Tuesday Morning Reads

Tuesday Morning Reads






Seeking Alpha

Yields take hold of stocks again

The broader market is pointing to a slightly higher open on Wall Street, but Treasury yields are pressuring tech shares again. The S&P (SPXSPY) and Dow (INDUDIA) futures are up, but the Nasdaq 100 futures (NDX:IND) are losing ground.

The 10-year Treasury yield, which ramped up yesterday, is now up another 5 basis points to 1.77%. It's now up to the highest level since last January. The selloff in bonds has come with a combination of optimism over the U.S. vaccine rollout and the possibility of an infrastructure bill providing more stimulus to the economy.

Rupert Thompson, chief investment officer at wealth manager Kingswood, told the Financial Times that the “massive” scale of stimulus has caused “considerable nervousness over inflation and has been behind the recent sell-off in government bonds.”

Financials (NYSEARCA:XLF) are recovering, up about 1% premarket, as it looks like the U.S. banks have avoided the worst of the fallout from the Archegos collapse.

Goldman Sachs and Morgan Stanley were quick off the mark to sell shares on Friday. But Wells Fargo may have more ViacomCBS shares to sell.

Wells Fargo shopping shares

Wells Fargo (NYSE:WFC) may be shopping a large block of ViacomCBS (VIACVIACA), CNBC's David Faber said, citing people familiar.

Wells Fargo executed five block trades valued at a combined $2.14B, according to a Bloomberg report. The bank was trying to sell a block of 18 million ViacomCBS Inc. shares at $48 apiece before the market opened today, the report noted.

According to Bloomberg, Wells Fargo also offered block sales in Baidu Inc. (NASDAQ:BIDU), Farfetch (NYSE:FTCH), Vipshop (NYSE:VIPS) and iQIYI (NASDAQ:IQ). (57 comments)

Credit Suisse may be down $4B

Credit Suisse (NYSE:CS) reportedly lost between $3B and $4B due to the Archegos Capital liquidation, FT reported earlier, citing two people close to the bank.

Credit Suisse earlier commented that the size of the could be "highly significant." The stock is up nearly 2% in Zurich after a 12% plunge Monday.

“While at this time it is premature to quantify the exact size of the loss resulting from this exit, it could be highly significant and material to our first-quarter results, notwithstanding the positive trends announced in our trading statement earlier this month,” Credit Suisse said in a statement. (55 comments)

Tesla snags semi order

Tesla (NASDAQ:TSLA) has secured an order for 10 electric semi-trucks and 2 Megachargers, according to Electrek. The deal includes about $2M in support from the U.S. government.

The Mobile Source Air Pollution Reduction Review Committee (MSRC) awarded California-based logistics company MHX Leasing funds to deploy the ten Tesla Semi class 8 trucks and two overhead electric cranes. MHX won the grant from MSRC's Zero & Near-Zero-Emission Trucking-to-Warehouse, Distribution, & Intermodal Facilities in Riverside & San Bernardino Counties grant program. That program is part of a new government incentive that aims to speed up the electric semi-truck adaption by logistics companies.

Last week, the biggest development with the Tesla Semi was a report that PepsiCo is likely to take delivery of 15 electric trucks this year. (252 comments)

IT spending looking strong

Evercore ISI's quarterly enterprise technology spending survey is pointing to an outlook that's "very strong," with 80% saying they expect to see their IT spending rise and 14% expecting it to stay the same. That's in line with some optimism shown in the November survey - but confidence is higher in these new numbers, with 81% feeling more upbeat with regard to IT spending.

The survey encapsulates responses from executives at the VP-or-higher level at large companies with insight into their IT spending process - casting a wider net than just chief information officers in seeking a "bottom-up" view of the process for a better look.

Digging into particulars, Evercore says 88% of respondents agree (strongly or somewhat) that COVID-19 has accelerated their shift to cloud offerings. It says that heading into the bulk of 2021, the top three IT spending priorities are: Service Desk & IT Workflow modernization; Artificial Intelligence; and Infrastructure refresh.

As for who's expected most to benefit from a net increase in wallet share from vendors, Microsoft (NASDAQ:MSFT) tops out with 55%, just ahead of Amazon.com (NASDAQ:AMZN) at 49%. Also doing well on the growing-wallet-share measure: IBM (NYSE:IBM) at 45%; Zoom (NASDAQ:ZM); and Oracle (NYSE:ORCL) at 40%.

Meanwhile, with offices looking to reopen this year, Evercore says there will be a renewed focus on hybrid/on-premise after 2020's big shift toward the public cloud. In three years, respondents expect the workload mix will be 52% private - and that's a positive, Evercore says, for Cisco Systems (NASDAQ:CSCO), Dell Technologies (NYSE:DELL), Hewlett Packard Enterprise (NYSE:HPE) and IBM.

The survey indicates storage spending is set to inflect higher - a positive, Evercore says, for NetApp (NASDAQ:NTAP) and Pure Storage (NYSE:PSTG). Servers will be an area of strength, benefiting Dell and HPE, while there's potential for a demand vacuum on the personal computer side.

It also notes that within the networking space, software-defined solutions and Wi-Fi 6 should be notable areas of strength. That makes notable winners out of Cisco and HPE, the firm says. (6 comments)

What else is happening...

T-Mobile (NASDAQ:TMUS) is shutting down its TVision streaming bundle just two years after launch, replacing it with discounted deals on YouTube TV (GOOGGOOGL) and Philo.An Amazon.com (AMZN) unit last week won FDA Emergency Use Authorization for a quick-response COVID-19 test it says it intends for its own employees.The Biden administration today unveiled a goal to expand U.S. offshore wind energy in the coming decade by opening new areas to development, accelerating permits and increasing public financing for projects.AeroCentury (NYSEMKT:ACY) plummets 40% after-hours in reaction to an announcement that the company and certain of its subsidiaries have commenced a voluntary case under Chapter 11.Financial giant Apollo Global Management (NYSE:APO) filed paperwork Monday for an initial public offering to raise as much as $460M for its eighth SPAC, Apollo Strategic Growth Capital III (APGC.U).

Monday's Key Earnings

Canoo (NASDAQ:GOEV) -5.2% PM after Q4 results.

Today's Markets

In Asia, Japan +0.2%. Hong Kong +0.9%. China +0.6%. India +2.3%.
In Europe, at midday, London +0.4%. Paris +0.6%. Frankfurt +0.7%.
Futures at 6:20, Dow +0.4%. S&P +0.1%. Nasdaq -0.6%. Crude -0.6% to $61.17. Gold -1% at $1697.80. Bitcoin +1.4% to $58836.
Ten-year Treasury Yield 3.7 bps to 1.758%

Today's Economic Calendar

8:55 Redbook Chain Store Sales
9:00 Fed’s Quarles Speech
9:00 S&P CoreLogic Case-Shiller Home Price Index
9:00 FHFA House Price Index
10:00 Consumer Confidence
12:00 PM Fed’s Bostic Speech
2:00 PM Fed’s Williams 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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