Monday morning reads:
- Apple (AAPL) has cancelled production increase for iPhone XR. NAR Report
- Apple (AAPL) could release 5G iPhone by 2020. Fast Company Report.
- President Trump in interview says that he looking at antitrust issues around tech companies (GOOG, FB, AMZN). Axios Interview
- Resist ‘Economic War’
- China Standing Its Ground in Trade War
- China Seeks Allies
- Trade War Is the ‘Most Stupid Thing’
- Should You Buy Or Sell Apple
- Once a Rising Star, Lost its Shine
- Tiny Improvements, Big Results
- Storm Warnings
- Barrick in talks with Newmont to combine Nevada gold operations
- Wall Street set for muted open
- Trump weighs antitrust case on Big Tech
- Verizon announces new organization structure
- Report: Apple cancels iPhone XR output boost
- Lowe's to close 51 underperforming stores
- GE Capital ends commercial paper era
- MGM eyes Caesars merger
Tough U.S sanctions targeting Iran's critical energy sector have come into force, as well as fresh measures against the nation's shipping and financial industries. Eight countries - including Turkey, Italy, India, Japan and South Korea - will receive temporary six-month waivers allowing them to continue to import Iranian petroleum products as they move to end such imports entirely, but the Islamic Republic can only spend the money on a narrow range of humanitarian items. Iran exported the equivalent of 2.5M barrels a day in April, before the announcement of sanctions turned away buyers.
In a meeting with top economic officials, Iranian President Hassan Rouhani said Tehran will "sell its oil and break sanctions" reimposed by the U.S. on its vital energy and banking sectors. "This is an economic war against Iran, but we are prepared to resist any pressure," he declared. Meanwhile, China said its lawful trade cooperation with Iran should be respected, but it did not directly comment on whether it had been granted American exemption waivers for oil imports.
U.S. stock index futures are hugging the flatline as investors debate which way to turn ahead of tomorrow's U.S. congressional midterm elections. There is also uncertainty surrounding monetary policy as the Fed prepares to meet Wednesday and Thursday. Tighter U.S. monetary policy may be discussed amid strong economic data, although President Trump and others have taken aim at the Fed for its hawkish agenda.
Turkish annual inflation surged to 25% in October, recording its highest in 15 years and highlighting the sustained impact of a currency crisis on the wider economy. However, there was little reaction from the lira, which weakened to 5.44 against the dollar from 5.43 beforehand. The currency has recently stabilized from a selloff driven by concerns over a U.S.-Turkish spat and central bank independence.
A report suggesting an all-U.K. customs deal will be written into a legally binding Brexit deal - to avoid the need for an Irish backstop - is "speculation," according to the office of Prime Minister Theresa May. The Sunday Times said the plan would avoid the need to treat Northern Ireland differently, which has been the main stumbling block in securing an agreement between the EU and Britain.
Voters in the French Pacific territory of New Caledonia have rejected a bid for independence in a closely-watched referendum. It's the first auto-determination vote to be held in a French territory since Djibouti in the Horn of Africa voted for independence in 1977. New Caledonia is also home to a quarter of the world's known supplies of nickel, a vital component in electronics manufacturing.
"The BOJ fully recognizes that, by continuing monetary easing, financial institutions' strength will be cumulatively affected," Governor Haruhiko Kuroda told business leaders in Nagoya, central Japan. "Although these risks are judged as not significant at this point, the BOJ will scrutinize developments," he added, outlining that Japan is no longer in a situation where it's best to "decisively implement a large-scale policy to overcome deflation."
Talking up his commitment to "free trade," President Xi promised to lower import tariffs, reduce investment barriers and broaden market access at the opening speech of the China International Import Expo. Separately, China's services PMI chalked its slowest growth in over a year in September, a somewhat worrying data point as many have been counting on it to offset trade war manufacturing pressure.
Amazon is in late-stage negotiations with Dallas, New York, the Crystal City area of northern Virginia and a few other candidates for the location of its second headquarters, WSJ reports. Talks with the leading contenders are in slightly different phases, centering on incentives and real estate. Amazon's (NASDAQ:AMZN) HQ2 would bring as many as 50K jobs and more than $5B in investments over nearly two decades.
Although Apple said it would do away with iPhone projections, estimates are coming in from elsewhere. According to the Nikkei, the tech titan has told its smartphone assemblers Foxconn (OTC:FXCOF) and Pegatron (OTC:PGTRF) to halt plans for additional production lines dedicated to the recently launched iPhone XR. Apple (NASDAQ:AAPL) had also asked Wistron (OTC:WICOF) to stand by for rush orders, but the company will not receive any for the iPhone XR this season.
Taking aim at U.S. tech giants, President Trump said his administration was "looking at" antitrust proceedings against Amazon (AMZN), Google (GOOG, GOOGL) and Facebook (NASDAQ:FB). "I think most people surmised that," he told Axios's premiere HBO show on Sunday night. He clarified that previous administrations had discussed breaking up the companies, but the action never materialized.
SoftBank CEO Masayoshi Son has condemned the killing of journalist Jamal Khashoggi by Saudi security forces, but defended the firm's financial ties with Saudi Arabia, saying the company will continue carrying out its "responsibility" to the country’s citizens but "there may be some impact" on the fund's investments. Son made the comments after presenting SoftBank's (OTCPK:SFTBY) quarterly earnings results. Several Vision Fund investments paid off, with net profits rising to ¥526.4B ($4.6B) vs. ¥97.1B a year earlier.
Piling pressure on Walmart (NYSE:WMT) and Target (NYSE:TGT), Amazon (AMZN) is also offering free shipping with no purchase minimum for the first time this holiday season. The U.S.-only promotion waives the $25 minimum needed for customers outside the Prime loyalty club. The deal lasts until Amazon can no longer promise items in time for Christmas, which typically takes five to eight business days.
It's not just fantasy... Queen biopic Bohemian Rhapsody was box office champion this weekend, with an estimated $50M opening in North America - and another $72.5M internationally - despite production troubles and mediocre reviews. Successes for the film division of 21st Century Fox (NASDAQ:FOX) will ultimately become wins for Disney (NYSE:DIS). The entertainment giant is buying most of Fox's entertainment assets in a $71B deal expected to close next year.
Sears is in talks with Chairman Eddie Lampert and lenders on a deal to expand a bankruptcy financing package in exchange for key collateral that would help it avoid liquidation, Reuters reports. The negotiations come at a critical time. Sears (OTCPK:SHLDQ) needs enough money to keep its shelves stocked during the holiday shopping season and retain enough support from creditors and vendors to emerge from bankruptcy proceedings.
Once the largest borrower in the market, GE Capital (NYSE:GE) is abandoning its use of commercial paper - debt with a maturity of up to 270 days. The move could add to its cost of financing, which is already under upward pressure after downgrades to the company's credit rating. GE's financial services division is instead becoming more reliant on bank lending and had available net credit facilities of $40.8B at the end of September.
The quarterly operating profit of Berkshire Hathaway (BRK.A, BRK.B) doubled to $6.9B in Q3 as the conglomerate's insurance business dodged hurricanes and benefited from lower taxes. Struggling to find a place to put those earnings to work, Warren Buffett opted for a buyback despite being a well-known bargain-hunting "value" investor, repurchasing $928M in his own company's stock in the latest quarter.
Tesla is planning to produce 3,000 Model 3 sedans per week at its Shanghai plant, meaning nearly one-third of the vehicles could be made in China in the near future. The EV maker said it would need about two years to build the factory and commence production, and already plans to start transferring part of Model 3 production to China - Tesla's (NASDAQ:TSLA) largest overseas market - in 2019.
Indonesian authorities have extended by three days the search for the second black box from the wreckage of a Lion Air passenger jet crash near Jakarta last week, which killed all 189 people on board. The first accident of a Boeing 737 MAX (NYSE:BA) is the focus of the global aviation industry, with preliminary findings of the investigation expected to be made public after 30 days. Representatives from GE, a partner in engine maker CFM International, are also viewing recovered wreckage at a Jakarta port.
In Asia, Japan -1.6%. Hong Kong -2.1%. China -0.4%. India -0.2%.
In Europe, at midday, London +0.3%. Paris +0.2%. Frankfurt +0.3%.
Futures at 6:20, Dow flat. S&P flat. Nasdaq +0.1%. Crude -0.6% to $62.78. Gold flat at $1233.30. Bitcoin -0.4% to $6412.
Ten-year Treasury Yield flat at 3.2%
Today's Economic Calendar
8:30 Fed's Williams Speech
9:45 PMI Services Index
10:00 ISM Non-Manufacturing Index
12:30 PM TD Ameritrade IMX
1:00 PM Results of $37B, 3-Year Note Auction
7:00 PM Fed's Kaplan Speech