Wednesday Morning Reads
- EU aims to be 'climate neutral' by 2050
- Futures upbeat ahead of Powell speech
- Bitcoin regains $4,000, nears best day since July
- Would China use Treasurys as trade war weapon?
- Preliminary findings from Lion Air crash
- J. M. Smucker misses by $0.11, misses on revenue
- Royal Bank of Canada declares CAD 0.98 dividend
- CRISPR advances as second gene-altered pregnancy revealed
- Royal Bank of Canada beats by C$0.05, misses on revenue
- Tiffany beats by $0.01, misses on revenue
- Sears gets new bankruptcy lender
- White Rock reports 5.1% stake in Ziopharm
- Trump Open to Deal with Xi
- A Giant Of A Different Kind
- Japan considering auto mileage tax (CARZ, TM, HMC). NAR Report
- What You Can’t Buy
- A Little More Defense
- I Like Charts
- Mark Clouse lead candidate for Campbell Soup (CPB) CEO. NY Post Report
- Deutsche Bank (DB) considering another executive shakeup. WSJ Report
- Lion Air flight 610 had sensor issue prior to crash (BA). FT Report
- EU will soon unveil climate change roadmap (TAN, USO, XLE). FT Report
- U.S. Housing Market ‘Tough’
- The $15 Billion Money Pit
- Amazon (AMZN) plans to sell software to mine medical records. WSJ Report
- BMW (BMWYY) considering second plant in U.S. Reuters Report
- Nissan (NSANY) auditor questioned Carlos Ghosn but Nissan said they were proper. Reuters Report
- Amazon (AMZN) has paused WeWork Alexa deal. CNBC Report
- Google (GOOG) CEO will testify to Congress on December 5. Washington Post Report
Traders will be glued to their screens at noon today as Fed Chair Jerome Powell delivers what will be the most critical speech of his short time leading the central bank. He's likely to provide insights into the Fed's plans for monetary tightening and may address growing hostility from President Trump, who said in an interview on Tuesday he's "not even a little bit happy with my selection of Jay" and believes the central bank is "way off-base with what they're doing."
U.S. stock index futures rose 0.3% ahead of the speech, with the dollar nearing 2018 highs, powered by remarks from Larry Kudlow that the upcoming G20 summit was an opportunity to "turn the page" on the U.S.-Sino trade war. Other economic news today includes the Commerce Department's second estimate of third-quarter GDP growth, which is expected to be confirmed at a 3.5% annualized rate.
Trade war weapon? Asked if China would consider selling U.S. Treasuries or reducing purchases should trade tensions worsen, Cui Tiankai, China's ambassador to the U.S., said, "I don’t think anybody in Beijing is thinking seriously about this. It could backfire. We don't want to cause any financial instability in global markets." China is the largest foreign holder of U.S. Treasury debt, with $1.15T as of Sept. 30.
Russia plans to deploy more of its advanced S-400 surface-to-air missile systems to Crimea as the conflict intensifies over its seizure of three Ukrainian navy ships and their crews. "We will fight for our freedom, we will fight for our democracy, we will fight for our soil," Ukraine's President Petro Poroshenko told NBC News. "The Russians will pay a huge price if they attack us."
The European Union is aiming to become the first major economy to go "climate neutral" by 2050. "It is absolutely possible. For sure, it will require lots of investment. It will require lots of effort, but it is doable," declared EU climate commissioner Miguel Arias Cañete. This can be done with "existing technologies such as solar and wind energy," he added, as well as other "energy efficiency measures."
SEC Chairman Jay Clayton wants to see better market surveillance and custody for cryptocurrencies before being "comfortable" with a Bitcoin ETF (BTC-USD). "We've seen some thefts around digital assets that make you scratch your head," he told CoinDesk's Consensus Invest conference. "We care that the assets underlying that ETF have good custody and that they're not going to disappear."
Despite the warning from the SEC, Bitcoin (BTC-USD) soared 9% overnight to above the $4,000 level, heading for its biggest daily jump since July. Exchange operator Nasdaq (NASDAQ:NDAQ) has confirmed it's moving ahead with a plan to list Bitcoin futures in Q1 2019, betting on sustained interest despite a dramatic plunge this year. The rout has intensified over the last two weeks, wiping billions of dollars off the market capitalizations of the world's biggest cryptocurrencies.
Amazon news roundup: AWS is launching a satellite connection service, marking the company's first public move into space-related hardware. Amazon (NASDAQ:AMZN) is further expanding its footprint into health, reportedly starting to sell software that mines patient medical records. A pilot program for Alexa for Business is also said to be paused at WeWork (VWORK), though it's grown quite popular at Amazon itself.
Cyrus Capital Partners will provide Sears (OTCPK:SHLDQ) with a $350M loan to keep the bankrupt retailer's stores open through the holidays. The hedge fund won a bidding war in a courthouse hallway, replacing financing from Great American Capital that would have cost 11.5 percentage points over a benchmark lending rate. The new deal with Cyrus will cut Sears' borrowing costs by 1.5 percentage points.
With reports suggesting Trian Management is no longer showing an interest in the pizza chain, shares of Papa John's (NASDAQ:PZZA) tumbled over 10%yesterday. In other food news, Campbell Soup (NYSE:CPB) is reportedly closing in on former Pinnacle Foods chief Mark Clouse as the top candidate to be its next CEO, while Unilever (NYSE:UL) has emerged as the leading bidder in a tight contest for GlaxoSmithKline's (NYSE:GSK) Indian Horlicks nutrition business.
In a shift in strategy, YouTube (GOOG, GOOGL) has concluded that its investments in original programming should have a free, ad-supported side - not just be stuck behind a paywall. That means starting in 2020, a YouTube Premium subscription will no longer be the only way to watch most original programs, giving creators and other talent the opportunity to reach an even wider audience.
On the heels of a launch into 13 new markets in the Middle East and North Africa, Spotify (NYSE:SPOT) is looking to expand into India. The move could happen within the next six months, according to Variety, bringing its streaming service to a population of 1.3B and one of the world's fastest growing music markets. Spotify also plans on offering an extended free trial period - longer than its standard 30 days.
Citing concerns about national security, New Zealand's intelligence agency has rejected the telecom industry's first request in the country to use 5G equipment provided by Huawei Technologies. Western nations have become increasingly wary of the Chinese firm. Earlier this year, neighboring Australia banned Huawei from supplying 5G equipment, and last week, reports surfaced that the U.S. government was trying to persuade allies to avoid the company.
CRISPR Therapeutics climbed another 3% in AH trading on Tuesday after Chinese researcher He Jiankui - who altered the genes of newly born twin girls to make them HIV resistant - stood by his work and revealed a second pregnancy in the controversial project. His revelations have sparked a major debate on the ethical boundaries of gene editing and Crispr-Cas9 (NASDAQ:CRSP), which promises to eliminate human diseases, but could also be used to create designer babies.
Lion Air must improve its safety culture and better document repair work on its planes, Indonesian investigators said Wednesday, in preliminary findings into last month's crash that killed all 189 people on board. The Boeing (NYSE:BA) 737 Max was not in an airworthy condition even on its second-to-last flight, when pilots experienced similar problems with an automated anti-stall system to those on its doomed last journey.
President Trump has threatened to strip General Motors (NYSE:GM) of a tax credit that makes its electric cars more affordable due to the company's plans to halt production at several American plants. There's just one problem with the threat, according to CNBC: The automaker is already on the verge of losing the tax breaks. Credits will begin phasing out at the end of this year, when GM is expected to hit the 200K-vehicle threshold for its EV program.
BMW is considering a second U.S. manufacturing plant that could produce engines and transmissions, CEO Harald Krueger said in an interview at the Los Angeles Auto Show, shortly after a report that the U.S. would impose tariffs on imported cars from next week. BMW (OTCPK:BMWYY) already has a U.S. vehicle assembly facility in South Carolina, and opening a second location would provide a "natural currency hedge."
TransCanada has asked a Montana court to allow it to resume pre-construction activities on its Keystone XL oil pipeline after a U.S. judge blocked construction on the $8B project earlier this month. "It is too soon to say what the injunction will mean to the timeline and cost of the Keystone XL pipeline but we remain confident the project will be built," TransCanada (NYSE:TRP) spokesman Terry Cunha said in a statement.
In Asia, Japan +1%. Hong Kong +1.3%. China +1.1%. India +0.6%.
In Europe, at midday, London -0.2%. Paris +0.2%. Frankfurt +0.1%.
Futures at 6:20, Dow +0.3%. S&P +0.3%. Nasdaq +0.3%. Crude -0.1% to $51.49. Gold +0.1% to $1214.10. Bitcoin +9.2% to $4002.
Ten-year Treasury Yield flat at 3.05%
Today's Economic Calendar
7:00 MBA Mortgage Applications
8:30 GDP Q3
8:30 International trade in goods
8:30 Corporate profits
8:30 Retail Inventories (Advance)
8:30 Wholesale Inventories (Advance)
10:00 New Home Sales
10:00 Richmond Fed Mfg.
10:00 State Street Investor Confidence Index
10:30 EIA Petroleum Inventories
11:30 Results of $18B, 2-Year FRN Auction
12:00 PM Jerome Powell: "The Federal Reserve's Framework for Monitoring Financial Stability"
1:00 PM Results of $32B, 7-Year Note Auction