11/28/2018 Morning Brief

Economic

After declaring in early October that the fed-funds rate was probably a "long way" from a neutral setting intended to neither speed nor slow growth, Fed Chairman Jerome Powell backtracked on Wednesday. He observed that rates are below the range of neutral estimates, varying from 2.5% to 3.5%, from 15 Fed officials in September. His comments ignited a market rally because investors thought it meant the Fed might be less convinced of the need to raise interest rates. In Fed Speak: at 2:00 pm ET Cleveland Federal Reserve Bank President Loretta Mester and Chicago Federal Reserve Bank President Charles Evans are scheduled to participate in a panel on "Collaboration for Inclusive Economic Development" in Boston, MA. At 3:00 pm ET Dallas Federal Reserve Bank President Robert Kaplan is scheduled to take part in a panel discussion in Boston MA. At 8:30 am ET, Jobless Claims and Personal Income and Outlays reports are scheduled for release. At 10:00 am ET Pending Home Sales figures. At 2:00pm ET the FOMC meeting minutes will be released.

Equity markets –

S&P futures are moving lower this morning, (-0.32%)

Asian markets mixed last night.

Exchange Close Change %Change

Nikkei 22262.60 85.58 0.39

Hang Seng 26451.03 -231.53 -0.87

European markets are trading higher this morning.

Exchange Last Change %Change

FTSE 7037.88 33.36 0.48

DAX 11373.67 74.79 0.66

* Futures point to a lower opening this morning. Market’s trend will be focused on US - China trade talks.

Oil Prices

Oil Prices are trading lower this morning. The U.S. crude oil benchmark, West Texas Intermediate, dropped 1% to $49.79 a barrel Thursday, the first time it has been below $50 since October 2017. Oil-traders continued to look to a crucial meeting next week in Vienna of the Organization of the Petroleum Exporting Countries and Russia. Pressure is mounting on the producers to engineer another production cut to rein in excess supply and bolster prices. At an investment forum on Wednesday, Russian President Vladimir Putin said that Russia is comfortable with $60 oil figure. OPEC and its partners meet in Vienna starting Dec. 6. WTI is currently trading at $49.87 a barrel and Brent Crude is at $58.22 a barrel.

Option Activity -

Bullish option activity in FCX, HTZ & TOL

Bearish option activity in F, TEVA & THS

Upcoming Earnings:

Ticker Company Straddle Price $ Move When Reporting

PANW Palo Alto Networks 6.94 $12.24 Thur Afternoon

VMW VMware Inc 5.21 $8.30 Thur Afternoon

Wen Option Volumes

Ticker Call Volu Put Volu Call OI Put OI

PANW 1,479 867 3,108 2,249

VMW 843 416 915 744

Sector Update:

Retail

DKS JP Morgan downgrades the stock to Neutral, lowers price target to $41 from $46.

TIF BofA lowered its price target to $105 from $120.

CVS Goldman reinstated coverage with a Neutral rating and an $87 price target.

Drug Makers

GSK Confirm potential consumer healthcare unit merger.

MRK Raised prices of 5 drugs in November.

ALKS Announced positive results of ALKS 3832 trial for treatment for schizophrenia.

Dow 30:

MCD Morgan Stanley upgrades the stock to Overweight, raises price target to $210 from $173.

KO China approves of Whitebread’s Costa to Coca Cola.

INTC DZ Bank downgrades the stock to Hold from buy.

FANG:

AMZN German authorities launch probe into AMZN treatment of 3rd party sellers.

GOOG Firm’s contractors seek inclusion into companies’ misconduct policies.

FB Emails show that FB considered selling access to user’s personal data.

Rumors:

DB Police searched six DB offices in money laundering probe.

ALK Imperial Capital raised its price target to $102 from $90.

NLSN Madison Dearborn is interested in bidding for NLSN.

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