Plus, the U.K. supreme court issued a ruling against Prime Minister Johnson, Europe’s top court sided with Google, and shares of Blackberry are tanking.
Stocks were up Tuesday morning with the Dow adding 66 points, or 0.3%. The S&P 500 also gained 0.3%, while the Nasdaq hovered right around the flatline.’
China has granted new waivers to several companies to exempt them from tariffs on between 2 to 3 million tons of U.S. soybeans, according to a report from Bloomberg. The report also said that some firms have already purchased around 1.2 million tons of soybeans from the U.S. Pacific Northwest this week. In other trade war news, Trump said in a speech to the United Nations General Assembly in New York this morning that he will not accept a “bad deal” with China. “Hopefully we can reach an agreement that will be beneficial for both countries. But as I have made very clear, I will not accept a bad deal for the American people,” Trump said. The U.S. president also argued that the World Trade Organization needs “drastic change” to counter cheating from China and other countries. “For years, these abuses were tolerated, ignored, or even encouraged,” Trump said.
The plot is thickening when it comes to Trump’s call to Ukraine. President Trump said this morning that he held up $400 million in aid to Ukraine just days before a phone call where he reportedly asked the country’s leader to investigate the family of Democratic presidential frontrunner Joe Biden. This revelation comes after House Speaker Nancy Pelosi called for an all-caucus meeting yesterday afternoon to discuss possible impeachment amid the scandal. Seven freshman members from crucial swing districts said in a Washington Post op-ed Monday night that “if these allegations are true, we believe these actions represent an impeachable offense.”
The U.K. Supreme Court ruled that Boris Johnson’s suspension of Parliament for five weeks in the run-up to the October 31 Brexit deadline was against the law. The court said that Johnson gave Queen Elizabeth II “unlawful” advice to prorogue the legislature and his “extreme” decision wrecked the ability of Britain’s elected officials to fulfill their role overseeing his government’s actions. The ruling damages Johnson’s political authority and calls into question whether he should stay in office as the Queen’s principal adviser. “This is an extraordinarily strong, and most importantly unanimous judgment,” said Ron Kellaway, a partner at the law firm Eversheds Sutherland. “There is no wiggle room for the government here. Furthermore, the court has dealt immediately with the effect of its judgment on the unlawful prorogation, Parliament can start sitting immediately.” MPs are expected to get back to work Wednesday.
Europe’s top court ruled in favor of Google on Tuesday on whether the company must apply the right to be forgotten globally. “The Court concludes that, currently, there is no obligation under EU law, for a search engine operator who grants a request for de-referencing made by a data subject, as the case may be,… to carry out such a de-referencing on all the versions of its search engine,” the European Court of Justice said in a statement about the ruling. “Since 2014, we’ve worked hard to implement the right to be forgotten in Europe, and to strike a sensible balance between people’s rights of access to information and privacy,” said Peter Fleischer, senior privacy counsel at Google. “It’s good to see that the Court agreed with our arguments, and we’re grateful to the independent human rights organizations, media associations and many others around the world who also presented their views to the Court.”
Netflix shares are down more than -3% Tuesday morning as two analysts expressed concern that the company’s quarterly earnings could disappoint. Pivotal Research Group cut its price target to $350 from $515, while KeyBanc has a sector weight rating on NFLX and no price target. “Even good results are unlikely to address competitive fear,” KeyBanc’s Andy Hargreaves said. “Weak results/guidance in 3Q could raise concerns about longer-term growth that would likely be negative for the stock. In-line or slightly better results could drive a modest relief rally, but would not likely address competitive concerns since new services do not launch until 4Q.” Blackberry shares are down nearly -22% this morning after the company reported a big earnings miss and lowered forward guidance. Blackberry’s Internet of Things (IoT) division and Cylance cyber security unit both fell short of consensus estimates, contributing to the earnings miss. RBC analyst Paul Treiber noted that the company’s IP revenue was “well above” estimates, but said that “strong IP licensing revenue doesn’t offset IoT and Cylance shortfall.”
Stocks We’re Watching
PriceSmart Inc (NASDAQ: PSMT): PriceSmart shares were up as much as 20% yesterday after the stock was added to the S&P SmallCap 600 index, replacing Finisar on the index. PriceSmart is scheduled to deliver its next earnings report on October 29, and analysts are expecting the warehouse club retailer to report earnings per share of $0.49 on revenue of $812.34 million for its fiscal fourth quarter.
Dova Pharmaceuticals (NASDAQ: DOVA): Shares of this biopharma stock were up as much as 20% yesterday, and are up nearly 8% so far today after a bullish report from Wedbush from yesterday that centered on Dova’s lead drug Doptelet (avatrombopag). Doptelet was approved in the U.S. in May 2018 for the treatment of thrombocytopenia (low blood platelets) in patients with chronic liver disease, and approved for patients with chronic immune thrombocytopenia in June 2019. Dova’s sales for the first half of 2019 were up 284% year-over-year to $7.5 million, and topline data for a study in chemo-induced thrombocytopenia is expected in the first half of next year.