{"id":14199,"date":"2020-08-03T13:08:07","date_gmt":"2020-08-03T13:08:07","guid":{"rendered":"http:\/\/blog.leavittbrothers.com\/?p=14199"},"modified":"2020-08-07T13:09:49","modified_gmt":"2020-08-07T13:09:49","slug":"before-the-open-aug-3-7-2","status":"publish","type":"post","link":"https:\/\/blog.leavittbrothers.com\/?p=14199","title":{"rendered":"Before the Open (Aug 3-7)"},"content":{"rendered":"\n Good morning. Happy Friday. <\/span>

\n\n The Asian\/Pacific<\/strong> markets closed mostly down. China, Hong Kong, New Zealand and the Philippines dropped more than 1%. Europe, Africa and the Middle East<\/strong> are mixed and little changed. Denmark and the UAE are up more than 1%; Greece, South Africa and Spain are down more than 1%. Futures in the States<\/strong> point towards a down open for the cash market. <\/span>

\n\n—————\nVIDEO:Trade Examples – CHGG, FSLY, CHWY, CRWD, LAUR<\/a> <\/span>\n—————<\/span>

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

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

\n\nTrump has taken aim at China again, signing a pair of executive orders targeting not only TikTok but also widely used WeChat. The action references national security concerns and (starting in 45 days) bars any transactions with the apps’ China-based owners – ByteDance (BDNCE) and Tencent Holdings (OTCPK:TCEHY) – by any person or involving any property subject to the jurisdiction of the U.S. While TikTok said it will pursue all remedies available, including American courts, it also faces a Sept. 15 deadline before its services are banned in the U.S.

\n\nWhat’s the scope?

\n\nIt’s still unknown how far President Trump’s executive action will go, but U.S. Commerce Secretary Wilbur Ross is set to identify transactions covered by the order. Tencent has many prominent investments, including in Snap (NYSE:SNAP), Activision Blizzard (NASDAQ:ATVI) and Spotify (NYSE:SPOT) – via Tencent Music Entertainment (NYSE:TME). Tencent also bought a 5% stake in Tesla (NASDAQ:TSLA) back in 2017, and CEO Elon Musk has called the company an “investor and adviser.” In premarket trade, Tencent ADRs are unchanged (shares tumbled 5% in Hong Kong), while Tencent Music is down 4.1%.

\n\nStimulus impasse

\n\nA three-hour meeting Thursday evening between White House officials and Democratic leaders yielded little progress on a virus relief package, bringing the talks to the brink of collapse. It’s unclear whether the two sides will resume negotiations today, meaning President Trump would likely rely on executive actions. “The one thing the President can do is extend the moratorium and that would be a good thing if there’s money to go with it and that’s what we keep telling them,” House Speaker Nancy Pelosi declared, adding that he “can’t move that much money” without congressional approval.

\n\nJobs report ahead

\n\nWhile the stock market is coming off of five consecutive days of gains, U.S. futures fell 0.5% overnight. Prior to the dip, this week’s gains in the S&P 500 pushed the benchmark just 1.3% below its Feb. 19 record, while the Nasdaq closed above 11,000 for the first time on Thursday. Jobs is another area of focus for investors this morning. Estimates for the non-farm payrolls report are all over the place, with consensus coming in at 1.6M jobs created in July, after a 4.8M increase in June. The U.S. unemployment rate is forecast at 10.5%, from 11.1% last month.

\n\nTariffs

\n\n“Canada was taking advantage of us, as usual,” President Trump announced after imposing tariffs of 10% of Canadian aluminum. “Very unfair to our jobs and our great aluminum workers.” The new tariffs only apply to a certain category of aluminum non-alloyed unwrought aluminum, which refers to unfinished ingots and slabs of aluminum that are then heated and rolled into different products like sheet or shapes of aluminum. The friction comes a little over a month after the implementation of the new USMCA trade agreement and Ottawa said it would retaliate with proportional levies.

\n\nMore executive orders

\n\n“We will bring our pharmaceutical and medical supply chains home – we’re going to bring them home where they belong – and we will end reliance on China,” President Trump said after unveiling an action on domestic drug production. “We’ll be making our product here – safely, beautifully and inexpensively. We’re reasserting American economic independence.” The executive order will help increase production of essential medicines, medical equipment and protective gear in the U.S., according to trade adviser Peter Navarro. “If we’ve learned anything from the China virus pandemic… we are dangerously overdependent on foreign nations.”

\n\nVirtual fans next?

\n\n67 NFL players have opted out of the 2020 season due to the coronavirus pandemic, with athletes only allowed to withdraw if “a close family member gets seriously sick with COVID or if they themselves are newly diagnosed with a high-risk condition.” Team hit the hardest? The New England Patriots. A grand total of eight players will not be playing in the fall, and that is after Tom Brady took his talent to Tampa. At the NCAA level, UConn became the first major college football team to abandon its 2020 season outright, and the prospect of more cancellations could ding U.S. broadcasters like ABC\/ESPN (NYSE:DIS), CBS (NASDAQ:VIAC), NBC (NASDAQ:CMCSA) and Fox (NASDAQ:FOXA).

\n\nWhat else is happening…

\n\nGilead Sciences (NASDAQ:GILD) ups supply of remdesivir 50-fold since January.

\n\nSanders goes after pandemic wealth gains as Biden moves closer on taxes.

\n\nFacebook (NASDAQ:FB) extends remote work policy to summer 2021.

\n\nNYSE owner ICE is buying mortgage software company Ellie Mae for $11B.

\n\nGM (NYSE:GM) looks to recharge Cadillac with Lyriq midsize crossover.

\n\nThursday’s Key Earnings<\/B>
\nDropbox (NASDAQ:DBX) -5.2% AH announcing departure of CFO Ajay Vashee.
\nGroupon (NASDAQ:GRPN) +33.1% AH delivering more than $70M in free cash flow.
\nT-Mobile (NASDAQ:TMUS) +5.6% AH claiming mantle of No. 2 wireless provider.
\nUber (NYSE:UBER) -2.5% AH as revenues cratered, deliveries soared.

\n\nToday’s Economic Calendar<\/B>
\n8:30 Non-farm payrolls
\n10:00 Wholesale Trade
\n1:00 PM Baker-Hughes Rig Count
\n3:00 PM Consumer Credit

\n\n—————-

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

\n\n The Asian\/Pacific<\/strong> markets leaned up. South Korea, India, Taiwan, Malaysia, Indonesia, Singapore and the Philippines did well; Japan, China and Hong Kong were weak. Europe, Africa and the Middle East<\/strong> are weak. The UAE is up, but the UK, France, Turkey, Spain, Italy, Portugal and Austria are down. Futures in the States<\/strong> are flat.<\/span>

\n\n—————\nVIDEO:Trade Examples – CHGG, FSLY, CHWY, CRWD, LAUR<\/a> <\/span>\n—————<\/span>

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

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

\n\nSecretary of State Mike Pompeo has detailed a new five-pronged “Clean Network” effort aimed at curbing potential national security risks, expanding the “5G Clean Path” program. The U.S. wants to see “untrusted Chinese apps” removed from Apple’s (NASDAQ:AAPL) and Google’s (GOOG, GOOGL) app stores, called for companies to limit availability of their apps on phones made by Huawei and urged firms to halt using Chinese cloud providers like Alibaba (NYSE:BABA), Baidu (NASDAQ:BIDU) and Tencent (OTCPK:TCEHY) for storing sensitive data. While the guidance isn’t binding, it signals an escalation of the Trump administrations efforts to limit the spread of Chinese technology after declaring a potential ban on TikTok earlier this week.

\n\nJobless claims

\n\nU.S. stock index futures are hugging the flatline ahead of fresh insights into the health of the labor market, with another 1.423M workers expected to have filed first time claims for weekly unemployment benefits. The data release will follow a positive session on Wednesday as major indexes brushed off a weaker-than-expected ADP private payrolls report, with money shifting into cyclical and value stocks. “Even if the economy goes well, investors will still be asking for the Federal Reserve and the government to have their hands on the market,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

\n\n‘Trillions of dollars apart’

\n\nThe White House and Democrats have not agreed to any “top-line numbers,” according to White House Chief of Staff Mark Meadows, and remain “trillions of dollars apart” on COVID-19 stimulus negotiations. Specifically, the Trump administration has offered $400 per week in enhanced federal unemployment benefits through Dec. 14 (up from $200), but Democrats aren’t backing down from $600 per week. Meadows and Treasury Secretary Steven Mnuchin also put $200B in state and local aid on the table, but that is far less than the $1T Democrats are seeking. Republicans say they are prepared to walk away and rely on executive actions by President Trump if an agreement isn’t within reach by the end of the week.

\n\nExploring negative rates

\n\nU.K. banks hold enough capital to keep on lending and absorb the losses that are likely to arise due to the COVID-19 pandemic, the Bank of England said Thursday, after keeping its key interest rate at just 0.1%. “The MPC will continue to review the appropriateness of a negative policy rate as a policy tool alongside its broader toolkit,” it said. The BOE also maintained its huge bond-buying program, which stands at \u00a3745B (after a \u00a3100B expansion in June), and said it does not expect the U.K. economy to exceed its pre-coronavirus levels until the end of 2021 (the previous forecast detailed the second half of 2021).

\n\nAirline relief

\n\nShares of U.S. airlines are on the rise in premarket trade as bipartisan support builds for an additional $25B in aid to one of the sectors hardest hit by the coronavirus. “We don’t want to lose our airlines. If they’re looking at that, whether they\u2019re Republican or Democrat, I’d be certainly in favor. We can’t lose our transportation system,” President Trump said at a White House press briefing. Congress set aside $25B for U.S. carriers in the $2.2T CARES Act in March on the condition that they wouldn’t cut jobs through Sept. 30. The new proposal would extend those protections through the end of March 2021.

\n\nQuicken Loans IPO

\n\nRocket Companies, the parent company of mortgage lending giant Quicken Loans, has sold 100M shares at $18\/share in its initial public offering, raising about $1.8B. The figures were below initial estimates, which forecast 150M shares would be sold at $20-22. Shares will begin trading on the New York Stock Exchange today under ticker symbol “RKT,” though the weak demand raises questions as to whether the hot tech IPO market, which features DoorDash (DOORD) later this summer, might be cooling.

\n\n‘Coronavirus misinformation’ takedown

\n\nFacebook (NASDAQ:FB) and Twitter (NYSE:TWTR) took action against the account of the Trump campaign and @TeamTrump late Wednesday, removing a post for violating policies around “harmful COVID misinformation.” YouTube (GOOG, GOOGL) also followed suit. The posts were a video clip from a Fox News interview with President Trump about reopening schools, in which he claims children are “almost immune” to COVID-19. The tech giants have faced heat in recent months, with some saying their censorship reach is going too far, while others say they are not policing enough.

\n\nGoldman sounds off on tech again

\n\nRising chances of an approved coronavirus vaccine by the end of November are underpriced by equity markets, wrote Goldman Sachs strategists including Kamakshya Trivedi. The approval could “challenge market assumptions both about cyclicality and about eternally negative real rates,” the team added, saying that such a scenario may support steeper yield curves, traditional cyclicals and banks, and challenge the leadership of technology stocks. Remember, Goldman Sachs called Apple’s (AAPL) stock price “unsustainable” before earnings on June 30 (the stock has risen 15% since the FQ3 report). AAPL’s Quant Rating at Seeking Alpha is Very Bullish.

\n\nWhat else is happening…

\n\nSamsung Galaxy (OTC:SSNLF) event highlights new phones, tablets, folding device.

\n\nBerkshire Hathaway (BRK.A, BRK.B) continues BofA (NYSE:BAC) buying spree.

\n\nUnderwater J.C. Penney (OTCPK:JCPNQ) lenders seek higher bids.

\n\nBezos sells a bit less than 1% of Amazon (NASDAQ:AMZN) stake for $1.42B.

\n\nBlue Apron (NYSE:APRN) falls 16% premarket after pricing 4M equity offering.

\n\nWednesday’s Key Earnings<\/B>
\nCVS Health (NYSE:CVS) -0.9% despite Q2 beat and guidance raise.
\nEtsy (NASDAQ:ETSY) +3% AH hitting all-time highs on strong growth.
\nModerna (NASDAQ:MRNA) -3.4% as rival vaccine makers reported good news.
\nRoku (NASDAQ:ROKU) -4.4% AH logging a 42% revenue burst.
\nTeva Pharmaceutical (NYSE:TEVA) +7.3% continuing a years-long turnaround.

\n\nToday’s Economic Calendar<\/B>
\n7:30 Challenger Job-Cut Report
\n8:30 Initial Jobless Claims
\n10:00 Fed’s Kaplan Speech
\n10:30 EIA Natural Gas Inventory
\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 did well. China, Hong Kong, South Korea, Taiwan, Indonesia, Singapore and the Philippines led while Australia was weak. Europe, Africa and the Middle East<\/strong> are doing well. The UK, Poland, France, Germany, Russia, Greece, South Africa, Hungary, the Netherlands, Israel and Austria are doing well. Futures in the States<\/strong> point towards a positive open for the cash market. <\/span>

\n\n—————\nVIDEO:Trade Examples – CHGG, FSLY, CHWY, CRWD, LAUR<\/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\nThe precious metals rally gathered pace overnight as spot gold rose as much as 0.6% to a record $2,031.14 per ounce, while spot silver advanced as much as 1.3% to $26.3473\/oz. The printers are running… Investors are counting on even more spending in the U.S. to combat the pandemic’s fallout as White House negotiators work “around the clock” to reach a stimulus deal by the end of the week, while markets also latched on to comments from San Francisco Fed President Mary Daly that the U.S. economy will need more support than initially thought. Search for a new reserve currency? Goldman Sachs says gold may climb to $2,300\/oz. and RBC Capital puts the odds of a rally to $3,000\/oz. at 40%.

\n\nRally continues

\n\nU.S. stock index futures are looking to extend gains as traders await progress from Washington on a new coronavirus aid package. “I think the expectation for the market is that we are going to get that stimulus,” Ally Invest’s Lindsay Bell told CNBC. Better-than-expected earnings from Disney (NYSE:DIS) are also helping sentiment (see below), while closely-watched Moderna (NASDAQ:MRNA) will report before the opening bell. On the trade front, reports suggest that U.S. trade representative Robert Lighthizer and Chinese Vice Premier Liu will meet in mid-August to discuss the Phase One trade deal between the U.S. and China.

\n\n100 million streaming subscribers

\n\nWhile Disney (DIS) continued to feel the impact of the COVID-19 pandemic on sectors like its parks business, where revenue tanked 85% from a year earlier, CEO Bob Chapek announced a new streaming service that will launch in fiscal 2021 under the Star brand acquired from Fox (NASDAQ:FOX). In total, Disney now has 100M paid subscribers across its streaming services, which include Disney+, Hulu and ESPN+. Disney+ reached 60.5M paid subscribers, hitting a goal of 60M-90M subscriptions by 2024, four years early.

\n\nWild ride for Novavax

\n\nAt one point in after-hours trading on Tuesday, Novavax (NASDAQ:NVAX) was down 32% after STAT News reported that eight participants in a Phase 1 clinical trial evaluating COVID-19 vaccine candidate NVX-CoV2373 had to be hospitalized. That data was later found to be erroneous and shares are now up 17% premarket (the stock has rallied 3,800% YTD). Novavax’s two-injection regimen when administered with its immune-boosting technology generated antibody responses that were four times higher than those seen in people who had recovered from the disease.

\n\nBeirut blast

\n\nLebanon is eyeing a state of emergency following a massive explosion that rocked Beirut with the force of a 3.5 magnitude earthquake on Tuesday and caused widespread damage across the capital. At least 100 people were killed and more than 4,000 wounded, while local officials linked the blast to some 2,750 tons of confiscated ammonium nitrate that were being stored at a port warehouse for the past six years. It’s been a rough ride for the country’s economy. Lebanon’s GDP fell 6.9% in 2019, while the Lebanese pound has lost over 60% of its value in just the past month, and 80% of its value since October.

\n\nOpioid epidemic

\n\nThe U.S. Department of Justice is demanding OxyContin maker Purdue Pharma pay as much as $18.1B in penalties as part of its bankruptcy reorganization plan, WSJ reports. On the civil side, the DOJ is seeking $2.8B – which could be tripled under the law – for tax dollars spent battling the U.S. opioid epidemic, as well as kickbacks to doctors and pharmacies and transferring cash to hide money from creditors. On the criminal side, federal prosecutors want Purdue to pay a $6.2B fine and the forfeiture of potentially $3.5B more over marketing and distribution that violated criminal statutes including anti-kickback laws, misbranding under the Food, Drug and Cosmetic Act and conspiracy.

\n\nTale of two companies

\n\nSir Richard Branson plans to fly on a Virgin Galactic (NYSE:SPCE) spaceship next year after the company settled on an early 2021 date for its first passenger flight. That assumes both demonstration flights go as planned in the fall and yield the “expected results.” Meanwhile, Virgin Atlantic is seeking Chapter 15 bankruptcy protection in the Southern District of New York as it tries to nail down a \u00a31.2B rescue plan. Under the proposal, Virgin Group will retain its 51% controlling stake in the airline, while partner Delta (NYSE:DAL) will continue to hold the remaining 49%.

\n\nMeet the teenager allegedly behind the Twitter hack

\n\nGraham Ivan Clark, 17, of Tampa, Fla., convinced a Twitter (NYSE:TWTR) employee that he was a co-worker, according to prosecutors, and seized control of a phone number via SIM-swapping. He also set up several fake phishing pages, including one that resembled the company\u2019s Okta login portal, a destination used for securely logging into company systems. Once inside, Clark, who entered a not-guilty plea in court Monday, allegedly gained the ability to bypass Twitter’s security protections, setting the stage for an hourslong hack on July 15 that held hostage the main communications tool of some of the most powerful people on the planet.

\n\nMore misconduct

\n\nOne of the most prominent trade secret cases in recent years has come to a close as Anthony Levandowski was sentenced to 18 months in prison (his incarceration will be delayed until after the COVID-19 pandemic). Levandowski had been a key engineer at Google’s (GOOG, GOOGL) Waymo before starting his own self-driving truck company called Otto. The latter was eventually bought by Uber Technologies (NYSE:UBER), where he became the head of its self-driving unit, but Levandowski eventually pleaded guilty to taking thousands of files from his former employer when he left in 2016.

\n\nWhat else is happening…

\n\nFed is expected to commit to push inflation higher.

\n\nKodak (NYSE:KODK) reportedly under SEC investigation over drug deal disclosure.

\n\nFord (NYSE:F) elevates COO Jim Farley to CEO position.

\n\nBooking Holdings (NASDAQ:BKNG) to lay off 25% of employees in pandemic measure.

\n\nAnother delay for Walmart’s (NYSE:WMT) same-day delivery service.

\n\nEU launches probe into Google’s (GOOG, GOOGL) Fitbit (NYSE:FIT) acquisition.

\n\nTuesday’s Key Earnings<\/B>
\nActivision Blizzard (NASDAQ:ATVI) -1.4% AH despite strong Q2, upbeat guidance.
\nBeyond Meat (NASDAQ:BYND) -9.9% AH weighed down by heavy costs.
\nNikola (NASDAQ:NKLA) -13.4% AH reporting wider loss, light on details.
\nSquare (NYSE:SQ) +9.6% AH posting a 64% jump in revenue.
\nTwilio (NYSE:TWLO) -4.1% AH despite beating expectations.
\nWalt Disney (DIS) +6.1% AH reporting 100M paid streaming subscribers.

\n\nToday’s Economic Calendar<\/B>
\n7:00 MBA Mortgage Applications
\n8:15 ADP Jobs Report
\n8:15 International Trade
\n9:45 PMI Services Index
\n10:00 ISM Non-Manufacturing Index
\n10:30 EIA Petroleum Inventories
\n5:00 PM Fed’s Mester: Economic Outlook

\n\n—————-

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

\n\n The Asian\/Pacific<\/strong> markets did great. Japan, Hong Kong, South Korea, India, Taiwan, Australia, Indonesia and Singapore each rallied more than 1%. Europe, Africa and the Middle East<\/strong> are mixed and little changed. Greece, South Africa, Austria and the Czech Republic are up; Denmark, Turkey, Germany, Switzerland and Sweden are down. Futures in the States<\/strong> point towards a down open for the cash market. <\/span>

\n\n—————\n VIDEO: <\/strong>LeavittBrothers.net Overview<\/a>\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\nReporting a record $6.7B loss overnight as the oil industry struggles, BP (NYSE:BP) halved its dividend to 5.25 cents per share following in the footsteps of rival Royal Dutch Shell (RDS.A, RDS.B). Analysts are still scratching their heads, with the stock up 8.2% premarket, though some are attributing the big move to business segments that are getting overshadowed. BP said it had “an exceptionally strong contribution” from trading (more than $1B for the quarter) and launched a new green strategy. It pledged to increase low-carbon spending to $5B a year by 2030 and boost renewable power generation to 50 gigawatts while shrinking oil and gas output by 40% compared with 2019.

\n\nMore earnings

\n\nDisney (NYSE:DIS) will lead the earnings charge after the market close today, with results also expected from Activision Blizzard (NASDAQ:ATVI), Beyond Meat (NASDAQ:BYND) and Nikola (NASDAQ:NKLA). While the House of Mouse has reopened theme parks in Asia, France and Florida, and inked a deal with the NBA to resume the season at its facilities, the company is not out of the woods yet. It has had to contend with shuttered cruise lines, disrupted production schedules, slashed advertising budgets and indefinitely delayed major theatrical releases. Disney+ promises to be a rare bright spot, but from a revenue perspective, the streaming service is still only a small piece of the sprawling media empire.

\n\nClock is ticking on TikTok

\n\nThe drama surrounding TikTok (BDNCE) prompted Chinese state media to lash out overnight, with the China Daily and Global Times labeling the U.S. a “rogue country” and likening the potential sale to Microsoft (NASDAQ:MSFT) as “open robbery.” President Trump has also come under fire for saying “key money” would have to be paid to the U.S. Treasury for making the deal possible (he previously said TikTok would be banned from Sept. 15). The crackdown has split many in the industry, with some advocating a “whatever it takes” approach in the “technology war,” while others decry the betrayal of values like free speech and capitalism. Remember, services like Google Search (GOOG, GOOGL), YouTube, Facebook (NASDAQ:FB), Instagram, Twitter (NYSE:TWTR) and Snapchat (NYSE:SNAP) are all banned in China, while the U.S. has introduced recent measures to eliminate Chinese IP and trade secret theft.

\n\nFutures dip after tech-powered rally

\n\nStocks began August on the front foot as a basket of positive news sent the major stock averages higher with the Nasdaq Composite notching its 29th record close of the year after topping 11,000. Big Tech dealmaking, an Eli Lilly (NYSE:LLY) antibody trial and strong manufacturing data lifted markets, though U.S. futures fell 0.3% overnight, giving back some of the big gains. Democratic leaders and White House officials are still at odds over a new coronavirus aid package. While the two sides have agreed on another round of stimulus checks, they remain deadlocked on whether to cut a $600-a-week federal jobless supplement.

\n\nGoogle roundup

\n\nTalk about the tech rally… Google (GOOG, GOOGL) announced a long-term partnership with ADT yesterday that sent shares of the latter up 56%. The deal will see the company invest $450M for a 6.6% stake in ADT, with Google hardware and services set to be integrated in ADT’s installation, service and professional monitoring network. In related news, Google parent Alphabet locked in some of the lowest borrowing costs ever for a U.S. company, completing a $10B sale of bonds across six maturities ranging from five to 40 years.

\n\nSpace news

\n\nVirgin Galactic (NYSE:SPCE) inked a non-binding memorandum of understanding with Rolls-Royce (OTCPK:RYCEF) to collaborate in designing and developing engine propulsion technology for supersonic commercial travel. It also unveiled its initial design concept of a high-speed aircraft – that would have capacity for 9 to 19 people at an altitude above 60K feet – before disclosing earnings results and a new 20.5M stock offering that weighed on shares. On Sunday, SpaceX (SPACE) ferried astronauts Doug Hurley and Bob Behnken back from the International Space Station for a landing in the Gulf of Mexico, marking the first splashdown in the last 45 years of NASA travel.

\n\nCovid trends: Cloud surge and retail bankruptcies

\n\nCompanies worldwide spent a record $34.6B on cloud services in Q2, up roughly 11% from the previous quarter and 30% from the same period last year, according to research firm Canalys. Example: Jones Lang LaSalle (NYSE:JLL), one of the world’s largest commercial real estate services firms, has shifted roughly 90% of its employees to remote work due to the coronavirus, representing about 90,000 workers. However, as social distancing and lockdowns become part of the daily vocabulary, other sectors of the economy are not faring as well. 2020 is on track to have the highest number of retail bankruptcies in a decade, according to S&P Global Market Intelligence. Le Tote, owner of Lord & Taylor, and Tailored Brands (NYSE:TLRD), parent company of Men’s Wearhouse, became the latest to join the retail graveyard this past Sunday.

\n\nWhat else is happening…

\n\nWhich is the best ETF for FAAMG momentum?

\n\nTwitter (TWTR) to pay up to $250M over use of personal data.

\n\nFAA proposes four key Boeing (NYSE:BA) 737 MAX design changes.

\n\nMonday’s Key Earnings<\/B>
\nClorox (NYSE:CLX) -1.9% despite mega sales growth, new CEO.
\nRealty Income (NYSE:O) +1% AH collecting 91.5% of July rent.
\nVirgin Galactic (SPCE) -8% on new 20.5M share offering.
\nWilliams Cos. (NYSE:WMB) +0.9% AH as total costs dropped 24%.

\n\nToday’s Economic Calendar<\/B>
\nAuto Sales
\n8:55 Redbook Chain Store Sales
\n10:00 Factory Orders

\n\n—————-

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

\n\n The Asian\/Pacific<\/strong> markets closed mostly down. Japan and China did well, but India, Taiwan, Malaysia, Indonesia, Singapore, Thailand and the Philippines were weak. Europe, Africa and the Middle East<\/strong> are currently doing great. The UK, Denmark, Poland, France, Germany, Russia, South Africa, Finland, Switzerland, Norway, the Netherlands, Portugal, Austria, Sweden and the Czech Republic are up 1% or more. Futures in the States<\/strong> point towards a moderate open for the cash market. <\/span>

\n\n—————\nVIDEO:My Favorite Stock Market Scan<\/a> <\/span>\n—————<\/span>

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

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

\n\nMicrosoft is committed to trying to buy TikTok’s U.S. operations, after CEO Satya Nadella discussed a potential deal during a phone call on Sunday with President Trump. Microsoft (NASDAQ:MSFT) said in a blog post that it will move quickly to pursue discussions with TikTok parent ByteDance (BDNCE), aiming to complete negotiations by Sept. 15. “Microsoft fully appreciates the importance of addressing the President\u2019s concerns,” the company said. “It is committed to acquiring TikTok subject to a complete security review and providing proper economic benefits to the United States, including the United States Treasury.” The company’s aim is to build on TikTok’s popular user experience with adding privacy and security protections. The proposed transaction has gained the blessing of top Trump administration officials, including Treasury Secretary Mnuchin, as well as several Republican lawmakers, after the president’s Friday night comments that he preferred a TikTok ban in the U.S. instead of a sale took all sides by surprise.

\n\nAll eyes on U.S. payroll data

\n\nThe U.S. July employment report, to be released this Friday, will have a binary flavor to it. If the jobs situation is consistent with economists’ views, it should give investors more confidence in the economy’s health while weak data will weigh on investors’ near-term enthusiasm. Current consensus is a rise of 1.65M jobs, albeit a bearish drop of ~27% from last Thursday’s projection of 2.25M. Congress is trying to cobble together another stimulus package but, unsurprisingly, Republicans and Democrats are at loggerheads over the specifics.

\n\nMLB draws strong TV ratings in opening week

\n\nDespite concerns over a truncated 60-game season and empty seats in stadiums, Major League Baseball’s opening week has been a resounding success. Games aired nationally during opening weekend (July 23-26) drew more than twice as many viewers as a year ago. Walt Disney’s (NYSE:DIS) ESPN said that its first 12 broadcasted games averaged ~1.2M viewers, up 34% compared to last year. Fox Sports (NASDAQ:FOX) also enjoyed a double-digit rise in ratings. According to Michael Mulvihill, Fox Sports head of strategy and analytics, the strong start reflects pent-up demand and little competition from other major U.S. sports. The season, though, is facing its first stern test after 18 members of the Miami Marlins tested positive for COVID-19 leading to the cancellations of certain games by several clubs. 17 games have been postponed to date.

\n\nFed to “relax” approach to managing inflation target

\n\nThe Fed is preparing to abandon its long-held practice of raising interest rates to preempt overheating in the economy, citing persistently low U.S. inflation. Chairman Jerome Powell hinted at the shift in a news conference last week when he disclosed that the central bank would soon complete a comprehensive review of its policy-making strategy. The change is unlikely to alter much since interest rates are barely above zero and are expected to remain low for the foreseeable future. Longer term, central bankers, economists and investors expect rates to return to a more normal 4% or so once the economic recovery\/expansion has matured.

\n\nTrump readies action against Chinese software firms

\n\nDuring an interview yesterday on Fox News’ Sunday Morning Futures, Secretary of State Mike Pompeo said that President Trump will announce new action this week against Chinese software companies that he perceives are threats to national security, including TikTok and WeChat that, he says, are “feeding data directly to the Chinese Communist Party.” In a separate interview, Treasury Secretary Steve Mnuchin declared that “we are not keeping TikTok in its current form.” The expected actions will be the latest salvo in the deterioration in U.S.\/Sino relations.

\n\nApple sued in China over voice assistant patent

\n\nShanghai Zhizhen Network Technology Company, known as Xiao-i, has filed a lawsuit in a Shanghai court against Apple (NASDAQ:AAPL) claiming infringement on a patent covering a voice assistant similar to Siri. The company seeks 10B yuan ($1.43B) in damages and, if successful, could prevent the tech giant from selling many of its products in China. In late June, China’s Supreme Court ruled that Xiao-i owns the patent which ended a process that involved several trials since 2012. It is the third time in less than a decade that Apple has faced trademark and patent challenges in its #2 market (behind the U.S.). The company has yet to comment on the matter.

\n\nU.S. COVID-19 pandemic in new “widespread” phase

\n\nAccording to White House coronavirus task force coordinator Dr. Deborah Birx, the pandemic is in a “new phase” that is different from the March\/April period with “extraordinarily widespread” cases in both urban and rural areas. Reemphasizing the essential role of wearing masks and distancing, Dr. Birx said, “To everybody who lives in a rural area, you are not immune or protected from this virus and that is why we keep saying, no matter where you live in America, you need to wear a mask and socially distance, do the personal hygiene pieces.” She also says super-spreading events are the main concern, not super-spreading individuals. Per Johns Hopkins case tracker, U.S. infections are now over 4.6M with over 154K deaths.

\n\nGOP and Dems tussle over fourth round of U.S. stimulus

\n\nTalks between Republican and Democratic leaders over the specifics of the latest round, the fourth, of economic stimulus are proceeding down the familiar contentious path. Both sides agree on sending $1,200 checks to most Americans but the GOP is apparently balking at a boost to unemployment insurance which was set at $600 per week but recently lapsed. Democrats want to preserve the $600 amount while Republicans want to cut it to $200 due to cost concerns. House Speaker Nancy Pelosi is accusing President Trump of standing in the way of a deal. On Face the Nation yesterday, Chief of Staff Mark Meadows said, “I’m not optimistic that there will be a solution in the very near term.”

\n\n7-Eleven to acquire Speedway for $21B in cash

\n\nSeven & i Holdings (OTCPK:SVNDF) indirect subsidiary 7-Eleven has agreed to acquire Speedway from certain subsidiaries of Marathon Petroleum (NYSE:MPC) for $21B in cash. The Enon, Ohio-based chain operates ~3900 convenience stores in 36 U.S. states. The transaction, which includes a 15-year fuel supply agreement for about 7.7B gallons per year, should close in Q1 2021.

\n\nChina’s Caixin manufacturing PMI hits nine-plus year high

\n\nThe Caixin China manufacturing purchasing managers index hit its highest point since 2011, lending more credence to inklings of a recovery there. China’s official PMI rose to its own four-month high last week, and it’s got a bigger sample, focused on larger state-owned companies. Caixin focuses on smaller manufacturers, and it hit 52.8, the third straight month it was over 50, signaling expansion.

\n\nRio Tinto sues Australia’s Monadelphous over 2019 fire

\n\nRio Tinto (NYSE:RIO) has sued Monadelphous Engineering Associates (OTCPK:MOPHY) over a fire at Rio’s Western Australia iron ore processing facility last year. Monadelphous says Rio is claiming MEA breached terms of a contract, and that Rio is seeking A$493M (about $351M) tied to its inability to process iron ore at the plant during repairs.

\n\nWhat else is happening…

\n\nSiemens Healthineers (OTC:SEMHF) merges with Varian Medical Systems (NYSE:VAR) in $16B deal.

\n\nSpaceX (SPACE) and NASA splashdown breaks 45-year drought.

\n\nBlackstone (NYSE:BX), TPG rejigger REIT debt to sidestep margin calls.

\n\nIran stock market hits record high despite sanctions and battered economy.

\n\nToday’s Economic Calendar<\/B>
\n9:45 PMI Manufacturing Index
\n10:00 ISM Manufacturing Index
\n10:00 Construction Spending

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

Good morning. Happy Friday. The Asian\/Pacific markets closed mostly down. China, Hong Kong, New Zealand and the Philippines dropped more than 1%. Europe, Africa and the Middle East are mixed and little changed. Denmark and the UAE are up more than 1%; Greece, South Africa and Spain are down more than 1%. 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\/14199"}],"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=14199"}],"version-history":[{"count":6,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/posts\/14199\/revisions"}],"predecessor-version":[{"id":14209,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/posts\/14199\/revisions\/14209"}],"wp:attachment":[{"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14199"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14199"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14199"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}