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4:01 p.m. ET: Markets pare losses, still close down
Here’s where the markets settled at the end of Thursday’s regular trading day:
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S&P 500 (^GSPC): -0.16%, or 5.03 points
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Dow (^DJI): -0.2%, or 55.34 points
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Nasdaq (^IXIC): -0.24%, or 20.52 points
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10-year Treasury yield (^TNX): +3.1 bps to 1.769%
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Gold (GC=F): -0.62% to $1,465.10 per ounce
2:04 p.m. ET: Trump weighs new probe with EU tariff threat
The Trump administration is considering opening a new trade probe against the European Union, Politico reports.
1:53 p.m. ET: Pelosi says progress made on USMCA with Lighthizer
House Speaker Nancy Pelosi said progress was made on the U.S.-Mexico-Canada trade pact in a meeting with U.S. Trade Representative Robert Lighthizer and House Ways and Means Committee chair Richard Neal.
1:11 p.m. ET: Bloomberg files to run for president as a Democrat
Billionaire Michael Bloomberg filed paperwork to run for U.S. president as a Democrat, AP reports.
12:59 p.m. ET: Senate passes stopgap spending bill, pushing back government shutdown
The U.S. Senate passed a temporary spending bill that will keep the government running through Dec. 20, AP reports.
12:46 p.m. ET: ‘Neurotic’ market will likely push S&P’s to 3,400+, BMO says
In new research, BMO Capital Markets laments how investors are being “controlled by rhetoric, fear, innuendo and momentum,” yet still believes the market’s “neurotic nature and dependence on negativity” won’t stop the S&P 500 from hitting new highs in the coming year.
The bank’s bull case sees a run as high as 3,675 — with a base case of 3,400 and a bearish view of 2,775.“We believe positive fundamental and macro forces remain in place [and] earnings growth appears to be approaching a trough,” BMO said.
And with that in mind:
“Despite manufacturing struggles, U.S. consumer remains strong and supports further economic growth. Corporate balance sheets remain in excellent shape. As such, we remain committed to our longer term secular bull market stance and would encourage investors to use any potential periods of market weakness as an opportunity to increase exposure to favored positions.”
In midday dealings, the index (^GSPC) traded modestly lower around 3,105.
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11:45 a.m. ET: Time to buy cyclical stocks again?
In a research note, veteran market watcher Jim Paulsen weighed in on whether it was time to buy cyclicals since recession fears have receded (for now). The best time to buy stocks that are sensitive to economic shifts is when fundamentals aren’t that great, he says, but:
“Often, the best time to tilt toward cyclicals is when fundamentals are questionable and, therefore, relative valuations are high.
Who knows if it is finally a good time to commit to cyclical stocks again? Four factors currently suggest the timing may prove profitable. Cyclical stocks have significantly underperformed since early 2018 (implying better relative valuations), their relative total return performance has matched the overall S&P 500 during the last year (i.e., they have been basing), pessimism about economic growth and imminent recession risk has been widespread this past year—leaving room for many to be pleasantly surprised by a potential economic revival, and finally, much more expansionary economic policies employed over the last twelve months has bolstered the prospects for cyclical companies in the coming months.
Investors should remain over-weighted in new-era growth stocks including the Technology and Communication sectors, but it may also now make sense to barbell this bet with a similar tilt toward cyclical sectors.”
11:30 a.m. ET: Facebook may revisit political ads policy: WSJ
The social network is mulling changes to its much-maligned political advertising policy, sources told The Wall Street Journal on Thursday. That may prevent campaigns from targeting small voter groups as part of an effort to curb misinformation.
Facebook (FB) has taken heat right, left and center ever since it declined to ban a Trump campaign ad that contained false content. On its earnings call, Facebook CEO Mark Zuckerberg launched into a rousing defense of why it wasn’t a good idea for the platform to moderate political content: “I view the role of this company as defending free expressions,” the CEO said, saying society needs to be “careful about adopting more and more rules that restrict what people can say. In a democracy, I don’t think it’s right for companies to censor politicians or the news.”
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11:03 a.m. ET: The broker wars enter a new phase: Mergers
Bank of America-Merrill Lynch, weighing in on reports of a possible Charles Schwab-TD Ameritrade marriage, say the deal could ratchet up pressure on the competition to make deals of their own. BofA analysts rote that “we expect merger discussions and activity to be active in the sector in the near term, benefitting the online broker stocks.”
The broker wars that ignited over the summer — with online retail investment firms falling over themselves to offer zero-commission trades — means new competitive pressures for the sector. BofA writes:
“We expect most firms in the sector, including ETFC, to be in merger discussions given the pressures on the business, this transaction, game theory, as well as the attractive synergies and accretion. Over time, if firms are left out, it could create some pressure on those stocks, and as the distribution platforms become larger, it could also create a bit more pressure for the asset management industry.”
TD-Ameritrade’s stock (AMTD) was up over 19% in mid-morning trade, while Schwab (SCHW) rallied by more than 8%.
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10:49 a.m. ET: WeWork is laying off thousands, CNBC reports
This Tuesday, Nov. 5, 2019, photo shows a WeWork office space in New York. WeWork said Friday, Nov. 8 it will divest from several side businesses and cut jobs as part of a 90-day plan to turn itself around following its botched attempt to sell stock on Wall Street. (AP Photo/Mark Lennihan)
The struggling office-sharing giant, trying to right its ship after the failure of its initial public offering, is laying off 2,400 employees, CNBC reported. The company confirmed the move in a statement, saying that the layoffs were made to “create a more efficient organization.”
The spokesperson added that:
“The process began weeks ago in regions around the world and continued this week in the U.S. This workforce reduction affects approximately 2,400 employees globally, who will receive severance, continued benefits, and other forms of assistance to aid in their career transition. These are incredibly talented professionals and we are grateful for the important roles they have played in building WeWork over the last decade.”
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10:35 a.m. ET: Sonos buys AI startup, but won’t challenge Alexa or Siri
Sonos (SONO) popped 6% in early trade after posting mixed quarterly earnings on Wednesday. The high-end speaker company also announced a nearly $38 million deal to buy Snips, an artificial intelligence solution.
CEO Patrick Spence told Yahoo Finance’s The First Trade the acquisition will bring the company new technology — but isn’t a move to create an Amazon Alexa like voice assistant.
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10:05 a.m. ET: Netflix down in worldwide outage
A bad day in the streaming wars, as Netflix (NFLX) suffers outages across the world. The company said via Twitter that it was working on the problem, but the stock was little changed in early U.S. trading near $306 per share.
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10:00 a.m. ET: Existing home sales beat expectations
U.S. home sales jumped in October while house prices rose at their fastest pace in more than two years, the National Association of Realtors said on Thursday. The housing market has been bolstered by low rates and fewer properties being up for sale. Existing home sales rose 1.9% to a seasonally-adjusted annual rate of 5.46 million units, but September’s number saw downward revisions to 5.36 million.
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9:55 a.m. ET: Exxon looking to exit chunks of EMEA assets
FILE – In this April 23, 2018, file photo, the logo for ExxonMobil appears above a trading post on the floor of the New York Stock Exchange. New York’s attorney general is accusing Exxon Mobil of lying to investors about how profitable the company will remain as governments impose stricter regulations to combat global warming. The lawsuit is set to go to trial Tuesday, Oct. 22, 2019. (AP Photo/Richard Drew, File)
Reuters reports that oil behemoth Exxon-Mobil (XOM) is looking to divest a hefty chunk of its European, Middle East and African oil and gas assets, in a sweeping deal worth $25 billion. The U.S. shale boom has been characterized by a decline in Big Oil’s influence, even as the U.S. has been catapulted to the top ranks of global oil producers.
The vast program follows growing pressure from investors on the U.S. giant to free up cash as it plans to expand its spending for new developments in Guyana, Mozambique, Papua New Guinea and the United States.
The Irving, Texas-based company has drawn up in recent months an extensive list of assets that spans at least 11 countries it wants to sell that will easily exceed its current $15 billion disposal target for 2021, according to the sources.
XOM’s stock jumped by over 1% in early U.S. trade, changing hands around $69.
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9:30 a.m. ET: Stocks flatline on US-China talks; TD Ameritrade and Schwab surge
Markets adrift, opening slightly lower as traders await new developments in the U.S.-China trade negotiations, and after jobless claims rise for the 2nd consecutive week.
Here’s where the major benchmarks opened the session:
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S&P 500 (^GSPC): -3.14 points, or -0.10%
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Dow (^DJI): -22.06 points, or flat
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Nasdaq (^IXIC): -12.05 points, or -0.13%
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10-year Treasury yield (^TNX): flat around 1.76%
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WTI crude oil prices: (CL=F): -0.35% to $55.91 per barrel
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Gold (GC=F): -0.27% at $1,470.30 per ounce
Separately, retail brokerage TD Ameritrade (AMTD) spiked by over 20% on a CNBC report that a buyout by competitor Charles Schwab (SCHW) was imminent. It’s the latest development in a retail investing sector being reshaped by rock-bottom fees dubbed “the broker wars” — and may suggest a wave of consolidation. Schwab’s shares surged at the open by over 10% to $49.10.
FILE – This May. 3, 2009 file photo shows an oil facility in Jubeil, about 600 kilometers (370 miles) from Riyadh, Saudi Arabia. Saudi Arabia formally started its long-anticipated initial public offering of its state-run oil giant Saudi Aramco on Sunday, which will see a sliver of the firm offered on a local stock exchange in hopes of raising billions of dollars for the kingdom. (AP Photo/Hassan Ammar, File)
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9:06 a.m. ET: Saudi Aramco deal nabs institutional investors
According to a Reuters report that cites Al-Arabiya, the institutional tranche of Saudi Aramco’s initial public offering (IPO) has received more than 64 billion riyals ($17.1 billion) in orders. A banking source told the Saudi outlet that the retail portion of the planned deal had received 10 billion riyals.
Reuters’ own sources say Aramco is meeting with more investors in Dubai next week, and hopes to obtain nearly $26 billion in commitments.
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