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China’s Vaccine, TikTok, Pakistan Stock Exchange: Your Tuesday Briefing


Jessica Bennett, who covers gender and culture for The Times, spoke with Zee, Tiana Day, Shayla Turner and Brianna Chandler — four teenage girls who organized a protest and are part of the young generation at the forefront of activism for racial justice.

Zee and Tiana, neither of you had ever led a protest before. What propelled you?

Zee: It’s crazy. I’ve never been to a protest before — like, ever. I got inspired by what people were doing all across America, but there was no protest in Nashville at the time. I was like, why isn’t Tennessee doing anything? Why are they silent?

So I was like, enough is enough. We’re going to do something.

Tiana: For me, I was never really an activist before. But this movement lit a fire in me. I live in San Ramon, a suburban town in California, and I’ve grown up around people who didn’t look like me my whole life. And I’ve been constantly trying to fit in. I would stay out of the sun so I wouldn’t tan. I would straighten my hair every day. There’s so many things that I did to try to suppress who I was and what my culture was. I just never felt like myself.

But I have always had this, like, boiling thing, this boiling passion in my body to want to make a change in the world. We bought three cases of water because we thought it was enough. It was, like, four miles straight of people who were there to support the movement.

How have your families responded?

Shayla: My mom actually found out I was protesting through the newspaper. She was in Walgreens and did a double take because I was on the cover of the The Chicago Tribune.

What’s something about your generation that people get wrong?

Brianna: That our anger is not valid, that we don’t have a reason to be angry, that we don’t have a reason to riot. You know, there is that super popular Malcolm X quote: “The most disrespected person in America is the black woman.”


That’s it for this briefing. See you next time.

— Melina


Thank you
To Theodore Kim and Jahaan Singh for the rest of the break from the news. You can reach the team at briefing@nytimes.com.

P.S.
• We’re listening to “The Daily.” Our latest episode is about proposals to defund the police, with a conversation with a police union leader.
• Here’s our Mini Crossword, and a clue: Something built at a campsite (four letters). You can find all our puzzles here.
• The writer Kevin Powell discussed his New York Times essay “A Letter From Father to Child” on NPR’s Morning Edition.



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Richard Burr: Senate Intel chairman asks Ethics Committee to review stock sales under scrutiny



Burr’s stock sales have come under fire after he sold them off just days before the market began a downturn as a result of the coronavirus outbreak shutting down businesses and travel in the US and across the world.

Burr said Friday that he did not base his sales on any information he received as chairman of the Intelligence Committee.

“I relied solely on public news reports to guide my decision regarding the sale of stocks on February 13,” Burr said in a statement. “Specifically, I closely followed CNBC’s daily health and science reporting out of its Asia bureaus at the time. Understanding the assumption many could make in hindsight however, I spoke this morning with the chairman of the Senate Ethics Committee and asked him to open a complete review of the matter with full transparency.”

Burr’s committee has received periodic briefings on coronavirus as the outbreak has spread, but the committee did not receive briefings on the virus the week of Burr’s stock sales, according to a source familiar with the matter.

A week before his stock sell-off, Burr authored an op-ed with GOP Sen. Lamar Alexander of Tennessee titled, “Coronavirus prevention steps the U.S. government is taking to protect you” in which the senators wrote the US was “better prepared than ever before to face emerging public health threats, like the coronavirus.” Burr has also worked on legislation aiding US preparations for pandemics for years.

There’s no indication that what Burr did violated the law or Senate rules. But the stock sales are being scrutinized because the sell-off helped Burr avoid the fate many Americans are staring down as their investments are dwindling in the sinking markets. The sales are notable in particular because they represented a large share of Burr’s stock portfolio, between 25% and 75%, based on his 2018 financial disclosure filing, according to the Center for Responsive Politics.

On February 13, Burr and his wife sold between $628,000 and $1.7 million in stock in 33 transactions, according to Senate financial disclosure records. Burr and his spouse also sold between $80,000 and $200,000 of stock on January 31, and purchased between $16,000 and $65,000 of stock on February 4. The majority of the sales were from Burr’s wife, the records show, between $520,000 and $1.2 million.

Burr’s sales included stocks in the hospitality industry, which has been hit particularly hard by the coronavirus outbreak. Burr and his wife sold between $65,000-$150,000 in stocks of Extended Stay America, $65,000-$150,000 in Wyndham Hotels and Resorts and $16,000-$65,000 in Park Hotels and Resorts.

The stock sale was first reported by ProPublica and the Center for Responsive Politics.

“Senator Burr filed a financial disclosure form for personal transactions made several weeks before the U.S. and financial markets showed signs of volatility due to the growing coronavirus outbreak,” a Burr spokesperson said in a statement. “As the situation continues to evolve daily, he has been deeply concerned by the steep and sudden toll this pandemic is taking on our economy.”

Two weeks after the sales, the North Carolina Republican sounded a blunt warning in February about the dire impact of the novel coronavirus during a private event in Washington, according to audio obtained by NPR, which contrasted with President Donald Trump’s public statements at the time that suggested the virus would disappear.

There’s no indication that the stock sales were made on the basis of any inside information Burr received as a senator, or that he broke any Senate rules by selling the stock. Congress passed the Stock Act in 2012 that made it illegal for lawmakers to use inside information for financial benefit. Burr was one of three senators to vote against the bill.

Other senators also sold stocks

Several other senators from both parties also sold and bought stock over the past several weeks as the economic downturn approached and they received briefings on the outbreak.

GOP Sen. Kelly Loeffler of Georgia and her husband sold 27 stocks valued between $1.275 million and $3.1 million from January 24 through February 14, according to Senate records. They also purchased three stocks at a value of $450,000-$1 million, including shares in Citrix, a software company that’s gained in value since last month.

Loeffler, who was appointed to her seat in December, denied having any knowledge of the stock sales, saying she uses a third-party financial adviser and did not learn of the trades until later. Loeffler’s husband, Jeffrey Sprecher, is chairman of the New York Stock Exchange.

“I am not involved in the decisions around buying and selling,” she said in a Fox News interview Friday. “There are a range of different decisions made every day that I am not involved in… I have adhered to the letter and the spirit of these rules.”

Exact amounts of lawmakers’ holdings in the stocks are unknown because they are only required to report the sales as a range.

On February 13, as the coronavirus was spreading, it had yet to hit the US in a manner that’s sent the markets into a tailspin and sparked warnings of a recession. That day, the Dow Jones Industrial Average opened at 29,436. Ten days later, it began a downturn that’s sent the average down to 20,087, a loss of more than 31%.

The average loss in the value of the stocks Burr sold from February 13 until Thursday has been about 39%, according to a CNN analysis.

Global cases of coronavirus had topped 65,000 on February 13, the vast majority of which were still inside China. At that point, there were a reported 570 cases in 25 countries outside of China. The global death toll was nearly 1,500, all but three of which had occurred in China.

Burr sounded blunt warning at private talk

Two weeks later, the virus was spreading, but the President was downplaying the threat and predicting it would not have a large impact in the US.

“It’s going to disappear. One day it’s like a miracle, it will disappear,” Trump said on February 27. “And from our shores, you know, it could get worse before it gets better. It could maybe go away. We’ll see what happens. Nobody really knows.”

A day earlier, Trump predicted the number of cases in the US could quickly drop to zero.

“When you have 15 people, and the 15 within a couple of days is going to be down to close to zero, that’s a pretty good job we’ve done,” Trump said on February 26.

Burr had a different message when he spoke the same day Trump said the virus would disappear to a private North Carolina state society event. In the speech at the Capitol Hill Club in Washington, a private GOP social club, Burr warned attendees they might have to alter their travel, schools could close and the military would get involved in the response inside the US, according to audio of his remarks obtained by NPR.

“There’s one thing that I can tell you about this: It is much more aggressive in its transmission than anything that we have seen in recent history,” Burr said, according to the recording obtained by NPR. “It is probably more akin to the 1918 pandemic.”

Burr continued: “There will be, I’m sure, times that communities, probably some in North Carolina, have a transmission rate where they say, ‘Let’s close schools for two weeks. Everybody stay home,'” he said.

Burr responded to NPR’s story in a series of tweets taking issue with the characterization of the event as being for donors. “Attendees also included many non-members, bipartisan congressional staff, and representatives from the governor’s office,” he said on Twitter. Burr said that the message he delivered at the speech “is the one public health officials urged all of us to heed as coronavirus spread increased: Be prepared.”

Burr and his committee have been briefed on the coronavirus outbreak as it has spread, but Burr’s February warnings were based primarily on his experience working on public health preparedness and pandemics, as well as the warnings already coming from public health officials, according to two sources.

Vice President Mike Pence had just been tapped to lead the coronavirus task force, there had been increased warnings about the outbreak in Italy and travel restrictions in China had already been in place for weeks.

Burr is also an author of the Pandemic and All-Hazards Preparedness Act, which was first enacted in 2006 and was renewed last year.

Publicly, Burr did not issue such dire warnings about the coming impact to the US due to the coronavirus outbreak, though he did talk about the need for the government to respond to the virus. Burr wrote the op-ed with Alexander on February 7 outlining the steps the US government had available to combat coronavirus. At a March 3 Senate hearing, Burr questioned Centers for Disease Control and Prevention officials on the issues with producing tests for coronavirus.

“Senator Burr has been banging the drum about the importance of public health preparedness for more than 20 years. His message has always been, and continues to be, that we must be prepared to protect American lives in the event of a pandemic or bio-attack,” Burr spokeswoman Caitlin Carroll said in a statement when asked about the NPR recording. “Since early February, whether in constituent meetings or open hearings, he has worked to educate the public about the tools and resources our government has to confront the spread of coronavirus. At the same time, he has urged public officials to fully utilize every tool at their disposal in this effort.”

Liberal groups called on Burr to be investigated and resign Thursday after the stock sales were revealed, and even conservative Fox News host Tucker Carlson called for Burr’s resignation.

This story has been updated to include additional developments Friday.





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MacKenzie Bezos dumped a ton of Amazon stock


Bezos received about 19.7 million shares of Amazon (AMZN), equal to 4% of Amazon’s total shares outstanding, under her divorce agreement last year with Amazon CEO Jeff Bezos. The shares were worth about $35.8 billion at the time of the divorce filing.

Jeff Bezos retained the voting rights for those shares as part of the agreement. That’s why he is required to disclose his ex-wife’s shares when disclosing his roughly 16% voting stake in the company.

The number of shares MacKenzie Bezos owns dropped by about 200,000 shares, according to Jeff Bezos’ most recent regulatory filing. That sale represented just over 1% of her Amazon holdings.

It’s not clear if she sold the shares to receive the proceeds, to diversify her holdings, or if she donated them to a charity. MacKenzie Bezos signed the Giving Pledge, an initiative created by Warren Buffett and Bill and Melinda Gates in 2010 to encourage billionaires to donate a majority of their wealth to charitable causes, either during their lifetimes or in their wills.
Jeff Bezos, one of the world’s richest people even after the divorce settlement, regularly donates some of his Amazon shares to not-for-profit organizations. But he has yet to sign the Giving Pledge.

The date that MacKenzie Bezos got rid of her shares was not disclosed and could have occurred any time since the divorce. The price at the time of the disposal is also not known. At current prices, the shares she sold would be worth about $370 million.



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These were the 5 biggest days for the stock market this year



Anxiety about deteriorating trade relations also showed up in economic data this year, which led the Federal Reserve to cut interest rates three times this year to boost the economy.

All this left its mark on the stock market.

Stocks peaked early in 2019. The biggest rally happened on just the fourth trading day of the year, when the S&P 500 (SPX) jumped 3.4%. The Dow (INDU) also recorded its biggest jump of the year that day, rallying nearly 750 points, or 3.3%.

Three factors sparked the rally that day: The jobs report for December came in better than expected, China took action to stimulate its slowing economy, and Federal Reserve Chairman Jerome Powell said the central bank was flexible regarding futures interest rate hikes. The Fed raised rates nine times between 2015 and 2018, but lower rates are better for stocks.

The Fed’s December 2018 rate increase would be its last for at least a year.

The boost at the start of the year gave stocks a head start to rally to their best January in 30 years. The S&P 500 and the Dow climbed more than 7% on the month, marking their best performance since the late 1980s.

May 10: Trade fears take hold

May marked the month when trade worries became very real for investors. US hiked import tariffs on $200 billion worth of Chinese goods to 25% at the beginning of the month, and China threatened to retaliate.
Stocks swung wildly on May 10, starting the day lower but retraced their losses after Treasury Secretary Steven Mnuchin and Trump called the trade talks with China “constructive.” Nevertheless, it was one of the worst weeks for US equities of the year.

June 4: Fed in shining armor

Stocks logged their second-best day of the year on June 4, as Fed Chairman Powell hinted that an interest rate cut could be coming. As the escalating trade war began to weigh on the economic outlook, Powell said the central bank would “act as appropriate to sustain the expansion.”
The Fed cut rates for the first time since the financial crisis at the end of July and would go on to lower rates twice more in 2019.

August 23: Trade whiplash

August was all about the trade war as the rhetoric between Beijing and Washington grew harsher. Stocks logged their biggest swing of the year on August 23, because of a sell-off driven by Trump’s response to China’s retaliatory tariffs on American imports, including oil.

In one of his tweets, the president wrote “we don’t need China and, frankly, would be far better off without them.”

Stocks slumped, oil prices dropped more than 2% and the US Treasury yield curve inverted, so that 2-year bonds yielded more than 10-year bonds. Historically, an inverted yield curve has signaled a recession.

Although recession fears abated toward the end of the year, the tariff tit for tat and yield curve inversion sparked concerns about the health of the US economy going into 2020.

December 13: Phase one

After a year of trade-related turbulence, China and the United States confirmed they reached a “phase one” trade agreement on December 13, which avoided further escalation of tariffs.

The countries had initially reached a preliminary deal in mid-October, but it never got signed and tensions flared up again in the following weeks.
But stocks December 13 ended more or less flat. Over the year, investors have grown weary of the carrot and stock approach to trade negotiations. Many believe that unless pen hits paper, a trade agreement is not worth very much.

But even with the choppy trading days of 2019, stocks logged strong gains this year, allowing them to soar to all-time highs again. On December 13, for example, the Dow and the S&P 500 set a new record closing high even though the excitement about the preliminary trade deal was limited.



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U.S. judge encourages PG&E deal with California wildfire victims; stock jumps


WILMINGTON, Del (Reuters) – Utility PG&E Corp’s $13.5 billion settlement with victims of California wildfires got some encouraging words from a U.S. bankruptcy judge on Tuesday, and the company’s stock rallied as it gained momentum to emerge from bankruptcy in June as planned.

FILE PHOTO: Employees of Pacific Gas & Electric (PG&E) work in the aftermath of the Camp Fire in Paradise, California, U.S., November 14, 2018. REUTERS/Terray Sylvester/File Photo

“Not really anyone is saying this is a bad economic resolution,” U.S. Bankruptcy Judge Dennis Montali said at Tuesday’s hearing in San Francisco, noting a dearth of strong objections.

Adding momentum to PG&E’s plan, a lawyer for Governor Gavin Newsom told Montali the governor viewed the wildfire settlement as fair. “We don’t want to stand in the way of that,” said Nancy Mitchell.

Only days earlier, on Friday, Newsom rejected the PG&E reorganization plan and said he expected a new board of directors and stronger finances so it could invest in safer equipment.

Mitchell said the necessary changes to the plan could be negotiated, although she called the governor’s demands a “high bar.”

The settlement would give the company the support of every major group of creditors, making it much harder for opponents like PG&E bondholders to block its plan to exit bankruptcy.

Montali took a break in the proceedings and planned to address later in the day a request by PG&E to dismiss a competing plan that had been proposed by the company’s bondholders.

PG&E’s stock jumped about 13% to $10.91 a share and regaining nearly all the ground lost after Newsom’s rejection of the company’s bankruptcy plan.

The company needs approval from Newsom and the bankruptcy court for its plan by June 30 to participate in a recently enacted wildfire fund, known as AB 1054, that reduces fire liability for investor-owned utilities.

The settlement agreement with wildfire victims forms the cornerstone of PG&E’s plan to exit bankruptcy. The company entered Chapter 11 protection from creditors in January facing thousands of legal claims from at least 22 fires, with victims seeking $36 billion.

Newsom has accused the company of putting profits ahead of maintenance of its power lines and of poorly managing the widespread blackouts PG&E used to avoid sparking wildfires during high winds.

Bondholders have been pushing a reorganization plan that they say is more favorable to wildfire victims, but the plan would essentially wipe out the investment of current shareholders.

Reporting by Tom Hals in Wilmington, Delaware; Editing by David Gregorio



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Peloton plunges after investor says the stock is worth only $5



Citron said in the report, titled “Investors Peddling Themselves into Frenzy,” that Peloton (PTON) is reminiscent of GoPro (GPRO) and Fitbit (FIT).

Those two companies were once market leaders in their respective categories of wearable action cameras and fitness trackers. But an onslaught of competition hurt their sales and profits and proved that they were just one-trick ponies.

Fitbit is now in the process of selling itself to Google (GOOGL) for about $2.1 billion, or $7.35 a share. That’s about 85% below the stock’s peak price in August 2015, shortly after its initial public offering.

Citron said when you dig deeper into Peloton’s business model, there is nothing that stands out and makes them unique enough to be immune from competitive threats.

“Once you get past management’s grandiose talks, you have a company that sells hardware and software,” Citron said.

Shares of Peloton plunged more than 6% Tuesday to about $32. But that’s still above the company’s initial public offering price of $29 from September — not to mention Citron’s dour price target.

Citron said that “while Peloton has enjoyed a first mover advantage, the lack of differentiation of its bike has finally caught up to it as the competition is not only making virtually identical exercise bikes but ones that are both more affordable and functional.”

The company said there will be no reason to spend $2300 on a bike (not to mention the subscription for classes) when there are cheaper and similar versions from the likes of NordicTrack, ProForm, Echelon, Bowflex and others.

“Competition is so intense that some competitors are even offering to give the exercise bike for free with a digital subscription. Citron believes Peloton’s glory days of hardware sales are in the rear-view mirror,” Citron said.

Peloton was not immediately available for comment about the Citron report. But management has defended its latest ad, saying that it was not sexist as many have claimed.

CEO and founder John Foley also said at a UBS investment conference this week that Peloton expects to generate even more revenue when it starts selling a treadmill.

Foley said that rivals are selling “dopey old treadmills” that wind up becoming nothing more than a “clothes hanger” that’s “dusty.” Exercise enthusiasts, Foley claims, will want Peloton equipment because of all the added services that come with it.

But Citron said that Peloton’s valuation is “ridiculous” when you compare it to just about any other company that has a subscription-based revenue model. That includes gym owner Planet Fitness (PLNT), dating service Match (MTCH) and clothing company Stitch Fix (SFIX) as well as media companies like Facebook (FB), Netflix (NFLX), Roku (ROKU) and Spotify (SPOT).

Citron concluded its report by saying “there are more things wrong” with Foley’s comments than “the now infamous commercial” and added that his “remarks are filled with hubris” and “ludicrous.”



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Responding to climate change could wipe billions of stock valuations



That’s according to a new report from Principles for Responsible Investment that examines how “inevitable” policies such as banning internal combustion engines will affect stock prices.

The analysis concludes that up to $2.3 trillion, or 4.5%, could be wiped off the value of companies listed on a global stock index from MSCI. The report was prepared by Vivid Economics and Energy Transition Advisers.

But there are also opportunities for investors. Companies that adapt to changing policies would see their combined share prices increase by hundreds of billions of dollars, according to the UN-backed group.

Principles for Responsible Investment is supported by nearly 2,600 asset owners and investors that have a combined $86 trillion of assets under management.

Investors from around the world are putting more pressure on companies over climate change, asking them to be more transparent about the risks to their business from extreme and changing weather.

Many climate change experts have gathered this week in Madrid to attend the COP25 conference. UN Secretary General Antonio Guterres said Sunday that the summit marks the “point of no return” on climate.

The report from Principles for Responsible Investment looks at how valuations would be affected if climate policies changed by 2025. However, policies could change at any time, the authors warn.

The energy sector is expected to be hit the hardest by the shift, followed by autos and utilities.

The changing policy landscape will be driven by bans on internal combustion engines that are expected by 2035, as well as carbon pricing and the phasing out of coal.

The report assumes more power generation from low carbon sources, including nuclear energy.

Energy companies stand to shed nearly 33% off their value, according to the report, with the 10 largest oil and gas producers losing $500 billion of their combined market caps.

Within the energy sector, upstream businesses, which are focused on finding and extracting fossil fuels, will bear the brunt of the pain.

When it comes to mining companies, the value of coal producers could be nearly halved.

New opportunities

Carmakers that shift to electric vehicles and utilities with a strategy for greener alternatives could more then double their valuations, according to Fiona Reynolds, CEO of the Principles for Responsible Investment.

Similarly, producers of solar and wind energy equipment will also likely go up in value as demand increases.

The report suggests that investors should have a good look at how their portfolios might respond to abrupt changes in public policy, and shift into greener assets.

“Investors should anticipate significant and potentially volatile ‘climate transition’ repricing in some parts of the economy and markets,” said Jane Ambachtsheer, global head of sustainability at BNP Paribas Asset Management.



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Alibaba stock pops 7% in Hong Kong debut — Asian market latest


Shares were last trading at 188.10 Hong Kong dollars ($24.03), higher than the 176 Hong Kong dollars ($22.50) they were priced at. The company’s secondary listing could raise as much as $12.9 billion, making it the largest public offering so far this year.

Alibaba trades under the stock code 9988 in Hong Kong. Nine and eight are considered to be lucky numbers in the Chinese culture, indicating long-lasting prosperity.

There’s been a lot of enthusiasm for the company’s arrival on the Hong Kong market. The offering has overperformed — a vote of confidence in Hong Kong, the Asian financial hub that has grappled with months of protests.
The listing also affords Alibaba the ability to impress Beijing in a big way. It’s a symbolic homecoming for a company that made its initial public trading debut in New York but is one of China’s technological crown jewels.
“We have come home,” Alibaba said Tuesday morning on its official account on Weibo, the Chinese equivalent of Twitter. The Weibo announcement also featured cartoon representations of the many animal mascots that Alibaba uses to represent its businesses — such as Tmall’s black cat and and Ant Financial’s ant.

“Five years ago, we said, if conditions permit, we will for sure return,” said Daniel Zhang, chairman and chief executive officer of Alibaba Group, at Tuesday’s listing ceremony. While Hong Kong was Alibaba’s initial choice when it first wanted to tap the public market, the company chose New York because of a disagreement over alibaba’s shareholding structure.

Thanks to “capital market reform,” Zhang said, “we can make up for the regret five years ago when we missed Hong Kong.”

Hong Kong’s benchmark Hang Seng Index (HSI) opened 0.7% higher. It then reversed the gains and traded down 0.1%.
And Hong Kong Exchanges & Clearing (HKXCF), the city’s sole exchange operator, was up as much as 1.8%. But it also erased early gains and dropped 0.5% in late morning trade. Chinese internet giant Tencent (TCEHY) — Alibaba’s biggest domestic rival — fell 0.5%.
Alibaba’s (BABA) US-listed shares closed up nearly 2% Monday on the New York Stock Exchange. Its IPO there in 2014 raised $25 billion and shattered records as the largest in history. (Saudi Aramco could soon surpass it.)
Elsewhere in the region, South Korea’s Kospi index (KOSPI) added 0.5%, while Japan’s Nikkei 225 (N225) rose 0.3%. China’s Shanghai Composite (COMP) opened higher, but traded nearly flat around noon.
Investors may be looking out for more developments on US-China trade talks. China’s top trade negotiator Liu He had a phone talk with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Tuesday morning, according to a statement by China’s Ministry of Commerce.

Both sides “reached a consensus” on how to resolve each other’s key concerns, the statement said.

They also agreed to maintain contact about a phase one deal.

US futures moved slightly higher during Asian trading hours Tuesday. The Dow (INDU), S&P 500 (SPX) and Nasdaq (COMP) were all up 0.1%.

CNN’s Sherrise Pham and Steven Jiang contributed to the report.



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Premarket stocks: The case for more stock market records



Just three months ago, the escalating US-China trade war and a troubling signal in the US bond market induced a global panic, sparking a selloff in stocks and, for the first time in a decade, resurfacing the dreaded r-word: recession.

Now, investors around the world are shrugging off their concerns. Sentiment is improving — allowing markets to continue pushing higher and higher. US stock indexes hit all-time highs again on Friday, with the Dow climbing above 28,000 points for the first time in history.

See here: “Recession concerns vanish” was the takeaway from Bank of America Merrill Lynch’s most recent survey of fund managers. Expectations for global growth in the next 12 months had their biggest leap ever between the October and November.

Investors are sitting on less cash while boosting their exposure to global stocks, Bank of America notes. Michael Hartnett, the chief investment strategist, describes what’s happening as FOMO, or “fear of missing out.”

Case in point: One month ago, CNN Business’ Fear and Greed Index had a “neutral” reading. Now it’s pulling up “extreme greed.”

But a jump in FOMO doesn’t mean the risks that investors had been worried about have evaporated. Capital Economics on Friday outlined four reasons to stay alert:

  1. The recent truce between the United States and China could reverse.
  2. The Fed might not fulfill investors’ expectations of more easing in 2020.
  3. The US economy could head south.
  4. The US election could gin up a surprise.

The trade situation is particularly precarious. Moody’s pointed out in its recent two-year outlook that it’s not clear an agreement can be reached to roll back existing tariffs, which are weighing on growth. Plus, tech restrictions on Chinese companies like Huawei are likely to remain in place regardless, “perpetuating an ongoing source of friction.”

Brexit uncertainty will also drag into next year, the ratings agency observed. Germany and the United Kingdom both dodged a recession in the third quarter, but they’re not out of danger yet.

For now, though, traders don’t want to be left on the sidelines.

The view taking hold: “We see no economic reason for a recession in the advanced world in the next two years,” Berenberg economists said in a note to clients Friday, noting that economic and financial indicators are “flashing amber instead of red.”

“Unless political risks begin to mount again, trade and manufacturing should recover gradually over the course of 2020.”

Retailers show their cards ahead of the holidays

Here’s a dispatch from my CNN Business colleague Nathaniel Meyersohn on the retail beat:

Top retailers deliver will third quarter earnings this week. Wall Street will be watching closely for clues about US consumers and the health of the battered retail sector heading into the holiday shopping stretch.

Among the big names reporting results: Target, Kohl’s, Macy’s, Nordstrom, Home Depot, Lowe’s, Gap and Victoria’s Secret parent L Brands.

Target has been one of the hottest stocks of 2019, surging close to 70%. But department stores and legacy brands such Gap have weakened. Macy’s shares have lost nearly 45% this year.

Walmart (WMT) on Thursday set a high bar for its rivals. Walmart’s sales at stores open at least a year grew 3.2% last quarter, including a 41% rise in online sales.

“We’re prepared for a good holiday season,” Walmart CEO Doug McMillon said.

Up next

Monday: US international Treasury purchase data

Tuesday: US housing starts and building permits; Home Depot (HD), Kohl’s (KSS), TJX (TJX) and Urban Outfitters (URBN) earnings
Wednesday: Fed minutes; Lowe’s (LOW), Target (TGT) and L Brands (LB) earnings
Thursday: US existing home sales; Macy’s (M), Gap (GPS), Nordstrom (JWN), Ross Stores (ROST), Williams-Sonoma (WSM) earnings
Friday: German manufacturing data; University of Michigan consumer sentiment survey; Foot Locker (FL) and J.M. Smucker (SJM) earnings



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SoftBank stock falls after terrible earnings report — Asian market latest


Japan’s broader Nikkei (N225) was mostly flat in afternoon trade. South Korea’s Kospi Index (KOSPI) declined 0.1%.
Hong Kong’s Hang Seng Index (HSI) edged down 0.4%, while China’s Shanghai Composite (SHCOMP) fell 0.2%.
SoftBank (SFTBF) reported operating losses of $6.5 billion after market close on Wednesday, weighed down by a massive hit to its tech fund. The Vision Fund has been hit by big losses in portfolio companies such as Uber (UBER) and WeWork.

The stock recovered some of its losses by mid-morning Thursday and was last trading down about 2.5%.

SoftBank founder and CEO Masayoshi Son admitted he turned a “blind eye” to governance problems at WeWork, and said he learned a “harsh lesson” from the office sharing company’s botched IPO attempt.

Bernstein analyst Chris Lane said in a research note Wednesday that Son’s rescue package of WeWork “will vastly improve the return profile.” He predicts that with better corporate governance and cost controls, WeWork “will turn cash flow positive in [about] 18 months.”

Toyota (TM), meanwhile, rose 0.9% in Tokyo after the company reported strong profits. The carmaker reported net profit of 1.27 trillion yen ($11.7 billion) for the first half of the year, a 2.6% increase over the same period last year.
In Hong Kong, shares in Hong Kong Exchanges and Clearing (HKXCF) fell 0.5%.
The company, which operates the Hong Kong Stock Exchange, reported net profits of 2.2 billion Hong Kong dollars ($280 million) for the third quarter, slightly lower than market expectations. The exchange abandoned a bold, $37 billion bid to buy London’s Stock Exchange last month.



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