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Aug 16, 2016

DealBook Afternoon News Summary - August 16, 2016: Top Story | Highlights | Buzz Tracker | Looking Ahead

The New York Times
Top Story
Expect Little Antitrust Challenge to Walmart’s Bid for
Regulators are stuck in an outdated view of the world, while the internet giants are more attuned to the threat of nascent competitors.

DealBook Highlights
James Staley, chief executive of Barclays, has accelerated the sale of businesses that the bank no longer considers essential to its operations.
Barclays, on a Selling Spree, Aims to Get Back to Basics
The bank is accelerating the sale of businesses it deems nonessential, hoping to return to growth — and higher dividends.
Former Goldman Sachs Trader Fined $400,000 and Barred for 2 Years
The Securities and Exchange Commission said the trader, Edwin Chin, misled customers into paying more for residential mortgage-backed bonds.
Linde Confirms Merger Talks With Its Rival Praxair
A deal would combine two of the world’s largest providers of industrial-gas products and create a giant with more than $30 billion in annual revenue.
James Gorman, chief executive of Morgan Stanley in his office.
ValueAct’s Bet on Morgan Stanley Bet Goes Only So Far
ValueAct Capital Management has invested $1 billion in Morgan Stanley, but an activist hoping to really shake up the bank would agitate for a breakup.
Bankruptcy for Banks: A Sound Concept That Needs Fine-Tuning
A House bill would allow banks to be reorganized without hurting the economy, but it has several features that could make bailouts more likely.
Buzz Tracker
Gridlock forces CFTC regulators to minimize talking. “It’s messed up.” Only in Washington: have your lawyer tell my lawyer to tell me what you think. – The Wall Street Journal
Monetary policy in a low R-star world. Central banks and governments around the world must be able to adapt policy to changing economic circumstances, writes John Williams. – Federal Reserve Bank of San Francisco
Hedge fund manager profited from death arbitrage. A vital function of the financial system is to shift risk, but that is mostly a euphemism, writes Matt Levine. –Bloomberg
Banks won’t wait to see what Brexit deal the U.K. can get. “Some plans will take time to execute, and firms can’t afford to wait until Jan. 1, 2019, and risk not being able to do business.” – Bloomberg
George Boutros couldn’t care less that rivals badmouth him. “It’s sour grapes,” says Silicon Valley’s M.&A. rainmaker. – Bloomberg
Hunting for yield? They’re handing it out in the money market. Rising rates paid by banks and other companies that issue commercial paper are luring new investors. – The Wall Street Journal
Banks are looking for a cheap way to store cash. How much money could you fit inside a van, a briefcase, a hotel room or under the bed? As interest rates turn negative, holding cash appears increasingly attractive. – Financial Times
Looking Ahead
Hints about an interest rate change from the Fed. On Wednesday, the Federal Reserve will release the minutes from its July policy meeting. During that meeting, the Fed announced that it would not change its benchmark interest rate but gave a positive economic assessment, hinting that the rate could go up later this year. Fed officials have given differing signals, however, on exactly when that move will come, leaving some to wonder whether it will be before the presidential election in November. – Zach Wichter
Shareholders to vote on Johnson Controls-Tyco merger. The Treasury Department issued rules this year that thwarted several deals known as tax inversions, which involve an American company combining with a foreign one to create a lower tax bill. One large inversion that managed to get through was the $16 billion deal involving the acquisition of Tyco, which is based in Ireland, by Johnson Controls in Milwaukee. The last hurdle for the deal is a vote by both sets of shareholders that is scheduled for Wednesday. Johnson Controls shareholders are to vote in Dallas, while Tyco’s shareholders will do so in Dublin. – Leslie Picker
Target and Walmart to report quarterly earnings. Two of the country’s largest retailers will release earnings this week. Target reports its second-quarter results on Wednesday, followed by Walmart on Thursday. With both retailers in the throes of the back-to-school season, analysts are eager to see what progress the two have made to improve their e-commerce businesses as the industry gears up for its busiest shopping months. – Rachel Abrams

Tuesday, August 16, 2016