Barrons weekend summary

Barrons weekend summary: Cover on new arms race with China that could benefit defense contractors; Positive feature on AMZN, GOOGL and MSFT; Positive feature on IR and LII 

Cover story: China’s development of a new weapon called a hypersonic missile could render current defense systems obsolete, drive a new arms race, and keep money flowing for military contractors such as LMT, NOC, and RTN. 

Features: 1) Positive on AMZN, GOOGL, MSFT: Top software and Internet companies could become defense-sector players because they spend vast amounts of money on research, much of which is relevant to the Department of Defense; 2) Neuroscientists and behavioral economists say erasing hard-wired biases isn’t possible; many institutional investment firms are hiring coaches to them better understand how emotions affect investing; 3) Donald Trump says that stocks will go down if Democrats are elected in the midterms, but if the market is forward-looking, why hasn’t a crash already happened?; 4) A broad selloff in the housing market has left a few stocks looking like bargains, and the HVAC sector can still deliver upside despite housing concerns; IR and LII look poised for a rally. 

Tech Trader: Cautious on IBM: Company’s acquisition of RHT has been met with mixed reviews, and is “not a game changer for anybody but IBM,” which lags AMZN, MSFT, BABA, and GOOGL in the cloud; IBM is touting the deal as a path to a new “hybrid cloud,” but there’s no industry consensus about what that is. 

Trader: “The fact the market sold off so abruptly on Friday is just one more reason for investors to use rallies as opportunities to sell, rather than buy”; With interest rates certain to go higher, investors need to focus on companies that won’t feel the pinch from higher borrowing costs; Positive on REZI: The HON spinoff gives investors exposure to the Internet of Things, and even if it doesn’t live up to its potential, is appears to be trading at a discount to its fundamentals. 

Interview: Jim Callinan, manager of the Osterweis Emerging Opportunity fund, looks for company management teams who “stretch goals” and then deliver on them. 

Profile: Adam Weigold, manager of the Eaton Vance Municipal Opportunities fund, has a team of 16 analysts who carry out deep credit analysis to find undiscovered gems; they’re currently looking for possible takeover candidates in the municipal hospital sector. 

Follow-Up: GE’s move to cut its dividend is not a good sign for shareholders, and while buyback programs are easily adjusted with little fallout from investors, that’s less true with dividends. 

European Trader: Positive on RIO, Glencore, Anglo American: With copper prices down, investors have an opportunity to buy shares of mining giants with generous dividends, but their long-term prospects will depend on how the global transition to electric vehicles plays out. 

Emerging Markets: Mexican president-elect Andres Manuel Lopez Obrador’s decision to abandon construction of a $13B airport outside Mexico City spooked investors, who may have oversold the country based on that single policy decision. 

Commodities: “The oil market has had nearly six months to assess the possible effect of U.S. sanctions on Iranian oil exports,” but the prospect of significantly tighter global supplies has resulted in lower prices. 

Streetwise: The basic problem with so-called ESG investing is that there is no standard legal definition, leading various funds to approach it in their own way, and it has yet to produce demonstrable proof of its efficacy on long-term shareholder returns.

Barrons weekend summary

Barrons weekend summary: Cover story looks at investing in China; positive features on BAC, HOME 

Cover story: China is trying to eliminate its shadow banking system and move from an export-oriented economy to a consumer-oriented one, a task made more difficult amid rising U.S. interest rates and a strong dollar; policy missteps could lead to a repeat of 2015 and 2016, when China contributed to a $5T market rout; Is it time to invest more in China? Barron’s says “the answer is a resounding maybe.” 

Features: 1) Third-quarter earnings for S&P 500 companies are on track to rise 22.5%, yet investors have given companies virtually no credit for outperforming Wall Street expectations; 2) Positive on BAC: Bank is a standout among its peers, with a strong earnings outlook, a leading consumer franchise, a lucrative wealth-management platform, modest international exposure, strong expense controls, and aggressive buybacks; 3) Positive on HOME: Upstart retailer with a purely bricks-and-mortar strategy could be worth a look for investors after a recent selloff, which has created an opportunity to “get in on the bottom floor of a compelling growth story”; 4) There is little sign of an economic recession on the horizon, which is good for stocks, but ongoing Fed interest-rate hikes may create uncertainty; 5) Investors could initially ignore the U.S.-China trade war because it hadn’t hit corporate profits—but that is beginning to change, and companies are spelling out tariff impacts on earnings calls. 

Tech Trader: Earnings from semiconductors may hold more keys to where the market is going than earnings from tech giants like TSLA, AMZN, and GOOGL; “Veteran traders who correctly anticipated the chip weakness now see the dynamic as a red flag for the stock market and the economy.” 

Trader: Despite recent market turmoil, “it may not be the end of the world—or at least not the end of the bull market”; “Whether the easing of buybacks will continue is difficult to predict, but it’s interesting that such heretofore bullish activity has slowed considerably just when the stock market has had a nasty downturn”; Positive on ST: For long-term investors, the stock’s recent slump could provide a relatively inexpensive point to buy into a business whose products will be increasingly in use. 

Profile: Tyler Rosenlicht, co-manager the Cohen & Steers MLP & Energy Opportunity fund, says the industry is in the midst of a “tectonic shift” that includes a major reshaping of the North American energy infrastructure. 

Interview: Howard Marks of OAK, known for his ability to look beyond daily market shifts, talks about the recent market upheaval, and says almost every boom is marked by too much optimism, not enough risk aversion, and too much money. 

European Trader: Positive on BP, Royal Dutch Shell, Eni, Total: “Favorable valuations, a change in investor outlook, and a surge in oil prices could lift the stocks of major European oil producers.” 

Emerging Markets: Investors are more likely to see the recent run-up in Turkish stocks as a short-term bounce rather than the dawn of a sustained rally. 

Commodities: The first yearly decline in copper prices since 2015 has prompted investors to raise questions about other global markets, and many are expressing economic concerns. 

Streetwise: Despite talk of lower drug prices among politicians, investors appear to be betting that a divided Congress will maintain the status quo, making some healthcare stocks worth considering.-

Market correction continues while central banks stay the course and midterm election approaches

TradeTheNews.com Weekly Market Update: Market correction continues while central banks stay the course and midterm election approaches
Fri, 26 Oct 2018 16:07 PM EST

Investors continued to pull money away from global stock markets this week and by Friday the S&P 500 followed the Russel 2000, Transports and the NASDAQ by officially touching correction territory. The VIX popped back above 25 and gold futures caught a bid back towards the highs of the summer after stock indices broke through Oct 11th lows bringing the April and February nadirs back into play. Markets gyrated with several dead cat bounces and volumes staying elevated, fueled by a deluge of Q3 earnings reports. Investors continued to punish corporations for missing or even merely meeting Q3 expectations, while often looking past overly robust reports and instead focusing on the headwinds building for 2019 performance. The looming midterm election lingered in back of many investors’ minds and probably curtailed their will to step in and buy the dip. Risk-off flows pressured the 10-year yield resulting in it filling the post Powell “far from neutral” gap going back to October 3rd. Crude oil prices remained heavy, hovering right around the 200-day moving average. For the week, the S&P500 lost 4%, the DJIA fell 3%, and the Nasdaq shed 3.8%.

A host of Fed speakers stuck to their rhetorical guns despite signs of softness in US housing data and corporate commentary about the macro environment that was viewed by many as substantially less rosy than current Fed projections. The ECB met and left rates and purchase targets unchanged as expected. Draghi did acknowledge recent weakness in EU data, but noted there was not enough evidence yet to adjust the ECB forecast. Italy and the EU continued to butt heads over the 2019 budget and that along with little to no progress on the Brexit front remained a major source of uncertainty for markets. Friday saw the Yuan fixing at its lowest level since 2017 despite Chinese officials coming out in force to state they would not engage in competitive devaluation. The Yuan weakness and officials’ comments came in the wake of a fresh report indicating the Trump administration has no intention of restarting trade talks until China makes concrete proposals to address forced technology transfers and other economic concerns.

In corporate news this week, industrials were weighed upon by 3M missing estimates and cutting its outlook, and by Caterpillar using a tax benefit to prop up its guidance, as well as ongoing tariff-related headwinds dampening enthusiasm for the sector. McDonald’s shares rose after it reported Q3 same-store sales topped expectations, and though the guest count dropped in the US, it grew in most top international markets. Tesla stock got a jump start after the automaker moved up its earnings report and then surprisingly turned its first quarterly profit and forecast improving production rates ahead. In a difficult stock market environment, Microsoft shares held steady after another strong earnings report highlighted by double-digit growth from many of its core offerings, such as Office, LinkedIn and its gaming unit. Amazon slid after missing top-line estimates and sandbagging Q4 guidance, while Google also fell on a slight revenue miss.


MON 10/22
941.HK Reports 9M (CNY) Net 95B v 92.1B y/y, EBITDA 214.1B v 211.3B y/y, Rev 567.7B v 569.5B y/y
BAYN.DE San Francisco judge in 'Roundup' case Ramos Bolanos ruled the $250M in punitive damages awarded by jury must be cut to match the ~$39.3M in compensatory damages - US financial press

TUES 10/23
TXN Reports Q3 $1.58 v $1.53e, Rev $4.26B v $4.30Be; Guides Q4 $1.14-1.34 (adj) v $1.38e, Rev $3.6-3.9B v $4.0Be
(US) Fed's Bostic (dove, voter): unless data surprises to the downside, Fed should maintain gradual rate increases at least a few more times; Fed still a few rate hikes away from neutral
*(US) OCT RICHMOND FED MANUFACTURING INDEX: 15 V 24E
(IT) EU Commission gives its formal response to Italy's 2019 fiscal plan: Country needs to resubmit its budget
MCD Reports Q3 $2.10 v $1.98e, Rev $5.37B v $5.25Be
(UK) EU may offer PM May a UK-wide Customs Union arrangement to break the Brexit deadlock over the Irish border but would require a separate treaty - Irish Press
CAT Reports Q3 $2.86 v $2.83e, Rev $13.5B v $13.2Be; Affirms FY18 $11.00-12.00**(now includes $0.35 tax benefit) v $11.65e
MMM Reports Q3 $2.58 v $2.70e, Rev $8.15B v $8.42Be
(UK) Reportedly the 48 Letter threshold has not been reached yet to trigger UK Conservative leadership contest - press
*(ID) INDONESIA CENTRAL BANK (BI) LEAVES 7-DAY REVERSE REPO RATE AT 5.75%; AS EXPECTED

WEDS 10/24
DBK.DE Reports Q3 Net €229M v €647M y/y, Pretax €506M v €933M y/y, Rev €6.2B v €6.3Be
HEIA.NL Reports Q3 Organic Beer volume +4.6% v +4.3%e
*(FR) FRANCE OCT BUSINESS CONFIDENCE: 104 V 106E
*(FR) FRANCE OCT PRELIMINARY MANUFACTURING PMI: 51.2 V 52.4E (25th month of expansion but lowest since Sept 2016)
*(DE) GERMANY OCT PRELIMINARY MANUFACTURING PMI: 52.3 V 53.4E (46th month of expansion and lowest since May 2015)
*(SE) SWEDEN CENTRAL BANK (RIKSBANK) LEAVES REPO RATE UNCHANGED AT -0.50%; AS EXPECTE; maintains guidance on rates
*(EU) EURO ZONE OCT PRELIMINARY MANUFACTURING PMI: 52.1 V 53.0E (63rd month of expansion)
UPS Reports Q3 $1.82 v $1.82e, Rev $17.4B v $17.4Be
BA Reports Q3 $3.58 v $3.45e, Rev $25.1B v $23.7Be; Raises FY18 EPS $14.90-15.10 v $14.58e, Rev $98-100B v $98.7Be
(US) OCT PRELIMINARY MARKIT MANUFACTURING PMI: 55.9 V 55.3E (5-month high)
(CA) BANK OF CANADA (BOC) RAISES INTEREST RATE BY 25BPS TO 1.75%; AS EXPECTED; removes gradual language
(US) SEPT NEW HOME SALES: 553K V 625KE
*(US) DOE CRUDE: +6.3M V +2.5ME; GASOLINE: -4.8M V -1.5ME; DISTILLATE: -2.3M V -1.5ME
(US) Association of American Railroads weekly rail traffic report for week ending Oct 20th: 555.1K, +0.5% y/y
*(US) FEDERAL RESERVE BEIGE BOOK: WAGE GROWTH MOSTLY CHARACTERIZED AS MODEST OR MODERATE
MSFT Reports Q1 $1.14 v $0.96e, Rev $29.1B v $27.7Be
V Reports Q4 $1.21 v $1.20e, Rev $5.40B v $5.44Be
TSLA Reports Q3 +$2.90 v -$0.53e, Rev $6.82B v $5.67Be
F Reports Q3 $0.29 v $0.29e, Rev $34.7B v $32.1Be
(CN) Bank in multiple China cities including Beijing, Guangzhou, Hangzhou, and Foshan have all cut mortgage lending rates, the first coordinated move since 2017 - Chinese press

THURS 10/25
UBSG.CH Reports Q3 (CHF) Net 1.25B v 962.3Me, Pretax 1.73B v 1.53Be, Rev 7.28B v 7.15B y/y
NOKIA.FI Reports Q3 -€0.02 v +€0.05e, adj Op €487M v €515.8Me, Rev €5.46B v €5.43Be
ABI.BE Reports Q3 $0.82 v $0.86e, Rev $13.3B v $13.7Be
066570.KR Reports Final Q3 (KRW) Net 497.1B v 377.1Be, Op Profit 748.8B v 746Be, Rev 15.4T v 15.4Te
(NO) NORWAY CENTRAL BANK (NORGES) LEAVES DEPOSIT RATES UNCHANGED AT 0.75%; AS EXPECTED
(DE) GERMANY OCT IFO BUSINESS CLIMATE: 102.8 V 103.2E; CURRENT ASSESSMENT: 105.9 V 106.0E
MRK Reports Q3 $1.19 v $1.16e, Rev $10.8B v $10.9Be; Raises Quarterly dividend 14.6% to $0.55 from $0.48 (indicated yield 3.12%); Authorizes additional $10B share repurchase
*(TR) TURKEY CENTRAL BANK (CBRT) LEAVES ONE-WEEK REPO RATE UNCHANGED AT 24.00%; AS EXPECTED
*(EU) ECB LEAVES 7-DAY MAIN REFINANCING RATE UNCHANGED AT 0.00%; AS EXPECTED; affirms policy guidance
*(US) SEPT PRELIMINARY DURABLE GOODS ORDERS: +0.8% V -1.5%E; DURABLES EX TRANSPORTATION: 0.1% V 0.4%E
(EU) ECB's Draghi: reiterates forward guidance; to have reinvestments for a prolonged period after APP ends - Prepared remarks
(EU) ECB's Draghi: General Council discussed the balance of risks; weaker momentum (not a downturn) was acknowledged - Q&A
*(US) SEPT PENDING HOME SALES M/M: 0.5% V 0.0%E; Y/Y: -3.4% V -2.6%E
(US) Fed Vice Chair Clarida: Some further rate hikes are warranted; Possible trend growth has shifted higher and structural unemployment moved lower; Signals on inflation 'Not flashing red' (first comments since joining the Fed in Sept)
(US) HHS releases International Pricing Index (IPI) drug payment model; under plan, some drugs would shift to levels closer to prices in other countries
AMZN Reports Q3 $5.75 v $3.29e, Rev $57B v $57.1Be; Guides Q4 Rev $66.5-72.5B v $73.9Be
GOOGL Reports Q3 $13.06 v $10.54e, Rev $27.1B (ex $6.6B TAC) v $27.3Be
USD/CNY *(CN) CHINA PBOC SET YUAN REFERENCE RATE: 6.9510 V 6.9409 PRIOR (first fix above 6.95 since Jan 4 2017)

FRI 10/26
BAS.DE Reports Q3 Adj Net €1.20B v €1.16Be, Adj EBIT €1.47B v €1.55Be, Rev €15.6B v €15.0Be
RBS.UK Reports Q3 Net £563M v £606M y/y, adj Op £961M v £871M y/y, Rev £3.64B v £3.3Be
*(RU) RUSSIA CENTRAL BANK (CBR) LEAVES KEY 1-WEEK AUCTION RATE UNCHANGED AT 7.50%
*(US) Q3 ADVANCE GDP ANNUALIZED Q/Q: 3.5% V 3.3%E; PERSONAL CONSUMPTION: 4.0% V 3.3%E
*(US) Q3 ADVANCE GDP PRICE INDEX: 1.7% V 2.1%E; CORE PCE Q/Q: 1.6% V 1.8%E
*(US) OCT FINAL UNIVERSITY OF MICHIGAN CONFIDENCE: 98.6 V 99.0E
(US) Authorities reportedly have arrested a man in Florida in connection to the explosive packages case - CNN
(US) New York Fed Nowcast: Raises Q3 GDP forecast to 2.2% from 2.1% prior; raises Q4 forecast to 2.5% from 2.4% prior

Barrons weekend update

Barrons weekend update: cover positive on Emerging Markets; positive feature on CFG; cautious on Chinese internet names 

Cover story: Emerging markets have had a bad year, but recent problems obscure their long-term attraction; 83% of the world’s population, of which half are members of the middle class, reside in them; With emerging market stocks trading at steep discounts to U.S. equities, now is the time for investors to start bargain hunting. 

Features: 1) Cautious on BABA, Tencent Holdings, BIDU: Members of Barron’s Asia Roundtable discuss the Chinese Internet giants, which face problems but still offer benefits for investors; 2) Barron’s Big Money Poll found that American money managers seem confident the bull market will continue into next year, with 56% bullish on U.S. equities through next June, little changed from the spring survey’s 55%; 3) Positive on BAC, JPM, USB, WFC, JPC, FFC, PFF: Investors seeking yield should be looking at preferred stocks, where yields on many issues have risen a half-percentage point or more in the past month as investors sell off Treasuries; 4) Dallas-based Centurion American Development Group came up with an innovation in municipal finance through the sale of tax increment financing revenues, but the move has raised a number of questions; 5) Positive on CFG: The Providence, Rhode Island-based regional bank has one of the hottest lending niches in the world: It is the exclusive financing partner for iPhones bought directly from AAPL; 6) Story looks at four issues that must be addressed if the U.K. and EU are to avoid a calamity from a so-called hard Brexit: contracts, clearing houses, data, and immigration. 

Tech Trader: Barron’s created a FAANG risk score card, ranking FB, AMZN, AAPL, NFLX, and GOOGL on nine issues of importance to analysts, the press, or politicians during the past year; Facebook and Alphabet have the highest scores, followed by Amazon, Apple, and Netflix. 

Trader: Positive on UAA: Investors should take a look at the sports apparel company as a contrarian bet before its margins improve and Wall Street becomes confident about its turnaround plans; Positive on VTR: The real estate investment trust owns more than 1,200 properties, many of which focus on seniors, positioning it to benefit as baby boomers finally start to retire. 

Interview: Former Federal Reserve chairman Alan Greenspan says the economy doesn’t look so great, and could get worse because of the ballooning deficit and the rising cost of entitlement programs. 

Follow-Up: Positive on STZ: Under new chief Bill Newlands, the company will remain committed to the alcohol business, but also focus on the global cannabis market—and he sees continued growth in premium beers and alcohol-free beverages spiked with marijuana. 

International Trader: It’s a good time to bet on British stocks—the “economy is strong, stocks are inexpensive relative to those in the U.S., and when the Brexit drama passes, the pound sterling should rise.” 

Emerging Markets: Donald Trump is wreaking short-term havoc on China’s stock markets, though he probably won’t succeed in stemming the country’s long-term economic rise. 

Commodities: With a number of recent global events clouding the outlook for gasoline prices, there’s a possibility that American consumers won’t see the usual post-summer decline in prices at the pump. 

Streetwise: “The Khashoggi case is a reminder to Saudi Arabia’s business partners that they are in bed with an absolute monarchy that has a medieval view of human rights. The question now is whether these partners need to do more than just dodge the spotlight of a single conference.”

S&P Holds, Small Caps and NASDAQ Not Out of the Woods Yet as Q3 Earnings Season Kicks Off

TradeTheNews.com Weekly Market Update: S&P Holds, Small Caps and NASDAQ Not Out of the Woods Yet as Q3 Earnings Season Kicks Off
Fri, 19 Oct 2018 16:09 PM EST

Stock markets opened the week in a precarious state, but a big rally on Tuesday calmed concerns for some, at least temporarily. Volatility and significant price swings resumed along with relentless selling pressure in China’s stock market. US small caps and the NASDAQ continued to largely underperform deep value shares and that overall market. US Treasury yields drifted up towards the top of the recent ranges and the FOMC minutes Wednesday only confirmed the Fed remains ready to take rates even higher. Pockets of weakness popped up in a host of early key industrial Q3 earnings reports, tempering expectations despite economic reports that continued to point to a robust US economy. Tariffs, inflation, and a strong US dollar remained the underlying factors cited by most managements.

Geopolitics stayed front and center, as well, with EU member budget wrangling and intense Brexit deliberations resulting in bouts of risk aversion. Little progress was seen on Brexit and to this point a November meeting has not been secured. Italian bond yields rose after the EU essentially rejected the Italian budget proposal in its current form ahead of a final decision next week. The spread between the 10-year BTP yield and that of the German Bund reached the widest level in more than 5 years. President Trump ratcheted up immigration rhetoric heading towards November midterms and his advisors continued to talk tough on China despite reports that President Trump and Xi would meet on the sidelines of G20 next month. His administration was also forced deal with the fallout of the apparent murder of Washington Post journalist Khashoggi while in the hands of the Saudis. It remains to be seen how the foreign policy crisis will play out, but oil prices seem to be shrugging it off to this point. At one point WTI crude fell nearly 8% off the recent Oct 4th high. By Friday, options expiration led to a jump in volumes and trepidation remained high considering the recent jump in volatility and the well-chronicled history around late Oct trading. The S&P 500 cash finished the week just below the 200-day moving average for the first time in more than a year. For the week the S&P was essentially flat, the Dow gained 0.4% and the NASDAQ lost 0.6%

In corporate news this week, earnings season got rolling with reports from various large cap names. Netflix shares rose initially after announcing a jump in subscriptions but quickly gave back those gains back affirming the ominous pall that has settled over the NASDAQ/high beta complex. IBM fell on another disappointing quarterly report. Alcoa surged on an earnings blowout and boost to its buyback plan. Bank of America reported in line but shares dropped amid uncertainty over the sustainability of paying out low yields, while Schwab fell on a revenue miss and lower sequential new brokerage account numbers. Friday the Dow got a huge boost from P&G shares, surging closet to 10% after reporting impressive sales growth across nearly all its segments. On the M&A front, Carl Icahn reportedly is accumulating a significant stake in Dollar Tree, Walgreens CEO Pessina said has not ruled out deal with AmerisourceBergen, and casino magnate Tilman Fertitta reportedly approached Caesars about a potential bear hug $13/shr merger deal in cash and stock.

SUN 10/14
HRS Confirms deal with L3 Technologies in a merger of equals; Cash EPS accretive in first full year post close; $500M of annual gross pre-tax cost synergies in year 3; $300M net of savings returned to customers

MON 10/15
BAC Reports Q3 $0.66 v $0.62e, Rev $22.8B v $22.6Be
*(US) OCT EMPIRE MANUFACTURING: 21.1 V 20.0E
(US) Sept Monthly Budget Statement: $119.1B v $108Be
(SA) Saudi Government is planning to acknowledge Khashoggi died during an interrogation that went wrong, and the operation was "carried out without clearance" - CNN

TUES 10/16
*(UK) AUG AVERAGE WEEKLY EARNINGS 3M/Y: 2.7% V 2.6%E; WEEKLY EARNINGS (EX BONUS) 3M/Y: 3.1% V 2.9%E
(UK) SEPT JOBLESS CLAIMS CHANGE: +18.5K V +8.7K PRIOR; CLAIMANT COUNT RATE: 2.6% V 2.6% PRIOR
(DE) GERMANY OCT ZEW CURRENT SITUATION: 70.1 V 74.4E; EXPECTATIONS SURVEY: -24.7 V -12.0E
WMT Adjusts FY19 $4.65-4.80 v $4.80e (inc FlipKart) (prior $4.90-5.05), Op Income to increase low single digit % (ex Flipkart) - ahead of investor meeting
GS Reports Q3 $6.28 v $5.42e, Rev $8.65B v $8.37Be
(US) SEPT INDUSTRIAL PRODUCTION M/M: 0.3% V 0.2%E; CAPACITY UTILIZATION: 78.1% V 78.2%E
*(US) AUG JOLTS JOB OPENINGS: 7.136M V 6.900ME (new record)
(UK) Cabinet reportedly informed by Chief Whip that Brexit Irish backstop will not pass parliament, does not have sufficient votes - press
CSX Reports Q3 $1.05 v $0.94e, Rev $3.13B v $3.04Be
NFLX Reports Q3 $0.89 v $0.68e, Rev $4.00B v $4.01Be
IBM Reports Q3 $3.42 v $3.40e, Rev $18.8B v $19.1Be
BHP.AU Reports Q1 Waio iron ore production 69Mt v 71Mte; attributable iron ore production 61Mt v 62Mte v 64Mt y/y

WEDS 10/17
ROG.CH Reports Q3 (CHF) Rev 14.0B v 13.9Be
*(UK) SEPT CPI M/M: 0.1% V 0.3%E; Y/Y: 2.4% V 2.6%E
*(EU) EURO ZONE SEPT FINAL CPI Y/Y: 2.1% V 2.1%E; CPI CORE Y/Y: 0.9% V 0.9%E
(US) SEPT HOUSING STARTS: 1.201M V 1.21ME; BUILDING PERMITS: 1.24M V 1.28ME
*(US) DOE CRUDE: +6.5M V +1.5ME; GASOLINE: -2.0M V -0.5ME; DISTILLATE: -0.8M V -1ME
(US) Association of American Railroads weekly rail traffic report for week ending Oct 13th: 549.8K, +1.7% y/y
*(US) FOMC MINUTES FROM SEPT 26TH MEETING: GENERALLY ANTICIPATE FURTHER GRADUAL RATE INCREASES; ESTIMATES OF NEUTRAL RATE WILL BE ONLY ONE OF MANY FACTORS TO CONSIDER IN FUTURE POLICY
AA Reports Q3 $0.63 v $0.25e, Rev $3.39B v $3.36Be; Adds $200M to buyback plan (3% of market cap)
(US) Treasury Currency Report: Refrains from naming China as currency manipulator (as expected); keeps same six countries on FX watch list
*(KR) BANK OF KOREA (BOK) LEAVES 7-DAY REPO RATE UNCHANGED AT 1.50% (AS EXPECTED)

THURS 10/18
SAP.DE Reports Q3 Non-IFRS Net €973M v €1.03Be, non-IFRS Op €1.74B v €1.80Be, Rev €6.03B v €6.02Be
TSM Reports Q3 (NT$) Net 89.1B v 89.9B y/y; Op 95.2B v 98.1B y/y; Rev 260.3B v 252.1B y/y
- 2019 sales to grow on the 'high side' of 5-10% range
UNA.NL Reports Q3 Rev €12.5B v €12.5Be
*(UK) SEPT RETAIL SALES (EX AUTO) FUEL M/M: -0.8% V -0.4%E; Y/Y: 3.2% V 3.8%E
*(US) OCT PHILADELPHIA FED BUSINESS OUTLOOK: 22.2 V 20.0E
(IT) EU Commission responds to Italy draft budget plan: points to "particularly serious" non-compliance; says Italy plans "unprecedented" deviation from budget rules
CP Reports Q3 C$4.12 v C$4.12e, Rev C$1.99B v C$1.88Be
*(CL) CHILE CENTRAL BANK (BCCH) RAISES OVERNIGHT RATE TARGET BY 25BPS TO 2.75%, AS EXPECTED
(CN) China Securities Regulator (CSRC) Chief Liu: China will support non-state backed listed companies
(CN) CHINA Q3 GDP Y/Y: 6.5% V 6.6%E (slowest growth since Q1 2009)
(CN) CHINA SEPT INDUSTRIAL PRODUCTION Y/Y: 5.8% V 6.0%E (slowest growth since 2016)

FRI 10/19
(US) SEPT EXISTING HOME SALES: 5.15M V 5.29ME (lowest since Nov 2015)

Barrons weekend summary

Barrons weekend summary: cautious feature on DVMT 

Cover story: The biggest worry about the recent stock market drop is that the past eight months or so have been a matter of “pricing up a recession,” and that the market has already peaked—thought the yield curve hasn’t inverted and leading indicators such as jobless claims and credit spreads have held up. 

Features: 1) Selling stocks and bonds while holding cash and assets such as gold might help protect a portfolio in today’s market, but investors shouldn’t let turbulence derail their long-term asset allocations, which may only need tweaking; 2) The recent market rout could present an opportunity for investors to buy some of the most beaten-down cyclical names, which could perform well in a rising rate environment, says Savita Subramanian of BAC/Merrill Lynch; 3) Cautious on DVMT: Michael Dell’s $21.7B offer for the tracking stock “may be a deal too far”; many holders are upset that Dell wants to buy them out for cash and newly minted Dell stock at a steep discount to the value of VMW. 

Tech Trader: “The pressing question coming out of the Nasdaq Composite’s two-day 5.3% selloff is whether anything has fundamentally changed for tech—or was the selloff just a passing moment of fear?” Cautious on NFLX, PYPL: Upcoming earnings reports “will provide early commentary on key developments in Internet, semiconductor, and financial-technology landscapes” for an industry facing fallout from privacy concerns and trade wars. 

Trader: The excitement surrounding momentum stocks has faded as the boost from the GOP tax cuts runs off and the economy slows again—though a shift back to momentum may already be starting to happen. 

Interview: Nobel Prize-winning economist Joseph Stiglitz discusses bitcoin, the future of the euro, China’s options in the trade war with the U.S., and why globalization is under threat. 

Profile: Eli Pars is lead manager of the Calamos Market Neutral Income fund, which was one of the first liquid alternatives available to mutual fund investors wanted access to hedge fund strategies—though Calamos doesn’t use leverage to juice returns (top 10 convertible securities: MU, NOW, WDAY, LGND, BKNG, TAL, AMD, JOBS, SRPT). 

European Trader: Positive on Bayer: German healthcare and chemical giant got a temporary reprieve from a huge jury award that held Roundup liable for a plaintiff’s cancer, and there is likely to be more good news for long-term investors. 

Emerging Markets: The market’s enthusiasm for Brazilian presidential candidate Jair Bolsonaro stems from the fact that he isn’t a member of the Workers’ Party, whose corruption and profligacy analysts blame for Brazil’s woes. 

Commodities: Supplies of natural gas are nearly 18% below the five-year average for this time of year, which could presage elevated, volatile prices as temperatures begin to fall. 

Streetwise: Short sellers have produced some of the most diligent research on TSLA, and as negative information gets into the market it blends with bullish information and helps the stock price move towards its real worth.

US stocks unravel ahead of earnings season

TradeTheNews.com Weekly Market Update: US stocks unravel ahead of earnings season
Fri, 12 Oct 2018 16:13 PM EST

US stock indices broke down this week and volatility spiked signaling to some the potential end of the historical outperformance enjoyed by US stocks this year relative to overseas markets. To be sure foreign shares slid too with many finding their way into bear market territory while US markets fell back below key technical levels. On Thursday, the S&P 500 closed below its 200-day moving average for the first time since early April, while small caps and the NASDAQ fared even worse. Last week’s abrupt move up in rates along with further reflection on comments offered by Fed Chairman Powell about policy normalization were widely blamed as the catalysts. The lingering trade war and weakening Yuan coincided with fresh corporate signals of accelerating inflation, which, along with seasonal factors and technically driven momentum, resulted in a toxic mix. Crude prices slumped, gold found a bid and VIX was up 30% over just two sessions. Treasury yields moderated by Friday despite disappointing investor demand for two of the three US Treasury coupon sales this week. For the week the S&P500 lost 4.1%, the DJIA fell 4.2%, and the Nasdaq slipped 3.7%.

In corporate news this week, earnings season kicked off with a few major banks reporting quarterly results. JPMorgan and Citi announced a profit beat, but Wells Fargo missed on its bottom line as it continues to cut costs. PPG lowered its guidance due to softening demand in China, weaker automotive sales, and rising costs, and the coatings supplier announced a 10% global price increase for its automotive OEM coatings. Square shares fell sharply after the company said its long-time CFO Sarah Friar would be stepping down to become CEO of tech startup Nextdoor. According to reports, Sears Holdings has hired advisers to prepare the company for bankruptcy, but the retailer is reportedly nearing a financing deal to keep its doors open at least through Christmas. On the M&A front, TransDigm announced it would acquire Esterline Technologies in a $4B deal to expand its platform in the aerospace and defense space. The DOJ confirmed it would approve the $69B CVS-Aetna merger deal, contingent on divestment of Aetna’s Medicare Part D business to Wellcare.


SUN 10/7
(CN) Fitch Report: MMF assets have risen by 50% over the last 12 months to CNY8.6T ($1.3T), despite regulatory tightening: In Q2 the Yu'E Bao (largest money market fund in China) had the highest outflows in its history, assets declined to CNY1.45T v CNY1.69T (record) q/q

MON 10/8
*(EU) EURO ZONE OCT SENTIX INVESTOR CONFIDENCE: 11.4 V 11.6E
PPG Announces 10% global price increase for automotive OEM coatings due to "unprecedented cost pressures"
PPG Cuts Q3 $1.41-1.45 v $1.59e; Rev ~$3.8B v $3.87Be, attributed to softening demand in China, weaker automotive sales, and rising costs

TUES 10/9
(CN) US Officials warn China that Trump will not discuss trade at G20 unless China produces a detailed list of concessions first - FT
(ZA) South Africa President Ramaphosa confirms former South Africa Central Bank Gov Mboweni named as new Fin Min - press

WEDS 10/10
USD/CNY (US) US Treasury Sec Mnuchin has warned China on competitive currency devaluation - FT
*(UK) AUG INDUSTRIAL PRODUCTION M/M: 0.2% V 0.1%E; Y/Y: 1.3% V 1.0%E
(DE) German Economic Ministry cuts 2018 and 2019 GDP growth forecasts (as speculated)
(US) Treasury to issue new rules requiring all foreign investors in certain deals involving critical technology to submit to national security reviews or face fines as high as the value of their proposed transactions from Nov 10th - press
*(US) SEPT PPI FINAL DEMAND M/M: 0.2% V 0.2%E; Y/Y: 2.6% V 2.7%E
ESL To be acquired by TransDigm for $122.50/shr in cash valued at $4.0B
(US) Association of American Railroads weekly rail traffic report for week ending Oct 6th: 554.2K, +1.2% y/y
COST Reports Sept SSS (ex gas) +7.3%, US SSS (ex gas) +7.7%
FLR Reports prelim Q3 Rev $4.6B v $4.99Be, new awards $9B
(UK) UK and EU are said to have agreed in principle on an all-UK backstop plan - UK's Telegraph
(US) Pres Trump: I think the Fed has "gone crazy" and is too tight; the Fed is making a mistake

THURS 10/11
*(IT) ITALY DEBT AGENCY (TESORO) SELLS TOTAL €6.5B VS. €5.0-6.5B INDICATED RANGE IN 2021, 2025, 2033 AND 2037 BTP BONDS
DAL Reports Q3 $1.80 v $1.74e, Rev $11.8B v $11.9Be
(US) SEC Chair Clayton: changes in quarterly reporting requirements is unlikely for bigger companies; SEC may consider less frequent reports from small firms
*(US) DOE CRUDE: +6.0M V +1.5ME; GASOLINE: +1.0M V +0.5ME; DISTILLATE: -2.7M V -1.5ME
(TR) Secret agreement reportedly has been brokered for release of Pastor Brunson in Turkey; deal said to include a commitment by the U.S. to ease economic pressure on Turkey - NBC News
(CN) US Treasury staff finds China is not manipulating currency - press
(SG) SINGAPORE MONETARY AUTHORITY (MAS): SEMIANNUAL MONETARY POLICY STATEMENT: TO INCREASE SLIGHTLY THE SLOPE OF S$NEER POLICY BAND, maintains the width and center of currency band (2nd straight tightening move)
*(CN) CHINA JAN-SEPT TRADE BALANCE (CNY): 1.44T
(CN) CHINA SEPT TRADE BALANCE: $31.7B V $19.2BE
(CN) CHINA SEPT TRADE BALANCE (CNY): 213.2B V 136.2BE

FRI 10/12
JPM Reports Q3 $2.34 v $2.24e, Managed Rev $27.8B v $27.2Be
C Reports Q3 $1.73 v $1.67e, Rev $18.4B v $18.4Be
(TR) Turkish court releases US Pastor Andrew Brunson on time served
(US) OCT PRELIMINARY UNIVERSITY OF MICHIGAN CONFIDENCE: 99.0 V 100.5E
(UK) UK and EU are said to be discussing extending the Brexit transition phase beyond the 21 months so far negotiated - Guardian
(US) Fed's Evans (non-voter, dove): It’s time to adjust policy stance to at least 'neutral'; not worried about inflation; Slightly restrictive policy makes sense; slightly restrictive could mean about 50 bps above neutral - CNBC interview

Barrons weekend summary

Barrons weekend summary: cautious feature on WU 

Cover story: The numbers indicate that things are going well at Fidelity, but there are potential problems: the firm isn’t as profitable as large publicly traded peers, and profit margins lag those of BLK, SCHW, and TROW; Chief Abigail Johnson faces new cost pressures and changing investor behavior, fueled by disruptive technologies. Johnson says not interested in a merger with Goldman Sachs. 

Features: 

1) Cautious on WU: Company has the ability to connect the digital and physical worlds of money, but unlike PYPL and SQ, it doesn’t offer exposure to the increasing digitization of shopping, a potential long-term problem; 

2) “The high-yield bond market is having a good year, too good, perhaps, in the view of some analysts and investors,” though it appears to be the best option for investors who need yield and can tolerate risk; 

3) Positive on ETN, TEX, IR, CONE: Among companies that stand to benefit from the major increase in capital spending on data centers by the top four U.S. cloud players: AMZN, FB, GOOGL, and MSFT; 

4) Positive on BKS: Even with the jump in shares following the company’s announcement it will pursue strategic alternatives, the stock could have more upside because the company is valued cheaply relative to cash flow and sales. 

Tech Trader: Positive on MA, V: Credit card networks “remain a play on the growth of e-commerce, and they’ve done a good job of insulating themselves from disruption”—fintech rivals such as SQ and PYPL couldn’t exist without them. 

Trader: Investors should be taking risk out of their portfolios, says Christopher Harvey of WFC, but “it’s not time to run for cash and canned goods”; Amid a big jump in corporate stock repurchases, executives at many companies doing buybacks are dumping shares at a record clip; + RIG: Higher utilization rates are boosting the prices Transocean charges for its rigs, and could push the shares to gains of more than 15%. 

Mutual Fund Quarterly: 1

) Story looks at different approaches for assessing Fidelity’s worth, a task made difficult because the firm only selectively reveals financial information; 

2) The mutual fund industry faces challenges such as price wars, and a variety of industry changes could spur consolidation, a greater push overseas, and more specialization; 

3) Three mutual fund chief executives—Tim Buckley of Vanguard, Timothy Armour of Capital Group, and William Stromberg of T. Rowe Price—discuss the changes and challenges that lie ahead for their firms; 

4) After a decade of breakneck growth, the ETF industry is at a turning point—among other things, investors should prepare for a slew of new “index” products that resemble actively managed funds, and charge like them. 

Follow-Up: AMZN’s move to raise warehouse-worker wages will have ripple effects: Blue collar workers in the U.S. should benefit as their employers scramble to keep up with the e-commerce giant. 

European Trader: The political crisis in Italy is sending bond prices down and yields up, creating a contrarian opportunity for investors willing to risk buying long-dated Italian bonds at discounted prices. 

Emerging Markets: China isn’t likely to agree to Washington’s demands that it cease buying Iranian crude, adding more uncertainty to an emerging markets outlook that was fragile enough before the trade clash. 

Commodities: “Gold prices may already have hit bottom this year after declining for the past six months in a row, the longest street of losses in nearly three decades.” 

Streetwise: TSLA may be good test case of California’s new law requiring corporate boards to have females—research shows a diversity of opinions leads to better decisions, though mercurial chief Elon Musk might choose not to listen.

Treasury rates forge higher curbing risk appetite

TradeTheNews.com Weekly Market Update: Treasury rates forge higher curbing risk appetite
Fri, 05 Oct 2018 16:14 PM EST

Investor sentiment held strong to open the week buoyed by a long awaited trilateral trade deal reached with Canada intended to replace NAFTA. Eventually though, strong US economic data provided the impetus to push rates higher and ultimately weighed on stock prices. On Tuesday Fed Chairman Powell outlined his belief that rates may still be a long way from neutral and repeated that they might have to go above that level before this tightening cycle ends. Subsequently US Treasury yields finally broke above the May highs to levels not seen for the better part of a decade and the curve steepened considerably. WTI Crude prices topped $75 mid-week for the first time since 2014 spurred by the continued belief producers will not be able to make up for lost Iranian supply.

Wednesday’s ISM Services reading reached historic levels and was bookended by another robust September employment report. Friday’s headline payrolls gain was in the lower half of its recent range, but that was more than offset by upward revisions to prior months. Moreover, the unemployment rate fell to a new low reaching a level not seen since 1969 while wage gains held close to recent trends. Investors’ risk appetite may have been further hindered by an eye opening report that China used a tiny chip to hack into US business icons including Apple and Amazon. Outside of the significant geopolitical implications, the news was seen as likely to only harden the Trump administration line in the ongoing trade war. The VIX popped more than 35% over the final two trading sessions and while both the S&P and NASDAQ tested their 50-day moving averages. The Russel 2000 approached the 200-day moving average for the first time since February as investors favored large cap multinationals over small cap US-centric firms in the wake of the USMCA trade agreement. For the week the S&P500 dropped 1%, the DJIA slipped fractionally, the Nasdaq fell 3.2%, and the Russell 2000 tumbled 3.7%.

In corporate news this week, Amazon put renewed pressure on other retailers by announcing it would raise its minimum wage to $15 for all US hourly employees. GM got a boost for its autonomous vehicle program, announcing a multi-billion dollar technology partnership with Honda, on top of Consumer Reports declaring GM’s Super Cruise self-driving technology as superior to Tesla’s Autopilot. Meanwhile Tesla shares rebounded early this week on a settlement agreement with the SEC but they quickly sagged again after an ill-conceived tweet from Elon Musk mocked the “Shortseller Enrichment Commission” (ahead of a judge’s approval of the settlement agreement that will include corporate supervision of Musk’s public communications). Costco shares dropped 5% as the company disclosed “material weakness in internal control” in an otherwise solid earnings report. And shares of Super Micro Computer collapsed as much as 55% on reports that Chinese agents infiltrated the company’s subcontractors and seeded motherboards with tiny spy chips to create a backdoor into servers deployed by several tech giants.


SUN SEPT 30
09/30 TSLA On Saturday, the SEC settled fraud charges with CEO Musk; under the agreement Musk to relinquish the Chairman role - US financial press
09/30 (US) US and Canada Joint Statement: Reached new trilateral trade deal with Mexico which will be called the United States-Mexico-Canada Agreement (USMCA)

MON OCT 1
(US) Atlanta Fed raises Q3 GDP forecast to 4.1% from 3.6% prior
*(US) SEPT FINAL MARKIT MANUFACTURING PMI: 55.6 V 55.6E (highest since May)
(UK) UK said to plan compromise on Irish border; to accept some checks in Irish Sea to get Brexit deal - press
GE H. Lawrence Culp, Jr named Chairman & CEO effective immediately; To fall short of FCF, EPS guidance for 2018
*(EU) EURO ZONE AUG UNEMPLOYMENT RATE: 8.1% V 8.1%E
(SA) US President Trump spoke with Saudi Arabia King Salman about efforts to maintain supplies to ensure the stability of the oil market and growth of the global economy (update)
(DE) GERMANY RETAIL SALES M/M: -0.1% V +0.5%E; Y/Y: 1.6% V 1.6%E

TUES OCT 2
*(AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES RATES UNCHANGED AT 1.50% (AS EXPECTED)
AMZN Raises Minimum Wage to $15 for All U.S. Employees, Including Full-Time, Part-Time, Temporary, and Seasonal
TSLA Reports Q3 deliveries 83.5K vehicles (55.8K Model 3, 14.5K Model S, and 13.2K Model X)
(UK) Brexit Minister Raab: if Chequers is off the table from EU point of view then lots we are offering is off the table too
Senate Majority Whip Cornyn (R-TX): Senate may lack the votes to approve USMCA; passage is not a foregone conclusion
(US) Fed Chair Powell: inflation and unemployment forecasts are not too good to be true; Fed stands ready to act with authority if inflation expectations drift from target
(IT) Italy said to seek to cut deficit/GDP ratio to 2.0% in 2021 - Corriere

WED OCT 3
TSCO.UK Reports H1 Adj PBT £564M v £553M y/y, Op £933M v £992.0Me, Rev £28.3B v £25.2B y/y; Raises interim dividend 67% to 1.67p/shr
*(UK) SEPT SERVICES PMI: 53.9 V 54.0E (26th month of expansion)
LEN Reports Q3 $1.61 v $1.20e, Rev $5.70B v $5.67Be
(GR) Greek banks said to pledge cuts equal to 60% of NPES by 2012 - financial press
*(US) SEPT ADP EMPLOYMENT CHANGE: +230K V +184KE
GM Honda joins with Cruise and General Motors to build new Autonomous Vehicle; Honda to invest $2B over 12 years in initiatives making total commitment $2.75B
*(US) SEPT ISM NON-MANUFACTURING INDEX: 61.6 V 58.0 (highest since 1997)
(US) Conference Board Sept Total online job ads 4.75M v 4.61M m/m v 4.51M y/y; New ads 1.88M v 1.74M m/m v 1.94M y/y
*(US) DOE CRUDE: +8.0M V +1.5ME; GASOLINE: -0.5M V +1ME; DISTILLATE: -1.8M V -1.5ME (biggest rise in crude stocks since March 2017)
(US) 10-year Treasury yield tests through May high to 3.12%
(US) Association of American Railroads weekly rail traffic report for week ending Sep 29th: 571.9K, +3.7% y/y
BKS Announces strategic alternatives process; has observed rapid material accumulations of its stock by a party or parties that cannot be identified
(IT) Italy govt reportedly agrees to deficit/GDP target of 2.4% in 2019, 2.1% in 2020, and 1.8% in 2021 - Italian press
- HDP Cloudera and Hortonworks announce merger valued at $5.2B

THURS OCT 4
SMCI (CN) China reportedly used a tiny chip in hack that infiltrated US companies - press
COST Reports Q4 $2.36 v $2.34e, Rev $44B v $44.4Be; expects to report material weakness in internal control in FY18 Form 10-K
TSLA CEO Musk tweets: "Just want to that the Shortseller Enrichment Commission [SEC] is doing incredible work. And the name change is so on point!"
005930.KR Reports prelim Q3 (KRW) Op 17.5T (record) v 17.2Te, Rev 65.0T v 65.0Te

FRI OCT 5
066570.KR Reports prelim Q3 (KRW): Op 745.5B v 776Be, Rev 15.4T v 15.9Te
(UK) EU Brexit negotiators said to believe that an agreement with Britain was 'very close' - financial press
(IN) INDIA CENTRAL BANK (RBI) LEAVES REPURCHASE RATE UNCHANGED AT 6.50%; NOT EXPECTED
(DE) German Govt reportedly will lower its 2018 and 2019 GDP growth forecasts - press
(CA) CANADA SEPT NET CHANGE IN EMPLOYMENT: +63.3K V +25.0KE; UNEMPLOYMENT RATE: 5.9% V 5.9%E
(US) SEPT UNEMPLOYMENT RATE: 3.7% V 3.8%E (lowest since 1969)
(US) SEPT CHANGE IN NONFARM PAYROLLS: +134K V +185KE
(US) SEPT AVERAGE HOURLY EARNINGS M/M: 0.3% V 0.3%E; Y/Y: 2.8 % V 2.8%E
(UK) EU said to offer UK a more extensive free trade agreement that would incorporate 30-40% of the UK proposal, but still offers no resolution of Irish border issue – press
(SA) Saudi Prince: Aramco IPO will go forward by early 2021, still believe Aramco is worth $2T
(US) AUG CONSUMER CREDIT: $20.1B V $15.0BE
(US) Sen Collins (R-ME): confirms she will vote "yes" on Kavanaugh nomination to the Supreme Court, assuring he will be confirmed

Barrons weekend summary

Barrons weekend summary: cover looks at likely outcomes of US mid-term elections; positive feature on HAS 

Cover story: Members of Barron’s policy roundtable looked at what a shift in power in Washington after the midterms could mean for investors and concluded that a scenario in which Democrats take the House and Republicans keep the Senate “could lead to potentially fruitful horse trading that allows both parties to claim victory and the citizenry to win”; Sectors such as infrastructure and healthcare might especially benefit. 

Features: 1) Potential electoral results could favor the outlook for policies beneficial to a wide range of hospital, pharmaceutical, and other health-care-related companies; a big Democratic win would allow for greater Medicaid expansion in populous states, and boost opportunities for Affordable Care Act expansion; 2) The S&P 500 has typically risen the least in years when voters head to polls, and the most in off years, but it hasn’t followed the pattern this year—as a result, the good times that normally follow an election might not be as good after November’s midterms; 3) Positive on HAS: If Hasbro is successful at transforming itself into a diversified toy, movie, and videogame company, its stock could rise 50%-plus over the next two years—because while shares of toy companies tend to trade at market-average valuations, those of gaming companies go for premiums; 4) Positive on DWSH: The fund, launched in July, is one of just four actively managed bear-market ETFs that don’t seek to invert an index’s return; sub-advisor Nasdaq Dorsey Wright employs a proprietary stock-ranking system based on the strength or weakness of price moves relative to the market. 

Tech Trader: Positive on CRM: The appointment of Keith Block as co-chief executive is a clear signal that founder and co-CEO Marc Benioff will eventually step back from management, in the pattern of Bill Gates and other tech founders, and leave Block to manage day-to-day operations. 

Trader: Investors worry that tariffs will suppress trade and bring on another Great Depression, but Michael Shaoul of Marketfield Asset Management says it’s more likely companies will be forced to quickly rebuild supply chains without Chinese goods, while China does the same; Cautious on TSLA: The bull case for the company is based on the notion that it is more than just a car company, given its battery and self-driving car technology, but rivals are catching up in both these areas, and its advantage may not be a strong as many think; Positive on HSIC: Company’s plan to spin off its animal-health business into a startup to help veterinarians recapture the prescription sales lost to online pet pharmacies could unlock enough shareholder value to lift Schein shares by 30% to 50%.

Profile: Rick Gable, manager of MFS Global Real Estate fund, takes a contrarian approach and has 24% of his portfolio in retail REITs, more than any other real estate sector (top 10 holdings: SPG, Unibail-Rodamco-Westfield, PSA, WELL, Link REIT, BRX, Mitsui Fudosan, Hang Lung Properties, MAA, SUI). 

Follow-Up: Cautious on IBM: A bear case for the company might be based on the idea that much of its recent revenue declines were the result of currency fluctuations, and as companies shift computing to the public cloud, they will want to do much of their machine-learning work in-house, which bodes well for IBM.

European Trader: “The euro looks set to bounce—the rebound will come once investors perceive that the European Central Bank is becoming more assertive in managing the common currency area’s monetary policy.”

Emerging Markets: Emerging markets assets have firmed after the panic selling of late August and early September, but caution prevails on expecting a larger rally. 

Commodities: “The price of palladium has had an impressive climb of nearly 30% over the past six weeks, and could become more valuable than gold for the first time in 16 years.”

Streetwise: As religious groups prove they can activist-invest with the best, stocks are unexpectedly being enlisted as instruments of morality, which can end up having a ripple effect throughout the market.

Political clashes in D.C. and Rome strain markets as Fed tightens rate

TradeTheNews.com Weekly Market Update: Political clashes in D.C. and Rome strain markets as Fed tightens rate
Fri, 28 Sep 2018 16:04 PM EST

Major US stock indices stabilized just below last week’s new highs, partially capped by the latest leg up in rates and the increasing likelihood that the US/China trade spat will carry on for an extended period of time. Before Wednesday’s FOMC statement the US 10-year yield briefly tested above 3.11%, the May high for the year. Yields backed off after the Fed raised rates 25 bps, as expected, and also removed the term “accommodative” from the description of monetary policy. Brent crude prices remained on an upward trajectory and by Friday tested through this summer’s high to a level not seen since 2015, signaling traders have yet to believe reports that the Saudis will be able to bring additional barrels onto the market to offset Iranian supply lost to US tariffs.

An emotionally charged US Senate hearing on some of the allegations made against Supreme Court nominee Kavanaugh heightened political tensions in Washington with implications for the November election. Europe remained preoccupied with the looming Brexit deadline as well as Italian political wrangling over the 2019 budget. By Friday, word that an agreement was reached on a budget including a deficit at 2.4% of GDP was not received well by the markets. Italian rates ratcheted up and the FTSE MIB had its worst day since the Brexit vote in 2016. The Euro traded off late in the week in the wake of the Italian budget news as well as softer than expected core Eurozone CPI figures. Separately the firming Greenback resulted in softness in the Japanese Yen which helped propel the Nikkei to a 27-year high. For the week, the S&P500 fell 0.5%, the DJIA lost 1.1%, while the Nasdaq rose 0.7%.

In corporate news this week, the Fox-Comcast-Disney saga came to a close as Comcast beat out Fox in the auction for control of the UK’s Sky with a $39B bid and Fox sold the remainder of its ownership to Comcast for $15B. Amazon made its first move into the homebuilding sector as its Alexa Fund arm invested in prefabricated construction firm Plant Prefab. Sonic announced it would be acquired by Arby’s owner Inspire Brands for $43.50/share in cash, in a $2.3B transaction. Thyssenkrupp shares rose on the announcement it would split into two companies, separating its industrial and materials units, after pressure from investors. The SEC sued Tesla CEO Musk asserting he falsely claimed that he could take the company private at $420/share. Further reports indicated the SEC had offered a settlement to Musk that would have required he step down as chairman for two years, though he could remain as CEO, but Musk rejected the offer. Facebook disclosed that its engineering team found a security bug that affected 50M accounts which allowed potential hackers to take over people’s accounts. The company claimed they have patched the issue and have reached out to law enforcement to determine whether these accounts were misused or any information illicitly accessed.

MONDAY 9/24
*(CN) US TARIFFS ON $200B IN CHINA GOODS TAKE EFFECT: THE TARIFF RATE IS EXPECTED TO START AT 10% AND GO UP TO 25% AT THE END OF 2018
SKY.UK Confirms to be acquired by Comcast for £17.28/shr valued at £30.6B
(DE) GERMANY SEPT IFO BUSINESS CLIMATE: 103.7 V 103.2E; CURRENT ASSESSMENT: 106.4 V 106.0E
*(US) SEPT DALLAS FED MANUFACTURING ACTIVITY: 28.1 V 31.0E
(TR) Sec of State Pompeo: Pastor Brunson may be released in Turkey later this month
(EU) EU Foreign Policy Head Mogherini: EU will establish a legal entity to facilitate legitimate financial transactions with Iran to allow continued trade

TUESDAY 9/25
*(FR) FRANCE SEPT BUSINESS CONFIDENCE: 106 V 105E; MANUFACTURING CONFIDENCE:107 V 109E
*(SE) SWEDISH PARLIAMENT: OUST PM LOFVEN (204 of 349 voted against PM)
US 10-year Treasury yield tests May 2018 high above 3.11% (above 2018 high close)
SONC To be acquired by Inspire Brands for $43.50/shr in cash, in a $2.3B transaction
BMW.DE Cuts FY18 Automotive PBT to moderately decrease (prior on par y/y), Automotive Rev slightly lower y/y (prior slightly Higher) as a result of requirement of WLTP regulations
(AR) Argentina Central Bank governor Luis Caputo has tendered his resignation, citing personal reasons - press
AMZN Alexa Fund invests in prefabricated homebuilder Plant Prefab - CNBC
NKE Reports Q1 $0.67 v $0.62e, Rev $9.95B v $9.88Be
(UK) Prime Min May reportedly to lay out in speech tomorrow plans to cut UK corporate tax rates to lowest in the G20 - The Telegraph

WEDNESDAY 9/26
(CN) China to cut import tariffs for some goods from Nov 1st (in-line with earlier comments) - press
*(CZ) CZECH CENTRAL BANK (CNB) RAISES 2-WEEK REPURCHASE RATE BY 25BPS TO 1.50%; AS EXPECTED (third rate hike in a row)
(UK) PM May: Post-Brexit Britain will be pro-business; confirms plan for UK to lower taxes, post-Brexit UK should have the lowest corporate tax rate in the G20 - Global Business Forum
(US) Pres Trump: wants Venezuela to be 'straightened out'; every option is open; we're going to take care of people of Venezuela - Q&A at UN
*(US) AUG NEW HOME SALES: 629K V 630KE
(US) Association of American Railroads weekly rail traffic report for week ending Sep 22nd: 567.1K, +4.9% y/y
*(US) FOMC RAISES TARGET RATE RANGE 25BPS TO 2.00-2.25% (AS EXPECTED); FED STATEMENT REMOVES DESCRIPTION OF ACCOMMODATIVE
*(US) FOMC SUMMARY OF ECONOMIC PROJECTIONS (SEP) FOR SEPT MEETING (V. JUN)
(US) Fed Chair Powell: our economy is strong, inflation is stable - FOMC press conf
(US) Fed Chair Powell: more businesses are raising concerns about trade policy; don't expect much impact from tariffs unless they are in place long term - FOMC press conf Q&A
BBBY Reports Q2 $0.36 v $0.49e, Rev $2.94B v $2.95Be

THURSDAY 9/27
*(ID) INDONESIA CENTRAL BANK (BI) RAISES 7-DAY REVERSE REPO BY 25BPS TO 5.75%; AS EXPECTED
*(PH) PHILIPPINES CENTRAL BANK (BSP) RAISES OVERNIGHT BORROWING RATE BY 50BPS TO 4.50%, AS EXPECTED
(SA) Saudi Arabia said to plan boosting oil supply by 200-300Kbpd in next 2 months to compensate for lower Iran output - press
*(EU) EURO ZONE SEPT BUSINESS CLIMATE INDICATOR: 1.21 v 1.19e; CONSUMER CONFIDENCE(Final): -2.9 v -2.9e
*(DE) GERMANY SEPT PRELIMINARY CPI M/M: 0.4% V 0.1%E; Y/Y: 2.3% V 2.0%E
*(US) AUG PRELIMINARY DURABLE GOODS ORDERS: 4.5% V 2.0%E; DURABLES EX-TRANSPORTATION: 0.1% V 0.4%E
*(US) Q2 FINAL GDP ANNUALIZED Q/Q: 4.2% V 4.2%E; PERSONAL CONSUMPTION: 3.8% V 3.8%E
*(US) Q2 FINAL GDP PRICE INDEX: 3.0% V 3.0%E; CORE PCE Q/Q: 2.1% V 2.0%E
(US) Nevada reports Aug casino gaming Rev $913M, -7.7% y/y; Las Vegas strip Rev $477.9M, -12.4% y/y
*(US) AUG PENDING HOME SALES M/M: -1.8% V -0.5%E; Y/Y: -2.5% V -1.0%E
TKA.DE Confirms plans to split group into two independent, listed companies; to split into Materials AG and Industrials AG
(US) Atlanta Fed cuts Q3 GDP forecast to 3.8% from 4.4% prior
*(IT) Italy Interior Min Salvini: agreed on 2019 deficit at 2.4% of GDP; tax cuts and pension reforms are agreed upon; will not raise sales tax in budget plan
TSLA CEO Musk sued by the SEC, which will seek civil penalties - press

FRIDAY 9/28
*(DE) GERMANY SEPT UNEMPLOYMENT CHANGE: -23K V -9KE; UNEMPLOYMENT CLAIMS RATE: 5.1% V 5.2%E
*(EU) EURO ZONE SEPT ADVANCE CPI ESTIMATE Y/Y: 2.1% V 2.1%E; CPI CORE Y/Y: 0.9% V 1.1%E
*(CA) CANADA JUL GDP M/M: 0.2% V 0.1%E; Y/Y: 2.4% V 2.2%E
(US) Atlanta Fed cuts Q3 GDP forecast to 3.6% from 3.8% prior
FB Discloses engineering team found security issue affecting nearly 50M accounts; issue has been fixed and have informed law enforcement
(US) Senate Judiciary panel votes to advance the Kavanaugh nomination 11-10 along party lines; Sen Flake urges one week delay in full floor vote to allow FBI investigation

Barrons weekend summary

Barrons weekend summary: cover story on gold; also discusses Bitcoin and cannabis stocks 
Cover story: Gold, “long seen as the investment choice of the cranky and fearful” and out-of-favor because it doesn’t yield anything, now deserves a place in investment portfolios; Compared with stocks and other financial assets, gold looks inexpensive, and provides a hedge against rising inflation. 

Features: 
1) Bitcoin could be a potential threat to gold bulls—some investors believe that as it becomes more mainstream, the cryptocurrency could replace gold in some portfolios, though others say gold is less volatile and is a well-understood commodity; 
2) Positive on AMAT, BWA, CAT, KEY, PH: Barron’s screened for promising companies in the capital goods, financial, auto, and semiconductor sectors, and found five stocks with below-average valuations and healthy growth prospects; 
3) Cautious on BX, TRI: Much of the $17B buyout of Thomson Reuters’ financial data business by a Blackstone-led consortium will be financed by debt, which makes it reminiscent of 2007—though it has several distinctly modern features; 
4) Interval funds, which provide access to illiquid assets and which have long been on the market, are gaining new ground among some fund managers. 

Tech Trader: Positive on BSX, ISRG: Companies are hot performers in the medical-device sector, which has been one of the year’s strongest gainers—and though valuations are high, it’s likely many of the sector’s shares will stay aloft. 

Trader: Rising yields could signal a lasting shift away from tech stocks, says Thomas Lee of Fundstrat Global Advisors, and turn some of this year’s winners into losers; Investors need to approach bank shares with caution—the spaces remains healthy, says Ken Zerbe of MS, but things are getting weaker on the loan-growth side; Cautious on BA, LMT: “The defense sector has benefited from forces that are now starting to reverse, at a time when valuations are historically high,” and investors may see less-robust returns. 

Profile: Howard Greene and Jeff Given, co-managers of the John Hancock Bond fund, invest in multiple sectors of the bond market and aren’t afraid to take credit risk, most recently in securities backed by prime auto loans. 

Interview: Bill McGlashan, founder and managing partner of TPG Growth, talks about investing for a cleaner, healthier, and more equitable world through his Rise fund, which raised $2.1B last year. Follow-Up: Positive on Berkshire Hathaway: The company may no be a “screaming bargain,” says David Rolfe of Wedgewood Partners, but the shares are still undervalued. 

European Trader: Turkey’s stock and currency have taken a hit, but the recent stabilization of the Turkish lira may be paving the way for a bounceback in the shares; Investors seeking to profit from the potential upturn should consider TUR. 

Emerging Markets: Emerging markets are going through a “slow motion crisis,” says Harvard international finance professor Carmen Reinhart—and it’s not just hot spots such as Argentina, Brazil, and Turkey. 

Commodities: “There are still several weeks before U.S. sanctions on Iranian oil actually kick in, but expectations of tight crude inventories already have contributed to much of this year’s gains in global prices.” 

Streetwise: “It’s hard to understand why TLRY is valued above large, more established rivals like Aurora Cannabis and CGC” in the marijuana sector, whose “stocks are the new bitcoin,” says Barron’s columnist Bill Alpert.

Markets Climb Another Rung Higher on the Wall of Worry

TradeTheNews.com Weekly Market Update: Markets Climb Another Rung Higher on the Wall of Worry
Fri, 21 Sep 2018 16:07 PM EST

Key US stock indices finally broke into new uncharted territory despite no headway being made in either US trade or Brexit negotiations. Investors hardly batted an eye at the Trump administration’s announcement that another $200B in Chinese imports would subject to tariffs beginning next week, or China’s promise to retaliate when those new US tariffs take effect. Stocks moved up along with interest rates as bond markets saw a modest decline resulting in marginal curve steepening. The US 10-year yield neared the May high stopping just shy of 3.1% while emerging market stability and an overall improvement in investor risk appetite enveloped markets. Copper prices along with overseas stocks rallied aggressively into the week’s end. The BOJ left rates on hold on Wednesday but the 30-year JGB touched the highest level about a year on Friday after the central bank trimmed daily purchases. Crude prices held a bid keeping WTI above $70 heading into this weekend’s OPEC+ meeting where some speculation emerged producers could allow more barrels to reach the market. For the week, the S&P500 gained 0.8%, the DJIA rose 2.2%, and the Nasdaq added 0.3%.

In corporate news this week, the DOJ granted clearance to Cigna’s acquisition of Express Scripts, which bodes positively for the other proposed merger in the pharmacy space currently before the Justice Department, the Aetna-CVS deal. The DOJ also reportedly opened a criminal probe over Tesla CEO Musk’s tweets in August about securing funding for a go-private transaction. EU antitrust chief Vestager said her agency has opened a preliminary probe of Amazon data collection practices from rival retailers and merchants. Adobe announced plans to acquire Marketo for $4.75B in a bid to strengthen its position in the enterprise marketing space to better compete with Salesforce, Oracle, and Microsoft. FedEx shares slumped on earnings call comments that pointed to a slowing in European and Chinese economies and tariff disputes putting a damper on activity. Oracle’s stock dropped after missing revenue estimates and guiding Q2 slightly below consensus. The recent furor in cannabis stocks was stoked by a report that Coca-Cola has opened talks with Canada’s Aurora Cannabis to develop drinks infused with CBD, a non-psychoactive cannabis-based chemical.


MONDAY 9/17
ACB.CA Reportedly Coca Cola in to talks with Co to develop drinks infused with CBD (cannabis) - press
(US) SEPT EMPIRE MANUFACTURING: 19.0 V 23.0E
(SY) Russia Pres Putin: In discussion with Turkey Pres Erdogan we decided to create a DMZ between rebels and Syrian govt forces in Idlib; Russian and Turkish forces will patrol the DMZ
(US) Pres Trump tweets supports for legislation to remove pharmacy gag clauses, urges congressional action
ESRX DOJ grants clearance to Cigna’s acquisition of Express Scripts
ORCL Reports Q1 $0.71 v $0.68e, Rev $9.20B v $9.28Be; increases share repuchase authorization by $12B (6% of market cap)
FDX Reports Q1 $3.46 v $3.78e, Rev $17.1B v $16.9Be
(CN) WHITE HOUSE CONFIRMS WILL IMPOSE TARIFFS ON $200B OF CHINA IMPORTS, EFFECTIVE SEPT 24TH: tariff rate will start at 10% and go up to 25% at the end of 2018

TUESDAY 9/18
(CN) China Commerce Ministry (MOFCOM): To levy US retaliatory tariffs, forced to retaliate, simultaneously with the US; tariffs bring new uncertainties to talks between the two countries
(CN) China reportedly to levy tariffs on $60B worth of US goods at 5-10% rates effective Sept 24th
TSLA US DOJ reportedly opens criminal probe over Musk going private tweets - press
(JP) BANK OF JAPAN (BOJ) LEAVES INTEREST RATE ON EXCESS RESERVES (IOER) UNCHANGED AT -0.10%, AS EXPECTED

WEDNESDAY 9/19
(JP) Japan BOJ Gov Kuroda: Will maintain negative yield policy, 10 year yield target - post rate decision press conference
DANSKE.DK Investigations report findings related to branch in Estonia
(UK) AUG CPI M/M: 0.7% V 0.5%E; Y/Y: 2.7% V 2.4%E (6-month high)
(UK) UK PM May reportedly rejecting EU Barnier's improved Irish Border offer - press
SKY.UK Reportedly take over for company may end in one-day auction - press
(US) AUG HOUSING STARTS: 1.28M V 1.24ME; BUILDING PERMITS: 1.23M V 1.31ME
AMZN EU antitrust chief Vestager: have opened a preliminary probe of Amazon data collection from rival retailers, merchants
(US) Atlanta Fed maintains Q3 GDP forecast at 4.4%, unchanged from prior
(UK) EU's Juncker: EU and UK are still far away from a Brexit deal - press
AMZN Reportedly aims to open as many as 3,000 'Amazon Go' cashierless stores by 2021 - press
(BR) BRAZIL CENTRAL BANK (BCB) LEAVES SELIC TARGET RATE UNCHANGED AT 6.50%; AS EXPECTED
(US) Pres Trump to nominate former Fed economist Nellie Liang for Board of Governors seat - press
(UK) Prime Min May reportedly told EU leaders that extending Brexit talks is not an option; there will not be a second referendum; Northern Ireland cannot have a separate customs regime

THURSDAY 9/20
(CN) China said to plan a 'broad' import tax cut as soon as October for the majority of its trading partners - press
DGE.UK Issues Q1 trading update: trading in line with forecasts: sees Op and Rev impact from currencies, affirms medium-term organic Op margin outlook
(CH) SWISS NATIONAL BANK (SNB) LEAVES SIGHT DEPOSIT INTEREST RATE UNCHANGED AT -0.75%; AS EXPECTED
(NO) NORWAY CENTRAL BANK (NORGES) RAISES DEPOSIT RATES 25BP TO 0.75%, AS EXPECTED
(TR) Turkey Fin Min Albayrak announces Medium-Term Economic Plan: Expects inflation to keep surging, cuts GDP growth forecasts
(UK) AUG RETAIL SALES (EX AUTO FUEL) M/M: 0.3% V -0.2%E; Y/Y: 3.5% V 2.4%E
SKY.UK UK's takeover panel reportedly announces maximum three rounds for announced auction takes place on Sept 21-22
(IT) Italy Economy Ministry reportedly will Cut 2018 and 2019 GDP forecasts materially - press
005930.KR Reportedly looking at cutting memory chip growth next year to keep supply tight - press
(US) SEPT PHILADELPHIA FED BUSINESS OUTLOOK: 22.9 V 18.0E
(ZA) SOUTH AFRICA CENTRAL BANK (SARB) LEAVES INTEREST RATES UNCHANGED AT 6.50%; AS EXPECTED
(UK) EU President Tusk: Chequers plan won't work; reiterates there will be no Brexit agreement without an Irish backstop; Oct 18th is the moment of truth - Salzburg press conf
(UK) Prime Min May: we had a productive summit; EU's Tusk confirmed commitment to reach a deal; EU has provided no counter-proposal - post Salzburg meeting comments
(US) AUG EXISTING HOME SALES: 5.34M V 5.37ME
(US) Fed Reports Q2 Financial Accounts: Household Change in Net Worth: $2.191T v $1.028T prior
MU Reports Q4 $3.53 v $3.32e, Rev $8.44B v $8.25Be
ADBE Confirms to acquire Marketo for $4.75B

FRIDAY 9/21
(FR) France Q2 Final GDP Q/Q: 0.2% v 0.2%e; Y/Y: 1.7% v 1.7%e
(FR) FRANCE SEPT PRELIMINARY MANUFACTURING PMI: 52.5 V 53.3E (3 Month low)
(DE) GERMANY SEPT PRELIMINARY MANUFACTURING PMI: 53.7 V 55.7E
(EU) EURO ZONE SEPT PRELIMINARY MANUFACTURING PMI: 53.3 V 54.5E
(ZA) South Africa President Ramaphosa announces details of stimulus package (confirms setup of ZAR400B infrastructure fund)
(EU) ECB: banks to repay early €3.6B in TLTRO-2 loans - press
(UK) PM May: Brexit talks are at an impasse; both sides still want a deal; EU shouldn't reject proposal with no explanation or counteroffer - Brexit negotiations statement
(US) SEPT PRELIMINARY MARKIT MANUFACTURING PMI: 55.6 V 55.0E (4-month high)
OPEC source: OPEC and non-OPEC countries are mulling potential production boost by another 500K bpd - press
(UK) EU President Tusk: the EU position on Chequers plan was known to the British govt for weeks ahead of summit; UK's stance at Salzburg summit was uncompromising
(US) Deputy AG Rosenstein reportedly suggested that he secretly recorded Pres Trump to expose chaos in administration; discussed seeking to recruit cabinet members to invoke 25th Amendment to remove Trump from office - NY Times
Weekly Market Update: Markets Climb Another Rung Higher on the Wall of Worry
Fri, 21 Sep 2018 16:07 PM EST

Key US stock indices finally broke into new uncharted territory despite no headway being made in either US trade or Brexit negotiations. Investors hardly batted an eye at the Trump administration’s announcement that another $200B in Chinese imports would subject to tariffs beginning next week, or China’s promise to retaliate when those new US tariffs take effect. Stocks moved up along with interest rates as bond markets saw a modest decline resulting in marginal curve steepening. The US 10-year yield neared the May high stopping just shy of 3.1% while emerging market stability and an overall improvement in investor risk appetite enveloped markets. Copper prices along with overseas stocks rallied aggressively into the week’s end. The BOJ left rates on hold on Wednesday but the 30-year JGB touched the highest level about a year on Friday after the central bank trimmed daily purchases. Crude prices held a bid keeping WTI above $70 heading into this weekend’s OPEC+ meeting where some speculation emerged producers could allow more barrels to reach the market. For the week, the S&P500 gained 0.8%, the DJIA rose 2.2%, and the Nasdaq added 0.3%.

In corporate news this week, the DOJ granted clearance to Cigna’s acquisition of Express Scripts, which bodes positively for the other proposed merger in the pharmacy space currently before the Justice Department, the Aetna-CVS deal. The DOJ also reportedly opened a criminal probe over Tesla CEO Musk’s tweets in August about securing funding for a go-private transaction. EU antitrust chief Vestager said her agency has opened a preliminary probe of Amazon data collection practices from rival retailers and merchants. Adobe announced plans to acquire Marketo for $4.75B in a bid to strengthen its position in the enterprise marketing space to better compete with Salesforce, Oracle, and Microsoft. FedEx shares slumped on earnings call comments that pointed to a slowing in European and Chinese economies and tariff disputes putting a damper on activity. Oracle’s stock dropped after missing revenue estimates and guiding Q2 slightly below consensus. The recent furor in cannabis stocks was stoked by a report that Coca-Cola has opened talks with Canada’s Aurora Cannabis to develop drinks infused with CBD, a non-psychoactive cannabis-based chemical.


MONDAY 9/17
ACB.CA Reportedly Coca Cola in to talks with Co to develop drinks infused with CBD (cannabis) - press
(US) SEPT EMPIRE MANUFACTURING: 19.0 V 23.0E
(SY) Russia Pres Putin: In discussion with Turkey Pres Erdogan we decided to create a DMZ between rebels and Syrian govt forces in Idlib; Russian and Turkish forces will patrol the DMZ
(US) Pres Trump tweets supports for legislation to remove pharmacy gag clauses, urges congressional action
ESRX DOJ grants clearance to Cigna’s acquisition of Express Scripts
ORCL Reports Q1 $0.71 v $0.68e, Rev $9.20B v $9.28Be; increases share repuchase authorization by $12B (6% of market cap)
FDX Reports Q1 $3.46 v $3.78e, Rev $17.1B v $16.9Be
(CN) WHITE HOUSE CONFIRMS WILL IMPOSE TARIFFS ON $200B OF CHINA IMPORTS, EFFECTIVE SEPT 24TH: tariff rate will start at 10% and go up to 25% at the end of 2018

TUESDAY 9/18
(CN) China Commerce Ministry (MOFCOM): To levy US retaliatory tariffs, forced to retaliate, simultaneously with the US; tariffs bring new uncertainties to talks between the two countries
(CN) China reportedly to levy tariffs on $60B worth of US goods at 5-10% rates effective Sept 24th
TSLA US DOJ reportedly opens criminal probe over Musk going private tweets - press
(JP) BANK OF JAPAN (BOJ) LEAVES INTEREST RATE ON EXCESS RESERVES (IOER) UNCHANGED AT -0.10%, AS EXPECTED

WEDNESDAY 9/19
(JP) Japan BOJ Gov Kuroda: Will maintain negative yield policy, 10 year yield target - post rate decision press conference
DANSKE.DK Investigations report findings related to branch in Estonia
(UK) AUG CPI M/M: 0.7% V 0.5%E; Y/Y: 2.7% V 2.4%E (6-month high)
(UK) UK PM May reportedly rejecting EU Barnier's improved Irish Border offer - press
SKY.UK Reportedly take over for company may end in one-day auction - press
(US) AUG HOUSING STARTS: 1.28M V 1.24ME; BUILDING PERMITS: 1.23M V 1.31ME
AMZN EU antitrust chief Vestager: have opened a preliminary probe of Amazon data collection from rival retailers, merchants
(US) Atlanta Fed maintains Q3 GDP forecast at 4.4%, unchanged from prior
(UK) EU's Juncker: EU and UK are still far away from a Brexit deal - press
AMZN Reportedly aims to open as many as 3,000 'Amazon Go' cashierless stores by 2021 - press
(BR) BRAZIL CENTRAL BANK (BCB) LEAVES SELIC TARGET RATE UNCHANGED AT 6.50%; AS EXPECTED
(US) Pres Trump to nominate former Fed economist Nellie Liang for Board of Governors seat - press
(UK) Prime Min May reportedly told EU leaders that extending Brexit talks is not an option; there will not be a second referendum; Northern Ireland cannot have a separate customs regime

THURSDAY 9/20
(CN) China said to plan a 'broad' import tax cut as soon as October for the majority of its trading partners - press
DGE.UK Issues Q1 trading update: trading in line with forecasts: sees Op and Rev impact from currencies, affirms medium-term organic Op margin outlook
(CH) SWISS NATIONAL BANK (SNB) LEAVES SIGHT DEPOSIT INTEREST RATE UNCHANGED AT -0.75%; AS EXPECTED
(NO) NORWAY CENTRAL BANK (NORGES) RAISES DEPOSIT RATES 25BP TO 0.75%, AS EXPECTED
(TR) Turkey Fin Min Albayrak announces Medium-Term Economic Plan: Expects inflation to keep surging, cuts GDP growth forecasts
(UK) AUG RETAIL SALES (EX AUTO FUEL) M/M: 0.3% V -0.2%E; Y/Y: 3.5% V 2.4%E
SKY.UK UK's takeover panel reportedly announces maximum three rounds for announced auction takes place on Sept 21-22
(IT) Italy Economy Ministry reportedly will Cut 2018 and 2019 GDP forecasts materially - press
005930.KR Reportedly looking at cutting memory chip growth next year to keep supply tight - press
(US) SEPT PHILADELPHIA FED BUSINESS OUTLOOK: 22.9 V 18.0E
(ZA) SOUTH AFRICA CENTRAL BANK (SARB) LEAVES INTEREST RATES UNCHANGED AT 6.50%; AS EXPECTED
(UK) EU President Tusk: Chequers plan won't work; reiterates there will be no Brexit agreement without an Irish backstop; Oct 18th is the moment of truth - Salzburg press conf
(UK) Prime Min May: we had a productive summit; EU's Tusk confirmed commitment to reach a deal; EU has provided no counter-proposal - post Salzburg meeting comments
(US) AUG EXISTING HOME SALES: 5.34M V 5.37ME
(US) Fed Reports Q2 Financial Accounts: Household Change in Net Worth: $2.191T v $1.028T prior
MU Reports Q4 $3.53 v $3.32e, Rev $8.44B v $8.25Be
ADBE Confirms to acquire Marketo for $4.75B

FRIDAY 9/21
(FR) France Q2 Final GDP Q/Q: 0.2% v 0.2%e; Y/Y: 1.7% v 1.7%e
(FR) FRANCE SEPT PRELIMINARY MANUFACTURING PMI: 52.5 V 53.3E (3 Month low)
(DE) GERMANY SEPT PRELIMINARY MANUFACTURING PMI: 53.7 V 55.7E
(EU) EURO ZONE SEPT PRELIMINARY MANUFACTURING PMI: 53.3 V 54.5E
(ZA) South Africa President Ramaphosa announces details of stimulus package (confirms setup of ZAR400B infrastructure fund)
(EU) ECB: banks to repay early €3.6B in TLTRO-2 loans - press
(UK) PM May: Brexit talks are at an impasse; both sides still want a deal; EU shouldn't reject proposal with no explanation or counteroffer - Brexit negotiations statement
(US) SEPT PRELIMINARY MARKIT MANUFACTURING PMI: 55.6 V 55.0E (4-month high)
OPEC source: OPEC and non-OPEC countries are mulling potential production boost by another 500K bpd - press
(UK) EU President Tusk: the EU position on Chequers plan was known to the British govt for weeks ahead of summit; UK's stance at Salzburg summit was uncompromising
(US) Deputy AG Rosenstein reportedly suggested that he secretly recorded Pres Trump to expose chaos in administration; discussed seeking to recruit cabinet members to invoke 25th Amendment to remove Trump from office - NY Times