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Tuesday, September 27, 2016

MSN Money News



MSN Money News

MSN Money News

This will be something new for the blog categories. I'm a firm believer of ways to summarize input of information given the lack of time and resources. One of the ways to do that was through MSN Money, where I find some of the news of the day.

Here are some of those that I've got and will share it with the readers on a more consistent basis.

STOCK STUMBLE, ON PRESIDENTIAL DEBATE

Stocks were lower Monday as Wall Street shifted its focus from interest rate policy to politics and traders braced for the first presidential debate between Hillary Clinton and Donald Trump.

The Dow was down 140 points, the Standard & Poor's 500 was off by 0.7%, and the Nasdaq was down by 0.8%.

"Tonight's debate starts the election's critical point for stock investors," 

Dan Clifton, a Washington policy analyst at Strategas Research Partners, told clients in a research note before the opening bell. "Few events can move the needle as much as the first presidential debate -- with the average polling change from the first debate about 3 points."

The polls are narrowing heading into the first debate, which at least one Wall Street pro says is tantamount to a heavyweight boxing match and which is expected to draw a TV audience of as many as 100 million, or Super Bowl proportions. A Sept. 22 Washington Post/ABC News poll of likely voters had the two candidates virtually in a dead heat, with Clinton leading Trump by a 46% to 44% margin, but well within the 4.5 percentage point margin of error.

[Source: USA Today]

TRUMP WIN A POSSIBILITY AND WALL STREET KNOWS IT

For more than a year, Wall Street pros had been treating Donald Trump's candidacy as a sideshow not to be taken seriously and with little chance of victory. 

Now, with the first debate set between Trump and Hillary Clinton, and with polls showing the race a virtual dead heat, it's not a joke anymore. 

Instead, top investment minds on the Street are providing clients advice on how to position ahead of the election. Those scenarios now are taking into serious consideration what would happen should Trump prevail. 

And prevail he might: The Real Clear Politics polling average gives Clinton just a 1.5-point lead in a four-way race. Nate Silver's FiveThirtyEight site has Trump holding a 48.5 percent chance in the polls-only forecast (51.5 percent for Clinton), the highest the GOP candidate's been since July 31 and up dramatically from a low of 10.8 percent on Aug. 14. However, the site's "Now-cast" projection of who would win the race if it was held today assigns a 54.9 percent to a Trump victory. 

Previous surveys have indicated that at least 70 percent of Wall Street strategists expect a Clinton win.

The forecasts for Trump win, though, aren't as extreme as might be expected.

In fact, several strategists believe a Trump presidency might not bring about radical change, despite the New York businessman's pledge to revamp long-established trade deals, slash taxes for businesses and individuals and demolish the government-run healthcare program. 

That's primarily because even in the scenario where the Republican prevails, the greater likelihood is that he'll have to deal with a divided Congress where it's difficult to push through major initiatives. Morgan Stanley analysts call this scenario "policy incrementalism" and believe that it's the most likely outcome regardless of who wins the presidency. 

However, should Trump win and hold majorities in both halls of Congress, the potential for greater change increases. 

"While Clinton still appears to enjoy greater support for the presidency than Trump, the market impacts of a Trump presidency cannot be dismissed as a tail risk," fixed income strategists at Morgan Stanley said in a report for clients. 

The report broadly notes that investors need to prepare better for market volatility as the election nears, a sentiment common on the Street. 

[Source: CNBC]

Wells Fargo CEO could get more than $123 million if he walks

Wells Fargo CEO John Stumpf stands to walk from the bank with $123.6 million in severance and stock value if he retires from the bank, which is still reeling from a scandal where millions of accounts were inappropriately opened for customers. 

Stumpf's $123.6 million in potential retirement walking money, as calculated by pay consulting firm Equilar as of mid-September, is the sum of Stumpf's $25.2 million in retirement payments, plus a $20 million pension, deferred compensation of $4.3 million as well as the $74 million in stock he already owns. Neither Stumpf nor Wells Fargo has stated the CEO's continued employment is in doubt, but he is eligible for the bank's retirement plan. Wells Fargo declined to comment on this story.

Seeing such a large retirement package gets to the essence of the grilling Stumpf, 62, took on Congress this month. Stumpf confirmed no high-ranking officials have been fired or monetarily punished as a result of the alleged fraud. Wells Fargo, though, fired more than 5,000 low-level bank employees for secretly opening millions of accounts to meet aggressive sales targets set by management. U.S. Sen. Elizabeth Warren, D-Mass., tore into Stumpf for not taking responsibility for the fraud. Stumpf testified the bank has reformed its sales practices and the board is evaluating further steps. Stumpf is already the best-paid bank CEO, pulling down $19.3 million last year. 

Stumpf would surely prefer to retire, even if asked to do so by the board, as opposed to being terminated. Stumpf would forfeit his claim to the $25.2 million retirement benefit in the case of involuntary termination for cause, according to the company's plan documents, says Dan Marcec, director of content at Equilar. It's unclear if he would receive the pension and deferred compensation if terminated for cause, Marcec says. 

Potential payments for Wells Fargo CEO upon retirement 

Retirement eligibility, $25.2 million
Present value of pension accounts, $19.97 million
Deferred compensation, $4.4 million
Value of common shares, $73.98 million

[USA Today]

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