Wednesday Morning Reads

Wednesday Morning Reads



Open Interest Changes:



Up by nearly 3% for most of the night, stock index futures turned negative moments ago following Tuesday’s historic rally. The DJIA climbed more than 2,000 pointsor 11.4%, marking its biggest percentage gain since 1933, while the S&P 500 soared 9.4% for its best day since October 2008. Triggering the movement was news that a $2T coronavirus stimulus deal was reached and comments from President Trump saying he wants the nation "opened up and just raring to go by Easter. Next market catalyst? After a series of actions on the monetary and fiscal front, traders need to "see the infections pass an inflection point," said Vincent Reinhart, chief economist at BNY Asset Management.

What's in the stimulus package?

People making up to $75,000 a year are expected to receive checks of $1,200. Couples making $150,000 will receive $2,400 with an additional $500 per child. The payments would decrease for those making more than $75,000, with an income cap of $99,000 per individual or $198,000 for couples. The bill is also expected to include roughly $100B in assistance for hospitals, $350B in assistance to small businesses to help them meet payroll, and $500B in aid for corporations, such as airline companies and cruise lines.

BlackRock to manage Fed's bond buying

The Federal Reserve has hired the world's largest money manager to shepherd several debt-buying programs on its behalf as the central bank works to shore up an economy reeling from the spread of coronavirus. BlackRock (NYSE:BLK) will serve as an investment adviser and manage assets for three separate programs, including two new facilities to provide liquidity to corporate borrowers, as well as purchases of agency commercial mortgage-backed securities.

Return to work statistics

In a poll of 119 U.S. companies conducted in mid-March by the American Chamber of Commerce in China, only 22% of the companies surveyed said they've resumed normal business operations, while a quarter expect to be there by the end of April. 50% are experiencing "significant revenue declines," and more than half say they expect 2020 revenues to fall this year if they can't return to usual levels by the end of April. While the sample size is small, the resumption rate is well below official claims that over 90% of manufacturing companies and more than 60% for services firms are back at work.

Confident on recovery plan

Amid a boost from its digital business and growth in North America, Nike (NYSE:NKE) reported quarterly earnings and sales that topped analysts' expectations after the bell on Tuesday, sending shares up 10% AH. The company also noted that it will follow a playbook established by the company in China as it looks to recover its business in other parts of the world. Nearly 80% of its stores in Greater China are now open, and digital sales in the country are approaching triple-digit growth.

COVID-19 at Amazon warehouses

The U.S. coronavirus outbreak has spread to at least six Amazon (NASDAQ:AMZN) warehouses, according to the Jeff Bezos-owned Washington Post. In some cases, Amazon shut down facilities for cleaning, and co-workers who were in close contact with their infected colleagues have been quarantined, though some warehouse workers are still sounding the alarm about sanitary practices. "We are supporting the individuals, following guidelines from local officials, and are taking extreme measures to ensure the safety of all the employees at our sites," Amazon spokeswoman Lisa Levandowski said in an emailed statement.

Social distancing at 30,000 feet

Air travel has already slowed to a trickle with the number of passengers dropping more than 85% from a year ago, according to the TSA. American Airlines (NASDAQ:AAL) is now blocking 50% of all middle seats on every flight, spacing passengers in accordance with public health recommendations. The airline also announced several other changes aimed at reducing contact between flight attendants and passengers, including scaling back food and beverage service and shuttering most airport lounges.

Questionable decision?

The management at WeWork (WE) is offering members of its community teams in the U.S. and Canada an extra $100 per day or $500 per week to work out of WeWork offices during the coronavirus pandemic. Community team employees handle a range of member services, including signing for packages and taking care of on-site programming. According to WeWork's website, only two of its co-working spaces are shuttered in North America and none are closed in Europe.

Facebook ads taking a hit

In hardest hit countries, total messaging across platforms has risen more than 50% over the past month, and in Italy "up to 70%" since the COVID-19 crisis arrived in the country. However, Facebook (NASDAQ:FB) doesn't "monetize many of the services where we're seeing increased engagement, and we’ve seen a weakening in our ads business in countries taking aggressive actions to reduce the spread of COVID-19." Facebook also owns Instagram, as well as the popular messaging service WhatsApp.

Shielding U.S. credit reports

Equifax (NYSE:EFX) is actively working with creditors and lenders to minimize the effects the novel coronavirus may have on consumers' credit standing. "These are uncharted waters for everyone," said CEO Mark Begor. "The company is working with policy makers including the U.S. Congress, the Consumer Financial Protection Bureau and the Consumer Data Industry Association to mitigate the negative impact of the pandemic on consumers' credit files."

What else is happening...

India lockdown suspends output of Apple (NASDAQ:AAPL) suppliers.

Tokyo Olympics are postponed to 2021.

#BuildforCOVID19 global online hackathon.

Defense Production Act 'leverage' is boosting supplies.

U.S. automakers to extend shutdown into April.

Virus dampens payment volumes at Square (NYSE:SQ).

Occidental (NYSE:OXYslashes pay for staff, executives.

Boeing (NYSE:BA) would reject aid if government requires equity stake.

Tuesday's Key Earnings
Nike (NKE+9.9% AH beating estimates, touting recovery plan.

Today's Markets
In Asia, Japan +8.1%. Hong Kong +3.8%. China +2.2%. India +7%.
In Europe, at midday, London -0.7%. Paris +2.3%. Frankfurt -0.1%.
Futures at 6:20, Dow -0.8%. S&P -1.1%. Nasdaq -1.1%. Crude -1.4% to $23.67. Gold -0.3% to $1656.60. Bitcoin -1.3% to $6634.
Ten-year Treasury Yield flat at 0.82%

Today's Economic Calendar
7:00 MBA Mortgage Applications
8:30 Durable Goods
9:00 FHFA House Price Index
10:00 State Street Investor Confidence Index
10:30 EIA Petroleum Inventories
11:00 Survey of Business Uncertainty
11:30 Results of $18B, 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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