Tuesday Morning Reads
Reads:
- Halt To U.S. Purchases Ordered
- Global Shares Cruise To Three-Month Highs
- A Tug-of-War Between Bulls and Bears
- Sell, Stow Or Dump?
- Why U.S. Stocks Can Keep Rallying
- Retailers, Battered by Pandemic, Now Confront Protests
- Face Big Economic Risks
- KKR Spends Big
- BlackRock Is Biggest Beneficiary
- Not A Repeat of the Boeing Deal
News:
- Futures turn around, extend Monday's gains
- Wells Fargo sees big upside in Microsoft
- Inpixon up big premarket ahead of possible capital raise
- Visa reports recovery in U.S. payments volume in May
- Bristol-Myers' ozanimod successful in pivotal ulcerative colitis study
- IPO revival: Vroom, Shift4, Warner Music
- Retailers slash iPhone prices in China as part of annual ‘6.18’ shopping festival
- Trump says he's deploying military to quell violence
- Cedar Fair looks to the future
- Pfizer selloff enhancing attractiveness - WSJ
- Baozun EPS beats by $0.03, beats on revenue
- GE tax dispute is not of concern - Barron's
Premium:
Charts:
SPY
The market for initial public offerings looked like it might finally be recovering from the WeWork (WE) debacle before COVID-19 brought IPOs to a halt over the past two months, but there are now signs of life as capital markets recover. Online used car seller Vroom (VRM) is set to price shares between $15 to $17, aiming to raise about $318.8M at the top end of the range with a market cap of $1.92B. Shift4 Payments (FOUR) has also set terms for its initial public offering of common stock, while Warner Music (WMG) will price shares in what could become the largest New York IPO so far in 2020.
Hong Kong is seeing its first $1B+ listing in more than six months as Chinese internet company NetEase (NASDAQ:NTES) launched a second listing that could raise as much as $2.8B. The financial hub hasn't had a hiatus of billion-dollar initial public offerings last this long since the financial crisis, when there were no such deals for almost a year. Only $3.47B has been raised through IPOs in Hong Kong this year, putting it behind both New York and mainland China.
U.S. stock index futures are ahead by 0.7%, erasing an earlier loss following President Trump's promise to deploy the military if states and cities fail to quell the violence swelling across the nation. "The main focus once again appears on the longer-term prospects of the easing of lockdowns across the world, though if the violence on U.S. streets continues for much longer, U.S. investors might have to cope with a lockdown of a different kind, imposed by the National Guard," said Michael Hewson, an analyst at CMC Markets.
Gun demand expected to stay strong
Shares of American Outdoor (NASDAQ:AOBC) and Sturm Ruger (NYSE:RGR) jumped nearly 10% on Monday as gun background checks rose 75% in May - on an adjusted basis - to follow on strong months in March (+80%) and April (+62%). KeyBanc expects another gain in background checks for June. "People are watching the news," added Steve Sosnick, chief strategist at Interactive Brokers. "The market is anticipating that there will be increased interest and demand for firearms as a result of what’s going on in the world right now."
State-owned Chinese firms bought at least three cargos of U.S. soybeans on Monday despite reports suggesting Beijing had ordered a freeze on American farm good purchases due to an escalation with the U.S. over Hong Kong. Sources also suggested that state purchases of U.S. pork, corn and cotton were put on hold. In jeopardy? Any sustained halt in buying would threaten progress in meeting goals set in the Phase One trade agreement signed in January.
Hundreds of Facebook (NASDAQ:FB) employees, including some top managers, walked away from their work-from-home desks on Monday to accuse Mark Zuckerberg of inadequately policing President Trump's posts as strictly as Twitter (NYSE:TWTR). "Facebook’s recent decision to not act on posts that incite violence ignores other options to keep our community safe. We implore the Facebook leadership to #TakeAction," they said in a joint statement. Reports suggest CEO Zuckerberg's weekly Friday Q&A session will be rescheduled for today in response.
If Bayer (OTCPK:BAYRY) wants to keep its total Roundup liability capped at $10B, a problem inherited when it acquired Monsanto in 2018, it will be crucial to get a 2018 California court verdict overturned. The German chemical giant will ask the state appeals court today to throw out a jury conclusion that the herbicide product caused grounds keeper Lee Johnson's cancer. While he was awarded $289M before a judge cut the damages to $78.5M, Bayer has been reaching settlements in thousands of other cases that range from a few thousand dollars to several million per claim.
Boeing (NYSE:BA) has taken former partner Embraer (NYSE:ERJ) to arbitration over a failed $4.2B transaction after a similar move by the Brazilian planemaker. The collapsed deal in April left Embraer scrambling for a plan B as its market value deteriorated due to the coronavirus pandemic. The company is now looking at China and India as potential business partners, following reports last week that said those two countries and Russia were interested in the planemaker's commercial jets division.
What else is happening...
Uber (NYSE:UBER), Lyft (NASDAQ:LYFT) suspend some service during curfews.
Seadrill (NYSE:SDRL) to delist in NY; books $1.2B impairment.
Visa (NYSE:V) reports U.S. payments volume recovery in May.
Sony (NYSE:SNE) postpones reveal of PlayStation 5.
Zynga (NASDAQ:ZNGA) buys Turkish mobile-game studio Peak for $1.8B.
In Asia, Japan +1.2%. Hong Kong +1.1%. China +0.2%. India +1.6%.
In Europe, at midday, London +1%. Paris +1.8%. Frankfurt +3.5%.
Futures at 6:20, Dow +0.7%. S&P +0.7%. Nasdaq +0.7%. Crude +2.9% to $36.46. Gold flat at $1750. Bitcoin +5.8% to $10097.
Ten-year Treasury Yield +2 bps to 0.68%
Today's Economic Calendar
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