Friday Morning Reads

Friday Morning Reads




Amazon's in-house delivery network, which operates 150 U.S. delivery stations and employs more than 90,000 people, is "on track to deliver 3.5B packages by the end of the year," according to a new press release. Oh yes, wait a minute... Morgan Stanley estimates the Amazon (NASDAQ:AMZN) delivery network will move 6.5B packages by 2022, more than UPS (NYSE:UPS) at 5B and FedEx (NYSE:FDX) at 3.4B, dealing a potential long-term threat to the rival shipping firms. While Amazon has already ended its relationship with FedEx, UPS continues to handle delivery for about half of its global packages.
Go deeper: Nikolaos Sismanis says Amazon's revenue will double by 2023.

More record highs

Wall Street stocks rose to all-time highs on Thursday, with the S&P 500 index pushing past 3,200 for the first time, after Treasury Secretary Steven Mnuchin said the U.S. and China would sign their "phase one" trade agreement in early January. However, there wasn't much movement from futures overnight, as investors begin winding down their books in the days leading up to the year-end holidays. Later in the session, we'll get consumer spending figures, key inflation measures and the third estimate for third-quarter GDP.
Go deeper: Chuck Carnevale helps investors understand fair value.

Next milestone for American spaceflight

Since the retirement of NASA's Space Shuttle program in 2011, the agency has been looking to relaunch humans into space from U.S. soil. This morning, Boeing's (NYSE:BA) CST-100 Starliner spacecraft is scheduled to blast off into orbit (connecting with the International Space Station tomorrow), and if all goes well, it could be flying its first crewed missions by next year. Back in 2014, NASA allotted $2.6B for SpaceX's (SPACE) Crew Dragon and $4.2B for Boeing's Starliner under its Commercial Crew Program.
Go deeper: "One Small Step For NASA, A Giant Leap For Boeing" by Cestrian Capital.

Is the Force strong enough?

It's the opening weekend for Star Wars: The Rise of Skywalker, the conclusion to a nine-chapter saga that kicked off more than four decades ago. Disney (NYSE:DIS) is cautiously predicting a start of around $160M, which is more than most films make in their entire theatrical run, but a figure that would rank as one of the weakest opening weekends for the franchise. Whether or not Rise of Skywalker sets any records, it will only further Disney's $10B historic year at the box office.
Go deeper: It's working! David Trainer discusses Disney strategy.

Tobacco age going to 21

The minimum age to purchase cigarettes, e-cigarettes and other tobacco products will be raised to 21 nationwide under the spending bill passed by the Senate on Thursday. The two biggest U.S. cigarette manufacturers, Altria (NYSE:MO) and Reynolds American (NYSE:BTI), both supported the age restriction, as did Juul Labs (JUUL), which has been sharply criticized over a surge in underage vaping. Nineteen states have already passed laws raising the minimum tobacco purchase age to 21, including California, Texas and New York.

Goldman and 1MDB

Goldman Sachs (NYSE:GS) and the U.S. Department of Justice have largely agreed on a fine of just under $2B to settle allegations that the bank ignored warning signs while billions of dollars were being stolen from its client, a Malaysian government fund known as 1MDB. The deal would see a Goldman subsidiary in Asia, not the parent company, plead guilty to violating U.S. bribery laws, WSJ reports. Also being discussed is installing an independent monitor at the bank to oversee and recommend changes to its compliance procedures.

House clears USMCA trade deal

In a vote 385-41, the U.S. House of Representatives overwhelmingly approved legislation to implement USMCA (a trade deal that includes tougher labor and auto content rules, but leaves $1.2T in annual trade flows largely unchanged). U.S. Treasury Secretary Steven Mnuchin expects the agreement to add 0.5% to U.S. GDP growth, though others are more skeptical. According to the Congressional Budget Office, automakers will take a nearly $3B hit over the next ten years due to terms of the agreement.

Bailey to lead BOE through Brexit

Boris Johnson is testing out his new parliamentary majority today following a "second reading" and vote on his Brexit bill in the House of Commons. Further debate will be then conducted in both chambers, and if passed into law, it would mean that the U.K. would leave the EU on January 31. Other U.K. news... Andrew Bailey, the current head of the Financial Conduct Authority, has been named to replace Mark Carney as the next governor of the Bank of England.
Go deeper: The pound slipped below $1.30 overnight amid worries about a hard Brexit.

What else is happening...

U.S. Steel (NYSE:Xtumbles on Q4 loss, dividend cut.

Merck (NYSE:MRK) receives FDA approval for Ebola vaccine.

Live Nation (NYSE:LYV) avoids DOJ lawsuit over ticketing practices.

Shaken, not stirred... Apple (NASDAQ:AAPLeyes James Bond content.

France slaps latest fine on Google (GOOGGOOGL).

Chipotle (NYSE:CMGfaces accusation of union retaliation.

Shell (NYSE:RDS.A) sees $2.3B in charges, cuts output estimate.

Thursday's Key Earnings
Accenture (NYSE:ACN+1.2% raising lower end of its guidance.
Conagra (NYSE:CAG+15.9% improving sales.
Darden Restaurants (NYSE:DRI-6.3% dragged down by Olive Garden.
Nike (NYSE:NKE-2.1% AH on tiny margin misses.
Rite Aid (NYSE:RAD+42.3% posting blockbuster earnings.

Today's Markets
In Asia, Japan -0.2%. Hong Kong +0.3%. China -0.4%. India flat.
In Europe, at midday, London +0.2%. Paris +0.6%. Frankfurt +0.6%.
Futures at 6:20, Dow flat. S&P flat. Nasdaq flat. Crude -0.6% to $60.83. Gold -0.2% to $1481. Bitcoin -0.3% to $.7130.
Ten-year Treasury Yield +3 bps to 1.94%

Today's Economic Calendar
8:30 GDP Q3
8:30 Corporate profits
10:00 Personal Income and Outlays
10:00 Consumer Sentiment
11:00 Kansas City Fed Mfg Survey
1:00 PM Baker-Hughes Rig Count

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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