Wall Street Breakfast: More Record Highs For Equities?

Includes: AAPL, AKZOY, AVGO, AZSEY, BA, BABA, BAC, BAMXF, BIDU, 

Despite some of the slowest trading of the year over the past few sessions, U.S. stock indexes continue to notch record highs, with the summer sun heating up markets. Futures now look poised to continue their bullish run amid a quiet day of economic releases, while investors turn their attention to another slew of corporate earnings. Banking heavyweight Morgan Stanley (NYSE:MS) is among the companies slated to post results before the open.

Economy

The risk of deflation has been removed from the eurozone, according to ECB Governing Council member Francois Villeroy de Galhau. "We have made progress, but we have not yet reached the [two percent] target and so there is still a need for our accommodative monetary policy," he declared. "We are adapting its intensity depending on the economic situation."

Top Chinese and U.S. business leaders are urging their governments to quickly solve bilateral trade issues. The appeal came during the U.S.-China business leaders summit, co-hosted by Alibaba's (NYSE:BABA) Jack Ma and Blackstone's (NYSE:BX) Stephen Schwarzman. U.S. Commerce Secretary Wilbur Ross responded by saying that the private sector is well placed to resolve "serious trade imbalances."

The Trump administration is considering a ban on oil imports from Venezuela, sources told Bloomberg, as part of a spate of sanctions to punish President Maduro. Potential disruptions? Venezuela is the third-biggest supplier of oil imports to the U.S., and Gulf refiners like Valero (NYSE:VLO), Chevron (NYSE:CVX) and Phillips 66 (NYSE:PSX) have spent millions tailoring their plants to use its unique brand of heavy, tar-like crude.

Stocks

Toshiba has resumed blocking access by Western Digital (NYSE:WDC) to data at their memory chip joint venture, amid a feud over the Japanese company's planned auction of the business. Toshiba (OTCPK:TOSYY) previously allowed partial access after a U.S. court ordered a temporary restraining order, but it won an appeal in California on Tuesday.

Apple just announced a new major executive post: Engineering leader Isabel Ge Mahe will be taking on a role as managing director of Greater China, reporting to CEO Tim Cook and COO Jeff Williams. Apple's (NASDAQ:AAPL) China business has boomed over the past half decade, peaking at $61B in 2015, but it has recently stumbled, declining to $46B in 2016 and shrinking for the past five quarters.

Qualcomm is facing a fresh set of antitrust allegations from a group of four companies that assemble the iPhone and other products on behalf of Apple. The accusations, made in a filing late Tuesday, are counterclaims to a Qualcomm (NASDAQ:QCOM) lawsuit filed in May seeking to force the contractors to pay license fees that Apple directed them to stop paying.

"People say ICOs [initial coin offerings] are great for ethereum because, look at the price, but it's a ticking time-bomb," former Ethereum CEO Charles Hoskinson told Bloomberg in interview. "There's an over-tokenization of things as companies are issuing tokens when the same tasks can be achieved with existing blockchains," he said. "People are blinded by fast and easy money." Related: COIN, OTCPK:BTCS, OTCPK:BTSC, OTCPK:GAHC

Google Glass is back from the dead, but this time it's targeting corporate customers. Dubbed Glass Enterprise Edition (GOOG, GOOGL), the product has been in testing at about 50 companies, including Boeing (NYSE:BA), General Electric (NYSE:GE) and Volkswagen (OTCPK:VLKAY). The device allows workers to see instructional content and permits them to broadcast what they are viewing to others.

Baidu first revealed its open source self-driving tech platform back in April, but Microsoft (NASDAQ:MSFT) just threw its weight behind the initiative, providing cloud services to companies using "Apollo" outside China. More than 50 groups have signed on to build and improve Baidu's (NASDAQ:BIDU) project, including top Chinese carmakers Chery Auto, Great Wall Motors (OTCPK:GWLLY) and Changan Automobile.

More autonomous news? General Motors (NYSE:GM) and Softbank (OTCPK:SFTBY) are among the latest investors in Nauto, a Silicon Valley startup developing self-driving software. "Our aim is to provide the data, intelligence and a cloud platform" to automakers that plan to begin putting self-driving cars on the road from 2020," said CEO Stefan Heck. Previous investors included BMW (OTCPK:BAMXF) and Toyota (NYSE:TM), as well as Allianz (OTCQX:AZSEY).

Daimler is seeking to head off a growing crisis over potential emissions cheating by voluntarily recalling more than 3M Mercedes-Benz diesel vehicles in Europe. The plan, which involves a software patch and avoids complex component fixes, will cost the automaker about €220M. If accepted by officials, it could help Daimler (OTCPK:DDAIF) avoid the massive penalties that beset Volkswagen (OTCPK:VLKAY).

BP is considering spinning off some of its U.S. pipelines into a publicly traded MLP. Tentatively called BP Midstream Partners, it would house its Gulf Coast and Midwest pipeline assets that transport its crude oil, natural gas and refined products. Out of the global oil giants, only Royal Dutch Shell (RDS.A, RDS.B) has an MLP, launching Shell Midstream Partners in 2014.

Akzo Nobel CEO Ton Buechner is stepping down due to health reasons, and will be replaced by the company's current chemicals division chief, Thierry Vanlancker. It's the second time he resigned on his doctor's advice, having announced his departure in September 2012, before resuming work a few months later. Earlier this year, Buechner repelled an Akzo (OTCQX:AKZOY) takeover attempt from U.S. rival PPG.

Time for another made-up food holiday. Today is National Hot Dog Day, which means restaurants across the country have free or discounted dogs. It comes in the middle of barbecue season. The National Hot Dog and Sausage Council estimates Americans will eat 7B hot dogs between Memorial Day weekend and Labor Day. Related tickers: TSN, KHC, NATH, CAG, OTCPK:NSRGY

Pass the mustard. McCormick (NYSE:MKC) is set to buy Reckitt Benckiser's (OTCPK:RBGLY) food business for $4.2B, adding French's to the company spice rack by beating out several competitors. The American seasonings maker hopes the move will help it achieve "meaningful accretion" to margins and adjusted earnings per share, while Reckitt said it will use the funds to pay down debt.

NBC News is launching a twice-per-day news show called Stay Tuned on Snapchat (NYSE:SNAP) as part of its push to attract younger viewers who tend to watch TV on mobile devices. "This is a concerted effort that is crucial to our future," said Nick Ascheim, head of digital at NBC News. NBCUniversal (NASDAQ:CMCSA) invested $500M in Snap during its initial public offering.

Deal time! Discovery Communications (NASDAQ:DISCA) and Scripps Networks Interactive (NYSE:SNI) are in merger talks, revisiting a deal that was scrapped three years ago. Stocks of both companies shot up in AH trading on the news. Separately, Broadcom's (NASDAQ:AVGO) $5.9B deal to merge with Brocade Communications (NASDAQ:BRCD) has been delayed to allow more time for a governmental review of the transaction.

AT&T is in talks about acquiring the balance of Otter Media, their 3-year-old joint venture, sources told the NY Post. The move is part of a wider effort by AT&T (NYSE:T) to clean up a host of joint ventures ahead of its expected acquisition of Time Warner (NYSE:TWX). Those JVs include stakes in the MLB Network, the NHL Network and the Game Show Network.

Tuesday's Key Earnings

BofA (NYSE:BAC) -0.5% posting a drop in net interest income.
CSX (NYSE:CSX) -1.9% AH following disappointing guidance.
Goldman Sachs (NYSE:GS) -2.6% stung by its trading division.
IBM (NYSE:IBM) -2.7% AH with revenue down for another quarter.
Johnson & Johnson (NYSE:JNJ) +1.8% raising its profit forecast.
Lockheed Martin (NYSE:LMT) -0.6% on strong F-35 sales.
United Continental (NYSE:UAL) -3.6% AH issuing flat guidance.
UnitedHealth (NYSE:UNH) +0.3% beating earnings estimates.

Today's Markets 

In Asia, Japan +0.1%. Hong Kong +1.4%. China +1.4%. India +0.8%.
In Europe, at midday, London +0.1%. Paris +0.1%. Frankfurt flat.
Futures at 6:20, Dow +0.1%. S&P +0.1%. Nasdaq +0.2%. Crude +0.4% to $46.79. Gold -0.2% to $1239.20.
Ten-year Treasury Yield +1 bps to 2.27%

Today's Economic Calendar

7:00 MBA Mortgage Applications
8:30 Housing Starts
10:30 EIA Petroleum Inventories

Companies reporting earnings today »

Source: https://goo.gl/5NzhC8

Wall Street Breakfast: Next Round Of Brexit Talks

Includes: DIS, ESYJY, HRL, ITVPY, PG, QQQ, RBGLY, SKYAY, SPY, TI, TW

The U.K. and EU renew divorce talks in Brussels today with the clock ticking down to a historic exit in March 2019. It's the second such meeting - the first round in June saw Britain concede to the EU's demand to first focus on discussing citizens' rights, the Irish border and a financial settlement. Only when "sufficient progress" has been made on those matters will the EU allow discussions to turn to trade.

Economy

The U.S. Senate will delay this week's consideration of healthcare legislation while Arizona Republican Senator John McCain recuperates from surgery, Mitch McConnell said on Saturday. With the GOP holding a 52-48 majority, they can afford to lose only two Republicans. Rand Paul of Kentucky and Susan Collins of Maine have already said they'll vote against the measure.

China's economy maintained its momentum last quarter, matching the 6.9% growth rate in Q1. Consumer spending, factory output and investment were all strong, while retail sales recorded their fastest expansion since December 2015. Local markets stayed in the red, however, weighed down as a major once-in-five-years government work meeting indicated Beijing was looking to increase control over the economy.

"The Washington Post story that we actually hacked [a Qatari government news site in May] is not true," said Anwar Gargash, UAE Minister of State for Foreign Affairs. The report said the country planted a false story that was used as a pretext for the current Gulf crisis. Gargash also said the UAE would not escalate its boycott by asking firms to choose between doing business with it or with Qatar.

Nearly 7.2M Venezuelans went to the ballot box in an unofficial plebiscite on Sunday as President Maduro seeks to create a legislative superbody that his adversaries call the consolidation of a dictatorship. 98% of voters are said to have opposed the new assembly, as well as urging the military to defend the existing constitution and supporting elections before Maduro's term ends in 2019.

Stocks

It would be the biggest company ever to face a proxy fight. Nelson Peltz's Trian Fund Management plans to battle for a board seat at Procter & Gamble (NYSE:PG) in an effort to jolt the products giant whose sales and profit growth have stalled, WSJ reports. P&G shares have underperformed the S&P 500 and the consumer-staples group for the past 10 years.

More consumer wars? Unilever (UL, UN) is locked in a £2B battle with Hormel Foods (NYSE:HRL) to buy Reckitt Benckiser's (OTCPK:RBGLY) food business, according to the Sunday Times. Reckitt is rushing to offload the unwanted division after receiving a series of knockout bids in recent weeks. Binding offers for the unit are expected in the next few weeks.

Wells Fargo is preparing to jettison a "handful" of businesses, which are not "top-tier providers," as it looks to restore investor confidence in the wake of its sham accounts scandal. "We get a little bit smaller, a little bit less complex and we can focus on what we're good at," Wells Fargo (NYSE:WFC) CFO John Shrewsberry told FT. "We could be more focused."

Cryptocurrencies took a beating over the weekend. Bitcoin traded as low as $1,836, down about 8% on the day, and almost 40% from its high of $3,018 on June 11, while ether plunged almost 20% to $155, knocking off about 60% from its high of $395 on June 13. The selloffs are yet another stark reminder that digital assets remain highly speculative trading vehicles.

Jumping further into the financial cybersecurity market, Big Blue has launched a new mainframe system capable of running more than 12B encrypted transactions per day. "We think this will be broadly adopted across financial services, government, retail and travel and transportation," announced Ross Mauri, general manager of IBM Z.

San Marino is set to become the first country in the world to be upgraded to a nationwide 5G network after Telecom Italia (NYSE:TI) said it would use the enclave as a test bed for the new technology. It will double the number of mobile sites and install a network of small cells in the capital this year that will provide the backbone for the future network.

Disney is building an immersive Star Wars hotel as part of a flurry of investments announced Saturday by the company. Theme parks are Disney's (NYSE:DIS) second-largest division after TV. It's been investing heavily in the business on the premise that park attractions can't easily be "replicated" or made obsolete by new technology.

Winnie the Pooh has been blacked out from Chinese social media in the lead-up to the country's 19th Communist Party Congress this fall, according to the FT. No official explanation was given, but observers said the crackdown may be related to past comparisons of the physical appearance of President Xi to the Disney-owned (DIS) fictional bear.

Twitter is in talks to screen the US PGA Championship after Sky (OTCQX:SKYAY) lost its exclusive broadcast for the event, FT reports. The group has been looking to grow its user base through live sports. Earlier this year, Twitter (NYSE:TWTR) won rights to stream 31 smaller PGA tour golf tournaments around the world.

Airplanes to airwaves. Dame Carolyn McCall has been named CEO of broadcaster ITV (OTCPK:ITVPY), leaving EasyJet (OTCQX:ESYJY) to find a new pilot. The change in leadership comes at a difficult time for the budget airline, which is in the midst of repositioning its business in the wake of the Brexit vote.

Uber is suspending operations in Macau from July 22 as it could "not secure a business environment" to "unlock the full benefits of ride-sharing." Global retreat? UBER recently announced it would cede control in Russia to search giant Yandex following last year's pullout in neighboring China.

Weekend Reads

PRO Weekly Digest: Tricks Of The Research Trade With J Capital Research Limited

Marketplace Roundtable: Getting A Grip On Geopolitics

Today's Markets 

In Asia, Japan +0.1%. Hong Kong +0.3%. China -1.4%. India +0.2%. 
In Europe, at midday, London +0.3%. Paris -0.2%. Frankfurt -0.5%. 
Futures at 6:20, Dow flat. S&P flat. Nasdaq flat. Crude +0.1% to $46.56. Gold +0.1% to $1229. 
Ten-year Treasury Yield flat at 2.31%

Today's Economic Calendar

8:30 Empire State Mfg Survey

Companies reporting earnings today »

Source: https://goo.gl/Watcr9

Wall Street Breakfast: Tesla Model 3 Out In The Wild

Includes: AAPL, AMZN, APA, AVGO, BWA, CERN, CICOF, CNK, DIS, FNSR,

Tesla is in focus after the very first Model 3 rolled off the company's assembly line and into the hands of CEO Elon Musk. By December, Tesla (NASDAQ:TSLA) aims to release 20K Model 3 cars a month. While there's plenty of debate over the company's pace of production and road track to profitability, it's hard to argue that Tesla hasn't had a major influence on the EV scene as companies such as BMW (OTCPK:BMWYY), Volvo (OTCPK:GELYY), Ford (NYSE:F), Toyota (NYSE:TM), Nissan (OTCPK:NSANY), General Motors (NYSE:GM), Uber (Private:UBER), Lyft (Private:LYFT), Avis Budget (NASDAQ:CAR) and Hertz Global (NYSE:HTZ) plot industry-disrupting electric and autonomous strategies. Tesla is up 1.78% to $318.80 in pre - market trading after falling off 18% last week.

Economy

World markets: The Shanghai Composite in China closed the day 0.2% lower, while the Nikkei in Japan was up 0.8%. European stocks are edging higher, with the Stoxx 600 up 0.4% as bank stocks lead the way. The dollar rose almost 0.4% to ¥114.30 to mark a two-month high before falling back to ¥114.20. Crude oil prices are slightly lower to extend on the 3% drop in the last session. WTI crude oil futures -0.81% to $43.87/bbl at last check. Brent crude -0.75% to $46.36/bbl. U.S. stock futures are pointing to gains at the open.

The pace of inflation in China held at 1.5% in June to easily stay under the 3% target set by Beijing. Food prices declined 1.2% compared with the same period a year ago, while non-food prices were down 2.2% in the month. Producer prices jumped 5.5% to match the forecast from economists.

The Senate Republicans are still short the 51 votes they need to pass the GOP health care proposal. Senator John McCain said he thinks Republicans should work with Democrats to craft health care legislation, while Senator Ted Cruz called for a measure to simply repeal Obamacare and debate a replacement. "No action is not an alternative," commanded Senate Majority Leader Mitch McConnell.

President Donald Trump made some waves over his suggestion of a potential cybersecurity partnership with Russia. Key lawmakers such as Senator Marco Rubio and Senator Lindsay Graham criticized the idea of working with the nation accused by U.S. intelligence agencies of hacking efforts. Reaction was divided within the Trump team. U.N. Ambassador Nikki Haley was quoted Sunday as saying "we won't ever trust Russia," while Treasury Secretary Steven Mnuchin applauded a potential U.S. plan to "fight cyber" with Russia.

G20 wrap: "We will continue to fight protectionism including all unfair trade practices," G20 leaders declared in a joint communique on Saturday following a meeting in Hamburg, Germany. However, the group stepped back from an unequivocal commitment to free trade for the first time since its inaugural summit in 2008. Instead, it said it would "strive to ensure a level playing field," noting "the importance of reciprocal and mutually advantageous trade and investment frameworks."

Fed watch: San Francisco Federal Reserve Bank President John Williams is due to give a speech today in Sydney titled "Speed Limits and Stall Speeds: Fostering Sustainable Growth in the United States." Williams, considered a down-the-middle Fed centrist, called for three or four rate hikes in a speech in early June before the last FOMC meeting.

Stocks

Shipping M&A: Cosco Shipping Holdings (OTCPK:CICOF) acquired a majority stake in Orient Overseas (OTCPK:OROVY) for $6.3B to continue the wave of consolidation in the shipping industry. A filing with the Hong Kong Stock Exchange indicates that Cosco paid HKD$10.07 per share to mark a 38% premium over Orient's closing price on Friday. Japanese shipping stocks made gains today in Tokyo, led by a 5% jump for Mitsui O.S.K. (OTCPK:MSLOY, OTC:MSLOF).

Susquehanna's Pablo Zuanic set the odds at more than 75% that Kraft Heinz (NASDAQ:KHC) makes a hostile bid for Unilever (UN, UL). The analyst says it's "telling" that Kraft hasn't pulled any M&A triggers since being rebuffed by Unilever and notes the company is still a good fit. Influential Kraft investor Warren Buffett is expected to come around on Kraft paying out as much as $200B in the consumer packaged goods mega-merger scenario. Shares of Unilever are up 1.66% in premarket action.

At the movies: Spider-Man: Homecoming took in $140M at the international box office and $117M in the U.S. to mark the second best opening weekend in the history of the Spider-Man franchise. The solid showing for the Sony (NYSE:SNE) feature is the third best opening of the year after Guardians of the Galaxy Vol. 2 and Wonder Woman. Universal's Despicable Me 3 hauled in $34M in the U.S. for the weekend and Sony/Tristar film Baby Driver took in $12.75M. The U.S. box office is down 0.2% YTD at a gross of $6.043B through July 9.

Apple's market share for renting and selling movies is down to between 20% and 35% after Apple (NASDAQ:AAPL) held 50% about five years ago. Market share gains were recorded by Comcast (NASDAQ:CMCSA) and Amazon (NASDAQ:AMZN) through its Prime service over the same time period. Across the industry, video on demand movie rental revenue in the U.S. fell 4% to $1.8B in 2016, while digital movie purchase sales slowed to a 21% growth rate.

Cerner Corporation (NASDAQ:CERN) announced that CEO Neal Patterson passed away on July 9 due to unexpected complications that arose after a recent recurrence of a previously disclosed cancer. Cerner co-founder and vice chairman of the Board Cliff Illig has been named chairman and interim CEO.

G. Willi-Food International (NASDAQ:WILC) announced the appointment of Tim Cranko as its new CEO. Cranko was hired from Galam Ltd., where he served as a food division manager. The board ended Iram Graiver's term in office as president of the company last week.

Movie studios are expected to give serious consideration to premium video on demand as profit margins continue to shrink. Though Disney (NYSE:DIS) pulled in $1.8B in studio EBITDA last year, the rest of the industry only accounted for about $1B, including painful losses at Sony and Paramount (VIA, VIAB). If studios pull the PVOD switch, consumers will have the option of paying $30 to $50 for early access to certain movies. Morgan Stanley estimates Hollywood studios could bring in $2B in additional annual revenue, assuming a price point of $35 per premium rental. The firm sees a negative impact on exhibitors such Regal Entertainment (NYSE:RGC) and Cinemark (NYSE:CNK) due to an expected loss of traffic. A possible wildcard in the PVOD mix is Netflix (NASDAQ:NFLX).

A firm part-owned by Siemens (OTCPK:SIEGY) has been hired to help install electricity turbines in Crimea, a region subject to EU sanctions, sources told Reuters. While Siemens has denied the allegations, it said that if one of its customers had re-routed any turbines to Crimea, the company "will not provide any deliveries or services for installation, commissioning support, or warranty."

Department store operator Sears (NASDAQ:SHLD) will close 43 additional stores as it works to cut costs and better match changing consumer behavior with its brick-and-mortar strategy. "This is part of a strategy both to address losses from unprofitable stores and to reduce the square footage of other stores because many of them are simply too big for our current needs," Sears CEO Eddie Lampert said in a blog post.

Barron's mentions: Broadcom (NASDAQ:AVGO) and Finisar (NASDAQ:FNSR) are called out as "new Internet winners." More gains for BorgWarner (NYSE:BWA) are predicted, while Apache (NYSE:APA) is tapped for a major comeback. A Citi analyst pitches the case for a 35% run for crude oil (USO,OIL) to $60 by the end of the year.

Today's Markets 

In Asia, Japan +0.8%. Hong Kong +0.6%. China -0.2%. India +1.2%. 
In Europe, at midday, London +0.2%. Paris +0.2%. Frankfurt +0.3%. 
Futures at 6:20, Dow flat. S&P +0.1%. Nasdaq +0.3%. Crude -0.8% to $43.87. Gold -0.3% to $1206.60. 
Ten-year Treasury Yield -2 bps to 2.92%

Today's Economic Calendar

10:00 Labor market condition index
12:30 PM TD Ameritrade IMX
3:00 PM Consumer Credit

Companies reporting earnings today »

Source: https://goo.gl/Mhytzx