Tuesday Morning Reads
- True Character of this Market
- The New Fortune 500 List
- Bigger Than Brexit
- U.S., China Agree on Outline to Settle ZTE Controversy
- Massive Cut to Car Tariffs
- The Big Rally Is in Forward Prices
- The Movement to Break Up Facebook
- Futures higher after DJIA tops 25K
- Kohl's higher after lifting profit guidance
- China slashes import duties on cars
- Ban to be lifted on China's ZTE
- House votes on bill easing Dodd-Frank
- Pricey Model 3 preventing Tesla's death
- Mark Zuckerberg testifies in Brussels
- Brexit negotiations resume today
- F-35 used in combat for first time
Tweet of the morning:
— OddStats (@OddStats) May 21, 2018
Unusual Option Action:
Stocks, oil prices and the dollar are all getting a boost, with the Dow set to leap 228 points, amid easing U.S.-China tensions that have roiled global markets this year. "We are putting the trade war on hold. Right now, we have agreed to put the tariffs on hold while we try to execute the framework," Treasury Secretary Steven Mnuchin told Fox News, as Trade Representative Robert Lighthizer cautioned that tariffs remained an important tool to "protect our technology."
Paving the way for heavier international sanctions, Venezuela's Nicolas Maduro won a new six-year term on Sunday in an election deemed illegitimate by the opposition and foreign governments. The economy has been in recession since 2014, with the bolivar currency down 99% in the past year and inflation at an annual 14,000%, according to the National Assembly.
France is looking to see if the EU could compensate European companies that might be facing sanctions by the U.S. for doing business with Iran, according to French Finance Minister Bruno Le Maire. "Are we going to allow the U.S. to be the economic policeman of the world? The answer is no," he told C News TV and Europe 1 radio. "We want to defend our economic interests."
Political instability in Italy appears to be coming to an end with a power sharing agreement between the Five Star Movement and The League. While both parties are due to present their deal to the country's president later today, such a government could raise concerns across the eurozone due to planned higher spending. Italy's main stock market index, the FTSE MIB, started the week more than 1.8% lower on the news.
The ISDA is devising an emergency contingency plan to prepare for the demise of Libor, which is tracked by some $370T of financial products worldwide. Many institutions have been unwilling to participate in the rate since the discovery in 2012 that some of the world's largest banks had manipulated the benchmark. Libor is expected to be phased out over the next few years and may disappear by 2021.
With Argentina on the brink of a financial crisis, the IMF has formally begun bailout negotiations, without any objection from the Trump administration. Such measures rarely advance without U.S. support. The peso has fallen drastically against the dollar, while the nation has been dogged by persistent budget deficits, high inflation and trade imbalances.
Opening up the United Arab Emirates... Nasdaq Dubai plans to start equity futures of leading listed Saudi Arabian firms, giving investors new hedging tools to take long and short positions on the shares. The UAE further plans to allow 100% foreign ownership in companies and grant long-term visas to some investors as the second-biggest Gulf economy seeks to attract more investments.
The average price of regular-grade gasoline in the U.S. is now $3.00 per gallon after jumping $0.10 over the past two weeks. Most expensive/cheapest in the nation? $3.79 in the San Francisco Bay Area and $2.54 in Baton Rouge, Louisiana. Though prices at the pump are likely to be the highest since 2014, AAA is still projecting the largest Memorial Day weekend travel volume since 2005.
General Electric is nearing a deal to sell its transportation business to railroad equipment maker Wabtec (NYSE:WAB), possibly for more than $20B, Reuters reports. It would be the biggest deal thus far to be inked by CEO John Flannery, who took over last August with a mandate to slash costs, boost GE's plummeting stock price and remake the image of the U.S. industrial conglomerate. GE +2.1% premarket.
Following an uproar over the way two black men were treated at a Starbucks in Philadelphia last month, the coffee giant has unveiled a new visitor policy. "Any person who enters our spaces, including patios, cafes and restrooms, regardless of whether they make a purchase, is considered a customer." Starbucks (NASDAQ:SBUX) will also close its outlets on the afternoon of May 29 for anti-bias education.
The Madison Square Garden Company is partnering with Las Vegas Sands (NYSE:LVS) to build an orb-shaped arena on the Las Vegas Strip. Standing 360 feet tall and holding 18,000 seats, the MSG Sphere (NASDAQ:MSG) is being built strictly for music and entertainment purposes, although it could host e-sports competitions. Plans are also in the works for a similar venue in London.
With three new Ebola cases confirmed in Mbandaka, a city of about 1.5M people, Congo is beginning to vaccinate against the hemorrhagic virus today. The World Health Organization, which called the risk of the disease spreading "very high," is sending the country 7,540 doses of the vaccine developed by Merck (NYSE:MRK). It's also in talks about a second vaccine made by Johnson & Johnson (NYSE:JNJ).
Boeing is joining Mexican authorities investigating Friday's deadly plane crash in Cuba following allegations that the Mexican charter airline, Aerolineas Damojh, had previously been warned about safety violations. The Boeing 737 (NYSE:BA) crashed outside Havana, killing 110 of the 113 passengers, while the remaining three survivors are in critical condition at the Calixto Garcia Hospital.
Boosting its efforts in developing "conversational AI," Microsoft (NASDAQ:MSFT) has bought artificial intelligence startup Semantic Machines. "Intelligent assistants need to be able to have a natural dialogue instead of just responding to commands," said CTO of AI & Research David Ku. Semantic Machines' team previously led automatic speech recognition development for Apple's (NASDAQ:AAPL) personal assistant Siri.
The box office reign of Avengers: Infinity War has come to an end thanks to 20th Century Fox's (NASDAQ:FOXA) R-rated superhero film Deadpool 2. The movie scored $125M in its opening weekend in the U.S. and Canada, but couldn't match the original Deadpool, which broke records and shattered expectations when it took in $132M in its opening weekend two years ago.
In Asia, Japan +0.3%. Hong Kong +0.6%. China +0.6%. India -0.7%.
In Europe, at midday, London +0.8%. Paris +0.7%. Frankfurt -0.3%.
Futures at 6:20, Dow +0.9%. S&P +0.5%. Nasdaq +0.6%. Crude +0.2% to $71.52. Gold -0.6% to $1283.50. Bitcoin -0.5% to $8477.
Ten-year Treasury Yield flat at 3.07%