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Aug 4, 2016

Dealbook Morning Edition - August 4, 2016: Investors Turn to Risky Regions for Rewards, by Amie Tsang

The New York Times

By Amie Tsang
Investors Turn to Risky Regions for Rewards Yield-starved investors are so desperate for returns that they have been willing to take on the risk of investing in a country that recently underwent a failed coup and an attack on its main airport. Turkish stocks and bonds have been rising, in spite of the country’s debt being downgraded. It seems a 10-year bond offering a 9 percent reward is too tempting to turn down, even if the inflation rate is 8.7 percent and the currency is heading south.
Stocks and bonds in developing markets have been on a tear as investors scoop up discounted stocks and hunt for returns in a world of super-low interest rates. They are rooting around in places like Brazil and South Africa, while markets more broadly appeared to be in a lull.
The turbulence that followed Britain’s vote to leave the European Union has dissipated and left behind only an uneasy calm. But there are still events that could rouse investors, as Bloomberg reports. As one fund manager put it: “At some point, the jaws must snap.”
Tesla’s Costly Ambitions No one expects Tesla to turn a profit anytime soon, but for investors, the deeper worry is that Tesla has been inconsistent in its growth plans. The company, which reported on Wednesday a loss of $293.2 million in the second quarter, also missed its target of delivering 17,000 vehicles by 3,000.
And its expansion plans cannot mask the challenges it faces in turning its innovations into mass productions and serious revenue. The company has to satisfy more than 300,000 preorders for its cheaper Model 3 sedan and meet its production targets while contending with heightened scrutiny from federal auto safety regulators and the Securities and Exchange Commission.
On the agenda The Bank of England will publish its latest monetary policies and inflation report at 7 a.m. A news conference follows at 7:30 a.m. Viacom, Kraft Heinz and LinkedIn are among the companies reporting earnings.
Federal Reserve Fines Goldman Sachs $36 Million A case that raised questions about revolving doors between the government and Wall Street has escalated, and the Federal Reserve has forced Goldman Sachs to pay a penalty over the leak of confidential information from the Federal Reserve Bank of New York. The decision by the Federal Reserve is awkward since one of its own employees disclosed the information, but the Fed seems determined to take a tougher stance against misconduct on Wall Street.
The fight is not over yet: The Fed is also trying to bar Joseph Jiampietro, a manager of the Goldman Sachs executive who received the leaked documents, from the banking industry. Although the leaked documents were found on Mr. Jiampietro’s desk, the company never established that he knew about the leak. Mr. Jiampietro’s lawyer accused the Fed of using his client as “an industry scapegoat.
Contact amie.tsang@nytimes.com
Jet.com boxes wait to be packed for shipping in Swedesboro, N.J.
Walmart Is Said to Be in Talks to Acquire Jet.com
By MICHAEL J. DE LA MERCED AND MIKE ISAAC
Jet.com was born out of a dream of taking on Amazon, but it has struggled, rapidly burning through much of the cash it raised from investors.
Jeff Bewkes, Time Warner’s chief executive, said the stake in Hulu was part of the company’s broader commitment to expanding viewers’ options for watching programming.
Time Warner Acquires 10% Stake in Hulu
By EMILY STEEL
The deal, which will go into effect early next year, is part of a push by the company to expand viewing options for its customers.
BREAKINGVIEWS
Time Warner Deal Gives Hulu a Much-Needed $580 Million Lift
By JENNIFER SABA
Hulu, the digital-TV service, will get $580 million from Time Warner and fresh programs from its TNT and CNN networks.
William A. Ackman has had his ups and downs as the manager of $12 billion asset hedge fund Pershing Square Capital.
Ackman’s Hedge Fund Sells Off Big Stake in Canadian Pacific
By MATTHEW GOLDSTEIN, ALEXANDRA STEVENSON AND LESLIE PICKER
It was the latest sale by the activist investor William A. Ackman, whose fund, Pershing Square Holdings, is down 19 percent for the year.
How Snapchat Helped Ad Buyers Get Over Their Fear of a Ghost
By KATIE BENNER AND MICHAEL J. DE LA MERCED
When the company started offering ads, brands were wary of high prices and vanishing content. Then it let football fans drench themselves in virtual Gatorade.
The Fox News broadcast booth last week at the Democratic National Convention in Philadelphia.
Fox News Sexual Harassment Inquiry Is Said to Look at What Others Knew
By JIM RUTENBERG AND BEN PROTESS
Investigators are examining whether other executives failed to report improper behavior by Roger Ailes, the network’s former chairman, people briefed on the inquiry said.
ON FANTASY SPORTS
Win for DraftKings and FanDuel Opens Door for Sports Betting in New York
By JOE DRAPE
Gov. Andrew M. Cuomo signed a bill classifying daily fantasy sports as a game of skill. It is a step toward legalized betting on games.
Donald J. Trump heralded the Trump Taj Mahal as “the eighth wonder of the world” when it opened in 1990. The casino’s management says it will close next month.
Last Atlantic City Casino Linked to Trump Is Closing Amid a Strike
By PATRICK MCGEEHAN
The management of Trump Taj Mahal, which has been picketed by unionized workers for over a month, said the casino would shut down after Labor Day.
Kevin Roberts, the chairman of Saatchi & Saatchi, announced his resignation after his dismissive comments about gender diversity in the ad industry drew rebukes.
Publicis Executive Is Out After Gender Diversity Remarks
By SYDNEY EMBER
Kevin Roberts, Saatchi & Saatchi chairman, is departing after making dismissive comments about issues for women in advertising.
Boris Mordkovich, one of the founders and the chief executive of Evelo, with an Aurora model electric bicycle in Cambridge, Mass.
The Hottest Start-Up Market? Baby Boomers
By CONSTANCE GUSTKE
The staggering size of the so-called longevity economy has been attracting more entrepreneurs, deep-pocketed financiers and events to pitch new ideas.
 
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Hedge Funds Bolster Quantitative Approach
By THE FINANCIAL TIMES
The computer-powered hedge fund industry now has almost $880 billion of assets under management — up from $408 billion in 2009, according to research data — and is expected to continue growing.
New Jersey Backs Away From Hedge Funds
By THE WALL STREET JOURNAL
The decision, by the New Jersey Investment Council, will take the state’s target hedge-fund commitment to 6 percent, down from 12.5 percent.
Samsung Said to Be in Talks to Buy Fiat Assets
By BLOOMBERG
Samsung Electronics is in advanced talks to buy some of the operations of a maker of auto parts, Magneti Marelli, in a deal that could be worth more than $3 billion, according to people familiar with the matter.
Morgan Stanley Discloses $3.21 Billion Italian Swaps Claim
By BLOOMBERG
Morgan Stanley said an Italian prosecutor may seek as much as $3.21 billion over accusations that derivatives the investment bank sold more than a decade ago were improper and unfairly unwound.
Big Win for Tax Whistle-Blowers as Pair Gets $17.8 Million
By THE WALL STREET JOURNAL
The award, by the United States Tax Court, was the first ruling to allow whistle-blowers to get a portion of criminal fines and civil forfeitures in addition to part of the taxes recouped by the government because of information they provided.