Thursday Morning Reads

Thursday Morning Reads






Open Interest Changes:




Watch for further action in financial stocks as investors digest the Fed's interest hike announced on Wednesday. Its accompanying statement removed the language that the policy remains "accommodative." Fed Chair Jerome Powell explains that the phrase's "useful life was over." Regarding trade, the Fed doesn't see much effect from tariffs in economic data yet. The end result of the trade actions is what's important, Powell says. "In the end, if the place we get to is lower tariffs, that's good," he says. Dow futures are down 0.1%, S&P futures are barely down at 2,910, Nasdaq futures slightly up at 7,596.


Global stocks also continue to decline following the Fed's rate hike, with all indications that a fourth will follow in December. Markets closed down in Asia, with Japan's Nikkei down 1% and Hong Kong's Hang Seng Index slipping 0.4%. The Shanghai Composite Index declined 0.5%. Australia's ASX index fell 0.1%. In Europe, the Stoxx 600 Index is off 0.5% at last check.

Continuing his mission to re-set trade with the U.S.'s partners, President Trump and Japanese Prime Minister Abe have agreed to start trade talks in an arrangement that for now protects Japanese automakers from further tariffs. As part of the agreement, Abe said the U.S. would not impose additional tariffs on the auto sector, while also protecting the politically important farm sector from access that goes beyond the terms in the Trans-Pacific Partnership agreement that Trump abandoned last year. U.S. Trade Representative Lighthizer said the talks would occur in two “tranches” with hopes for an “early harvest” from the initial talks on lowering trade barriers.

The Trump administration isn't considering releasing oil from the Strategic Petroleum Reserve to reduce the impact of coming U.S. sanctions on Iranian crude oil exports, Energy Secretary Perry says. The effects on the global market from an SPR release would be "fairly minor and short term," he says, adding that the world market has enough supply to compensate for the expected loss of Iranian crude oil exports when U.S. sanction take effect Nov. 5. The entire U.S. Strategic Reserve holds just 660M barrels of oil.


A major change is on the way for Toyota's (NYSE:TM) dealership model in Japan. Breaking from a decades-long tradition of using different dealership chains to target only specific segments of the automobile market, Toyota plans to sell all models at all locations. Along with the simplified dealership strategy, Toyota also plans to reduce the number of models it develops for the Japanese market by about 50% based on sales popularity.

Factoring emerging market devaluation into its guidance, Philip Morris International (NYSE:PM) has cut its 2018 full-year forecast to $4.97 to $5.02, compared with the $5.02-$5.12 range it issued in July. The revision reflects unfavorable currency impact of about 12 cents vs. prior guidance of 7 cents, mainly due to the Turkish lira. Excluding unfavorable currency impacts, Philip Morris sees adjusted EPS rising 8%-9% from 2017, vs. the 8-10% increase it saw in July.

Weighing asset sales at AngloGold Ashanti (NYSE:AU), new CEO Kelvin Dushnisky says his goal of unlocking value will involve focusing on the miner's best assets and selling those that are not core to the business. "My initial sense is that 14 assets in a company our size is probably more than I’d like to see, some streamlining would make sense,” he said, adding that he wouldn't consider acquisitions until AU is “firing on all cylinders.”

In a move to give its products a healthier image and halt a sales slump, McDonald's (NYSE:MCD) is getting rid of most artificial ingredients from its burgers. The fast-food chain says it's removed artificial preservatives, flavors, and coloring from its Big Mac, Quarter Pounder with Cheese, and burgers in Happy Meals, a move that affects almost two-thirds of its burger lineup in the U.S.; pickles on the sandwiches still contain artificial preservatives.

In a leadership transition at Sonic Automotive (NYSE:SAH), President and CEO B. Scott Smith is moving to a new role as his brother David Bruton Smith takes over as CEO. Jeff Dyke, executive vice president of operations, will assume the role of president. B. Scott Smith will stay as an employee in the role of co-founder, allowing him to spend more time with his family.

Wednesday's Key Earnings
Bed Bath & Beyond (NASDAQ:BBBY-14.9% PM as Q2 comp sales fall short.
Comtech Telecommunications (NASDAQ:CMTL-10.9% AH on Q4 revenue miss.
H.B. Fuller (NYSE:FUL+1.9% PM despite Q3 earnings miss.
Today's Markets 
In Asia, Japan -0.99%. Hong Kong -0.36%. China -0.54%. India -0.65%.
In Europe, at midday, London +0.01%. Paris -0.39%. Frankfurt -0.53%.
Futures at 6:20, Dow -0.10%. S&P -0.03%. Nasdaq +0.11%. Crude +0.98%to $72.27. Gold +0.07% to $1,199.90. Bitcoin -0.16% to $6,465.
Ten-year Treasury Yield -1.7bps to 3.044%.Today's Economic Calendar
8:30 Durable Goods
8:30 GDP Q2
8:30 Initial Jobless Claims
8:30 International trade in goods
8:30 Retail Inventories (Advance)
8:30 Wholesale Inventories (Advance)
8:30 Corporate profits
10:00 Pending Home Sales
10:30 EIA Natural Gas Inventory
11:00 Kansas City Fed Mfg Survey
1:00 PM Results of $31B, 7-Year Note Auction
3:00 PM Farm Prices
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
4:30 PM Jerome Powell Speech

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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