Sprint, T-Mobile sink following report that merger talks are over

• Akin Oyedele
 

• 22h
• 10,688

T-Mobile CEO John Legere.Michael Loccisano/Getty Images for HBO

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• Nikkei reported on Monday that Sprint and T-Mobile planned to end merger talks. 
• SoftBank, the Japanese telecom company that owns Sprint, insisted on retaining a controlling stake after Deutsche Telekom, T-Mobile's owner, showed interest in taking control, the report said.
• Sprint shares were halted for volatility shortly after the news crossed. They plunged by as much as 13% after trading resumed.

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Sprint and T-Mobile shares sank on Monday after Nikkei reported that SoftBank Group planned to end negotiations for a merger of the two wireless carriers.

SoftBank could approach Deutsche Telekom, T-Mobile's owner, as early as Tuesday to propose ending the negotiations, Nikkei reported, though the publication did not specify its source. Deutsche Telekom wanted a controlling stake in the combined company, but SoftBank's board agreed Friday that it preferred to retain control, the report said.

Trading of Sprint, a subsidiary of the Japanese telecom firm SoftBank, was halted for volatility before the shares fell by as much as 13%. T-Mobile fell by as much as 4%. Shares of Verizon and AT&T also dropped.

SoftBank looked into buying T-Mobile as far back as 2014 but backed down after telecom regulators made it clear they would block any acquisition of the fourth-largest US carrier. AT&T struck a $39 billion deal to acquire T-Mobile in 2011 but terminated it after facing the same objections from the Federal Communications Commission and Department of Justice.

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China's economy lost a bit of momentum in October

DAVID SCUTT 

OCT 31, 2017, 12:59 PM

ChinaFotoPress/Getty Images

China’s economy lost momentum in October with activity levels growing at a slower pace than September.

According to China’s National Bureau of Statistics (NBS), the government’s manufacturing purchasing managers index (PMI) fell to 51.6 from 52.4, missing forecasts for a smaller decline to 52.0.

This PMI measures perceived changes in activity levels across China’s manufacturing sector from one month to the next. Anything above 50 signals that activity levels are improving while a reading below suggests they’re deteriorating. The distance away from 50 indicates how quickly activity levels are expanding or contracting.

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So at 51.6, activity levels across the sector improved a slower pace than September.

While below market expectations, it’s hardly a weak result, particularly as activity levels improved at the fastest pace since April 2014.

Activity levels are still improving, at least according to this survey.

As has been the case for several years, larger firms continued to outperform their smaller rivals.

The NBS said the PMI for large manufacturers stood at 53.1, 0.7 points lower than September, although that was still well above the 49.8 and 49.0 readings for medium and smaller-sized firms.

Like the headline PMI, readings above 50 for these subindices points to an improvement from one month earlier.

By activity subindex, production fell from 54.7 to 53.4 while hiring levels declined for a seventh consecutive month, holding steady at 49.0.

Prices for raw materials and finished goods continued to grow at a rapid pace, albeit at a slightly slower level than September.

New orders and new export orders also grew at a slower pace, falling to 52.9 and 50.1 respectively. They previously stood at 54.8 and 51.3.

As a lead indicator, these readings suggest that overall activity levels may slow further in the months ahead.

And, like the manufacturing sector, non-mining sectors of the economy also slowed during the month.

The government’s separate non-manufacturing PMI fell to 54.3 from 55.4, indicating that activity levels improved at a slower pace than the month earlier.

This PMI measures non-industrial areas of the economy, including the performance of the services and construction indices.

By activity subindex, hiring levels fell modestly, continuing the trend seen throughout 2017, while input prices continued to grow faster than prices to consumer, indicating an increase in margin pressures.

New orders from domestic sources slowed, falling to 51.1 from 52.3 in September, although new export orders rebounded after falling in the previous two months, lifting modestly to 50.7 from 49.7.

The NBS said that activity levels for real estate and residential services deteriorated over the month, reflecting attempts from policymakers to cool rampant house price growth in many larger centres.

Activity across the construction sectors also slowed, falling to 58.5, down 2.6 points from September. Still a rapid improvement, but not to the same scale seen in the first half of the year.

Combined, today’s reports suggest that the Chinese economy lost a bit of momentum after a stellar run in September.

Markets will now look to separate China PMI readings from IHS Markit in the coming days for confirmation of the slowdown.

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A key GOP senator who helped sink Obamacare repeal has 2 demands for the tax bill

• Bob Bryan
 

• 17h
• 4,120
 

Sen. Susan Collins of Maine. Alex Wong/Getty Images

• Republican Sen. Susan Collins told Bloomberg that she has two stipulations to support the GOP's tax bill.
• Collins wants the estate tax to remain and no tax cuts for people making $1 million a year.
• The demands could throw a wrench in Republican tax reform negotiations.

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Sen. Susan Collins on Monday said she would have two demands to support the forthcoming Republican tax reform bill.

Collins, a moderate member of the Senate GOP conference, told Bloomberg's Sahil Kapur on Monday that the tax plan should not repeal the estate tax or change tax rates on people making more than $1 million a year.

"I do not believe that the top rate should be lowered for individuals who are making more than $1 million a year," Collins told Bloomberg. “I don’t think there’s any need to eliminate the estate tax."

The estate tax currently applies to inheritances of more than $5.49 million, and that limit will be increased to $5.60 million for individuals in 2018. Despite Republicans' insistence that the repeal is aimed at small businesses and family farms, very few of either pay the tax.

The demands from Collins are important, since Republicans only control 52 seats in the Senate. While the tax bill is set to go through the budget reconciliation process, meaning it only needs 50 votes to pass, Republican leaders can only afford to lose two members of their conference.

Collins voted against various Republican Obamacare repeal bills over the summer and has made it apparent that she is not afraid to vote against leadership's wishes.

Already a handful of Republican senators, most notably Sen. Bob Corker, have raised concernsabout the plan's potential effect on the federal deficit. Sen. Rand Paul said he also had reservations about the distribution of the benefits from the plan.

Despite the demands, Collins told Bloomberg that she hopes to vote for the tax package.

"I hope very much to be able to support a tax reform package," Collins said, but added she can't guarantee she will because she doesn't know "what’s going to be in it."

SEE ALSO: A key homebuilders' group is now opposing the Republican tax plan — and it's a sign of trouble to come

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