Morning Reads

Morning Reads




China has responded to the new U.S. House bill passed against TikTok, and it doesn't look like it's going to make the U.S.-Sino relationship any better. While the measure still has to wind its way through the Senate, it would essentially ban the platform for all Americans unless TikTok's operations were divested from Chinese parent firm ByteDance (BDNCE). The formal name of the bill, titled the "Protecting Americans from Foreign Adversary Controlled Applications Act," also likely riled Beijing, which was quick to lay out its position and accuse Washington of "resorting to acts of bullying."

Quote: "Though the U.S. has never found any evidence of TikTok posing a threat to U.S. national security, it has never stopped going after TikTok," said Wang Wenbin, spokesman for China's Ministry of Foreign Affairs. "Such practice of resorting to hegemonic moves when one could not succeed in fair competition disrupts the normal operation of businesses, undermines the confidence of international investors in the investment environment, and sabotages the normal economic and trade order in the world. This will inevitably come back to backfire on the United States itself."

Speaking of fair competition, Beijing does not allow any U.S. social media companies to operate in China, though there appears to be something bigger here at play. It revolves around the significant policy shift in how to deal with China and the evaluation of what capabilities should be ascribed to the CCP. What started as a crusade against intellectual property theft and unfair trade practices has morphed into accusations of mass surveillance and the ability to influence an entire generation of American youth. That doesn't mean the threat isn't real or isn't happening, especially given the danger of a new global order, but one thing seems certain: there will be tradeoffs of American liberties in exchange for a dramatic expansion of state power.

Investing angle: This new bipartisan view is already spilling over into the free market and broader economy. It's mixed with a heavy dose of protectionism and isolationism, and is likely to be the mainstay of American policy for the foreseeable future. China "does not want the U.S. to have its own domestic [solar] industry... it's a pretty dire situation," First Solar (FSLR) CEO Mark Widmar declared on Wednesday, a day after warning a Senate committee that the U.S. risks becoming "a de facto extension of China's Belt and Road Initiative." Other recent examples include comments from Elon Musk that Chinese carmakers will "demolish most other car companies in the world" barring legislative or executive action, as well as similar sentiment in other sectors spanning shipbuilding to semiconductors. (7 comments)

EV winter

It looks like the electric vehicle euphoria is losing steam, as automakers scale back EV plans and slash prices to compete in the saturated market. Sparked by a Wells Fargo call that turned bearish, Tesla (TSLA) slid 4.5% on Wednesday, making it the S&P 500's (SP500worst performing stock in 2024. "After years of peak spending on EVs and autonomous vehicles, auto manufacturers are pivoting to capital efficiency and return," Morgan Stanley added, noting that makers of gas-powered cars are poised to deliver shareholder gains. Elsewhere, troubled EV maker Fisker (FSR) is planning to file for bankruptcy, just weeks after issuing a "going concern" warning. (96 comments)


Dollar Tree (DLTR) tumbled 14.2% on Wednesday after the discount retailer's Q4 results came in below expectations and its guidance was viewed as lackluster. High inflation and less spending didn't help the situation. The company also plans to close around 600 Family Dollar stores in the first half of 2024, with another 370 Family Dollar and 30 Dollar Tree stores to be closed over the next several years. "Family Dollar is a victim of the macro environment out there," CEO Rick Dreiling said on the earnings call, calling out additional headwinds like "elevated shrink" and "reduced SNAP benefits." (11 comments)

Coming around

"Harvest Moon" is returning to Spotify (SPOT), more than two years after Neil Young removed his entire catalog from the music streaming service in protest of a Joe Rogan podcast that featured mRNA virologist Dr. Robert Malone. "My decision comes as Apple (AAPL) and Amazon (AMZN) have started serving the same disinformation podcast features I'd opposed at Spotify," Young noted on his website. "I cannot just leave Apple and Amazon, like I did Spotify, because my music would have very little streaming outlet to music lovers at all." The Joe Rogan Experience is currently Spotify's top podcast, and recently secured a $250M multi-year deal with the platform. (15 comments)

Today's Markets

In Asia, Japan +0.3%. Hong Kong -0.7%. China -0.2%. India +0.5%.
In Europe, at midday, London flat. Paris +0.9%. Frankfurt +0.2%.
Futures at 7:00, Dow +0.3%. S&P +0.3%. Nasdaq +0.4%. Crude +0.8% to $80.37. Gold -0.3% to $2,175. Bitcoin -0.6% to $72,905.
Ten-year Treasury Yield unchanged at 4.19%.

Today's Economic Calendar

8:30 Initial Jobless Claims
8:30 Producer Price Index
8:30 Retail Sales
10:00 Business Inventories
10:30 EIA Natural Gas Inventory
4:30 PM Fed Balance Sheet

Companies reporting earnings today »

What else is happening...

EU lawmakers greenlight first-ever global AI regulation.

Bayer weighs 'Texas Two-Step' bankruptcy for Roundup.

'Pay for their coke': Palantir (PLTR) CEO blasts short sellers.

Musk sours on Don Lemon's new show on X, cancels partnership.

Under Armour (UAA) founder Kevin Plank to return as brand's CEO.

U.S. Steel (X) sinks amid new concerns over Nippon Steel takeover.

Grayscale files to spin off mini bitcoin (BTC-USD) trust ETF from GBTC.

GE HealthCare (GEHC) marks worst drop in 2024 as GE (GEcuts stake.

Altria (MO) to sell part of AB InBev (BUD) holdings via secondary offering.

'As irrelevant as it is false:' NY Times (NYT) denies OpenAI's hacking claim.

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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