Friday Morning Reads, Options, News, Charts
- ECB Keeps to Policy Path
- Trump’s Trade Truce With Europe
- Biggest One-Day Wipeout in U.S. Stock Market History
- How Bad Is Tesla’s Cash Position?
- China’s 12th Richest Person
- Myths and the Articles That Dispelled Them
- Does Earnings Season Impact Your Trades?
- Being Tenacious
- Strong GDP report expected
- Ontario to allow private-sector sales of marijuana - Globe & Mail
- AbbVie beats by $0.03, beats on revenue
- Twitter plunges 13.6% on monthly user drop
- AbbVie Q2 reveues up 19%; non-GAAP EPS up 41%; raises non-GAAP EPS guidance
- Goldman Sachs sets Street-high PT on Amgen
- Ventas beats by $0.07, beats on revenue
- Iron Mountain +1.6% on Q2 beats
Open Interest Changes:
The headliner of this action-packed week could come from the latest GDP reading, the official scorecard of the U.S. economy. The Commerce Department will release its first official estimate for the second-quarter at 8:30 a.m. ET, with many expecting growth to top 4%, and some even seeing a whopping gain of 5%. That would mark the best pace in years, thanks to stronger consumer spending and a narrowing trade deficit.
Two measures related to Chinese trade are moving through Congress. The House has passed a $716B defense authorization bill that aims to rein in China's investments in the U.S. and strengthens CFIUS. The Senate has also quietly passed legislation that would lower tariffs on roughly 1,660 items made in China, including toasters and chemicals, to protect industries that no longer exist in the U.S.
The Bank of Japan has offered to buy an unlimited amount of bonds for a second time this week, seeking to tame a yield increase spurred by speculation it may adjust its ultra-loose monetary policy. While the fixed-rate operation was conducted to meet the BOJ's policy objective of keeping the 10-year yield around zero, traders will look for clarity next week when Governor Haruhiko Kuroda announces the bank's latest policy decision.
It's a big win for the Secured Overnight Financing Rate, the new index developed by a panel of banks and investors, and overseen by the Federal Reserve. Fannie Mae (OTCQB:FNMA) just sold $6B of adjustable-rate securities in the first major trial run of SOFR, which regulators hope can replace scandal-plagued Libor as the foundation for trillions of dollars of debt, ranging from credit cards to business loans.
Venezuela is delaying its planned currency redenomination by two weeks to Aug. 20, lopping five zeroes off the refurbished bolivar (instead of three) and linking it to the country's Petro cryptocurrency. It comes in response to Venezuela's hyperinflation, which the IMF has said will soar to 1,000,000% this year, throwing the OPEC nation's already battered economy into a deeper tailspin.
President Trump has threatened Turkey with large sanctions unless it releases detained U.S. pastor Andrew Brunson, who has been held in the country for nearly two years. Iran's Major General Qassim Soleimani has meanwhile responded to another threat made by Trump that targeted President Rouhani. "If you begin the war, we will end the war. You know that this war will destroy all that you possess."
A relief to the tech sector? Amazon (NASDAQ:AMZN) is forecasting strong fall sales and posted a profit that was double Wall Street targets, thanks to younger businesses like cloud computing and advertising. It shows how the world's largest online retailer has increasingly learned to compensate for the high costs of fast package delivery and video streaming. The news sent shares 3% higher in after-hours trading.
The SEC has rejected a second attempt by Cameron and Tyler Winklevoss, founders of crypto exchange Gemini, to list shares of what would be the first-ever bitcoin ETF (COIN). Among the concerns: the reliability of trading and volume data for bitcoin, and that CBOE, which would have listed the ETF, failed to show that the underlying market was "resistant to manipulation." Bitcoin (BTC-USD) prices slipped 3% to $7,880 following the news.
Ending a partnership with Synchrony Financial (NYSE:SYF), Walmart (NYSE:WMT) has chosen Capital One Financial (NYSE:COF) as the new issuer of its store credit card. Synchrony, which has been Walmart's exclusive credit card issuer since 1999, plunged 10% after the decision was announced on Thursday. The deal covers credit cards at Walmart, as well as co-branded cards that can be used elsewhere.
Sergio Marchionne had a "serious illness" lasting more than a year before the longtime Fiat Chrysler (NYSE:FCAU) chief died this week, according to University Hospital Zurich - and the carmaker didn't know about the condition. The episode raises questions about when top executives should inform company boards of serious ailments and whether boards in turn should disclose that information to shareholders.
Virgin Galactic has succeeded in its third rocket-powered flight that seeks to take commercial passengers to space. Its Unity spacecraft ascended at more than twice the speed of sound and reached an altitude of over 32 miles. Galactic, which is neck and neck with Jeff Bezos's Blue Origin (BORGN), has more than 700 would-be astronauts signed on to launch, with tickets priced at $250K per flight.
As Americans cut back on sodas, Coca-Cola (NYSE:KO) is testing a "Dasani Purefill" machine on the campus of Georgia Tech, across the street from its headquarters in Atlanta. The fountain lets people fill reusable water bottles with free filtered water - but also offers the option of paying to add bubbles and fruity flavors. The test will be expanded on a rolling basis this fall to 20 machines on campuses in 15 states.
"Steve Ritchie would be a great executive for another company. I just don't think he's the right fit for Papa John's at this time,” according to founder John Schnatter, who has also sued the pizza chain for not producing documents related to his ouster. Ritchie, previously Papa John's president, took over as CEO in January after Schnatter criticized NFL leadership over national anthem protests. PZZA shares have dropped over 30% since then.
Energy deals: BP has agreed to acquire nearly all of BHP Billiton's (NYSE:BHP) U.S. onshore shale assets for $10.5B, including entire interests in the Eagle Ford, Haynesville, Permian and Fayetteville oil plays. Separately, Chesapeake Energy (NYSE:CHK) plans to sell all of its Ohio natural gas acreage to Encino Acquisition Partners for about $2B, using the proceeds to pay off debts. BHP +3.3%; CHK +15.2% premarket.
Presenting him with a petition signed by more than 300,000 people, Microsoft (NASDAQ:MSFT) employees questioned CEO Satya Nadella at an intern event in Redmond, Wash., calling on the company to cancel its $19.4M cloud contract with ICE. The presentation is the latest example of employee activism at large tech companies against the Trump administration’s "zero tolerance" policy on immigration.
While Qualcomm CEO Steve Mollenkopf blamed a trade a war for the NXP (NASDAQ:NXPI) deal failure, China's market regulator faulted the two companies, stating their proposals to resolve Chinese antitrust concerns were insufficient. The agency still hopes to find a solution for the deal, which would have been the biggest semiconductor takeover globally, and intends to continue communicating with Qualcomm (NASDAQ:QCOM).
Amazon (AMZN) +3.2% AH on EPS beat, AWS growth.
American Airlines (NASDAQ:AAL) +4.8% pledging aggressive action.
Amgen (NASDAQ:AMGN) +1.1% AH beating expectations.
Allergan (NYSE:AGN) +0.4% raising fiscal guidance.
Altria (NYSE:MO) -3% with its outlook missing expectations.
Bristol-Myers (NYSE:BMY) -1.9% on cancer drug worries.
Celgene (NASDAQ:CELG) +0.7% on double-digit product growth.
Comcast (NASDAQ:CMCSA) +4% amid broadband expansion.
ConocoPhillips (NYSE:COP) +0.4% boosting its output outlook.
Electronic Arts (NASDAQ:EA) -4.9% AH with light guidance.
Intel (NASDAQ:INTC) -5.7% AH on soft data center sales.
Mastercard (NYSE:MA) -3.2% raising its expenses forecast.
McDonald's (NYSE:MCD) -1.7% burned by competitor deals.
Southwest Airlines (NYSE:LUV) +8.4% despite rising fuel costs.
Starbucks (NASDAQ:SBUX) +0.6% AH increasing comparable sales.
Under Armour (NYSE:UAA) +4.6% on momentum overseas.
Valero Energy (NYSE:VLO) +6.9% amid surging margins.
In Asia, Japan +0.6%. Hong Kong +0.1%. China -0.3%. India +1%.
In Europe, at midday, London +0.6%. Paris +0.3%. Frankfurt +0.6%.
Futures at 6:20, Dow +0.1%. S&P +0.1%. Nasdaq +0.2%. Crude -0.3% to $69.39. Gold -0.6% to $1218. Bitcoin +0.2% to $7948.
Ten-year Treasury Yield flat at 2.98%Today's Economic Calendar
8:30 GDP Q2
10:00 Consumer Sentiment
1:00 PM Baker-Hughes Rig Count