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Federally Faked Thursday – The Unhappy Median

Look at this chart:

LOOK AT IT!!!!  This is America, damn it!  We peaked out in earnings in 2000 and it's been downhill ever since.  Even worse, this is America AFTER the Federal Reserve spent $4 TRILLION to boost the economy.  This is America AFTER our Government plunged another $6 TRILLION into debt – supposedly to save jobs and support the economy.  

This is a DISASTER!  If this were the chart of a company you owned – you'd be selling.  If there were a board of directors, we'd be looking to make changes, right?  Actually, there is a sort of board of directors and, as is often the case with Corporate Management – they're the only ones making any money!  

Only in Washington DC and Dick Cheney's Wyoming are people in this country still making as much money as they were in the good old days (Clinton years).  The rest of the country is in various states of decline – some of it fairly drastic – and in big states like Ohio, Michigan and Illinois, where people are earning about 20% less now than they did 14 years ago.  

Our standard of living is in decline, especially when you consider that inflation is chewing into those lower wages from the other end as well.  How much more evidence can we possibly need that the Bush Tax cuts were a complete and utter policy failure?  Yet you will hear none of that in the MSM.  What TV station owner or newspaper & magazine publisher is going to tell you that they should be paying 20% more taxes than they are paying now?

There's a reason that, despite the BS Employment Numbers put up by the Administration, that the #1 concern of US voters is JOBS!  People may HAVE jobs (actually 20% of the families in our country have NO ONE employed at the moment) but, clearly, from an economic perspective – the jobs suck!  Even people lucky enough to keep their jobs through the crisis haven't had raises in a decade but, of course, they are too afraid to leave because we all know people who lost their jobs and didn't find another one for a year – who can afford that? 

I do love these polls, it's so interesting to see the difference in what people from each party care about:

Top 13 "Most Important" Problems, by Party Identification, May 2014

6 times more Democrats and Independents care about Education than Republicans.  This is why I use big words when I make fun of the GOP – they don't understand them anyway… wink  Democrats are no longer worried about Health Care – we fixed that.   Republicans are still freaking out about it.  Republicans think Racism is no longer an issue – nor is pollution or the wealth gap, which makes sense – how could anyone who understands the wealth gap be a Republican?

The moral majority is still a big factor in the GOP, with 10 time more Republicans making morals and religion their top issue than the Godless Democrats.  The Deficit is also a huge disparity, with 5 times more Republicans worrying about it than Democrats and the Independents are right between the two on that one.  

The GOP should be concerned with the huge number of Democrats, Republicans AND Independents who are dissatisfied with the current leadership as all 234 of their Representatives are up for re-election (or not) in November.  

Unfortunately for the Democrats, 21 of the 36 Senate seats up for grabs already belong to them and the GOP is projected to even up the Senate if the Dems can't improve their narrative between now and November.  The GOP needs to flip 6 seats to take control – it's going to be a very interesting 6 months ahead!  

It's tricky, as investors, to digest this information.  It's great for our Corporate Masters when wages are depressed and, unlike us, they don't have to live in this declining country.  They certainly don't have to sell here.  The transfer of wealth from the poor and middle class to the top 1% isn't just an American phenomenon – it's Global!  

That means that 1% of this planet's 7Bn people or 70M people, are very, very rich.  And it's not 70M people – it's 70M families so figure about 170M people are able to spend 20-1,000 times more than the median income (see chart in yesterday's post) in their country.  Even in countries where the median income is $5,000 – that still puts them into what would be the top 10% in the US.  

When we were growing up and even when most of us went to college, we didn't consider the GLOBAL MARKET because it was, traditionally, too hard to reach.  That's not true anymore.  I can buy or sell something on Ebay with people in Africa and UPS will get it there in 3 days.  There are virtually no barriers to global trade and the Internet makes it just as cheap to advertise your product in Botswana as it is in Brooklyn.  

So what we are seeing, in terms of rising profits, is the success of Globalization that has been made possible by the Internet (circa 1995ish).  All that BS they used to promise us about changing the World is actually happening – only not quite as quickly as we expected and, unfortunately for US Citizens, Globalization is also globalizing our wages to bring them DOWN to the levels that other countries have suffered with for decades.  

I'm not proposing a "fix" to this problem – the obvious one is to tax excess wealth but the problem with that is, if we do it and Russia doesn't – then our Corporate Citizens and the top 1% will simply move there.  There's no patriotism at work here – they threaten to do it all the time.  If you think things are rough in this country now – think about what would happen if the only people with any money left too!  So we're trapped and the only thing we can really do about it is to be rich – so you too will have the freedom to move to wherever they tax you the least, or where the business climate is best.

There's still a lot of nationalism in people's thinking but it will be gone in another generation or so.  If you had a business in the US and most of your customers were in Florida – you'd consider moving to Florida.  As we continue to globalize, companies will make very different decisions than they have in the past, because it no longer matters where your Corporate Headquarters are.  In fact, the US is actually falling far behind in infrastructure – which is what made us a Global powerhouse in the first place.  

Long-term, I'm still bullish as Corporations will adapt and survive in the changing global landscape but, between now and then, there are likely to be some serious dislocations that are currently being papered over by our Fed and other Central Banksters cranking up the printing presses and handing out Trillions to support the struggling top 0.01% (struggling to wipe you out).  

Take CAT, for example (we're short), their April Global Sales Report shows a 13% decline from last year and this is the 17th consecutive decline posted by the company.  NONETHELESS, the company is still making about $1Bn per quarter – because they laid people off and, more importantly, got FREE MONEY to finance their debt.  Artificially low interest rates are causing artificial corporate profits and, for a company like Caterpillar, with $64Bn in liabilities, shaving a couple of points off their interest rates more than makes up for a little 13% decline in sales. 

Money is so cheap for CAT that they bought back $2Bn of their own stock last year (4%), rather than pay down 3% of their debt.  Having less stock to divide into lower earnings is another trick corporations have been using to "beat" expectations this year.  Again, as a worker for the company or a citizen of the country that is going into debt to finance this fiasco – you might be disgusted but, as a shareholder – THANK YOU UNCLE SAM!   

As I said yesterday – you can't fight the Fed.  As long as they keep printing money and handing it out to their rich friends, this charade can go on and on.  God help us all when the music stops

 


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  1. Oy. EBay flamed by data breach stats, Thailand coup and Ukrain on fire. 

    Mornin Ralph. 


  2. Mornin Sam….. :)


  3. Phil – That Gallup poll is missing something important….

     

    BENGHAZI!!!


  4. Phil, thats one of the reasons I liked Ross Perot when he ran – and the MSM labeled him nuts. In his debate with Al Gore he said if NAFTA became law there would be a giant sucking sound of Americans losing their jobs-gore said it will gain jobs for USA. clinton signed it into law strongarmed by the GOP Congress. A bad deal for the US. Easy to see at the time too. corporate America was all for it of course and most people are stupid. Our high schools back in the 50's and 60's were almost the equivelent as a BS degree today unless you are a specialty like Dr.s, engineers, etc.


  5. Good morning!  

    Bengazi/1020 – That's because, outside of the morons on Fox and the Republican talking heads, no one in America cares enough for it to even register – not even their own constituents.  Too funny actually (if it wasn't so sad and pathetic).  

    Who Needs Big Coastal Cities Like New York Anyway, Says Koch Brothers Climate Shill

    What? Swimming is good for you!

    Ashbrook: So you’re saying move New York, move Miami, move Southern Florida, move Boston?

    Lewis: Yeah. I would say that the built environment, from the studies I’ve seen, most building stock turns over in about 50 years. And so the markets adapt to this sort of phenomenon anyway.

     


  6. Phil / CMG – I'm still short the Jan 2016 280 put but have not been filled the 465/495 BCS for the $16 when we adjusted the trade a few days ago. The ask is now $22 for the spread. Can you suggest another trade to DD on? or should I just bite the bullet on the higher premiums at this point. Thanks for your advice. (Reposted from last night)


  7. scottmi I did get the fill this am on roll to Jun 195s with $.12 credit


  8. These facts just take your breath away. I used to take IBD & when I read the massive profits of the oil company's buried on page 12 I was totally shocked. When I was with a group I asked if ANYONE cares that ONE company made 20 billion in the last quarter on the backs of all those struggling to get by. NO comment. I figured we were doomed then & have felt that way before when GW got elected TWICE making us the laughing stock of the world.


  9. NAFTA AND GLASS STEAGALL BOTH DISASTERS

    GETTING RID UPTICK RULE ANOTHER


  10. I think the average American is still too comfortable and accepting of our current state of affairs to take action. That, of course, plays right into the hands of our owners. The trick for them is to keep turning up the heat gradually so the frogs don't notice it and stay focused on pop culture. 


  11. BBY is today's retail hero.


  12. Interesting note re volatility from the Tastytrade guys this morning:

    ~~SOSNOFF SAYS   Pop quiz time.  In the last 30 days, have the SPX, DJX, NDX or RUT had actual price ranges larger or smaller than implied volatility would suggest?
     
     With vol in the tank, you might think larger.   But using a rough average of the overall vol index for the four indices, and basing the range on the difference from the mean price between the high and low prices since April expiration, the actual vs implied ranges are as follows:
     
     SPX had a 2.9% actual range vs 3.4% implied range
     DJX had a 2.6% actual vs 3.4% implied
     NDX had a 4.4% actual vs 4.6% implied
     RUT had a 6.8% actual vs 5.7% implied
     
     Only RUT, the weakest of the bunch, had a range slightly larger than expected.   And while I would welcome a few downticks now and then, this is the sort of market behavior that reinforces the importance of strategies over direction.  Learn ‘em and love ‘em, and keep your size small. 

     - Guest Contributor Tom Preston


  13. Perot/Jomp – Yep, that guy actually understood economics.  It was choosing Stockdale that killed his campaign, I think people were warming up to him until then.  

    CMG/Pfehl – Whoops, and away they go this morning, which is too bad because I would have told you that, if I'm bullish, I just buy the long call and wait to fill the short call for a good price.  But, NEVER chase a move like that.  How about just be happy with the short puts and only buy the spread defensively if they fail $500 again.  If they never do, then you get the free $10 – not the worst outcome….

    Oil/Pirate – Only $20Bn?  Those were the days..  Things really are out of control – and getting worse.  

    Upticks/Angel – Yeah, I forgot about that one…

    Owners/DrC – Since it's slow, I'll remind people of George Carlin's definitive comments on the subject:


  14. Phil with VIX at under 12 it seems like it is going to pop at some point. What is the best way to play for that possibility? Do the VIX options work like stocks where you would sell puts if you think VIX will rise or are calls a better play here since you can't own VIX shares? I saw it mentioned yesterday, but without indication of how to play it.


  15. 11 days to coin!


  16. Gasoline hit $3.02!  Oil $104.05, gold $1,298, Dollar touched 80.30 but rejected there.  

    XLF back by $22, where we like to cover our spread. 

    BBY/Scott – They made many good moves over the past year, the best being selling store within store space to vendors.  It pays for space, adds staff, reduces the inventory they have to carry on the books – BRILLIANT!  

    Volatility/Scott – If you go from close to close – yes, but intra-day, the swings are crazy!  

    VIX/Craigs – See Scott's note.  They have pushed volatility out of the market.  VIX options aren't really options, there's nothing to own.  It's like betting on the temperature on a certain day.  The way the VIX works is like parimutuel betting at a horse track – the price of any option is simply based on the betting of all the people on each side of it and the odds can change at any given time for no apparent reason.  Still, there's a tiny bit of logic to it so, if the VIX goes up, mostly the calls go up too – but often you'll be disappointed with the reaction.  

    Look at VIX puts, VIX is 12.01 and the July $14 puts are .70, even though they are $2 in the money.  That would be disappointing if you were betting it down, right?  Same thing can happen with the calls but, at the moment, most people are betting long, so the VIX July $18 calls are the same .70 – even though they are $6 out of the money. 

    So, in short – the VIX is just too stupid to bet on.   That being said, I'd play the July $16s at $1.05 and look to be happy with a quick 20% on a pop because it's not too likely the VIX stays at 12 for 10 more days.  


  17. coins/BDC – where do we start? we need a wallet? do we need a different wallet per type of coin? Can you repost the 'primer' you did a while back?


  18. LQMT up on big volume: Apple (AAPL) has renewed its rights to use metal alloys from Liquidmetal Technologies (LQMT) in consumer electronics items, MacRumors reports. The renewal extends the companies' agreement through February 2015. Apple is said to be interested in Liquidmetal's alloys for touch tensors and home buttons


  19. Phil,

    When time permits, please share your thgts on SHLD:

    Specifically what is Fast Eddie up to? How has he managed to get creditors to agree to allow him to sell off the better assets ?  It seems the revenue from asset sales is funding losses from retail operations – a losing proposition which can't go on much longer. How would he, as a stk holder, benefit from Sears going BK?  Can't imagine as clever as Lambert is purported (and demonstrated) to be he would inadvertently destroy his financial stake in SHLD (and reputation) by going down a path which would seem to be leading into a black hole.  

    The lure of the original dream of turning SHLD into another BRK was both plausible and appealing. However, Eddie seems to be on another tack: changing the way a Sears – a demonstrably terrible retailer – does retail (Shop Your Way). They just posted a gtr than expected loss (due to sales incentives to boost rev) and surprisingly SHLD is only down 3% (but day is still young). Tantamount to trying to rejuvenate the market for buggy whips or kicking/feeding the proverbial dead horse.

    Can you see any rationale to what he is doing and any future upside for the stock?

     

    Position – bcs 1/15 and 1/16: 25/40, 30/45 and 45/70 (former +,latter -) and  a bunch of sht puts 35 to 20 strikes (all +).

    As always, thanks for your counsel


  20. Pharm

    PLX

    Protalix announces Australian approval of Elelyso


  21. LQMT/Esco – It's not really news.  AAPL has spent a lot of money on manufacturing facilities for liquid metal, there was no way they weren't going to renew that agreement.  They're filing their own patents on it too.  They won't give up on it unless they decide it's simply not possible/practical to make stuff out of it.  Anyway, it's 0.0001% of their budget.  

    SHLD/'8800 – Well, to some extent, if someone owes you money, you would rather they sell off their assets in a controlled manner than go BK and have a fire sale.  That wouldn't be the case if they were burning cash and keeping them alive was chewing away at the pot but that's not the case with Sears.  They "only" owe about $8Bn and the value of their property, inventory and brands is almost certainly double that yet the company has a $4Bn valuation.  Eddie has to let Sears die in order to kill it – America won't put up with him slitting it's throat and laying off 250,000 workers if they don't feel he fought as hard as he could to keep it.  Also, he is hoping the CRE market cycles back, as most of the value of the company is 2,000 stores around the US.  

    Think about any 5 Sears stores you know and think about where they are located and how long they have been there.   They own those properties or they have very good long-term leases.  They paid off the buildings years ago (and wrote them off) and, even if you think they are only worth an average of $5M each – that's $10Bn.  They just sold Lands End for $2Bn and they still have Kenmore, Craftsman and Die Hard sitting on the shelf along with 10 smaller brands.  

    Look up "Seritage Realty Trust"  - It's a REIT (still owned by SHLD) that Eddie flipped 200 stores into.  It gives you an idea of what they are going to be able to do with the other 1,800 locations, though I'm sure these were all in the top 25% of the properties.  

    WE DELIVER VIRTUALLY EVERY MAJOR MARKET IN THE US.

    SERITAGE Realty Trust, LLC is a nationwide developer of commercial real estate. Our portfolio contains over 200 properties, located in 33 states and totals over 18 Million SF.

    People who don't like SHLD are narrowly focused on them as a retail store.  That's not what they are anymore.  People also don't think in the kind of time-frames Eddie is working with – that's how he wins, by keeping an eye on the much bigger, long-term picture.  

    Don't forget, if you have the old SHLD options, the net strikes are really about $9 lower than reflected by the stock so your $30/45 spread is pretty much in the money with SHLD at $35.  Due to lack of trading, the premiums are insane and they don't make your portfolio look pretty, especially if you sold more premium than you bought (we did) but LE is now $27 and our old options entitle us to 30% of those shares ($8.10 plus $2.36 in cash).  

    SHLD spun off LE in early April and the move down to $32 was the correct adjustment.  THEN, for not very good reasons, the stock jumped 50% and now it's correcting back but $32 is $42 and it's right on track for our targets – you are only suffering from regretting not cashing out by ALWAYS selling into the initial excitement – there's a reason we do that!  

    Now, it's back to the boring old play we thought we'd have.  


  22. ~~mb22

    Hi I would be pleased if you put the donation site of Shadowfax on to our site for a couple of days.

    Like myself did not have a CCard available yesterday and had to go back to find the site. Placing it only once, it might be swept under the carpet very quickly. Thanks


  23. PLX/qc….no love. 


  24. Below is the information for the shadowfax donation site.  I will repost periodically.

    Hello PSW Members –

    This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible.  Feel free to contact me directly at jennifersurovy@yahoo.com with any questions.

    Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, shadowfox. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts.  After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.)  Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.

    http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743


  25. scott - do you have a renewable energy system (e.g., solar panels?)


  26. Phil,

    Thx for the perspective of SHLD being a long term hold (rocking chair long term). Such a demise for Sears could take a very long time – longer than a recovery in the CRE mkt. Sound like we will be rolling the bcs many, many times.

    Thanks


  27. Pharm – check this out!

    Sneaky…. (!!!)


  28. BDC – solar, not on house. don't have optimal exposure at my site and in our latitude, that makes it work or not, imho. Do have panels for maintaining boat batteries, shed lights.. even a portable solar cell phone charger! ;-)


  29. RUT 1116 has been a good RESISTENCE line for the  last week.  Will it hold this morning? 


  30. Donations/Yodi – Good idea, I'll see if Greg can get it on the main page somehow.  

    Thanks again Jen.  

    Little wheee on oil – down to $103.80.  Can't crack that $103.75 line but still making a nice conviction play.  

    RUT/Den – 1,116 is the R2 line today, not too likely to pop.  


  31. In the STP, let's sell 10 of the FAS June $90 calls for $3.10 to cover our spread.


  32. LQMT/AAPL – also rumor that their alloys will be used in highly anticipated (yet still unconfirmed) Apple 3D printers


  33. Gosh, too bad we chickened out of the more aggressive CMG spread.  

    /YM is a short at 16,550, confirmed by /ES below 1,890, /NQ below 3,650 and /TF below 1,115.  At the moment, /ES is the laggard (1,891), so that's the one to short if it crosses.  

    /NKD also a nice short (again) at 14,400 with very tight stops over (14,420).  

    VIX 11.80!  


  34. BDC – errors are killers in patent space.  T'will be interesting to see how this pans out.  My guess, is they lose on the 'prior art'. 


  35. FU TSLA!!!! wtf??


  36. Liquid metal/Cdel – I'm not so sure about that, they can't even figure out how to make the stuff into an IPhone skin – it's a pretty long, hard slog from there to making it available for home printing. 

    US May PMI Manufacturing Flash 56.2 vs 55.9 consensus, 55.4 in Apr.

    • April marks the first gain in existing home sales this year, according to the NAR, with the seasonally-adjusted annualized rate rising 1.3% to 4.65M. On a year-over-year basis existing home sales are down 6.8%, and the group's Lawrence Yun allows that annual home sales in 2014 will be lower than last year.
    • Housing inventory of 2.29M homes gained 16% in April and represents a 5.9 month supply at the current sales pace, up from 5.1 months in March.
    • The median price of $201,700 is up 5.2% Y/Y.
    • First-time buyers represent just 29% of all buyers (the same as a year ago), and all-cash sales made up 32% of all transactions (also flat Y/Y).
    • Regions: Northeast down 6.3% Y/Y to 600K, Midwest down 9.6% to 1.03M, South -3.5% to 1.94M, West -10% to 1.08M
    • Full report
    • ETFs: XHBITBPKB
    • Apr Leading Indicators: Leading Index +0.4% to 101.4 vs. +0.4% expected, +1.0% prior (revised).
    • Coincident Index +0.1% vs. +0.3% prior (revised).
    • Lagging Index +0.2% vs. +0.7% prior (revised).

     

    Apr Chicago Fed National Activity Index: -0.32 vs. +0.34 prior (revised)

     

    May Kansas City Fed Manufacturing Survey+10.0 vs. +7.0 expected; vs. +7.0 in April.

    EIA Natural Gas Inventory: +106 bcf vs. consensus of +103 bcf and +105 bcf last week.  Futures -1.59% to $4.402.

    • Two days after declaring martial law and saying there was no coup, Army Chief Prayuth Chan-Ocha took to national TV to say he's seizing control in order to restore the peace. It's the 12th military takeover since 1932.
    • The move comes after months of street protests and the recent removal of the caretaker government of Yingluck Shinawatra by the Constitutional Court.
    • The SET Index closed higher by 0.15%.
    • Thai funds: THDTTF
    • Previously: Thailand bounces as military says it's not a coup
    • At issue are hundreds of suspect trades by clients of Credit Suisse (CS -0.4%), and Finra is also looking into whether those clients' trading operations – often based overseas – violated U.S. anti-money-laundering rules.
    • Credit Suisse plans to cut times with a number of the firms, say sources, and has given them about two months t find another trading partner.
    • The probe isn't about HFT, but instead focused on firms employing human traders – often in places like China and India, and regulators have been looking into their actions for years over concern about market manipulation or money-laundering.
    • A check of the Canadian banks finds the whole group higher after TD Bank and RBC cruised past earnings estimates.
    • For TD Bank (+2.7% on the session), strong retail results at home and south of the border drove the beat, while RBC (+2.4%) added big gains in wealth management and capital markets to go along with retail action.
    • Next up in Scotiabank (BNS +0.7%) on Tuesday, followed by Bank of Monreal (BMO +1.4%) the following day, and CIBC (CM +1.7%) on Thursday.
    • In response to inquiries from the WSJ, KKR (KKR -2.8%) says it erroneously listed in-house consulting unit KKR Capstone as a subsidiary in its 2011 annual report. Additionally, several KKR-controlled public companies wrongly described Capstone as a KKR "affiliate" in regulatory filings, and statements on investor calls identifying Capstone's lead executive as a KKR partner were "technically incorrect."
    • The admissions raise a ticklish legal issue as KKR is required to share with investors in its largest buyout fund 80% of any "consulting fees" earned by any KKR affiliate. Capstone has earned the bulk of about $170M in consulting fees reported by KKR over the past three years, but the P-E firm says the unit is owned by Capstone management, not KKR. As Capstone isn't an affiliate, according to KKR, it's consulting fees don't have to be shared with investors.
    • This fee-sharing issue is being raised as the SEC ramps up its own probe of fees and disclosures in the P-E industry.
    • Aflac (AFL -0.6%) is targeting $1.673B in dividends and share repurchases this year vs. $1.474B in 2013. Capital returns fell to as low at $403M in 2009 after peaking at $2.075B in 2008. Repatriation from Japan is expected to be ¥127B ($1.25B).
    • Listening in, Sterne Agee says the investor day confirms its positive view on the company and expects profit repatriation to remain high in 2015 and 2016.
    • Webcast and presentation slides
    • The country's largest single-family landlord but vastly slowing its purchases of homes, Blackstone (BX +0.9%) is looking to expand LivCor - a Chicago-based company set up last year consolidating purchases of stakes in 71 apartment properties.
    • The P-E- firm is focusing on suburban areas where there hasn't been as much new apartment construction in recent years, according to Nadeem Meghji, who is overseeing the business. "A lot of what’s getting built is urban mid- and high-rise product,” says Meghji. “There are fewer suburban, garden-style four-story walkups being built in most of our markets because suburban rental rates are not high enough to justify new construction.”
    • “Pent-up demand is going to result in more than 1M households being formed annually the next several years … We should have more demand than total housing supply for the next three years.”
    • The Angola LNG consortium seeks to charter out its entire tanker fleet after a recent pipeline rupture crippled output at the $10B plant last month, Reuters reports.
    • The project partners, led by Chevron, reportedly have approached shipbrokers to charter out all seven LNG carriers dedicated to Angola's liquefaction facility; one of the tankers already has been chartered to a shipper and is due to load a cargo in Nigeria soon.
    • Last month's rupture of a flare line was the latest in a string of production setbacks since the plant started production in June 2013.
    • Other stakeholders in the consortium include Total (TOT), BP and Eni (E).
    • Alcoa (AA +0.5%) CEO Klaus Kleinfeld tells CNBC that the metals industry is experiencing itsbiggest transformation in 125 years, as higher demand for lighter aluminum alloys from the auto and aircraft industries means a shift away from smelting.
    • Alcoa no longer needs to focus on fluctuations in the metals markets as demand for lighter aluminum alloys has gone "mainstream," Kleinfeld says.
    • Kleinfeld says the company could now be profitable "no matter where the metal price is" as a result of its cost-cutting.
    • Boeing (BA +0.9%) shares continue to rise following its investor day, in which CEO Jim McNerney said he wanted the company to become more like Apple, but analysts offer mixed views.
    • Morgan Stanley is "bullish on balance," with more confidence in an uptick in 777 orders, margin beats and continued elevated buybacks if the stock languishes.
    • J.P. Morgan's team finds the lack of details on the 787 frustrating; it sees potential for commercial airplanes margins to continue to surprise to the upside, but most commentary was qualitative so it is difficult to pinpoint the earnings opportunity.
    • Canaccord says BA hedged its recent $25B guidance peak for the 787 deferred balance, but indicated that any change would be the result of non-performance issues; the firm reiterates its Buy rating, as immediate-term demand fundamentals appear strong (Briefing.com).
    • McDonald's (MCD) annual meeting is in full swing outside of Chicago.
    • Outside over 100 protesters have been arrested, but inside the building the tone from execs is cool confidence.
    • The company acknowledges some weakness in sales growth, but points to building momentum in the current quarter.
    • Management is defiant that the restaurant chain has made significant moves to improve the healthiness of its menu. Yogurt in Happy Meals is the latest example.
    • A question from a shareholder on the potential of a stock split is brushed aside as a plan that doesn't add value.
    • On menu innovation, CEO Donald Thompson says a "couple of things" are coming down the pipe.
    • According to Florida-based Novus Medical Detox, today's marijuana is much more potent than the varieties available a generation ago. This poses significant health risks to consumers as the wave of legalization gains momentum.
    • In a study by the University of Mississippi Potency Monitoring Project, the level of weed's main psychoactive ingredient, THC, has increased from 3.4% in 1993 to ~9% in 2008. In sinsemilla (the flowering tops of unfertilized female plants) THC levels have jumped from 5.8% to 13.4%. The lab has identified THC concentrations as high as 37% in certain pot strains.
    • The controversy surrounding the legalization of marijuana will no doubt intensify as the health risks of consuming ever-higher levels of THC in cannabis become more widely known.
    • Related tickers: (AFAI) (MDBX) (MJMD) (VAPR) (MJNA) (PLPL) (RFMK) (SKTO) (VMGI) (VAPE) (LATF) (HPNN) (NTRR)
    • A slip in retail sales in Canada was led by a surprising drop in demand for shoes.
    • Data from Statistics Canada showed sales at shoe stores fell 5.3% M/M and 6.0% Y/Y during March to mark the biggest drop in any retail subcategory.
    • Related stocks: CROXDECKWWWSHOOSKXSCHLBWSFLNKE.
    • Full report (.pdf)
    • Executives at Johnson & Johnson's (JNJ -0.6%) $28.5B Medical Devices and Diagnostics segment meet with institutional investors today discuss the business and outline their plans to drive global growth.
    • Key points include: ~$1.8B in R&D investments last year; a pipeline of more than 30 major product filings by the end of 2016; $6B in device sales; acquisition of Spectrum Vision enables the delivery of more than 85% of Acuvue contact lenses the same day or next day across all time zones in Russia; China operations grew 18% last year to $1.4B.
    • Webcast info
    • A rumor Bill Ackman will announce a short position in the company has Apollo Education (APOL) quickly off 6.5% in late-morning action.
    • Dropping alongside Apollo Education Group on rumor of an Ackman short: ITT Education (ESI -24.1%), Strayer (STRA -4.2%), DeVry (DV -2.1%), Career Education (CECO -2.1%), Grand Canyon (LOPE -2.6%), American Public (APEI -2.8%), Education Management (EDMC -2.4%), Bridgepoint Education (BPI -2.4%), Lincoln Education (LINC -1.4%).
    • 3D Systems (DDD +6.1%) and Stratasys (SSYS +5.1%), both hit hard by the March-May momentum stock rout, are posting big gains on a day the Nasdaq is only up 0.5%. Beaten-down ExOne (XONE +6.8%) and Voxeljet (VJET +3.1%) are also rallying.
    • Stratasys could be benefiting from a BB&T note praising MakerBot's potential. Last month,UBS cited MakerBot's strong position in the consumer/enthusiast 3D printer segment as a reason for being positive on Stratasys.
    • Voxeljet closed yesterday near its 52-week low of $12.85. Likewise, ExOne wasn't too far removed from its 52-week low of $24.34. Shares had been trading close to the low since ExOne posted a Q1 miss last week.
    • After pricing its 7.2M-share IPO at $13 (the low end of a $13-$15 range), SunEdison Semi (SEMI) opened at $15 and is currently at $14.66, up 12.8%.
    • The chip wafer manufacturer has a valuation of $592M, or a modest 0.6x 2013 sales. The low multiple is a by-product of the company's ongoing top-line struggles – sales fell 11% Y/Y in Q1 to $206.1M.
    • SunEdison (SUNE +3%), which is spinning off the business, stands to have a 58.4% post-IPO stake; investors are breathing a sigh of relief over the debut. Leading customer Samsung, which is buying shares through a private placement, will have a 23.7% stake.
    • ProspectusIPO previewanalysis
    • An early analysis from SearchEngine Journal on the impact of Google's Panda 4.0 search algorithm update (just went live) suggests RetailMeNot's (SALE -8.1%) traffic has fallen by ~1/3. Other major sites/platforms such as eBay, Ask.com, and Yellowpages.com are also hard-hit.
    • With RetailMeNot's online coupon/promo code platform and its merchant partners depending heavily on Google traffic, investors are responding harshly.
    • Jefferies is quick to defend the company: The firm argues search algorithm changes "[happen] all the time," and expects RetailMeNot "will be fine" after it readjusts its SEO practices.
    • JD.com (JD) opened at $21.75 and is currently at $22.18, up 16.7% from an elevated $19 IPO price.
    • China's #2 e-commerce firm is currently worth $30.4B, or 2.65x 2013 sales. The debut could bode well for bigger rival Alibaba (ABABA), expected to get a $150B+ (if not $200B+) post-IPO valuation. CNBC recently reported Alibaba might go public in early August.
    • More on JD.com
    • ProspectusIPO analysis
    • As part of a broader coverage launch for U.S. carriers, Bernstein has started Windstream (WIN +2.8%) with an Outperform and $11 PT. Verizon is the only other name given a bullish rating.
    • Windstream is once more close to its 52-week high of $9.57. Shares initially sold off earlier this month following the telco's Q1 numbers, but quickly recovered their losses. The dividend yield is at 10.7%.

  37. Hi Phil.  Some help please:  Holding AA Jan16 7/10 BCS, bought at -2.47.  Sold the 11 calls at the time , since rolled on your advice to the June 12 calls at 1.23.   Previously, you said that "when the time comes, if AA is over $12, sell the 2016 puts too."  Time has come…what do I do now?


  38. ATOS….that's manipulation!

    ICPT…gonna fall hard on these documents.  They were hiding data (already knew some of it). Someone has to care first.


  39. cdel liquid metal and 3 d printing.

    That is the worst of rumors. 3D printing is an offshoot of selective laser melting. It is done by melting metal into unique no resonant structures, 3D melts plastic, and some idiot put the 2 together. The technologies are completely different, liquid metal doesn't need to be melted. I know about 0 liquid metal facts but do know how the other 2 work. 


  40. Pharm, could you please explain the significance of those ICPT docs.  When were they released?   As you know, ICPT has fallen hard, although having a significant recovery today.


  41. Phil, was at CZR Las Vegas this week, the place was a madhouse.  Could you please repeat your latest position recommendation.  I've been meaning to put on a position (still short  Jan16 7.50 puts from way back) but traveling has gotten in the way.  Trying to clean up some positions and re-boot this weekend.  Thanks.


  42. bio/solarcoin – Thanks for the coins yesterday.


  43. ICPT/tai – I don't know when they were released, and some of the lipid issues were known from their drug.  The question is…. was the trial stopped because of the efficacy or the lipids, and why was the lipid portion not in the press release?  Talk about shady!


  44. Hi Phil – You asked yesterday for a reminder to look at TSO as a short.

    I was also wondering if you have any thoughts on an XRT position?  I know we usually look to go short at 87~88, but for many companies, it didn't sound like sales were great, and on a 6-month chart, it looks like we're approaching the tip of a "triangle squeezy thingy".


  45. Thanks Pharm.


  46. Well 1895 and my account is again at highs for the year.  Time to take some off the table and wait to reload around 1850ish.  Seems to be the easy trade of the year!


  47. NFLX – amazing. unbelievable. but is it unsustainable?


  48. AA/Taihu – I'm still confused at how you ended up paying $2.47 for a $3 spread – that's a terrible entry.  Anyway, so now AA is $13.24 and the June $12s are $1.30 and you can sell the 2016 $12 puts for $1.35 and use that to roll the 2016 $10 calls ($3.90) to the $15s ($1.25) for net -$1.30 and you can roll the $7 calls ($6.35) to the $10 calls ($3.90) for net +$1.15 in your pocket and then you are in the 2016 $10/15 bull call spread with the short $12 puts and the short June $12 calls for net $1.32 and lots of time to roll the short calls along.  

    CZR/Taihu – I love that place.  We're currently playing them in the Butterfly Portfolio but, if you just want to go long on them, $18.27 is a good entry and you can sell the 2016 $15 puts for $4.20 and use that to buy the $15/22.50 bull call spread for $3.20 and that's a $1 credit on the $5 spread that's $3.27 in the money to start.  If they test $20 and fail, you can then sell 1/2x the $20 calls and pick up some cash along the way.  

    TSO/Jersey – Thanks, I'll get back to that next.  

    NFLX/Scott- I hope not!  

    Good move Burr. 


  49. scott, I'm working on the web part of it now but it is not ready…. send me a good email and I'll keep you on the short list


  50. daveo – share some around! The coin thing is fun.


  51. /forgot to mention:

    my email is biodieselchris at gmail

    I'm angel rounding this right now so anyone can email me if interested too 


  52. AAPL just took off….


  53. Apologies Phil…paid $1.16 for that AA spread, looking at the wrong numbers….


  54. this tightly controlled, slow moving uptrend has it feeling like a friday afternoon..

    what is friday afternoon going to feel like?


  55. Phil/NFLX,

    Jan 15 NFLX 450P @ 30!!. What is wrong in selling one? it also has a delta of around 0.4. so fall down condsiderably with a down movement in NFLX. I understand though the margin requirements and selling puts would be better but want to understand.

    Thanks


  56. sorry I meant the Jan15 450 Calls


  57. Phil / CZR.  It's a .75 credit (now) on a 7.50 spread.

    I also like the Jan16 -12P +15/20 bull call for credit of .75


  58. Phil/NFLX

    forget it…I was able to hit on my head myself (saving your effort) to have looked at the wrong direction. The trade idea from yodi is more stable and effective.

    Thanks


  59. GILD Jan16 -65P +65/80 bull call up 1,100%  :)

    adding here.


  60. DXD/phil – so now that Yellen & Co have had their say and didn't pull the rug out.. take off some insurance?


  61. burr, what positions are you adding to the GILD trade?


  62. Phil must have tweeted his theory on SHLD.


  63. scottmi – Yeah, those DXDs are looking cold. But Friday, I dunno……


  64. Phil / NFLX
    With you on the NFLX puts – saw the news.
    +20 June $305 puts ($2.06)

    Wait the weekend and see what sticks ?


  65. scott zero

    FWIW I see a building of sell the holiday. IMHO a wait till tomorrow may be worthwhile.


  66. Same one that I posted.  It's a 15pt spread.  So while it's up huge from my credit entering it initially, that's fine.  It's now mid $3.03, so risk 3 to make 15.  Or take assignment at 68 (65+3debit).  


  67. SPY 192 Cs from yesterday at 8c….well, sell them, no?


  68. I've been adjusting all my spreads to be very close to net 0.00.  Therefore I'm fine with taking assignment at the put strike, but I hate paying a debit to enter, unless the bull call is 20pt wide.


  69. Wombat do you really expect NFLX to drop 95$ in 30 days?


  70. Yodi
    No I don't , and I didn't. I was following Phils short when it was down at $340. We DD halfway up. My rolling shoes are on, but I think I read that Phil wanted to see the dust settle after the expansion.
    I don' think it's a matter of IF we roll, but what we roll to.


  71. TSO – To short them our premise is that there will be a miss this Q as the crack spread narrows.  Earnings are late July so how about the Aug $55/50 bear put spread at $1.10 and you can leave it at that as it's a great $3.90 gain if we get it right (345%) but you can also buy 5 of them ($550) and sell 2 June $55 puts ($1.97) for $394 and then you are into the spread for net $156 with plenty of time to roll the short puts if they dip sooner than we think.  

    XRT/Jersey – XRT is not a pure retail play.  It has a lot of auto parts and medical supplies and pharmacies, etc that don't give it a great read.  That's why you can't really compromise on the entry position – it's not worth chasing.  

    AAPL $609!  

    AA/Taihu – Ah, that's much better.  

    Friday/Toe – There's no volume at all – they can do whatever they want but people would be nuts not to take some off the table into the weekend tomorrow.  

    NFLX/Pat – The reason not to sell calls is because they just went up $30 in 3 days and you'd be giving them 200 days to go up $60 more.  What you can do with NFLX is buy the Jan $450 puts for $85 and sell the $375 puts for $41 and that's net $44 on the $75 spread and you can buy 5 of those for $22,000 and sell 2 of the July $350 puts for $8.70 ($1,740) for net $20,260 and you can put a stop on one of the puts at $12 and then roll the other to 2x something lower by which time your longs would be $37,500 in the money.

    CZR/Burr – Yeah, I think over $20 is very likely.  

    DXD/Scott – No, this is the same thing that happened after the meeting – the initial reaction was up and then down we went.  Here's how we looked at the close on 4/30 – the day of the Fed statement:

     That Thursday (5/1), I wrote "Dow Hits Record Highs on Lower Earnings!" and we were plowing higher that morning too:  

    Why should we worry?

    The Dow is at 16,580 so all must be well, right?  The fact that we're up here on low volume and even lower earnings is just one of those nit-picky things that won't matter a year from now, when TA people use the movement to draw new, bullish trend lines.

    That's what the Fed is controlling, they are painting charts in broad strokes to keep things moving along – even when they aren't.  

    Sure the US economy is only growing at a 0.1% annual pace and sure that's down shockingly from 2.6% last quarter but, hey, we EXPECTED to only grow at 1% – so it's ONLY a 90% miss – what, us worry?

    The Fed says it's just bad weather slowing us down and, whether or not you believe that, they also promise to continue to stimulate the economy long after it is necessary.  The Fed is like Santa Claus, only they don't have to put in any effort to make their toys, so Christmas comes 365 days a year for the top 0.01%.  For the bottom 99.99% – well, it's 0.1% growth on the "trickle down" effect.  

    One week later, we were falling back to the 50 dmas:

    The DXDs in the STP are INSURANCE to protect the LTP, which is up 11.5% with 5x more money in it than the STP, which is flat for the year.  I certainly wouldn't take off the insurance and leave the positions!  

    SHLD/RJ – I did not but the timing is suspicious.  

    NFLX/Wombat – Yes, I'd wait.  I still think they are trying to blow out the shorts (and doing a good job!).  

    WOW!  SPY volume just 47M with 45 mins left.  Could make a new low for the year.  

    NFLX/Yodi – It doesn't have to drop $95, it just has to trend like it is for a couple of days.  

    And what Wombat said!  


  72. SQQQ/PHIL  Posted to wrong day so let me post it again.

    How likely is it that SQQQ will close above 85 by year end. I hold 50 Jan 15, 85 short calls which are in the money. Hold or cash in?

    Thanks,


  73. LQMT
    Nasty bounce right through the 200SMA  ( 3MD )


  74. CMG $523 – wow!  Funny thing about fundamentals – you have to learn to wait until other people see what you saw…

    Gasoline $3.01and that seems like where they're settling.  Oil $103.82 after testing $103.60 and I still like it short, of course.  Nat gas dove to $4.35 from $4.50, now $4.366.  Silver dove from $19.82 to $19.48 – insane moves for something that pays $50 per penny!  

    Indexes still almost exactly where they were when I called the tip earlier.  Nas over at 3,650 thanks to GOOG and MoMos, but others still about the same.  

    SQQQ/IHS – Well, it's an ultra so there's a decay factor the longer you hold it, that's a handicap.  Of course, for SQQQ to go to $85 from about $50, that's 70% on a 3x ultra so Nas would have to pop 22% in 8 months, which is about last year's performance.  The Jan $85 calls are a ridiculous $2.40 so I can see why you don't want to spend $12,000 to close them but that's not really the point.  The thing is they are taking $26,000 in net margin now (non-pm) and, IF the Nas does jump up say 10% your margin requirement will double (at least) and the cost will double to $24,000 and THEN you have to decide if you are willing to wait out a possible margin requirement (if it goes another 10%) of $100K and looking at $50,000 to buy them back.  

    IF you can deal with that without losing sleep, THEN it's OK to leave them open.  And, don't forget – when in doubt, sell (or, in this case – buy back) half!  

    LQMT/Wombat – Great, so it's a buy again!  


  75. IMGN – July $10 P.  STO 5 of them.  50c.


  76. wombat LQMT

    Musk could fix that in a NY minute!


  77. Musk/Shadow – Hey, we should start a rumor that the new Teslas will be made out of liquid metal!  


  78. VRTX – July 75/80 BCS for 2.20.  Data due out b'f that on CF results.  Just a few.


  79. Phil

    Is this correct ?

    TSO

     

    Aug $55/50 bear put spread at $1.10 

     


  80. The problem with liquid metal is it isn't solid, seems changing to solid is the problem. BFD when I was in High school we played with mercury in chemistry class, so what is so new about liquid metal?


  81. LQMT – Classic case of sell the news.


  82. Actually, looking at SQQQ, I'm liking the July $48/54 bull call spread at $2.30, you can buy 10 of those ($2,300) and sell 1 ISRG 2016 $270 put for $18 ($1,800) and that's net $500 for $6,000 worth of protection.  

    HPQ down – seem to have released early.  Down to $32, which is perfect for our earnings play from yesterday:

    HPQ/QC – I love them long-term but they are not cheap, up about 15% since last earnings, which was only a slight (7%) beat.  I suppose I'd play them bearish and sell 7 June $32 calls for $1.36 and buy 5 2016 $30/35 bull call spreads for $2.20 for net 0.84 and, if HPQ misses, then you can sell puts into the drop and lower the $30s (now $5.50) to the $25s (now $8.60) for $2.50 or less or, if they beat, then you can sell $25 puts (now $1.80) and widen the spread anyway and roll the short calls.  Hard to lose as long as you REALLY want to own HPQ long-term. 

     TSO/QC – Well, it's not correct now.  Now it's about $2.10, maybe I did the math wrong but I do remember looking twice because it seemed too cheap.  Maybe it just hadn't been transacted in a while.  That can be fixed by selling 3 short puts instead of 2.  

    Liquid Metal/Shadow – This liquid metal is a new compound made of copper, titanium, aluminum and nickel – it's kind of a polymer but has glass-like properties, though very tough.  When they mix it to a liquid, they get an amorphous alloy with "springy" properties and that's why they call it liquid metal – it's not literally liquid.  The main function of it is it's very bouncy and that makes it great for phone casings – or golf clubs – except the clubs LQMT made tended to shatter once in a while and there was $1,000 down the tubes!  It's also good for joint replacements or armor-piercing bullets or knives (scalpels).   Currently, the problem is in the manufacturing process – that's what AAPL is working on.  If they solve that, they will be able to make things out of liquid metal as easily as plastic.  



  83. shadowfax – Liquidmetal® Technologies … Try this link: http://liquidmetal.com


  84. Selling off into the close but nothing drastic.  


  85. Phil

     

    Thanks on HPQ, and TSO


  86. Thanks Diamond

    Shouldn't make funnies about technologies even if I think this one is not worth much. I also think 3D printing is another to expensive way to do something, although making artificial parts for humans is a good one. This process is just too expensive and I am sure a few specialty parts will come from it. And just to clear all up I thought selective laser melting was going further than it has because it can do things that can't be molded or machined. Our military was very interested and if the GOP takes all 3 branches will build the first trillion dollar jet fighter that way with a structure impervious to fatigue. Still can be crashed and destroyed.


  87. XRT/Phil – Excellent point, thank you!


  88. Hum…….interesting.


  89. The margin debt vs. bubble graph seems to me a bit irrelevant, because it is logical that margin debt would closely mimic the overall performance of the stock market. The first bubbles pictures preceded big drops in market value, which brought down the bubbles as well. Margin debt would also reduce if the entire market goes down, so if biotechs stabilize and the market doesn't go down, I would think margin debt would also stabilize. Now, this being said, I agree with the popular wisdom that a big correction is coming, so I expect both lines to drop in tandem, just not sure it says anything predictive. 


  90. Apparently I was not deemed dangerous enough and my Google access rights have been restored!

    Nasdaq through it's 50 DAM but Russell having trouble around its 200 DMA.


  91. Pharm

    ICPT- I believe the lipid issues were released about the same time

    i don't have concrete proof but I heard about the lipids around the same time.

    not true?

    dies it matter for the company at this point?


  92. From Bloomberg, May 23, 2014, 3:40:18 AM

    European stocks declined, paring a
    weekly gain for the benchmark Stoxx Europe 600 Index, as
    investors awaited data that may show a rebound in U.S. housing
    activity and a drop in German business confidence. U.S. index
    futures were little changed, while Asian shares rose.

    To read the entire article, go to http://bloom.bg/1jJeNez
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  93. From Bloomberg, May 23, 2014, 3:41:34 AM

    The outlook for Spain is stable, S&P said in a statement today, after increasing the score for the first time since stripping the nation of its AAA grade in 2009. Photographer: Antonio Heredia/Bloomberg

    Spain’s credit rank was raised by
    Standard & Poor’s, while Fitch Ratings increased Greece’s grade,
    as the economic outlooks improve for countries that were at the
    heart of Europe’s sovereign debt crisis.

    To read the entire article, go to http://bloom.bg/1jJeD6Z
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  94. From Bloomberg, May 22, 2014, 12:40:34 PM

    Investors who have ignored international sanctions against Russia are being rewarded.

    To read the entire article, go to http://bloom.bg/1oWTF6m
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  95. From Bloomberg, May 23, 2014, 2:00:00 AM


    Shoppers carry branded shopping bags in Dusseldorf, Germany. Household spending in Germany increased 0.7 percent in the first quarter, and public spending rose 0.4 percent, today’s report showed. Photographer: Krisztian Bocsi/Bloomberg

    Germany’s economic growth in the
    first quarter was driven exclusively by internal demand,
    highlighting the uneven nature of the euro area’s recovery.

    To read the entire article, go to http://bloom.bg/1jJbOTa
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  96. From Bloomberg, May 22, 2014, 3:11:52 PM

    Italy will include prostitution and illegal drug sales in the gross domestic product calculation this year, a boost for its chronically stagnant economy and Prime Minister Matteo Renzi’s effort to meet deficit targets.

    To read the entire article, go to http://bloom.bg/1oWZPU8
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  97. From Bloomberg, May 22, 2014, 6:00:01 PM

    Denmark is about to get a new Bitcoin
    exchange, promising future clients a crime-free platform on
    which to trade the virtual currency.

    To read the entire article, go to http://bloom.bg/1jaqa9o
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  98. From Bloomberg, May 22, 2014, 7:00:01 PM


    May 21 (Bloomberg) — Bloomberg Television’s David Tweed reports from Berlin on French bank BNP Paribas SA amid concern U.S. authorities may seek more than $5 billion from the lender to settle a probe into alleged violations of U.S. sanctions.
    Mark Barton also speaks on Bloomberg Television’s “The Pulse.” (Source: Bloomberg)

    Options traders see $5 billion of fines as little more than a bump in the road for shares of Paris-based BNP Paribas SA. (BNP)

    To read the entire article, go to http://bloom.bg/1kuk34z
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  99. From Bloomberg, May 23, 2014, 3:15:47 AM

    Royal Thai Army soldiers rest in the back of a military vehicle stationed outside luxury hotels on Ratchadamri Road in central Bangkok, on Tuesday, May 20, 2014. Thailand’s army staged its 12th coup since 1932 amid a political vacuum in the Southeast Asian country. Templeton Emerging Markets Group said the move creates stability, while S&P and Fitch Ratings said damage to the economy could be limited if violence is avoided. Photographer: Dario Pignatelli/Bloomberg

    European stocks were little changed
    near a six-year high before data on German business confidence,
    and Asian shares climbed to the highest level in more than four
    months. Platinum fell from an eight-month high while Thailand’s
    baht rose toward its level prior to yesterday’s military coup.

    To read the entire article, go to http://bloom.bg/1k9d8hs
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  100. From Bloomberg, May 22, 2014, 10:42:25 PM


    April 18 (Bloomberg) — Michael Klibaner, regional head of research at real estate firm Jones Lang LaSalle Inc. in Hong Kong, talks about China’s housing market.
    China’s new-home price increases slowed across the country last month amid tighter credit that prompted developers to give discounts. Klibaner speaks with Rishaad Salamat on Bloomberg Television’s “On the Move.” (Source: Bloomberg)

    China’s biggest homebuilding slump in
    at least four years isn’t enough to dissuade a majority of
    economists from predicting real estate will still contribute to
    2014 growth. Property controls will be eased, they said in a
    Bloomberg News survey.

    To read the entire article, go to http://bloom.bg/1kufNC1
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  101. From Bloomberg, May 23, 2014, 1:21:08 AM

    Nissan Motor Co. (7201)’s luxury Infiniti
    brand forecast record sales this fiscal year, driven by Chinese
    demand for models including the Q50 sedan.

    To read the entire article, go to http://bloom.bg/1goweAf
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  102. From Bloomberg, May 22, 2014, 11:03:36 PM


    Ukrainian soldiers guard a checkpoint which was attacked earlier in the day by unknown forces in Volnovakha, Ukraine. Photographer: Brendan Hoffman/Getty Images

    Violence in eastern Ukraine cast a
    shadow on this weekend’s presidential election, as government
    forces suffered their worst losses in battles with pro-Russian
    separatists since the secession campaign began in March.

    To read the entire article, go to http://bloom.bg/1kuNEuC
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  103. From Bloomberg, May 22, 2014, 4:00:20 PM

    Yalta, a resort city where Leo Tolstoy and Anton Chekhov did some of their writing and czars Alexander III and Nicholas II built palaces, became the main holiday destination for Soviet workers under communism. Now the real estate along Yalta’s picturesque embankment is the most expensive in Crimea. Photographer: Victor Boyko/Getty Images

    President Vladimir Putin is trying to transform Crimea into the Singapore of the Black Sea. That effort so far has cost Russia’s newest republic its entire banking system and all three of its McDonald’s.

    To read the entire article, go to http://bloom.bg/1oXa7nd
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  104. From Bloomberg, Apr 24, 2014, 5:20:19 PM

    San Juan, Puerto Rico. Photographer: Richard Cummins/Robert Harding World Imagery/Corbis

    Billionaire hedge-fund managerJohn Paulson said today that Puerto Rico’s economy is at the beginning of a turnaround and predicted the island will become the Singapore of the Caribbean.

    To read the entire article, go to http://bloom.bg/QCeo1c
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  105. From Bloomberg, May 23, 2014, 2:08:39 AM


    May 23 (Bloomberg) — Jose Camacho, Asia vice chairman at Credit Suisse Group AG and a former Philippines’ finance secretary, talks about the military coup in Thailand, the outlook for Southeast Asia’s economies and investment opportunities in the region.
    He speaks from the sidelines of the World Economic Forum on East Asia in Manila with Haslinda Amin on Bloomberg Television’s “On the Move.” (Source: Bloomberg)

    Schools were shut and international television channels were off air as stations broadcast military logos and periodic army statements, a day after Thailand’s military seized control following a six-month political stalemate that has sapped economic growth.

    To read the entire article, go to http://bloom.bg/1m8oqlI
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  106. From Bloomberg, May 23, 2014, 12:01:00 AM

    Hewlett-Packard is headed for a third straight annual sales decline amid lackluster demand for its PCs, printers and servers. Photographer: Vivek Prakash/Bloomberg

    Chief Executive Officer Meg Whitman is still struggling to turn around Hewlett-Packard Co. (HPQ), spurring more job cuts after 11 straight quarters of declining sales.

    To read the entire article, go to http://bloom.bg/1jb0F81
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  107. Sent from Bloomberg for iPad

    Watch this video at http://bloom.bg/1kGt9Lj

    China Mortgage Availability Constrained: Klibaner
    April 18 (Bloomberg) — Michael Klibaner, regional head of research at real estate firm Jones Lang LaSalle Inc. in Hong Kong, talks about China’s housing market.
    China’s new-home price increases slowed across the country last month amid tighter credit that prompted developers to give discounts. Klibaner speaks with Rishaad Salamat on Bloomberg Television’s “On the Move.” (Source: Bloomberg)

    Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  108. From Bloomberg, May 23, 2014, 3:48:22 AM

    Morning mist surrounds GDF Suez Australian Energy’s Hazelwood coal-fired power station in Morwell, Australia. The Australian government wants to do away with world’s highest priced carbon permits, which allow companies to emit more greenhouse gases. Photographer: Carla Gottgens/Bloomberg

    Australia’s program to rein in
    pollution is losing momentum, the latest in a series of setbacks
    for the international effort to tackle global warming.

    To read the entire article, go to http://bloom.bg/1oXh6g6
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  109. Sent from Bloomberg for iPad

    Watch this video at http://bloom.bg/1i9b98l

    Marc Faber Sees `Gigantic’ Credit Bubble in China
    May 22 (Bloomberg) — Marc Faber, publisher of the Gloom, Boom & Doom report, and Ian Bremmer, president of Eurasia Group, talk about U.S. initial public offerings by Chinese companies, the economy of China, the outlook for U.S. stocks and bonds, and investment strategy.
    They speak with Trish Regan on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

    Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  110. From Bloomberg, May 23, 2014, 3:11:34 AM

    A catch bin receives freshly harvested Cabernet Sauvignon grapes as it moves alongside a harvester machine at Treasury Wine Estates Ltd.’s Wolf Blass vineyards in the Barossa Valley, Australia. Fine wine sales in the U.S., Treasury’s biggest market, are poised to rise for the first time in four years. Photographer: Carla Gottgens/Bloomberg

    KKR & Co. (KKR)’s offer to buy Treasury
    Wine Estates Ltd. (TWE)
    for less than the maker of Penfolds shiraz
    could fetch in a firesale leaves the door open for a higher bid.

    To read the entire article, go to http://bloom.bg/1n6SVtb
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  111. From Bloomberg, May 23, 2014, 1:50:36 AM


    A Great Wall Motors car dealership stands in Brighton, a suburb of Melbourne. The discount on Great Wall Motor Co.’s Hong Kong stock has doubled, data compile by Bloomberg show. Photographer: Carla Gottgens/Bloomberg

    Chinese stock arbitragers are backing
    away from the Hong Kong-to-Shanghai price convergence trade.

    To read the entire article, go to http://bloom.bg/1n7865E
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  112. From Bloomberg, May 22, 2014, 7:30:23 PM

    As Japanese stocks slump, investors have one small comfort: hump day.

    To read the entire article, go to http://bloom.bg/1n6Y6t8
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  113. From Bloomberg, May 23, 2014, 2:03:56 AM

    Narendra Modi, India’s designate prime minister addresses the media after his meeting with Pranab Mukherjee, prsident of India, at the Presidential Palace in New Delhi on May 20, 2014. Modi will need to balance his call for stronger borders with nuclear-armed neighbors Pakistan and China against a need to boost gross domestic product in Asia’s third-biggest economy from near a decade low. Photographer: Prakash Singh/AFP/Getty Images

    Narendra Modi, who until recently was
    treated as a pariah by the U.S. and U.K., suddenly finds himself
    the object of affection of world leaders embroiled in disputes
    from Ukraine to the South China Sea.

    To read the entire article, go to http://bloom.bg/1jyPdaR
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  114. From Bloomberg, May 22, 2014, 8:43:37 PM


    A man admires imported automobiles from the U.S. at a car show in Beijing. The U.S. in July 2012 filed a WTO complaint seeking to offset Chinese duties on more than $3 billion worth of auto imports from the U.S. Photographer: Liu Jin/AFP/Getty Images

    The World Trade Organization has
    ruled in favor of the U.S. in a dispute with China involving
    automobiles, two years after filing complaints against the Asian
    nation, according to a person familiar with the matter.

    To read the entire article, go to http://bloom.bg/RYaT5i
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  115. From Bloomberg, May 22, 2014, 1:25:12 PM


    And why would they, really? Photographer: Daniel Acker/Bloomberg

    A couple of weeks ago, Andrew Bowden of the Securities and Exchange Commission gave a speech about private equity fees. It was pretty punchy, for an SEC speech. Especially punchy were the bits about “operating partners,” which the SEC views as a way for private equity firms to get paid fees without sharing them with their limited partners.1

    To read the entire article, go to http://bv.ms/1lWQ0AJ
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  116. From Bloomberg, May 22, 2014, 6:13:54 PM

    Venezuela has plans for its national oil company.                           Photographer: Noah Friedman-Rudovsky/Bloomberg

    Beware the things a mismanaged oil-rich country might do when pressed for money. This rule applies in spades to Venezuela under President Nicolas Maduro.

    To read the entire article, go to http://bv.ms/1mb2czi
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  117. From Bloomberg, May 22, 2014, 5:52:28 PM

    Photographer: Andrew Harrer/Bloomberg

    A commenter, TheRadicalModerate, chides me for my earlier post on Benghazi:

    To read the entire article, go to http://bv.ms/1maXSjD
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  118. From Bloomberg, May 22, 2014, 4:50:00 PM

    Photographer: Andrew Harrer/Bloomberg

    There’s a certain irony in the fact that Airbnb Inc.’s decision to comply with a subpoena from New York Attorney General Eric Schneiderman came the same week that we learned of the death of Gabriel Kolko. Kolko, the eminent historian whose work on the early 20th century showed the role of government regulation in strangling small businesses for the benefit of big ones, would likely have seen in the struggle between the state of New York and pesky Airbnb as further vindication of his theories.

    To read the entire article, go to http://bv.ms/1ph5aTA
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  119. From Bloomberg, May 22, 2014, 4:05:17 PM

    To read the entire article, go to http://bv.ms/ReFJpT
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  120. From Bloomberg, May 22, 2014, 2:16:46 PM

    Dutch sandwich, anyone? Photographer: David Paul Morris/Bloomberg

    The foreign strategy that Google Inc. has used to justify keeping billions of dollars in cash overseas, out of the reach of U.S. tax authorities, might not be as foreign as it seems.

    To read the entire article, go to http://bv.ms/1jaPgFc
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  121. From Bloomberg, May 22, 2014, 1:07:44 PM


    Photographer: Andrew Harrer/Bloomberg

    Will Benghazi destroy Rand Paul?

    To read the entire article, go to http://bv.ms/1lWKHRG
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  122. From Bloomberg, May 22, 2014, 12:51:37 PM

    Give yourself to the dark side.                                                             Photographer: Marc Champion

    The first sign of Darth Nikolayevich Vader’s approach is the distant sound of the Imperial March from Star Wars, playing from a speaker on his motorcycle. The music grows louder as he appears, riding upright in a black chariot-style sidecar. A storm trooper drives the bike. (Watch the video.)

    To read the entire article, go to http://bv.ms/1lWFYQ8
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  123. German business confidence falls

    04:14 AM ET · EWG

    • The German Ifo institute’s business-climate index has slipped to 110.4 in May from 111.2 in April and missed consensus of 110.9.
    • The current-situation reading declined to 114.8 from 115.3 and undershot forecasts of 115.5, while the expectations print fell to 106.2 from 107.3 and vs estimates of 106.6.
    • The euro dives and is -0.2% at $1.3631, while the DAX is flat.
    • CESifo Web site
    • ETFs: EWG, BUND, EWGS, DBGR, GERJ, DXGE, BUNL, FGM, BUNT, GGOV, HEWG


  124. States probe eBay following major cyberattack

    03:16 AM ET · EBAY

    • Attorneys general in Connecticut, Illinois and Florida are investigating eBay (EBAY) after the auction Web site disclosed this week that a database with encrypted passwords and personal information was breached in February and March.
    • New York AG Eric Schneiderman hasn’t announced a formal probe into eBay, although he wants the company to provide its customers with free credit-monitoring services, just as Target has done for NY victims of the major cyberattack that the retailer suffered late last year.


  125. German Q1 GDP confirmed at +0.8%.

    02:39 AM ET · EWG


  126. China looks like big winner in landmark gas deal; U.S., Canada may be losers

    Yesterday, 07:40 PM ET · OGZPY


  127. Barrick, execs named in $6B class action suit over Pascua-Lama project

    Yesterday, 06:46 PM ET · ABX

    • Several Canadian law firms file a $6B securities class action lawsuit accusing Barrick Gold (ABX) and four senior company officers of misrepresenting the status of the company’s Pascua-Lama mine.
    • The suit, filed with the Ontario Superior Court of Justice, alleges ABX described Pascua-Lama as a feasible and highly economic project due to the low cost to construct the mine and produce gold and silver from it, and that the company knew or should have known it would need to overcome significant obstacles.
    • Individual defendants named include CEO Jamie Sokalsky and predecessor Aaron Regent.


  128. Report: Ruckus working with Google on Wi-Fi initiative

    Yesterday, 06:34 PM ET · RKUS

    • GigaOm reports Google is working with Ruckus (RKUS) to build a national Wi-Fi hotspot network. The Web giant is trialing the use of Ruckus’ cloud-based Wi-Fi controller software to manage the network.
    • The Information reported yesterday Google plans to offer retail businesses (restaurants, gyms, etc.) heavily subsidized Wi-Fi hardware/software, with the goal of creating a nationwide network of free hotspots supporting (via the HotSpot 2.0 standard) automatic login. The use of cloud-based controllers would enable centralized service management.
    • The report comes as Ruckus rival Aruba sells off in spite of beating April quarter revenue estimates (while posting in-line EPS) and offering healthy July quarter guidance. Margin worries appear to be the culprit.


  129. NYT: BlackRock encourages AstraZeneca to renew Pfizer talks at later date

    Yesterday, 06:19 PM ET · AZN

    • AstraZeneca’s (AZN) largest shareholder, BlackRock (BLK), wants the drugmaker to renew its talks with Pfizer (PFE) about a potential deal at a later date, NYT‘s DealBook reports.
    • BlackRock reportedly has told AZN’s board that it supports the decision not to accept PFE’s latest offer, which valued AZN at ~$117B, but would prefer the companies engage in further talks as soon as three months from now, when certain restrictions would expire under British takeover rules.
    • Under British takeover rules, PFE wouldn’t be able to come back with another offer for AZN for six months time following Monday’s deadline, although it could offer a higher price in three months if AZN’s board agreed to talks.


  130. Alcatel in talks to unload cybersecurity unit

    Yesterday, 06:08 PM ET · ALU

    • Alcatel-Lucent (ALU -2.8%) is in talks with French security hardware firm Thales to sell its cybersecurity ops. No potential deal price has been given yet.
    • The unit has 90 European employees. Its sale is part of a larger effort to unload €1B ($1.37B) worth of assets by 2015.
    • Many tech companies have been going in the other direction, acquiring cybersecurity startups to address growing enterprise/government interest.
    • Alcatel has thus far announced deals to sell €400M ($548M) in assets, including a government products unit that fetched $200M.
    • Bloomberg reported in January the company is in talks with multiple firms to sell its slumping enterprise hardware/software unit.


  131. Aeropostale -17% AH on revenue miss, weak guidance

    Yesterday, 04:54 PM ET · ARO

    • Aeropostale (ARO) expects FQ2 EPS of -$0.55 to -$0.61, below a -$0.50 consensus.
    • Comparable sales (inc. e-commerce) fell 13% Y/Y in FQ1 (driving the revenue miss) after falling 15% in FQ4. E-commerce sales fell 18% to $34.3M.
    • Gross margin fell to 17.8% from 22.4% a year ago. SG&A spend was 30.2% of revenue vs. 27%.
    • 19 stores were closed during the quarter. Aeropostale ended FQ1 with $24.5M in cash, $8.5M in short-term borrowings, and $173.2M in merchandise inventory. FQ2 op. loss is expected to be in a range of $49M-$50M.
    • Shares are making fresh 52-week lows AH. FQ1 results, PR.


  132. Marvell offers strong outlook, but GM misses guidance

    Yesterday, 04:38 PM ET · MRVL

    • Marvell (MRVL) expects FQ2 revenue of $940M-$980M and EPS of $0.26-$0.30, largely above a consensus of $930.1M and $0.26.
    • FQ1 gross margin was 48.8%, -130 bps Q/Q and -580 bps Y/Y, and missing guidance of 49%-51%. That resulted in EPS only moderately beating estimates in spite of a huge revenue beat. Nonetheless, Marvell has set an FQ2 guidance range of 49%-51%.
    • Better-than-expected demand for Marvell’s 4G LTE baseband processors contributed to the revenue beat. The company recently began shipping products for this market, which has long been dominated by Qualcomm, and has scored design wins with Chinese OEMs.
    • Opex rose 4% Y/Y, well below rev. growth of 30%. No buybacks take place in the quarter.
    • MRVL -0.7% AH. FQ1 results, PR


  133. The Fresh Market skies after Q1 results

    Yesterday, 04:31 PM ET · TFM

    • Adjusted EPS of $0.43 slips from $0.46 one year ago, but revenues increased 17.6% and comp store sales grew 2.5%. Gross margin slipped to 34.4% from 35.3%.
    • Cash flow from operations of $56.2M vs. $45.9M one year ago. $24.4M went to capital expenditures (remodeling and new stores), with most of the rest going to pay down the company’s revolving credit line.
    • Seven new stores opened in Q1, with leases signed on another 21. Total stores as of April 27 of 154.
    • Full year adjusted EPS guidance of $1.56-$1.66 is reaffirmed, with comp store sales growth of 1.5-3.5%.
    • CC at 5 ET
    • TFM +11.4% AH
    • Previously: The Fresh Market EPS in-line, beats on revenue


  134. GameStop results boosted by Xbox One and PS4

    Yesterday, 04:22 PM ET · GME

    • Earnings of $68M up 24.5% Y/Y, with EPS of $0.59 up 28.3%.
    • Comp store sales up 5.8% from a year ago, with new hardware sales up 81.1%. New software sales fell 20.4%, but pre-owned/value software sales rose 5.3%.
    • Non-GAAP digital receipts up 9.5%.
    • 1.33M shares repurchased during Q at average price of $39.28 each. $405M remains on repurchase authorization. Float is about 115M shares.
    • Q2 comp store sales growth guidance of 12-19%, with EPS expected at $0.12-$0.20 (Street is at $0.17), representing a 33-122% increase over one year ago. Full year EPS guidance of $3.40-$3.70 and comp store sales growth guidance of 6-12% is maintained.
    • CC at 5 ET
    • Previously: GameStop beats by $0.02, misses on revenue
    • GME +1.8% AH


  135. Stocks close higher, Russell 2000 jumps while blue chips lag

    Yesterday, 04:20 PM ET

    • Stocks eased modestly higher in quiet trading, leaving the S&P 500 just 0.3% shy of its May 13 all-time high, but investors remain cautious about making big bets in either direction.
    • A trio of slightly weaker than expected readings on the U.S. economy were offset by a five-month high in China’s purchasing managers’ index.
    • The Russell 2000 index of smallcap stocks, which has underperformed the broader market by a wide margin in recent weeks, jumped 1% today.
    • Strength in biotechs helped lift the Nasdaq; The top biotech ETF surged 1.9% to regain its 50-day MA after falling below that level in late March.
    • Treasurys settled near their lows after retreating throughout the session; the 10-year note slid six ticks, with its yield climbing 2 bps to 2.55%.


  136. H-P guides in-line, announces more job cuts

    Yesterday, 04:17 PM ET · HPQ

    • After releasing its core results early, H-P (HPQ) has provided its full FQ2 report after the close. The IT giant guides for FQ3 EPS of $0.86-$0.90 vs. an $0.89 consensus, and FY14 EPS of $3.63-$3.75 vs. a $3.71 consensus.
    • H-P also announces it’s increasing the size of its job cuts by 11K-16K positions. The company, which had ~317K employees last year, has already announced plans to shed 34K jobs.
    • $831M was spent on buybacks in FQ2, helping EPS meet estimates in spite of a revenue miss. Gross margin rose 50 bps Y/Y to 24.2%. R&D spend +7% Y/Y to $873M, SG&A spend +1% to $3.39B.
    • Contributing to the revenue miss: Printing revenue fell 4% Y/Y after falling 2% in FQ1, enterprise hardware fell 2% after growing 1%, and enterprise services once more fell 7%.
    • PCs were healthier (+7% vs. +4%, with 12% commercial growth offsetting a 2% consumer drop). As was software (flat vs. -4%, with 8% license growth). Financial services -2% vs. -9%.
    • High-margin printing supplies revenue fell 7%, while printing hardware units rose 1%. In enterprise hardware, a 6% drop in storage and a 14% drop in business critical systems (Itanium weakness) offset a 6% increase in networking. x86 servers rose 1%.
    • HPQ -1.2% AH after falling 2.3% in regular trading. FQ2 results, PR


  137. Best Buy reiterated a Buy at BAML

    Yesterday, 04:11 PM ET · BBY

    • Calling Q1, “another quarter of strong execution and cost reductions ($860M since Q1 of 2013) and substantial progress on initiatives such as ship from store,” analyst Denise Chai reiterates a Buy rating and $36 price target on Best Buy (BBY +3.5%).
    • Her team says Best Buy is “increasingly well-positioned to accelerate EPS growth” Catalysts: 1) A huge improvement in online capabilities; 2) The ability to sell returned and open box merchandise online; 3) Better mobile sales as installment billing fully rolled out; 4) Upside from an underappreciated 4K TV cycle; 5) Greater flow through of Renew Blue cost savings; and 6) The rollout of Athena.”
    • Previously: Best Buy lower as soft sales guidance trumps margin improvement


  138. Northern Dynasty asks court to stop EPA from blocking Pebble project

    Yesterday, 03:37 PM ET · NAK

    • Northern Dynasty Minerals (NAK +3.6%) says it has asked the U.S. District Court in Alaska to stop the EPA from possibly blocking development of the Pebble copper-gold project in Alaska before the company could even apply for a permit.
    • NAK maintains that the EPA can veto some permits but cannot act before a company actually seeks a permit, and doing so would violate Alaska’s legal right to develop mineral resources.
    • An EPA study released in January said the mine could have “significant and irreversible negative impacts” on Alaska’s Bristol Bay region, and in February began a rarely used process that could lead to rejection of the proposed mine, which could be one of the world’s largest copper mines.


  139. WSJ: TD Bank looking into major NYC expansion

    Yesterday, 02:55 PM ET · TD

    • TD Bank (TD +2.9%) is considering being the principal tenant for a new Midtown skyscraper across from Grand Central Terminal being developed by SL Green Realty (SLG), reports the WSJ. The developer says the building – named One Vanderbilt – could have 1.6M square feet of space, and drawings show it towering over the nearby Chrysler building.
    • The bank’s U.S. unit has seen big growth in recent years, and while it has a number of branches in NYC, it has only a small amount of office space. It’s not known, says the Journal, if TD is looking at other locations.
    • TD’s stock is having a big session following its FQ1 results this morning, hitting a new all-time of nearly $49 per share.
    • Previously: Strong retail results for TD Bank


  140. Goldman’s 50 most-loved hedge fund stocks

    Yesterday, 02:43 PM ET · GOOG

    • Google (GOOG), Apple (AAPL), GM, and AIG retain their top rankings in Goldman’s quarterly list of most popular hedge fund holdings, but maybe some of the smaller capitalization stocks on the list is where the real alpha lies.
    • Of the 777 hedge funds surveyed, 25 have stakes in NorthStar Realty Finance (NRF), putting it at #16 on the list, 20 are owners of American Realty Capital (ARCP), and 18 hold Assured Guaranty (AGO).


  141. Lithium battery testing still not good enough, NTSB says

    Yesterday, 02:40 PM ET · BA

    • The U.S. government failed to properly test the Boeing (BA +0.9%) 787 Dreamliner’s lithium-ion batteries and relied too much on Boeing for technical expertise, a new report from the NTSB says in criticizing the process used by the FAA to certify the new jet in 2007.
    • The report directly conflicts with the FAA’s own internal study released in March, which said the agency had “effective processes in place to identify and correct issues that emerged before and after certification.”
    • Other aircraft, including the Boeing 777, recent versions of the company’s 737s and the Airbus A380 (EADSF, EADSY), have smaller lithium-ion batteries that were tested with the same flawed standards, the NTSB says.


  142. Google algorithm change dings eBay traffic, could force it to buy more ads

    Yesterday, 02:35 PM ET · EBAY

    • An analysis done by SearchEngine Journal estimates eBay.com (EBAY -1.1%) has seen a 33% drop in search traffic thanks to Google’s (GOOG +1.3%) new Panda 4.0 algorithm update, and InterActiveCorp’s (IACI -1.1%) Ask.com a 50% drop.
    • Moreover, David Kim, the CEO of SEO firm Wordstream, has done an analysis that suggests eBay has “lost around 75%” of its keyword terms from Page 1 of Google’s results, and 80% of its more specific (i.e. long-tail) keyword results.
    • Kim blames the falloff on the fact eBay’s search traffic tends to involve doorway pages with “very little content,” rather than actual product pages. “I’m surprised that Google has allowed these shenanigans to go on for so long.”
    • He thinks Google’s move has the effect of forcing eBay to buy Google’s increasingly popular product listing ads (PLAs) to reach search users. eBay is already a PLA client, but (like Amazon) is less dependent on Google ads (and Google traffic in general) than many smaller e-commerce firms.
    • The algorithm tweak follows changes to the display of Google’s AdWords text search ads that lead them to blend in more with organic results, and thus potentially make them more likely to be clicked.
    • eBay and IAC are underperforming amid Panda-related worries, but they’re faring much better than RetailMeNot.


  143. Manchester United and Nike in talks over contract extension

    Yesterday, 02:03 PM ET · MANU

    • Manchester United (MANU -0.2%) is in talks with Nike (NKE +0.6%) about renewing an equipment contract which expires in 2015, according to the WSJ.
    • The company thinks it can land over $600M for a contract covering several years, despite the club’s slide to 7th place in the Premiere League standings this year.
    • British tabloids have reported that Adidas (ADDYY) has topped Nike’s initial bid.


  144. RetailMeNot responds to Google traffic report; shares now -20%

    Yesterday, 02:00 PM ET · SALE

    • Following a SearchEngine Journal analysis suggesting RetailMeNot’s (SALE -20%) Google traffic has fallen ~33% after an algorithm change, the company states it’s “too early to judge” the impact of Google’s move.
    • It also notes many of its ~600K digital coupons/promo codes aren’t currently monetized, thus making traffic an imperfect gauge of revenue.
    • However, on a more worrying note, RetailMeNot admits it “has experienced some shift in rankings and traffic,” even as its Google traffic continues growing Y/Y. No change is being made to guidance for now.
    • Shares have added to their losses since the statement, and are near the day’s lows.


  145. Obits piling up on Sears Holdings

    Yesterday, 01:43 PM ET · SHLD

    • Analysts are busy piling on Sears Holdings (SHLD +0.6%) after the company issued a lackluster report on Q1.
    • Credit Suisse’s Gary Balter notes the meltdown in sales and margins at the company would have been even worse if the Sears Canada units which are now sold are stripped out and two months of contributions from Lands’ End were also excluded.
    • In his report titled “Running Out of Fingers to Stop the Leaking” Balter crunches a few numbers to show a negative equity value for SHLD can be extrapolated.
    • CS sees a +40% sell-off in shares to put Sears Holdings near the $20 level.


  146. Bove: Easier D.C. mortgage policy a boon to Wells Fargo

    Yesterday, 01:25 PM ET · WFC

    • “There is no company in the country better positioned to take advantage of the shift in government mortgage policies,” says Dick Bove. “The internal adjustments made by the bank in pricing servicing and in the cost of originating loans suggest that mortgage activity will be a big source of company income very soon.”
    • Bove’s note on Wells Fargo (WFC +0.6%) comes following the bank’s investor day, and after new FHFA director Mel Wall signaled a shift in focus for the GSEs from pulling back from the mortgage market to one of making housing credit more readily available.
    • Deutsche’s Matt O’Connor isn’t as impressed, wondering how GDP growth can accelerate if underwriting standards remain tight, business stays sluggish at the big banks, and the Fed continues to scale back its monetary ease.


  147. Home values fall for first time in over 2 years says Zillow

    Yesterday, 01:18 PM ET · SBY

    • Zillow’s April Real Estate Market report has national home values slipping 0.1% in April to $170,200, the first month-over-month decline since about the end of 2011. On a year-over-year basis, home values gained 5.3%. The company’s current forecast calls for values to rise 2.2% in the year ending April 2015, about a third of 2013′s appreciation.
    • Values fell in April even as inventory continues to tighten, with the number of homes listed for sale on Zillow slipping 0.4% annually last month, the 4th consecutive month of decline. Conditions are most “acute” at the lower end of the market which has become the sandbox of institutional players like Silver Bay (SBY -0.1%), American Homes 4 Rent (AMH +0.3%), American Residential Properties (ARPI +0.4%), and Starwood Waypoint (SWAY +0.5%).
    • Rents were up 2.3% on an annual basis in April.


  148. Cree +5.7% after announcing 200 lumens/watt LED

    Yesterday, 12:55 PM ET · CREE

    • Cree (CREE +5.7%) asserts its new XP-L LED offers a :”breakthrough efficacy” of 200 lumens/watt at 350 mA, can deliver 1226 lumens in a small 3.45mm x 3.45mm package, and provides a 50% performance boost relative to the prior-gen XP-G.
    • Improving LED brightness/power efficiency has been a priority for Cree – both to stay ahead of low-cost Asian rivals, and to improve the price/performance delivered by LED lighting solutions.
    • Cree’s LED product sales grew only 3% Y/Y in the March quarter to $201.1M. But its lighting product sales grew 35% to $176.7M.


  149. 3 Signs The Economy Is Doing Okay

    03:26 AM ET | by Cullen Roche

    There is a persistent concern about recession in the current environment where growth is operating below trend, but there are signs of hope. Three of my preferred real-time economic data points continue to show signs of positive economic trends:1) Rail traffic continues to perform nicely in Q2 after a slowdown earlier in the year. The latest intermodal reading of 6.8% year over year brings our 12 …

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