Monday Morning Reads
- The Week Ahead
- 60 Minutes does investigative report on doctors who prescribe opioid pills (MNK). CBS News Report
- Alibaba's (BABA) Jack Ma has relinquished his ownership of legal structures for the company. FT Report
- Shell (RDS.A) and other partners have agreed to $31 bln liquefied natural gas project in western Canada (LNG, GLNG, PTR). Bloomberg Report
- Fiat (FCAU) will introduce new management structure today. Reuters Report
- ICE (ICE) near deal to take full control of full control of Mortgage Electronic Registration Systems. FT Report
- ConocoPhillips (COP) has sold stake in Sunrise gas field to East Timor. Reuters Report
- Enbridge (ENB) looking at long term pipeline deals. Bloomberg Report
- Elon Musk emails staff to say Tesla (TSLA) is nearing profitability. Bloomberg Report
- California makes toughest net neutrality law, and DOJ sues
- Musk: Tesla 'very close' to profitability
- Report: Coke, Unilever on shortlist for GSK India nutrition unit bidding
- Cal-Maine Foods misses by $0.23, misses on revenue
- U.S. and Canada reach last-minute pact to revise Nafta
- Momenta Pharmaceuticals completes strategic review to refocus its operations and drive shareholder value
- Vanguard declares monthly distribution on ETF funds
- Facebook could face $1.6B fine in Europe over data breach: WSJ
- The Watchlist
- Week Ahead Webinar
- Today's Option Recap
- 2018 Top 5 For Back Half of 2018
- 2018 Top 5 Stocks
Open Interest Changes:
Taking it down to the wire, the U.S. and Canada struck a deal Sunday night to revise the North American Free Trade Agreement just before a U.S-imposed deadline of October 1. The pact allows Canada to join the accord reached between the U.S. and Mexico in August. The new agreement, to be officially called the U.S.-Mexico-Canada Agreement, now includes rules for financial services and digital business that have emerged since Nafta was originally signed in 1994. Canada agreed to curb protection for its dairy industry, while the U.S. dropped demands to get rid of special Nafta courts that allow member states to challenge trade restrictions imposed by others. The Canadian dollar gained 0.7% against the U.S. dollar and the Mexican peso jumped 1.1%against the greenback.
With tensions at a heavy simmer, China canceled a high-level annual security meeting with the U.S. planned for mid-October, saying a high-level military official wouldn't be available to meet with Defense Sec. James Mattis. Aside from ongoing trade tensions, the news follows on recent developments in the military arena, including U.S. equipment sales to Taiwan and B-52 flyovers in the East China Sea and South China Sea.
Italian bonds fell for a third day as investors brace for potential friction between the European Union and Italy's populist government over the country's budget proposal that targets a 2019 deficit of 2.4%. Italy's two-year government bond yield is up almost 10 basis points to 1.12%; yields rise when bond prices fall. Its 10-year government bond yield is up almost 6 bps at 3.20%. Italian publication La Repubblica reported that the European Commission is poised to reject the country's budget plans in November and open a procedure against its public accounts in February.
U.S. stock markets are all poised to rise as U.S. and Canada trade negotiators hammered out an agreement that rewrites the 24-year-old North American Free Trade Agreement. S&P futures have risen 0.6%, Dow futures are up 0.7% and Nasdaq is up 0.8%. In Europe, Stoxx Europe 600 Index gained 0.3%, led by technology and chemicals. In Asia, Japan's Nikkei 225 Index closed up 0.5% to its highest level in almost 27 years amid thin trading in Asia due to holidays. It's Labor Day in Australia, and Hong Kong and China are also shut for holidays.
A European Union privacy watchdog could fine Facebook (NASDAQ:FB) up to $1.63B for a data breach reported on Friday that affected accounts of more than 50M users, if company violated the EU's new privacy law, the Wall Street Journal reports. Ireland's Data Protection Commission demanded more information from the company about the scope and nature of the breach, including which EU residents might be affected. The regulator said it was concerned that Facebook was unable to clarify the nature of the breach and the risk for users.
Gov. Jerry Brown has signed the nation's toughest net neutrality regulations into law in California, and the Justice Dept. immediately sued. That law aims in part to stop Internet providers (including T, VZ, CMCSA, CHTR, CTL, FTR, WIN) from blocking, slowing or favoring sites - regulations rolled back by the FCC with a new Trump administration. As with auto emissions, California's rules could become de facto national rules. The DOJ, meanwhile, argues only the FCC can regulate broadband providers.
To settle securities fraud charges stemming from his infamous tweet about possibly taking Tesla (NASDAQ:TSLA) private, Elon Musk will step down as chairman of the EV automaker but will stay as its CEO in a deal with the SEC. Musk will pay a $20M fine as part of the agreement. Meanwhile, Tesla, which has faced criticism over its board’s composition, will establish a new committee of independent directors and put in place additional controls and procedures to oversee Musk’s communications. The company will also pay a $20M fine.
A second round of bidding for the Indian nutrition business of GlaxoSmithKline (NYSE:GSK) has a shortlist with Coca-Cola (NYSE:KO), Unilever (UN, UL) and Nestle (OTCPK:NSRGY), among others, Economic Timesreported. The winner is expected to pay $2.75B-$3.2B for the business and its marquee brand Horlicks, while Glaxo would use the proceeds to help fund its $13B buyout of Novartis (NYSE:NVS) in their consumer healthcare joint venture.
Setting course after the death of Fiat Chrysler's (NYSE:FCAU) leader Sergio Marchionne in July, the car company’s new chief Mike Manley is expected to announce a new management team today as he aims to keep the carmaker independent and continue its push to develop self-driving and electric cars. Pietro Gorlier, now chief operating officer of Fiat Chrysler's components business, is expected to be named European chief, Reuters reports, citing two people familiar with the matter. Manley is also expected to name some managers for North American operations, namely those who will succeed him at heading Jeep and Ram. Reuters also reports that Japan's Calsonic Kansei (OTC:CLKNF) has been in talks with Fiat Chrysler for buying Fiat's Magneti Marelli parts unit, but no binding agreement has been reached yet.
Appealing directly to MEG Energy (OTCPK:MEGEF) shareholders, Husky Energy (OTCPK:HUSKF) proposes to acquire the company for C$3.3B (US$2.6B), after MEG's board refused to negotiate. Each MEG shareholder will get the option to receive per share either C$11 in cash or 0.485 of a Husky share, subject to a maximum total cash consideration of C$1B and a maximum number of Husky shares issued of about 107M. The cash price represents a premium of 37% over its Friday's closing price of C$8.03 on the Toronto Stock Exchange.
In an 8-K filing, CBS (NYSE:CBS) says it received subpoenas tied to its probe into the conduct of former Chairman/CEO Les Moonves. The company has hired two law firms to investigate allegations about Moonves as well as into CBS News and cultural issues at all levels of CBS. The subpoenas came from the New York County District Attorney’s Office and the New York City Commission on Human Rights. The New York Attorney General's office has requested information as well.
As of Friday, Oracle’s (NYSE:ORCL) president of product development, Thomas Kurian, resigned. Kurian says he'll pursue other opportunities; his duties have been reassigned to other senior executives, the company says.
Settling a dispute over how oil should be shared, an Exxon Mobil-led (NYSE:XOM) Russian consortium has agreed to pay $230M to Rosneft (OTCPK:RNFTF), according to one of the group’s partners. Rosneft had filed a $1.4B suit in the Sakhalin district arbitration court over oil from the Sakhalin-1 concession and an adjacent Rosneft field. The partner also said production at Sakhalin-1 reached 250,000 bbl/day, up from 200,000 bbl/day, as Russia had lifted output restrictions as part of its global deal with OPEC.
Failing to get broad approval for Arikayce - a drug designed to treat a bacterial lung disease - Insmed (NASDAQ:INSM) says it’s collaborating with the FDA on the design of an additional clinical study to support full approval for the drug. The drug was approved as part of a combination for treating a disease caused by mycobacterium avium complex in a limited population of patients not responding to conventional treatment. Bloomberg estimates the drug can bring in 2019 sales of $82.8M, rising to more than $500M by 2022.
In Asia, Japan +0.52%. Hong Kong Closed. China Closed. India +0.75%.
In Europe, at midday, London +0.17%. Paris +0.30%. Frankfurt +0.71%.
Futures at 6:20, Dow +0.78%. S&P +0.62%. Nasdaq +0.79%. Crude +0.29% to $73.46. Gold -0.57% to $1,189.40. Bitcoin +0.28% to $6,617.
Ten-year Treasury Yield +3.7bps to 3.093%.