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Fly Intel - End of Day Brief - Monday August 12, 2019

Stocks end lower after surprise primary result in Argentina, more protests in Hong Kong

Stocks suffered a down day as ongoing protests in Hong Kong shut down the city's airport and a shocking election result in Argentina sent the nation's currency down sharply. Those political situations on both sides of the globe are adding new worries to a market that is already concerned about the ongoing trade fight between the U.S. and China that shows no signs of concluding soon.

ECONOMIC EVENTS: In the U.S., a rally in Treasuries and drop in yields once again weighed on equities. The yield on 30-year Treasury bonds fell as much as 14 basis points to 2.1179%, a new low for 2019 and near the record low of 2.0882% reached in July 2016.

TOP NEWS: Markets in Argentina were reeling on Monday after President Mauricio Macri, who is known for being pro-business, lost a primary election on Sunday. Argentina's peso had weakened about 25% against the dollar in early trading amid investor concerns about the potential return to power of Argentina's Peronist movement under Alberto Fernandez and his running mate, former president Cristina Kirchner. Fernandez has pledged to undo many of Macri's market-friendly policies and the surprising primary results were followed by steep selloffs in many stocks linked to Argentina that trade in New York, including MercadoLibre (MELI), Banco Macro (BMA), (DESP), Grupo Financiero Galicia (GGAL), Loma Negra (LOMA), Pampa Energia (PAM), Telecom Argentina (TEO), YPF (YPF) and Arcos Dorados (ARCO).

Shares of Cloudera (CLDR) initially jumped after the company announced that it has reached a voting and standstill agreement with Carl C. Icahn, but the stock closed 4.4% lower. The company, which said it believes the Icahn Group beneficially owns approximately 18.36% of the company's outstanding common stock, has agreed to appoint Nicholas Graziano and Jesse Lynn, both of whom are employees of Icahn Enterprises (IEP), to the company's board of directors, effective immediately.

Meanwhile, Campbell Soup (CPB) was in focus after Sky News reported that Valeo Foods Group is in advanced talks to acquire Campbell's Kettle Foods operations in the U.K. and Ireland. The deal, which could be reached in the coming days, is expected to be worth more than GBP50M, according to Sky. The news comes after Campbell Soup announced earlier this month that it signed an agreement to sell Arnott's and other international operations to KKR (KKR) for $2.2B in cash.

Additionally, New York Attorney General Letitia James said via Twitter that Oregon has joined her state's lawsuit to block the merger of T-Mobile (TMUS) and Sprint (S). James added in the tweet that the coalition involved in the suit includes 16 states. A New York AG spokesperson told Dealreporter last week that the office was in talks with a "handful" of other states that were considering whether to sign onto the lawsuit.

MAJOR MOVERS: Among the notable gainers was PlayAGS (AGS), which rose 10.5% after it announced a $50M share repurchase program. Also higher was Amgen (AMGN), which gained 4.9% after a United States District Court judge in New Jersey ruled on Friday in the company's favor in a patent fight with Novartis' (NVS) Sandoz unit over the drug Enbrel.

Among the notable losers was Ternium (TX), which slid 15.8% after Morgan Stanley analyst Carlos De Alba downgraded the stock to Equal Weight from Overweight following the results of the primaries in Argentina. Also lower was Livent (LTHM), which fell 10.7% after BofA Merrill Lynch analyst Steve Byrne downgraded the stock to Underperform from Neutral and lowered his price target for the shares to $7 from $10.

INDEXES: The Dow fell 391.00, or 1.49%, to 25,896.44, the Nasdaq lost 95.73, or 1.2%, to 7,863.41, and the S&P 500 declined 35.95, or 1.23%, to 2,882.70.


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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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