Tuesday Morning Reads

Another AstraZeneca concern arises

AstraZeneca (NASDAQ:AZN) may have provided the U.S. outdated information that gave an "incomplete" view about the efficacy of its vaccine, according to the U.S. Data Safety and Monitoring Board.

"The DSMB expressed concern that AstraZeneca may have included outdated information from that trial, which may have provided an incomplete view of the efficacy data. We urge the company to work with the DSMB to review the efficacy data and ensure the most accurate, up-to-date efficacy data be made public as quickly as possible," the National Institute for Allergy and Infectious Diseases, headed by Dr. Anthony Fauci, said in a statement.

"The last thing this vaccine needs is more concern when we kind of thought we were at that point now where we’d put to bed all the other concerns, and then a new one pops up the same day," Paul Griffin, an associate professor of medicine at the University of Queensland, told Bloomberg.

The European Medicines Agency issued a statement last week that the benefits of the vaccine still outweigh the risks, despite the link to "rare blood clots with low blood platelets." AstraZeneca shares rose 4% on Wall Street yesterday after U.S. trial data showed a 79% efficacy rate. (11 comments)

Microsoft wooing Discord

Microsoft (NASDAQ:MSFT) is in talks about a possible $10B purchase of video game chat platform Discord, according to several published reports. No deal is imminent, and Discord is talking to other potential suitors and could still decide to eschew a sale and go public.

Discord has more than 100M active users and would likely fit well with Microsoft’s Xbox business. Discord moved above $100M in revenue last year and raised $100M in a $7B valuation. (6 comments)

Big Oil tilts to carbon pricing

In a video conference meeting today with Biden administration officials, executives from 10 of the biggest oil companies, including Chevron (NYSE:CVX) CEO Mike Wirth, offered support for putting a price on carbon emissions as a way to address greenhouse gas emissions that contribute to climate change. The meeting reportedly focused on emissions of methane from oil and gas production and on the industry's role in the administration's plans to decarbonize the U.S. economy.

Some execs from U.S. companies warned that the wrong policies would hurt U.S. producers and potentially increase demand for imports of fuel produced abroad under weaker environmental protections. In a statement, the White House said national climate adviser Gina McCarthy "made clear that the Administration is not fighting the oil and gas sector, but fighting to create union jobs, deploy emission reduction technologies, strengthen American manufacturing, and fuel the American economy." (85 comments)

Channel checks boost iPhone optimism

Wedbush's supply chain checks in Asia have come out bullish, with three weeks of no changes to builds or demand globally, and no issues arising from current global semiconductor shortages. And that likely means builds for iPhones this quarter have stayed in the 56M-62M range, it says. The firm is buying the dip on Apple (NASDAQ:AAPL) - not entirely a surprise - on expectations the momentum will continue, and has a Street-high price target.

Along with that March quarter forecast, analyst Daniel Ives thinks June quarter builds are basically unchanged in the mid-40M range, meaning the firm's supercycle thesis is playing out in the first half of this year. "We have not seen a robust launch uptrend such as this in a number of years for Apple and the only iPhone trajectory similar would be the iPhone 6 in 2014 based on our analysis," he writes. The rest of the Street may be expecting about 220M iPhones this year, but based on the current trajectory, Wedbush expects a bull case would be selling "north of 240M" or even 250M units, which would break the record of 231M units sold in fiscal 2015. It estimates 350M of 950M iPhones worldwide are in the window of an upgrade opportunity, marking an "unprecedented supercycle upgrade cycle." (21 comments)

Treasury yields still sliding

The 10-year Treasury yield is down 3 basis points to 1.65% after dropping yesterday. It's now about 10 basis points down from the high it hit last week. The 30-year, down 2 basis points to 2.36%, saw its first back-to-back down sessions since mid-February. "The interest rate move is looking increasingly mature and should see a meaningful decrease in 'speed' moving forward, even if absolute direction remains pointed to generally higher rates/steeper curves," SG Cowen said.

But tech stocks, which have seen an inverse relationship with yields, are edging lower. Nasdaq 100 futures (NDX:IND) -0.2% are off along with S&P futures (SPX) -0.2% and Dow futures (INDU) -0.3%, which have been hampered by cyclical weakness on down-yield days.

Later today, Fed chief Jay Powell and Treasury Secretary Janet Yellen will face lawmakers in congressional testimony about the economic response to COVID. It will be their first joint testimony as they appear before the House Financial Services Committee.
A third wave of COVID that is leading to renewed lockdowns in Europe, and a concern about rising U.S. cases that has paused some reopening plans, could be weighing on stocks and helping bonds as recovery and growth optimism ebbs. New York is now pausing plans to boost restaurant capacity to 50%. Germany is going into a hard lockdown over Easter.

What else is happening...

Researchers from the University of Toronto and WSJ pit Tesla (NASDAQ:TSLA) and Toyota (NYSE:TM) head-to-head on environmental impact.Apple (AAPL) reveals the retirement of its head of developer relations disclosure ahead of its trial against Epic.Regeneron’s (NASDAQ:REGN) COVID antibody cuts risk of hospitalization or death by 70%.Canadian Pacific Railway’s (NYSE:CP) takeover offer for Kansas City Southern (NYSE:KSU) boosts hope for expanded access to U.S. Gulf Coast refineries for Canadian oil producers.Citi expresses confidence that a crackdown on sharing streaming passwords will gain traction, helping offset billions of dollars of losses for companies like Netflix (NASDAQ:NFLX).Eastman Kodak (NYSE:KODK) is gaining in extended-hours trading as traders passed around a company blog post about one of Europe's largest online print shops.