Monday, September 24, 2018
After reporting record highs last week for the S&P 500 Index and Dow Industrial Averages, U.S. futures are pointing to a lower open after Chinese officials fired back over the weekend against the Trump Administration, accusing it of “trade bullyism,” and pushing an “America First” agenda at a cost of international relations. The comments were published in the state news agency Xinhua on Monday, as the latest exchange of tariffs took effect—10% tariffs on $200 billion worth of Chinese goods, which was met with $60 billion in tariffs on U.S. goods by China. Beijing has reportedly called off a fresh round of talks with the U.S. planned for the days ahead, saying they would not bow to any threats. Oil prices jumped in early trading after the world’s biggest oil producers, led by Saudi Arabia and Russia, decided against an additional rise in output. Brent crude jumped to its highest in four years. In Asian markets, The Nikkei Index gained 195 points to finish at 23,869, the Shanghai Index jumped 68 points (2.5%) to settle at 2,797 and the Hang Seng Index declined -454 points (1.62%) to settle at 27,499. In Europe, the German DAX is down about -40 points, under 12,400, while the FTSE 100 is down a few points at 7,475. The highlight of the week is the FOMC meeting mid-week where a 25 bps rate hike is expected.
Market Closing Prices Yesterday
· The S&P 500 Index slipped -1.08 points, or 0.04%, to 2,926.67
· The Dow Jones Industrial Average rose 86.52 points, or 0.32%, to 26,743.50
· The Nasdaq Composite dropped -41.28 points, or 0.51%, to 7,986.96
· The Russell 2000 Index declined -7.87 points, or 0.46% to 1,712.32
· 8:30 AM EST Chicago Fed Nat Activity Index for Aug…est. 0.2
· 10:30 AM EST Dallas Fed Manufacturing Activity for Sept…est. 31.0
· Earnings Before the Open: AMAL
· Earnings After the Close: ASNA
· U.S. and Canadian negotiators trying to work out a deal on NAFTA are “very likely” to hold informal talks on the sidelines of the U.N. General Assembly meeting in the next few days, Canadian Prime Minister Justin Trudeau said on Sunday – Reuters
· California professor Christine Blasey Ford has agreed to testify before a Senate panel on Thursday morning about her sexual assault allegations against Supreme Court nominee Brett Kavanaugh, her lawyers said.
· More than five years since his last win, Tiger Woods tasted victory on the PGA Tour again, winning the Tour Championship on Sunday with a 1-over 71 to finish 11-under, two strokes ahead of Billy Horsche
Sector News Breakdown
· Casino Group, said its board had rejected entreaties from Carrefour SA about a possible combination that would merge two of France’s best-known retail giants. But Carrefour denied having solicited Casino, accusing the rival of “untimely, misleading and groundless communications.” https://on.mktw.net/2Q3vtzV
· Thomas Cook (TCG.LN) shares fell overnight after the group warned full-year profits would fall 15% from last year as unseasonably hot weather in northern Europe hit late bookings
· Michael Kors Holding Ltd. (KORS) is nearing an agreement to buy Gianni Versace SpA after the iconic Italian fashion house drew interest from several suitors, people familiar with the plans said. – Bloomberg https://bloom.bg/2xGZPk2
· Sprouts (SFM) downgraded to Market Perform from Outperform at Wells Fargo
· U.S. shale oil production will peak by the late 2020s, OPEC said Sunday. In its latest forecast, OPEC said it expects U.S. shale growth to “slow significantly” after 2023, before peaking at 14.3 million barrels a day between 2027 and 2028. Output should then fall to an average of 12.1 million barrels a day by 2040, according to OPEC.
· Total SA (TOT) said that it made a major gas discovery the Glendronach prospect, located offshore U.K., west of Shetland.
· Tullow Oil PLC said that it has plugged and abandoned its Cormorant-1 exploration well in offshore Namibia after finding “non-commercial” hydrocarbons. Tullow said its net expenditure on the well is estimated at around $5 million
· Warren Buffett’s Berkshire Hathaway (BRK/A) is somewhat undervalued said Barron’s noting it has been a big winner from the lower corporate tax rate and many of its units are performing strongly, including auto insurer Geico and some of its holdings such as Apple (AAPL) and American Express (AXP)
· Amalgamated Bank (AMAL) reports Q2 core EPS 40c; Q2 net Interest Margin was 3.56%, as compared to 3.43% for the first quarter of 2018 and 3.12% for the second quarter of 2017. Tier 1 Leverage, Common Equity Tier 1, and Total Risk-Based capital ratios were 8.59%, 12.46%, and 13.71%, respectively
· Amarin (AMRN) shares soar more than 250% after its Vascepa, when taken as an add-on to cholesterol-lowering statin therapy, reduced the number of major cardiovascular events such as heart attack or stroke in about 25% of patients in the study. The topline results from the Vascepa cardiovascular outcomes trial, REDUCE-IT, a global study of 8,179 statin-treated adults with elevated CV risk, meeting its primary endpoint
· Epizyme (EPZM) says FDA has lifted partial clinical hold that paused U.S.-based enrollment of new patients in its tazemetostat clinical trials.
· Abbott Laboratories’ (ABT) according to results unveiled at the Transcatheter Cardiovascular Therapeutics meeting in San Diego, said MitraClip cut the length of hospital stays and led to longer lives for heart-failure patients who were suffering from reverse blood flow through their mitral valves
· AstraZeneca (AZN) CEO told the Sunday times that the UK could see widespread medicine shortages if there is no deal to prevent friction at the border with the EU after Brexit
· Medical technology stocks have reached their highest valuations in decades according to Barron’s, but unlike some sectors, shares might stay aloft. Hot performers among medical-device stocks this year include Boston Scientific (BSX) and Intuitive Surgical (ISRG), each up 50%, adding that med tech trades at a premium given its double-digit sales growth and scarcity
· Marijuana stock Tilray (TLRY) looks overvalued according to Barron’s saying the U.S. listed company was valued as high as $30 billion on Wednesday before closing the week at $11.5 billion. Even that looks expensive: the company has the highest cost-of-goods among large producers and its production and inventory both declined in the latest quarter
Industrials & Materials
· Randgold Resources Ltd. (GOLD) and Barrick Gold Corp. (ABX) have agreed to an all-share merger that will create an $18.3 billion gold-mining giant. Under the terms of the deal, each Randgold shareholder will receive 6.1280 new Barrick shares for each Randgold share held and Barrick holders will own around 66.6% of the combined business https://on.mktw.net/2xH0rpQ
· Generac (GNRC) announces new $250M share repurchase program
· Newmont Mining (NEM) files automatic mixed securities shelf
Technology, Media & Telecom
· Comcast Corp. (CMCSA) topped 21st Century Fox Inc. (FOXA) in a weekend auction for Sky PLC, winning the British broadcaster with a $38.8 billion bid that ends a month’s long takeover battle. Comcast’s offer of £17.28 a share, or about $22.59 a share, surpassed Fox’s highest bid of £15.67 after three rounds of bidding Saturday, in a rare auction held by British regulators.
· WPP PLC’s (WPP) new CEO Mark Read is preparing to consolidate some of the advertising giant’s major properties, as traditional agencies struggle to keep pace with the industry’s digital shift. Marquee ad agencies that buoyed WPP in earlier decades—including Young & Rubicam, Ogilvy, J. Walter Thompson and Grey—are generally growing more slowly than WPP’s digital and media buying operations, according to the company.
· Dell Technologies Inc. (DVMT) is exploring the possibility of launching a traditional IPO instead of going public through a proposed acquisition that has met resistance from several investors. The two plans to interview several banks for underwriting roles in an IPO this week, according to people familiar with the matter. As a result, it has postponed by about a week a roadshow to sell the takeover deal that was to begin this week, the people said.