Wall Street Breakfast: Bitcoin Sets New All-Time High

Just a week after pushing past $6,000, bitcoin broke through the $6,300 mark for the first time late Sunday, taking gains this year to well over 500%. Investors appear to be shrugging off some of the negative news associated with last week’s “hard fork,” which resulted in the creation of a new cryptocurrency called bitcoin gold. It’s also been an eventful year for cryptocurrencies in general, with bitcoin garnering the most attention from analysts and regulators across the world.

Economy

With pressure building, Puerto Rico has moved to cancel Whitefish Energy’s $300M contract to rebuild the territory’s electrical grid. Roughly 70% of the island remains without power, more than a month after Hurricane Maria struck on Sept. 20. Private companies like Tesla (NASDAQ:TSLA) have stepped in amid a tumult in responding to the natural disaster, helping to restore power to a children’s hospital in San Juan.

The decision is not final, but at this point President Trump has settled on Fed Governor Jerome Powell as next Fed Chairman, WSJ reports. If confirmed, he would take up the reins at the central bank in February. In an Instagram post on Friday, the president said he had “somebody very specific in mind” for the job and would announce his choice sometime this week.

Following a week of stability during China’s 19th Communist Party Congress, local stocks stumbled in early Monday trade. The Shanghai Composite fell as much as 1.7%, the most this year on an intraday basis, before clawing back losses to close down 0.8%. It comes as sovereign bonds extended a monthly rout amid mounting deleveraging concerns in the nation’s financial sector.

Catalonia’s ousted leader, Carles Puigdemont, has called for peaceful opposition to Spain’s decision to take direct control of the region, declaring that he will keep “working to build a free country.” However, many government workers returned to their jobs today, in the first signs of whether separatists will adhere to his call. Euro +0.3% to $1.1639.

The U.K.’s Brexit department has lost its third minister in four months after Joyce Anelay resigned from the government citing health reasons. The department, headed by David Davis, had already seen the departure of two junior ministers and its permanent secretary since June’s general election, raising questions about its readiness for upcoming Brexit negotiations.

Iraqi Kurdish President Massoud Barzani is stepping down, a month after an independence referendum he orchestrated angered Baghdad. An overwhelming majority of voters approved secession, triggering fighting with Iraqi government troops who seized Kurdish-held oil fields accounting for about 40% of their revenue. The move also reversed years of political gains by the Kurds, dashing their dreams of statehood.

Stocks

“Our pivot to Asia is driving higher returns and lending growth,” HSBC CEO Stuart Gulliver declared after reporting earnings. Pretax profit at Europe’s largest bank totaled $4.6B during Q3, up from $843M in the same period a year ago. That will lay a foundation for HSBC’s new leadership after a tough period of post-crisis restructuring.

The Comptroller of the Currency wants to loosen the leash on Wells Fargo (NYSE:WFC), making it easier for the bank to vet incoming executives and clear severance payments, Reuters reports. The restrictions were heaped on the institution following its phony accounts scandal, but the bureau has advocated easing up sanctions since Keith Noreika took control of the OCC in May.

Confirming rumors from Friday, Akzo Nobel (OTCQX:AKZOY) said it was in “constructive talks” to buy Axalta (NYSE:AXTA), in a merger that would create a multibillion-dollar coating and paints giant. The possible deal under consideration would involve the Dutch company first proceeding with its existing plans to spin off its specialty chemicals business. AXTA +2.6% premarket.

Signing an agreement with CVC Capital, Owens Corning (NYSE:OC) will scoop up Paroc Group, a European mineral wool maker, for an enterprise value of about €900M. The transaction, which is expected to be immediately accretive to 2018 EPS, is likely to yield a run rate of operational synergies of €15M by the end of 2019.

Nintendo has raised its sales forecast for its latest console, the Switch, following another quarter of strong performance. The company now expects to ship 14M units in its financial year ending March 2018, up from its previous prediction of 10M. Nintendo (OTCPK:NTDOY) also upped its annual profit outlook to ¥85B ($748M), well above an earlier estimate of ¥45B.

Shouqi Limousine & Chauffeur, a car-hailing operator, and Baidu (NASDAQ:BIDU) are partnering to develop driverless vehicles, including software, hardware and mapping technology, Xinhua reports. Baidu also recently signed an agreement with BAIC Group to mass produce Level 4 autonomous vehicles by 2021 and is targeting mass production of autonomous buses with King Long by 2018.

Tesla shares fell almost 2% on Friday amid worries about Model 3 production. The stock has also experienced a swift decline since hitting a high of $385 last month, falling 17%, near bear market territory. Falling knife or buying opportunity? The last time Tesla (TSLA) was in a bear market the stock fell 32% over the course of seven months (April 2016 – Nov. 2016), but in the following period (Nov. 2016 -Sept. 2017) shares rallied 122%.

Overturning a decision to quit the country, Chevron (NYSE:CVX) is staying in Bangladesh and will invest $400M at Bibiyana, the country’s largest gas field. In April, the U.S. oil company said it would sell to China’s Himalaya Energy its wholly owned subsidiaries that operate three gas fields, which together account for 58% of Bangladesh’s gas production.

The head of the New York Stock Exchange (NYSE:ICE) has not given up on the IPO of Saudi Aramco (Private:ARMCO), even as the kingdom’s bourse operator said it aspired to be the exclusive venue for the listing. The $100B IPO is aimed at helping raise the nation’s profile in the eyes of overseas investors, a key part of its Vision 2030 plan to diversify the economy away from oil.

The dismemberment of Jeff Immelt’s legacy continues. Citing sources familiar with the matter, the WSJ reported that General Electric (NYSE:GE) executives did not notify the board about the practice of trailing the former CEO with a spare jet anytime he traveled. Management for years also withheld from directors an internal complaint it received about the empty plane.

Kobe Steel has withdrawn its full-year profit guidance and said it wouldn’t pay an interim dividend, preparing for a potential blow to earnings from its data falsification scandal. It comes as Kobe (OTCPK:KBSTY) reported net profit of ¥39.3B ($346M) for the first six months of the financial year ending in March, beating its forecast of ¥25B, as the company’s steel business recovered.

Helping strengthen its oncology business, Novartis (NYSE:NVS) has announced a $3.9B deal to buy Advanced Accelerator Applications (NASDAQ:AAAP). AAA makes radio pharmaceutical products which contain radioisotopes and are used clinically for both diagnosis and therapy of tumors. It was spun off from Europe’s physics research center CERN 15 years ago and listed on Nasdaq. AAAP +2.9% premarket.

The U.S. distributor of Corona is chasing a new type of buzz, according to the WSJ. Constellation Brands (NYSE:STZ) has agreed to take a 9.9% stake in Canopy Growth (OTCPK:TWMJF), the world’s largest publicly traded cannabis company, with a market value of 2.2B Canadian dollars on the Toronto Stock Exchange. It also plans to work with the firm to develop and market cannabis-infused beverages.

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