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Dow Falls as Mnuchin Dents Stimulus Hopes By Investing.com

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© Reuters.

By Yasin Ebrahim

Investing.com – The Dow fell Wednesday, as U.S. Treasury Secretary Steven Mnuchin dented hopes for further stimulus before the election while mixed quarterly earnings also weighed on sentiment.

The fell 0.51%, or 146 points. The was down 0.73%, while the slipped 1.01%.

Mnuchin said it would be “would be difficult” to reach a deal on the next round of coronavirus stimulus with U.S. House Speaker Nancy Pelosi before the Nov. 3rd election, denting hopes for fiscal aid for Americans, small business, and airlines.

The stalled progress on talks come as the White House’s improved $1.8 trillion stimulus proposal was deemed insufficient by Pelosi, while Senate Republicans were uneasy about the size of the deal.

Some sectors of market tied to the progress of the economy, however, sidestepped the market malaise, with materials and industrials trading above the flatline.

Tech also contributed to the selloff as the Fab 5 stocks trading the red. 

Amazon.com (NASDAQ:) fell more than 2%, while Facebook (NASDAQ:), Alphabet (NASDAQ:) Microsoft (NASDAQ:), and Apple (NASDAQ:), which collectively make up a quarter of the weighting of the S&P 500, were also lower.

Apple’s losses extend from a day earlier when the tech giant unveiled its new slate iPhones. Some analysts said iPhone sales are likely to only gather pace in at the start of next year amid delays in shipping.

“We anticipate sustained double-digit growth for all hardware products except iPhones during Q4/F20 due to a slight delay in shipping new iPhones in addition to difficult comps in the year-ago period,” Canaccord Genuity said in a note. “Starting in the first quarter of 2021, we believe Apple is well-positioned to benefit from the 5G upgrade cycle and anticipate strong iPhone growth…”

The quarterly earnings season gathered pace, meanwhile, with Wall Street banks in the spotlight for the second day in a row.

Goldman Sachs Group (NYSE:) reported quarterly results that topped to trade 1% higher, but Bank of America (NYSE:) and Wells Fargo (NYSE:) reported mixed performance, sending their shares down more than 4% and 5% respectively.

UnitedHealth Group (NYSE:) fell 2% even as it reported better-than-expected second-quarter earnings of $3.51 a share on revenue of $65.12 billion.

Energy, meanwhile, backed the broader trend lower on firmer oil prices even as crude demand concerns continue to linger, a day ahead of the U.S. weekly petroleum report.

In other news, AMC Entertainment Holdings Inc (NYSE:) fell 17% after Bloomberg News reported the cash-strapped was mulling its options, including a potential bankruptcy filing. 

 

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Ant’s record strategic allocation in Shanghai IPO fuels small investor scramble By Reuters

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© Reuters. FILE PHOTO: Ant Group logo is pictured at the Shanghai office of Alipay, owned by Ant Group which is an affiliate of Chinese e-commerce giant Alibaba, in Shanghai

By Samuel Shen and Julie Zhu

SHANGHAI/HONG KONG (Reuters) – Chinese fintech giant Ant Group’s move to earmark a record 80% of the Shanghai leg of its $35 billion dual-listing for strategic investors has led to a scramble among smaller investors for what some see as a once-in-a-lifetime opportunity.

Ant [IPO-ANTG.HK], backed by e-commerce firm Alibaba Group (N:), has launched a dual-listing process in Hong Kong and on Shanghai’s STAR Market, and the offering is set to be the world’s largest.

Some smaller Chinese investors, spooked by concerns they could get edged out of the initial public offering (IPO) at home, are looking to bid for Ant shares in the Hong Kong float, which sources have said will not include a cornerstone tranche.

The move underscores the likely robust demand for the float, even as the approaching U.S. election has triggered concerns about a spike in market volatility.

Shanghai-based Regan Fund Management Co, for one, is helping mainland investors subscribe to Ant’s IPO in Hong Kong, the firm’s Shanghai-based general manager Richard Li said.

The chance of securing IPO shares in the Asian financial hub is 50-70%, much higher than on the mainland, Li told Reuters.

Non-strategic or smaller investors in China participate in a lottery-like bidding process for IPOs, which means the fewer the number of new shares on offer the smaller the chance of winning the lucky draw.

“Everyone knows buying IPO shares makes good profits as most shares trade up on debut,” said a banker working on Ant’s STAR IPO, declining to be named as he was not allowed to speak about the process. “The demand has been rather strong for Ant shares.”

WOOING MAINLAND INVESTORS

Hong Kong-based brokerages are also taking advantage of the Ant IPO frenzy to woo mainland investors.

Huatai Financial Holdings is offering new clients from the mainland one Alibaba Hong Kong share if they open a brokerage account and deposit more than $HK20,000, according to an advertisement posted on an overseas investment platform in China.

Ant’s earmarking of 80% of the offering for strategic investors, including a unit of Alibaba, is sharply higher than an average proportion of 19% for such buyers in other STAR IPOs this year, according to Refinitiv data.

Before Ant, China’s biggest mobile payments company, the record of strategic tranche on STAR was set by chipmaker Semiconductor Manufacturing International Corp (HK:), which in July sold 43% of its $7.6 billion secondary listing to strategic investors, the data showed.

On the Nasdaq-style STAR, the bulk of past IPO allocations have been skewed towards state investors, mutual fund houses and select hedge funds, elbowing out smaller institutions and individuals, most of whom are not even qualified to trade.

In another unprecedented move, some of Ant’s strategic investors are subject to lock-up periods of longer than the one year that is typical, the company’s filing with the Shanghai exchange showed.





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Dow, S&P futures gain on hopes of progress in stimulus talks By Reuters

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© Reuters. FILE PHOTO: A Wall Street sign is pictured outside the New York Stock Exchange, in New York City

By Medha Singh

(Reuters) – Futures tracking the S&P 500 and the Dow edged higher on Friday, as investors anticipated progress in bipartisan talks over the next coronavirus aid bill ahead of the Nov. 3 presidential election.

U.S. House Speaker Nancy Pelosi said on Thursday there was progress in negotiations with the White House, but Senate Republicans remained skeptical of a possible deal costing trillions of dollars.

Uncertainly over the timeline of the relief legislature has been weighing on Wall Street’s major indexes, which were set to end a choppy week slightly lower.

Meanwhile, a record 47 million Americans cast ballots, eclipsing total early voting from the 2016 election. President Donald Trump and Democratic rival Joe Biden debated on Thursday for the last time to persuade the few remaining undecided voters 12 days before their contest.

At 06:24 a.m. ET, Dow E-minis were up 0.31% at 28,352 points, S&P 500 E-minis rose 0.17% to 3,455 points. E-minis fell 0.07% to 11,643 points.

Third-quarter earnings season chugged along with 126 S&P firms having reported so far. About 84% of them have topped quarterly profit estimates, according to Refinitiv data.

Chipmaker Intel Corp (O:) tumbled nearly 10% in premarket trading after it reported that margins fell as consumers bought cheaper laptops and pandemic-stricken businesses and governments clamped down on data center spending.

Gilead Sciences Inc (O:) jumped 5.8% as its antiviral drug remdesivir became the first and only drug approved for treating patients hospitalized with COVID-19 in the United States.

Apple Inc (O:) edged 0.3% higher as two of its latest iPhone 12 models went on sale in China on Friday.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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StockBeat: Hotel Heartbreak Eases – a Little

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© Reuters.

By Geoffrey Smith 

Investing.com — The hotel industry began the long road back to some kind of normality in the third quarter, but figures from Europe’s two biggest operators show just how long it will be.

Revenue per available room, the key metric for hotel investors, was down 53% at InterContinental Hotels Group (LON:), which owns the Holiday Inn and associated franchises in the three months, and was down 63% at Accor (PA:), owner of the Ibis and Sofitel chains among others.

The figures, while dismal, were in both cases a significant improvement from the second quarter, and Accor’s shares in particular profited, rising 4.2% by mid-morning in Europe on Friday after CEO Sebastien Bazin said that the worst was behind the company. IHG stock fell 1.3%.

However, this is a pallid optimism. Even Bazin’s group is predicting that bookings won’t return to pre-pandemic levels until 2023. In the meantime, Bazin told France 24, “60% of the hotel industry is distressed, 40% is optimistic” as they face the prospect of full winter of Covid 19.

On Thursday, France had extended its curfew to an area covering three-quarters of its population after posting its highest daily figure yet for new infections. In Spain, Germany and the U.K., all key markets, officials bemoan that the virus is currently out of control, despite various attempts to restrict non-essential social contact.  Bazin urged European governments to be more clear and coordinated in their guidelines on travel, after an abortive summer tourism season when official guidelines changed at dizzying speed and with little or no consistency.

IHG CEO Keith Barr acknowledged that “uncertainty remains regarding the potential for further improvement in the short term.”

Barr’s conservatism is an implicit acknowledgment that he expects the U.S. market, which accounts for more of IHG’s business, to broadly follow the European one as the latest wave of the pandemic gains force there. That could leave Asia as the sole ray of sunshine for both companies. At IHG, RevPAR has already recovered to be down only 23% year-on-year in Greater China.

Both CEOs strove to put a brave face on the medium term, however. And not without reason: conventional wisdom says that when the vaccines are finally distributed and fear of public spaces recedes, hotel stocks should be among the best performers around. Pent-up demand and fading tail risks should allow a violent reversion to the mean.

But is there anything to hope for beyond that? The pre-pandemic assumptions of endless growth in world tourism will have to be tested anew as life returns to normal, and business travel budgets will remain crimped long after the vaccines arrive. IHG has in general created value over the last two decades but Accor hasn’t posted a new all-time high since 2007, and even though Bazin is finally pushing the group towards an ‘asset light’ model that should generate higher returns on equity and demand a higher valuation, the onus is squarely on him to prove it. 

Talking to Bloomberg TV earlier, Bazin dismissed the notion of M&A activity, which would offer the quicker path to capacity rationalization and higher margins. That may disappoint some, but the truth is that Accor’s current valuation doesn’t allow to hope for an active role in any such consolidation. The question is only whether or not Accor is ‘in play’.

IHG may have the better opportunities for driving the process, but Barr gave no hint of anything on the horizon in his statement. For investors, holding the stocks continues to require even more patience and tolerance of uncertainty than for most other assets.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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