Thursday Morning Reads

Thursday Morning Reads




Open Interest Changes

Reports out of Vienna suggest OPEC and its allies led by Russia are discussing increasing current cuts of 1.2M barrels per day by more than 400K bpd, as well as extending their agreement from March, to June or later. Crude futures already soared 4.2% on Wednesday - the biggest gain since the attacks on Saudi Aramco's (ARMCO) facilities - on output cut rumors and tightening American stockpiles. A final decision by OPEC+ is likely to come tomorrow afternoon. The group has curbed supply since 2017 to counter booming output from the U.S., which has become the world's largest producer.
Go deeper: QuandaryFX sees crude rallying 50% over the next year.

World's biggest IPO

Saudi Arabia is expected to publish the initial share price of Aramco (ARMCO) today, which will list locally on the Tadawul stock exchange. The current price range puts the oil giant's value at between $1.6T to $1.7T, a figure that's set to beat the record $25B raised by Alibaba (NYSE:BABA) when it debuted in New York in 2014. A 1.5% stake in Aramco is being offered, with 0.5% available to individual retail buyers and 1% for institutional investors.
Go deeper: Robert Boslego feels problems are mounting for Saudi Aramco.

Futures point to more gains

Traders are closely monitoring the prospect of a Phase One trade deal with just 10 days to go before Washington is poised to impose another $156B of tariffs on Chinese goods. Trade optimism led the DJIA to break a three-day decline on Wednesday and rise nearly 150 points, while U.S. futures aimed to extend the gains overnight, climbing another 0.4%. On the data front, the latest weekly jobless claims will be released at 8:30 a.m. ET, while earnings season wraps up with results from Tiffany (NYSE:TIF), Dollar General (NYSE:DG), Ulta Beauty (NASDAQ:ULTA) and DocuSign (NASDAQ:DOCU).
Go deeper: Chris Ciovacco flashes back to December 2018 to compare trends.

Shari Redstone's dream comes true

Viacom (NASDAQ:VIA) and CBS (NYSE:CBS) have completed their re-merger, scaling up against big competition with more than 140,000 premium TV episodes, 3,600 film titles and $13B in annual content investment. ViacomCBS Class A "VIACA" and Class B "VIAC" shares will begin trading today on the Nasdaq. The new company accounts for 22% of TV viewership in the U.S., with the highest share of broadcast and cable viewing across key demographics.
Go deeper: Some of Viacom assets could hamper value creation, according to Daniel Jones.

Auto news roundup

Local United Auto Workers leaders nationwide have approved a new four-year labor contract with Fiat Chrysler (NYSE:FCAU), sending it to their rank-and-file members for final approval. Former GM (NYSE:GM) board member Joe Ashton, a retired UAW leader, also pleaded guilty to criminal charges as part of an ongoing federal corruption probe into the union. Lastly, General Motors announced it will be laying off more than 800 employees as it converts its Detroit Hamtramck plant to an electric vehicle facility, though most of the workers will be offered buyouts or jobs at other factories.

Mass strike paralyzes France

Protests are rocking France again and threatening to bring the country to a standstill over Emmanuel Macron's plan for a top-to-bottom rebuilding of the pension system. Unions representing everyone from transport workers to lawyers, doctors, teachers and students are going on an indefinite "greve," or strike, starting today. The walkouts come as German industrial orders fell unexpectedly in October and eurozone retail sales slumped a worse-than-forecast 0.6%.

Johnson pledges Brexit in 100 days

"This is the most important election in a generation - important because it will define if we go forward as a country or remain stuck, stalled, repeating the same arguments of the last three years with yet more damaging uncertainty," Boris Johnson declared on the campaign trail. Should he win the general election, Johnson would bring his EU withdrawal agreement bill before MPs for an initial vote before Christmas, with the aim of leaving the EU by January 31. Britain would then enter a transition period for the remainder of 2020 as a trade deal is finalized with the bloc.

Brokerage disruption

"We're delighted to share that more than 10M people have accounts on Robinhood," the company wrote in a blog post, rapidly growing from 1M subs in 2016 and 6M accounts in October of 2018. To put that in context, the combined Charles Schwab (NYSE:SCHW) and TD Ameritrade (NASDAQ:AMTD) brokerage giant will serve about 24M clients. The Schwab deal was announced last week after all major brokerages dropped stock trading commission fees to keep up with the trend set by Robinhood, which landed a $7.6B valuation in July after its latest funding round.

What else is happening...

General Motors (GMsets sights on battery joint venture.

Top Boeing (NYSE:BA) engineer at center of 737 MAX crisis to retire.

WeWork (WEopened 52 new buildings this week.

Stimulus packages from Hong Kong and Japan.

Huawei fights FCC rural carrier purchase ban.

RBI holds rates, slashes GDP forecast.

Remember the Takata (OTCPK:TKTDQ) crisis? It's back.

Wednesday's Key Earnings
Campbell Soup (NYSE:CPB+1.9% with turnaround on track.
Slack Technologies (NYSE:WORK+1.9% AH on beats, in-line outlook.
Today's Markets
In Asia, Japan +0.7%. Hong Kong +0.6%. China +0.7%. India +0.2%.
In Europe, at midday, London -0.1%. Paris +0.8%. Frankfurt +0.3%.
Futures at 6:20, Dow +0.4%. S&P +0.4%. Nasdaq +0.5%. Crude +0.2% to $58.56. Gold -0.1% to $1479.40. Bitcoin +2.5% to $7374.
Ten-year Treasury Yield flat at 1.78%Today's Economic Calendar
7:30 Challenger Job-Cut Report
8:30 Initial Jobless Claims
8:30 International Trade
10:00 Factory Orders
10:00 Randal Quarles: “Testimony Before the Senate Banking Committee”
10:30 EIA Natural Gas Inventory
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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