Good morning. Happy Friday.
The Asian/Pacific markets leaned down. Hong Kong and Israel did well, but Japn, South Korea, New Zealand, Taiwan, Thailand and the Philippines were weak. Europe, Africa and the Middle East currently lean up. The UK, France, Germany, Poland, Finland, Norway, the Netherlands and the Czech Republic are up more than 1%. Futures in the States point towards a positive open for the cash market.
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The dollar is down. Oil and copper are down. Gold and silver are flat. Bonds are down.
Stories/News from Seeking Alpha…
Moment of truth for Brexit trade
British Prime Minister Boris Johnson is due to make a final call on whether to accept a narrow post-Brexit trade deal with the EU or go for a no-deal scenario, after being dished an ultimatum at the EU Summit in Brussels. Britain’s chief negotiator, David Frost, said he was “disappointed and surprised” that the EU was no longer committed to working “intensively” for a deal, but a response will come later today. The decision is set to affect $900B in annual trade, as well as supply chains that stretch across Europe and beyond, against the backdrop of a pandemic that has upended the economy.
China set to approve its own tech protection law
China’s top legislative body, the National People’s Congress, is set to adopt a new rule that would restrict sensitive exports vital to national security in a session that concludes on Saturday. The Export Control Law would apply to all companies in China, including foreign-invested ones, and would add to Beijing’s regulatory arsenal, which already includes a tech export restriction catalog and an unreliable entity list. Competition has been growing with the U.S. over access to technology, and big Chinese companies including Huawei, ByteDance’s (BDNCE) TikTok, Tencent’s (OTCPK:TCEHY) WeChat and Semiconductor Manufacturing International Corp. (OTC:SMI) have already found themselves in Washington’s crosshairs in recent months.
Wall Street quiet after three days of losses
U.S. stock index futures are holding steady as investors pull back from the big technology stocks that have helped drive the market this year. On-again, off-again stimulus talks, as well as risks of a second wave of coronavirus infections, have put a lot of money on the sidelines, while traders also appear “reluctant to make any big bets until after the election, when the risk of contested results has been eliminated,” said Jim McCormick, global head of desk strategy at Natwest Markets. The big news on the economic calendar today is retail sales data, which will offer an update on the recovery in consumer spending, after jobless claims rose last week to the highest level since late August.
Backlash over Twitter’s blocked NY Post story
Alongside withering criticism from conservatives, Twitter (NYSE:TWTR) is changing up its policy that it applied to block distribution of a New York Post story on Hunter Biden. The company had said that it blocked the article in part because it had a policy of not sharing what might be hacked material, but its legal chief now says that policy is too sweeping and could end up with unintended consequences. It will now allow similar content to be shared (along with a source label to provide context), but is still blocking the Hunter Biden article as it violates Twitter privacy policy by “including email addresses and other private info.”
Latest coronavirus medical setback?
Remdesivir has “no substantial effect” on the survival of hospitalized patients, according to a not-yet-published study by the World Health Organization that was seen by the FT. Shares of maker Gilead Sciences (NASDAQ:GILD) slipped 1.7% on the news yesterday, and are down another 1.2% premarket. In response, Gilead said it’s unclear if any conclusive findings can be drawn, though a similar lack of impact was found in regimes of hydroxychloroquine, lopinavir and interferon.
Tariff threats back on the table
The U.S. has reportedly made an offer to the EU to remove a host of tariffs if Airbus (OTCPK:EADSY) repaid European governments with billions of dollars in aid, but retaliation is also in the cards after the most recent WTO ruling. “If they strike back, then we’ll strike much harder,” President Trump told reporters. “They don’t want to do anything, I can tell you that.” Earlier this week, the bloc won permission to level up to $4B in tariffs on American goods in response to subsidies for Boeing (BA), though the EU will likely hold fire until after next month’s U.S. election, according to Bloomberg.
Europe deems 737 MAX safe to fly
Changes made to Boeing’s (NYSE:BA) 737 MAX have made the plane safe enough to return to the region’s skies, according to Europe’s top aviation regulator, marking a vote of confidence for a plane that has been grounded since March 2019. EASA is now performing final document reviews ahead of a draft airworthiness directive it expects to issue in November, which will be followed by four weeks of public comment. The FAA is also preparing to clear the plane’s return, but EASA’s view carries outsized weight given the flaws in the plane’s original certification process that dented the U.S. regulator’s reputation.
Foxconn aims to become Android of electric vehicles
The company that makes Apple’s (NASDAQ:AAPL) iPhone may soon be assembling electric cars. Foxconn (OTC:FXCOF) has introduced what it called the “MIH Open Platform,” which is essentially a set of tools that would allow a company to design large parts of an electric car (chassis sizes, battery capacities, suspension types etc.) via modular manufacturing. The latest announcement pushes the company into a market which could be worth over $800B by 2027, according to Allied Market Research, as it looks to diversify its business.
Self-driving cars out in the wild
General Motors’ (NYSE:GM) Cruise autonomous vehicle unit is pulling the human backup drivers from its vehicles in San Francisco after landing a permit from the California Department of Motor Vehicles. “We’re not the first company to receive this permit, but we’re going to be the first to put it to use on the streets of a major U.S. city,” said Cruise CEO Dan Ammann. The move follows last week’s announcement from Google’s (GOOG, GOOGL) Waymo that it would open its self-driving ride-hailing service to the public in the Phoenix area in vehicles without human drivers.
What else is happening…
Impressive numbers from LVMH (OTCPK:LVMHF) and Tiffany (NYSE:TIF) amid merger fight.
Jack in the Box (NASDAQ:JACK) introduces first “unchicken” sandwich.
Twitter (TWTR) suffers widespread service disruption.
Blackstone (NYSE:BX) and co-investors agree to sell BioMed Realty for $14.6B.
Sunny 2021 guidance from HP Enterprise (NYSE:HPE) tops consensus.
Thursday’s Key Earnings
Aphria (NASDAQ:APHA) -18.4% disappointing with FQ1 distribution revenue.
Charles Schwab (NYSE:SCHW) +5.2% topping expectations.
Morgan Stanley (NYSE:MS) +1.3% posting strong wealth management figures.
Taiwan Semiconductor (NYSE:TSM) -0.5% beating top and bottom line estimates.
Walgreens (NASDAQ:WBA) +4.8% forecasting profit growth for 2021.
Today’s Economic Calendar
8:30 Retail Sales
9:15 Industrial Production
10:00 Business Inventories
10:00 Consumer Sentiment
1:00 PM Baker-Hughes Rig Count
1:35 PM Fed’s Bullard: “Monetary Policy in Transition”
2:00 PM Treasury Budget
4:00 PM Treasury International Capital
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Good morning. Happy Thursday.
The Asian/Pacific markets closed mostly down. Hong Kong, South Korea, India, Indonesia, Singapore and Thailand dropped more than 1%. Europe, Africa and the Middle East are currently suffering big losses. The UK, Denmark, Poland, France, Germany, Russia, Greece, South Africa, Finland, Switzerland, Norway, Hungary, Spain, the Netherlands, Italy, Portugal, Austria, Sweden and the Czech Republic are down big. Futures in the States point towards a big gap down open for the cash market.
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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…
Second wave fears
Concerns over economic fallout from resurging coronavirus infections, as well as dwindling hopes for U.S. fiscal stimulus, weighed on stocks around the globe overnight (see market data below). A record 22 U.S. states recorded more than 1,000 new daily COVID-19 cases, while Treasury Secretary Steven Mnuchin said he did not expect to reach a deal on a coronavirus relief package before the presidential election. On the data front, the latest weekly jobless claims numbers will be released this morning, with another 825,000 Americans are expected to have filed for first-time unemployment insurance.
Over in Europe
Germany posted its highest ever increase in confirmed COVID-19 cases over the past 24 hours and started reimposing restrictions on some of the biggest coronavirus hotspots such as Berlin. The French government meanwhile declared a public health state of emergency and announced a curfew for Paris and eight other big cities from Saturday. Italy has also surpassed its daily record for newly diagnosed coronavirus cases, while a debate is taking place in England over whether a country-wide “circuit breaker” lockdown is needed.
Vaccine recommendations
COVID-19 vaccines may not be initially recommended for children when they become available, according to the Centers for Disease Control and Prevention. So far, early clinical trials have only included non-pregnant adults, but participating groups continue to expand as companies recruit more people. Pfizer (NYSE:PFE) has already announced that it will enroll children as young as 12 in its late-stage COVID-19 vaccine trial, while AstraZeneca (NASDAQ:AZN) has said a sub-group of patients in its large trial will test children between five to 12.
TikTok fight weighs on Fastly
Fastly (NYSE:FSLY) lost more than a quarter of its market value late Wednesday after the cloud software company lowered its Q3 revenue guidance to $70M-$71M (from $73.5M-$75.5M). It attributed the lowered estimate to reduced usage from its largest customer, likely video-sharing app TikTok (BDNCE), which is facing a possible ban in the U.S. Fastly, which increases the speed of content delivery over the internet, also suspended its full-year guidance, and said a new forecast would be issued when it reports earnings on Oct. 28
Tesla reduces prices again
Tesla (NASDAQ:TSLA) has cut the price of the Model S for the second time this week, after EV startup Lucid Motors, led by former Tesla executive Peter Rawlinson, announced the base price of its upcoming Air EV would be $69,900 (after tax credits). “The gauntlet has been thrown down! The prophecy will be fulfilled. Model S price changes to $69,420 tonight!” Elon Musk wrote on Twitter (the price was previously reduced from $74,990 to $71,990). Lucid has projected that the base model of their sedan will deliver an EPA estimated range of 406 miles per single charge vs. 402 miles per charge on the Model S.
Virgin Galactic gets closer to key spaceflight
Virgin Galactic (NYSE:SPCE) has confirmed that it is on track to conduct its first suborbital spaceflight in the coming weeks from Spaceport America in New Mexico. The flight planning window opens on October 22, and will be the first of two missions that will complete testing of the SpaceShipTwo spacecraft system. If both flights succeed, Virgin Galactic expects to fly founder Sir Richard Branson in the first quarter of 2021, notching a milestone that will commence the company’s commercial tourism service.
No progress on the Brexit front
Despite setting an October 15 deadline for reaching a trade “outline” with the EU, Prime Minister Boris Johnson is not walking away from negotiations. He’s apparently waiting for the conclusion of the two-day EU summit in Brussels that concludes Friday, and some even say the end of October or first few days of November is now the real deadline. The Brexit transition period is due to expire on December 31, at which point the U.K. will leave the single market without a trade agreement.
What else is happening…
PG&E (NYSE:PCG) cuts power to 50,000 customers in Northern California.
TikTok (BDNCE) deal may wait until after election – Fox Business.
Amazon (NASDAQ:AMZN) expands NFL coverage with playoff game – WSJ.
Starbucks (NASDAQ:SBUX) links executive pay to its 2025 diversity targets.
Wednesday’s Key Earnings
Alcoa (NYSE:AA) -4.2% AH as adjusted EBITDA fell 27%.
Bank of America (NYSE:BAC) -5.3% on slumping Q3 net interest income.
Goldman Sachs (NYSE:GS) +0.2% with trading business returning to former glory.
PNC Financial (NYSE:PNC) -2.4% despite shrinking loan provisions.
U.S. Bancorp (NYSE:USB) -0.4% citing a “challenging economic environment.”
UnitedHealth (NYSE:UNH) -2.9% despite raising profit outlook.
United Airlines (NASDAQ:UAL) +0.5% AH reducing cash burn in Q3.
Wells Fargo (NYSE:WFC) -6% cutting FY20 net interest income guidance.
Today’s Economic Calendar
8:30 Initial Jobless Claims
8:30 Philly Fed Business Outlook
8:30 Empire State Mfg Survey
8:30 Import/Export Prices
9:00 Fed’s Bostic Speech
10:30 EIA Natural Gas Inventory
11:00 EIA Petroleum Inventories
11:00 Fed’s Kaplan Speech
11:00 Fed’s Quarles: “Response to the COVID Threat”
11:10 Fed’s Bullard: “Monetary Policy and Heterogeneity”
2:00 PM Fed’s Barkin: “What’s Ahead? Learning from the CFO Survey”
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
5:00 PM Fed’s Kashkari Speech
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Good morning. Happy Wednesday.
The Asian/Pacific markets leaned down. New Zealand and Indonesia did well, but China, South Korea, Singapore and Thailand were weak. Europe, Africa and the Middle East currently lean up. Poland, Turkey, Russia, Spain, Italy, Israel and Austria are up; Greece is down. Futures in the States point towards a flat open for the cash market.
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BLOG: The Leavitt Brothers Trading List
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The dollar is down. Oil is flat; copper is up. Gold and silver are up. Bonds are up.
Stories/News from Seeking Alpha…
Sizing up bank earnings
Investors are hoping for lower loan provisions and higher trading revenues as Goldman Sachs (NYSE:GS) and Bank of America (NYSE:BAC) announce Q3 results this morning. Wells Fargo (NYSE:WFC) is also due to report, but without a significant trading operation like its Wall Street peers, the focus will be on how its customers are spending or saving during the COVID-19 pandemic. On Tuesday, Citigroup’s (NYSE:C) outgoing CEO Mike Corbat came under fire over regulatory penalties during a conference call, while JPMorgan (NYSE:JPM) said it was confident enough in the bank’s financial position to resume share buybacks as soon as regulators allow them.
Snapping winning streak
The broader financial sector is on watch again this morning as U.S. stock index futures inched down overnight after snapping a four-day winning streak on Tuesday. The latest reading on wholesale inflation will also be released today, with September producer prices forecast to have increased 0.2%, just below the 0.3% rise in August. On the stimulus front, House Speaker Nancy Pelosi insisted the Trump administration revamp its latest $1.8T offer, while Senate Republican leader Mitch McConnell pushed a smaller-scale strategy that she quickly rebuffed.
Eli Lilly pauses antibody trial
The race to find medical breakthroughs to contain COVID-19 is running into some speed bumps. Eli Lilly (NYSE:LLY) has paused a government-sponsored trial of its antibody therapy due to safety concerns, less than 24 hours after Johnson & Johnson (NYSE:JNJ) said research on its experimental vaccine was put on hold after a participant fell ill. Lilly’s therapy, part of the National Institute of Health’s “Activ” program and backed by Operation Warp Speed, is similar to a drug from Regeneron (NASDAQ:REGN) that was given to President Trump during his bout with COVID-19.
Apple enters the 5G race
Apple (AAPL) launched four versions of the iPhone 12 with faster 5G connectivity on Tuesday, as well as unveiling the HomePod Mini, a $99 smart speaker. Wider product shot… The base model iPhone 12 (6.1-inch) and iPhone 12 Mini (5.4-inch) start at $699 and $799, and are available in five color options (pre-orders start October 16). The iPhone 12 Pro (6.1-inch) and Pro Max (6.7-inch) start at $999 and $1,099 for 128GB of storage, respectively, featuring a more premium design and extra camera power.
Let the promos begin…
The arrival of 5G iPhone 12 is anticipated to result in a robust upgrade cycle, triggering a battle in the carrier sphere, and a boon for iPhone maker Apple (NASDAQ:AAPL). Both AT&T (NYSE:T) and Verizon (NYSE:VZ) are giving away models for free, provided that customers sign up for unlimited plans and trade in qualifying phones. T-Mobile US (NASDAQ:TMUS) is also in the promotion game. It’s offering two iPhone 12 Pros for $100 each to new customers with trade-ins, as well as selling the new iPhone for half off with a trade-in.
Making remote work permanent
Calling the initiative “Virtual First,” Dropbox (NASDAQ:DBX) will stop asking employees to come into its offices and instead make remote work the standard practice, even after the coronavirus pandemic ends. For employees who need to meet up or work together in person, the company is establishing “Dropbox Studios” in San Francisco, Seattle, Austin and Dublin. Twitter (NYSE:TWTR) and Square (NYSE:SQ) are also letting employees work from home “forever,” while Microsoft (NASDAQ:MSFT) is giving staff more flexibility in working from home.
Chicken price-fixing
Pilgrim’s Pride (NASDAQ:PPC) has agreed to a plea deal with the U.S. Justice Department to resolve price-fixing charges, and will pay a fine of $110.5M. A guilty plea by the poultry giant will make Pilgrim’s the first business to admit in court to what prosecutors have alleged was a roughly seven-year effort (from 2012 to early 2019) to inflate prices across much of the U.S. chicken industry. Current and former employees of other chicken companies, including Tyson Foods (NYSE:TSN), have also been charged, and the latter has been cooperating with the government’s investigation under a corporate leniency program.
Largest ever corporate trade dispute
The World Trade Organization has awarded the EU the right to impose tariffs on about $4B in American goods in retaliation for subsidies granted to Boeing (NYSE:BA). The decision follows a similar WTO ruling from last year that allowed the U.S. to impose tariffs on $7.5B in EU goods over state support for Airbus (OTCPK:EADSY). “The EU will immediately re-engage with the U.S. in a positive and constructive manner to decide on next steps. Our strong preference is for a negotiated settlement. Otherwise, we will be forced to defend our interests & respond in a proportionate way,” tweeted Valdis Dombrovskis, EU Commission EVP for Economy.
Last-ditch Brexit talks
Both the U.K. and EU don’t appear to be making any headway as the clock ticks down to Boris Johnson’s deadline for abandoning negotiations over their future trade relationship. The bloc’s chief negotiator, Michel Barnier, said the discussions haven’t sufficiently advanced for them to enter the intensive final phase, though he has suggested that talks could go beyond Oct. 15. Johnson has meanwhile maintained the U.K. is “ready and willing” to leave the single market without a deal as tensions remain over fisheries and business subsidies. Sterling -0.4% to $1.2884.
What else is happening…
Walmart (NYSE:WMT) staggers Black Friday deals into separate events.
Netflix (NASDAQ:NFLX) is ending its free trials in the U.S. – The Verge.
Ford (NYSE:F) delays launch of plug-in Escape SUV after fires.
New Tesla (NASDAQ:TSLA) Model X version said to have higher range.
Coming 2 America moves from theaters to Amazon (NASDAQ:AMZN).
AMC (NYSE:AMC) says it could run out of cash by year-end.
Today’s Economic Calendar
7:00 MBA Mortgage Applications
8:30 Producer Price Index
8:35 Fed’s Barkin Speech
10:00 Atlanta Fed’s Business Inflation Expectations
6:00 PM Fed’s Barkin Speech
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Good morning. Happy Tuesday.
The Asian/Pacific markets leaned up. New Zealand, Australia, Indonesia and Singapore did well. Europe, Africa and the Middle East currently lean down. Portugal and Saudi Arabia are doing well, but Poland, France, Germany, Finland, Spain, Italy, Austria and Sweden are weak. Futures in the States point towards a slight down for the cash market.
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BLOG: The Leavitt Brothers Trading List
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The dollar is up. Oil is up; copper is down. Gold and silver are down. Bonds are up.
Stories/News from Seeking Alpha…
Anticipation builds for iPhone 12
Wedbush is calling today’s Apple (NASDAQ:AAPL) iPhone event a “once in a decade” potential launch, and the stock is responding accordingly. Shares are up 2% premarket, following a 6.4% advance on Monday, amid expectations that it will be the first iPhone with full 5G capacity and somewhat cheaper than last year’s devices. Analyst Daniel Ives predicts four iPhone models: 5.4-inch OLED display (starting price: $699); 6.1-inch OLED display ($799), 6.1-inch iPhone Pro OLED ($999), and 6.7-inch OLED display iPhone Pro Max ($1,099). The Pro models will likely differentiate with LIDAR sensors for AR, enhanced rear camera tech, and 4x/5x optical zoom.
Amazon Prime Day
Consumers are already filling up their shopping carts as Amazon’s (NASDAQ:AMZN) Prime Day kicked off at 3 a.m. ET, with 48 hours of discounts on more than 1M items, including “Lightning Deals” for Prime members. Amazon shares rose 4.8% to $3,442 on Monday in anticipation of the event, pushing the stock up over 85% YTD. Due to the coronavirus pandemic, analysts predict the online shopping bonanza will be the biggest in Amazon’s history, with revenue expected to jump about 42% Y/Y to $7.5B, according to JPMorgan.
Earnings season kicks off after tech rally
The political headlines are hitting the sidelines as earnings season formally kicks off in the U.S., while cash continues to pour into Big Tech following a major rally on Monday that saw the Nasdaq close up 2.6%. Big bank earnings take center stage this morning, with results from JPMorgan (NYSE:JPM) and Citigroup (NYSE:C), though investors will also digest reports from Delta Air Lines (NYSE:DAL) and Johnson & Johnson (JNJ). Earnings from S&P 500 companies are estimated to fall 20.5% from a year earlier in Q3, signaling an improvement from the 25% decline anticipated at the end of June and the 32% drop reported in Q2.
J&J pauses coronavirus vaccine trials
The study of Johnson & Johnson’s (NYSE:JNJ) COVID-19 vaccine has been temporarily stopped due to an unexplained illness in a trial participant, according to a report by health care news provider STAT. Clinical trial pauses are not uncommon, and in some cases last only a few days; study pauses also are not surprising given the size of Johnson & Johnson’s 60K-patient clinical trial. News of the halt comes after AstraZeneca (NASDAQ:AZN) also paused tests of its vaccine after a trial participant fell ill; the study has resumed in some countries but remains halted in the U.S.
First case of coronavirus reinfection confirmed in the U.S.
The 25-year-old man, who is a resident of Washoe County in Nevada, became seriously ill following a second infection, a study in the Lancet Infectious Diseases journal showed, raising further questions about coronavirus immunity. A comparison of genetic codes showed “significant differences” between each virus variant, meaning the patient caught the coronavirus on two separate occasions, rather than the original infection bouncing back after becoming dormant. Reports of secondary coronavirus infections in Hong Kong, the Netherlands and Belgium were no more serious than the first, but one in Ecuador mirrored the U.S. case in being more severe.
Streaming priority
Seemingly absorbing some growing advice from industry pros, Walt Disney (NYSE:DIS) is announcing a major reorganization where it will be making streaming its “primary focus” for entertainment. The company will rearrange its media and entertainment divisions into a single organization responsible for content distribution, ad sales, and Disney Plus. The new distribution group will be overseen by Kareem Daniel, the former president of games/publishing in the company’s consumer products group. DIS +4.8% premarket.
PC market has its best quarter in more than a decade
Personal computer sales recorded their strongest growth in a decade during Q3, driven by remote work, at-home schooling and entertainment during the COVID-19 pandemic. Overall, PC shipments rose 14.6% to 81.3M units, according to IDC, while Gartner pegged the increase at 3.6% to 71.4M units (though its data excluded Chromebooks). “It used to be the case that smartphones were king,” said Jitesh Ubrani, IDC’s research manager for Mobile Device Trackers. “At the start of the pandemic, people pulled out their old PCs in many cases and they realized that this PC is really too old to be productive.”
Global effort to map out rules for stablecoins
The possibly of a stablecoin being used by billions of people – think of Facebook’s (NASDAQ:FB) Libra – is spurring central banks to put together rules that would govern the currency. The latest? The Financial Stability Board has agreed to build a roadmap to enhance cross-border payments, flexibility, efficiency and coordination. Among the items are the “completion of international standard-setting work by December 2021,” “supervisory and oversight frameworks by July 2022” and “review of implementation by July 2023.”
Solar is the ‘new king’ of the power market
The global response to COVID-19 can “reshape the future of energy” for years to come, according to the International Energy Agency’s annual World Energy Outlook report. Renewables will take “starring roles” and solar will take “center stage” due to supportive government policies and declining costs. “I see solar becoming the new king of the world’s electricity markets,” said Fatih Birol, IEA’s executive director. “Based on today’s policy settings, it is on track to set new records for deployment every year after 2022.”
What else is happening…
Twilio (NYSE:TWLO) snaps up cloud customer data startup Segment for $3.2B.
Snowflake (NYSE:SNOW) draws bullish calls from Wall Street.
Nat gas extends rally to surge to highest since March 2019.
SoftBank Vision Fund (OTCPK:SFTBY) is preparing a SPAC launch.
U.S. luxury homes record 42% jump in third quarter.
Aimmune (NASDAQ:AIMT) shareholders accept $2B Nestle (OTCPK:NSRGY) tender offer.
Today’s Economic Calendar
6:00 NFIB Small Business Optimism Index
8:30 Consumer Price Index
8:55 Redbook Chain Store Sales
12:25 PM Fed’s Barkin: “Early Childhood Education: Now More Than Ever”
2:00 PM Treasury Budget
8:00 PM Fed’s Daly: “Is the Federal Reserve Contributing to Economic Inequality”
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Good morning. Happy Monday. Hope you had a good weekend.
The Asian/Pacific markets are mostly up. China and Hong Kong are up big; New Zealand, Taiwan, Australia, Indonesia and Singapore are also doing well. Malaysia is weak. Europe, Africa and the Middle East are currently lean up. The UK, Denmark, France, Turkey, South Africa, Finland, the Netherlands and Israel are doing well; Poland and Portugal are down. Futures in the States point towards a moderate gap up open for the cash market.
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BLOG: Electric Vehicles – The Next Big Thing
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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…
Get ready for earnings season
Financial earnings will dominate the current week as the sector tries to break out of the malaise that made it an underperformer throughout the summer’s recovery rally. Trading revenue and bank credit loss estimates will give an indication of the pace of the economic recovery, though the four largest lenders more than doubled their war chests for defaulted loans over the first six months of the year. Among those reporting over the next few days are JPMorgan Chase (NYSE:JPM), Citigroup (NYSE:C), Goldman Sachs (NYSE:GS), Bank of America (NYSE:BAC), Wells Fargo (NYSE:WFC) and Morgan Stanley (NYSE:MS).
What to watch
Earnings from S&P 500 companies are projected to drop 20.5% from a year earlier in the third quarter, according to FactSet, marking an improvement from the 25% decline anticipated at the end of June and the 32% drop reported for the second quarter. Results that top forecasts could fuel a further leg up for a stock market that has advanced more than 50% from its March lows, though there are still many unknowns. Just 69 companies in the S&P 500 have issued earnings guidance for the quarter (compared with the five-year average of 104) and more than 1 in 4 companies are still not providing an EPS outlook for 2020 or 2021.
More gains as stimulus talks continue
Following the biggest weekly rally in three months, U.S. markets look set to begin the week with some more gains. While the latest White House coronavirus package hit resistance from both Democrats and Republicans over the weekend, discussions are continuing. Odds are also increasing that the Democrats could take the Senate following the November election, which would lay the groundwork for a larger stimulus package. Equity markets remain open today for Columbus Day, though bond traders will get the day off in observance of the federal holiday.
The new Black Friday
Big-box retailers are battling it out this week, throwing major sales events as Amazon Prime Day (NASDAQ:AMZN) begins at 3 a.m. ET Tuesday and lasts through Wednesday. Target (NYSE:TGT) will have “Deal Days” and Best Buy (NYSE:BBY) will jumpstart Black Friday sales on those days, while Walmart (NYSE:WMT) holds its “Big Save Event” from 7 p.m. ET Sunday through Thursday. “There are so many unknown variables this year,” said Tyson Cornell, who leads the U.S. consumer markets group at PwC. “By kicking off sales in October, [retailers] are hoping to spread consumer traffic and demand over the next few months, helping them maintain social distancing in stores, consistently move inventory and adjust their strategies based on early consumer demand.”
Big Tech ‘hit list’
The EU has been working to make powerful tech companies less powerful, and the bloc is building a list of businesses that are in its crosshairs, FT reports. The “hit list” includes up to 20 of the largest internet companies – based on market share of revenues and the number of users – that will be subject to new and far more stringent rules. New regulations would force them to share data with rivals and make them more transparent on how they collect information. A number of Big Tech names, including Facebook (NASDAQ:FB), Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) and Google (GOOG, GOOGL) are already under antitrust scrutiny in the U.S., and last week a House subcommittee said Congress should consider breaking up some companies.
Emergency authorization request around Thanksgiving
The head of the Trump administration’s Operation Warp Speed program, Moncef Slaoui, expects drugmakers to file with the FDA for emergency authorization of a coronavirus vaccine by late November. The project aims to deliver 300M doses of a vaccine starting in January, though none of the four vaccine candidates to enter Phase 3 trials have yet publicly reported data from the mid-stage studies. “My expectation is really something between 80% and 90% efficacy,” Slaoui added, saying immunization in high-risk populations could begin this year.
Disney battles record-low viewership of NBA Finals
The Los Angeles Lakers beat the Miami Heat 106-93 on Sunday, capturing a record-tying 17th NBA Championship and restoring the storied franchise to the top of the basketball world. The series capped the longest, rockiest season in NBA history, which resumed in July at a spectator-free bubble in Disney World (NYSE:DIS). TV ratings have also been challenging Disney’s ABC network, with the first three games of the finals setting historic record lows and averaging 6.6M viewers a game (48% lower than last year). The 2019 NBA Finals brought in about $288M in revenue for Disney’s media segment, but amid declining viewership and slashed advertising budgets, that figure is likely to be much lower for 2020.
China taps the brakes on yuan rally
Looking to restrain a rally in the yuan, which has climbed 4.3% in the past three months, China’s policy makers are removing rules that made betting against the currency expensive. Financial institutions will no longer need to hold 20% of sales on some foreign exchange forward contracts, a move imposed two years ago when the renminbi slumped toward 7 per dollar. In stock market news, Shenzhen soared 3.3% and Hong Kong rose 2.2% before an address from Xi Jinping this week that’s expected to detail greater cooperation between the two cities, driving foreign capital inflows and enhancing the tech sector.
IMF and World Bank meetings
The annual meetings of the International Monetary Fund and World Bank are going virtual this year as the gathering kicks off today against the backdrop of the coronavirus crisis. The fund has warned that the rebound from COVID-19 will be long and uneven, leading G20 nations to extend a freeze in debt payments from the world’s poorest nations that’s set to expire at year end. Extending the Debt Service Suspension Initiative (DSSI) by another six months would provide an extra $6.4B of relief, rising to $11.4B if it runs to the end of 2021. The World Bank also wants borrowings reduced to prevent a larger fallout and is also pushing banks and investors to provide relief to DSSI countries.
What else is happening…
Energy companies begin restoring Gulf operations in wake of Hurricane Delta.
Mallinckrodt (NYSE:MNK) files for Chapter 11 to offload opioid liabilities.
New Shaq SPAC is targeting technology and media companies.
Amazon (AMZN) gives up on Crucible, its first major video game.
General Motors (NYSE:GM) records first China sales growth in two years.
British Airways (OTCPK:ICAGY) chief steps down amid industry’s ‘worst crisis.’
Today’s Economic Calendar
9:00 Fed’s Kashkari Speech
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