>>> US After Hours Summary: Pretty quiet after hours; LZB +4.9% up on earnings;

After Hours Summary: Pretty quiet after hours; LZB +4.9% up on earnings; NCLH -5.8% falls on stock offering; PII -4.5% heads lower as its CEO will step down

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: VREX +6%, LZB +4.9%

Companies trading higher in after hours in reaction to news: KZIA +31.6% (summarizes new paxalisib data), CNHI +5.9% (names new CEO, comes over from PII), MGNI +2.4% (reports total connected TV rev growth of more than 50% for Q3), FTI +1.5% (receives Notice to Proceed for major EPC contract), LRN +0.5% (to change name to "Stride"; also to acquire MedCerts and Tech Elevator; updates FY21 outlook), REGN +0.2% (Roche successfully tested manufacture of COVID-19 drug, according to Reuters)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: PII -4.5% (reaffirms guidance, CEO to step down), NIO -2.6%

Companies trading lower in after hours in reaction to news: HMHC -6% (stock offering), NCLH -5.8% (commences 40 mln share offering), PII -4.5% (CEO to step down; reaffirms FY20 EPS and revs guidance), BYSI -0.1% (stock offering), NVRO -0.1% (abstracts for PDN and NSRBP accepted for presentation), CIM -0.1% (CEO to retire)

>>> Asian Market Update

Asia Market Update: Another mixed session for Asia, few notable macro headlines seen


General Trend:
- Australian equities supported by the rise in Financials; Consumer stocks rise as South Australia announced lockdown measures
- NAB temporarily closed all of its branches in Australia, cited ‘physical security threat’
- Financials trade generally higher in Shanghai, gov’t bond yields rise; Consumer firms lag
- Property and Financial firms rise in HK; Geely extends gains after hitting 52-week high, announced collaboration with Daimler; China auto dealer group commented on possible industry support
- Japanese equities decline amid the overnight rise in the Yen; Transports and Financials are among the decliners, automakers also trade generally lower
- Japanese officials continue to push for regional bank mergers
- Tokyo expected to raise its COVID-19 alert level
- Australia Q3 wage data missed ests, annualized pace declined to historic low; Australia Oct jobs data due on Thursday
- RBA Gov Lowe: Economy is on the road back in recovery, though it is uneven
- China set the initial pricing guidance for EUR-denominated bond offering [3-tranches]
- BOK again sells more monetary stabilization bonds than indicated
- RBNZ to conduct probe following data leak
- US FDA: Authorizes first COVID-19 Test for Self-Testing at Home
- Shanghai Exchange said it will launch international copper contract on Nov 19th (Thurs)
- Australia NSW goes into strict 6 day lockdown to combat COVID

***Headlines/Economic Data***
Australia/New Zealand
-ASX 200 opened slightly lower
- (AU) AUSTRALIA Q3 WAGE PRICE INDEX Q/Q: 0.1% V 0.2%E; Y/Y: 1.4% V 1.5%E (lowest level since data set started)
- (NZ) New Zealand Q3 PPI Input Q/Q: +0.6% v -0.9% prior; PPI Output Q/Q: -0.3% v -0.2% prior
- (NZ) RBNZ buys NZ$330M v NZ$325M prior in government bonds as part of QE v N$330M sought
- (AU) Reserve Bank of Australia (RBA) Gov Lowe: bond buying is lowering costs of Govt borrowing, but also rates across economy; right to borrow against future income with pandemic and re-pay through growth; Need to keep strong trade relations with China
- (AU) Reserve Bank of Australia (RBA) Offers to buy A$1.0B in Semi Govt bonds v A$1.0B prior
-(NZ) Reserve Bank of New Zealand: Has engaged Deloite on internal process review after information was disclosed to financial services firms before being made public in Nov

Japan
-Nikkei 225 opened -0.6%
- (JP) Bank of Japan (BoJ) Gov Kuroda: New Deposit facility is prudence policy, not monetary; New deposit facility is for stability of financial system; ETF purchases are conducted as part of bold monetary easing; see CPI remaining below 0% for now
- (JP) Japan Oct Trade Balance: ¥872.9B v ¥300.0Be; Adjusted Trade Balance: ¥314.3B v ¥117.4Be
- (JP) Japan Govt ruling coalition looking at spending ¥12T over 5-years, starting FY21/22, for disaster proofing infrastructure – Nikkei
- (JP) Japan Fin Min Aso: Japan will continue to target balanced budget in FY25; Subsidies for regional bank consolidation is an option being considered
- (JP) Japan Chief Cabinet Sec Kato: Ministry will appropriately address support for airlines; Closely watching movements on gasoline vehicles in foreign markets
-Japan MoF sells ¥1.2T v ¥1.2T indicated in 0.4% 20-year JGBs: avg yield: 0.3880% v 0.3940% prior; bid to cover 3.6x v 3.9x prior

Korea
-Kospi opened +0.4%
- 005380.KR Expected to face lawsuit over fires in electric vehicles (EV) amid recall - press
-(KR) South Korea Oct foreign currency deposits at banks $93.32B v $85.43B prior (record high)

China/Hong Kong
-Hang Seng opened +0.1%; Shanghai Composite opened -0.1%
- (CN) China PBoC Open Market Operation (OMO): Injects CNY100B in 7-day reverse repos v Injects CNY50B in 7-day reverse repos prior; Net drain CNY50B v Net drain CNY70B prior
- (CN) China PBOC sets Yuan reference rate: 6.5593 v 6.5762 prior ( Strongest since June 27th 2018)
- (CN) China Finance Ministry (MOF) sets initial pricing guidance for 5-year, 10-yer and 15-year EUR-denominated bonds
- (CN) General Office of the China State Council has issued guidelines aimed at stabilizing grain production - Xinhua

Other
- (TW) Trade officials from the US and Taiwan are scheduled to hold talks on November 20th - Taiwan press

North America
-(US) FDA: Authorizes First COVID-19 Test for Self-Testing at Home
- (US) Weekly API Crude Oil Inventories: +4.2M v -5.1M prior
- (US) SEPT NET LONG-TERM TIC FLOWS: $108.9B V $27.8B PRIOR; TOTAL NET TIC FLOWS: -$79.9B V $86.3B PRIOR; China Total holding of US Treasuries: $1.061T v $1.068T prior; Japan Total Holdings of US Treasuries: $1.276T v $1.278T prior (net seller for 3rd consecutive month, largest sale since 2018)
- (US) Key county, Wayne, in Michigan has failed to certify vote by deadline; deadlock to be referred to Michigan Board - press

Europe
- (UK) PM Johnson said to back real budget increase for defense – Press
- (IE) Ireland PM Martin: EU and UK can see "the landing zones" on a trade deal, but UK will have to compromise - Daily Mail

***Levels as of 12:15ET***
- Hang Seng +0.5%; Shanghai Composite +0.4%; Kospi +0.3%; Nikkei225 -0.8%; ASX 200 +0.5%
- Equity Futures: S&P500 -0.2%; Nasdaq100 -0.0%, Dax -0.1%; FTSE100 -0.2%
- EUR 1.1894-1.1844; JPY 104.22-104.05; AUD 0.7301-0.7272; NZD 0.6900-0.6875
- Commodity Futures: Gold -0.4% at $1,878/oz; Crude Oil -0.1% at $41.39/brl; Copper 0.0% at $3.21/lb

>>> US Close Dow -0.56% S&P -0.48% Nasdaq -0.21% Russell +0.37%

Closing Stock Market Summary

The S&P 500 declined 0.5% on Tuesday in a cool-down session following its recent record-setting run. The Nasdaq Composite (-0.2%) and Dow Jones Industrial Average (-0.6%) also closed modestly lower, while the Russell 2000 (+0.4%) closed at a fresh record high.   

The market struggled out of the gate after October Retail Sales were softer than expected with total retail sales up 0.3% m/m (Briefing.com consensus +0.5%). A pullback in October discretionary spending may have contributed to the negative reactions to better-than-expected Q3 earnings reports from Walmart (WMT 149.37, -3.07, -2.0%) and Home Depot (HD 272.47, -7.10, -2.5%)

For the most part, losses were kept in check. The S&P 500 utilities sector strayed from the pack with a 2.0% decline, but no other sector fell more than 0.8%. The energy (+0.5%) and real estate (+0.1%) sectors eked out gains. 

Coincidentally, today's low in the S&P 500 (-1.1%) came right before the NAHB Housing Market Index for November was released at 10:00 a.m. ET, which showed homebuilding sentiment hit a new all-time high. Similarly, sentiment among fund managers was indicated to be extremely bullish, according to a survey done by Bank of America. 

The heightened level of bullishness among fund managers perhaps served as a contrarian signal for investors to remain cautious, especially given the market's recent gains. Prior to today, the S&P 500 was up 10.9% over the last 11 trading sessions. 

Separately, shares of Tesla (TSLA 441.61, +33.53, +8.2%) rose 8% on news that it'll join the S&P 500 on Dec. 21. Walgreens Boots Alliance (WBA 39.86, -4.25, -9.6%) and other drug store stocks sold off following the launch of Amazon's (AMZN 3135.66, +4.60, +0.2%) online pharmacy business.

U.S. Treasuries ended the session with small gains, pushing yields lower. The 2-yr yield decreased two basis points to 0.16%, and the 10-yr yield decreased three basis points to 0.87%. The U.S. Dollar Index decreased 0.2% to 92.44. WTI crude futures increased 0.2% to $41.43/bbl. 

Reviewing Tuesday's big batch of data, which featured Retail Sales for October:

  • October Retail Sales were softer than expected with total retail sales up 0.3% m/m ( consensus +0.5%) and sales, excluding autos, up 0.2% (consensus +0.6%). September retail sales growth was revised down to 1.6% from 1.9%. Excluding autos, it was revised to 1.2% from 1.5%.
    • The key takeaway from the report is that it showed a pullback in spending across several discretionary categories like clothing (-4.2% m/m), general merchandise stores (-1.1%), furniture and home furnishing stores (-0.4% m/m), and food services and drinking places (-0.1% m/m).
  • Industrial production increased 1.1% m/m in October (Briefing.com consensus +0.9%) on top of an upwardly revised 0.4% decline (from -0.6%) in September. The capacity utilization rate hit 72.8% ( consensus 72.3%) following an upwardly revised 72.0% (from 71.5%) in September.
    • The key takeaway from the report is that industrial production has recovered most of the 16.5% decline seen from February to April, although output is still 5.6% below its pre-pandemic February level.
  • The NAHB Housing Market Index increased to a new all-time high of 90 in November ( consensus 85) following the previous all-time high of 85 in October.
  • Business inventories increased 0.7% in September (consensus +0.5%) following an unrevised 0.3% increase in August.
  • Import prices decreased 0.1% in October; and prices excluding oil increased 0.1%. Export prices increased 0.2% in October; and prices excluding agriculture were unchanged.

Looking ahead, investors will receive Housing Starts and Building Permits for October and the weekly MBA Mortgage Applications Index on Wednesday.

  • Nasdaq Composite +32.6% YTD
  • S&P 500 +11.7% YTD
  • Russell 2000 +7.4% YTD
  • Dow Jones Industrial Average +4.4% YTD

CNN : Boeing's 737 Max debacle could be the most expensive corporate blunder eve

Boeing's 737 Max debacle could be the most expensive corporate blunder ever

New York (CNN Business)The 20-month grounding of the 737 Max could end as soon as this week, but Boeing's mounting costs have soared to tens of billions of dollars. That means the plane maker's repeated safety oversights and mismanagement were not only tragic but also rank among the expensive corporate mistakes in history.

The two fatal crashes that led to the grounding of the Boeing 737 Max killed 346 people.
Financially, Boeing continues to pay a hefty cost to ensure the safety of future 737 Max passengers.

Direct costs
Boeing has detailed about $20 billion in direct costs from the grounding: $8.6 billion in compensation to customers for having their planes grounded, $5 billion for unusual costs of production, and $6.3 billion for increased costs of the 737 Max program.
The company also spent nearly $600 million for jet storage, pilot training and software updates that are not included in the company's overall cost estimate. It also established a $100 million victim compensation fund, which is also not included in Boeing's $20 billion in estimated costs.
So the costs of the grounding released by Boeing total $20.7 billion.
Boeing's legal liability will almost certainly add to that cost. Published reports show that the families of the first 11 victims to settle with Boeing received at least $1.2 million each. That means the total cost is likely to top $500 million.
Interest costs are adding up, too. Boeing borrowed billions of dollars at a roughly 5% interest rate to keep building 737 Max planes it can't deliver. The company built 450 Max jets during the grounding, but it hasn't delivered a single 737 Max plane in that nearly nearly two-year period.
Only about half will be delivered next year, and some deliveries will stretch as far as 2023. Boeing doesn't get most of the money from a sale until the plane is delivered to the airline, so the interest will pile up — perhaps by about $3 billion or $4 billion, said Chris Denicolo, aerospace credit analyst with Standard & Poor's.
What's clear is that the $20.7 billion in costs that Boeing has detailed is only the starting point. Bank of America puts the costs at more than $25 billion.
"It's going to be more than $20 billion. But it's hard to say how much more it's going to be," said Denicolo.

Lost sales
If financial damage from the 737 Max remains in the $20 billion range, that would not put it in the running for the most expensive mistake by a company. Volkswagen has spent €32 billion, or $38 billion, on its emissions cheating scandal. The most expensive mistake to date is the $68 billion cost to BP of the Deepwater Horizon explosion and oil spill of 2010.
But BP lost little or no sales because of Deepwater Horizon, and VW suffered only a minor, short-term loss of sales from the emissions scandal. By contrast, it's clear that Boeing has suffered a huge loss in sales in the wake of the 737 Max grounding.
Because of the grounding, Boeing lost the cancellation fees that had been written into in its sales contracts for 737 Max orders. As the Covid-19 pandemic sent air travel demand plummeting, airlines have begun taking advantage of the free cancellation policy, anticipating they won't need new planes for several years.
Boeing had disclosed 448 canceled orders for the Max so far this year, compared with only nine for its other models. In addition it has dropped another 782 orders from its backlog of 737 Max orders because it believes those orders are no longer certain enough to rely on. In at least some cases those uncertain plane orders are jets airline customers have said they no longer want.
A 737 Max typically sells for about $55 million, or half of the stated list price, so the worst-case scenario for Boeing is that it could lose as much as $67 billion in revenue from the drop in sales.
But experts say it's more likely that Boeing will eventually sell those planes, though at a steep discount, in some cases to the same customers who are now canceling the orders.
S&P's Denicolo and another industry expert agree that those steep discounts in sales price, which wouldn't have taken place if not for the grounding, are the real financial risk for Boeing.
"Say you're an airline. If there's no longer any penalty, why not cancel all my orders, and I can buy them back much cheaper?" said the industry expert, who spoke on the condition of anonymity.
Boeing will not comment on the prices paid for its planes or any discounts. But the expert said it might be as much as a $20 million discount per plane, or roughly $25 billion total — more than doubling the true cost of the grounding.
Discounting many of the 3,300 other Max orders still on the books could make Boeing's total cost of its 737 Max debacle climb even higher, perhaps past the $68 billion price tag of Deepwater Horizon.

Artnet : A Hedge-Fund Manager Whose Company Sold a Fake Frans Hals at Auction Is

A Hedge-Fund Manager Whose Company Sold a Fake Frans Hals at Auction Is Appealing a Court Order to Return $6 Million to Sotheby’s
A case linked to a high-profile Old Master forgery ring is back in court.


The investment company Fairlight Art Ventures is appealing a December court ruling ordering that it reimburse Sotheby’s $6 million after the auction house sold on its behalf a Frans Hals painting now believed to be a forgery.

The once-purported Old Master canvas is one of a number of works purchased from French art dealer and collector Giuliano Ruffini that were exposed as likely fakes in 2016. The alleged forgery ring is linked to sales of as much as €200 million ($255 million) in suspect works.

Fairlight Art Ventures, owned by US hedge fund manager and art collector David Kowitz, teamed up with London art dealer Mark Weiss to buy what they believed was an authentic Hals from Ruffini in 2010. They then sold the work at Sotheby’s for $11.75 million to American collector Richard Hedreen in a 2011 private sale.

In last week’s appeal, Fairlight’s lawyer, James Collins, argued that there was no contractual relationship between Fairlight and Sotheby’s, according to the Art Newspaper. The auction house acted merely as a “sub-agent” for Mark Weiss, he said in court. (Collins declined to comment on pending litigation.) During the hearing, a lawyer for Sotheby’s countered that Fairlight gave Weiss full authority “to enter the contract,” and the three were “partners in the project.”

When the alarm was sounded about works linked to Ruffini five years after the sale, when police seized a painting by Lucas Cranach the Elder from a French exhibition, forgery expert James Martin of Orion Analytical, a scientific analysis firm later acquired by Sotheby’s, conducted testing on the Hals. He determined it was “undoubtedly a forgery.” That prompted the auction house to issue Hedreen a refund.

But Weiss and Fairlight initially maintained their belief in the painting’s authenticity and refused to reimburse Sotheby’s for their proceeds from the sale. The auction house sued. Weiss agreed to pay Sotheby’s $4.2 million as part of a settlement.

In December, London’s High Court ruled in favor of Sotheby’s, ordering Fairlight to return the funds from the painting’s sale. A new decision is expected early next year.

Sotheby’s did not respond to inquiries from Artnet News, but told the Antiques Trade Gazette in June that “we are confident the Court of Appeal will uphold the First Instance Judgement which was entirely in Sotheby’s favor.”

The court’s initial ruling did not weigh in on the issue of the painting’s authenticity. At one point, the French government had issued an export ban on the work in an effort to acquire it for the Louvre in Paris. That deal fell through due to a lack of funds. Subsequently, Christie’s passed on brokering the painting’s sale due to a lack of satisfactory provenance and attribution for the work.

Criminal prosecution over the suspected forgeries hit a major roadblock in March when appeals courts in Italy rejected arrest warrants issued by Paris judge Aude Buresi for both Ruffini and Lino Frongia, the Italian painter suspected of having forged the works.

>>> US Gapping down

Gapping down
In reaction to earnings/guidance:

  • IQ -9.4%, API -8.4%, GAN -5.6%, SMMT -4.3%, SE -3.9%, SDC -3.8%, BEKE -2.4%, BIDU -2.1%, KSS -1.9%, HD -1.5%, SLP -1.4%

Other news:

  • GDRX -17% (Amazon announced two new pharmacy offerings)
  • WBA -11.8% (Amazon announced two new pharmacy offerings)
  • PLUG -10.8% (prices offering of 38 mln shares of common stock at $22.25 per share)
  • TREE -9.6% (prices offering of 2,955,984 shares of common stock by Selling Stockholder at $295.00 per share)
  • CVS -8.8% (Amazon announced two new pharmacy offerings)
  • PRAX -8.8% (provides update on PRAX-114 IND submission for the treatment of major depressive disorder)
  • BSX -6.4% (initiated a global, voluntary recall of all unused inventory of the LOTUS Edge Aortic Valve System due to complexities associated with the product delivery system)
  • ORA -6.3% (launched public common stock offering and filed mixed securities shelf offering)
  • PDD -5.2% (announced offerings of convertible senior notes and ADSs; filed offering prospectus)
  • GME -4.6% (stakeholder calls for strategic review, according to WSJ)
  • STAG -4.1% (prices offering of 8 mln shares of common stock for gross proceeds of $243.2 mln)
  • PLYA -3.8% (announced secondary offering of Ordinary Shares)
  • KDP -3.6% (Keurig Dr Pepper announces completion of sale and distribution for its largest shareholder; Mondelez International's (MDLZ) position reduced to strategically important level)
  • VRTV -3.5% (prices offering of 1.4 mln shares of common stock by selling shareholders at $18.50 per share)
  • JAMF -3.5% (launched follow-on public offering of common stock)
  • CAE -3.4% (announced stock offering and concurrent private placement; also acquired Flight Simulation Company)
  • KOD -1% (launched common stock offering)

>>> US Gapping up

Gapping up
In reaction to earnings/guidance:

  • YY +8%, AQUA +1.4%, WMT +0.9%, GDS +0.7%

Other news:

  • LXRX +45.7% (reports SOLOIST and SCORED Phase 3 studies achieved their primary endpoints; Published in The New England Journal of Medicine)
  • TSLA +13% (to join S&P 500)
  • NEPT +10.5% (received over $100 mln in purchase orders)
  • PGRE +8.6% (rejected unsolicited Bow Street acquisition proposal)
  • SQNS +7.2% (filed for offerings)
  • AXTI +5.9% (initiated process toward IPO for Tongmei subsidiary in China)
  • RDHL +3.9% (second COVID-19 Candidate, RHB-107, cleared by FDA for Phase 2/3 study in symptomatic COVID-19 disease)
  • KRMD +3.8% (authorized $10 mln stock repurchase program)
  • COST +2.1% (declared $10/share special cash dividend)
  • BMY +1.9% (provided regulatory update for liso-cel BLA)
  • VRCA +1.6% (announces receipt of final FDA minutes following type A meeting regarding resubmission of the NDA for VP-102 in molluscum)
  • AVRO +1.1% (new positive clinical data and preclinical data, as well as expanded leading lysosomal disorder gene therapy pipeline)