Friday Morning Reads

Friday Morning Reads




Open Interest Changes:



Netflix shares tumbled over 9% AH on Thursday, wiping out nearly all the gains from the last month, after earnings fell below a lofty profit consensus and weak guidance was given for Q3. While the streamer logged another 10.1M new paid subscribers last quarter, it sees "growth slowing as consumers get through the initial shock of COVID and social restrictions." There were also big changes in the C-suite: Ted Sarandos, who has led original content efforts, was named co-CEO along with founder Reed Hastings, while chief product officer Greg Peters added COO to his title. Looking ahead, some are asking how much new content Netflix (NASDAQ:NFLX) will be able to upload during the COVID-19 pandemic and whether the resumption of professional sports will eat into its market share.

Almost the weekend

U.S. futures are trying to come back from a lackluster session on Thursday that was dampened by data showing 1.3M people filing for unemployment benefits last week. At the time of writing, Dow and S&P 500 futures are up 0.3%, though the Nasdaq is powering ahead by 1%, a somewhat surprising move given Netflix's (NFLX) big tumble. On the earnings front, investors will be watching BlackRock (NYSE:BLK) this morning to see how the world's largest asset manager fared during the latest stage of the coronavirus pandemic. Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza are also scheduled to testify at a House Small Business Committee hearing on COVID-19-related economic assistance programs.

Crunch talks on massive coronavirus fund

Leaders across the European Union are gathering in person this morning (for the first time since the start of lockdowns) to thrash out a deal and bridge differences over a €750B recovery fund needed to lift the bloc out of recession. In its current form, the plan brings the EU closer to a fiscal union by introducing shared debt liability and mostly grants rather than loans, though it has faced some blowback from the "Frugal Four": Austria, Denmark, the Netherlands and Sweden. While the proposal helped beef up confidence in the region since May - boosting Italian government bonds, the euro and the region's stocks - any changes or deviations could put that rally at risk.

EU set to pick next tech battle

The European Commission is seeking information from 400 companies to establish whether top voice assistants create market problems meriting antitrust investigations. Apple's (NASDAQ:AAPL) Siri, Amazon's (NASDAQ:AMZN) Alexa and Google's (GOOGGOOGL) Assistant are at "the center of it all," European Competition Commissioner Margrethe Vestager declared, saying the large amounts of user data involved could be used to hurt competition and smaller rivals. Violators of the EU's antitrust rules can be fined up to 10% of their global turnover.

BA retires entire Boeing 747 fleet

"It is unlikely our magnificent 'Queen of the Skies' will ever operate commercial services for British Airways again due to the downturn in travel caused by the COVID-19 global pandemic," a British Airways (OTCPK:ICAGY) spokesman told the BBC. The U.K. carrier was the world's largest operator of the jumbo jet with 31 planes, or about 10% of its total fleet. Boeing (NYSE:BA) and its suppliers recently signaled the end of the production line for the 747 when they set the final number of parts needed for the program (the last 747-8 will roll out of Boeing's Seattle factory in about two years).
Go deeper: The 747 shutdown should not be considered a loss as Boeing will end up with a better product line, writes Dhierin Bechai.

Mask mandates

Due to the uptick in coronavirus cases, a growing number of U.S. states and localities have mandated the use of masks and face coverings while in public. The development has largely benefited mask manufacturers like Alpha Pro Tech (NYSEMKT:APT), Allied Healthcare Products (NASDAQ:AHPI) and Lakeland Industries (NASDAQ:LAKE), as well as 3M (NYSE:MMM) and Honeywell (NYSE:HON), though divisions are rising over particular directives. Georgia Governor Brian Kemp is suing Atlanta Mayor Keisha Lance Bottoms over the city's mask mandate - which is punishable by a fine or up to six months in jail - claiming the measure is more restrictive than a state order that "strongly encourages face coverings" but does not require them. On the corporate side of things, Walmart (NYSE:WMT), Kroger (NYSE:KR) and Target (NYSE:TGT) announced Wednesday that they would will require customers to put on a mask or face covering inside stores.

New COVID-19 treatment by the fall?

"What we really need are drugs that, when given early, can prevent a symptomatic person from requiring hospitalization or very dramatically diminish the time that they're symptomatic," Dr. Anthony Fauci told Mark Zuckerberg during a Facebook Live interview. Looking for a treatment, he expects results for a clinical trial on monoclonal antibodies by late summer or early fall. The laboratory-produced proteins - described as "precise bullets" that can be developed from antibodies from other people who've been infected by COVID-19 - are hoped to be used to treat sick coronavirus patients as well as for prophylaxis.

Extending cruise ban

The CDC has lengthened its no-sail order for cruise ships through the end of September, preventing vessels from sailing in U.S. waters out of concern of COVID-19. The extension, which had been set to expire on July 24, is the second for the initial order that was given on March 14. However, the move is not expected to dramatically change the timeline for cruise lines like Carnival (NYSE:CCL), Royal Caribbean (NYSE:RCL) and Norwegian (NYSE:NCLH) returning to the seas. The Cruise Lines International Association already said it would suspend voyages from U.S. ports until Sept. 15.

What else is happening...

Twitter (NYSE:TWTR) says about 130 accounts were targeted in breach.

Barr warns companies on pushing China's agenda.

U.S. travel ban may be coming for Chinese Communist Party members.

United Airlines (NASDAQ:UAL), pilots union reach deal to limit furloughs.

PG&E (NYSE:PCG) power lines caused last year's wine country fire - Cal Fire.

Thursday's Key Earnings
Abbott Laboratories (NYSE:ABT) -0.3% despite Q2 beat, surge in U.S. diagnostic sales.
Bank of America (NYSE:BAC) -2.7% revealing a bigger reserve build.
Johnson & Johnson (NYSE:JNJ) +0.7% as guidance raise topped estimates.
Morgan Stanley (NYSE:MS) +2.5% bolstered by i-banking, underwriting.
Netflix (NFLX-9.1% AH on profit miss, growth concerns.
Today's Markets
In Asia, Japan -0.3%. Hong Kong +0.5%. China +0.1%. India +1.5%.
In Europe, at midday, London -0.1%. Paris +0.2%. Frankfurt +0.6%.
Futures at 6:20, Dow +0.3%. S&P +0.3%. Nasdaq +1%. Crude -0.3% to $40.61. Gold +0.2% to $1804.20. Bitcoin flat at $9119.
Ten-year Treasury Yield flat at 0.6%Today's Economic Calendar
8:30 Housing Starts
10:00 Consumer Sentiment
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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