Morning Reads

Morning Reads

Open Interest Changes



A lot of headlines have been coming out of the media sector over the past 24 hours, putting a fresh spotlight on the industry. Hollywood actors have inked a tentative agreement with major studios following an unprecedented 118-day strike, in a move that can allow entertainment companies to restock their content libraries. Tense negotiations had previously centered around minimum salaries and residuals for streaming programs, as well as compensation protections against the use of artificial intelligence.

Bigger picture: The end of the actors' strike comes after writers and studios reached an agreement in late September to end a strike between the two sides. The walkouts had supercharged other labor action across America, from strikes enveloping the United Auto Workers union and hospitality employees in Las Vegas, to ones that were averted beforehand, like UPS vs. the Teamsters. Major studios like Netflix (NFLX), NBCUniversal (CMCSA) and Paramount (PARA) were all part of the latest drama that postponed many a production, but that wasn't all, as Hollywood took over earnings season this week.

Despite some nervousness surrounding the direction of the Mouse House, shares of Disney (DIS) climbed 4% AH on Wednesday after revealing aggressive cost-cutting and stronger-than-expected growth in streaming subscriptions. Profits were also seen at ESPN+, but a decrease in ad revenue continued to prompt speculation that Disney could finally sell its TV assets. The advertising meltdown was even more apparent at Warner Bros. Discovery (WBD) as the stock plunged 19% amid debt warnings and comments from CEO David Zaslav that the industry is going through a "generational disruption." Even the box office blockbuster Barbie - which was released during the quarter - couldn't come to the rescue, though fresh movie titles did help move some other stocks.

Coming soon: Shares of Nintendo (OTCPK:NTDOY) got a boost after the company revealed that a live-action adaptation of its popular Zelda franchise was in the works. The film would follow up on the success of The Super Mario Bros. Movie, which has generated more than $1B in sales. The Japanese entertainment giant even hiked its full-year forecast due to its foray into showbiz, with hopes that popular characters like Zelda on the big screen can drive more users to gaming and its console the Switch. (8 comments)

New relationship?

U.S.-China ties will be in focus as Treasury Secretary Janet Yellen hosts Chinese Vice Premier He Lifeng today and tomorrow to discuss topics including U.S. concerns about Beijing's trade practices. Yellen has repeatedly insisted that the U.S. is seeking healthy economic competition, which requires a level playing field for American firms, while Chinese counterpart Han Zheng has recently indicated that ties were improving. Yellen's meeting comes ahead of the much-awaited summit between President Biden and Xi Jinping next week. Will the meetings lead to decoupling, derisking, or a new U.S.-China economic relationship?

Wegovy rival

The FDA has cleared Eli Lilly’s (LLY) GLP-1 receptor agonist Zepbound (tirzepatide) as a weight loss treatment, meaning Novo Nordisk’s (NVO) Wegovy will finally get a formidable challenger in the U.S. obesity drug market. Tirzepatide was previously available as the highly successful Mounjaro to treat Type 2 diabetes. Investing Group Leader Dividend Sensei sees a big crash after Mounjaro-mania sent Lilly's stock to the moon, with a potential downside of 60%. The popularity of weight loss drugs is growing quickly, with analysts expecting them to hit consumer industries including food and beverages, though others have downplayed these fears. (29 comments)

Self-driving recall

General Motors' (GM) self-driving unit Cruise is recalling 950 driverless cars across the U.S. and may file additional recalls, soon after its decision to temporarily halt production of its autonomous Cruise Origin vehicle. The recalls are being done to update the collision detection subsystem of the Cruise Automated Driving Systems software, which caused a collision with a woman in San Francisco, who was then dragged for about 20 feet. The software wrongly characterized it as a lateral collision and directed the robotaxi "to attempt to pull over out of traffic, pulling the individual forward." Soon after the incident, California suspended Cruise's permits in the state, eventually prompting the company to pause all operations.

Today's Markets

In Asia, Japan +1.5%. Hong Kong -0.3%. China flat. India -0.2%.
In Europe, at midday, London +0.3%. Paris +0.7%. Frankfurt +0.4%.
Futures at 7:00, Dow +0.1%. S&P +0.1%. Nasdaq -0.1%. Crude +0.5% to $75.72. Gold -0.3% to $1,952.60. Bitcoin +4.2% to $36,818.
Ten-year Treasury Yield +1 bp to 4.53%.

Today's Economic Calendar

8:30 Initial Jobless Claims
9:30 Fed's Bostic's Speech
10:30 EIA Natural Gas Inventory
11:00 Fed's Barkin: "Outlook for the U.S. Economy and Fed Policy"
12:00 PM Fed's Kathleen: U.S. Economy and Monetary Policy
1:00 PM Results of $24B, 30-Year Bond Auction
2:00 PM Jerome Powell's Speech
4:30 PM Fed Balance Sheet

Companies reporting earnings today »

What else is happening...

ArcelorMittal (MT) may be lead bidder for U.S. Steel (X).

Macro uncertainty: Arm (ARM) drops in first results after IPO.

Roblox (RBLX) surges on beat; will give outlook next year.

Weekly mortgage applications rise as interest rates fall.

U.S. Household Debt Defaults At 'Millennial' Highs.

Twilio (TWLO) soars as Q3 results, guidance top expectations.

Robinhood drops as muted trading activity weighs on results.

Amazon (AMZN) offers One Medical benefit for Prime members.

Plug Power (PLUG) Q3 preview: Eyes on near-term profitability.

Morgan Stanley (MS) wealth management unit under Fed probe.

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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