Wednesday Morning Reads
- Deeper China Embrace
- Fed to Increase Supply of Bank Reserves
- To Live or Die by Google
- A Hard Lesson
- Abrupt Change
- Legal Roadblocks
- Cloud Dominance
- What’s Your Delta?
- Would the Market Care
- Corteva declares $0.13 dividend
- NBA spat in China worsens
- Goldman sets up emergency trading floor in a WeWork space - FT
- Exxon considering sale of Malaysian offshore assets - Bloomberg
- J&J must pay $8B in Risperdal case, jury says
- Stock futures rise amid U.S.-China trade uncertainty
- PayPal expects $177M loss on strategic investments
- Gas producers slammed as supply glut drives down prices
- Libra's head of product made exit - Telegraph
- Chipotle shakes off a bear rating
- Yuan gains as China open to partial trade deal with U.S.
- GM labor talks down to core issue of wages
U.S. stock index futures rise as investors weigh the latest developments in the U.S.-China trade and foreign policy disputes. Reuters reports that China is planning visa restrictions for U.S. nationals with ties to anti-China groups. The Nasdaq is up 0.9%, the S&P gains 0.8% and the Dow increases 0.7%. The 10-year Treasury ticks up, pushing yield up 1 basis point to 1.54%. Crude oil slips 0.5% to $52.87 per barrel. Gold rises 0.3% to $1,508.40 per ounce. Asian stocks dropped the most in a week as the U.S.-China dispute over trade and foreign policy continues to escalate. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.6%. Hong Kong's Hang Seng Index closed down 0.8% and Japan's Nikkei 300 Index sank 0.3%. In Europe, the Stoxx Europe 600 Index rises 0.2%, the U.K.'s FTSE 100 Index gains 0.4%, and Germany's DAX advances 1.1%. On tap today, Fed Chair Jerome Powell is scheduled to deliver opening remarks at an event in Kansas City.
U.K. Prime Minister Boris Johnson faces a rebellion in his cabinet, as a group of ministers are poised to quit amid concerns that he’s leading the country towards a no-deal Brexit, The Times reports, citing an unnamed cabinet member. Among those on a “resignation watchlist” are British Minister for Northern Ireland Julian Smith, Culture Secretary Nicky Morgan, Justice Secretary Robert Buckland, Attorney General Geoffrey Cox, and Health Minister Matt Hancock.
Go deeper: Track the movement of THE BRITISH POUND VIA THE INVESCO CURRENCYSHARES BRITISH POUND STERLING TRUST ETF.
The Saudi Arabian Oil Co. - Aramco (ARMCO) - will reportedly put out its IPO prospectus by month's end, seemingly putting a massive offering back on track for this year. The company delayed an IPO from last year, and attacks on oil facilities looked to postpone it once again. But Aramco has since said output has stabilized, and the prospectus is expected to be followed by November book-building and a go or no-go decision shortly after that, on a listing that could value it from $1.5T-$2T.
A Philadelphia jury ruled that Johnson & Johnson (NYSE:JNJ) must pay $8B in punitive damages to a man who previously won $680,000 over his claims that the company failed to warn that men using its Risperdal anti-psychotic drug could grow breasts. The verdict is the first case in which a Pennsylvania jury was able to consider awarding punitive damages in one of thousands of Risperdal cases pending in the state. If the track record for similarly large punitive damage awards holds up, the award is likely to be reduced on grounds that it violates due process.
Goldman Sachs (NYSE:GS) is re-evaluating its role as co-sponsor of the planned IPO of China's Megvii Technology, an AI facial recognition specialist, after Megvii was added to the U.S. human rights blacklist. The United States put eight companies on the list, implicating them in repression of Muslim Uighur minorities in western China. Megvii was scheduled to debut in Q4 and raise $1B in the offering.
Struggling The We Company (WE) will shed a third of its employees in the technology division, according to a report in The Information. Some 500 of about 1,500 engineers, product managers and data scientists will be let go, with 350 cuts coming from the main corporate division while others would exit as the company cuts loose recent acquisitions like Teem and SpaceIQ, according to the report.
Oracle (NYSE:ORCL) will hire 2,000 employees for cloud computing, an effort to catch up a bit to rivals making inroads including Amazon.com (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT). Enterprise firms like Oracle and IBM (NYSE:IBM) have fallen behind more nimble competitors, but Oracle argues there's a lot of business to hunt for, saying only 20% of enterprise computing is currently in the cloud. The company will hire up and shift internal jobs toward the technology.
U.S. Steel (NYSE:X) CFO Kevin Bradley plans to resign as of Nov. 4 to be replaced by Christine Breves, as the steelmaker implements an enhanced operating model and organizational structure to accelerate its strategic transformation. The initiatives are intended to cut costs and more closely align its corporate structure with previously announced investments in advanced manufacturing. Breves joined U.S. Steel in 2013 after 14 years at Alcoa (NYSE:AA).
Go deeper: Compare U.S. Steel’s key stats with those of its peers.
What else is happening...
In Asia, Japan -0.61%. Hong Kong -0.81%. China +0.39%. India +1.66%.
In Europe, at midday, London +0.40%. Paris +0.78%. Frankfurt +1.11%.
Futures at 6:20, Dow +0.67%. S&P +0.76%. Nasdaq +0.86%. Crude +0.48% to $52.87. Gold +0.30% to $1,508.40. Bitcoin +0.11% to $8,213.
Ten-year Treasury Yield +1.4 bps to 1.553%.
Today's Economic Calendar
7:00 MBA Mortgage Applications
10:00 Job Openings and Labor Turnover Survey
10:00 Wholesale Trade
10:30 EIA Petroleum Inventories
11:00 Jerome Powell Speech
11:00 Fed's George Speech
1:00 PM Results of $24B, 10-Year Note Auction
2:00 PM FOMC minutes