DAILY MARKET REPORTS
- U.S. stocks edged higher on Monday as companies that reported strong corporate earnings helped push major indexes higher.
- Analysts are expecting the S&P 500 companies to record an 18.6 percent rise in profit, their strongest earnings growth in seven years, according to Thomson Reuters I/B/E/S.
- Investors breathed a sigh of relief after missile strikes late Friday by the U.S., U.K. and France on Syria didn’t lead to a major escalation in the seven-year-old conflict.
- Geopolitical concerns, trade tensions and some weaker-than-expected economic numbers rattled investor sentiment in recent weeks amid fears those factors could hit a rare spurt of synchronized global economic upswing.
- Data on Monday showed U.S. retail sales increased more than expected in March, rising after three straight monthly declines, as households boosted purchases of motor vehicles and other big-ticket items.
- Reuters reported that the U.S. Department of Commerce was banning American companies from selling components to Chinese telecom equipment maker ZTE for seven years for violating the terms of a sanctions violation case.
- Shares of Bank of America edged lower despite the lender reporting a better-than-expected increase in quarterly profit.
US FINANCIAL MARKET
Bank of America profit beats estimates on higher interest rates, loan growth
- Bank of America reported a 34 percent rise in first-quarter profit on Monday, topping Wall Street estimates, as the lender benefited from higher interest rates and growth in loans and deposits.
- Revenue rose at three of BofA’s four major businesses. In consumer banking, its biggest business, revenue increased 9 percent as higher interest rates helped BofA charge more for loans while keeping deposit rates low.
- BofA’s net interest income rose 5 percent in the first quarter, pushing total revenue up 4 percent to $23.28 billion.
- Trading revenue was up only 1 percent. Equities trading revenue, excluding items, rose 38 percent, while revenue from trading fixed income fell 13 percent.
- Net income rose to $6.49 billion from $4.84 billion a year earlier.
Merck drug results suggest it will extend its lead in lung cancer; Bristol-Myers shares drop
- The medicines, which help unleash the immune system on cancer cells, were tested in patients with advanced lung cancer.
- Merck’s drug, Keytruda, reduced the risk of death in the trial by 51 percent when combined with chemotherapies, versus chemo alone.
- Bristol’s drug, Opdivo, along with another of its medicines, Yervoy, reduced the risk of cancer progression or death in its study by 42 percent when compared with chemo.
WWPP embarks on new journey without Sorrell at the helm
- WPP, the world’s biggest advertising company, entered uncharted territory on Monday without its founder Martin Sorrell whose departure has left it rudderless at a time of swirling industry change.
- Shares in the group fell 4 percent after Sorrell, the driving force behind 33 years of dealmaking and relentless expansion, stepped down on Saturday after the board investigated an allegation of misconduct.
- The sudden departure of Sorrell, the face of the company since he founded it in 1985, has sparked questions as to whether the holding group can remain in its current form of employing 200,000 people in more than 400 agencies across 112 countries.
Icahn Enterprises Selling Tropicana Entertainment for $1.85 Billion
- Carl Icahn’s company is selling its majority-owned gambling subsidiary, Tropicana Entertainment for about $1.85 billion, Icahn Enterprises said Monday.
- Tropicana operates casino and entertainment properties in the U.S., including its flagship Tropicana Atlantic City, and a casino-resort in Aruba. Icahn Enterprises owned about 84% of Tropicana as of Dec. 31, according to a filing.
U.S. bans American companies from selling to China’s ZTE
- The U.S. Department of Commerce is banning American companies from selling components to Chinese telecom equipment maker ZTE for seven years for violating the terms of a sanctions violation case, U.S. officials told Reuters.
- The Chinese company pleaded guilty last year in federal court in Texas for conspiring to violate U.S. sanctions by illegally shipping U.S. goods and technology to Iran.
Qualcomm to refile China antitrust application for $44 billion NXP takeover
- U.S. chipmaker Qualcomm will refile as early as Monday an application with the Chinese government to clear its $44 billion takeover of NXP Semiconductors, sources said, giving regulators more time to decide on the deal and averting a collapse.
- Clinching the NXP takeover, the world’s biggest in the semiconductor sector, is crucial to Qualcomm, which is seeking to diversify its customer base and become the leading chip supplier to the fast-growing automotive market.
Guggenheim says it is cooperating with SEC investigation
- Guggenheim Partners on Sunday said it was “cooperating fully” with an investigation of its asset management subsidiary that is being conducted by the U.S. Securities and Exchange Commission.
- The statement followed a report in the Wall Street Journal that the company was asked to retain documents related to transactions involving a second company, ABS Capital Co LLC.
- The SEC is pursuing details on a real-estate transaction and other deals involving ABS Capital, which is owned by two former Guggenheim managers, the Journal reported, citing unidentified people.
Goldman Sachs buys personal finance start-up Clarity Money
- Goldman Sachs bought Clarity Money, a personal finance startup, to bolster its Marcus online lending business, it said Sunday.
- Buying Clarity Money, a free app that helps consumers manage their personal finances, is expected to add over 1 million customers to the financial service firm’s Marcus business. Marcus offers tools to help customers save and borrow.
- It offers loans from $3,500 to $40,000 and targets credit card borrowers who can benefit from consolidating debt into a single loan with a lower interest rate.
Domino’s unveils pizza delivery ‘hotspots’ as competition rages
- Domino’s Pizza is ramping up the food delivery wars, adding online ordering for more than 150,000 new delivery “hotspots” at U.S. parks, beaches and other destinations that do not have traditional addresses.
- While customers previously could ask Domino’s to deliver to offbeat locations, the initiative establishes set drop-off points that customers can find with the location services on their smartphones.
- Roughly 60 percent of its orders are digital and Domino’s delivers around 65 percent of overall orders.
China tariffs on U.S. business jets no clear boost to rivals: aviation executives
- China’s planned tariffs on U.S. business jets may do little to buoy rivals despite concerns the moves could create an unequal playing field in the fast-growing China market, aviation executives said in Shanghai on Monday.
- China earlier this month announced retaliatory tariffs against key U.S. imports, among which is a proposed 25 percent tariff on U.S. aircraft with an “empty weight” of between 15,000 kilograms and 45,000 kilograms.
- The category impacted by the potential tariffs would include General Dynamics’s popular Gulfstream G550 and G650s and the larger Boeing Business Jet 1 that competes against models from European rival Airbus.
- Thanks to demand from China’s newly minted billionaires and globally minded state-owned enterprises, the growth of its business jet fleet has outpaced that of other countries in the region, making it a key target market for private jet makers.
US ECONOMY & POLITIC
U.S. Retail Sales Rose 0.6% in March
- Retail sales—a measure of outlays at stores, restaurants and websites—increased a seasonally adjusted 0.6% in March. Economists surveyed by The Wall Street Journal expected a 0.3% increase.
- A bump in auto sales helped drive the overall rise in retail spending, but even excluding vehicles, sales were up 0.2% last month, in line with economists’ expectations.
- Sales at nonstore retailers, such as online-shopping outlets, were up 0.8% from February and rose 9.7% from a year earlier.
- Overall retail sales rose 4.1% in the first quarter of 2018 compared with the same period a year earlier.
U.S. Homebuilder Sentiment Declined in April for a Fourth Month
- Sentiment among U.S. homebuilders fell in April for a fourth straight month, reflecting higher lumber prices and limited land availability, according to data Monday from the National Association of Home Builders/Wells Fargo.
- Soaring lumber prices, partly a reflection of U.S. tariffs, are raising the cost of home construction at the same time mortgage rates near a four-year high hamper affordability.
- The Housing Market Index eased by 1 point to a five-month low of 69 (est. 70).
Democrats Maintain Advantage Over GOP in Voter-Sentiment Poll
- Democratic voters are showing a higher level of interest in the 2018 midterm elections than are Republicans, with three-quarters of Democrats saying their vote for Congress is intended as a message of opposition to President Donald Trump, a new Wall Street Journal/NBC News poll finds.
- The poll found that 39% of respondents approve of Mr. Trump’s job performance, with 57% disapproving.
- That approval rating is down 4 percentage points from last month but remains within the same, 6-point range of the past year.
- In the poll, 66% of Democrats rated themselves as having a high interest in the elections, up from 60% last month. Among Republicans, 49% said they had the highest level of interest, down from 54% last month.
EUROPE & WORLD
Shire sells cancer drugs to Servier for $2.4 billion as Takeda circles
- Shire, the London-listed rare diseases specialist that is a potential takeover target for Japan’s Takeda Pharmaceutical, is selling its oncology business to unlisted French drugmaker Servier for $2.4 billion.
- Its oncology business had sales of $262 million last year, putting the divestment on a respectable revenue multiple of 9.2 times.
Volkswagen Unit Considering Full Takeover of Truck Maker Navistar
- Volkswagen’s commercial-vehicles unit said it is considering a full takeover of Navistar International, an Illinois-based truck maker valued at about $3.66 billion.
- Volkswagen Truck & Bus already owns just shy of 17% of Navistar and officials at the unit said Monday it could raise that stake and was also considering a full takeover.
China slows review of chip company mergers amid trade tensions
- Two multi-billion dollar takeovers of semiconductor makers are being stalled by Chinese regulatory reviews amid rising U.S.-China trade tensions, the Wall Street Journal reported on Saturday, citing people familiar with the matter.
- Qualcomm’s proposed $44 billion purchase of Dutch chip maker NXP Semiconductors could be at risk due to the delayed review.
- China is the only country that has not yet signed off on the deal, or on Toshiba’s planned $19 billion sale of its chip unit to a Bain Capital consortium.
- Qualcomm’s merger agreement with NXP was extended for a second time in January, giving the two until to April 25, although the parties could decide to extend the deadline.
Brazil’s Vale reports iron ore output slips in first-quarter
- Brazilian miner Vale said on Monday that total iron ore output slipped 4.9 percent year-on-year in the first quarter to 81.95 million tons, although the company maintained its 390-million-ton target for 2018.
- The world’s top iron ore producer said that heavy rains in the first three months of the year impacted its output.
- Pellet production grew 2.9 percent to 12.78 million tons, while sales of the product used for steel production rose 4.3 percent.
Embraer delivers 14 commercial jets and 11 executive jets in first-quarter
- Embraer delivered 14 commercial planes in the first three months of 2018, down from 18 commercial jets in the same period last year, the Brazilian planemaker said in a securities filing on Monday.
- Embraer delivered 11 executive jets in the first quarter, down from 15 in the year-ago period.
- The company has a backlog of 421 firm orders to deliver, a gauge of future revenue, and said it would disclose the value of those orders in its first quarter earnings results.
Vermilion Energy to buy Spartan Energy in C$1.4 billion deal
- Oil and gas producer Vermilion Energy said it would buy rival Spartan Energy in a deal valued at C$1.40 billion ($1.11 billion), boosting its presence in the Canadian province of Saskatchewan.
- As part of the deal, Vermilion will offer C$1.23 billion of its own shares and assume C$175 million of Spartan’s debt.
- Spartan, which is a southeast Saskatchewan oil and gas producer, has annual production of about 23,000 barrels of oil equivalent per day boe/d.
TODAY in HISTORY
- Harriet Quimby became the first woman to fly across the English Channel. (1912)
- Lenin returned to Russia after 10 years in exile in Switzerland. (1917)
- China sent President Nixon two giant pandas as a gift. (1972)
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