Tuesday Morning Reads

Tuesday Morning Reads


  • Rigged
  • Disney (DIS) and Fox (FOXA) have been sued for $1 bln for issues surrounding its Malaysia theme park. Reuters Report
  • Ford (F) Canada unit CEO has no plans to shutdown plants like GM (GM). Reuters Report
  • Stupid Mistakes
  • Malaysia future prime minister Anwar Ibrahim believes Goldman Sachs (GS) should return $600 mln. FT Report
  • Ignore the Noise
  • House Democrats plan more oversight of financial industry, as expected (XLF, BAC, C, JPM, WFC, GS, MS). FT Report
  • Tesla (TSLA) October China sales fall 70%. Reuters Report
  • Consumer groups want more Google (GOOG) privacy regulations in Eurozone. Reuters Report
  • Tencent (TCEHY) will partner with Line for mobile payments in Japan (EWJ). NAR Report
  • UK antitrust officials to review PayPal (PYPL) acquisition of iZettle AB. WSJ Report


Some of the Top  Open Interest Changes for Today:




Stock market sentiment felt some pressure overnight after President Trump said he expected to raise tariffs on $200B of Chinese goods to 25% (from the current 10%) on Jan. 1. He also declared that he's ready to apply a further round of levies on $267B worth of imports, including iPhones and laptops, starting next year. In response, China's foreign ministry urged the U.S. to work toward a positive outcome of a planned G20 meeting later this week between President Trump and Xi Jinping in Buenos Aires.


Cyber Monday sales topped $7.9B (19.7% growth Y/Y), according to Adobe Analytics, making it the single largest shopping day in U.S. history. In comparison, Thanksgiving Day and Black Friday brought in $3.7B (28% growth Y/Y) and $6.2B (23.6% growth Y/Y) in revenue, respectively. Sales coming from smartphones also hit an all-time high of $2B and the "Buy Online, Pickup In-Store" trend spiked 50%.

Vladimir Putin has expressed "serious concern" over Ukraine's decision to impose martial law as the simmering confrontation between Moscow and Kiev threatened to re-spark a regional crisis. Three Ukrainian navy vessels and their crews were seized and fired on near Crimea this weekend after entering the Kerch strait. Russia's ruble tumbled against the dollar in response, while the VanEck Vectors Russia ETF RSX slid almost 2%.

The EU's top court today will deliberate whether the U.K. can unilaterally cancel Brexit once it is triggered, a decision some Remain campaigners think might give them an argument to reverse Brexit. Timing could not be better: Dec. 11 has been set as the date for the House of Commons "meaningful vote" on Theresa May's withdrawal agreement. Tensions surrounding the pact are still growing as President Trump said her plan could threaten a U.K.-U.S. trade accord.

The Swiss government aims to clinch a deal with the EU on a new treaty governing relations in 2019, pushing back the timetable for an accord that both sides had intended to conclude this year. While the bloc has been pressing Bern to ease rules that protect high Swiss wages against cross-border competition from skilled labor, Swiss unions are fighting back tooth and nail, dimming the outlook for a potential agreement.

Reiterating his 2019 primary surplus goal and quashing any idea of a pensions grab, Mexico’s incoming finance minister Carlos Urzúa is seeking to calm investors after a day of what he called market "trauma," as stocks cratered to a three-year low and the peso weakened 1%. The selloff came after the incoming administration organized a second informal "people's poll" at the weekend, as well as threats from President Trump to shut the southern border.


Microsoft briefly surpassed Apple on Monday as the world's largest public company, reaching a market cap value of $812.9B. Apple's stock has seen phenomenal growth over the past five years, culminating in a $1T valuation earlier this year, but investors are concerned about slowing iPhone sales and Wall Street estimates for the holiday quarter. While iPhones make up nearly 60% of Apple's (NASDAQ:AAPL) entire revenue, Windows, Xbox, and Surface make up just 36% of Microsoft's (NASDAQ:MSFT) sales.

Jack Ma, creator of e-commerce giant Alibaba (NYSE:BABA) and China's wealthiest person, has been outed by the People's Daily as a member of China's Communist Party. "Political affiliation of any executive does not influence the company’s business decision-making process,” a spokesperson told Reuters. Ma has previously described his relationship with the government as: "Love them, but don't marry them."

Endorsing some EU efforts to police the web, IBM CEO Ginni Rometty is the latest to call out fellow tech companies in the debate over privacy regulation. "The genesis of the trust crisis is the irresponsible handling of personal data by a few dominant consumer-facing platforms," she told an event for the EU Commission in Brussels. The websites "have more power to shape public opinion than newspapers or the television ever had, yet they face very little regulation or liability."

Another Silicon Valley land grab... Google (GOOGGOOGL) just spent $1B on a large office park near its headquarters in Mountain View, California, the Bay Area’s largest real estate purchase this year. Earlier this month, Google agreed to pay an additional $110M for 10.5 acres for a new campus in downtown San Jose, with the possibility of scooping up 11 more acres.

The first genetically modified human babies have been born in China, according to researcher He Jiankui. Healthy twin girls Lulu and Nana were conceived artificially with sperm from their HIV-positive dad, but the team sent in proteins and instructions for a gene surgery via CRISPR/Cas9 to "remove the doorway through which HIV enters to infect people." CRISPR Therapeutics (NASDAQ:CRSP) closed 2.3% higher on the news yesterday and is up another 1.4% premarket.

NASA has successfully touched its InSight lander down on the surface of Mars, marking the first mission to the Red Planet since the rover Curiosity landed in 2012. InSight is scheduled to spend two years drilling into the surface to study the planet's crust. Lockheed Martin (NYSE:LMT) built all three parts of the spacecraft: The cruise stage, the heat-absorbing shell and the lander.

"(We have) no plans to do anything like that," Ford (NYSE:F) Canada CEO Mark Buzzell told reporters following General Motors' (NYSE:GM) closure of the Oshawa Assembly plant in Ontario. GM also announced plans to shutter two facilities in Detroit and Ohio, drawing criticism from President Trump. Beset by a declining sedan market, as well as the electric and autonomous revolution, GM further cut production of slow-selling models and slashed its North American workforce by 15%.

Tesla's sales in China sank 70% from a year ago to 211 vehicles in October, according to the China Passenger Car Association, underscoring how the Sino-U.S. trade war is hurting the American automaker. The data comes after Tesla (NASDAQ:TSLA) said it was cutting the prices of its local Model X and Model S to make the cars "more affordable," while absorbing more of the impact from higher tariffs. TSLA -1.4% premarket.

Further diversification... Saudi Aramco's (ARMCO) gas program will attract $150B worth of investments over the next decade, according to CEO Amin Nasser, with production growing to 23B standard cubic feet a day from the current 14B. Aramco, which expects to IPO sometime in 2021 after the potential acquisition of petrochemical maker Sabic, also plans to invest $100B over the next 10 years in chemicals globally, in addition to potential acquisitions.

United Technologies has confirmed that it will separate into three independent companies after it closes its deal with Rockwell Collins (NYSE:COL). The company had been pushed by both activist investors Bill Ackman and Daniel Loeb to think about dividing into stand-alones for its aerospace, climate-control and elevator units. The breakup is in line with plans of other major industrial companies, such as DowDuPont (NYSE:DWDP), Honeywell (NYSE:HON) and General Electric (NYSE:GE). UTX +1.7%premarket.

Today's Markets 
In Asia, Japan +0.6%. Hong Kong -0.2%. China flat. India +0.5%.
In Europe, at midday, London -0.3%. Paris -0.3%. Frankfurt -0.4%.
Futures at 6:20, Dow -0.2%. S&P -0.3%. Nasdaq -0.5%. Crude flat at $51.61. Gold +0.1% to $1223.90. Bitcoin -5.5% to $3695.
Ten-year Treasury Yield -1 bps to 3.06%

Today's Economic Calendar
7:45 Richard Clarida Speech
8:55 Redbook Chain Store Sales
9:00 S&P Corelogic Case-Shiller Home Price Index
9:00 FHFA House Price Index
10:00 Consumer Confidence
1:00 PM Results of $40B, 5-Year Note Auction
2:30 PM Fed's Bostic, George, Evans: "Economy, regulation, financial innovation, and the future of payments"

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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