TheChek News Flow

Recode.net " Apple, Amazon and Google spent record sums to lobby Trump earlier t

Apple, Amazon and Google spent record sums to lobby Trump earlier this summer

They focused their efforts on immigration, taxes and privacy, new records show.

Amazon, Apple and Google each spent record sums lobbying President Donald Trump and the rest of Washington, D.C., over the past three months, new federal records show, shelling out a combined $10 million to shape federal policy on everything from privacy to immigration reform.

It’s the most expensive quarter ever for these tech giants, many of which found themselves face to face with Trump in June as the White House commenced a new effort to modernize the inner-workings of the U.S. government and tackle regulations around drones and other emerging technologies.

Apple, for one, spent $2.2 million between April 1 and June 30, 2017 — about double from the same three-month period in 2016 — to lobby on issues like tax and surveillance reforms. The iPhone giant, like other businesses, had to disclose its lobbying activities from the second quarter of the year to the U.S. government by midnight.

In its filing, Apple explicitly called attention to its work around immigration — an issue that mattered so much to Apple CEO Tim Cook that he confronted Trump directly about it during a private reception at the White House in June.

But the biggest spender is still Google, which spent nearly $5.4 million to lobby Washington in the second quarter of 2017, its report shows.

As usual, the search-and-advertising giant focused its lobbying efforts on shaping self-driving car regulation, pushing for surveillance reforms and addressing potential competition concerns in the nation’s capital.

New to its agenda, however, is “government funding of science,” an item that appears on its lobbying disclosure months after Trump proposed a budget for the U.S. government that slashed federal science and research spending.

Apple declined to comment on its lobbying activities, while a spokeswoman for Google did not immediately respond to an email Friday.

If anything, these companies’ blossoming federal lobbying bills reflect the high stakes for the entire tech industry in Trump’s Washington. Some have warred openly with Trump — from the halls of Congress to U.S. courtrooms — around efforts to restrict immigration and rethink the U.S. government’s approach to climate change. Others have fought the administration as it prepares to unravel the government’s net neutrality rules.

For all their differences, however, Silicon Valley’s top executives see some space for potential compromise with Trump’s White House, including over tax and infrastructure reforms. The likes of Apple and Google long have sought to bring back billions of dollars in cash kept overseas without incurring a stiff tax penalty, an idea the president’s team has publicly supported.

To that end, Amazon spent a record $3.2 million in the second quarter of the year, according to its lobbying disclosure. It’s part of Amazon’s fast-paced growth spurt in Washington, D.C., where it even hired a top fundraiser for Trump from the 2016 presidential campaign as one of its lobbyists — perhaps hoping the president would stop slamming the company and its chief executive, Jeff Bezos.

Amazon’s political efforts also come as the company begins its work to sell a proposed $14 billion merger with Whole Foods to the U.S. government — a deal that already has drawn some early criticism on Capitol Hill. The company did not immediately respond to an email seeking comment.

Other big Beltway spenders include Facebook, which like some of its web company counterparts focused some of its $2.3 million in spending between April 1 and June 30 on fighting a proposal in Congress that seeks to impose new limits on how tech companies tap users’ data to sell ads.

The so-called Browser Act, unveiled by Republican Rep. Marsha Blackburn, has drawn immense opposition from groups like the Internet Association, which represents Amazon, Facebook, Google and others. The group previously told Recode the bill “has the potential to upend the consumer experience online and stifle innovation.”

Facebook also did not immediately respond to an email seeking comment.

Barron's : Deregulation Could Lift Big Bank Profits 30%

Deregulation Could Lift Big Bank Profits 30%

Recent proposals by the Treasury Department to ease the regulatory burden on banks and support greater lending may lead to some changes that would benefit the nation’s leading banks, but a major overhaul is unlikely given the political gridlock in Washington.

The recommendations fall into two groups: changes that can be made by regulators without congressional approval and those that require action on Capitol Hill. Wall Street is most focused on regulatory relief, since Congress is unlikely to take up any legislation to modify the massive Dodd–Frank Wall Street Reform and Consumer Protection Act, which was passed seven years ago in the wake of the financial crisis.

“The list of recommendations that don’t need congressional action for the most part make good common sense, don’t affect the safety and soundness of the banking system, and stand a reasonable chance of taking place,” says Glenn Schorr, an analyst at Evercore ISI. The good news for banks is that about two-thirds of the nearly 100 Treasury recommendations can be made by regulators alone.

That’s good news for investors, as well. In a report issued earlier this year, Brian Kleinhanzl and Michael Brown, analysts at KBW, estimated that the big banks, including Morgan Stanley (ticker: MS), JPMorgan Chase (JPM), Goldman Sachs Group (GS), Citigroup (C), State Street (STT), and Bank of New York Mellon (BK), could get a cumulative earnings boost averaging 30% if a series of regulatory-relief actions take place—among them, the capital rule on risk-free deposits, a relaxation of the Volcker rule, and a reduction in the excess capital that large U.S. banks hold relative to overseas rivals.

THESE POTENTIAL REGULATORY actions may not occur until 2018, however, in part due to a depleted group of bank regulators in Washington. President Donald Trump recently nominated Randal Quarles, an investment manager, for a vacant spot on the Federal Reserve’s seven-member board of governors. Quarles would take a lead role in bank supervision.

It will take time for his nomination to clear Congress, and there are two other vacancies on the Fed board. Then there is the question

of whether Trump will renominate Janet Yellen as Fed chair; her term ends in February 2018. Quarles is viewed favorably by bankers, given his background, his publicly stated view that “the dramatic increase in bank capital” has led to higher interest rates, and his criticism of the Volcker rule, which banned proprietary trading at banks.

“We’re taking a wait-and-see approach to potential regulatory reform,” says KBW’s Kleinhanzl. In a podcast last week, KBW Washington analyst Brian Gardner described the Treasury proposals overall as limited in scope, which surprised some investors given Trump’s hostility to Dodd-Frank. “It called for a review and modification of many parts of Dodd-Frank, not for it to be scrapped or dramatically overhauled,” he said.

Most bankers are resigned to Dodd-Frank, but would be happy to see many of the Treasury recommendations implemented. One of the biggest potential changes includes an easing of the capital burden on banks taking institutional deposits that are held in risk-free Treasuries or at the Federal Reserve.

This most affects trust banks like State Street, which had about 40% of its deposits in this category at year-end 2016, according to KBW. Anticipation of capital relief on deposits already has lifted the shares of State Street and Bank of New York.

Another area where banks could get a break would be a scaling back of the Fed’s Comprehensive Capital Analysis and Review from once a year to once every two years. The CCAR process is a drain on the managements of the nation’s largest 34 banks, involving multiple stress scenarios and a huge need for documentation. A few years ago, JPMorgan CEO Jamie Dimon said the 500 bank employees who were dedicated to handling the CCAR process “conducted over 130 independent qualitative and quantitative assessments of the firm’s forecast methodologies and results.”

The banks recently got a favorable evaluation on the CCAR, which should allow them, on average, to return nearly all of their earnings in the coming 12 months to shareholders in dividends and share repurchases.

Overall, regulatory compliance has become a large cost for banks. M&T Bank (MTB), a regional based in Buffalo, N.Y., said its costs of complying with regulation increased to $440 million in 2016 from $90 million in 2010 and now account for 15% of total expenses. Last year, the bank faced 27 different exams from six regulatory agencies. The cost is much greater at the largest banks.

A REPEAL OF THE VOLCKER RULE is unlikely, as it would require congressional approval, but regulators have the ability to modify what has become an unwieldy rule that is overseen by several different bank regulators.

Banks with large trading operations, including JPMorgan and Goldman Sachs, spend heavily to meet compliance rules. The Treasury proposes to simplify the definition of proprietary trading and allow greater flexibility in market-making and hedging, according to Schorr. The idea is to improve market liquidity. Market-making may become more important as the Federal Reserve starts to unwind its $4.5 trillion bond portfolio later this year.

It may take time, but there’s a good chance that banks will get some regulatory relief during the next year, and that should be welcome news for shareholders already benefiting from positive earnings trends and a potential reduction in the corporate tax rate.

FT : Dark web master thwarted by love of old-fashioned cash

Dark web master thwarted by love of old-fashioned cash

Dismantling of AlphaBay marks dramatic strike against the criminal internet

Users of AlphaBay, the dark net marketplace selling everything from heroin to stolen identities, first started to suspect on the evening of July 4 that there was something awry.

The encrypted site, which operates through the Tor network and dispatches contraband through the post, had gone down unexpectedly, locking its 200,000 users from their accounts, which collectively held millions of dollars worth of crypto currency.

On online forums, some expressed hope the outage was part of routine maintenance. But many voiced fears of an “exit scam” — in which website managers close down operations to seize fortunes held in escrow for themselves.

In fact the shutdown was caused by a police operation spanning a dozen countries — and the recesses of the web. It was partly caused by AlphaBay’s mastermind’s weakness for old fashioned cash — both accumulating it and bragging about it. In the end, bling helped bring him down.

That unmasking was a huge breakthrough in an investigation already hailed as one of the most dramatic strikes against the criminal web in history.

“This is likely one of the most important criminal investigations of the year — taking down the largest dark net marketplace in history,” said Jeff Sessions, US attorney-general, as he unveiled details of the case this week.

But right until the last moment, many users of the dark web had no idea what was going on.

Despite news that the Canadian police had carried out a series of raids connected to dark web merchandise on July 5, users continued to obsess about the alleged exit scam. Some posted threats to the supposed “exit scammers” claiming they would track down the stolen bitcoins.

Others began to encourage a mass movement to Hansa, the dark web’s second favoured marketplace, which supposedly offered users superior protection to AlphaBay because of cosigned escrow accounts, intended to prevent operators from running off with the money.

Little did the users know that Dutch law enforcement agents had taken control of that marketplace on June 20, using it as a honeypot to gather information on the whereabouts and identities of new users.

The final piece of the puzzle came in Bangkok. On July 5, a Canadian citizen, Alexandre Cazes, was arrested in Thailand, at the request of US authorities, on suspicion of being a lead Alphabey administrator. A week later he was found hanged in his cell, a suspected suicide.

Department of Justice documents released on Thursday allege Cazes had been managing the AlphaBay site from Thailand for over two years, amassing a $23,033,975 fortune and paying salaries to some eight to 19 assistant administrators and moderators.

Despite proclaiming himself a true “crypto currency believer”, Cazes took a more traditional approach to wealth management than many of AlphaBay’s users.

According to the Department of Justice, he used a web of offshore arrangements with Swiss, Cypriot, Thai and Liechtenstein institutions to accumulate $770,000 in cash, 10 luxury vehicles, among them a Lamborghini Aventador, and real estate worth over $12.5m in Thailand and Cyprus. The remaining $6.5m of his fortune was kept in a combination of different cryptocurrencies.

Investigators discovered Cazes had linked a personal email — “Pimp_Alex_91@hotmail.com” — to both a welcome message to new users and a password recovery email in 2014. He had also used his AlphaBay pseudonym, Alpha02, in an online posting on how to remove a virus in 2008 on a French website alongside his real name.

But Cazes’ biggest vulnerability turned out to be his penchant for bragging about his newly acquired wealth and status.

In postings on the RooshV social forum, a seedy platform for men to discuss how to pick up women, the married Cazes unwittingly provided crucial details about the car he drove. That allowed law enforcement to identify him driving the vehicle and ultimately track him to his home this month.

In the exchanges, Cazes claimed his Porsche Panamero helped him pick up women in Thailand. But was challenged by a commenter, who could not believe anyone would buy such a vehicle in Thailand, where import taxes double the retail price.

In an effort to authenticate his ownership, Cazes — going by the username Rawmeo — sent the commenter a personal message including a video of himself driving the Porsche.

The commenter then posted online: “I just got a pm from Rawmeo showing a big stack of money and the interior of a sports car. Why he does not post it in the forum I don't know.”

He added: “And I apologize for disbelieving you regarding your finances. You've clearly made a lot of money in a short time and I will have to say congratulations.”

Rawmeo responded: “Because some clues in the pictures might help a mad girl browsing this place identify myself. Believe it or not, I almost got in trouble because of that in the past. That’s why I prefer to privately send this to reputable members.”

FT : The argument to be a buyer of the Saudi Aramco IPO

The argument to be a buyer of the Saudi Aramco IPO

John Dizard looks at the role of US shale producers in the global oil and gas sector

Like cats transfixed by a pigeon, the world’s bankers are quivering in anticipation of next year’s initial public offering by Saudi Aramco, the state oil group. Once-strict regulators are finding exceptions to rules, lawyers are straining to magic away litigation risk, and giant real-money investors are being cajoled into orderly queues.

Many problems can be waved away for the opportunity to participate in “The IPO” as it is referred to on Wall Street. The fees on a ticket of maybe $75bn . . . no wonder they are focused. There is just one question from investors, though: what about shale? Do the US producers continue to depress oil and gas prices?

Let me answer the question with another question. Is the shale industry still competitive thanks to technology, or thanks to quantitative easing? Americans tend to say that rising “unconventional” hydrocarbon production is all about superior science and engineering. International oil people believe the shale people are the spoiled children of the Federal Reserve, the US central bank, and overindulgent investors.

I believe the US exploration and production industry for oil and gas has developed great technology, but it has required continuous transfusions of cheap outside money to keep going. The tide of cheap shale oil and gas will recede only when the capital markets stop wiring funds to the producers.

You could even compare the cost of the capital market’s subsidy of the shale industry to other US strategic assets. A new aircraft carrier comparable to the Gerald R Ford, along with the aircraft and other ships of its strike group, has been estimated to cost $25bn-$30bn.

So if you were playing geopolitics as a simplistic board game, the post-2014 capital markets’ support of the shale industry might be considered the equivalent of three new aircraft carriers. It significantly cut the US dependency on eastern-hemisphere oil.

When the price cuts by Opec, the cartel of oil exporters, hit the shale industry in November of 2014, I thought that the crunch moment for the industry would come sometime in early 2015. Historical experience indicated that was when banks would “redetermine” the borrowing base of the companies and reduce their allowable debt levels.

However, history has not turned out to be a reliable guide in the QE era. It may have been winter in the E&P patch after the halving of the oil price, but there has been a seemingly eternal spring in the private equity and junk-debt world. Many expected a flood of outright bankruptcies and a liquidation of capacity.

There were some bankruptcies, but most management teams emerged from those with newly struck stock options and recharged drilling and completion budgets. Private equity and junk-debt refinancing took the place of operating cash flow modestly leveraged with secured bank lines.

As one Oklahoma oil and gas man I know says: “There is still unlimited capital, and as long as that is true, you can grow anything. If the companies had been forced to live within their cash flow, then their production would go down. Then they would have run into a death spiral where nobody would want to invest in them.”

The shale companies struggling with sub-$40 or sub-$50 oil prices were also able to live off the excess inventory of drilled-but-uncompleted (DUC) wells that had built up during the boom years.

As our Oklahoman says: “There were thousands of DUCs that had not been taken account of. The companies could just complete and connect those to offset the declines in production from older wells.”

Along with the sunk-cost inventory and cheap refinancing, the US E&P companies made real advances in the use of geoscience to find new oil in already-known fields.

They also drilled longer lateral holes, and made more effective use of fracking techniques. So productivity went way up in places such as the Permian Basin in Texas.

As one international oil analyst says, though: “The Permian is preventing high prices today, but ensuring high oil prices tomorrow. The low prices are holding back investment in most of the world, and that is storing up a significant problem in meeting demand in the future.”

That is the argument to be a buyer of the Saudi Aramco IPO.

There are two bets involved in the listing. Can Saudi Arabia contain the social and strategic pressures caused by cheap oil? And will the capital markets eventually stop subsidising shale producers?

FT : Activist investors lead ‘quiet revolution’ in Italy

Activist investors lead ‘quiet revolution’ in Italy

Corporate governance is improving as the grip of traditional company owners weakens

Italy has emerged as a new battle ground for activist investors. They have been spurred on by improving corporate governance and the weakening of traditional company owners during Europe’s sovereign debt crisis.

Twelve Italian companies were on the receiving end of activist intervention — defined as a shareholder publicly agitating for an economic or governance-related change — last year, compared with four in 2013, according to figures from Activist Insight, a data provider.

The uptick in shareholder activism in the eurozone’s third-largest economy comes on the back of a comprehensive dismantling of company cross-shareholdings, which have previously made Italian businesses impenetrable to outsiders.

This followed Europe’s sovereign debt crisis that started to gather pace in 2010, which loosened the grip of the Italian government and powerful family owners on many of the country’s largest businesses.

Italian companies that came under pressure from activists last year include Parmalat, the dairy group, and Mediaset, the media business. Elliott Management, the prominent US activist fund, is also embroiled in a battle with Hitachi, the Japanese conglomerate, over its proposed takeover of Ansaldo STS, an Italian rail signalling equipment company.

Joseph Oughourlian, founder of Amber Capital, the UK hedge fund involved in activist campaigns at Parmalat and Mediaset, said a number of rights issues by Italian companies over the past decade have further weakened the hold of traditional shareholders, enabling activists to enter the fray.

He said a “quiet revolution” has taken place in southern Europe, moving the region away from its reputation as “a world of controlled capitalism”. “There will be increasing voting from foreign shareholders. During [the] crisis of 2012, there weren’t any Anglo-Saxon shareholders. They are now coming back.”

Amber Capital, which has a stake of around 4 per cent in Italian-listed Parmalat, recently led a successful push by minority shareholders against its majority owner, Lactalis, the French company that had wanted to take the dairy producer private.

Amber also has a 3 per cent stake in Mediaset and is pushing the group to resolve a legal tussle with Vivendi, the French conglomerate. The disagreement began when the latter pulled out of a deal to buy Mediaset Premium, a TV service.

However, Nicholas Brooks, head of economic research at Intermediate Capital Group, the UK-listed asset manager, said there is still some degree of political risk in Italy.

The country posted better than expected growth in the first quarter, but overall expansion remains sluggish as it grapples with high levels of debt and unemployment.

Italy’s Five Star Movement, an anti-establishment political party set up in 2009, has also caused international investors concern by indicating it could hold a referendum on euro membership should it triumph in the country’s next election.

“Political risk in Italy has gone quiet for now, but with an election due before May next year and Eurosceptic parties in the ascendance, this is a risk that will probably return,” he said.

>>> Paysafe board has not ruled out other offers following Blackstone/CVC bid

Paysafe board has not ruled out other offers following Blackstone/CVC bid - report

22 JUL 2017

Paysafe [LON:PAYS]’s sale to Blackstone [NYSE:BX] and CVC Capital Partners is not yet a foregone conclusion and the vendors have yet to rule out competing offers, the Financial Times reported. A source working on the transaction said approaches other than Blackstone/CVC’s remain on the table for the Isle of Man-headquartered online payments company, although the fact that Paysafe’s biggest single shareholder, Old Mutual Global Investors, has publicly backed Blackstone and CVC indicates their bid is likely to succeed, the item reported.

The private-equity consortium has offered 590p per share cash, or around GBP 3bn (USD 3.9bn), the report noted. The bid is currently under consideration by Paysafe’s board, which turned down an offer from Blackstone and CVC two months ago, the item reported. Since that time the company has received a further four initial offers, according to a source involved in negotiations.

Paysafe is advised by Lazard, while Credit Suisse is advising CVC and Blackstone, the item reported.

(BFW) U.S. House Releases Bill for Russia, Iran, North Korea Sanctions

Barron's : 3 Ways to Play the Payment Services Rally

3 Ways to Play the Payment Services Rally

A flurry of deals has made the sector hot, but prices on many stocks seem steep.

There’s nothing quite like a $10 billion deal to bring excitement to a sector.

U.S. payments processor Vantiv’s (ticker: VNTV) announcement this month that it plans to pay that amount for British rival Worldpay Group (WPG.UK) triggered a fresh burst of chatter about the relentless shift away from cash to cards and digital transfers—and raised the profile of payments processors.

“The disappearance of cash and checks is the main driver,” says Richard-Maxime Beaudoux, a Paris-based senior equity research analyst at investment bank Bryan, Garnier & Co. Global noncash transactions jumped by 11% to $433 billion in 2015, the most recent data available, and more strong growth is ahead, according to Capgemini, the consulting giant.

A second key driver for the payment services sector is e-commerce ramping up worldwide, says Beaudoux—and another is a steady stream of mergers and acquisitions.

But investors may want to wait for the recent excitement to die down. European stocks in the sector seem a bit pricey after this month’s rally on deal news, which included a $3.8 billion bid for British card processor Paysafe Group (PAYS.UK) that came to light Friday.

Meanwhile, Beaudoux is advising Worldpay’s shareholders to “take their money and run,” as he doesn’t expect competing bids and says the deal terms look generous.

Denmark’s Nets (NETS.Denmark) helped bring about the payment sector’s big party this month. Nets said on July 1 that it had been approached by potential buyers, but cautioned it is “very early stage and there can be no certainty as to the potential outcome.”

UBS analysts aren’t impressed by takeover hopes for Nets. “There can be no certainty an offer for the company will be forthcoming, and we note that so far no value has been speculated,” wrote the UBS team, led by David Mulholland. They have a Neutral rating on the stock and a price target of 135 Danish kroner ($21.16), implying a tumble from its current perch above DKK150.

Beaudoux, for his part, rates the stock a Sell, with a price target of DKK119.

Yet Beaudoux is hardly calling it quits on the sector. Instead, he offers three other European payment players that he tells Barron’s are the best bets for investors: Ingenico Group (ING.France), Worldline (WLN.France), and Wirecard (WDI.Germany).

Ingenico trades at 18.3 times forward-year earnings, versus 29.7 for Worldline and 29.8 for Wirecard. Ingenico’s valuation is also far below Worldpay’s 29.1 price/earnings ratio, following a month-to-date surge of about 20% for that takeover target’s shares, and a little under Nets’ 18.6.

Ingenico looks like a relatively cheap stock, but that’s not because it’s a no-growth story. Management has stuck to its 2017 guidance, shooting for about a 7% rise in like-for-like sales and a slight rise in profit margins, Beaudoux points out in a recent note. Such fundamentals lead him to argue that Ingenico shares deserve to trade at 100 euros ($116.61), up roughly 14% from their current level around €88.

Still, about half of analysts covering the company rate it a Hold or a Sell, according to FactSet. Ingenico could warn on its “margin expansion ambitions” when it reports results on Wednesday, writes Berenberg analyst Jean Beaubois. He has a Sell rating on the shares, along with a price target of €80, and worries about increased competition and hefty investments needed in key areas.

WORLDLINE, UP ABOUT 26% THIS YEAR, could keep on rolling, says Beaudoux—thanks, in part, to a European Union payment services directive due to become law next year, with goals such as harmonizing the payments market while favoring specialist providers over banks.

“Thanks to its high exposure to EU countries, the group is the one that should benefit the most from the new regulation,” he says. (Wirecard and Nets look next in line to benefit from the changes.) Beaudoux gives it a price target of €35, not that far from its current share price around €33, following this month’s M&A-fueled rally.

>>> Weekly update

Weekly Market Update: Markets Eye End of European QE and Start of Corporate Earning, Ignoring Fresh White House Turmoil

US equities tested all-time highs yet again this week, with the Nasdaq notching a 10-session winning streak, its longest since Feb 2015. Policy comments from ECB President Draghi and subsequent reports of an ECB tapering decision coming in October sent European bourses lower on the week for the first time since June, while the euro strengthened to its best levels since 2015. Draghi noted that ahead of decisions on QE in the autumn, underlying inflation remains subdued, and this was confirmed by tepid June CPI data. The Trump administration's effort on healthcare went on life support, as his own party's senators balked at GOP repeal plans, while Special Counsel Mueller's Russia investigation widened to Trump's finances and inner circle. The week ended with a shakeup in the White House communications team ahead of the Senate Intelligence Committee hearing testimony next week from key advisors and Donald Trump Jr. The dollar index hit more than a 1-year low, and crude weakened ahead of an OPEC/non-OPEC compliance meeting on Monday. The Shanghai Composite Index finished with a weekly gain of 0.5% as China Q2 GDP growth topped forecasts on strong investment. The S&P500 gained 0.5% and the Nasdaq was up 1.2%, while the DJIA fell 0.3%, weighed on by weak earnings reports from GE and IBM.

In other corporate news this week, earnings season ramped up with notably strong guidance and streaming metrics from Netflix. Morgan Stanley outperformed rival Goldman Sachs in Q2, and Bank of America reported it benefited less from low interest rates than analysts had expected. The Amazon effect hit on two fronts: a Sears plan to sell Kenmore appliances on the site roiled competitors and retailers, and an announcement that Amazon would enter the meal kit market whacked Blue Apron to new lows. Chipotle also sagged on word of another restaurant closure due to reports of customers falling ill, which the company attributed to norovirus.

SUNDAY 7/16

(CN) CHINA JUN RETAIL SALES Y/Y: 11.0% V 10.6%E; YTD Y/Y: 10.4% V 10.3%E

(CN) CHINA Q2 GDP Q/Q: 1.7% V 1.7%E; Y/Y: 6.9% V 6.8%E; YTD Y/Y: 6.9% V 6.8%E

(CN) CHINA JUN INDUSTRIAL PRODUCTION Y/Y: 7.6% V 6.5%E; YTD Y/Y: 6.9% V 6.7%E

MONDAY 7/17

(EU) EURO ZONE JUN CPI M/M: 0.0% V 0.0%E; CPI Y/Y (FINAL): 1.3% V 1.3%E; CPI CORE (FINAL) Y/Y: 1.1% V 1.1%E

3699.HK Reportedly China have ordered Chinese banks to block lending to Dalian Wanda in order to stop completion of overseas deals - press (update)

(US) JULY EMPIRE MANUFACTURING 9.8 V 15.0E

NFLX Reports Q2 $0.15 v $0.16e, Rev $2.78B v $2.76Be; Guides Q3 $0.32 v $0.22e, total Rev $3.0B v $2.88B

RIO.AU Reports Q2 global iron ore production 79.8Mt v 85.30Mt y/y; Shipments 77.7Mt v 81.8Mte

*(CN) CHINA JUN PROPERTY PRICES M/M: RISE IN 60 OUT OF 70 CITIES VS 56 PRIOR; Y/Y: RISE IN 70 OUT OF 70 CITIES V 69 PRIOR

(US) Sen Maj Leader McConnell: Senate to vote on house passed bill to only Repeal Obamacare with 2-year delay to provide a stable transition to a new healthcare program

TUESDAY 7/18

NOVN.CH Reports Q2 $1.22 v $1.16e, Core Op $3.24B v $3.16Be, R$12.2B v $12.1Be

*(UK) JUN CPI M/M: 0.0% V 0.2%E; Y/Y: 2.6% V 2.9%E; CPI CORE Y/Y: 2.4% V 2.6%E

(DE) GERMANY JULY ZEW CURRENT SITUATION SURVEY: 86.4 V 88.0E; EXPECTATION SURVEY: 17.5 V 18.0E

BAC Reports Q2 $0.46 v $0.43e, R$22.8B v $21.9Be

LMT Reports Q2 $3.23 v $3.09e, R$12.7B v $12.5Be

GS Reports Q2 $3.95 v $3.51e, R$7.89B v $7.6Be

(SA) Saudi Arabia said to be considering further 1M bpd export cut to offset the rise in Libyan and Nigerian production - consultant Petroleum Policy

(US) JUN IMPORT PRICE INDEX M/M: -0.2% V -0.2%E; Y/Y: 1.5% V 1.3.%E

(US) JULY NAHB HOUSING MARKET INDEX: 64 V 67E (lowest in 8 months)

(US) Republican Senator Murkowski (R-AK) says she cannot vote to proceed on a repeal of Obamacare without a replacement; third GOP senator to indicate a vote against straight repeal, enough to block the effort on repeal

(US) MAY TOTAL NET TIC FLOWS: $57.3B V $65.8B PRIOR; LONG-TERM TIC FLOWS: $91.9B V $1.8B PRIOR

CSX Reports Q2 $0.64 v $0.59e, Rev $2.93B v $2.85Be; Boosts share repurchase program by $500M to $1.5B (3% of market cap)

IBM Reports Q2 $2.97 v $2.73e, Rev $19.3B v $19.5Be

UAL Reports Q2 $2.75 v $2.65e, Rev $10.0B v $9.96Be

BHP.AU Reports Q4 iron ore production 60.0Mt v 61.5Mte v 54.0Mt q/q

WEDNESDAY 7/19

(US) JUN HOUSING STARTS: 1.22M V 1.16ME; BUILDING PERMITS: 1.25M V 1.20ME

(US) Atlanta Fed raises Q2 GDP to 2.5% from 2.4% on 7/14

(US) Association of American Railroads weekly rail traffic report for week ending July 15th: 540K carloads and intermodal units, +3.8% y/y (27th straight week of gains)

CP Reports Q2 C$2.77 v C$2.05e, Rev C$1.64B v C$1.24Be

AA Reports Q2 $0.62 v $0.60e, Rev $2.86B v $2.89Be

(US) US Senator McCain (R) diagnosed with brain cancer - McCain's Office

(AU) AUSTRALIA JUN EMPLOYMENT CHANGE: +14.0K V +15.0KE (4th consecutive increase); UNEMPLOYMENT RATE: 5.6% V 5.6%E

(CN) China expected to increasing monitoring cash flows in Macau - SCMP

(JP) BANK OF JAPAN (BOJ) LEAVES INTEREST RATE ON EXCESS RESERVES (IOER) UNCHANGED AT -0.10%; AS EXPECTED; Again delays reaching 2% inflation target to ~FY19 from ~FY18

THURSDAY 7/20

SAP.DE Reports Q2 Non-IFRS Net €1.12B v €979M y/y, non-IFRS Op profit €1.57B v €1.58Be, Rev €5.78B v €5.67Be; launches €500M buyback

UNA.NL Reports H1 Net €3.3B, +22.4% y/yy, Rev €27.7B v €27.8Be

(JP) BOJ Gov Kuroda: Reiterates that virtuous economic cycle is working; risks to prices and economy are tilted to the downside; will continue with powerful easing- post rate decision press conference

(UK) JUN RETAIL SALES (EX AUTO FUEL) M/M: 0.9% V 0.5%E; Y/Y: 3.0% V 2.5%E

*(EU) ECB LEAVES MAIN REFINANCING RATE UNCHANGED AT 0.00%; AS EXPECTED

(EU) ECB Statement: Reiterates QE can be increased in size, duration if outlook worsens

SHLD Launches sales of Kenmore products on Amazon.com

(US) JULY PHILADELPHIA FED BUSINESS OUTLOOK: 19.5 V 23.0E (lowest since Nov)

(EU) ECB chief Draghi: Reiterates that rate at stay at current level well past QE; Bond buying to stay at €60B until end of 2017- Prepared remarks

(EU) ECB chief Draghi: To take discussion on guidance during the autumn; Council was unanimous in not wanting to set a precise date for when changes to QE should be discussed - Q&A

(ZA) SOUTH AFRICA CENTRAL BANK (SARB) CUTS INTEREST RATE BY 25BPS TO 6.75%; NOT EXPECTED

(US) JUN LEADING INDEX: 0.6% V 0.4%E

(US) Special counsel Mueller reportedly expanding Russia probe into Trump business transactions, as well as financial dealings of Trump associates - press

(ID) INDONESIA CENTRAL BANK (BI) LEAVES REVERSE REPO RATE UNCHANGED AT 4.75%; AS EXPECTED

V Reports Q3 $0.86 v $0.80e, Rev $4.57B v $4.36Be

MSFT Reports Q4 $0.98 v $0.71e, Rev $24.7B v $24.2Be

FRIDAY 7/21

RMS.FR Reports Q2 Rev €1.36B v €1.36Be

VOD.UK Reports Q1 group Rev €11.5B v €11.9B y/y

GE Reports Q2 $0.28 v $0.25e, Rev $29.6B v $29.1Be

SLB Reports Q2 $0.35 v $0.30e, Rev $7.5B v $7.26Be

(US) New York Fed Nowcast: raises Q2 GDP forecast to 2.0% from 1.9% on 7/14; raises Q3 GDP forecast to 2.0% from 1.8% on 7/14

(US) Press Sec Spicer resigns; reportedly objected to appointment of Anthony Scaramucci as WH Communications Director - press

>>> US Close Dow-0.15% S&P -0.04% Nasdaq -0.04% Russell -0.45%

Closing Market Summary: Stocks Tick Down on Friday

The major averages rode a late-afternoon rally to fresh session highs, but, unfortunately, it just wasn't quite enough to get them into the green. The Nasdaq (unch) finished just a tick below its flat line, breaking its ten-session winning streak. The S&P 500 (unch) settled in line with the Nasdaq while the Dow (-0.2%) and the Russell 2000 (-0.5%) underperformed. For the week, the S&P 500 ended higher by 0.5%.

Five of eleven sectors settled Friday's session in negative territory, but losses were modest for the most part. The energy sector registered the widest decline, dropping 0.9%, after reports of increased OPEC oil production sent crude oil into negative territory. The energy component lost 2.7%, finishing at a price of $45.64/bbl.

Like energy, the industrial sector settled below the broader market, slipping 0.2%, with its largest component by market cap--General Electric (GE 25.91, -0.78)--leading the retreat. GE shares tumbled 2.9%, to their worst level since October 2015, after disappointing organic revenue growth for the company's industrial segment overshadowed better than expected top and bottom lines.

Microsoft (MSFT 73.79, -0.43) also declined after beating top and bottom line estimates, losing 0.6%. However, the company did enjoy a ten-day rally in front of the release, suggesting that its upbeat earnings report was priced in ahead of time. Conversely, Visa (V 99.60, +1.49) climbed 1.5%, to a new all-time high, after reporting above-consensus earnings and revenues, in addition to raising its guidance for the fiscal year.

The top-weighted technology sector (-0.1%), which houses both Microsoft and Visa, managed to settle roughly in line with the broader market. However, in addition to MSFT's slide, the tech space had to overcome a negative performance from chipmakers in order to do so; the PHLX Semiconductor Index dropped 0.8% amid broad weakness.

Conversely, biotech stocks rallied on Friday, pushing the iShares Nasdaq Biotechnology ETF (IBB 324.88, +1.96) higher by 0.6%. However, the health care sector wasn't able to finish ahead of the broader market, ending the day lower by 0.1%.

The influential financial space (unch) outperformed for much of the day, but eventually slipped back into the middle of the sector standings. Capital One (COF 87.94, +6.93) was the sector's top-performing component, jumping 8.6%, after the company reported better than expected earnings.

Countercyclical sectors like utilities (+0.8%), consumer staples (+0.3%), and telecom services (unch) settled near the top of the leaderboard. The rate-sensitive utilities group benefited from a rally in the Treasury market that left the 10-yr yield (2.23%) and the 2-yr yield (1.34%) lower by two basis points apiece.

Meanwhile, on the cyclical side, the consumer discretionary (+0.1%), real estate (+0.2%), and materials (unch) groups also outperformed. Netflix (NFLX 188.54, +4.94) led consumer discretionary's advance, jumping 2.7%, to end the week higher by 17.0%. The company surged 13.5% on Tuesday after reporting a much larger than expected increase in subscribers.

In the currency market, the U.S. Dollar Index (93.74, -0.34) slipped another 0.4% on Friday to end the week with a loss of 1.3%. Both the euro (1.1667) and the yen (111.06) climbed against the greenback, adding 0.3% and 0.8%, respectively.

Investors did not receive any notable economic data on Friday.

On Monday, market participants will receive just one piece of economic data--June Existing Home Sales. The report will be released at 10:00 ET.

Nasdaq Composite +18.7% YTD

S&P 500 +10.4% YTD

Dow Jones Industrial Average +9.2% YTD

Russell 2000 +5.8% YTD