Morning Reads


Todays Open Interest Change




Pulling the plug

Walt Disney (NYSE:DIS) is scrapping a near-$1B office campus it planned to build in Florida, as well as related plans to relocate some 2,000 of its California workers to the offices, citing "changing business conditions." Reading between those lines, though, it's part of the ongoing feud with Florida Gov. Ron DeSantis over what Disney has called "targeted retaliation" against the company through crackdowns on its special taxing district.

Go deeper: The planned Lake Nona Town Center was set to bring more than 2,000 jobs to the Orlando region. Many of those employees would've come from a Southern California department known as Imagineering, which works with Disney's moviemakers to develop theme park attractions. Most of them complained harshly about the planned move, set up in 2021 amid what Disney Parks chief Josh D'Amaro called Florida's "business-friendly climate". Meanwhile, Bob Iger, who recently returned as CEO, was much less enthusiastic about the Lake Nona development than his predecessor Bob Chapek.

Now D'Amaro says business conditions are changing, and "I hope we're able to" continue plans for $17B in construction at Orlando's Disney World. But he's now looking at moving some 200 employees that already relocated back to California.

SA commentary: Amid all the political drama, SA contributor Brett Ashcroft Green believes the market wants to see Disney dominate the streaming space. "Don't forget, Disney + didn't even launch until 2019 and 2018 was very profitable without it. Buy the real estate assets and worry about the DMED later," he said. Howard Jay Klein, Investing Group Leader of The House Edge, believes Disney's Parks must remain a key element in its future under any foreseeable or black swan economic conditions. "It may be less price elastic in this insane inflated economy - but that’s no match for parental delight," he said. (527 comments)

End in sight

House Speaker Kevin McCarthy said negotiators could come to an agreement in principle to raise or suspend the debt ceiling as soon as this weekend, allowing the House of Representatives to vote on a bill next week. "I can see now where a deal can come together," he told reporters at the Capitol. That's the most positive he has been since Treasury Secretary Janet Yellen has estimated that the U.S. government is at risk of default as soon as June 1. Texas Republican Rep. Kay Granger, who chairs the House Appropriations Committee, said a deal is "close" and Steny Hoyer, a Democratic representative from Maryland and former congressional leader, said: "I think we're going to get a deal." (72 comments)

No pause yet?

The chances of a rate hike at the Federal Reserve's June 13-14 meeting increased yesterday after Dallas Fed President Lorie Logan said she's not yet in favor of pausing rate increases, based on current data. The probability of a 25-basis point rate hike increased to 37.8% today from 10.7% a week ago, according to the CME FedWatch Tool. That would be the Fed's 11th straight rate hike. Fed Governor Philip Jefferson said a "considerable amount of data on economic activity" for April and May have yet to come in before a decision is made. He said he's considering monetary policy's "long and variable lags", uncertainty over tighter lending standards, GDP's slower growth, and the policy's muted effect on the labor market so far. Note that Fed Chair Jerome Powell, Fed Governor Michelle Bowman and New York Fed President John Williams are all slated to address separate events later today. (11 comments)

Legal shield upheld

The U.S. Supreme Court handed a major win for internet and social media companies by maintaining legal protections for content posted by users in two separate lawsuits that claimed that these firms "aided and abetted" terrorists. In a case involving Google's (NASDAQ:GOOG) (GOOGL) video-sharing platform YouTube, judges refused to limit the immunity that internet companies have under Section 230 of the Communications Decency Act. The case pertains to Islamic State's attack in Paris in 2015. In another case, judges dismissed a lawsuit against Twitter that sought to hold the social media app liable under the Anti-Terrorism Act for an Istanbul nightclub shooting in 2017. In the Twitter case, the top court raised doubts if social media firms can be held liable for "agnostic" algorithms that push content to users. The rulings put to rest fears that the tech industry could be subject to a wave of similar lawsuits. (4 comments)

Today's Markets

In Asia, Japan +0.8%. Hong Kong -1.4%. China -0.4%. India +0.5%.
In Europe, at midday, London +0.4%. Paris +0.7%. Frankfurt +0.7%.
Futures at 6:30, Dow +0.1%. S&P +0.1%. Nasdaq flat. Crude +1.3% to $72.88. Gold +0.4% to $1,967.90. Bitcoin -2% to $26,822.
Ten-year Treasury Yield flat at 3.65%

Today's Economic Calendar

8:45 Fed's Williams Speech
9:00 Fed's Bowman Speech
10:00 Quarterly Services Report
11:00 Jerome Powell Speech
1:00 PM Baker Hughes Rig Count

Companies reporting earnings today »

What else is happening...

Equity Residential (EQR) founder Sam Zell dies at 81.

PacWest (PACW) debt rating downgraded to junk at Fitch.

Billionaire Carl Icahn says bearish market bets were a mistake.

Tesla (TSLA) bulls remain recharged after annual shareholder meet.

Netflix (NFLX) shares log 10% gain amid positivity from first ad upfront.

ESPN making moves toward streaming its channel direct to consumers.

WHO recommends updating COVID shots to add Omicron XBB.1 variants.

Applied Materials (AMAT) shares slip despite Q2 results topping expectations.

Warren Buffett buys $200M in Occidental (OXY) stock, raises stake to 24.4%.

Exxon (XOM) sees net-zero global emissions scenario by 2050 'highly unlikely'.

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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