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Wall Street Breakfast

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

 

Wall Street Breakfast: Russia Registers World's First Coronavirus Vaccine

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"As far as I know, a vaccine against a new coronavirus infection has been registered this morning, for the first time in the world," Russian President Vladimir Putin declared, according to RIA Novosti. "I know that it works quite effectively, forms a stable immunity and, I repeat, has passed all the necessary checks." He added that one of his daughters was vaccinated against COVID-19, despite Phase 3 trials that normally last for months and involve thousands of people. At the end of July, the WHO said that there were 26 candidate vaccines in the clinical evaluation stage, including one registered in Russia that was developed by the Gamaleya Research Center.

S&P 500 nears record territory

Stocks continue to shrug off the latest U.S.-China tensions as President Trump explores a variety of tax cuts (see below), while lawmakers attempt to restart talks over a coronavirus stimulus package. Contracts tied to the S&P 500 suggest a 25 point opening bell gain that would take the broader benchmark to within 16 points of its intraday high of 3,393.5, set on February 19. Dow futures are recording even bigger gains, up 1.1%, as investors extend a rotation into value stocks - which tend to outperform growth coming out of a recession - from heavyweight tech names.

Tax cuts

In addition to several weekend executive actions that included a payroll tax holiday, President Trump is "very seriously" considering a capital gains tax cut, which would "create a lot more jobs." While the president can't unilaterally slash the 20% long-term capital gains rate without Congress, some advisers say he could issue an executive order that would slash tax bills for investors when they sell assets. The move, known as indexing capital gains to inflation, would likely face legal challenges, and comes as Trump also explores "an income tax cut for middle-income families."

Robinhood blows competitors out of the water

The 'retail bros' appear to be at it again as Robinhood joined the rest of the brokerage industry by publishing monthly trading data. The startup saw 4.3M daily average revenue trades (DARTs) in June, outperforming all of the publicly traded, incumbent brokerage firms. TD Ameritrade (NASDAQ:AMTD) was the next highest monthly total at 3.84M DARTs, Interactive Brokers (NASDAQ:IBKR) saw 1.8M DARTs, followed by Charles Schwab (NYSE:SCHW) and E-Trade (NASDAQ:ETFC) at 1.8M and 1.1M, respectively. Robinhood's DARTs during Q2 more than doubled compared to the prior three months, while all three of its top days based on trading volume, happened in June.

New York Jobs CEO Council

Leaders from 27 firms that represent many of New York's leading industries have banded together to create the New York Jobs CEO Council, which aims to hire 100K people from low-income Black, Latino and Asian communities by 2030. The co-chairs of the new organization include JPMorgan Chase (NYSE:JPM) CEO Jamie Dimon, IBM (NYSE:IBM) CEO Arvind Krishna and Accenture (NYSE:ACN) CEO Julie Sweet, as well as initial members like Jeff Bezos of Amazon (NASDAQ:AMZN). "Today's economic crisis is exacerbating economic and racial divides and exposing systemic barriers to opportunity," Dimon said in a press release. "Young people in low-income and minority communities feel this failure the most. Unless we actively work to close the gap, COVID-19 will make matters worse."

Employees or contractors?

San Francisco Superior Court Judge Ethan Schulman has granted a preliminary injunction against Uber (NYSE:UBER) and Lyft (NASDAQ:LYFT), but will pause the order for 10 days to give the companies time to appeal the decision. California Attorney General Xavier Becerra and a trio of city attorneys previously filed for the injunction to force the ride-hailing services to comply with a new state law and immediately stop classifying their drivers as contractors. The decision, known as Assembly Bill 5, or AB 5, would weigh heavily on their business models and other gig-economy companies.

Lebanon government resigns

Lebanon's stock market reopened yesterday, and the BLOM Stock Index is down 1.6%, amid further uncertainty following last week's explosion at Beirut's port. Prime Minister Hassan Diab confirmed the resignation of his administration after just seven months in office and blamed a corrupt political elite for sabotaging his tenure. Even before the fatal incident, which killed 163 people and wounded over 6,000, Lebanon was struggling. It hasn't undertaken the reforms required to unlock international funding, while the Lebanese pound has also lost 80% of its value since October.

Latest China tensions

Companies from China and other countries that do not comply with accounting standards will be delisted from U.S. stock exchanges as of the end of 2021, according to U.S. Treasury Secretary Steven Mnuchin. The U.S. will also soon require imports from Hong Kong to be labeled as 'Made in China' following a notice that's set to be published today in the Federal Register. China appears to be in a delicate balancing act as it keeps a trade deal alive. The country is reportedly scrapping expensive Brazilian soy bean purchases and replacing previously done deals with American supplies, while retaliatory sanctions imposed yesterday didn't include any members of the Trump administration.

Monday's Key Earnings

Hertz (NYSE:HTZ) -5.3% AH posting wider than expected loss.
Marriott International (NASDAQ:MAR) +3.6% on slower monthly cash burn.
Occidental Petroleum (NYSE:OXY) -5.6% AH after booking $6.6B in charges.
Royal Caribbean (NYSE:RCL) +10% as investors looked to 2021.

Today's Markets

In Asia, Japan +1.9%. Hong Kong +2.1%. China -1.2%. India -0.6%.
In Europe, at midday, London +2.4%. Paris +2.6%. Frankfurt +2.6%.
Futures at 6:20, Dow +1.1%. S&P +0.7%. Nasdaq +0.5%. Crude +1.6% to $42.59. Gold -2.1% to $19996.70. Bitcoin -0.9% to $11726.
Ten-year Treasury Yield +3 bps to 0.61%

Today's Economic Calendar

6:00 NFIB Small Business Optimism Index
8:30 Producer Price Index
8:55 Redbook Chain Store Sales
12:00 PM Fed's Daly Speech
1:00 PM Results of $48B, 3-Year Note Auction

 

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