Opening Bell: 10.26.17

Elon Musk can't predict the future too well; neither can Morningstar; Bill Ackman will gorge himself on Chipotle till the stock reacts; German parents attempt to name kid "Lucifer;" and more.
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Elon Musk Was Wrong About Self-Driving Teslas (BBG)
When Musk was asked in January at what point Full Self Driving features would noticeably depart from Enhanced Autopilot features, he replied, via Twitter, “3 months maybe, 6 months definitely.” Nine months later, it has yet to happen. A Tesla spokesperson said last week that “while it’s taken longer than we originally expected to roll out all Enhanced Autopilot features, the feature already provides significant assistance to drivers,” and added that the company is making “rapid progress” on new updates.

CyborgElon

Uber Faces Engineers' Lawsuit Alleging Gender, Race Bias (BBG)
Uber uses a “stack ranking” system for evaluating employees, which requires supervisors to rank them from worst to best and results in inaccurate and subjective decisions about their performance, according to the complaint. “Female employees and employees of color are systematically undervalued compared to their male and white or Asian American peers because female employees and employees of color receive, on average, lower rankings despite equal or better performance,” according to the complaint.

The Morningstar Mirage (WSJ)
The Wall Street Journal tested Morningstar’s ratings by examining the performance of thousands of funds dating back to 2003, shortly after the company began its current system. Funds that earned high star ratings attracted the vast majority of investor dollars. Most of them failed to perform. Of funds awarded a coveted five-star overall rating, only 12% did well enough over the next five years to earn a top rating for that period; 10% performed so poorly they were branded with a rock-bottom one-star rating.

Ackman: All directors, shareholders 'disappointed' by Chipotle slide (Reuters) Ackman signaled that he was not worried about the safety of Chipotle’s burritos, tacos and salads, noting that he had eaten lunch at the chain on Wednesday. “The entire investment team is going to be eating Chipotle until the stock price is back at $500,” he joked.

The Wonder Drug for Aging (Made From One of the Deadliest Toxins on Earth) (Businessweek)
Scientists differ over how much of the toxin would be required to inflict massive damage. Data on the topic is scarce, and that may be intentional. But a study published in 2001 said that a single gram in crystallized form, “evenly dispersed and inhaled, would kill more than 1 million people.” Experts are divided over what it would take to effectively weaponize the toxin, but the mere possibility of a botulism bomb has the government on edge. That puts Allergan in a remarkable position. The government’s vigilance enhances the company’s own secrecy, and together they give Botox a near-monopoly that is almost unassailable.

Draghi's Day (Marc to Market)
Many observers are not convinced that the asset purchases are doing much good, but they recognize that stopping would be potentially destabilizing. The other important element, if not of greater importance, is what the asset purchases say about rising rates. The ECB has been clear that like the Fed, it will not raise interest rates until after the asset purchases are complete. The longer the asset purchases, the further out lies the first rate hike. Last month, the consensus was for a six-month extension.

Investing In The Ten Most Shorted Stocks On The Nasdaq (JB Marwood)
Investors should avoid holding the most shorted stocks in the market simply because they are the most shorted. It turns out there is often good reason why a stock has a high short interest.

A Look at SSGA's ETF Revamp (FactSet)
Anyone who is seriously considering a switch to one of the rebranded, newly cheap SPDR Portfolio funds risks losing out—on the trading floor and in the portfolio manager’s office...Whatever you do, don’t just look at the expense ratio. That could be tragically short-sighted. There’s no substitute for in-depth, bottom-up ETF due diligence.

Germany: Couple backs off plan to call baby Lucifer (AP)
A baby in Germany won’t be named Lucifer after authorities intervened. A registrar in the central city of Kassel sought clarification from the local district court after a couple sought to give their son the name. Court official Matthias Grund told news agency DPA Wednesday that the registrar suspected the name could endanger the child’s well-being.

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Opening Bell: 1.23.18

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Opening Bell: 9.29.17

Elon Musk wants to be Rocket Man; Roku IPO goes vertical; the Trump Trade is back; Thomas the Tank Engine is a cruel, repressive nightmare; and more.

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Opening Bell: 4.21.17

Goldman doing a little Brexit of its own; Deutsche Bank comes first in something; Elon Musk is OK with being a robot's house cat; and more.

By Nordenfan (Own work) [CC BY-SA 4.0], via Wikimedia Commons

Opening Bell: 9.9.16

Gundlach gets defensive; Deutsche Bank nears settlement; Investors prefer computers to traders; Judge cracks food jokes during Chipotle exec’s court appearance; and more.

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Opening Bell: 8.16.16

Investors dip toes back in Iraq; Elon Musk can't top setting lofty goals, failing to achieve them; Cops say woman repeatedly kicked boyfriend in face after he refused to have sex with her; and more.

Opening Bell: 05.23.12

Merkel Heads For Debt Showdown With Hollande At EU Summit (Bloomberg) German Chancellor Angela Merkel said she won’t shy away from disagreeing with French President Francois Hollande at the summit in Brussels over dinner at 7 p.m., the next major appointment of leaders seeking to allay concerns that Greece may quit the euro, putting Spain and Italy at risk as well. Good cooperation “doesn’t exclude differing positions,” Merkel told reporters yesterday in Chicago during a meeting of the North Atlantic Treaty Organization. “These may very well arise in the context of the European discussions.” Morgan Stanley Says It Played By Rules In Facebook’s IPO (Bloomberg) “Morgan Stanley followed the same procedures for the Facebook offering that it follows for all IPOs,” Pen Pendleton, a spokesman for the New York-based investment bank, said yesterday in an e-mailed statement. “These procedures are in compliance with all applicable regulations.” Inside Facebook's Fumbled Offering (WSJ) Interviews with more than a dozen people involved in the IPO reveal that Facebook approached its deal differently than companies typically do. Facebook CFO Ebersman kept a close grip on every important decision on the stock offering, not deferring to his bankers the way many companies do, according to the people familiar with planning...Mr. Ebersman had asked Facebook's early shareholders to fill out a form indicating how many shares they would like to sell in the IPO and at what price, and to indicate whether they would be willing to sell more if the share count was increased, the person said. When Mr. Ebersman learned from Mr. Grimes that there was outsize investor demand, he went back to those forms and reached out to early shareholders to cash out more stock, the person said. Gupta On Rajaratnam's VIP List (NYP) Jailed hedge fund manager Raj Rajaratnam deemed only a handful of people — including ex-Goldman Sachs director Rajat Gupta — important enough to disturb his trading day, Rajaratnam’s former assistant testified yesterday in Manhattan federal court. Carlyn Eisenberg, the government’s first witness in the trial of Gupta on insider-trading charges, said his name was on a “special list” of those whose calls she was to put through to her then-boss. She said it was one of those calls in September 2008 that triggered a flurry of trading activity at Rajaratnam’s Galleon Group, shortly before Goldman Sachs announced it had landed a $5 billion investment from famed investor Warren Buffett...Eisenberg recalled getting a call several years ago from a man whose voice she recognized as being on the list at the time, although she said she couldn’t identify it now as belonging to Gupta. The call, which phone records later showed came from Gupta’s McKinsey & Co. office, arrived minutes before the close of markets on Sept. 23, 2008, according to Eisenberg. The caller “said it was urgent and he needed to speak to Raj,” she told jurors. After Rajaratnam took the call, he immediately brought Galleon co-founder Gary Rosenbach into his office. When Rosenbach emerged, he began making calls, saying, “buy Goldman Sachs,” Eisenberg testified. More Finance Chiefs Willing To Pay Bribes, Global Survey Finds (Bloomberg) Fifteen percent of chief financial officers around the world are willing to make cash payments to win or retain business, according to a survey of executives interviewed by the accounting firm Ernst & Young LLP. The firm’s annual “global fraud survey” of 400 finance chiefs, interviewed from November to February, found a greater tolerance of bribery compared with the previous year, when 9 percent said they would make cash payments. Five percent of CFOs said they would misstate financial performance, while 3 percent said that the year before, according to the survey. Troubleshooter In Running To Succeed Dimon (FT) For relaxation, Matt Zames shoots things. Mostly birds. But the 41-year-old JPMorgan Chase executive does not have much free time for hunting now. He is busy mopping up his bank’s biggest mess since the financial crisis. Last week Mr Zames was appointed to replace Ina Drew as head of the bank’s chief investment office, whose London-based trading unit has wiped $30bn off its parent’s market capitalisation. “When you’re in a difficult spot you find out who you want to be in a foxhole with,” says Jamie Dimon, chief executive of JPMorgan. “Matt puts his hand up.” Barclays To Sell Entire BlackRock Stake For $5.5 Billion (Bloomberg) The lender sold about 26.2 million shares to money managers for $160 each, London-based Barclays said in a statement yesterday. Underwriters have the option to purchase an additional 2.6 million. New York-based BlackRock will buy back a further 6.38 million shares at $156.80 per share, about 8.8 percent less than the stock’s $171.91 close on May 18, the last trading day before the deal was announced. Tall Tales About Private Equity, By Steve Rattner (NYT) To be sure, some of Bain’s large leveraged buyouts — notably, Domino’s Pizza — added jobs. But Mr. Romney left Bain Capital two months after the Domino’s investment (7,900 new jobs claimed) was finalized. Aware of private equity’s reputation, Mr. Romney still trots around the country erroneously calling himself a “venture capitalist.” And in a further effort to deflect attention from the Bain Capital debate, Mr. Romney last week argued that President Obama was responsible for the loss of 100,000 jobs in the auto industry over the past three years. That’s both ridiculously false (auto industry and dealership jobs have increased by about 50,000 since January 2009) and a remarkable comment from a man who said that the companies should have been allowed to go bankrupt and that the industry would have been better off without President Obama’s involvement. Adding jobs was never Mitt Romney’s private sector agenda, and it’s appropriate to question his ability to do so. Stryker CEO Sought Nod For Romance (WSJ) Mr. MacMillan, 48 years old, was forced out partly because certain board members became bothered by his handling of a relationship with a former flight attendant for the company's corporate jets while his wife pursued a divorce, according to people familiar with the matter. What distinguishes his story from others in this well-worn genre is that, according to a person familiar with Mr. MacMillan's version of events, the CEO approached Mr. Parfet and Louise Francesconi, head of the board's governance and nominating committee, in late September seeking their approval to date the employee, Jennifer Koch. Facebook Analysts Who Shunned Herd Now Look Like Heroes (Bloomberg) The social networking site lost 19 percent through yesterday to $34.03 after opening at $42 on May 18. That’s consistent with warnings from Richard Greenfield of BTIG LLC and Brian Wieser of Pivotal Research Group LLC, who says the stock will slip as low as $30. It left five firms with bullish calls predicting an average rally of 36 percent and one, Tom Forte of Telsey Advisory Group, saying shares may rise 47 percent to $50.