Wednesday Morning Reads
- Worst Ever
- Tesla Higher
- Intel (INTC) awarded $185 mln grant for expansion of its production operations in Israel. Reuters Report
- Ukrainian minister wants more Russian sanctions (RSX). FT Report
- Downturn in China auto sales have left some factories idle (CARZ). WSJ Report
- Lion Air crash could have resulted from maintenance issue (BA). WSJ Report
- Record Holiday
- Futures edge up after Christmas Eve slump
- Amazon: 'This season was our best yet'
- Bear fears propel gold to six-month peak
- JD announces $1B share repurchase program
- Iranian budget signals cut to oil exports
- Iraq's Kirkuk oil exports to stay restricted
- Barrick Gold goes ex-dividend tomorrow
- Japan's Abe: Economic fundamentals remain strong
- Asian stocks mixed overnight
- Next steps for Euronext's Oslo Bors bid
- On the hour
- FMC goes ex-dividend tomorrow
Traders returning from the holiday are sending U.S. futures higher following the Grinch's appearance on Christmas Eve that continued the market meltdown. President Trump has since praised U.S. companies, saying, "they have record kinds of numbers. So I think it's a tremendous opportunity to buy," and expressed confidence in Treasury Secretary Steven Mnuchin, who convened the "Plunge Protection Team" on Monday after speaking with executives from six major banks.
Gold climbed to a six-month high of 1,277 per ounce overnight as bear fears prompted investors to seek refuge in the metal. "We always see good demand for gold in the year-end," added Yuichi Ikemizu of ICBC Standard Bank. "I would not be surprised if we see gold surpass $1,300 in the near future." The U.S. dollar is edging higher against major currencies, while the 10-year Treasury yield hit its lowest level since April 2018.
U.S. government payments to farmers - as part of trade aid relief - will temporarily stop next week if the federal shutdown continues, according to the Department of Agriculture. The payments are part of a larger $12B emergency aid package the Trump administration announced in July to help U.S. soybean, corn and commodity producers impacted by retaliatory trade tariffs from China and others.
China will not resort to "flood-like" stimulus in monetary policy next year, otherwise, "funds will likely flow into the property sector again," according to PBOC adviser Sheng Songcheng. There remains room for further cuts in banks' reserve requirement ratios, he added, but doesn't recommend broad-based reductions in interest rates. Regarding foreign exchange, Sheng said China should defend the yuan at the key seven-per-dollar level.
Following yesterday's 5% plunge, Japan's Nikkei closed about 1% higherovernight as Prime Minister Shinzo Abe reassured investors that fundamentals remain strong and pledged to strengthen the economy through steps to boost productivity. BOJ policymakers also disagreed on the feasibility of allowing bond yields to move more flexibly around the central bank’s zero percent target, according to minutes of their October rate review.
Iranian President Hassan Rouhani has announced a 20% increase in public sector wages, presenting a $42.7B budget to parliament for next year amid growing pressure from U.S. sanctions and runaway inflation. Officials have said the budget calculations were based on a forecast crude price of $50-$54 per barrel and exports of 1M-1.5M barrels per day, down from a peak of almost 3M bpd in mid-2018.
"Amazon customers made this holiday season record-breaking with more items ordered worldwide than ever before," according to a company press release. Consumers purchased millions more Amazon Devices, and tens of millions of people worldwide started Prime free trials or began paid memberships. More than 50% of items sold in Amazon's (NASDAQ:AMZN) stores this holiday season also came from small and medium-sized businesses.
JD.com +3% premarket after authorizing a $1B share repurchase program, which it plans to fund from its existing cash balance. The news comes after authorities in Minneapolis declined to charge JD.com (NASDAQ:JD) CEO Liu Qiangdong in a sexual assault case, ending a turbulent period for the founder of the online retailer. Evidentiary problems were said to have made the charges difficult to prove beyond a reasonable doubt.
Former Nissan Representative Director Greg Kelly has been granted bail - set at ¥70M ($635,612) by the Tokyo District Court - and is now being examined at a local hospital. Kelly had been detained along with ousted Chairman Carlos Ghosn since their arrest on Nov. 19. The same court on Sunday extended Ghosn's detention for 10 days, following fresh allegations of making Nissan (OTCPK:NSANY) shoulder personal investment losses.
Marijuana has been cleared for medical use and research in Thailand, marking the first legalization of the drug in a region with some of the world's strictest drug laws. Marijuana traffickers can be subject to the death penalty in Singapore, Indonesia and Malaysia. The main controversy with legalization in Thailand involved patent requests by foreign firms that could allow them to dominate the market, making it harder for Thai patients and researchers to access marijuana medicines extracts.
Israel has approved a 700 million shekel ($185M) grant for Intel (NASDAQ:INTC) in return for a planned $5B expansion of its production operations in the country. The company is one of the biggest employers and exporters in Israel, where many of its new technologies are developed. Intel may decide to expand its Israeli operations even further in 2019, according to Israel's economy minister.
Iraq is restricting oil exports from its "Kirkuk oil fields," which were seized a year ago from Peshmerga fighters that had occupied the area in the course of their war with ISIS. A BP technical team is now operating in Kirkuk to review plans for increasing production by the end of 2019. Oil Minister Thamer Ghadhban said Iraq was also in the final stages of talks with Exxon (NYSE:XOM) and CNPC (NYSE:PTR) over a mega energy project.
Euronext is closing in on control of the Norwegian stock exchange, winning an auction organized by Oslo Bors (OTC:OSBHF) shareholders that values the operator at €625M. It has now approached the Oslo exchange board to support its offer to buy the outstanding shares in the issue, FT reports. If successful, Euronext's (OTCPK:EUXTF) bid would extend its buying spree to redraw Europe's fragmented exchange landscape.
In Asia, Japan +0.9%. Hong Kong closed. China -0.3%. India +0.5%.
In Europe, at midday, London closed. Paris closed. Frankfurt closed.
Futures at 6:20, Dow +0.6%. S&P +0.6%. Nasdaq +0.5%. Crude +1.7% to $43.23. Gold +0.4% to $1277.10. Bitcoin -0.2% to $3742.
Ten-year Treasury Yield -2 bps to 2.73%
Today's Economic Calendar
7:00 MBA Mortgage Applications
8:55 Redbook Chain Store Sales
9:00 S&P Corelogic Case-Shiller Home Price Index
10:00 Richmond Fed Mfg.
10:00 State Street Investor Confidence Index
11:30 Results of $18B, 2-Year FRN Auction
1:00 PM Results of $41B, 5-Year Note Auction