Latest on Trump by Dow Jones Newswire 01/08 12:51p CST DJ Ma

01/08 12:51p CST DJ Market Talk Roundup: Latest on Trump, U.S. Politics

The latest Market Talks covering President Donald Trump and U.S. politics.
Published exclusively on Dow Jones Newswires throughout the day.

1351 ET - The parent of Alaska Airlines, like Southwest Airlines, American
Airline and JetBlue Airways before it, said it plans to award $1,000 bonuses
later this month to 23,000 employees, in celebration of the new federal tax
bill. The corporate tax-cut windfall will reduce the tax rate to 21% from 35%,
effective this year, which should save millions in tax liabilities and allow
airlines to invest more in planes, products and their employees, although some
of the savings may also go toward share buybacks. Alaska Air shares are down 1%
to $72.97. (susan.carey@wsj.com)

1253 ET - Former Navy acquisition chief and acting Navy secretary Sean
Stackley joins L3 Technologies, complementing the deal-hungry defense company's
M&A team and continuing the run of Obama-era Pentagon officials who've popped
up on corporate boards and management teams. Former defense secretary Ash
Carter joined the Delta Air Lines' board while his deputy, Bob Work, is now a
Raytheon director. Ex-Air Force secretary Deborah Lee James is now on the
Textron board while Leidos added former Pentagon acquisition chief Frank
Kendall to its director roster, with his deputy Katharina McFarland joining
Engility. (doug.cameron@wsj.com; @dougcameron)

1242 ET - Eli Lilly (LLY) CEO David Ricks said the U.S. tax overhaul will
cause American companies to make investments based more on business factors
than taxes. "On the next decision you face it really re-balances the calculus
on where to build a plant or make hires," he tells the WSJ on sidelines of JP
Morgan healthcare conference in San Francisco. He expects Lilly to have "more
infrastructure" in the US within the next 7 years as a result of the overhaul.
In September the drug maker announced plans to cut 8% of its work force
including many jobs in its home state of Indiana. Ricks also sees the mix of
Lilly acquisition targets shifting to more US companies than foreign firms.
Though Lilly already had a lower tax rate than the former top US corporate rate
due to operations abroad, he sees Lilly's total tax bill coming down.
(peter.loftus@wsj.com, @Loftus)

1138 ET - J.P. Morgan says the introduction of the U.S. tax reform has done
very little to lift the market's downbeat view of potential U.S. growth," which
is expected to be smaller compared with other countries or areas around the
world. This explains why the U.S. dollar hasn't benefited much from either the
introduction of the tax reform or from good economic data, it says. "The global
economic activity surprise index is at a post-GFC high," J.P. Morgan says,
highlighting eurozone, as well as German growth, which for the first time ever
"outpaced the U.S. for four consecutive years." J.P. Morgan adds: "This lack of
economic exceptionalism...is turning out to be more of a drag on the currency."
(olga.cotaga@wsj.com; @OlgaCotaga)

1129 ET - Air Lease, one of the world's largest aircraft leasing companies,
expects ongoing benefits from tax reform including a 40% reduction in its
deferred tax liability, which will be recorded in its 4Q results. Los
Angeles-based Air Lease says in a regulatory filing that applying the new law
to its 3Q results would have boosted its shareholders' equity by $329M, or
$2.95 per share. Shares are trading at an all-time high, recently up 1.8% at
$49.32. (doug.cameron@wsj.com; @dougcameron)

1052 ET - Berkshire Hathaway's 4Q book value could rise $37B, or 12%, from
the previous quarter due to a drop in its deferred tax liabilities, Barclays
says. A lower US corporate tax rate could also increase Berkshire's earning
power this year and in later years, the bank says. "We would view this
magnitude of book value increase as favorable for BRK shares since it is
generally valued based on price-to-book value." Barclays adds that Berkshire
held about $12B in undistributed foreign earnings as of 2016 and might choose
to repatriate some of that cash. (nicole.friedman@wsj.com; @NicoleFriedman)

1045 ET - TD Bank says the US tax overhaul will lower the value of some tax
credit-related and other investments, reducing earnings by $400M for the fiscal
first quarter, ending January 31. The overhaul will also reduce the bank's
common equity tier 1 regulatory ratio by roughly 0.09 percentage point. Still
the reduction of the corporate rate to 21% will "have a positive effect on TD's
future earnings," the bank says. TD will report 1Q results on March 1.
(vipal.monga@wsj.com; @vipalmonga)

1025 ET - Olive Garden parent Darden Restaurants expects this fiscal year to
record a tax benefit of approximately $70M, or 56 cents per share from
continuing operations, due to a revaluation of deferred tax assets and
liabilities in the wake of the tax overhaul bill. In addition, Darden estimates
that the impact of lower corporate tax rates will reduce its fiscal 2018
effective tax rate by 600 basis points. That, combined with the resolution of
other tax matters unrelated to the tax overhaul bill, will result in an
effective tax rate of 18% for fiscal 2018, down from 25%. The company says it
will reinvest $20M of the savings in initiatives benefiting its workforce. As a
result of the tax changes, Darden increased its EPS outlook from continuing
operations for fiscal 2018 to $4.70 and $4.78, from $4.45 to $4.53. Shares slip
1.3%. (julie.jargon@wsj.com)

0927 ET - Continental AG, the German auto-parts manufacturer, said it
welcomes the cut in the U.S. corporate tax rate. Continental forecasts it will
benefit from the lower tax rate and the accelerated depreciation of certain
expenses but said it was too early to provide estimates. The company said it is
still assessing the impact of the tax overhaul. Despite the expected financial
benefit, Continental on Monday criticized elements of the overhaul. The U.S. is
"obviously pursuing protectionist policies" with the tax plan, a spokesman
said. These are predominantly affecting foreign companies and hinder
international competition, the spokesman said.(Nina.Trentmann@wsj.com, Twitter:
@Nina_Trentmann)

0917 ET - The US tax overhaul reduced a tax credit that drug makers may take
for research-and-development costs in finding new drugs for rare diseases. But
even with that, the tax overhaul is "still a very good deal for us," says
Jean-Jacques Bienaime, CEO of BioMarin, a rare-disease drug specialist. The
reduction in the top corporate rate to 21% from 35% will help BioMarin better
compete against non-US rivals in bidding to acquire companies, he tells the WSJ
on sidelines of the JP Morgan health-care conference in San Francisco. Now, "if
we do see an acquisition opportunity, we will no longer be at a disadvantage
versus a European company or Japanese company," Bienaime says. CFO Dan
Spiegelman says the tax changes also will reduce the incentive for US companies
to move intellectual property to other countries to capitalize on lower rates.
(peter.loftus@wsj.com; @Loftus)

0821 ET - US farmers will see little change in prices for their crops this
year, according to an agricultural economist addressing farmers at an annual
convention in Tennessee. The American Farm Bureau Federation, which hosted the
meeting, said Dr. Keith Coble of Mississippi State University told farmers that
crop prices, which have lingered at low levels, will likely move sideways as a
slump in the farm economy stretches into its fifth year. "Trends for 2018 will
be similar to 2017, unless a major disruption occurs," said Dr. Coble. He
predicted the farm bill, which authorizes US farm safety-net programs, would
see just "minor tweaks" due to a tight legislative agenda during a year of
mid-term elections. (jesse.newman@wsj.com;@jessenewman13)

0405 ET - Deutsche Bank's fourth-quarter results are likely to be
disappointing, CFRA says after the German lender said on Friday it expects to
record a small loss in 2017 due to the impact of the U.S. tax reform. This
"will mark its third consecutive annual loss, and at the same time defying its
ambition to return to profitability in 2017," CFRA says. Deutsche Bank said on
Friday it expects to book a charge of roughly EUR1.5 billion in the fourth
quarter related to tax overhaul in the U.S. "Even without the charges, we
expect a disappointing 4Q 2017 for [Deutsche Bank], as the company said that
trading conditions during the period were challenging, characterized by low
volatility and low client activity," CFRA says. Shares in Deutsche Bank trade
1.3% lower at EUR15.29. (pietro.lombardi@dowjones.com; @pietrolombard10)

(END) Dow Jones Newswires

January 08, 2018 13:51 ET (18:51 GMT)
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