Wall Street Lunch: Robinhood Unveils Election Contracts For Traders (undefined:HOOD)

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Robinhood offers contracts paying off for Harris or Trump wins. (0:16) Oil tumbles as Mideast escalation fears ebb. (0:47) McDonald’s brining back Quarter Pounders. (2:55)

This is an abridged transcript of the podcast.

Our top story so far.Robinhood (NASDAQ:HOOD) is rolling out presidential election contracts today to a limited number of customers.

The online broker app is offering contracts on Vice President Kamala Harris and former President Donald Trump for the Nov. 5 election.

Robinhood says customers have to apply and meet certain criteria to be approved for an RHD account, which include being a U.S. citizen and more.

At the beginning of the month, a federal judge ruled in favor of betting marketplace Kalshi over the Commodity Futures Trading Commission, paving the way for U.S. citizens to bet on election outcomes.

In today’s trading, the action is in the oil market, with crude futures (CL1:COM) (CO1:COM) down 6%.

Concerns over supply disruptions eased after Israel’s weekend strike on Iran steered clear of oil and nuclear infrastructure.

Warren Patterson, head of commodities strategy, ING, says: “The more targeted response from Israel leaves the door open for de-escalation, and the price action in oil this morning suggests the market is of the same view.”

“Clearly, if we do see some de-escalation, it would allow fundamentals once again to dictate price direction. And with a surplus market over 2025, this would mean that oil prices are likely to remain under pressure.”

Stocks are moving slightly higher to kick of the week, with the Dow (DJI) doing the best among the major averages. All the S&P sectors are higher with the exception of – surprise, surprise – Energy (XLE), which is off more than 1%.

Among active stocks, Boeing (BA) moved to raise cash as its machinists strike persists with offerings that could total as much as $19 billion.

It launched concurrent separate underwritten public offerings of 90 million shares of common stock with a par value of $5, which could raise nearly $14 billion based on Friday’s close, and $5 billion of depositary shares.

Shares of ON Semiconductor (ON) lost an initial earnings pop and are under pressure after guidance.

The company expects fourth-quarter revenue to be between $1.71 billion and $1.81 billion (midpoint at $1.76 billion), versus the consensus revenue estimate of $1.78 billion. Meanwhile, adjusted earnings per share are anticipated in the range of $0.92 to $1.04 (midpoint at $0.98) compared to the consensus estimate of $1 per share.

And Lightbridge (LTBR) is rallying after touting three technical papers presented at the Top Fuel 2024 Conference in Grenoble, France. It says the papers further validate the enhanced safety and performance of Lightbridge Fuel, particularly its improved performance under extreme conditions.

The company said a study by MIT that simulated the performance of Lightbridge Fuel in NuScale’s (SMR) small modular reactor confirms the fuel operates at significantly lower temperatures compared to traditional fuel, with improved safety margins that can enable power uprate opportunities while maintaining safe operations.

In other news of note, McDonald’s (MCD) is bringing back its Quarter Pounder to all restaurants in the coming weeks after having ruled out the beef patty for the recent outbreak of E. coli that left one person dead and dozens sick.

Following analysis from the Colorado Department of Agriculture and other public health agencies, McDonald’s confirmed that the source of the bacteria was in the slivered onions used solely in the Quarter Pounder and not from any other ingredient. The chain will return the menu offering but without slivered onions on top.

Cesar Pina, McDonald’s chief supply chain officer for North America, said:

“The issue appears to be contained to a particular ingredient and geography, and we remain very confident that any contaminated product related to this outbreak has been removed from our supply chain and is out of all McDonald’s restaurants.”

And in the Wall Street Research Corner, hedge funds have snapped up shares of the biggest of the megacap stocks this month but aren’t as confident as they have been in previous earnings seasons.

Five of the Magnificent 7 stocks report this week: Apple (AAPL), Amazon (AMZN), Alphabet (GOOG), Meta (META), and Microsoft (MSFT).

Tesla (TSLA) already impressed when it released numbers last week, burning shorts to the tune of $3.5B. Nvidia (NVDA) doesn’t report until Nov. 20.

But while hedge funds have been buyers of the group in October, the positioning is much lighter compared to before the first- and second-quarter earnings seasons of 2024.

The group is “net bought in October MTD, driven by short covers and, to a lesser extent long buys,” Goldman Sachs’ FICC and Equities desk wrote.

“From a positioning standpoint, however, the group’s net allocation and long/short ratio are both well below their respective levels going into Q1 and Q2 earnings.”