Thursdays Market Prepper

Thursdays Market Prepper










A record-setting equity rally appears to be running out of steam, with unconvincing U.S. tax cut plans and caution setting in before today's ECB meeting. The bank is expected to keep ultra-loose monetary policy steady ahead of a series of major elections in Europe, but investors will look to Mario Draghi's press conference for any tapering hints. Pressure has been building on the ECB as the eurozone economy picks up.


The Bank of Japan stuck to the markets' script at its policy meeting and kept monetary settings unchanged, but raised its forecast for 2017 domestic growth. It came with the lowering of inflation expectations and confirmation to continue with QE until prices meet the 2% target, stating it will "adjust policy if needed to maintain momentum."

Taxes! The White House proposed a series of broad cuts on Wednesday, with a one page plan that was light on specifics. It included a 15% tax rate for all businesses, lower individual rates, a bigger standard deduction to benefit middle-income households and the repeal of the estate and alternative minimum taxes.

A divided House Financial Services Committee on Wednesday also debated the pros and cons of the Financial CHOICE Act, a Republican proposal to replace much of Dodd-Frank. Democratic members of the committee opposed to the bill petitioned the committee to have their own hearing before a vote, which is expected to take place on May 2.

The Canadian dollar and Mexican Peso surged against the greenback overnight after President Trump agreed not to terminate NAFTA "at this time." The three countries will begin "swiftly" renegotiating the free trade pact, according to a White House statement. It comes hours after reports stated the Trump administration had submitted a draft executive order that would have removed the U.S. from the treaty.

White House advisors and officials, including EPA Administrator Scott Pruitt and Energy Secretary Rick Perry, will meet today to discuss whether the U.S. should remain in the Paris climate agreement. Global companies, ranging from BP to Microsoft (NASDAQ:MSFT) and General Mills (NYSE:GIS) to Walmart (NYSE:WMT), sent a letter to President Trump yesterday urging him to stay in the deal to protect their competitiveness.

"There's an obvious crisis in EU-Turkey relations," said European Parliament member Kati Piri, who handles relations with Ankara. "The EU should officially suspend the accession talks if the constitutional changes are implemented." The comments overshadow the latest crackdown by President Erdogan's government, arresting more than 1,000 people and issuing warrants for thousands more.

Faced with growing criticism from the bloc over its handling of a major crisis, Venezuela is quitting the Organization of American States. Foreign Minister Delcy Rodriguez branded the hemisphere's oldest regional alliance an "interventionist coalition" led by Washington. The announcement will raise international tension over Venezuela, where unrest has left 28 people dead this month.

"The President's approach aims to pressure North Korea... by tightening economic sanctions and pursuing diplomatic measures with our allies and regional partners," top Trump administration officials told Wednesday's rare White House briefing that included all 100 U.S. senators. "Kim Jong-Un is clearly in a position to threaten Hawaii today, in my opinion," declared Adm. Harry Harris, the chief of U.S. Pacific Command.


China is seriously concerned by the second U.S. national security trade probe into imports of aluminum and hopes to resolve the dispute through talks, according to Commerce Ministry spokesman Sun Jiwen. "It's very, very dangerous, obviously, from a national defense point of view" only to have one producer of a material needed for defense, U.S. Commerce Secretary Wilbur Ross declared, citing applications in armor and advanced aircraft. Related tickers: AA, ACH, CENX, CSTM, FOIL, JJU, KALU, RS

Samsung Electronics's first quarter profits were the best since 2013 due to solid earnings from its memory chip segment. Shares initially dropped 1.8% after Samsung (OTC:SSNLF) said it wouldn't be introducing a holding company structure - rejecting demands from Elliott Management - but later recovered to trade 2.4% higher. It also announced a buyback worth 2.3T won ($2.03B).

Nintendo posted a cheerful business outlook for its fiscal year, forecasting that strong Switch sales would lift profits to seven-year highs. The Japanese gaming giant expects to sell 10M consoles in the current fiscal year (it posted solid March sales of 2.74M). Nintendo's (OTCPK:NTDOY) Wii U, the Switch's unpopular predecessor which launched in 2012, had lifetime sales of 13.6M units.

European earnings roundup: Deutsche Bank (NYSE:DB) -2.4% premarket as trading revenues trailed peers in the first quarter. Lloyds's (NYSE:LYG) profits doubled despite PPI and fraud payouts, sending shares up 2.8%. Generic competition resulted in slipping quarterly sales at AstraZeneca (NYSE:AZN). Outpacing Ericsson (NASDAQ:ERIC) in Q1, Nokia (NYSE:NOK) shares are 6.7% higher, as network markets improved. Airbus's (OTCPK:EADSY) Q1 profit slid on production setbacks, but the planemaker confirmed its 2017 guidance.

As it tries to recover from the passenger-dragging video that went viral, United Airlines (NYSE:UAL) is instituting 10 policy changes when it comes to bumping, overbooking flights and improving customer service. The carrier will now offer up to $10,000 to customers who volunteer to give up their seats. In the incident involving David Dao, he and other passengers were offered $800.

Looking to keep up with its competitors, American Airlines (NASDAQ:AAL) wants to raise pay for its pilots and flight attendants. Hourly pay for American's 15,000 pilots is about 8% lower than the highest rates Delta (NYSE:DAL) and United (UAL) set in recent labor agreements. Hourly pay for its 26,000 flight attendants is about 4% lower than at those rivals.

Trading in shares of Japan's Takata (OTCPK:TKTDY) was suspended today on reports the embattled air bag supplier was considering filing for bankruptcy protection and would eventually be liquidated. The plan would call for Key Safety Systems to sponsor the turnaround, according to Nikkei, spending nearly ¥200B ($1.8B) to create a company that would buy Takata's operations.

A Chinese money market fund set up as a repository for leftover cash from online spending has emerged as the world's biggest, with $165.6B under management. Alibaba's (NYSE:BABA) four-year-old Yu'e Bao fund - which means leftover treasure - has overtaken JPMorgan's U.S. Government Money Market Fund (MUTF:MJGXX), which has $150B. Yu'e Bao pays 3.93%.

The financial industry is wading back into the Brexit debate, warning it may soon begin shifting jobs from London and lobbying the government not to curb access to foreign talent. Deutsche Bank's (DB) top compliance executive said some 4,000 jobs could be moved elsewhere in the EU, while Barclays (NYSE:BCS) CEO Jess Staley said he would pull the trigger on relocation plans within six months.

Archer Daniels Midland has replaced the leader of its global trading desk, as it sheds traders around the world amid a global grains glut that has squeezed profits. Gary McGuigan, most recently managing director of global trade at ADM, will succeed Gary Towne as president of the desk, which opened in Switzerland in 2015 to oversee the company's supply network.

Sony Pictures may be getting closer to a replacement for Michael Lynton, with former Fox Networks Group (NASDAQ:FOX) chief Tony Vinciquerra moving into pole position to lead the studio. That would mean a boss with more TV experience than film, Variety reports. Last month, reports tied CEO Kevin Tsujihara to Sony (NYSE:SNE) interviews, though Warner Bros. (NYSE:TWX) said he "wasn't interviewed and isn't going anywhere."

Google's servers in Cuba have gone live, making it the first foreign internet company to host content within the long-cut-off country. Instead of having to travel the long distance through a submarine cable, which currently connects via Venezuela, Cubans will now be able to access the internet through a local Google (GOOG, GOOGL) server. The island still has the lowest level of internet connectivity in the western hemisphere.

Wednesday's Key Earnings
Amgen (NASDAQ:AMGN) -3.1% AH with slipping revenues.
Anthem (NYSE:ANTM) +3.8% following Q1 beat, premium warnings.
Boeing (NYSE:BA) -1% following a revenue miss.
Las Vegas Sands (NYSE:LVS) -1.3% AH despite topping expectations.
PayPal (NASDAQ:PYPL) +5.6% AH on higher processing volumes.
PepsiCo (NYSE:PEP) -0.7% recording lower margins.
Procter & Gamble (NYSE:PG) -2.5% as sales disappointed.
Twitter (NYSE:TWTR) +7.9% accelerating growth.
United Tech (NYSE:UTX) +1.1% reaffirming its outlook.

Today's Markets
In Asia, Japan -0.2%. Hong Kong +0.5%. China +0.4%. India -0.3%.
In Europe, at midday, London -0.6%. Paris -0.3%. Frankfurt -0.2%.
Futures at 6:20, Dow flat. S&P flat. Nasdaq flat. Crude -0.9% to $49.19. Gold +0.1% to $1265.20.
Ten-year Treasury Yield flat at 2.31%

Today's Economic Calendar
8:30 Durable Goods
8:30 Initial Jobless Claims
8:30 International trade in goods
8:30 Retail Inventories
8:30 Wholesale Inventories
9:45 Bloomberg Consumer Comfort Index
10:00 Pending Home Sales
10:30 EIA Natural Gas Inventory
11:00 Kansas City Fed Mfg Survey
1:00 PM Results of $28B, 7-Year Note Auction
3:00 PM Farm Prices
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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