Thursday Morning Reads

Thursday Morning Reads




 Chart of the day:
 Momentum Shift



Earnings This Week:

Some implied moves for earnings next week: 4.8%5.6% 3.8% 10.3% 5.7%  4.6%5.0% 7.2% 7.4% 4.4% 6.9%7.3% 5.0% 4.5% 10.4% 7.2%8.5% 10.4% 6.1%

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U.S. stock index futures are under pressure again as investors digest minutes from the Fed's most recent meeting that highlighted it was staying on course for rate hikes despite growing criticism from President Trump. The yield on the benchmark 10-year Treasury note and 30-year Treasury bond were 3 bps higher at 3.21% and 3.38%, respectively, while Philly Fed and U.S. jobless claims data are set for release on the data front.


News that Theresa May might be prepared to delay Britain's departure from the EU has caused fury on the front pages of several newspapers this morning. "A further idea that has emerged - and it is an idea at this stage - is to create an option to extend the implementation period for a matter of months," she told the Brexit summit in Brussels, as EU leaders confirmed it was up to May to offer new ideas.

The U.S. Treasury has again passed up a formal opportunity to designate China as a "currency manipulator" in its semiannual forex policy report. It still singled out China's currency practices as a source of "particular concern," keeping the nation and five other countries on a formal "monitoring list." Treasury Secretary Mnuchin said over the weekend that currency issues would have to be a part of any U.S.-China trade talks.

Amid a torrid 2018 for Chinese shares, which have fallen about 30% this year, Beijing is planning to further open up its stock market to international investors. A trading link between London-Shanghai is expected to go live at the end of this year, with HSBC becoming the first foreign company to trade on a Chinese bourse. It will be the first test of CDRs, a type of share based on the structure of American depositary receipts.

While there is no rush to change requirements, the SEC is considering seeking public comment on ways to ease the quarterly reporting burden on publicly listed companies, while maintaining appropriate levels of disclosure and investor protection. "This subject is something the staff has been considering, even before the President [Trump] tweeted about it," an SEC spokeswoman said in a statement.


Four powerful institutional investors have co-filed on a shareholder proposal to remove Mark Zuckerberg as Facebook (NASDAQ:FB) chairman after a series of scandals this year. The news has little practical effect on Zuckerberg because of his supervoting position, but it does add to the drumbeat of scrutiny on Facebook's governance amid security controversies and other troubles.

A lawsuit has been filed by eBay (NASDAQ:EBAY) against Amazon (NASDAQ:AMZN) over poaching tactics on its marketplace platform. The complaint accuses Amazon of perpetrating a scheme to "infiltrate and exploit" eBay's internal member email system over the past few years and was used by dozens of Amazon sales representatives to recruit high-value eBay sellers.

Hoping to carve out a bigger U.S. footprint, (NASDAQ:JD) will soon launch a flagship online store on Google's (GOOGGOOGL) shopping platforms to sell directly to American consumers after the U.S tech titan bought a $550M stake in earlier this year. is also adding a FedEx-style parcel delivery service to its e-commerce offerings, helping leverage its warehouse and driver network.

Overnight earnings roundup: Unilever (NYSE:UL-2.3% premarket despite a pickup in pricing, while Nestle (OTCPK:NSRGY) confirmed its outlook as Q3 growth ticked up. Novartis (NYSE:NVS+1.4% amid sales growth in innovative medicines and raised guidance. Ericsson (NASDAQ:ERIC) further rose 3.9%boosted by high activity levels in North America, while Taiwan Semiconductor (NYSE:TSM) fluctuated over trade tensions that could undermine global technology demand.

Expanding its radiopharmaceuticals business, Novartis (NVS) is acquiring Endocyte (NASDAQ:ECYT) for $2.1B, or $24-per-share, representing a premium of 54% to Endocyte's Wednesday closing price. The deal will help develop a broader role for radioligand therapies in cancer treatment and enable Novartis to investigate potential drug developmentfor use in earlier lines of prostate cancer therapy.

Bringing it closer to becoming a global top 10 drugmaker, Takeda Pharmaceutical (OTCPK:TKPYY) has received approval from Japan's Fair Trade Commission for its $62B acquisition of Shire (NASDAQ:SHPG). The deal, which will be the largest overseas purchase by a Japanese company, has already received unconditional clearance from regulators in the U.S., China and Brazil, and just needs one more green light from the EU.

Constellation Brands CEO Rob Sands will step down in March as he assumes the role of executive chair, and will be replaced by the Corona beer maker's President Bill Newlands, an alcohol industry veteran. As executive chair, Sands will be charged with overseeing Constellation's (NYSE:STZ) $4B investment in Canopy Growth (NYSE:CGC), the first publicly traded cannabis company in North America.

With U.S.-China tensions continuing to ramp up, prospects for China's approval of Disney's (NYSE:DIS) $71B deal for media assets of Fox (NASDAQ:FOXA) are a little shaky for investor comfort, WSJ reports. Churchill Capital said investors are pricing in a 43% chance that the deal won't go through, despite little overlap (like Disney's Shanghai theme park) between the two in China.

Uber has raised $2B in its debut bond sale after boosting the size of the offering to meet high demand from investors to fund its cash-intensive growth, FT reports. The startup is preparing for a 2019 IPO that reports suggested could value it at more than $100B - far more than its last reported valuation of $72B, which UBER notched after a $500M capital injection from Toyota (NYSE:TM).

Volkswagen is taking action to pay premiums of between €500 and €7,000 for owners to exchange older, dirtier diesel cars for newer models in Germany, as well as "environment incentives" worth between €1,500 and €8,000. The move is part of VW's (OTCPK:VWAGY) bid to clean up city pollution to avoid driving bans. A similar initiative from August 2017 to June 2018 resulted in 210K vehicles being swapped.

Growing oil and gas production from shale fields will act as a "natural hedge" for deepwater projects, the new head of Royal Dutch Shell's (RDS.ARDS.B) U.S. business, Gretchen Watkins, said in her first interview since joining the Anglo-Dutch major in May. Investments into shale, or short-cycle projects, have risen as energy companies have been under pressure to rein in costs, pay down debt and boost returns amid a global shift towards forms of cleaner energy.

New General Electric CEO Larry Culp has told French Finance Minister Bruno Le Maire that the company will stick to its earlier pledges on jobs or pay a penalty. GE had committed to creating 1,000 net new jobs by the end of the year when it bought Alstom's energy business in 2015, but former CEO John Flannery had said that target was "out of reach." Fines could reach €50K for each job not created.

Wednesday's Key Earnings
Abbott Laboratories (NYSE:ABT-1% posting in-line EPS figures.
Alcoa (NYSE:AA+4.9% AH amid rising prices, stock buyback.
Kinder Morgan (NYSE:KMI-0.6% AH following in-line earnings.
U.S. Bancorp (NYSE:USB+3.8% on higher rates, mortgage growth.

Today's Markets 
In Asia, Japan -0.8%. Hong Kong flat. China -2.9%. India closed.
In Europe, at midday, London flat. Paris +0.4%. Frankfurt +0.3%.
Futures at 6:20, Dow -0.2%. S&P -0.3%. Nasdaq -0.3%. Crude -1% to $69.08. Gold -0.1% to $1226.50. Bitcoin flat at $6513.
Ten-year Treasury Yield +3 bps to 3.21%

Today's Economic Calendar
8:30 Initial Jobless Claims
8:30 Philly Fed Business Outlook
9:00 Fed's Bullard: U.S. Monetary and Economic Policy
10:00 Leading Indicators
10:30 EIA Natural Gas Inventory
00:15 PM Randal Quarles: Economic Outlook
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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