Wednesday’s Market Prepper

Wednesday's Market Prepper







Seeking Alpha:


Snap will price its IPO after today's market close in the most eagerly awaited tech offering since Alibaba (NYSE:BABA) went public in 2014. Reports suggest pricing could be $1-$2 above its $14-$16 marketing range, which would result in a valuation of $19.5B-$22.3B from listing on the NYSE. In September, the company changed its name to Snap (Pending:SNAP) from Snapchat to reflect its intent to branch out into myriad products, like Spectacles and a recently reported drone.


U.S. futures are flying higher following Donald Trump's first address to Congress. The President pledged to overhaul the immigration system, improve jobs and wages for Americans, and promised "massive" tax relief to the middle class and tax cuts for companies. He also plans to ask Congress for $1T in infrastructure investment - guided by "Buy American and Hire American" - and laid out some principles for an Obamacare replacement.

Rate hike probability keeps rising... San Francisco's John Williams said yesterday that an interest hike will be under "serious consideration" in March, while New York's William Dudley feels the case for tightening "has become a lot more compelling." All eyes are now on today's speech from Fed Governor Lael Brainard, who has been one of the most vocal advocates on the board for a slower interest-rate path.

Activity in China's manufacturing sector expanded in February, according to twin surveys, continuing the recovery seen since the second half of last year. The official PMI, compiled by the government's National Bureau of Statistics, found activity rising to a three-month high of 51.6, up from 51.3 in January. The unofficial Caixin PMI - which has a greater representation of private enterprise - rose to 51.7 vs. 51.0 on a seasonally adjusted basis.

Two former officials and a retired judge have won the right to compete to become the next leader of Hong Kong, a job that requires balancing the demands of Communist Party rulers in Beijing and growing calls for democracy at home. Former civil service chief Carrie Lam grabbed the most nominations out of a 1,200-strong committee stacked mostly with Beijing loyalists. The same committee will pick the next leader in a secret ballot on March 26.

In a press conference minutes ago, Francois Fillon confirmed he will continue in the race to become the next French president. The announcement came after he postponed his visit to the Paris Agricultural Salon, an important fixture on the campaign trail, and followed reports that his campaign manager stepped down. Fillon has been summoned by investigating magistrates over a "fake work" scandal, an inquiry he criticized as a "political assassination."


An outage at Amazon Web Services' S3 storage service disrupted internet traffic across the U.S. on Tuesday, showing the increasing power cloud companies are having over large portions of the web. "For S3, we believe we understand root cause and are working hard at repairing," AWS said in its most recent tweet. Despite the major disruption, Amazon (NASDAQ:AMZN) shares only dropped about half a percent yesterday on the news.

Apple has some products other than the iPhone on the horizon that are "essential to Apple's (NASDAQ:AAPL) growth," CEO Tim Cook said at the company's annual shareholder meeting. The tech giant is investing a "fair amount" into R&D, including "future stuff [he] can't talk about." Cook didn't go into details, but lauded investors for thinking long term, especially Warren Buffett's Berkshire Hathaway (BRK.A, BRK.B).

At the Economic Club of Washington, General Motors (NYSE:GM) CEO Mary Barra said the automaker was exploring opportunities with PSA Group (OTCPK:PEUGF), but didn't talk about a sale of Opel, which has lost money for 16 straight years. Some reports in Europe have suggested GM could have a deal with PSA as early as next week, but Barra declined to discuss a timetable.

CEO Travis Kalanick said he would seek leadership advice after a run of troubling news involving UBER, capped by a recent video of him berating one of the ride-hailing service's drivers. In a note to employees, Kalanick vowed to "grow up" and said he was "ashamed" of the behavior captured by Fawzi Kamel's dashboard camera. "This is the first time I've been willing to admit that I need leadership help and I intend to get it."

Fidelity blew up the online brokerage sector yesterday after cutting stock and ETF trading commissions to $4.95 from $7.95, following Schwab (NYSE:SCHW), which slashed its commissions to $6.95 from $8.95 in early February. Hit hardest was TD Ameritrade (NASDAQ:AMTD), which tumbled 10.5%, and immediately announced a cut in its commissions to $6.95 from $9.99. Other downward movers: E*Trade (NASDAQ:ETFC) -7.3%; Schwab (SCHW) -3.2%; Interactive Brokers (NASDAQ:IBKR) -2.6%.

Deutsche Boerse's chief executive said it was regrettable that LSE (OTCPK:LNSTY) had decided not to sell its trading platform MTS, all but ending a planned merger, but the German group could continue on its own. "We feel very well prepared as a company for the future," DB's (OTCPK:DBOEY) Carsten Kengeter declared, adding that "it's pointless to me to speculate on what the reasons behind our merger partner's decision were."

Gambling revenue in Macau surged almost 18% to 23B patacas ($2.9B) in February as more visitors came to the Chinese territory over the national new year holiday. Macau's gambling revenues have also been rising over the past seven months, buoyed by the opening of multi-billion dollar casinos by Sands China (OTCPK:SCHYY) and Wynn Macau (OTCPK:WYNMY). Related tickers: BJK, MPEL, MGM, OTCPK:MCHVF, OTCPK:MCHVY, OTCPK:GXYEF, OTCPK:SJMHF, OTCPK:SJMHY

Bayer's gain is Covestro's pain... Shares in Covestro (OTCPK:CVXTY) tumbled as much as 8.5% overnight after Bayer (OTCPK:BAYRY) placed 22M shares of the plastics company, which nearly tripled since the spinoff of the business. The sale will allow Bayer to reduce its debt pile and help fund the takeover of Monsanto (NYSE:MON), however, the placement at €66.5 a share is well below Covestro's closing price on Tuesday.

Looking to boost profitability over the next two years, Hershey (NYSE:HSY) plans to eliminate 15% of its global workforce, or around 2,700 jobs. The Pennsylvania chocolatier and other food makers have struggled in recent years with changing eating habits in the U.S. and slower economic growth in emerging markets. Hershey hopes the move will help it reach an adjusted operating profit margin as high as 23% by the end of 2019.

The chief executive of Unilever, the consumer goods group that recently rebuffed a $143B takeover proposal from Kraft Heinz (NASDAQ:KHC), was paid 20% less last year than in 2015, taking home €8.4M. The decrease follows a change in targets from long-term incentive schemes. Unilever's (UN, UL) Paul Polman has often said he would work for free and is "embarrassed" by the amount he is paid.

Mexico's telecoms regulator has discussed forcing Carlos Slim to legally separate part of his fixed-line unit Telmex from the rest of the company, a move that would intensify antitrust rules against the business. On Monday, its board voted on whether to toughen, maintain or loosen rules against America Movil (NYSE:AMX) and Grupo Televisa (NYSE:TV), and sources told Reuters they expected the proposal was on the table.

Shares of Time climbed almost 5% during extended trading after Bloomberg said the magazine company asked a number of suitors to submit their final acquisition offers by next week. According to the report, five parties have expressed interest in purchasing the firm. Two potential TIME buyers are Meredith Corp. (NYSE:MDP) and an investor group led by Edgar Bronfman Jr., while one of the other three bidders is a publicly traded company.

YouTube has unveiled a web-TV service that will offer a package of over 40 broadcast and cable channels for $35 a month, making the tech giant the latest entrant in a race to win over millions of consumers who are shifting away from traditional TV. The new service, dubbed YouTube TV (GOOG, GOOGL), is set to launch in the next few months.

Sinclair Broadcast Group has approached Tribune Media (NYSE:TRCO) for discussions about combining the companies, Reuters reports. Such a tie-up would create a sizable local broadcast station owner, with a combined market cap of about $6.6B. Aside from a straight merger, Sinclair (NASDAQ:SBGI) could be interested in parts of Tribune, such as its CW stations or the WGN America cable network. TRCO +4.5% premarket.

Tuesday's Key Earnings
Cheniere Energy (NYSEMKT:LNG) -1.8% missing earnings estimates.
Etsy (NASDAQ:ETSY) -4.4% AH following a Q4 loss.
Palo Alto Networks (NYSE:PANW) -20.4% on weak guidance.
Salesforce (NYSE:CRM) -1.4% AH giving a soft outlook.
Seadrill (NYSE:SDRL) -14.2% after a Chapter 11 warning.
Target (NYSE:TGT) -12.2% plagued by its brick-and-mortar model.
Valeant Pharmaceuticals (NYSE:VRX) -13.9% cutting guidance.

Today's Markets
In Asia, Japan +1.4%. Hong Kong +0.2%. China +0.2%. India +0.8%.
In Europe, at midday, London +0.9%. Paris +1.4%. Frankfurt +1.3%.
Futures at 6:20, Dow +0.4%. S&P +0.5%. Nasdaq +0.6%. Crude +0.2% to $54.12. Gold -0.7% to $1244.70.
Ten-year Treasury Yield +7 bps to 2.43%

Today's Economic Calendar
Auto Sales
7:00 MBA Mortgage Applications
8:30 Personal Income and Outlays
8:30 Gallup U.S. Job Creation Index
9:45 PMI Manufacturing Index
10:00 ISM Manufacturing Index
10:00 Construction Spending
10:30 EIA Petroleum Inventories
2:00 PM Fed's Beige Book
6:00 PM Fed's Reserve Gov. Lael Brainard 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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