{"id":13430,"date":"2019-09-16T08:00:45","date_gmt":"2019-09-16T13:00:45","guid":{"rendered":"http:\/\/leavittbrothers.com\/blog\/?p=13430"},"modified":"2019-09-16T08:00:45","modified_gmt":"2019-09-16T13:00:45","slug":"before-the-open-sep-16-8","status":"publish","type":"post","link":"https:\/\/blog.leavittbrothers.com\/?p=13430","title":{"rendered":"Before the Open (Sep 16-20)"},"content":{"rendered":"

Good morning. Happy Friday. Happy Options Expiration Day. <\/span>
\n The Asian\/Pacific<\/strong> markets leaned to the upside, but movement was minimal. South Korea and India did well while Hong Kong and the Philippines lagged. Europe, Africa and the Middle East<\/strong> currently lean up, but there are no big movers. South Africa, Norway, Spain, Belgium and Saudi Arabia are up; Greece and Portugal are down. Futures in the States<\/strong> point towards a positive open for the cash market. <\/span>
\n—————
\n VIDEO: <\/strong>The Fed, Overnight Rates, Fed Funds Rate – What is all this stuff?<\/a>
\n—————<\/span>
\n The dollar is up. Oil and copper are up. Gold and silver are flat. Bonds are down. <\/span>
\n Stories\/News from Seeking Alpha…<\/span>
\n The short-term funding market has apparently not yet recovered from the hysteria seen at the start of the week, which saw repo rates skyrocket to 10%. The New York Fed will conduct another $75B repurchase operation this morning, its fourth in as many days, to help maintain the federal funds rate within the target range of 1.75%-2.00%. While the cause of the interest rate spike remains a mystery, most are suggesting that the Fed’s earlier balance sheet reduction left the market with too few dollars relative to Treasuries held by financial institutions.<\/span>
\n Futures up modestly<\/span>
\n The U.S. is temporarily exempting more than 400 types of Chinese products – like Christmas lights, plastic straws and printed circuit boards – from tariffs, according to documents set to be published today by the U.S. Trade Representative. The exemptions stem from more than 1,100 exclusion requests made by American companies and other entities, with the move keeping U.S. stock futures in the green, but not by much (up 0.2%). More economic stimulus? China overnight cut its new one-year benchmark lending rate for the second month in a row, taking a more accommodative stance due to the Sino-U.S. trade war.<\/span>
\n Stir the brew<\/span>
\n It’s quadruple witching day, which refers to the simultaneous expiration of market index futures, stock futures, market index options and stock options. The event can lead to higher volatility and more trading volume, giving speculators an opportunity for quick arbitrage opportunities. It also happens four times during the year – on the third Friday of March, June, September and December – and has been historically positive for the markets.<\/span>
\n GM strike continues<\/span>
\n Officials from the United Auto Workers union are saying talks with General Motors (NYSE:GM) aimed at ending a four-day nationwide strike are likely to extend into the weekend. The walkout of 48,000 UAW members has rippled through GM’s supply chain, triggering temporary layoffs at its assembly plant in Oshawa, Ontario, as well as the carmaker shifting healthcare insurance costs to the UAW. GM shares are off 0.3% premarket to $37.68\/share on the news, extending the stock’s decline since the strike action began last week to around 3%.<\/span>
\n iPhone 11 goes on sale<\/span>
\n Lines are forming outside major Apple (NASDAQ:AAPL) stores across the globe as shoppers line up to score the newest models of the iPhone 11. Analysts are betting the new smartphone will be a key sales driver for the tech giant heading into the holiday season, with JPMorgan expecting iPhone 11 shipments to reach 184M units in 2019 and 195M units in 2020. Others focused in on the device’s aggressive pricing in U.S. dollars, which was discounted to previous rollouts, and the impact it would have on Apple’s overall profit margins.<\/span>
\n Eighth death linked to vaping<\/span>
\n Another person has died from a vaping-related lung disease, bringing the nationwide death toll to eight. The Missouri man’s lungs were unable to provide enough gas exchange, leading to heart failure and near cardiac arrest (he later died from acute respiratory distress syndrome). Vaping-related illnesses have so far sickened 530 people, according to the CDC, with more than half of those patients under the age of 25.<\/span>
\n Improving rare earth supply<\/span>
\n President Trump and Australian Prime Minister Scott Morrison are set to release a plan today aimed at securing the supply of rare earth minerals amid growing concerns that China could cut off shipments of the treasured commodities. Rare earths are a group of 17 chemical elements used in everything from high-tech consumer electronics to military equipment. Australia contains only 2.8% of the world’s rare earth reserves but accounts for more than half of the new projects in the global pipeline.<\/span>
\n Prime energy<\/span>
\n Ahead of today’s big global climate strike that is urging an “end to the age of fossil fuels,” Amazon (NASDAQ:AMZN) placed an order for 100K electric delivery vehicles from Rivian. Prototypes of the new vans are expected to take to the road next year, with the entire order being deployed within five years. Current goals? Amazon plans to convert its delivery fleet to 100% renewable energy by 2030 and already runs 40% of its fleet on renewable energy.<\/span>
\n Drone deliveries put to the test<\/span>
\n Walgreens (NASDAQ:WBA) and FedEx (NYSE:FDX) are partnering with Alphabet’s (GOOG, GOOGL) Wing drone business in a new test delivery program. It will see food and beverages, over-the-counter medications and other household items be eligible to be delivered by drones in Christiansburg, Virginia this October. The city was selected as the test market, as Wing has been working closely with nearby Virginia Tech in Blacksburg to explore drone delivery as part of a DOT test program.<\/span>
\n What else is happening…<\/span>
\n ‘We can have a deal’ on Brexit – EU’s Juncker<\/span>
\n Google (GOOG, GOOGL) to invest \u20ac3B in European data centers.<\/span>
\n Shareholders on the line in rival PG&E (NYSE:PCG) bankruptcy plan.<\/span>
\n Airbnb (AIRB) to go public next year.<\/span>
\n Beyond Meat (NASDAQ:BYND) hires Tesla (NASDAQ:TSLA) exec for COO post.<\/span>
\n Stock exchange battle will heat up in 2020.<\/span>
\n Thursday’s Key Earnings<\/strong>
\n Darden (NYSE:DRI) -5.1% giving a soft outlook.<\/span><\/span>
\n Today’s Economic Calendar<\/strong>
\n 8:15 Fed’s Williams: \u201cTying Down the Anchor: Monetary Policy Rules and the Lower Bound on Interest Rates\u201d
\n 11:20 Fed’s Rosengren: \u201cCredit markets\u201d
\n 1:00 PM Baker-Hughes Rig Count
\n 1:00 PM Fed’s Kaplan Speech<\/span><\/span><\/span><\/span><\/span>
\n——————
\n Good morning. Happy Thursday. <\/span>
\n The Asian\/Pacific<\/strong> closed mixed. Japan, China, South Korea and Australia did well while Hong Kong, India, Indonesia and Thailand were weak. Europe, Africa and the Middle East<\/strong> currently lean to the upside. The UK, France, Finland, Spain, Italy, Austria, Sweden and Saudi Arabia are up; Poland and Turkey are down. Futures in the States<\/strong> point towards a flat open for the cash market. <\/span>
\n—————
\n VIDEO: <\/strong>The Fed, Overnight Rates, Fed Funds Rate – What is all this stuff?<\/a>
\n—————<\/span>
\n The dollar is down. Oil and copper are up. Gold and silver are down. Bonds are up. <\/span>
\n Stories\/News from Seeking Alpha…<\/span>
\n Wall Street futures are slightly lower, down 0.3%, after ending roughly flat on Wednesday as traders digested a 25 bps rate cut from a divided Federal Reserve. While the “moderate” policy seemed to disappoint markets, Jerome Powell highlighted that “if the economy does turn down, then a more extensive sequence of rate cuts could be appropriate.” U.S. and Chinese deputy trade negotiators are also set to resume face-to-face talks today for the first time in nearly two months, aiming to lay the groundwork for high-level discussions in early October.<\/span>
\n As it happened…<\/span>
\n Powell’s cautious rhetoric drew fresh criticism from President Trump, who tweeted, “Jay Powell and the Federal Reserve Fail Again…No ‘guts,’ no sense, no vision!” It’s also important to note the increasing gap in what policymakers are thinking. “It’s a testament of how uncertain things are, and there\u2019s a difference of views, whether it\u2019s on the trade war or how monetary policy in Europe will shake out,” said Ben Jeffrey, rate strategist at BMO.<\/span>
\n Cut, hold or raise?<\/span>
\n The Swiss National Bank kept its policy rate and deposit rate at minus 0.75% overnight, declining to join a global move that’s seen monetary loosening by the ECB and the Fed in the past week. Also living in negative rate land, the Bank of Japan held off from offering more stimulus as some had hoped, though it called for a re-examination of prices and the economy at its October meeting. Next up is the Bank of England, which is expected to stand pat due to elevated Brexit uncertainty, but it will be interesting to see if the minutes suggest any tweaks to its forecasts.<\/span>
\n Calming the repo market<\/span>
\n The New York Fed is offering an overnight repurchase agreement operation for the third day in a row, injecting $75B into a vital corner of finance to restore order in the banking system. The temporary liquidity follows the Fed’s reduction in the interest rate on excess reserves, or IOER, another attempt to quell money-market stresses. The prior operations have soothed markets, with repo rates declining Wednesday to more normal levels after jumping to 10% on Tuesday, four times where they were last week.<\/span>
\n ‘Special economic zone’<\/span>
\n In a move that would replace the contentious Irish backstop, Boris Johnson could designate Northern Ireland as a “special economic zone,” according to British officials. A meeting with the EU’s Jean-Claude Juncker this week saw “no progress” on the backstop, an insurance policy to maintain an open border in Ireland. Meanwhile, Britain’s Supreme Court today will hear a third and final day of legal arguments on whether Johnson acted unlawfully when he suspended parliament in the run-up to Brexit.<\/span>
\n Seeking to pause opioid suits<\/span>
\n OxyContin maker Purdue Pharma has asked a U.S. bankruptcy judge to halt for roughly nine months more than 2,600 lawsuits alleging the company and its controlling Sackler family helped fuel the U.S. opioid crisis. An injunction would preserve money that would otherwise be drained through prolonged legal battles, according to the company, which is spending more than $5M a week in legal fees and related expenses. “This filing isn’t a surprise. It’s yet another effort by Purdue to avoid accountability and shield the Sackler family fortune,” said Massachusetts AG Maura Healey, who has sued both the company and family members.<\/span>
\n Is AT&T exploring DirecTV split?<\/span>
\n There are some conflicting reports, but a possible deal might come via a spin-off or combination with Dish Network (NASDAQ:DISH). The rumors follow a couple of weeks of pressure from activist Elliott Management over AT&T’s (NYSE:T) heavy acquisitions of DirecTV and Time Warner. Regulatory issues, however, might make a combination with Dish Network difficult (the federal government already rejected a Dish\/DirecTV merger proposal in 2001). T +0.5%; DISH +1.2% premarket.<\/span>
\n Apple loses another top exec<\/span>
\n Steve Dowling, the head of Apple’s (NASDAQ:AAPL) public relations department, will be leaving this week, marking the third top executive to leave the tech giant this year. Retail boss Angela Ahrendts announced her departure in February, while Apple’s legendary design boss Jony Ive resigned in June. Disney (NYSE:DIS) CEO Bob Iger also submitted his resignation from Apple’s board last week as the two companies prepare to launch rival video streaming services this November.<\/span>
\n Top safety rating<\/span>
\n Tesla’s (NASDAQ:TSLA) Model 3 has earned the top safety rating from the Insurance Institute of Highway Safety, becoming the first Tesla to do so. The company’s cars generally rank among the most expensive vehicles to insure – due to their high repair costs for components and sensor equipment – prompting Tesla last month to launch an insurance service in California. The EV maker hopes to offer lower rates in the state, its biggest market, because of the safety features on its vehicles.<\/span>
\n What else is happening…<\/span>
\n Microsoft (NASDAQ:MSFT) hikes dividend, launches $40B buyback.<\/span>
\n Amazon (NASDAQ:AMZN) rolls out cash payment options.<\/span>
\n What to expect as Apple’s (AAPL) iOS 13 gets released.<\/span>
\n Pennsylvania next to join suit against Sprint (NYSE:S)-T-Mobile (NASDAQ:TMUS).<\/span>
\n India bans production, import, distribution of e-cigarettes.<\/span>
\n Deutsche (NYSE:DB) discussed adding assets to bad bank.<\/span>
\n Airbnb (AIRB) second-quarter revenue tops $1B.<\/span>
\n FAA chief won’t recertify the 737 MAX (NYSE:BA) until he flies the plane.<\/span>
\n Wednesday’s Key Earnings<\/strong>
\n General Mills (NYSE:GIS) -0.9% on mixed FQ1 results.<\/span><\/span>
\n Today’s Economic Calendar<\/strong>
\n 8:30 Initial Jobless Claims
\n 8:30 Philly Fed Business Outlook
\n 8:30 Current Account
\n 10:00 Existing Home Sales
\n 10:00 Leading Indicators
\n 10:30 EIA Natural Gas Inventory
\n 4:30 PM Money Supply
\n 4:30 PM Fed Balance Sheet<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span>
\n——————
\n Good morning. Happy Wednesday. Happy Fed Day. <\/span>
\n The Asian\/Pacific<\/strong> markets closed mixed. China, South Korea, Taiwan and Indonesia posted gains while Japan, New Zealand and Thailand posted losses. Europe, Africa and the Middle East<\/strong> currently lean to the upside. Poland, Greece, Norway, Hungary, Italy, Israel, Sweden and Saudi Arabia are up; the UAE, South Africa and Portugal are down. Futures in the States<\/strong> point to a down open for the cash market. <\/span>
\n—————
\n VIDEO: <\/strong>How To Trade When you Miss the First Move<\/a>
\n—————<\/span>
\n The dollar is up. Oil and copper are down. Gold and silver are down. Bonds are up. <\/span>
\n Stories\/News from Seeking Alpha…<\/span>
\n The FOMC is expected to trim interest rates today for the second time in 2019, but the question is whether Jerome Powell will give markets what they want to hear regarding plans for future cuts. While economic data in the U.S. has been stronger than expected, the central bank is attempting to buy an insurance policy against slowing growth due to fallout from the U.S.-China trade war, Brexit and geopolitical tensions. Mid-cycle adjustment or second step in an easing cycle? Traders are holding their breath ahead of Powell’s presser, and accompanying dot plot, as U.S. stock index futures hug the flatline.<\/span>
\n Repo, we have a problem<\/span>
\n Policymakers have been thrown another unexpected curveball as cash available to banks for their short-term funding needs all but dried up on Monday and Tuesday. That forced the New York Fed to make an emergency injection of more than $50B, its first since the financial crisis, to bring down key short-term rates that had spiked to as high as 10%. Fed traders will be back this morning to restore calm by offering another $75B of cash to the market.<\/span>
\n Latest on the GM strike<\/span>
\n General Motors (NYSE:GM) has shifted health insurance costs for its striking workers to the United Auto Workers union as its members walked the picket line for the second day on Tuesday. The UAW further announced it will pay striking workers $250 a week, but that does not go very far, especially when they need to cover their own health insurance. GM’s credit rating could also topple into junk bond status if the strike lasts more than a week or two, according to Moody’s, which downgraded Ford (NYSE:F) to junk on Sept. 9.<\/span>
\n Battle over emissions standards<\/span>
\n The Trump administration this afternoon is expected to formally revoke California’s authority to set its own auto emissions standards and bar all states from setting such rules. Lawyers have said the action borders on uncharted legal territory and could end up going all the way to the Supreme Court. In recent weeks, the DOJ also launched a competition investigation into Ford (F), Honda (NYSE:HMC), BMW (OTCPK:BMWYY) and Volkswagen (OTCPK:VWAGY), which have all said they will comply with the tougher Cali standards over federal requirements.<\/span>
\n Facebook glass<\/span>
\n Facebook (NASDAQ:FB) is teaming up with eyewear giant Luxottica (OTCPK:LUXTY) to develop augmented-reality Ray-Bans, sources told CNBC. The smart glasses, code-named “Orion,” will take years to develop, with the company hoping to get them to consumers between 2023 and 2025. Smartphone replacement? According to the report, Facebook is including the ability to take calls, see info via a small display, livestream what the wearer sees and allow for interaction with an AI voice assistant.<\/span>
\n S.Korea-Japan feud deepens<\/span>
\n South Korea is following through with plans to drop Japan from a list of countries receiving fast-track approvals in trade, a reaction to a similar move by Tokyo to downgrade Seoul’s trade status. The dispute between the nations began in July when Japan imposed tighter export controls on three chemicals South Korean companies use to produce semiconductors and displays for smartphones and TVs, which are major import items for South Korea. The escalating row is rooted in wartime history and could cast uncertainty into the global supply chain and economy.<\/span>
\n Saudi output recovery<\/span>
\n The sharp reversal in Monday’s crude rally is continuing, with WTI futures down 1% to $58.77\/bbl, after the Saudi Arabian oil ministry announced it will fully restore output by the end of September. Energy Minister Prince Abdulaziz bin Salman also said the ministry has managed to restore supplies to customers to the levels they were at before the weekend attacks by drawing from crude stocks. Figures released by the American Petroleum Institute on Tuesday suggested a surprise 592K barrel increase, while U.S. government data on crude stocks is due today at 10:30 a.m. ET.<\/span>
\n What else is happening…<\/span>
\n (FB) ‘Supreme Court’ can override Zuckerberg.<\/span>
\n Struggling Nissan (OTCPK:NSANY) looks to slim down.<\/span>
\n No White House involvement in UAW talks, says GM.<\/span>
\n Battle looms over next B-52 engine contract.<\/span>
\n Juul (JUUL) sales halted on Chinese websites.<\/span>
\n First criminal charges in Vale (NYSE:VALE) dam disaster.<\/span>
\n Tuesday’s Key Earnings<\/strong>
\n Adobe (NASDAQ:ADBE) -2.7% AH on downside Q4 view.
\n Chewy (NYSE:CHWY) -3.8% AH as expenses topped the pace of sales growth.
\n FedEx (NYSE:FDX) -10% AH amid mounting trade war woes.<\/span><\/span><\/span><\/span>
\n Today’s Economic Calendar<\/strong>
\n MBA Mortgage Applications
\n 8:30 Housing Starts
\n 10:30 EIA Petroleum Inventories
\n 2:00 PM FOMC Announcement
\n 2:00 PM FOMC Forecast
\n 2:00 PM Chairman Press Conference<\/span><\/span><\/span><\/span><\/span><\/span><\/span>
\n——————
\n Good morning. Happy Tuesday. <\/span>
\n The Asian\/Pacific<\/strong> markets closed mostly down. China, Hong Kong and India dropped more than 1%. Europe, Africa and the Middle East<\/strong> are currently mostly down. Poland, Turkey, South Africa, Finland and the Czech Republic are down more than 1%; Spain, Norway, Greece, the Netherlands, Italy, Austria, Sweden and Saudi Arabia are also weak. Futures in the States<\/strong> point towards a down open for the cash market. <\/span>
\n—————
\n VIDEO: <\/strong>How To Plan Gap Ups<\/a>
\n—————<\/span>
\n The dollar is flat. Oil and copper are down. Gold is flat; silver is down. Bonds are up. <\/span>
\n Stories\/News from Seeking Alpha…<\/span>
\n The stakes couldn’t be higher given the current Brexit turmoil as Britain’s highest court begins hearing arguments today on whether the government’s decision to suspend Parliament was lawful (judges in England and Scotland previously came to contrasting conclusions). Boris Johnson argues that he asked the Queen to prorogue the lower house in order to introduce a new legislative agenda, but critics accuse him of attempting to stymie debate and push through a no-deal Brexit before an Oct. 31 deadline.<\/span>
\n Crude slips, prices still elevated<\/span>
\n The rally in oil prices is taking a breather after yesterday’s historic 14.7% gain, with October WTI down 1.8% to $61.80\/bbl. Investors are awaiting clarity on how long it’ll take Saudi Arabia to restore output that was cut in half by the attacks on its production facilities as Aramco (ARMCO) grows less optimistic about a quick recovery. The state-owned operator may face weeks or months before the majority of output is restored, but other nations, including the U.S., could offset supply losses if the disruption lasts longer than initially expected.<\/span>
\n Futures lower as Fed meets<\/span>
\n Traders are still in risk-off mode due to the surge in oil prices and associated geopolitical concerns, though U.S. stock index futures are pointing to an only modestly lower open, currently down 0.2%. The FOMC will also start its two-day policy meeting this morning against the backdrop of fading hopes for an interest rate cut. The Fed Funds Futures market on Monday was pricing in a 34% chance that the Fed will stay put on rates; the probability was zero a month ago and just 5.4% a week ago, according to the CME.<\/span>
\n Trade deal reached with Japan<\/span>
\n The U.S. has inked initial trade agreements with Japan on tariff barriers and digital trade that won’t require congressional approval. Not so many other details were provided, including whether President Trump had agreed to rule out imposing tariffs on Japanese automobiles. Coming to terms with Japan is seen as especially important because Trump withdrew from the Trans-Pacific Partnership on his fourth day in office.<\/span>
\n California targets vaping<\/span>
\n There are new developments in the war on vaping, with California Governor Gavin Newsom becoming the third state to issue an executive order to “reduce youth vaping consumption.” While an outright ban on flavored products fell short during a legislative session, state regulators may find ways to ban illegal and counterfeit vaping products. California will also conduct a significant review regarding warning labels on e-cigarette packages and spend $20M on an advertising campaign to target the epidemic.<\/span>
\n Apple has day in court<\/span>
\n The EU’s order for Apple (NASDAQ:AAPL) to pay \u20ac13B in back taxes to Ireland “defies reality and common sense,” the tech giant declared as it launched a legal challenge against the 2016 ruling. The case is key to European Competition Commissioner Margrethe Vestager’s crackdown on sweetheart deals for multinationals. Apple CFO Luca Maestri is leading a six-strong delegation to the General Court, Europe’s second-highest, where a panel of five judges will hear arguments from both sides, as well as Ireland, Luxembourg, Poland and the EFTA Surveillance Authority, over two days.<\/span>
\n IPO postponed<\/span>
\n WeWork had planned to begin a roadshow this week, but that seems to have been delayed as the office-sharing company postpones its IPO until October at the earliest. That comes amid growing questions about governance and WeWork’s eventual path to profitability, WSJ reports. We Co. (WE), as the company is officially known, had been valued at $47B in a fundraising round with SoftBank (OTCPK:SFTBY) this year, but that figure now appears to be something closer to $15B-$20B or possibly lower.<\/span>
\n IPO revived<\/span>
\n Anheuser-Busch InBev (NYSE:BUD) is making another attempt at spinning off its Asian business in Hong Kong with the launch of an IPO that could be worth up to $6.6B. The unit, Budweiser Brewing APAC, plans to sell 1.26B new shares at an indicative range of 27 to 30 Hong Kong dollars (US$3.45 to US$3.84), and may include a rare “upsize” option that will enable the sale of up to 40% more shares. Proceeds will help AB InBev reduce its debt burden of over $100B, which it accumulated following the purchase of rival SABMiller in late 2016.<\/span>
\n Sony rejects Loeb proposal<\/span>
\n Three months after Daniel Loeb’s Third Point launched his second campaign against Sony (NYSE:SNE), the company has rejected the activist’s call to spin off its image sensor business. In an 8-page statement, Sony said the unit was a “crucial growth driver” and cited costs of separating the business, such as an increase in patent licensing fees and difficulty in recruiting talent. In addition to calling for a spinoff, Loeb pressured the group to sell its stakes in non-core assets to focus on being a global entertainment company.<\/span>
\n 737 MAX crisis<\/span>
\n New FAA chief Stephen Dickson will travel to Seattle this week to test “newly configured” 737 MAX software changes and meet with Boeing (NYSE:BA) officials. It’s still not clear when Boeing will conduct a key certification test flight, a step needed before the agency can return the plane to service. Meanwhile, reports suggest that a panel of international air safety regulators will soon criticize the initial U.S. approval process for the 737 MAX, while urging a wide-ranging reassessment of how complex automated systems should be certified on future jetliners.<\/span>
\n What else is happening…<\/span>
\n Shopify (NYSE:SHOP) shares drop following secondary offering.<\/span>
\n 3G Capital bails on chunk of Kraft Heinz (NASDAQ:KHC).<\/span>
\n Sales outlook cut at Corning (NYSE:GLW) weighs on the stock.<\/span>
\n Netflix (NASDAQ:NFLX) reaches streaming deal for ‘Seinfeld.’<\/span>
\n Original content… Tinder (NASDAQ:MTCH) wraps up first video series.<\/span>
\n Nexstar (NASDAQ:NXST) gets FCC approval for $4.1B Tribune (NYSE:TRCO) deal.<\/span>
\n FedEx (NYSE:FDX) will boost shipping rates in 2020.<\/span>
\n Complying with NYC regulation, Uber (NYSE:UBER) restricts app access.<\/span>
\n Today’s Economic Calendar<\/strong>
\n FOMC meeting begins
\n 8:55 Redbook Chain Store Sales
\n 9:15 Industrial Production
\n 10:00 NAHB Housing Market Index
\n 4:00 PM Treasury International Capital<\/span><\/span><\/span><\/span><\/span><\/span>
\n——————
\n Good morning. Happy Monday. Hope you had a good weekend. <\/span>
\n The Asian\/Pacific<\/strong> markets closed mixed. Japan, South Korea and Taiwan did well while Hong Kong, India and Indonesia posted losses. Europe, Africa and the Middle East<\/strong> are also mixed. Russia, Greece, South Africa, Norway, Austria, Saudi Arabia and the Czech Republic are up; Denmark, France, Turkey, Germany, Finland, Switzerland, Spain, Italy and Sweden are down. Futures in the States<\/strong> point towards gap down 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 $5.65; copper is down. Gold and silver are up. Bonds are up. <\/span>
\n Stories\/News from Seeking Alpha…<\/span>
\n Weekend drone strikes on the heart of the Saudi oil industry forced the kingdom to shut down half its crude production, amounting to a loss of 5.7M barrels a day, or roughly 5% of the world’s daily production of crude oil. Yemen’s Iranian-aligned Houthi rebels claimed credit for the attack, saying they sent 10 drones to strike at important Aramco (ARMCO) facilities, including the world’s largest oil processing plant and a major oil field. The disruption sent WTI futures as much as 15.5% higher overnight to $63.34, the biggest intraday percentage gain since June 22, 1998, while President Trump authorized a release of crude from the Strategic Petroleum Reserve, as necessary.<\/span>
\n Sell-side weighs in<\/span>
\n “No matter whether it takes Saudi Arabia 5 days or a lot longer to get oil back into production, there is but one rational takeaway from this weekend’s drone attacks on the Kingdom’s infrastructure – that infrastructure is highly vulnerable to attack,” according to analysts at Citi. “The market needs to price in a new level of supply chain vulnerability, with the speed Saudi can come back important not just for this instance but for future disruptions as well,” added JPMorgan. For the global oil market, the 5.7M bpd Saudi halt is the single worst sudden disruption ever, surpassing the loss following the Invasion of Kuwait and Iranian Revolution.<\/span>
\n Futures retreat<\/span>
\n The Saudi oil interruption is weighing on equities just as they were getting back into rally mode, with Dow and S&P futures down 0.4% and Nasdaq futures off by 0.6%. It would be the first decline in nine days for the DJIA, which had climbed back to within 1% from a record on Friday. Weak industrial output data from China (see below) further hammered market sentiment, as well as geopolitical worries. Some U.S. officials blamed Iran for the strikes on Aramco’s (ARMCO) facilities, with President Trump saying he was “locked and loaded” for a response “depending on verification.”<\/span>
\n China’s slowdown deepens<\/span>
\n Industrial output growth weakened to 4.4% in August, the weakest in 17.5 years, amid spreading pain from the trade war with the U.S. and softening domestic demand. Retail sales and investment gauges worsened as well, reinforcing views that China is likely to cut some key interest rates this week. Ahead of the data, Premier Li Keqiang said it would be “very difficult” for the economy to grow at 6% or more and that it faced “downward pressure.”<\/span>
\n National strike against GM<\/span>
\n The United Auto Workers union has begun a nationwide strike against General Motors (NYSE:GM), with some 46,000 members walking off the job after contract talks hit an impasse. Shutting down North American production will cost GM about $400M\/day, according to Kristin Dziczek of the Center for Automotive Research, adding that “GM has enough inventory for a short strike of one or two weeks. After that it starts to get painful.” The strike does not include Ford (NYSE:F) and Fiat Chrysler (NYSE:FCAU), whose UAW contracts were extended while the union tries to negotiate a deal with GM.<\/span>
\n OxyContin maker bites the dust<\/span>
\n Purdue Pharma has filed for bankruptcy protection, days after reaching a tentative deal to settle more than 2,600 lawsuits alleging the company helped fuel the deadly U.S. opioid epidemic. The settlement calls for the Sackler family to hand over Purdue to a trust controlled by the states, cities and counties that have sued to recoup billions of dollars they spent battling addictions and overdoses. Opioid maker Insys Therapeutics (OTCPK:INSYQ) filed for Chapter 11 bankruptcy protection on June 10, while reports suggest Mallinckrodt (NYSE:MNK) may be next.<\/span>
\n No flavored ecigs allowed<\/span>
\n New York Governor Andrew Cuomo is taking an emergency executive action to ban the sale of flavored electronic cigarettes in the state, amid a surge of vaping-related illnesses and deaths nationwide. The ban would not include menthol and tobacco flavored products, which Cuomo said can help people wean off of regular cigarettes. New York would become the second state in the country behind Michigan to ban the candy flavored products, which are popular with teenagers.<\/span>
\n Apple’s Irish tax bill<\/span>
\n The world’s biggest tax case hits the courtroom this week. Apple (NASDAQ:AAPL) is battling the EU’s Competition Commissioner Margrethe Vestager, who in 2016 ruled that Apple’s tax deals with Ireland allowed the company to pay far less than other businesses and levied a \u20ac13B tax bill on the iPhone maker. The first hints of how the Apple case may turn out will come from a pair of rulings scheduled for Sept. 24, but a final ruling could take months and empower a potential new crackdown on internet giants.<\/span>
\n Firm Brexit deadline<\/span>
\n “Despite the Remainer attempt to crush Brexit, I am working flat out to ensure we leave on Oct. 31,” U.K. Prime Minister Boris Johnson wrote in The Daily Telegraph. Multiple reports suggest he will reiterate that he wants to secure a deal by Oct. 18 in his first face-to-face meeting today with EU chief Jean-Claude Juncker, but will reject any delay after Halloween. He’s also prepared to go to court to fight against legal challenges from his opponents on the matter.<\/span>
\n What else is happening…<\/span>
\n Top tech IPOs in 2019 outperform S&P 500.<\/span>
\n WTO clears U.S. tariff request in aircraft subsidy row.<\/span>
\n Volkswagen (OTCPK:VWAGY) makes Dieselgate settlement Down Under.<\/span>
\n Structural changes coming to Boeing (NYSE:BA) after 737 MAX crisis.<\/span>
\n HK exchange (OTCPK:HKXCY) presses on with \u00a332B LSE (OTCPK:LDNXF) bid.<\/span>
\n Today’s Economic Calendar<\/strong>
\n 8:30 Empire State Mfg Survey<\/span><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Good morning. Happy Friday. Happy Options Expiration Day. The Asian\/Pacific markets leaned to the upside, but movement was minimal. South Korea and India did well while Hong Kong and the Philippines lagged. Europe, Africa and the Middle East currently lean up, but there are no big movers. South Africa, Norway, Spain, Belgium and Saudi Arabia […]<\/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\/13430"}],"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=13430"}],"version-history":[{"count":0,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/posts\/13430\/revisions"}],"wp:attachment":[{"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=13430"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=13430"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=13430"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}