Monday Morning Reads

Monday Morning Reads



From The Weekend:

  • Positive views on SYK, MSFT, APTV, SAVE, BUD, BLL while cautious on FIVEBarron's Report
  • Positive view on Brookfield (BAM). Barron's Report
  • Positive views on MRK REGN while cautious on NVO ABBVBarron's Report
  • Positive view on ABB (ABB). Barron's Report
  • Positive view on Corning (GLW). Barron's Report
  • Positive view on AMD (AMD). Barron's Report
  • Emirates considering new Boeing (BA) 777x order. Bloomberg Report
  • Starboard plans to take stake in Bristol-Myers (BMY, CELG). Bloomberg Report
  • General Motors (GM) plans to invest $2.73 bln in Brazil from 2020-2024. Reuters Report
  • GSMA discussing the possibility that Huawei might be excluded from markets (T, VZ, S, TMUS, XLK). Reuters Report
  • President Trump sought a loan from Deutsche Bank (DB) during campaign, but request was rejected. NY Times Report
  • Apple (AAPL) CEO Tim Cook critical of Facebook (FB) over privacy. Sunday Times UK Report
  • Domino's Pizza (DPZ) franchisees will likely not open new stores during first half of 2019. Sunday Times UK Report
  • World Health Organization recommends restrictions on cannabis be lessened (TLRY, CGC, MJ, NBEV). Bloomberg Report
  • Decisions from Boeing (BA) and the FAA being questioned following Lion Air crash. NY Times Report
  • Spotify (SPOT) plans to purchase Gimlet Media. NY Times Report
  • Goldman Sachs (GS) could withhold pay from execs amid 1MDB scandal. WSJ Report
  • Deutsche Bank (DB) tried to shed loan to Russian Bank VTB Group in 2016. WSJ Report
  • Cisco (CSCO) and Apple (AAPL) want more data regulations. FT Report
  • Investors looking toward turnaround plan at Ford (F). WSJ Report


U.S. stock index futures held steady overnight with trading muted due to the closure of many Asian markets for the Lunar New Year. About 12% of the U.S. workforce is also expected to call in sick today following last night's Super Bowl festivities. Wall Street ended mixed on Friday - as optimism from an unexpected surge in January U.S. job growth was offset by a weaker-than-expected outlook from Amazon (NASDAQ:AMZN). Investors now have their eyes set on Alphabet (GOOGGOOGL), which will report Q4 figures after the bell.


The U.S. corporate earnings season hits the mid-point this week, with around 234 companies in the S&P 500 so far reporting results. Collective earnings per share have grown by around 18% compared to the same period last year, just ahead of the 15.5% estimate for the entire reporting season, according to Refinitiv data. 71% of companies have additionally reported earnings that have beaten analysts' estimates, a figure that is firmly ahead of the long-term average of 64%.

Theresa May is "determined" to deliver Brexit "on time," on March 29, despite ministers in her own Cabinet suggesting a delay could be needed to push related legislation through the U.K. House of Commons. The prime minister is expected to return to Brussels soon with "a fresh mandate, new ideas and a renewed determination," setting herself a deadline of Feb. 13 to update MPs on progress in new talks.

China's sprawling services sector maintained a solid pace of expansion in January even though growth moderated slightly, offering some support for the world’s second largest economy as manufacturing cools. Caixin/Markit's services PMI dipped to 53.6 from 53.9 the previous month, but well above the 50.0 mark separating growth from contraction. The data contrasted with official figures from Thursday, which pointed to a faster expansion in the non-manufacturing sector.

A military intervention in Venezuela is "an option," according to President Trump, as Western nations boost pressure on socialist leader Nicolas Maduro to step down. On Saturday, hundreds of thousands of protestors flooded the streets of Caracas in support of self-proclaimed President Juan Guaido. The Trump administration last week issued crippling sanctions on Venezuelan state oil firm PDVSA, whose debt issue due in 2026 is trading at 23.75 cents on the dollar.

The U.S. and Russia suspended a 1987 nuclear weapons treaty on Saturday, which banned land-based missiles with a range between 300 and 3,400 miles, and kept nuclear-tipped cruise missiles off the European continent for three decades. Arms race? Putin said Moscow would follow Washington in pursuing research and development of intermediate-range missiles, but said he wouldn't deploy them in Europe or elsewhere unless the U.S. did so. Related tickers: BALMTNOCRTNGDBWHONACMJECSAICCOLAJRDHII


Sears' unsecured creditors get their day in court today, protesting Eddie Lampert's $5.2B transaction to buy the 126-year-old retailer out of bankruptcy through his hedge fund ESL Investments - the only deal that would stave off liquidation. In a litany of filings that piled up over the past two weeks, they have accused Sears' (OTCPK:SHLDQ) Lampert of everything from "stealing assets" to "years of misconduct" that reads like a Shakespearean tragedy.

General Motors is expected to begin the next round of layoffs today, according to the Detroit Free Press. The automaker is estimated to have as many as 5,750 white-collar workers that need to be eliminated as part of the slimming down process. Analysts have been fairly supportive of GM's new focus on restructuring the business amid the shift to electric vehicles and autonomous services.

Beating out a joint bid from Pratt & Whitney (NYSE:UTX) and Honeywell (NYSE:HON), General Electric (NYSE:GE) has secured a $517M contract to build engines for the U.S. Army's next generation of helicopters. T901 engines will be supplied for Boeing AH-64 Apaches (NYSE:BA) and Sikorsky UH-60 Black Hawks (NYSE:LMT), replacing an older GE-built model - the T701 - which currently powers the two vehicles. The T901 could also "potentially outfit the Army’s next generation reconnaissance helicopter in the Future Vertical Lift family of systems," GE Aviation CEO Tony Mathis said in a statement.

The New England Patriots beat the Los Angeles Rams 13-3 on Sunday in the lowest scoring Super Bowl ever, capturing the NFL championship for a record-tying sixth time and cementing their dynasty of nearly two decades. Casinos and sports betting providers likely saw a windfall with sports gambling now legal in eight states, as well as broadcaster CBS, which charged a base price of about $5.25M per 30-second commercial. Related stocks: MGMDRAFTCZRSGMSDUELNYNYWYNNPENNBYD

Starboard Value has taken a stake in Bristol-Myers Squibb (NYSE:BMY), the pharmaceutical giant that agreed to acquire Celgene (NASDAQ:CELG) in a record $74B deal last month, according to Bloomberg. The size of the stake and any plans couldn't immediately be learned, but one thing the activist fund may be trying to do is to push Bristol to consider a sale. BMY +1.7%premarket.

It's a rough start to the week for Sony (NYSE:SNE) after the company cut its revenue outlook for the fiscal year on the back of weaker-than-expected sales of cameras and smartphones. Operating income from PS4 gaming also fell 14% to ¥73B during the holiday quarter. Sony shares tumbled in Tokyo, closing down 8% to ¥5,055, echoing other large technology companies that have lowered forecasts on slowing global economic growth.

Fresh pressure on Huawei... An upcoming U.K. government report will find the Chinese telecom equipment supplier failed to address security concerns raised in 2018, sources told The Telegraph. It will also criticize the company over the security of its technology as it prepares to roll out 5G networks across Britain. Bad news for Huawei has generally been seen by investors as an opportunity for Nokia (NYSE:NOK) and Ericsson (NASDAQ:ERIC).

More smart footwear? Alphabet's (GOOGGOOGL) life sciences arm, Verily, has been looking for partners to co-develop shoes with embedded sensors to monitor the wearer's movement and weight, as well as to measure falls, CNBC reports. The Google sister company has in recent months shown a prototype of the design in private meetings, hoping to attract partners to build the shoes and take them to market, but it's very early in the process.

Spotify is looking to splurge on podcasts. According to Recode and the WSJ, the music streaming giant is currently in talks to acquire Gimlet Media for over $200M, marking the first time Spotify (NYSE:SPOT) has purchased another company. It would also be a huge deal as far as podcasts go, with another example being iHeartMedia's (OTCPK:IHRTQ) acquisition of Stuff Media last year in a notably smaller $55M transaction.

Today's Markets 
In Asia, Japan +0.5%. Hong Kong closed. China closed. India +0.3%.
In Europe, at midday, London +0.4%. Paris -0.4%. Frankfurt -0.2%.
Futures at 6:20, Dow flat. S&P flat. Nasdaq flat. Crude +0.7% to $55.66. Gold -0.5% to $1315.40. Bitcoin -0.7% to $3405.
Ten-year Treasury Yield flat at 2.7%Today's Economic Calendar
10:00 Factory Orders
12:30 PM TD Ameritrade IMX
7:30 PM Fed's Mester: Monetary Policy and Economic Outlook

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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