Tuesday’s Market Prepper

Tuesday's Market Prepper






Marketwatch Buzz:

American Airlines AAL, +0.02% will invest $200 million in China Southern Airlines +0.76%   and begin code-sharing later this year.

Still trying to untangle itself from a PR mess, United Airlines UAL, +0.65%  tells customers “your leggings are welcome.”

Amazon AMZN, +0.14%  says it’s buying SOUQ.com, a big player in the Middle East e-commerce market.

A Tesla TSLA, +2.10%   factory worker is suing the electric-car maker, claiming he suffered racial discrimination, sexual harassment and threats from his co-workers. Meanwhile, Tesla CEO Elon Musk’s latest project involves linking up brains to computers.

Former Valeant VRX, -0.37%  CEO Michael Pearson is suing the drugmaker over more than 3 million company shares he says he’s owed.

Olive Garden-owner Darden Restaurants DRI, -1.47%  has bought a small Texas restaurant chain for $780 million.


Souq.com has been bought by Amazon (NASDAQ:AMZN) for an undisclosed amount, a day after a counteroffer of $800M from Dubai's Emaar Malls became public. "Amazon and Souq.com (Private:SOUQ) share the same DNA - we're both driven by customers, invention, and long-term thinking," said Russ Grandinetti, Amazon SVP of International Consumer. The acquisition is expected to close in 2017.


Undoing a slew of Obama-era policies, President Trump will sign an executive order today that will start the process of unwinding directives to combat climate change. Called the "Energy Independence" order, it will permit more carbon emissions from power plants, rescind a ban on coal leasing on federal lands, and reverse rules to curb methane emissions from oil and gas production.

The Dow extended its losing streak to eight sessions yesterday - the longest for the index since 2011 - but traders seem keen to move past the healthcare reform issue. In fact, future values are predicting a positive market open. "I don't think this is the beginning of a full-blown correction, but it's definitely a reversal in sentiment," said Peter Cardillo, chief market economist at First Standard Financial.

There are more than a dozen speeches from members of the Fed this week so the narrative is coming thick and fast from the central bank. One highlight will be Janet Yellen's speech in Washington today on workforce development challenges in low-income communities. Watch to see if the officials signal a plan for two additional rate increases this year, as proposed in their latest projections.

Despite corporate woes and political turmoil, South Korea's GDP grew more than expected in Q4, expanding 0.5% from the previous quarter and 2.4% year-on-year. Meanwhile, North Korea has carried out another test of a rocket engine that U.S. officials believe could be part of its program to develop an ICBM. It's the third such test in recent weeks.

South African President Jacob Zuma plans to fire Finance Minister Pravin Gordhan, unnerving investors who see him as an emblem of stability. The rand fell more than 3% on the news and bonds tumbled. While Gordhan has led efforts to keep spending in check and fend off a junk credit rating, Zuma wants to embark on a "radical economic transformation" that will tackle racial inequality and widespread poverty.


"Oil has been placed in the Dakota Access Pipeline underneath Lake Oahe," Energy Transfer (NYSE:ETE) said in a federal court filing, as it makes final preparations to start moving the oil. Once at full capacity, the $3.8B project will be able to ship 570K bpd of crude across four states to Patoka, Ill., where the fuel can be diverted to markets across the Midwest and Gulf Coast.

"The restrictive measures adopted by the Council in response to the crisis in Ukraine against certain Russian undertakings, including Rosneft (OTC:RNFTF), are valid," Europe's top court ruled today. The bloc slapped sanctions on Russia after it annexed Crimea in 2014 and stepped them up as Moscow went on to support a separatist rebellion in Ukraine's industrial east.

The U.K.'s biggest retailer will pay £214M over its 2014 accounting scandal as shareholders line up to oppose its $4.7B takeover of food wholesaler Booker (OTCPK:BOKGY). Tesco (OTCPK:TSCDY) has provisionally agreed to pay £129M under a deferred prosecution agreement with the Serious Fraud Office and £85M to compensate investors.

Replacing ousted chief Brad Grey, Jim Gianopulos, the longtime head of Twentieth Century Fox (FOX, FOXA), has been officially tapped to turn around Viacom's (VIA, VIAB) troubled Paramount Pictures. The move fills one of two gaps atop major Hollywood studios. Sony Pictures (NYSE:SNE) is still on the hunt for a replacement for outgoing chief Michael Lynton.

Comcast is planning to rebrand and expand a streaming video option for broadband subscribers who do not want to pay for a traditional cable package. The service, dubbed Xfinity Instant TV, will be priced as low as $15 a month to roughly $40 a month, sources told Reuters. Comcast (NASDAQ:CMCSA) will include major broadcast networks as well as add-on options.

Credit Suisse will finalize capital raising plans "as soon as possible," according to CEO Tidjane Thiam, who didn't give specific details on the timing or the type of fundraising. But reports suggest Credit Suisse (NYSE:CS) is considering $3B-$5B as it continues to restructure globally and recover from a recent $2B charge for selling toxic mortgage securities.

Just six months after a profit warning, Ericsson (NASDAQ:ERIC) has revealed that restructuring charges will be twice the original forecast, amounting to SEK6B-SEK8B ($680M-$910M) in 2017. The telecoms equipment maker will also write down SEK3B-SEK4B ($342M-$456M) of assets in Q1, while taking provisions of an estimated SEK7B-SEK9B.

Jack Dorsey will do "whatever it takes" to make sure Twitter (NYSE:TWTR) and Square (NYSE:SQ) do well, amid calls for the tech founder to focus on one over the other. "I'm going to make sure both succeed," he told CNBC, adding that there are "potential synergies" between the two firms and that Square was looking for further acquisitions, particularly in the machine-learning space.

The No. 1 U.S. airline has become the latest to seek a foothold in China by securing a tie-up with one of the country's big three state-run carriers. American Air (NASDAQ:AAL) is making a $200M equity investment in China Southern Airlines, equivalent to a 2.68% stake. The two will also begin a code-sharing agreement under which they can sell tickets on some of the other's flights.

A spokeperson with Uber said the company's self-driving cars are being put back on the road in Tempe, Arizona and Pittsburgh, Pennsylvania. It's a quick reversal from yesterday's news that the test program was being suspended. According to local police, the high-impact crash in Arizona was due to human error of the other vehicle and not UBER's driverless technology.

Ford will announce investments in three of its Michigan manufacturing facilities this morning, including the Michigan Assembly Plant, Flat Rock Assembly Plant and Romeo Engine Plant, sources told The Detroit News. It's unclear how many jobs will be created or the total dollar amount, however, one of the sources characterized the investments as "significant." F +1.1% premarket.

Besides guiding SpaceX (Private:SPACE), Tesla (NASDAQ:TSLA) and several more companies, Elon Musk is launching a new startup called Neuralink. "Difficult to dedicate the time, but existential risk is too high not to," he wrote in a tweet. It's expected to specialize in electrodes connected to the brain, which may ultimately lead to the uploading and downloading of thoughts.

Fired from Pimco four decades after he co-founded the investment firm, Bill Gross has finally settled his lawsuit against the company. The asset management giant is reported to have agreed to pay $81M to the legendary investor, who has pledged to give the money to charity. For its part, Pimco (OTCQX:AZSEY) said Gross's increasingly erratic behavior was behind the firing.

More drama at Valeant? Former CEO Michael Pearson is suing the firm over unpaid stock awards and consultation fees. Based on VRX's stock price of $10.81 at the close of trading on Monday, the 3M shares have a market value of about $32.43M. Valeant fell to a 7-year low earlier this month after activist Bill Ackman sold the last of his stake in the struggling drugmaker.

Monday's Key Earnings
Darden (NYSE:DRI) +3.9% AH purchasing Cheddar's Scratch Kitchen.
Red Hat (NYSE:RHT) +5.3% AH crossing a $3B bookings milestone.
Today's Markets
In Asia, Japan +1.1%. Hong Kong +0.6%. China -0.4%. India +0.6%.
In Europe, at midday, London flat. Paris +0.1%. Frankfurt +0.6%.
Futures at 6:20, Dow flat. S&P +0.1%. Nasdaq +0.1%. Crude +0.9% to $48.14. Gold -0.2% to $1253.50.
Ten-year Treasury Yield flat at 2.37%Today's Economic Calendar
International trade in goods
8:55 Redbook Chain Store Sales
9:00 S&P Corelogic Case-Shiller Home Price Index
10:00 Consumer Confidence
10:00 Richmond Fed Mfg.
10:00 State Street Investor Confidence Index
12:45 PM Fed's George speech
1:00 PM Results of $26B, 5-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.

More Posts by UPB: View All | Private Twitter Feed: Access Now! (For Diamond Members)

Leave a Reply