Wednesday Morning Reads
- New Economic Growth Engine
- ‘World Has Gone Mad’
- U.S. Recession Chances
- Investors Left Exposed
- Housing Market Nightmare
- Wealth Tax
- Stop Reselling Its Doughnuts
- Realistic Investment Results
- The Hierarchy of Stock Market Losses
- “Should We Be Selling Short?”
- Gen-X Has Less Than 10%
- Futures pause after three-day rally
- CVS Health EPS beats by $0.07, beats on revenue
- Brookfield Property Partners beats on revenue
- Facebook reveals another privacy breach
- Tesla going all out in China
- Xerox considers takeover of $27B HP
- Ionis Pharmaceuticals EPS beats by $0.60, beats on revenue
- Barrick Gold EPS beats by $0.03, misses on revenue
- Brookfield Property REIT declares $0.33 dividend
- Walgreens brings in powerhouse PE firms for talks
- Margins improve at Office Depot
- Barrick Gold declares $0.05 dividend
Open Interest Changes for Today:
SoftBank's first quarterly loss in 14 years is putting a spotlight on founder Masayoshi Son's high-risk approach of investing in cash-burning startups, as he attempts to raise a second giant investment fund. Recording an operating loss of ¥704B ($6.46B) in the third quarter, SoftBank marked down the total value of WeWork's (WE) equity to $7.8B, a major write-off given the office-sharing company was valued at $47B before its attempt to go public backfired. While SoftBank (OTCPK:SFTBY) hasn't calculated the effect of WeWork's $9.5B rescue package on its earnings, the Japanese group said it suffered an $8.9B hit at its Vision Fund.
Go deeper: Christoph Liu debates whether SoftBank should keep The We Company alive.
Due to concerns over rising rents, Jersey City residents voted overwhelmingly in favor of stricter regulations on short-term rentals, rebuking Airbnb (AIRB), which spent at least $4.2M on an effort to sway voters. Officials at Airbnb fear the new proposed regulations would mean an outright ban on listings in New Jersey and that it could mean an end to the company altogether as it prepares to go public. In related news, Peloton (NASDAQ:PTON) shares fell 7.6% on Tuesday amid profit concerns at the latest loss-making company to go public.
Go deeper: Hendrick Fulton is waiting for sub-$20 PTON shares before investing.
In a deal that would unite some old-line tech names, Xerox (NYSE:XRX) is considering a bold takeover of HP (NYSE:HPQ), WSJ reports. A cash-and-stock offer would follow closely on news that Xerox was selling its stake in a 57-year-old joint venture with Fujifilm (OTCPK:FUJIY) and an announcement from CEO John Visentin that the company would get aggressive. At a market cap of about $27B, HP is more than three times Xerox's size, but the latter reportedly has an informal funding commitment from a major bank. HPQ +9.8% premarket.
Go deeper: Mark Ashton discusses HP's recent transformation.
Wall Street almost netted another hat trick on Tuesday, with the Dow and Nasdaq scoring new records, though the S&P 500 fell back slightly. Futures are now holding steady, consolidating gains made over the last three sessions due to lingering concerns over the outcome of U.S.-China trade talks. Traders are also preparing for the latest round of earnings, including CVS (NYSE:CVS) and Qualcomm (NASDAQ:QCOM), as FactSet data indicates that 75% of S&P 500 companies which reported thus far have topped analyst expectations.
Economists are hailing today's rise in German factory orders, and while the 1.3% monthly increase was "solid," Oliver Rakau of Oxford Economics said it may not prevent the economy falling into recession (we'll get those figures on Nov. 14). Orders from other countries in the 28-nation eurozone dropped 1.8% and manufacturing in the region on a whole is the weakest it’s been for seven years. Given two consecutive monthly declines in September and October, the latest results from Germany are helping the euro this morning, up slightly to $1.1082.
Walgreens Boots Alliance (NASDAQ:WBA) is up another 1.6% premarket, after rising 2.6% on Tuesday, as reports suggested the U.S. drug store chain is exploring private equity interest. If a deal was struck, it would likely be one of the largest leveraged buyouts in history based off Walgreens' $50B+ market cap. Several private equity firms would likely be involved, though many have long lost their appetite for teaming together on so-called club deals since the financial crisis.
Go deeper: WBA's dividend yield exceeds the 10-Year U.S. Treasury yield, writes Pat Stout.
Although the Mouse House has promised not to show ads on Disney+, the streaming service will carry a one-time promo for cable channel Starz (NYSE:LGF.A). It will help the company get rights to show films like Star Wars: The Force Awakens, which had been licensed out to Starz before announcing the Disney+ plans in 2017. Launching next week, Disney+ will cost $6.99 per month, with the option of bundling the service, ESPN+ and ad-supported Hulu for $12.99/month.
Go deeper: Listen to Daniel Shvartsman's podcast on the 'Streaming Video Tide.'
Gearing up for the open of its $2B Shanghai plant, its first overseas factory, Tesla (NASDAQ:TSLA) is moving away from the approach CEO Elon Musk announced in March, when he said the EV maker would cut costs and shut many of its retail stores worldwide. According to documents seen by Reuters, the company plans to double its service centers to 63 from 29, boost fast charging stations by 39% to 362 and convert some of its showrooms into "Tesla Centers." It appears to be a different strategy for Tesla, with its China unit also offering racing events and parties despite Musk's open disdain for marketing.
Uber's (NYSE:UBER) self-driving test vehicle that struck and killed an Arizona woman in 2018 had software flaws, according to the National Transportation Safety Board, and lacked programming to either recognize or respond to the presence of jaywalkers on the road. In fact, Uber's autonomous test vehicles had been involved in 37 crashes in the 18 months before the fatal March 2018 incident. Following the crash, Arizona suspended Uber's ability to test self-driving cars on the state's public roads, though the company later resumed tests in Pennsylvania.
What else is happening...
Oil falls on buildup in U.S. crude stocks.
AT&T pays $60M in FTC 'unlimited' claim case.
Allergan (NYSE:AGN) -0.2% posting flat adjusted EPS.
Chesapeake Energy (NYSE:CHK) -18% drowning in debt.
Emerson Electric (NYSE:EMR) +0.8% bowing to activist D.E. Shaw.
LendingClub (NYSE:LC) +3.1% AH as loan originations rose 16%.
Peloton (PTON) -7.6% on profit concerns.
Match Group (NASDAQ:MTCH) -15.4% posting disappointing guidance.
Newmont Goldcorp (NYSE:NEM) -3.5% on higher costs, output guidance cut.
Regeneron (NASDAQ:REGN) +6.9% topping expectations.
WW International (NASDAQ:WW) -13.9% amid weaker subscriber count.
In Asia, Japan +0.2%. Hong Kong flat. China -0.4%. India +0.6%.
In Europe, at midday, London -0.2%. Paris +0.1%. Frankfurt flat.
Futures at 6:20, Dow flat. S&P flat. Nasdaq flat. Crude -0.6% to $56.89. Gold +0.4% to $1489.30. Bitcoin +1% to $9373.
Ten-year Treasury Yield -2 bps to 1.84%
Today's Economic Calendar
7:00 MBA Mortgage Applications
8:00 Fed's Evans Speech
8:30 Productivity and Costs
9:30 Fed's Williams Speech
10:30 EIA Petroleum Inventories
1:00 PM Results of $27B, 10-Year Note Auction
3:15 PM Fed's Harker Speech
6:30 PM Fed's Williams Speech