Highlights

Wall Street Breakfast

Author: bmotrader   |   Latest post: Fri, 28 Feb 2020, 7:47 PM

 

Wall Street Breakfast: Stocks Put Rally Caps Back On

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U.S. stocks are on the way up for a second consecutive session, with Dow futures pointing to an advance of 315 points at the open, amid big overnight gains in Europe and Asia. U.S. equities rallied yesterday on manufacturing activity strength in January, while the PBOC just plowed another 500B yuan ($71.2B) of liquidity via reverse repo agreements into the financial system, adding to the $143B injection seen Monday. A second coronavirus death outside mainland China - in neighboring Hong Kong - has kept concerns about the spread of the disease elevated, but so far the international rate of increase has slowed from late last week.

Macau shuts casinos

Macau gambling shares fell after the territory ordered casinos to suspend operations for two weeks as a local employee was confirmed to have the virus. The entire region had already nearly been shut for travel, depriving the struggling area of tourists and high rollers. Even before the announcement, gamblers have been staying away from Macau's casinos, which saw gambling revenue drop to $2.76B in January, down more than 11% compared with a year earlier. WYNN -3.5%; MGM -3.2% premarket.

Google unveils YouTube, Cloud results

Financial analysts applauded transparency from Alphabet (GOOG, GOOGL) yesterday, which revealed new revenue figures for the first time. Sales at YouTube were $15.1B for the year, lower than projections, while Google Cloud revenue jumped 53% to $2.6B, but trailed that of Microsoft's (NASDAQ:MSFT) Azure platform (profit figures were not disclosed). The news, along with mixed fourth-quarter results, sent down Alphabet shares down 4% AH.

Is Tesla behaving like Bitcoin 2017?

Tesla (NASDAQ:TSLA) is rallying for a sixth day, with shares up another 4% premarket to over $800, following yesterday's incredible run that saw the stock skyrocket 20%. The latest? Panasonic (OTCPK:PCRFF) said its business turned profitable in Q4 as Tesla's battery output helped push that division into the black, while Argus and Ark Invest issued some bullish predictions. TSLA has now climbed 79% in just 2020 alone, and has tripled in value since Q3 results were reported in October.
Go deeper: Donn Bailey says TSLA's stock price is all based on future expectations.

BP boosts dividend

BP (NYSE:BP) +4.8% premarket after raising its dividend by 2.4% to 10.5 cents per share, marking a sign of confidence in its growing oil and gas business on the last day in office for CEO Bob Dudley (he's been at the helm for nearly a decade). "BP is performing well, with safe and reliable operations, continued strategic progress and strong cash delivery,” he added in a statement. Oil price weakness and a "weaker environment" still weighed on results, with full-year underlying replacement cost profit, used as a proxy for net profit, falling 21% Y/Y to $10B in 2019.
Go deeper: 'Interesting Times Ahead For BP's U.S. Downstream Assets' by Gary Gambino.

Watch out for Disney earnings

It's a pivotal quarter for the company as investors focus on early returns from Disney+. Shares bounced in November as the entertainment giant attracted 10M subscribers following launching the streaming service in the U.S. and two other countries, but the stock has since given back some of those gains. Other concerns center on the coronavirus. Disney (NYSE:DIS) shuttered its Shanghai theme park indefinitely on Jan. 25, and theaters may remain closed in the region due to the outbreak. DIS +1.8% premarket.
Go deeper: Mott Capital feels DIS will jump following results.

Antitrust head recuses himself from Google probe

Makan Delrahim, the head of the antitrust division at the Justice Department, has recused himself from investigating Google (GOOG, GOOGL), sources told NYT. At issue are potential conflicts of interest related to his past work for the internet search company, but what's unclear is why the recusal is taking place now (the DOJ has been investigating Google for months). Department officials are set to meet with state AG representatives today to discuss the probe, focusing on search bias, ads, and the Android OS.

'Hamilton' coming to the big screen

Disney (DIS) will bring Hamilton to cinemas in North America starting in 2021 after the blockbuster Broadway musical finishes its traditional theatrical run. The movie will be a recording of the show made in 2016 instead of a film adaptation of the musical, and will feature the original Broadway cast, including writer/composer Lin-Manuel Miranda in the title role. The Mouse House paid an eye-popping $75M for the rights to the show, which continues to command hefty ticket prices and draw large audiences.

Greater clarity on how to join the EU

As the U.K. divorces itself from the bloc, Brussels has set out plans to streamline the EU enlargement process and give member states stronger powers to halt or reverse accession talks, FT reports. The decision was prompted by French opposition to North Macedonia and Albania from opening negotiations, saying the countries had not made sufficient progress with reforms to cut corruption and strengthen the rule of law. Under the new plan, backsliding or delays could lead to discussions being put on hold or suspended, though it promises improved incentives for well-performing aspirant countries.

Monday's Key Earnings

Alphabet (NASDAQ:GOOG) -4.1% AH posting revenue miss, new numbers.
NXP Semiconductors (NASDAQ:NXPI) -2% AH despite beats, upside outlook.
Sysco (NYSE:SYY) -6.7% coming up short on revenue.

Today's Markets

In Asia, Japan +0.5%. Hong Kong +1.2%. China +1.3%. India +2.3%.
In Europe, at midday, London +1.2%. Paris +1.3%. Frankfurt +1.1%.
Futures at 6:20, Dow +1.1%. S&P +1.2%. Nasdaq +1.3%. Crude +1.4% to $50.81. Gold -0.6% to $1572.40. Bitcoin -1.5% to $9164.
Ten-year Treasury Yield +6 bps to 1.58%

Today's Economic Calendar

Auto Sales
8:55 Redbook Chain Store Sales
10:00 Factory Orders

 

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