Wall Street Breakfast

Author: bmotrader   |   Latest post: Fri, 14 Aug 2020, 7:19 AM


Wall Street Breakfast: Tesla Takes Another Victory Lap

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Tesla shares are up another 3% premarket to $565, lifting gains over the last 24 hours past 10% and extending a record run with a market cap of over $100B. That figure means Tesla (NASDAQ:TSLA) would steal Volkswagen's (OTCPK:VWAGY) title as the second-most valuable global carmaker during today's session after topping the combined value of Ford (NYSE:F) and GM (NYSE:GM) earlier this month (#1 Toyota (NYSE:TM) is valued at $198B). Pedal to the metal... Shares of the EV maker have more than doubled over the past six months as investors reset profit expectations amid stronger delivery figures, an ongoing expansion of production facilities and a more disciplined approach from CEO Elon Musk.

GM's Cruise unveils driverless shuttle

The boxy, all-electric vehicle, named "Cruise Origin," will be used for GM's (GM) planned autonomous ride-sharing service as Cruise CEO Dan Ammann aims to "move beyond the car." Features: It's about the size of a large SUV with sliding doors on each side, but does not have manual controls such as pedals or a steering wheel. Cruise has raised $7.25B from investors including Honda (NYSE:HMC), SoftBank Vision Fund (OTCPK:SFTBY) and T. Rowe Price (NASDAQ:TROW). The latest investments, announced in May 2019, valued the firm at $19B.

Netflix numbers, IBM revenue

Netflix (NASDAQ:NFLX) beat on the top and bottom lines, sending shares up 2.3% AH, but gave disappointing Q1 guidance as the streaming wars heat up. The company also missed its forecast for U.S. subscriber growth for the third straight quarter, but blew through its expectations for an overseas expansion. Meanwhile, IBM's (NYSE:IBM) stock moved nearly 4% higher AH as revenue grew on an annualized basis for the first time in more than a year. The gain was driven by the company's high-margin cloud computing business and revenue from Red Hat, a $34B acquisition that closed in July, which was up 24% in the quarter.

Equities rebound

World stock markets are getting back to full strength as investors cheered measures to contain the outbreak of a potentially deadly coronavirus. Ministries and local governments are arranging refunds on plane and train tickets, banning tourist groups from Wuhan, and organizing coverage of medical expenses, analysts at Everbright Sun Hung Kai wrote in a note. Guidelines are also in place to minimize public gatherings in the most affected regions, while President Trump said the U.S. has it "totally under control" after the first case was confirmed in Washington state. DJIA futures are pointing to a 100-point gain at the open, while tech rallies on earnings from Netflix (NFLX) and IBM (IBM).

'Amazon Pharmacy'

While a trademark filing doesn't necessarily indicate a near-term international expansion, Amazon (NASDAQ:AMZN) has filed to trademark "Amazon Pharmacy" in Canada, the U.K. and Australia. The filing in Canada lists other potential areas for Pharmacy, including surgical and dental instruments and medical and veterinary preparations. Amazon started moving into the drug space in 2017, when it began exploring whether to build out a team, and the following year, it acquired online pharmacy PillPack.

Saudis dismiss Bezos phone hacking

"Recent media reports that suggest the Kingdom is behind a hacking of Mr. Jeff Bezos' phone are absurd," Saudi's U.S. embassy wrote on Twitter. "We call for an investigation on these claims so that we can have all the facts out." A report from the Guardian yesterday said Bezos' phone was hacked in 2018 after receiving a WhatsApp message that had been sent from the personal account of Saudi Crown Prince Mohammed bin Salman, and had extracted large amounts of data within hours.

Another 737 MAX delay

Airbus' (OTCPK:EADSY) shares rose to record highs overnight as archrival Boeing (NYSE:BA) plunged to 52-week lows after warning of new issues with the 737 MAX. The U.S. planemaker does not expect to win approval for its return to service until mid-2020 due to further potential developments in the certification process and regulatory scrutiny of its flight control system. The delay would pose another headache for carriers who already missed one peak travel season without the planes.

New low-cost iPhone model?

Apple (NASDAQ:AAPL) suppliers plan to begin assembling a cheaper iPhone in February, with an official unveil happening as early as March, Bloomberg reports. It will be the first lower-cost iPhone model since the iPhone SE, and will look similar to the iPhone 8 from 2017 with Touch ID built into a 4.7-inch screen. A discounted offering may help Apple better compete in the most price-competitive and fast-growing emerging phone markets, particularly India.

Vodafone bids farewell to Libra Association

Vodafone (NASDAQ:VOD) has become the eighth company to abandon Facebook's (NASDAQ:FB) digital currency initiative, joining the likes of Visa (NYSE:V), Mastercard (NYSE:MA), PayPal (NASDAQ:PYPL), eBay (NASDAQ:EBAY), Stripe (STRIP), Booking Holdings (NASDAQ:BKNG) and Mercado Pago (NASDAQ:MELI). "We will continue to monitor the development of the Libra Association and do not rule out the possibility of future co-operation," a Vodafone spokesman said in a statement. Since Facebook announced Libra in June, the crypto project has been stonewalled by concerns from lawmakers and regulators around the world.

Closing auctions in the spotlight

The SEC has dealt a blow to the New York Stock Exchange (NYSE:ICE) and Nasdaq (NASDAQ:NDAQ) by allowing traders placing orders through Cboe Global Markets (NYSE:CBOE) to bypass paying fees to its rival exchanges when they seek to buy or sell shares at daily closing prices. NYSE and Nasdaq have long held a tight grip on the market by determining the official end-of-day price of stocks. The rising popularity of index-based investing strategies has been a major factor behind the growing importance of closing auctions, which landed 7.2% of trading volumes in U.S. equities last year, up from about 5% in 2016.

Tuesday's Key Earnings

Halliburton (NYSE:HAL) -0.8% boosted by international growth.
IBM (IBM) +3.8% AH as cloud unit drove revenue gains.
Netflix (NFLX) +2.3% AH amid a global subscriber bump.
United Airlines (NASDAQ:UAL) +0.8% AH on cheaper fuel, strong demand.

Today's Markets

In Asia, Japan +0.7%. Hong Kong +1.3%. China +0.3%. India -0.5%.
In Europe, at midday, London +0.1%. Paris flat. Frankfurt flat.
Futures at 6:20, Dow +0.3%. S&P +0.4%. Nasdaq +0.7%. Crude -0.7% to $57.96. Gold flat at $1557.90. Bitcoin -0.2% to $8640.
Ten-year Treasury Yield flat at 1.77%

Today's Economic Calendar

7:00 MBA Mortgage Applications
8:30 Chicago Fed National Activity Index
8:55 Redbook Chain Store Sales
9:00 FHFA House Price Index
10:00 Existing Home Sales


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