Wednesday Morning Reads
- Hopes for Early Deal Fade
- Fighting Global Slowdown
- The Upside-Down Economy
- Risky Borrowers Are Cashing In
- Would You Like a Podcast With Those Fries?
- The Collective Memory of American Shoppers
- The Red Queen of Investing
- The Recession
- Target soars after earnings smasher
- Futures rise ahead of central bank action
- State Department clears $8B arms sale to Taiwan
- Kinder Morgan sells off Kinder Morgan Canada, pipeline section to Pembina
- Another ex-JPMorgan trader pleads guilty to 'spoofing'
- Lowe's rallies after earnings topper, reaffirmed FY2019 outlook
- Baozun +1.6% on Q2 strength, in-line view
- Alibaba postpones Hong Kong listing - Reuters
- Walmart sues Tesla, claiming solar panels caused fires at its stores
- Royal Bank of Canada EPS misses by 0.04
- Baozun EPADS beats by $0.02, beats on revenue
- Philips fired whistleblower who warned of graft
Open Interest Changes
This week's central bankfest is ready for kickoff, starting with minutes from the Fed's July 30-31 policy meeting, when officials voted to lower interest rates for the first time since 2008. Traders will look for signs of disagreement on the FOMC, and clues to what the central bank might do next. The event will be followed by tomorrow's ECB minutes and the Jackson Hole symposium on Friday, where the focus will turn to Fed Chair Jerome Powell's tone and signals of further easing. Ahead of the action, Dow futures are ahead by 173 points, while S&P 500 and Nasdaq futures are up 0.8% and 0.9%, respectively.
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."
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."
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?
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.
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.
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.
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.
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.
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...
Comptroller of Currency approves tweak of Volcker Rule.
Home Depot (NYSE:HD) +4.4% on strong earnings, despite outlook cut.
Kohl's (NYSE:KSS) -6.9% on gross margin worries.
Medtronic (NYSE:MDT) +2.6% topping expectations.
Seadrill (NYSE:SDRL) +0.4% seeing some improving trends.
TJX Companies (NYSE:TJX) -0.1% after comp sales disappointed.
Urban Outfitters (NASDAQ:URBN) +0.5% AH giving a positive outlook.
In Asia, Japan -0.3%. Hong Kong +0.2%. China flat. India -0.8%.
In Europe, at midday, London +1.1%. Paris +1.5%. Frankfurt +1.2%.
Futures at 6:20, Dow +0.7%. S&P +0.8%. Nasdaq +0.9%. Crude +0.9% to $56.65. Gold -0.4% to $1509.30. Bitcoin -4.4% to $10203.
Ten-year Treasury Yield +3 bps to 1.59%