Wall Street Breakfast: Surge In Coronavirus Cases Derails Stock Rally

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Mobile World Congress is officially canceled

With swaths of individual companies pulling out of the exhibition over the past week, the GSMA telecoms association that hosts the get-together has called off the Feb. 24-27 event. Fears over the coronavirus outbreak were to blame despite assurances from local and national health officials that it would have been safe to hold it. The Mobile World Congress draws more than 100,000 visitors to Barcelona and is known as the year’s biggest event for the telecom industry.

Fresh tensions over Sprint takeover terms

Just when it looked like the deal was done, the merger of Sprint (NYSE:S) and T-Mobile (NASDAQ:TMUS) is again in question. Deutsche Telekom (OTCQX:DTEGY), the parent company of T-Mobile U.S., is pressing to renegotiate the terms of the takeover, as the shares and performance of Sprint have deteriorated since the deal was announced, sources told the FT. The move is opposed by Sprint’s controlling shareholder, SoftBank (OTCPK:SFTBY) of Japan, according to people close to its chairman Masayoshi Son. S -5.8% premarket.
Go deeper: Sprint investors should get out of the stock now, writes Stone Fox Capital.

Senate banking panel questions Fed nominees

The latest nominees to the Federal Reserve will face a crucial test at a Senate grilling today after the past two picks, economist Stephen Moore and Herman Cain, were rejected. Christopher Waller, director of research at the St. Louis Fed, is expected to easily pass muster, though lawmakers will closely examine the views of Judy Shelton, an adviser to the Trump campaign in 2016. She has a long history of unorthodox economic commentary, like questioning the basic role of the Fed, calling for near-zero interest rates and advocating for pegging the dollar to the gold standard.

More red ink in Washington

Fresh data from the Treasury Department showed the federal government post a budget deficit of $389.2B in the first four months of fiscal 2020. That’s a 25% gain over the same period last year and already about 40% of the total deficit for fiscal 2019. Tax receipts are actually on the rise comparatively, but the rate of federal outlays is adding to the shortfall, bringing the total national debt to $23.3T.

Euro hits weakest level since 2017

Worries about the European economy emerged on Wednesday as the euro fell to its weakest level against the dollar since 2017, dropping as much as 0.4% to $1.0877. On top of a weakened economy, impacts from the coronavirus are likely to send Germany into recession, while Deutsche Bank (NYSE:DB) expects to post a contraction in the fourth quarter. Also weighing on sentiment is a lingering succession battle at the top of the German government, a slump in eurozone industrial output and fears about the financial health of Italy.
Go deeper: ‘The Euro Currency Sits And Waits’ by Andrew Hecht.

Barclays CEO probed over Epstein ties

Britain’s financial regulators are probing historical links between Barclays (NYSE:BCS) CEO Jes Staley and Jeffrey Epstein, the disgraced financier who died in jail last year while awaiting trial on sex trafficking charges. The NYT previously said that Epstein had referred “dozens” of wealthy clients to Staley when he ran JPMorgan’s (NYSE:JPM) private banking business, while Staley visited Epstein in prison when he was serving a sentence between 2008-09 for soliciting prostitution. The news came as Barclays released annual results: Profit before tax rose 26% Y/Y to £4.4B in 2019, though a cautious outlook was given for the year ahead.

Google finalizes $2.6B purchase of Looker

Winning clearance from the U.K.’s competition watchdog, Google (GOOG, GOOGL) has completed its buyout of Big Data analytics firm Looker Data Sciences. The regulator said the acquisition was unlikely to lead to increased prices or lower quality, as the two are not considered close competitors by companies who use business intelligence tools. Looker was the first major acquisition for Google’s new cloud business CEO Thomas Kurian, and it aims to build upon the success of Google Cloud’s BigQuery, a tool for managing large datasets.

Airbus puts squeeze on Boeing

Airbus (OTCPK:EADSY) is raising its stake in Bombardier’s (OTCQX:BDRAF, OTCQX:BDRBF) A220 passenger jet program to 75% (Quebec will own the rest), marking the Canadian company’s exit from commercial aviation as it seeks to improve its financial position. The deal will bolster Airbus’s advantage in the narrow-body market, where Boeing’s 737 MAX is grounded. Airbus aims to deliver about 880 jets this year, up from a record 863 in 2019, and achieving that figure could propel its share price (the French planemaker’s stock rose 55% last year vs. Boeing’s 1% advance).

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