Morning Reads

Morning Reads

Open Interest Changes



There are many factors in setting drug policy, which often center around the benefits or detriments to a society and its economy. On one side stands regulation that can create new tax revenues, expand jobs, limit criminal behavior, and reduce costs related to enforcement. On the other side, arguments have been made for protections against addictive and dangerous substances, maintaining public order, and the adverse effects on mental health and innocent lives. Interestingly, many countries and regions are backpedaling on their recent decisions, which can have major impacts and effects on corporate bottom lines.

Smoking: New Zealand this week reversed a ban on tobacco sales to younger generations that was due to go into effect in July. The government repealed a law passed under former Prime Minister Jacinda Ardern's administration that would have banned people who were born after Jan. 1, 2009, from buying cigarettes for their entire lives. Health department officials said the coalition government was committed to reducing smoking, but planned on using different strategies instead of mandating the world's first smoke-free society. See related tobacco stocks here.

Weed: Thailand just announced that it would ban the use of recreational cannabis by the end of this year, citing the "negative impacts of misuse" and risks of "leading to other drugs in the long run." It's a big reversal for the first Asian nation that decriminalized pot, especially on a continent where many countries impose long prison terms or even death sentences for cannabis possession or trafficking. Around 20,000 Thai pot shops sprung up in recent years, in an industry that had been forecast to be worth up to $1.2B by 2025. Check out publicly traded marijuana firms.

Hard drugs: Over three years after the first U.S. state decriminalized things like heroin, meth, cocaine and psychedelics, Oregon is getting some second thoughts. Governor Tina Kotek has declared a fentanyl state of emergency, while lawmakers are in the middle of repealing Measure 110, with opioid overdoses tripling since 2020. Currently, penalties are limited to citations with a maximum $100 fine, but the infractions could be avoided if a user attends a treatment screening or calls a hotline for addiction services. Discover some psychedelic industry players.

Record territory

U.S. stocks ended higher on Thursday after a late-session push, helping the Nasdaq (COMP.IND) post a new record close more than two years since its previous milestone. Market participants were undeterred by the hotter PCE inflation data - the Fed's preferred inflation gauge - which met expectations and showed little progress in the central bank's fight to push inflation down to its 2% goal. Seasonality also played a factor in the January numbers. "Cooling incomes and spending suggest inflation will moderate again in the coming months, leaving the door open to a June rate cut," wrote ING Economic and Financial Analysis. (44 comments)

Security risks

In a move that can lead to curbs on auto parts, President Biden has directed Commerce Secretary Gina Raimondo to investigate connected vehicles amid national security risks. He warned that such vehicles from China could collect sensitive data about U.S. citizens and infrastructure, as they can be remotely accessed. The probe would be Washington's latest move to protect U.S. manufacturing against Chinese cyberattacks, following an executive order on maritime cybersecurity. Experts have raised alarm bells on China's hacking capabilities, while Tesla's (TSLA) Elon Musk previously said Chinese carmakers will "demolish" foreign rivals if there are no trade barriers. (9 comments)

Regional concerns

New York Community Bancorp (NYCB) tumbled 21.7% AH on Thursday after delaying its 10-K filing. Material weaknesses were identified in internal accounting protocols, stemming from ineffective oversight, risk assessment and monitoring activities. NYCB also disclosed a $2.4B hit to Q4 and 2023 earnings, as well as immediate leadership changes. The bank's shares have fallen 53% so far this year, triggered by its slashed dividend and huge provision for loan losses, but Investing Group Leader The Value Portfolio believes the odds of a bank run are low, given NYCB's profitability and high insured deposits. (124 comments)

Today's Markets

In Asia, Japan +1.9%. Hong Kong +0.5%. China +0.4%. India +1.7%.
In Europe, at midday, London +0.7%. Paris flat. Frankfurt +0.6%.
Futures at 7:00, Dow -0.1%. S&P -0.1%. Nasdaq flat. Crude +1.6% to $79.53. Gold +0.5% to $2,064.10. Bitcoin -1.7% to $61,971.
Ten-year Treasury Yield -3 bps to 4.23%.

Today's Economic Calendar

8:30 Fed's Barkin Speech
9:45 PMI Manufacturing Index
10:00 ISM Manufacturing Index
10:00 Construction Spending
10:00 Consumer Sentiment
10:15 Fed's Waller and Logan: "2024 report, Quantitative Tightening around the Globe: What Have We Learned?"
12:15 PM Fed's Bostic: Economic Outlook
1:00 PM Baker Hughes Rig Count
1:30 PM Fed's Daly: "AI and the Labor Market"
3:30 PM Fed's Kugler: "Pursuing the Dual Mandate"

Companies reporting earnings today »

What else is happening...

Dell (DELL) soars as strong AI server demand aids results.

Fisker (FSR) in free-fall after flagging going concern doubts.

Regulatory drag: Value of General Motors' (GM) Cruise cut in half.

Vanguard CEO and chairman Tim Buckley to retire by end of year.

Meta (META) to do away with Facebook News in U.S. and Australia.

Zuckerberg looks to Samsung (OTCPK:SSNLF) to diversify Asia risk.

SoundHound AI (SOUN) slides as Q4 results miss expectations.

Kodak (KODK) surges as it mulls unlocking pension fund surplus.

Trump Media, DWAC (DWAC) merger at risk as co-founders sue.

AI robotics startup confirms $675M funding from Bezos, Nvidia, others.

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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