P Morgan says the market is doing so well, it could hit the firm’s 2020 forecast this year

Positive signs on the U.S.-China trade talks prompted investors to dive into stocks again, and J.P. Morgan believes the rally is here to stay and the market could reach the bank’s 2020 target eight months early.

“Looking ahead, given improving trade rhetoric, the market could reach our 2020 midyear price target of 3,200 sooner (by late 2019 or early 2020),” Dubravko Lakos-Bujas, the firm’s chief U.S. equity strategist, said in a note to clients on Monday.

The S&P 500 hit a fresh all-time high on Monday, supported by solid earnings and progress on trade. J.P. Morgan sees the benchmark rising about another 6% in a few months to reach its 2020 midyear target from Friday’s close at 3,022.55.

Stocks got a big boost after U.S. and Chinese officials said they were “close to finalizing” some parts of a trade agreement, paving way for a bigger deal. J.P. Morgan said hedge funds and other players will continue to ramp up their equity exposure, which will keep the rally going.

“The upside should be supported by still very low net positioning across discretionary equity and macro hedge funds, as well as systematic approaches,” Lakos-Bujas said.

If the U.S. and China decide to unwind the tariffs in place, the S&P 500 companies could see a more than 25% earnings per share growth, J.P. Morgan predicted.

“This catalyst would likely release pent-up demand from businesses and consumers. Even if existing tariffs remain in place and no new tariffs are announced, we would expect fundamentals to improve starting in 4Q,” Lakos-Bujas said.

Besides the trade optimism, seasonality is also on the bull’s side. The fourth quarter is seasonally the strongest for equities, delivering 4% return on average since 1948, according to J.P. Morgan.

Additionally, the market has been up 90% of the time in the one year run-up to a presidential election with an average gain of 12% on the S&P 500 post World War II, the bank noted.

Oil falls 1% as US inventory rises

Oil prices extended losses Wednesday after a steep U.S. crude inventory build added to worries about a possible delay in resolving the U.S.-China trade war, which has hurt global oil demand.

According to the US Energy Information Administration, US crude inventories increased by 5.7 million barrels from the previous week. US inventories are now at 438.9 million barrels, which is about 1% above the five year average for this time of year, the EIA said.

Brent crude fell $1.07 to settle at $60.52 a barrel. U.S. West Texas Intermediate (WTI) crude fell 48 cents, or 0.9%, to settle at $55.06 a barrel.

The United States and China were continuing to work on an interim trade agreement, but it may not be completed in time for U.S. and Chinese leaders to sign it next month, a U.S. administration official said.

“Selling came courtesy of the fading optimism over trade and a Fed rate cut. Risk assets were dealt a blow as market players worried that the U.S. and China would delay settling their trade differences,” PVM analyst Stephen Brennock said.

However, U.S. crude inventories fell by 708,000 barrels in the week ended Oct. 25 to 436 million, compared with analysts’ expectations for an increase of 494,000 barrels, according to the American Petroleum Institute, an industry group.

Still, crude stocks at the delivery point for WTI at Cushing, Oklahoma were up 1.2 million barrels compared to the previous week, dragging on futures prices for the benchmark.

“Stocks at the WTI delivery hub have been trending higher since late September, which has put pressure on the prompt WTI time spreads, with the December/January spread this month having shifted from backwardation to a contango,” Dutch bank ING said in a note.

Investors are also awaiting the outcome of the Federal Reserve’s two-day policy meeting this week. The Fed looks set later on Wednesday to nudge along a U.S. economy that is being hampered by slowing investment and weak growth overseas. It would be the third cut this year.

A rate cut would help support oil prices as a stronger economy typically implies higher demand for crude, while falling inventories suggest the market is coming into balance.

The Organization of the Petroleum Exporting Countries and other producers including Russia have cut oil output since January to support prices.

The U.S. government’s Energy Information Administration issues its weekly inventory report at 10:30 a.m. EDT.

Oil prices dip as U.S. crude stocks and weak Chinese data weigh

LONDON (Reuters) - Oil prices came under pressure on Thursday from rising U.S. crude oil stocks and weak factory activity in China, with few bullish factors on the horizon.

Brent crude futures were down 13 cents at $60.48 a barrel by 1338 GMT, erasing earlier gains. They had dropped by 1.6% on Wednesday and the contract is set for a monthly decline of about 0.5%.

U.S. West Texas Intermediate (WTI) crude futures were down 48 cents at $54.58. On the month, however, they are set for a rise of about 0.9%, its biggest monthly gain since June.

The front-month Brent contract for December delivery expires on Thursday. The one for January delivery was also down.

Factory activity in China shrank for a sixth straight month in October while growth in the country’s service sector activity was its slowest since February 2016, official data showed on Thursday.

A protracted trade war between China and the United States has been weighing on the demand outlook for oil.

Leaders from the United States and China encountered a new obstacle in their struggle to end the damaging trade conflict when the summit at which they were supposed to meet was canceled because of violent protests in host nation Chile.

U.S. President Donald Trump tweeted a new location would be announced soon.

A Reuters survey showed on Thursday that oil prices are likely to remain pressured this year and next. The poll of 51 economists and analysts forecast Brent crude would average $64.16 a barrel in 2019 and $62.38 next year.

Releasing third-quarter results, Royal Dutch Shell warned that uncertain economic conditions could slow its $25 billion share buyback program, the world’s largest, and had led to a downward revision to its oil price outlook.

The U.S. Federal Reserve cut interest rates for a third time this year on Wednesday, looking to bolster economic growth with a move that could also boost demand for crude.

Yet gains are likely to be capped until inventories start to show sustained declines.

U.S. crude inventories rose by 5.7 million barrels in the week to Oct. 25, the U.S. Energy Information Administration said on Wednesday, compared with analyst expectations for an increase of 494,000 barrels.

“The U.S. stock report was anything but encouraging,” PVM analysts said in a note.

The American Petroleum Institute had previously reported a decline of 708,000 barrels, raising hopes that official figures would also show a fall.

Cushioning the bearish crude data, the EIA showed gasoline and distillate inventories continued to draw.

This generator maker’s stock just soared to a record as PG&E power cuts cause business to boom

The stock opened at a new all-time high on Friday, and is up 82% for the year.

This week PG&E announced another large-scale preemptive power cut for hundreds of thousands of customers in California. PG&E is currently going through bankruptcy, and the company doesn’t seem to have an immediate solution for how to keep the power on when the threat of fire is high. So while PG&E falters, there could be much more upside ahead for Generac.

“This caught us totally off guard. We didn’t see the largest utility in the US coming out and saying ‘look our only solution is to turn the power off,’” Generac Holdings CEO Aaron Jagdfeld said Friday on CNBC’s “Squawk Box.” “The (PG&E) CEO came out I think a couple of days ago and said a decade, it could be 10 years, of this kind of activity.”

California’s once reliable power and mild weather has meant that it hasn’t traditionally been a key market for home generators. But Jagdfeld said it’s becoming a “new element for our business,” and couldn’t mask his surprise that PG&E’s only solution was to cut off power for millions of people. He said that the company has seen “three, four hundred percent increases in volumes out in California.”

Generac Holdings has a $5.6 billion market cap, and the CEO estimates that the company has about 75% market share in the residential home backup generator space. The company has installed 2 million systems in single family homes across the United States out of the estimated 52 million single family homes across the country.

The company also supplies backup power utilized by wireless companies, which the California outages has shown to be a burgeoning market.

“What’s amazing is most people don’t realize, and I think people are learning right now in California, you can’t even get some of the basic services ... I mean everyone uses a wireless device now, and those networks go dark when they don’t have power. We’re one of the largest suppliers of backup power to all of the major wireless carriers, but the penetration rates are still very low, less than 30%.”

After the stock’s stellar performance some caution might be warranted.

Canaccord Genuity’s Chip Moore said that he’s starting to see momentum “get baked in at current levels,” and that he would “look for an entry point to become more aggressive.” He has a hold rating on the stock and an $80 price target, which is about 12% below where the stock was trading on Friday.

That said, he still likes the longer-term story. “We continue to like this dominant category leader and see several notable secular drivers here,” he added.

This generator maker’s stock just soared to a record as PG&E power cuts cause business to boom

The stock opened at a new all-time high on Friday, and is up 82% for the year.

This week PG&E announced another large-scale preemptive power cut for hundreds of thousands of customers in California. PG&E is currently going through bankruptcy, and the company doesn’t seem to have an immediate solution for how to keep the power on when the threat of fire is high. So while PG&E falters, there could be much more upside ahead for Generac.

“This caught us totally off guard. We didn’t see the largest utility in the US coming out and saying ‘look our only solution is to turn the power off,’” Generac Holdings CEO Aaron Jagdfeld said Friday on CNBC’s “Squawk Box.” “The (PG&E) CEO came out I think a couple of days ago and said a decade, it could be 10 years, of this kind of activity.”

California’s once reliable power and mild weather has meant that it hasn’t traditionally been a key market for home generators. But Jagdfeld said it’s becoming a “new element for our business,” and couldn’t mask his surprise that PG&E’s only solution was to cut off power for millions of people. He said that the company has seen “three, four hundred percent increases in volumes out in California.”

And California is not the only state suffering from extreme weather patterns and a utility grid that often can’t keep up. Jagdfeld said that generators are also “flying off the shelves right now” in the North East as hurricanes and ice storms hit.

Generac Holdings has a $5.6 billion market cap, and the CEO estimates that the company has about 75% market share in the residential home backup generator space. The company has installed 2 million systems in single family homes across the United States out of the estimated 52 million single family homes across the country.

The company also supplies backup power utilized by wireless companies, which the California outages has shown to be a burgeoning market.

“What’s amazing is most people don’t realize, and I think people are learning right now in California, you can’t even get some of the basic services ... I mean everyone uses a wireless device now, and those networks go dark when they don’t have power. We’re one of the largest suppliers of backup power to all of the major wireless carriers, but the penetration rates are still very low, less than 30%.”

After the stock’s stellar performance some caution might be warranted.

Canaccord Genuity’s Chip Moore said that he’s starting to see momentum “get baked in at current levels,” and that he would “look for an entry point to become more aggressive.” He has a hold rating on the stock and an $80 price target, which is about 12% below where the stock was trading on Friday.

That said, he still likes the longer-term story. “We continue to like this dominant category leader and see several notable secular drivers here,” he added.

EU tells Facebook, Google and Twitter to take more action on fake news

One year ago, Facebook, Google, Microsoft and Twitter signed on to the EU’s “code of practice on disinformation,” a voluntary agreement that lays out steps to fight fake news on their platforms.

In a joint statement published Tuesday alongside progress reports from the companies, the EU said the impact of the “self-regulatory measures” remains unclear.

“Large-scale automated propaganda and disinformation persist and there is more work to be done under all areas of the Code,” EU Commissioners Vera Jourova, Julian King and Mariya Gabriel said the joint statement. “We cannot accept this as a new normal.”

Social media platforms like Facebook, YouTube and Twitter have faced backlash from lawmakers around the world for failing to contain the spread of fake information in election campaigns.

The EU acknowledged tech companies have taken steps to be more transparent. In its report to the EU, Facebook said it removes millions of fake accounts every day. Earlier this month, the social media giant announced it had removed four networks of fake accounts tied to Russia and Iran.

In a statement to CNBC, a Twitter spokesperson detailed the company’s efforts to tackle platform manipulation and said it discloses data relating to issues such as legal requests and rules enforcement in bi-annual transparency reports.

A spokesperson for Facebook said the company is committed to working together with “government, industry, news publishers, and our community.” “We appreciate the Commission’s extensive report, and share the same commitment to reduce the spread of online misinformation,” the statement said.

Still tech companies could soon face stricter regulations in the EU related to disinformation and illegal content online. European Commission President-elect Ursula von der Leyen has said she would prioritize a new Digital Services Act within her first 100 days in office, which would upgrade “liability and safety rules for digital platforms, services and products.”

Proposals from the European Commission, the EU’s executive arm, then need approval by the different European governments and the European Parliament, a process that can be long and complex.

In addition to the annual reports published Tuesday, the companies published monthly reports detailing their efforts to fight fake news in the lead up to the European election. The EU said it will present a comprehensive assessment of the companies’ reports in early 2020.

“Should the results under the Code prove unsatisfactory, the Commission may propose further measures, including of a regulatory nature,” the Commission said.

“As a founding partner with the European Union on its Code of Practice on disinformation, we’re proud to mark a year of progress since we signed the Code: expanded policies, products and resources dedicated to thwarting disinformation and other forms of attack on the integrity of our systems,” said Milan Zubíček, manager of government affairs and public policy at Google, in a statement to CNBC.

The Fed is expected to cut rates, but how Powell discusses the next move could rattle markets.

Federal Reserve Chairman Jerome Powell faces one of the more difficult communications challenges of his tenure Wednesday, and he risks spooking financial markets if he doesn’t get it just right.

The Federal Open Market Committee is expected to cut interest rates by a quarter point, its third cut since July. The Fed will also release a statement, which it may tweak to indicate the door remains open to further rate cuts but that it could also pause in the process.

The Fed chairman then speaks at 2:30 p.m. ET, a half hour after the statement is released. Many bond pros expect a “hawkish” message, meaning the Fed will indicate it is holding off on rate cuts as it watches to see if there is progress in the economy or in the outside events that could impact the economy, like the trade war or Brexit.

“I think, in his mind, he had had two or three insurance cuts. This is the third, and then he sits back and waits,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group.

“The question today is whether Powell is up to the task of portraying a neutral Fed when they really do not want to ease again in the near future,” notes Andrew Brenner of National Alliance.

Whatever the Fed does, it is likely to be criticized by President Donald Trump who has berated Powell and the Federal Reserve board, arguing its policy should be a lot easier.

‘Communications challenge’

Ahead of the meeting, the S&P 500 was trading at a new high, after recovering its prior high Monday. The S&P 500 was flattish Wednesday.

Treasury yields were also higher this week, signalling expectations for a hawkish Fed, meaning it plans no further rate cuts. Yields edged up Wednesday morning, following the report of third quarter growth of 1.9%, better than the 1.6% that was expected.

“It’s a really tough position...In June, they removed the word ‘patient’ and they cut at the next meeting. What they don’t want to do is set up something where they’re pre-committing to not cut if it’s needed,” said Jon Hill, rate strategist at BMO. “The Fed wants to be patient but act as appropriate, as necessary. It’s a combination of the two. They’re not saying they’re on hold, but they aren’t trying to guide the market into not expecting a December cut if the data doesn’t hold up. It’s definitely a communications challenge.”

Regardless of how the Fed words its statement, Powell’s job is made all the more difficult by the fact that there is such a wide divergence of views on Wall Street. There are Fed watchers who expect no more rate cuts this year or next, as well as those who see a recession coming and think the Fed will ultimately return to zero interest rates.

Goldman Sachs economists, for instance, expect the Fed to remove language from its statement that it will “act as appropriate” to sustain the economic recovery and also tweak the statement to indicate that Wednesday’s rate cut completes the Fed’s “midcycle adjustment.”

Yet, the fed funds futures market is pricing in about a 30% chance of a cut in December and more cutting next year..

“From our point of view, you’re likely to get a sell-off based on a Fed disappointment,” said Julian Emanuel, chief equity and derivatives strategist at BTIG.

Emanuel said he expects the Fed to cut a quarter point, but then back off promising any more cuts, though it may keep the door open just slightly. “We think the market has discounted a lot of positive news, and it’s likely to be shocked by this now,” he said.

Chance of no cut?

The issue for market pros is whether they believe the economy is weakening or not going into next year, and they are positioning for both outcomes.

Diane Swonk chief economist at Grant Thornton, said there’s a chance the Fed would not cut interest rates on Wednesday. Her theory is the Fed could cut in December, and if there is no trade deal or roll back of tariffs, it would have to cut even more next year to fight recession.

“I think there’s a better time to cut that’s more strategic. My rationale is when the market is already flirting with record highs...there might be a better time. They should hold their firepower,” said Swonk.

Stephen Stanley, Amherst Pierpont economist, said Fed officials have almost sounded like they’re not going to cut rates, but he expects there will be a cut Wednesday.

“It was a very interesting period between meetings...The vibe I was getting was they really weren’t all that excited about easing again. The committee was already divided. Some of the folks who had been in favor of easing through the first two moves were signalling they wanted to stop. [Dallas Fed President Rob] Kaplan in particular,” he said.

Stanley said the Fed may be reluctant to hold off on the cut because they view the situation as fragile. “The market’s bullied them and pushed them to be a lot easier than a lot of folks on the committee would have gotten to on their own,” he said. “At some point, the Fed is going to have to put its foot down.”

The Fed needs to improve its communications and be clear that it is taking a pause, Stanley said. “I think the risk is that the Fed underestimates the degree of clarity they need to provide to the markets to communicate effectively,” he said.

But there are those that do not expect a pause at all.

John Briggs, head of strategy at NatWest Markets, said he expects a cut Wednesday, one in December, another in the first quarter and one in the second quarter.

“Market consensus is for a “hawkish cut” where they cut but do not indicate any preference for more. That doesn’t mean they rule out more, but they go full data dependent,” Briggs said in a note. “I think they cut and try not to say anything, indicate openness and data dependency. I think indicating pause is risky.”

WhatsApp sues Israel's NSO for allegedly helping spies hack phones around the world

WASHINGTON/SAN FRANCISCO (Reuters) - WhatsApp sued Israeli surveillance firm NSO Group on Tuesday, accusing it of helping government spies break into the phones of roughly 1,400 users across four continents in a hacking spree whose targets included diplomats, political dissidents, journalists and senior government officials.

In a lawsuit filed in federal court in San Francisco, messaging service WhatsApp, which is owned by Facebook Inc (FB.O), accused NSO of facilitating government hacking sprees in 20 countries. Mexico, the United Arab Emirates and Bahrain were the only countries identified.

WhatsApp said in a statement that 100 civil society members had been targeted, and called it “an unmistakable pattern of abuse.”

NSO denied the allegations.

“In the strongest possible terms, we dispute today’s allegations and will vigorously fight them,” NSO said in a statement. “The sole purpose of NSO is to provide technology to licensed government intelligence and law enforcement agencies to help them fight terrorism and serious crime.”

WhatsApp said the attack exploited its video calling system in order to send malware to the mobile devices of a number of users. The malware would allow NSO’s clients - said to be governments and intelligence organizations - to secretly spy on a phone’s owner, opening their digital lives up to official scrutiny.

WhatsApp is used by some 1.5 billion people monthly and has often touted a high level of security, including end-to-end encrypted messages that cannot be deciphered by WhatsApp or other third parties.

Citizen Lab, a cybersecurity research laboratory based at the University of Toronto that worked with WhatsApp to investigate the phone hacking, told Reuters that the targets included well-known television personalities, prominent women who had been subjected to online hate campaigns and people who had faced “assassination attempts and threats of violence.”

Neither Citizen Lab nor WhatsApp identified the targets by name.

Governments have increasingly turned to sophisticated hacking software as officials seek to push their surveillance power into the furthest corners of their citizens’ digital lives.

Companies like NSO say their technology enables officials to circumvent the encryption that increasingly protects the data held on phones and other devices. But governments only rarely talk about their capabilities publicly, meaning that the digital intrusions like the ones that affected WhatsApp typically happen in the shadows.

UNPRECEDENTED MOVE

Lawyer Scott Watnik called WhatsApp’s move “entirely unprecedented,” explaining that major service providers tended to shy away from litigation for fear of “opening up the hood” and revealing too much about their digital security. He said other firms would be watching the progress of the suit with interest.

Amazon grocery delivery is now free for Prime members

On Tuesday morning, Amazon announced that its Amazon Fresh service, which offers fast grocery delivery from local warehouses across the country, is now free for all Prime customers. The popular service previously cost Prime members $14.99 a month on top of their annual $119 membership fee. (If you aren't a Prime Member, you can sign up for a free 30-day trial, here.)

Amazon also says it will be speeding up delivery times, and offering one and two-hour delivery options in most Amazon Fresh cities.

"We have a long history of investing in services we think customers will love, and we think unlimited free grocery delivery will be one of the most loved Prime benefits," Stephenie Landry, Amazon’s vice president of grocery delivery, told TODAY Food.

Amazon has also made Whole Foods Market food delivery available on Amazon.com or via its app.

So, how soon will shoppers be able to start reaping the benefits of this enhanced perk? Prime members who already use the Amazon Fresh or Whole Foods Market grocery delivery services can continue using them at no additional cost starting today (Oct. 29). Prime members who haven't used the services before will need to request an invitation, then they will receive an alert when they're able to start shopping.

Amazon might have eliminated the monthly service fee for Amazon Fresh, but shoppers still need to order at least $35 worth of groceries (or $50 in New York City) to qualify for free delivery. An Amazon representative told TODAY the company also plans to expand its shorter delivery windows to additional cities where the service is already available.

"Grocery delivery is one of the fastest growing businesses at Amazon, which is why we continue investing in adding more selection, expanding ultrafast delivery and now we’re making it free," Landry said.

Of course, that expansion is also a way for Amazon to keep up with its growing list of competitors. Earlier this month, Walmart announced it will deliver groceries right to a customer's fridge via a new service called Walmart InHome.

With Instacart Express, another popular service available nationwide, shoppers pay $99 a year for free delivery of grocery orders over $35. PeaPod shoppers can purchase a yearlong PodPass for $119, which entitles them to unlimited free delivery. And there are plenty of other local services in select markets that offer a variety of delivery options.

The biggest difference? Amazon Prime definitely isn't just about the groceries.

Online spending this holiday season is set to hit a record $143.7 billion

It might come as no surprise: This holiday shopping season is slated to be another record-breaking one online.

Digital spending during November and December is expected to reach $143.7 billion, up 14.1% from a year ago, according to a study by Adobe Analytics, which tracks transactions for 80 of the top 100 U.S. internet retailers including Walmart and Amazon.

Cyber Monday sales are expected to hit $9.4 billion, up nearly 19% from last year, Adobe said. Black Friday sales online are expected to be $7.5 billion, up 20.3%. Thanksgiving Day sales on the internet are forecast to surge 19.5%, to $4.4 billion, it said.

But the catch this season is retailers are going to have to fight harder for those dollars. There are six fewer days between Thanksgiving and Christmas this year — making for the shortest possible holiday season. Walmart has already started rolling out deals online, earlier than it ever has before, because of the shorter season. Target CEO Brian Cornell said earlier this month, “Every day is going to count.”

The six lost days from the 2018 holiday season will leave nearly $1 billion in sales on the table, according to Adobe. For the first time, the research firm is calling for online sales to surpass $1 billion each day in November and December, because of the pinch for time.

“We fully expect [retailers] to be driving discounts and sales much earlier and much more consistently throughout the season,” said Nate Smith, a product marketing manager for Adobe Analytics. “You are going to see that all through November.”

Beyond deep discounts, companies will try to lure shoppers with expedited delivery options, curbside pickup, new loyalty program perks and events in stores. Chinese e-commerce giant Alibaba’s 11.11 Global Shopping Festival on Nov. 11 could also spark U.S.-based retailers to offer deals that align with the shopping extravaganza.

Adobe Analytics also forecast the best days for shopping online, based on retailers’ past price cutting.

Typically on Black Friday, for example, electronics are about 9% discounted, and you can save 6% on sporting goods. Toys are 32% cheaper on Dec. 1. Televisions are 19% off on Cyber Monday. And, if you can stomach the wait, electronics are typically about 27% less expensive on Dec. 27.

The National Retail Federation has forecast total holiday retail sales will grow by 3.8% to 4.2% this year, excluding automobiles, gasoline and restaurants. That equates to sales of between $727.9 billion and $730.7 billion. But the industry trade group also said “uncertainty over trade” could end up posing a drag on the season.

Prologis to Buy Liberty Property in $9.7 Billion Stock Deal

Prologis Inc., one of the world’s largest warehouse owners, has agreed to buy Liberty Property Trust in an all-stock transaction valued at $9.7 billion, extending its reach in markets such as Chicago, Houston and Southern California.

The transaction gives Liberty stakeholders 0.675 Prologis shares for each Liberty share they own, the companies said in a statement. That represents premium of about 21% based on Oct. 25 closing prices.

Warehouses and logistics facilities — Liberty’s specialty — have become a hot part of the real estate market as more shopping moves online and consumers demand quick shipping. Blackstone extended its bet on e-commerce last month, agreeing to buy Colony Capital Inc.’s warehouse unit for $5.9 billion.

Prologis itself has been a big acquirer of rivals in recent years.

“The deal solidifies that the quickest way to increase exposure to fast-rent-growing warehouses is through M&A,” said Bloomberg Intelligence analyst Lindsay Dutch.

Shareholder Land & Buildings Investment Management began pushing Liberty to consider selling itself about a year ago. The firm, led by Jonathan Litt, said last month that a “credible party” had contacted the real estate investment trust with an interest in buying it at $60 a share.

“The proposed sale of Liberty Property Trust to Prologis is a great example of maximizing value for all shareholders,” Litt said.

The pricing of the deal is similar to Prologis’ purchase of DCT Industrial Trust and its pending takeover of Industrial Property Trust, Dutch said, adding that Liberty still would be the biggest of the three transactions.

Including debt, the deal is valued at $12.6 billion. Prologis is buying a portfolio of 107 million square feet of logistics properties that is owned or managed, as well as buildings under construction and land for future development. It also includes 4.9 million square feet of office space.

“Liberty’s logistics assets are highly complementary to our U.S. portfolio, and this acquisition increases our holdings and growth potential in several key markets,” Prologis Chairman and CEO Hamid Moghadam said in the statement. “The strategic fit between the portfolios allows us to capture immediate cost and long-term revenue synergies.”

Prologis plans to dispose of approximately $3.5 billion of assets on a pro rata share basis, including $2.8 billion of logistics properties and $700 million of office properties.

Liberty shares have risen 21% this year, compared with the 55% jump in Prologis shares and a 45% gain for a Bloomberg index of industrial REITs.

Liberty may be required to pay a termination fee of as much as $325 million if the deal falls apart.

The transaction is expected to close in the first quarter of 2020. Bank of America Corp. and Morgan Stanley advised Prologis, while Goldman Sachs Group Inc. and Citigroup Inc. represented Liberty.

With assistance from Noah Buhayar, Patrick Clark and Scott Deveau.