Friday Morning Reads
- Rise of Robots
- Tech execs had a ‘productive' meeting at White House about jobs (XLK). AP Report
- Very Strong by Many Measures
- Blackstone (BX) near deal to purchase stake in GI Partners. Bloomberg Report
- Japan to ban Huawei Technologies and ZTE Corp (ZTCOF) from government contracts (ACIA, FNSR, LITE, IPHI). Reuters Report
- Huawei has agreed to UK demands to address security risks (EWU). FT Report
- Death Cross
- NYSE gave special treatment to stock broker who wanted to trade Morgan Stanley (MS) after hours. NY Post Report
- Amazon (AMZN) considering expansion at airports. Reuters Report
- Tesla (TSLA) plans to use stock/cash mix to help pay off debt. Bloomberg Report
- Boeing (BA) to cancel satellite order from China's government. WSJ Report
- CBS (CBS) investigation into Les Mooves might be coming to end soon. WSJ Report
- Futures red ahead of jobs report
- Crypto carnage as Bitcoin tumbles 11%
- OPEC holds another day of crunch talks
- GE's turbine problem goes global - Reuters
- Amazon Go getting ready for takeoff
- Latest executive departure of Tesla
- IBM to sell select software products to HCL Technologies for $1.8B
- Three top CEOs do not see U.S. economic slowdown ahead
- Boeing cancels satellite project financed by China
- Permian's Delaware Basin 2x bigger than Midland, USGS survey says
- S.Korea to boost air defenses with Raytheon order
- Tesla plans to use stock-cash mix to pay off debt due in March: Bloomberg
After a week of stock market motion sickness, a jobs report today that meets or exceeds expectations could offer a dose of calm. Economists expect payroll gains of 200K for November, an unchanged unemployment rate of 3.7% and average hourly earnings rising by 0.3%. Futures are red again ahead of the open, but rebounded on Thursday after media reports suggested the Fed could tighten monetary policy at a slower-than-expected pace.
OPEC has kicked off another day of talks on oil production curbs after a summit on Thursday ended with no deal, as Russia resisted the 1M bpd cut that Saudi Arabia was demanding. Other sticking points: Iran, currently subject to U.S. sanctions, sees no possibility of curbing its output. OPEC ministers are also discussing exemptions for Libya, Venezuela and Nigeria, which are opposed to participating in a supply reduction.
Switzerland’s divided cabinet looks bound for a clash with the EU following today's likely rejection of a draft treaty that has exposed deep divisions in Swiss attitudes toward its biggest trading partner. Brussels will likely ban EU-based banks and brokers from trading on Swiss stock exchanges beyond the end of 2018 as a punitive measure should Bern not sign off on the deal. In turn, that would prompt Swiss retaliation.
French President Emmanuel Macron will address France on the “yellow vest” movement early next week as the country braces for another wave of violent weekend protests over the cost of living. "The French people want answers. The President will send the message to the French that he is listening to their anger and that new solutions have obviously to be found," Transport Minister Elisabeth Borne told Sud Radio.
Germany's ruling Christian Democrats will vote to replace Angela Merkel as their leader today, with the successful candidate then a hot favorite to become future chancellor. Many delegates at the Hamburg congress say they will not make up their mind until they have heard the speeches of leading candidates Annegret Kramp-Karrenbauer, who is seen as a choice for "more Merkel," and Friedrich Merz, who appeals to the party’s traditionally conservative supporters.
Triggering carnage in the crypto markets, Bitcoin (BTC-USD) fell more than 11% overnight, as the SEC once again delayed its decision on a rule change for the first Bitcoin ETF (XBTF) from VanEck. The new deadline is February 27, 2019. Lawmakers in the U.S. also sought to introduce new rules on Thursday for the crypto industry aimed at protecting consumers and keeping America ahead in the space.
Amazon is looking at bringing its futuristic checkout-free store format to airports, according to public records and Reuters sources. Seven Amazon Go (NASDAQ:AMZN) stores have already been opened to the public since January: in Chicago, San Francisco and Seattle. Big business? More than 350M passengers boarded flights at the country’s top 12 airports last year, according to the U.S. Department of Transportation.
Eddie Lampert's ESL Investments has made an offer valued at $4.6B to buy Sears (OTCPK:SHLDQ), one of the only options that would prevent the bankrupt department store chain from shutting its doors permanently. "Sears is an iconic fixture in American retail," Lampert declared. "We continue to believe in the company's immense potential to evolve and operate profitably as a going concern with a new capitalization and organizational structure."
Walmart has scooped up Art.com, adding another digital brand to its portfolio and bolstering its home decor business. Walmart (NYSE:WMT) has been building a collection of e-commerce companies in categories ranging from clothing to lingerie since its roughly $3B acquisition of Jet.com in 2016. Those brands now include ModCloth, Moosejaw, Bonobos, Eloquii and Bare Necessities.
The news isn't getting any better for Huawei following the arrest of CFO Meng Wanzhou. Japan plans to ban government purchases of equipment from the Chinese firm and ZTE (OTCPK:ZTCOY) to beef up its defenses against intelligence leaks and cyberattacks. Pushed by a U.S. initiative, Australia, New Zealand and Britain's BT Group (NYSE:BT) have already blocked Huawei from building 5G networks amid fears that the equipment could contain "backdoors" for use by spies.
Meanwhile, Huawei's Meng Wanzhou is set to appear in a Vancouver court today for a bail hearing as she awaits possible extradition to the U.S. on allegations of evading sanctions on Iran. Separately, a White House official told Reuters that President Trump did not know about the request for Meng's extradition before he met with Chinese President Xi Jinping at the G20 summit.
More power problems? Utilities are shutting down at least 18 of General Electric's (NYSE:GE) newest gas turbines for repairs at power facilities from Taiwan to France, according to interviews with plant operators and industry experts. GE is setting aside $480M to repair its 9HA, 7HA and 9FB models, but has declined to say how many have been shut down, or when it would replace parts - if needed - in as many as 130 such turbines it has produced. GE -1.6%premarket.
"We know our airplanes are safe," Boeing (NYSE:BA) CEO Dennis Muilenburg reiterated, after Indonesia imposed new requirements for simulator training for 737 MAX pilots in the wake of last month's crash that killed 189 people. An automated flight control system on the 737 MAX was largely omitted from the plane's operations manual, according to the WSJ, and was the subject of debate inside Boeing.
Even as it moves to reduce tensions with Pyongyang, South Korea is planning to buy "dozens" of U.S.-built ship-to-air missiles for about $300M, to boost air defenses against North Korea. Since 2013, Seoul has bought Standard Missile-2s, developed by Raytheon (NYSE:RTN), to equip three Aegis destroyers preparing to be deployed in the mid-2020s.
Tokyo prosecutors are expected to indict Nissan's (OTCPK:NSANY) ex-chairman Carlos Ghosn, former representative director Greg Kelly and the automaker itself on Monday, the Nikkei reports. They'll likely be charged over misstatements in five annual reports through the fiscal year that ended in March 2015. Ghosn and Kelly are also likely to be arrested on new claims of underreporting an additional three years’ worth of salaries.
More executive departures... Tesla (NASDAQ:TSLA) General Counsel Todd Maron is leaving the EV maker, the second high-ranking attorney to do so this quarter. Last month, Phil Rothenberg left his post as Tesla's VP of Legal, to become general counsel at a hospitality startup. Seasoned Beltway trial lawyer Dane Butswinkas will replace Maron, reporting directly to CEO Elon Musk and overseeing Tesla’s legal and government relations teams.
Ride-hailing company Lyft has beaten bigger rival UBER in filing for an IPO, taking the lead on a string of billion-dollar-plus tech companies expected to join Wall Street next year. LYFT, last valued at about $15B in a private fundraising round, will test investors' appetite for ride-hailing businesses, which have become wildly popular but remain unprofitable and have an uncertain future with the advance of self-driving cars.
American Outdoor (NASDAQ:AOBC) AH with firearm, outdoor strength.
Broadcom (NASDAQ:AVGO) +5.2% AH driven by storage demand.
Kroger (NYSE:KR) +3.2% beating quarterly estimates.
Lululemon (NASDAQ:LULU) +0.1% AH following an earnings topper.
Ulta Beauty (NASDAQ:ULTA) -5.1% AH giving a light holiday forecast.
In Asia, Japan +0.8%. Hong Kong -0.4%. China flat. India +1%.
In Europe, at midday, London +1.4%. Paris +1.3%. Frankfurt +0.5%.
Futures at 6:20, Dow -0.4%. S&P -0.5%. Nasdaq -0.5%. Crude flat at $51.47. Gold +0.3% to $1247.60. Bitcoin -10% to $3385.
Ten-year Treasury Yield +1 bps to 2.89%
Today's Economic Calendar
8:30 Non-farm payrolls
10:00 Wholesale Trade
10:00 Consumer Sentiment
10:30 EIA Natural Gas Inventory
12:15 PM Fed's Reserve Gov. Lael Bralnard Speech
1:00 PM Baker-Hughes Rig Count
3:00 PM Consumer Credit