Posts by Nicole Sinclair

All eyes on upcoming Line offering amid a dismal IPO market

So far this year, just over 40 IPOs have priced in the US, down over 50% from last year, according to Renaissance Capital, a Manager of IPO-Focused ETFs.

The first quarter, which marked the slowest quarter for IPOs in seven years, was plagued by volatility driven largely by concerns about the Chinese economy. And while activity picked up in the second quarter, levels remain well below normal issuance, with the June 23 Brexit vote and uncertainty from the Fed causing many companies to hold off on pricings.

“After a very quiet first quarter, the IPO market is still normalizing,” according to a recent report by Renaissance Capital. Pricings were held back by a public-private valuation disconnect in the tech sector along with a wariness caused by poor trading of 2015 IPOs, which are 69% below issue on average, in addition to the overhangs of Brexit and interest rate uncertainty that loomed over the quarter.

One bright spot for 2016? Aftermarket performance of IPOs. The IPOs that priced this year are up 10% on average, according to Renaissance Capital. And IPOs that raised $100 million or more are up 24%, according to Renaissance Capital. This compares with flat returns for the S&P.

A preview of how corporate America will blame Brexit for bad news

The second quarter ends on Thursday, and markets will be gearing up for the kick-off of second quarter earnings season in coming weeks.

The recent referendum vote for Great Britain to leave the European Union is sure to be a key question posed to management teams by analysts. In fact, it looks like Brexit may very well be the new excuse for companies that issue disappointing guidance.

C arnival ( CCL ), the first company to report quarterly financial results after the June 23 Brexit vote, gave a glimpse at the types of excuses companies may make for Brexit.

In the company’s second quarter report on June 28, management narrowed fiscal year earnings guidance to $3.25 and $3.35 per share (from a previous estimate of $3.20 to $3.40 per share), but the midpoint was maintained.

But that doesn’t mean there was no Brexit impact. In fact, CEO Arnold Donald spoke to a significant earnings drag from currency in the wake of the vote.

Donald explained that strong demand and pricing offset the impact of Brexit, and specifically the deterioration of the British pound, which represents about 30% of the company’s currency exposure.

 

These companies hope to deliver a blockbuster Alzheimer’s drug

More than 5 million Americans are living with Alzheimer’s disease today. Every 66 seconds, someone in the United States develops the disease. It’s the sixth leading cause of death in the country.  

Despite its prevalence, little progress has been made in terms of treatment.

“It has been over a decade of various failed drugs in Alzheimer’s disease,” RBC analyst Michael Yee told Yahoo Finance. “Part of that is driven by the fact that scientists don’t have great conviction on exactly what’s driving Alzheimer’s.”

“Alzheimer’s disease is a progressive neurological disorder that gradually deprives patients of their memory and ability to carry out daily activities,” Yee explained in a recent note. “As Alzheimer’s disease progresses, individuals may experience difficulties with language, perception, and mobility, as well as face detrimental changes in personality and behavior, such as anxiety, depression, agitation, delusions, or hallucinations.”

Analysts say that a successful medicine for the neurodegenerative disease could draw $10 billion annually, but so far it’s mostly been disappointments.

The beta-amyloid approach

5-minute take: How Trump and Clinton differ on policing Wall Street

When it comes to Wall Street and Financial regulation, there’s a huge gap between presidential nominees Donald Trump and Hillary Clinton. Yahoo News political consultant Brian Goldsmith joined us to break it down.

“This is clearly a very tender topic, because millions of Americans lost their jobs and or their life savings during the financial crisis in 2008,” Goldsmith said. “And so the political system responded very aggressively.”

President George W. Bush pushed through the Troubled Asset Relief Program (TARP) legislation to rescue the financial system. And soon after he took office, President Barack Obama pushed through Dodd-Frank legislation to reform the financial system.

Dodd-Frank legislation

Dodd-Frank, which was a broad piece of legislation that dealt with everything from the major banks to credit ratings agencies and the derivatives markets, defines the current regulatory landscape.

Donald Trump’s financial regulation outlook

Trump has been vocal about his dislike of Dodd-Frank legislation.

 

4 reasons why the US economy is so sensitive to Brexit-like shocks

As the market continues to absorb the news that Great Britain wants to leave the European Union, analysts say that the only certainty these days is uncertainty. And this uncertainty is echoing through economies around the world.

Even though the US has limited direct exposure to the UK, its markets have plunged and its economy appears to be at risk. Economist Ethan Harris and his team at Bank of America Merrill Lynch say that the US economy has become particularly vulnerable to confidence shocks in this atmosphere of uncertainty. They identified four reasons for this:

(1) Household deleveraging cycle

Household debt as a percent of disposable income declined to 106% in the first quarter from its peak of 135%, according to Harris. “Without the backstop of leverage, negative shocks will prove more painful and persistent, leaving households and businesses more risk averse,” he wrote.

(2) Limited fiscal and monetary policy ammunition

(3) Low-growth recovery

(4) Global interconnectedness

The European debt crisis is one example of an international shock that impacted the US, according to Harris.

 

The big question looming over the markets after the Brexit bombshell

Global markets sold off sharply on Friday, as Britain’s unexpected vote to leave the European Union (EU) Thursday caused the pound to sell off to its lowest levels in 30 years. The Dow Jones Industrial Average also fell over 500 points mid-day.

Unlike some EU member countries, the UK has its own separate currency rather than the euro. It also has its own central bank, the Bank of England, removing some of the disruptive risk potential tied to the Brexit, according to JPMorgan’s Adam Crisafulli.

But there’s still a big question looming over the world markets: Will the Brexit have a ripple effect that spurs other countries to leave the EU or otherwise spurn globalization?

“Is the Exit decision a uniquely British one?” Crisafulli wrote in a note this morning. “Or does it reflect a worldwide electorate so distraught and economically frustrated that similar outcomes should be expected going forward?”

More referendums on tap

Already Friday morning, politicians in several European countries called for referendums similar to the one just held in the UK. The anti-immigrant, anti-euro Front National party in France has been especially focused on breaking free from the EU.

Accenture North America CEO says corporate America investing in digital

On Thursday, consulting behemoth Accenture ( ACN ) posted a better-than-expected third quarter with revenue up 8.6% year-over-year.

CEO of North America Julie Sweet told Yahoo Finance that management teams continue to focus on making their business more efficient and productive amid sluggish macro growth.

“We’re still seeing plenty of opportunity for old fashioned productivity and cost efficiency,” she said. “So you take oil and gas for example—commodity driven, facing real issue—you see a lot of that focus. At the same time...the companies that are focused on the top line on digital are just as focused on having the right operating model and cost structure that they can have the sustained investment capacity.”

Digital in particular remains a key focus for companies, according to Sweet. And Accenture has focused on digital, cloud and security spending, which now represents about 40% of the company’s revenue.

Sweet added that companies are asking, “How can you digitize the enterprise to be more productive and be more efficient?”

 

'Silicon Valley' star reveals why the cast visits Bay Area billionaires

HBO’s "Silicon Valley" whose third season finale airs this Sunday, has received rave reviews. It’s the first sitcom to depict the current moment in the tech capital of the world.

The show, directed by Mike Judge, has developed a strong following in Northern California among tech giants, but also has built a wide following beyond the valley.

Josh Brener , who plays Nelson “Big Head” Bighetti, said he was surprised by the show’s success.

“This has all been a happy, wonderful surprise,” he said. “Because it was Mike Judge, you’re always thinking that it’s going to be brilliant and great, but also the odds of anyone liking anything are 0.5%. So it’s been an exciting and wonderful and wild great ride. And I’m just lucky to be a part of all.”

Tech research

Brener added that in particular fellow castmate Zach Woods reads up on the tech world and that the writers are already in the midst of research for next season.

 

In the end, though, Brener said there is an underlying optimism.

The $55 billion company that could come out on top after the Microsoft-LinkedIn deal

Microsoft’s ( MSFT ) June 13 announcement to acquire LinkedIn ( LNKD ) focused on the transformation this $26 billion acquisition would bring to Big Blue. But overlooked are key implications for the growing $55 billion software giant in Silicon Valley Salesforce.com ( CRM ).   After all, Salesforce chairman and CEO Marc Benioff said he had also put in a bid for LinkedIn.  Meanwhile, it’s been rumored for over a year that Microsoft has been courting Salesforce itself as a potential target. Social and enterprise intertwine Microsoft’s decision to buy the career networking site reflects a growing integration between social and enterprise software, which speaks to Salesforce’s sweet-spot. Stifel analyst Tom Roderick said that the overlap of social networks and software companies is becoming more indistinguishable. “The lines are blurring here across all of this social data and its impact on enterprise platforms,” he said. “The very idea that Microsoft would pay $26 billion for LinkedIn and that Salesforce.com might have been interested tells you that just about anything and everything in tech might be for sale right now.” The collision of social media and software can be seen...

NAFTA architect articulates the global story at the core of the Brexit vote

Thursday’s referendum on whether Britain will leave the European Union (EU), known as “Brexit,” has added to market volatility over the past month. Even as chances of a Brexit have decreased, political leaders, central bankers and billionaire investors like George Soros have reiterated their stance that a “leave” vote would cause severe market disruption. While the discussions over the Brexit vote have focused on the UK and the EU, the core of the matter reflects a global theme that has been subject to intensifying rhetoric. Former White House Chief of Staff to Bill Clinton Mack McLarty said the popularity of the “leave” camp in the UK fits in with a broader aversion to globalization across the world. McLarty—who served as a top advisor to Bill Clinton, George H.W. Bush, and Jimmy Carter—said global economic uncertainty has exacerbated fears and calls for more protectionism. “These feelings about insecurity and the future and change are not just limited to the United States,” he said. “They are a global phenomenon. I think it’s incumbent on our leaders, both in the government and in the private sector, to really address those needs, concerns and anxieties.” McLarty, who said he...