Verizon is set to pay $4.8B to acquire Yahoo’s (NASDAQ:YHOO) core Internet assets as well as real estate, in a deal that is likely to be announced before the market open. After those sales, Yahoo would still hold stakes in Yahoo Japan (OTCPK:YAHOY) and Alibaba (NYSE:BABA) – worth about $40B. Verizon’s (NYSE:VZ) expected to keep its new purchase relatively intact in a bid to combine it with AOL and compete with Google (GOOG, GOOGL) and Facebook (NASDAQ:FB) in digital ads “by tapping into users on sites like Yahoo Finance.”
“We reiterate our determination to use all policy tools – monetary, fiscal and structural – to achieve our goal of strong, sustainable, balanced and inclusive growth,” leaders from the world’s top economies declared in a joint communique on Sunday following a conference in Chengdu, China. Whereas monetary policy figured prominently in previous meetings of G20 officials, discussions this time around focused on growth, as a result of Britain’s upcoming exit from the EU and fears of rising protectionism across the globe.
Presumptive Democratic presidential nominee Hillary Clinton joined hands with Virginia Senator Tim Kaine on Saturday, introducing her new running mate to a Miami crowd by stating “he’s everything Donald Trump and Mike Pence are not.” The VP announcement follows the release of 20,000 hacked DNC emails and resignation of party chair Debbie Wasserman Schultz, and comes ahead of the Democratic Convention, which kicks off today in Philadelphia.
In an interview with NBC’s Meet the Press, Donald Trump threatened to pull the U.S. out of the World Trade Organization if its membership interfered with his plan to impose penalties on firms that move American production offshore. In the past, the Republican presidential nominee has criticized NAFTA, attacked the Trans-Pacific Partnership and threatened to impose massive tariffs on Chinese imports.
Japanese trade data beat expectations for June, but the figures continued to contract in the latest sign the world’s third largest economy has been hampered by weak demand. Exports fell 7.4% Y/Y, the ninth consecutive month of contraction, while imports fell 18.8%, dropping for an eighteenth straight month, resulting in a trade balance surplus of ¥692.8B.
German business sentiment deteriorated less than expected in July, with the Ifo institute’s business climate index falling to 108.3 from 108.7 in June, but better than the 107.7 figure expected by economists. The robust reading follows a recent PMI survey that suggested Germany’s private sector continued to power ahead of its European rivals in the weeks after Brexit, defying fears of a post-referendum slowdown.
Italy doesn’t have a problem with its banks, according to finance minister Pier Carlo Padoan, despite investors fretting about nearly €360B of bad debts weighing down the sector. “They’re not more vulnerable than they used to be. They have been strengthening over time due to reforms that have been introduced by the government.” His comments come amid speculation of a bank “bail-in” and ahead of the ECB’s bank stress tests results on Friday.
President Tayyip Erdogan is tightening his grip on Turkey, ordering the closure of 2,341 private schools, charities and other institutions in his first decree since imposing a state of emergency after the failed military coup on July 15. Turkey also extended detentions without charges to 30 days and arrested a nephew of Fethullah Gulen, the U.S.-based cleric accused by Ankara of orchestrating the overthrow attempt.
Libya’s hopes to boost crude exports have been dealt a blow after the head of the National Oil Corporation objected to a deal between the government and local guards involving payments to reopen key ports. “It sets a terrible precedent and will encourage anybody who can muster a militia to shut down a pipeline, an oilfield, or a port, to see what they can extort,” Mustafa Sanalla said in a letter to U.N. Libya envoy Martin Kobler. Armed factions have already helped slash Libya’s oil output to less than a quarter of the 1.6M bpd seen before the 2011 uprising against Muammar Gaddafi.
Shares in Nintendo took a steep dive overnight after the company warned investors that Pokemon GO would have only a “limited” impact on its earnings. The stock sank 17% in Tokyo, wiping out about $6.4B in market value. Nintendo (OTCPK:NTDOY) is forecasting an annual net profit of ¥35B ($330M) for the current fiscal year, up from the ¥16.5B it earned in 2015.
Ericsson’s Board of Directors feels “the time is right for a new leader,” announcing the departure of Chief Executive Hans Vestberg amid shareholder pressure to replace him. Chief Financial Officer Jan Frykhammar will assume the CEO position until a replacement has been found. The search process will comprise both internal and external candidates. ERIC +4% premarket.
According to prominent mobile phone leaker Evan Blass (a.k.a @evleaks), the world may be just under two months away from the iPhone 7. “iPhone 2016 release: week of September 12th,” he wrote on Twitter. “Just to clarify, this refers to the retail release, not the launch event. To be even more specific, it should happen on Friday, Sept. 16th.” Rumors are also swirling about whether Apple (NASDAQ:AAPL) will offer a three model line-up for the first time, including a so-called iPhone 7 Pro.
Salesforce CEO Marc Benioff, who recently lost a bidding war for LinkedIn (NYSE:LNKD) to Microsoft (NASDAQ:MSFT), would have made a stronger bid for the social network had it continued talks with him after its call for final offers. Persistent bidding by Salesforce (NYSE:CRM) – during the two months before LinkedIn’s agreement to negotiate exclusively with Microsoft – ultimately raised the price of the deal by 22%, or $5B.
A cascade of terrorist attacks in Europe is driving away tourists at the height of the summer rush, casting a pall over hotel chains, airline companies and luxury retailers that are already grappling with Britain’s vote to leave the EU. Germany was the latest country to get hit by a series of violent incidents over the weekend, including a suicide bombing and stabbing by two Syrian refugees and a German-Iranian teenager that shot and killed nine people at a mall in Munich.
Meanwhile, at least two people have been killed and more than a dozen others injured after a shooting at the Club Blu nightclub in Fort Myers, Florida. The incident comes a month after a gunman who pledged allegiance to Islamic State killed 49 people at the Pulse nightclub in Orlando. Gun and law enforcement stocks will be on watch at the open: SWHC, RGR, VSTO, TASR, DGLY
The Brexit led to severe withdrawals at M&G, Schroders (OTCPK:SHNWY), Fidelity and Invesco (NYSE:IVZ) in June, as equity funds domiciled in Europe suffered their largest monthly redemptions since September 2011. Investors pulled at least €1B from each of the four large investment groups, which are either based in the U.K. or have large hubs in the country.
For only the second time in its almost 30-year history, LVMH Moet Hennessy Louis Vuitton (OTCPK:LVMUY), the largest luxury conglomerate in the world, is selling a fashion brand. The French company has agreed to offload Donna Karan International to G-III Apparel Group (NASDAQ:GIII) in a deal worth $650M. The sale is expected to close in late 2016 or early 2017.
China’s top internet regulator has ordered major online companies including Sina Corp. (NASDAQ:SINA) Tencent (OTCPK:TCEHY), Sohu.com (NASDAQ:SOHU) and NetEase (NASDAQ:NTES) to stop original news reporting, tightening its grip over the country’s web and information industries. President Xi Jinping has stressed that Chinese media must serve the interests of the ruling Communist Party, giving authorities near-absolute control over online news.
Helping advance research toward integrating drones into the National Airspace System, 7-Eleven (OTCPK:SVNDY) and upstart Flirtey have completed the first fully autonomous drone delivery to a customer’s residence. While there’s some speculation on the ways that companies like Amazon (NASDAQ:AMZN), Wal-Mart (NYSE:WMT), Walgreens (NASDAQ:WBA) and Domino’s (NYSE:DPZ) could use drone delivery, many industry watchers think emergency conditions (flood/earthquake/medical) or niche situations (oil rigs/inaccessible roads) are the most likely scenarios for widespread drone usage.
Malaysia Airlines may soon announce a plane order of Boeing (NYSE:BA) B737 MAX jets, Business Times reports, as the airline eyes a fleet expansion by adding long-range narrow body aircraft. The carrier may place an order that could be up to half the size of a similar deal by Vietjet Air, which purchased 100 Boeing 737 MAXs worth $11.3B in May. A press conference has been called for Wednesday.
The Japanese government and the European Commission are working together to connect their global positioning systems in a coordinated effort to clear a path for autonomous vehicles. By linking Japan’s Quasi-Zenith Satellite System and EU’s Galileo satellite network the margin of error of the combined system will be improved dramatically. The development could be positive for Japanese automakers and suppliers: TM, HMC, OTCPK:NSANY, OTCPK:MZDAY, OTCPK:SZKMY, OTCPK:MMTOF, OTCPK:MIELY, OTCPK:HTHIF, OTC:NTTDF
Tesla and SolarCity are close to locking in terms on a merger, sources told Reuters. Final discussions and the due diligence process could end within days, but it’s still unclear if SolarCity (NASDAQ:SCTY) will land a go-shop provision which would allow it to press for other bids. Tesla (NASDAQ:TSLA) announced the $2.8B all-stock offer last month, arguing that by acquiring SolarCity, the two companies would form a one-stop shop for clean energy.
In Asia, Japan flat at 16620. Hong Kong +0.1% to 21993. China +0.1% to 3015. India +1.1% to 28095.
In Europe, at midday, London flat. Paris +0.7%. Frankfurt +0.9%.
Futures at 6:20, Dow flat. S&P flat. Nasdaq flat. Crude -0.6% to $43.94. Gold -0.5% to $1316.40.
Ten-year Treasury Yield +2 bps to 1.58%
Today’s Economic Calendar
10:30 Dallas Fed Manufacturing Survey
1:00 PM Results of $26B, 2-Year Note Auction
Companies reporting earnings today »