Good morning. Happy Friday. Happy Options Expiration Day.
The Asian/Pacific markets leaned to the downside. Japan, India, Australia and the Philippines closed up; China, Hong Kong, South Korea, Taiwan, Indonesia and Singapore posted losses. Europe, Africa and the Middle East are currently mostly down. Denmark, Norway, Israel and Saudi Arabia are up; the UK, Poland, France, Germany, South Africa, Switzerland, Kenya, Hungary, Spain, the Netherlands, Italy, Belgium, Austria and Sweden are down. Futures in the States point towards a moderate gap down open for the cash market.
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The dollar is down. Oil is up; copper is down. Gold and silver lean down. Bonds are up.
Stories/News from Seeking Alpha…
A fresh bout of risk aversion is hitting global stocks after tough words on trade from Beijing suggested that while a potential U.S.-China deal could happen further into the future, its impact on the world economy would be far more immediate. The Communist Party’s People’s Daily used a front page commentary to evoke the patriotic spirit of past wars, saying its trade battle would never bring China down. Stocks in Shanghai fell 2.5% on the news, while Dow futures are off more than 100 points. Other fears plaguing the markets are the prospect of European auto tariffs. While reports this week pointed to a delay, the White House has until midnight to decide on the levies.
Pound’s worst week since October
Six weeks of talks between Theresa May and the opposition Labour Party have come to a close without an agreement as Jeremy Corbyn told reporters that discussions had gone as far as they can go and his party will oppose her Brexit deal. On Thursday, May agreed to set a timetable for her departure as prime minister in the first week of June, while political rival Boris Johnson threw his hat in the ring for leadership of the Conservative Party. Sterling -0.3% to below $1.28.
Amazon squares up to Uber
Amazon (NASDAQ:AMZN) is investing millions in Deliveroo as it leads a $575M funding round that includes existing investors T. Rowe Price (NASDAQ:TROW), Fidelity Management and Greenoaks. Deliveroo, which has raised a total of $1.53B since it launched in 2013, is a British company that allows users to order food from nearby restaurants using an app. Its U.K. rivals include Uber Eats (NYSE:UBER) and Just Eat (OTCPK:JSTTY), but the firm operates across 14 markets including Australia, Germany, Hong Kong and the UAE.
Chinese Starbucks challenger prices IPO
Luckin Coffee (LK), which begins trading today on the Nasdaq, has priced its IPO at $17 per share – the higher end of its indicated range – marking the biggest U.S. float by a Chinese firm this year. In a sign of strong demand, Luckin sold 33M American Depositary Shares – upsizing from the 30M originally planned – and raised $561M to give the Beijing-based coffee chain a market valuation of roughly $4B. Luckin currently operates 2,370 stores across China and plans to open 2,500 more this year with the goal of dethroning Starbucks (NASDAQ:SBUX) as the country’s largest coffee chain.
Cryptos tank following weeks of recovery
While the move didn’t appear to have a particular trigger, a plunge was seen across the crypto space overnight following a strong recovery since early April. Bitcoin (BTC-USD) slid 10% to $7,215, according to Coindesk, while the price of Ethereum (ETH-USD) fell 8% to $241 and Ripple (XRP-USD) slipped 15% to $0.3993. “This last drop was likely caused by a combination of profit-taking and also algorithmic trading compounding the swift fall,” said Jehan Chu, co-founder of Kenetic Capital. “We can expect these types of steep rises and drops to continue for some time until institutional investors grow market volume.”
Renault-Nissan merger looking less likely
Hiroto Saikawa is staying on as CEO of Nissan Motor (OTCPK:NSANY) as the company backed the protege of former boss Carlos Ghosn as well as a new board with a majority of independent directors. Saikawa’s reappointment is likely to be seen as a rebuff to Renault (OTCPK:RNLSY), which has been pushing for leadership change at Nissan as a prelude to merger talks due to his opposition of full integration. Their alliance’s unequal relationship – smaller Renault has the bigger stake in Nissan – has long been a source of friction.
Microsoft deal, buyback boosts Sony
Soaring to levels not seen since December 2018, Sony (NYSE:SNE) shares closed today’s session nearly 10% higher in Tokyo. The jump followed the company’s announcement that it would repurchase up to 4.8% of its total number of shares issued – worth up to ¥200B ($1.82B). Sony further announced a partnership with competitor Microsoft (NASDAQ:MSFT), with the gaming powerhouse set to use its Azure cloud services for streaming games and media, as well as a deal to develop chips for intelligent image sensors.
737 MAX software update complete
Boeing (NYSE:BA) closed the session up 2.4% on Thursday after completing development of a software update for its 737 MAX jets, along with associated simulator testing and engineering test flights. “We’re making clear and steady progress and are confident that the 737 MAX with updated MCAS software will be one of the safest airplanes ever to fly,” CEO Dennis Muilenburg declared. The 737 MAX has flown with the updated MCAS software for more than 360 hours on 207 flights to date. Boeing will also provide additional information to address FAA requests.
What else is happening…
“2019 has been a difficult for retail,” says Colorado Wealth Management Fund, but “many REITs are finding ways to adapt.”
Bad day for semiconductors following Huawei ban.
‘Silver bullet’ defense for Bayer (OTCPK:BAYRY) in Roundup litigation?
Australians head to the polls with economy on the ballot.
Multinationals eye weekend tax vote in Switzerland.
Again? SpaceX (SPACE) postpones Starlink launch for ‘about a week’.
Contibutor Stefan Redlich comments on AT&T (NYSE:T) with the stock still trading sideways.
Thursday’s Key Earnings
Applied Materials (NASDAQ:AMAT) +6.1% AH topping expectations.
Baidu (NASDAQ:BIDU) -9.9% AH on EPS miss, low Q2 revenue outlook.
Nvidia (NASDAQ:NVDA) +2% AH after Q1 beats, gaming recovery.
Pinterest (NYSE:PINS) -15.4% AH posting wider loss, downside guidance.
Walmart (NYSE:WMT) +1.4% amid solid U.S. comparable sales.
Today’s Economic Calendar
10:00 Quarterly Services Report
10:00 Consumer Sentiment
10:00 Fed’s Clarida Speech
10:00 E-Commerce Retail Sales
10:00 Leading Indicators
11:15 Fed’s Williams Speech
1:00 PM Baker-Hughes Rig Count
1:40 PM Fed’s Clarida: “The Federal Reserve’s Review of Its Monetary Policy Strategy, Tools, and Communication Practices”
2:00 PM Fed’s Williams Speech
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings from Morningstar