DAILY MARKET REPORTS
- Major indexes extend gains from Friday’s jobs report.
- Broadcom rose 2.9 percent following report that Intel was considering a possible bid for the company.
- Traders of U.S. short-term interest-rate futures kept bets the Federal Reserve will stick to three rate hikes this year.
US FINANCIAL MARKET
Intel May Intervene in Broadcom’s Effort to Buy Qualcomm
- Intel is considering a range of acquisition alternatives in reaction to Broadcom’s hostile pursuit for Qualcomm that could include a bid for Broadcom, according to people familiar with the matter.
- Intel has been considering such a move since late last year and is working with advisers, some of the people said.
- It is far from guaranteed that Intel would ultimately make such a move—one of the people said it is unlikely—and the complexity and size of such a combination would be enormous. Broadcom has a market value of around $104 billion.
- Intel is watching the takeover battle closely and is eager for Broadcom to fail as the combined company would pose a serious competitive threat, the people said.
Dropbox Sets IPO Target Valuation at $7 Billion to $8 Billion
- Dropbox set a valuation target between $7 billion and nearly $8 billion ahead of its initial public offering, which is set to be one of the biggest tech IPOs in the past few years.
- That valuation level would make it the largest tech IPO since Snap made its debut in March of 2017.
- In a filing Monday, the web-storage and collaboration said it expects its shares to price in a range of $16 to $18.
- Dropbox, which lets users store, share and collaborate on documents, photos and other files online, is among the older of the so-called billion-dollar startups.
- The company was founded by MIT computer-science students Drew Houston and Arash Ferdowsi in 2007. It now has more than 500 million registered users, most of whom use its free, basic service with limited storage.
US says it confirmed national security concerns over Broadcom’s Qualcomm deal
- Treasury’s committee overseeing foreign transactions in the U.S. (CFIUS) says Broadcom violated its previous orders by failing to notify it ahead of time of moves it was making to relocate to the U.S.
- The government has said it was concerned a deal could hinder Qualcomm’s competitive edge in mobile network development.
- Singapore-based Broadcom said it expects to redomicile to the United States by April 3, two days before the chipmaker’s acquisition target Qualcomm holds its annual shareholder meeting.
- Broadcom said last week that CFIUS has ordered the company to provide it with five business days’ notice before taking any action toward moving base to the United States.
- The requirement showed that CFIUS was aware that its jurisdiction could be contested if Broadcom redomiciles to the US.
Goldman Sachs Puts David Solomon in Line to Be Next CEO
- Goldman Sachs said Monday that Co-Chief Operating Officer Harvey Schwartz will step down next month, paving the way for David Solomon to be groomed as the next chief executive of the bank.
- Mr. Schwartz will retire on April 20, and Mr. Solomon will become the sole operating chief and president.
- The Wall Street Journal reported last week that Lloyd Blankfein is set to retire as soon as the end of 2018 and that Schwartz and Solomon were top contenders to succeed him.
- Mr. Solomon ran Goldman’s investment-banking arm from 2006 to 2016. During that time, the division’s revenue rose 70%, and its share of Goldman’s profits more than doubled.
DowDuPont’s Andrew Liveris steps down, names CEO for new Dow
- DowDuPont chief Andrew Liveris will step down on April 1, making good on an earlier promise to retire as the company named existing managers to head its materials science unit when it is spun off as Dow next year.
- Jim Fitterling, currently chief operating officer of the materials science unit, will become its chief executive under the Dow brand in a spin-off planned for the first quarter of 2019, the company said in a statement.
Tesla Temporarily Suspended Model 3 Output in Late February
- Tesla temporarily suspended production of the Model 3 electric sedan for a week in late February, a planned breather that ultimately may help increase output of the closely watched vehicle.
- Model 3 production was idled from Feb. 20 to Feb. 24 before resuming at the company’s assembly plant in Fremont, California, according to the company.
- Tesla is targeting a weekly Model 3 production rate of 2,500 sedans by the end of this month and 5,000 by the end of June.
Boeing says Israel may opt for Chinooks over Sikorsky choppers
- The Israeli military could decide within months to buy Boeing’s CH-47 Chinook transport helicopters following a strong endorsement by its ground forces, a senior Boeing official said on Sunday.
- The twin-rotor Chinooks would replace an aging fleet of Sikorsky CH-53 helicopters, which have been in operation since 1969, now manufactured by Lockheed Martin.
- Israel does not publish the number of CH-53s in operation but defense industry sources said Israel was interested in buying 20 new helicopters.
- The German Defense Ministry has said later this year it will also choose between the Chinook and the CH-53K in its own competition to buy 45-60 heavy-lift aircraft to replace its aging fleet of CH-53G helicopter.
Optics tech firm Lumentum buys Oclaro for $1.7 billion
- Laser and optical fiber specialist Lumentum will buy optical components producer Oclaro for about $1.7 billion in cash and stock.
- California-based Lumentum said the purchase was aimed at broadening its portfolio of laser offerings and getting an edge in a fast-developing market for 3D sensing technology.
- Oclaro, which makes optical components for data center markets said its stockholders are expected to own about 16 percent of the combined company when the deal closes.
- Lumentum is the primary supplier of vertical-cavity surface-emitting lasers (VCSELs) that power the Face ID feature in Apple’s premium iPhone X.
‘Black Panther’ rules box office for 4th week, topping ‘A Wrinkle in Time’
- “Black Panther” took the No. 1 spot at the North American box office with $41.1 million according to studio estimates Sunday, leaving another newcomer in its wake.
- The Marvel and Disney phenomenon crossed the $1 billion mark worldwide this weekend and became the 7th highest grossing domestic release with $562 million.
Here’s how many Americans don’t have access to a 401(k) plan
- 401(k)s are an especially important retirement tool given that pensions are on the decline and Social Security “could be insolvent by 2034,” and because an alarming number of Americans have little to nothing saved for retirement individually:
- A recent study by GOBankingRates found that 42 percent have less than $10,000 socked away.
US ECONOMY & POLITIC
Employment Trends Index Rose for February
- The Conference Board Employment Trends Index rose in February as most of the indicators the index factors in made positive contributions.
- The February index was 107.74 compared with January’s downward-revised reading of 106.50.
White House Unveils Proposals to Reduce Gun Violence at Schools
- The White House on Sunday announced a plan to reduce gun violence at schools that includes spending federal money on training school staffers to carry concealed weapons, but not to raise the age limit for buying guns.
- The White House blueprint, calls for “hardening our schools” by instituting security procedures comparable to those in airports, sports stadiums and government buildings by using Justice Department grants to train school personnel to carry weapons “on a voluntary basis.”
- The plan also calls on states to adopt laws allowing police, with court approval, to remove firearms from people who are a threat to themselves or others and to temporarily prevent those people from purchasing new guns.
- Additionally, the plan seeks improvements to mental-health systems to help identify and treat individuals who may be a threat. Those changes include increased integration of mental health, primary health care and family services.
- The Justice Department said Saturday that its bump-stock ban would amend the definition of machine guns in the National Firearms and Gun Control Act to include bump-stock-type devices.
Trump has reportedly narrowed search for Cohn’s replacement to two
- The White House has reportedly narrowed its search for the next head of the National Economic Council to two candidates: Chris Liddell and Shahira Knight.
- President Donald Trump is “seriously considering” Liddell, the former chief financial officer for both General Motors and Microsoft.
- Liddell joined the administration in January 2017 and serves as the White House’s director of strategic initiatives.
- The White House is also interested in Knight — the current NEC deputy director — for the job, according to Politico. However, Politico, citing sources who know Knight, also reported that she is not interested in heading the National Economic Council.
EUROPE & WORLD
Saudis said to use coercion and abuse to seize billions
- In November, the Saudi government locked up hundreds of influential businessmen — many of them members of the royal family — in the Riyadh Ritz-Carlton in what it called an anti-corruption campaign.
- Most have since been released but they are hardly free. Instead, this large sector of Saudi Arabia’s movers and shakers are living in fear and uncertainty.
- During months of captivity, many were subject to coercion and physical abuse, witnesses said.
- In the early days of the crackdown, at least 17 detainees were hospitalized for physical abuse and one later died in custody with a neck that appeared twisted, a badly swollen body and other signs of abuse, according to a person who saw the body.
- Corruption has long been endemic in Saudi Arabia, and many of the detainees were widely assumed to have stolen from state coffers. But the government, citing privacy laws, has refused to specify the charges against individuals and, even after they were released, to clarify who was found guilty or innocent, making it impossible to know how much the process was driven by personal score settling.
Deutsche Bank Asset-Management IPO Pricing Values Unit at Up to $8.9 Billion
- Deutsche Bank said the share pricing for the coming partial float of its asset-management unit values the business at €6 billion to €7.2 billion ($7.4 billion to $8.9 billion) and announced a “cornerstone” investor in the offering, Japan’s Nippon Life Insurance.
- Deutsche Bank said it would sell 20% of the unit, DWS Group, in an offering range of €30 to €36 a share. The first day of trading will be March 23 on the Frankfurt Stock Exchange.
- At the upper end of that price range, the business would be valued at roughly the midpoint of recent consensus expectations. The offering is expected to raise €1.2 billion to €1.44 billion.
- Nippon Life will acquire a 5% stake in DWS and has agreed to allocate an unspecified amount of assets to the business, distribute Deutsche Bank products, and otherwise help DWS increase its profile in Asia, according to the Deutsche Bank statement.
China’s AgBank to raise up to $15.8 billion via private placement
- Agricultural Bank of China, the country’s third-largest bank, said it would raise as much as 100 billion yuan ($15.81 billion) in the biggest A-share private placement by a listed Chinese commercial bank.
- The fundraising comes as China’s large state banks step up efforts to speed up write-offs and boost bad loan buffers as part of a nationwide campaign to de-risk and de-leverage the commercial banking industry, where non-performing loans are at 12-year highs.
- The bank will use the money to replenish its common equity tier 1 capital and boost capital adequacy of the bank, AgBank said in a securities filing.
- After the private placement, AgBank’s core tier 1 capital adequacy ratio will increase to 11.23 percent from 10.38 percent and its tier 1 capital adequacy will increase to 11.90 percent from 11.06 percent.
TODAY in HISTORY
- Juliette Gordon Low founded the Girl Scouts. (1912)
- Mohandas Gandhi began his 200-mile march to protest the British salt tax. (1930)
- President Franklin D. Roosevelt gave the first of his nation-wide “fireside chats” on radio. (1933)
- President Truman established the “Truman Doctrine” to aid in the containment of Communism. (1947)
- The Church of England ordained women priests for the first time in 460 years. (1994)
This information has been prepared from sources believed to be reliable, but no representation is being made as to its accuracy or completeness. The information provided should be used only as general information and is not intended to provide specific advice or recommendations for any individual. The economic forecasts set forth in the material may not develop as predicted. All indices, such as the S&P 500, are unmanaged and may not be invested into directly. Sources: Reuters, Bloomberg, Wall Street Journal.
Content posted by third parties on this site is screened in order to protect clients’ privacy and comply with regulatory requirements. Content containing sensitive personal information, inappropriate language, information about specific investments, misleading information, information about other companies or websites, or information related to litigation will be removed. Content posted by third-parties on this site remains the responsibility of the party posting the content and is not adopted or endorsed by Pence Wealth Management or LPL Financial. Any opinions or statements posted by third parties are their own and may not be representative of the experience of others and are not indicative of future performance or success. Third party content on this site does not reflect the views of LPL Financial and have not been reviewed by LPL Financial as to accuracy or completeness.