Tuesday Morning Reads
- $500 Million Jackpot When Oil Went Negative
- U.S. Oil Production Dropped Massively
- Black Friday ‘Peak On Top Of Peak’
- The Caribbean Dilemma
- It’s Backordered
- Deadly Fiasco
- Best-Performing Asset Classes of the 2020s
- The Most Lopsided Days
Chart of the Day?
Reporting a record $6.7B loss overnight as the oil industry struggles, BP (NYSE:BP) halved its dividend to 5.25 cents per share following in the footsteps of rival Royal Dutch Shell (RDS.A, RDS.B). Analysts are still scratching their heads, with the stock up 8.2% premarket, though some are attributing the big move to business segments that are getting overshadowed. BP said it had "an exceptionally strong contribution" from trading (more than $1B for the quarter) and launched a new green strategy. It pledged to increase low-carbon spending to $5B a year by 2030 and boost renewable power generation to 50 gigawatts while shrinking oil and gas output by 40% compared with 2019.
Disney (NYSE:DIS) will lead the earnings charge after the market close today, with results also expected from Activision Blizzard (NASDAQ:ATVI), Beyond Meat (NASDAQ:BYND) and Nikola (NASDAQ:NKLA). While the House of Mouse has reopened theme parks in Asia, France and Florida, and inked a deal with the NBA to resume the season at its facilities, the company is not out of the woods yet. It has had to contend with shuttered cruise lines, disrupted production schedules, slashed advertising budgets and indefinitely delayed major theatrical releases. Disney+ promises to be a rare bright spot, but from a revenue perspective, the streaming service is still only a small piece of the sprawling media empire.
The drama surrounding TikTok (BDNCE) prompted Chinese state media to lash out overnight, with the China Daily and Global Times labeling the U.S. a "rogue country" and likening the potential sale to Microsoft (NASDAQ:MSFT) as "open robbery." President Trump has also come under fire for saying "key money" would have to be paid to the U.S. Treasury for making the deal possible (he previously said TikTok would be banned from Sept. 15). The crackdown has split many in the industry, with some advocating a "whatever it takes" approach in the "technology war," while others decry the betrayal of values like free speech and capitalism. Remember, services like Google Search (GOOG, GOOGL), YouTube, Facebook (NASDAQ:FB), Instagram, Twitter (NYSE:TWTR) and Snapchat (NYSE:SNAP) are all banned in China, while the U.S. has introduced recent measures to eliminate Chinese IP and trade secret theft.
Stocks began August on the front foot as a basket of positive news sent the major stock averages higher with the Nasdaq Composite notching its 29th record close of the year after topping 11,000. Big Tech dealmaking, an Eli Lilly (NYSE:LLY) antibody trial and strong manufacturing data lifted markets, though U.S. futures fell 0.3% overnight, giving back some of the big gains. Democratic leaders and White House officials are still at odds over a new coronavirus aid package. While the two sides have agreed on another round of stimulus checks, they remain deadlocked on whether to cut a $600-a-week federal jobless supplement.
Talk about the tech rally... Google (GOOG, GOOGL) announced a long-term partnership with ADT yesterday that sent shares of the latter up 56%. The deal will see the company invest $450M for a 6.6% stake in ADT, with Google hardware and services set to be integrated in ADT's installation, service and professional monitoring network. In related news, Google parent Alphabet locked in some of the lowest borrowing costs ever for a U.S. company, completing a $10B sale of bonds across six maturities ranging from five to 40 years.
Virgin Galactic (NYSE:SPCE) inked a non-binding memorandum of understanding with Rolls-Royce (OTCPK:RYCEF) to collaborate in designing and developing engine propulsion technology for supersonic commercial travel. It also unveiled its initial design concept of a high-speed aircraft - that would have capacity for 9 to 19 people at an altitude above 60K feet - before disclosing earnings results and a new 20.5M stock offering that weighed on shares. On Sunday, SpaceX (SPACE) ferried astronauts Doug Hurley and Bob Behnken back from the International Space Station for a landing in the Gulf of Mexico, marking the first splashdown in the last 45 years of NASA travel.
Companies worldwide spent a record $34.6B on cloud services in Q2, up roughly 11% from the previous quarter and 30% from the same period last year, according to research firm Canalys. Example: Jones Lang LaSalle (NYSE:JLL), one of the world's largest commercial real estate services firms, has shifted roughly 90% of its employees to remote work due to the coronavirus, representing about 90,000 workers. However, as social distancing and lockdowns become part of the daily vocabulary, other sectors of the economy are not faring as well. 2020 is on track to have the highest number of retail bankruptcies in a decade, according to S&P Global Market Intelligence. Le Tote, owner of Lord & Taylor, and Tailored Brands (NYSE:TLRD), parent company of Men's Wearhouse, became the latest to join the retail graveyard this past Sunday.
In Asia, Japan +1.7%. Hong Kong +2%. China +0.1%. India +2%.
In Europe, at midday, London +0.2%. Paris +0.1%. Frankfurt -0.5%.
Futures at 6:20, Dow -0.2%. S&P -0.3%. Nasdaq -0.3%. Crude -1.6% to $40.35. Gold +0.3% to $1992.30. Bitcoin -0.2% to $11280.
Ten-year Treasury Yield -2 bpst to 0.54%