Fed’s Williams (non-voter): Too much growth could spur asset bubble and high inflation; we've exceeded full employment mark; expansion appears to remain on track
- Sees inflation rising to 2%, sees unemployment declining to a bit below 4%- US economy is on track despite the hurricanes
- Fed in the future will rely on more unconventional tools
- As Fed unwinds the balance sheet, it should put more upward pressure on longer term Treasury yields- Sees economy continuing on same moderate path over next few years
- Fed is moving towards more normal monetary policy, and that means rising interest rates; But r-star, a slower sustainable pace of growth, and inflation all point to a new normal where interest rates are lower than the heady days of the 1990s and early 2000s
- The new normal is likely to be 2.5 percent, and banks, and everyone else, need to prepare accordingly
- Expects future normal spread between 10yr Treasury note and fed fund rate somewhere closer to 1 percentage point
Nestle to be given more time by CADE to sell brand package - report (translated)
05 OCT 2017
Nestle [VTX: NESN] will be given more time by the Brazilian Competition Authority CADE to sell a brand package, O Estado de Sao Paulo reported, citing unnamed sources.
The sale was a condition imposed by CADE last year to clear Nestle’s 15-year-old merger with Brazil-based chocolate maker Garoto, the Portuguese-language item said.
Nestle had until the end of October to make the sale, but CADE is expected to postpone the deadline to 1H18 at the company’s request, the item stated.
The package comprises more than ten brands – including Serenata de Amor, Chokito, Lollo, and Sensacao – in addition to recipes and production secrets, the item stated.
If the sale fails to materialise, CADE’s understanding is that the Nestle/Garoto merger will have to be undone, according to the report.
Nestle cannot sell the brands to a large competitor, thus excluding Illinois-based Mondelez [NASDAQ:MDLZ] from the negotiations, the item added. The assets are likely to be acquired by smaller rivals, such as Argentina-based Arcor and Pennsylvania-based The Hershey Company [NYSE: HSY].
Nestle declined to comment on the O Estado report.
Exclusive: Tory rebels prepared to confront Theresa May within three days and tell her to quit
Tory rebels have said that there is a "50/50" chance they will confront Theresa May in the next three days and demand that she steps down before the end of the year.
Ed Vaizey, a former minister, yesterday became the first Tory MP to break ranks and said that "quite a few people are firmly of the view that she should resign" after her disastrous conference speech.
The Telegraph understands that the rebels, who have the support of around 30 Tory MPs, believe there is a "small window of opportunity" to force the Prime Minister out.
They say that if they can attract sufficient support they will confront the Prime Minister directly and tell her to go.
"It has to be all or nothing," one of the Tory MPs said. "We can't have a situation where a few go public with their criticism and the rest fade away. There is a small window of opportunity here, more people are coming forward.
"This is not about...
FRANKFURT/LONDON (Reuters) - Private equity firms looking to bid for Akzo Nobel’s (AKZO.AS) Specialty Chemicals business, which could be valued at up to 9 billion euros, will be offered debt financing of up to 6 billion euros ($7 billion), people close to the situation said.
Bankers said leveraged loans and high yield bonds in euros and dollars are all being considered in advance of the Dutch paint maker kicking off the expected sale of the business this month. The divestment is part of a strategy it committed to in order to thwart a takeover by U.S. rival PPG Industries (PPG.N).
Akzo, which may still opt for an initial public offering of the unit if a listing commands a higher valuation, wants to receive first-round bids by the end of the year with the aim of finalizing a deal by March 2018.
Buyout group CVC has teamed up with rival KKR to make an offer and they will compete with a consortium comprising Advent and Bain, while Carlyle, Apollo and Blackstone may all put forward bids on their own, the sources said.
“Carlyle may have a slight advantage in this process as it had discussed an asset swap of (former portfolio company) Axalta with Akzo before the Axalta IPO,” one of the sources said.
All the prospective bidders declined to comment while Akzo Nobel spokesman Leslie McGibbon said that the “dual track sales process is going ahead” but declined to give further details.
Bankers advising potential buyers said they expect Specialty Chemicals to sell at an enterprise value of 8-9 times the unit’s expected earnings before interest, tax, depreciation and amortization (EBITDA). Specialty Chemicals reported EBITDA of 953 million euros in2016 and its recently appointed CEO Theirry Vanlancker has forecast EBITDA increases of around 50 million euros per year through 2022.
Last month Akzo warned it would miss a 2017 target for the group as a whole of a 100 million euro operating profit increase due to worsening business conditions.
It did not alter its forecast for Specialty Chemicals, which accounts for about a third of Akzo’s sales and profits.
Shareholders, many of whom were angered by Akzo’s rejection of PPG’s 26.3 billion euro offer, largely support the sale of the chemicals division.
The company plans to call a extraordinary shareholder meeting before the end of the year to update investors.
Gapping down
In reaction to disappointing earnings/guidance:
In reaction to disappointing earnings/guidance:
- NPTN -10.4%, (implements certain restructuring actions, cuts Q3 outlook), CATO -1.3%, (Sep comps)
Other news:
- GSAT -12.3% (commencs offering of $125 mln in shares of voting common stock )
- EBIO -10.1% (files for $12.5 mln common stock offering)
- IMGN -9.1% (commences 13 mln common stock offering)
- ECYT -8.7% (cautious mention by biotech blogger Adam Feuerstein)
- USAU -8.4% (thinly traded; to offer and sell shares of common stock in 'firm commitment' underwritten public offering)
- DRAD -7.4% (lower after disclosing subsidiary received a notice of termination from Philips (PHG); conducting an impairment review)
- MTDR -4% (prices 8 mln share offering for gross proceeds of $210.8 mln)
- EKSO -3.3% ( files for 20,534,898 share common stock offering by holders)
- RIGL -3.3% (prices offering of 18.1 mln shares of common stock at $3.35 per share)
- TROX -2.3% (upsizes and prices secondary offering by selling shareholder, Exxaro Resources, of 19.5 mln shares of common stock at $22.00 per share), .
Analyst comments:
- MNK -3.4% (downgraded to Hold from Buy at Canaccord Genuity)
- CELG -2.6% (downgraded to Underweight from Equal-Weight at Morgan Stanley)
- MNTA -2.3% (downgraded to Hold at Stifel)
- GRUB -2% (downgraded to Neutral from Buy at Citigroup)
- WDC -1.6% (downgraded to Hold from Buy at Deutsche Bank)
- COH -1.3% (downgraded to Neutral from Overweight at Piper Jaffray)
- KMX -1.1% (downgraded to Perform from Outperform at Oppenheimer)
Gapping up
In reaction to strong earnings/guidance:
In reaction to strong earnings/guidance:
- ISCA +9.3%, ZUMZ +9%, (Zumiez raises Q3 comps/sales guidance and reports Sept comps +9.3% vs +6.3% year ago and +7.4% last month)
- STZ +4.4%, STFC +3.9%, (reported est catastrophe results for Q3), TMQ+3.4%, RECN +1.1%
Other news:
- MOBL +9.3% (after Altai Capital Management disclosed 7.63% stake; expects to continue to engage in, discussions with members of management and the board)
- ACAD +6% ( initiates Phase III study to evaluate pimavanserin for the treatment of hallucinations and delusions associated with dementia-related psychosis; FDA grants breakthrough therapy designation to pimavanserin for dementia-related psychosis)
- MDCO +5.8% (presents new data from its TANGO II study of VABOMERE )
- SEAS +5.3% (continued strength on reports of possible sale after being approached by Merlin Entertainment )
- CDNA +5.2% (prices underwritten public offering of 4,341,600 shares of its common stock at $4.00/share)
- MTW +4.8% (following CNBC Fast Money mention)
- PPBI +4.7% (will replace Parkway in the S&P SmallCap 600)
- CATB +4.3% (modestly pulling back after 40%+ move higher over the past three days)
- FMSA +4.2% (reinitiated after the close at Keybanc)
- NCLH +3.6% (will replace Level 3 Communications in the S&P 500)
- NBIX +3.1% (FDA has approved an 80 mg INGREZZA )
- CMCM +2.2% (after closing near lows)
- LC +1.4% (Sohn conference presenter Seth Wunder of Black-and-White Capital comments - thinks balance sheet risk is 'misunderstood')
- BRG +1.3% (terminates two At Market Issuance Sales Agreement)
Analyst comments:
- BIIB +2.1% (upgraded to Overweight from Equal-Weight at Morgan Stanley)
- RGC +1% (upgraded to Equal-Weight at Morgan Stanley)