Dow tops 30K giving investors a lot to be thankful for

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Weekly Market Update: Dow tops 30K giving investors a lot to be thankful for

2020-11-27T13:06:01.713

- The Dow hit a fresh all-time highs this week breaking above 30K for the first time ever. Markets continued to calibrate to rising hopes for coronavirus vaccines. Uncertainty also dissipated when the GSA informed President-elect Biden that the current administration was ready to begin working on the transition. That news came in the wake of multiple reports former Fed Chair Yellen has been selected to serve as Treasury Secretary under the Biden administration. Stock and options volumes exploded and breadth was very impressive ahead of Thursday’s Thanksgiving break led by the small caps and various segments at the pandemic’s epicenter, like travel and leisure.
- Investors sifted through a mountain of economic data. Weekly initial jobless claims hit a 5-week high while the total number of people claiming benefits in all programs rose by 135K to ~20.5M people. Oct personal income also fell a sharp 0.7% suggesting the pandemic continues to ravage a broad swath of the US labor market. Friday’s shortened trading session saw gold prices drop below $1,800 and the VIX tested below 20 for the first time since Feb, suggesting investors are becoming comfortable with diminishing political uncertainty despite President Trump’s continued tweets questioning the election results. Oil prices rallied sharply helped by a report OPEC+ producers are still leaning towards extending production cuts into next year despite the recent pop in crude prices. Bitcoin rolled over after nearing 20K and new all-time highs midweek amid continued general softness in the dollar. The Euro tested back above 1.1950 for the first time since September bringing the key technical 1.20 level back into focus as time continued to run out on protracted Brexit talks. For the week the S&P added 2.3%, Dow gained 2.2% and NASDAQ rose ~3%.
- In corporate news for this holiday-shortened week, AstraZeneca announced its vaccine candidate met its primary efficacy endpoint in preventing COVID-19 with average efficacy of 70%, though the CEO said it may do another study after an accidental lower dose showed higher efficacy levels against coronavirus. Salesforce reportedly held talks with Slack over a potential acquisition which could value the business communication company at over $17B. EU aviation regulators confirmed the Boeing 737 Max can be allowed to fly again and expects formal approval by Jan 2021. Google is said to plan to build a fiber optic network that would open a new global traffic corridor linking India and Europe, which would connect an internet route between Saudi Arabia and Israel for the first time.

Markets temporarily inoculated against risks of Covid winter and delays in approving new relief funding

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Weekly Market Update: Markets temporarily inoculated against risks of Covid winter and delays in approving new relief funding

2020-11-20T16:19:32.89

The broader narrative this week remained the confluence of positive news on coronavirus vaccine development weighed against surging infections and rapidly rising hospitalizations into the upcoming Thanksgiving holiday. US indices generally notched the week’s high on Monday in the wake of the release of Moderna’s trial results which resulted in another flurry of buying in pandemic-stricken names. By Friday, Pfizer and BionNTech formally submitted a request to the FDA for emergency use authorization but stay at home sector names were already rebounding as momentum waned in the broader market. Treasury yields were capped by the persistent risk to the near term economic outlook caused by the surging pandemic, and lingering uncertainty emanating from President Trump’s spiraling attempt to contest the election results. The US economic data showed some signs of softening amid commentary from both corporate leaders and Federal Reserve officials who acknowledged the recent spike in Covid cases is posing risks to their near term outlooks. The dollar weakened, hurt by continued dysfunction in DC. Given the current political environment hopes for another round of fiscal stimulus remain faint in the near term, and a rift developed between Treasury Secretary Mnunchin and the Federal Reserve on how to deal with the expiration of the Fed’s emergency 13-3 lending powers. New EU coronavirus relief funds were also held up by political skirmishes in Europe, while any Brexit trade deal now appears to be at least another two weeks away. For the week, the S&P slipped 0.8%, the DJIA fell 0.7%, and the Nasdaq rose 0.2%.

In corporate news this week, Moderna announced its COVID-19 vaccine candidate met primary endpoints with 94.5% efficacy in its Phase 3 trial, and plans to submit it for emergency use authorization with the FDA in coming weeks. Boeing received the long-awaited and largely expected FAA approval for its 737 MAX jet to take to the skies again, after being grounded since 2019. On the retail front, Home Depot notched top and bottom line beats but warned of rising employee expenses, Lowes narrowly missed profit estimates, Target crushed earnings and gained market share, while Walmart posted another solid quarter though it still refrained from reinstating guidance. Nvidia easily surpassed analyst estimates but saw its Q3 gross margins decline by 50 bps and forecast that its data center segment revenue would shrink quarter-on-quarter.

PNC agreed to acquire BBVA’s U.S. banking subsidiary for $11.6B in cash with the aim to expand its banking branch reach coast-to-coast. Home Depot announced it would buy its former subsidiary HD Supply for $56/share in an $8B cash deal as it seeks to grow its maintenance and repair distribution network in North America. Amazon entered the prescription drug sector with its launch of Amazon Pharmacy, a service to deliver medications and offer savings to customers when paying without insurance. In a bid to stave off further pushback from developers, Apple announced it would halve its App Store commission to 15% for small businesses, down from 30%, though the higher fee remains for larger companies. Google said it plans to begin offering checking accounts with banks in an update to its Google Pay app. Shares in Tesla jumped after it was announced the automaker would finally enter the S&P 500 index.


SUN 11/15
(CN) US President Trump said to be looking at implementing additional measures against China during his final weeks in office - press

MON 11/16
BBVA.ES Confirms PNC to acquire BBVA USA Bancshares, Inc. for $11.6B in cash
MRNA COVID-19 Vaccine Candidate mRNA-1273 meets Primary Efficacy Endpoint in First Interim Analysis of the Phase 3 COVE Study with vaccine efficacy of 94.5%; Intends to submit for EUA with U.S. FDA in coming weeks
MRNA Announces Longer Shelf Life for mRNA-1273, COVID-19 Vaccine Candidate at Refrigerated Temperatures
HDS To be acquired by Home Depot for $56/shr in ~$8B cash deal
VOW3.DE CEO: Affirms FY22 Op RoS 6-7%, ROI 10-12%, Capex ratio 6.0-6.5%, R&D Cost ratio 6.5-7.0%, Net Cash flow >€10B, Liquidity >€20B - slides
*(US) NOV EMPIRE MANUFACTURING: 6.3 V 13.5E
(EU) Hungary and Poland have followed through with threat to block the 2021-2027 EU budget and recovery fund at Ambassadors meeting in Brussels
BIDU Reports Q3 $3.00 v $1.85e, Rev $4.16B v $3.92Be

TUES 11/17
AMZN Introduces Amazon Pharmacy: Prescription Medications Delivered; Prime members receive free two-day delivery and up to 80% savings when paying without insurance
WMT Reports Q3 $1.34 v $1.19e, Rev $134.7B v $133.0Be
*(US) OCT INDUSTRIAL PRODUCTION M/M: 1.1% V 1.0%E; CAPACITY UTILIZATION: 72.8% V 72.3%E
HD CEO: We see no correlation in companies business as it relates to areas where Covid-19 cases are spiking - conf call comments
*(US) NOV NAHB HOUSING MARKET INDEX: 90 V 85E (record high)
(US) Atlanta Fed GDPNow raises Q4 GDP growth to 5.4% from 3.5%
(US) FDA: Lucira Health, Inc. Receives U.S. FDA Emergency Use Authorization (EUA) for Lucira COVID-19 All-In-One Test Kit, first COVID-19 Test for Self-Testing at Home (prescription required)
(US) Follow Up: Wayne County (most populous county in Michigan) board has unanimously voted to certify Nov vote (after 2-2 deadlock)

WEDS 11/18
*(UK) OCT CPI M/M: 0.0% V -0.1%E; Y/Y: 0.7% V 0.5%E
*(EU) EURO ZONE OCT FINAL CPI Y/Y: -0.3% V -0.3%E; CPI CORE Y/Y: 0.2% V 0.2%E
LOW Reports Q3 $1.98 v $1.97e, Rev $22.3B v $21.1Be
AAPL Announces App Store small business program from Jan 1st, 2021; Reduces App Store commission to 15% for small businesses (from 30%)
TGT Reports Q3 $2.79 adj v $1.61e, Rev $22.6B v $20.9Be; Lifts share buyback suspension and will resume in 2021; Guidance remains withdrawn
BA Formally granted FAA approval to resume Boeing 737 Max service (as expected)
*(US) OCT HOUSING STARTS: 1.530M V 1.460ME; BUILDING PERMITS: 1.545M V 1.568ME
(US) Trump campaign to file for recount in state of Wisconsin - Fox News
*(US) DOE CRUDE: +0.8M V +1ME; GASOLINE: +2.6M V -0.5ME; DISTILLATE: -5.2M V -1.5ME
(US) Atlanta Fed GDPNow raises Q4 GDP growth to 5.6% from 5.4%
GOOGL Plans to begin offering checking accounts with banks in updated Pay app
*(US) NEW YORK CITY SCHOOL SYSTEM WILL TEMPORARILY CLOSE TOMORROW, SAYS CHANCELLOR CARRANZA IN EMAIL TO PRINCIPALS - NYT
NVDA Reports Q3 $2.91 v $2.57e, Rev $4.73B v $4.42Be

THURS 11/19
FB Reportedly US state and federal antintrust lawsuits likely to challenge Facebook for buying Instagram & WhatsApp and weaponizing data - WaPo
*(TR) TURKEY CENTRAL BANK (CBRT) RAISES ONE-WEEK REPO RATE BY 475BPS TO 15.00%; AS EXPECTED
M Reports Q3 -$0.19 v -$0.81e, Rev $3.99B v $3.85B; says achieved positive EBITDA one quarter sooner than expected
*(US) INITIAL JOBLESS CLAIMS: 742K V 700KE; CONTINUING CLAIMS: 6.37M V 6.40ME
*(US) NOV PHILADELPHIA FED BUSINESS OUTLOOK: 26.3 V 23.0E
*(US) OCT EXISTING HOME SALES: 6.85M V 6.47ME
*(US) OCT LEADING INDEX: 0.7% V 0.7%E
GM To raise GM's financial commitment to EVs and AVs to $27B through 2025 (prior $20B); forecasts 40% of company's U.S. entries will be battery electric vehicles by end of 2025
JNJ Exec: expects to know COVID shot's efficacy in Jan or Feb - conf comments
(US) Treasury Sec Mnuchin sends letter to Fed's Powell requesting 90 day extension of Fed's Commercial Paper Funding Facility, Primary Dealer Credit Facility, Money Market Liquidity Facility, and Paycheck Protection Program Liquidity Facility
(US) Fed Bostic (dove, non-voter): Given where economy is, is prudent to keep emergency facilities open; Was a bit surprised by US Treasury decision [related to unused Fed stimulus funds]

FRI 11/20
*(UK) OCT RETAIL SALES (EX-AUTO/FUEL) M/M: 1.3% V 0.0%E; Y/Y: 7.8% V 5.9%E
ENX.FR Board approved purchase of Borsa Italiana: expects to complete the transaction in H1 of 2021
JPMorgan forecasts negative Q1 GDP (first Wall St bank to do so); expects bounceback in Q2 and Q3
(ZA) S&P cuts South Africa sovereign rating one notch to BB-; outlook Stable

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 Vaccine progress fuels speculation about post-Covid economy

2020-11-13T16:15:02.82

The week opened with a major bang after Pfizer and BioNTech announced their vaccine candidate against COVID-19 achieved success in the first interim analysis from a Phase 3 study, finding it to be more than 90% effective in preventing coronavirus. Immediately a historic risk on rally took flight. Pandemic-stricken sectors like travel and experiential entertainment saw money flood back in, at the expense of richly valued stay-at-home stocks that have fared so well in the current crisis. WTI crude jumped 10% helping drive significant flows into the energy complex. Treasury yields surged, highlighted by the 10-year moving back towards 1%, resulting in aggressive buying in the bank stocks, as well. Monday saw volatility collapse, US indices open at new all-time highs for the first time since February, and volumes explode with the NYSE running nearly 200% above its three month average.

The vaccine news set the stage for the rest of the week as markets largely pivoted around the notion that the time has come to start discounting a post pandemic landscape, juxtaposed with the current reality that virus infections are surging across much of the US and will likely necessitate localized, forced closures to stem the spread like this past spring. President Trump did not concede what he continues to describe as a rigged election even though more states were officially called in Biden’s favor and no evidence emerged of widespread vote tampering. The prospects for accomplishing anything during the lame duck session appeared bleak as neither the Republicans nor Democrats softened on their fiscal stimulus stances. Fed officials were out in force reiterating their view that additional fiscal help is imperative. Members of the Fed and ECB continued to call for more fiscal stimulus and emphasized they stand ready to do more if on the monetary front if necessary. By Friday’s close, WTI crude prices were holding above $40/bbl and the US 10-year edged away from a mid-week high above 0.97% which was the highest level since before the onset of the pandemic. For the week, S&P gained 2.2%, the DJIA added 4.1%, while the Nasdaq lost 0.6%.

In corporate news this week, with the height of earnings season in the rear-view mirror, Disney posted an EPS loss narrower than expected in its quarterly statement and reported its Disney+ streaming service has now hit 73M paid subscribers. DR Horton shares lifted after profits and revenue came in ahead of consensus, and the home-builder also saw a 50% jump in order growth in October. McDonalds notched beats on its top and bottom line and announced it was developing its own plant-based patty, justifiably dubbed the ‘McPlant,’ a product that Beyond Meat noted they had helped to develop. Southwest disclosed it has experienced a deceleration in improving revenue trends for November and December in recent weeks as coronavirus cases have risen. Apple at its product launch event confirmed its new Mac line will include the Apple-made M1 chip. Walmart launched a new pet care services division in a move to expand its full suite of animal offerings as dog and cat adoptions soar during the pandemic. EU antitrust regulators confirmed they would charge Amazon with distorting competition in online retail markets and said they would launch a second probe into its e-commerce business practices. The FAA reportedly is in the final stages of its Boeing 737MAX review and the aircraft could be approved by next week, though regulators will likely implement more fines against the aerospace giant going forward.


MON 11/9
(RU) Russia govt said to appoint Rushydro CEO Nikolai Shulginov as its new Energy Minister - press
PFE Pfizer and BioNTech announce vaccine candidate against COVID-19 achieved success in first interim analysis from Phase 3 study; Vaccine candidate was found to be more than 90% effective in preventing COVID-19 in participants without evidence of prior SARS-CoV-2 infection in the first interim efficacy analysis (at seven days after the second dose)
MU Ships World’s First 176-Layer NAND, Delivering A Breakthrough in Flash Memory Performance and DensityNew 3D NAND boosts storage capability across mobile, automotive, client and data center applications
BA US FAA in final stages of Boeing 737MAX review; Said to be set to approve 737MAX by 18th of Nov - press
TUES 11/10
*(DE) GERMANY NOV ZEW CURRENT SITUATION: -64.3 V -63.5E; EXPECTATIONS SURVEY: 39.0 V 44.3E
Medicago announces positive Phase 1 results for its COVID-19 vaccine candidate
DHI Guides Q1 Rev $5.4-5.6B v $5.21Be, gross margin ~23%, home sales 17.5-18K, - earnings call
(US) Supreme Court Justices Roberts and Kavanaugh appear to be reluctant to strike down entire Affordable Care Act - press
(US) Democratic challenger Cunningham concedes North Carolina Senate race to Republican Tillis - press
RKT Reports Q3 $1.21 v $1.03e, Rev $4,63B v $4.34Be; Approves $1B share buyback (2.3% of market cap)
WEDS 11/11
(UK) EU-UK negotiators said to likely miss the mid-Nov deadline to reach a trade agreement - financial press
(IN) India said to announce new $20B stimulus package this week; package to focus on stressed industries and boosting employment - press
(US) Georgia Sec of State reportedly set to announce hand recount in presidential race - press
Medicago Confirms Positive Phase 1 Results for Its COVID-19 Vaccine Candidate
THURS 11/12
SIE.DE Reports Q4 Net €1.76B v €1.7Be, Industrial Business EBITA €2.64B v €2.0Be, Rev €15.3B v €15.3Be
*(UK) Q3 PRELIMINARY GDP Q/Q: 15.5% V 15.8%E; Y/Y: -9.6% V -9.4%E
AZN.UK Announces COVID-19's CALAVI drug Phase II trial did not meet the primary endpoint of increasing the proportion of patients who remained alive and free of respiratory failure
700.HK Reports Q3 (CNY) Net 38.5B v 30.5Be, Rev 125.5B v 124.0Be; says overall China advertising activity appears to have largely returned to normal conditions
*(US) OCT CPI M/M: 0.0% V 0.1%E; CPI (EX-FOOD/ENERGY) M/M: 0.0% V 0.2%E; CPI NSA: 260.388 V 260.474E
*(US) INITIAL JOBLESS CLAIMS: 709K V 731KE; CONTINUING CLAIMS: 6.79M V 6.83ME
*(US) DOE CRUDE: +4.3M V -1ME; GASOLINE: -2.3M V 0ME; DISTILLATE: -5.4M V -1.5ME
(US) Fed Chair Powell: US recovery has been faster than expected, though it has slowed and has been uneven; next few months will be challenging
*(US) TREASURY $27B 30-YEAR BOND AUCTION DRAWS 1.680%; BID TO COVER 2.29 V 2.14 PRIOR AND 2.28 OVER LAST 4 AUCTIONS
(CN) Trump Administration said to have finalized Executive Order to ban US purchases or sales of securities in Chinese companies with links to the China military - press
*(US) OCT MONTHLY BUDGET STATEMENT:-$284B V -$275.0BE
DIS Reports Q4 -$0.20 v -$0.68e, Rev $14.7B v $14.3Be
(CN) Former China Fin Min Jiwei: Time to study the exit of monetary policy, not fiscal policy; Even if Biden is US President, US China trade frictions will not necessarily be eased - Caixin Summit
FRI 11/13
*(EU) EURO ZONE Q3 PRELIMINARY GDP Q/Q: 12.6% V 12.7%E; Y/Y: -4.4% V -4.3%E
MMM Reports Oct Rev $2.9B +3% y/y; organic Rev +2% y/y
*(US) OCT PPI FINAL DEMAND M/M: 0.3% V 0.2%E; Y/Y: 0.5% V 0.4%E
(US) Fed’s Bullard (non-voter): downside risks to the US economy "remain substantial"; monetary and fiscal policy have been "very effective"
(US) NOV PRELIMINARY UNIVERSITY OF MICHIGAN CONFIDENCE: 77.0 V 82.0E
(US) NYC Mayor de Blasio: People should prepare for potential school closures; parents should have a plan for the rest of the month of November, beginning as early as Monday

Markets unfazed by US election drama

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Weekly Market Update: Markets unfazed by US election drama

2020-11-06T16:03:37.783

As advertised it was a wild week of trade around the US election as stock markets looked to bounce back from last week’s drubbing. Equity futures swung violently into the early morning hours on Wednesday before global risk-on flows gathered momentum ahead of the US open. Votes were still being tallied across key battleground states, but relatively quickly markets appeared to embrace a narrative that the Senate would likely stay in the hands of the Republicans by a narrow margin, and VP Biden was getting enough late support to overtake President Trump’s leads in key swing states to eventually win the Electoral College. US stock markets surged Wednesday and Thursday and the VIX index plunged after running up to 40 last week. After spiking on election eve, Treasury yields dropped aggressively, perhaps on the notion that a large, sweeping fiscal stimulus package will be more difficult to attain given the expected congressional composition. Vote counting continued into Friday and with two run-off Georgia Senate elections not slated until January, and Trump’s apparent desire to mount various legal challenges contesting the election results, it may be some time before the US political landscape is confirmed.

Outside of election headlines, the pandemic continued with Covid case counts rising to new daily records in the US and EU, with many European nations taking additional lockdown measures to fight the virus spread. Third quarter earnings reports continued to come in generally much stronger than analysts had expected. US economic data was also encouraging with the October ISM data hitting its highest level in more than two years, while the October jobs report revealed sharp declines in both the unemployment and underemployment rates. The BOE met and delivered more stimulus as promised ahead an FOMC press conference where Chairman Powell looked to reassure markets by noting Fed officials discussed various ways they could offer additional stimulus going forward should things deteriorate. Gold prices slipped, bitcoin surged to two year highs above $15K, and the US dollar fell to a two month low. For the week, the S&P rebounded 7.3%, the DJIA gained 6.9%, and the Nasdaq surged 9%.

In corporate news this week, GM reported Q3 EPS that blew away estimates amid a 15% EBIT margin and robust truck sales. Qualcomm shares lifted after it beat on the top and bottom line, guiding FY21 handsets significantly higher year-over-year. PayPal earnings came in above consensus while its account and total payment volume growth hit multi-year highs. Costco notched 14% same store sales growth in October as the pandemic continued to boost in-person and online shopping. China halted Ant Group’s planned $34B stock debut in Shanghai and Hong Kong, citing the need to maintain regulation in the fintech industry, and the IPO could face a six-month delay. Inspire Brands confirmed it would enter merger agreement to acquire Dunkin’ Brands for $11.3B in cash, adding the coffee chain to its roster of other casual eateries. In the California election, the Uber- and Lyft-backed Proposition 22 passed easily, allowing drivers to remain as independent contractors and boosting the shares of the ride-share leaders. Other US states granted various degrees of legalization to cannabis sales, leading to a rally in the pot-related stocks.


SUN 11/1
(HK) Macau Oct Casino Rev (MOP): 7.3B v 2.2B prior; Y/Y: -72.5% v -90.0% prior

MON 11/2
*(IT) ITALY OCT MANUFACTURING PMI: 53.8 V 53.7E (4th month of expansion and highest since Mar 2018)
(DE) German Chancellor Merkel: Facing a difficult winter with an aggressive virus; will likely have to limit contacts between people in private for ALL winter months; Light at the end of the tunnel is very far away
*(US) OCT ISM MANUFACTURING: 59.3 V 56.0E (highest since Aug 2018); PRICES PAID: 65.5 V 61.5E
(US) Treasury quarterly financing estimates: to borrow $617B in Oct-Dec quarter v $550-600Be (prior estimate to borrow $1.216B)
(AU) RESERVE BANK OF AUSTRALIA (RBA) CUTS CASH RATE TARGET BY 15BPS TO 0.10%; LOWERS 3-YEAR YIELD TARGET BY 15BPS TO 0.10%; BOTH AS EXPECTED; Announces new A$100B bond buying program of 5 and 10 year maturities
992.HK Reports Q2 Net $310M v $202.2M y/y, Op $565M v $441.7M y/y Rev $14.5B v $13.5B y/y

TUES 11/3
6688.HK Shanghai Stock Exchange reportedly suspends Ant Group's IPO - press (update)
(IN) India RBI said to explore increasing Gold and dollar buying in order to further diversify FX reserve investments - press
6688.HK Hong Kong IPO of Ant Group has also been suspended
(SA) Saudi Arabia and others in OPEC reportedly considering deeper cuts amid oil turmoil; further cuts among several possibilities being considered - press
LPX Overall, expect Q4 to look a lot like Q3 - earnings call comments

WEDS 11/4
*(FR) FRANCE OCT FINAL PMI SERVICES: 46.5 V 46.5E (confirms 2nd straight contraction)
*(DE) GERMANY OCT FINAL PMI SERVICES: 49.5 V 48.9E (confirms 1st contraction in 4 months)
*(EU) EURO ZONE OCT FINAL PMI SERVICES: 46.9 V 46.2E (confirms 2nd straight contraction)
*(UK) OCT FINAL PMI SERVICES: 51.4 V 52.3E (confirms 4th month of expansion)
*(US) OCT ADP EMPLOYMENT CHANGE: +365K V +650KE; Significant slowdown in Manufacturing gains
*(US) OCT FINAL MARKIT PMI SERVICES: 56.9 V 56.0E
*(US) OCT ISM SERVICES INDEX: 56.6 V 57.5E
*(US) DOE CRUDE: -8.0M V +1ME; GASOLINE: +1.5M V -1ME; DISTILLATE: -1.6M V -2.5ME
(US) Trump campaign manager Stepien: plan to immediately request a recount in Wisconsin; irregularities have been reported in several counties in that state
(US) Trump campaign files suit in Michigan to halt counting of ballots - press
(US) Trump campaign to file two legal challenges in PA around poll observers and voter ID rules
COST Reports Oct SSS +14.4% v +11.6%e

THURS 11/5
MT.NL Reports Q3 Net -$0.3B v -$0.5B y/y, EBITDA $901M v $1.06B y/y, Rev $13.3B v $16.6B y/y
*(UK) BANK OF ENGLAND (BOE) LEAVES INTEREST RATES UNCHANGED AT 0.10%; AS EXPECTED
*(UK) BOE RAISES TOTAL ASSET PURCHASE PROGRAM (APT) BY £150B TO £895B; NOT EXPECTED; indicates ready to increase QE again if functioning worsens
AZN.UK Reports Q3 Core EPS $0.94 v $1.00e, Rev $6.58B v $6.65Be
(UK) BOE Gov Bailey: Believed there is value in acting quickly and strongly to support the economy with asset purchases -post rate decision press conference
GILD Remdesivir shows superior to placebo in shortening time to recovery in adults hospitalized with COVID-19 - New England Journal of Medicine
FAST Reports Oct net sales $488.2M -3.9% y/y
GM Reports Q3 $2.83 v $1.47e, Rev $35.5B v $38.0Be
*(US) Q3 PRELIMINARY NONFARM PRODUCTIVITY: 4.9% V 5.6%E; UNIT LABOR COSTS: -8.9% V -11.0%E
(US) Pres Trump tweets: "STOP THE COUNT!...ANY VOTE THAT CAME IN AFTER ELECTION DAY WILL NOT BE COUNTED!"
(US) Pres Trump tweets: will challenge election results in 'Biden claimed states', alleging voter fraud and election fraud
(US) Second Georgia Senate race now likely to go to runoff as Sen Perdue falls below 50% threshold
*(US) FOMC LEAVES TARGET RANGE UNCHANGED BETWEEN 0.00-0.25%; AS EXPECTED; REMAINS COMMITTED TO USING FULL RANGE OF TOOLS TO SUPPORT ECONOMY; TO CONTINUE BOND BUYING AT LEAST AT CURRENT PACE
7203.JP Reports H1 Net ¥629.4B v ¥1.3T y/y; Op ¥520B v ¥1.4T y/y; Rev ¥11.4T v ¥15.3T y/y; Raises Dividend to ¥105/shr v ¥100/shr prior

FRI
(US) Presidential candidate Joe Biden said to now have the lead in Georgia vote count by almost 1,000 - financial press
*(US) OCT UNEMPLOYMENT RATE: 6.9% V 7.6%E
*(US) OCT AVERAGE HOURLY EARNINGS M/M: 0.1% V 0.2%E; Y/Y: 4.5% V 4.5%E; AVERAGE WEEKLY HOURS: 34.8 V 34.7E
(US) Joe Biden takes lead in Pennsylvania by 5,587 votes; NBC declares Joe Biden 'President Elect'
(US) SEPT FINAL WHOLESALE INVENTORIES M/M: 0.4% V -0.1%E
(US) SEPT CONSUMER CREDIT: $16.2B V $7.8BE
(US) Trump campaign spokesperson: This election is not over; We've said all legal ballots must be counted and all illegal ballots must not be counted; We'll pursue this process through every aspect of the law

Markets brace for a bumpy ride in the next few weeks

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Weekly Market Update: Markets brace for a bumpy ride in the next few weeks

Fri, 23 Oct 04:10 PM EST/09:10 PM GMT

The week began with some renewed optimism related to US fiscal stimulus talks causing stocks to be bid up. The Russell 2000 exhibited relative strength as the week progressed while the Nasdaq lagged. Earnings season continued on with nearly a quarter of the S&P500 reporting. Revenue and earnings beats remained largely the norm, but investors focused more on exogenous factors like the disjointed US fiscal stimulus talks, the growing 2nd and 3rd waves of the coronavirus pandemic and the upcoming US election. Thursday night saw the final presidential debate, but 50M voters have already cast their ballots early, diminishing any impact of the debate. Ultimately the chances of a fiscal stimulus deal being enacted before the November election appeared nonexistent, despite the rhetoric from both sides about inching closer. Amid those diminished prospects and new daily highs for Covid-19 infection rates across Europe and in various states here, US stocks moved modestly lower.

September housing starts saw good growth in the single family segment, while the NAHB housing market index hit a new record high and September US existing homes sales reached the highest level since 2006. US rates backed up with Treasury yields traded up to levels not seen since early June. The curve stepped as well with the 2-10 year spread approaching 80 bps. The Euro rose following record investor demand for the EU’s first issuance of social bonds and on news Brexit negotiations will resume with the aim of reaching a deal next month. Bitcoin jumped to fresh one-year highs alongside strength in precious metals after PayPal announced a new service enabling users to buy, hold, and sell cryptocurrency. For the week, the S&P slipped 0.5%, the DJIA lost 0.9%, and the Nasdaq was down 1.1%.

In corporate news this week, tech earnings season kicked off on a sour note, as Intel and Netflix both were routed after reporting their quarterly results. Intel posted a surprise drop in its data center group and saw margins contract amid the move to cheaper chips. Netflix missed expectations broadly as its subscriber growth slowed again. IBM cloud growth disappointed as the tech giant notched its lowest quarterly revenue in over 20 years. Enthusiasm for Tesla was reinvigorated following strong Q3 results and a plethora of analyst upgrades. Snap reported a surprise profit, with its revenue easily topping forecasts, helped by a surprise jump in ad dollars. The Justice Department filed an antitrust lawsuit against Google in federal court, joined by 11 Republican state attorneys general, accusing the search provider of locking up deals with mega-cap partners like Apple and limiting overall competition. In a flurry of M&A in the Permian Basin, ConocoPhillips announced it would buy Concho Resources and Parsley Energy agreed to be acquired by Pioneer Natural Resources, both in all-stock deals.


SUN 10/18
*(CN) CHINA Q3 GDP Q/Q: 2.7% V 3.3%E; Y/Y: 4.9% V 5.5%E

MON 10/19
CXO ConocoPhillips confirms acquisition of Concho Resources in all-stock transaction for a fixed ratio of 1.46shrs of CP common stock (enterprise valued at ~$60B)
*(US) OCT NAHB HOUSING MARKET INDEX: 85 V 83E (highest on record)
INTC Reportedly close to deal to divest NAND memory chip unit to SK Hynix in potential $10B sale; could be finalized by Monday - press
IBM Reports Q3 $2.58 adj v $2.55e, Rev $17.6B v $17.6Be
BHP.AU Reports Q1 Waio Iron Ore Production: 74Mt v 69Mt y/y, Copper Production 413 Kt v 394Kte
INTC Hynix confirms to purchase Intel's NAND flash-memory manufacturing business for KRW10.3T (~$9.0B) in all cash transaction (the transaction was speculated to be $10.0B)

TUES 10/20
(US) NY Fed Head of Markets Group Singh: In scenario of significant market stress, Fed could buy both bonds and ETFs
AZN Reportedly Covid-19 trial in the US to resume this week following review by the FDA of a serious illness - press
GOOGL DOJ confirms filing antitrust suit against Google in federal court today on search market dominance, joined by 11 state AGs
CP Reports Q3 C$4.12 v C$4.22e, Rev C$1.86B v C$1.87Be
*(US) SEPT HOUSING STARTS: 1.42M V 1.47ME; BUILDING PERMITS: 1.55M V 1.520ME
PG Reports Q1 $1.37 v $1.43e, Rev $19.3B v $18.3Be; Raises FY21 buyback view by $1B (0.2% of market cap)
UBSG.CH Reports Q3 Net $2.1B v $1.56Be y/y; Rev $8.94B v $7.73Be, To propose cash dividend in Apr 2021

WEDS 10/21
*(UK) SEPT CPI M/M: 0.4% V 0.5%E; Y/Y: 0.5% V 0.6%E
(UK) EU Brexit Negotiator Barnier: Reiterates that EU stance on Brexit will not change; to continue to look for a deal but it must reflect a balance compromised
VZ Reports Q3 $1.25 v $1.22e, Rev $31.5B v $31.6Be
PYPL Launches new service enabling users to Buy, Hold and Sell Cryptocurrency
VZ CFO: expect to see cost cuts beyond $10B - earnings call comments
*(US) DOE CRUDE: -1.0M V -1ME; GASOLINE: +1.9M V -1.5ME; DISTILLATE: -3.8M V -1.5ME; Utilization: 72.9% v 75.8%e
(US) Association of American Railroads weekly rail traffic report for week ending Oct 17th: 518.8K, +2.2% y/y
*(US) FEDERAL RESERVE BEIGE BOOK: ECONOMIC ACTIVITY CONTINUED TO INCREASE ACROSS ALL DISTRICTS, WITH THE PACE OF GROWTH CHARACTERIZED AS SLIGHT TO MODEST IN MOST DISTRICTS

THURS 10/22
KO Reports Q3 $0.55 v $0.45e, Rev $8.7B v $8.35Be
*(US) INITIAL JOBLESS CLAIMS: 787K V 870KE; CONTINUING CLAIMS: 8.37M V 9.63ME
*(US) SEPT EXISTING HOME SALES: 6.54M V 6.30ME (highest level since 2006)
*(US) SEPT LEADING INDEX: 0.7% V 0.6%E
CNX Reportedly EQT Corp is seeking to acquire CNX - press
INTC Reports Q3 $1.11 v $1.10e, Rev $18.3B v $18.2Be; To complete $2.4B share buyback when market stabilizes

FRI 10/23
DAI.DE Reports final Q3 Net €2.18B v €1.81B y/y; adj EBIT €3.48B v €3.48B prelim; Rev €40.3B v €43.3B y/y
*(UK) SEPT RETAIL SALES (EX-AUTO/FUEL) M/M: 1.6% V 0.5%E; Y/Y: % V 5.0%E
*(FR) FRANCE OCT PRELIMINARY MANUFACTURING PMI: 51.0 V 51.0E (2nd month of expansion)
*(DE) GERMANY OCT PRELIMINARY MANUFACTURING PMI: 58.0 V 55.0E (4th straight expansion and highest reading since Apr 2018)
*(EU) EURO ZONE OCT PRELIMINARY MANUFACTURING PMI: 54.4 V 53.0E (4th month of expansion and highest reading since Aug 2018)
*(UK) OCT PRELIMINARY MANUFACTURING PMI: 53.3 V 53.1E (5th straight expansion)
- (LY) Libya National Oil Company says force majeure lifted on Ras Lanuf and Es Sider ports
AZN FDA reportedly allowing resumption of US Phase 3 trial for AstraZeneca COVID-19 vaccine – press
JNJ Covid-19 vaccine trial said to resume shortly - press
BA FAA determines a 2019 software fix for several Boeing 747 passenger and cargo planes was inadequate; Boeing to develop a new fix; faulty software did not result in any accidents - press

Hopes for vaccines and government deals fend off concerns about new global pandemic wave

TradeTheNews.com 

Weekly Market Update: Hopes for vaccines and government deals fend off concerns about new global pandemic wave

Fri, 16 Oct 04:17 PM EST/09:17 PM GMT

Stocks rose out of the gate this week looking past rising coronavirus infection rates globally. Stay-at-home stocks continued to outperform the broader market, helped in part by fresh lockdown measures in several European nations intended to mitigate the spread of COVID-19 hotspots. Earnings season kicked off, with most of the mega banks topping earnings estimates, albeit largely on lower provisions for loan losses rather than an improving lending landscape. The US dollar moved up against the Chinese Yuan after officials in China took note of the recent strength when the PBOC cut the its FX risk reserve ratio, effectively making it easier to short the Yuan.

By midweek investors risk appetite receded. Worries surrounding forced closures in Europe alongside continued stalemates on both the Brexit and US fiscal stimulus fronts weighed on sentiment. The German 10-year government yield fell to its lowest level since March amid a chorus of ECB officials highlighting their growing concerns about too-low inflation. US inflation data largely met expectations, but CPI last month was clearly buoyed by rising used car prices and not much else. Stocks rebounded into the tail end of the week helped in part by hopes that a US coronavirus vaccine approval was getting closer. US economic data was also positive, headlined by a strong September retail sales report. For the week, the S&P gained 0.2%, the DJIA edged up 0.1%, and the Nasdaq rose 0.8%.

In corporate news this week, as earnings season kicked off, United Airlines reported a wider than anticipated Q3 profit loss, though it was able to reduce its cash burn to $25M/day from $40M/day in Q2. Delta reiterated it expects to reach breakeven by spring 2021, and noted it’s seeing ‘good bookings’ for Thanksgiving and Christmas. Fastly cut its outlook, citing regulatory pressure on its biggest customer, TikTok, as a headwind. Hewlett Packard Enterprises shares jumped after providing upbeat guidance at its analyst day. Both J&J and Lilly halted key coronavirus studies this week due to trial safety concerns. Traton reached an agreement in principle to acquire the remaining shares of Navistar at $44.50/share, though the deal is still subject to finalization of due diligence. Disney announced a major strategic reorganization of its media and entertainment businesses with the aim of bolstering its streaming platforms, Disney+, ESPN+, and Hulu. The FCC said it will 'move forward' on Section 230 rulemaking changes and Republicans in Congress called for big tech CEOs to testify after Twitter blocked recirculation of a New York Post article regarding Hunter Biden's Ukraine connections.

SUN 10/11
(CN) China PBOC to cut the FX risk reserve ratio to 0% [from 20%], effective from Monday (Oct 12th); The move relates to certain FX forwards trading by financial firms - financial press
(CN) China President Xi to visit Shenzhen this week [on Oct 14th]; Shenzhen to ease foreign investment entry limit related to high technology; China to support digital yuan trial in Shenzhen - SCMP

MON 10/12
(UK) Strict national lockdown may be the next step taken by UK Government - press
(US) Reportedly White House seeks Congressional approval for three separate arms packages to Taiwan
DIS Announces strategic reorganization of media and entertainment businesses
JNJ Coronavirus vaccine study has been halted due to unexplained illness in one of its participants - press

TUES 10/13
MAERSKB.DK Issues Q3 trading update: prelim Adj EBITDA $2.4B v $1.66B y/y, Rev $9.9B v $10.1B y/y; Raises FY20 outlook
*(DE) GERMANY OCT ZEW CURRENT SITUATION SURVEY: -59.5 V -60.0E; EXPECTATIONS SURVEY: 56.1 V 72.0E
JPM Reports Q3 $2.92 v $2.35e, Managed Rev $29.9B v $28.6Be; Extends buyback suspension at least through Q4
FAST Reports Sep net sales $478.6M +7.3% y/y
*IMF UPDATES ITS WORLD ECONOMIC OUTLOOK (WEO)
*(US) SEPT CPI M/M: 0.2% V 0.2%E; CPI (EX-FOOD/ENERGY) M/M: 0.2% V 0.2%E; CPI NSA: 260.280 V 260.285E
DAL Reports Q3 -$3.30 v -$3.10e, Rev $2.65B v $3.09Be
LLY Lilly monoclonal antibody trial has been paused due to safety concerns - press
VZ CEO appears at the Apple 5G event; Verizon to double its fastest 5G wideband network launch across 1,800 US cities effective today

WEDS 10/14
BAC Reports Q3 $0.51 adj v $0.53e, Rev $20.3B v $20.6Be
(AT) ECB's Holzmann: More extensive containment measures likely to require more monetary and fiscal accommodation in the short run - financial press
*(US) SEPT PPI FINAL DEMAND M/M: 0.4% V 0.2%E; Y/Y: 0.4% V 0.2%E
(US) Association of American Railroads weekly rail traffic report for week ending Oct 10th: 520.5K, +1.9% y/y
(FR) France govt declares public health state of emergency beginning Saturday - Sky News
FSLY Cuts Q3 Rev $70.0-71M v $75Me (prior $73.5-75.5M), cites lower usage by TikTok
AA Reports Q3 -$1.17 v -$1.51e, Rev $2.37B v $2.22Be
UAL Reports Q3 -$8.16 v -$7.63e, Rev $2.49B v $2.57Be
Twitter and Facebook have limited user access to posts that linked to NY Post report that alleged Biden met with Ukrainian energy execs

THURS 10/15
ROG.CH Reports Q3 (CHF) Rev 14.7B v 15.4Be; Expects further dividend increase in 2020
2330.TW Reports Q3 (NT$) Net 137.3B v 124.9Be; Op 150B v 107.9B y/y; Rev 356.4B v 293.0B y/y
Guides Q4 Rev $12.4-12.7B; Gross Margin 51.5-53.5%; Forecasts based on NT$28.75/USD
(DE) Germany 10-year govt yield at -0.61% (lowest level since March)
*(US) OCT EMPIRE MANUFACTURING: 10.5 V 14.0E
*(US) INITIAL JOBLESS CLAIMS: 898K V 825KE; CONTINUING CLAIMS: 10.02M V 10.55ME; highest level of initial claims since Aug; California jobless claims remain frozen at prior level
*(US) OCT PHILADELPHIA FED BUSINESS OUTLOOK INDEX: 32.3 V 14.8E
*(US) DOE CRUDE: -3.8M V -2ME; GASOLINE: -1.6M V -1.5ME; DISTILLATE: -7.2M V -2ME
(US) FCC Chair Pai: FCC will 'move forward' on Section 230 with rulemaking to clarify its meaning; FCC general counsel has said agency has legal authority to interpret Section 230
DAI.DE Reports prelim Q3 adj EBIT €3.48B v €2.50Be; Expects a positive impact for the remainder of the year
HPE Guides initial FY21 $1.56-1.76 v $1.49e, FCF to grow at a 3-year CAGR of over 50% between FY20 and FY23
RIO.AU Reports Q3 Pilbara iron ore production 86.4Mt v 87.3Mt y/y; iron ore shipments 82.1Mt v 86.1Mt y/y
TWTR Twitter Lawyer Vijaya Gadde Tweets: Twitter will no longer remove hacked content unless directly shared by hackers or those acting in concert with hackers
(US) Pres Trump confirms he owes debts to 'normal banks' related to mortgages - debate comments

FRI 10/16
*(US) SEPT ADVANCE RETAIL SALES M/M: 1.9% V 0.8%E; RETAIL SALES (EX-AUTO) M/M: 1.5% V 0.4%E
(UK) PM Johnson: Prepared for no-deal exit and move to an Australia style deal; Still willing to discuss practicalities with EU - financial press
*(EU) EURO ZONE SEPT FINAL CPI Y/Y: -0.3% V -0.3%E; CPI CORE Y/Y: 0.2% V 0.2%E
BA EU regulator EASA: Boeing 737 Max is safe, may return in 2020
PFE CEO: Could apply for emergency use of COVID-19 vaccine in late Nov (prior early Oct) - open letter
(US) Weekly Baker Hughes Rig Count: 282 v 269 w/w (+5% w/w)

Hope still alive for stimulus and Brexit deals

TradeTheNews.com 

Weekly Market Update: Hope still alive for stimulus and Brexit deals

2020-10-09T16:03:38.88

Stock markets forged higher this week despite a rising second wave of coronavirus infections globally. President Trump’s condition appeared to improve dramatically thanks to, in his opinion, a promising new antibody treatment which he described as a “cure.” Trump is set to resume attending campaign events next week. The drama in DC was not just confined to intrigue surrounding Trump’s Covid diagnosis but also the fate of a second fiscal stimulus package. Sentiment seesawed following a series of tweets from the President who called off the talks on Tuesday, only to do a complete reversal by Friday calling on negotiators to go big and find a much larger aid package than either side of Congress is currently offering. Regardless of the mixed signals coming out of Washington, markets and investors alike appear to holding out hope some sort of aid deal can be reached in the neighborhood of a $2T package.

Brexit talks continued but progress remained extremely limited ahead of next week’s UK-imposed EU summit deadline. Both sides agreed to intensify talks yet again, but the fisheries issue remains a key stumbling block. EU and French PMI services data fell back into contraction territory for the first time in several months while US weekly jobless claims remained elevated above 800K. The squishy data was reflected in a deluge of dovish remarks from central bank speakers. For example, Fed Chairman Powell reiterated that the FOMC was nowhere near worrying about overdoing it on the stimulus side given the current outlook. Treasury yields still managed to drift higher, helped in large part by another historic dose of coupon supply. The Greenback lost ground late in the week and WTI crude futures recouped a good portion of the recent weakness seen coming into the week. For the week, the S&P gained 3.8%, the DJIA rose 3.3%, and the Nasdaq added 4.6%.

In corporate news this week, Domino’s saw sales jump but pandemic-related costs crimp profits, sending shares lower. Levi’s blew away estimates and guided above consensus as its online sales surged. Morgan Stanley announced it would acquire investment manager Eaton Vance for $56.50/share in a $7B deal as the banking giant moves to buy up another fee-based business, following its E-Trade acquisition earlier this year. Bristol Myers Squibb agreed to pay $225.00/share in cash for Myokardia, in a deal valued at $13.1B, in order to acquire its pipeline of cardiovascular drugs. AMD reportedly is in late-stage talks to acquire Xilinx for over $30B, a deal that would be only the latest M&A in a rapidly consolidating sector. On the energy front, Fuelcell disclosed an $8M award from the Department of Energy to advance the commercialization of its solid oxide electrolysis high efficiency hydrogen generation technology.


MON 10/5
AIR.FR COO: Outlook for the aviation industry deteriorated again; expects at least 15,000 job cuts - press
CINE.UK Confirms to suspend operations at 536 theaters in US and 127 theaters in UK from Thursday, Oct 8th
*(FR) FRANCE SEPT FINAL SERVICES PMI: 47.5 V 47.5E (confirms 1st contraction in 4 months and lowest reading since May 2020)
*(DE) GERMANY SEPT FINAL SERVICES PMI: 50.6 V 49.1E (3rd month of expansion but lowest since June 2020)
*(EU) EURO ZONE SEPT FINAL SERVICES PMI: 48.0 V 47.6E (confirms 1st contraction in 3 months)
*(UK) SEPT FINAL SERVICES PMI: 56.1 V 55.1E (confirms 3rd month of expansion)
MYOK Confirms to be acquired by Bristol Myers Squibb for $225.00/shr in cash valued at $13.1B
*(US) SEPT FINAL MARKIT SERVICES PMI: 54.6 V 54.6E
(US) Said that the US House Panel will propose a break up of the US tech giants - press
*(US) SEP ISM SERVICES INDEX: 57.8 V 56.2E

TUES 10/6
(EU) EU Commission to allow budget rules to remain suspended in 2021 - financial press
(NO) Norway Central Bank (Norges) Gov Olsen: Reiterates stance that willing to contemplate negative interest rates if financial markets are hit by a renewed wave of turmoil
(EU) ECB chief Lagarde: Reiterates stance that recovery is bumpy and uneven; prepared to add more monetary support, including cutting a key rate further below zero - CEO Summit comments
(US) Fed's Bullard (non-voter): Does not expect Fed to change policy stance through 2021; US Q3 GDP growth of 30% likely
*(US) PRESIDENT TRUMP: I HAVE DIRECTED REPUBLICANS TO STOP NEGOTIATING ON FISCAL STIMULUS UNTIL AFTER THE ELECTION
(US) House Antitrust Subcommittee Democratic report seeks break-up of giant internet platforms; calls for sweeping antitrust reforms for big tech
(US) Fed's Mester (FOMC voter): disappointed that fiscal talks have been halted; timing of fiscal stimulus is less important than approving a package; recovery will continue but it will be slower - CNBC interview

WEDS 10/7
(UK) UK intends to leave Brexit trade talks if there's no deal seen by Oct 15th, according to source familiar with UK Brexit position - press
*(US) DOE CRUDE: +0.5M V -1ME; GASOLINE: -1.4M V -1ME; DISTILLATE: -1.0M V -1ME
(US) Association of American Railroads weekly rail traffic report for week ending Oct 3rd: 518.8K, +0.8% y/y
*(US) AUG CONSUMER CREDIT: -$7.2B v +$14.0Be
C Fed announces enforcement action against Citigroup that requires the firm to correct several longstanding deficiencies; cease and desist order requires Citigroup to enhance its firm-wide risk management and internal controls
(US) Pres Trump tweets recorded video message: says Regeneron antibody drug was 'the key' to feeling good again; mentions similar Lilly treatment being developed; wants Regeneron and Lilly drugs to be available free to Americans
005930.KR Reports Q3 prelim (KRW) Op 12.3T v 10.5Te, Rev 66.0T v 64.1Te (62.0T y/y)

THURS 10/8
066570.KR Reports Q3 prelim (KRW) Op 959.0B v 781.1B y/y, Rev 16.9T v 15.7T y/y
IBM To spin-off Managed Infrastructure Services Unit; Guides Q3 adj $2.58 v $2.55e, Rev $17.6B v $17.6B v $17.6Be
(DE) German Bundesrat (upper house) approves tax raise on greenhouse emission - press
(US) President Trump: feeling perfect; he will not participate in virtual debate against Biden following earlier Commission recommendation - Fox News interview
*(US) INITIAL JOBLESS CLAIMS: 840K V 820KE; CONTINUING CLAIMS: 10.98M V 11.40ME
(CN) Pres Trump: I plan to use tariffs on China in a second term - Fox Business interview
(US) Treasury Sec Mnuchin reportedly floated the idea of restarting stimulus talks with Speaker Pelosi - Politico
(CN) SEC Chair Clayton: Directed staff to actively consider Trump's working group recommendations to strengthen protections for investors from EM risks, including investments in US-listed Chinese firms
(US) House Speaker Pelosi: there is no standalone airline bill without a bigger aid plan
*(US) TREASURY $23B 30-YEAR BOND REOPENING DRAWS 1.578%; BID TO COVER 2.29 V 2.31 PRIOR
(US) Pres Trump reportedly indicated he was worried by stock market reaction to his tweet calling off coronavirus relief talks; told House Min Leader McCarthy that he wanted a "big deal" with Speaker Nancy Pelosi - Axios
XLNX Speculated that co. is in advanced talks to be acquired by AMD, the deal could be worth over $30.0B [vs Xilinix's closing market cap of ~$25.9B] - US financial press

FRI 10/9
*(UK) AUG MONTHLY GDP M/M: 2.1% V 4.6%E
FCEL Discloses $8M DoE award to advance the demonstration and commercialization of FuelCell Energy’s solid oxide electrolysis high efficiency hydrogen generation technology
(US) Aug Final Wholesale Inventories M/M: 0.4% v 0.5%e

Markets stay calm despite US stimulus deadlock and Trump testing Covid positive

TradeTheNews.com 

Weekly Market Update: Markets stay calm despite US stimulus deadlock and Trump testing Covid positive

2020-10-02T16:15:24.463

Trade commenced this week amid renewed hopefulness regarding US fiscal stimulus talks which came alongside several M&A announcement. A pronounced rebound in European banks also gained traction following a report Ping An acquired more shares of HSBC. Tuesday saw all eyes turn to the election in what could best be described as a wild, chaotic and decidedly unpresidential first debate. What was viewed by many as a poor showing for each candidate, appeared to result in little change in trajectory heading into next month’s vote. Focus quickly shifted back to DC, where, as the week progressed, hope waned that Treasury Secretary Mnuchin and House Speaker Pelosi would be able to bridge a roughly $700B gap and find a way to a fiscal stimulus package compromise. Thursday evening the Democrats went ahead and pushed their $2.2T stimulus package through the House. Airlines did get a little boost on Friday as Pelosi said she was open to a separate deal to resume support for industry payrolls.

Ultimately Tuesday’s Presidential debate might just be the only one to occur after Friday’s bombshell announcement that the President and First Lady had tested positive for Covid-19, along with several other White House personnel. Initial reports indicated President Trump’s symptoms were mild but the news sent shockwaves through Washington and the nation. It also somewhat overshadowed a mixed September jobs report. Payroll figures missed expectations but the unemployment rate fell more than expected and the previous month’s job gains were revised higher. Particularly worrying though was the number of long-term unemployed (those jobless for 27 weeks or more), which increased by 781K to 2.4M, the single largest monthly increase since they started keeping records in 1948. For the week the S&P gained 1.5%, the DJIA added 1.9%, and the Nasdaq was up 1.5%.

In corporate news this week, airlines gained back some of their losses for the week after Speaker Pelosi said the House will pass standalone legislation to keep airline workers on payroll even if there is no broader agreement with the White House on COVID-19 relief, though any action by the House has been pushed to next week. Micron Q1 guidance disappointed, pushing shares lower, and the company couldn’t put a date on when it could sell to Huawei again. Bed Bath and Beyond posted a surprise blowout earnings number and notched its first comp sales gain since 2016 as it saw an upswing in e-commerce sales. Tesla reported a company record number of deliveries in Q3, setting the pace to reach its planned 500K total for the full year. Disney announced plans to cut 28K US theme park positions, 67% of which are part-time employees, as its California theme parks experience prolonged closures. Duke Energy reportedly rejected a takeover approach from NextEra Energy, though Next Era was said to still be interested in making a deal and Duke could be open to more discussions. Apollo's Covis reached an agreement to acquire AMAG Pharmaceuticals, which focuses on ‘underrecognized health conditions,’ at $13.75/share in cash, valuing it at $647M. Ford named John Lawler as CFO, effective immediately, as the auto industry enters the high-demand autumn selling season. Molson Coors signed an exclusive agreement with Coca-Cola to launch Mexico’s Topo Chico brand as a new hard seltzer product in the US.


SUN 9/27
981.HK US has imposed restrictions on exports to SMIC, the move by the US government said to be not as severe as blacklisting the co. - financial press
5.HK Ping An Insurance (largest shareholder) raised stake to 8% from 7.95%, purchased an additional 10.8M H-shares - update
MON 9/28
(US) White House plans to announce shipments of millions of rapid Covid tests to the states in an effort to get them to reopen schools - press
(UK) EU negotiators said to have indicated it was prepared to start writing a joint legal text of a post Brexit trade agreement with the UK - UK press
TUES 9/29
*(EU) EURO ZONE SEPT ECONOMIC CONFIDENCE: 91.1 V 89.0E
*(DE) GERMANY SEPT PRELIMINARY CPI M/M: -0.2% V -0.1%E; Y/Y: -0.2% V 0.0%E
*(US) SEPT CONSUMER CONFIDENCE: 101.8 V 90.0E
(UK) Reportedly the UK has sent 5 new trade deal drafts to the EU in an effort to reach a breakthough in talks
(US) Dallas Fed Aug Texas Service Sector Outlook Survey: General Business Activity: 11.5 v 4.7 prior
(US) NYC test positivity rate registers at 3% today (tripling over last few days); if it remains at 3% for 7 days, all public schools close - press
(US) DOJ Antitrust Chief Delrahim: we are looking at controversy around data feeds from exchanges and data pricing - press interview
REGN REGN-COV2 Antibody Cocktail reduced Viral Levels and improved symptoms in Non-Hospitalized COVID-19 Patients in seamless Phase 1/2/3 trial
MU Reports Q4 $1.08 v $1.00e, Rev $6.06B v $5.91Be
*(CN) CHINA SEPT MANUFACTURING PMI (GOVT OFFICIAL): 51.5 V 51.3E (7th straight expansion)
WEDS 9/30
RDSA.NL Issues Q3 Update: Guides Q3 Integrated gas Production 820-860Kboe/d, LNG liquefaction volumes 7.9-8.3Mt, Adj Earnings $100-200M; Confirms to cut 9K jobs
*(DE) GERMANY SEPT NET UNEMPLOYMENT CHANGE: -8.0K V -7.0KE; UNEMPLOYMENT CLAIMS RATE: 6.3% V 6.4%E
*(US) SEPT ADP EMPLOYMENT CHANGE: +749K V +649KE; Strong gains in Manufacturing (4th month of improvement)
*(US) Q2 FINAL GDP PRICE INDEX: -1.8% V -2.0%E; CORE PCE Q/Q: -0.8% V -1.0%E
*(US) Q2 FINAL GDP ANNUALIZED Q/Q: -31.4% V -31.7%E; PERSONAL CONSUMPTION: -33.2% V -34.1%E
(US) Nevada reports Aug casino gaming Rev $743.0M, -22.1% y/y; Las Vegas strip Rev $317.3M, -39.2% y/y
*(US) DOE CRUDE: -2.0M V +1ME; GASOLINE: +0.7M V -1ME; DISTILLATE: -3.2M V -1ME
(US) Association of American Railroads weekly rail traffic report for week ending Sep 26th: 518.3K, -2.1% y/y
(US) Fed extends restrictions on large banks' dividends and buybacks into Q4 (for firms with over $100B in assets)
(JP) Tokyo Stock Exchange (TSE): probing reports of network issues; JPX is halting trade of all shares due to network issues; Unsure when system will be restored.
(JP) Follow Up: JPX: Nikkei trading is halted for full day [Thursday] due to network issue [first time trading has been halted for an entire day]; To announce trading schedule tomorrow, will attempt to resume TSE trading on Friday (Oct 2nd)
THURS 10/1
(HK) Macau Sept Casino Rev (MOP): 2.2B v 1.3B prior; Y/Y: -90.0% v -94.5% prior
*(IT) ITALY SEPT MANUFACTURING PM: 53.2 V 53.5E (3rd month of expansion and highest since Jun 2018 )
*(EU) EURO ZONE AUG UNEMPLOYMENT RATE: 8.1% V 8.1%E
F Names John Lawler (54) as CFO, effective immediately
*(US) INITIAL JOBLESS CLAIMS: 837K V 850KE; CONTINUING CLAIMS: 11.8M V 12.20ME; California to not report claims for next 2 weeks
*(US) AUG PERSONAL INCOME: -2.7% V -2.5%E; PERSONAL SPENDING: 1.0% V 0.8%E
*(US) SEPT ISM MANUFACTURING: 55.4 V 56.4E; PRICES PAID: 62.8 V 58.8E
(UK) Bank of England (BOE): have reached target in corporate bond purchase program, no corporate bond operations will be conducted until further notice
(US) Fed extends temporary actions aimed at increasing the availability of intraday credit extended by Federal Reserve Banks to March 31st
(US) US President Trump: Will begin quarantine after aide Hicks tested positive for COVID-19, First Lady to also start the quarantine process
FRI 10/2
*(US) PRESIDENT TRUMP TWEETS: TESTED POSITIVE FOR CORONAVIRUS
*(EU) EURO ZONE SEPT ADVANCE CPI ESTIMATE Y/Y: -0.3% V -0.2%E; CPI CORE Y/Y: 0.2% (record low) V 0.4%E
TSLA Reports Q3 total production 145.0K v 82.3K q/q; deliveries 139.3K v 90.7K q/q v 140Ke; Says Q3 vehicle inventory declined further
*(US) SEPT UNEMPLOYMENT RATE: 7.9% V 8.2%E
*(US) SEPT CHANGE IN NONFARM PAYROLLS: +661K V +875KE
*(US) SEPT AVERAGE HOURLY EARNINGS M/M: 0.1% V 0.2%E; Y/Y: 4.7% V 4.8%E; AVERAGE WEEKLY HOURS: 34.7 V 34.6E
*(US) SEPT FINAL UNIVERSITY OF MICHIGAN CONFIDENCE: 80.4 V 79.0E
(US) House Speaker Pelosi: relief for airline workers is being advanced; calls on airlines to postpone job cuts; House will pass standalone legislation to keep airline workers on payroll if no broader agreement on COVID-19 relief is possible
(US) Pres Trump reportedly plans to empower Pence to take over some duties in the event his coronavirus symptoms worsen; national security is said to be a top priority - Fox News

Pandemic, Brexit and election uncertainties continue to chip away at market confidence

TradeTheNews.com 

Weekly Market Update: Pandemic, Brexit and election uncertainties continue to chip away at market confidence

2020-09-25T16:10:20.163

US stock markets trended lower for the fourth straight week. Coronavirus worries in Europe were exported across the northern hemisphere as the flu season looms large, keeping a lid on investors’ willingness to add risk. Officials in Europe and Washington also showed little, if any, sense of urgency to reach a breakthrough in both Brexit and US fiscal stimulus talks. Adding to the uncertainty, President Trump continued to cast doubt on the potential authenticity of the upcoming election, forcing colleagues within the Republican party to avow that they will abide by the results and expect a peaceful transition of power in January. Banks in particular were soft globally amid a continued drift lower in rates and a report that accused several major banks of laundering over $2T in funds over the last 20 years. The US dollar benefited from several waves of safe haven trading while emerging market currencies lagged. The Euro tested fresh 7-week lows alongside gold prices. For the week, the S&P fell 0.6%, the DJIA dropped 1.7%, and the Nasdaq gained 1.1%.

In corporate news this week, Nike shares surged after blowing away Q1 expectations with large gains in online sales and a return to revenue growth in China. Embattled Nikola founder Trevor Milton voluntarily stepped down as Chairman as federal officials opened a probe into fraud claims against the electric vehicle company. Costco posted beats on its top and bottom line and reported comp sales +11%, but expectations got ahead of themselves and shares in the warehouse retailer moved lowed. Tesla held its Battery Day event, though investors were not so enthused by the focus on long-term vision and less on specifics and near-term deliverables. On the M&A front, Microsoft announced the acquisition of ZeniMax Media, the parent company of ‘Fallout’ and ‘Doom’ games publisher Bethesda Softworks, for $7.5B in cash. UK betting operator William Hill reportedly has been approached by Apollo and Caesars about a potential cash takeover. Illumina affirmed it would reacquire its former cancer detection spinoff Grail for $8B in a cash and stock deal. Scripps announced plans to acquire ION Media for $2.65B, and Warren Buffett’s Berkshire Hathaway will help finance the purchase with a $600M investment in preferred stock.


SUN 9/20
Several major global banks including Standard Chartered, JP Morgan, Deutsche Bank, Bank of New York Mellon and HSBC accused of laundering over $2.0T in funds over 20+ years in document filed by FinCEN

MON 9/21
NKLA Founder Trevor Milton proposes to voluntarily step down as Chairman and from the Board; Appoints former GM exec Stephen Girsky as successor; effective immediately
(US) Fed's Kaplan (FOMC dissenter): Sees rates near zero as appropriate for the coming 2.5-3.0 years
MSFT To acquire ZeniMax Media and its Game Publisher Bethesda Softworks for $7.5B in cash
*(US) FED Q2 FINANCIAL ACCOUNTS HOUSEHOLD CHANGE IN NET WORTH: +$7.61T V -$6.548T PRIOR

TUES 9/22
(UK) PM Johnson: Announces new restrictions to combat the spread of coronavirus; new restrictions likely to remain for six months (until Mar 2021) - comments in Parliament
(US) Senator Romney (R-UT) says will support vote this year on Trump's Supreme Court nominee - Politico
*(US) SEPT RICHMOND FED MANUFACTURING INDEX: 21 V 12E (highest since Sep 2018)
*(US) AUG EXISTING HOME SALES: 6.00M V 6.01ME (sales pace at 14-year high)
(US) FDA reportedly expected to release a new standard for Emergency Use Authorization (EUA) for coronavirus vaccine that may make it difficult to see approval before Election Day (Nov 3rd) - Wash Post
NKE Reports Q1 $0.95 v $0.46e, Rev $10.6B v $9.17Be
*(NZ) NEW ZEALAND CENTRAL BANK (RBNZ) LEAVES OFFICIAL CASH RATE (OCR) UNCHANGED AT 0.25%; (AS EXPECTED)

WEDS 9/23
*(FR) FRANCE SEPT PRELIMINARY MANUFACTURING PMI: 50.9 V 50.6E (moves back into expansion)
*(DE) GERMANY SEPT PRELIMINARY MANUFACTURING PMI: 56.6 V 52.5E (3rd straight expansion and highest reading since Jun 2018)
*(EU) EURO ZONE SEPT PRELIMINARY MANUFACTURING PMI: 53.7 V 51.9E (3rd month of expansion and highest reading since Aug 2018)
*(UK) SEPT PRELIMINARY PMI MANUFACTURING: 54.3 V 54.0E (4th straight expansion)
*(US) SEPT PRELIMINARY MARKIT MANUFACTURING PMI: 53.5 V 53.5E
*(US) DOE CRUDE: -1.6M V -1.5ME; GASOLINE: -4.0M V -0.5ME; DISTILLATE: -3.4M V +1ME
(US) Association of American Railroads weekly rail traffic report for week ending Sep 19th: 522K, -1.3% y/y
(US) Calif Gov Newsom signs exec order to ban sales of new automobiles with internal combustion engines in California beginning 2035 - press
(US) Pres Trump: believes the election will end up in the Supreme Court; that's why it's important to have nine justices seated
(US) President Trump: Going to have to see what happens on transfer of power

THURS 9/25
*(DE) GERMANY SEPT IFO BUSINESS CLIMATE SURVEY: 93.4 V 93.8E (5th straight month of improvement)
SSP Confirms to acquire ION Media for $2.65B cash-debt; Berkshire Hathaway to invest $600M PFD equity; To get warrant to buy up to 23.1M shares of Scripps
*(US) INITIAL JOBLESS CLAIMS: 870K V 840KE; CONTINUING CLAIMS: 12.58M V 12.28ME
*(US) AUG NEW HOME SALES: 1.01M V 890KE (highest in 14 years)
(US) House Ways and Means Chair Neal (D-MA): confirms Democrats are drafting a new COVID response bill; could be voted on next week; likely to be at $2.2T
COST Reports Q4 $3.13 v $2.85e, Rev $52.3B v $52.5Be

FRI 9/26
WMH.UK Reportedly approached by Apollo for potential deal - press
*(US) AUG PRELIMINARY DURABLE GOODS ORDERS: 0.4% V 1.4%E; DURABLES (EX-TRANSPORTATION): 0.4% V 1.0%E
(US) PRES TRUMP REPORTEDLY PLANS TO NOMINATE AMY CONEY BARRETT TO THE SUPREME COURT - CNN

Central banks reinforce commitments to prolonged easy policy in the face of uncertainty over new Covid spikes

TradeTheNews.com 

Weekly Market Update: Central banks reinforce commitments to prolonged easy policy in the face of uncertainty over new Covid spikes

2020-09-18T16:06:20.493

US stock markets came under modest pressure this week. The NASDAQ led the way lower punching below its 50-day moving average and the S&P followed suit. The Transports and Russel 2000 experienced significantly better performance suggesting further rotation out of the big cap technology names that powered indices to fresh all-time highs this summer. Snowflake’s white hot IPO went down as the biggest software IPO in history by a wide margin, and may ultimately prove as the high water mark for investors’ frenzy into the cloud. Late in week sentiment was further damped by ongoing uncertainty related to President Trump’s TikTok saga and a growing belief that governments in Europe were mulling revisiting lockdown measures to stem resurgent Covid-19 infection rates.

We also heard from a host of central banks highlighted by the Fed. Chairman Powell discussed a sobering update of the FOMC’s outlook along with a heavily revised policy statement that included what he deemed as “powerful” forward guidance that should enable the Fed to meet its newly instituted average 2% inflation target. Meanwhile, the BOE acknowledged members specifically discussed the effectiveness of negative rates when they met on Thursday amid Brexit talks mired in stagnation following the House of Commons passage of PM Johnson’s internal markets bill. Overnight lending rates in Europe slipped further with Euribor falling below the ECB’s deposit rate for the first time and sovereign treasury yields remained capped. Crude oil prices moved up after OPEC+ producers met and made no mention of changes to oil output targets. For the week the S&P fell 0.7%, the DJIA slipped less than 0.1%, and the Nasdaq shed 0.6%.

In corporate news this week, after back-and-forth offers from multiple parties, reports indicated Oracle had reached a deal to partner with TikTok and bring its US operations under majority American ownership, but the White House had yet to sign off on the arrangement and set a Sunday deadline for its removal from app stores. FedEx posted an eye-popping quarter as COVID boosted deliveries and express margins, but the company refrained from offering FY guidance. Nvidia announced a deal to acquire Softbank’s chipmaker ARM for $40B, which would be the largest semiconductor deal in history, though regulatory hurdles still remain. Walmart confirmed its long-awaited Amazon Prime rival ‘Walmart+’ membership plan is now available, priced at $98/year or $12.95/month. Gilead Sciences announced a $21B deal for antibody therapy specialist Immunomedics at $88.00/share in cash, seeking to acquire its prized breast cancer treatment Trodelvy. Verizon bought Miami-based disposable phone service TracFone for $6.3B from America Movil as the telecom giant fortifies its position in the prepaid wireless space.


SUN 9/13
9984.JP Confirms it will sell ARM to NVIDIA for up to $40B [cash and stock transaction], $2.0B will be paid to Arm in cash; Softbank Group and Vision fund to receive $10B in cash; to receive $21.5B worth of NVIDIA shares
NVDA ARM transaction to be immediately accretive to non-GAAP gross margin and EPS

MON 9/14
(US) US Ambassador to China Branstad said to resign - CNN
DAL Cuts Q3 system capacity -60% y/y (prior -25% to -20% y/y) - filing
LEN Reports Q3 $2.12 v $1.51e, Rev $5.87B v $5.33Be; expect home sales to remain strong for the foreseeable future

TUES 9/15
*(DE) GERMANY SEPT ZEW CURRENT SITUATION SURVEY: -66.2 V -72.0E; EXPECTATIONS SURVEY: 77.4 V 69.5E
MMM Reports Aug Rev $2.7B +2% y/y; Guides Q3 Rev $8.2-8.3B v $8.0Be
WMT Confirms Walmart+ membership is now available costing $98/yr or $12.95/month
*(US) SEPT EMPIRE MANUFACTURING: 17.0 V 6.8E
*(US) AUG INDUSTRIAL PRODUCTION M/M: 0.4% V 1.0%E; CAPACITY UTILIZATION: 71.4% V 71.4%E
FDX Reports Q1 $4.87 v $2.54e, Rev $19.3B v $17.5Be

WEDS 9/16
*(UK) AUG CPI M/M: -0.4% V -0.6%E; Y/Y: 0.2% V 0.0%E (annual pace the slowest since Jan 2016)
*(US) AUG ADVANCE RETAIL SALES M/M: 0.6% V 1.0%E; RETAIL SALES (EX-AUTO) M/M: 0.7% V 1.0%E
*(US) DOE CRUDE: -4.4M V +1ME; GASOLINE: -0.4M V -1ME; DISTILLATE: +3.5M V +0.5ME
(US) Association of American Railroads weekly rail traffic report for week ending Sep 12th: 509.6K, +8.6% y/y
SNOW IPO opens for trade at $245
(US) FOMC LEAVES TARGET RANGE UNCHANGED BETWEEN 0.00-0.25%; AS EXPECTED; FED WILL MAINTAIN LOW RATES UNTIL JOB AND INFLATION GOALS MET; 13 OF 17 MEMBERS PROJECT NO RATE RISE THROUGH AT LEAST 2023
(US) New York Fed: plans to continue to increase SOMA holdings of Treasury securities by approximately $80B/mo and to increase SOMA holdings of agency MBS by $40B/mo
*(JP) BANK OF JAPAN (BOJ) LEAVES INTEREST RATE ON EXCESS RESERVES (IOER) UNCHANGED AT -0.10%, AS EXPECTED

THURS 9/17
*(EU) EURO ZONE AUG FINAL CPI Y/Y: -0.2% V -0.2%E; CPI CORE Y/Y: 0.4% V 0.4%E
*(UK) BANK OF ENGLAND (BOE) LEAVES INTEREST RATE UNCHANGED AT 0.10%; AS EXPECTED; Discussed effectiveness of negative rates
*(UK) BOE SEPT MINUTES: VOTED 9-0 TO LEAVE INTEREST RATES UNCHANGED AT 0.10%
*(US) INITIAL JOBLESS CLAIMS: 860K V 850KE; CONTINUING CLAIMS: 12.63M v 13.00ME
*(US) AUG HOUSING STARTS: 1.416M V 1.483ME; BUILDING PERMITS: 1.470M V 1.512ME
*(US) SEPT PHILADELPHIA FED BUSINESS OUTLOOK:15.0 V 15.0E

FRI 9/18
*(UK) AUG RETAIL SALES (EX-AUTO/FUEL) M/M: 0.6% V 0.4%E; Y/Y: 4.3% V 4.2%E
(US) Commerce Dept officials: confirm Americans will not be able to download WeChat or TikTok apps by Monday; US to ensure WeChat Pay will not be available in the US; WeChat ban prohibits replicating code in a new app; TikTok app will be removed from US app stores on Sunday
(US) SEPT PRELIMINARY UNIVERSITY OF MICHIGAN CONFIDENCE: 78.9 V 75.0E
(US) AUG LEADING INDEX: 1.2% V 1.3%E
MRNA Currently anticipates production of coronavirus vaccine mRNA-1273 will be 20M doses by end of 2020, anticipates total production of mRNA-1273 will be 0.5-1.0B doses during 2021