Wednesday Morning Reads

Wednesday Morning Reads



  • Starwood Capital and Apollo Global Management (APO) have offered to purchase General Electric's (GE) aircraft financing unit for $4 bln. Bloomberg Report
  • Deutsche Bank's (DB) recovery plan could be impacted by EUR 288 bln in unwanted assets. Reuters Report
  • Several technology companies have petitioned FCC to support faster WiFi tethering (FB, GOOG, AAPL, MSFT, HPQ, QCOM, INTC, AVGO, MRVL). Reuters Report
  • WeWork planning IPO in September, which is sooner than expected (IPOXX). WSJ Report
  • Facebook (FB) CEO Mark Zuckerberg will have to certify compliance under upcoming FTC settlement. WSJ Report
  • EU aims to propose regulations that will force technology companies to remove illegal content (FB, TWTR, GOOG). FT Report
  • Dish Network (DISH) aims to pay $5 bln for wireless assets from Sprint (S) and T Mobile (TMUS). Bloomberg Report
  • San Francisco will vote this year on ballot measure that will tax ride sharing companies (UBER, LYFT). Bloomberg Report
  • Uber (UBER) Freight has been introduced in Germany. Reuters Report

Morning Charts:


Shares of Facebook (NASDAQ:FB), Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN) and Alphabet (GOOGGOOGL) were hit after the close on Tuesday, all falling over 1%, as the DOJ followed Attorney General William Barr's interest in launching a broad antitrust investigation into Big Tech. Much of the rally on U.S. indices has been fueled by the FAANG stocks and a prolonged legal affair - as well as Netflix (NASDAQ:NFLX) growth worries - could erode some of that sentiment. Nasdaq futures are off by 0.7% on the news, ahead of today's quarterly report from Facebook, and Q2 results from Amazon and Alphabet on Thursday.

Brexit team

Boris Johnson will formally take office this afternoon, unveiling the names of his Cabinet and the team he has tasked with delivering Brexit. Investors are particularly interested to see who will be handed the top jobs such as chancellor of the exchequer, foreign secretary and Brexit minister. Johnson has pledged to negotiate a new Brexit agreemnt with the EU before Oct. 31, but if the bloc refuses, he has promised to leave without a deal on Halloween.
Go Deeper: Tim Worstall sees life in the U.K. economy.

IMF trims growth projection

The International Monetary Fund cut its global growth outlook yesterday to 3.2% in 2019 and 3.5% in 2020, both down 0.1 percentage points from its April projections. "Dynamism in the global economy is being weighed down by prolonged policy uncertainty as trade tensions remain heightened despite the recent U.S.-China trade truce, technology tensions have erupted threatening global technology supply chains, and the prospects of a no-deal Brexit have increased," the IMF said in a statement.
Go Deeper: Review economic performance by country over the past year.

Restructuring costs bite

Deutsche Bank (NYSE:DB) is off 3.5% premarket after reporting a €3.15B loss in the second quarter, due to a large restructuring charge that wiped out what would have been a modest profit. "This decline is mainly due to our decision to exit substantially all of our equities sales and trading business," the bank said in a statement. Deutsche's shares have fallen more than 30% in the last 12 months, hit by a host of scandals relating to historical anti-money laundering failures.
Go Deeper: Check out Deutsche Bank stats and ratings vs. its peers.

Car cuts

A big wave of layoffs is coming to Nissan Motor (OTCPK:NSANY) as the automaker plans 10,000 job cuts globally as part of efforts to turn around its business, Kyodo News reports. The number, which represents around 10% of its global workforce, is much larger than an earlier 4,800 estimate. The announcement will be revealed along with Nissan's Q2 results tomorrow and comes as the automaker struggles to restructure its management team following the arrest of former Chairman Carlos Ghosn.

More auto news

Due to legal risks for diesel-related issues and the cost of replacing Takata (OTCPK:TKTDQ) airbags, Germany's Daimler (OTCPK:DDAIF) said it would intensify cost cuts after reporting a €1.56B loss before interest and taxes in the second quarter. French peer PSA Group (OTCPK:PEUGF) still managed to turn a profit in that period despite a weaker outlook for car sales. Recurring operating income at the maker of Peugeot and Citroen cars rose 10.6% to €3.34B, lifting its operating margin to a new record of 8.7% in January-June.
Go Deeper: Look at the holdings in the Global Auto Index ETF (NASDAQ:CARZ)

F-35 parts sourcing

Lockheed Martin (NYSE:LMT) is working to establish alternate supply sources for F-35 parts in the U.S. after the Pentagon decided last week to remove Turkey from the fighter jet program. "We have a timeline that we're working towards... it's out through March of 2020 that we think it will all be resolved," CEO Marillyn Hewson said on a conference call. Turkey previously said it planned to buy a total of 100 aircraft over the years, but following President Trump's sanctions, Ankara will not be able to buy the jets.

KKR devours Arnott's

Just weeks after offloading its Kelsen snacks line to Nutella maker Ferrero, Campbell Soup (NYSE:CPB) is selling its Australian snacks unit Arnott's to KKR (NYSE:KKR), in a deal local media reported was worth $2.2B. Food M&A in Australia is getting hot. Last Friday, Anheuser-Busch InBev (NYSE:BUD) agreed to divest its Australian operations - with best-selling labels like VB and Carlton Draught - to Japan's Asahi (OTCPK:ASBRF) for $11B. CPB +1.3%premarket.

Sunday and drone delivery

United Parcel Service (NYSE:UPS) will start delivering packages on Sundays starting in January, following FedEx's (NYSE:FDX) announced move to seven-day delivery as the two work to meet the demands of online shopping. UPS also announced a new drone delivery subsidiary called UPS Flight Forward and said it has applied for FAA certifications needed to expand the business. Those would allow drone flights beyond an operator's visual line of sight, at night and without limit to the number of drones or operators in command.
Go Deeper: See the LATEST ANALYSIS on the stock and join the discussion.

What else is happening...

'Generate a 50% return from the corn market,' writes contributor Atlas Research.

Apple (AAPL) seeking Mac Pro parts tariff exclusion.

LinkedIn moving to Microsoft's (NASDAQ:MSFT) Azure three years after $27B acquisition.

Tilray (NASDAQ:TLRY) acquires boozy candy company to develop CBD edibles.

Sooner-than-expected? WeWork (VWORKaims for IPO in September.

Coca-Cola (NYSE:KO), PepsiCo (NASDAQ:PEPbreak ties with plastic lobbying group.

Starbucks Delivers (NASDAQ:SBUX) to go nationwide in 2020.

Tuesday's Key Earnings
Biogen (NASDAQ:BIIB+4.9% topping forecasts.
Coca-Cola (KO+6.1% boosted by new products.
Chipotle (NYSE:CMG+3.2% AH with comp sales increasing 10%.
JetBlue (NASDAQ:JBLU+1.7% surpassing Q2 estimates.
Hasbro (NASDAQ:HAS+10% as Disney initiatives paid off.
Harley-Davidson (NYSE:HOG+6.4% topping EPS expectations.
Kimberly-Clark (NYSE:KMB+0.6% raising 2019 guidance.
Lockheed Martin (LMT+0.1% amid strong sales.
Snap (NYSE:SNAP+9.1% AH smashing estimates.
Texas Instruments (NASDAQ:TXN+7.2% AH beating expectations.
Travelers (NYSE:TRV-1.5% on elevated weather losses.
United Technologies (NYSE:UTX+1.5% raising outlook.
Visa (NYSE:V-0.5% AH toning down 2019 EPS guidance.

Today's Markets 
In Asia, Japan +0.4%. Hong Kong +0.2%. China +0.8%. India -0.4%.
In Europe, at midday, London -0.8%. Paris -0.5%. Frankfurt +0.2%.
Futures at 6:20, Dow -0.3%. S&P -0.4%. Nasdaq -0.7%. Crude +0.4% to $56.97. Gold +0.4% to $1426.80. Bitcoin -2.1% to $9758.
Ten-year Treasury Yield -2 bps to 2.05%

Today's Economic Calendar
7:00 MBA Mortgage Applications
9:45 PMI Composite Flash
10:00 New Home Sales
10:30 EIA Petroleum Inventories
11:30 Results of $20B, 2-Year FRN Auction
1:00 PM Results of $41B, 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.

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