Good morning. Happy Friday.
The Asian/Pacific markets leaned to the upside. Japan, India, New Zealand, Taiwan, Australia, Malaysia, Indonesia and the Philippines did well while China and Singapore posted losses. Europe, Africa and the Middle East currently lean down. Turkey, the UAE, South Africa and Hungary are up; France, Germany, Greece, Spain, Portugal, Austria and the Czech Republic are down. Futures in the States point towards a down open for the cash market.
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Online Course: Mini Masterclass in Trading
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The dollar is down. Oil is down; copper is up. Gold and silver are up. Bonds are down.
Stories/News from Seeking Alpha…
Nonfarm Friday
As coronavirus infections surge across the nation the latest nonfarm payrolls report will be released at 8:30 a.m. ET, and is expected to show an increase of 600K jobs in October. Anything less than September’s 661K could confirm a continuing slowdown in growth, with the pace decelerating every month since June, when the economy added 4.8M jobs. The unemployment rate is expected to fall to 7.7% in October from 7.9% in September, while average hourly earnings are forecast rising 0.2% after gaining 0.1% last month. “The risk of renewed shutdowns on the heels of COVID case increases is real and could make for very messy jobs numbers in coming months,” RBC Capital Markets economists said in a research note.
Vote count remains tight
Stock futures are trimming their best weekly advance since April following a four-day rally that saw the S&P score daily gains in excess of 1% and a whole lot more for Big Tech. At the time of writing: Dow -0.5%; S&P 500 -0.7%; Nasdaq -1%. Worries over the election are weighing on some sentiment after President Trump questioned its credibility and said the vote was being “stolen” from him. He’s pursuing lawsuits challenging the counting process in several states, as rival Joe Biden took a slight lead in Georgia and gained in Pennsylvania, though his lead contracted in Arizona and Nevada.
Emergency election measures
Facebook (NASDAQ:FB) has pulled the trigger on “temporary emergency measures” that executives previously described as their “break glass” options to respond to post-election unrest. Examples: The company took down the “Stop the Steal” group, which was organizing protests of vote counts around the country and grew to more than 361,000 members within 24 hours. Another feature will require users seeking to share election-related material to click through a notice encouraging them to visit the website’s Voting Information Center. Facebook will also restrict the spread of live video and reduce the likelihood that users will see content that its algorithms classify as potential misinformation.
Fed not out of firepower
The FOMC made no change to its pace of asset purchases and kept rates at rock bottom on Thursday, which will stay there until the pandemic-hit economy reaches full employment with higher inflation. Fed Chair Jay Powell also made another pitch for a stimulus package from Congress and the White House, but he might have to do more on the monetary end if the gridlock continues amid a “particularly concerning” rise in new COVID-19 cases. “Is monetary policy out of power or out of ammunition? The answer to that is no, I don’t think that,” Powell declared. “I think that we’re strongly committed to using these powerful tools for as long as needed.”
Bitcoin on a tear
Fresh off celebrating its 12th white paper anniversary, Bitcoin (BTC-USD) rose another 9% overnight to nearly touch $16,000, spurred by a tumble in dollar, ever looser monetary policy and after the DOJ seized a record amount of cryptocurrency. Officials took possession of more than $1B, including 69,000 bitcoins that had been associated with the dormant dark web site Silk Road, marking the largest seizure of crypto in the agency’s history. Bitcoin’s surge widens the crypto’s lead over gold as the top asset of 2020, according to Bloomberg, whose Galaxy Crypto Index of digital currencies is up about 120% this year exceeding gold’s jump of about 30%.
Public comments on Ant IPO suspension
“The decision was made in accordance with laws and regulations… and about maintaining stable, healthy market development in the long term,” announced Liu Guoqiang, deputy governor of the People’s Bank of China. “Any listed company must comply with the requirements of relevant laws and regulations,” added Liang Tao, vice chairman of the China Banking and Insurance Regulatory Commission. China put a halt to the $37B listing on Tuesday, spoiling the world’s largest stock market debut and throwing the company and its investors into a tailspin. Shares of Alibaba (NYSE:BABA), which owns a third of Ant Group, have since tumbled on the news, as the fintech races to satisfy tighter regulations.
New Alzheimer’s drug set for approval
The future of aducanumab, Biogen’s (NASDAQ:BIIB) treatment for Alzheimer’s disease, looks set to get a thumbs-up from the FDA, becoming the first new therapy for the brain disorder in nearly two decades (memantine was approved back in 2003). A meeting of outside advisers will meet virtually today and investors are clearly expecting an approval based on aspects of the FDA briefing document (Biogen shares soared over 30% on Wednesday). While some are skeptical about the data, aducanumab is said to reduce cognitive decline by targeting and eliminating toxic proteins in the brain, called beta amyloid.
What else is happening…
WhatsApp (FB) expands mobile payments push in India.
‘Great urgency’ – more staff cutbacks coming at ESPN (NYSE:DIS).
New blow to theaters as Disney postpones Free Guy and Death on the Nile.
Xerox (NYSE:XRX) rallies as Icahn boosts stake above 14%.
News from the EV space… Bentley is going fully electric.
Thursday’s Key Earnings
Alibaba (BABA) -2.7% after earnings beat, inline revenue.
Barrick Gold (NYSE:GOLD) +6.9% raising dividend on strong gold prices.
Bristol-Myers (NYSE:BMY) -2.6% giving back gains after Q3 beats.
Electronic Arts (NASDAQ:EA) -7% AH as bookings and holiday guidance fell short.
General Motors (NYSE:GM) +5.4% amid strong results in N.America, cash generation.
Main Street Capital (NYSE:MAIN) -2.4% AH following Q3 distributable EPS miss.
Peloton (NASDAQ:PTON) -7.2% AH warning of ongoing supply constraints.
Roku (NASDAQ:ROKU) +2.1% AH swinging to an operating profit.
Square (NYSE:SQ) +4.3% AH as Q3 revenue topped estimates by 50%.
T-Mobile (NASDAQ:TMUS) +6.2% AH on Sprint-fueled subscriber adds.
Teva Pharma (NYSE:TEVA) -6.5% needing growth driver, Q3 top line off 3%.
Uber (NYSE:UBER) -2.2% AH losing $1.09B during the quarter.
Virgin Galactic (NYSE:SPCE) +2.8% AH with next spaceflight planned for late November.
Zillow (NASDAQ:Z) +10.5% AH blowing past estimates, optimistic forecast.
Today’s Economic Calendar
8:30 Non-farm payrolls
8:30 Wholesale Inventories (Preliminary)
1:00 PM Baker-Hughes Rig Count
3:00 PM Consumer Credit
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Good morning. Happy Thursday.
The Asian/Pacific markets posted big gains. Japan, China, Hong Kong, South Korea, India, Australia, Malaysia, Indonesia, Singapore, Thailand and the Philippines did great. Europe, Africa and the Middle East are currently posting solid gains. Denmark, Poland, France, Turkey, Germany, Russia, South Africa, Spain, the Netherlands, Italy, Portugal, Austria and Sweden are up 1% or more. Futures in the States point towards a big gap up open for the cash market.
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VIDEO: What Do the Weekly Charts Tell Us
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The dollar is down. Oil is down; copper is up. Gold and silver are up big. Bonds are up.
Stories/News from Seeking Alpha…
Campaign trail ends with market rally
Tech mega-caps continue to be the big gainers across the board following a razor-thin election and outstanding political uncertainty (didn’t the sell-side say a lack of immediate results would be negative for the market?) Anyways, many voices are chiming in on the catalysts for the move higher after additional outsized gains were seen from stock index futures overnight: Dow +1.4%; S&P 500 +2%; Nasdaq +3%. Some are saying the rally over the last 24 hours is due to less regulatory risk (due to a divided White House and Congress), making major policy changes difficult to enact. Others feel the broad selloff last week is getting many traders off the sidelines, while some believe their presidential candidate and agenda would be a net positive for equities. Markets also don’t appear to be paying attention to the coronavirus front, with the U.S. reporting more than 100,000 new cases in a single day for the first time ever on Wednesday.
Election count continues
It all comes down to Arizona and Nevada. Barring different recount results or court battle outcomes, President Trump will have to take one of those states, as well as Georgia, North Carolina and Pennsylvania to reclaim the presidency. While he’s currently ahead in the latter states, all Biden needs to do is pull ahead, or walk away with one of the wins out West. Looking to future fiscal policies, traders are also concentrating on the battle for the Senate, where odds are increasing that Republicans will keep control after victories by Susan Collins in Maine and Joni Ernst in Iowa.
Stimulus bill by end of the year?
Senate Majority Leader Mitch McConnell has flagged a new economic stimulus bill as his top priority when the chamber returns to work next week. “Hopefully, the partisan passions that prevented us from doing another rescue package will subside with the election. And I think we need to do it and I think we need to do it before the end of the year.” In other economic news, the Fed is likely to lay low today during its penultimate policy meeting of 2020, while jobless claims will provide the latest snapshot of the pace of recovery in the labor market.
Another dose of bond purchases
An extra round of stimulus has been launched in England as the country enters a second lockdown that runs from today until December 2. The U.K.’s central bank boosted its bond-buying program by a larger-than-expected £150B, taking the government’s purchase target to £875B to help the economy weather another wave of coronavirus restrictions. Benchmark interest rates remain unchanged at 0.1%, though the BOE is exploring sub-zero territory, and has asked British lenders about their preparedness for negative interest rates.
TikTok arguments made in court
The battle surrounding TikTok is coming back into focus as lawyers for the Chinese-owned video app clashed with the DOJ’s legal team in federal court to stave off a government-ordered shutdown set for Nov. 12. District Judge Carl Nichols previously blocked an attempt by the Trump administration to impose a September ban on new TikTok downloads in the U.S., saying the move amounted to a prohibited use of broad emergency powers, but he didn’t immediately rule on the latest shutdown attempt. The Nov. 12 deadline is aimed at pressuring TikTok parent ByteDance (BDNCE) to reach a settlement transferring TikTok’s ownership to a group that would potentially include Oracle (NYSE:ORCL) and Walmart (NYSE:WMT). Details of the structure are still up in the air as the companies try to ensure it would win final approval from both the Chinese and American governments.
Accelerating stock sales
Jeff Bezos has unloaded another 1M shares of Amazon (NASDAQ:AMZN) for $3B as part of a prearranged 10b5-1 trading plan, marking the latest in a series of sales that now exceed $10B this year. That’s a notable jump from 2019, when the Amazon CEO sold $2.8B worth of shares, though he continues to hold more than 10% of the company – a stake worth around nearly $170B and makes him the richest person in the world. Bezos has previously said he sells about $1B of Amazon stock each year to fund his rocket startup, Blue Origin, and launched a $10B Earth Fund back in February to combat the effects of climate change.
U.S. quits Paris climate accords
The Trump administration has officially pulled out of the Paris Climate Agreement after giving the required year’s notice last November. It makes the country the only one of 197 signatories to have withdrawn from the deal struck in 2015, and which Joe Biden has said would be revived if he is elected president. The pact is non-binding, meaning nations aren’t required to meet any specific requirements, but the Obama administration had pledged to reduce American emissions by about 26%-28% by 2025, compared with 2005 levels, when signing the deal in 2016. In the absence of federal action, many U.S. states and businesses have set clean energy mandates to meet Paris targets, with 25 U.S. governors pledging to coordinate on climate policies.
What else is happening…
BofA looks to close year with a bang, and picks in Materials, Pharma.
What election 2020 uncertainty could mean for banks and financials.
Republicans retain control of Texas oil and gas regulator.
Investors snap up leisure stocks in post-election trade
Fox (NASDAQ:FOX) gives back gains as election presents potential ‘overhang.’
Wednesday’s Key Earnings
Energy Transfer (NYSE:ET) +7.1% AH seeing no impact from election outcome.
Expedia (NASDAQ:EXPE) +5.7% AH showing off sequential improvements.
Fitbit (NYSE:FIT) +1% AH topping consensus on top and bottom lines.
Match Group (NASDAQ:MTCH) +3% AH as Q3 revenues grew by double digits.
Qualcomm (NASDAQ:QCOM) +13% AH on 5G-driven FQ4 beats, upside forecast.
Today’s Economic Calendar
Auto Sales
7:30 Challenger Job-Cut Report
8:30 Initial Jobless Claims
8:30 Productivity and Costs
10:30 EIA Natural Gas Inventory
2:00 PM FOMC Announcement
2:30 PM Chairman Press Conference
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
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Good morning. Happy Wednesday – the day after Election Day.
The Asian/Pacific markets closed with solid gains. Japan, Hong Kong, South Korea, India, Taiwan, Singapore, New Zealand and the Philippines led, while Indonesia was weak. Europe, Africa and the Middle East are currently posting solid gains. The UK, Denmark, France, Turkey, Germany, Russia, South Africa, Switzerland, Norway, Hungary, Italy, Sweden and Saudi Arabia are up 1% or more; Poland is weak. Futures in the States point towards a relatively big gap up open for the cash market.
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VIDEO: What Do the Weekly Charts Tell Us
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The dollar is down. Oil and copper are up. Gold and silver are down. Bonds are up.
Stories/News from Seeking Alpha…
No winner yet
The U.S. presidential election has yet to deliver a clear winner, as many predicted, with several key contested states too close to call and votes still being counted across Pennsylvania, Michigan, Wisconsin, North Carolina, Georgia and Nevada. With 270 electoral votes needed to claim the White House, President Trump currently has 213 electoral votes, and former Vice President Joe Biden has 238, according to the Associated Press. While many were hoping for a quick and decisive result, a historic number of mail-in ballots could be counted into Wednesday and possibly beyond.
Tribute to Eli Hoffmann
Early this morning, Seeking Alpha’s Editor-in-Chief and COO, Eli Hoffmann, returned his soul to his creator at the age of 52. A leader, a visionary and anchor of the company, Eli was known to all for his warmth and smile. He started Wall Street Breakfast, as well as the Breaking News team, after joining the company in 2006, and served for several years as CEO. We will never forget you, Eli. You will be sorely missed by all of us.
Control of Congress at stake
Besides the future of the presidency, control of Congress is hanging in the balance, and in particular the Senate, which is key to how much money will be poured into the economy to battle COVID-19. The results will affect everything from healthcare proposals to taxes and regulation, but investors are specifically eyeing a coronavirus aid package that has been elusive for months despite ongoing negotiations. While some of the races are too close to call, Democrats look set to retain control of the House of Representatives, while the GOP is poised to keep a majority in the Senate.
Tech up sharply
The “too early to call” Election Night does not seem to be giving tech traders anxiety as Nasdaq 100 (NASDAQ:QQQ) futures climbed fast enough to trigger an exchange volatility halt that pauses rapid swings at 3.5%. Contracts linked to the index have have since pared some gains to trade 2.3% higher, while the Dow (NYSEARCA:DIA) flatlined and S&P 500 (NYSEARCA:SPY) futures rose by 0.6%. “If that blue wave isn’t there then it’s… back to the playbook,” said Charlie McElligott, a cross-asset strategist at Nomura Securities. Besides betting on the market’s most enduring winners, an increasing chance of a Trump win would allay any concerns of greater regulatory scrutiny, as well as higher corporate and capital gains taxes, that could hurt tech stocks in a Biden administration.
Drawn-out or contested result?
Some market volatility additionally ensued after President Trump vowed to petition the Supreme Court about the inconclusive election, calling the process “a major fraud on our nation.” “Frankly, we did win this election,” he announced in a late night presser from the White House. “We were winning everything, and all of a sudden it was just called off.” “It ain’t over until every ballot is counted,” Democratic nominee Joe Biden said earlier from Delaware. “We knew because of the unprecedented early vote that this may take awhile.”
Gig worker triumph
Californians have overwhelmingly voted in favor of Proposition 22, a ballot measure that would exempt drivers for app-based transportation and delivery companies from being classified as employees. The bill had essentially become Uber (NYSE:UBER) and Lyft’s (NASDAQ:LYFT) last hope to continue their operations in the state under the status quo. Under the new proposal, the companies will still guarantee new protections to workers, such as giving drivers 30 cents a mile driven to account for gas and other vehicle costs, healthcare subsidies for drivers who work 15 hours or more a week and occupational accident insurance coverage while on the job. UBER +13.9%; LYFT +12.9% premarket.
Pot stocks get smoked
Voters in New Jersey, Arizona, Montana and South Dakota have jumped on the recreational marijuana train, meaning 1 in 3 Americans now live in a state where adult pot use is legal. Despite the news, a big pullback is hitting the sector, with Canopy Growth (NYSE:CGC), Aurora Cannabis (NYSE:ACB), Tilray (NASDAQ:TLRY) and Cronos (NASDAQ:CRON) all off by 8% in premarket trade. More drug-related initiatives were also decided across the nation, with Oregon becoming the first in the nation to decriminalize possession of hard drugs, while D.C. voters approved a measure that will effectively decriminalize “magic mushrooms” and other organic psychedelics (Denver, Oakland and Santa Cruz previously passed similar proposals).
China slams brakes on Ant Group listing
Suspending the world’s biggest IPO may have just been the start: China is working on a bigger crackdown on Ant Group (NYSE:BABA) to bring Jack Ma’s fintech empire to heel. Regulators there are now looking at curbing credit platforms that funnel loans from financial institutions to millions of consumers across China, according to Bloomberg. Yesterday, Ant’s offering was fully suspended just two days before it was supposed to go live in Shanghai and Hong Kong, in a dual listing that could have raised almost $40B. Shares of Alibaba, which owns a third of Ant, closed down 8% following the news on Tuesday.
What else is happening…
Florida votes to raise minimum wage to $15 an hour.
Maryland approves measure for sports and events betting facilities.
Comcast (NASDAQ:CMCSA) and Walmart (NYSE:WMT) could soon sell smart TVs.
JPMorgan (NYSE:JPM) warns of another potential regulatory fine.
AT&T (NYSE:T) exploring sale of minority stake in pay TV operations.
Palantir (NYSE:PLTR) may help Britain with COVID-19 contact tracing.
Tuesday’s Key Earnings
Bausch Health (NYSE:BHC) -6.1% despite beats, reiterating guidance.
Emerson Electric (NYSE:EMR) +3.6% on plans to increase dividend, resume buybacks.
Prudential Financial (NYSE:PRU) unchanged AH as the company repriced products.
Today’s Economic Calendar
FOMC meeting begins
7:00 MBA Mortgage Applications
8:15 ADP Jobs Report
8:30 Goods and Services Trade
9:45 PMI Composite Final
10:00 ISM Non-Manufacturing Index
10:30 EIA Petroleum Inventories
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Good morning. Happy Tuesday. Happy Election Day.
The Asian/Pacific markets closed with solid gains. China, Hong Kong, South Korea, India, Taiwan, Australia, Singapore and Thailand rallied more than 1%. Europe, Africa and the Middle East are currently posting big gains. The UK, Poland, France, Germany, Russia, Greece, South Africa, Finland, Switzerland, Hungary, Spain, the Netherlands, Italy, Austria, Sweden and the Czech Republic are up 1% or more. Futures in the States point towards a relatively big gap up open for the cash market.
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Online Course: Mini Masterclass in Trading
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The dollar is down. Oil and copper are up. Gold and silver are up. Bonds are down.
Stories/News from Seeking Alpha…
Election edition
Nearly 99M early votes have been cast in person or by mail as of Monday night, about 72.3% of the entire turnout in 2016 and representing about 40% of all Americans who can participate in the U.S. election. The rest of the population will decide today on whether Republican President Donald Trump or Democratic rival Joe Biden will control the White House for the next four years. Trump is still close enough in swing states like Arizona, Florida, Michigan, North Carolina, Pennsylvania and Wisconsin to piece together the 270 Electoral College votes needed to win the presidency (a feat he accomplished in 2016 despite losing the national popular vote), while Democrats are also pushing to recapture a Senate majority and are expected to retain their control of the House of Representatives.
Rally in the works
U.S. equity index futures are continuing their strong start to the week in the wake of last week’s selloff, climbing another 1.4% overnight following a green session on Monday. “Anything other than a contested election, a decisive victory in particular, would be good news for stocks,” said Kristina Hooper, chief global market strategist at Invesco. Since the 2016 election of Trump, the U.S. stock market has gained about 53%, and rebounded from the coronavirus-induced selloff to hit fresh all-time highs in September. With traders still mindful of the violent price swings seen after the election in 2016, check out our sector-by-sector coverage below of what may lie ahead for the markets.
Energy & Infrastructure
Joe Biden has promised to invest $2T in clean energy infrastructure, and if he were to win, it could give a boost to renewables and sustainable stocks, as well as the solar industry. Biden has additionally pledged to a vehicle charging network rollout, and while he may be the best outcome for EVs, President Trump said during the first presidential debate that he is “all in” when it comes to electric cars. During Trump’s administration, the U.S. also became the world’s largest energy producer, though his heavy infrastructure plan to repair and rebuild highways, bridges and water systems made little headway. Members of Congress have not been able to reach a consensus on how to pay for it, but it could take on greater importance during a second term. Related: TSLA, FSLR, VMC, CAT
Banks
Expect big bank capital requirements to tighten if Joe Biden wins the presidency, but don’t expect a radical departure from the existing regime, writes Jaret Selberg of Cowen Washington Research Group. Changes, though, wouldn’t be immediate as the terms of Fed Vice Chairman Randal Quarles (October 2021) and Chairman Jerome Powell (February 2022) would have to expire before such proposals could advance. Some analysts still see a silver lining for banks, because they could benefit from a hefty stimulus package and potentially steeper bond yields. A second Trump term could also result in “added tailwinds from a continued ‘light touch’ on regulation and a push to reduce taxes,” according to Ameriprise Financial. Related: BAC, C, GS, JPM, MS, WFC
Stimulus & Taxes
A so-called “Blue Wave’ is the clearest path to a jumbo coronavirus aid package that would help reinvigorate the economy, after talks repeatedly broke down over the last few months. Such a bill may benefit small-cap shares and lead to a long-awaited rotation into value stocks (hasn’t that been happening already?). Looking beyond a near-term boost, a Democratic sweep could also pose some worries for investors, such as the prospect of a potential corporate tax rate hike to 28% from 21% – which could weigh on company profits – as well as a tougher regulatory environment.
Defense
While the consensus thinking is a Democratic win would mean less defense spending, Biden has said he may increase spending in areas that the Defense Department “desperately needs to innovate” such as “unmanned capacity, cyber and IT.” “I’ve met with a number of my advisors and some have suggested in certain areas the budget is going to have to be increased,” he told military newspaper Stars and Stripes in September. Defense stocks have climbed sharply overall under President Trump, even with the COVID-related selloff hitting the sector, and generally tend to do well under Republican administrations. Shortly after winning the election in 2016, Trump added more than $200B to the defense budget for fiscal years 2017 through 2019, and in December of 2019, he signed a $738B defense bill for fiscal 2020. Related: LMT, NOC, GD, BA, RTX
Trade
A Biden administration is predicted to ratchet down tensions in the U.S.-China trade war, though that could be negative for the dollar if the calmer tone would mean more American imports from overseas. He says the best way to confront China on IP and technology transfers is by forming a coalition with allies, not through unilateral tariffs, and wants to juice U.S. manufacturing by directing $400B of federal government purchases to domestic firms (like buying pandemic supplies) over a four-year term. Trump, on the other hand, views the signing of two major trade deals – USMCA and Phase 1 of a China agreement – as signature achievements of his presidency.
Healthcare & Pharma
Eyes will also be on healthcare spending, which totals 17% of the U.S. economy and far more than any other industrialized country. Biden wants to expand the Affordable Care Act, a move that would increase federal healthcare spending by $2T or more over 10 years, while Trump wants to end it altogether, and replace it with something better. Both political parties have also sounded off against high prescription drug prices, while BofA has shaken out election scenario winners in hospitals and managed care.
Big Tech
Both parties will likely continue regulatory pressure on tech companies with antitrust investigations and breakup threats, as well as a possible repeal Section 230 of the Communications Decency Act. Revoking the rule would create legal headaches for social media platforms, whose business models rely heavily on user-generated content. According to Allianz, Democrats are “more likely to pursue changes in ‘Big Tech’,” while Deutsche Bank International Private Bank said the sector was “one of the biggest benefactors” of Trump’s tax reform. Related: GOOG, GOOGL, TWTR, FB
What else is happening…
$4T could be waiting to rotate back into equities – UBS.
Ride-share companies on watch as California decides on gig worker classification.
Investors eye firearm stocks with election wildcard in play.
Cannabis opportunities called out by Cantor Fitzgerald ahead of election.
Election scenarios weighed by UBS for retail.
Gateway REITs may rise on Biden win, Sunbelt REITs on Trump victory – Mizuho.
Monday’s Key Earnings
AMC Entertainment (NYSE:AMC) +2.8% with revenues that topped lowered expectations.
Clorox (NYSE:CLX) +4.2% booking a record sales jump.
Marathon Petroleum (NYSE:MPC) +6.1% after a lighter than expected Q3 loss.
Mondelez (NASDAQ:MDLZ) -0.9% AH following top and bottom line beats.
PayPal (NASDAQ:PYPL) -5.7% AH amid a profit outlook that fell short of estimates.
Today’s Economic Calendar
Auto Sales
8:55 Redbook Chain Store Sales
10:00 Factory Orders
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Good morning. Happy Monday.
The Asian/Pacific markets closed mostly up. Japan, China, Hong Kong, South Korea and the Philippines gained over 1%. Europe, Africa and the Middle East are currently posting big gains. The UK, Poland, France, Turkey, Germany, Russia, South Africa, Finland, Switzerland, Norway, Hungary, Spain, the Netherlands, Italy, Portugal, Austria, Sweden and Saudi Arabia are up 1% or more. Futures in the States point towards a moderate gap up open for the cash market.
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Online Course: Mini Masterclass in Trading
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The dollar is flat. Oil is down; copper is up. Gold and silver are up. Bonds are up slightly.
Stories/News from Seeking Alpha…
What will November bring?
The major averages are coming off their worst monthly performance since March amid surging coronavirus infections, extinguished stimulus talks and a slump for Big Tech following quarterly earnings reports. The Dow closed out October with a 4.6% loss, the S&P 500 and the Nasdaq fell 2.8% and 2.3%, respectively, while volatility last week saw the VIX “fear gauge” spike to a four-month high. Traders seem a little more cheerful this morning as U.S. stock index futures climbed 1.5% to start the month, as the selloff leading up to Election Day may give the market less downside risk to a contested result. “Even though we’re worried that there could still be one more wave down if we get another big influx of uncertainty, we think the stock market is now setting up nicely for a nice net advance over the next two months or so,” said Matt Maley, chief market strategist at Miller Tabak.
Oil slumps
While recent pressure on equity markets could be easing, oil prices slid on lingering worries that international lockdowns will sap energy demand. Off by nearly 6% overnight, crude futures have pared some losses, down 2.7% to $34.82/bbl. Libya and Iraq are also boosting their production, causing a rise in overall supply from OPEC+, despite having reduced quotas across its other members. While the group meets again on Nov. 10 and Dec. 1 to discuss policy, there doesn’t appear to be a great deal of leeway for further reductions.
Election talk
Keep an eye on tomorrow’s edition of Wall Street Breakfast for potential stock and sector winners and losers of the upcoming U.S. presidential election. Democratic nominee Joe Biden remains ahead of President Trump nationally and in battleground states, though some state races remain extremely close and we all know how the pollsters turned out in 2016. “Markets will have to figure out what will change in the next Congress and in the next administration,” said Paul Christopher, head of global market strategy at the Wells Fargo Investment Institute.
Lockdown or not… that is the question
Large parts of Europe are locking down again, while other countries are trying to resist the approach. The U.K. has announced a one-month national lockdown starting Thursday – that will ensure workers who are temporarily laid off receive 80% of their pay – joining France, Germany, Ireland, Austria and Belgium with pandemic-containment regimes similar to those imposed in the spring. Meanwhile, debt-averse Switzerland is trying to avoid another lockdown with a set of lighter restrictions, including mask mandates and bar/restaurant curfews, even as infection rates surpass those in neighboring France and Germany.
Debt-to-GDP
S&P Global Ratings sees global debt, as a percentage of GDP, swelling to a record 265% this year, and insolvencies and defaults rising to levels not seen since the 2009 crisis. A near-term crisis, though, is unlikely given the expected economic recovery, a COVID-19 vaccine by mid-2021, favorable financing conditions, and sovereign, corporate and household spending and borrowing behaviors. “The heavier corporate debt will delay the recovery of credit metrics beyond 2022 for the hardest hit sectors (such as airlines, leisure and oil and gas),” according to the report.
Listings leader board
The New York Stock Exchange (NYSE:ICE) is on pace to regain the U.S. stock market listings crown from rival Nasdaq (NASDAQ:NDAQ) this year after attracting bigger blank-check company IPOs than Nasdaq. So far, companies have raised $66B through listings on NYSE this year vs. $61B on Nasdaq (almost two-thirds of the proceeds raised on NYSE came from special purpose acquisition companies. The numbers from Dealogic, cited by the FT, don’t include direct listings; Palantir (NYSE:PLTR) and Asana (NYSE:ASAN), both turning to NYSE, raised capital through the process in September.
New York requires negative coronavirus test
Doing away with the Tri-State Travel Advisory, Governor Andrew Cuomo is now requiring people coming to New York to test negative, with the exception of residents from the contiguous states of New Jersey, Connecticut and Pennsylvania. Travelers must get tested for COVID-19 three days before arriving in the Empire State, and then quarantine for three days once they arrive (another test will be required on the fourth day, which could release them from quarantine). New York residents returning from travel under 24 hours outside the state do not need to take a test before coming back, however, they must take a test after returning.
Oregon may become first state to decriminalize hard drugs
Besides casting their votes for the presidential election, voters in Oregon this week will decide on decriminalizing hard drugs via a ballot initiative called Measure 110. The bill would decriminalize personal possession of less than one gram of heroin or methamphetamine; two grams of cocaine; 12 grams of psilocybin mushrooms; 40 doses of LSD, oxycodone or methadone; and one gram or five pills of MDMA. Instead of being arrested and facing possible jail time, users would have the option of paying $100 fines or attending free addiction recovery centers that would be funded by retail marijuana tax revenues. Oregon was the first state in the U.S. to decriminalize marijuana possession in 1973, and later approved medical use in 1998 and recreational use in 2014.
What else is happening…
Disney (NYSE:DIS) at center of debate on streaming/cinema future.
Pandemic claims first U.S. retail REIT casualty.
Dunkin’ Brands (NASDAQ:DNKN) to go private in $8.76B cash deal.
EV maker Nio (NYSE:NIO) delivers 5,055 vehicles in October, growth of 100%.
U.S. Commerce Department will ‘vigorously defend’ TikTok ban.
China’s manufacturing sector expands for sixth straight month.
Today’s Economic Calendar
9:45 PMI Manufacturing Index
10:00 ISM Manufacturing Index
10:00 Construction Spending
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