Market Morning: China Deal Flip, Chipotle Win, Hubspot Spotlight, Californians Flee

Market Morning: China Deal Flip, Chipotle Win, Hubspot Spotlight, Californians Flee

Once Again, Trade China Deal In Doubt

In what looks increasingly like a game for the sake of jerking global markets back and forth on springs, headlines blared today of new “doubt” surrounding a potential “Phase I” trade deal between the United States and China. Not many details were available as to why China is throwing cold water on what were new prospects as recently as yesterday, besides citing President Trump’s impulsive nature and saying they wouldn’t budge on the “thorniest of issues”.

As for Trump’s assertion that Phase I would be a “very big portion” of a comprehensive trade deal, it seems that the portion has just shrunk. Gold (NYSEARCA:GLD) has been up strongly on the news as soon as it hit the wire, and stock futures fell in tandem. The backtracking follows news yesterday that the summit in Chile where Trump and China leader Xi Jinping were scheduled to meet was cancelled, though this was seemingly due to the anti-government riots taking place there, as Market Morning pointed out earlier this week, rather than anything having to do with the trade talks themselves.

Peugeot, Fiat Chrysler Seal The Deal

The Italian-American car company will now become the French-Italian-American car company. Fiat Chrysler (NYSE:FCAU) and Peugeot (OTCMKTS:PUGOY) have confirmed their merger plan today in a share swap. The deal will make Fiat Chrysler Peugeot the fourth largest automaker in the world, behind Volkswagen, Renault-Nissan, and Toyota. Peugeot CEO Carlos Tavares will be CEO of the combined company. Total unit sales are around 8.7 million cars a year, $190 billion in turnover and about 400,000 employees. Whether there will be any downsizing as a result of the merger is not yet known. Electrification and autonomous driving will be priorities for the group.

Hubspot in the Spotlight

Hubspot (NYSE:HUBS) earnings are due next week, with consensus expectations of 24 cents a share. The stock interestingly is a favorite among hedge funds, now held by 33 of them, the most in the history of the stock which IPOed in 2014. Shares are up about 450% since then as the company has grown aggressively and has actually managed to do this without racking up much debt. Shares look to be forming a base after falling from highs in September, while a breakout to the upside could be imminent as support has been building for over a year now. Integrated applications for businesses are becoming more popular as a way of streamlining and upgrading efficiency, and Hubspot has taken advantage of this trend and grown accordingly. Most recently, it has added Viewbix (OTCQB:VBIX) applications focused on video analytics to its App Marketplace, an app hub for businesses that serves 65,000 companies.

Want Beef Without Antibiotics? Go to Chipotle

The annual Chain Reaction Antibiotics Scorecard is in, and Chipotle (NYSE:CMG) scored the top spot. The Scorecard rates companies not on how much antibiotics are found in their beef by laboratory tests, but simply by a company’s stated policies as to where and how their beef is sourced. Chipotle is still trying to fix its reputation after food poisoning issues hammered the stock back in 2015. The stock hit new highs in August so the effort to reinvigorate the brand appears to be working. Arby’s, Burger King, and Sonic all scored F’s. In total, 15 restaurant chains got the lowest grade. McDonald’s (NYSE:MCD) got a C, as did Subway.

Fleeing California Wildfires? Have This Stuff Ready

Notwithstanding PG&E’s (NYSE:PCG) all-clear signal that restored power to over 300,000 customers and caused the stock to pop by 22%, people preparing to flee their homes in affected areas of California is still a reality. Marketwatch today is out with a helpful guide (rehashed from a September 2018 piece on Hurricane Florence evacuations) regarding what documents to have ready in the event that you have to flee your home on a moment’s notice. IDs including driver’s license, passport, social security card and birth certificate, health insurance cards and emergency contact information, and anything that one would normally keep in a wallet are all included in some of the most important items to have on hand. Medical information, prescription drug forms, and estate documents including powers of attorney or wills also top the list. Cash is king since ATMs may be out of order with banks being closed for extended periods of time if they are also affected. Bills should also be set up on autopay to avoid financial complications.

Hong Kong Contracts 3.2% as Protests Take Toll on Economy

Hong Kong is reeling from almost daily protests against Chinese dominance over their affairs. Despite Chief Executive Carrie Lam completely scrapping a bill that would have allowed extradition of Hong Kongers to mainland China, feared to be used as a way to prosecute political opponents and enemies of the Xi regime, protests have continued. Lam is a bit down in the dumps, being frank in her assessment of the future saying that “there is no room for optimism.” Meaning, she sees protests continuing indefinitely, as China is too powerful to oppose and Hong Kongers are becoming increasingly desperate about their autonomy and either protesting or moving out of the island en masse.