Wednesday Morning Reads
- Dollar Rallies
- Morning Perspective
- 24 Rules To Succeed
- Dating Doldrums
- Bulls Fleeing
- 16 Stocks To Watch
- Tricky Navigation
- Afraid of This
- Apple set for big day after results
- Amazon challenges Walmart on Flipkart
- Match, IAC react to Facebook dating
- U.S. trade team heads to China
- Fujifilm objects to Xerox settlement
- Investors eye Treasury refunding report
- More Prime perks at Whole Foods
- Rusal gains path to escape sanctions
Tweet of the morning:
US 10 yr yields - Weekly and daily DeMark counts are all showing 9, 13, 9 potential top patterns and the monthly DeMark is completing a monthly 9. This strongly shifts the probabilities to an end to the rise in yields. Meanwhile, everyone is short or underweight by record amounts pic.twitter.com/1AwDW24Dkp
— Raoul Pal (@RaoulGMI) May 1, 2018
Open Interest Changes:
Unusual Option Action:
The FOMC will likely hold interest rates steady this afternoon after concluding a two-day monetary policy meeting, but is expected to hint to lifting borrowing costs in June on the back of rising inflation and low unemployment. Investors have also priced out the chance of a hike, given the central bank's adherence in recent years to only raising rates at meetings that are followed by press conferences.
Traders will also be eyeing the Treasury's refunding announcement, which will map out the government's plans to fund its rising budget deficit. Adding to last quarter's acceleration, many predict another across the board lift in note and bond auction sizes, as well as an increase in inflation-linked debt sales. More bonds theoretically means more upward pressure on market interest rates.
A U.S. delegation led by Treasury Secretary Steven Mnuchin is on its way to China to discuss economic matters and the trade deficit. "Very much like North Korea, this should have been fixed years ago," President Trump wrote in a tweet. Ahead of the meeting, China weakened its daily yuan fixing to 6.3670 per dollar, more than expected by analysts, giving it a bargaining chip to strengthen the currency if needed.
"Tightening liquidity, trade tensions and ongoing structural issues mean that Middle Eastern nations are facing a multitude of challenges," according to the IMF. "The region should accelerate key economic reforms... If interest rates will continue to go up and liquidity will be less available, this will affect countries with a high level of debt - mainly oil importing countries where the average debt exceeds 80%."
A response? "Higher oil prices will only help reduce the deficit and build reserves," but won't change the pace of Saudi Arabia's reforms, Finance Minister Mohammed bin Abdullah Al-Jadaan told CNBC. The comments come as Moody's reaffirmed Saudi's "A1" credit rating and "stable" outlook amid "substantial external liquidity buffers, a large stock of proved oil reserves and prudent financial system regulation."
Growth in the eurozone hit its slowest pace in a year and a half, growing by 0.4% in Q1, confirming fears in the bloc after a stronger than expected 2017. The question facing policymakers now is whether the slowdown will prove temporary or marks the start of a more pronounced downturn. Mario Draghi said last week that the ECB would watch the data in the months ahead with "caution."
Tense day for Theresa May. The prime minister is facing a confrontation from Brexiteers over her support for a new hybrid "customs partnership," which would see Britain continue to collect EU tariffs for goods headed to member states. Sixty Tory MPs wrote to her ahead of today's Brexit cabinet committee meeting, warning that the proposal would make it "impossible" to strike meaningful trade deals and could cause the "collapse" of the government.
Apple shares rose more than 3% in after-hours trading as the iPhone X and services segment had their best quarter ever. The combination drove total revenue up 16% to $61.1B in the latest period, while profit soared 25% to $13.8B, its highest level for a March quarter. Apple (NASDAQ:AAPL) also flexed its financial muscle with a record $100B stock buyback plan.
Mark Zuckerberg has announced a new dating service on Facebook (NASDAQ:FB) even as the social network battles questions about how it handles user data. The feature will require users to opt in, he told the F8 developer conference, and was "designed with privacy in mind." Match Group (NASDAQ:MTCH) - parent of Tinder, OkCupid and Match.com - took a beating on the news, plunging 22% on Tuesday, while its majority owner, IAC/InterActiveCorp (NASDAQ:IAC), lost more than 17%.
Just as Walmart (NYSE:WMT) entered final negotiations to buy a majority stake in Flipkart (FPKT) for $12B, Amazon (NASDAQ:AMZN) has once again tossed its hat in the ring, CNBC TV18 reports. The retail giant has made a formal offer to pick up a 60% stake, a breakup fee of up to $2B, as well as a non-compete agreement with Flipkart's founders.
Amazon is reportedly planning more Whole Foods benefits for its Prime members, like an additional 10% off of already discounted products. It already offers free delivery in some areas and 5% cash back when using its Visa rewards card for groceries. Roughly 75% of Whole Foods shoppers are Amazon (AMZN) Prime members, but less than 20% of Prime members are Whole Foods shoppers.
The drama continues... Japan's Fujifilm (OTCPK:FUJIY) has filed an objection with a U.S. court over a settlement between Xerox (NYSE:XRX) and activist shareholders who oppose a $6.1B deal between the two companies. CEO Jeffrey Jacobson and six board members have agreed to resign as part of the settlement, while executives close to Carl Icahn will be appointed in their place.
Amending its Russia sanctions program, the Trump administration has granted more time for aluminum giant Rusal (OTC:RUALF) to escape from its blacklist as it faces delisting from the London Stock Exchange this week. Rusal shares rose sharply overnight on the Hong Kong Stock Exchange, although aluminum prices dipped in Asian trading hours amid a supply scare that has rocked markets over the past month.
Verizon's Oath subsidiary has signed a deal to pre-populate four of its most popular apps - Newsroom, Yahoo Sports, Yahoo Finance and Go90 - on millions of Samsung (OTC:SSNLF) devices across the U.S. and eventually globally. "The amount of content consumption on phones is continuing to skyrocket," said CEO Tim Armstrong, adding that Samsung and Oath (NYSE:VZ) will share ad revenue under the deal.
Pets are once again welcomed aboard United (NYSE:UAL) flights, but the airline will be selective about which breeds can get on the plane. It will also not fly animals to or from some airports, including Las Vegas, during the hot summer months. More pets have died on United flights in recent years - with 18 deaths in 2017 - than on those operated by rival airlines.
The FAA has ordered more inspections of fan blades in hundreds of additional engines similar to the one that failed in a deadly Southwest Airlines (NYSE:LUV) flight last month. CFM, jointly owned by General Electric (NYSE:GE) and France's Safran (OTCPK:SAFRY), produces the CFM56 engine in factories in the U.S. and Europe. The NTSB is still investigating the accident.
California and a group of 16 other states have challenged the Trump administration's decision to revise strict vehicle emissions and fuel efficiency standards put in place under President Obama. EPA Administrator Scott Pruitt called the levels "too high" last month, proposing eight separate options to the White House. Together, the states and D.C. make up 43% of the U.S. automobile market.
Apple (AAPL) +3.7% AH with iPhone X strength, stock buyback.
Gilead (NASDAQ:GILD) -5.6% AH on slumping hepatitis C drug sales.
Merck (NYSE:MRK) -1.5% amid light revenues.
Mondelez (NASDAQ:MDLZ) +1.6% AH helped by emerging markets.
Pfizer (NYSE:PFE) -3.3% with no big transactions.
Snap (NYSE:SNAP) -14.2% AH as revenues fell short.
T-Mobile (NASDAQ:TMUS) +0.6% AH boosting subscribers growth.
Under Armour (NYSE:UAA) +1.5% lifting global sales.
In Asia, Japan -0.2%. Hong Kong -0.3%. China flat. India +0.1%.
In Europe, at midday, London +0.4%. Paris +0.1%. Frankfurt +1.1%.
Futures at 6:20, Dow +0.1%. S&P +0.1%. Nasdaq +0.3%. Crude +0.2% to $67.38. Gold +0.3% to $1310.30. Bitcoin +0.9% to $9146.
Ten-year Treasury Yield +2 bps to 2.99%