Reads of The Morning


Todays Open Interest Change




The next big tech battle is in the making after Montana Gov. Greg Gianforte signed a bill that would ban TikTok, the popular short video app used by 150M Americans. It's the country's first bill that outright bans TikTok for private citizens, and is set to go into effect in January 2024 - barring an injunction or defeat in the legal system. Proponents of the measure claim it will protect users against "Chinese Communist Party surveillance" and from pro-Beijing misinformation reaching the public, with TikTok being owned by China-based ByteDance (BDNCE).

How it'll work: The law will prohibit downloads of TikTok in the state by fining any "entity" - namely the app stores of Apple (AAPL) and Google (GOOGGOOGL), or TikTok itself. $10,000 would be leveled per day for each time someone "is offered the ability" to access or download the app, though individual TikTok users would not be punished. It's unclear what would happen to Montanans who downloaded the app before the start of the statewide ban, or how authorities would outlaw usage through virtual private networks.

"Gianforte signed a bill that infringes on the First Amendment rights of the people of Montana by unlawfully banning TikTok," a TikTok spokeswoman said in a statement. "The bill's constitutionality will be decided by the courts."

Former President Donald Trump already sought to ban TikTok and force a sale of its U.S. business to an American company, and while a transaction with Oracle (ORCL) almost went through in 2020, the lawsuits piled up and an injunction was granted to prevent the app from being outlawed. The Biden administration later revoked the planned ban, ordering a national security review in its place, but Chinese tensions and data privacy concerns eventually swept both sides of the aisle and recently led to a notable House hearing. However, Congress has passed a bill to outlaw the app on federal devices, as well as a probe from CFIUS and even proposed legislation to ban the app in the U.S. (note that all American social media networks are blocked in China).

Go deeper: Many SA analysts have previously commented on how restrictions on TikTok could impact rivals like Instagram Reels (META), YouTube Shorts (GOOGGOOGL) and Snapchat Spotlight (SNAP). "This ban, if it materializes, is more about tomorrow than today for the likes of Meta Platforms," wrote Tradevestor, in an article entitled, What A TikTok Ban Could Mean. Others, like Bluesea Research, explore what competition or a ban would mean for Google (see Global Trends Provide A Massive Tailwind), as well as Julian Lin, Investing Group author of Best Of Breed Growth Stocks, on what effects recent developments are having on Snap (read Risks Are Rising But Stock Is Cheap). (8 comments)

Debt ceiling optimism

Stocks are looking to extend gains today following the risk-on move in the previous session. "We didn’t actually get much in the way of concrete developments, but negotiations [on the debt limit] are continuing, and the mood was lifted by the fact that all the major players reiterated they want to avoid a default," Deutsche Bank's Jim Reid wrote in a note. Elsewhere, the equity team at Jefferies updated its Franchise Picks list: the Buy-rated stocks where its analysts have the most conviction. Amgen (AMGN), Lowe’s (LOW) and Exact Sciences (EXAS) are new entrants in the list of 21 picks, which include price targets and how they’ve done against the S&P 500 (SP500) since their selection. (185 comments)

Fraudulent data

On the economic front, weekly jobless claims numbers will hit before the opening bell. The consensus is for a drop to 254K, but there are big concerns about the reliability of the numbers given a large amount of local fraud. National claims for first-time unemployment benefits rose above 260K last week, rising steadily after coming in below 200K for the last three weeks of March. Today's consensus is for a drop to 254K, but things are looking shady with bogus figures out of Massachusetts causing total weekly claims to be possibly overstated by as much as 20K. (8 comments)

Epstein ties

Deutsche Bank (NYSE:DB) has agreed to pay $75M to settle a lawsuit brought by abuse victims of the late financier Jeffrey Epstein. The suit alleged the bank knew it would "earn millions of dollars from facilitating his sex trafficking" and follows a similar $150M fine imposed on the lender in 2020. Deutsche first took on Epstein as a client in August 2013 after JPMorgan (NYSE:JPM) dropped him amid concerns about his sexual misconduct. However, the latter still kept Epstein as a client following his guilty plea of soliciting prostitution from a minor in 2008. As a result, JPMorgan faces two outstanding lawsuits, with CEO Jamie Dimon set to be deposed in the case later this month, though the bank has pinned blame on former executive Jes Staley. (5 comments)

Today's Markets

In Asia, Japan +1.6%. Hong Kong +0.9%. China +0.4%. India -0.2%.
In Europe, at midday, London +0.5%. Paris +0.9%. Frankfurt +1.7%.
Futures at 6:30, Dow +0.2%. S&P +0.3%. Nasdaq +0.2%. Crude +0.2% to $72.96. Gold -0.3% to $1978.30. Bitcoin +2.4% to $27,361.
Ten-year Treasury Yield +2 bps to 3.60%

Today's Economic Calendar

8:30 Initial Jobless Claims
8:30 Philly Fed Business Outlook
10:00 Existing Home Sales
10:00 E-Commerce Retail Sales
10:00 Leading Indicators
10:30 EIA Natural Gas Inventory
4:30 PM Fed Balance Sheet

Companies reporting earnings today »

What else is happening...

Analysts advise that Target (TGT) earnings were better than feared.

Theranos (THERA) founder Elizabeth Holmes prepares for prison sentence.

Cisco (CSCO) slips despite strong Q3 results, guidance boost.

Report: PayPal (PYPL) is looking for buyers for Xoom.

Amazon Web Services (AMZN) details mega investment in India.

Copper producers watch as Chilean lawmakers pass mining royalty reform.

Under downward pressure, Charles Schwab (SCHWtaps credit markets.

Regional bank stocks buck the trend after positive deposit update.

This movie studio could become the next activist target.

Big jump for Take-Two (TTWO) after easy quarterly bookings beat.

M&A? Snowflake (SNOW) may be looking to acquire search startup Neeva.

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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