{"id":14357,"date":"2020-10-19T13:01:38","date_gmt":"2020-10-19T13:01:38","guid":{"rendered":"http:\/\/blog.leavittbrothers.com\/?p=14357"},"modified":"2020-10-23T13:03:34","modified_gmt":"2020-10-23T13:03:34","slug":"before-the-open-oct-19-23","status":"publish","type":"post","link":"https:\/\/blog.leavittbrothers.com\/?p=14357","title":{"rendered":"Before the Open (Oct 19 – 23)"},"content":{"rendered":"\n Good morning. Happy Friday.<\/span>

\n\n The Asian\/Pacific<\/strong> markets were mixed. Hong Kong, New Zealand and the Philippines did well; China was weak. Europe, Africa and the Middle East<\/strong> are currently doing very well. The UK, France, Germany, South Africa, Norway, Spain, Italy and Austria are up 1% or more. Futures in the States<\/strong> point towards a positive open for the cash market. <\/span>

\n\n—————\n List of Indexes and ETFs – <\/strong> here<\/a>\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\nEmployees or contractors?

\n\nUber (NYSE:UBER) and Lyft (NASDAQ:LYFT) must classify their drivers in California as employees, according to a state appeals court ruling that threatens to upend their business models. The order makes the two even more dependent on Proposition 22, a ballot initiative set for Nov. 3 that would supersede any court rulings. It has so far raised more than $189M from the companies, along with DoorDash (DOORD), Postmates (POSTM) and Instacart (ICART), making it the most expensive proposition in California’s history. Should it pass, the companies say they will guarantee new protections to workers, but should it fail, they would likely explore other appeals options, like sending the case to the California Supreme Court.

\n\nStimulus deal remains elusive

\n\nIt’s been quite a choppy trading week on Wall Street, and the trend didn’t stop overnight, with U.S. stock index futures inching into the green after spending the first half of session in the red. While House Speaker Nancy Pelosi said progress on a stimulus deal was “just about there,” White House economic adviser Larry Kudlow cautioned “significant policy differences” remained, which were unlikely to be resolved before the election. On the economy, the latest weekly initial jobless claims dropped 55,000 to fall below 800,000 for first time since March, while about a fifth of S&P 500 companies have so far reported Q3 results, of which 84.1% beat earnings estimates.

\n\nFinal debate

\n\nIn a relatively civil debate following a turbulent first faceoff, President Trump and former Vice President Joe Biden traded some barbs last night over the economy. Trump said Biden would “destroy the oil industry” after the latter talked up plans about a “transition to renewable energy over time,” as well as ending federal subsidies to the sector. Regarding coronavirus shutdowns… Trump declared, “we can’t keep this country closed… the cure cannot be worse than the problem itself,” while Biden replied, “I’m going to shut down the virus, not the country,” though he didn’t rule out additional shutdowns. The two also differed on minimum wage, with Trump stating it should be left up to states and Biden saying it deserves to be $15 an hour on a federal level (from the current $7.25).

\n\nAll clear for remdesivir

\n\nShares of Gilead Sciences (NASDAQ:GILD) are up nearly 6% in premarket trade after its antiviral therapy remdesivir became the first drug to obtain formal FDA clearance for treating COVID-19. That could help solidify its position as the go-to medicine for patients even when other drugs begin to reach the market. In May, the FDA granted remdesivir, sold under the brand name Veklury, emergency use authorization, allowing hospitals and doctors to use the medication even though it had not been formally approved by the agency.

\n\nOpioid crisis

\n\nLaunching a preemptive strike against an impending opioid-related lawsuit from the Justice Department, Walmart (NYSE:WMT) is suing the federal government regarding the obligations of pharmacists under the Controlled Substances Act. “They are now threatening a completely unjustified lawsuit against Walmart, claiming in hindsight pharmacists should have refused to fill otherwise valid opioid prescriptions that were written by the very doctors that the federal government still approves to write prescriptions,” Walmart said in the filing. While the suit won’t necessarily head off any DOJ action, a court ruling siding with the company’s view of the law could bolster it against any government case.

\n\nNext antitrust suit against Silicon Valley

\n\nThe Federal Trade Commission is “huddling privately” to discuss its antitrust probe of Facebook (NASDAQ:FB), according to The Washington Post, signaling its investigation has moved closer to an endgame. While the exact timing of any action is unclear, a federal suit would follow closely on the Justice Department’s landmark antitrust suit against Google (GOOG, GOOGL). As with Google, the focus is on competition, and specifically Facebook’s dominance in social networking along with its purchases of Instagram and WhatsApp.

\n\nGoldman pleads guilty

\n\nAdding to fines and settlements in Hong Kong and Malaysia, Goldman Sachs (NYSE:GS) will pay a record $2.9B foreign bribery penalty in the U.S. and plead guilty for its involvement in the scandal-plagued 1MDB investment fund. That brings the global cost for the bank to more than $5B. Those hefty fines are also leading Goldman to claw back some executive compensation from current and former executives, including CEO David Solomon and his predecessor, Lloyd Blankfein.

\n\nU.K. signs first post-Brexit trade deal

\n\nAs the clock ticks down to reach an agreement with the European Union, the U.K. has signed a trade deal with Japan, its first with a major economy since Brexit. The bilateral deal largely preserves the terms under which the U.K. traded with Tokyo when it was part of the EU, but is expected to boost British trade by \u00a315B and GDP by 0.07% over the next 15 years. It will also make it easier for British companies to operate in Japan, with tariff-free trade on 99% of exports to the country, and benefit “all parts of the country and Scotland, London and the East Midlands in particular.”

\n\nWhat else is happening…

\n\nWhy Intel’s (NASDAQ:INTC) horrible quarter could boost Apple (NASDAQ:AAPL), Dell (NYSE:DELL) and HP (NYSE:HPQ).

\n\nGap (NYSE:GPS) shares hit 52-week high after charting course to profitability.

\n\nAirbus (OTCPK:EADSY) plans to ramp up A320 output in show of confidence.

\n\nPalantir (NYSE:PLTR) helps the U.S. government with COVID-19 vaccine tracking.

\n\nIBM (NYSE:IBM), Pfizer (NYSE:PFE) design AI model that can predict Alzheimer’s.

\n\nWirecard North America (OTCPK:WCAGY) sells itself to Syncapay.

\n\nThursday’s Key Earnings<\/B>
\nAmerican Airlines (NASDAQ:AAL) +3.1% seeing improvements in passenger demand.
\nAT&T (NYSE:T) +5.8% surprising with strong Q3 wireless, broadband net adds.
\nCoca-Cola (NYSE:KO) striking higher margins despite pandemic pressures.
\nDow Inc. (NYSE:DOW) +0.6% as demand picked up from pandemic lows.
\nFreeport-McMoRan (NYSE:FCX) +3.6% lifted by gold prices, copper volumes.
\nIntel (INTC) -9.4% AH as Q3 data center sales fell 7%.
\nKimberly-Clark (NYSE:KMB) -6.9% posting mixed results.
\nMattel (NASDAQ:MAT) +6.1% AH on a big quarter for Barbie sales.
\nSirius XM (NASDAQ:SIRI) +2.2% raising full-year subscriber, financial outlook.
\nSouthwest Airlines (NYSE:LUV) +5.3% showing improvement on cash flow, profitability.
\nUnion Pacific (NYSE:UNP) -6.2% despite notching a record operating ratio.
\nValero Energy (NYSE:VLO) +1.8% posting a smaller-than-forecast Q3 loss.

\n\nToday’s Economic Calendar<\/B>
\n9:45 PMI Composite Flash
\n1:00 PM Baker-Hughes Rig Count

\n\n—————-

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

\n\n The Asian\/Pacific<\/strong> markets closed mixed and without many big movers. The Philippines did well; Japan and South Korea were weak. Europe, Africa and the Middle East<\/strong> currently lean down. Poland and Russia are up, but Turkey, Greece, South Africa, Norway, the Netherlands, Belgium and Austria are doing well. Futures in the States<\/strong> point towards a slight down open for the cash market. <\/span>

\n\n—————\nJoin our email list<\/a> – get technical research reports sent directly to you.<\/strong>\n—————<\/span>

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

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

\n\nNever-ending stimulus talks

\n\nWhile stimulus negotiations between House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin continue today, U.S. stock futures fell 0.3% overnight amid increasing talk of a vote after the election. On the economic calendar, initial jobless claims are likely to fall to 860K for the week ended Oct. 17, down from 898K in the prior week, but still well above the pre-pandemic record of 695K. Earnings season is also heating up, with Q3 results expected from AT&T (NYSE:T), Coca Cola (NYSE:KO), Intel (NASDAQ:INTC), American Airlines (NASDAQ:AAL) and Southwest (NYSE:LUV). Don’t forget the last presidential debate. Investors will be on the lookout for possible surprises tonight as President Trump locks horns with Democratic nominee Joe Biden at 9 p.m. ET.

\n\n500,000

\n\nTesla (NASDAQ:TSLA) stuck to its delivery target of a half a million vehicles this year, calling Model Y and Shanghai production key factors in hitting the mark. Shares rose 3.3% AH to $436\/share on the forecast, after receiving a boost from the EV maker’s fifth consecutive quarterly profit. CEO Elon Musk also gave additional details on the full self-driving [FSD] beta rollout, production ramp and the company’s future robotaxi system.

\n\nCrypto confidence

\n\nIn competition with Square’s (NYSE:SQ) service that allows users to buy and hold Bitcoin (BTC-USD), PayPal (NASDAQ:PYPL) has introduced a new service that enables customers to buy, hold, and sell cryptocurrency directly from their PayPal account. In addition, PayPal signaled plans to increase crypto’s utility by making it available as a funding source for purchases at its 26M merchants. PayPal closed 5.5% higher following the announcement yesterday, while Bitcoin recorded similar gains. It’s now trading at $12,800, the highest level in over two months.

\n\nVaccine trials resume

\n\nNews yesterday about the death of a volunteer in AstraZeneca’s (NASDAQ:AZN) COVID-19 vaccine trial in Brazil sent the pharma giant’s shares lower, though organizers suggested that the deceased man did not end up receiving the vaccine. On that note, U.S. trials of vaccines made by AstraZeneca and Johnson & Johnson (NYSE:JNJ) are expected to restart as soon as this week, according to Operation Warp Speed chief Moncef Slaoui. Temporary pauses in vaccine studies are not uncommon, especially given the size and speed of the trials.

\n\nOpioid settlement

\n\nPrivately held Purdue Pharma, the corporate poster child of the opioid epidemic, has agreed to pay $8.3B to settle federal probes of how it marketed pain pill OxyContin. The figure is largely symbolic, since the company’s assets are valued well below that amount, but members of the billionaire Sackler family will make an immediate $225M payment to the government, while the company will pay another $250M after the bankruptcy is concluded. According to court records, the remaining amount owed by Purdue will be counted toward the company’s payout to its creditors.

\n\nJony Ive is designing the future of Airbnb

\n\nLaying off about a quarter of its workforce earlier this year after getting hammered by the coronavirus pandemic, Airbnb (AIRB) is looking to bring some fresh talent on board. Silicon Valley icon Jony Ive, the longtime head of design at Apple (he left in 2019, after 27 years), will be collaborating with the company on a multi-year deal “to design the next generation of Airbnb products and services.” The deal comes ahead of an Airbnb IPO, which is expected before year’s end, and will likely be one of the biggest public debuts of 2020.

\n\nMcAfee goes public again

\n\nThe cybersecurity giant marks its return to Wall Street this morning at a time when demand is strong for protective software due to the remote work\/study trends brought on by the COVID-19 pandemic. McAfee was a public company before Intel (INTC) bought it for $7.7B in 2011, and then later sold a majority stake in it to private equity firm TPG. McAfee, which will begin trading on the Nasdaq under ticker “MCFE,” has priced its IPO at $20\/share, raising $740M at a valuation of $8.6B.

\n\nFacebook Dating comes to Europe

\n\nFacebook (NASDAQ:FB) is finally launching its dating service in 32 European countries after an earlier Valentine’s Day debut was put on ice due to privacy concerns under GDPR rules. Since launching in the U.S. in September last year, as well as 20 other countries, Facebook Dating claims that the platform has generated 1.5B matches. It’s also completely free to use, with no premium offering, unlike other dating services such as Tinder and Hinge (NASDAQ:MTCH), Bumble (NYSE:BX) and Happn.

\n\nThat didn’t take long

\n\nThe U.K. and EU are restarting talks over a post-Brexit trade deal, less than a week after Boris Johnson suspended the discussions. A speech by EU Brexit negotiator Michel Barnier was credited for breaking the impasse, in which the EU had to “accept once again that it was dealing with an independent and sovereign country and that any agreement would need to be consistent with that status.” “Intensive talks” will kick off today, with the goal of reaching an agreement by mid-November.

\n\nWhat else is happening…

\n\nAnt Group (NYSE:BABA) gets final green light for world’s largest IPO.

\n\nGoldman cuts Peloton (NASDAQ:PTON) over holiday hiccups, stays bullish on the long term.

\n\nGM’s Cruise seeks approval for self-driving vehicles without pedal, steering wheel.

\n\nBoeing (NYSE:BA) gauging interest in new mid-market plane – WSJ.

\n\nExxon (NYSE:XOM) nearing job cuts, CEO Woods says in email to employees.

\n\nUyghur risk seen disrupting solar value chain – Roth Capital.

\n\nWednesday’s Key Earnings<\/B>
\nAbbott Laboratories (NYSE:ABT) -2.2% with diagnostics up 38% on COVID-19 demand.
\nBiogen (NASDAQ:BIIB) +0.7% topping estimates, trimming outlook.
\nChipotle (NYSE:CMG) -3.4% AH disappointing with lack of guidance.
\nKinder Morgan (NYSE:KMI) +0.3% AH swinging to a Q3 profit.
\nLas Vegas Sands
(NYSE:LVS) +4% AH expressing optimism for a complete recovery.
\nTesla (TSLA) +3.3% AH knocking out five straight quarters of profit.
\nVerizon (NYSE:VZ) -0.9% despite strong wireless results, boosting guidance.

\n\nToday’s Economic Calendar<\/B>
\n8:30 Initial Jobless Claims
\n10:00 Existing Home Sales
\n10:00 Leading Indicators
\n10:30 EIA Natural Gas Inventory
\n11:00 Kansas City Fed Mfg Survey
\n1:10 PM Fed’s Daly Speech
\n1:10 PM Fed’s Barkin Speech
\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 Thursday.<\/span>

\n\n The Asian\/Pacific<\/strong> markets leaned up. Japan, Hong Kong, South Korea, Thailand and the Philippines did well; China and Malaysia were weak. Europe, Africa and the Middle East<\/strong> are currently mostly down. The UK, Poland, France, Germany, Norway, Spain, Italy, Austria and the Czech Republic are posting the biggest losses. Futures in the States<\/strong> point towards a flat open for the cash market. <\/span>

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

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

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

\n\nCan Tesla hit 2020 delivery target?

\n\nAll eyes will be on Tesla’s (TSLA) Q3 results this afternoon after the electric carmaker reported record vehicle deliveries earlier this month. Despite a global pandemic and economic upheaval, Elon Musk has stuck to a forecast of delivering half a million vehicles in 2020 and his latest commentary will be of particular note. While several analysts believe the goal is attainable, it would mean Tesla must deliver more than 181,600 vehicles in Q4, a 30% increase from record Q3 deliveries.

\n\nGood news, bad news

\n\nSnap (NYSE:SNAP) soared 24% AH on record Q3 revenues that crushed estimates (+52% to $679M), while attracting the highest-ever number of advertisers to its platform. That’s due in part to the summer boycott against Facebook (NASDAQ:FB), which saw advertisers take their money elsewhere due to the social network’s stance on hate speech. Meanwhile, the pandemic subscription boom faded for Netflix (NASDAQ:NFLX), which only added a little over 2M subscribers last quarter (vs. 16M in Q1 and 10M in Q2). Shares fell 5.4%, as the company said additions in 2021 would be down compared to this year if the world recovered from the COVID pandemic.

\n\nAwaiting stimulus developments

\n\nU.S. stock index futures are hugging the flatline with traders in wait-and-see mode as coronavirus aid negotiations continue to drag along. Citing progress in talks, White House Chief of Staff Mark Meadows said the administration’s offer is now $1.88T, while House Speaker Nancy Pelosi is pushing for $2.2T along with a number of requirements for how the money should be deployed. The biggest differences center around state and local government aid and liability protections for businesses, but an agreement must be reached by the end of the week in order to have legislation ready before Election Day.

\n\nGoogle hit with antitrust suit

\n\nWhile the U.S. Department of Justice and 11 states filed an antitrust suit against Google (GOOG, GOOGL) on Tuesday, shares of the tech giant closed higher, due to the case’s narrower scope and the latter pledging to fight back. It’s still being called the highest profile antitrust case by the U.S. government since it took on Microsoft (NASDAQ:MSFT) in the 1990s, which resulted in the company agreeing to share computing interfaces (though it was not broken up). At the heart of the current lawsuit is Google’s search business and allegations that the tech giant uses deals with distributors to make sure its search engine is the default for U.S. customers.

\n\nConcerns about Nvidia’s Arm deal

\n\nChinese technology companies including Huawei have expressed strong concerns to local regulators about Nvidia’s (NASDAQ:NVDA) proposed acquisition of Arm (OTCPK:SFTBY), Bloomberg reports, potentially jeopardizing the $40B semiconductor deal. One of the chief concerns is that Nvidia may force Arm to cut off Chinese clients, becoming yet another pawn in a U.S.-Chinese struggle for tech supremacy. Nvidia and Arm have said they’re confident they’ll get sign-offs from China, the U.K., the EU and the U.S., but it may take as long as 18 months to secure the necessary approvals. NVDA -1.4% premarket.

\n\nShots fired in fintech space

\n\nPlaying catch up in the business merchant sector, JPMorgan (NYSE:JPM) is rolling out a checking account paired with QuickAccept, pushing into an area pioneered by Square (NYSE:SQ) and PayPal (NASDAQ:PYPL). The service lets businesses take card payments through a mobile app or contactless card reader, while users will see sales hit their Chase accounts on the same day. The company will soon migrate “a large portion” of its more than 3M small business customers to the new service, according to Jen Roberts, CEO of the Chase business banking unit.

\n\nHigh hopes for the holidays

\n\nJ.C. Penney (OTCPK:JCPNQ) expects to exit Chapter 11 ahead of the holiday season after taking another step toward a sale to U.S. mall owners. Brookfield Property Partners (NASDAQ:BPY) and Simon Property Group (NYSE:SPG) would own and operate its retail assets, while 160 of its real estate properties and its distribution centers will become part of a separate holding company owned by a group of its lenders. J.C. Penney has filed a draft asset purchase agreement, which gets it closer to a deal, but it is still subject to court approval and other conditions (a hearing is set for early November).

\n\nDisney denounces California’s reopening plans

\n\nWalt Disney (NYSE:DIS) is blasting California’s new protocols for reopening theme parks, saying the strict guidance would complicate the company’s efforts to reopen Disneyland (which has been shut for seven months). Parks can only operate under Tier 4 (yellow) restrictions – limiting capacity to 25%, a reservation will be required and no day of sales. Disneyland Resort President Ken Potrock also pointed to the company’s record in reopening theme parks in Florida, Asia and Europe, as well as what he called inconsistent standards for different California businesses.

\n\nHummer EV sport utility truck

\n\nThe latest edition of GM’s (NYSE:GM) plan to shift to “electric and autonomous vehicles through 2025” is the GMC Hummer EV sport utility truck, which will become available next fall at a starting price of $112,595. Specs: Zero to 60 mph in 3 seconds, and estimated best-in-class 1,000 horsepower and 11,500 lb.-ft. of torque, fast charging of up to 100 miles of range in 10 minutes and more than 350 miles of range on a full charge. The Hummer will hit the road alongside significantly cheaper models from rivals, like Ford’s (NYSE:F) electric F-150, Tesla’s (NASDAQ:TSLA) Cybertruck and pickups from four startup companies.

\n\nWhat else is happening…

\n\nPound jumps as EU says Brexit trade deal still ‘within reach.’

\n\nPapa John’s (NASDAQ:PZZA) founder lays out bearish view on the company.

\n\nCathay Pacific (OTCPK:CPCAY) to cut 24% of its workforce, shut regional airline.

\n\nOne-hour grocery pickup goes nationwide at Whole Foods (NASDAQ:AMZN).

\n\nBloomberg held talks to take media empire public via Ackman SPAC (NYSE:PSTH) – NYP.

\n\nApollo (NYSE:APO) board panel to review Black’s ties with Epstein – WSJ.

\n\nLilly (NYSE:LLY) taps outside advisor for problems at COVID drug plant.

\n\nTuesday’s Key Earnings<\/B>
\nLockheed Martin (NYSE:LMT) -3% as 2021 sales outlook lagged expectations.
\nNetflix (NFLX) -5.7% AH posting slowing subscriber growth numbers.
\nPhilip Morris (NYSE:PM) -5.8% amid slipping tobacco shipment unit volumes.
\nProcter & Gamble (NYSE:PG) +0.4% reporting a 9% rise in organic sales.
\nSnap (SNAP) +24% AH as advertisers lifted platform spending.
\nTexas Instruments (NASDAQ:TXN) +2.3% AH with upside guidance driven by auto rebound.
\nTravelers (NYSE:TRV) +5.6% benefiting from underwriting gains.

\n\nToday’s Economic Calendar<\/B>
\n7:00 MBA Mortgage Applications
\n8:50 Fed’s Brainard: Economic and Monetary Policy Outlook
\n10:00 Fed’s Mester: U.S. Monetary Policy
\n10:30 EIA Petroleum Inventories
\n12:00 PM Fed’s Daly Speech
\n12:00 PM Fed’s Kashkari Speech
\n12:00 PM Fed’s Kaplan: \u201cThe Current State of the Economy\u201d
\n1:00 PM Fed’s Barkin: \u201cRural Virginia\u2019s Economic Recovery\u201d
\n1:00 PM Results of $22B, 20-Year Bond Auction
\n2:00 PM Fed’s Beige Book

\n\n—————-

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

\n\n The Asian\/Pacific<\/strong> markets were split. China, South Korea, New Zealand and the Philippines did well; Japan, Australia, Malaysia, India and Singapore were weak. Europe, Africa and the Middle East<\/strong> are currently little changed. Greece and Spain are up; Germany and the UAE are down. Futures in the States<\/strong> point towards a positive open for the cash market. <\/span>

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

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

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

\n\nGap narrows on stimulus

\n\nHouse Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin appear to be making progress in their latest coronavirus stimulus talks. The pair “continued to narrow their differences,” according to a spokesman for Pelosi, who “hopes that, by the end of the day Tuesday, we will have clarity on whether we will be able to pass a bill before the election.” U.S. stock index futures climbed around 0.6% overnight following the announcement, after suffering a broad decline during Monday’s session. On the earnings front today, reports will be headlined by Procter & Gamble (NYSE:PG), Snap (NYSE:SNAP) and Netflix (NASDAQ:NFLX).

\n\nModerna not far behind Pfizer vaccine timeline

\n\nThe U.S. could authorize emergency use of Moderna’s (NASDAQ:MRNA) experimental COVID-19 vaccine in December, according to CEO St\u00e9phane Bancel, if the company gets positive interim results in November from a large clinical trial. The comments suggest Moderna’s timetable isn’t that far off from Pfizer’s (NYSE:PFE), which said last week it expects to seek U.S. authorization of emergency use of its vaccine by late November. The latest news comes as two other leading COVID-19 vaccines, from Johnson & Johnson (NYSE:JNJ) and AstraZeneca (NASDAQ:AZN), have been paused as the companies investigate illnesses among study subjects.

\n\nLatest Q3 reports

\n\nShares of IBM (NYSE:IBM) slipped nearly 3% after the bell on Monday, as the company reported Q3 revenues that fell 3% Y\/Y to $17.56B. While the figure matched consensus estimates, it marked the third straight quarter of revenue declines for Big Blue. Investors are also anxiously awaiting earnings from Netflix (NFLX), which will report this afternoon. Will the ongoing coronavirus pandemic affect membership? How will the number compare to the weak subscriber guidance the company issued in July?

\n\nUBS kicks off European bank earnings

\n\nShares of UBS (NYSE:UBS) are powering ahead, 5.5% higher in premarket trade, as the bank posted a 99% jump in Q3 net profit to $2.1B (vs. $1.56B consensus). Investment banking saw earnings more than triple thanks to a spike in trading performance and asset management saw profits grow six times from a year ago. “Our third quarter results continue to demonstrate that our strategy is differentiating us,” said CEO Sergio Ermotti, who will be replaced in November by former ING boss Ralph Hamers. “UBS has all the options open to write another successful chapter of its history under Ralph’s leadership.”

\n\nConoco-Concho combo

\n\nConocoPhillips (NYSE:COP) has announced a $9.7B deal to acquire Permian specialist Concho Resources (NYSE:CXO), in a gamble that will see the combined company produce 1.5M barrels per day, or a tenth of daily U.S. output. While it may seem like an odd time to go big on U.S. shale, considering how oil has done this year, it could make for a good time to pick up assets as the coronavirus pandemic depresses prices. The wave of consolidation doesn’t stop there. Pioneer Natural Resources (NYSE:PXD) is in talks to buy Parsley Energy (NYSE:PE), just a few weeks after Devon Energy (NYSE:DVN) snapped up WPX Energy (NYSE:WPX) for $2.6B.

\n\nIntel takes big step away from memory

\nShedding another non-core business to fix its chip technology woes, Intel (NASDAQ:INTC) has agreed to sell its NAND memory unit to SK Hynix (OTC:HXSCF) for $9B. Intel already pared down its involvement in memory manufacturing in January when it sold its share of a joint venture with Micron (NASDAQ:MU) amid increasing market pressures and production struggles. With Intel shares down about 10% over the past six months, the U.S. chip giant intends to invest the proceeds from its latest deal in fast-growing areas like artificial intelligence and 5G networking.

\n\nMoney continues pouring into Hong Kong

\n\nChina’s top ride-hailing firm, Didi Chuxing (DIDI), has begun exploring a 2021 IPO in Hong Kong after rethinking previous aims to list in New York, according to Reuters. Reasons? Deteriorating U.S.-China relations, stricter audit requirements from U.S. regulators, as well as uninspiring stock performances by rivals Uber (NYSE:UBER) and Lyft (NASDAQ:LYFT). Didi, backed by SoftBank (OTCPK:SFTBY), Alibaba (NYSE:BABA) and Tencent (OTCPK:TCEHY), began the IPO talks with investment banks after it began generating a profit during the second quarter of the year. It’s also considering a new fundraising round to boost its valuation to more than $60B.

\n\n$5B price tag for 1MDB scandal

\n\nGoldman Sachs (NYSE:GS) has reached a long-awaited pact with the U.S. Justice Department to pay more than $2B for its role in Malaysia’s 1MDB scandal, and the deal may be announced within days, Bloomberg reports. It follows an agreement in July to settle a related probe with Malaysia, in which the bank promised to pay $2.5B (and slashed its Q2 results to reflect the charges). In all, Goldman may pay roughly $5B once accords with Malaysia, the DOJ and other agencies are tallied together (Malaysia dropped criminal charges against the company in early September).

\n\nWhat else is happening…

\n\nGM (NYSE:GM) set to announce expanded electric vehicle production.

\n\nWeWork (WE) sees profitability in 2021, positive cash flow a year later.

\n\nHuawei, ZTE (OTCPK:ZTCOF) banned from upcoming Swedish 5G networks.

\n\nTech giants have too much streaming distribution power – AT&T (NYSE:T).

\n\nMonday’s Key Earnings<\/B>
\nIBM (IBM) -2.7% AH reporting third consecutive revenue decline.
\nHalliburton (NYSE:HAL) -0.7% on mixed results, pointing to a drilling bottom.

\n\nToday’s Economic Calendar<\/B>
\n8:30 Housing Starts and Permits
\n8:55 Redbook Chain Store Sales
\n10:50 Fed’s Quarles: “Financial Stability Board Agenda”
\n1:00 PM Fed’s Evans: U.S. Monetary Policy
\n3:00 PM Fed’s Brainard: “Community Reinvestment Act”
\n5:00 PM Fed’s Bostic Speech

\n\n—————-

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

\n\n The Asian\/Pacific<\/strong> markets did well. Japan, Hong Kong, India, Taiwan, Australia, Malaysia, Indonesia and the Philippines led while China and Thailand lagged. Europe, Africa and the Middle East<\/strong> are currently mostly unchanged. Turkey, Hungary, Israel and the Czech Republic are up. Futures in the States<\/strong> point towards a moderate gap up open for the cash market. <\/span>

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

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

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

\n\nThe biggest listing ever

\n\nChina’s largest payments company is gearing up for a dual listing in Hong Kong and Shanghai in what could become the world’s biggest IPO on record. Ant Financial has already obtained clearance for the mainland portion of the deal from Shanghai’s STAR Market (pending approval from the China Securities Regulatory Commission), but secured CSRC approval overnight for the Hong Kong leg (pending approval from the Hong Kong stock exchange). Ant, backed by Chinese e-commerce major Alibaba (NYSE:BABA), could raise about $35B through the concurrent IPOs – at a valuation of at least $280B – surpassing Saudi Aramco’s (ARMCO) $29.4B record set last December.

\n\nRetail investors offered 20x leverage

\n\nCompany insiders reportedly want Ant Financial to complete its IPO before the U.S. presidential election on Nov. 3, to avoid running into ensuing choppy financial markets. Its bankers must also grapple with any potential delays stemming from a debate in Washington over restrictions on the payments giant, in discussions that also surround China’s Tencent (OTCPK:TCEHY). The potential speed bumps aren’t breaking the confidence of Hong Kong stockbrokers, however, which see the blockbuster IPO going so smoothly that they’re offering mom-and-pop investors to buy the stock with as much as 20 times leverage.

\n\nStimulus optimism

\n\nAn increasing coronavirus case count appears to be coming alongside increasing chances of fiscal stimulus, as U.S. stock index futures start the week with an advance of 1%. President Trump said on Sunday he wanted a “bigger” stimulus package than even House Speaker Nancy Pelosi (who gave a Tuesday deadline for talks), and suggested he “could quickly convince” Republicans to get on board. On the earnings front, Halliburton (NYSE:HAL) and IBM (NYSE:IBM) today will kick off a busy week for earnings, while Fed Chair Jerome Powell is scheduled to speak at the IMF’s annual meeting on digital currencies.

\n\nCan post-Brexit trade talks be rescued?

\n\nIt’s time to prepare for a “no-deal” Brexit, U.K. Prime Minister Boris Johnson said Friday, though senior cabinet minister Michael Gove struck a more conciliatory tone on Sunday, saying the door was “still ajar” if the bloc was willing to compromise. Game of chicken? EU diplomats and officials have cast Johnson’s move as little more than rhetoric, portraying it as a frantic bid to secure concessions before a last-minute deal is done. Meanwhile, British officials are reportedly preparing to water down Johnson’s controversial Internal Market Bill after the EU took legal action over the proposed legislation.

\n\nTougher coronavirus restrictions

\n\nWith COVID-19 cases surging in much of Europe, governments continue to impose greater measures aimed at curbing a second wave. Switzerland announced mask mandates and banned large-scale public gatherings, while Belgium tightened restrictions and curfews, with its health minister warning of a “coronavirus tsunami.” Elsewhere, Italy approved fresh anti-coronavirus controls, Ireland was set to approve its tightest measures since April, and tougher U.K. lockdowns are likely coming to Wales and Manchester.

\n\nChinese GDP misses estimates

\n\nThe Shanghai Composite closed the session down 0.7% following third-quarter GDP data that missed estimates, up 4.9% versus 5.5% growth forecast by analysts. Despite the headline disappointment, Chinese data for the month of September alone came in better than expected. Unemployment fell to 5.4%, industrial output grew 6.9% Y\/Y, while retail sales grew 3.3% amid a broader upturn in consumption.

\n\nExport control law

\n\nThe National People’s Congress, China’s top legislative body, passed an Export Control Law on Saturday, which will go into effect on December 1. According to the rule, China may take countermeasures against any country or region that abuses export-control measures and poses a threat to national security and interests. It also adds to Beijing’s regulatory arsenal, which already includes a tech export restriction catalog and an unreliable entity list, amid growing competition with the U.S. over access to technology.

\n\nBig Tech scrutiny

\n\nJapan will partner with the U.S. and Europe to take on any market abuses by the four Big Tech companies – Google (GOOG, GOOGL), Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN) and Facebook (NASDAQ:FB). That’s according to Kazuyuki Furuya, the new chairman of the Fair Trade Commission, Japan’s antitrust watchdog. “This is an area I will push through aggressively,” he added, calling out Google’s $2.1B bid to acquire Fitbit (NYSE:FIT), a move aimed at taking on Apple and Samsung (OTC:SSNLF) in the wearable market.

\n\nLabeling plant-based meat and dairy

\n\nThe EU is set to vote tomorrow on the labeling of products like “veggie burger” and “veggie sausage,” as well as “yogurt-style” and “cheese-like” for plant-based alternatives to dairy products. Farming and meat lobbyists say the terms mislead people and amount to a “cultural hijacking” of the meat industry, while major food companies, including Unilever (NYSE:UL) and Nestle (OTCPK:NSRGY), say the claims are ridiculous and contradict the bloc’s drive to help consumers choose more sustainable food. If passed, implementation of the proposals would then be negotiated with the member state governments in the European council, with a final decision potentially coming before the end of the year.

\n\nWhat else is happening…

\n\nNASA selects Nokia (NYSE:NOK) to build first ever cellular network on the moon.

\n\nBattling COVID and flu, CVS (NYSE:CVS) looks to hire another 15,000 employees.

\n\nAmerican Airlines (NASDAQ:AAL) plans to bring back Boeing (NYSE:BA) 737 MAX by year-end.

\n\nPolitical ad spending passes record $6.7B, a boon for local TV.

\n\nApple (AAPL) forecast to see 15% iPhone growth next fiscal year.

\n\nToday’s Economic Calendar<\/B>
\n8:00 Powell: \u201cCross-Border Payments and Digital Currencies\u201d
\n10:00 NAHB Housing Market Index
\n11:45 Fed’s Clarida: U.S. Economic Outlook and Monetary Policy

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

Good morning. Happy Friday. The Asian\/Pacific markets were mixed. Hong Kong, New Zealand and the Philippines did well; China was weak. Europe, Africa and the Middle East are currently doing very well. The UK, France, Germany, South Africa, Norway, Spain, Italy and Austria are up 1% or more. Futures in the States point towards a […]<\/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\/14357"}],"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=14357"}],"version-history":[{"count":6,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/posts\/14357\/revisions"}],"predecessor-version":[{"id":14368,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/posts\/14357\/revisions\/14368"}],"wp:attachment":[{"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14357"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14357"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14357"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}