Wednesday’s Market Prepper

Wednesday's Market Prepper





Tuesdays  Unusual Option Action





U.S. equity index futures are set to begin the day on a relatively mixed note as investors pause for breath amid an extremely busy week for corporate earnings. The Dow Jones industrial average ticked sharply higher in the previous session, closing up 167.8 points following positive quarterly results from Caterpillar (NYSE:CAT) and 3M (NYSE:MMM), while U.S. Treasury yields hit their highest since March. On the radar for today are results from Boeing (NYSE:BA), Coca-Cola (NYSE:KO), GlaxoSmithKline (NYSE:GSK), Visa (NYSE:V), Walgreens (NASDAQ:WBA), Sprint (NYSE:S) and Amgen (NASDAQ:AMGN).


As China's Communist Party Congress wraps up in Beijing, President Xi Jinping broke with tradition by unveiling a new leadership lineup that included no clear potential heirs, raising the chances that he might seek to stay in office beyond 2022. What does it mean for investors? They hope a stronger Xi will now be able to push through bold economic and financial reforms as he also enshrined his name and doctrine into the party's constitution. Shanghai +0.3% to 3,398.

Call it a bailout, call it recapitalization, but India's government will pump 2.11T rupee ($32.4B) into state-run banks over two years - a possible "game changer" for the country's bad loans problem. The move is aimed at reviving investment amid a slowdown in the economy and giving a boost to a sector grappling with rising non-performing assets.

At an event in Riyadh meant to highlight the kingdom's influence in the business world, Crown Prince Mohammed bin Salman told investors that Saudi Arabia was returning to "moderate" Islam and intended to "eradicate" extremism. The comments follow announced reforms on women's rights, plans to sell a stake in Saudi Aramco and creation of the world's largest sovereign wealth fund.

The Kurdistan Regional Government has offered to freeze the results of last month's independence referendum that triggered deadly clashes with government troops and hurt oil exports. Looking to defuse the crisis, the KRG also proposed an immediate ceasefire and negotiations with Baghdad "on the basis of the constitution."

The U.K. economy grew by 0.4% in Q3, bringing the year-on-year growth rate to 1.5%, and potentially boosting the chances of a rate hike by the Bank of England. Prior to the release, sterling was trading very slightly down against the U.S. dollar at $1.3129, but quickly turned higher on the data, up 0.5% to 1.3204.

Vice President Mike Pence cast a tie-breaking Senate vote late Tuesday to block new regulations allowing U.S. consumers to sue their banks, handing a big victory to Wall Street and other big financial institutions. By defeating the rule, Republicans are dismantling a major effort of the Consumer Financial Protection Bureau, the watchdog created by Congress in the aftermath of the financial crisis.


Canada pushed Bombardier to make a deal with Airbus (OTCPK:EADSY) for its CSeries planes to thwart a potential venture with Chinese investors, Reuters reports. The government signaled its preference after Bombardier (OTCQX:BDRAFOTCQX:BDRBF) failed to reach an agreement with Boeing (BA) earlier this year that would have given the U.S. company a stake in the CSeries program.

Hospital del Nino is the "first of many" solar and storage projects going live in Puerto Rico as Tesla (NASDAQ:TSLA) makes good on its promise to help the island rebuild its energy grid after Hurricane Maria. Governor Ricardo Rossello and Puerto Rican Chief Innovation Officer Glorimar Ripoli have proposed turning the territory into a flagship example of what Tesla's solar technologies can do for the world.

Toyota's solid-state battery technology under development could be a "game changer" for pure EVs, but that does not mean the automaker is moving away from hydrogen-powered fuel cell vehicles, EVP Didier Leroy said at the Tokyo Motor Show. Toyota (NYSE:TM) is also scaling back on its plans to build a new plant in Mexico, reducing its investment by 30% and cutting output capacity by 50%, according to Nikkei Asian Review.

Industrial suppliers, including W.W. Grainger (NYSE:GWW) and Fastenal (NASDAQ:FAST), slumped 5.3% and 3.6%, respectively yesterday in response to Amazon's (NASDAQ:AMZN) launch of Business Prime Shipping, an annual membership for business customers in the U.S. and Germany. "Millions" of items are eligible for the new service. Amazon Business announced that it surpassed 1M customers in July.

Just months after a similar decision by Campbell Soup (NYSE:CPB), Nestle (OTCPK:NSRGY) is leaving the Grocery Manufacturers Association, a lobby group that represents hundreds of food companies in Washington. The move comes during a tumultuous time for food manufacturers facing new labeling requirements, like GMO ingredients and nutrition values, as consumers shun conventional packaged food.

At least three bidders are expected to be shortlisted for the second round of an auction for Unilever's (ULUN) margarine and spreads business, which could be worth more than $7B. While a Bain Capital-led group, KKR and Apollo (NYSE:APO) are likely to proceed, a joint offer from Blackstone (NYSE:BX) and CVC Capital, as well as BC Partners, which bid on its own, are no longer in the fray.

More ICOs? (NASDAQ:OSTK+2.3% premarket after announcing that its unit (tZERO) will launch an initial coin offering next month. The statement from Chairman Patrick Byrne came at the Money 20/20 conference in Las Vegas. tZERO’s coin offering will be legally compliant with the SEC using an instrument called the Simple Agreement for Future Tokens.

As political pressure mounts on social media companies to say where ads are coming from, Twitter (NYSE:TWTR) said it will reveal more information about political advertising on its platform. Users will be able to see identities of buyers, targeting demographics and total ad spend by election advertisers. Twitter is also scheduled to testify on Capitol Hill next week about Russian influence on its network.

Apple, which recently said it was including wireless charging in its iPhone X (NASDAQ:AAPL) and iPhone 8 smartphones that begin pre-sales on Friday, has acquired New Zealand firm PowerbyProxi that designs wireless power products for consumers and industry. Wireless charging allows users to recharge devices by placing them on a pad or other surface rather than inserting them in a cradle or attaching a cable.

Hulu CEO Mike Hopkins is leaving to become chairman of Sony Pictures Television (NYSE:SNE), while board member Randy Freer will succeed him. The service - owned by Comcast (NASDAQ:CMCSA), Disney (NYSE:DIS), Time Warner (NYSE:TWX) and 21st Century Fox (NASDAQ:FOX) - last disclosed its total number of subscribers 17 months ago; at the time, the figure stood at 12M. In comparison, Netflix (NASDAQ:NFLX) announced last week that it now has 51M paying U.S. subscribers.

On speed dial... T-Mobile (NASDAQ:TMUS) and Sprint (S) are laying the groundwork for special committees of their board of directors to decide on a merger, Reuters reports. The boards are important because the companies are majority owned by Deutsche Telekom (OTCQX:DTEGY) and SoftBank (OTCPK:SFTBY), and could be left vulnerable to potential lawsuits from minority shareholders if they don't establish independent mechanisms to review the deal.

Today's Markets 
In Asia, Japan -0.5%. Hong Kong +0.5%. China +0.3%. India +1.3%.
In Europe, at midday, London -0.2%. Paris +0.3%. Frankfurt flat.
Futures at 6:20, Dow flat. S&P -0.1%. Nasdaq -0.1%. Crude -0.3% to $52.29. Gold -0.4% to $1273.50.
Ten-year Treasury Yield +4 bps to 2.44%

Today's Economic Calendar
7:00 MBA Mortgage Applications
8:30 Durable Goods
9:00 FHFA House Price Index
10:00 New Home Sales
10:30 EIA Petroleum Inventories
11:30 Results of $15B, 2-Year FRN Auction
1:00 PM Results of $34B, 5-Year Note Auction

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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