Market Outlook – September 28, 2018

Relief Rally by U.S. Stocks

 

On Thursday, the Dow Jones Industrial Average and the S&P 500 Index snapped their multi-day losing streaks. Solid economic data boosted investor confidence just a day after the Federal Reserve hiked interest rates for the third time in 2018.

The blue-chip Dow bounced back from a three-day decline to gain 54.65 points (+0.21%). The S&P 500 advanced 8.03 points (+0.28%) to recover from a four-day slide. The Nasdaq Composite Index advanced 51.60 points (+0.65%).

U.S. SEC Wants Musk Out of Tesla

 

The U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Tesla Inc.’s (TSLA) CEO Elon Musk on Thursday. The U.S. regulator is accusing Musk of fraud and is also seeking to remove him from his position as head of the electric car company. They cited last month’s “false and misleading” tweets by Musk on taking Tesla private.

Musk is the public face of Tesla and with him stepping down would deal a big blow to the car maker whose market value is more than $50 billion. Investors have confidence on Musk’s leadership too. Tesla shares dropped 12% in after-hours trading.

Judge Orders Goldman Sachs & Others to Face Antitrust Case

 

Goldman Sachs Group Inc. (GS), JPMorgan Chase & Co. (JPM) and four other large banks were ordered by a U.S. judge to face an antitrust lawsuit by investors. U.S. District Judge Katherine Polk Failla in Manhattan said on Thursday the banks conspired to stifle competition in the nearly $2 trillion stock lending market.

Judge Failla also rejected the banks’ arguments that the investors, led by several pension funds, made implausible allegations and sued too late, and that the defendants’ activity was reasonable.

The other accused banks are Bank of America Corp. (BAC), Morgan Stanley (MS), Credit Suisse Group AG, and UBS Group AG. The plaintiff said that the banks were conspiring since 2009 to keep the stock lending market “in the stone age” by boycotting the startup platforms AQS, Data Explorers and SL-x.

USAF Awards Boeing with $9.2 Billion Contract

 

The U.S. Air Force has chosen Boeing Co. (BA) to build their next training jet. USAF’s announcement on Thursday also disclosed the contract to be worth up to $9.2 billion over the life of the program. Boeing teamed up with Sweden’s Saab AB to develop the new plane for the program.

The tandem beat Lockheed Martin Corp. (LMT) and Leonardo DRS.  The Air Force plans to purchase 351 of the jets plus 46 simulators. With additional purchase options, the Air Force could buy as many as 475 of the jets and 120 simulators.

The Air Force expects the first jets to be delivered in 2023. The program is expected to reach full operation by 2034.

Eli Lilly Wins FDA Approval on Migraine Drug

 

Eli Lilly & Co. (LLY) proudly announced late Thursday that the U.S. Food and Drug Administration (FDA) approved its drug Emgality for the preventive treatment of migraine in adults.

The migraine drug is delivered through a once-a-month, self-administered, subcutaneous injection. Eli Lilly said the Emgality is one of three in a new class of drugs recently approved for migraines. The drug will be available  following after approval.

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