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U.S. crude stockpiles hit record high for a third week, gasoline demand jumps – EIA
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Dell VMware Spinoff Debated by Street as Real or ‘Head Fake’
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Nasdaq Sends Second Delisting Notice to Luckin Coffee, Shares Sink
Luckin Coffee Inc announced that the Nasdaq has sent a de-listing notice to the company after it missed to file its annual financial report, dragging down its share about 85% since April.
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U.S. probes touchscreen failures in Tesla Model S cars
The U.S. National Highway Traffic Safety Administration (NHTSA) said Tuesday it had opened an investigation into 63,000 Tesla Model S cars after reports of media control unit failures that led to loss of the use of a touchscreen. The complaints said the media control unit failures allegedly fails prematurely due to memory wear-out. NHTSA said Tesla used the same unit in 159,000 2012-2018 Model S and 2016-2018 Model X vehicles built by Tesla through early-2018.
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Wirecard Wins Short Reprieve as Banks Scan Long-Term Damage
(Bloomberg) — Wirecard AG won a short reprieve from the lenders on its 1.75 billion euros ($2 billion) revolving credit facility after banks decided to assess the embattled company’s long-term viability before telling it to repay the loan.Advisory firm FTI Consulting is monitoring Wirecard’s compliance with the loan terms as lenders sift through documents and speak with stakeholders including Visa Inc. and Mastercard Inc. to decide how best they can secure the highest repayment, people familiar with the matter said. A standstill agreement is only expected to last a short period before lenders make a final decision, the people said, asking not to be identified discussing the private information.Wirecard earlier this week said that 1.9 billion euros ($2.15 billion) it previously reported as cash on its balance sheet probably doesn’t exist, triggering a collapse in shares and a criminal investigation into how the money went missing. The revelations are rippling across the financial system, with about 15 lenders now grappling with the extent of potential losses. ABN Amro Bank NV, Commerzbank AG and ING Groep NV are among the lead banks among lenders that have given Wirecard about 1.6 billion euros in credit out of the total facility, Bloomberg has reported.Wirecard shares have cratered and ex-Chief Executive Officer Markus Braun surrendered to police after an arrest warrant was issued. He’s since posted bail and is no longer in custody. In an indication of the company’s worsening situation, Moody’s Investors Service withdrew Wirecard’s credit ratings altogether on Monday after cutting it six notches at the end of last week.Bank of China, which is a lender in the group, is considering terminating the loan, Bloomberg has reported.The situation puts enormous pressure on Interim CEO James Freis to reassure Wirecard’s business partners. It has licenses with Mastercard, Visa and JCB International, through which its banking arm issues its credit cards. But time is running out quickly as he seeks to ensure clients end continue their business relationships with the German company.One option that has come up for the banks is swapping debt for equity in the company, one of the people said. Wirecard has also said it’s considering selling parts of the business as one way forward. Wirecard euro bonds maturing in 2024 fell further on Wednesday, to trad at a record low of 21.67 cents on the euro.A spokesman for Wirecard said the company will not be issuing statements about its situation. A representative for FTI declined to comment.(Adds details on bank members in table and on Bank of China’s position in fifth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
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Tesla’s ‘Overvalued’ Stock Being Falsely Driven By ‘Tech-Oriented Investors,’ Morgan Stanley Says
"Tech-oriented investors" are driving Tesla Inc.'s (NASDAQ: TSLA) stock price higher without understanding the implications of running a car company, Morgan Stanley analysts said in a note Tuesday, as reported by Forbes.The Tesla AnalystMorgan Stanley's Adam Jones has maintained his previous rating of "underweight" on the company's stock with a price target of $650.The Tesla ThesisJones noted that it is extremely unlikely for Tesla to justify its current stock price within the next decade.Morgan Stanley forecasts Tesla to produce 2 million electric vehicle units annually for the next 10 years. At a stock price of $1,000, the automaker's stock is "discounting roughly 4 million units" by 2030, Jones said, according to Forbes.False Comparison With Tech GiantsTesla's stock is largely being driven by investors who draw a false comparison of the company with established technology companies and ignore the set of risks that come with running a car company, Jones suggested.To be able to draw such a comparison, "one would have to consider (or ignore) significant inherent differences in Tesla's business model and capital intensity," the Morgan Stanley analyst wrote, according to Forbes."One must also take into account many of Tesla's business objectives face a degree of execution risk that may be significantly higher than many of the more proven/mature companies in this analysis."What ElseGLJ Research founder Gordon Johnson similarly suggested on Benzinga's PreMarket Prep show earlier in the day that he was bearish on Tesla's stock.TSLA Price ActionTesla shares closed 0.75% higher at $1,001.78 on Tuesday. The shares traded nearly 0.5% lower in the after-hours session at $997.Latest Ratings for TSLA DateFirmActionFromTo Jun 2020Goldman SachsDowngradesBuyNeutral Jun 2020Morgan StanleyDowngradesEqual-WeightUnderweight Jun 2020WedbushMaintainsNeutral View More Analyst Ratings for TSLA View the Latest Analyst Ratings See more from Benzinga * Tesla Shareholders Meeting, 'Battery Day' Moved To September * Bitcoin Scammers Used Elon Musk's Name To Profit M Over Two Months * Tesla Asks Texas For Tax Incentives As It Proposes To Start Construction For New Factory By Q3(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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Philippines probing people linked to Wirecard saga, ex-board member ‘may still be here’
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De Grey Mining share price up 25%, hitting 9-year high
The De Grey Mining Limited (ASX: DEG) share price was up 25% on Wednesday, hitting a 9-year high of 84 cents. This came 2 days after the company announced positive drilling results at its Hemi site in Western Australia.
What were the results?
The drilling result included near-surface, broad, and high grades intersected at Aquila.
At another drilling location 400m West of Aquila, the company identified near-surface gold in aircore drilling. Drilling results included 33m @ 1.5g/t Au from 64m and 20m @ 0.9g/t Au from 46m. Follow-up drilling to test further depth and lateral extensions at Aquila has also commenced with 6 drill rigs now operating.
De Grey Exploration Manager, Phil Tornatora, said:
“The Aquila style gold mineralisation identified in highly altered intrusion 400m to the West is an exciting and significant development as it opens up the overall strike potential of the deposit. The broad high grade mineralisation announced today is particularly encouraging demonstrating the potential to rapidly add to Aquila’s gold endowment.
“We are now targeting diamond drilling to extend Aquila to at least 300m below surface along the entire strike of the deposit. The potential to extend Aquila a further 400m to the West under an interpreted shallow veneer of sediments is an exciting development and will also be targeted. Similiar potential remains to be tested to the East under the sediment contact.
“Diamond core assays of depth extensions below the recent high grade intercepts are in the lab with results expected shortly. Stepout extension diamond drilling is on-going with a further 8 pre-collars already completed. A second RC rig arriving next week will help accelerate drilling on all mineralised zones at Hemi.”
The De Grey Mining share price
The De Grey Mining share price is up a massive 2041% since its 52-week low of .039 cents. Its share price has returned 1506% since the beginning of the year. The De Grey share price has almost doubled in June from 44 cents at the beginning of June to 84 cents on Wednesday.
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More reading
- Why the risks of a market correction for the ASX 200 is rising
- PharmAust share price soars 22% on shareholder update
- 3 of the best ASX growth shares to buy today
- Should you wait for another market crash to invest in ASX shares?
- ASX 200 finishes higher, Afterpay hits new record
Motley Fool contributor Chris Chitty has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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Why the risks of a market correction for the ASX 200 is rising
ASX investors may feel like they are stuck in no-man’s land! The S&P/ASX 200 Index (Index:^AXJO) is struggling to convincingly break above 6,000 but bargain hunters won’t let the market fall too much either.
It’s a nail biting time as we are torn between hope that the worst of the economic impact from COVID-19 is behind us and fear that the share market is caught in irrational exuberance.
While I am siding the bulls in this Mexican standoff, Macquarie Group Ltd (ASX: MQG) is warning that the risks of a market correction are rising.
Swamped by a second wave
There are three reasons why the broker believes the S&P 500 will fall, which will likely pull our market down too.
First is the prospect of a second wave of coronavirus infections. Macquarie doesn’t think the chance of a significant rise in COVID-19 cases is very high and a second wave of shutdowns is unlikely.
But it did note that Google data points to an increasing risk of this happening with searches for COVID-19 on the rise. There is a 93% correlation between such searches and the S&P 500, although this correlation has been weaker in more recent times.
Liquidity risk
The second factor is the US Federal Reserve (Fed), which recently withdrew liquidity from the market.
“The Fed’s balance sheet contracted last week, driven by reductions in Repo and Swaps,” said Macquarie.
“As both were introduced to ensure smooth market functioning, the market has been less concerned by these falls.
“But when Fed liquidity has been a key support for equities, further shrinking of the Fed’s balance sheet would add to the risk of a correction.”
Optimistic valuations
Lastly, valuations are causing concern to the broker who noted that the forward price-earnings (P/E) for the ASX 200 is 19.3x. This is 3% above its pre-pandemic high.
Even if you looked out the following year, the forecast P/E dips to 17 times, and that’s a mere 4% below the high before COVID-19.
“High valuations alone do not cause a correction, but they do make the market more susceptible to negative surprises,” added Macquarie.
“Too rapid withdrawal of fiscal stimulus would be a negative surprise for the market.”
Reasons to be optimistic
The warning from the broker isn’t what many investors want to hear, but there is a silver lining. If we do experience a big pullback, the fall may not be as bad as the bears are anticipating.
The broker estimates that the S&P 500 would fall by 6% to 7% but the ASX will not fall as much as it’s managing the coronavirus risks better.
Further, the earnings per share (EPS) rebound is going better than what many sceptics expect.
“Net EPS revisions have shown a V-shaped recovery, supporting stocks. From a low of nearly 80% net EPS downgrades on April 22, net EPS downgrades were down to 15% on June 22,” said Macquarie.
This means the August profit reporting season may not turn out to be a disaster, as what many fear. Macquarie’s estimates suggest net revisions could continue to improve in the upcoming results season.
All the more reason to buy the dips!
3 “Double Down” Stocks To Ride The Bull Market
Motley Fool resident tech stock expert Dr. Anirban Mahanti has stumbled upon three under-the-radar stock picks he believes could be some of the greatest discoveries of his investing career.
He’s so confident in their future prospects that he has issued “double down” buy alerts on each of these three stocks to members of his Motley Fool Extreme Opportunities stock picking service.
*Extreme Opportunities returns as of June 5th 2020
More reading
- Should you wait for another market crash to invest in ASX shares?
- ASX 200 finishes higher, Afterpay hits new record
- The latest ASX 200 stocks to be slapped with a broker downgrade
- 3 ASX shares I’d buy if the market crashes again
- Is the share market facing another February 2020 moment?
Motley Fool contributor Brendon Lau owns shares of Macquarie Group Limited. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The post Why the risks of a market correction for the ASX 200 is rising appeared first on Motley Fool Australia.
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PharmAust share price soars 22% on shareholder update
The PharmAust Limited (ASX: PAA) share price had an impressive run on the market today, finishing 22.22% higher at 16.5 cents.
PharmAust is a clinical-stage oncology company that is developing targeted cancer therapeutics for humans and animals.
The company’s lead drug candidate is monepantel (MPL), a novel inhibitor of the mTOR pathway which is a key driver of cancer.
Today’s rise comes as the company released a shareholder update, which summarised recent developments:
MPL shows “remarkable” results against COVID-19
In April, PharmAust began working with the Walter and Eliza Hall Institute of Medical Research to investigate the effects of MPL and monepantel sulfone (MPLS) on the SARS-CoV-2 virus that causes COVID-19 infections.
As disclosed in an ASX release on 18 June 2020, repeat experiments demonstrated that “infectivity of SARS-CoV-2 virus particles can be suppressed by up to 95% in cell structures by either MPL or MPLS”.
Commenting on the results, Walter and Eliza Hall Institute researcher Professor Marc Pellegrini said:
“These exciting repeat results validate the results of the initial test and form strong grounds for progressing the drug to the next step. Demonstrating twice, that infectivity of SARS-CoV-2 virus particles can be suppressed by up to approximately 95% in cell cultures is a remarkable outcome.”
As for next steps, PharmAust will prepare an executive summary and investigator’s brochure to permit discussions with clinicians about a Phase I trial. The trial would involve a small number of human patients to test the efficacy of MPL as a treatment for COVID-19.
MPL canine trial achieves successful anti-cancer outcome
The next section of today’s shareholder update relates to a canine trial.
As announced on 12 May, PharmAust achieved a successful outcome in the veterinary Phase II clinical trial investigating the effects of MPL on dogs with treatment-naïve B cell lymphoma.
The company advised today that a dossier will be presented to the MPL compound owner and option partner, Vet Major, in July 2020. This will provide Vet Major with the opportunity to activate its 6-month exclusive option over the licensing of MPL for veterinary uses.
Phase II human cancer trial
PharmAust also confirmed today it continues to make progress towards the evaluation of MPL in human trials.
The company completed a Phase I clinical trial at the Royal Adelaide Hospital in 2015.
PharmAust has since conducted further tablet formulation and pharmacokinetic studies. It has also investigated changes in tablet size to enable more specific targeting of calculated optimum dose levels.
With this, the company is aiming to conduct a third GMP-grade manufacture program for MPL tablets in or around Q3 2020 to cater to future human trials.
PharmAust is also seeking to identify a suitable clinical oncology unit to evaluate the new MPL tablet in humans in a Phase II trial.
Epichem
Finally, PharmAust provided an update on its wholly-owned subsidiary, Epichem.
Epichem is a profitable medicinal and synthetic chemistry company with expertise and capacity in the field of drug development, discovery, and design.
Today, PharmAust revealed that Epichem is on track to deliver $3.46 million revenue in FY20. This is an increase on the $3.34 million projected revenue forecast provided back in January.
After today’s jump, PharmAust’s market capitalisation is sitting a touch under $50 million. If you’d rather invest in much larger and more liquid companies, check out the ASX growth shares in the free report below.
3 “Double Down” Stocks To Ride The Bull Market
Motley Fool resident tech stock expert Dr. Anirban Mahanti has stumbled upon three under-the-radar stock picks he believes could be some of the greatest discoveries of his investing career.
He’s so confident in their future prospects that he has issued “double down” buy alerts on each of these three stocks to members of his Motley Fool Extreme Opportunities stock picking service.
*Extreme Opportunities returns as of June 5th 2020
More reading
- 3 of the best ASX growth shares to buy today
- Should you wait for another market crash to invest in ASX shares?
- ASX 200 finishes higher, Afterpay hits new record
- Bellevue Gold share price hits record high on metallurgical testing
- 3 ASX payments shares that could double your money
Motley Fool contributor Cathryn Goh has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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