Thursday Morning Reads

Thursday Morning Reads



Open Interest Changes:



U.S. stock futures wavered between gains and losses of about 1% overnight as traders prepared for the newest measures aimed at restarting economic activity. President Trump will unveil the guidelines against a backdrop of soaring jobless claims, citing data which "suggests that nationwide we have passed the peak on new cases." More than 16M Americans have already lost their jobs in the past month (about 10% of the U.S. workforce) and economists expect another 5M initial jobless claims to be reported today.

Getting back to business

Executives told President Trump yesterday that his administration needed to dramatically increase the availability of coronavirus testing before the public would be confident enough to return to work, eat out or go shopping. The task force, known formally as the Great American Economic Revival Industry Groups, includes more than 200 business and political leaders, who have been divided into smaller groups based on their industry. The economic damage has already been devastating: U.S. retail sales plunged 8.7% in March, while manufacturing output slumped by the most in over 74 years.
Go deeper: Germany sets roadmap to reopen its economy.

$6 trillion

The American government has committed more than $6T to arrest the economic downturn from the COVID-19 pandemic, with $2.35T in fiscal spending and $4T from the Federal Reserve. The figure represents more than a quarter of U.S. economic output, and will mean for the first time since WWII, the nation will owe more than its economy can produce in a given year. Despite the huge congressional stimulus, proportionate to GDP, it is the world's 10th largest, behind Japan, Singapore and the Netherlands.
Go deeper: COVID-19 infects 2M people across the globe.

Keep it in the ground

The Trump administration is considering paying U.S. oil producers to leave crude in the ground to help alleviate a glut that has caused prices to plummet and pushed some drillers into bankruptcy, Bloomberg reports. The plan, which would require billions of dollars in appropriations from Congress, could compensate companies for sitting on as much as 365M barrels worth of oil reserves and count it as part of the government's emergency stockpile. Analysts expect storage tanks to fill by summer or even sooner, leaving producers with no place to store their crude and prompting production halts and industry layoffs.
Go deeper: Chesapeake Energy is 'on life support.'

Worries about food supply

Smithfield Foods (OTCPK:WHGLY), the world's largest pork processor, is shuttering two U.S. plants that process bacon and ham, after closing a separate hog slaughterhouse because of a coronavirus outbreak among employees. "The closures are part of the domino effect underway in our industry," said CEO Ken Sullivan. "For the security of our nation, I cannot understate how critical it is for our industry to continue to operate unabated."
Go deeper: U.S. to buy milk and meat as part of farm aid.

Bank earnings

Shares of Bank of America (NYSE:BAC) and Citigroup (NYSE:C) slipped yesterday as they joined JPMorgan (NYSE:JPM) and Wells Fargo (NYSE:WFC) in reporting a slump in Q1 profits. Quarterly profits also halved at Goldman Sachs (NYSE:GS), though its trading unit softened the blow. Top U.S. retail banks additionally said they would provide overdraft relief, so customers could reap the full benefits of the federal government's cash stimulus program. Keep your eyes on more bank earnings today with results from Morgan Stanley (NYSE:MS), BlackRock (NYSE:BLK) and BNY Mellon (NYSE:BK).
Go deeper: Biggest U.S. banks should raise $200B in capital - Kashkari.

Raising dividends?

While most of corporate America suspends shareholder returns to shore up liquidity, some are hiking dividends amid the coronavirus crisis. Take a few examples from the consumer and healthcare sector, which has seen demand rise dramatically as people and entities stockpile to tide over the recent lockdowns. Costco (NASDAQ:COST) is the latest to raise its quarterly dividend by about 8%, following Johnson & Johnson (NYSE:JNJ) and Procter & Gamble (NYSE:PG), which upped their quarterly dividends by about 6% each on Tuesday.

Social-distancing wearables

Ford (NYSE:F) is experimenting with wristbands that vibrate when employees come within six feet of each other as part of a broader array of new safety protocols. The devices could be deployed more widely once the carmaker reopens its idled manufacturing plants. Ford is also expected to subject all workers entering a facility to a thermal-imaging scan, will provide staff with masks and, in some cases, plastic face shields.

Essential Deliveries

Lyft (NASDAQ:LYFT) is launching a new on-demand delivery service to provide essential goods - meals, groceries, cleaning supplies - for healthcare workers, government organizations and non-profits. The program lets Lyft offer its ride-hail drivers an alternate stream of income during the coronavirus pandemic. Though not entirely the same, rival Uber (NYSE:UBER) already has a built-in option with its Uber Eats business.

Netflix worth more than Disney

Investors are clearly expecting Netflix (NASDAQ:NFLX) to benefit from the coronavirus crisis amid a streaming boom with millions of people under stay-at-home orders. In fact, its shares closed at $426.75 on Wednesday, giving the company a market cap of $187.3B and putting it just over Disney's (NYSE:DIS) $186.6B. The latest? Cowen sees a strong quarter for Netflix - powered by strong original content and a "captive audience" from the pandemic - when it reports Q1 earnings on April 21.
Go deeper: 'FAANG Stocks: Making 5 Short-Term Technical Calls Ahead Of Q1 Earnings' by Alexander Veytsman.

What else is happening...

Heavy layoffs at Royal Caribbean (NYSE:RCL).

United Airlines (NASDAQ:UALcuts May schedule by 90%.

J.C. Penney (NYSE:JCP) skips interest payment.

What might a return to the movies look like?

Amazon (NASDAQ:AMZNshutters French warehouses after safety dispute.

Barrick Gold (NYSE:GOLDbuys 800,000 antibody test kits.

Strategy change at GoPro (NASDAQ:GPRO), slashes workforce by 20%.

Tesla (NASDAQ:TSLA) must face lawsuit over Musk's going-private tweet.

Wednesday's Key Earnings
Bank of America (BAC-6.5% on huge reserve build.
Bed Bath & Beyond (NASDAQ:BBBY+11.5% AH posting slight sales beat.
Charles Schwab (NYSE:SCHW-4.3% on falling Q1 net interest revenue.
Citigroup (C-5.6% reflecting coronavirus impacts.
Goldman Sachs (GS+0.2% giving mixed results.
PNC Financial (NYSE:PNC-6% building Q1 PCL for COVID-19.
U.S. Bancorp (NYSE:USB-6.9% amid rising loans and deposits.
UnitedHealth (NYSE:UNH+4.1% on Q1 beat; guidance affirmed.

Today's Markets
In Asia, Japan -1.3%. Hong Kong -0.6%. China +0.3%. India +0.7%.
In Europe, at midday, London +0.4%. Paris +0.7%. Frankfurt +1%.
Futures at 6:20, Dow +0.5%. S&P +0.6%. Nasdaq +0.9%. Crude +1.6% to $20.18. Gold +0.9% to $1756. Bitcoin +1.7% to $6972.
Ten-year Treasury Yield flat at 0.64%

Today's Economic Calendar
8:30 Housing Starts
8:30 Initial Jobless Claims
8:30 Philly Fed Business Outlook
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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