Blackstone’s Wien sees a market correction on the way

Even a three-day government shutdown couldn’t shake-up the stock market.

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However, Blackstone Vice Chairman Byron Wien told FOX Business’ Liz Claman in an exclusive interview Monday that a correction is coming in the first half of 2018.

“Right now we are in a very frothy period,” Wien said. “Right now I think the market is getting dangerous.”

Wien says people have a feeling of impunity about buying equities thinking they can’t get hurt.

“I see investor sentiment at an all-time high, I see interest rates rising, I see more inflation on the horizon,” Wien said. “I see a plethora of good news, but I see people discounting it. Now we’ve gotten to the point where valuations are extreme. Don’t get me wrong I think we’ll have a positive year in 2018, but right now I’d say we are vulnerable.”

Wien is forecasting four Federal Reserve interest rate hikes in the year ahead.

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“I think they can do it because the economy can handle it,” he said. “The economy is growing at three percent. Obama would have killed for three percent.”

Wien says the economy has plenty of strength and interest rates are way below their normal rate.

Right now, Wien favors technology, biotech and energy.

Report: Ex-Formula 1 star Lauda buys back airline he founded

Ex-Formula 1 driver Niki Lauda is buying back bankrupt Austrian airline Niki, which he founded 15 years ago before selling his stake in 2011.

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The Austria Press Agency reported Tuesday that the 68-year-old’s company Laudamotion beat rivals including British-Spanish consortium IAG in the bid to rescue Niki. It didn’t give financial details of his offer.

The budget airline fell victim last year to the financial woes of its parent company Air Berlin, other assets of which have since been bought by Lufthansa and EasyJet.

Lufthansa dropped its bid to buy Niki after the European Commission raised competition concerns.

South Korea to start real-name trading of crypto currency

South Korea plans to require local banks to launch a real-name system for crypto currency trading that will make the up-to-now anonymous transactions be traceable as the country seeks to curb speculation and criminal activities.

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Financial Services Commission Vice Chair Kim Yong-beom said at a press briefing Tuesday that the new measures, to take effect next week, will prevent foreigners residing outside South Korea who do not have local bank accounts and minors younger than 19 from buying or selling bitcoins and other digital currencies. Once the new system is in place, existing accounts used for crypto trading up to now can no longer be used, he said.

The moves follow warnings by South Korean authorities that they would ban anonymous trading in crypto currencies and crack down on speculative trading and possible crimes. Authorities are seeking to prevent use of crypto currency trading to engage in money laundering, tax evasion and other criminal activities.

The new requirements are meant to ensure that a crypto currency investor’s money comes from a bank account owned by the same individual. Banks will be able to refuse to open accounts with crypto currency exchanges that do not disclose information about suspicious trading. They were told to closely monitor crypto trading that exceeds 10 million won ($9,338) a day or 20 million won ($18,676) per week and also accounts owned by corporations or groups and report any suspicious activity to the authorities.

“We expect that crypto currency exchanges that are in danger of being exploited for money laundering will be thrown out of the market,” Kim told reporters.

He said the government does not intend to encourage or stimulate crypto trading.

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South Korea is home to some of the world’s largest crypto currency exchanges and a craze for bitcoin and other crypto currencies has swept the country.

The price of bitcoin fell was down 4 percent at $10,342.96 as of 0740 GMT Tuesday. It gyrated wildly earlier this month, soaring and then sinking on concerns over now South Korea and other governments might handle the boom in crypto currency trading.

U.K. Regulator Provisionally Rules Fox Acquisition of Sky Against Public Interest

The U.K.’s antitrust regulator has provisionally found the proposed acquisition of British pay-TV giant Sky by 21st Century Fox isn’t in the public interest due to plurality concerns. 

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The Competition and Markets Authority said Tuesday that if the deal went ahead as proposed, it would lead to the Murdoch Family Trust, which controls Fox and News Corp, increasing its influence over public opinion. News Corp owns Dow Jones. 

21st Century Fox said that it was “disappointed” at the provisional ruling. The company said it will continue to engage with the CMA ahead of the publication of its final report on the deal, due in May. 

Sky said it would seek submissions on possible remedies set out by the CMA regarding its plurality concerns.

21 Century Fox is the parent of the FOX Business Network and FoxBusiness.com.

Write to Adria Calatayud at adria.calatayudvaello@dowjones.com

Gun industry gathers just a few miles from mass shooting

The gun industry is holding its biggest annual trade show this week just a few miles from where a gunman slaughtered 58 concertgoers outside his high-rise Las Vegas hotel room in October using a display case worth of weapons, many of them fitted with bump stocks that enabled them to mimic fully automatic fire.

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What exactly will be among the thousands of products crammed into the exhibition spaces at the National Shooting Sports Foundation’s SHOT Show convention, running from Tuesday through Friday, will be a bit of a mystery, shielded from the public and, this year, members of the general-interest media.

One thing is known: Slide Fire, the leading manufacturer of bump stocks, a once-obscure product that attracted intense attention in the aftermath of the deadliest mass shooting in modern U.S. history, won’t be among the exhibitors.

The Texas-based company hasn’t said why it’s not on the roster of more than 1,700 exhibitors, although it was last year. It didn’t return messages seeking comment. The company also isn’t on the list of those attending this year’s National Rifle Association annual meeting or other prominent gun trade shows.

In the aftermath of the Las Vegas massacre Oct. 1, Slide Fire had so much trouble keeping up with demand it temporarily stopped taking orders for the product. It has since resumed.

“From purely from a public relations standpoint, it wouldn’t be a surprise at all if bump stocks just sort of disappeared this year,” said Robert Spitzer, chairman of political science at the State University of New York at Cortland and an expert on firearms and the Second Amendment. “That’s a PR no-brainer.”

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Still, the convention floor is likely to have plenty of other devices that gun-control advocates have taken aim at in recent years: accessories that make it easier to carry a firearm, shoot it or reduce the noise it makes.

On the list of products they oppose are “trigger cranks,” which, like bump stocks, make it easier to fire a long gun rapidly, and “assault pistols,” which look remarkably like short-barreled AR- and AK-style firearms but skirt certain federal restrictions because they aren’t designed to be shot from the shoulder.

“For a person from the general public, I think the thing that would startle them the most about the SHOT Show … is just the sheer scope and the vastness of this show,” said David Chipman, a former agent with the federal agency that regulates firearms and now a senior policy adviser with the gun safety organization founded by former Rep. Gabby Giffords, who was gravely wounded in a shooting in 2012.

SHOT Show has been held for 40 years, half that time in Las Vegas, and this year’s gathering was scheduled well before the bloodshed last fall. It will have some 13 miles of aisles featuring products from more than 1,700 companies. More than 65,000 visitors are expected at the gathering, a place where connections are made and deals worth millions are struck.

The general public is not allowed to roam the aisles; the only people who can attend are those with direct ties to the industry: manufacturers and dealers of firearms or associated products. Although a few reporters from general-interest news organizations attended in recent years, NSSF this year restricted access to about 2,500 journalists from trade publications and media.

The show’s location and timing 3½ months after Stephen Paddock’s murderous attack have heightened awareness of the event.

Michael Bazinet, NSSF director of public affairs, said that while those attending are well aware of the tragedy that occurred nearby, “they also know that legal gun ownership and the lawful commerce of arms is something quite removed from the act of an individual such as this. And that’s not to diminish the tragedy at all. But people come to the show do make that distinction.”

The show comes as the gun industry’s fortunes have waned after nearly a decade of unprecedented sales. No longer concerned about the federal government restricting gun rights, Americans have scaled back their firearm-buying sprees.

When SHOT Show, which stands for Shooting, Hunting and Outdoor Trade, was launched, its emphasis was on hunting and the outdoors. Over the decades, it has evolved and grown and now has huge sections devoted to the law enforcement and military community. No sales are allowed at the show, firing pins are removed from all guns on display, and there is no live ammunition.

There are so many companies that want to exhibit, there isn’t enough space. The waiting list is several hundred names long.

Kevin Michalowski, executive editor of Concealed Carry Magazine, has been going to SHOT Show for more than a decade and said he doesn’t anticipate this year’s event will have a different feel from other years. He said it’s a close-knit industry accustomed to being put under the microscope by the media and by gun-control advocates.

“This is not just a group of redneck gun owners as are often portrayed by the mainstream media. This is serious business,” he said. “Millions and millions of dollars are exchanged, and it helps the economies of many, many states, it helps the economy of the U.S.”

South Korea to ban cryptocurrency traders from using anonymous bank accounts

SEOUL (Reuters) – South Korea will ban the use of anonymous bank accounts in cryptocurrency trading from Jan. 30, regulators said on Tuesday in a widely telegraphed move designed to stop virtual coins from being used for money laundering and other crimes.

Local cryptocurrency traders will not be allowed to make deposits into their virtual currency exchange wallets unless the names on their bank accounts matches the account name in cryptocurrency exchanges, Kim Yong-beom, vice chairman of the Financial Services Commission told a news conference in Seoul.

Tuesday’s announcement follows a string of warnings from global policymakers about cryptocurrency trading, including those from South Korea’s chief financial regulator last week who said the government may consider shutting down domestic virtual currency exchanges.

The regulator has previously said it will come up with detailed guidelines for local banks to properly identify its clients by their real names in cryptocurrency transactions.

To make deposits into virtual coin wallets, cryptocurrency traders will need to identify themselves with their real names at the exchange and have those matched with information at local banks by Jan. 30.

According to Bithumb, the country’s second-largest virtual currency exchange, the bitcoin price in South Korea was down 4.35 percent at $12,567 (8,987.34 pounds) from previous day as of 0214 GMT on Tuesday.

Bitcoin is trading up 3.7 percent at $10,750 on the Luxembourg-based Bitstamp exchange.

Reporting by Cynthia Kim; Editing by Sam Holmes

Judge orders U.S. government to seek consent to give data to AT&T, Time Warner

WASHINGTON (Reuters) – The judge hearing the Justice Department’s lawsuit to stop ATT from buying Time Warner ordered the department on Monday to seek permission to give the two companies access to rivals’ pricing data.

Judge Richard Leon, living up to a pledge made during a hearing last week, ordered the Justice Department, which has the data, to ask the companies that gave it to the government for consent to pass it on to ATT and Time Warner’s legal team.

The Justice Department sued in November to stop ATT, the No. 2 U.S. wireless company, from buying Time Warner for $85 billion because of concerns that it could raise prices for rivals and pay-TV subscribers as well as hamper the development of online video. Trial is set for March 19.

Fights over data are common during antitrust trials since companies that are subpoenaed frequently fear that their rivals’ executives will gain access to sensitive internal data that put them at a competitive disadvantage.

ATT is expected to use the data to show that previous mergers did not lead to price increases for content as a way to bolster its argument that this deal also will not lead to higher prices when cable companies seek to buy content.

ATT and Time Warner are seeking data from five programmers, including Walt Disney Co, Twenty-First Century Fox, Viacom Inc, Discovery Communications Inc and Scripps Networks Interactive Inc, according to the judge’s order.

They are also seeking it from distributors Comcast Corp, Charter Communications Inc, Cox Communications Inc and Altice USA Inc, the judge’s order said.

Leon had given access to confidential information to the court, Justice Department lawyers and staff, service providers and ATT and Time Warner’s outside counsel.

Reporting by Diane Bartz; Editing by Susan Thomas

Bacardi to buy high-end tequila maker Patron in $5.1 billion deal

(Reuters) – Bacardi Ltd said on Monday it would buy high-end tequila maker Patron Spirits International AG in a $5.1 billion deal, hoping to become the second largest spirits company in the United States by market value.

The acquisition marks the first major deal under Mahesh Madhavan, who was appointed Bacardi’s chief executive in October by the family that controls the company and founded it some 156 years ago in Cuba.

New, high-end tequilas including Patron’s namesake drinks have helped the beverage broaden its reach beyond young partygoers.

While the global market for alcoholic drinks shrunk by 1.3 percent in 2016, the tequila market grew 5.2 percent, according to alcoholic beverage research firm IWSR.

Diageo Plc last year bought George Clooney’s premium tequila brand Casamigos for up to $1 billion.

Bermuda-based Bacardi, which owns 200 spirit labels, including Bombay Sapphire gin, Grey Goose vodka and its namesake white rum, has held a minority stake in Patron since 2008.

Reporting by Uday Sampath in Bengaluru; editing by Sai Sachin Ravikumar

Asia stocks rise as end to U.S. government shutdown buoys Wall St., dollar steady

TOKYO (Reuters) – Asian stocks advanced on Tuesday after U.S. senators struck a deal to end a three-day government shutdown, sending Wall Street’s main indexes to record highs and keeping the dollar well supported.

U.S. lawmakers passed a short-term measure on Monday to fund the federal government through Feb. 8.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.2 percent to a fresh record peak.

Australian stocks climbed 0.7 percent and South Korea’s KOSPI .KS11 added 0.5 percent. Japan’s Nikkei .N225 was 0.45 percent higher.

World equity markets have been on a tear over the past year, buoyed by a synchronized uptick in global economic growth in a boon to corporate profits and stock valuations.

The brief U.S. government shutdown put only a minor dent to equities, with Wall Street rallying to record highs overnight following the deal to end the impasse in Washington. [.N]

Investors in Asia will turn to the Bank of Japan’s monetary policy decision later in the session for potential clues.

“The consensus is that the BOJ will stand pat on policy. So focus is on Governor (Haruhiko) Kuroda’s post-meeting press conference and how he responds to questions about the BOJ having opted to trim the amount of long-term JGBs it purchased earlier this month,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.

The BOJ caused ripples in the markets earlier in January by slightly reducing the amount of longer-dated Japanese government bonds (JGBs) it buys from the market at its regular debt-purchasing operations.

The yen appreciated significantly against the dollar as some interpreted the BOJ’s move as a step towards eventual policy normalization.

In contrast to Wall Street, the dollar’s reaction to news of the reopening of the U.S. government was more subdued.

The dollar briefly popped up to 111.225 yen JPY= but last traded at 110.985.

The euro was effectively flat at $1.2256 EUR= after gaining 0.3 percent overnight. The common currency was within reach of a three-year peak of $1.2323 set on Wednesday.

The euro was supported ahead of the outcome of the European Central Bank’s meeting on Thursday, which could provide clues to future shifts in the bank’s monetary policy.

The pound was steady at $1.3984 GBP=D3 after touching $1.3992, its highest level since June 2016’s vote for Brexit, on optimism that Britain will reach a favorable divorce deal with the European Union. [GBP/]

Lifted by a wavering dollar, U.S. crude oil futures CLc1 rose 0.45 percent to $63.85 per barrel.

Spot gold XAU= slipped 0.1 percent to $1,333.36 per ounce after the U.S. government shutdown ended and dulled the precious metal’s safe-haven appeal.

Reporting by Shinichi Saoshiro; Editing by Shri Navaratnam

Netflix crosses $100 billion market capitalization as subscribers surge

(Reuters) – Netflix Inc (NFLX.O) snagged 2 million more subscribers than Wall Street expected in the final three months of 2017, tripling profits at the online video service that is burning money on new programming to dominate internet television around the world.

The results drove Netflix to a market capitalization of more than $100 billion for the first time. Shares jumped 9 percent to over $248 in after-hours trading on Monday after rallying throughout the month and rising 53 percent last year. (tmsnrt.rs/1Ry82wG)

The company has signed up more than half of all U.S. broadband households and is building its customer base in 190 countries by spending billions on programming.

Netflix picked up 6.36 million subscribers in international markets from October through December, when it released new seasons of critically acclaimed shows “Stranger Things” and “The Crown” as well as Will Smith action movie “Bright.” That topped Wall Street expectations of 5.1 million, according to FactSet.

Along with 1.98 million customer additions in the United States, the company ended the year with 117.58 million streaming subscribers around the globe, despite a price hike in October.

“Netflix is pouring more and more money into making content, and it is directly translating into more subscribers,” BTIG analyst Richard Greenfield said. “They see a huge opportunity and they are moving as fast as they can to attack it.”

The company also said it took a $39 million non-cash charge for “unreleased content we’ve decided not to move forward with.” A source familiar with the matter said the charge was related to content starring Kevin Spacey, with whom Netflix cut ties after he was accused of sexual misconduct.

Netflix temporarily halted production of “House of Cards” to write out Spacey’s character and decided not to release the film “Gore,” which starred Spacey as Gore Vidal.

Spacey has apologized to one of his accusers, and according to his representatives is seeking unspecified treatment. Reuters was unable to independently confirm the accusations.

The charge is one of the first signs of costs faced by companies in the wake of a widespread campaign against sexual harassment.

Netflix turned a DVD-by-mail business into an online competitor of movie channel HBO. As it grew it began licensing its own original shows to ensure a stream of new offerings if studio suppliers ended deals.

In fact, Walt Disney Co (DIS.N) is making a major push into online streaming and will pull its first-run shows and movies from Netflix in 2019 as Hollywood fights for audiences.

Netflix plans to spend up to $8 billion this year on TV shows and movies to fend off Disney, Amazon.com Inc (AMZN.O), studios-owned Hulu and local competitors that are jumping into online video, and it is turning more and more to high-budget projects, such as the roughly $90 million “Bright.”

In 2017, Netflix recorded its first full-year profit in international markets. The company has said it is aiming for steady improvements in profitability overseas this year.

“We believe our big investments in content are paying off,” Netflix said in a quarterly letter to shareholders.

Netflix is raising its marketing budget faster than revenue is growing and will spend about $2 billion this year. The company expects negative cash flow in 2018 of $3 billion to $4 billion, up from $2 billion in 2017.

Last October, Netflix raised prices for two of its three main subscription plans to help fund the substantial content investment. The earnings report showed customers took it in stride.

“Consumers are tolerant as long as something’s improving,” Netflix CEO Reed Hastings, on a post-earnings webcast, said of the price increase.

For the December quarter, Netflix reported diluted earnings-per-share of 41 cents, even with the expectations of analysts polled by Thomson Reuters I/B/E/S.

Revenue for the three months totaled $3.286 billion, in line with forecasts.

Looking ahead, Netflix forecast streaming customer additions of 6.35 million for the first quarter, above analysts’ expectation of 5.01 million, according to FactSet.

Investors appear confident in Netflix’s ability to grow. Netflix recently traded at 91 times expected earnings for the next 12 months, versus Amazon at 152 times earnings and Disney at 17 times earnings, according to Thomson Reuters data.

Netflix also said Monday that Rodolphe Belmer, CEO of global satellite company Eutelsat, had joined the company’s board.

  • Netflix takes $39 million charge after Kevin Spacey scandal

Reporting by Lisa Richwine in Los Angeles and Aishwarya Venugopal in Bengaluru; Editing by Peter Henderson and Lisa Shumaker