Before the Open (Nov 4-8)

Good morning. Happy Friday.
The Asian/Pacific markets closed mostly down. Japan and New Zealand did well, but China, Hong Kong, South Korea, India and Singapore were weak. Europe, Africa and the Middle East currently lean down. Denmark and Saudi Arabia are up, but the UK, Poland, Germany, Russia, South Africa, Spain and Austria are down. Futures in the States point towards a down open for the cash market.
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The dollar is up. Oil and copper are down. Gold and silver are down. Bonds are down.
Stories/News from Seeking Alpha…
Major profits at Disney’s theme parks (+17% to $1.4B) and movie studio divisions (+79% to $1.1B) pushed earnings past Wall Street targets late Thursday, more than offsetting a decline at the company’s media networks division and sending shares up 5% AH. The company said it also spent less than it had projected on its big plunge into streaming ahead of Disney+’s (NYSE:DIS) launch next week. “We’re making a huge statement about the future of media and entertainment and our continued ability to thrive in this new era,” CEO Bob Iger told analysts on a conference call.
Boon for Hong Kong
Reports overnight said Alibaba (NYSE:BABA) is planning to launch a Hong Kong share offering in the final week of November, a move that would raise $10B-$15B as the world’s largest-ever cross-border secondary listing. The e-commerce giant already holds the record for the world’s largest IPO with a $25B float in New York in 2014. Alibaba had been working on an August listing in Hong Kong, but the transaction was put on hold due to anti-government protests in the city. BABA +0.7% premarket.
Shifting retail landscape
Another wave of Sears (OTCPK:SHLDQ) store closures is on the horizon as billionaire owner Eddie Lampert struggles to return the big-box retailer to its former glory days. Following the closures, there will be just 182 Sears/Kmart stores in operation, down from 425 locations as of February, when Lampert rescued Sears from bankruptcy proceedings in a $5.2B deal. The company has posted seven straight years of losses and shuttered hundreds of outlets under Lampert’s leadership as shopping trends shifted online or to rivals like Walmart (NYSE:WMT).
Monetizing WhatsApp
After buying the app for $19B in 2014, Facebook (NASDAQ:FB) is finally building out the service’s e-commerce tools by launching a catalog feature where businesses can display a “mobile storefront” showcasing their wares with images and prices. Facebook similarly added a shopping feature to Instagram in March that lets users click a “checkout” option on items tagged for sale (though transactions there happen directly within the app).
Record highs
Futures are inching down after yesterday gains, when the Dow and S&P 500 notched record closing highs, as traders wait for the next catalyst to move stocks higher. “Any kind of uncertainty there, with the market at all-time highs, and it’s easy for traders and institutions to press the sell button and take some money off the table,” said Alan Lancz, president of investment advisory Alan B. Lancz & Associates. Reports have suggested that the White House’s plan to roll back China tariffs faces internal opposition, though President Trump said the two sides had come to a substantial “Phase One” trade deal on IP, financial services and big agricultural purchases.
Tariff threat avoided on EU cars
Despite U.S. steel and aluminum tariffs on Europe, as well as $7.5B of duties on European goods, President Trump won’t take the next step in imposing tariffs on European cars next week. That’s according to Jean-Claude Juncker, the outgoing president of the European Commission. Trump has until November 14 to decide whether to apply new duties on European carmakers, after arguing in May that American imports of European autos pose a national security threat to the U.S.
Climate change economics
A “green interest rate” is one of the topics on the calendar today as the San Francisco Fed convenes the U.S. central bank’s first-ever conference on the “Economics of Climate Change.” The event is so oversubscribed, a webcast has been created to meet demand. “It’s important for us from a monetary policy perspective to know what the potential growth rate of the economy is and if climate events or climate risk is going to shave that off, even if it’s over the long term,” San Fran Fed chief Mary Daly said earlier this week.
Move towards looser fiscal policy
“To speed up our recovery [from natural disasters], deal with risks from abroad and accelerate productivity growth, we are formulating an economic plan along the lines of a 15-month budget,” said Yoshihide Suga, Japan’s chief cabinet secretary. It would be Japan’s first economic stimulus package since 2016. The BOJ has already cut overnight interest rates to -0.1% and purchased trillions of yen worth of government bonds, but the flat yield curve now makes it hard for banks and insurers to turn a profit.
How big is the 737 NG cracking problem?
Indonesia’s Lion Air has found “pickle fork” cracks on two 737 NGs with fewer flights than the FAA’s safety directive after reports surfaced last week that Qantas (OTCPK:QABSY) and Southwest Airlines (NYSE:LUV) found the same problems on planes that did not require urgent inspections. It’s not good news for Boeing (NYSE:BA), which is already deep in the midst of the 737 MAX crisis (and involved Lion Air). Repairing the cracks requires grounding the airplane, with remedial work costing an estimated $275K per aircraft, according to aviation consultancy IBA. BA -0.2% premarket.
Subpoenas in California emissions probe
The DOJ has issued civil subpoenas to Ford (NYSE:F), Honda (NYSE:HMC), BMW (OTCPK:BMWYY) and Volkswagen (OTCPK:VWAGY) that reached a tailpipe emissions deal this summer with the state of California. At issue are details of how the agreement was reached and if the automakers engaged in improper conduct. The Trump administration in September issued a determination that California cannot set its own vehicle emission standards and zero-emission vehicle mandates, which the DOJ said could raise antitrust concerns.
What else is happening…
Gap (NYSE:GPS) slashes profit outlook, says CEO will step down.
Rare Keystone permit in focus after TC Energy (NYSE:TRP) spills.
New York AG drops two counts against Exxon (NYSE:XOM) as fraud case concludes.
MSG (NYSE:MSG) approves split of sports, entertainment units.
USDA preps second tranche of trade aid for farmers.
Thursday’s Key Earnings
Activision Blizzard (NASDAQ:ATVI) -2.3% AH amid lukewarm Q4 guidance.
Booking Holdings (NASDAQ:BKNG) +4.7% AH increasing gross bookings.
Brookfield Infrastructure (NYSE:BIP) +0.7% reflecting strong organic growth.
Cardinal Health (NYSE:CAH) +3.4% beating expectations.
Disney (DIS) +5.3% AH as theme parks, films paced Q4 beat.
Dropbox (NASDAQ:DBX) -1.2% AH despite higher subscriber additions.
GoPro (NASDAQ:GPRO) +7.7% AH following an earnings topper.
Teva Pharma (NYSE:TEVA) +4.6% advancing its turnaround.
Today’s Economic Calendar
10:00 Consumer Sentiment
10:00 Wholesale Trade
11:45 Fed’s Daly Speech
1:00 PM Baker-Hughes Rig Count
8:00 PM Fed’s Williams Speech
8:35 PM Fed’s Brainard Speech
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Good morning. Happy Thursday.
The Asian/Pacific markets leaned up. China, Hong Kong, India, Australia, Thailand and the Philippines posted gains while Taiwan and India dropped. Europe, Africa and the Middle East are currently doing well overall. Denmark, Poland, Turkey, Germany, Russia, Portugal, Austria, Saudi Arabia and the Czech Republic are leading. Futures in the States point towards a moderate gap up open for the cash market.
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The dollar is flat. Oil and copper are up. Gold and silver are down. Bonds are down.
Stories/News from Seeking Alpha…
U.S. stock index futures turned sharply higher overnight, climbing 0.6%, as China’s Ministry of Commerce said the world’s two largest economies had agreed to remove duties on each other’s goods in phases. “If China, U.S. reach a phase-one deal, both sides should roll back existing additional tariffs in the same proportion,” declared spokesman Gao Feng. That would potentially provide a road map to end the bruising trade war after reports yesterday suggested a meeting between President Trump and Xi Jinping could be postponed until December (delaying a chance for the two leaders to sign an interim trade deal).
Disney + earnings
Disney (NYSE:DIS) will take centerstage later today when it reports fiscal-fourth results after the market close. Analysts are anticipating a challenging quarter for the Mouse House, specifically at its media networks division due to increased spending on the Disney+ streaming service (set to launch this Tuesday). However, Disney’s film unit will have likely gotten a strong boost – thanks in part to The Lion King – and its parks segment is also expected to have performed well during the quarter.
Google may modify ad policy
Google (GOOG, GOOGL) is considering changes to its political ad policy following a shot across the bow by Twitter (NYSE:TWTR), which said it would ban all political ads in a thinly veiled jab at its megatech rivals. Google’s been holding internal meetings on the issue and is expected to share more with employees this week, WSJ reports. Twitter announced its move in the wake of heavy public discussion about Facebook’s (NASDAQ:FB) refusal to ban political ads, a decision that Mark Zuckerberg has publicly defended.
Big Tech investigations
Twitter (TWTR) shares fell 2.5% premarket after the DOJ charged two former employees with spying for Saudi Arabia in part by digging into user accounts on the service. California also revealed for the first time an 18-month probe into Facebook’s (FB) privacy practices and accused the social media giant of stonewalling the investigation by failing to turn over Zuckerberg’s emails. Lastly, Alphabet’s (GOOG, GOOGL) board of directors is inquiring how executives handled claims of sexual harassment and other misconduct, including the behavior of Chief Legal Officer David Drummond.
Kicking off 6G development
It was only last week that China launched commercial services for its superfast 5G mobile networks, but the country is not stopping there. The government has charged 37 experts at various universities and institutes to oversee the research of 6G, according to a statement by the Ministry of Science and Technology. While 5G is known to have data transmission speeds at least 10x greater than 4G – rolled out in 2009 – it’s too early to tell what 6G could be or what technologies it would advance.
BOE rate decision ahead
The latest in Brexit continues this morning as the Bank of England announces its latest interest rate decision and releases new economic forecasts – the first it’s made since the departure date from the EU was delayed. Many expect the bank to cut its outlook for growth and inflation, though it has drawn criticism in the past from Brexit supporters for what they see as overly gloomy predictions. The BOE will then enter a pre-election quiet period, but will re-emerge after the Dec. 12 vote with the question of who will replace Governor Mark Carney.
Production cuts ahead of Aramco IPO?
Saudi Arabia, the de facto leader of OPEC, is pressuring other members in the cartel to slash output to help Aramco’s (ARMCO) IPO set for December, WSJ reports. While the oil giant’s growth assumptions, as well as the dividend it’s promising investors, are predicated on Brent oil prices of about $65 a barrel, some do not expect another supply cut at this month’s OPEC meeting. “The last thing OPEC wants is to give a second wind to shale producers here in the U.S.,” Tariq Zahir of Tyche Capital Advisors told MarketWatch.
Tiffany wants a higher offer
$120 per share is too low for the basis of negotiations, according to Tiffany’s (NYSE:TIF) board, which asked Bulgari owner LVMH (OTCPK:LVMHF) to raise its $14.5B takeover bid. Tiffany informed LVMH it could open its books and provide confidential due diligence if the French luxury group sweetens the pot, sources told Reuters. Under CEO Alessandro Bogliolo, former head of fashion firm Diesel and a Bulgari alumnus, Tiffany has been developing its e-commerce business and is trying to court younger shoppers.
Backlash against vaping
A week after banning online sales of e-cigarettes, China outlined plans to prohibit vaping in public places to stem a “distinct increase” in activity among teenagers. The stance would put China squarely with countries that have outlawed e-cigarettes outright, including India, Brazil and Singapore. Already the world’s largest tobacco market, China’s e-cig market size rose from $451M in 2016 to $718M in 2018, according to estimates from L.E.K. Consulting.
What else is happening…
EU trims growth forecasts for eurozone.
Facebook (FB) crypto chief: ‘Bitcoin isn’t a currency’
All Airbnb (AIRB) listings will be verified by December 2020.
SeaWorld (NYSE:SEAS) has a new chief executive.
Regulators find gaps in 737 MAX (NYSE:BA) software fix documentation.
Activist pressing MSG (NYSE:MSG) to sell stakes in Knicks, Rangers.
Exxon (NYSE:XOM) witness challenges New York fraud claims.
Wednesday’s Key Earnings
Baidu (NASDAQ:BIDU) +4.3% AH beating expectations.
Barrick Gold (NYSE:GOLD) +2.2% seeing FY output at the high end.
CenturyLink (NYSE:CTL) +1.1% AH posting EBITDA margin growth.
CVS Health (NYSE:CVS) +5.4% boosted by Aetna sales.
Energy Transfer (NYSE:ET) -3.2% AH missing estimates.
Expedia (NASDAQ:EXPE) -13.3% AH falling short of forecasts.
Fitbit (NYSE:FIT) -0.7% AH following price cuts.
Fox (NASDAQ:FOX) +3.8% AH as broadcasting drove a Q1 beat.
Qualcomm (NASDAQ:QCOM) +5% AH jumping on an earnings topper.
Roku (NASDAQ:ROKU) -15.1% AH despite a smaller-than-expected loss.
Square (NYSE:SQ) +1.3% AH as GPV rose 25% Y/Y.
Wynn Resorts (NASDAQ:WYNN) +1.6% AH despite weak Macau numbers.
Today’s Economic Calendar
8:30 Initial Jobless Claims
10:30 EIA Natural Gas Inventory
1:00 PM Results of $19B, 30-Year Note Auction
1:05 PM Fed’s Kaplan Speech
3:00 PM Consumer Credit
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
7:10 PM Fed’s Kaplan: Monetary Policy
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Good morning. Happy Wednesday.
The Asian/Pacific markets closed with a lean down. India and Singapore closed up; China, New Zealand, Australia, Indonesia and the Philippines closed down. Europe, Africa and the Middle East are currently quiet and mostly unchanged. Turkey and South Africa are up; Greece, Austria and Saudi Arabia are down. Futures in the States point towards a positive open for the cash market.
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The dollar is down. Oil and copper are down. Gold is up; silver is down. Bonds are up.
Stories/News from Seeking Alpha…
SoftBank’s first quarterly loss in 14 years is putting a spotlight on founder Masayoshi Son’s high-risk approach of investing in cash-burning startups, as he attempts to raise a second giant investment fund. Recording an operating loss of ¥704B ($6.46B) in the third quarter, SoftBank marked down the total value of WeWork’s (WE) equity to $7.8B, a major write-off given the office-sharing company was valued at $47B before its attempt to go public backfired. While SoftBank (OTCPK:SFTBY) hasn’t calculated the effect of WeWork’s $9.5B rescue package on its earnings, the Japanese group said it suffered an $8.9B hit at its Vision Fund.
More gloom in the IPO market
Due to concerns over rising rents, Jersey City residents voted overwhelmingly in favor of stricter regulations on short-term rentals, rebuking Airbnb (AIRB), which spent at least $4.2M on an effort to sway voters. Officials at Airbnb fear the new proposed regulations would mean an outright ban on listings in New Jersey and that it could mean an end to the company altogether as it prepares to go public. In related news, Peloton (NASDAQ:PTON) shares fell 7.6% on Tuesday amid profit concerns at the latest loss-making company to go public.
Xerox weighs takeover offer for HP
In a deal that would unite some old-line tech names, Xerox (NYSE:XRX) is considering a bold takeover of HP (NYSE:HPQ), WSJ reports. A cash-and-stock offer would follow closely on news that Xerox was selling its stake in a 57-year-old joint venture with Fujifilm (OTCPK:FUJIY) and an announcement from CEO John Visentin that the company would get aggressive. At a market cap of about $27B, HP is more than three times Xerox’s size, but the latter reportedly has an informal funding commitment from a major bank. HPQ +9.8% premarket.
Futures hug the flatline
Wall Street almost netted another hat trick on Tuesday, with the Dow and Nasdaq scoring new records, though the S&P 500 fell back slightly. Futures are now holding steady, consolidating gains made over the last three sessions due to lingering concerns over the outcome of U.S.-China trade talks. Traders are also preparing for the latest round of earnings, including CVS (NYSE:CVS) and Qualcomm (NASDAQ:QCOM), as FactSet data indicates that 75% of S&P 500 companies which reported thus far have topped analyst expectations.
Germany assuages factory fears
Economists are hailing today’s rise in German factory orders, and while the 1.3% monthly increase was “solid,” Oliver Rakau of Oxford Economics said it may not prevent the economy falling into recession (we’ll get those figures on Nov. 14). Orders from other countries in the 28-nation eurozone dropped 1.8% and manufacturing in the region on a whole is the weakest it’s been for seven years. Given two consecutive monthly declines in September and October, the latest results from Germany are helping the euro this morning, up slightly to $1.1082.
Walgreens may go private
Walgreens Boots Alliance (NASDAQ:WBA) is up another 1.6% premarket, after rising 2.6% on Tuesday, as reports suggested the U.S. drug store chain is exploring private equity interest. If a deal was struck, it would likely be one of the largest leveraged buyouts in history based off Walgreens’ $50B+ market cap. Several private equity firms would likely be involved, though many have long lost their appetite for teaming together on so-called club deals since the financial crisis.
One ad for ad-free Disney+
Although the Mouse House has promised not to show ads on Disney+, the streaming service will carry a one-time promo for cable channel Starz (NYSE:LGF.A). It will help the company get rights to show films like Star Wars: The Force Awakens, which had been licensed out to Starz before announcing the Disney+ plans in 2017. Launching next week, Disney+ will cost $6.99 per month, with the option of bundling the service, ESPN+ and ad-supported Hulu for $12.99/month.
Tesla going all out in China
Gearing up for the open of its $2B Shanghai plant, its first overseas factory, Tesla (NASDAQ:TSLA) is moving away from the approach CEO Elon Musk announced in March, when he said the EV maker would cut costs and shut many of its retail stores worldwide. According to documents seen by Reuters, the company plans to double its service centers to 63 from 29, boost fast charging stations by 39% to 362 and convert some of its showrooms into “Tesla Centers.” It appears to be a different strategy for Tesla, with its China unit also offering racing events and parties despite Musk’s open disdain for marketing.
Some driverless car crash statistics
Uber’s (NYSE:UBER) self-driving test vehicle that struck and killed an Arizona woman in 2018 had software flaws, according to the National Transportation Safety Board, and lacked programming to either recognize or respond to the presence of jaywalkers on the road. In fact, Uber’s autonomous test vehicles had been involved in 37 crashes in the 18 months before the fatal March 2018 incident. Following the crash, Arizona suspended Uber’s ability to test self-driving cars on the state’s public roads, though the company later resumed tests in Pennsylvania.
What else is happening…
Facebook (NASDAQ:FB) reveals another privacy breach.
Oil falls on buildup in U.S. crude stocks.
Workers plug Keystone (NYSE:TRP) pipeline in North Dakota.
FCC approves merger of T-Mobile (NASDAQ:TMUS), Sprint (NYSE:S).
AT&T pays $60M in FTC ‘unlimited’ claim case.
AstraZeneca (NYSE:AZN) launches $1B China investment fund.
Tuesday’s Key Earnings
Allergan (NYSE:AGN) -0.2% posting flat adjusted EPS.
Chesapeake Energy (NYSE:CHK) -18% drowning in debt.
Emerson Electric (NYSE:EMR) +0.8% bowing to activist D.E. Shaw.
LendingClub (NYSE:LC) +3.1% AH as loan originations rose 16%.
Peloton (PTON) -7.6% on profit concerns.
Match Group (NASDAQ:MTCH) -15.4% posting disappointing guidance.
Newmont Goldcorp (NYSE:NEM) -3.5% on higher costs, output guidance cut.
Regeneron (NASDAQ:REGN) +6.9% topping expectations.
WW International (NASDAQ:WW) -13.9% amid weaker subscriber count.
Today’s Economic Calendar
7:00 MBA Mortgage Applications
8:00 Fed’s Evans Speech
8:30 Productivity and Costs
9:30 Fed’s Williams Speech
10:30 EIA Petroleum Inventories
1:00 PM Results of $27B, 10-Year Note Auction
3:15 PM Fed’s Harker Speech
6:30 PM Fed’s Williams Speech
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Good morning. Happy Tuesday.
The Asian/Pacific markets closed mostly up. Japan, China, Hong Kong, South Korea, Taiwan, Indonesia and the Philippines did well. Europe, Africa and the Middle East currently lean to the upside. Turkey, Russia, South Africa, Belgium and Saudi Arabia are up; Denmark, Greece and Sweden are down. Futures in the States point towards a positive open for the cash market.
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The dollar is up. Oil and copper are up. Gold and silver are down. Bonds are down.
Stories/News from Seeking Alpha…
More highs are in store for the three major U.S. stock indexes as reports suggest the Trump administration is weighing whether to drop existing tariffs on $112B of Chinese imports (which were introduced at a 15% rate on Sept. 1). The Dow, S&P 500 and Nasdaq are ahead by 0.4% as the concession is seen as pausing the U.S.-China trade war. “Phase One” of the pact would include Chinese purchases of American farm goods, rules to deter currency manipulation and some provisions to protect intellectual property and open up Chinese industries to U.S. firms.
Yuan strengthens past 7 per dollar
With the U.S. considering rolling back tariffs on Chinese imports, the yuan has strengthened beyond seven per dollar for the first time since August. The move, if confirmed, “can be regarded as a turning point” in the U.S.-China trade war,” according to Ken Cheung, a Mizuho currency strategist. Many had feared the prior tumble past the psychologically important level of 7 threatened to unleash a whole new front in trade hostilities – a currency war.
Rationale for T-Bill buying
“With roughly $2.4T of Treasury bills outstanding and daily turnover of around $95B, the bill market has substantial capacity to support our activity, and we expect to be able to maintain the current pace of Treasury bill purchases for some time,” said Lorie Logan, who is the acting leader of the Markets Desk at the New York Fed. “So far, reserve management purchase operations have proceeded smoothly,” she added, noting that the Fed “is prepared to adjust the pace and other parameters of the reserve management purchases as necessary.”
Notable tech names that don’t make money
Uber (NYSE:UBER) shares tumbled nearly 6% late Monday after reporting another mega $1.2B loss, though CEO Dara Khosrowshahi expects the company will be EBIDTA profitable in 2021 as it “improves global scale and efficiency” through technology and automation. Next up is Peloton (NASDAQ:PTON), which will release its first quarterly report since going public before the opening bell. Path to profitability? While analysts are expecting the exercise-equipment maker to post a loss of $0.40 cents per share, the Street is still bullish on the stock.
SoftBank’s new governance standards
The WeWork (WE) debacle is leading SoftBank (OTCPK:SFTBY) to adopt tougher governance standards as the Japanese group aims to reduce the outsized control of startup founders and restore confidence in the companies it backs. Under consideration are restrictions on dual-class share structures, board seats and voting rights. SoftBank is also set to write down at least $5B today due to a slump in the value of WeWork, as well as some other top holdings.
Xerox exits Fujifilm joint venture
Bringing an end to their 57-year-old joint venture, Xerox (NYSE:XRX) has agreed to sell its 25% stake in the business to Fujifilm (OTCPK:FUJIY) as part of a deal that will bring the company total proceeds of $2.3B. It will also dismiss a lawsuit filed by Fujifilm against Xerox and comes more than a year and a half after the two agreed to combine in a complex transaction that was sunk by shareholders Carl Icahn and Darwin Deason. The breakup of the JV (and dismissing the suit) could free both firms to make needed strategic shifts. XRX +3.8% premarket.
India pulls out of RCEP trade pact
Everything seemed to be going well at the 35th ASEAN Summit – after seven years of talks to conclude the Regional Comprehensive Economic Partnership – until India announced its withdrawal from the trade deal. “This reflects both our assessment of the current global situation as well as of the fairness and balance of the agreement,” said Vijay Thakur Singh, a diplomat in charge of East Asian relations for India. Moving on… The remaining 15 countries will continue working towards the pact that would cover nearly a third of the world’s GDP, while China announced that India is welcome to join the RCEP whenever it’s ready.
OPEC cuts oil demand forecasts
“The outlook for global growth, at least in the short- and medium-term, has been revised down repeatedly over the past year… as U.S. tight oil (shale), in particular, has again outperformed expectations,” OPEC wrote in its closely-watched annual World Oil Outlook. As a result, the 14-member group lowered its outlook numbers for global oil demand growth, to 104.8M barrels per day by 2024, and 110.6M bpd by 2040. OPEC’s production of crude oil and other liquids is also expected to decline to 32.8M bpd by 2024, compared with 35M bpd in 2019.
Cold weather forecasts boost NG
Nymex natural gas futures continue to climb, up 2.6% to $2.895/MMBtu, bringing their rally to 35% from a multi-year low hit three months ago. Prices soared more than 4% yesterday to their highest level since March, as forecasts call for cooler than expected temperatures across the U.S. in the coming days and weeks. Hedge funds and other speculative investors appear to be turning slightly less bearish, and analysts say an unwind of those bets can exacerbate bullish price moves such as the current one.
Iran nuclear deal unraveling
The EU remains committed to the 2015 Iran nuclear deal, though that depends on the Islamic State’s “full compliance,” as the accord continues to collapse following President Trump’s withdrawal from the agreement. Starting tomorrow, Tehran will begin injecting uranium gas into 1,044 centrifuges at its Fordow plant, after already going beyond the deal’s enrichment and stockpile limitations. European nations have so far been unable to give Iran a way to help it sell its oil abroad or access its banking system without restrictions as the country faces strict U.S. sanctions.
What else is happening…
Boeing (NYSE:BA) 737 MAX likely to return to European service in Q1.
McDonald’s (NYSE:MCD) HR chief departs after CEO firing.
$20 per hour… BofA (NYSE:BAC) accelerates plan on minimum pay.
Apple (NASDAQ:AAPL) commits $2.5B to California housing issues.
Did Vale (NYSE:VALE) CEO ignore warnings before deadly dam disaster?
Goldman (NYSE:GS) CEO latest to blast ECB’s negative rates.
Germany boosts subsidies for electric vehicles.
Lindsey Hoyle confirmed as the next U.K. Commons Speaker.
Monday’s Key Earnings
Marriott (NASDAQ:MAR) -1.7% AH giving weak full-year outlook.
Occidental Petroleum (NYSE:OXY) -0.5% AH amid Anadarko costs.
Realty Income (NYSE:O) +0.4% AH nudging up 2019 guidance.
Shake Shack (NYSE:SHAK) -16% on disappointing comparable sales.
Sprint (NYSE:S) -2.4% missing expectations.
Sysco (NYSE:SYY) -0.6% after mixed quarter.
Uber (UBER) -5.9% AH posting $1.2B loss, soft bookings.
Under Armour (NYSE:UAA) -18.9% on accounting probe, slashed outlook.
Today’s Economic Calendar
8:30 International Trade
8:55 Redbook Chain Store Sales
9:45 PMI Services Index
10:00 ISM Non-Manufacturing Index
10:00 Job Openings and Labor Turnover Survey
12:40 PM Fed’s Kaplan Speech
1:00 PM Results of $38B, 3-Year Note Auction
6:00 PM Fed’s Kashkari Speech
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Good morning. Happy Monday. Hope you had a good weekend.
The Asian/Pacific markets closed with solid gains. China, Hong Kong, South Korea, Taiwan, Malaysia, Thailand and the Philippines lead with gains greater than 1%. Europe, Africa and the Middle East are currently doing great. The UK, Poland, France, Turkey, Germany, Russian, Finland, Spain, Italy, Portugal, Austria and Sweden are leading. Futures in the States point towards a relatively big gap up open for the cash market.
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The dollar is up. Oil and copper are up. Gold and silver are up. Bonds are down.
Stories/News from Seeking Alpha…
Shares of the state-owned oil giant are set to begin trading on the Saudi stock market in early December, while the IPO prospectus will likely be released on Nov. 10. The Capital Market Authority did not list a time frame or say how much Aramco (ARMCO) would sell, but sources told Reuters the oil giant could offer 1%-2% of its shares on the local bourse, raising as much $20B-$40B. Producing one-tenth of the world’s crude output, Saudi Aramco is the world’s most profitable company, making $111B in net income in 2018.
McDonald’s CEO sacked over consensual relationship
A surprise announcement over the weekend revealed the ousting of McDonald’s (NYSE:MCD) CEO Steve Easterbrook for having a consensual relationship with an employee. “This was a mistake. Given the values of the company, I agree with the board that it is time for me to move on,” Easterbrook wrote in an email. Chris Kempczinski, who previously ran McDonald’s U.S. business, will replace him, though he will have big shoes to fill. MCD shares doubled during Easterbrook’s tenure as he revived all-day breakfast options and a charge into online ordering and delivery. MCD -2.2% premarket.
Under investigation
A new probe by the Justice Department and SEC is looking into Under Armour’s (NYSE:UAA) recognition of revenue, and whether numbers were shifted around to artificially improve results. The news surfaced before the athletic apparel company’s earnings report tomorrow, which will be released before the opening bell. Ahead of the results, Under Armour said it has been cooperating with federal authorities on the issue for a couple of years, and “firmly believes” its accounting practices and disclosures are appropriate.
Stocks push higher
Equities rose across the globe overnight, with Hang Seng climbing 1.7% to lead gains in Asia, the Europe Stoxx 50 up by 1% and DJIA futures pointing to another 100-point advance at the open. There’s lots of optimism surrounding trade. U.S. Commerce Secretary Wilbur Ross said positive talks being held with automakers in Europe and Japan may mean tariffs could be avoided on cars being imported into the U.S., while licenses for American firms to sell to Huawei will be granted “very shortly.” A surprise jobs number on Friday saw American employers add 128K jobs in October – comfortably beating an estimate of 89K – adding to the upbeat market sentiment.
RCEP trade deal coming soon
Driven in part by the U.S.-China trade war, Southeast Asian countries committed to signing a major Asia Pacific trade pact in 2020 that would cover a third of the globe’s gross domestic product. “This will significantly contribute to an open, inclusive and rules-based international trading system and expansion of value chains,” current chair Thailand announced at the 35th ASEAN Summit. RCEP involves all ten Southeast Asian nations and six of their large trading partners: China, Japan, South Korea, India, Australia, and New Zealand.
Fracking halted across the U.K.
The U.K. suddenly ordered a total freeze on fracking operations on Saturday, citing public safety after a series of tremors. It signals a major shift in policy for Boris Johnson’s conservative government, which previously supported the fracking industry as a way to cut Britain’s reliance on foreign energy imports. Business Secretary Andrea Leadsom told BBC Radio that the moratorium will stay in place for the foreseeable future, or until scientists say fracking can be done safely.
UAW president steps aside
Contract talks with Detroit automakers will not be impacted by the leave of absence of UAW President Gary Jones, who has been linked to an ongoing corruption probe by U.S. federal officials. That’s according to a statement from the union, which is “fighting tooth and nail to ensure our members have a brighter future.” Jones will be replaced on an acting basis by Rory Gamble, who recently led the team that negotiated a new labor deal with Ford (NYSE:F) that is awaiting final ratification. A deal with General Motors (NYSE:GM) has already been sealed, while talks with Fiat Chrysler (NYSE:FCAU) are set to begin shortly.
4-day workweek
Microsoft Japan (NASDAQ:MSFT) appears to have found the perfect recipe to Monday morning blues and it actually led to an almost 40% jump in productivity levels for its workforce. The firm experimented with a four-day workweek this past August – giving Fridays as paid leave – and 92% of employees said they were happy with the program by the end of its run. Printing 58.7% fewer pages and using 23.1% less electricity, Microsoft Japan is planning to conduct a similar work-life challenge this winter.
Lagarde: Let savers eat cake
“We should be happier to have a job than to have our savings protected,” declared Christine Lagarde as the incoming ECB President criticized Germany and the Netherlands for the sin of having a government budget surplus. Lagarde, of course, comes over from the IMF, an organization that has never met a currency debasement it wasn’t in favor of. Her comments suggest she’s not only going to continue flooding markets with euros, but she will now break from ECB tradition and go after individual states that don’t toe the line.
Hospital transparency rule delayed
Citing its intent to expand its plan to include health insurers, the White House is delaying the implementation of a rule requiring hospitals to disclose heretofore confidential rates for services. U.S. Centers for Medicare and Medicaid Services chief Seema Verma said the Trump administration prefers a less disjointed approach and will proceed expeditiously to release a combined plan this quarter to rein in ever-increasing healthcare costs. Hospital operators, which consider negotiated rates as contractual trade secrets, have stated publicly that they will sue to block the rule.
What else is happening…
Insurance investment income boosts Berkshire’s (BRK.A, BRK.B) Q3.
Disney’s (NYSE:DIS) Bob Iger on Star Wars: ‘Less is more.’
Malaysia snubs 1MDB offer from Goldman Sachs (NYSE:GS).
China is so far the best-performing market of 2019.
See statistics as tariff exclusion requests pile up.
Latest Brexit drama… MPs vote on new Commons Speaker.
Today’s Economic Calendar
Auto Sales
10:00 Factory Orders
12:30 PM TD Ameritrade IMX
3:05 PM Fed’s Daly Speech