Good morning. Happy Friday.
The Asian/Pacific markets suffered big losses. China, Hong Kong, Australia, Malaysia, Indonesia, Singapore and Thailand dropped more than 1%. Europe, Africa and the Middle East are mostly down. The UK, Denmark, France, Germany, Switzerland, Hungary, Singapore, Italy, Austria, Sweden and the Czech Republic are down more than 1%. Futures in the States point towards a small down open for the S&P and a big down open for the Nasdaq.
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VIDEO:Trading Gap Ups
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The dollar is down. Oil is up; copper is down. Gold is up; silver is down. Bonds lean down.
Stories/News from Seeking Alpha…
Shares in Shanghai plunged nearly 4% overnight as China ordered the U.S. to close its consulate in the southwestern city of Chengdu, a day after Washington forced Beijing to leave its mission in Houston, citing alleged spying. The Chengdu consular district serves as a key U.S. listening post for developments in Tibet and China’s development of strategic weapons in neighboring regions. It’s the latest flashpoint between the two countries as the tit-for-tat spat clouds prospects for trade between the world’s two largest economies.
Escalating toward new cold war
Adding to the tensions is a speech from Secretary of State Michael Pompeo that depicted China’s leaders as tyrants bent on global hegemony. “If the free world doesn’t change Communist China, Communist China will change us,” he declared. “If we bend the knee now, our children’s children may be at the mercy of the CCP, whose actions are the primary challenge to the free world.” Pompeo also discussed the tech frontier. “We have stopped pretending Huawei is an innocent telecommunications company… we have called it what it is, a national security threat, and taken action accordingly.”
Stocks set to extend losses
Tech is under more pressure today with Nasdaq futures down 1.1%, while contracts tied to the Dow and S&P 500 are off 0.4%, as tensions rise between Beijing and Washington. Another rebound of business activity across the eurozone didn’t help markets there as the Euro Stoxx 50 fell 1.6%. Over in the U.S., Senate Republicans scrapped their plans to release a proposal for the next coronavirus relief bill Thursday after continued differences with the White House. Stocks have been sensitive to cues about stimulus, as well as the flurry of corporate earnings. On the calendar today, Verizon (NYSE:VZ) and Honeywell (NYSE:HON) are set to report.
One of the world’s greatest financial scandals
Goldman Sachs (NYSE:GS) has agreed to a $3.9B settlement with the Malaysian government over the multibillion-dollar 1MDB scandal. Backdrop: Malaysian prosecutors filed charges in December 2018 against three Goldman units for misleading investors over bond sales totaling $6.5B that the bank helped raise for the sovereign wealth fund. However, Goldman has pleaded not guilty to the charges, saying that certain members of government and 1MDB lied to it about how proceeds from the bond sales would be used. GS +1.7% premarket.
End of aircraft subsidies dispute
Along with the governments of France and Spain, Airbus (OTCPK:EADSY) has agreed to amend so-called launch aid arrangements, a subsidy designed to help manufacturers develop new plane models. “After 16 years of litigation at the World Trade Organization, this is the final step to stop the longstanding dispute,” Airbus said in a statement, after the U.S. was given the go-ahead to impose tariffs on as much as $7.5B worth of European exports annually. Back in February, Washington state lawmakers also repealed a key tax break for Boeing (NYSE:BA) to head off a parallel action by the EU at the WTO.
A bid for Brooks Brothers
Major U.S. mall owners have been increasingly looking for deals to salvage retailers – in many cases major tenants – that have been hit hard by the coronavirus pandemic. The latest? A company known as Sparc, which is comprised of Simon Property Group (NYSE:SPG) and Authentic Brands, has been designated as the “stalking horse” for bankrupted Brooks Brothers after making a $305M bid. The offer, still subject to better and higher bids and court approval by Aug. 5, pledges to keep at least 125 of Brooks Brothers’ stores open for business (it currently has 250 locations in North America).
Tech antitrust hearing delay
A high-profile House Antitrust hearing on Monday is likely headed for a delay due to a ceremony for the late Rep. John Lewis, Politico reports. When it does come, the hearing – set to feature Amazon’s (NASDAQ:AMZN) Jeff Bezos, Facebook’s (NASDAQ:FB) Mark Zuckerberg, Apple’s (NASDAQ:AAPL) Tim Cook and Google’s (GOOG, GOOGL) Sundar Pichai – will be one of the most highly anticipated such appearances in years. Not only will it be the first time the four testified at the same hearing, it will be the first congressional appearance for Bezos. In related news, Apple shares stumbled 4.5% yesterday on reports that multiple U.S. states are probing the tech giant for deceptive trade practices.
Film release shakeup
Just hours after Disney (NYSE:DIS) cleared the decks by delaying Mulan for the fourth time, as well as pushing back Star Wars and Avatar movies, more high-profile film releases are packing up for later dates. Paramount’s (NASDAQ:VIAC) Top Gun: Maverick, a sequel to 1986 hit Top Gun, was set to bow on Dec. 23 but now heads to July 2021. The studio had previously delayed A Quiet Place Part II to Labor Day weekend, as well as Sonic the Hedgehog 2, Jackass, Under the Boardwalk and The Tiger’s Apprentice. Sony (NYSE:SNE) is also moving its latest Spider-Man live-action sequel back a month.
What else is happening…
Fiat currency a “passing fad” – Gold closes in on all-time high.
Vodafone (NASDAQ:VOD) targets Frankfurt for towers business IPO.
Walmart (NYSE:WMT) turns up health moves with plans in Atlanta.
Retail trading boom has E*Trade (NASDAQ:ETFC) in high cotton.
Novavax (NASDAQ:NVAX) inks manufacturing deal for COVID-19 vaccine.
Thursday’s Key Earnings
American Airlines (NASDAQ:AAL) +3.6% with lower cash burn rate.
AT&T (NYSE:T) -0.9% on double-digit WarnerMedia decline.
Blackstone (NYSE:BX) -2.3% after distributable earnings miss.
Dow (NYSE:DOW) -3.4% posting larger-than-expected Q2 loss.
Freeport-McMoRan (NYSE:FCX) -2.2% as virus has ‘forever changed the way it runs.’
Intel (NASDAQ:INTC) -11.1% AH delaying next-generation chips.
Mattel (NASDAQ:MAT) +7.3% AH seeing growth in Barbie and games.
Southwest Airlines (NYSE:LUV) -1.5% hit by a $915M loss.
Twitter (NYSE:TWTR) +4.1% reporting strong Q2 user growth.
Today’s Economic Calendar
9:45 PMI Composite Flash
10:00 New Home Sales
1:00 PM Baker-Hughes Rig Count
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Good morning. Happy Thursday.
The Asian/Pacific markets were mixed. Hong Kong, India, Malaysia, Indonesia and Singapore closed up; Japan, South Korea, Taiwan and the Philippines closed down. Europe, Africa and the Middle East leaned down but were mostly quiet. Turkey, South Africa and Finland are up; Greece, Norway, Italy, Israel, Austria and the Czech Republic are down. Futures in the States point towards a flat open for the cash market.
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VIDEO:Trading Gap Ups
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The dollar is up. Oil and copper are down. Gold is up; silver is down. Bonds are up.
Stories/News from Seeking Alpha…
Tesla is up another 5.3% to $1,677 in premarket trade after posting its fourth consecutive quarter of profit, opening the door for the company’s inclusion in the S&P 500. Adjusted for one-time items, Tesla (NASDAQ:TSLA) earned $2.18 a share, swinging from an adjusted loss of $1.12 a share a year ago, while sales fell 5% to $6.04B. On the earnings call, Elon Musk announced that Tesla will build its next “massive” factory near Austin, Texas, which will produce the Cybertruck, a pickup truck and the Tesla Semi, as well as the Model 3 and Y for the East Coast. He also talked up the development of the autonomous driving program, promising more developments by the end of 2020.
Shaking off a stellar quarter
Despite fiscal Q4 results that were largely positive, shares of Microsoft (NASDAQ:MSFT) fell as much as 3% in AH trading on Wednesday. The software giant easily beat analyst estimates, reporting a net profit of $11.2B and revenue that rose 13% to $38B. Traders may have been looking for more. The company’s cloud computing operation saw sales growth under 50% for the first time, while transactional license purchasing continued to slow and subsidiary LinkedIn was negatively impacted by the weak job market.
Earnings, earnings, earnings
Traders are barely digesting the high-profile results from Tesla (TSLA) and Microsoft (MSFT) before the next round of earnings make headlines. Dow and S&P 500 futures are ahead by 0.4%, while the Nasdaq advanced 0.9%, ahead of figures from Twitter (NYSE:TWTR), AT&T (NYSE:T) and Intel (NASDAQ:INTC), as well as American (NASDAQ:AAL) and Southwest Airlines (NYSE:LUV). Weekly jobless claims are also on the radar. Another 1.3M American workers are expected to have filed for first-time benefits during the week ended July 18, bringing that total to 52.58M since coronavirus lockdowns began in mid-March.
Next coronavirus aid package
Senate Republicans have “reached a fundamental agreement” with White House negotiators Steven Mnuchin and Mark Meadows on how to move forward with the next coronavirus relief bill. What’s in the proposal? Another round of direct stimulus payments, $16B for coronavirus testing, $105B for K-12 education, colleges and universities, though there was no agreement on a payroll tax cut. The plan, set to be unveiled today, will serve as a starting point for negotiations with Democrats, who have passed a $3.4T bill in the House. Lawmakers are also racing to reach a deal on the $600 weekly supplement to unemployment benefits that’s due to expire on July 31.
Looser regulation
With the coronavirus pandemic weighing heavily on Europe’s economy, the EU is now arguing that softer rules on the finance industry are needed to help the recovery. The bloc is planning to loosen a key plank of MiFID II that forces investors to pay banks and brokerages for research separately from their trading fees. The proposal also trims investor protection rules like record keeping and disclosure requirements primarily focused on professional investors. Over in the U.S., the SEC has proposed raising the Form 13F reporting threshold and voted to regulate proxy advisers more closely, while a new U.S. derivatives rule is set to complete Dodd-Frank.
Buffett makes moves
Warren Buffett scooped up 34M shares of Bank of America (NYSE:BAC) over the last few days – at an average price of about $24 – taking his stake in the banking giant to over 11% (from about 7.4%). Big discount? The Oracle spent the $816M after BAC shares plunged nearly 32% since the beginning of the year. Buffett has been criticized in recent weeks over failing to deploy Berkshire Hathaway’s (BRK.A, BRK.B) enormous cash hoard, which climbed to $137B in Q1. BAC +1.6% premarket.
Foray into auto insurance
There was big news from India overnight as Amazon Pay (NASDAQ:AMZN) partnered with private firm Acko General Insurance to offer car and motorcycle insurance. It’s the e-commerce giant’s first market for the service, where it will compete with local rivals including Paytm and Policybazaar. Amazon is moving fast to become a full-fledged financial services platform, with Amazon Pay supporting a range of payments services, including the popular UPI, and debit and credit cards. Meanwhile, India’s Flipkart (FPKT) announced it would acquire parent Walmart’s (NYSE:WMT) local cash-and-carry business, attempting to strengthen its wholesale offering to compete better with Amazon.
Twitter security in question
The hackers who took over prominent accounts on Twitter (TWTR) last week were able to access direct messages. “We believe that for up to 36 of the 130 targeted accounts, the attackers accessed the DM inbox, including 1 elected official in the Netherlands,” the company said in its latest update. While many of the high-profile hacked accounts tweeted a scam asking for bitcoin, an analysis of transactions showed that the scheme only collected $121,000. Direct messages, however, could be used or publicized by hackers at a later point in the future.
What else is happening…
Unilever (UL, UN) soars 7% with sales better than expected.
U.S. may label Switzerland a currency manipulator.
UBS downgrade sends Macy’s (NYSE:M) and Kohl’s (NYSE:KSS) even lower.
Pfizer (NYSE:PFE), BioNTech (NASDAQ:BNTX) ink vaccine deal with U.S. government.
Apple (NASDAQ:AAPL) defends its 30% App Store fee from antitrust scrutiny.
Wednesday’s Key Earnings
Chipotle (NYSE:CMG) -1.3% AH reporting comparable sales decline of 9.8%.
Kinder Morgan (NYSE:KMI) -3.1% AH as demand drop hit pipeline volumes.
Las Vegas Sands (NYSE:LVS) -0.6% AH posting a 51% plunge in Q2 revenue.
Microsoft (MSFT) -2.5% AH on decelerating cloud sales growth.
Spirit Airlines (NYSE:SAVE) +2.3% following mixed results.
Tesla (TSLA) +6.2% AH after fourth straight quarter of profitability.
Today’s Economic Calendar
8:30 Initial Jobless Claims
10:00 Leading Indicators
10:30 EIA Natural Gas Inventory
11:00 Kansas City Fed Mfg Survey
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
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Good morning. Happy Wednesday.
The Asian/Pacific markets leaned down. China and Taiwan did well, while Japan, Hong Kong, Australia, Malaysia, Singapore, Thailand and the Philippines were weak. Europe, Africa and the Middle East are weak. Russia is up, but the UK, France, South Africa, Norway, Singapore, the Netherlands, Italy, Belgium, Austria and the Czech Republic are down. Futures in the States point towards a slight down open for the cash market.
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BLOG:Trade Ideas from the Oil Sector
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The dollar is down. Oil and copper are down. Gold and silver are up. Bonds are up.
Stories/News from Seeking Alpha…
The U.S. State Department has ordered the closure of China’s consulate in Houston to protect property and “private information” of Americans as reports came in last night of documents being burned in the compound’s courtyard. “We urge the U.S. to immediately withdraw its erroneous decision. Otherwise China will make legitimate and necessary reactions,” China’s Foreign Ministry declared, as the U.S. dollar surged against the Chinese yuan, breaking the key 7 level. On Tuesday, the DOJ also accused two Chinese hackers of working for the government to steal terabytes of data, including coronavirus research, from Western companies across 11 nations.
Tensions hit sentiment
S&P 500 futures pulled back 0.4% overnight following the diplomatic flare-up, which adds to concerns over the deteriorating relationship between the economic superpowers. President Trump already dimmed hopes of a Phase 2 trade deal earlier this month, saying the relationship with China had been too badly damaged by COVID-19. Investors are also questioning whether Congress will reach an agreement on the next coronavirus stimulus bill before lawmakers start their summer recess, while Trump warned the pandemic will probably “get worse before it gets better.”
Earnings
Two big names are on the radar today as earnings season kicks into high gear. Following a record number of car deliveries earlier in July, Tesla (NASDAQ:TSLA) may report a fourth straight quarterly profit, which could qualify the high-flying stock for inclusion in the S&P 500. Shares have jumped more than 50% this month alone (adding to the stock’s more than 3x increase this year), as investors bet on a sudden jump in demand from passive funds that track the benchmark. Don’t forget about Microsoft (NASDAQ:MSFT)! Much of the focus will continue to center around its cloud business amid recent trends towards remote work.
Twitter cracks down on ‘QAnon’ activity
“We’ve been clear that we will take strong enforcement action on behavior that has the potential to lead to offline harm,” the company said via its Twitter Safety account. “In line with this approach, this week we are taking further action on so-called ‘QAnon’ activity across the service.” A Twitter (NYSE:TWTR) spokesperson said more than 7,000 QAnon-related accounts were banned in recent weeks, while the platform limited the distribution of 150,000 others. According to Wikipedia, QAnon is a “far-right conspiracy theory detailing a supposed secret plot by an alleged ‘deep state’ against U.S. President Donald Trump and his supporters.” Last year, the FBI designated QAnon as a potential domestic terror threat.
Abandoning hopes
While U.K. and EU negotiators began the latest round of Brexit negotiations on Monday, the two sides remain deadlocked over fishing rights, level playing field guarantees, governance of the deal and the role of the European Court of Justice. With just days to go until Boris Johnson’s deadline for an outline agreement, senior sources told The Telegraph that there is now an assumption that “there won’t be a deal.” What would happen in that case? The U.K. would leave the bloc on December 31 by following default WTO rules and specific agreements for certain goods. The British government has also abandoned hopes of clinching a U.S. free trade deal ahead of the presidential election in November, with the novel coronavirus outbreak blamed for slow progress.
Record retail trading volumes
Earnings yesterday from some of the biggest publicly traded brokers have highlighted the major jump into retail trading. TD Ameritrade (NASDAQ:AMTD), which is set to be acquired by Charles Schwab (NYSE:SCHW), added a record 661K new funded retail accounts in Q2, surpassing the 608K new accounts during the first quarter. A record 3.4M daily average revenue trades were also noted, more than four times last year’s levels and 62% more than the prior quarter. Interactive Brokers (NASDAQ:IBKR), which additionally beat on the top and bottom lines, said its daily average revenue trades increased 111% since the same quarter last year, while customer accounts grew to 867K.
737 MAX may not return until next year
The latest timeline anticipates the FAA won’t finish work to lift its March 2019 grounding order until late October or early November because the agency has decided to ask for public comments before finalizing software and hardware changes, WSJ reports. Completing pilot training and maintenance checks is expected to stretch well into December, and only then will the MAX be ready to return to commercial service. That means the jets are expected to be grounded at least as long under current Boeing (NYSE:BA) CEO David Calhoun as under his predecessor, Dennis Muilenburg, who was ousted at the end of 2019 after repeated delays in getting the plane back in the air. BA -1.3% premarket.
Self-driving partnerships
Ending work on autonomous commercial vehicles it began with startup Aurora in 2019, Fiat Chrysler (NYSE:FCAU) has selected Waymo as its exclusive, strategic technology partner for “Level 4” fully self-driving technology across its full product portfolio. The collaboration will start with the Ram ProMaster full-size van, though it’s likely to expand given Fiat’s expected merger with PSA Group into a company called Stellantis. It’s been quite a run for the Alphabet (GOOG, GOOGL) unit. Waymo, considered the leader in autonomous vehicle development, inked another partnership in June with Volvo Cars (OTCPK:GELYY) to develop self-driving electric vehicles designed for ride-hailing.
What else is happening…
Senate committee clears Shelton, Waller for Fed positions.
Apple (NASDAQ:AAPL) pledges to be 100% carbon neutral by 2030.
Best Buy (NYSE:BBY) sales are rebounding as stores reopen.
Tesla’s (TSLA) Elon Musk qualifies for another $2.1B payday.
Jamf (JAMF) prices upsized IPO above range at $26.
Tuesday’s Key Earnings
Coca-Cola (NYSE:KO) +2.3% saying the worst is over.
Lockheed Martin (NYSE:LMT) +2.6% topping estimates, raising guidance.
Philip Morris (NYSE:PM) +4.2% posting better-than-feared results.
Snap (NYSE:SNAP) -6.2% AH on lagging Q2 growth.
Texas Instruments (NASDAQ:TXN) +1.3% AH following Q2 beats, upside outlook.
United Airlines (NASDAQ:UAL) +1.2% AH expecting to lower cash burn.
Today’s Economic Calendar
7:00 MBA Mortgage Applications
9:00 FHFA House Price Index
10:00 Existing Home Sales
10:30 EIA Petroleum Inventories
1:00 PM Results of $17B, 20-Year Bond Auction
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Good morning. Happy Tuesday.
The Asian/Pacific markets did great. Hong Kong, South Korea, India, New Zealand, Taiwan, Australia, Indonesia and Thailand each rallied more than 1%. Europe, Africa and the Middle East are currently posting solid gains. Poland, France, Turkey, Germany, the UAE, Russia, South Africa, Norway, Hungary, Spain, the Netherlands, Italy, Israel and Austria are each up more than 1%. 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 down. Oil and copper are up. Gold and silver are up. Bonds are up.
Stories/News from Seeking Alpha…
eBay is selling its classified ad business to Norway’s Adevinta (OTCPK:ADEVF) for $9.2B in cash and stock, making the latter the largest online classifieds company globally. The unit is one of eBay’s last remaining businesses outside the company’s core after selling its StubHub ticketing division last year. As part of the transaction, eBay (NASDAQ:EBAY) will receive $2.5B in cash and approximately 540M Adevinta shares – representing 44% ownership of the pro forma company and a ~33.3% voting stake. The deal is expected to close by Q1 of 2021 and is forecast to create estimated annual synergies of $150M-185M within the next three years. EBAY +2.4% premarket.
Rally continues
Big tech led the charge for Wall Street on Monday as the Nasdaq 100 had its best gain in three months, boosted by the FAANG and Tesla (NASDAQ:TSLA). Pfizer (NYSE:PFE) and BioNTech (NASDAQ:BNTX) also reported early positive data on a joint coronavirus vaccine, while another candidate from Oxford University and AstraZeneca (NYSE:AZN) showed a positive immune response in an early trial. Everyone is partying… Industrial stocks are rallying along with stay-at-home players this morning as U.S. stock index futures climb 0.7% before quarterly results from Coca-Cola (NYSE:KO), Philip Morris (NYSE:PM), Lockheed Martin (NYSE:LMT) and United Airlines (NASDAQ:UAL).
Coronavirus stimulus package
“We did it! We have reached a deal on the [coronavirus] recovery package and the European budget for 2021-2027,” tweeted European Council President Charles Michel after nearly five days of talks in Nice, France. “This agreement sends a concrete signal that Europe is a force for action,” he added, prompting the euro to hit a fresh four-month high of $1.1470. Within the €750B coronavirus recovery fund, €390B will be offered as non-repayable grants (down from €500B originally proposed), and the rest in repayable loans. Leaders also agreed to an EU budget of over €1T that will run from next year to 2027.
China tensions
The U.K. will “bear the consequences if it insists on going down the wrong road,” a Chinese embassy spokesman declared, after Britain announced it would suspend extraditions and arms sales to Hong Kong due to China’s national security law. The news comes as U.S. Secretary of State Mike Pompeo visits the U.K., where he’ll meet with MPs who want to see sanctions on Chinese officials and the Asian superpower cut from Britain’s nuclear power program. Prime Minster Boris Johnson has already ordered the removal of Huawei equipment from British 5G networks by the end of 2027, while Chinese-owned Tiktok (BDNCE) reportedly ditched plans for a global headquarters in the U.K.
Fed nominees
Judy Shelton, President Trump’s controversial pick to join the Fed’s Board of Governors, is poised to clear a key confirmation hurdle today after Louisiana Senator John Kennedy said he’d vote in her favor. The Senate Banking Committee will also decide on the nomination of Christopher Waller, director of research at the St. Louis Fed, which is expected to easily pass muster. Shelton has a long history of unorthodox economic commentary, like questioning the basic role of the Fed, calling for near-zero interest rates and advocating a return to the gold standard. If Shelton and Waller are cleared, the nominations advance to a full Senate vote.
Masking up
Mask makers like Alpha Pro Tech (NYSEMKT:APT), Allied Healthcare (NASDAQ:AHPI) and Lakeland Industries (NASDAQ:LAKE) soared into the close on Monday after President Trump offered his strongest endorsement yet for wearing face coverings in public. “We are United in our effort to defeat the Invisible China Virus, and many people say that it is Patriotic to wear a face mask when you can’t socially distance,” he wrote in a tweet that included a photo of himself wearing a mask with a presidential seal. More than half of U.S. states currently have mask mandates to curb the spread of the coronavirus.
Prime delay
Amazon (NASDAQ:AMZN) Prime Day 2020 will be postponed by three months, according to an email to third-party sellers that suggests this year’s big deals will launch in October. “This year we’ll be holding Prime Day later than usual, while ensuring the safety of our employees and supporting our customers and selling partners,” the company announced, adding that it would share “more details soon.” While Prime Day in the U.S. is being put on hold, Amazon said Prime Day will take place in India next month on August 6 and 7.
Media misconduct
Walt Disney (NYSE:DIS) has fired ABC News’ Barbara Fedida, who was one of the most powerful executives in television news, after an investigation confirmed allegations that she made insensitive remarks and racial slurs about colleagues. Reports previously suggested that Fedida used terms like “pick cotton” and “low rent,” and asked which employee would most likely be an “active shooter” (she was placed on administrative leave on June 13). In other media news, former Fox News (NASDAQ:FOX) reporter Jennifer Eckhart has leveled rape allegations against former Fox host Ed Henry, while journalist Cathy Areu alleged that she was sexually harassed by Henry, as well as current on-air talent like Sean Hannity, Tucker Carlson, Howard Kurtz and Gianno Caldwell.
What else is happening…
Chevron (NYSE:CVX) to buy Noble Energy (NASDAQ:NBL) in $5B all-stock deal.
Novartis ((NYSE:NVS) tightens outlook as Q2 sales, profit fall.
UBS (NYSE:UBS) settles SEC charges on muni bond flipping for $10M.
Marriott (NASDAQ:MAR) institutes mask policy for hotel guests.
Tesla (TSLA) guns for record Q3 as shares gain another 10%.
Monday’s Key Earnings
Halliburton (NYSE:HAL) +2.5% as cost cuts, cash flow impressed analysts.
IBM (NYSE:IBM) +4.3% AH on Q2 upside despite pandemic pressure.
Today’s Economic Calendar
8:30 Chicago Fed National Activity Index
8:55 Redbook Chain Store Sales
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Good morning. Happy Monday. Hope you had a good weekend.
The Asian/Pacific markets leaned to the upside. China, Hong Kong, India and the Philippines gained more than 1%. Europe, Africa and the Middle East also lean up, but are little changed. Denmark, Poland, Greece and Finland are leading. Futures in the States suggest a nearly flat open for the cash market.
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VIDEO: State of the Market
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The dollar is down. Oil and copper are down. Gold and silver are up. Bonds are up.
Stories/News from Seeking Alpha…
Coronavirus vaccine players are on watch this morning ahead of Phase 1 trial results of AstraZeneca’s (NYSE:AZN) COVID-19 vaccine developed with the University of Oxford, which are set to be published in The Lancet. Reports last week suggested the journal will release positive news – the vaccine is believed to be in one of the most advanced stages of clinical trials (involving 9,000 patients in South Africa and Brazil). Overnight, the U.K. also secured early access to 90M doses of vaccines in development by drugmakers including Pfizer (NYSE:PFE), BioNTech (NASDAQ:BNTX) and Valneva (OTC:INRLF), while GlaxoSmithKline (NYSE:GSK) inked a deal with CureVac to develop mRNA-based vaccines and antibodies. In just six months since the coronavirus outbreak, 140 vaccine candidates are in the pre-clinical trial stage and 23 have entered the clinical evaluation stage, according to the World Health Organization.
Big week ahead
U.S. stock futures have pared almost all overnight losses to trade back at the starting line after shares in Shanghai closed up 3% (see story below). Earnings season is set to kick into high gear this week with Q2 results from Microsoft (NASDAQ:MSFT), Tesla (NASDAQ:TSLA), Intel (NASDAQ:INTC) and American Airlines (NASDAQ:AAL), while coronavirus cases continue to rise at an alarming rate. Hot-spots are flaring in the country’s South and West, though New York City will enter its final Phase Four reopening. Zoos and botanical gardens can unlock their doors, sports can restart (without fans), but gyms, museums and indoor dining will remain closed.
China scraps insurer caps
It was only four days ago that Chinese stocks plunged more than 4% after surprisingly upbeat GDP data, though shares are now looking to make a return. The Shanghai Composite closed up 3.1% overnight after China’s regulators raised the limit on how much insurers can invest in equity assets to 45%, bringing fresh money into the stock market. The PBOC also kept prime rates on both its one-year and five-year loans unchanged for the third straight month as the economy continues to recover from the coronavirus crisis.
Facebook’s No.1 advertiser slashes its spend
Walt Disney (NYSE:DIS) has dramatically cut back on its Facebook (NASDAQ:FB) advertising spending, WSJ reports, marking the latest difficulty for the tech giant as it faces a boycott from companies upset with its handling of hate speech and divisive content. According to research firm Pathmatics, Disney was Facebook’s top U.S. advertiser for the first six months of 2020, spending $210M on Facebook ads for Disney+ in the U.S. The House of Mouse also halted advertising Hulu on Instagram, owned by Facebook (Hulu spent $16M on Instagram from April 15 to June 30).
Largest auction process this year
Adevinta (OTCPK:ADEVF) shares are halted in Oslo on reports that eBay (NASDAQ:EBAY) is close to selling its classified-ads unit for more than $8B, while retaining a stake in the business. It’s a surprise boost to a bid from the Norwegian online marketplace, which offered a mix of cash and stock, and lessened the chances Prosus (OTCPK:PROSY) would win the hotly-contested auction after its higher all-cash offer was made on the entire unit. A private equity consortium backed by Blackstone (NYSE:BX), Permira and Hellman & Friedman has separately been pursuing the division and also offered to let eBay keep a minority stake. EBAY +1.8% premarket.
Next round of coronavirus aid
Congress begins debating a fifth COVID-19 aid package today as several states in the country’s South and West implement fresh lockdown measures to curb the virus. Democrats want to continue enhanced unemployment payments through January, while Republicans have criticized providing that much aid, which runs at $15B per week, arguing that it discourages people from returning to work by paying them more to stay home. President Trump has also suggested that he wouldn’t sign a bill without a payroll tax cut, but has backed a new round of stimulus payments for Americans.
Breakthrough in EU talks
Negotiations over the EU’s €750B coronavirus stimulus plan appear to be making some headway after three days of deadlock. The leaders of the “Frugal Four” – Austria, Denmark, the Netherlands and Sweden – say they are now ready to accept €390B in grants, with talks still ongoing on other elements of the package. Failure to come together would raise serious questions about the continued viability of the bloc, officials and experts say, with the summit being framed as a “make-or-break” moment for nearly 70 years of European integration. There’s also more regional action today as the latest round of talks kick off to define Britain’s post-Brexit relationship with the EU.
‘No alternative’
Additional spending will worsen the balance sheets of governments, but it is necessary to “prevent things from getting even worse,” said Shaun Roache, chief economist for Asia Pacific at S&P Global Ratings. “We’re seeing some fiscal policymakers think about pulling back some of their measures or maybe letting them expire without renewing them, and that’s quite a dangerous thing to do when demand in the rest of the economy still remains quite suppressed. We hope to see some of those fiscal measures being renewed, pushed forward into the next year. That is going to mean more fiscal easing but at the moment there is no alternative.”
What else is happening…
JPMorgan uncovers why ‘day’ traders in S&P 500 were left behind.
TikTok (BDNCE) shelves plan for HQ in Britain – Sunday Times.
Banks are probing pro-democracy ties of Hong Kong clients.
Boeing (NYSE:BA) running out of space to store newly built Dreamliners.
U.K. asks Japan for 5G alternatives to Huawei – Nikkei
Today’s Economic Calendar
No events scheduled
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2 thoughts on “Before the Open (Jul 20-24)”
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Not a time to go long. I would bet the market goes higher from here but not much. I seldom go short. I went short for the first time since Feb and took a profit. Next gap up is a week or so long short trade. PC ratios are looking bad. AD is still ok.
Thanks Daddy Paul. Always appreciate your input.