Brewing deal, and Democrats prep for debate--5 things to know today

by  

Laura Lorenzetti ,  

Geoffrey Smith

Here’s what you need to know to start your day.

Hello friends and Fortune readers.

Wall Street stock futures are lower this morning after data showing that China’s exports fell for the second straight month in September, this time by 3.7%. The figures revived fears about the extent of the slowdown in China’s economy. The country is due to publish gross domestic product figures for the third quarter next week.

Today’s must-read story is by Fortune’s Ben Geier on why the Presidential primary debates matter–at least somewhat. They are at least a small part of the bigger picture for voters. Read more here.

Here’s what else you need to know.

1. Megabrew Inc. is a big step closer to reality

The world’s two biggest brewers have agreed in principle to merge, after Anheuser-Busch InBev, the maker of Budweiser and Stella Artois, raised its offer for SABMiller to 44 British pounds ($67.32) a share. The deal values SABMiller at $104 billion, making it the largest merger of the year to date, and clearing the way for a company that will dominate the beer market in virtually every major market in the world. SABMiller’s shares are the biggest risers on the London Stock Exchange this morning, while ABI’s are also up around 2.5%.

2. Earnings season for the big banks starts.

JPMorgan Chase  JPM -0.34%  rings in the start of third-quarter earnings season for the big banks in the U.S. when it reports after the market close. JPMorgan is expected to post earnings-per-share of $1.39, based on analyst estimates. Though, the bank has had trouble meeting consensus estimates, missing in three of the last six quarters. The financial industry had the second largest downward revision for earnings growth of the ten sectors with the S&P 500 Index. Earnings estimates were cut for 53 of the 88 companies in the industry, according to FactSet.

3. Libor case comes to the U.S.

The first U.S. trial concerning the rigging of the benchmark interest rate known as Libor begins in New York City today. Two former Rabobank tradersfrom Britain, Anthony Allen and Anthony Conti, are being accused of manipulating Libor in order to help their company’s lending positions. A U.S. and European investigation resulted in charges against 22 people in America and Britain and nearly $9 billion in regulatory settlements.

4. Update on the oil market.

Two different oil reports hit today. First up is the International Energy Agency’s monthly Oil Market report at 4 a.m. ET with the latest outlook for global oil supply and demand. Oil prices sank to a six-year low in August, but the IEA anticipated that global oil demand growth will climb to a five-year high this year. Then, at 2 p.m. ET the U.S. Energy Information Administration will release its Drilling Productivity Report, providing an update on oil and gas production from the biggest shale formations.

5. Democratic presidential hopefuls take the stage.

The first Democratic debate of the 2016 presidential election will take place in Las Vegas tonight at 9 p.m. ET. Americans will get their first side-by-side look at Democratic presidential hopefuls Hillary Clinton, Bernie Sanders, Martin O’Malley, Jim Webb and Lincoln Chafee. The debate will air on CNN, which said that U.S. Vice President Joe Biden could still join in if he declares his intention to run for the presidency before the candidates take the stage.

Samsung vote and GE earnings

by  

Tom Huddleston, Jr. ,  Geoffrey Smith

Here’s what you need to know today.

Hello friends and Fortune readers.

Wall Street stock futures are mixed early Friday as Germany prepares to give its blessing to talks on a new bailout for Greece and China’s stock markets finish the week on a strong note. Crude oil futures have fallen to a three-month low of $50.81, on ongoing fears about oversupply in the wake of Iran’s nuclear deal.

Today’s must-read story is from Fortune‘s Jonathan Vanian detailing how Italian-based security firm Hacking Team has enabled the intelligence agencies of numerous countries to spy on their citizens.

Here’s what else you need to know today.

1. Paul Singer’s Elliott loses Samsung vote

The anti-semitic campaign may have been pulled, but it had its effect. Shareholders in Samsung C&T, the construction and trading arm of the Korean conglomerate, narrowly voted through a disputed takeover offer from a company controlled by the son of Samsung’s group chairman. The takeover has been the second big public embarrassment for Korea’s traditional business elite in a year, following the antics of “Nut Rage Princess” Heather Cho at Korean Airlines.

2. Germany weighs Greek bailout

Germany’s Parliament will vote today on Greece’s latest bailout proposal, which includes austerity measures and pension cuts that received the approval of the Greek Parliament earlier this week. The European Central Bank increased emergency funding to Greece for the first time in two weeks Thursday, and the country’s lawmakers approved cuts needed to start talks on the $94 billion package. ECB President Mario Draghi said he views Greece’s place in the euro zone as secure.

3. Earnings, updates from GE

This morning brings second-quarter earnings results from General Electric  GE 1.01%  and the conglomerate’s investors will be keen to hear news on GE’s plan to sell off most of its GE Capital finance business as well as updates on the regulatory obstacles in the way of the company’s attempt to sell its appliances business and the GE-Alstom deal. As far as GE’s financial results are concerned, the company is expected to post a decline in revenue due to the strong U.S. dollar.

4. More earnings

Also reporting quarterly results today is Swedish appliance manufacturer Electrolux  ELUXB , the company looking to buy GE’s appliance business. Earlier this month, the U.S. Justice Department sued to block the GE-Electrolux deal on the grounds that it would reduce competition in the market for kitchen appliances. Meanwhile, aerospace conglomerate Honeywell International  HON -0.26%  reports second-quarter results, with the strong U.S. dollar expected to weigh down the company’s revenues. Railroad holding company Kansas City Southern  KSU -0.90%  also reports second-quarter numbers today for a period affected by weak coal freight volumes.

5. Gauging inflation

The U.S. Labor Department will release the Consumer Price Index for June today and the index likely increased at a slower rate than during the previous month. The CPI, which is used as a measure of inflation in the U.S. economy, is expected to have risen 0.3% last month, versus 0.4% growth in May.

— Reuters contributed to this report.

Growth data, and a new Alfa Romeo

by  

Laura Lorenzetti

Here’s what you need to know to start your day.

Hello friends and Fortune readers.

Wall Street stock futures are lower Wednesday amid concerns about Greece. A Greek official has reportedly said that the country’s international lenders have rejected the latest proposals on talks to gain aid and avoid a default.

Check out Fortune’s first-ever 100 Best Workplaces for Millennials. You may be surprised to find that the No. 1 company is a Pennsylvania-based home renovation company. Peruse the whole list here.

Here’s what else you need to know today.

1. Greece talks

Greek Prime Minister Alexis Tsipras has attacked the stance of “certain” creditors as “strange” because they rejected proposals presented by Athens to bridge a budget gap, a government official said on Wednesday. Tsipras made the comments before heading to Brussels to meet the chiefs of Greece’s three creditor institutions — the European Commission, the European Central Bank and the International Monetary Fund, the official said in a statement.

2. U.S. first-quarter GDP finalized.

The U.S. Commerce Department releases its final revision to first-quarter gross domestic product at 8:30 a.m. ET. Last month, the government slashed its estimate, revealing the economy shrank by a disappointing 0.7% from its original quote of 0.2% growth. The agency cited dismal trade performance and continued caution by consumers and businesses for the lagging results. Today’s announcement is likely to temper that adjustment, showing that the U.S. economy shrank about 0.2% in the first quarter. The department will also release revised data for first quarter corporate profits.

3. Monsanto reports back.

Monsanto  MON -1.64%  reports its third-quarter earnings today, and investors will be tuning in to find out more about the company’s attempt to purchase rival Syngenta. They will be prodding for more information on how Monsanto plans to woo shareholders at the Switzerland-based company, which has so far rebuffed any offers. As of Tuesday, Syngenta rejected Monsanto’s nearly $45 billion takeover bid, saying the sum undervalues its business and doesn’t account for the regulatory challenges such a deal would pose.

4. Now presenting the all-new Alfa Romeo.

Fiat Chrysler CEO Sergio Marchionne will unveil thefirst new Alfa Romeo model today in Milan. The company has been trying to revamp the brand as a central pillar of its plan to revive global vehicle sales by 60% to 7 million cars by 2018. Fiat Chrysler will be depending on the classic brand, which has been around since 1910, to multiply its sales by more than fivefold to 400,000 vehicles in 2018. It’s making that happen with a 5 billion-euro investment to create eight new models and increase production.

5. A golden merger.

Canadian gold miners Alamos Gold and AuRico Gold meet today for a special shareholders meeting where investors for both companies will vote on a $1.5 billion merger plan, which was originally unveiled in April. The deal was labeled “a merger of equals” by the company and the combined company is expected to produce as much as 425 kilo-ounces of gold in Mexico and Canada alone this year.

Additional reporting contributed by Reuters.

Baltimore riots, Google, and Twitter earnings

by  

Laura Lorenzetti

Here’s what you need to know to start your day.

Hello friends and Fortune readers.

Wall Street stock futures are mixed to lower this morning as quarterly earnings reports keep rolling in.

Companies reporting today include JetBlue  JBLU -0.91% , UPS  UPS 0.20%  and Coach  COH -6.68%  before the opening bell, and Twitter  TWTR 1.65%  and Kraft Foods  KRFT -1.94%  follow after the close.

Before the open, automaker Ford  F 0.00%  posted a profit that missed analyst expectations as it sold fewer vehicles in North America due to the rollout of the F-150 pickup truck and continued to lose money in South America and Europe.

Today’s must-read story is by Fortune’s Roger Parloff:Smart guns: They’re ready. Are we? It looks at smart-gun technology that was designed to limit the number of children who die in gun accidents — and it’s elicited strong feelings from the pro-gun lobby. You can watch a video on the story here:

Here’s what else you need to know about.

1. Baltimore declares state of emergency.

Days of angry but peaceful protests in Baltimore over the death of Freddie Gray devolved after his funeral Monday into some of the worst riots seen in the U.S. since 1968, prompting Maryland Governor Larry Hogan to call in the National Guard.

2. Google offers an olive branch in Europe.

Google is shaking up its news service in Europe, in a move that may help beleaguered publishers, bolster its position vis-a-vis Facebook–and gain the company some allies in its battle against European Union antitrust charges. The initiative has been met with a stony silence by Rupert Murdoch’s News Corp and Germany’s Axel Springer.

3. Twitter reports quarterly earnings.

Twitter reports its first quarter results after the market close today. One typical metric will be missing from the release this time around: timeline views. The metric, which counts each time a user logs in or refreshes their timeline, is the only standard that indicates how engaged its 288 million active users are on the site. CFO Anthony Noto haslong said the metric is irrelevant given recent product changes that reduce the need to refresh social feeds. It’s unclear if Twitter will offer up a new engagement metric today.

4. Merck and Pfizer struggle against generic competition.

Merck & Co.  MRK 3.65%  and Pfizer  PFE -1.90% release first quarter earnings this morning–and both areexpected to post lower earnings due to rising competition from generics. Merck is also dealing with weak growth of its Januvia diabetes drug, though pay attention for any update on its potentially lucrative immuno-oncology drugs that are in clinical trials.

Meanwhile, along with rising generic competiton for its Celebrex painkiller, Pfizer is coping with the end of a longtime (and lucrative) co-promotion agreement with Amgen to sell its Enbrel arthritis drug. Investors will be more interested in updates on how its potential blockbuster Ibrance treatment for breast cancer is faring in clinical trials.

5. The Fed begins its April two-day meeting.

The Federal Open Markets Committee goes into the first of its two-day meeting on interest rate policy. Not much is expected to go down in this meeting since the FOMC already ruled out an April rate hike, but investors will be looking for more information on exactly when they might start boosting interest rates. It could be as soon as June. Look out for any word on how comfortable the Fed is getting with inflation data.

—Reuters contributed to this report.

Apple reports, and Deutche Bank cuts

by  

Laura Lorenzetti

Here’s what you need to know to start your day.

Hello friends and Fortune readers.

U.S. stock futures are higher this morning, after the Nasdaq composite closed at another all-time high on Friday. The S&P 500 index also finished Friday at a new high. European shares are trading down this morning, while Asian markets closed mostly up for the day.

Investors are looking ahead to Apple’s  AAPL 1.90% earnings report, due out after the close of trading. And Chipotle Mexican Grill  CMG 0.94%  has finished removing genetically modified ingredients from its foods, making it the first big restaurant chain to do so, reports The Wall Street Journal.

Here’s what else you need to know about today.

1. Apple reports quarterly earnings.

Apple reports its fiscal second quarter results today after the market closes. Apple had its most profitable quarter ever at the end of last year when it sold 74.5 million iPhones. Analysts estimate that the tech giant sold about 56.8 million iPhones last quarter, according to a poll byFortune. Look out for any word on the recent launch of the Apple Watch from CEO Tim Cook, though Apple said it won’t break out sales of the new item for fear of giving competitors useful information.

2. Deutsche Bank cuts its global footprint.

Deutsche Bank  DB -4.17%  is shifting strategy and looking to cut nearly $3.8 billion in annual costs by selling Postbank and shrinking its securities business. Germany’s biggest bank also lowered its profitability target today, which is all part of a new five-year plan to streamline the bank’s businesses. Co-CEOs Juergen Fitschen and Anshu Jain have also been under pressure to boost shareholder returns, which have had the worst performance among global peers during the duo’s tenure.

3. France’s Capgemini buys IGATE for $4 billion.

France’s biggest IT consulting group will shell out $4 billion in cash to expand into the key North American market. IGATE  IGTE 3.40% , a technology and services company with expertise in the financial services industry, will help bolster Capgemini’s North American revenue by nearly a third. The extra scale, which includes contracts with client such as Royal Bank of Canada  RY 0.79% and General Electric  GE 0.30% , will give Capgemini the heft it needs to compete head-to-head with the likes of Accenture  ACN 0.80%  and IBM  IBM 0.94% .

4. Executives and global leaders head west for ‘Davos with palm trees.’

The Milken Institute’s Global Conference kicks off today in Los Angeles, an event sometimes called “Davos with palm trees” given its similarity to the event held in Switzerland each year. The conference’s goal is to bring “leading thinkers in disparate disciplines” together in order to “exchange ideas and solve some of the world’s toughest challenges.” The financial community will be a large presence, including private equity billionaire Steve Schwarzman, former Treasury secretary Timothy Geithner and macroeconomic thinker Mohamed El-Erian. Facebook  FB 1.21%  COO Sheryl Sandberg and actress Patricia Arquette are also slated to make appearances.

5. Japanese Prime Minister visits Washington.

Prime Minister Shinzo Abe will address the U.S. Congress today, the first Japanese leader to do so since World War II. He plans to position Japan as an ally that’s willing to play a larger military role in Asia. The address comes during a week-long trip that kicked off yesterday, which will focus on investment, trade and defense. Global leaders will be listening carefully to Abe’s remarks for any mention about the Pacific conflict that ended 70 years ago, and what he says or doesn’t say could have a bearing on an effective U.S.-Japan alliance today.

Google, Amazon report, and Petrobras comes clean

by  

Fortune Editors

Here’s what you need to know to start your day.

Hello friends and Fortune readers.

Wall Street stock futures are mixed this morning as quarterly earnings reports keep rolling in.

Results are hitting the tape from the likes of Dow stocks 3M  MMM -3.43% , Caterpillar  CAT 0.29% , and Procter & Gamble  PG -0.82%  this morning, and later we’ll hear from Microsoft  MSFT 0.29% , Amazon  AMZN -0.71% , and Google  GOOG 0.51% .

Today’s must-read story is by Fortune’s Erika Fry: A story on a Boston-area biotech that may be closer than ever to solving the puzzle of Alzheimer’s Disease. You can watch a video on the story here:

Here’s what else you need to know about today.

1. Tech giants report.

Big-name technology companies will be in focus after the close of trading today when Microsoft, Google and Amazon report earnings.

Microsoft, the world’s largest software company, is expected to report a sharp fall in third-quarter profit as sales of personal computers remain sluggish. Search engine giant Google is expected to report higher revenue and profit for the first quarter, although a strong dollar is likely to weigh on results, analysts say. Google, which has been officially accused by the European Union of cheating consumers and competitors, is also being investigated for its Android mobile operating system. Analysts say the latter could prove to be a bigger threat to Google’s future profitability.

E-commerce company Amazon.com will report its first-quarter results amid an improvement in investor sentiment after the company’s fourth-quarter earnings beat expectations. A moderation in shipping losses and normalization of international growth rate are likely to benefit Amazon’s results. Investors will watch out for comments on the increase in paid membership for Amazon Prime, margin growth in the company’s cloud computing arm Amazon Web Services and sales growth in the media business and logistics operations.

2. P&G’s sales down.

Procter & Gamble said Thursday its sales fell for the fifth quarter in a row, hurt by a stronger dollar and lower demand for its beauty, hair and personal care products. Net income attributable to P&G fell to $2.15 billion, or 75 cents per share, in the third quarter ended March 31, from $2.61 billion, or 90 cents per share, a year earlier. The world’s largest household products maker’s revenue fell to $18.14 billion from $19.64 billion. Roughly two-thirds of the company’s sale in fiscal 2014 was from outside North America.

3. Petrobras comes clean.

Brazilian oil giant Petrobras said it lost $8.8 billion in the fourth quarter after taking a write-down of $16.8 billion in the wake of a massive corruption scandal. The 2014 full-year net loss of 21.6 billion real, which exceeds the company’s total accumulated profit for nearly four years, comes as new chief executive Aldemir Bendine seeks to restore investor confidence. A widening international probe of contract fixing, bribery and political kickbacks at the company, formally called Petroleo Brasileiro SA, led to lengthy delays in publishing the results.

4. Cable deal in the balance.

The U.S. Federal Communications Commission appears to have thrown a wrench in Comcast’s  CMCSA 1.21%  $45 billion bid for Time Warner Cable  TWC 0.21% , according to The Wall Street Journal. FCC staff have reportedly recommended the agency put the deal in the hands of an administrative law judge, a move the Journal said would be taken “as a strong sign that the FCC doesn’t believe the deal is in the public interest.” A hearing could be a drawn-out process, and some regulatory experts describe the procedure as a deal-killer, although Comcast would be entitled to make its case for the acquisition.

5. Flash crash stash.

Nearly five years after the so-called “flash crash”—when the market dropped hundreds of points in the span of a few minutes on May 6, 2010—authorities have arrested a trader that they believe helped cause the swoon.

But the alleged culprit, a U.K.-based futures trader named Navinder Singh Sarao, didn’t actually make a whole lot of money off the flash crash, reports Fortune’s Jen Wieczner. The U.S. Justice Department’s criminal complaint against Sarao says that he netted $879,018 in profits on the day of the crash, Wieczner says — that’s a relatively small haul compared to Sarao’s gains on other days where he used the same trading strategy, according to the indictment.

—Reuters contributed to this report.