Reading Tea Leaves on China, Baidu and Burritos

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Sitting here, the following random thoughts are going through my head while I am working on my second cup of tea.

1. I wonder how the Chinese markets open tomorrow after a week off for their National Day celebrations. A lot has happened since their markets have been closed, including the second month in a row of lousy non-farm payrolls data here at home maybe forcing the Fed into a stand-by mode for now. My take is simple enough: If we get a good close in our markets today, Chinese markets should rally hard when they open tonight as they have missed the global markets rally due to their holidays. Simple as that.

2. GoPro (GPRO) was downgraded this morning by Morgan Stanley where the analyst slashed his price target on the shares down to $35 from $62 but retained his Equalweight rating. The analyst cited weak demand for the company's tiny new camera, Hero4 Session In addition, the analyst said that GoPro's editing software was not compelling enough and that many features were also available on iOS and Android. It's worth noting that Morgan Stanley's view on GPRO is one of the most bearish on Wall Street. On the other hand, there continues to be consistent chatter that Alphabet (GOOGL, GOOG) might take a strategic position/investment in the company.

3. There is also a rumor circulating among traders and trading desks that there is strong possibility of Juniper Networks (JNPR) top dogs (management) considering a go-private transaction. With Juniper shares stuck in a range and having done nothing in almost five years, I can't say that it would be a surprise to me.

4. Shares of Baidu (BIDU) also got downgraded this morning by Daiwa Securities to Underperform (sell for you and I) in a typical too-late-the-hero downgrade citing a tough O2O( online-to-offline)  environment ahead. In addition, the Daiwa analyst stated that average Wall Street operating margin expectations of 15% were too high and should be closer to 10%.

5. Monsanto (MON) announced job cuts of about 2,600 and disappointing results as the slump in commodities continues to wreak havoc on its operations. The company said that a restructuring would negatively impact results almost until the end of 2016. (Fed heads must be wondering what happened to their vaunted jobs machine?)

6. Yum! Brands (YUM) reported numbers last night that missed and also lowered its outlook, citing difficult conditions in China as the primary reason. Now if folks in China are not eating Yum!'s fried chicken, beef and bean burritos and pepperoni pizzas is that a sign of a weakening consumer in that country? Inquiring minds want to know?

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