Wirecard: the frantic final months of a fraudulent operation
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U.S. and European futures climbed alongside most Asian stocks Tuesday on optimism about coronavirus treatments and signs of progress on trade negotiations. The offshore yuan strengthened and the dollar slipped.
Stocks rose in Japan, Australia and South Korea but dipped in China and Hong Kong. S&P 500 futures advanced after the benchmark notched another all-time high, with companies that benefit from a more robust economic recovery leading gains. Ten-year Treasury yields ticked higher, while their Chinese counterparts rose the most in seven weeks.
US After Hours Dow Industrial shakeup -- CRM +3.6%, AMGN +4% and HON +3.7% are replacing XOM -1.6%, PFE -1.5% and RTX -2.6% on Aug 31; also PANW down on earnings
Nikkei +1.35% Hang Seng -0.31% CSI +0.17% Shanghai -0.29% Shenzen +0.22%
Eur$ 1.1812 CNH 6.9066 CNY 6.9099 JPY 106.03 GBP 1.3103 CHF 0.9114 RUB 74.5020 WTI$ 42.56 -0.12%
S&P +0.48% Nasdaq +0.36% EuroStoxx +0.54% FTSE +0.44% Dax +0.74% SMI +0.38%
Macro :
- Salesforce, Amgen, Honeywell to Join DJIA Index
Keep an eye on :
- ARW LN : Arrow Global First Half Adjusted Net Loss GBP110.4 Mln
- ARYN SW : Aryzta: ISS Supports Aryzta’s Proposed Chair, Andreas Schmid
- AZN LN : AstraZeneca Starts Phase 1 Trial for Covid Monoclonal Antibody
- AVV LN : Aveva Agrees to Buy Osisoft for Enterprise Value of $5.0B
- BAKKA NO : Bakkafrost Second Quarter Operating Ebit Misses Estimates
- BNP FP : French Govt In Talks W/ Banks Over State-Backed Loans: Le Maire
- BOSN SW : Bossard First Half Ebit CHF41.1 Mln, -22% Y/y
- CAI AV : CA Immo Sees Full Year FFO I Above EU126 Mln
- CLNX SM : Cellnex Wants to Buy Madrid Metro Telecoms Firm, Expansion Says
- CHR DC : Natural Product Allure Could Be a Winner for Chr. Hansen: React
- CSGN SW : Credit Suisse Targets CHF100m in Savings With Argau Unit
- DANSKE DC : Danske Bank Won’t Face Investor Suit Over Money Laundering Claim
- DFS LN : DFS Furniture Says Performance is Significantly Ahead of Views
- EL FP : Dutch Court Blocks Essilor From Accessing Grandvision Data
- FXPO LN : Ferrexpo Appoints Lucio Genovese as Chairman
- HELN SW : Helvetia Sees 1H Loss of About CHF20m
- HEX NO : Hexagon Composites Offering Prices 18.3m Shrs at NOK49.50/Shr
- FSJ LN : James Fisher First Half Revenue GBP258.1 Mln
- LLBN SW : Liechtensteinische LB 1H Net Income CHF60.2 Mln, -1.3% Y/y
- MC FP : Tiffany Gains on Reuters Report LVMH Deal Deadline Extended
- NRS NO : Norway Royal Salmon 2Q Operating Ebit Beats Highest Est.
- QIA GY : Qiagen Sees Shipments of 10-Min Covid Antibody Tests in Late Aug
- SPI AV : S Immo First Half Net Income EU16.1 Mln
- SAS SS : SAS Third Quarter Pretax Loss SEK2.07 Bln
- SRAIL SW : Stadler Rail First Half Net Rev. CHF934.7 Mln; Shares Rise 2.7%
- SWEDA SS : Swedish FSA Makes Small Changes to Banks’ Capital Requirements
- SCMN SW : Swiss Competition Commission Opens Probe Into Swisscom
- SPSN SW : Swiss Prime First Half Ebitda CHF322.6 Mln
- TIT IM : Italy Clashes With Former Monopoly Over Future of Phone Network
- WDI GY : Wirecard Supervisory Board Expected to Quit: FT
>>> Up
* Aperam Raised to Overweight at Morgan Stanley; PT 30 euros
* Barco PT Raised to 27.40 euros from 25.71 euros at Berenberg
* Deutsche Post PT Raised to 45 euros at Deutsche Bank
* DSV Panalpina PT Raised to 1,070 kroner at Deutsche Bank
* Generali Raised to Buy at BofA; PT 15.80 euros
* Stratec Raised to Hold at LBBW; PT 128 euros
* Telia Raised to Neutral at JPMorgan; PT 35 kronor
* Trigano PT Raised to 134 euros from 107 euros at Berenberg
* Wallenstam Raised to Hold at Handelsbanken; PT 124 kronor
* Zehnder Raised to Buy at MainFirst; PT 52 Swiss francs
>>> Down
* Aker Solutions Cut to Sell at DNB Markets; PT 8.60 kroner
* Galapagos ADRs Cut to Hold at Jefferies; PT $157
* Kvaerner Cut to Hold at DNB Markets; PT 9.10 kroner
>>> Initiation
* Aperam Raised, Play Defense in Stainless Steel Short Term: MS
* Argenx ADRs Rated New Outperform at Raymond James; PT $275
* BB Biotech Rated New Hold at Intesa Sanpaolo
* Traumhaus Rated New Buy at Bankhaus Metzler; PT 17.50 euros
>>> Call
* AA Plc Stock Unappealing Even Amid Potential Bid, Jefferies Says
* Deutsche Post, Rivals’ PTs Raised on Strong 2Q: Deutsche Bank
* Galapagos Downgraded at Jefferies on Filgotinib Uncertainties
* Generali Has Limited Covid-19 Impact, Upgrade to Buy: BofA
* RWE PT Raised With Renewables Still Undervalued, Berenberg Says
- SSE (SCT TH) +1.7%
- Telefonica (TNE5 TH) +1.4%
- HelloFresh (HFG TH) +1.1%
- ASML (ASME TH) +1.1%
- Deutsche Post (DPW TH) +0.7%
- Deutsche Post, Rivals’ PTs Raised on Strong 2Q: Deutsche Bank
- Antofagasta (FG1 TH) -1.3%
DAX:
- Fresenius SE (FRE TH) +1.1%
- Bayer (BAYN TH) +0.9%
- Regeneron Supply Chain in Focus as News Volume Rises
- RWE (RWE TH) +0.8%
- RWE PT Raised With Renewables Still Undervalued, Berenberg Says
- Deutsche Post (DPW TH) +0.7%
- Deutsche Post, Rivals’ PTs Raised on Strong 2Q: Deutsche Bank
MDAX:
- Siltronic (WAF TH) +2.6%
- Fraport (FRA TH) +1.3%
- Metro AG (B4B TH) +1.2%
- HelloFresh (HFG TH) +1.1%
SDAX:
- Shop Apotheke (SAE TH) +2.5%
- Nordex (NDX1 TH) +1.8%
- DIC Asset (DIC TH) +1.8%
- Steinhoff (SNH TH) +1.3%
- Deutsche PBB (PBB TH) -0.6%
After Hours Summary: Dow Industrial shakeup -- CRM +3.6%, AMGN +4% and HON +3.7% are replacing XOM -1.6%, PFE -1.5% and RTX -2.6% on Aug 31; also PANW down on earningsAfter Hours Gainers:
Companies trading higher in after hours in reaction to news: AMGN +4% (will join Dow 30 Index on Aug 31), HON +3.7% (will join Dow 30 Index on Aug 31), CRM +3.6% (will join Dow 30 Index on Aug 31), QGEN +0.8% (announces US launch of new Access Anti-SARS-CoV-2 Total test), AAPL +0.3% (to reopen some stores that were closed due to pandemic, according to Bloomberg), ALSN +0.1% (begins Vehicle Environmental Test services at Indianapolis facility)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: POR -6.5%, PANW -4.6% (also to acquire The Crypsis Group), SXI -0.1%
Companies trading lower in after hours in reaction to news: RTX -2.6% (will be removed from Dow 30 Index on Aug 31), VNET -2.3% (launches 17 mln ADS follow-on offering), XOM -1.6% (will be removed from Dow 30 Index on Aug 31), PFE -1.5% (will be removed from Dow 30 Index on Aug 31), DAL -0.1% (to furlough nearly 2,000 pilots beginning at the start of October - CNBC), AWI -0.1% (acquires business and assets of Moz Designs)
Pompeo Urges Arab States to Follow U.A.E. in Striking Deals With Israel
U.S. officials hope to announce at least one more deal between Israel and an Arab country in coming weeks
TEL AVIV—Secretary of State Mike Pompeo urged Arab countries to join the United Arab Emirates in forging formal ties with Israel, as part of a U.S. diplomatic push to align old enemies in the Middle East against a common rival in Iran.
“I am very hopeful we will see other Arab nations join in this…to recognize the state of Israel and to work alongside them will not only increase Middle East stability but improve the lives for the people of their own countries as well,” Mr. Pompeo said in Jerusalem on Monday, speaking alongside Israeli Prime Minister Benjamin Netanyahu.
During his visit, Mr. Pompeo planned to record an address to the Republican National Convention from Jerusalem in which he said he would discuss how he thinks Trump administration policies keep Americans safe. The address will be shown during the convention on Tuesday.
Earlier this month, the U.A.E. became the first Gulf Arab state to say it would normalize diplomatic relations with Israel. Arab nations have historically refused to establish formal ties with Israel absent a resolution to its conflict with the Palestinians. But a variety of factors, from security to commercial issues, have brought the sides closer together.
The chief diplomat’s five-day visit to the region, with scheduled stops in the U.A.E., Bahrain and Sudan, is the start of a push to encourage other countries to join the U.A.E. Jared Kushner, President Trump’s senior adviser, will travel to Israel, the U.A.E., Oman, Saudi Arabia and Bahrain next week as part of the effort.
U.S. officials said they hope to announce at least one more deal between Israel and an Arab country—possibly Bahrain, Oman or Sudan—in the coming weeks.
The deal between Israel and the U.A.E. drew a mixed response from other Arab states, with many governments hailing Israel’s suspension of its plans to annex parts of the occupied West Bank as part of the deal, but cautioning that peace is impossible without an independent Palestinian state.
Iran and Turkey, which has diplomatic relations with Israel, denounced the deal as a betrayal of the Palestinian cause, an emotive issue for Muslims in the region and beyond.
In a sign of the sensitivities involved, a foreign ministry spokesman in Sudan was fired last week after he indicated the possibility of establishing diplomatic relations with Israel, state news agency SUNA reported.
Saudi Arabia, which sees itself as the leader of the Muslim world and has long championed the Palestinian cause, remained silent for nearly a week following the announcement, while Mr. Trump said he expected Riyadh to join the deal.
Last week, Saudi Foreign Minister Prince Faisal bin Farhan reaffirmed the kingdom’s longstanding position that normalization would only follow the establishment of an independent Palestinian state with East Jerusalem as its capital. “That said, any efforts that promote peace in the region and that result in holding back the threat of annexation could be viewed as positive,” he told a news conference in Berlin with his German counterpart.
The next day, Prince Turki al-Faisal, a former Saudi ambassador to Washington who remains close to the kingdom’s leadership, wrote an op-ed in pan-Arab daily Alsharq Alawsat advising any Arab states that are considering following the U.A.E.’s lead to demand a high price in return.
While the deal has been popular in Israel, members of the security establishment have raised concerns about the U.A.E.’s ability to access advanced military hardware as a result of the accord.
The U.A.E. says it expects its requests for F-35 stealth fighters to be granted now that it is forging peace with Israel. The U.A.E. first requested the jets six years ago, but the Obama administration opposed the sale because of its commitment to Israel’s military superiority in the region.
Mr. Pompeo said the U.S. is committed to preserving what is known as Israel’s “qualitative military edge,” but that Washington is reviewing the U.A.E.’s request for F-35s and other advanced military hardware.
Israel says it is opposed to such a sale, a position Mr. Netanyahu reiterated Monday.
Mr. Pompeo met with Mr. Netanyahu first and later with Defense Minister Benny Gantz and Foreign Minister Gabi Ashkenazi. In addition to the normalization push, they are discussing Iran, with both Israel and the U.S. concerned about the October expiration of a conventional arms embargo on Tehran, which was time limited by the 2015 nuclear deal.
“When Arabs and Israelis agree on something, it makes sense to pay attention,” Mr. Netanyahu said, citing Arab states’ support for a U.S. push to reimpose sanctions on Iran.
Mr. Pompeo will take a break in his diplomatic duties to record his address to the Republican National Convention from Jerusalem, in an apparent nod to the Trump administration’s efforts to court evangelical voters ahead of the November election. It is unusual for a sitting secretary of state to give a political speech, especially while on a diplomatic mission overseas. The State Department said it won’t bear any costs in connection with his appearance and isn’t involved in it.
The mixing of politics and policy received criticism from former diplomats who said making a campaign speech while on official business was inappropriate.
“It is entirely inappropriate,” said Nicholas Burns, who served as an undersecretary of state under President George W. Bush, held two ambassadorial posts and is now an adviser to the Biden campaign. “I don’t remember any of the nine secretaries of State for whom I worked crossing this basic line—that the secretary of state should stay out of national politics,” Mr. Burns added.
Some in Israel worried Mr. Pompeo’s address from Jerusalem could add to tensions between Democrats and the Israeli government, which have deteriorated sharply since Mr. Netanyahu opposed the Iran nuclear deal.
Closing Stock Market SummaryThe S&P 500 (+1.0%) and Nasdaq Composite (+0.6%) rose to new record highs on Monday, as sentiment was boosted by news the FDA approved emergency use authorization for convalescent plasma in hospitalized COVID-19 patients. The Dow Jones Industrial Average gained 1.4%, and the Russell 2000 gained 1.0%.
Cyclical stocks outperformed, as they typically do when there is any positive-sounding coronavirus update due to the prospect for a stronger recovery in these beaten-down spaces. The S&P 500 energy (+2.8%), financials (+2.3%), industrials (+1.8%), and materials (+1.7%) sectors set the performance pace.
The health care sector (-0.5%) was the only S&P 500 sector that closed lower today.
Many of the mega-cap stocks started the day rallying to fresh all-time highs, but a lack of follow-through buying interest in these names tamed the bulls and briefly took the tech-sensitive Nasdaq into negative territory. Investors bought the intraday dip, although these stocks (and the Nasdaq) closed well off session highs.
Apple (AAPL 503.43, +5.95, +1.2%), for example, was up as much as 3.6% but ended the day higher by 1.2%. Nevertheless, it was still a good day for Apple after Morgan Stanley raised its price target to a Street-high $520 from $431. Today was also the record date for the company's 4:1 stock split.
In the energy space, many oil producers temporarily closed oil refineries in the U.S. Golf Coast in anticipation of two tropical storms, one of which is expected to strengthen into a hurricane before making landfall later this week.
WTI crude futures increased 0.7%, or $0.30, to $42.61/bbl. Natural gas futures increased 1.5% to $2.612/MMBtu. Unleaded gasoline futures increased 3.9% to $1.26/gallon.
U.S. Treasuries finished near their flat lines in a muted session, suggesting bond investors were less enthused about the vaccine news. The 2-yr yield was flat at 0.15%, and the 10-yr yield increased one basis point to 0.65%. The U.S. Dollar Index increased 0.1% to 93.30.
Investors did not receive any economic data on Monday. Looking ahead, investors will receive New Home Sales for July, the Consumer Confidence Index for August, the FHFA Housing Price Index for August, and the S&P Case-Shiller Home Price Index for June on Tuesday.
- Nasdaq Composite +26.8% YTD
- S&P 500 +6.2% YTD
- Dow Jones Industrial Average -0.8% YTD
- Russell 2000 -6.0% YTD