{"id":14867,"date":"2021-07-12T13:06:23","date_gmt":"2021-07-12T13:06:23","guid":{"rendered":"http:\/\/blog.leavittbrothers.com\/?p=14867"},"modified":"2021-07-16T12:50:34","modified_gmt":"2021-07-16T12:50:34","slug":"before-the-open-jul-12-16","status":"publish","type":"post","link":"https:\/\/blog.leavittbrothers.com\/?p=14867","title":{"rendered":"Before the Open (Jul 12-16)"},"content":{"rendered":"\n Good morning. Happy Friday.<\/span>

\n\n The Asian\/Pacific<\/strong> markets leaned down. Indonesia and Singapore did well; Japan, China, Taiwan and the Philippines were weak. Europe, Africa and the Middle East<\/strong> are currently mixed and little changed. Only South Africa and Israel (both down big) have moved much. Futures in the States<\/strong> point towards a positive open for the cash market. <\/span>

\n\n—————
\n VIDEO: <\/strong>Managing Trades with MACD and MACD Histogram<\/a>
\n—————<\/span>

\n\nThe dollar is up slightly. Oil is up; copper is down. Gold and silver are down. Bonds are down. Bitcoin is down. <\/span>

\n\nStories\/News from Seeking Alpha…<\/span>

\n\nShow me the Money!

\n\nThe latest round of stimulus checks began arriving yesterday, but you have to be a parent to get one. Your kids also have to be under 18, with $300 per month for a child below age 6 and $250 for those aged between 6 and 17. The expanded child tax credit is aimed at cutting the child poverty rate and was part of the coronavirus stimulus package passed in March.

\n\nHow much will it cost? Uncle Sam is shelling out $105B for the program, which will be sent out monthly for half of this year’s subsidy, with the rest to come as a tax refund in 2022. “It’s the most transformative policy coming out of Washington since the days of FDR,” said Senator Cory Booker (D-NJ). “America is dramatically behind its industrial peers in investing in our children. Even families that are not poor are struggling, as the cost of raising children goes higher and higher.”

\n\nTo qualify, a) One must have filed a 2019 or 2020 tax return and claimed the child tax credit on the return, b) Had a main home in the U.S. for more than half the year or file a joint return with a spouse who has a main home in the U.S. for more than half the year, c) Had a qualifying child who is under age 18 at the end of 2021 with a valid social security number, d) Made less than certain income limits (credits phase out after $150K for married taxpayers, $112.5K for heads of household and $75K for all other taxpayers).

\n\nGo deeper: Commenting on the new child tax credit, Treasury Secretary Janet Yellen noted that the funds would provide an additional spending boost for the economy. She also called for the monthly installments to be permanent, saying the program is “something that’s very important to continue.” “It certainly will add to spending, but most importantly, it provides support for families to take care of the needs of children.”

\n\nDeeper dive into CBDCs

\n\nTalk about digital currencies is heating up after the ECB launched the investigation phase of its digital euro project. However, many are still asking how the tender would differ from the electronic money we use today via credit cards, online banking and popular payment app Venmo (NASDAQ:PYPL). Definitions first… While there are many descriptions of “digital currencies,” they are broadly broken down into three categories.

\n\nDecentralized cryptocurrency: These are unregulated offerings like Bitcoin (BTC-USD), Ethereum (ETH-USD), Ripple (XRP-USD) and Dogecoin (DOGE-USD). Since they are issued by a network, and not any central authority or government, they are often volatile, but can also be exchanged for goods or services like traditional currencies. Cryptos often use distributed ledger technology (like blockchain) that can confirm valid tokens and log transactions.

\n\nStablecoins: These also use distributed ledger technology, but they attach the value of tokens to something that already exists. By pegging the asset to the dollar, a basket of currencies, or commodities like gold, these currencies are more grounded and reduce volatility. The most famous example of this is Facebook’s (NASDAQ:FB) Libra project, now known as Diem, which recently relocated its main operations from Switzerland to the U.S. as it scaled back its global ambitions.

\n\nCentral bank digital currency: Otherwise known as CBDCs, these tokens represent a nation’s fiat currency. They are a way for central banks to have a voice in the emerging industry as more “digital money” comes into the economy. Some central banks are looking to get some skin in the game by issuing CBDCs, while some are more concerned about the threat of stablecoins and decentralized finance.

\n\nHow do CBDCs differ from electronic cash? When you deposit money into a bank account, the commercial entity takes responsibility for the sum. The cash is then held in electronic form and can be used across a variety of platforms, but it’s limited to the bank’s ledger. Companies like Venmo can even track electronic transactions on its own internal ledger system, but the money is still being held and tracked by a commercial bank provider. In the case of CBDCs, the government is the counterparty and takes liability for the money, while the ledger that’s being used (known as the rails) can be a very different structure than a commercial institution.

\n\nMeet the rails: In the U.S., the ACH Network is the national automated clearing house (ACH) for electronic funds transfers. It typically takes three days to clear a transaction as it travels along the payment highway infrastructure. There are also wire transfers and credit card payments that are handled by separate networks. In creating a CBDC, the Fed would develop a new set of rails that could allow money to move faster, meaning rapid transfers for things like unemployment benefits and stimulus checks.

\n\nOutlook: Besides being quicker, Treasury Secretary Janet Yellen has said the rails would be cheaper and safer. While the central bank would want to maintain competition with its new offering, it would also seek to operate its innovations in tandem with cash and other forms of payment. There are additional privacy concerns that would have to be addressed, like the ability for a central bank to monitor every transaction that is using CBDCs in real-time.

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\n\nEye on inflation

\n\nOver the last few days, the major averages have been fighting a battle for direction as investors continue to reassess the inflation outlook. Stocks are still powering near record highs as policymakers attempt to calm investor concerns following this week’s sizzling CPI report, which came in at a whopping 5.4% for June (the fastest pace since 2008). Equity futures hugged the flatline overnight as the inflation story continues to play out, with the hope that the “transitory” chapter will be finished before an overheated villain appears.

\n\nQuote: “We will have several more months of rapid inflation,” Treasury Secretary Janet Yellen said on Thursday. “So I’m not saying that this is a one-month phenomenon. But I think over the medium term, we’ll see inflation decline back toward normal levels. But, of course, we have to keep a careful eye on it.”

\n\nFed Chairman Jerome Powell also defended the central bank’s accommodative approach during Day 2 of his semiannual monetary policy testimony before Congress, but he did flag some caution. “This is a shock going through the system associated with reopening of the economy, and it’s driven inflation well above 2%. And of course, we’re not comfortable with that. To the extent it is temporary, then it wouldn’t be appropriate to react to it, but to the extent it gets longer and longer, we will have to continue to reevaluate the risks that would affect inflation expectations.”

\n\nThought bubble: Modest inflation can be good, but when things grow too fast and exceed a nation’s fundamental capacity, the economy can overheat. The sharp rise in costs could result in inefficient allocations as suppliers overproduce and create excess production capacity, while the inflation expectations themselves could lead to relentless price increases. When things slow down, a recession can hit, and central banks may attempt to raise interest rates before then to lower the amount of spending and borrowing in the economy.

\n\nDollar doom

\n\nIf inflation is on the rise, and tapering talk is making headlines, then why are U.S. Treasury yields heading lower? “It’s because of all the liquidity in the system,” DoubleLine Capital’s Jeffrey Gundlach told CNBC. “Banks are so flush with deposits” that it is creating disorder in the broader financial markets. In fact, the New York Fed’s overnight reverse repo program has started touching record levels around $1T as excess liquidity overwhelms U.S. money-market funds and a parking space for cash becomes harder to find.

\n\nOn the greenback: “Ultimately, the size of our deficits – both trade deficit, which has exploded post-pandemic, and the budget deficit, which is, obviously, completely off the charts – suggest that in the intermediate term – I don’t really think this year, exactly, but in the intermediate term – the dollar is going to fall pretty substantially,” proclaimed the so-called bond king. “That’s going to be a very important dynamic, because one of the things that has helped the bond market, without any doubt, has been foreign buying, with the interest rate differentials having favored hedged U.S. bond positions for foreign bond investors.”

\n\nHasn’t the dollar gone up over the past month? “It’s a question of what your horizon is. In the short term, the dynamics have been and will continue to be in place for the dollar to be marginally or moderately stronger. In the longer term, I think the dollar [is] doomed.”

\n\nPayment apps

\n\nCrypto boost: PayPal (PYPL) is increasing its weekly cryptocurrency purchase limit fivefold to $100,000 and is scrapping its annual purchase limit. “These changes will enable our customers to have more choice and flexibility in purchasing cryptocurrency on our platform,” the company declared, adding that it’s continuing to update in-app guides and educational materials on the subject. PayPal first started letting users buy crypto in October 2020, marking another step toward the asset class’ mainstream adoption, and later added the capabilities to its mobile payment app Venmo.

\n\nDe-Fi breakthrough: Square (SQ) is forming a new business that pulls together Seller, Cash App & Tidal to focus on “building an open developer platform with the sole goal of making it easy to create non-custodial, permissionless, and decentralized financial services,” CEO Jack Dorsey announced in a tweet. “Our primary focus is Bitcoin (BTC-USD). Like our new #Bitcoin hardware wallet, we’re going to do this completely in the open. Open roadmap, open development, and open source.”

\n\nDigital payment revolution: The largest Indian IPO in more than a decade is underway as Paytm filed to raise up to $2.2B in an upcoming offering. The startup, which has over 333M users and is backed by Alibaba (BABA), SoftBank (OTCPK:SFTBF) and Berkshire Hathaway (BRK.A, BRK.B), dominates India’s Unified Payments Interface. UPI has emerged as the most popular digital payments method in India, due to New Delhi’s invalidation of more than 85% of the paper cash circulation in late 2016.

\n\nToday’s Economic Calendar<\/B>
\n8:30 Retail Sales
\n9:00 Fed’s William\u2019s speech
\n10:00 Business Inventories
\n10:00 Consumer Sentiment
\n1:00 PM Baker-Hughes Rig Count
\n4:00 PM Treasury International Capital

\n\nWhat else is happening…

\n\nModerna (MRNA) will join the S&P 500 on July 21.

\n\nChip shortage… Intel (INTC) in talks to buy GlobalFoundries for $30B.

\n\nFlying cars from Tesla (TSLA) called a likely scenario by Morgan Stanley.

\n\nU.S. crude oil tumbles near one-month low as OPEC deal looms.

\n\nReports… Salesforce (CRM) nearing finish line for Slack (WORK) deal.

\n\nEricsson (ERIC), Verizon (VZ) ink 5G deal to enhance user experience.

\n\nOatly (OTLY) falls for a second day following short report.

\n\nAmerican Airlines (AAL) cancels voluntary leave for flight attendants.

\n\nFAA orders inspections of Boeing (BA) 737 jets for possible switch failures.

\n\n—————

\n\n Good morning. Happy Thursday.<\/span>

\n\n The Asian\/Pacific<\/strong> markets leaned up. China, Hong Kong, South Korea, Taiwan and Indonesia did great, but Japan and the Philippines were weak. Europe, Africa and the Middle East<\/strong> are currently posting solid losses. The Czech Republic is up big, but the UK, France, Germany, Russia, Greece, Norway, Spain, the Netherlands, Italy and Portugal are down moderately or big. Futures in the States<\/strong> point towards a gap down open for the cash market. <\/span>

\n\n—————
\n COURSE: <\/strong>Learn How to Trade<\/a>
\n—————<\/span>

\n\nThe dollar is up. Oil is down; copper is up. Gold is flat; silver is up. Bonds are up. Bitcoin is down. <\/span>

\n\nStories\/News from Seeking Alpha…<\/span>

\n\nEnd of the Combustion Engine?

\n\nWe reported on the discussions several weeks back, but the European Commission has now proposed a date to call time on the internal combustion engine. Sales of new cars and vans that produce CO2, including plug-in hybrids, would be banned as of 2035, meaning “almost 100%” of vehicles on the road would be emissions-free by 2050. While the decision would force the EV revolution upon European automakers, some are already planning moves of their own.

\n\nLast month, Volkswagen (OTCPK:VWAGY) paved its way toward an EV future by pledging to halt sales of ICE vehicles in Europe by 2035, while Ford (NYSE:F) has said it will only sell EVs in Europe by 2030. Volvo (OTCPK:GELYF) is retiring the ICE engine and hybrids by the same year and Honda (NYSE:HMC) announced plans to phase out gas-powered cars by 2040. Meanwhile, Stellantis (NYSE:STLA) is no longer planning to invest in the development of new internal combustion engines, while General Motors (NYSE:GM) will stop building polluting vehicles by 2035.

\n\nEuropean Green Deal: “To ensure that drivers are able to charge or fuel their vehicles at a reliable network across Europe, the revised Alternative Fuels Infrastructure Regulation will require Member States to expand charging capacity in line with zero-emission car sales, and to install charging and fueling points at regular intervals on major highways: every 60 kilometers for electric charging and every 150 kilometers for hydrogen refueling,” the European Commission said in a statement.

\n\nJust don’t catch fire… General Motors on Wednesday told owners of 2017-2019 Bolt EVs not to park their vehicles inside or charge them unattended overnight after two of the EVs went up in flames. The cars had even been repaired as part of a recall of 69,000 vehicles that were flagged for fire risks, but that didn’t seem to help. Other EV rollouts have also been interrupted by fires involving lithium-ion batteries, including Ford, BMW and Hyundai (OTCPK:HYMTF), which have issued recalls in recent months for new battery-powered models.

\n\nDelta cases surge

\n\nTech shares may be gaining some renewed momentum as coronavirus infections rapidly rise in the U.S. and around the globe. Nasdaq futures are pointing 0.4% higher amid fears of a return to stay-at-home culture, while the Dow and S&P 500 dip into the red. At the last count, the number of new U.S. COVID-19 cases per day has doubled over the past three weeks to 26,000, driven by the highly contagious Delta variant.

\n\nMeanwhile, Federal Reserve Chairman Jay Powell is quelling investor fears about a rollback of the central bank’s easy policies despite the recent spike in inflation. Powell will be on Capitol Hill again today, where he’ll appear before the Senate for his semiannual testimony on monetary policy.

\n\nNotable exchange: “According to the NFIB, 47% of small businesses raised average selling prices in June. That’s the highest since 1981,” Representative Andy Barr (R-KY) asked the Fed Chair at yesterday’s hearing. “We have a great network through the reserve banks, we hear that through a loudspeaker,” Powell responded. “Regarding [inflation] expectations, we don’t see problems on that front, but if expectations do move up in a way that is troubling, which we would say is materially above and for a persistent amount of time, we would be concerned and we would react to that.”

\n\nElsewhere: Crude oil futures are sinking as traders weigh conflicting reports about a potential compromise between Saudi Arabia and the UAE on production levels. The latest bank earnings are also on tap this morning, with Morgan Stanley (MS), U.S. Bancorp (USB) and Bank of New York Mellon (BK) set to report. On the economic calendar, investors will get the latest labor snapshot in the U.S., with weekly jobless claims data reported at 8:30 a.m. ET.

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\n\nReigniting growth

\n\nNetflix (NASDAQ:NFLX) is planning a foray into video games, hiring a former Electronic Arts (EA) and Facebook (FB) executive to lead the effort. Mike Verdu will join the company as vice president of game development as the streaming arena gets increasingly crowded with rivals like Disney+ (DIS) and HBO Max (T). Verdu also served as chief creative officer for Zynga (ZNGA) between 2009 and 2012, and has been involved with titles like The Sims, Plants vs. Zombies and the Star Wars franchises.

\n\nNot a totally new push: At the E3 gaming conference in 2019, Netflix revealed it would release a console and PC title based on Stranger Things, and later unveiled a game based on Dark Tactics. The same year, it pointed to Fortnite as its competition in a letter to shareholders. The company has also produced anime adaptations of popular gaming franchises, including Dota and Castlevania.

\n\nNetflix hopes to offer video games on its streaming platform within the next year and has started advertising for developer-related positions on its website. Gaming would appear as a new programming genre (like documentaries and stand-up specials), though the company doesn’t currently have plans to charge for the extra content. The latest news dinged shares of turnaround hopeful GameStop (NYSE:GME), which fell 7% on Wednesday, while Netflix headed higher, finishing the day up 1.4% and rising further in AH trading.

\n\nAnalyst commentary: “This is a natural extension of Netflix’s content strategy, allowing it to mine intellectual property from popular shows like Stranger Things. Though it may not generate much additional revenue, it will help deepen engagement and increase the service\u2019s appeal and pricing power,” said Geetha Ranganathan, media analyst at Bloomberg Intelligence. “Don’t expect this to be a turning point, but it shows that the company will explore new formats to increase time spent on the platform.”

\n\nNext steps for Beijing

\n\nFresh data from China overnight showed the nation’s economy expanding at a 7.9% pace in the second quarter, boosted by strong readings on industrial output (+8.3% Y\/Y), retail sales (+13.9% Y\/Y) and fixed-asset investment (+12.6% Y\/Y) for June. However, the GDP number did miss expectations for a rise of 8.1%, weighed down by higher raw material costs and new coronavirus outbreaks. The figure was also far slower than the 18.3% Y\/Y jump recorded during the first three months of the year, but no one had forecast that rate to continue given the statistical distortions from the beginning of the pandemic.

\n\nBigger picture: Despite some economic resilience, expectations are building that policymakers may have to do more to support the recovery. Beijing announced a cut to its new reserve ratio requirement last week, freeing up more liquidity in the banking sector for lending. Stock in Shanghai even rose 1% following the latest data on increased chances China will intervene more forcefully to keep its growth momentum going in the latter half of 2021.

\n\n“The domestic economic recovery is uneven,” said Liu Aihua, an official at the National Bureau of Statistics of China. “We should also be aware that the coronavirus continues to mutate globally, and external instabilities and uncertainties abound.”

\n\nTough talk: The Biden administration has agreed to extend the Trump era suspension of economic dialogue with China, which had governed ties between the two nations during the Bush and Obama years. In fact, several U.S. actions in recent days have deepened the confrontational approach, including new import controls for Xinjiang, warning American businesses in Hong Kong and excluding Beijing from a digital trade agreement. For China, its economic strategy has been focused on controlling capital outflows and boosting domestic consumption (especially post-COVID), so engaging with the outside world may not be a top priority at the moment.

\n\nDigital euro

\n\n“The Governing Council of the European Central Bank has decided to launch the investigation phase of a digital euro project,” the central bank announced in a press release. “Our work aims to ensure that in the digital age citizens and firms continue to have access to the safest form of money, central bank money.”

\n\nAnother excerpt: “The investigation phase will last 24 months and aim to address key issues regarding design and distribution. A digital euro must be able to meet the needs of Europeans while at the same time helping to prevent illicit activities and avoiding any undesirable impact on financial stability and monetary policy. This will not prejudge any future decision on the possible issuance of a digital euro, which will come only later. In any event, a digital euro would complement cash, not replace it.”

\n\nGo deeper: The statement discusses Bitcoin (BTC-USD) and the concerns around energy usage, noting the environmental friendliness of the digital euro vs. the most popular cryptocurrency. The effort is part of a drive by central banks to meet growing demand for digital payments and tackle a boom in private sector cryptos and decentralized finance. The ECB has also experimented using its own instant payment system in combination with distributed ledger technology (a.k.a. blockchain) to issue and distribute its digital euros.

\n\nToday’s Economic Calendar<\/B>
\n8:30 Initial Jobless Claims
\n8:30 Philly Fed Business Outlook
\n8:30 Empire State Mfg Survey
\n8:30 Import\/Export Prices
\n9:15 Industrial Production
\n9:30 Powell Testifies on Semi-Annual Monetary Policy Report
\n10:30 EIA Natural Gas Inventory
\n11:00 Fed’s Evans Speech
\n4:30 PM Fed Balance Sheet

\n\nWhat else is happening…

\n\nCathie Wood: Bitcoin (BTC-USD), China stocks deserve ‘valuation downgrade.’

\n\nModerna (NASDAQ:MRNA) vaccine linked to new auto-immune condition in Europe.

\n\nMark Wahlberg-backed fitness chain F45 (NYSE:FXLV) goes public.

\n\nWon’t pass? Cannabis stocks hit on legalization bill concerns.

\n\nApple (NASDAQ:AAPL) rises again after J.P. Morgan lifts price target.

\n\nDogecoin (DOGE-USD) founder severs ties with cryptocurrency world.

\n\nTwitter (NYSE:TWTR) to kill Fleets feature, rival to Facebook (NASDAQ:FB) Stories.

\n\nHidden fees… LendingClub (NYSE:LC) settles lawsuit with Federal Trade Commission.

\n\nFacebook (FB) wants FTC Chair to recuse herself in antitrust case – DJ.

\n\n—————

\n\n Good morning. Happy Wednesday.<\/span>

\n\n The Asian\/Pacific<\/strong> markets leaned down. The Philippines did well, but China, Hong Kong, New Zealand, Indonesia and Singapore were weak. Europe, Africa and the Middle East<\/strong> are currently mixed. Poland, Turkey, South Africa, Norway, Austria and Saudi Arabia are up; the UK, Russia, Switzerland, Hungary, Spain and Portugal are down. Futures in the States<\/strong> point towards a moderate gap up open for the cash market. <\/span>

\n\n—————
\n COURSE: <\/strong>Learn How to Trade<\/a>
\n—————<\/span>

\n\nThe dollar is down. Oil and copper are down. Gold and silver are up. Bonds are up. Bitcoin is down. <\/span>

\n\nStories\/News from Seeking Alpha…<\/span>

\n\nIt appears as if Seeking Alpha is no longer giving their morning comments away for free…which means I can’t copy & paste them here. I may stop posting Before the Open if I don’t find a good substitute.

\n\nPowell on the Hill

\n\nFed Chair Jerome Powell is in the hot seat today as he heads before Congress for his semiannual testimony on monetary policy. Inflation, which was once the elephant in the room, is set to become the most heated topic at the grilling following yesterday’s data on rising costs across the American economy. The Consumer Price Index grew at its fastest clip since August 2008, climbing 5.4% year-over-year versus a forecast of 4.9%.

\n\nBigger picture: While we’ve seen price increases before, most of them were taking place in areas heavily hit by the pandemic. Those included building materials and travel-related costs, which were hit by supply chain problems and shutdowns, but the most recent report suggested that these increases are broadening out. Core inflation (excluding food and energy) came in at 4.5%, marking the largest increase since September 1991.

\n\nUntil recently, the Fed has stuck to the script that inflation will be “transitory,” though some rumblings over that outlook are being heard at the FOMC and broader investing community. Fed minutes last week showed some concern over rising prices, with a “substantial majority” of policymakers seeing inflation risks “tilted to the upside.” While traders had a gut reaction to the latest CPI – stocks dipped on Tuesday – investors don’t appear to be that worried about runaway inflation. Market expectations of serious price pressures have so far been contained (continuous record highs) and positioning does not appear to have been influenced by the data (yet).

\n\nQuestions for Powell: Lawmakers will likely drill the Fed Chair about the central bank’s support for the economy and how much importance to place on the recent inflation figures. It’s also likely to get political. Democrats have pushed for expensive stimulus programs, stating there is no serious inflationary risk, while Republicans have generally posited that inflation is getting out of control and could be harmful to the U.S. economy.

\n\nEarnings season

\n\nA big inflation jump saw stocks edge down from highs yesterday as the debate over how the long Fed can keep policy loose resurfaced. U.S. equity futures are shaking off some of the concerns this morning, with the Nasdaq and S&P 500 up 0.4% and 0.1%, respectively, while the DJIA trails behind, down slightly at 0.1%. Higher-than-expected inflation data wasn’t the only thing to weigh on stocks, which greeted the Q2 earnings season with little fanfare.

\n\nSnapshot: Financial powerhouses JPMorgan (JPM) and Goldman Sachs (GS) both beat profit and revenue estimates on Tuesday, but their shares pulled back during the session. Some are attributing the decline to a peak in the expansion cycle, which has historically been preceded by a subpar performance in stocks, according to data compiled by S&P Dow Jones Indices. More bank earnings are due this morning, including results from Bank of America (BAC), Citigroup (C) and Wells Fargo (WFC).

\n\n“The peak percentage rate of growth is likely in the second quarter. But I am looking for peak optimism, which is based on how much the estimates are going up after companies report,” added Nick Raich, CEO at The Earnings Scout. “It’s not just the direction, it’s the magnitude. If estimates go up at a decreasing rate, that’s when we know we hit peak optimism.”

\n\nElsewhere: Democrats on the U.S. Senate Budget Committee reached an agreement on a $3.5T human infrastructure investment, which could be included in a budget resolution to be debated later this summer. While the price tag falls short of a $6T package previously sought by progressives, it’s in line with President Biden’s $4T economic agenda. Lawmakers are also working on a $600B bipartisan package for physical infrastructure, which Biden has confirmed is not dependent on the other infrastructure initiative.

\n\n‘Buy now, pay later’

\n\nApple (AAPL) is developing a new service that would allow consumers to make Apple Pay purchases in installments, sources told Bloomberg. That would put the company in direct competition with dominant player Affirm (AFRM), which closed Tuesday’s session down 10% on the news. Apple’s upcoming service would use Goldman Sachs (GS) as the lender for its installment offerings after previously partnering with the Wall Street bank on the Apple Card.

\n\n‘Apple Pay Later’: Customers would have the choice to pay in four installments, with one payment every two weeks, or across several months with interest. When making a purchase, the consumer would also have the option to pay using either of the installment plans or as they would regularly use Apple Pay. The company already offers monthly installment payments through the Apple Card, but the new service would allow users to choose any credit card to make their purchases over time.

\n\nThe service would bolster Apple’s revenue since the tech giant receives a percentage of the transactions made with Apple Pay. It could also convince more Apple users to use their iPhone to pay for items instead of standard credit cards.

\n\nAnalyst commentary: Truist’s Andrew Jeffrey sees the Affirm stock decline as an overreaction, “given the company’s position as the leading enterprise BNPL provider, boasting exclusive integrations with platforms including Shopify (SHOP) and Peloton (PTON).” He also maintains that Affirm’s merchant integrations and the ability to handle complex underwriting as “characteristics that materially differentiate it from more basic ‘split pay’ competitors” like PayPal (PYPL), Klarna (KLAR) and Afterpay (OTCPK:AFTPY).

\n\nMarijuana legalization

\n\nAt a press conference today, Senate Majority Leader Chuck Schumer (D-N.Y.) will introduce a draft of legislation that would legalize marijuana on the federal level. The bill would be called the Cannabis Administration and Opportunity Act and is meant to spur discussion for a formal introduction of the bill and comprehensive reform. Reports suggest it would direct some tax revenue from marijuana sales to minority communities, give the FDA oversight of cannabis regulation and retain some federal drug testing provisions.

\n\nQuote: “Hopefully, the next time this unofficial holiday, 4\/20, rolls around, our country will have made progress in addressing the massive overcriminalization of marijuana in a meaningful and comprehensive way,” Schumer said back in April. The nation’s war on drugs has “too often been a war on people, particularly people of color.”

\n\nMarijuana is still classified as a Schedule I drug under federal law, meaning it’s on par with heroin, LSD, shrooms and ecstasy. It’s also against federal law to grow, sell, or use pot for any use, including medical purposes. Despite being prohibited by federal law (different administrations have taken various approaches to enforcement), 36 states and D.C. currently have laws legalizing marijuana for either medical or recreational use.

\n\nSupercycle? Marijuana sales are expected to top $24B in 2021, marking a 40% Y\/Y increase, forecasts Roy Bingham, co-founder and chairman of BDSA, a cannabis market research firm.

\n\nToday’s Economic Calendar<\/B>
\n7:00 MBA Mortgage Applications
\n8:30 Producer Price Index
\n10:00 Atlanta Fed’s Business Inflation Expectations
\n10:30 EIA Petroleum Inventories
\n12:00 PM Powell Testifies on Semi-Annual Monetary Policy Report
\n1:30 PM Fed’s Kashkari Speech
\n2:00 PM Fed’s Beige Book

\n\nTuesday’s Key Earnings<\/B>
\nGoldman Sachs (NYSE:GS) -1.2% despite investment banking strength.
\nJPMorgan (NYSE:JPM) -1.5% on weaker fixed income, trimmed NII guidance.
\nPepsiCo (NASDAQ:PEP) +2.3% taking away market share from Coca-Cola.

\n\n—————

\n\n Good morning. Happy Tuesday.<\/span>

\n\n The Asian\/Pacific<\/strong> markets did well overall. Japan, China, Hong Kong, South Korea, India, Singapore and Thailand led, while the Philippines and Indonesia dropped more than 1%. Europe, Africa and the Middle East<\/strong> are currently mixed and little changed. Poland and Finland are up; Denmark, Taiwan and Spain are down. Futures in the States<\/strong> point towards a flat (S&P) or up (Nasdaq) open for the cash market. <\/span>

\n\n—————
\n COURSE: <\/strong>Learn How to Trade<\/a>
\n—————<\/span>

\n\nThe dollar is up. Oil is up; copper is down. Gold and silver are up. Bonds are down. Bitcoin is down. <\/span>

\n\nStories\/News from Seeking Alpha…<\/span>

\n\nIt appears as if Seeking Alpha is no longer giving their morning comments away for free…which means I can’t copy & paste them here. I may stop posting Before the Open if I don’t find a good substitute.

\n\n—————

\n\n Good morning. Happy Monday. Hope you had a good weekend.<\/span>

\n\n The Asian\/Pacific<\/strong> markets did great. Japan, China and the Philippines posted big gains; Hong Kong, South Korea, New Zealand, Taiwan, Australia, Indonesia and Singapore also did well. Europe, Africa and the Middle East<\/strong> are lean to the upside. Denmark, Greece, South Africa, Finland, Switzerland, Norway, Portugal and Sweden are leading. Futures in the States<\/strong> point towards a flat open for the cash market. <\/span>

\n\n—————
\n COURSE: <\/strong>Learn How to Trade<\/a>
\n—————<\/span>

\n\nThe dollar is up. Oil and copper are down. Gold and silver are down. Bonds are up. Bitcoin is down. <\/span>

\n\nStories\/News from Seeking Alpha…<\/span>

\n\nIt appears as if Seeking Alpha is no longer giving their morning comments away for free…which means I can’t copy & paste them here. I may stop posting Before the Open if I don’t find a good substitute.

\n\n—————\n","protected":false},"excerpt":{"rendered":"

Good morning. Happy Friday. The Asian\/Pacific markets leaned down. Indonesia and Singapore did well; Japan, China, Taiwan and the Philippines were weak. Europe, Africa and the Middle East are currently mixed and little changed. Only South Africa and Israel (both down big) have moved much. Futures in the States point towards a positive open for […]<\/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\/14867"}],"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=14867"}],"version-history":[{"count":5,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/posts\/14867\/revisions"}],"predecessor-version":[{"id":14876,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/posts\/14867\/revisions\/14876"}],"wp:attachment":[{"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14867"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14867"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14867"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}