Good morning. Happy Friday.
The Asian/Pacific markets leaned down. South Korea and China posted gains, but Japan, India, New Zealand, Thailan and the Philippines were weak. Europe, Africa and the Middle East currently lean to the upside. Denmark, Switzerland, Norway, Hungary, Spain, Portugal and Austria are up; Kenya, Israel and Saudi Arabia are down. Futures in the States point towards a slight positive open for the cash market.
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The dollar is up. Oil is up; copper is down. Gold and silver are up. Bonds are up.
Stories/News from Seeking Alpha…
Nasdaq futures increased 0.27%, S&P futures inched up 0.14% and Dow futures are basically flat as investors continue to sort through data on how the coronavirus outbreak is spreading. In Asia, the major markets except for Tokyo and Mumbai rose. In Europe, the FTSE 100 is down 0.3%, Stoxx Europe 600 has slipped 0.1% and the DAX is roughly flat. Crude oil is up 1.3% to $52.10, while gold and the U.S. Dollar Index are all little changed.
Raytheon gets SEC subpoena
The SEC is investigating potentially improper payments made from contracts in the Middle East since 2014, Raytheon (NYSE:RTN) disclosed in its 10-K filing. The probe relates to payments made by the company or its Thales-Raytheon Systems joint venture with European defense electronics firm Thales (OTCPK:THLEF). Raytheon doesn’t expect the results of the inquiry to have a materially negative effect on results.
IEA sees oil demand declining for first time in a decade
The International Energy Agency slashed its forecast for global oil demand growth in 2020 by 365,000 barrels per day to 825,000 barrels per day, the lowest level since 2011, as the coronavirus dampens demand in China’s oil-hungry economy. In its latest monthly outlook, the IEA sees global oil demand shrinking by 435,000 barrels per day in Q1, which would be the first quarterly contraction since the global financial crisis in 2009.
Tesla prices $2B offering
Tesla’s (NASDAQ:TSLA) capital raise is said to price at $767 per share, according to Bloomberg. That’s about a 4.6% discount to Thursday’s close of $804. The car and battery maker planned to offer about $2B in stock along with a $300M underwriter option.
Tesla acknowledges ‘health epidemics’ as risk in filing
Although at the end of January the company played down the effect the coronavirus will have on its operations, Tesla’s (TSLA) 2019 10-K filing said the epidemic’s effect on global supply chains is unknown if the epidemic persists for an extended period of time. In the filings’ risk factors section, it said expenses and delays “could have a material adverse impact on our business, operating results and financial condition.”
Royal Caribbean tallies virus 2020 EPS effect
The cruise line has canceled a total of 18 sailings in southeast Asia and modified several itineraries, causing an estimated impact on its FY2020 financial performance of about 65 cents per share. Royal Caribbean (NYSE:RCL) said if the company were to cancel all of its remaining sailings in Asia through the end of April — which is not currently planned — it would hurt 2020 financial performance by an additional 55 cents per share.
Roku jumps after Q4 sales take off
Roku (NASDAQ:ROKU) advanced 8% in premarket trading after a solid Q4 revenue rose 49% to $411.2M, beating consensus by $18.5M. Its operating loss of $17.4M narrowed from $26.5M in the year-ago quarter. And the company added a record 4.6M incremental active accounts, ending the year with 36.9M.
New Facebook app dings Pinterest
Pinterest (NYSE:PINS) fell 2.6% in after-hours trading Thursday after Facebook (NASDAQ:FB) quietly released a potential rival app. Hobbi is an app for saving and sharing photos of activities such as cooking and home improvement. The app is available in the iOS App Store in Colombia, Belgium, Spain and Ukraine, The Information reports.
What else is happening…
China urges U.S. to halt suppressing Chinese companies.
Nissan (OTCPK:NSANY) -9.6% after cutting profit forecast, dividend.
Twitter (NYSE:TWTR) set to open first APAC engineering center.
Pulse Biosciences (NASDAQ:PLSE) discloses NSE letter from FDA.
Agnico Eagle Mines (NYSE:AEM) cuts 2020 production guidance.
Thursday’s Key Earnings
Nvidia (NASDAQ:NVDA) +7.3% PM on earnings beat, data center strength.
Roku (ROKU) +8% PM on revenue jump in holiday season.
Arista Networks (NYSE:ANET) -8.5% PM on Q4 revenue drop.
Sierra Wireless (NASDAQ:SWIR) -8.4% PM on worse-than-expected loss.
Yelp (NYSE:YELP) -8.2% PM as revenue turnaround falls short in Q4.
Mattel (NASDAQ:MAT) +2.7% PM on profit beat.
Expedia (NASDAQ:EXPE) +11.7% PM on earnings beat, guidance.
Agnico Eagle (AEM) -1.5% PM on 2020 production guidance cut.
Cognex (NASDAQ:CGNX) -4.6% PM on mixed Q4, downside outlook.
DexCom (NASDAQ:DXCM) +6.2% PM on Q4 beat.
Datadog (NASDAQ:DDOG) -4.3% PM despite earnings beat, upside outlook.
Chemours (NYSE:CC) +6% PM on better-than-expected quarter.
Republic Services (NYSE:RSG) flat AH on mixed Q4.
GoDaddy (NYSE:GDDY) +5.8% PM on Q4 beat, strong ARPU.
Cloudflare (NYSE:NET) +2.1% PM on earnings beat.
Today’s Economic Calendar
8:30 Retail Sales
8:30 Import/Export Prices
9:15 Industrial Production
10:00 Business Inventories
10:00 Consumer Sentiment
1:00 PM Baker-Hughes Rig Count
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Good morning. Happy Thursday.
The Asian/Pacific markets leaned to the downside, but losses weren’t overly big. China, Hong Kong, Indonesia and Thailand were down the most. Europe, Africa and the Middle East are currently mostly down. Hungary is down, but the UK, Poland, France, Russia, Finland, Norway, Belgium, Israel and Sweden are down noticeably. Futures in the States point towards a relatively big gap down open for the cash market.
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The dollar is down. Oil and copper are down small amounts. Gold and silver are up. Bonds are up.
Stories/News from Seeking Alpha…
Following global markets into the red, U.S. stock index futures are pulling back from record highs – with the DJIA pointing to an opening loss of 200 points – ahead of earnings from Alibaba (NYSE:BABA), PepsiCo (NASDAQ:PEP), Kraft Heinz (NASDAQ:KHC) and Nvidia (NASDAQ:NVDA). Denting sentiment are 15,000 new coronavirus infections in China that were calibrated using a new CT scan detection method, rather than confirmation via slower ribonucleic acid tests. That brings the national total to just over 60,000 cases, prompting China to replace its top officials in the central province of Hubei and its capital, Wuhan. While non-China deaths linked to COVID-19 still remain very low, WHO Director General Tedros Adhanom Ghebreyesus warned the outbreak “could still go in any direction.”
Mobile World Congress is officially canceled
With swaths of individual companies pulling out of the exhibition over the past week, the GSMA telecoms association that hosts the get-together has called off the Feb. 24-27 event. Fears over the coronavirus outbreak were to blame despite assurances from local and national health officials that it would have been safe to hold it. The Mobile World Congress draws more than 100,000 visitors to Barcelona and is known as the year’s biggest event for the telecom industry.
Fresh tensions over Sprint takeover terms
Just when it looked like the deal was done, the merger of Sprint (NYSE:S) and T-Mobile (NASDAQ:TMUS) is again in question. Deutsche Telekom (OTCQX:DTEGY), the parent company of T-Mobile U.S., is pressing to renegotiate the terms of the takeover, as the shares and performance of Sprint have deteriorated since the deal was announced, sources told the FT. The move is opposed by Sprint’s controlling shareholder, SoftBank (OTCPK:SFTBY) of Japan, according to people close to its chairman Masayoshi Son. S -5.8% premarket.
Senate banking panel questions Fed nominees
The latest nominees to the Federal Reserve will face a crucial test at a Senate grilling today after the past two picks, economist Stephen Moore and Herman Cain, were rejected. Christopher Waller, director of research at the St. Louis Fed, is expected to easily pass muster, though lawmakers will closely examine the views of Judy Shelton, an adviser to the Trump campaign in 2016. She has a long history of unorthodox economic commentary, like questioning the basic role of the Fed, calling for near-zero interest rates and advocating for pegging the dollar to the gold standard.
More red ink in Washington
Fresh data from the Treasury Department showed the federal government post a budget deficit of $389.2B in the first four months of fiscal 2020. That’s a 25% gain over the same period last year and already about 40% of the total deficit for fiscal 2019. Tax receipts are actually on the rise comparatively, but the rate of federal outlays is adding to the shortfall, bringing the total national debt to $23.3T.
Euro hits weakest level since 2017
Worries about the European economy emerged on Wednesday as the euro fell to its weakest level against the dollar since 2017, dropping as much as 0.4% to $1.0877. On top of a weakened economy, impacts from the coronavirus are likely to send Germany into recession, while Deutsche Bank (NYSE:DB) expects to post a contraction in the fourth quarter. Also weighing on sentiment is a lingering succession battle at the top of the German government, a slump in eurozone industrial output and fears about the financial health of Italy.
Barclays CEO probed over Epstein ties
Britain’s financial regulators are probing historical links between Barclays (NYSE:BCS) CEO Jes Staley and Jeffrey Epstein, the disgraced financier who died in jail last year while awaiting trial on sex trafficking charges. The NYT previously said that Epstein had referred “dozens” of wealthy clients to Staley when he ran JPMorgan’s (NYSE:JPM) private banking business, while Staley visited Epstein in prison when he was serving a sentence between 2008-09 for soliciting prostitution. The news came as Barclays released annual results: Profit before tax rose 26% Y/Y to £4.4B in 2019, though a cautious outlook was given for the year ahead.
Google finalizes $2.6B purchase of Looker
Winning clearance from the U.K.’s competition watchdog, Google (GOOG, GOOGL) has completed its buyout of Big Data analytics firm Looker Data Sciences. The regulator said the acquisition was unlikely to lead to increased prices or lower quality, as the two are not considered close competitors by companies who use business intelligence tools. Looker was the first major acquisition for Google’s new cloud business CEO Thomas Kurian, and it aims to build upon the success of Google Cloud’s BigQuery, a tool for managing large datasets.
Airbus puts squeeze on Boeing
Airbus (OTCPK:EADSY) is raising its stake in Bombardier’s (OTCQX:BDRAF, OTCQX:BDRBF) A220 passenger jet program to 75% (Quebec will own the rest), marking the Canadian company’s exit from commercial aviation as it seeks to improve its financial position. The deal will bolster Airbus’s advantage in the narrow-body market, where Boeing’s 737 MAX is grounded. Airbus aims to deliver about 880 jets this year, up from a record 863 in 2019, and achieving that figure could propel its share price (the French planemaker’s stock rose 55% last year vs. Boeing’s 1% advance).
What else is happening…
BP (NYSE:BP) pledges net zero emissions by 2050.
MGM Resorts (NYSE:MGM) CEO Murren is stepping down.
Kohl’s (NYSE:KSS) to lay off 250 workers as part of restructuring.
Best profit since 2010 for Credit Suisse (NYSE:CS).
Tesla (NASDAQ:TSLA) recalls 15,000 Model X SUVs for power steering issue.
Kellogg’s (NYSE:K) joins meatless craze with vegan bratwurst and sausage.
Wednesday’s Key Earnings
Applied Materials (NASDAQ:AMAT) +2% AH giving solid guidance.
Annaly Capital (NYSE:NLY) +0.8% AH agreeing to internalize management.
Barrick Gold (NYSE:GOLD) -0.2% despite raising its dividend.
CenturyLink (NYSE:CTL) -4.4% AH posting an in-line Q4.
Cisco (NASDAQ:CSCO) -4.6% AH on customer spending slowdown.
CVS Health (NYSE:CVS) -0.1% holding off on major deals.
Shopify (NYSE:SHOP) +7.8% after an earnings smasher.
Teva Pharma (NYSE:TEVA) +9.1% continuing its turnaround.
Today’s Economic Calendar
8:30 Initial Jobless Claims
8:30 Consumer Price Index
10:30 EIA Natural Gas Inventory
12:45 PM Fed’s Kaplan Speech
1:00 PM Results of $19B, 30-Year Note Auction
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
5:30 PM Fed’s Williams Speech
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Good morning. Happy Wednesday.
The Asian/Pacific closed mostly up. China, Hong Kong, South Korea, India, New Zealand, Taiwan, Singapore and Thailand did well; Malaysia, Indonesia and the Philippines were weak. Europe, Africa and the Middle East are currently mostly up. Poland, France, Turkey, Germany, Russia, South Africa, Spain, the Netherlands, Italy and Austria are leading; Finland is weak. Futures in the States point towards a moderate gap up open for the cash market.
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VIDEO: State of the Market
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The dollar is flat. Oil and copper are up. Gold and silver are down slightly. Bonds are down.
Stories/News from Seeking Alpha…
Fed Chair Jerome Powell is set to testify before Congress for a second day, having used the first day of testimony to say “the U.S. economy is in a very good place.” U.S. equities mostly climbed on the latest view, while Wall Street prepares for another solid session, with DJIA futures up 100 points and the S&P 500 and Nasdaq at record highs. “The FOMC believes that the current stance of monetary policy will support continued economic growth, a strong labor market and inflation returning to the committee’s symmetric 2% objective,” he added. “As long as incoming information about the economy remains broadly consistent with this outlook, the current stance of monetary policy will likely remain appropriate.”
Coronavirus policy
According to Powell, the Fed is also “closely monitoring” the deadly outbreak of the coronavirus, which has now been officially named Covid-19. While the outbreak could “lead to disruptions in China that spill over to the rest of the global economy,” he stopped short of saying the outbreak had changed the Fed’s baseline outlook for the U.S. economy, or the expectation among many members of the FOMC that rates will remain on hold this year. More Fedspeak… Philly Fed President Patrick Harker speaks today before the Economic Forecast Breakfast, while San Francisco Fed President Mary Daly participates in a Q&A before the European Financial Forum.
Crude climbs back over $50
Oil clawed its way above the key level overnight as Russia said it was studying an OPEC+ proposal to curb crude output by a further 600K barrels per day, though Energy Minister Alexander Novak didn’t specify when the country would make a decision. Adding to the sentiment, the growth rate of new coronavirus cases in China slowed to the lowest level since late January, stoking hopes that fuel demand for the world’s second-largest oil consumer may begin to recover. Also get ready for the OPEC monthly oil report later today, and developments in Libya, where experts are exploring oil revenue sharing options amid a political crisis.
It’s official!
U.S. District Judge Victor Marrero approved the $26B merger between Sprint (NYSE:S) and T-Mobile (NASDAQ:TMUS) on Tuesday, saying the deal is unlikely to stifle competition in the U.S. wireless market. Marrero rejected an argument from a consortium of state AGs that Dish (NASDAQ:DISH) “would not enter the wireless services market as a viable competitor nor live up to its commitments to build a national wireless network.” A spokesman for the California Public Utilities Commission, the last regulatory body to decide on the merger, said its review of the deal is expected to conclude in July.
Psychedelic startups ready for public trip
A growing number of companies are already conducting clinical trials of psychedelic treatments for everything from depression to PTSD, and some have even recently received the blessing of the FDA. Mind Medicine, which is preparing a Phase 2 clinical trial into the use of ibogaine to treat opioid addiction, intends to list on Toronto’s NEO Exchange by the first week of March via a reverse takeover under ticker “MMED.” “I think that the psychedelics industry could be much bigger than the cannabis industry because it’s going to attract institutional capital and already is starting to,” co-founder JR Rahn declared. “It’s also going to be a more concentrated space because the barriers to entry are much higher.”
Climate action pays off
BlackRock’s (NYSE:BLK) new exchange-traded fund, the iShares ESG MSCI EM Leaders ETF (LDEM), has already attracted more than $600M this week despite only starting trading on Friday. That’s the best debut for any U.S. ETF this year as investing in companies that care about environmental, social and governance (BATS:ESG) picks up after years of sluggish growth. Although only a small part in the $4.5T U.S. ETF market, sustainable funds added more than $8B in 2019 and assets recently topped $20B, according to Bloomberg.
Path to profitability
Lyft (NASDAQ:LYFT) reported Q4 earnings on Tuesday that beat estimates on revenue and active riders, but the company’s net loss widened to $356M, bringing its losses for the year to $2.6B. It also didn’t give an update to its profitability timeline as Uber (NYSE:UBER) did during its earnings report last week, leading the stock to fall 5% AH. As investors grow increasingly suspicious of IPOs that are still racking up losses, Airbnb (AIRB) said it swung to a $322M loss for the first nine months of last year as costs rose steeply. The slide into the red could affect the lodging provider’s price tag as it aims to go public “during 2020.”
Coronavirus weighs on Carnival
Another 39 people have tested positive for the coronavirus on the cruise ship Diamond Princess quarantined in Japan, with one quarantine officer also infected, bringing the total to 175. The quarantine officer had been following rules that require the wearing of a mask and gloves but not a full protective suit, according to the Nikkei. The British-flagged Diamond Princess is managed by Princess Cruise Lines, a unit of Carnival Corp. (NYSE:CCL), whose shares have stumbled 17% since the virus started spreading globally on Jan. 21.
Nissan seeks damages from Ghosn
Nissan (OTCPK:NSANY) has filed a civil lawsuit in Japan against former Chairman Carlos Ghosn, suing for ¥10B ($91M) in damages for alleged financial misconduct while he was leader of the automaker and alliance partner Renault (OTCPK:RNLSY). The amount of the claim may “increase in future” depending on fines and penalties that Nissan will be obliged to pay regulators. Ghosn was arrested in November 2018 for understating his annual salary and misusing company funds, and faced trial in Japan until making a dramatic escape to Lebanon at the end of December.
Trump touts a different kind of MAGA
During a press briefing at the Oval Office, President Trump took a moment to lift a sign, entitled, “The trillion $ club,” that displayed the names “Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL), Google (GOOG, GOOGL) and Amazon (NASDAQ:AMZN).” “For 144 days, we set a record stock market. It means 401Ks, it means jobs,” he said, while displaying the acronym. The Trump administration has had a sometimes tense relationship with Big Tech and the recent comments came just hours after the FTC announced it will examine small unreported acquisitions by all four companies – and Facebook (NASDAQ:FB).
What else is happening…
Bed Bath & Beyond (NASDAQ:BBBY) warns on holiday sales.
Google Health (GOOG, GOOGL) now has more than 500 employees.
SoftBank (OTCPK:SFTBY) earnings whacked by Vision Fund losses.
Micron (NASDAQ:MU) +3% premarket as UBS sees ‘cyclical upswing.’
NTSB opens its public docket on two Tesla (NASDAQ:TSLA) crashes.
J&J (NYSE:JNJ) partners to accelerate coronavirus vaccine development
Mastercard (NYSE:MA) prepares for entry into Chinese payments market.
Global carbon emissions flatlined in 2019 – IEA.
Tuesday’s Key Earnings
Dominion Energy (NYSE:D) +0.8% on an earnings topper.
Hasbro (NASDAQ:HAS) -0.8% giving back earlier gains.
Hilton (NYSE:HLT) +1.4% posting a solid outlook.
Lyft (LYFT) -5.7% AH with forecast of continued losses.
Under Armour (NYSE:UAA) -18.9% giving weak guidance.
Western Union (NYSE:WU) -5.1% AH dragged down by forex effects.
Today’s Economic Calendar
7:00 MBA Mortgage Applications
8:30 Fed’s Harker: Economic Outlook
9:00 Fed’s Daly Speech
10:00 Powell to testify before the house financial services committee
10:00 Atlanta Fed’s Business Inflation Expectations
10:30 EIA Petroleum Inventories
1:00 PM Results of $27B, 10-Year Note Auction
2:00 PM Treasury Budget
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Good morning. Happy Tuesday.
The Asian/Pacific markets closed mostly up. China, Hong Kong, South Korea, India, New Zealand, Taiwan, Australia and Malaysia did well; Japan and Thailand were weak. Europe, Africa and the Middle East are currently doing very well. The UK, Denmark, Turkey, Germany, Russia, Greece, Finland, Norway, the Netherlands, Italy, Portugal, Israel, Austria and Sweden are doing well; the UAE and Saudi Arabia are weak. Futures in the States point towards a positive open for the cash market.
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VIDEO: State of the Market
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The dollar is up slightly. Oil and copper are up. Gold and silver are down. Bonds are down.
Stories/News from Seeking Alpha…
Sprint is up more than 60% in premarket trading on reports that its long-awaited merger with T-Mobile (NASDAQ:TMUS) will finally be approved by U.S. District Judge Victor Marrero. That would shut down a challenge by state attorneys general who allege Sprint’s (NYSE:S) tie-up would lead to higher cellphone bills despite approval from federal antitrust and telecom officials. Merging the third and fourth top U.S. wireless carriers will result in a company with more than 90M customers that would aim to snatch even more subscribers from AT&T (NYSE:T) and Verizon (NYSE:VZ). TMUS +9% premarket.
Powell on the Hill
Fed Chair Jerome Powell is likely to sound upbeat about the U.S. economic outlook today when he begins his semiannual testimony before Congress, even as he nods to the potential threat from the coronavirus in China. The central bank lowered interest rates three times in 2019, but earlier this month signaled a pause in easing unless there was a clear threat of inflation moving away from its 2% target. Fed Vice Chair Randal Quarles, Minneapolis Fed President Neel Kashkari and St. Louis Fed President James Bullard are all set to comment at separate events later in the session.
Stocks advance with virus in focus
The S&P 500 and the Nasdaq scored fresh record highs yesterday as Chinese workers and factories gradually returned to business, while new coronavirus statistics showed signs that the disease was slowing. There were 2,478 new confirmed cases on the mainland as of Monday, down from 3,062 on the previous day, bringing the total to 42,638. Stocks in Shanghai climbed 0.4% on the news, while U.S. equity futures suggest a solid open on Wall Street, ahead of earnings from Under Armour (NYSE:UAA), Hasbro (NASDAQ:HAS), Hilton (NYSE:HLT) and Lyft (NASDAQ:LYFT).
Chinese businesses seek billions in loans
More than 300 Chinese companies are seeking bank loans totaling at least 57.4B yuan ($8.2B) to help to soften the impact of the coronavirus outbreak. “Banks will have the final say on lending decisions,” sources told Reuters. “The interest rates are likely to be on par with those offered to banks’ top clients.” Among the prospective borrowers are Meituan Dianping (MEIT), Xiaomi (XI), Didi Chuxing (DIDI), Megvii Technology and Qihoo 360.
S20 trio, Galaxy Z Flip
Seeking to revive sales after ceding its smartphone crown to Apple (NASDAQ:AAPL) last quarter, Samsung (OTC:SSNLF) is expected to launch three variants of Galaxy S today – the regular, the Plus and the Ultra – at its Unpacked 2020 event in San Francisco. The S20 phones won’t be Samsung’s first 5G phones, but they’re going to be the first 5G phones that matter, with all four major U.S. carriers now offering at least some form of next-generation networking. The S20 trio will be unveiled alongside the Galaxy Z Flip, a square-shaped foldable phone rumored to be cheaper than the bulky Galaxy Fold.
Executive shakeup continues
Google’s (GOOG, GOOGL) head of human resources, Eileen Naughton, will step down later this year amid rising tensions between the company’s top executives and rank and file employees. She’s been in the role since 2016, and led the company though a period of growth that saw its global workforce expand by more than 65% to 119,000. Among the tensions: Employee anger at the handling of sexual harassment claims, the firing of workers who organized protests against the company and the elimination of weekly all-hands meetings, as well as staff complaints about secret projects and the lack of diversity.
Uber fails to block gig worker law
U.S. District Judge Dolly Gee has rejected a request by Uber (NYSE:UBER) and Postmates (POSTM) to block California’s gig worker law, which will make it harder to classify workers as independent contractors. While the companies had proven they could suffer a “degree of irreparable harm” as a result of the legislation, the potential risks to them were “less important” than the public interest in setting a living wage and regulating employment. Investors have been watching the California dispute closely as the rule would require higher pay and other benefits like medical insurance.
Chinese officers charged in Equifax hack
The United States has charged four Chinese military officers with the hacking of major credit reporting agency Equifax (NYSE:EFX) in 2017 and making off with sensitive personal data on about 145M Americans. “The U.S. government doesn’t normally bring criminal charges against members of another country’s military or intelligence services outside of the U.S.,” according to U.S. Attorney General William P. Barr. But there are exceptions in cases of “indiscriminate theft of vast amounts of sensitive personal data of civilians.”
Latest in 737 MAX crisis
It will take “several quarters” to return Boeing’s (NYSE:BA) worldwide 737 MAX fleet to the skies following a grounding that has left about 700 planes on the tarmac. “We are not going to over-stress the system,” Randy Tinseth, Boeing’s vice president for marketing, said at the Singapore Airshow. The company announced last week it had discovered another software problem on the plane, but still aims to get the jet flying again by mid-2020, a deadline it previously said includes room for additional flaws.
What else is happening…
Slack (NYSE:WORK) soars, then falls, on IBM (NYSE:IBM) report.
Daimler (OTCPK:DDAIF) slashes dividend following third profit warning.
Coronavirus sees more withdrawals from Mobile World Congress.
Forever 21 prepares for sale to mall owners.
Why are millennial investors buying ExxonMobil (NYSE:XOM)?
Amazon (NASDAQ:AMZN) wants to depose Trump in JEDI challenge.
Monday’s Key Earnings
Allergan (NYSE:AGN) +1.3% with Vraylar sales up 88%.
Brookfield Infrastructure Partners (NYSE:BIP) +1.3% topping expectations.
Restaurant Brands (NYSE:QSR) +2.7% amid a big boost from Popeyes.
Today’s Economic Calendar
6:00 NFIB Small Business Optimism Index
6:00 Fed’s Daly Speech
8:55 Redbook Chain Store Sales
10:00 Powell to testify before the house financial services committee
10:00 Job Openings and Labor Turnover Survey
12:15 PM Fed’s Quarles: “Bank Supervision”
1:00 PM Results of $38B, 3-Year Note Auction
1:30 PM Fed’s Bullard: U.S. Monetary and Economic Policy
2:15 PM Fed’s Kashkari Speech
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Good morning. Happy Monday. Hope you had a good weekend.
The Asian/Pacific markets closed mostly down. China posted a gain, but Japan, Hong Kong, South Korea, India, New Zealand, Malaysia, Indonesia, Singapore and the Philippines posted moderate losses. Europe, Africa and the Middle East currently lean down. Hungary is up, but Denmark, Poland, Turkey, Russia, Greece, South Africa, Norway and Austria are down. Futures in the States point towards a flat open for the cash market.
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VIDEO: State of the Market
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The dollar is down. Oil is down; copper is up. Gold and silver are up. Bonds are up.
Stories/News from Seeking Alpha…
Global markets are treading cautiously after 97 people died from the coronavirus in China on Sunday. Japan’s Nikkei and Hong Kong’s Hang Seng Index both fell 0.6% on the day, while the Shanghai Composite Index rose 0.5% after some companies like Hon Hai Precision Industry (OTCPK:HNHAF,OTCPK:HNHPD) landed government approval to resume some production at select locations. Meanwhile, European stocks are also having a soft day, with the Stoxx 600 Index slipping 0.3%. U.S. stock futures are flat heading into the new week.
Coronavirus by the numbers
The total number of confirmed coronavirus 2019-nCoV cases across the world is 40,561 and 910 deaths have been reported. Japan’s Health Ministry says another 60 people on Carnival Corporation’s (NYSE:CCL) Diamond Princess ship have tested positive to bring the total number of people infected to 130. Capital Economics estimates the coronavirus will cost the world economy $280B in Q1 and send global GDP in reverse (quarter over quarter) for the first time since 2009. Still, the longer-term view from analysts isn’t so gloomy. “We assume the virus will be contained soon, and that lost output is made up in subsequent quarters so that world GDP reaches the level it would have done had there been no outbreak by the middle of 2021,” notes Capital Economics. The People’s Bank of China is busy taking action to prop up the economy, injecting 1.7T yuan of liquidity into the market and instructing banks not to call in loans for companies based in the virus-stricken Hubei province.
Higher food prices in China
China’s consumer inflation rate rose 5.4% in January to sail past the 4.9% mark anticipated by analysts and 4.5% pace in December. Higher food prices were recorded during the month, driven by strong demand ahead of the Lunar New Year holiday and soaring pork prices. After stripping out the more volatile food and energy categories, core inflation was up 1.5% during the month.
Budget unveiling
President Trump is expected to release a $4.8T budget today for fiscal year 2021 that includes cuts to some social programs and foreign aid while boosting military spending by 0.3%. The White House budget represents the opening bid in spending negotiations with Congress for the next fiscal year. The U.S. budget deficit is drawing more attention recently after the Congressional Budget Office forecast that the deficit will hit $1.02T in fiscal year 2020, up from a budget deficit of $585B in fiscal year 2016.
M&A buzz
L Brands (NYSE:LB) is expected to announce some time this week a deal to unload its Victoria’s Secret brand to Sycamore Partners. The Victoria’s Secret business generated $7.4B in sales last year, but is viewed by some consumers as out of date with its focus. A few months ago, Victoria’s Secret canceled its once-popular annual fashion show. Shares of L Brands are down 10.7% YTD.
Toy story
Mattel (NASDAQ:MAT) says it closed two factories in Asia and plans to shutter another one in Canada as it keeps looking for ways to cut costs. Manufacturing sites in China and Indonesia were shut down last year by the toy company, while a facility in Montreal that makes Mega Bloks is scheduled to be closed some time this year. Mattel’s manufacturing strategy differs from the outsourcing strategy used by rival Hasbro (NASDAQ:HAS), with it employing about 35K workers during peak manufacturing periods. Shares of Mattel are down 7.6% over the last 52 weeks to trail by a wide margin the 11.6% gain for Hasbro. Both companies step into the earnings confessional later this week.
Bitcoin gets frisky again
The crypto sector returned to its old ways of making big moves over the weekend. With yesterday’s push back above $10K, Bitcoin (BTC-USD) is now up more than 40% in 2020 and stands at its strongest level since September. The one-year high for Bitcoin is around $13,797.
Automakers look to restart production in China
Tesla (NASDAQ:TSLA) resumed production at its Shanghai factory today. Government officials in Shanghai are assisting Tesla in the restart amid the coronavirus outbreak. “In view of the practical difficulties key manufacturing firms including Tesla have faced in resuming production, we will coordinate to make all efforts to help companies resume production as soon as possible,” stated Shanghai municipal government spokesman Xu Wei. Meanwhile, Volkswagen (OTCPK:VWAGY) is opening a plant it operates with SAIC in Shanghai and most of the plants in the FAW joint venture. Daimler (OTCPK:DDAIF) and Ford (NYSE:F) are also restarting production at certain locations, while Toyota Motor (NYSE:TM) and Honda Motor (NYSE:HMC) have extended their production shutdowns in China for the time being. General Motors (NYSE:GM) aims to restart production on February 15. Fiat Chrysler Automobiles (NYSE:FCAU) is the first automaker to flag multi-week disruptions at European factories due to parts shortages.
Spotlight on ADP
ADP (NASDAQ:ADP) is holding an Innovation Day today. Members of the ADP senior management team and technology organization will provide updates on the company’s investments in innovation and the vision for the technology portfolio of the human capital management business. ADP is up 10.1% YTD.
What else is happening…
Lockheed Martin (NYSE:LMT) and Raytheon (NYSE:RTN) drop out of the Singapore Airshow.
Giga Berlin eligible for state subsidies.
Facebook (NASDAQ:FB) to battle IRS on $9B tax bill.
Today’s Economic Calendar
12:30 PM TD Ameritrade IMX