The Economy
Puerto Rico To Cancel Whitefish Power Contract
On Sunday, Puerto Rico’s government said it will cancel its $300 million contract with Whitefish Energy Holdings to restore power to the U.S. territory, which was hit by its worst storm in 80 years six weeks ago. The decision comes after public uproar over the terms of the deal, which were obtained without a competitive public bidding process.
U.S. Consumer Spending Records Biggest Increase In Eight Years
Last month, consumer spending in the U.S. increased by 1%, the biggest monthly gain in eight years, while household savings dipped to their lowest levels since 2008. By contrast, consumer spending went up by just 0.1% in August.
The Markets
Tech Stocks Lift Nasdaq To Record Intraday High
The Nasdaq hit an all-time high on Monday morning thanks to more gains in the tech sector, led by Apple Inc. (NASDAQ:$AAPL), which also reached an all-time intraday high on positive news of strong demand for its iPhone X. However, the index fell back down in the afternoon following reports of a possible corporate tax cut plan.
Other tech giants like Facebook (NASDAQ:$FB) and Alibaba (NYSE:$BABA) also saw big jumps in their share prices. Apple and Facebook are scheduled to report their earnings later this week.
Wall Street 2017 Profits To Surpass Last Year’s, Says Report
In a report by New York State Comptroller Thomas P. DiNapoli, profits from Wall Street in 2017 are set to exceed those of 2016. Profits from the securities industry reached $12.3 billion in the first half of 2017, a third higher than the same period a year ago.
Brent Oil Down On Expectations Of Production Cut Extension
Brent oil slipped but maintained above $60 a barrel on Monday on expectations of an extended production cut by OPEC to March 2018. The OPEC countries previously made a pact to cut production by 1.8 million barrels per day from January 2016.
Top Active Stocks
As mentioned, Apple Inc. (NASDAQ:$AAPL) was the most active stock on the Nasdaq due to positive news regarding the iPhone X and in anticipation of its earnings on Thursday. So far, the demand for iPhone X is trending higher than expectations, with delivery times for the new phone pushed out to five to six weeks.
Following last week’s decline, Mattel Inc. (NASDAQ:$MAT) shares rebounded on Monday, up 11.3% at market close. According to analysts, a takeover of the company could be possible, and accordingly, the stock could still see a rise in value.
In contrast, Advanced Micro Devices Inc. (NYSE:$AMD) continued its decline from last week, down another 8% to $10.89. The stock plunged by over 20% in less than one week. The selloff stems from the fact that despite reporting a $71 million net income and a 26% sales growth in Q3, the company’s forecast for Q4 was rather disappointing. Morgan Stanley has also reduced its rating for AMD shares to underweight from equal weight, predicting that cryptocurrency mining and gaming console demand for its graphics chip business will falter in 2018.
Following the withdrawal of the application for European use of its flagship lung cancer drug last Friday, Merck & Co. Inc. (NYSE:$MRK) saw another setback on Monday with its share price dropping by a further 6%. In light of the application withdrawal, various analysts have downgraded the company’s shares to equal weight from overweight. The setback has also boosted the shares of rival Bristol-Myers Squibb Company (NYSE:$BMY), which were up by 2%.
Sprint Nextel Corp. (NYSE:$S) saw its shares fall sharply on Monday (down almost 10% at market close) following reports that the potential merger between the company and T-Mobile may be in jeopardy. According to reports, the companies were unable to agree on how ownership of the new company would be structured.
Dynegy Inc. (NYSE:$DYN) went up by 5.8% following the announcement that Vistra Energy Corp (NYSE:$VST) will buy the company for $1.74 billion in an all-stock deal, combining the two Texas-based power producers. Vistra Energy’s shares dropped by 8.5% following this news.
Feature Image: Depositphotos/ lewistse
