Friday Morning Reads

Friday Morning Reads




Open Interest Changes for Today:


Morning Charts:

Seeking Alpha:

Major profits at Disney's theme parks (+17% to $1.4B) and movie studio divisions (+79% to $1.1B) pushed earnings past Wall Street targets late Thursday, more than offsetting a decline at the company's media networks division and sending shares up 5% AH. The company said it also spent less than it had projected on its big plunge into streaming ahead of Disney+'s (NYSE:DIS) launch next week. "We're making a huge statement about the future of media and entertainment and our continued ability to thrive in this new era," CEO Bob Iger told analysts on a conference call.
Go deeper: 'Netflix And Disney Will Rule The Streaming Kingdom' by Nikolaos Sismanis.

Boon for Hong Kong

Reports overnight said Alibaba (NYSE:BABA) is planning to launch a Hong Kong share offering in the final week of November, a move that would raise $10B-$15B as the world's largest-ever cross-border secondary listing. The e-commerce giant already holds the record for the world's largest IPO with a $25B float in New York in 2014. Alibaba had been working on an August listing in Hong Kong, but the transaction was put on hold due to anti-government protests in the city. BABA +0.7% premarket.
Go deeper: Despite 40% top line growth, there's no appreciation for Alibaba, says Stefan Redlich.

Shifting retail landscape

Another wave of Sears (OTCPK:SHLDQ) store closures is on the horizon as billionaire owner Eddie Lampert struggles to return the big-box retailer to its former glory days. Following the closures, there will be just 182 Sears/Kmart stores in operation, down from 425 locations as of February, when Lampert rescued Sears from bankruptcy proceedings in a $5.2B deal. The company has posted seven straight years of losses and shuttered hundreds of outlets under Lampert's leadership as shopping trends shifted online or to rivals like Walmart (NYSE:WMT).
Go deeper: Crispus Nyaga comments on another retail war: Walmart Vs. Target.

Monetizing WhatsApp

After buying the app for $19B in 2014, Facebook (NASDAQ:FB) is finally building out the service's e-commerce tools by launching a catalog feature where businesses can display a "mobile storefront" showcasing their wares with images and prices. Facebook similarly added a shopping feature to Instagram in March that lets users click a "checkout" option on items tagged for sale (though transactions there happen directly within the app).
Go deeper: Blue Sky Capital reiterates Buy on Facebook.

Record highs

Futures are inching down after yesterday gains, when the Dow and S&P 500 notched record closing highs, as traders wait for the next catalyst to move stocks higher. "Any kind of uncertainty there, with the market at all-time highs, and it's easy for traders and institutions to press the sell button and take some money off the table," said Alan Lancz, president of investment advisory Alan B. Lancz & Associates. Reports have suggested that the White House's plan to roll back China tariffs faces internal opposition, though President Trump said the two sides had come to a substantial "Phase One" trade deal on IP, financial services and big agricultural purchases.

Tariff threat avoided on EU cars

Despite U.S. steel and aluminum tariffs on Europe, as well as $7.5B of duties on European goods, President Trump won't take the next step in imposing tariffs on European cars next week. That's according to Jean-Claude Juncker, the outgoing president of the European Commission. Trump has until November 14 to decide whether to apply new duties on European carmakers, after arguing in May that American imports of European autos pose a national security threat to the U.S.

Climate change economics

A "green interest rate" is one of the topics on the calendar today as the San Francisco Fed convenes the U.S. central bank's first-ever conference on the "Economics of Climate Change." The event is so oversubscribed, a webcast has been created to meet demand. "It's important for us from a monetary policy perspective to know what the potential growth rate of the economy is and if climate events or climate risk is going to shave that off, even if it's over the long term," San Fran Fed chief Mary Daly said earlier this week.

Move towards looser fiscal policy

"To speed up our recovery [from natural disasters], deal with risks from abroad and accelerate productivity growth, we are formulating an economic plan along the lines of a 15-month budget," said Yoshihide Suga, Japan's chief cabinet secretary. It would be Japan's first economic stimulus package since 2016. The BOJ has already cut overnight interest rates to -0.1% and purchased trillions of yen worth of government bonds, but the flat yield curve now makes it hard for banks and insurers to turn a profit.

How big is the 737 NG cracking problem?

Indonesia's Lion Air has found "pickle fork" cracks on two 737 NGs with fewer flights than the FAA's safety directive after reports surfaced last week that Qantas (OTCPK:QABSY) and Southwest Airlines (NYSE:LUV) found the same problems on planes that did not require urgent inspections. It's not good news for Boeing (NYSE:BA), which is already deep in the midst of the 737 MAX crisis (and involved Lion Air). Repairing the cracks requires grounding the airplane, with remedial work costing an estimated $275K per aircraft, according to aviation consultancy IBA. BA -0.2% premarket.

Subpoenas in California emissions probe

The DOJ has issued civil subpoenas to Ford (NYSE:F), Honda (NYSE:HMC), BMW (OTCPK:BMWYY) and Volkswagen (OTCPK:VWAGY) that reached a tailpipe emissions deal this summer with the state of California. At issue are details of how the agreement was reached and if the automakers engaged in improper conduct. The Trump administration in September issued a determination that California cannot set its own vehicle emission standards and zero-emission vehicle mandates, which the DOJ said could raise antitrust concerns.

What else is happening...

Gap (NYSE:GPSslashes profit outlook, says CEO will step down.

Rare Keystone permit in focus after TC Energy (NYSE:TRP) spills.

New York AG drops two counts against Exxon (NYSE:XOM) as fraud case concludes.

MSG (NYSE:MSG) approves split of sports, entertainment units.

USDA preps second tranche of trade aid for farmers.

Thursday's Key Earnings
Activision Blizzard (NASDAQ:ATVI-2.3% AH amid lukewarm Q4 guidance.
Booking Holdings (NASDAQ:BKNG+4.7% AH increasing gross bookings.
Brookfield Infrastructure (NYSE:BIP+0.7% reflecting strong organic growth.
Cardinal Health (NYSE:CAH+3.4% beating expectations.
Disney (DIS+5.3% AH as theme parks, films paced Q4 beat.
Dropbox (NASDAQ:DBX-1.2% AH despite higher subscriber additions.
GoPro (NASDAQ:GPRO+7.7% AH following an earnings topper.
Teva Pharma (NYSE:TEVA+4.6% advancing its turnaround.

Today's Markets
In Asia, Japan +0.3%. Hong Kong -0.7%. China -0.5%. India -0.8%.
In Europe, at midday, London -0.2%. Paris -0.1%. Frankfurt -0.1%.
Futures at 6:20, Dow -0.1%. S&P -0.2%. Nasdaq -0.2%. Crude -1.8% to $56.10. Gold -0.1% to $1464.50. Bitcoin -1.7% to $9034.
Ten-year Treasury Yield flat at 1.92%

Today's Economic Calendar
10:00 Consumer Sentiment
10:00 Wholesale Trade
11:45 Fed's Daly Speech
1:00 PM Baker-Hughes Rig Count
8:00 PM Fed's Williams Speech
8:35 PM Fed's Brainard Speech

Known to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

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