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Jul 26, 2019

The week in investor relations: Stocks up in anticipation of Fed decision

This week’s IR-related stories from around the web

With earnings season well under way, UBS revealed positive numbers but Santander saw profits fall, according to CNBC. Both companies were caught up in an issue reported by The Guardian, in which Santander reportedly accused Andrea Orcel of ‘dubious moral behavior’ over its withdrawn job offer after he left UBS Investment Bank.

After US President Donald Trump’s critical comments of crypto-currencies, Binance chief Changpeng Zhao seemed to take the Oscar Wilde view that the only thing worse than being talked about is not being talked about, saying that Trump’s comments were ‘no bad thing’, CNBC reported.

The issue of a recession on either side of the Atlantic was aired this week. The prospect for a US recession was expressed via CNBC by Morgan Stanley, while in the UK, think tank the National Institute of Economic and Social Research said there was a one-in-four chance the economy is already in a recession, reported the Daily Telegraph.

CNBC reported JPMorgan’s global market strategist Jasslyn Yeo warning of a ‘significant’ sell-off in US stocks this quarter, driven by a downward revision in earnings forecasts for next year.

Vodafone is looking at an IPO of its European towers business within 18 months of moving to legally separate it out into an independent company, noted the Financial Times. The business would be Europe’s largest independent towers company with 61,700 masts across 10 countries.

UK aerospace and defense group Cobham is to be bought for £4 bn ($5 bn) by US private equity group Advent International, reported the Daily Telegraph. The board of the listed FTSE 250 business is also recommending shareholders back the 165p-a-share cash offer – a 34.4 percent premium,

Japan’s SoftBank plans to launch a second investment fund totaling $108 bn, with backing from a new group of investors that includes Microsoft, Standard Chartered and the sovereign wealth fund of Kazakhstan, reported the FT.

With Brexit uncertainty prevailing, British investors pulled billions of pounds from European funds this year, but their pessimism could be unfounded, according to the Daily Telegraph.

Amazon profits fell short of expectations as the company faced protests, monopoly fears and possible government action, reported The Guardian, though the earnings report marks the end of four straight quarters of record profit.

Elon Musk’s Tesla share valuation lost more than $5 bn on Thursday, as investors reacted to the firm’s disappointing second-quarter results, according to City AM.

On Friday, shares in Sports Direct fell by about 2 percent in early trading amid a further delay to the release of its full-year results to the end of April, revealed the FT. Shares in Chinese carmakers also fell after an industry association cut its forecast for vehicle sales this year, citing the US-China trade war and tough new emissions standards, reported CNN.

Elsewhere, European stocks went higher as did US equity futures as investors considered the latest collection of corporate earnings and looked ahead to next week’s Fed interest-rate decision, reported Bloomberg.