Tuesday Morning Reads

Tuesday Morning Reads



Open Interest:





Tesla's Battery Day event

One of biggest events of the week is Tesla's (NASDAQ:TSLA) highly anticipated "Battery Day," which is expected to showcase innovations designed to keep the company's lead in electric vehicles. There is talk about a "million-mile battery" (before it can't hold a charge), as well as improved cell performance and cost savings, while other advances could see Tesla dominate additional industries reliant on energy storage. Bad news first? Tesla shares are off 3% premarket after Elon Musk tweeted "what we announce [today] will not reach serious high-volume production until 2022."

Tech tries to find footing after latest selloff

Nasdaq futures climbed 0.6% in overnight trading, while contracts tied to the Dow and S&P largely hugged the flatline, after global stocks hit the skids on Monday. There's quite a lot of nerves about the economic recovery amid a new set of lockdown restrictions in Europe, while Fed Chair Jay Powell kicks off a three-day testimony before Congress (see both below). Earnings also resume today as Nike (NYSE:NKE) reports its fiscal first-quarter results after the closing bell. Can markets break the September selloff cycle? Since 1937, the S&P 500 has declined 1% over the month, on average, while the Nasdaq Composite has seen an average fall of 0.5%.

'Path forward depends on policy actions'

Jerome Powell is set to testify with Treasury Secretary Steven Mnuchin today before the House Financial Services Committee as part of a three-day testimony to Congress over the response to COVID-19. "Many economic indicators show marked improvement," the Fed Chair said in prepared remarks. "Both employment and overall economic activity, however, remain well below their pre-pandemic levels, and the path ahead continues to be highly uncertain. The path forward will depend on keeping the virus under control, and on policy actions taken at all levels of government."
Go Deeper: CBO boosts federal debt projections, driven by pandemic effects.

Global vaccine plan gains momentum, U.S. not on board

An $18B initiative to ensure any future vaccine against COVID-19 is fairly shared throughout the world has secured the backing of 156 countries and territories, representing about 64% of the global population. Notably absent was the United States, which cited the involvement of the WHO for its lack of participation (it plans to withdraw from the organization by next July). Russia and China, which have both already issued emergency use licenses for COVID-19 vaccines, were also not on the list. The goal of COVID-19 Vaccines Global Access Facility, or COVAX, is to have 2B doses available by the end of 2021, while participating territories will be able to hedge themselves against the failure of any individual candidate.

U.K. recommends work from home

Just weeks after urging people to start returning to work, U.K. Prime Minister Boris Johnson called for people to work from home "if possible" and ordered all hospitality sites across England to start closing at 10 p.m. from Thursday. More than £50B was wiped off the value of U.K. shares on Monday in anticipation of the move, with travel firms, pubs and airlines among the worst hit. There are also fears of broader restrictions as new coronavirus infections swell across Europe. Madrid has asked the Spanish army for help in battling the recent surge, while the number of daily new coronavirus cases in the Netherlands topped 2,000 for the first time.

Deeper dive into the WFH model

Netflix (NASDAQ:NFLX) CEO Reed Hastings recently called remote work "a pure negative" and JPMorgan's (NYSE:JPM) Jamie Dimon warned of "a lot more damage by people staying home," but not everyone is seeing WFH in that light. Apple (NASDAQ:AAPL) CEO Tim Cook doesn't believe the company will "return to the way we were because we've found that there are some things that actually work really well virtually." In fact, Apple has created products including new Apple Watches and iPads that are launching on time this year, despite the need for most employees to work away from the office due to COVID-19. He still notes that remote work is "not like being together physically" and that impromptu meetings in the office could spark creativity.

Conflicting deal structure could threaten Oracle-TikTok takeover

While TikTok parent ByteDance (BDNCE) has said it will own 80% of new entity TikTok Global, Oracle (NYSE:ORCL) and Walmart (NYSE:WMT) have together declared ByteDance's ownership would be distributed to its U.S.-based investors and ByteDance itself would have no direct stake. President Trump did not comment on the conflicting accounts, but said the deal was "working its way through" and he wouldn't approve the transaction if ByteDance retains control of TikTok Global. "If we can save (TikTok), we will save it, and if we can't we will cut it off. We have to have total security," he told reporters.
Go Deeper: China signals its own reluctance to the deal through state-owned media.

Tiffany, LVMH will go to trial in January

A Delaware judge has expedited the trial date for Tiffany's (NYSE:TIF) lawsuit against LVMH (OTCPK:LVMHF), which backed out of a $16.2B takeover of the U.S. jeweler earlier this month. "We appreciate the court’s ruling today to expedite the process," said Tiffany Chairman Roger Farah. "A trial on Jan. 5, 2021, will hopefully lead to a ruling prior to the expiration of U.S. antitrust clearance on Feb. 3, 2021, and enable us to protect our company and our shareholders." LVMH has argued that a "material adverse effect" from the pandemic had hurt Tiffany’s business, while it couldn't complete the deal by the November closing date for fear of getting in the middle of a U.S.-France trade war.

What else is happening...

Nikola (NASDAQ:NKLA) details terms of Milton's split from the board.

Uber (NYSE:UBER) investors push for new self-driving strategy - Bloomberg.

DOJ ready to brief state AGs on Google (GOOGGOOGL) antitrust suit - WaPo.

Cisco (NASDAQ:CSCO) likely to appear on potential Chinese blacklist of U.S. firms - WSJ.

Activist Trian takes $870M stake in Comcast (NASDAQ:CMCSA).

American Airlines (NASDAQ:AAL) sets pilot training plans for 737 MAX return.

Today's Markets

In Asia, Japan +0.2%. Hong Kong -1%. China -1.3%. India -0.8%.
In Europe, at midday, London +0.4%. Paris +0.5%. Frankfurt +1.1%.
Futures at 6:20, Dow -0.1%. S&P +0.1%. Nasdaq +0.6%. Crude +1% to $39.93. Gold flat at $1909.80. Bitcoin -2.3% to $10463.
Ten-year Treasury Yield flat at 0.67%

Today's Economic Calendar

8:55 Redbook Chain Stores Sales
10:00 Existing Home Sales
10:00 Fed's Evans: Economic Outlook
10:00 Richmond Fed Mfg.
10:30 Powell Testifies Before the House Financial Services Committee
12:00 PM Fed's Barkin Speech
1:00 PM Results of $52B, 2-Year Note Auction
3:00 PM Fed's Bostic: "Cash-Based Consumers and the Digital Economy"

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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