>>> Lockheed Martin beats by $0.27, beats on revs; guides FY18 EPS above consens

Lockheed Martin beats by $0.27, beats on revs; guides FY18 EPS above consensus, revs in-line (344.90)
  • Reports Q4 (Dec) earnings of $4.30 per share, excluding non-recurring items, $0.27 better than the Capital IQ Consensus of $4.03; revenues rose 10.1% year/year to $15.14 bln vs the $14.72 bln Capital IQ Consensus.
  • Backlog of approximately $100 billion at the end of 2017
  • The corporation expects the net 2018 FAS/CAS pension benefit to be approximately $1.0 billion assuming a 3.625 percent discount rate (a 50 basis point decrease from the end of 2016), an approximately 13.00 percent return on plan assets in 2017 (a 550 basis point increase from the expected rate of return at the end of 2016), a 7.50 percent expected long-term rate of return on plan assets in future years, and the revised longevity assumptions released during the fourth quarter of 2017 by the Society of Actuaries.
  • Co issues guidance for FY18, sees EPS of $15.20-15.50, excluding non-recurring items, vs. $14.07 Capital IQ Consensus Estimate; sees FY18 revs of $50-51.5 bln vs. $51.18 bln Capital IQ Consensus Estimate.

>>> Dominion Midstream misses by $0.04, beats on revs; Affirms targeted 22% annu

Dominion Midstream misses by $0.04, beats on revs; Affirms targeted 22% annual distribution growth through 2020 (31.30)

Reports Q4 (Dec) earnings of $0.36 per share, excluding non-recurring items, $0.04 worse than the Capital IQ Consensus of $0.40; revenues fell 31.7% year/year to $121.3 mln vs the $109.15 mln two analyst estimate.
Management affirms targeted 22 percent annual distribution growth through 2020

>>> Dominion Energy beats by $0.02, misses on revs; guides Q1 EPS in-line; guide

Dominion Energy beats by $0.02, misses on revs; guides Q1 EPS in-line; guides FY18 EPS in-line (75.50)
  • Reports Q4 (Dec) earnings of $0.91 per share (GAAP EPS $2.25 including tax benefit), excluding non-recurring items, $0.02 better than the Capital IQ Consensus of $0.89; revenues rose 4.0% year/year to $3.21 bln vs the $3.47 bln Capital IQ Consensus.
  • Co issues in-line guidance for Q1, sees EPS of $0.95-1.15, excluding non-recurring items, vs. $1.10 Capital IQ Consensus Estimate.
  • Co issues in-line guidance for FY18, sees EPS of $3.80-4.25, excluding non-recurring items, vs. $4.04 Capital IQ Consensus Estimate.
  • "Construction of the 1,588-megawatt Greensville County combined cycle power station continues on time and on budget. The project is approximately 73 percent complete and is expected to begin commercial operations in late 2018. We recently received a Limited Notice to Proceed from FERC for the Atlantic Coast Pipeline and the Supply Header Project which allows us to remain on schedule for completion of the projects in the second half of 2019. Cove Point Liquefaction construction is complete and we are in the final stages of commissioning."

(SG) Invest with Baskets : Our favourite equity baskets for 2018

‘Invest with Baskets' features over 40 stock baskets built for equity and multi-asset
investors. Our baskets offer strategic or tactical exposure to market themes (e.g. Oil, EM,
Forex) as well as to Style (Value, Growth and Dividend). With this report, we update our
three Style baskets according to their respective scoring/screening methodologies.
 In Europe, go for stocks with domestic and EM exposure to protect from a higher
EUR/USD. Our SG Eurozone Consumer Basket should be a good hedge against a stronger
euro given its strong exposure to domestic cyclical consumption (p.38). Take advantage of
higher EM growth and don’t be fooled by the euro’s 15% appreciation against the USD in
the past 12 months – the trade-weighted euro is only up 6% yoy. For the EM exposure, we
favour our SG Dragon (p.49), SG Brazil-related (p.50), and SG Russia-related (p.51) baskets.
 Go for Value with our SG Best Value Basket The improvement in global economic
momentum offers strong support for cyclical sectors, while higher inflation and ECB policy
normalisation should send bond yields higher. In this environment, we expect Value to
continue to outperform Growth in Europe, and recommend our SG Best Value Basket
(+4.5% vs Stoxx 600 +3.5% ytd). For the new composition of our basket, see page 7.
 Long/short baskets continue to pay off on Brexit In March 2015, we created two
stock selections that could prove resilient (‘Brexit+’) or suffer (‘Brexit-’) in a Brexit scenario
(link). We expect our strategy to continue to perform well as Brexit negotiations accelerate.
 In Asia, protect from Japanese yen strengthening with our SG Japan Domestic
Basket Our basket is composed of stocks with less than 40% exposure to international
markets. In China, our SG China Mixed Ownership baskets offers exposure to state-owned
stocks that stand to benefit from the government’s mixed ownership reform. We also
maintain exposure to the SG Japan Capex and SG Japan Construction baskets.

Axios.com : Trump team considers nationalizing 5G network

Trump team considers nationalizing 5G network



Trump national security officials are considering an unprecedented federal takeover of a portion of the nation’s mobile network to guard against China, according to sensitive documents obtained by Axios.

Why it matters: We’ve got our hands on a PowerPoint deck and a memo — both produced by a senior National Security Council official — which were presented recently to senior officials at other agencies in the Trump administration.

The main points: The documents say America needs a centralized nationwide 5G network within three years. There'll be a fierce debate inside the Trump administration — and an outcry from the industry — over the next 6-8 months over how such a network is built and paid for.

Two options laid out by the documents:

The U.S. government pays for and builds the single network — which would be an unprecedented nationalization of a historically private infrastructure.
An alternative plan where wireless providers build their own 5G networks that compete with one another — though the document says the downside is it could take longer and cost more. It argues that one of the “pros” of that plan is that it would cause “less commercial disruption” to the wireless industry than the government building a network.

Between the lines: A source familiar with the documents' drafting says Option 2 is really no option at all: a single centralized network is what's required to protect America against China and other bad actors.

The source said the internal White House debate will be over whether the U.S. government owns and builds the network or whether the carriers bind together in a consortium to build the network, an idea that would require them to put aside their business models to serve the country's greater good.

Why it matters: Option 1 would lead to federal control of a part of the economy that today is largely controlled by private wireless providers. In the memo, the Trump administration likens it to "the 21st century equivalent of the Eisenhower National Highway System" and says it would create a “new paradigm” for the wireless industry by the end of Trump's current term.

But, but, but: The proposal to nationalize a 5G network also only covers one part of the airwaves; there’d be other spaces where private companies could build.

The PowerPoint presentation says that the U.S. has to build superfast 5G wireless technology quickly because “China has achieved a dominant position in the manufacture and operation of network infrastructure,” and “China is the dominant malicious actor in the Information Domain.” To illustrate the current state of U.S. wireless networks, the PowerPoint uses a picture of a medieval walled city, compared to a future represented by a photo of lower Manhattan.

The best way to do this, the memo argues, is for the government to build a network itself. It would then rent access to carriers like AT&T, Verizon and T-Mobile. (A source familiar with the document's drafting told Axios this is an "old" draft and a newer version is neutral about whether the U.S. government should build and own it.)

It's a marked shift from the current system where those companies each build their own systems with their own equipment, and with airwaves leased from the federal government.
Nationwide standard: the federal government would also, according to the memo, be able to use the banner of national security to create a federal process for installing the wireless equipment, preventing states and cities from having their own rules for where the equipment could go.

The bigger picture: The memo argues that a strong 5G network is needed in order to create a secure pathway for emerging technologies like self-driving cars and virtual reality — and to combat Chinese threats to America’s economic and cyber security. A PowerPoint slide says the play is the digital counter to China’s One Belt One Road Initiative meant to spread its influence beyond its borders. The documents also fret about China's dominance of Artificial Intelligence, and use that as part of the rationale for this unprecedented proposal.

There’s even a suggestion that America’s work on a secure 5G network could be exported to emerging markets to protect democratic allies against China.
“Eventually,” the memo says, “this effort could help inoculate developing countries against Chinese neo-colonial behavior.”

AI arms race: The memo says China is slowly winning the AI “algorithm battles,” and that “not building the network puts us at a permanent disadvantage to China in the information domain.” There is a real debate to be had over China and AI, but it’s unclear what at all that has to do with a mobile network.

Reality check: The U.S. wireless industry is already working on deploying 5G networks, with AT&T, Verizon and T-Mobile, for example, investing heavily in this area. The process for setting 5G standards is well underway. Korea has been at the forefront of testing, as have Japan and others. It's not clear a national strategy would yield a 5G network faster or by the memo’s 3-year goal.

Quants are leaving Goldman and Credit Suisse before bonuses

Quants are leaving Goldman and Credit Suisse before bonuses

Banks are having a hard time keeping people central to their systematic trading aspirations despite the fact that bonuses are coming up.

Martin Priego Wood, director for quantitative strategies at Credit Suisse, left the bank to join Eisler Capital earlier this month. Similarly, Yashar Aghababaie, a managing director at Goldman Sachs, who led design and deployment of trading algorithms and risk management systems among other things, has joined Chicago Trading Company.

Both men left their respective firms before receiving bonuses for the previous year.

Wood started his career at Credit Suisse in late 2009 and had been there ever since before leaving it to join Eisler. A Ph.D. in Aeronautics from Imperial College London, he earned his master’s degree in Physics of Complex Systems from the National University of Distance Education in Spain while working at Credit Suisse. At Eisler, he will handle quantitative strategies and technology.

Founded by Goldman Sachs partner Edward Eisler in late 2015, Eisler Capital has been hiring selectively. The firm started with two employees and expanded to 13 in 2016. Last year, the hedge fund made a handful of significant hires. It paid out £476k on an average per employee and £2m to its senior management team in 2016

Meanwhile, Aghababaie, who started his career at Goldman Sachs and spent over 12 years there, has opted to go to Chicago Trading Company, a derivatives trading firm, as a head of systematic trading instead of joining a hedge fund. Aghababaie joined Goldman as a vice president in 2005, specializing in quantitative, algorithmic volatility trading, and became managing director in 2011. Alongside electronic trading and risk management, he also supervised market microstructure research, system architecture, and business development and strategy. He is a Ph.D. in high energy physics, effective Lagrangians, and supergravity, who served as a postdoctoral fellow at the University of Toronto before joining Goldman.