Plus, a judge temporarily blocked the Trump administration’s order banning TikTok from being downloaded from U.S. app stores, there’s new hope on the stimulus front, and Devon Energy and WPX Energy are moving forward with a merger of equals.
Stocks were higher to start Monday with the Dow adding 456 points, or 1.7%. The S&P 500 and Nasdaq both rose 1.5% in early trading.
A judge has temporarily blocked the Trump administration’s order that would ban TikTok from being downloaded from U.S. app stores. Judge Carl Nichols of U.S. District Court for the District of Columbia granted an injunction against the order on Sunday, halting a government effort that could have forced app stores run by Apple and Google to remove TikTok. “We’re pleased that the court agreed with our legal arguments and issued an injunction preventing the implementation of the TikTok app ban. We will continue defending our rights for the benefit of our community and employees,” TikTok said in a statement. “At the same time, we will also maintain our ongoing dialogue with the government to turn our proposal, which the President gave his preliminary approval to last weekend, into an agreement.” Separately, China’s biggest chipmaker, SMIC, sank after the U.S. imposed export restrictions on it. While the new rules don’t appear to be as severe as those placed on Huawei, the restrictions are likely to escalate tensions between the world’s two-largest economies as the move threatens Beijing’s push to become more self-reliant in one of the most critical areas of technology.
Hope on the stimulus front came Sunday when House Speaker Nancy Pelosi said that a last-minute coronavirus aid deal remains on the table as House Democrats try to forge ahead on a smaller bill costing around $2.4 trillion. “I think we have a chance to get something done and we want to,” Pelosi said. “What we will be putting forth is an offer to say, now let us negotiate within a time frame and a dollar amount to get the job done to put money in people’s pockets, to honor our heroes and to crush the virus.” The House could vote on the bill as soon as next week, while Pelosi has previously said that House Democrats would not leave Washington for re-election efforts until making a move on stimulus measures.
As global deaths from the coronavirus rise to nearly 1 million, daily new cases of the deadly virus are on the rise nearly half of the states in the U.S., with two-dozen states and territories reporting an upward trend in new infections, with several states setting and breaking records within days. In Wisconsin, the state reported 2,817 new infections on Sunday, marking its highest daily total since the pandemic began and breaking its previous record of 2,533 new infections from September 18. In the West, Utah reported a record 1,411 new cases on Friday, while Montana broke a record on Saturday with 346 new cases. Even as cases are on the rise across much of the nation, recent data published in medical journal the Lancet suggests that the vast majority of the population in the U.S. hasn’t been exposed to COVID-19, indicating that the country is far from achieving “herd immunity” where exposure to the virus and/or a vaccine drastically reduces the spread of a virus. The data echoes the initial findings of an ongoing study by the CDC that Dr. Robert Redfield, director of the CDC, said in congressional testimony last week indicated more than 90% of Americans were still susceptible to the virus.
A flurry of deals boosted sentiment in the market this morning. Devon Energy and WPX Energy announced that they are moving forward with a merger of equals, sending their stocks up 11.56% and 15%, respectively. Cleveland-Cliffs, the largest U.S. producer of iron ore pellets, said today that it has agreed to buy the U.S. assets of the world’s largest steelmaker, ArcelorMittal SA, for $1.4 billion. And Caesars Entertainment disclosed a cash offer to buy London-based William Hill values the British bookmaker at 2.9 billion pounds, or around $3.7 billion, or would give the casino operator full control of a rapidly expanding U.S. sports-betting and online business.
And Piedmont Lithium shares are up more than 243% this morning after announcing it has signed a deal with Tesla for five years of lithium-ore supply with an extension for another five years, with delivery beginning in 2022. Supply chain issues are front of mind for Tesla CEO Elon Musk, who said at the company’s Battery Day event last week that, “We’re not getting into the [battery] cell business… just for the hell of it. It’s because it’s the fundamental constraint. It’s the thing that is the limiting factor for rapid growth.” In other Tesla news, Musk said this morning that the company may sell 20 million cars by 2027 and said he sees 30 million electric vehicles sold across the industry in the same timeframe. Such a figure amounts to monumental growth for Tesla, which is expected to deliver 483,000 cars total in 2020. Cathie Wood, founder and CEO of ARK Invest, an investment advisor focused on disruptive innovation, tweeted that Musk’s projection indicates electric vehicle “sales will scale nearly 20-fold from roughly 1.8 million last year to 35 million, 40% of total global auto sales, during the next five to six years.”
Stocks We’re Watching
Genius Brands International Inc (NASDAQ: GNUS): Genius Brands International shares jumped as much as 43% on Friday after the company announced that it has landed a deal to launch its premiere children’s entertainment destination, Kartoon Channel!, on Samsung Smart TVs. “We are very proud of what our team has accomplished in just three months since launching Kartoon Channel! with distribution across a broad spectrum of platforms with new partners being added frequently and new content coming to the channel on a weekly basis,” said Jon Ollwerther, General Manager of Kartoon Channel! & EVP of Global Business Development at Genius Brands. “Today, Kartoon Channel! and Kartoon Classroom! are available, for free, to virtually every home in America, with the same great user experience and user interface. We are continuing to build unique avenues to provide a value-driven experience to our audience of toddlers to tweens and their parents and we are on track to achieve what we set out to do—create a premiere entertainment and educational destination in a safe environment to meet the needs of parents and kids.”