Saudi Arabia Just Warned That War With Iran Would Cause A “Total Collapse Of The Global Economy”

Plus, the White House isn’t planning on blocking Chinese investments at this point, Forever 21 is filing for bankruptcy, and WeWork is formally requesting to postpone its IPO.

Stocks were up to start Monday morning, with the Dow adding 0.1% at the open. The S&P 500 gained nearly 0.2%, while the Nasdaq added 0.1% at the open.

Stocks rebounded from Friday’s lows this morning on news that the White House isn’t “contemplating blocking Chinese companies from listing shares on the U.S. stock exchanges at this time,” according to Treasury spokeswoman Monica Crowley. The statement, alongside better-than-anticipated economic data out of China, lifted sentiment. After reports from Friday that the Trump administration was considering ways to limit Chinese investments, Chinese state media called the possible restrictions “the latest attempt at decoupling,” and warned of “significant repercussions for the Chinese and U.S. economies, as well as their companies, in the future” should such restrictions come to be. Delegations from the U.S. and China are expected to meet on October 10 – 11 in Washington D.C. to try to move closer to a deal to end the trade hostilities, though Eurasia Group’s Ian Bremmer said that the combative toneat last week’s UN General Assembly from both sides suggests a much deeper divide between the world’s two largest economies than six months ago. “The two sides are digging in and it’s gotten considerably worse in the past weeks,” Bremmer said.

President Donald Trump called for Adam Schiff, the Democrat leading the House impeachment inquiry, to be questioned for treason and demanded to meet the anonymous whistleblower who raised concern about Trump’s request to Ukraine to investigate his political rivals in a series of tweets Sunday evening. Trump also said that he wants the identities of the individuals who provided information to the whistleblower that’s cited in the report, which is likely to raise questions about whether the president is violating protections that are in place to protect government employees seeking to expose unethical behavior. According to CBS News, the whistleblower has been placed under federal protection for fear of their safety as their lawyer says “certain individuals” have offered a $50,000 bounty for the whistleblower’s identity. Adam Schiff said in an interview with ABC, that Congress expects to hear from the whistleblower “very soon,” though the timing will depend on how quickly the security clearance process for his or her lawyers takes. In other impeachment news, Senate Majority Leader Mitch McConnell said this morning that the Senate would have to take up impeachment of the president if the House votes to charge Trump. “I would have no choice but to take it up,” McConnell said. “How long you are on it is a different matter, but I would have no choice but to take it up based on a Senate rule on impeachment.”

War between Saudi Arabia and Iran would cause a “total collapse of the global economy,” according to Saudi Crown Prince Mohammed bin Salman. In an interview with CBS’ “60 Minutes,” the bin Salman said “If the world does not take a strong and firm action to deter Iran, we will see further escalations that will threaten world interests. …Oil supplies will be disrupted and oil prices will jump to unimaginably high numbers that we haven’t seen in our lifetimes.” While Yemen’s Houthi rebels initially claimed responsibility, the U.S., Saudi Arabia, and several major European countries have all blamed Iran for the September 14 attacks on two Saudi oil installments that temporarily knocked out nearly 5% of the global oil supply. Energy industry experts say that oil could surge to between $100 and $150 per barrel if Saudi Arabia and Iran go to war.

Forever 21 said Sunday that it is filing for Chapter 11 bankruptcy protection. The apparel retailer has estimated liabilities on a consolidated basis of between $1 billion and $10 billion, and has secured $275 million in financing from its existing lenders with JPMorgan and $75 million in new capital from TPG Sixth Street Partners, as well as affiliated funds to help support its operations in bankruptcy. Forever 21 has 815 stores globally, and is expected to close most of its stores in Asia and Europe. The fast-fashion chain joins a growing list of big-name retailers, including Barneys and Mattress Firm, that have filed for bankruptcy protection recently.

WeWork parent We Co. has announced that it will file a request to postpone its highly-anticipated IPO. The embattled office-sharing unicorn formally announced its intent to go public on August 14, but has since had to delay its listing twice as concerns grew around its valuation and corporate governance, which forced its CEO to step down last week. “We have decided to postpone our IPO to focus on our core business, the fundamentals of which remain strong,” said WeWork co-CEOs Artie Minson and Sebastian Gunningham in a statement. “We are as committed as ever to serving our members, enterprise customers, landlord partners, employees and shareholders. We have every intention to operate WeWork as a public company and look forward to revisiting the public equity markets in the future.”

Stocks We’re Watching

Arcus Biosciences (NYSE: RCUS): Shares of Arcus Biosciences surged higher late last week after Mizuho Securities initiated coverage of the stock on Friday. Mizuho issued a Buy rating for the stock with a price target of $22, indicating possible upside of 152% over the next 12 months. Mizuho analyst Mara Goldstein said that Arcus’ approach to drug development, with an immune-based approach to fighting cancer, could generate enthusiasm for the stock. Data from clinical trials are expected over the course of the next year, which could push the stock higher.

Seattle Genetics (NASDAQ: SGEN): Seattle Biosciences shares are up nearly 11% this morning and jumped as much as 9% on Friday after the biotech unveiled promising cancer treatment regimens with Merck and Roche. Seattle Genetics’ enforumab vedotin in combination with Merck’s Keytruda produced a 62% objective response rate in patients with bladder cancer, while its tucatinib in combination with Roche’s Herceptin resulted in a 55% objective response rate. SVB Leerink analyst Andrew Berens said in a note to clients that the data releases represent “two wins” for Seattle Genetics’ stock and said “the promising initial (effectiveness) data suggests the potential for the combo to rapidly become the standard-of-care in (never-before-treated) cisplatin-ineligible patients and further validates the potential benefits that may be realized by combining ADCs and PD-1/L1 agents.”

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