Thursday Morning Reads

Thursday Morning Reads




Open Interest:




Get ready for vaccine distribution

"Prepare for a Covid-19 vaccine to be ready by Nov. 1," the Centers for Disease Control and Prevention declared, notifying public health officials in all 50 states and five large cities to prepare for distribution. Technical specifications were given for two candidates, dubbed "Vaccine A" and "Vaccine B," including requirements for shipping, mixing, storage and administration. The details appear to match vaccines being developed by Pfizer (NYSE:PFE) and partner BioNTech (NASDAQ:BNTX), as well as Moderna (NASDAQ:MRNA), which both require two shots 28 days apart. Pfizer has also stated publicly that it is on track to seek an emergency use nod as early as next month.
Go Deeper: Sanofi starts COVID-19 trials after positive early data.

Futures take a breather

Traders look set to pare the robust gains seen on Wall Street this week after a rally that lifted the DJIA above 29,000 for the first time since February. Some signs of profit-taking were already in the air as high-flying names like Apple (AAPL) and Tesla (NASDAQ:TSLA) fell 2% and 5.8%, respectively, on Wednesday, though the losses only curb significant YTD gains for each stock. On the economic calendar, reports today include the latest jobless claims, July's trade balance, revisions to Q2 productivity and labor costs, and the ISM's non-manufacturing PMI for August.

U.S. debt to exceed size of the economy

The Congressional Budget Office projects a federal budget deficit of $3.3T in 2020, more than triple that of 2019's shortfall, mostly from the economic disruption caused by the COVID-19 pandemic and the ensuing legislative response. In the fiscal year that begins on Oct. 1, federal debt held by the American public is also projected to reach or exceed 100% of U.S. GDP for the first time since WWII. That would put the U.S. in an exclusive club of nations including Japan, Greece and Italy, which all have debt loads that exceed their economies.

€100B stimulus plan

Leading gains across Europe, France's CAC 40 climbed 2% as the country unveiled a €100B dose of stimulus to get the economy moving again (GDP contracted 14% following pandemic-induced lockdowns in Q2). The "France Relaunch" plan will narrow in on boosting supply and encouraging investment, as well as wage subsidies and a €10B tax cut for industry production next year. It's not the only news boosting European equities this morning. Over in Germany, Chancellor Angela Merkel's ruling bloc backed plans allowing for extraordinary deficit spending in 2021.

Big Tech responds to European tech taxes

Several European nations, including the U.K., France and Italy, have gone ahead with implementing Digital Services Taxes (DST) on Big Tech as negotiations with the U.S. fell apart months ago. As the new taxes come into force, U.S. tech giants have responded by passing on some of the costs. Apple (NASDAQ:AAPL) has announced it will raise charges for developers on the local App Stores, Google (GOOGGOOGL) is increasing fees for all ads bought in the U.K. and Amazon (NASDAQ:AMZN) is upping costs for third-party sellers by 2%.

Latest round of India app bans

The 118 mostly China-based apps are "prejudicial to sovereignty and integrity of India" as well as "security and public order," the country’s Ministry of Electronics and Information Technology said in a statement. It follows multiple rounds of high-level military talks with Beijing that failed to end the recent standoff over the two nations' disputed border. Included in the bans are versions of Tencent's (OTCPK:TCEHY) popular game PUBG, Xiaomi's (OTCPK:XIACF) ShareSave, Baidu's (NASDAQ:BIDU) apps and Ant Group's (NYSE:BABA) Alipay.

The Commoner

Netflix (NASDAQ:NFLX) has signed a production deal with Prince Harry and his wife Meghan Markle, the Duke and Duchess of Sussex, after they stepped away from the British royal family and moved to California. They have a multi-year agreement to produce nature series, documentaries and children's programming, however, Markle, who most recently starred in Suits, will not be acting. The deal is of a piece with the one Netflix struck with former president Barack Obama and wife Michelle, which established a slate of programming the Obamas would produce for the streaming giant.

Up in vape

Juul Labs (JUUL) is planning another significant round of layoffs after cutting about one-third of its 3,000 workers earlier this year, WSJ reports. Plagued by regulatory crackdowns and investigations into its marketing practices, the e-cigarette maker may also pull out of Europe and Asia to combat a sharp drop in sales. In the first quarter of this year, Juul reported a loss of $46M on sales of $394M, weighing on the returns of the startup's biggest investor. Altria (NYSE:MO) took a 35% stake in 2018 at a price that valued Juul at $38B, though that figure has shrunk to $12B.

The SPAC craze

On a "mature unicorn" hunt, Bill Ackman's Pershing Square Tontine Holdings (NYSE:PSTH.U) has been rebuffed by Airbnb (AIRB), according to a Bloomberg report. Pershing Square Tontine six weeks ago raised a SPAC-record $4B in an IPO. Other possibilities for Ackman? Perhaps Bumble, which is said to be prepping an IPO in the $6B-$8B valuation range, or Robinhood (RBNHD), which recently raised $200M at an $11.2B valuation, and has massively shaken up the brokerage industry.
Go Deeper: Skillz set to go public via SPAC at $3.5B valuation.

What else is happening...

Tesla's (TSLA) largest independent investor cuts stake due to concentration rule.

Robinhood (RBNHD) faces SEC fine over high speed trading deals - WSJ.

DraftKings (NASDAQ:DKNG) soars after Michael Jordan comes on board.

Another heat wave set to test California electric grid.

Verizon (NYSE:VZ), Amazon (AMZNmay invest $4B in Vodafone Idea - Mint.

Wednesday's Key Earnings

Crowdstrike (NASDAQ:CRWD) -6.3% AH despite beat-and-raise after rally.
Macy's (NYSE:M) +0.6% after narrower-than-expected Q2 loss.
PVH Corp. (NYSE:PVH) +4.2% AH posting strong digital commerce growth.

Today's Markets

In Asia, Japan +0.9%. Hong Kong -0.5%. China -0.6%. India -0.1%.
In Europe, at midday, London +0.6%. Paris +1.8%. Frankfurt +1.2%.
Futures at 6:20, Dow flat. S&P -0.2%. Nasdaq -0.6%. Crude -1.6% to $40.85. Gold -0.3% to $1939.80. Bitcoin -3.8% to $11380.
Ten-year Treasury Yield +1 bps to 0.66%

Today's Economic Calendar

7:30 Challenger Job-Cut Report
8:30 Jobless Claims
8:30 Goods and Services Trade
8:30 Productivity and Costs
9:45 PMI Composite Final
10:00 ISM Service Index
10:30 EIA Natural Gas Inventory
12:00 PM Fed's Bostic: Economic Outlook
1:00 PM Fed's Evans: U.S. Monetary Policy
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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