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Market Morning: Sprint T-Mobile Victory, Brexit Vote, Tesla Supercharged, Amazon Haven

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Sprint, T-Mobile, Get White House Go-Ahead for Merger

How’d they do it? Simply by saying it would be better suited to compete against China if the merger were allowed to go forward. You can’t beat that argument in today’s White House, where the global economy is a zero-sum game and China is blamed for everything. The Department of Justice, housing the Antitrust Division, still has to sign off on the deal as well. T-Mobile (NASDAQ:TMUS) and Sprint (NYSE:S) would create a $100B telecom giant that would control about 31% of wireless phone traffic, but only 7% of the cash flow, which is one of their main arguments for the merger, that it would be relatively insignificant and therefore not constitute a trust, whatever a “trust” means.

SEE: Aurora Acquires Premium Cannabis Products Maker

Meaningful Vote on Brexit On Tuesday Despite Failed Talks in Brussels

Brussels ain’t budging on backstop. The European Union head honchos insist on maintaining an indefinite backstop that would effectively keep the United Kingdom in the EU indefinitely, in order to avoid a hard border between Ireland and Northern Ireland. After all this time, the civil war between Irish Catholics and Protestants still has global repercussions it seems. British Prime Minister Theresa May can’t secure any concession, like a time constraint, on the backstop, which is a no-go for Brexiters who actually want to leave the EU without being stuck in an EU renamed “Backstopean Union”. So what is likely to happen now is another defeat to pass May’s Brexit deal in Parliament on Tuesday, followed by efforts to block a no-deal Brexit, followed by a  vote to extend article 50, followed by probably nothing and the UK remains in the EU by default indefinitely. (NYSEARCA:EWU)

Amazon JPMorgan Berkshire Healthcare Haven to be Called Haven

Haven help us, we’ll soon be saying, when the Amazon (NASDAQ:AMZN) JPMorgan (NYSE:JPM) Berkshire Hathaway (NYSE:BRK-A) gets off the ground. It will be called “Haven”, and it will initially serve Amazon, JPMorgan, and Berkshire Hathaway employees. The aim of the cooperative is to simplify insurance and make prescription drugs more affordable, which we’ve all heard before. If three of the most powerful companies in the world can’t do it, then nobody can, so let’s see what they do. The plan seems a bit too utopian to actually work, given that the cooperative will be supposedly free of “profit-making incentives” though without profits a firm cannot survive, nor can anything. Like the Earth, which exists because of the profit of energy from the sun. So let’s not be flabbergasted if it doesn’t achieve its goals of lowering drug prices and making insurance simpler.

Mitsubishi Dives Too Deeply Into Saturated Debt Markets

It always wanted to be a sole underwriter, and it got its wish. Mitsubishi UFJ Financial (NYSE:MUFG) overbid on $500M worth of oil and gas bonds from CNX Resources (NYSE:CNX), outbidding Credit Suisse (NYSE:CS) to become sole underwriters for the bond issue, and ended up selling some of them at less than par, losing about $15M on the deal overall so far. It bought them at a yield of 7.25% and sold them at a yield of 7.75%, meaning the price went down and Mitsubishi took a slight loss. It has been trading mortgage-backed securities and other junk debt since 2016.

New Tesla Supercharging Stations To Cut Down Charging Times to 15 Minutes

15 minutes is still a long time compared to how long it takes to fill a tank of gasoline, but new supercharging stations being outlayed by Tesla (NASDAQ:TSLA) are capable of providing a Model 3 with a 75-mile charge in just 5 minutes, cutting down typical charging time to 15 minutes, which means that charging normally will still take longer than 15 minutes, so bring a book to the charging station is the point here. A new feature on Tesla cars that will further speed up the process is one that will warm the car’s batteries to optimal charging temperature prior to the driver actually arriving at the charging station, which should speed up the charging speed. Also, there will be no more power sharing between cars at charge points. The first supercharging station will break ground next month, but no word on when it will actually be ready for use.

 

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