T3’s Take 3: Stocks Drop Ahead of Epic Trump vs. Clinton Showdown


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1) Disney for Twitter? Seriously?

Twitter (TWTR) shares got a huge lift on record options volume Friday on rumors that the company could be acquired by Google (GOOGL) or Salesforce.com (CRM).

Today, a host of analysts and commentators threw water on the rumors, and the stock was even downgraded by Oppenheimer, driving some profit-taking.

But this afternoon, Bloomberg reported that Disney (DIS) is working with an adviser on a potential Twitter bid, sending the stock up all over again.

Presumably, Twitter’s real-time news and data feeds could be integrated into Disney media properties like ABC and ESPN.

However, a T3 Twitter poll indicates that trader still think Google (GOOGL) is the most likely buyer, assuming it happens at all:

2) Bank Scare Drives Downside

German Chancellor Angela Merkel ruled out state assistance for Deutsche Bank (DB) before next year's national election, which hit the stock hard. Deutsche has been fined $14 billion by the US Department of Justice for its mortgage-backed securities practices, which could cause liquidity problems for the bank.

That sent European equities down this morning, setting the tone for the US.

The S&P 500 fell -0.9% to 2146.10, with the Nasdaq Composite and Russell 2000 making similar moves.

US bank stocks led the decliners’ column, following their European counterparts.

Gold mining stocks fell after precious metals slipped in the afternoon.

On the plus side, crude oil and energy stocks pushed higher on continued chatter about a possible OPEC output freeze.

3) Trump vs. Clinton

The first Presidential debate between Donald Trump and Hillary Clinton will be held tonight.

Aside from the general market fallout, traders will especially be interested in how health care and drug stocks perform tomorrow.

One major reason biotech (IBB) has rallied in recent weeks was Hillary Clinton’s pneumonia diagnosis.

Since she has been an outspoken critic of rising drug prices — specifically targeting Mylan’s (MYL) Epipen — she is seen as an enemy of biotech and big pharma.

Her illness boosted Trump in the polls, which in turn gave biotech a reprieve.

So if Clinton scores a clear victory, drug and biotech stocks are likely to fall.

And obviously, the reverse is likely to be true if Trump wins.

Tuesday’s Trading Calendar

US Economics (Time Zone: EDT)

09:00 S&P CoreLogic CS US HPI MoM SA (Jul): prior 0.21%
09:00 S&P CoreLogic CS 20-City NSA Index (Jul): prior 189.87
09:00 S&P CoreLogic CS 20-City MoM SA (Jul): exp. 0.00%, prior -0.07%
09:00 S&P CoreLogic CS 20-City YoY NSA (Jul): exp. 5.10%, prior 5.13%
09:00 S&P CoreLogic CS US HPI NSA Index (Jul): prior 182.42
09:00 S&P CoreLogic CS US HPI YoY NSA (Jul): prior 5.07%
09:45 Markit US Services PMI (Sep P): exp. 51.2, prior 51
09:45 Markit US Composite PMI (Sep P): prior 51.5
10:00 Consumer Confidence Index (Sep): exp. 99, prior 101.1
10:00 Richmond Fed Manufact. Index (Sep): exp. -2, prior -11
11:15 Fed Vice Chair Fischer Discusses Why Study Economics?

Global Economics

04:00 EUR M3 Money Supply
20:20 AUD RBA Assist Gov Edey Speaks


Before Open:

None of significance

After Close:

Cintas (CTAS)
Nike (NKE)