Category Archives: News

Thematic Reads: March 9, 2020

Thematic Reads: March 9, 2020

Each week Team Tematica consumes a voracious amount of content as we look to stay on top of the latest data and mine it for tailwind and headwind signals for our 10 investment themes.

Aging of the Population
The global demographic shift towards a more senior population


Cleaner Living
Growing demand for items that claim to be better for you and the planet:


Cyber Security & Data Privacy

Securing individuals and organizations against cyber threats and privacy violations:


Digital Infrastructure
The Buildout and upgrading of our Networks, Data Storage Facilities, and Equipment


Disruptive Innovators
Business models designed to transform an entire industry and leap-frog over incumbents.


Digital Lifestyle
The increasingly digital landscape that now underpins the entire consumer experience.


Guilty Pleasures

The products and services people will consume no matter the economic environment.


Living the Life

Those things that bridge the gap between want and ability at every socioeconomic level.


Middle-Class Squeeze

Consumers trading down when and where possible or looking to stretch the disposable dollars they do have.

The ECB warns banks to prepare for coronavirus related jump in cybercrime

The ECB warns banks to prepare for coronavirus related jump in cybercrime

Never underestimate people’s ability to take advantage of a crisis, including the current coronavirus as cyber-criminals have been quick to take advantage of the understandable levels of fear. This morning NortonLifeLock (NLOK) sent an email to its clients warning about a phishing email going around that uses the logo of the CDC Health Alert Network claiming to provide a list of local active infections. Recipients are asked to click a link where they are then to enter email login credentials, which are then stolen.

Also this morning, the European Central Bank warned banks that there may be a jump in cyber attacks as hackers look to exploit virus-related chaos.

The watchdog urged banks in a letter this week to test the capacity of their technology systems “also in light of a potential increase of cyber-attacks and potential higher reliance on remote banking services.”

The outbreak has prompted lenders to ask more employees to work from home or spread them across different offices, while more clients may choose online banking over going to branches. While banks have improved defenses against hackers in recent years, the ECB has called cybercrime and technology deficiencies some of the top risks for the industry this year.

The ECB letter is part of efforts to ensure banks can keep functioning in case they’re directly affected by the coronavirus outbreak that’s rippling through the global economy.

These warnings follow a recently published blog post by Fortinet (FTNT) on how it has seen a significant increase in malicious activity surrounding the coronavirus. In the post, the company shared it has found reports appearing from “trusted sources, such as governmental agencies, news outlets, etc. that were actually malicious.” Fortinet goes on to point out the World Health Organization (WHO) is contending with malicious activity as “criminals are disguising themselves as WHO to steal money or sensitive information.”

We suspect in the coming months we are likely to see a spike in companies reporting cyber attacks and data privacy violations, which will not only shortcomings but also spur demand for companies found in the Foxberry Tematica Research Cybersecurity & Data Privacy IndexOur advice is to wash your hands frequently and be wary of what you click on and where you click. It’s a viral world.

Source: Banks Told to Prepare for Cybercrime Jump in Coronavirus Fallout – Bloomberg

Disclosure: NortonLifeLock (NLOK) and Fortinet (FTNT) are constituents in the Foxberry Tematica Research Cybersecurity & Data Privacy Index

 

Sizing up thematic returns in February

Sizing up thematic returns in February

Equities continued to swoon during February as investors came to grips with the expanding impact of the coronavirus. Amid a growing sea of corporate warnings that led investors to question earnings forecasts for the current quarter as well as all of 2020, all the major stock market indices finished February down 6.4%-10.1%. The hardest hit was the Dow Jones Industrial Average, and the US stock market barometer that is the S&P 500 fell 8.4% in February, which added meaningfully to its decline year to date. 

Despite investors taking profits in the Technology and Healthcare sectors, they along with Communication Services helped temper the market’s February selloff. Names like Regeneron Pharmaceuticals (REGN), Biogen (BIIB) and Gilead Sciences (GILD) saw gains on advances in potential coronavirus treatment development in particular. While markets overall were impacted by unfolding events during the month Energy, Utilities and Consumer Discretionary names seemed to lead the way down. Muted demand for oil due to reduced manufacturing activity and fears of continued softening in the global economy saw oil prices drop almost 17% during the last week of the month. Unsurprisingly, cruise line operators Norwegian Cruise Lines (NCLH) and Caribbean Cruise Lines (RCL) were among the worst performers this month both posting losses over 30% with Carnival Corporation (CCL) not too far behind losing over 23% of its market value as those companies paired back 2020 expectations due to the coronavirus’s impact. The same was had with airlines with American Airlines Group (AAL) down 29.68% and Alaska Air Group (ALK) off 21.88% as they too canceled flights and reduced schedules owing to the virus.  

At Tematica we’ve often questioned the notion of the S&P 500’s construction as well as the ability of an 11-sector framework to accurately capture the evolving landscapes that we and other investors find ourselves confronting as structural changes associated with our 10 investment themes continue to unfold.  In our view a different perspective is needed, a thematic one, to properly identify those companies at the forefront of these unfolding structural changes. For example, cruise lines such as the ones mentioned above fall into the Consumer Discretionary sector while companies such as Omega Healthcare Investors (OHI) that offer long-term healthcare facilities is classified as Real Estate even though both are feeling the tailwinds of Tematica’s Aging Population investing theme on their respective businesses.

Another example of looking at the world thematically is found in the Tematica Research Cleaner Living Index, which focuses on the shifting consumer preference for cleaner products and services that are better for you, your body, your work, your workplace, and the environment.  Despite sharp February sell-offs in several index constituents, including Acuity Brands (AYI). Fresh Del Monte Produce (FDP) and Hain Celestial (HAIN), solar energy systems companies Sunrun (RUN) and SolarEdge Technologies ((SEDG), as well as plant-based alternative Beyond Meat (BYND) and Tesla (TSLA), led the Cleaner Index to slip by only 3.1% in February. That decline more than offset the index’s modest rise posted during January leaving it down 2.6% year to date vs. the S&P’s 8.6% drop at the end of February. 

Of note during February, 

  • Plant-based meat alternatives notched another win as Beyond Meat announced the Beyond Meat sandwich will be available at Starbucks’ (SBUX) nearly 1,200 coffee shops across Canada on March 3. The sandwich will include cheddar cheese and egg on an artisanal bun. Not to be outdone, Impossible Foods announced its plant-based meats will be available across Walt Disney (DIS) theme parks and cruise lines come Feb. 28. 
  • Confirming the drivers for Cleaner Living are global, during February it was reported by the Fraunhofer Institute for Solar Energy Systems (ISE) that 61.2% of Germany’s net public electricity generation was from renewable sources, marking a new monthly record. 
  • And while Tesla has an early lead in the electric vehicle space, BMW is set to take the wrap off its i4 electric concept car and General Motors (GM) is slated to discuss its electric vehicle and battery strategies at its upcoming EV Day on March 4. GM’s battery facing comments will be ones to watch ahead of Tesla’s “Battery Day” slated for April.

Amid the coronavirus headlines investors were digesting during February, there were two powerful reminders of the growing need for cybersecurity and digital privacy solutions. The first was the announcement from gaming and hospitality giant MGM Resorts International (MGM) that it had been the victim of a data breach in 2019. The second was a statement from the US State Department blaming the Russian military intelligence agency known as the GRU for the cyberattacks that hit Georgia last October and disrupted “several thousand Georgian government and privately-run websites and interrupted the broadcast of at least two major television stations.”

Those attacks are but the latest high-profile ones to be reported and point to the increasing need for companies, governments, other institutions and individuals to protect their data, especially as the regulatory environment could increase the frequency of financially motivated cyber-attacks. Each week in Thematic Reads, we share some of the latest headlines and news stories surrounding the Foxberry Tematica Research Cybersecurity and Data Privacy Index. As society becomes increasingly connected as part of our Digital Lifestyle investment theme and as new technologies associated with our Digital Infrastructure investing theme look to connect more devices than ever before, we continue to see an increasing demand profile for the constituents that comprise the Foxberry Tematica Research Cybersecurity & Data Privacy Index. During February the index fell 8.2% as gains registered in the shares of Cloudflare (NET), Norton Lifelock (NLOK) and ForeScout Technologies (FSCT) were offset by declines in Palo Alto Networks (PANW), Globalscape (GSB) and Mimecast (MIME) shares. 

Turning to the Tematica’s Thematic Dividend All-Stars Index, which is comprised companies with at least ten consecutive years of increasing annual regular dividend payments and whose business models will benefit from multiple thematic tailwinds tracked by Tematica’s Thematic Scorecard, its total return for February was -8.1% vs. the total return for the S&P 500 of -8.3%. Among the index’s 65 constituents, only Healthcare Services Group (HCSG), Albemarle Corp. (ALB) and Target (TGT) finished higher in February, leaving meaningful declines at Aaron’s (AAN), Nu Skin (NUS) and Invesco (IVZ) to have a greater impact on this equally weighted index. 

Generally speaking, companies that continually increase their dividends to shareholders tend to see a positive step function higher in their share prices. During the first two months of 2020, just over 25% of the index constituents announced fresh dividend increases including Aaron’s (AAN), Analog Devices (ADI), Digital Realty Trust (DLR), Best Buy (BBY) and AT&T (T). Given the positive impact of tailwinds associated with Tematica’s investment themes, we look forward to sharing news of new dividend increases at the other 72% of the index constituents in the coming months. 

‘Hidden apps’ to drive an increase in mobile malware attacks

‘Hidden apps’ to drive an increase in mobile malware attacks

“Consider the number of applications on your smartphone today. Which ones are actively used? Which ones are no longer used? While this is a simple check, more important questions often go unanswered. For example, do you know what data each app collects?

So begins the latest McAfee Mobile Threat Report, which points out that mobile malware is becoming increasingly common as cybercriminals focus their attention on smartphones, the device that has become for many the go-to device for communicating, banking, shopping, and other forms of transactions and data consumption. According to data published by the Gartner, exiting 2019 there were 1.5 billion smartphones being used across the globe, which in the view of hackers offers a target-rich environment.

Per McAfee’s findings, how they are looking to attack those devices is through ‘hidden apps,’ which are malicious applications that are designed to avoid user discovery. In some cases, attackers are using a MalBus attack, which involves criminals targeting the “account of a legitimate developer of a popular app with a solid reputation…adding an additional library to the apps and uploaded them to Google Play. During installation, the malicious library checks whether it is already installed, and, if not, runs an update process to download and dynamically load a malicious Trojan disguised as a media file.”

McAfee sums this latest report with two key observations: first, 2020 is likely to be the year of “mobile sneak attacks” and attackers will increasingly look to make their activities appear more legitimate. In our view, this only solidifies the growing importance and demand for data privacy and cybersecurity solutions represented by the Foxberry Tematica Research Cybersecurity & Data Privacy Index.

Some interesting observations from the latest McAfee Mobile Threat Report include:

According to figures in the newly released McAfee Mobile Threat Report, the total number of detections for different types of mobile malware reached over 35 million during the final quarter of 2019, representing a jump of 10 million detections compared with 2018.

Thousands of apps are actively hiding their presence after installation, making them difficult to locate and remove while annoying victims with invasive ads.

In order to help bypass security protections offered to Android users by the Google Play Store, cyber criminals are turning towards other channels to help distribute their malicious apps. This often sees attackers use comments below YouTube videos, or links in popular chat apps like Discord, that claim to offer free or cracked versions of well-known applications.

The download pages for these fake applications will use icons, text and imagery of the real app to add authenticity and encourage potential victims to download the malicious software – but then the app will seemingly disappear after installation.

Apps will sometimes just disguise themselves as something under the ‘settings’ menu of the phone, or the app will claim that it can’t be installed in the user’s country – while secretly installing the malware all along.

And because the application is hidden in such a way that the user is unlikely to be able to find it, the malware will drain the phone battery by performing actions that generate ad revenue.

Source: Warning over ‘hidden apps’ as mobile malware attacks increase – and get sneakier | ZDNet

Thematic Reads: March 2, 2020

Thematic Reads: March 2, 2020

Each week Team Tematica consumes a voracious amount of content as we look to stay on top of the latest data and mine it for tailwind and headwind signals for our 10 investment themes.

Aging of the Population
The global demographic shift towards a more senior population


Cleaner Living
Growing demand for items that claim to be better for you and the planet:


Cyber Security & Data Privacy

Securing individuals and organizations against cyber threats and privacy violations:


Digital Infrastructure
The Buildout and upgrading of our Networks, Data Storage Facilities, and Equipment


Disruptive Innovators
Business models designed to transform an entire industry and leap-frog over incumbents.


Digital Lifestyle
The increasingly digital landscape that now underpins the entire consumer experience.


Guilty Pleasures

The products and services people will consume no matter the economic environment.


Living the Life

Those things that bridge the gap between want and ability at every socioeconomic level.


Middle-Class Squeeze

Consumers trading down when and where possible or looking to stretch the disposable dollars they do have.

Coronavirus: Is It No Major Worry Or A Pandemic? Yes.

Coronavirus: Is It No Major Worry Or A Pandemic? Yes.

 

The headlines are increasingly dominated by frightening images of people wearing masks or encased in hazmat suits along with words like “pandemic,” not exactly pleasant over morning coffee. We are being told that this virus isn’t all that much worse than the usual flu, yet cities are being quarantined, travel is being restricted or outright banned, and companies are making all kinds of severe contingency plans. How can this be no worse than the usual flu if everyone seems to be having a total meltdown?


I did some simple math to show why this virus could be both:

  • (A) something I personally don’t need to get overly worked up over when it comes to my own health, while at the same time
  • (B) a major medical threat on a global level.

Sounds like I’ve lost my mind right? Just give me a few minutes and we’ll walk through the numbers.

The breakdown for the impact of the typical influenza virus every season is illustrated in this chart from the Center for Disease Control (CDC). Since 2010 the number infected by an influenza virus every year ranges from 9.3 million to 45 million. The number hospitalized ranges from 140,000 to 810,000 and the number that die from the virus ranges from 12,000 to 61,000.

In the chart below I took the midpoint of each of the ranges shown above. I realize that those ranges are quite large so simply taking the midpoint of the numbers loses some meaning, but bear with me here as we are just looking to understand magnitudes. On average 8.23% of the population of the United States has been infected by the seasonal influenza virus every year since 2010. Of those who have been infected, 1.75% have needed hospitalization and 0.134% have died.

If we assume that the coronavirus is just an average flu bug, then we can use these averages. In the example below I assume that 1.75% of those that contract the virus need hospitalization and 0.134% will die. In the chart below I show how many will need hospitalization and how many will die based on 5% to 50% of the population contracting the virus. 

(Please note on the chart below that I took the total number of hospital beds from the 2020 American Hospital Association’s 2020 AHA Hospital Statistics, developed from the 2018 AHA Annual Survey. I estimated the number of ICU beds using data from the Society of Critical Care Medicine which referenced AHA data that found the ration of ICU beds to total beds to be 14.3% in a 2015 study. Surprisingly enough the number of ICU beds is not an easy number to find.)

The problem quickly becomes evident. Under our assumptions, when the percent of the population infected by the virus gets between 15% and 20% of the total population, there simply aren’t enough hospital beds in the country even if every single bed is dedicated to someone with the coronavirus. This is the problem. It isn’t the health risks to any one particular person, but rather the sheer number of people that this virus may be able to infect.

So while the risk to me of needing hospitalization may be no worse with coronavirus that the usual flu, there may be no beds available to treat me if I end up needing one! Now I’m worried.

According to the Center for Disease Control (CDC), on average, about 8% of the US population gets sick from the flu every season, with a range of between 3% and 11% depending on the year. What about the contagiousness of the typical flu? This is from the CDC:

  • People with flu are most contagious in the first 3-4 days after their illness begins.
  • Some otherwise healthy adults may be able to infect others beginning 1 day before symptoms develop and up to 5 to 7 days after becoming sick.
  • Some people, especially young children and people with weakened immune systems might be able to infect others for an even longer time.

Part of why the typical flu is not as contagious as the coronavirus is because you know more quickly when you are sick. The problem with the coronavirus is we are seeing evidence that people can be contagious for more than 14 days and may not have any symptoms. This gives the coronavirus the potential to totally blow away the usual 3% to 11% infection rate during a typical season.

This is why the virus can have the same health risk to any particular person as the usual flu bug while at the same time being an enormous health risk on a city, state and national level. Recall the movie Mission Impossible 2 where our hero Ethan Hunt needs to stop the biological weapon “Chimera” from getting out? Chimera was fatal within 20 hours and those infected quickly experienced severe symptoms. That movie got it all wrong. The most dangerous virus would be one that infects its host and is easily transmitted from one person to the next for years without its host having any symptoms. With such a virus, by the time we even knew of its existence, the majority of the world’s population could already be infected.

As a final note, in the example above we assumed a fatality rate (meaning the percent of those infected that die) of just 0.134%. In China, as of February 11, 2020, according to data compiled by Statista, the fatality rate has been much higher – 21.6x higher in Hubei, 17.2x higher nationwide and 3x higher in other regions excluding Hubei.

Statistic: Fatality rate of novel coronavirus COVID-19 in China as of February 11, 2020, by region* | Statista
Find more statistics at Statista


As of February 27, 2020 at 18:00 Central European time, there were 650 confirmed cases in Italy, 17 deaths and 45 healed. This makes for a mortality rate of 2.6% which is 19.5x more deadly than our example. Current statistics can be found here.

In South Korea, as of the writing of this piece, the total confirmed cases had reached 2,022 with 13 deaths. This makes for a mortality rate of 0.64% which is 4.8x more deadly than our example.

According to LiveScience.com, as of the afternoon of February 28, 2020 there are have about 83,704 confirmed cases and 2,859 deaths. This makes for a mortality rate of 3.4% which is 25.5x more deadly than our example.

On that note, I’m going to go wash my hands… again.

PS – Here is a link I found to a piece on the South China Morning Post that has a regularly updated counter on those affected by COVID.

 

GRU’s Grand Day Out and MGM’s Bad Privacy Luck

GRU’s Grand Day Out and MGM’s Bad Privacy Luck

In the last twenty-four hours, we’ve had two powerful reminders of the growing need for cybersecurity and digital privacy solutions. The first was the announcement from gaming and hospitality giant MGM Resorts International (MGM) that it had been the victim of a data breach in 2019. The second was a statement from the US State Department blaming the Russian military intelligence agency known as the GRU for the cyberattacks that hit Georgia last October and disrupted “several thousand Georgian government and privately-run websites and interrupted the broadcast of at least two major television stations.” 

As the digital world becomes increasingly pervasive so too does the need for cybersecurity and data protection solutions. The passage of General Data Protection Regulation (GDPR) in the European Union and the California Consumer Privacy Act are both driving spending on security measures as companies race towards compliance with these new personal data privacy regulations.

In the case of the MGM breach, the personal details of more than 10.6 million guests of the resort chain were published on a hacking forum, including information from driver’s licenses, passports, and military ID cards. While the company doesn’t have any current operations in California, it does have operations in Maryland, Massachusetts and New York. All three of those states introduced new privacy laws in 2019, which are pending in Maryland and Massachusetts but active in New York as of January 2020. 

Those new laws and a growing number of similar legislative acts emerging in other states are intended to increase the cost to companies of data breaches compared. As we noted in “A Whitepaper on Cybersecurity and Privacy”, fines associated with privacy law violations can be $100-$750 per user, which could be financially devastating. If a company doing business in California experienced an attack similar in size and scope to MGM’s, it would be staring down a potential fine between $1-$8 billion. For some perspective, the MGM breach paled in comparison to the 2018 breach at Marriot International (MAR) that exposed data of up to 500 million guests. 

Luckily for MGM, this data breach occurred in 2019 before new privacy laws were enacted this year. Even so, in response to the attack, MGM retained two cybersecurity forensics firms to conduct an internal investigation into the server exposure and has “strengthened and enhanced the security of our network to prevent this from happening again.”[1] That means spending on cybersecurity and data privacy solutions. Given the evolving nature of attacks, this will not be a one-time investment. MGM, and all companies facing such risks, will need to be perpetually vigilant in safeguarding their networks especially customer data. 

Threat intelligence firm KELA identified the culprit behind the MGM attack as a member of the GnosticPlayers[2], a hacking group responsible for the hacks of more than 45 companies and the leaking of over one billion user records throughout 2019. The new privacy laws in the US and the European Union expand the potential damage such hacking groups can inflict on companies, increasing the need for cyber protection lest they leave themselves vulnerable to attacks and privacy-related fines. The new privacy regulations increase the potential financial harm to a company from hacking, creating yet another powerful incentive for preventative security spending. 

While the attack on MGM was a clear example of the need for better corporate cybersecurity and data privacy, the cyberattack on Georgia, is one of cyber warfare. The Georgia attack knocked out thousands of government, private sector, and media websites, and interrupted broadcasts of at least two major television stations.

The UK’s National Cyber Security Centre (NCSC), concluded, “with the highest level of probability, “the attacks, aimed at web-hosting providers, were carried out by the GRU (a Russian military spy agency) in a bid to destabilize the country. The GRU is also believed to be behind NotPetya, a June 2017 cyberattack that invaded global corporate networks crashing many systems worldwide, disrupting business for companies including “Maersk, pharmaceutical giant Merck, FedEx’s European subsidiary TNT Express, French construction company Saint-Gobain, Mondelez, and Reckitt Benckiser. “[3]

In terms of the size of the NotPetya attack, “According to confirmation received by WIRED from former Homeland Security adviser Tom Bossert, the result of this attack was more than $10 billion total loss in damages.”[4] That compares to losses of $4-$8 billion associated with the WannaCry virus in May 2017.

While the attack on Georgia is gaining renewed exposure, the reality is it is just the latest in a growing number of cyber warfare attacks; a list of such attacks is being compiled by the Center for Strategic & International Studies. 

The bottom line is in a world of increasing connectivity that brings ever greater accessibility, companies, governments, and institutions are facing a cyber arms race that will generate continual and growing demand for evolving cyber defense solutions. If a company opts not to secure itself, it risks devastating fines. We suspect the more prudent companies will instead engage with cybersecurity and data privacy companies that comprise the Foxberry Tematica Research Cybersecurity & Data Privacy Index.


[1] ZDNet, “Exclusive: Details of 10.6 million MGM hotel guests posted on a hacking forum”, 2020. Available at https://www.zdnet.com/article/exclusive-details-of-10-6-million-of-mgm-hotel-guests-posted-on-a-hacking-forum/

[2] ZDNet, “Exclusive: Details of 10.6 million MGM hotel guests posted on a hacking forum”, 2020. Available at https://www.zdnet.com/article/exclusive-details-of-10-6-million-of-mgm-hotel-guests-posted-on-a-hacking-forum/

[3] NS Tech, “Russia’s GRU launched cyberattacks aimed at destabilising Georgia, says NCSC”, 2020. Available at https://tech.newstatesman.com/security/russia-gru-cyber-attacks-georgia-ncsc

[4] Business Standard, “NotPetya: How a Russian malware created the world’s worst cyberattack ever”, 2018. Available at https://www.business-standard.com/article/technology/notpetya-how-a-russian-malware-created-the-world-s-worst-cyberattack-ever-118082700261_1.html

Daily Markets: Markets Feverish Again Over Contagion Fears

Daily Markets: Markets Feverish Again Over Contagion Fears

Yesterday US investors were surprised to see the market suddenly drop around midday, the Dow falling almost 400 points at one point, with no one clear, obvious catalyst. The suspected culprit was a report of new coronavirus cases at a Beijing hospital combined with other reports of the outbreak accelerating outside of China.

The coronavirus is once again front and center for investors today with stocks in Asia closing mostly in the red except for the major Chinese indices on word that the return to work is accelerating in the major foreign trade provides. The Shenzhen Composite gained 1.1% and the Shanghai Composite 0.3%. South Korea, on the other hand, saw its Kospi drop 1.5% after reporting the first confirmed death in the country from COVID-19 on top of having the highest number of people infected with the virus outside of mainland China.

The major European indices were all in the red…

Read more here

Disclosures

This Dividend Aristocrat Is Well on Its Way to a ‘Coronation’

This Dividend Aristocrat Is Well on Its Way to a ‘Coronation’

Recently I touched on the several new additions to the S&P Dow Jones Dividend Aristocrats, a group of S&P 500 constituents that have increased their dividends for at least 25 years. Now, I am circling back to the latest dividend payment from an existing Aristocrat: PepsiCo (PEP) .

Widely known for its products that include Pepsi, Lays, Mountain Dew, Doritos, Gatorade, Tropicana, and Aquafina water, the company has been paying consecutive quarterly cash dividends since 1965. Indeed, 2019 marked the company’s 47th consecutive annual dividend increase, which has the company approaching the rarified air of the Dividend Kings. As a reminder, a Dividend King is an S&P 500 company that has increased its dividend for at least 50 consecutive years, an incredible achievement, which explains why there were only 28 such names in 2019.

Read more here

Disclosure

Daily Markets: Morgan Stanley (MS) to Buy E-Trade for $13 Billion

Daily Markets: Morgan Stanley (MS) to Buy E-Trade for $13 Billion

The main equity indices closed mostly in the green in Asia today after China cut its 1-year loan prime rate (LPR) by ten basis points and its 5-year by five basis points. This move comes after the People’s Bank of China had earlier cut the rate on $28.65 billion worth of 1-year medium-term lending facility loans to financial institutions from 3.25% to 3.15% on Monday. The rate cut was widely anticipated and is another layer in China’s efforts to limit the economic impact of the coronavirus.

As of yesterday, China’s National Health Commission had reported an additional 114 deaths from COVID-19, and 394 confirmed new cases for a total of 2,118 deaths and 74,576 cases. The number of new cases dropped dramatically, giving investors hope that we may have seen the worst of it, a hope that was furthered by the announcement from Foxconn today that it is cautiously restarting production at its primary plants in China. The Hubei province has asked that work not resume before March 11 – suspension for many firms was previously due to end February 21. South Korea reported 22 new confirmed cases with a potential first death from the virus that remains under investigation.

Shares in Europe were modestly in the red as of midday trading with US futures pointing to a slightly lower open after the Nasdaq Composite and S&P 500 closed at new highs yesterday.

Read more here

Disclosures