Wednesday Morning Reads

Possible tax cuts

President Trump is considering potential tax cuts on wages as well as profits from asset sales, while seeking to downplay concerns that the world's top economy could be heading for a recession. A "payroll tax is something that we think about," he told reporters, adding that he would not need Congressional approval to link capital gains taxes to inflation. "I'm not talking about doing anything at this moment, but indexing is something that a lot of people have liked for a long time."

Teaming up on Big Tech

Confirmed! The DOJ is working with a group of more than a dozen state attorneys general as it moves forward with a broad investigation of Big Tech that includes reviews of previously approved acquisitions. On July 23, the Justice Department said it was opening a probe into whether major digital technology firms engaged in anticompetitive practices, including concerns raised about "search, social media, and some retail services online."

Walmart sues Tesla

A day after unveiling a new solar panel rental program, Tesla (NASDAQ:TSLA) is facing some heat. Walmart (NYSE:WMT) sued the company over solar panels atop seven of its stores which allegedly caught fire and highlighted the familial ties between Tesla and SolarCity as the underpinnings of a flawed merger that produced shoddy craftsmanship. When Tesla acquired SolarCity in 2016, the $2.6B deal was criticized by many as a bailout for Elon Musk, who was the biggest shareholder of both the electric carmaker and the solar panel distributor.
Go deeper: Will Tesla's solar rental product be disruptive?

Postponing IPO

Amid growing political unrest in the Asian financial hub, Alibaba (NYSE:BABA) has delayed its up-to-$15B listing in Hong Kong, Reuters reports. The financial community is watching... While no new timetable has been formally set, Alibaba could launch the deal as early as October. Just last month, AB InBev (NYSE:BUD) canceled a planned up-to-$9.8B local IPO of its Asia Pacific unit, while the Hong Kong exchange is lagging behind its New York rivals in the annual battle to be the leading global listings venue.
Go deeper: 'Building A Bulletproof Portfolio Around Alibaba' by David Pinsen.

Merger back on?

Italian media reports are again talking about a merger between Fiat Chrysler (NYSE:FCAU) and Renault (OTCPK:RNLSY), bringing new rumors about negotiations between the two companies. To achieve the goal, the French government could halve their interests in Nissan (OTCPK:NSANY), thus convincing the Japanese company to accept its alliance partner joining the FCA group. The report from Il Sole 24 Ore will likely give the battered European auto sector some relief amid recent threats from President Trump to tariff the industry.
Go deeper: Ratings on Fiat Chrysler.

737 MAX flights targeted for Q4

Boeing (NYSE:BA) is hiring hundreds of temporary workers to assist with aircraft maintenance and customer delivery preparations of parked 737 MAX jets at Grant County International Airport in Washington state. It's the first publicly detailed step to deliver hundreds of the grounded planes to airlines all over the world. Boeing also reiterated plans to get the 737 MAX flying again commercially in "early fourth quarter" after it wins approval of reprogrammed software for its MCAS system.
Go deeper: BA performance over the last year.

A trade deal in sight?

Top Japanese and American negotiators will meet in Washington over the next two days in a last-minute attempt to compromise on beef and car exports to conclude a trade deal by September. The timeline is important in the context of the political calendar as President Trump is eager for a swift deal with tangible benefits to American farmers ahead of the U.S. presidential campaign in 2020. Japan also needs the final text of a deal by September in order to obtain parliamentary approval to put any trade pact into effect this year.

Protecting Gulf shipping

Australia is joining a U.S.-led naval coalition to protect shipping in the Gulf, where tensions have mounted after Iran seized a British-flagged tanker in the Strait of Hormuz in July. The country will contribute defense planning and operations staff to the coalition, including a Royal Australian Air Force P8 Poseidon surveillance aircraft and a Royal Australian Navy frigate. About 15% of crude oil and 25%-30% of refined oil destined for Australia transits through the Gulf.

Fresh uncertainty

Politicians from 5-Star and former Italian Prime Minister Matteo Renzi's center-left Democratic Party are openly discussing forming a new coalition which would push Matteo Salvini's League party into the opposition. Italian government bonds rallied yesterday after PM Giuseppe Conte resigned from the government, though Italian stocks fell again as analysts branded the situation a "total mess." Italy's debt-to-GDP ratio currently tops 131%, the highest in Europe with the exception of Greece, while the government has continued to risk an overshoot of EU-mandated deficit spending levels.
Go deeper: Holdings of the iShares MSCI Italy Capped ETF (NYSEARCA:EWI).

What else is happening...

YouTube (GOOG, GOOG) is ending targeted ads for kids - Bloomberg.

Another ex-JPMorgan (NYSE:JPM) trader pleads guilty to 'spoofing.'

Citigroup (NYSE:C), BNP (OTCQX:BNPQY) mixed into U.S. case against Huawei CFO.

Comptroller of Currency approves tweak of Volcker Rule.

Beyond Meat (NASDAQ:BYND) bull rating boosts shares.