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Wall Street Breakfast

Author: bmotrader   |   Latest post: Fri, 27 Nov 2020, 6:40 AM

 

Wall Street Breakfast: New Era Of Flight

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Get ready for the next SpaceX (SPACE) flight to the International Space Station, which will take place on Saturday at 7:49 p.m. EST. While the company already completed its maiden trip to the ISS back in August, sending up astronauts Bob Behnken and Doug Hurley on a Crew Dragon capsule and Falcon 9 rocket, the latest launch comes after NASA formally authorized SpaceX for regular human spaceflight. The last time a certification was issued was nearly 40 years ago under the space shuttle program, but that wasn't a commercial system. "NASA's partnership with American private industry is changing the arc of human spaceflight history by opening access to low-Earth orbit and the International Space Station to more people, more science and more commercial opportunities," NASA commercial spaceflight director Phil McAlister declared. Other companies looking to break into the industry are Blue Origin (BORGN), Boeing (NYSE:BA) and Virgin Galactic (NYSE:SPCE).

Vertiport

It's not the only exciting development happening in the space. The city of Orlando, Fla., and German aviation startup Lilium have unveiled plans to build the first hub for flying cars in the U.S. The $25M, 56,000-square-foot transportation hub, called a vertiport, is scheduled to be completed in 2025 and will enable passengers to bypass Florida's congested highways. Electric-powered aircraft, still in developmental phase, will be able to take off and land vertically (eVTOL) from the ground-based hub and reach a top speed of 186 miles per hour.

Quarterly results

Following a quieter week on the earnings front, investors had several names to watch after the bell on Thursday. Disney (NYSE:DIS) rose as much as 6% after revealing 73M paid subscribers for streaming service Disney+ (it had targeted 60M-90M subscriptions by 2024), though its other divisions (parks, studio) struggled during the coronavirus pandemic and it had to forego another dividend. Cisco (NASDAQ:CSCO) soared nearly 9% after starting its fiscal year with softer-than-expected earnings drop and issuing FQ2 guidance that exceeded expectations. Meanwhile, shares of Palantir (NYSE:PLTR) bounced around in extended trading on a wider loss, though the data analytics firm showed 52% sales growth in the first earnings report since its public debut.

Rally resumes

After rotating out of stay-at-home plays on Monday, only to have a tech rally resume days later, traders have been getting whipsawed nearly every session this week. While all three major U.S. indices closed lower on Thursday, stock index futures are in the green this morning, climbing nearly 1% ahead of the open. Many are still weighing the impacts of surging COVID-19 cases and a vaccine rollout against hopes of turning the corner on the pandemic and expectations that pro-business policies will remain after last week's U.S. elections. Initial claims for jobless benefits also declined to 709,000 last week from 757,000 a week earlier, but are still well above levels of about 200,000 seen before the coronavirus hit this spring.

Central bank digital currencies

"My hunch is that it will come," ECB President Christine Lagarde said during a virtual panel discussion with her U.S. and British peers. "If it's cheaper, faster, more secure for the users then we should explore it. If it's going to contribute to a better monetary sovereignty, a better autonomy for the euro area, I think we should explore it." It still might be two to four years before the project could be launched as the ECB addresses concerns over money laundering, privacy and the technology involved. On the same panel, Jerome Powell said the Fed will "carefully and thoughtfully" review the issue, while Bank of England Governor Andrew Bailey said there's a "lot of hard work to think through the implications."

Shelton headed for confirmation vote

The nomination of Judy Shelton has been stalled in the Senate due to wavering GOP support despite the finance committee clearing her by a narrow party-line 13-12 vote in July. With Sen. Lisa Murkowski (R-Alaska) jumping on board, Mitch McConnell said he will now advance Shelton's name to the Senate floor for a confirmation vote, marking President Trump's latest imprint on the Federal Reserve. Shelton has a long history of unorthodox economic commentary, like questioning the basic role of the Fed and advocating a return to the gold standard. Being only one governor, she won't have disproportionate influence on monetary or regulatory policy, but she could dissent frequently from decisions or challenge the current Fed atmosphere.

U.S. backs down on TikTok

The Commerce Department backed down from a deadline yesterday on TikTok, saying it won't enforce an order that required the company be spun off from its Chinese parent, ByteDance (BDNCE). The move would have barred companies from providing internet hosting or content delivery services to TikTok, effectively making it inoperable in the U.S., and there's been little comment from President Trump or the administration on what was once an energetic effort to get TikTok sold to U.S. interests. Deals currently on the table, but hung up in ongoing negotiations, have Oracle (NYSE:ORCL) and Walmart (NYSE:WMT) taking a combined 20% in TikTok Global, a new U.S.-based company that would run the video service.

Xi reportedly pulled plug on Ant's IPO

Chinese President Xi Jinping personally made the decision to halt the listing of Ant Group on Nov. 3, which would have been the world’s biggest IPO, Chinese officials told WSJ. The decision came days after the fintech giant's billionaire founder Jack Ma publicly criticized the government's increasingly tight financial regulation for holding back technology development. At that point, investors around the world had already committed to paying more than $34B for shares of Ant, which is a third owned by Alibaba (NYSE:BABA). Since Xi rose to power in late 2012, the government has taken action and cracked down on some of the country's highest-profile private conglomerates, including Dalian Wanda and Anbang Insurance Group.

Largest free trade deal ever

China will sign a mega trade deal this weekend with Japan, South Korea, Australia, New Zealand and the 10 ASEAN member countries, wrapping up years of negotiations before the next U.S. administration comes into office. The Regional Comprehensive Economic Partnership, which covers 30% of global GDP and trade, aims to reduce tariffs, strengthen supply chains with common rules of origin and codify new e-commerce rules. Beijing has looked to RCEP as an opportunity to write regional rules and diversify its avenues of trade amid declining economic relations with the U.S. after it pulled out of the Trans-Pacific Partnership in 2017 and engaged in a broader tariff war.
    
What else is happening...

Musk questions accuracy of rapid coronavirus antigen tests.
Ford (NYSE:F) makes big EV push with new E-Transit van.
U.S. refiners seek strategies to adapt to lower demand - S&P Global.
Deutsche Bank raises Snap (NYSE:SNAP) target on AR commerce potential.
Trump stokes speculation he'll launch a Fox (NASDAQ:FOX) rival.
    
Today's Markets

In Asia, Japan -0.5%. Hong Kong -0.1%. China -0.9%. India +0.2%.
In Europe, at midday, London -0.2%. Paris +0.6%. Frankfurt +0.4%.
Futures at 6:20, Dow +0.9%. S&P +0.9%. Nasdaq +0.8%. Crude -0.9% to $40.74. Gold +0.3% at $1878.50. Bitcoin +2.3% to $16130.
Ten-year Treasury Yield flat at 0.9%

Today's Economic Calendar

7:00 Fed's Williams Speech
8:30 Producer Price Index
8:30 Fed's Bullard: U.S. Economy and Monetary Policy
10:00 Consumer Sentiment
10:30 EIA Natural Gas Inventory
1:00 PM Baker-Hughes Rig Count

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