Opening Bell: 7.23.20 - Dealbreaker

US weekly unemployment claims rise to 1.4m after four months of decline [Guardian]
The labor department announced on Thursday that 1.4m claims had been received last week, up 109,000 from the previous week. The previous week’s figure was also revised up by 7,000….. In the week ending 11 July the largest increases were in California, Florida and Georgia, all states struggling with rising infection rates, the labor department announced.

Hedge Fund Activists Might Just Be Good Stock Pickers [II]
According the paper, the average target company delivered excess monthly returns of about 2 percent for the first three months after the start of the campaign. And outperformance wasn’t limited to the start of the campaign: The authors found that targets also delivered significant, if smaller, excess returns over the 36-month and 60-month periods following 13D filings…. “These results confirm our hypothesis that activist hedge funds have a strong ability to identify undervalued firms as targets, and are inconsistent with the hypothesis that activist hedge funds directly cause the targets’ outperformance, as, for example, through good turnaround planning,” the authors wrote.

Tesla reports fourth straight quarter of profits [CNBC]
Tesla also reported its first full year of profitability on a GAAP basis, which means it can now be considered for inclusion on the S&P 500 index…. Musk announced that Tesla will build its next factory near Austin, Texas…. Automotive revenue declined by 4% year-over-year for Tesla from $5.38 billion to $5.18 billion, despite the company adding a new crossover SUV to its lineup, the Model Y, and opening a new plant in Shanghai in the past year.

Bitcoin Meets Banking As U.S. Bank Regulator Permits Cryptocurrency Custody [Forbes]
Today’s OCC letter clarifies that national banks have the authority to provide fiat bank accounts and cryptocurrency custodial services to cryptocurrency businesses…. “From safe-deposit boxes to virtual vaults, we must ensure banks can meet the financial services needs of their customers today," said Acting Comptroller of the Currency Brian P. Brooks. "This opinion clarifies that banks can continue satisfying their customers' needs for safeguarding their most valuable assets, which today for tens of millions of Americans includes cryptocurrency."

Want to Know Where Covid-19 May Hit Next? Watch the Apple Store Closures [WSJ]
Apple has consistently been one of the first retailers to close its doors in areas of the U.S. just as they see a surge in Covid-19 cases. WSJ tracked hundreds of store closures, coronavirus statistics and lockdown measures to piece together Apple’s shutdown strategy.

Ascena, owner of Ann Taylor and Lane Bryant, files for bankruptcy [CNN Business]
The company, which has been struggling long before coronavirus struck, said it would close all of its Catherines stores, a significant (but undisclosed) number of Justice stores and a smaller number of Ann Taylor, LOFT, Lane Bryant and Lou & Grey stores…. Ascena said it reached a deal with its creditors to reduce its debt by $1 billion, and it received $150 million in new capital to continue operating during its bankruptcy.

Wall Street doesn’t care if Trump loses. Here’s why. [WaPo]
Investors have also been lulled into complacency over the past three decades in which Americans came to embrace the idea that the only way to keep the economy competitive and growing was to put investor interests above those of everyone else…. A clean sweep in November would almost certainly reverse that process, moving the country toward a different kind of capitalism with a different purpose and a different distribution of national income. That prospect, however, is so outside the experience of today’s investors and business executives, and so at odds with their notion of how things are supposed to work, that they cannot imagine it — let alone calculate how it might reduce value of their shares…. The faux populism of the Republican Party is about to give way to the real populism of angry and vengeful Democrats. And by all appearances, the Wall Street wiseguys don’t have a clue about what’s coming their way.

Hamptons home prices skyrocket due to demand from NYC coronavirus fleers [N.Y. Post]
The Hamptons’ median sales price jumped 27.1 percent to $1.08 million during the second quarter of 2020, according to the July 23 Elliman Report, up from $850,000 over the same period in 2019. Breaking into the six figures, it is the highest median sales price recorded in the report’s history…. The average sales price in the Hamptons for the second quarter hit $2.09 million, a 21.1 percent hike from the prior year….
“There’s somewhat of a herd mentality. There was an eagerness to lock in something out of the city for the summer,” Miller said. “And when rentals weren’t available, sales were the next best thing.”

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