Morning Reads

Morning Reads

Open Interest Changes




The app store duopoly of Google (GOOGGOOGL) and Apple (AAPL) may be in trouble as a recent legal ruling could force them to open up their app stores’ closed ecosystems. Epic Games, which makes the popular video game Fortnite, has won its high-profile antitrust case against Google after a jury found that the search giant's Play app store is operating as an illegal monopoly.

The verdict: The jury found that Google had monopolized the Android app distribution and payments market by charging app developers high fees of up to 30% and striking side deals with rivals to fend off competition. The court will now decide if Google should allow payment for and distribution of apps outside the Play Store. "The verdict is a win for all app developers and consumers," said Epic, reiterating that regulations are needed to "address Apple and Google strangleholds over smartphones." Google intends to appeal the verdict, saying it would "continue to defend the Android business model."

Bigger picture: Epic's legal victory threatens the billions of dollars of revenue that Google earns through its app store. If the jury's verdict is upheld, developers could have more power over the distribution of and profits from their apps. The win is also important in light of Epic's loss last year against Apple in a similar antitrust case, in which a judge ruled that there was not enough evidence of the iPhone maker having unlawful monopoly power. However, it was determined that Apple should allow apps to provide other payment option links.

Other legal woes: Google is already facing a landmark antitrust case from the Department of Justice over its alleged monopolistic practices in the search business, which has left Barclays increasingly concerned. SA analyst Paul Franke previously warned that the antitrust lawsuits won't necessarily end the Google/Alphabet saga for bullish investors. "My view is the stock could take a breather at the end of this year and all of next, as investors digest what I believe will be bad news on the legal front," he warned. (8 comments)

Weight regain

Eli Lilly (LLY) shares dipped on Monday after a study indicated that patients who were taking the obesity drug tirzepatide regained weight after discontinuing the therapy. The study sponsored by Lilly showed that the drug - marketed as Zepbound - led to a 20.9% mean weight loss over 36 weeks. But those who switched to a placebo immediately afterward saw a 14% weight gain over 52 weeks. A study funded by Lilly's rival Novo Nordisk (NVO) also showed that patients on the weight loss drug semaglutide regained two-thirds of their lost body weight a year after discontinuation. GlobalData recently forecast that Zepbound sales could reach $4.1B by 2031 in the U.S. (75 comments)

Inflation watch

The highly-anticipated Consumer Price Inflation report is due today, with economists widely expecting retail inflation in November to remain unchanged from the prior month. Core CPI, which excludes food and energy, likely rose 0.3% sequentially. "The upcoming CPI report may show zero inflation or even deflation, influenced by global energy prices and supply glut," said Investing Group Leader Chris Lau. While inflation is steadily declining, the Fed has been wary of declaring victory in its fight to rein in inflation. As the FOMC meeting kicks off today, every bit of data counts. "Unless CPI is much worse than expected, we don't expect financial conditions to change much," said 22V Research's Dennis DeBusschere. (7 comments)

New draft

The agreement drafted at the United Nations' COP28 summit hit a roadblock after opposition from some countries as it didn't include strong enough wording on phasing out fossil fuels. A new draft is expected on Tuesday. The draft instead suggested other steps to cut greenhouse gas emissions. Many countries sought stronger wording instead of just guidelines for reducing fossil fuels' consumption and production, including the U.S., but Saudi Arabia and other OPEC+ members have opposed this. The draft's "weak language on fossil fuels is completely insufficient," said the Alliance of Small Island States, a group of countries vulnerable to climate change. (2 comments)

Today's Markets

In Asia, Japan +0.2%. Hong Kong +1.1%. China +0.4%. India -0.5%.
In Europe, at midday, London +0.4%. Paris flat. Frankfurt -0.2%.
Futures at 7:00, Dow +0.1%. S&P flat. Nasdaq +0.1%. Crude -0.3% to $71.12. Gold +0.5% at $2,002.80. Bitcoin -1.8% to $41,572.
Ten-year Treasury Yield -5 bps to 4.19%.

Today's Economic Calendar

FOMC meeting begins
6:00 NFIB Small Business Optimism Index
8:30 Consumer Price Index
10:00 Quarterly Services Report
1:00 PM Results of $21B, 30-Year Bond Auction
2:00 PM Treasury Statement

Companies reporting earnings today »

What else is happening...

WSB survey results: The economy will likely decelerate in 2024.

Walgreens Boots (WBA) slips as Moody’s cuts rating to junk.

Warren Buffett's Berkshire (BRK.Bhalves stake in HP (HPQ).

Occidental signs $12B deal to buy Permian producer CrownRock.

Nokia (NOK) trims profit margin target after losing AT&T (T) contract.

Star Bulk (SBLK) to buy Eagle Bulk (EGLE) to create $2.1B shipowner.

BlackBerry (BB) appoints CEO, scraps IPO plans of IoT business.

Raimondo: Nvidia (NVDA) 'can, will and should' sell chips to China.

Oracle (ORCL) stock slides on revenue miss, outlook disappoints.

Hasbro (HAS) to lay off 900 'incremental' roles as it cuts expenses.

VanEck: Bitcoin (BTC-USD) will reach an all-time high in Q4 2024.

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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