Morning Reads


Todays Open Interest Change




Ford Motor (F) is playing catch-up with Tesla (TSLA) as the battle for market share in the electric vehicle space escalates. Ford slashed the prices of its F-150 Lightning electric truck as it takes advantage of increased plant capacity, improved battery raw material costs, and continued work on scaling production. The Detroit automaker has been working on improving accessibility to help lower prices and shorten the wait times for the F-150 Lightning.

Dig deeper: Ford has been upgrading its Michigan plant to triple its annual run rate to a targeted 150K F-150 Lightning trucks starting this fall. The upgrades will lead to greater availability of a built-to-order truck as early as October. The updated F-150 Lightning prices are: Pro MSRP to $49,995 from $59,974; XLT 312A Extended Range MSRP to $69,995 from $78,874; Platinum Extended Range MSRP to $91,995 from $98,074.

Backdrop: CFRA noted that the ramp-up of F-150 Lightning has been sluggish and impacted by battery-related issues (only ~4.5K units delivered in Q2). Ford's latest price cuts come just a couple of days after Tesla said the first Cybertruck rolled off the assembly line. “Ford hears footsteps of Cybertruck and Rivian (RIVN),” said Wedbush analyst Dan Ives. Tesla previously made aggressive price cuts across its portfolio amid growing competition. In response, Ford had slashed the price of its Mustang Mach-E electric SUV by as much as $6K.

SA commentary: SA analyst Jordan Sauer believes investing in Ford is risky, given high leverage, while Tesla's valuation decouples from its underlying growth prospects. But he'd pick Ford over Tesla, as "Ford is generating excitement with its new offerings, and I have it handily outperforming Tesla from here." Pearl Gray Equity and Research believes Ford is undervalued due to growing consumer appetite and government support. (199 comments)

Lead woes

AT&T (T), Frontier Communications (FYBR), and Telephone and Data Systems (TDS) continued last week's slide after a recent investigation revealed that telecom companies have left behind lead sheathed cables. TDS Telecommunications has located about 10 miles of lead cables in its network. Citi believes the concerns will likely be an overhang for at least a few months and potentially longer, echoing concerns by other Wall Street analysts. However, SA analysts do not seem fazed. Tradevestor expects AT&T to bounce back into high-teens once the panic is over. Investing Group Leader JR Research said while there is near-term downside for Verizon, its June lows should remain well-supported. (300 comments)

Grain deal

U.S. wheat and corn futures settled lower, reversing early gains after news of Russia's decision to end participation in the deal that lets Ukraine export crops through the Black Sea. Analysts think the deal could still be renewed, as Russia has threatened to exit the agreement many times in the past. Russia said it would consider rejoining the pact if it saw "concrete results" on its demands. Wheat prices lost steam as "cooler heads" prevailed to tame the initial rally, RCM's Doug Bergman said. "It's the market saying we are not surprised by this," he said, but warned that the prospect of tighter supplies remains real. (3 comments)

More rejection

More Americans are getting rejected for loans, while fewer are applying for any kind of credit, as banks tighten credit conditions amid rising borrowing costs. The rejection rate for U.S. credit applicants climbed to 21.8% in the twelve months through June, a Federal Reserve survey showed, marking the highest level since June 2018. The increase has been broad-based across age groups and highest among those with credit scores under 680. The rejection rate for auto loans exceeded the application rate for the first time since the Fed's SCE Credit Access Survey started in 2013, notching a new series high. (9 comments)

Today's Markets

In Asia, Japan +0.3%. Hong Kong -2.1%. China -0.4%. India +0.3%.
In Europe, at midday, London +0.1%. Paris flat. Frankfurt -0.1%.
Futures at 7:00, Dow +0.1%. S&P flat. Nasdaq -0.1%. Crude +0.4% to $74.44. Gold +0.6% to $1,968.00. Bitcoin -0.5% to $30,016.
Ten-year Treasury Yield -3 bps to 3.76%.

Today's Economic Calendar

8:30 Retail Sales
9:15 Industrial Production
10:00 Business Inventories
10:00 NAHB Housing Market Index
4:00 PM Treasury International Capital

Companies reporting earnings today »

What else is happening...

WSB survey results: Market uncertainty to reign this earnings season.

Senator Warren calls for probe into Tesla's (TSLA) corporate governance.

Microsoft (MSFT), Activision (ATVI) planning later close to $69B deal.

Chip trade group asks Biden to 'refrain' from further curbs on China.

Eli Lilly (LLY) confirms Alzheimer's drug slows cognitive decline.

Petrobras (PBR) maintains spending plan, will adjust dividend policy.

Summer letdown: New 'Mission: Impossible' draws $235M in opening.

Lithium Americas (LAC) gains as appeal of Thacker Pass mine denied.

China slowdown won't tip U.S. economy into recession, says Yellen.

Cathie Wood writes down Twitter stake, but claims to remain bullish.

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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