Good morning. Happy Friday.
The Asian/Pacific markets leaned to the downside. China, India and Singapore did well; Japan, Australia, Malaysia, Indonesia and the Philippines closed down. Europe, Africa and the Middle East are currently mixed. Greece, Spain, Austria and the Czech Republic are down; Turkey, South Africa, Switzerland, Israel and Sweden are up. Futures in the States point to a positive open for the cash market.
—————
VIDEO: Mini Masterclass in Trading
—————
The dollar is down. Oil is down; copper is up. Gold and silver are up. Bonds are up.
Stories/News from Seeking Alpha…
Unlikely suitor for TikTok
A surprising party has joined the race for TikTok, as Walmart (NYSE:WMT) joined forces with Microsoft (NASDAQ:MSFT) to buy the U.S. assets of the popular short video app. The bid could total $30B or even more, and as odd as that coupling seems, CNBC reports that Walmart originally sought majority ownership of TikTok in a consortium with Alphabet (GOOG, GOOGL) and SoftBank (OTCPK:SFTBY). “We believe a potential relationship could provide Walmart with an important way for us to reach and serve omnichannel customers as well as grow our third-party marketplace and advertising businesses,” the company said in a statement. Oracle (NYSE:ORCL) is another U.S. company vying to acquire the assets of TikTok, and parent ByteDance (BDNCE) is expected to pick a bidder to enter into exclusive talks as early as today.
Laura weakens and moves inland
Hurricane Laura appears to have narrowly missed the heart of the U.S. fuel-making and chemicals infrastructure along the Gulf Coast, and caused less mayhem than forecasts predicted. Officials still had to cope with a chlorine leak and fire at BioLab, a chemical manufacturing facility the Lake Charles, La., area, and Motiva Enterprises reported a leak at its Port Arthur, Tex., refinery, but said it occurred during the shutdown of the refinery before the hurricane had arrived. While Laura has been downgraded to a tropical depression, almost 800K homes and businesses across Louisiana, Texas and Arkansas are still without power.
Interest rates to stay low
The fun in Jackson Hole wraps up today as the two-day virtual symposium concludes with the last livestreams from central bankers and other influential officials. Nothing is likely to compare to yesterday’s speech from Fed Chair Jerome Powell, which will have a transformative effect on U.S. monetary policy for the foreseeable future. The central bank said it will keep interest rates low to help prop up the pandemic ravaged economy even if inflation rises above its target level of 2% for periods of time. Prices of stocks, bonds and gold all made several U-turns on the news, while equities attempted another green session overnight. Dow and S&P 500 futures are up 0.5% and 0.4%, respectively, while Nasdaq futures are hugging the flatline.
Abe ends run as Japan’s longest-serving premier
The resignation of Japanese Prime Minister Shinzo Abe due to health reasons saw the Nikkei fall 1.4% overnight, while the safe haven yen strengthened 0.5% against the dollar as the political uncertainty might prompt money to come back home. “Monetary and fiscal policies will remain intact for now, but the mood will sour like it did last time,” said Tsutomu Soma, a bond trader at Monex in Tokyo. “It is going to take a long time for Japan to see a long-standing administration again.” Abe, who has battled the chronic disease ulcerative colitis for years, returned as prime minister for a rare second term in December 2012, pledging to revive growth with his “Abenomics” mix of hyper-easy monetary policy, fiscal spending and reforms.
Rapid coronavirus tests
In a move that would substantially expand the nation’s capacity for rapid testing, the Trump administration has unveiled a $750M deal to buy 150M rapid COVID-19 tests from Abbott Laboratories (NYSE:ABT). “This is a major development that will help our country to remain open, get Americans back to work and kids back to school,” White House senior adviser Alyssa Farah declared. Abbott said the new antigen test (about the size of a credit card) has demonstrated sensitivity of about 97% and could returns results in 15 minutes.
NBA set to resume playoffs?
After sitting out two days of playoff games in protest, NBA players will reportedly take to the court again on Saturday and Sunday. The Milwaukee Bucks refused to play their playoff game against Orlando on Wednesday as a response to the shooting of Jacob Blake, a Black man shot seven times in the back by police in Kenosha, Wis. Hours later, players from 13 teams, coaches and league officials held a late-night meeting that reportedly ran off the rails. Related names ESPN (NYSE:DIS), TNT (NYSE:T), Nike (NYSE:NKE), DraftKings (NASDAQ:DKNG).
Look out, Fitbit!
Amazon (NASDAQ:AMZN) has introduced a wristband for health and fitness tracking called Halo, priced at $64.99, alongside a subscription service and smartphone app. It brings some new offerings, including technology to track people’s body fat percentages, sleep temperature and their emotional state, as well as two microphones and an LED indicator light, but notably lacks a screen. It’s Amazon’s first significant move into wearables, which Gartner estimates will be a $52B market in 2020.
Europe to start 737 MAX test flights
Boeing’s (NYSE:BA) grounded 737 MAX is taking a major step toward returning to the skies after the European Union Aviation Safety Agency said it would send pilots to Canada to conduct test flights, bypassing coronavirus-related travel curbs. EASA will carry out the validation flights from Vancouver during the week of Sept. 7, two months after the FAA and Boeing completed certification test flights in the U.S., followed by Canada this week. Boeing recently reeled in its first 737 MAX order this year, as Poland’s Enter Air placed an order for two jets with options to buy two more. BA +1% premarket.
What else is happening…
Overlooked bond market stars may be winners in new Fed policy.
Amazon (AMZN) orders 1,800 electric vans for European deliveries.
Hertz (NYSE:HTZ) seeking up to $1.5B in bankruptcy financing – WSJ.
Israel lists first commercial passenger flight to UAE.
United Airlines (NASDAQ:UAL) warns pilots may be furloughed in October.
Thursday’s Key Earnings
Dell Technologies (NYSE:DELL) +1.7% AH on consumer, infrastructure strength.
Dollar General (NYSE:DG) -1.4% holding off on guidance for 2020.
Dollar Tree (NASDAQ:DLTR) -7.2% AH also not providing an outlook.
Gap (NYSE:GPS) +6.5% AH following an online sales rush.
HP Inc. (NYSE:HPQ) +3.3% AH guiding above full-year consensus.
Marvell Technology (NASDAQ:MRVL) -0.9% AH giving back gains after Q2 beat.
TD Bank (NYSE:TD) +0.2% helped by wealth, wholesale revenue.
VMware (NYSE:VMW) -0.6% AH despite rising subscription revenue.
Workday (NASDAQ:WDAY) +11.8% AH unveiling a dual CEO structure.
Today’s Economic Calendar
8:30 International Trade in Goods (Advance)
8:30 Retail Inventories (Advance)
8:30 Wholesale Inventories (Advance)
8:30 Personal Income and Outlays
9:45 Chicago PMI
10:00 Consumer Sentiment
1:00 PM Baker-Hughes Rig Count
3:00 PM Farm Prices
—————-
Good morning. Happy Thursday.
The Asian/Pacific markets were very quiet. China moved up; Japan, Singapore and South Korea moved down. Europe, Africa and the Middle East currently lean down. Turkey and South Africa are up; Russia, Greece, Hungary, Spain, Italy, Israel and Austria are up. Futures in the States point towards a down open for the cash market.
—————
Subscribe to Leavitt Brothers research.
—————
The dollar is flat. Oil is down; copper is up. Gold and silver are down. Bonds are up.
Stories/News from Seeking Alpha…
Fed’s new monetary policy approach
The Fed’s annual economic policy symposium, known as Jackson Hole, goes online this year for the first time since it began in 1978. The main event will be Chair Jerome Powell’s keynote at 9:10 a.m. ET, which will reveal conclusions of the central bank’s review of its monetary policy framework. The Fed may be close to cementing a big shift in its philosophy, being more lenient when it comes to inflation and allowing it to rise past the 2% target (for periods of time) to keep the economy humming. While that’s in contrast to its strategy for many years – which is to pre-emptively raise interest rates to fight inflation – the Fed has persistently undershot its inflation target since it was formally established in 2012.
On the economy
U.S. equity index futures are off 0.3% ahead of the big event at Jackson Hole, which could also outline how long the Fed’s near-zero interest rate environment might last and assess the monetary policy response to the coronavirus pandemic. On the stimulus front, Republicans are reportedly considering a more narrow COVID-19 relief bill as aid talks between the Trump administration and Democrats are at a deadlock. Also on the radar today is a second reading of U.S. gross domestic product for the second quarter, as well as other growth statistics.
Laura makes landfall in Louisiana
Category 4 Hurricane Laura has made a “catastrophic” landfall in Louisiana, according to the National Hurricane Center, which could render wide areas uninhabitable for weeks or months and knock out power for just as long. While the storm has also threatened the majority of Gulf oil and natural gas production, consumers are unlikely to see big price hikes because the pandemic has decimated energy demand. Officials are still assessing the extent of destruction as search and rescue missions begin in battered neighborhoods near the coast.
FDA approves $5, 15-minute COVID test
Abbott Laboratories (NYSE:ABT) is up 10% in premarket trade following news that the FDA granted emergency use authorization for the company’s 15-minute COVID-19 test that will be priced at just $5. Abbott says BinaxNOW works without relying on lab equipment – at a time when labs can take as long as two weeks to produce results – and uses a nasal swab and a small reactive card that can be administered by a range of healthcare workers, including pharmacists. The company plans to ship “tens of millions” of tests in September, ramping to 50M tests per month by the end of October.
#GolfGate
EU trade commissioner Phil Hogan is stepping down amid growing criticism that he broke COVID-19 guidelines in his native Ireland. Hogan had attended a golf event with 80 other people – including Ireland’s Minister for Agriculture Dara Calleary, who resigned last week – and was criticized for not complying with quarantine rules when he arrived in the country. The EU will now have to fill a role that has become even more high-profile in recent months, given the EU’s post-Brexit free trade negotiations and a pandemic-induced shock to supply chains.
China makes some concessions
Following threats from Washington to delist Chinese firms that fail to meet its auditing requirements, China is now proposing to let U.S. regulators audit its state-owned enterprises. The concessions are aimed at solving a long-running accounting dispute, but would insist on redacting some information on national security grounds. It may go a long way in resolving renewed tensions. Beijing fired four missiles into the South China Sea overnight after the U.S. blacklisted 24 companies for their efforts in helping China “reclaim and militarize” outposts in the disputed waterway.
Amazon expands beyond Whole Foods
Moving further into the grocery sector to challenge Walmart (NYSE:WMT), Kroger (NYSE:KR) and Albertsons (NYSE:ACI), Amazon (NASDAQ:AMZN) today is opening the first location of its new chain of Fresh grocery stores in Woodland Hills, California. The 35,000-square foot store will debut the Dash Cart, a smart grocery cart that tracks shoppers’ items and allows them to skip the checkout line, and feature Echo Show devices to ask Alexa where certain items are located. There will also be a service counter for people to pick up orders from Amazon.com, and they can also complete returns there without having to package their items in boxes.
TikTok CEO Kevin Mayer calls it quits
The development comes just a few months after Mayer – then in charge of streaming at Disney (NYSE:DIS) – took the job leading the fast-rising short video app , as well as the role of COO at TikTok parent ByteDance (BDNCE). At the time, it seemed like a consolation prize after Disney’s succession planning turned to Bob Chapek to take over as CEO from Bob Iger. It’s a notable move coming in the middle of what looks like a sale of TikTok’s U.S. operations forced by the Trump administration, with Microsoft (NASDAQ:MSFT) apparently leading competing outreaches from Oracle (NYSE:ORCL) and Twitter (NYSE:TWTR).
What else is happening…
NBA postpones playoff games amid player boycotts.
Chinese Tesla (NASDAQ:TSLA) rival, Xpeng Motors (XPEV), upsizes U.S. IPO.
Ford (NYSE:F) is the latest company to rethink the office.
Salesforce (NYSE:CRM) cuts 1,000 jobs after record earnings.
World’s biggest advertising company resumes its dividend.
Wednesday’s Key Earnings
Box (NYSE:BOX) +6.8% AH on Q2 upside and strong guidance.
DICK’S Sporting Goods (NYSE:DKS) +15.7% as e-commerce drove blowout numbers.
Today’s Economic Calendar
8:30 Initial Jobless Claims
8:30 GDP Q2
8:30 Corporate profits
9:00 Fed’s George: “Navigating the Decade Ahead: Implications for Monetary Policy”
9:10 Jerome Powell: “Monetary Policy Framework Review”
10:00 Pending Home Sales
10:30 EIA Natural Gas Inventory
11:00 Kansas City Fed Mfg Survey
12:30 PM Fed’s Barkin Speech
1:00 PM Results of $47B, 7-Year Note Auction
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
—————-
Good morning. Happy Wednesday.
The Asian/Pacific markets closed mixed. South Korea, India and Taiwan moved up; China, Australia and Singapore moved down. Europe, Africa and the Middle East currently lean up. Denmark, France, Germany, Greece, Finland, Switzerland, the Netherlands and Austria are up; the UAE is down. Futures in the States point towards a flat open for the cash market.
—-
Join our email list – get technical research reports sent directly to you.
—-
The dollar is up. Oil is down; copper is up. Gold is down; silver is up. Bonds are down.
Stories/News from Seeking Alpha…
Laura barrels toward Gulf coast
More than half a million people have been ordered to evacuate the U.S. Gulf Coast, with Hurricane Laura set to come ashore tonight in Texas and Louisiana as a Category 3 storm. On its current track, Laura will likely cause $6B-$18B in losses, according to Chuck Watson, a disaster modeler with Enki Research. Oil is meanwhile holding at a five-month high of $43 per barrel amid a threat that some of America’s largest oil refineries could be shut for months. The hurricane has already prompted more than 84% of oil output and nearly 61% of natural gas production in the Gulf of Mexico to be taken off-line, according to the Interior Department’s Bureau of Safety and Environmental Enforcement.
Another record close
While the S&P 500 and Nasdaq notched fresh highs on Tuesday for the third day running, futures were more muted overnight as investors awaited the next steps for monetary policy (Fed Chair Jerome Powell will speak tomorrow at Jackson Hole). Contracts tied to the Dow are off by 0.2%, the S&P 500 is unchanged and Nasdaq is ahead by 0.3%. Ahead of the opening bell, the latest durable goods report for July will be published, with new orders for manufactured big-ticket items expected to have grown 4.3%, down from a 7.6% jump in June.
Salesforce soars
Cloud and software stocks are getting a boost premarket following a stellar earnings report from Salesforce (NYSE:CRM). The company raised its full-year outlook to $20.7B-$20.8B in revenue and adjusted EPS of $3.72-3.74 (after lowering guidance last quarter). Shares rose 13% AH on the Q2 results, which saw subscription and support sales up 29% and Professional Services increase 23%. “It’s humbling to have had one of the best quarters in Salesforce’s history against the backdrop of multiple crises seriously affecting our communities around the world,” said CEO Marc Benioff.
Vaccine liability protections
The European pharmaceuticals vaccine lobby is pushing the EU for certain liability protections as drugmakers around the world rush to develop a coronavirus vaccine. It would give them a “comprehensive no-fault and non-adversarial compensation system, and an exemption from civil liability” if there are problems with the vaccines, “in order to compensate for such high risks taken by manufacturers.” Several of the firms in Vaccines Europe are in advanced talks with the EU over vaccine supplies, while some have already reached deals with either the U.S. or the EU.
Company culture at Mickey D’s
McDonald’s (NYSE:MCD) handling of workplace problems is in the spotlight as the fast-food giant probes whether former CEO Steve Easterbrook covered up improprieties by other McDonald’s employees. Allegations have also surfaced of potential misconduct within the human resources department (former managers have said their complaints were ignored and they feared retaliation for reporting misconduct). Easterbrook was fired in November over a consensual relationship with an employee, but the company received a tip months later that he had been involved in multiple affairs with workers.
Should the U.S. sell the F-35 to the UAE?
With the ink barely dry on the peace agreement between Israel and the UAE, the two countries are sparring over the latter’s long-standing request to buy Lockheed Martin’s (NYSE:LMT) F-35 from the U.S. Washington is firmly committed to selling advanced weaponry to the UAE, according to Secretary of State Mike Pompeo, adding that Israel would maintain its “qualitative military edge” as stipulated under American law. However, any U.S. decision to push ahead with an arms sale to the UAE will likely face pushback in Congress. It also brings up regional memories of the F-35 sale to Turkey, which backfired after Ankara acquired the S-400 missile defense system from Russia.
Backed by Thiel
Data analytics firm Palantir (PLTR) has filed to go public, confirming prior reports that the company would pursue a direct listing – the same unconventional route taken by Slack (NYSE:WORK) and Spotify (NYSE:SPOT). The secretive tech business co-founded by Peter Thiel is reportedly hoping for a valuation of about $26B, despite losing $588M, or $580M on a pro-forma basis, in 2019. Another Thiel-backed business, called Luminar, went public on Monday via a $3.4B SPAC merger, while workplace app Asana (also backed by Thiel) filed for direct listing on NYSE.
Year of the SPAC
Gary Cohn, the former economic adviser to President Trump, is the latest high-profile name to join the frenzy of Wall Street dealmaking related to special purpose acquisition companies (SPACs). He’s teaming up with investor Clifton S. Robbins to seek $600M for a new blank-check acquisition company, following splashy deals for the likes of Virgin Galactic (NYSE:SPCE), DraftKings (NASDAQ:DKNG) and Nikola (NASDAQ:NKLA). Other high-profile financiers like Bill Ackman, Michael Klein and Chamath Palihapitiya, as well as former U.S. House Speaker Paul Ryan, are among the sponsors for SPAC IPOs in 2020.
What else is happening…
U.S. charges Teva (NYSE:TEVA) in generic drugs price-fixing probe.
American Airlines (NASDAQ:AAL) to reduce workforce by 19K in October.
Elon Musk teases big battery breakthrough.
GM (NYSE:GM) and Ford (NYSE:F) near finish of coronavirus ventilator projects.
Carnival (NYSE:CCL) cancels Princess world cruises in early 2021.
Tuesday’s Key Earnings
Best Buy (NYSE:BBY) -4% AH warning surge in buying could be temporary.
Hewlett Packard Enterprise
(NYSE:HPE) +6.1% AH on sequential top-line gains, strong guidance.
Intuit (NASDAQ:INTU) +5.9% AH after FQ4 beats, TurboTax Online strength.
Nordstrom (NYSE:JWN) -5.7% AH with sales falling 53% during the quarter.
Salesforce (CRM) +13.5% AH raising outlook, shaking off pandemic.
Today’s Economic Calendar
7:00 MBA Mortgage Applications
8:30 Durable Goods
10:00 Fed’s Barkin Speech
10:00 State Street Investor Confidence Index
10:30 EIA Petroleum Inventories
11:00 Survey of Business Uncertainty
11:30 Results of $22B, 2-Year FRN Auction
1:00 PM Results of $51B, 5-Year Note Auction
—————-
Good morning. Happy Tuesday.
The Asian/Pacific markets did well. Japan, South Korea, Taiwan and Indonesia gained more than 1%; Malaysia was weak. Europe, Africa and the Middle East currently lean up. France, Germany, Finland, Singapore, Netherlands, Italy, Austria, Sweden and the Czech Republic are leading while Greece, South Africa and Hungary are weak. Futures in the States point towards an up open for the cash market.
—————
VIDEO:State of the Market
—————
The dollar is down. Oil is up; copper is down. Gold and silver are down. Bonds are down.
Stories/News from Seeking Alpha…
Major shakeup for the Dow
Big changes are coming to the Dow Jones Industrial Average due to Apple’s (NASDAQ:AAPL) 4-for-1 stock split, which will significantly reduce the benchmark’s exposure to the information technology sector. Exxon Mobil (NYSE:XOM), Pfizer (NYSE:PFE) and Raytheon (NYSE:RTX) will be swapped out for Salesforce.com (NYSE:CRM), Amgen (NASDAQ:AMGN) and Honeywell (NYSE:HON), marking the biggest reshuffle in seven years. The moves are effective before the open next Monday, while the divisor used to calculate the blue-chip index from the constituents will be changed before then, preventing any distortions. Soaring about 55% from its March 23 low, the Dow now sits 4% below its all-time high of 29,568.57 notched on February 12.
Commitment to trade
S&P 500 futures climbed 0.5% overnight after another record-setting session on Wall Street that saw the benchmark close above 3,400 for the first time. The latest advance follows a discussion between U.S. and Chinese trade negotiators, with both sides seeing progress on a Phase One trade deal and committing to its success in their first formal dialogue since early May. Data compiled by Johns Hopkins University also showed new daily COVID-19 cases dropping to under 37K (they have been below 50K since mid-August), while we’ll get earnings today from Salesforce (CRM), Best Buy (NYSE:BBY) and Intuit (NASDAQ:INTU).
Changing how the Fed views inflation
Chairman Jerome Powell is set to signal a significant policy shift this week during a “virtual Jackson Hole conference,” including perhaps the Fed’s biggest steps ever to goose inflation back up to a healthy level. “Average inflation” targeting means the central bank will allow inflation to run higher than the usual 2% healthy target for a period of time (if it’s spent a considerable time below that level). The goal could brand Powell’s tenure at the Fed as the opposite of Paul Volcker’s – whose sharp rate hikes in the ’80s built a recession but tamped down price pressures.
Can you get coronavirus a second time?
Researchers at the University of Hong Kong say they have proved the “first case” of reinfection of COVID-19, marking the first such documented case in the world. The virus strains contracted by a 33-year-old man in April (while living in Hong Kong) and August (after he returned from Spain) were “clearly different,” meaning he was not a “persistent carrier” of the virus from his prior infection. “The finding does not mean taking vaccines will be useless,” said Dr. Kai-Wang To, one of the leading authors of the paper. “Immunity induced by vaccination can be different from those induced by natural infection. [We] will need to wait for the results of the vaccine trials to see how effective vaccines are.”
Epic ruling
Judge Yvonne Gonzalez Rogers has decided that Apple (AAPL) will not be required to bring Fortnite – which it had banned after Epic Games added an in-app payment system in violation of Apple’s rules – back to the App Store. However, she ordered Apple not to block the development and distribution of Unreal Engine (the tech behind Fortnite and many other industry games). The ruling is just an early skirmish in a more significant battle that Epic – backed by Tencent (OTCPK:TCEHY) – and Apple are fighting.
One-third of Americans use TikTok
As TikTok and its Chinese parent company ByteDance (BDNCE) sued the Trump administration yesterday over an upcoming ban, the fast-growing video app revealed specific U.S. and global growth milestones for the first time. TikTok has about 100M monthly active users in the U.S. (up nearly 800% from Jan. 2018), notching a figure that would exceed the MAUs of long-established social networks like Twitter (NYSE:TWTR), Pinterest (NYSE:PINS) and Snapchat (NYSE:SNAP), according to research firm Statista. Given the growth rate, TikTok also would not be far behind Facebook-owned (NASDAQ:FB) Instagram, which had 121M MAUs as of last year.
Huawei’s latest problem is India
India is phasing out Chinese equipment from its telecoms networks over an escalating border dispute in the Himalayan Galwan Valley. It’s not a formal ban and Prime Minister Narendra Modi hasn’t made any public announcements – to avoid a tough response from Beijing – but key industry officials have made it clear that local companies should not use suppliers like Huawei or ZTE (OTCPK:ZTCOF). “Let’s do tough rather than talk tough,” the FT report quoted a senior government official as saying. The move comes after many Western companies have banned Huawei from supplying 5G equipment over security and privacy concerns.
Ant Group is going public
The crown jewel of the sprawling Alibaba (NYSE:BABA) empire, Ant Group – formerly known as Ant Financial – has filed for an IPO on the Shanghai stock exchange’s STAR market and the Hong Kong stock exchange. The firm is reportedly targeting a valuation of about $225B, based on an IPO of about $30B if markets are favorable, making it larger than some of America’s biggest banks. Ant Group, which is still controlled by Alibaba founder Jack Ma, runs the popular Alipay mobile payments app in China which has over 900M users. It also offers other financial products and could use proceeds from the IPO to expand cross-border payments and enhance its research and development capabilities.
What else is happening…
Work management platform Asana (ASANA) files for a direct listing.
Facebook (FB) gets Street-high target from UBS on shopping potential.
Germany’s recession was not quite as deep as previously thought.
Tiffany (NYSE:TIF) buyout deadline pushed out to late November.
Delta (NYSE:DAL) warns of nearly 2,000 pilot furloughs in October.
World Trade Organization sides with Canada in U.S. lumber dispute.
Monday’s Key Earnings
Palo Alto Networks (NYSE:PANW) -2.4% AH as soft billings view weighed on FQ4 beats.
Today’s Economic Calendar
8:55 Redbook Chain Store Sales
9:00 S&P Corelogic Case-Shiller Home Price Index
9:00 FHFA House Price Index
10:00 Consumer Confidence
10:00 New Home Sales
10:00 Richmond Fed Mfg.
1:00 PM Results of $50B, 2-Year Note Auction
3:25 PM Fed’s Daly Speech
—————-
Good morning. Happy Monday. Hope you had a good weekend.
The Asian/Pacific markets did very well. China, Hong Kong, South Korea, India, New Zealand and Thailand posted solid gains while the Philippines were weak. Europe, Africa and the Middle East are mostly up. The UK, Denmark, France, Germany, the UAE, Russia, South Africa, Finland, Switzerland, Norway, Spain, the Netherlands, Italy, Portugal, Austria and Sweden are up more than 1%. Futures in the States point towards a moderate gap up open for the cash market.
—————
VIDEO:State of the Market
—————
The dollar is down. Oil and copper are up. Gold and silver are up. Bonds are flat.
Stories/News from Seeking Alpha…
U.S. futures head higher after FDA increases access to COVID-19 treatment
Futures for the three major U.S. stock averages have advanced, following President Trump’s announcement that the U.S. FDA issued emergency use authorization for convalescent plasma to treat COVID-19 and, separately, his team have been privately seeking to reassure U.S. companies that they can still do business with the WeChat messaging app in China. S&P futures rise 0.7%, Nasdaq futures +0.9%, and the Dow pushes 0.8% higher. 10-year Treasury slips, pushing yield up almost 1 basis point to 0.64%. In Europe, the Stoxx Europe 600 Index rises 1.7%, U.K.’s FTSE 100 Index adds 1.6%, Germany’s DAX gains 2.1% and France’s CAC climbs 2.2%. In Asia, Hong Kong’s Hang Seng Index closed up 1.7%, Japan’s Nikkei 225 rose 0.3%, and the Shanghai Composite increased 0.2%.
U.S. recession likely to end late 2020 or in 2021, survey says
A majority of economists say Congress should reinstate supplemental unemployment insurance benefits as the U.S. economy isn’t likely to emerge from the recession until later this year or at some point next year, according to a survey by the National Association for Business Economics. Most of them also support extending the Paycheck Protection Program for small businesses. Two-thirds of the respondents said the economy is still in the recession that began in February and almost 80% indicated that there is at least a 25% chance of a double-dip recession.
ByteDance investors seek to bid for TikTok assets
Some of the investors in ByteDance (BDNCE), including investment firm General Atlantic, want to take large stakes in TikTok’s North America, Australia, and New Zealand operations while Microsoft (NASDAQ:MSFT) or Oracle (NYSE:ORCL), which are also vying to buy the units, would get a minority stake under the plan. The news comes after reports that TikTok is preparing to legally challenge President Trump’s executive order banning transactions between the popular short-form video app and parent ByteDance. The assets for sale may be valued ~$25B-$35B, sources told Reuters. The ByteDance investors are discussing exchanging some or all of their shares in ByteDance with equity in the TikTok assets, they said.
More than half of Gulf of Mexico oil production shut down
Energy producers have shut in 1.07M barrels/day, or nearly 58%, of offshore crude oil production and 1.2M cf/day, or 45%, of natural gas output from the U.S. Gulf of Mexico as Hurricane Marco and Tropical Storm Laura head for the region, according to the U.S. Bureau of Safety and Environmental Enforcement. Royal Dutch Shell (RDS.A, RDS.B) shut in production at all but one of its assets in the U.S. Gulf, while Equinor (NYSE:EQNR) evacuated and shut in production at its Titan platform. Workers have been evacuated from 114 production platforms out of the 643 manned platforms in the Gulf of Mexico, the BSEE said. Crude oil prices are pushing higher +0.7% at about 6:00 AM ET.
At least two dead after Corpus Christi gas pipeline blast
Two people are confirmed dead and two others are missing after an underwater gas pipeline exploded when it was struck by a dredging boat in the Port of Corpus Christi, TX. Six others working on the vessel were hospitalized after the Friday incident that sent flames several hundred feet into the air and forced the partial closure of the port. Enterprise Products (NYSE:EPD) owns the ruptured pipeline, which was holding propane gas at the time of the explosion. Early estimates indicate the accident caused the release of 5K lbs. of propane and 5K lbs. of carbon monoxide. The barge that struck the pipeline reportedly was owned by marine construction contractor Orion Group Holdings (NYSE:ORN).
China can achieve growth this year, Premier says
That’s if the nation is able to reach its target of adding 9M jobs, Premier Li Keqiang said in the western city of Chongqing. He called on the nation to bolster plans to deal with uncertainties after the economy achieved positive results in recent months, according to a statement on the central government website on Sunday. China’s economy recovered to growth, with GDP rising in the three months to June, up 3.2% Y/Y, following a 6.8% decline in Q1.
Takeda to sell consumer unit to Blackstone for $2.3B
Takeda (NYSE:TAK) has agreed to sell its Japanese consumer healthcare business to U.S. investment firm Blackstone Group (NYSE:BX) for $2.3B (¥242B). The portfolio to be divested includes over-the-counter medicines and health products that generated total revenue of more than ¥60B in FY 2019. The deal is expected to close by March 31, 2021.
What else is happening…
Tiziana (NASDAQ:TLSA) gets new U.S. patent for potential COVID-19 treatment.
Delta Air Lines (NYSE:DAL) maps strategy for international return.
U.S. is expected to block Northern Dynasty Minerals’ (NYSEMKT:NAK) controversial Pebble Mine in Alaska.
DoorDash (DOORD) aims for Q4 IPO.
Today’s Economic Calendar
8:30 Chicago FedNational Activity Index
—————-