{"id":13803,"date":"2020-03-02T23:52:30","date_gmt":"2020-03-02T23:52:30","guid":{"rendered":"http:\/\/blog.leavittbrothers.com\/?p=13803"},"modified":"2020-03-06T13:49:14","modified_gmt":"2020-03-06T13:49:14","slug":"before-the-open-mar-2-8","status":"publish","type":"post","link":"https:\/\/blog.leavittbrothers.com\/?p=13803","title":{"rendered":"Before the Open (Mar 2-6)"},"content":{"rendered":"\n Good morning. Happy Friday. <\/span>

\n\n The Asian\/Pacific<\/strong> markets suffer big, across-the-board losses. Japan, Hong Kong, South Korea, India, New Zealand, Taiwan, Australia, Indonesia, Singapore, Thailand and the Philippines – all down big. Europe, Africa and the Middle East<\/strong> are currently down big. Practically every major and minor market is down 2-4% or more. Futures in the States<\/strong> point towards a huge gap down open for the cash market. It’s a worldwide blood bath. <\/span>

\n\n—————\nVIDEO: The Coronavirus and the Market<\/a> <\/span>\n—————<\/span>

\n\n The dollar is down. Oil and copper are down. Gold and silver are up. Bonds are up. <\/span>

\n\n Stories\/News from Seeking Alpha…<\/span>

\n\nThe 10-year Treasury yield hit an all-time low of 0.694% overnight as the coronavirus continued to push investors into the safety of government bonds. “Better to stay in cash,” responded bond guru Jeffrey Gundlach. “I don’t think calling the direction of interest rates is all that meaningful. Even if you are absolutely right and you get lower 10-year rates, you don’t make any money.” Investors are meanwhile increasing bets that the Fed will follow this week’s surprise 50-basis point rate cut with further easing – at or before its scheduled March 18 meeting.

\n\nStability nowhere to be seen

\n\nMore pain will come at the open, with Dow futures sinking 652 points and the S&P 500 and Nasdaq down 2.7% and 2.9%, respectively. The spread of coronavirus has accelerated in the U.S., and investors who once downplayed down the virus are now re-assessing risks. Infections surfaced in at least four new states and San Francisco on Thursday, while the death toll from the respiratory illness rose to 12 nationwide. Concerns about the outbreak are also likely to overshadow any signs of a strong labor market today as investors digest the most recent non-farm payrolls report.

\n\nJobs Day

\n\nEstimates suggest employers added 175K new jobs to the economy last month, a step down from than the 225K created in January but a number that would match the average monthly jobs growth in 2019. The headline unemployment rate will likely remain at a low of 3.5%, while hourly wages are expected to rise by 0.3% from the previous month. Impacts of the coronavirus will not fully be captured in the figures, as the disease spread in the U.S. beginning in late February.

\n\nRisky gamble at OPEC meeting

\n\nCrude futures tumbled 4.6% to $43.78\/bbl after a high-level Russian source told Reuters that the country would not back an OPEC call for extra reductions in oil output, saying the “position won’t change.” OPEC ministers told Moscow on Thursday that if it doesn’t join them in slashing crude output by another 1.5M barrels a day, then the cartel could abandon its reductions altogether. It’s a high-stakes move in a market already slammed by the coronavirus and which triggered Saudi Aramco (ARMCO) to delay announcing its monthly crude pricing.

\n\nMiss Climate Action

\n\nDefending the business of fossil fuels and resisting targets on carbon emissions, Exxon Mobil (NYSE:XOM) CEO Darren Woods called pledges by some of its Big Oil rivals to cut carbon dioxide emissions a “beauty competition” that would do little to halt climate change. “Individual companies setting targets and then selling assets to another company so that their portfolio has a different carbon intensity has not solved the problem for the world,” he declared. The company is focused on “taking steps to solve the problem for society as a whole.”

\n\nWishing a speedy recovery to Jamie Dimon

\n\nThe 63-year-old CEO, at the helm of JPMorgan (NYSE:JPM) for over a decade, was rushed into emergency surgery yesterday after suffering a tear in his aorta. He’s now “awake, alert and recovering well.” The bank was quick to disclose his condition and be upfront about who’s in charge. Daniel Pinto and Gordon Smith, the co-presidents and co-chief operating officers, will take the reins as Dimon recovers (possibly giving a glimpse into a future succession plan).

\n\n737 MAX certification flight?

\n\nFAA adminstrator Stephen Dickson thinks a certification test flight for the 737 MAX could happen “in a matter of a few weeks” (prior reports pointed to April). “We’re working though the last few software review and documentation issues,” he announced at a Washington aviation conference. Boeing’s (NYSE:BA) 737 MAX has been grounded for almost a year after two fatal crashes which killed 346 people in five months.

\n\nTweets about Africa move were ‘mistake’

\n\nJack Dorsey appeared to back off plans to spend part of this year in Africa as he tries to fend off a push by activist fund Elliott Management to replace him. Speaking to Morgan Stanley’s TMT conference, the CEO of Twitter (NYSE:TWTR) and Square (NYSE:SQ) said he “made a mistake and should have provided more context about why.” The continent will be one of the most populated in the next 20-30 years, and room for tech innovation there is incredible, but “in light of COVID-19 and everything else going on I need to reevaluate.”

\n\nAsked about the economy…

\n\n“[Coronavirus] certainly might have an impact. At the same time, I have to say people are now staying in the United States spending their money in the U.S., and I like that,” President Trump said in his first town hall of the 2020 election season. “We have plans for every single possibility and I think that’s what we have to do. We hope it doesn’t last too long.” “I still believe we can get through this year without a recession,” added Dallas Fed President Rob Kaplan, in an interview on Bloomberg Television.

\n\nLatest coronavirus updates

\n\nFacebook (NASDAQ:FB) told employees in the Bay Area to stay home and cancel any trips, while Gap (NYSE:GPS) shuttered its New York City headquarters after a worker tested positive for the coronavirus. Microsoft (NASDAQ:MSFT) also confirmed that two employees have been diagnosed in Washington’s Puget Sound region, the area that includes its Redmond headquarters. More bad news for the travel sector… Southwest Airlines (NYSE:LUV) is expecting a hit of up to $300M for first-quarter operating revenue, prompting the carrier to cut its outlook.

\n\nWhat else is happening…

\n\nStarbucks (NASDAQ:SBUX) comparable sales in China tank 78%.

\n\nOld Navy boss promoted to lead Gap (GPS).

\n\nNXP Semiconductors (NASDAQ:NXPI) names new chief executive.

\n\n3M (NYSE:MMM) says no disruptions in face mask production.

\n\nAgain… Samsung (OTC:SSNLF) takes smartphone factory offline.

\n\nU.S. coal consumption plunges most since 1954.

\n\nThursday’s Key Earnings<\/B>
\nAmerican Outdoor Brands (NASDAQ:AOBC) -16% AH on weak earnings.
\nBJ’s Wholesale Club (NYSE:BJ) +6.1% as EPS met estimates.
\nCostco (NASDAQ:COST) +1% AH posting strong comp sales.
\nKroger (NYSE:KR) +8.1% following penny EPS beat.

\n\nToday’s Economic Calendar<\/B>
\n8:30 Non-farm payrolls
\n8:30 International Trade
\n9:20 Fed’s Evans: \u201cTransparency and Communications”
\n9:20 Fed’s Mester: \u201cTransparency and Communications”
\n10:00 Wholesale Trade
\n10:00 Fed’s Kashkari Speech
\n11:20 Fed’s Bullard: \u201cInflation Targeting and Rules-Based Policy”
\n1:00 PM Baker-Hughes Rig Countv\n2:00 PM Fed’s Williams: \u201cMonetary Policy and the Zero Lower Bound”
\n2:00 PM Fed’s Rosengren: \u201cMonetary Policy and the Zero Lower Bound”
\n3:00 PM Consumer Credit
\n3:30 PM Fed’s George: \u201cThe Fed\u2019s Balance Sheet and Credit Policy”

\n\n—————

\n\n Good morning. Happy Thursday. <\/span>

\n\n The Asian\/Pacific<\/strong> markets posted big gains. Japan, China, Hong Kong, South Korea, New Zealand, Taiwan and Australia all gained more than 1%. Europe, Africa and the Middle East<\/strong> are currently posting big losses. The UK, Poland, France, Germany, Greece, Finland, Switzerland, Norway, Hungary, Spain, the Netherlands, Italy, Belgium, Portugal, Israel, Austria, Sweden and the Czech Republic are each down at least 1%. Futures in the States<\/strong> point towards a massive gap down open for the cash market. <\/span>

\n\n—————\nVIDEO: The Coronavirus and the Market<\/a> <\/span>\n—————<\/span>

\n\n The dollar is down. Oil and copper are down. Gold and silver are up. Bonds are up. <\/span>

\n\n Stories\/News from Seeking Alpha…<\/span>

\n\nThings are turning around fast again following a massive rally in the previous session, with Dow futures off by nearly 500 points and S&P 500\/Nasdaq futures down by 1.9%. California has declared a state of emergency following the death of an elderly woman near Sacramento, while U.S. coronavirus cases climbed to 160 across 17 states and fatalities reached 11. Broader movements in the bond market saw the benchmark 10-year Treasury yield slip back under 1%, and following a cut from the Bank of Canada, official global interest rates reached an all-time low of just over 3%. Retail earnings are also on the radar today, with investors eyeing results from Costco (NASDAQ:COST), BJ’s Wholesale Club (NYSE:BJ) and Kroger (NYSE:KR).



\n\nMassive revenue loss for airlines

\n\nTravel restrictions to contain the coronavirus are multiplying rapidly, with governments around the world adding selective arrival bans on visitors from afflicted nations and companies banning trips by their employees. Airlines will lose $63B to $113B in revenue for passenger traffic globally in 2020, depending on how the coronavirus spreads, according to the International Air Transport Association. On Feb. 20, IATA estimated the outbreak would cost carriers $29.3B in revenue. Premarket: AAL -3.6%, UAL -1.6%, DAL -2.3%, LUV -1.3%.

\n\nFlybe pushed over the edge

\n\nIt’s the industry’s first big casualty of the coronavirus outbreak. British regional airline Flybe (OTC:FLYBF) has collapsed following a plunge in travel demand, putting around 2,400 jobs at risk amid a darkening forecast that could see some airports struggle and business travel restricted. Flybe was already in financial trouble and was rescued in mid-January, when shareholders agreed to invest more money alongside government support that was due to include a potential loan and a review of local flight taxes.

\n\nPulling out of SXSW 2020

\n\nApple (NASDAQ:AAPL) and Netflix (NASDAQ:NFLX) are the latest tech companies to pull out of the upcoming South by Southwest festival amid concerns about the spread of coronavirus. Apple had been set to premiere three new Apple TV+ originals at the event, while Netflix had planned to screen five films, including LA Originals. Others who have recently pulled out of SXSW 2020 include Amazon Studios (NASDAQ:AMZN), Facebook (NASDAQ:FB), Twitter (NYSE:TWTR), TikTok, Mashable and Intel (NASDAQ:INTC), though officials say the show will go on.

\n\nCoronavirus updates

\n\nAmazon (AMZN) told employees in Seattle to avoid coming into their offices for the rest of the month after an employee tested positive and Washington state emerged as one of the hardest hit by the coronavirus. Facebook (FB) also confirmed that a contractor at its Seattle office was diagnosed with the disease and it would close that location until March 9. Visa (NYSE:V) is cutting costs and American Express (NYSE:AXP) reported a material slowdown in Asia travel spending as the virus starts taking a bite out of revenue, while Mastercard (NYSE:MA) is deciding whether to implement expense cuts, but doesn’t have enough clarity yet on the severity of the situation.

\n\nEfforts to combat the virus

\n\nThe U.S. House has passed a bill allocating $8B in emergency funds to combat the spread of the deadly virus, including $3B in vaccine research and $2.2B in prevention and preparedness efforts. The IMF also announced a $50B aid package and called for an all-out offensive to counteract the epidemic. New York Governor Cuomo confirmed five new cases, saying, “this is literally like trying to stop air,” while Vice President Mike Pence will meet with face mask maker 3M (NYSE:MMM) in Minneapolis today to discuss supply chain issues.

\n\nOil prices on watch

\n\nThe familiar split between Saudi Arabia and Russia on how much to trim output has emerged as OPEC+ meets in Vienna. Looking to shore up prices hammered by the coronavirus outbreak, Riyadh is pushing for a cut of 1M-1.5M barrels per day in Q2 and to keep existing cuts of 2.1M bpd (which expire this month) in place until the end of 2020. Moscow has in the past shown reluctance during negotiations but has signed up at the last minute.

\n\nSimplifying capital rules

\n\nThe Fed is retooling capital rules for the largest U.S. lenders, like JPMorgan Chase (NYSE:JPM), Citigroup (NYSE:C) and Wells Fargo (NYSE:WFC), in one of the biggest changes to the post-crisis rulebook for Wall Street. It reduces the total number of capital requirements to eight from 13, “while maintaining the strong capital requirements that are the hallmark of the framework,” according to Vice Chairman for Supervision Randal Quarles. The Fed held off on making some changes to stress tests, however, such as incorporating a dormant policy tool to combat credit crunches.

\n\nSelf-driving drama

\n\nAnthony Levandowski has filed for bankruptcy, shortly after a court confirmed that he must pay $179M to Google (GOOG, GOOGL) over unfair competition and breaching legal obligations. Levandowski had been a key engineer in Google’s self-driving project before starting his own company that was acquired by Uber (NYSE:UBER). While the moves ignited a multipronged fight over proprietary information and trade secret theft that is still raging, Waymo and Uber settled their lawsuit back in 2018. Bad timing? Uber said yesterday that its self-driving unit is open to using technology from competitors in the industry.

\n\nDisappearing ‘fleets’

\n\nTwitter (TWTR) is starting public testing of “Fleets” – its take on the popular disappearing “Stories” format popularized by Snapchat (NYSE:SNAP) and copied to successful effect by Instagram (FB). Fleets differ from tweets in that they’ll disappear after 24 hours; can’t receive likes, replies or retweets; and otherwise won’t be circulated through the network, or show up in Search or Moments. The company is starting testing in Brazil, TechCrunch notes, and will decide after a few months how to proceed to other global markets.

\n\nWhat else is happening…

\n\nToyota (NYSE:TM) recalls 3.2M vehicles due to faulty fuel pumps.

\n\nGM (NYSE:GM) plans to invest $20B in EV technology by 2025.

\n\nCanopy Growth (NYSE:CGC) confirms closures, taking $700M+ charge.

\n\nNestle (OTCPK:NSRGY) planting forests to achieve carbon neutrality.

\n\nAMD (NASDAQ:AMD) to deliver supercomputer modeling nuclear weapons.

\n\nMore 5G partnerships for Nokia (NYSE:NOK).

\n\nViacomCBS (NASDAQ:VIAC) set to sell Simon & Schuster.

\n\nTop French court classifies Uber (UBER) driver as employee.

\n\nWednesday’s Key Earnings<\/B>
\nCampbell Soup (NYSE:CPB) +10.1% raising output due to coronavirus.
\nDollar Tree (NASDAQ:DLTR) -3.6% giving light guidance.
\nMarvell (NASDAQ:MRVL) +6.4% AH posting upside revenue forecast.
\nSplunk (NASDAQ:SPLK) -4.4% AH on weak outlook.
\nZoom (NASDAQ:ZM) -5.7% AH despite Q4 beats, upside outlook.

\n\nToday’s Economic Calendar<\/B>
\n7:30 Challenger Job-Cut Report
\n8:30 Initial Jobless Claims
\n8:30 Productivity and Costs
\n10:00 Factory Orders
\n10:30 EIA Natural Gas Inventory
\n4:30 PM Money Supply
\n4:30 PM Fed Balance Sheet
\n6:30 PM Fed’s Kaplan: “Trade Wars, Slowing Global Economy, and Monetary Policy”
\n8:00 PM Fed’s Kashkari Speech
\n8:45 PM Fed’s Williams: U.S. Economy and Monetary Policy

\n\n—————

\n\n Good morning. Happy Wednesday. <\/span>

\n\n The Asian\/Pacific<\/strong> markets closed mostly up. China, South Korea, New Zealand, Taiwan, Malaysia, Indonesia and the Philippines did very well; India and Australia were weak. Europe, Africa and the Middle East<\/strong> are currently mostly up. The UK, Denmark, France, Germany, Finland, Switzerland, Kenya, Spain, the Netherlands, Italy, Portugal, Austria and Sweden are leading while Poland, the UAE and Israel are down. Futures in the States<\/strong> point towards a big gap up open for the cash market. <\/span>

\n\n—————\nVIDEO: State of the Market<\/a> <\/span>\n—————<\/span>

\n\n The dollar is up. Oil and copper are up. Gold and silver are flat. Bonds are up. <\/span>

\n\n Stories\/News from Seeking Alpha…<\/span>

\n\n“Stocks skyrocket on stimulus hopes,” “tank after the Fed’s half-point cut” (could’ve done more?), then “soar again following Biden’s Super Tuesday success,” are some of the headlines we’ve seen over the last few days as market watchers try to assign reasons for the wild movement. While there was more volatility overnight as Dow futures shot up another 561 points, the bottom line is that the market is still trying to find a floor and gauge how the coronavirus will impact various sectors of the economy. On that note, we’ll get some further data points today, including auto sales, ISM’s non-manufacturing index, final readings of IHS Markit’s composite and services PMI, the ADP employment report and Fed’s Beige Book.

\n\nBelow 1% & repo demand

\n\nBenchmark 10-year U.S. Treasury yields dropped below 1% on Tuesday and touched an all-time low of 0.906%, following the Fed’s first emergency move since the depths of the 2008 financial crisis. The central bank has only another percentage point, or 100 basis points, left to ease until it hits zero, triggering some speculation of quantitative easing. Meanwhile, there was huge demand in the repo market, with the New York Fed’s (overnight and 14-day) operations totaling $120B. It had hoped to reduce its bill purchases in Q2, but uncertainty over the coronavirus could require the Fed to prolong its balance sheet expansion.

\n\nEmergency rate cuts go global?

\n\nThe European Central Bank and the Bank of England are likely to announce stimulus measures in the coming days after the U.S. Fed surprised with a large emergency rate cut. “The ECB could introduce a special facility targeting SMEs (small and medium enterprises) hit by the crisis with looser terms and conditions than other open-market operations,” added Frederik Ducrozet, senior economist at Pictet Wealth Management. The ECB is also providing other types of stimulus to the eurozone via an open-ended bond-purchase program and cheaper funding for banks.

\n\nCoronavirus updates

\n\nCompanies ranging from Google (GOOG, GOOGL) and Twitter (NYSE:TWTR) to Indeed and JPMorgan (NYSE:JPM) have asked many of their employees to work from home to help prevent the spread of coronavirus. Italy (79 deaths, 2,502 cases) is now the worst-affected country from the coronavirus outside Asia, overtaking Iran in terms of the number of fatalities and infections from the virus. WHO added that the coronavirus death rate is 3.4% globally, higher than previously thought (and compared to the less than 1% infected by seasonal flu), but it doesn’t spread as efficiently as influenza.

\n\nVaccines are in the works

\n\nWith about 40 employees working on the project, Takeda Pharmaceutical (NYSE:TAK) is joining Gilead Sciences (NASDAQ:GILD) and AbbVie (NYSE:ABBV) as the latest drugmaker to work on developing a coronavirus vaccine. The experimental drug would be derived from the blood of coronavirus patients who have recovered from the respiratory disease. “While we don’t know for sure that it will work, we think it’s definitely a relevant asset that could be of help here,” said Dr. Rajeev Venkayya, president of Takeda’s vaccines business.

\n\nCrypto makeover

\n\nIn a move to appease regulators, Facebook (NASDAQ:FB) has decided on a scaled-back approach to its Libra digital currency, The Information reports. The company would offer digital versions of government-backed currencies (notably the U.S. dollar and euro) alongside its Libra token, which would be emphasized even though Libra will be supported in its wallet. And while Facebook will still launch a digital wallet allowing for purchases and transfers, it will delay that timetable by several months.

\n\nThe Bullseye gets smaller

\n\nTarget (NYSE:TGT) shares slipped 3% on Tuesday after comparable sales rose 1.5% in Q4 to fall short of the consensus expectation for a rise of 2.1%. A new strategy from the company will also grow its small-format store concept (with drive up programs) and nearly three dozen new stores are planned for this year. Executives think the even smaller store format will help it add traffic in urban neighborhoods and on college campuses.

\n\nElectric Vehicle Day

\n\nGeneral Motors (NYSE:GM) will host a call for investors, starting at 12:30 p.m. ET, to detail the company’s full electrification strategy. It will need to persuade is shareholders that it can catch up with Elon Musk and Tesla (NASDAQ:TSLA), whose market cap hovers around $144B, more than three times GM’s $45B. Credit Suisse analyst Dan Levy still sees GM (Outperform, $47 PT) as one of the best positioned legacy OEMs amid the transition to an EV world, pointing to the automaker’s determination to go big with the accretive business.

\n\nOutput cut deal is near

\n\nAfter initially recommending a cut of 600K barrels per day to support prices, the OPEC+ Joint Technical Committee has proposed slashing oil output by an extra 1M bpd during the second quarter. That would be in addition to 2.1M bpd in current output cuts – including 1.7M bpd in curbs by the group and other voluntary reductions by Saudi Arabia – amid a 27% tumble by Brent crude and WTI since January. OPEC+ is set to meet in Vienna on March 5-6 despite other international conferences being canceled due to the coronavirus.

\n\nWhat else is happening…

\n\nCoronavirus sees Facebook (FB) give free ads to WHO.

\n\nUPS (NYSE:UPS) and FedEx (NYSE:FDX) warn outbreak could hurt operations.

\n\nGold posts largest one-day climb since June.

\n\nBed Bath & Beyond (NASDAQ:BBBY) gets new chief merchandising officer.

\n\nNBCUniversal (NASDAQ:CMCSA) rings up record $1.25B in Olympic ads.

\n\nSupreme Court questions SEC’s ability to recoup billions.

\n\nTuesday’s Key Earnings<\/B>
\nAutoZone (NYSE:AZO) -2.1% on mixed results.
\nHewlett Packard Enterprise (NYSE:HPE) -5.7% AH posting core Compute drop.
\nKohl’s (NYSE:KSS) -2.6% as Wedbush lowered estimates.
\nNordstrom (NYSE:JWN) -7.2% AH missing expectations.
\nTarget (TGT) -3% amid disappointing comp sales.

\n\nToday’s Economic Calendar<\/B>
\n7:00 MBA Mortgage Applications
\n8:15 ADP Jobs Report
\n9:45 PMI Services Index
\n10:00 ISM Non-Manufacturing Index
\n10:30 EIA Petroleum Inventories
\n2:00 PM Fed’s Beige Book

\n\n—————

\n\n Good morning. Happy Tuesday. <\/span>

\n\n The Asian\/Pacific<\/strong> markets mostly posted solid gains. China, India, New Zealand, Taiwan, Indonesia and Thailand led while Japan was the sole major market to close down. Europe, Africa and the Middle East<\/strong> are currently doing great. Almost the entire continent is up 2% or more. This includes the UK, France, Germany, Italy and Spain. Futures in the States<\/strong> point towards a flat open for the cash market. <\/span>

\n\n—————\nVIDEO: State of the Market<\/a> <\/span>\n—————<\/span>

\n\n The dollar is up. Oil is up; copper is down. Gold and silver are up. Bonds are down. <\/span>

\n\n Stories\/News from Seeking Alpha…<\/span>

\n\nThe strongest day in more than a decade immediately followed the worst week since the financial crisis (talk about volatility). The Dow surged over 5% on Monday, while the S&P 500 and Nasdaq each jumped more than 4%, boosted by expectations of central bank firepower to battle the economic impacts of the coronavirus. U.S. futures tacked on another 1% advance overnight, with traders now seeing a 100% chance of a 50-basis point rate cut at the Fed’s March meeting. For what it’s worth, moderate Democrats have also consolidated around Joe Biden’s candidacy ahead of Super Tuesday.

\n\nFirst developed market to cut rates

\n\nG7 finance ministers and central bank governors will hold a conference call today to discuss measures to deal with the coronavirus outbreak. While language of the draft statement (expected today or tomorrow) is subject to change, initial reports suggested it does not detail any fiscal or monetary steps. On Monday, the ECB joined a chorus of central banks signaling a readiness to support financial markets, while the Bank of Australia became the first to cut rates to a record low of 0.5% due to the “significant effect” of the virus.

\n\nTrump renews attack on Powell

\n\n“Australia’s Central Bank cut interest rates and stated it will most likely further ease in order to make up for China’s Coronavirus situation and slowdown. Other countries are doing the same thing, if not more so,” President Trump tweeted overnight. “Our Federal Reserve has us paying higher rates than many others, when we should be paying less. Tough on our exporters and puts the USA at a competitive disadvantage. Must be the other way around. Should ease and cut rate big. Jerome Powell led Federal Reserve has called it wrong from day one. Sad!”

\n\nInvestor meetings

\n\nU.S. oil majors are in the hot seat this week, facing a grilling from Wall Street as they hold their annual investor days – Chevron (NYSE:CVX) on March 3 and Exxon Mobil (NYSE:XOM) on March 5. “The question is whether they will stick with the status quo or pivot,” said Doug Terreson, an analyst at Evercore ISI. “The market does not seem to embrace the current plans.” In the early 2000s, the U.S. oil explorers were getting around 20% returns, though it’s less than half of that today. Concerns over climate change, fossil fuels and impacts on demand from the coronavirus also loom large.

\n\nWaymo raising cash from outside investors

\n\nHighlighting the costs of developing self-driving vehicles, Alphabet’s (GOOG, GOOGL) Waymo has raised $2.25B in its first external investment round and expects to add more outside investors. “It’s a long road getting this technology out to the world,” said CEO John Krafcik. “This is just a normal part of funding our operations.” Waymo didn’t disclose its post-investment valuation, a figure analysts have been trying to assess for years as Alphabet continues to pump cash into the venture.

\n\nUnseating California legislators

\n\nLyft (NASDAQ:LYFT) has placed $2M in a campaign account and Uber (NYSE:UBER) put $200K into a PAC to oppose Tyler Diep, an Orange County assemblyman and the only Republican to vote in favor of California’s AB5. The two have argued that the bill takes away driver flexibility and that their drivers are already correctly classified. The Lyft-backed committee Californians for Independent Work has spent $328K on polling, ads and mailers, including one that calls Diep’s vote “a mockery of his campaign pledge to roll back regulations and promote jobs.”

\n\nHealthcare M&A takes off

\n\nWhile talks broke off late last year, Thermo Fisher Scientific (NYSE:TMO) is acquiring Dutch molecular testing firm Qiagen (NYSE:QGEN) for \u20ac10.4B, including assumed debt. Investors would get \u20ac39 for every Qiagen share, 23% higher than Monday’s closing price. It’s the second major transaction in the healthcare sector this week after Gilead Sciences (NASDAQ:GILD) agreed to buy Forty Seven (NASDAQ:FTSV) for about $4.9B to advance into cancer treatments. QGEN +16% premarket

\n\nSpeeding up same-day delivery

\n\nAmazon (NASDAQ:AMZN) has quietly opened a series of small warehouses closer to big U.S. cities, including Phoenix, Philadelphia, Dallas and Orlando, in a move to shave hours off delivery times. The same-day offer will guarantee delivery of more than 100,000 products in as little as five hours, said Jon Alexander, Amazon’s director of delivery experience, adding that more cities will be added to the program later this year.

\n\nPulling out of SXSW

\n\nFacebook (NASDAQ:FB) has withdrawn from the South by Southwest festival this year, the latest big-event business casualty to concerns over the spreading coronavirus. It joins Twitter (NYSE:TWTR) as the second major tech company to skip the festival for that reason. Facebook had a number of speakers set for panels, and was to host a Facebook house and an activation for its artists-in-residence program. SXSW officials say the show will go on.

\n\nWhat else is happening…

\n\nVisa (NYSE:V) cuts Q2 revenue guidance due to coronavirus.

\n\nLongtime GE (NYSE:GE) boss Jack Welch dies at 84.

\n\nFacing activist investor, Musk supports Twitter’s (TWTR) Dorsey.

\n\nJ&J (NYSE:JNJ) should separate CEO and chairman roles?

\n\nXerox (NYSE:XRX) launches tender offer for HP (NYSE:HPQ).

\n\nApple (NASDAQ:AAPL) settles throttling suit for up to $500M.

\n\nMonday’s Key Earnings<\/B>
\nJD.com (NASDAQ:JD) +12.4% AH on Q4 earnings beat.
\nTilray (NASDAQ:TLRY) -11.7% missing estimates.

\n\nToday’s Economic Calendar<\/B>
\nAuto Sales
\n8:55 Redbook Chain Store Sales
\n6:30 PM Fed’s Evans Speech

\n\n—————

\n\n Good morning. Happy Monday. Hope you had a good weekend. <\/span>

\n\n The Asian\/Pacific<\/strong> markets closed mixed. Japan, China, Hong Kong and South Korea posted gains; India, New Zealand, Taiwan, Australia, Malaysia, Indonesia and the Philippines closed down. Europe, Africa and the Middle East<\/strong> are currently mixed. Denmark, Poland, Turkey, South Africa, Kenya and Hungary are doing well while France, Germany, Russia, Greece, Singapore, Italy, Israel and Austria are down. Futures in the States<\/strong> point towards a moderate down open for the cash market. <\/span>

\n\n—————\nVIDEO: State of the Market<\/a> <\/span>\n—————<\/span>

\n\n The dollar is down. Oil and copper are up. Gold and silver are up. Bonds are up. <\/span>

\n\n Stories\/News from Seeking Alpha…<\/span>

\n\n Big swings in the U.S. futures market are keeping traders on edge following the worst one-week decline for stocks since the global financial crisis. After a dramatic rise-and-fall, U.S. futures pointed to an advance of 2% for most of the night, before giving back the big gains (and even going red) just moments ago. The rally was fueled by hopes that central banks across the world will deliver interest rate cuts. Like the Fed’s Jay Powell on Friday afternoon, the BOJ’s Haruhiko Kuroda on Sunday promised necessary action to support markets.<\/span>\n\n Economic impact on China<\/span>

\n\n Stimulus bets saw China lead gains across Asia, with the Shanghai Composite closing up 3.2%, despite the first look at the economic toll the coronavirus has taken on the country. Fresh data showed Markit\/Caixin’s China manufacturing PMI dropping to 40.3 vs. 51.1 in January, while the official PMI from the National Bureau of Statistics slipped to 35.7 – the lowest level on record. Gaming revenue in Macau also plunged 87.8% in February to 3.10B patacas ($387M) with casinos closed for 15 days and sparse traffic for the balance of the month.<\/span>

\n\n Sub-1% yield is in sight<\/span>

\n\n The 10-year Treasury yield touched a fresh record low of 1.03% over the last few hours as investors scrambled for safety. The benchmark rate, which moves inversely with prices, tumbled about 37 basis points in February alone. What else is moving? Gold raced through early 2020 to its highest level in seven years before plunging 4.6% on Friday in its sharpest drop since 2013, while oil jumped as much as 4% overnight, up from multi-year lows hit earlier on Monday.<\/span>

\n\n Coronavirus updates<\/span>

\n\n As coronavirus cases climb to 90,000 worldwide, the U.S. has recorded at least 89 infections, according to the CDC. Health authorities in Washington state confirmed the first and second death in the U.S. from the disease over the weekend, with cases of the virus now being reported across ten states and populous cities. The first in NYC announced on Sunday was a woman in her late 30s who recently traveled to Iran. Quarantine procedures of 14 days are in effect.<\/span>

\n\n World growth on watch<\/span>

\n\n Global output is expected to fall during the first three months of this year due to the coronavirus, putting the economy at risk of recession, according to fresh forecasts from the OECD. In its “best case” scenario, the global economy would grow by 2.4% during 2020 (vs. 2.9% last year), before rebounding in 2021. However, the recovery won’t be immediate, and some lost output would never be recovered. “It’s not like it plunges and then it recovers quickly,” said Laurence Boone, the OECD’s chief economist.<\/span>

\n\n Coronavirus puts IPOs on ice<\/span>

\n\n While Warner Music (WMGC), the world’s third-largest music recording label, and shoemaker Cole Haan (CLHN) had hoped to communicate their targeted share price ranges today, those plans have been put on hold. The companies had also intended to begin formal meetings with potential IPO investors, according to Reuters, but last week’s market volatility is making it difficult for underwriters to find steady demand for shares. Some $65B in stock was sold through U.S. IPOs in 2019, thanks to high-profile listings like Uber (NYSE:UBER) and Lyft (NASDAQ:LYFT).<\/span>

\n\n Replacing Dorsey?<\/span>

\n\n Keep an eye on Twitter shares, which are soaring 8.7% premarket, after Elliott Management took a sizable stake in the company to push for notable changes. Among the issues for activist investor Paul Singer is Jack Dorsey’s dual CEO roles at Twitter (NYSE:TWTR) and Square (NYSE:SQ), as well as his desire to move to Africa for six months. Dorsey is the only CEO of two public companies with market valuations of more than $5B.<\/span>

\n\n GE bear no longer<\/span>

\n\n “We were wrong,” JPMorgan analyst Stephen Tusa admits, raising his call (made in April 2019) on General Electric (NYSE:GE) to Neutral from Underweight amid a six-month rally that has added more than 30% to the company’s market value. He also lifted his price target by $3, to $8 per share, a notable change for the longtime GE bear. “The spread between our free cash-flow estimate and consensus is narrower after a better-than-expected 2019, helped by less de-risking at GE Capital Services,” Tusa wrote to clients. “With zero sells and multiple upgrades since CEO Culp took over, we see little debate about sentiment.” GE +1.4% premarket.<\/span>

\n\n Nokia CEO quits after setbacks<\/span>

\n\n Struggling to gain a foothold in the 5G market, Nokia (NYSE:NOK) CEO Rajeev Suri is stepping down after just over half a decade at the helm of the Finnish network firm. He’ll be replaced by Pekka Lundmark, the outgoing CEO of Fortum Oyj, amid reports that Nokia is exploring strategic options. In October, Nokia suspended its dividend and cut its earnings guidance, triggering a 23% decline for its share price in a single day, while over the past 12 months, the company has lost about a third of its market value.<\/span>

\n\n Capitalizing on 5G<\/span>

\n\n Walmart (NYSE:WMT) is looking to outfit its stores with antennas and other equipment to create next-generation networks, and is talking with Verizon (NYSE:VZ) about its 5G technology. The plan would initially bring 5G wireless service to a pair of locations this year to power new Walmart digital health services the retailer aims to start offering to shoppers and employees, WSJ reports. It would also provide faster wireless connections for other store operations and the surrounding community.<\/span>

\n\n What else is happening…<\/span>

\n\n Trump says Fed should start being a leader.<\/span>

\n\n 3M (NYSE:MMM) bolsters N95 face mask production.<\/span>

\n\n Sick employee prompts Nike (NYSE:NKE) to shut Europe HQ.<\/span>

\n\n Automakers rush to secure supply lines.<\/span>\n\n Cybertruck (NASDAQ:TSLA) passes early test with construction pros.<\/span>

\n\n Toyota (NYSE:TM) plans new $1.2B EV plant in Tianjin, China.<\/span>

\n\n Tentative deal reached in Canada pipeline dispute.<\/span>

\n\n Today’s Economic Calendar<\/strong>
\n 9:45 PMI Manufacturing Index
\n 10:00 ISM Manufacturing Index
\n 10:00 Construction Spending<\/span><\/span><\/span><\/span>
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Good morning. Happy Friday. The Asian\/Pacific markets suffer big, across-the-board losses. Japan, Hong Kong, South Korea, India, New Zealand, Taiwan, Australia, Indonesia, Singapore, Thailand and the Philippines – all down big. Europe, Africa and the Middle East are currently down big. Practically every major and minor market is down 2-4% or more. Futures in the […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[2],"tags":[],"_links":{"self":[{"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/posts\/13803"}],"collection":[{"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=13803"}],"version-history":[{"count":13,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/posts\/13803\/revisions"}],"predecessor-version":[{"id":13847,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/posts\/13803\/revisions\/13847"}],"wp:attachment":[{"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=13803"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=13803"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=13803"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}