 The Market Sum | Insight after the bell
By Caleb Silver, Editor in Chief Tuesday's Headlines 1. Markets Meander on Mixed Corporate Earnings 2. Biogen Shares Soar on Alzheimer's Drug Hopes 3. McDonald's Misses as Sales Fall 4. Palladium Prices Keep Rising 5. The IMF Steps Up Climate Change Policies Markets Closed
 Image: Getty Images
Markets Today U.S. equity markets spent much of Tuesday in moderately positive territory as a continued spate of mostly better-than-expected earnings results from major companies, like Procter & Gamble (PG) and United Technologies (UTX), helped boost investor sentiment. Late in the day on Tuesday, though, markets began to falter as major earnings misses from companies including McDonald's (MCD) and Travelers (TRV) weighed more heavily on the major stock indexes. Also helping to pressure stocks were further developments in the UK's ongoing Brexit saga. When the dust settled, the major market indexes all closed significantly in the red.
In somewhat of a roller coaster move for markets (most notably for the British pound) on Tuesday, the UK Parliament first voted in principle to approve Prime Minister Boris Johnson's Withdrawal Agreement Bill, handing Johnson a big win. Shortly thereafter, though, the same Parliament voted to reject an expedited timeframe for the bill. As a result, Johnson announced that he would now need to pause the process, pending further discussions with the European Union. This will likely result in yet another extension of the Brexit deadline.
As for earnings, here's a sample from today's report cards:
The tide has turned for McDonald's since mid-July, as a series of promotions did not deliver on the company's expectations. It sat out the fried chicken sandwich battle over the summer and stood by as Burger King stepped into the meat-less burger spotlight with its launch of the Impossible Whopper. Burger King, which is owned by Canada's Restaurant Brands International, has helped its parent company sprint out to gains of 31% for the year, outpacing McDonald's 14% rise and a 23% gain for the ETF XLY, which tracks the consumer discretionary sector.
chart courtesy YCHARTS  Biogen Soars on Alzheimer's Treatment Hopes
The day belonged to drugmaker Biogen. Shares rose the most in 20 years after the company reported that Aducanumab, its Alzheimer's treatment, was ready to start the regulatory approval process. This came as a surprise to investors as just seven months ago, shares fell 29% after Biogen and Eisai, its Japan based partner on the drug, decided to discontinue Phase 3 trials as it looked like they might be ineffective. After additional testing and consulting with the FDA, Biogen has decided it will proceed with the Phase 3 trials after all.
I'm no expert, but Anton Porsteinsson, a director at the University of Rochester Alzheimer's Disease Care, Research and Education Program, is. He said, "This large dataset represents the first time a Phase 3 study has demonstrated that clearance of aggregated amyloid beta can reduce the clinical decline of Alzheimer's disease, providing new hope for the medical community, the patients, and their families."
In the U.S., over 5.8 million people are diagnosed with Alzheimer's, and that number is expected to rise to 14 million by 2050, according to the Alzheimer's Association. It's the 6th leading cause of death in this country.
infographic courtesy alz.org  If Aducanumab clears all its trials and is eventually approved by the FDA for clinical use, it has the potential to be one of the biggest drug blockbusters in history. Those are big 'If's, and Alzheimer's has proven to be a very challenging disease to combat. But today's announcement appears promising for the millions of people who suffer from it, and the millions more who care for them. Blockbuster drugs, like Keytruda, Lipitor and Humira are generally considered to have achieved sales of $1 billion or more. Some, like Humira, are nearing $20 billion in sales. These were the top selling drugs in 2018, and their projected sales by 2024, courtesy drugchannels.net.  Heavy Metal Palladium is one of 2019's Top Assets
Palladium, that silvery-white, corrosion-resistant metal is outshining even gold in 2019. Prices are up close to 45% as shortage concerns push buyers to lock in future prices at higher and higher costs. Produced through nickel mining and found in sulfide minerals such as braggite, Palladium is used for catalytic converters, which are a required component in automobiles in most countries to reduce emissions. It is also used in electronics casings such as laptops and smartphones.
Unlike gold, which is also used in manufacturing, Palladium is not necessarily used as a safety investment to diversify away from stocks and other securities. It's a functional metal used in manufacturing, and we are apparently using a lot of it. Investors can access it through ETFs and commodity funds. Traders buy and sell it through the futures market, and it has been a wild, but mostly uphill ride for the past 5 years as smartphones have become ubiquitous.
Here's a 5 year chart, courtesy tradingview.com.  Bonus fact: Palladium is named after the asteroid Pallas, in turn named after the Greek goddess of wisdom, Pallas, more commonly known as Athena.
The IMF Leans Into Climate Change The International Monetary Fund is examining the impact of climate on the world's financial markets and whether it is priced into market valuations, according to a Reuters report.
The IMF is planning a country by country, sector by sector analysis of the financial impacts of climate change across markets to determine the timing and scope of the risks. Among the sectors and securities the IMF and other organizations will be looking at are the insurance and re-insurance industries, and residential mortgage backed securities (RMBS), among others.
The IMF, The World Bank, several governmental organizations and country pension funds are pushing for carbon taxes and a framework to 'green the financial system', by accurately identifying, disclosing and pricing in risks from global warming and other effects of climate change. (The U.S. is not among the participants, having pulled out of the Paris Accord in 2017). They've launched the NGFS, The Network for Greening the Financial System to focus on these areas:
1. Integrate climate-related risks into financial stability monitoring and micro‑supervision;
The IMF's blog on Climate Change is worth a read if you are interested to see its perspective on climate change and the financial impacts it carries with it.
Here's an infographic from that blog, which puts the price of carbon emissions into perspective. 
(chart courtesy YCHARTS)  Biotech firm Biogen gained 26% today after announcing that it was going ahead with trials for an Alzheimer's medication, see above for more details. Motorcycle manufacturer Harley-Davidson rose 8% on an earnings beat. Clothing maker Under Armour jumped 6.9% on news that its founder and CEO Kevin Plank, was stepping down in favor of its COO.  Toy-maker Hasbro plunged 16.8% after missing sales and earnings this quarter. Hasbro claims much of the decline in sales was due to the effects of tariffs from the ongoing trade war with China. Semiconductor manufacturer Texas Instruments dropped 10.1% on an earnings miss.  image courtesy forbes.com
Word of the Day Given the news that WeWork founder and former CEO Adam Neumann will sell $1 billion of his private shares of the company back to SoftBank, its main investor, and receive a $500 million loan to pay off an existing loan, and receive $165 million for 'consulting services', just two weeks after he was asked to step down as CEO, this term seems appropriate today.
A golden parachute consists of substantial benefits given to top executives, typically when the company is taken over by another firm, and the executives are terminated as a result of the merger or takeover. Golden parachutes are contracts with key executives and can be used as a type of anti-takeover measure, often collectively referred to as poison pills, taken by a firm to discourage an unwanted takeover attempt. Benefits may include stock options, cash bonuses, and generous severance pay.
P.S. Neumann will still remain one of the top individual shareholders of We.  Today in History October 22, 1962 Today in 1962, President John F. Kennedy announced that he was beginning a blockade of Cuba in response to the Soviet Union positioning missiles on the island. The missiles were first discovered on October 15th by intelligence analysts who were analyzing data collected by a U-2 spy plane. The confrontation between the U.S. and the Soviet Union, known as the Cuban Missile Crisis, would continue until October 28th, when Soviet Premier Khrushchev announced that he would remove the missiles from Cuba.
https://www.history.com/this-day-in-history/cuban-missile-crisis
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Tuesday, October 22, 2019
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