Wednesday Morning Reads

Wednesday Morning Reads



Open Interest:




Big data firm Palantir (NYSE:PLTR) and corporate software company Asana (ASAN) are the latest businesses to challenge the traditional IPO process by debuting on the New York Stock Exchange today in the form of a direct listing. Depending on how successful they are, more companies could choose to go public this way going forward, especially if they are allowed to raise new money as part of the process. Going public via direct listing tends to be a quicker route and involves less scrutiny, while super trendy SPAC mergers are also gaining prominence. The NYSE has set a reference point of $7.25/share for Palantir and $21/share for Asana, though the figure only acts as a placeholder in lieu of a formal IPO price.

Election outcome uncertainty

If investors were hoping to get any economic clarity from last night's presidential debate, it was a total fail. Bickering, badgering and insults reigned through much of the hour-and-a-half political brawl that made it hard for either man to make a point, while odds increased that the coming election may not be decided for weeks or even months. Wall Street does not like uncertainty... S&P 500 futures fell 1% overnight as investors braced for heightened volatility in November and December. On the stimulus front, Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi are expected to talk again today despite skepticism on Capitol Hill that a deal is possible at this stage.

More stimulus worries

The EU's economic recovery package, which includes €750B in jointly-backed debt and a €1.07T common EU budget, appears to be in trouble due to differences between member states over democratic standards. Germany, which holds the rotating presidency of the bloc, offered a proposal this week that would suspend payouts from the budget if a weighted majority of nations determined a rule-of-law breach, such as not adhering to values like prosecuting high-level corruption. The draft was rejected by Hungary and Poland, with Polish Prime Minister Mateusz Morawiecki calling it "political blackmail," while a group of richer nations, including Finland and the Netherlands, said the proposal didn't go far enough.

Key milestone for 737 MAX recertification

FAA Administrator Steve Dickson is in Seattle today to conduct an evaluation flight at the controls of a Boeing (NYSE:BA) 737 MAX, which has been grounded for 18 months following two fatal crashes that killed 346 people."I'm not going to sign off on this airplane until I fly it myself," he has repeatedly said. Boeing not only rewrote the software for the MCAS control system, which was faulted for the crashes, but also the entire flight computer software. Other steps that remain before the 737 MAX can return to the skies include airlines drafting their own pilot training, getting it approved and training their pilots.
Go Deeper: Boeing to move all 787 Dreamliner production to South Carolina.

Seven airlines close billions in U.S. Treasury loans

Calling on Congress to extend more aid to prevent massive job cuts, the U.S. Treasury Department has closed loans to seven passenger airlines - American (NASDAQ:AAL), United (NASDAQ:UAL), Alaska Air Group (NYSE:ALK), Frontier Airlines (FRNT), JetBlue (NASDAQ:JBLU), Hawaiian Airlines (NASDAQ:HA) and SkyWest (NASDAQ:SKYW). Southwest (NYSE:LUV), Delta (NYSE:DAL) and others chose not to accept a federal bailout because they found financing in private markets, leaving more money for a smaller number of carriers.

Major layoffs at Disney amid parks slump

Disney (NYSE:DIS) is laying off 28,000 workers in response to the pounding its theme parks have taken in the COVID-19 pandemic. "We've cut expenses, suspended capital projects, furloughed our cast members while still paying benefits, and modified our operations to run as efficiently as possible, however, we simply cannot responsibly stay fully staffed while operating at such limited capacity," Parks chief Josh D'Amaro said in a note seen by CNBC. D'Amaro also took a shot at California Gov. Gavin Newsom, noting the "State's unwillingness to lift restrictions that would allow Disneyland to reopen."

Deal in doubt

General Motors (NYSE:GM) will not finalize its deal with Nikola (NASDAQ:NKLA) by today, according to CNBC. That means a deal could still come within days, or fall apart entirely. Nikola founder Trevor Milton's resignation combined with fraud (and sexual abuse) claims, which have reportedly sparked SEC and DOJ inquiries, have hammered Nikola shares. Since the deal was announced, shares are down more than 60%, making the EV maker much less attractive to GM.

Next chapter for Big Oil

Royal Dutch Shell (RDS.ARDS.B) will slash up to 9,000 jobs, or over 10% of its workforce, as it nears the end of a global restructuring review designed to position it for a green energy transition. The move adds to the growing list of major announcements this year which has seen Big Oil slash dividends, take multibillion-dollar writedowns and ax jobs following oil's coronavirus-induced plunge. In June, BP (NYSE:BP) said it intended to cut 10,000 jobs as it moved into cleaner energy, Chevron (NYSE:CVX) plans to trim 10-15% of its global workforce, while Exxon Mobil (NYSE:XOM) is reviewing staffing country by country.

What else is happening...

Apple's (NASDAQ:AAPL) Tim Cook scores first major stock grant since 2011.

Verizon (NYSE:VZ) quietly scrambling to unload HuffPost - New York Post.

Caesars (NASDAQ:CZR) agrees to acquire William Hill (OTCPK:WIMHF) for £2.9B.

Duke Energy (NYSE:DUK) rebuffed NextEra (NYSE:NEE) takeover approach - WSJ.

Minimum pay rate approved for Uber (NYSE:UBER), Lyft (NASDAQ:LYFT) drivers in Seattle.

Walmart (NYSE:WMT) eyes using Tesla (NASDAQ:TSLA) Semi trucks in Canada to lower costs.

Tuesday's Key Earnings

Micron (NASDAQ:MU) -4.8% AH giving weak short-term outlook.

Today's Markets

In Asia, Japan -1.5%. Hong Kong +0.8%. China -0.2%. India +0.3%.
In Europe, at midday, London -0.3%. Paris -0.7%. Frankfurt -0.7%.
Futures at 6:20, Dow -1%. S&P -1%. Nasdaq -1.2%. Crude -1.2% to $38.83. Gold -0.7% to $1889.20. Bitcoin -0.2% to $10719.
Ten-year Treasury Yield flat at 0.65%

Today's Economic Calendar

7:00 MBA Mortgage Applications
8:15 ADP Jobs Report
8:30 GDP Q2
8:30 Corporate profits
9:30 Fed's Kashkari: "Covid and the Economy"
9:45 Chicago PMI
10:00 Pending Home Sales
10:00 State Street Investor Confidence Index
10:30 EIA Petroleum Inventories
1:40 PM Fed's Bowman: "Community Banks Rise to the Challenge"
3:00 PM Farm Prices
6:00 PM Fed's Kaplan Speech

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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