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Fly Intel - End of Day Brief - Monday Sept. 16, 2019

Stocks end lower after production plant drone strikes in Saudi Arabia

Stocks were lower, and oil prices higher, from the outset of trading following a drone attack on Saudi oil facilities on Saturday that knocked out more than 5% of global oil supply and shelved half of Saudi Arabia's daily export capacity. President Trump warned the U.S. is "locked and loaded" to respond, without naming who is seen as to blame. However, two of his cabinet members implicated Iran and Trump said late in the day that it "certainly looks like" Iran had a hand in the attack.

ECONOMIC EVENTS: In the U.S., the Empire State manufacturing index fell 2.8 points to 2.0 in September, missing expectations for a moderate gain.

WTI crude oil prices are up by a double digit percentage, rising about 12% to above $61 per barrel in late morning trading following the drone strike against production plants in Saudi Arabia.

In China, several measures of economic activity – including industrial production, fixed asset investment, and retail sales – came in weaker than expected in August.

TOP NEWS: Oil-linked stocks, from the largest to the smallest, moved higher alongside the spike in brent and WTI crude oil prices. Exxon Mobil (XOM) and Chevron (CVX) rose 1.5% and 2.2%, respectively, to lead the Dow. Some of the largest percentage movers include Whiting Petroleum (WLL), Denbury Resources (DNR), Extraction Oil & Gas (XOG) and Centennial Resource Development (CDEV).

The United Auto Workers union began a strike against General Motors (GM) after the two sides failed to reach a tentative deal before a Saturday night deadline. The strike by the union, the first since 2007, prompted President Trump to tweet: "Here we go again General Motors and the United Auto Workers. Get together and make a deal!"

Shares of Nextar Media (NXST) rose 4.7% after the Federal Communications Commission approved Nextar's acquisition of Tribune Media (TRCO), with the FCC granting divestiture applications that have been filed to bring Nexstar into compliance with the local and national television ownership rules. Commenting on the matter, Tribune CEO Peter Kern said he is "very pleased" with the decision, while Nexstar said separately that it expects the Tribune transaction and divestiture sales to close "shortly."

Meanwhile, Bloomberg reported that Blackstone (BX) is in advanced talks to buy and lease back the Bellagio and MGM Grand Las Vegas casinos from MGM Resorts (MGM).

In addition, Bloomberg reported that Paul Singer's Elliott Management has built a below 3% stake in CNH (CNHI) and hopes for constructive engagement with the company.

MAJOR MOVERS: Among the noteworthy gainers was Alder Biopharmaceuticals (ALDR), which surged 83.9% higher after it agreed to be acquired by Lundbeck in a deal valued at $1.95B. Also higher was SemGroup (SEMG), which gained 60.5% after agreeing to be acquired by Energy Transfer LP (ET) in a unit and cash transaction valued at $17 per share, or a total consideration including the assumption of debt of approximately $5B. Energy Transfer shares were 4.1% lower after the news.

Among the notable losers was New Relic (NEWR), which slid fractionally after cutting its FY20 revenue outlook and announcing the resignations of its chief technology officer and chief revenue officer. Also lower was Mallinckrodt (MNK), which fell 8.8% after Purdue Pharma announced that it has reached an agreement in principle on a framework for settling the U.S. opioid litigation that included reorganization under Chapter 11 of the U.S. Bankruptcy Code. Mallinckrodt is also facing its own opioid litigation.

INDEXES: The Dow fell 142.70, or 0.52%, to 27,076.82, the Nasdaq lost 23.17, or 0.28%, to 8,153.54, and the S&P 500 declined 9.43, or 0.31%, to 2,997.96.


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Disclosure: I may trade in the ticker symbols mentioned, both long or short. My articles represent my personal opinion and analysis and should not be taken as investment advice. Readers should do their own research before making decisions to buy or sell securities. Trading and investing include risks, including loss of principal.

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