11/05/2018 Morning Brief

Economic

Federal Reserve Chairman Jerome Powell expects a continuation of economic growth. "So as long as financial imbalances don't return, and some shock like a war doesn't come along, Mr. Powell is confident unemployment can stay much lower than in the past without forcing the Fed to kill off the expansion with higher interest rates" (WSJ). The FOMC is schedule to meet on Thursday. In Fed Speak: New York Federal Reserve Bank President John Williams will speak in New York City at 8:30am ET. Dallas Federal Reserve Bank President Robert Kaplan will be speaking in Dallas at 7:00pm ET.Today’s Economic Reports: At 9:45am ET The PMI Services Index. At 10:00 am ET ISM Non-Manufacturing Index.

Equity markets –

S&P futures are trading flat to lower this morning, (-0.05%)

Asian markets closed significantly lower last night.

Close Change %Change

Nikkei Stock 21898.99 -344.67 -1.55

Hang Seng 25934.39 -551.96 -2.08

European indices are higher this morning this morning.

Last Change %Change

FTSE 100 7119.33 25.21 0.36

Xetra DAX 11538.58 19.59 0.17

* Stock futures are trending lower this morning. Traders are focused on the Iranian sanctions and mid-term elections.

Oil Prices

Oil prices are trading lower this morning. A news conference is scheduled for today at 8:30 am ET where Secretary of State Mike Pompeo and Treasury Secretary Steven Mnuchin will be speaking on the Iranian sanctions. Anticipation of U.S. sanctions push oil to multiyear highs last month. However crude oil producers have started pumping sufficient supply to offset the loss of Iranian oil on the world market. In addition to the increase in supply, demand appears to be easing due to a slowing global economy. Also, the US has allowed eight nations to keep buying oil from Iran for an unspecified amount of time. The countries granted waivers are reportedly India, China, South Korea, Turkey, Italy, the United Arab Emirates, Taiwan and Japan. OPEC and its production allies, including Russia, will meet in Abu Dhabi on Nov. 11 to assess their nearly two-year-old agreement to limit production output. WTI is currently trading at $62.90 a barrel and Brent Crude is at $72.75 a barrel.

Option Activity -

Bullish option activity in LUV, MYL & UA

Bearish option activity in ADI, BBY & W

Upcoming Earnings

Ticker Company Straddle $move When Reporting (tentative)

HRTX Heron Therap 5.59 $1.68 Monday Afternoon

SAGE Sage Therap 2.93 $.4.03 Tuesday Morning

Fri Options Volumes (near term)

Ticker Call Vol Put Vol Call OI Put OI

HRTX 72 32 4,812 1,176

SAGE 0 0 5,988 2020

Sector Update:

Retail

SFM Citi raises its target price to $31 from $29.

FIVE RBC downgrades the stock to Sector Perform from outperform.

KR To open up pop up Toy R Us stores in supermarkets.

Drug Makers

SAGE RBC raises its price target to $261 from $259.

FATE Jefferies initiates coverage with a Buy rating and a $17 price target.

BLUE Wedbush lowers its price target to $166 from $204.

FANG

AAPL Signs of disappointing demand for the XR, new reports of suspended production of the XR.

NFLX Buckingham upgrades the stock o Buy from underperform. Raises price target to $406 from $349.

GOOG Over 20,000 employees participated in the walk out last week. .

Dow 30:

CVX Credit Suisse upgraded the stock to Outperform from neutral, $138 price target.

GS Citi lowers its price target to $240 from $260.

VZ Realigns operating structure to focused on growth of the 5G market.

RUMOR:

TPCO Said to have received 3 buy out bids

CZR MGM said to be exploring a merger with debt ridden Caesars Casino.

*Information displayed above is for informational purposes only. Trading involves the risk of capital and we are not making any predictions on future events or movements in equity prices. All investors are advised to conduct their own independent research into individual stocks before making a purchase decision. In addition, investors are advised that past stock performance is not indicative of future price action.