10/31/2018 Morning Brief

Economic

The bond market will take a look at the Treasury's borrowing plans for the next three months on Wednesday as the U.S.'s climbing federal budget deficits continue to drive up debt issuance. The U.S. Treasury projects it will borrow $425 billion in the fourthquarter, and is expected to result in the fourth consecutive quarter of larger auction sizes across every maturity. Today’s Economic Reports: At 8:15 am ET ADP Employment Report. 8:30 am ET Employment Cost Index. 9;45 am ET Chicago PMI. 10:30 EIA Petroleum Status report. At 10:30 am ET The Federal Reserve Board holds an Open Board Meeting to discuss Prudential standards for the banking industry.

Equity markets –

S&P futures are trading Higher this morning, (0.87%)

Asian markets closed higher last night.

Close Change %Change

Nikkei Stock 21920.46 463.17 2.16

Hang Seng 24979.69 394.16 1.60

European indices are higher this morning this morning.

Last Change %Change

FTSE 100 7152.57 116.72 1.66

Xetra DAX 11455.74 168.35 1.49

* U.S. stocks Futures point to a positive opening this morning, General Motors posted better than expected results.

Oil Prices

Oil prices are trading higher this morning. The American Petroleum Institute (API) reported yet another crude oil inventory build this week, this time of 5.69 million barrels for the week ending October 26. The string of builds weighed heavily on prices, which were already depressed after IEA warned on Tuesday that the longer trend of higher oil prices would start to create demand issues in key oil consuming markets such as India and Indonesia. WTI is currently trading at $66.63 a barrel and Brent Crude is at $76.48 a barrel.

Option Activity -

Bullish option activity in CCI, JBLU & PZZA

Bearish option activity in GM, GSK & S

Upcoming Earnings

Ticker Company Straddle $move When Reporting (tentative)

AIG Amer Intl Grp 6.95 $2.85 Wen Afternoon

ALL Allstate 4.28 $4.09 Wen Afternoon

APA Apache 4.73 $1.58 Wen Afternoon

CF CF Inds Hlds 4.68 $2.17 Wen Afternoon

Tues Options Volumes (near term)

Ticker Call Vol Put Vol Call OI Put OI

AIG 11,227 4,633 3,647 7,191

ALL 337 71 5,535 2,973

APA 1,130 548 6,242 1,817

CF 1,706 89 1,745 1,195

Sector Update:

Retail

KR UBS raised its target price to $31 from $29.

LL Citi lowered its price target to $13 from $15.

AN UBS lowered its price target to $39 from $43.

Drug Makers

MRK Citi raised its price target to $84 from $79.00

CLVS JP Morgan downgrades the stock to Neutral from Overweight. Cut price target to $16 from $71.

LLY Credit Suiss upgraded to stock to Neutral from underperform.

FANG

FB Citi lowered its price target to $175 from $185.

AMZN Launching a new pay option for intl customers in conjunction with Western Union.

FB Susquehanna lowered its price target to $220 from $250.

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Dow 30:

CSCO Unveils new 400 Gigabit Ethernet switches.

IBM UBS lowered its ptice target to $150 from $180.

PFE Narrows guidance on tougher pricing, generic competition

RUMOR:

TMUS Announced shareholder approval in merger with sprint.

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