Tuesday Morning Reads

Monday Morning Reads



Open Interest Changes:



U.S. stock futures rise, following gains in most equities markets around the world, amid optimism that the coronavirus curve is flattening. Dow futures advance 1.3%, Nasdaq gains 1.5% and S&P futures rise 1.2%. The 10-year Treasury yield remains flat at 0.75%. In overseas markets, the Stoxx Europe 600 rises 0.9% and the DAX gains 1.1%. In Asia, markets also ended the session in the green - the Hang Seng rose 0.6%, China’s CSI 300 rose 1.9% and the Nikkei 225 increased 3.1%. In the U.S., Q1 earnings season kicks off with JPMorgan Chase (NYSE:JPM), Wells Fargo (NYSE:WFC) and Johnson & Johnson (NYSE:JNJ). With most of the coronavirus-related restrictions not taking effect until mid-March, investors will be focusing on any forward-looking commentary.

China’s trade isn’t out of the woods yet

Though the world’s second-largest economy recorded a trade surplus of $18.5B in March, vs. a deficit of $7.1B in the first two months of the year, China will now be facing lower demand from the countries it exports to. "Uncertainties are on the rise and China’s foreign trade is encountering bigger difficulties," said Li Kuiwen, a customs spokesperson. Still, investors cheered the economic news. China’s CSI 300 Index closed up 1.9% and Japan’s Nikkei Index gained 3.1%. Hong Kong’s Hang Seng rose 0.5%.

Airline relief deal nears the finish line

Airline industry officials expect all major airlines to accept the terms for grants, with some announcements expected as early as today. The government has set identical terms for industry players and says it won't negotiate individually with airline managements. Those terms include a requirement that 30% of the funds allotted to each airline be repaid and the issuance of warrants with prices already locked in. The Treasury Department is not demanding compensation from small carriers receiving $100M or less in payroll support. If the $25B in grants is allotted as expected, the government could end up owning about 3.0% of American Airlines (NASDAQ:AAL), 2.3% of United Airlines (NASDAQ:UAL), 1.3% of JetBlue (NASDAQ:JBLU), 1% of Delta Air Lines (NYSE:DAL) and 0.6% of Southwest Airlines (NYSE:LUV).

Tesla pursues rent reductions amid pandemic

Facing the need for cost savings amid the global pandemic, Tesla (NASDAQ:TSLA) is approaching landlords in search of reduced rent, the WSJ reports. "As a result of the increasing restrictions on our ability to conduct business, we would like to inform you that we will be reducing our monthly rent obligations effective immediately," reads one email the company sent. The news follows last week's announcement that Tesla would slash pay and furlough employees who couldn't work from home.
Go deeper: Look at Tesla’s balance sheet.

India extends 1.3B-person lockdown until May 3

As widely expected, India is extending the world's biggest pandemic lockdown at least until May 3. The country's restrictions were set to end today, even as its confirmed case count crossed 10,000 and deaths hit 339 (low numbers compared to harder-hit countries, which experts caution may be due to low testing levels). Despite the extension of the restrictions, India has expressed an interest in at least partially restarting its manufacturing industry now rather than later.

The case for India investments weakens

The country’s economy was already weakening when the coronavirus hit, giving investors fewer reasons to buy Indian stocks and bonds, said BlackRock’s head of Asian credit, Neeraj Seth. "India entered the whole situation of COVID on a weaker footing," and the lockdown has put more pressure on the banking system, he told CNBC. BlackRock is cautious on Indian credit at the lower end of the spectrum, but fixed income investments could benefit as India’s central bank is expected to cut interest rates, he said.
Go deeper: Check ETF performance by country.

Exxon taps bond market for second time in a month

The oil giant raised $9.5B in debt on Monday, less than a month after issuing $8.5B, as it seeks to bolster its finances while the market is still receptive to issuers of new debt. In the latest offering, Exxon (NYSE:XOM) sold five different bonds with durations ranging from five to 31 years. The issue highlighted investor demand for the debt, as the offering was upsized from the $9B issue originally planned and Exxon was able to borrow at a lower price than the March deal.
Go deeper: Look into Exxon’s financials.

What else is happening...

Fed launches commercial paper funding facility today.

DOJ puts the heat on British American Tobacco (NYSE:BTI).

Disney (NYSE:DIS) enters new $5B credit agreement.

Roku (NASDAQ:ROKU) early Q1 numbers show growth turn.

Navistar (NYSE:NAVconserves cash.

Today's Markets
In Asia, Japan +3.1%. Hong Kong +0.56%. China +1.6%. India closed.
In Europe, at midday, London -0.37%. Paris -0.03%. Frankfurt +1.1%.
Futures at 6:00, Dow +1.3%. S&P +1.2%. Nasdaq +1.5%. Crude -1.6% to $22.06. Gold +0.1% to $1,763.40. Bitcoin +2.5% to $6,858.
Ten-year Treasury Yield flat at +0.75%

Today's Economic Calendar
8:30 Import/Export Prices
8:55 Redbook Chain Store Sales
11:05 Fed's Bullard: “COVID-19 Briefing”
12:30 PM Fed's Evans Speech

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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