Morning Reads

Morning Reads

Todays Open Interest Change




Shot down

There had been some hope of cooling tensions between the U.S. and China in recent months, but things now appear to be moving in the opposite direction. An American F-22 Raptor fighter jet shot down what was dubbed a Chinese spy balloon over the weekend, with Secretary of State Antony Blinken canceling a top-level meeting with President Xi Jinping citing violations to U.S. sovereignty. In response, Beijing called the use of force a "violation of international conventions" and warned of "serious repercussions," insisting that its "civilian unmanned airship" was merely collecting meteorological data and strayed off course due to high winds.

Backdrop: The U.S. had recently attempted to get relations back on track following a tension-filled visit to Taiwan by former House Speaker Nancy Pelosi in the summer. Treasury Secretary Janet Yellen held discussions with her Chinese counterpart Liu He at the World Economic Forum in Davos, while President Biden met Xi Jinping in Bali during the G20 summit in November. Friction between the world's two largest economies already lingers over areas like trade, but bigger economic risks are at stake with a battle over access to key cutting-edge technologies.

If things continue to escalate, it could lead to a new long-term crisis. Reports have surfaced that China previously sent high-altitude surveillance balloons over the U.S. that went undetected, while Beijing's ties to Russia during the Ukraine war are under the microscope. Other policies against China could also be taken as public opinion shifts towards a more unified voice. In January, both Democrats and Republicans voted overwhelmingly to establish the House Select Committee on the Strategic Competition Between the U.S. and the Chinese Communist Party. Did the U.S. or China emerge victorious in the trade war?

SA commentary: "A recently leaked memo from a U.S. Air Force four-star General indicates that the U.S. and China could likely be at war in 2025," writes Marketplace author, Samuel Smith, who discusses the potential ramifications of such a scenario on the global economy and stock market. He also shares his top pick to buy today to prepare any portfolio for a war between the world's two biggest economies. (15 comments)


While January's non-farm payrolls report was a blowout, with the unemployment rate hitting the lowest mark since 1969, the majority of Americans have seen their budgets squeezed last year. In fact, at the end of 2022, some 64% of U.S. consumers were living paycheck-to-paycheck, up from 61% in the year-ago period, according to a recent study by LendingClub and That means 9.3M more Americans are living paycheck-to-paycheck, and what's even more alarming is that 86% of them earned more than $100K annually, underscoring the heightened scale of the surge in the cost of living. Take Wall Street Breakfast's latest survey on whether you believe there will be an improvement in personal finances in 2023. (351 comments)

More layoffs

Due to a decline in the demand for personal computers, Dell Technologies (DELL) is laying off around 6,650 employees, which will impact 5% of its global workforce. "We've navigated economic downturns before and we've emerged stronger," co-COO Jeff Clarke declared. "We will be ready when the market rebounds." Device shipments including PCs took a hit in 2022, with Dell seeing the largest decline, and a further downfall is expected in 2023. The news comes at a time when most tech companies are slashing headcounts to save cost and survive the current macro environment (rival PC competitor HP (HPQ) also recently announced layoffs). (5 comments)

Merger Monday

Looking to form a global gold giant, Newmont (NEM) has made a $17B offer to acquire Australia's top miner of the precious metal - Newcrest Mining (OTCPK:NCMGY). That's not all. Public Storage (PSA) is ramping up efforts to purchase its smaller rival, making an unsolicited offer to buy Life Storage (LSI) for $11B in an all-stock deal. As with most transactions, the stocks of the buyers and suitors are moving in opposite directions in early trading. Pre-event merger & acquisition investors are also set to have a busy week in store with several companies scheduled to report their quarterly results. (12 comments)

Today's Markets

In Asia, Japan +0.7%. Hong Kong -2%. China -0.8%. India -0.6%.
In Europe, at midday, London -0.9%. Paris -1.6%. Frankfurt -1.2%.
Futures at 6:30, Dow -0.7%. S&P -0.9%. Nasdaq -1.1%. Crude +0.5% to $73.72. Gold +0.4% to $1883.90. Bitcoin -2.7% to $22,756.
Ten-year Treasury Yield +8 bps to 3.61%

Today's Economic Calendar

12:30 PM Investor Movement Index

Companies reporting earnings today »

What else is happening...

Here are the 10 most shorted stocks on Wall Street.

EU and the U.K. agree to price caps on Russian oil products.

Powerful quake kills at least 640 people in Turkey and Syria.

Musk wins Tesla (TSLA) shareholder suit over 'funding secured' tweet.

Also lifts Model Y (TSLA) prices in the U.S. following recent cuts.

Carlyle (CG) plans to name Goldman vet Harvey Schwartz as CEO.

Apple (AAPL) says artificial intelligence 'is a major focus of ours.'

Take a look at Zim (ZIM), which sailed to the top of industrial gainers.

Rivian (RIVN) eyes micromobility play with electric bike concept.

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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