Thursday Morning Reads
- Why China Decided to Play Hardball in Trade Talks
- Weakest U.S. Bond Auction in Decade
- U.S. Recession Would Spur ‘Massive’ Corporate Bond Losses
- Uber Is Going Public
- Are We There Yet?
- News Cycles Or Market Cycles?
- End Badly
- Was That It?
- Capitalism Vs. Socialism
- The Big Short
- Stocks poised to fall as trade worries prevail
- Crescent Point Energy beats by C$0.14, beats on revenue
- Asian markets drop after Trump says China 'broke the deal'
- Himax Technologies beats by $0.01, beats on revenue
- Energy Transfer reports record adjusted EBITDA, distributable cash flow
- Hackers drained Amazon seller accounts
- Volkswagen starts taking preorders for long-range EV
- Tapestry beats by $0.01, misses on revenue
- Becton, Dickinson EPS in-line, misses on revenue
- Canadian licensing changes boost pot stocks
- IBM launches $20B debt offering
- CenturyLink Q1: Revenues miss; reviewing consumer business
U.S. stock futures point to a lower open as trade tensions escalate. China's vice premier arrives in Washington for trade talks even as the country warns that it will retaliate if President Trump makes good on his threat to boost tariffs on Chinese goods Friday. Hong Kong's Hang Seng Index closed down 2.4%, and the Shanghai Composite Index fell 1.5% after China reported weaker-than-expected lending data for April. Major indexes are also falling in Europe. Crude oil, down 0.5%, also got caught up in the downdraft. Meanwhile, investors have turned to safe havens. The 10-year Treasury has rallied, pushing yield down almost 4 basis points to 2.45%. U.S. economic data on tap this morning include international trade, producer price index and wholesale trade.
President Trump amped up rhetoric about a Friday deadline to raise tariffs on Chinese goods with comments at a political rally Wednesday night, sending Asian markets lower. "They broke the deal," he said, but "don't worry about it," suggesting there's "nothing wrong with taking in $100B a year" in tariffs. Doubters already wondered whether a U.S. visit from China's Vice Premier Liu He could avert the new tariffs.
Nestle (OTCPK:NSRGY) plans to roll out the vegan 'Awesome Burger' in the U.S. this fall to complement the Incredible Burger products sold at 1.5K outlets across Europe. The food and drink company plans to carry the vegan burgers in U.S. retail stores, quick-service restaurants and food service operators. "I think we have a lot to show in this area," CEO Mark Schneider told CNBC. Nestle's expansion in the plant-based food area will place it in competition with Beyond Meat (NASDAQ:BYND), which investors have bid up by 189% over the meat substitute upstart's IPO pricing level in just a week.
Tech giant SoftBank Group (OTCPK:SFTBY) has engaged Nomura (NYSE:NMR) and Goldman Sachs (NYSE:GS) as it shifts ownership of Yahoo Japan (OTCPK:YAHOY) to let its affiliates collaborate more easily - a nice win for Nomura after its first annual loss in 10 years. SoftBank Group will sell its 36% holding to Yahoo Japan, which will cancel the shares and then separately offer new shares for sale to mobile subsidiary SoftBank Corp. for about $4.1B.
Fox (FOX, FOXA) and The Stars Group (NASDAQ:TSG) surged in post market trading Wednesday evening as the two announced a unique partnership that gets Fox Sports into sports betting. Under an umbrella concept called FOX Bet, the two companies will initially launch a free-to-play game with cash prizes as well as a real-money wagering game in states where that's allowed. The deal includes Fox taking about a 5% stake in The Stars Group.
Aimed at sharpening its focus as it digests the Shire acquisition, Takeda Pharmaceutical (NYSE:TAK) has agreed to sell its Xiidra 5% eye drop to Novartis (NYSE:NVS) and its TachoSil Sealant Patch to Johnson & Johnson (NYSE:JNJ) unit Ethicon. Under the Novartis transaction, Takeda will receive $3.4B in upfront cash and up to $1.9B in milestones. Ethicon will pay ~$400M in upfront cash to acquire the surgical patch designed to control intraoperative bleeding.
Toyota (NYSE:TM) and Panasonic (OTCPK:PCRFY) will team up on a venture to work on technology to provide the "connected" home with personalized services. They're already partners, collaborating in a joint venture to build electric-vehicle batteries, but a new revenue stream could ease concerns that automakers and their suppliers are facing as new entrants heat up competition in auto manufacturing.
BlackRock's (NYSE:BLK) withdrawal from the proposed deal increases the possibility that the Italian government may have to bail out Banca Carige (OTC:BCIGY). BlackRock, which was to have bought about half a 720M euro ($806M) share issue, rejected the proposed deal for reasons including excessive risk. The deal would have given BlackRock control of Italy's 10th-largest bank.
What else is happening...
Canadian licensing changes boosts pot stocks.
Disney (NYSE:DIS) +1.6% AH amid gains in parks, Fox, direct-to-consumer.
Energy Transfer (NYSE:ET) +1.6% AH on record adjusted EBITDA, distributable cash flow.
CenturyLink (NYSE:CTL) -1.6% AH on revenues miss; reviewing consumer business.
Roku (NASDAQ:ROKU) +7.8% PM as Q1 metrics soar, financials top consensus.
Sarepta Therapeutics (NASDAQ:SRPT) +1.8% AH on Q1 EXONDYS 51 demand.
Albemarle (NYSE:ALB) +1.7% AH on Q1 revenue beat, FY guidance.
Sangamo Therapeutics (NASDAQ:SGMO) -4.5% AH as Q1 revenues dip 36%.
Nuance Communications (NASDAQ:NUAN) +1.5% AH amid higher income in fiscal Q2 beat.
Applied Optoelectronics (NASDAQ:AAOI) -9% AH on Q1 miss, dim guidance.
Sabra Health Care REIT (NASDAQ:SBRA) +1.5% AH despite Q1 FFO and revenue decline.
Conduent (NYSE:CNDT) -20% AH on poor Q1 results, CEO step-down.
Etsy (NASDAQ:ETSY) -6% PM on light revenue.
In Asia, Japan -0.9%. Hong Kong -2.4%. China -1.5%. India -0.5%.
In Europe, at midday, London -0.41%. Paris -1.26%. Frankfurt -0.74%.
Futures at 6:20, Dow -0.83%. S&P -0.82%. Nasdaq -0.98%. Crude -0.52%to $61.80. Gold +0.27% to $1,284.90. Bitcoin +2.8% to $6,261.
Ten-year Treasury Yield -3.7bps to 2.446%.
Today's Economic Calendar
8:30 Initial Jobless Claims
8:30 International Trade
8:30 Producer Price Index
8:30 Jerome Powell: “Renewing the Promise of the Middle Class”
10:00 Wholesale Trade
10:30 EIA Natural Gas Inventory
10:45 Fed's Bostic: Economic Outlook and Monetary Policy
1:00 PM Results of $19B, 30-Year Note Auction
1:15 PM Fed’s Evans: “Renewing the Promise of the Middle Class”
4:30 PM Money Supply
4:30 PM Fed Balance Sheet