Morning Reads


Todays Open Interest Change




It's that time of the year again. Wings, dips and hot dogs are on the menu this weekend as the Kansas City Chiefs take on the Philadelphia Eagles in Super Bowl LVII. Households across the U.S. will huddle around screens, and many have already been betting on the big game, wagering a total of $16B, according to the American Gaming Association. It's even anticipated to see the most legal bets ever placed on an event in the U.S., so keep an eye on shares of DraftKings (NASDAQ:DKNG) and FanDuel (OTCPK:PDYPY), as well as Barstool (NASDAQ:PENN), Caesars Sportsbook (NASDAQ:CZR) and BetMGM (NYSE:MGM).

SA commentary: Many of the companies in the online sports betting industry are operating in a potentially lucrative market, according to contributor Tangerine Capital, who asks if DraftKings (DKNG) is Being Outdone By Competition? Marketplace author Howard Jay Klein also discusses FanDuel's grip on market share leadership, and if it will continue even after a possible spinoff by Flutter (OTCPK:PDYPY). For those looking for more entertainment, note that Molson Coors (NYSE:TAP) and DraftKings are running a unique Super Bowl promotion, where fans could bet on Coors Light and Miller Lite commercials.

Speaking of advertising, there will be some notable industry players missing. The biggest commercials last year centered around crypto, even leading some to call the game the "Crypto Bowl" - a play on the "Dot-Com Bowl" in 2000 - when speculative internet companies sought to gain mainstream acceptance (remember the liquidation?). Well, it seems like the sector is also going through its own day of reckoning following the notorious collapse of FTX. Does fortune still favor the brave?

Go deeper: In recent times, watching commercials has turned into somewhat of a similar tradition as the game itself, with many firms shelling out around $7M for a 30-second slot. It gives them the ability to advertise on the largest stage in the world, which will be shared by Rihanna during the halftime show. Fox (NASDAQ:FOX) even sold out its Super Bowl ad inventory a couple of weeks ago, and while the broadcaster cut it a little too close for comfort, many big brands were eager to make a splash from traditional beverages made by Anheuser-Busch (BUD) to EV promotions from General Motors (NYSE:GM) and Netflix (NASDAQ:NFLX).

Dodging a recession

While the U.K. just staved off a technical recession, partly due to bumper sales at pubs during the World Cup in November and December, it's not out of the woods yet. Like many parts of the Europe, higher energy bills following Russia's invasion of Ukraine have weakened household spending (though things have been better in recent months due to an unusually warm winter and government price caps). Business investment has also flatlined since Brexit and the number of workers in the labor pool has shrunk since COVID-19. In fact, among the G7, the U.K. has recorded the weakest recovery since the pandemic, and while the Bank of England doesn't expect a recovery to its pre-COVID peak until 2026, the domestic stock market continues to hit record highs. (5 comments)

Staking on staking

Regulatory rumblings are hitting the crypto sector once again. Notable exchange Kraken has reached a deal with SEC that will shutter its crypto staking platform, which allows investors to earn a yield by temporarily depositing their tokens with an intermediary or crypto network to facilitate blockchain transactions. A $30M settlement was also reached over Kraken's failure to register the program, causing further jitters elsewhere in the sector. Shares of rival crypto exchange Coinbase (NASDAQ:COIN) slumped 14% on Thursday, with CEO Brian Armstrong saying the SEC may want to get rid of crypto staking for retail customers entirely. Coinbase reported $62M in revenue from "blockchain rewards," which include staking, in the third quarter of 2022, accounting for roughly 10% of its total revenue for the period. (17 comments)

Russia responds

WTI crude futures (CL1:COM) advanced 2.5% overnight to regain the $80/bbl level after Russia said it will cut oil output by 500,000 barrels a day next month. Brent futures (CO1:COM) climbed 2.4% to $86.50/bbl. Moscow said the output decrease, which is around 5% of its production, was in response to sanctions such as price caps on crude and oil products that are an "intervention in market relations and an extension of destructive energy policies of the collective West." It'll also deepen the 2M bpd curbs announced late last year by OPEC+, and comes as Russia is said to prepare for a fresh offensive in Ukraine ahead of the one-year anniversary of the war that started on Feb. 24, 2022. (10 comments)

Today's Markets

In Asia, Japan +0.3%. Hong Kong -2%. China -0.3%. India -0.2%.
In Europe, at midday, London -0.5%. Paris -0.8%. Frankfurt -1.2%.
Futures at 6:30, Dow -0.2%. S&P -0.4%. Nasdaq -0.9%. Crude +2.5% to $80. Gold -0.2% to $1875.40. Bitcoin -3.7% to $21,853.
Ten-year Treasury Yield +1 bps to 3.70%

Today's Economic Calendar

10:00 Consumer Sentiment
12:30 PM Fed's Waller Speech
1:00 PM Baker-Hughes Rig Count
2:00 PM Treasury Statement
4:00 PM Fed's Harker Speech

Companies reporting earnings today »

What else is happening...

Peltz calls off Disney (DIS) proxy fight after restructuring talk.

Compared to 'strong' Uber (UBER), things look terrible at Lyft (LYFT).

Yahoo (APO) lays off more than 20% of staff in digital ad strategy shift.

Is Exxon (XOM) creating a new trading division for global energy?

SpaceX (SPACE) ignites Starship in key test before going to orbit.

'Completely unacceptable': Massive outflows hit Credit Suisse (CS).

PayPal (PYPL) earnings are out; CEO Dan Schulman to retire.

Safeguarding its chips, GM (GMinks deal with GlobalFoundries (GFS).

Belt-tightening: Micron (MU) suspends bonuses, cuts executive salaries.

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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