Good morning. Happy Friday.
The Asian/Pacific markets leaned up. Japan, South Korea, India, Australia and the Philippines led while Hong Kong lagged. Europe, Africa and the Middle East currently are doing well. The UK, France, Germany, Finland, the Netherlands, Italy, Portugal, Sweden and the Czech Republic are doing well; Poland, the UAE and Hungary are lagging. Futures in the States point towards a down open for the cash market.
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BLOG: Where are We Within the Long-Term Bull Market
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The dollar is flat. Oil is down; copper is up. Gold is down; silver is up. Bonds are up.
Stories/News from Seeking Alpha…
The Federal Reserve is putting fresh limits on the U.S. banking industry after annual stress tests found that several institutions could get close to minimum capital levels in scenarios tied to the coronavirus pandemic. Big banks will be required to suspend share buybacks for the third quarter (most of them already paused repurchases in Q2) and limit dividend payments at their current level. While “all large banks remain strongly capitalized,” the Fed – for the first time in the decade-long history of the stress test – is requiring banks to resubmit updated capital plans later this year.
Surprise loss for Nike
Shares of the sneaker giant are down nearly 4% premarket on the back of an unexpected quarterly loss and a sales decline of 38% Y/Y. Results were significantly impacted by the closings of stores during global lockdowns, though digital sales soared 75%, representing about 30% of total revenue. Expenses for shipping and returns also put more pressure on Nike’s (NYSE:NKE) profits – gross margin came in at 37.3% of sales vs. 45.7% a year ago and 43.3% consensus.
#BoycottFacebook
Verizon (NYSE:VZ) is next to pull advertising from Facebook (NASDAQ:FB) in the “Stop Hate for Profit” campaign, following in the footsteps of Ben & Jerry’s, REI, Patagonia and The North Face. Last week, six organizations, including the ADL and NAACP, called on companies to pause advertising on the social network for July “to show they will not support a company that puts profit over safety.” A Verizon spokesperson said the decision would stand until Facebook and Instagram “can create an acceptable solution that makes us comfortable.”
Past the worst, transformational recovery
“We are probably past the lowest point” of the economic crisis caused by the coronavirus pandemic, ECB President Christine Lagarde said in a webinar overnight, boosting markets across Europe. She still warned of the possibility of “a severe second wave” and cautioned that some industries like airlines, hospitality and entertainment will come out of the “recovery process in a different shape.” To cope with the recession, the ECB in June extended its Pandemic Emergency Purchase Program (PEPP) until mid-2021 and increased it by €600B to €1.35T.
Next move for stocks
U.S. equity futures are little changed in early morning action following a late-day surge yesterday that helped major averages recover some of the steep losses seen mid-week. A fresh record of more than 37,000 new coronavirus cases was reported nationwide on Thursday, prompting Texas Governor Greg Abbott to pause further phases of the state’s reopening. “We’re stuck in a bit of a range,” said Shane Oliver, chief economist at AMP Capital. “There’s a degree of optimism that any second wave will be offset by stimulus… but if we have to go back to a renewed lockdown then it’s a different story, and markets face a lot more downside risk.”
Fight over Obamacare
The Trump administration is urging the Supreme Court to overturn the Affordable Care Act in a case that’s set to be heard around the time of the November election. The brief argues that because the law’s requirement to have health insurance was upheld in court as a tax in 2012 – and Congress has since repealed the financial penalty for violating that requirement in 2017 – it is no longer a tax and therefore no longer constitutional. “The entire ACA thus must fall with the individual mandate, though the scope of relief entered in this case should be limited to provisions shown to injure the plaintiffs,” Solicitor General Noel Francisco wrote in the filing.
Contact tracing
35 states are now using Salesforce’s (NYSE:CRM) Work.com technology to carry out contact tracing, CEO Marc Benioff told CNBC, calling the platform a “critical technology.” The service launched in May to help businesses reopen their offices and operate during the coronavirus pandemic. “This is a time where every company needs to reassess its relevance to maintain its market share and innovation,” he added. “Right now for Salesforce that’s a major focus on Work.com.”
Albertsons IPO
Shares of the grocery chain operator will begin trading this morning on the NYSE, which was shuttered for two months because of the coronavirus pandemic. Existing shareholders like Cerberus Capital raised $800M on Thursday, less than anticipated, after the company’s IPO priced at $16 apiece, below its $18-$20 per share target range and valuing Albertsons (ACI) at around $9.3B. Even at that size, the listing will be one of the larger IPOs at the Big Board so far this year.
Aviation industry watch
CEOs of American Airlines (NASDAQ:AAL), Delta (NYSE:DAL), United (NASDAQ:UAL), Southwest (NYSE:LUV) and JetBlue (NASDAQ:JBLU) are heading to the White House today to discuss a range of coronavirus-related travel issues with VP Mike Pence and other senior U.S. officials. They include the industry’s push for federally mandate temperature checks, EU travel restrictions on U.S. travelers, contract tracing of passengers and the impact of COVID-19 on travel demand. Meanwhile, U.S. aviation unions are asking Congress for another $32B bailout to keep hundreds of thousands of workers employed past Sept. 30 as a resurgence in coronavirus cases raises fears that air travel may not rebound this year.
What else is happening…
Warner Bros. (NYSE:T) postpones ‘Tenet’ release to August.
Unilever (UL, UN) drops ‘Fair & Lovely’ skin lightening product name.
Virgin Galactic (NYSE:SPCE) completes second New Mexico glide test.
Details revealed for the 2021 Ford (NYSE:F) F-150.
Amazon (NASDAQ:AMZN) pays over $1B to buy self-driving startup Zoox.
Macy’s (NYSE:M) to cut 3,900 jobs in push to save cash.
ETF price wars: BlackRock (NYSE:BLK) cuts fee on largest fund.
How far will White House go to secure 5G future?
Thursday’s Key Earnings
Nike (NKE) -3.8% AH as earnings fell short for lockdown quarter.
Rite Aid (NYSE:RAD) +26.6% on retail and services strength.
Today’s Economic Calendar
8:30 Personal Income and Outlays
10:00 Consumer Sentiment
1:00 PM Baker-Hughes Rig Count
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Good morning. Happy Thursday.
The Asian/Pacific markets were weak. Japan, South Korea, New Zealand, Australia, Singapore and the Philippines all dropped at least 1%. Europe, Africa and the Middle East currently lean down. The UAE, Russia, Greece, South Africa, Norway and Hungary are down 1%. Futures in the States point towards a down open for the cash market.
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BLOG: Where are We Within the Long-Term Bull Market
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The dollar is up. Oil and copper are down. Gold and silver are down. Bonds are up.
Stories/News from Seeking Alpha…
German payments company Wirecard has filed for insolvency proceedings, a week after auditors found a €1.9B hole in its balance sheet and an admission by the company that the money may never have existed. Shares were suspended from trading before the announcement, but have fallen nearly 90%, wiping out almost $12B of market value since the disclosure last week. CEO Markus Braun was also arrested on suspicion of falsifying accounts at the company, which processes tens of billions of euros in credit and debit transactions every year. Once the darling of Germany’s fintech world, Wirecard (OTCPK:WCAGY) eventually ascended to the DAX, the stock index of Germany’s 30 largest companies.
Economic reports on watch
Fears over a second wave shook investors on Wednesday as a rise in new coronavirus cases left businesses struggling to decide whether they should open, close or find a compromise. In the red for most of the night, S&P 500 futures have pared most of their losses to trade near the starting line ahead of some important economic data. Weekly jobless claims are expected to have declined to 1.3M in the week ending June 20 (from 1.508M), overall orders for durable goods are seen rebounding 10.6% in May, while the final GDP reading for Q1 probably decreased at a 5.0% annualized rate.
Stress tests
Dividend-focused bank investors will be paying attention this evening to the first round of the Fed’s annual stress tests on the largest U.S. financial institutions; they already paused buybacks for the quarter. Complicating things, the Fed this year will not outrightly “pass” or “fail” banks, making the results even more ambiguous for analysts and investors trying to calculate the health of the industry. The Fed also is expected to provide guidance on how banks would fare if the coronavirus crisis worsens.
Built Ford Tough
Ford (NYSE:F) is taking the wraps off its 2021 F-150 tonight and the stakes couldn’t be higher. Traditional and hybrid versions of the pickup are scheduled to be unveiled and the all-electric version is seen coming sometime in the next two years – in line or slightly later than new electric pickups from GM (NYSE:GM), Tesla (NASDAQ:TSLA), Rivian and Nikola (NASDAQ:NKLA). Reports suggest the new F-Series will feature a lay-flat “sleeper seat” that mimics a first-class airline experience, Sync 4 infotainment with over-the-air update capabilities and a larger touch screen.
Latest coronavirus bankruptcy
CEC Entertainment (CEC), the parent of Chuck E. Cheese and Peter Piper Pizza, has filed for Chapter 11 after the COVID-19 pandemic closed its locations and kept families at home. The current crisis was described as the “most challenging” in the company’s history and it intends to use the bankruptcy process to continue talks with stakeholders and landlords to restructure its balance sheet. CEC Entertainment, which was taken private by Apollo Global Management (NYSE:APO) in 2014, announced plans to go public last year, though the proposal was eventually terminated after its reverse merger with Leo Holdings collapsed.
Apple closes more stores it had reopened
The tech giant is temporarily shuttering seven stores around Houston, Texas as COVID-19 cases rise in the state, following the closure last week of nearly a dozen Apple Stores (NASDAQ:AAPL) across Florida, North and South Carolina, and Arizona. “We take this step with an abundance of caution as we closely monitor the situation and we look forward to having our teams and customers back as soon as possible,” the company said in a statement. Apple Stores tend to be located in important shopping centers and malls, which may be a good indicator of how smoothly retail operations are reopening in the U.S.
Google starts paying some news publishers
It’s a significant development in the years-long battle between Google (GOOG, GOOGL) and media companies. “Today, we are announcing a licensing program to pay publishers for high-quality content for a news experience launching later this year,” Brad Bender, Google’s VP of News, wrote in a blogpost. “This program will help participating publishers monetize their content through an enhanced storytelling experience. Where available, Google will also offer to pay for free access for users to read paywalled articles on a publisher’s site.”
SoftBank’s Son exits Alibaba board
SoftBank (OTCPK:SFTBY) founder Masayoshi Son says he’s left the board of China’s Alibaba (NYSE:BABA) coinciding with the departure of Alibaba co-founder Jack Ma. The development doesn’t signify any disagreement between him and the company, according to Son, who characterized the move as “graduating” from his most successful investment (now worth about $600B). In the rest of his annual presentation to investors, Son expressed confidence, saying the market is underestimating SoftBank’s potential and that its shareholder value is closer to $218B (vs. market capitalization of about $101B).
Battle over 5G
Singapore has given local telcos final approval to start building two 5G networks as it aims to have full islandwide coverage by 2025. Chinese telecom equipment giant Huawei lost out to Nokia (NYSE:NOK) and Ericsson (NASDAQ:ERIC) to build the main next-generation networks, but may be involved in the broader ecosystem at a reduced capacity. The U.S. has urged its allies to exclude Huawei from their 5G networks, accusing the tech firm of being backed by the Chinese military and including security vulnerabilities in its hardware that could be used for espionage by Beijing.
What else is happening…
Airlines slammed as states deter visitors due to spike in cases.
No evidence of contracting COVID-19 from food, packaging.
Zoom (NASDAQ:ZM) adds security chief to C-suite.
Amazon (NASDAQ:AMZN) launches cloud service for no-code apps.
Theaters on watch as Disney’s (NYSE:DIS) ‘Mulan’ may be postponed.
Minnesota sues Exxon (NYSE:XOM), Koch over climate change.
Bayer (OTCPK:BAYRY) to pay up to $10.9B to settle Roundup lawsuits.
Wednesday’s Key Earnings
BlackBerry (NYSE:BB) -5.5% AH after pandemic-hit Q1 results.
KB Home (NYSE:KBH) -13.6% AH missing expectations, weak guidance.
Today’s Economic Calendar
8:30 Durable Goods
8:30 Initial Jobless Claims
8:30 International trade in goods
8:30 Retail Inventories (Advance)
8:30 Wholesale Inventories (Advance)
8:30 GDP Q1
8:30 Corporate profits
9:30 Fed’s Kaplan: “The World Economy Transformed”
10:30 EIA Natural Gas Inventory
11:00 Kansas City Fed Mfg Survey
11:00 Fed’s Bostic: “Florida’s Economic Relaunch — What’s Next?”
12:00 PM Fed’s Mester Speech
1:00 PM Results of $41B, 7-Year Note Auction
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
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Good morning. Happy Wednesday.
The Asian/Pacific markets were mixed. South Korea, New Zealand and Indonesia did well; Hong Kong, India, Thailand and the Philippines were weak. Europe, Africa and the Middle East are currently mostly down. The UK, Denmark, Poland, France, Germany, Greece, South Africa, Switzerland, Spain, the Netherlands, Italy, Israel, Austria, Sweden and the Czech Republic are down more than 1%; Russia is doing well. Futures in the States point towards a down open for the cash market.
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BLOG: Where are We Within the Long-Term Bull 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…
Futures were already dipping into the red after the Nasdaq Composite notched a fresh record high, though contracts tied to the S&P 500 are now pointing to a 1% decline on worries about a wider transatlantic trade fight. The U.S. is weighing new tariffs on $3.1B of imports from France, Germany, Spain and the U.K., according to a notice published late Tuesday evening. As it prepares to open its borders to international travelers, the EU today may also extend a ban on visitors from America as Europeans are still prohibited from entering the U.S. under virus travel restrictions. Dr. Anthony Fauci told lawmakers on Tuesday that recent COVID-19 trends were “disturbing” as the U.S. recorded a 25% surge in new infections for the week ending June 21, with 10 states recording increases of 50%.
Phase four
Another stimulus package is in the making, though what form it will take is still being debated. “Whatever we do it’ll be much more targeted, much more focused on jobs, bringing back jobs and making sure we take care of our kids,” Treasury Secretary Steven Mnuchin told reporters. Earlier this week, President Trump appeared to suggest that there could be another round of stimulus checks on the way for Americans and details would likely be released “over the next couple of weeks.” Some other policies under consideration include a payroll tax cut and protections for businesses from coronavirus-related liabilities.
Efforts to reshore U.S. manufacturing
The U.S. International Development Finance Corp. is talking to companies about reshoring the manufacturing of PPE, generic drugs and pharmaceutical ingredients. The agency had originally opened its doors in January to boost U.S. overseas development financing efforts, but now appears to be boosting coronavirus response endeavors. The DFC, along with the Pentagon, intends to jointly administer $100M in supply chain reshoring funds – from the $2.3B coronavirus legislation passed in March – that can be leveraged into “tens of billions of dollars” in loans by using it as a pool of capital (similar to the U.S. Treasury’s backing of Fed loan facilities).
Rethinking Hong Kong
Besides the possibility of financial isolation, Hong Kong may see smaller capital investment on the infrastructure and tech fronts. Google (GOOG, GOOGL) told the FT it is considering alternative destinations for a high-speed internet cable after the U.S. government warned it against building the link to Hong Kong due to security concerns of exposing global data to China. The tech giant, together with Facebook (NASDAQ:FB), has backed the 8,000-mile high-capacity subsea cable – known as Pacific Light Cable Network – between the U.S., Hong Kong, Taiwan and the Philippines.
Junk bond sales record
Junk issuers have sold $46.7B of bonds so far in June, topping the previous monthly record of $46.4B in September 2013, according to data compiled by Bloomberg. Companies have hurried to build cash war chests due to the coronavirus pandemic, especially after the Fed announced plans to purchase some types of high-yield bonds to boost liquidity. “You get an invitation to a party from the Fed, Treasury and Congress – they offer to pick you up, take you home and bring you breakfast in bed the next morning,” said Bill Zox, a high-yield bond portfolio manager at Diamond Hill Capital Management. “You know it is going to be a party like no other.”
Money continues to roll into megacaps
Year to date, the Big 5 tech giants have outperformed the S&P 500’s decline of 3.5%. Amazon (NASDAQ:AMZN) is the leader, up 50%, while Microsoft (NASDAQ:MSFT) is ahead by 29%, Apple (NASDAQ:AAPL) is 26% higher, Facebook (FB) is up 19% and Alphabet (GOOG, GOOGL) has climbed 10%. Among the fundamental arguments for the rise has been how these major tech names are insulated from the stay-at-home economic effects. People will still use Facebook and Microsoft’s Windows and Amazon will see increased business with brick-and-mortar retailers shut. Others are arguing that these megacaps are where Fed money is finding its way.
What to do with VMware?
Shares of Dell Technologies (NYSE:DELL) are up 16% in premarket trade as the company weighs options for its 81% stake in VMware (NYSE:VMW), which is worth roughly $50B. It’s specifically looking into a potential spinoff or purchasing the rest of the firm sources told WSJ. Dell originally picked up the VMware shares through its $67B acquisition of storage hardware maker EMC, which closed in 2016. VMW +9% premarket.
Skin-lightening products
Unilever (UL, UN) is facing fresh racism complaints about its Fair & Lovely brand, one of the firm’s best-selling products in India with $560M in annual sales. Employees have grilled top executives at town-hall events about why the company still sells skin-lightening products, while several online petitions have been started as the conversation shifts to social media. “Fair & Lovely upholds principles that no association should be made between skin tone and a person’s achievement, potential or worth,” a Unilever spokeswoman declared. “We’re aware that historic advertising is available on the internet, which is not in keeping with the current values of the brand.” Johnson & Johnson (NYSE:JNJ) recently said it would stop selling similar skin-lightening products under its Clean & Clear and Neutrogena brands.
Meat industry will be obsolete in 15 years
“From a nutritional standpoint our products match the protein quality and content of the animal products that they replace” and “ours is a clear winner from a health and nutrition standpoint,” Impossible Foods CEO Patrick Brown told CNBC. “This is why I think people are increasingly aware plant-based products are going to completely replace the animal-based products in the food world within the next 15 years. That’s our mission. That transformation is inevitable.” While Impossible markets primarily to the food-service industry, rival Beyond Meat (NASDAQ:BYND) has placed its focus on the consumer and grocery sector.
What else is happening…
Twitter (NYSE:TWTR) joins Uber (NYSE:UBER) in making Election Day a paid holiday.
Microsoft (MSFT) plans to double the number of Black managers and senior leaders.
Mercedes, Nvidia (NASDAQ:NVDA) team on automated driving architecture.
Facebook (FB) cancels its cheapest VR headset.
Judge orders GM (NYSE:GM) and Fiat (NYSE:FCAU) to talk over bribery lawsuit.
Carnival (NYSE:CCL) cut to junk status by S&P Global Ratings.
Etsy (NASDAQ:ETSY) tops $100 as sell-side love continues.
Tuesday’s Key Earnings
La-Z-Boy (NYSE:LZB) +0.5% AH restarting furniture production.
Today’s Economic Calendar
7:00 MBA Mortgage Applications
9:00 FHFA House Price Index
10:00 State Street Investor Confidence Index
10:30 EIA Petroleum Inventories
11:00 Survey of Business Uncertainty
11:30 Results of $20B, 2-Year FRN Auction
12:30 PM Fed’s Evans: U.S. Monetary Policy
1:00 PM Results of $47B, 5-Year Note Auction
2:00 PM Fed’s Bullard: “COVID-19 and the Economy”
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Good morning. Happy Tuesday.
The Asian/Pacific markets leaned to the upside. Japan, China, Hong Kong and India led while Indonesia and the Philippines lagged. Europe, Africa and the Middle East are currently posting solid gains. The UK, Denmark, Poland, France, Germany, Russia, Greece, South Africa, Finland, Norway, Hungary, Spain, the Netherlands, Italy, Austria and Sweden are up 1% or more. Futures in the States point towards a moderate gap up open for the cash market.
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BLOG: Where are We Within the Long-Term Bull Market
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The dollar is down. Oil and copper are up. Gold and silver are up. Bonds are down.
Stories/News from Seeking Alpha…
Trade-related headlines are casting light on the delicate state of the markets after a comment from Peter Navarro sent assets whipsawing. In an interview on Fox News, the White House trade adviser said a hard-won U.S.-China trade deal was “over,” though he later clarified that his remark had referred to the “lack of trust” in the Chinese administration. President Trump later confirmed the trade deal between the U.S. and China was “fully intact,” adding he hoped Beijing would continue to live up to the terms of the agreement. U.S. stocks are likely to continue their climb higher today, with futures tied to the S&P 500 ahead by 0.8%, as manufacturing and services sectors begin to recover from lockdowns. Data from Europe overnight showed an upturn in June, while surveys of American purchasing managers will be released at 9:45 a.m. ET.
V-shaped?
Predictions on the current stock rally continue to rage and forecasts for the economy are no different. “You’ll see a big V in terms of the economy going up for the next few months because it’s been closed,” Blackstone CEO Steve Schwarzman told Bloomberg Invest Global on Monday, though it may “take quite a while before we sync up and get back to 2019 levels.” Also at the event, hedge fund manager Bill Ackman said he believes the recovery will begin by year-end and sees a normalization of the economy in the second half of 2021.
Worker visas added to green card ban
The Trump administration’s ban on green cards issued outside of the U.S. will stay in effect until the end of the year and many temporary work visas like H-1Bs will be added to the freeze as well, according to the Associated Press. The move is estimated to free up as many as 525,000 jobs while the economy is suffering from the effects of COVID-19. Tech-industry officials and other business leaders have warned that the decision would cramp companies’ ability to recruit top talent to the U.S. and the order is likely to be challenged in court by business groups.
Macs leave Intel for custom silicon
At its Worldwide Developers Conference, Apple (NASDAQ:AAPL) officially announced the transition from Intel (NASDAQ:INTC) chips to custom silicon for Macs based on ARM (OTCPK:SFTBY) architecture. It’s also making two changes to its app approval policies and will let iPhone users change default mail and browser apps, helping address antitrust concerns. Other highlights: The CarKey feature will enable iPhones and Apple Watches to unlock, lock, and start NFC-compatible cars, while some COVID-19 features were introduced like hand washing reminders.
Mixer comes to an end
Microsoft (NASDAQ:MSFT) is shutting down its Mixer live-streaming service and will move its streamers and the audience to Facebook Gaming (NASDAQ:FB). It’s a setback for the company’s ambitions to compete with Twitch (NASDAQ:AMZN) and YouTube (GOOG, GOOGL), but looks likely to broaden its gaming service reach: Microsoft will provide its Project xCloud streaming service to Facebook Gaming. “It became clear that the time needed to grow our own livestreaming community to scale was out of measure with the vision and experiences we want to deliver to gamers now,” said Microsoft’s Phil Spencer. As of last August, Mixer had about 30M viewers.
Biggest work-from-home winner
Fastly (NYSE:FSLY) has surpassed Zoom (NASDAQ:ZM) to become the best performer among tech companies since the coronavirus pandemic began roiling the economy. Shares surged 15% on Monday to record a 60% gain over the past seven trading days, and are up 222% since the market’s peak on Feb. 19 (Zoom is up 159% over that stretch). As a cloud computing services provider, Fastly has major customers like Shopify (NYSE:SHOP), Spotify (NYSE:SPOT) and Slack (NYSE:WORK), which are all seeing usage spikes with so many people working remotely.
The ADL and NAACP last week called for big advertisers to pull spending from Facebook (FB) for July to protest toxic content on its platforms. Several apparel brands have taken up the call, including The North Face and Patagonia, while Ben & Jerry’s is considering joining the group. “What they’ve been doing is not fully right with our values, period,” said CEO Matthew McCarthy. “The reality is, anything that’s right for the business, but wrong for our values, is wrong.” While Ben & Jerry’s parent Unilever (UL, UN) said the move is not a solution “at this stage,” the ice cream brand has taken different positions than the broader company in the past.
Plant-based breakfast
As part of its summer menu, Starbucks (NASDAQ:SBUX) will begin selling a breakfast sandwich made with Impossible sausage at most U.S. locations. “Over the years, in response to customer interest, we have added plant-based milk alternatives such as soy, coconut, almond, and oat milk. We are thrilled to expand our plant-based menu into food with this new breakfast sandwich,” said Michael Kobori, chief sustainability officer at the company. Previously, Starbucks partnered with Beyond Meat (NASDAQ:BYND) to offer similar plant-based sandwiches in Canada and China.
Space travel agency
Shares of Virgin Galactic (NYSE:SPCE) surged 16% on Monday after signing a “Space Act Agreement” with NASA. The deal will see the company find would-be space travelers, train them and organize transport to the International Space Station. “We are excited to partner with NASA on this private orbital spaceflight program, which will not only allow us to use our spaceflight platform, but also offer our space training infrastructure to NASA and other agencies,” Virgin Galactic CEO George Whitesides said in a statement.
Boon for the energy industry
It’s the single-largest energy infrastructure investment in the region, and the biggest in the world in 2020. A consortium of six global investors has entered into a $20.7B agreement with Abu Dhabi National Oil Company to acquire a 49% stake in a newly-formed subsidiary, ADNOC Gas Pipeline Assets, with lease rights to 38 pipelines. Those involved are Global Infrastructure Partners, Brookfield Asset Management (NYSE:BAM), Singapore’s sovereign wealth fund GIC, Ontario Teachers’ Pension Plan, NH Investment & Securities and Snam.
What else is happening…
MLB is back, but questions remain about the season.
Sanofi (NASDAQ:SNY), Translate Bio (NASDAQ:TBIO) expand mRNA vaccine collaboration.
SoftBank (OTCPK:SFTBY) plans to sell up to $21B worth of T-Mobile (NASDAQ:TMUS) stock.
Spotify (SPOT) launches on Comcast’s (NASDAQ:CMCSA) Xfinity cable service.
Carnival (NYSE:CCL) cancels all cruises through Sep. 30.
JPMorgan predicts Nikola (NASDAQ:NKLA) will lose a third of its value.
American Airlines (NASDAQ:AAL) to raise $2B from increased share sale.
Today’s Economic Calendar
8:55 Redbook Chain Store Sales
9:45 PMI Composite Flash
10:00 New Home Sales
10:00 Richmond Fed Mfg.
1:00 PM Results of $46B, 2-Year Note Auction
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Good morning. Happy Monday. Hope you had a great weekend.
The Asian/Pacific markets leaned to the downside. India and the Philippines did well, but Hong Kong, South Korea, New Zealand, Indonesia and Thailand were weak. Europe, Africa and the Middle East currently lean down. Turkey and the UAE are up, but France, Germany, Finland, Norway, Spain, Italy, Portugal, 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 is down; copper is up. Gold and silver are up. Bonds are up.
Stories/News from Seeking Alpha…
While Facebook and Google have canceled their annual developer conferences, F8 and I/O, Apple (NASDAQ:AAPL) feels the show must go on albeit in a different format. The tech giant’s Worldwide Developers Conference will be hosted online today for the first time since it began more than three decades ago. The biggest announcement at the event is likely to be a fundamental shift from Intel-based (NASDAQ:INTC) processors to ARM-based (ARMHF) chipsets that will be designed in-house for Mac desktops and laptops. Also expected: iOS 14 and its sibling iPadOS 14, a new version of macOS, some updates for watchOS and tvOS, a refreshed Apple TV and Apple AirTags. AAPL +1.3% premarket.
Rally goes on despite rise in coronavirus cases
U.S. stock index futures are pointing to another solid session at the open, climbing more than 1% in overnight trade, following their fourth weekly gain in five weeks. The U.S. reported more than 30K additional coronavirus cases on Friday, the highest number of confirmed one-day infections since May 1, while Nevada, Florida, California and Arizona reported record-high single-day infections. While some point to a disconnect between the economy and market, others see the unlikelihood of returning to lockdowns, or sentiment that downstream health effects would be worse if a shutdown was imposed. Continued waves are also likely to follow every lockdown until a vaccine is found or herd immunity is reached.
Wirecard shares crash again
“There is a prevailing likelihood that the bank trust account balances in the amount of €1.9B do not exist,” Wirecard (OTCPK:WCAGY) said Monday as shares plunged another 40% to €14.65 on Germany’s Tradegate exchange. The development comes after CEO Markus Braun quit on Friday while the company scrambled to secure a financial lifeline and its search for the money hit a dead end in the Philippines. Wirecard’s stock has already tumbled 75% since auditors refused to sign off on its 2019 accounts last week, and the firm withdrew its preliminary results for 2019/20 as well as forecasts. It’s a major hit for the Munich-based fintech success, which entered Germany’s blue-chip DAX index in 2018 at the expense of Commerzbank (OTCPK:CRZBY).
More German corporate news
Germany’s third-richest man is threatening to scupper a €9B bailout for Deutsche Lufthansa (OTCQX:DLAKY) that would dilute his shares and influence at the 70-year-old airline. Billionaire Heinz-Hermann Thiele, who owns a 15% holding in the German carrier, would only need to win a third of the vote at Thursday’s virtual shareholder meeting to sink the current plan. Thiele feels the “state is profiteering” from the collapse and will make his case to Lufthansa CEO Carsten Spohr and the two German ministers who brokered the bailout in an online meeting today.
The big PPP borrowers
Bowing to bipartisan pressure in Congress, the SBA and Treasury are releasing the names of borrowers who received Paycheck Protection Program loans of $150K or more, accounting for about 73% of funds lent through the program. “We value transparency and our fiduciary responsibility to ensure American taxpayer funds are used appropriately,” SBA Administrator Jovita Carranza declared. Note: Most of the borrowers who took advantage of taxpayer-funded forgivable loans will still remain unknown. Of the roughly 4.6M borrowers in the program, about 86% took out loans worth less than $150K.
Brand names and logos
Eskimo Pie, founded in 1920, is changing its name and marketing in the wake of nationwide protests over racial justice, following similar moves by the makers of Aunt Jemima and Uncle Ben’s. “We are committed to being a part of the solution on racial equality, and recognize the term is derogatory,” said Elizabell Marquez, head of marketing for Dreyer’s Grand Ice Cream. Dreyer’s is the U.S. subsidiary of Froneri, a joint venture between Nestle (OTCPK:NSRGY) and private equity company PAI Partners.
China bans some U.S. chicken, shuts PepsiCo plant
After “temporarily suspending” imports from U.S. poultry producer Tyson Foods (NYSE:TSN), China ordered a PepsiCo (NASDAQ:PEP) factory to close on Sunday as authorities clamp down on the food industry amid a new coronavirus cluster in Beijing. Two of the eight confirmed COVID-19 cases at the plant were from workers that had made purchases at the Xinfadi Market, where the latest outbreak in the city emerged. The marketplace, which supplies more than 70% of Beijing’s fresh produce, has been sealed off, while dozens of communities and schools have been forced to close.
Details of Hong Kong national security law
Beijing will set up a dedicated central-government office in Hong Kong to collect intelligence and handle crimes against national security, according to the state-run Xinhua News Agency. Provisions in the new law will supersede existing Hong Kong legislation should there be inconsistencies between them, while China’s legislature would be empowered to issue judicial interpretations and Hong Kong leader Carrie Lam will be able to appoint specific judges to hear national security cases. On Friday, Secretary of State Mike Pompeo said Washington would in future treat Hong Kong as a Chinese city, rather than a semi-autonomous one, putting its special trade status and other privileges on the line.
What else is happening…
American Airlines (NASDAQ:AAL) to raise $3.5B in new financing.
Gilead Sciences’ (NASDAQ:GILD) remdesivir approved in India at $39-52 per dose.
NIH halts clinical trial of hydroxychloroquine as COVID-19 treatment.
New York & Co. parent, RTW Retailwinds (NYSE:RTW), may soon file for bankruptcy.
Banks win right to liquidate chunk of Luckin (NASDAQ:LK) stock owned by chairman.
PG&E (NYSE:PCG) gets approval for bankruptcy reorganization; files to offer $4B shares.
Today’s Economic Calendar
8:30 Chicago Fed National Activity Index
10:00 Existing Home Sales
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