Tuesday Morning Reads
- ‘Whatever It Takes’ Mode
- Pandemic Reduces Global Demand
- China Announces New Tariff Waivers
- Negative U.S. Rates
- Fed Says It Will Begin Buying
- Employers Rush to Adopt Virus Screening
- Why Are Some Planes So Full?
- Who Buys a $100 Million Shopping Mall
- Does Covid-19 Prove the Stock Market is Inefficient?
- Stick Necks Out Together
- Boeing CEO sees a U.S. airline collapsing in 2020
- Fed starts buying corporate bond ETFs
- Simon Property collecting more rent than what was predicted
- PNC selling BlackRock stake
- Canadian heavy crude moves to new record
- Two upgrades for CymaBay after 'stunning' development
- Canopy Growth advances market release of consumer brands
- Frenzy of corporate debt offerings
- Over-the-air updates for Mustang Mach
- Tanger Factory suspends dividend
- Datadog price targets raised after Q1 earnings
- Macerich FFO beats by $0.22, beats on revenue
The central bank's Secondary Market Corporate Credit Facility will begin purchases today of eligible exchange-traded funds invested in corporate debt, seeing the method as a fast way to direct money into the credit markets. It's a historic milestone for the Fed, which hasn't yet bought any ETFs. The program, managed by BlackRock (NYSE:BLK), centers around investment grade corporate bonds, though some will be high-yield. Another Fed facility designed to buy debt directly from issuers, the Primary Market Corporate Credit Facility, is set to launch "in the near future."
Go deeper: Frenzy of corporate debt offerings.
Another mixed day may be in store on Wall Street amid optimism about an economic recovery and fears about a second wave of coronavirus infections (Dr. Fauci will testify before the Senate at 10 a.m.). Pointing to bigger gains overnight, U.S. stock index futures have now inched closer to the flatline, up 0.2%. On the trade front, President Trump said he opposed renegotiating the U.S.-China Phase One deal, while Beijing announced a new list of 79 American products eligible for waivers from retaliatory tariffs.
"Air traffic levels will not be back to 100% by September. They won't even be back to 25%. Maybe by the end of the year we approach 50%," Boeing (NYSE:BA) CEO Dave Calhoun said in an interview with NBC to be aired today. "So there will definitely be adjustments that have to be made on the part of the airlines." Asked by Today show host Savannah Guthrie if a major airline might have to fold, Calhoun replied, "Yes, most likely." Related tickers: AAL, ALGT, ALK, DAL, FRNT, HA, JBLU, LUV, SAVE, UAL
The Department of the Interior has given final approval for Berkshire Hathaway's (BRK.A, BRK.B) $1B solar project in Nevada that could power 260K households, enough to cover the entire residential population of Las Vegas. When finished, the 690 MW Gemini Solar Project would become the world's eighth largest solar power facility in the world, spanning some 7,100 acres of federal land. The developers aim to build the project in two phases over 28 months, with the first portion coming online in early 2021 and final facility completion as early as 2022.
Chesapeake Energy (NYSE:CHK) does not expect to be in compliance with financial covenants beginning in Q4 and "management has concluded that there is substantial doubt about the company's ability to continue as a going concern." It's the second such warning by the company since November. This quarter's review of the value of Chesapeake's untapped oil and gas reserves is likely to show a decline due to its distressed finances, reducing its ability to borrow against those assets.
Tesla (NASDAQ:TSLA) restarted production yesterday in Fremont against Alameda County rules, ratcheting up a dispute that has received national coverage. "I will be on the line with everyone else. If anyone is arrested, I ask that it only be me," stated Elon Musk. Alameda's Public Health Department said it's addressing the matter with the same phased approach it uses for other businesses that have violated the order in the past. As for Musk, he didn't end up in handcuffs.
Looking to shore up its other travel and tourism businesses, Richard Branson's Virgin Group plans to sell as much as 12% (worth around $500M) of space-tourism venture Virgin Galactic (NYSE:SPCE). Last Month, Virgin Australia filed for bankruptcy, while U.K.-based Virgin Atlantic is asking for financial assistance from the U.K. government. Other businesses, such as a new Virgin cruise-line venture and a U.S. hotel group, have also been whacked by the coronavirus pandemic.
Britain could be headed toward negative interest rates at upcoming Bank of England monetary policy meetings, declared Deputy Governor for Monetary Policy Ben Broadbent. "The committee are certainly prepared to do what is necessary to meet our remit with risks still to the downside," he told CNBC. Besides two previous rate cuts, the BOE has announced £200B of fresh quantitative easing, bringing its bond buying program to a total of £645B.
Vodafone (NASDAQ:VOD) +5.4% premarket after meeting estimates with a 2.6% rise in full-year core earnings to €14.9B, though it pulled guidance due to coronavirus uncertainty. "We are experiencing a direct impact on our roaming revenues from lower international travel," according to the company, "however, we are seeing significant increases in data volumes and further improvements in loyalty." Vodafone also maintained its full-year dividend at €9.00 a share after cutting the payout a year ago to shore up its balance sheet.
Twitter (NYSE:TWTR) is beginning to label tweets that contain "disputed or misleading" information about the coronavirus and the COVID-19 pandemic. Some tweets may simply come with a linked label directing users to additional information; other tweets may be covered entirely by a warning label that will say "that the information in the Tweet conflicts with public health experts' guidance before they view it." The potential remedies may also include removal of the information.
What else is happening...
Energy Transfer (NYSE:ET) +0.7% cutting 2020 capex by another $400M.
Hertz (NYSE:HTZ) -2.8% AH after liquidity update, earnings.
Simon Property Group (NYSE:SPG) +4.6% AH reopening 89 properties.
Tilray (NASDAQ:TLRY) -5.3% AH as losses piled up.
Under Armour (NYSE:UAA) -9.7% warning of a sharp revenue decline.
In Asia, Japan -0.1%. Hong Kong -1.5%. China -0.1%. India -0.6%.
In Europe, at midday, London +1%. Paris -0.3%. Frankfurt +0.3%.
Futures at 6:20, Dow +0.2%. S&P +0.2%. Nasdaq +0.2%. Crude +5.6% to $25.48. Gold +0.5% to $1706.50. Bitcoin -0.2% to $8785.
Ten-year Treasury Yield flat at 0.72%
Today's Economic Calendar
6:00 NFIB Small Business Optimism Index
8:30 Consumer Price Index
8:55 Redbook Chain Store Sales
9:00 Fed's Bullard: “The Federal Reserve's Outlook for Testing Times”
10:00 Fed's Harker Speech
10:00 Randal Quarles to testify before the Senate Banking Committee
1:00 PM Results of $32B, 10-Year Note Auction
2:00 PM Treasury Budget
5:00 PM Fed's Mester Speech