Wednesday Morning Market Prepper

Wednesday Morning Market Prepper





Morning Charts:


Mixed bank earnings and comments from President Trump that the trade war has a "long way to go" put a halt to the five-day rally in U.S. shares on Tuesday, though fresh records are back in focus. Dow and S&P 500 futures are up 0.2%, while contracts tied to the Nasdaq are pointing to gains of 0.3% at the open. A wave of quarterly reports from Netflix (NASDAQ:NFLX) and other top-tier, high-growth companies starting today could fuel more stock gains or put an end to the market's recent strength. FAANGs and Microsoft (NASDAQ:MSFT) account for about 17% of the S&P 500's $26T market cap, making reaction to their quarterly results key to Wall Street sentiment.

More earnings

Earnings season in Europe is also kicking into high gear, led by Dutch semiconductor giant ASML (NASDAQ:ASML) and Swedish telecom equipment supplier Ericsson (NASDAQ:ERIC). ASML's forecasts for sales and margins in the third quarter both missed consensus, though it maintained its overall outlook, lifting shares 5.4% premarket in the U.S. Ericsson meanwhile fell 5.3% ahead of the open, posting earnings that missed analyst estimates for the first time in six quarters and warning its rollout of 5G mobile networks in Asia would weigh on profits. CEO Borje Ekholm said that while Ericsson is gaining market share, it hasn’t won any contracts as a direct result of rival Huawei's troubles.

Amazon faces EU antitrust probe

Taking action to appease regulators, Amazon (NASDAQ:AMZN) has reached a deal with Germany's antitrust authority to overhaul its terms of service for third-party merchants. While neighboring Austria ended a similar probe, the EU overnight opened a formal investigation into Amazon's "dual role" as both a merchant and a marketplace. U.S. lawmakers separately grilled the retail giant on Tuesday over how the company treats merchants, with Amazon associate general counsel Nate Sutton denying the company uses individual data to directly compete with smaller sellers.

Antitrust hearing on Big Tech

Legislators also demanded explanations from Apple (NASDAQ:AAPL) about charges for apps and in-app purchases, Facebook (NASDAQ:FB) for its rapidly changing privacy policy and Google (GOOGGOOGL) over whether its rivals are demoted in search results. Other congressional panels focused on Facebook's plans to bring out its Libra cryptocurrency, with Bitcoin (BTC-USDsliding 8% below $10K during the session and losing almost a third of its value since last week. President Trump separately said that his administration should look into Google's ties to China, elevating the political risk of the company’s yearslong effort to build a presence in that market.

New IBM, AT&T alliance worth 'billions'

The multi-year strategic deal will enable AT&T (NYSE:T) Business Solutions to migrate internal applications to the IBM (NYSE:IBM) cloud, while the latter will make AT&T Business its primary provider of software defined networking. The partnership builds on IBM's $34B acquisition of open-source software firm Red Hat, which closed last week, and strengthened IBM's standing in the hybrid cloud market that manages software and other systems across different cloud services and their own data centers.

HBO sets Emmy nominations record

In the midst of the prestige-TV battle, HBO (T) reclaimed one crown from Netflix (NFLX) by taking the most Emmy nominations for 2019. The 137 figure breaks its own record of 126 that AT&T's premium cable network set in 2015, thanks in no small part to the return this year of Game Of Thrones for its final season. The series itself wrecked its own record for nominations overall and set a record for nominations in a single season, drawing 32 nods (which beats 26 nominations for NYPD Blue in 1994).

Turkey ejected from F-35 program

Putting new strains on NATO, the U.S. will begin withholding sales of the advanced F-35 to Turkey after Ankara received the new S-400 missile defense system from Russia. Lockheed Martin (NYSE:LMT), which derives around 30% of its sales from the F-35, has played down the impact of Turkey's potential expulsion from the program in recent weeks, saying other countries are awaiting planes that would have been sold to Turkey. The development stands to affect the Turkish economy, however, with many local companies manufacturing hundreds of parts for the fighter.

Before the trade war

The Trump administration has blasted a WTO decision that could let China levy sanctions on the U.S. if the latter doesn't recalculate its anti-subsidy tariffs dating to 2007. The surprise is that the case dates back to the Obama-era and is unrelated to the current levies placed on $250B in Chinese goods. The U.S. had slapped anti-subsidy tariffs on Chinese exports including solar panels, wind towers, steel cylinders and aluminum extrusions - exports that it valued at $7.3B at the time.

What else is happening...

Qualcomm (NASDAQ:QCOM+6% premarket as DOJ seeks pause of antitrust ruling.

After Britain, Vodafone (NASDAQ:VODlaunches 5G in Germany.

G7 finance ministers look to rein in tech giants.

Prime Day positivity pushes Roku (NASDAQ:ROKU) to record highs.

Toyota (NYSE:TM) inks agreement with world's top EV battery supplier.

McDonald's (NYSE:MCD) deal with DoorDash (DOORDdelivers blow to Uber Eats (NYSE:UBER).

Tuesday's Key Earnings
Canadian Pacific Railway (NYSE:CP+3.9% topping expectations.
Charles Schwab (NYSE:SCHW+3.3% beating earnings estimates.
CSX (NASDAQ:CSX-6.3% AH on trade-related weakness.
Domino's Pizza (NYSE:DPZ-8.7% on soft U.S. same-store sales.
Goldman Sachs (NYSE:GS+1.9% boosted by investing & lending unit.
Johnson & Johnson (NYSE:JNJ-1.6% amid talc, opioid litigation fears.
JPMorgan (NYSE:JPM+1.1% with a strong consumer business.
United Airlines (NASDAQ:UAL+0.4% AH amid Q2 beats, $3B buyback.
Wells Fargo (NYSE:WFC) on higher deposit costs, lower rate environment.

Today's Markets 
In Asia, Japan -0.3%. Hong Kong -0.1%. China -0.2%. India +0.2%.
In Europe, at midday, London -0.1%. Paris flat. Frankfurt flat.
Futures at 6:20, Dow +0.2%. S&P +0.2%. Nasdaq +0.3%. Crude +0.8% to $58.05. Gold -0.6% to $1402.60. Bitcoin -12.6% to $9359.
Ten-year Treasury Yield -2 bps to 2.1%

Today's Economic Calendar
7:00 MBA Mortgage Applications
8:30 Housing Starts
10:30 EIA Petroleum Inventories
12:30 PM Fed's George: Economic Outlook
2:00 PM Fed's Beige Book

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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