Thursday Morning Charts, Reads, News and More
The clock has started ticking for one of the most eagerly awaited market debuts of 2017. Snapchat has reportedly filed for an initial public offering in what could be the biggest U.S. listing since Alibaba (NYSE:BABA) went public two years ago. The ephemeral messaging service's parent, Snap Inc. (Private:CHAT), is eyeing a $20B-$25B valuation range, with Morgan Stanley and Goldman Sachs as lead underwriters of the IPO.
Oil rose around 6% yesterday, its best one day performance since April, on renewed hopes of an OPEC deal to cut production. But prices are now dipping lower after the IEA left its supply and demand forecasts unchanged despite the 2015 Paris Climate Change Agreement entering into force. "The difficulty of finding alternatives to oil in road freight, aviation and petrochemicals means that, up to 2040, the growth in these three sectors alone is greater than the growth in global oil demand," the IEA said in its annual World Energy Outlook.
Longtime Donald Trump supporter and activist investor Carl Icahn has confirmed the president-elect is considering Wall Street veteran Steven Mnuchin and billionaire Wilbur Ross for Treasury and Commerce Secretary, respectively. Meanwhile, Paul Ryan was unanimously chosen for another term as House speaker by his Republican colleagues as he called for his party to unite behind Trump.
"A single policy-rate increase, possibly in December, may be sufficient to move monetary policy to a neutral setting," St. Louis Fed President James Bullard said at a UBS conference in London. "There were a lot of predictions that if the election went the way of Republicans and President-elect Donald Trump, then there would be great deal of volatility, but that has not materialized so far."
Bank of Canada Deputy Governor Timothy Lane will speak about globalization at noon ET and market watchers will look for any hints on the central bank's view of the U.S. election results after it held rates last month citing uncertainties. The U.S. is also Canada's biggest trading partner and the destination for roughly three-quarters of Canadian exports.
Citing persistent terror threats, Francois Hollande wants to extend the state of emergency in France until the presidential elections in April and May. The measures were introduced in November 2015, following a series of terror attacks in Paris that left 130 people dead. They give authorities far-reaching powers, including banning people from leaving their homes and conducting searches without a court order.
Germany's banks are robust but suffer from weak profitability and may be underestimating the risk of falling asset prices or rising interest rates, the Bundesbank said in its latest stability review. Although the eurozone's largest economy has driven the bloc's recovery in recent years, German economic growth has slowed in recent quarters, and concern is mounting about the weak profitability of its vast but inefficient banking sector.
Amazon for the first time has filed lawsuits against counterfeit sellers, after a number of businesses voiced concern that knockoffs were killing their sales and endangering consumers. Amazon (NASDAQ:AMZN) has increasingly relied on third-party sellers to fuel its growth, but opening its website brought with it a greater chance for fake goods to enter its warehouses.
Seeking to allay concerns over its largest ever deal, Microsoft (NASDAQ:MSFT) has offered concessions to EU antitrust regulators over its $26B bid for LinkedIn (NYSE:LNKD). The European Commission, which will rule on the deal by Dec. 6, did not provide details. It's expected to seek feedback from rivals and customers before deciding whether to accept the concessions, demand more or open a full investigation.
Twitter has launched a counteroffensive against trolls who have been on the attack for too long. The company is expanding its "mute" function, allowing users to block specific content - like words, phrases or conversations - from appearing in their notifications section. The damage to Twitter's (NYSE:TWTR) reputation caused by abuse and harassment was reportedly one of the factors that swayed Salesforce (NYSE:CRM) against buying the platform earlier this year.
Possible sticking points have emerged ahead of negotiations between CBSand Viacom (VIA, VIAB) about a potential merger, including who will be on the board of the combined company and what it would be called, sources told Reuters. Many investors and observers believe a deal could be announced by the end of the year and that CBS Chief Executive Leslie Moonves will run the merged entity.
Theranos allegedly voided 11.3% of all blood-test reports that it provided to customers of Walgreens (NASDAQ:WBA) stores through a yearslong partnership between the two companies. When news broke last week that Walgreens had filed a $140M suit against Elizabeth Holmes' now-hobbled unicorn for breach of contract - details were sparse - but a public version of the complaint against Theranos (Private:THERA) has now been released.
Denver has become the first city in the U.S. to permit the use of marijuana in bars, restaurants and other public spaces. Patrons will be able to use pot inside as long as it isn't smoked. The announcement comes amid a string of victories for marijuana proponents, with voters in California and Massachusetts approving ballot initiatives legalizing recreational use of the drug last week.
EU antitrust regulators are set to fine HSBC, JPMorgan (NYSE:JPM) and Credit Agricole (OTCPK:CRARY) by the end of the year for rigging financial benchmarks linked to the euro, Reuters reports. Charges were levied in May 2014 against the three banks, which denied wrongdoing. Deutsche Bank (NYSE:DB), RBS and Societe Generale (OTCPK:SCGLY) admitted guilt in December 2013, while Barclays (NYSE:BCS) avoided a fine because it alerted the European Commission.
Despite years of delays, the SEC has finally approved a plan to introduce a vast surveillance system to oversee trading on the $23T U.S. stock market, in response to the 2010 "Flash Crash." The creation of a Consolidated Audit Trail will establish a regulatory central database and monitor every trade order, execution, modification and cancellation in real-time.
Boeing will cut 500 jobs over four years and shut two plants as it revamps its defense and space unit. The company also said it would create a new global operations group that would include its defense units in Australia, Saudi Arabia, and U.K. Boeing's (NYSE:BA) defense, space and security business accounted for 31.4% of the planemaker's total revenue of $23.9B in the latest quarter.
During his campaign Donald Trump singled out Ford (NYSE:F) by name, calling on the American car manufacturer to stop sending jobs to Mexico and threatening to slap tariffs on any cars imported from south of the border. However, CEO Mark Fields still intends to move forward small car production to Mexico, but plans to work openly with the new president and Congress. "Two very important products will continue to be produced in U.S. factories," he said at the Los Angeles Auto Show.
Although a press release was published a few days ago, news outlets are now reporting that AT&T (NYSE:T) will collaborate with NASA to develop an Unmanned Aircraft System Traffic Management program to allow agencies to monitor drones. The solution will make it safer for drone operators to plan and monitor flight paths, navigate UAVs, use drones for surveillance and will likely reduce the threat of cyberattacks.
Boom! Honeywell (NYSE:HON) has agreed to supply avionics for a proposed supersonic jetliner - intended to carry only premium passengers - that could cruise 10% faster than the now extinct Concorde. The demonstrator vehicle, called Baby Boom, is slated to take to the air in 2017. If development goes as planned, the full-size version, including engines manufactured by General Electric (NYSE:GE), could start carrying passengers as early as next decade.
In Asia, Japan +1.1% to 17862. Hong Kong -0.2% to 22280. China -0.1% to 3205. India flat at 26298.
In Europe, at midday, London -0.5%. Paris -0.5%. Frankfurt -0.4%.
Futures at 6:20, Dow -0.2%. S&P -0.2%. Nasdaq -0.2%. Crude -1.3% to $45.21. Gold -0.1% to $1223.80.
Ten-year Treasury Yield +4 bps to 2.28%
Today's Economic Calendar
7:00 MBA Mortgage Applications
7:30 Fed's Kashkari speech
8:30 Producer Price Index
9:15 Industrial Production
10:00 NAHB Housing Market Index
10:00 Atlanta Fed's Business Inflation Expectations
10:30 EIA Petroleum Inventories
4:00 PM Treasury International Capital