Monday Morning Reads
- Not Likely to Rise
- Not Worried About Inflation
- Ready To Break
- Bitcoin Regulation
- A ‘Huge Tailwind for Businesses’
- Stocks May Dive 25% If 10-Year Yield Hits 4.5%
- Morgan Stanley Takes on Goldman
- Biggest Loan Fraud
- Abandoning the NRA
- Head and Shoulders
- Bottom Scans I
- Bottom Scan II
- Bottom Scan III
- Overbought / Oversold
- Bull Flags
- Channel Up Scan
Unusual Option Action:
Techies are gathering in Barcelona, Spain for the Mobile World Congress, which kicks off today and runs through March 1. The trade show brings together mobile and phone manufacturers, distributors, carriers and engineers - apart from Apple (NASDAQ:AAPL) - to present their latest work and share their vision of the future. While this year's keynote speeches are mostly made up of the heads of various telecoms, a few non-mobile tech leaders will also be speaking, including FCC Chairman Ajit Pai.
Representatives from the U.S., Mexico and Canada opened the seventh round of NAFTA negotiations yesterday, hoping for a breakthrough on the toughest issues before upcoming elections. The meeting follows a report from The Washington Post that suggested Mexico's Enrique Pena Nieto shelved plans to make his first visit to the White House following a testy call with President Trump over border wall funding.
The selloff in Treasuries, that began in earnest in September and ramped up in January, is ending, according to Morgan Stanley, taking on Goldman Sachs and Warren Buffett with a bullish bond call. "We think the bell has tolled for the best of the bear market in longer-duration bonds," said the team led by Matthew Hornbach, global head of interest-rates strategy. "We like the long end."
Switzerland should launch a cryptocurrency version of the Swiss franc to gain a competitive lead in digital technologies, its stock exchange chairman, Romeo Lacher, told the FT. An "e-franc" backed by the Swiss central bank would boost the local economy as well as electronic payment systems. Earlier this year, Johann Schneider-Ammann, economics minister, said Switzerland wanted "to be the crypto-nation."
Germany's Christian Democrats will meet today to approve a coalition deal with the Social Democrats, a step that will take their leader, Angela Merkel, closer to a fourth term as chancellor of Europe's largest economy. The last major hurdle to end a five-month political impasse will come next week, however, when the results of a postal vote by SPD members are announced on March 4.
China's Communist Party has proposed eliminating a two-term constitutional cap on presidential terms, according to the official Xinhua News Agency, solidifying signs that Xi Jinping intends to stay in power indefinitely. Meanwhile, U.S. trade envoy Robert Lighthizer is scheduled to meet this week with senior Chinese economic adviser Liu He, as President Trump considers new tariffs on steel imports.
Samsung has launched its flagship S9 and S9+ smartphones, with improved cameras and AR capabilities to challenge the iPhone X (AAPL). While the device itself doesn't look radically different than the Galaxy S8 (OTC:SSNLF), it includes many new and improved features. Among them: Qualcomm's (NASDAQ:QCOM) latest Snapdragon 845 processor, stereo speakers for a surround sound-like experience, wireless charging, a headphone jack and an upgraded smart assistant Bixby.
There's also a lot of 5G news at the Mobile World Congress. Airbus (OTCPK:EADSY), Delta (NYSE:DAL), Sprint (NYSE:S) and others have formed the "Seamless Air Alliance" to develop in-flight 5G services through satellite technology. Nokia (NYSE:NOK) is deploying network solutions for Vodafone Italy's (NASDAQ:VOD) 5G trial in Milan and Huawei unveiled its first 5G chip - called the Balong 5G01 - in a challenge to Qualcomm (QCOM) and Intel (NASDAQ:INTC).
General Electric plans to restate the last two years of corporate profits, resulting in a cut of $0.13 in reported earnings per share for 2016 and $0.16 per share for 2017. The reduction comes as the conglomerate adopts new accounting standards for recognizing revenue from long-term contracts amid an SEC investigation into the method. GE will make the restatements on April 20.
The Weinstein Company is filing for bankruptcy. That announcement ends a fire-sale saga where the beleaguered studio discussed transactions (likely around $500M) with a number of bidders, including Lions Gate (LGF.A, LGF.B), a coalition of Killer Content/Abigail Disney, private investment firms, Colony Capital (NYSE:CLNS) and a group headed by former SBA head Maria Contreras-Sweet.
Black Panther continues to dominate the box office. The Disney (NYSE:DIS) movie earned more than $100M in its second weekend at the U.S. box office, becoming only the fourth film in history to achieve that feat. With a further $83.8M coming from international markets this weekend, Black Panther has made a total of $704M worldwide since its release.
Ratings for the PyeongChang Winter Olympics have slid downhill again and many are warning that NBC (NASDAQ:CMCSA) could have trouble turning a profit on them in the coming years after shelling out $7.7B to broadcast the games through 2032. Excluding NBCSN - which wasn't available in Sochi - overall ratings were on track to slide over 18% from four years ago and down 24% among the age 18-49 demographic. Despite the ugly forecasts, NBC still expects ad revenue to reach a record $940M.
Looking to comply with new laws, Apple (AAPL) this week will begin hosting Chinese users' iCloud accounts in a local data center, taking a step that alarms some privacy specialists: storing the encryption keys for those accounts in China. "Once the keys are there, they can't necessarily pull out and take those keys because the server could be seized by the Chinese government," said Matthew Green, a professor of cryptography at Johns Hopkins University.
UPS is suing the EU for €1.7B in compensation for the damage it said it suffered when regulators wrongly vetoed its attempted takeover of TNT Express (OTCPK:TNTEY). The company wants to "be put in the position it would have been in had the unlawful decision not been adopted" and blocking the deal prevented UPS "from materializing the benefits associated with the transaction."
The list of companies cutting ties and partnerships with the NRA is growing as consumers voice outrage against the gun lobby following the Florida high-school shooting that left 17 people dead. Among them: Chubb (NYSE:CB), MetLife (NYSE:MET), Symantec (NASDAQ:SYMC), Delta Air Lines (DAL), United Airlines (NYSE:UAL), Avis Budget Group (NASDAQ:CAR), Hertz (NYSE:HTZ) and Enterprise Holdings, which operates the Enterprise, Alamo and National rental-car chains.
Corporate tax reform is a "huge tailwind" for American businesses, Warren Buffett declared following his annual letter to shareholders. Berkshire's (BRK.A, BRK.B) net-worth increased last year to $65.3B, with $29B of that coming from the change in tax law. The Oracle also commented on his insurance division, saying the company lost $3B from Hurricanes Harvey, Irma, and Maria, but refrained from going through Berkshire's other operations.
Deutsche Bank plans to float its asset management arm DWS on the Frankfurt stock exchange, fighting to regain investor trust following years of scandals and restructuring. The IPO will take place "in the earliest available window," the bank said in a statement, and will only sell existing shares held indirectly by Deutsche Bank (NYSE:DB) for up to €2B.
It's the latest automaker to ditch diesel. Under a four-year plan to be unveiled on June 1, Fiat Chrysler (NYSE:FCAU) will say it intends to phase out the fuel type from its cars brands, FT reports. Once the dominant fuel source in Europe, diesel's market share has been falling following the VW emissions scandal, rising political opposition and plans by several cities to ban it altogether.
Daimler and its Chinese partner BAIC (OTC:BCCMY) plan to invest almost $2B in a state-of-the-art factory in China, underlining their relationship as rival Geely (OTCPK:GELYY) made a surprise swoop on the German company. The Chinese carmaker just unveiled a 9.7% stake, making it Daimler's (OTCPK:DDAIF) biggest shareholder. Geely also owns Volvo Cars, as well as holdings in Lotus, Proton, Volvo Trucks and Terrafugia.
Boeing will have a 51% stake in a joint company currently being negotiated with Embraer (NYSE:ERJ), according to O Globo, while Valor Economico reported that the proposal would give Boeing an 80%-90% stake in a new commercial jet unit. The proposed tie-up would make Boeing (NYSE:BA) the leader in the smaller passenger plane market, creating stiffer competition for Bombardier's CSeries (OTCQX:BDRAF, OTCQX:BDRBF), which is backed by European rival Airbus (OTCPK:EADSY).
In Asia, Japan +1.2%. Hong Kong +0.8%. China +1.2%. India +0.9%.
In Europe, at midday, London +0.5%. Paris +0.4%. Frankfurt +0.3%.
Futures at 6:20, Dow +0.7%. S&P +0.4%. Nasdaq +0.3%. Crude -0.2% to $63.43. Gold +0.8% to $1340.80. Bitcoin +1% to $9681.
Ten-year Treasury Yield -1 bps to 2.86%Today's Economic Calendar
8:00 Fed's Bullard: U.S. Monetary and Economic Policy
8:30 Chicago Fed National Activity Index
10:00 New Home Sales
10:30 Dallas Fed Manufacturing Survey