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(Bloomberg Opinion) -- From the perspective of the Resistance, the scoops were both terrifying and vindicating: An intelligence official told lawmakers last week that the Russians were meddling again in U.S. elections and seeking to re-elect President Donald Trump. This infuriated the president, who abruptly fired the current director of national intelligence, Joseph Maguire, and replaced him with a loyalist, U.S. Ambassador to Germany Ric Grenell.Unfortunately, there is less to this story than Trump’s opponents would like. There is no formal intelligence assessment, and the new DNI is only temporary. This is not a case of the president trying to suppress or distort intelligence.The Trump vs. the Intelligence Community narrative is so appealing to the resistance because it fits two of its favorite themes. The first is that Trump already colluded once with the Kremlin to win an election, and will again. The second is that Trump is now empowered, after the Senate acquitted him in the impeachment trial, to purge the government of his enemies.As Representative Adam Schiff tweeted, referring to stories in the New York Times and Washington Post: “We count on the intelligence community to inform Congress of any threat of foreign interference in our elections. If reports are true and the President is interfering with that, he is again jeopardizing our efforts to stop foreign meddling. Exactly as we warned he would do.”True, Trump provides opponents with ample ammunition for their narratives about Russia and vengeance. But Schiff is the chairman of the House Intelligence Committee. If anyone would know about an assessment that Russia was trying to re-elect Trump, he would. So was there such an assessment?In fact, Schiff — who was present at the briefing in question — knows that there is no formal intelligence finding that Russia is meddling on behalf of Trump. Administration and House Republican sources tell me that the intelligence official who was briefing the committee went “off script” when asked about Russia’s preference for Trump in the presidential election. No other representatives from the intelligence community at the briefing backed up her assertion, these sources say, nor did the briefers provide specific intelligence, such as intercepted emails or conversations, to support the claim.Jake Tapper of CNN is apparently hearing a similar story. On Friday he tweeted that one of his sources says the intelligence did not say the Russians had a “preference,” only that Trump “is someone they can work with, he’s a dealmaker.” The second narrative involves the decision to make Grenell the interim director of national intelligence. It’s true that Grenell lacks intelligence experience and that he has been an outspoken supporter of Trump. And while reports say Maguire was fired over last week’s briefing, White House officials tell me otherwise, noting he was scheduled to leave next month anyway. (Although the departure of Maguire’s principal deputy, Andrew Hallman, suggests deeper tensions with the White House.)Regardless, Grenell would be an odd choice if Trump wished to downplay Russian threats. To start, he is a longtime Russia hawk. Last year, for example, he warned German companies building the NordStream II pipeline between Germany and Russia that they would risk U.S. sanctions if they went forward with the project. More important, Grenell himself has said he will only be acting director, and that he expects the president will soon nominate someone else for the position. Intelligence assessments involve the input of 16 agencies and often take months to complete, so it would be near impossible for someone serving as acting director for a short period of time to suppress or alter intelligence products. (Maguire, by the way, was also an acting director.) So appointing Grenell may be less an effort to censor intelligence than a bit of hostage politics with the Senate. If the Senate doesn’t confirm Trump’s nominee, Grenell can serve for months. The two leading candidates for the job are Representative Chris Stewart, a Republican from Utah who serves on the House Intelligence Committee, and Pete Hoekstra, the current ambassador to the Netherlands and former Republican chairman of the House Intelligence Committee. Both would likely face opposition from Democrats. The White House is hoping to force Democrats to hold their noses and not delay the confirmation.(Updates ninth paragraph to include news of departure of deputy director of national intelligence.)To contact the author of this story: Eli Lake at email@example.comTo contact the editor responsible for this story: Michael Newman at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Eli Lake is a Bloomberg Opinion columnist covering national security and foreign policy. He was the senior national security correspondent for the Daily Beast and covered national security and intelligence for the Washington Times, the New York Sun and UPI.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The British pound has fallen during most of the week but seems to be paying attention to the 1.29 level as support. Nonetheless, this is a very messy market due to the fact that the US dollar is on the other side of it.
Texas Instruments (TXN) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.
The British pound bounced a bit during the trading session on Friday as it has of course gotten a bit oversold. At this point in time though, it looks very likely to be choppy.
Morgan Stanley's (MS) recently-announced acquisition with E*TRADE Financial (ETFC) reflects the companies' strategic efforts for business expansion, unlocking growth opportunities.
The IATA forecasts $27.8-billion loss in revenues for Asia-Pacific carriers during 2020 with the majority to be borne by Chinese airlines.
A daily overview of the top business, market, and economic stories to watch in the UK, Europe, and abroad.
(Bloomberg) -- It was hard for James Gorman to contain his exuberance.The chief executive officer of Morgan Stanley had just ended a decade-long drought of major takeovers by top U.S. banks with his surprise deal to buy E*Trade Financial Corp. for $13 billion. Across the industry, where it’s long been taboo to get “too big,” speculation was erupting that conditions had finally lined up for a wave of similarly hefty acquisitions.So when analysts asked how it all came together, the normally staid CEO paused for a moment.“I’ve just strained my vocal cords with all the excitement,” Gorman said on a conference call Thursday. “I must have been screaming from the rooftops or something.”Morgan Stanley’s announcement is being interpreted by analysts, investors and investment bankers as just the start of a long-predicted series of deals big enough to reshape the upper echelons of the U.S. financial industry. Many of the largest banks are wielding highly valued stock at a time that Silicon Valley innovators are looking to wrest away business. Mergers and acquisitions are one way for banks to both scale up and adapt.“The financial performance of the industry allows acquirers to transact from a position of strength,” said Anu Aiyengar, co-head of global M&A at JPMorgan Chase & Co. “More broadly, digital disruption is making it more important to optimize cost and efficiency.”Some observers also point to the prospect that regulation may stiffen after U.S. elections in November if a Democrat wins the presidency. The field of candidates seeking to challenge Donald Trump includes several who have vowed to rein in -- or even break up -- “too big to fail” banks.More than 40% of top bank executives said in a November study by EY that they planned to actively pursue a deal in the following 12 months. Roughly one-fifth of those executives said they’d use a merger to improve their talent pool, while others said they’d use it to enter new markets. They will have to announce any significant takeovers soon to clear regulatory hurdles and complete transactions by the start of 2021, or potentially take their chances with a new administration.‘Big Chance’Gorman had eyed the online retail brokerage for almost 20 years before everything lined up. For Morgan Stanley, the all-stock deal lands E*Trade’s direct-to-consumer digital capabilities as well as $360 billion of client assets. Gorman reassured analysts that his firm is already conferring with regulators -- such as the Federal Reserve, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. -- to win approval for the deal.“We wouldn’t be entering into this if we didn’t think, from a regulatory perspective, this would be viewed favorably,” Gorman said. “That’s not something we would put to big chance.”In recent years, regional lenders have made most of the transformational deals in U.S. banking as they try to bulk up to improve earnings, weather the impact of low interest rates on margins and fend off tech startups. Last year saw the combination of SunTrust Banks Inc. and BB&T Corp., which emerged as Truist Financial Corp., the sixth-largest U.S. commercial bank.While Gorman said he still sees E*Trade as a so-called bolt-on acquisition, the price is significantly larger than the takeovers the largest banks have emphasized in recent years to augment business lines. It may open the way for rivals to seek larger targets too.“It’s all about growth,” said Julien Courbe, PwC’s financial services advisory leader in New York. “A lot of the banks have addressed their cost structure and continue to do so, but they are looking to get volume and scale, and that’s forcing considerations for deal activity.”Other IndustriesMatchmakers have proposed a wide variety of large takeovers by big U.S. banks over the past decade only to be disappointed. Some suggested, for example, that credit-card lender Discover Financial Services could make a juicy target for a variety of large consumer banks. Reuters Breakingviews floated the idea two years go that Goldman Sachs Group Inc. should buy Bank of New York Mellon. When ValueAct Capital Management later bought a stake in Citigroup Inc., analysts suggested the activist fund could push the bank to buy another of its holdings, Alliance Data Systems. The deals never materialized.It’s not just banks seeking to grow through mergers and acquisitions. The two biggest U.S. life insurers, MetLife Inc. and Prudential Financial Inc., are both open to acquisitions even as they seek to divest in slower-growth areas. Both firms struck deals last year, with Prudential agreeing to buy a startup consumer platform for $2.35 billion, while MetLife acquired a pet insurance administrator and a digital estate planning service.Leaders of payments companies also have said they’re looking to participate in the industry’s consolidation. Mastercard Inc.’s CEO Ajay Banga compared his business development team to “gnomes in Santa’s shop” that bring him as many as 60 deals in a year to consider. FleetCor Technologies Inc., a fuel card provider, has said it has a list of “big elephants” it hopes to bag.Wealth managers and robo-advisers are also appealing targets because of their relatively stable revenue, which can offset volatility from trading businesses. Goldman Sachs bought United Capital for $750 million last year, while Morgan Stanley beefed up its wealth division by buying stock-plan administrator Solium Capital Inc. for $900 million.Buyers aren’t the only ones under pressure. Charles Schwab Corp.’s acquisition of TD Ameritrade Holding Corp. in November reshaped the brokerage industry and encouraged E*Trade to consider a sale. Goldman Sachs Group Inc. was among firms that also took at least a cursory look at E*Trade before giving it a pass, according to people with knowledge of the matter.“Frankly, if I’m on the E*Trade board I’m certainly feeling a sense of urgency to find a buyer,” Thomas Bradley, the former president of TD Ameritrade, said at the time.Still, Gorman cautioned that it’s unlikely that the biggest banks will try to pull off transformational deals. They will instead stick to targets that add capabilities or round out businesses. And not every firm, he noted, has the means to shop.“You’ve got to be in the condition to do it, your stock has to reflect the value of the company, you have to have momentum that investors want to see,” Gorman said in an interview on Bloomberg Television. “But these bolt-on acquisitions. Listen, if they make sense? Absolutely.”\--With assistance from Sridhar Natarajan and Sonali Basak.To contact the reporters on this story: Jenny Surane in New York at email@example.com;Lananh Nguyen in New York at firstname.lastname@example.org;Nabila Ahmed in New York at email@example.comTo contact the editor responsible for this story: Michael J. Moore at firstname.lastname@example.orgFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Private sector PMI numbers put the majors in focus later today. Expect plenty of volatility as risk appetite takes another hit.
(Bloomberg) -- Morgan Stanley’s $13 billion deal to acquire E*Trade Financial Corp. is driven in part by the bank’s need to meet equity investors’ demands for the latest technology and digital trading tools -- and the same forces are reshaping the fixed-income market.A report released Thursday by Greenwich Associates found an appetite for “new and better digital products and tools” among fixed-income investors is fueling competition at banks. Kevin McPartland, head of market structure and technology research at Greenwich, said the elimination of trading commissions by many firms including Charles Schwab Corp. has freed investors to choose a brokerage based on services alone.“A lot of it is based on the tools you provide to the end-user, and I’m not sure the institutional market is much different any more,” he said in an interview. “Compute power is effectively limitless at this point.”In earlier research, Greenwich asked investors how they choose a top-tier bank, and 18% of respondents said technology services like execution algorithms and analytics were a factor. Breakthroughs in artificial intelligence, machine learning and the ability to mine huge pools of data have radically changed investing, McPartland said.The E*Trade deal, announced Thursday, helps Morgan Stanley add clients who are less wealthy than its traditional customers, but a state-of-the-art platform for investors was another draw. Morgan Stanley Chief Executive Officer James Gorman cited E*Trade’s “innovation in technology” as a reason for the acquisition, according to a statement.\--With assistance from Sridhar Natarajan.To contact the reporter on this story: Matthew Leising in Los Angeles at email@example.comTo contact the editors responsible for this story: Michael J. Moore at firstname.lastname@example.org, Dan Reichl, Josh FriedmanFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
U.S. carrier Delta Air Lines and British retail bank HSBC UK were named as major winners of a global anti-slavery award on Thursday after training flight attendants to spot trafficking and giving bank accounts to slavery survivors. Supermarket Aldi UK - the British arm of the German discount store - and Australian jeans maker Outland Denim, which hit headlines in 2018 when Megan Markle donned a pair, were also hailed in the Thomson Reuters Foundation's Stop Slavery Award for their efforts to eradicate forced labour. HSBC won the innovation award, Delta the campaign award, while Aldi scooped the goods and service firms award, recognised for cleaning up a high-risk supply chain and requiring suppliers and other partners to be trained in slavery awareness and laws.
Morgan Stanley and E-Trade merger. We then dive into some quarterly earnings results from the likes of Avis Budget Group. The episode then closes with a dive into why Everi Holdings Inc. (EVRI) is a Zacks Rank 1 (Strong Buy) stock right now...
(Bloomberg) -- Morgan Stanley’s merger a quarter century ago with a brokerage that had branches in Sears was met with sneers. Wall Streeters joked it was a deal combining white shoes with white socks.But with the painful Dean Witter Discover deal now ancient history, the firm is taking another stab at luring mom-and-pop investors: a $13 billion acquisition of E-Trade Financial Corp., the discount brokerage that shot to prominence in the day-trading heyday of the 1990s.Like his predecessors, Chief Executive Officer James Gorman is using mergers to reshape the bank for a daunting new era. Morgan Stanley’s tie-up with Dean Witter Discover in 1997 was followed by the purchase of Smith Barney in 2009, a deal that cemented its pivot to managing people’s money as a source of growth.“I worked for a guy who used to say there is no birth without blood and pain,” former CEO Phil Purcell, who left Morgan Stanley in 2005, said in an interview. “Dean Witter was painful. Smith Barney was very painful. It was also the right strategic move.”And the roughly 30% premium Morgan Stanley is dishing out for E*Trade?“They are paying a premium for a company that is a fraction of market value,” the 76-year-old former CEO said. In 1999, “there were people who were gods on Wall Street at the time saying we should acquire Charles Schwab. That would have been a catastrophe,” he said, referring to Schwab’s valuation relative to Morgan Stanley.“Everything James Gorman has done has been right,” Purcell said.Big financial companies are in a race to lure small investors with digital services that many view as the industry’s future. Goldman Sachs Group Inc. is making its first forays into the world of retail finance, and even itself considered a deal with E*Trade before giving it a pass, according to a person with knowledge of the matter.Skeptical InvestorsMorgan Stanley’s E*Trade takeover is the industry’s biggest since being saddled with regulations that crippled some of its signature businesses in the wake of the financial crisis. Gorman spent his first decade atop Morgan Stanley reshaping the white-shoe firm into a wealth-management colossus that’s tried to diminish its exposure to the vagaries of the trading and investment-banking operations that dominate Wall Street.Now he’s taking a leap into a digital-banking future that could draw in millions of customers and give Morgan Stanley a springboard to go international with new banking products.Investors and some analysts are still skeptical.“The plain old timing of this deal is not ideal,” Mike Mayo, an analyst at Wells Fargo & Co., said in a Bloomberg Television interview. “After seeing so many of these marriages go afoul, we have more of a skeptical hat on.”Shares of Morgan Stanley slumped as much as 4.4% after the deal was announced, though Gorman said he expects that decline to be short-lived.“We just bought a $13 billion business,” he said in an interview. “The fact that shares are down a few percent is not surprising. I don’t expect that to be a permanent state.”Digital DemandThe all-stock takeover adds E*Trade’s $360 billion of client assets to Morgan Stanley’s $2.7 trillion, the companies said Thursday in a statement. Morgan Stanley also gets E*Trade’s direct-to-consumer and digital capabilities to complement its full-service, advisory-focused brokerage.“Our clients increasingly want digital access and digital banking, and their clients want wealth-management advice,” Gorman said. “A number of stars aligned.”In reshaping the firm since the financial crisis, Gorman has been emphasizing Morgan Stanley’s wealth-management powerhouse. Purchasing E*Trade helps him add clients who are less wealthy than its traditional customers. The New York-based company has lost some business to the retail brokerages in recent years as those firms invested heavily in their web platforms.Upheaval in the retail-brokerage industry also helps explain the timing. In early October, Charles Schwab Corp. eliminated commissions for U.S. stock trading, spurring other brokerages to follow suit and sweeping away an important revenue stream.The following month, Schwab agreed to buy rival TD Ameritrade Holding Corp. for about $26 billion and create a mega-firm with $5 trillion in assets, forcing smaller brokerages like E*Trade to contend with a much more formidable competitor.\--With assistance from Nabila Ahmed, Yalman Onaran, Vonnie Quinn and Guy Johnson.To contact the reporter on this story: Sridhar Natarajan in New York at email@example.comTo contact the editors responsible for this story: Michael J. Moore at firstname.lastname@example.org, Steve Dickson, Daniel TaubFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.