NEW YORK (Reuters Breakingviews) - If the tech sector is in perpetual party mode, Microsoft is its designated driver. The software giant is vying with retailer Amazon to be the planet’s second-biggest firm by market capitalization, at nearly $730 billion. Its secret is dullness and durability: the predictability of Microsoft’s earnings under boss Satya Nadella has helped the firm’s stock outperform Apple, Alphabet and Facebook over the past five years.
NEW YORK (Reuters Breakingviews) - Amazon is widening its girth. Jeff Bezos’s firm reported first-quarter revenue grew 43 percent year-over-year. Sales have more than doubled in five years, but it’s taking more fixed assets to get there. Amazon now uses property and such with less efficiency than Walmart.
LONDON (Reuters Breakingviews) - After Deutsche Bank accidentally transferred 28 billion euros to a counterparty a few weeks ago, some joked that the payment was a deferred bonus for former CEO Anshu Jain. Four years after his departure, the German lender is still grappling with the global investment banking business that he championed. New boss Christian Sewing’s plan to scale back equities trading, and make cuts in the United States and Asia, finally lays that vision to rest.
HONG KONG (Reuters Breakingviews) - A U.S. squeeze could rally China’s tech sector behind Beijing. Like rival ZTE, Chinese telecommunications equipment giant Huawei could be in trouble over sanctions violations. Beijing, which has long dreamt of self-sufficiency in technology, could enlist help from the likes of Alibaba.
NEW YORK (Reuters Breakingviews) - Facebook’s future could look like Microsoft’s past. Tumbling valuations and regulatory attacks crushed the shares of Bill Gates’ software juggernaut nearly two decades ago. Mark Zuckerberg’s $463 billion social network is growing fast. That’s no reason, though, to assume that Facebook will be immune to the same kind of risks.
NEW YORK (Reuters Breakingviews) - Comcast boss Brian Roberts already made a bid for parts of Twenty-First Century Fox, and failed. Now he has left the door ajar for another lurch. It would be better to walk away.
LONDON (Reuters Breakingviews) - Deals rarely look as good on paper as they do in a chief executive’s head. Comcast’s $31 billion offer for UK satellite broadcaster Sky just about passes financial muster. Investors expecting a higher bid from Rupert Murdoch’s Twenty-First Century Fox, with backing from Walt Disney boss Bob Iger, are betting on the triumph of sentiment over spreadsheet.
LONDON (Reuters Breakingviews) - The world is over-indebted. Global debt totals $164 trillion, or 225 percent of the planet’s GDP, say Vitor Gaspar and Laura Jaramillo of the International Monetary Fund. And in case that number isn’t troubling enough, the Institute of International Finance uses different definitions to reach a debt-to-GDP ratio of 318 percent.
LONDON (Reuters Breakingviews) - Call it the curse of high expectations. In mid-February Tidjane Thiam confidently trumpeted the Swiss bank’s “strong start” to “market-dependant activities” – in other words, trading. Back then, the Credit Suisse boss pointed to an estimated year-on-year increase in net revenue for the first six weeks of the year of more than one-tenth, thanks to increased market volatility. Performance must have trailed off – while the picture looks better in U.S. dollar terms,
HONG KONG (Reuters Breakingviews) - The Trump administration’s decision to ban U.S. companies from selling to the Chinese telecom giant is seriously hurting the company's business. And there’s no easy plan B for ZTE. Also: China has a new way to measure unemployment. Should investors take it seriously?
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