Morning Reads

Morning Reads

Todays Open Interest Change



There continues to be some uncertainty surrounding global grain prices as Russia and Turkey wrapped up talks discussing a resumption of the Black Sea Grain Initiative. On shaky ground since first signed in July 2022, the U.N.-backed agreement sought to guarantee the safety of the food supply chain despite attacks on grain export facilities, slow ship inspections and uncertain renewal deadlines. It's a big deal, as Ukraine is one of the world's largest suppliers of wheat and corn, and produces about half of the globe's sunflower oil.

Snapshot: The war contributed to an extremely volatile environment for global grain prices in 2022, with crises and shortages popping up in regions across Asia, Africa, the Middle East and Latin America. At their latest meeting, Vladimir Putin told Recep Tayyip Erdogan that he wouldn't revive the grain deal unless restrictions on Russia's agricultural exports were removed - including on food and fertilizer - that have been hampered by sanctions on financing and shipping. "We are ready to immediately return to it as soon as the promises made to us are fulfilled," Putin declared at a joint press conference.

It's also a matter of leverage. The scrapping of the Black Sea Grain Initiative hasn't stopped Russia from exporting record volumes of wheat, while its fertilizer exports are also recovering to pre-war levels. Moscow also just inked a deal to send 1M tons of grain to African nations via Turkey (which has offered to process them into flour), and many state grain buyers like Egypt are inking private transactions instead of traditional tenders. Ukrainian grain can also make it to market without a new deal, but higher transport costs weigh on profit margins and could lead to fewer plantings and supplies in the long term.

More diplomacy: The White House National Security Council expects Putin to hold talks with North Korea's Kim Jong Un later this month as the two countries seek closer military ties. Under discussion is the exchange of artillery shells and anti-tank missiles for advanced technology for satellites and nuclear-powered submarines, according to several reports. Russia's Defense Minister Sergei Shoigu also confirmed that Moscow is considering joint naval exercises with China and North Korea, in what would be a first for the regime in Pyongyang.

Hosts scramble

Airbnb (ABNB) hosts in New York are bracing for a new regulation that goes into effect today, effectively banning short-term rentals. The city argues that short-term rentals take away much-needed affordable housing stock, and hotels are surely no big fans. This may not have a material adverse effect on Airbnb's results, but many hosts fear that the stringent rules could set a precedent that destroys the benefits of its sharing economy. Note that analysts widely expect Airbnb's revenue growth to slow further, but Investing Group Leader JR Research said the stock's pending addition to the S&P 500 has strengthened the market's confidence in its growth story. (83 comments)

Sitting tight

A lack of U.S. homes for sale has pushed up home prices to the highest level since October, according to real estate brokerage Redfin (RDFN), as homeowners don’t want to give up their relatively low mortgage rates. "Another reason for the big year-over-year price increase is that prices came down rapidly at this time last year, with rising mortgage rates sidelining buyers." The inventory shortage is causing competition for desirable homes, with the median home-sale price climbing 5% Y/Y to $380K during the four weeks that ended August 27. Miami, Florida, saw the most significant Y/Y increase in home prices among the 50 most populous metropolitan areas, with the city’s median home-sale price jumping 17% from a year ago. (143 comments)

AI budget

Artificial intelligence is making waves across Wall Street, leading to sky-high valuations in chipmakers. Even biopharma firms with AI connections have benefited, including Recursion Pharmaceuticals (RXRX). As AI adoption increases across industries, Morgan Stanley projected that the healthcare sector's 2024 budgetary allocation for the technology will nearly double from 2022. It said the potential use of AI could be transformational for the healthcare sector, advising investors to focus on four key areas. Investing Group leader Lyn Alden Schwartzer also delved into certain AI themes, including how the technology can lower the costs of developing new drugs. (51 comments)

Today's Markets

In Asia, Japan +0.3%. Hong Kong -2.1%. China -0.7%. India +0.2%.
In Europe, at midday, London +0.1%. Paris -0.4%. Frankfurt -0.3%.
Futures at 7:00, Dow flat. S&P -0.1%. Nasdaq -0.2%. Crude -0.4% to $85.23. Gold -0.5% to $1,956.60. Bitcoin -0.6% to $25,754.
Ten-year Treasury Yield +2 bps to 4.23%

Today's Economic Calendar

Auto Sales
10:00 Factory Orders
12:30 PM Investor Movement Index

Companies reporting earnings today »

What else is happening...

Rare Stock Picks In August 2023 - From 34 Discerning Analysts.

Alibaba (BABA), other Chinese tech firms seek deepfake approval.

Magellan Midstream (MMPCEO urges holders to vote for Oneok deal.

Arm (ARM) is set to go public soon. Is the hype warranted?

Why is big pharma unmoved despite Medicare pricing threat?

CarvanaCarMax should be in driver's seat amid used car shortage.

Albemarle (ALB) raises Liontown Resources takeover bid to $4.3B.

Biden said to approve sending depleted-uranium ammo to Ukraine.

Country Garden debt deal brings relief for China's property sector.

Consumers are looking for value offerings - these names may benefit.

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.

More Posts by UPB: View All | Private Twitter Feed: Access Now! (For Diamond Members)