Thursday Morning Reads

Thursday Morning Reads



Open Interest:




Fourth quarter to open with solid gains

Traders appear to be betting on a better October for the market as futures rally against the backdrop of stimulus talks and the signing of a stopgap bill to avoid a U.S. government shutdown. Dow and S&P 500 futures are ahead by 1%, while contracts tied to the Nasdaq are 1.2% higher, following a session yesterday that ended in the green. While House Democrats initially aimed to pass their roughly $2.2T rescue legislation Wednesday night, they called off the vote to allow more time for bipartisan talks. Some investors are also hopeful that the recent economic rebound will result in corporate earnings that beat expectations when companies start reporting Q3 results later this month.

Direct listing recap

Data mining firm Palantir (NYSE:PLTR) closed the first day of trading up 31% to $9.50/share, down from the $10 open and high of $11.42 but still an upside to the $7.25 reference price. According to CNBC sources, some current employees had problems accessing Morgan Stanley's Shareworks system to sell shares. Meanwhile, work management platform Asana (NYSE:ASAN) jumped 43% to $30.20/share following its direct listing on the New York Stock Exchange (it opened at $27 after setting a reference price at $21).

Bank buyback and dividend curbs go to year-end

Due to the ongoing "economic uncertainty from the coronavirus response" and the need for the banking industry to preserve capital, the Fed has extended its ban on share buybacks for the rest of the year. Additionally, dividends will continue to be capped and tied to a formula based on recent income. The decision will apply to banks with more than $100B in assets, and will likely come as a disappoint to lenders like JPMorgan (NYSE:JPM), which had already indicated interest in resuming share repurchases.
Go Deeper: Goldman ends COVID moratorium on job cuts.

Racial diversity quotas

California Gov. Gavin Newsom has signed legislation that will require the boards of publicly traded companies based in the state to have at least one racially, ethnically or otherwise diverse director by 2021, and more by the end of 2022. Individuals who identify as Black, African-American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian or Alaska Native, or who identify as gay, lesbian, bisexual or transgender, would be considered eligible for meeting the requirement. More than 35% of California’s 513 public-company boards - 185 companies - wouldn't currently meet the new qualification, according to research firm Equilar.

Google hardware event

Google's (GOOGGOOGL) gadget update came on the heels of similar hardware events from Amazon (NASDAQ:AMZN) and Apple (NASDAQ:AAPL), but focused on affordability and value, rather than cutting-edge technology. Two 5G-capable Pixel smartphones were unveiled - the Pixel 5 ($699) and Pixel 4a ($499) - with the former featuring a bigger battery, faster wireless charging and reverse wireless charging. Google also replaced its original Google Home smart speaker with the $99 Nest Audio and showed off its first Chromecast that features a redesigned on-screen interface - branded Google TV - and remote to control it.

Moderna vaccine won't be ready before election

Commenting at a Financial Times conference, Moderna (NASDAQ:MRNA) CEO Stéphane Bancel stated the company will not be able to apply for emergency use authorization in the U.S. for COVID-19 vaccine mRNA-1273 before November 25 at the earliest. That reflects the minimum amount of time needed to accumulate enough safety data. He also said that the company does not expect full approval to distribute the vaccine to all sections of the U.S. population until next spring.
Go Deeper: Salesforce's Benioff touts for vaccines distribution.

Cruising ban extended through October

The CDC has extended its ban on passenger cruising from U.S. ports through Oct. 31 in a development that was largely anticipated. The date aligns with the decision by the Cruise Lines International Association to postpone ocean sailings in U.S. waters until at least November, while an eventual resumption is expected to include mandatory masks in public spaces and COVID-19 tests for passengers before they board. Executives of the cruise companies and CLIA are reportedly planning to meet at the White House tomorrow to discuss the latest developments.
Go Deeper: American, United move ahead with more than 32,000 furloughs.

No trading in Tokyo

The world's third biggest exchange suffered its worst outage ever on Thursday, taking trading offline for the day and casting a spotlight on the bourse's Arrowhead computer system developed in collaboration with Fujitsu (OTCPK:FJTSF). The outage was attributed to a hardware breakdown involving transmitting price information, while the switch to backup hardware didn't take place properly, leaving the market unable to function. "We apologize to investors and market participants for causing disruption," Tokyo Stock Exchange said in a statement, adding that it aims to resume trading as normal on Friday after replacing hardware.

Brexit gets messy

Calling it "the first step in an infringement procedure," the European Union has launched legal proceedings against the United Kingdom for a breach of "good faith" clauses in the Brexit Withdrawal Agreement. "If adopted as is, it will be in full contradiction to the protocol of Ireland-Northern Ireland," European Commission President Ursula von der Leyen announced in a televised statement. Should the U.K. refuse to drop its Internal Markets Bill, the EU has threatened further legal action, while some say hefty fines or trade sanctions are even on the table.

What else is happening...

FAA's Dickson upbeat after flying Boeing's (NYSE:BA) 737 MAX.

DOJ opens ventilator antitrust probe focused on Medtronic (NYSE:MDT) - WSJ.

Another outage hits Microsoft (NASDAQ:MSFT) as Outlook goes down worldwide.

First presidential debate viewed by far fewer people than 2016.

Facebook (NASDAQ:FB) broadens scope of prohibited election ads.

Total (NYSE:TOT) plans big spending boost on renewable energy production.

Today's Markets

In Asia, Japan closed. Hong Kong +0.8%. China -0.2%. India +1.7%.
In Europe, at midday, London +0.9%. Paris +0.6%. Frankfurt +0.1%.
Futures at 6:20, Dow +1%. S&P +1%. Nasdaq +1.2%. Crude -0.9% to $39.87. Gold +0.3% to $1901.40. Bitcoin +1.4% to $10875.
Ten-year Treasury Yield +2 bps to 0.7%

Today's Economic Calendar

7:30 Challenger Job-Cut Report
8:30 Initial Jobless Claims
8:30 Personal Income and Outlays
9:45 PMI Manufacturing Index
10:00 ISM Manufacturing Index
10:00 Construction Spending
10:30 EIA Natural Gas Inventory
11:00 Fed's Williams Speech
3:00 PM Fed's Bowman: "Opportunities and Challenges for Home Ownership"
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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