Good morning. Happy Thursday.
The Asian/Pacific markets leaned to the upside. Japan, China, Hong Kong, South Korea did well while India and Indonesia were weak. Europe, Africa and the Middle East currently lean to the upside. Turkey, Germany, South Africa, Finland, Israel, Italy and Sweden are up; Greece and Norway are down. Futures in the States point towards a positive open for the cash market.
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VIDEO: Is the Stage Set for a Monster Rally
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The dollar is up. Oil is down; copper is up. Gold and silver are up. Bonds are up.
Stories/News from Seeking Alpha…
The fun begins shortly with the ECB, then shifts to a likely Fed rate cut next Wednesday, as well as additional stimulus from the Bank of Japan and Swiss National Bank in the coming week. Today also marks the final stand for Mario Draghi, who had hoped to close out his eight-year term as ECB president with a modest rate increase. Investors are instead pricing in a possible restart of the central bank’s QE program and deeper negative interest rates, in a final attempt to ignite growth and inflation across the eurozone. In recent years, the region has been plagued by a myriad of political challenges, Brexit uncertainty and the ongoing trade war between Washington and Beijing.
Futures bounce
The Dow Jones Industrial Average is primed for a seven-day winning streak as President Trump offered a “goodwill gesture” to China, suggesting potential progress in October talks. U.S. futures gained on the move, which will delay increased tariffs (25% to 30%) on $250B worth of goods by two weeks until Oct. 15. Caution is still in the air… While such de-escalation in tensions between the two countries is welcomed, it’s still difficult to see both sides reaching any “real resolution” anytime soon, said Fitch’s James McCormack.
Up in smoke
The Trump administration is prepping a ban on flavored e-cigarettes as federal agencies probe an outbreak of a lung problem that killed at least six people and reportedly led to the sickness of hundreds of others. Amid a crackdown on vaping in the U.S., Juul (JUUL) is entering China, with online storefronts on e-commerce sites owned by Alibaba (NYSE:BABA) and JD.com (NASDAQ:JD). More trouble in the smoke-sphere? British American Tobacco (NYSE:BTI) is axing 2,300 employees globally by January in a move that will impact over 20% of its senior roles.
Opioid crisis settlement
Purdue Pharma has secured support from 23 states and thousands of local governments for a multibillion-dollar deal that could enable the drugmaker to resolve much of the opioid litigation it faces through a planned bankruptcy restructuring, WSJ reports. Resolving the entirety of the litigation at once has proved challenging and the settlement still faces strong opposition. The deal would see Purdue’s owners, the Sackler family, contribute $3B over several years (and potentially another $1.5B or more), as well as exiting the company, which would emerge from bankruptcy run by trustees tasked with paying out claims.
OPEC meeting
Traders continue to watch the World Energy Congress in Abu Dhabi for headlines that could move crude prices. OPEC+ is scheduled to hold its ministerial monitoring committee meeting on the sidelines of the conference that includes Saudi Arabia’s new oil minister. “To achieve market stability, it’s important we sustain a high level of cohesiveness,” Prince Abdulaziz bin Salman said ahead of the gathering.
Huge crude surplus
“Booming shale production has allowed the U.S. to close in on, and briefly overtake, Saudi Arabia as the world’s top oil exporter,” the IEA said in its closely-watched monthly report. It comes at a time when the U.S. is actively pursuing “energy dominance,” putting downward pressure on prices at a time when the market is already struggling to cope with too much supply. “The installation of the necessary pipelines and terminals is continuing apace, which will ensure that the trend continues.”
Operation Yellowhammer
Rising food and fuel prices, and a disruption of cross-border financial services, are among the possible consequences of a no-deal Brexit, according to a secret file the U.K. government was forced to publish on Wednesday evening. The content of the five-page document, code-named Operation Yellowhammer, is similar to the plan leaked last month to the Sunday Times, but was dismissed by the government as out of date. Where that paper was described as a “base case,” the new file claims to be a “worst-case scenario.”
IPO flakiness
Anheuser-Busch InBev (NYSE:BUD) is continuing to explore an IPO in Hong Kong of its Asia Pacific unit, Budweiser Brewing Company APAC (BUDBC), two months after it pulled the planned listing. The world’s largest brewer was aiming to sell as much as $9.8B in Budweiser stock, but then offloaded its Australian subsidiary for $11.3B, to seek relief from its heavy debt burden. An aggressive spending spree in recent years left the Belgian brewer with more than $100B in debt at a time when beer sales are slowing worldwide.
Baker Hughes independent again
Losing majority control of the oil and gas company, General Electric (NYSE:GE) will reduce its ownership in Baker Hughes (NYSE:BHGE) to 38.4% from 50.4% by June-end, aiming to score $2.7B in the process. It’s raising the amount through a public offering of 115M Baker Hughes Class A shares priced at $21.50 each, and through a private sale of $250M Class B Baker Hughes shares. GE expects to continue divesting the remainder of its holding in the oilfield services provider over time.
What else is happening…
Groupon (NASDAQ:GRPN) pursuing purchase that could include Yelp (NYSE:YELP).
Walmart’s (NYSE:WMT) ‘unlimited’ grocery delivery goes nationwide.
EV push… Toyota (NYSE:TM) testing solar-powered Prius.
SmileDirectClub (NASDAQ:SDC) said to price IPO above range.
Blackstone (NYSE:BX) closes biggest-ever $20.5B real-estate fund.
Yahoo Japan (OTCPK:YAHOY) buys $3.7B stake in fashion e-tailer Zozo (OTCPK:SRTTY).
Aramco (ARMCO) taking careful steps over IPO legal risk.
Wednesday’s Key Earnings
Aurora Cannabis (NYSE:ACB) -10.2% posted weak earnings guidance.
Oracle (NYSE:ORCL) -4% AH on revenue miss, CEO time off.
Today’s Economic Calendar
8:30 Initial Jobless Claims
8:30 Consumer Price Index
10:30 EIA Natural Gas Inventory
1:00 PM Results of $16B, 30-Year Note Auction
2:00 PM Treasury Budget
4:30 PM Money Supply
4:30 PM Fed Balance Sheet