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Thursday Thrust – Peak China Achieved

4,016! 

That's what the Shanghai blasted up to at the open, though we pulled back to 3,957 by the close as some people decided that a 100% run in 6 months called for a little profit-taking.  Don't worry, it's all part of the "new normal" for equities and nothing bad can possibly happen – it's just that, 6 months ago, traders didn't know value when they saw it but NOW we are much smarter and these prices are here to stay, right?  According to UBS: 

With no significant change in China's macro or corporate fundamentals, the visible rebound in China's A-share market since November appears to have been largely liquidity driven. We think this, in turn, may have been fuelled by a number of factors including:

  1.  New funds flowing into the stock market from household saving, real estate, commodities and trust markets;
  2.  Banks' bridge loans provided to investors who lost access to other high-yield shadow banking products as the result of tighter regulation;
  3.  The PBC's easing of liquidity conditions via a variety of "targeted easing" tools (e.g. MSL, PSL, etc.);
  4.  The official launch of Mutual Market Access (MMA) between the Hong Kong and Shanghai exchanges;
  5.  Long-term expectations for SOE reform and A-shares entering the MSCI index next June;
  6.  Increased use of leverage by retail investors via margin trading; and
  7.  Market sentiment being boosted by expectations for further policy easing.

This has been a "New Deal" for Chinese stocks as the Government attempts to paper over a slowing economy by giving the people record market highs to "prove" how well things are going.  Now, BNP is out with a note calling China’s equity bubble “a microcosm for the overall economy: unsustainable growth in leverage masking ever-deteriorating fundamentals and increasing future downside risks.”

We mentioned shorting FXI (China ETF) in yesterday's post but we couldn't give a specific option play because we were waiting for that 4,000 mark in Shanghai.  It turns out $50 is the magic number on FXI and we like that line for a short and we like the May $48 puts at $1 this morning – enough to go with 40 of them in our Short-Term Portfolio for $4,000.  Chinese companies have earnings too – we'll see if they can live up to the hype over the next 45 days.  

We're also going to be adjusting our hedges in the STP to take advantage of the recent rally.  Either we fail here on earnngs and the STP makes a fortune or the market breaks higher and we quickly deploy our sidelined cash from our Long-Term Portfolio.  At the moment, we're strongly leaning bearish into earnings.  

As you can see from our LTP balance, we're up $16,000 on our remaining positions over the past 10 days (see 3/30 cash out post) as we kept our losing materials positions on the premise that, if we were, in fact, missing a rally – that materials would eventually pick up.  Oil has had a wild ride this week and now well off the Tuesday highs but, on the whole, $16,000 is a fantastic gain considering how small our invested position is (93% cash).  

Our STP, meanwhile, has lost $8,000 (now $191,735) as it's aggressively bearish and we're not (so far) getting the drop we expected.  Still, the idea of our paired portfolios is to be well-balanced and clearly at net +$8,000 in 10 days, we're on the right track.  That's why we're willing and able to invest a bit more on the short side today (and free readers can still refer to last week's TZA picks for some of our great hedging ideas). 

We're very worried about earnings this quarter and AA managed to beat last night but ONLY because they DOUBLDED their GAAP EPS with 0.14 in non-GAAP proforma addbacks.  This is the kind of finanacial engineering we discussed in yesterday's post and now we're seeing it in action on the very first Dow component to report this quarter.  

In other words, one half of Alcoa's "EPS" in the quarter was due to what management thought was another quarter of recurring "non-recurring", non-one time "one-time" charges.  This has been going on consistently for the past 12 months as AA has added $740M to their GAAP earnings as they restructure.  

I'm sorry folks but I simply can't get bullish on the markets when we have TRILLIONS of Dollars of stimulus pouring in, Negative Interest Rates, Record Stock Buybacks AND Financial Shenanigans and ALL we manage to do is get back to our all-time highs.  What happens if we stop firing on all cylinders?  What happens if all these tricks stop working and we have to focus on the actual returns on investments our market Dollars are generating.

CASH!!! is what I like.  We can invest any time.  9,000 companies are about to give us some very important data that can guide our investing for the rest of 2015 so why try to guess where to put our money when we'll be sure in a few weeks?  

Let's be careful out there!  

 


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  1. From Briefing Trader :

    Broadcom: Stock seeing a spike as INTC, ALTR have dissolved; BRCM is another M&A target so any fall though on talks will lead to speculation that BRCM will be targeted


  2. Good morning!

    Let's see if our STP can put us in this boat (costs $50,000 a week to rent).  

    If this isn't a top for the RUT, we're breaking higher so we're going to invest a bit more in our STP hedges right before we give up and go bullish (if we break higher instead of the pullback we expect). 

    RUT WEEKLY

    Clearly we're at technical inflection points all over the place:

    SPY DAILY

    SPX WEEKLY

    INDU WEEKLY

    IYT  WEEKLY

    NDX WEEKLY

    XLB WEEKLY

    XLF WEEKLY

    XRT WEEKLY

    IBB WEEKLY

    TLT WEEKLY

    UUP WEEKLY

    FXE WEEKLY

    FXY WEEKLY

    GLD WEEKLY

    SLV WEEKLY

    DBA WEEKLY

    EWG WEEKLY

    FXI WEEKLY

    NYMO  DAILY

    NYSI DAILY

    VIX WEEKLY


  3. Good morning Phil and fellow PSW members. I am getting a pre-market quote of $1.22 for those FXI puts. at 9:10. Is your $1 price from earlier or is it what you expect once the market opens? Just curious where the discrepancy is coming from. Thanks Phil. I have some $40 May puts in one of my accounts from a while back before this big run up which are now virtually worthless at a price of $ .04. Would you roll these up to the $48 puts or do you think they are worth hanging onto for now? 


  4. on the apr fxi puts, i'm seeing this at a bid / ask of 1.05 / 1.16, so closer to the 1 now 


  5. Just to be clear we are buying the FXI puts correct?


  6. TASR – Up big.


  7. sorry all the previous info was for FXI MAY 29 48 puts


  8. Good Morning!


  9. BRCM/Albo – I'd buy them for $26Bn and even a 30% premium ($55ish) wouldn't be too crazy to pay.  Since money is obviously flowing in gushers, this isn't out of the bounds of possibility.  

    FXI/Craigs, All – That was my pre-market guesstimate.  Now it's 0.86/0.95 so 0.90 seems doable and that's what I'd offer in the STP but also make sure we get 0.95 if it starts going the other way (now $50.28, up 2% on the day).  

    TASR/Albo – Gotta love the Stock of the Decade:


  10. yes buying fxi may 48 dollar puts about .93 cents now on ib


  11. FXI/Craigs – Well at 0.02 (if you can find a buyer), I'd say better off crossing your fingers on those as there's really nothing to be done with them.  "Rolling" them would cost you half the 0.02 just to move in and out of the roll so just pointless but also super-doubtful FXI drops 20% so maybe ask 0.05 and be thrilled to get it on a dip.  


  12. Phil, what about yang – a three times inverse eft for china. You could buy October 6 call for 1.2 and possibly sell a rollable oct 5 put for .7


  13. any thoughts on /rb today phil

    tom


  14. STP Adjustments:  We may as well get more aggressive here because either it's a top and we get rejected (making us money) or it's a breakout and we can't be much more screwed. 

    • TZA July $9s – We have 150 of them because we never got a chance to get out for $2 and now they are $1.40.  We didn't want them to be a spread because we wanted to take advantage of a quick move in the RUT and we kind of still do so I guess we just leave them alone and cross our fingers.  We still want to ditch 100 if we can get $2 as we have 50 Jan $9/20 bull call spreads as well.
    • SCO – I think we bought back those short calls and, if not, we should have.  
    • EWJ – Our 100 April $13 puts are down to 0.20 with EWJ at $12.86 and we have just 8 days left so better off investing 0.10 to roll to the May $13 puts and give ourselves longer to be right. 
    • FXI – As noted above, we're adding 40 of the May $48 puts at 0.90.  We already had 20 of the April $42.50 puts at $1.60 and those are toast unless a miracle happens soon.  
    • TSLA – No change. Back over $200 you think our short puts would look better.
    • FAS – We have 15 2017 $140/170 bull call spreads protecting our very short 15 Apri $117 calls (sold for $13.50, now $8.50) and 10 short Jan $117 calls (sold for $26.83, now $34.70) and we also sold 10 2017 $70 puts that we sold for $10 but are now $12 for some silly reason (how can you lose on both sides of short 2017?).  Nothing to do but wait and roll the Aprils when time comes.  
    • KBH – On track.  In fact, net $2 on the $3 July spread that's 100% in the money is still a pretty good spread.
    • SQQQ – We're in for net $3.40 and we're $6 in the money on our Jan $20 calls but the position shows us a $12,250 loss.  SQQQ really sucks to have in your portfolio if you worry about your daily balance as this position is screwing us out of $25,000 on paper.  It currently shows net $5,000 on 50 calls that are $6 in the money.  
    • USO – Ah, we wanted to take advantage of this and now the short April $18 calls are down to 0.60 but that's a bit too much to pay, I think, with USO at $18.20 so we'll just have to wait and let the premium grind down into expiration.  Worst case is we net $3+ on the spread so no major concerns.  

    • XRT – Arrrrrrrrrrrrrrrrrrrrrrrgh!!!!!  What is it going to take to kill this thing?  At least we wised up this time and sold the April puts to offset our rolling and we'll let them expire and then see how we feel about selling May puts (I'd rather not).

    • SLW – Getting there.
    • XLU – On track. 

    So nothing tragic here.  If we had only cut back our TZAs in fact, I'd say this portfolio was perfect.  As it is, we're 100 TZAs too bearish and that's $14,000 BUT, I kind of like taking a chance into the first full week of earnings – but it's a gamble, not an investment!  


  15. Yang/JMD – I don't track it so I don't know how good/bad they are for decay factors (always a concern for ultra-etfs) but it looks like the July $7s at 0.55 are kind of a fun bet as YANG was at $14 to start the year and $5.88 now so even a weak bounce would put you in the money.

    /RB/Tommy – Same thoughts as last week, I like it long off that $1.75 line.  


  16. What would you recommend for new hedges?


  17. Dollar up to 99 again and that's up 1% for the day so markets actually doing well against that headwind.  

    New hedge/JMD – I loves my TZAs, they are great movers in a crash.  July $8s are $2 and the $9s are $1.40 so not really worth 0.60 for the $8s but, as a hedge, you can do the $8/9 spread for 0.40 and that pays 150% UNLESS TZA drops more than 10% (RUT up 3%) and then you can roll the $8s to a Jan bull call spread long before they drop below 0.40.  

    So, let's say you want to buy 1,000 shares of TASR at $22 (now $27.20), so you sell 10 the 2017 $22 puts for $4.50 ($4,500).  That lets you buy 100 of the TZA July $8/9 bull call spreads for 0.40 ($4,000) and, if TZA is over $9 in July, you get $10,000 back.  After that, even if TASR is assigned to you at $22,000, you still net in for $12.

     


  18. Since IBB is at all time highs do we have a trade there? The 5x 350/320 BPS is about 6.55. I know there was some chatter here yesterday on this.


  19. June SPY $200 Puts are a good hedge as well.  Leg into them and sell the April $202s as a reducing agent!!!!


  20. I've had an open position for a long time now on a Jan 2016 30/35/40 Put Butterfly at $0.60 with a $-1.80 bid and $3.50 ask.  Why won't you fill!?!?!   Mark on the position has swung all the way from $0.40 to $0.85.  Guess the liquidity is just too low.


  21. IRBT since I neglected to include that part…


  22. IRBT/JPH

    Just my 2 cents, but on the Jan16 40 you've got a $2.00 wide spread, and NO open interest.

    The Jan16 35 put is $1.30 wide with only 19 open contracts.

    Yeah, that one is going to be a bitch to fill.


  23. TZA/Phil

    Have April 15 2015 $10/$15 BCS for $0.70. What do you recommend for this position now? Thank You.


  24. Wheeeee -  That was fun!

    Nice little sell-off but bouncing already. /RB up tpo $17.644 already. /NG going the other way at $2.55 and /CL $51.13.

    /TF fell all the way to 1,242, down 20 from the top. 

    IBB/Pirate – I don't have any urgent reason to short them.  They seem stretched but it's tricky to short without studying the mix very closely.   IF you are going to short, THEN the bear put spread is probably the best way to try.

    SPY/Pharm – Those are good as the June $200 puts are $3 and you need a $4 move (2% of SPY) to make $1 (33%), so nice leverage.  

    IRBT/JPH – Man, you didn't even give me a chance to guess!  You really need to leg into those – they are very hard to get good fills on. 

    TZA/Hex – Rule of thumb it move the long call BEFORE it slips below the net price of the spread.  You are miles too late now, at $0.30 but still the idea would be to salvage what you can and roll on to a longer-term call (before the rest of your premium expires).  I still like those July $9s (now $1.55) and the $10s are $1.10 if you want to spend less and then, after the short Apr $15s expire, you can sell May whatevers to begin paying for the spread (at the moment, the $12s are 0.20).


  25. Even at 50, FXI pays 2.37% yield and has a P/E of 11 versus DIA paying 2.08% at 17.

    I'm not saying it's a good investment, but FXI already has some relatively serious earnings downside priced into it?


  26. FXI/BDC – I don't know if we can take that p/e number seriously.  IShares says 16.69 as of 3/31, which was 15% ago.  Price/Book is 3, which is a bit higher than the S&P (IVV in IShares) but, again, that was 15% ago.  

    Foreclosure victims returning to market

    • In what could be a big boon for the housing and mortgage industry, financial crisis-era foreclosures are beginning to roll off credit reports in a big way, thus boosting credit scores and allowing those who lost homes to again qualify for a mortgage.
    • Foreclosures and many other negative credit events stick around on credit reports for up to seven years, and Fair Isaac estimates about 910K consumers had foreclosure proceedings begin between October 2007 and October 2008. Of those, 264.4K no longer had evidence of such on their credit reports as of last October, and the number should rise to 645.6K by year-end.
    • While most of the big banks – gun-shy from never-ending housing bubble legal issues – still require pristine credit, many smaller players are stepping in.
    • “We have a large number of people who were affected by foreclosure and have been sitting in the penalty box,” says ASU's Mike Orr. “This ‘boomerang buyer’ group is a pretty substantial potential demand.”
    • Source: WSJ

    Cameco raised to Buy at Canaccord on currency benefits, uranium pricing

    • Cameco (CCJ +3.1%) is higher after Canaccord upgrades shares to Buy from Hold with a C$23 price target, up from C$20.
    • Canaccord notes that uniquely among commodities, CCJ did not reduce its Q2 uranium price forecast, and that the company will enjoy the full benefit of the reduced exchange rate between Canadian and U.S. dollars – even more crucial to CCJ’s financial forecasts than spot uranium prices, the firm says.
    • The ongoing Canadian Revenue Agency tax disputes remain the key valuation risk for CCJ, Canaccord says, but even adjusting for an assumption that CCJ loses all outstanding tax disputes, the firm sees bottom-of-cycle share price support at C$18-C$20 and mid-cycle share price support at C$17.
    • Cliffs Natural Resources (CLF -3.7%) is downgraded to Underperform from Market Perform with a $4 price target, slashed from $8, at BMO Capital, which says the iron ore oversupply is "not letting up."
    • BMO analyst Tony Robson writes that CLF's cash flow is under strong pressure from low iron prices, and expects CLF's Australian iron ore, once a strong cash flow generator, to generate little if any cash while the company's U.S. pellets operations are becoming more linked to global prices during a period of weak pricing.
    • Robson sees CLF's net free cash flow at $10M in 2015, dipping to negative $200M in 2016 including net interest expense of $170M/year.
    • Airlines stocks are making their typical strong move opposite the direction of oil prices.
    • The wild gyrations in the sector appear to be overdone to some analysts and industry watchers as developments in the oil patch crowd out capacity, demand, and pricing trends.
    • Fuel costs only accounted for 30% of the operating expenses for U.S. carriers last year,notes U.S. Global Investors CEO Frank Holmes.
    • He points out that airlines have also become more rational and are increasing the mix of fuel efficient planes.
    • There's also the disparity of airline stocks moving roughly in tandem despite different levels of jet fuel price exposure.
    • Previously: Fueling around with airline stocks (Feb. 07 2015)
    • Airline stocks on the move today: Hawaiian Holdings (NASDAQ:HA) -3.4%, Republic Airways (NASDAQ:RJET) -1.8%, Virgin America (NASDAQ:VA) -1.5%, American Airlines Group (NASDAQ:AAL) -1.5%, JetBlue (NASDAQ:JBLU) -1.5%, Spirit Airlines (NASDAQ:SAVE) -1.4%, Southwest Airlines (NYSE:LUV) -1.3%, Alaska Air Group (NYSE:ALK) -1.2%.
    • Execs with Alcoa gave an inside look at automobile industry demand trends during the firm's earnings call yesterday.
    • The company sees pent-up demand in the U.S. and lower gas prices backing a seasonally adjusted selling rate of over 17M units.
    • The average fleet age in the U.S. is still over the historic average and inventories are down, they noted.
    • Alcoa CEO Klaus Kleinfeld pointed out that China has about 9M vehicles in the road that don't comply with the Clean Air Act and sees upside for Western Europe.
    • Alcoa (NYSE:AA) -2.2% premarket after reporting better than expected Q1 earningswhile sales trailed analyst estimates; much of the earnings beat appears to have been driven by the upstream businesses, which could be disappointing investors.
    • Q1 results showed continuing cost control in the upstream business; in AA's primary metals unit, favorable currency moves, lower energy costs in Spain, and productivity gains lowered per unit production costs by 5.4%, offsetting some of the drag from lower aluminum prices and higher alumina costs.
    • Nomura cuts its stock price target to $21 from $23 while keeping its Buy rating as it accounts for lower primary aluminum and physical premia values; the firm says AA is trading towards the lower end of its historical valuation range, which does not credit an improved product mix achieved over the past 18 months.
    • Stifel cuts its target to $19 from $20 and maintains its Buy rating; despite reduced near term aluminum price assumptions, the firm continues to believe AA will see earnings shift toward its higher value downstream businesses (Briefing.com).
    • Alcoa earnings call transcript
    • Macau gaming companies continue to consider opportunities outside of the Chinese gambling mecca with other regions forecast to see strong growth.
    • Melco Crown and Sino Gaming/Macau Group are already in talks with regulators about new casinos in the Philippines, while Caesars Entertainment (CZR -0.2%) is also reportedly interested in the region.
    • Singapore, Vietnam, and Japan are all being considered for new long-term projects by various companies.
    • Casino stocks with a Macau presence are off and running today, despite more projections on dismal -36% to -40% Y/Y revenue slide for April.
    • Turning the spotlight on other Asian markets may be doing the trick.
    • Gainers: Wynn Macau (OTCPK:WYNMFOTCPK:WYNMY) +7.7%, MGM China (OTCPK:MCHVFOTCPK:MCHVY) Wynn Resorts (NASDAQ:WYNN) +3.9%, Las Vegas Sands (NYSE:LVS) +3.3%, Melco Crown (NASDAQ:MPEL) +3.2%, Galaxy Entertainment (OTCPK:GXYEF) +2.9%, MGM Resorts (NYSE:MGM) +1.6%.
    • Shares of Costco (NASDAQ:COST) trade lower in early action after the company's March sales report disappoints.
    • The -2% comp was below the -1% analysts forecast and marked the first negative headline comp since 2009.
    • Putting aside the F/X pressure and the loss of a selling day in the month, the company's +6% comp in the U.S. on strong traffic looked just fine.
    • Previously: Costco report Mar. same store sales at -2.0%
    • COST -1.0% premarket.

    Taser +7.4%; London buys 178 body cameras

    • The City of London has bought 178 Taser (NASDAQ:TASRAxon body cameras for its police force, and a 1-year subscription to Taser's Evidence.com digital evidence recording/storage service. The order has already been shipped, and is said to be Taser's first "significant" U.K. deal.
    • Taser is once more less than $2 away from a 52-week high of $28.30. Shares rose 2.6%yesterday after video emerged of a South Carolina shooting of an unarmed man running away from a police officer. Smaller body camera provider Digital Ally is up 23% over the last two days.

    Sprint sets tomorrow for rollout of co-branded RadioShacks, doubling footprint

    • Sprint (NYSE:Ssets tomorrow as the date to open 1,435 new co-branded Sprint/RadioShack (OTCPK:RSHCQ) stores, more than doubling its company-owned store footprint.
    • Sprint will work as a "store-within-a-store," but previous reporting has its name most prominent on the storefront and in marketing materials, and its staff will manage all mobile device sales.
    • The company says it means 3,500 new jobs and that it will actively recruit a workforce to fill them.
    • Previously: Simpler RadioShack taking form (Apr. 06 2015)
    • Previously: Details emerging on new RadioShack/Sprint retail (Apr. 01 2015)

    Samsung eyes record shipments for Galaxy S6

    • Samsung Electronics (OTC:SSNLFexpects to ship record numbers of its new Galaxy S6 smartphone after it goes on sale tomorrow, but will have problems fulfilling demand for the curved-edged version due to difficulties in manufacturing the screens.
    • The hope is that the launch of the flagship device will help spark a turn around at Samsung following a slump in earnings over the past year or so.
    • The company hasn't disclosed what its record shipment is, although the S3 is reckoned to be its best-selling model. Nomura has estimated that the firm sold 80M units following its launch in 2012.

  27. Any reason ABX is up today with gold falling?  I don't see any news that would indicate the move.


  28. GG gave good guidance and I think it's a relief rally for ABX, especially with $900 production costs:

    • Goldcorp (GG -0.5%), now holding its annual investor day, says Q1 gold production totaled 724.8K oz. and expects all-in sustaining costs at ~$900/oz. (.pdf)
    • GG also reiterates FY 2015 production guidance of 3.3M-3.6M oz. of gold and all-in costs of $875-$950/oz.
    • As previously reported, 2015 gold production is expected to be weighted to H2 of the year due primarily to new mine ramp-ups and the planned mine sequence at Peñasquito

    Prices are simply too low down here anyway:


  29. Phil/mortgages – also some movement from Lending Club (and others) stepping into soak up this shadow demand where banks have failed. Having credit go 7 years is so arbitrary and doesn't reflect the realty of how people can pay for, absorb running into problems with mortgages. That created opportunity for innovative market changes


  30. speaking of IRBT..

    Looks like someone sold 1400 Sept 28 puts for $1.15


  31. TZA/Phil

    Thank you for the recommendation. Forgot to mention the April 15 2015 $10/$15 calls for $0.70 are in an IRA that makes one sell the short position first (April $15s). Based on that what do you recommend?


  32. ABX

    I recently rolled my naked Jan 2016 longs that I was down a third on to the 2017 8/15 BCS for $0.40 so I'm feeling pretty good about the position.


  33. IRBT/Stock – Or,  maybe someone bought them…

    TZA/Hex – I recommend going deeper in the money next time and longer in time so you don't get burned like this.  If you buy the July $9s first, your short Apr $15s are double-covered and then you can sell the April $10s, right?

    ABX/JPH – I would too.  smiley


  34. TLT – Weak.


  35. ALL:  Just did a trade of 100 JCP Jan 17 $5 Puts (short) for $.56 .Return on margin=52.83%. Breakeven $4.44. Stk at $9.16.

              Also did a trade 10 SAFM Nov 15 $55 Puts (short) for 3.20. Return on margin 32.29%. Breakeven    $61.80. Stk at $77.87.


  36. IHS4GOD – I'm showing a margin requirement of 44k on your JCP trade.  What do you show ?


  37. Albo..My margin is $10,600 minus the Proceeds from the sold put of $5,600 = a net requirement of $5,000.

    My platform is OptionsXpress, I'm a level 5 trader and my margin required is greatly reduced from the normal quote. 

    Hope this helps.


  38. Margin/IHS, Albo – People have drastically different requirements from broker to broker and even account to account within a broker.   I can never figure out what the standards are.  

    Treasury yields on the rise after weak 30-year auction

    • The Treasury sells $13B in 30-year bonds, with a bid-to-cover ratio of just 2.18:1. Direct bidders took down only $906M of the auction, the smallest amount in two years.
    • The 30-year Treasury yield is up a big seven basis points to 2.60%. The 10-year yield is higher by five basis points to 1.96%.
    • TLT -1.3%, TBT +2.6%
    • “Recent activity in the Treasury markets and the currency markets is a warning shot across the bow,” says Jamie Dimon in his annual shareholder letter. Referring to the October 15 "flash crash" in Treasury yields – in which the 10-year moved 40 basis points – Dimon says regulators – fighting the last war – have made moves putting down seeds to create the next one.
    • Liquidity in Treasurys – once the most liquid market on the planet – has vanished, says Dimon, with "market depth" today of just $125M vs. $500M in 2007 (the average size of the three best bids and offers).
    • Previously: Dimon: Legal costs to "normalize" in 2016 (April 9)
    • Full letter
    • Currently yield-starved investors in high-yield might find their hunger satiated elsewhere if benchmark interest rates rise, says S&P, meaning junk issuers will have to find other buyers or slow down borrowing.
    • Also weighing against high-yield borrowers are fundamentals, writes Amey Stone: The stronger dollar is crimping exports, thus causing revenue and profit margin pressure.

    WSJ: GE near deal to sell "all or part" of $30B real estate portfolio

    • The WSJ reports GE (GE +1%) is "close to selling all or part of its giant real estate holdings."
    • The conglomerate is said to be talking with Blackstone and Wells Fargo for various assets; sources state a deal could be announced soon. The portfolio, which consists of office buildings, apartment complexes, and other properties, is worth about $30B.
    • GE has been aggressively trying to pare down its finance ops; it struck a deal last month to sell GE Capital's Australia/New Zealand consumer lending arm for $6.3B, andunloaded its Japanese residential real estate business to Blackstone last fall for $1.6B.
    • Shares have moved higher following the report.
    • Canada must stop inter-provincial bickering and political indecision to ensure major energy projects get done before global markets move on to other suppliers, Bank of Nova Scotia CEO Brian Porter says, calling Canada's inability to deliver energy to world markets "detrimental" to the country’s economy.
    • TransCanada's (NYSE:TRP) Energy East project to transport oil to the Atlantic coast and Enbridge's (NYSE:ENB) Northern Gateway pipeline that would transport Alberta oil to the Pacific coast for shipment to Asia would create tens of thousands of jobs with economic benefits spread across Canada, Porter says.
    • Meanwhile, Shell's (RDS.ARDS.B) proposed combination with BG Group (OTCPK:BRGXFOTCQX:BRGYY) likely will result in one fewer liquefied natural gas project being built on the British Columbia coast between Shell's LNG Canada and BG's Prince Rupert LNG.
    • SunEdison (SUNE +1.9%) is building 3 Southern Utah solar plants with a combined 262MW of capacity. Construction is expected to start in the fall, and commercial operations in 2016.
    • Utility PacifiCorp will buy the electricity created by the plants via 20-year purchase agreements. Prices will be at "the utility's avoided cost of electricity, which reflects the utility's costs to purchase or generate the power from other resources."
    • For reference, SunEdison had a 2.6GW project backlog at the end of 2014, and a 5.1GW pipeline. Shares are higher on a good day for solar stocks.
    • Believing "numerous catalysts" exist for the next 6-9 months, BofA/Merrill (Buy) is holding onto its $95 SolarCity (NASDAQ:SCTY) target (71% above current levels).
    • Among the potential catalysts: 1) Clarity on California's solar retail rates and net meteringpolicies. 2) Improved booking/installation mix leading to better retained value. 3) The arrival of 2016 installation guidance (possibly in Q4). 4) The "emergence of a cash flow oriented view of [SolarCity's] operating systems."
    • The firm values SolarCity's existing operating business at $40/share. It assigns a $55/share valuation to its solar development ops, which was forecast to deliver 15.4GW of installations from 2018-2024. BofA sees SolarCity ending 2016 with 3.1GW of cumulative leased installations that will respectively produce $355M and $200M in unlevered and levered cash flow.
    • Also: Though admitting Arizona's policies are a setback - SolarCity has sued a local utility for placing ~$50/month in surcharges on new solar installations – BofA notes "constructive regulatory frameworks" have emerged elsewhere. SA author Simple Investment Ideas argued yesterday Arizona-like utility charges won't hold up long-term.
    • Smaller rival Vivint (VSLR +3.2%) has joined SolarCity in rallying.
    • California's Public Utilities Commission meets tomorrow and is expected to nail Pacific Gas & Electric (PCG -0.6%) with a record penalty of as much as $1.6B for negligence leading to the deadly 2011 natural gas explosion in San Bruno.
    • The potential penalty could put a big dent in the profits of the utility's PG&E Corp. parent company; $1.6B would be roughly equivalent to reported earnings from operations during all of 2014, at $1.65B.
    • A $1.4B penalty package were proposed in September by two CPUC administrative law judges, while a revised penalty of $1.6B has been proposed by CPUC's new president, who also believes the company is too big to address and operate safely.
    • Since the San Bruno explosion, PCG has spent or committed $2.8B of shareholder money on natural gas safety measures, not including tomorrow's expected penalty.

    Walgreens discloses U.S. store strategy

    FBN downgrades EMC, reports weak storage checks

    • "We are rather surprised by the uniformity of negative data points about storage spending in CQ1," writes FBN's Shebly Seyrafi, downgrading EMC (EMC -0.9%) to Sector Perform and cutting his target by $3 to $27. "Reasons provided include the usual 'movement to the cloud' and technologies such as data deduplication and compression hurting storage bit demand growth, but we are also hearing that IT managers are reallocating storage dollars toward security (which our checks note is a very attractive market currently)."
    • Seyrafi also thinks forex's 2015 impact on EMC will be worse than implied by the company's January guidance, which he considers too aggressive, and that competitive pressures from upstarts such as Pure Storage (reportedly planning an IPO) and Nimble Storage are mounting.
    • FBN's call follows March downgrades from Piper and Pac Crest. Pac Crest also reported weak checks, and Piper (also downgraded NetApp) was equally concerned about the likes of Pure and Nimble.
    • With some of FBN's concerns already priced in, EMC is down only moderately; shares now trade for 13x 2015E EPS and 12x 2016E EPS. Q1 results arrive on the morning of April 22.

    This is a big growth story for them:  Autodesk invests $10M in 3D printing firm, gets bullish coverage

    • Autodesk (ADSK +1.2%) has invested $10M in Carbon3D, developer of 3D printing technology (called CLIP) the company claims can significantly increase production speeds thanks to its use of a photochemical process rather than a standard mechanical process.
    • Carbon3D aims to commercialize a CLIP-based 3D printer within 12 months. The startup goes as far as to assert its solutions can make 3D printing viable for mass-production (rather than just prototyping or short-run production).
    • The investment comes via Autodesk's $100M Spark Investment Fund (launched last October), which invests in 3D printing startups and researchers. Autodesk launched itsSpark open-source 3D printing software platform (works with the company's CAD software, which is widely used for 3D printing projects), 11 months ago.
    • Shares are up moderately, and within $2.50 of a February high of $65.00. Berenberg has launched coverage with a Buy rating and $75 target today. AutoCAD 2016 (the latest version of Autodesk's flagship CAD platform) was launched last month.

    Lions Gate in new 10-film partnership with action producers

    • Lions Gate (NYSE:LGF) and its Grindstone Entertainment Group have extended their partnership with Emmett/Furla films for another 10 pictures -- many of which will be released through LGF's new genre label Lionsgate Premiere.
    • Emmett/Furla have partnered with LGF on a number of star-driven action films, including 2008's Rambo, Wonderland, and more recent films like Bruce Willis adventure Fire With Fire and 2013's Empire State with Liam Hemsworth and Dwayne Johnson.
    • Upcoming projects include Robert DeNiro and Kate Bosworth in heist film Bus 657 and CIA thriller The Extraction, again featuring Bruce Willis.

  39. phil,

    looking for oil to go back to low 40's ……was hoping to use sco for the trade….could i get your thoughts to the most efficient way to play………was looking at the may options………..was thinking of just buying a call and spread later or offset a role with a put………………..tks


  40. UNG/Phil

    Have July 14 2015 calls for $0.85 and July 17 2015 calls for $0.32. These were rolled from Feb. Should they be rolled again? If so, to what? Thank You.


  41. IHS4GOD – Interesting, I am also a level 5 trader in some accounts, but not in all.  Now I see the 5k requirement.  I'll request an upgrade in those other accounts.  Thanks.


  42. SCO/Mill – Well, I totally don't believe in this trade but, if you want to place SCO bullish on the premise that oil is going lower, perhaps something like the May $68s for $9, selling the $85s for $4.50 for net $4.50 on the $17 spread.  That has almost no premium and you capture all of the upside of SCO.  The spreads on SCO are very wide, so it's a tricky fill.

    /RB topped out at $1.80 but that Thursday play remains reliable. 

    /NKD at 20,080 at the moment – I have 3 short. 

    Dollar 99.41 making /NKD happy and keeping a lid on everything else. 

    UNG/Hex – Not a good season to be bullish on /NG and July no better than April (worse in fact).  If you want to play UNG long, I'd go for the Jan $11/14 bull call spread at $1.37 as that has no premium, so at least you have a fighting chance.

    This is a pretty strong recovery today considering the Dollar is getting stronger as well.  


  43. The dollar move is affecting so much, what do you think is going to happen here? Can you give a brief synopsis of your comments about what is going on and how it will play out. I know you have written extensively about this, but can you give the highlights which helps me to remember the details because there is so much info that I sometimes mix up the details. Thanks.


  44. UPDATE 1-Allianz's El-Erian says Fed will likely hike rates in September

    Insiders say we're about to see Wall Street do some eye popping M&A deals

    Embedded image permalink

    France opens criminal probe into HSBC

    Warren Buffett: Notes From The Q&A Between MBA, HBA Students

    Emerging market growth slowest since 2009

    Marissa Mayer has to cut 1,400 more jobs just to keep earnings flat, says Morgan Stanley

    EURUSD approaching a 1.05 handle. 140pip move so far

    Another step into the unknown for physicists using the Large Hadron Collider

    The “Dr. Evil” of climate denial: Meet the P.R. exec behind tons of shady, anti-environment front groups

    faces more than a Greek tragedy.


  45. what kind of play for a Wall Street M&A? I'm in the mood to take on some out-of-the-money calls on a good target


  46. Dollar/Craigs – The Dollar has been getting stronger for ages and it had a little pullback and now it's gathering steam for another run at $100.  Note the pullback off the run from 80 to 100 was exactly 96, which was 20% of the 20-point run – so a weak pullback per the 5% Rule and still bullish:

    So this move (to 100) has already been digested by the market in March and it won't matter much now until/unless we blow past 100 (likely) and on towards 105 (25% up from 80).  That would send the Euro down to 100 and cause all sorts of crazy things to happen.   At the moment, the Nikkei is loving this and the Yen is back over 120 (120.65) while the Euro is back down to 1.06 and the Pound $1.47.  

    To me, this indicates that people's reading of the Fed Minutes did not find them so doveish – especially vs our money-printing pals in Europe and Japan.  It's also possible that the Dollar is being manipulated, along with the markets, in this ultra-low-volume week, to prime the pump for a takedown next week that provides cover for Funds to begin selling again while they drop the Dollar to cover their tracks. 

    So, the point is I wouldn't read anything into drastic moves like this occurring in low-volume weeks, what matters is what holds up as the earnings reports begin to come in.  

    M&A/BDC – I still like long OIH as there's a lot of attractive assets there that are very cheap.  We're already at $200Bn this year, that's on pace for almost $800Bn if it keeps up, which would smash all records.

    You can sell the OIH 2017 $32 puts for $3.70 and that's just free money and you can use it to buy the $32/40 bull call spread for $3.90 for net 0.20 on the $8 spread that's $4.40 in the money to start.  We already have 10 of the $30/35 spread in the LTP or I'd add this one right now!  


  47. Speaking of margin, I just ran that trade in TOS for 50 units and the net buying power effect is $19,386 on $40,000 worth of spreads.  That's a very reasonable way to tie up your buying power for 2 years!


  48. And, speaking of M&A in that sector, our Trade of the Year runner-up is getting away now:


  49. OIH / Phil – I think that it's a good place to bet energy. The service companies that will survive this downturn will make a lot of money because the weak ones will have been crushed. Nothing works better for profits than less competition…


  50. From Bloomberg, Apr 9, 2015, 3:18:04 PM

    China’s steel and metals markets, a barometer of the world’s second-biggest economy, are “a lot worse than you think,” according to a Bloomberg Intelligence analyst who just completed a tour of the country.

    To read the entire article, go to http://bloom.bg/1IwBHS9

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

     

     


  51. Well, that was a pretty strong day but the Russell says no, so we'll have to see (next week).  

    I'm off to do touristy things at Niagara Falls.  


  52. Especially when you can buy out your competition for 0% interest, StJ.  I think the surge in deal-flow is from people rushing to get things done before rates kick up – I don't see how this pace sustains.  Also, read the above China article.  Other people are starting to see what I've been warning about.  

    If Bloomberg sent analysts to China, they didn't do it to write a one-pager.  Expect a damning report on China to come out shortly. 


  53. Phil:  BHI I am looking to sell short the Jan 17 55 Puts at $4.00.  What impact will the merger have on these?

    Thanks,


  54. Am new to the site… is there anyone who can share with me a link with the latest up to date versions of the long term portfolio and short term portfolio? Hard to keep track with what is the latest. Thanks in advance.


  55. There is a portfolio tab at the top of the page where Phil sometimes puts the updates but usually they are in the chat on days he reviews them.   I was new recently too and found that skipping the advice to read the last month of posts and comments only delayed my getting up to speed.   


  56. China / Phil – As you know, I probably post one scary chart about China every week so no surprise for me!


  57. Congratulations to me!

    Just put in my two weeks notice with my employer—a friend working for a startup offered me a substantial raise and an equity stake in a new firm.  I'm excited!!!

    The twist:  I think my current employer is going to be offering me a counter offer.  


  58. Congrats, JPH!!!  It's never an easy decision, since you'll be working up in the circus top without a net, but capitalism is a no-guts-no-glory kind of place, so if you like the game, good on you for giving Lady Luck her chance.


  59. Thanks 0×0.  We'll see how things go.  Sounds ~extremely~ promising!


  60. OIH, nice triple bottom and I'm pissed I missed the cherry entry March mid-month. But I'll be coming in tomorrow.

     

    JPH: counter / I ALWAYS take the start-up…


  61. BDC

    I'm going to.  My friend is 35 with a wife and two kids.  He's betting the farm on it and he's already helped build up another startup and the people he's tied with have even more experience.  


  62. JPH1121/Job Change…  Having over 30 years in retained executive search, counter offers happen with regularity. Script your resignation, put it in writing and hand it to the executive to whom you report. Do not try to verbalize your resignation. Good luck..


  63. IHS

    I'm a low level engineer at my current company (a subsidiary of a subsidiary of Raytheon) but we've eaten a ton of brain-drain recently and losing me is going to be another big hit because my department is understaffed.  My direct boss is going to try to get me a strong counter offer but the idea of equity is really awesome and with the information I've been given about the new company makes me wonder what it would take for my current company to keep me.


  64. JPH

    The gamble and the prize is the equity. Risky   but my daughter has been through three start-ups, just now on her 4th. All were winners.  She's happy she took the chance!

    Good Luck



  65. JPH – I second many opinions. There is just nothing like being there at the beginning and see a company grow successfully. And having been there as well, there is also much to learn even in failure! It can be a trying ride though. Good luck to you.


  66. Wow, sounds like a winning strategy there to alienate a lot of groups:

    http://talkingpointsmemo.com/livewire/south-carolina-gay-marriage-women-rights

    The state of South Carolina argued in an amicus brief filed to the Supreme Court that the framers of the Constitution did not intend to force states to allow same-sex marriage, just as they did not prohibit states from discriminating against women in the Fourteenth Amendment.

    As Slate noted, South Carolina Attorney General Alan Wilson argued in the brief that the Fourteenth Amendment, which guarantees equal protection, was only intended to ban discrimination based on race and that the authors "insisted upon leaving untouched those state laws depriving women of basic rights upon marriage to a man."

    I mean, it's 2015 right?


  67. Good animation showing what the earth would look like if all the ice melted:

    https://www.youtube.com/watch?t=33&v=VbiRNT_gWUQ

    Good news Florida – you would not have to worry about talking about climate change!


  68. There has been a lot of criticism of the diplomatic results of the Obama administration and one Dick Cheney is basically making the assertion that the US is in grave danger. But this week is the anniversary of one of the best memos on diplomacy from people working for Dick:

    http://www.vox.com/2015/4/7/8363525/rumsfeld-memo-feith

    The good old days when we had a cohesive diplomatic policies. In 2006 N. Korea conducted its first nuclear test. Pakistan who owns nuclear weapons was a source of proliferation concerns. And of course, most of our allies were pissed at us over the whole Iraq debacle. Outstanding results all around. America was strong then. No wonder Dick misses that time!

    People like Dick Cheney and his friends have one template to resolve all the problems. In case of an economic issue, there is nothing a tax cut can solve. In case of a diplomatic problem, bomb first and let the next administration pick up the pieces!


  69. These numbers are getting repetitive:

    https://www.bespokepremium.com/think-big-blog/record-streak-of-crude-oil-inventory-builds/

    Crude 040815

    Crude 040815 ten weeks

    Looking at the stats, even summer driving season draws only about 20-30M barrels from inventories. We would need to drive a lot to bring inventories to a much lower level.


  70. Does he get his severance in FarmVille credits:

    http://dealbreaker.com/2015/04/man-will-make-5m-for-not-saving-company/

    Mattrick will receive a $4 million severance payment, according to the company, and may get up to $1 million for a 2015 bonus.

    The company tanks under his leadership and the guy gets $5M. Am I the only one who thinks that this is wrong?


  71. From Bloomberg, Apr 9, 2015, 5:00:00 AM


    In San Francisco, California’s most densely populated big city, residents consumed 44 gallons per day in February, while residents of Palm Springs and neighboring desert communities used more than six times as much water, according to the state water board. Photographer: Justin Sullivan/Getty Images

    Cambria, a seaside hamlet of vacation homes and wine bars, offers a glimpse of how far Californians must go to conserve water as the most populous U.S. state struggles through the worst drought in its history.

    To read the entire article, go to http://bloom.bg/1aMM1HS

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


  72. Nice dip on /NKD…good call Phil!!


  73. purple

    http://www.philstockworld.com/2015/03/30/psw-march-portfolio-review-cashing-in-our-long-term-gains/?set_psw_iphone_view=normal

    That was the last formal review.  There may have been some changes, but you will have to read from the date of the post til now to get those.  Been here four years.  Great site, and great group!  Take your time, don't be in a hurry to trade.  There's plenty of time and plenty of trades to be had down the road.  In fact, it's a great time to catch up while the market is flying.  In the next couple months the opportunities should be a lot better than the ones at today's prices. Welcome and good luck!


  74. Thank you folks for the portfolio links!


  75. Phil / Cdn Banks – After your trade on CIBC (CM) the other day, I'm curious how you feel about other Canadian banks, specifically Bank of Nova Scotia (BNS). Asking because the price for BNS may be more suited for smaller accounts. Thanks!




  76. Phil--Maybe I'm missing something, but it would not take much to turn those Levels charts into fierce spitting cobras. Strether.


  77. Good morning! 

    GE is doing a $50Bn buyback – we're really hitting peak insanity here.  

    GE to sell real estate holdings, sets $50 billion share buyback

    • GE decides the time is right to get out the banking business and plans to sell nearly all GE Capital assets over the next 24 months, excepting the financing verticals relating to the company's industrial businesses – GE Capital Aviation Services, Energy Financial Services, and Healthcare Equipment Finance.
    • As part of the plan and as leaked yesterday, GE agrees to the sale of nearly all of the assets of GE Capital Real Estate to Blackstone (NYSE:BX) and Wells Fargo (NYSE:WFC). GE also has LOIs from other buyers for another $4B in property. The total amount of the sales comes to about $26.5B.
    • Under the restructuring, GE expects more than 90% of its earnings will be generated by industrial businesses by 2018 – that's up from 58% last year.
    • For 2015, the company's industrial businesses remain on track to generate operating EPS of $1.10-$1.20.
    • GE has identified the potential to return $90B to shareholders in dividends, buybacks, and the Synchrony Financial (NYSE:SYF) separation through 2018, and has authorized a new buyback program of up to $50B. The company expects to reduce share count to 8B-8.5B by 2018 (it's currently 10B).
    • Shares +1.8% premarket.
    • Source: Press release

    GE(GE) Close to Selling Real-Estate HoldingsTalks under way with Blackstone, Wells Fargo for most of $30 billion portfolio.

    The signal the market is reading is that GE is too cheap but it seems to me more like GE sees another collapse coming and is getting out of Real Estate and, since they don't have a productive thing to do with the $30Bn, they are decreasing their share count so the p/e isn't diluted.   GE is $259Bn (more this morning) so this is a 20% buyback – massive.  

    Shanghai added another 2% last night but /NKD fell back to 19,900 (back at 20,000 now) for a nice win on the /NKD shorts (and I still like shorting at 20K).  Hang Seng was up 1.22% but India flat.

    Asia Shares Heading for Weekly Gain as Nikkei 225 Touches 20,000Asian shares were poised for a weekly advance, after the measure closed Thursday at its highest in almost seven years, as Japan’s Nikkei 225 Stock Average touched 20,000 for the first time in 15 years. The MSCI Asia Pacific Index slid 0.2 percent to 151.60 as of 9:14 a.m. in Tokyo. The measure is headed for a 2.5 percent advance this week.

    Hong Kong Chartist Seeing Unlucky Number EightIn charting the meteoric rise of Hong Kong stocks, Thomas Schroeder says there’s nothing lucky about a number starting with eight. The relative strength index for the Hang Seng China Enterprises Index rose to 83.5 on Thursday, the highest since October 2010, according to data compiled by Bloomberg. Some traders consider readings above 70 as a sign to sell. The equity measure of Chinese firms trading in the former British colony surged 16 percent through yesterday since regulators eased access to the shares for mainland funds on March 27.

    Do Not Worry! Do Not Panic!" Warns Hong Kong Exchange CEO Ahead Of Today's Market Open

    Chinese Investors Should Be in Awe of Stock Market. Stock market won't always rise and isn't an ATM machine, the official Xinhua News Agency says in an article on Thursday. A healthy bull market won't neglect fundamentals of companies.

    Europe is enjoying their morning with Germany popping 1.24% into lunch and that's got everyone else up about 0.4% so far after a flat open.  Still a huge relief rally because Greece made a $100M debt payment without defaulting (only $365,000M more to go!) though, as the WSJ notes:

    In the background, the European Central Bank continues to pump €60 billion a month into debt markets under its stimulus program, driving down yields and pushing investors into equities in search of better returns.

    “Equities remain the asset class of choice as long as central banks continue to provide the liquidity support,” said Ian Williams, economist and strategist at brokerage Peel Hunt.

    So why is all this money heading to our Market?  Because, from the perspective of an EU investor, the S&P isn't flat for the year, it's up over 15% when priced in Euros, so of course they are taking all that free money and pouring it into US equities and thus European and Japanese investors are becoming the ultimate bag-holders for US equities and our strong Dollar (99.82 this morning) only makes them want to buy more:

    • Central banks cut their euro holdings by the most on record last year to help mitigate losses ahead of the ECB's QE. The euro (NYSEARCA:FXE) now accounts for just 22% of global reserves, down from 28% before the EU's debt crisis five years ago, according to the IMF.
    • "As a reserve currency, the euro is falling apart," says SocGen's Daniel Fermon.
    • The numbers may be music to Mario Draghi's ears – a cheaper currency is theoretically a more competitive one – but Mizuho suggests the euro's slipping popularity suggests a more lasting loss of confidence in the EU economy.
    • The euro is lower by 0.5% today to $1.0602.

    Friday's economic calendar

    • Flat not long ago, DJIA (NYSEARCA:DIA) futures are higher by 0.2% as GE rises 2.6% premarket after setting plans to rid itself of nearly all of its banking operations.
    • S&P 500 (NYSEARCA:SPY) futures are up 0.15%, and Nasdaq 100 (NASDAQ:QQQ) 0.1%.
    • Europe's posting modest gains, and Hong Kong continued its tear overnight, up another 1.2% and more than 8% for the week.
    • The 10-year Treasury yield is down one basis point at 1.95%, gold is up $10 per ounce to $1,204, and oil is flat at $50.81 per barrel.

    US warns of ‘increasingly unbalanced’ global economy. The US Treasury has stepped up calls for big economies, including the euro area and Japan, to boost demand as it warned the global economy was becoming “increasingly unbalanced”. In a semi-annual report to Congress, the Treasury urged euro area governments and Tokyo not to rely solely on monetary policy to lift growth, while pressing South Korea to reduce interventions in currency markets and let the won rise.

    Dealers expect first Fed rate hike in September – NY Fed survey. U.S. primary dealers now expect the Federal Reserve to begin raising rates in September, rather than in June, according to the New York Fed's latest regular survey. The survey, taken as U.S. central bankers prepared for their March 17-18 policy-setting meeting and published Thursday, also found that economists at the top banks see a receding chance that the Fed will need to reverse course soon after it begins to raise interest rates.

    When You Think The Financial World Can’t Get Any Crazier… This Happens

     

    Spelling Out The Big Reset

    19 Signs That American Families Are Being Economically Destroyed

    Wall Street's Biggest Banks May Have To Make Good On $26 Billion In Oil Hedges

    "I’m The First To Say: I Can’t Do It" – The Energy Junk-Bond Implosion Just Claimed Its First Victim

    Global PC Shipments Decline as Corporate Spending FadesWorldwide personal-computer shipments fell 5.2 percent in the first quarter as corporate spending that helped slow declines last year tailed off, market researcher Gartner Inc. reported. About 71.7 million units were shipped in the quarter, down from 75.7 million in the same period a year earlier, Gartner said Thursday in a report. Market researcher IDC reported a wider decline, finding that 68.5 million units were shipped, a 6.7 percent drop. IDC said it was the lowest number of PC shipments since the first quarter of 2009. ?

    • Citi upgrades Netflix (NASDAQ:NFLX) to a Buy rating from Neutral.
    • The investment firm likes the "reasonable" entry point at Netflix's current share price with investors getting the potential for international growth in new markets almost for free.
    • The strong content at Netflix also sets its apart from other streaming rivals, note analysts.
    • Citi fires up a price target of $525 on NFLX with a long-term upside call of $750 or higher.
    • NFLX +2.43% premarket to $450.

    FAA Calls Out ‘Systemic’ Hazard at UnitedRepeated violations regarding pilot qualification, scheduling requirements prompt regulator to step up oversight.


  78. BHI/IHS – If the merger happens sooner than 2017 at more than $55, you cash out early, that's all.  If the merger falls apart (and Europe has been killing some deals as they still don't like big monopolies), then you own the stock at net $51, so make sure you REALLY want to do that.

    Welcome Purple!  I'm on vacation this week but back in the command center on Monday and I'll certainly do another portfolio update next week.  

    Thanks Surf. 

    China/StJ – No surprise to us but seems the rest of the World and China itself remain unaware.

    Congrats JPH, sounds exciting.  The chance to go work with a good startup AND get a raise is rare indeed.  As IHS noted, best move is to break up as gently as possible with old co.  Maybe tell them you can consult a bit on nights and weekends and help them transition as smoothly as possible but you have an ownership opportunity you can't turn down.  Now, if your old boss offers to make you a partner/stock options – THEN you'll have some decisions to make… 

    Big Chart – Looking strong, can't be denied.  1,260 is mission-critical on /TF and, of course, 5,000 will be the next big test over at the Nasdaq. 

    2015/StJ – Not in South Carolina!

    Oil Inventories/StJ – True it's "only" going to draw 30M but what will that do to prices while it's happening.  We're only betting on $60 oil by July and after that I expect we head back down again – the inventory moves and likely reactions and timing are all baked into our positions.  

    FarmVille/StJ – Maybe it wasn't saveable?  I know I wouldn't have gone over there without an iron-clad guarantee that I got paid no matter what.

    Thanks Jeff.  It's easy to call a first rejection off big, round numbers like that.  Now the trick is to see how the rest goes. 

    Thanks DC.  

    BNS/Pfehl – Another good one but they do more commercial lending (beware oil) as well as Asia, so it will take me more time to get comfortable with their mix than CM, which is much more narrowly focused on Retail Banking.  Also, Toronto clearly vibrant and growing and I'm just not sure what is going on in Halifax.  Worth discussing so feel free to help gather data.  

    LOL Scott:

    Embedded image permalink

    Great NKD chart too:

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    Cobras/Streth – The Cobra Pattern is usually more of an M pattern than a W pattern.  Not a small distinction.  This is beginning to look more like a consolidation UNDER the lines the market will break over and only fundamental logic prevents me from betting that way – which is something we'll have to start ignoring if earnings are BTE over the next few weeks.    


  79. /ES a fun short at 2,090 with tight stops above.