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Author: skywalker   |   Latest post: Wed, 14 Nov 2018, 11:12 AM

 

Wall Street Breakfast: Get Ready For 'Super Thursday'

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U.K. stocks fell into negative territory overnight, tracking a lower finish in the U.S., with traders cautious ahead of the Bank of England's "Super Thursday." In addition to a press conference from Mark Carney, which will likely tie the path of monetary policy to Brexit, the BoE will release its policy decision, the minutes from its last meeting and its latest forecasts for growth and inflation.

Economy

While the trade data may be skewed slightly due to stockpiling ahead of China's Lunar New Year holidays, January exports rose 11.1% from a year earlier, while imports expanded 36.9%, resulting in a trade surplus of nearly $20.34B. Meanwhile, the surplus with the U.S. narrowed to $21.9B, from $25.6B in December. That metric is closely watched as the two countries tussle over trade.

Setting the stage for the likely re-election of President Maduro, Venezuela has set a presidential election for April 22 after mediation talks between the leftist government and an opposition coalition collapsed. On Wednesday, U.S. Secretary of State Rex Tillerson said Washington was closer to deciding whether to impose sanctions on Venezuelan oil, in what would be a severe blow to the OPEC member's already ailing economy.

California has rejected the Trump administration's massive offshore drilling proposal, vowing that "not a single drop" of new fuel will ever come ashore in the state. The threat to deny pipeline permits for transporting crude off the Pacific Coast is the latest step by states trying to halt the biggest proposed expansion in decades of federal oil and gas leasing.

Trade tensions between the U.S. and Canadian federal governments are spilling over to the state level. Ontario is restricting firms from New York from bidding on its government contracts in retaliation for the so-called Buy American measures approved by Albany. Championed by Governor Andrew Cuomo, the provisions compel government-funded infrastructure projects of more than $1M to use U.S.-made materials and construction supplies.

Prime Minister Theresa May is reportedly drawing up plans for an instant break from key EU regulations after Brexit, including some on financial services, in a drive to get Britain out of its defensive crouch. The blueprint will also involve quitting the EU's customs regime to allow the U.K. to strike new free-trade agreements and replacing the EU's Common Agricultural Policy.

Stocks

Despite posting its worst-ever quarterly loss, Tesla (NASDAQ:TSLA) is sticking with its revised output targets for the Model 3. The automaker has "made progress" in overcoming its early production troubles, telling shareholders it expects to generate its first sustained operating profit sometime this year. What about the the Model Y? Tesla will begin making capital investments for the crossover in the second half of 2018.

Meanwhile, another Tesla executive is jumping ship. Jon McNeill, former president of global sales and service, will join LYFT as its chief operating officer. Elon Musk also revealed there was "no active or passive" search for a new Tesla (TSLA) CEO, but at some point he might be willing to appoint someone and take on a different role more focused on product development and engineering.

Step aside, Microsoft. For the last couple of days, Amazon (NASDAQ:AMZN) has passed Microsoft's (NASDAQ:MSFT) market cap during intraday trade, but has yet to close above its Washington-based rival for the first time. Will today be the day? A move higher would make Amazon the third largest company in America, with a valuation of over $690B, trailing only fellow tech giants Google (GOOG, GOOGL) and Apple (NASDAQ:AAPL).

Jeff Immelt, former chief executive of General Electric (NYSE:GE), has been named chairman of Athenahealth (NASDAQ:ATHN), where he will receive about $400K in cash and stock in 2018. It's not the first appointment since he departed GE. He's also joining New Enterprise Associates as a venture partner and will be teaching at Stanford University.

Days after Samsung Electronics Vice Chairman Jay Y. Lee got out of jail, Samsung (OTC:SSNLF) Chairman Lee Kun-hee has been named as a suspect for tax evasion. The allegations maintain that he evaded $7.5M in duties and used bank accounts in other people's names that held more than $350M, according to Yonhap. Lee Kun-hee has been hospitalized after suffering a heart attack in 2014.

BlackRock is raising $10B to start a Berkshire Hathaway-like (BRK.A, BRK.B) venture - known internally as a "long-term private capital" vehicle - sources told the WSJ. BlackRock (NYSE:BLK) already manages $145B that it invests in a number of products including private equity funds, but it doesn't have its own investment vehicle where money is used to directly buy stakes in companies.

Moving out of the financial district... Nasdaq (NASDAQ:NDAQ) is relocating its global headquarters from downtown Manhattan to midtown, expanding its lease at the Times Square office tower from where it broadcasts the market opening and closing bell ceremonies. The exchange's larger presence in the heart of Manhattan will drive its brand forward and offer an "unparalleled experience" for its clients, Nasdaq said in a statement.

CBOE Global Markets does not expect any significant impact on trading volumes at the exchange following the collapse of two popular exchange-traded products (ETPs) that let traders bet that volatility will fall. The Chicago exchange addressed analysts' questions after markets closed on Wednesday, following an almost 15% decline in CBOE's share price in the last three days.

Rumors of takeover talks between toymakers Hasbro (NASDAQ:HAS) and Mattel (NASDAQ:MAT) went unconfirmed on Wednesday as Hasbro CEO Brian Goldner deflected a question on acquisition talks. "We, first and foremost, are investing in our business," he told Mad Money host Jim Cramer. "That's really been our focus and I couldn't comment on any M&A speculation."

Amazon has announced the first major integration between its e-commerce operations and Whole Foods. Groceries from the chain will be added to Amazon's (AMZN) Prime Now service in four markets - Austin, Cincinnati, Dallas and Virginia Beach - and the company plans to expand it across the country this year. Two-hour delivery will be free, while one-hour delivery costs $7.99, on orders above $35.

In meetings last week with suppliers including Procter & Gamble (NYSE:PG), Unilever (NYSE:UL), Kimberly-Clark (NYSE:KMB) and Clorox (NYSE:CLX), Walmart's (NYSE:WMT) e-commerce chief Marc Lore said the company wants to focus on merchandise priced at least $5 and preferably, more than $10. "Walmart has started to understand it cannot make money if they offer the lowest prices online on every item and then spend $4 or $5 trying to ship it over," said one supplier. "It is not sustainable and more importantly their shareholders won't allow it."


Today's Markets

In Asia, Japan -1.1%. Hong Kong +0.4%. China -1.4%. India +1%.
In Europe, at midday, London -0.8%. Paris -1%. Frankfurt -1.4%.
Futures at 6:20, Dow -0.2%. S&P -0.2%. Nasdaq -0.1%. Crude -0.9% to $61.26. Gold -0.1% to $1313.70. Bitcoin +11.9% to $8483.
Ten-year Treasury Yield flat at 2.83%

Today's Economic Calendar

Chain Store Sales
8:30 Initial Jobless Claims
9:45 Bloomberg Consumer Comfort Index
10:30 EIA Natural Gas Inventory
1:00 PM Results of $16B, 30-Year Note Auction
4:30 PM Money Supply
4:30 PM Fed Balance Sheet

 

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