These stocks are typically the best bets when the Fed jolts the economy with three rate cuts - CNBC

A trader laughs ahead of the closing bell on the floor of the New York Stock Exchange (NYSE) on February 1, 2019 in New York City.

Johannes Eisele | AFP | Getty Images

The stage appears to be set for stocks to shine after the Federal Reserve's third rate cut and its signal to stop from now. And certain groups of stocks stand to benefit the most, if history is any guide.

The Fed slashed interest rates for the third straight time this year on Wednesday while indicating it is going to pause easing. Powell made it clear in the press conference that the current monetary policy stance is "likely to remain appropriate."

The three-and-done approach was used on two occasions in history — between 1995 and 1996 and in 1998. The Alan Greenspan-led Fed slashed rates by a total of 75 basis points, during both periods to combat an economic downturn and successfully prolong the expansion.

The Fed's insurance easing episodes in the 1990s managed to drive the S&P 500 22% higher on average a year after the third cut, CNBC analysis found. The move was particularly beneficial for cyclical stocks including tech, energy and industrials as investors bet on economically sensitive pockets of the market after Fed rate cuts.

CNBC, using hedge fund analytics tool Kensho, found that information technology stood out as the best-performing sector after the central bank cut rates three times and paused, surging a whopping 66% a year after the third cut on average. Energy and industrial stocks both jumped about 24% on average during the same period.

It's not surprising that cyclical stocks have historically enjoyed the biggest boost from Fed's rate cuts. As monetary easing is designed to jolt the economy, investors tend to gravitate towards stocks traditionally correlated to economic growth.

To be sure, the tech sector's stunning pop in the 1990s happened when there was a rapid rise in U.S. tech stock valuations at the height of the dotcom bubble. So the Fed put should have less of an impact on the group this time.

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2019-10-31 11:41:22Z
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Fiat Chrysler and Peugeot owner announce $48 billion merger - CNN

Shareholders of each automaker would own 50% of the combined operation, the companies said in a joint statement on Thursday. A binding agreement could be finalized within weeks, the statement said.

The combined company would be based in the Netherlands, which is the current headquarters of Fiat Chrysler. John Elkann, the US-born scion of the Italian family that founded Fiat, would be chairman of the combined company, while PSA chief executive Carlos Tavares would be CEO.

The company would have roughly 410,000 employees and rank among the largest automakers in the world. Fiat Chrysler (FCAU) and PSA (PUGOY) sold a combined 8.7 million vehicles last year, just ahead of General Motors (GM), which sold 8.3 million, and not far behind Volkswagen (VLKAF) and Toyota (TM), which each sold over 10 million.

The merger comes amid a global auto sales slowdown. At the same time, carmakers are scrambling to invest in the electric and hybrid technologies needed to meet strict new emissions targets in China and Europe. The autonomous vehicles of the future also present a threat to traditional industry business models. The huge amount of capital needed to meet these new challenges has forced some automakers to find partners and turned others into acquisition targets.

Jessica Caldwell, Edmunds' executive director of industry analysis, said the planned merger of Fiat Chrysler and France's PSA "isn't really about product or expanding to new markets." Instead, it's about funding research into the vehicles of the future.

"The electrified, autonomous future everyone is waiting for just isn't feasible without automakers merging and forming strategic alliances to share research and development costs," she said. "This is a smart move by both Fiat Chrysler and PSA to ensure their companies continue to be viable and relevant as the industry evolves."

The carmaker with the most urgent need to combine in this case was PSA, which has fallen behind on developing clean cars. Electric vehicles account for less than 0.3% of its overall sales, and it had to pay Tesla (TSLA) for credits needed to comply with EU emissions standards. Fiat Chrysler has also trailed larger rivals in developing electric vehicles.

Even the biggest players in the industry are making changes. Volkswagen and Ford (F) are working together to develop electric and self-driving vehicles, while German carmakers BMW (BMWYY) and Daimler (DDAIF) have formed a joint venture that will develop driverless technology. Honda has invested in General Motors' self-driving car unit.

A history of mergers

It's not the first time that PSA has used a merger to bulk up. In 2017 it paid $2.3 billion to buy GM's European business, adding the Opel and Vauxhall brands as GM exited the continent. While GM lost about $22.4 billion in Europe over the 17 years before that deal, Opel and Vauxhall are now profitable for PSA.

Teaming up during times of adversity is also a familiar strategy for Fiat, which started the purchase of US rival Chrysler out of bankruptcy a decade ago. It completed the merger five years later. But even following that deal, Fiat Chrysler was still significantly smaller than many of its rivals, putting it at a disadvantage in purchasing muscle as well as spreading out the cost of research and development.

Sergio Marchionne, the late CEO who brought Fiat and Chrysler together, spoke publicly about his desire for a deal with GM. He also expressed interest in a combination with a tech company such as Google or Apple.

Earlier this year, Fiat Chrysler made a merger proposal to another French automaker, Renault, a company of comparable size to PSA. But it withdrew the offer, saying that "it has become clear that the political conditions in France do not currently exist for such a combination to proceed successfully."

The French government owns 15% of Renault and is its largest shareholder; it also owns 12.2% of PSA. France has said it would approve the Renault deal only if there were protections for French jobs and factories.

New challenges

Fiat Chrysler and PSA will face huge challenges even if their merger is completed.

Both have struggled to break into China, the world's largest market for new cars. Automakers have sold 10% fewer cars there so far in 2019, but the joint ventures of Fiat Chrysler and PSA have been hit especially hard. Sales dropped by a third for Fiat Chrysler in the first half of the year, and more than 50% for PSA.

PSA also has no presence in the United States, the world's second largest car market. Miniscule US sales of Fiat branded cars show the difficulty in bringing mass market European brands, as opposed to luxury brands, to US showrooms.

"Both Fiat Chrysler and PSA have a lot of quirky city cars that couldn't be further from what US car shoppers want right now," said Caldwell.

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2019-10-31 11:22:12Z
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Fiat Chrysler and Peugeot owner agree to merge in mega auto deal - CNN

Shareholders of each automaker would own 50% of the combined operation, the companies said in a joint statement on Thursday. A binding agreement could be finalized within weeks, the statement said.

The combined company would be based in the Netherlands, which is the current headquarters of Fiat Chrysler. John Elkann, the current chairman of Fiat Chrysler (FCAU), would perform the same role at the combined company, while PSA Group chief executive Carlos Tavares would be CEO.

The company would rank among the largest automakers in the world. Fiat Chrysler and PSA (PUGOY) sold a combined 8.7 million vehicles last year, just ahead of GM (GM), which sold 8.3 million, and not far behind Volkswagen (VLKAF) and Toyota (TM), which each sold over 10 million.

The merger comes amid a global sales slowdown. At the same time, carmakers are scrambling to invest in the electric and hybrid technologies needed to meet strict new emissions targets in China and Europe. The autonomous vehicles of the future also present a threat to traditional industry business models.

The huge amount of capital needed to meet these new challenges has forced some automakers to find partners and turned others into acquisition targets.

"We view the combination of these two companies as reasonable given global competition, high capital intensity, and industry disruption from electrified powertrain as well as autonomous technologies," Richard Hilgert, a senior equity analyst at Morningstar, said in a research note on Wednesday.

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2019-10-31 08:34:41Z
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Ford and UAW reach quick deal to avoid a strike - CNN

Less than a week after members of the United Auto Workers union returned to work at GM (GM), negotiators for the UAW and Ford (F) announced late Wednesday they had reached a tentative agreement.

While there had been some preliminary talks between the union and Ford before and even during the GM strike, Ford negotiations only moved to the front burner for the union on Monday.

The deal still needs to be ratified by the 55,000 union members at Ford before it can go into effect. Neither the union nor company would disclose any details of the agreement.

But the quick settlement was a striking contrast with the contentious talks at GM. Nearly 50,000 GM workers were on strike from Sept. 16 until members there ratified a new deal and started returning to work this past Saturday. GM disclosed this week that it expects the strike cost it $2.9 billion.

The auto industry is facing a slowdown in sales and the risk of further declines if the US economy continues to slow. It is also facing the need to spend billions to develop the next generation of vehicles, electric and self-driving cars that may not be profitable for years.

Ford has said it plans to spend $11 billion in the coming few years to restructure its business globally to free up funds to develop electric and autonomous vehicles. But while it is profitable, it recently lowered its profit forecast for the rest of this year. And the cost of its restructuring plans was a major factor in having its credit rating recently reduced to junk bond status.

"It appears both parties took a sane approach, and avoided a painful strike that would have benefited neither of them," said Patrick Anderson, CEO of Anderson Economic Group, a Michigan research firm that follows the auto industry.

A successful ratification vote is by no means assured. Four years ago only 51% of the union members at Ford voted in favor of a deal that included their first pay raises in more than a decade.

But it always seemed unlikely that the Ford workers would follow GM workers out on strike. There has not been a work stoppage at Ford since 1976.

And the biggest point of contention at GM -- the automaker's decision to close three US plants where work was halted earlier this year -- was not present at Ford, where no US plant closings are planned.

The union had vowed to make GM shift work back from Mexico to try to revive the plants. While GM agreed to build an electric truck planned at a date yet to be determined at a fourth plant slated for closure, it would not shift work back from Mexico to save any of the other three plants.

The workers at Ford will likely get many of the same terms as found in the GM contract. Once the union reaches a deal with one US automaker, it strives to get the other two unionized companies to follow that pattern.

Under the deal at GM, hourly workers get an $11,000 signing bonus, a 6% raise over the four-year life of the contract, an agreement to allow many temporary workers to be hired on a permanent basis, and the health care coverage left essentially unchanged despite the company's desire to have workers assume a much greater share of the cost.

If Ford workers agree to a new contract that includes those provisions, they will benefit from not losing six weeks of pay in order to receive those gains.

Once the Ford ratification vote is complete, likely in the next couple of weeks, the union will turn to the third unionized US automaker, Fiat Chrysler (FCAU). Contract talks there could be complicated by the potential announcement of a merger with French automaker PSA, the owner of Peugeot.

-- CNN Business' Vanessa Yurkevich contributed to this story

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2019-10-31 05:10:13Z
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Fiat Chrysler and Peugeot confirm deal to create the world's fourth-largest carmaker - CNBC

A Jeep Renegade 4x4 e is presented at the Geneva Motor Show March 5, 2019. Signage in the background says"'FCA Fiat Chrysler Automobiles," to which Jeep belongs.

Uli Deck | picture alliance | Getty Images

Peugeot (PSA) and Fiat Chrysler (FCA) confirmed their intention to merge on Thursday, in what would be a 50-50 share swap and create the world's fourth-largest carmaker.

The new company's shares will be listed in New York, Paris and Milan with FCA's John Elkann becoming the chairman and Peugeot's Carlos Tavares becoming the CEO. The proposed tie-up would reportedly create an industry behemoth with 8.7 million vehicle sales, $190 billion in turnover and a combined 400,000 employees.

"Discussions have opened a path to the creation of a new group with global scale and resources owned 50% by Groupe PSA shareholders and 50% by FCA shareholders," they said in a joint statement on Thursday morning.

"In a rapidly changing environment, with new challenges in connected, electrified, shared and autonomous mobility, the combined entity would leverage its strong global R&D (research and development) footprint and ecosystem to foster innovation and meet these challenges with speed and capital efficiency."

Early reports of the merger talks — which would create a new group worth roughly $50 billion — have moved share prices for both automakers this week. Italy's Fiat Chrysler saw its stock surge as much as 8% on Tuesday and added another 5% on Wednesday. Peugeot shares actually fell 8.8% as markets opened in Europe on Thursday.

Executives at the firms have briefed regulators in the U.S. and France, the Wall Street Journal reported, citing unnamed sources. The confirmation of the deal comes about five months after Fiat Chrysler ended merger discussions with PSA's French rival, Renault. However, this new merger is unlikely to face the same interference from the French government with some positive comments already emanating from Paris.

French Finance Minister Bruno Le Maire said in a statement that he welcomed the deal but said France would be particularly vigilant on the preservation of its industrial footprint in the country and the location of its head offices.

"This merger is a response to the automotive sector's need to consolidate in order to face the challenges of mobility in the future," he said in a statement Thursday, according to a CNBC translation.

"France should be proud of its car industry which has demonstrated its capacity for research and technological innovation, particularly in the fields of electric and hybrid (vehicles)."

The new boards are now expected to finalize discussions over the coming weeks and draw up and a memorandum of understanding.

—CNBC's Michael Wayland and Phil LeBeau contributed to this article.

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2019-10-31 07:43:07Z
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Stocks making the biggest moves premarket: GE, Yum, Molson Coors, Garmin, Amgen & more - CNBC

Check out the companies making headlines before the bell:

General Electric – General Electric reported quarterly profit of 15 cents per share, 4 cents a share above estimates. Revenue also exceeded forecasts and GE raised its full-year cash flow forecast.

Yum Brands – Yum earned an adjusted 80 cents per share for its latest quarter, 14 cents a share shy of consensus forecasts. Revenue also came in below estimates, hurt by a weaker-than-expected performance at its Pizza Hut and KFC units.

Anixter International – The software company agreed to be acquired by private-equity firm Clayton, Dubilier & Rice for $81 per share in cash. The total value of the deal is $3.8 billion including assumed debt, with the transaction expected to close by the end of 2020's first quarter.

Molson Coors – The beer brewer fell a penny a share short of estimates, with quarterly profit of $1.48 per share. Revenue also came in short of forecasts and Molson Coors announced a restructuring that will slash up to 500 jobs.

Garmin – The GPS and fitness device maker earned $1.19 per share for its latest quarter, well above the 95 cents a share consensus estimate. Revenue also topped forecasts. Garmin saw better-than-expected results in all its units, as well as higher-than-expected profit margins.

Tupperware – Tupperware earned an adjusted 43 cents per share, well short of the 62 cents a share consensus estimate. The housewares maker's revenue also came in short of forecasts. The company said it was experiencing challenging trends in markets like the U.S., China, Canada, and Brazil. Tupperware also cut its full-year earnings outlook.

Johnson & Johnson – J&J said its testing found no asbestos in its Johnson's Baby Powder. That testing included a single bottle that the Food and Drug Administration had said contained trace amounts of asbestos, prompting J&J to recall a lot of 33,000 bottles earlier this month.

Fiat Chrysler – Fiat Chrysler said it was in talks about a possible merger with Peugeot maker PSA that could create a combined company worth about $50 billion. Fiat Chrysler had abandoned talks earlier this year to merge with France's Renault.

Amgen – Amgen reported quarterly profit of $3.66 per share, 13 cents a share above estimates. The biotech company's revenue also beat forecasts and Amgen raised its full-year guidance amid strong sales of its biosimilar drugs.

Electronic Arts – Electronic Arts reported quarterly profit of 96 cents per share, 10 cents a share above estimates. The video game maker's revenue also topped estimates. Electronic Arts saw stronger digital sales, including game downloads and in-game purchases.

Mattel – Mattel came in 10 cents a share above estimates, with quarterly profit of 26 cents per share. The toy maker's revenue was slightly above Wall Street forecasts. Mattel also said it is restating some past earnings following an internal investigation into accounting issues, and the company's chief financial officer is resigning.

Mondelez International – Mondelez reported quarterly profit of 64 cents per share, 4 cents a share above estimates. Revenue was slightly above forecasts. The snack maker raised its full-year outlook, as sales volume increases across its major markets.

FireEye – FireEye raised its annual revenue guidance, after doubling estimates by reporting quarterly profit of 2 cents per share. The cybersecurity company's revenue also beat forecasts as it sold more cloud subscriptions.

Advanced Micro Devices – AMD reported adjusted earnings of 18 cents per share, in line with Street forecasts. Revenue was very slightly below estimates, although the chipmaker reported better-than-expected results for its data center business.

Yum China – Yum China beat analyst estimates by 3 cents A share, with quarterly profit of 58 cents per share. The restaurant operator's revenue was below forecasts, however, as were comparable-restaurant sales at KFC, Pizza Hut, and Taco Bell.

Sony – Sony reported its best-ever second-quarter profit, driven by strong sales of its image sensors. Sales helped offset a drop in earnings from Sony's gaming division.

Edison International – Edison's Southern California Edison unit said its equipment will likely be found to have been associated with a 2018 California wildfire that damaged more than 1,000 homes in Los Angeles and Ventura counties.

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2019-10-30 11:43:17Z
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Stocks making the biggest moves premarket: GE, Yum, Molson Coors, Garmin, Amgen & more - CNBC

Check out the companies making headlines before the bell:

General Electric – General Electric reported quarterly profit of 15 cents per share, 4 cents a share above estimates. Revenue also exceeded forecasts and GE raised its full-year cash flow forecast.

Yum Brands – Yum earned an adjusted 80 cents per share for its latest quarter, 14 cents a share shy of consensus forecasts. Revenue also came in below estimates, hurt by a weaker-than-expected performance at its Pizza Hut and KFC units.

Anixter International – The software company agreed to be acquired by private-equity firm Clayton, Dubilier & Rice for $81 per share in cash. The total value of the deal is $3.8 billion including assumed debt, with the transaction expected to close by the end of 2020's first quarter.

Molson Coors – The beer brewer fell a penny a share short of estimates, with quarterly profit of $1.48 per share. Revenue also came in short of forecasts and Molson Coors announced a restructuring that will slash up to 500 jobs.

Garmin – The GPS and fitness device maker earned $1.19 per share for its latest quarter, well above the 95 cents a share consensus estimate. Revenue also topped forecasts. Garmin saw better-than-expected results in all its units, as well as higher-than-expected profit margins.

Tupperware – Tupperware earned an adjusted 43 cents per share, well short of the 62 cents a share consensus estimate. The housewares maker's revenue also came in short of forecasts. The company said it was experiencing challenging trends in markets like the U.S., China, Canada, and Brazil. Tupperware also cut its full-year earnings outlook.

Johnson & Johnson – J&J said its testing found no asbestos in its Johnson's Baby Powder. That testing included a single bottle that the Food and Drug Administration had said contained trace amounts of asbestos, prompting J&J to recall a lot of 33,000 bottles earlier this month.

Fiat Chrysler – Fiat Chrysler said it was in talks about a possible merger with Peugeot maker PSA that could create a combined company worth about $50 billion. Fiat Chrysler had abandoned talks earlier this year to merge with France's Renault.

Amgen – Amgen reported quarterly profit of $3.66 per share, 13 cents a share above estimates. The biotech company's revenue also beat forecasts and Amgen raised its full-year guidance amid strong sales of its biosimilar drugs.

Electronic Arts – Electronic Arts reported quarterly profit of 96 cents per share, 10 cents a share above estimates. The video game maker's revenue also topped estimates. Electronic Arts saw stronger digital sales, including game downloads and in-game purchases.

Mattel – Mattel came in 10 cents a share above estimates, with quarterly profit of 26 cents per share. The toy maker's revenue was slightly above Wall Street forecasts. Mattel also said it is restating some past earnings following an internal investigation into accounting issues, and the company's chief financial officer is resigning.

Mondelez International – Mondelez reported quarterly profit of 64 cents per share, 4 cents a share above estimates. Revenue was slightly above forecasts. The snack maker raised its full-year outlook, as sales volume increases across its major markets.

FireEye – FireEye raised its annual revenue guidance, after doubling estimates by reporting quarterly profit of 2 cents per share. The cybersecurity company's revenue also beat forecasts as it sold more cloud subscriptions.

Advanced Micro Devices – AMD reported adjusted earnings of 18 cents per share, in line with Street forecasts. Revenue was very slightly below estimates, although the chipmaker reported better-than-expected results for its data center business.

Yum China – Yum China beat analyst estimates by 3 cents A share, with quarterly profit of 58 cents per share. The restaurant operator's revenue was below forecasts, however, as were comparable-restaurant sales at KFC, Pizza Hut, and Taco Bell.

Sony – Sony reported its best-ever second-quarter profit, driven by strong sales of its image sensors. Sales helped offset a drop in earnings from Sony's gaming division.

Edison International – Edison's Southern California Edison unit said its equipment will likely be found to have been associated with a 2018 California wildfire that damaged more than 1,000 homes in Los Angeles and Ventura counties.

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2019-10-30 11:42:28Z
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Fiat Chrysler and Peugeot owner in merger talks - BBC News

PSA Group, the French owner of Peugeot, is exploring a merger with its US-Italian rival Fiat Chrysler, it has confirmed.

A deal between the two carmakers would create a business with a combined market value of nearly $50bn (£39.9bn).

This is Fiat Chrysler's second attempt at a merger this year after it pulled out of an agreement with Renault in June.

Fiat Chrysler shares jumped 7.5% on Wall Street.

The potential merger would face significant political and financial hurdles.

Discussions remain in the early stages and there is no guarantee of a final deal.

However, if the two companies do combine, PSA chief executive Carlos Tavares is expected to lead the enlarged group.

John Elkann, Fiat Chrysler's chairman and the head of Italy's Agnelli industrial dynasty which controls the business, would retain the same position at the new company.

A merger of the two groups would bring a number of brands under one roof including Alfa Romeo, Citroen, Jeep, Opel, Peugeot and Vauxhall.

• Fiat Chrysler withdraws bid for Renault

The talks come months after a proposed tie-up between Fiat Chrysler and French carmaker Renault collapsed.

Fiat Chrysler had described its bid for Renault as a "transformative" proposal that would create a global automotive leader.

Industry shifts toward electric models, along with stricter emissions standards and the development of new technologies for autonomous vehicles, have put increasing pressure on carmakers to consolidate.

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2019-10-30 09:35:17Z
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Fiat Chrysler and Peugeot owner in merger talks - BBC News

PSA Group, the French owner of Peugeot, is exploring a merger with its US-Italian rival Fiat Chrysler, it has confirmed.

A deal between the two carmakers would create a business with a combined market value of nearly $50bn (£39.9bn).

This is Fiat Chrysler's second attempt at a merger this year after it pulled out of an agreement with Renault in June.

Fiat Chrysler shares jumped 7.5% on Wall Street.

The potential merger would face significant political and financial hurdles.

Discussions remain in the early stages and there is no guarantee of a final deal.

However, if the two companies do combine, PSA chief executive Carlos Tavares is expected to lead the enlarged group.

John Elkann, Fiat Chrysler's chairman and the head of Italy's Agnelli industrial dynasty which controls the business, would retain the same position at the new company.

A merger of the two groups would bring a number of brands under one roof including Alfa Romeo, Citroen, Jeep, Opel, Peugeot and Vauxhall.

• Fiat Chrysler withdraws bid for Renault

The talks come months after a proposed tie-up between Fiat Chrysler and French carmaker Renault collapsed.

Fiat Chrysler had described its bid for Renault as a "transformative" proposal that would create a global automotive leader.

Industry shifts toward electric models, along with stricter emissions standards and the development of new technologies for autonomous vehicles, have put increasing pressure on carmakers to consolidate.

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2019-10-30 08:54:44Z
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Peugeot owner in merger talks with Fiat Chrysler - BBC News

PSA Group, the French owner of Peugeot, is exploring a merger with its US-Italian rival Fiat Chrysler, it has confirmed.

A deal between the two carmakers would create a business with a combined market value of nearly $50bn (£39.9bn).

This is Fiat Chrysler's second attempt at a merger this year after it pulled out of an agreement with Renault in June.

Fiat Chrysler shares jumped 7.5% on Wall Street.

The potential merger would face significant political and financial hurdles.

Discussions remain in the early stages and there is no guarantee of a final deal.

However, if the two companies do combine, PSA chief executive Carlos Tavares is expected to lead the enlarged group.

John Elkann, Fiat Chrysler's chairman and the head of Italy's Agnelli industrial dynasty which controls the business, would retain the same position at the new company.

A merger of the two groups would bring a number of brands under one roof including Alfa Romeo, Citroen, Jeep, Opel, Peugeot and Vauxhall.

• Fiat Chrysler withdraws bid for Renault

The talks come months after a proposed tie-up between Fiat Chrysler and French carmaker Renault collapsed.

Fiat Chrysler had described its bid for Renault as a "transformative" proposal that would create a global automotive leader.

Industry shifts toward electric models, along with stricter emissions standards and the development of new technologies for autonomous vehicles, have put increasing pressure on carmakers to consolidate.

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2019-10-30 08:24:02Z
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Peugeot owner in merger talks with Fiat Chrysler - BBC News

PSA Group, the French owner of Peugeot, is exploring a merger with its US-Italian rival Fiat Chrysler, it has confirmed.

A deal between the two carmakers would create a business with a combined market value of nearly $50bn (£39.9bn).

This is Fiat Chrysler's second attempt at a merger this year after it pulled out of an agreement with Renault in June.

Fiat Chrysler shares jumped 7.5% on Wall Street.

The potential merger would face significant political and financial hurdles.

Discussions remain in the early stages and there is no guarantee of a final deal.

However, if the two companies do combine, PSA chief executive Carlos Tavares is expected to lead the enlarged group.

John Elkann, Fiat Chrysler's chairman and the head of Italy's Agnelli industrial dynasty which controls the business, would retain the same position at the new company.

A merger of the two groups would bring a number of brands under one roof including Alfa Romeo, Citroen, Jeep, Opel, Peugeot and Vauxhall.

• Fiat Chrysler withdraws bid for Renault

The talks come months after a proposed tie-up between Fiat Chrysler and French carmaker Renault collapsed.

Fiat Chrysler had described its bid for Renault as a "transformative" proposal that would create a global automotive leader.

Industry shifts toward electric models, along with stricter emissions standards and the development of new technologies for autonomous vehicles, have put increasing pressure on carmakers to consolidate.

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2019-10-30 08:16:15Z
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Peugeot owner in merger talks with Fiat Chrysler - BBC News

PSA Group, the French owner of Peugeot, is exploring a merger with its US-Italian rival Fiat Chrysler, it has confirmed.

A deal between the two carmakers would create a business with a combined market value of nearly $50bn (£39.9bn).

This is Fiat Chrysler's second attempt at a merger this year after it pulled out of an agreement with Renault in June.

Fiat Chrysler shares jumped 7.5% on Wall Street.

The potential merger would face significant political and financial hurdles.

Discussions remain in the early stages and there is no guarantee of a final deal.

However, if the two companies do combine, PSA chief executive Carlos Tavares is expected to lead the enlarged group.

John Elkann, Fiat Chrysler's chairman and the head of Italy's Agnelli industrial dynasty which controls the business, would retain the same position at the new company.

A merger of the two groups would bring a number of brands under one roof including Alfa Romeo, Citroen, Jeep, Opel, Peugeot and Vauxhall.

• Fiat Chrysler withdraws bid for Renault

The talks come months after a proposed tie-up between Fiat Chrysler and French carmaker Renault collapsed.

Fiat Chrysler had described its bid for Renault as a "transformative" proposal that would create a global automotive leader.

Industry shifts toward electric models, along with stricter emissions standards and the development of new technologies for autonomous vehicles, have put increasing pressure on carmakers to consolidate.

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https://www.bbc.com/news/business-50228611

2019-10-30 07:28:56Z
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S&P 500 record: How much higher can US stocks go? - CNN

The S&P 500 notched a new closing record on Monday, jumping above 3,039 as hopes for progress on a US-China trade deal sent markets higher.

But fresh highs raise the question: How much longer can the bull market for US stocks go on?

UBS, in a report out Monday, said it believes the US business cycle has transitioned to its late stage, as characterized by decelerating economic growth and Fed monetary policy that's "roughly neutral." The bank reduced the proportion of stocks it recommends wealthy clients hold in their portfolios earlier this year.

From UBS senior economist Brian Rose: "Last year, our main concern was that the economy would overheat, forcing the Federal Reserve to tighten monetary policy and causing the cycle to end. More recently, growth has slowed and the Fed has been cutting rates. The main risk now appears to be that the economy will simply continue slowing until a recession begins."

The good news? UBS points out that the economy can be "late cycle" for a long time.

JPMorgan, meanwhile, is bullish on global equities, but recently moved out of some US stock holdings in favor of international shares. The bank thinks that a resolution to Brexit uncertainty could boost European stocks down the line, and believes it's a good moment to get in on stocks in Japan, which Mislav Matejka, JPMorgan's head of global equity strategy, has called "underowned" and "cheap."

Worth watching: Investors have the money to pump into US stocks, should they desire. US equity funds have seen $96 billion in outflows so far this year, in favor of bond and cash funds, Goldman Sachs pointed out in a recent note to clients.

Their outlook: The investment bank thinks equity allocations will "remain relatively stable" in 2020 as economic growth stabilizes and interest rates start to rise again.

Google's business has gotten complicated

Recent regulatory scrutiny hasn't hit the growth of Google's core advertising business. But the company missed Wall Street's targets when it reported earnings on Monday — raising the question of whether diversification is weighing the company down.

Google parent Alphabet said that revenue for July through September topped $40 billion, an increase of 20%, my CNN Business colleague Clare Duffy reports. But the company missed expectations by a wide margin.

That's due in part to a roughly $1.5 billion knock from equity investments. The company didn't identify any holdings in particular, but its various venture arms have backed companies like Uber and Slack, which have struggled since going public earlier this year. (A report that Alphabet could buy Fitbit sent shares of the fitness tracker up 30% on Monday.)

Ad revenues, meanwhile, grew 17% to nearly $34 billion. That comes even as the company faces an antitrust investigation by attorneys general from 48 states and large antitrust fines from the European Union tied to its dominance in online advertising.

Markets react: Investors aren't thrilled, but also don't seem overly concerned. Shares of the company are down a little more than 1% in premarket trading. Attention now turns to Apple (AAPL) and Facebook (FB), which report earnings later this week.

Earnings watch: We're about halfway through earnings season. Third quarter results have come in 2% above consensus, while fourth quarter estimates have dropped 2% since the beginning of October, per Bank of America Merrill Lynch.

Beyond Meat can't satisfy investors

Beyond Meat (BYND) posted strong earnings on Monday, eking out its first quarterly profit. But investors were unimpressed, my CNN Business colleague Paul R. La Monica reports. Shares of the fake meat company are down nearly 12% in premarket trading.

What gives? The company's lockup period ends Tuesday, allowing corporate insiders to cash out of their positions.

Beyond Meat executives have tried to assure investors that this won't mark the end of the company's public market success. Beyond stock debuted in May at $25 a share. It soared close to $240 before pulling back to its current price, around $105.

But there's obviously some concern, especially amid the ongoing counter-narrative that the company is grossly overvalued. And competition is getting tight, with products from competitor Impossible Foods scoring big wins.

More earnings. BP (BP), GM (GM), Kellogg (K), Pfizer (PFE) and Xerox (XRX) report results before US markets open. Denny's (DENN), Mattel (MAT) and Mondelez (MDLZ) will follow after the close.

Also today:

• US consumer confidence for October arrives at 10 a.m. ET.
• Boeing CEO Dennis Muilenburg testifies about the company's 737 MAX crisis before the Senate Committee on Commerce, Science and Transportation, also at 10 a.m. ET.
• AT&T, CNN's parent company, holds an HBO Max presentation for investors on the Warner Bros. studio lot in Burbank, California at 6 p.m. ET.

Coming tomorrow: How is Facebook's business holding up amid growing political pressure?

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2019-10-29 12:04:08Z
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Saudi woos back top bosses despite Khashoggi murder - BBC News

Saudi Arabia has attracted high-profile business and political figures to its "Davos in the Desert" event, including some who stayed away last year over the killing of journalist Jamal Khashoggi.

The event, under way in Riyadh, features US Treasury Secretary Steven Mnuchin, who pulled out last time.

Others who have changed their minds since then include the bosses of Credit Suisse, Blackstone and BlackRock.

HSBC's John Flint dropped out in 2018, but interim boss Noel Quinn is there.

The event, officially known as the Future Investment Initiative, is being held for the third time and is viewed as the kingdom's key annual investment event.

It is organised by Saudi Arabia's Public Investment Fund and despite its nickname, has no connection with the World Economic Forum's annual event in the Swiss resort of Davos.

It became mired in controversy last year amid a wave of revulsion after Mr Khashoggi, a prominent critic of Saudi Arabia's government, was killed inside the kingdom's consulate in Istanbul by a team of Saudi agents.

Saudi prosecutors have put on trial 11 people who they say were involved in the "rogue operation" that led to Khashoggi's death. They are seeking the death penalty for five of them.

But Human Rights Watch says the trial does not meet international standards and that Saudi authorities have "obstructed meaningful accountability".

Oil flotation

On Tuesday, the first day of the three-day event, participants include three people who pulled out at the last minute last year:

• Stephen Schwarzman, chairman and chief executive of the Blackstone Group
• Tidjane Thiam, chief executive of Credit Suisse
• Larry Fink, chairman and chief executive of BlackRock.

Other big names due to speak on Tuesday were Indian Prime Minister Narendra Modi, World Bank President David Malpass and US President Donald Trump's son-in-law Jared Kushner.

Not all business sectors have returned to the Saudi fold. Uber chief executive Dara Khosrowshahi was one of last year's dropouts and big tech firms are absent from this year's line-up.

The forum is taking place as uncertainty continues over the timing of plans to float part of Saudi state oil giant Aramco.

The latest reports carried by al-Arabiya television suggest that shares in Aramco will begin trading on the Riyadh stock exchange on 11 December, but there has been no official confirmation.

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2019-10-29 10:51:28Z
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Australia Says Google Misled Consumers Over Location Tracking - The New York Times

SYDNEY, Australia — Australian regulators on Tuesday accused Google of misleading consumers about its collection of their personal location information through its Android mobile operating system, the latest government action against a tech company over its handling of vast quantities of user data.

The Australian Competition and Consumer Commission alleged in a lawsuit that Google falsely led users to believe that disabling the “Location History” setting on Android phones would stop the company from collecting their location data. But users were actually required to also turn off a second setting, “Web and App Activity,” that was enabled by default.

Google did not properly disclose the need to disable both settings from January 2017 until late 2018, the suit alleges. The company changed its user guidance after The Associated Press revealed in August 2018 that it was continuing to collect the data even after the Location History setting was switched off.

The commission also said that while Google made it clear to users what features they would lose by turning off location services, the company did not inform them adequately about what it would do with the data collected.

“This is part of a system of not being able to make informed choices about what’s being done with your data,” said Rod Sims, the commission’s chairman.

Mr. Sims called the lawsuit the first of its kind by a national government against a tech company over its use of personal data. The agency is seeking what he called significant financial penalties against Google, among other corrective measures. He added that he hoped the case would raise awareness among consumers over how much data is being collected.

“We need to be getting ahead of them, because this is a whole new world,” he said of data collection issues.

A Google spokeswoman said in a statement that the company was reviewing the allegations. She said Google would continue to engage with the commission over its concerns but intended to defend itself.

The action by Australian regulators comes as governments and consumer groups around the world have expressed growing concern about the power of tech companies, including their collection of personal data from devices that are indispensable to the lives of billions of people.

Consumer groups from several European countries had already sued Google over the location tracking issue under a comprehensive data privacy law adopted in Europe last year. Under that law, a French agency fined Google 50 million euros, or about $55 million, in January for not properly disclosing to users how it collected data to create personalized ads.

In the United States, regulators approved a $5 billion fine against Facebook this year over its role in allowing Cambridge Analytica, a political data firm hired by President Trump’s 2016 election campaign, to gain access to private information on more than 50 million Facebook users.

While Google has made changes to Android in later iterations that limit the location data it gathers, the business incentives for collecting as much personal data as possible remain great. Location-targeted advertising is worth an estimated $21 billion a year, and Google, along with Facebook, dominates the mobile ad market.

The Australian lawsuit is in part the product of a 19-month investigation by the consumer commission into the market power of Google and Facebook. It issued 23 recommendations, including an overhaul of privacy laws, to limit their reach and force them to take more responsibility for the content they disseminate.

The Australian government has also passed legislation challenging the power of tech companies, including a law in 2018 that compelled tech-industry giants to disable encryption. And under a new law criminalizing “abhorrent violent material” online, Australia is using the threat of fines and jail time to pressure platforms like Facebook to block such content, and it is moving to take down websites that hold any illegal content.

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https://www.nytimes.com/2019/10/29/world/australia/australia-google-location.html

2019-10-29 10:07:00Z
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Aramco hoping to begin its planned IPO this Sunday, report says - CNBC

Storage tanks are seen at the North Jiddah bulk plant, an Aramco oil facility, in Jiddah, Saudi Arabia, Sunday, Sept. 15, 2019.

Amr Nabil | AP

DUBAI — Saudi state-owned oil giant Aramco is planning to announce the start of its long-anticipated public offering on Sunday November 3, Reuters reported Tuesday, citing three sources with direct knowledge of the matter.

State broadcaster Al Arabiya reported that shares of the company will begin trading on the Tadawul, Saudi Arabia's stock exchange, on December 11. The local outlet also said Aramco aims to announce the transaction price on November 17 with a final IPO price announcement planned for December 4.

Aramco and the Tadawul did not immediately reply to CNBC requests for comment. In a comment to Reuters, Aramco said it "does not comment on rumor or speculation. The company continues to engage with the shareholders on IPO readiness activities. The company is ready and timing will depend on market conditions and be at a time of the shareholders' choosing."

The reports come as the kingdom kicks off its Future Investment Initiative (FII), an annual showcase of its investment opportunities, attended by major international investors and state officials.

Speculation and delayed announcements on the public listing of the world's largest company have riveted investors and market watchers since plans for the float were first disclosed three years ago. The oil giant has delayed the IPO — originally scheduled for 2018 — multiple times, reportedly over Saudi concerns about public scrutiny over its finances and because of the complexity of its corporate structure. The listing would be the largest public offering in history.

The kingdom reportedly plans to list 1% of Aramco on its local stock exchange before the end of this year and another 1% in 2020, as first steps ahead of a public sale of roughly 5% of the company.

Speaking at the FII on Tuesday, Saudi Public Investment Fund Governor Yasir al-Rumayyan said that the prior separation of Aramco from the kingdom's sprawling energy ministry was to avoid a conflict of interest, and told attendees that Aramco will have more institutional shareholders "soon."

The Aramco listing would aim to drum up cash for a government looking to significantly reduce its budget deficit and diversify its economy beyond oil as part of Crown Prince Mohammed bin Salman's Vision 2030.

—CNBC's Emma Graham contributed to this article.

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2019-10-29 09:50:43Z
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Google joins in Amazon’s spending spree, but to a lesser degree - MarketWatch

MarketWatch First Take

By Therese Poletti

Published: Oct 28, 2019 8:51 pm ET

Earnings from two of tech’s biggest names are hit by return to investing in the future of the businesses

The cost of new hires and real estate added up for Google last quarter.

Alphabet Inc.’s big earnings shortfall was not just the result of its equity investment losses: Continued heavy spending on hiring and real estate by the internet search and advertising behemoth also played a role.

Google’s parent company reported third-quarter profit far lower than Wall Street’s estimates Monday afternoon. Alphabet GOOG+1.97% GOOGL+1.95%  reported net income of $7.07 billion, or $10.12 a share, a year-over-year profit decline of more than 22% that missed estimates by nearly 18%. The stock fell by more than 1% in after-hours trading following the results.

Full earnings results: Alphabet earnings miss estimates, driving shares down

Alphabet executives blamed the profit decline on free spending, a longtime habit for Google that has declined since Chief Financial Officer Ruth Porat arrived from Wall Street. That is the same reason another big name in tech, Amazon.com Inc. AMZN+0.89% gave for its earnings downturn this year, as the two companies battle in new arenas — such as Amazon’s growing ad business and Google’s rising enterprise-cloud offering — for a more promising future.

Hiring was a big part of Google’s spending, Porat said in Monday’s conference call, along with investments in cloud data centers and offices to house all the new employees. Alphabet added 19,724 workers in the past year, and 6,450 in the third quarter.

“Head-count growth on an absolute basis in the third quarter was unusually high, reflecting the addition of new college hires,” Porat said, while promising that employee count will “be in line with growth in 2018.”

The company also said it spent $7.2 billion on capital expenditures, up from $5.3 billion a year ago. The spending this quarter included building out data centers and spending on new offices and campuses in the Bay Area and in Seattle. Technical infrastructure, such as data-center technology, accounted for only 60% of capex in the quarter, Porat said.

“Investments in office facilities included the $1 billion acquisition of a portfolio of buildings in Sunnyvale and in the purchase of two buildings to expand our presence in the Seattle area,” the CFO said.

Going forward, however, Porat said she expects that the primary driver of its capital expenditures will continue to be expanding its data centers and increasing the compute requirements to support machine learning, cloud search and YouTube.

Compared with Google’s rival in Seattle, Alphabet’s spending still seems anemic. Amazon added nearly 100,000 employees in the third quarter, which means that it hired roughly as many people every week as Alphabet did in the entire quarter. It also said it spent $4.7 billion in the quarter on purchases of property and equipment, which ostensibly includes its data center and warehouse build-outs.

Neither company has made a big splash in acquisitions recently, though Alphabet is reportedly eyeing a well-known name: Fitbit Inc. FIT+30.86%  . Reuters on Monday reported that Alphabet was considering purchasing the wearables company to round out its growing hardware offerings, which could lead to a lot more money heading out the door.

Alphabet definitely was on a big spending spree last quarter, and it is worthwhile to keep an eye on Google’s costs as potential antitrust litigation becomes a bigger factor in the next year or two. But if the tech titans are going to keep spending amid tariff fears and whispers of the end of the current tech boom, investing in the future is a much better target than even more stock repurchases.

See original version of this story

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2019-10-29 01:51:00Z
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Louis Vuitton owner eyes jewelry icon Tiffany & Co - CNN

LVMH, which is run by billionaire CEO Bernard Arnault and owns brands such as Louis Vuitton and Christian Dior, confirmed its interest on Monday after several media outlets reported over the weekend that it had made a takeover offer for Tiffany.

The French fashion conglomerate acknowledged only that it held "preliminary discussions" regarding a "possible transaction" with Tiffany, adding that "there can be no assurance that these discussions will result in any agreement."

Bloomberg and others have reported that LVMH approached the jeweler with an all-cash proposal earlier this month that would value Tiffany at about $14.5 billion, or $120 a share. That's roughly 20% more than the stock's closing price Friday.

Tiffany (TIF) has brought on advisers to review the offer and so far hasn't responded to LVMH (LVMHF), according to Reuters, which cited anonymous sources familiar with the matter.

Shares of Tiffany skyrocketed nearly 20% in premarket trading Monday, while LVMH stock was up 0.4% in Paris. Tiffany did not immediately respond to a request for comment from CNN Business.

"A takeover of Tiffany could make a lot of sense," analysts at Bernstein wrote in a research note. While Tiffany is one of the world's best-known luxury brands, the analysts said it still has room to grow, particularly in jewelry and watches.

The deal would boost LVMH's presence in the United States, which accounts for about a quarter of its revenue. It would also bolster the French company's jewelry and wristwatch lineup, which include European legacy brands such as Bulgari, Hublot and TAG Heuer. As of January, the jewelry and watch unit only brought in 9% of overall revenue, according to a letter to shareholders.

LVMH is the world's biggest luxury group. The company is home to 75 different brands, and it has for years been the top seller of high-end goods, according to a Deloitte analysis published this year. Last year, the retail giant took in 46.8 billion euros ($51.9 billion) in revenue.

Tiffany has had a more complicated story. The company has long dealt with slumping sales, and in 2017 it replaced its CEO after disappointing financial results. Since then, it has been working to rebrand its image to attract more millennials — adding more products that are designed to appeal to young shoppers, rolling out more targeted marketing and revamping its historic flagship store in New York City to draw in more customers.

In the company's most recent earnings report in August, it said that global sales dropped 3% in the first half of this year. But it also said it enjoyed "strong growth" in mainland China, where the slowing economy has put pressure on the broader luxury sector.

The company's "long-term growth potential in China" is one of the main factors that makes it attractive to buyers, analysts at Cowen wrote in a note on Sunday.

An acquisition of Tiffany would be one of LVMH's splashiest deals to date. In 2017, the company took over Christian Dior for $13 billion, and last year it snapped up the ritzy Belmond hotel chain for $2.6 billion.

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2019-10-28 11:34:00Z
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2 Passive Ways to Boost Your Social Security Benefits - The Motley Fool

Chances are, Social Security will be a substantial source of income for you once you retire, so the higher those benefits are, the less financial stress you'll grapple with. Now you'll often hear that you should make an effort to boost those benefits as much as possible. But actually, in some cases, you can raise those benefits by taking no action at all. Here are a couple of passive ways to get more money from Social Security during your golden years.

1. Don't file early

The Social Security Administration lets you start collecting benefits at age 62, but you won't get the full monthly benefit you're entitled to until you reach full retirement age, or FRA. Your FRA is determined based on your year of birth, as follows:

Year of Birth	Full Retirement Age
1943-1954	66
1955	66 and 2 months
1956	66 and 4 months
1957	66 and 6 months
1958	66 and 8 months
1959	66 and 10 months
1960 or later	67

DATA SOURCE: SOCIAL SECURITY ADMINISTRATION.

Filing early will generally result in a permanent reduction in benefits. You'll lose 6.67% a year for the first 36 months you claim benefits ahead of FRA, and then 5% a year for each 12-month period thereafter. In other words, filing for Social Security three years early will slash your benefits by 20%. Filing four years early will result in a 25% reduction, while filing five years early will lead to a 30% cut. But if you sit back, do nothing, and wait until FRA to file, you'll get more money than you would by filing sooner. And if you delay benefits past FRA, you'll permanently boost them by 8% a year in the process, up until age 70.

IMAGE SOURCE: GETTY IMAGES.

2. Don't retire early

Your Social Security benefits are calculated based on your 35 highest-paid years of wages. But most people earn more at the end of their career than they do at the beginning, which means that if you hold off on retiring and stay in the workforce later in life, you might boost your benefits by virtue of replacing some lower-earning years with higher earnings.

Imagine you started working full-time at age 22, and you're thinking of retiring at age 57. In doing so, you'll still have a full 35 years of work under your belt; you won't risk having any zeros factored into your benefits equation, which is what happens to people who don't put in a full 35 years in the workforce. But if you earned $25,000 a year at age 22, and you're earning $125,000 a year now, by not retiring, you'll have the potential to replace some years of lower income with a higher income. (Keep in mind that when determining your benefits, the Social Security Administration does adjust earlier earnings for inflation; but a $25,000 salary earned 35 years ago still can't compare to $125,000).

Get the most out of Social Security

Even if you amass a healthy amount of savings for retirement, there's a good chance you'll still need your Social Security income to pay for extra expenses or enjoy the luxuries you've been looking forward to all your life. The good news is that you have the power to increase your benefits by not taking action -- by letting your benefits grow rather than claiming them early, and by staying in the workforce rather than marching into your boss's office and resigning.

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2019-10-28 10:36:00Z
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Luxury goods firm LVMH eyes Tiffany takeover - BBC News

Luxury goods firm Louis Vuitton (LVMH) has confirmed it has held "preliminary discussions" about buying US jeweller Tiffany,

The statement followed reports that LVMH had made a $14.5bn (£11.3bn) offer to buy the company.

"The LVMH Group confirms that it has held preliminary discussions regarding a possible transaction with Tiffany," it said.

LVMH is owned by France's richest man, Bernard Arnault.

It produces a wide range of luxury goods including clothing, cosmetics, perfumes, drinks and fashion accessories, including its signature Louis Vuitton handbags.

It also owns brands such as Christian Dior, Givenchy and Kenzo, as well as many of the best-known champagne brands, including Dom Pérignon and Moët & Chandon.

Global demand for its products has held up well in recent years, but the same cannot be said for Tiffany, which has seen worldwide sales fall this year.

LVMH said there was "no assurance" that its talks with Tiffany would produce an agreement.

The announcement by LVMH came after media reports that the firm had submitted a preliminary, non-binding offer to Tiffany earlier this month.

The offer is said to value Tiffany at about $120 a share.

Analysts say LVMH is keen to expand in the US, where Tiffany is based.

LVMH has 75 brands, 156,000 employees and a network of more than 4,590 stores, while Tiffany employs more than 14,000 people and operates about 300 stores, including its flagship outlet on Fifth Avenue in New York.

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https://www.bbc.com/news/business-50205953

2019-10-28 10:38:09Z
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Luxury goods firm LVMH eyes Tiffany takeover - BBC News

Luxury goods firm Louis Vuitton (LVMH) has confirmed it has held "preliminary discussions" about buying US jeweller Tiffany,

The statement followed reports that LVMH had made a $14.5bn (£11.3bn) offer to buy the company.

"The LVMH Group confirms that it has held preliminary discussions regarding a possible transaction with Tiffany," it said.

LVMH is owned by France's richest man, Bernard Arnault.

It produces a wide range of luxury goods including clothing, cosmetics, perfumes, drinks and fashion accessories, including its signature Louis Vuitton handbags.

It also owns brands such as Christian Dior, Givenchy and Kenzo, as well as many of the best-known champagne brands, including Dom Pérignon and Moët & Chandon.

Global demand for its products has held up well in recent years, but the same cannot be said for Tiffany, which has seen worldwide sales fall this year.

LVMH said there was "no assurance" that its talks with Tiffany would produce an agreement.

The announcement by LVMH came after media reports that the firm had submitted a preliminary, non-binding offer to Tiffany earlier this month.

The offer is said to value Tiffany at about $120 a share.

Analysts say LVMH is keen to expand in the US, where Tiffany is based.

LVMH has 75 brands, 156,000 employees and a network of more than 4,590 stores, while Tiffany employs more than 14,000 people and operates about 300 stores, including its flagship outlet on Fifth Avenue in New York.

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https://www.bbc.com/news/business-50205953

2019-10-28 09:41:01Z
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