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Oppenheimer analysts met with GoPro management; here's what happened
Capital Markets
<p> Shares of GoPro Inc (NASDAQ: GPRO) touched new all-time lows of $31.32 last week.</p> <p> Andrew Uerkwitz of Oppenheimer met with GoPro's management team and the overall tone was "upbeat."<br /> Uerkwitz maintained a Perform rating (no assigned price target) due to his "more conservative" view of the segment.</p> <p>Andrew Uerkwitz of Oppenheimer recently met with GoPro's Chief Financial Officer Jack Lazar and VP of Corporate Development Colin Born.</p> <p>According to Uerkwitz, the overall tone of the meeting was "upbeat," as management was "positive" on GoPro's market position and opportunity. Specifically, the Hero4 Session is expected to be the company's "most prominent" piece of new hardware for 2014 given its ...</p> <p>Read the full story available on Benzinga.com.</p> <p> Photo: Keegan Slattery<br /> &nbsp;</p>
Daily Scan: Chinese equities return to earth; Japan holds gains
Capital Markets
<p>Updated throughout the day</p> <p>September 17</p> <p>Good evening everyone. After heading for the stratosphere throughout the day, mainland shares began experiencing problems in the last hour trading and eventually wiped out all its gains. The SHCOMP finished the day down 2.1% while the SZCOMP ended the session down 1.48%. Hong Kong’s Hang Seng Index unfortunately fell victim to the selloff as well, though the H-shares Index – surprisingly – managed to hold on to its gains:</p> <p> Hang Seng Index: -0.53%<br /> H-shares Index: +0.65%<br /> Nikkei 225: +1.43%<br /> Topix: +1.31%</p> <p>Over in Europe, stock indices are beginning to dip lower with T-minus nine hours remaining until the Fed decision. The U.K.’s FTSE 100 is down 0.2%, Germany’s DAX slipped 0.1%, while France’s CAC dipped 0.2%. Here’s what else you need to know:</p> <p>Japan upper house OKs defence bills amid chaos. A panel in Japan's upper house on Thursday approved legislation for a security policy shift that would allow troops to fight abroad for the first time since World War Two, a ruling party lawmaker said.Opposition lawmakers tried to physically prevent the vote in a chaotic scene carried live on national television. The legislation has sparked huge protests from ordinary voters. Channel News Asia</p> <p>Another “coup”in Burkina Faso. Presidential guard officers in Burkina Faso have announced the dissolution of the transitional government. A new "national democratic council" has taken control, an officer said on state television. Interim parliament speaker Cheriff Sy said the move was "clearly a coup". BBC</p> <p>Singapore’s non-oil exports tumble 8.4% year-on-year. The decline in NODX (non-oil domestic exports) is due to a contraction in the export of both electronic and non-electronic products.  Electronic and non-electronic domestic exports fell 2.7% and 10.6% in August, respectively. Channel News Asia</p> <p>Chile coast rocked by 8.3 magnitude quake. At least five people were killed and 1 million evacuated from affected areas, when a powerful 8.3-magnitude earthquake struck Chile Wednesday. CNN</p> <p>Desperate migrants clash with police in Hungary. Hungarian riot police responded to one of the worst bursts of violence that this tense refugee summer has seen. Agitated migrants at the border crossing were pelted with water cannons, head-cracking batons and both tear gas and pepper spray. New York Times (paywall)</p> <p>Japan debates its pacifist policy - with a round of fisticuffs. Scuffles broke out in Japan's upper house today ahead of a vote on a controversial move by the government to expand the role of the armed forces. The bills would amend Japan's pacifist constitution to allow it to defend its allies overseas even when it is not under attack. BBC</p> <p>U.S. CPI falls for first time since January. In a massive stumbling block for Yellen et cie, America’s consumer price index contracted 0.1% in August while on a year on year basis, August CPI climbed just 0.2%, essentially unched from July. </p>
Daily Scan: Stocks rally before Fed announcement
Capital Markets
<p>&nbsp;</p> <p>Updated throughout the day</p> <p>September 16</p> <p>Good evening,</p> <p>The Federal Reserve began its two-day policy meeting on interest rates Wednesday. Everyone is wondering whether the Fed will raise interest rates for the first time in nine years. Over at Quartz, Matt Phillips asks a more basic question: Does the central bank have the firepower to make it happen? The world of finance has changed dramatically since the 2008 crisis -- in part because of Fed moves. Many of its traditional tools are no longer likely pack the same wallop. What's a central bank to do? U.S. stock futures were muted ahead of the rate decision, to be announced Thursday. Stocks rose Wednesday, riding off gains from energy. The Dow was up 0.8%, the Nasdaq gained 0.6%, and the S&amp;P 500 rose 0.9%. Oil jumped more than 5%, closing above $47/barrel. </p> <p>&nbsp;</p> <p>Here is what else you need to know:</p> <p>Texas teen arrested for making a clock. Ahmed Mohamed, a 14-year-old high school student, found himself in handcuffs after bringing a digital clock that he'd made from a pencil case to school. The school and local police accused him of creating a hoax bomb. The police say Mohamed should have told them more than the fact that the item in question was just a clock. On the upside, the attention from the arrest got Mohamed an invitation to the White House from President Obama. CNN</p> <p>GM close to settlement with Justice Department over faulty ignition switch. The Justice Department is expected announce a criminal settlement with General Motors this week that will likely force GM to pay millions in fines. GM is in trouble for failing to recall millions of cars with a defective ignition and then covering it up. Wall Street Journal</p> <p>GOP debate, part deux. Carla Fiorina joins 10 male candidates who will hash out the key issue of the day: How in the world did Donald Trump become the No. 1 Republican candidate? Tune in at 8 p.m. ET</p> <p>FedEx earnings disappoint as freight demand drops. The global carrier got hit by a slowdown in trade. FedEx lowered the outlook for the year, to $10.40 to $10.90/share for the year ending next May, down from previous guidance of $10.60 to $11.10/share. Also hurting profits: Higher costs on its relatively new ground delivery business. MarketWatch</p> <p>Gold surges as consumer price index weakens. The metal is on pace for its biggest one-day gain in a month, up 1.5%. The consumer price index in August fell 0.1%, well short of the Fed's target of annualized inflation of 2%. The news good convince the FOMC members who are meeting Wednesday and Thursday to think twice before raising interest rates. MarketWatch</p> <p>No pay raises for middle income earners in 2014. The median household income was a smidgeon higher at$53,657 from 2013 when the number stood at $54,462, the U.S. Census Bureau reported. The number of Americans living at the poverty level was also unchanged at 14.8% at 46.7 million vs 46.3 million a yea</p>
Apple looks to new markets for customers -- but does it fit?
Capital Markets
<p>The launch of Apple Inc. (NASDAQ: AAPL)'s latest array of products has raised many questions about whether or not The Fruit has bitten off more than it can chew. Its souped-up iPad Pro has been designed to fill the needs of businesses while new versions of the Apple Watch are expected to tap in to the luxury market.</p> <p>As Apple has always had mass appeal to the general public, some are questioning whether the firm can reach into these new spaces and still retain its primary customer base.<br /> Luxury Watch<br /> Apple's watches have been accepted enthusiastically as an improvement over previous wearable technology. However, some expect that its $1,500 luxury ...</p> <p>Read more at Benzinga.<br /> Photo: Niall Kennedy</p>
For Wynn, seeing $258m stolen from its Macau casino is not the worst of it
Capital Markets
<p>Lady luck is not smiling on gaming giant Wynn Resorts. Last week it was uncovered that a reported $258 million was stolen from its Macau casino in what looks like an inside job. But this is not the worst part.</p> <p>For a start, the money was not actually stolen from Wynn. The victim was a junket operating inside  the casino, Dore Group, which is said to have been ripped off by its own employees. In Macau junkets operate as third parties, bringing in cash for high rollers to use as leverage for their bets. Dore makes up a quarter of Wynn’s junket volume.</p> <p>The details as to how much money was actually stolen are also murky, as this Barron’s report explains. The trust system that operates in the junket financial system means that the money was never actually on Dore’s books therefore does not represent a loss of liquidity. Gaming research firm Union Gaming meanwhile reports that police figure of $258 million could be overstated due to a misunderstanding over currency conversion.</p> <p>But that doesn’t mean US-listed Wynn is not feeling the pain. The theft has triggered a massive 10% drop Wynn’s stock over the past week. That’s roughly $700 million wiped from its market value - a lot more than was pilfered from its partner's vaults.  </p> <p>This is not the worst seen in the Las Vegas of the East. According to Business Insider, a $1.3 billion heist from the junket Kimren in April 2014 - which analysts call Macau's "Lehman Moment." - dealt the biggest blow to Macau’s high roller market. </p> <p>But even without Asia’s Ocean Eleven smuggling out cash out of Wynn’s  front door, thing have been pretty lousy for Macau’s casino trade as a whole. Government figures show that revenues each month have been down 30% to 50% year-over-year. This is not just down to China's general economic slowdown, but also President Xi Jinping's anticorruption drive. China’s high rollers, it seems, just can’t stomach the risk anymore.</p> <p>Photo: Derek Tam</p>
Checking China's real crisis
Capital Markets
<p>The world’s investors seem to have changed their collective mind. Recent panic selling implied an implosion in China and recession elsewhere. The sudden turn to recovery and moderation indicates something much less pessimistic, if not absolutely upbeat. Since markets, as always, remain vulnerable to future emotional outbursts of this kind, it might help to take this moment of relative calm to examine some of the issues that contributed to the recent panic and that might contribute to a future panic. Of one particular importance is China’s by now long-standing real estate crisis.</p> <p>Though the evidence is muddled, statistics nonetheless yield a picture that should at once sober optimists and embarrass pessimists. On the side of bad news, there is no denying that China faces a significant real estate bubble. The adjustment to it will take a considerable time, and inevitably will have negative economic and financial implications. On the side of good news, it is clear that the adjustment has already begun and is proceeding in an orderly fashion that promises to avoid the kind of financial collapse many fear.</p> <p>The Bubble’s Extent<br /> The evidence of excess and all that goes with it is clear. Between 2012 and 2014, China engaged in significant overbuilding. By early last year, spending on residential construction had reached an unsustainable 10.4% of the country’s gross domestic product (GDP). That is the second highest figure on record for any country. (Only Spain’s 2006 bubble, which took such spending to 12.5% of GDP, surpassed it.) China’s rate tops Japan’s 1973 bubble peak at 8.7% of GDP and certainly this country’s 2005 peak at 6.5% of GDP. China’s breakneck pace of residential construction was at its 2013 peak in increasing floor space at a clearly unsustainable annual rate of 50%. It had increased the per-capital available floor space in China by 20%, to some 30 square meters, far above any other emerging economy and even some developed economies. Spain, for instance, has only about 27 square meters of living space per capita, and Japan has only some 22 square meters. Only the rich nations of Europe, the United States, Canada, and Australia offer their populations more. This construction so far exceeded sales that unsold inventories reached astronomical levels of over two year purchases.</p> <p>Debt problems inevitably have accompanied this kind of overbuilding. Though government debt in China is still a relatively low 25% of GDP, real estate-related debt in recent years has exploded to more than twice that figure. At last measure, almost half of all outstanding credit in China was somehow related to real estate. The excesses promise to force a significant portion of this debt into default, with some estimates indicating that a fifth of all the real estate debt will fail in one way or another. Since that figure amounts to nearly one-tenth of the country’s GDP, the legacy of this overbuilding cannot help but strain Chinese financial institutions, investors, financial markets generally, and, consequently, overall economic growth prospects. The need for construction cutbacks will further impair growth prospects, not the least because residential building has until recently accounted for so much of China’s economic activity.</p> <p>Still, It Is Not the End of the World<br /> As strained as all this looks, and is, much suggests that China can avoid the implosion many from time to time have feared. After all, the evidence suggests that the adjustm</p>
Daily Scan: China investors rush in for best performance in 3 weeks; Asia finishes up
Capital Markets
<p>Updated throughout the day</p> <p>September 16 </p> <p>Good evening everyone. Investors rushed to the Chinese markets in the afternoon, ahead of a move by the China Securities Regulatory Commission to clamp down on margin lending.  The Shanghai benchmark was up almost 5% at market close, and the Shenzhen up 6.5%. Hong Kong's Hang Seng index meanwhile finished up  2.38%. Other Asian markets also saw lift today, taking their cue from Wall Street, but the rally was tempered in the region as investors remained cautious ahead of the Federal Reserve interest rate hike: </p> <p> Jakarta Composite: -0.33%<br /> KLSE Composite: +0.46%<br /> Nikkei 225: +0.81%<br /> Straits Times: +1.01%<br /> Seoul Composite: +1.96%</p> <p>Here is what else you need to know:<br /> Shares of Chinese brokerage Citic fall on police probe. Shares of China's largest brokerage, state-owned Citic Securities, fell as much as 4% after it said three executives, including its president, were under police investigation. The executives are being investigated for suspected insider trading and "leaking inside" information. BBC<br /> Macau's Wynn Resorts loses 10% on reports of $258m casino heist The gambling giant took a pounding on the markets after it was found a large junket group operating out of its Macau casino may have lost as much as 2 billion Hong Kong dollars ($258 million). Barron's<br /> White House Confirms Chinese President's first state visit. Chinese President Xi Jinping will make a state visit to the U.S. at the end of the month, the White House confirmed on Tuesday. The trip will be on September 25 and reciprocates President Barack Obama’s trip to Beijing last November.<br /> Hewlett-Packard to cut up to 10% of workforce, 30,000 jobs. The move is part of an effort to split the company into two units. The cuts will come in Hewlett Packard Enterprise, which is splitting from the firm's printer and personal computer business, and and are expected to save $2.7 billion in annual costs. The restructuring will cost $2.7 billion to implement. BBC</p> <p>China puts up gas rigs in disputed in East China sea. Pictures of Chinese structures in the East China Sea have been captured by the Japanese government showing signs of natural gas production.The unilateral development in the contested area is likely to spark fresh row between the two countries. Nikkei </p> <p>Nintendo picks new president after death. Long-serving Nintendo executive Tatsumi Kimishima will be appointed president of the firm following the death in July of Satoru Iwata. Kimishima has been a managing director at the firm since June 2013, and joined in 2000.BBC</p> <p>North Korea tries to push America’s button; its working. The U.S. has warned North Korea to refrain from "irresponsible provo</p>
European banks battle old enemies and get it wrong again
Capital Markets
<p>I hate to say this, but European banks have a penchant for adopting similar strategies—and usually strategies that deal with yesterday’s problems instead of tomorrow’s opportunities. The recent flight from investment banking is a case in point. Swiss, German, French and British banks all have cut back their investment banking operations sharply. Some of them are embracing instead the mantra of “wealth management”.</p> <p>Rich folk, it appears they believe, will pay up for service, even though there is little magic to so-called wealth management. Wealth management is little more than portfolio diversification, combined with good tax strategies for passing wealth to succeeding generations. Asset allocation, low-cost mutual funds, and a good tax accountant or lawyer are what is called for. High management fees are not required, though perhaps the rich are willing to pay them on the theory that you get what you pay for. And maybe some like to boast about which gold-plated bank has their money.</p> <p>I do admit that a profitable part of wealth management is lending wealthy customers money they do not need. The customer wants a new Rolls, no problem. The customer wants a new yacht or an expensive painting, why spend money? Credit is available, so long as there are securities in the vault.</p> <p>There used to be another aspect to European wealth management: Tax evasion through placing funds in secret accounts and tax haven jurisdictions. There still is some of that, and it never will be entirely eradicated. But the world is moving away from permitting such shenanigans, and in twenty or so years, the jig likely will be up. It is pretty much up for U.S. taxpayers already.</p> <p>Too many banks focusing on wealth management is likely gradually to reduce fees and profitability for many of them. Building a boutique bank like Julius Baer based on wealth management still may make sense. A Credit Suisse based on wealth management will have to be a much smaller Credit Suisse.</p> <p>But if we look to the future of European finance, we can see that Europe is going to need stronger and more diversified capital markets. That is the direction in which the world naturally progresses. Traditional banks are relatively inefficient intermediators. It is naturally inefficient or dangerous to engage in spread lending and its attendant maturity transformation. That is why traditional banks have had to be subsidized—and somehow recapitalized when they fail.</p> <p>Capital markets, by contrast, match investors and borrowers/equity sellers, usually in less leveraged ways. Capital markets lenders and borrowers lose money or fail without systemic consequences.</p> <p>Yet what is happening in Europe is that the banks are impairing their ability to participate in capital markets and the authorities are trying to impair European capital markets by regulating “shadow banks”. Thus, by learning what they see as the lessons of the last crisis (they are wrong even on that, by the way), they are impairing the ability of European businesses and consumers to obtain funding. And the banks are reducing their future profitability.</p> <p>The American banks and investment banking boutiques will be only too glad to fill the void and to try to get around whatever rules the Europeans make to try to prevent efficient funding mechanisms.</p> <p>In wondering why the European banks are shooting themselves in the foot, I am guessing that they have not understood that the investment banking business as practiced in the 2000s was really two very different businesses: Trading, on the one hand, which is capital intensive and, being a zero sum game, is dangerous; and the combination of broking, underwriting and M&amp;A that is highly profitable, uses relatively little capital, and has dangers only to the extent that personnel costs are high. Managements must understand that simple distinction. But if they do, then I do not understand why they would abandon a capital-efficient, potentially highly profitable business, unless they just think they cannot compete with American ag
Daily Scan: Stocks rally ahead of Fed decision; Raul Castro headed to NYC
Capital Markets
<p>Updated throughout the day</p> <p>September 15</p> <p>Good evening.</p> <p>U.S. stocks rallied just before the Federal Reserve begins discussions about whether to raise interest rates. The Dow had a 1.4% boost Tueday, the S&amp;P 500 gained 1.3%, and the Nasdaq added 1.1% after steady gains all day. Oil gained more than 2.5%, ending the day above $45/barrel. In Asia, the Shanghai Composite closed down 3.5%, and Hong Kong's Hang Seng fell 0.6. Meanwhile, the Stoxx Europe 600 closed with a 0.92% gain.</p> <p>Here is what else you need to know:</p> <p>Cuban President Raul Castro headed to New York. Castro will address the U.N. General Assembly later in September. The visit will be the first to the U.S. for Castro as the Cuban head of state. Castro's brother Fidel holds the record for longest U.N speech, at four and a half hours. Reuters</p> <p>Survey says: Insiders are beating the market before event disclosures. Researchers at Columbia and Harvard universities found that executive and board members regularly beat the market with returns from buying and selling stock before they disclose significant events. Wall Street Journal</p> <p>Judge all you want. Facebook is adding a "dislike" button. Founder Mark Zuckerberg revealed that the social media network is "very close" to having a dislike button ready for user testing. Since the "like" button was introduced in 2009, users have steadily requested a dislike button. BBC</p> <p>Died: Subway co-founder Fred DeLuca. The cause of death has not been revealed, but the 67-year-old DeLuca was diagnosed with leukemia in 2013. DeLuca helped found the sandwich chain in 1965, and had just recently turned the day-to-day operations of the company over to his sister. New York Times (paywall)</p> <p>House considering a lift on the oil exports ban. Republicans are planning to vote in the coming weeks on a bill to lift the 40-year ban on oil exports. Oil companies have been lobbying Congress to allow them to benefit from the domestic oil boom. Wall Street Journal</p> <p>Credit Suisse nears deal to settle claims over dark pool Credit Suisse is expected to pay at least $80m to settle allegations that it misled clients about its dark pool, trading venues meant to allow asset managers  to trade large blocks of shares without moving the price against them. Financial Times.<br /> Suspected Mississippi gunman dead after shooting himself. A professor who allegedly killed his live-in girlfriend before shooting and killing a fellow professor on the campus of Delta State University killed himself during a police pursuit. Washington Post<br /> North Korea Nuclear site "in operation". North Korea says its main nuclear facility, the Yongbyon complex, has resumed normal operation</p>
Daily Scan: China markets slump, oil prices swing
Capital Markets
<p>Updated throughout the day</p> <p>September 15</p> <p>Good evening everyone. China has now posted it biggest two-day fall in three weeks. The Shanghai Composite Index closed for the day down 3.5%, meaning it has now lost 7% of its value this year. The Guardian reported today that economists are now concerned that the Chinese economy is weakening faster than the official data suggests, showing growth of around 7% this year. Research from energy consultancy Wood Mackenzie suggests the Chinese economy grew at an annual rate of 5.3% in the second quarter of 2015, and just 4.5% in Q3. Here is how the markets ended elsewhere in Asia: </p> <p> Hang Seng: -0.49%<br /> Jakarta Comp: -1.01%<br /> KLSE Comp: +0.46%<br /> Nikkei 225: +0.34%<br /> Straits Times: -0.92%<br /> Seoul Comp: +0.32</p> <p>The Wall Street Journal reports that oil prices were also choppy in Asian trade today. The Brent crude swung between gains and losses on the back of volatile Chinese markets amid signs the US oil producers are suffering more from low prices.Here is what else you need to know:</p> <p>Alibaba takes a hit after Barron's article rebuttal. US investors sent shares of Alibaba Group stock tumbling Monday following a critical article from Barron’s - despite a detailed rebuttal,  The stock fell as much as 4.9% Monday, touching $61.48. Wall Street Journal.</p> <p>Credit Suisse nears deal to settle claims over dark pool Credit Suisse is expected to pay at least $80m to settle allegations that it misled clients about its dark pool, trading venues meant to allow asset managers  to trade large blocks of shares without moving the price against them. Financial Times.<br /> Malaysia wants state companies to repatriate foreign earnings. Malaysia wants its state-owned funds to repatriate some earnings from the more than 500 billion ringgit ($115 billion) worth of investments made abroad. This is seen as a way to help stem the decline of the nation's currency, which has weakened by 26.3% against the dollar over the past year. Nikkei<br /> North Korea Nuclear site "in operation". North Korea says its main nuclear facility, the Yongbyon complex, has resumed normal operations. The country was improving its nuclear weapons "in quality and quantity", a state-run news agency said. Yongbyon's reactor was shut down in 2007. BBC<br /> Beijing builds third airstrip on contested South China Seas islands. China appears to be building a third airstrip in contested territory in the South China Sea, a US expert said on Monday, citing satellite photographs taken last week. Experts say the strip is long enough  for most Chinese military aircraft, giving Beijing greater reach into Southeast Asia. </p>