Morning Reads


Todays Open Interest Change



Scorching summer

Extreme temperatures are being notched across the globe as a series of intense heat waves and domes refuse to let up. Phoenix just recorded 110 degrees Fahrenheit for the 19th straight day, Rome witnessed its hottest temperature ever, as well as other records across parts of Asia, the Middle East and North Africa. Weather alerts continue to remain in place, while health warnings encourage people to stay in cool indoor areas and to drink water regularly even if they do not feel thirsty.

Blazing hot: In total, some 58M people across the U.S. are expected to experience triple-digit temperatures this week and around 100M people are under heat advisories. Parts of Northern states have also broken daily temperature records, but things are way worse across the Southwest and Deep South. "Take the heat seriously and avoid time outdoors," the National Weather Service warned in a bulletin. "Temperatures will reach levels that pose a health risk and are potentially deadly to anyone without effective cooling and/or adequate hydration. Heat is the leading weather-related killer in the U.S."

With power grid demand approaching record levels, industry leaders are talking about the energy market and the potential for new incentives surrounding additional power generation. There are also concerns about agriculture and farming, with water use going up to cool livestock and hydrate parched land and crops. Tourism is another economic worry in some parts of the country, with businesses forced to change their hours, while hot temperatures can jumpstart the wildfire season and prolong its devastating effects.

Stock watch: Shares of companies in the A/C space have been doing quite well, with Carrier Global (NYSE:CARR) soaring 17% over the past month, compared to the 4% gain of the benchmark S&P 500. Related stocks that also aren't cooling down include AAON (AAON), Comfort Systems USA (FIX), Lennox International (LII) and Watsco (WSO). Potential blackouts have additionally driven up demand for backup power, with generator stocks like Generac (NYSE:GNRC) seeing a 15% gain over the last month alone. When zooming out over a longer timeframe, generator providers like Caterpillar (CAT) and Cummins (CMI) are also up 30% and 50%, respectively, since last summer.

Trading activity

Retail investors are turning bullish, according to Schwab (SCHW) CEO Walt Bettinger, as investor optimism returns to the stock market. The brokerage's clients have been adding equity exposure over the past few months, with the volume of buy orders coming in 20% higher than sell orders in Q2. Meanwhile, Schwab's earnings topped estimates, pushing its stock 13% higher on Tuesday, as it added 1M new brokerage accounts. Other rivals in the industry, like E-Trade from Morgan Stanley (MS), Merrill Edge from Bank of America (BAC), and Interactive Brokers (IBKR), also reported quarterly numbers during the same session. (3 comments)

Seizing assets

While Moscow's takeover of Danone (OTCQX:DANOY) and Carlsberg's (OTCPK:CABGY) Russian units was said to be temporary, Vladimir Putin is now handing over control of these assets to his closest allies. Chechen Agriculture Minister Yakub Zakriev, nephew of Chechen leader Ramzan Kadyrov, was appointed head of Danone Russia, while Putin allies Yuri and Mikhail Kovalchuk have signaled interest in Baltika. The Kremlin can "take assets away from foreigners and give them to regime-friendly owners. This is a signal that anything goes," warned Alexandra Prokopenko, a non-resident scholar at the Carnegie Russia Eurasia Center. What other Western companies might be next?

Home turnover

As high mortgage rates in the U.S. keep homeowners on the sidelines, the home turnover rate in the first half of 2023 dropped to the lowest level in at least a decade, according to real estate brokerage Redfin (RDFN). About 14 of every 1K U.S. homes changed hands during the first six months of the year, down from 19 in the same period in 2019, before the pandemic. In order to change the dynamics, Redfin's Taylor Marr said mortgage rates had to drop closer to 5%, which would help free up some inventory and bring monthly payments down. Other factors that could boost turnover include building more housing, zoning reforms, and subsidies via tax breaks. (14 comments)

Today's Markets

In Asia, Japan +1.2%. Hong Kong -0.3%. China flat. India +0.5%.
In Europe, at midday, London +1.6%. Paris +0.4%. Frankfurt +0.1%.
Futures at 7:00, Dow +0.1%. S&P flat. Nasdaq +0.2%. Crude +0.2% to $75.84. Gold -0.1% to $1,979.30. Bitcoin -0.1% to $29,994.
Ten-year Treasury Yield -3 bps to 3.76%.

Today's Economic Calendar

7:00 MBA Mortgage Applications
8:30 Housing Starts and Permits
10:30 EIA Petroleum Inventories
1:00 PM Results of $12B, 20-Year Bond Auction

Companies reporting earnings today »

What else is happening...

Tesla (TSLA) earnings preview: All eyes on pricing, margin developments.

Streaming industry: What to expect from Netflix's (NFLXQ2 results?

Microsoft (MSFT) hits all-time high after unveiling pricing for AI tool.

ASML (ASML) beats top and bottom line estimates, raises FY outlook.

Carvana (CVNA) skyrockets after results and deal to restructure debt.

J&J (JNJ) is latest Big Pharma to sue over Medicare drug pricing.

Novartis (NVS) raises FY outlook, board endorses Sandoz spinoff.

Defense spending: Lockheed Martin (LMT) beats estimates as sales rise.

Gamers' plea to block Activision (ATVI)-Microsoft (MSFT) deal is denied.

Broadcom's (AVGO) VMware (VMW) purchase gets U.K. provisional nod

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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