Good morning. Happy Friday.
The Asian/Pacific markets did well. Japan, India, New Zealand, Australia, Indonesia and Singapore posted solid gains; Hong Kong was weak. Europe, Africa and the Middle East are currently mostly down. France, Germany, the UAE, Russia, South Africa, Spain, Italy, Portugal, Israel and Austria are down 0.9% or more. Futures in the States point towards a down open for the cash market.
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VIDEO: State of Market Breadth
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The dollar is up. Oil and copper are down. Gold and silver are down. Bonds are up.
Stories/News from Seeking Alpha…
Restarting relief negotiations
“The president and I want more support,” Treasury Secretary Steven Mnuchin told the Senate Banking Committee. “I’ve probably spoken to Speaker Pelosi 15 or 20 times in the last few days on coronavirus relief, and we’ve agreed to continue to have discussions about the CARES Act.” “We will be hopefully soon to the table with them, very soon, showing you where our money wouldn’t be spent,” Pelosi added. House Democrats are now preparing a new, smaller coronavirus relief package expected to cost about $2.4T (down from $3.5T), according to Politico, which would include enhanced unemployment insurance, direct payments to Americans, Paycheck Protection Program small business loan funding and aid to airlines and restaurants.
Last session of rollercoaster week
Closing higher yesterday after a wobbly session, U.S. equity futures dropped nearly 1% overnight, with the S&P 500 on course for a fourth consecutive week of losses. The economic calendar is light today with only durable goods due to be published at 8:30 a.m. ET, on the back of weak jobless claims data seen Thursday. Most of the market focus appears to be on breakthroughs in stimulus talks after Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi confirmed discussions. COVID-19 cases are meanwhile growing across the U.S., with infections rising in 22 states over the past week. The U.S. is now averaging roughly 43,000 new cases per day, a 16% increase from a week ago (testing is up by almost 22% over the same period).
DOJ asks judge to allow WeChat ban to proceed
The U.S. Justice Department has asked U.S. Magistrate Judge Laurel Beeler to stay an injunction blocking a ban on Tencent’s (OTCPK:TCEHY) WeChat, arguing the Chinese-owned messaging app jeopardizes national security. “The WeChat mobile application collects and transmits sensitive personal information on U.S. persons, which is accessible to Tencent and stored in data centers in China and Canada,” the DOJ wrote in the filing. On Wednesday, TikTok (BDNCE) sought a similar preliminary injunction from a U.S. judge in Washington. He gave the government until at 2:30 p.m. today to respond to the request or delay the U.S. app store ban on new TikTok downloads (set to take effect Sunday).
Tax fight is not over yet
The European Commission is taking its case against Apple (NASDAQ:AAPL) to the highest court in Europe, appealing an EU general court decision from July that ruled in favor of Ireland and the tech giant. Seeking to crack down on “sweetheart tax deals,” the Commission sparked the case by ordering Apple to pay $14.4B in back taxes (that have been held in escrow while appeals process plays out). The EC now intends to argue that the court set the bar for requisite standards “unreasonably high,” a precedent that will be specifically watched given the EU’s drive to create new tax laws governing major technology companies.
More vaccine talk
Dr. Anthony Fauci took to Facebook Live on Thursday to assuage increasing concerns about a politicized approval process for a potential coronavirus vaccine. “People are always saying, ‘How do I know it’s safe? How do I know it’s effective? There’s a lot of confusion because there are mixed messages that are coming,” he declared. With every vaccine trial, there is an independent group of scientists, vaccinologists, ethicists and statisticians – known as a data and safety monitoring board – that has exclusive access to the data from a vaccine’s clinical trial. If a vaccine proves safe and effective, the company can then seek approval from the FDA and the data will eventually become publicly available.
New York will conduct separate review
“The people of this country don’t trust this federal government with this vaccine process,” New York Gov. Andrew Cuomo later said in a press briefing, saying his state would set up its own independent task force to approve a COVID-19 vaccine. President Trump related earlier that the White House may overrule stricter FDA guidelines for emergency-use authorization of a vaccine, while HHS Secretary Alex Azar revealed all six frontrunning vaccines were being produced at an industrial scale. Over in Europe, AstraZeneca (NYSE:AZN) received partial immunity in a low-cost EU vaccine deal, while in return for a higher price paid for its vaccine, Sanofi (NASDAQ:SNY) – which is working with GlaxoSmithKline (NYSE:GSK) – did not get any liability waivers.
End to cigarettes
“With the right regulatory encouragement and support from civil society, we believe cigarette sales can end within 10 to 15 years in many countries,” declared Philip Morris (NYSE:PM) CEO André Calantzopoulos, speaking at the Concordia Annual Summit. “Yes, that’s right,” he added. “An end to cigarettes within 10 to 15 years in many countries.” Calling cigarettes “the most harmful way of consuming nicotine,” Calantzopoulos would prefer focus on products “that do not involve combustion.” Over 11.2M people, he said, have switched to his company’s IQOS and stopped smoking.
Amazon hardware event
Amazon (NASDAQ:AMZN) showed off a host of new devices at its online hardware event on Thursday, including spherical Alexa speakers and two new Fire TV products. Plans to jump into the increasingly crowded game streaming space were also unveiled. The platform, called Luna, works on Fire TV, Mac, mobile devices, and PCs. In drone news, Amazon’s Ring showed off an autonomous indoor security camera (called Always Home Cam) that can fly around a house and automatically respond to security alarms.
What else is happening…
Amid surging food delivery demand, Deliveroo eyes IPO for 2021.
Airbus (OTCPK:EADSY) holds production stable in face of crisis warnings – Reuters.
CEOs of Google (GOOG, GOOGL), Facebook (NASDAQ:FB), Twitter (NYSE:TWTR) subpoenaed over Section 230.
Amazon (AMZN) hires former Yahoo, Slack privacy head for Alexa effort – BI.
Banks file record number of suspected business loan fraud reports in August.
Thursday’s Key Earnings
BlackBerry (NYSE:BB) -1% despite higher software, licensing demand.
Costco (NASDAQ:COST) -2.9% AH even with comp sales rising 14.1% .
Rite Aid (NYSE:RAD) -17.8% giving back guidance-driven gains.
Today’s Economic Calendar
8:30 Durable Goods
9:00 Fed’s Williams Speech
1:00 PM Baker-Hughes Rig Count
3:10 PM Fed’s Williams: “Young Adult Perspectives on COVID-19 Job Market”
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Good morning. Happy Thursday.
The Asian/Pacific markets suffered stiff losses. Japan, China, Hong Kong, South Korea, India, Taiwan, Indonesia, Singapore and Thailand each dropped at least 1%. Europe, Africa and the Middle East are currently mostly down. The UK, Denmark, Poland, the UAE, Russia, Finland, Switzerland, Norway, Hungary, the Netherlands and Israel led to the downside. Futures in the States moderate gap down open for the cash market.
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VIDEO: State of Market Breadth
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The dollar is up. Oil and copper are down. Gold and silver are down. Bonds are up.
Stories/News from Seeking Alpha…
Tensions build over vaccine rules
Recent reports have suggested the FDA was considering stricter guidelines for emergency-use authorization of a coronavirus vaccine, though the White House may not approve of them. “It sounds like a political move,” President Trump said at a press conference. “When you have Pfizer (NYSE:PFE), Johnson & Johnson (NYSE:JNJ) and Moderna (NASDAQ:MRNA) – these great companies coming up with vaccines – and they have done testing and everything else, why would the the FDA have to add great length to the process?” “Decisions to authorize or approve any such vaccine or therapeutic will be made by the dedicated career staff at FDA… and science will guide our decisions,” Dr. Stephen Hahn, the commissioner of the FDA, told the Senate Health Committee on Wednesday.
Volatile moves
Market volatility is not going away as Wall Street experienced more whiplash on Wednesday, with stocks closing broadly lower and futures pointing lower overnight. Today, the Labor Department is expected to say the number of jobless claims declined to 840K last week – down 20K from the previous week’s tally – and the lowest reading since March 14 (right before the coronavirus lockdowns). That may not be enough for investors, who have largely given up on the idea that Congress will approve a fresh COVID-19 stimulus package.
U.S. junk bonds set annual sales record
U.S. high-yield bond issuance for 2020 has eclipsed the prior annual sales record of $329.6B set in 2012, according to data compiled by Bloomberg, as companies reap the benefits of the Fed’s liquidity-boosting and zero-interest rate policies. The support has effectively turned the industry into a borrower’s market, and all-in yields for U.S. junk bonds have dropped to 5.81%, near pre-pandemic levels. Jitters may be coming… The biggest ETF focused on sub-investment grade debt, the iShares High Yield Corporate Bond (NYSEARCA:HYG), was hit by nearly $1.06B of outflows on Monday, the largest single-day outflow since the start of the coronavirus.
Immunity curbs for internet companies
Moving the ball on initiatives the Trump administration outlined this summer, the Justice Department has submitted its take on pulling back longtime legal protections for internet companies. The proposed changes to Section 230 legal immunity would force social media giants including Facebook (FB), Google (GOOG, GOOGL) and Twitter (NYSE:TWTR) to take more responsibility for managing content on their sites. Any legislation is unlikely to move forward during a contentious election season, but it could be taken up next year, as representatives from both parties have indicated a willingness to revisit and update the legal protections.
Content controversy
After inking a deal yesterday with the World Federation of Advertisers on posting statements, Big Tech is stepping up its efforts to tackle disputed content, an effort applauded by some and opposed by others. YouTube (GOOG, GOOGL) is expanding its fact-checking feature for video searches to Europe, displaying information and links from third-party publishers on queries related to issues like elections and the coronavirus pandemic. Meanwhile, Facebook (NASDAQ:FB) will reportedly launch its “Supreme Court”-style oversight board ahead of the U.S. election amid rising criticism for its perceived failure to confront hateful and divisive speech.
TikTok files for injunction to stop app ban
Dealing with contradictory statements on who will eventually own TikTok Global, the video-sharing app is also running against the clock. On Wednesday, TikTok filed a preliminary injunction seeking to stop the Commerce Department from banning it from the App Store and Google Play from Sunday. TikTok parent ByteDance (BDNCE) has also applied for an export license from Chinese regulators as it pushes for a deal with Oracle (NYSE:ORCL) and Walmart (NYSE:WMT) to avoid a shutdown in the U.S.
Record spoofing fine
JPMorgan Chase (NYSE:JPM) is poised to pay almost $1B, in what would be a record penalty for an investigation into so-called spoofing of metals futures and Treasury securities, Bloomberg reports. It’s also expected that JPMorgan will admit to wrongdoing, an admission many companies generally avoid when settling charges that they violated securities laws. Spoofing usually entails flooding derivatives markets with orders that traders don’t intend to execute to deceive others into moving prices in a desired direction.
Some electrifying news
California Governor Gavin Newsom announced an order to ban gasoline-powered cars in the state by 2035, meaning all new cars sold in the state must be zero-emission vehicles by that time. Major automakers are making such an electrification push that the 15-year timeline may not be too much of a jolt. Seventeen countries including France, the U.K. and Germany have also adopted goals to phase out the internal combustion engine, according to the International Council on Clean Transportation.
Record for reusable rockets
Blue Origin (BORGN), the space outfit founded by Jeff Bezos, is planning to make its 13th trip to space this morning (11 a.m. ET) to test technologies for future moon missions as part of NASA’s Artemis program. The company will be using its New Shepard rocket that will be flying for the seventh time, setting a record for rocket recycling. SpaceX (SPACE), the commercial space firm headed by Elon Musk, has so far used a single Falcon 9 booster up to six times (a record set last month), though it’s worth noting that the Falcon 9 is a different class of rocket used for more technically complicated orbital missions.
What else is happening…
Tesla (NASDAQ:TSLA) network goes down along with the stock.
Nikola (NASDAQ:NKLA) under fire again as Wedbush turns bearish.
Accelerating global pullback, WeWork (WE) sells control of China unit.
Following Delta (NYSE:DAL), United (NASDAQ:UAL) will delay pilot furlough action.
Gilead Sciences (NASDAQ:GILD) to pay $97M to settle U.S. kickback probe.
Today’s Economic Calendar
8:30 Initial Jobless Claims
8:50 Fed’s Kaplan Speech
10:00 New Home Sales
10:00 Powell Testifies Before the Senate Banking Committee
10:30 EIA Natural Gas Inventory
11:00 Kansas City Fed Mfg Survey
12:00 PM Fed’s Bullard: U.S. Economy and Monetary Policy
1:00 PM Results of $50B, 7-Year Note Auction
1:00 PM Fed’s Evans: Economic Conditions and Monetary Policy
1:00 PM Fed’s Barkin Speech
2:00 PM Fed’s Bostic Speech
2:00 PM Fed’s Barkin Speech
2:00 PM Fed’s Williams Speech
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
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Good morning. Happy Wednesday.
The Asian/Pacific markets were mixed. China, New Zealand, Australia and Singapore posted gains; Taiwan, Malaysia and Thailand posted losses. Europe, Africa and the Middle East are currently mostly up. The UK, France, Germany, Russia, South Africa, Spain, the Netherlands and Italy are each up more than 1%; Israel is down 1%. Futures in the States point to a positive open for the cash market.
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VIDEO: State of Market Breadth
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The dollar is up. Oil is up; copper is down. Gold is up; silver is donw. Bonds are down.
Stories/News from Seeking Alpha…
Markets snap losing streak
U.S. stocks look set to climb again, with Dow futures up 0.7% and S&P 500/Nasdaq futures ahead by 0.5%, after a bout of volatility that had tested the market’s monthslong rebound. Better-than-expected earnings from Nike (NYSE:NKE) lifted sentiment after the bell on Tuesday, with the sneaker giant seeing digital sales grow 82%, driving shares up 13% AH. In Washington, Jerome Powell and Steven Mnuchin urged more spending to help the economy recover from COVID-19, and the Fed Chair will head back to Capitol Hill today to testify about the government’s pandemic response. President Trump also confirmed the U.S. would not impose a lockdown to curb the spread of the coronavirus after Boris Johnson walked back some eased restrictions in the U.K.
Avoiding a government shutdown
The House passed a short-term spending bill Tuesday night in a 359-57 vote, which would keep the government funded through Dec. 11. In addition to funding most government agencies, the measure would add back dropped farm payments (sought by the Trump administration) in return for expanded nutrition assistance for low-income households (sought by the Democrats). Lawmakers have said they want to get past the shutdown threat to focus on passing more coronavirus relief, which they have failed to do for months amid disagreements over the size and scope of a fifth stimulus package.
Stricter vaccine standards
Tougher FDA standards for emergency use authorization of a COVID-19 vaccine will extend the review timeline and make it unlikely that a nod could happen by election day, The Washington Post reports. The agency is tightening the criteria to boost transparency and public trust amid perceptions that the review process is being politicized. Just over 50% of people would get the vaccine if it was available today, down from 72% in May, according to Pew Research Center.
Promises of battery breakthroughs
At its Battery Day event, Tesla (NASDAQ:TSLA) promised a $25,000 car (with full autonomy), as well as plans to halve the cost of batteries, but the three year timeline disappointed investors. Shares stumbled nearly 7% in AH trading after initially turning higher following the company’s 2020 shareholder meeting. Elon Musk also forecast eventual annual production of 20M vehicles, or almost twice as many as output leader Volkswagen (OTCPK:VWAGY) sold last year. “One of the things that troubles me the most is that we don’t yet have a truly affordable car… in order to do that, we’ve got to get the cost of batteries down.”
Apple launches first online store in India
The launch marks a new chapter in Apple’s (NASDAQ:AAPL) business in India, where about 99% of the market is dominated by Android. Nearly the entire Apple lineup, including new products announced last week, will be offered directly to customers for the first time (users had to previously buy items from Amazon India, Flipkart or authorized franchises). India is becoming increasingly important for Apple. In recent years, the tech giant has started manufacturing some of its devices in the country – Foxconn began building the iPhone 11 near Chennai in July, while the company has made other iPhone models in India since as early as 2017.
Latest Peloton challenger burns out
Peloton (NASDAQ:PTON) shares fell as much as 6% on Tuesday after Echelon announced an EX-Prime Smart Connect Bike that was developed “in collaboration with Amazon (NASDAQ:AMZN).” The machine was listed on Amazon’s website for $499, a steep discount to machines offered by Peloton, but has since been listed as “currently unavailable.” “This bike is not an Amazon product or related to Amazon Prime,” a spokeswoman wrote by email. “Echelon does not have a formal partnership with Amazon. We are working with Echelon to clarify this in its communications, stop the sale of the product, and change the product branding.” PTON +1.7% premarket.
Market making competition
The shift to zero-fee trading has not only upended the brokerage industry, but also the market makers, which do the buying and selling of financial instruments via a bid-ask spread. The latest? Citigroup (NYSE:C) has closed its market making business in retail options as it was “unable to compete in a technology arms race to be among the fastest and most reliable,” FT reports. The decision leaves Morgan Stanley (NYSE:MS) as the sole major Wall Street bank in the sector, which is dominated by other market makers like Citadel Securities, Susquehanna, Simplex Trading and Optiver.
Social media advertising
Back at the start of the summer – at the height of the George Floyd protests – more than 200 companies pulled their advertising from Facebook (NASDAQ:FB), citing problems with hate speech and aggressive content. The #StopHateforProfit campaign then picked up steam with celebrities, like Kim Kardashian West, though a truce now appears to be in the making. The World Federation of Advertisers has helped negotiate a deal on posting statements, which sets some ground rules on what counts as hate speech and empowers external auditors to oversee the new system. The reporting standards, as well as tools to custom tailor ad placement, are set to launch in the second half of 2021 and will also incorporate platforms like YouTube (GOOG, GOOGL) and Twitter (NYSE:TWTR).
What else is happening…
Amazon (AMZN) signals Prime Day will start Oct. 13.
Palantir (PLTR) expects 42% revenue growth this year to $1.06B.
Nikola (NASDAQ:NKLA) CFO says company has support from all its auto partners.
Hong Kong Disneyland (NYSE:DIS) is set to reopen this weekend.
3M (NYSE:MMM) explores $3.5B sale of food safety business – Bloomberg.
Is gold really a safe haven? Recent track record should give pause.
Tuesday’s Key Earnings
KB Home (NYSE:KBH) +2.3% AH on strengthening net order growth.
Nike (NKE) +13.4% AH as digital sales rose 82%.
Today’s Economic Calendar
7:00 MBA Mortgage Applications
9:00 Fed’s Mester Speech
9:00 FHFA House Price Index
9:45 PMI Composite Flash
10:00 Powell Testifies Before the House Select Subcommittee
10:30 EIA Petroleum Inventories
11:00 Fed’s Evans: Economic Outlook
11:30 Results of $22B, 2-Year FRN Auction
12:00 PM Fed’s Rosengren Speech
1:00 PM Results of $53B, 5-Year Note Auction
1:00 PM Fed’s Bostic Speech
1:00 PM Fed’s Kashkari Speech
3:00 PM Fed’s Daly Speech
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Good morning. Happy Tuesday.
The Asian/Pacific markets closed mostly down. New Zealand posted a gain, but China, Hong Kong, South Korea, India, Taiwan, Indonesia, Singapore and Thailand were weak. Europe, Africa and the Middle East currently lean up. The UK, Poland, Germany, Russia, Finland, Norway, the Netherlands, Italy and Austria are leading. Futures in the States point to a flat open for the cash market.
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Mini Masterclass in Trading
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The dollar is flat. Oil and copper are up. Gold is up; silver is down. Bonds are down.
Stories/News from Seeking Alpha…
Tesla’s Battery Day event
One of biggest events of the week is Tesla’s (NASDAQ:TSLA) highly anticipated “Battery Day,” which is expected to showcase innovations designed to keep the company’s lead in electric vehicles. There is talk about a “million-mile battery” (before it can’t hold a charge), as well as improved cell performance and cost savings, while other advances could see Tesla dominate additional industries reliant on energy storage. Bad news first? Tesla shares are off 3% premarket after Elon Musk tweeted “what we announce [today] will not reach serious high-volume production until 2022.”
Tech tries to find footing after latest selloff
Nasdaq futures climbed 0.6% in overnight trading, while contracts tied to the Dow and S&P largely hugged the flatline, after global stocks hit the skids on Monday. There’s quite a lot of nerves about the economic recovery amid a new set of lockdown restrictions in Europe, while Fed Chair Jay Powell kicks off a three-day testimony before Congress (see both below). Earnings also resume today as Nike (NYSE:NKE) reports its fiscal first-quarter results after the closing bell. Can markets break the September selloff cycle? Since 1937, the S&P 500 has declined 1% over the month, on average, while the Nasdaq Composite has seen an average fall of 0.5%.
‘Path forward depends on policy actions’
Jerome Powell is set to testify with Treasury Secretary Steven Mnuchin today before the House Financial Services Committee as part of a three-day testimony to Congress over the response to COVID-19. “Many economic indicators show marked improvement,” the Fed Chair said in prepared remarks. “Both employment and overall economic activity, however, remain well below their pre-pandemic levels, and the path ahead continues to be highly uncertain. The path forward will depend on keeping the virus under control, and on policy actions taken at all levels of government.”
Global vaccine plan gains momentum, U.S. not on board
An $18B initiative to ensure any future vaccine against COVID-19 is fairly shared throughout the world has secured the backing of 156 countries and territories, representing about 64% of the global population. Notably absent was the United States, which cited the involvement of the WHO for its lack of participation (it plans to withdraw from the organization by next July). Russia and China, which have both already issued emergency use licenses for COVID-19 vaccines, were also not on the list. The goal of COVID-19 Vaccines Global Access Facility, or COVAX, is to have 2B doses available by the end of 2021, while participating territories will be able to hedge themselves against the failure of any individual candidate.
U.K. recommends work from home
Just weeks after urging people to start returning to work, U.K. Prime Minister Boris Johnson called for people to work from home “if possible” and ordered all hospitality sites across England to start closing at 10 p.m. from Thursday. More than £50B was wiped off the value of U.K. shares on Monday in anticipation of the move, with travel firms, pubs and airlines among the worst hit. There are also fears of broader restrictions as new coronavirus infections swell across Europe. Madrid has asked the Spanish army for help in battling the recent surge, while the number of daily new coronavirus cases in the Netherlands topped 2,000 for the first time.
Deeper dive into the WFH model
Netflix (NASDAQ:NFLX) CEO Reed Hastings recently called remote work “a pure negative” and JPMorgan’s (NYSE:JPM) Jamie Dimon warned of “a lot more damage by people staying home,” but not everyone is seeing WFH in that light. Apple (NASDAQ:AAPL) CEO Tim Cook doesn’t believe the company will “return to the way we were because we’ve found that there are some things that actually work really well virtually.” In fact, Apple has created products including new Apple Watches and iPads that are launching on time this year, despite the need for most employees to work away from the office due to COVID-19. He still notes that remote work is “not like being together physically” and that impromptu meetings in the office could spark creativity.
Conflicting deal structure could threaten Oracle-TikTok takeover
While TikTok parent ByteDance (BDNCE) has said it will own 80% of new entity TikTok Global, Oracle (NYSE:ORCL) and Walmart (NYSE:WMT) have together declared ByteDance’s ownership would be distributed to its U.S.-based investors and ByteDance itself would have no direct stake. President Trump did not comment on the conflicting accounts, but said the deal was “working its way through” and he wouldn’t approve the transaction if ByteDance retains control of TikTok Global. “If we can save (TikTok), we will save it, and if we can’t we will cut it off. We have to have total security,” he told reporters.
Tiffany, LVMH will go to trial in January
A Delaware judge has expedited the trial date for Tiffany’s (NYSE:TIF) lawsuit against LVMH (OTCPK:LVMHF), which backed out of a $16.2B takeover of the U.S. jeweler earlier this month. “We appreciate the court’s ruling today to expedite the process,” said Tiffany Chairman Roger Farah. “A trial on Jan. 5, 2021, will hopefully lead to a ruling prior to the expiration of U.S. antitrust clearance on Feb. 3, 2021, and enable us to protect our company and our shareholders.” LVMH has argued that a “material adverse effect” from the pandemic had hurt Tiffany’s business, while it couldn’t complete the deal by the November closing date for fear of getting in the middle of a U.S.-France trade war.
What else is happening…
Nikola (NASDAQ:NKLA) details terms of Milton’s split from the board.
Uber (NYSE:UBER) investors push for new self-driving strategy – Bloomberg.
DOJ ready to brief state AGs on Google (GOOG, GOOGL) antitrust suit – WaPo.
Cisco (NASDAQ:CSCO) likely to appear on potential Chinese blacklist of U.S. firms – WSJ.
Activist Trian takes $870M stake in Comcast (NASDAQ:CMCSA).
American Airlines (NASDAQ:AAL) sets pilot training plans for 737 MAX return.
Today’s Economic Calendar
8:55 Redbook Chain Stores Sales
10:00 Existing Home Sales
10:00 Fed’s Evans: Economic Outlook
10:00 Richmond Fed Mfg.
10:30 Powell Testifies Before the House Financial Services Committee
12:00 PM Fed’s Barkin Speech
1:00 PM Results of $52B, 2-Year Note Auction
3:00 PM Fed’s Bostic: “Cash-Based Consumers and the Digital Economy”
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Good morning. Happy Monday. Hope you had a good weekend.
The Asian/Pacific markets closed mostly down. China, Hong Kong, South Korea, India, New Zealand, Taiwan, Australia, Indonesia and Thailand all suffered stiff losses. Europe, Africa and the Middle East are currently down big. The UK, Denmark, Poland, France, Germany, the UAE, Russia, Greece, South Africa, Finland, Sweden, Norway, Hungary, Spain, the Netherlands, Italy, Portugal, Austria, Switzerland and the Czech Republic are each down at least 1%. Futures in the States point towards a big gap down for the cash market.
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VIDEO: Leaders are at Key Levels
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The dollar is up. Oil and copper are down. Gold and silver are down. Bonds are up.
Stories/News from Seeking Alpha…
Nikola in the spotlight after founder resigns
Nikola (NASDAQ:NKLA) shares tumbled 30% in premarket trade after founder Trevor Milton stepped down as executive chairman and member of the company’s board, adding that he would defend himself against “false allegations leveled by outside detractors.” The resignation comes in the wake of claims made by short-seller Hindenburg Research, who described Nikola as a “an intricate fraud built on dozens of lies,” as well as reported SEC and DOJ investigations into the company. The news could also spell trouble for General Motors (NYSE:GM), which recently took an 11% stake in Nikola and said it would produce its marquee hydrogen fuel cell electric pickup truck called the Badger.
More pain for stocks
Things aren’t looking brighter for U.S. equities following Wall Street’s third straight weekly decline, with Dow futures down 2.1% and contracts tied to the S&P 500 and Nasdaq off 1.9%. Little progress has been made on a new coronavirus stimulus package as Republicans and Democrats remain at an impasse, while the negotiations could become even more complicated following the death of Supreme Court Justice Ruth Bader Ginsburg. Investors also appear worried that a global recovery could be hampered by a rise in coronavirus infections, especially with no vaccine breakthrough yet.
Oracle deal for TikTok scores Trump’s ‘blessing’
Oracle (NYSE:ORCL) has reached a deal with China’s ByteDance (BDNCE) to host video-sharing app TikTok and take a minority stake in the company along with Walmart (NYSE:WMT). “I have given the deal my blessing,” President Trump declared, adding that new unit TikTok Global would create more than 25,000 new jobs in the U.S. and pay more than $5B in new tax dollars to the Treasury. Meanwhile, Tencent’s (OTCPK:TCEHY) WeChat is set to remain operating in the U.S. after a federal judge issued an injunction against Trump’s executive order that would have banned the Chinese social media app.
Musk rallies the troops before ‘Battery Day’
“We have a shot at a record quarter for vehicle deliveries, but will have to rally hard to achieve it,” said Tesla’s (NASDAQ:TSLA) Elon Musk in an internal email entitled ‘All hands on deck!’ Tesla hopes to deliver half a million vehicles in 2020, and has delivered roughly 179,000 through the first half. The letter also comes ahead of the company’s annual shareholder meeting tomorrow and its first-ever highly anticipated “Battery Day” for investors.
Energy transition
Shell (RDS.A, RDS.B) is jumping on the bandwagon of its European rivals BP (NYSE:BP) and Eni (NYSE:E), which have both announced plans to reduce their focus on oil and gas in the coming decade. Sources tell Reuters that the oil major is looking to slash up to 40% off the cost of producing oil and gas so it can overhaul its business and focus more on renewable energy and power markets. Shell’s new cost-cutting review, known internally as Project Reshape and expected to be completed this year, will affect its three main divisions and any savings will come on top of a $4B target set in the wake of the COVID-19 crisis.
HBO outpaces Netflix at the Emmys
HBO (NYSE:T) once again held off Netflix (NASDAQ:NFLX) in this year’s Emmy race, taking home 30 trophies including 11 for dystopian drama Watchmen, which was the night’s biggest winner. HBO’s media family saga Succession also had a strong showing, as well as the final season of Schitt’s Creek and Disney’s (NYSE:DIS) The Mandalorian. The dogfight between HBO and Netflix, which scored 21 wins, is part of a much larger trend in the TV awards circuit: subscription-based platforms are creating more Emmy Award winning content.
Suspicious transactions
Deutsche Bank (NYSE:DB) appears to have facilitated more than half of the leaked $2T of suspicious transactions that were flagged to the U.S. government over nearly two decades, according to Deutsche Welle, though the lender said the incidents “have already been investigated and led to regulatory resolutions.” Shares of HSBC (NYSE:HSBC) and Standard Chartered (OTCPK:SCBFF) fell on the suspicious fund movement, as well as JPMorgan (NYSE:JPM), BNY Mellon (NYSE:BK) and Barclays (NYSE:BCS), which were also named in the report. Financial firms are required by law to alert FinCEN (the U.S. Treasury’s Financial Crimes Enforcement Network) when they detect activities like money laundering and sanctions violations, though such filings are not necessarily evidence of criminal misconduct. DB -8% premarket.
What else is happening…
Garrett Motion (NYSE:GTX) files for bankruptcy with $2.1B KPS offer.
Walmart (WMT) widens fashion focus with new private clothing label.
Different efficacy bars in Moderna (NASDAQ:MRNA) and Pfizer (NYSE:PFE) COVID-19 trials.
Movies still face Catch-22, needing both viewers and blockbusters to return.
United (NASDAQ:UAL) the latest airline to press for more relief.
Today’s Economic Calendar
8:30 Chicago Fed National Activity Index
6:00 PM Fed’s Williams Speech
6:00 PM Fed’s Kaplan Speech
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