The Morning Ledger: Enjoy Unfrozen IPO Market While it Lasts

The Morning Ledger: Enjoy Unfrozen IPO Market While it Lasts

By Maxwell Murphy

Valvoline will help rev up the quiet IPO market. Brian Lawdermilk/Getty Images

Good morning. After Labor Day, the anemic market for initial public offerings will get back to work, but it may not be for very long, Maureen Farrell and Corrie Driebusch report on today's front page. Companies in a wide variety of U.S. industries plan to go public after the upcoming long weekend. The level of new issuance should resemble what would normally be expected given record stock prices and historically low volatility. The window for offerings is expected to shut about six weeks later amid political uncertainty ahead of the presidential election, bankers and analysts say.

One of the largest expected IPOs is Valvoline Inc., an engine and automotive-maintenance business that is being spun off from Ashland Inc. and could raise roughly $750 million, according to people familiar with the process. Another closely watched deal is Nutanix Inc., a Silicon Valley software company that would be one of the few billion-dollar startups to debut this year, according to people familiar with the situation. The U.S. market for initial public offerings is in need of rescue. As of late August, 2016 was on track to be the worst year for IPOs since the financial crisis, with 63 companies listing on U.S. exchanges and raising just $12.9 billion, according to Dealogic.

From Finance to Strategy to Innovation: Mark Thresher, CFO of Nationwide

In a time of change for the insurance industry, Mark Thresher, EVP and CFO of Nationwide, has responsibilities that span beyond traditional finance, to include functions such as corporate strategy, risk management, economics and investments. He discusses how Nationwide’s finance organization supports the business, while managing in a prolonged low interest rate environment and monitoring new competitive risks and opportunities. He also talks about the importance of getting operational experience before taking on the CFO role, with Gary Shaw, partner, Deloitte LLP, and vice chairman and U.S. Insurance leader. Continue »

THE WEEK AHEAD

Mind the bookends. We'll start today with the Commerce Department's estimates of July personal income and consumer spending, which will help gauge inflation; expect a tepid uptick. At the end of the week, the Labor Department's jobs report will provide the Federal Reserve its last major economic data point before its September meeting, where it may raise interest rates; economists expect unemployment to dip to 4.8%. We'll also see how businesses and consumers in Europe held up this month on Tuesday, and on Wednesday we'll get a reading on eurozone unemployment, while Thursday will reveal the Institute for Supply Management index, a pulse on the nation's manufacturing.

CORPORATE NEWS

Goldman Sachs and Morgan Stanley are pushing into more traditional consumer banking. brendan mcdermid/Reuters

Morgan Stanley, Goldman remaking themselves. Morgan Stanley and Goldman Sachs Group Inc. are betting on basic banking services. The firms hope their cachet can offset their relative lack of experience dealing with old-fashioned consumer deposits and loans. Morgan Stanley is continuing its push to attract well-heeled clients and Goldman is opening its doors to Main Street's more modest clients.

HP accused of age discrimination. Four former employees of Hewlett-Packard Co. have filed a lawsuit alleging they were victims of age discrimination as the technology giant pared its workforce in recent years. Their suit alleges violations of California and federal laws and seeks class-action status on behalf of other workers who were 40 years old or older at the time they were laid off. It names Hewlett Packard Enterprise Co. and HP Inc., the two companies formed when Hewlett-Packard broke up last fall. The two companies deny the allegation.

Transforming pays at P&G. A Procter & Gamble Co. incentive program with some unconventional measures meant extra cash for top executives after a year in which the company missed sales and profit growth targets. Last year, P&G added a "transformation factor" that rewards executives for initiatives that drive the Cincinnati company's restructuring, such as overhauling the supply chain, improving cybersecurity and streamlining the product portfolio.

Exxon bailing on Alaska project. Exxon Mobil Corp. has decided not to invest in the next stage of a proposed natural gas export terminal in Alaska and said it would work with its partners to sell its interest in the project to the state government. The company's decision comes amid a global glut of natural gas that has depressed prices and follows the release of a Wood McKenzie report last week concluding the Alaskan project "is one of the least competitive" of proposed liquefied natural gas plants worldwide.

Marketing is the new advertising. Even as the distinction between marketing technology and advertising technology becomes increasingly blurred, if you're trying to secure millions of dollars in venture capital, pitch your business as "marketing tech." It has become increasingly difficult for ad-tech companies to raise money in recent years, but marketing-tech funding appears healthy as ever.

Can't spend more than you make forever. With large companies returning 112% of their net earnings to investors through dividends and share repurchases during the first half, something's got to give, Steven Russolillo writes for Ahead of the Tape. At some point, perhaps when borrowing is no longer so cheap, companies will have to begin out-earning their distributions or reduce them, which could take the steam out of high stock prices.

China throttles up. China set up a new state-owned aircraft engine maker to help fulfill ambitions to develop homegrown aerospace giants and become a major player in global aviation. President Xi Jinping described the creation of Aero Engine Corp. of China as a "strategic move" that would accelerate the development of indigenously made jet engines and thereby boost national prestige and military power.

Golden delicious Apple. Apple Inc. Chief Executive Tim Cook this week reaped the biggest chunk so far of the mega-stock grant he received when was named CEO in 2011. In a federal filing, Mr. Cook said he had received shares of Apple valued around $135 million. He sold roughly a quarter, forefeited more than half to cover taxes and will hold the rest.

Canada auto union girds for strike. Unifor, the union that represents most Canadian autoworkers, said Sunday its members voted for a strike mandate, Reuters reports. The union, which represents more than 20,000 members, is pushing General Motors Co., Fiat Chrysler Automobiles NV, and Ford Motor Co. to further invest in Ontario, Canada's auto hub. The current contract expires on Sept. 19.

Electric-car popularity accelerates. In 2015, about one in every 150 cars sold in the U.S. had a plug and a battery. But mass adoption of electric vehicles is coming much sooner than most people realize, Christopher Mims writes. One big leap is in batteries. A typical electric vehicle today costs $30,000 and will go about 100 miles on a charge, if that. Within a year, you'll be able to get double that range for just a little more money.

No love in the Farm Belt. An annual gathering of thousands of farmers and the country's biggest agribusiness starts Tuesday against one of the gloomiest economic backdrops for the U.S. Farm Belt in years. Companies will introduce new models of tractors and combines, as well as the seeds and other equipment that are pushing productivity in the fields to record levels, and assign marketing teams to gather direct feedback from farmers about market conditions and equipment performance.

Lowe's taking action against Woolworths. Lowe's Cos., the No. 2 home-improvement chain, is taking legal action against Woolworths Ltd., Australia's No. 1 grocery chain, Reuters reports. Woolworths, which last week said it would exit a hardware joint venture with Lowe's, said it hadn't yet been served with documents, while Lowe's in a statement accused Woolworths of "oppressive conduct."

REGULATION

The Internal Revenue Service headquarters. Andrew Harrer/Bloomberg News

Strapped IRS ends program. The Internal Revenue Service, lacking sufficient budget, is halting a program that lets large companies resolve tax issues before filing returns, Accounting Today reports. No new taxpayers will be accepted into the Compliance Assurance Process program for the 2017 application season, which starts next month.

FASB issues cash-flows standard. The Financial Accounting Standards Board on Friday issued a new standard for reporting cash-flow statements, in an effort to streamline reporting and clarify aspects of generally accepted accounting principles that are unclear or absent, the Journal of Accountancy reports.

Drones get starter rules. The first detailed U.S. rules for flights of small commercial drones go into effect Monday, including nationwide licensing requirements for pilots and a ban on nighttime operations. But the long-awaited move won't satisfy pent-up demand for more-complex uses of unmanned aircraft, such as at higher altitudes and beyond the sight of operators, and it doesn't approve aerial vehicles substantially heavier than the 55-pound limit covered by the regulations.

EARNINGS

The logos of the British brands Jaguar and Land Rover. Agence France-Presse/Getty Images

Jaguar bites Tata. Sluggish sales at Jaguar Land Rover Automotive PLC drove parent Tata Motors Ltd. to a more than 25% decline in third-quarter net profit. The pair of luxury brands has become the Mumbai company's biggest earnings driver in the eight years since Tata bought them from Ford Motor Co., but now they face slowing demand around the globe.

Big Lots sales soft. Big Lots Inc. on Friday reported soft comparable-store sales and a revenue decline but raised its profit forecast for the year. The lackluster results follow recent disappointments from other discount retailers.

ECONOMY

The Union Jack flies over the Bank of England in London. BLOOMBERG NEWS

Brexit fears overdone? Early data so far suggest the British decision to leave the European Union could be another example of experts predicting dire consequences to political decisions that end up proving overheated. Economists wade in muddy waters when they try to extrapolate the economic consequences of political events, especially ones with few or any past corollaries.

Japan pension fund might plow into stocks. Japan's Government Pension Fund, the world's largest, is coming off losses that might lead to a rebalancing of its portfolio, Bloomberg reports. If the $1.3 trillion fund wants to keep its asset allocation at 25% domestic stocks and 35% domestic bonds, Bloomberg calculates it could spend $52 billion on Japanese stocks and sell $55 billion in Japanese bonds.

CFO MOVES

BoomTown Accelerator, a closely held Boulder, Colo. provider of support curriculum for start-up companies, named Jason Searfoss finance chief. Mr. Searfoss will manage BoomTown's financial strategy and investor relations, plus head its financing and fundraising curriculum. Compensation details were not disclosed. He was most recently CFO of Longford Capital Management LP, a litigation-finance company, and was on its investment committee.

The Morning Ledger from CFO Journal cues up the most important news in corporate finance every weekday morning. Send us tips, suggestions and complaints: maxwell.murphy@wsj.com. Get the free Morning Ledger emailed to you each weekday morning by clicking here, or at: http://on.wsj.com/TheMorningLedgerSignup