Morning Reads


Todays Open Interest Change




The Supreme Court has overturned the Biden administration’s student-debt forgiveness plan in a 6-3 decision, ruling it exceeded the authority Congress granted to the executive branch. The plan, struck down on Friday, would have wiped off $430B in loans from the government's books, but there are already some alternatives that are in the making. The administration will pursue student debt relief through a longer route via the "Higher Education Act," while other plans would allow low-income borrowers to pay smaller amounts on the balance of their loans over time, or put a temporary ban on penalties.

Letter of the law: Chief Justice John Roberts said in the opinion that while the Secretary of Education has the authority to "waive or modify" existing statutory or regulatory provisions applicable to financial assistance programs under the HEROES Act, statutes cannot be rewritten from "the ground up." Earlier, the high court had rejected the first of two challenges against President Biden's plan to cancel a portion of federal student loans as part of a COVID relief program. Writing the majority opinion, Justice Samuel Alito held that the plaintiffs did not have standing, that is, they failed to establish that they would suffer any injury from the loan forgiveness plan.

"This carries huge implications for inflation, consumer discretionary spending, and the distribution of wealth in the U.S.," writes SA analyst Logan Kane, analyzing winners and losers from the landmark ruling. The student loan debate also continues to take place among investors. Some say it would correct devious historical loan practices and support the broader economy. Others have flagged it as another contributor to high inflation, or a measure that would hurt those who chose not to go to college because of the cost, don't have loans, or have already paid them off.

What to watch: Related student loan stocks, including SoFi Technologies (SOFI), Sallie Mae (SLM), Navient (NAVI), and Nelnet (NNI), have been jittery since the announcement by SCOTUS. Once payments resume, the typical student loan payment will be between $210-$314 per month, according to Wells Fargo. In terms of the entire portfolio, the Federal Reserve estimates that Americans owed $1.6T in student loans as of the first quarter of 2023, with the average student loan debt around $38,000 per borrower. (851 comments)

Survey Monday

Is it fair to forgive student loans?

· Yes, it's the right thing to do (no different than other subsidies or grants)
· No, must be held responsible for economic choices (read the fine print)

Take the survey and share your thoughts in the WSB comments section.

Travel plans

Smoky haze, hot weather and storms... Many flights have been delayed or canceled over the past week in the U.S., posing some problems for travelers ahead of the Fourth of July. United Airlines (UALaccounted for most of the flight cancellations, but that didn't stop CEO Scott Kirby from hopping on a private jet to get out of the New York area. He has since apologized, but unions representing airline staff have accused United's management of planning poorly and operating too many flights. Meanwhile, the Independence Day weekend is set to be the busiest on record, with 4.17M Americans flying to their destinations, up 11.2% from 2022 and 6.6% from 2019. (3 comments)

Record deliveries

Handily beating estimates, Tesla (TSLA) is powering higher before the bell today. Shares are up 6.5% after the automaker registered record electric vehicle deliveries in the second quarter. In fact, the stock has more than doubled in value year-to-date, splitting analysts on what will come next. "We remain sell-rated on Tesla as we believe its rally this year is not driven by fundamentals," Investing Group Leader Tech Stock Pros warned prior to the delivery report, while Victor Dergunov is doubling down on dip buying. (343 comments)

A new tune

The music industry is set for another heavy structural change as the decade progresses. That's according to Goldman Sachs, which said the main players will need a "coordinated response" to hold on to sustainable growth and capture new opportunities. The 2030 growth outlook still remains strong, with Goldman raising its CAGR expectations for 2023-2030 to 7.3%. Stocks that are Buy-rated include Warner Music (WMG) and Live Nation (LYV). See the full list of Goldman's picks here. (9 comments)

Today's Markets

In Asia, Japan +1.7%. Hong Kong +2.1%. China +1.3%. India +0.8%.
In Europe, at midday, London +0.3%. Paris +0.2%. Frankfurt +0.1%.
Futures at 7:00, Dow -0.1%. S&P flat. Nasdaq +0.2%. Crude +1% at $71.31. Gold -0.4% at $1,921.50. Bitcoin +0.4% to $30,652.
Ten-year Treasury Yield +3 bps to 3.85%.

Today's Economic Calendar

9:45 PMI Manufacturing Index
10:00 ISM Manufacturing Index
10:00 Construction Spending
NYSE early close at 1:00 PM
SIFMA closes at 2:00 PM

Companies reporting earnings today »

What else is happening...

Apple (AAPL) exceeds $3T market cap as analysts heap praise.

Why is social media being blamed for fueling riots in France?

Twitter temporarily fixes limit on tweets users can read per day.

AMC's (AMC) APE conversion decision more than a week away.

Nintendo's (OTCPK:NTDOY) 'Zelda' lifts videogame sales in May.

What’s next for clinical research firms after pandemic boom?

Israel to buy 25 more Lockheed (LMT) F-35 stealth jets in $3B deal.

Pay hikes expected to remain high in 2024 amid labor shortages.

UBS (UBS) aims to skip $10B backstop from Swiss government.

As northeast U.S. air quality suffers, here are some potential stock ideas.

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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