DAILY MARKET REPORTS
- Investors have been questioning whether the recent declines reflect a short-term technical correction or the start of a more profound reassessment of the financial climate in light of less support from central banks.
- The S&P 500 energy sector rose 1.2% after U.S. crude oil rose 1.8% to $60.27 a barrel after sliding last week on worries about rising U.S. production.
- Meanwhile, government bonds stabilized, with the yield on the benchmark 10-year U.S. Treasury note—which rises as bond prices fall—recently at 2.831%, compared with 2.829% Friday.
- President Donald Trump will unveil his second budget later in the afternoon. The plan includes $200 billion for infrastructure spending and more than $23 billion for border security and immigration enforcement.
- Roughly 79% of S&P 500 companies have reported fourth-quarter revenue above analyst expectations so far this earnings season, compared with a long-run average of 60%.
- General Dynamics fell 1% after the U.S. defense contractor said it would buy smaller rival CSRA for about $6.8 billion. CSRA soared 32%.
US FINANCIAL MARKET
General Dynamics to buy rival for $6.8 billion to bolster IT unit
- U.S. defense contractor General Dynamics announced it would buy smaller rival CSRA for about $6.8 billion to expand its information technology unit, which provides services to the U.S. Department of Defense.
- CSRA generated about 94 percent of its revenue in the fiscal year ended March 2017 from sales to the U.S. government either as a prime contractor or subcontractor.
- General Dynamics’s $40.75-per-share cash offer represents a premium of 32 percent to CSRA stock’s closing price on Friday.
- General Dynamics said the deal is valued at $9.6 billion, including $2.8 billion in CSRA debt.
Restaurant Brands’ profit tops estimates on Burger King boost
- Canada-based Restaurant Brands said on Monday comparable sales at Burger King, known for its Whopper burgers and onion rings, rose 4.6 percent.
- Restaurant Brands, which also owns the Tim Hortons and Popeyes Louisiana Kitchen restaurant chains, said total revenue climbed 11 percent to $1.23 billion.
- The company earned 66 cents per share, beating analysts’ average estimate of 57 cents.
Broadcom Secures as Much as $100 Billion of Debt Funding for Qualcomm Bid
- Broadcom secured as much as $100 billion of debt financing for its hostile bid for Qualcomm and enlisted two more big private-equity firms, strengthening the chip giant’s hand in the takeover battle.
- A dozen banks—including Bank of America, Citigroup, Deutsche Bank, JPMorgan Chase, and Morgan Stanley —have agreed to provide up to $100 billion of committed credit facilities, including a $5 billion revolver and bridge financing, Broadcom said Monday.
- Qualcomm and Broadcom are planning to meet on Wednesday to talk about acquisition, the first time the semiconductor companies will discuss the potential deal.
Comcast mulling new bid for Fox assets
- Comcast is considering a new offer for Twenty-First Century Fox, despite an agreement in December to sell them to Walt Disney for $52.4 billion.
- Comcast’s previous bid last year for more than $60 billion was rejected over concerns that regulators worried about media consolidation could thwart it.
- The company expects be informed by how Fox justifies the deal with Disney in a regulatory filing to its shareholders sometime before they are asked to vote on the deal this summer.
Alibaba signs deal to offer Disney shows on video platforms
- Alibaba said that the multi-year licensing agreement signed between Alibaba Digital Media and Entertainment Group and Disney subsidiary Buena Vista International will see more than 1,000 Disney episodes released on Alibaba platforms which include set-top boxes.
- The deal comes as Disney has faced obstacles in getting digital television content into China.
- In 2016, its DisneyLife online content venture, which it launched with Alibaba, was shut down by Chinese regulators less than five months after operations began.
- Alibaba did not disclose the value of the deal.
US ECONOMY & POLITIC
Trump budget plan to seek funds for border wall, infrastructure, opioid treatment
- President Donald Trump will unveil his second budget, seeking to make good on his promise to bolster military spending and requesting funds for infrastructure, construction of a wall along the border with Mexico and opioid treatment programs.
- The proposal will include $200 billion for infrastructure spending and more than $23 billion for border security and immigration enforcement.
- The statement from the budget office added that the proposal would recommend cuts that would lower the deficit by $3 trillion over 10 years.
- The budget request will be delivered to Congress only days after Trump signed off on a bipartisan spending agreement hammered out by lawmakers that will increase domestic spending by $300 billion over two years.
White House to Roll Out Trump Infrastructure Plan
- Federal government would contribute $200 billion over 10 years, aiming to spark local investments, but funding face hurdles.
- The proposal also would expand federal loan programs for such projects.
- The administration said will also request higher outlays for the military, border security and veterans medical care.
EUROPE & WORLD
OPEC hikes its 2018 forecast for oil supply growth on a flood of US crude
- OPEC said it expects demand for oil to grow faster than it originally expected in 2018, but the organization also sees supplies from beyond the producer group surging this year, driven by rising U.S. output.
- A monthly report also showed OPEC’s production was little changed in January as the group continues to limit its output for a second year to balance an oversupplied market.
- The 14-member cartel said it now sees non-OPEC production growing by 1.4 million barrels per day, up 250,000 bpd from its estimate in its last monthly report.
- It expects nations outside OPEC to pump a total of 59.26 million bpd this year, 320,000 bpd higher than its last forecast.
- The United States accounts for more than half of that upward revision.
Airbus shares fall after engine snag halts some deliveries and tests
- Shares in Airbus fell after sources said Airbus had stopped delivering A320neo jets powered by Pratt & Whitney geared-turbofan engines and halted pre-delivery test flights after some engine snags.
- Airbus has briefed airlines and leasing companies that it cannot say how long it will take to resolve the engine problem.
- An Airbus spokesman said it is “in discussions with customers about delivery schedules” on a case-by-case basis.
Honda to recall 350,000 cars in China over engine issue
- Honda will recall roughly 350,000 vehicles in China to resolve a cold-climate engine issue and quell a barrage of customer complaints that has hit the automaker over the past month.
- The recall involves the CR-V sport utility vehicle and the Civic car equipped with a 1.5-litre turbo engine.
- The company is calling back those cars to resolve a problem caused by an unusual amount of un-combusted petrol collecting in the engine’s lubricant oil pan.
- Honda officials said there had been no reports of accidents. They said the engine oil issue doesn’t affect the engine or the car’s performance.
Volatile markets prompt Heineken to lower margin growth target
- Heineken has gained in recent years from strong performances in its two largest markets — Mexico and Vietnam.
- Profit 2017 came in at 3.76 billion euros ($4.62 billion), a gain of 6.2 percent.
- Heineken said it saw inflationary pressures from raw materials such as aluminum used in beer cans and because of volatile emerging market currencies.
- Heineken said it would pay a dividend of 1.47 euros per share for its 2017 financial year.
Puma upbeat for 2018, sees turnaround for soccer sales
- Puma last week agreed a partnership with Senegal’s soccer federation, bringing to three the number of World Cup teams it is sponsoring, along with Switzerland and Uruguay.
- Puma reported quarterly earnings more than doubled to 30 million euros ($37.8 million).
- Puma said it expects a 10 percent rise in sales in constant currencies and 2018 EBIT of between 305 million and 325 million, up from 245 million in 2017.
German court rules Facebook use of personal data illegal
- A German consumer rights group said that a court had found Facebook’s use of personal data to be illegal because the U.S. social media platform did not adequately secure the informed consent of its users.
- The verdict comes as Big Tech faces increasing scrutiny in Germany over its handling of sensitive personal data that enables it to micro-target online advertising.
- The Federation of German Consumer Organizations said that Facebook’s default settings and some of its terms of service were in breach of consumer law, and that the court had found parts of the consent to data usage to be invalid.
Emirates firms up $16 billion order for A380 superjumbos
- Emirates signed a contract on Sunday to buy as many as 36 Airbus A380 aircraft worth as much as $16 billion at list prices.
- The order, for 20 of the double-decker planes with an option for 16 more, was originally announced on a provisional basis in mid-January.
- Deliveries are to start as soon as in 2020, the Dubai-based carrier said.
TODAY in HISTORY
- Led by philanthropist James Edward Oglethorpe, the first English colonists arrived in Georgia, at the site of Savannah. (1733)
- Abraham Lincoln was born (1809)
- Chile formally proclaimed its independence from Spain. (1818)
- The Utah Territory granted women the right to vote (revoked in 1887). (1870)
- The Senate voted to acquit President Clinton on charges of perjury and obstruction of justice. (1999)
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