Friday Morning Reads

Friday Morning Reads



Morning Charts:

Open Interest Changes

A solid jobs growth number for November should be on display today after striking GM (NYSE:GM) workers returned to the workforce. Economists expect to see 186,000 jobs added last month (vs. 128,000 in October), when the Labor Department releases nonfarm payrolls data at 8:30 a.m. ET. Wages likely rose by 0.3% M/M, while the unemployment rate remained at 3.6%. "Barring something that's teeth rattling, it's really not going to have an effect on monetary policy," said Jefferies' Ward McCarthy, ahead of the Fed's December meeting next week.
Go deeper: James Picerno asks if the report is flirting with an economic warning sign.

Don't forget trade

Settling slightly in the green on Thursday, U.S. stock index futures advanced by 0.4% overnight, ahead of the eagerly-anticipated jobs report. Market focus is additionally attuned to global trade developments, following an upbeat tone from President Trump. Adding to the positive sentiment, China's finance ministry said on Friday it will waive import tariffs for some soybeans and pork shipments from the U.S. as the two sides aim to conclude a Phase One trade deal.

Uber releases U.S. Safety Report

Uber (NYSE:UBER) reported 3,045 sexual assaults across rides in 2018, as well as nine murders and 58 people killed in crashes. While the number of incidents represents a fraction - just 0.0002% - of Uber's 1.3B rides in the U.S. last year, Chief Legal Officer Tony West said, "each of those incidents represents an individual who has undergone a horrific trauma." Riders (not drivers) were also the accused party in 45% of the reports filed, and the incidents mark a 16% fall from the previous year in the five most serious categories of sexual assault. What's Uber doing about it? Making driver background checks more rigorous, adding an "In-App Emergency Button," and employing more than 300 employees "dedicated to safety."
Go deeper: Value Growth Master feels Uber's fall from glory is not over.

No new radiation threats from 5G

5G doesn't pose new cellphone radiation threats, according to the FCC, which spent six years reviewing the issue and receiving public feedback. The regulator voted unanimously this week to keep in place standards for how much exposure to the radio-frequency energy cellphones and antennas emit is safe. The rules cover consumer devices, and the 5G infrastructure used on cell towers and rooftops, as the four major U.S. wireless carriers race to roll out the next-generation of wireless networks.
Go deeper: 'U.S. Infrastructure Spending May Lead To Compelling Investment Opportunities' by Invesco.

Aramco raises $25B in largest-ever IPO

Saudi Aramco (ARMCO) has priced its IPO at 32 riyals, the top of its indicative range of 30-32 riyals per share, valuing the company at $1.7T. With 1.5% of the oil giant being floated, the price puts Aramco on track to raise $25.6B, marking the IPO the largest in history (the company could also wind up hauling in $29.4B if a 15% greenshoe option is exercised). Trading is expected to commence on the Saudi Tadawul stock exchange starting December 11.

Crude awaits outcome of OPEC meeting

Cohesion among the group is in the spotlight as OPEC canceled its customary press conference yesterday following an acrimonious meeting in Vienna that ran late into the evening. Led by Saudi Arabia, the alliance agreed in principle to cut production by an additional 500K barrels per day through the end of March 2020, according to sources from CNBC and Reuters. But the group must still convince a faction of its non-OPEC allies, including Russia, in a bid to prop up oil prices. Crude futures flat at $58.41/bbl.
Go deeper: Robert Boslego discusses the pricing of Aramco and OPEC's decision.

Jet order race

Airbus (OTCPK:EADSY) is poised to beat Boeing (NYSE:BA) after booking orders for 222 aircraft in November, driven mainly by the Dubai Airshow. The French planemaker sold a total of 940 jets during January-November, or 718 after cancellations, leaving it well ahead of Boeing, which sold 180 jets in the first nine months of the year, or 45 after cancellations. Not only is the 737 MAX crisis weighing on orders, but additional regulatory requirements or delays could cause Boeing to cut or temporarily halt production of the aircraft.

China-made Tesla cars qualify for subsidies

Tesla's (NASDAQ:TSLA) Model 3 has been included on a list of vehicles eligible for subsidies published by the Ministry of Industry and Information Technology. That means buyers will get a subsidy of as much as about 25,000 yuan ($3,550) from the government, a potential boon for the automaker as it prepares to start selling vehicles from its Shanghai car plant. In October, Tesla said locally-built Model 3s will be priced from about $50,000. TSLA +1.4% premarket.
Go deeper: Tesla bull case upped to $500 at Morgan Stanley.

World Bank loan qualification

The World Bank is adopting a new plan to aid China with $1B to $1.5B in low-interest loans annually through June 2025 despite objections from Steven Mnuchin. The U.S. Treasury secretary argues China is too wealthy for such international aid, pointing to the hundreds of billions of dollars it has loaned to poor countries through its Belt and Road Initiative. U.S. lawmakers are also increasingly concerned that taxpayer funds loaned through the World Bank to China will enable human rights abuses and unfair economic competition.

Renewed growth fears for Germany

Germany's industrial output unexpectedly dropped in October, tumbling 5.3% from the same month in 2018. "Now the trepidation starts again about GDP growth in the final quarter," said Jens-Oliver Niklasch, economist at Landesbank Baden-Wuerttemberg. Germany narrowly avoided recession in Q3, as higher household and government spending, as well as a rebound in exports, helped offset a decline in industrial production.

What else is happening...

New rules to rein in Airbnb (AIRB) parties.

Proposed local takeover of PG&E (NYSE:PCG) wins more followers.

HSBC urges selling Facebook (NASDAQ:FB) amid regulatory worries.

Embraer (NYSE:ERJ) investor seeks EU block of Boeing (BA) deal.

Qualcomm (NASDAQ:QCOM) unveils processors for budget laptops.

Verizon's (NYSE:VZ) board membership expands to 11.

Thursday's Key Earnings
American Outdoor (NASDAQ:AOBC+4.4% AH on strong guidance.
Cloudera (NYSE:CLDR+7.7% AH beating expectations.
CrowdStrike (NASDAQ:CRWD+4.4% AH posting its best-ever quarter.
DocuSign (NASDAQ:DOCU+9.9% AH on beats, upside Q4 view.
Dollar General (NYSE:DG+0.1% after an earnings topper.
Kroger (NYSE:KR-3% as analysts questioned its execution.
TD Bank (NYSE:TD-3.4% amid a rise in loan-loss provisions.
Tiffany (NYSE:TIF-0.1% missing estimates in Q3.
Ulta Beauty (NASDAQ:ULTA+9.3% AH following a comp sales beat.
Zoom Video (NASDAQ:ZM-8.6% AH on slowing revenue growth.

Today's Markets
In Asia, Japan +0.2%. Hong Kong +1.1%. China +0.4%. India -0.8%.
In Europe, at midday, London +0.8%. Paris +0.5%. Frankfurt +0.2%.
Futures at 6:20, Dow +0.4%. S&P +0.4%. Nasdaq +0.5%. Crude flat at $58.42. Gold -0.2% to $1480.60. Bitcoin -0.5% to $7355.
Ten-year Treasury Yield flat at 1.79%

Today's Economic Calendar
8:30 Non-farm payrolls
10:00 Consumer Sentiment
10:00 Wholesale Trade
1:00 PM Baker-Hughes Rig Count
3:00 PM Consumer Credit

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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