Wall Street Breakfast

Author: bmotrader   |   Latest post: Fri, 7 Aug 2020, 11:21 AM


Wall Street Breakfast: eBay Refocuses On Core Marketplace

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eBay is selling its classified ad business to Norway's Adevinta (OTCPK:ADEVF) for $9.2B in cash and stock, making the latter the largest online classifieds company globally. The unit is one of eBay's last remaining businesses outside the company's core after selling its StubHub ticketing division last year. As part of the transaction, eBay (NASDAQ:EBAY) will receive $2.5B in cash and approximately 540M Adevinta shares - representing 44% ownership of the pro forma company and a ~33.3% voting stake. The deal is expected to close by Q1 of 2021 and is forecast to create estimated annual synergies of $150M-185M within the next three years. EBAY +2.4% premarket.

Rally continues

Big tech led the charge for Wall Street on Monday as the Nasdaq 100 had its best gain in three months, boosted by the FAANG and Tesla (NASDAQ:TSLA). Pfizer (NYSE:PFE) and BioNTech (NASDAQ:BNTX) also reported early positive data on a joint coronavirus vaccine, while another candidate from Oxford University and AstraZeneca (NYSE:AZN) showed a positive immune response in an early trial. Everyone is partying... Industrial stocks are rallying along with stay-at-home players this morning as U.S. stock index futures climb 0.7% before quarterly results from Coca-Cola (NYSE:KO), Philip Morris (NYSE:PM), Lockheed Martin (NYSE:LMT) and United Airlines (NASDAQ:UAL).

Coronavirus stimulus package

"We did it! We have reached a deal on the [coronavirus] recovery package and the European budget for 2021-2027," tweeted European Council President Charles Michel after nearly five days of talks in Nice, France. "This agreement sends a concrete signal that Europe is a force for action," he added, prompting the euro to hit a fresh four-month high of $1.1470. Within the €750B coronavirus recovery fund, €390B will be offered as non-repayable grants (down from €500B originally proposed), and the rest in repayable loans. Leaders also agreed to an EU budget of over €1T that will run from next year to 2027.

China tensions

The U.K. will "bear the consequences if it insists on going down the wrong road," a Chinese embassy spokesman declared, after Britain announced it would suspend extraditions and arms sales to Hong Kong due to China's national security law. The news comes as U.S. Secretary of State Mike Pompeo visits the U.K., where he'll meet with MPs who want to see sanctions on Chinese officials and the Asian superpower cut from Britain's nuclear power program. Prime Minster Boris Johnson has already ordered the removal of Huawei equipment from British 5G networks by the end of 2027, while Chinese-owned Tiktok (BDNCE) reportedly ditched plans for a global headquarters in the U.K.

Fed nominees

Judy Shelton, President Trump's controversial pick to join the Fed's Board of Governors, is poised to clear a key confirmation hurdle today after Louisiana Senator John Kennedy said he'd vote in her favor. The Senate Banking Committee will also decide on the nomination of Christopher Waller, director of research at the St. Louis Fed, which is expected to easily pass muster. Shelton has a long history of unorthodox economic commentary, like questioning the basic role of the Fed, calling for near-zero interest rates and advocating a return to the gold standard. If Shelton and Waller are cleared, the nominations advance to a full Senate vote.

Masking up

Mask makers like Alpha Pro Tech (NYSEMKT:APT), Allied Healthcare (NASDAQ:AHPI) and Lakeland Industries (NASDAQ:LAKE) soared into the close on Monday after President Trump offered his strongest endorsement yet for wearing face coverings in public. "We are United in our effort to defeat the Invisible China Virus, and many people say that it is Patriotic to wear a face mask when you can't socially distance," he wrote in a tweet that included a photo of himself wearing a mask with a presidential seal. More than half of U.S. states currently have mask mandates to curb the spread of the coronavirus.

Prime delay

Amazon (NASDAQ:AMZN) Prime Day 2020 will be postponed by three months, according to an email to third-party sellers that suggests this year's big deals will launch in October. "This year we'll be holding Prime Day later than usual, while ensuring the safety of our employees and supporting our customers and selling partners," the company announced, adding that it would share "more details soon." While Prime Day in the U.S. is being put on hold, Amazon said Prime Day will take place in India next month on August 6 and 7.

Media misconduct

Walt Disney (NYSE:DIS) has fired ABC News' Barbara Fedida, who was one of the most powerful executives in television news, after an investigation confirmed allegations that she made insensitive remarks and racial slurs about colleagues. Reports previously suggested that Fedida used terms like "pick cotton" and "low rent," and asked which employee would most likely be an "active shooter" (she was placed on administrative leave on June 13). In other media news, former Fox News (NASDAQ:FOX) reporter Jennifer Eckhart has leveled rape allegations against former Fox host Ed Henry, while journalist Cathy Areu alleged that she was sexually harassed by Henry, as well as current on-air talent like Sean Hannity, Tucker Carlson, Howard Kurtz and Gianno Caldwell.

Monday's Key Earnings

Halliburton (NYSE:HAL) +2.5% as cost cuts, cash flow impressed analysts.
IBM (NYSE:IBM) +4.3% AH on Q2 upside despite pandemic pressure.

Today's Markets

In Asia, Japan +0.7%. Hong Kong +2.3%. China +0.2%. India +1.4%.
In Europe, at midday, London +0.5%. Paris +1.2%. Frankfurt +1.8%.
Futures at 6:20, Dow +0.7%. S&P +0.7%. Nasdaq +0.8%. Crude +2.4% to $41.91. Gold +0.5% to $1826.80. Bitcoin +1.8% to $9341.
Ten-year Treasury Yield flat at 0.62%

Today's Economic Calendar

8:30 Chicago Fed National Activity Index
8:55 Redbook Chain Store Sales


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