GOLDMAN: Big-money investors are dumping stocks at the fastest pace in years

• Akin Oyedele
 

• Oct. 3, 2016, 11:29 PM
• 18,575
 
• 8

Kevin Zamani/Flickr

Mutual funds could sell more stocks than they buy this year for the first time since 2012, making them net sellers, according to Goldman Sachs.

During the second quarter, the big-money managers who pool assets for all kinds of investors dumped the stock market for a third straight quarter, said David Kostin, Goldman Sachs' chief US equity strategist.

"Low levels of equity fund cash and significant outflows from mutual funds drive our mutual fund net equity purchases forecast of -$25 billion in 2016," Kostin wrote in a client note on Friday.

Mutual funds have suffered massive outflows this year. Mutual-fund domestic and foreign outflows totaled $156 billion at the end of September, more than double the total amount in 2015 and the most in any year since 2008, according to Goldman.

The year started with warnings from across Wall Street that investors should expect modest returns from the stock market. Those concerns snowballed midyear when the UK voted to leave the European Union.

Despite weak earnings growth, stocks — measured by the benchmark S&P 500 index — have outpaced many early forecasts and gained nearly 6% this year. But there's still uncertainty around earnings growth, the presidential election, and the impact of higher interest rates.

Goldman Sachs

As with mutual funds, foreign investors are fleeing the market, though their selling slowed from $108 billion of US stocks in the first quarter to $46 billion in the second quarter, according to Kostin.

"We cut our 2016 forecast of foreign investor demand for US equities to -$125 billion from -$50 billion given lower-than-expected demand during 1H and weak US equity returns in the near-term," Kostin wrote.

"However, we expect a slight recovery in foreign investor demand in 2H compared with 1H given low global bond yields and the 3Q equity rally. Uncertainty surrounding the US election represents a downside risk to our forecast."

SEE ALSO: 'A perfect storm:' Here are 50 slides that will get every gold bull psyched up

NOW WATCH: KRUGMAN: The richest Americans should have a tax rate over 70%

h

More: Mutual Funds

Janus and Henderson just surprised the market with a $6 billion transatlantic merger

• Carolyn Cohn, Reuters

• 11h
• 4,774
 
• 1

Bill Gross, the bond guru at Janus.REUTERS/Jim Young

Current Prices

Symbol	Price	+/-	%
HGG	1.81	-0.02	-1.10
JNS	15.69	+1.68	+12.00

Disclaimer

LONDON — The US asset manager Janus Capital and its London-listed rival Henderson Global Investors on Monday said they had agreed to an all-share $6 billion merger, sending Henderson's shares soaring.

The merger will enable the group to cut costs and increase diversification, Henderson CEO Andrew Formica told a media call, and comes as the industry looks to streamline operations to protect margins amid widespread pressure on fees.

"The combined product lineup will be much more balanced and diverse," he said. The combined company would manage more than $320 billion in assets, the firms said.

• Formica told CNBC that bond king Bill Gross, who works at Janus, is "very, very supportive" of the deal. "He sees it as just improving already on the strength of Janus, of what he's already seen since he's been there and he can see with the combination with Henderson can just make it an even stronger and better business."

Henderson and Janus shareholders are expected to own approximately 57% and 43%, respectively, of Janus Henderson Global Investors' shares, with the merger completing in the second quarter of 2017, subject to regulatory approvals.

The combined group will apply for a primary listing in New York, keeping Henderson's Australian listing but delisting in London. Henderson is in the FTSE 250 market segment.

The merger will involve a share exchange in which each Janus share will be exchanged for 4.719 newly issued shares in Henderson, the firms said in a statement.

"We see this as a positive move with complementary asset bases and a very material cost synergy figure," analyst Paul McGinnis at Shore Capital said in a client note.

The firms said they were targeting an annual run rate in net cost synergies of at least $110 million, representing about 16% of the combined group's underlying earnings before interest, taxes, depreciation, and amortization.

Janus' largest shareholder, Dai-ichi Life, supports the merger, the firms said.

The group's headquarters will be in London, Formica said. Talks on the merger began at the beginning of the year and were not affected by the Brexit vote, he added.

Formica will continue in the merged firm as co-CEO, alongside Janus CEO Dick Weil, who will also be co-CEO.

Henderson's shares jumped over 17% on the news.Investing.com

(Reporting by Carolyn Cohn; Editing by Rachel Armstrong and Simon Jessop)

Read the original article on Reuters. Copyright 2016. Follow Reuters on Twitter.

MORE FROM REUTERS:

• U.S. to meet target of admitting 10,000 Syrian refugees: White House
• Fight for Syria's Aleppo exposes limits of Russian air power
• European privacy regulators to scrutinize WhatsApp privacy switch
• Transplant recipients who resume smoking have shorter survival
• Swiss air force jet goes missing, search launched

SEE ALSO: Bill Gross is flying solo again

DON'T MISS: Bill Gross' biggest investor at Janus is Bill Gross

More: Reuters Company News Reuters Henderson Global Investors Janus Capital 

The EU is threatening to fine Google for violating antitrust regulations

• Foo Yun Chee, Reuters

• Oct. 1, 2016, 6:28 PM
• 3,413
 
• 6

Google CEO Sundar Pichai. Justin Sullivan/Getty Images

EU antitrust regulators plan to order Alphabet's Google to stop paying financial incentives to smartphone makers to pre-install Google Search exclusively on their devices and warned the company of a large fine, an EU document showed.

The document, running to more than 150 pages, was sent to complainants last week for feedback. Google received a copy in April in which the European Commission accused it of using its dominant Android mobile operating system to shut out rivals.

The EU competition enforcer in its charge sheet, known as a statement of objections, said it planned to tell the U.S. technology giant to halt payments or discounts to mobile phone manufacturers in return for pre-installing Google's Play Store with Google Search.

The regulators also want to prevent Google from forcing smartphone makers to pre-install its proprietary apps if this restricts their ability to use competing operating systems based on Android.

Google "cannot punish or threaten" companies for not complying with its conditions, according to the document seen by Reuters.

The Commission's investigation followed a complaint by FairSearch, a lobby group supported by companies that want to ensure they are not disadvantaged by search engine market dominance, in March 2013.

Google could face a large fine because the anti-competitive practices, which started from January 2011, are still ongoing, the document said.

"The Commission intends to set the fine at a level which will be sufficient to ensure deterrence," it said.

The penalty could be based on revenue generated from AdWords clicks by European users, Google Search product queries, Play Store apps purchases and AdMob's in-app advertisements.

Commission spokesman Ricardo Cardoso declined to comment. Google which has previously denied any wrongdoing, did not immediately reply to a request for comment.

Separately, the Commission is investigating whether Google favors its own shopping service over those of rivals, and could also fine it in that case.

Google may have to rank rival comparison shopping services in the same way as its own services, the charge sheet sent in July said. The document, close to 150 pages, was heavily edited, with large sections of confidential information redacted by Google.

The Commission said it would decide at a later stage whether to let Google charge competitors for displaying their services prominently, with the amount corresponding to Google's operating cost or a nominal amount based on the lowest reserve price for AdWords which is currently 0.01 euro per click.

Read the original article on Reuters. Copyright 2016. Follow Reuters on Twitter.

MORE FROM REUTERS:

• U.S. to meet target of admitting 10,000 Syrian refugees: White House
• Fight for Syria's Aleppo exposes limits of Russian air power
• European privacy regulators to scrutinize WhatsApp privacy switch
• Transplant recipients who resume smoking have shorter survival
• Swiss air force jet goes missing, search launched

SEE ALSO: Google might release a new laptop and tablet that run on a completely new operating system

NOW WATCH: Columbia law professor argues that 'privacy has been privatized'

h

More: Reuters Google Anti-trust European Union

What Brexit? — Britain's manufacturing sector is going wild

• Will Martin
 

• 10h
• 1,308
 
• 3
 

Pool / Pool

Britain's manufacturing sector is going crazy, rising to a near-two and a half year high, according to the latest data released by IHS Markit on Monday morning.

IHS Markit's growth data shows that Britain's factories recorded activity of 55.4 in September, up a full two points from August's 53.4 reading, and marking a level not seen since June 2014. Forecasters had the projected that the sector would grow more slowly in the month, predicting a reading of 52.1.

The purchasing managers index (PMI) figures from IHS Markit are given as a number between 0 and 100.

Anything above 50 signals growth, while anything below means a contraction in activity — so the higher the number is, the better things look for the UK.

Speaking about the data, IHS Markit senior economist Rob Dobson said:

"The rebound over the past two months has been encouragingly strong, and puts the sector on course to provide a further positive contribution to GDP in the third quarter.

"The weak sterling exchange rate remained the prime growth engine, driving higher new orders from Asia, Europe, the USA and a number of emerging markets. The domestic market is also still supportive of growth, especially for consumer goods."

David Noble, CEO of CIPS, which helps compile the survey, added:

"This month, manufacturing made up lost ground since the EU referendum, with a robust rise in new orders and production expanding at a pace not seen for over two years.

"It was largely domestic orders that fuelled the rise in overall activity, although the weaker pound also bolstered export orders which increased at the steepest rate for 32 months."

Here is IHS Markit's chart, showing the huge surge over the last two months:

IHS Markit

The numbers are obviously good news for those worried about the state of the British economy in the post-referendum landscape, but should be taken with a pinch of salt given the boost to exports given by the weak pound, and the fact that manufacturing accounts for just under 10% of UK GDP. The services sector by contrast, makes up more than three-quarters of GDP.

As IHS Markit's release notes: "Conditions in the UK manufacturing sector continued to improve at the end of the third quarter. Rates of expansion in output and new orders accelerated further, rising at rates rarely achieved since the middle of 2014. The domestic market remained a prime driver of new business wins, while the weaker sterling exchange rate drove up new orders from abroad."

Earlier on Monday, eurozone manufacturing PMI data showed that the continent's manufacturers are enjoying strong growth right now. Markit's manufacturing PMI for the eurozone grew to 52.6 from 51.7 in September, matching the earlier flash estimate.

The pound moved marginally higher against the dollar on the news, but remains depressed on the day after Prime Minister Theresa May told the Conservative party conference that she plans to trigger Article 50 by the end of March next year:

Investing.com

NOW WATCH: STIGLITZ: There are so many ways that Trump is wrong about the economy

h

More: PMIs Markit PMI Markit Data Brexit 

BREXIT: Theresa May will trigger Article 50 before the end of March 2017

• Reuters and Rob Price

• Oct. 2, 2016, 4:12 AM
• 1,507

Britain's Prime Minister May leaves 10 Downing Street in central London. Thomson Reuters

We've finally got some more hard information about when Britain will begin the two-year process to leave the European Union.

Prime Minister Theresa May said on The Andrew Marr Show on Sunday that the UK will trigger Article 50,which will kick off the formal process to leave the 28-nation bloc, before "the end of March next year."

The announcement comes afterMay told The Sunday Times in an interview that the UK will not wait for German elections due in September 2017 before triggering Article 50.

May, who will give a speech to members of the ruling Conservative Party on Sunday, also ruled out an early general election, saying it would cause "instability", but said she would repeal the 1972 European Communities Act, which took Britain into what is now the EU.

"We will introduce, in the next Queen's speech, a Great Repeal Bill that will remove the European Communities Act from the statute book," she told the newspaper.

Overturning the act will take legal effect once Britain formally leaves the EU, the newspaper reported.

The timeline for invoking Article 50 has been hotly debated. Is it better to pull the trigger as soon as possible, before European attitudes harden? Or is it more prudent to wait until everything is more rigourously prepared? Once it is invoked, the negotiations between Britain and the EU over the former's departure can begin in earnest. If no deal is reached after a two-year period, Britain will automatically leave anyway.

(Reporting by Costas Pitas, editing by Elizabeth Piper)

More: Reuters Brexit Theresa May Germany

Here's how many miles you have left when your car's empty light comes on

• Caroline Praderio, INSIDER

• Sep. 27, 2016, 1:51 PM
• 103,334
 
• 1

Follow Business Insider:

Running your car on empty is a dangerous gamble — it's tough to imagine a worse situation than breaking down on a 70-mph highway or twisty back road.

So it's helpful to know exactly how many miles your car can travel once that low-fuel warning light turns on. 

You might be tempted to trust the miles-to-empty display that comes standard in many car dashboards these days. But the experts at car repair service YourMechanic say you can't rely on that number alone: It's based on your average gas mileage over time, but you're not always going to be in average driving conditions.

For example: If you normally drive on the highway but suddenly end up in gridlock traffic, your miles-to-empty gauge won't be accurate.

Luckily, YourMechanic has assembled a handy chart for the 50 most popular cars in America, showing how many miles you can actually drive on empty. There's a pretty surprising range of possibilities: Some models can get you about 100 miles, while others will only take you 30.

Courtesy Your Mechanic

By the way: Habitually running on empty is really bad for your car. Debris and contaminants tend to settle at the bottom of the fuel tank, and constantly driving with a low level of fuel means some of that debris can damage the fuel pump.  

Read more about the risks of running on empty over at YourMechanic.

Read the original article on INSIDER. Follow INSIDER on Facebook. Copyright 2016. Follow INSIDER on Twitter.

MORE FROM INSIDER:

• Earth's atmosphere now has carbon dioxide levels unseen for 15 million years, and we might be past the point of no return
• These beautiful headphones from Denmark let you change all the parts – even the speakers
• What this symbol that’s on nearly half of your food actually means
• People in wealthier states prefer iPhones over Samsung Galaxy phones
• 15 American cities that are both fun and affordable

NOW WATCH: The US Government wants more self-driving cars on the road

h

More: Cars Driving Travel INSIDER