Following last night’s heated presidential debate, S&P 500 futures are sinking 0.6% this morning, with Dow futures also down 0.7% and futures tied to the tech-heavy Nasdaq index down 0.7%. Investors are concerned about further volatility leading up to the election; and the debate did nothing to allay fears of a contested election result.
In the headlines: the U.S. Department of the Treasury has closed loans to seven large passenger air carriers (Alaska Airlines, American Airlines, Frontier Airlines, JetBlue Airways, Hawaiian Airlines, SkyWest Airlines, and United Airlines). The reallocation of funds will be subject to a loan concentration limit of $7.5 billion per passenger air carrier, or 30% of the $25 billion available for passenger air carriers.
“The payroll support and loan programs created by the CARES Act have saved a large number of aviation industry jobs, and kept workers employed and connected to their healthcare, during an unprecedented time,” said Secretary Steven T. Mnuchin.
Positive news is also out this morning from Moderna. An early safety study of MRNA’s Covid-19 vaccine candidate, mRNA-1273, in older patients demonstrated similar binding- and neutralizing-antibody responses to those previously reported among vaccine recipients aged between 18-55. The vaccine elicited a strong CD4 cytokine response involving type 1 helper T cells, said the researchers. What’s more, adverse events associated with the mRNA-1273 vaccine were mainly mild or moderate. Shares are now up 4% in early morning trading.
However Micron is sinking 4% after the memory chip maker issued November quarter guidance that fell short of analysts’ expectations ($5.2B vs. consensus of $5.3B). MU cited: 1) loss of Huawei, 10% of revenues, due to U.S. restrictions, 2) GM impacted near-term with 1st-gen RG NAND ramp and higher NAND mix, and 3) weaker enterprise with higher inventory levels and pricing trends. Mizuho’s Vijay Rakesh is staying positive. He trimmed his price target from $58 to $56 but told investors: “Reiterate Buy as we believe underlying fundamentals position MU well.”
This morning Shell revealed that job reductions of 7,000 to 9,000 are expected (including around 1,500 people who have agreed to take voluntary redundancy this year) by the end of 2022.”We have to be a simpler, more streamlined, more competitive organization,” CEO Ben van Beurden stated. “We feel that, in many places, we have too many layers in the company: too many levels between me, as the CEO, and the operators and technicians at our locations.”
For the third quarter, Shell now expects production of between 2,150 and 2,250 thousand barrels of oil equivalent per day, which includes a production impact of 60 to 70 thousand barrels of oil equivalent per day from hurricanes in the US Gulf of Mexico.
Deal or no deal: NextEra Energy tried to buy peer Duke Energy Corp., but its advances were rebuffed, the Wall Street Journal reported on Tuesday. According to the report, NextEra Energy is “testing the waters for what would be a $60 billion-plus combination of two Southern utilities.” Shares of Duke Energy are now surging 6.8% amid the ongoing deal speculation.
Meanwhile the $2 billion deal between GM and Nikola which was set to close before today is still under discussion, after allegations of fraud and sexual abuse surfaced against the embattled start-up’s founder and former executive chairman, Trevor Milton, says CNBC citing two people familiar with the negotiations. The deal deadline is currently set at December 3. Both stocks are trading slightly higher this morning, with Nikola up 2.3% in pre-market trading.
And last but not least, Verizon has been secretly trying to unload HuffPost as losses at the news and culture website mount, according to a report from The New York Post. “This thing loses so much money,” a digital media executive with knowledge of the financials said. “It’s such a mess, I wouldn’t touch it with a 10-foot pole. I don’t think there’s any way you can make money.” Verizon snapped up HuffPost for $4.4 billion from AOL back in 2015.
