Wednesday 1/08/2020
MORNING NOTES:
S&P’s this morning High 327.74 Low 327.15 Change higher by 0.24%.Tokyo +110.70 Hong Kong +77.20 London -7.41 Germany +33.24
S&P Futures are trading higher this morning. Key factor to watch for is the Jobs Report. The report is likely to set the tone of today’s trading day. Phase 1 of the U.S./ China Trade deal is expected to be signe 01/15. Low rates, Strong employment and a lowering of geopolitical issues are positive factors for now. Asian stocks ended broadly higher on Friday amid easing U.S.-Iran tensions and ahead of release of the U.S. Labor Department’s jobs report for December later in the day. China’s Shanghai Composite index ended marginally lower at 3,092.29 but rose 0.3 percent for the week, marking its sixth straight weekly gain ahead of the signing of a Sino-U.S. trade deal next week. European stocks are trading flat to higher this morning. France’s industrial production grew at a slower pace in November driven by the weakness in manufacturing sector, the statistical office Insee said. U.K. hiring conditions improved at the end of the year with an increase in permanent job placement.
OIL PRICES:
Oil prices are trading lower this morning. There are three factors pushing oil prices lower this morning. Cooling of Middle East tensions has reduced the threat of supply-side disruptions, The EIA data displayed a much higher than anticipated rise in stockpiles and Profit taking. The fundamentals for oil prices are bearish with the non-OPEC, non-shale production expected to increase in the coming months. Oil producers are likely to experience higher insurance premiums as the cost of insurance is likely to increase in the coming weeks. Later today, Baker Hughes will be releasing their weekly rig count figures.
WTI is at $59.44 a barrel, Brent Crude is at $65.29 a barrel.
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Economic:
The financial markets will be paying close attention to the release this morning of the jobs report, which will provide fresh clues on the health of the U.S.economy. Two Fed Bank Presidents (Minn Kashkari & St Louis Bullard) both came out with comments yesterday supporting a low rate environment for the year. Kashkari sees no reason to change interest rates in the foreseeable future unless inflation figures weaken. The Federal Reserve felt it would be able to wind down its repo operations by the end of January. Yesterday, Federal Reserve Vice Chairman Richard Clarida pushed that timeline out and said the Fed may still keeping pumping short-term money through April. The Federal Reserve Bank of New York added $83.1 billion in temporary liquidity to financial markets on Thursday.
Economic Reports:
At 08:30 am ET Jobs Report
At 10:00 am ET Wholesale Trade Report
At 01:00 pm ET Baker Hughes Rig Count figures
Fed Speak:
To access Economic news type .Economic into NewsWare.
Options Activity:
Bullish option activity in BYND, PTON & SNAP
Bearish option activity in AEO, ANF & WLL
To access news related to options type .OPTIONS into NewsWare
Sector Update: Headlines to Note-
Retail:
FL .REC Susquehanna downgrades the stock to Neutral from positive. $41 Price target (was $47).
PIR .REC Moody’s changed its outlook to Negative, expects a near term default.
URBN .REC Calls are active, Call put ratio is 5-1. Implied volatility is elevated.
FDA/Drug Makers:
LLY .MA Announced deal to acquire Dermira Inc (DERM) for $18.75 a share.
SRNE .MA Announced it has received a takeover offer of $7 a share for a private equity group.
RARE P/SGN Announced positive top line results on its phase ½ gene therapy study.
DOW 30:
GS .REC Piper lifts price target to $275 from $255.
BA P/SGN Internal employee conversations displayed concern of 737 max during development.
UNH .ERN Earnings out 01/15 before the bell, a $10 move is expected.
Rumors:
SPY P/SGN Trump may wait on the Phase 2 trade deal until after the election.
MRNA P/SGN Positive early stage results of phase 1 trial data.
GRUB .MA Company states there are no plans or process in place to sell the company.
Upcoming Earnings and yesterdays near term option volumes
