Before the Open (Nov 18-22)

Good morning. Happy Friday.
The Asian/Pacific markets closed with a lean to the upside. Hong Kong, South Korea, Australia and Singapore did well; China and India were weak. Europe, Africa and the Middle East are currently mostly up. The UK, Denmark, Poland, Greece, South Africa, Switzerland, Norway, the Netherlands, Austria and the Czech Republic are doing well; the UAE is weak. Futures in the States point to a positive open for the cash market.
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The dollar is flat. Oil is down; copper is up. Gold and silver are up. Bonds are up.
Stories/News from Seeking Alpha…
Entering into the most profitable corner of the U.S. auto market, Tesla (NASDAQ:TSLA) has unveiled its all-electric pickup called Cybertruck. The futuristic, trapezoid-shaped vehicle will start at a competitive $39,900 – with 7,500 pounds of towing capacity and 250 miles of range per charge. Dual motor ($49.9K) and tri-motor models ($69.9K) extend towing capacity to 10K and 14K pounds, as well as a 300 and 500 mile range. Expected to arrive in late 2021 and 2022, the pickups also feature a cargo bed that can hold and charge an electric ATV (Tesla didn’t provide details).
Will Uber shut down of London?
Unless a new license is granted by the city’s transport authority, Uber (NYSE:UBER) has just days left to operate in London, where it employs roughly 45,000 drivers. In 2017, Transport for London concluded that Uber wasn’t “fit and proper” to hold a license, saying the ride-hailing company failed to do adequate driver background checks and report serious criminal offenses. It also took issue with a software called Greyball that blocked government officials attempting to catch lawbreaking drivers.
‘Frozen II’ hits theaters
Prepare for Disney’s (NYSE:DIS) sixth billion-dollar movie of 2019. Frozen II arrives in theaters today, five days ahead of the typical Thanksgiving release, giving the film some significant momentum with an anticipated opening of $120M to $140M. Happiest studio on earth? Disney already raked in more than $8B at the global box office since January, breaking its own record which it set in 2016. DIS +0.3% premarket.
WeWork slashes 20% of workforce
Drastically cutting costs to stabilize its business, WeWork (WE) has confirmed it will lay off 2,400 employees globally. The troubled office-sharing company will hold an all-hands meeting at 10 a.m. ET today to address the changes slated to come. WeWork pulled its IPO in September after investors balked at its mounting losses and unusual corporate governance structure, eventually securing an 11th-hour bailout deal from SoftBank (OTCPK:SFTBY).
Lagarde’s first public speech
Almost three weeks into the job, ECB President Christine Lagarde is calling for regional governments to invest more in a “new European policy mix.” Monetary policy should not be “the only game in town,” she added, stating the central bank will undertake a “strategic review” in the near future. Uncertainties impacting eurozone growth have also “proven to be more persistent than expected,” and increasing trade seen during decades of globalization is “no longer an absolute certainty.”
Snapping the losing streak
Following three days of slight losses, U.S. stock index futures are edging up 0.2%, hoping to break out of the recent trend amid whipsawing expectations over reaching Phase One of a trade deal. China’s President Xi said overnight he wants to resolve core concerns – but is not afraid to “fight back” – while the WSJ reported that Beijing extended an invite to U.S. officials for a new round of face-to-face talks. Mixed PMI readings out of Europe further suggested the continent’s slowdown may have stabilized, though it’s unlikely to pick up significantly in the near-term.
Avoiding another government shutdown
With little time to spare before a midnight deadline, President Trump signed a short-term spending bill into law, funding the government through Dec. 20. That gives lawmakers more time to strike a long-term appropriations deal. Congress already passed a two-year agreement to set budget levels and suspend the U.S. debt ceiling, but lawmakers still need to approve where and how the money gets spent.
No deal yet on USMCA
House Democrats and the Trump administration failed to reach an agreement on USMCA trade deal during a meeting on Thursday. House Ways and Means Committee Chairman Richard Neal said the two sides made progress, however, and it’s possible Congress could vote on the agreement by the end of the year. Mexico has already ratified the pact, while Canada is waiting to move in tandem with the U.S.
Strong demand for Aramco IPO
Institutional tranche and retail subscriptions to the Saudi Aramco (ARMCO) IPO have reached nearly $19.5B in less than a week, according to Samba Capital. This “demonstrates the confidence of investors,” Vice-Chairman Rania Nashar declared, adding that the levels are “unprecedented in scale.” They also suggest about 90% of the institutional part of the deal is covered, and 46% of the retail tranche.
Boeing settles 737 MAX crash lawsuits
The U.S. planemaker has settled more than half of the 118 claims related to the fatal Lion Air crash involving a 737 MAX aircraft, the first of two crashes that ultimately grounded the jet. Earlier cases in September were settled for at least $1.2M per claim, sources told Reuters at the time. Clifford Law Offices, which represents families of victims from the second Ethiopian Air crash, said 103 lawsuits have been filed against Boeing (NYSE:BA) so far, with 30 more cases expected to be filed soon.
What else is happening…
GM (NYSE:GM) aims for electric pickup debut next year.
Xerox (NYSE:XRX) will go hostile unless HP (NYSE:HPQ) opens its books.
Vietnam is big winner in Sino-U.S. trade war.
Exxon (NYSE:XOM) aims to sell $25B of assets.
Bids explored for Coty’s (NYSE:COTY) $7B beauty brands.
Telefónica (NYSE:TEF) taps AT&T (NYSE:T) Mexico for last-mile wireless.
Thursday’s Key Earnings
Nordstrom (NYSE:JWN) +8.4% AH as off-price sales turned positive.
Macy’s (NYSE:M) -2.3% cutting its profit outlook.
Seadrill (NYSE:SDRL) -19.4% amid steep losses, chairman resignation.
Splunk (NASDAQ:SPLK) +5.6% AH raising revenue guidance.
The Gap (NYSE:GPS) +1.7% AH topping estimates, working on Old Navy split.
Today’s Economic Calendar
9:45 PMI Composite Flash
10:00 Consumer Sentiment
11:00 Kansas City Fed Mfg Survey
1:00 PM Baker-Hughes Rig Count
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Good morning. Happy Thursday.
The Asian/Pacific markets closed mostly down. Hong Kong, South Korea, Taiwan, Australia, Malaysia, Indonesia, Singapore and the Philippines posted significant losses. Europe, Africa and the Middle East are currently mostly down. The UK, Denmark, Poland, the UAE, Greece, South Africa, the Netherlands, Portugal and Sweden are down the most. Futures in the States point toward a slight up open for the cash market.
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The dollar is down. Oil is up; copper is down. Gold and silver are down. Bonds are down.
Stories/News from Seeking Alpha…
Charles Schwab is in talks to buy TD Ameritrade (NASDAQ:AMTD), according to CNBC sources, while Fox Business separately reported Schwab (NYSE:SCHW) would pay $26B for the company. The sector has been under recent pressure by the move to no-fee commissions, leaving brokerages scrambling to find ways to maintain profits. Regulatory concerns? Schwab and TD Ameritrade are the two biggest publicly traded discount brokers and a tie-up would create a behemoth with $5T in combined assets. SCHW -2.3%; AMTD +25.7% premarket.
Exempting Apple from China tariffs
President Trump is “looking at” whether to exempt Apple (NASDAQ:AAPL) from a coming round of tariffs on Chinese imports, adding, “We have to treat Apple on a somewhat similar basis as we treat Samsung.” The comments were made during a tour touting U.S. manufacturing at a Mac Pro plant in Austin, Texas. “An additional 10% tariff on China would “ultimately result in a 4% hit to (Apple’s) EPS or roughly $0.50 in FY20 if the tariff ultimately went into effect,” according to Daniel Ives, an analyst at Wedbush Securities.
Tesla reveals pickup truck tonight
The long-awaited electric pickup truck, called Cybertruck, will be unveiled tonight in Los Angeles, and is expected to price at roughly $50,000. That’s lower than Rivian’s $69,000 starting price for its R1T, while the price of Ford’s (NYSE:F) forthcoming electric F-150 is still unknown. Cybertruck has the potential to boost Tesla’s (NASDAQ:TSLA) profit margins and Elon Musk has said he is more excited about the model than any other vehicle in the EV maker’s future lineup.
Racketeering lawsuit against Fiat Chrysler
Talks with Peugeot (OTCPK:PEUGF) to create the world’s fourth-largest carmaker are “progressing smoothly,” according to Fiat Chrysler (NYSE:FCAU), despite the suit filed by General Motors (NYSE:GM). “We are astonished by this filing, both its content and its timing. We can only assume it was intended to disrupt our proposed merger with PSA,” said CEO Mike Manley. GM alleges a bribery and corruption scheme cost the automaker billions of dollars and tainted labor contracts as far back as 2009.
Futures waver with stocks near record highs
Reports surrounding the latest trade developments saw U.S. stock index futures inching between slight gains and losses overnight. Reuters suggested that a so-called Phase One agreement between the U.S. and China may not be completed until next year, though China’s foreign ministry attempted to allay fears that talks might be unraveling. Meanwhile, the U.S. House of Representatives passed two bills intended to support protestors in Hong Kong, prompting Beijing to accuse the U.S. of interfering in domestic affairs.
Fed minutes and ‘standing repo’
Most FOMC participants agreed that beyond October’s cut monetary policy “would be well calibrated to support the outlook of moderate growth,” according to the minutes of the FOMC’s Oct. 29-30 meeting. Members also debated several options for keeping the repo market stable and one option that received considerable discussion was a so-called standing repo facility. The mechanism would see the Fed step in whenever needed to supply banks with reserves in exchange for ultra-safe collateral like Treasury debt.
OECD forecasts global growth at decade-low
The world economy is growing at the slowest pace since the financial crisis, according to new estimates from the OECD, which cut GDP growth to 2.9% this year and next (from 3% in 2020). “It would be a policy mistake to consider these shifts as temporary factors that can be addressed with monetary or fiscal policy: they are structural,” OECD chief economist Laurence Boone wrote in the report. Besides trade wars and a sharp Chinese slowdown, bigger concerns include climate change, digitalization, and the crumbling of the multilateral order.
Tough times for IPO market
Capital-raising in 2019 is running at its lowest level since 2012 as a series of notorious pulled deals (like WeWork) and soggy floats (think UBER and LYFT) have weighed on investment banking. Filings have revealed that 17 banks will split up to $32.3M for Alibaba’s (NYSE:BABA) secondary Hong Kong listing, which will raise up to $12.9B for the Chinese e-commerce giant. The numbers pale in comparison to the $300M banks made from Alibaba’s own record IPO of $25B in 2014.
Increased LVMH takeover bid
Tiffany (NYSE:TIF) +4% postmarket on reports that LVMH (OTCPK:LVMHF) raised its offer for the U.S. jewelry chain to $130/share, or close to $16B. That bid hike resulted in the French luxury icon getting access to Tiffany’s books as part of the due diligence linked to its proposed takeover. Meanwhile, the former CEO of Barney’s is moving to Tiffany’s newly created chief brand officer position, according to the NY Post. Daniella Vitale stepped down from bankrupt Barney’s after it was bought by Authentic Brands.
Vaping meeting back on
Reports earlier this week suggested President Trump would delay a decision on vaping restrictions, though the White House just confirmed his meeting with the industry for tomorrow. “The policy making process is not stalled – it continues to move forward,” according to an official statement. In September, the Trump administration said it planned to take off the market any e-cigarettes that weren’t formulated to taste like tobacco, but has since decided to make an exception for menthol flavors.
What else is happening…
Mexicans sue Walmart (NYSE:WMT) over El Paso shooting.
Uber (NYSE:UBER) is starting to audio-record rides for safety.
EV revolution… €10B battery cell purchase from BMW (OTCPK:BMWYY).
Google (GOOG, GOOGL) adds new limits to political ad targeting.
PayPal (NASDAQ:PYPL) spends $4B on biggest acquisition ever.
Johnson & Johnson (NYSE:JNJ) loses pelvic mesh suit in Australia.
Wednesday’s Key Earnings
L Brands (NYSE:LB) +3.4% AH despite Victoria’s Secret weakness.
Lowe’s (NYSE:LOW) +3.9% rallying on a strong outlook.
Target (NYSE:TGT) +14.1% posting Q3 beat, lifting guidance.
Today’s Economic Calendar
8:30 Initial Jobless Claims
8:30 Philly Fed Business Outlook
8:30 Fed’s Mester Speech
10:00 Existing Home Sales
10:00 Leading Indicators
10:10 Fed’s Kashkari Speech
10:30 EIA Natural Gas Inventory
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
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Good morning. Happy Wednesday.
The Asian/Pacific markets closed mostly down. India and New Zealand posted gains, but China, Hong Kong, South Korea, Australia and Thailand were weak. Europe, Africa and the Middle East are currently mostly down. The UK, Denmark, Poland, Germany, South Africa, the Netherlands, Israel and Sweden are down the most. Futures in the States point towards a moderate down open for the cash market.
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The dollar is up. Oil is up; copper is down. Gold and silver are down. Bonds are up.
Stories/News from Seeking Alpha…
Emirates and Boeing are reportedly on the verge of striking a compromise deal for the Middle East’s biggest carrier to order around 30 787 Dreamliners, but fewer 777X jets as part of a delayed order. Boeing (NYSE:BA) has only landed about a third of the orders scored by Airbus (OTCPK:EADSY, OTCPK:EADSF) at the biennial event. Meanwhile, FAA Administrator Steve Dickson stated on the sidelines of the show that the FAA will be tougher on the certification of the Boeing 777X and isn’t following any specific timeline for the return to service of the grounded 737 MAX model. Boeing fell 1% yesterday after the National Transportation Safety Board called on the company to redesign thousands of its 737 planes to better protect against the impact of engine failures. Shares are down another 0.5% in premarket action today.
Global markets fall back
Asian stocks fell back after President Trump’s threat to raise tariffs on Chinese goods reverberated across the Pacific Ocean. The Shanghai Composite Index fell 0.8% and Hong Kong’s Hang Seng Index was off 0.75%. Japan’s Nikkei slipped 0.6% and Australia’s ASX 200 dropped dropped 1.2% after a financial regulator cracked down on Westpac Banking (NYSE:WBK). Meanwhile, European stocks are also having a soft day, with the Stoxx 600 Index slipping 0.7%. U.S. stock futures are pointing lower, two days removed from the Dow Jones Industrial Average and S&P 500 Index carving out new record highs.
Fed watch
The Federal Reserve is due to release minutes today of its last meeting in a development that will pull back the curtain on just how much support there is for a long pause before any further interest rate actions. Economists will also find out if Jerome Powell’s view that it would take a “material reassessment” before rates are cut again is on target with the rest of the committee. The consensus view is that the Federal Reserve is right where it wants to be going into an election year as long as no data surprises occur.
Tension in Hong Kong simmers on
Hong Kong riot police are still surrounding a university campus with a small number of protesters a day after the largest number of arrests and injuries were reported in the city. The protests in Hong Kong continue to draw attention from outside of China. The latest show of support was from the U.S. Senate, which unanimously passed legislation that supports human rights in Hong Kong. That action drew almost immediate criticism from China’s foreign ministry. On the investing front, the disruption in Hong Kong has held back investor enthusiasm for casino companies with Macau properties, including Wynn Resorts (NASDAQ:WYNN), Las Vegas Sands (NYSE:LVS), MGM Resorts (NYSE:MGM) and Melco Resorts & Entertainment (NASDAQ:MLCO).
Corporate events to watch
Canaan (CAN) and SiTime (SITM) are expected to price their IPOs today. Canaan designs ASICs for Bitcoin mining and AI applications, while SiTime offers MEMS-based silicon timing solutions that benefit a wide range of applications. Retail will be on display, with Lowe’s (NYSE:LOW), Target (NYSE:TGT), Jack in the Box (NASDAQ:JACK) and Sonos (NASDAQ:SONO) all stepping into the earnings confessional. Also, a number of companies are hosting analyst day events, during which guidance could be refreshed. Watch for updates from Overstock.com (NASDAQ:OSTK), Honeywell (NYSE:HON), and Rockwell Automation (NYSE:ROK).
EV truck talk
The buzz is building up for Tesla’s (NASDAQ:TSLA) truck event that is scheduled for tomorrow night in California. Pricing on the Tesla truck will be closely watched with EV startup Rivian setting a starting price of $69K. Details on towing capacity, power output, and off-road capabilities will also be crucially important as Tesla looks to compete with Ford’s (NYSE:F) F-150 line and Ram (NYSE:FCAU) trucks. In other electric truck news, startup Nikola claimed yesterday to have made a huge breakthrough in battery technology that it predicts will disrupt the market. Nikola says it’s in discussions with customers for truck orders that could fill production slots for more than ten years and propel Nikola to become the top truck manufacturer in the world by revenue. The next-gen battery technology is also said to have the potential to increase the range of current EV passenger cars to 600 miles from 300 miles.
Disney expects Frozen bonanza
Disney (NYSE:DIS) is forecasting a hot debut for long-awaited sequel Frozen 2 when it opens on Friday. The company expects the film to draw $100M or so domestically in its first weekend, while some Hollywood estimates are ranging to as high as $105M. The film is set to debut in more than 4,400 theaters in North America. The first Frozen film is the 2nd highest-grossing animated movie of all-time with a global box office haul of $1.29B.
Volkswagen talks up next-gen EV wagon
Volkswagen (OTCPK:VLKAF) showed off its Space Vizzion Concept at the Los Angeles Auto Show. The EV wagon is slated to top 300 miles of EPA-estimated range out of an 82kWh battery and accelerate from 0 mph to 60 mph in just five seconds flat. The German automaker says a production version is expected to be on the market in late 2021.
Legal win for GM
A federal appeals court in New York found that General Motors (NYSE:GM) won’t be liable for punitive damages over accidents that occurred after its 2009 bankruptcy involving cars made before its bankruptcy. The decision includes vehicles with faulty ignition switches, which are still the subject of class action lawsuits trying to pierce new GM’s legal shield.
What else is happening…
SEC opens preliminary probe of Vale (NYSE:VALE) in dam tragedy.
Alibaba (NYSE:BABA) updates on Hong Kong listing.
Morgan Stanley (NYSE:MS) joins mortgage sector bulls.
U.S. House passes stopgap bill to avert government shutdown.
Tuesday’s Key Earnings
Alcon (NYSE:ALC) -3.9% PM on in-line Q3 earnings.
Urban Outfitters (NASDAQ:URBN) -15.4% PM on lagging store sales.
PagSeguro Digital (NYSE:PAGS) -7.5% PM on Q3 earnings and revenue miss.
Today’s Economic Calendar
7:00 MBA Mortgage Applications
10:30 EIA Petroleum Inventories
2:00 PM FOMC minutes
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Good morning. Happy Tuesday.
The Asian/Pacific closed mostly up. China, Hong Kong, Taiwan, Australia and Indonesia closed up; Japan and Singapore were weak. Europe, Africa and the Middle East are currently doing well. The UK, Turkey, Germany, the UAE, Russia, Saudi Arabia, Spain, Austria, South Africa and the Czech Republic are leading. Futures in the States point towards a positive open for the cash market.
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FREE Online Course: Jason Leavitt’s Mini Masterclass in Trading
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The dollar is flat. Oil is down; copper is up. Gold is down; silver is up. Bonds are down.
Stories/News from Seeking Alpha…
Just as earnings season comes to a close, retailers are set to light up the scoreboard. Reporting today are Home Depot (NYSE:HD), Kohl’s (NYSE:KSS) and TJX Companies (NYSE:TJX), while Target (NYSE:TGT), Lowe’s (NYSE:LOW), Macy’s (NYSE:M) and BJ’s (NYSE:BJ), as well as Nordstrom (NYSE:JWN), Gap (NYSE:GPS), L Brands (NYSE:LB) and Foot Locker (NYSE:FL) release results the rest of the week. Traders are particularly watching discounting trends and the impact from the ongoing U.S.-China trade war ahead of the critical holiday shopping period. While the broader retail industry has been relatively subdued, individual stock prices have diverged radically, with Macy’s down 50% YTD and Target skyrocketing nearly 70%.
Futures edge higher
Equities posted fresh records on Monday, but closed little changed, as the Trump administration issued a new 90-day extension allowing U.S. companies to continue doing business with China’s Huawei. The next catalyst for stock market movement is the flood of retailer earnings, and U.S. index futures are up about 0.3% before the results. About three-fourths of S&P 500 companies have already topped earnings estimates in their Q3 reports, but they are still expected to have posted an overall 0.5% decline in earnings, according to Refinitiv data.
Topping the biggest battery record
Tesla’s (NASDAQ:TSLA) battery project with Neoen (OTC:NOSPF) in South Australia became “the world’s largest battery” when it was completed two years ago, and now it’s expanding by 50% to 150 megawatts. The storage site has already saved more than A$50M in its first year of operation, meaning that the A$66M venture is quickly on its way to paying for itself. Australian Energy Market Operator confirmed the system is much more rapid, accurate and valuable than a conventional steam turbine in a report published last year.
5G decision
FCC Chairman Ajit Pai announced his support Monday for a public auction to free up C-band spectrum, a key band currently used for delivering video content for next-generation 5G wireless networks. The news sent Intelsat’s (NYSE:I) stock crashing 40%. Major satellite service providers, which hold existing C-band licenses, had proposed selling the spectrum privately to wireless carriers, arguing a private sale would make the spectrum available for 5G faster.
FedEx discontinues pension for new hires
Joining the growing ranks of large U.S. companies phasing out guaranteed retirement benefits, FedEx (NYSE:FDX) is closing its pension plan to new U.S. hires starting in 2020. The shipping giant instead will launch a new 401(k) plan at the start of 2021 with a higher company match (contributing up to 8% of employee salaries, if employees provide 6% of their salary). Just 22% of Fortune 50 companies and 11% of transportation companies offer pensions to new employees.
Trump doubles down on lower rates
“Just finished a very good & cordial meeting at the White House with Jay Powell of the Federal Reserve. Everything was discussed including interest rates, negative interest, low inflation, easing, Dollar strength & its effect on manufacturing, trade with China, E.U. & others, etc.,” President Trump tweeted late Monday. “I protested fact that our Fed Rate is set too high relative to the interest rates of other competitor countries,” adding that it should be lower than theirs. Trump has slammed the central bank dozens of times this year, calling Powell a “terrible communicator” and an enemy of the state.
Congress races to avoid government shutdown
The House will vote today on a stopgap bill aimed at preventing a government shutdown at midnight on Thursday. While Congress passed a two-year agreement to set budget levels and suspend the U.S. debt ceiling earlier this year, lawmakers have failed to come to terms on where to allocate the money amid disagreements over immigration and military funding. The Senate and White House will likely support the continuing resolution, hoping to avoid another partial government shutdown like the record-long one that began last December.
Vaping ban stalls
A delay of rules that would restrict flavored e-cigarettes is a “Pyrrhic victory” for the industry right now, according to former FDA Commissioner Scott Gottlieb, but the longer the trends in teen vaping continue, the “more draconian the regulatory action” will be. President Trump had previously planned to meet with industry executives this week, citing a focus on health and jobs. Meanwhile, California is suing Juul (JUUL) over its marketing practices, alleging the company targeted teens and its age-verification system did not adequately vet customers.
Emissions fight escalates
California is taking further action, saying it will no longer purchase new vehicles for state government fleets from GM (NYSE:GM), Toyota (NYSE:TM) and Fiat Chrysler (NYSE:FCAU), as well as other automakers that have backed the Trump administration in a battle to strip the state of authority to regulate tailpipe emissions. Going forward, California’s state agencies will chiefly purchase cars from Ford (NYSE:F), Honda (NYSE:HMC), Volkswagen (OTCPK:VWAGY) and BMW (OTCPK:BMWYY). The state also said it will immediately ban state entities from buying sedans powered by an internal combustion engine, with exemptions for certain public safety vehicles.
Vote of confidence for 737 MAX
Day 3 at the Dubai Air Show fared much better for Boeing (NYSE:BA), as the world’s biggest planemaker received bids for 50 737 MAX jets amid forecasts of a potential December return for the grounded aircraft. Kazakhstan-based Air Astanta said it plans to purchase 30 737 MAX 8s, an undisclosed buyer purchased 10 MAX 10s, while Turkey’s Sunexpress ordered 10 MAX 8 jets. Boeing this week will also present to the board of Southwest Airlines (NYSE:LUV), its largest 737 MAX customer, an overview of its plans to return the grounded 737 MAX to service. BA +0.8% premarket.
What else is happening…
Spotify (NYSE:SPOT) falls as Amazon (NASDAQ:AMZN) expands free music offering.
Legere resigns as T-Mobile (NASDAQ:TMUS) CEO; shoots down WeWork (WE) rumors.
Sony (NYSE:SNE) buys out AT&T (NYSE:T) from Game Show Network.
First strike at Canadian National Railway (NYSE:CNI) in a decade.
Strong demand sees Alibaba (NYSE:BABA) close books early in Hong Kong.
Airbnb (AIRB) may choose direct listing over IPO.
New York State’s Attorney General is investigating WeWork (WE).
Today’s Economic Calendar
8:30 Housing Starts
8:55 Redbook Chain Store Sales
9:00 Fed’s Williams Speech
10:00 Quarterly Services Report (Advance)
10:00 E-Commerce Retail Sales
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Good morning. Happy Monday. Hope you had a good weekend.
The Asian/Pacific markets closed mostly up. Japan, China, Hong Kong, Taiwan, Malaysia and Singapore did well; the Philippines were weak. Europe, Africa and the Middle East currently lean to the downside. Turkey, Greece, South Africa, Hungary and Saudi Arabia are up; Denmark, France, Germany, the UAE, Russia, Italy, Austria and Sweden are down. Futures in the States point towards a down open for the cash market.
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FREE Online Course: Jason Leavitt’s Mini Masterclass in Trading
—————
The dollar is down slightly. Oil and copper are down. Gold and silver are down. Bonds are up.
Stories/News from Seeking Alpha…
U.S. markets scored another hat trick on Friday as the S&P 500, Nasdaq and Dow hit fresh records, with the latter topping 28,000 for the first time ever. Stock futures now suggest gains of another 0.2% at the open. The move upward has been spurred by rising trade optimism, diminishing fears of a recession, while the barometer for the Fed to raise rates is incredibly high (and its balance sheet continues to grow). The People’s Bank of China overnight also lowered one of its key interest rates for the first time since 2015, signaling further easing across the globe.
IPO record for Saudi Aramco?
Saudi Arabia has set Aramco’s (ARMCO) preliminary valuation at $1.6T to $1.71T, below the $2T level previously targeted by Crown Prince Mohammed bin Salman. The state-owned oil giant is seeking to raise between $24B and $25.6B by selling a 1.5% stake, putting it close to the world’s largest IPO – Alibaba’s (NYSE:BABA) $25B deal in 2014. While the company pulled plans to market the deal in the U.S., MSCI will follow in the path of S&P Dow Jones and FTSE Russell, which told clients last week that they could fast-track Aramco’s inclusion into their indexes as soon as December.
U.S. to extend reprieve for Huawei
As the earlier reprieve expires, the Trump administration will issue another 90-day extension today of a license allowing U.S. companies to continue doing business with Huawei, sources told Reuters. The Chinese firm was added to an economic blacklist back in May on national security grounds. Out of $70B that Huawei spent buying components in 2018, some $11B went to U.S. firms including Qualcomm (NASDAQ:QCOM), Intel (NASDAQ:INTC) and Micron Technology (NASDAQ:MU).
HP snubs Xerox offer, still open to deal
Saying the unsolicited proposal was too low, HP’s (NYSE:HPQ) board of directors has unanimously rejected Xerox’s (NYSE:XRX) takeover bid at $22/share. “We note the decline of Xerox’s revenue from $10.2B to $9.2B (on a trailing 12-month basis) since June 2018,” the board wrote in a letter, adding that it remains “ready to engage over a potential combination.” Activist investor Carl Icahn, who owns a 10.6% stake in Xerox, recently bought HP stock worth $1.2B, believing the combination of both companies would bring synergies.
FedEx slams NYT tax story
FedEx (NYSE:FDX) is punching back after The New York Times (NYSE:NYT) published a front page story on Sunday – entitled How FedEx Cut Its Tax Bill to $0 – and challenged the publisher to a debate in Washington. “Pertinent to this outrageous distortion of the truth is the fact that unlike FedEx, The New York Times paid zero federal income tax in 2017 on earnings of $111M, and only $30M in 2018 – 18% of their pretax book income,” wrote CEO Fred Smith. “Also in 2018 the New York Times cut their capital investments nearly in half to $57M, which equates to a rounding error when compared to the $6B of capital that FedEx invested in the U.S. economy during that same year.”
Ford workers approve new labor deal
The United Auto Workers union has secured a new four-year labor deal with Ford (NYSE:F), which largely mirrors one struck at General Motors (NYSE:GM) last month. It requires Ford to invest more than $6B in its U.S. manufacturing operations, create or retain 8,500 U.S. jobs, and permits the automaker to shutter an engine plant in Michigan. Negotiations now shift to Fiat Chrysler (NYSE:FCAU), the last of the Detroit automakers. UAW’s discussions are expected to be a bit more contentious due to its planned merger with PSA group and amid a federal probe into union corruption that started with the Italian-American carmaker.
WeWork set to lay off thousands
WeWork (WE) is planning to slash its workforce by at least a third after breakneck growth racked up heavy losses and led it to the brink of collapse, NYT reports. At least 4,000 job cuts may be announced this week and will take place across the company’s sprawling global operation, which employed 12,500 people at the end of June. Last week, WeWork reported that it lost $1.25B in the third quarter, up more than 150% from the same period a year ago.
New power shutoffs for weary Californians
PG&E (NYSE:PCG) is warning of more potential power shutoffs as it monitors a “potentially strong offshore wind event” this coming Wednesday that could prompt the need to cut power to about 180K customers in northern California. PG&E said its service area typically experiences dry vegetation that is ripe for igniting or spreading a wildfire, but this year’s conditions are worse than usual. Southern California Edison (NYSE:EIX) is also warning that windy conditions could force shutoffs for 32K customers in mountain and coastal areas.
Euronext, SIX battle for Spain’s bourse
Dealmaking in the exchange sector is gathering pace as Switzerland’s SIX Group announced a €2.8B bid for Spanish stock exchange BME, minutes after Euronext (OTCPK:EUXTF) confirmed its own interest. Euronext already owns the main exchanges in Paris, Amsterdam, Brussels, Lisbon, Dublin and Oslo. Earlier this year, Euronext defeated Nasdaq in a five-month takeover battle for the Oslo exchange, while Hong Kong Exchanges abandoned its £29.6B bid for the London Stock Exchange after failing to win over investors.
SoftBank combining Yahoo Japan, Line Corp
Via a fairly complex transaction, SoftBank (OTCPK:SFTBY) intends to combine its Yahoo Japan internet business – now known as Z Holdings (OTCPK:YAHOY) – with Line Corp. (NYSE:LN), creating a $30B tech giant that will compete with the likes of Rakuten. The firms aim to leverage each other’s large user bases to expand their online businesses like shopping, payment services and advertising-supported content. “Big data is key for the future of both companies,” said Koji Hirai, the head of M&A advisory firm Kachitas Corp. “The merger will enable them to create a massive repository of client data.”
What else is happening…
Ford (F) reveals details of Mustang Mach-E.
‘Take whatever time needed’ on 737 MAX – FAA.
Sterling rallies as Tories unite behind Brexit plan.
Another ex-JPMorgan (NYSE:JPM) trader charged with spoofing.
Strike notice given to Canadian National Railway (NYSE:CNI).
Shareholders clear Caesars (NASDAQ:CZR)-Eldorado (NASDAQ:ERI) merger.
TikTok owner, ByteDance (BDNCE), to launch music streaming – FT.
Today’s Economic Calendar
10:00 NAHB Housing Market Index
12:00 PM Fed’s Mester Speech
4:00 PM Treasury International Capital