With all eyes on the US election results, futures tied to the S&P 500 are racing 1.3% higher this morning, with Dow Futures and Nasdaq futures also up 0.45% and 3.3% respectively. “I think the big news for the markets right now at least as it looks preliminary is that there’s not going to be a blue wave, which is generally supportive for markets,” said Mike Lewis, managing director of U.S. equity cash trading at Barclays, on CNBC’s “Squawk Box.” “I think that the outlook going forward for markets is this is going to be more about policy and the Fed than it’s going to be about politics, which is a good thing for markets.”
Uber is up 12% this morning, with Lyft up 15%. Early this morning it was announced that Prop 22 passed in California which is a landmark victory for Uber and Lyft, enabling them to keep the contractor model. With Lyft deriving roughly 16% of revenues from California and Uber roughly 5%, both companies were looking at potentially leaving the State or significantly altering its business model if this legislation did not pass during voting yesterday. “Taking a step back, this removes a significant overhang and dark cloud for the likes of Uber and Lyft and ends this ‘head scratching’ AB5 legislation chapter that was a major threat to the future of the Gig Economy and thousands of drivers throughout California” cheered Wedbush analyst Daniel Ives following the news.
In other auto news, Nio is continuing its impressive rally, and is now up 4.5% in pre-market trading after surging 6.5% yesterday. Unconfirmed media reports have suggested that China’s electric vehicle company is now looking to expand into Europe. The company intends to launch its ES8 and ES6 models in Europe next year with its first NIO House store set for Copenhagen, Denmark. Plus the stock has scored 2 buy ratings and an upgrade in the last couple of days. JP Morgan’s Nick Lai writes: “In China’s smart EV market, we expect Nio to be a long-term winner in the premium space among Chinese brands.”
Also moving higher on the back of bullish analyst activity, Teradyne is up 3% after Goldman Sachs’ Toshiya Hari upgraded TER to buy with a $107 price target. The analyst comments “We believe increasing semiconductor test times stemming from growth in device complexity and further adoption of Teradyne’s Industrial Automation solutions (i.e. collaborative robots, autonomous mobile robots) will drive through-cycle growth that exceeds what the company has achieved historically.” He expects the announcement of its updated long-term financial goals in late January to help crystallize the story and serve as a positive catalyst.
AT&T is in talks with private-equity firms, including Apollo Management, to sell a significant minority stake in its pay-TV businesses, including DirecTV, CNBC reported. AT&T Now and U-Verse pay-TV businesses are also on the shelf. Final bids are due in early December. Although valuations haven’t yet been determined, a deal may value DirecTV at less than $15B including debt, says the report. AT&T bought DirecTV in 2015 for $67B including debt.
Meanwhile cable giant Comcast Corp is in talks to team up with Walmart to develop and distribute smart TVs, according to a Wall Street Journal report. The report said that the move comes as Comcast is looking to expand its business in the growing video-streaming space.
Turning to earnings, Super Micro Computer is rocketing 13% higher right now after the IT company reported stellar earning results for the fiscal first quarter. Q1 EPS of $0.59 easily beat the consensus of $0.16, with revenue of $762.25M. “We view the report and the guide as constructive. Near-term estimates are going higher despite lack of GM expansion, but we are also of the opinion that overall revenues could scale from here by as much as 2x given the capacity planned to come on line over the next year” commented Susquehanna analyst Mehdi Hosseini.
In healthcare news, Pfizer has kicked off a Phase 2b study of vupanorsen (ANGPTL3) in statin-treated patients with elevated non-high-density lipoprotein cholesterol and triglycerides (TGs). The study will evaluate the effectiveness of various doses of vupanorsen to determine potential future development.
