Bill Gunderson’s Daily Market Observations for Wed. 10/9/19

Wednesday 10/9/19=DJIA +238 NASDAQ +101 U.S. 10yr=1.60%
A Small Deal With China? ROKU Rocks!
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Minnesota Oct. 15, 16, & 17-Bill Gunderson and his team will be at the Radisson Blu-Mall of America. Call (855)611-BEST or visit our website to make an appointment.
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Daily Wrap: The market had a very good day today. Bloomberg (if you can believe anything they say) is reporting that China is ready to make a limited deal with the U.S. This set the market on fire today.
Trading: I did some continued buying of positions that I already own for new clients.
Tweets: I was active on Twitter and StockTwits today. I sent out tweets on NTRA, NAT, TSM, ROKU, LPSN, DXCM, CVNA, CSGP, COUP, COST, BX, and ADP.

The global markets are very cautious right now.

Global markets mixed ahead of U.S.-China trade talks
• Japan -0.61%.
• Hong Kong -0.81%.
• China +0.39%.
• India +1.72%.
• London +0.42%.
• Paris +0.75%.
• Frankfurt +0.84%.

The rhetoric heats up. Freedom of Religion in China? NO!!!!!!!!!!!!!!!!!!!!!! Freedom of Speech? NO!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

China plans visa restrictions on U.S. nationals with 'anti-China' ties - Reuters
• China is planning visa restrictions for U.S. nationals with ties to "anti-China" groups, Reuters reports citing people with knowledge of the matter.
• That would follow the U.S.'s move yesterday to restrict U.S. visas for Chinese officials linked to the repression of Muslim minorities in China.
• The Chinese rules would require the drafting of a visa blacklist made up of U.S. military- and CIA-linked institutions and rights groups and their employees.

We will take it.

Weak PPI reading may support another Fed rate cut
• Weaker-than-expected producer inflation in September -- against a backdrop of slowing economic growth, trade tensions, overseas growth easing -- may lead the Fed to cut rates again later this month.
• Core producer price index, which excludes volatile food, energy, and trade services components, fell 0.3% in September from the previous month, falling short of the 0.2% increase expected and reversing the 0.3% rise in August.
• Core PPI increased 1.7% in the 12 months through September after rising 1.9% in August.
• The 10-year Treasury rises today as stocks fall; yield falls 5 basis points to 1.515%; (TLT +0.7%), (TBT -1.4%).
• The CME FedWatch Tool puts the probability of a 25-bp rate cut at 83.9%, up from 74.8% yesterday and 62.0% a week ago.

U.K. Politics are as bad as ours.

Several U.K. cabinet members poised to resign - The Times
• U.K. Prime Minister Boris Johnson faces a rebellion in his cabinet, as a group of ministers are poised to quit due to concerns that he's leading the country towards a no-deal Brexit, The Times newspaper reports, citing an unnamed cabinet member.
• British Minister for Northern Ireland Julian Smith, Culture Secretary Nicky Morgan, Justice Secretary Robert Buckland, Attorney General Geoffrey Cox, and Health Minister Matt Hancock are on a "resignation watch list," according to the newspaper.
• Ministers at a cabinet meeting raised concerns about the "grave" risk of direct rule returning to Northern Ireland and about Johnson's top adviser, Dominic Cummings.

That was fast!

Saudi Aramco sees full oil production capacity by end of November
• Saudi Arabia will recover its full oil production by the end of November, Saudi Aramco (ARMCO) CEO Amin Nasser said at the Oil & Money Conference in London today.
• Aramco's maximum production capacity is 12M barrels per day, though the kingdom has been pumping significantly less that that under its agreement with OPEC and non-OPEC producers.
• Still, the CEO of the world's largest oil company said he's concerned about the "absence of international resolve" against the perpetrators of the Sept. 14 drone attacks on Aramco facilities that forced the oil producer to shut down half of its production.
• “An absence of international resolve to take concrete action may embolden the attackers and indeed put the world’s energy security at greater risk,” Nasser said.

No power in Northern California today. It is just a matter of time until they start shutting off the water.

PG&E to shut power for 800K customers due to wildfire risk
• PG&E (NYSE:PCG) says it expects to proactively turn off power to nearly 800K customers starting shortly after midnight on Wednesday, as severe winds are expected to hit northern and central California, increasing the risk that its equipment could start fires.
• Outages could last for multiple days and cover parts of 34 of California’s 58 counties, PG&E says.
• While the outages likely will hit hardest in rural areas such as the Sierra Nevada foothills and California's wine country, they could also affect the San Francisco Bay Area, including portions of Oakland, Berkeley and San Jose.
• "It's absolutely unprecedented," says a Sonoma County spokesperson, as officials say they are bracing for nearly half of the area's 500K residents to potentially lose power, darkening large parts of Santa Rosa, Petaluma and other major cities in the area north of San Francisco.
• The state's other large utilities, Southern California Edison (NYSE:EIX) and San Diego Gas & Electric (NYSE:SRE), also have plans in place to shut off electricity elsewhere in the state to reduce wildfire risk.

I have small short position.

GameStop -6% after PlayStation news
• GameStop (NYSE:GME) falls after Sony says the PlayStation 5 will launch during the 2020 holiday season. It's possible some traders were expecting an earlier debut for the next-gen console.
• Shares of GameStop are off 5.65% to trade at their lowest level over the last two weeks.

A monster day for ROKU!

Roku upgraded at Macquarie as user base could triple by 2022
• Roku (NASDAQ:ROKU) +3.6% pre-market after Macquarie upgrades shares to Outperform from Neutral with a $130 price target, raised from $110, saying the stock is set to triple over the next three years.
• "Roku has built a leading position in the U.S., and we believe its devices will find a ready market abroad," as the shift to connected television viewing that is occurring in the U.S. will follow internationally in the coming years, says Macquarie analyst Timothy Nollen.
• Roku can grow its user base by 2x-3x to more than 70M active accounts by 2022 from 31M currently, which are mostly in the U.S., Nollen says, adding that 72M subscribers by 2022 could drive Platform revenue to $2.3B and overall revenue of $2.7B, nearly triple 2019 guidance.
• Roku's average Sell Side Rating is Outperform while its Seeking Alpha Authors Rating is Neutral.

Bill Gunderson

Bill Gunderson

Bill Gunderson is a wealth manager, syndicated financial talk show host, and author of the Best Stocks Now -- one of the top 10 best selling financial aps in the world.

He is a frequent guest on local and national media, including CNBC, Fox Business, Fox News, Bloomberg, Barron's, Forbes, and others.

His wealth management business caters to high net worth individuals clients all over the world. He would be happy to look at your portfolio.

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