Monday 01/06/2020 MORNING NOTES: S&P’s this morning High 320.75 Low 319.93 Change lower by 0.54%. Tokyo -451.76 Hong Kong -225.31 London -69.53 Germany -182.06 S&P Futures are trading lower this morning. Key developing stories include; Iran threatens to retaliate for the killing of it top genera. In a nonbinding vote the Iraqi parliament voted for the removal of U.S. troops in its country. Trump threatens sanctions is the Iraqi if they proceed with this action. Fed’s Williams stresses need to stick to 2% inflation target over the weekend. Asian stocks fell overnight and safe-haven assets such as gold and the yen rose after Iran vowed “severe revenge” against the U.S. for killing top commander. President Trump threatened Iraq with harsh sanctions if the country forced out U.S. troops. Chinese shares gave up early gains to end on a flat note as looming military tensions in the Middle East. China’s private sector growth eased in December as both manufacturing and services logged weaker growth, according to survey data from IHS Markit . The Caixin composite Purchasing Managers’ Index fell to 52.6 from 53.2 in November. European stocks are sharply lower this morning, but off their earlier lows in a broad-based decline that was the worst in more than a month over worries about increasing Middle East tensions.
OIL PRICES: Oil prices are trading higher this morning. The move higher reflects trading anxiety as fear of more violence across the oil-rich region appear likely. Oil prices hit as high as $70.75 earlier in overnight trading. Iran has vowed retaliation against the U.S. for the killing of one of their top generals and has said that it would no longer abide by the limits contained in the 2015 nuclear deal. President Trump threatened additional stikes if Iran retaliates. He stated that Iranian cultural sites are fair game for the U.S. military. The Iraqi parliament voted in favor of a resolution calling for an end to the foreign military presence in the country, including the estimated 5,200 U.S. troops stationed to help fight Islamic State extremists. President Trump responded to this action with a threat to impose sanctions on Iraq. Iraq is the 2nd largest oil producer in the region following Saudi Arabia. WTI is at $63.81 a barrel, Brent Crude is at $69.64 a barrel. For news on oil type in .OIL or “OPEC” into NewsWare
Economic: Geopolitical risk in the Middle East reverberated around the world due to the elevated tensions between the U.S. and Iran. Additional actions on either side is likely to keep oil prices elevated which is a negative for global economic growth. Federal Reserve Bank of New York President John Williams said on Sunday that low global interest rates are here to stay, which should lead central bankers to renew their commitment to inflation goals. China’s services sector expanded at a slower pace in December, pressured by a softer rise in new orders and declining business confidence according to survey from IHS Markit. Former Fed Chairmen Ben Bernanke published a paper on Saturday indicating that the Fed has ample tools for fighting a potential recession even though its benchmark interest rate remains historically low. Mr. Bernanke said asset purchases and public communication would be effective in jolting the economy in a downturn. Those methods, known as “quantitative easing” and “forward guidance,” represent the equivalent of up to 3 percentage points of cuts in Fed interest rates, he said. Economic Reports: At 09:45 am ET PMI Services Index Fed Speak: To access Economic news type .Economic into NewsWare. Options Activity: Bullish option activity in BP, CRWD & CXO Bearish option activity in ADI, COUP & IP To access news related to options type .OPTIONS into NewsWare Sector Update: Headlines to Note- Retail: BBBY P/SGN Agreed to sell ½ of its real estate in a lease back deal generating $250m. WMT P/SGN Signed an exclusive deal with Smiledirectclub (SDC). TSCO .REC UBS lowers its price target to $100 from $104. FDA/Drug Makers: NNVC P/SGN Receives a $2.25m cash infusion in a debt transaction & stock swap against accts payable. PSTV P/SGN Expects to finalize Phase 2 protocol for DocePLUS in the 1st half of this year. XON P/SGN FDA granted orphan drug status to its treatment option for acute myeloid leukemia. DOW 30: BA P/SGN Said to be considering a $5b capital raise to help cover costs related to the 737 max. MRK P/SGN Signs collaboration and license agreement with Taiho Pharma Co & Astex Pharma. PFE P/SGN Phase III study of the immunotherapy Bavencio in bladder cancer met its primary endpoints Rumors: SPY P/SGN Trump threatens Iraq with sanctions after its parliament demands removal of US troops. XRX .MA Said to have secured $24b in financing for HP acquisition. BA . P/SGN The FAA confirmed they are reviewing a wiring issue on the 737 MAX jetliner. * Market calendar for earnings releases shows no significant earnings releases are being released today or tomorrow.