June’s Expected Rate Hike Could Be the Last One for Now

Following the May Job report, Fed Fund Rates do not forecast another rate hike

 A 25 basis point rate hike on June 14 is still widely expected. However, the outlook for a third tightening this year has become unclear

 

https://stockwinners.com/blog/

The Federal Open Market Committee #FOMC , a committee within the Federal Reserve System, is charged under the United States law with overseeing the nation’s open market operations. FOMC has a 2-day meeting on June 13 and 14th, 2017.

A 25 basis point rate hike on June 14 is still widely expected. However, the outlook for a third tightening this year has become muddied.

Fed Policy Outlook

Despite the disappointing May employment report, and softening in inflation, the FOMC shouldn’t be derailed from increasing the funds rate band by another 25 bps this month, to put it at 1% to 1.25%.

Data show growth has improved measurably this quarter. Other than the jobs release, most other labor market indicators are reflecting a tight labor market.

Analysts are  projecting a jump to a 2.7% pace on Q2 GDP.

Additionally, the manufacturing and service sectors are still expanding.

Meanwhile, the deceleration in price pressures globally is troubling, but that is having an impact on Fed policy forecasts on Q3 and Q4.

Additionally, speculation over when the Committee will announce balance sheet normalization details is impacting, with Goldman Sachs having pushed back it’s forecast for the third 2017 hike to December from September on expectations for balance sheet details to be announced at the September 19, 20 meeting.

Analysts are still forecasting a September tightening, but if price pressures remain tepid, it may be the case the Fed delays rate action next quarter in favor of the balance sheet.

A look at the table below shows that odds of rate hike in September has been taken off the table:

http://stockwinners.com/blog
Fed Fund Rates Forecast as of June 7, 2017

There are a lot of events coming up in the next few days that may push the Financial stocks higher if FOMC modifies its language toward future policies. Note that there is an election in UK tomorrow and Comey testifies before the Congress tomorrow also.  A relief rally (short-covering) in the Financial Stocks (XLF) maybe in the cards.

To read stories similar to this, sign up for a free trial membership to Stockwinners; be sure to check the Market Radar section.

The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

 

May’s Job Report Disappoints!

U.S. nonfarm payrolls rose only 138k in May, disappointing estimates for a near 200k gain

The unemployment rate dropped to 4.3% versus 4.4% previously

 

stockwinners.com/blog/

U.S. nonfarm payrolls rose only 138k in May, disappointing estimates for a near 200k gain, following a downwardly revised 174k increase in April (was 211k) and a 79k gain in March.

The unemployment rate dropped to 4.3% versus 4.4% previously.

Average hourly earnings rose 0.2% as was the case in April (revised from 0.3%). The workweek was steady at 34.4.

For the internals, the labor force plunged 429k after April’s 12 rise, with household employment tumbling 233k from 156k.

Private payrolls were up 147k compared to the 253k jump in the ADP, while government subtracted 9k.

Jobs in the goods producing sector were up 16k, with construction increasing 11k and manufacturing falling 1k.

The service sector added 131k jobs, led by education/health with a 47k gain, while business services jobs were up 38k.

Declines were registered in trade/transport and information services.

The disappointing report will knock bond yields lower but shouldn’t seriously impact expectations for a Fed rate hike on June 14. The dollar is lower following the job report as some hope that FOMC may not raise interest rates at its next meeting.

Stocks to watch: MAN, RHIKELYATMH, ASGN, KFRC

Visit Stockwinners to read more.

The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Pinnacle Foods Could be Sold

Three years ago, Pinnacle Foods agreed to a takeover of $4.3 billion by Hillshire Brands. That deal was canceled after Hillshire agreed to sell itself to Tyson Foods.

 Hillshire was led at the time by Sean Connolly, who is now chief executive of Conagra. 

Reuters reports that ConAgra Brands (CAG) has approached Pinnacle Foods (PF) for a takeover.

Conagra’s approach to Pinnacle Foods took place in the last few weeks. There is no assurance that Pinnacle Foods will choose to walk down the alter, or that Conagra will pursue a potential deal further, the report said.

Pinnacle Foods operates through four segments: Frozen, Grocery, Boulder, and Specialty. The Frozen segment offers brands such as the Bird’s Eye,  Van de Kamp’s, Mrs. Paul’s, Lender’s, Celeste, Hungry-Man, and Aunt Jemima names. The Grocery segment brands include the Duncan Hines, Vlasic, Wish-Bone, and Mrs. Butterworth’s.

Conagra Brands, Inc. (CAG) operates as a food company in North America. It operates through five segments: Grocery & Snacks, Refrigerated & Frozen, International, Foodservice, and Commercial.  The company markets its products primarily under the Healthy Choice, Hunt’s, Slim Jim, Reddi-wip, Alexia, Blake’s, Frontera, Bertolli, P.F. Chang’s, and Marie Callender’s brands.

What Goes Around, Comes Around

Three years ago, Pinnacle Foods agreed to a takeover of $4.3 billion by Hillshire Brands. That deal was canceled after Hillshire agreed to sell itself to Tyson Foods Inc for $7.7 billion.  Hillshire was led at the time by Sean #Connolly, who is now chief executive of Conagra.

Connolly’s second attempt at an acquisition of Pinnacle Foods underscores the need for further consolidation in the frozen food and condiments sectors, as sales continue to decline with consumers opting for healthier choices.

Conagra has been seeking to reinvent itself since selling its private label unit for $2.7 billion in 2016 to focus on its branded food business. Last year it spun off its $6.9 billion frozen potato business, Lamb Weston Holdings Inc. This week it agreed to sell its Wesson oil brand to Folgers coffee maker J.M. Smucker for $285 million.

Conagra has a market cap of $17 billion while Pinnacle has a market cap of less than $8 billion.

Price Action

PF shares last traded at $62.31. It has a 52-week trading range of $42.09 – $66.50

CAG last traded at $39.78. CAG has a 52-week trading range of $33.08 – $41.68.

Visit Stockwinners to read more.

The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Praxair to merge with Linde

Linde and Praxair produce and distribute industrial gases

The combined company is expected to benefit from approximately $1.2B in annual synergies and cost reductions

 

 

Linde (LNEGY) has signed a legally binding business combination agreement with Praxair (PX) governing the terms and conditions of a merger of equals between the two companies.

The agreement provides for a combination of the businesses of the Linde group and the Praxair group under a publicly traded new holding company, which will bear the Linde name.

The new holding company will be incorporated in Ireland while its principal governance activities, including board meetings, will primarily be based in the United Kingdom.

Group corporate functions will be appropriately split between Danbury, Connecticut and Munich, Germany.

The company will apply for an admission for the trading of its shares on the New York Stock Exchange and on the Frankfurt Stock Exchange and will seek inclusion in the S&P 500 and the DAX 30 indices.

Praxair will become a subsidiary of “New Holdco” through a merger and Linde will become a subsidiary of New Holdco through a public exchange offer to all shareholders of Linde.

Linde shareholders will be offered 1.54 shares in New Holdco for each Linde share and Praxair shareholders will receive one share in New Holdco for each Praxair share.

Upon completion, former Praxair shareholders and former Linde shareholders will each own approximately 50% of the outstanding shares of New Holdco. The membership in the board of directors of New Holdco will also be split 50:50.

Linde’s current Chairman of the Supervisory Board, Wolfgang Reitzle, will become Chairman of the new holding company’s board. Praxair’s current Chairman and CEO, Steve Angel, will become CEO and a member of the board of #NewHoldco.

The management team of New Holdco will also be appropriately split between #Linde and #Praxair executives.

The combined company is expected to benefit from approximately $1.2B in annual synergies and cost reductions, targeted to be achieved in approximately three years following closing. The figures include existing cost reduction programs already initiated by the two companies, including an amount of approximately $310 million from Linde’s existing LIFT program.

“Linde understands that the combined company intends to achieve the total amount of synergy and efficiency savings irrespective of the allocation to the respective underlying drivers,” the company noted.

The expected one-time costs of achieving these cost reductions and synergies are estimated to be approximately $1B including transaction costs. The consummation of the business combination is subject to certain conditions, including the acceptance of the exchange offer to Linde shareholders by a minimum of 75% of the outstanding Linde shares. Closing of the transaction is expected to occur in the second half of 2018.

Visit Stockwinners to read more.

The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Dakota Access Pipeline Begins Carrying Oil

The “Bakken Pipeline” begins carrying oil

The Bakken Pipeline is a 1,872-mile, mostly 30-inch pipeline system that transports domestically produced crude oil from the Bakken/Three Forks productions areas in North Dakota to a storage and terminalling hub outside Patoka, Illinois, and/or down to additional terminals in Nederland, Texas.

 

dakota-access
Bakken Pipeline is a 1872 mile, 30-inch diameter line

Energy Transfer Partners (ETP) announced that the #DakotaAccess Pipeline and the Energy Transfer Crude Oil Pipeline, collectively the “Bakken Pipeline,” are in commercial service under the Committed Transportation Service Agreements through their respective pipeline systems.

The #Bakken Pipeline, owned by Dakota Access, LLC and Energy Transfer Crude Oil Company LLC, respectively, is a 1,872-mile, mostly 30-inch pipeline system that transports domestically produced crude oil from the Bakken/Three Forks productions areas in North Dakota to a storage and terminalling hub outside Patoka, Illinois, and/or down to additional terminals in Nederland, Texas.

The Bakken Pipeline is a joint venture between Energy Transfer Partners with a 38.25 percent interest, MarEn Bakken Company LLC with a 36.75 percent interest, and Phillips 66 (PSX) with a 25 percent interest.

MarEn is an entity owned by MPLX LP (MPLX) and Enbridge Energy Partners L.P. (EEP).

Dakota Access and ETCO, developed at a combined cost of approximately $4.78 billion have commitments, including shipper flexibility and walk-up, for approximately 520,000 barrels per day. This is up from 470,000 barrels per day due to the successful Supplemental Open Season held earlier this year that committed an additional 50,000 barrels per day.

The combined system is expandable to a capacity of approximately 570,000 barrels per day. The pipeline will transport light, sweet crude oil from North Dakota to major refining markets in a more direct, cost-effective, safer and more environmentally responsible manner than other modes of transportation, including rail or truck.

Energy Transfer Partners approved and announced the pipeline project on June 25, 2014. In October 2014, Phillips 66 acquired 25% stake in the project. Since then, the project has been controversial. The firm had to fight several lawsuits to secure right-of-way for the project. The company was sued by Indian tribes, Iowa farmers, and environmental groups. The U.S. Army Corp of Engineers ( #USACE ) got involved and the entire project became a political issue. On November 1, 2016, President #Obama announced his administration was monitoring the situation and had been in contact with the USACE to examine the possibility of rerouting the pipeline to avoid lands that Native Americans hold sacred.

On January 24, 2017, President Donald #Trump, in contrast to the Obama administration, signed a presidential memorandum to advance the construction of the pipeline under “terms and conditions to be negotiated.”

Energy Transfer Partners began loading the pipeline with crude oil by April 2017. A small, 84-gallon spill of crude oil occurred at a South Dakota pumping station on the route on April 6, 2017. With full operation, East Coast refineries reduced their orders for rail-delivered oil in May and June.

Crude oil last traded at $50.68 per barrel.

Visit Stockwinners to read more.

The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Avoid Bank Stocks, JP Morgan Chart Signals Sell

Bank stocks rose on prospects of tax-cuts but Trump’s problems have sidelined his agenda

Yield Curve is now Flattest since the Election rally began

 

jpm-20170531
Head and Shoulders pattern on JP Morgan (JPM)

JP Morgan (JPM), the DJIA component, shares rose along with the rest of the market  following last year’s election on expectation of tax cuts and other pro-growth measures. But Trump has been embroiled in troubles, distracting him from his legislative agenda. Republicans are divided on key issues, including how much to cut and how to offset the lost revenue, if at all. Easing of bank regulations and oversight imposed by the Frank-Dodd Law appear to have taken backseat to the Russian and Comey investigations.

On a 1-year daily chart of  JPM stock chart there is a clear active bearish head and shoulders pattern that became active when price broke below the neckline at the $82 area.

Rising Rates

Economic growth spurs demand for loans, but it also encourages higher interest rates and wider spreads between banks’ short-term funding costs and long-term lending rates. Yield spreads widened after the election. But with the Federal Reserve raising short-term interest rates and the 10-year Treasury yield sliding toward 2017 lows, the yield curve is the flattest since the 2016 election. That’s bad news for banks’ net margins and not a comforting sign for the economy as a whole. It is widely expected that the FOMC will raise its key lending rate by 25 bp on June 9th.

Sector Troubles

JP Morgan is considered as one of the best operated large banks. If you add impact of other not-so-well-managed banks to the sector, you will realize that the Financial Select Sector ETF ( $XLF ) is heading lower.

This morning New York City Mayor Bill de Blasio and Comptroller Scott M. Stringer jointly announced that they will vote to prohibit New York City from entering into new contracts for deposits with Wells Fargo ( $WFC ). The beleaguered bank has lost many executives and customer over its various marketing schemes.  Shares of WFC are now in a well defined bearish downward pattern. Shares are trading well below their 200-day moving average #MA .

Bank of America ( $BAC ) announced that it expects to complete the sale of its consumer credit card business in the United Kingdom, #MBNA Ltd., to #Lloyds Banking Group (LYG). The sale is expected to improve #Basel 3 risk-based capital ratios by approximately 11 basis points under the Advanced approaches and 15 basis points under the Standardized approach in the second quarter ending June 30, 2017. The U.K. consumer credit card portfolio had approximately $9.4B in credit card receivables and earned $211M in interest income in the first quarter of 2017. This type of news should send BAC shares higher but BAC is down 2.7% and has broken below its support level of $23.

To read stories similar to this, sign up for a free trial membership to Stockwinners; be sure to check the Market Radar section.

The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

 

Alnylam’s Givosiran receives FDA’s Breakthrough Therapy

Porphyria is a group of diseases in which substances called porphyrins build up, affecting the skin or nervous system

Givosiran was found to be generally well tolerated with no drug-related serious adverse events

ALNY-LOGO

Alnylam Pharmaceuticals $ALNY announced that it has received Breakthrough Therapy designation from the U.S. Food and Drug Administration for #givosiran, an investigational RNAi therapeutic targeting aminolevulinic acid synthase 1 for the prophylaxis of attacks in patients with acute hepatic porphyria.

“Promising results from the ongoing Phase 1 study of #givosiran demonstrating meaningful reductions in the occurrence of porphyria attacks formed the basis of the Breakthrough application,” the company says Updated results from this trial will be provided in an oral presentation on June 26 at the International Congress on Porphyrins and Porphyrias being held in Bordeaux, France.

The ongoing portion of the Phase 1 study of givosira is being conducted as a randomized, double-blind, placebo-controlled study.

Data presented at the 2016 American Society of Hematology meeting held in Atlanta demonstrated initial evidence for clinical activity with givosiran including meaningful reductions in both the number and frequency of porphyria attacks, as well as meaningful reductions in annualized hemin doses required in patients with acute intermittent porphyria, the most common and severe form of AHP.

In the first two dose cohorts, givosiran was found to be generally well tolerated with no drug-related serious adverse events. In the third dose cohort, which remains blinded, one death due to acute pancreatitis, considered unlikely related to givosiran or placebo, was reported after the data transfer date.

Porphyria is a group of diseases in which substances called porphyrins build up, affecting the skin or nervous system. The types that affect the nervous system are also known as acute #porphyria. Symptoms of acute porphyria include abdominal pain, chest pain, vomiting, confusion, constipation, fever, and seizures. These symptoms typically come and go with attacks that last for days to weeks. Attacks may be triggered by alcohol, smoking, stress, or certain medications. If the skin is affected, blisters or itching may occur with sunlight exposure.

The disease is usually inherited from a person’s parents and is due to a mutation in one of the genes that make heme. Some types are autosomal dominant and others are autosomal recessive. One type, porphyria cutanea tarda, may also be due to increased iron in the liver, hepatitis C, alcohol, or HIV/AIDS. The underlying mechanism results in a decrease in the amount of heme produced and a build-up of substances involved in making heme. Porphyrias may also be classified by whether the liver or the bone marrow is affected.  About 1 in 75,000 people have acute porphyria attacks. They may either have one of the acute porphyrias or they may have a mixed porphyria.

Separately,  the company announced that management will present a company overview at the #Jefferies 2017 Healthcare Conference on Tuesday, June 6, 2017 at 9:00 am ET in New York City.

PRICE ACTION:  ALNY closed at $64.09. The stock has a 52-week trading range of $31.38 – $80.11. Other stocks to watch: ICPT, AZN, INCY, BIIB.

To read stories similar to this, sign up for a free trial membership to Stockwinners; be sure to check the Market Radar section.

The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Deutsche Bank Fined $41 million by the Feds

The Federal Reserve Board announced a $41 million penalty against Deutsche Bank AG for anti-money laundering deficiencies

Deutsche Bank CEO encourages Europeans not to follow U.S. Mortgage Regulations

DB-LOGO

The Federal Reserve Board announced a $41M penalty and consent cease and desist order against the U.S. operations of #DeutscheBank $DB for anti-money laundering deficiencies. “The actions were taken by the Board to address unsafe and unsound practices at the firm’s domestic banking operations.

The Board identified failures by Deutsche Bank’s U.S. banking operations to maintain an effective program to comply with the Bank Secrecy Act and anti-money laundering laws,” the Federal Reserve said.

The consent order requires Deutsche Bank to improve its senior management oversight and controls related to compliance by the U.S. banking operations with anti-money #laundering laws.

Meanwhile, Deutsche Bank CEO John #Cryan pressured regulators in Europe to dismiss the same kind of rules for lenders’ mortgage holdings that have been adopted by their U.S.-based counterparts, Bloomberg reports, citing comments from Cryan at an investor conference in New York.

“By and large, Germans pay their debts” and aren’t close to as a risky as U.S. banks and home-buyers have been in the past, Cryan said, according to Bloomberg.

“For Europe to surrender, to accept U.S. mortgage capitalization rules, I think would be inappropriate,” the Deutsche Bank CEO said. “So to price them as though they were Californian subprime mortgages from 10 years ago is not appropriate.”

To read stories similar to this, sign up for a free trial membership to Stockwinners; be sure to check the Market Radar section.

The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Blackstone to sell Logicor to China Investment

China Investment Corporation (CIC) is in advanced negotiations to acquire Blackstone’s European logistics platform for over $13.4 billion.

Blackstone originally considered steering Logicor to an IPO, Deal could be announced this week

If completed, the transaction would mark Europe’s largest-ever real estate deal. 

 

bx

 

China Investment Corporation (CIC) is in advanced negotiations to acquire Blackstone’s European logistics platform for over $13.4 billion.

China’s sovereign wealth fund has reportedly moved ahead of rivals in the pursuit of the Logicor warehouse portfolio, after formal bids having been submitted by last Thursday.

CIC is now said to be scheduled to sign a deal for Blackstone’s (BX) giant’s 630 European distribution centers within the next two to three days. If completed, the transaction would mark Europe’s largest-ever real estate deal.

In March, Blackstone began shopping Logicor to institutional investors including CIC, #Singaporean warehouse group Global Logistics Properties (GLP), and a joint venture between Singapore’s #Mapletree Investments and #Temasek Holdings. The sale of the 146.4 million square foot warehouse platform would mark the biggest logistics property deal in history.

CIC is said to benefit from its close relationship with #Blackstone.  In January 2014, CIC purchased London’s Chiswick Park office complex from Blackstone for over $1.28  billion.

Blackstone originally considered steering Logicor to an IPO, but is reported to have shelved that option in favor of a trade sale, aggressively driving the bidding process forward over the past few weeks. A trade sale would potentially achieve a higher price while allowing Blackstone to dispose of the business in a faster and more efficient manner than an #IPO.

Logicor was founded by Blackstone’s real estate business in 2012 and has rapidly grown into one of Europe’s largest warehousing specialists, with modern logistics facilities in 17 countries across the continent. Investors continue to pile into the logistics real estate sector amidst a boom in online retail, soaring prices and relatively high yields compared to other property asset classes.

To read stories similar to this, sign up for a free trial membership to Stockwinners; be sure to check the Market Radar section.

The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Slow Sales Force Signet to sell its Credit Card Portfolio

Continued headwinds in the overall retail environment were exacerbated by a slowdown in jewelry spending

Signet will sell $1B of its prime-only credit quality accounts receivable to Alliance Data Systems 

 

signet

 

Mark Light, CEO of #Signet Jewelers $SIG, said, “As anticipated, we had a very slow start to the year as continued headwinds in the overall retail environment were exacerbated by a slowdown in jewelry spending and company specific challenges. He added that we also made important changes to our organizational structure and strengthened our team to drive our 2020 Strategic Vision and deliver operational efficiencies.

He added “We believe today’s announcement regarding the first phase of the strategic outsourcing of our credit portfolio will unlock significant value as it drives EPS accretion and increases our capital efficiency, while enabling us to maintain the full spectrum of our competitive retail credit offering and net sales. Additionally, we will continue to pursue a fully-outsourced model that removes the remaining credit risk from our balance sheet through capital providers.”

The first phase, which is designed to substantially maintain the full spectrum of Signet’s retail financing options and net sales, is expected to be fully implemented by October 2017: Signet will sell $1B of its prime-only credit quality accounts receivable to #Alliance Data Systems Corporation $ADS at par value.

Additionally, under a seven-year agreement, Alliance Data will become the primary provider of credit funding, servicing and associated program functions to Signet’s Kay, Jared and Regional brands’ customers. Signet will retain the existing non-prime accounts receivable on its balance sheet and continue to originate new accounts, while outsourcing the credit servicing functions of those accounts to #Genesis Financial Solutions with an initial term of five years.

Signet will form a seven-year partnership with #Progressive Leasing, a subsidiary of #Aaron’s, Inc. (AAN), to provide a lease-purchase payment program to Signet customers who do not qualify for Signet’s credit programs, or do not wish to pursue a credit option to access Signet’s merchandise.

Following the successful implementation of the first phase, which is expected to occur by October 2017, Signet will have completed the sale of approximately 55% of its credit portfolio to Alliance Data, and established long-term third party relationships to service its full credit programs. As part of the second phase, Signet intends to fully outsource its secondary credit programs, including the sale of the remaining receivables on its balance sheet, as well as funding for new non-prime account originations.

In Thursday’s trading, SIG is lower while ADS and AAN are marginally higher.

Visit Stockwinners to read more.

The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Moody’s Downgrades Hong Kong

The announcement follows Moody’s downgrade of China’s rating to A1 from Aa3

The economic and financial linkages between Hong Kong and China are close and broad-based

hongkong

#Moody’s Investors Service has downgraded Hong Kong’s local currency and foreign currency issuer ratings to Aa2 from Aa1 and changed the outlook to stable from negative.

The announcement follows Moody’s downgrade of China’s rating to A1 from Aa3 and change in the outlook to stable from negative.

The downgrade in Hong Kong’s rating reflects Moody’s view that credit trends in China will continue to have a significant impact on Hong Kong’s credit profile due to close and tightening economic, financial and political linkages with the mainland.

Hong Kong’s local currency senior unsecured debt ratings are downgraded to Aa2 from Aa1.

The economic and financial linkages between Hong Kong and China are close and broad-based. Combined with political linkages, this means that any erosion in China’s credit profile, such as that reflected in the 24 May downgrade of China’s rating to A1 with a stable outlook, will ultimately affect Hong Kong’s credit profile and will be reflected in the Special Administrative Region’s rating.

Visit Stockwinners to read more.

The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Moodys Downgrades China

The downgrade reflects Moody’s expectation that China’s financial strength will erode somewhat over the coming years

The strengths of its credit profile will allow the sovereign to remain resilient to negative shocks, with GDP growth likely to stay strong

#Moody’s Investors Service has #downgraded China’s long-term local currency and foreign currency issuer ratings to A1 from Aa3 and changed the outlook to stable from negative.

Moody’s says, “The downgrade reflects Moody’s expectation that China’s financial strength will erode somewhat over the coming years, with economy-wide debt continuing to rise as potential growth slows. While ongoing progress on reforms is likely to transform the economy and financial system over time, it is not likely to prevent a further material rise in economy-wide debt, and the consequent increase in contingent liabilities for the government.

The stable outlook reflects our assessment that, at the A1 rating level, risks are balanced. The erosion in China’s credit profile will be gradual and, we expect, eventually contained as reforms deepen.

The strengths of its credit profile will allow the sovereign to remain resilient to negative shocks, with GDP growth likely to stay strong compared to other sovereigns, still considerable scope for policy to adapt to support the economy, and a largely closed capital account.”

China’s local currency and foreign currency senior unsecured debt ratings are downgraded to A1 from Aa3.

FDA Approves Puma’s Breast Cancer Drug, Shares Jump

The #FDA said in briefing documents ahead of Wednesday’s advisory panel on #Puma Biotechnology’s breast cancer drug, “In conclusion, the totality of evidence demonstrating the magnitude of activity of neratinib to treat HER2 positive breast cancer across multiple clinical settings, plus the strong neoadjuvant data, provides robust scientific and clinical rationale for proceeding into the adjuvant setting with neratinib.

An unmet medical need exists during the ‘extended adjuvant period’ or the time after standard of care adjuvant therapy with other anti-HER2 therapy has been completed. Patients who have completed their 1 year of trastuzumab adjuvant therapy have no options for further anti-HER2 treatment and enter into a “watch and wait” period. In the interest of being able to turn this time into a period of active anti-HER2 therapy with the intent to provide further improvement in iDFS, neratinib was studied as extended adjuvant therapy in a multicenter randomized, double blind placebo controlled Phase 3 Study 3004 (N=2840) which demonstrated clinically meaningful and statistically significant improvement in iDFS with a manageable safety profile consistent with other approved agents within the class of TKIs targeting EGFR and HER2.

The sponsor believes the totality of the data support approval of #neratinib 240 mg po qd for 1 year in the extended adjuvant setting in order to provide physicians and patients with a new strategic therapeutic option to reduce the rate of recurrence of HER2 positive breast cancer.”

See our earlier blog regarding this stock.

To learn more, please visit Stockwinners Market Radar.

The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Blackstone to Launch $40 Billion Investment Fund with Saudi Arabia

#Blackstone $BX to launch $40B infrastructure vehicle, new infrastructure business – Blackstone and the Public Investment Fund of Saudi Arabia announced the execution of a memorandum of understanding in relation to the launch of a new investment vehicle dedicated to infrastructure with an anchor $20B contribution by PIF. Blackstone anticipates that the program will have $40B in total equity commitments in a permanent capital vehicle, including $20B to be raised from other investors.

“The MOU is non-binding and the parties will continue their negotiation to agree definitive documentation… This collaboration between PIF and Blackstone is the culmination of a year’s discussions between the two institutions, which began in May 2016…

Blackstone’s new program will help the United States address its significant need for infrastructure improvement,” Blackstone noted. Overall, through the equity in this vehicle and additional debt financing, Blackstone expects to invest in more than $100B of infrastructure projects, principally in the United States, the company said.

Visit Stockwinners to read more.

The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Nutraceutical Sold for $41.80 per share

NUTR sold for $446M#Nutraceutical $NUTR and HGGC, a leading middle-market private equity firm, announced that they have entered into a definitive agreement under which Nutraceutical will be acquired by an affiliate of HGGC in a transaction valued at approximately $446M, including debt to be refinanced.
Under the terms of the agreement, Nutraceutical stockholders will receive $41.80 in cash (without interest) for each outstanding share of Nutraceutical common stock they own, which represents a 49% premium to the company’s closing stock price on May 19, the last full trading day before today’s announcement, and a 15.6% premium to the company’s all-time high closing stock price.
The agreement has been unanimously approved by Nutraceutical’s board of directors, acting on the recommendation of a special committee of independent and disinterested directors. The special committee negotiated the terms of the agreement with the assistance of its financial and legal advisors.
The Company will undertake a 60-day “go-shop” period, commencing immediately, during which the special committee, with the assistance of its financial and legal advisors, will actively solicit, evaluate and potentially enter into negotiations with parties who offer alternative proposals.
 The transaction, which is expected to close in the second half of 2017, is subject to customary closing conditions, including Company stockholder approval and the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
There are no financing conditions associated with the transaction. Bill Gay and Jeff Hinrichs, COO and Executive Vice President of the company, who own approximately 7.9% and 2.5% of the company’s outstanding common stock, respectively, have entered into customary voting agreements pursuant to which they have agreed to vote all of their shares in favor of the transaction.

Visit Stockwinners to read more.

The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.