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Monday

February 05, 2018

Tomorrow's Headlines

Broadcom Raises Offer for Qualcomm To Over $121B

In This Newsletter

Broadcom Raises Offer for Qualcomm

To Over $121B

Jerome Powell Sworn In as Federal

Reserve Chairman

Service-Sector Activity Hits DecadeHigh

Tech Giants In No Rush to Spend

Overseas Cash

Banks Shutter 1,700 Branches in

Fastest Decline on Record

Avon Names New CEO As Activist

Investors Lose Patience

Broadcom Ltd. sweetened its offer for Qualcomm Inc. to more than $121

billion and threatened to walk away if the parties don't come to an agreement

by early March, dialing up the pressure in its bid to take over the chip maker

in what would be the largest technology deal ever.

Broadcom said Monday it would pay $82 a share in cash and stock, up from

its initial offer of $105 billion, or $70 a share in cash and stock, in November.

The revised bid is its "best and final offer," Broadcom said, representing a

50% premium to Qualcomm's share price on Nov. 2, before news of an

expected bid emerged. The cash portion of the offer remained at $60 a

share.

In a letter to Qualcomm shareholders, Broadcom said it would stop pursuing

a deal if the companies don't reach an agreement by the end of Qualcomm's

March 6 shareholder meeting, or if Qualcomm shareholders don't elect a

slate of directors nominated by Broadcom.

Saks Owner Taps CVS Veteran as Next

CEO

Arby's, Buffalo Wild Wings Merge To

Compete In Changing Industry

Jerome Powell Sworn In as Federal Reserve Chairman

Lenders To Ease Standards For Large

Business Loans in 2018

Jerome Powell took the oath of office as chairman of the Federal Reserve's

board of governors on Monday, succeeding Janet Yellen, the central bank

said.

Fed Rebuke Costs Wells Fargo About

$27 B in Lost Market Value

Lawrence Lindsey Withdraws From

Consideration For No. 2 Fed Post

Plus: Market Snapshot, Tomorrow's Calendar,

Earnings Reports and Talking Points

The Senate last month confirmed Mr. Powell to become the central bank's

16th chairman, clearing the way for a new leader likely to continue raising

interest rates to keep the nation's economic expansion on track.

The Fed said the oath was administered by Fed governor Randal Quarles,

who joined the central bank in October as vice chairman for supervision.

Market Snapshot

Stocks

Service-Sector Activity Hits Decade-High

The Dow Jones Industrial Average

plunged more than 1,100 points in a

volatile session Monday, its largest

one-day point decline on record. The

global selloff in stocks rippled through

Europe and Asia as well, as a longrunning market rally threatened to

become a rout. Indexes in all three

regions gave up their gains for 2018.

A measure of service-sector activity across the U.S. picked up in January to

reach a 10-year high, suggesting strong momentum in the sector powering

the bulk of the U.S. economy beginning 2018.

Treasurys

This figure exceeded expectations of economists surveyed by The Wall

The Institute for Supply Management Monday said its index of

nonmanufacturing activity -- tracking industries including health care, finance,

agriculture and construction -- rose to 59.9 in January from 56 in December,

the best index reading for records dating back to 2008.

Treasurys

U.S. government bond prices edged

higher as investors looked ahead to

Treasury debt auctions this week and

tried to assess whether the recent rise

in yields will be enough to attract

buyers. The yield on the benchmark

10-year Treasury note slid to 2.847%,

according to Tradeweb, from 2.852%

Friday. Bond yields fall as prices rise.

Forex

The dollar rose Monday, as investors

sought shelter amid a selloff in stocks.

The Wall Street Journal Dollar Index,

which measures the U.S. currency

against a basket of 16 others, was

recently up 0.2% at 83.74.

Commodities

U.S. crude prices had their worst day

in two months Monday as a stock

market selloff and increased U.S.

drilling continue to knock months of

bullish sentiment for crude. U.S. crude

futures settled down $1.30, or 1.99%,

at $64.15 a barrel on the New York

Mercantile Exchange?their biggest

daily drop since Dec. 6. Brent, the

global benchmark, fell 96 cents, or

1.4%, to $67.62 a barrel on ICE

Futures Europe.

This figure exceeded expectations of economists surveyed by The Wall

Street Journal, who had forecast a January reading of 56.5. A number above

50 indicates expansion.

The rise was driven by increases across a broad swath of components,

including new orders and employment indexes. The new orders index rose to

62.7 in January from 54.5 in December. The employment index increased in

January to 61.6, the highest level on record.

Tech Giants In No Rush to Spend Overseas Cash

With the passage of the new U.S. tax law, the nation's tech giants can now

more freely dip into their stockpiles of overseas cash. They don't seem to be

in any hurry.

The five largest U.S. technology companies by market value combined hold

nearly $500 billion in cash outside their borders. In their first earnings calls

since the tax overhaul, three -- Microsoft Corp., Alphabet Inc. and

Inc.--suggested greater access to the cash didn't change their

spending plans.

"When we have seen an opportunity to invest, we have not really waited for

tax reform to do that," Microsoft Chief Financial Officer Amy Hood said on a

call with analysts.

Alphabet finance chief Ruth Porat reported "no change in our approach to

capital allocation." Amazon's CFO, Brian Olsavsky, said the company already

spends a great deal on its workforce.

Banks Shutter 1,700 Branches in Fastest Decline on Record

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