Your Thursday Blip 9/10/20

Your Thursday Blip 9/10/20

Stocks opened the day with a move to the upside but then after amateur hour ended the rally stalled and turned tail with no apparent catalyst other than news about increasing odds that Britain will leave the EU in October with a no-deal Brexit. At the close the Dow was down 405 points at 27,534 on heavy trading volume meaning the elephants were moving to the sidelines. IBD has markets in “rally under pressure” and today’s high volume reversal is confirmation that we could be entering a bumpy period in stocks.
Mall operators Simon Property Group and Brookfield are close to wrapping up a deal to purchase JC Penny out of bankruptcy for $800 million. The deal consists of $300 million in cash and the assumption of $500 million in debt. If approved, it avoids liquidating 650 stores and laying off 70,000 people. As part of the deal several hedge funds and private equity firms are going to forgive some of CJ Penny’s debt in exchange for ownership interests in stores and distribution centers.
After taking over as head of British Petroleum six months ago, CEO Bernard “Bernie” Looney announced a tectonic shift in that the company will reposition itself as a renewable power business in the years to come. In line with this statement the company announced it was buying 50% of the US assets of the Empire Wind and Beacon Wind developments in New York and Massachusetts from Equinor which is an oil and gas firm based in Norway. BP plans to invest $5 billion per year in renewable energy assets. There is also talk locally that the BP Cherry Point refinery near Ferndale, WA will be converted into making “clean diesel” which is a new type of fuel based on biodegradable material like wood pulp and corn stalks instead of petroleum.

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