Friday Morning Reads
- Impeachment Is Back!
- $9 Billion China Rush
- Slowing Economy and Deflation
- Hedge Funds Struggle
- The Great Index Apocalypse
- Widening To A New Gap
- Feel a Chill on Wall St.
- How Will Impeachment Affect The Stock Market?
- A Framework For Evaluating Startups
- Wells Fargo recruits BNY Mellon's Scharf for CEO
- Futures reverse, point to gains
- AT&T declares $0.51 dividend
- Tesla's self-valet hits the road
- Morgan Stanley speculates on E&P sector mergers
- Key events next week - healthcare
- Trouble for Beyond Meat shorts
- Vaccinex's pepinemab shows encouraging action in treatment-resistant lung cancer
- Big Marathon shareholders seek CEO ouster
- WeWork halts all new lease agreements
- BAML expects Kimberly-Clark to rally
- Interactive Brokers launches 'Lite' service; rivals slip
- Facebook (FB) CEO Sheryl Sandberg could testify to Congress next month. Bloomberg Report
- Endeavor has pulled its IPO that was expected to begin trading today (IPOXX). WSJ Report
- Two large shareholders want Marathon Petroleum (MPC) CEO removed. WSJ Report
- Some Dish (DISH) customers have lost channels amid dispute with Fox (FOXA). WSJ Report
- WeWork (WE) puts a hold on all new lease agreements. FT Report
- Nestle (NSRGY) is increasing coffee testing after some beans had levels of the weedkiller glyphosate near regulatory limits. Bloomberg Report
- Apple (AAPL) aims to release films in theaters prior to the streaming releae dates (NFLX, AMZN, IMAX, AMC, MCS). WSJ Report
Open Interest Changes for Today:
Going public may be going out of style for now, with U.S. entertainment and talent agency Endeavor (EDR) becoming the latest to abandon its IPO, just hours before it was scheduled to price and list on the NYSE. A rocky debut from fitness company Peloton (NASDAQ:PTON) earlier Thursday shook sentiment, while WeWork (WE) shelved its IPO last week amid a plummeting valuation. The attitude appears to be rippling across industries, with shares of SmileDirectClub (NASDAQ:SDC), which started trading publicly earlier this month, falling 28% in their debut.
Go deeper: 'The IPO Rush - Promise And Peril' by Daniel Shvartsman.
The buying public appears to be saying that IPO prices are too high, even if the companies are centered around great concepts. For example, many of the firms going public are not profitable and are burning cash at a record clip, yet still boast impressive valuations. Some additionally feel that bankers are being more loyal to private investors than public buyers (JPMorgan was the lead underwriter for Peloton (PTON), SmileDirectClub (SDC) and WeWork (WE)). As a result, companies may try to stay private for longer or pursue direct listings.
Since the first ETF launched in 1993, all ETFs have had to cram themselves into the framework of rules established in 1940 for mutual funds despite being a very different type of product. That's now coming to an end, with the SEC adopting Rule 6c-11, which aims to simplify regulations governing ETFs and seeks to speed up the process of launching new funds while reducing associated costs. "The rule will level the playing field for ETF providers, allowing new participants to enter via a streamlined process," said Elisabeth Kashner, FactSet’s director of ETF research.
Go deeper: BLACKROCK (NYSE:BX), Vanguard and State Street (NYSE:STT) currently dominate the ETF space.
U.S. stock index futures are ahead by 0.4%, recouping some of the losses caused by yesterday's political turmoil. China's top diplomat, Wang Yi, said Beijing was willing to buy more U.S. goods, adding trade negotiations would yield results if both sides "take more enthusiastic measures" to show goodwill and reduce "pessimistic language." Also keep an eye on the chip sector following weak guidance from Micron Technology (NASDAQ:MU) late Thursday that caused the stock to slide 7% in after-hours trading.
Go deeper: 'Sentiment Continues To Shift For Micron' by Rick Pendergraft.
Investors betting against Beyond Meat's (NASDAQ:BYND) stock lost more than $80M in mark-to-market losses yesterday as the stock jumped 11% on an announcement that its plant-based burgers would be tested at McDonald's (NYSE:MCD) in Canada. Short positions have now lost more than $730M in market-to-market losses, according to S3 Partners analyst Ihor Dusaniwsky. "BYND has been a major short sale target since its IPO and short sellers have already maxed out stock borrow availability in the stock."
Go deeper: Beyond Meat's Revenue Needs To Grow 35% A Year' writes Kwan-Chen Ma.
Two large shareholders in Marathon Petroleum (NYSE:MPC) - Paul Foster and Jeff Stevens - are backing a proposal by Elliott Management to split the company into three units, but are taking things one step further by calling for CEO Gary Heminger to be replaced. Foster and Stevens served as chairman and chief executive, respectively, of Western Refining, which was acquired by Andeavor in 2017. Marathon then bought Andeavor for $23B last year and is now the second-largest independent U.S. refiner by market cap. MPC +0.3% premarket.
Go deeper: Fun Trading discusses underperformance at Marathon.
Tesla's (NASDAQ:TSLA) version 10 software update includes Smart Summon, which lets customers with Full Self-Driving Capability or Enhanced Autopilot to summon their car as long as it's within line of sight. As laws governing autonomous vehicle technology are still evolving in the U.S., Tesla cautions drivers using the function to "remain responsible for the car and monitor it and its surroundings at all times." The latest update is likely to be welcomed by investors, which sent Tesla shares up 6% on Thursday as an email from Elon Musk stated the EV maker "has a shot" at delivering 100K cars in Q3.
A new visa program will launch Saturday in a bid to draw foreign companies to invest in the country's tourism sector, with the goal of it contributing 10% of GDP within a decade. The decision is part of Crown Prince Mohammed bin Salman's Vision 2030, an economic plan which aims to reduce the kingdom's oil dependency. As part of the move, the country will relax strict dress codes for female visitors that previously required them to wear all-covering black robes, or abayas.
Go deeper: Holdings in the iShares MSCI Saudi Arabia ETF (NYSEARCA:KSA).
Even if a no-deal Brexit is avoided, high levels of uncertainty would persist and act as a kind of "slow puncture" for the U.K. economy, Bank of England policymaker Michael Saunders declared, prompting the pound to drop 0.4% overnight. "In this case, it might well be appropriate to maintain a highly accommodative monetary policy stance for an extended period and perhaps to loosen policy at some stage, especially if global growth remains disappointing." Interest rates at the BoE have been on hold at 0.75% since August 2018, when they were raised from 0.5%.
Go deeper: Brexit Roundtable: A Q&A With Our European-Focused Contributors.
What else is happening...
Second-quarter U.S. GDP left at 2%.
In Asia, Japan -0.8%. Hong Kong -0.3%. China +0.1%. India -0.4%.
In Europe, at midday, London +1.1%. Paris +0.3%. Frankfurt +0.9%.
Futures at 6:20, Dow +0.4%. S&P +0.4%. Nasdaq +0.4%. Crude +0.2% to $56.53. Gold -1.1% to $1499. Bitcoin -5% to $7999.
Ten-year Treasury Yield +4 bps to 1.72%
Today's Economic Calendar
8:30 Durable Goods
8:30 Personal Income and Outlays
8:30 Fed’s Quarles: “Macroprudential Regulation”
10:00 Consumer Sentiment
12:00 PM Fed's Harker: Economic Outlook
1:00 PM Baker-Hughes Rig Count
3:00 PM Farm Prices