{"id":13370,"date":"2019-08-16T07:31:38","date_gmt":"2019-08-16T12:31:38","guid":{"rendered":"http:\/\/leavittbrothers.com\/blog\/?p=13370"},"modified":"2019-08-16T07:31:38","modified_gmt":"2019-08-16T12:31:38","slug":"before-the-open-aug-16-8","status":"publish","type":"post","link":"https:\/\/blog.leavittbrothers.com\/?p=13370","title":{"rendered":"Before the Open (Aug 16)"},"content":{"rendered":"

Good morning. Happy Friday. Happy Options Expiration. <\/span>
\n The Asian\/Pacific<\/strong> markets closed mixed. China, Hong Kong, Taiwan and Thailand closed up; South Korea, New Zealand, Singapore and the Philippines closed down. Europe, Africa and the Middle East<\/strong> are currently mostly up. Denmark, Poland, France, Turkey, Germany, Russia, Finland, Switzerland, Norway, Spain, the Netherlands, Italy, Belgium, Portugal, Sweden, and Saudi Arabia are doing well. Greece and Israel are weak. Futures in the States<\/strong> point towards a moderate gap up open for the cash market. <\/span>
\n—————
\n VIDEO: <\/strong>State of the Market<\/a>
\n—————<\/span>
\n The dollar is up. Oil is up; copper is down. Gold and silver are down. Bonds are down. <\/span>
\n Stories\/News from Seeking Alpha…<\/span>
\n Equities somewhat stabilized yesterday after days of wild swings, with DJIA futures now up by 260 points and S&P 500 and Nasdaq futures ahead by 1% and 1.4%, respectively. After threatening retaliation against incoming American tariffs, China urged the U.S. to meet it “half way,” while President Trump talked up formal negotiations and said he expected the trade dispute to be short-lived. The yield curve has also righted itself by about 4 bps, while July retail sales surprisingly picked up – though industrial production numbers disappointed again – in the face of trade war fallout.<\/span>
\n Boost from Walmart, Nvidia<\/span>
\n Walmart (NYSE:WMT) was easily the biggest gainer on both the S&P and Dow on Thursday, jumping 6.1% for its largest advance in a year, after reporting a nearly 2% rise in Q2 revenues to $130B and raising full-year earnings guidance. Walmart has now racked up a 20-quarter, or five-year, streak of U.S. growth, unmatched by any other retail chain. Shares of Nvidia (NASDAQ:NVDA) are giving tech shares an extra boost premarket as the chipmaker soared more than 5% after gaming strength saw sales and profits top estimates.<\/span>
\n Stimulus bazooka<\/span>
\n A day after Hong Kong unveiled a stimulus package worth $2.4B, China’s state planner said Beijing would roll out a plan to boost disposable income, though details were lacking. Europe is also prepping a major stimulus injection, according to Olli Rehn, who sits on the ECB’s rate-setting committee. That could include “substantial and sufficient” bond purchases, cutting rates deeper into negative territory and purchasing equities under the QE program. Not much more needs to be said about the Federal Reserve, which is facing trade war problems and the inversion of the U.S. yield curve.<\/span>
\n Culpability<\/span>
\n “This is market manipulation – pure and simple” declared GE (NYSE:GE) CEO Larry Culp in response to allegations of financial misconduct, scooping up another $2M worth of stock after spending $3M on shares earlier this week. The fraud report came from Madoff whistleblower Harry Markopolos, who alleges GE’s accounting problems amount to $38B, or 40% of the conglomerate’s market value. Disclaimer: Markopolos and his colleagues are working with an undisclosed hedge fund, which is betting GE’s stock price will decline (it plunged 11.3% yesterday to $8.01 per share).<\/span>
\n Space tourism<\/span>
\n At Spaceport America, Virgin Galactic’s “Gateway to Space” building is now functionally operational, ready to host remaining test flights before welcoming its very first future astronauts. In addition, VMS Eve – the carrier mothership and launch platform for Virgin SpaceShips – arrived at the facility this week, bringing the company closer to starting commercial service. In July, Virgin Galactic said it would go public by merging with Social Capital Hedosophia (NYSE:IPOA).<\/span>
\n New largest creditor<\/span>
\n Japan has again surpassed China as America’s largest overseas creditor, a record it last held in 2016. After adding about $21B since May, Tokyo now holds $1.12T of Treasurys vs. Beijing’s $1.11T. Market players have speculated that one trade war retaliatory action China could take is to unload its U.S. holdings, and while there are no signs that is happening, it has been a less aggressive buyer of U.S. sovereign debt.<\/span>
\n Hong Kong protest fallout<\/span>
\n The territory’s economy contracted more than originally estimated in the second quarter after escalating protests dampened activity. Gross domestic product contracted by 0.4%, more than the 0.3% contraction released in the first estimate on July 31. Other big news overnight saw Cathay Pacific (OTCPK:CPCAY) CEO Rupert Hogg resign as the Hong Kong flag carrier reels from a series of controversies over the involvement of its employees in the city’s simmering anti-government protests.<\/span>
\n What else is happening…<\/span>
\n Apple (NASDAQ:AAPL) quadruples U.S. job footprint.<\/span>
\n London Stock Exchange (OTCPK:LNSTY) glitch delays open for biggest stocks.<\/span>
\n Revlon (NYSE:REV) taps Goldman (NYSE:GS) to explore strategic options.<\/span>
\n Wheat price manipulation case ends with $16M Kraft (NASDAQ:KHC)-Mondelez (NASDAQ:MDLZ) payout.<\/span>
\n Bumped passengers spike at American (NASDAQ:AAL), Southwest (NYSE:LUV) due to 737 MAX grounding.<\/span>
\n Thursday’s Key Earnings<\/strong>
\n Alibaba (NYSE:BABA) +3% posting beats, core commerce strength (earnings call transcript).
\n Applied Materials (NASDAQ:AMAT) -0.3% amid chip recovery lag (earnings call transcript).
\n J.C. Penney (NYSE:JCP) +2.2% on smaller-than-expected loss.
\n Nvidia (NVDA) +5.6% AH as gaming strength offset data center revenues.
\n Walmart (WMT) +6.1% hiking profit guidance (earnings call transcript).<\/span><\/span><\/span><\/span><\/span><\/span>
\n Today’s Economic Calendar<\/strong>
\n 8:30 Housing Starts
\n 10:00 Quarterly Services Report (Advance)
\n 10:00 Consumer Sentiment
\n 1:00 PM Baker-Hughes Rig Count<\/span><\/span><\/span><\/span><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Good morning. Happy Friday. Happy Options Expiration. The Asian\/Pacific markets closed mixed. China, Hong Kong, Taiwan and Thailand closed up; South Korea, New Zealand, Singapore and the Philippines closed down. Europe, Africa and the Middle East are currently mostly up. Denmark, Poland, France, Turkey, Germany, Russia, Finland, Switzerland, Norway, Spain, the Netherlands, Italy, Belgium, Portugal, […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[2],"tags":[],"_links":{"self":[{"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/posts\/13370"}],"collection":[{"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=13370"}],"version-history":[{"count":0,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/posts\/13370\/revisions"}],"wp:attachment":[{"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=13370"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=13370"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=13370"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}