Wednesday Morning Reads

Wednesday Morning Reads





Open Interest



S&P 500 to take aim at new record

The S&P 500 is looking to hit a new record with stimulus in focus and the Fed keeping rates low, which support higher valuations. The index had a modest gain yesterday that pushed it to a new record. Futures are up 0.17% today aiming to hit a new record. Possible support of the move is the stimulus deal with top Congressional Democrats yesterday signaling a willingness for further compromise, and the White House this morning optimistic about the chance to quickly pass a slimmed-down deal. On the negative side, trade tensions are rising with China. The Shanghai Composite fell 1.25% in Wednesday action.

Oracle's TikTok bid has President Trump's support

Asked about reports that Oracle (NYSE:ORCL) will make a bid for ByteDance’s (BDNCE) TikTok, President Trump said, “Well I think Oracle is a great company and I think its owner is a tremendous guy, a tremendous person. I think that Oracle would be certainly somebody that could handle it.” Earlier this month, Microsoft (NASDAQ:MSFT) said it was holding acquisition talks with ByteDance and the White House. Last week, Trump gave ByteDance 90 days to sell off TikTok’s U.S. operations.
Go Deeper: See the timeline of how TikTok got caught in politics

FDA to begin review of Juul products

Juul Labs (JUUL) says the FDA will begin reviewing its applications for its e-cigarette device and certain nicotine cartridges in a step forward for the company. Juul filed the applications with the FDA late last month asking for permission to keep selling the products. Another wildcard was added to the mix earlier this week when Stanford researchers said they found teens and young adults who use electronic cigarettes were at a much higher risk of contracting COVID-19. The substantive review process by the FDA could reshape the U.S. market. Waiting in the wings is Altria (NYSE:MO), which acquired a 35% stake in Juul in 2018.

ViacomCBS in talks to sell CNET for ~$500M

The re-merged Viacom-CBS is holding talks to sell its CNET unit to Red Ventures, a digital media holding company. ViacomCBS (NASDAQ:VIAC) aims to divest non-core assets and use the extra cash to focus on video streaming. They're discussing a price of ~$500M, the Wall Street Journal reports, citing people familiar with the matter. The two companies haven't yet reached a final deal and talks could still fall apart, the people said.
Go Deeper: Dive into ViacomCBS's profitability grade and underlying metrics

Takeda Pharmaceutical in talks to sell Japan consumer health unit to Blackstone

In a bid to refocus its business and reduce debt following its $59B Shire acquisition, Japan’s Takeda Pharmaceutical (NYSE:TAK) is planning to sell its consumer healthcare unit (generating 3% of total sales) to US fund Blackstone (NYSE:BX) for $2.85B (¥300B), reports Reuters. The talks are in the final stage and the companies plan to close the deal by the end of this month. Neither company commented on the report.
Go Deeper: See Takeda Pharmaceutical's financials

Italy to submit recovery plan to EU in two months

Italy - an early hotspot for COVID-19 globally - will be submitting a recovery plan to the European Union by mid-October, Prime Minister Guiseppe Conte says, in accordance with the EU's stimulus plans. The government is currently identifying investment and reform projects that line up with EU support, he says. He's characterized the likely €209B stimulus as a chance to transform Italy's economy.

Japanese exports fall for the fifth straight month

Pain continued for the world's third-largest economy as Japanese exports nosedived 19.2% Y/Y in July. This was slightly better than the forecast of a 21% drop and improvement from June's fall of 26.2%. Imports dropped 22.3% Y/Y in July resulting in a trade balance surplus of ¥11.6B. Nikkei closed up 0.26%.

Regeneron teams with Roche to triple supply of its COVID-19 drug

Regeneron (NASDAQ:REGN) is enlisting rival Roche (OTCQX:RHHBY) to boost the supply of its COVID-19 drug, REGN-COV2, via a new production/distribution deal. The arrangement could boost overall capacity of the drug by 3.5 times if approved by regulators. REGN-COV2 is currently in late-stage clinical trials, and initial results are expected by the end of September, which could precede an emergency use authorization by year-end. Regeneron will handle U.S. distribution, with Roche handling elsewhere.

World's largest shipping company expects container demand to decline significantly this year

Mærsk (OTCPK:AMKAF) reported Q2 revenue decline of 6.5% to $9B owing to ocean volume declining by 16% to 2,903k FFE. The average loaded freight rate increased by 4.5% to 1,915 USD/FFE. While the company reinstated their FY20 EBITDA guidance of $6-7B, they expect a "significant decline" in container demand for the rest of the year.

What else is happening…

ON Semiconductor (NASDAQ:ON) raises $700M via upsized private offering.U.S., China to expand airline flights between them to eight per week.Verona Pharma (NASDAQ:VRNA) launches second part of ensifentrine study in lung disease.Gilead (NASDAQ:GILD) comes up empty with U.S. application for filgotinib for rheumatoid arthritis.JPMorgan (NYSE:JPM) says opioid settlement news is bullish for distributors.Sorrento Therapeutics (NASDAQ:SRNE) ousts CFO Jiong Shao.Conduent (NASDAQ:CNDT) names Icahn's Gary to board for settlement.

Tuesday's Key Earnings

Alcon (NYSE:ALC) -6% PM on missing Q2 earnings.
Agilent Technologies (NYSE:A) -2.1% AH on FQ3 earnings.

Today's Markets

In Asia, Japan +0.26%. Hong Kong -0.74%. China -1.24%. India +0.28%.
In Europe, at midday, London +0.11%. Paris +0.32%. Frankfurt +0.32%.
Futures at 6:00, Dow +0.19%. S&P +0.17%. Nasdaq +0.16%. Crude -0.77% to $42.79. Gold -0.55% to $2,002.10. Bitcoin -3.4% to $11,819.
Ten-year Treasury Yield -1.5bps to 0.654%

Today's Economic Calendar

7:00 MBA Mortgage Applications
10:00 Quarterly Services Report (Advance)
10:30 EIA Petroleum Inventories
1:00 PM Results of $25B, 20-Year Bond Auction
2:00 PM FOMC minutes
3:00 PM Fed's Barkin: Economic Outlook

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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