{"id":14038,"date":"2020-05-18T13:12:14","date_gmt":"2020-05-18T13:12:14","guid":{"rendered":"http:\/\/blog.leavittbrothers.com\/?p=14038"},"modified":"2020-05-22T13:05:30","modified_gmt":"2020-05-22T13:05:30","slug":"before-the-open-may-18-22","status":"publish","type":"post","link":"https:\/\/blog.leavittbrothers.com\/?p=14038","title":{"rendered":"Before the Open (May 18-22)"},"content":{"rendered":"\n Good morning. Happy Friday. <\/span>

\n\n The Asian\/Pacific<\/strong> markets were very weak. Japan, China, Hong Kong, South Korea, India, New Zealand, Taiwan, Austria, Malaysia, Singapore, Thailand and the Philippines all closed down with moderate or big losses. Europe, Africa and the Middle East<\/strong> are currently mixed. France, Turkey, Greece, Spain, Italy, Portugal and Austria are up; Poland, South Africa, Switzerland, Norway, Hungary and Israel are down. Futures in the States<\/strong> point towards a flat open for the cash market. <\/span>

\n\n—————\nVIDEO: Trade Examples – BC, PS, BLMN, CARG, INO<\/a> <\/span>\n—————<\/span>

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

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

\n\nFollowing the pro-democracy protests that rocked Hong Kong in 2019, China detailed new national security legislation on the city that would clamp down on dissent, with opposition lawmakers warning the territory’s status as an international financial center would be in jeopardy. “Any effort to impose national security legislation that does not reflect the will of the people of Hong Kong would be highly destabilizing,” the U.S. State Department declared, as stocks in Hong Kong slid 5.6% overnight. The law is expected to pass China’s National People’s Congress before the end of its annual session on May 28.

\n\nNational People’s Congress

\n\nIn a sign of the uncertainty facing its economy, China scrapped its annual growth target for the first time since it began the practice in 1994, due to the “global epidemic situation and economic and trade situation.” The country’s economy shrank 6.8% in Q1, the first contraction in decades, setting a somber tone to this year’s annual parliamentary meeting. Remarks from Premier Li Keqiang also addressed dealings abroad, saying, “we will work with the United States to implement the phase one China-U.S. economic and trade agreement.”

\n\nTaking a step back

\n\nS&P 500 futures are down another 0.5% ahead of Memorial Day weekend with the latest tensions between the U.S. and China on display. Beijing detailed new national security legislation for Hong Kong (see above), prompting American lawmakers to propose a bill that would essentially sanction any Chinese officials that enforce such a law. Stocks closed lower on Thursday, but initially posted broad gains as President Trump announced the economy would not shut again if a second wave of coronavirus hits, while Treasury Secretary Steven Mnuchin said there was a “strong likelihood” of another stimulus package.

\n\nSome antibody tests off the market

\n\nEmergency rules from the FDA in March had loosely approved many coronavirus antibody tests as the COVID-19 pandemic spread in the U.S., but the agency is now following up on those regulations. 27 serological tests have been removed from the FDA’s list, and while more than half were from China, a test by Becton Dickinson (NYSE:BDX) – distributed with partner BioMedomics – also got the boot. “BioMedomics has completed development of a second generation of the test… [and] intends to submit a new EUA application to FDA once the second-generation test has successfully completed all validation testing,” Becton Dickinson said in a statement.

\n\nJobs cuts come to IBM

\n\nBig Blue is not disclosing the scale of the layoffs, but WSJ sources said they could affect several thousand people including its Global Technology Services (GTS) division, which offers IT outsourcing. It’s the first major staff reduction under new CEO Arvind Krishna, who is trying to revive growth at the company. Last month, IBM took a $900M charge against earnings, largely to cover restructuring costs linked to GTS.

\n\nEmbracing remote work

\n\nFacebook (NASDAQ:FB) is shifting permanently toward more remote work as it looks to recover from the COVID-19 pandemic, CEO Mark Zuckerberg told employees on Thursday. That marks an expansion of a previous stance that all employees could choose work from home at least for the rest of 2020 – a move topped by Twitter (NYSE:TWTR), which granted the option indefinitely. Facebook plans on building three new “hubs” in Atlanta, Dallas and Denver, where remote workers in those areas could occasionally convene to “foster community.”

\n\nEveryone wants some Jio

\n\nMarking its biggest investment in Asia to date, KKR (NYSE:KKR) is putting $1.5B in Reliance Industries’ Jio Platforms, bringing the amount of new funds raised by the latter over the past month to $10B. A combined stake of just over 17% was raised in five fundraising deals led by Facebook (FB) (other recent investors were General Atlantic, Silver Lake and Vista Equity Partners). The deals highlight Jio’s potential to become the dominant player in India’s digital economy via movies, music apps and telecoms venture Jio Infocomm.

\n\nWho’s in the driver’s seat?

\n\nHertz (NYSE:HTZ) is at loggerheads with a key group of creditors before a deadline today to cut a deal over missed debt payments, Bloomberg reports. The car rental company is running out of time to either extend a forbearance agreement or make around $400M of lease payments, and if no deal is reached, Hertz may need to seek bankruptcy protection. There’s also a chance top shareholder Carl Icahn could swoop in at the last-minute to protect a $1.6B investment, now worth about $170M.

\n\nDefault No. 9

\n\nArgentina is set for its ninth sovereign debt default today as talks with creditors to restructure $65B in foreign debt took “a positive course.” That’s according to Economy Minister Martin Guzman, who declined to comment on whether the government would make around $500M in bond payments. “There is still an important distance to cover,” he added, “but all sides are at the table trying to find a solution.”

\n\nWhat else is happening…

\n\nFederal Reserve’s balance sheet grows to $7.04T.

\n\nU.S. Oil Fund (NYSEARCA:USO) told by broker to stop buying oil futures.

\n\nMacy’s (NYSE:M) forecasts $1B operating loss for 2020.

\n\nPretty much no one is going to Macau.

\n\nAmazon (NASDAQ:AMZN) in India: Food delivery and 50,000 temp workers.

\n\nHeineken (OTCQX:HEINY) CEO leaves for chairman role at Vodafone (NASDAQ:VOD).

\n\nNissan (OTCPK:NSANY) considering 20,000 job cuts.

\n\nGeneral Motors (NYSE:GM) starts to reopen plants in Mexico.

\n\nThursday’s Key Earnings<\/B>
\nBest Buy (NYSE:BBY) -4.4% on lower sales levels.
\nHewlett Packard Enterprise (NYSE:HPE) -5.4% implementing major cost cuts.
\nMedtronic (NYSE:MDT) -2.7% missing expectations.
\nNvidia (NASDAQ:NVDA) -0.4% AH following a week of record closes.
\nTJX Companies (NYSE:TJX) +6.8% suggesting strong sales as store reopened.

\n\nToday’s Economic Calendar<\/B>
\n1:00 PM Baker-Hughes Rig Count

\n\n———————-

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

\n\n The Asian\/Pacific<\/strong> markets were split. South Korea, India, Taiwan, Malaysia and the Philippines closed up; China, Hong Kong, New Zealand and Australia closed down. Europe, Africa and the Middle East<\/strong> currently lean to the downside. Denmark, Turkey, Finland, Norway and Spain are up; France, Germany, Russia, Greece, the Netherlands, Israel, Austria and the Czech Republic are down. Futures in the States<\/strong> point towards a slight down open for the cash market. <\/span>

\n\n—————\nVIDEO: Trade Examples – BC, PS, BLMN, CARG, INO<\/a> <\/span>\n—————<\/span>

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

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

\n\nChina rhetoric is back in the spotlight as President Trump said the coronavirus “pain and carnage” that spread from the country “all comes from the top.” “They could have easily stopped the plague, but they didn’t!” he added, as S&P 500 futures slipped 0.8% in overnight action. The emergence of dozens of new coronavirus cases around the northeastern Chinese city of Shulan has also prompted worries as global coronavirus cases surpassed 5M. In U.S. economic news, today’s weekly jobless claims could offer some early clues on how quickly businesses rehire workers and the success of the Paycheck Protection Program.

\n\nNational People’s Congress

\n\nChina’s top leaders are descending on Beijing as calls grow for an investigation into the government’s handling of the earliest stages of the coronavirus pandemic. About 3,000 delegates to the annual gathering of China’s largely rubber-stamp parliament will discuss political and economic policy after GDP contracted in the first quarter for the first time in decades. The meeting is especially of note as it is not yet clear whether “the Chinese economy can recover after this shock, given the expected restructuring of global supply chains,” added Minxin Pei of Claremont McKenna College.

\n\nListings at risk

\n\nPressure on Chinese companies is building in the U.S. after the Senate unanimously passed the “The Holding Foreign Companies Accountable Act.” Firms like Alibaba (NYSE:BABA) or Baidu (NASDAQ:BIDU) could be forced to give up their listings on American stock exchanges if they fail to comply with the U.S. Public Company Accounting Oversight Board’s audits for three years in a row. The law applies to any foreign company listing or raising capital in the U.S., but China earned a specific mention.

\n\nMinutes & Powell

\n\nMinutes from the Fed’s most recent policy meeting detailed a pledge by the central bank to act as “appropriate to support the economy,” but also showed an evolving debate over how to signal intentions to keep rates low. One strategy would tie future plans to achieving specific economic outcomes (like the unemployment or inflation rate), while a complementary idea would cap long-term interest rates (think yield-curve control at the BOJ). Keep your eyes on the latest Fedspeak today as Jerome Powell speaks at 2:30 p.m. ET.

\n\nSupply deal for coronavirus vaccine

\n\nAstraZeneca (NYSE:AZN) has received more than $1B in U.S. funding to develop a COVID-19 vaccine with the University of Oxford and said it has supply agreements for 400M doses. The money came from the U.S. Biomedical Advanced Research and Development Authority, which has also provided funding for French pharmaceutical giant Sanofi (NASDAQ:SNY). AstraZeneca said it has a total capacity sourced for 1B doses through 2020 and into 2021, and continues to increase capacity further.

\n\nNext wave of coronavirus disruption?

\n\nAdditional economic fallout may be seen from the coronavirus pandemic as automation is increased in the retail industry. Gap (NYSE:GPS) is speeding up its rollout of warehouse robots – which aren’t susceptible to disease – after reaching a deal to more than triple its fleet to 106 by the fall. “Each machine handles work typically performed by four people,” said Kevin Kuntz of global logistics fulfillment. “Our robotics systems, they never get tired. They never take breaks.”

\n\nJapan seeks extradition in Ghosn case

\n\nU.S. authorities have arrested former U.S. Army Special Forces soldier, Michael L. Taylor, and his son, who were wanted by Japan on charges that they enabled the escape of former Nissan (OTCPK:NSANY) boss Carlos Ghosn. The cinema-worthy case saw Ghosn, who was charged with financial crimes, sneak onto a private jet in a large box normally used for musical equipment, only to turn up in Lebanon. “While not a party to these extradition proceedings,” Nissan said it “reserves the right to take further legal measures as appropriate.”

\n\nOwner passes $100B private valuation

\n\nAccording to Bloomberg, the valuation of TikTok owner ByteDance (BDNCE) has risen to more than $100B in recent private share transactions, up from $75B during its last funding round two years ago. The sky-high number reflects expectations the company will keep pulling in advertisers despite the coronavirus storm. Some trades recently valued the Chinese company as high as $140B, but the private transactions might not reflect broader investor sentiment.

\n\nWhat else is happening…

\n\nNew Yorkers should expect higher summer electric bills.

\n\nIntel (NASDAQ:INTC) acquires Killer networking company.

\n\nTesla (NASDAQ:TSLA) drops lawsuit against California’s Alameda County.

\n\nRestoring airline confidence with safety measures.

\n\nBankruptcy odds on Hertz (NYSE:HTZ) tilt higher.

\n\nAurora Cannabis (NYSE:ACB) to enter U.S. market with CBD deal.

\n\nWednesday’s Key Earnings<\/B>
\nExpedia (NASDAQ:EXPE) +4.4% AH highlighting cost saving measures.
\nL Brands (NYSE:LB) +0.9% AH despite sales tumbling 37%.
\nLowe’s (NYSE:LOW) +0.1% on home improvement boom.
\nTake-Two Interactive (NASDAQ:TTWO) -5% AH missing EPS estimates.
\nTarget (NYSE:TGT) -2.4% as costs outweighed an online surge.

\n\nToday’s Economic Calendar<\/B>
\n8:30 Initial Jobless Claims
\n8:30 Philly Fed Business Outlook
\n9:45 PMI Composite Flash
\n10:00 Fed’s Williams Speech
\n10:00 Existing Home Sales
\n10:00 Leading Indicators
\n10:30 EIA Natural Gas Inventory
\n1:00 PM Fed\u2019s Clarida: U.S. Economic Outlook and Monetary Policy
\n2:30 PM Jerome Powell: “Fed Listens: How is COVID-19 Affecting your Community?”
\n2:30 PM Fed\u2019s Brainard: “Fed Listens: How is COVID-19 Affecting your Community?”
\n4:30 PM Money Supply
\n4:30 PM Fed Balance Sheet

\n\n————————

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

\n\n The Asian\/Pacific<\/strong> markets leaned to the upside. Japan, South Korea, India, Malaysia and Thailand did well; China and Singapore were weak. Europe, Africa and the Middle East<\/strong> currently lean up but are mostly quiet. Denmark, Russia, Greece, Finland, Norway and the Czech Republic are up. Futures in the States<\/strong> point towards a positive open for the cash market. <\/span>

\n\n—————\nVIDEO: Trade Examples – BC, PS, BLMN, CARG, INO<\/a> <\/span>\n—————<\/span>

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

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

\n\nLast issued in 1986, the Treasury is bringing back the 20-year bond, which will debut in a $20B auction later this afternoon. “That gives us the ability to extend the duration to raise a significant amount of funds… and lock in a significant amount of very low interest rates,” Treasury Secretary Steven Mnuchin said during Congressional testimony on Tuesday. The government’s borrowing needs have jumped dramatically in recent weeks due to pandemic spending, and the national debt now stands at more than $25T, up 15% since a year ago. While there was thought to issue 50-year and 100-year bonds, Mnuchin determined there wasn’t enough demand for those types of securities.

\n\nVolatility warning

\n\n“With most institutional investors believing this is a bear rally, but at risk of being forced to chase the trend if it continues, the risk is of bigger bubbles leading to larger shocks,” according to Bank of America. On that note, U.S. stock index futures are up nearly 1% ahead of the open, after a market drop yesterday that followed a big rally on Monday. Hopes for a coronavirus vaccine have also been seen as attributing to sentiment, with doubts cast on early results from a Moderna (NASDAQ:MRNA) trial. Keep an eye out today for minutes from the FOMC’s last meeting, when it kept rates near zero, as well as retail earnings from Target (NYSE:TGT), Lowe’s (NYSE:LOW) and L Brands (NYSE:LB).

\n\nRetail roundup

\n\nWalmart (NYSE:WMT) logged strong sales for the first quarter, but had higher costs for paying and protecting employees. In fact, Walmart’s e-commerce sales in the U.S. shot up by 74%, and same-store sales grew by 10%, though the company is discontinuing Jet.com and phasing out the brand. Despite a strong outlook, traders bid down Home Depot (NYSE:HD) on what could have be some profit-taking action, while Kohl’s (NYSE:KSS) warned of a “low point” of 2020 as margins took a hit from the coronavirus pandemic.

\n\nReopening America

\n\nAs of today, every state will be somewhere along the road toward a full reopening of the economy. Connecticut will allow residents to dine at a restaurant outdoors or go into a retail shop, becoming the final one to lift shelter-in-place orders and business closures. Also being allowed to reopen are offices, museums, zoos and outdoor recreation – all with social distancing requirements and capacity limits.

\n\nSpotify inks deal with Joe Rogan

\n\nThe Joe Rogan Experience is heading to Spotify (NYSE:SPOT) in an exclusive licensing deal worth more than $100M, sending SPOT shares up 8% on Tuesday. His full podcast library, dating back 11 years, will debut on the service Sept. 1, and will be exclusive to Spotify via a multi-year deal later this year. “We’re going to be working with the same crew doing the exact same show,” Rogan declared. “The only difference will be it will now be available on the largest audio platform in the world.”

\n\nRolls-Royce sheds nearly a fifth of workforce

\n\nHighlighting COVID-19’s toll on the aerospace industry, Britain’s Rolls-Royce (OTCPK:RYCEY) is cutting at least 9,000 jobs from its global staff of 52,000. One of Britain’s best-known industrial names, the company supplies engines for large aircraft like the Boeing 787 (NYSE:BA) and Airbus A350 (OTCPK:EADSY). “This is about adjusting our capacity to meet future demand,” CEO Warren East told BBC Radio, forecasting air travel will not recover for three to five years.

\n\nNasdaq plans to give Luckin the boot

\n\nAlthough Luckin Coffee (NASDAQ:LK) has received a delisting notice from Nasdaq, the stock will begin trading again at 7:00 a.m. ET until that process is complete. Shares were suspended on April 7 due to “fabricated transactions” disclosed by the company and the “past failure to publicly disclose material information.” Recent reports out of China indicate that Luckin is pivoting with its business model, which could be a positive for Starbucks (NASDAQ:SBUX) if there is no consumer backlash against U.S. companies amid some heightened tension.

\n\nBaby powder liabilities

\n\nBesieged by lawsuits, Johnson & Johnson (NYSE:JNJ) is stopping to sell one of its most famous products – baby powder made with talc – across the U.S. and Canada. The claims generally allege that talc can cause inflammation that leads to cancer, with some even pointing to trace amounts of asbestos in the product. The move is part of a broad reassessment of J&J’s consumer product portfolio – prompted by the COVID-19 pandemic – as it faces billions of dollars in compensation from the suits.

\n\nWhat else is happening…

\n\n10 rules to return to the Facebook (NASDAQ:FB) office.

\n\nMicrosoft’s (NASDAQ:MSFT) Azure Quantum attracts new customers.

\n\nCBO sees 38% GDP drop for second quarter.

\n\nTrump orders agencies to cut more regulations.

\n\nVisa (NYSE:V) extends work-from-home policy through 2020.

\n\nAlcohol sales dazzle again, per latest Nielsen data.

\n\nTuesday’s Key Earnings<\/B>
\nHome Depot (HD) -3% despite strong outlook.
\nKohl’s (KSS) -7.7% reworking its brand strategy.
\nUrban Outfitters (NASDAQ:URBN) -4.4% AH on plunging margins.
\nWalmart (WMT) -2.1% warning about pace of recovery.

\n\nToday’s Economic Calendar<\/B>
\n7:00 MBA Mortgage Applications
\n10:00 Quarterly Services Report (Advance)
\n10:30 EIA Petroleum Inventories
\n1:00 PM Results of $20B, 20-Year Bond Auction
\n2:00 PM FOMC minutes

\n\n——————

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

\n\n The Asian\/Pacific<\/strong> markets did very well. Japan, China, Hong Kong, South Korea, Taiwan, Australia, Singapore, Thailand and the Philippines each rallied at least 1%. Europe, Africa and the Middle East<\/strong> are currently mixed. Turkey, South Africa, Norway, Hungary and Saudi Arabia are up; the UK, France, Greece, Spain, Italy and Austria are down. Futures in the States<\/strong> point towards a flat open for the cash market. <\/span>

\n\n—————\nVIDEO: Nasdaq vs NYSE<\/a> <\/span>\n—————<\/span>

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

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

\n\nWhile U.S. consumers didn’t do much shopping in April, considering last Friday’s dreadful retail sales report, investors might soon get a better sense of what lies ahead for the industry. A deluge of retail earnings is on tap this week, starting with results today from Walmart (NYSE:WMT), Home Depot (NYSE:HD) and Kohl’s (NYSE:KSS), and followed by figures at Target (NYSE:TGT), Nordstrom (NYSE:JWN) and Foot Locker (NYSE:FL). Keep an eye on the expenses side of things – not only COVID-19’s influence on sales – as well as online spending, given the recent investments retailers have made in their internet platforms.

\n\nWill the rally continue?

\n\nFutures inched between slight gains and losses overnight following the best day for Wall Street in six weeks as the Dow jumped more than 900 points and the S&P 500 closed up 3.2%. Stocks began climbing as the Fed gave monetary assurances, but really picked up after Moderna (NASDAQ:MRNA) said early human tests of a coronavirus vaccine yielded positive results (see more below). Parts of the U.S. and Europe also eased lockdowns further, including some of the hardest-hit states.

\n\nThe Moderna promise

\n\nShares of the biotech company soared 20% yesterday to $80 on positive data from an early-stage coronavirus vaccine trial. At day 43, or two weeks following the second dose, levels of binding antibodies in the 25 microgram group were at the levels generally seen in blood samples from people who recovered from COVID-19. The stock is now 5% lower in premarket trade as Moderna (MRNA) priced an offering of 17.6M new shares at $76 each, for gross proceeds of $1.34B.

\n\nOn the Hill (virtually)

\n\nThe economic response to the coronavirus pandemic will come under scrutiny today as Fed Chair Jerome Powell and Treasury Secretary Steven Mnuchin testify before the Senate Banking Committee. Senators are expected to grill the two about actions still needed to keep the world’s largest economy afloat and about missteps in rolling out aid so far, like glitches that held up PPP loans and policy changes that saw companies return their funds. In prepared testimony, Powell confirmed the central bank will use its “full range of tools to support the economy” and recapped the steps taken since cutting interest rates to near zero in mid-March.

\n\nJury over Zoom? It’s happening in Texas

\n\nLawyers in Collin County District Court yesterday selected a jury to hear an insurance dispute by videoconference, in what is believed to be the first virtual jury trial to be held nationally during the COVID-19 crisis. “You can’t drag people down to the courthouse and make them sit together for days at a time,” Texas Supreme Court Chief Justice Nathan Hecht declared. “It’s just too dangerous.” It’s yet another boon for Zoom (NASDAQ:ZM), which has seen its stock take off since January. In fact, at a market cap of $49B, Zoom is now worth more than every publicly traded U.S. airline – combined.

\n\nSquare joins Twitter pajama party

\n\nSquare (NYSE:SQ) is following Twitter (NYSE:TWTR) in letting employees work remotely, even after COVID-19 shelter-in-place orders come to an end (Jack Dorsey is the CEO of both companies). “We want employees to be able to work where they feel most creative and productive,” a Square spokesperson said. “Over the past several weeks, we’ve learned a lot about what it takes for people to effectively perform roles outside of an office, and we will continue to learn as we go.”

\n\nDrastic cuts at Uber

\n\nIn an effort to navigate the coronavirus crisis, Uber (NYSE:UBER) said it would lay off 3,000 employees (roughly a quarter of its workforce), close more than three dozen offices and re-evaluate some of its big bets. The cutbacks mean that the ride-hailing giant, which operates food-delivery arm Uber Eats, needs a deal more than ever with rival Grubhub (NYSE:GRUB). Yesterday, SoftBank’s (OTCPK:SFTBY) Vision Fund revealed that it lost $17B in the first quarter of 2020, in part on declines in holdings like Uber.

\n\nDisney streaming chief leaves for TikTok

\n\nKevin Mayer is out at the Mouse House, moving on to become CEO of TikTok, and chief operating officer at the popular app’s parent ByteDance (BDNCE). The move will be seen by many observers as a consolation prize after Disney (NYSE:DIS) selected Bob Chapek to succeed Bob Iger as CEO. As a business development leader at the company, Mayer was also heavily involved with the purchases of Pixar, Marvel Entertainment, Lucasfilm, and most of the Twenty-First Century Fox assets.

\n\nNasdaq takes aim at Chinese IPOs with new rules

\n\nWhile China won’t be called out in the new restrictions, they will undoubtedly make it harder for Chinese companies to debut on Nasdaq’s (NASDAQ:NDAQ) stock exchange. Companies will be required to raise $25M or, alternatively, at least a quarter of their post-listing market capitalization. Nasdaq will also inspect the auditing of small U.S. firms responsible for accounts of Chinese IPO hopefuls and ensure that their international franchises comply with global standards.

\n\nEU coronavirus relief

\n\nIn a sign of unity, France and Germany agreed to support a \u20ac500B aid package to help EU regions and sectors hit hardest by the coronavirus pandemic. The announcement saw the euro climb 0.4% to $1.0955 as Chancellor Angela Merkel said the bonds issued by the European Commission would be repaid from the EU budget (most of which is covered by Germany). “The plan amounts to a historic step by Germany away from its long-held opposition to mutual debt to fund other EU member states,” said analysts at Eurasia group.

\n\nWhat else is happening…

\n\nOnline used car seller Vroom (VRM) files for IPO.

\n\nWWD says Amazon (NASDAQ:AMZN) in talks to acquire J.C. Penney (NYSE:JCP).

\n\nStarbucks (NASDAQ:SBUX) is reopening ‘many stores’ in Japan.

\n\nSony (NYSE:SNE) taking finance unit private for $3.7B.

\n\nPickup in demand? Delta’s (NYSE:DAL) June schedule much busier than May.

\n\nSmileDirectClub (NASDAQ:SDC) sues NBC over “defamatory” report.

\n\nWildfire victims vote for $13.5B PG&E (NYSE:PCG) settlement.

\n\nMonday’s Key Earnings<\/B>
\nBaidu (NASDAQ:BIDU) +8.2% AH as income jumped on milder revenue drop.

\n\nToday’s Economic Calendar<\/B>
\n8:30 Housing Starts
\n8:55 Redbook Chain Store Sales
\n10:00 E-Commerce Retail Sales
\n10:00 Jerome Powell: “The Quarterly CARES Act Report to Congress”
\n2:00 Fed’s Rosengren Speech

\n\n———————–

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

\n\n The Asian\/Pacific<\/strong> markets leaned to the upside. Japan, Hong Kong, South Korea, Australia, Malaysia and Singapore did well; India, Taiwan and the Philippines were weak. Europe, Africa and the Middle East<\/strong> are doing incredibly well. The UK, Poland, France, Germany, Russia, Greece, South Africa, Finland, Hungary, Spain, Netherlands, Portugal, Israel, Austria and Sweden are up 2% or more. Futures in the States<\/strong> point towards a big gap up open for the cash market. <\/span>

\n\n—————\nVIDEO: Nasdaq vs NYSE<\/a> <\/span>\n—————<\/span>

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

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

\n\n“The Fed hasn’t run out of ammunition by a long shot,” Jay Powell said in an interview last night on CBS’s 60 Minutes. “There’s really no limit to what we can do in lending programs.” S&P 500 futures climbed 1.5% on the news, while oil soared 5% to top $30 per barrel for the first time in a couple of months. “Assuming there is not a second wave of the coronavirus, I think you will see the economy recover steadily through the second half of this year,” the Fed Chair added, cautioning that unemployment and GDP may contract further before beginning to stabilize.

\n\nStart your engines

\n\nThe U.S. auto industry, which accounts for about 6% of economic activity, is set to come back online today after being idle for nearly two months. Some carmakers, like General Motors (NYSE:GM), are restarting slowly, only bringing back workers on one shift in factories, while others, like Tesla (NASDAQ:TSLA), are shooting for full production. The reopening will be a closely watched test of whether employees can return to factories in large numbers without a resurgence of infections.

\n\nApple’s reopening plan

\n\n25 Apple (NASDAQ:AAPL) stores in the U.S. will reopen this week, taking its open store tally to nearly 100 outlets worldwide. Customers will be required to submit to a temperature check and wear a mask before entering, and will be screened for other symptoms caused by COVID-19, like a cough. According to the guidelines, occupancy will also be limited as staff focuses on “one-on-one, personalized service.”

\n\n‘Super’ cold war in the making?

\n\nTaiwan Semiconductor (NYSE:TSM), the world’s biggest contract chipmaker, has halted new orders from Huawei Technologies after the U.S. Commerce Department unveiled new restrictions on Friday. Huawei is TSMC’s second-largest client only after Apple (AAPL), accounting for 15-20% of its annual revenue, and was seen as a vital lifeline after Washington placed the Chinese firm on a trade blacklist last May. “The proposed legislation likely aims to stop Huawei’s tech progress and quash China’s 5G ambitions,” Jefferies analysts said in a research note. “We expect China to retaliate if this materializes. The risk of a ‘super’ cold war is mounting.”

\n\nJack Ma is leaving SoftBank’s board

\n\nContinuing to pull back from business roles as he focuses on philanthropy, Jack Ma is resigning from SoftBank’s (OTCPK:SFTBY) board after retiring as Alibaba’s (NYSE:BABA) executive chairman in September. SoftBank will propose three new board appointments in his place, meeting a demand from activist investor Elliott Management, which has pressured the tech investment company to improve board diversity and wants a new subcommittee to oversee the $100B Vision Fund. Portfolio underwater? SoftBank reported an $18B annual loss for the fund after booking mega losses on WeWork (WE) and Uber (NYSE:UBER).

\n\nEvery day matters

\n\nJ.C. Penney (NYSE:JCP) has filed for Chapter 11, ending weeks of speculation on the ways forward for the struggling retailer. The bankruptcy plan includes a proposal to spin some of its property into a real estate investment trust, along with a new operating company, with the intention of listing both on a national securities exchange. J.C. Penney also received court approval for its “first day” motions, including tapping cash on hand, paving the way to continued operations and pay for associates and vendors.

\n\nGrubhub rebuffs latest offer from Uber

\n\nWhile merger discussions between Uber (UBER) and Grubhub (NYSE:GRUB) continued over the weekend, price remained a sticking point, WSJ reports. Uber’s latest offer of 1.9 of its shares for each Grubhub share was deemed too low by CEO Matt Maloney, and while Uber suggested it could go up to 1.925, it was still well below the price Grubhub is seeking. Regulators would also need to sign off on the deal and a number of politicians have already signaled opposition to the combination.

\n\nVaccine optimism

\n\nThe COVID-19 vaccine spotlight is shining on the U.K. today after AstraZeneca (NYSE:AZN) said it aims to make as many as 30M doses available in Britain by September. It also committed to delivering 100M doses in 2020, if the inoculation, which is already being studied in humans and could reach late-stage trials by the middle of the year, is successful. Priority access? The U.K. will be the first country to get the vaccine should everything go smoothly.

\n\nNo poker when Wynn Resorts reopens

\n\nGoing without poker for a while won’t bring a significant dent to Wynn’s (NASDAQ:WYNN) top and bottom lines – the game is one of the least profitable for casinos – but it may hurt when trying to get people back in the door. It also won’t be as easy to play craps. At the company’s Encore Boston Harbor resort, the game will only be allowed in the high-limit area, where crowds are typically smaller. In addition to select temperature checks, casino operators plan to open with every other slot machine closed and will impose limits on how many people can play at a table.

\n\nU.S. expected to revise terms of PPP loans

\n\nChanges are likely to include giving businesses more flexibility to spend the money (under the original terms, 75% of the funds were required to be spent on employee salaries for the loans to be forgiven). The government is also expected to extend the time to spend the loan money beyond the two months it originally set. “When we conceived the program, we thought businesses would be able to get up and running after eight weeks, but we know now that’s not the case,” said Senator Ben Cardin of the small business panel.

\n\nWhat else is happening…

\n\nBrazil surpasses Spain, Italy in COVID-19 cases.

\n\nJapan’s economy slips into recession.

\n\nFiat (NYSE:FCAU) can seek state-backed loan – Italian PM.

\n\nPhased reopening of Disney Springs (NYSE:DIS).

\n\nTrump tweet raises threat for Big Tech.

\n\nAmazon (NASDAQ:AMZN) declines to commit Bezos to testimony in Congress.

\n\nEtsy (NASDAQ:ETSY) bakers fire up the ovens.

\n\nLatest shale casualty in Eagle Ford: Gavilan Resources.

\n\nToday’s Economic Calendar<\/B>
\n10:00 NAHB Housing Market Index

\n\n—————-\n","protected":false},"excerpt":{"rendered":"

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