Thursday Morning Reads

Thursday Morning Reads



Open Interest Changes:




Walt Disney World opens to annual passholders today and tomorrow, with the Magic and Animal Kingdom areas opening to the general public on Saturday, followed by Epcot and Disney’s Hollywood Studios four days later. New safety requirements from the theme park operator will include temperature checks, face coverings and extra sanitation efforts, though Disney (NYSE:DIS) is facing a petition from some workers asking for a reopening delay due to increased COVID-19 cases and hospitalizations in Florida. SeaWorld (NYSE:SEAS), Cedar Fair (NYSE:FUN) and Six Flags (NYSE:SIX) have all seen moderate traffic at their reopened parks over the past week amid the ongoing coronavirus pandemic.

Weekly jobless claims

Tech stock love saw Nasdaq futures rise overnight, while Dow and S&P 500 futures inched lower, following a turnaround on Wednesday that saw all three indexes close back in the green. More than 60,000 new daily COVID-19 infections were recorded in the U.S. yesterday to mark the single-largest total of any country since the coronavirus outbreak began in early January. Today's session will be highlighted by earnings from Walgreens Boots Alliance (NASDAQ:WBA), as well as jobless claims data at 8:30 a.m. ET, which analysts expect will show 1.3M Americans filing for weekly unemployment benefits.

Unemployment rate

Sentiment also got a boost on Wednesday after St. Louis Fed President James Bullard said that the jobless rate could fall substantially by the end of 2020. "I think we're tracking very well right now," the central bank official told CNBC. "Seems to me like by the end of the year you can get down certainly to single digits, probably even below 8%, maybe 7% by the end of the year." It's been quite a run for the unemployment rate, which was at a 50-year low of 3.5% just five months ago before spiking up to 14.7% in April (it currently stands at 11.1%).

Latest retail bankruptcy

Add Brooks Brothers to the recent retail bankruptcy list that includes Neiman Marcus, J.Crew and J.C. Penney (OTCPK:JCPNQ). The storied apparel brand, founded in 1818, will be looking for a buyer as it goes through reorganization, and has decided to close 51 stores, a decision it attributed to the coronavirus pandemic. One reason for Brooks Brothers' struggle was its big rent obligations, but the company was also feeling some effects of a change in traditional business dress and shift towards casual, despite its own efforts in activewear. That loss in demand will only become more pronounced as people continue to work from home.

Amazon pulls Washington Redskins merch

Echoing similar moves by Target (NYSE:TGT), Walmart (NYSE:WMT) and Nike (NYSE:NKE), Amazon (NASDAQ:AMZN) is removing Washington Redskins merchandise from its online store, adding to pressure on the NFL team to change its name. Sellers have 48 hours to review and remove items flagged by Amazon, including jerseys, t-shirts and jewelry. The decision comes after the Washington Redskins announced last week it would review its name after several big sponsors - FedEx (NYSE:FDX), Nike, PepsiCo (NASDAQ:PEP) - called on the team to rebrand itself following pressure from investors.

Pressure builds on J&J to halt global talc sales

More than 170 nonprofit groups are asking Johnson & Johnson (NYSE:JNJ) to stop selling its talc-based baby powder worldwide after the company said in May that it would discontinue the product in the U.S. and Canada. "Decades of independent scientific studies by medical experts around the world support the safety of Johnson's Baby Powder," according to the company. "We continue to offer this product in many other regions around the world where there is higher consumer demand." Johnson & Johnson still faces thousands of lawsuits from consumers and their survivors claiming its talc products were contaminated with asbestos and caused cancer.

Self-driving technology

Tesla (NASDAQ:TSLA) is "very close" to achieving level 5 autonomous driving capabilities, CEO Elon Musk said by video at the opening of the World Artificial Intelligence Conference in Shanghai. "I remain confident that we will have the basic functionality for level 5 autonomy complete this year," he added, as the company competes against Google's Waymo (GOOGGOOGL), GM's Cruise (NYSE:GM), Amazon's Zoox (AMZN) and Uber (NYSE:UBER) in the self-driving arena. Level 5 is typically referred to as "full automation," where all roads and environmental conditions can be managed without a driver and steering wheels are optional.

Challenge to secure tech business in China

Google (GOOGGOOGL) is scrapping plans for a new major cloud service in China due to concerns over political tensions and the coronavirus pandemic, Bloomberg reports. The initiative was known as "Isolated Region" and sought to address the desires of China and other countries to control data within their own borders (via a local business or government agency). Google Cloud brought in $8.9B for Alphabet last year, but the cloud platform lags behind market leaders Amazon Web Services (AMZN) and Microsoft Azure (NASDAQ:MSFT).

Hong Kong tensions

Following in the footsteps of Canada, Australia has suspended its extradition treaty with Hong Kong, as the country moves to offer a path to citizenship for those who wish to leave the city. Australia also updated its travel advisory, warning that China's new "vague" national security law could lead to foreign nationals being arbitrarily detained in Hong Kong. The law is the biggest change in Hong Kong's freedoms and autonomy since Britain handed the territory back to China in 1997 and could endanger the city's appeal as a financial hub.

What else is happening...

Nvidia (NASDAQ:NVDA) passes Intel's (NASDAQ:INTC) market cap on GPU tailwinds.

Twitter (NYSE:TWTR) shares pop on speculation of subscription service.

Costco (NASDAQ:COSTcomparable sales rose 11.5% in June.

Travel slump... United Airlines (NASDAQ:UAL) explores 45% cut to U.S. staff.

IBM (NYSE:IBMacquires software-bot maker WDG Automation.

Amazon (AMZN) and Netflix (NASDAQ:NFLX) pitched on buying a theater chain.

Wednesday's Key Earnings
Bed Bath & Beyond (NASDAQ:BBBY-7.4% AH on soft earnings, store closings.

Today's Markets
In Asia, Japan +0.4%. Hong Kong +0.3%. China +1.4%. India +1.2%.
In Europe, at midday, London -0.7%. Paris +0.1%. Frankfurt +1.2%.
Futures at 6:20, Dow -0.3%. S&P -0.2%. Nasdaq +0.4%. Crude -0.3% to $40.77. Gold +0.1% to $1822.70. Bitcoin -0.8% to $9380.
Ten-year Treasury Yield flat at 0.66%

Today's Economic Calendar
8:30 Initial Jobless Claims
10:00 Wholesale Trade
10:30 EIA Natural Gas Inventory
12:00 PM Fed's Bostic: "The Prescription: Fiscal Policy for the COVID-19 Economy"
1:00 PM Results of $19B, 30-Year Note Auction
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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