>>> Weekly update

Weekly Market Update: Markets Vacillate on Executive Orders


US Stock indices dipped early in the week, as the world reacted to President Trump firing out a 90-day ban on travelers from seven Muslim-majority countries in the name of security. The poorly explained order created confusion and concern in the international and business communities and sparked protests at US airports. As the furor died down, stocks finished the week on a high after a string of generally robust economic data and action from Washington aimed at reducing regulation. On Wednesday, Congress repealed regulations on the coal industry and on Friday President Trump signed an executive order designed to scale back Dodd-Frank legislation. Higher than expected GDP helped prop up the Euro against most major currencies. Stock markets returned to rally mode late in the week, reacting positively to the latest read on the US jobs market on Friday. For the week, the S&P500 rose 0.1%, the Nasdaq added 0.1%, and the DJIA lost 0.1%.

Employers added more jobs than expected in January, but wage increases were soft and the unemployment rate rose, suggesting continued labor market slack. The disappointment on wages lessens the urgency about raising rates marginally, but investors should be prepared for warnings from officials that wages are a lagging indicator. Also, the fact that the job market is strong enough to pull people into the labor force is an indication that monetary policy remains stimulative, and that the FOMC needs to remain vigilant about staying too loose for too long. Speaking after the jobs report, FOMC voter and dove Evans noted he still expects just two rate hikes this year but could be comfortable with three, and wouldn’t rule out a move in March. Fed fund futures still suggest overall market expectations are for two hikes this year, one less than the median forecast of the FOMC.

The FOMC kept rates on hold as expected after the hike in December. The policy statement gave a slightly more upbeat assessment of the economy and showed more confidence that inflation is moving toward the Fed’s 2% target. As expected, there was no change to the Fed’s reinvestment policy, though analysts may soon begin to clamor for guidance on this issue. Chair Yellen will have a chance to mold expectations further when she testifies on Capitol Hill mid-month.

The BoE also maintained rates at current levels, with a unanimous vote 9 - 0. The central bank also upgraded GDP growth forecast but at the same time gave another warning of the dangers involved in the future Brexit negotiations. The market appeared to factor in less of a chance for a near term rate hike which led to the Pound selling off 1.3% in two days.

The UK parliament ratified a 137 word bill that gives the go ahead to PM May to trigger Article 50 of the European Union constitution and start Brexit negotiations. PM May also presented a white paper with substantially the same points mentioned in her various speeches about the meaning of Brexit, two main points being reducing immigration and boosting free trade.

Iran fired a ballistic missile in apparent violation of the UN nuclear deal reached during the last administration. The White House took swift action to sanction 13 individuals and 12 companies involved in Iran’s missile program. President Trump took to twitter on multiple occasions calling out Iran leaders and warning of further action to come. WTI crude prices finished the week only modestly higher and remain pinned in the low to mid $50's.

China and Japan took monetary action in somewhat opposite directions. The PBOC partially defended a devaluing Yuan with tightening action while the BoJ emphasized it will remain stimulative. The PBOC hiked key interest rates for open market reverse repos by 10 basis points and the Lending Facility rate was increased to 3.1% from 2.75%. In Japan the central bank intervened in the market buying 10-year bonds to drive yield to its target 0%. The Yuan continued to strengthen throughout the week despite coinciding with the Chinese New Year.

On the corporate side, a slew of earnings came down the pike this week. Under Armour shares plunged after posting weak earnings, cutting its outlook, and announcing a CFO departure. Facebook earnings delivered, but shares experienced some profit-taking, as expense growth and competition led some to begin to look past its dominant business model. UPS failed to deliver as Q4 results missed targets and it provided tepid 2017 guidance. Microsoft came to market with a 7-part bond offering, and Apple joined in, launching its own nine-part $10B deal, which may have sopped up some fixed income demand. On the M&A front, Rite-Aid slumped after the offer from Walgreens Boots Alliance was revised to $6.50-7.00 from $9.00/share. Mead Johnson surged on word of a $90/share cash bid from Reckitt Benckiser. And Macy’s jumped on another report of potential takeover, this time from Canada’s Hudson’s Bay.


MONDAY JAN 30th
(EU) EURO ZONE JAN BUSINESS CLIMATE INDICATOR: 0.77 V 0.80E; CONSUMER CONFIDENCE (FINAL): -4.7 V -4.9E
(DE) GERMANY JAN PRELIMINARY CPI M/M: -0.6% V -0.5%E; Y/Y: 1.9% V 2.0%E;(highest annual level in 3 1/2 years)
(US) DEC PCE DEFLATOR M/M: 0.2% V 0.2%E; Y/Y: 1.6% V 1.7%E
(US) DEC PERSONAL INCOME: 0.3% V 0.4%E; PERSONAL SPENDING: 0.5% V 0.5%E
(US) DEC PCE CORE M/M: 0.1% V 0.1%E; Y/Y: 1.7% V 1.7%E
(US) Atlanta Fed forecasts initial Q1 GDP growth at 2.3%
(EU) Revised Euro Zone Jan Consumer Confidence at -4.9 v -4.9e (revised from earlier reported -4.7)
(JP) BOJ LEAVES INTEREST RATE ON EXCESS RESERVES (IOER) UNCHANGED AT -0.10%, AS EXPECTED; RAISES OUTLOOK FOR PRICES

TUESDAY JAN 31st
(FR) FRANCE Q4 ADVANCE GDP Q/Q: 0.4% V 0.4%E; Y/Y: 1.1% V 1.1%E
(JP) BOJ Gov Kuroda: Reiterates that economic recovery remains on a moderate trend - post rate decision press conference
(FR) FRANCE JAN PRELIMINARY CPI M/M: -0.2% V -0.5%E; Y/Y: 1.4% V 1.1%E
(DE) GERMANY JAN UNEMPLOYMENT CHANGE: -26K V -5KE; UNEMPLOYMENT RATE: 5.9% V 6.0%E;(post-reunification record low)
(EU) EURO ZONE Q4 ADVANCE GDP Q/Q: 0.5% V 0.5%E; Y/Y: 1.8% V 1.7%E
(EU) EURO ZONE DEC UNEMPLOYMENT RATE: 9.6% V 9.8%E;(lowest level since 2009)
(EU) EURO ZONE JAN CPI ESTIMATE Y/Y: 1.8% V 1.5%E (highest since Feb 2013); CPI CORE Y/Y: 0.9% V 0.9%E
UPS Reports Q4 $1.63 v $1.68e, R$16.9B v $17.0Be
(US) Q4 EMPLOYMENT COST INDEX (ECI): 0.5% V 0.6%E
(US) JAN CHICAGO PURCHASING MANAGER: 50.3 V 55.0E;(lowest since May 2016)
(US) JAN CONSUMER CONFIDENCE: 111.8 V 112.8E
SIE.DE Reports Q1 Net €2.51B v €2.1Be; Industrial Business Profit: €2.52B v €1.99B y/y, Rev €19.1B v €18.9B y/y; Raises FY17 basic EPS €7.20-7.70 (prior €6.80-7.20)
X Reports Q4 $0.27 (ex $0.88 in charges, unclear if comp) v $0.01e, R$2.65B v $2.67Be
AAPL Reports Q1 $3.36 v $3.22e, R$78.4B v $77Be
(UK) EU Brexit Negotiator Verhofstadt: What I know is the outstanding commitments now and before Britain will leave the European Union will in total be around €600B - press (update)
(CN) CHINA JAN MANUFACTURING PMI (GOVT OFFICIAL): 51.3 (6th consecutive month of expansion, 3-month low) V 51.2E; Non-manufacturing PMI: 54.6 v 54.5 prior

WEDS FEB 1st
(HK) Macau Jan Gaming Rev MOP19.3B v MOP20.3Be; y/y: +3.1% v +8.9%e
ROG.CH Reports FY16 Core EPS CHF14.53 v CHF13.49 y/y, Core operating profit CHF18.4B v CHF17.5B y/y, Rev CHF50.6B v CHF50.7Be
(UK) JAN PMI MANUFACTURING: 55.9 V 55.9E;(6th month of expansion)
(US) JAN ADP EMPLOYMENT CHANGE: +246K V +168KE
GM Reports Jan US sales -3.8% y/y, to 195.9K units v 206.1Ke
(US) JAN FINAL MARKIT MANUFACTURING PMI: 55.0 V 55.1E
(US) JAN ISM MANUFACTURING: 56.0 V 55.0E; PRICES PAID: 69.0 V 65.5E;(Manufacturing Index highest since Nov 2014, Prices Paid highest since May 2011)
(US) DOE CRUDE: +6.5M (highest since Aug) V +3ME; GASOLINE: +3.9M V +1.5ME; DISTILLATE: +1.6M V -0.5ME
(US) Atlanta Fed raises Q1 GDP forecast to 3.4% from 2.3% on 1/30
(US) Association of American Railroads weekly rail traffic report for week ending Jan 28th: 529.7K carloads and intermodal units, +3.3% y/y
(US) FOMC HOLDS TARGET RATE RANGE AT 0.50-0.75%, AS EXPECTED; REPEATS MONETARY POLICY REMAINS ACCOMMODATIVE, INFLATION WILL RISE TO 2%
(UK) UK lawmakers vote in favor of Article 50 draft law to advance legislation to next phase - press
FB Reports Q4 $1.41 (adj) v $1.34e, R$8.81B v $8.47Be
LSTR Reports Q4 $0.94 v $0.87e, R$893M v $820Me
(AU) AUSTRALIA DEC TRADE BALANCE (A$): 3.5B V +2.0BE (record surplus)

THURS FEB 2nd
NOK1V.FI Reports Q4 adj Op €940M v €766Me, Rev €6.72B v €6.79Be
DBK.DE Reports Q4 loss Net €1.89B v loss €1.32Be, Pretax loss €2.42B v loss €1.49Be, Rev €7.07B v €6.64B y/y
DAI.DE Reports Q4 EPS €2.10 v €2.16e, EBIT €3.58B v €3.74Be, Rev €41B v €40.4Be
AZN.UK Reports Q4 Core EPS $1.21 v $1.13e, Rev $5.59B v $5.61Be
VOD.UK Reports Q3 Rev £13.7B v £14.2B y/y; Service organic Rev +1.7% v +1.5%e y/y
RDSA.NL Reports Q4 Basic CCS EPS $0.22 v $0.25 y/y, CCS earnings (ex items) $1.03B v $1.84B y/y, Rev $64.8B v $58.1B y/y
MRK Reports Q4 $0.89 v $0.88e, R$10.12 v $10.2Be
(UK) BANK OF ENGLAND (BOE) LEAVES INTEREST RATES UNCHANGED AT 0.25%; AS EXPECTED
(CZ) CZECH CENTRAL BANK (CNB) LEAVES REPURCHASE RATE UNCHANGED AT 0.05%; AS EXPECTED
(UK) BOE FEB MINUTES: VOTED 9-0 (UNANIMOUS) TO LEAVE INTEREST RATES UNCHANGED AT 0.25%
(UK) BANK OF ENGLAND (BOE) QUARTERLY INFLATION REPORT;(QIR)
(UK) BOE Gov Carney: Brexit to determine UK medium term outlook - Quarterly Inflation Report Press Conference
(US) INITIAL JOBLESS CLAIMS: 246K V 250KE; CONTINUING CLAIMS: 2.06M V 2.06ME
NYT Reports Q4 $0.30 v $0.23e, R$439.7M v $437Me
(US) Q4 PRELIMINARY NONFARM PRODUCTIVITY: 1.3% V 1.0%E; LABOR COSTS: 1.7% V 1.9%E
AMZN Reports Q4 $1.54 v $1.40e, R$43.7B v $44.9Be
V Reports Q1 $0.86 GAAP v $0.78e, R$4.46B v $4.28Be
(HK) HONG KONG JAN COMPOSITE PMI: 49.9 v 50.3 PRIOR (in contraction for 22nd out of 23 months)
(CN) CHINA JAN CAIXIN MANUFACTURING PMI: 51.0 V 51.8E (7th consecutive expansion)

FRIDAY FEB 3rd
(RU) RUSSIA CENTRAL BANK (CBR) LEAVES 1-WEEK AUCTION RATE UNCHANGED AT 10.00%; AS EXPECTED
(US) JAN UNEMPLOYMENT RATE: 4.8% V 4.7%E
(US) JAN CHANGE IN NONFARM PAYROLLS: +227K V +180KE
(US) JAN AVERAGE HOURLY EARNINGS M/M: 0.1% V 0.3%E; Y/Y: 2.5% V 2.8%E; AVERAGE WEEKLY HOURS: 34.4 V 34.3E
(US) JAN FINAL MARKIT SERVICES PMI: 55.6 V 55.1 PRELIM (highest since Nov 2015)
(US) DEC FINAL DURABLE GOODS ORDERS: -0.5% V -0.4% PRELIM; DURABLES EX TRANSPORTATION: 0.5% V 0.5% PRELIM
(US) JAN FINAL ISM NON-MANUFACTURING COMPOSITE: 56.5 V 57.0E
M Reportedly Hudson's Bay makes takeover approach - press
(US) Fed's Evans (dove, voter): expects 2 rate hikes this year, could be comfortable with 3 rate hikes in 2017 - Q&A with reporters

>>> US Close Dow +0.94% S&P+0.73% Nasdaq +0.54% Russell +1.50%

Closing Market Summary: Stock Market Finishes the Week Strong

Friday's economic data gave investors the confidence to finally break the week's sideways trend and push the stock market higher. The major averages hit their session highs within an hour of the opening bell and maintained said levels into the close. The S&P 500 finished with a gain of 0.7%, while the Dow (+0.9%) did modestly better and the Nasdaq (+0.5%) did slightly worse.

The Employment Situation Report for January came in just right; strong enough to keep participants thinking good things about the economy, but not strong enough to convince the market that the Fed is now going to be in a hurry to raise the fed funds rate. The above-consensus 227,000 nonfarm payroll additions (consensus 170,000) and the lower than expected 0.1% increase in average hourly earnings (consensus +0.3%) were the two main metrics driving the optimistic sentiment.

U.S. Treasuries ticked up following the report's release, but squandered all of those gains in the afternoon following comments from the Federal Reserve Bank of San Francisco President John Williams. Mr. Williams reiterated the Fed's expectation of three rate hikes in 2017, but more notably, he expressed his belief that a rate hike in March is on the table. His comments were consistent with remarks made by Chicago Fed President Charles Evans, who said he would be comfortable with three hikes in 2017. Mr. Evans is a voting FOMC member this year while Mr. Williams is an alternate FOMC member.

Treasuries fell back to their flat lines in the wake of the comments from the two policymakers. The 2-yr yield, which is most susceptible to FOMC rate decisions, closed the day one basis point lower at 1.20% after posting a session low at 1.17%. The benchmark 10-yr yield ended flat at 2.48%.

Financials (+2.0%) provided strong sector leadership, leading Friday's session from the open to the close. The sector's tenacity took root before the market even opened after The Wall Street Journal reported that President Trump would reduce regulatory burdens on the financial sector through an executive order aimed at scaling back the Dodd-Frank Act and reversing the Fiduciary Rule. Mr. Trump did just that following a White House meeting with business executives led by Blackstone's (BX 30.74, -0.05) Steve Schwarzman.

At the opposite end of the day's leaderboard, consumer discretionary (-0.1%) was the only sector to finish the day lower. The space took several shots from the likes of Chipotle (CMG 404.08, -19.22), Hanesbrands (HBI 18.98, -3.73), and AutoNation (AN 49.77, -2.00) after investors reacted negatively to the latest earnings reports from the three companies.

The discretionary sector could not climb out of the red as top component Amazon (AMZN 810.20, -29.75) weighed. The internet retail giant retreated 3.5% after reporting worse than expected revenues, coupled with disappointing guidance on Thursday evening. 

Technology (+0.7%) finished the day in line with the benchmark index. Visa (V 86.08, +3.78) was the sector's top performer thanks to better than expected earnings and revenue. However, lackluster performances from large-cap components like Apple (AAPL 129.08, +0.55), Facebook (FB 130.98, +0.14), and Alphabet (GOOGL 820.13, +1.87) held the sector's gains in check.

On the countercyclical side, the health care, consumer staples, telecom services, and real estate sectors gained between 0.4% and 0.6%, while utilities (+0.1%) closed just a step behind.

Defensive spaces dominated the week with four of the five logging weekly gains. Comparatively, the financial (+0.2%) and technology (unch) sectors were the only cyclical groups to close the week higher.

Today's economic data included January Employment Situation Report, January ISM Services, and December Factory Orders:

  • January Employment Situation Report
    • January nonfarm payrolls came in at 227,000 while the consensus expected a reading of 170,000. The prior month's reading was revised to 157,000 from 156,000. Nonfarm private payrolls added 237,000 while the consensus expected an increase of 175,000. The unemployment rate increased to 4.8% (consensus 4.7%).
    • Average hourly earnings increased 0.1% (consensus +0.3%), while the previous month's reading was revised to 0.2% (from 0.4%). The average workweek was reported at 34.4 while the consensus expected a reading of 34.3. The previous month's reading was revised to 34.4 (from 34.3).
    • The key takeaway is that this is one of those so-called "Goldilocks" reports since it is strong enough to keep participants thinking good things about the economy, but not strong enough to convince the market to think it means the Fed is now going to be in a hurry to raise the fed funds rate. The tempered growth in average hourly earnings, which dialed back year-over-year growth to 2.5% from 2.8% in December, is the focal point as it relates to the market's perspective on the Fed.
  • The ISM Services Index for January decreased to 56.5 while the consensus expected a downtick to 57.0. The prior month's reading was revised down to 56.6 from 57.2.
    • The key takeaway from the report is that growth in the services sector, which accounts for a much bigger slice of economic activity than the manufacturing sector does, persisted for the 85th straight month.
  • The Factory Orders Report for December showed an increase of 1.3% while the consensus expected a increase of 1.4%. The November reading was revised up to -2.3% from -2.4%.
    • The key takeaway from the report is that the December increase was led entirely by orders for nondurable goods (+3.1%). Paced by a 2.5% decline in transportation equipment orders, durable goods orders fell 0.5% in December.

Investors will not receive any economic data on Monday.

  • Nasdaq Composite +5.3% YTD
  • S&P 500 +2.6% YTD
  • Dow Jones Industrial Average +1.6% YTD
  • Russell 2000 +1.5% YTD

WSJ : Saks Owner Hudson’s Bay Makes Takeover Approach to Macy’s

Saks Owner Hudson’s Bay Makes Takeover Approach to Macy’s
Talks are in the early stages and may not lead to a deal

Canada’s Hudson’s Bay Co. has approached Macy’s Inc. about a takeover, people familiar with the matter said, as the biggest U.S. department-store chain grapples with disappointing results and restive shareholders.

Talks between the companies are at a preliminary stage and also encompass other ways they could cooperate, one of the people said, adding that a deal for Macy’s real estate is also a possibility. Other details of the talks are unclear and it is far from guaranteed there will be any deal.

Shares of Macy’s jumped 7.4% to $33 in morning trading.

Hudson’s Bay is an acquisition-hungry owner of marquee names in retail including Lord & Taylor department stores and Saks Fifth Avenue. While its market value is dwarfed by that of Macy’s—$1.8 billion compared with $9.8 billion as of Friday morning—Hudson’s Bay could raise equity and debt against its real estate portfolio, which could be worth $14 billion, one of the people said. It could also bring in a partner.


But complicating a takeover, Macy’s is saddled with about $7.5 billion in debt.

Macy’s has struggled in recent years amid increasing competition from upstarts and as shopping habits change and consumers buy more over the internet. Its stock has fallen more than 50% from the highest level it reached in 2015. In January, Macy’s said it would slash more than 10,000 jobs and detailed plans to close dozens of stores after another weak holiday-sales season. It is facing mounting investor pressure to turn around its performance and reverse the stock drop. Starboard Value LP took a stake and called on Macy’s to hive off its valuable real estate, which the activist investor says is worth more than $20 billion. Macy’s later added a Starboard ally to its board.


Macy’s in June said its longtime chief executive, Terry Lundgren, would step down later this year and hand the reins to one of his top lieutenants, current President Jeff Gennette.

Hudson’s Bay views Macy’s as a healthy company with good cash flow that just needs to invest more in its business, one of the people said. Hudson’s Bay is also considering potential deals with other companies, this person said.

As of January, Macy’s operated more than 800 stores. In addition to its flagship Macy’s stores, the Cincinnati company owns upscale department-store chain Bloomingdale’s. Its recent travails mark a change in fortune for Macy’s, which once was a dominant player in retail that gobbled up competitors through a series of acquisitions.

In 2005, Mr. Lundgren orchestrated the merger of the two biggest chains, Federated Department Stores Inc. and May Department Stores Co., creating a national retail giant that today is the largest U.S. department-store chain.


Macy’s was one of the brands owned by Federated, and the whole company was renamed Macy’s in 2007 as Mr. Lundgren eliminated regional brands like Burdines, Filene’s and Marshall Field’s.

But the retail sector has been pressured in recent years by a change in consumer habits. Department stores have been slow to adapt to a shift toward online shopping, buying goods from Amazon.com Inc. and so-called fast-fashion chains such as Zara and Hennes & Mauritz AB. Declining foot traffic in shopping malls as well as the ability for consumers to compare prices online before buying products has hurt department stores.

At the same time, a bifurcation in shopping habits toward the highest and lowest ends has been bad for retailers like Macy’s that cater to midrange customers.

In July 2015, Starboard made a public presentation that said the stock market wasn’t properly valuing the real-estate assets inside Macy’s. The activist, which held a 1% stake as of the end of September, said the property was worth $21 billion, including $4 billion alone for the flagship Herald Square store on 34th Street in Manhattan. It said the entire company was worth $33.7 billion, roughly double the price at the time, but the stock has plunged nearly 60% since then.

Last January, Starboard reiterated its case and said Macy’s could structure a joint venture, similar to the one Hudson’s Bay struck with Saks Fifth Avenue’s flagship Manhattan property—by partnering with a real-estate investment firm.

Macy’s has been selling some stores piecemeal, and recently formed a joint venture with Brookfield Asset Management that could enable 50 or more stores to be fully or partially redeveloped. But the company has resisted a traditional sale-lease back of its real estate portfolio—as Starboard and others have advocated, saying the move wouldn’t be in its long-term interest.

Macy’s had humble beginnings, starting as a dry goods store by Rowland Hussey Macy on the corner of 14th Street and Sixth Avenue in Manhattan in 1858. Over time, the store grew into a full-fledged department store, and in 1902 it opened its Herald Square location, according to the company’s website. After going public in 1922, it began to acquire other department stores. In 1994, Federated Department Stores acquired R.H. Macy & Co.

Hudson’s Bay Chairman Richard Baker has made a habit of unearthing hidden value in the real estate of retail chains he has acquired.

A year after the Canadian company bought Saks Fifth Avenue in 2013, its flagship store on Fifth Avenue was appraised for $3.7 billion—more than the $2.9 billion Hudson’s Bay spent to acquire the entire chain.

Hudson’s Bay has also formed joint ventures with mall owners and property developers aimed at showing shareholders the value of its real estate without selling it off.

In a 2015 interview with The Wall Street Journal, Mr. Baker said many retailers aren’t properly valued by the market because investors don’t fully understand the real estate they hold.

>>> ITV takeover rumours may be premature - bankers

ITV takeover rumours may be premature - bankers

Speculation ITV [LON:ITV] could be acquired by contract-TV providers could take several years to prove true, sector bankers and a source following the situation said.
ITV is seen as open to a sale, the source, a banker and a sector consultant said. ITV has spoken to US networks, such as Discovery [NASDAQ:DISCA], Viacom [NASDAQ:VIAB], NBC Universal about a sale, the banker said. ITV does not comment on speculation, a spokesperson said.
ITV is reaching the limits of its growth in TV production, the consultant and banker said. The acquisition of E.One [LON:ETO] would have helped. ITV withdrew an offer to acquire the production company last year.
But, rumours the UK broadcaster could be acquired by Amazon [NASDAQ:AMZN], Netflix [NASDAQ:NFLX] or Apple [NASDAQ:AAPL] do not make much sense, bankers said. There is a lack of strategic rationale in combining pay-TV and free-to-air channels, they said.
The growing importance of bringing content "in-house" may create an environment for such mergers and acquisitions to take place, but this is not expected in Europe for a few years, the bankers said. ITV’s content undoubtedly makes it an eventual target, but nothing is expected in the short term, the source agreed.
ITV’s content production arm is smaller than its channel platform, a second banker said. Netflix, Amazon and Apple are more interested in content than the platform, the bankers pointed out.
The rumoured bidders could just decide to invest more in their own content production and not expose themselves to the TV ad market, bankers said.
The economic uncertainty Brexit created is expected to result in a drop in TV ad revenues, an analyst said. Bidders would likely want to see the market stabilise before buying ITV, he added.
Liberty Global [NASDAQ:LBTYA], which owns just under 10% of ITV, could be waiting for the right environment – and for it to become financially viable – to acquire the company, bankers said. Equally it may only make a decision on its commitment to ITV if and when a bid is made by a third party, they said.
Liberty faces similar issues to the other pay-TV providers in that it would prefer to acquire contract-bound customers rather than a free-to-air audience, the bankers said. However, Liberty could grow its pay TV audience by advertising its content on ITV, the source said.
Liberty could also get efficiency savings by combining its UK asset Virgin Media with ITV, the first banker said.
Liberty’s investment in ITV has been seen as a blocking stake almost as much as a strategic one, the bankers said.
Companies who were once thought likely alternative bidders for ITV are currently out of the running, the bankers said. BT Group [LON:BT.A] suffered a huge share price drop last week when the extent of accounting troubles in Italy came to light, while Sky [LON:SKY] is pre-occupied with its sale to 21st Century Fox [NASDAQ:FOX], the bankers noted.
Once BT recovers it would be a contender again, and could do the deal using shares or by using the equity market, the bankers said.

Reuters - Europe without Merkel? Investors think through another 'surprise' - Re

Europe without Merkel? Investors think through another 'surprise' - Reuters News
03-Feb-2017 15:26:22
  • Polls show SPD's Schulz pulling closer to Merkel
  • Investors used to Merkel's generally steady hand
  • Change in chancellor could loosen German purse strings
  • Uncertainty already reflected in currency options markets
By Marc Jones and Paul Carrel
LONDON/BERLIN, Feb 3 (Reuters) - A serious challenger to German Chancellor Angela Merkel is forcing global investors to parse another potential electoral surprise - removal of a key political constant through years of euro zone turbulence but also an end to Europe's austerity bias.
Martin Schulz's appointment as the Social Democrats' (SPD) candidate to run against Merkel has energised Germany's September election race and those in his party daring to think they could unseat her.
He remains the underdog, but polls show him pulling closer by the day. One published on Thursday gave just a six point gap between Merkel's alliance and the SPD. It said Schulz far outstripped her in one-on-one popularity. (Full Story)
That is an unnerving prospect for some investors now accustomed to Merkel's generally steady handling of Europe's rolling crises that has contributed to triple-digit gains from German stocks .GDAXI to Portuguese bonds. PT10YT=TWEB
Just a few weeks ago, Larry Fink, head of the world's biggest asset manager BlackRock, praised "the moral leadership Chancellor Merkel and Germany have played in an increasingly discordant world," adding that he hoped it would continue.
Schulz, a former European Parliament president, though, is looking to shake things up.
Having seen his party wither during its time as the junior partner in a 'grand coalition' with Merkel's conservative alliance, he is vowing to fight for fairer tax rules, higher wages, better education and to overcome the "deep divisions" that have fuelled populism. (Full Story) (Full Story)
Financial markets will see that as a nod to loosening the fiscal purse strings - no problem for a major economy with a large surplus (Full Story) and probably good for European stocks, although not so great for bonds if it fuels inflation.
One lesson for investors from 2016 was that political shocks from the U.S. election of Donald Trump and Britain's vote to leave the EU did not crash markets. In part that's because growth-friendly fiscal policies have come to the fore, away from an over-reliance on maxed out monetary policy.
A change in Germany could also help ease international strains about its budget and trade surpluses that surfaced again this week when Donald Trump's trade advisor lashed out at the boost German exporters gets from a "grossly undervalued" euro. (Full Story)
Another question for international investors will be what happens to Wolfgang Schaeuble's tough stance on financial aid for Greece if the veteran finance minister is replaced.
They will want to know if Schulz could end the push for austerity in Europe and take aim at the European Central Bank's money printing programme and the sub-zero interest rates that have been crushing German savers.
"If you read between the lines, the Merkel administration has been very supportive of the ECB's actions," said Tim Barker, Head of Credit at Old Mutual Global Investors.
"Were she not to be in power, would that support remain? We don't know the answer."

EUROPEAN DNA
Schulz is unsurprisingly pro European.
He told Der Spiegel magazine in 2012 the introduction of common 'euro bonds' across the single currency bloc would be the best way to reduce the interest burden on indebted countries in the south, though he said this was "a theoretical debate" as northern countries didn't want them.
Greek, Italian, Spanish and Portuguese bonds have all been underperforming this year on nervousness about ECB policy and rising anti-euro sentiment several countries including France. JP Morgan Asset Management's Tilmann Galler said with "European DNA running through his political career," Schulz might be the antidote.
Any rally could easily reverse if it opened the government borrowing spigot again in peripheral euro zone countries.
"All things being equal austerity equals fiscal discipline, so if you reverse that, does that open the floodgates of supply?" said Old Mutual's Barker.
"You have to reassess you starting point for valuation. It could potentially be quite damaging."
The euro could swing too if Germany does start spending. The government has faced international pressure for years - including from the IMF and OECD - to boost economic demand at home to balance its exports. It had a record trade surplus of almost a quarter of a trillion euros ($264.10 billion) last year.
POSSIBLE ALLIANCES
Despite the SPD's excitement about Schulz, his chances of toppling Merkel are still seen as slim.
Though popularity polls have him pulling neck-and-neck, or even beating Merkel, personal ratings don't necessarily count for much as Germany does not have a presidential-style system.
A more significant measure of party support still shows Merkel's conservatives ahead on 34 percent, with the SPD trailing on 28 percent. (Full Story)
The gap means that to clinch power, Schulz would need to team up with two smaller parties - the environmentalist Greens and the leftist Linke - exploratory talks have been held. (Full Story)
The prospect of a heavily left alliance is already alarming some conservatives, even if it is a long shot.
"It would endanger everything we have achieved," said Michael Frieser, a member of parliament for the Christian Social Union (CSU), Merkel's conservative Bavarian allies.
For market players the unknowns all breed caution.
If Schulz became chancellor and signals a spending drive, German Bunds are likely to underperform their euro zone peers said JP Morgan AM's Galler, though the bond market selling would broaden if the ECB makes a quick move to wind down its aid.
The uncertainty is already being reflected in currency options markets. Traders have been taking out some bets on euro volatilityEUR6MO=, EUR9MO= around the Sept. 24 election, although that is also when analysts expect the ECB to announce the next scale down in its bond buying.
Analysts in UBS's Chief Investment Office expect the euro to be at $1.20 in 12 months time once the dust has settled though it could be a bumpy ride if Schulz does win.
"It would be an enormous shock to markets and the political order of the eurozone," said Sassan Ghahramani, CEO of U.S.-based SGH Macro Advisors which advises hedge funds.

Manager Magazin : union bosses see timetable for Linde Praxair- Fusion in danger

union bosses see timetable for Linde Praxair fusion in danger


Linde and Praxair want to merge. However, trade union heads Jörg Hofmann and Michael Vassiliadis consider the schedule of the merger to be at risk. Reason is the insider allegations at Linde.

With reference to the BaFin investigation on suspicion of insider trading in connection with the planned Linde Praxair fusion hold high-ranking functionaries workers the schedule of the concentration risk and require a rapid clarification of the allegations. At the request of manager magazin, the chairmen of the industrial trade unions represented at Linde, Jörg Hofmann (IG Metall) and Michael Vassiliadis (IG BCE), referred to the potential insider misconduct at Linde.

The current schedule for the planned merger, said Metaller Hofmann, must be "questioned". He understands that "much uncertainty" arises when the media reports on insider trading of those "who have the name and function for the merger."

Vassiliadis explains: "The allegation of insider trading naturally strains the intended merger." All the more important is a "quick clarification".

When the plans for a merger between the Munich-based gaseous group and its US competitor Praxair were officially confirmed for the first time in mid-August, and the Linde share thereupon rose sharply, the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht) initially routinely checked the purchase of securities. Meanwhile, she has launched a formal investigation into the insider's suspicions against current and former Linde managers.

The BaFin does not mention any names, but among other things it should, as the SPIEGEL reported in mid-January to act supervisory board chairman Wolfgang Reitzle. According to manager magazin, Reitzle had told the board that he was legally protected.

The first start of the merger failed, in December the companies agreed on the cornerstones of a merger. The conclusion of the alliance negotiations, the so-called Business Combination Agreement, is planned for May, after which the companies would have 15 months to the final closing.

>>> Celanese sees 'more to come from M&A'

Celanese sees 'more to come from M&A'
STRATEGIC SNAPSHOT03 FEB 2017
Celanese [NYSE:CE], the Irving, Texas-based provider of materials to the chemicals, paints and coatings industries, anticipates more acquisitions following its recent agreements to buy nylon-focused assets, according to CEO Mark Rohr.
On the 4Q16 earnings call held 1 February, Morgan Stanley analyst Vincent Andrews asked if the company’s latest acquisition, Nilit’s plastics division, represented the extent of Celanese’s interest in nylon or if the was more to come.
“There's more to come from M&A in general,” the CEO replied, noting that the company had started by focusing on nylon as it was the fastest growing component in some markets due to its high-temperature applications. “So, could we do more, yes. Will we do more acquisitions, heck, yes [to] that.”
Rohr added Celanese was looking for technology and market access, rather than being focused on the size of the target's offering.
Asked if the most recent nylon buy placed the company where it wanted to be in terms of size, scale and scope, EVP and President, Materials Solutions Scott Sutton said it had not yet reached its targets.
“We did some organic work. We acquired SO.F.TER. (Group) that had a nylon business. Nilit has a higher value nylon business. Now we're pulling all that together and there's probably one more step to go,” Sutton said.
Later on the call, KeyBanc's Michael Sison asked in which areas Celanese would focus its M&A efforts.
“It is our intention to continue to continue to add bolt-on acquisitions,” CEO Rohr said, defining these as deals that could be quickly assimilated and were of a reasonable size and scope. “There are a lot of things we're looking at, but I'll ... not say exactly what they are.”
Asked if Celanese would consider a joint venture with a nylon producer, Rohr said the company would if it made sense. He added while Celanese was comfortable with its current position, having access to specialty nylons could be attractive.
Celanese organizes its products into six segments: Engineered Materials, Cellulose Derivatives, Intermediate Chemistry, Food Ingredients, EVA Polymers and Emulsion Polymers.
The company announced Wednesday its agreement to buy Nilit Plastics, the nylon compounding division of Israel-based nylon polyamide fibers manufacturer and thermoplastics engineer Nilit, for an estimated cash consideration of around USD 233m.
In October last year, Celanese agreed to acquire Italy-based thermoplastic compounder SO.F.TER. for an undisclosed sum.
Celanese used Italy-based Chiomenti for the latter deal, along with O’Melveny & Myers, and Germany- and Brazil-based law firms. Legal advisors used in previous years include Bingham McCutchen and Freshfields Bruckhaus Deringer, while Germany's Hengeler Mueller has been used multiple times in the past. Financial advisory is typically handled in-house on the buy side.
Celanese ended 2016 with cash of around USD 600m. The company has a market capitalization of USD 12.8bn.

Fwd:>>> Gopro : Bet on a drone as they are so late compare to competition!!!

GPRO -15%...

From: LAURENT CHEKROUN (MAKOR SECURITIES LO) At: 02/02/17 10:43:45
Subject: Fwd:>>> Gopro : Bet on a drone as they are so late compare to competition!!!
jsut compare DJI drones & Gopro...and you will understand that there is nothing to play...


Recode - GoPro’s future is now tied to the revival of its Karma drone — the one that fell out of the sky last year
After a year of job cuts and shuttering its entertainment division, the drone relaunch may not be enough.

GoPro is relaunching its Karma drone today, three months after the company recalled the aircraft following reports that some units suffered a power failure during flight and fell from the sky.

The drone is now on sale — again. GoPro says that the power failure on its original, recalled model was due to a problem with a latch that secured its battery, a problem the company says has been resolved in the latest version of the drone.

The Karma is a foldable drone designed to mount a GoPro camera. When it was announced last fall, the drone was poised to rival DJI’s foldable drone, the Mavic Pro. But less than a month after the Karma first hit the market in October last year, all GoPro drones were recalled. Customers were issued a full refund.

2016 wasn’t a great year for the sporty camera company. The company reported in November it was cutting 200 jobs and that Tony Bates, the president of GoPro since June 2014, would step down. Before GoPro, Bates served as the CEO of Skype.

GoPro also shared last November that it was cutting its entertainment division after reporting its shares lost half their value in 2016.

Now GoPro is hoping (again) that it can revive sales with its Karma drone. Even if the drone does fly as intended this time, recovering from a total recall due to a dangerous power malfunction isn’t an easy lift. The Karma costs $800 without a GoPro camera and $1,100 with the camera.

DJI’s rival, the Mavic Pro drone, folds even smaller than the Karma and can fit in a backpack. The Karma requires its own carrying case — not ideal if you’re on a hike or some kind of outdoor adventure.

On Thursday, GoPro is expected to share its earnings from its latest quarter.

Here’s the company’s latest video of its drone.