Reuters - ECB should exit unconventional monetary policy soon: German deputy Fin

Reuters - ECB should exit unconventional monetary policy soon: German deputy Finance Minister - http://reut.rs/2qvlUOy

The European Central Bank should begin unwinding its ultra-loose monetary policy soon if it wants to avoid damaging side-effects, German Deputy Finance Minister Jens Spahn said on Wednesday.

"Unless monetary policy starts normalizing soon, negative side-effects will become more damaging," Spahn told a conference at the German foreign ministry.

"Regarding the euro zone, the ECB should be ready to exit the unconventional monetary policy not too late," he added.

Spahn said there was too much public and private debt in the world and called for an acceleration of structural reforms, saying monetary policy could not solve structural problems.

WWD : Toxic Cocktail: The U.K. High Street Braces for a Tough 2017

Toxic Cocktail: The U.K. High Street Braces for a Tough 2017
The weak pound, and other factors, will hit retailers hard this year.

LONDON — While foreign investors and brands may be salivating at the prospect of securing hot property or setting up shop on the U.K. high street, the reality for local retailers is increasingly grim.

A confluence of factors, including the uncertainty surrounding Brexit and the prospect of new trade international deals — or no trade deals at all — the weaker pound, expiring hedging contracts, higher taxes and consumers’ preference for experiences over shopping are making the business of retail ever harder for local brands.

The pound, which is tracking about 13 percent below last year’s pre-referendum level at $1.29, has proven a boon for Chinese, American, Danish and continental European investors, not to mention many retailers, whose goods have been flying off shelves because of the weaker sterling and the comparatively stronger euro and dollar.

Foreign investors have poured billions into central London property in particular, and the Chinese now own some 15 percent of the property around Oxford, Regent and Bond Streets.

U.S. brands such as Polo Ralph Lauren, Tory Burch, Michael Kors, Coach and Stuart Weitzman have all opened units on Regent Street over the past year, spurred on by Britain’s Crown Estate, the property company that has redeveloped the neighborhood, and by cheaper costs due to the weak pound.

For British businesses, though, reality is beginning to sting. Earlier this month, the publicly quoted fashion and home giant Next said sales in the first quarter were down 2.5 percent.

“The U.K. consumer environment remains challenging, particularly in the clothing and homeware markets, and real wage growth is now close to zero,” said the company, adding that full-price sales could fall 3.5 percent in the current fiscal year.

For the first time in 18 years, Next’s chief executive officer Simon Wolfson failed to collect his annual bonus for fiscal 2016-17. Next’s board also missed out on theirs.

Next is not alone — and things could be worse. Over the past year, British high-street stalwarts BHS, Austin Reed and Jaeger all shut up shop due to diverse factors, while Marks & Spencer and Burberry set major cost-cutting and efficiency drives in response to low rates of growth and consumers’ new appetites and ways of shopping.

On May 11, the Bank of England cut its U.K. growth forecast for 2017 to 1.9 percent from the 2 percent it had predicted in February. It cited slow income growth and rising inflation. In the first quarter, the economy grew by 0.3 percent, compared with 0.7 percent in the fourth quarter of 2016 while inflation stands at a three-year high of 2.3 percent.

When rattled consumers do decide to splash some cash, they prefer to spend it on experiences rather than plain old shopping. According to Barclaycard, which gauges consumer behavior on a monthly basis, year-over-year spending in April was up 5.5 percent due in part to inflation and a later Easter.

During the month, the in-store spend on women’s and men’s clothing dropped 0.5 and 2.8 percent respectively, while department store sales were down 0.9 percent. By contrast, spending in restaurants was up 16.1 percent and money spent on cinema, theater and dance rose 12.7 percent.

“It’s clear consumers are recognizing and responding to the inflationary pressures being placed on household budgets,” said Paul Lockstone, managing director at Barclaycard. “Despite growth across a number of categories, the spending picture in real terms is one of growing caution, as seen by declining confidence levels among the U.K.’s consumer.”

Further fuelling retailers’ woes are local taxes, known as business rates, which have soared for many brands after property prices were re-evaluated for the first time in seven years. The new rates took effect in April.

In the U.K., business owners pay taxes based on the value of the property they occupy rather than on the turnover of the business. On Mayfair’s Dover Street, home to brands such as Victoria Beckham, Acne Studios, Golden Goose, Jimmy Choo Men’s and Christian Louboutin, rates rose 200 to 300 percent, while in other parts of the West End, the spike will be more like 80 to 120 percent.

The pound, too, is becoming troublesome on a number of fronts. While it proved a short-term boon for retailers that rely on tourists, it’s begun to eat away at margins due to higher import costs.

During a recent parliamentary hearing examining the potential implications of Brexit on the British fashion business, U.K. Fashion and Textile Association chief executive officer Adam Mansell said the lion’s share of U.K. high-street goods is imported from non-EU sources. “Bangladesh is our second largest supplier of clothing in the U.K., and the tariff rates on goods coming from the country will go up 25 percent,” he said, unless the U.K. strikes a trade deal similar to the one it has as an EU member.

Those calculations didn’t even take into account the impact of the weaker pound on companies’ sourcing costs.

Many post-referendum currency hedging deals are expiring, which means that over the next few months, firms that import goods priced in dollars will see their expenses rise 13 percent, in keeping with the pound’s decline.

It will be up to the individual companies to decide whether to absorb the extra costs, or to pass them onto an increasingly spooked consumer. It’s going to be one tough decision given that fashion retailers typically operate at margins around 10 percent.

Less attractive hedging deals are also cutting into companies’ bottom lines.

In April, Burberry said it is expecting a 10 million pound, or $12.7 million, drag on the reported, adjusted retail-wholesale profit figure in the current fiscal year, due partly to new hedging rates that are less favorable.

NYT : Comey Memo Says Trump Asked Him to End Flynn Investigation

Comey Memo Says Trump Asked Him to End Flynn Investigation
WASHINGTON — President Trump asked the F.B.I. director, James B. Comey, to shut down the federal investigation into Mr. Trump’s former national security adviser, Michael T. Flynn, in an Oval Office meeting in February, according to a memo Mr. Comey wrote shortly after the meeting.

“I hope you can let this go,” the president told Mr. Comey, according to the memo.

The documentation of Mr. Trump’s request is the clearest evidence that the president has tried to directly influence the Justice Department and F.B.I. investigation into links between Mr. Trump’s associates and Russia. Late Tuesday, Representative Jason Chaffetz, the Republican chairman of the House Oversight Committee, demanded that the F.B.I. turn over all “memoranda, notes, summaries and recordings” of discussions between Mr. Trump and Mr. Comey.

Such documents, Mr. Chaffetz wrote, would “raise questions as to whether the president attempted to influence or impede” the F.B.I

Mr. Comey wrote the memo detailing his conversation with the president immediately after the meeting, which took place the day after Mr. Flynn resigned, according to two people who read the memo. It was part of a paper trail Mr. Comey created documenting what he perceived as the president’s improper efforts to influence a continuing investigation. An F.B.I. agent’s contemporaneous notes are widely held up in court as credible evidence of conversations.

Mr. Comey shared the existence of the memo with senior F.B.I. officials and close associates. The New York Times has not viewed a copy of the memo, which is unclassified, but one of Mr. Comey’s associates read parts of it to a Times reporter.

“I hope you can see your way clear to letting this go, to letting Flynn go,” Mr. Trump told Mr. Comey, according to the memo. “He is a good guy. I hope you can let this go.”

Mr. Trump told Mr. Comey that Mr. Flynn had done nothing wrong, according to the memo.

Mr. Comey did not say anything to Mr. Trump about curtailing the investigation, replying only: “I agree he is a good guy.”

In a statement, the White House denied the version of events in the memo.

“While the president has repeatedly expressed his view that General Flynn is a decent man who served and protected our country, the president has never asked Mr. Comey or anyone else to end any investigation, including any investigation involving General Flynn,” the statement said. “The president has the utmost respect for our law enforcement agencies, and all investigations. This is not a truthful or accurate portrayal of the conversation between the president and Mr. Comey.”

Mr. Chaffetz’s letter, sent to the acting F.B.I. director, Andrew G. McCabe, set a May 24 deadline for the internal documents to be delivered to the House committee. The congressman, a Republican, was criticized in recent months for showing little of the appetite he demonstrated in pursuing Hillary Clinton to pursue investigations into Mr. Trump’s associates.

But since announcing in April that he will not seek re-election in 2018, Mr. Chaffetz has shown more interest in the Russia investigation, and held out the potential for a subpoena on Tuesday, a notably aggressive move as most Republicans have tried to stay out of the fray.

In testimony to the Senate last week, Mr. McCabe said, “There has been no effort to impede our investigation to date.” Mr. McCabe was referring to the broad investigation into possible collusion between Russia and the Trump campaign. The investigation into Mr. Flynn is separate.

A spokesman for the F.B.I. declined to comment.

Mr. Comey created similar memos — including some that are classified — about every phone call and meeting he had with the president, the two people said. It is unclear whether Mr. Comey told the Justice Department about the conversation or his memos.

Mr. Trump fired Mr. Comey last week. Trump administration officials have provided multiple, conflicting accounts of the reasoning behind Mr. Comey’s dismissal. Mr. Trump said in a television interview that one of the reasons was because he believed “this Russia thing” was a “made-up story.”

The Feb. 14 meeting took place just a day after Mr. Flynn was forced out of his job after it was revealed he had lied to Vice President Mike Pence about the nature of phone conversations he had had with the Russian ambassador to the United States.

Despite the conversation between Mr. Trump and Mr. Comey, the investigation of Mr. Flynn has proceeded. In Virginia, a federal grand jury has issued subpoenas in recent weeks for records related to Mr. Flynn. Part of the Flynn investigation is centered on his financial links to Russia and Turkey.

Mr. Comey had been in the Oval Office that day with other senior national security officials for a terrorism threat briefing. When the meeting ended, Mr. Trump told those present — including Mr. Pence and Attorney General Jeff Sessions — to leave the room except for Mr. Comey.

Alone in the Oval Office, Mr. Trump began the discussion by condemning leaks to the news media, saying that Mr. Comey should consider putting reporters in prison for publishing classified information, according to one of Mr. Comey’s associates.

Mr. Trump then turned the discussion to Mr. Flynn.

After writing up a memo that outlined the meeting, Mr. Comey shared it with senior F.B.I. officials. Mr. Comey and his aides perceived Mr. Trump’s comments as an effort to influence the investigation, but they decided that they would try to keep the conversation secret — even from the F.B.I. agents working on the Russia investigation — so the details of the conversation would not affect the investigation.

Mr. Comey was known among his closest advisers to document conversations that he believed would later be called into question, according to two former confidants, who said Mr. Comey was uncomfortable at times with his relationship with Mr. Trump.

Mr. Comey’s recollection has been bolstered in the past by F.B.I. notes. In 2007, he told Congress about a now-famous showdown with senior White House officials over the Bush administration’s warrantless wiretapping program. The White House disputed Mr. Comey’s account, but the F.B.I. director at the time, Robert S. Mueller III, kept notes that backed up Mr. Comey’s story.

The White House has repeatedly crossed lines that other administrations have been reluctant to cross when discussing politically charged criminal investigations. Mr. Trump has disparaged the continuing F.B.I. investigation as a hoax and called for an inquiry into his political rivals. His representatives have taken the unusual step of declaring no need for a special prosecutor to investigate the president’s associates.

The Oval Office meeting occurred a little over two weeks after Mr. Trump summoned Mr. Comey to the White House for a lengthy, one-on-one dinner at the residence. At that dinner, on Jan. 27, Mr. Trump asked Mr. Comey at least two times for a pledge of loyalty — which Mr. Comey declined, according to one of Mr. Comey’s associates.

In a Twitter post on Friday, Mr. Trump said that “James Comey better hope that there are no ‘tapes’ of our conversations before he starts leaking to the press!”

After the meeting, Mr. Comey’s associates did not believe there was any way to corroborate Mr. Trump’s statements. But Mr. Trump’s suggestion last week that he was keeping tapes has made them wonder whether there are tapes that back up Mr. Comey’s account.

The Jan. 27 dinner came a day after White House officials learned that Mr. Flynn had been interviewed by F.B.I. agents about his phone calls with the Russian ambassador, Sergey I. Kislyak. On Jan. 26, the acting attorney general, Sally Q. Yates, told the White House counsel about the interview, and said Mr. Flynn could be subject to blackmail by the Russians because they knew he had lied about the content of the calls.

NY Post : Hedgies raked in $11B in pay despite worst year since crash

Last year was brutal for hedge fund investors — but you wouldn’t know it from the fund managers’ paychecks.

The nation’s top 25 hedge fund honchos raked in a collective $11 billion in 2016 — down just $2 billion from a year earlier despite the industry’s worst year since the financial crisis, according to an annual survey by Institutional Investor’s Alpha magazine.

Notably absent from this year’s top 25 were Bill Ackman, whose soured bet on Valeant Pharmaceuticals lost $4 billion, and John Paulson, who racked up double-digit losses in what he called the “most challenging” year since his fund’s inception in 1994.

Still, former math professor Jim Simons managed to claim $1.6 billion in compensation, topping this year’s list, as the quantitative funds of his $42 billion Renaissance Technologies posted solid gains.

Ray Dalio, founder of Bridgewater Associates, the world’s biggest hedge fund, earned $1.4 billion, according to the survey, even though Bridgewater’s flagship fund, Pure Alpha, gained just 2.4 percent.

To be sure, last year’s pie is roughly half of the $21 billion the top 25 hedgies earned three years ago.

Nevertheless, 2016’s compensation figures are more than double what they were when the survey began in 2000, and came even though 2016 was only the third year since then that clients took more out of hedge funds than they put in.

And investors had good reason to yank $70 billion from the $3 trillion industry last year.

Despite funds relying on a “2 and 20” compensation model, in which they charge 2 percent of assets under management and 20 percent of profits, nearly half of the top 25 hedgies earned less than 10 percent for their investors in 2016.

Meanwhile, the S&P 500 gained 12 percent for investors on a dividend-adjusted basis for a fraction of the cost.

Sharing third place were John Overdeck and David Siegel, the founders of Two Sigma, who notched $750 million apiece. Appaloosa Management’s David Tepper came in fifth place with $700 million.

Elliott Management’s Paul Singer earned $590 million, landing him in seventh place.

NY Post : Colgate-Palmolive could be looking to sell

Colgate-Palmolive could be looking to sell

Colgate-Palmolive’s chief executive recently signaled he would be open to selling the company — which has grappled with sluggish demand for its toothpaste, deodorants and food products — for $100 a share, a source told The Post.

CEO Ian Cook’s stated price tag, valuing the consumer-products giant at more than $88 billion, came at a meeting with institutional investors that took place in recent weeks, a source with knowledge of the conversation said.

Rumors about possible deals have swirled of late around the New York-based conglomerate, which has struggled to increase sales of its household staples, which include Irish Spring soap and Hill’s pet food.

In particular, there has been talk that Colgate-Palmolive is being stalked by Unilever, the London-based maker of Dove soap, Axe deodorant and Hellmann’s mayonnaise.

Last Friday, the chatter even prompted a shareholder to ask Cook at the annual meeting what he would do if Unilever made an offer to buy the company.

“We as a company … build value for our share owners and all the constituents in our company,” Cook responded. “And that is what we will focus on and let the rumors and speculation take care of itself.”

Aside from the Unilever chatter, speculation has been stoked partly by the fact that activist Nelson Peltz owns a stake in Procter & Gamble, and may be looking to spark sector consolidation.

Other possible suitors include Johnson & Johnson as well as the partnership formed by billionaire Warren Buffett and Brazilian conglomerate 3G Capital, which owns Kraft Heinz.

Colgate declined to comment on what Cook told investors.

>>> What to look at today - 17th of May 2017

Dow -0.01% S&P -0.07% Nasdaq +0.33% Russell +0.05%
Top-tech names like Microsoft (MSFT 69.41, +1.37), Amazon (AMZN 966.07, +8.10), and NVIDIA(NVDA 136.81, +2.50) boosted the Nasdaq (+0.3%) to another record high on Tuesday while the Dow (unch) and the S&P 500 (-0.1%) settled just a tick below their unchanged marks. Only the top-weighted technology (+0.5%) and financials (+0.2%) sectors ended the day in positive territory.  energy sector (-0.4%) also underperformed as crude oil dropped 0.5% to $48.64/bbl following yesterday's 2.1% rally, and ahead of this afternoon's API inventory report, which will be released at 16:30 ET. Meanwhile, retailers weighed on the consumer discretionary space (-0.3%) following the latest batch of earnings reports. TJX (TJX 73.76, -3.14) and Dick's Sporting Goods (DKS 41.04, -6.53) lost 4.1% and 13.7%, respectively, in reaction to their quarterly results. US After Hours RRGB +16%, JACK +10% following earnings/guidance, GNC +5% on interim CEO insider buy disclosure.... ACXM -4.3% following earnings/guidance, AMD under pressure with ongoing Analyst Day. Asia session is in clear risk-off mode despite the mixed-flattish Wall Street trade as political risk surrounding the White House administration appears to be getting worse. In late US after-market, NY Times reported that Pres Trump asked former FBI Director Comey to shut down investigations of former NSA Flynn. S&P e-minis fell over 0.5% or 15 handles, USD/JPY slid some 70pips below 112.40, US Treasury yield was down 2.5% on safehaven US debt demand, and Gold rose 0.5% above 1,240. EUR/USD also broke above the 1.11 handle - its best level since the US elections that first triggered the now-stalled greenback surge.

Nikkei -0.62% Hang Seng -0.12% CSI -0.39% Shanghai -0.26%

Eur$ 1.1105 CNH 6.8778 CNY 6.8879 JPY 112.43 GBP 1.2933 CHF 0.9832 RUB 56.5254

S&P -0.57% EuroStoxx -0.42% FTSE -0.32% Dax -0.43% SMI -0.45%

Macro :
- Brevan Howard’s Hedge Fund Suffered $1 Billion Outflows in April
- London Office Vacancies Surge as Company Moves Leave Big Holes
- OPEC Risks Deal Fatigue as Maintaining Oil Curbs Get Tougher (1)

Keep an eye on :
- ABN NA : ABN Amro CEO Says Up to Dutch Govt to Decide on Cutting Stake
- ALFA SS : Alfa Laval CEO ‘Working Actively’ With Acquisition Pipeline: DI
- AMZN US : Amazon Said to Consider Entry Into Pharmacy; Seeks GM: CNBC
- BALN SW : Baloise Says 41.1% of Pax Anlage Shares Tendered as of April 16
- EN FP : Bouygues 1Q Net Loss EU38m Vs. Loss of EU180m
- DBK GY : Deutsche Bank’s Cox Sees ‘Very Active’ Southeast Asia ECM Market
- DB1 GY : Deutsche Boerse Plans to Expand Big Data, Digital Platform: HB
- LUX IM : Luxottica Plans to Voluntarily Delist From NYSE
- RBI AV : Raiffeisen 1Q Net Income EU220m
- RED SM : Red Electrica Refinances EU800m Loan: Expansion
- SAN SM : Santander, BBVA Said to Look Into Popular’s Books: Expansion
- SEV FP : Suez Orders Below EU15.80 Risk Missing: Terms
- STMN SW : Straumann Offering by Holder Prices at CHF541.0/Share
- TEF SM : Telefonica Deutschland Sees Roaming-Law Impact: Boersen-Zeitung
- UNICAJA IPO : Unicaja Aims to Raise EU750m With IPO by July 15: Expansion
- UNA NA : Colgate CEO Said to Be Open to Sale at $100/Share: New York Post

>>> Europe : Brokers Upgrades & Downgrades - 17th of May 2017

>>> Up
*Aeffe Raised to Outperform at MedioBanca, PT EU2.08
*Drillisch Raised to Buy at Equinet
*Hawesko Raised to Hold at Bankhaus Lampe, PT EU44
*Kingfisher Raised to Buy at HSBC, PT GBP4.40
*OMV Raised to Buy at Jefferies
*Rio Tinto Raised to Top Pick at RBC, PT 4,400p
*Yara Raised to Buy at Liberum, PT NOK400

>>> Down
*Dunelm Cut to Hold at HSBC, PT GBP6.40
*EasyJet Cut to Sell at SocGen, PT 1,050p
*Fincantieri Cut to Underweight at JPMorgan, PT EU0.67
*Halfords Cut to Hold at HSBC, PT GBP3.80
*Hellenic Petroleum Cut to Sell at Berenberg
*Hikma Cut to Underperform at Jefferies, PT 1,450p
*Lenzing Cut to Hold at Kepler Cheuvreux
*Marathon Oil Cut to Hold at Jefferies, PT $16
*Motor Oil Hellas Cut to Hold at Berenberg
*Natixis Cut to Hold at Jefferies, PT EU6.94
*N Brown Cut to Hold at HSBC, PT GBP2.80
*Ophir Energy Cut to Underperform at Jefferies, PT 75p
*Premier Oil Cut to Hold at Jefferies, PT 68p
*Soco Cut to Hold at Jefferies, PT 165p

>>> Initiation
*Auto Trader New Sell at Berenberg, PT 350p
*NEX Group Resumed Hold at Liberum, PT 638p

>>> Call
>> Stock
*CAIXABANK REMOVED FROM CONVICTION LIST AT GOLDMAN; STILL BUY
*KERRY GROUP REMOVED FROM CONVICTION LIST AT GOLDMAN; STILL BUY
*KLOECKNER ADDED TO ALPHA LIST AT BANKHAUS LAMPE
*PANDORA MEDIA REMOVED FROM GOLDMAN’S CONVICTION LIST