Wednesday Morning Reads

Wednesday Morning Reads




Open Interest Changes:



U.S. ambitions to reclaim independence as a spacefaring nation will be on display this afternoon as astronauts - Douglas Hurley and Robert Behnken - are sent into space from American soil for the first time since 2011. SpaceX's Crew Dragon (SPACE) beat Boeing's (NYSE:BA) Starliner to the finish line for today's 4:33 p.m. liftoff in a chance to become the first private company to fly humans into orbit. "All the teams are go," said NASA's Kathy Lueders, as odds of acceptable launch weather improved to 60%. Besides NASA's Commercial Crew program, the mission to the ISS could herald an upcoming era of space travel in which private businesses ferry humans to low-Earth orbit and beyond.

Boeing begins layoffs

While airline stocks soared as much as 16% on Tuesday as restrictions were eased on social activity and travel, the positivity is not stopping some mass layoffs in the industry. Boeing (BA) is set to announce about 2,500 voluntary layoffs at its Seattle-area commercial airplanes division in the first phase of broader cuts triggered by the coronavirus pandemic. Company executives said last month that the U.S. planemaker planned to shed about 10% of its 160,000-strong global workforce this year.

Traders cheer

Wall Street is looking to continue Tuesday's rally as U.S. stock index futures point to gains of more than 1% at the open. Stocks surged yesterday on optimism about economies reopening and the potential development of a coronavirus vaccine, while sentiment also got a boost from the reopening of the NYSE's famed trading floor. Senate Majority Leader Mitch McConnell further said Congress will "probably" have to pass another coronavirus relief bill and will decide whether to do so in the coming weeks.

What kind of Hong Kong sanctions on China?

The Treasury Department could impose controls on transactions and freeze assets of Chinese officials and businesses for implementing a new national security law that brings into question "one country, two systems." Other measures under consideration include visa restrictions for Chinese Communist Party officials, sources told Bloomberg. The Hang Seng Index slipped 0.6% overnight as President Trump said he believes Hong Kong will lose its status as Asia's financial hub if the new law proceeds.

Nationwide basic income project

Spain is expediting the first nationwide basic income project, a pre-electoral promise that's being accelerated due to the coronavirus pandemic. With one of the highest levels of unemployment in the eurozone, the basic income is meant to reach 850K households and 2.5M poorer citizens. Details are being ironed out in parliament this week, but government officials have said the minimum amount an adult will receive will be about half the minimum wage, which is €1,108 per month.

Driverless vehicle technology

Amazon (NASDAQ:AMZN) is in advanced talks to acquire Zoox in a move that would expand the company's reach in autonomous vehicle technology, WSJ reports. The companies are discussing a deal that would value Zoox at less than the $3.2B it achieved in a funding round in 2018, according to the report. Zoox has been working to develop the hardware and software needed to create electric-powered robot taxis that would be summoned by a smartphone app starting this year.

Walmart tries secondhand clothing

Via a partnership with clothing and accessories reseller ThredUp, Walmart (NYSE:WMT) will offer nearly 750,000 items of used women's and children's clothing and accessories on its website. Customers get free shipping with minimum spending of $35. Macy's (NYSE:M) and J.C. Penney (OTCPK:JCPNQ) have also added secondhand clothing to their merchandise lineups as retailers expand their focus on recycling programs and other sustainability measures.

Free speech vs. censorship

Twin decisions by Twitter (NYSE:TWTR) on Tuesday are stirring partisans on both sides of the political debate over the policing of social media and free speech. Twitter applied a fact-checking label to a tweet from President Trump about the potential for fraud involving mail-in ballots - marking its first usage for non-COVID news - though it denied a widower's request to delete the president's post which circulated conspiracy theories about his wife's death (a former congressional staff member for Joe Scarborough). Similar disputes have recently taken place on Facebook (NASDAQ:FB), YouTube (GOOGGOOGL) and Spotify (NYSE:SPOT).

Biggest drop in energy investment ever

The coronavirus crisis has been "staggering in both its scale and swiftness," warned the IEA in its annual World Energy Investment report, stating global energy investment will tumble by 20% - or by $400B - compared to last year. Worst hit will be the U.S. shale sector, which will see investment drop by half in 2020, even as oil prices rally. "It has always been under pressure, but now access to capital and investment confidence is drying up," said the agency's executive director, Fatih Birol.

Big Oil loses climate ruling

State courts are the proper forum for lawsuits alleging oil companies promoted their work as environmentally responsible when they knew it was contributing to climate change, according to the 9th U.S. Circuit Court of Appeals. The suits claim Exxon (NYSE:XOM), Chevron (NYSE:CVX), ConocoPhillips (NYSE:COP), BP (NYSE:BP), Shell (RDS.ARDS.B) and other major oil companies created a public nuisance and should pay for damage from climate change. The ruling could eventually lead to trials in lawsuits by California cities and counties seeking damages, but in the meantime, it could include a review by a larger 9th Circuit panel and, eventually, review by the U.S. Supreme Court.

What else is happening...

Google (GOOGGOOGLreleases plan to return to the office.

Cboe (NYSE:CBOE) to reopen trading floor on June 8.

Hertz (NYSE:HTZ) latest to pay top brass before bankruptcy.

JPMorgan (NYSE:JPM) is 'very valuable' at current levels - Dimon.

New deals highlight EV push at Volkswagen (OTCPK:VWAGY).

Tesla (NASDAQ:TSLA) to cut prices for some models in N.America, China.

P-E push... KKR invests $1B in data centers in Europe.

Disney (NYSE:DIS), SeaWorld (NYSE:SEAS) to present reopening plans.

Today's Markets
In Asia, Japan +0.7%. Hong Kong -0.4%. China -0.3%. India +3.3%.
In Europe, at midday, London +1.2%. Paris +1.7%. Frankfurt +1.6%.
Futures at 6:20, Dow +1.4%. S&P +1.1%. Nasdaq +0.7%. Crude -1.2% to $33.94. Gold -0.5% to $1697.30. Bitcoin +2.6% to $9100.
Ten-year Treasury Yield flat at 0.70%

Today's Economic Calendar
7:00 MBA Mortgage Applications
8:55 Redbook Chain Store Sales
10:00 Richmond Fed Mfg.
10:00 State Street Investor Confidence Index
11:00 Survey of Business Uncertainty
11:30 Results of $20B, 2-Year FRN Auction
12:30 PM Fed's Bullard Speech
1:00 PM Results of $45B, 5-Year Note Auction
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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