Wednesday Morning Reads

Wednesday Morning Reads




Open Interest Changes for Today:


Morning Charts:

Seeking Alpha:

Monetary policy will be front and center for investors today, and futures are trading sideways - after failing to make any major moves on Tuesday - before the big Fed decision. While divisions remain on the FOMC about the need to lower borrowing costs further, the committee is expected to cut interest for the third time this year (to a new range of between 1.5% and 1.75%), while signaling that it is done for now. Watch for Jerome Powell's presser to see if he takes a page from the Greenspan playbook. His mentor cut rates three times in midcycle adjustments in 1995-1996, and again in 1998, to counter economic risks.

GDP expected to show a slowdown

The central bank's rate decision will come hours after the release of U.S. Q3 GDP data, which is forecast to show a further slowdown due to slowing business investment and recent weakness in retail sales. Economists are estimating gross domestic product increased at a 1.6% annualized pace in the July to September period, down from a 2% expansion in the second quarter. This morning's ADP private sector payroll is also expected to show job growth of just 100K, according to Dow Jones, but traders may hold their reaction to the numbers as they wait to see what the Fed is going to do.

Big earnings on tap

Apple's (NASDAQ:AAPL) results today will provide some early insight into how its new iPhones are selling as investors watch the tech giant's forecast for the all-important holiday season. Facebook (NASDAQ:FB) is expected to post a rise in Q3 revenue amid a steady rise in advertising despite concerns that cloud its privacy and data protection standards. Reporting Q3 figures early this morning, General Electric (NYSE:GE) shares jumped 6.5% premarket after an earnings beat and raising its 2019 cash flow forecast.
Go deeper: Bill Maurer asks three key questions ahead of Apple's earnings.

Deutsche Bank still suffering

A sweeping overhaul failed to arrest a slump at Deutsche Bank (NYSE:DB) in Q3, with the lender reporting its second consecutive quarterly loss of €832M as it exits businesses and absorbs restructuring costs. Declines were also seen in one area of traditional strength - fixed income trading - while a €1B pretax loss was taken at its Capital Release Unit (an entity that is selling or winding down various divisions). Better news was seen at Credit Suisse (NYSE:CS), which posted robust profits for Q3, as well as Standard Chartered (OTCPK:SCBFF), which was helped by rising income from corporate and private banking clients. DB -5.3% premarket.
Go deeper: Zoltan Ban is bearish on Deutsche bank.

Alternative (alternative) protein

Beyond Meat (NASDAQ:BYND) shares plunged a staggering 22% on Tuesday after the company warned on a post-earnings conference call that discounting could be dialed up as competition in alternative protein heats up. "We do anticipate we'll be doing more promotion through trade and discounts going into the future," noted Executive Chair Seth Goldman. Volume spike... More than 28M shares swapped hands, representing nearly 50% of all BYND shares outstanding, as the expiration of the IPO share lockup further weighed on the stock.
Go deeper: ASB Capital says Beyond Meat can fall another 50%.

AT&T lays out price for HBO Max

AT&T (NYSE:T) played it safe with its new streaming service HBO Max by selling it for $14.99 a month, the same price it currently offers for HBO, and making it free for current HBO customers. That compares with Netflix's (NASDAQ:NFLX) standard $12.99 plan, and pricing for Disney Plus (DIS, $6.99) and Apple's TV Plus (AAPL, $4.99). HBO Max, which will launch next May, will offer HBO programs, hit shows and movies from the Warner Bros. library, as well as new content from prolific TV producer Greg Berlanti and actress-producer Mindy Kaling.
Go deeper: 'AT&T Settles With Elliott Management: Big Deal' by John Mason.

Miss your old flip phone?

Samsung (OTC:SSNLF) unveiled 'One UI 2' at its annual developer conference in San Jose on Tuesday, racing ahead in foldable devices after it launched its first model in September. A short demo showed a user recording video in full screen at one moment, and creating a split view with more extensive controls when bending the device 90 degrees. Despite a lot of screen issues with the Galaxy Fold, it's clear Samsung isn't ready to give up on foldable display technology as it battles Apple (AAPL) and Huawei in an increasingly saturated market.

Car consolidation

Shares already rose 7.6% yesterday on reports of the news, but Fiat Chrysler (NYSE:FCAU) has confirmed talks with PSA Group (OTCPK:PEUGF) "on a possible business combination." If successful, the merger would give its French rival access to the U.S. market for the first time in decades, and give Fiat a partner to survive major technological shifts in the industry. The Italian-American carmaker's planned tie-up with Renault was scrapped earlier this year after it failed to win the full backing of the French government.

EV revolution

With over 5.1M electric cars on the roads globally, or 0.6% of the passenger car stock worldwide, General Motors (NYSE:GM) is doubling down on production of clean energy vehicles. In fact, the Detroit automaker expects to spend more on developing and selling EVs than gasoline-powered cars over the next five years, CEO Mary Barra told analysts on a conference call. Concerns about employment levels - due to EVs making up a larger share of the market - were also expressed in the recent strike by the UAW union, which just ratified a new four-year labor deal after costing GM $3B in lost earnings.

Aviation industry struggles

Facing production delays at its newly expanded plant in Hamburg, Germany, Airbus (OTCPK:EADSY) is having a hard time capitalizing on the grounding of Boeing's (NYSE:BA) 737 MAX. The French planemaker now expects to deliver 860 commercial aircraft this year, a company record, though that is down from a previous estimate of 880 to 890, while it cut its free cash flow guidance to €3B for 2019 from as much as €4B earlier. Despite the cuts, Airbus is still on track to overtake Boeing as the world's largest aircraft manufacturer, handing over 571 planes to customers in the first nine months of the year, compared with 301 for Boeing.

Bid to resolve Brexit impasse

The U.K. appears headed to a December general election after opposition Labour Party leader Jeremy Corbyn dropped his objections to an early election, saying he's now satisfied that a no-deal Brexit is off the table. Prime Minister Boris Johnson hopes that an early vote will break the legislative stalemate by securing a clear majority to pass his Brexit plans. The last national vote in 2017 ended in a "hung Parliament," making it difficult for the government to pass legislation.

What else is happening...

Boeing (BA) shares held up well during Muilenburg's Senate grilling.

Apple (AAPL) resumes human reviews of Siri audio.

Sony (NYSE:SNEpulls plug on PlayStation Vue TV service.

Big commitment... Amazon (NASDAQ:AMZNpumps $600M into India units.

WeWork (WE) is launching a gaming business, according to Bloomberg.

Tesla's (NASDAQ:TSLA) U.S. sales tumbled 39% in the third quarter.

No signs of asbestos found in J&J (NYSE:JNJ) baby powder.

Tuesday's Key Earnings
Advanced Micro Devices (NASDAQ:AMD-1.1% AH missing revenue estimates.
Amgen (NASDAQ:AMGN) unchanged AH amid flat product sales.
Cummins (NYSE:CMI-1.6% cutting guidance again.
ConocoPhillips (NYSE:COP+2.5% generating $1B of free cash flow.
Eaton (NYSE:ETN+2% on heavy-duty EV transmission debut.
Electronic Arts (NASDAQ:EA-2% AH canceling NBA Live 20.
General Motors (GM+4.3% on strong N.America performance.
Kellogg (NYSE:K+3% showing key brand momentum.
Mastercard (NYSE:MA-0.6% despite higher transactions.
Mattel (NASDAQ:MAT+20.5% AH posting an earnings smasher.
Merck (NYSE:MRK+3.5% beating estimates.
Mondelez (NASDAQ:MDLZ-1.6% AH despite Q3 beat, guidance raise.
Pfizer (NYSE:PFE+2.5% topping expectations.
Shopify (NYSE:SHOP-3.8% recording a Q3 loss.

Today's Markets
In Asia, Japan -0.6%. Hong Kong -0.4%. China -0.5%. India +0.5%.
In Europe, at midday, London -0.2%. Paris +0.1%. Frankfurt -0.3%.
Futures at 6:20, Dow flat. S&P flat. Nasdaq flat. Crude -0.1% to $55.47. Gold +0.2% to $1493.50. Bitcoin -1.6% to $9240.
Ten-year Treasury Yield unchanged at 1.83%

Today's Economic Calendar
7:00 MBA Mortgage Applications
8:15 ADP Jobs Report
8:30 GDP Q3
8:30 Treasury Refunding Quarterly Announcement
10:00 State Street Investor Confidence Index
10:30 EIA Petroleum Inventories
11:00 Survey of Business Uncertainty
2:00 PM FOMC Announcement
2:00 PM Chairman Press Conference

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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