Tuesday Morning Reads

Tuesday Morning Reads



Todays Top Open Interest Changes:

Morning Charts:


Board members of Renault (OTCPK:RNLSY) are said to be meeting over the next few days with a goal of making a decision early next week on whether to go ahead with Fiat Chrysler (NYSE:FCAU) merger talks. FCA pitched a finely balanced merger of equals on Monday to create the world’s third-biggest automaker that would "sell approximately 8.7M vehicles annually." There would be no plant closures as a result of the tie-up, while the deal would provide an opportunity to lead in the development of electric and autonomous vehicles. An open question is whether Fiat would ultimately join the Nissan-Renault-Mitsubishi Alliance.

J&J heads to court in opioid case

The state of Oklahoma today will seek billions of dollars from Johnson & Johnson (NYSE:JNJ), while Teva Pharmaceutical (NYSE:TEVA) avoided trial after agreeing on Sunday to pay $85M but denied "any wrongdoing." Oklahoma AG Mike Hunter has accused the two drugmakers, along with OxyContin maker Purdue Pharma, of carrying out deceptive marking campaigns that downplayed opioids' addictive risks while overstating their benefits. Purdue Pharma resolved claims in March for $270M.

Futures drift lower

U.S. stock index futures are pointing to slight losses following Memorial Day weekend, with the DJIA down 27 points as caution prevailed over the fate of trade talks between Washington and Beijing. On Monday, President Trump said the U.S. was "not ready" to make a deal with China, before adding that he expected one "sometime in the future." Asia stocks booked gains, however, as investors bet on fresh stimulus from Beijing following consecutive months of dismal economic data.

European elections

European markets and the euro were little changed at the $1.12 level following European parliamentary elections, which saw some anti-EU and nationalist parties make significant gains - landing about 23% of the seats in parliament - but indicated that pro-EU parties had largely held their ground. While this will inevitably give smaller parties more leverage and the effects may be pronounced on environmental rules, trade liberalization and tech regulation, it won't be a revolution. "The gains are simply too small and it does not look like the parties are set to unite themselves more than they did in the previous parliament," said Bert Colijn, senior eurozone economist at ING.

Promises of a firm Brexit date

The contest to replace Theresa May as U.K. prime minister has begun, with former foreign minister Boris Johnson the clear front-runner in a field of more than a dozen candidates. "We will leave the EU on October 31, deal or no deal," he told an economic conference in Switzerland. Electing a new Conservative Party leader is a two-stage process. Starting the week of June 10, the party's 300 or so members of Parliament will whittle down the field of candidates to two through successive rounds of voting. After that, the party's rank-and-file members will decide which of those two finalists gets to be leader.

More trade deal talk

Speaking at a press conference with Prime Minister Shinzo Abe, President Trump said he hoped to announce a trade deal with Japan "probably in August." "When I talk about a security threat, I talk about a balance sheet," he added, describing the U.S.'s trade deficit with Japan (which stood at $56.8B in 2018) as "unbelievably large." Separately, Canada has taken a first step toward ratifying USMCA after the U.S. struck deals on May 17 to lift tariffs on steel and aluminum imports.

Box office magic for 'Aladdin'

Disney's (NYSE:DIS) live action remake of the 1992 animated classic Aladdingrabbed the top spot of the domestic box office during the U.S. holiday weekend, hauling in an estimated $112.7M. Globally, the movie drew in $207.1M over the three-day weekend, excluding Monday, further propelling the so-called Disney renaissance. The studio's Avengers: Endgame also continued its record-setting haul in third place, putting it about $100M behind the worldwide total of Avatar, the top-grossing movie of all time.

Another Alibaba listing

Alibaba (NYSE:BABA) is reportedly considering raising as much as $20B through a listing in Hong Kong, lining up a second blockbuster deal following its 2014 record $25B float in New York. The follow-on share sale would provide Alibaba with additional capital to fund its new initiatives, like cloud computing and Hema supermarkets, and comes as founder Jack Ma prepares to step down as chairman in September. A Hong Kong listing would also give mainland investors their first direct access to one of China’s biggest success stories via the stock connect trading link between Hong Kong, Shanghai and Shenzhen.

Crypto fever

Facebook (NASDAQ:FB) is planning to release its cryptocurrency, internally called GlobalCoin, in about a dozen countries during the first quarter of 2020, according to the BBC. CEO Mark Zuckerberg reportedly met with Bank of England Governor Mark Carney in April to discuss the crypto, and also spoke with U.S. Treasury officials regarding regulatory issues and firms such as Western Union (NYSE:WU) to discuss transferring funds. Plans for the crypto comes as Bitcoin (BTC-USD) rallies near $9,000 (up by about 120% YTD).

'Sports Illustrated' sold for $110M

More than a year after putting it on the block, Meredith (NYSE:MDP) has offloaded Sports Illustrated to Authentic Brands for $110M, but that doesn't mean the crown jewel of the publishing world is leaving the family. Meredith will continue to publish the print magazine, manage its website, and will still be responsible for advertising, video and social media. Authentic Brands, meanwhile, will seek licensing deals that could slap the Sports Illustrated name on everything from consumer goods, like apparel, to the emerging sports gambling marketplace.

What else is happening...

True real estate beauty is embedded in its financial performance, says contributor Christopher Volk.

European Commission may whack Italy with €3B fine.

Euronext (OTCPK:EUXTF) victory as Nasdaq (NASDAQ:NDAQpulls out of Oslo Bors battle.

Deutsche Bank's (NYSE:DB) investment banking head may get the boot.

African swine flu has these stocks on watch.

Completed Saudi sales boon to U.S. defense industry.

Blastoff! SpaceX (SPACEraised over $1B in six months.

ConocoPhillips (NYSE:COP) sees weak LNG prices as short-term issue.

More pressure on Walmart (NYSE:WMT) ahead of annual meeting

Today's Markets 
In Asia, Japan +0.4%. Hong Kong +0.4%. China +0.6%. India +0.2%.
In Europe, at midday, London -0.1%. Paris -0.3%. Frankfurt -0.3%.
Futures at 6:20, Dow -0.2%. S&P -0.3%. Nasdaq -0.2%. Crude +0.9% to $59.13. Gold flat at $1283.10. Bitcoin -0.4% to $8679.
Ten-year Treasury Yield -4 bps to 2.29%

Today's Economic Calendar
9:00 S&P Corelogic Case-Shiller Home Price Index
9:00 FHFA House Price Index
10:00 Consumer Confidence
10:30 Dallas Fed Manufacturing Survey
11:30 Results of $40B, 2-Year Note Auction
1:00 PM Results of $41B, 5-Year Note Auction

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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