Good morning. Happy Friday. Happy Options Expiration Day.
The Asian/Pacific markets did well today. China, Hong Kong, South Korea, New Zealand and Taiwan led with solid gains. Europe, Africa and the Middle East are currently mostly down. The UK, France, Germany, Turkey, Greece, Spain, the Netherlands, Italy and Israel are suffering the biggest losses. Futures in the States point towards a down open for the cash market.
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VIDEO:Day Trading with MACD and Stochastic
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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…
Global markets churn higher on vaccine hopes
Global stocks are trekking higher after the tech rally in the U.S. continues to show legs and renewed hopes for a coronavirus vaccine. The Shanghai Composite Index rose 0.5% and Hong Kong’s Hang Seng Index was up 1.3%. Japan’s Nikkei tacked on 0.2% and Australia’s ASX 200 slipped 0.1%. European stocks are largely higher despite sluggish PMI data, with the Stoxx 600 Index gaining 0.3%. France’s CAC 40 and Germany’s DAX are both in positive territory at mid-day. Meanwhile, U.S. stock futures are pointing slightly higher, two days removed from the S&P 500 Index carving out a new record high. Oil prices are down slightly amid efforts by major oil producers to hold back output. In early action, WTI crude oil futures -0.75% to $42.50/bbl and Brent crude -0.5% to $44.66/bbl. And one more thing to chew on to start the new day. Tesla (NASDAQ:TSLA), after cruising right past the $2,000 per share level, now trades with a higher market cap than Procter & Gamble (NYSE:PG), Home Depot (NYSE:HD), JPMorgan (NYSE:JPM) and Disney (NYSE:DIS).
Existing home sales expected to show some pop
The existing home sales report is due out today, with a consensus forecast for 5.38M home sales in July vs. 4.72M in June. Bank of America expects a mark of 5.40M. The firm also thinks bigger things are in play. “The pandemic has led to a shift from urban areas towards more suburban or rural neighborhoods where homeownership is more affordable. This is one of several factors underpinning the homeownership market,” previews BofA. “While we are confident that existing home sales will see strong upside in the next report we are less confident that it will similarly surpass the prior cycle high, at least not yet.” Last month, homebuilders that were volatile after the existing home sales report included D.R. Horton (NYSE:DHI), KB Home (NYSE:KBH), Toll Brothers (NYSE:TOL), NVR (NYSE:NVR) and William Lyon Homes (NYSE:WLH).
Johnson & Johnson cheaply borrows $7.5B for Momenta deal
Johnson & Johnson (NYSE:JNJ) – one of the two best credit risks in the U.S. corporate world – borrowed $7.5B at historically cheap yields to fund a planned $6.5B acquisition of Momenta Pharmaceuticals (NASDAQ:MNTA). The offering priced in six parts, ranging from five-year notes with a coupon of 0.55% to a tranche of 40-year notes with a coupon of 2.45%. The AAA rated J&J got a rating for the new debt of AAA from Moody’s, though with a negative outlook as the ratings agency expects slower growth from J&J’s non-pharmaceutical businesses.
Facebook supports data portability
Facebook (NASDAQ:FB) is pushing for legislation to make it easier for users to transfer photos and videos to rival tech platforms in a move that could ease some antitrust concerns. A portability bill called the Access Act is already circulating around Congress with bipartisan support. A hearing on the issue in front of the Federal Trade Commission is set for September 22.
Inflation in Japan stays at zero
Japan’s core inflation rate landed at 0.0% in July to miss the +0.1% mark anticipated by economists and register flat prices in the nation for the second month in a row. The lack of price momentum is likely to keep the Bank of Japan continuing on its road of massive monetary stimulus and ultra-low interest rates to support government fiscal spending. The so-called core-core inflation index, which strips out food and energy prices, rose 0.4% during the month to fall short of the forecast for a rise of 0.5%. Bank of Japan Governor Haruhiko Kuroda is on record as saying that he views the risk of Japan falling back into deflation as low.
CBS charging $5.5M for 30-second Super Bowl ad spot
CBS (VIAC, VIACA) is seeking $5.5M for each 30-second TV ad spot for the 2021 Super Bowl – roughly in line with what Fox (FOX, FOXA) was drawing for ads in last February’s game. That could be read as a reflection of pandemic uncertainty, or a testament to the staying power of America’s biggest television event. In another reflection of the times, CBS will require advertisers on the TV broadcast to also appear in the online stream (for an extra $200K), while advertisers are seeking protection clauses in case the NFL season is a virus victim or the championship game otherwise isn’t played.
Judge narrows SEC lawsuit against Volkswagen over diesel emissions
A U.S. District Judge dismissed portions of an SEC lawsuit accusing Volkswagen (OTCPK:VWAGY) of defrauding U.S. investors in connection with the automaker’s diesel emissions scandal. The judge granted VW’s motion to dismiss claims it misled investors when issuing more than $13B of bonds and asset-based securities in 2014-15, but rejected as premature the company’s request to block the SEC from obtaining injunctive relief and to disgorge profits.
Eurozone PMI falls short of expectations
Preliminary Eurozone PMI for August dropped to 51.6 after a 54.9 mark was recorded in July. “Companies remain cautious when making decisions on employment, again opting to lower staffing levels in August amid a lack of confidence in the strength of the recovery,” noted IHS Markit’s Andrew Harker. Flash services PMI stalled at 50.1 vs. 54.5 estimated and 54.7 in July. Flash manufacturing PMI was 51.7, to miss the 52.7 mark anticipated by economists and fall short of the 51.8 recorded in July. PMI readings in Germany and the U.K. came in ahead of expectations, while PMI lagged in Spain.
Retail sales bounce back in U.K.
Retail sales in the U.K. rose 3.6% in July from June to top the expectation of economists for a gain of 1.4%. Overall sales volume was above the level seen before the pandemic, according to data from the Office for National Statistics. Sales in clothing shops grew by 11.9% during the month, which could be good news for Burberry (OTCPK:BURBY), Marks and Spencer (OTCQX:MAKSF) and ASOS (OTCPK:ASOMF). Still, the road ahead for the U.K. economy looks potentially rough with the end of the furlough scheme coming in October.
What else is happening…
Early-stage mortgage delinquencies fall below pre-pandemic levels in July.
Lyft (NASDAQ:LYFT), Uber (NYSE:UBER) jump after winning reprieve in California.
Dover (NYSE:DOV) acquires Solaris Laser.
Activist investor backs the direction of Harley-Davidson (NYSE:HOG) under new CEO.
Alibaba (NYSE:BABA) affiliate Ant Financial plans to raise $30B in dual listing.
Thursday’s Key Earnings
Ross Stores (NASDAQ:ROST) flat PM after cautious tone on Q3.
Keysight Technologies (NYSE:KEYS) +4.4% AH as production rebound cushions quarterly results.
Today’s Economic Calendar
9:45 PMI Composite Flash
10:00 Existing Home Sales
1:00 PM Baker-Hughes Rig Count
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Good morning. Happy Thursday.
The Asian/Pacific markets were very weak. Japan, China, Hong Kong, South Korea, India, New Zealand, Taiwan, Australia, Singapore and Thailand each suffered sizable losses. Europe, Africa and the Middle East are currently mostly down. The UK, France, Germany, Russia, Greece, South Africa, Singapore, the Netherlands, Italy, Portugal, Israel and Sweden are all down 1% or more. Futures in the States point towards a down open for the cash market.
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VIDEO:Getting the Big Picture from the Weekly Charts
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The dollar is up slightly. Oil and copper are down. Gold and silver are down. Bonds are up.
Stories/News from Seeking Alpha…
China says U.S. trade talks will happen soon
China and the United States will meet “in the coming days” to discuss the progress of the Phase 1 trade deal reached in February. Earlier this week, the White House signaled that no high-level trade talks were on the schedule. Phase 1 requires China to import $77B more than 2017 levels of certain U.S. goods within the first year, and official data suggests China is running far behind schedule on the target.
Fed cutting one-week dollar swaps with central banks – ECB
Starting September 1, the Federal Reserve will cut seven-day swap operations with major central banks from three tenders per week to one due to the improved funding environment. The Fed will maintain the one per week pace for the 84-day tender schedules for a few banks, including the European Central Bank, the Bank of England, and the Bank of Japan.
Household spending surprised Fed officials by its strength: FOMC minutes
While the Fed’s policy-setting committee was surprised by how strong household spending grew since its June meeting, it was quick to caution that uncertainty over the economic outlook is “highly elevated”, according to FOMC minutes for the July 28-29 meeting. Risks to the outlook include new waves of the coronavirus and the possibility that government fiscal support wasn’t enough. Some Fed officials worried that banks and financial institutions might come under “significant stress” if they face a more adverse scenario due to increased COVID-19 infections. Several participants suggested that additional accommodations might be required to promote economic recovery and return inflation to the FOMC’s 2% objective.
Nio now offers EV battery leasing
Chinese electric vehicle company Nio (NYSE:NIO) launched a “battery as a service” leasing program, making one of the most expensive parts of EVs more accessible to drivers. Removing the battery purchase requirement drops the price of Nio’s entry-level ES6 SUV from 343,600 yuan to 273,600 yuan.
FDA puts emergency approval of blood plasma on hold
Needing more time to review data, the FDA has paused the planned emergency authorization for blood plasma as a COVID-19 treatment. Government health leaders including Dr. Francis Collins and Dr. Anthony Fauci had urged caution, citing weak data from the country’s largest plasma study.
Intel announces $10B accelerated share buyback, reversing suspension
Intel (NASDAQ:INTC) revived its buybacks with a $10B accelerated share repurchase agreement. The ASR is part of the $20B share repurchase program announced last October that was suspended in March due to the coronavirus pandemic. After the sale closes, Intel will have repurchased $17.6B of shares under the program.
Epic-Apple judge ruled for Apple in similar 2013 case
The new judge assigned to Fortnite maker Epic Games’ showdown with Apple (NASDAQ:AAPL) over the App Store’s payment policy gave the iPhone maker a big victory in a 2013 case covering similar issues. Judge Yvonne Gonzalez Rogers dismissed a suit seven years ago that claimed Apple’s apps monopoly had led to hundreds of millions of dollars in consumer overcharges. That older case zeroed in on Apple’s 30% cut from the App Store as well – but plaintiffs’ reasoning was rejected by Rogers, who called the fees a passthrough and not subject to consumer challenges over antitrust. Epic is 40% owned by Tencent (OTCPK:TCEHY).
Facebook wins court approval to settle biometric privacy lawsuit
Facebook (NASDAQ:FB) has received preliminary court approval to settle a suit that charged the company with illegally collecting and storing user biometric data. Illinois users relied on the state’s Biometric Information Privacy Act to say that Facebook’s “Tag Suggestions” photo-recognition feature was illegal. Facebook had raised its settlement offer by $100M, to $650M, which looks to have resolved court concerns.
What else is happening…
JPMorgan (NYSE:JPM) in talks for banking services at post offices.
Icahn boosts stake in Xerox (NYSE:XRX) to 12.82%.
GE (NYSE:GE) signs deals to add 1.5 GW to Iraq’s power grid.
Wednesday’s Key Earnings
NVIDIA (NASDAQ:NVDA) -1.55% PM after reporting upside Q2 on gaming strength, record data center sales.
L Brands (NYSE:LB) +2.6% PM after blasting past Q2 estimates.
Synopsys (NASDAQ:SNPS) +3.9% PM on FQ3 beats, upside full-year earnings forecast.
Today’s Economic Calendar
8:30 Initial Jobless Claims
8:30 Philly Fed Business Outlook
10:00 Leading Indicators
10:30 EIA Natural Gas Inventory
1:00 PM Fed’s Daly: “The New Future of Work”
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
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Good morning. Happy Wednesday.
The Asian/Pacific markets were mostly weak. Australia did well, but China, Hong Kong, New Zealand, Taiwan, Thailand and the Philippines posted moderate losses. Europe, Africa and the Middle East lean down. South Africa and Sweden are up, but Denmark, Turkey, the UAE, Switzerland and Israel are down. Futures in the States point towards a flat open for the cash market.
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VIDEO:Getting the Big Picture from the Weekly Charts
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The dollar is up. Oil is up; copper is down. Gold and silver are down. Bonds are up.
Stories/News from Seeking Alpha…
S&P 500 to take aim at new record
The S&P 500 is looking to hit a new record with stimulus in focus and the Fed keeping rates low, which support higher valuations. The index had a modest gain yesterday that pushed it to a new record. Futures are up 0.17% today aiming to hit a new record. Possible support of the move is the stimulus deal with top Congressional Democrats yesterday signaling a willingness for further compromise, and the White House this morning optimistic about the chance to quickly pass a slimmed-down deal. On the negative side, trade tensions are rising with China. The Shanghai Composite fell 1.25% in Wednesday action.
Oracle’s TikTok bid has President Trump’s support
Asked about reports that Oracle (NYSE:ORCL) will make a bid for ByteDance’s (BDNCE) TikTok, President Trump said, “Well I think Oracle is a great company and I think its owner is a tremendous guy, a tremendous person. I think that Oracle would be certainly somebody that could handle it.” Earlier this month, Microsoft (NASDAQ:MSFT) said it was holding acquisition talks with ByteDance and the White House. Last week, Trump gave ByteDance 90 days to sell off TikTok’s U.S. operations.
FDA to begin review of Juul products
Juul Labs (JUUL) says the FDA will begin reviewing its applications for its e-cigarette device and certain nicotine cartridges in a step forward for the company. Juul filed the applications with the FDA late last month asking for permission to keep selling the products. Another wildcard was added to the mix earlier this week when Stanford researchers said they found teens and young adults who use electronic cigarettes were at a much higher risk of contracting COVID-19. The substantive review process by the FDA could reshape the U.S. market. Waiting in the wings is Altria (NYSE:MO), which acquired a 35% stake in Juul in 2018.
ViacomCBS in talks to sell CNET for ~$500M
The re-merged Viacom-CBS is holding talks to sell its CNET unit to Red Ventures, a digital media holding company. ViacomCBS (NASDAQ:VIAC) aims to divest non-core assets and use the extra cash to focus on video streaming. They’re discussing a price of ~$500M, the Wall Street Journal reports, citing people familiar with the matter. The two companies haven’t yet reached a final deal and talks could still fall apart, the people said.
Takeda Pharmaceutical in talks to sell Japan consumer health unit to Blackstone
In a bid to refocus its business and reduce debt following its $59B Shire acquisition, Japan’s Takeda Pharmaceutical (NYSE:TAK) is planning to sell its consumer healthcare unit (generating 3% of total sales) to US fund Blackstone (NYSE:BX) for $2.85B (¥300B), reports Reuters. The talks are in the final stage and the companies plan to close the deal by the end of this month. Neither company commented on the report.
Italy to submit recovery plan to EU in two months
Italy – an early hotspot for COVID-19 globally – will be submitting a recovery plan to the European Union by mid-October, Prime Minister Guiseppe Conte says, in accordance with the EU’s stimulus plans. The government is currently identifying investment and reform projects that line up with EU support, he says. He’s characterized the likely €209B stimulus as a chance to transform Italy’s economy.
Japanese exports fall for the fifth straight month
Pain continued for the world’s third-largest economy as Japanese exports nosedived 19.2% Y/Y in July. This was slightly better than the forecast of a 21% drop and improvement from June’s fall of 26.2%. Imports dropped 22.3% Y/Y in July resulting in a trade balance surplus of ¥11.6B. Nikkei closed up 0.26%.
Regeneron teams with Roche to triple supply of its COVID-19 drug
Regeneron (NASDAQ:REGN) is enlisting rival Roche (OTCQX:RHHBY) to boost the supply of its COVID-19 drug, REGN-COV2, via a new production/distribution deal. The arrangement could boost overall capacity of the drug by 3.5 times if approved by regulators. REGN-COV2 is currently in late-stage clinical trials, and initial results are expected by the end of September, which could precede an emergency use authorization by year-end. Regeneron will handle U.S. distribution, with Roche handling elsewhere.
World’s largest shipping company expects container demand to decline significantly this year
Mærsk (OTCPK:AMKAF) reported Q2 revenue decline of 6.5% to $9B owing to ocean volume declining by 16% to 2,903k FFE. The average loaded freight rate increased by 4.5% to 1,915 USD/FFE. While the company reinstated their FY20 EBITDA guidance of $6-7B, they expect a “significant decline” in container demand for the rest of the year.
What else is happening…
ON Semiconductor (NASDAQ:ON) raises $700M via upsized private offering.
U.S., China to expand airline flights between them to eight per week.
Verona Pharma (NASDAQ:VRNA) launches second part of ensifentrine study in lung disease.
Gilead (NASDAQ:GILD) comes up empty with U.S. application for filgotinib for rheumatoid arthritis.
JPMorgan (NYSE:JPM) says opioid settlement news is bullish for distributors.
Sorrento Therapeutics (NASDAQ:SRNE) ousts CFO Jiong Shao.
Conduent (NASDAQ:CNDT) names Icahn’s Gary to board for settlement.
Tuesday’s Key Earnings
Alcon (NYSE:ALC) -6% PM on missing Q2 earnings.
Agilent Technologies (NYSE:A) -2.1% AH on FQ3 earnings.
Today’s Economic Calendar
7:00 MBA Mortgage Applications
10:00 Quarterly Services Report (Advance)
10:30 EIA Petroleum Inventories
1:00 PM Results of $25B, 20-Year Bond Auction
2:00 PM FOMC minutes
3:00 PM Fed’s Barkin: Economic Outlook
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Good morning. Happy Tuesday.
The Asian/Pacific markets leaned up. Hong Kong, India, New Zealand, Australia, Malaysia, Indonesia, Thailand and the Philippines did well; South Korea and Taiwan were weak. Europe, Africa and the Middle East are quiet but currently lean up. Turkey, Greece, Italy, Germany, the UAE and Russia are up; Denmark is down. Futures in the States point to a slight up open for the cash market.
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VIDEO:Getting the Big Picture from the Weekly Charts
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The dollar is down. Oil is down; copper up. Gold and silver are up. Bonds are up.
Stories/News from Seeking Alpha…
U.S. futures yawn with Republicans’ scaled-back stimulus
U.S. equities futures hug the flatline as Republicans plan to introduce a scaled-back virus relief package that would include a $300/week in supplemental unemployment benefit, additional U.S. Postal Service funding, and aid for small businesses, Bloomberg reports. The legislation would also include protection for employers against lawsuits over COVID-19 infections. S&P and Dow futures are roughly flat while Nasdaq futures +0.28%. 10-year Treasury yield slips almost 2 basis points to 0.68%. Gold gains 0.09% to $2,002.80 per ounce; crude oil up 0.42% to $43.07 per barrel. In Hong Kong the Hang Seng Index closes up 0.08% and Japan’s Nikkei 225 Index fell 0.2% after U.S.-China tensions heat up after the Trump administration imposes new restrictions on Huawei focused on cutting access to commercially available chips. In Europe, jewelry maker Pandora (OTCPK:PANDY) (-7%) led losses in the Stoxx Europe 600 Index (+0.24%) after warning that sales may slump as much as 20% this year. Germany’s DAX up 0.37% and the U.K. FTSE 100 up 0.10%.
Oracle in talks to acquire TikTok business, challenging Microsoft
Oracle (NYSE:ORCL) has jumped into the fray to potentially acquire the North American and Australia/New Zealand business of TikTok (BDNCE) – squaring off against rival Microsoft (NASDAQ:MSFT), which is thought to be in pole position for the acquisition. Oracle is reportedly working with some of TikTok’s existing VC investors, including General Atlantic and Sequoia Capital, and CNBC says the talks are recent and ongoing.
Boeing deepens job cuts
For a second time this year, Boeing (NYSE:BA) is preparing to offer further voluntary buyouts to its employees, extending its workforce cuts beyond the original 10% target unveiled in April, Bloomberg reports, citing an internal message from CEO Dave Calhoun. The “voluntary layoffs” will be offered to workers in the planemaker’s commercial airplanes unit, services division, and corporate operation, Calhoun said in the message. Boeing began laying off 6,700 employees in late May, part of the 10% staff cuts outlined in April.
Robinhood valuation jumps to $11.2B after $200M funding round
Robinhood’s latest funding round comes from D1 Capital Holdings, boosting its valuation from $8.6B and marking its third major investment in five months. The news comes about a week after the stock-trading app company announced plans to hire hundreds of additional registered financial representatives to serve its growing number of customers. In June the company’s daily average revenue trades exceeded those of publicly traded brokerage firms. Last month, Robinhood got $320M of investment added to an earlier series of funding that was announced in April. And in May, it announced a $280M round of investment. It will use the latest funding to improve its core product and customer experience.
Merck picks site for £1B London research, business site
The U.S.-based pharmaceuticals company Merck (NYSE:MRK) plans to construct the complex, including research labs, on a site opposite King’s Cross rail station. Called MSD in Europe to avoid confusion with Merck of Germany, the company plans to employ 800 people at the 25,000-square-meter facility. Assuming it gets local council planning permission for the project to be called London Discovery Research Center, construction will start late next year with move-in expected during 2025. While the company expects to create ~120 new jobs for scientists and technicians, most staff will come from MSD’s smaller existing labs in London and its business hub in Hoddesdon, Hertfordshire. Research at the U.K. site will focus on diseases of aging, with a particular focus on neuroscience.
Western U.S. power prices hit records as California warns of more outages
Electric prices in the western U.S. soared to record highs as California consumers prepared for more rolling outages after the state grid operator ordered utilities to cut power over the weekend to reduce strain on the system during a record-breaking heat wave. Power prices at the Palo Verde hub in Arizona rose to $350.50/MWH the highest in the 10 years that Refinitiv has been compiling data, Reuters reported. In California, prices at SP-15 in the southern part of the state rose to $270.75/MWh, the highest since August 2018.
Dispute arises at DOJ over speed of Google antitrust case
A bit of a split has appeared at the Justice Dept. in a potential antitrust lawsuit against Google (GOOG, GOOGL), The Wall Street Journal reports – with some staff attorneys concerned that the case isn’t ready, while others are pressing to move forward with a suit as soon as summer’s end. Attorney General William Barr is reportedly pressing a more aggressive timeline, while staffers in the parts of the case examining Google’s search practices and its online ad business express concerns that the evidence as it stands may not yet be enough to win in court.
What else is happening…
Canada finance minister quits amid charity scandal.
Apple (NASDAQ:AAPL) TV Plus offers first bundle, with CBS/Showtime (VIAC, VIACA).
FOX News (FOX, FOXA) Digital posts highest July multi-platform view.
Kirkland Lake (NYSE:KL), Newmont (NYSE:NEM) reach deal for exploration opportunities.
Forbearance programs hold credit card delinquencies at bay in July.
Today’s Economic Calendar
8:30 Housing Starts
8:55 Redbook Chain Store Sales
10:00 E-Commerce Retail Sales
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Good morning. Happy Monday. Hope you had a good weekend.
The Asian/Pacific markets were mixed. China, Hong Kong, New Zealand and Taiwan did well; Japan, South Korea and Australia were weak. Europe, Africa and the Middle East are currently mixed. The UK, Denmark, Finland, Switzerland and Sweden are up; Hungary, Spain and Austria are down. Futures in the States point towards a positive open for the cash market.
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VIDEO:Trade Examples – RRR, SIG, PLAY, ZI, BJRI
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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…
Trump eyeing more Chinese firms for possible action
President Trump has signaled that he is considering punitive action against more Chinese firms as the acrimony between Washington and Beijing continues unabated. Many China experts believe he will ratchet up the pressure leading into the election. Recent executive orders targeted ByteDance (BDNCE), Tencent (OTCPK:TCEHY) and Huawei.
Home Depot and Lowe’s expected to post strong FQ2 results amid demand surge from pandemic-related DIYers
Home improvement behemoths Home Depot (NYSE:HD) and Lowe’s (NYSE:LOW) are expected to report same-store sales growth of 10.9% and 14.3%, respectively, this week for fiscal Q2. The surge in demand, which surprised even veteran executives, is being driven by people remaining at home during the pandemic who are devoting time and resources to home upgrades. Foot traffic at HD is up 35% since April.
Carmakers moving to online sales as dealer networks grapple with pandemic-related slowdowns
Stoked by the surge in online commerce during the pandemic, certain car manufacturers are rolling out direct car sales via the internet, bypassing their traditional dealer networks who have been forced to shut down showrooms. Peugeot parent PSA expects to deliver more than 100K vehicles via the direct channel. Volkswagen (OTCPK:VWAGY) is pursuing the same strategy for its electric cars. It plans to release 75 battery-powered models in the next 10 years. Rather than allowing its dealers to set their own prices, VW will sell its flagship ID.3 car at a standardized price in Germany regardless of how it is purchased. Daimler (OTCPK:DDAIF), already selling autos directly in South Africa and Sweden, plans to roll out in Austria next year.
Google in talks to invest in India’s ShareChat social firm
Google (GOOG, GOOGL) is in talks to invest in India-based social-media firm ShareChat, the Economic Times reports. ShareChat is looking to raise $150M-$200M to help it step up to fill the gap left by banned Chinese apps such as ByteDance’s (BDNCE) TikTok and Helo; ShareChat owns a short-video app, Moj, as well as a social-media platform competing with now-banned Helo. Microsoft (NASDAQ:MSFT) has also reportedly held its own ShareChat investment talks.
Virgin Galactic not quite there with launch of space tourism
Virgin Galactic (NYSE:SPCE), the space tourism brainchild of billionaire Richard Branson, has pushed the date of its maiden voyage into 2021. The trip, originally planned for this year, will transport six passengers into the lower thermosphere on the SpaceShipTwo during which they will experience a few minutes of weightlessness. About 700 customers have made prepayments on the $225K discounted flights, but this is hardly a rounding error compared to the ~$108M it consumed in H1. Predictably, short-sellers are circling the cash-hungry firm, currently valued at $3.9B. Its long-term plan to enter the traditional airline market with a supersonic jet that can travel between distant cities in just a few hours.
ByteDance faces pressure at home to resist U.S. demand over TikTok U.S. operations
ByteDance (BDNCE) is literally caught in the middle of the U.S./China squabble over TikTok. Chinese users and observers perceive that submitting to U.S. demands to divest the short-form mobile video platform’s U.S. operations within 90 days would be a face-losing sign of weakness. Last week, it announced that it may seek legal action against President Trump’s executive order but it is unclear if management intends to follow through. The company’s sole realistic option, according to one observer, is to ensure that it receives a reasonable price for TikTok’s U.S. business.
China rolls over medium-term loans at unchanged rates
The People’s Bank of China rolled over maturing medium-term loans at unchanged rates for the fourth straight month. In a one-off for the month, though, it’s rolling 700B yuan worth (about $100.7B) of one-year medium-term lending facility loans; that amount exceeds the two batches of MLF loans expiring in August (about 550B yuan total). It also injected another 50B yuan into the market via seven-day reverse repos. It’s a signal that the central bank means to keep liquidity rates healthy for commercial lenders to manage upcoming government bond sales.
Gold bugs love rally, but ore getting tougher to mine
Gold miners are enjoying an extended rally, exclusive of the COVID-19 sell-off in March, as the price of the ore continues to climb, up ~28% this year. Prices topped $2,000 per ounce before running into profit-taking. The bad news is the expected long-term rise in mining costs due to the difficulties in extracting the precious metal in less-hospitable places. The grade of ore being mined, the amount of metal per ton of rock extracted, is also falling, now 1.46 grams per ton, far below more than 10 grams in the early 1970s. Executives, wary of the costly overexpansion during the last run-up, have used the bull market to pay down debt and increase dividends rather than start new projects.
What else is happening…
FDA OKs quick saliva test for COVID-19.
Intelsat (OTCPK:INTEQ), with Northrop Grumman (NYSE:NOC), launches first four-frequency satellite.
U.S. Postal Service halts delivery box removal until after election.
CureVac (NASDAQ:CVAC) vows “ethical” profit margin on COVID-19 vaccine.
U.S. health officials fear “twindemic” as flu season nears.
Utilities cash in on green energy subsidies before expiration.
Today’s Economic Calendar
8:30 Empire State Mfg Survey
10:00 NAHB Housing Market Index
4:00 PM Treasury International Capital
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