SoftBank plans to invest roughly $880 billion in tech through more Vision Funds

• Alex Heath
 

• 16h
• 3,683
 

SoftBank CEO Masayoshi Son. Koki Nagahama/Getty Images

• Japanese conglomerate SoftBank plans to invest roughly $880 billion through future iterations of its $100 billion Vision Fund.
• "Vision Funds 2, 3 and 4 will be established every two to three years," according to CEO Masayoshi Son.
• SoftBank has already used the massive fund to invest in Nvidia, ARM, Improbable, and others. It's also close to acquiring roughly 20% of Uber. 
  

SoftBank plans to invest roughly $880 billion in tech companies through at least three more iterations of its Vision Fund, CEO Masayoshi Son recently told Nikkei.

The Japanese conglomerate already commands the world's biggest private equity fund with the $100 billion it raised for the first Vision Fund this year. But the colossal amount of capital is just "the first step," according to Son, who said he is already working to establish a second Vision Fund in the next two or three years.

"We will briskly expand the scale," he told Nikkei. "Vision Funds 2, 3 and 4 will be established every two to three years."

Son said that SoftBank plans to invest in at least 1,000 tech companies in areas like artificial intelligence and robotics over the next 10 years. The billionaire businessman is said to be a firm believer in the concept of the "singularity," which says that artificial intelligence will eventually give way to machines that are smarter than all humanity.

SoftBank tapped companies like Apple, Qualcomm, and the government of Saudi Arabia to back its first Vision Fund, and Son said he plans to exponentially grow each iteration of the fund closer towards one trillion dollars.

"We are creating a mechanism to increase our funding ability from 10 trillion yen to 20 trillion yen to 100 trillion yen," he said. 100 trillion yen equals roughly $880 billion based on current currency rates.

SoftBank has already invested in a wide range of companies this year, including Brain Corp, Mailbox, Boston Dynamics, Improbable, Nvidia, and Slack. Uber board member Arianna Huffington recently said that SoftBank is close to acquiring a 14% to 20% stake in the ride-hailing giant.

SEE ALSO: Venture capitalists are 'baffled' by SoftBank's massive $100 billion tech fund and the size of its investments

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Wall Street banks are starting to sound the alarm on a stock-market correction

• Joe Ciolli
 

• 23h
• 7,037
 

Wikimedia Commons

• Bank of America Merrill Lynch is the latest Wall Street firm to issue a warning about a stock-market correction.
• The benchmark S&P 500 hasn't seen a correction, defined as a 10% sell-off, in more than two years.
• BAML joins Morgan Stanley in the ranks of big firms that have sounded the alarm this week.

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The S&P 500 hasn't seen a correction in almost two years. But a growing chorus of Wall Street strategists says one could be right around the corner.

The most recent firm to sound the alarm is Bank of America Merrill Lynch, which forecasts a pullback of at least 10% — the historical definition of a correction — by Valentine's Day.

And while the firm lays out a long list of sell signals, it highlights a couple of elements as the biggest market risks right now. BAML says the "most obvious catalyst" for a correction would be a spike in wage and inflation data that brings back "fear of Fed."

That's a reference to the bearish sentiment that would be likely to accompany a sudden acceleration of the Federal Reserve's rate-tightening schedule, which includes rate hikes and a shrinking of the central bank's massive balance sheet — two measures that would boost fixed-income yields.

"In our view higher bond yields and higher bond market volatility are necessary to engender a major correction in equity and credit markets," Michael Hartnett, BAML's chief investment strategist, wrote in a client note.

Many high-profile investors interviewed by Business Insider highlighted trepidation about the Fed as the top fear. The unwinding that's about to take place is unprecedented, and there's nothing investors fear more than the unknown.

The 8-1/2-year bull market has mirrored the swelling of the Federal Reserve's balance sheet. That could spell trouble for stocks when the central bank starts unwinding. Bank of America Merrill Lynch

BAML is also wary of a possible bubble in tech stocks, which could be caused by what the firm describes as the two most important investment trends of the past decade: central-bank liquidity and technological disruption. The bank has long expressed worry about overstretched sentiment and trader euphoria — and those two factors may have helped bring about it.

As such, the so-called Icarus trade may soon come to an end. The term, coined by BAML, refers to the "melt up" in stocks and commodities seen since early 2016 — one it sees as unsustainable in the long term.

BAML's correction forecast isn't the first to come out of Wall Street this week. On Tuesday, Morgan Stanley warned of a sharp pullback in equities, albeit a less aggressive forecasted decline of roughly 5% by year end. Its worry stems from what it sees as a fully priced stock market — with minimal upside and a small margin for error — heading into earnings season.

Morgan Stanley also sees — wouldn't you know it — the Fed's balance-sheet unwinding as a major risk, as well as a lack of follow-through on President Donald Trump's tax plan and a potential reversal in a historically low US dollar.

But Morgan Stanley is less pessimistic than BAML about the first quarter of 2018. It forecasts that by the end of March the S&P 500 will hit 2,700, more than 5% above the index's current level.

While the two firms have differing views on the trajectory of stock-market losses, however, both can agree that whatever weakness transpires, it won't threaten the 8-1/2-year bull market. That would require a 20% pullback — a far cry from what either is expecting.

So rest easy, bull-market fans. It's not yet time to panic.

The stock market hasn't seen a 10% correction in more than two years. Markets Insider

SEE ALSO: MORGAN STANLEY: A stock market correction is 'looking more likely'

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Trump announced an antitrust attorney to head the FTC

• Diane Bartz, Reuters

• 13h
• 1,515

President Donald Trump makes a statement about the mass shooting in Las Vegas, Monday, Oct. 2, 2017 at the White House in Washington.AP Photo/Evan Vucci

WASHINGTON (Reuters) - President Donald Trump has selected Joseph Simons, an antitrust attorney from a Washington law firm, to head the Federal Trade Commission, a White House official said on Wednesday.

Trump is expected to nominate Simons to the agency, along with Noah Phillips and Rohit Chopra to be FTC commissioners, the White House official said. Upon confirmation, Simons will be designated chairman, the official said.

The agency is currently headed by Acting Chairman Maureen Ohlhausen, a Republican, with Democrat Terrell McSweeny the only other commissioner. The president has long been expected to name a permanent chair and fill the three empty commission seats, two Republican and one Democrat or independent.

Simons, a partner at the law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP, was a director of the FTC's Bureau of Competition from 2001 to 2003.

During Simons' tenure at the FTC, the agency sued to stop Diageo PLC and Pernod Ricard from buying Seagram Spirits and Wine in 2001 to prevent a duopoly in rum. The FTC also filed a lawsuit in 2003 to stop Haagen-Dazs owner Nestle Holdings Inc from buying Dreyer's Grand Ice Cream Inc, which makes also superpremium ice cream. The FTC later settled both cases.

Noah Phillips, who graduated from Stanford Law School in 2005, is chief counsel for U.S. Senator John Cornyn, a Texas Republican. He is also a veteran of the law firms Steptoe & Johnson LLP and Cravath, Swaine & Moore.

To fill the empty Democratic seat on the commission, the president tapped Rohit Chopra, a financial services expert. Chopra, an ally of Massachusetts Senator Elizabeth Warren, is currently at the Consumer Federation of America.

The FTC works with the Justice Department to enforce antitrust law and pursues companies accused of deceptive advertising. It is an independent agency that is headed by a chairman and four commissioners. No more than three commissioners can come from any one party. 

(Reporting by Diane Bartz; editing by Diane Craft)

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