Thursday Morning Reads
- Economy Will Shrink More In 2020
- About to Get Uglier
- Stockpiling Chips Needed for China 5G
- Printed Money and Central Planning
- More Money Flowing Into Hedge Funds
- The Sustainable Debt Market Has Become Unsustainable
- Might Not Be So Bad For Big Banks
- Forget Antitrust Laws
- Trading a Pandemic Pastime
While stimulus negotiations between House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin continue today, U.S. stock futures fell 0.3% overnight amid increasing talk of a vote after the election. On the economic calendar, initial jobless claims are likely to fall to 860K for the week ended Oct. 17, down from 898K in the prior week, but still well above the pre-pandemic record of 695K. Earnings season is also heating up, with Q3 results expected from AT&T (NYSE:T), Coca Cola (NYSE:KO), Intel (NASDAQ:INTC), American Airlines (NASDAQ:AAL) and Southwest (NYSE:LUV). Don't forget the last presidential debate. Investors will be on the lookout for possible surprises tonight as President Trump locks horns with Democratic nominee Joe Biden at 9 p.m. ET.
Tesla (NASDAQ:TSLA) stuck to its delivery target of a half a million vehicles this year, calling Model Y and Shanghai production key factors in hitting the mark. Shares rose 3.3% AH to $436/share on the forecast, after receiving a boost from the EV maker's fifth consecutive quarterly profit. CEO Elon Musk also gave additional details on the full self-driving [FSD] beta rollout, production ramp and the company's future robotaxi system.
In competition with Square's (NYSE:SQ) service that allows users to buy and hold Bitcoin (BTC-USD), PayPal (NASDAQ:PYPL) has introduced a new service that enables customers to buy, hold, and sell cryptocurrency directly from their PayPal account. In addition, PayPal signaled plans to increase crypto's utility by making it available as a funding source for purchases at its 26M merchants. PayPal closed 5.5% higher following the announcement yesterday, while Bitcoin recorded similar gains. It's now trading at $12,800, the highest level in over two months.
News yesterday about the death of a volunteer in AstraZeneca's (NASDAQ:AZN) COVID-19 vaccine trial in Brazil sent the pharma giant's shares lower, though organizers suggested that the deceased man did not end up receiving the vaccine. On that note, U.S. trials of vaccines made by AstraZeneca and Johnson & Johnson (NYSE:JNJ) are expected to restart as soon as this week, according to Operation Warp Speed chief Moncef Slaoui. Temporary pauses in vaccine studies are not uncommon, especially given the size and speed of the trials.
Privately held Purdue Pharma, the corporate poster child of the opioid epidemic, has agreed to pay $8.3B to settle federal probes of how it marketed pain pill OxyContin. The figure is largely symbolic, since the company's assets are valued well below that amount, but members of the billionaire Sackler family will make an immediate $225M payment to the government, while the company will pay another $250M after the bankruptcy is concluded. According to court records, the remaining amount owed by Purdue will be counted toward the company's payout to its creditors.
Laying off about a quarter of its workforce earlier this year after getting hammered by the coronavirus pandemic, Airbnb (AIRB) is looking to bring some fresh talent on board. Silicon Valley icon Jony Ive, the longtime head of design at Apple (he left in 2019, after 27 years), will be collaborating with the company on a multi-year deal "to design the next generation of Airbnb products and services." The deal comes ahead of an Airbnb IPO, which is expected before year's end, and will likely be one of the biggest public debuts of 2020.
The cybersecurity giant marks its return to Wall Street this morning at a time when demand is strong for protective software due to the remote work/study trends brought on by the COVID-19 pandemic. McAfee was a public company before Intel (INTC) bought it for $7.7B in 2011, and then later sold a majority stake in it to private equity firm TPG. McAfee, which will begin trading on the Nasdaq under ticker "MCFE," has priced its IPO at $20/share, raising $740M at a valuation of $8.6B.
Facebook (NASDAQ:FB) is finally launching its dating service in 32 European countries after an earlier Valentine's Day debut was put on ice due to privacy concerns under GDPR rules. Since launching in the U.S. in September last year, as well as 20 other countries, Facebook Dating claims that the platform has generated 1.5B matches. It's also completely free to use, with no premium offering, unlike other dating services such as Tinder and Hinge (NASDAQ:MTCH), Bumble (NYSE:BX) and Happn.
The U.K. and EU are restarting talks over a post-Brexit trade deal, less than a week after Boris Johnson suspended the discussions. A speech by EU Brexit negotiator Michel Barnier was credited for breaking the impasse, in which the EU had to "accept once again that it was dealing with an independent and sovereign country and that any agreement would need to be consistent with that status." "Intensive talks" will kick off today, with the goal of reaching an agreement by mid-November.
What else is happening...
Uyghur risk seen disrupting solar value chain - Roth Capital.
Wednesday's Key Earnings
Abbott Laboratories (NYSE:ABT) -2.2% with diagnostics up 38% on COVID-19 demand.
Biogen (NASDAQ:BIIB) +0.7% topping estimates, trimming outlook.
Chipotle (NYSE:CMG) -3.4% AH disappointing with lack of guidance.
Kinder Morgan (NYSE:KMI) +0.3% AH swinging to a Q3 profit.
Las Vegas Sands (NYSE:LVS) +4% AH expressing optimism for a complete recovery.
Tesla (TSLA) +3.3% AH knocking out five straight quarters of profit.
Verizon (NYSE:VZ) -0.9% despite strong wireless results, boosting guidance.
In Asia, Japan -0.7%. Hong Kong +0.1%. China -0.4%. India -0.4%.
In Europe, at midday, London -0.4%. Paris -0.5%. Frankfurt -0.6%.
Futures at 6:20, Dow -0.3%. S&P -0.3%. Nasdaq -0.3%. Crude +0.3% to $40.13. Gold -0.5% at $1920.10. Bitcoin +5.2% to $12833.
Ten-year Treasury Yield flat at 0.81%
Today's Economic Calendar
8:30 Initial Jobless Claims
10:00 Existing Home Sales
10:00 Leading Indicators
10:30 EIA Natural Gas Inventory
11:00 Kansas City Fed Mfg Survey
1:10 PM Fed's Daly Speech
1:10 PM Fed's Barkin Speech
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
6:00 PM Fed's Kaplan Speech