MORNING NOTES:
S&P futures are trading fractionally lower in a quiet session this morning. Media is talking up the yield on the 30yr bond hitting a record low and the likelihood of a no-deal Brexit. There’s no specific timeline on the 2 to 10yr yield curve inversions and rescissions, making it a media talking point as compared to a fact. However, it is still negative on the financial markets this morning. A no-deal Brexit seems likely as Brittan’s Prime Minister is looking to suspend parliament to push his agenda forward. Overnight in Asia, market indexes were mostly lower. China’s Shanghai index was lower by 1.35%. Hong Kong markets continued to show weakness due to political uncertainty as the street protests are now in their 3rd month. Trading in the European markets is lower on the Brexit news,
S&P’s Overnight High 287.67 Low 286.40 % Change lower by 0.38
| Asia | Close | Change | %Change | Europe | Close | Change | %Change | |
| Tokyo | 20479.42 | 23.34 | 0.11 | London | 7064.53 | -25.05 | -0.35 | |
| Hong Kong | 25615.48 | -48.59 | -0.19 | Germany | 11585.82 | -144.20 | -1.23 |
Oil Prices:
Oil prices are higher this morning. After the close yesterday, the American Petroleum Institute released its estimated stockpile figures. Their data indicates the largest drawdown in stockpiles since June of more than 11 million barrels. With the rig counts dropping, less oil is being produced creating a bullish sentiment for crude. Later today, the official stockpile data figures will be released by the Energy Information Administration. OPEC and its members have been over complying with the output quotas. OPEC’s Joint Ministerial Monitoring Committee released a statement indicating that compliance with the production curbs is at 159%. The Trump administration is seeking talks with the Iranian backed Houthis group to broker a de-escalation of tensions in the middle east. The group is said to have been behind the drone attacks on the Saudi oil fields and oil tankers.
WTI is at $55.71 a barrel, Brent Crude is at $60.16 a barrel.
For news on oil type in .OIL or “OPEC” into NewsWare.
Economic:
Brexit is dominating the economic headlines this morning. The UK’s Prime Minister, Boris Johnson is said to have sought the Queen’s permission to suspend parliament from Sept 9th through Oct 14th. This action is seen as an indication that a no-deal Brexit is likely to happen. As a result, the pound dropped as much as 1.1%. The conflicting reports on the weather or not Trade Talks will be held between the U.S. & China in Sept is creating a sense of uncertainty and the markets typically retract when risk level increases. Fed spokeswoman Michelle Smith dismissed a comment made by former NY Fed President William Dudley where he urged the Fed to reconsider its apolitical approach and suggested that a cut interest rate is needed to counteract the negative effects of Trump’s trade war with China is having on the economy. Ms. Smith went on to say that political considerations play absolutely no role in the Fed’s decision-making process.
Economic Reports:
At 10:00 am ET State Street Investor Confidence Index
At 10:30 am ET EIA stockpiles report.
Fed Speak:
At 12:20 pm ET Fed Bank of Richmond President Thomas Barkin to speak.
At 5:30 pm ET SF Fed President Mary Daly will be speaking on Inflation targeting.
To access Economic news type .Economic into NewsWare.
Options Activity:
Bullish option activity in ATVI, COST & TWTR
Bearish option activity in ALL, BC & CWH
To access news related to options type .OPTIONS into NewsWare
Sector Update: Headlines to Note
Retail
TIF .ERN Beats by 7cents after estimates were lowered on the quarter, net sales were flat.
COST P/SGN Opens the 1st store in China. The opening has said to have brought massive crowds.
ROST .REC UBS raises its price target to $104 from $95.
FDA / Drug Markets
LCI P/SGN Exclusive agreement to be the distributor of Posaconazole with Sinotherapeutics.
AZN P/SGN Announced Phase 3 Ethos trial meets primary endpoints.
VKTX .CC Announced that they will be participating in 2 upcoming investor conferences.
Dow 30
BA P/SGN CEO says co. has the financial capacity to manage the 737 Max fallout.
JPM P/SGN Appeals court reopens the case against GS & JPM on Aluminum prices.
UTX .CC Mgmt to meet with William Blair in Bristol, CT tomorrow.
FANG
GOOG P/SGN U.S. Gov seeking to block the undersea cable project of GOOG and a Chinese partner.
FB P/SGN Tightens its rules on political advertisers, as ad’s prices surge.
AMZN P/SGN Said to be holding talks with Indonesian tide hailing company Gojek.
Rumors
SPY .P/SGN Trump wants to block subpoena allowing Deutsche Bank to provide his tax returns.
MDT CEO CEO said to retire in April of 2020.
TITN .ERN Straddle is priced for a $2.18 move – earnings are announced tomorrow morning.
As always, please use protective buy and sell stops when trading futures and options.
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