Two centuries apart, two presidents were subjected to presidential subpoenas. During the trials of Aaron Burr, Chief Justice Marshall directed subpoenas at President Jefferson. In response, President Jefferson gave very specific instructions to his U.S. Attorney, George Hay. Here is an excerpt from my new essay:
The President gave his U.S. Attorney a warning: if the Chief Justice “contrary to expectation, proceed to issue any process which should involve any act of force to be committed on the persons of the [Executive] or heads of [departments], I must desire you to give me instant notice.” In such a case, the U.S. Attorney should “advise the [U.S.] marshal on [the Chief Justice’s] conduct, as he will be critically placed between us.” Jefferson wrote that the “safest way” for the marshal “will be to take no part in the exercise of any act of force ordered in this case.” Why? “[T]he powers given to the [Executive] by the [Constitution] are sufficient to protect the other branches from judiciary usurpation of preeminence, & every individual also from judiciary vengeance.” Jefferson continued that “the marshal may be assured of its effective exercise to cover him.” After issuing this threat, Jefferson expressed his “hope . . . that the discretion of the C. J. will suffer this question to lie over for the present.” Indeed, at the “ensuing session of the legislature,” Jefferson noted, Congress should consider legislation that would “giv[e] to individuals the benefit of the testimony of the [Executive] functionaries in proper cases, without breaking up the government.” Jefferson expressed his hope that Marshall would not “assume to divide his court and procure a truce at [last] in as critical a conjuncture.”
Later, Jefferson wrote:
He was indignant at Marshall: “these whole proceedings will be laid before Congress that they may decide, whether the defect has been in the evidence of guilt, or in the law, or in the application of the law, and that they may provide the proper remedy for the past & the future.” In other words, the record should be preserved to form the basis of articles of impeachment against the Chief Justice. Despite his bluster, there is no record that Jefferson actually sought to impeach Marshall based on the Burr case.
Last week, President Trump took to Twitter in response to Trump v. Vance. He tweeted:
The Supreme Court sends case back to Lower Court, arguments to continue. This is all a political prosecution. I won the Mueller Witch Hunt, and others, and now I have to keep fighting in a politically corrupt New York. Not fair to this Presidency or Administration!
We have a totally corrupt previous Administration, including a President and Vice President who spied on my campaign, AND GOT CAUGHT…and nothing happens to them. This crime was taking place even before my election, everyone knows it, and yet all are frozen stiff with fear….
….for another President. This is about PROSECUTORIAL MISCONDUCT. We catch the other side SPYING on my campaign, the biggest political crime and scandal in U.S. history, and NOTHING HAPPENS. But despite this, I have done more than any President in history in first 3 1/2 years!
The New York Timesreported that President Trump felt betrayed that his appointees voted against him.
Like his predecessors, Mr. Trump was unhappy with the rulings, although aides sought to calm him by assuring him that he could continue fighting in lower courts. But he expressed deep anger at Justices Gorsuch and Kavanaugh, seeing their votes as a betrayal, according to a person familiar with his reaction.
But the two justices only followed in the footsteps of their predecessors by rejecting the president who put them on the court. While each of them has generally sided with Mr. Trump since taking office, in this case they drew a line. Neither is personally close to Mr. Trump nor is either thought to be much of an admirer of the president, so some saw the decision as a way to distance themselves.
Lee Epstein described Gorsuch and Kavanaugh, plus the Chief, as the Court’s “soft middle.”
The separate concurrence in Vance from Justices Kavanaugh and Gorsuch warrants a more careful study. In due course.
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From Judge Alvin K. Hellerstein’s opinion last week in Cojocaru v. CUNY(S.D.N.Y.):
Claudia Cojocaru and Naomi Haber (collectively, “Plaintiffs”) brought this suit alleging that several professors, Defendants Ric Curtis, Anthony Marcus, Leonardo Dominguez, and Barry Spunt (collectively, the “Individual Defendants”), subjected them to gender discrimination, retaliation, and for some Individual Defendants, gender-based violence. They further allege that their university, City College of New York d/b/a John Jay College of Criminal Justice (“John Jay”), failed to investigate properly and take corrective action.
Defendants Curtis, Dominguez, and Spunt (collectively, the “Counterclaim Defendants”) brought counterclaims for defamation, and Curtis brought an additional counterclaim for tortious interference with contract and business relations. Plaintiffs move to dismiss the counterclaims….
Plaintiffs were undergraduate students at John Jay, Cojocaru, between 2012 and 2014, and Haber, between 2013 and 2017. Cojocaru also served as an adjunct professor from 2017 to 2019. During Plaintiffs’ time at John Jay, Defendants Curtis, Marcus, and Spunt were professors, and Defendant Dominguez was an adjunct professor.
The offices of Curtis, Marcus, and Dominguez were located in a suite professors called the “Swamp.” In the Swamp, professors allegedly referred to students using offensive terms like “bitch” and “slut,” mocked students who were victims of sexual violence, made sexual comments about students, and openly sold and used illegal drugs. Plaintiffs claim that on multiple occasions they were subjected to assaults and/or unwanted sexual advances by the Individual Defendants. For example, according to Plaintiffs’ Amended Complaint, Curtis encouraged Cojocaru to drink alcohol before sexually assaulting her, Spunt groped Cojocaru, Marcus jumped onto a bed with Cojocaru and punched her multiple times, Curtis tried to pressure Haber into having sex with other professors, Curtis and Dominguez groped Haber, and Marcus raped Haber….
In 2018, Plaintiffs filed complaints with John Jay’s Title IX office …. Plaintiffs say the resulting investigation was biased, incomplete, and marred by improper conduct, and caused Cojocaru to suffer trauma, causing Cojocaru’s psychiatrist to recommend that she stopped sitting for in-person interviews during the investigation. The complaint alleges that John Jay officials said they would accommodate Cojocaru but then said that her failure to appear for interviews damaged her credibility. At the conclusion of the investigation, John Jay announced that it would initiate disciplinary procedures to terminate the Individual Defendants.
In the Amended Complaint, Plaintiffs bring claims against John Jay for gender discrimination and retaliation …. [and] for disability discrimination …. Plaintiffs bring claims against all Individual Defendants for aiding and abetting gender discrimination in violation of the NYSHRL and NYCHRL; against Curtis, Marcus, and Dominguez for violation of the Gender Motivated Violence Act (“GMVA”); and against Curtis, Spunt, and Dominguez for retaliation in violation of the NYSHRL and NYCHRL.
In their respective answers to the Amended Complaint, Curtis, Dominguez, and Spunt deny Plaintiffs’ allegations and bring counterclaims against Plaintiffs. The Counterclaim Defendants say that Plaintiffs have initiated sexual conversations with professors, that Cojocaru has a long history of making complaints about others in academia, and that Plaintiffs had ulterior motives to fabricate allegations.
All three Counterclaim Defendants bring a claim for defamation, libel, and slander per se against Plaintiffs in connection with an interview they gave to the New York Post. The interview resulted in an article published on September 22, 2018 (the “Article”), which was titled “College professors allegedly sold drugs, ‘pimped’ out students.”
The Article contained many of the same accusations as those in the Amended Complaint, including that professors sexually assaulted Plaintiffs and encouraged them to have sex with other professors. In his first counterclaim, Curtis also highlights that Plaintiffs repeated similar allegations in meetings with the New York City Police Department’s Special Victims Unit, the New York County District Attorney’s sex crimes unit, and the New York State Inspector General’s Office, and later in an additional interview with the New York Post. The second New York Post interview resulted in an article titled “Professors accused of pimping out students got nearly $500K to study prostitution.” …
Additionally, Curtis brings a second counterclaim against Plaintiffs for defamation, libel, and slander per se in connection with Plaintiffs’ social media posts. On Instagram and Twitter, Cojocaru allegedly made statements such as “serial sexual predator and fake PhD gets to be suspended without pay while his victims struggle to make ends meet.” In reaction to a news story about Jeffrey Epstein, Cojocaru wrote, “We only have to look at cases where men in positions of power gain trust-men like catholic priests, university professors …. These men have power and privileges, complete with a network of enablers and accomplices, shielding them from accountability for decades. Some even have institutional legitimacy, like the disgraced @JohnJayCollege professors.”
Finally, Curtis brings a counterclaim against Plaintiffs for tortious interference with contractual and business relations. He alleges that Plaintiffs’ false accusations led John Jay to suspend him and commence termination proceedings, in breach of his contractual, business, and professional relationship with John Jay and the City University of New York….
The court largely allowed the counterclaims to go forward, in particular mostly concluding that the statements were potentially actionable factual assertions and not pure opinions:
I hold that Counterclaim Defendants sufficiently plead that the vast majority of Plaintiffs’ alleged statements are statements of fact, or at worst statements of mixed opinion [i.e., statements of opinion that appear to be based on implied statements of fact -EV], that are subject to a defamatory meaning.
Haber’s alleged statements that Curtis encouraged her to have sex with other professors is an objective assertion that is provable as either true or false and whose meaning is readily understandable. Statements characterizing Counterclaim Defendants’ role in the alleged misconduct, describing the Swamp using terms like “deprav[ed]” and “toxic,” and comparing John Jay professors to individuals involved in the Jeffrey Epstein case are also actionable. In context, a reader would take these statements to imply sexual abuse, harassment, and other forms of misconduct that are either described in the New York Post article or undisclosed but known to the speakers…. “[O]pinions based on false facts are actionable against a defendant who had knowledge of the falsity or probable falsity of the underlying facts.” … [S]tatements of mixed opinion are actionable because of “the implication that the speaker knows certain facts, unknown to [her] audience, which support his opinion and are detrimental to the person about whom he is speaking[.]” …
The only alleged statements that are not actionable are Haber’s alleged statements that her experience at John Jay made her suicidal and that the professors “killed [her] spiritually in a way.” These statements reflect her reaction to events. Additionally, the latter statement is not susceptible to a precise meaning and is not capable of being proven as true or false.
Counterclaim Defendants sufficiently plead that all the alleged defamatory statements constitute defamation per se [as to which] {“the law presumes that damages will result, and they need not be alleged or proven”}. Statements that can constitute defamation per se are “statements (i) charging plaintiff with a serious crime; (ii) that tend to injure another in his or her trade, business or profession; (iii) that plaintiff has a loathsome disease; or (iv) imputing unchastity to a woman.”
Many of Plaintiffs’ challenged statements concern acts of violence or the sale of drugs. These statements “charg[e] plaintiff with a serious crime.” The remaining statements concern other forms of misconduct toward students or poor academic integrity. When directed at a group of professors, those statements tend to injure the Counterclaim Defendants in their profession.
The court also allowed the interference with contract and business relations counterclaim to go forward, because it too was based on claims of “maliciously fabricated allegations” by plaintiffs. The court did not have occasion to decide, at this point, what to do with the plaintiffs’ affirmative claims against the defendants.
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From Judge Alvin K. Hellerstein’s opinion last week in Cojocaru v. CUNY(S.D.N.Y.):
Claudia Cojocaru and Naomi Haber (collectively, “Plaintiffs”) brought this suit alleging that several professors, Defendants Ric Curtis, Anthony Marcus, Leonardo Dominguez, and Barry Spunt (collectively, the “Individual Defendants”), subjected them to gender discrimination, retaliation, and for some Individual Defendants, gender-based violence. They further allege that their university, City College of New York d/b/a John Jay College of Criminal Justice (“John Jay”), failed to investigate properly and take corrective action.
Defendants Curtis, Dominguez, and Spunt (collectively, the “Counterclaim Defendants”) brought counterclaims for defamation, and Curtis brought an additional counterclaim for tortious interference with contract and business relations. Plaintiffs move to dismiss the counterclaims….
Plaintiffs were undergraduate students at John Jay, Cojocaru, between 2012 and 2014, and Haber, between 2013 and 2017. Cojocaru also served as an adjunct professor from 2017 to 2019. During Plaintiffs’ time at John Jay, Defendants Curtis, Marcus, and Spunt were professors, and Defendant Dominguez was an adjunct professor.
The offices of Curtis, Marcus, and Dominguez were located in a suite professors called the “Swamp.” In the Swamp, professors allegedly referred to students using offensive terms like “bitch” and “slut,” mocked students who were victims of sexual violence, made sexual comments about students, and openly sold and used illegal drugs. Plaintiffs claim that on multiple occasions they were subjected to assaults and/or unwanted sexual advances by the Individual Defendants. For example, according to Plaintiffs’ Amended Complaint, Curtis encouraged Cojocaru to drink alcohol before sexually assaulting her, Spunt groped Cojocaru, Marcus jumped onto a bed with Cojocaru and punched her multiple times, Curtis tried to pressure Haber into having sex with other professors, Curtis and Dominguez groped Haber, and Marcus raped Haber….
In 2018, Plaintiffs filed complaints with John Jay’s Title IX office …. Plaintiffs say the resulting investigation was biased, incomplete, and marred by improper conduct, and caused Cojocaru to suffer trauma, causing Cojocaru’s psychiatrist to recommend that she stopped sitting for in-person interviews during the investigation. The complaint alleges that John Jay officials said they would accommodate Cojocaru but then said that her failure to appear for interviews damaged her credibility. At the conclusion of the investigation, John Jay announced that it would initiate disciplinary procedures to terminate the Individual Defendants.
In the Amended Complaint, Plaintiffs bring claims against John Jay for gender discrimination and retaliation …. [and] for disability discrimination …. Plaintiffs bring claims against all Individual Defendants for aiding and abetting gender discrimination in violation of the NYSHRL and NYCHRL; against Curtis, Marcus, and Dominguez for violation of the Gender Motivated Violence Act (“GMVA”); and against Curtis, Spunt, and Dominguez for retaliation in violation of the NYSHRL and NYCHRL.
In their respective answers to the Amended Complaint, Curtis, Dominguez, and Spunt deny Plaintiffs’ allegations and bring counterclaims against Plaintiffs. The Counterclaim Defendants say that Plaintiffs have initiated sexual conversations with professors, that Cojocaru has a long history of making complaints about others in academia, and that Plaintiffs had ulterior motives to fabricate allegations.
All three Counterclaim Defendants bring a claim for defamation, libel, and slander per se against Plaintiffs in connection with an interview they gave to the New York Post. The interview resulted in an article published on September 22, 2018 (the “Article”), which was titled “College professors allegedly sold drugs, ‘pimped’ out students.”
The Article contained many of the same accusations as those in the Amended Complaint, including that professors sexually assaulted Plaintiffs and encouraged them to have sex with other professors. In his first counterclaim, Curtis also highlights that Plaintiffs repeated similar allegations in meetings with the New York City Police Department’s Special Victims Unit, the New York County District Attorney’s sex crimes unit, and the New York State Inspector General’s Office, and later in an additional interview with the New York Post. The second New York Post interview resulted in an article titled “Professors accused of pimping out students got nearly $500K to study prostitution.” …
Additionally, Curtis brings a second counterclaim against Plaintiffs for defamation, libel, and slander per se in connection with Plaintiffs’ social media posts. On Instagram and Twitter, Cojocaru allegedly made statements such as “serial sexual predator and fake PhD gets to be suspended without pay while his victims struggle to make ends meet.” In reaction to a news story about Jeffrey Epstein, Cojocaru wrote, “We only have to look at cases where men in positions of power gain trust-men like catholic priests, university professors …. These men have power and privileges, complete with a network of enablers and accomplices, shielding them from accountability for decades. Some even have institutional legitimacy, like the disgraced @JohnJayCollege professors.”
Finally, Curtis brings a counterclaim against Plaintiffs for tortious interference with contractual and business relations. He alleges that Plaintiffs’ false accusations led John Jay to suspend him and commence termination proceedings, in breach of his contractual, business, and professional relationship with John Jay and the City University of New York….
The court largely allowed the counterclaims to go forward, in particular mostly concluding that the statements were potentially actionable factual assertions and not pure opinions:
I hold that Counterclaim Defendants sufficiently plead that the vast majority of Plaintiffs’ alleged statements are statements of fact, or at worst statements of mixed opinion [i.e., statements of opinion that appear to be based on implied statements of fact -EV], that are subject to a defamatory meaning.
Haber’s alleged statements that Curtis encouraged her to have sex with other professors is an objective assertion that is provable as either true or false and whose meaning is readily understandable. Statements characterizing Counterclaim Defendants’ role in the alleged misconduct, describing the Swamp using terms like “deprav[ed]” and “toxic,” and comparing John Jay professors to individuals involved in the Jeffrey Epstein case are also actionable. In context, a reader would take these statements to imply sexual abuse, harassment, and other forms of misconduct that are either described in the New York Post article or undisclosed but known to the speakers…. “[O]pinions based on false facts are actionable against a defendant who had knowledge of the falsity or probable falsity of the underlying facts.” … [S]tatements of mixed opinion are actionable because of “the implication that the speaker knows certain facts, unknown to [her] audience, which support his opinion and are detrimental to the person about whom he is speaking[.]” …
The only alleged statements that are not actionable are Haber’s alleged statements that her experience at John Jay made her suicidal and that the professors “killed [her] spiritually in a way.” These statements reflect her reaction to events. Additionally, the latter statement is not susceptible to a precise meaning and is not capable of being proven as true or false.
Counterclaim Defendants sufficiently plead that all the alleged defamatory statements constitute defamation per se [as to which] {“the law presumes that damages will result, and they need not be alleged or proven”}. Statements that can constitute defamation per se are “statements (i) charging plaintiff with a serious crime; (ii) that tend to injure another in his or her trade, business or profession; (iii) that plaintiff has a loathsome disease; or (iv) imputing unchastity to a woman.”
Many of Plaintiffs’ challenged statements concern acts of violence or the sale of drugs. These statements “charg[e] plaintiff with a serious crime.” The remaining statements concern other forms of misconduct toward students or poor academic integrity. When directed at a group of professors, those statements tend to injure the Counterclaim Defendants in their profession.
The court also allowed the interference with contract and business relations counterclaim to go forward, because it too was based on claims of “maliciously fabricated allegations” by plaintiffs. The court did not have occasion to decide, at this point, what to do with the plaintiffs’ affirmative claims against the defendants.
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The decision comes amid mounting pressure from corporate sponsors and the national emphasis on the discussion of race…
On Monday morning, the Washington Redskins will announce officially that they are changing their team name. Since July 3, the team has been executing a “thorough review” of the their controversial moniker.
Last week, Coach Ron Rivera said he hoped the new name would be in place ahead of the 2020 NFL season. Though it will not be revealed today, the team’s new name could be disclosed within the next two weeks.
According to the Washington Post, the team’s new name, which was selected by team owner Daniel Snyder as well as Coach Rivera, is bound up in a trademark fight at present.
The decision to change the team’s nearly nine-decade-old name stems from heightened criticism of the franchise by corporate sponsors, including FedEx, which is the franchise’s top sponsor and owner of the team stadium’s naming rights. In early July, FedEx asked the team to change its name, and later told Snyder the company would remove its name from the stadium if the team name did not change.
PepsiCo, Nike, and Bank of America made similar demands. Snyder and Rivera reportedly began discussing a name change toward the end of May, and the national discussion surrounding race picked up steam.
via ZeroHedge News https://ift.tt/302jUQ8 Tyler Durden
China Announces Retaliatory Sanctions On Marco Rubio, Ted Cruz And Other Top US Senators Tyler Durden
Mon, 07/13/2020 – 08:11
China announced sanctions against several key US politicians in retaliation for measures announced by the Trump administration last week to punish senior Chinese officials over Beijing’s human rights abuses against minority Uighur Muslims, reported Reuters.
Chinese Foreign Ministry spokeswoman Hua Chunying told reporters at a press conference Monday that effective immediately, Beijing will sanction four top US officials.
Hua said, “corresponding sanctions” were applied to Republican Senators Marco Rubio and Ted Cruz, US Representative Chris Smith, Ambassador at Large for International Religious Freedom Sam Brownback, and the Congressional-Executive Commission on China.
“The US actions seriously interfere in China’s internal affairs, seriously violate the basic norms of international relations and seriously damage Sino-U.S. relations,” she said during the briefing adding that “China will make further responses based on how the situation develops,” though limited details were given on what the sanctions would entail.
The tit-for-tat diplomatic spat between the US and China comes days after Washington imposed travel bans on Chinese Communist Party (CCP) officials for their involvement in restricting foreigners’ access to Tibet. Shortly after, China responded by issuing visa restrictions on Americans for the region.
Last week, Chinese Foreign Ministry spokesman Zhao Lijian told reporters in Beijing: The US “should stop going further down the wrong path to avoid further harming China-U.S. relations and communication and cooperation between the two countries.”
Sino-US relations have plunged to their lowest point in decades since the trade war began, amid the coronavirus pandemic, Hong Kong debacle, Taiwan tensions and fresh hostilities in the South China Sea.
President Trump announced late last week a phase two trade deal with China is “unlikely,” suggesting relations between both countries will plunge further.
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With futures flat for much of the overnight session, markets needed that extra oomph to start the week and push them above a key psychological level, and they got that after news that Pfizer and German biotech BioNTech SE were granted fast track designation by the FDA for two of the companies’ four vaccine candidates against the coronavirus. The news, which is purely procedural and was expected all along, was misinterpreted by the market as if the two companies have a promising virus vaccine, and sent Pfizer shares 2%, while BioNTech jumped 5%. More importantly, the news was enough to push Eminis up more than 21 point and above 3,200 which will surely help the market’s mood ahead of tomorrow’s official start of Q2 earnings which are expected to be the worst since the financial crisis.
In corporate news, Pepsi kicked off the second-quarter earnings season on a bright note, gaining over 2% as it benefited from a surge in at-home consumption of salty snacks such as Fritos and Cheetos during lockdowns, while a multi-billion dollar semiconductor deal also lifting the mood. Analog Devices rose 0.9% in premarket trading after it confirmed a Sunday report from the WSJ, offering to buy peer Maxim Integrated Products Inc for $20.91 billion in an all-stock deal. Maxim shares jumped 17%.
The renewed covid optimism and strong results offered some cheer as investors are bracing for what could be the sharpest drop in quarterly earnings for S&P 500 firms since the financial crisis, with Goldman expected a 60% drop in Q2 EPS.
Results from big banks will be in focus this week. The April-June reports will reveal the extent of the damage wreaked by the coronavirus-induced lockdowns on corporate profits. With a record jump in cases in the United States and some other hotspots around the world, analysts have predicted a return to S&P 500 earning s growth only by 2022. Recent economic data, however, has pointed to a revival in business activity, helping the Nasdaq clinch its sixth record close in seven weeks on Friday as broader markets rose on positive data from Gilead’s potential COVID-19 treatment.
Earlier in the session, Asian stocks gained, led by materials and industrials, after falling in the last session. Markets in the region were mixed, with Japan’s Topix Index rising, and Singapore’s Straits Times Index and Thailand’s SET falling. Amusingly, Beijing appears to be losing control of its stock market bubble, as the Shanghai Composite brushes off another mainland media call for ‘rational’ behavior to gain 1.8%, Shenzhen 2.7% higher.
Trading volume for MSCI Asia Pacific Index members was 42% above the monthly average. The Topix gained 2.5%, with AIT and Nomura System Corp rising the most. The Shanghai Composite Index rose 1.8%, with Xinhu Zhongbao and Flying Technology posting the biggest advances
European markets initially failed to echo Asia’s optimism, with the majority of indexes trading well off opening levels. FTSE MIB underperformed, trading flat after opening ~1.5% higher. Banks, autos and travel names gave back ~1% of gains, having outperformed in early trading. However, as US traders walked in, European share rose alongside US bond yields.
And so, with global stocks trading near their highest since February, focus now turns to whether the profit outlook will back up bullishness fueled by central bank and fiscal policy support. Traders have largely shrugged off new coronavirus outbreaks in some parts of the world, with Florida on Sunday posting the biggest one-day rise in cases since the pandemic began in the U.S., reporting 15,300 new infections. As Bloomberg notes, “there’s reason for optimism even though earnings are estimated to have contracted by more than 40% in the worst quarter since the financial crisis, as analysts upgrade their forecasts for the rest of the year.”
“We think earnings are likely to recover in the second half of the year and excess liquidity will continue to support risk assets,” said Julie Fox at UBS Private Wealth Management. “We see further potential in global equities and think there’s some upside in segments of the market that have underperformed during the crisis.”
In rates, Treasuries were unchanged after trading in a narrow range, the 10Y moving from 0.625% to 0.655% during the European session and within 2bps of Friday’s closing levels, having pared declines as U.S. equity index futures tracked European stocks higher, TSYs outperformed other developed market bonds which were pressured by supply; there’s no Treasury coupon supply this week. Yields so far remain inside Friday’s ranges, which featured multi-month lows for all tenors and a record low for the 5-year. The 10-year yield was little changed at 0.646%, traded at 0.5678% Friday, lowest yield since April 22. German and U.K. 10-year yields were 2bp-3bp cheaper vs U.S., while Japan’s and Australia’s bond markets were pressured by supply. Peripheral spreads traded off session wides as BTPs and PGBs put in a firm bounce off the lows.
In FX, the dollar traded mixed versus its Group-of-10 peers and hovered around 1.13 per euro; most currencies were confined to narrow moves as they consolidated recent trading ranges. The Bloomberg dollar index faded Asia’s losses to trade flat. Cable traded near 1.2600, having printed highs of 1.2666. The Australian dollar was on the top of the table while the New Zealand dollar slipped; asset managers last week increased Aussie long positions to the most since September 2017 and decreased kiwi longs for the first time in a month, Commitments of Traders (COT) reports showed. Norway’s krone fell versus all Group-of-10 peers as oil edged lower ahead of an OPEC+ meeting this week at which the group may announce plans to start tapering historic production cuts even as the coronavirus surges unabated in many parts of the world.
In commodities, crude futures drifted lower, front-month WTI dips below $40 ahead of an OPEC+ meeting at which the group may announce plans to start tapering historic production cuts.
Market Snapshot
S&P 500 futures up 0.2% to 3,183.50
STOXX Europe 600 up 0.3% to 367.88
MXAP up 1.1% to 166.56
MXAPJ up 0.7% to 551.10
Nikkei up 2.2% to 22,784.74
Topix up 2.5% to 1,573.02
Hang Seng Index up 0.2% to 25,772.12
Shanghai Composite up 1.8% to 3,443.29
Sensex down 0.04% to 36,578.49
Australia S&P/ASX 200 up 1% to 5,977.52
Kospi up 1.7% to 2,186.06
German 10Y yield rose 0.4 bps to -0.461%
Euro up 0.06% to $1.1307
Italian 10Y yield rose 0.2 bps to 1.099%
Spanish 10Y yield rose 1.1 bps to 0.424%
Brent futures down 1.4% to $42.65/bbl
Gold spot up 0.5% to $1,808.06
U.S. Dollar Index little changed at 96.61
Top Overnight News from Bloomberg
When the ECB meets this week to review its radical suite of measures to revive the economy, there’s one tool it insists it’ll stay away from: yield curve control
Faced with the prospect of restricted access to U.S. dollars, China’s answer is to get more people to use its own currency instead
The dollar rallied during the March market turmoil due to its haven status, yet ongoing repricing in options may be challenging the idea that a second wave of the pandemic or another black swan event could see similar results
China announced sanctions against U.S. officials including Senators Marco Rubio and Ted Cruz, in a largely symbolic retaliation over legislation intended to punish Beijing for its treatment of ethnic minorities in the Xinjiang region
Boris Johnson’s government will launch a campaign Monday to urge businesses to prepare for the end of the Brexit transition period on Dec. 31, as a survey showed only a quarter of directors said their companies were fully ready
France will unveil “massive” support for youth employment this week and a new broad stimulus plan including tax cuts for companies at the end of August, Finance Minister Bruno Le Maire said
Asian equity markets began the week mostly positive as the region benefitted from the recent tailwinds from Wall St. where encouraging Remdesivir data and outperformance in financials last Friday ahead of upcoming earnings, helped markets shrug off the rising COVID infection numbers to lift all major US indices and helped the Nasdaq to a fresh all-time high. ASX 200 (+1.0%) was led higher by outperformance in utilities and the top-weighted financials sector, as the latter took its cue from its counterpart stateside and as big 4 bank Westpac was buoyed by reports it is mulling divesting over AUD 4bln in non-core wealth assets, while Nikkei 225 (+2.2%) outperformed on a break above the 22,500 level with participants unfazed by the increasing risks associated with the outbreak flare-up in Tokyo. Hang Seng (+0.2%) and Shanghai Comp. (+1.8%) were also positive after the PBoC provided its first liquidity injection following a 2-week hiatus and amid recent better than expected lending data from China. This helped domestic markets shake off the initial tentativeness after local press continued to urge rationality regarding stocks and amid the continued US-China tensions with US President Trump suggesting a Phase 2 trade deal was unlikely at this point and the US State Department warned US citizens in China of increased arbitrary detention, while China had also threatened to impose reciprocal measures if the US insists on moving forward with sanctions. Finally, 10yr JGBs were weaker amid gains in stocks and spillover selling following Friday’s pullback in USTs, while the lack of BoJ presence in the market ahead of its 2-day policy meeting tomorrow, also contributed to the tame demand for bonds.
Top Asian News
Tokyo Virus Numbers Fuel Concern of Spread Beyond Nightclubs
After 133% Rally, SoftBank Investors Bet There’s More Ahead
Netanyahu Ally Calls for Immediate Lockdown to Halt Virus Spread
European equities have kicked the week off on the front-foot (Eurostoxx 50 +0.8%) in an extension of the gains seen last week as markets thus far continue to shrug off the rising global COVID-19 case count whereby the WHO reported a record daily increase of over 230k cases in a 24 hour period over the weekend. From a European perspective, it is worth noting that the WHO stated that the largest increases in cases were seen in the US, Brazil, India and South Africa and therefore a bulk of the focus currently resides outside the continent. Furthermore, some desks have attributed the positive sentiment thus far to mounting hopes ahead of the upcoming EU summit as the bloc continues to negotiate its recovery fund. That said, work is still be done on appeasing the so-called “frugal four” and as such, some have cautioned that a deal might not come until later in the month. Gains in Europe are currently favouring cyclical names with autos, basic resources and travel & leisure names outperforming peers. However, as European indices pullback from earlier session highs, the composition of sector-wide performance could stage a rotation if sentiment deteriorates further. In terms of stock specifics, Akzo Nobel (+4.1%) trade higher after posting a Q2 update, whilst the same can also be said for the likes of DNB (+10.8%) and G4S (+8.7%). To the downside, the main outlier is Atlantia (-15.5%) after Italian PM Conte warned that proposals from the Co. are unsatisfactory thus far and the government will not sacrifice public interest over the Co. Additionally, Ubisoft (-9.0%) also trade lower on the session after undertaking multiple personal changes in response to allegations/accusations of misconduct.
Top European News
EU Carbon Permits Climb to 14-Year High as Bloc Goes Green
G4S Jumps Most Since May; Panmure Notes Security Unit Resilience
Ubisoft Drops After Harassment Reports, Analysts Cut Stock
Sweden’s Alfa Laval Agrees to Buy Neles in $2 Billion Deal
In FX, although the US Dollar has pared some losses and the DXY is holding above 96.500 within 96.387-685 parameters, the Aussie is still outpacing G10 counterparts in wake of a 2nd consecutive Usd/CNY midpoint fixing below the psychological 7.0000 level and a broad upturn in risk sentiment. Aud/Usd is hovering within a 0.6984-41 range ahead of NAB business conditions and confidence overnight, while the Aud/Nzd cross has rebounded through 1.0600 as the Kiwi lags vs its US peer around 0.6560 in advance of NZ CPI data on Wednesday. Note also, a dovish note from ANZ may be weighing on the Nzd as the bank believes that the RBNZ should carefully consider policies to weaken the exchange rate and is keeping all options on the agenda (ie NIRP).
CAD/EUR – The Loonie is also benefiting from the positive risk tone with Usd/Cad meandering from 1.3602 to 1.3556 even though crude prices are softer, while the Euro is just keeping afloat of 1.1300 after topping out ahead of 1.1340 and decent option expiry interest extending to 1.1350 (1 bn).
GBP/CHF/JPY – Sterling ran in to supply at 1.2660+ levels again and faded a fraction shy of Friday’s circa 1.2667 high to form a 2nd consecutive marginally lower peak having hit 1.2670 on July 9, and Cable is now striving to retain the 1.2600 handle as Eur/Gbp bounces from just under 0.8950 towards 0.8975 in the run up to the next round of Brexit talks. Also ahead and a potential Pound mover, 2 separate speeches by BoE Governor Bailey. Elsewhere, the Franc is pivoting 0.9400 against the Greenback and 1.0640 vs the Euro following another sizeable increase in Swiss domestic bank sight deposits on the eve of a speech by SNB chair Jordan. Similarly, the Yen is straddling 107.00 and 121.00 vs the single currency after a loss of safe haven premium, and now eyeing Japanese ip tomorrow for some independent impetus.
SCANDI/EM – Some loss of bullish momentum for the Norwegian Krona as risk appetite wanes and oil drifts, while the Swedish Crown is also apprehensive awaiting CPI on Tuesday. However, the Turkish Lira has pared some declines in wake of better than expected, albeit still bleak ip and a narrower than forecast current account deficit.
In commodities, WTI and Brent have had a downbeat start to the week with both benchmarks posting losses in excess of 1% and WTI Aug’20 future having dropped back below the USD 40/bbl handle. The most recent declines have arisen as sentiment more broadly takes a slight leg lower; albeit, with European and US equity futures still very much in positive territory. Over the weekend there were a number of updates on the crude front firstly, and one of the likely drivers of the morning’s downside, Saudi Arabia and other producers are seen as likely to increase output in August. In light of the easing of COVID-19 lockdown restrictions but the ongoing spread of cases is weighing on these plans. Additionally, desks note that OPEC+ are to begin easing production cuts from August, a measure which would be in-fitting with the current deal. Further clarity on the plans for OPEC+ ahead will arise from Wednesday’s JMMC meeting; although, it is worth bearing in mind the JMMC do not have the power to set policy themselves, they can only make recommendations to the broader OPEC+ members. Elsewhere, a resumption of woes for Libya’s NOC as the force majeure on all oil exports has been reimplemented, after cargoes docked and loaded late last week at Es Sider, due to LNA saying the blockade is to continue. Turning to metals, spot gold is firmer by some USD 10/oz thus far for the session and resides towards the top end of a relatively confined range which has notable seen the lower end drop beneath USD 1800/oz. Price action for the metal has largely been dictated by the mild pullback in general sentiment and broader USD moves.
US Event Calendar
11:30am: Fed’s Williams Discusses Libor
1pm: Fed’s Kaplan Speaks in Webinar Hosted by National Press Club
2pm: Monthly Budget Statement, est. $863.0b deficit, prior $398.8b deficit
DB’s Jim Reid concludes the overnight wrap
I hope you all had a good weekend. At the start of lockdown we decided to buy a swing, slide and climbing frame set for the garden. We thought the kids could make use of it after we’d had a go ourselves. Three and a half months later, and one week after playgrounds reopened here in the U.K., it arrived at the weekend. I’ve never seen the kids so excited. It made me feel less guilty about playing golf where I am pleased to announce that my comeback from the most dreadful run known to man (or woman) continued. In a field of 144 I was just inside the top 10 shooting my handicap and banishing the previous weekend’s third last (ahead of only two octogenarians) to the dustbin. Readers on Friday will now know I shout “back” and “hit” during my swing to maintain rhythm. Apart from confusing my playing partners it seems to be working for now.
In a week ahead as packed as my golf club is at the moment, the main highlight is the EU summit on Friday where leaders will gather to discuss the recovery fund. In addition to this, we’ll also see the ECB, the Bank of Japan and others make their latest monetary policy decisions. Meanwhile, earnings season kicks off, including a number of US financials reporting. Economic data includes China’s Q2 GDP reading along with a number of June releases out from the US.
More on this below but first the weekend news and Asian market developments. Risk has started the week on the front foot with the Nikkei (+1.89%), Hang Seng (+0.92%), Shanghai Comp (+1.27%) and Kospi (+1.52%) all up. Futures on the S&P 500 are up +0.46% and yields on 10y USTs are down -1.4bps. Spot gold and silver prices are up +0.25% and +0.86% respectively.
Coronavirus cases continued to accelerate over the weekend with the US registering average case growth of +1.95% on Saturday and Sunday combined. This is higher than the last 5 weekends average of +1.38%. In terms of states, Texas registered new case growth of +3.66% vs. the last 5 weekend average of 2.71% and in Florida this stood at +5.13% (vs. 4.45%) and California (+2.11%) in line with previous 5 weekends average. The growth rate of new deaths actually declined slightly for the US overall (+0.35% this weekend vs. +0.39% in the previous 5 weekends) but at state level, Texas (+2.16% vs. 0.80%), Florida (+1.69% vs. +0.80%) and Arizona (+3.66% vs. 1.39%) all saw higher death rates even if the pace of fatalities vs cases is still significantly behind that of the first wave.
Meanwhile, New York City, once the epicenter of the US coronavirus outbreak, reported its first day with zero confirmed or probable virus deaths on Sunday since the pandemic began. Elsewhere, Japan’s economy minister, Yasutoshi Nishimura, said that the country needs to remain on high alert for further coronavirus outbreaks as the number of cases with unclear contagion routes increases and added that testing should be strategically and greatly increased. Japan reported 681 new cases on Sunday with Tokyo reporting more than 200 cases for four straight days.
In terms of other weekend news, here in the UK, the Telegraph reported that Chancellor Sunak is planning sweeping Brexit tax cuts to protect the economy. The report added that the Chancellor is also considering an overhaul of planning laws in up to 10 new ‘freeports’ within a year of the UK becoming fully independent from the EU in December. Meanwhile, the FT has reported overnight that the UK is proposing to withhold power to control state aid from its devolved nations when the Brexit transition ends. This could lead to friction with Scotland and Wales. The report added that the proposal, which would give Westminster statutory powers to control policies for the entire UK, is expected to appear in a bill this autumn laying the legal foundations of a new internal market.
In other news, the New York Times reported that OPEC, Russia and other producers are expected to modestly ease the record production cuts in August as coronavirus lockdowns end and demand begins to rise again. A committee of key officials from OPEC and Russia will meet on Wednesday by video conference to discuss their approach to the market. Oil prices are trading c. -1% this morning.
More on this week now. The EU leaders summit in Brussels on Friday and into Saturday will discuss the recovery fund in response to the pandemic, as well as the EU’s new long-term budget. The baseline expectations from our economists (link here ) is that there will be a deal on the recovery fund at this meeting, but it remains a close call. If an agreement weren’t to be reached there, then they still expect one within weeks. It’s worth remembering that there are number of complex issues to be worked out, including the ratio of grants to loans, with the so-called “frugal four” of the Netherlands, Austria, Sweden and Denmark looking for there to be loans rather than grants. Their support for the fund will be necessary as it requires the unanimous approval of the member states.
The ECB a day earlier should be a non event (see DB’s preview here) with maybe some focus on any comments from President Lagarde on the German Constitutional Court, now that the German Bundestag has passed a motion on proportionality. The BoJ meeting on Wednesday should also be a relatively tame affair (see DB’s preview here ). Also in the world of central banks the Canadian, Korean and Indonesian policy makers meet and the Fed release their Beige Book on Wednesday.
Moving on to data releases, the main highlight is likely to be China’s Q2 GDP release on Thursday. Our economists are expecting a notable rebound in GDP growth to +3% year-on-year in Q2, following the -6.8% contraction in Q1. At the same time, there’ll also be the release of retail sales and industrial production for June, with our economists expecting an expansion in retail sales of +0.7% yoy in June (vs. -2.8% in May), and IP growth of +4.5% (vs. +4.4% in May).
Turning elsewhere, the US also has a number of data releases out next week, including an increasing amount of hard data for June. The highlights include the June CPI reading on Tuesday, before the industrial production number on Wednesday, retail sales on Thursday, and housing starts and building permits data on Friday, which should give us a clearer indication of how the economy has performed into the end of the quarter. Meanwhile the U.K. sees a number of data releases, including GDP for May, CPI for June, and unemployment in the three months to May. Another thing to look out for in the UK will be the release of the Office for Budget Responsibility’s Fiscal sustainability Report tomorrow, which will present alternative scenarios for the economy and public finances.
Earnings season kicks slowly into gear as 32 S&P 500 companies report along with a further 57 from the STOXX 600. The highlights include PepsiCo today, JPMorgan, Citigroup and Wells Fargo tomorrow, UnitedHealth Group, ASML, Goldman Sachs, US Bancorp, BNY Mellon on Wednesday, Johnson & Johnson, Netflix, Bank of America, Abbott Laboratories and Morgan Stanley on Thursday and on Friday, there’s Danaher, Honeywell International and BlackRock.
Back to last week, where markets were generally constructive even as the outlook for the virus has continued to worsen in recent weeks, especially in the US and Emerging Markets. The S&P 500 gained +1.76% (+1.05% Friday) on the week, and now sits just under 1.5% away from being flat on the year just as earning season is about to begin. The tech-focused Nasdaq greatly outperformed last week, rallying +4.01% (+0.66% Friday) led primarily by the index’s most heavily weighted stocks. European equities generally underperformed the S&P with the Stoxx 600 gaining a lesser +0.38% (+0.88% Friday) over the five days. Overall European bourses were mixed with the DAX (+0.84%), and FTSE MIB (+0.21%) up on the week, while indices such as the IBEX (-1.11%) and CAC (-0.73%) pulled back. Asian indices were even more disparate as Chinese stocks saw a large rise with the CSI 300 gaining +7.55% but with the Nikkei (-0.07%) and Kospi (-0.10%) largely unchanged over the week.
Core sovereign bonds rose as US 10yr Treasury yields fell -2.5bps (+3.1bps Friday) to finish at 0.645%, while 10yr Bund yields fell -3.3bps (-0.2bps Friday) to -0.47%. In other fixed income, HY cash spreads tightened on both sides of the Atlantic as US HY spreads tightened -4bps (-1bps Friday) and Europe HY tightened -1bps (+2bps Friday).
The dollar fell -0.54% on the week to its lowest weekly close since the first week of March. Against this backdrop and with global yields continuing to fall, gold gained +1.28% (-0.27% Friday). It was the 5th straight weekly gain for the yellow metal and took it to its highest weekly close since 2011. In other metals, copper rose +5.62% on the week to levels last seen in April of last year, while silver gained +3.88% to its highest value since September 2019.
Ahead of this Friday’s summit of EU leaders on the bloc’s long-term budget and the recovery fund, European Council President Michel issued new proposals on Friday that sought to achieve agreement between the member states. These maintained the existing plan to distribute €500bn in grants and €250bn in loans to member states. However, budget rebates would continue for fiscally conservative states such as the Netherlands, and repayments would be brought forward. He also proposed a Brexit reserve of €5bn that would support against “unforeseen consequences” in the member states and sectors most affected.
On the data front, we got French and Italian industrial production for May, both came ahead of forecasts. Italian industrial output rose +42.1% (vs. +24.0% expected) after falling by -20.5% in April. France saw a similar rebound, jumping up +19.6% (vs. +15.4% expected) after falling a nearly identical -20.6% the month prior. We also saw the June PPI reading from the US, where prices fell unexpectedly. PPI fell -0.2% (vs. +0.4% expected) after the month prior saw them rise +0.4%. It was the fourth monthly decline out of the last five.
via ZeroHedge News https://ift.tt/2ZpbT8Q Tyler Durden
Global Coronavirus Cases Top 13 Million As US 7-Day Average Hits Record Highs: Live Updates Tyler Durden
Mon, 07/13/2020 – 07:29
It seems most of the popular tallies of coronavirus cases and deaths are in agreement that the US added only 59,017 (per JHU) or
58,147 (per Worldometer) cases on Sunday, the first day that the number of new cases fell short of 60k since early last week. Worldometer reported 3,414,042 cases at the end of day on Sunday, along with 137,784 deaths after 379 new deaths were confirmed.
While the number of new cases moved back below 60k, despite Florida’s record-smashing new-cases number from Sunday, the number of deaths recorded across the US dipped back below 500. So while the 7-day average for cases climbed to new all-time highs…
…the 7-day average for deaths ticked lower after hitting its highest level since mid-June.
The deceleration in the US helped ease yesterday’s global total, which was below the 200k for the first time in days.
Sunday’s numbers helped push the global case total to 13,049,461, moving above 13 million, the latest important psychological threshold.
Meanwhile, the number of new deaths was below 5k…
…bringing the global death toll to 571,812, as the global death toll draws inexorably nearer to 600k.
As the outbreak intensifies in Australia, China’s Ministry of Foreign Affairs and its embassy in Canberra on Monday have jointly advised Chinese citizens traveling to Australia to exercise caution. However, in addition to the resurgence in COVID-19, they also warned about “racism” and “anti-Chinese sentiment” as Beijing continues to punish Canberra for backing the US in its campaign against Huawei.
Australia, along with the US, is a part of the powerful “Five Eyes” intelligence partnership that China has been desperately seeking to compromise.
With its schools temporarily closed, Hong Kong reported another 52 new cases of coronavirus Monday, including 41 that were locally transmitted, health authorities confirmed. Tokyo just confirmed 119 new infections, sources tell Nikkei, with cases coming in below 120 for the first time in 5 days.
After crossing the 850k case threshold, cementing its status as the third-worst outbreak in the world behind the US and Brazil, India reported yet another record single-day jump in coronavirus cases, with 28,701 new infections reported in the last 24 hours. This brought India’s total to 878,254. The death toll, meanwhile, has climbed to 23,174, up 500 since Sunday morning. Meanwhile, South Korea confirmed 62 new cases, up from 44 a day ago, with total infections reaching 13,479, with 289 deaths.
via ZeroHedge News https://ift.tt/3gUk9Ua Tyler Durden
Chipmaker Analog Devices Agrees To Buy Rival Maxim Integrated In Biggest Deal Of The Year Tyler Durden
Mon, 07/13/2020 – 06:44
A deal that was teased last night by WSJ has just been officially confirmed: semiconductor maker Analog Devices has agreed to buy rival Maxim Integrated Products for roughly $20.91 billion all in stock, for what many M&A experts believe could be the largest deal of the year.
It comes as more semiconductor makers seek scale and more diverse offerings in an ultracompetitive market where Apple just dealt veteran player Intel a major blow by cutting out its chips. As computer chips are implanted in more items from cars to household products – continuing to build on the so-called “Internet of Things”.
According to the terms disclosed in a press release, Maxim stockholders will receive 0.630/share of Analog Devices stock for each share of Maxim common stock they hold when the deal closes.
While Analog’s chips focusing mor eon computing, Maxim’s semiconductors are used in settings from automobiles to health-care, sectors where Analog doesn’t have a large presence. According to WSJ, the deal talks have been ongoing for years. But the time wasn’t right until the present market chaos. Analog has a market value of roughly $46 billion and is based in Norwood, Mass.
Analog Devices, Inc. (Nasdaq: ADI) and Maxim Integrated Products, Inc. (Nasdaq: MXIM) today announced that they have entered into a definitive agreement under which ADI will acquire Maxim in an all stock transaction that values the combined enterprise at over $68 billion2. The transaction, which was unanimously approved by the Boards of Directors of both companies, will strengthen ADI as an analog semiconductor leader with increased breadth and scale across multiple attractive end markets.
Under the terms of the agreement, Maxim stockholders will receive 0.630 of a share of ADI common stock for each share of Maxim common stock they hold at the closing of the transaction. Upon closing, current ADI stockholders will own approximately 69 percent of the combined company, while Maxim stockholders will own approximately 31 percent. The transaction is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes.
“Today’s exciting announcement with Maxim is the next step in ADI’s vision to bridge the physical and digital worlds. ADI and Maxim share a passion for solving our customers’ most complex problems, and with the increased breadth and depth of our combined technology and talent, we will be able to develop more complete, cutting-edge solutions,” said Vincent Roche, President and CEO of ADI.
“Maxim is a respected signal processing and power management franchise with a proven technology portfolio and impressive history of empowering design innovation. Together, we are well-positioned to deliver the next wave of semiconductor growth, while engineering a healthier, safer and more sustainable future for all.”
“For over three decades, we have based Maxim on one simple premise – to continually innovate and develop high-performance semiconductor products that empower our customers to invent. I am excited for this next chapter as we continue to push the boundaries of what’s possible, together with ADI. Both companies have strong engineering and technology know-how and innovative cultures.
Working together, we will create a stronger leader, delivering outstanding benefits to our customers, employees and shareholders,” said Tunç Doluca, President and CEO of Maxim Integrated.
Upon closing, two Maxim directors will join ADI’s Board of Directors, including Maxim President and CEO, Tunç Doluca.
Compelling Strategic and Financial Rationale
Industry Leader with Increased Global Scale: The combination strengthens ADI’s analog semiconductor leadership position with expected revenue of $8.2 billion1 and free cash flow of $2.7 billion1 on a pro forma basis. Maxim’s strength in the automotive and data center markets, combined with ADI’s strength across the broad industrial, communications and digital healthcare markets are highly complementary and aligned with key secular growth trends. With respect to power management, Maxim’s applications-focused product offerings complement ADI’s catalog of broad market products.
Enhanced Domain Expertise & Capabilities: Combining best-in-class technologies will enhance ADI’s depth of domain expertise and engineering capabilities from DC to 100 gigahertz, nanowatts to kilowatts and sensor to cloud, with more than 50,000 products. This will enable the combined company to offer more complete solutions, serve more than 125,000 customers and capture a larger share of a $60 billion total addressable market3.
Shared Passion for Innovation-led Growth: The combination brings together similar cultures focused on talent, innovation and engineering excellence with more than 10,000 engineers and approximately $1.5 billion1 in annual research and development investment. The combined company will continue to be a destination for the most talented engineers in multiple domains.
Earnings Accretion & Cost Savings: This transaction is expected to be accretive to adjusted EPS in 18 months subsequent to closing with $275 million of cost synergies by the end of year two, driven primarily by lower operating expenses and cost of goods sold. Additional cost synergies from manufacturing optimization are expected to be realized by the end of year three subsequent to closing.
Strong Financial Position & Cash Flow Generation: ADI expects the combined company to yield a stronger balance sheet, with a pro forma net leverage ratio of approximately 1.2×4. This transaction is also expected to be accretive to free cash flow at close, enabling additional returns to shareholders.
Timing and Approvals
The transaction is expected to close in the summer of 2021, subject to the satisfaction of customary closing conditions, including receipt of U.S. and certain non-U.S. regulatory approvals, and approval by stockholders of both companies.
Advisors
Morgan Stanley served as lead financial advisor to ADI. BofA Securities also served as a financial advisor. Wachtell, Lipton, Rosen & Katz served as legal counsel.
J.P. Morgan served as exclusive financial advisor to Maxim, and Weil, Gotshal & Manges LLP served as legal counsel.
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