Tuesday Morning Reads
- Power Struggle With U.S.
- July Is the New January
- Walt Disney Restructures
- Chance at Salvation
- Then ‘Chaos and Confusion.’
- Steals Rivals’ Black Friday Spotlight
- Retail Investors Embrace Risk and the ‘Hive Mind’ in Stock Boom
- Goldman Sachs Struggling to Reach Financial Targets
- Economists Tell Stories, Just Like Novelists
- Must Stop Financing Fossil Fuels
- Don’t Mix Your Politics With Your Portfolio
Wedbush is calling today's Apple (NASDAQ:AAPL) iPhone event a "once in a decade" potential launch, and the stock is responding accordingly. Shares are up 2% premarket, following a 6.4% advance on Monday, amid expectations that it will be the first iPhone with full 5G capacity and somewhat cheaper than last year's devices. Analyst Daniel Ives predicts four iPhone models: 5.4-inch OLED display (starting price: $699); 6.1-inch OLED display ($799), 6.1-inch iPhone Pro OLED ($999), and 6.7-inch OLED display iPhone Pro Max ($1,099). The Pro models will likely differentiate with LIDAR sensors for AR, enhanced rear camera tech, and 4x/5x optical zoom.
Consumers are already filling up their shopping carts as Amazon's (NASDAQ:AMZN) Prime Day kicked off at 3 a.m. ET, with 48 hours of discounts on more than 1M items, including "Lightning Deals" for Prime members. Amazon shares rose 4.8% to $3,442 on Monday in anticipation of the event, pushing the stock up over 85% YTD. Due to the coronavirus pandemic, analysts predict the online shopping bonanza will be the biggest in Amazon's history, with revenue expected to jump about 42% Y/Y to $7.5B, according to JPMorgan.
The political headlines are hitting the sidelines as earnings season formally kicks off in the U.S., while cash continues to pour into Big Tech following a major rally on Monday that saw the Nasdaq close up 2.6%. Big bank earnings take center stage this morning, with results from JPMorgan (NYSE:JPM) and Citigroup (NYSE:C), though investors will also digest reports from Delta Air Lines (NYSE:DAL) and Johnson & Johnson (JNJ). Earnings from S&P 500 companies are estimated to fall 20.5% from a year earlier in Q3, signaling an improvement from the 25% decline anticipated at the end of June and the 32% drop reported in Q2.
The study of Johnson & Johnson's (NYSE:JNJ) COVID-19 vaccine has been temporarily stopped due to an unexplained illness in a trial participant, according to a report by health care news provider STAT. Clinical trial pauses are not uncommon, and in some cases last only a few days; study pauses also are not surprising given the size of Johnson & Johnson's 60K-patient clinical trial. News of the halt comes after AstraZeneca (NASDAQ:AZN) also paused tests of its vaccine after a trial participant fell ill; the study has resumed in some countries but remains halted in the U.S.
The 25-year-old man, who is a resident of Washoe County in Nevada, became seriously ill following a second infection, a study in the Lancet Infectious Diseases journal showed, raising further questions about coronavirus immunity. A comparison of genetic codes showed "significant differences" between each virus variant, meaning the patient caught the coronavirus on two separate occasions, rather than the original infection bouncing back after becoming dormant. Reports of secondary coronavirus infections in Hong Kong, the Netherlands and Belgium were no more serious than the first, but one in Ecuador mirrored the U.S. case in being more severe.
Seemingly absorbing some growing advice from industry pros, Walt Disney (NYSE:DIS) is announcing a major reorganization where it will be making streaming its "primary focus" for entertainment. The company will rearrange its media and entertainment divisions into a single organization responsible for content distribution, ad sales, and Disney Plus. The new distribution group will be overseen by Kareem Daniel, the former president of games/publishing in the company's consumer products group. DIS +4.8% premarket.
Personal computer sales recorded their strongest growth in a decade during Q3, driven by remote work, at-home schooling and entertainment during the COVID-19 pandemic. Overall, PC shipments rose 14.6% to 81.3M units, according to IDC, while Gartner pegged the increase at 3.6% to 71.4M units (though its data excluded Chromebooks). "It used to be the case that smartphones were king," said Jitesh Ubrani, IDC's research manager for Mobile Device Trackers. "At the start of the pandemic, people pulled out their old PCs in many cases and they realized that this PC is really too old to be productive."
The possibly of a stablecoin being used by billions of people - think of Facebook's (NASDAQ:FB) Libra - is spurring central banks to put together rules that would govern the currency. The latest? The Financial Stability Board has agreed to build a roadmap to enhance cross-border payments, flexibility, efficiency and coordination. Among the items are the "completion of international standard-setting work by December 2021," "supervisory and oversight frameworks by July 2022" and "review of implementation by July 2023."
The global response to COVID-19 can "reshape the future of energy" for years to come, according to the International Energy Agency's annual World Energy Outlook report. Renewables will take "starring roles" and solar will take "center stage" due to supportive government policies and declining costs. "I see solar becoming the new king of the world's electricity markets," said Fatih Birol, IEA's executive director. "Based on today's policy settings, it is on track to set new records for deployment every year after 2022."
What else is happening...
Nat gas extends rally to surge to highest since March 2019.
U.S. luxury homes record 42% jump in third quarter.
In Asia, Japan +0.2%. Hong Kong -0.2%. China flat. India +0.1%.
In Europe, at midday, London -0.4%. Paris -0.3%. Frankfurt -0.3%.
Futures at 6:20, Dow -0.5%. S&P -0.1%. Nasdaq +1%. Crude +2% to $40.21. Gold -0.1% at $1926.80. Bitcoin +1.4% to $11520.
Ten-year Treasury Yield -1 bps to 0.76%
Today's Economic Calendar
6:00 NFIB Small Business Optimism Index
8:30 Consumer Price Index
8:55 Redbook Chain Store Sales
12:25 PM Fed's Barkin: “Early Childhood Education: Now More Than Ever”
2:00 PM Treasury Budget
8:00 PM Fed's Daly: "Is the Federal Reserve Contributing to Economic Inequality"