Good morning. Happy Friday.
The Asian/Pacific markets were quiet. China, Hong Kong and Indonesia did well; New Zealand and the Philippines were weak. Europe, Africa and the Middle East lean down. The UAE and Switzerland are up; the UK, France, Greece, Russia, South Africa, Norway, Spain, Israel, Austria and the Czech Republic are down. Futures in the States are unchanged.
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VIDEO: Leaders are at Key Levels
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The dollar is flat. Oil is down; copper is up. Gold is up; silver is flat. Bonds are up.
Stories/News from Seeking Alpha…
Volatile week ends in quad witching session
U.S. equity futures held up overnight following another selloff on Wall Street that was led by major tech names. Contracts tied to the Dow and S&P 500 are hugging the flatline, while Nasdaq futures pared recent losses by climbing 0.6%. Mixed messaging around a potential coronavirus vaccine, as well as the passage of further fiscal stimulus, weighed on the market, while investors are gearing up for consumer sentiment data set for release at 10 a.m. ET. Don’t forget that it’s also quad witching day, which refers to the simultaneous expiration of market index futures, stock futures, market index options and stock options. “These days tend to get a lot of press for all of the volume they create, but historically they are nearly always a non-event,” said Ryan Detrick, senior market strategist at LPL Financial.
Spending deal to avoid government shutdown
While there may be disagreement over another round of coronavirus relief, lawmakers are aiming to unveil a bipartisan spending bill today to avert a government shutdown on Oct. 1. The “clean” legislation, largely devoid of any controversial measures, should keep the government funded into mid-December. “I don’t think anybody wants to be responsible for shutting down the government on the eve of an election in the middle of a pandemic, so it’s a rare outbreak of common sense on both sides,” said Rep. Tom Cole (R., Okla.), a senior member of the House Appropriations Committee.
New round of farm aid
“Starting next week my administration is committing an additional $13B in relief to help farmers recover from the China virus,” President Trump announced a campaign rally in Mosinee, Wisconsin. The new aid is the second tranche of money issued as part of the Trump administration’s Coronavirus Food Assistance Program. In April, the administration unveiled $19B in relief for the agriculture sector under the CARES Act, including $16B in direct payments to farmers and ranchers and $3B in mass purchases of dairy, meat and produce.
Fed mulls extension of bank dividend curbs
Due to heightened economic uncertainty, the Federal Reserve is considering extending its caps on banks’ dividends and stock repurchases for the rest of the year. The U.S. central bank made the announcement along with its release of hypothetical scenarios for the second round of stress tests that it’s requiring due to the COVID-19 pandemic. Unlike an earlier round of stress tests this year, the Fed will release the results of the tests for each of the 33 lenders, rather than providing aggregate results for the group.
Sub-zero rates
The Bank of England held its benchmark policy rate at 0.1% on Thursday, but indicated it could cut interest rates below zero for the first time in its 326-year history. While recent domestic economic data has been a bit stronger than expected, it’s “unclear how the economy will perform further out,” according to the Monetary Policy Committee. Another major risk facing the U.K. economy relates to the post-Brexit trade discussions between the U.K. and the EU, which have recently soured.
Terms of a TikTok deal
The Trump administration spent Thursday reviewing proposals on the TikTok-Oracle (NYSE:ORCL) partnership, which currently has many moving parts. TikTok owner ByteDance (BDNCE) agreed to list the video-sharing app on a U.S. stock exchange, which could happen within a year, though there are still concerns over whether the Chinese parent would be allowed to retain a majority stake in the new company. Meanwhile, shares in China’s Tencent (OTCPK:TCEHY) tumbled into the U.S. closing bell following reports that its investments are drawing new national security attention.
Exchange dealmaking
Seeing off competing bids from Deutsche Borse (OTCPK:DBORY) and Switzerland’s SIX, the London Stock Exchange (OTCPK:LNSTY) is in exclusive talks to sell Borsa Italiana to France’s Euronext (OTCPK:EUXTF). Offloading the Milan stock exchange would help LSE achieve regulatory remedies for its $27B purchase of data provider Refinitiv, which is owned by Blackstone (NYSE:BX) and Thomson Reuters (NYSE:TRI). The deal is politically sensitive in Rome because of concerns about who could take control of Borsa Italiana’s bond platform, which handles trading of Italy’s government debt.
New COVID-19 restrictions across Europe
Targeted lockdowns and local restrictions are returning to Europe as the region tries to avoid broad economic damage amid a surge in coronavirus cases. “Weekly cases have now exceeded those reported when the pandemic first peaked in Europe in March,” the WHO’s regional director for Europe Hans Kluge told an online news conference. “Although these numbers reflect more comprehensive testing, it also shows alarming rates of transmission across the region.” Pubs and restaurants must shut early and household mixing has been limited in northeast England, while social gatherings of more than six people have been banned across the country. French authorities are meanwhile preparing tighter restrictions in several cities, while Spain’s Madrid has moved to “reduce mobility and contacts” in areas with high infection rates.
Pandemic closures see restaurants hit the hardest
About 60% of businesses that have closed their doors during the coronavirus pandemic will never reopen them, and restaurants have suffered the most, according to new data from Yelp. The National Restaurant Association also said this week that 100,000 restaurants have closed either permanently or long term, adding that the sector is on track to lose $240B in sales this year. A number of factors have made it especially difficult for eateries, which tend to operate on thin margins even in the best of times.
What else is happening…
Unity (NYSE:U) to raise $1.3B in IPO, prices 25M shares above range.
New York files civil charges against J&J (NYSE:JNJ) over opioids.
Walmart (NYSE:WMT) hikes pay for about 165,000 hourly employees.
Dave & Buster’s (NASDAQ:PLAY) stumbles on bankruptcy speculation.
Proposed Boeing (NYSE:BA) 737 MAX safety upgrades endorsed by NTSB.
Nat gas tumbles by most in two years after stockpile gain.
Today’s Economic Calendar
8:30 Current Account
10:00 Consumer Sentiment
10:00 Leading Indicators
10:00 Fed’s Bullard: “The Industrial Path to Economic Recovery from Covid-19”
12:00 PM Fed’s Bostic Speech
1:00 PM Baker-Hughes Rig Count
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Good morning. Happy Thursday.
The Asian/Pacific markets closed mostly down. Hong Kong, South Korea, India, Taiwan, Australia, Malaysia and Thailand were all very weak. Europe, Africa and the Middle East are currently mostly down. France, Germany, South Africa, Hungary, Spain, the Netherlands, Italy, Israel, Austria and the Czech Republic are down the most. Futures in the States point towards a relatively big gap down open for the cash market.
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Mini Masterclass in Trading
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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…
Fed reaction
Off their overnight lows, U.S. stock index futures are still down 1% following a session that turned sour yesterday after the big Fed meeting. While the FOMC said interest rates could stay anchored to the zero-bound through 2023 (as the central bank tries to spur inflation), Jerome Powell kept asset purchases at current levels and sounded some alarm bells. “More fiscal support is likely to be needed,” he declared, signaling the Fed can’t rescue the “highly uncertain” economy alone and Congress needs to act quickly on another coronavirus relief package.
Snowflake makes splashy opening debut
Shares of the cloud computing company doubled in value on Wednesday, giving it a market capitalization of more than $70B, well above the $12B it was valued at in February. Why so much excitement? Snowflake’s (NYSE:SNOW) data warehouse, which allows companies to analyze and manage multiple data sources, has massive revenue growth and caught on to the shift towards remote work as a result of the coronavirus pandemic. Concerns? Following yesterday’s wild session, Snowflake’s Price/Sales ratio approached ~190x on a trailing twelve-month basis, and it is very richly valued compared to other cloud businesses. SNOW -5% premarket to $241/share.
Latest on WeChat and TikTok
An approaching ban on Tencent’s (OTCPK:TCEHY) WeChat won’t affect people who use the app to communicate, according to the U.S. government, and such users would not be exposed to “criminal or civil liability.” President Trump targeted WeChat and TikTok (BDNCE) as purported national security threats back in August and imposed a Sept. 20 deadline for the Commerce Department to draft specific measures for blocking “transactions” with the Chinese owners of the apps. With regards to TikTok, Trump said he doesn’t like what he’s heard about the terms of Oracle’s (NYSE:ORCL) bid, but added that he won’t be briefed on the details until later this morning.
Airline industry lobbies for another $25B
Several airline executives are planning to meet White House officials today with only two weeks to go before a ban on industry job cuts is set to expire. Airline CEOs and labor unions want another $25B in federal aid to preserve sector jobs through the end of next March as a recovery in travel demand hasn’t yet materialized. The proposal has won bipartisan support in Congress, and while lawmakers and the White House have yet to reach a deal on a new coronavirus package (that could include another round of relief), President Trump is pushing Republicans to back a bigger stimulus bill.
OPEC+ sizes up production cuts
Dire warnings about oil are prompting OPEC+ producers to convene for an online meeting today, where they will review the market and discuss compliance, though further output cuts are not expected. The energy alliance agreed in July to cut production by 7.7M barrels per day from August through to December, while Iraq and others pledged to pump below their quotas in September to offset overproduction earlier in the year. Already this week, OPEC and the IEA, two prominent forecasters, trimmed their 2020 outlook for crude demand, while oil major BP (NYSE:BP) warned that demand may have peaked in 2019.
One of the largest arms deals to Taiwan
Drawing closer to Taipei amid tensions with China, the U.S. is poised to make a $7B arms deal with Taiwan, WSJ reports. The weaponry would include cruise missiles, mines and other hardware, as well as $400M worth of MQ-9B Reaper drones along with related sensors, logistics, ground control stations, training and other equipment. The $7B deal would be on top of the roughly $15B in arms sold to the country during the Trump administration (arms sales to Taiwan totaled roughly $14B over the course of the Obama administration’s eight years in office).
1,000 warehouses in suburban neighborhoods
Besides rapidly adding planes to its air fleet, Amazon (NASDAQ:AMZN) is planning to open 1,000 delivery hubs in smaller neighborhoods across the U.S., Bloomberg reports. That will bring last mile delivery closer to customers in the suburbs, while the new hubs will eventually grow to 1,500. It comes as Amazon faces increasing pressure in the one-day delivery space with Target (NYSE:TGT) and Walmart (NYSE:WMT) joining the game, and the latter even launching a Prime competitor.
Breaking up is hard to do
A new filing by LVMH (OTCPK:LVMHF) in the Delaware Chancery Court opposes fast-tracking a ruling that would decide whether the French luxury group had proper legal grounds for torpedoing a takeover of Tiffany & Co. (NYSE:TIF). A judge previously set a Sept. 21 hearing (at Tiffany’s request) for an expedited ruling. “If LVMH were confident in its legal position, it would have no reason to oppose an expedited trial schedule,” Tiffany Chairman Roger Farah declared, adding that it was another attempt by the would-be buyer to “run out the clock” on the deal, which has a November 24 deadline.
What else is happening…
Facebook (NASDAQ:FB), New York Times (NYSE:NYT) team up on augmented-reality journalism.
Amazon Music (AMZN) launches podcasts in U.S., U.K., Germany, Japan.
Sony’s (NYSE:SNE) PlayStation 5 coming Nov. 12 at a price of $500.
Eli Lilly (NYSE:LLY) says antibody drug cuts COVID-19 hospitalization.
Moderna (NASDAQ:MRNA) expands cystic fibrosis partnership with Vertex Pharma (NASDAQ:VRTX).
Today’s Economic Calendar
8:30 Initial Jobless Claims
8:30 Housing Starts
8:30 Philly Fed Business Outlook
10:30 EIA Natural Gas Inventory
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
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Good morning. Happy Wednesday.
The Asian/Pacific markets leaned to the upside. Japan, Hong Kong, India, Taiwan, Australia, Malaysia, Singapore and Thailand posted gains; China, Indonesia and the Philippines closed down. Europe, Africa and the Middle East currently lean up, but movement is mostly minimal. Denmark, Finland, Switzerland, the Netherlands and Sweden are up; Hungary and Italy are down. Futures in the States point towards a positive open for the cash market.
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Mini Masterclass in Trading
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The dollar is down. Oil is up; copper is down. Gold and silver are. Bonds are up.
Stories/News from Seeking Alpha…
Snowflake goes public
While 2020 may be the year of the SPAC, the U.S. IPO market is gearing up for its busiest week since May of 2019. Making headlines is data warehouse firm Snowflake (SNOW), which is backed by Warren Buffett (BRK.A, BRK.B) and Salesforce (NYSE:CRM), and will begin trading on the NYSE today at a valuation of almost $33B (shares will be priced at $120). That would make it the biggest deal of the year, as well as the largest software IPO of all time. Also on the calendar this week are the IPOs of software videogame maker Unity Software (U), a direct rival of Epic Games, and packaging company Pactiv Evergreen (PTVE).
No rate hikes until 2024?
Get ready for another Fed-filled session following the recent symposium in Jackson Hole and the first meeting since Chairman Jerome Powell announced a greater tolerance for inflation. While the central bank is expected to keep rates on hold, the “dot plot” is likely to show interest rates will stay close to zero through the end of 2023. The Fed may also note an improved economy, but not celebrate it, and markets are hoping for a more accommodative stance. Bigger questions will touch on the scale and composition of its bond buying, and the Fed’s long-term plan with its $7T balance sheet.
On the way back up
U.S. stock futures are continuing their march higher, now ahead by 0.5%, on the back of broad market gains and solid economic data. August retail sales data will be released at 8:30 a.m., while investors will eye the Fed’s latest policy meeting this afternoon. Meanwhile, House Speaker Nancy Pelosi has signaled the chamber should postpone the planned October recess until lawmakers can strike a bipartisan agreement on a new coronavirus relief bill, though it’s unclear how Congress will be able to break the impasse. Oil is also on the rise again as Hurricane Sally disrupted more than 25% of U.S. offshore oil and gas output and the API showed a big drop in U.S. crude stockpiles.
Taking action against Facebook
Facebook (NASDAQ:FB) may be in for a rough session after Kim Kardashian West, as well as a group of other celebrities, said they would participate in the Stop Hate For Profit movement and “freeze” their Instagram activity for 24 hours. “I can’t sit by and stay silent while these platforms continue to allow the spreading of hate, propaganda and misinformation,” she wrote, encouraging her 188M followers to do the same. Reports also suggest the FTC would challenge Facebook’s dominant position in social media by filing a possible antitrust lawsuit by the end of the year. FB -1.3% premarket.
‘Time Flies’
Instead of an iPhone 12, Apple (NASDAQ:AAPL) yesterday unveiled its latest watch models (some versions don’t need to be paired to a phone) and a refreshed line of mid-range and low-cost iPads. It also talked software at the “Time Flies” event, with iOS 14 now set to be released on Sept. 16. One of the biggest announcements was the long-awaited services bundle. Called Apple One, customers will be able to access iCloud, Apple Music, TV+, Arcade, News+, and Fitness+ for $15/month for individuals or $20/month for families.
No laws were broken
While several governance problems stemmed from Eastman Kodak’s (NYSE:KODK) July announcement of a planned $765M loan from the U.S. government, a special committee hired by the board said none of those issues violated the law. The stock soared before, and after, the announcement – which vaulted the one-time photography giant into drug manufacturing – but quickly turned into a roller coaster ride as shares fell precipitously. Kodak seems to be getting back to its old ways on the news, with the stock up 41% premarket to $8.80/share.
Congressional report blasts Boeing and FAA
The House Committee on Transportation and Infrastructure has released a 238-page filing, in the works for about 18 months, that paints a Boeing (NYSE:BA) that prioritized profits over safety. Numerous design, management and regulatory failures during the development phase of the 737 MAX had preceded the “preventable death” of 346 people in two crashes of the popular jetliner, as well as an FAA that was unable to ensure passenger safety. The report comes as regulators are in the final stretch of recertifying the 737 MAX, which has been grounded worldwide since March 2019. Boeing has also been hit with the coronavirus pandemic that has roiled air travel demand and recently discovered flaws on some 787 Dreamliners.
WTO says tariffs violated trade rules
The U.S. violated international regulation when it imposed tariffs on Chinese goods in 2018, the World Trade Organization said in a ruling that is likely to go nowhere. The U.S. is likely to appeal, which would put the case into a legal void since Washington has already blocked the appointment of judges to the WTO’s appellate body. Any decision would also be the start of a legal process that could take years to play out, and if upheld, would ultimately lead to the WTO approving retaliatory measures by China (a move it has already taken on its own).
What else is happening…
TikTok (BDNCE) plans standalone global company with Oracle (NYSE:ORCL) as minority holder.
Kraft Heinz (NASDAQ:KHC) to sell part of cheese business for $3.2B.
Abe era ends as Yoshihide Suga becomes Japan’s prime minister.
DOJ joins SEC in probing Nikola (NASDAQ:NKLA) fraud claims.
Volkswagen (OTCPK:VWAGY) wraps up compliance monitoring in emissions scandal.
Adjusting to pandemic, Kohl’s (NYSE:KSS) cuts corporate workforce by 15%.
Tuesday’s Key Earnings
Adobe (NASDAQ:ADBE) +1.8% AH logging record quarterly revenues.
FedEx (NYSE:FDX) +8.3% AH as the pandemic drove an e-commerce bounce.
Today’s Economic Calendar
7:00 MBA Mortgage Applications
8:30 Retail Sales
10:00 Business Inventories
10:00 NAHB Housing Market Index
10:00 Atlanta Fed’s Business Inflation Expectations
10:30 EIA Petroleum Inventories
2:00 PM FOMC Announcement
2:30 PM Chairman Press Conference
4:00 PM Treasury International Capital
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Good morning. Happy Tuesday.
The Asian/Pacific markets did well. China, Hong Kong, South Korea, India, Malaysia and Thailand posted solid gains while Japan and Indonesia were weak. Europe, Africa and the Middle East currently mostly up. The UK, Denmark, Russia, Greece, Finland, Norway, Spain, the Netherlands, Italy, Sweden and Saudi Arabia are leading, while Poland and Hungary are down. Futures in the States point towards a moderate gap up open for the cash market.
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List of Indexes and ETFs – here
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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…
‘Time Flies’ at Apple event
Apple (NASDAQ:AAPL) investors and customers today will be watching the company’s annual September iPhone event, which starts at 1 p.m. ET, but probably won’t feature the iPhone at all. Calling it “Time Flies,” the company is likely to reveal its latest watch and an updated iPad, but delay its 5G phone (the most anticipated since 2014). There are also rumblings of a bundled subscription service called “Apple One” that would give users a discount and the ability to manage all their subscriptions in one place. Apple has enjoyed a strong 2020 rally, with shares up 54% on the year, though the stock has pulled back 16% from a Sept. 1 closing high due to a broad tech selloff. AAPL +2% premarket.
Rebound gains steam
U.S. futures are pointing to another green session (Dow +0.6%, S&P 500 +0.7%, Nasdaq +0.9%) after the market kicked off the week with a broad-based rally. The Federal Reserve is set to begin a two-day policy meeting, where it is expected to maintain a dovish stance after earlier saying it will shift to a more relaxed approach on inflation. On the earnings front, Adobe (NASDAQ:ADBE) and FedEx (NYSE:FDX) will report after the closing bell, while Sally is expected to make landfall as a Category 2 hurricane, shutting refineries and crude production.
Sounding the alarm on oil demand
“We expect the recovery in oil demand to decelerate markedly in the second half of 2020,” the IEA wrote in its closely-watched monthly report, adding that “the path ahead is treacherous amid surging COVID-19 cases in many parts of the world.” Global oil demand growth is now seen at 91.7M barrels per day, marking a contraction of 8.4M bpd Y/Y and more than the 8.1M bpd contraction predicted in the agency’s August report. “The economic slowdown will take months to reverse completely, while certain sectors such as aviation are unlikely to return to their pre-pandemic levels of consumption even next year.”
Oracle deal with TikTok under review
Oracle (NYSE:ORCL) has confirmed it is part of a proposal submitted by TikTok parent ByteDance (BDNCE) to the U.S. government in which the American tech company would “serve as the trusted technology provider.” “We will be reviewing that at the CFIUS committee this week and then will be making a recommendation to the president and reviewing it with him,” Treasury Secretary Steven Mnuchin declared. Oracle is expected to work with TikTok to move data on American users to its cloud computing infrastructure and house that information only in the U.S. ORCL +1.3% premarket.
Nikola shares go on wild ride
After days of volatile trading, the SEC is examining the merits of short-seller Hindenburg’s allegations that Nikola (NASDAQ:NKLA) deceived investors about its business prospects, Bloomberg reports. On Monday, the electric-truck maker refuted the accusations, saying Hindenburg was attempting to profit from a “manufactured decline” in the company’s share price. Shares of Nikola rebounded more than 11% yesterday, but the stock is down nearly 8% to $33 in premarket trade.
Caffeine giant has a sleepy plan
A new wellness product from PepsiCo (NASDAQ:PEP), called Driftwell, is aimed at improving sleep quality. The enhanced water drink will contain L-theanine, an amino acid that is also found in green and black teas and some mushrooms, as well as 10% of the recommended daily allowance of magnesium. The product, which won’t have sugar or calories, was conceived by Pepsi employees as part of an internal contest, and will be distributed in grocery stores by early 2021.
Brexit bill clears first hurdle
Brexit tensions are escalating as the U.K. House of Commons passed the Internal Market Bill by a comfortable 77 votes, sending it to the next stage in the parliamentary process. The measure would override key elements of the divorce treaty signed with the EU, but Prime Minister Johnson maintains that it is necessary because the bloc had refused to take a “revolver off the table” in trade talks. He noted the “absurd” threats from Brussels that risked U.K. unity, including putting up trade barriers between Britain and Northern Ireland and imposing a food blockade.
Singapore popularity
China’s Tencent (OTCPK:TCEHY) has picked Singapore as its beachhead for Asia, according to Bloomberg, as it considers the shift of some business operations, including international game publishing, out of its home country. Southeast Asia has become a key battlefield after the U.S. had issued an executive order banning transactions with Tencent and India banned its games PUBG Mobile and Arena of Valor. TikTok parent ByteDance (BDNCE) is reportedly planning to spend several billions of dollars and add hundreds of jobs over the next three years in Singapore, while Alibaba (NYSE:BABA) is said to be in talks to invest $3B into Singapore’s ride-hailing giant Grab.
What else is happening…
Citigroup (NYSE:C) to resume job cuts, reversing ground on planned pause.
AstraZeneca (NYSE:AZN) COVID-19 vaccine trial in U.S. on hold.
UBS examines election impacts on communications/media names.
Fiat Chrysler (NYSE:FCAU) chops dividend ahead of Peugeot merger.
Hummer EV (NYSE:GM) will be unveiled with ‘Crab Mode’ in October.
Sony (NYSE:SNE) slashes PlayStation 5 outlook due to chip issues – CNBC.
Monday’s Key Earnings
Lennar (NYSE:LEN) -4.2% AH seeing average sales price down in Q4.
Today’s Economic Calendar
FOMC meeting begins
8:30 Empire State Mfg Survey
8:30 Import/Export Prices
8:55 Redbook Chain Store Sales
9:15 Industrial Production
1:00 PM Results of $22B, 20-Year Bond Auction
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Good morning. Happy Monday. Hope you had a good weekend.
The Asian/Pacific markets closed mostly up. Japan, China, Hong Kong, South Korea, Taiwan, Australia and India led. Europe, Africa and the Middle East currently lean up, but gains are small. Greece is up 3%; Israel is up 1%; Spain and Saudi Arabia are up 0.5%. Nothing else is up much. Futures in the States point towards a moderate gap up open for the cash market.
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VIDEO: A Quick Glance at the Leaders
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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…
Merger Monday
U.S. stock index futures are shooting for a comeback after the tech-heavy Nasdaq ended its worst week since March. The Dow is pointing to a 250-point advance, while contracts tied to the S&P 500 and Nasdaq 100 are up 1.2% and 1.7%, respectively. A series of deals are boosting sentiment: Gilead (NASDAQ:GILD) reached a $21B agreement to acquire Immunomedics (NASDAQ:IMMU), Nvidia (NASDAQ:NVDA) is paying $40B to buy Arm Holdings from Japan’s SoftBank (OTCPK:SFTBY) and Oracle (NYSE:ORCL) may be taking over TikTok’s (BDNCE) U.S. operations (see below). On the coronavirus front, Pfizer (NYSE:PFE) said its coronavirus vaccine could be distributed to Americans before the end of the year, while AstraZeneca (NYSE:AZN) restarted Phase 3 trials in the U.K.
Acquisition details
The dealmaking continues as Nvidia (NVDA) agreed to buy SoftBank’s (OTCPK:SFTBY) chip division Arm for $40B in cash and stock, in a deal that could have wide-ranging implications for the global semiconductor industry. Gilead Sciences (GILD) also said it would acquire biotech company Immunomedics (IMMU) in a $21B deal that will expand its availability of cancer treatments through innovative drug Trodelvy, an FDA-approved treatment for metastatic triple-negative breast cancer. The therapy could ring up $3B-$5B a year in annual sales if it proves to work safely against other cancers, Jefferies & Co. analyst Michael Yee said in a research note. NVDA +6%; IMMU +105% premarket.
The clock ticks down
Mixed reports overnight suggested that Oracle (ORCL) may be the suitor in line to acquire TikTok’s U.S. operations, though any deal would be structured as a partnership and not an outright sale. That follows Microsoft’s (NASDAQ:MSFT) statement that it (along with Walmart (NYSE:WMT)) has been rejected by TikTok owner ByteDance (BDNCE) as a buyer. There’s only a few more days until a September 15 deadline imposed by President Trump to prevent a TikTok shutdown. Any deal would also have to receive approval from the Chinese government, which recently outlined a series of technologies that are subject to export bans or restrictions.
Oil demand may never be the same
BP (NYSE:BP) has become the first oil major to call the end of an era many thought would last another decade or more, saying the relentless growth of oil demand is over in its latest energy outlook. Oil consumption may never return to levels seen before the coronavirus crisis took hold and even the firm’s most bullish scenario sees demand no better than “broadly flat” for the next two decades as the world moves away from fossil fuels. The forecast helps explain why BP has recently said it would shrink oil and gas output by 40% over the next decade and spend as much as $5B a year building one of the world’s largest renewable-power businesses.
Sally set to become hurricane
Gulf of Mexico oil producers like Chevron (NYSE:CVX) and Murphy Oil (NYSE:MUR) have evacuated offshore facilities ahead of the anticipated arrival of tropical storm Sally, which is forecast to strengthen into a hurricane. “That system is forecast to bring not only damaging winds but a dangerous storm surge,” said Daniel Brown of the Hurricane Center, warning of storm surge stretching from Morgan City, Louisiana, to Ocean Springs, Mississippi. At least 1.3M bbl/day of oil production was already shut last month as Hurricane Laura ripped through the Gulf of Mexico and the southwest Louisiana coast.
Abenomics here to stay
Yoshihide Suga, Shinzo Abe’s right-hand man for nearly eight years, has been elected president of Japan’s ruling Liberal Democratic Party, making him all but certain to become prime minister of the world’s third-largest economy later this week. “We cannot have any void in policy,” Suga said after the vote, adding to statements that he would want to enhance Abenomics, as well keep Bank of Japan Governor Haruhiko Kuroda’s ultra-easy monetary policy. Should he be elected by parliament, Suga can stay in office until September 2021, when the party will hold another leadership election.
Second wave, second lockdown
Israel’s cabinet has voted to impose a second nationwide lockdown starting Friday, becoming the only developed country to shut down again. Infections have surged ninefold and deaths have quadrupled since late May, while nearly one-fifth of the labor force remains out of work even though most of the economy has been open for months. Other countries dealing with new record infection rates are watching the three-week lockdown closely, which will coincide with a major Jewish holiday season.
Amazon’s latest job spree
Amazon (NASDAQ:AMZN) is hiring 100,000 full and part-time employees across the U.S. and Canada to help pack, ship or sort orders, marking the e-commerce behemoth’s fourth hiring spree this year. The new jobs include benefits and sign-on bonuses of as much as $1,000 in select cities, as well as starting wages of at least $15 an hour. The company already had to hire 175,000 people earlier this year to keep up with the rush of orders, and last week said it had 33,000 corporate and tech jobs it needed to fill.
Gyms are still struggling
Grappling with heavy debt loads even before COVID-19 shuttered the global economy, Town Sports International (NASDAQ:CLUB), the owner of the New York Sports Clubs chain, has filed for Chapter 11 bankruptcy protection in the District of Delaware. The move allows the company, which has around 600K members, to keep operating while it works out a plan to pay creditors and turn the business around. It’s not the only one that has fallen on hard times. Gold’s Gym sought court protection from its creditors in May, while 24 Hour Fitness Worldwide filed for bankruptcy in June.
What else is happening…
BlackRock (NYSE:BLK) and Vanguard poised to dominate active ETF space.
Snowflake (SNOW) heading for blockbuster IPO with Berkshire (BRK.A, BRK.B) backing.
ViacomCBS (NASDAQ:VIAC) set to sell CNET to Red Ventures for $500M.
Cord-cutting isn’t slowing, as households shed high-dollar packages.
Streaming music revenues may rise by $1B-plus in 2020.
737 MAX crisis: Boeing (NYSE:BA) design flaws vs. pilot mistakes.
Today’s Economic Calendar
No events scheduled
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I think we bottom today. I was reviewing 5 min charts from September last year to October 2 bottom. I reviewed other bottoms as well as my trading logs. I say buy. This market DOES have the potential to crash further this week but my formulas say most likely not. Even if we do not bottom today I believe we will be significantly higher in a month.