Friday Morning Reads
- Election That Upends Britain
- End of a Global Trade Era
- Not Anymore
- `Economic Ballet.’
- Curse of a Phase One and Done
- Slash Rates to Zero Before the End of 2020
- Murder of the American Dream
- Fed's half a trillion repo intervention
- Futures point to fresh record highs
- AT&T launches consumer 5G in 10 cities
- No Nvidia concessions for Mellanox deal
- Permian firms must drill more just to maintain current production - report
- McDonald's turns vegan in U.K.
- House passes drug pricing bill, Senate unlikely to support
- Sarepta up 36% premarket on FDA nod for golodirsen
- Exelixis reports positive data from IMspire150 trial
- FDA OK's extended-release Xeljanz for ulcerative colitis
- Sterling surges as Boris wins big
- Ciena gains bull on earnings, 5G potential
Sterling is trading at $1.3474, more than 2.4% higher, while the FTSE 100 is up 1.8%, as Boris Johnson returned to Downing Street with a big parliamentary majority. The "huge great stonking mandate" likely means backing for his Brexit deal and the departure from the EU by the end of next month. While that reduces a significant amount of Brexit uncertainty, the U.K. could still have a hard exit from the single market and customs union at the end of 2020 if the two sides cannot strike a trade agreement.
Winning 48 of Scotland's 59 seats in the national parliament, the SNP's Nicola Sturgeon is expected to write to Johnson next week asking him for approval to stage a new independence referendum. While he "may have a mandate to take England out of the European Union, he emphatically does not have a mandate to take Scotland out of the EU," she declared. Part of the U.K. for more than 300 years, Scotland rejected independence by 10 percentage points in a 2014 referendum (that was before Brexit).
Stepping up their fight against climate change, EU leaders have agreed to cut the bloc's greenhouse gas emissions to net-zero by 2050. The only standout was Poland. It refused to implement the decision before June, seeking financial assurances to safeguard its economy, which relies on coal for 80% of its energy needs. Funding shortfall? The EU Commission estimates the bloc's 28 members - including the U.K. - could need as much as €575B annually to cover the costs of reaching their mid-century target.
Stocks soared across the board overnight on news of an imminent trade deal between the U.S. and China, as well as the end to Brexit deadlock, as traders crave some certainty in what is already a banner year for markets. Shanghai advanced 1.8% and the Euro Stoxx 50 posted gains of 1.5%, while U.S. equity index futures are ahead by 0.5%, setting up fresh record highs for Wall Street. A gauge of U.S. consumer health is also on tap as the Commerce Department releases retail sales for November, which includes the busy Black Friday holiday.
Concerns are high that banks will pull back from lending ahead of regulatory capital calculations on Dec. 31, triggering flashbacks of when overnight repo rates jumped as high as 10% in September. A new plan from the New York Fed includes overnight lending across New Year totaling $225B and $190B in longer-term repo loans - starting next week - that will provide cash to borrowers into 2020. Together with $75B of cash already provided to the market to cover year-end, the Fed will have $490B in lending outstanding, nearly double the scale of its recent repo interventions.
AT&T (NYSE:T) has switched on its 5G service in 10 markets, including Los Angeles, San Diego and Pittsburgh, as it begins selling the Samsung (OTC:SSNLF) Galaxy Note10+ to take advantage of the new network. It's what the company is calling "low-band 5G" - for consumers on mobile devices vs. the high-band 5G+ built to serve businesses, large stadiums or campuses. Both are based on new 5G tech, as compared to the LTE-based 5G Evolution service that customers had until now.
Since August, Refinitiv has blocked more than 200 stories about the Hong Kong protests plus numerous other Reuters articles that could cast Beijing in an unfavorable light, according to an exclusive report from Reuters. Internal Refinitiv documents show that over the summer, the company installed an automated filtering system to facilitate the censoring. Refinitiv was formed last year when a consortium led by Blackstone (NYSE:BX) purchased a 55% stake in Thomson Reuters' Financial & Risk business (NYSE:TRI), which included its Eikon terminal business, for about $20B.
Shares of Hertz (NYSE:HTZ) and Avis (NASDAQ:CAR) dropped sharply on Thursday after Lyft (NASDAQ:LYFT) introduced a car rental service allowing customers to rent a vehicle without having to go to the counter. The service that has no mileage limits, cars can be taken for a day or up to two weeks, and 22 will be set minimum age for a renter. Lyft will also charge the "local market rate" for gas and provide renters with two $20 ride credits to cover the cost of taking a Lyft to and from the rental points.
In a LinkedIn post entitled "A Love Letter to Walmart," Bonobos founder Andy Dunn said he would be leaving the company in early 2020, more than two years after it bought his menswear brand. Dunn, currently SVP of digital consumer brands at Walmart (NYSE:WMT) U.S. eCommerce, became part of the company’s efforts to take on Amazon (NASDAQ:AMZN) and other online sellers. But recently, Walmart has been evaluating its clothing brands, selling women’s apparel brand ModCloth and, according to media reports, had discussed even selling Bonobos.
What else is happening...
House passes drug pricing bill, Senate unlikely to support.
In Asia, Japan +2.6%. Hong Kong +2.6%. China +1.8%. India +1.1%.
In Europe, at midday, London +1.8%. Paris +1.2%. Frankfurt +1.2%.
Futures at 6:20, Dow +0.5%. S&P +0.5%. Nasdaq +0.5%. Crude +1.3% to $59.93. Gold +0.2% to $1475.80. Bitcoin +0.7% to $7224.
Ten-year Treasury Yield flat at 1.89%