Facebook (FB)

Facebook (FB) – Getting Likes –The social media giant reported lower than expected revenue for the third quarter and warned it was in the early stages of a transformation in its core businesses that will lead to slower growth and higher costs in the short term.  All in all, the results and guidance were well received by investors, with many fearing worse results.  In the pre-market , FB is trading 6% higher near $155 per share.

Coka Cola Co. (KO)

Coka Cola Co. (KO) –Bubbling! –The  Atlanta-based company posted a $1.88 Billion profit for the 3^rd quarter as diet soda and a healthier alternative drinks helped to exceed eps estimates. Shares were indicating a modest jump higher pre-market with a 1.5% lift over the past 12 months. The company has been little phased with the recent market volatility likely due to its defensive nature. Management has re-stated that they have no intentions of entering the cannabis space in the latest fad with many competing beverage producers.  

signals to buy USD against sterling

 RBC's month-end hedging model is sending "strong" signals to buy USD against sterling, the Australian dollar, the Norwegian krone and the Canadian dollar. Among those four currencies, dollar strength is for now only evident against sterling, which hit a 10-week low of 1.2756 against the dollar earlier in the session, according to FactSet. The Australian dollar trades up 0.4% against the U.S. dollar at 0.7086, while the U.S. currency is slightly lower against the Canadian dollar, and flat against the Norwegian krone. Meanwhile, EUR/USD is 0.1% lower at 1.1358, helping the DXY dollar index rise 0.2%.

Facebook (FB)

Earnings season will continue to roll on this week, with FAANG members, Facebook (FB) and Apple (AAPL) reporting.  On Friday, energy giants, Chevron (CVX) and Exxon Mobil (XOM) report before the market open.  The recent market volatility has had an effect on what the market feels the probability that the Fed may “pause” on interest rate hikes.  The chance of a December hike is now 71%, and last Monday markets were implying 80%.

commodities may be willing to pay a premium

"When inventories are low, users of commodities may be willing to pay a premium for owning a spot commodity relative to futures prices in order to avoid facing a 'stock out,'" says Geert Rouwenhorst, who has conducted extensive research on commodity prices. "You can only heat your building with physical heating oil, not futures on heating oil.  So when inventories are low, you are willing to pay a premium to own spot heating oil to avoid the risk of running out. This premium is sometimes called the convenience yield, and can lead to a backwardated futures curve." A front-month roll implies that a fund invests in the nearest maturity futures contract of their respective commodity.  Traders need to know that during the month, the fund will automatically sell out of its current contract and buy into the next nearest maturity the front month  in order to avoid delivery, you need to be aware that this can cause some big problems if not done right.  Many of the most popular commodity ETPs utilize a front month rolling strategy, which can lead to big losses for a position. The products that employ this strategy are known as "first generation" products, as they were the early entrants to the market.

Index (VIX) now firmly creeping above $26.5

The 10 year yield has reversed course to its lowest level in 3 weeks near 3.08% with renewed buying interest garnered in light of the deepening equity route. Gold Futures (/GC) are also showing more signs of life at $1236 after inching back within highs not seen since July thanks to the Volatility Index (VIX) now firmly creeping above $26.5. Oil Futures (/CL) are staging for a 3^rd weekly decline ahead of a routine rig count with crude back below $67 a barrel over concerns of demand waning should the global economic engine begin to slow further.
Economic news becomes ever more vital with the latest reveal of GDP coming in at 3.5% which was above its forecast of 3.3% to bring some much needed relief to overnight lows. Consumer Confidence will also be on display later this morning with a reading near 99 expected. Europe will be looking for any real direction from a speech from President Draghi momentarily as trouble around both Italy and Brexit are putting a severe strain on any possibility of growth in the region. Major indexes in the Eurozone are all showing daily losses in excess of 1% to add to its worst combined month since August of 2015 after rates were left unchanged due to unremitting stagnancy. Asia has fared slightly better overnight with a $30 billion currency swap agreement between China and Japan luring in some buyers with bilateral cooperation. 

Bank of America (BAC),

This week we will see earnings begin to move into full gear with Bank of America (BAC), Goldman Sachs (GS), Johnson & Johnson (JNJ), Netflix (NFLX), and American Express (AXP) all reporting.  This week’s economic calendar will contain important data concerning the housing industry. Housing starts, existing home sales, and building permits will all be released this week.  In addition,  investors will be looking at Wednesday’s FOMC minutes for clues as to the Federal Reserve’s future movement on interest rates.  As of this writing, U.S. crude oil futures (/CL) are 0.7% higher near $72 per barrel and S&P 500 (SPX) futures (/ES) are down slightly near 2765, after recovering from a drop of $20 earlier this morning. 

American Airlines (AAL)

–Hard Landing? – The airliner saw its lowest intra-day levels touched in more than two years yesterday following an update on the chaos caused by Hurricane Florence. Early estimates indicate that approx.. $55 million was lost in potential revenue after 2,100 flights were cancelled around the storm. The industry will be tested again this week with another Hurricane scheduled to make landfall on the Florida panhandle later today. Shares are indicating a flat open at this point after plummeting over 3% in yesterday’s session. 

Constellation Brands (STZ)

Constellation Brands  (STZ) –Buzzed! – The alcoholic beverage conglomerate saw a 10% jump in sales last quarter to capture $1.15 billion of revenue.  Shares are seeing nearly a 5% improvement pre-market after sliding a disappointing 8% YTD from a high of $236.62 reached back in May. The company has recently enjoyed new publicity surrounding an investment in Canopy Growth Company (CGC) as they attempt to break into the cannabis arena for an untapped source for further growth. 

Tesla (TSLA),

Elon Musk reached a settlement  agreement with the SEC that allows him to remain as chief executive of Tesla (TSLA), but requires him to step away from the position of chairman for three years.  This has sent the shares over 14% higher in the pre-market, erasing much of the loses suffered on Friday.  Late last night, the U.S. and Canada reached a deal revising the terms of the North American Free Trade Agreement, just beating out the midnight deadline.   This morning, General Electric (GE) is up over 14% after it named Lawrence Culp as its new CEO and chairman, replacing John Flannery.   As of this writing,  U.S. crude oil futures (/CL) are little changed near $73 per barrel and S&P 500 futures (/ES) are 0.5% higher and trading near 2934.