Wednesday Morning Reads
- A Brutal Story
- Awkward Olympics
- Bitcoin Snaps Slide
- Trump vs. Powell
- Inside Wall Street’s $8 Billion VIX Time Bomb
- Wynn’s Wake-Up Call
- It’s Not Too Late
- Futures point to opening losses
- Wynn Resorts rallies after CEO exit
- Chipotle in retreat after earnings
- Goldman to finance iPhones?
- Mortgage apps edge higher
- Elon Musk wants 'a new space race'
- Soft toy demand impacts Hasbro in Q4
- Apple brings Alipay into Chinese stores
- China strikes back against U.S. at WTO
- Top Morning Charts
- Bottom Scan
- Head and Shoulders Bull&Bear
- Bottom Scan
- Topping Out
- Overbought / Oversold
- Bull Flags
- Channel Up Scan
Unusual Option Action:
U.S. stock index futures dropped deep into the red again overnight, pulling back from the roller coaster ride in the previous session that saw the DJIA close up 567 points following two major selloffs. Some of the reasons given for the sharp swings include fears over interest rates, obscure volatility funds that use leverage and computer-driven trading. World shares are looking to move away from the volatility, however, as equities claw back losses in Europe and Asia.
China is pushing back against mounting trade pressure from the Trump administration, filing challenges to new U.S. tariffs on solar panels and washing machines at the World Trade Organization. The petitions follow an announcement by the Chinese Commerce Ministry on Sunday that it was investigating American exporters of sorghum for allegedly "dumping" the grain below cost into the Chinese market.
"The United States of America will soon unveil the toughest and most aggressive round of economic sanctions on North Korea ever," Vice President Mike Pence said on his way to the Winter Olympics in South Korea. "We will not allow North Korea to hide behind the Olympic banner... We will continue to isolate North Korea until it abandons its nuclear and ballistic missile program once and for all."
Following months of political uncertainty, German Chancellor Angela Merkel's conservatives have reached a coalition deal with the Social Democrats after elections in September failed to produce an overall majority for any party. The CSU-CDU alliance will be given the economy and defense ministries, while the SPD was reported to have been given the finance ministry.
Senate talks on a House budget bill were further complicated late Tuesday. President Trump endorsed the idea of a government shutdown if lawmakers failed to reach a comprehensive immigration deal this week - something that was not previously considered a top priority in last-minute spending talks. "If we don't get rid of [certain immigration enforcement] loopholes... let's have a shutdown."
Disney is expanding its Star Wars universe, hiring the creators behind Game of Thrones to write another series of films set in the galaxy far, far away. More content? ESPN Plus, the company's first direct-to-consumer streaming service that will launch in spring 2018, will be priced at $4.99 per month. Shares in Disney (NYSE:DIS), which also reported a quarterly profit that topped forecasts, rose nearly 3% in AH trading on Tuesday.
Steve Wynn has resigned as CEO and Chairman of Wynn Resorts (NASDAQ:WYNN) in the wake of allegations of sexual misconduct that surfaced in recent weeks. "I have reached the conclusion I cannot continue to be effective in my current roles," he declared. The company has named current President Matt Maddox as its new CEO and Boone Wayson as Non-Executive Chairman. WYNN +1.1% premarket.
Key issues remain in talks to forge a partnership with Embraer (NYSE:ERJ), but Boeing (NYSE:BA) is still pushing ahead with discussions. "As noted on our earnings call this is a winning combination but it is not a 'must do.' The final terms, in price, need to provide the best value for our respective customers, investors, and countries," said Phil Musser, Boeing's SVP of Communications.
Elon Musk wants "a new space race" after a Falcon Heavy launch success that will "encourage other companies and countries" to be ambitious in the same way as SpaceX (Private:SPACE). At a fraction of the cost, Falcon Heavy is both more powerful and capable of lifting more weight than the biggest rockets offered by United Launch Alliance - a joint venture between Boeing (BA) and Lockheed Martin (NYSE:LMT).
EV and self-driving news roundup: The Renault-Nissan-Mitsubishi alliance (OTCPK:RNLSY, OTCPK:NSANY, OTC:MMTOY) has signed an MoU with Didi Chuxing (Private:DIDI) to explore future business cooperation on a new electric car-sharing service in China. Meanwhile, a San Francisco startup called Embark completed a coast-to-coast test drive of its autonomous semi-truck, covering around 2,400 miles without relying on humans for highway driving.
Looking to revive growth in the world's No.2 economy, Apple (NASDAQ:AAPL) will begin accepting Alipay, run by Alibaba (NYSE:BABA) affiliate Ant Financial, at its local Chinese stores. While Apple's China website, iTunes store and App Store have been accepting Alipay for more than a year, the new deal will make it the first third-party mobile payment system to be accepted at any physical Apple store worldwide.
Samsung Electronics has decided to invest in a second memory chip line at its production facilities in South Korea, Yonhap reports. Analysts say if the second semiconductor manufacturing line is completed on a schedule that is common in the industry, Samsung (OTC:SSNLF) is expected to mass produce chips from the newly built line around 2020, which can soften prices of memory chips.
For the first time in its history, Google's parent company, Alphabet (GOOG, GOOGL), listed "misleading" information and "objectionable content" from third-parties in the risks section of its annual 10-K filing. 2017 was a tough year for many of the major tech firms, which got slammed for allowing Russian election meddling, spreading hateful content and creating addictive products.
Need for improvement? Spotify (Private:MUSIC) had revenue of €1B in the third quarter, but still recorded an operating loss between €70M-€90M, according to The Information. With a direct listing expected in the first half of 2018, the company must convince investors it will continue to grow quickly and improve margins in order to justify a valuation on public markets of more than $20B.
Tronc is in advanced talks to sell its troubled flagship newspaper, the Los Angeles Times, to billionaire biotech investor Dr. Patrick Soon-Shiong for around $500M. The deal being discussed also includes the San Diego Union-Tribune and a handful of community papers in southern California. Tronc (NASDAQ:TRNC) also owns the Chicago Tribune, Baltimore Sun and New York Daily News.
Business Wire, the press-release service owned by Berkshire Hathaway (BRK.A, BRK.B), has been working to mitigate a cyberattack that's caused slowness on its systems for almost a week. The company has suffered a distributed denial-of-service attack since Jan. 31, according to spokesman Neil Hershberg, who added that "there's no evidence of any information being compromised."
U.S. Treasury Secretary Steven Mnuchin wants to know how the CFPB is handling an investigation into the Equifax (NYSE:EFX) breach following a report that the agency put its probe on ice. "I haven't spoken to Director Mulvaney about it but I will," he told the House of Representatives Financial Services Committee. Mnuchin also said he has taken the lead on bringing together federal government agencies to coordinate regulation of cryptocurrencies.
Allergan (NYSE:AGN) +1.8% reporting a migraine trial success.
Chipotle (NYSE:CMG) -5.4% AH with only a slight rise in sales.
General Motors (NYSE:GM) +5.9% following high hopes for 2018.
Gilead Sciences (NASDAQ:GILD) -2% AH on a weak revenue outlook.
Snap (NYSE:SNAP) +21.4% AH adding user growth in North America.
Walt Disney (DIS) +2.9% AH amid a big quarter for theme parks.
In Asia, Japan +0.2%. Hong Kong -0.9%. China -1.8%. India -0.3%.
In Europe, at midday, London +0.4%. Paris +0.8%. Frankfurt +0.7%.
Futures at 6:20, Dow -1%. S&P -1%. Nasdaq -1%. Crude -0.2% to $63.24. Gold +0.1% to $1330.80 Bitcoin +7.5% to $8277.
Ten-year Treasury Yield flat at 2.77%
Today's Economic Calendar
6:00 Fed's Kaplan speech
7:00 MBA Mortgage Applications
10:30 EIA Petroleum Inventories
11:15 Fed's Evans: Monetary Policy
1:00 PM Results of $24B, 10-Year Note Auction
3:00 PM Consumer Credit