{"id":14015,"date":"2020-05-11T12:58:33","date_gmt":"2020-05-11T12:58:33","guid":{"rendered":"http:\/\/blog.leavittbrothers.com\/?p=14015"},"modified":"2020-05-15T13:09:19","modified_gmt":"2020-05-15T13:09:19","slug":"before-the-open-may-11-15","status":"publish","type":"post","link":"https:\/\/blog.leavittbrothers.com\/?p=14015","title":{"rendered":"Before the Open (May 11-15)"},"content":{"rendered":"\n Good morning. Happy Friday. <\/span>

\n\n The Asian\/Pacific<\/strong> markets closed with a lean to the upside. Japan, Taiwan, Australia and Malaysia posted gains; the Philippines and Hong Kong leaned down. Europe, Africa and the Middle East<\/strong> currently lean up. The UK, Denmark, Turkey, Germany, Russia, Greece, South Africa, Norway and the Czech Republic are up; Spain is down. Futures in the States<\/strong> point towards a moderate gap down open for the cash market. <\/span>

\n\n—————\nVIDEO: Playing A-B-C Patterns with MACD and Stochastic<\/a> <\/span>\n—————<\/span>

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

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

\n\nAs the U.S. tries to wrestle global supply chains back from China, Taiwan Semiconductor (NYSE:TSM), a major supplier to Apple (NASDAQ:AAPL) and Qualcomm (NASDAQ:QCOM), has confirmed plans to build a $12B chip factory in Arizona. The plant, which would create over 1,600 jobs, will produce the most sophisticated 5-nanometer chips that can be used in high-end defense and communications devices. The Trump administration is also in talks with Intel (NASDAQ:INTC) about new foundries. While the company has major manufacturing operations in the U.S., it supplies only its own chips rather than making them for outside customers.

\n\nManufacturing drive

\n\n“These stupid supply chains that are all over the world… and one little piece of the world goes bad, and the whole thing is messed up,” President Trump told Fox Business Network’s Maria Bartiromo. “We shouldn’t have supply chains. We should have them all in the United States,” he added, citing effects of the coronavirus pandemic. “My goal is to produce everything America needs for ourselves and then export to the world.”

\n\nEssential drugs

\n\nThe White House is also preparing an executive order which will require certain essential drugs be made in the U.S., sources told CNBC\u2019s Kayla Tausche, adding that an announcement could come as soon as today. The order would direct HHS to study the supply chain, analyze weaknesses and report back to the Trump administration in 90 days. About 72% of pharma ingredient manufacturers supplying the U.S. are located overseas, including 13% in China, according to an October congressional testimony by Janet Woodcock, director of the FDA’s Center for Drug Evaluation and Research.

\n\nRetail sales

\n\nA choppy session ensued on Thursday following the release of weekly jobless claims that saw another 3M Americans filing for benefits, bringing the total number to more than 36M since the coronavirus crisis began. All three major U.S. stock indexes ended the session solidly higher, however, while futures climbed another 0.3% overnight. A White House spokeswoman said President Trump is open to another possible stimulus bill, but will not sign the bill put forward by House of Representatives Democrats. On the calendar for today is retail sales data for April, expected to have collapsed 12% last month, marking the second-biggest decline since the government started tracking the series in 1992.

\n\nCoronavirus test scrutiny

\n\nShares of Abbott Laboratories (NYSE:ABT) are off 3% premarket as the FDA investigates preliminary data that found inconsistencies with the company’s rapid coronavirus test. The analysis of ID NOW, which is used at the White House, found that it missed at least a third of positive cases detected by a rival test and as much as 48% when using the currently recommended dry nasal swabs. Abbott rejected the findings, saying the researchers used the test “in ways that it was not designed to be used.”

\n\nReopening the trading floor

\n\nThe New York Stock Exchange (NYSE:ICE) will open to a subset of floor brokers on May 26, who will be required to wear masks and follow strict social distancing requirements. They’ll also be encouraged to avoid public transportation, and will be screened and have their temperatures taken when they enter the building. Why open if the exchange was functioning remotely? “Recent data demonstrate that our trading floor saves investors millions of dollars each day by making transactions more efficient,” said NYSE President Stacey Cunningham.

\n\n2Africa

\n\nFacebook’s (NASDAQ:FB) internet project is moving forward with the help of some global partners, including China Mobile (NYSE:CHL), Orange (NYSE:ORAN) and Vodafone (NASDAQ:VOD). The 23,000-mile underwater internet cable circling the continent will link 16 countries with Europe and the Arabian peninsula and more than double its potential bandwidth. Construction is expected to be completed in 2023 or early 2024 and highlights increased interest from Silicon Valley companies in Africa.

\n\nNext retail bankruptcy

\n\nWhile final negotiations with lenders could still spill into the weekend, J.C. Penney (NYSE:JCP) is planning to file for bankruptcy within the next 24 hours, CNBC reports. The retailer has been in discussions with its first-lien lenders for a $450M loan to finance the bankruptcy and would require the achievement of certain goals to receive the second half of it. Restructuring plans include closing 180-200 out of the 846 J.C. Penney department stores that were active as of February.

\n\nWhat else is happening…

\n\nApple (AAPL) roundup: Glasses in 2022, acquires NextVR.

\n\nBoeing (NYSE:BA) creates group to help get people back on planes.

\n\nUber (NYSE:UBER)-Grubhub (NYSE:GRUB) deal could be a breeze with DOJ.

\n\nTens of thousands of layoffs hitting Office Depot (NASDAQ:ODP).

\n\nNike (NYSE:NKE) sees ‘material’ impact as stores begin to reopen.

\n\nHigher volumes has FedEx (NYSE:FDX) apply package shipping limits.

\n\nSixth confirmed Amazon (NASDAQ:AMZN) worker dies from COVID-19.

\n\nSanofi (NASDAQ:SNY) backtracks on COVID-19 vaccine priority access.

\n\nThursday’s Key Earnings<\/B>
\nApplied Materials (NASDAQ:AMAT) +4.7% AH on earnings, revenue misses.

\n\nToday’s Economic Calendar<\/B>
\n8:30 Retail Sales
\n8:30 Empire State Mfg Survey
\n9:15 Industrial Production
\n10:00 Business Inventories
\n10:00 Consumer Sentiment
\n10:00 Job Openings and Labor Turnover Survey
\n1:00 PM Baker-Hughes Rig Count
\n4:00 PM Treasury International Capital

\n\n———————–

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

\n\n The Asian\/Pacific<\/strong> markets closed with stiff losses. Japan, China, Hong Kong, India, Taiwan, Australia, Indonesia, Singapore and Thailand all posted big losses. Europe, Africa and the Middle East<\/strong> are down big. The UK, France, Poland, Turkey, Germany, Russia, South Africa, Finland, Switzerland, Norway, Hungary, Spain, the Netherlands, Italy, Portugal, Israel, Austria, Sweden and the Czech Republic are mostly down 2-4%. Futures in the States<\/strong> point towards a moderate gap down open for the cash market. <\/span>

\n\n—————\nVIDEO: Playing A-B-C Patterns with MACD and Stochastic<\/a> <\/span>\n—————<\/span>

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

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

\n\nStock index futures appear to be in wait-and-see mode, inching between gains and losses overnight, as hopes for a quick economic rebound are brought into question. “The path ahead is both highly uncertain and subject to significant downside risks,” Jerome Powell declared yesterday as the S&P 500 closed lower for the second day in a row. The Fed Chair also called for additional fiscal support, and on the monetary side, added that negative rates are “not something we are looking at.” Amid the warnings of a prolonged recession, data today is expected to show another 2.5M Americans filing jobless claims for the week ended May 9, lifting the total number to about 36M since March 21, or nearly a quarter of the working age U.S. population.

\n\nBulls and the bears

\n\nSome Wall Street heavyweights are sounding the alarm over stock prices, saying the risk-reward of holding shares is the worst they’ve seen in years. Over the last few days, Stan Druckenmiller has called a V-shaped recovery a “fantasy,” while David Tepper said that next to 1999, equities are overvalued the most he’s ever seen (but doesn’t expect the market to retest the bottom). Others, like Bill Miller, aren’t buying the sentiment, and don’t see the market as “dramatically overvalued.”

\n\n‘Uncertainties remain’ in the oil industry

\n\nMarket forces have “demonstrated their power” in recent weeks, according to the IEA, but a resurgence of coronavirus cases will have “major consequences.” In its closely-watched monthly report, crude demand showed a fall of 8.6M bpd to 91.2M for 2020, while on the supply side, it expected a “spectacular” fall of 12M bpd this month, falling to a nine-year low of 88M. Executive Director Fatih Birol said it will take more than a year, and perhaps several, for oil demand to recover to what it was before the coronavirus pandemic.

\n\nHigh court tosses stay-at-home order

\n\nWhile lockdown orders have been challenged across several states, the latest decision from Wisconsin marks the first such lawsuit to succeed against a broader political debate taking place across the nation. In a 4-3 ruling, the Wisconsin Supreme Court struck down the state’s stay-at-home order as “unlawful, invalid, and unenforceable” and said the state’s health secretary exceeded her authority. The order, which had been set to run until May 26, also restricted travel and business, along with threatening jail time or fines for those who don’t comply.

\n\nReturn to work dilemma

\n\nTesla (NASDAQ:TSLA) CEO Elon Musk has said staff should stay at home if they feel uncomfortable returning to work, but the latest company email puts workers at a crossroads. “Once you are called back, you will no longer be on furlough so if you choose not to work, it may impact your unemployment benefits as determined by your local government agency \u2013 and not by Tesla. We completely respect your decision and will support you, without any penalties from us,” read an email from HR boss Valerie Workman. Police visited Tesla’s Fremont plant on Wednesday to assess whether the EV maker was adhering to “reopening” safety protocols agreed to with Alameda County.

\n\nVaccine priority access

\n\nIt would be “unacceptable” for French pharma giant Sanofi (NASDAQ:SNY) to reserve any COVID-19 vaccine for the U.S. first, after the firm’s chief said he would give preference to the American market because “it’s invested in taking the risk.” “For us, it would be unacceptable for there to be privileged access to such and such a country for financial reasons,” deputy finance minister Agnes Pannier-Runacher told Sud Radio. In April, Sanofi joined with Britain’s GlaxoSmithKline (NYSE:GSK) to work on the vaccine, though trials have not even started.

\n\nPexip paves way for virtual IPOs

\n\nWith video communication on many investors’ minds, shares in Norway’s Pexip soared by 54% this morning on the Oslo Stock Exchange, following an IPO that was more than 12 times oversubscribed. “The fact that 100% of the virtual 1-1 meetings on the roadshow led to subscriptions to the IPO also demonstrates that virtual meetings can be just as impactful, even when they involve complex negotiations,” said CEO Odd Sverre \u00d8stlie. Pexip competes with Zoom (NASDAQ:ZM) and Bluejeans (NYSE:VZ), and says its video conferencing software is used by the U.S. military and the German government.

\n\nOnly an hour

\n\nSocial media companies will now have only one hour to delete content related to pedophilia and terrorism, according to a new French law, or face a fine of up to 4% of their global revenue. For other “manifestly illicit” content, companies like Facebook (NASDAQ:FB), Twitter (NYSE:TWTR), YouTube (GOOG, GOOGL), Instagram and Snapchat (NYSE:SNAP) will have 24 hours to remove it. It’s the latest legislation by Paris against tech giants. Earlier this year, France passed a controversial “digital tax,” though its implementation was delayed as the country worked out a broader international tax agreement.

\n\nMortgage payment deferral

\n\nThe Freddie Mac (OTCQB:FMCC) COVID-19 Payment Deferral solution returns a homeowner’s monthly mortgage payments to their pre-COVID amount by adding up to 12 months of missed payments, including escrow advances, to the end of the mortgage terms without accruing any additional interest or late fees. This will help borrowers keep their mortgage payment current following their hardship when other options – such as reinstatement, or a repayment plan – are not viable. Fannie Mae (OTCQB:FNMA) also unveiled a COVID-19 payment deferral option that allows homeowners in forbearance due to the pandemic to shift their missed payments to the end of the loan term.

\n\nIntelsat files for bankruptcy

\n\nWeighed down by roughly $14.5B in debt, satellite operator Intelsat (NYSE:I) has filed for bankruptcy protection. It’s seeking to use the Chapter 11 proceedings to assist it in taking advantage of a planned auction of a swath of spectrum currently being used by satellite operators that the FCC wants to be repurposed for 5G networks. In order to be eligible to receive $4.87B in accelerated relocation payments, the company needs to spend more than $1B on clearing activities, and it’s secured a commitment for $1B in debtor-in-possession financing.

\n\nWhat else is happening…

\n\nAirline industry gloom sees GE (NYSE:GE) sink to near three-decade low.

\n\nGrubhub (NYSE:GRUB) takeover by Uber (NYSE:UBER) valued at $6B.

\n\nNYC lawmakers cap third-party delivery fees.

\n\nFiat (NYSE:FCAU) and Peugeot (OTCPK:PEUGF) say merger on, dividends off.

\n\nTyson (NYSE:TSN) to cut some beef prices as much as 30%.

\n\nCalifornia Resources (NYSE:CRC) could be on verge of bankruptcy.

\n\nNomura sees cloud boost despite spending slowdown.

\n\nWednesday’s Key Earnings<\/B>
\nCisco (NASDAQ:CSCO) +2.4% AH limiting Q3 revenue downside.
\nSmileDirectClub (NASDAQ:SDC) -3.2% AH on Q2 headwinds from pandemic.

\n\nToday’s Economic Calendar<\/B>
\n8:30 Initial Jobless Claims
\n8:30 Import\/Export Prices
\n10:30 EIA Natural Gas Inventory
\n1:00 PM Fed’s Kashkari: “Our Economy and Health in Crisis”
\n4:30 PM Money Supply
\n4:30 PM Fed Balance Sheet
\n6:00 PM Fed’s Kaplan Speech

\n\n————————

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

\n\n The Asian\/Pacific<\/strong> markets were mixed. South Korea, India and Malaysia closed up; Indonesia, Singapore and Thailand closed down.Europe, Africa and the Middle East<\/strong> are currently mostly down. The UK, Denmark, France, Germany, Russia, Greece, Finland, Norway, Hungary, Spain, the Netherlands, Italy, Israel, Austria, Sweden and the Czech Republic are down. Only Turkey and South Africa are up much. Futures in the States<\/strong> point to a positive open for the cash market. <\/span>

\n\n—————\nVIDEO: Playing A-B-C Patterns with MACD and Stochastic<\/a> <\/span>\n—————<\/span>

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

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

\n\nInvestors will be closely monitoring today’s speech from Jerome Powell as he discusses current economic issues in a webcast hosted by the Peterson Institute for International Economics. President Trump piled pressure on the Fed Chair on Tuesday, saying the U.S. should accept the “gift” of negative interest rates, as Fed Fund futures begin to price in a chance of America following the ECB, Japan (and maybe the U.K.) in going sub-zero. The view on the unconventional monetary policy spans the spectrum, with some market players cautioning they would be fatal and others arguing they are inevitable. “When you have negative rates, you wind up creating downward pressure on bank profitability, which limits credit expansion,” Powell said in congressional testimony back in November, but given the current environment, that sentiment could change.

\n\nHeading higher

\n\nIt didn’t take long for markets to resume their climb upwards as U.S. stock index futures advanced 0.7% overnight to rebound from yesterday’s selloff. Major indices slumped 2% on Tuesday amid fears about a second wave of coronavirus infections. In his testimony to the Senate, Dr. Anthony Fauci warned lawmakers that a premature lifting of lockdowns could lead to additional outbreaks of COVID-19, which has so far killed 80,000 Americans and ravaged the economy.

\n\nExpanded coronavirus vaccine trials

\n\nPfizer (NYSE:PFE) is currently testing four different coronavirus vaccine variations and plans to expand human trials to thousands of test patients by September. The pharma giant, which is working alongside German drugmaker BioNTech (NASDAQ:BNTX), injected doses of its potential vaccine, BNT162, into the first human participants in the U.S. last week. If a vaccine proves safe, Pfizer “will be able to deliver millions of doses in the October time frame” and expects to produce hundreds of millions of doses in 2021.

\n\nInvestment war?

\n\nThe Trump administration has directed the U.S. federal employee retirement fund to scrap the placement of more than $4B into Chinese investments, a decision it had intended to boost returns. At issue is whether the Thrift Savings Plan should track an index that includes some China-based stocks like Aviation Industry Corp of China, which supplies China’s military, as well as Hangzhou Hikvision, which was sanctioned by Washington for human rights abuses. “Using the excuse of national security to restrict access to China’s markets goes against economic rules and damages U.S. investors’ own interests,” responded Chinese foreign ministry spokesperson Zhao Lijian.

\n\nAnother month without an airliner order

\n\nBoeing (NYSE:BA) recorded zero orders for the second time this year in April and customers canceled another 108 orders for the grounded 737 MAX, further whittling down the company’s backlog of planes to 4,834 planes – its smallest since 2013. The company delivered just six planes last month, bringing the YTD total to 56, down 67% from a year earlier. Airbus (OTCPK:EADSY) meanwhile received orders for nine planes in April, bringing its 2020 total to 299 planes, and had a backlog of 7,645 jets.

\n\nEnd to the standoff in Fremont

\n\nHealth officers for Alameda County said Tesla (NASDAQ:TSLA) can open its sole U.S. car factory in Fremont if it adopts extra recommendations to battle the coronavirus in its safety plans. Minimum business operations would begin this week in preparation for a possible reopening as soon as next week. “Provided that the data show progress with our COVID-19 indicators during this two week period, we would allow additional approved activities for local businesses, including Tesla,” read a tweet from the Alameda County Public Health Department. TSLA +2% premarket.

\n\nSelf-driving fundraising

\n\nWaymo has raised a further $750M for its first external fundraising round, pushing the total to $3B thanks to some additional investors. The new cash is sure to be welcome news to the finance department. Waymo is said to be costing Alphabet (GOOG, GOOGL) nearly $1B compared to the revenue it makes from its limited commercial robot taxi service in Phoenix, Arizona. Prior to the pandemic, the company said it was facilitating 1K\u20132K ride-hailing trips in Arizona a week, 5%-10% of which were without human backup drivers.

\n\nUberhub

\n\nShares of Grubhub (NYSE:GRUB) and Uber (NYSE:UBER) soared on Tuesday following reports of a merger. A deal would give Uber Eats’ money-losing restaurant delivery service a leg up on market leader DoorDash (DOORD) at a time when the coronavirus pandemic has upended Uber’s core business of ride-hailing. The two companies are still haggling over the deal’s stock exchange ratio, though some say the tie-up could be finalized this month.

\n\nWatching the ad industry

\n\nBig advertisers like General Motors (NYSE:GM), PepsiCo (NASDAQ:PEP) and General Mills (NYSE:GIS) are seeking to take advantage of options that became available May 1 to cancel up to 50% of third-quarter TV spending, writes WSJ’s Suzanne Vranica. That doesn’t bode well for owners of broadcast and cable networks, from Comcast (NASDAQ:CMCSA) and NBCUniversal to ViacomCBS (NASDAQ:VIAC) and Walt Disney (NYSE:DIS). Where’s the money going? Much of it will likely be aimed at shoring up the firm’s balance sheets, while some is shifting to areas like digital video and e-commerce.

\n\nStay in your pajamas

\n\nTech may be leading the way in turning remote work into the new norm after the coronavirus pandemic. Expanding on a recent trend seen at major tech companies like Facebook (NASDAQ:FB), Alphabet (GOOG, GOOGL) and others, which have announced work-from-home setups until 2021, Twitter (NYSE:TWTR) has upped the ante to “forever.” The option wouldn’t apply to those required to make a physical appearance, like certain maintenance staff, but instead would apply to those who can perform their job functions remotely.

\n\nWhat else is happening…

\n\nU.K. economy shrinks at fastest pace since financial crisis.

\n\nAmazon (NASDAQ:AMZN) likely to extend French warehouse closures.

\n\nOccidental (NYSE:OXY) is offering voluntary job buyouts.

\n\nISS against splitting Exxon (NYSE:XOM) CEO, chairman roles.

\n\nSony’s (NYSE:SNE) PS5 on track for 2020 holiday season.

\n\nJ.C. Penney (NYSE:JCP) eyes Friday bankruptcy filing.

\n\nNeiman Marcus (NMG)-Saks (OTCPK:HBAYF) merger run up the flagpole.

\n\nMGM Resorts (NYSE:MGM) discusses plans to reopen casinos.

\n\nTuesday’s Key Earnings<\/B>
\nDuke Energy (NYSE:DUK) +0.3% maintaining earnings guidance.
\nHonda (NYSE:HMC) -5.3% following a profit plunge.
\nMacerich (NYSE:MAC) -2% giving back “reopening” gains.

\n\nToday’s Economic Calendar<\/B>
\n7:00 MBA Mortgage Applications
\n8:30 Producer Price Index
\n9:00 Jerome Powell Speech
\n10:00 Atlanta Fed’s Business Inflation Expectations
\n10:30 EIA Petroleum Inventories
\n1:00 PM Results of $22B, 30-Year Note Auction

\n\n—————————-

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

\n\n The Asian\/Pacific<\/strong> markets closed mostly down. New Zealand and Thailand did well, but Hong Kong, South Korea, India, Taiwan, Australia, Indonesia and Singapore were weak. Europe, Africa and the Middle East<\/strong> are currently mostly up. The UK, Poland, Turkey, Germany, South Africa, Norway, Hungary, Spain, Italy, Sweden, Saudi Arabia and the Czech Republic are leading; Austria is weak. Futures in the States<\/strong> point towards a positive open for the cash market. <\/span>

\n\n—————\nVIDEO Book Review: Mindset, by Carol Dweck<\/a> <\/span>\n—————<\/span>

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

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

\n\nThe central bank’s Secondary Market Corporate Credit Facility will begin purchases today of eligible exchange-traded funds invested in corporate debt, seeing the method as a fast way to direct money into the credit markets. It’s a historic milestone for the Fed, which hasn’t yet bought any ETFs. The program, managed by BlackRock (NYSE:BLK), centers around investment grade corporate bonds, though some will be high-yield. Another Fed facility designed to buy debt directly from issuers, the Primary Market Corporate Credit Facility, is set to launch “in the near future.”

\n\nAhead of the open

\n\nAnother mixed day may be in store on Wall Street amid optimism about an economic recovery and fears about a second wave of coronavirus infections (Dr. Fauci will testify before the Senate at 10 a.m.). Pointing to bigger gains overnight, U.S. stock index futures have now inched closer to the flatline, up 0.2%. On the trade front, President Trump said he opposed renegotiating the U.S.-China Phase One deal, while Beijing announced a new list of 79 American products eligible for waivers from retaliatory tariffs.

\n\nAviation industry warning

\n\n“Air traffic levels will not be back to 100% by September. They won’t even be back to 25%. Maybe by the end of the year we approach 50%,” Boeing (NYSE:BA) CEO Dave Calhoun said in an interview with NBC to be aired today. “So there will definitely be adjustments that have to be made on the part of the airlines.” Asked by Today show host Savannah Guthrie if a major airline might have to fold, Calhoun replied, “Yes, most likely.” Related tickers: AAL, ALGT, ALK, DAL, FRNT, HA, JBLU, LUV, SAVE, UAL

\n\nLargest solar project in the U.S.

\n\nThe Department of the Interior has given final approval for Berkshire Hathaway’s (BRK.A, BRK.B) $1B solar project in Nevada that could power 260K households, enough to cover the entire residential population of Las Vegas. When finished, the 690 MW Gemini Solar Project would become the world’s eighth largest solar power facility in the world, spanning some 7,100 acres of federal land. The developers aim to build the project in two phases over 28 months, with the first portion coming online in early 2021 and final facility completion as early as 2022.

\n\nShale pioneer considers bankruptcy

\n\nChesapeake Energy (NYSE:CHK) does not expect to be in compliance with financial covenants beginning in Q4 and “management has concluded that there is substantial doubt about the company’s ability to continue as a going concern.” It’s the second such warning by the company since November. This quarter’s review of the value of Chesapeake’s untapped oil and gas reserves is likely to show a decline due to its distressed finances, reducing its ability to borrow against those assets.

\n\nTesla ignores local authorities

\n\nTesla (NASDAQ:TSLA) restarted production yesterday in Fremont against Alameda County rules, ratcheting up a dispute that has received national coverage. “I will be on the line with everyone else. If anyone is arrested, I ask that it only be me,” stated Elon Musk. Alameda’s Public Health Department said it’s addressing the matter with the same phased approach it uses for other businesses that have violated the order in the past. As for Musk, he didn’t end up in handcuffs.

\n\nBranson cashes in part of space venture

\n\nLooking to shore up its other travel and tourism businesses, Richard Branson’s Virgin Group plans to sell as much as 12% (worth around $500M) of space-tourism venture Virgin Galactic (NYSE:SPCE). Last Month, Virgin Australia filed for bankruptcy, while U.K.-based Virgin Atlantic is asking for financial assistance from the U.K. government. Other businesses, such as a new Virgin cruise-line venture and a U.S. hotel group, have also been whacked by the coronavirus pandemic.

\n\nSub-zero in the U.K.

\n\nBritain could be headed toward negative interest rates at upcoming Bank of England monetary policy meetings, declared Deputy Governor for Monetary Policy Ben Broadbent. “The committee are certainly prepared to do what is necessary to meet our remit with risks still to the downside,” he told CNBC. Besides two previous rate cuts, the BOE has announced \u00a3200B of fresh quantitative easing, bringing its bond buying program to a total of \u00a3645B.

\n\nVodafone keeps dividend

\n\nVodafone (NASDAQ:VOD) +5.4% premarket after meeting estimates with a 2.6% rise in full-year core earnings to \u20ac14.9B, though it pulled guidance due to coronavirus uncertainty. “We are experiencing a direct impact on our roaming revenues from lower international travel,” according to the company, “however, we are seeing significant increases in data volumes and further improvements in loyalty.” Vodafone also maintained its full-year dividend at \u20ac9.00 a share after cutting the payout a year ago to shore up its balance sheet.

\n\nLatest move against disinformation

\n\nTwitter (NYSE:TWTR) is beginning to label tweets that contain “disputed or misleading” information about the coronavirus and the COVID-19 pandemic. Some tweets may simply come with a linked label directing users to additional information; other tweets may be covered entirely by a warning label that will say “that the information in the Tweet conflicts with public health experts’ guidance before they view it.” The potential remedies may also include removal of the information.

\n\nWhat else is happening…

\n\nOver-the-air updates for Ford’s (NYSE:F) Mustang Mach-E.

\n\nBlackRock’s (NASDAQ:BL) largest shareholder sells 22% stake.

\n\nHard times in hospitality has Hyatt (NYSE:H) lay off 1,300.

\n\nToyota (NYSE:TM) sees profit dropping 80% in 2020.

\n\nSaudi Aramco’s (ARMCO) Q1 net profit tumbles 25%.

\n\nGeneral Mills (NYSE:GIS) lifts outlook on at-home demand.

\n\nWeWork (WE) directors seek right to continue SoftBank (OTCPK:SFTBY) fight.

\n\nPaul Tudor Jones has 1-2% of assets in Bitcoin (BTC-USD).

\n\nMonday’s Key Earnings<\/B>
\nEnergy Transfer (NYSE:ET) +0.7% cutting 2020 capex by another $400M.
\nHertz (NYSE:HTZ) -2.8% AH after liquidity update, earnings.
\nSimon Property Group (NYSE:SPG) +4.6% AH reopening 89 properties.
\nTilray (NASDAQ:TLRY) -5.3% AH as losses piled up.
\nUnder Armour (NYSE:UAA) -9.7% warning of a sharp revenue decline.

\n\nToday’s Economic Calendar<\/B>
\n6:00 NFIB Small Business Optimism Index
\n8:30 Consumer Price Index
\n8:55 Redbook Chain Store Sales
\n9:00 Fed’s Bullard: \u201cThe Federal Reserve’s Outlook for Testing Times\u201d
\n10:00 Fed’s Harker Speech
\n10:00 Randal Quarles to testify before the Senate Banking Committee
\n1:00 PM Results of $32B, 10-Year Note Auction
\n2:00 PM Treasury Budget
\n5:00 PM Fed’s Mester Speech

\n\n———————–

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

\n\n The Asian\/Pacific<\/strong> markets closed mostly up. Japan, Hong Kong, Taiwan, Australia, Indonesia and Thailand did well; South Korea was weak. Europe, Africa and the Middle East<\/strong> are currently mostly down. Denmark is doing well, but Poland, France, Germany, South Africa, Spain, the Netherlands, Israel, Austria, Sweden and Saudi Arabia are notably. Futures in the States<\/strong> point towards a down open for the cash market. <\/span>

\n\n—————\nVIDEO Book Review: Mindset, by Carol Dweck<\/a> <\/span>\n—————<\/span>

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

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

\n\nThe electric vehicle maker sued local authorities in California on Saturday as it pushed to reopen its Fremont factory, but things appeared to get heated very quickly. Elon Musk announced he would move Tesla’s (NASDAQ:TSLA) “HQ and future programs to Texas\/Nevada immediately” and said retaining manufacturing in California would be “dependent on how Tesla is treated in the future.” Tesla built nearly half a million vehicles at its Fremont plant in 2019, while Wedbush analyst Dan Ives estimates it could take the company 12 to 18 months to relocate production. TSLA -3.3% premarket.

\n\nComing off last week’s rally

\n\nTraders are kicking off the week with some mixed feelings as U.S. stock index futures wavered between gains and losses overnight. As of the last reading, S&P 500 futures were off 0.7%, signaling weakness in the wake of last week’s economy-defying rally, while oil fell 3% to under $24\/bbl. “Much of the eventual improved growth and virus news is already priced into markets,” said Bob Baur, chief global economist at Principal Global Investors. “Because so much future growth and uptrend potential is priced in, we expect a period of relapse and consolidation through June.”

\n\nWorse before better

\n\nThe jobs numbers on Friday, which displayed an unemployment rate of 14.7% in April, are “probably going to get worse before they get better,” Treasury Secretary Steven Mnuchin told Fox News. “What I said is you’re going to have a very, very bad second quarter,” he added, saying that “next year is going to be a great year” and the U.S. could see “permanent economic damage” if the country does not reopen. The White House is also talking about more fiscal measures to ease the economic pain, but doesn’t want to bail out states that were “poorly managed.”

\n\nEU threatens Germany

\n\nt’s a little complicated, but the latest legal drama taking place in Europe highlights a power struggle that could undermine the euro. The European Commission is threatening to sue Germany after the country’s top court last Tuesday questioned the legality of the ECB’s bond buying program and gave the ECB three months to justify the scheme or else the Bundesbank might have to quit it. The announcement is not likely to trigger an infringement procedure, but is more of a deterrent to show who has final say in these scenarios. “The last word on EU law is always spoken” by the European court, European Commission President Ursula von der Leyen declared. “Nowhere else.”

\n\nU.K. tries to get economy moving again

\n\nStarting today, British citizens who cannot work from home are being “actively encouraged” to go back to work, but avoid using public transport if possible. “If there are outbreaks, if there are problems, we will not hesitate to put on the brakes,” added Prime Minister Boris Johnson. The country has suffered the highest numbers of deaths in Europe, with nearly 32K people dying from COVID-19, while BOE Governor Andrew Bailey said the economy could shrink by as much as 35% in Q2 if lockdown measures – imposed on March 23 – continued.

\n\nSemi self-sufficiency

\n\nAs concerns grow about reliance on Asia as a source of critical technology, the Trump administration and semiconductor companies are looking to develop chip factories in the U.S., WSJ reports. Officials are discussing new foundries with Intel (NASDAQ:INTC) and Taiwan Semiconductor (NYSE:TSM), and are interested in helping Samsung Electronics (OTC:SSNLF) expand operations. “This is more important than ever, given the uncertainty created by the current geopolitical environment,” Intel CEO Bob Swan wrote in a letter to the U.S. Department of Defense.

\n\nEffects of COVID-19 on shopping malls?

\n\nInitial results will be seen today as Simon Property Group (NYSE:SPG), the biggest U.S. mall operator, reports first quarter figures, followed by the earnings of rival Macerich (NYSE:MAC) tomorrow. Their outlooks for the next few months will be more closely watched than ever before, with malls slowly beginning to reopen and tenants that have either gone out of business or are nearing the edge. Mall operators collected only 15% of April rent and trends are looking worse for May, according to CenterSquare Investment Management.

\n\nLatest retail bankruptcy

\n\nStage Stores, which operates brands including Gordmans and Beall, is the latest retailer to file for bankruptcy since the pandemic began, following J.Crew and Neiman Marcus. It will start selling off inventory when 557 of its stores reopen on May 15, while the rest of its stores are scheduled to reopen in phases on May 28 and June 4 as it searches for prospective buyers. “Given the conditions, we have been unable to obtain necessary financing and have no choice but to take these actions,” declared CEO Michael Glazer.

\n\nTemp checks the new normal at airports?

\n\nAirlines for America, which represents the largest U.S. airlines including American (NASDAQ:AAL), United (NASDAQ:UAL), Delta (NYSE:DAL) and Southwest (NYSE:LUV), is backing the TSA checking temperatures during the coronavirus pandemic. The measure will “add an extra layer of protection for passengers as well as airline and airport employees… and provide additional public confidence that is critical to relaunching air travel and our nation’s economy.” No decision has been made on whether to mandate the checks, but they would follow the industry requiring facial coverings for all flying passengers.

\n\nWhat else is happening…

\n\nStates will distribute Gilead’s (NASDAQ:GILD) remdesivir to fight COVID-19.

\n\nFocusing on vaccine, Pfizer (NYSE:PFE) turns to outsourcing.

\n\nEric Schmidt no longer advisor at Alphabet (GOOG, GOOGL).

\n\nVroom (VROOM) set to test the IPO market.

\n\nModel 3 (TSLA) sales in China plunge 64% in April.

\n\nRichard Branson must pick between space and planes.

\n\nBookings surge for Carnival Cruises (NYSE:CCL).

\n\nToday’s Economic Calendar<\/B>
\n12:30 PM Fed’s Evans Speech
\n1:00 PM Results of $42B, 3-Year Note Auction\n","protected":false},"excerpt":{"rendered":"

Good morning. Happy Friday. The Asian\/Pacific markets closed with a lean to the upside. Japan, Taiwan, Australia and Malaysia posted gains; the Philippines and Hong Kong leaned down. Europe, Africa and the Middle East currently lean up. The UK, Denmark, Turkey, Germany, Russia, Greece, South Africa, Norway and the Czech Republic are up; Spain is […]<\/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\/14015"}],"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=14015"}],"version-history":[{"count":8,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/posts\/14015\/revisions"}],"predecessor-version":[{"id":14036,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/posts\/14015\/revisions\/14036"}],"wp:attachment":[{"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14015"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14015"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14015"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}