Wednesday Morning Reads
Reads:
- Bitcoin, Ethereum, Ripple’s XRP, And Litecoin In Shock Meltdown
- Trump Impeachment?
- Raising the Most IPO Cash Since the Dot-Com Era
- Behind WeWork Leader’s Rise and Fall
- Abandon Plastic Water Bottles
- Reality Check for China
- There Are No Secrets
- Must Watch if You Pay Taxes
- How Big Will The Next Market Pullback Be?
News:
- What to expect at Amazon's hardware event
- Growing uncertainty sends futures lower
- Massachusetts bans all e-cigarettes
- Ford to put struggling India business into JV
- AT&T prepays, terminates $5.9B in term loans
- Dow utilities surge to record as Treasury yields fall again
- Bitcoin extends decline, below $8,000
- Broadcom prices upsized mandatory convertible preferred stock offering
- Evercore likes Strongbridge Biopharma in premarket analyst action
- Best Buy sees $50B in revenue, $1B in cost savings by 2025
- Solar tax credit extension would add $87B to U.S. economy, report says
- Kinder Morgan starts Gulf Coast Express gas pipeline ahead of schedule
Briefing:
- Several private investors want to sell shares of Juul amid vaping investigation (MO). NY Post Report
- AT&T (T) COO is not planning to sell Direct TV unit. WSJ Report
- A House panel introduced legislation that would authorize $1 bln to replace Huawei and ZTE (ZTCOY) equipment (QCOM, CSCO, NOK). Reuters Report
- Saudi Aramco will launch IPO process next month (IPOXX). Bloomberg Report
- Amazon (AMZN) introduces app based medical technology for its employees. FT Report
- BYD Inc. is considering IPO of electronic component unit (BRK.B). Bloomberg Report
- KKR (KKR) aims to sell European Locomotive Leasing. Reuters Report
- Amazon (AMZN) purchased cloud startup INLT. Reuters Report
Futures:
Premium:
Morning Charts:
Seeking Alpha:
Equities turned lower yesterday after President Trump delivered a stinging rebuke of China's trade practices, while Democrats in Congress launched a formal impeachment inquiry into the president's dealings with Ukraine. "Not only has China declined to adopt promised reforms, it has embraced an economic model dependent on massive market barriers, heavy state subsidies, currency manipulation, product dumping, forced technology transfers and the theft of intellectual property," Trump told the United Nations General Assembly. Dow and S&P 500 futures are now down by 0.4%, while the Nasdaq is off by 0.6%, on the prospect of impeachment hearings adding to the market uncertainty.
Go deeper: The Heisenberg breaks down current political implications.
Reaction to impeachment proceedings?
The S&P 500 fell as much as 4.9% on October 8, 1998, the day the House voted to begin impeachment proceedings against President Clinton, before trimming losses to end the day down 1.2%. By the time Clinton was acquitted by the Senate in February 1999, the index was up 28%. Markets shrugged off an impeachment inquiry against President Nixon on February 6, 1974, but the S&P 500 fell around 30% until his resignation. There were other forces at play, however, including Nixon's decision to suspend the gold standard and a recession following the oil shock of late 1973.
Britain's House of Commons reconvened this morning after the Supreme Court’s landmark ruling yesterday against Boris Johnson’s suspension of parliament. The prime minister is now left with little option but to agree on a new withdrawal package with the EU before an Oct. 17-18 summit in order to deliver on his signature pledge to take the U.K. out of the EU on Oct. 31. Other possibilities include a Brexit extension, an election, or a long battle toward a no-deal Brexit.
Massachusetts is going further than New York and Michigan, which earlier this month banned the sale of flavored vaping products out of concern that those products appeal to teens. The state is imposing a four-month ban on sales of all vaping products amid a national health emergency that so far has been linked to nine deaths and has sickened at least 530 people. The period will give medical experts time to determine what aspect of vaping is causing the illnesses and to determine whether new regulations could allow for safer vaping products.
Go deeper: Juul (JUUL) cuts staff as scrutiny intensifies.
The world's most popular cryptocurrency tumbled as much as 18% over the past session to $7,944.33, hitting its lowest level since mid-June. Reasons for the dip? $9,000 was seen as a "major support" level, while there was a sudden decline in the bitcoin (BTC-USD) network's "hash rate," a measure of the total computing power of bitcoin miners around the world. Investors also seemed to greet a new bitcoin derivative with a "lukewarm" reception after NYSE parent Intercontinental Exchange (NYSE:ICE) launched bitcoin futures contracts on Sunday night.
The drama at WeWork (WE) may be coming to an end. Co-founder Adam Neumann has agreed to resign as CEO and give up majority voting control as SoftBank (OTCPK:SFTBY) and other shareholders turned on him over a plunge in the company's estimated valuation. CFO Artie Minson and vice chairman Sebastian Gunningham will become co-chief executives, while Neumann will stay on the board as non-executive chairman. Although the delayed WeWork IPO is still unlikely to take place this year, it is a possibility.
Go deeper: '10 Reasons Not To Invest In The We Company' by Christoph Liu.
Building on previous healthcare efforts, a new pilot is being launched for Amazon (NASDAQ:AMZN) workers in the Seattle area, offering a virtual primary care clinic with an option to send nurses to employees' homes. Amazon has already partnered with JPMorgan (NYSE:JPM) and Berkshire Hathaway (BRK.A, BRK.B) - on an effort called Haven - which explores how to move the needle on healthcare expenses for their combined 1.2M employees. In addition, the company has a pharmacy division under PillPack and an R&D group sometimes referred to as Grand Challenge or 1492.
Amazon (AMZN) is also staging an event in Seattle today to introduce its fall lineup of devices and expansion of the Alexa ecosystem. The tech giant has been tight-lipped about what it plans to announce, but reports suggest that it will show off a pair of Alexa-powered wireless earphones to compete with Apple's (NASDAQ:AAPL) AirPods. Amazon is also likely to unveil a new Echo device with a woofer and higher-quality speakers, as well as new products in the Fire TV lineup.
Go deeper: Ratings on Amazon.
Saudi Arabia is considering doubling the stake to be offered in Aramco's (ARMCO) much awaited IPO on the back of attacks on its oil infrastructure, WSJ reports. The Saudi Royal Court and its advisers have been debating an eventual float of as much as 10%, doubling the country’s longstanding public intention to list just 5%. At a hoped-for $2T valuation, a 10% float could yield $200B, eight times more than the $25B Alibaba (NYSE:BABA) raised in the biggest IPO in history five years ago.
What else is happening...
Ford (NYSE:F) makes plans for struggling India business.
CNN's Zucker in pole position to run WarnerMedia (NYSE:T).
AT&T (T) doesn't plan to sell DirecTV.
First global index for carbon credits.
U.S. crude supply rose 1.4M barrels last week - API.
Best Buy (NYSE:BBY) sets financial targets for 2025.
AutoZone (NYSE:AZO) -4.4% as profit missed estimates.
BlackBerry (NYSE:BB) -22.6% amid a stalling overhaul.
Nike (NYSE:NKE) +5.5% AH posting another strong quarter.
NIO (NYSE:NIO) -20.2% reporting major losses.
In Asia, Japan -0.4%. Hong Kong -1.3%. China -1%. India -1.2%.
In Europe, at midday, London -1%. Paris -1.6%. Frankfurt -1.3%.
Futures at 6:20, Dow -0.4%. S&P -0.4%. Nasdaq -0.6%. Crude -1.3% to $56.56. Gold -0.2% to $1538.10. Bitcoin -14.2% to $8351.
Ten-year Treasury Yield flat at 1.64%
Today's Economic Calendar
7:00 MBA Mortgage Applications
8:00 Fed's Evans: Economic Outlook and Monetary Policy
10:00 New Home Sales
10:00 State Street Investor Confidence Index
10:00 Fed's George “Facilitating Faster Payments in the U.S”
10:30 EIA Petroleum Inventories
11:00 Survey of Business Uncertainty
11:30 Results of $18B, 2-Year FRN Auction
1:00 PM Results of $41B, 5-Year Note Auction
7:00 PM Fed's Kaplan Speech