Thursday Morning Reads
- Nintendo (NTDOY) plans to introduce new Switch device next year. WSJ Report
- ZTE (ZTCOF) has violated a prohibition (ACIA, IPHI, LITE, IIVI, OCLR, FNSR, FN, NPTN, MTSI, AAOI). Reuters Report
- Google (GOOG) might investigated by antitrust officials over its Android operating system. NY Post Report
- Intelligence officials say that China was behind cyber attack against 30 us companies including Apple (AAPL) and Amazon (AMZN), but the cos deny this. Bloomberg Report
- China plans to sell $3 bln worth of U.S. treasuries (FXI, TLT). WSJ Report
- Russia and Saudi Arabia have agreed to increase oil output (XLE, USO, COMDX). Reuters Report
- Futures fall sharply amid rising rates
- Cadillac tops Tesla in automated driving test
- Pentagon comments on hypersonic weapon development
- Enterprise prices $3B aggregate principal amount of senior notes
- Boeing sees aerial taxi prototype within year
- Facebook may face $1.6B fine over data breach
- Saudis, Russia agreed to lift oil output
- GE shareholders note: Danaher div yield never topped 0.73% in Culp's time
Chart of the Day:
$EEM emerging markets still pointing south
Tweet of the day:
Here is every time in the past 25 years when the Dow closed at a 52-week high while most of the NYSE was in a bear market. pic.twitter.com/CZNWhZhq30
— SentimenTrader (@sentimentrader) October 3, 2018
- The Watchlist
- Week Ahead Webinar
- Today's Option Recap
- 2018 Top 5 For Back Half of 2018
- 2018 Top 5 Stocks
Todays Open Interest Changes:
A large rise in U.S. Treasury yields is pulling global bond yields higher across the board and boosted the dollar, while stocks fell in response. The 10-year Treasury note is now at its highest level since mid-2011, up 7 bps to 3.23%, as recent comments from Federal officials signaled more rate hikes are on the horizon. Economic figures pointing to strength in the U.S. economy are also causing markets to reassess how far the Fed's tightening cycle will go.
As President Trump ups his criticism on OPEC to bring down fuel costs, Russia and Saudi Arabia struck a private deal in September to raise oil output and informed the U.S. before the latest OPEC meeting in Algiers. The idea was "to add barrels to the market quietly with a view not to look like they are acting on Trump’s order to pump more," sources told Reuters. It also underlines how the two nations are increasingly deciding oil output policies bilaterally.
Prime Minister Theresa May's officials are drawing up plans to rush her Brexit deal through Parliament to stave off a rebellion from her own party, Bloomberg reports. The team wants the final withdrawal agreement ratified by lawmakers within two weeks of signing divorce terms with Brussels, meaning members of Parliament would vote on whether to accept or reject the treaty by the beginning of December.
Theresa May is also working on a proposal that could see her seek an all-U.K. customs union with the EU and has received the tacit backing of Ireland for such a post-Brexit deal, FT reports. Officials in Dublin, not named by the paper, "privately argue it could settle the border question and open the way to a deal," but the EU's chief negotiator Michel Barnier has rejected the idea.
The International Court of Justice has ordered the U.S. to lift sanctions on humanitarian goods for Iran, although the Trump administration made clear the decision wouldn't change anything and pulled out of the 1955 Treaty of Amity (on which the lawsuit was based). The little-known agreement was signed long before Iran's 1979 Islamic Revolution that turned the two countries into arch enemies.
Following the minimum wage increase at Amazon (NASDAQ:AMZN), warehouse workers will lose their monthly bonuses and stock awards. A report in The Guardian suggests that the change could cause some long-term employees to make less money over time, but Amazon told CNBC that it "more than compensates" for the benefit loss. Affected workers will be able to review the new pay structure and voice any concerns.
The Irish Data Protection Commissioner has opened a formal investigation into the recent hack at Facebook (NASDAQ:FB) that affected nearly 50M accounts. According to new GDPR legislation, firms can be hit with fines if they are found to have not done enough to prevent a data breach. The maximum penalty Facebook could face is 4% of annual global turnover, an amount which could total around $1.63B.
Diversifying? iHeartMedia (OTCPK:IHRTQ) is trading up to $10M worth of advertising inventory for a roughly 5% stake in the publisher of High Times, the 44-year-old marijuana magazine. This gives the biggest U.S. radio broadcaster the "opportunity to play in the cannabis sector without directly doing it themselves," said High Times CEO Adam Levin. The company plans to list shares on Nasdaq toward the end of this month or the beginning of November.
Despite a major slump in cryptocurrency prices, TD Ameritrade (NASDAQ:AMTD) is doubling down on the sector. The U.S. brokerage has announced a strategic investment in an exchange called ErisX, which offers both bitcoin spot and futures trading, and is regulated by the Commodity Futures Trading Commission. "We listened to our customers - what we continued to hear was that they wanted access to trade digital currency products," said TD's JB Mackenzie.
More Brexit fallout... Nomura (NYSE:NMR) is in advanced talks with regulators about using Paris as its post-Brexit European lending hub, in another boost to the French capital's bid to become the continent's preeminent banking center. The company, which employs around 2,300 people in London, already announced that it will set up a broker dealer in Frankfurt, which it will use as its trading hub after March 2019.
Winning the self-driving car race does not necessarily mean coming in first. Amid a rapidly changing industry, Toyota (NYSE:TM) disclosed a partnership today that will see it team with Softbank (OTCPK:SFTBY) on automated driving. Two other self-driving tie-ups were announced yesterday between Honda and General Motors, as well as Daimler (OTCPK:DMLRY) and Renault (OTCPK:RNLSY), which centered on investment, batteries and mobility services.
The Super Cruise system of GM's (NYSE:GM) Cadillac outscored Tesla's Autopilot (NASDAQ:TSLA) in a new ranking of partially automated driving systems tested by Consumer Reports, while Nissan's (OTCPK:NSANY) ProPilot Assist and Volvo's (OTCPK:GELYY) Pilot Assist landed third and fourth place. The organization elected to conduct a formal study intended for publication, because "we are at a tipping point where they are now going mainstream."
Boeing expects its self-flying car prototypes to be "flying within the coming year," while the machines will be operational in "about five years' time." "We're working on both the ecosystem - the regulatory framework - and the new vehicles," CEO Dennis Muilenburg told Bloomberg. Boeing (NYSE:BA) last year acquired autonomous aviation startup Aurora Flight Sciences and is working with SparkCognition to develop unmanned traffic management systems.
The Pentagon official in charge of planning for America's future wars downplayed Russian and Chinese efforts to develop hypersonic arsenals, a weapon the U.S. is currently unable to defend against. "We are going to fly sooner and more often than people have ever expected," said Patrick Shanahan, deputy defense secretary. Companies competing for hypersonic contracts include Lockheed Martin (NYSE:LMT), Northrop Grumman (NYSE:NOC), Raytheon (NYSE:RTN), Boeing (BA), Kratos (NASDAQ:KTOS) and Aerojet Rocketdyne (NYSE:AJRD).
With the peak holiday shipping season fast-approaching, FedEx (NYSE:FDX) is paying retirement-age pilots bonuses of $40K - and potentially as much as $110K - to keep them flying into next year. The bonuses, reported by Reuters, reveal that a wave of pilot retirements, global pilot shortages and rising cargo demand fueled by the growth of global e-commerce are straining the world's largest air delivery fleet.
Sears is shuttering another round of stores ahead of the holidays as it tries to stabilize its finances amid deteriorating sales. At least six Sears (NASDAQ:SHLD) outlets and five Kmart locations are scheduled to close in November and December, with some layoffs set to begin two days before Christmas. The company had cut its store count to 866 stores as of last month, down from 1,980 five years ago.
Shares of Barnes & Noble are up more than 25% premarket after the retailer said it is naming a special committee to review bids for the company. The decision follows expressions of acquisition interest from multiple parties. Barnes & Noble (NYSE:BKS) also said it has "observed rapid material accumulations" of its stock by an unknown party or parties, prompting the adoption of a shareholder right plan.
In Asia, Japan -0.6%. Hong Kong -1.7%. China closed. India -2.2%.
In Europe, at midday, London -1%. Paris -1.1%. Frankfurt -0.2%.
Futures at 6:20, Dow -0.4%. S&P -0.5%. Nasdaq -0.7%. Crude -0.2% to $76.24. Gold flat at $1202.60. Bitcoin +1.2% to $6546.
Ten-year Treasury Yield -7 bps to 3.23%
Today's Economic Calendar
7:30Challenger Job-Cut Report
8:15Randal Quarles: “Trends in Urban and Rural Community Banks”
8:30Initial Jobless Claims
10:30EIA Natural Gas Inventory
4:30 PMMoney Supply
4:30 PMFed Balance Sheet