Morning Reads

Morning Reads

Open Interest Changes

PREMIUM

Prepper

2023 has been a year of big changes, especially with regards to the economy and job market. Labor has remained tight despite the Fed's tightening cycle, prompting some profound changes in hiring practices and gatekeeping in HR circles. Under discussion is the value of a diploma, as well as the time and costs that come with it, and if more can be done to open up industries to the nearly 80M workers in the U.S. labor force that do not hold a college degree.

Skills-first hiring: IBM (IBM) was one of the first pioneers that moved away from bachelor's degree requirements to broaden its talent pool. Back in 2016, CEO Ginni Rometty coined the term "new-collar worker," with the aim of hiring cloud technicians, database managers, cybersecurity personnel, user interface designers, and other types of IT positions. The decision helped pave the way for people to be eligible for higher-paying corporate jobs through skills mastered outside the traditional four-year college framework, which could be combined with on-the-job training, apprenticeships, and a path towards new skills as employees settled into their roles.

By 2021, IBM had "stripped bachelor's degree requirements for more than half of its U.S. job openings," and said it would "continuously reevaluate our roles to prioritize skills over specific degrees." Other companies have followed suit, including Accenture (ACN), Bank of America (BAC), General Motors (GM), Kellogg's (K) and Okta (OKTA), as well as major airlines like American (AAL), Delta (DAL), Southwest (LUV) and United (UAL). Things have continued in 2023, with Walmart (WMT) expanding its "new-collar workforce" in September by eliminating the need for a college degree to climb its corporate ladder.

War for talent: Current labor market dynamics are very different than those that emerged in the aftermath of the financial crisis. A four-year degree requirement was then seen as a great resume filter for companies that could afford to pick and choose candidates, but since the COVID pandemic, the environment has gotten a whole lot tighter. The ongoing labor shortage might continue to see a relaxing of prior standards, particularly in growing industries such as technology, where the demand for workers with specialized skills far exceeds the supply. For others, a college education provides a right of passage, a comfortable employment hedge, or opportunities that might not have otherwise been attainable. Take the WSB survey.

Fresh highs

Spot gold prices climbed to a fresh record of $2,100 on Monday, while bitcoin (BTC-USD) breached the $40,000 level, marking the highest level since April 2022. "Continued military conflagrations in the Middle East and Eastern Europe, economic recession fears and the increasing likelihood of lower rates have converged to make gold a high-probability candidate for higher prices in the next few months," said SA analyst Clif Droke. Bitcoin's rally was also spurred by the imminent approval of applications for ETFs tracking the top crypto's price, with some betting on the SEC's nod as soon as next month. Crypto-related stocks also traded higher, including Coinbase (COIN), Marathon Digital (MARA) and Riot Platforms (RIOT). (12 comments)

Arctic leis

The airline sector is set for more consolidation, with Alaska Air (ALKagreeing to acquire Hawaiian Airlines (HA) for $18/share in cash, or about $1.9B including debt. The combination is expected to bolster the airlines' competitive position, and expand choice for consumers on the West Coast and Hawaii. Investing Group Leader Dhierin Bechai said while the deal appears fair, it is "somewhat odd" in terms of fleet compatibility. Alaska Air fell 9% before the bell on Monday, while Hawaiian Airlines' shares more than doubled. The proposed deal comes days ahead of the closing arguments in the DOJ's antitrust lawsuit against JetBlue's (JBLU) $3.8B purchase of Spirit Airlines (SAVE). (77 comments)

Pending invasion?

Raising concerns of a potential military conflict between the two countries, Venezuelan electoral authorities have claimed that 95% of voters have supported the Maduro government's effort to claim the oil-rich Essequibo region controlled by neighboring Guyana. A referendum on the issue was held on Sunday, despite the UN's top court ordering Venezuela not to take any action to change Guyana's control over the area. With Caracas reportedly preparing for a possible invasion, Guyanese President Mohamed Irfaan Ali emphasized "the rule of law to determine the outcome of this controversy." To note, Exxon Mobil (XOM), Hess (HES), and Chevron (CVX) have interests in the region, which has over 11B barrels of recoverable oil and gas. (8 comments)

Today's Markets

In Asia, Japan -0.6%. Hong Kong -1.1%. China -0.3%. India +2.1%.
In Europe, at midday, London -0.4%. Paris -0.3%. Frankfurt flat.
Futures at 7:00, Dow -0.2%. S&P -0.3%. Nasdaq -0.4%. Crude -0.4% to $73.75. Gold flat at $2,090.30. Bitcoin +5.4% to $41,610.
Ten-year Treasury Yield +3 bps to 4.25%.

Today's Economic Calendar

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

Companies reporting earnings today »

What else is happening...

U.S. makes COP28 splash with methane rule, $3B climate aid pledge.

Walmart (WMT) joins growing list of companies not advertising on X.

Boeing (BA) eliminated from Air Force contest for 'doomsday plane.'

Third round: Spotify (SPOT) to lay off 17% of workforce to curb costs.

Wall Street sees GTA 6 as a 'major catalyst' for Take-Two (TTWO).

Three commercial ships attacked by Yemeni Houthis in Red Sea.

Biotechs post record gains in November amid improving outlook.

Virgin Galactic (SPCE) drops as Branson plans no further investments.

Legalized Texas sports betting may not be such a long shot after all.

Piper sees GLP-1s increasing near-term demand for knee/hip surgeries.


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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