Monday Morning Reads
- Oil at $100 a Barrel?
- Significant Issues Unresolved
- Trade Negotiations in ‘the Final Laps’
- Apple Cracks Down on Apps That Fight iPhone Addiction
- One in Seven Homes in Japan Is Empty
- Terrify Tesla Investors
- How to Watch the Information Avalanche
- Anadarko says will resume negotiations with Occidental
- Rally on pause as futures debate direction
- Oil resumes slide, Saudis need higher prices
- Bayer's board backs CEO for now
- Big boost for Belt and Road Initative
- Boeing CEO to pitch 737 Max comeback
- Anadarko to pursue deal talks with OXY - Reuters
- Apple explains parental control app removal
- FDA OKs CV benefit claim for Regeneron and Sanofi's Praluent
- Parker to buy LORD Corporation for $3.7B
- McDermott misses by $0.08, beats on revenue
- Alliance Resource Partners beats by $1.42, beats on revenue
U.S. stock index futures are pointing to a muted open ahead of this morning's release of the Fed's preferred inflation gauge - the PCE deflator - with any slowing in core prices likely to boost market bulls following Friday's strong Q1 GDP reading of 3.2%. Data overnight also showed profits from China's industrial firms growing in March before the next round of U.S.-China trade talks kicks off tomorrow. A rate decision from the Fed on Wednesday could also cement its dovish tilt, and coupled by a series of solid earnings and outlooks from U.S. tech giants could send equity indices to their next run of record highs.
Crude futures fell 0.7% to $62.87/bbl overnight, extending a 3% slump from Friday that ended weeks of rallying, after President Trump demanded that OPEC raise output to soften the impact of U.S. sanctions against Iran. Supply cuts have been supported by some non-OPEC producers, most notably Russia, but analysts said this cooperation may not last beyond an OPEC+ gathering scheduled for June. Complicating the meeting is fresh data from the IMF showing that Saudi Arabia needs prices at about $85 a barrel to balance its budget this year, up from a forecast of $73 in September.
Boeing (NYSE:BA) CEO Dennis Muilenburg is set to hold his first press conference since the worldwide grounding of the 737 MAX, which led to investigations, lawsuits and a sharp loss in shareholder value. The event starts at 10:00 a.m. EDT following the planemaker's annual general meeting in Chicago. While reports over the weekend suggested that pilots have warned draft 737 MAX training proposals did not go far enough to address their concerns, the FAA may clear the plane to fly in late May or the first part of June.
Avengers: Endgame has become the first movie to gross more than $1B in its debut at the worldwide box office, putting a stamp on a dominant Marvel franchise that has been a feather in Disney's (NYSE:DIS) cap. Powered by record-setting hauls in the U.S. and China, the film collected an estimated $1.2b in its first five days of release. An estimated $350M of that total came from the U.S. and Canada, an amount that blew past the previous opening-weekend record set last year by Avengers: Infinity War by about $92M.
The latest numbers from Google parent Alphabet (GOOG, GOOGL) are due after Wall Street closes this evening. The consensus EPS estimate is $10.17 (+2.4% Y/Y), while revenue is expected to come in at $37.36B (+19.9% Y/Y). YouTube is likely to continue being a financial black box, but Amazon (NASDAQ:AMZN) may be biting at Google's dominance in digital advertising. It also has the upper hand in cloud computing (AWS), voice-activated devices (Alexa) and some 54% of people looking for a product now begin their search directly on Amazon.com.
Walmart (NYSE:WMT) has fired the latest blow in the all-out delivery war in the retail sector. "One-day free shipping...without a membership fee. Now THAT would be groundbreaking. Stay tuned," tweeted the retail giant just before the weekend. The tease follows Amazon's (AMZN) disclosure during its earnings call that it plans to roll out one-day Prime shipping this year through what's anticipated to be a heavy investment in the company's in-house delivery infrastructure.
Anadarko's (NYSE:APC) board of directors has decided that Occidental Petroleum's (NYSE:OXY) $38B cash-and-stock bid could lead to a deal that would be superior to the one it has with Chevron (NYSE:CVX), Reuters reports. The E&P company will now kick off negotiations to see if it can finalize a deal, though a $1B break-up fee is on the line. The acquisition would add nearly a quarter million acres to Occidental's holdings in the Permian shale basin, while doubling its global oil and gas production to 1.4M barrels of oil equivalent per day.
Despite a vote of no-confidence, Bayer's (OTCPK:BAYRY) board is sticking with CEO Werner Baumann as two of the drugmaker's largest investors - Deka and Union Investment - said management needed to stay at the helm for now to avoid further upheaval. "A hasty replacement of the CEO would only increase the risk of a break-up and therefore can't be in the interest of long-term oriented investors." Bayer shares have tumbled about 36% over the past year as the company faced a wave of lawsuits claiming that Roundup - the weedkiller acquired through its $63B takeover of Monsanto - can cause cancer.
For the third time in four years, Spaniards have elected a new government and although Prime Minister Pedro Sanchez will most probably remain in office, how he gets there is the key question. While a pact with liberals Ciudadanos would be seen as a positive for investors, a partnership with anti-austerity party Podemos and Catalan pro-independence parties may be a less market-friendly option. Spain's Ibex 35 is only up 11% this year, making it one of Europe's worst performing stock indexes.
President Xi Jinping raised a glass to his signature foreign policy project at a Belt and Road conference in Beijing on Saturday, touting "open, clean and green" infrastructure deals worth more than $64B. In a separate statement, China said it signed a memorandum of understanding with various countries including Italy, Peru, Barbados, Luxembourg, Peru and Jamaica. Data from Refinitiv shows the total value of projects in the New Silk Road at $3.67T, spanning countries in Asia, Europe, Africa, Oceania and South America.
What else is happening...
Contributor Jeff Miller breaks down the information avalanche for the week ahead.
As U.S. tightens sanctions, IMF sees risk of 50% Iran inflation.
Poland is unlikely to leave the EU, according to Jean-Claude Juncker.
President Trump says Japan will invest $40B in U.S. car factories.
In Asia, Japan closed. Hong Kong +1%. China -0.8%. India +0.9%.
In Europe, at midday, London -0.1%. Paris -0.3%. Frankfurt -0.3%.
Futures at 6:20, Dow flat. S&P flat. Nasdaq flat. Crude -0.7% to $62.87. Gold -0.4% to $1284.10. Bitcoin -1.1% to $5137.
Ten-year Treasury Yield flat at 2.5%