Before the Open (Apr 17-21)

Good morning. Happy Friday.

The Asian/Pacific markets were mostly down. China, Hong Kong, South Korea and Taiwan suffered big losses. Europe, Africa and the Middle East currently lean down. Denmark, Greece and Portugal are up; Poland, the UAE, South Africa, Finland and Spain are down. Futures in the States point towards a flat open for the S&P and a down open for the Nas 100.

————— BLOG: The Internals Don’t Support a Move Higher —————

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

Stories/News from Seeking Alpha…

Key ingredients

Automakers have been scrambling for battery materials as they go all in on the electric age, which will require them to have a steady and consistent supply to power their vehicles. Ford (F) recently confirmed plans to invest $3.5B in a lithium iron phosphate battery plant with the aid of Chinese battery giant CATL, cross-town rival General Motors (GM) is still looking for a partner for its latest factory, while the U.S. just inked a deal with Japan for critical EV metals. Other suppliers and countries are taking notice of the market dynamics, which will define the remaking of the auto sector as it retires the internal combustion engine.

Snapshot: Chile’s President Gabriel Boric said he would nationalize the lithium industry of the country, which is the world’s second-largest producer of the key EV material and holds the globe’s largest reserves. “This is an opportunity for economic growth that will be difficult to beat in the short term,” he announced in a televised address. “Today we present a national lithium strategy that’s technically solid and ambitious, with a Chile that distributes wealth we all generate in a more just way.”

While the transfer to public-private contracts will take time, as well as approval from Congress in the second half of the year, Chilean lithium industry giants were hit by the news. In premarket trading, Sociedad Quimica Y Minera de Chile (NYSE:SQM) slid nearly 8%, while Albemarle (NYSE:ALB) fell 4%, despite saying that the announcement would have “no material impact on our business” (the two firms are suppliers to Tesla (TSLA) and several other major automakers). While most commercial lithium extraction is from salt-flat brines and mineral ores, SA’s Trend Investing explores who is leading in the race to achieve successful direct lithium extraction.

Go deeper: State involvement in the key EV resources could make inking contracts and their conditions more difficult, or even lead to a kind of battery metal cartel. On the flip side, it may trigger a chain reaction of countries looking to safeguard their natural resources with the hope of boosting their economic growth or raising incomes. Mexico already nationalized its lithium deposits last year and Indonesia banned exports of nickel ore in 2020.

She’s back…

Shares are now trading at $163, but Cathie Wood’s ARK Invest has issued a new $2,000 price target on Tesla (TSLA) that would value the EV maker at more than $6T in fewer than four years. “We want Tesla to scale its units because each one of them now represents the potential for a robotaxi, or a robotaxi fleet,” Wood told CNBC, saying that from a margin point of view, the “robotaxi service would be more like a SAAS business.” Not surprisingly, Wood added TSLA shares to the ARK Innovation ETF (ARKK) on the dip last night, and continues to be the biggest holding in her flagship fund. Speaking of Elon Musk’s companies, another one of his ventures made headlines yesterday after SpaceX’s Starship rocket exploded minutes after its first flight. Tesla is also changing vehicle model pricing – again. (50 comments)

U.S.-China

In a speech at the Johns Hopkins School of Advanced International Studies, Treasury Secretary Janet Yellen laid out the next phase of the Biden administration’s relationship with China as tensions heat up between the two sides. “We will secure our national security interests and those of our allies and partners,” she declared. “These national security actions are not designed for us to gain a competitive economic advantage, or stifle China’s economic and technological modernization. The United States will assert ourselves when our vital interests are at stake, but we do not seek to ‘decouple’ our economy from China’s.” Friction between the world’s two largest economies already lingers over areas like trade, and bigger economic risks are at stake with a battle over access to key cutting-edge technologies like the escalating semiconductor war. (16 comments)

AI race

Google (GOOG, GOOGL) is merging two of its artificial intelligence research efforts amid a scramble to keep up with also-scrambling rivals in the exploding field. The company will combine the Brain team from Google Research and its DeepMind unit, bought in 2014, into a single group, called Google DeepMind (here are some of their past accomplishments). Google has been “AI-first” since 2016 and “along the way, we’ve been lucky to have two world-class research teams leading the entire industry forward with foundational breakthroughs that have ushered in a new era of AI,” said CEO Sundar Pichai. Will AI opportunities help Google’s stock rebound? Check out the latest SA article from Investing Groups Leader Ahan Vashi. (15 comments)

Today’s Economic Calendar
9:45 PMI Composite Flash
1:00 PM Baker-Hughes Rig Count
4:35 PM Fed’s Cook Speaks on Economic Research

What else is happening…

Ruling expected after SCOTUS extends pause on abortion pill curbs.

AT&T (T) suffers worst drop in two decades as cash flow dries up.

Existing home sales fall more than expected in March.

Credit provisions, expenses increase at American Express (AXP).

Amazon (AMZN) launches anti-counterfeiting exchange.

BuzzFeed (BZFD) shuts down news unit as part of heavy layoffs.

Crude reverses all gains that followed Saudi-led production cuts.

United Airlines (UAL) outlines delays for Boeing (BA) deliveries.

Social watch: Twitter begins removing legacy blue checks.

Judge extends stay on J&J (JNJ) talc claims for another 60 days.

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Good morning. Happy Thursday.

The Asian/Pacific markets leaned down. The Philippines did well, but South Korea, New Zealand, Thailand and China were weak. Europe, Africa and the Middle East are currently mostly down. Poland and Russia are up; France, Turkey, Germany, Greece, Norway, Spain, the Netherlands, Italy, Portugal and Israel are down. Futures in the States point towards a moderate gap down open for the cash market.

————— BLOG: The Internals Don’t Support a Move Higher —————

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

Stories/News from Seeking Alpha…

4/20

It’s that time of the year again when the budding marijuana legalization conversation lights up on the federal level. It’s actually been going on for quite some time, and witnessed some momentum last year with the introduction of the Cannabis Administration and Opportunity Act in the Senate and the Marijuana Opportunity Reinvestment and Expungement Act in the House. While there are still some headwinds to the measures being pitched on Capitol Hill, President Biden did ask the DOJ and HHS in October to “review expeditiously how marijuana is scheduled under federal law.”

Backdrop: When state and federal laws conflict, the latter preempts the former as per Article IV of the Constitution. However, the 10th Amendment – as interpreted by the Supreme Court – outlines that the federal government cannot “commandeer the state,” meaning it cannot force states to arrest cannabis sellers or users that comply with their own state laws. In turn, states also cannot block the federal government from enforcing their laws either. As a result, federal agents could be dispatched to make arrests within states if there was a will to do so, and the resources were available, but in recent decades sentiment has turned with regard to weed’s place in society. Smoking pot in America is now more popular than cigarettes

Oregon led the effort towards decriminalization in 1973, California kicked off medical marijuana in 1996, and recreational weed even became legal in Colorado and Washington in 2012. As of today, pot is now legal recreationally in nearly half of all U.S. states, though it still remains a Schedule I drug under the Controlled Substances Act of 1970. The illegal classification on the federal level makes it complicated for companies to operate within their own state borders, as many business activities and banks are regulated by federal law, as well as taxes, trademarks, and legal processes like bankruptcy.

Outlook: Despite economic uncertainty and rising inflation, cannabis market research firm BDSA expects legal U.S. cannabis sales to grow 14% to $36.5B by the end of 2023. For investors trying to gain exposure to the sector, check out the latest Seeking Alpha analysis and news on multistate operators like Cresco Labs (OTCQX:CRLBF), Curaleaf (OTCPK:CURLF), Green Thumb Industries (OTCQX:GTBIF) and Trulieve Cannabis (OTCQX:TCNNF). Cannabis-related ETFs also include the AdvisorShares Pure Cannabis ETF (NYSEARCA:YOLO) and funds like the ETFMG Alternative Harvest (NYSEARCA:MJ).

Margin miss

Shares of Tesla (TSLA) fell 7% after the bell on Wednesday after lower pricing and high expenses contributed to a margin miss. The company will continue to prioritize sales growth ahead of profit due to the EV price war and macro challenges in the economy. “This is an extremely important point,” Elon Musk said on the earnings call. “We’re like laying the groundwork here, and it’s better to ship a large number of cars at a lower margin, and subsequently, harvest that margin in the future as we perfect autonomy.” He also noted the energy storage business had its best quarter ever, and even managed to pick a fight with Microsoft (MSFT) after the Q1 earnings. (190 comments)

Debt drama

House Speaker Kevin McCarthy has introduced a bill that would raise the $31.4T debt ceiling by $1.5T along with limiting federal spending, which would be enough to avert a default until at least March 31, 2024. The “Limit, Save, Grow Act,” which is set to undergo a House vote next week, is estimated to cut budget deficits by $4.5T over the next 10 years, by bringing discretionary spending back to 2022 levels and capping future spending growth at 1% per year for the next decade (COVID funds, student loan forgiveness and energy regulations are also part of the proposal). “President Biden has a choice: come to the table and stop playing partisan political games, or cover his ears, refuse to negotiate and risk bumbling his way into the first default in our nation’s history,” declared McCarthy. “If Washington wants to spend more it will have to come together and find savings elsewhere just like every single household in America.” (101 comments)

Emerging markets

The trophy of the world’s most populous nation is changing hands, according to fresh estimates from the U.N., which pegged the population of India at 1.4286B in mid-2023, compared to the 1.4257B of China. The growth story in India, where half the population is under the age of 30, is already on the radar of emerging market investors, with SA contributor Macrotips Trading pointing to the iShares MSCI India ETF (INDA) for boosting exposure to large- and mid-cap Indian equities. In the short term, India is benefiting from access to discounted Russian oil – which has allowed the economy to grow rapidly with relatively less inflation than others – and in the long term, India is forecast to become a manufacturing alternative to China. Well timed? Tim Cook was in India this week to open Apple’s first store and meet with Prime Minister Narendra Modi, as the company aims to build out a consumer base and expand its production footprint. (2 comments)

Today’s Economic Calendar
8:30 Initial Jobless Claims
8:30 Philly Fed Business Outlook
10:00 Existing Home Sales
10:00 Leading Indicators
10:30 EIA Natural Gas Inventory
12:00 PM Fed’s Waller Speaks on Financial Innovation
12:20 PM Fed’s Mester Speaks on Economic and Policy Outlook
3:00 PM Fed’s Logan gives opening remarks before a Fed Listens Event
5:00 PM Fed’s Bostic on regional and national economic conditions
7:45 PM Fed’s Harker on economic outlook

What else is happening…

U.S. Supreme Court extends pause on abortion pill curbs until Friday.

Bed Bath (BBBY) moves as traders bet on bankruptcy vs. survival odds.

AT&T (T) earnings preview: Optimism or macro headwinds?

Margin improvement boosts IBM’s (IBM) first-quarter report.

Seagate (STX) to pay $300M penalty for shipping Huawei hard drives.

Job cuts that Disney (DIS) is planning will land at ESPN unit.

Morgan Stanley (MS) earnings beat on strong trading revenue.

Economic activity barely budged – Fed’s Beige Book.

Abbott (ABT) sales grow on medical devices amid COVID test slowdown.

Chip watch: ASML falls after earnings, TSMC (TSM) outlook disappoints.

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Good morning. Happy Wednesday.

The Asian/Pacific markets were mostly weak. Indonesia did well, but China, Hong Kong, Taiwan, Malaysia and Thailand posted decent losses. Europe, Africa and the Middle East currently lean down. Denmark, Greece, South Africa, Hungary, the Netherlands, Austria and Sweden are down the most. Futures in the States point towards a moderate gap down open for the cash market.

————— Masterclass Overview –>> here —————

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

Stories/News from Seeking Alpha…

Next evolution

Netflix (NFLX) went on a wild ride in after-hours trading on Tuesday, sliding over 12% before ending the session near the flatline at $333/share. The stock is still holding steady in the premarket session this morning, following the streaming giant’s set of mixed results and initial scares over some of the company’s guidance and growth momentum. Note that Netflix no longer forecasts quarterly user figures after diversifying its business, but said it expects Q2 revenue of $8.2B, shy of consensus estimates for $8.47B.

Bigger picture: Netflix is looking for its next streaming act after killing off its DVD-by-mail service that revolutionized movie rentals and eventually vaulted it into Hollywood. The next business plan is to crack down on passwords (paid sharing), as well as new subscription plans that include advertising (ad-supported tiers), though it remains to be seen how things will play out. As for the strike recently authorized by Hollywood’s writers union, Netflix announced its respect for the writers and WGA, but is confident that there’s enough in the pipe to soften the blow.

“We are growing, not as fast as we believe we can, not as fast as we would want to, but we are growing and we are profitable,” co-CEO Ted Sarandos said on the earnings call. “We have a clear path to reaccelerate growth in both revenue and profit and we are executing on it.” Responding to the results, SA Investing Groups Leader Quad 7 Capital said the “good and bad news” has the market confused, while commenting on the recent earnings and outlook, margins and free cash flow.

Up next: The electric vehicle sector will be on high notice after today’s closing bell with Tesla (TSLA) due to report Q1 results. The key question for investors may be the update on margin expectations amid the EV pricing war. Ahead of the big results, Tesla even cut prices in the U.S. for sixth time this year, with the rear-wheel drive variant of the Model 3 now going for under $40,000 before incentives.

Moving on

It came a bit late, but Fox News (FOX) has agreed to pay $787.5M to settle a defamation lawsuit from Dominion Voting Systems centering around the network’s claims about a rigged presidential election in 2020. The settlement, which represents “accountability” and a “ringing endorsement of truth and democracy,” according to Dominion attorneys, marks just about the halfway point in the company’s push for $1.6B in damages. Now the focus turns to Smartmatic, another voting machine company that is similarly suing Fox News for $2.7B in damages. “Ouch. $787.5M is 52% of Fox’s net income TTM,” wrote user Orangejulius, while The Real Cavalier was quick to explain why it’s “not material to the stock price.” Join the discussion here. (319 comments)

Is cash still king?

Federal Reserve Governor Michelle Bowman said yesterday that a wholesale central bank digital currency could be promising for future settlement of some financial market transactions and processing international payments. The remarks echoed prior-day comments from across the pond, with Bank of England Deputy Governor Sir Jon Cunliffe citing a need to create a so-called digital pound. While the U.S. has not yet created a CBDC – a central bank-issued digital currency representing a nation’s fiat currency – both the Biden administration and the Federal Reserve have been assessing the potential risks and benefits since last year. Here’s an in-depth take on what CBDCs are and how they are different from cryptocurrencies.

(Not) ready for takeoff

Southwest Airlines (NYSE:LUV) requested the FAA pause the airline’s departures on Tuesday, according to the regulator, due to “intermittent technology issues.” Data from FlightAware showed the lack of a quick fix threw flight delays into thousands by mid-morning, accounting for over one-third of scheduled departures. Southwest has been under significant scrutiny since operational failings led to widespread flight cancellations and meltdown over the Christmas holiday period. The company estimated the system failures cost the airline $800M in a January earnings report. (31 comments)

Today’s Economic Calendar
7:00 MBA Mortgage Applications
10:30 EIA Petroleum Inventories
1:00 PM Results of $12B, 20-Year Bond Auction
2:00 PM Fed’s Beige Book
7:00 PM Fed’s Williams Speech

What else is happening…

McDonald’s (MCD) is changing the recipe for its most iconic burgers.

Meta (META) eyes another round of job cuts, Disney (DIS) does too.

Beating estimates: BofA (BAC) gains as Q1 NII, trading revenue jump.

Judge to decide whether to halt J&J (JNJ) talc lawsuits tomorrow.

U.K. inflation rate surprises again, remains in double digits.

China said to substantially reduce fine and charges on Ant Group.

Google (GOOGL) reportedly launching its foldable phone in June.

Lockheed Martin (LMT) rises to record after Q1 results beat estimates.

Report: Lululemon (LULU) weighs sale of fitness business Mirror.

United (UAL) posts lighter than expected loss, projects profits ahead.

Boeing (BA) sticks with output goals for 737 despite supplier issues.

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Good morning. Happy Tuesday.

The Asian/Pacific markets leaned to the downside. Japan and Indonesia did well; Hong Kong, Taiwan, New Zealand, Thailand and the Philippines were weak. Europe, Africa and the Middle East are currently doing well. Poland, France, Germany, Greece, South Africa, Hungary the Netherlands, Italy, Israel, Austria and Sweden are leading. Futures in the States point towards a moderate gap up open for the cash market.

————— Masterclass Overview –>> here —————

The dollar is down. Oil is up; copper is down. Gold and silver are up. Bonds are mixed and little changed.

Stories/News from Seeking Alpha…

Earnings watch

Earnings season is heating up this week as investors shift their focus from banking to other sectors of the economy. U.S. indices closed higher on Monday as stronger-than-expected Q1 results at Charles Schwab (SCHW) outweighed lower fee revenues and shrinking deposits at State Street (STT), though the session was quite choppy. Bank of America (BAC) and Goldman Sachs (GS) will follow up with their quarterly figures this morning, before the earnings parade brings out streaming heavyweight Netflix (NFLX) after the bell, as well as EV leader Tesla (TSLA) tomorrow.

Snapshot: Earnings for S&P 500 companies are expected to have declined 4.8% Y/Y in the first quarter, according to data from Refinitiv, marking the second consecutive drop in year-over-year earnings growth. While that would translate into the first “earnings recession” since the pandemic, it could be somewhat of a good sign. Inflation is coming down, which is weighing on pricing and profit margins, while the economy is still growing with many firms reporting strong top-line figures. A bigger problem could arise if executives start issuing downbeat forecasts or companies surprise investors with some serious or severe quarterly losses.

“The prior earnings recession started in 2020 Q2, lasting three quarters from start to finish. Today’s earnings recession may also last three quarters if analyst expectations turn out to be correct,” SA contributor Lipper Alpha Insight writes in a new article about the earnings recession. Analysts have also set the bar lower heading into earnings season by downgrading Q1 estimates, while earnings growth contribution and weights will play an outsized role in determining S&P 500 sector direction.

Go deeper: “Q1 estimates have declined significantly heading into earnings season which may set a lower bar for corporations to beat analyst expectations and surprise to the upside. The quality of a beat will matter, as investors look to hear from company management on numerous themes, including the macro-outlook, health of the consumer, impact of higher input costs on margins, employee hiring (or layoffs), and future capital expenditure plans.” (2 comments)

Gimme an extension

Tax Day is officially here, coming later than usual this year because of the calendar cycle and a holiday in the nation’s capital. It may be more painful for some investors due to 2022’s market tumult, which saw indexes fall, bonds suffer their worst selloff in history and cryptocurrencies plunge in value. These declines can have big tax consequences for individual investors who sold assets held in taxable accounts, including people who dumped losing stocks to offset taxable capital gains from selling winners. Seeking Alpha has compiled answers to some of investors’ most common tax questions, including how stock sales and dividends are taxed, how and which cryptos are taxed, and a brief explanation of the “wash-sale rule,” which prevents investors from gaming the system by selling a stock at a loss for a deduction and then buying back the same stock the next day. (29 comments)

New market

Apple’s (NASDAQ:AAPL) plans for a pivot to India can be seen by CEO Tim Cook’s visit to the country, which is quickly becoming the tech giant’s most important manufacturing base outside of China. Cook is set to open up the country’s first Apple Store in Mumbai today, followed by a second one in Delhi on Thursday, after saying he was “very bullish on India” on last quarter’s earnings call. Only about 4% of the nation’s nearly 700M smartphone users have iPhones, but the company is hoping to build the brand and consumer loyalty, with Cook also reportedly set to pay a visit to Prime Minister Narendra Modi (Wedbush Securities calls it a “strategic poker move.”) Apple’s revenue in India is said to have grown by nearly 50% to a record $6B over the past year, and follows other fresh initiatives, like the recent rollout of an Apple Card with a high-yield savings account from Goldman Sachs (GS). (6 comments)

Meet the EVs

Treasury Department rules that go into effect today will reduce the number of electric vehicles that qualify for the full federal EV tax credit. The new guidelines stipulate that electric and plug-in-hybrids can only get the full tax credit if the vehicles are made in the U.S. and most of their batteries and critical minerals are sourced domestically or from the closest trading partners. Cars that will qualify for the full $7,500 tax credit include the Chevy (GM) Silverado EV, Chrysler (STLA) Pacifica PHEV, Ford (F) F-150 Lightning, as well as six other models, but some automakers like Rivian (RIVN) didn’t make the cut (see the full list here). While the EV sourcing rules are set to tighten in 2025 – with battery minerals not allowed from a foreign entity of concern such as China and Russia – some analysts expect carveouts and adjustments to be made on pricing and sourcing rules that could potentially help EV startups such as Fisker (FSR) and Lucid Group (LCID). (220 comments)

Today’s Economic Calendar
8:30 Housing Starts and Permits
1:00 PM Fed’s Bowman Speech

What else is happening…

Survey results: See the breakdown on how many traders want to use AI.

Watch these stocks for a potential rally as short sellers get tested.

Inflation to get ‘sticky’ around 4% to 5% – Mohamed El-Erian.

DeSantis ramps more threats against Disney (DIS) over tax-district scuffle.

McCarthy says House Republicans will vote on debt limit, spending cuts.

China’s economy rebounds following years of zero-COVID measures.

Elon Musk’s SpaceX (SPACE) delays Starship rocket launch.

Wheat futures jump on growing uncertainty over Black Sea grain deal.

Dominion squares off against Fox News (FOX) in high-stakes $1.6B case.

Biden administration notifies Congress of $259M sale of F-16 gear to Turkey.

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

The Asian/Pacific markets lean to the upside. China, Hong Kong, New Zealand, Singapore and Thailand did well; India and Indonesia were weak. Europe, Africa and the Middle East currently lean up. Denmark, Russia, Hungary, Portugal and Saudi Arabia are leading; Israel is weak. Futures in the States point towards a slight positive open for the cash market.

————— Masterclass Overview –>> here —————

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

Stories/News from Seeking Alpha…

Dot A.I.

The competition for AI dominance is heating up as the world’s biggest tech giants go all in on an area that will “impact every product across every company.” That’s the opinion of Google (GOOG, GOOGL) CEO Sundar Pichai, who hastily released the company’s chatbot called Bard in March after Microsoft (MSFT) poured billions of dollars into ChatGPT maker OpenAI (overnight reports also suggested that Samsung may turn to AI-powered Bing). The developing industry isn’t limited to chatbots, with calls to pause many AI tools until new safety standards for the technology are in place, such as regulations for the economy, laws to punish abuse, and international treaties to make artificial intelligence safe for the world.

Is society prepared for what’s coming? “On one hand, I feel no, because the pace at which we can think and adapt as societal institutions, compared to the pace at which the technology is evolving, there seems to be a mismatch,” Pichai told CBS’s 60 Minutes. “On the other hand, compared to any other technology, I’ve seen more people worried about it earlier in its life cycle… and worried about the implications.” Knowledge workers could face the biggest disruption from future AI technologies, he added, and could unsettle professions like writers, accountants, architects and even software engineers.

There is no doubt that companies are on the brink of something big in terms of artificial intelligence, but it’s also important to separate hype from reality when talking about any emerging technology (remember Web 3.0?). There has been a lot of talk about the sentience of chatbots and the genesis of a new humanity, as well as an end to privacy and personal liberty or the quick demise of entire industries. There are also countless AI startups that are looking to play up the news cycle for valuable sources of funding, and even capitalize on investment from the public sector in terms of defense and national security.

SA commentary: Ironside Research explores why Google (GOOG) (GOOGL) was smart to let Microsoft launch its AI first, while Deep Tech Insights says its AI is even three times larger than ChatGPT. Meanwhile, Investing Groups Leader Samuel Smith calls out three AI stocks that are poised to win over the next decade and Luckbox Magazine explains how to add AI to your portfolio. Deep learning and debate are additionally taking place around hot industry players like C3.ai (AI), with Julian Lin calling it an AI meme stock and Stone Fox Capital flagging the recent pullback as a buying opportunity.

Grain drain

Poland and Hungary have banned imports of grain from Ukraine, as well as its transit through their countries, despite a warning from the EU that the unilateral actions would go against the bloc’s trade policies. The move by the two countries seeks to protect their farmers, which have staged protests in recent months due to a grain glut and crashing prices. Soon after Russia invaded Ukraine, the EU scrapped tariffs and quotas on Ukrainian grain imports, seeking to help the country that wasn’t able to export its product due to logistical problems caused by the war and blocked Black Sea ports. Poland’s ban is set to last until the end of June, but with another grain export deal – between Ukraine, Turkey, Russia and the United Nations – up in the air, grain markets could see some renewed volatility. (3 comments)

M&A Monday

Prometheus Biosciences (RXDX) is up 70% in premarket trade after Merck (MRK) agreed to buy the clinical-stage biotech focused on immunology, for $200/share in cash, indicating a total equity value of nearly $10.8B. Prometheus advances late-stage studies for ulcerative colitis and Crohn’s disease, as well as other autoimmune conditions. “The agreement with Prometheus will accelerate our growing presence in immunology where there remains substantial unmet patient need,” noted Merck CEO Robert Davis. Seeking Alpha’s Quant ratings raised its outlook on Prometheus from Hold to Strong Buy only two weeks ago (check out top Quant stocks by SA’s popular stock rating screener). (33 comments)

Trial delay

The landmark trial between Fox News (FOX) and Dominion Voting Systems – the voting machine company suing the network for $1.6B in damages for defamation – was set for a high-profile start today, but at the eleventh hour, it was delayed to tomorrow. Media reports suggest that Fox is making a late push to settle the case after a number of pretrial losses. The case is likely to test long-held notions of media law and include a star-studded witness list that may include Fox hosts Sean Hannity, Tucker Carlson, Maria Bartiromo and even Fox chief Rupert Murdoch. Dominion has accused Fox News of issuing false claims that it worked to rig the 2020 election in favor of President Biden and executives have said they won’t settle without a broad apology from Fox that it aired false information about the company. (5 comments)

Today’s Economic Calendar
8:30 Empire State Mfg Survey
10:00 NAHB Housing Market Index
12:00 Fed’s Barkin Speech
4:00 PM Treasury International Capital

What else is happening…

To Mars and Beyond! SpaceX (SPACE) set for debut flight of Starship rocket.

Sega Sammy (OTCPK:SGAMY) to acquire maker of Angry Birds.

Teck Resources (TECK) approached by miners to explore metal deals.

Streaming glitch: Netflix (NFLX) keeps Love Is Blind fans waiting.

JPMorgan’s (JPM) Dimon sees some banks ‘tightening’ lending and credit.

Following Tesla (TSLA), XPeng (XPEV) to cut costs with new platform.

Upside? Deutsche Bank calls this U.S. airline a sector outperformer.

Hitting guidance, Chipotle’s (CMG) store expansion is still going strong.

Assassination attempt: Second attack on a Japanese leader in less than a year.

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