Friday Morning Reads

Friday Morning Reads



Open Interest Changes:



As the U.S. tries to wrestle global supply chains back from China, Taiwan Semiconductor (NYSE:TSM), a major supplier to Apple (NASDAQ:AAPL) and Qualcomm (NASDAQ:QCOM), has confirmed plans to build a $12B chip factory in Arizona. The plant, which would create over 1,600 jobs, will produce the most sophisticated 5-nanometer chips that can be used in high-end defense and communications devices. The Trump administration is also in talks with Intel (NASDAQ:INTC) about new foundries. While the company has major manufacturing operations in the U.S., it supplies only its own chips rather than making them for outside customers.

Manufacturing drive

"These stupid supply chains that are all over the world... and one little piece of the world goes bad, and the whole thing is messed up," President Trump told Fox Business Network's Maria Bartiromo. "We shouldn't have supply chains. We should have them all in the United States," he added, citing effects of the coronavirus pandemic. "My goal is to produce everything America needs for ourselves and then export to the world."

Essential drugs

The White House is also preparing an executive order which will require certain essential drugs be made in the U.S., sources told CNBC’s Kayla Tausche, adding that an announcement could come as soon as today. The order would direct HHS to study the supply chain, analyze weaknesses and report back to the Trump administration in 90 days. About 72% of pharma ingredient manufacturers supplying the U.S. are located overseas, including 13% in China, according to an October congressional testimony by Janet Woodcock, director of the FDA's Center for Drug Evaluation and Research.

Retail sales

A choppy session ensued on Thursday following the release of weekly jobless claims that saw another 3M Americans filing for benefits, bringing the total number to more than 36M since the coronavirus crisis began. All three major U.S. stock indexes ended the session solidly higher, however, while futures climbed another 0.3% overnight. A White House spokeswoman said President Trump is open to another possible stimulus bill, but will not sign the bill put forward by House of Representatives Democrats. On the calendar for today is retail sales data for April, expected to have collapsed 12% last month, marking the second-biggest decline since the government started tracking the series in 1992.

Coronavirus test scrutiny

Shares of Abbott Laboratories (NYSE:ABT) are off 3% premarket as the FDA investigates preliminary data that found inconsistencies with the company's rapid coronavirus test. The analysis of ID NOW, which is used at the White House, found that it missed at least a third of positive cases detected by a rival test and as much as 48% when using the currently recommended dry nasal swabs. Abbott rejected the findings, saying the researchers used the test "in ways that it was not designed to be used."
Go deeper: Britain approves Abbott, Roche antibody test.

Reopening the trading floor

The New York Stock Exchange (NYSE:ICE) will open to a subset of floor brokers on May 26, who will be required to wear masks and follow strict social distancing requirements. They'll also be encouraged to avoid public transportation, and will be screened and have their temperatures taken when they enter the building. Why open if the exchange was functioning remotely? "Recent data demonstrate that our trading floor saves investors millions of dollars each day by making transactions more efficient," said NYSE President Stacey Cunningham.


Facebook's (NASDAQ:FB) internet project is moving forward with the help of some global partners, including China Mobile (NYSE:CHL), Orange (NYSE:ORAN) and Vodafone (NASDAQ:VOD). The 23,000-mile underwater internet cable circling the continent will link 16 countries with Europe and the Arabian peninsula and more than double its potential bandwidth. Construction is expected to be completed in 2023 or early 2024 and highlights increased interest from Silicon Valley companies in Africa.

Next retail bankruptcy

While final negotiations with lenders could still spill into the weekend, J.C. Penney (NYSE:JCP) is planning to file for bankruptcy within the next 24 hours, CNBC reports. The retailer has been in discussions with its first-lien lenders for a $450M loan to finance the bankruptcy and would require the achievement of certain goals to receive the second half of it. Restructuring plans include closing 180-200 out of the 846 J.C. Penney department stores that were active as of February.

What else is happening...

Apple (AAPLroundup: Glasses in 2022, acquires NextVR.

Boeing (NYSE:BA) creates group to help get people back on planes.

Uber (NYSE:UBER)-Grubhub (NYSE:GRUB) deal could be a breeze with DOJ.

Tens of thousands of layoffs hitting Office Depot (NASDAQ:ODP).

Nike (NYSE:NKE) sees 'material' impact as stores begin to reopen.

Higher volumes has FedEx (NYSE:FDXapply package shipping limits.

Sixth confirmed Amazon (NASDAQ:AMZN) worker dies from COVID-19.

Sanofi (NASDAQ:SNYbacktracks on COVID-19 vaccine priority access.

Thursday's Key Earnings
Applied Materials (NASDAQ:AMAT+4.7% AH on earnings, revenue misses.
Today's Markets
In Asia, Japan +0.6%. Hong Kong -0.1%. China -0.1%. India -0.1%.
In Europe, at midday, London +1.4%. Paris +0.9%. Frankfurt +1.7%.
Futures at 6:20, Dow +0.3%. S&P +0.3%. Nasdaq +0.5%. Crude +3.6% to $28.55. Gold +0.2% to $1743.70. Bitcoin -0.9% to $9619.
Ten-year Treasury Yield flat at 0.61%Today's Economic Calendar
8:30 Retail Sales
8:30 Empire State Mfg Survey
9:15 Industrial Production
10:00 Business Inventories
10:00 Consumer Sentiment
10:00 Job Openings and Labor Turnover Survey
1:00 PM Baker-Hughes Rig Count
4:00 PM Treasury International Capital

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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