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Frontrunning: November 16

  • U.S. stock futures slip as post-election rally slows (Reuters)
  • Pence Ousts Lobbyists From Transition Team (WSJ)
  • Infighting hits Trump’s foreign policy transition (FT)
  • Trump’s Win and Transition Turmoil Buy Time for FBI Chief Comey (BBG)
  • Elizabeth Warren Sends Donald Trump Letter Criticizing Transition Team’s Wall Street Ties (WSJ)
  • Saudi Arabia set to reveal depth of oil reserves (FT)

Qualcomm Buys NXP For $47 Billion: Biggest Semiconductor Deal Ever

Last night, David Rosenberg pointed out something troubling:  we have just witnessed five multi-billion dollar deals this past week alone — $207 billion globally (AT&T/Time Warner; TD Ameritrade/Scottrade) in what has been the most active announcement list since 1999. We can now add another massive deal to the list: this morning Qualcomm announced it would buy NXP Semiconductors NV for about $47 billion, including debt, as it seeks to expand the reach of its chips from phones to cars.

Five Main Things To Watch In Today's Chinese GDP Report

There is a reason why, when the Chinese Q3 GDP print is revealed shortly, it will be an utterly meaningless indicator - the number is a goalseeked, arbitrary political construct meant to convey not information about the economy, but about Beijing's intentions what it may or may not do in the future. Unfortunately, since it is the only official number to come out of Beijing, hours will be spent debating it for the next few days. As such, here are 5 key things to focus on...

Hangzhou, We Have A Problem: "Over 71% Of New Chinese Loans Went To Fund Mortgages"

Last week, the IMF warned that China's growing debt "posed risks to financial stability." Here's why: new loans in August reached 948 billion yuan ($142 billion), more than double the figure a month before, data from the People's Bank of China showed. And the punchline: over 71% of the loans went to households, mainly to fund mortgages.

Someone Just Placed A Massive Bet That The Solar City, Tesla Deal Fails

Following June's proposal, the merger of kissing-cousins TSLA and SCTY was confirmed in early August. Since then, the market has begun to aggressively price out the probability that the deal goes through as SCTY tumbles relative to SCTY's offer. Even more concerning is the massive bet someone just made that in the options market that the deal will not go through in Q4 as expected.

Tesla, SolarCity Merge In $2.6 Billion Transaction

Concluding a transaction that surprised the world when it was announced one month ago, and which we hope the regulators are poring over as a result of a myrida of "related party transactions", moments ago SolarCity (whose stock is currently halted) announced that Tesla and SolarCity would combine in all-stock deal; in which SCTY stockholders will receive 0.110 Tesla common shares per SCTY share, valuing SCTY common stock at $25.37 per share.

Central Bankers Around The Globle Scramble To Defend Markets: BOE Pledges $345BN; ECB, Others Promise Liquidity

There was a reason why we warned readers two days ago that "The World's Central Bankers Are Gathering At The BIS' Basel Tower Ahead Of The Brexit Result": simply enough, it was to facilitate an immediate response when a worst-cased Brexit vote hit. And that is precisely what has happened today in the aftermath of the historic British decision to exit the EU.  It started, as one would expect, with Mark Carney who said the Bank of England is ready to pump billions of pounds into the financial system as he stands at the front line of Britain’s defense against a Brexit-provoked market crisis.