Friday Morning Reads
- Eddie Lampert’s Next Play
- Fed Ramps Up Goldman Probe
- G20 as Feud Brews
- Facebook (FB) COO Sheryl Sandberg asked for research on George Soros following his criticism. NY Times Report
- NYC Council will host hearings on Amazon (AMZN) agreement. WSJ Report
- Found Him
- The Stock Market’s Dangers Are Easier To See Now
- How Tariffs Work, and Why China Won’t See a Bill
- One Big Advantage
- Fed Jumps Off Predictable Path
- J Crew's elimination of Mercantile brand might put Amazon (AMZN) agreement in doubt. WSJ Report
- SoftBank (SFTBY) mobile unit will be valued at $63 bln (IPOXX). FT Report
- Toy supplies are limited for the holiday season (MAT, HAS, WMT, AMZN, XRT). NY Post Report
- Wrong About Index Funds
- Dousing the FIRE?
- Arconic (ARNC) is considering purchasing assets related to Grenfell fire. NY Post Report
- Campbell Soup (CPB) is having trouble selling Bolthouse Farms brand. NY Post Report
- A federal judge might reject CVS (CVS) / Aetna (AET) M&A deal. Reuters Report
- Officials have conducted a second day of a raid on Deutsche Bank (DB). Reuters Report
- Boeing (BA) plans to issue software upgrade related to Lion Air crash. Reuters Report
- AT&T (T) plans to introduce streaming service with 3 options (NFLX). WSJ Report
- Federal Reserve is increaing investigation into Goldman's (GS) compliance related to 1MDB issues. Bloomberg Report
- Marriott -5.6% as Starwood database breached
- Futures wobble as leaders gather at G20 summit
- Ghosn's detention extended by 10 days
- Congo Ebola outbreak second largest in history
- USMCA set to be signed at G20 summit
- Deutsche Bank raid continues for second day
- Hiccup in CVS-Aetna deal approval?
- U.S. companies vie for moon program funding
- Farm Bill advancing through Congress; legal hemp cultivation looming; shares up 29%
- AT&T likely to call home Warner content for new service; shares +1.2%
- GE may be eyeing larger Healthcare IPO
- China's factory growth is petering out
Shares across Europe and U.S. futures are drifting lower on the final day of November, as markets watch ongoing trade developments between the world's two largest economies. President Trump and China's Xi Jinping are expected to meet on the sidelines of the G20 summit in Argentina and the two leaders will have a dinner meeting with staff on Saturday evening. The presence of three top crude producers - Saudi Arabia, Russia and the U.S. - have also raised expectations that oil policy will be discussed in Buenos Aires.
The leaders of Mexico, Canada and the United States are due to sign a renewed North American trade pact this morning, although brinkmanship over its final details continued through yesterday evening. Officially known as USMCA, the ceremony will be held on the sidelines of the G20 summit. Legislators from the three countries still have to approve the pact, before it goes into effect.
Germany's Angela Merkel is finally on her way to Argentina, but will likely miss the first day of the summit, after her plane was forced to land in Cologne because of a technical defect. Meanwhile, German retail sales edged lower for a fourth straight month in October, dipping 0.3%, in a sign of weak consumer spending in the eurozone's largest economy.
Growth in China's manufacturing sector stalled for the first time in over two years in November, heaping pressure on Beijing ahead of high-stakes trade talks between Xi Jinping and President Trump. The official Purchasing Managers' Index fell to 50, indicating no growth in activity or contraction on a monthly basis. The survey also showed further weakness in new orders from at home and abroad.
House GOP leaders decided last night to suspend today's vote on their year-end tax bill, leaving few legislative days left to get approval before the House majority is relinquished to the Democrats. Republicans packed the catch-all legislation with provisions that for the most part enjoy broad support, but disagreements remain over revenue-raising offsets and technical corrections to last year's tax law.
The SEC will vote next week on asking companies and investors for feedback on the "nature and content of quarterly reports and earnings releases," following President Trump's request to take up the issue. SEC Chairman Jay Clayton doesn't expect quarterly reporting to change for most firms, particularly large ones, but he has expressed openness to possible changes for firms with revenue under $1B.
Pakistan's rupee tumbled as much as 5% overnight in what traders suspect was a currency devaluation amid bailout talks with the IMF. A delegation from the fund visited Islamabad earlier this month but left without an agreement on a new loan expected to be worth at least $7B. The two sides are expected to meet by mid-January for further discussions.
Ukrainian President Petro Poroshenko has accused Vladimir Putin of wanting to annex his entire country and called for NATO to deploy warships to the Sea of Azov, which is shared by the two nations. Poroshenko has also barred Russian men between 16 and 60 from traveling to his country, in order to prevent the Russians from forming "private armies" fighting on Ukrainian soil.
Marriott -5.6% premarket after revealing that its Starwood guest reservation database was breached, potentially exposing information on about 500M guests. Among the Marriott (NYSE:MAR) data taken included names, mailing addresses, phone numbers, email addresses, passport numbers, date of birth and gender. For some, the information also includes payment card numbers and payment card expiration dates.
Reassuring investors it can capitalize on its big acquisition of Time Warner, AT&T (NYSE:T) said it plans to offer three tiers of a new streaming video service next year that will feature original movies and TV series' from Warner Bros., Turner and HBO. AT&T also committed to cutting up to $20B in debt next year and expects 2019 adjusted earnings per share to grow in the low single digits.
SoftBank has set an indicative price of ¥1,500 per share for the IPO of its mobile phone business, which would see the unit raise $23B in one of the world's biggest-ever listings. The IPO is aimed at providing SoftBank (OTCPK:SFTBY) with funds to pay down debt and place big bets via its Vision Fund on innovations that CEO Masayoshi Son predicts will drive future trends in technology.
Samsung Electronics is canceling 4.88T won, or $4.4B, worth of corporate stock, benefiting investors by increasing the value of respective shares that remain on the market. Samsung (OTC:SSNLF) last year rejected pressure from U.S. activist fund Elliott Management for a major overhaul of its complicated structure, but accepted part of its proposals by revealing plans to cancel its existing treasury shares by 2018.
A police raid of Deutsche Bank is continuing today over money laundering allegations linked to the "Panama Papers." There is a large volume of material, according to a spokeswoman for the Frankfurt prosecutor’s office. Deutsche Bank (NYSE:DB) shares slipped 2.3% further in premarket trading, following a near 5% tumble on Thursday after the probe began.
The Ebola outbreak in eastern Congo is now the second biggest in history, with 426 confirmed and probable cases, resulting in 245 deaths since Aug. 1. Earlier this week, the WHO launched the first-ever clinical trial for potential Ebola treatments in the country. It includes Gilead's (NASDAQ:GILD) antiviral Remdesivir and three monoclonal antibody preparations: ZMapp, mAb 114 and Regeneron's (NASDAQ:REGN) 3470-3471-3479.
In an unusual move, Federal Judge Richard Leon raised the prospect of not approving CVS Health's (NYSE:CVS) deal to buy Aetna (NYSE:AET), which closed earlier this week. He objected to what he said was the government's and companies' treatment of him as a "rubber stamp," raising the prospect of not deciding on the deal until the summer, or perhaps rejecting it, before setting another hearing for Monday.
California Public Utilities Commission chief Michael Picker has indicated plans to examine PG&E's (NYSE:PCG) corporate structure and governance with an eye toward determining whether a breakup is needed. It's already investigating the utility over the cause of the California Camp Fire that destroyed the town of Paradise. The search for human remains officially ended Thursday with at least 88 people confirmed dead and nearly 200 still listed as missing.
NASA has named nine U.S. companies, including Lockheed Martin (NYSE:LMT), that will compete for $2.6B in contracts under the space agency's renewed long-term moon program. "Right now we're building a space station, we call it 'Gateway,' that's going to be in orbit around the moon. From there we want reusable landers that go back and forth to the surface," said NASA Administrator Jim Bridenstine. "We think we can achieve this in about 10 years... then go on to Mars."
Lockheed Martin has also won a $6.9M award from the U.S. Army to research and develop military exoskeletons, called ONYX (LMT). The technology is part of a push to equip a new generation of "super-soldiers," and can help fighters bogged down by heavy gear like body armor, night-vision goggles and advanced radios. Altogether, that can weigh anywhere from 90 to 140 pounds, when the recommended limit is just 50 pounds.
Boeing is considering plans to launch a software upgrade for its 737 MAX in six to eight weeks that would help address a scenario faced by the Lion Air crew during last month's deadly crash in Indonesia, Reuters reports. While cockpit procedures are already in place to tackle such problems, the new Boeing (NYSE:BA) update would disable an anti-stall system if the crew counteracted it by trimming or adjusting settings in the opposite direction.
Padmasree Warrior, the U.S. head of NIO (NYSE:NIO) - an electric carmaker seen as one of the main Chinese rivals to Tesla (NASDAQ:TSLA) - is leaving the company, marking the first major management departure since its September IPO. China is the world’s largest and fast-growing market for new-energy vehicles, with sales in the first 10 months of 2018 totaling 860K vehicles, up 75.6% Y/Y.
Top executives from German carmakers Volkswagen (OTCPK:VWAGY), BMW (OTCPK:BMWYY) and Daimler (OTCPK:DMLRY) are finalizing plans for a White House meeting on trade policy next week, which will likely take place on Tuesday. President Trump has been harshly critical on what he sees as an unfair trade imbalance on autos, and has threatened for months to impose tariffs on vehicles assembled in the EU.
A Tokyo court has approved a request from prosecutors to extend the detention of former Nissan (OTCPK:NSANY) and Mitsubishi (OTC:MMTOY) Chairman Carlos Ghosn through Dec. 10. Ghosn, who is also Chairman and CEO of Renault (OTCPK:RNLSY), has been held since Nov. 19. The charismatic boss is accused of reporting only about ¥5B ($44M) of nearly ¥10B in remuneration over the five years to March 2015.
Dell Technologies (NYSE:DVMT) +1.9% AH on broad growth.
Dollar Tree (NASDAQ:DLTR) +6.2% seeing minimal tariff impacts.
GameStop (NYSE:GME) -12.2% AH slashing its profit outlook.
HP (NYSE:HPQ) +1.3% AH driven by its personal systems unit.
TD Bank (NYSE:TD) -0.4% with gains in real-estate lending.
VMware (NYSE:VMW) +9.1% AH as cloud sales jumped.
Workday (NYSE:WDAY) +9.5% AH raising guidance.
In Asia, Japan +0.4%. Hong Kong +0.2%. China +0.8%. India +0.1%.
In Europe, at midday, London -0.7%. Paris -0.4%. Frankfurt -0.6%.
Futures at 6:20, Dow -0.5%. S&P -0.5%. Nasdaq -0.5%. Crude -1.7% to $50.60. Gold -0.2% to $1227.50. Bitcoin -8.8% to $3975.
Ten-year Treasury Yield -2 bps to 3.01%
Today's Economic Calendar
9:00 Fed's Williams: "The Global Economy: Addressing a Future Downturn"
9:45 Chicago PMI
1:00 PM Baker-Hughes Rig Count