Thursday Morning Reads
- Its Stock Market Is Soaring.
- Oil Demand Drop
- With Harsh Words
- Retirement Millionaire Crowd
- ‘Ruin’ the Economy
- Despite $1 Trillion Deficits
- Everybody’s Trading
- How We Measure Performance
- Tesla hits the capital raise button
- Stocks slide as coronavirus cases spike
- Alibaba beats Q3 estimates
- Brookfield Asset Q4 beats; names new CFO, splits stock
- Aurora Cannabis results reflect continued headwinds; shares down 3%
- Coronavirus death toll spikes in China
- Kraft Heinz -1% after U.S. organic sales fall back
- Bristol-Myers Squibb's liso-cel fast tracked in U.S. for large B-cell lymphoma
- Waste Management EPS beats by $0.04, misses on revenue
- PepsiCo gains after organic sales beat
- Fresh tensions over Sprint takeover terms
- Nio -5% on report of delayed salaries
Following global markets into the red, U.S. stock index futures are pulling back from record highs - with the DJIA pointing to an opening loss of 200 points - ahead of earnings from Alibaba (NYSE:BABA), PepsiCo (NASDAQ:PEP), Kraft Heinz (NASDAQ:KHC) and Nvidia (NASDAQ:NVDA). Denting sentiment are 15,000 new coronavirus infections in China that were calibrated using a new CT scan detection method, rather than confirmation via slower ribonucleic acid tests. That brings the national total to just over 60,000 cases, prompting China to replace its top officials in the central province of Hubei and its capital, Wuhan. While non-China deaths linked to COVID-19 still remain very low, WHO Director General Tedros Adhanom Ghebreyesus warned the outbreak "could still go in any direction."
With swaths of individual companies pulling out of the exhibition over the past week, the GSMA telecoms association that hosts the get-together has called off the Feb. 24-27 event. Fears over the coronavirus outbreak were to blame despite assurances from local and national health officials that it would have been safe to hold it. The Mobile World Congress draws more than 100,000 visitors to Barcelona and is known as the year's biggest event for the telecom industry.
Just when it looked like the deal was done, the merger of Sprint (NYSE:S) and T-Mobile (NASDAQ:TMUS) is again in question. Deutsche Telekom (OTCQX:DTEGY), the parent company of T-Mobile U.S., is pressing to renegotiate the terms of the takeover, as the shares and performance of Sprint have deteriorated since the deal was announced, sources told the FT. The move is opposed by Sprint's controlling shareholder, SoftBank (OTCPK:SFTBY) of Japan, according to people close to its chairman Masayoshi Son. S -5.8% premarket.
Go deeper: Sprint investors should get out of the stock now, writes Stone Fox Capital.
The latest nominees to the Federal Reserve will face a crucial test at a Senate grilling today after the past two picks, economist Stephen Moore and Herman Cain, were rejected. Christopher Waller, director of research at the St. Louis Fed, is expected to easily pass muster, though lawmakers will closely examine the views of Judy Shelton, an adviser to the Trump campaign in 2016. She has a long history of unorthodox economic commentary, like questioning the basic role of the Fed, calling for near-zero interest rates and advocating for pegging the dollar to the gold standard.
Fresh data from the Treasury Department showed the federal government post a budget deficit of $389.2B in the first four months of fiscal 2020. That's a 25% gain over the same period last year and already about 40% of the total deficit for fiscal 2019. Tax receipts are actually on the rise comparatively, but the rate of federal outlays is adding to the shortfall, bringing the total national debt to $23.3T.
Worries about the European economy emerged on Wednesday as the euro fell to its weakest level against the dollar since 2017, dropping as much as 0.4% to $1.0877. On top of a weakened economy, impacts from the coronavirus are likely to send Germany into recession, while Deutsche Bank (NYSE:DB) expects to post a contraction in the fourth quarter. Also weighing on sentiment is a lingering succession battle at the top of the German government, a slump in eurozone industrial output and fears about the financial health of Italy.
Go deeper: 'The Euro Currency Sits And Waits' by Andrew Hecht.
Britain's financial regulators are probing historical links between Barclays (NYSE:BCS) CEO Jes Staley and Jeffrey Epstein, the disgraced financier who died in jail last year while awaiting trial on sex trafficking charges. The NYT previously said that Epstein had referred "dozens" of wealthy clients to Staley when he ran JPMorgan's (NYSE:JPM) private banking business, while Staley visited Epstein in prison when he was serving a sentence between 2008-09 for soliciting prostitution. The news came as Barclays released annual results: Profit before tax rose 26% Y/Y to £4.4B in 2019, though a cautious outlook was given for the year ahead.
Winning clearance from the U.K.'s competition watchdog, Google (GOOG, GOOGL) has completed its buyout of Big Data analytics firm Looker Data Sciences. The regulator said the acquisition was unlikely to lead to increased prices or lower quality, as the two are not considered close competitors by companies who use business intelligence tools. Looker was the first major acquisition for Google's new cloud business CEO Thomas Kurian, and it aims to build upon the success of Google Cloud's BigQuery, a tool for managing large datasets.
Airbus (OTCPK:EADSY) is raising its stake in Bombardier's (OTCQX:BDRAF, OTCQX:BDRBF) A220 passenger jet program to 75% (Quebec will own the rest), marking the Canadian company's exit from commercial aviation as it seeks to improve its financial position. The deal will bolster Airbus's advantage in the narrow-body market, where Boeing's 737 MAX is grounded. Airbus aims to deliver about 880 jets this year, up from a record 863 in 2019, and achieving that figure could propel its share price (the French planemaker's stock rose 55% last year vs. Boeing's 1% advance).
What else is happening...
Applied Materials (NASDAQ:AMAT) +2% AH giving solid guidance.
Annaly Capital (NYSE:NLY) +0.8% AH agreeing to internalize management.
Barrick Gold (NYSE:GOLD) -0.2% despite raising its dividend.
CenturyLink (NYSE:CTL) -4.4% AH posting an in-line Q4.
Cisco (NASDAQ:CSCO) -4.6% AH on customer spending slowdown.
CVS Health (NYSE:CVS) -0.1% holding off on major deals.
Shopify (NYSE:SHOP) +7.8% after an earnings smasher.
Teva Pharma (NYSE:TEVA) +9.1% continuing its turnaround.
In Asia, Japan -0.1%. Hong Kong -0.3%. China -0.7%. India -0.3%.
In Europe, at midday, London -1.5%. Paris -1%. Frankfurt -1.1%.
Futures at 6:20, Dow -0.7%. S&P -0.7%. Nasdaq -0.9%. Crude -0.8% to $50.75. Gold +0.4% to $1578. Bitcoin -1.3% to $10189.
Ten-year Treasury Yield -4 bps to 1.58%Today's Economic Calendar
8:30 Initial Jobless Claims
8:30 Consumer Price Index
10:30 EIA Natural Gas Inventory
12:45 PM Fed's Kaplan Speech
1:00 PM Results of $19B, 30-Year Note Auction
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
5:30 PM Fed's Williams Speech