Tuesday Morning Reads

Tuesday Morning Reads




Morning Charts:

Open Interest Changes

Seeking Alpha:

Just as earnings season comes to a close, retailers are set to light up the scoreboard. Reporting today are Home Depot (NYSE:HD), Kohl's (NYSE:KSS) and TJX Companies (NYSE:TJX), while Target (NYSE:TGT), Lowe's (NYSE:LOW), Macy's (NYSE:M) and BJ's (NYSE:BJ), as well as Nordstrom (NYSE:JWN), Gap (NYSE:GPS), L Brands (NYSE:LB) and Foot Locker (NYSE:FL) release results the rest of the week. Traders are particularly watching discounting trends and the impact from the ongoing U.S.-China trade war ahead of the critical holiday shopping period. While the broader retail industry has been relatively subdued, individual stock prices have diverged radically, with Macy's down 50% YTD and Target skyrocketing nearly 70%.
Go deeper: Harrison Schwartz writes the 'retail apocalypse' is far from over.

Futures edge higher

Equities posted fresh records on Monday, but closed little changed, as the Trump administration issued a new 90-day extension allowing U.S. companies to continue doing business with China's Huawei. The next catalyst for stock market movement is the flood of retailer earnings, and U.S. index futures are up about 0.3% before the results. About three-fourths of S&P 500 companies have already topped earnings estimates in their Q3 reports, but they are still expected to have posted an overall 0.5% decline in earnings, according to Refinitiv data.

Topping the biggest battery record

Tesla's (NASDAQ:TSLA) battery project with Neoen (OTC:NOSPF) in South Australia became "the world's largest battery" when it was completed two years ago, and now it's expanding by 50% to 150 megawatts. The storage site has already saved more than A$50M in its first year of operation, meaning that the A$66M venture is quickly on its way to paying for itself. Australian Energy Market Operator confirmed the system is much more rapid, accurate and valuable than a conventional steam turbine in a report published last year.
Go deeper: TickerSquare analyzes Tesla demand.

5G decision

FCC Chairman Ajit Pai announced his support Monday for a public auction to free up C-band spectrum, a key band currently used for delivering video content for next-generation 5G wireless networks. The news sent Intelsat's (NYSE:I) stock crashing 40%. Major satellite service providers, which hold existing C-band licenses, had proposed selling the spectrum privately to wireless carriers, arguing a private sale would make the spectrum available for 5G faster.
Go deeper: David Orr seemingly predicted the plunge weeks ago.

FedEx discontinues pension for new hires

Joining the growing ranks of large U.S. companies phasing out guaranteed retirement benefits, FedEx (NYSE:FDX) is closing its pension plan to new U.S. hires starting in 2020. The shipping giant instead will launch a new 401(k) plan at the start of 2021 with a higher company match (contributing up to 8% of employee salaries, if employees provide 6% of their salary). Just 22% of Fortune 50 companies and 11% of transportation companies offer pensions to new employees.
Go deeper: FedEx's weak free cash flow limits value creation, writes Chad Brand.

Trump doubles down on lower rates

"Just finished a very good & cordial meeting at the White House with Jay Powell of the Federal Reserve. Everything was discussed including interest rates, negative interest, low inflation, easing, Dollar strength & its effect on manufacturing, trade with China, E.U. & others, etc.," President Trump tweeted late Monday. "I protested fact that our Fed Rate is set too high relative to the interest rates of other competitor countries," adding that it should be lower than theirs. Trump has slammed the central bank dozens of times this year, calling Powell a "terrible communicator" and an enemy of the state.

Congress races to avoid government shutdown

The House will vote today on a stopgap bill aimed at preventing a government shutdown at midnight on Thursday. While Congress passed a two-year agreement to set budget levels and suspend the U.S. debt ceiling earlier this year, lawmakers have failed to come to terms on where to allocate the money amid disagreements over immigration and military funding. The Senate and White House will likely support the continuing resolution, hoping to avoid another partial government shutdown like the record-long one that began last December.

Vaping ban stalls

A delay of rules that would restrict flavored e-cigarettes is a "Pyrrhic victory" for the industry right now, according to former FDA Commissioner Scott Gottlieb, but the longer the trends in teen vaping continue, the "more draconian the regulatory action" will be. President Trump had previously planned to meet with industry executives this week, citing a focus on health and jobs. Meanwhile, California is suing Juul (JUUL) over its marketing practices, alleging the company targeted teens and its age-verification system did not adequately vet customers.

Emissions fight escalates

California is taking further action, saying it will no longer purchase new vehicles for state government fleets from GM (NYSE:GM), Toyota (NYSE:TM) and Fiat Chrysler (NYSE:FCAU), as well as other automakers that have backed the Trump administration in a battle to strip the state of authority to regulate tailpipe emissions. Going forward, California's state agencies will chiefly purchase cars from Ford (NYSE:F), Honda (NYSE:HMC), Volkswagen (OTCPK:VWAGY) and BMW (OTCPK:BMWYY). The state also said it will immediately ban state entities from buying sedans powered by an internal combustion engine, with exemptions for certain public safety vehicles.

Vote of confidence for 737 MAX

Day 3 at the Dubai Air Show fared much better for Boeing (NYSE:BA), as the world's biggest planemaker received bids for 50 737 MAX jets amid forecasts of a potential December return for the grounded aircraft. Kazakhstan-based Air Astanta said it plans to purchase 30 737 MAX 8s, an undisclosed buyer purchased 10 MAX 10s, while Turkey's Sunexpress ordered 10 MAX 8 jets. Boeing this week will also present to the board of Southwest Airlines (NYSE:LUV), its largest 737 MAX customer, an overview of its plans to return the grounded 737 MAX to service. BA +0.8% premarket.

What else is happening...

Spotify (NYSE:SPOT) falls as Amazon (NASDAQ:AMZN) expands free music offering.

Legere resigns as T-Mobile (NASDAQ:TMUS) CEO; shoots down WeWork (WE) rumors.

Sony (NYSE:SNEbuys out AT&T (NYSE:T) from Game Show Network.

First strike at Canadian National Railway (NYSE:CNI) in a decade.

Strong demand sees Alibaba (NYSE:BABA) close books early in Hong Kong.

Airbnb (AIRB) may choose direct listing over IPO.

New York State's Attorney General is investigating WeWork (WE).

Today's Markets
In Asia, Japan -0.5%. Hong Kong +1.6%. China +0.9%. India +0.5%.
In Europe, at midday, London +1.3%. Paris +0.4%. Frankfurt +1%.
Futures at 6:20, Dow +0.2%. S&P +0.3%. Nasdaq +0.4%. Crude -0.9% to $56.61. Gold -0.3% to $1467.20. Bitcoin -4.2% to $8082.
Ten-year Treasury Yield flat at 1.82%Today's Economic Calendar
8:30 Housing Starts
8:55 Redbook Chain Store Sales
9:00 Fed's Williams Speech
10:00 Quarterly Services Report (Advance)
10:00 E-Commerce Retail Sales

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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