MORNING NEWS CALL Powered by Re uters U.S. Edition 'lllurodoy. 18,. 2021 TOP NEWS • Minutes highlight a Fed split over labor market, bond-buying taper Federal Reserve officials felt their employment benchmark for decreasing support for the economy "could be reached this year," but appeared to disagree on other key aspects of where monetary policy should turn next in the transition from the pandemic crisis, according to minutes from last month's policy meeting. • Goldman Sachs to buy Dutch asset manager NNIP for around $2 billion Goldman Sachs said it will buy Dutch insurer NN Group's asset management arm for around $1.98 billion in the biggest acquisition by the U.S. company since David Solomon became chief executive in 2018. • U.S. states rush to meet deadline to join $26 billion opioid settlement U.S. states are racing to meet a deadline to commit to a $26 billion opioid settlement with three drug distributors and the drugmaker Johnson & Johnson, as some grapple with local resistance and concerns the amount isn't big enough to address the damage done by an epidemic of addiction. • Estee Lauder tops quarterly sales estimates as demand for makeup rebounds Estee Lauder beat market estimates for quarterly sales, as the cosmetics maker benefited from a rebound in demand for makeup products after Americans started venturing out following the easing of coronavirus restrictions. • Three U.S. senators urge more Taiwanese help on automotive chip shortage A trio of Democratic U.S. senators has asked the Taiwanese government for more help to address an ongoing chip shortage that has left numerous American auto production lines standing idle at times, according to a letter reviewed by Reuters. BEFORE THE BELL U.S. stock index futures and European equities fell, as minutes from the Fed's July meeting showed tapering of its massive stimulus is possible this year. Japan's Nikkei closed lower following a report that Toyota plans to slash its global output, while Chinese shares ended down, dragged by consumer staples and financial stocks. The dollar rose, while gold prices were little changed. Oil dropped to its lowest in about three months, pressured by concerns about weaker demand as COVID-19 cases rise globally. U.S. jobless claims data is scheduled for release later in the day. REFINITIV" DATA IS .JUST I ~ 1 TH: 3EGINNlt--G '- MORNING NEWS CALL - U.S. EDITION Au ust 19, 2021 STOCKS TO WATCH Results • Cisco Systems Inc: The company's first-quarter profit forecast fell short of estimates on Wednesday, with the network gear maker warning that supply chain issues would continue to drive up component costs and delivery backlogs. It expects first-quarter revenue to grow 7.5% to 9.5% year-over-year, while Wall Street expects it to rise about 7.6%. However, Cisco edged past fourth-quarter revenue and profit estimates, helped by more people using its videoconferencing platform Webex, virtual private network AnyConnect and cybersecurity products as offices adapt to hybrid work. • Estee Lauder Companies Inc: The company beat market estimates for quarterly sales, as the cosmetics maker benefited from a rebound in demand for makeup products after Americans started venturing out following the easing of coronavirus restrictions. Sales in its makeup division surged 76% on a reported basis to $960 million in the fourth quarter, marking a return to growth for the first time in more than a year. Net sales rose to $3.94 billion in the fourth quarter, from $2.43 billion a year earlier. Analysts had expected net sales of $3.75 billion, according to IBES data from Refinitiv. • Nvidia Corp: The company on Wednesday said talks with regulators to clear its $40 billion proposed acquisition of British semiconductor technology firm Arm are taking longer than expected. The disclosure came as Nvidia forecast third-quarter revenue above Wall Street expectations on Wednesday as it benefits from a boom in demand. The company estimated current-quarter revenue at $6.80 billion, plus or minus 2%. Analysts on average had expected $6.53 billion, according to IBES data from Refinitiv. Nvidia also beat expectations for second-quarter revenue with a 68% rise to $6.51 billion. The company said second-quarter adjusted profit was $1.04 per share, versus estimates of $1.01 per share, according to Refinitiv data. • Robinhood Markets Inc: The company expects retail investors to become less active in the third quarter, after frantic trading in crypto currencies helped more than double its revenue, the online brokerage said in its first earnings report as a public company. Robinhood posted net revenue of $565 million for the second quarter compared with $244 million a year earlier. That 131% gain is above the mean analyst estimate of $521.8 million, according to Refinitiv IBES. Monthly active users increased 109% to 21.3 million, compared to 10.2 million in the second quarter of 2020, while assets under custody increased 205% to $102 billion, compared with $33 billion a year before. • Tapestry Inc: The Coach handbag maker beat quarterly sales estimates, as a vaccine-aided reopening of economies boosted demand for designer apparel and purses. Net sales rose to $1.62 billion in the fourth quarter from $714.8 million a year earlier, topping analysts' average estimate of $1.56 billion, according to IBES data from Refinitiv. The luxury brand plans to return over $750 million to shareholders in fiscal year 2022 by reinstating its dividend and share buyback program. Deals Of The Day • Goldman Sachs Group Inc: The company said it will buy Dutch insurer NN Group's asset management arm for $1.98 billion in the biggest acquisition by the U.S. company since David Solomon became chief executive in 2018. The deal is part of Solomon’s strategy to make the bank’s revenue stream less reliant on earnings from trading and advising on deals. NNIP, or NN Investment Partners, has $335 billion in assets under management, and the acquisition will double the total that Goldman Sachs manages in Europe to more than $600 billion. As part of the deal, NN Group has committed to leave its $190 billion portfolio of insurance assets under NNIP management after it joins Goldman. In Other News • Alphabet Inc: A Moscow court fined Google 6 million roubles for failing to delete content that Russia deems illegal, the second such penalty to be imposed on the U.S. tech giant in less than a week. Amid a wider standoff with Big Tech, Russia has hit Google and other companies with a series of small fines in the past year, some REFI N ITIV'" DATA IS JUST 2 THE BEGINNING ~ MORNING NEWS CALL - U.S. EDITION Au ust 19, 2021 concerning banned content and others for failing to localise user data on Russian territory. The Tagansky District Court in Moscow said Google had been handed three administrative fines of 2 million roubles each. Google confirmed the fines, but offered no further comment. • AmerisourceBergen Corp, Cardinal Health Inc, Johnson & Johnson & McKesson Corp: U.S. states are racing to meet a deadline to commit to a $26 billion opioid settlement with three drug distributors and the drugmaker Johnson & Johnson, as some grapple with local resistance and concerns the amount isn't big enough to address the damage done by an epidemic of addiction. Fourteen state attorneys general unveiled the proposed settlement with McKesson, AmerisourceBergen, Cardinal Health and J&J on July 21, kicking off a months-long process for states, counties and cities to sign on. By Saturday, states must decide whether to join settlements that call for the distributors to pay $21 billion and J&J to pay $5 billion, money meant to help fund treatment and other services. The settlement's complex formula envisions at least 44 states participating, but ultimately the companies decide whether a "critical mass" have joined and whether to finalize the deal. • Apple Inc: More than 90 policy and rights groups around the world published an open letter urging Apple to abandon plans for scanning children’s messages for nudity and the phones of adults for images of child sex abuse. "Though these capabilities are intended to protect children and to reduce the spread of child sexual abuse material, we are concerned that they will be used to censor protected speech, threaten the privacy and security of people around the world, and have disastrous consequences for many children," the groups wrote in the letter, which was first reported by Reuters. • Baidu Inc: the company has raised $1 billion in a two-tranche U.S. dollar sustainability bond, negotiating better- than-expected terms amid strong demand and despite concerns about China's regulatory clampdown on the tech sector. Its 5.5-year tranche bond raised $300 million and the 10-year tranche secured $700 million, a company statement said. It was the first major debt fundraising by a Chinese tech firm since the latest onslaught of regulatory actions that began in July, and its success should give other issuers confidence there is still significant global investor interest in Chinese deals, bankers said. • ConocoPhillips: A federal judge on Wednesday reversed the U.S. government's approval of the company' planned $6 billion Willow oil development in Alaska, citing problems with its environmental analysis, according to court documents. In her order, Alaska District Court Judge Sharon Gleason said she was vacating the U.S. Bureau of Land Management's approval of the development in part because the agency failed to include greenhouse gas emissions from foreign oil consumption in its environmental analysis. It also "failed to adequately analyze a reasonable range of alternatives" for the project, she wrote.