Thursday Morning Reads

Thursday Morning Reads







Morning Charts:

Open Interest Changes for Today:

Seeking Alpha:

Efforts to hammer out a Brexit agreement suffered a serious blow overnight after the Democratic Unionist Party said it could not support the deal as it stands. DUP support is seen as crucial if Prime Minister Boris Johnson is to win Parliament's approval for the deal in time for his Oct. 31 deadline. The news comes as Johnson heads to a European Union summit seeking approval of a tentative withdrawal agreement. In fact, U.K. and EU negotiators just agreed to a deal, sending the pound soaring to seven month highs against the dollar. But the key is whether the new Brexit can pass Britain's fractious Parliament.

New GM contract has $7.7B in investment and key union wins

A new tentative deal between General Motors (NYSE:GM) and the UAW covering more than 46,000 workers includes key union wins along with a pledge to invest $7.7B into U.S. factories, according to the Wall Street Journal. That move would create or preserve 9,000 jobs, and an additional plan to invest $1.3B near its Lordstown, Ohio, plant would create another 1,000. The deal also includes wage hikes, bonuses and other worker demands, along with plans to shutter idle plants. The UAW strike at GM will continue until union leaders vote.
Go deeper: Strike has cost GM $2B, BofA says.

Netflix says competition's OK in a growing streaming pie

Netflix (NASDAQ:NFLX) jumped double digits in post-market trade after its Q3 earnings showed a rebound from poor subscriber results in Q2, even while it hinted toward hotter competition in coming quarters. The company added 6.77M net subscribers vs. last quarter's 2.7M, and said forward guidance accounted for pressure from upcoming services such as Disney Plus (NYSE:DIS), Apple TV Plus (NASDAQ:AAPL), AT&T's HBO Max (NYSE:T) and NBC's Peacock (NASDAQ:CMCSA). But the potential market is large, Netflix said, and "we are all small compared to linear TV".
Go deeper: Netflix +10% as profits jump amid solid growth.

Nestle plans to return as much as $20B to shareholders

Nestle (OTCPK:NSRGY) said it will start a new stock buyback program in January and may complement it with special dividends, seeking to return as much as $20B to shareholders by 2022. The news comes as the company also reported YTD sales rose 3.7%, in line with analyst estimates, helped by Starbucks-branded (NASDAQ:SBUX) coffee for Nespresso machines and Purina pet food. Nestle also signals it is ramping up its M&A focus as it unveils a new management group to seek out growth opportunities, and says it is restructuring its bottled water unit - where YTD sales have slipped - to focus on faster growing brands such as Perrier and S. Pellegrino.

Tesla cleared to start manufacturing cars in China

Tesla (NASDAQ:TSLA) has been approved by China's industry ministry to begin production at the $2B Gigafactory the company is building in Shanghai, the first fully-foreign-owned car plant in China. Tesla plans to produce at least 1,000 of its Model 3s per week from the Chinese factory, which reportedly could be up and running within weeks. The new factory will give Tesla access to China - the world's biggest car market - and help the company avoid higher import tariffs that are imposed on cars made in the U.S.
Go deeper: Chinese auto sales stay in reverse.

Majority of iPhones from past four years run iOS13, Apple says

Apple (AAPL) said 55% of iPhones introduced in the past four years are running iOS13 -- an important metric because users typically upgrade to new iPhones after four years. The company shared the data on its website for third-party developers, also reporting that 50% of all iPhones are on iOS 13, while 33% of iPads are on iOS 13.
Go deeper: Credit Suisse more confident on iPhone demand.

J&J offers $4B opioid litigation settlement

Johnson & Johnson (NYSE:JNJ) reportedly has offered to pay $4B to settle all claims accusing the company of contributing to the opioid epidemic, a deal that likely would please J&J investors since analysts had estimated opioid litigation could cost the company $5B-$10B to settle. If completed, the deal would resolve more than 2,000 lawsuits by state and local governments alleging that J&J's marketing of pain drugs including Duragesic and Nucynta fueled the opioid crisis.
Go deeper: Drug wholesalers perk up on talks to settle opioid suits for $18B.

Barneys selling to Authentic Brands, B. Riley in $271M deal

Luxury chain Barneys New York has a deal to sell its assets to Authentic Brands and B. Riley Financial (NASDAQ:RILY) in a stalking-horse bid amounting to $271M. All Barneys stores are designated for closing, but the deal could lead to Barneys shops appearing in Saks Fifth Avenue stores. Blackrock (NYSE:BLK) is the largest shareholder in Authentic Brands, which controls more than 50 brands including Nautica, Aéropostale, Elvis Presley and Nine West.

Europe issues antitrust order on Broadcom sales tactics

The European Union has issued an "interim measures" order on Broadcom (NASDAQ:AVGO), giving the company a 30-day ultimatum to stop suspect sales tactics. The company is ordered to stop applying certain exclusivity provisions contained in agreements with six of its main customers, based on preliminary findings from an ongoing investigation. Broadcom is seen as a test case for a policy that could have serious implications for companies such as Amazon (NASDAQ:AMZN), Apple (AAPL), Facebook (NASDAQ:FB) and Google (GOOGGOOGL) that have been targeted in Europe over anti-competitive practices.

Facebook still sees Libra winning enough financial backers

The head of Facebook's (FB) Libra project said he still expects to get 100 banks and financial firms on board once regulatory concerns are addressed. Libra chief David Marcus told a panel at the International Monetary Fund conference in Washington yesterday that 1,600 entities globally had initially expressed an interest in joining the project, so Libra should have "no problem" reaching its goal of launching with 100 members. Facebook's attempt to establish a global digital currency has suffered severe setbacks in recent days, abandoned by the likes of Visa (NYSE:V), Mastercard (NYSE:MA), PayPal (NASDAQ:PYPL), Stripe, eBay (NASDAQ:EBAY) and Booking (NASDAQ:BKNG).
Go deeper: Facebook's Libra sets membership after payment-firm exits.

WeWork owner forms panel to consider competing lifelines

WeWork owner We Co. (WE) is setting a special panel of two directors to consider competing proposals for a $5B rescue, Reuters reports. The purpose is to ring-fence the deliberations from the influence of SoftBank (OTCPK:SFTBY), its biggest shareholder and proposer of one of the rescues, a debt-and-equity investment that could end up giving it control of WeWork. SoftBank's plan is competing against one from banks led by JPMorgan (NYSE:JPM). In either case, the $5B is sorely needed, as WeWork could run out of cash by the end of next month.

What else is happening...

Alcoa (NYSE:AA) reports Q3 loss but investors like portfolio review plan.

Cronos (NASDAQ:CRON) flies high after-hours following block trades.

Air Canada (OTCQX:ACDVF) yanks 737 MAX (NYSE:BAfrom schedule until February 14.

Wednesday's Key Earnings
IBM (NYSE:IBM-4.3% PM after revenue miss.
Netflix (NFLX+7.6% PM on solid growth.
Kinder Morgan (NYSE:KMI) reported Q3 earnings and revenue miss, reaffirmed EBITDA outlook.
Alcoa (AA+2% AH as investors cheer drive to lower costs.
CSX (NASDAQ:CSX+4.1% AH on earnings beat, record operating ratio.
Crown Castle International (NYSE:CCI+1% PM on Q3 beat.
United Rentals (NYSE:URI-1% AH on narrowing FY outlook.
Steel Dynamics (NASDAQ:STLD-2% AH on Q3 revenue miss.
Limelight Networks (NASDAQ:LLNW+20.5% PM on record revenue.
SL Green Realty (NYSE:SLG) reported FFO, same-store sales and NOI growth.

Today's Markets
In Asia, Japan -0.09%. Hong Kong +0.69%. China -0.05%. India +1.07%.
In Europe, at midday, London +0.55%. Paris +0.53%. Frankfurt +0.76%.
Futures at 6:20, Dow +0.49%. S&P +0.47%. Nasdaq +0.52%. Crude -0.32% to $53.19. Gold -0.37% to $1,488.50. Bitcoin -0.5% to $8,119.
Ten-year Treasury Yield +4.2 bps to 1.787%.

Today's Economic Calendar
8:30 Initial Jobless Claims
8:30 Philly Fed Business Outlook
8:30 Housing Starts
9:15 Industrial Production
10:30 EIA Natural Gas Inventory
11:00 EIA Petroleum Inventories
2:00 PM Fed's Evans: “Fed Listens: Monetary Policy's Impact on Workers and Their Communities”
2:00 PM Fed's Bowman: “Fed Listens: Monetary Policy's Impact on Workers and Their Communities”
4:20 PM Fed's Williams Speech
4:30 PM Money Supply
4:30 PM Fed Balance Sheet

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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