Investors opt for the ‘do nothing’ trade ahead of US election [FT]
Many investors are mindful that they failed to predict the shock victory of Donald Trump in 2016 — which triggered market convulsions on the night — as well as the longer-term equities rally that was stoked by his administration’s corporate tax cuts. Other surprises, such as the rise and then historic drop in sterling on the Brexit referendum night earlier that year, have left some investors preferring to just sit back and wait for the result.
“We’re an asset manager. We’re not bandits or gamblers,” said Vincent Mortier, chief investment officer at Amundi.

Moody’s Downgrades U.K. Banks [WSJ]
The credit-rating firm reduced the long-term issuer ratings of the U.K. units of HSBC Holdings PLC, Lloyds Banking Group PLC and Banco Santander SA one notch to A1 with stable outlook from Aa3….
Moody’s cut the U.K. sovereign debt rating last week one notch to Aa3 with a stable outlook citing the nation’s weakening economic and fiscal strength…. The cut in the sovereign debt rating affects the ratings of banks because it may reduce the government’s ability to support lenders in case of need, Moody’s said Tuesday.

Leveraged Buyouts Come Roaring Back After Coronavirus-Related Lull [WSJ]
Buyout firms spent the bulk of the second quarter battened down as they assessed the economic damage of the shutdown on the companies they own…. That trend reversed itself in the three months ended Sept. 30 as firms struck $146 billion of new deals globally, up from a feeble $53.3 billion in the second quarter and $103.8 billion in the third quarter of 2019, according to Dealogic. In the opening weeks of the fourth quarter, $17.4 billion of buyouts have already been announced….
Despite the rebound, the first nine months of 2020 have had the lowest buyout volume since 2016…. And there is still plenty of uncertainty around the outcome of the U.S. presidential election and the pace of the economic recovery.

Fed’s Quarles Says Market Turmoil Triggered by Covid-19 Revealed Fragile Nonbank System [WSJ]
“We know already that work needs to be done to improve the resiliency of money market funds before the vulnerabilities in these funds amplify another shock,” Mr. Quarles said Tuesday in the text of his speech to the Securities Industry and Financial Markets Association. “This will require careful consideration of financial stability, investor protection, and efficiency objectives alongside an understanding of the benefits of money market funds that should be preserved.”

JPMorgan Chase takes on Square and PayPal with smartphone card reader, faster deposits for merchants [CNBC]
The bank is rolling out a checking account that is paired with a new fintech-inspired service called QuickAccept…. QuickAccept lets merchants take card payments within minutes, either through a mobile app or a contactless card reader, and users will see sales hit their Chase business accounts on the same day.
That fast funding is offered free, unlike competitors including Square, which typically take a day or more and charge a 1.5% fee to make instant transfers.

JCPenney CEO says company expects to exit Chapter 11 ahead of holiday season [CNBC]
The deal is still subject to court approval and other conditions. A hearing is set for early November, the company said.

Related

chinese flag

Opening Bell: 10.4.21

Evergrande grinds to a halt; Schrödinger’s digital media company; Jamie Dimon wants a f**cking standing O; and more!

DeliciousCoffee

Opening Bell: 9.8.16

Wells Fargo is in trouble; ECB stands pat; Wall Street vs Trump; Felon named Coffee charged with coffee attack on fellow inmate; and more.

(Getty Images)

Opening Bell: 8.17.17

Jamie Dimon makes bold stand against Nazis; Steve Bannon (accidentally?) grants lengthy interview on America First trade policy; Ackman uses protection; the perils of butt-dialing; and more.

toast

Opening Bell: 9.22.21

Waiting for Jay Powell; Toast pops; Jamie Dimon’s shopping spree; pre-nup-less Paulson files for divorce; and more!

By Steve Jurvetson (Flickr: Jamie Dimon, CEO of JPMorgan Chase) [CC BY 2.0], via Wikimedia Commons

Opening Bell: 6.15.21

Inflation spikes along with Jamie Dimon’s cash pile; no bonds for you; investing in oneself; and more!

biden

Opening Bell: 1.15.21

TWO TRILLION DOLLARS; RenTech founder retires; black edge comes to Florida; London’s lamentations; and more!

Opening Bell: 04.09.13

KPMG Fires L.A. Partner Over Alleged Insider-Trading Tips (WSJ) KPMG LLP has fired a senior partner in its Los Angeles office, saying the unidentified partner had provided inside information about its clients to someone who had used that information in stock trading. In a statement late Monday night, the Big Four accounting firm also said it had resigned as the outside auditor of two of its clients because of the actions of the partner, who it described as the partner in charge of its audit practice in its Los Angeles business unit. KPMG said the partner "was involved in providing nonpublic client information to a third party, who then used that information in stock trades involving several West Coast companies." The firm didn't identify the third party or any of the companies involved. KPMG Said to Resign as Herbalife’s Auditor Over Investigation (Dealbook) Herbalife is poised to disclose on Tuesday that KPMG will have to resign as the company’s auditor, after the accounting firm fired a senior partner, according to a person briefed on the matter. JPMorgan Leads Job Cuts as Banks Seek to Bolster Profit (Bloomberg) Even after the industry posted its best results since 2006, the six largest U.S. banks announced plans in the first three months of this year to eliminate about 21,000 positions, or 1.8 percent of their combined workforce, according to data compiled by Bloomberg. That’s the most since 2011’s third quarter. JPMorgan Chase, whose 259,000 people produced three straight years of record profit, topped the list with 17,000 reductions scheduled by the end of 2014. Fed Warned To Reign In QE (FT) Rick Rieder, who oversees $763 billion in fixed income investments for BlackRock, spoke out as the Fed debates how long to persist with the unorthodox measures it has used to stimulate the U.S. economy. His comments add BlackRock to the growing list of Fed critics who are warning of trouble ahead for the bond market. Fitch Cuts China Debt Rating (WSJ) The credit-rating firm Tuesday lowered China's long-term local currency rating to A-plus from AA-minus, with a stable outlook. It kept the foreign-currency rating unchanged at A+, saying it is well supported by China's massive foreign exchange reserves, worth $3.387 trillion at the end of 2012. KKR, Others In Mega-Deal (NYP) Private-equity titans Henry Kravis and Steven Schwarzman are teaming up on what is likely the biggest leveraged buyout in several years. KKR has joined an investor group of Blackstone, Carlyle, TPG Capital and Temasek to bid more than $12 billion for Life Technologies, a source said. SeaWorld IPO Could Raise $621 Million (Deal Journal) SeaWorld Entertainment plans to sell 10 million shares and Blackstone Group plans to sell the other 10 million, giving each up to $270 million a piece. Following the sale, Blackstone will continue to be the company’s majority shareholder, and would hold about 70.5% of the stock if the underwriter’s sold their full option. Trip to Cuba by Beyoncé and Jay-Z Is Investigated (NYT) The United States Treasury Department has begun investigating whether Jay-Z and Beyoncé — music’s royal couple — violated the trade embargo against Cuba by traveling to the island two weeks ago during their wedding anniversary, according to officials and a person who helped arrange their visit...Questions about the megastars’ trip have been swirling for days, with some Cuban exile bloggers describing the trip as a propaganda mission “carefully planned and controlled by the Castro dictatorship.” Putin Squeezing Out UBS to Deutsche Bank Using Oligarchs (Bloomberg) OAO Sberbank, Russias’s biggest lender, and VTB Group have increased investment-banking fee income more than fivefold since 2005, according to data compiled by Freeman & Co., a New York-based consulting firm. European financial institutions including UBS, Deutsche Bank and Royal Bank of Scotland lost almost half their market share during the period. EU Launches Probe Into MasterCard (WSJ) The European Union has opened an antitrust investigation into MasterCard, following concerns that some of the credit-card company's interbank fees are anticompetitive. Citigroup To Cut Senior Posts In Streamlining (WSJ) Under Mr. Forese's plan, there no longer will be a head of securities and banking, a post that Mr. Forese had held until his elevation to his new position. Also expected to go is the head of transaction services, currently occupied by Francesco Vanni d'Archirafi. Clarence man with frog phobia wins $1.6 million verdict (Buffalo News) “I’m petrified of the little creatures,” said Marinaccio, 65. If that sounds bizarre or far-fetched, consider one of Marinaccio’s childhood memories. He traces his deep-seated fear of frogs to when he was a child in an Italian vineyard, where his parents worked. He remembers wandering to a nearby property for figs and being chased away by a man holding bullfrogs. Decades later, frogs again have Marinaccio on the run. In the spring and summer months, they show up on his driveway and lawn – keeping him inside his home. Marinaccio sued the Town of Clarence and the developer of a nearby subdivision for diverting runoff onto his land and won a $1.6 million award...Neither side knows for sure how Marinaccio’s frog phobia affected the case. But jurors who returned the verdict in his favor heard his startling testimony on the witness stand in 2009. “You people don’t understand,” Marinaccio said in court. “I am petrified. I go home at night, and I can’t get in my garage because of the frogs. They’re right in front of the damn door, OK?” He talked about how he had to call his grown daughter, who lives a few miles away, two or three nights a week to come over and shoo away the frogs. “In the winter, it’s OK, because I know there’s no frogs,” he said. “But in the summertime, I mean I’m a damn prisoner in my own home.”

Opening Bell: 12.17.12

SAC E-Mails Show Steve Cohen Consulted on Key Dell Trade (Bloomberg) Two days before Dell Inc. was set to report second-quarter 2008 earnings, Jon Horvath, a technology analyst at SAC Capital Advisors LP, e-mailed his boss Michael S. Steinberg and another portfolio manager to warn that the computer maker would miss earnings estimates. “I have a 2nd hand read from someone at the company,” Horvath began the Aug. 26 message, which provided details on gross margins, expenditures and revenue. “Please keep to yourself as obviously not well known.” Steinberg, a 15-year veteran of the hedge fund founded by billionaire Steven A. Cohen, responded: “Yes normally we would never divulge data like this, so please be discreet. Thanks.” The e-mails indicate Steinberg, the longest-serving SAC employee linked to the U.S. insider-trading probe, discussed the Dell trade with Cohen. While neither has been accused of any wrongdoing, the messages were admitted as evidence at the New York insider-trading trial of two hedge-fund managers last week after a judge ruled they supported prosecutor claims that Steinberg should be considered an unindicted co-conspirator. AIG To Sell Life Insurer Stake (WSJ) AIG will sell its stake in Asian life insurer AIA Group Ltd., raising as much as $6.5 billion in what could be the second-largest deal in Asia this year. Completion of the sale will mark another step forward for AIG, which is shedding noncore assets, as it seeks to repay its debt to the U.S. government, which took over the company in a $182 billion bailout in 2008. A Shadow Over Banks As UBS Nears Libor Deal (WSJ) The Swiss bank is set to agree as soon as this week to pay roughly $1.5 billion to settle allegations of wrongdoing related to benchmarks such as the London interbank offered rate, or Libor, say people close to the talks. So far, UBS has agreed in principle with the U.S. Justice Department that a company unit in Japan will plead guilty to a criminal charge, according to a person familiar with the tentative deal. The Zurich-based parent will pay the fine in return for a deal that lets it avoid criminal prosecution. Criminal charges against individuals are expected to be filed in tandem with the settlement, according to U.S. officials briefed on the matter. The pursuit of criminal charges and the higher-than-expected fine are ominous signs for more than a dozen financial firms still under investigation. "There's no panic—yet," says someone close to one of the banks in the sprawling probe. Moody’s Gets No Respect as Bonds Shun 56% of Country Ratings (Bloomberg) The global bond market disagreed with Moody’s Investors Service and Standard & Poor’s more often than not this year when the companies told investors that governments were becoming safer or more risky. Yields on sovereign securities moved in the opposite direction from what ratings suggested in 53 percent of the 32 upgrades, downgrades and changes in credit outlook, according to data compiled by Bloomberg. That’s worse than the longer-term average of 47 percent, based on more than 300 changes since 1974. This year, investors ignored 56 percent of Moody’s rating and outlook changes and 50 percent of those by S&P. Economy Poised To Nudge Ahead In 2013 (WSJ) So that's nice. Boehner Opens the Door to Tax Hikes on the Wealthy (Reuters) U.S. House of Representatives Speaker John Boehner's offer to accept a tax rate increase for the wealthiest Americans knocks down a key Republican road block to a deal resolving the year-end "fiscal cliff." The question now boils down to what President Barack Obama offers in return. Such major questions, still unanswered so close to the end of the year suggest, however, that no spending and tax agreement is imminent. A source familiar with the Obama-Boehner talks confirmed that Boehner proposed extending low tax rates for everyone who has less than $1 million in net annual income, meaning tax rates would rise on all above that line. Actor Depardieu Hits Back at French PM Over Taxes (CNBC) Actor Gerard Depardieu, accused by French government leaders of trying to dodge taxes by buying a house over the border in Belgium, retorted that he was leaving because "success" was now being punished in his homeland. A popular and colourful figure in France, the 63-year-old Depardieu is the latest wealthy Frenchman to seek shelter outside his native country after tax increases by Socialist President Francois Hollande. Prime Minister Jean-Marc Ayrault described Depardieu's behaviour as "pathetic" and unpatriotic at a time when the French are being asked to pay higher taxes to reduce a bloated national debt. "Pathetic, you said pathetic? How pathetic is that?" Depardieu said in a letter distributed to the media. "I am leaving because you believe that success, creation, talent, anything different must be sanctioned," he said. [...] The "Cyrano de Bergerac" star recently bought a house in Nechin, a Belgian village a short walk from the border with France, where 27 percent of residents are French nationals, and put up his sumptuous Parisian home up for sale. Depardieu, who has also inquired about procedures for acquiring Belgian residency, said he was handing in his passport and social security card. Singapore Establishment Challenged by Carson Block on Olam (Bloomberg) When Carson Block likened Olam International Ltd. to fraud-ridden Enron Corp., he challenged more than the accounting of the Singapore-based commodities firm. He also took on Temasek Holdings Pte, the government-owned investment company whose money has helped build the city-state into a corporate dynamo known as Singapore Inc. Temasek is Olam’s second-largest shareholder, with a 16 percent stake that has lost more than $100 million in value since Nov. 19, when Block’s Muddy Waters LLC first questioned the validity of the company’s finances and said it was betting against the stock. Temasek is also the biggest shareholder in many of the country’s best-known companies, including DBS Group Holdings Ltd., Southeast Asia’s largest bank, Singapore Telecommunications Ltd. and Singapore Airlines Ltd. “Carson Block is putting his whole reputation on this one,” said Low Chee Keong, associate professor of corporate law at the Chinese University of Hong Kong. “He’s taking on the Singapore government, Singapore Inc. here.” UN court orders immediate release of Argentine ship seized by hedge funder Paul Singer over unpaid debt (AP) A United Nations court ordered the immediate release Saturday of an Argentine navy training ship held in Ghana two months ago at the request of an American hedge fund. The ARA Libertad was held Oct. 2 in the port of Tema as collateral for unpaid bonds dating from Argentina's economic crisis a decade ago. Argentina appealed to the UN's International Tribunal for the Law of the Sea for the ship's release, arguing that as a warship the Libertad is immune from being seized. In an expedited ruling, the court ordered that Ghana "forthwith and unconditionally release the frigate ARA Libertad" and ensure the ship and its crew can leave Ghanaian waters. It also ordered that the vessel should be resupplied as needed. Detaining the ship was "a source of conflict that may endanger friendly relations among states," the court said. The ruling leaves untouched the parties' rights to seek further international arbitration on the matter. Debt Loads Climb In Buyout Deals (WSJ) Private-equity firms are using almost as much debt to fund acquisitions as they did before the financial crisis, as return-hungry investors rush to buy bonds and loans backing those takeovers. The rise in borrowed money, or leverage, heralds the possibility of juicy returns for buyout groups. Ominously, the surge also brings back memories of the last credit binge around six years ago, which saddled dozens of companies with huge levels of debt. Berlusconi's Love Life Lost in Translation (CNBC) Global media reports that the former Italian prime minister Silvio Berlusconi announced his engagement to his 28-year-old girlfriend on one of his TV Channels on Sunday, have been dismissed by native Italians who say Berlusconi has been mis-translated. Various newspapers have reported that Berlusconi is to get married for the third time, when in fact he announced that he is in love and in a relationship...Professor of Modern Italian History at University College London (UCL), John Foot, told CNBC that Pascale is a"girlfriend, nothing more." "In Italy the phrase 'Mi sono fidanzato' usually means 'I have a girlfriend or boyfriend' and not 'I am engaged to be married'. This can cause confusion abroad but is pretty clear in the Italian context," he told CNBC. Twinkies again by spring? It could happen (NBC) It’s not even Christmas, but Twinkies fans may be able to start looking forward to an Easter present. Bankrupt Hostess Brands has received a number of bids from companies interested in buying the maker of Twinkies, Ho Hos, and Wonder bread, including retail heavyweights such as Wal-Mart Stores Inc. and Kroger Co, Bloomberg News reported Friday, quoting an unnamed person familiar with the matter...Anthony Michael Sabino, a bankruptcy attorney and a professor at St. John's University, said bankruptcy judge Robert Drain was motivated to move quickly. Bidding will likely take place by early January, since the assets — if not the treats themselves — could become stale. “I think this will move a at a fairly decent pace. He knows what’s at stake here.