Week of Aug 23 2019 Weekly Recap & The Week Ahead
“Michael Marcus taught me one other thing that is absolutely critical: You have to be willing to make mistakes regularly; there is nothing wrong with it. Michael taught me about making your best judgment, being wrong, making your next best judgment, being wrong, making your third best judgment, and then doubling your money.” – Bruce Kovner
1. Cigarette makers Philip Morris International and Altria Group Are in Advanced Talks to Merge — the potential blockbuster deal would reunite two tobacco giants struggling with shrinking demand. The two companies split in 2008 but hold the same portfolio of cigarettes, including Marlboro. The products are sold by Altria in the U.S. and Philip Morris elsewhere. A combination would create a company with a market value of roughly $200 billion.
2. Judge Ordered Johnson & Johnson Must Pay $572 Million for the Opioid-Addiction Crisis in Oklahoma — Judge Thad Balkman said the state proved the company launched a misleading marketing campaign to convince the public that opioids posed little addiction risk and were appropriate to treat a range of chronic pain. The verdict caps the first opioid case to go to trial among thousands brought by state and local municipalities and could signal further findings of liability for drug companies facing similar cases. The three major drug wholesalers – McKesson (NYSE:MCK), AmerisourceBergen (NYSE:ABC) and Cardinal Health (NYSE:CAH) – should see some action now that J&J’s exposure is clarified.
3. Impossible Whopper Goes on Sale Nationwide — Burger King (NYSE:QSR) will bring the Impossible Whopper to all of its 7,200 U.S. locations today after a successful test run in seven markets. The nation’s second-largest burger chain began testing the plant-based burger from Impossible Foods at locations in St. Louis in April. Those outlets saw traffic outperform national averages by 18.5% that month, according to a report from inMarket.
4. Retailer Forever 21 Weighs Bankruptcy Filing — things are getting harder in the retail landscape as Forever 21 reportedly considers filing for bankruptcy, in a move that could put pressure on mall owners Simon Property Group (NYSE:SPG) and Brookfield Property Partners (NASDAQ:BPY). Struggles also saw Hudson’s Bay (OTCPK:HBAYF) offload Lord & Taylor on Wednesday to clothing rental startup Le Tote for $100M. Not everything is so bleak, however, as sneaker retailer Puma (OTCPK:PUMSY) opened its first U.S. flagship store today on the corner of Fifth Avenue and 49th Street in Manhattan.
5. Florida Braces for Hurricane Dorian — Hurricane Dorian is strengthening and is forecast to hit Florida as a Category 4 storm during the busy Labor Day weekend, becoming the first major hurricane to hit the area in 15 years. American Airlines (NASDAQ:AAL) and Southwest (NYSE:LUV) are allowing travelers to change their Florida flights without fees ahead of the storm, potentially weighing on the carriers which have weathered a difficult summer. Some of the nation’s largest investor-owned hospitals are also gathering supplies in preparation, including Tenet Healthcare (NYSE:THC), HCA Healthcare (NYSE:HCA) and Universal Health Services (NYSE:UHS). There’s additional concern for insurers and orange juice farmers, while the oil industry watches if the storm will pass into the Gulf of Mexico.
6. S&P calls ‘default’ in Argentina — Argentina’s decision to “unilaterally” extend maturities on its short-term debt constitutes a “default,” according to Standard & Poor’s, which slashed the country’s long-term foreign and local currency issue ratings to CCC – “vulnerable to nonpayment.” The downgrade came after Argentine bond prices fell and country risk soared to levels not seen since 2005 on Thursday amid fears of a full-blown financial crisis.
The week ahead — Economic data from Econoday.com:
