Wall Street Breakfast: The Vaccine Hunt


Big week ahead

US Equity Futures Cuts Almost All Losses Overnight To Be Taken Back To Starting Line After Shanghai Stocks Close up 3% (see story below). Earnings season expected to move into high gear this week with Microsoft’s second quarter results (NASDAQ: MSFT), Tesla (NASDAQ: TSLA), Intel (NASDAQ: INTC) et American Airlines (NASDAQ: AAL), while coronavirus cases continue to increase at an alarming rate. Hot spots are spreading across the south and west of the country, though New York is beginning its final Phase Four reopening. Zoos and botanical gardens can open, sports can start again (without fans), but indoor gymnasiums, museums and restaurants will remain closed.

China drops insurer ceilings

Just four days ago, Chinese stocks dived more than 4% after surprisingly bullish GDP data, although stocks are now looking to make a comeback. Shanghai Composite closed up 3.1% Overnight, Chinese regulators raised the limit on the amount that insurers can invest in equity assets to 45%, bringing in fresh money on the stock market. The BPC also kept the prime rates on its one-year and five-year loans unchanged for the third month in a row as the economy continues to recover from the coronavirus crisis.

Facebook’s # 1 advertiser cuts spending

Walt disney (NYSE: DIS) has significantly reduced its Facebook (NASDAQ: FB) advertising expenses, WSJ reports, marking the latest hardship for the tech giant as it faces a boycott of companies thwarted by its handling of hate speech and divisive content. According to research firm Pathmatics, Disney was Facebook’s top U.S. advertiser for the first six months of 2020, spending $ 210 million on Facebook ads for Disney + in the U.S. The House of Mouse has also halted the ad from Hulu on Instagram, owned by Facebook (Hulu spent $ 16 million on Instagram from April 15 to June 30).
Go further: Gary Alexander thinks concerns about Facebook ad spending are exaggerated.

The biggest auction process this year

Adevinta (OTCPK: ADEVF) the actions are stopped in Oslo on the information according to which eBay (NASDAQ: EBAY) is about to sell its classified ad unit for more than $ 8 billion, while retaining an interest in the business. This is a surprise boost to an offer from the Norwegian online market, which offered a mix of cash and stocks, and lowered the odds Prosus (OTCPK: PROSY) would win the hotly contested auction after his higher cash bid was made on the entire unit. A private equity consortium supported by Blackstone (NYSE: BX), Permira and Hellman & Friedman separately pursue the division and also propose to let eBay retain a minority stake. EBAY + 1,8% pre-marketing.

Next round of coronavirus aid

Congress begins today to debate a fifth COVID-19 aid package as several states in the south and west of the country implement new lockdown measures to stem the virus. Democrats want to continue raising unemployment payments until January, while Republicans have criticized the provision of this aid, which amounts to $ 15 billion a week, arguing that it discourages people from returning to work in paying them more to stay at home. President Trump also suggested that he would not sign a bill without payroll tax cuts, but supported a new round of stimulus payments for Americans.

Breakthrough in European negotiations

Negotiations over the EU’s € 750 billion coronavirus stimulus package appear to have progressed after three days of stalemate. The leaders of the “Frugal Four” – Austria, Denmark, the Netherlands and Sweden – say they are ready to accept 390 billion euros in subsidies, discussions continuing on other elements of the package. Failure to meet would raise serious questions about the continued viability of the bloc, say officials and experts, the summit being seen as a moment of “break or break” for nearly 70 years of European integration. There are also more regional actions today as the last round of negotiations begins to define Britain’s relations with the EU after Brexit.

‘No alternative’

Additional spending will worsen governments’ balance sheets, but “keep it from getting worse,” said Shaun Roache, chief economist for Asia-Pacific at S&P Global Ratings. “We see some budget makers thinking about withdrawing some of their measures or perhaps letting them expire without renewing them, and it’s a pretty dangerous thing to do when demand in the rest of the economy is still fairly suppressed. We hope to see some of these tax measures being renewed, postponed until next year. This will mean further fiscal easing, but there is currently no alternative. ”
Go further: S&P Global Ratings expects global GDP to decline 3.8% in 2020.


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