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Author: skywalker   |   Latest post: Tue, 20 Aug 2019, 9:57 AM

 

Wall Street Breakfast: Trade Overhang Sparks Another Selloff

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It's looking like another tough week for Wall Street, with DJIA futures off more than 300 points as investors await countermeasures from China after trade talks with the U.S. appeared to end in a stalemate. On Saturday, President Trump said China should "act now" to make an agreement, predicting that "far worse" terms would be on offer after what he forecast would be his certain re-election in 2020. Adding to the tensions, China's foreign ministry said Beijing would never surrender to foreign pressure, sending the Shanghai Composite down 1.2%.

Uber's IPO flop continues

The year's most anticipated and largest IPO slumped on Friday and put a stop to those analysts attempting to add a 'U' to FAANG. Uber (NYSE:UBER) CEO Dara Khosrowshahi was defiant and said investors in it for the long term won't regret it as shares closed their first day down 7.6%. There doesn't seem to be any more love today with the stock off 2.6% premarket - to $40.51/share - with traders noting that Uber has lost more money than any other company to ever go public.

No Nissan-Renault merger in sight

Nissan (OTCPK:NSANY) is opposing renewed efforts by alliance partner Renault (OTCPK:RNLSY) to merge under a holding company because such a structure won’t help turn the Japanese carmaker around, Bloomberg reports. Talks have been ongoing since Renault Chairman Jean-Dominique Senard first made an informal proposal to Nissan CEO Hiroto Saikawa in April. Nissan rebuffed the idea then and has continued to oppose it.

'Pikachu' can't unseat 'Avengers'

Hollywood's first serious attempt to unseat Avengers: Endgame (NYSE:DIS) atop the box office made a strong effort over the weekend, but the film still kept the No.1 spot with a third-week haul of $63.1M. Warner Bros' (NYSE:T) Pokémon Detective Pikachu, the first big-budget studio release since Endgame's record setting, collected a respectable $58M in second place. The Marvel Studios release has now so far brought in sales of $2.49B worldwide, putting it about $300M behind the top-grossing movie of all time, 2009's Avatar.

Price-fixing in the drug industry?

Forty-four U.S. states have filed a lawsuit accusing Teva Pharmaceuticals (NYSE:TEVA) of orchestrating a sweeping scheme with 19 other drugmakers to inflate drug prices - sometimes by more than 1,000% - and stifle competition for generic medicines. "We take these accusations seriously and we are going to defend ourselves," CFO Mike McClellan declared. Soaring drug prices from both branded and generic manufacturers have sparked outrage across the political spectrum, from Republicans and Democrats alike. TEVA -7.5% premarket.

Big Tobacco supports raising smoking age

A dozen states and more than 450 local governments have already increased the minimum smoking age to 21 from 18, and Congress will soon consider a federal ban. Altria (NYSE:MO), Juul and British American Tobacco (NYSE:BTI) are supporting the effort as pressure builds to fix a teen vaping "epidemic." If the minimum age was increased to 21 in all 50 states, cigarette sales would fall 4.6% annually (from 4% currently), according to Cowen analyst Vivien Azer, but some see Big Tobacco's endorsement as a public relations maneuver.

European exchange dominance

Euronext (OTCPK:EUXTF) has won approval from Norway's finance ministry to buy up to 100% of the Oslo stock exchange, clearing the last major hurdle in its takeover battle with Nasdaq (NASDAQ:NDAQ). The two have been engaged in a bidding war since December to buy control of Oslo Bors. Norway's government also declined to set a two-thirds ownership requirement, which had been pushed by Nasdaq.

Qualcomm bonuses for Apple settlement

Qualcomm's (NASDAQ:QCOM) executive team has received big bonuses for settling a bitter multi-billion dollar legal battle with Apple (NASDAQ:AAPL). CEO Steve Mollenkopf saw the biggest award, receiving 40,794 shares of Qualcomm stock, which works out to $3.5M at Friday’s closing price of $85.84. "In making these grants, the Compensation Committee considered the anticipated long-term stockholder value resulting from these agreements with one of the Company's key customers." QCOM shares are up 50% since the settlement.

India joins EU in Android antitrust probe

India's antitrust watchdog has ordered an investigation into Alphabet (GOOG, GOOGL) unit Google for allegedly abusing the dominant position of its popular Android mobile operating system to block rivals, sources told Reuters. The Competition Commission of India last year started looking into the complaint, which is similar to one Google faced in Europe that resulted in a $5B fine on the company. In mid-April, the CCI decided there was merit in the accusations made in the complaint and ordered its investigation unit to launch a full probe.

Bitcoin jumps above $7,000

Bitcoin (BTC-USD) hasn't seen $6,000 in about six months, but it crossed that level just a week ago, and has now taken out $7,000 for the first time since early September. Others like Ripple (XRP-USD), Ether (ETH-USD), Bitcoin Cash (BCH-USD) and Litecoin (LTC-USD) are joining the rally as well. The move reignited suggestions from the crypto community that the digital assets act as a haven in times of uncertainty, as stocks pulled back amid heightened U.S.-China trade tensions.

Today's Markets

In Asia, Japan -0.8%. Hong Kong closed. China -1.2%. India -1%.
In Europe, at midday, London -0.1%. Paris -0.6%. Frankfurt -0.8%.
Futures at 6:20, Dow -1.2%. S&P -1.3%. Nasdaq -1.7%. Crude +1.5% to $62.60. Gold -0.3% to $1284.10. Bitcoin -4% to $7,131.
Ten-year Treasury Yield -3 bps to 2.43%

Today's Economic Calendar

9:05 Fed's Rosengren Speech
9:10 Fed's Clarida Speech

 

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