Before the Open (Aug 9-13)

Good morning. Happy Friday.

The Asian/Pacific were mixed with some moderate-to-big movers in both directions. India, New Zealand and Australia did well; China, Hong Kong, South Korea, Taiwan, Singapore and the Philippines were weak. Europe, Africa and the Middle East are currently mostly up, but there are no big winners. Futures in the States point towards a flat open for the cash market.

Masterclass Overview

The dollar is down. Oil is down; copper is up. Gold and silver are up. Bonds are up. Bitcoin is up.

Stories/News from Seeking Alpha…

Spending slowdown

Shares of Disney (NYSE:DIS) are climbing in premarket trading after its subscriber numbers topped Wall Street expectations. On its earnings call, the company also highlighted a comeback in the consumer as COVID restrictions ease. Parks were profitable for the first time since the onset of the COVID-19 pandemic. Chief Financial Officer Christine McCarthy noted that per capita spending was up “significantly” vs. 2019 numbers, at both Disney World and Disneyland. And reservations remain strong at both domestic resorts, she said, but a recent credit card survey from BofA Securities indicates that spending is already slowing.

“With the full month of July data, we calculate the seasonally adjusted change from June to July. Total card spending was down 1.3% on a month-over-month seasonally adjusted basis (mom sa),” BofA Economist Michelle Meyer writes in a note. “Slicing the data further, retail sales ex-autos were down a more notable 2.4% mom sa.”

There are two main reasons for the decline, Meyer says: A decline in online retail sales due to the timing of Prime Day promotions, which are usually in mid-July. The increase in services spending moderated and was unable to offset the weakening in goods spending.

Higher cases and higher prices: While U.S. shoppers have savings to deploy following the pandemic and little place to find yield, caution in going out and spending the cash remains.

“The biggest deceleration continues to be in spending on airfare which we think reflects concerns over the Delta variant. At the same time, durable goods spending (electronics + furniture + home improvement) weakened, with 2-year growth of 24%,” Meyer says. “What’s left? A combination of other services which tend to be less cyclical and nondurable goods spending which continues to run at a trend pace.”

“The urban cities, like New York, Chicago and San Francisco, aren’t feeling the same recovery as the Sunbelt states and less populated areas,” Naveen Jaggi, president of retail advisory firm JLL told Forbes. “Combine this with many corporate offices slowing their return to the office. We are going to have a very uneven return to work and we are going to have an even longer return to the shopping habits of yesterday.”

Rising prices in services could add to the reluctance. Tyson Foods (NYSE:TSN) recently warned that it is racing to pass on the rise on its higher costs to customers, which indicates higher restaurant checks ahead. The July PPI came in hotter than expected, underscoring input cost concerns.

Disney streaming

Walt Disney’s (NYSE:DIS) fiscal third-quarter earnings topped expectations on top and bottom lines and exceeded forecasts for its subscribers to streaming service Disney+. Those subscribers hit 116 million, vs. an expected 112.8 million. Across its streaming services, including Disney+, ESPN+ and Hulu, the company is near 174 million subscribers.

Revenues grew 45% to $17 billion, and the company swung back to a $995 million profit from last year’s $4.84 billion loss. Earnings from continuing operations swung to a gain of 50 cents a share from a year-ago loss of $2.61 a share. Adjusted earnings jumped to 80 cents a share from 8 cents a share in the year-ago quarter.

ARK on robots

Cathie Wood’s ARK Invest said in a new report that robotics use in the manufacturing industry is in its infancy, and wider adoption could help S&P Industrials stocks.

ARK wrote in the report that machines have altered the agriculture business over the past century, enhancing its profitability and offering a hint at what could be an impending, similar manufacturing revolution. The firm said that while robot usage in overall manufacturing is already six times higher than in all other industries, it’s still one-sixth that of the auto industry and one-fifteenth that of Amazon (NASDAQ:AMZN).

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Airbnb bookings rebound

Airbnb (NASDAQ:ABNB) reported gross booking value of $13.4B in Q2 vs. the consensus mark of $11.2B and $10.3B in Q1. Revenue for the quarter was up 299% Y/Y against the soft pandemic comparable and the company’s loss narrowed to $68M. Nights and experiences booked rose 197% during the quarter to 83.1M.

ABNB’s demand update: “We expect Q3 2021 to be our strongest quarterly revenue on record, finishing well above Q3 2019 levels. Our Q3 revenue as a percentage of GBV will increase substantially from Q2 due to the high concentration of check-ins expected in Q3.” Looking ahead, Airbnb expects adjusted EBITDA margins to be higher in the second half than in the first half.

Chip slip

Semiconductor stocks underperformed the broader market after a cautious note from Morgan Stanley forecast the coming end to the memory cycle and downgraded Micron (NASDAQ:MU) to the sidelines. The Philadelphia Semiconductor Index (NASDAQ:SOXX) fell 1.1% compared to a 0.6% rise in the broader tech sector (NYSEARCA:XLK).

Micron’s NAND memory peer Intel (NASDAQ:INTC) also traded down despite Morgan Stanley’s more positive view on NAND versus DRAM. Late last year, Intel announced plans to sell its NAND memory and storage business to SK hynix for $9 billion, but the deal isn’t expected to close until later this year.

Bitcoin bandwagon

Valkyrie is the latest issuer looking to launch a Bitcoin (BTC-USD)-themed ETF. The company wrote in a U.S. Securities and Exchange Commission filing that it plans to soon launch the Valkyrie Bitcoin Strategy ETF, an actively managed fund that has not been given a formal ticker symbol yet.

The fund “seeks to achieve its investment objective by investing all or substantially all of its assets in exchange-traded futures contracts on Bitcoin.” As with other Bitcoin strategy funds, the new Valkyrie ETF won’t directly hold Bitcoin, as that’s not yet allowed by the SEC. Instead, it will use Bitcoin futures to give investors exposure to the popular cryptocurrency.

ETF issuers have been piling into this new approach ever since ProFunds recently launched the first Bitcoin mutual fund, which also uses crypto futures to get around SEC rules banning outright Bitcoin holding by funds. Since then, Invesco, ProShares, VanEck and other firms have all filed plans to launch Bitcoin Strategy ETFs.

Today’s Economic Calendar
8:30 Import/Export Prices
10:00 Consumer Sentiment
1:00 PM Baker-Hughes Rig Count

Companies reporting earnings today »

What else is happening…

Meme stock action could shift the market back to 1999.

Moderna (NASDAQ:MRNA) says COVID-19 shot retains antibody levels for six months against variants.

SoFi Technologies (NASDAQ:SOFI) stock dips after soft Q3 guidance.

Qualcomm (NASDAQ:QCOM) gets mild lift as Canaccord raises target to $225 a share.

FTC chief’s comments send Aerojet Rocketdyne (NYSE:AJRD) reeling.

Sports betting is legal in 32 states with another 4 on the way.

Wish parent company ContextLogic (NASDAQ:WISH) slumps as quarterly results disappoint.

Boeing (NYSE:BA) Starliner launch could face several months’ delay.


Good morning. Happy Thursday.

The Asian/Pacific leaned down. India and Indonesia did well; China, Hong Kong, South Korea, New Zealand, Thailand and the Philippines were weak. Europe, Africa and the Middle East currently lean up but are mostly mixed and little changed. Turkey, the UAE, Russia, Germany, Israel and the Czech Republic are up; South Africa is down. Futures in the States point towards a flat open for the cash market.

Masterclass Overview

The dollar is unchanged. Oil is down; copper is up. Gold is flat; silver is down. Bonds are unchanged. Bitcoin is down.

Stories/News from Seeking Alpha…

Inflation conundrum

Inflation data is rivaling nonfarm payrolls in terms of market enthusiasm lately as Wall Street tries to gauge when the Federal Reserve will make its move to curb asset purchases. The debate over transitory vs. persistent will continue through today as data on the input side arrives before the bell.

The Labor Department releases the July PPI report at 8:30 a.m. ET. Economists are predicting a headline rise of 0.6% for the month, with the annual rate staying at 7.3%. The core PPI, excluding food and energy, is expected to have risen 0.5% in July, with the year-over-year rate remaining at 5.6%.

Input cost inflation has been plagued by the same large price swings that the Fed has argued are transitory on the retail side, such as a spike in lumber prices, which has subsided, and a shortage of semiconductors, which is still a problem. And while companies have been announcing price increases through this and the last earnings seasons, there are concerns that more sticker shock is in store for consumers.

Tyson Foods (NYSE:TSN) CEO Donnie King said on the company’s earnings call this week that Tyson has seen “accelerating and unprecedented inflation” and “costs are hitting us faster than we can get pricing at this point.”

Ammo for both camps: Yesterday’s July CPI numbers showed a cooler-than-expected core rise and moderate price gains in hot sectors, but a headline number still well above 5%. “Inflation has, at a minimum, paused,” Brad McMillan, chief investment officer at Commonwealth Financial Network, told CNBC. “For both the headline and core figures, the monthly and annual numbers were stable or down from last month. Based on that data, inflation is certainly not on an unstoppable increase.”

“The inflation data for July moderated somewhat, at least relative to the heady pace of recent months, which should temper market and policymaker concerns a bit, despite the fact that inflation will stay sticky-higher for a while and the risk to inflation from here remains on the high-side,” BlackRock’s Rick Rieder writes.

David Kelly, chief global strategist at J.P. Morgan Asset Management, said this was “still a very hot report” and that some of the higher prices will stick around for the rest of the expansion. “We’re too obsessed with second derivatives here, we still have a five handle on inflation.”

In a Bloomberg column this morning, Mohamed El-Erian, chief economic advisor at Allianz, says the report supports both sides of the debate. The transitory inflation camp will point to “the retreat of items that have been chief contributors to the surge in inflation, such as used-car prices and airfares,” while those who worry about sustained economic damage from persistent inflation will point to higher food prices and the initial stages of wage-push inflation.

Overall, “it would be better to tilt toward what company after company has been saying about cost and price pressures rather than rely on macroeconomic models that inevitably struggle to capture pandemic-related changes,” he says.

Whither yields? The Treasury market still remains a bit of a puzzle, with benchmark 10-year yields have risen 20 basis points in 10 days, but still historically very low for the kind of growth and inflation numbers the market is seeing. Yesterday provided another head-fake as the 10-year failed to take its cue from the CPI. Instead, it reacted much more to the strong demand for the $41B 10-year auction, where bid-to-cover was the highest since May 2020, which Jefferies called “one for the record books.” This morning the 10-year (NYSEARCA:TBT) (NASDAQ:TLT) is down 2 basis points to 1.34%.

The “post-CPI reaction is a fairly classic sign of the market, albeit modestly, pushing back its expectations for when the FOMC may take their ‘foot off the gas’ and begin to taper asset purchases,” Michael Brown, senior market analyst at Caxton writes. “I think, however, that such a view may be misplaced, given that yesterday’s inflation print was broadly in line with where the FOMC would’ve expected it to be.”

Goldman Sachs cut its 2021 expectations for the 10-year yield this week, now calling for a rise to 1.6%, down from 1.9%. “In looking ahead, we expect erosion of labor market slack should continue to translate primarily to higher real yields, which we expect to be the main driver in taking yields towards our revised year-end target,” Goldman said. “Notably, inflation out the forward curve is broadly priced at levels consistent with core PCE remaining around 2% (or higher), and while the delta variant poses some upside risks to inflation, our economists do expect pressures to subside over the coming quarters.”

Booster shots

On Thursday, the FDA is set to amend the emergency use authorizations granted for COVID-19 vaccines developed by Pfizer (NYSE:PFE)/BioNTech (NASDAQ:BNTX) and Moderna (NASDAQ:MRNA), allowing the immunocompromised people to get a third shot, NBC News reported.

The move follows a meeting of an advisory panel of the CDC in July that urged the use of booster COVID-19 shots for adults with compromised immune systems. Such regulatory action from the FDA is required as a CDC expert panel is scheduled to meet on Friday to decide on the need for extra vaccine doses for the immunocompromised. Their signoff is necessary for doctors to prescribe booster shots.

DoorDash-Instacart M&A

DoorDash (NYSE:DASH) is said to have held talks to purchase Instacart (ICART) over the past two months that may value the grocery delivery company at $40B to $50B. The talks fell apart in recent weeks at least partly over regulatory concerns that the Biden administration may not allow a combination, according to a The Information report, which cited people familiar.

Instacart initiated the talks with DoorDash looking for a merger, according to the report. Instacart separately started talks with Uber, looking for a sales partnership, similar to Uber’s announced deal with Gopuff.

When it comes to sources we trust, the masterminds at Goldman Sachs are up there. So when they say that “bitcoin is not an investable asset,” we’re inclined to agree.

Cleverly marketed as “digital gold,” Goldman argues bitcoin has failed as both a store of value and hedge against inflation.

On the other hand, there’s an estimated $1.7 trillion asset class that 86% of advisors agree should be included in wealth management offerings: art.

0.01 correlation factor to public equities from ‘95–’20

Contemporary art prices rose 14% avg/year from ‘95–20

Total wealth in art is projected to grow by $1 trillion by 2026

With results like that, it’s no wonder that financial gurus like Steve Cohen and Leon Black invest billions in art. We’ve partnered with this art investing platform allowing Wall Street Breakfast readers to skip their waitlist*

App store battle

U.S. Sens. Richard Blumenthal (D-Conn.) and Marsha Blackburn (R-Tenn.) said Wednesday that a proposed bill aimed at antitrust practices in app stores will encourage innovation and create a more competitive market.

Blumenthal told CNBC that the legislation was designed to “break the ironclad grip” Apple (NASDAQ:AAPL) and Google parent Alphabet (GOOG, GOOGL) have on the app store sector. Speaking in the same CNBC interview, Blackburn argued that a more diverse environment for apps will help smaller companies find funding and ultimately lead to more breakthroughs in the industry.

Accenture attack

Accenture (NYSE:ACN) is the latest target of ransomware hackers who threatened to release stolen data within several hours of the breach.

CNBC reporter Eamon Javers says the hacking group is also offering to sell insider information to interested buyers. A Dark Web post attributed to the hackers says Accenture “is beyond privacy and security” and offers to sell databases.

Accenture confirmed the breach to CNBC but says it quickly identified irregular activity in one of its environments and immediately contained and isolated the affected servers.

Today’s Economic Calendar
8:30 Initial Jobless Claims
8:30 Producer Price Index
10:30 EIA Natural Gas Inventory
1:00 PM Results of $27B, 30-Year Note Auction
4:30 PM Fed Balance Sheet

What else is happening…

CDC recommends COVID-19 vaccination during pregnancy amid surge in Delta variant.

Moderna (NASDAQ:MRNA) slips as EU regulator cites more side effects possibly linked to COVID-19 shot.

Opendoor Technologies (NASDAQ:OPEN) stock surges after Q3 guidance exceeds consensus.

Coupang (NYSE:CPNG) stock plunges after earnings miss.

Wayfair (NYSE:W) soars after unleashing big buyback plan.

Robinhood (NASDAQ:HOOD) to use Say technology for earnings call Q&A.

Carvana (NYSE:CVNA) to invest $126M in Root (NASDAQ:ROOT) as part of the partnership.


Good morning. Happy Wednesday.

The Asian/Pacific were mixed. Japan, Hong Kong and the Philippines closed up; South Korea, Turkey, Spain and Thailand closed down. Europe, Africa and the Middle East currently lean up but are mostly mixed and little changed. Denmark, Hungary, Spain, Italy and the Czech Republic are up; Turkey is down. Futures in the States point towards a positive open for the cash market.

Masterclass Overview

The dollar is down. Oil is down; copper is up. Gold and silver are up. Bonds are mixed. Bitcoin is up slightly.

Stories/News from Seeking Alpha…

Meme stock stumble

AMC (NYSE:AMC) looked to hit all the right notes for its devoted retail investors on the earnings call, but an early pop in shares fizzled, wiping out the gains heading into the report. The stock closed down 6% yesterday and nearly 14% from where shares opened when it looked like another push from the “Ape Army” was on its way.

CEO Adam Aron, known to the Army as Silverback, played to that crowd in the earnings call, floating ideas for a retail audience that cares much more about wild innovation than classic valuation.

Yes, AMC would consider partnering with GameStop (NYSE:GME). Sure, you will be able to pay for tickets and concessions with bitcoin (BTC-USD) by the end of the year. But Aron did balk at the idea of making a gorilla the official AMC mascot and dismissed a return of drive-in theaters as simply a bad economic idea. You can read the full transcript of the earnings call on Seeking Alpha.

From a more fundamental perspective AMC’s results looked good at first blush, beating estimates and noting $2B in liquidity. That led to the initial extended-hours pop in shares. But big concerns about the business model remain.

SA contributor ASB Capital is says that attendance is simply not improving enough. Another SA contributor The Asian Investor notes that the “size of AMC’s losses and the deeply negative cash flow in Q2’21 show that AMC faces numerous business challenges that are so far unaddressed, especially the high cash burn.”

Aron is “telling you that the industry will not be back to normal in 2021, probably will not be back to normal in 2022, and the company only ‘maybe’ has enough cash to survive anything much less than a full recovery in two years.” Unsurprisingly, short-seller Jim Chanos, who is betting on AMC to fall, blasted the Apes for trading for “misguided reasons” and not seeing the risks in the company model or the high valuation. “If you keep doing dumb things, if you keep saying, ‘I’m a nihilist, I eat crayons, I don’t care about this, I don’t care about that,’ well if you end up losing money, you only have yourself to blame,” he said.

Retail interest rising: As AMC devotees prepare to make another stand for the stock at the $30 level, there are few signs of a new big meme name on the cusp of unprecedented gains. EV battery company Microvast (NASDAQ:MVST) has recently topped the mentions list for the WallStreetBets subreddit, according to Quiver Quantitative. But its moves, while big, have been choppy rather than straight up.

However, Morgan Stanley notes that retail investing interest is picking up recently, with a bias towards more buying. “Retail participation is currently at 9.4% of the total market volume, which is in the 76th percentile relative to the last 5 years,” Morgan Stanley’s Quantitative Equity Strategy team writes. “Order imbalance has remained slightly positive. It currently sits at 0.6% or 62nd percentile relative to the last 5 years.”

Real Estate (NYSEARCA:XLRE) and Health Care (NYSEARCA:XLV) have the biggest positive buy/sell imbalances among retail traders, so the next meme favorite could come from those sectors. Materials (NYSEARCA:XLB) and Consumer Staples (NYSEARCA:XLP), also not readily associated with the retail crowd, have positive imbalances as well. Only Energy (NYSEARCA:XLE) and Industrials (NYSEARCA:XLI) are negative.

Is China ‘uninvestable?’

ARK Investment Management CEO Cathie Wood dumped her Chinese tech holdings in the wake of the country’s regulatory crackdown, but she’s not closing the door completely. In ARK’s monthly webinar yesterday, Wood, whose flagship ARK Innovation ETF (NYSEARCA:ARKK) is down 3% in the past month, raised the question of whether China is “uninvestable” herself.

“Well, I would say in any of the areas we are looking right now the multiples structure, the valuation structure of those companies is down and probably not going to come back quickly and may even go down more.” But she later said: “I’m sure we’re going to find some very interesting companies in the innovation space, and so we’re going to keep an open mind there.”

ARK also noted Tuesday that there are opportunities in Chinese healthcare for two critical reasons: overwhelmed physicians and underfunding.

China’s long-term goals: UBS came out with a note this week arguing that the “uninvestable” concerns are overstated. “First, these (listing) actions do not change China’s long-term priority to develop strategically important industries and technologies, which offer compelling growth opportunities to investors,” emerging market strategists wrote. “Second, China has engaged in a multi-year process of opening up its financial markets to global investors, and there is no indication of a reversal of that process. Any changes to the VIE structure or other measures that would deter foreign investor interest would be at odds with this policy objective. Third, the markets are already pricing a sizable policy risk premium into Chinese equities, and while that doesn’t preclude further downside in the near term, we see long-term value being created as a result of the recent market declines. Fourth, potential delistings do create possible disruptions for U.S. investors that own, either directly or indirectly, the ADRs, but these should be temporary and can be managed.”

UBS does expect more regulatory moves, so is staying neutral on China stocks for the next 6-12 months, leaning to sectors with less policy headwinds like green tech, consumer durables and energy and away from healthcare, property and Internet.

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ViacomCBS courts suitors

ViacomCBS (VIAC, VIACA) is halting any potential talks with Comcast (NASDAQ:CMCSA) as Chairman Shari Redstone puts an eye toward lining up more suitors for the company, the New York Post reports.

Redstone reportedly is pushing any more talks (about a merger, or joint venture on streaming) with Comcast chief Brian Roberts into next year, according to the report.

Board members are reportedly telling Redstone that there are multiple suitors for the business if she shops around and doesn’t give in to consolidation panic.

$600M crypto hack

Cross-chain protocol Poly Network was hacked for $611M, the largest DeFi hack to date, The Block reports. The Poly Network is a protocol used to trade tokens among a variety of blockchains. Apparently, the root cause of the hack was a cryptography issue, which is not usually the case.

Assets that were stolen in the hack include $273M of Ethereum (ETH-USD) tokens, $253M of Binance Smart Chain tokens, and $85M in USCoin (USDC-USD) on the Polygon Network.

Final COVID wave?

Dr. Scott Gottlieb, the former commissioner of the FDA, has told CNBC that the current surge in COVID-19 cases in the U.S. may be the “final wave” of the pandemic in the U.S. “I don’t think COVID is going to be epidemic all through the fall and the winter. I think that this is the final wave, the final act, assuming we don’t have a variant emerge that pierces the immunity offered by prior infection or vaccination,” he said.

Dr. Gottlieb thinks that the high transmissibility of the Delta variant combined with the rising vaccination rates could transform the course of future infections.

TMZ for sale

AT&T’s (NYSE:T) WarnerMedia is in discussions to sell its tabloid entertainment brand TMZ to Fox (FOX, FOXA), The Information reports.

It’s the latest move from AT&T to sell off its businesses in order to focus on connectivity – moves that will find their nexus in the planned spinoff and merger of WarnerMedia itself to merge with Discovery (NASDAQ:DISCA).

Today’s Economic Calendar
7:00 MBA Mortgage Applications
8:30 Consumer Price Index
10:00 Atlanta Fed’s Business Inflation Expectations
10:30 EIA Petroleum Inventories
10:30 Fed’s Bostic: “The Federal
Reserve’s Role in Making This an Economy That Works for Everyone”
12:00 PM Fed’s George: “A View from the Federal Reserve Bank of Kansas City”
1:00 PM Results of $41B, 10-Year Note Auction
2:00 PM Treasury Budget

Companies reporting earnings today »

What else is happening…

AT&T (NYSE:T) update: Expecting higher service revenue growth, $17B in 2021 capex.

Upstart (NASDAQ:UPST) stock surges 15% after strong guidance, solid earnings beat.

Coinbase (NASDAQ:COIN) EPS beats by $3.84, beats on revenue.

Lenovo Group (OTCPK:LNVGY) ADR beats on revenue.

Micron (NASDAQ:MU) CFO discusses continuing supply chain shortages.

Electric vehicle stocks get another look from investors after infrastructure bill passes the Senate.

Alight (NYSE:ALIT) gains after report Voya Financial (NYSE:VOYA) is considering acquisition.


Good morning. Happy Tuesday.

The Asian/Pacific leaned to the upside. China, Hong Kong, New Zealand, Malaysia and Singapore did well; South Korea and Taiwan were weak. Europe, Africa and the Middle East currently lean up but are mostly mixed and little changed. South Africa, Israel and Saudi Arabia are up; Hungary is down. Futures in the States point towards a flat open for the cash market.

Masterclass Overview

The dollar is up. Oil is up; copper is flat. Gold and silver are up. Bonds are flat. Bitcoin is up slightly.

Stories/News from Seeking Alpha…

Climate code red

The United Nations issued a stark warning on climate change yesterday with a call for immediate large-scale action on cutting emissions. The Intergovernmental Panel on Climate Change’s report put the blame “unequivocally” on human activity and U.N. Secretary-General António Guterres said the findings were a “code red for humanity.”

Some changes are already locked in, with Greenland’s land-ice sheet expected to keep melting, leading to rising sea levels. Heat waves that occurred once in 50 years are now happening every 10 years. Currently, the Dixie Fire in California is now the second-largest wildfire in the state’s history and could take weeks to contain. And the harshest heat wave in 30 years is leading to damaging wildfires across Greece and Italy.

There’s a general acknowledgment on Wall Street that moving away from fossil fuels, the biggest cause of carbon emissions, will happen. Just look at the performance of Tesla and the EV sector, but environmentally friendly investing hasn’t paid off so far in 2021.

Green stocks in the red: Bloomberg’s Cormac Mullen notes today the weak performance of the S&P Global Clean Energy Index (NASDAQ:ICLN), which is down nearly 18% year to date and more than 30% since its peak in early January as President Joe Biden’s inauguration approached. The MSCI World Index is up nearly 16% year to date and up more than 13% from ICLN’s peak.

Among other clean energy ETFs, the Invesco MSCI Sustainable Future ETF (NYSEARCA:ERTH) is down more than 10% year to date and nearly 20% off from the post-Biden election peak. The VanEck Vectors Low Carbon Energy ETF (NYSEARCA:SMOG) and First Trust NASDAQ Clean Edge Green Energy Index ETF (NASDAQ:QCLN) are down more than 2% year to date and about 16% off January highs.

Wall Street opportunities: Biden’s recent executive order for 50% of cars to be EV by 2030 has received the support of Detroit. And UBS notes that more than 50 large investors with $14T in investments have come together to call on companies to outline “net zero” commitments for 2050.

“The U.S. SEC may propose by year-end that listed firms report climate data and will also look at the criteria for investment funds claiming the sustainability or ESG label,” UBS says. UBS says it sees carbon-neutral opportunities in autos, auto parts, batteries, electric and electronic components and green tech.

“With the global race to win the EV market well underway, we expect growth to be exponential rather than linear,” it adds. “By 2025, we think around 25% of new cars may be electrified. By 2030, the share may reach 60–70%.”

Morgan Stanley says the bipartisan infrastructure bill “could set the stage for a potentially more substantive reconciliation bill – the Administration’s first opportunity for meaningful climate legislation.”

Yesterday it refreshed its “Decarbonization Playbook” of stocks rated Overweight or Equal Weight with “more direct exposure to legislative support,” analyst Devin McDermott writes. Those stocks and themes include: “Air Products (NYSE:APD) (OW; hydrogen & carbon capture), Archer Daniels Midland (NYSE:ADM) (EW; carbon capture), Bloom Energy (NYSE:BE) (EW; hydrogen and potentially carbon capture), CF Industries (NYSE:CF) (EW; green/blue ammonia/hydrogen & carbon capture), Exelon (NASDAQ:EXC) (OW; nuclear), Exxon (NYSE:XOM) & Chevron (NYSE:CVX) (OW; carbon capture, renewable fuels and/or hydrogen), Linde (NYSE:LIN) (OW; hydrogen & carbon capture), New Fortress Energy (NASDAQ:NFE) (OW; hydrogen), NextDecade (NASDAQ:NEXT) (OW; carbon capture), Nutrien (NYSE:NTR) (EW; green/blue ammonia/hydrogen & carbon capture), Occidental Petroleum (NYSE:OXY) (OW; carbon capture), Plug Power (NASDAQ:PLUG) (EW; hydrogen), Sunrun (NASDAQ:RUN) (OW; solar), and Tesla (NASDAQ:TSLA)(OW; EVs).”

AMC on offense

Meme stock AMC (NYSE:AMC) is rallying premarket after handily beating quarterly estimates, reporting $2B in liquidity and saying that it will accept bitcoin (BTC-USD) by year-end.

CEO Adam Aron broke a bit of news on the earnings call by disclosing that after the ArcLight and Pacific shutdowns, AMC is executing leases to add two of Los Angeles’ highest-grossing theaters to its stable. “It’s high time for AMC to start playing on offense again,” Aron said. And it’s not just two new theaters, it might be 10, he says. There are six new pickups under lease or letter of intent, and they’re in advanced talks to add four more.

Aron had started by paying tribute and playing to the “AMC Army” of retail holders, offering a “warm welcome” to the thousands of stockholders listening, and the many more who would listen to replays. And citing all the ideas he’s gotten from the retail investor army, Aron says by year-end AMC will have the information technology systems in place to accept bitcoin as payment for tickets and concessions (if bought online) at all U.S. theaters. And since they’re doing that, he says they’re adding the ability to accept Apple Pay and Google Pay.

Victoria’s Secret surge

Victoria’s Secret (NYSE:VSCO) jumped 20% after catching another bull rating from Wall Street. J.P. Morgan is constructive on the new standalone retail stock with an Overweight rating and December 2022 price target of $100.

The firm points to a compelling entry point on what it notes is the top market share player in U.S. lingerie with +25% share across ~65% of its revenue base (women’s mass fragrance, nightwear, and underwear). J.P. Morgan also points to a +$300M category recapture opportunity in women’s swimwear.

Moderna rallies

As the FDA evaluates the option of introducing COVID-19 booster shots, Moderna (NASDAQ:MRNA) is continuing its upward trend, with a 17% gain yesterday, its biggest one-day gain since November 2020.

In late November, Moderna shares climbed in reaction to the company’s announcement of filing for the Emergency Use Authorization (EUA) for the COVID-19 vaccine in the U.S.

Highlighting the investor interest in COVID-19 vaccine makers, CNBC contributor Stephen Weiss noted the support for booster shots extended by the White House chief medical adviser, Dr. Anthony Fauci.

Roundup appeal

Bayer (OTCPK:BAYRY) has lost another appeal of a jury verdict finding its Roundup weedkiller causes cancer, its third-straight appeals court defeat among the cases that have gone to trial.

A California state court of appeals today refused to overturn the 2019 jury verdict that awarded more than $2B to a couple who claimed they were sick after using Roundup for more than 30 years; the court also left intact the trial judge’s decision to reduce the award to $86.7M.

Bayer recently said it set aside an additional $4.5B to handle Roundup lawsuits, bringing its reserves for the cases to more than $16B.

Amazon departure

Charlie Bell, a 23-year veteran of Amazon Web Services (NASDAQ:AMZN), is said to be leaving the company, according to a report from The Information. Bell’s departure was confirmed by Amazon, the report said, though the company declined to comment further.

Bell oversaw the development of AWS services, from computing to storage to databases, The Information said. Bell, a senior vice president, reported directly to AWS CEO Adam Selipsky.

Today’s Economic Calendar
6:00 NFIB Small Business Optimism Index
8:30 Productivity and Costs
8:55 Redbook Chain Store Sales
1:00 PM Results of $58B, 3-Year Note Auction
2:30 PM Fed’s Evans Speech

Companies reporting earnings today »

What else is happening…

Moderna (NASDAQ:MRNA) COVID-19 vaccine may be better than Pfizer (NYSE:PFE) against Delta variant.

SoftBank Group (OTCPK:SFTBY) reports results.

Chinese education tech stocks mount comeback.

Amazon (NASDAQ:AMZN) reportedly willing to bail out Future Retail.

Cloudflare (NYSE:NET) plans $1B convertible note offering.

Apple (NASDAQ:AAPL) reportedly talking to Korean manufacturers for Apple Car.

Gold sinks below $1,700 before bouncing; miners broadly in the red.

Sony (NASDAQ:SONY) closes on $1.175 billion Crunchyroll purchase from AT&T (NYSE:T).


Good morning. Happy Monday. Hope you had a good weekend.

The Asian/Pacific leaned to the upside. China, Hong Kong, Malaysia, Thailand and the Philippines did well; New Zealand and Indonesia were weak. Europe, Africa and the Middle East currently lean up but are mostly mixed and little changed. Denmark, South Africa, Switzerland and Italy are up; Israel is down. Futures in the States point towards a flat open for the cash market.

Masterclass Overview

The dollar is down slightly. Oil and copper are down. Gold and silver are down. Bonds are mixed. Bitcoin is up.

Stories/News from Seeking Alpha…

Vaccine mandate surge

Dr. Anthony Fauci says he is hopeful full approval of COVID-19 vaccines by the Food and Drug Administration will come in August and also expects that to spur a large number of vaccine mandates by private companies and institutions.

“No one wants to get ahead of the FDA because they’re an independent group that makes their decisions and that’s good in many respects because there will never be any concerns that we are influencing them, but I hope, I don’t predict, but I hope that it will be within the next few weeks,” Fauci said on NBC’S “Meet the Press.” “I hope that it’s within the month of August.”

That, in turn, could lead to “a flood” of mandates for vaccines, although not at the federal level, he told USA Today’s editorial board in a wide-ranging interview. “Organizations, enterprises, universities, colleges that have been reluctant to mandate at the local level will feel much more confident,” Fauci said.

“They can say: ‘If you want to come to this college or university, you’ve got to get vaccinated. If you want to work in this plant, you have to get vaccinated. If you want to work in this enterprise, you’ve got to get vaccinated. If you want to work in this hospital, you’ve got to get vaccinated.'”

Fauci adds he does not expect the economy to go into lockdown again. National Institute of Health Director Dr. Francis Collins said on ABC’s “This Week” he supported businesses deciding to mandate for vaccines, saying “we ought to use every public health tool that we can when people are dying.”

“Unless we vaccinate everyone in 200 plus countries, there will still be new variants,” epidemiologist Dr. Larry Brilliant told CNBC Asia, who predicts COVID could become a “forever virus” like the flu.

What this could mean for stocks: So far, public companies have been proactive with mask mandates in high-infection areas and some companies, like Microsoft (NASDAQ:MSFT), are requiring employees to be vaccinated. Norwegian Cruise Line (NYSE:NCLH) said on Sunday that a judge had temporarily halted a Florida law prohibiting the requirement to show proof of vaccination, paving the way for the company to ask for proof from its travelers.

These moves have been well received by Wall Street, overall, with the S&P and Dow moving back into record territory amid the announcements. Wells Fargo cites the high U.S. vaccination rate as a chief reason that the economy will not face the disruptions it did during the initial outbreak.

“The bottom line is we do not expect the Delta variant to create meaningful headwinds for the economy as was the case in the early stages of the COVID-19 pandemic,” strategist Scott Wren wrote in a note, but UBS highlights the risk of more mutations.

“While economic fundamentals remain incredibly positive in most major markets, this will only remain the case so long as populations worldwide reach herd immunity levels before mutations such as the Delta variant compromise the protection offered by current vaccines,” it said.

Connected TV

Viewer trends are slowly starting to level off in streaming after a disruptive year in the COVID-19 pandemic and one trend looks to be holding true: the resumption of a secular decline in broadcast and cable viewing, but that is leaving room for ongoing healthy growth in connected devices. A State of Viewership report from Samba TV indicates the top two platforms in terms of total impressions are Roku (NASDAQ:ROKU) and Amazon (NASDAQ:AMZN).

Roku impressions are up 27% from Q1, and Amazon up 49%. Comparing them to Q4 2020, Roku is up 118% and Amazon up 204%. Contrast that with cable (down 25% from a year ago) and broadcast television (down 19% over that span). Those drops were more muted vs. 2019 for cable (cable -7% vs. Q2 2019, broadcast -12%), suggesting that “cable networks are stabilizing to pre-pandemic levels more readily than broadcast after spikes during the height of the pandemic-related lockdowns.”

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Soliton deal

AbbVie (NYSE:ABBV) said that it’s received a request for additional information from the U.S. Federal Trade Commission in regard to its planned acquisition of Soliton (NASDAQ:SOLY).

AbbVie and Soliton received a so-called “second request” from the antitrust agency on Friday, according to an 8-K filing.

The effect of the second request is to extend the waiting period imposed by the HSR Act until 30 days after the company and AbbVie have certified substantial compliance with the second request, unless that period is extended voluntarily by the parties or terminated sooner by the FTC.

Tesla Cybertruck

The first deliveries of Tesla’s (NASDAQ:TSLA) Cybertruck electric pickup are not anticipated until next year. As spotted by Electrek, Tesla updated the footnotes on its order page to indicate that the Cybertruck configurator will be available when production nears in 2022.

At the beginning of the year, Elon Musk lowered expectations by saying that the company expected a few deliveries of the Cybertruck toward the end of this year, but “volume production” to be in 2022.

The Cybertruck seems to have a larger role in the bull vs. bear debate on TSLA than might be expected with Model 3 and Model Y production ramping up.

Alibaba culture

Alibaba (NYSE:BABA) has fired a manager who allegedly sexually assaulted a female employee, Reuters reports.

Also, the Chinese e-commerce giant has suspended several staff after an employee’s account of her ordeal went viral on social media and exposed “problems” with the culture at China’s e-commerce leader.

Over the weekend, a female staffer posted an 11-page account on Alibaba’s intranet in which she said her supervisor and a client sexually assaulted her while on a business trip, and that managers had failed to take action.

Taper talk

With fears that the spreading COVID-19 Delta variant would slow the economic recovery, it appeared the “reflation trade” narrative was unwinding after an April peak. But then the July’s nonfarm payrolls report came in hotter than expected, adding 943K jobs vs. 900K consensus. That implies that the economy may be strong, for the Federal Reserve, enough to start tapering its assets purchases sooner rather than later.

In other words, it suggests that the Fed’s goals of “substantial further progress” have been notably accelerated, and as a result, investors dived out of the long bond (NASDAQ:TLT) (-1.5%), while the 10-year UST yield climbed 6% to 130 basis points; Financials (NYSEARCA:XLF) (+1.9%), Bitcoin (BTC-USD) (+2.3%), and some agricultural commodities traded higher on Friday.

The unemployment rate of 5.4% also beat the 5.7% estimate and fell from 5.9% in June, however, “we’re still down over 8M jobs from where we could have been absent the pandemic,” Nick Bunker, an economist at job-posting site Indeed, said in a tweet.

Today’s Economic Calendar
10:00 Job Openings and Labor Turnover Survey
10:10 Fed’s Bostic: “Building an Inclusive Economy”
11:30 Fed’s Barkin Speech
12:30 PM Investor Movement Index

Companies reporting earnings today »

What else is happening…

TikTok owner ByteDance (BDNCE) is said to target IPO in Hong Kong early next year.

Pfizer (NYSE:PFE) vaccine booster shot has similar side effects to 2nd dose: Israeli survey.

Morgan Stanley swaps Energy (NYSEARCA:XLE) for Utilities (NYSEARCA:XLU): Sector Watch.

FDA decision on Eton’s (NASDAQ:ETON) topiramate delayed to November.

Sanderson Farms (NASDAQ:SAFM) is said near $4.5B sale to Cargill, Continental Grain.

Philip Morris (NYSE:PM) raises bid for U.K.’s Vectura to about $1.4B.


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