Gapping down
In reaction to disappointing earnings/guidance:
- STLD -2%
Other news:
- BHVN -29.6% (files mixed securities shelf offering; commences underwritten public offering of $300 mln of common shares)
- RMTI -26.3% (commenced an underwritten public offering of common stock)
- UBX -12.8% (announces results from its Phase 1 study of UBX0101)
- CALA -9.8% (commences underwritten public offering of 10 mln shares of common stock)
- PACB -7.2% (UK's CMA finds that Illumina's (ILMN) proposed takeover of PacBio raises competition concerns in the supply of specialist DNA sequencing systems in the UK
- SRNE -2.5% (files for ~1.33 mln share common stock offering by selling shareholders)
Analyst comments:
- KBH -1.5% (downgraded to Underperform from Mkt Perform at Raymond James)
- IHG -1.4% (downgraded to Underweight from Equal Weight at Barclays)
- ORCL -0.5% (downgraded to Neutral from Outperform at Macquarie)
- SCHW -0.5% (downgraded to Hold from Buy at Deutsche Bank)
Gapping up
In reaction to strong earnings/guidance:
- N/A.
Other news:
- MGI +141.4% (on strategic agreement news with Ripple, a provider of enterprise blockchain solutions for global payments; Includes $30 million equity investment in MoneyGram)
- BYND +16% (continued strength; short squeeze)
- PHAS +12.5% (announces "positive preliminary results" from its Phase 2a clinical trial for PB2452)
- EIGR +9.6% (receives Breakthrough Therapy Designation from FDA for avexitide for the treatment of post-bariatric hypoglycemia)
- ARQL +2.6% (continued strength - was up 17% on the day)
- ILMN +1.8% (wins infringement suit against Ariosa Diagnostics; intends to seek all remedies for infringment)
- FB +1.6% (Facebook in 2020 will open a new subsidiary called Calibra; first product will be a new digital wallet for a new digital currency)
- AZN +1.6% (AstraZeneca & Merck (MRK) announce that the European Commission has approved Lynparza as a 1st-line maintenance treatment for women with BRCA-mutated advanced ovarian cancer)
- NVO +1.4% (confirms FDA approval of expanded indication for Victoza)
- SNY +1.2% (Sanofi and Google (GOOG) will establish a new virtual Innovation Lab with the ambition to radically transform how future medicines and health services are delivered by tapping into the power of emerging data technologies)
- SCPL +0.9% (10% owner Park West bought ~330K shares worth ~$4.4 mln )
- HSY +0.9% (following CEO Michelle Buck CNBC interview)
- MRK +0.8% (FDA approves KEYTRUDA as monotherapy for the treatment of patients with metastatic small cell lung cancer with disease progression on or after platinum-based chemotherapy and at least one other prior line of therapy)
- GE +0.7% (General Electric Aviation Unit: IndiGo places $20 bln LEAP order)
- SNV +0.6% (increases prior $400 mln share repurchase authorization to $725 mln)
Analyst comments:
- SPWR +5.8% (upgraded to Buy from Neutral at Goldman)
- RUN +4.4% (upgraded to Buy from Neutral at Goldman)
- TDS +4.2% (upgraded to Overweight from Equal-Weight at Morgan Stanley)
- TWLO +2.3% (initiated with a Buy at Needham)
- PINS +2% (initiated with Outperform rating and $33 tgt at Wedbush)
- SEDG +1.6% (upgraded to Neutral from Sell at Goldman)
WASHINGTON — After coming to office vowing to solve two very different nuclear crises, President Trump finds himself in a bind familiar to his predecessors: careening toward a confrontation with Iran and stalemated with North Korea.
Iran’s announcement on Monday that it expects within 10 days to blow past the limits on how much nuclear fuel it can stockpile opens a new and perilous phase of its confrontation with the West.
After a year of restraint, during which Iran complied with the terms of an agreement that Mr. Trump very publicly abandoned, there is a greater sense than at any time in recent years that what began as an effort to drive Iran to the negotiating table may instead push the two countries into a conflict leaders on both sides insist they do not want.
Iran is still well more than a year away from being able to build a weapon — perhaps much longer. North Korea, by contrast, already has dozens, and appears to be adding to its arsenal at a rapid clip, according to American intelligence experts, despite Mr. Trump’s insistent wooing of the North Korean leader, Kim Jong-un.
It is not clear yet what Mr. Trump is getting in return. On Monday, President Xi Jinping of China, whose government has kept the North alive with fuel and aid, announced that he would make his first state visit to Pyongyang, a huge propaganda victory for Mr. Kim. Mr. Kim also met recently with President Vladimir V. Putin of Russia.
The message seems clear: Even if he cannot reach an agreement with Washington, Mr. Kim has other cards to play, keeping trade and relationships alive with the two powers that helped his grandfather fight the Americans nearly seven decades ago.
But while Mr. Trump sees Iran’s threats to resume nuclear production as an urgent crisis, one leading to the decision on Monday to send another 1,000 troops to the region, he is so invested in his newfound relationship with Mr. Kim that he actively dismisses evidence that North Korea’s collection of weapons and missiles is expanding.
“I don’t know,” Mr. Trump told George Stephanopoulos of ABC News over the weekend, appearing not to know about those assessments, or not to believe them. “I hope not. He promised me he wouldn’t.”
Broken promises — real, imagined and misunderstood — are at the core of both standoffs. The Iranians believe they agreed in 2015 to a 15-year moratorium on producing new nuclear fuel — and that in return they would be able to integrate themselves into the global economy.
But Mr. Trump declared the accord a “disaster” and abandoned it over the objections of many of his top advisers, his European allies, and Russia and China.
If the Iranians make good on their threat to break through the restrictions on how much nuclear fuel they will produce, by next month Tehran may have enough fuel for a single bomb in less than a year, for the first time since the 2015 agreement went into effect. (It would take it significantly longer, experts estimate, to build a deliverable weapon.)
The one-year buffer is the safety threshold that the Obama administration set years ago and that the Trump administration has adopted to impede Iran from gaining the capability to build a nuclear weapon. But leaders appear to be testing whether the rest of the coalition that negotiated the nuclear deal — especially the big European powers — will stick with Washington.
Should the Europeans break with the Trump administration and agree to help Iran weather harsh economic sanctions imposed by the United States, Tehran said, it could avoid breaking out of the 2015 agreement. That seems unlikely.
Nonetheless, the Europeans blame Mr. Trump for pushing Iran into violating an accord they all thought was working. And despite calls from some hawks in Washington for military action — most recently Senator Tom Cotton, Republican of Arkansas, who said on Sunday that attacks on tankers in the Gulf of Oman “warrant a retaliatory military strike” — Iran is betting that this time Washington will find few allies willing to escalate the confrontation, either in the Persian Gulf or through attacks on the country’s nuclear facilities.
It is a huge game of chicken, and a miscalculation on either side could easily provoke a conflict.
Now Mr. Trump faces two immediate challenges when it comes to Iran: making the Persian Gulf safe for oil shipments and keeping Iran from edging toward the bomb-making capability that incited the crisis of a decade ago. Neither will be easy.
“Unfortunately, we are heading toward a confrontation,” Iran’s ambassador to Britain, Hamid Baeidinejad, warned CNN’s Christiane Amanpour on Monday.
That view may be a calculated one, intended to peel the Europeans away from Mr. Trump. But the past few weeks have cast doubt on Mr. Trump’s campaign promise that his occupancy of the Oval Office would so restore respect for American power that adversaries would give up their nuclear weapons programs.
On Iran, the theory was that once he abandoned the Iran deal and reimposed sanctions, Iran would crack. By some measures the sanctions worked: Iran’s economy has shrunk 4 percent, its currency has cratered and its inflation rate soared.
But rather than crack, the Iranians escalated, leaving Mr. Trump without any easy options.
“The U.S. seems to have embarked on its ‘maximum pressure’ campaign with few allies and little forethought as to unintended consequences or how to respond if key assumptions — e.g., that Iran will implode or succumb and enter talks on U.S. terms — prove false,” Brett McGurk, Mr. Trump’s former special envoy for the global coalition against the Islamic State, wrote recently.
He added: “Those assumptions are now highly questionable at best, which means the entire policy foundation as articulated by Trump has eroded. Iran appears to have made the strategic decision (not surprising) to resist economic pressure and respond asymmetrically, not directly against us.”
Compounding the problem is the emerging confrontation in the gulf. Even the Democratic chairman of the House Intelligence Committee, Representative Adam B. Schiff, no friend of Mr. Trump’s, says the evidence is overwhelming that Iran was responsible for the attacks on the tankers.
Securing the gulf for oil tankers would require enough naval vessels and reconnaissance capability to monitor just about every ship passing close to Iran’s shores.
“That requires a coalition,” said John F. Kirby, a retired rear admiral who participated in the tanker wars of the 1980s and served as the State Department spokesman during the negotiation of the Iran deal. “We don’t have enough ships to do it ourselves.”
Whether the United States can convince allies to supply additional ships may be a test of how big a price Mr. Trump has paid for alienating the other nations that were part of the 2015 agreement and that also fear Iran’s move to a bomb.
Secretary of State Mike Pompeo suggested on Sunday that China, among others, should help with that task, since it is so dependent on oil from the Middle East. But it is far from clear that China, Russia or the three European powers that negotiated the nuclear accord alongside the United States — Britain, France and Germany — are willing to join in that effort.
As these dramas play out, no one is watching the Iran confrontation more carefully than Mr. Kim in North Korea. He has played Mr. Trump much more skillfully than the Iranians have, engaging him first in a feel-good summit meeting and then, for a year, rejecting the administration’s definitions of “denuclearization.”
Mr. Trump, for his part, turned down a request from Mr. Kim to end sanctions in return for dismantling only a part of the North’s nuclear infrastructure. But he has backed away from threatening what he once called fire and fury, and Mr. Kim may well be betting that as long as Iran dominates the headlines and the White House’s attention, he can keep producing missiles, fuel and weapons.
Early premarket gappersGapping up:
- MGI +152.4%, PHAS +16.5%, BYND +11.2%, EIGR +9.6%, ARQL +7.5%, FB +2.3%, GE +1.5%, AZN +1.2%, NVO +1%, SCPL +0.9%, PINS +0.9%, SNY +0.8%, SNV +0.5%
Gapping down:
- RMTI -27.2%, BHVN -25%, CALA -10.3%, PACB -5.1%, SRNE -2.5%, STLD -2%
>>> Up
* Accor Upgraded to Outperform at Bernstein; PT Set to 44 Euros
* Danone Upgraded to Outperform at Davy
>>> Down
* Bauer Cut to Hold at Kepler Cheuvreux; Price Target 22 Euros
* Evraz Downgraded to Sell at Citi
* Evraz Cut to Hold at VTB Capital; Price Target 6.70 Pounds
* Lufthansa Downgraded to Hold at HSBC; PT 16.50 Euros
>>> Initiation
* STMicroelectronics Rated New Buy at SocGen; PT 23.60 Euros
* Veolia Rated New Outperform at MainFirst; PT 24.70 Euros
>>> Call
* BBVA, CaixaBank Stand Out in Low Growth Spanish Bank Sector: RBC
* Evraz Cut to Sell; Consensus Now Looks Realistic, Citi Says
* Citi Expects to See Consolidation in Europe’s Hotel Sector
Asian stocks put in a mixed performance Tuesday ahead of the highly anticipated Federal Reserve meeting, while Treasury yields dipped and the yen edged up.
Stocks slid in Japan, rose in Australia, Hong Kong and South Korea, and were little changed in Shanghai. Investor focus remained firmly on the Fed’s statement and press conference Wednesday to see whether Chairman Jerome Powell and his colleagues will validate widespread expectations for interest-rate cuts. There was little cue from Wall Street’s Monday trading, when the S&P 500 Index closed flat, though tech stocks did send the Nasdaq 100 higher.
US Agfter Hours MGI +160% on Ripple investment / strategic agreement news, PHAS +15% on Phase 2a update
Nikkei -0.91% Hang Seng +0.71% CSI +0.05% Shanghai -0.18% Shenzen-0.20%
S&P -0.09% Euro Stoxx -0.21% FTSE -0.05% Dax -0.18% SMI -0.25%
Macro :
- CVC, EQT to Raise EU18B, EU14B Respectively in Funds in 2020: FT
- World’s Top Bicycle Maker Says Era of ‘Made in China’ Is Over
Keep an eye on :
- AIR FP : American Air Mulls Ordering Up to 50 of Airbus’s New A321XLR Jet
- AIR FP : Airbus CEO Doesn’t Sense Market Slowdown, Demand Very Strong
- AMBUB DC : Ambu Cuts FY Outlook and Lowers Mid-Term Targets After Review
- BAR BB : Barco Venture Cinionic to Supply 4K Projectors to Cineworld
- BIOPOR DC : BioPorto to Issue 9.26M Shares in Private Placement
- BP/ LN : Senegal Process Correct in Oil Tenders: African Energy Chamber
- CGG FP : CGG Wins Multi-Year Processing Contract From Adnoc
- CVAL IM : Creval Aims to Boost Net to EU138m in 20203 From EU93m in 2021
- CYADA BB : *CELYAD BUYING OPPORTUNITY ON OVERREACTION TO DATA: SUNTRUST
- DSY FP : Dassault Systemes Lead Investor in EU65m BioSerenity Financing
- OLE SM : Deoleo Reaches Agreement to Refinance EU553M Debt: Confidencial
- EMMN S : Emmi Raises Stake in Laticinios Porto Alegre Industria to 70%
- EVRY NO : Tieto to Acquire Evry for NOK35.48/Share in Cash, Share Deal
- FFP FP : FFP Acquires 5% of Signa Prime Selection for EU186M
- HCM LN : Hutchison Chi-Med Is Said to Delay Launch of Hong Kong Listing
- HER IM : Hera, Ascopiave in Northeast Italy Energy Partnership
- IFX GY : Infineon Says Shares Placed at EU13.70, Gross Proceeds EU1.55b
- INTER NA : Intertrust Buys Viteos for EV of $330m; Ups Medium-Term Guidance
- KER FP : Bartolomeo Rongone Named CEO of Kering’s Bottega Veneta
- KORI FP : Korian Signs Amendment and Extension of Syndicated Loan
- KTCG AV : Kapsch TrafficCom Dividend Per Share Matches Estimates
- LDO IM : Leonardo CEO: Tempest, Franco-German Fighter Plans May Converge
- LEAS BB : Leasinvest Buys Two Properties From Immo Lux Airport for EU47.3m
- MC FP : Jimmy Choo Founder’s Tamara Mellon Raises $50 Million in Funding
- MKEA FP : Mauna Kea Says France to Reimburse Confocal Laser Endomicroscopy
- MGI US :
- NDX1 GY : Nordex Gets 300 MW Order From Engie Unit
- NOVOB DC : Novo Nordisk’s Victoza Gets FDA Approval For Pediatric Patients
- PRSM LN : Short Sellers Circle Blue Prism After 2,200% Rally Since IPO
- RAL FP : Rallye’s Alpetrol Safeguard Proceedings Opened
- SAN SM : Santander Calls EGM to Vote on Share Sale For Mexico Unit Deal
- MAN GY : Scania CEO Says Margin Will Increase in Coming Quarters: DI
- WAF GY : Siltronic Cuts Full-Year Sales Forecast on China Restrictions
- SWEDA SS : Swedbank’s Estonian Unit Replaces CEO, CFO After Internal Probe
- VAO GY : Vapiano First Quarter Sales EU97.9 Mln, Sees 2019 Net Sales Missing Estimates, Slower Expansion
- RIN FP : Vilmorin Completes EU250M Schuldschein Placement
- TIT IM : Telecom Italia to Discuss Extraordinary Transactions: Radiocor
- VIV FP : Vivendi to Cancel 50 Million Treasury Shares