Friday Morning Reads

Friday Morning Reads






Unusual Option Action



It's the last trading day of the year and investors are reflecting back on the big market events of 2017. Highlights: Brexit negotiations and Catalonia, future of U.S. trade, unraveling of Dodd-Frank, tax overhaul, the U.S. economic boom and continuous stock index records, crypto mania, media company M&A, net neutrality repeal, OPEC output cut extension, Paris and Iran deal pullout, GE's restructuring, Tesla (NASDAQ:TSLA) talk, Korea tensions, the EU's war on tax avoidance and new Fed leadership. Traders will also remember the bruising year for the dollar and the go-slow approach toward monetary-stimulus withdrawal in major economies.


U.S. oil prices have reached their highest since mid-2015 due to an unexpected fall in American output and commercial inventories. Crude futures are currently up 0.6% to $60.21/bbl, after hitting a high of $60.32 earlier in the session. Since the start of the year, WTI has climbed around 12%,although the price rise from mid-2017 is much stronger, at nearly 50%.

Measured against its major peers, the dollar has shed more than 9% this year, putting it on track for its biggest annual loss since 2003. So which legal tender has shined against the greenback? The euro has topped the pile of G10 currency gains, and is currently at its highest level in a month at $1.1977. That's almost 14% higher vs. the dollar over the course of 2017.

"Caught RED HANDED - very disappointed that China is allowing oil to go into North Korea," President Trump wrote in a tweet. Ship-to-ship trading of goods between the nations had been specifically banned in September's UN resolution. "If they don't help us with North Korea, then I do what I've always said I want to do," he told the NYT, threatening to take trade measures against Beijing.

New York Governor Andrew Cuomo is considering a legal challenge to the Republican tax law, becoming the latest blue-state leader to discuss pushing back against the massive overhaul. "There are serious legal questions," he told CNBC. Cuomo is targeting the planned limits on state and local tax deductions, which primarily benefit the residents of states like New York, New Jersey and California.

Investors poured $24.1B into U.S.-based stock funds in the week to Dec. 27, according to Lipper, sending a gift to equity markets already on pace to record a year of double-digit percentage gains. It marks the largest week of inflows for mutual funds and ETFs collectively since December 2014 and comes after U.S. lawmakers finalized a massive corporate tax cut before Christmas.


India's finance ministry is the latest global regulatory body to caution about the risks of trading in cryptocurrencies such as bitcoin, saying the investments are like "Ponzi schemes." Cryptocurrencies are not legal tender and have no regulatory permission or protection in the country, according to the ministry, but it stopped short of announcing an outright ban or imposing any curbs.

Citigroup has been fined $11.5M by FINRA over a flawed data feed that showed retail customers false stock ratings over a five-year period. Despite "numerous" red flags, Citi (NYSE:C) failed to fix the wrongly displayed ratings - that were tagged Buy rather than Sell, and vice versa - and affected more than 1,800 stocks, or about 38% of the brokerage's covered securities.

Netflix CEO Reed Hastings is getting a big raise next year. While his salary will dip from $850K to $700K, he is set to receive $28.7M in company stock options, up from $21M in 2017. The executive is being rewarded for a banner year for Netflix, which crossed the 100M subscriber threshold during 2017. NFLX shares also increased more than 50% since Jan. 1.

Facing lawsuits and consumer outrage over its iPhone slowdown, Apple (NASDAQ:AAPL) has issued an apology to customers over its handling of the issue. To "regain the trust of anyone who may have doubted Apple's intentions," the tech giant is slashing prices for battery replacements to $29 (from $79) and will change its software to show users whether their phone battery is good.

Strengthening its position as a full-value aircraft solutions provider, China Aircraft Leasing (OTC:CFRLF) has agreed to buy 50 A320neos for an aggregate list price of $5.4B. Airbus (OTCPK:EADSY) also confirmed a mammoth $49.5B order to supply 430 aircraft to U.S. private equity firm Indigo Partners, which was signed as a preliminary deal at the Dubai Airshow in November.

Volkswagen is petitioning Germany's constitutional court in an effort to overturn the appointment of a special auditor to investigate the actions of management in its "Dieselgate" scandal. A lower court appointed the auditor in November, in a victory for shareholder groups that want to establish whether VW (OTCPK:VLKAY) bosses withheld market-moving information about the manipulation of emissions tests.

It's still the most valuable U.S. startup, but SoftBank (OTCPK:SFTBY) has succeeded in its bid to buy a large stake in UBER at a steep discount, WSJreports. Investors and employees of the ride-hailing service tendered shares equal to about 18% of the company in an offer that values Uber at $48B - a roughly 30% discount to its most recent valuation of about $68B.

General Motors scored a legal victory late Thursday that may reduce the private litigation it faces over flawed vehicle ignition switches. U.S. District Judge Jesse Furman said plaintiffs in two bellwether cases could not introduce expert testimony because there was no evidence that "double switch rotation" has occurred anywhere. GM's defect has been linked to 124 deaths.

Bending to pressure from big shareholders, SandRidge Energy (NYSE:SD) is terminating its proposed acquisition of Bonanza Creek Energy (NYSE:BCEI). Carl Icahn and the other investors said the deal made little sense and was too costly, while owners of at least 12.5% in aggregate of SandRidge shares had publicly opposed the transaction. SD +1.9%; BCEI -1.8% premarket.

The biggest legal recreational marijuana market in America is finally ready to open its doors. Following the approval of Prop. 64, Californians will be able to buy the herb without a medical license starting on Jan. 1, with a 15% state excise tax - and additional state and local taxes - tacked onto every purchase. California plans to eventually collect an estimated $1B in annual tax revenue from the industry.

Today's Markets 
In Asia, Japan -0.1%. Hong Kong +0.2%. China +0.3%. India +0.6%.
In Europe, at midday, London +0.4%. Paris -0.2%. Frankfurt -0.3%.
Futures at 6:20, Dow +0.3%. S&P +0.3%. Nasdaq +0.3%. Crude +0.4% to $60.09. Gold +0.2% to $1299.40. Bitcoin -1.1% to $14272.
Ten-year Treasury Yield flat at 2.42%Today's Economic Calendar
1:00 PM Baker-Hughes Rig Count
SIFMA close 2:00 PM

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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