Morning Reads

Morning Reads

Open Interest Changes



Industrial action is returning to the fore after historic strikes in 2023 that threatened to upend large swathes of the economy. Among those involved were the pilot associations at major airlines like American (AAL) and Southwest (LUV), the Teamsters Union at UPS (UPS), Workers United at Starbucks (SBUX), and the International Association of Machinists and Aerospace Workers at Spirit AeroSystems (SPR). Don't forget the damaging walkouts that plagued Hollywood - with both writers and actors conducting a historic double strike - as well as the unrest at the United Auto Workers union, which saw staff at Ford (F), General Motors (GM) and Stellantis (STLAjoin the picket lines.

Up next: Things are getting hoppy at Anheuser-Busch InBev (BUD), with more than a quarter of its U.S. workforce, or 5,000 employees, threatening to walk off the job at 12 breweries across the country. "Without a contract by February 29, there won't be any beer come March," warned the Teamsters union, which is fighting for substantial wage increases, job security and other benefits. It was only a week ago that 400 Teamsters members went on strike at a Molson Coors (TAP) brewery in Fort Worth, Texas, meaning workers could soon walk out at two of the nation's largest beermakers.

AB InBev is being extra mindful due to the long recovery that followed the Dylan Mulvaney controversy last April. The marketing campaign involving the transgender influencer prompted a backlash and boycott that led to Modelo Especial supplanting Bud Light's top spot in the U.S. beer market, and BUD's stock price has only recently returned to its previous levels. While securing a contract with organized labor remains a top priority, Anheuser-Busch has outlined a continuity plan and precautionary measures that could see beermaking outsourced to other facilities if necessary.

Thought bubble: Conditions are ripe for discontent, as wages in many industries have not kept up with the pace of inflation and the rising cost of living. At the same time, record sales and profits have been seen at the biggest of brewers. That's prompted both AB InBev (BUD) and Coors (TAP) to announce billion-dollar stock buybacks to please Wall Street, though the announcements have only made more employees feel left out of their fair share. Forcing companies to the bargaining table last year also resulted in strong deals with better working terms and conditions, especially when backed by a U.S. administration that calls itself the "most pro-union in American history."

Slamming the brakes

Apple (AAPL) has reportedly canceled work on its electric vehicle initiative - Project Titan - and shifted some of the employees to work on generative artificial intelligence. It comes amid rising costs and competition that has worried many automakers, as detailed in Wall Street Breakfast: Winning The Race. Apple had spent billions of dollars on Project Titan, something that CEO Tim Cook once called "the Mother of all AI projects." The iCar was initially rumored to be fully autonomous, but eventually downshifted dramatically to Level 2+ from Level 4, which SA analyst Arne Verheyde said was a massive setback given the "already highly saturated market." (223 comments)

Wider war?

As Russia's invasion of Ukraine enters the third year, European Commission President Ursula von der Leyen said the region should prepare for the risks of a wider war and consider using windfall profits from frozen Russian assets to buy weapons for Ukraine. "We need to move fast," she warned, while U.S. Treasury Secretary Janet Yellen called on the G7 coalition to unlock $285B in frozen Russian assets to support Kyiv. Elsewhere, Germany asserted that European countries would not send troops to Ukraine after French President Emmanuel Macron previously said the option had not been "ruled out." In response, Kremlin spokesman Dmitry Peskov warned that sending troops would lead to a direct confrontation. (2 comments)

Shorts get torched

Beyond Meat (BYND) ripped 73.5% higher AH on Wednesday after reporting better-than-expected Q4 earnings, as strong international sales more than made up for weak U.S. demand. CEO Ethan Brown noted that in 2024, the firm plans to "steeply reduce" operating costs and cash use, while employing pricing actions and right-sizing of its production footprint to support margin expansion. The plan also includes "a core platform renovation in Beyond IV," and certain non-cash charges related to inventory and assets that are no longer consistent with its path to profitability. While BYND traded in double digits for the first time this year, short interest on the stock was close to 40%, which likely contributed to the big swing. (57 comments)

Today's Markets

In Asia, Japan -0.1%. Hong Kong -1.5%. China -1.9%. India -1.1%.
In Europe, at midday, London -0.7%. Paris -0.1%. Frankfurt +0.2%.
Futures at 7:00, Dow -0.3%. S&P -0.3%. Nasdaq -0.4%. Crude -1.2% to $77.96. Gold -0.4% to $2,036.60. Bitcoin +4.2% to $58,966.
Ten-year Treasury Yield -3 bps to 4.29%.

Today's Economic Calendar

7:00 MBA Mortgage Applications
8:30 GDP
8:30 International Trade in Goods (Advance)
8:30 Retail Inventories (Advance)
8:30 Wholesale Inventories (Advance)
10:30 EIA Petroleum Inventories
11:00 Survey of Business Uncertainty
12:00 PM Fed's Bostic Speech
12:15 PM Fed’s Collins Speech
12:45 PM Fed's Williams Speech

Companies reporting earnings today »

What else is happening...

Bitcoin (BTC-USD) soars to two-year high as halving event looms.

UnitedHealth (UNH) falls on report of DOJ launching antitrust review.

Meet the new Macy's (M): Fewer stores and increased focus on luxury.

Senator Elizabeth Warren says it's time to break up corporate giants.

DIY demand slowdown? Latest outlook from Lowe's (LOWdisappoints.

OpenAI asks judge to dismiss parts of NYT lawsuit over alleged 'hack.'

JetBlue (JBLU), Spirit (SAVE) flip the script on competition argument.

First Solar (FSLR) surges after-hours on earnings beat, upbeat outlook.

eBay (EBAY) tops revenue and gross merchandise value expectations.

Report: WBD (WBD) is halting merger talks with Paramount (PARA).

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)