Good morning. Happy Friday.
The Asian/Pacific markets closed down across-the-board. Japan, China, South Korea, Hong Kong, India, New Zealand, Taiwan, Australia, Indonesia and Singapore were all weak. Europe, Africa and the Middle East currently lean to the upside. The UK, France, Turkey, Finland, Spain, Austria and Sweden are up; Denmark, Greece and Portugal are down. Futures in the States point towards a slight up open for the cash market.
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The dollar is up. Oil and copper are up. Gold and silver are up. Bonds are down.
Stories/News from Seeking Alpha…
Jobs report on tap after tech bloodbath
Traders are closely monitoring today’s non-farm payrolls report, one of just two monthly labor market scorecards left on the calendar before the Nov. 3 presidential election. While the pace of rehiring is expected to have moderated in August, economists expect 1.4M jobs were added last month (from 1.76M in July) and see the unemployment rate ticking down to 9.8% (from 10.2%). Average hourly earnings are forecast to be unchanged in August after rising 0.2% in July. The figures could add pressure on the White House and Democratic leaders to restart stimulus negotiations, which have been stalled for weeks over the size and scope of the next fiscal package.
An ugly session
Tech stocks that have powered U.S. equities to record highs this summer went into sharp reverse on Thursday, with the Nasdaq Composite dropping 5%, and the Dow and S&P 500 falling 2.8% and 3.5%, respectively. Apple (NASDAQ:AAPL) and Tesla (NASDAQ:TSLA) contributed a big portion of those losses, falling over 8%, while Facebook (NASDAQ:FB), Amazon (NASDAQ:AMZN), Netflix (NASDAQ:NFLX), Alphabet (GOOG, GOOGL) and Microsoft (NASDAQ:MSFT) also closed the session sharply lower. Futures were still red at the start of the night, though contracts tied to the Dow and S&P 500 have changed direction to trade 0.8% higher, while the Nasdaq erased its losses.
What happened?
The tech bloodbath is still being analyzed by analysts and traders alike, with opinions spanning the spectrum as to what drove the market selloff. Some are pointing to profit-taking, the “Retail Bros” and a long-due breather, while others are drawing attention to record valuations and a rotation out of tech. How long will it last? That’s also a matter of debate. Was it just a flash crash, or the start of a correction that signals a broader sentiment shift? Join the discussion in the comments section.
Delaying privacy measures
Apple (AAPL) is postponing a privacy feature in its upcoming iOS 14 release (until early 2021) that would prompt users to consent to having their behavior tracked on an app-by-app basis. Critics of the change, like Facebook (FB), expect most users to opt out and said it would hurt app makers by making it harder to sell personalized ads. “We want to give developers the time they need to make the necessary changes,” an Apple spokesman said in a statement. “More information, including an update to the App Store Review Guidelines, will follow this fall.”
Breaking up Big Tech?
The DOJ plans to bring an antitrust case against Google (GOOG, GOOGL) in coming weeks after Attorney General William Barr overruled career lawyers who hoped to have more time to build the case, NYT reports. Some of the vulnerabilities they were worried about had to do with the part that focused on Google’s search practices, while other attorneys probing Google’s online ad business wanted more time to deal with complexities there. A coalition of 50 states and territories currently support antitrust action against Google, reflecting an area of broad bipartisan support.
Additional Chinese app bans
The Trump administration is looking into banning more Chinese apps that could pose a threat to national security, White House chief of staff Mark Meadows said late Thursday. An upcoming ban of TikTok (BDNCE) in the U.S. has prompted flash takeover talks with parties including Microsoft (MSFT) and Walmart (NYSE:WMT), as well as Oracle (NYSE:ORCL), though negotiations are said to have stalled after China updated its technology export restriction list. In a bid to counter the U.S. restrictions, Beijing is also planning to develop a set of sweeping government policies to develop its domestic semiconductor industry.
Political ads
Facebook (FB) won’t accept new political ads in the week heading into the U.S. presidential election in an effort to limit the spread of misinformation. The new rule only applies to purchases made that week, not ads purchased now and scheduled for that window. Facebook’s other new election efforts include partnering with Reuters to provide live, official election results and plans to add a label to any candidate or campaign post that tries to declare victory before the official declaration.
Chances dim for Brexit trade deal
Senior Downing Street figures are putting the chances of a Brexit trade agreement with the European Union deal at 30-40%, according to The Times. The two sides are at loggerheads over state aid, with no sign that either London or Brussels is prepared to compromise ahead of a “critical” negotiating round next week. Boris Johnson has also demanded that British fishermen double the size of their catch from coastal waters, though EU negotiators feel that would lead to the loss of one in three fishing boats in Europe.
What else is happening…
Facebook (FB), Twitter (NYSE:TWTR) flag Trump posts about voting twice.
COVID-19 vaccine from J&J (NYSE:JNJ) prevents severe disease in preclinical studies.
Splashy return planned for Fiat Chrysler’s (NYSE:FCAU) Jeep Grand Wagoneer.
Hawaiian Airlines (NASDAQ:HA) follows other carriers in dropping change fees.
Thursday’s Key Earnings
Broadcom (NASDAQ:AVGO) -2.6% AH despite infrastructure software strength.
DocuSign (NASDAQ:DOCU) -9% AH on broad tech market weakness.
Smith & Wesson (NASDAQ:SWBI) -1.4% AH giving back gains after a record quarter.
Today’s Economic Calendar
8:30 Non-farm payrolls
1:00 PM Baker-Hughes Rig Count
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Good morning. Happy Thursday.
The Asian/Pacific markets were mixed. Japan, South Korea, New Zealand, Taiwan, Australia and the Philippines did well while China, Hong Kong, Malaysia and Indonesia were weak. Europe, Africa and the Middle East currently lean to the upside. France, Germany, Hungary, Spain, Italy, Portugal, Austria and Sweden are up; Russia, Saudi Arabia and Israel are down. Futures in the States point towards a down open for the cash market.
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BLOG: Recent Trades
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The dollar is up. Oil and copper are down. Gold and silver are down. Bonds are down.
Stories/News from Seeking Alpha…
Get ready for vaccine distribution
“Prepare for a Covid-19 vaccine to be ready by Nov. 1,” the Centers for Disease Control and Prevention declared, notifying public health officials in all 50 states and five large cities to prepare for distribution. Technical specifications were given for two candidates, dubbed “Vaccine A” and “Vaccine B,” including requirements for shipping, mixing, storage and administration. The details appear to match vaccines being developed by Pfizer (NYSE:PFE) and partner BioNTech (NASDAQ:BNTX), as well as Moderna (NASDAQ:MRNA), which both require two shots 28 days apart. Pfizer has also stated publicly that it is on track to seek an emergency use nod as early as next month.
Futures take a breather
Traders look set to pare the robust gains seen on Wall Street this week after a rally that lifted the DJIA above 29,000 for the first time since February. Some signs of profit-taking were already in the air as high-flying names like Apple (AAPL) and Tesla (NASDAQ:TSLA) fell 2% and 5.8%, respectively, on Wednesday, though the losses only curb significant YTD gains for each stock. On the economic calendar, reports today include the latest jobless claims, July’s trade balance, revisions to Q2 productivity and labor costs, and the ISM’s non-manufacturing PMI for August.
U.S. debt to exceed size of the economy
The Congressional Budget Office projects a federal budget deficit of $3.3T in 2020, more than triple that of 2019’s shortfall, mostly from the economic disruption caused by the COVID-19 pandemic and the ensuing legislative response. In the fiscal year that begins on Oct. 1, federal debt held by the American public is also projected to reach or exceed 100% of U.S. GDP for the first time since WWII. That would put the U.S. in an exclusive club of nations including Japan, Greece and Italy, which all have debt loads that exceed their economies.
€100B stimulus plan
Leading gains across Europe, France’s CAC 40 climbed 2% as the country unveiled a €100B dose of stimulus to get the economy moving again (GDP contracted 14% following pandemic-induced lockdowns in Q2). The “France Relaunch” plan will narrow in on boosting supply and encouraging investment, as well as wage subsidies and a €10B tax cut for industry production next year. It’s not the only news boosting European equities this morning. Over in Germany, Chancellor Angela Merkel’s ruling bloc backed plans allowing for extraordinary deficit spending in 2021.
Big Tech responds to European tech taxes
Several European nations, including the U.K., France and Italy, have gone ahead with implementing Digital Services Taxes (DST) on Big Tech as negotiations with the U.S. fell apart months ago. As the new taxes come into force, U.S. tech giants have responded by passing on some of the costs. Apple (NASDAQ:AAPL) has announced it will raise charges for developers on the local App Stores, Google (GOOG, GOOGL) is increasing fees for all ads bought in the U.K. and Amazon (NASDAQ:AMZN) is upping costs for third-party sellers by 2%.
Latest round of India app bans
The 118 mostly China-based apps are “prejudicial to sovereignty and integrity of India” as well as “security and public order,” the country’s Ministry of Electronics and Information Technology said in a statement. It follows multiple rounds of high-level military talks with Beijing that failed to end the recent standoff over the two nations’ disputed border. Included in the bans are versions of Tencent’s (OTCPK:TCEHY) popular game PUBG, Xiaomi’s (OTCPK:XIACF) ShareSave, Baidu’s (NASDAQ:BIDU) apps and Ant Group’s (NYSE:BABA) Alipay.
The Commoner
Netflix (NASDAQ:NFLX) has signed a production deal with Prince Harry and his wife Meghan Markle, the Duke and Duchess of Sussex, after they stepped away from the British royal family and moved to California. They have a multi-year agreement to produce nature series, documentaries and children’s programming, however, Markle, who most recently starred in Suits, will not be acting. The deal is of a piece with the one Netflix struck with former president Barack Obama and wife Michelle, which established a slate of programming the Obamas would produce for the streaming giant.
Up in vape
Juul Labs (JUUL) is planning another significant round of layoffs after cutting about one-third of its 3,000 workers earlier this year, WSJ reports. Plagued by regulatory crackdowns and investigations into its marketing practices, the e-cigarette maker may also pull out of Europe and Asia to combat a sharp drop in sales. In the first quarter of this year, Juul reported a loss of $46M on sales of $394M, weighing on the returns of the startup’s biggest investor. Altria (NYSE:MO) took a 35% stake in 2018 at a price that valued Juul at $38B, though that figure has shrunk to $12B.
The SPAC craze
On a “mature unicorn” hunt, Bill Ackman’s Pershing Square Tontine Holdings (NYSE:PSTH.U) has been rebuffed by Airbnb (AIRB), according to a Bloomberg report. Pershing Square Tontine six weeks ago raised a SPAC-record $4B in an IPO. Other possibilities for Ackman? Perhaps Bumble, which is said to be prepping an IPO in the $6B-$8B valuation range, or Robinhood (RBNHD), which recently raised $200M at an $11.2B valuation, and has massively shaken up the brokerage industry.
What else is happening…
Tesla’s (TSLA) largest independent investor cuts stake due to concentration rule.
Robinhood (RBNHD) faces SEC fine over high speed trading deals – WSJ.
DraftKings (NASDAQ:DKNG) soars after Michael Jordan comes on board.
Another heat wave set to test California electric grid.
Verizon (NYSE:VZ), Amazon (AMZN) may invest $4B in Vodafone Idea – Mint.
Wednesday’s Key Earnings
(NASDAQ:CRWD) -6.3% AH despite beat-and-raise after rally.
Macy’s (NYSE:M) +0.6% after narrower-than-expected Q2 loss.
PVH Corp. (NYSE:PVH) +4.2% AH posting strong digital commerce growth.
Today’s Economic Calendar
7:30 Challenger Job-Cut Report
8:30 Jobless Claims
8:30 Goods and Services Trade
8:30 Productivity and Costs
9:45 PMI Composite Final
10:00 ISM Service Index
10:30 EIA Natural Gas Inventory
12:00 PM Fed’s Bostic: Economic Outlook
1:00 PM Fed’s Evans: U.S. Monetary Policy
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
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Good morning. Happy Wednesday.
The Asian/Pacific markets did well. Japan, South Korea, India, New Zealand, Australia, Malaysia and Thailand led while the Philippines were weak. Europe, Africa and the Middle East are currently doing great. The UK, Denmark, Poland, France, Germany, Finland, Switzerland, Italy, Sweden and Saudi Arabia are up more than 1%. Futures in the States point towards a moderate gap up open for the cash market.
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BLOG: Recent Trades
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The dollar is up. Oil and copper are up. Gold and silver are down. Bonds are down.
Stories/News from Seeking Alpha…
Efforts on new coronavirus aid
For more than a month since key provisions of the landmark Cares Act expired, Democrats and Republicans have been at odds over the size and scope of another coronavirus stimulus package. Treasury Secretary Steven Mnuchin is now suggesting a higher $1.5T number for the Trump administration’s proposed ceiling for a follow-on bill, while White House chief of staff Mark Meadows “conceded in an effort to get a deal done” to put more money on the table for cities and states. Mnuchin also released a new estimate for the so-called Main Street Lending Program, which will make between $25B-$50B of loans to midsize businesses in coming months.
Eviction moratorium through end of the year
The REIT sector is on watch after the Trump administration implemented a national moratorium on residential evictions through the end of the year. The new ban covers tenants who certify that they have lost “substantial” income; that they expect to make no more than $99,000 in 2020 or received a stimulus check; and that they are making their “best efforts” to pay as much of their rent as they can. When the moratorium expires at the end of 2020, renters who received protection will still need to make up missed payments to their landlords.
Futures tick higher
Dow and S&P 500 futures are up by 0.8%, while the Nasdaq powers ahead by 1.2% after another day of record highs. Tech has been a big driver of gains in recent sessions, and Apple (NASDAQ:AAPL) advanced another 2% in premarket trade as more people rely on internet-connected devices for work, home schooling and communication. The remainder of the week will be dominated by employment figures, with the ADP reporting on private sector hiring today and the biggest report of the month, non-farm payrolls for August, due on Friday morning.
No app download needed
Google (GOOG, GOOGL) and Apple (AAPL) are building a COVID-19 notification system straight into smartphones, eliminating the need for a separate app and ramping up a new weapon in the effort to track exposure to the novel coronavirus. Future versions of iOS and Android will feature the new system that previously required an app made by a public health authority. The system will use Bluetooth signals from phones that have opted in to find out how closely and for how long two phones were near each other, without collecting location or identity data.
Regular IPOs under threat?
2020 has been the year of questioning the traditional IPO process as companies look for cheaper ways to go public. There are only two other ways to get on an exchange: SPAC merger, which has seen outsized activity in recent months, or direct listing, where a company floats existing private shares. While a new plan by the SEC last week removed one of the last major incentives to conduct an IPO via the traditional methodology – by allowing capital raises for direct listings – a last-ditch effort was made to block it. The Council of Institutional Investors said it would file a petition for a review of the plan by the SEC’s commissioners, citing concerns that companies could circumvent protections built into the IPO process.
Euro strength, dollar weakness
It’s now trending lower, but the euro briefly rose above $1.20 against the dollar on Tuesday for the first time in more than two years, rallying nearly 12% since late March. “The euro-dollar rate does matter,” ECB chief economist Philip Lane said overnight, causing the currency to pare its gains. While the EU’s rescue fund appears to have calmed any lingering fears of a euro breakup, Fed stimulus has weighed on the greenback and easy policies are being attributed to the downward cycle. For a long time, President Trump has also criticized dollar strength due to the trade deficit, though as the coronavirus crisis hit, he said it was “great time” to have a strong currency.
Australia records first recession in nearly 30 years
Australia has become the latest country to officially enter a recession, though the 7% GDP decline was a lot better than the coronavirus-induced devastation seen in other economies. For comparison, the U.S. economy contracted by a record 32.9% in Q2, while the United Kingdom’s GDP dropped 20.4%. “Our record run of 28 consecutive years of economic growth has now officially come to an end,” Australian Treasurer Josh Frydenberg told reporters. “COVID-19 has wreaked havoc on our economy and our lives like nothing we have ever experienced before. But there is hope and there is a road out.”
New Scottish independence referendum
Scotland is taking a new shot at breaking away from the United Kingdom as First Minister Nicola Sturgeon revived plans for a second independence referendum. “Brexit, and the way in which is it being implemented, immeasurably strengthens the case for Scotland becoming an independent country with the ability to shape our own destiny and contribute positively to the world,” said the SNP leader. While Scotland voted to stay in the U.K. in 2014 by a 55% to 45% margin, that was before Brexit, as well as recent opinion polls that suggest a sustained majority of Scottish voters would now back the leave camp.
What else is happening…
Samsung (OTC:SSNLF) releases the Galaxy Z Fold 2 foldable device.
70% of U.S. AMC theaters to resume operations by weekend.
Tesla (NASDAQ:TSLA) is raising money. So how will shares perform, if history is any guide?
McDonald’s (NYSE:MCD) franchisees sue over discrimination allegations.
Roche (OTCQX:RHHBY) to launch new rapid coronavirus test in Europe.
Dating app Bumble to plan IPO above $6B – Bloomberg.
Today’s Economic Calendar
Auto Sales
7:00 MBA Mortgage Applications
8:15 ADP Jobs Report
10:00 Factory Orders
10:00 Fed’s Williams Speech
10:30 EIA Petroleum Inventories
12:00 PM Fed’s Mester: U.S. Outlook and Monetary Policy
2:00 PM Fed’s Beige Book
3:00 PM Fed’s Kashkari Speech
6:00 PM Fed’s Daly: “An Economic Framework for the Future”
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Good morning. Happy Tuesday.
The Asian/Pacific markets closed mixed. China, South Korea, India, Turkey and Indonesia posted gains while New Zealand, Australia and the Philippines closed down. Europe, Africa and the Middle East are currently mixed. Russia, Greece, South Africa, Switzerland and Sweden are up; the UK, Poland, Hungary and Saudi Arabia are down. Futures in the States point towards an up open for the cash market.
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VIDEO: Mini Masterclass in Trading
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The dollar is down. Oil and copper are up. Gold and silver are up. Bonds are down.
Stories/News from Seeking Alpha…
Stock split mania
Shares of Tesla (NASDAQ:TSLA) are up another 7.5% to $533 premarket, adding to the 12.5% rally seen yesterday after the company split its stock 5-for-1. Apple (NASDAQ:AAPL) shares are meanwhile ahead by 2.6% to $132 in early trade, following their 3.4% advance on Monday (the two stocks are up 34% and 81%, respectively, since announcing the splits just a month ago). In fact, the high trading volumes of the “Retail Bros.” appear to be taking down popular brokerages like Robinhood and TD Ameritrade, with outages reported for many users at the market open on Monday.
Out with the fundamentals
Prior to the stock breakups, some were saying that splits are not impactful anymore as fractional shares are becoming widely available at brokerages, while market caps of the companies essentially stay the same. Regardless of the rationality, that doesn’t seem to be the sentiment of the new trader, which has created frustration for the old guard. “Look at Tesla and Apple: Everybody understands that [stock] splits don’t create value,” said Leon Cooperman, who founded Omega Advisors. “My dad once told me if you gave me five singles for a $5 bill, I’m no better off.”
Cue the tech music
Overnight, S&P 500 and Dow futures rose 0.3% and 0.1%, respectively, though contracts tied to the Nasdaq powered ahead by 1.1%, led by outsized gains for Apple (AAPL) and Tesla (TSLA). Zoom Video (NASDAQ:ZM) also brought cocktails to the party, jumping 27% AH after quarterly revenue more than quadrupled due to stay-at-home trends, while the video-conferencing company raised its sales outlook. The results cemented the Nasdaq’s best monthly performance since 2000, while the S&P recorded one of its best Augusts since the 1980s.
Increasing chances of a Trump win – JPMorgan
Position your portfolio for the rising odds of President Trump winning re-election, according to JPMorgan Chase & Co., which says the spread between him and challenger Joe Biden is now nearly even. That’s largely due to the impact on public opinion of violence around protests, as well as potential bias in polls, said strategist Marko Kolanovic. “Implications could be significant for the performance of factors, sectors, COVID-19 winners/losers, as well as ESG, though certainly a lot can happen in the next ~60 days.”
Phase 3 trials
AstraZeneca (NYSE:AZN) is starting Phase 3 trials of its experimental coronavirus vaccine in the U.S., becoming the third company to start late-stage trials to prevent COVID-19. Trial centers across the nation are recruiting up to 30K adults aged 18 years or over. AstraZeneca’s vaccine, known as AZD1222, was developed in partnership with Oxford University and has the backing of the U.S. government. Rivals Moderna (NASDAQ:MRNA) and Pfizer (NYSE:PFE)/BioNTec (NASDAQ:BNTX) already have Phase 3 trials under way, also with federal funding.
Pulling the plug on news sharing
Escalating tensions with Canberra, Facebook (NASDAQ:FB) said it will stop Australians sharing news content on its platforms if a proposal to make it pay local media outlets for their content becomes law. The country would become the first to make the giant social network and Google (GOOG, GOOGL) – which is also opposed to the legislation – pay for news sourced from local providers under a royalty-style system. “We don’t respond to coercion or heavy handed threats wherever they come from,” Australian Treasurer Josh Frydenberg said in response, adding that the proposed law was in the national interest and followed 18 months of public inquiry.
Walmart announces membership service
Walmart (NYSE:WMT) is finally going head to head with Amazon (NASDAQ:AMZN) via a nationwide membership program, though the retailer says the new service is “really about doubling down with the customers we have and getting more share of wallet and more share of mind.” The program, which costs $98 annually, or $12.95 a month, will launch on Sept. 15. Biggest difference: Walmart+ customers will have to spend a minimum of $35 for each online order to avoid fees, while rival Amazon Prime touts free two-day (and some same-day) shipping on every item.
Drone deliveries
Amazon (AMZN) has received approval from the FAA to operate its fleet of Prime Air delivery drones, allowing the e-commerce giant to expand autonomous packaged delivery. It’s not alone. UPS (NYSE:UPS) and Wing, a unit of Alphabet (GOOG, GOOGL) have already gained clearance to operate unmanned air fleets in the U.S. While routine drone deliveries to American consumers are still years away, Amazon is targeting package delivery to customers in 30 minutes or less (it began testing in 2018).
What else is happening…
Eurozone inflation turns negative for first time since 2016.
J.C. Penney (OTCPK:JCPNQ) plans sale to lenders after talks hit stalemate.
Eastman Kodak (NYSE:KODK) up 20% premarket as D.E. Shaw takes stake.
Cowen sees big demand for Virgin Galactic (NYSE:SPCE) spaceflights.
Anthem (NYSE:ANTM), Cigna (NYSE:CI) can’t collect damages over failed merger.
Delta (NYSE:DAL) and American (NASDAQ:AAL) follow United (NASDAQ:UAL) in dropping U.S. change fees.
Monday’s Key Earnings
Rackspace (NASDAQ:RXT) +4.9% AH in first earnings since new IPO.
Zoom (ZM) +27% AH boosting outlook on remote work trends.
B>Today’s Economic Calendar
8:55 Redbook Chain Store Sales
9:45 PMI Manufacturing Index
10:00 ISM Manufacturing Index
10:00 Construction Spending
1:00 PM Fed’s Brainard Speech
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Good morning. Happy Monday. Hope you had a good weekend.
The Asian/Pacific markets suffered stiff losses. Japan did well, but China, Hong Kong, South Korea, India, New Zealand, Taiwan, Malaysia, Indonesia and Thailand were weak. Europe, Africa and the Middle East lean down. Hungary is up, but Poland, Turkey, the UAE, South Africa and Spain are down. Futures in the States point towards a slight up open for the cash market.
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VIDEO: Mini Masterclass in Trading
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The dollar is down. Oil and copper are up. Gold is down; silver is up. Bonds are down.
Stories/News from Seeking Alpha…
High profile stock splits
Excitement is percolating around two of the market’s favorite stocks as Apple (NASDAQ:AAPL) begins trading today (at $125/share) following a 4-for-1 split, while Tesla (NASDAQ:TSLA) starts trading (at $443/share) on a 5-for-1 split-adjusted basis. While the market caps of the companies will remain the same, some are saying the moves will make shares “more accessible to a broader base of investors” and therefore a new catalyst for the “Retail Bros.” Others say it could lead to some profit-taking, with traders cashing in on a record run following the recent split announcements. AAPL +1%; TSLA +2.3% premarket.
A new bull market
U.S. equity futures are starting the week up 0.3% after the DJIA turned positive for 2020 and Wall Street posted its fifth consecutive week of gains. Q2 earnings are expected today from Zoom Video Communications (NASDAQ:ZM) and Rackspace Technology (NASDAQ:RXT), though the economic calendar is light. Later in the week, investors will get reports on construction spending, manufacturing, the trade gap and the Fed’s “Beige Book” before the highly-awaited U.S. jobs report for August on Friday. This month’s stock market gains have pushed the S&P 500 to record levels, officially confirming a new bull market.
Shaking up the Dow Jones
Important adjustments to the Dow Jones Industrial Average (DJI) are set to take effect this morning. Apple’s (AAPL) 4-for-1 stock split set off a cascade of changes as it shrank the weighting of formerly the most important Dow member to 3% from around 12%, and the overall technology representation in the index to around 20% from 27%. The new addition of Salesforce (NYSE:CRM) to the Dow will bring the share of tech in the index to about 23%, and will also see Amgen (NASDAQ:AMGN) and Honeywell (NYSE:HON) replace iconic Exxon Mobil (NYSE:XOM), Pfizer (NYSE:PFE) and Raytheon (NYSE:RTX). The new divisor is likely to be 0.152 from around 0.147, meaning a $1 price move in any Dow component translates to a swing of 6.579 points from around 6.8 points.
FDA willing to fast track coronavirus vaccine
“If the benefits outweigh the risks,” FDA Commissioner Stephen Hahn would be willing to bypass the full federal approval process in order to make a COVID-19 vaccine available as soon as possible. That would mean emergency authorization could be appropriate before Phase 3 clinical trials are completed. “This is going to be a science, medicine, data decision,” Hahn added. “This is not going to be a political decision.” Three Western drugmakers are well along with their Phase 3 clinical trials, including AstraZeneca (NYSE:AZN), Moderna (NASDAQ:MRNA) and the Pfizer (PFE)/BioNTech (NASDAQ:BNTX) alliance.
Nestle to buy Aimmune Therapeutics for $2.6B
Nestle’s (OTCPK:NSRGY) health sciences division already owns a 26% stake in Aimmune (NASDAQ:AIMT), but the company is paying $34.50 a share for the rest of the peanut allergy treatment maker. Including that stake, the deal – expected to close in Q4 – has an enterprise value of about $2.6B. “Together we will be able to offer a wide range of solutions that can transform the lives of people suffering from food allergies around the world,” said Nestle Health Science CEO Greg Behar. AIMT +170% premarket.
Apple’s new privacy controls
Privacy changes in Apple’s (AAPL) upcoming iOS 14 operating system upgrade have drawn an increasing amount of attention before a fall release, mainly from those who benefit from the advertising industry. Facebook (NASDAQ:FB) has made its strongest statement yet about what the changes could mean, suggesting it could halve revenues from its Audience Network business, a multibillion-dollar operation. The upgrade will require apps to ask users whether or not they want their web activity tracked and some publishers worry that most users will opt out, hobbling their ability to show personalized ads in apps.
TikTok parent will follow China export laws
ByteDance (BDNCE) “will strictly abide” by China’s newly amended rules on exporting technology and that could make any sale of TikTok’s U.S. operations more complicated. On Friday, China updated its list of technologies subject to export restrictions to include a number of areas like voice recognition, chip design, recommendation algorithms and artificial intelligence. Microsoft (NASDAQ:MSFT) and Walmart (NYSE:WMT), as well as Oracle (NYSE:ORCL), have submitted rival bids to acquire TikTok’s U.S. business, while Centricus Asset Management and Triller were said to have made a last-minute pitch on Friday, though the latter claim was denied by ByteDance.
Historic Israel-UAE flight
Things are changing rapidly in the Middle East as the first Israeli commercial airliner flew over Saudi Arabia on a non-stop flight from Israel. Aboard the El Al (OTC:ELALF) Boeing 737 were top aides to President Trump and Israeli Prime Minister Benjamin Netanyahu, who were flying to the United Arab Emirates to put the final touches on a pact establishing open relations between the Gulf power and Israel. Talks will initially focus on fields like tourism, finance, investment and health, with Israel’s finance ministry seeing potential for annual bilateral trade starting at $2B and building up to $6.5B once cooperation matures.
What else is happening…
United (NASDAQ:UAL) drops ticket-change fees for domestic flights.
Latest secondary listing in Hong Kong: Yum China (NYSE:YUMC).
China’s largest banks post worst profit decline in more than a decade.
Berkshire (BRK.A, BRK.B) buys stakes in Japan’s five leading trading companies.
Zuckerberg says Facebook (FB) erred in not removing militia post.
Comcast (NASDAQ:CMCSA) turns attention to smart-TV competition.
Today’s Economic Calendar
9:00 Fed’s Clarida: Monetary Policy
10:30 Dallas Fed Manufacturing Survey
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