Tuesday Morning Reads
- Criminal Probe of Juul
- Controlling Computers With Your Mind
- Race for Mobile Hit
- Bitcoin Market Falls Sharply
- Market Manipulation in Germany
- The Next Recession
- Green New Deal Is Inevitable
- Trade optimism gives futures a boost
- Sterling rises on U.K. Supreme Court decision
- Alibaba completes deal with Ant Financial
- NIO EPS misses by RMB1.24, beats on revenue
- BlackBerry EPS beats by $0.01, misses on revenue
- 737 Max return up to individual countries
- VEREIT prices upsized equity offering
- ARMOUR Residential REIT declares $0.17 dividend
- Netflix turns negative for the year
- CarMax EPS beats by $0.07, beats on revenue
- Juul under criminal investigation
- Danaher announces redemption of senior notes due 2020
Open Interest Changes for Today:
Europe's top court declared today that Google (GOOG, GOOGL) does not have to remove links to sensitive personal data worldwide, five years after a "right to be forgotten" ruling forced it to delete links to personal information on request. The case tested Europe's right to extend its laws beyond its borders and pitted privacy rights against free speech. Another ruling saw Starbucks (NASDAQ:SBUX) win an appeal against an EU demand to pay up to €30M in back taxes to the Netherlands, while Fiat Chrysler (NYSE:FCAU) lost its appeal to pay back a similar amount of levies to Luxembourg. The outcomes could signal how the same judges will decide a related €13B case against Apple (NASDAQ:AAPL).
Prime Minister Boris Johnson acted unlawfully when he suspended Parliament this month for five weeks, according to the British Supreme court, opening the door to new challenges to his Brexit strategy. Sterling rose nearly 0.4% on the back of the decision to trade at $1.2478. The President of the Supreme Court, Brenda Hale, said there was no justification for the government taking such extreme action, but that it was for parliament to decide what to do next.
U.S. stock index futures are ahead by 0.3% after Treasury Secretary Steven Mnuchin confirmed U.S.-China trade talks will resume next month. The cancellation of a planned trip by Chinese trade negotiators to U.S. farming regions, and accompanying uncertainty, helped send shares lower on Friday and kept prices steady on Monday. More optimism? Chinese importers further said they would buy about 10 boatloads of U.S. soybeans - around 600,000 tonnes - to be shipped from Pacific Northwest ports from October through December.
Alibaba (NYSE:BABA) has scored approval for the proposed restructuring of its relationship with payments affiliate Ant Financial, more than 18 months after the deal's debut. Alibaba will exchange its profit sharing arrangement - which entitled it to 37.5% of Ant's pre-tax profits - for a 33% stake in the group, which was valued at $150B following a funding round in June 2018. "We expect (the transaction) to see greater synergy coming from the whole Alibaba economy," said CFO Maggie Wu. Ant Financial is also acquiring assets overseas via deals in India and Thailand, en route to a potential IPO.
Flirting with new record highs back in June, Netflix (NASDAQ:NFLX) entered negative territory for the year on Monday, erasing all of its 46% gain for the year at its peak. What happened? Netflix was hit by a rare loss in U.S. subscribers and a large miss on international subscriber adds in the second quarter, while its most popular show The Office was stripped from its platform by NBC (NASDAQ:CMCSA). Even bigger is increased competition in the streaming wars, with upcoming offerings from Apple (AAPL), Disney (NYSE:DIS), WarnerMedia (NYSE:T) and NBC.
Go deeper: Underlying metrics don't fare better for Netflix.
Reversing plans to shift assembly of its new Mac Pro to China, Apple (AAPL) is keeping production of the computer in Texas. It follows the Trump administration's decision last week to grant tariff exemptions on 10 items Apple imports from China, including components like power supplies and logic boards. "We thank the administration for their support enabling this opportunity," CEO Tim Cook said in a statement.
Go deeper: Bluesea Research sees Apple buybacks coming to an end.
Each country will make "its own decision" on when the Boeing (NYSE:BA) 737 MAX returns to service, according to FAA Administrator Steve Dickson, who has not yet set a timeline on when to allow the jets back in U.S. skies. The planes have been grounded worldwide since mid-March after two crashes within five months of each other killed 346 people. On Monday, Boeing also announced that it will pay $144,500 to each of the victims' families from a $50M financial assistance fund.
Shares of Overstock.com (NASDAQ:OSTK) slumped 25% on Monday after the company announced the resignation of another key executive, CFO Greg Iverson, and cut its earnings guidance. Losses since Sept. 12 now total more than 50% amid increased volatility following the departure of CEO Patrick Byrne late last month. The stock, which peaked in early 2018 at about $86 a share, is now trading below its May 2002 IPO price of $13 and is at its lowest mark since late June, according to FactSet.
Go deeper: Mixed ratings on Overstock.com.
AB InBev (NYSE:BUD) is raising about $5B in a Hong Kong IPO of the brewer's Asia-Pacific unit after pricing it at the bottom of a marketed range. Even so, the IPO will be the second biggest global offering this year, trailing only Uber's (NYSE:UBER) $8.1B flotation, and will give Budweiser Brewing APAC a market cap of more than $45B, making it one of the world's largest listed brewers. The proceeds will help AB InBev cut its $100B-plus debt accumulated following the purchase of rival SABMiller in 2016.
Federal prosecutors in California are conducting a criminal probe into e-cigarette maker Juul (JUUL), in which tobacco giant Altria (NYSE:MO) owns a 35% stake, WSJ reports. Regulators have criticized Juul for fueling a teen vaping "epidemic," while lawmakers have urged the FDA to pull most e-cigarettes off the market. It follows an outbreak of a deadly lung disease linked to vaping that has sickened at least 530 people and killed eight.
What else is happening...
In Asia, Japan +0.1%. Hong Kong +0.2%. China +0.3%. India -0.1%.
In Europe, at midday, London -0.3%. Paris +0.3%. Frankfurt +0.2%.
Futures at 6:20, Dow +0.3%. S&P +0.3%. Nasdaq +0.4%. Crude -1% to $58.04. Gold -0.2% to $1527.80. Bitcoin -2.2% to $9725.
Ten-year Treasury Yield +1 bps 1.72%
Today's Economic Calendar
8:55 Redbook Chain Store Sales
9:00 S&P Corelogic Case-Shiller Home Price Index
9:00 FHFA House Price Index
10:00 Consumer Confidence
10:00 Richmond Fed Mfg.
1:00 PM Results of $40B, 2-Year Note Auction