Thursday Morning Reads

Thursday Morning Reads





Tweet of the morning:

Unusual Option Action:


 Open Interest Changes:




Washington does not want a trade war with the EU, but whether there is an escalation or not will depend on the bloc, U.S. Commerce Secretary Wilbur Ross told Le Figaro. The U.S. today will likely announce import tariffs on steel and aluminum originating from the EU, as well as issue a decision on Mexico and Canada, either before markets open or after the markets close. In retaliation, the EU has said it will set duties of €2.8B on U.S. exports, including jeans, bourbon and motorcycles.


A major jump in energy prices - with Brent reaching $80/bbl this month - pushed eurozone inflation in May back to the ECB's target of "below, but close to 2%." Policymakers will now have to assess the current 1.9% rate, ahead of possible plans to begin tapering bond purchases in September and ending the QE program in December.

Italy is awaiting a decision from League leader Matteo Salvini on whether to join a last-ditch attempt to form a government with the Five Star Movement after President Sergio Mattarella rejected their candidate for economy minister. Italian stocks are trading higher, while borrowing costs edged lower, as signs emerged of a compromise to avoid snap elections that could reflect sentiment of euro membership.

China's factory activity grew more than expected in May, with the official manufacturing PMI coming in at 51.9 - the highest level since October 2017 - boosted by strong demand factors and gains in global commodity prices. Meanwhile, China's services PMI was reported at 54.9 from 54.8 in April as the manufacturing giant continues to transition to a services and consumption-driven economy.

A 72-hour strike is underway by oil workers in Brazil, marking a new blow to President Temer on the heels of a trucker protest that strangled Latin America's largest economy. Employees are demanding changes at Petrobras (NYSE:PBR), whose shares have plunged nearly 30% in two weeks over fears that political interference would unwind recent investor-focused policies.

A new study published by Harvard University indicates that over 5,000 people died in Puerto Rico as a result of Hurricane Maria, more than 70 times greater than the island's official death count. The storm knocked out power to almost the entire U.S. territory of more than 3M people, putting a strain on basic services and medical care. By comparison, more than 1,800 people died when Katrina roared across the U.S. Gulf Coast in 2005.


Facebook is scheduled to hold its annual shareholder meeting today, where the company plans votes that will serve as referendums on its internal controls and the leadership of Mark Zuckerberg. The social network has also been confronted with a shareholder resolution asking it to endorse a set of principles to guide its tax strategies to help avoid financial risks for Facebook (NASDAQ:FB) investors.

IBM has reportedly laid off 50% to 70% of the workforce at its Watson Health operation, primarily at recent acquisitions for which Big Blue paid at least $3.6B. Those include cloud-based services Explorys and Phytel, as well as medical image company Merge Healthcare and Truven Health Analytics. One former IBM employee wrote that "there are about 7,000 people in Watson Health today and this was a cost-cutting exercise."

Australians will be blocked from shopping on Amazon's (NASDAQ:AMZN) international websites and restricted to its local platform as the e-commerce giant complies with a new Goods and Services Tax that goes into effect for the 2018-2019 financial year. The move will drive traffic to Amazon’s Australian website, which has drawn criticism for a thin product range and uncompetitive prices since it began taking orders in December.

Adidas can declare itself the winner over archrival Nike (NYSE:NKE) in the upcoming soccer World Cup. After Nike kitted out more teams for the first time in Brazil in 2014, Adidas (OTCQX:ADDYY) has fought back, sponsoring 12 of the 32 participating teams this year, including strong contenders like Germany and Spain, along with host Russia. Nike is supplying shirts for 10 countries, including Brazil, France and England.

Pandora's latest subscription service is set to help it compete against tough rivals in Apple (NASDAQ:AAPL) and Spotify (NYSE:SPOT), according to CEO Roger Lynch. The new Pandora (NYSE:P) Premium Family plan lets up to six family members share music for $14.99/month. It also contains a feature called "Our Soundtrack," which auto-generates personalized shared playlists.

Minnesota has become the latest state to sue Insys Therapeutics (NASDAQ:INSY), accusing the drugmaker of illegally marketing Subsys, a powerful fentanyl-based pain medication. It comes as former Insys sales representative Michelle Breitenbach pleaded guilty over bribing doctors to prescribe the drug, and as the DOJ earlier this month joined five whistleblower lawsuits accusing Insys of paying Subsys kickbacks.

Exxon Mobil CEO Darren Woods hopes the new attorney general in New York "comes to a different conclusion" than predecessor Eric Schneiderman on a climate change probe into the world's largest publicly traded oil producer. A report by Reuters also suggests that Exxon (NYSE:XOM) is doubling down on its efforts to gain access to China's independent refiners, known as teapots, after winning crude import licenses from the government in 2015.

"I do think that we're on track in 2019 for an IPO," UBER CEO Dara Khosrowshahi told CNBC, adding that the company is in talks about using tech from Alphabet's (GOOGGOOGL) autonomous driving unit Waymo on its ride-hailing app. Reports also suggested that Berkshire Hathaway (BRK.ABRK.B) offered Uber a $3B investment earlier this year, and while Warren Buffett confirmed the discussions, he said some of the details were "not correct."

Wednesday's Key Earnings
Box (NYSE:BOX-4.6% AH following mixed guidance.
Dicks (NYSE:DKS+25.8% despite ditching assault rifles.

Today's Markets 
In Asia, Japan +0.8%. Hong Kong +1.4%. China +1.8%. India +1.2%.
In Europe, at midday, London +0.1%. Paris +0.1%. Frankfurt -0.4%.
Futures at 6:20, Dow -0.1%. S&P -0.1%. Nasdaq flat. Crude -0.5% to $67.84. Gold +0.2% to $1308.50. Bitcoin +2% to $7520.
Ten-year Treasury Yield +2 bps to 2.87%

Today's Economic Calendar
7:30 Challenger Job-Cut Report
8:30 Initial Jobless Claims
8:30 Personal Income and Outlays
9:45 Chicago PMI
9:45 Bloomberg Consumer Comfort Index
10:00 Pending Home Sales
10:30 EIA Natural Gas Inventory
11:00 EIA Petroleum Inventories
1:00 PM Fed's Reserve Gov. Lael Brainard: Economy and Monetary Outlook

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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