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Resilient consumers have not only helped the American economy rebound with a vengeance, but they've also shaped the winners and losers of the sprawling U.S. logistics industry. New internal data from Amazon (AMZN) reportedly shows the e-commerce behemoth set to take hold of the annual delivery crown for the first time, shipping a total of 4.8B packages in the U.S. before Black Friday and Cyber Monday, and predicting it will deliver about 5.9B by the end of 2023. Its closest rival UPS (UPS) only handled around 3.4B parcels domestically in the first nine months of the year, and said its volume in 2023 is unlikely to exceed last year's 5.3B. FedEx's (FDX) domestic parcel volume is even further behind, and both companies even include packages they hand off to the U.S. Postal Service for final delivery.

Flashback: It wasn't long ago that logistics leaders thought the idea of a serious Amazon competitor was a pipe dream. In 2016, FedEx CEO Fred Smith even called such an idea "fantastical," saying concerns about industry disruption were overblown. "In all likelihood, the primary deliverers of e-commerce shipments for the foreseeable future will be UPS, the U.S. Postal Service and FedEx," he declared in a conference call with analysts.

Three years later, in 2019, FedEx and Amazon went through a very public divorce as the latter continued to scale its business and invest in its own delivery service. Amazon still works with UPS, but it only constitutes a minority of its operations, or about 11% of revenue. Helping Amazon take the lead were a number of innovations including flex drivers, same-day delivery centers, warehouse robots, and more recently, AI. Walmart (WMT) and Target (TGT) are also speeding up deliveries by fulfilling orders closer to customers, but with its store-less format, Amazon has been nimble and remains the clear industry leader.

Outlook: While Amazon (AMZN) has shown its power in residential delivery, its core strength is anchored in one-way operations and its existing network. That may already be changing as it expands its global reach and leverages other providers to deliver the same level of service or things like pick-up returns. "Earlier fears of big cancellation in Prime membership due to price hikes have been proved wrong," SA analyst Bluesea Research noted in Amazon: Fear Of Saturated Market Is Overhyped. "Amazon's subscription business is showing steady growth and the launch of new services also increases the growth runway for the subscription business."

Forever chemicals

In a major victory for 3M (MMM), DuPont (DD), Corteva (CTVA) and Chemours (CC), a federal appeals court has vacated a lower court's ruling that would've allowed nearly 12M Ohio residents to sue the companies as a group in a class action lawsuit. The court ruled the lead plaintiff had filed too broad a complaint, and hadn't shown that toxic "forever chemicals" - called PFAS - found in his body could be traced directly to the companies. Recall that DuPont, Chemours and Corteva previously reached a $1.18B deal to resolve complaints of polluting public water systems with PFAS, while 3M agreed to pay up to $10.3B over 13 years. (14 comments)

IPO chatter

Fast-fashion giant Shein has confidentially filed for a U.S. IPO, targeting a valuation of $80B-$90B, which would make it the biggest U.S. listing by a Chinese-founded company. Shein has steadily grown to become the world’s largest fashion retailer, thanks to its "real-time retail" business model, under which suppliers have three days to produce new designs or risk being cut off. However, Shein has come under fire for alleged worker exploitation, which could bar its IPO if found to be true. "For the time being, investors should continue to collect information about this promising - but potentially complicated - listing," cautioned SA analyst Luckbox Magazine. Meanwhile, the market is abuzz with reports of other potential IPOs, including Kim Kardashian's shapewear brand Skims and social media firm Reddit.

OPEC drama

Crude prices have now fallen for five straight weeks - marking oil's longest weekly losing streak since 2021 - but that could change as traders weigh the odds of further production cuts by OPEC+ at the group's meeting on Thursday. Saudi Arabia reportedly asked OPEC+ members to reduce their oil production quotas in a bid to boost global markets, but some members have resisted. The Saudis, who have been making largely unilateral 1M bbl/day supply cuts since July, are now seeking further support from the cartel and its partners. Investing Group Leader HFIR expects OPEC+ to announce a coordinated cut, saying it's needed to aid sentiment amid weakening demand. (8 comments)

Today's Markets

In Asia, Japan -0.1%. Hong Kong -1%. China +0.2%. India +0.3%.
In Europe, at midday, London -0.4%. Paris -0.6%. Frankfurt -0.2%.
Futures at 7:00, Dow flat. S&P -0.1%. Nasdaq -0.1%. Crude +1% to $75.60. Gold +0.2% to $2,015.70. Bitcoin +0.6% to $37,260.
Ten-year Treasury Yield +2 bps to 4.41%.

Today's Economic Calendar

9:00 Case-Shiller Home Price Index
9:00 FHFA House Price Index
10:00 Consumer Confidence
10:00 Richmond Fed Mfg. Index
10:00 Fed’s Goolsbee: "Who Owns Midwest Farmland? And Why?"
10:05 Fed’s Waller: U.S. Economic Outlook
10:45 Fed’s Bowman: "Monetary Policy and the Economy"
1:00 PM Money Supply
1:00 PM Results of $55B, 7-Year Note Auction
1:05 PM Fed’s Barr: "Modernized Community Reinvestment Act and Indian Country"
3:30 PM Fed’s Barr's Speech

Companies reporting earnings today »

What else is happening...

WSB survey results: Climate trends not such an investment factor.

iRobot (IRBT) plunges amid EU warning on $1.4B sale to Amazon.

President Biden to use 1950 law to boost essential drug production.

Tesla (TSLA) sues Swedish government agency over strike impact.

Shopify’s record Black Friday may push up midsize online retailers.

YPF (YPF) soars as Argentina president-elect picks a new boss.

Divesting Bayer's consumer health unit would cause huge tax bill.

Albemarle (ALB), other lithium stocks extend losses on weak pricing.

Broadcom (AVGO) lets go of VMware employees after closing deal.

Morgan Stanley lists most under-owned large-cap tech stocks.

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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