Plus, there’s a new probe into Goldman Sachs’ credit card practices after some complaints related to its Apple Card, Alibaba is on track to deliver record sales for its biggest shopping event of the year, and Boeing is planning to resume shipments of its 737 Max plane in December.
The major indexes fell to start the week with the Dow down 87 points, or 0.3%. The S&P 500 traded 0.3% lower, while the Nasdaq dropped 0.4%.
The market was dragged down this morning by concerns over the increasingly violent protests in Hong Kong. The protests took a violent turn Monday after a group of pro-democracy lawmakers were arrested in the city. One protester was shot and is in critical condition after police opened fire at the protesters. In a separate incident, a protester was set on fire and is also in critical condition after being doused with an unknown substance. Stocks in Hong Kong fell sharply amid the escalation, with the Hang Sent index falling 2.6% overnight.
KKR has formally approached Walgreens regarding a deal to take the drugstore giant private, according to a report from Bloomberg. The private equity firm is said to have been preparing a proposal to possibly buy out shareholders of Walgreens in what could be the biggest-ever leveraged buyout. Walgreens is the largest retail pharmacy in the U.S. and Europe with roughly 18,750 stores in 11 countries, and has come under pressure in recent years from online competitors including Amazon. Walgreens shares are up more than 6% this morning following the report.
Goldman Sachs and Apple shares fell this morning after reports of a probe into the bank’s credit card practices after a viral tweet from tech entrepreneur David Heinemeier Hansson that alleged gender discrimination in the Apple Card’s algorithms that determine credit limits. Hansson said he got 20 times the credit limit his wife got for the card in a viral tweet. Apple co-founder Steve Wozniak also called for an investigation after he alleged that the Apple Card game him 10 times the credit limit that his wife got. Goldman Sachs’ customer support told Hansson that they couldn’t explain what was happening, but said their algorithm was to blame. “It does not matter what the intent of individual Apple reps are, it matters what THE ALGORITHM they’ve placed their complete faith in does,” Hansson tweeted. “And what it does is discriminate.” A spokesperson for the superintendent of the New York Department of Financial Services, Linda Lacewell, said, “The department will be conducting an investigation to determine whether New York law was violated and ensure all consumers are treated equally regardless of sex. Any algorithm, that intentionally or not, resulted in discriminatory treatment of women or any other protected class of people violates New York law.”
Alibaba is on track to post record sales for its Singles’ Day shopping event. Gross merchandise value surpassed $30.5 billion by Monday afternoon, exceeding last year’s record roughly two-thirds of the way through the 24-hour shopping marathon. Last year’s Singles Day sales exceeded the spending during any single U.S. shopping holiday including Black Friday and Cyber Monday. To boost this year’s sales, Alibaba expanded the number of items on discount and put a heavy emphasis on live-streaming via its platforms to help sell the goods as live-streaming has become a big part of the shopping experience on Chinese e-commerce sites.
Boeing shares are up more than 1% after news broke that the aircraft maker is expecting to resume deliveries of its beleaguered 737 Max plane in December. The Wall Street Journal reported that Boeing wants to deliver the plan before the end of the year even if the FAA hasn’t approved analogous pilot training. A spokesman for the company told FOX Business this morning, “Subject to strict regulatory approval, we continue to complete key milestones that put us on a path to certification of the MAX in December, with training approval in January, paving the way for the safe return of the MAX to commercial service.” However, two airlines—American Air and Southwest—have already extended their 737 Max cancellations to March 2020 as it will take a month or more to complete necessary maintenance procedures and crew training to prepare for the plane’s return. American Airlines said their decision to extend their cancellations was “based on the latest guidance” from Boeing, the FAA, and the Department of Transportation.
Stocks We’re Watching
Red Violet Inc (NASDAQ: RDVT): Shares of this analytics and information solutions provider are up nearly 4% this morning and are up 15% over the last month. Red Violet delivered Q3 earnings late last week, reporting that total revenue increased 89% to $8.3 million for the quarter, while adjusted profit increased 141% to $5.1 million. “Since our spin-off in March of 2018, we have reported seven consecutive quarters of record revenue and adjusted gross margin. Adjusted EBITDA increased over 200% from second quarter 2019 and we incurred our smallest quarterly net loss to date,” said CEO Derek Dubner in the company’s earnings release. “I am very proud of our team’s execution year-to0-date, seizing upon immediate opportunities while continuing to lay the groundwork for expected future growth. We are experiencing increasing adoption of idiCORE™ by and among lager customers and FOREWARN® is fast becoming the go-to solution for proactive realtor safety. While fourth quarter traditionally presents seasonal headwinds affecting our transactional customers in the way of less business days and year-end budget recasting, we have experienced a strong start to the fourth quarter and are excited to close out a terrific 2019.”
Guardant Health Inc (NASDAQ: GH): Guardant Health shares jumped 12% on Friday following the company’s Q3 earnings results. Guardant reported its revenue jumped 181% year-over-year to $60.3 million in the quarter, while its net loss of $12.8 million—or $0.14 per share—was a significant improvement over the same period last year. “During the quarter, the Guardant team continued to make significant progress across our business,” said Guardant CEO Helmy Eltoukhy, PhD. “We are especially excited by the recent initiation of our ECLIPSE study. If successful, we believe this registration study will pave the way for a blood-based test to address the significant unmet need of physicians and their patients who seek an alternative to the current tools for colorectal cancer screening.”