These stocks are typically the best bets when the Fed jolts the economy with three rate cuts - CNBC

A trader laughs ahead of the closing bell on the floor of the New York Stock Exchange (NYSE) on February 1, 2019 in New York City.

Johannes Eisele | AFP | Getty Images

The stage appears to be set for stocks to shine after the Federal Reserve's third rate cut and its signal to stop from now. And certain groups of stocks stand to benefit the most, if history is any guide.

The Fed slashed interest rates for the third straight time this year on Wednesday while indicating it is going to pause easing. Powell made it clear in the press conference that the current monetary policy stance is "likely to remain appropriate."

The three-and-done approach was used on two occasions in history — between 1995 and 1996 and in 1998. The Alan Greenspan-led Fed slashed rates by a total of 75 basis points, during both periods to combat an economic downturn and successfully prolong the expansion.

The Fed's insurance easing episodes in the 1990s managed to drive the S&P 500 22% higher on average a year after the third cut, CNBC analysis found. The move was particularly beneficial for cyclical stocks including tech, energy and industrials as investors bet on economically sensitive pockets of the market after Fed rate cuts.

CNBC, using hedge fund analytics tool Kensho, found that information technology stood out as the best-performing sector after the central bank cut rates three times and paused, surging a whopping 66% a year after the third cut on average. Energy and industrial stocks both jumped about 24% on average during the same period.

It's not surprising that cyclical stocks have historically enjoyed the biggest boost from Fed's rate cuts. As monetary easing is designed to jolt the economy, investors tend to gravitate towards stocks traditionally correlated to economic growth.

To be sure, the tech sector's stunning pop in the 1990s happened when there was a rapid rise in U.S. tech stock valuations at the height of the dotcom bubble. So the Fed put should have less of an impact on the group this time.

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2019-10-31 11:41:22Z
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Fiat Chrysler and Peugeot owner announce $48 billion merger - CNN

Shareholders of each automaker would own 50% of the combined operation, the companies said in a joint statement on Thursday. A binding agreement could be finalized within weeks, the statement said.

The combined company would be based in the Netherlands, which is the current headquarters of Fiat Chrysler. John Elkann, the US-born scion of the Italian family that founded Fiat, would be chairman of the combined company, while PSA chief executive Carlos Tavares would be CEO.

The combined company would have roughly 410,000 employees and annual revenues of $190 billion. Fiat Chrysler (FCAU) and PSA (PUGOY) sold a combined 8.7 million vehicles last year, just ahead of General Motors (GM), which sold 8.3 million, and not far behind Volkswagen (VLKAF) and Toyota (TM), which each sold over 10 million.

The merger comes amid a global auto sales slowdown. At the same time, carmakers are scrambling to invest in the electric and hybrid technologies needed to meet strict new emissions targets in China and Europe. The autonomous vehicles of the future also present a threat to traditional industry business models. The huge amount of capital needed to meet these new challenges has forced some automakers to find partners and turned others into acquisition targets.

Jessica Caldwell, Edmunds' executive director of industry analysis, said the planned merger of Fiat Chrysler and France's PSA "isn't really about product or expanding to new markets." Instead, it's about funding research into the vehicles of the future.

"The electrified, autonomous future everyone is waiting for just isn't feasible without automakers merging and forming strategic alliances to share research and development costs," she said. "This is a smart move by both Fiat Chrysler and PSA to ensure their companies continue to be viable and relevant as the industry evolves."

The carmaker with the most urgent need to combine in this case was PSA, which has fallen behind on developing clean cars. Electric vehicles account for less than 0.3% of its overall sales, and it had to pay Tesla (TSLA) for credits needed to comply with EU emissions standards. Fiat Chrysler has also trailed larger rivals in developing electric vehicles.

Even the biggest players in the industry are making changes. Volkswagen and Ford (F) are working together to develop electric and self-driving vehicles, while German carmakers BMW (BMWYY) and Daimler (DDAIF) have formed a joint venture that will develop driverless technology. Honda has invested in General Motors' self-driving car unit.

A history of mergers

It's not the first time that PSA has used a merger to bulk up. In 2017 it paid $2.3 billion to buy GM's European business, adding the Opel and Vauxhall brands as GM exited the continent. While GM lost about $22.4 billion in Europe over the 17 years before that deal, Opel and Vauxhall are now profitable for PSA.

Teaming up during times of adversity is also a familiar strategy for Fiat, which started the purchase of US rival Chrysler out of bankruptcy a decade ago. It completed the merger five years later. But even following that deal, Fiat Chrysler was still significantly smaller than many of its rivals, putting it at a disadvantage in purchasing muscle as well as spreading out the cost of research and development.

Sergio Marchionne, the late CEO who brought Fiat and Chrysler together, spoke publicly about his desire for a deal with GM. He also expressed interest in a combination with a tech company such as Google or Apple.

Earlier this year, Fiat Chrysler made a merger proposal to another French automaker, Renault, a company of comparable size to PSA. But it withdrew the offer, saying that "it has become clear that the political conditions in France do not currently exist for such a combination to proceed successfully."

The French government owns 15% of Renault and is its largest shareholder; it also owns 12.2% of PSA. France has said it would approve the Renault deal only if there were protections for French jobs and factories.

New challenges

Fiat Chrysler and PSA will face huge challenges even if their merger is completed.

Both have struggled to break into China, the world's largest market for new cars. Automakers have sold 10% fewer cars there so far in 2019, but the joint ventures of Fiat Chrysler and PSA have been hit especially hard. Sales dropped by a third for Fiat Chrysler in the first half of the year, and more than 50% for PSA.

PSA also has no presence in the United States, the world's second largest car market. Miniscule US sales of Fiat branded cars show the difficulty in bringing mass market European brands, as opposed to luxury brands, to US showrooms.

"Both Fiat Chrysler and PSA have a lot of quirky city cars that couldn't be further from what US car shoppers want right now," said Caldwell.

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2019-10-31 11:53:20Z
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Fiat Chrysler and Peugeot owner announce $48 billion merger - CNN

Shareholders of each automaker would own 50% of the combined operation, the companies said in a joint statement on Thursday. A binding agreement could be finalized within weeks, the statement said.

The combined company would be based in the Netherlands, which is the current headquarters of Fiat Chrysler. John Elkann, the US-born scion of the Italian family that founded Fiat, would be chairman of the combined company, while PSA chief executive Carlos Tavares would be CEO.

The company would have roughly 410,000 employees and rank among the largest automakers in the world. Fiat Chrysler (FCAU) and PSA (PUGOY) sold a combined 8.7 million vehicles last year, just ahead of General Motors (GM), which sold 8.3 million, and not far behind Volkswagen (VLKAF) and Toyota (TM), which each sold over 10 million.

The merger comes amid a global auto sales slowdown. At the same time, carmakers are scrambling to invest in the electric and hybrid technologies needed to meet strict new emissions targets in China and Europe. The autonomous vehicles of the future also present a threat to traditional industry business models. The huge amount of capital needed to meet these new challenges has forced some automakers to find partners and turned others into acquisition targets.

Jessica Caldwell, Edmunds' executive director of industry analysis, said the planned merger of Fiat Chrysler and France's PSA "isn't really about product or expanding to new markets." Instead, it's about funding research into the vehicles of the future.

"The electrified, autonomous future everyone is waiting for just isn't feasible without automakers merging and forming strategic alliances to share research and development costs," she said. "This is a smart move by both Fiat Chrysler and PSA to ensure their companies continue to be viable and relevant as the industry evolves."

The carmaker with the most urgent need to combine in this case was PSA, which has fallen behind on developing clean cars. Electric vehicles account for less than 0.3% of its overall sales, and it had to pay Tesla (TSLA) for credits needed to comply with EU emissions standards. Fiat Chrysler has also trailed larger rivals in developing electric vehicles.

Even the biggest players in the industry are making changes. Volkswagen and Ford (F) are working together to develop electric and self-driving vehicles, while German carmakers BMW (BMWYY) and Daimler (DDAIF) have formed a joint venture that will develop driverless technology. Honda has invested in General Motors' self-driving car unit.

A history of mergers

It's not the first time that PSA has used a merger to bulk up. In 2017 it paid $2.3 billion to buy GM's European business, adding the Opel and Vauxhall brands as GM exited the continent. While GM lost about $22.4 billion in Europe over the 17 years before that deal, Opel and Vauxhall are now profitable for PSA.

Teaming up during times of adversity is also a familiar strategy for Fiat, which started the purchase of US rival Chrysler out of bankruptcy a decade ago. It completed the merger five years later. But even following that deal, Fiat Chrysler was still significantly smaller than many of its rivals, putting it at a disadvantage in purchasing muscle as well as spreading out the cost of research and development.

Sergio Marchionne, the late CEO who brought Fiat and Chrysler together, spoke publicly about his desire for a deal with GM. He also expressed interest in a combination with a tech company such as Google or Apple.

Earlier this year, Fiat Chrysler made a merger proposal to another French automaker, Renault, a company of comparable size to PSA. But it withdrew the offer, saying that "it has become clear that the political conditions in France do not currently exist for such a combination to proceed successfully."

The French government owns 15% of Renault and is its largest shareholder; it also owns 12.2% of PSA. France has said it would approve the Renault deal only if there were protections for French jobs and factories.

New challenges

Fiat Chrysler and PSA will face huge challenges even if their merger is completed.

Both have struggled to break into China, the world's largest market for new cars. Automakers have sold 10% fewer cars there so far in 2019, but the joint ventures of Fiat Chrysler and PSA have been hit especially hard. Sales dropped by a third for Fiat Chrysler in the first half of the year, and more than 50% for PSA.

PSA also has no presence in the United States, the world's second largest car market. Miniscule US sales of Fiat branded cars show the difficulty in bringing mass market European brands, as opposed to luxury brands, to US showrooms.

"Both Fiat Chrysler and PSA have a lot of quirky city cars that couldn't be further from what US car shoppers want right now," said Caldwell.

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2019-10-31 11:19:24Z
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Fiat Chrysler and Peugeot owner agree to merge in mega auto deal - CNN

Shareholders of each automaker would own 50% of the combined operation, the companies said in a joint statement on Thursday. A binding agreement could be finalized within weeks, the statement said.

The combined company would be based in the Netherlands, which is the current headquarters of Fiat Chrysler. John Elkann, the current chairman of Fiat Chrysler (FCAU), would perform the same role at the combined company, while PSA Group chief executive Carlos Tavares would be CEO.

The company would rank among the largest automakers in the world. Fiat Chrysler and PSA (PUGOY) sold a combined 8.7 million vehicles last year, just ahead of GM (GM), which sold 8.3 million, and not far behind Volkswagen (VLKAF) and Toyota (TM), which each sold over 10 million.

The merger comes amid a global sales slowdown. At the same time, carmakers are scrambling to invest in the electric and hybrid technologies needed to meet strict new emissions targets in China and Europe. The autonomous vehicles of the future also present a threat to traditional industry business models.

The huge amount of capital needed to meet these new challenges has forced some automakers to find partners and turned others into acquisition targets.

"We view the combination of these two companies as reasonable given global competition, high capital intensity, and industry disruption from electrified powertrain as well as autonomous technologies," Richard Hilgert, a senior equity analyst at Morningstar, said in a research note on Wednesday.

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2019-10-31 08:34:41Z
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Ford and UAW reach quick deal to avoid a strike - CNN

Less than a week after members of the United Auto Workers union returned to work at GM (GM), negotiators for the UAW and Ford (F) announced late Wednesday they had reached a tentative agreement.

While there had been some preliminary talks between the union and Ford before and even during the GM strike, Ford negotiations only moved to the front burner for the union on Monday.

The deal still needs to be ratified by the 55,000 union members at Ford before it can go into effect. Neither the union nor company would disclose any details of the agreement.

But the quick settlement was a striking contrast with the contentious talks at GM. Nearly 50,000 GM workers were on strike from Sept. 16 until members there ratified a new deal and started returning to work this past Saturday. GM disclosed this week that it expects the strike cost it $2.9 billion.

The auto industry is facing a slowdown in sales and the risk of further declines if the US economy continues to slow. It is also facing the need to spend billions to develop the next generation of vehicles, electric and self-driving cars that may not be profitable for years.

Ford has said it plans to spend $11 billion in the coming few years to restructure its business globally to free up funds to develop electric and autonomous vehicles. But while it is profitable, it recently lowered its profit forecast for the rest of this year. And the cost of its restructuring plans was a major factor in having its credit rating recently reduced to junk bond status.

"It appears both parties took a sane approach, and avoided a painful strike that would have benefited neither of them," said Patrick Anderson, CEO of Anderson Economic Group, a Michigan research firm that follows the auto industry.

A successful ratification vote is by no means assured. Four years ago only 51% of the union members at Ford voted in favor of a deal that included their first pay raises in more than a decade.

But it always seemed unlikely that the Ford workers would follow GM workers out on strike. There has not been a work stoppage at Ford since 1976.

And the biggest point of contention at GM -- the automaker's decision to close three US plants where work was halted earlier this year -- was not present at Ford, where no US plant closings are planned.

The union had vowed to make GM shift work back from Mexico to try to revive the plants. While GM agreed to build an electric truck planned at a date yet to be determined at a fourth plant slated for closure, it would not shift work back from Mexico to save any of the other three plants.

The workers at Ford will likely get many of the same terms as found in the GM contract. Once the union reaches a deal with one US automaker, it strives to get the other two unionized companies to follow that pattern.

Under the deal at GM, hourly workers get an $11,000 signing bonus, a 6% raise over the four-year life of the contract, an agreement to allow many temporary workers to be hired on a permanent basis, and the health care coverage left essentially unchanged despite the company's desire to have workers assume a much greater share of the cost.

If Ford workers agree to a new contract that includes those provisions, they will benefit from not losing six weeks of pay in order to receive those gains.

Once the Ford ratification vote is complete, likely in the next couple of weeks, the union will turn to the third unionized US automaker, Fiat Chrysler (FCAU). Contract talks there could be complicated by the potential announcement of a merger with French automaker PSA, the owner of Peugeot.

-- CNN Business' Vanessa Yurkevich contributed to this story

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2019-10-31 05:10:13Z
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FCA in merger talks with French automaker Peugeot - Detroit Free Press

Eric D. Lawrence Detroit Free Press

Published 9:06 AM EDT Oct 30, 2019

Fiat Chrysler and Peugeot owner PSA are in merger talks, the companies confirmed Wednesday.

The companies issued separate, nearly identical statements, signifying a coordinated messaging strategy, with Italian-American automaker FCA adding that it had no additional comment.

"Following recent reports on a possible business combination between Groupe PSA and FCA Group, Fiat Chrysler Automobiles N.V. ... confirms there are ongoing discussions aimed at creating one of the world‘s leading mobility Groups. FCA has nothing further to add at this time," the company said.

Reuters reported that a merger between FCA and the French auto company could create a "$50 billion giant better placed to tackle a host of costly technological and regulatory challenges facing the global auto industry."

FCA came close to a merger last summer with Renault, but complications with the French government led FCA to withdraw. 

FCA had proposed a 50-50 merger with Renault in May, saying it would create the world's third-largest automaker and save $5.6 billion annually. Since then, FCA Chairman John Elkann, whose family has controlling interest in the company, confirmed the group’s bid to pursue an alternative alliance, Reuters said. 

Read more:

Rashida Tlaib calls on FCA to protect health of residents as new assembly plant is built

FCA must pay almost $80M for missing federal fuel economy standards in '17

"If a combination of Peugeot and FCA succeeds in overcoming political, financial and governance hurdles, the new enterprise would still face substantial challenges," Reuters said, with an expected sales slowdown ahead and huge investments needed to keep pace in electrification and future mobility. 

Global automakers face the prospect of a slowdown in demand coinciding with a need to invest in electrification and autonomy. 

With that in mind, several analysts noted the deal's benefits.

"The automotive industry continues to realize partnership is a must in this rapidly changing environment. An FCA and PSA merger could benefit both parties. PSA is a big global automaker with a good European foothold and technologies FCA could benefit from. FCA has a big imprint in the U.S., a market PSA is trying to get into. On the surface, it makes sense," said Akshay Anand, executive analyst for Kelley Blue Book.

Brian Moody, executive editor for Autotrader, noted that "each company has something the other wants. Fiat Chrysler could surely use some of Peugeot’s cash and/or existing platforms to help build out a fleet of fresh new cars, including electric and hybrid vehicles. On the other hand, Peugeot would love to have access to a vast dealership network as well as a way to capitalize on the success of brands and vehicles like Ram and Jeep."

An FCA-Peugeot merger would create the world's fourth-largest automaker, behind Volkswagen, Toyota and the Renault-Nissan alliance. 

FCA, with U.S. operations based in Auburn Hills, was created out of the Chrysler bankruptcy of a decade ago, when American automakers crashed amid the Great Recession. 

PSA’s supervisory board is to meet Wednesday to discuss the potential deal, Reuters and the Wall Street Journal reported. 

Read more on autos and sign up for our autos newsletter.

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2019-10-30 13:05:00Z
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Stocks making the biggest moves premarket: GE, Yum, Molson Coors, Garmin, Amgen & more - CNBC

Check out the companies making headlines before the bell:

General Electric – General Electric reported quarterly profit of 15 cents per share, 4 cents a share above estimates. Revenue also exceeded forecasts and GE raised its full-year cash flow forecast.

Yum Brands – Yum earned an adjusted 80 cents per share for its latest quarter, 14 cents a share shy of consensus forecasts. Revenue also came in below estimates, hurt by a weaker-than-expected performance at its Pizza Hut and KFC units.

Anixter International – The software company agreed to be acquired by private-equity firm Clayton, Dubilier & Rice for $81 per share in cash. The total value of the deal is $3.8 billion including assumed debt, with the transaction expected to close by the end of 2020's first quarter.

Molson Coors – The beer brewer fell a penny a share short of estimates, with quarterly profit of $1.48 per share. Revenue also came in short of forecasts and Molson Coors announced a restructuring that will slash up to 500 jobs.

Garmin – The GPS and fitness device maker earned $1.19 per share for its latest quarter, well above the 95 cents a share consensus estimate. Revenue also topped forecasts. Garmin saw better-than-expected results in all its units, as well as higher-than-expected profit margins.

Tupperware – Tupperware earned an adjusted 43 cents per share, well short of the 62 cents a share consensus estimate. The housewares maker's revenue also came in short of forecasts. The company said it was experiencing challenging trends in markets like the U.S., China, Canada, and Brazil. Tupperware also cut its full-year earnings outlook.

Johnson & Johnson – J&J said its testing found no asbestos in its Johnson's Baby Powder. That testing included a single bottle that the Food and Drug Administration had said contained trace amounts of asbestos, prompting J&J to recall a lot of 33,000 bottles earlier this month.

Fiat Chrysler – Fiat Chrysler said it was in talks about a possible merger with Peugeot maker PSA that could create a combined company worth about $50 billion. Fiat Chrysler had abandoned talks earlier this year to merge with France's Renault.

Amgen – Amgen reported quarterly profit of $3.66 per share, 13 cents a share above estimates. The biotech company's revenue also beat forecasts and Amgen raised its full-year guidance amid strong sales of its biosimilar drugs.

Electronic Arts – Electronic Arts reported quarterly profit of 96 cents per share, 10 cents a share above estimates. The video game maker's revenue also topped estimates. Electronic Arts saw stronger digital sales, including game downloads and in-game purchases.

Mattel – Mattel came in 10 cents a share above estimates, with quarterly profit of 26 cents per share. The toy maker's revenue was slightly above Wall Street forecasts. Mattel also said it is restating some past earnings following an internal investigation into accounting issues, and the company's chief financial officer is resigning.

Mondelez International – Mondelez reported quarterly profit of 64 cents per share, 4 cents a share above estimates. Revenue was slightly above forecasts. The snack maker raised its full-year outlook, as sales volume increases across its major markets.

FireEye – FireEye raised its annual revenue guidance, after doubling estimates by reporting quarterly profit of 2 cents per share. The cybersecurity company's revenue also beat forecasts as it sold more cloud subscriptions.

Advanced Micro Devices – AMD reported adjusted earnings of 18 cents per share, in line with Street forecasts. Revenue was very slightly below estimates, although the chipmaker reported better-than-expected results for its data center business.

Yum China – Yum China beat analyst estimates by 3 cents A share, with quarterly profit of 58 cents per share. The restaurant operator's revenue was below forecasts, however, as were comparable-restaurant sales at KFC, Pizza Hut, and Taco Bell.

Sony – Sony reported its best-ever second-quarter profit, driven by strong sales of its image sensors. Sales helped offset a drop in earnings from Sony's gaming division.

Edison International – Edison's Southern California Edison unit said its equipment will likely be found to have been associated with a 2018 California wildfire that damaged more than 1,000 homes in Los Angeles and Ventura counties.

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2019-10-30 11:43:17Z
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Fed risks more angry Trump tweets as pause in future rate cuts looms - POLITICO

The Federal Reserve Building. | Mark Wilson/Getty Images

The Federal Reserve is getting ready to disappoint President Donald Trump. Again.

Fed policymakers on Wednesday are widely expected to cut interest rates for the third time since July. But positive headlines, largely driven by Trump’s preliminary trade deal with China, could lead the central bank to tap the brakes on any further decreases until there’s evidence that the economy really needs yet another boost.

Story Continued Below

Trump, who last week kept up his relentless attacks on the Fed by tweeting that it has been “way too fast to raise, and way too slow to cut!,” is leaning on the central bank to take bolder steps to stimulate growth as he heads into a bruising reelection campaign. It’s not going to happen, at least right now.

“Given that the economy is not in recession, and it’s unlikely to enter into recession, at some point the Fed is going to stop cutting rates,” said Gus Faucher, chief economist at PNC Financial. “And the president will not be happy about that.”

The Federal Reserve is derelict in its duties if it doesn’t lower the Rate and even, ideally, stimulate. Take a look around the World at our competitors. Germany and others are actually GETTING PAID to borrow money. Fed was way too fast to raise, and way too slow to cut!

— Donald J. Trump (@realDonaldTrump) October 24, 2019

With the 2020 presidential race closing in, that means Trump’s biggest argument for reelection beyond his base — the strength of the economy — could be undercut by the reality that growth will, at best, be plugging along at the same pace as it was under his political nemesis, former President Barack Obama.

That dynamic could simply mean more angry tweets from the president, but he could escalate the standoff by reviving his threat to fire Fed Chair Jerome Powell.

“The way to get the Fed’s attention again means threatening to fire Powell, but he seems to have backed off of that,” said Sarah Binder, a political science professor at George Washington University. “He doesn’t really get any pickup from Republicans on the Hill.”

That could change if the economy begins to dramatically slow, particularly given Congress’s inability to enact new policy.

“It’s possible that the push for the economy comes from stepping back from some of these trade disputes,” Binder said. “I’m hard-pressed to see Republicans, given a divided Congress, doing any major stimulus, especially as the deficit gets over $1 trillion.”

“The way to do it might be through infrastructure, but no one seems to think that’s a serious possibility,” she added.

As the Fed aims to continue its policy of ignoring the president’s broadsides, the central bank faces a complicated picture. Still healthy consumer spending and a 50-year-low unemployment rate suggest the economy isn’t in dire need of intervention.

Indeed, market participants on Tuesday afternoon were nearly unanimous in predicting the Fed will lower rates on Wednesday — and almost 80 percent are then expecting the central bank to hold off on another cut in December, according to the CME FedWatch Tool.

But data show that manufacturing is contracting, businesses are more hesitant to invest in the face of trade tensions, and inflation has been stuck below the central bank’s 2 percent target, all of which make the case for lower rates.

Economists are widely predicting that new GDP data, set for release Wednesday morning, will show that the economy grew by less than 2 percent in the third quarter, and a Friday report on jobs numbers could be weak, particularly after a six-week strike by GM workers.

Still, a lot of the Fed’s worst fears about the outlook have simply not come to pass.

“We could’ve had a worsening of the trade war with China, which we didn’t, and we could’ve had a hard Brexit on Oct. 31, which we don’t,” said Diane Swonk, chief economist at Grant Thornton.

Swonk said that means the central bank could even hold off on a reduction this week and wait to cut rates later when the economy might need it more. “I am actually really worried about the economy next year, but I’d rather the Fed save its fire for when it has its biggest impact,” she said.

Holding off on a rate decrease could also have a side benefit for the central bank, Swonk said.

“They’re going to raise the president’s ire no matter what because they’re not going to cut enough for him, so that’s just background noise,” she said. “The added benefit of not cutting … it does underscore the Fed’s independence at a critical juncture.”

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PNC’s Faucher said that while the worst-case scenario hasn’t materialized, “there is a substantial amount of risk out there,” particularly around the U.S.-China trade relationship, but also related to Britain’s exit from the European Union, that has still not gone away.

Fed leaders have sent few signals about their plans over the last few months, given the uncertainty over how the economic outlook might unfold. Powell has underscored that the central bank is trying to manage potential risks, even as he has suggested that lowering borrowing costs isn’t the ideal way to offset decreased growth as a result of trade uncertainty.

Making his effort at communicating the Fed’s intentions even more delicate is that members of the central bank’s rate-setting committee have increasingly diverse opinions on the right way forward.

Three of the 10 voting members dissented from the Fed’s cut in September, with two preferring to hold steady and one wanting to reduce rates by a larger amount.

“That’s part of the conundrum here,” Binder said. It’s possible “there’s no forward guidance to be given because they don’t know what they’re going to do in December.”

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2019-10-30 09:06:00Z
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Fiat Chrysler and Peugeot owner in merger talks - BBC News

PSA Group, the French owner of Peugeot, is exploring a merger with its US-Italian rival Fiat Chrysler, it has confirmed.

A deal between the two carmakers would create a business with a combined market value of nearly $50bn (£39.9bn).

This is Fiat Chrysler's second attempt at a merger this year after it pulled out of an agreement with Renault in June.

Fiat Chrysler shares jumped 7.5% on Wall Street.

The potential merger would face significant political and financial hurdles.

Discussions remain in the early stages and there is no guarantee of a final deal.

However, if the two companies do combine, PSA chief executive Carlos Tavares is expected to lead the enlarged group.

John Elkann, Fiat Chrysler's chairman and the head of Italy's Agnelli industrial dynasty which controls the business, would retain the same position at the new company.

A merger of the two groups would bring a number of brands under one roof including Alfa Romeo, Citroen, Jeep, Opel, Peugeot and Vauxhall.

• Fiat Chrysler withdraws bid for Renault

The talks come months after a proposed tie-up between Fiat Chrysler and French carmaker Renault collapsed.

Fiat Chrysler had described its bid for Renault as a "transformative" proposal that would create a global automotive leader.

Industry shifts toward electric models, along with stricter emissions standards and the development of new technologies for autonomous vehicles, have put increasing pressure on carmakers to consolidate.

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2019-10-30 09:35:17Z
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Peugeot owner in merger talks with Fiat Chrysler - BBC News

PSA Group, the French owner of Peugeot, is exploring a merger with its US-Italian rival Fiat Chrysler, it has confirmed.

A deal between the two carmakers would create a business with a combined market value of nearly $50bn (£39.9bn).

This is Fiat Chrysler's second attempt at a merger this year after it pulled out of an agreement with Renault in June.

Fiat Chrysler shares jumped 7.5% on Wall Street.

The potential merger would face significant political and financial hurdles.

Discussions remain in the early stages and there is no guarantee of a final deal.

However, if the two companies do combine, PSA chief executive Carlos Tavares is expected to lead the enlarged group.

John Elkann, Fiat Chrysler's chairman and the head of Italy's Agnelli industrial dynasty which controls the business, would retain the same position at the new company.

A merger of the two groups would bring a number of brands under one roof including Alfa Romeo, Citroen, Jeep, Opel, Peugeot and Vauxhall.

• Fiat Chrysler withdraws bid for Renault

The talks come months after a proposed tie-up between Fiat Chrysler and French carmaker Renault collapsed.

Fiat Chrysler had described its bid for Renault as a "transformative" proposal that would create a global automotive leader.

Industry shifts toward electric models, along with stricter emissions standards and the development of new technologies for autonomous vehicles, have put increasing pressure on carmakers to consolidate.

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2019-10-30 08:15:16Z
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Peugeot owner in merger talks with Fiat Chrysler - BBC News

PSA Group, the French owner of Peugeot, is exploring a merger with its US-Italian rival Fiat Chrysler, it has confirmed.

A deal between the two carmakers would create a business with a combined market value of nearly $50bn (£39.9bn).

This is Fiat Chrysler's second attempt at a merger this year after it pulled out of an agreement with Renault in June.

Fiat Chrysler shares jumped 7.5% on Wall Street.

The potential merger would face significant political and financial hurdles.

Discussions remain in the early stages and there is no guarantee of a final deal.

However, if the two companies do combine, PSA chief executive Carlos Tavares is expected to lead the enlarged group.

John Elkann, Fiat Chrysler's chairman and the head of Italy's Agnelli industrial dynasty which controls the business, would retain the same position at the new company.

A merger of the two groups would bring a number of brands under one roof including Alfa Romeo, Citroen, Jeep, Opel, Peugeot and Vauxhall.

• Fiat Chrysler withdraws bid for Renault

The talks come months after a proposed tie-up between Fiat Chrysler and French carmaker Renault collapsed.

Fiat Chrysler had described its bid for Renault as a "transformative" proposal that would create a global automotive leader.

Industry shifts toward electric models, along with stricter emissions standards and the development of new technologies for autonomous vehicles, have put increasing pressure on carmakers to consolidate.

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https://www.bbc.com/news/business-50228611

2019-10-30 07:41:43Z
52780422114346

Peugeot owner in merger talks with Fiat Chrysler - BBC News

PSA Group, the French owner of Peugeot, is exploring a merger with its US-Italian rival Fiat Chrysler, it has confirmed.

A deal between the two carmakers would create a business with a combined market value of nearly $50bn (£39.9bn).

This is Fiat Chrysler's second attempt at a merger this year after it pulled out of an agreement with Renault in June.

Fiat Chrysler shares jumped 7.5% on Wall Street.

The potential merger would face significant political and financial hurdles.

Discussions remain in the early stages and there is no guarantee of a final deal.

However, if the two companies do combine, PSA chief executive Carlos Tavares is expected to lead the enlarged group.

John Elkann, Fiat Chrysler's chairman and the head of Italy's Agnelli industrial dynasty which controls the business, would retain the same position at the new company.

A merger of the two groups would bring a number of brands under one roof including Alfa Romeo, Citroen, Jeep, Opel, Peugeot and Vauxhall.

• Fiat Chrysler withdraws bid for Renault

The talks come months after a proposed tie-up between Fiat Chrysler and French carmaker Renault collapsed.

Fiat Chrysler had described its bid for Renault as a "transformative" proposal that would create a global automotive leader.

Industry shifts toward electric models, along with stricter emissions standards and the development of new technologies for autonomous vehicles, have put increasing pressure on carmakers to consolidate.

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https://www.bbc.com/news/business-50228611

2019-10-30 06:44:18Z
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WhatsApp sues Israeli firm over phone hacking claims - BBC News

Facebook-owned WhatsApp has filed a lawsuit against Israel's NSO Group, alleging the firm was behind cyber-attacks that infected devices with malicious software.

WhatsApp accuses the company of sending malware to roughly 1,400 mobile phones for the purposes of surveillance.

Users affected included journalists, human rights activists, political dissidents, and diplomats.

NSO Group, which makes software for surveillance, disputed the allegations.

In a court filing, WhatsApp said NSO Group "developed their malware in order to access messages and other communications after they were decrypted on target devices".

It said NSO Group created various WhatsApp accounts and caused the malicious code to be transmitted over the WhatsApp servers in April and May.

"We believe this attack targeted at least 100 members of civil society, which is an unmistakable pattern of abuse," WhatsApp said in a statement.

The affected users had numbers from several countries, including Bahrain, the United Arab Emirates and Mexico, according to the lawsuit.

WhatsApp said it is seeking a permanent injunction banning NSO from using its service.

The firm, which was acquired by Facebook in 2014, said it was the first time an encrypted messaging provider had taken legal action of this kind.

WhatsApp promotes itself as a "secure" communications app because messages are end-to-end encrypted. This means they should only be displayed in a legible form on the sender or recipient's device.

• WhatsApp discovers surveillance attack
• Why the WhatsApp spies may have eyes on Iran

NSO Group said it would fight the allegations.

"In the strongest possible terms, we dispute today's allegations and will vigorously fight them," the company said in a statement to the BBC.

"The sole purpose of NSO is to provide technology to licensed government intelligence and law enforcement agencies to help them fight terrorism and serious crime."

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https://www.bbc.com/news/business-50230431

2019-10-30 05:10:01Z
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S&P 500 rises further into record territory; Google miss weighs on tech shares - MarketWatch

U.S. stocks traded on either side of unchanged Tuesday, a day after the S&P 500 index scored a record close, as investors kept their attention on a stream of corporate earnings and awaited a two-day Federal Reserve meeting that’s expected to deliver another interest rate cut on Wednesday.

What are major indexes doing?

The Dow Jones Industrial Average  DJIA, +0.04% rose 4 points, or less than 0.1%, at 27,094, while the S&P 500 index SPX, +0.16% rose 4 points, or 0.1%, to 3,044, after it notched an all-time intraday high just shy of 3,048. The Nasdaq Composite Index COMP, -0.33% retreated 26 points, or 0.3%, at 8,300.

The S&P 500 ended in record territory for the first time in three months on Monday, with the large-cap index rising 16.87 points, or 0.6%, to close at a record 3,039.42, taking out the previous all-time closing high of 3,025.86 set on July 26. Other major indexes weren’t far behind, with the Dow ending just 1% from its record close set on July 15 and the Nasdaq Composite finishing just shy of its record close of 8,330.21 set on July 26.

What’s driving the market?

Investors parsed another round of corporate earnings reports Tuesday.

Shares of Google parent Alphabet Inc. GOOG, -1.98% GOOGL, -2.06%  were down 2% after the search giant reported a third-quarter earnings miss late Monday, helping weigh on technology shares and the broader S&P 500.

Corporations, however, largely continued a trend of reporting better-than-feared third quarter results, though expectations were lowered significantly heading into earnings season. Dow components Merck & Co. Inc. MRK, +4.26% and Pfizer Inc. PFE, +3.10%  were both on the rise. Merck reported third-quarter profit and revenue that beat expectations and Pfizer said that third-quarter earnings rose more than expected, while upgrading guidance for the full-year 2019.

The drug companies combined to give the Dow a 15-point boost in early Tuesday trade.

U.S.-China trade was also on the radar, with equities getting a lift Monday from positive noises out of Beijing and Washington late last week and over the weekend on prospects for concluding a deal. Stocks pulled back Tuesday afternoon, however, after a Reuters report that a “phase one” trade deal may not be ready for signing by the time President Trump and President Xi Jinping meet next month in Chile.

The focus was also turning to the Fed, with investors pondering whether the central bank will move to dampen expectations for further monetary easing beyond Wednesday’s expected interest rate cut.

Read: 3 things to watch when the Fed meets this week

“Before the Fed releases its decision tomorrow and top-tier economic data begin to trickle in, today is likely to show a lackluster session, although we doubt the positive mood will come to an abrupt end,” wrote analysts at UniCredit Bank, in a note.

Related: Why would the Fed cut interest rates a 3rd time even as stocks near records?

The highlight of this week’s economic calendar comes Friday with the October U.S. employment numbers. On Tuesday, investors were watching the Case-Shiller home-price index, which fell 0.2% in August while rising 2% year-over-year.

U.S. consumer confidence edged lower in October, with the Conference Board’s consumer confidence index printing at 125.9, from 126.3 in the prior month. Economists polled by MarketWatch had forecast a reading of 128.0.

Pending home sales rose for the second month in September, with the National Association of Realtors reporting they climbed 1.5%.

What companies are in focus?

Boeing Co. BA, +0.87%  shares were on investors radar as chief executive officer Dennis Muilenburg appeared before the U.S. Senate Commerce Committee as part of its investigation into the company's 737 Max which were involved in 2 deadly crashes in the last year. Boeing’s stock was up 0.5%.

General Motors Co. GM, +5.10%  reported third-quarter profits that were well above expectations, despite a month long strike, and revenue that fell less than forecast, sending shares 5.1% higher Tuesday morning.

Shares of Mastercard Inc. MA, -0.11%  rose 0.1% early Tuesday after the payments company beat forecasts for profits and sales in the third quarter.

Shares of ConocoPhillips COP, +3.09%  fell 1.6% after the energy company beat estimates for earnings-per-share but did not report a revenue figure.

HCA Healthcare Inc. HCA, +6.37%  shares rose 6.3% Tuesday morning after the hospital operator reported earnings that fell more than expected in the third quarter, but revenue that rose more than expected.

Xerox Holdings Corp. XRX, +11.72%  shares were also up more than 14.1%, lifted after the copier maker reported third-quarter profit and revenue that topped expectations and said it had decided not to sell its consumer financing business.

Grubhub Inc. GRUB, -43.13%  shares were off 41% after the online food delivery company reported disappointing sales figures and a downbeat outlook.

A first-time quarterly profit wasn’t providing a lift for meat-substitute purveyor Beyond Meat Inc. BYND, -18.99%. Shares were down 17.3% Tuesday after the company reported results after Monday’s closing bell.

How are other markets trading?

The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, -0.43%  fell about 1 basis point to 1.840%.

In commodities markets, the price of West Texas Intermediate crude oil for December delivery CLZ19, -0.16%  fell $1 to $54.82 a barrel and the price of an ounce of gold GCZ19, -0.31%  retreated $8.20 to $1,487.60.

In Asia overnight, stocks traded mixed, the China CSI 300 000300, -0.42%  falling 0.4%, Japan’s Nikkei 225 NIK, +0.47%  gaining 0.4% and Hong Kong’s Hang Seng Index HSI, -0.39%  falling 0.4%. In Europe, stocks were mostly lower, as reflected by the Stoxx Europe 600 SXXP, -0.16%, which fell 0.3%.

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https://www.marketwatch.com/story/stock-index-futures-edge-lower-after-sp-500-notches-record-2019-10-29

2019-10-29 17:12:32Z
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Australia sues Google over alleged misuse of location data - CNN

The Australian Competition and Consumer Commission (ACCC) filed a lawsuit against Google on Tuesday, alleging that the company "engaged in misleading conduct and made false or misleading representations to consumers" related to location data.

Regulators around the world are subjecting Google to increased scrutiny over its search and data practices. The European Union has gone after the tech giant with tough new regulations, court battles and massive antitrust fines. Google (GOOGL) and its parent company, Alphabet, are also involved in a broad antitrust review launched by the US Department of Justice.

The lawsuit filed in Australia is the first major court case resulting from an 18-month inquiry into tech platforms such as Google and Facebook that recommended more regulation for tech companies and efforts to improve competition in media.

The regulator claimed that on-screen messages on Android mobile phones and tablets made it seem as though users had stopped Google from collecting location data even though they hadn't.

"We are taking court action against Google because we allege that as a result of these on-screen representations, Google has collected, kept and used highly sensitive and valuable personal information about consumers' location without them making an informed choice," ACCC Chair Rod Sims said in a statement.

A Google spokesperson told CNN Business that the company is reviewing the allegations.

"We continue to engage with the ACCC and intend to defend this matter," the spokesperson said.

The ACCC alleges that from January 2017 to late 2018 Google made users setting up a Google Account on Android mobile phones and tablets believe that switching off "Location History" would prevent location data collection.

In fact, users had to switch off both "Location History" and "Web & App Activity" settings to prevent their location data from being collected.

From mid-2018 to late 2018 Google also made it seem that users could only prevent the collection, storage and use of location data by ending their use of certain Google services, such as Google Search and Google Maps, according to the regulator.

However switching off both settings would have made this possible.

"Many consumers make a conscious decision to turn off settings to stop the collection of their location data, but we allege that Google's conduct may have prevented consumers from making that choice," said Sims.

The ACCC is asking the court to impose penalties, declarations and orders requiring the publication of corrective notices, as well as a compliance program, according to a statement.

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https://www.cnn.com/2019/10/29/tech/google-location-data-australia-scli-intl/index.html

2019-10-29 11:55:00Z
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Saudi Aramco aims to begin planned IPO on Nov. 3: sources - Reuters

DUBAI/RIYADH (Reuters) - Saudi Aramco aims to announce the start of its initial public offering (IPO) on Nov. 3, three people with direct knowledge of the matter told Reuters, after delaying the deal earlier this month to give advisers time to secure cornerstone investors.

The people also said Aramco’s chief executive officer, Amin Nasser, was not present at the conference on Tuesday as he was meeting investors abroad ahead of the offering.

Aramco is looking to float a 1% to 2% stake on the kingdom’s Tadawul market, in what would be one of the largest ever public offerings, worth upwards of $20 billion.

Aramco, in response to queries by Reuters, said on Tuesday the oil company “does not comment on rumour or speculation. The company continues to engage with the shareholders on IPO readiness activities. The company is ready and timing will depend on market conditions and be at a time of the shareholders’ choosing.”

The people declined to be identified due to commercial sensitivities.

The company will soon have more shareholders from institutions, the head of the kingdom’s sovereign wealth fund, Yassir al-Rumayyan, said.

Al-Rumayyan, governor of the Public Investment Fund (PIF) and chairman of Aramco’s board of directors, was speaking at a panel at the conference in Riyadh.

Aramco will start subscription for investors in its initial public offering on Dec. 4, Saudi-owned news channel Al-Arabiya said in a news flash on Tuesday citing sources.

The oil giant plans to announce the transaction’s price on Nov. 17, it added. The company will begin trading on the local stock market, the Tadawul, on Dec. 11, the broadcaster reported.

The prospect of Aramco selling a piece of itself has had Wall Street on tenterhooks since Crown Prince Mohammed bin Salman first flagged it three years ago.

However, his desired $2 trillion valuation has always been questioned by some financiers and industry experts, who note that countries have been accelerating efforts to shift away from fossil fuels to curb global warming, putting oil prices under pressure and undermining producers’ equity value.

Russia’s sovereign wealth fund, the Russian Direct Investment Fund (RDIF), is working on a consortium of investors for Aramco’s IPO, its chief executive said.

FILE PHOTO: The Saudi Aramco logo pictured at the company's oil facility in Abqaiq, Saudi Arabia, October 12, 2019. REUTERS/Maxim Shemetov

“There are several Russian pensions funds who are interested to invest in the Aramco IPO and we have also received indications from our Russia-China fund of some Chinese major institutions also interested in Aramco IPO,” Russian Direct Investment Fund (RDIF) head Kirill Dmitriev told reporters on Tuesday.

Separately, Aramco has not approached the Kuwait Investment Authority (KIA) to invest in the IPO, the sovereign wealth fund’s managing director Farouk Bastaki said on Tuesday.

“KIA has not been approached by Aramco or its advisers for the IPO, and KIA will look at the IPO like any other investment,” Bastaki told reporters on the sidelines of an investment conference in Riyadh.

Reporting by Hadeel Al Sayegh in Dubai, Davide Barbuscia and Saeed Azhar in Riyadh; Additional reporting by Rania El Gamal and Marwa Rashad in Riyadh, and Asma AlSharif in Dubai; editing by Giles Elgood and Jason Neely

Our Standards:The Thomson Reuters Trust Principles.

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https://www.reuters.com/article/us-saudi-aramco-ipo/saudi-aramco-aims-to-begin-planned-ipo-on-nov-3-sources-idUSKBN1X80JH

2019-10-29 12:08:19Z
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