Friday, October 30, 2015

Today's Headlines

  • U.S. to Send First Troops to Syria to Combat Islamic State. The U.S. will intensify its military action in Syria, deploying fewer than 50 special operations forces inside the country for the first time to help coordinate the fight against Islamic State, White House Press Secretary Josh Earnest said. The new action represents an escalation of the U.S. fight against the terrorist group in Syria, where Russia has begun its own air campaign against rebels fighting the regime of President Bashar al-Assad. U.S. officials have complained that the Russians have largely targeted moderate rebel forces instead of Islamic State militants. President Barack Obama has repeatedly said that local forces must lead the fight against Islamic State, with training and assistance from the U.S. A White House official, who asked not to be identified in advance of an announcement, said in an e-mail that the special operations forces would coordinate local ground forces and the U.S.-led coalition engaging with Islamic State.
  • ICBC More Than Doubles Bad-Loan Provisions as Economy Cools. Industrial & Commercial Bank of China Ltd., the world’s largest lender by assets, reported a 0.5 percent increase in quarterly profit from a year earlier as it more than doubled provisions for bad loans. Net income climbed to 72.7 billion yuan ($11.5 billion) in the three months ended Sept. 30, a Hong Kong exchange filing showed Friday. That was close to the 72.8 billion yuan average of three analyst estimates compiled by Bloomberg. The lender set aside 19.3 billion yuan of provisions for bad loans in the quarter, more than double the amount a year earlier. “ICBC’s earnings growth in the fourth quarter may be even slower or they may even see a profit decline,” said Chen Xingyu, a Shanghai-based analyst at Phillip Securities Research. “The bad-loan situation will only deteriorate over the next year.”
  • Europe Stocks Cap Biggest Monthly Gain Since 2009 Amid Earnings. European shares were little changed on the final day of trading in a month that has seen their strongest rally in six years. IAG SA slipped 2.5 percent after its 2015 forecast trailed analyst predictions. L’Oreal SA fell 4.6 percent on worse-than-projected sales, dragging a gauge of personal and household goods to the biggest drop among industry groups. Banco Bilbao Vizcaya Argentaria SA lost 3.5 percent after posting a loss. BNP Paribas SA and Airbus Group SE added at least 1.8 percent after their profits topped estimates.
  • Big Oil Faces Big Dividend Dilemma. (video)
  • Sliding Inflation Expectations Lean Against Fed's Faith in Higher Prices. Officials say they need to be "reasonably confident" in the outlook for prices before raising rates. Results of two consumer surveys suggest expectations for inflation in the medium and long term are slipping. A monthly poll conducted by the University of Michigan showed U.S. households projected annual inflation will average 2.5 percent 5 years to 10 years from now, according to data released Friday. That matches the lowest on record in data going back to 1979.  
  • These Are the Charts That Scare Wall Street. (graph) Breakevens that go bump in the night and other spooky things. Sometimes there are announcements that send chills down Wall Street's collective spine. Other times, it's a well-defined trend portending disaster or threatening to upend the status quo that inspires fright. With Halloween just around the corner, we asked some of Wall Street's brightest for the charts that are more terrifying than Freddy Krueger. This is what we got back. 
  • Morgan Stanley(MS): The Grinch Could Ruin Christmas for Most Retailers. Consumers may have extra money, but they're not spending it. Morgan Stanley analysts aren't predicting a lot of cheer for retailers this holiday season. The bank sees holiday sales growth slowing this year despite an increase in the financial health of many consumers, according to analysts led by Kimberly Greenberger. In a note titled "The grinch could steal Christmas," they argue that while consumers will have plenty of extra pocket money this season, that won't necessarily translate into extra spending.
  • Obamacare Premiums Jump, But Insurers Still Struggle for Profit. Many people shopping for health coverage this weekend on the websites created by Obamacare are going to see double-digit percentage increases in their premiums. That’s still not enough for some insurers. Anthem Inc. says there remain competitors in the government-run marketplace offering premiums that aren’t enough to profitably provide the coverage patients will require. Prices in some areas probably will have to climb in 2017 and even 2018 to reach levels that make sense, according to Chief Financial Officer Wayne Deveydt. Meantime, Anthem will sacrifice market share to keep its plans profitable, he said. “When you have fewer national enrollees and you have price points that we don’t believe are sustainable, we’ve just made a conscious decision we’re not going to chase it,” Deveydt told analysts on a conference call on Wednesday. 
  • Ackman, and His $448-a-Share Call, Fall Flat in Valeant Defense. As the billionaire William Ackman spent some four hours Friday defending his outsize bet on Valeant Pharmaceuticals International Inc., the rest of Wall Street dismissed his arguments and kept unloading shares of the besieged drug giant.
Fox News:
  • RNC boss vows debate changes as GOP candidates threaten to go around party. (video) Republican National Committee Chairman Reince Priebus is vowing to “reset” his party’s presidential debates in the wake of Wednesday’s controversial face-off -- but he still faces a possible revolt by frustrated candidates reportedly looking at taking power away from the party.
  • Chevron(CVX) slashes 2016 budget to weather low oil prices. Chevron Corp, the second-largest U.S.-based oil producer, slashed its 2016 capital budget by 25 percent and said it would lay off roughly 10 percent of its workforce, one of the most-drastic reactions to date to the plunge in crude prices CLc1. Chevron said on Friday it plans to spend between $25 billion to $28 billion next year and expects to further slash spending in 2017 and 2018 as well, an acknowledgment that oil prices are not expected to rise at all in the near future. The San Ramon, California-based company also said it would lay off 6,000 to 7,000 workers as part of the cuts.

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