Tuesday Morning Reads

Tuesday Morning Reads



Open Interest Changes:



The central bank's Secondary Market Corporate Credit Facility will begin purchases today of eligible exchange-traded funds invested in corporate debt, seeing the method as a fast way to direct money into the credit markets. It's a historic milestone for the Fed, which hasn't yet bought any ETFs. The program, managed by BlackRock (NYSE:BLK), centers around investment grade corporate bonds, though some will be high-yield. Another Fed facility designed to buy debt directly from issuers, the Primary Market Corporate Credit Facility, is set to launch "in the near future."
Go deeper: Frenzy of corporate debt offerings.

Ahead of the open

Another mixed day may be in store on Wall Street amid optimism about an economic recovery and fears about a second wave of coronavirus infections (Dr. Fauci will testify before the Senate at 10 a.m.). Pointing to bigger gains overnight, U.S. stock index futures have now inched closer to the flatline, up 0.2%. On the trade front, President Trump said he opposed renegotiating the U.S.-China Phase One deal, while Beijing announced a new list of 79 American products eligible for waivers from retaliatory tariffs.

Aviation industry warning

"Air traffic levels will not be back to 100% by September. They won't even be back to 25%. Maybe by the end of the year we approach 50%," Boeing (NYSE:BA) CEO Dave Calhoun said in an interview with NBC to be aired today. "So there will definitely be adjustments that have to be made on the part of the airlines." Asked by Today show host Savannah Guthrie if a major airline might have to fold, Calhoun replied, "Yes, most likely." Related tickers: AALALGTALKDALFRNTHAJBLULUVSAVEUAL

Largest solar project in the U.S.

The Department of the Interior has given final approval for Berkshire Hathaway's (BRK.ABRK.B) $1B solar project in Nevada that could power 260K households, enough to cover the entire residential population of Las Vegas. When finished, the 690 MW Gemini Solar Project would become the world's eighth largest solar power facility in the world, spanning some 7,100 acres of federal land. The developers aim to build the project in two phases over 28 months, with the first portion coming online in early 2021 and final facility completion as early as 2022.

Shale pioneer considers bankruptcy

Chesapeake Energy (NYSE:CHK) does not expect to be in compliance with financial covenants beginning in Q4 and "management has concluded that there is substantial doubt about the company's ability to continue as a going concern." It's the second such warning by the company since November. This quarter's review of the value of Chesapeake's untapped oil and gas reserves is likely to show a decline due to its distressed finances, reducing its ability to borrow against those assets.

Tesla ignores local authorities

Tesla (NASDAQ:TSLA) restarted production yesterday in Fremont against Alameda County rules, ratcheting up a dispute that has received national coverage. "I will be on the line with everyone else. If anyone is arrested, I ask that it only be me," stated Elon Musk. Alameda's Public Health Department said it's addressing the matter with the same phased approach it uses for other businesses that have violated the order in the past. As for Musk, he didn't end up in handcuffs.

Branson cashes in part of space venture

Looking to shore up its other travel and tourism businesses, Richard Branson's Virgin Group plans to sell as much as 12% (worth around $500M) of space-tourism venture Virgin Galactic (NYSE:SPCE). Last Month, Virgin Australia filed for bankruptcy, while U.K.-based Virgin Atlantic is asking for financial assistance from the U.K. government. Other businesses, such as a new Virgin cruise-line venture and a U.S. hotel group, have also been whacked by the coronavirus pandemic.

Sub-zero in the U.K.

Britain could be headed toward negative interest rates at upcoming Bank of England monetary policy meetings, declared Deputy Governor for Monetary Policy Ben Broadbent. "The committee are certainly prepared to do what is necessary to meet our remit with risks still to the downside," he told CNBC. Besides two previous rate cuts, the BOE has announced £200B of fresh quantitative easing, bringing its bond buying program to a total of £645B.

Vodafone keeps dividend

Vodafone (NASDAQ:VOD+5.4% premarket after meeting estimates with a 2.6% rise in full-year core earnings to €14.9B, though it pulled guidance due to coronavirus uncertainty. "We are experiencing a direct impact on our roaming revenues from lower international travel," according to the company, "however, we are seeing significant increases in data volumes and further improvements in loyalty." Vodafone also maintained its full-year dividend at €9.00 a share after cutting the payout a year ago to shore up its balance sheet.

Latest move against disinformation

Twitter (NYSE:TWTR) is beginning to label tweets that contain "disputed or misleading" information about the coronavirus and the COVID-19 pandemic. Some tweets may simply come with a linked label directing users to additional information; other tweets may be covered entirely by a warning label that will say "that the information in the Tweet conflicts with public health experts' guidance before they view it." The potential remedies may also include removal of the information.

What else is happening...

Over-the-air updates for Ford's (NYSE:F) Mustang Mach-E.

BlackRock's (NASDAQ:BL) largest shareholder sells 22% stake.

Hard times in hospitality has Hyatt (NYSE:Hlay off 1,300.

Toyota (NYSE:TM) sees profit dropping 80% in 2020.

Saudi Aramco's (ARMCO) Q1 net profit tumbles 25%.

General Mills (NYSE:GIS) lifts outlook on at-home demand.

WeWork (WE) directors seek right to continue SoftBank (OTCPK:SFTBY) fight.

Paul Tudor Jones has 1-2% of assets in Bitcoin (BTC-USD).

Monday's Key Earnings
Energy Transfer (NYSE:ET+0.7% cutting 2020 capex by another $400M.
Hertz (NYSE:HTZ-2.8% AH after liquidity update, earnings.
Simon Property Group (NYSE:SPG+4.6% AH reopening 89 properties.
Tilray (NASDAQ:TLRY-5.3% AH as losses piled up.
Under Armour (NYSE:UAA-9.7% warning of a sharp revenue decline.

Today's Markets
In Asia, Japan -0.1%. Hong Kong -1.5%. China -0.1%. India -0.6%.
In Europe, at midday, London +1%. Paris -0.3%. Frankfurt +0.3%.
Futures at 6:20, Dow +0.2%. S&P +0.2%. Nasdaq +0.2%. Crude +5.6% to $25.48. Gold +0.5% to $1706.50. Bitcoin -0.2% to $8785.
Ten-year Treasury Yield flat at 0.72%

Today's Economic Calendar
6:00 NFIB Small Business Optimism Index
8:30 Consumer Price Index
8:55 Redbook Chain Store Sales
9:00 Fed's Bullard: “The Federal Reserve's Outlook for Testing Times”
10:00 Fed's Harker Speech
10:00 Randal Quarles to testify before the Senate Banking Committee
1:00 PM Results of $32B, 10-Year Note Auction
2:00 PM Treasury Budget
5:00 PM Fed's Mester 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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