Monday 10/7/19=DJIA -96 NASDAQ -21 U.S. 10yr=1.55%
A Second Whistle Blower. China Deal in Doubt?
Minnesota Oct. 15, 16, & 17-Bill Gunderson and his team will be at the Radisson Blu-Mall of America. Call (855)611-BEST or visit our website to make an appointment.
Daily Wrap: The market started out real soft today, then it gained some steam, and then it fizzled out. It was all about the impeachment efforts against Trump by the Democrats, and the upcoming trade meeting with China.
Trading: I added to a few existing positions today for new clients.
Tweets: I was very active on Twitter and StockTwits today. I sent out tweets on WDAY, NTRA, NGCRF, NAT, MDC, LPG, CSGP, COUP, CHTR, BZH, AMD, and AAPL.
Here is where we left off last week.
Just-right jobs report lifts stocks to end volatile week
• Stocks rallied in reaction to a "Goldilocks" jobs report, as the 136,000 new jobs added in September were seen as high enough to ease concerns that the U.S. is headed for a recession while also being low enough to keep hope alive that the Fed will keep cutting interest rates.
• The rally was broad based, with all 11 S&P industry groups finishing higher, led by financials (+1.9%) and information technology (+1.7%), although trading volume was a bit on the light side.
• But for the week, the S&P 500 fell 0.3% and the Dow Jones dipped 0.9%, while the Nasdaq Composite scored a 0.5% gain.
• Apple (+2.8%) carried the tech banner following a report that it had asked suppliers to increase iPhone 11 production by as much as 10%, but HP (-9.6%) was left out of the rally after announcing plans to cut its global headcount by up to 9,000 employees as part of a restructuring plan.
• U.S. Treasury prices finished little changed, with the two-year yield adding a basis point to 1.39% and the 10-year yield shedding shedding 2 bps to 1.52%.
Here was the mood of the market, as we began a new week.
Futures start week on back foot
• Broadly positive U.S. jobs data has quelled some fears about an economic slowdown, but nervousness over U.S.-China trade talks is setting in, as well as more weak economic data out of Europe.
• The mood is weighing again on U.S. stock index futures, which have started the week down 0.5%.
• While Chinese Vice Premier Liu He is expected to resume discussions with U.S. counterparts later this week, there have been a number of reports that Beijing may not be as willing to compromise on a number of issues or agree to a broad trade deal pursued by President Trump.
Global markets down on account of U.S.-China trade anxiety
• Japan -0.16%.
• Hong Kong closed.
• China closed.
• India -0.46%.
• London -0.01%.
• Paris -0.17%.
• Frankfurt -0.08%.
THE U.S. AND CHINA MEET ON THURSDAY
A concession by China?
China pulls out of $5B Iranian gas project
• China National Petroleum Corp. (NYSE:PTR) has pulled out of a $5B deal to develop part of Iran's massive offshore natural gas field, in an apparent casualty of U.S. pressure against Iran.
• Iran oil minister Zangeneh says domestic company Petropars had fully taken over the development project in the South Pars gas field after CNPC's exit.
• Iran had hoped the Chinese state-run firm would replace France's Total (NYSE:TOT), which abandoned the project last year after the U.S. reinstated sanctions on Iran.
• Much of Iran's natural gas comes from the South Pars field, which it shares with Qatar; the initial development plan involved building 20 wells and two wellhead platforms, a project that would have a capacity of 2B cf/day of natural gas.
Why not some Fiscal Stimulus. Negative interest rates are not helping.
Germany's factory slump continues
• German factory data was in focus overnight after a weak reading last month gave weight to concerns that Europe’s biggest economy was teetering toward recession.
• Orders slumped by 6.7% Y/Y in August, weighed down by the U.S.-China trade war, the slowdown in the eurozone, and economic problems at home.
• Last week, a flurry of PMI and ISM reports showed that global manufacturing is shrinking, so Germany's falling factory orders could worry the markets today.
• DAX -0.2% to 11,987
Welcome to earnings season
EARNINGS THIS WEEK
DPZ, LEVI, FAST,
JPM, GS, C, UNH, WFC, UAL, JNJ, SCHW, BAC, ABT, NFLX, CSX, PM, MS. KO, PYPL,
We are number one!
Keytruda on path to become world's no. 1 selling drug, research firm says
• Merck’s (NYSE:MRK) Keytruda cancer drug will be the world's best selling drug by 2025, with projected annual sales of $22.5B, according to a new report from the GlobalData research firm.
• Keytruda already has received 22 approvals for oncology indications by the Food and Drug Administration, and the drug is involved in more than 1,000 clinical trials; if only 10% of those trials hit, approvals for Keytruda will climb exponentially.
• While AbbVie's (NYSE:ABBV) Humira will lose its current top spot for global revenue, it will remain in the top 10 of best-sellers, with GlobalData ranking the drug in 6th place by 2025.
• Following Keytruda, Bristol-Myers Squibb (NYSE:BMY) and Pfizer's (NYSE:PFE) Eliquis is forecast as the second best selling drug, with annual sales of $18.7B by 2025.
• Celgene's (NASDAQ:CELG) - and soon to be BMY's because of their merger - Revlimid is predicted to take third place, although its worldwide sales will be affected by generic versions, which are set to hit the U.S. market in 2022.
• GlobalData sees BMY's Opdivo, a rival checkpoint inhibitor to Keytruda, coming in fourth place for global revenue, with AbbVie and Janssen’s (NYSE:JNJ) Imbruvica in fifth position.
• Rounding out the top 10: Gilead's (NASDAQ:GILD) HIV drug Biktarvy, Pfizer’s Ibrance, J&J and Mistubishi Tanabe’s Stelara, and Eli Lilly’s (NYSE:LLY) Trulicity.
I think that this will be a winner for Target and Disney.
Disney sets up shop inside Target
• The partnership between Target (NYSE:TGT) and Disney (NYSE:DIS) takes another step forward with new Disney stores now open inside 25 Target locations.
• The large store-in-a-store concept arrives just ahead of the merchandise blitz for the films Frozen 2 and Star Wars: The Rise of Skywalker from the House of Mouse.
• Disney is anticipated to debut stores in 40 more Target locations by October of next year. Disney items also have a special page on the Target website.
• Shares of Target are up 65% YTD and Disney is 19% higher.
Roku, Walmart launch soundbar and subwoofer
• Roku (NASDAQ:ROKU) is up 1.7% premarket after the company announces with Walmart (NYSE:WMT) a smart soundbar and subwoofer, to add premium sound and streaming ability to any television.
• Each of the two "Onn" branded products will be exclusive to Walmart stores and Walmart.com and retail for $129.
• The soundbar adds sound and streaming to televisions with HDMI inputs and HDMI-ARC or optical audio output. The optional subwoofer adds rich bass and pairs with the soundbar.
• The products will be available in coming weeks.
• WMT is up 0.2% premarket.
I featured Workday on the show today.
Workday bull says buy ahead of catalysts
• Mizuho Securities says investors should buy Workday (WDAY +0.4%) ahead of the analyst day on October 15, which happens within the company's four-day user conference. The firm says both events could serve as a "major catalyst."
• Management will likely address growth concerns by "highlighting the different layers of growth opportunities." The company will also introduce product innovations and expansions.
• Mizuho maintains a Buy rating and $225 target. The company has an Outperform average Sell Side rating.