Wednesday Morning Prepper
Open Interest Changes
Minutes of the last Fed meeting may keep a few traders at their desks until mid-afternoon before they bolt for the Thanksgiving holiday. But the release should be anticlimactic after recent comments from Fed officials, who are pointing to a rate increase next month at every opportunity. Fed funds futures currently show the odds of a December rate hike at 100%.
The four major U.S. stock market benchmarks closed at all-time highs again on Tuesday, with the Dow ending above 19,000 and the S&P 500 finishing above 2,200 for the first time, and the Nasdaq and Russell 2000 posing new record closes. Futures markets suggest U.S. equities will stabilize today, as oil steadies after an impressive run. Investors are also looking toward U.S. reports on jobless claims, durable goods and consumer confidence.
U.K. Chancellor of the Exchequer Philip Hammond will be in the spotlight at 7:30 a.m. ET, presenting the government's first "Autumn Statement" on the state of the economy following the Brexit vote. Analysts will be poring over the speech for clarity on the government's plans after the decision to leave the EU, keeping an eye on fiscal measures and growth and budget-deficit forecasts.
Eurozone business expanded at the fastest rate this year in November, thanks to strong activity at manufacturers and a spike in new orders, even as firms generally held prices steady. IHS Markit's flash composite PMI rose to 54.1 from 53.3 the previous month, giving some welcome news to the ECB. Is the central bank still likely to announce an extension of its massive stimulus program in December?
Russian sanctions will hang over an EU-Ukraine summit in Brussels tomorrow as Donald Trump shapes his future relationship with Vladimir Putin and puts in place a new American foreign-policy team. With the penalties due to expire on Jan. 31, EU governments are likely to prolong the measures for another six months because the main condition for lifting them - ending the Ukrainian war - has not yet been met.
OPEC will debate an oil output cut of between 4%-4.5% at its meeting in Vienna next week, according to Reuters. The deal wouldn't include Libya or Nigeria, but it's understood that Iraq and Iran have reservations with Iraq's foreign minister, who said on Tuesday that OPEC should allow the country to continue raising output without restrictions. If a cut were to be made, OPEC's current output would reduce by more than 1.2M barrels per day.
The clean energy sector may get a boost after President-elect Donald Trump told the NYT he thinks "there is some connectivity" between humans and climate change, stating he was keeping an "open mind" on whether to pull out of the 2015 Paris climate agreement. Meanwhile, Ben Carson has been offered the post of Secretary of Housing and Urban Development. The former Republican presidential candidate said he'll consider the offer over Thanksgiving.
Delivering a blow to one of President Obama's signature workplace rules, U.S. District Judge Amos Mazzant has issued a nationwide injunction blocking regulation set to qualify millions of Americans for overtime pay by doubling the maximum salary cap to $47,892. The decision is a victory for states and business groups that sued, complaining the new rule would increase government costs and put private employers on the hook for millions of dollars.
Amazon's newly established in-house transportation network is facing a rocky start to its all-important holiday season. 250 pilots at ABX Air, subsidiary of Air Transport Services Group (NASDAQ:ATSG), are striking on alleged workforce shortages, a sign of further potential disruptions through the end of the year. Will Amazon (NASDAQ:AMZN) be able to lessen its reliance on traditional delivery partners like UPS and FedEx (NYSE:FDX)?
The Treasury Department has issued a second license to Airbus (OTCPK:EADSY) for the sale of 106 commercial planes to Iran, but such licenses could likely be withdrawn by the Trump administration. Although Airbus is based in France, it must have U.S. approval to sell planes to Iran because at least 10% of the aircraft's components are American-made.
Lufthansa has been forced to cancel 876 of 3,000 scheduled flights for today as Germany's pilots union goes on a two-day strike. It's the 14th walkout to plague the airline in a long-running pay dispute. The canceled Lufthansa (OTCQX:DLAKY) flights include 51 intercontinental flights and will affect some 100K passengers, including at least seven U.S.-bound flights one day ahead of Thanksgiving.
The Twitter account of Jack Dorsey was briefly suspended overnight, but the CEO later attributed its disappearance to an "internal mistake." Users can deactivate their accounts, but only the company can suspend them. It's been a rough year for Twitter (NYSE:TWTR): Rumors swirled for weeks it was in talks to sell the social network, it has struggled to expand its user base and the company announced last month it would cut up to 9% of its workforce.
A credit card breach lasting almost a year has hit Madison Square Garden, Radio City Music Hall and other venues owned by the MSG company (NASDAQ:MSG). Cards whose data may have been captured were swiped in person at food and beverage locations from Nov. 9, 2015, through Oct. 24, 2016. Hackers may have received payment card numbers, cardholder names, expiration dates and internal verification codes.
Google is expected to reach a potentially hefty tax settlement with the Indonesian government in the next few weeks, Reuters reports, in a move that could pave the way for more countries to aggressively pursue back taxes from internet firms. Separately, Indonesia's communications minister said Google's (GOOG, GOOGL) Project Loon is still awaiting clearance. The tech giant hopes to deploy balloons to deliver internet across remote areas of the country.
Following a seven-year ban in China, Facebook (NASDAQ:FB) has quietly developed a censorship tool that could persuade authorities to allow the world's largest social media network to re-enter the world's second largest economy. The alleged software is said to allow certain third parties the capacity to control visibility and monitor stories, sources told the NYT, and suppress posts from appearing in people's news feeds in specific geographies.
Prosecutors have raided the offices of Samsung and South Korea's National Pension Service, as a scandal surrounding President Park Geun-hye creeps deeper into the nation's largest business group. According to Yonhap, investigators were probing NPS's decision to approve last year's $8B merger of Samsung C&T and Cheil Industries. In recent weeks, prosecutors have also seized documents from Samsung's Gangnam offices and an advertising affiliate.
If you use aloe vera gel from Walmart (NYSE:WMT), Target (NYSE:TGT) or CVS, you might be soothing burns with sugar rather than extract from a plant. According to Bloomberg, multiple lab tests of the retailers' store-brand gel showed no traces of aloe vera, even though it's listed as the first or second ingredient in every case. How could this happen? The FDA doesn't approve cosmetics before they hit store shelves, so it's up to suppliers to make good on their promises.
Four months after Starbucks surprised customers by accidentally pushing out its annual price increase two weeks early, the company has another shocker for customers: a second price hike for some cold drinks and food items that went into effect Nov. 10. "We expect the average customer ticket to increase by about 0.5% as a result of these beverage adjustments," a Starbucks (NASDAQ:SBUX) spokeswoman told CNBC.
Airbnb is dropping a lawsuit against New York state, focusing its efforts instead on NYC where a recent law will be enforced that fines hosts as much as $7,500 for advertising many common short-term rentals. While the fines are said to be necessary to protect housing prices by opening up more dwellings to full-time residents, NYC officials have planned a hearing on the regulations affecting Airbnb (Private:AIRB) for Dec. 17.
As part of a colossal six-year growth plan, Hong Kong Disneyland (NYSE:DIS), which lost money amid declining attendance last year, is getting a $1.4B expansion. The upgrades will include an entire section themed around Frozen, a first for a Disney park, and multiple rides based on Marvel superheroes. Construction will begin in 2018 and conclude in 2023.
Now that Tesla has officially acquired SolarCity (NASDAQ:SCTY), it's not wasting any time showing what the combined entity can do. The company is running the island of Ta'u (in American Samoa) on a solar energy microgrid that, at 1.4 megawatts, can cover "nearly 100%" of its 600 residents' electrical needs. It's not just the 5,328 solar panels that are key - it's the 60 Tesla (NASDAQ:TSLA) Powerpacks that offer 6 megawatt-hours of energy storage.
Barnes & Noble (NYSE:BKS) +10.5% posting big cost savings.
Dollar Tree (NASDAQ:DLTR) +8.2% improving margins in Q3.
GameStop (NYSE:GME) +4.3% AH despite a weak holiday forecast.
Hewlett Packard Enterprise (NYSE:HPE) -1.8% AH on lower revenues.
HP (NYSE:HPQ) -2.3% AH on cautious earnings guidance.
Medtronic (NYSE:MDT) -8.7% cutting its full-year outlook.
Seadrill (NYSE:SDRL) +1.6% after beating expectations.
Urban Outfitters (NASDAQ:URBN) -10% AH after missing estimates.
In Asia, Japan closed. Hong Kong flat at 22676. China -0.2% to 3241. India +0.4% to 26051.
In Europe, at midday, London +0.3%. Paris -0.6%. Frankfurt -0.8%.
Futures at 6:20, Dow flat. S&P flat. Nasdaq flat. Crude +0.4% to $48.21. Gold flat at $1211.40.
Ten-year Treasury Yield flat at 2.32%Today's Economic Calendar
7:00 MBA Mortgage Applications
8:30 Durable Goods
8:30 Initial Jobless Claims
9:00 FHFA House Price Index
9:45 PMI Manufacturing Index Flash
9:45 Bloomberg Consumer Comfort Index
10:00 New Home Sales
10:00 Consumer Sentiment
10:30 EIA Petroleum Inventories
12:00 PM EIA Natural Gas Inventory
1:00 PM Results of $28B, 7-Year Note Auction
2:00 PM FOMC minutes