Tuesday Morning Reads

Tuesday Morning Reads



Open Interest:






Amazon expands retail empire with pharmacy

With Americans increasingly relying on getting their medicines via mail to avoid getting exposed to COVID-19, Amazon (NASDAQ:AMZN) is getting into the pharmacy business. How will it work? Doctors can send prescriptions directly to Amazon Pharmacy - which has tools to verify that a physician legitimately ordered each prescription - or patients can request a transfer from existing retailers. Amazon Prime customers will get free two-day delivery, while others can get free delivery within five days or pay $5.99 to upgrade to two-day delivery. The move had been anticipated for quite a while, given the many reported internal discussions and acquisition of PillPack in 2018, but the latest news is likely to shake CVS (NYSE:CVS), Walmart (NYSE:WMT), Rite Aid (NYSE:RAD) and Walgreens (NASDAQ:WBA).

Plenty of reasons for Musk to dance

Tesla (NASDAQ:TSLA) bulls are taking a victory lap after the EV automaker landed inclusion on the S&P 500 Index. "We believe the sustained profitability trajectory as evidenced in the September quarter was the final straw that got Musk & Co. into the S&P 500 this time around despite all the noise around tax credit boosts on the Street," writes analyst Dan Ives, calling the development a clear positive for shares. Investors seem to agree, with TSLA shares soaring 13% AH and tacking on nearly another $50B in market capitalization. It's massive: Due to the size of the addition, the S&P 500 Index Committee is seeking feedback on whether Tesla should be added all at once on the rebalance effective date or in two separate tranches.
Go Deeper: SpaceX's Dragon docks at International Space Station.

Airbnb files to go public

The pandemic has been extremely damaging to Airbnb's business, as well as the whole travel industry, but the vacation rental company still managed to eke out a profit last quarter of $219M. An S-1 filing (IPO prospectus) put an emphasis on building a community around its hosts and guests, as well as positioning that community as a differentiating factor from its competitors. COVID-19 is still going to make or break Airbnb over the next year, but the company is talking up the benefits of short-distance travel and long-term stays. It plans to trade on the Nasdaq under ticker "ABNB" and is seeking up to $1B in the listing (but that could just be a placeholder figure).

All-time highs

A minor pullback was seen overnight following a bumper session for U.S. stocks amid another set of upbeat results from Moderna's (NASDAQ:MRNA) COVID-19 vaccine trials. Dow and S&P 500 futures dipped 0.3%, while the Nasdaq rose 0.3% as Tesla (TSLA) soared on news that it would finally be added to the S&P 500 index. "Rotation" is still a word that's being tossed around on the Street, though it may be more like "catch-up," with so much money sitting on the sidelines. High-flying tech companies rose yesterday along with banks, retail, energy and travel, albeit with smaller gains, while the Dow Jones Industrial Average clinched its first all-time high since February, representing the fastest rebound from a bear market low since 1991 (193 trading days) .

Retail tsunami

While the Q3 earnings season is nearing an end, retail will light up the scoreboard this week, with investors keen on some figures and forecasts before the holiday season. Strong online demand is likely to have supported Walmart (WMT) when it reports results this morning, while Home Depot (NYSE:HD) is poised to see the effects of robust demand for goods as consumers spent more time at home. That story is likely to play out at Lowe's (NYSE:LOW) and Target (NYSE:TGT) - which report tomorrow - though a decline in foot traffic at Macy's (NYSE:M) could hit the retailer's sales on Thursday. Don't forget the latest U.S. retail sales report, which is also set to be published this morning. It's expected to increase for the sixth straight month due to steady job creation, a shift toward tangible goods and early holiday promotions.

Tech vs. Congress

It's only been three weeks since Facebook's (NASDAQ:FB) Mark Zuckerberg and Twitter's (NYSE:TWTR) Jack Dorsey testified in Congress, but the two executives are heading under the spotlight again this morning. In this round, the Senate Judiciary Committee will press the tech titans on "Censorship, Suppression, and the 2020 Election" in what's likely to be another multi-hour hearing of assorted grievances. The last hearing, by the Senate Commerce Committee, was about reforming Section 230 of the Communications Decency Act, but the pressing policy issue barely came up and morphed into ongoing complaints about bias on the platforms. Things may get hotter this time around as it's the first grilling of social media leaders since the election, with President Trump continuing to make claims of voter fraud to contest Joe Biden's victory.

Vaccine shelf life

More vaccine hopes were seen on Monday after Moderna (MRNA) announced its COVID-19 vaccine was nearly 95% effective in preventing the disease in patients from its late-stage trials. It's just a week after Pfizer (PFE) and BioNTech (NASDAQ:BNTX) reported similar results with their vaccine. Big difference: Moderna's candidate remains stable at 2° to 8°C (36° to 46°F), the temperature of a standard home or medical refrigerator, for 30 days, which could help concerns expressed over storage and distribution. Pfizer's (NYSE:PFE) vaccine must be stored frozen at negative 94 degrees Fahrenheit (-70° C), most likely needing dry ice (-109 degrees Fahrenheit) for shipment.
Go Deeper: Pfizer sets out pilot delivery program for COVID-19 vaccine.

Tougher coronavirus restrictions

Thanksgiving turkey with the extended family may end up in the deep fryer this year as governors and local leaders across the country imposed fresh measures to slow the spread of surging coronavirus infections. In New Jersey, Governor Phil Murphy announced stricter capacity restrictions for both indoor and outdoor gatherings, while the city of Philadelphia banned "indoor gatherings of any size in any location, public or private." Similar messages (and some mask mandates) were delivered in Michigan, Washington, North Dakota, Ohio and Iowa, while California took it a step further, ordering many non-essential businesses to close in 41 out of the state's 58 counties. Talks on federal pandemic relief legislation have been stalled for months and still show no signs of budging in Congress.

What else is happening...

Berkshire Hathaway (BRK.ABRK.Bloads up on pharma, trims bank holdings.

Costco (NASDAQ:COST) fires off $10 per share special dividend.

NXP (NASDAQ:NXPI) partners with Amazon (AMZN) on connected cars.

Wirecard (OTCPK:WCAGY) offloads core European business to Santander (NYSE:SAN).

Alexa (AMZN) now predicts user requests before they are even asked.

Hulu (NYSE:DIS) raises Live TV price again, up 18% to $64.99/month.

Wednesday's Key Earnings

Baidu (NASDAQ:BIDU) +1.9% announcing deal for JOYY China streaming.
JD.com (NASDAQ:JD) -7.4% despite Q3 beats with 29% revenue growth.

Today's Markets

In Asia, Japan +0.4%. Hong Kong +0.1%. China -0.2%. India +0.7%.
In Europe, at midday, London -0.5%. Paris -0.1%. Frankfurt -0.1%.
Futures at 6:20, Dow -0.3%. S&P -0.3%. Nasdaq +0.3%. Crude unchanged at $41.35. Gold flat at $1888.30. Bitcoin +2.8% to $16713.
Ten-year Treasury Yield -1 bps to 0.89%

Today's Economic Calendar

8:30 Retail Sales
8:30 Import/Export Prices
8:55 Redbook Chain Store Sales
9:15 Industrial Production
10:00 Business Inventories
10:00 NAHB Housing Market Index
1:00 PM Fed's Bostic Speech
1:25 PM Fed's Daly Speech
2:00 PM Fed's Williams Speech
2:35 PM Fed's Daly Speech
2:35 PM Fed's Bostic Speech
2:35 PM Fed's Rosengren Speech
2:50 PM Fed's Daly Speech
2:50 PM Fed's Rosengren Speech
3:00 PM Fed's Barkin Speech
4:00 PM Treasury International Capital

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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