Morning Reads

Morning Reads

Open Interest

Futures

PREMIUM

This Morning

S&P 500 futures are down 13 points and are trading 0.4% below fair value. The Nasdaq 100 futures are down 63 points and are trading 0.6% below fair value. The Dow Jones Industrial Average futures are down 61 points and are trading 0.2% below fair value.

General concerns about slowing growth, rate hikes, and inflation are fueling carryover negativity from recent sessions. Weakness this morning comes after several days of trying to stage a rebound that then gets sold into. 

Some macro headlines this morning add fuel to the existing concerns, including news that China locked down Chengdu (21.2 million population) for COVID testing. China also had a weak August Caixin Manufacturing PMI, which came in below 50.0 indicating contraction. In Europe, August Manufacturing PMI from Germany, the UK, France, Spain, and the Eurozone all showed contraction with below-50.0 readings.

Sentiment is also pressured by news that the US government will restrict sales of semiconductors to Russia and China, bringing down some semiconductor names in premarket action.

Energy complex futures are trending lower. WTI crude oil futures are down 1.4% to $88.26/bbl. Natural gas futures are down 0.4% to $9.09/mmbtu. 

In corporate news:

  • NVIDIA (NVDA 144.42, -6.52, -4.32%): US govt informs NVIDIA that it has imposed a new license requirement for sales of A100 and H100 chips to China and Russia
  • Advanced Micro (AMD 82.60, -2.27, -2.67%) : spokesperson says US told the company to stop selling artificial intelligence chip in China.
  • Signet Jewelers (SIG 68.00, +2.63, +4.02%): beats by $0.09, reports revs in-line; guides Q3 revs in-line; guides FY23 EPS above consensus, revs below consensus
  • Five Below (FIVE 132.20, +4.32, +3.38%): misses by $0.04, misses on revs; comps -5.8%; guides Q3 EPS and revs below consensus; guides FY23 EPS and revs below consensus
  • C3.ai (AI 15.35, -2.65, -14.72%): beats by $0.12, misses on revs; guides OctQ and FY23 revs below consensus, says its customers are scrutinizing big deals as never before
  • Okta (OKTA 76.69, -14.71, -16.09%): beats by $0.20, beats on revs; guides Q3 (Oct) EPS above consensus, revs in-line; guides FY23 EPS above consensus, revs in-line
  • MicroStrategy (MSTR 226.00, -5.56, -2.40%): Washington DC AG Karl Racine tweets "NEW: Today, we’re suing Michael Saylor (MSTR Executive Chairman) - a billionaire tech executive who has lived in the District for more than a decade but has never paid any DC income taxes - for tax fraud"
  • Veeva Systems (VEEV 173.26, -26.06, -13.07%): beats by $0.02, reports revs in-line; guides Q3 EPS in-line, revs below consensus; guides FY23 EPS above consensus, revs below consensus
  • MongoDB (MDB 267.10, -55.76, -17.27%):  beats by $0.05, beats on revs; guides Q3 EPS below consensus, revs above consensus; guides FY23 EPS below consensus, revs above consensus
  • Ciena (CIEN 45.09, -5.65, -11.14%): misses by $0.01, misses on revs

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Thursday on a lower note. Japan's Nikkei: -1.5%, Hong Kong's Hang Seng: -1.8%, China's Shanghai Composite: -0.5%, India's Sensex: -1.3%, South Korea's Kospi: -2.3%, Australia's ASX All Ordinaries: -2.0%.
    • In economic data:
      • China's August Caixin Manufacturing PMI 49.5 (expected 50.2; last 50.4)
      • Japan's Q2 Capital Spending 4.6% qtr/qtr (expected 3.0%; last 3.0%) and August Manufacturing PMI 51.5 (expected 51.0; last 51.0)
      • South Korea's Q2 GDP 0.7% qtr/qtr, as expected (last 0.6%); 2.9% yr/yr, as expected (last 3.0%). August trade deficit $9.47 bln (expected deficit of $8.00 bln; last deficit of $4.80 bln). August Nikkei Manufacturing PMI 47.6 (last 49.8)
      • India's August Nikkei Manufacturing PMI 56.2 (expected 55.0; last 56.4)
      • Australia's August AIG Manufacturing Index 49.3 (last 52.5) and August Manufacturing PMI 53.8 (expected 54.5; last 55.7). August Home Loans -7.0% m/m (expected -3.0%; last -3.3%). Q2 Building Capital Expenditure -2.5% m/m (last -1.7%). August Commodity Prices 21.7% yr/yr (last 14.1%)
    • In news:
      • China tightened coronavirus restrictions in Chengdu.
      • South Korea reported a record trade deficit for August.
      • Japan's Manufacturing PMI remained in expansion for the 19th month in a row but was at its lowest level in eleven months while China's Caixin Manufacturing PMI fell into contraction.
      • August casino revenue in Macau was down 50.7% yr/yr.
      • Continued weakness in the yen pressured the Japanese currency to its lowest level against the dollar since mid-1998.
  • Major European indices trade lower across the board despite the release of mostly better than expected data from the region. STOXX Europe 600: -1.6%, Germany's DAX: -1.3%, U.K.'s FTSE 100: -1.3%, France's CAC 40: -1.4%, Italy's FTSE MIB: -1.0%, Spain's IBEX 35: -0.9%.
    • In economic data:
      • Eurozone's July Unemployment Rate 6.6%, as expected (last 6.7%). August Manufacturing PMI 49.6 (expected 49.7; last 49.7)
      • Germany's July Retail Sales 1.9% m/m (expected -0.4%; last -1.5%); -2.6% yr/yr (expected -6.5%; last -9.6%). August Manufacturing PMI 49.1 (expected 49.8; last 49.3)
      • U.K.'s August Nationwide HPI 0.8% m/m (expected 0.1%; last 0.2%); 10.0% yr/yr (expected 8.9%; last 11.0%). August Manufacturing PMI 47.3 (expected 46.0; last 46.0)
      • France's August Manufacturing PMI 50.6 (expected 49.0; last 49.5)
      • Italy's July Unemployment Rate 7.9% (expected 8.1%; last 8.0%). Q2 GDP 1.1% qtr/qtr (expected 1.0%; last 0.1%); 4.7% yr/yr (expected 4.6%; last 6.2%). August Manufacturing PMI 48.0, as expected (last 48.5)
      • Spain's August Manufacturing PMI 49.9 (expected 48.5; last 48.7)
      • Swiss July Retail Sales 2.6% yr/yr (expected 0.9%; last 0.7%). August CPI 0.3% m/m (expected 0.2%; last 0.5%); 3.5% yr/yr (expected 3.4%; last 3.4%). August procure.ch PMI 56.4 (expected 56.8; last 58.0)
    • In news:
      • Germany's retail sales showed a larger than expected increase in July but were still down yr/yr.
      • European Commission President von der Leyen will reportedly outline the EU's plan for managing the energy crisis during a speech on September 14.
      • A Bank of England survey showed an increase in inflation expectations for the year ahead.


U.S. equity futures:

  • S&P 500 Futures: -13 @ 3,942
  • DJIA Futures: -79 @ 31,432
  • Nasdaq 100 Futures: -66 @ 12,207

Overseas:

  • Europe: DAX -1.3%, FTSE -1.3%, CAC -1.4%
  • Asia: Nikkei -1.5% Hang Seng -1.8%, Shanghai Composite -0.5%

Commodities:

  • Crude Oil -1.38 @ 88.17
  • Nat Gas  -0.030 @ 9.097
  • Gold -12.65 @ 1713.55
  • Silver -0.254  @ 17.628
  • Copper -0.0553 @ 3.4632


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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