Tuesday Morning Reads
- Boom in Share Sales
- The Case(s) Against Big Tech
- With or Without TikTok
- The New 60/40
- Offices Resort to Sensors
- Many Stock Investors Are Too Young
- Chasing Illicit Money
House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin appear to be making progress in their latest coronavirus stimulus talks. The pair "continued to narrow their differences," according to a spokesman for Pelosi, who "hopes that, by the end of the day Tuesday, we will have clarity on whether we will be able to pass a bill before the election." U.S. stock index futures climbed around 0.6% overnight following the announcement, after suffering a broad decline during Monday's session. On the earnings front today, reports will be headlined by Procter & Gamble (NYSE:PG), Snap (NYSE:SNAP) and Netflix (NASDAQ:NFLX).
The U.S. could authorize emergency use of Moderna's (NASDAQ:MRNA) experimental COVID-19 vaccine in December, according to CEO Stéphane Bancel, if the company gets positive interim results in November from a large clinical trial. The comments suggest Moderna's timetable isn't that far off from Pfizer's (NYSE:PFE), which said last week it expects to seek U.S. authorization of emergency use of its vaccine by late November. The latest news comes as two other leading COVID-19 vaccines, from Johnson & Johnson (NYSE:JNJ) and AstraZeneca (NASDAQ:AZN), have been paused as the companies investigate illnesses among study subjects.
Go Deeper: Pfizer has already manufactured “several hundred thousand doses” in Belgium.
Shares of IBM (NYSE:IBM) slipped nearly 3% after the bell on Monday, as the company reported Q3 revenues that fell 3% Y/Y to $17.56B. While the figure matched consensus estimates, it marked the third straight quarter of revenue declines for Big Blue. Investors are also anxiously awaiting earnings from Netflix (NFLX), which will report this afternoon. Will the ongoing coronavirus pandemic affect membership? How will the number compare to the weak subscriber guidance the company issued in July?
Shares of UBS (NYSE:UBS) are powering ahead, 5.5% higher in premarket trade, as the bank posted a 99% jump in Q3 net profit to $2.1B (vs. $1.56B consensus). Investment banking saw earnings more than triple thanks to a spike in trading performance and asset management saw profits grow six times from a year ago. "Our third quarter results continue to demonstrate that our strategy is differentiating us," said CEO Sergio Ermotti, who will be replaced in November by former ING boss Ralph Hamers. "UBS has all the options open to write another successful chapter of its history under Ralph's leadership."
Go Deeper: UBS also set aside billions for buybacks and dividends.
ConocoPhillips (NYSE:COP) has announced a $9.7B deal to acquire Permian specialist Concho Resources (NYSE:CXO), in a gamble that will see the combined company produce 1.5M barrels per day, or a tenth of daily U.S. output. While it may seem like an odd time to go big on U.S. shale, considering how oil has done this year, it could make for a good time to pick up assets as the coronavirus pandemic depresses prices. The wave of consolidation doesn't stop there. Pioneer Natural Resources (NYSE:PXD) is in talks to buy Parsley Energy (NYSE:PE), just a few weeks after Devon Energy (NYSE:DVN) snapped up WPX Energy (NYSE:WPX) for $2.6B.
Shedding another non-core business to fix its chip technology woes, Intel (NASDAQ:INTC) has agreed to sell its NAND memory unit to SK Hynix (OTC:HXSCF) for $9B. Intel already pared down its involvement in memory manufacturing in January when it sold its share of a joint venture with Micron (NASDAQ:MU) amid increasing market pressures and production struggles. With Intel shares down about 10% over the past six months, the U.S. chip giant intends to invest the proceeds from its latest deal in fast-growing areas like artificial intelligence and 5G networking.
China's top ride-hailing firm, Didi Chuxing (DIDI), has begun exploring a 2021 IPO in Hong Kong after rethinking previous aims to list in New York, according to Reuters. Reasons? Deteriorating U.S.-China relations, stricter audit requirements from U.S. regulators, as well as uninspiring stock performances by rivals Uber (NYSE:UBER) and Lyft (NASDAQ:LYFT). Didi, backed by SoftBank (OTCPK:SFTBY), Alibaba (NYSE:BABA) and Tencent (OTCPK:TCEHY), began the IPO talks with investment banks after it began generating a profit during the second quarter of the year. It's also considering a new fundraising round to boost its valuation to more than $60B.
Go Deeper: Hong Kong exchange green lights Ant Group IPO.
Goldman Sachs (NYSE:GS) has reached a long-awaited pact with the U.S. Justice Department to pay more than $2B for its role in Malaysia's 1MDB scandal, and the deal may be announced within days, Bloomberg reports. It follows an agreement in July to settle a related probe with Malaysia, in which the bank promised to pay $2.5B (and slashed its Q2 results to reflect the charges). In all, Goldman may pay roughly $5B once accords with Malaysia, the DOJ and other agencies are tallied together (Malaysia dropped criminal charges against the company in early September).
What else is happening...
In Asia, Japan -0.4%. Hong Kong +0.1%. China +0.5%. India +0.3%.
In Europe, at midday, London flat. Paris +0.2%. Frankfurt -0.6%.
Futures at 6:20, Dow +0.5%. S&P +0.6%. Nasdaq +0.7%. Crude flat at $41.05. Gold -0.1% at $1910. Bitcoin +2.8% to $11794.
Ten-year Treasury Yield +2 bps to 0.78%
Monday's Key Earnings
Today's Economic Calendar
8:30 Housing Starts and Permits
8:55 Redbook Chain Store Sales
10:50 Fed's Quarles: "Financial Stability Board Agenda"
1:00 PM Fed's Evans: U.S. Monetary Policy
3:00 PM Fed's Brainard: "Community Reinvestment Act"
5:00 PM Fed's Bostic Speech