Tuesday Morning Reads

Tuesday Morning Reads






Open Interest Changes:



China will ask the World Trade Organization to impose sanctions on the U.S. next week for non-compliance related to a ruling regarding U.S. dumping duties. The 2017 WTO ruling was related to several industries ranging from machinery to metals to light industry for a total annual export value of up to $8.4B.


Oil prices have risen as U.S. sanctions put pressure on Iranian crude exports, tightening the global supply. Benchmark Brent crude oil was up $0.50 to $77.87 per barrel by 7:50 GMT. U.S. light crude was up 15 cents to $67.69. Energy Secretary Rick Perry met Saudi Energy Minister Khalid al-Falih yesterday as the U.S. encourages other countries to increase output. Perry will meet with Russian Energy Minister Alexander Novak on Thursday in Moscow.

The British pound stays near five-week highs against the dollar as hopes of a UK-EU Brexit deal offset the ongoing US-China tensions. EU chief negotiator Michel Barnier says the Brexit deal could happen within weeks. The pound hit a Monday high of $1.3087, with sterling up 0.8%.

Mass evacuations were ordered along the U.S. Atlantic Coast as Hurricane Florence, now a Category 4 storm, heads towards the region. Coastal Virginia faces evacuations starting at 8 a.m. local time, while South Carolina’s coastal residents need to start leaving at noon. Businesses with local exposure, such as restaurants Bojangles' (NASDAQ:BOJA) and Zoe’s Kitchen (NYSE:ZOES), could continue to feel pressure Tuesday, while home improvement stocks like Home Depot (NYSE:HD) and Lowe’s (NYSE:LOW) rally.


Japan’s Renesas will purchase chipmaker Integrated Device Technology (NASDAQ:IDTI) for $6.7B, or $49/share, a nearly 30% premium over IDTI’s August 30 closing price before rumors of the deal broke. Renesas (OTCPK:RNECY), the second largest auto chipmaker behind NXP Semiconductors (NASDAQ:NXPI), will add to its portfolio IDT’s wireless network and data storage chips, which are crucial for self-driving vehicles.

The Environmental Protection Agency will reportedly announce a rollback of Obama-era methane emission rules. The EPA proposal wants to give oil and gas companies more time to assess and safely repair infrastructure that’s often found in remote areas. The changes would give drillers a year to perform leak inspections and 60 days to make repairs, double the current time frames.

Oil and natural gas company SandRidge Energy (NYSE:SD) concluded its formal strategic review after evaluating several potential transactions that the board found significantly undervalued the company. SandRidge remains open to a potential deal “at the right price.” The board thinks various items might have hurt bid valuations, including the drilling restrictions in Colorado’s ballot initiative 97 and the current lack of a pipeline connection in Jackson County.

Despite the first three months marked by solid performance, Macquarie Group (OTCPK:MCQEF) has affirmed guidance for fiscal year profits in line with last year; it also expects a first half in line with the same period last year. The firm's last fiscal year marked record profits of A$2.56B, however, with the help of higher fee income from managed funds, and outperforming assets.

After his bank received a €775M fine (about $900M) tied to an inability to stop money laundering for years, ING Groep (NYSE:ING) Chief Financial Officer Koos Timmermans will exit his post. He held key managerial posts at ING's Netherlands banking operations during the years that prosecutors examined. Timmermans will stay in the position until the bank names a replacement.

Retired workers were called back to Boeing (NYSE:BA) to help fix delays in the 737 jetliner plant outside Seattle. Engine and fuselage shortages triggered the delays as Boeing accelerated production to record levels in June. The delays could hurt Q3 results and threatens the goal to boost build rates again in 2019. As of last week, the plant reportedly had about 50 semi-finished 737s scattered around, seven times the amount observed in July.

Urologic treatment developer Urovant Sciences has filed for its IPO with a proposed maximum aggregate offering price of $150M. The company wants to list on Nasdaq under the symbol UROV. For the three months ended June 30, operating expenses were $31.47M, up from last year’s $3.61M, with a $31.3M net loss and $4.25M in cash. Competitors with overactive bladder products include Astellas’ (OTCPK:ALPMY) Myrbetriq and GlaxoSmithKline’s (NYSE:GSK) development-stage solabegron.

In its first earnings report since the IPO, Sonos (NASDAQ:SONO) reported in-line results, with revenues down 6.6% despite an 11.4% unit growth due to the year-ago launch of its Playbase product. Shares dropped 14.5% after-hours, erasing yesterday’s intraday gains, with investors perhaps disappointed that the report wasn’t a blowout.

Chinese e-commerce giant Alibaba (NYSE:BABA) ceded control in its Russian JV, taking a 49% stake in its partnership with Russian Direct Investment Fund, mobile operator MegaFon and internet group Mail.ru. Alibaba granted the Russian entities a 52% stake to gain access to their local consumer bases. The JV will reportedly use the Mir payment system Russia developed in 2014 after Western sanctions.

Monday's Key Earnings
Avid Bioservices (NASDAQ:CDMO+18.1% AH despite Q1 revenue decline.
Casey's General Stores (NASDAQ:CASY+4.4% AH on Q1 earnings beat.
Sonos (SONO-14.5% AH after first public earnings.

Today's Markets 
In Asia, Japan +1.26%. Hong Kong -0.72%. China -0.18%. India -1.34%.
In Europe, at midday, London -0.65%. Paris -0.13%. Frankfurt -0.50%.
Futures at 6:20, Dow -0.42%. S&P -0.26%. Nasdaq -0.28%. Crude +0.09%to $67.60. Gold -0.07% to $1,199. Bitcoin +0.81% to $6,346.
Ten-year Treasury Yield +1.8 bps to 2.957%.

Today's Economic Calendar
6:00 NFIB Small Business Optimism Index
8:55 Redbook Chain Store Sales
10:00 Job Openings and Labor Turnover Survey
10:00 Wholesale Trade
1:00 PM Results of $35B, 3-Year Note Auction

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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