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Runaway stories and fairy tale endings: the cautionary tale of Theranos
Capital Markets
I saw the new Steve Jobs movie, with the screenplay by Aaron Sorkin, over the weekend. As a long-time Apple user and investor, I must confess that I was bothered by the way in which the film played fast and loose with the facts, but I also understand that this is a movie. Sorkin clearly saw the benefit of using
Daily Scan: Stocks drop; Fed presidents send mixed signals on interest rates
Capital Markets
<p>Updated throughout the day</p> <p>November 12</p> <p>It's Fed comments day: Federal Reserve Chair Janet Yellen spoke Thursday morning about monetary policy in general, but didn't comment on the outlook for the U.S. economy. New York Fed President William Dudley and St. Louis Fed President James Bullard both seem to be leaning toward a rate hike. Bullard called the near-zero interest rate policy a "considerable risk of future inflation" for the U.S. economy. Chicago Fed President Charles Evans was a bit more hesitant, saying it could be "well into" next year before the inflation goal is reached.</p> <p>Here’s what else you need to know:</p> <p>Markets sink. The bloom is off the October rally, and November is looking a little droopy for equities as investors contemplate a likely interest rate hike in December. The Dow fell more than 1% by midday Thursday. The Nasdaq was down 0.5%, and the S&amp;P 500 dropped 0.87%.</p> <p>Deutsche Bank keeps moving executives. The top officials of the investment bank are shifting, with Goldman Sach's Alasdair Warren appointed as head of corporate and investment banking for EMEA. John Eydenberg will be vice chairman of CIB for the Americas, and Marc Pandraud will be vice chairman of CIB for EMEA, new roles for the firm. Wall Street Journal (paywall)</p> <p>IMF tells U.S. Fed to wait for inflation numbers. The IMF paper released Thursday says that the Fed should look for firm signs of rising inflation, as well as a stronger labor market before raising interest rates. The report came out in anticipation of of the G20 meeting in Turkey. Reuters</p> <p>Apple in talks with banks to develop P2P mobile system. Move over Venmo and Square. Apple is in talks with major banks including JPMorgan and Wells Fargo to enable iPhone users to pay their buddies through Apple Pay. Wall Street Journal (paywall)</p> <p>Morgan Stanley to offer savings accounts, certificates of deposits. It's not as exciting as deal-making, but the investment bank hopes the broader suite of consumer offerings will lure customers to its wealth management division. Competition is intense in the sector. Reuters</p> <p>Angie's List in unwanted bid. IAC/InterActive has offered $512 million for the Internet site, which provides online reviews of home-related services. It hasn't turned a profit since going public four years ago. IAC owns About.com and Vimeo. New York times (paywall)</p> <p>The feds move to ban smoking in public housing. An announcement should come Thursday from the Department of Housing and Urban Development. The move would affect more than one million people -- who are likely to wonder whether the government can really tell them what to do in their homes. New York Times (paywall)</p> <p>The Hang Seng Index soared 2.40% on Morgan Stanley move, its best day since October 7. The investment bank upgraded the MSCI Hong Kong index, saying its heavy weighting in insurance companies means it will do well as the U.S. raises interest rates. The Hang Seng Index is down 9% since August when mainland China devalued the yuan. In a note, Morgan Stanley said its index has a greater exposure to Hong Kong's economy than China's. However, Morgan Stanley did not upgrade its views on its other Asian indices. Barron's Asia</p> <p>Draghi offers more bouquets. The ECB president said in speech: “If we were to conclude that our medium-term price stability objective is at risk, we would act.” Mario Draghi took to the in Brussels to reiterate his “anything it takes” approach. European Central Bank</p> <p>U.K. home prices may climb 22.5% over the next five years. Here’s a bit of news for prospective home buyers. The Royal Institute of Chartered Surveyors forecast British home prices to climb 4.5% per annum over the next five years, largely due to a consistent decrease in supply and a continuous uptick in demand. RICS</p> <p>Japanese machinery orders trump forecasts. In another round of good news for the land of the rising sun, machinery orders in the struggling nation climbed 7.5% in September – its first rise in four months – and handily beat
Daily Scan: Hang Seng soars 2.4%; Draghi hints at more easing
Capital Markets
<p>Updated throughout the day</p> <p>November 12</p> <p>The Shanghai Composite gave back some of its hard-earned gains Thursday, falling 0.48% as traders re-examine valuations and check their outlook on the nation’s economy. Shares in Hong Kong however were a different story. Led by Singles’ Day stalwart Tencent and buoyed by encouraging news from Morgan Stanley, the Hang Seng Index soared 2.40% to 22,888.92, its best day since October 7, while the Hang Seng China Enterprises Index added 1.59%. Here’s how the rest fared:</p> <p> Nikkei 225: +0.03%<br /> Shenzhen Composite: +0.28%<br /> Straits Times Index: -0.72%</p> <p>European shares meanwhile look pretty encouraging. After falling dramatically right out of the gate, the FTSE 100 is currently up 0.04%, while the DAX 30 and CAC 40 are up 0.42% and 0.19% respectively.</p> <p>Here’s what else you need to know:</p> <p>Draghi: “If we were to conclude that our medium-term price stability objective is at risk, we would act.” In case he wasn’t dovish enough during his last speech, ECB President Mario Draghi took to the in Brussels to reiterate his “anything it takes” approach. European Central Bank</p> <p>U.K. home prices may climb 22.5% over the next five years. Here’s a bit of news for prospective home buyers. The Royal Institute of Chartered Surveyors forecast British home prices to climb 4.5% per annum over the next five years, largely due to a consistent decrease in supply and a continuous uptick in demand. RICS</p> <p>Australian jobs report decimates estimates. Economists – who were expecting a 15,000 climb – were left dumbfounded after the Australian Bureau of Statistics reported an astounding 58,600 jobs increase in October. The FT does note that this may have been massaged a bit, but the underlying trend seems to be pretty solid. Australian Bureau of Statistics / Financial Times (paywall)</p> <p>Bank of Korea leaves rates unchanged. As expected, the Bank of Korea’s monetary policy committee kept its base rate unchanged at 1.50%. This is the fifth-straight month the bank stood pat on policy after slashing rates to a record low following the MERS outbreak. Reuters</p> <p>Japanese machinery orders trump forecasts. In another round of good news for the land of the rising sun, machinery orders in the struggling nation climbed 7.5% in September – its first rise in four months – and handily beat forecasts for a 3.3% jump. CNBC</p> <p>Catalonia vows to go independent within 18 months. Despite seeing Spain’s Constitutional Court block her region’s attempted secession process Wednesday, Catalan Vice-President Neus Munte said it was the political will of the regional government to carry on with its plans for independence within 18 months. BBC</p> <p>Alibaba sets a Singles’ Day record. The Chinese internet giant saw its largest online shopping day on Tuesday as its marketplaces hosted $14.3 billion in sales, even though the rate of growth was slower than last year. The Wall Street Journal</p> <p>Myanmar leader congratulates Suu Kyi. The country’s military-backed President Thein Sein congratulated Aung San Suu Kyi’s opposition party on its success in polls so far, with 47% of seat declared. BBC</p> <p>Beijing has a plan to rev up consumption. In a battery of moves meant to accelerate domestic demand, the Chinese government will “encourage businesses to adopt new technology and materials,” rev up its household registration reforms “to drive home sales and boost consumption of home appliances,” and encourage the importation of consumer goods. Xinhua</p> <p>China, Taiwan love is short-lived. Days after the two country’s leaders were seen to shake hands in a historic meeting, top Taiwan officials in have now hit out at “unfair” Chinese competition and Beijing’s moves to isolate the island. Financial Times (paywall)</p> <p>Too big to fail rules may cramp Chinese banks’ style. Under the latest proposal by the Financial Stability Board, three of China’s biggest banks may have to cough up as much as €355 billion altogether just to comply with the new “too big to fail” requirements. Tha
Global earnings update: Europe and Japan coming up short
Capital Markets
<p>KEY TAKEAWAYS<br /> · European earnings have disappointed relative to expectations and may suggest tempering near-term expectations for European stocks.<br /> · While we are encouraged by Japan’s economic progress, its earnings season has also fallen short of expectations.<br /> · We recommend suitable investors focus equity allocations in the U.S., while maintaining modest developed international equity exposure.<br /> Earnings overseas have generally not kept up with the U.S. We spend a lot of time dissecting earnings season in the U.S. because we believe earnings are the single biggest driver of stock prices over the long run. But earnings are not just important for U.S. stocks, they are also important for stocks overseas. This week we provide an earnings update in Europe and Japan, where results thus far have mostly fallen short of those in the U.S. While we continue to focus our equity allocations in the U.S., we still recommend modest developed international equity exposure for suitable investors, despite third quarter 2015 earnings shortfalls overseas. Prospects for international earnings to improve over the rest of 2015 and into 2016, and for additional monetary stimulus, are supportive.</p> <p>The Source:<br /> Earnings figures may vary depending on the source (Thomson, FactSet, Bloomberg, etc.). Data providers have different methodologies for calculating earnings, and different interpretations of what constitutes operating earnings as compared with reported (GAAP) earnings. In general, we favor the Thomson data series’ long history in the U.S., but view FactSet as a reliable source of international earnings data.</p> <p>U.S. EARNINGS SEASON TRACKING ACCORDING TO PLAN<br /> We wrote about third quarter 2015 earnings season in the U.S. in our recent Weekly Market Commentary, “Corporate Beige Book,” where we compared the number of positive words relative to the number of negative words in earnings conference call transcripts to assess the mood of management teams discussing results. Despite the challenging environment, particularly for global companies impacted by the strong U.S. dollar and companies tied to commodities, moods were generally positive. That exercise also highlighted the increased attention on China.<br /> Earnings season in the U.S. is about 90% complete, ahead of Europe (51%) and Japan (73%), so we have a near final picture of where the numbers will end up. Results relative to expectations have been very good, with a 5% upside surprise thus far for S&amp;P 500 earnings; and excluding the energy sector, earnings are on track to grow at a solid 6% pace. Excluding the drag from currency due to the strong U.S. dollar, earnings would be on track for a near 9% year-over-year increase, a very respectable figure for this stage of the economic cycle. U.S. earnings are poised to accelerate during the fourth quarter of 2015 and potentially return to mid- to high-single-digit growth rates within the next several quarters.<br /> EUROPE DISAPPOINTS<br /> In Europe, where the third quarter 2015 reporting season is only about halfway complete, results thus far have been disappointing on a variety of metrics. First, based on MSCI indexes, Europe has suffered the biggest year-over-year decline in earnings and revenue compared with the U.S. and Japan [Figure 1]. The story is no different if the sharp declines in energy sector profits are excluded. Second, the earnings beat rate (percent of companies beating earnings estimates) at 50% is significantly lower than the 70%-plus rate in the U.S. (and in-line with Japan’s rate) [Figure 2]. And third, the earnings surprise, at a 5% shortfall, is far worse than the 5% upside surprise to earnings in the U.S. thus far and worse than the 2% shortfall in Japan [Figure 3]. The only metric in which Europe compares favorably to the U.S. and Japan is the revenue surprise (+2%), which is better than the U.S. result and Japan’s 1% shortfall.</p> <p>These results are discouraging for several reasons. For one, Europe has a currency advantage relative to the U.S. The drag from a str
Jamie Dimon is the best big bank CEO, by shareholder returns
Capital Markets
<p>After almost a decade leading JPMorgan, Jamie Dimon has provided better shareholder returns than any of his competitors.</p> <p>Since Dimon took control at the beginning of 2006 the total shareholder return for the $2.4 trillion JPMorgan has been a total 119.5%, including dividends, reports the Motley Fool. Dimon is also the longest ranking big bank CEO. Dimon's closest competition is Wells Fargo CEO John Stumpf. Wells Fargo has had 97.3% shareholder return since Stumpf became CEO in June 2007.</p> <p>Goldman Sachs reported 47.1% shareholder return since Lloyd Blankfein became CEO in June 2006. Morgan Stanley has 40.6% return since James Gorman's appointment in January 2010. And Bank of America reported 22.1% return since Brian Moynihan became CEO in January 2010.<br /> Photo: Financial Times </p>
Daily Scan: Alibaba hits $14B record for Singles' Day; Macy's plunges 14%
Capital Markets
<p>&nbsp;</p> <p>Updated throughout the day</p> <p>November 11</p> <p>The S&amp;P 500 ended 0.3% lower, largely on weakness in the energy sector where oil futures fell 2.9% on supply fears. Macy's got slammed Wednesday, falling 14% after a big miss on revenues and a weaker outlook going forward. The bond market and banks were closed in honor of Veteran's Day.</p> <p>Here’s what else you need to know:</p> <p>U.S. arrests cousins of Venezuela president in drug bust. The pair were charged with trying to transport 800 kilograms of cocaine into the country. The U.S. has long suspected that high-ranked government officials are involved in dealing drugs. Wall Street Journal (paywall)</p> <p>Apple in talks with banks to develop P2P mobile system. Move over Venmo and Square. Apple is in talks with major banks including JPMorgan and Wells Fargo to enable iPhone users to pay their buddies through Apple Pay. Wall Street Journal (paywall)</p> <p>Alert! Alert! Alert! Facebook's new app Notify has landed and will push as many news notifications as you want from a menu of 70 publishers. It's one of the biggest real estate grabs yet for the lockscreen on your phone. And it only takes 8 seconds to open a story you want to read. Hmmm. The Verge</p> <p>Alibaba hits new record on Singles' Day event with help of Frank Underwood and James Bond. The biggest Internet commerce event in the world raked in more than $14 billion. Actor Kevin Spacey helped promote the sale in a video as President Underwood. Reuters, South China Morning Post (paywall)</p> <p>Republicans show greater unity in substance-based debate. The consensus says Florida Sen. Marco Rubio and Texas Sen. Ted Cruz shone the brightest while the erstwhile frontrunner Jeb Bush wasn't terrible. Donald Trump was polite. The candidates sparred on immigration, security, and the economy and many invoked the legacy of Ronald Reagan. Politico</p> <p>AB Inbev snaps up SABMiller for $105.5 billion. Molson Coors may pay $12 billion for the part of MillerCoors it doesn't own -- paving the way for regulatory approval of the ginormous merger.  After weeks of backs and forths between the two companies, Anheuser-Busch InBev announced on Wednesday that it had formally agreed to purchase SABMiller for a whopping £69.78 billion ($105.5 billion). Cheers, people. Fortune/Wall Street Journal (paywall)</p> <p>New York State attorney general shuts down fantasy sports sites. Eric T. Schneiderman said DraftKings and FanDuel are gambling enterprises, illegal in the Empire State. The move is a major setback for the popular websites, under scrutiny after an employee inadvertently released confidential information and subsequently won $350,000. Last month, Nevada said the pair should be considered gambling sites. New York Times (paywall)<br /> You won’t believe this:<br /> Yaaas! My bestie is always on fleek. Dictionary.com has added more than 150 new words including: Bestie, Digital Citizen, Doge, Facepalm, Feels, Fleek, IRL, Sapiosexual, and Yaaas. Look 'em up! BuzzFeed</p> <p>&nbsp;<br /> Photo: Pete Bellis</p>
Mary Jo White and SEC to look into short sellers
Capital Markets
<p>The Securities and Exchange Commission chairman spoke to Bloomberg Television on Tuesday, revealing her concerns over short sellers.</p> <p>U.S. regulators are considering a move that would mean short sellers have to emerge from behind the veil of secrecy that currently cloaks their work. White expressed her concerns about negative comments from research firms that have increasingly affected share prices of late, in an interview with Bloomberg Televison.<br /> SEC to examine short selling disclosure rules more closely<br /> “It’s a complex sort of landscape, but it is an issue that has our intense attention,” said Mary Jo White during the interview, responding to a question about the potential for new rules governing short-selling disclosures by investors.</p> <p>Although White refused to mention specific companies in her response, one example of the impact of criticism on share prices is drug-maker Mallinckrodt Plc. Shares in the company fell 17% on Monday following criticism on Twitter from Citron Research, a commentary site run by Andrew Left. Renowned short seller Left’s Citron Research also provoked a rout of Valeant Pharmaceuticals International Inc. last month.</p> <p>Under existing rules hedge funds are required to report their long positions on a regular basis, but no rules govern their short positions. In contrast funds working in Europe have had to disclose shorts of over 0.2% of a company’s market value and up to regulators since 2012. Public disclosure is required for shorts that total 0.5%.<br /> Pressure growing for new rules<br /> “Short selling has a legitimate, positive purpose in the marketplace,” White said. “That’s very different, though, than if you manipulate by short selling.”<br /> Left makes his bearish positions public on Citron, and more disclosure might not affect his work. However the use of Twitter is set to come in for more scrutiny from White, who believes that a 140-character Tweet can do the same damage as a four hour presentation.<br /> The New York Stock Exchange has also appealed to the SEC for new rules forcing investors to reveal which stocks they are short selling. A letter dated October 7 asked the SEC to “bring light to a less transparent and increasingly consequential corner of the securities market.”</p> <p>At the same time it is important to recognize that short selling is one of many ways, including derivatives, that investors can bet against a particular stock.</p> <p>This article was originally published by ValueWalk. </p> <p>&nbsp;</p>
Daily Scan: Asian shares end mixed; China industrial output slumps
Capital Markets
<p>Updated throughout the day</p> <p>November 11</p> <p>Chinese shares climbed higher Wednesday after a mixed bag of economic data spurred bets on more stimulus measures from Beijing. The Shanghai Composite ended the day up 0.27%, while the Shenzhen Composite finished the session up 1.97%. Ever the contrarians, their Hong Kong-based H-share brethren tanked 0.67%. As for the rest, here’s how they did:</p> <p> Hang Seng Index: -0.22%<br /> Nikkei 225: +0.10%<br /> Straits Times Index: -0.22%</p> <p>Things are looking a whole lot better in Europe. The U.K.’s FTSE 100 has climbed 0.54%, while the German DAX and French CAC have surged 1.05% and 0.71% respectively. Draghi’s upcoming speech and the finalized megabrewer deal have no doubt aided in their lifting.</p> <p>Here’s what else you need to know:</p> <p>AB Inbev snaps up SABMiller for $105.5 billion. After weeks of backs and forths between the two companies, Anheuser-Busch InBev announced on Wednesday that it had formally agreed to purchase SABMiller for a whopping £69.78 billion ($105.5 billion). Cheers, people. Wall Street Journal</p> <p>Chinese industrial production misses estimates. China’s highly-anticipated industrial output figure came in at 5.6% for October, slightly weaker than the expected 5.8% reading and also below September’s 5.7% growth rate. The nation’s retail sales report however was slightly better, punching at 11% year on year versus a 10.9% expected climb. Still though, this should be enough to raise more than a few eyebrows over the country’s economic outlook. ForexLive</p> <p>Yuan hits near one-month low. China’s yuan was trading at 6.3617 against the dollar earlier this morning, slumping just a whisker shy of its one-month low after the PBOC fixed its midpoint rate 6.3614. This was the seventh time a row the bank has fixed the currency at a weaker level. SCMP (paywall)</p> <p>BOJ’s Harada defends stimulus program. In his first speech since he joined the Bank of Japan, policy board member Yatuka Harada defended the bank’s massive program by saying that it has boosted company earnings and lifted job growth by tanking the yen. He did however acknowledge that there were “worrying signs” in private consumption, and he did add that should the job market worsen, “it’s necessary to offer additional monetary easing without hesitation.” Reuters</p> <p>Consumer sentiment down under hits a new high. In a surprise score, the Westpac Melbourne Institute Index of Consumer Sentiment rose from 97.8 in October to 101.7 in November, leading Westpac’s Chief Economist, Bill Evans, to say: “This is a cracking result. Apart from the brief surge we saw following last May’s Budget this is the highest print for the Index since January 2014.” Melbourne Institute (pdf)</p> <p>Minneapolis Federal Reserve Bank names new president. Neel Kashkari, the man who led the controversial TARP program at the U.S. Treasury during the financial crisis, will replace Narayana Kocherlakota as president and CEO at the end of the year. The troubled asset relief program was used as a venue to bailout banks and major financial institutions. Kashkari, who is not an economist, worked at Goldman Sachs, making him the fourth of 12 presidents to join the Federal Reserve system. He also ran for Governor of California. Wall Street Journal (paywall)</p> <p>Three charged for massive financial hack. U.S. prosecutors charged one U.S. man and two Israeli men in relation to the cyber hack of JPMorgan, Fidelity, and other financial institutions between 2012 and 2015. The federal prosecutor called it “securities fraud on cyber-steroids.” Charges include hacking and identity theft. BBC</p> <p>Japan Inc. earnings have been pretty dog-eat-dog. Amid volatile commodity prices, automobile demand, and smartphone supplies, a serious zero-sum game has emerged in corporate Japan. Mitsubishi Corp – once the top dog among the big resource trading houses – has been knocked off the top spot by Itocho, while Sony emerged as the winner in its battle against Sharp. Nikkei Asian Review</p> <p>Died: Former West German Chancello
A step in China's economic journey
Capital Markets
<p>We emerge from the recent Chinese Communist Party Plenum with sketches of a new “five-year-plan.” Hurrah! There is always much fanfare around these events—not least in the investment community. We will no doubt hear the sentiment that China is a policy-driven stock market and so all the short-term traders are keen to see which sectors and industries are in favor. Then begins the game of who might get a subsidy, a contract or beneficial regulation.</p> <p>Fair enough, if that is your game.</p> <p>But I would argue that much of what has come out of the plenum is hardly a surprise. And you don’t need to think of China in terms of a policy-driven market. What guides the policymakers, after all, are the hopes and aspirations of over 1 billion people. That happens to be what drives corporate profits, too. So, China is a market that is driven by the population at large and you are likely to give your chances of investment success a boost by focusing on what matters to them.</p> <p>There were a couple of big non-surprises during the recent Plenum—growth remains a priority. Well, that is hardly new news. But it is good to be reminded that China is still growing—6.5% annual growth will probably be the target. This might seem a tragedy to those who became accustomed to 10% annual growth. But given that academic economists in the U.S. and Europe are publicly discussing “secular stagnation” these days, 6.5% seems pretty good.</p> <p>The end of the single-child policy is not exactly a well-kept secret. The Communist Party had been hinting at this and loosening such regulations for some time, in response to an aging and, ultimately, shrinking workforce. What effect will it have? Well, the birth rate might increase. But China is also getting to the point where it is fairly wealthy and birth rates are going to be presumably pretty low, and comparable to the rest of North Asia. The workforce can be “made younger” and increased by immigration or by overseas investment, both of which are already taking place.</p> <p>But we anticipated a couple of the initiatives in some of our recent commentaries on the region. In October, I wrote about “Asia’s Political Divide” and our October issue of Asia Insight discussed the “Asia Lens on Global ESG.” We see an increased focus on the welfare state, on the one hand, and environmental protection on the other. On welfare, the five-year plan intends to lift 70 million people out of poverty by 2020, through an improved social safety net: expanded pension coverage and accident and illness insurance protection. In addition, the rhetoric of environmental protection should see changes in taxation, more investment into non-fossil fuel energy, and more time and money spent cleaning up China’s air and water. Funding for such programs tied to social welfare was also highlighted with the decision to transfer more State assets currently, held at the government level, to its existing social security fund. China has also agreed to reduce emissions per unit of GDP by 40% to 45% by 2020, compared to 2005 levels and also to increase the share of non-fossil fuel energy to 15% within the same time frame. China has also committed to peak its carbon dioxide emissions by approximately 2030 and strive to hopefully reach that even earlier.</p> <p>China’s push for further economic integration and its efforts to address income equality continues in its new communiqué, with specific reference to access to nationwide education and vocational training. An initiative first proposed in 2013, known as “One Belt; One Road” will support this national push for equality, and attempt to address the geographical inequalities between central and western provinces from their counterparts along the eastern seaboard. In addition to the communiqué, China has also released a document highlighting reforms in its rural areas, specifically looking at the ability of farmers to monetize land rights. This has long been a sticking point, and should promote further urbanization.</p> <p>Why is this not a surprise? Well, China has been very successful at
Daily Scan: JPMorgan hackers charged; Fidelity marks down Snapchat stake
Capital Markets
<p>Updated throughout the day</p> <p>November 10</p> <p>The Nasdaq fell 0.2%, bouncing back slightly after a warning on Apple iPhone sales sent investors skittering. Apple's shares fell 3.2% Tuesday to $116.73. The Dow gained 0.2%, as did the S&amp;P 500. Credit Suisse said supply chain orders were slowing, indicating a weakening in demand. On the earnings scene Tuesday: Homebuilders D.R. Horton rose 2.6% on strong earnings and Beazer Homes rallied 3.26% after it reported robust quarterly numbers. Financial information purveyor Markit was slightly lower after meeting profit expectations but the stock is up 26% in the last 12 months.</p> <p>Here’s what else you need to know:</p> <p>Three charged for massive financial hack. U.S. prosecutors charged one U.S. man and two Israeli men in relation to the cyber hack of JPMorgan, Fidelity, and other financial institutions between 2012 and 2015. The federal prosecutor called is "securities fraud on cyber-steroids." Charges include hacking and identity theft. BBC</p> <p>Fidelity marks down Snapchat investment. Fidelity, one of the most high-profile investors in the four-year-old company, wrote down the value of its stake by 25% in the third quarter. Each share had been valued at $30.72 at the end of June, but fell to $22.91 valuation at the end of September. Financial Times</p> <p>New York governor supports minimum wage demonstration. Gov. Andrew Cuomo plans to institute a $15 minimum wage for all state workers, making New York the first state to mandate a higher minimum wage for employees. Cuomo's actions came the day fast food workers across the country went on strike for a $15 hourly wage. New York Times (paywall)<br /> Minneapolis Federal Reserve Bank names new president. Neel Kashkari, the man who led the controversial TARP program at the U.S. Treasury during the financial crisis, will replace Narayana Kocherlakota as president and CEO at the end of the year. The troubled asset relief program was used as a venue to bailout banks and major financial institutions. Kashkari, who is not an economist, worked at Goldman Sachs, making him the fourth of 12 presidents to join the Federal Reserve system. He also ran for Governor of California.  Wall Street Journal (paywall)<br /> Ten-year notes going like hotcakes at $24 billion auction. The U.S. Treasury securities sold at a yield of 2.322%, the highest in five months. Foreign demand was robust at 60.5% and direct bidding rose to 14.3%, the highest in six months.   Wall Street Journal (paywall)</p> <p>Died: Former West German Chancellor. Helmut Schmidt helped make West Germany an economic leader between 1974 and 1982. He was 96. Schmidt was a popular German personality, and was even given exemption from Germany's public smoking ban. The Guardian</p> <p>Valeant call with investors, Take 2. The beleaguered pharmaceutical company held a call Tuesday morning, announcing that it will close specialty pharmacy Philidor by the end of January, which would hit sales of its dermatological drugs. The stock fell 7% after the call but is now marginally higher. Valeant's first call on October 26 didn't do much to help the stock either. Valeant has lost two-thirds of its value since August. CNBC</p> <p>Catalonia votes to break from Spain. Separatists in the Catalonia regional parliament voted 72 to 63 to form their own European country. Madrid says "no way," but Catalonia, which has its own language and culture, says this is the start of an 18-month process that will include forming a Catalan tax authority and social security. NPR</p> <p>Modigliani painting sells for $170.4 million. "Nu couché" fetched the second highest price ever paid for an artwork at an auction. The Christie's sale allayed worries that the art market might be getting soft. NBC News</p> <p>Facebook likely to release news app Notify this week. The new app will let users know when their favorite news outlets have published articles. Partners include Vogue,  Mashable, Washington Post, and CNN. The Verge</p> <p>&nbsp;</p> <p>Cameron warns EU over U.K. terms. Prime Minister David Camer