Australia banks, Japan markets, currencies in focus

Asia markets were mixed on Monday morning, with shares in Japan and Australia rising while stocks in Hong Kong slipped.

Hong Kong’s Hang Seng index, which will close earlier at 12:00 p.m. HK/SIN today with the eve of the Lunar New Year holidays, slipped 0.1 percent in early trade.

Over in Japan, the Nikkei 225 advanced 0.2 percent while the Topix rose 0.77 percent. Shares of tech giant Sony, however, plunged more than 8 percent after the company cut its revenue outlook for the fiscal year, on the back of weaker-than-expected sales of cameras and smartphones.

Stocks in Australia traded higher ahead of the release of a landmark report surrounding the country’s beleaguered financial services sector. The ASX 200 gained 0.38 percent in afternoon trade, with the sectors mostly higher. The heavily weighted financial subindex recovered from its earlier slip to rise more than 0.5 percent as shares of the country’s Big Four banks advanced.

The moves Down Under came ahead of the release of the final report by the Royal Commission into misconduct in the country’s financial sector. The recommendations by the Royal Commission are expected to bring extensive changes to the sector, following a series of systemic wrongdoings which were uncovered in 2018.

Stock markets in China and South Korea are closed today due to holidays.

HSBC and Goldman Sachs back fintech firm Bud’s Series A funding round

British fintech start-up Bud said Monday that it had secured $20 million in a funding round co-led by HSBC and Goldman Sachs.

The London-based company’s platform lets banks update their apps to give users access to financial services products from rivals. Banks can also categorize a customer’s spending data using Bud’s technology to help them find more cost-efficient products.

Its offering is part of an emerging theme in the world of fintech known as “open banking,” which essentially means banks sharing their customer data with third-party providers to enable them to create new financial products.

Proponents of open banking say that it will increase competition in the industry and benefit consumers, giving them more choice over who they bank with.

Ed Maslaveckas, Bud’s co-founder and chief executive, said in an interview that the sector has seen a “massive shift” from a focus on competitive rates and services to a digital-oriented customer experience and a “marketplace” banking model.

“The market dynamic is such that open banking is a much bigger change for banks than I think people realize,” he told CNBC. “Open banking essentially allows the customer to get their banking data and make payments from any app or service of their choosing.”

Bud’s Series A funding round — an early-stage investment — also got backing from other big lenders including Australia’s ANZ, South Africa’s Investec and Spain’s Banco Sabadell. Investec invested through its venture fund INVC while Banco Sabadell participated via its venture arm InnoCells.

The Pentagon will deploy another 3,750 US troops to Mexican border

Guards stand on the US side of the US-Mexico border fence as seen from Tijuana, Mexico, on November 16, 2018.

PEDRO PARDO | AFP | Getty Images

Guards stand on the US side of the US-Mexico border fence as seen from Tijuana, Mexico, on November 16, 2018.

WASHINGTON — The Pentagon announced Sunday a deployment of about 3,750 troops to the U.S. border with Mexico, as President Donald Trump continues to press the need for stronger border security amid a surge in migrants from Central America.

The additional troops will bring the total number of forces supporting the border mission to approximately 4,350, according to estimates provided by the Department of Defense.

The troop deployment, which was approved by Acting Secretary of Defense Patrick Shanahan on Jan. 11, will last for 90 days. The border mission includes mobile surveillance capability as well as the emplacement of approximately 150 miles of concertina wire between ports of entry. The Pentagon first approved the deployment of active-duty troops to the Mexico border in October, on the heels of the U.S. midterm congressional elections.

Trump made the caravan of approximately 3,500 Central American migrants seeking asylum as one of his prime targets ahead of midterm elections. The president has referred to the caravan as an “invasion,” while arguing that Democrats want open borders.

The movement of thousands of active-duty troops to the border has been criticized as a political stunt designed to back Trump’s campaign promise of securing U.S. ports of entry.

At the time, Secretary of Defense James Mattis downplayed that criticism, saying that the Pentagon is providing “practical support based on the request from the commissioner of customs and border police. We don’t do stunts in this department,” he added.

The latest revelation comes on the heels of a partial government shutdown stemming from the impasse over Trump’s demand for $5.7 billion to construct a border wall.

In an interview with CBS’ “Face the Nation,” Trump said that shutting down the federal government again and declaring a national emergency are options he’s considering when addressing the border security issue.

“It’s national emergency, it’s other things and you know there have been plenty national emergencies called. And this really is an invasion of our country by human traffickers,” Trump said in an interview set to broadcast on Sunday.

“We’re going to have a strong border. And the only way you have a strong border is you need a physical barrier. You need a wall. And anybody that says you don’t, they’re just playing games,” he added.

The recent S&P rebound looks a lot like 2000 and 2007

The markets have surged into the new year with the S&P 500 Index posting its best January in more than three decades. Investor optimism of late has been fueled by a stronger-than-expected earnings season, and a Federal Reserve that is expected to pull back on plans to hike interest rates.

The S&P 500 is now up more than 15 percent from its December 24 closing low. Jason Hunter, technical strategist at JPMorgan, told CNBC recently that new highs could be on the way.

“It’s very clear anyone who looks at charts for a living or even casually, you had a very clear well-defined support that held through most of the year and then a fairly violent breakdown through December,” Hunter said Thursday on CNBC’s “Futures Now.”

Given the recent rebound, Hunter noted that the S&P 500 is “right back into the underside of what potentially is viewed as a distribution pattern,” which is giving him flashbacks to 2000 and 2007.

“The rebound we’ve had to-date…[is] consistent with 2000 and 2007…but I think it’s worth noting that you see that type of price action outside of bear market environments as well,” he explained. He noted that historically, when the market are as deeply oversold as they were in December, the following 6 to 12 months have a positive lean.

“But it’s worth noting that this is a bi-model distribution, so we’re left in the uncomfortable position to qualitatively decide is this a bear market rebound, or is this part of a sustained move where we’re going to get up to see a new high for the cycle before we move into let’s say a recession –driven environment,” the analyst said.

“And unfortunately….there’s no real difference between the price action in a bear market, or in a bull market in a volatile environment, and that’s where we have to move and look outside to other indices,” he added.

According to Hunter, one way to differentiate whether the market rally of late is a bull run revival, or just a bear market bounce, is to look at the chips.

The Philadelphia Semiconductor Index (SOX) — which tracks 30 public companies aligned with the manufacturing and distribution of chip stocks — has posted significant gains so far this year up more than 10 percent.

While the index also fell alongside the broader markets in December, Hunter’s chart reveals that on a relative basis “it actually bottomed in mid-November as the trade talks started to get underway.”

Hunter considered the SOX index a leading indicator for market direction due its correlative nature with PMI numbers. The Purchasing Managers Index is often regarded by investors as a key gauge of overall economic health.

“Even if semis continue to rally like they have that would suggest from a model correlation perspective that PMI data is not going to look that hot this month and even next month,” he explained. “[However] the outperformance gives us a positive lean that suggests the policy response we’ve seen out of the Fed, Chinese stimulus and the potential to get to a better spot where the trade negotiations are.”

Although trade tensions and looming slowdown fears have put pressure on global manufacturing numbers of late, Hunter’s theory suggests the semiconductor gauge tends to lead by about 1-2 months.

“The policy responses we’ve seen again out of the U.S. and China kind of fits with the technical story,” he said. “Where this is more of a sustained rally into at the very least in the third quarter when S&P can approach its highs again.”

What you can expect to see in this year’s Super Bowl ads

Another big trend this year – women. We’ll not only see ads for women, but ads that were created by them.

Dating app Bumble, which lets the woman make the first move, will make their Super Bowl ad debut with tennis star Serena Williams in it’s “The Ball is in Her Court” campaign.

“Bumble will not only have Serena Williams in their spot but they have a team mostly comprised of all women creating the spot which is certainly different for the super bowl and advertising in general,” Poggi explained.

Meanwhile, beauty brand Olay will also run a Super Bowl ad for the first time and will feature actress Sarah Michelle Gellar. It’s rare to see a beauty brand advertise during the game, even though as Poggi points out “nearly half of the Super Bowl audience is female and has been for the last couple of years.”

The small It’s a 10 Haircare brand aired a spot in 2017, in order to showcase their expansion into the men’s hair category. Unilever’s Dove Men+Care ran ads in 2010 and 2015, but the last women’s beauty brand to air an ad was Dove in 2006, according to Ad Age.

“Historically women have always been showcased overtly sexualized or [as] stereotypes – the nagging wife or mom…and that’s changed,” said Poggi.

Michelob Ultra’s ad for its new beer Pure Gold will feature actress Zoe Kravits (daughter of Lenny Kravitz and Lisa Bonet). In a stark contrast to the excitement and volume of the game, this spot is meant to be calming. It uses ASMR, autonomous sensory meridian response, which is a technique that uses various sounds, such as tapping on glass or whispering, to make people feel a calming or tingling sensation.

“What Michelob Ultra trying to do is to create the sensation of what it feels like to drink their beer. This is a new organic beer so that’s kind of the element they’re trying to bring out,” Poggi explained.

AB InBev, which owns Michelob Ultra, is buying a record six and a half minutes of ad time. And while the company plays into a new trend for its new beer, it’s going to tap into nostalgia for Stella Artois.

This commercial shows two characters that came to fame in the 90s: Carrie Bradshaw from HBO’s “Sex and the City” and The Dude from the movie “The Big Lebowski.”

Both characters are known for having a signature drink: Bradshaw drinks Cosmopolitans and The Dude is famous for White Russians. In the ad however, they decide change is good and order a Stella.

So far it looks like the nostalgia play is paying off. “It’s already getting a ton of buzz,” Poggi told CNBC.

On the Money airs on CNBC Saturdays at 5:30 am ET, or check listings for air times in local markets.

Apple’s stock could soar if it bundles media: Morgan Stanley

Apple has made quite a comeback since it reported better-than-feared earnings, but many investors have little faith that the iPhone-maker can return to a $1 trillion market value with slowing smartphone demand.

Morgan Stanley, however, disagrees.

In fact, the bank said life beyond iPhone could extend this week’s 7 percent relief rally to another 27 percent gain from here this year. A slew of new services launching in 2019, including video streaming and a media bundle will be a big driver for Apple, according to Morgan Stanley’s Katy Huberty.

Apple plans to debut its video streaming service this spring, and Morgan Stanley expects the tech giant to introduce a “media bundle,” which contains video streaming, Apple Music and the Texture news app. Huberty said in a note on Thursday that an expansion of Apple’s payments and advertising business is also on the horizon, she added.

The media bundle could add about 2 percentage points annually to services revenue growth through 2025, helping to drive a 5 percent revenue and 12 percent earnings per share (EPS) annual growth rate through 2023, Huberty said.

Apple reported earnings for its December quarter Tuesday that largely fell in line with expectations. The results were better than feared, as the tech giant had lowered revenue projections for the quarter on a sales slowdown in China.

That knocked 10 percent off the stock on the day of the warning. However, shares of Apple have risen more than 7 percent since the release of the earnings.

While Apple’s warning earlier this month of weaker iPhone sales sparked wild concerns about the iPhone-maker’s market saturation and smartphone’s profitability, Morgan Stanley interprets it as stabilization.

“iPhone replacement cycles now stand at mature levels suggesting a stabilization of growth is in the cards over the next year. Management’s commentary that demand improved in January is similarly encouraging,” Huberty said.

The bank set its 12-month price target for Apple at $211, which is 27 percent higher than Friday’s closing price.

In addition, the bank is foreseeing more share repurchases from Apple this year, which could offer additional support to the stock prices.

“After repurchasing $8.8 billion of stock in the December quarter, below the prior $20 billion run-rate, we see a more active buyback program helping re-rate shares, as investors better understand the stabilization path for iPhone and impact of new services,” Huberty said.

– CNBC’s Michael Bloom contributed to this report.

Bystanders of Sears’ downfall will get their day in court Monday

For more than a decade, billionaire Eddie Lampert was arguably able to run Sears like his kingdom.

The hedge fund titan who combined Sears and Kmart in 2005 led Sears Holdings as its chairman, CEO and largest investor. The company had public shareholders and a board of directors, but Lampert had unique discretion guiding its fate. That fate was tortured. Under his stewardship, Sears closed over 3,500 stores, slashed roughly 250,000 jobs and saw its share price fall from $193 a share in 2007 to less than a dollar.

Now, bystanders in that destruction are finally having their day in court. Sears unsecured creditors — people owed money by Sears who are unprotected by collateral — will head to U.S. Bankruptcy Court for the Southern District of New York in White Plains on Monday to protest Lampert and air their grievances. Unsecured creditors are objecting to Lampert’s $5.2 billion deal to buy Sears out of bankruptcy through his hedge fund ESL Investments, the only deal that would stave off liquidation. In a litany of filings that piled up over the past two weeks, they have accused Lampert of everything from “stealing assets” to “years of misconduct” that reads like a “Shakesperean tragedy.”

Lampert, who helped prop up Sears for years through investments from ESL, is Sears’ largest creditor, and its most protected with collateral.

The fate of the 126-year-old chain will be decided upon by Judge Robert Drain in what is expected to be a two-day hearing on Monday, Feb. 4 and Wednesday, Feb. 6. Drain has already shown a propensity for pushing Lampert and Sears to draft a deal that would save jobs, having twice granted the parties more time in order to craft a resolution when it seemed like they had reached a breaking point.

Sears’ unsecured creditors include the Pension Benefit Guaranty Corp., the federal government oversight organization that guarantees Sears’ pension, which is more than $1 billion underfunded. The group is arguing that Lampert’s deal to buy Sears will undo an agreement the PBGC struck with Lampert in 2015. To help fill the pension’s losses, Lampert granted the group a lien and royalty fees from some of its most valuable assets: the Kenmore, Craftsman and Diehard brands.

The PBGC is arguing that as part of Lampert’s deal to buy Sears, Lampert will get back full access to Kenmore and Diehard, leaving it and its 90,000 pensioners empty-handed.

The group also includes mall-owner Simon Property Group, whose CEO David Simon told investors the company is putting Sears in its “rear-view mirror.” The mall owner has said the ability to replace shuttered Sears stores in its malls with higher paying tenants has helped its business. It could, arguably, be in Simon’s best interest for the company to go out of business entirely.

A focus for the unsecured creditor committee, which filed a roughly 100-page objection against Lampert, will be deals Lampert did under his tenure. The group argues his unique control gave Lampert “undue influence to siphon value” on favorable terms. The deals include Sears’ spinoff of Lands’ End in 2014 and transactions with Seritage Growth Properties, a real estate investment trust Lampert created through some Sears’ properties a year later.

Lampert, for his part, will defend himself through his legal team, as he did with ESL’s court filing on Friday. The filing accused Sears’ unsecured creditors of efforts to “poison the well” against ESL, with “page after page of its pleadings with smears and false narratives that are completely irrelevant” to his proposed acquisition of Sears. Lampert has argued that all transactions done under his watch were approved the company’s independent board.

ESL stressed that the offer will save 45,000 jobs and was approved by an independent restructuring committee made up of the independent members on its board, including restructuring experts like William L. Transier and Alan Carr, a former attorney at Skadden, Arps, Slate, Meagher & Flom.

At issue on Monday will also likely be the motivations behind Lampert’s efforts to save Sears. Its unsecured creditors have cast doubt in the altruism of Lampert’s efforts. They say his proposed deal is “nothing but the final fulfillment of a years long scheme to rob Sears and its creditors of assets and employees of jobs while lining Lampert’s and ESL’s own pockets.” They also doubt Sears’ post-bankruptcy viability and its ability to avoid a second trip to bankruptcy court — a fate several other retailers have recently endured.

There is reason for concern.

Under Lampert’s guidance the company hasn’t turned a profit since 2010. The department store industry continues its decline: department stores accounted for 14.5 percent of all North American retail purchases in 1985 but only 4.3 percent last year, according to Neil Saunders, managing director of GlobalData Retail. Sears’ peers, like department stores Bon-Ton and Mervyn’s, have gone out of business while rivals like discount retailers Walmart and Target have poured money Sears and Kmart do not have into their businesses to be among the ones left standing. Those investments include partnerships with other retailers, acquisitions and investments in delivery and online technology.

While this past holiday season was a strong one for the industry as a whole, Sears in December, the most crucial month for a retailer, posted of a loss of $193 million.

People familiar with Lampert’s thinking say he continues to believe in the value of Sears’ assets, like its home services business, as a collective whole, whereby it cant take advantage of its store footprint. Its DieHard and Kenmore labels still represent value and quality to a number of shoppers that grew up with those brands.

Lampert maintains his faith in the power of his ability to convert shoppers from its loyalty program, Shop Your Way, into in-store purchases, a belief that people say drove much of his optimism in the years leading up to Sears’ bankruptcy, despite its continued financial losses. ESL projects Sears will achieve positive earnings growth of $25 million in 2019.

It has said its go-forward business plan will include a continuation of a strategy the store had begun to test in the years leading up to its bankruptcy. Among the things it has tested are smaller stores focused on selling its most popular products like appliances and mattresses.

Lampert also argued in court documents this week he is putting money where his mouth his. ESL is committing more than $300 million in cash to fund the offer, including buying out other senior debt holders, and at least $193 million in credit.

“ESL therefore has much to lose if [its] go forward business plan is not successful,” the documents stated.

WATCH:Sears was the Amazon of the 1930s. Here’s where the retailer is today

Rams coach Sean McVay uses 4 brilliant quotes to drive the team to win

Tonight, 33-year-old Los Angeles Rams coach Sean McVay will make history as the youngest head coach to lead a team to the Super Bowl.

In his two short years with the Rams, McVay has turned a once 4-12 team into a winning organization that recently ended the regular season with a 13-3 record. His success can be attributed not only to the talent of his players and staff, but also to the steps he’s taken to motivate the team.

According to ESPN, anyone who visits the Rams training facility will see four key phrases posted on the walls:

1. “The standard is the standard.”

2. “Situational masters.”

3. “We not me.”

4. “Our rule — be on time.”

The coach says the purpose of these phrases — referred to as “McVayisms” — is to create a culture where you have “core values and beliefs that you think are consistent with the things you want to represent.”

Punter John Hekker says that McVay uses these phrases so often that “every player regurgitates the stuff,” be it around the locker room or in interviews with the media. Center John Sullivan says that he repeats some of the sayings so often that he’s even brought them into his own household.

“My son knows, ‘We not me’ and ‘the standard is the standard,’ and my wife hears that a lot,” he told ESPN.

While mottoes like “we not me” and “our rule — be on time,” are easy enough to grasp, some of McVay’s other sayings are a bit harder to understand if you’re not part of the team.

Safety John Johnson III says that “the standard is the standard” means “we set the bar and there are no excuse,. “It’s hard to explain!” he says. “You just kind of know from experience.”

Running back Todd Gurley II says that “situational masters” means that in addition to talent, it’s important for a player to understand that “you can beat somebody just by knowing the situations of the game.”

McVay’s motivational phrases have created a culture where expectations are clear. In fact, all-pro defensive tackle Ndamukong Suh told ESPN in October that it’s McVay’s leadership style that ultimately led him to sign a one-year, $14 million contract with the Rams.

France to recognize Guaido if Venezuela’s Maduro does not call vote on Sunday

France will recognize Venezuelan opposition leader Juan Guaido as interim president if Nicolas Maduro does not announce a presidential vote by Sunday night, France’s European affairs minister said.

“If by tonight, (President) Maduro does not commit to organising presidential elections, then France will consider Juan Guaido as legitimate to organize them in his place and we will consider him as the interim president until legitimate elections in Venezuela (take place),” Nathalie Loiseau told LCI television on Sunday.

She dismissed Maduro’s proposal of an early parliamentary election as a “farce”.

Tenson will send people to Sweden, pay them to test ski gear

For skiers, shredding fresh powder in Sweden sounds like a dream. Now one company will actually pay two people to $30 an hour to do it. Outdoor clothing company Tenson is hiring “professional ski gear testers” in Idre Fjäll, Sweden.

The temporary jobs’ primary responsibility is to “enjoy your time in the mountains,” the company says. Simply spend the day skiing and provide Tenson with feedback on its gear.

Selected candidates will get round-trip tickets to Idre Fjäll where they will ski in daily shifts from 9 a.m. to 12 p.m. and 1 pm. to 4 p.m.

Additionally, they will stay in a cabin within walking distance of the slopes and meals and ski rentals will also be provided. The testers will get Tenson ski gear that they can then keep, as well as a four-day SkiPass and eight hours of private skiing lessons. Plus, each tester can bring a friend, all expenses paid.

And you don’t have to be the next Lindsey Vonn, either. Tenson is specifically looking for skiers who are “enthusiastic yet mediocre” to test the gear.

“For over six decades, we’ve been making innovative, functional clothing … worn by the most savage skiers,” the job listing states. “Being serious about our vision to enable the outdoors and making garments for everyone, it’s now time to thoroughly test our gears on the Average Joe skier. And that’s where you come in.”

Tenson’s product development team is looking for someone who can test out its gear from a beginner’s perspective, in order to determine how it fares if you fall on an icy slope or get caught in the chair lift. For that reason, very limited prior experience of skiing is beneficial, but not a requirement, and the right person for the job will simply have a true passion for outdoor activities and the right mindset, says the company.

Applications are due before Feb. 11, and you can apply here.

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