YouTube was their contribution to American industrial policy, in the sense that it allowed hairdressers or make-up artists or furniture makers to create and monetise content about their trades. I checked in with Jonathan Taplin, the Big Tech critic and author of Move Fast and Break Things about this, and he pointed out that it takes about 2m YouTube hits to make $20,000. Not exactly a replacement for the steel mill or auto line jobs of the past.

There is, in fact, another line of thought developing around the productivity conundrum, and that is that technology itself may be part of the problem, as well as the solution. Economist Alan Blinder, of whom I’m a big fan (his sense of humour alone is welcome in the dismal science) has for years raised the possibility that high-speed digital technology – email, apps, etc – are actually reducing productivity by taking us away from our work. As he told me over email: “I’m becoming a bigger and bigger believer of this, because of conversations I’ve had with people who actually run businesses.”


© Alamy
He’s not alone. Consider the advertising executive who banned phones and found that his employees regained hours of productive work. Or the June 2016 survey from Career Builder that found that one in five bosses believe that their employees are productive only five hours a day, and over half of them blame the cell phone and its distractions for that. It’s no wonder, given that other studies have shown that the average person touches their phone 2,617 times a day. Just searching through emails for information has become a time drag.

Of course, these same bosses who see phones and apps as a workplace productivity killer also believe that being connected outside of work is a good thing. On balance, I’d agree. I couldn’t balance my work and family responsibilities as I do without being able to log in as I like, when I like. But I also find that I’m experimenting more and more with staying offline as long as possible during the work day, checking email, say, three times a day and no more, in order to stay more focused on the tasks at hand. It’s the only way to have thoughts that are deeper than 140 characters – which other academic research shows may be the best way to stay competitive in your career. I’d be curious to know how you think about this topic, Ed, and what other Swampians do to keep themselves connected, and yet productive.

Recommended reading
* I was intrigued by this piece from Noah Smith, a Bloomberg opinion columnist, about how economics – like psychology – is having a replication crisis. It looks like theory and real world experience often don’t replicate themselves. I think that the economics profession, which continues to engage in that fantasy that it’s a hard science like physics, rather than a murkier soft science, needs to take this point to heart more.
* This speech from former Obama secretary of defense Ash Carter, now at Harvard, illuminates the tech nationalism that I think will be front and center in the continuing US-China trade conflict.
* And here’s another fascinating piece, from Harvard professor and New Yorker staff writer Jill Lepore, about the history of technological change and political disruption.
* Looks like the EU is listening to what the FT has been writing about Amazon.
* Also in the pages of the FT, I enjoyed this personal opinion piece by my colleague Anne-Sylvaine Chassany about her son’s continued attachment to London after spending a few years in Paris. I had a similar experience when I moved my children from London to New York. Even for cosmocrats, place still matters …
Edward Luce responds

Thanks Rana. I would certainly prefer to have running water than a smartphone, though if I could guarantee an uninterrupted supply of both that would be splendid. As regards the distraction/empowerment debate on iPhones, this is partly generational. I think we’re from the fortunate generation that were raised before the internet became widely available, and thus learned to love reading, but were still young enough to become technoliterate. It’s millennials and iGens that I worry about. That said, millennials do suffer from an unfair profile. As the joke goes, everyone hates millennials until they need to convert a PDF document into Word. 

FT : Casino and Carrefour in dispute over merger claim

Casino and Carrefour in dispute over merger claim
Casino statement on approach by larger rival contradicted by Carrefour

French retailer Casino has become embroiled in a war of words with Carrefour after it claimed it had rejected an approach from its larger rival over a possible tie-up.

Casino said on Sunday night that it had been “contacted over the last few days with a view to a possible combination”. It said its board of directors met on Sunday and “unanimously” rejected the approach.

But Casino’s statement was contradicted by Carrefour, the world’s second-largest retailer by revenues.

In a contrasting separate statement on Monday morning, Carrefour said: “Carrefour denies having solicited Casino and is surprised that a merger proposal that does not exist has been submitted to Casino’s board of directors.” 

It added: “Focused on the implementation of its 2022 transformation plan, Carrefour is reviewing its legal options in order to stop these unacceptable innuendos.”

A Casino-Carrefour tie-up would have combined two of the biggest names in the highly competitive French food retail market, where players are seeking to eke out profits amid a multiyear price war and ramp up their e-commerce offerings to resist the march of Amazon.

A spokesperson for Casino said the retailer’s chief executive Jean-Charles Naouri and his counterpart at Carrefour Alexandre Bompard met in Paris on September 12. After that meeting, the chief executives had “designated counsel” to advise them. Carrefour declined to comment on this statement.

According to two people familiar with the situation, the meeting between the two executives was organised by Alain Minc, a businessman and political adviser, and took place at Mr Minc’s offices in Paris. Mr Minc did not immediately respond to a request for comment.

Casino’s share price has plummeted this year, reflecting investor concerns over its high levels of debt and the structural complexity with which its chief executive and controlling shareholder Jean-Charles Naouri has built the group.

Just over a week ago, Casino’s parent company Rallye announced it had secured a €500m credit line from French banks to strengthen its financial position, pushing Rallye’s shares up 7 per cent. Casino’s shares rallied slightly but are still down almost a third this year. 

Speaking at the FT Future of Retail summit in London on Thursday, Régis Schultz, chief executive of Casino’s upmarket urban brand Monoprix that is responsible for half of its profits in France, blamed bearish analysts and hedge funds who are shorting the stock for the big moves in Casino’s share price.

Mr Schultz said: “[Hedge funds] want to make short-term money, that’s it. It’s speculation.”

He added: “We have no problem of access to funding.”

Casino’s statement on Sunday said: “Carrefour’s approach occurs at a time when the market for Casino’s securities has been subjected to co-ordinated downward speculative manipulations of an unprecedented scale over the course of the past several months.”

Carrefour is undergoing an ambitious 2022 transformation under Alexandre Bompard, who took over as chief executive in July last year, aimed at cutting costs and improving its omni-channel offering to restore the vast retailer to profitability.