Tuesday Morning Reads

Tuesday Morning Reads



Open Interest:




September has already seen some volatile moves for markets and tonight's highly anticipated debate between President Trump and Joe Biden may go some way in providing clarity for investors. On the economic front, Trump has doubled down on tax cuts and deregulation, while Biden wants to raise corporate taxes and restore relationships with economic allies. Tariffs, trade and infrastructure are also likely to be discussed, while either one of them has to manage the country's attempt to rebound from its sharpest economic contraction on record due to COVID-19. "The debate may not see an immediate reaction per se, but where you might see a reaction is in the post-debate polling data," if it shows Biden's lead over Trump narrowing or widening, said Rebecca Felton, senior market strategist at RiverFront Investment Group.

Stimulus talks continue

U.S. stock index futures largely hugged the flatline overnight after House Democrats released a $2.2T coronavirus relief proposal (that would restore the $600 weekly jobless benefit), though the figure remains above what Senate Republicans have said they would accept. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin have agreed to continue talks again today. Investors are also awaiting the most recent gauge of U.S. consumer confidence, which will be out at 10 a.m. ET, while Micron (NASDAQ:MU) will report earnings after the closing bell. Meanwhile, the number of confirmed global deaths from COVID-19 topped the grim milestone of 1M on Monday evening, according to Johns Hopkins University, almost 10 months after the disease first emerged in Wuhan, China.

Brexit is back

The final round of Brexit talks kick off today before a self-imposed deadline for reaching a trade agreement by Oct. 15. The discussions are intended to bridge gaps on EU boats' access to U.K. fishing waters and the amount of support that governments are allowed to give businesses. Lurking in the background is the U.K.'s Internal Market Bill, which is still making its way through parliament, but includes clauses that override parts of the Brexit withdrawal treaty. The EU has threatened to take legal action if the U.K. doesn't drop the bill, while Boris Johnson sees the legislation as a safety net should the EU abuse the treaty and "put Northern Ireland in an economic chokehold."

Shift to renewables

There's a growing divide between state-backed companies and oil majors that have helped shape the modern energy industry. Attacking their shift towards renewables, Russia's Rosneft (OTCPK:RNFTF) lashed out at BP (NYSE:BP) and Royal Dutch Shell (RDS.ARDS.B) for creating an "existential crisis" for oil supplies. "I think that to go away from your core business, which is what they are doing, somebody will need to step in... somebody will need to take that responsibility," Rosneft's Didier Casimiro told the Financial Times Commodities Global Summit. "It is an existential threat for supply. It is an existential threat for price volatility... we will have a [supply] crunch, price volatility, and yes higher prices."
Go Deeper: BP holds a 20% stake in Rosneft.

Another Musk enterprise to go public

"We will probably IPO Starlink (STRLK), but only several years in the future when revenue growth is smooth & predictable," Elon Musk wrote in a tweet. "Public market does *not* like erratic cash flow haha." The full Starlink network, also known as a "constellation," would consist of 11,943 satellites that fly in low Earth orbit and beam high-speed internet to anywhere on the planet. Musk estimates that Starlink could bring in revenue of $30B a year - or about 10x the highest annual revenue SpaceX (SPACE) expects from its core rocket business - and could pave the "way for SpaceX to generate revenue that can be used to develop more and more advanced rockets and spaceships."
Go Deeper: Musk says Tesla should be valued by sustainable energy acceleration.

Will GM's deal with Nikola still close tomorrow?

"Our transaction with Nikola (NASDAQ:NKLA) has not closed," a GM spokesperson said Monday in an email. "We are continuing our discussions with Nikola and will provide further updates when appropriate or required" (the deal was expected to close by Sept. 30). Compare that to a statement from GM last week, which said it remained committed to the agreement despite a damning report from short seller Hindenburg Research that detailed fraud allegations. The recent pact calls for GM to build Nikola's Badger electric pickup with its proprietary Ultium batteries and provide fuel cells for the Badger and Nikola's semitrucks.
Go Deeper: Two women file sexual abuse complaints against Nikola founder.

LVMH countersues over failed merger

Last week, a Delaware judge expedited the trial date for Tiffany's (NYSE:TIF) lawsuit against LVMH (OTCPK:LVMHF) for backing out of the $16.2B takeover. Now LVMH has countersued, saying the original agreement had no pandemic carve-out under the material adverse effects, which allows LVMH to walk away. "The pandemic's disruption to the luxury industry and to Tiffany in particular will persist well into 2021 at a bare minimum," said LVMH's complaint. "Tiffany is particularly ill-suited for the challenges ahead."

The next big Indian super-app

Walmart (NYSE:WMT) is in talks with Tata Group for a potential $20B-25B investment in the Indian company's upcoming super-app business, Mint reports. The two companies reportedly are likely to jointly run the new digital platform, which will offer products and services including food delivery and bill payment, and more foreign investors may be brought in. The news comes as Reliance Industries raised over $20B from investors including Facebook (NASDAQ:FB) and Google (GOOGGOOGL) by selling stakes in its digital business Jio Platforms.

What else is happening...

FDA puts partial clinical hold on Inovio's (NASDAQ:INO) COVID-19 vaccine study.

Abbott Labs (NYSE:ABT) climbs on rapid coronavirus test shipments.

JPMorgan's (NYSE:JPM) consumer unit to WFH until 2021 - Bloomberg.

EPA chief rips California's plan to ban new gas-powered cars

Former Amazon (NASDAQ:AMZN) manager made $1.4M from insider trading.

Nokia (NYSE:NOK) signs 5G deal with Britain's BT (OTCPK:BTGOF).

Today's Economic Calendar

In Asia, Japan +0.1%. Hong Kong -0.9%. China +0.2%. India flat.
In Europe, at midday, London -0.6%. Paris -0.2%. Frankfurt -0.4%.
Futures at 6:20, Dow flat. S&P flat. Nasdaq -0.1%. Crude -0.7% to $40.32. Gold +0.3% to $1888.50. Bitcoin -1% to $10773.
Ten-year Treasury Yield flat at 0.65%

Today's Economic Calendar

8:30 International trade in goods (Advance)
8:30 Retail Inventories (Advance)
8:30 Wholesale Inventories (Advance)
8:55 Redbook Chain Store Sales
9:00 S&P Corelogic Case-Shiller Home Price Index
9:15 Fed's Williams Speech
9:30 Fed's Harker: “Machine Learning”
10:00 Consumer Confidence
11:40 Fed's Clarida: "Future Considerations for Treasury Markets Resilience"
1:00 PM Fed’s Quarles Speech
1:00 PM Fed's Williams Speech
3:00 PM Fed’s Quarles: “Financial Stability”

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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