Wednesday Morning Charts, News, Earnings, Options
- What Now?
- Restore Or Kill It for Good
- Monthly Deal Taking Toll
- What Is Blockchain?
- Winners Keep Winning
- How Buybacks Work
- Should I Time the Market?
Tweet of the morning:
Recent oil market action in a nutshell.
- Brent above $75 thanks to geopolitical risk and OPEC supply constraints.
- WTI Midland at a huge discount to Cushing. Pipelines can't keep up with the production boom.
- Iranian crude's discount to Brent's been widening. One to watch. pic.twitter.com/wJyg0bQ0Oj
— Tracy Alloway (@tracyalloway) May 9, 2018
Open Interest Changes:
Unusual Option Action:
U.S. crude has now topped $71 per barrel, soaring almost 3% overnight, after President Trump abandoned a nuclear deal with Iran and announced the "highest level" of sanctions against the OPEC member. Financial or business activities outlawed by August 6 include exports of airplanes and parts, dollar transactions, trade in gold and other metals, sovereign debt and the auto industry. By November 4, sanctions will ban oil purchases and transactions with the central bank.
"The Iran deal is not dead," declared French Foreign Minister Jean-Yves Le Drian, calling President Trump's withdrawal from the 2015 nuclear accord "an error." European nations will soon meet with Iranian officials as they urged the U.S. not to take steps that would make life harder for countries that still want to stick to the pact. Talks will also be held with oil giant Total (NYSE:TOT) and others with major business and economic stakes in the region.
Secretary of State Mike Pompeo has arrived in Pyongyang to continue preparations for an upcoming meeting between President Trump and Kim Jong-un. "The location is picked, the time and date, everything is picked," Trump said at the White House on Tuesday. Reports also suggest that three American detainees who have been held in North Korea for months will leave with Pompeo.
Echoes of 2001? Argentina's peso is in rebound mode against the dollar after the Latin American nation opened talks with the IMF over a reported $30B financial aid package. On Friday, Argentina's central bank hiked rates for the third time in eight days to a whopping 40% - the highest overnight interest rate in the world - attempting to rein in the country's rampant inflation.
Disney shares swung softly in after-hours trading on Tuesday despite a beat on top and bottom lines in fiscal Q2 earnings. ESPN proved less of a drag and once again strong Parks results and a healthy film slate carried the day. Disney (NYSE:DIS) further teased the possibility of even more "Avengers" movies and said it was confident its deal with Fox (NASDAQ:FOXA) will close.
Originally rumored to take a senior position at Disney (DIS), 21st Century Fox (FOXA) CEO James Murdoch is planning to strike out on his own upon the closing of the Mouse House-Fox deal, WSJ reports. He would likely start a venture-capital fund to invest in digital and international media businesses. Lachlan Murdoch is expected to become CEO of the remaining Fox company, so-called New Fox.
Overnight earnings roundup: AB InBev (NYSE:BUD) +2.4% premarket as growth in Latin America offset the U.S. Toyota (NYSE:TM) flagged lower annual operating profit on a higher yen, while Siemens (OTCPK:SIEGY) lifted its full-year profit guidance after a one-off gain. SoftBank (OTCPK:SFTBY) also posted record annual profits on swelling tech investments.
It's official! Walmart (NYSE:WMT) is acquiring Indian e-commerce player Flipkart (FPKT), SoftBank (OTCPK:SFTBY) CEO Masayoshi Son confirmed on the company's earnings conference call. The deal will stoke retail tensions in the region as Walmart shoots to globalize its business and build its technological arsenal. Amazon (NASDAQ:AMZN) has already committed investments to the tune of $5B for its operations in India.
Vodafone has agreed to buy operations in four European countries - Germany, Czech Republic, Hungary and Romania - from Liberty Global (NASDAQ:LBTYA). The deal, valued at €19B ($23B), would face a possibly lengthy EU antitrust review and represents the latest in a global trend toward "quad-play" packages: cable, internet, wireless and phone service on a single bill. VOD +1% premarket.
Alongside an executive shakeup focusing on communication and privacy, Facebook (NASDAQ:FB) said it will create a group that will explore ways to use blockchain technology across its products, "starting from scratch." The division will be run by Coinbase board member David Marcus, who's leaving his role as the head of the Messenger team, and will include outgoing Instagram product VP Kevin Weil.
Online jobs portal Glassdoor (GDOOR) has agreed to be acquired by Japan's Recruit Holdings (OTCPK:RCRUY) for $1.2B, the latest in a string of overseas acquisitions by Japanese companies. Recruit has been pushing to increase its offshore presence over the past few years to make up for weak prospects at home. It already gets 40% of its total revenue from foreign markets.
Major tech and aerospace companies including Amazon (AMZN), Apple (NASDAQ:AAPL), Intel (NASDAQ:INTC), Qualcomm (NASDAQ:QCOM) and Airbus (OTCPK:EADSY) are vying to take part in a new slate of drone tests set to be announced today by the U.S. Transportation Department. The pilot program will allow a much larger range of tests than are generally permitted by the FAA, including flying drones at night, over people and beyond an operator's line of sight.
AT&T has confirmed it paid $200K to President Trump's personal attorney Michael Cohen for "insights" about the Trump administration, but his shell company "did no legal or lobbying work for us, and the contract ended in December 2017." The disclosure came after Stormy Daniels' lawyer, Michael Avenatti, claimed AT&T (NYSE:T), Novartis (NYSE:NVS) and a Russian oligarch had all made payments to Cohen's "Essential Consultants."
Amid an internal investigation into inappropriate workplace behavior at Nike (NYSE:NKE), five more executives have departed the company. That makes it 11 who have exited the sportswear giant thanks to the probe. Among the group is the first woman to leave - Helen Kim, VP and general manager of Nike East, North America.
Annual meeting drama... AIG is looking to convince shareholders today to approve a $43.1M pay package for CEO Brian Duperreault. Proxy advisory firms ISS and Glass Lewis have both advised stakeholders to reject the package in the non-binding vote, saying it did not align with AIG's performance. The stock has dropped 13% since Duperreault took the company reins last May.
Takeaways from the I/O developers conference: Google (GOOG, GOOGL) executives stressed that AI was at the core of their products, showing off advancements in Gmail, Maps, and smart Assistant. The company is further revamping its news product, featuring YouTube videos and tweets, as well as traditional articles. Nvidia (NASDAQ:NVDA) was also watching as Google unveiled a third generation of AI chips.
Tesla has changed the terms of its borrowing agreement with banks to allow it to pledge its Fremont auto factory - the production hub of its Model 3 sedan - as collateral, Thomson Reuters IFR reports. The carmaker has just $543M of the $1.8B credit facility left to use, but banks periodically review the amount they are willing to lend, and Tesla (NASDAQ:TSLA) continues to burn through cash.
Boeing had deals in place for about $20B in jet sales to Iran, but its license for that will now be revoked, according to Treasury Secretary Steven Mnuchin. Not to worry? Bloomberg is reporting that United (NYSE:UAL) has held talks with Boeing (NYSE:BA) and Airbus (OTCPK:EADSY) to replace a fleet of 50 767s with the A330neo or 787 Dreamliner.
Disney (DIS) -1.2% AH seesawed after strong studio, Parks results.
Electronic Arts (NASDAQ:EA) +2.5% AH wrapping up a record year.
JD.com (NASDAQ:JD) -4.6% amid higher costs.
LendingClub (NYSE:LC) +3.2% AH ramping up loan volumes.
Occidental (NYSE:OXY) +2.8% AH bringing back its buyback.
TripAdvisor (NASDAQ:TRIP) +17.8% AH following an upbeat quarter.
Marriott (NYSE:MAR) -1.3% AH as revenues fell short.
Valeant (NYSE:VRX) +8.9% raising guidance.
In Asia, Japan -0.4%. Hong Kong +0.4%. China -0.1%. India +0.3%.
In Europe, at midday, London +0.5%. Paris -0.1%. Frankfurt flat.
Futures at 6:20, Dow +0.5%. S&P +0.4%. Nasdaq +0.3%. Crude +2.8% to $71.01. Gold -0.5% to $1307.40. Bitcoin -0.5% to $9135.
Ten-year Treasury Yield +3 bps to 3%
Today's Economic Calendar
7:00 MBA Mortgage Applications
8:30 Producer Price Index
10:00 Wholesale Trade
10:30 EIA Petroleum Inventories
1:00 PM Results of $25B, 10-Year Note Auction
1:15 PM Fed's Bostic Speech