Option Millionaires

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Broadcom faces EU antitrust probe into $61 bln VMware deal - sources

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US equity indices were mixed in choppy trade after producer prices rose more than forecast in November while inflation expectations fell over the near term, backing the argument for a slower speed of rate hikes but an elevated ultimate policy level.
The Nasdaq Composite was little changed at 11,082.1 after trading higher earlier in the session on Friday. The S&P 500 slipped 0.1% to 3,959.6 and the Dow Jones Industrial Average fell 0.2% to 33,702.2, both indices giving up intraday gains. The communication services sector was among the top gainers, while energy and healthcare were the steepest decliners.
The producer price index grew 0.3% in November, unchanged for the third month in a row but still higher than market expectations for a 0.2% gain.
The larger-than-expected increase reinforces the notion that there is still substantially more work to be done before the Fed has clearly reinstated price stability, according to a Stifel note Friday.
"Looking out to 2023, while the market is increasingly accepting of a terminal rate potentially in the range of 5%-5.5%, even at the upper bound of such a range, this may be severely understating the substantially restrictive level needed to quell inflation," Stifel Chief Economist Lindsey Piegza said.
The US 10-year yield jumped 7.2 basis points to 3.57%, while the two-year rate, which tends to align more closely with Federal Reserve policy, was marginally up at 4.32% intraday.
The December University of Michigan Consumer Sentiment index rose to 59.1 from 56.8, beating the consensus expectations for 57, according to a note from Jefferies on Friday. The index hit a record low of 50 in June. The 1-year-ahead inflation expectations index fell to 4.6%, the lowest level since June 2021, from 4.9% in November, the Jefferies note said. The cycle-high was 5.4% in March and April. Long-term expectations over a period of five years were steady at 3%, holding the uptick from 2.9% in October.
"The increase to 3.3% in June (before the revision) was what sparked the Fed to embark on a series of 75 basis points rate hikes," Jefferies economists Thomas Simons and Aneta Markowska said. "The current level of long-term inflation expectations is probably still pretty uncomfortable for the Fed, but it isn't high enough to prevent them from slowing down the pace of rate hikes at the upcoming meeting next week."

West Texas Intermediate crude oil futures fell 0.6% to $71.05.
In company news, DocuSign (DOCU) moderately raised its sales forecast for fiscal 2023 after reporting a third-quarter beat as a restructuring program announced in September helped underpin its operating margin. Shares surged 16% intraday, the top gainer on the Nasdaq.
Netflix (NFLX) shares jumped 5.4% intraday, the most on the S&P 500, after Wells Fargo upgraded the company's stock to overweight from an equalweight rating and raised its price target to $400 from $300.
Gold was up 0.6% to $1,812.65 and silver jumped 2.1% to $23.74.

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AMZN

(OPTION ALERT) AMZN put sweep new opening on the ask -- AMZN Dec22 9th 89.0 Puts 11,727 contracts at $0.22

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Bullish Call Activity:

WBD Dec 11 calls (volume: 3400, open int: 1210, implied vol: ~102%, prev day implied vol: 55%). Co is expected to report earnings late February.
SHOP Dec 40 calls (volume: 10.8K, open int: 7240, implied vol: ~112%, prev day implied vol: 83%). Co is expected to report earnings mid-February.
TAL Dec 6.5 calls are seeing interest with the underlying stock up 12% (volume: 3120, open int: 50, implied vol: ~35%, prev day implied vol: 30%). Nearly 1700 contracts traded in a single transaction. Co is expected to report earnings early March.
Bearish Put Activity:

ROKU Feb23 35 puts (volume: 5180, open int: 30, implied vol: ~95%, prev day implied vol: 90%). Co is expected to report earnings mid-February.
IQ Jun23 2 puts (volume: 11.2K, open int: 20.8K, implied vol: ~126%, prev day implied vol: 122%). Co is expected to report earnings mid-February.

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U.S. Household net worth fell at a -1.1% rate in Q3, after contraction rates of -15.7% (was -15.3%) in Q2 and -0.4% in Q1 from the all-time high of $150.1 (was $150.0) tln in Q4 of 2021, according to the Fed's Z.1 report. Total asset values fell at a -0.2% rate in Q3, after a -13.3% (was -12.9%) Q2 decline. Financial asset values fell at a -3.8% rate in Q3 after a -23.6% (was -23.0%) Q2 drop. Real estate values rose at a 7.4% rate in Q3 after a 14.2% (was 13.5%) Q2 rise. Household liabilities rose at a 6.9% rate in Q3 after an 8.0% (was 8.1%) Q2 rise, with a 7.0% Q3 home mortgage growth pace after a 9.0% (was 9.1%) Q2 rise. Analysts assume a 17% Q4 net worth bounce thanks to the stock market rebound, though the home price uptrend has stalled. Analysts assume a -1% 2022 household net worth drop that will mark the first decline since 2008, after stimulus-fueled outsized gains of 14.5% (was 14.4%) in 2021 after a 12.3% in 2020.

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New lows (111) outpacing new highs (42)

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$CVNA call buyer

(OPTION ALERT) CVNA new opening call sweep on the ask for 2024 --->> CVNA Jan24 10.0 Calls 1,000 contracts at $2.10

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TSLA call sweeps


(OPTION ALERT) TSLA call sweep on the ask -- $TSLA Dec22 9th 180 Calls 596 contracts at $1.99

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Coinbase Global: Mizuho downgrades COIN to Underperform; expecting depressed crypto volumes in '23-'24 (40.70 -2.11)
Analyst Dan Dolev commented, "Interest income from Circle's USD Coin (USDC) has been increasingly important for COIN amid deteriorating crypto sentiment and trading volume. We estimate it accounted for 10-15% of 3Q revenue. In this report, our proprietary analysis assesses the size and sustainability of this revenue stream. Our work helps quantify the potential adverse impact to COIN's profits should there be a downward adjustment in its share of interest income from Circle. We stress that this is purely a hypothesis on our part, based on observed trends in the industry. We expect depressed crypto volumes in 2023-24. Significantly reducing our 2024 revenue/EBITDA by -18%/-64%. PT to $30 from $42 (9x terminal EBITDA)."

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Netflix: Wells Fargo upgrades to Overweight, suggests ads could help improve revs; thinks churn will improve in '23 (325.21 +14.95)
Analyst Steven Cahall said, "Positive catalyst path in 2023, led by lower churn and stable subs. Looking back, with competition increasing and content growth slowing, the pieces were there for tougher NFLX performance in 2022. Looking at the same mosaic, we see scope for the KPIs to exceed in 2023, and NFLX is still down by about half YTD vs the S&P500 -17%. Content is clearly improving with MAUs/DAUs up 6%/9% y/y in our latest monthly data scrub as content starts to hit. We think the pull-forward from COVID is now mostly digested, with global connectivity still providing a long-term tailwind of ~+8mm net adds annually before any penetration increase. We see churn improving in '23 due to content + AVOD + paid sharing, and 10bps of churn = ~10mm subs. So, we feel better on subs, while ads drive us ahead on revenues."

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https://www.wsj.com/articles/carvana-creditors-criticize-management-gird-for-a-fight-11670599352?mod=Searchresults_pos1&page=1

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Consumer sentiment warms up in December
The preliminary December University of Michigan Index of Consumer Sentiment checked in at 59.1 (Briefing.com consensus 57.0) versus the final reading of 56.8 for November. In the same period a year ago, the index stood at 70.6.

The key takeaway from the report is that sentiment improved in conjunction with rising stock prices and falling gas prices. Notably, inflation expectations also improved with the downturn in gas prices.

The Current Economic Conditions Index rose to 60.2 from 58.8. In the same period a year ago, the index stood at 74.2.
The Index of Consumer Expectations jumped to 58.4 from 55.6. In the same period a year ago, the index stood at 68.3.
Year-ahead inflation expectations fell to 4.6% from 4.9%, reaching their lowest level in 15 months.
Long run inflation expectations remained unchanged at 3.0%.

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CVNA


Carvana: Confidence is Low on the Path Forward, Downgrade to Hold - Needham (4.96 0.00)
Needham's Chrris Pierce states, "To derive a rough approximation of CVNA's value, we looked at KMX's enterprise value of ~$13B, applied a 50% haircut given KMX transacts on roughly 2x units vs CVNA, then applied another 50% haircut given KMX transacts on these units profitably, getting to a ~$3B EV for CVNA. If we assume the equity portion of CVNA's EV makes up 10% of the new entity, that suggests $300M, or roughly $1.50/share."

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$CAT Caterpillar target raised earlier to $264 at Cowen -- Best ideas for 2023: well positioned for infrastructure and mining replacement (231.63 +0.71)
Cowen raises their CAT tgt to $264 from $240. Analyst Matt Elkott added, "We've long held that this cycle's peak will come in 2024 or later for CAT. We think the Street is just starting to warm up to this view. Recent checks suggest that infrastructure projects are beginning to trickle into the machinery sector, likely kicking off a multiyear cycle. We see incremental revenue opportunities north of $30Bn for CAT from autonomy and automation in the next 10 years."

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The stock market opened on a downbeat note after the hotter-than-expected November Producer Price Index. Things are holding up well, though, with all the major averages lifting off opening levels.

Weakness from a few mega cap names is weighing on index performance. The Vanguard Mega Cap Growth ETF (MGK) is down 0.1% versus a 0.1% gain in the Invesco S&P 500 Equal Weight ETF (RSP).

Roughly half of the 11 S&P 500 sectors trade in positive territory led by communication services (+0.6%) while energy (-0.3%) brings up the rear.

Just in, the preliminary University of Michigan Consumer Sentiment reading for December rose to 59.1 (Briefing.com consensus 57.0) from a prior reading of 56.8.

Wholesale Inventories fell to 0.5% in October from a revised 0.8% in September (from 0.6%).

[jimmybob]

NFLX new highs

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December Univ. of Michigan Consumer Sentiment - Prelim 59.1 vs. 57.0 Briefing.com consensus; November Final was 56.8

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ROKU sympathy move incoming

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Morning Watch List : https://www.optionmillionaires.com/december-9th-2022-watch-list/

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readws


https://www.optionmillionaires.com/morning-reads-156/

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November Core PPI 0.4% vs. 0.2% Briefing.com consensus; prior 0.0%

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Arcellx announces continued robust long-term responses from its CART-ddBCMA Phase 1 expansion trial in patients with relapsed or refractory multiple myeloma and additional pipeline progress (halted) (21.68)
100% ORR at both CART-ddBCMA dose levels; deep and durable responses observed in patients with poor prognostic factors.
27 of 38 (71%) evaluable patients reached CR/sCR; 20 of 25 patients (80%) dosed > 12 months ago or had their 12-month follow-up visit by November 22, 2022 have reached CR/sCR.
No cases of Grade >3 CRS at RP2D and no delayed neurotoxicity or parkinsonian-like events.
First patients dosed in iMMagine-1 Phase 2 clinical trial with pivotal drug product.
Initiated the Phase 1 clinical trial of ACLX-002 for the treatment of patients with AML/MDS.
Management to host a live webcast event with an expert panel of clinicians to discuss the CART-ddBCMA clinical results on Sunday, December 11, 2022, at 11:00 AM CT.

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S&P 500 futures are 0.6% above fair value; the Nasdaq 100 futures are 0.6% above fair value; and the DJIA futures are 0.4% above fair value
Key factors driving the futures market:
Hopeful anticipation that the November Producer Price Index will show improved inflation data
Gains in the mega-cap stocks (GOOG, MSFT, AAPL, TSLA, META, and NVDA) in pre-market trading
Goldman Sachs names Microsoft (MSFT) a Top Pick for 2023
IMF and World Bank express concerns about weakening global economic outlook, according to Bloomberg
Arizona Senator Kyrsten Sinema announces she is leaving Democratic Party and will register as an independent. Her move is not likely to change the balance of power in the Senate, according to CNN.
The U.S. will soon impose sanctions on Russia and China for human rights violations, according to The Wall Street Journal
Workers at General Motors (GM) battery plant vote to form a union, according to The Wall Street Journal
Tesla (TSLA) will suspend Model Y output at Shanghai plant during last week of 2022, according to Reuters
Sam Bankman-Fried says he is willing to testify at House hearing on Tuesday, December 13
China's November CPI +1.6% year-over-year versus +2.1% in October; November PPI -1.3% year-over-year versus -1.3% in October
Brokerage research calls of note:
Upgrades: DOCU, MOMO, JAZZ, NFLX, NHI, NYCB, PHR, VALE
Downgrades: AA, CVNA, COIN, EQH, FIS, GMS, IOVA, MET, MRTX, NRG, PACW, PEB, SHO, CURV, UBS, XHR
WTI crude futures +0.6% to $71.85/bbl; nat gas futures +0.3% to $5.98/mmbtu; copper futures -0.2% to $3.88/lb.
2-yr note yield -6 bps to 4.26% and 10-yr note yield -2 bps to 3.47%
The U.S Dollar Index is down 0.1% to 104.65
Today's economic data: November Producer Price Index at 8:30 a.m. ET; December Preliminary Univ. of Michigan Index of Consumer Sentiment and October Wholesale Inventories at 10:00 a.m. ET

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https://www.optionmillionaires.com/morning-reads-156/

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Microsoft (MSFT 248.31, +0.91, +0.4%): named a top pick for 2023 by Goldman Sachs
Netflix (NFLX 318.75, +8.49, +2.7%): upgraded to Overweight from Equal Weight at Wells Fargo
Costco (COST 479.00, -2.42, -0.5%): misses by $0.06, misses on revs
Vail Resorts (MTN 255.46, +4.25, +1.7%): misses by $0.11, beats on revs; reaffirms FY23 net income guidance and resort reported EBITDA guidance
Broadcom (AVGO 553.00, +21.92, +4.1%): beats by $0.16, reports revs in-line; guides JanQ revs above consensus; will resume authorized share repurchases for remaining $13 bln; increasing quarterly dividend 12% to $4.60/share
RH (RH 270.10, +3.72, +1.4%): beats by $0.97, beats on revs; raises low end of FY23 revenue growth guidance range, raises adj. operating margin guidance
Vale S.A. (VALE 16.75, +0.32, +2.0%): upgraded to Overweight from Equal Weight at Morgan Stanley
DocuSign (DOCU 48.63, +4.88, +11.2%): beats by $0.15, beats on revs, beats on billings; guides Q4 revs slightly below consensus; Billings rose 17% yr/yr to $659.4 mln vs $584-594 mln prior guidance.
lululemon athletica (LULU 349.15, -25.36, -6.8%): beats by $0.04, beats on revs, comps of +22%; guides Q4 EPS in-line, revs in-line; expects to double net revs to $12.5 bln by 2026
Bath & Body Works (BBWI 43.91, +1.76, +4.2%): Third Point discloses 6.02% stake per 13D filing

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Big Tech appears to be in for a rude awakening as the Federal Trade Commission flexes its muscles under the leadership of Lina Khan. The antitrust enforcer has voted 3-1 to block Microsoft's (MSFT) $69B deal for game developer Activision Blizzard (ATVI), making waves across the industry. The decision is a clear sign that Khan and her team at the FTC will be more aggressive in cracking down on the biggest U.S. tech giants, who frequently grow their influence or fight off upcoming challengers via acquisition.

What are the concerns? Simply put, the FTC feels that the tie-up between Microsoft - the company behind Xbox - and one of the best known game developers could harm competition. Activision's Call of Duty and World of Warcraft are some of the most popular gaming franchises, and turning Microsoft into the No. 3 gaming company in the world could limit rivals' access to titles or raise prices for other gaming platforms. The FTC also said it would give the Xbox maker an unfair advantage in the new market for game subscriptions, as well as the emerging market for cloud gaming.

Microsoft has gone to great lengths in recent days and weeks to assuage the fears, like inking a deal to bring Call of Duty to Nintendo (OTCPK:NTDOY) for the next decade. A similar offer to Sony (SONY) on same-day access to the game on its PlayStation platform has so far been rebuffed, but the Xbox maker remains "committed to helping bring more games to more people - however they choose to play." Microsoft President Brad Smith has also been spotted in Washington, meeting with lawmakers to argue that the deal would "create more opportunities for gamers and game developers."

Go deeper: The U.S. is not the only jurisdiction where Microsoft might have to fight, as the transaction is also seeing in-depth reviews in Europe and the U.K. While the company initially took the concessions route, it now looks like it will be presenting its case in court. Prepare for a drawn-out battle that might include precedent of so-called vertical deals, whether withholding games from platforms would be profitable and whether Microsoft has made good on its past promises. The tech giant has also been in the antitrust spotlight before in a landmark DOJ suit from 1998, which saw Microsoft agree to modify some of its business practices. (89 comments)

New disclosures

The U.S. Securities and Exchange Commission has revealed new guidance that could require publicly-traded companies to disclose to investors any potential impacts from the troubled cryptocurrency market. Moreover, firms may need to share information with their investors regarding their crypto holdings, as well as their risk exposure to bankruptcies in the emerging space. Lastly, they should consider risks pertaining to a company's liquidity position, according to the guidance.

Backdrop: The latest development comes after the once-mighty crypto exchange FTX filed for bankruptcy protection in November. Traders rushed for the exit en masse upon discovery of its multi-billion dollar balance sheet shortfall, marking its demise as the industry's most high-profile downfall. FTX is facing a number of federal investigations, including by the SEC, while the mess sent shockwaves through the crypto ecosystem and caused high-profile crypto lender BlockFi to file for Chapter 11.

"Recent bankruptcies and financial distress among crypto asset market participants have caused widespread disruption in those markets," the SEC's Division of Corporation Finance wrote in a sample letter. "Companies may have disclosure obligations under the federal securities laws related to the direct or indirect impact that these events and collateral events have had or may have on their business."

Go deeper: The crypto market downturn has been highlighted by huge drawdowns in some of the largest digital tokens by market cap, including Bitcoin (BTC-USD) dropping some 70% from its November 2021 all-time high. A handful of U.S.-listed firms have already announced their exposures to Sam Bankman-Fried's short-lived crypto empire, namely Coinbase (COIN) and Silvergate Capital (SI). In November, SEC Chairman Gary Gensler also confirmed that crypto investors "need better protection in this space." (2 comments)

Meet C919

After 14 years of development, the Commercial Aircraft Corporation of China, better known as COMAC, delivered its first domestically-developed passenger jet to launch customer China Eastern Airlines (NYSE:CEA). The C919, similar to the Airbus (OTCPK:EADSY) A320 and Boeing (NYSE:BA) 737 narrow-body jet families, brings China a step closer toward its ambitious goal of becoming a global civil aerospace player. The plane is expected to make its maiden commercial flight in the spring, with a trip between Shanghai and the capital Beijing, as well as hopes to quickly expand routes to other cities.

Industry response: "Congratulations to COMAC for delivering the first C919, bringing a new model to the global civil aviation market," Boeing China wrote on its WeChat account. "We look forward to working with COMAC and other industry peers to continue working on the long-term sustainable development of the aviation industry," Airbus added in a statement.

China's first national passenger jet contains 164 seats, with a maximum range of 3,450 miles. The C919's price tag also comes in at $99M, compared with costs of around $111M and $122M for similar-sized Airbus A320neos and the Boeing 737 Max family. In terms of backlog, COMAC has already booked 1,115 orders (mostly from Chinese lessors) versus the 6,200 and 3,590 order backlog for the A320neo and 737.

Outlook: Despite the emerging C919, it will take many years before COMAC becomes a serious threat to the Western aerospace duopoly. Besides finding new customers outside of China, the program is expected to produce only 25 C919s per year by 2030, which is way lower than the monthly narrow-body production rates at its rivals. The C919 also relies heavily on Western components, including engines, flight systems and other critical parts that are manufactured by companies like GE (NYSE:GE), Honeywell (NASDAQ:HON) and Safran (OTCPK:SAFRY). (15 comments)

Rare miss

Costco (COST) uncharacteristically missed earnings estimates after the bell on Thursday. Investors were eager to hear the results given the headwinds facing the economy, as well as whether spending is being diverted from discretionary items to the necessities.

Snapshot: The retailer reported $3.07 in earnings per share on $53.44B in revenue, compared to analyst expectations of $3.12 and $54.68B, respectively. The miss wasn't seen as major, with the stock hardly moving in response, but it did suggest that many shoppers are paring back on bigger ticket items. Comparable sales from stores open at least a year also rose 7.1% during the period, marking the first time the figure has fallen below 9% over the past two years.

Other retailers have flagged weaker sales trends this past quarter, including Target (TGT) and Walmart (WMT). Costco may look to make up some of the lost profits with a membership fee hike, and CFO Richard Galanti said it wasn't a question of if, but when. "We feel that we're in a very strong competitive position right now and if we have to wait a few months or several months, that's fine."

From the SA comments section: "I see it as more about the overall change in the economy than Costco, but it's been richly valued and vulnerable to a downturn," wrote user zingerizer. "I am a big believer in COST despite the miss," countered DividendLand. "On the surface one might think missing estimates is a serious problem. I think one has to dig deeper. Lack of inventory is a problem, and might be an explanation." (28 comments)

Today's Markets

In Asia, Japan +1.2%. Hong Kong +2.3%. China +0.3%. India -0.6%.
In Europe, at midday, London -0.1%. Paris +0.1%. Frankfurt +0.4%.
Futures at 6:30, Dow +0.2%. S&P +0.3%. Nasdaq +0.4%. Crude +0.7% to $71.98. Gold +0.6% to $1812.40. Bitcoin +2.3% to $17,242.
Ten-year Treasury Yield unchanged at 3.49%

Today's Economic Calendar

8:30 Producer Price Index
10:00 Consumer Sentiment
10:00 Wholesale Inventories (Preliminary)
1:00 PM Baker-Hughes Rig Count

Companies reporting earnings today »

What else is happening...

Lululemon (LULU) holiday quarter guidance misses high expectations.

Broadcom (AVGO) to face European probe into VMware (VMW) deal.

Updated COVID boosters cleared for children as young as six months.

Lithium execs say mega-rally in prices could have more room to run.

Keystone pipeline (TRP) shut after 14,000-barrel oil spill in Kansas.

United Airlines (UAL) poised for major order of Boeing (BA) Dreamliners.

Meta Platforms (META) set to face antitrust trial on virtual reality tie-up.

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Pinduoduo upgraded to Outperform from Neutral at KGI Securities
KGI Securities analyst Andrew Cheng upgraded Pinduoduo to Outperform from Neutral with a $110 price target.

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STOXX Europe 600: +0.4% (-1.4% week-to-date)
Germany's DAX: +0.4% (-1.4% week-to-date)
U.K.'s FTSE 100: -0.1% (-1.2% week-to-date)
France's CAC 40: +0.1% (-1.4% week-to-date)
Italy's FTSE MIB: -0.5% (-2.2% week-to-date)
Spain's IBEX 35: +0.2% (-1.7% week-to-date)

[jimmybob]

Wells Fargo upgrades Netflix shares on 'more ways to win' in 2023
Wells Fargo analyst Steven Cahall upgraded Netflix to Overweight from Equal Weight with a price target of $400, up from $300. A positive catalyst path in 2023, led by lower churn and stable subscribers, creates "more ways to win," Cahall tells investors in a research note. With competition increasing and content growth slowing, "the pieces were there for tougher NFLX performance in 2022," says the analyst. However, looking at the same mosaic, he sees scope for key performance indicators to exceed in 2023, and notes that Netflix shares are still down by about half year-to-date. The company's content is "clearly improving" and the pull-forward from COVID is now mostly digested, with global connectivity "still providing a long-term tailwind," contends Cahall. He sees Netflix's churn improving in 2023 due to content and paid sharing

[jimmybob]

Netflix price target raised to $405 at Cowen, named a 'Best Idea for 2023'
Cowen analyst John Blackledge raised the firm's price target on Netflix to $405 from $340 and keeps an Outperform rating on the shares and named the stock as his top 2023 large cap pick. He cites new monetization levers, including the new lower price ad tier that could drive accelerating net member additions and the paid sharing solution launching globally, expectations for revenue growth re-accelerating in the second half and ramping free cash flow growth

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Ciena price target raised to $65 from $55 at Citi
Citi analyst Jim Suva raised the firm's price target on Ciena to $65 from $55 and keeps a Buy rating on the shares. Investors will be impressed that Ciena beat sales by 15% and guided 9% higher, Suva tells investors in a research note. The analyst sees more upside ahead, saying Ciena's backlog likely grows again next quarter and "there are no signs of share loss."

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Respawn Entertainment, Electronic Arts (EA), and Lucasfilm Games revealed that Star Wars Jedi: Survivor will launch on PlayStation5, Xbox Series X|S and PC on March 17, 2023. During the annual awards show, a first look at gameplay was premiered in a new Official Reveal trailer showcasing Cal Kestis (Cameron Monaghan) as a stronger and more experienced Jedi Knight while setting up the threats that await him. The veteran team at Respawn Entertainment is developing Star Wars Jedi: Survivor for the latest generation of gaming hardware to deliver action-packed Jedi combat with the deepest exploration and cinematic gameplay in the series.
Cloud Music Inc. announced that it has entered into a licensing agreement for digital music distribution with Pony Canyon Inc, a leading anime and music production company in Japan, granting NetEase (NTES) Cloud Music the right to distribute Pony Canyon's music catalog. Under the terms of the Agreement, the two companies will join hands to bring more creative music content, especially J-pop and anime music, to audiences in China. Pony Canyon's robust portfolio boasts a strong global presence in overseas markets with a number of influential J-pop artists, including Official HIGE DANdism, GARNiDELiA, Kana Hanazawa, Maaya Uchida, aiko, and luz, among others.
CNH Industrial (CNHI) unveiled the next step in alternative power for agriculture at its Tech Day event in Phoenix, Arizona, USA. New Holland Agriculture, one of our global agricultural brands, presented the T7 Methane Power LNG (Liquefied Natural Gas) pre-production prototype tractor.
Amazon (AMZN) Games and Bandai Namco Online Inc. announced they are bringing Blue Protocol, a multiplayer online action role-playing game featuring beautiful, anime-inspired art, to North America, Europe, South America, Australia, and New Zealand. Blue Protocol will be free-to-play, and will launch for PC, Xbox Series X|S, and PlayStation 5 in the second half of 2023, with a Closed Beta on PC earlier in the year.

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Shopify price target raised to $45 from $40 at SMBC Nikko
SMBC Nikko analyst Andrew Bauch raised the firm's price target on Shopify to $45 from $40 and keeps an Outperform rating on the shares. The analyst says Shopify is one of the few names in his coverage with the potential to accelerate sales growth and expand margins simultaneously in 2023. He sees "see several emerging and SHOP-specific opportunities, the most important being the evolution of Shopify's Payment strategy." Bauch recommends investors accumulate the shares opportunistically.

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US Futures perking up
The global equity markets are trading higher. December S&P Futures are up about 10 points to trade around the 3975 area, while the March contract is quoted around 4008. The contract rollover activity ramps up today. The December contract saw a modest dip down to the low of 3960.25 before buyers stepped in. A move higher peaked at 3982.75 at the beginning of the European trade.
In Asia, China rose 0.3%, while Japan closed up over 1%.Inline inflation data and the continued loosening of COVID-related curbs supported the Shanghai Composite. China's November CPI rose 1.6% year-over-year, down from 2.1% prior. In Japan, the Nikkei followed Wall Street higher. Semiconductors rallied hard, with names such as Tokyo Electron, Advantest and Screen Holdings surging 3-6%.
In Europe, the major bourses are modestly higher on a day when the economic calendar is light. Despite crude oil trading higher by 1%, energy stocks have been a drag, with Shell, BP and TotalEnergies shedding 1-2%.
Market Updates

S&P Futures vs Fair Value: +10.0
10 yr Note: 3.85%
USD/JPY: 136.11 -0.59
EUR/USD: 1.0558 +0.0003
Europe: FTSE: +0.2% DAX: +0.3% CAC: +0.1%
Asia: Hang Seng: +2.3% Shanghai: +0.3% Nikkei: +1.2%
Gold (1805.70 +4.20) Silver (23.25 +0.01) Crude (72.17 +0.71)

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Tesla to suspend Model Y output in Shanghai in last week of Dec-memo

[uranium-pinto-beans]

$NFLX: Wells Fargo Upgrades to Overweight from Equal Weight - PT $400 (from $300)

[uranium-pinto-beans]

Bullish Call Activity:

ATUS Jan23 5 calls (volume: 1620, open int: 300, implied vol: ~100%, prev day implied vol: 85%). Stock resumed with an Underperform at BofA Securities; tgt $3.50. Co is expected to report earnings mid-February.
DKNG Dec 15.5 calls (volume: 7940, open int: 1270, implied vol: ~114%, prev day implied vol: 100%). 1500 contracts traded in a single transaction. Co is expected to report earnings mid-February.
CCJ Dec 22.5 calls (volume: 2340, open int: 300, implied vol: ~54%, prev day implied vol: 52%). Co is expected to report earnings early February.
Bearish Put Activity:

KR Dec 47.5 puts (volume: 2020, open int: 10, implied vol: ~30%, prev day implied vol: 29%). Co is expected to report earnings early March.
NU Jan23 3.5 puts (volume: 30.0K, open int: 50, implied vol: ~69%, prev day implied vol: 68%). 30K traded in a single transaction. Co is expected to report earnings early March.

[uranium-pinto-beans]

DocuSign options imply 14.3% move in share price post-earnings
Pre-earnings options volume in DocuSign is 1.2x normal with puts leading calls 5:4. Implied volatility suggests the market is anticipating a move near 14.3%, or $6.25, after results are released. Median move over the past eight quarters is 15.1%.

[uranium-pinto-beans]

T-Mobile US (TMUS 145.39, -3.40, -2.3%): weakest performer in the sector, fell to its 50-day moving average (144.21) before narrowing its loss. Company announced that it will collaborate on a project with VinFast Auto.
Alphabet (GOOG 94.38, -0.77, -0.8%): falling for the sixth consecutive day to its lowest level in nearly a month.
Activision Blizzard (ATVI 75.30, -0.63, -0.8%): fell toward its 50-day moving average (73.69) before narrowing its loss.
AT&T (T 19.18, -0.12, -0.6%): hit its best level since late July before turning negative. Argus upgraded the stock to Buy from Hold with a $24 target.
Netflix (NFLX 307.10, -1.32, -0.4%): trading in the upper half of yesterday's range.
Disney (DIS 92.36, +0.21, +0.2%): inching up off its lowest level in three weeks. Disney+ launched a subscription tier with ads.
Electronic Arts (EA 126.64, +0.63, +0.5%): fell past its 200-day (126.77) and 50-day (126.21) moving averages before returning to its 200-day average.
Comcast (CMCSA 34.87, +0.25, +0.7%): seeking its first gain in six days.
Meta Platforms (META 115.16, +1.23, +1.1%): climbed toward its 50-day moving average (118.05) before narrowing its gain.
Fox (FOX 29.35, +0.43, +1.5%): staying above its 50-day moving average (28.58).
DISH Network (DISH 14.68, +0.23, +1.6%): best performer in the sector, climbed above its 50-day moving average (14.81) before slipping back below that mark.

[uranium-pinto-beans]

Unusual Option Volume $EPXR 17x normal $SMMT 13x normal $MOMO 17x normal $CIEN 8x normal $EBAT 618x normal $USER 8x normal $UNIT 18x normal $ADMA 6x normal $TRVG 19x normal $RENT 17x normal $NIU 5x normal

[uranium-pinto-beans]

Economic Data Summary:

Weekly Initial Claims 230K (Briefing.com consensus 220K); Prior was revised to 226K from 225K; Weekly Continuing Claims 1.671 mln; Prior was revised to 1.609 mln from 1.608 mln
The key takeaway from the report is that continuing jobless claims hit their highest level since February 2022, suggesting perhaps that it is becoming more difficult to find a job as employers are taking a more cautious-minded approach with their hiring plans.
Upcoming Economic Data:

November PPI due out Friday at 8:30 ET (Briefing.com consensus 0.2%; Prior 0.2%)
November Core PPI due out Friday at 8:30 ET (Briefing.com consensus 0.2%; Prior 0.0%)
December Univ. of Michigan Consumer Sentiment - Prelim due out Friday at 10:00 ET (Briefing.com consensus 57.0; Prior 56.8)
October Wholesale Inventories due out Friday at 10:00 ET (Prior 0.6%)

[uranium-pinto-beans]

NVIDIA (NVDA 167.34, +6.14, +3.8%): best performer in the sector, rallying toward its 200-day moving average (175.44).
Teradyne (TER 94.63, +3.27, +3.6%): rising toward its 200-day moving average (96.85).
Micron (MU 55.37, +1.55, +2.9%): rising back to its 50-day moving average (55.42).
Qualcomm (QCOM 121.40, +3.19, +2.7%): bouncing off its 50-day moving average (117.70).
Intuit (INTU 398.55, +9.90, +2.6%): rising back above its 50-day moving average (397.16).
Applied Materials (AMAT 108.49, +2.38, +2.2%): approaching its December high (110.67).
Broadcom (AVGO 529.36, +10.86, +2.1%): returning to its 200-day moving average (531.62).
Adobe (ADBE 332.89, +6.21, +1.9%): reclaiming losses from the past two days.
Apple (AAPL 142.48, +1.54, +1.1%): revisiting yesterday's high with its 50-day moving average (145.17) looming above.
Texas Instruments (TXN 175.51, +1.76, +1.0%): rising toward the midpoint of its range from Tuesday.
Oracle (ORCL 79.53, +0.75, +1.0%): revisiting yesterday's high.
Mastercard (MA 350.66, +3.24, +0.9%): rising into the top half of its range from Tuesday.
IBM (IBM 148.65, +1.38, +0.9%): rising toward its December high (150.01). Company agreed to acquire Octo for an undisclosed sum.
Microsoft (MSFT 246.67, +2.30, +0.9%): reclaiming yesterday's loss.

[jimmybob]

Out some of my AYX $50 calls @ .45 from .20

[uranium-pinto-beans]

(OPTION ALERT) KWEB sees puts opening on the ask -- KWEB Jan23 6th 30.0 Puts 10000 contracts at $1.51

[uranium-pinto-beans]

there should be no drama with next week's rate decision where a step down to a 50 bp hike to 4.375 is widely expected. Hence the focus will be on Chair Powell's press conference, SEP forecasts, and especially the dots. Analysts expect Powell will continue to stress the overriding risks of not bringing inflation under control, underscoring the likelihood of further hikes in 2023. Additionally, attention will be on the Fed funds forecasts for clues on the policy path. The Chair already warned to expect upward revisions to the September forecast, and analysts expect at least Bullard will mark-up his dot to a 5% level. But analysts still expect median Fed funds rates of 4.6% in 2023 and 3.9% in 2024. Analysts also expect small upward revisions for GDP growth and the PCE chain price gains in 2022, but downward bumps in the jobless rate estimates, which will likely be followed by small trimmings for the 2023 estimates for those variables. GDP is expected to be revised up by 0.1%-0.2% for all of the 2022 range and central tendency estimates. Headline and core chain price indexes should see 2022 increases of about 0.2%-0.3% for all but the high-end estimates.

[jimmybob]

AYX $45s

[jimmybob]

$TNDM gap fill coming pic.twitter.com/sL2xDVJO2a

— Option Millionaires (@OMillionaires) December 8, 2022

[uranium-pinto-beans]

Earnings/guidance movers
Gainers: MOMO +26.67% CIEN +20.24% GMS +7.98% OXM +4.26% GME +1.53% HCP +0.18%
Decliners: AI -0.42% MANU -1.84% DSGX -2.93% VRNT -3.24% GEF -5.69% SPWH -7.76% KFY -7.28%

[uranium-pinto-beans]

early gainers today include:
CVNA $4.19 +0.36 +9.40%,
NIO $13.04 +0.46 +3.66%,
BABA $91.52 +3.19 +3.61%,
LVS $48.82 +1.69 +3.59%,
JD $60.36 +1.91 +3.27%,

while the biggest losers include:
CGC $3.10 -0.14 (-4.32%),
AFRM $10.88 -0.46 (-4.06%),
TLRY $3.57 -0.14 (-3.77%),
SHOP $37.16 -1.33 (-3.46%),
BBBY $3.18 -0.09 (-2.76%),

[uranium-pinto-beans]

When gasoline prices shot upward earlier this year, Mark Adams tapped the brakes on his hobby of exploring ghost towns and other historic sites across Oregon and sharing the imagery on YouTube. Now, he is back.
A medical-device technician by day, Mr. Adams bought a more fuel-efficient car and has since watched his weekly gas bill fall from as high as $75 to about $30 . It is enough of a difference that the 57-year-old has begun charting out which abandoned structures he is going to visit next.
"It doesn't pay for itself when you're just a YouTuber," Mr. Adams said of his pastime.
Many other motorists like Mr. Adams are finally getting some relief at the gas pump, signaling that some of the recent pressures on the gasoline market are easing.
The U.S. average for regular unleaded gasoline has declined to $3.32 a gallon, falling below its average of $3.36 from last year, according to GasBuddy data. That is down about 35% from its peak of about $5 earlier in the year, when the war in Ukraine disrupted supplies and boosted prices for raw materials from copper to corn to diesel.
The decline in gas prices bodes good news for consumers, whose wallets have been pinched this year by higher prices for nearly everything from milk to bread to eggs. Higher gas prices have been the biggest contributor to multidecade highs in inflation, which have propelled the Federal Reserve to aggressively raise interest rates, battering stocks and bonds alike.
The decline extends a wild year for gas prices, which soared to records in the summer, upending motorists' travel plans. Now, some analysts expect them to fall below $3 by the end of the year.
Gas prices can vary regionally because of taxes and distance from refineries. But all 50 states have seen monthly drops, with the slide led by Wisconsin , Indiana and California . Prices for diesel, used in trucking and manufacturing, have fallen in about 48 of 50 states, led by Oklahoma , South Dakota and Kansas .
"Most Americans are going to start to feel that gas prices are no longer a thorn in their side," said Patrick De Haan , head of petroleum analysis at GasBuddy . Mr. De Haan also expects diesel prices will retreat below $5 a gallon in the next few days and below $4 a gallon in the next few months.
The cost of gasoline climbed after the global flow of crude oil was disrupted by economic fallout from Russia's invasion into Ukraine . Higher gas prices heightened political tensions during the midterm elections and contributed to President Biden authorizing the release of 180 million barrels of oil from the country's Strategic Petroleum Reserve.
The global benchmark for crude prices has since plunged about 40% from its war-driven 2022 high. Russian oil has kept flowing to the market and stringent lockdowns in China , the world's biggest consumer of commodities, has hurt demand.
The U.S. crude futures contract lost 3% Wednesday to settle at $72.01 a barrel. Brent crude slid 2.8% to $77.17 .
Energy stocks have surged despite a tepid performance by other companies. The S&P 500 energy sector is the only one of the index's major groups in the green, up about 53% so far this year. Shares of energy-giant Exxon Mobil Corp. have added 70%, Hess Corp.'s have gained 82% and Halliburton Co.'s have more than doubled through the same period.
Oil traders don't expect Western sanctions on Russian crude, which took effect Monday, to push prices meaningfully upward by taking supplies off the market. Analysts also worry that demand from China remains soft despite a gradual move to reopen its economy.
To be sure, investors hope that China's eventual reopening, coupled with a flat production outlook among many oil producers, could boost gasoline prices and energy stocks next year.
"You're going to need to refill oil inventories in the U.S. and China , and supply is not going to be that substantial," said Rob Thummel , portfolio manager at Tortoise, an energy asset manager. Mr. Thummel said that along with the ability to return cash to shareholders could lead to extended energy stocks' gains next year.