Monday's Market Prepper
- Superpower India to Replace China
- Yellen Legacy
- Stricter Regulation
- Trillion-Dollar Monopoly
- Fractured by Governmental Controls
- Rolling Stone Put Up For Sale
- Headwinds Could Persist
- Long-Awaited Correction?
- Next Financial Crisis
- From the Weekend
- Futures up as S&P looks past 2,500
- Northrop to buy Orbital ATK for $9.2B
- Walgreens to tweak Rite Aid deal
- BIS: Policymakers face balancing act
- Eurozone inflation to slide below 1%?
- Major bitcoin conference flees to HK
- Three storms raging in the Atlantic
- U.S. weighs closing embassy in Cuba
Yesterdays Unusual Option Volume:
Northrop Grumman has agreed to acquire Orbital ATK (NYSE:OA) for about $7.8B in cash, plus the assumption of $1.4B in net debt. The deal comes as the firing of missiles by North Korea draws attention to missile defense systems. It's also notable because Northrop (NYSE:NOC) hasn't bought a large rival in many years, focusing most of its attention on spinoffs and returning earnings to shareholders. OA +20% premarket.
Hiking interest rates could mean a hit to global growth, according to the latest quarterly report from the Bank for International Settlements. The central bank of central banks said policymakers face a delicate balancing act as they try to wean markets and businesses off extraordinarily cheap money, and called the mix of low inflation and increasing global growth the "trillion dollar question."
In a phone call over the weekend, President Trump and South Korea's Moon Jae-in agreed to intensify economic and diplomatic pressure against Pyongyang. Despite the pressure, Kim Jong-un is not backing down. North Korea state media quoted him as saying his country is nearing its goal of "equilibrium" in military force with the United States.
U.S. crude oil prices are back above $50 per barrel as the number of U.S. rigs drilling for new production fell and refineries continued to come back online after getting knocked out by Hurricane Harvey. Royal Dutch Shell's (RDS.A, RDS.B) Deer Park refinery in Texas was among the latest, beginning its restart on Sunday. The plant can process 325,700 barrels per day.
The eurozone inflation rate is likely to slide below 1% early next year due to volatile developments in oil and unprocessed food prices. It's an awkward development for the ECB as it prepares to wind down its giant monetary stimulus. Meanwhile, inflation across the bloc rose 1.5% in August, heading closer to the central bank's target of just below 2%.
The White House has disavowed a WSJ report that quoted EU Commissioner for Climate Action and Energy Miguel Arias Canete as saying the Trump administration would reverse its intention to abandon the Paris climate accord. "Our position on the Paris agreement has not changed. @POTUS has been clear, US withdrawing unless we get pro-America terms," Press Secretary Sarah Huckabee Sanders wrote on Twitter.
The United States is considering closing its embassy in Havana in response to alleged sonic attacks on U.S. personnel in Cuba. "We have it under evaluation," Secretary of State Rex Tillerson told Face the Nation. At least 21 employees have suffered mysterious health issues, including hearing loss, nausea, headaches, dizziness and mild traumatic brain injuries.
More aerospace news? New Pakistani Prime Minister Shahid Khaqan Abbasi has warned the Trump administration that it risks undermining military efforts in Afghanistan if the U.S. follows through with a threat to downgrade its relationship with Islamabad. He also warned of dropping the U.S. as a supplier of military aircraft, like Lockheed Martin's (NYSE:LMT) F-16, which has become the mainstay of the Pakistani air force.
In a deal worth several billion dollars, BAE Systems (OTCPK:BAESY) will benefit from Qatar's purchase of 24 Typhoon jets after the company said it may have to cease production of the combat planes in 2019 absent additional export orders. The agreement, however, is likely to peeve neighboring Middle East countries that are in a spat with Doha over its ties to terrorism and Iran.
Volkswagen is a "second mover" in electrified commercial vehicles, after lagging behind companies such as Tesla (NASDAQ:TSLA) and Deutsche Post DHL (OTCPK:DPSTF), the head of VW's (OTCPK:VLKAY) trucks business, Andreas Renschler, told Tagesspiegel. At the Frankfurt motor show last week, the automaker said it was stepping up its shift to electric cars by investing more than €20B in zero-emission vehicles by 2030.
Workers at a General Motors plant in Ontario went on strike Sunday evening after the Unifor Local 88 union failed to reach a new contract agreement with the automaker. The move threatens to crimp supply of GM's top-selling SUV as the CAMI plant produces the compact Chevrolet Equinox, which competes in the most popular vehicle segment in the U.S.
Seeking to increase its foothold in India, Ford (NYSE:F) is teaming up with local SUV maker Mahindra & Mahindra (OTCPK:MAHDY) to explore a partnership for electric and connected vehicles. "The agreement... will allow each to leverage their mutual strengths during a period of unprecedented transformation in the global automotive industry," the two companies said in a statement.
Toys 'R' Us could file for bankruptcy as soon as the next few weeks, as nervous suppliers have tightened terms for the retailer ahead of the holiday selling season, WSJ reports. There have been more than a dozen significant retail bankruptcies this year, but none for retailers as big as Toys 'R' Us, which has about $5B in debt and more than 1,600 stores worldwide. Affected suppliers could include Hasbro (NASDAQ:HAS), Mattel (NASDAQ:MAT) and Newell Brands (NYSE:NWL).
A major bitcoin conference has jumped from China's capital to Hong Kong, which has greater freedoms than Beijing, in the face of a Chinese government crackdown on cryptocurrencies. The Blockchain Global Summit hosted by BitKan, a company specializing in bitcoin trading and services, was set for Sept. 10, but has been postponed to Sept. 20. Bitcoin is also back in rally mode, starting the week up 8% to almost $4,000.
Germany's largest bank expects subpoenas or requests from authorities investigating potential coordination between Donald Trump's presidential campaign and the Russian government, but until there's a binding request, the bank won't give anything up, Deutsche Bank (NYSE:DB) CEO John Cryan told CNBC. The lender has done business with Trump for decades, according to multiple reports.
EU finance ministers from 10 countries are supporting a plan to start taxing the revenues of digital giants like Google (GOOG, GOOGL), Amazon (NASDAQ:AMZN) and Facebook (NASDAQ:FB), instead of them being taxed on profits that they currently report in often low-tax countries. But as all members have to agree on any plans to change EU taxation rules, the ministers agreed to take up the issue again in their meeting in December "to reach a common understanding."
Bidding war over? Bruce Gordon and Lachlan Murdoch have lost a court challenge to thwart the takeover of Australia's Ten Network by CBS. The media moguls had challenged the A$201M proposed buyout, arguing their own offer to acquire the company wasn't properly considered by insolvency specialists KordaMentha. The deal with CBS will be put to a creditor vote tomorrow.
Three storms are raging in the Atlantic, with Hurricane Maria forecast to rapidly strengthen and aim for the islands devastated by Irma. A weakened Hurricane Jose could graze the Northeast midweek, while Tropical Storm Lee formed in the eastern Atlantic Ocean on Saturday. According to the U.S. National Centers for Environmental Information, this will be the second most costly year for hurricane damage since 1980 behind 2005. Related tickers: RE, RNR, AHL, ENH, AXS, ACGL, RGA, UNM, MHLD, GLRE, BRK.A, BRK.B
In Asia, Japan +0.5%. Hong Kong +1.3%. China +0.3%. India +0.5%.
In Europe, at midday, London +0.5%. Paris +0.4%. Frankfurt +0.3%.
Futures at 6:20, Dow +0.3%. S&P +0.2%. Nasdaq +0.2%. Crude +0.9% to $50.32. Gold -0.5% to $1318.70.
Ten-year Treasury Yield flat at 2.2%