Tuesday Morning Reads, News, and Options

Tuesday Morning Reads, News, and Options





Confirming its full year guidance, General Electric (NYSE:GE) shares are up 7.3% premarket after reporting a more than three-fold rise in quarterly profit to $954M, helped by higher sales in its aviation, oil and gas, and healthcare units. It's big news for the prior conglomerate, which is working to turn around and simplify its businesses. Apple (NASDAQ:AAPL) will report earnings after the market close and investors are hoping the tech giant managed to reverse its iPhone slowdown. Services revenue - which could represent about 20% of Apple's sales - is also a big figure to watch, as well as the growth rate of devices like the Apple Watch and HomePod.

Futures steady after fresh highs

U.S. stock index futures are pointing to a muted open for a second consecutive session despite a jump in U.S. consumer spending seen Monday that propelled U.S. shares to a record high. The S&P 500 topped its intraday record of 2,940.91 set on Sept. 21 with a session high of 2,949.52. Investor jitters have calmed since the beginning of the year as the U.S. Federal Reserve turned dovish. Traders will see the next stage in that process today as the central bank begins its next two-day meeting.

U.S.-China trade talks resume

The Shanghai Composite closed up 0.5% overnight despite another disappointing read on Chinese manufacturing, with the Caixin/Markit factory PMI for April falling to 50.2, lower than the March figure of 50.8. Boosting sentiment appears to be the next round of U.S.-China trade talks in Beijing. Enforcement mechanisms are "close to done," according to U.S. Treasury Secretary Steven Mnuchin, and the two sides hope to seal a deal by early May.

Eurozone economy rebounds

Preliminary growth data from the eurozone showed the economy grew 0.4% in the first quarter, up from 0.2% in Q4 of 2018 and up from a 0.1% figure for the third quarter. As anticipated, the Italian economy stopped contracting during the period, emerging from recession after two quarters of declining gross domestic product. Will the positive numbers continue? Investors are still trying to assess how much trade tensions and a slump in manufacturing will weigh on the region, with the ECB becoming alarmed enough in Q1 to hold out the prospect of more stimulus.

Tesla aims to revamp solar business

Losing its status as the nation's leading rooftop solar company last year, Tesla (NASDAQ:TSLA) will announce plans today to begin selling solar panels and related equipment for up to 38% below the national average price, NYTreports. This will be achieved by standardizing systems and requiring customers to order them online. Homeowners will also photograph electric meters and send the images to the company, reducing the need for site visits.

Trump sues Deutsche Bank, Capital One

Escalating his showdown with Democratic lawmakers, President Trump is suing to block Deutsche Bank (NYSE:DB) and Capital One (NYSE:COF) from complying with congressional subpoenas targeting his bank records. The legal maneuver follows reports from last week that the German bank had started the process of giving documents related to loans made to Trump and his businesses to the New York state attorney general, who is conducting her own probe. Deutsche Bank, which lent Trump some $340M, has been a primary target of the House Financial Services Committee, led by Representative Maxine Waters.

Security flaws in Huawei equipment

Vodafone (NASDAQ:VOD) has acknowledged to Bloomberg that it found hidden backdoors going back years with equipment supplied by Huawei for the carrier's Italian business. While the company said the issues were resolved, the revelation may further damage the reputation of Huawei as the U.S. seeks to ban the Chinese firm from building 5G telecom networks across the West. Bad news for Huawei has generally been seen by investors as an opportunity for Nokia (NYSE:NOK) and Ericsson (NASDAQ:ERIC).

Profit slump for Samsung Electronics

The world's largest smartphone and memory chip maker reported a 57% decline in first-quarter net income, which fell to 5.04T South Korean won ($4.4B) and missed analysts' recently reduced estimates. Despite the weakest profit in more than two years, Samsung Electronics (OTC:SSNLF) forecast improved second-half results. A postponed rollout of its Galaxy Fold - which was hoped to spark a mobile division turnaround - weighed on results, as well as decreased demand for memory chips.

More overnight earnings

BP (NYSE:BProse nearly 1% premarket after its underlying replacement cost profit, used as a proxy for net profit, came in at $2.4B, versus the $2.3B expected by analysts. Santander (NYSE:SANdipped 0.6% as net profit fell 10% to €1.84B amid restructuring costs in the U.K. and Poland, asset sales and disposals. Meanwhile, Airbus (OTCPK:EADSYslipped 1% in Paris as the planemaker stuck to full-year financial targets after reporting a rise in Q1 core earnings that was overshadowed by charges related to a German ban on Saudi defense exports.

What else is happening...

Google ad revenue grows at slowest pace since 2015, sending Alphabet (GOOGGOOGL) shares tumbling.

Iran vows to keep exporting crude oil despite U.S. pressure.

The Fed is exploring another version of "quantitative easing."

Boeing (NYSE:BA) CEO keeps job intact after facing questions on 737 MAX crashes.

Seven straight days of gains for Pinterest (NYSE:PINS) since its IPO.

'Boomers Are Facing A Financial Crisis' writes contributor Lance Roberts in a new SA article.

Netflix (NASDAQ:NFLXinks a deal for Thai cave boy rescue mini-series.

New CEO at Vale (NYSE:VALE) as the miner attempts to draw a line under its dam collapse.

Erdogan says Lockheed (NYSE:LMT) F-35 project would collapse without Turkey.

IPO markets look frothy as Chewy.com (CHWY) and WeWork (VWORK) become next to file.

Monday's Key Earnings
Alphabet (NASDAQ:GOOG-7.3% AH on ad revenue slowdown.
MGM Resorts (NYSE:MGM-3% AH following an EPS miss.
NXP Semiconductors (NASDAQ:NXPI+1.1% AH amid upbeat forward guidance.
Restaurant Brands (NYSE:QSR-1.4% after revenue came up short.
Transocean (NYSE:RIG+0.2% AH posting improved sales, backlog.
Western Digital (NASDAQ:WDC-4.5% AH on EPS miss, weak revenue mix.

Today's Markets 
In Asia, Japan closed. Hong Kong -0.7%. China +0.5%. India -0.1%.
In Europe, at midday, London -0.2%. Paris -0.2%. Frankfurt flat.
Futures at 6:20, Dow flat. S&P flat. Nasdaq flat. Crude +1.3% to $64.35. Gold +0.4% to $1286.90. Bitcoin +1.1% to $5199.
Ten-year Treasury Yield flat at 2.53%

Today's Economic Calendar
FOMC meeting begins
8:30 Employment Cost Index
8:55 Redbook Chain Store Sales
9:00 S&P Corelogic Case-Shiller Home Price Index
9:45 Chicago PMI
10:00 Consumer Confidence
10:00 Pending Home Sales
3:00 PM Farm Prices

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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