Daily Agenda: Earnings Reports a Mixed Bag

BP earnings slide, KKR beats consensus, Apple is on deck; Sanders endorses Clinton; Anheuser-Busch raises SABMiller bid; Fed appears ready to move against Goldman.


Simon Dawson

In the run up to two major central bank announcements, earnings season continues to rumble along. London-based oil producer BP reported second quarter financial results today with earnings that were 45 percent lower than the same period in 2015. The shortfall came as management cuts costs and underscores the dual headwinds of high debt levels and a stalled oil rally that continues to plague the energy sector. Shares of BP sold off by more than 3 percent in London trading after the announcement. In New York, alternative-asset giant KKR & Co. released earnings that were stronger than consensus analyst estimates as a result of assets sales, including the firm’s stake in drugstore chain Walgreens Boots Alliance. The firm reported net income of $0.23 per share driven by divestitures that were offset by some underperformance among portfolio firms. Perhaps today’s biggest story for investors will be Apple’s earnings release after markets close this afternoon. Apple stock has struggled with concerns over rising competition in Asian smartphone markets, and a perceived lack of compelling new products in the pipeline.

Sanders endorses Clinton. Addressing a sometimes boisterous crowd at the Democratic National Convention in Philadelphia, Vermont Senator and presidential contender Bernie Sanders urged his supporters to back Hillary Clinton in her pursuit of the White House. Sanders worked to assuage the ire of supporters angered by leaked emails that indicated that Democratic National Committee officials had been biased against him during the primaries. First Lady Michelle Obama also delivered a well-received speech that urged unity in the race to defeat GOP nominee Donald Trump.

Anheuser-Busch raises bid for SABMiller. Leuven, Belgium-based Anheuser-Busch InBev today raised its offer price for its proposed merger with London-based SABMiller to offset the impact on valuation because of the fall in pound sterling following the U.K.’s Brexit referendum. With a raised bid of 45 pounds per share, the total deal value exceeds $104 billion. The move comes as some SABMiller shareholders, including activist hedge funds, have raised concerns over the merger on the back of currency volatility.

Federal Reserve to bring action against Goldman Sachs. Multiple media outlets, citing anonymous sources, today reported that the Federal Reserve is close to bringing action against the Goldman Sachs Group for improperly accessing classified documents. The documents in question appear to have been obtained by Goldman executives via a former colleague working at the New York Fed.

Deutsche facing new suit over subprime products. In a ruling handed down yesterday, a federal court in New York cleared the way for an investor lawsuit against Deutsche Bank relating to mortgage-backed securities sold in late 2007 and early 2008. The suit alleges that the bank misrepresented the declining value of subprime assets underlying the more than $5 billion in placements.