Thursday Morning Reads

Thursday Morning Reads





Morning Charts:

Open Interest Changes for Today:

Seeking Alpha:

The WTO has given the U.S. the go-ahead to impose tariffs on as much as $7.5B worth of European exports annually - in retaliation for illegal government aid to Airbus (OTCPK:EADSY) - and the Trump administration is wasting no time in levying them. A list has been released of hundreds of European products that will get new tariffs as early as Oct. 18, including 25% levies on French wine, Italian cheese and single-malt Scotch whisky. The main target, however, is Airbus aircraft made in the EU, which face a 10% duty that could hurt U.S. airlines like Delta (NYSE:DAL) which have billions of dollars of orders waiting to be filled.

Slight turnaround

Wall Street is looking to recover from an 800-point plunge over the last two sessions as investors track fears of an economic recession and the latest tariff ruling from the WTO. After Tuesday's dire picture on manufacturing from the ISM, investors now await today's ISM services report and tomorrow's non-farm payrolls data to confirm or quash concerns about world economic growth. Ahead of the release, U.S. stock index futures are indicating a higher open, with the Dow ahead by 88 points, and S&P 500 and Nasdaq up 0.4% and 0.5%, respectively.
Go deeper: Now is not the time to sell, says David Lerner.

Uber diversifies

Uber (NYSE:UBER) is launching a new app in Chicago on Friday that will match temporary workers looking for shift work with businesses. The new venture, called Uber Works, expands its offerings from on-demand drivers, trucking and food delivery to on-demand workers. It also comes as Uber’s mainstay business is under threat, with California passing a bill mandating the reclassification of ride-hailing drivers as employees rather than contractors.
Go deeper: 'Uber's Stock May Be Due For A Rebound' by Mott Capital Management.

Deliveries fall short

Tesla (NASDAQ:TSLA) achieved record production of 96,155 vehicles in Q3 and record deliveries of approximately 97,000 vehicles (consisting of 17,400 Model S/X cars and 79,600 Model 3s). But the figures missed some of the last estimates turned in by Wall Street analysts and could disappoint investors after Elon Musk pushed employees to get to the 100K level. Tesla's deliveries are a closely watched number in the industry, providing the closest proximation to sales. TSLA -4.7% premarket.
Go deeper: Long Term Tips discusses the Tesla Model Y.

Facebook takedown case

EU countries can order Facebook (NASDAQ:FB) to take down posts, photographs and videos and restrict global access to that material, according to Europe's top court. They can also compel the tech giant to remove worldwide user comments that have been declared illegal. The case had been closely watched because of its potential ripple effects for regulating internet content, which will place more responsibility on companies to patrol their websites.
Go deeper: The European View talks Facebook and antitrust.

$0 commission pool

E*Trade (NASDAQ:ETFC) is joining the fray in eliminating retail commissions for online U.S.-listed stock, ETF, and options trades, following TD Ameritrade (NASDAQ:AMTD), Charles Schwab (NYSE:SCHW), and Interactive Brokers (IEX:IBKR). "With this new commission schedule we are further raising the bar, delivering an unrivaled experience at price points that cannot be beat," said CEO Mike Pizzi. E-Trade estimates a quarterly revenue impact of $75M from dropping the fees, pushing the stock down 5% in after-hours trade on Wednesday.

Healthcare initiatives

Walmart (NYSE:WMT) will begin several healthcare pilot programs for its U.S. employees starting Jan. 1 as it looks for ways to slash healthcare costs - one of the largest expenses for the retailer after wages. Plans include connecting patients with local doctors, testing a concierge service, video chats with medical professionals and access to fitness clubs. Others in the industry are also targeting healthcare, with Amazon (NASDAQ:AMZN) recently launching a virtual primary care clinic with an option to send nurses to employees' homes.

Thinning middle management

Just weeks after the company cast doubt on its ability to hit profit targets amid a turnaround effort, Kroger (NYSE:KR) is laying off hundreds of employees across its stores. "As part of ongoing talent management, many store operating divisions are evaluating middle management roles and team structures with an eye toward keeping resources close to the customer," a spokesperson declared. "Store divisions operate independently but all of them are taking steps to ensure they have the right talent in the right store leadership positions."

Airbnb listing

Airbnb (AIRB) is set to hire Morgan Stanley (NYSE:MS) and Goldman Sachs (NYSE:GS) as joint lead advisers on its planned stock market flotation next year, Reuters reports. The appointments would represent another high-profile assignment for the investment banks, albeit potentially less lucrative because Airbnb is leaning toward going public through a direct listing rather than an IPO. In a direct listing, no new shares are sold, and the role of the investment banks is more of one advising on market conditions vs. underwriting.

Saudis restore output

Saudi Arabia has fully restored oil output following attacks on its facilities last month that took half of its production offline at their peak. "We all rose to the challenge," Energy Minister Prince Abdulaziz bin Salman told an energy conference in Moscow, adding that the kingdom's focus is now on the listing of Saudi Aramco (ARMCO). "We have stabilized production capacity, we are at 11.3M barrels per day. We still have the kit and the tools to overcome any future challenges."

What else is happening...

Italy probes Netflix (NASDAQ:NFLX) over tax evasion.

Vaping crisis sees Imperial Brands (OTCQX:IMBBY) chief step down.

Microsoft (NASDAQ:MSFT) is making smartphones again.

70% of eurozone bonds have sub-zero yields.

FireEye (NASDAQ:FEYEhires Goldman Sachs for potential sale.

GoPro (NASDAQ:GPRO-15% premarket after guidance cut.

Wednesday's Key Earnings
Bed Bath & Beyond (NASDAQ:BBBY-2.8% AH posting mixed results.

Today's Markets
In Asia, Japan -2%. Hong Kong +0.3%. China closed. India -0.5%.
In Europe, at midday, London -0.5%. Paris +0.6%. Frankfurt closed.
Futures at 6:20, Dow +0.3%. S&P +0.4%. Nasdaq +0.5%. Crude -0.4% to $52.42. Gold flat at $1507.70. Bitcoin +0.4% to $8281.
Ten-year Treasury Yield -2 bps to 1.58%

Today's Economic Calendar
3:45 Fed's Evans: Monetary Policy
7:30 Challenger Job-Cut Report
8:30 Initial Jobless Claims
8:30 Fed’s Quarles: “The Financial Stability Board at 10 Years”
9:45 PMI Services Index
10:00 ISM Non-Manufacturing Index
10:00 Factory Orders
10:30 EIA Natural Gas Inventory
12:10 PM Fed's Mester Speech
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
6:35 PM Fed’s Clarida: Economic Outlook and Monetary Policy

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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