Good morning. Happy Thursday.
The Asian/Pacific markets closed mostly up. Japan, South Korea, India and Thailand led, and China lagged. Europe, Africa and the Middle East are currently doing well. Poland, Turkey, Germany, Greece, Norway, Italy, Portugal, Israel and Austria are leading. Futures in the States point towards a slight up open for the cash market.
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VIDEO: Profiling Recent Trades
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The dollar is down. Oil and copper are down. Gold and silver are down. Bonds are up.
Stories/News from Seeking Alpha…
The Grinch Who Stole Brexit?
After nine months of protracted negotiations, the EU and Britain went into the late hours of the night finalizing a historic post-Brexit trade deal, just a week before the U.K. is set to crash out of the bloc’s single market. The full legal text and details are likely to be released this morning, and would include provisions for zero tariffs or quotas on all goods, as well as protect cooperation in areas like aviation, transport, security and energy. Sterling is up on the news, climbing 0.8% to $1.3599.
What about fishing rights? The issue has held up an agreement in recent months, but people briefed on the talks say there would be a 5.5-year transition period – under which EU boats can still access U.K. fishing waters – though the bloc’s rights will be knocked down by a quarter.
The deal is still being called thin, but could provide the base on which the two sides rebuild relations (it’s been over four years since the U.K. voted to leave the European Union). It could also restore the standing of U.K. investment. The average level of British exposure in global equity funds has recently fallen to an all-time low of 5.8%, compared with almost 9% at the start of 2016.
China goes after its biggest tech company
The country’s top market regulator is launching an investigation into Alibaba (NYSE:BABA), just a month after stopping its sister company Ant Group from going public, in what would have been the world’s largest IPO. The State Administration for Market Regulation is looking into suspected anti-monopolistic behavior by Alibaba, like forcing merchants to sell exclusively on its platform, while the news saw its shares slump over 7% in premarket trade. Following a broad crackdown on Big Tech across the globe, Beijing has in recent months increased its scrutiny of its local tech groups, but this was the most aggressive action of regulators thus far. Recent rumors also suggest Jack Ma offered to give parts of Ant Group to the Chinese government.
Is a Santa rally in the works?
While stock traders will get some time off for Christmas Eve, with the market closing early at 1 p.m. ET, futures are pointing to slight gains for those sticking around in the holiday-shortened session. Christmas Eves are typically far quieter trading sessions, with volumes on the NYSE and Nasdaq about 36.8% of a normal day, according to data from FactSet, which goes back to 2007. More historical data: The S&P 500 has averaged a 0.5% gain on Christmas Eve, according to Dow Jones Market Data, and could mark the beginning of a Santa Claus rally, which is the tendency for stocks to rise over the last five trading sessions of December and the first two trading sessions of January.
Breaking ties with Republican-led Senate
Congressional Republicans are facing high-stakes decisions in the coming days over two major pieces of bipartisan legislation that were snubbed by the White House. President Trump vetoed the $740B annual defense policy bill, which did not include a provision to repeal Section 230 of the Communications Decency Act and would create a commission to study renaming military bases named for Confederate officials. A day earlier, he expressed discontent with a $892B coronavirus relief package due to the funding headed overseas and undersized direct payments. While both bills have veto-proof majorities, the response from GOP leaders could affect the outcome of the Jan. 5 Georgia runoff elections that will determine control of the Senate for the next two years.
Square may diversify with Jay-Z
Bloomberg reports that Square’s (NYSE:SQ) Jack Dorsey has discussed a potential deal with Jay-Z for music streaming service Tidal, which the rapper and music mogul acquired for $56M in early 2015. Tidal has struggled to keep pace with rival streaming services, while Jay-Z even put his songs back on Spotify (NYSE:SPOT) last year, raising questions about the health of the closely held service (it hasn’t reported subscriber figures since saying it had 3M paying customers in 2016). Dorsey, who spent more than four years on the board of Walt Disney (NYSE:DIS), is thought to have ambitions of building Square into a collection of businesses under one corporate umbrella, and the company already has two core products – Square Seller and Cash App.
SolarWinds hack ongoing
A sprawling cyberattack that used SolarWinds (NYSE:SWI) as a springboard is still “impacting enterprise networks across federal, state, and local governments, as well as critical infrastructure entities and other private sector organizations,” the Cybersecurity and Infrastructure Security Agency said in an alert posted to its website. “This threat actor has the resources, patience, and expertise to gain access to and privileges over highly sensitive information if left unchecked. Disconnecting affected devices, as described in Required Action 2 of the ED, is the only known mitigation measure currently available.” SolarWinds shares have been volatile over the past week, and have tumbled 32% since the attack was first reported on December 13.
How to tax remote workers?
The trend towards remote work is spurring some interesting cases about income tax for employees that are no longer commuting to the office. New Jersey, Connecticut, Hawaii and Iowa have submitted an amicus brief in a lawsuit that challenges the authority of states to tax nonresidents’ income while they’ve been working from home. The brief also pushes back on New York, which taxes Garden State residents who normally commute there despite hundreds of thousands of NJ residents now working from home.
Center of the controversy: Massachusetts has been taxing New Hampshire residents who have been working remotely since the pandemic, spurring the Granite State to file suit in October.
Generally, a state can tax an individual if he or she is a resident or if they have earned income in that location. States have mitigated this by providing tax credits to offset “double taxation” or have established “reciprocal agreements.” Remote work has resulted in additional complexity because seven states have passed what is known as a “convenience rule,” which taxes employees based on the location of their office even if they are working remotely.
Today’s Economic Calendar
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
NYSE early close at 1:00 PM
SIFMA close 2:00 PM
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Good morning. Happy Wednesday.
The Asian/Pacific markets closed mostly up. Japan, China, Hong Kong, South Korea, India, New Zealand and Malaysia led, while Thailand was weak. Europe, Africa and the Middle East are currently doing well. Poland, France, Turkey, Germany, the UAE, Norway, Spain, Italy and Portugal are doing well. Futures in the States point towards a slight up open for the cash market.
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VIDEO: Profiling Recent Trades
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The dollar is down. Oil and copper are up. Gold and silver are up. Bonds are down. Bitcoin is up.
Stories/News from Seeking Alpha…
Stimulus confusion
Thought the latest edition of coronavirus stimulus was a done deal? Guess again. In a surprise video announcement, President Trump called the $892B package a “disgrace” and demanded changes to the bipartisan legislation approved by Congress. Futures wobbled shortly after the broadcast, but it didn’t take much for them to erase the losses. Trump specifically took aim at funding headed overseas, and direct payments to individuals and families, but it was unclear if the items would be enough for him to veto the relief package. Bigger picture: The House and Senate could vote to override Trump’s decision as the bill passed with a veto-proof majority in Congress, but the process could delay Treasury Secretary Steve Mnuchin’s promise that stimulus checks could begin reaching American households next week. “I am asking Congress to amend this bill and increase the ridiculously low $600 to $2,000, or $4,000 for a couple,” Trump declared. “I’m also asking Congress to immediately get rid of the wasteful and unnecessary items from this legislation.” In a rare twist, Nancy Pelosi agreed with the call on larger direct payments, and House Democrats will see if they can approve a measure by unanimous consent on Christmas Eve, but it’s not clear whether the larger sums would pass muster in the Senate. Meanwhile, U.S. government operations are being funded on a temporary basis through Dec. 28, waiting for the $1.4T in federal spending for fiscal 2021 that is also attached to the stimulus bill.
The Boy Who Cried Brexit
Brexit trade talks are said to be hanging in the balance once again as officials try to wrap up negotiations today, with the U.K. only a week away from leaving the single market. Discussions are still hung up over fishing rights, though the other two issues, a competitive playing field and enforcement of a deal, seem to have been resolved. Meanwhile, France is reopening its borders with the U.K. for truck drivers who test negative for COVID-19 following a two-day shutdown caused by the new coronavirus variant in England. Some U.K. officials are even speculating that France closed its borders to give a taste of what would happen if there was a no-deal Brexit.
Collision course?
It might be a good idea to own a bit of both Apple (NASDAQ:AAPL) and Tesla (NASDAQ:TSLA) in your portfolio, with reports of the companies going head-to-head in the self-driving, EV and battery markets. If Robinhood is any guide, the shares are also among the most widely held stocks on the platform. “During the darkest days of the Model 3 program, I reached out to Tim Cook to discuss the possibility of Apple acquiring Tesla (for 1/10 of our current value). He refused to take the meeting,” Elon Musk detailed on Twitter. It’s an interesting sidenote to Apple potentially becoming a direct competitor with Tesla, while its long flirtation with the car business is dividing analysts on Wall Street.
Glued to the screen
The videogame industry has boomed in recent years and the trend is only likely to grow after the release of next-gen gaming consoles from Playstation (NYSE:SNE) and Xbox (NASDAQ:MSFT). In fact, global videogame revenue is expected to soar 20% to $179.7B in 2020, according to IDC data. That’s more than the combined annual sales of the film industry ($100B) and the global sports sector ($75B). Bigger picture: With the rise of streaming game services, mobile gaming and cross-platform games, titles aren’t limited to a specific console, while digital sales and in-app purchases are padding companies’ bottom line. Hours of gameplay have also increased to an average of 14 hours a week since COVID-19 was declared a pandemic in March, compared with an average of 12 hours a week from a year ago. Related: Activision Blizzard (NASDAQ:ATVI), Electronic Arts (NASDAQ:EA), Take-Two Interactive (NASDAQ:TTWO), Zynga (NASDAQ:ZNGA), Glu Mobile (NASDAQ:GLUU), Tencent (OTCPK:TCEHY) and NetEase (NASDAQ:NTES).
Opioids lawsuit
The U.S. Department of Justice has filed a civil lawsuit against Walmart (NYSE:WMT) for its alleged role in the opioid epidemic. The retailer was accused of unlawfully filled prescriptions for painkillers that it should have known did not serve a legitimate medical purpose, as well as pressuring its staff to dispense as many drugs as possible. The DOJ wants Walmart to pay billions of dollars in damages, though the company says the case is “riddled with factual inaccuracies and cherry-picked documents taken out of context.” It added that “blaming pharmacists for not second-guessing the very doctors DEA approved to prescribe opioids is a transparent attempt to shift blame.”
More doses
Pfizer (NYSE:PFE) is close to an agreement with the Trump administration in which the company would bolster the supply of its coronavirus vaccine for the U.S. by at least tens of millions of doses next year, NYT reports. In exchange, the government would invoke the Defense Production Act to give Pfizer better access to roughly nine specialized products it needs to make the jab, which could help the U.S. partly offset a potential vaccine shortage that could leave as many as 110M adult Americans uncovered in H1 2021. Pfizer and partner BioNTech (NASDAQ:BNTX), which already have a contract to supply the government with 100M doses under Operation Warp Speed, as well as rival Moderna (NASDAQ:MRNA), are the only two groups that have won U.S. emergency use authorization for their respective COVID-19 vaccine candidates.
Low-cost IPO alternative
The SEC will allow companies to raise new capital through direct listings, whereby a company floats its shares on a stock exchange, but without hiring banks to underwrite the transaction like in an IPO. “This is a victory for the New York Stock Exchange (NYSE:ICE), which had been seeking to change its rulebook to make the new process available to companies going public,” NYSE President Stacey Cunningham said in a statement. Until now, companies have only been allowed to use direct listings to sell existing shares, limiting the process to a small number of cash-rich companies like Palantir (NYSE:PLTR), which went public in September. “The massive pops during recent market debuts have proven the traditional IPO process has only gone downhill,” added Bill Gurley, general partner at venture capital firm Benchmark.
IAC to spin off Vimeo
Internet holding company IAC (NASDAQ:IAC) rose 14% on Tuesday after deciding to spin off Vimeo, which was once a competitor to YouTube (GOOG, GOOGL), but has since morphed into a video production tools company. The move isn’t such a surprise. It’s IAC’s eleventh spinoff to date, and was speculated to happen after Vimeo raised $150M in new equity last month at a $2.75B valuation. Vimeo has more than 200M users across the globe, with over 3,500 enterprise customers including Amazon (NASDAQ:AMZN), Starbucks (NASDAQ:SBUX) and Rite Aid (NYSE:RAD), as well as 1.5M paying subscribers. Business has been expanding at a rapid rate, with revenue growth of 54% in November, 49% in both October and September, and 43% in August.
What else is happening…
It’s official! SEC sues Ripple, while XRP continues decline.
Tesla (TSLA) nears correction territory after S&P inclusion.
EV mania… LG Electronics unveils $1B joint venture with Magna (NYSE:MGA).
Airbus (OTCPK:EADSY) poised to keep title as world’s top jetmaker.
Today’s Economic Calendar
7:00 MBA Mortgage Applications
8:30 Durable Goods
8:30 Initial Jobless Claims
8:30 Personal Income and Outlays
9:00 FHFA House Price Index
10:00 New Home Sales
10:00 Consumer Sentiment
10:30 EIA Petroleum Inventories
11:30 Results of $24B, 2-Year FRN Auction
12:00 PM EIA Natural Gas Inventory
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Good morning. Happy Tuesday.
The Asian/Pacific markets were split, with some big movers in both directions. Europe, Africa and the Middle East are currently posting solid gains. Poland, France, Turkey, Germany, Russia, Greece, Norway, Hungary, Spain, the Netherlands, Italy, Portugal, Israel, Austria, Saudi Arabia and the Czech Republic are up 1% or more. Futures in the States point towards a slight up open for the cash market.
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Online Course: Mini Masterclass in Trading
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The dollar is up. Oil and copper are down. Gold is flat; silver is down. Bonds are up.
Stories/News from Seeking Alpha…
iCar?
Apple’s (NASDAQ:AAPL) Project Titan is not only alive, but plans to produce an electric passenger vehicle with “breakthrough battery technology” and self-driving capabilities by 2024, according to a fresh report from Reuters. The news sent AAPL shares nearly 3% higher in premarket trade after closing up yesterday on the news.
Backdrop: Project Titan has been moving in fits and starts since 2014. It first began to design its own vehicle from scratch, but reverted back to a software push at one point and reassessed its goals. It remains unclear who would assemble a possible iCar, but sources have said they expect Apple to rely on a manufacturing partner.
Other movement: Shares of Tesla (NASDAQ:TSLA) initially spun lower on the report (amid the EV maker’s first day as part of S&P 500), but erased the losses as Loup Ventures’ Gene Munster weighed in on the impact. “We believe in 5 years Tesla will hold around one third global EV market share, leaving two-thirds of the market up for grabs. The bigger impact of an Apple Car will be on traditional automakers.” Lidar sensor makers like Luminar (NASDAQ:LAZR) and Velodyne (NASDAQ:VLDR) also revved their engines on the news, with Apple deciding to tap outside partners for elements of its self-driving car system.
Compare Apple and Tesla side by side on valuation, growth, profitability and momentum measures.
Will vaccines work against the U.K. coronavirus variant?
“We don’t know at the moment if our vaccine is also able to provide protection against this new variant,” but because the proteins on the variant are 99% the same as the prevailing strains, BioNTech (NASDAQ:BNTX) has “scientific confidence” in the vaccine. “The likelihood that our vaccine works… is relatively high,” CEO Ugur Sahin declared, saying the company is currently conducting further studies and hopes to have certainty within the coming weeks.
More views: Dr. Moncef Slaoui, head of Operation Warp Speed, also expects the BioNTech/Pfizer (NYSE:PFE) shot and jab from Moderna’s (NASDAQ:MRNA) to be effective against a new mutation of the virus, dubbed B117. The chances one set of mutations would completely alter the structures found around the spike proteins “are extremely low,” he declared.
“It stands to reason that this mutation isn’t a threat, but you never know. We still have to be diligent and continue to look,” added Dr. Nelson Michael, director of the Center for Infectious Diseases Research at the Walter Reed Army Institute of Research. U.S. army scientists have already started doing a computer analysis on genetic sequences of the new U.K. variant, and if there’s additional concern, studies would need to be done in the laboratory and on animals.
World Health Organization officials meanwhile said the coronavirus is mutating “at a much slower rate” than seasonal influenza and “so far, even though we’ve seen a number of changes and a number of mutations, none has made a significant impact on either the susceptibility of the virus to any of the currently used therapeutics, drugs, or the vaccines under development, and one hopes that that will continue to be the case.”
While many nations have banned travel with countries where the strain has been identified, former FDA chief Dr. Scott Gottlieb doesn’t think that’s necessary in the U.S., as the strain is “already” present in the population. “We’re going to have an epidemic that continues to build over the course of the next three or four weeks, we’ll reach a peak, and then we’ll start to see infection rates decline as we see vaccinations get rolled out.”
Crypto crackdown
Regulators appear to be getting serious about crypto as the space turns into one of the investing themes of 2020. A day after the Treasury proposed new rules on crypto movement, the SEC is expected to bring a lawsuit against Ripple Inc. by alleging it violated investor protection laws by selling unregistered securities when it sold (XRP-USD) to investors.
Selloff: Ripple led cryptocurrency losses overnight on the news, down over 17% to $0.4630. Others: Bitcoin (BTC-USD) -5.2%; Ethereum (ETH-USD) -7.2%; Bitcoin Cash (BCH-USD) -14.2%; Litecoin (LTC-USD) -11.4%.
“XRP is a currency, and does not have to be registered as an investment contract,” Ripple CEO Brad Garlinghouse said in a statement. “In fact, the Justice Department and the Treasury’s FinCEN already determined that XRP is a virtual currency in 2015 and other G20 regulators have done the same. No other country has classified XRP as a security.”
“Chairman Jay Clayton – in his final act – is picking winners and trying to limit US innovation in the crypto industry to BTC and ETH,” he added over Twitter. He is “taking notes from the Grinch this holiday season, leaving the actual legal work to the next Administration.” Clayton steps down as SEC chair at the end of the year, ahead of the expiration of his term in June.
Teaming up against antitrust action
Facebook (NASDAQ:FB) and Google (GOOG, GOOGL) agreed to “cooperate and assist one another” if they ever faced an antitrust investigation into their pact to work together in online advertising. That’s according to an unredacted version of a draft lawsuit – seen by the WSJ – that was filed last week by ten Republican attorneys general, led by Texas (the suit, as filed, cites internal company documents that were heavily redacted).
The case: The AGs allege that the two tech giants cut a deal in September 2018 in which Facebook agreed not to compete with Google’s online advertising tools in return for special treatment when it used them. The final version of the lawsuit didn’t make public details about the value of the agreement, but the draft states that starting in the deal’s fourth year, Facebook was locked into spending a minimum of $500M annually in Google-run ad auctions. Facebook COO Sheryl Sandberg also signed the deal with Google and told CEO Mark Zuckerberg and other executives: “This is a big deal strategically.”
Response: The states’ “claims are inaccurate. We don’t manipulate the auction,” a Google spokesperson declared, saying that the deal wasn’t secret and that Facebook participates in other ad auctions. “There’s nothing exclusive about [Facebook’s] involvement and they don’t receive data that is not similarly made available to other buyers.” Facebook has also disputed the allegations, saying its ad bidding arrangements promote choice and create clear benefits for advertisers, publishers and small businesses.
Road to the courthouse: In addition to the suit filed in Texas, Google was hit last week in a separate antitrust lawsuit joined by 38 attorneys general, which alleged that it maintained monopoly power over the internet search market, as well as a DOJ suit filed in October.
How will retail fare into 2021?
More than 11,000 retail location closures have been announced in 2020, according to a report from real estate firm CoStar Group, as the pandemic helped usher in an acceleration of online shopping. “This movie is not finished. I suspect we’re going to see more closings throughout 2021,” said former Macy’s CEO and Chairman Terry Lundgren. “We’re not done yet. … We’re going to learn even more when we get through the holiday season.”
How far back will the effects reverberate into the chain? S&P Global Market Intelligence has picked seven mall owners that face exceptional risks in the coming months like Simon Property Group (NYSE:SPG), Taubman Centers (NYSE:TCO) and Macerich (NYSE:MAC). See more here.
“Retailers which have a weak balance sheet today aren’t going to get relief in January. It’s going to get tougher,” according to Lundgren. “When the volume of purchases drops dramatically after Christmas, the expenses remain.”
Outlook: Many brands have already filed for bankruptcy during the pandemic including Ascena Retail (NASDAQ:ASNA), Brooks Brothers, Century 21, GNC (NYSE:GNC), Guitar Center, J.C. Penney (OTCPK:JCPNQ), J. Crew, Lord & Taylor, Neiman Marcus and Tailored Brands (NYSE:TLRD). Others have been doing exceptionally well like Nike (NYSE:NKE) and Lululemon (NASDAQ:LULU), as workers ditched the office clothes for work-from-home casual wear.
“Businesses with brick-and-mortar locations that outlast the pandemic will benefit,” Lundgren continued. “They’re actually going to have an opportunity to grow again,” he said, predicting it is “probably not too much more than six months from now.”
What else is happening…
Peloton (NASDAQ:PTON) to buy Precor in company’s biggest deal yet.
Streaming shift… Disney’s (NYSE:DIS) legendary studio head steps aside.
Sinovac’s (NASDAQ:SVA) COVID-19 vaccine shown effective in Brazil trials.
Sportsman’s Warehouse (NASDAQ:SPWH) soars on acquisition by Great American Outdoors.
Today’s Economic Calendar
8:30 GDP Q3
8:30 Corporate profits
8:55 Redbook Chain Store Sales
10:00 Consumer Confidence
10:00 Existing Home Sales
10:00 Richmond Fed Mfg.
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Good morning. Happy Monday. Hope you had a good weekend.
The Asian/Pacific markets were split, with some big movers in both directions. China, Taiwan and Indonesia posted gains; Hong Kong, India, New Zealand and Thailand posted losses. Europe, Africa and the Middle East are currently getting crushed. The UK, Poland, France, Turkey, Germany, Russia, Greece, South Africa, Finland, Switzerland, Norway, Hungary, Spain, the Netherlands, Italy, Portugal, Austria, Sweden and the Czech Republic are down 2% or more. Futures in the States point towards a big gap down open for the cash market.
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Online Course: Mini Masterclass in Trading
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The dollar is up. Oil and copper are down. Gold is down; silver is up. Bonds are up.
Stories/News from Seeking Alpha…
Mutant strain dents stimulus optimism
Lawmakers from both parties announced Sunday night that they finally reached an agreement on a $900B coronavirus spending package to bolster the U.S. economy. It would be one of the largest economic relief bills in the nation’s history, second only to the $2.2T CARES Act passed back in March. The legislation includes $600 in direct payments to individuals and $300 per week of enhanced unemployment benefits, as well as funding for small businesses, vaccine distribution, food assistance, education and child care. It also covers rental relief and extends the nationwide eviction moratorium through January 31, 2021. The House is expected to vote on the bill today, followed by the Senate, and while that was supposed to be a catalyst for the market’s next move higher, U.S. stock futures are going in the other direction. Dow -2%; S&P 500 -2.2%; Nasdaq -1.5%.
What happened?
Traders are nervously watching a new COVID-19 mutation in the U.K., which has resulted in a tough lockdown in London and southeast England, and led a number of countries to block travel from Britain. The mutant variant, dubbed B117, could be up to 70% more transmissible than COVID-19, and has already been detected in the Netherlands, Denmark and Australia. Cause of concern: The number of mutations carried by B117, as well as the speed at which it is supplanting other strains of the virus. Some reassurance: So far there is no evidence that the mutations are affecting the course of the illness in infected patients or the effectiveness of COVID-19 vaccines in development. The latest news also hammered the pound, which fell 1.7% to $1.3297, while Brexit trade talks missed another deadline amid few signs that either side is ready to compromise.
Oil sentiment goes into reverse
Just when things were starting to look better for black gold, with WTI transitioning to $50/bbl resistance, a series of announcements over the weekend showed crude investors that they’re not out of the woods just yet. “The oil market has been on a bull trend in the past month or so, ignoring negative factors, amid an optimism that a widening vaccine rollout would revive global growth, but investors’ rosy expectations for 2021 have suddenly vanished due to a new variant of the virus,” said Kazuhiko Saito, chief analyst at commodities broker Fujitomi. Also weighing on the sector… Royal Dutch Shell (RDS.A, RDS.B) said it would write down the value of oil and gas assets by $3.5B-$4.5B, bringing total impairments for the oil major this year to nearly $20B. Crude futures -5.3% to $46.61/bbl.
More on the stimulus bill
The relief package leaves out two of the most contentious elements in the negotiations: legal protections for businesses from coronavirus lawsuits, which had been sought by the GOP, and direct aid for state and local governments advocated by Democrats. A dispute was additionally resolved over the Fed’s emergency lending powers. The central bank wouldn’t be able to replicate programs identical to the ones it started at the beginning of the pandemic without Congressional approval, but that wouldn’t prevent it from starting other similar programs. The airline industry also received a big lift, winning $15B to reinstate payroll reimbursements that expired two months ago.
Who’s next in line for a coronavirus vaccine?
As trucks began delivering Moderna’s (NASDAQ:MRNA) shot to health departments, hospitals and other vaccination sites on Sunday, a Centers for Disease Control and Prevention panel voted on the next groups to receive inoculations. Vaccination is already underway in the U.S. – via the Pfizer (NYSE:PFE) jab – for the so-called phase 1a group, which includes at least 24M healthcare workers and long-term care facility residents. The 1b group, estimated to cover about 49M people, or nearly 15% of Americans, would encompass “frontline essential workers” (i.e. teachers, police and firefighters, grocery workers) and people over 75 years of age. Phase 1c will broaden eligibility to another 129M people, including persons between the ages of 65 and 74, people between the ages of 16 and 64 who have high-risk underlying conditions and remaining “essential workers.” If accepted by the CDC director, the committee’s recommendations will set federal guidance, though state officials are charged with the final say on distribution.
Musk has some fun with Bitcoiners
Tesla (NASDAQ:TSLA) shares went on a wild ride Friday as indexes and ETFs scrambled to get shares before today’s inclusion in the S&P 500. The stock was down 4% with almost 15 minutes left in the session, only to end up 6% (it’s down another 5% premarket). Never one to keep quiet, Tesla CEO and master troller Elon Musk took aim at Bitcoin (BTC-USD) over the weekend, saying the crypto was his “safe word” and it’s “almost as bs as fiat money.” The activity drew a response from MicroStrategy (NASDAQ:MSTR) CEO Michael Saylor (who has invested $1.3B of his company’s money in the crypto), saying, “if you want to do your shareholders a $100B favor, convert the TSLA balance sheet from USD to BTC. Other firms on the S&P 500 would follow your lead & in time it would grow to become a $1T favor.” Musk questioned if such transactions are even possible, though Saylor replied that they are and that he would be happy to share his playbook offline “from one rocket scientist to another.” As for the price of Bitcoin, it took out a $24K milestone this weekend, before falling back (it’s currently at $22.7K).
Merger Monday
Lockheed Martin (NYSE:LMT) is buying rocket engine manufacturer Aerojet Rocketdyne (NYSE:AJRD) for $4.4B as the company beefs up its propulsion capabilities amid competition from new entrants like SpaceX (SPACE) and Blue Origin (BORGN). Speaking of space, Viasat (NASDAQ:VSAT) inked an agreement to acquire RigNet (NASDAQ:RNET) in an all-stock transaction that will see the company diversify across a number of important verticals. Meanwhile, private-equity firm Thoma Bravo struck a deal to buy property-management-software provider RealPage (NASDAQ:RP) for $9.6B, in one of the largest recent leveraged buyouts, while Fidelity National Information Services (NYSE:FIS) and Global Payments (NYSE:GPN) reportedly held unsuccessful talks for a merger deal that could have been valued at $70B.
National security risk
Nokia (NYSE:NOK) and Ericsson (NASDAQ:ERIC) could get a boost as the U.S. takes another step against Chinese telecom equipment giants. Congress wants to fund an almost $2B project to rid U.S. broadband networks of Huawei equipment, which it considers a risk to national security, as well as gear from ZTE Corp. (OTCPK:ZTCOF). In the beginning of the summer, the FCC formally designated the two companies as threats, a declaration that bars U.S. firms from tapping an $8.3B government fund to purchase equipment from the companies. Then earlier this month, the FCC finalized rules that require carriers with ZTE or Huawei equipment to “rip and replace” that gear, but is awaiting funding from Congress.
What else is happening…
Moody’s gives only one finance sector a positive outlook for 2021.
iPhone assembler Wistron placed on probation after riots in India.
EU regulator meets to discuss Pfizer (PFE) vaccine approval.
Smaller contractors play pivotal role in vaccine supply chain.
Today’s Economic Calendar
8:30 Chicago Fed National Activity Index
1:00 PM Results of $17B, 20-Year Bond Auction
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