“When you learn to let go of the need to be right, being wrong gradually lose its power to disturb you.” — unknown

1. Boeing Tried for Deals at Dubai Air Show — Emirates and Boeing are reportedly on the verge of striking a compromise deal for the Middle East’s biggest carrier to order around 30 787 Dreamliners, but fewer 777X jets as part of a delayed order. Boeing (NYSE:BA) has only landed about a third of the orders scored by Airbus (OTCPK:EADSY, OTCPK:EADSF) at the biennial event. Meanwhile, FAA Administrator Steve Dickson stated on the sidelines of the show that the FAA will be tougher on the certification of the Boeing 777X and isn’t following any specific timeline for the return to service of the grounded 737 MAX model. Overall, Airbus (OTCPK:EADSY) scored 220 plane orders during the closely-watched industry event, while Boeing (NYSE:BA) lagged behind with 95 agreements for commercial jets. Boeing still managed to garner sales for its troubled 737 MAX, scoring a total of 50 deals from Air Astana, SunExpress and an unidentified customer. The French planemaker has been ahead for most of 2019. At the end of October, Airbus had posted 542 net orders vs. Boeing’s 45.
2. Disney Sees $100M ‘Frozen 2’ Debut — Disney (NYSE:DIS) is forecasting a hot debut for long-awaited sequel Frozen 2 when it opens on Friday. The company expects the film to draw $100M or so domestically in its first weekend, while some Hollywood estimates are ranging to as high as $105M. The film is set to debut in more than 4,400 theaters in North America. The first Frozen film is the 2nd highest-grossing animated movie of all-time with a global box office haul of $1.29B.
3. FCC Calls for Public C-band Auction — FCC Chairman Ajit Pai announced his support for a public auction to free up C-band spectrum, a key band currently used for delivering video content for next-generation 5G wireless networks. The news sent Intelsat’s (NYSE:I) stock crashing 40%. Major satellite service providers, which hold existing C-band licenses, had proposed selling the spectrum privately to wireless carriers, arguing a private sale would make the spectrum available for 5G faster.
4. China Invited U.S. for More Trade Talks — Beijing’s chief trade negotiator late last week proposed a new round of face-to-face talks, according to people briefed on the matter, as both sides are struggling to strike a limited deal to help de-escalate tensions.
5. FedEx Discontinues Pension for New Hires — Joining the growing ranks of large U.S. companies phasing out guaranteed retirement benefits, FedEx (NYSE:FDX) said it would close its pension plan to new U.S. hires starting in 2020. The shipping giant instead will launch a new 401(k) plan at the start of 2021 with a higher company match (contributing up to 8% of employee salaries, if employees provide 6% of their salary). Just 22% of Fortune 50 companies and 11% of transportation companies offer pensions to new employees.

The week ahead — Economic data from Econoday.com:

“When you learn to let go of the need to be right, being wrong gradually lose its power to disturb you.” Yvan Byeajee

1. Auto industry Seeks partnerships — Tata Group (NYSE:TTM), the owner of Jaguar Land Rover, has approached carmakers including China’s Geely (OTCPK:GELYY), the owner of Volvo Cars, and BMW (OTCPK:BMWYY) as it seeks partnerships to share the cost of a new generation of vehicles, Bloomberg reports. Scale has become increasingly critical in the auto industry as carmakers pool resources to tackle electrification and self-driving capabilities. Volkswagen (OTCPK:VWAGY) this year decided to team up with Ford (NYSE:F), while PSA Group (OTCPK:PEUGF) last month agreed to merge with Fiat Chrysler (NYSE:FCAU) to create the world’s fourth-largest automaker.
2. Boeing Announces MAX Deliveries Could Resume in December — the planemaker said deliveries of the 737 MAX could begin in December. The company has completed a test of flight control software with the FAA in a simulator, though regulators still must sign off on new pilot training and Boeing needs to conduct a certification flight with officials. Airlines have said they will need at least a month to complete training and install revised software before flights can resume.
3. Disney+ Finally Arrives in Streaming Wars — Disney+ has gone live, challenging the likes of Netflix (NASDAQ:NFLX), Apple TV Plus (NASDAQ:AAPL) and HBO Max (NYSE:T) with a low price of $6.99/month (or $69.99/year). It’ll also offer a triple bundle – including Hulu and ESPN Plus – for $12.99/month. Waves were already made after the Mouse House gave Verizon (NYSE:VZ) customers a free year of the service, as well as broadening device support to nearly every platform: Apple OS, Android, Fire TV, Roku, etc. Disney (NYSE:DIS) has called the service – which will be the exclusive home of Star Wars, Marvel and Pixar – the future of the company, and is building out a slate of original shows and movies based on those brands like The Mandalorian.
4. Goldman Faces ‘Sexist’ Probe Over Apple Card — New York’s Department of Financial Services has initiated a probe into the credit card practices of Goldman Sachs (NYSE:GS) following a series of tweets from David Heinemeier Hansson, the creator of Ruby on Rails. He slammed the Apple Card (NASDAQ:AAPL) for giving him 20x the credit limit than his wife – despite filing joint tax returns and his wife having a better credit score – and alleged that gender discrimination was present in algorithms that determined credit limits. Launched in August, the Apple Card is a joint venture between Apple and Goldman, which is responsible for all credit decisions related to the card.
5. U.S. to extend reprieve for Huawei — as the earlier reprieve expires, the Trump administration will issue another 90-day extension today of a license allowing U.S. companies to continue doing business with Huawei, sources told Reuters. The Chinese firm was added to an economic blacklist back in May on national security grounds. Out of $70B that Huawei spent buying components in 2018, some $11B went to U.S. firms including Qualcomm (NASDAQ:QCOM), Intel (NASDAQ:INTC) and Micron Technology (NASDAQ:MU).

The week ahead — Economic data from Econoday.com:

“The intelligent investor is a realist who sells to optimists and buys from pessimists.” – Benjamin Graham

1. Trump Administration is Weighing to Drop Existing Tariffs with China — the Trump administration is weighing whether to drop existing tariffs on $112B of Chinese imports (which were introduced at a 15% rate on Sept. 1). “Phase One” of the pact would include Chinese purchases of American farm goods, rules to deter currency manipulation and some provisions to protect intellectual property and open up Chinese industries to U.S. firms.
2. European Union Aviation Safety Agency Stated Boeing’s MAX Likely to Return to European Service in Q1 2020 –Boeing’s (BA +1.7%) 737 MAX airliner likely will return to service in Europe in Q1 2020, says the head of the European Union Aviation Safety Agency. While the EASE expects to give its approval in January, preparations by national authorities and airlines may delay the resumption of commercial flights by as much as another two months, executive director Patrick Ky says.
3. Walgreens (WBA) Might Goes Private — reports suggested the U.S. drug store chain is exploring private equity interest. If a deal was struck, it would likely be one of the largest leveraged buyouts in history based off Walgreens’ $50B+ market cap. Several private equity firms would likely be involved, though many have long lost their appetite for teaming together on so-called club deals since the financial crisis.
4. U.S. Says Phase-One China Deal Would Include Tariff Rollback — China’s Ministry of Commerce said the world’s two largest economies had agreed to remove duties on each other’s goods in phases. “If China, U.S. reach a phase-one deal, both sides should roll back existing additional tariffs in the same proportion,” declared spokesman Gao Feng. That would potentially provide a road map to end the bruising trade war after reports yesterday suggested a meeting between President Trump and Xi Jinping could be postponed until December.
5. Facebook’s WhatsApp Eplores E-commerce via Catalog Feature — after buying the app for $19B in 2014, Facebook (NASDAQ:FB) is finally building out the service’s e-commerce tools by launching a catalog feature where businesses can display a “mobile storefront” showcasing their wares with images and prices. Facebook similarly added a shopping feature to Instagram in March that lets users click a “checkout” option on items tagged for sale (though transactions there happen directly within the app).

The week ahead — Economic data from Econoday.com:

The investor of today does not profit from yesterday’s growth. — Warren Buffett

1. Fiat, PSA Confirmed Deal to Merge — Fiat Chrysler and Peugeot owner PSA have officially agreed to join forces through a 50-50 share swap, creating the world’s fourth-largest automaker. “In a rapidly changing environment, with new challenges in connected, electrified, shared and autonomous mobility, the combined entity would leverage its strong global R&D footprint and ecosystem,” the companies said in a statement. The deal calls for paying a special dividend of €5.5B to Fiat (NYSE:FCAU) investors and for PSA (OTCPK:PEUGF) to spin off to its shareholders a €3B stake in parts maker Faurecia (OTCPK:FURCF).
2. China Manufacturing Activity Shrinks Again in October — Factory activity in China contracted for the sixth straight month in October and by more than expected, while service sector growth eased as companies face the weakest economic growth in nearly 30 years. Weighed down by slowing global demand and the Sino-U.S. trade war, the manufacturing PMI fell to 49.3, versus 49.8 in September, according to the country’s statistics bureau. The figures will heap pressure on policymakers to roll out more stimulus to avoid a sharper slowdown and job losses.
3. Fed Cuts Rates for Third Meeting in a Row, Signals Pause — the Federal Reserve cut its benchmark interest rate for the third straight meeting and signaled it may pause before further changes to monetary policy to see whether these easing steps are enough to sustain the economic expansion. At the policy meeting on Wednesday, officials said they would lower the federal-funds target rate by a quarter percentage point, to between 1.5% and 1.75%. Chairman Powell said “Looking ahead, we will be monitoring the effects of our policy actions, along with other information bearing on the outlook, as we assess the appropriate path of the target range for the fed funds rate,” he said. “Of course, if developments emerge that cause a material reassessment of our outlook, we would respond accordingly. Policy is not on a preset course.”
3. LVMH Bids $120 a Share for Tiffany — Tiffany (NYSE:TIF) has received a $120/share offer from LVMH (OTCPK:LVMUY), valuing the company at $14.5B, 22% above Friday’s close. According to informed sources, it will need to sweeten the offer to get the deal done.
4. 5G Goes Online in China — China turned on its 5G networks ahead of schedule on Nov 2nd 2019 – after initially targeting a 2020 launch – amid an ongoing trade war with the U.S. that has turned into a battle over tech supremacy. President Trump said earlier this year that “the race to 5G is on and America must win,” and has been seeking to convince other countries to ban Huawei from their next-generation networks. China Telecom (NYSE:CHA), China Unicom (NYSE:CHU) and China Mobile (NYSE:CHL) all unveiled 5G plans that start at around 128 yuan ($18) per month, though experts have warned of challenges to adoption, including price and a lack of 5G capable handsets.
5. Lagarde Takes Reins of the ECB from Mario Draghi — Christine Lagarde begins her new job atop the European Central Bank today at a time when persistently low inflation and weak growth are showing the limits of monetary policy. Under a 2012 pledge to do “whatever it takes” to save the eurozone from collapse, predecessor Mario Draghi drove interest rates deep into negative territory and pumped trillions of euros into the economy through QE. With an almost exhausted ECB monetary toolkit, unprecedented dissent has broken out between those eurozone members who back this policy and those who are losing faith in further easing.

The week ahead — Economic data from Econoday.com: