Plus, democrat and republican negotiators made some progress on the next coronavirus relief bill, Ford’s Hackett is out as CEO, and Take-Two Interactive reported strong earnings results.
Stocks were down slightly to start Tuesday with the Dow falling 22 points, or 0.1%. The S&P 500 slid 0.2%, and the Nasdaq traded down less than 0.1%.
“A little bit” of progress was made during yesterday’s round of coronavirus relief bill negotiations between Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi, though a wide gap still remains between Democrats and Republicans. Pelosi told reporters after yesterday’s meetings that “we are moving down the track,” but “still have our differences,” while Senate Minority Leader Chuck Schumer added that “there are a lot of issues that are still outstanding, but I think there is a desire to get something done as soon as we can.” As the two sides continue talks today, President Donald Trump said he is considering executive orders to restore a moratorium on evictions, which expired along with the extra $600 in federal unemployment benefits, as well as to suspend payroll taxes, something that lawmakers in both parties have rebuked.
As coronavirus relief bill talks continue, cases of the virus have surged to more than 4.72 million in the U.S., while deaths have risen to more than 155,000. Regeneron Pharmaceuticals said that its experimental COVID-19 antibody drug combination both prevented and treated the disease in an animal trial with rhesus macaques and hamsters. The lead researchers in the study said the data suggests the therapy may offer clinical benefit in both prevention and treatment of COVID-19. Regeneron has already begun late-stage clinical trials in humans to assess the antibody treatment’s ability to prevent and treat the virus. Elsewhere, the FDA issued emergency use authorization for Abiomed’s Impella heart pump to help treat COVID-19 patients suffering from heart and lung failure.
Chinese state media labeled the U.S. a “rogue country” and said the potential sale of social media firm TikTok to Microsoft is “theft” that the Chinese government could retaliate against if the deal is completed. Hu Xijin, editor-in-chief of the state-backed Global Times, said Microsoft’s potential deal to buy TikTok’s U.S. operations is “open robbery,” while China Daily said that “China will by no means accept the ‘theft’ of a Chinese technology company, and it has plenty of ways to respond if the administration carries out its planned smash and grab.” In the U.S., President Trump has insisted that any sale of TikTok assets should include some form of payment to the U.S. and demanded that TikTok be sold to an American company by September 15 or be shut down. James Lewis, senior vice president and director of technology policy at the Center for Strategic and International Studies, says TikTok is “caught in the middle” of deep mistrust between the U.S. and China. “It’s a relatively harmless service that has an owner that raises suspicions. TikTok is largely a place where teenagers go and dance and lip sync, not a lot of intelligence value. But nobody trusts China and ByteDance lives in Beijing. That’s the risk. It’s the connection to the Chinese government, it’s the connection to Chinese intelligence services. There’s immense amounts of information.”
Jim Hackett is out as CEO at Ford, the company announced this morning. Hackett will be succeeded by Jim Farley, Ford’s chief operating officer, effective October 1. The shakeup comes as Hackett’s $11 billion restructuring plan has failed to impress investors, and Hackett said of Farley, “The wind in our sails is really starting to pick up, and Jim had a big, big role in that. I can feel confident that the things I was asked to do have actually started taking root.” Farley will take over as the automaker gears up to roll out three crucial new models aimed at reversing its fortunes: its all-electric Mustang Mach-E, its new Bronco SUV, and the redesign of the F-150 pickup, the company’s most profitable model. Farley promised to “swing for the fences” in the CEO spot, while vowing to return the automaker to 10% profit margin in North America. “We know our competition today is Amazon, Baidu, Tesla, Apple, Toyota, and others,” Farley said. “They’re well-financed and voracious companies.”
Take-Two Interactive shares are up more than 4% today after the videogame publisher said it sales and profit doubled in its fiscal first quarter. Take-Two said its net income rose 91% to $88.5 million, or $0.77 per share, while revenue rose to $831.3 million from $540.5 million in the same quarter last year. “As a result of our better-than-expected first quarter operating results and increased forecast for the balance of the year, we are raising our fiscal 2021 outlook, which is poised to be another great year for Take-Two,” CEO Strauss Zelnick said in a statement. Take-Two now expects fiscal full-year profit of $3.04 to $3.30 per share and bookies of $2.8 billion to $2.9 billion. Activision Blizzard, Beyond Meat, and electric vehicle maker Nikola all report after the bell today.
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Datasea Inc (NASDAQ: DTSS): Datasea shares gained as much as 221% yesterday after announcing it has entered into an agreement with Beijing Tengyuejunjie Parking Management (“BTPM”) to install its proprietary and Control System in Nantaipingzhuang Beixiang, a residential community in the Chaoyang District of Beijing. “We are encouraged to see our domestic footprint expand into Beijing,” said Datasea Chairman and CEO, Ms. Liu Zhixin. “As the capital of China, Beijing has a population of over 21 million residents and more than 6,000 residential communities. Our long-term growth strategy is to capture as much of this densely populated part of China as possible. Our team has been hard at work in developing our proprietary technology, and we are proud to see it yield positive results.”