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Wednesday 2/12/2020
MORNING NOTES:      
 
S&P’s this morning        High 336.73 Low 336.30 Change +0.37%
 
Tokyo +175.23 Hong Kong +239.78 London +29.66 Germany +107.52
 
S&P Futures are positive this morning as the latest figures out of China display a decrease in infections/death. Earnings Reports and Fed Chairman Powell will be the key catalysts driving the market today.
Asian markets were higher overnight. China’s senior medical adviser feels that the coronavirus outbreak may hit a peak in China this month and the epidemic may be over by April.Trader continue to believe that China will be announcing additional stimulus measures in a continued effort to help boost the economy due to the supply chain disruptions caused by the outbreak. Chinese health officials state that the coronavirus outbreak has killed 1,113 people and infected 44,653 people. Yesterday’s figures were 1,016 killed with 42,638 people infected.
European stocks are higher this morning as media reports indicated the the spread of the virus is slowing down. President Trump said Chinese President Xi Jinping told him the deadly virus will be gone by April as temperatures begin rising.
 
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OIL PRICES:
Oil prices are trading higher this morning. Media reports of displaying a decrease in death rates/infection rates is positive news for the oil markets. The numbers indicate a 10% slowdown as compared to Monday’s figures. OPEC is still likely to push for additional cuts in its upcoming meeting, however, Libya oil production is likely to be a significant factor going forward. Libya’s oil production has seen a significant drop off due to the civil war. On Sunday, Libya’s Azzawiya Oil Refining Company said that it was ceasing refining operations for the time being because it does not have enough crude oil. Libyan oil production could recover again soon if an agreement is reached next week in Geneva. The American Petroleum Institute (API) reported that US crude inventories rose 6 million barrels for the week that ended on February 7 against analysts’ expectations for 3 million barrels to 438.9 million barrels. Later this morning the Energy Information Administration will be releasing the official stockpile figures.
 
WTI is at $50.71 a barrel, Brent Crude is at $55.16 a barrel.  
 
 
 
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Economic:    
Federal Reserve Chairman Jerome Powell is scheduled to continue his presentation today to the House Financial Services Committee. . Yesterday, he indicated that the central bank is closely monitoring the extent of global economic disruptions from the coronavirus in China. Mr. Powell feels that it is too soon to say whether the outbreak would change the central bank’s current monetary policy. “Of course, policy is not on a preset course,” he said. “If developments emerge that cause a material reassessment of our outlook, we would respond accordingly.” In addition, Mr. Powell said “We find the U.S. economy in a very good place, performing well. We see signs of global growth bottoming out.” Treasury Secretary Steven Mnuchin will be presenting a Monetary report on the 2021 budget to the Senate’s Banking committee today.
 
 
Economic Reports: 
 
At 10:00 am ET Atlanta Fed business inflation expectations.
At 10:30 am ET EIA report on crude stockpiles.
 
Fed Speak:  
At 08:30 am ET Philadelphia Fed President Patrick Harker
At 09:00 am ET San Fran Fed President Mary Daly.
At 10:00 am ET Fed Chairman Powell will be speaking to Congress.
 
 
To access Economic news type  .Economic into NewsWare.
 
 
Options Activity:                                                                            
Bullish option activity in BABA, HUYA & TEVA
Bearish option activity in ASGN, EFX & TAP
To access news related to options type .OPTIONS into NewsWare
 
 
Sector Update: Headlines to Note-
 
Retail:
TPX    To release earnings tomorrow morning, expected price move is $6.50.
CVS      Released positive earnings this morning. A 5-cent beat on higher revenue.
BBY      Multiple brokers are lowering their price targets this morning.
 
 
FDA/Drug Makers:
MRK      Announced Keytruda w/ chemotherapy met primary endpoint in study.
PRVL   Receives Orphan Drug status for Treatment of Gaucher Disease
RDY     To acquire select businesses of Wockhardt in India.
 
 
DOW 30:
CSCO    To release earnings this afternoon, expected price move is $2.40.
BA         Reported zero new orders in Jan 2020.
VZ         T-Mobile Sprint merger is a negative for Verizon says Credit Suisse
 
 
Rumors:
SPY       Coronavirus figures could be much larger than Chinese data suggests.
IFF        To release earnings this afternoon, expected price move is $9.00
EFX      To release earnings this afternoon, expected price move is $7.00.

 

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