Wednesday Morning Reads
- There’s A ‘Path to Complete This’
- Powell Says Economy Facing Growing Uncertainties
- Crackdown on Insider Trading
- Patently Interesting
- Doubts About Facebook Cryptocurrency
- Justice Department Investigates Chicken Industry
- Buy Low-Tops, Sell High-Tops
- Are Smarter People Better Investors?
- Value, Public vs Private
- Student Debt Forgiveness
- Futures rise, Micron earnings boost tech
- eBay hopes to upstage Amazon Prime Day
- Needham leaves Micron sidelines after earnings
- Tesla close to all-time delivery record - Musk
- Microsoft, Amazon have 50/50 JEDI shot - Wedbush
- Detroit automakers eye $100K pickups
- Leerink upgrades AbbVie in premarket analyst action
- AbbVie to secure $38B bridge loan for Allergan transaction
- Kraft Heinz to lean on zero-base budgeting
- Semis boosted by Micron earnings, Huawei workaround
- Wedbush cautious on Tesla into deliveries update
- BlackBerry +1.3% on beats, reaffirmed outlook
Open Interest Changes
Stronger-than-expected earnings from Micron Technologies (NASDAQ:MU) helped boost investing sentiment overnight as the semiconducter maker stuck to its forecast of a second half rebound in the memory chip market and resumed shipments to Huawei, sending shares up 10% premarket. Qualcomm (NASDAQ:QCOM) and Intel (NASDAQ:INTC) have also started shipping some components to the blacklisted Chinese tech giant after its lawyers studied export restrictions. Even when businesses have headquarters in the U.S., they may be able, through ownership of overseas subsidiaries and operations, to classify their technology as foreign, according to Cross Research analyst Steven Fox. Premarket: QCOM +1.5%, INTC +2%; XLNX +2.3%, STM +4.2%.
DJIA futures are ahead by 123 points, with stronger-than-expected earnings from Micron pushing Nasdaq futures up 0.8%, as positive trade comments from Treasury Secretary Steve Mnuchin added to gains (see below). It followed a series of Fed comments on Tuesday that trimmed hopes of a big July rate cut and weighed down the Wall Street benchmarks. Fed Chair Jerome Powell said the central bank is "insulated from short-term political pressures", while St. Louis Fed President James Bullard, the most dovish of the FOMC's voting members, declared that a 50 basis point rate cut in July would likely be "overdone" given the underlying strength of the U.S. economy.
"We were about 90% of the way there (with a trade deal with China) and I think there’s a path to complete this," Treasury Secretary Steven Mnuchin told CNBC, ahead of a big G20 meeting between President Xi and President Trump. He's also hopeful an agreement could be struck by the end of the year but said "there needs to be the right efforts in place." The outcome could be pivotal for financial markets that have been rattled by 18 months of trade tensions between the world's two largest economies.
Boris Johnson has toughened his Brexit rhetoric with a "do or die" pledge to leave the European Union on Oct. 31. He then said he would scrap Theresa May’s withdrawal agreement and seek a completely new deal before then, as minor changes would not satisfy him. Not only has the EU said it will not reopen the withdrawal agreement, but the timetable would be extremely tight as parliament is in recess over the summer. Sterling -0.2% to $1.2673.
eBay (NASDAQ:EBAY) has announced plans to hold a "Crash Sale" on July 15 to compete with Amazon (NASDAQ:AMZN) Prime Day, which will offer discounts of up to 80% on a variety of products. But unlike Amazon's 48-hour event, eBay is planning weeks of deals, culminating with its Crash Sale. "If history repeats itself and Amazon crashes that day, eBay's wave of can't-miss deals on some of the season's top items will excite customers around the world," the online auction site wrote in its announcement.
"There is a lot of speculation regarding our vehicle deliveries this quarter," Elon Musk told employees in an email. "The reality is that we are on track to set an all-time record, but it will be very close. However, if we go all out, we can definitely do it!" Tesla (NASDAQ:TSLA) has forecast it will deliver 90,000 to 100,000 cars in Q2 after handing over just 63,000 vehicles to customers in the first three months of the year. Shares have slumped 34% YTD, in part due to demand concerns that Musk has repeatedly downplayed.
Bitcoin (BTC-USD) prices are partying like it's 2017 amid the recent enthusiasm stoked by Facebook's (NASDAQ:FB) foray into the world of cryptocurrencies. Advancing for eight trading sessions in a row, Bitcoin jumped as much as 14% overnight to nearly $13,000, bringing its overall return for the year to 250%. Also notable is the fact that the cryptocurrency crossed above 60% market dominance for the first time in over 17 months.
Drive.ai, a self-driving startup that was once valued at $200M, has been scooped up by Apple (NASDAQ:AAPL), as well as dozens of its engineers. The deal and hires confirm that Apple hasn't given up its autonomous driving project, called Project Titan, which has gone through its own struggles. Drive.ai talked with multiple possible acquirers but only Apple was left as a possible suitor. The startup also ceased operations in the past two weeks.
The big healthcare news yesterday was AbbVie's (NYSE:ABBV) $63B deal for Allergan (NYSE:AGN), with the two drugmakers betting a combination will deliver new sources of growth. Buying Allergan would result in a major position in the $8B+ market for Botox and other beauty drugs, as well as a number of popular eye treatments, as AbbVie braces for the end of patent protection for the world's top-selling drug, Humira. The takeover, worth $188.24 a share in cash and stock, saw AbbVie's stock sink 16%, while shares of Allergan soared 25% on the news.
What else is happening...
'Are Institutions Selling Into This Rally?' asks contributor Chris Ciovacco.
Chicken producers on watch as price-fixing case gets more serious.
In Asia, Japan -0.5%. Hong Kong +0.1%. China -0.2%. India +0.4%.
In Europe, at midday, London +0.1%. Paris +0.1%. Frankfurt +0.5%.
Futures at 6:20, Dow +0.4%. S&P +0.5%. Nasdaq +08%. Crude +1.6% to $58.74. Gold -0.6% to $1410.80. Bitcoin +11% to $12604.
Ten-year Treasury Yield +3 bps to 2.02%
Today's Economic Calendar
7:00 MBA Mortgage Applications
8:30 Durable Goods
8:30 International Trade in Goods
8:30 Retail Inventories (Advance)
8:30 Wholesale Inventories (Advance)
10:00 State Street Investor Confidence Index
10:30 EIA Petroleum Inventories
11:30 Results of $18B, 2-Year FRN Auction
1:00 PM Results of $41B, 5-Year Note Auction