Oil prices declined on Friday, with U.S. crude down 3%, as investors and traders waited anxiously to see if the U.S. oil rig count will fall even more while OPEC members indicated they would do little to cut output. Declining share prices on Wall Street, which have given guidance to oil recently, also pressured crude futures, addition with reduced political turmoil in the Middle East from United States-Russia discussions on Syria. The dollar bounced to contain oil and additional commodities, following Thursday’s decision by the Fed to keep U.S interest rates unchanged pushed the currency to a 21 day low earlier.
This directed attention largely on oil services firm Baker Hughe’s weekly United States oil rigs report set at 1:00p.m EDT. U.S oil drillers have slashed rigs over the last two weeks, a signal that renewed price drops since July possibly be slowing some from returning to the well pad in large way. “With U.S. output shifts still very much under the microscope, today’s oil rig counts could be a key determinant as to how the complex finishes this week,” said Jim Ritterbusch, analyst at Ritterbusch & Associates. “We expect another decline but one downsized from recent double digit decreases,” he stated. U.S crude futures CLcl fell $1.20, or 2.6%, at $45.70 per barrel.
Next, OPEC member Kuwait stated it would take time for the oil markets to correct itself, representing the group would still defend market share regardless of production cuts to boost prices. Additional OPEC sources stated they project oil will increase a maximum $5 a barrel annually to reach $80 by the year 2020. Iran’s deputy oil minister repeated Iran’s plans to get back its oil production share once nuclear-related sanctions are gone against Tehran, enhancing that new oil contracts would be released in coming weeks. Russia was the only main producer to state on Friday it was probably going to cut production at below $40 a barrel.
Top 3 Gainers: Zynga (NASDAQ:ZNGA), Eros International (NYSE:EROS), Borqs Technologies’ (BRQS)
Zynga (NASDAQ:ZNGA) is up 2.5% after Benchmark reiterated its Buy rating in a look-ahead at Q2 earnings. The firm’s expecting a beat and solid guidance for Q3, and it’s raising its guidance for the fiscal year.
Tailwinds from the pandemic won’t dissipate easily, Benchmark suggests, and the videogame maker’s acquisition of Peak (and with it new “forever franchises” in Toon Blast and Toy Blast) will drive audience, bookings, margins and free cash flow, it says. The firm has an $11 price target, now implying 14% upside.
Eros International (NYSE:EROS) is up 5.8% today, making up the last week’s lost ground, after news that its streaming service Eros Now is partnering with Sony India (SNE +2.3%).
That will mean Eros Now’s app is pre-installed on selected Sony smart televisions in India, along with availability on a large base of existing models (Bravia E series and newer).
The country over the past year has seen a 25% growth in demand for smart TVs, fueled by overall industry growth of 15%, to a record 15M units/year.
Borqs Technologies’ (BRQS) personal safety tracker sees strong market with increased orders from the electronics retail chain in the US.
The boost in product demand comes ahead coronavirus pandemic that provides company to expect delivery of 250K units this year. It reflects over 3x the volume delivered in 2019, the year of its launch.
Borqs’ mobile personal safety devices designed particularly for senior citizens come with panic button, location tracking, and fall detection.
Biotech movers: Pfizer Inc. (PFE), Celgene Corporation (CELG)
Pfizer Inc. (PFE) said on Thursday it received a request for documents as part of a U.S. investigation related to quality issues involving the manufacture of auto-injectors at its Meridian Medical Technologies site.
Pfizer, in a regulatory filing, said it would be producing records in response to the civil investigative demand from the U.S. Attorney’s office for the Southern District of New York.
Meridian, a unit of Pfizer that manufactures EpiPen injectors used to deliver an emergency allergy antidote, has been hit by a series of manufacturing problems in recent years. Mylan NV, which markets EpiPens, has recalled tens of thousands of the devices after complaints that some had failed to activate.
Bristol-Myers Squibb has been meeting with shareholders in Boston and New York over the last two weeks to try to salvage its $74 billion purchase of cancer drugmaker Celgene Corporation (CELG), the biggest acquisition announced so far this year.
The deal, announced in January, was hard sell to Bristol shareholders from the start. The acquisition adds about $32 billion in fresh debt to Bristol’s balance sheet while assuming $20 billion in Celgene’s debt, the companies said at the time. After factoring in debt, the acquisition was the largest health-care deal on record, according to data compiled by Refinitiv.
Now, hedge funds Wellington Management and Starboard Value say the deal doesn’t sit well with them. Bristol has sent executives to New York to meet with institutional investors several times over the last two weeks and met with investors in Boston on Wednesday and Thursday, according to a person who briefed on the meetings.
Bristol-Myers declined to comment.
Big Losers: Corbus Pharmaceuticals Holdings, Inc. (CRBP), Petróleo Brasileiro S.A. – Petrobras (PBR)
Corbus Pharmaceuticals Holdings, Inc. (CRBP)’s shares slumped as much as 16% to $6.94 on huge volume. The stock has been showing intense sell off suddenly after a bearish article on seekingalph.com by Alpha Exposure.
The article stated that Corbus has ties to investors convicted of or alleged to have committed securities fraud. We believe lenabasum has failed its major trials in SSc and CF. Lenabasum was also denied Breakthrough Therapy Designation in SSc. We believe lenabasum will fail in its pivotal SSc and Phase 2b CF trials. We are short Corbus with a price target of $0.50.
Petróleo Brasileiro S.A. – Petrobras (PBR) is expanding its ambitious divestment program and has “bold” plans for sales, the Brazilian state-run oil company’s chief executive said after the firm posted its first annual profit in five years.
On a conference call with analysts to discuss fourth-quarter results, CEO Roberto Castello Branco said selling non-core assets will be key to deleveraging.
Petrobras, as the company is known, can reduce its ratio of net debt to earnings before interest, taxes, depreciation and amortization, or EBITDA, to 1.5 or even to 1, he added.
The University of Chicago-educated CEO, who took the reins in early January, has long been vocal about the need to slim down the sprawling firm and focus on core activities such as exploration and production. Thursday’s comments were some of his most assertive on the matter.