Thursday Morning Reads
- Room To Breathe
- Rigged Markets?
- Why we love to call everything a bubble.
- Fed Day
- Bonds’ biggest threat is Germany starting to splash the cash.
- Apple is suffering an identity crisis with consumers in China.
- Talk it Up
- U.S. intelligence official to brief lawmakers over mystery complaint.
- Trump is biggest risk to world economy, says Philippine central bank governor.
- Perfectly Safe
- How to feed a Mars colony of one million people.
- Futures dip with eyes on central banks
- Target declares $0.66 dividend
- AT&T explores DirecTV split - WSJ
- Buybacks ordered up at Target
- Buffett protege strikes out on her own - WSJ
- Microsoft hikes dividend, launches $40B buyback15h
- Model 3 scores top safety rating at IIHS
- 737 MAX won't be recertified until FAA chief flies the plane
- Watch Splunk, Elastic after DataDog headlines
- Gold producers pledge restraint, remembering lessons of earlier bull surge
- What to expect as iOS 13 gets released
- Darden Restaurants EPS beats by $0.01, revenue in-line
Open Interest Changes for Today:
Wall Street futures are slightly lower, down 0.3%, after ending roughly flat on Wednesday as traders digested a 25 bps rate cut from a divided Federal Reserve. While the "moderate" policy seemed to disappoint markets, Jerome Powell highlighted that "if the economy does turn down, then a more extensive sequence of rate cuts could be appropriate." U.S. and Chinese deputy trade negotiators are also set to resume face-to-face talks today for the first time in nearly two months, aiming to lay the groundwork for high-level discussions in early October.
Powell's cautious rhetoric drew fresh criticism from President Trump, who tweeted, "Jay Powell and the Federal Reserve Fail Again...No 'guts,' no sense, no vision!" It's also important to note the increasing gap in what policymakers are thinking. "It's a testament of how uncertain things are, and there’s a difference of views, whether it’s on the trade war or how monetary policy in Europe will shake out," said Ben Jeffrey, rate strategist at BMO.
The Swiss National Bank kept its policy rate and deposit rate at minus 0.75% overnight, declining to join a global move that's seen monetary loosening by the ECB and the Fed in the past week. Also living in negative rate land, the Bank of Japan held off from offering more stimulus as some had hoped, though it called for a re-examination of prices and the economy at its October meeting. Next up is the Bank of England, which is expected to stand pat due to elevated Brexit uncertainty, but it will be interesting to see if the minutes suggest any tweaks to its forecasts.
Go deeper: Norway 'outlier' as Norges Bank ups rates again.
The New York Fed is offering an overnight repurchase agreement operation for the third day in a row, injecting $75B into a vital corner of finance to restore order in the banking system. The temporary liquidity follows the Fed's reduction in the interest rate on excess reserves, or IOER, another attempt to quell money-market stresses. The prior operations have soothed markets, with repo rates declining Wednesday to more normal levels after jumping to 10% on Tuesday, four times where they were last week.
In a move that would replace the contentious Irish backstop, Boris Johnson could designate Northern Ireland as a "special economic zone," according to British officials. A meeting with the EU's Jean-Claude Juncker this week saw "no progress" on the backstop, an insurance policy to maintain an open border in Ireland. Meanwhile, Britain's Supreme Court today will hear a third and final day of legal arguments on whether Johnson acted unlawfully when he suspended parliament in the run-up to Brexit.
Go deeper: Breakdown on sterling vs. its peers.
OxyContin maker Purdue Pharma has asked a U.S. bankruptcy judge to halt for roughly nine months more than 2,600 lawsuits alleging the company and its controlling Sackler family helped fuel the U.S. opioid crisis. An injunction would preserve money that would otherwise be drained through prolonged legal battles, according to the company, which is spending more than $5M a week in legal fees and related expenses. "This filing isn't a surprise. It's yet another effort by Purdue to avoid accountability and shield the Sackler family fortune," said Massachusetts AG Maura Healey, who has sued both the company and family members.
There are some conflicting reports, but a possible deal might come via a spin-off or combination with Dish Network (NASDAQ:DISH). The rumors follow a couple of weeks of pressure from activist Elliott Management over AT&T's (NYSE:T) heavy acquisitions of DirecTV and Time Warner. Regulatory issues, however, might make a combination with Dish Network difficult (the federal government already rejected a Dish/DirecTV merger proposal in 2001). T +0.5%; DISH +1.2% premarket.
Go deeper: John M. Mason discusses the AT&T-Elliott saga.
Steve Dowling, the head of Apple's (NASDAQ:AAPL) public relations department, will be leaving this week, marking the third top executive to leave the tech giant this year. Retail boss Angela Ahrendts announced her departure in February, while Apple's legendary design boss Jony Ive resigned in June. Disney (NYSE:DIS) CEO Bob Iger also submitted his resignation from Apple's board last week as the two companies prepare to launch rival video streaming services this November.
Tesla's (NASDAQ:TSLA) Model 3 has earned the top safety rating from the Insurance Institute of Highway Safety, becoming the first Tesla to do so. The company's cars generally rank among the most expensive vehicles to insure - due to their high repair costs for components and sensor equipment - prompting Tesla last month to launch an insurance service in California. The EV maker hopes to offer lower rates in the state, its biggest market, because of the safety features on its vehicles.
Go deeper: Data overview of Tesla.
What else is happening...
India bans production, import, distribution of e-cigarettes.
In Asia, Japan +0.4%. Hong Kong -1.1%. China +0.5%. India -1.3%.
In Europe, at midday, London +0.5%. Paris +0.5%. Frankfurt +0.2%.
Futures at 6:20, Dow -0.3%. S&P -0.3%. Nasdaq -0.4%. Crude +1.7% to $59.04. Gold -0.8% to $1504.40. Bitcoin -3.2% to $9874.
Ten-year Treasury Yield flat at 1.79%
Today's Economic Calendar
8:30 Initial Jobless Claims
8:30 Philly Fed Business Outlook
8:30 Current Account
10:00 Existing Home Sales
10:00 Leading Indicators
10:30 EIA Natural Gas Inventory
4:30 PM Money Supply
4:30 PM Fed Balance Sheet