Highlights

Wall Street Breakfast

Author: bmotrader   |   Latest post: Thu, 14 Nov 2019, 10:23 AM

 

Wall Street Breakfast: Signs Of Trade Progress Resurface

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U.S. stock index futures turned sharply higher overnight, climbing 0.6%, as China's Ministry of Commerce said the the world's two largest economies had agreed to remove duties on each other's goods in phases. "If China, U.S. reach a phase-one deal, both sides should roll back existing additional tariffs in the same proportion," declared spokesman Gao Feng. That would potentially provide a road map to end the bruising trade war after reports yesterday suggested a meeting between President Trump and Xi Jinping could be postponed until December (delaying a chance for the two leaders to sign an interim trade deal).

Disney + earnings

Disney (NYSE:DIS) will take centerstage later today when it reports fiscal-fourth results after the market close. Analysts are anticipating a challenging quarter for the Mouse House, specifically at its media networks division due to increased spending on the Disney+ streaming service (set to launch this Tuesday). However, Disney's film unit will have likely gotten a strong boost - thanks in part to The Lion King - and its parks segment is also expected to have performed well during the quarter.
 

Google may modify ad policy

Google (GOOG, GOOGL) is considering changes to its political ad policy following a shot across the bow by Twitter (NYSE:TWTR), which said it would ban all political ads in a thinly veiled jab at its megatech rivals. Google's been holding internal meetings on the issue and is expected to share more with employees this week, WSJ reports. Twitter announced its move in the wake of heavy public discussion about Facebook's (NASDAQ:FB) refusal to ban political ads, a decision that Mark Zuckerberg has publicly defended.
 

Big Tech investigations

Twitter (TWTR) shares fell 2.5% premarket after the DOJ charged two former employees with spying for Saudi Arabia in part by digging into user accounts on the service. California also revealed for the first time an 18-month probe into Facebook's (FB) privacy practices and accused the social media giant of stonewalling the investigation by failing to turn over Zuckerberg's emails. Lastly, Alphabet's (GOOG, GOOGL) board of directors is inquiring how executives handled claims of sexual harassment and other misconduct, including the behavior of Chief Legal Officer David Drummond.
 

Kicking off 6G development

It was only last week that China launched commercial services for its superfast 5G mobile networks, but the country is not stopping there. The government has charged 37 experts at various universities and institutes to oversee the research of 6G, according to a statement by the Ministry of Science and Technology. While 5G is known to have data transmission speeds at least 10x greater than 4G - rolled out in 2009 - it's too early to tell what 6G could be or what technologies it would advance.

BOE rate decision ahead

The latest in Brexit continues this morning as the Bank of England announces its latest interest rate decision and releases new economic forecasts - the first it's made since the departure date from the EU was delayed. Many expect the bank to cut its outlook for growth and inflation, though it has drawn criticism in the past from Brexit supporters for what they see as overly gloomy predictions. The BOE will then enter a pre-election quiet period, but will re-emerge after the Dec. 12 vote with the question of who will replace Governor Mark Carney.

Production cuts ahead of Aramco IPO?

Saudi Arabia, the de facto leader of OPEC, is pressuring other members in the cartel to slash output to help Aramco's (ARMCO) IPO set for December, WSJ reports. While the oil giant's growth assumptions, as well as the dividend it's promising investors, are predicated on Brent oil prices of about $65 a barrel, some do not expect another supply cut at this month's OPEC meeting. "The last thing OPEC wants is to give a second wind to shale producers here in the U.S.," Tariq Zahir of Tyche Capital Advisors told MarketWatch.

Tiffany wants a higher offer

$120 per share is too low for the basis of negotiations, according to Tiffany's (NYSE:TIF) board, which asked Bulgari owner LVMH (OTCPK:LVMHF) to raise its $14.5B takeover bid. Tiffany informed LVMH it could open its books and provide confidential due diligence if the French luxury group sweetens the pot, sources told Reuters. Under CEO Alessandro Bogliolo, former head of fashion firm Diesel and a Bulgari alumnus, Tiffany has been developing its e-commerce business and is trying to court younger shoppers.

Backlash against vaping

A week after banning online sales of e-cigarettes, China outlined plans to prohibit vaping in public places to stem a "distinct increase" in activity among teenagers. The stance would put China squarely with countries that have outlawed e-cigarettes outright, including India, Brazil and Singapore. Already the world's largest tobacco market, China's e-cig market size rose from $451M in 2016 to $718M in 2018, according to estimates from L.E.K. Consulting.

Wednesday's Key Earnings
Baidu (NASDAQ:BIDU) +4.3% AH beating expectations.
Barrick Gold (NYSE:GOLD) +2.2% seeing FY output at the high end.
CenturyLink (NYSE:CTL) +1.1% AH posting EBITDA margin growth.
CVS Health (NYSE:CVS) +5.4% boosted by Aetna sales.
Energy Transfer (NYSE:ET) -3.2% AH missing estimates.
Expedia (NASDAQ:EXPE) -13.3% AH falling short of forecasts.
Fitbit (NYSE:FIT) -0.7% AH following price cuts.
Fox (NASDAQ:FOX) +3.8% AH as broadcasting drove a Q1 beat.
Qualcomm (NASDAQ:QCOM) +5% AH jumping on an earnings topper.
Roku (NASDAQ:ROKU) -15.1% AH despite a smaller-than-expected loss.
Square (NYSE:SQ) +1.3% AH as GPV rose 25% Y/Y.
Wynn Resorts (NASDAQ:WYNN) +1.6% AH despite weak Macau numbers.

Today's Markets

In Asia, Japan +0.1%. Hong Kong +0.6%. China flat. India +0.5%.
In Europe, at midday, London +0.2%. Paris +0.2%. Frankfurt +0.7%.
Futures at 6:20, Dow +0.6%. S&P +0.5%. Nasdaq +0.6%. Crude +1.2% to $57.03. Gold -0.6% to $1483.80. Bitcoin -1.7% to $9209.
Ten-year Treasury Yield +6 bps to 1.87%

Today's Economic Calendar

8:30 Initial Jobless Claims
10:30 EIA Natural Gas Inventory
1:00 PM Results of $19B, 30-Year Note Auction
1:05 PM Fed's Kaplan Speech
3:00 PM Consumer Credit
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
7:10 PM Fed's Kaplan: Monetary Policy

 

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