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Jul 27, 2016

DealBook P.M. Edition - July 27, 2016: Fed Suggests a Growing Chance That Rates Will Rise This Year

Top Story
Fed Suggests a Growing Chance That Rates Will Rise This year
The central bank held rates steady but said near-term risks to the United States economy had dimmed.

DealBook Highlights
Brands Born Online, Reshaping the Retail Landscape
Dollar Shave Club, recently acquired for $1 billion, typifies online-only companies that have upended traditional models of stores and advertising.
A waiter in Málaga, Spain. European Union officials faced pressure to act against overspending in Spain and Portugal from countries like Germany and the Netherlands, which have insisted that a common currency needs commonly enforced rules.
Europe Decides Against Fines for Spain and Portugal
Officials apparently feared that punishing the countries for overspending would have spurred more austerity and helped fuel anti-European movements.
John Cryan, the chief of Deutsche Bank, at a conference in Berlin last month. The bank has been trying to defend its status as one of the last credible European challengers to the big American investment banks like JPMorgan Chase and Goldman Sachs.
Deutsche Bank, Facing Criticism, Surveys Limited Options
Despite investigations, failing grades from regulators and a critical I.M.F. report, the large German firm is clinging to Wall Street.
I.M.F. Financial Counselor to Join Standard Chartered as Chairman
José Viñals will join the lender’s board in October and assume the role of chairman on Dec. 1, succeeding John Peace.
Banco Santander’s Financial City, near Madrid. The Spanish bank’s profit declined by nearly half in the second quarter.
Santander Profit Down on Restructuring and Bank Fund Charges
The Spanish lender took a €120 million second-quarter write-down for its contribution to a fund intended to share the burden of bad loans with investors.
Twitter Might Want to Steal From Yahoo’s Playbook
With Twitter’s ad demand lower than expected and user growth stalled, now would be a good time for Jack Dorsey to find a suitor for his company.
Buzz Tracker
SABMiller said to halt ABinBev integration work. The move may throw the beer industry’s biggest deal ever into disarray. – Bloomberg 
Welcome to Zuckerworld. Facebook wants to own VR the way Apple and Google own mobile. That means taking control of the technology, from the software to the hardware. – Bloomberg Businessweek
Silicon Valley elites get home loans with no money down. What’s going on “might be good for the borrower and good for the lender,” says the C.E.O. of RedFin, “but it’s not necessarily good for San Francisco.” – Bloomberg
Sam Waksal’s start-up launches I.P.O. Steve Cohen, Dan Loeb, Ron Burkle and Ken Moelis could emerge winners in Kadmon’s offering. Mr. Waksal served five years in federal prison for insider trading. – The Wall Street Journal
Mr. Cohen’s newest bet: do-it-yourself computer traders. The billionaire is investing up to $250 million in a hedge fund that provides money for mechanical engineers and nuclear scientists to come up with market-beating mathematical models in their spare time. – The Wall Street Journal
Blackrock fills a Wall Street void in its headquarters hunt. The firm is considering sites at the Hudson Yards develpment on the far West Side, neighboring Manhattan West and the World Trade Center development in lower Manhattan. – The Wall Street Journal
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Looking Ahead
Volkswagen’s earnings to be weighed down by scandal. Volkswagen will on Thursday report its second-quarter earnings, which will be weighed down by the cost of the company’s emissions scandal. The company said in a preliminary report last week that it would show an operating profit of 5.3 billion euros for the first half of 2016 after subtracting €2.2 billion for fines and legal settlements. That sum brings the total set aside for emissions wrongdoing to €18.4 billion. Investors are hoping the carmaker will show progress in improving the profitability of its core Volkswagen brand. – Jack Ewing
A decision is expected on new British nuclear plant. After years of preparatory work, the French utility Électricité de France — better known as EDF — says it will make a decision on Thursday on whether to go ahead with the first nuclear power station to be built in Britain since the 1990s. The plant, at Hinkley Point in southwest England, has become a crucial test of whether nuclear plants can be built in industrialized countries in the wake of the 2011 Fukushima disaster in Japan. Despite the huge cost, about 18 billion pounds, the British government wants the power from the plant to replace aging generating facilities. – Stanley Reed