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Wild Wednesday Markets – Dollar Drop Offsets Trump Dump

Wheeee, what a ride! 

We had a nice little dip yesterday as it was revealed that Donald Trump Jr, Jared Kushner and Paul Manifort clearly committed Federal Crimes (campaign finance laws) which say:

 "A foreign national shall not, directly or indirectly, make a contribution or a donation of money or other thing of value, or expressly or impliedly promise to make a contribution or a donation, in connection with any Federal, State, or local election.

"A solicitation is an oral or written communication that, construed as reasonably understood in the context in which it is made, contains a clear message asking, requesting, or recommending that another person make a contribution, donation, transfer of funds, or otherwise provide anything of value."

Image result for trumpgateThe cover-up is now incidental to the actual crime and now the question is whether the President knew what his campaign manager, son and son-in-law were doing or if he was completely oblivious, as he now claims.  Anything other than completely oblivious is an impeachable offense for Presdident Trump so we'll have to hope it's a coincidence that:

"On the same day Donald Trump Jr. confirmed the meeting with Mr. Goldstone—two days before the meeting took place—the elder Mr. Trump at a rally promised to give a “major speech” days later that would address “all of the things that have taken place with the Clintons.”

The "good news" is the markets were saved, for the moment, by a weakening Dollar, which dropped 0.5% as International Traders lost even more confidence in the United States of America and it's Government.  Dropping the value of the Dollar instantly makes things you buy with a Dollar, like stocks and gold, more expensive (in Dollars) and so the Gold (/YG) trade idea we had for you in yesterday morning's PSW Report made a quick gain of $322 per contract on the $10 move higher (rejected at $1,220) so you are welcome for that AND the ABX trade, picked up a quick $250 (2.5%) as well – not a bad day's work! 

We called for a short on the Nasdaq (/NQ) at 5,700 and the flash crash took it to 5,665 at $20 per point, per contract but, realistically, you would have to be a robot to catch that.  Call it 5,680 for a $400 per contract gain there and flipping to the Russell bullish (/TF) at 1,405 (as called in the Morning Report, 7 hours before it happend) yielded another $500 per contract winner at 1,415 and now we're looking for another good short – but no targets yet as we're waiting on Yellen.

Oil is going to be interesing today as we popped back up to the $46 line, where we don't mind shorting it (tight stops above).  $46.20 is the 5% line off $44, so we'll watch that closely and we expect retraces of 20% of the $1.20 move so we'll call it $46 and $45.75 which makes $45.75 our primary target and below that is big trouble for /CL.  

Last night's API Report showed a huge 8.13Mb draw of oil after a 5.76Mb draw last week and that has the bulls all excited but this is for the week ending July 7th and it would be TRAGIC if Americans did not put some gas in their tanks for July 4th weekend.  In fact, the gasoline draw this week was an anemic 800,000 barrels after 5.7Mb last week so, once again, demand did not match supply (they used the oil to make gasoline that no one wanted) and that mismatch will make Gasoline (/RB) a nice short at $1.535 with a stop over $1.54 ($210 per contract) and hopefully we'll make a nice $500 per contract at $152 or less.

Though traders don't seem to have realized it yet, OPEC just figured out that they are still pumping 900,000 barrels per day too much oil – according to their own monthly report.  As I said at their last meeting, the group needed to cut another 1Mbd to keep oil over $45 and this report says I was off by 100,000 barrels but my premise is right on the money and we expect very weak pricing into the fall if OPEC doesn't take drastic action.

"Growth in global oil consumption will be stable next year, at 1.26 million barrels a day, or 1.3 percent. However, the increase in supplies from outside OPEC will accelerate, to 1.1 million barrels a day, or about 2 percent, with most of the expansion coming from the U.S."

We'll deal with whatever Yellen says to Congress this morning in our Live Member Chat Room.

 


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  1. What happens if all your targets are met seconds after posting them and before I even read about them?


  2. What do you mean, I just got back from lunch?


  3. Rcs800 – one of the things about this site is that it teaches you to trade rather than a 'follow Phil' type site.  There are always loads of trades around and its all about trading what you are comfortable with.  If the trade pops before you can get to it then just wait.  Another opportunity will come along.


  4. How will I know what the trades are and when? How will I be able to identify?


  5. Good Morning, everyone!

    Unfortunately we encountered some technical issues while testing for our European Episode so we will not be having our usual webinar this week. 

    We will have our webinar next week when Phil's back, however it will be on Thursday 7/20. (After that we'll go back to our regular Wednesday schedule.)  


  6. And good morning to all, by the way!

    I don't see much movement, things are higher and we'll see where they stop.  /RB did take a quick dip but hopefully it comes back if you missed the first short.

    These aren't once in a lifetime opportunities, we find something new every day!

    What and when/Dilbert – As noted by Malsg above, the idea is to learn how to identify trades you feel comfortable with.  I would STRONGLY suggest using a paper trading account for futures for MONTHS before risking money as they are very volatile and dangerous. 

    The basics are simple however, we look for a reason to trade (like today's oil report coupled with a weak demand report and strong supply report) and, because we have about a 5% move up, we don't expect oil to go past $46.20 and we calculate our retraces to be $45.95 (the exact number) and $45.70 so we want to play that zone short.  

    As a general rule, we know oil hits serious resistance at 0.50 lines and 0.00 lines so $45.95-46.00 is around where we want to take a short bet but we don't want to risk much over $46 as we could quickly hit $46.20 and lose $200 per contract.  

    So we take a poke short at $46 and because we're keeping a narrow range, we keep tight stops on any gains as well, especially if we cross that $45.70 line, which is right were we fell to a few minutes ago.  So we take that $200 profit off the table and now we look to play again only if $45.70 fails or back up around $45.95-$46.  

    Of course, the 10:30 inventory report could give us a very quick $1 ($1,000) move in either direction so this is not a play you want to stay in through the report if you can't laugh off that kind of loss!  

    On the indexes, 2,440 on /ES is our current shorting spot and we can see that's going to line up with /YM 21,500, /NQ 5,775 and /TF 1,425 so we WANT to short /ES at 2,440 as long as the others aren't breaking over and if ANY of them break over, we stop out of /ES and wait for at least 2 of them to cross back under and then short the laggard.  

    Now, keep in mind this is the kind of trading that requires YEARS of experience so of course you might not be comfortable with all that strategy planning the same way you would be left standing at the huddle after I said "gun double right close halfback right 200 scat triple slant thunder on one.” – If you skip the practices, don't study the playbook and jump right in in the middle of the super bowl – you are likely to do poorly and probably some big guy will break your leg!  

    Like any rookie on the sideline, you need to practice and practice and watch the game films so you can see what we called and what actually happened as the play unfolded.  That way, when you are actually in the game and making a play – you'll have some idea as to what to do when a certain situation pops up.  

    Sorry about the Webinar.  As I said last week – I can't imagine how all that crap could work between here and the US using ordinary connections.  Somebody get me a land line!  

    I have TV at the Nasdaq on Weds next week so we'll do our Webinar on Thurs. 



  7. I hope no one is worried about Don Jr… Everybody will eventually be pardoned by President Pence and get on with their regular life. Little Joey will spend 3 years in jail for selling some MJ but the Trump family will enjoy their freedom after trying to sell out the entire country. The land of the free (rich people)…


  8. Good Morning.


  9. Sorry Latch :-)


  10. 4 signs of a bubble:

    http://awealthofcommonsense.com/2017/07/4-signs-of-a-bubble/

    He said he’s not worried about a bubble at the moment but seeing 3 out of these 4 conditions being met would be a warning sign. One of the reasons we’ve yet to witness euphoria in this bull market is because the crash is still fresh in people’s mind.


  11. Technical issues?…..?Sounds like someone's on vacation….. ;)


  12. Phil – "gun double right close halfback right 200 scat triple slant thunder on one."

    BLACK 59 RAZOR! BLACK 59 RAZOR!  Sorry for the flashback and Out.


  13. Nat, is that Stockbern's phone #? He has a razr… lol


  14. Geez, it's 2:!0 – are they ever going to open those US markets?

    Nas is right in that mini death cross zone but it popped over this morning so all systems looking good as everyone is bouncing off the 50 dma.  

    Technical/1020 – Couldn't get it to work but, since it's not working and I am on vacation – I'm meeting the family for dinner around 1:30 – so you have me until then! 

    FCX/Albo – I didn't notice they got cheap, great down here:

    • Sell 10 2019 $12 puts for $2 ($2,000) 
    • Buy 10 2019 $12 calls for $2.80 ($2,800)
    • Sell 10 2019 $17 calls for $1.20 ($1,200)

    That's a net $400 credit on the $5,000 spread so your worst case is netting into 1,000 shares for $11.60 and your best case is a $5,400 (1,350%) gain at $17+ and, of course, you are starting off $2,900 in the money!  

    Great chart, StJ!  Shows the power of financial engineering to fix almost anything.


  15. Phil – "It's "OK" now to win at all costs, even if it means working with enemies of the state or even terrorists, if it suits our purposes.  Arms for hostages arming the founders of ISIS – where do we sign?"

    Oh brother from another mother, you are buckin for a full cavity search upon re-entry. LU2 and do request the powdered gloves.  It's been "OK" even if it means working with enemies, terrorist groups and corporate interests to legally and covertly disenfranchise, vilify, incarcerate and murder millions of our own citizenry.  Just a small sampler of inconvenient truths… and Out.


  16. Good post Naybob.

    Europe is now up 1% heading into the afternoon, talk about either no Brexit or some sort of non-Brexit that keeps almost everything in place but the EU Government.  Seems very unlikely to me but the markets here are loving it. 


  17. ~~AMZN – Amazon says sales on July 11 surpassed Black Friday and Cyber Monday, making it the biggest day ever in Amazon history.


  18. Phil,

    Re: oil inventories….API showing a big draw! So we are exporting more finished refined product causing inventory to drop , suggesting to the general sheeple that demand is way up, so oil and RB go up…..isn't that just a shell switching game feeding us crap info….They are just storing it elsewhere….or am I just wet behind the ears! Thanks as always




  19. America’s Aging Infrastructure: Waterways Face Critical Juncture






  20. FCX – Phil, I am showing "Buy 10 2019 $12 calls for $3.80, not $2.80.  Can Options pricing change this quickly or is this a typo?  

    Europe – Did you notice whether anyone across the pond uses LINE (chat app)?  It was a very popular app in Asia.    


  21. Looks like someone is intent on getting out of CMG before earnings.


  22. Phil – A positive article on FTR that seems as if you could have written it. ;-)

    https://seekingalpha.com/article/4087041-frontier-reverse-split-fears-overblown?isDirectRoadblock=false



  23. The Trumps Embraced a Russian Plot


  24. 10 demographic trends shaping the U.S. and the world in 2017



  25. Visa Takes War on Cash to Restaurants



  26. Josef,

    FCX Jan19 12 long call is trading for 2.85 would not go up 1$ in no time


  27. Josef however the Jan19 10 call is about 3.90 more likely you should buy the 10 call


  28. Thanks Yodi.


  29. Albo – biggest day in AMZN history – lets break out the hats and hooters


  30. Europe now up 1.5% at 3:15.

    Indexes over our expected highs, we have to wait for 2 or 3 to cross under and short the laggards or, if they keep going higher, we'll have to set new targets.  Don't try to force trades!  

    Oil/Jasu – API and EIA don't always (or usually) agree so we have to piece together a picture from the various things we see.  Since my view has long been that we're producing 1Mb/d too much and today they confirmed 900,000/d too much – I'm pretty confident with my general forecast ($40 or lower in Oct) unless something major changes. 

    Meanwhile, we're getting another chance to short but much more dangerous with inventories coming up.

    Stopped at $46.20 on the dot – how can we not short that? 

    Lines up with $48.50 on Brent so we stop out if Brent crosses over.  

    $1.54 even better than before for another short.

    FCX/Joseph – The last sale went off at $2.75 and the bid is $2.65 and the ask is $2.87 and, logically, what idiot would pay $3.80 for a $12 call?  Time to get a new broker as these guys are ripping you off!

    LINE/Joseph – No but my cousin insists I use What's App to text her rather than just texting.  

    FTR/Albo – Great, now we have to wait for another 999 guys to wake up…  blush

    Teleportation!   That is my favorite new, cool thing.  Not good for Trump's border wall if Mexicans can just appear at their jobs any time.  

    Hats and hooters/Naybob – What are "Failed restaurant concepts for $200?"  


  31. FTR  -  Sold some Feb 12 puts for 3.5 yesterday…  seems like a good entry if it is put to me, if not starts to 'dig me out of the hole'. still looking to sell some covered calls on my position.


  32. Phil – Imagine the Fox Talking Heads reaction if they discovered Mexicans would be both 'in Mexico' and 'in the U.S' at the same time.  Ah, a Quantum Immigration Policy.


  33. Big draw in oil – 7.6Mb!  Gasoline down 1.6Mb but Distillates up 3.1Mb so a little disappointing net but not terrible.  I still like my shorts but it might be a rough ride and still use that $48.50 line on Brent as an on/off signal.

    FTR/Batman – Tempting vs a DD for us.  Lowers our basis and commits us to the $12 we wanted to DD at anyway.  But, on the other hand, $13.75 today so maybe we get to $12 anyway so I'll  wait, as planned, until next week before deciding.

    Quantum/Malsg – Maybe that's what Trump means when he said he did and did not meet Putin before?


  34. Phil,

    Do you worry about weekend run up in /CL and /RB especially in light of the report? I bailed b/c I think they push it higher


  35. Phil /CL > Nice call – Be careful in England, they burn witches and sorcerers :)  


  36. My turn….FU /CL and /RB…..I should have stuck it out. Over thought it….great call Phil as usual


  37. The Donald has clearly mastered the Observer Effect.  I think that is what happens with Tesla.  Every time we look at the stock it goes up!


  38. Phil, can you give me your thoughts on FTRPR vs FTR.  It looks like FTRPR will pay 45% out in dividends between now and June 2018, and then the shares will convert into FTR shares.  The details are outlined here:

    http://files.shareholder.com/downloads/AMDA-OJWDG/4790869032x0x836296/46147CD3-88D9-40C3-BF59-42F4CB070AAA/FTR-Mandatory-Convertible-Pref-Stock-description-July-2017.pdf

    It seems to me that the conversion rate seems fair considering how much the dividend will reduce my basis on the new shares.  I'm convinced that FTR is not on the verge of bankruptcy (far from it), so the preferred dividends should be safe for at least the next year.  I'll still probably wait until next week to see if it keeps going down, I just wanted to see if you saw any flaw in my logic.


  39. Brexit / Phil – There might be some return to the reality that Brexit might not be the great deal that was promised to everybody. Not certain that a new referendum today would go the same way and that feeling is probably permeating to the political apparatus now.


  40. Out of /CL and /RB.   Great call Phil!  

    Rip-Off/Phil – I concur, several times you have posted trade ideas, the price has been significantly different.  I am in the process of setting up TOS, cos I am digging this Futures Trading.  And, my current platform is NOT user friendly for that.  



  41. Wow, very nice dive in Oil and Gasoline – Congrats to all the players on that one!

    See, this stuff's not hard – I'm doing this on vacation too…  wink

    Weekend/Japar – I HOPE there's a run-up so we can short them again.  I didn't bail because my premise was holding, the report was a relative (see Einstein) disappointment compared to the API report and, as I said earlier – if they can't get a great draw on July 7th – when will they?

    Burning/Aquila – Only the mediocre ones – the good ones see them coming a mile away!  devil

    Thanks Japar.  Gotta get used to riding out those scary spikes and, of course, once $46.20 (5% Rule) proved to be resistance – it was a lot easier to play for the $1,000 drop (and greedy if people don't take that and run – by the way).  

    TSLA/Malsg – Well, $380 to $304 is $76 (and 20%) so bounces are $15 so $319 (weak) and $334 (strong) is what we watch.  Taking 4 days to fail strong is not really that impressive.  

    Of course it's not a failure unless the retrace of the $30 strong bounce fails it's own strong line at -$6 so, per the 5% Rule, $328 is the strong retrace of the strong bounce and below that means we'll test weak at $319 and above that means we're likely to move higher.  Then we have to factor in how many idiots buy TSLA on a dip, which probably exaggerates bounces – keep that in mind as well.

    FTRPR/Palotay – I don't remember at the moment but there was something I didn't like about the wind-down provisions.  You really don't have any better standing than an ordinary shareholder and, on the whole, I'd rather own the stock and sell options for my bonus 10%.

    Brexit/StJ – Most people here would vote against it simply because it's become such an annoyance.  Also, younger people are furious about the prospect of having their ability to work and play on the continent hampered – it's like something big is being taken away from them.

    Thanks Joseph and, seriously, if you got a $3.80 quote for those $12 calls – it's hard to imagine how badly your broker is cheating you on a daily basis.  

    Formic acid/Tangled – Human ingenuity is an amazing thing – if only we encouraged that instead of all the petty BS we focus on.  

    Yellen restoring confidence in the Dollar.


  42. Jabob – You're notably absent today.  Guess you're licking your wounds after being taken out to the wood shed yesterday.

    And Phil :

    https://www.youtube.com/watch?v=F7AQkui_fcA


  43. albo--hilarious..


  44. why is imax dropping again?


  45. DE with a nice slide


  46. Jabob, there's this.

    ~~IMAX downgraded to Mkt Perform from Outperform at Barrington Research


  47. thanks albo..

    looks like the FTR sellers are back again.. geez


  48. Bored traders spending time with kids, playing golf, tindering

    • Just when many had thought the years-long decline in trading revenue at the big banks was over, analysts expect the five largest to report an 11% Y/Y decline in Q2 to $18.4B – the lowest Q2 amount since 2012.
    • Weak revenues means sluggish activity, which means a lot of traders with time on their hands. "What’s frustrating people more than anything is the lack of movement,” says the head of Treasury trading at MUFG Securities, hoping for some sort of summer blowup.
    • Q2 earnings season begins on Friday.

    Stocks, bonds, gold gain as Yellen testifies

    • Her prepared remarks finished with, Janet Yellen is taking questions at her semiannual congressional testimony. Live on C-SPAN.
    • The FOMC, she says, is "well aware" that inflation has been running below its 2% target for years, and the dangers inherent in that. Labor markets continue to strengthen, though, and that should put upward pressure on prices. It would be "premature" to conclude that we're not on the path to 2%.
    • As to whether the Fed might consider lifting its 2% inflation target, that's not under discussion, says Yellen.
    • Balance-sheet normalization: "Should begin this year … relatively soon."
    • In addition to the "uncertainty" over higher inflation, traders are focusing on another opening statement line in which Yellen said the Fed Funds rate doesn't have much farther to go before reaching a neutral policy stance.
    • Bonds continue higher, with the 10-year yield down 5 basis points to 2.31%. TLT +0.7%TBT -1.4%
    • Gold is up 0.6% to $1,222 per ounce.
    • The S&P 500 is ahead 0.6%.

    Yellen notes "uncertainty" over inflation – gold and bond prices rise

    • Fed Chair Janet Yellen's prepared remarks for her 10 AM ET congressional testimony are out.
    • While she repeats past remarks about recent low inflation readings being transitory, she says there's "uncertainty" about how inflation will respond to reduced slack in the economy.
    • The Fed Funds rate, she says, won't have to rise much further to get to a neutral policy stance, though factors currently holding down the neutral rate are likely to diminish over time.
    • Gold (NYSEARCA:GLD) bulls like what they hear, sending the metal higher by 0.75% to $1,225 per ounce. Bond (TLTTBT) bulls like it too, with the 10-year Treasury yield falling a full five basis points to 2.31%.
    • Stock index futures (SPYQQQDIA) add to gains, with the S&P 500 now higher by 0.4%.

    Bank of Canada raises rates; loonie gains

    • The Bank of Canada tightens policy for the first time since 2010, boosting its benchmark overnight rate by 25 basis points to 0.75%. The move was not 100% expected, but not too much of a shock either.
    • "The factors behind soft inflation appear to be mostly temporary," says the bank in its policy statement.
    • The loonie (NYSEARCA:FXC) is strengthening, now higher by 0.4% vs. the greenback at $0.7776.

    Oil majors face downgrades if crude prices stay below $50, S&P says

    • The world's big five oil companies would face increased credit rating downgrade pressures if crude prices stayed below $50/bbl on average until year-end 2018 and they did not compensate by cutting costs, S&P Global says.
    • S&P currently has negative outlooks on Exxon Mobil (XOM +0.5%), Chevron (CVX+0.5%) and Total (TOT +0.4%); the other global majors are BP (BP +1.2%) and Royal Dutch Shell (RDS.ARDS.B).
    • "If oil prices persistently trend below our price assumptions ($50/bbl on average until the end of 2018), downgrade pressure for many ratings would increase without material and sufficient further cost and capex efficiencies, disposals, or other countermeasures against weak credit metrics for a sustained period," S&P says.

    Competing bid for Oncor could mean Buffett walks

    • "It is quite likely that the Berkshire (BRK.ABRK.B) transaction will not close, given the lack of support from the debtors’ creditors,” says an attorney for Paul Singer's Elliot Management.
    • Elliot, of course, is the largest creditor of Oncor's bankrupt parent, Energy Future Holdings, and has promised a competing bid for Oncor.
    • If past history holds true, Berkshire will walk away (while taking a $270M breakup fee), and move on to the next deal. "We don't participate in auctions,” wrote Warren Buffett in his most recent annual letter.
    • A recent energy-related example would be Berkshire's 2008 bid for Constellation Energy. The Oracle pulled the offer and took a $175M breakup fee after another player entered.

    Northern Dynasty +13% as EPA moves to roll back Pebble mine restrictions

    • Northern Dynasty Minerals (NYSEMKT:NAK+13% premarket after the EPA said it had begun a process to withdraw proposed restrictions on the development of the Pebble Mine in Alaska.
    • The move follows a settlement reached in May between Pebble Partnership and the EPA that allows the project to proceed into normal course permitting under Clean Water Act rules and other regulations "unencumbered by any extraordinary development restrictions."
    • NAK says it is now seeking a new major funding partner for the Pebble Project to help finance construction of a mine it says is the largest undeveloped gold resource in the world.

    Economists urge Trump not to impose new steel tariffs

    • Nearly every living former chair of the White House Council of Economic Advisers sign a letter warning Pres. Trump that imposing new steel import tariffs likely would harm U.S. relations with important allies.
    • “The diplomatic costs might be worth it if the tariffs generated economic benefits. But they would not,” the economists write. “Additional steel tariffs would actually damage the U.S. economy.”
    • The letter also notes that the U.S. maintains more than 150 countervailing and anti-dumping duties on steel imports, including some as high as 266%.

    Most advanced self-driving car

    • Audi (OTCPK:AUDVF) has officially launched its new flagship A8 saloon, a vehicle the industry is calling the most advanced self-driving car with "Level 3" autonomous capabilities.
    • "The driver no longer needs to monitor the car permanently," Audi declared. "They can take their hands off the steering wheel permanently and, depending on the national laws, focus on a different activity… such as watching the on-board TV."

    Analysts not hog wild about Harley-Davidson

    • Bernstein lowers Harley-Davidson (HOG -1.7%) to a Market Perform rating after having the motorcycle stock set at Outperform.
    • Analyst David Beckel warns of a "secular erosion" in the U.S. for motorcycle demand, a far cry from his previous expectations.
    • The demographic shift to a higher mix of Generation Y consumers in comparison to Baby Boomers is seen as a negative, while demand for the Milwaukee-Eight (M-8) bike has disappointed.
    • Bernstein's price target on Harley goes to $55 from $62.
    • In a separate note, Goldman Sach says its channel checks on Harley's Q2 retail sales show a flat to down performance in June. HOG is rated at Neutral, with a lowered price target of $51.
    • Sources: Bloomberg and Benzinga

    Piper Jaffray names restaurant sector favorites

    • Piper Jaffray reminds that the restaurant sector is due to lap quarters that included the Olympics and U.S. election last year. The two major events disrupted restaurant traffic a year ago as TV viewing popped.
    • Piper's favorite sector plays are (1) Chipotle (NYSE:CMG) for its ongoing recovery efforts; (2) Darden Restaurants (NYSE:DRI) due its back-to-basics operational approach that it sees driving above peer momentum within the casual dining space; (3) Habit Restaurants (NASDAQ:HABT) for the brand's everyday value positioning and unit growth profile and (4) Dave & Buster's Entertainment (NASDAQ:PLAY) for the company's differentiated entertainment offering, steady unit growth profile, and growing cash flow.
    • Related ETF: MENU.v

    Talking Netflix subscriber growth

    • A detailed UBS study of app downloand and content tracking indicates that Netflix (NASDAQ:NFLX) had strong momentum in Q2.
    • The firm points to "substantial improvements" in Europe in particular.
    • Guidance from Netflix is for 600K U.S. subscriber adds in Q2 and 2.6M international adds, marks that UBS thinks could be topped.
    • Separately, a poll by Reuters/Ipsos shows that password sharing is holding Netflix back from seeing even more growth based on the 20% of young adults who say they share password to stream shows. "If Netflix goes from a 30% revenue growth story to a 10% story, there is absolutely going to be more focus on their leaving money on the table," observes Raymond James analyst Justin Patterson.
    • Sources: Bloomberg and Fortune
    • What to watch: Netflix is due to report earnings on July 17. The company's earnings conference call can be watched on YouTube.
    • NFLX +1.05% premarket to $155.85 vs. a 52-week trading range of $84.50 to $166.87.

    Ad CEO says Facebook "successfully countering" Snap

    • Advertising CEO Martin Sorrell says his WPP could invest $200M in Snap (NYSE:SNAP) ads this year, but that number looks small compared to the over $2B planned for Facebook (NASDAQ:FB) and the up to $6B for Google ads.
    • Sorrell tells CNBC that attendees at the West Coast app developers’ conference “came away from saying that Facebook was very successfully countering Snap.” 
    • Sorrell called yesterday’s Morgan Stanley downgrade a “seminal moment” for Snap. 
    • Sloy Dahl and Holst CIO and portfolio manager Paul Meeks view on investing in Snap? “I think Facebook is the one to buy, and if you think about Snap, slap yourself and just buy some more Facebook.”   
    • Snap shares are down 1.03% to $15.31, nearly 10% below the IPO price.
    • Previously: Morgan Stanley downgrades Snap; shares down 3.8% premarket (July 11)

    NBCU upfronts: TV ads up 8% to nearly $6.5B

    • NBCUniversal (CMCSA +1%) reports its upfront efforts brought 8% volume gains, to almost $6.5B in advertising commitments for the upcoming TV season.
    • Rates rose in the high single digits across dayparts at NBC's broadcast network as well as at NBCU's cable nets. NBC was said to be looking for low double digits in prime time rate gains.
    • That's excluding major events ahead, including the Super Bowl, Winter Olympics and World Cup.
    • Digital video sales rose 42%, NBCU said, and the group charged with working with clients on branded content help bring in 26% more business Y/Y.

    Jefferies lowers IBM price target

    • Jefferies lowers IBM’s (NYSE:IBM) price target by $10 to $125 and maintains an Underperform rating.
    • Analyst James Kisner cites checks showing AI adoption difficulties despite the company’s strong cognitive computing platforms.   
    • Kisner says IBM’s “outgunned in the war for AI talent”, a problem that will only worsen, and that returns on investment won’t exceed capital costs. 
    • Source: StreetInsider
    • IBM shares are down 0.13% premarket.

    BofAML expects iPhone shipments to drop 11M in FY17

    • Bank of America Merrill Lynch lowers its Apple (NASDAQ:AAPL) iPhone shipment estimates for this year by 11M after a supply chain visit, according to CNBC.
    • Analysts Wamsi Mohan and Stefano Pascale expect iPhone 8 shipment delays of 3 to 4 weeks due to tech issues with fingerprint and 3D sensors in the premium model expected to launch this fall. 
    • The analysts cut the September quarter shipment guidance by 11M and the December quarter by 6M. For FY17, the analysts expect 11M fewer shipments overall totaling about 108M after the cut. 
    • Better next year: the analysts do expect iPhone shipments to perk back up to 243M shipped units in FY18.       
    • Previously: 'Panic' as Apple works on next iPhone (July 12)

    'Panic' as Apple works on next iPhone

    • June was a tense month for the engineers and designers on Apple's (NASDAQ:AAPL) iPhone team with "a sense of panic in the air," a source told the Fast Company.
    • The group is working around the clock to fix software problems related to wireless charging and 3D sensing.
    • While new iPhones are typically released in September, some industry watchers think the next model might appear as late as November.

    Tablet shipments expected to remain weak in 2H

    • Tablet shipments will remain weak in the second half of this year, according to DigiTimes supply chain sources.
    • Q1 tablet shipments were down 30.8% on the quarter and 12.4% on the year with 36M units shipped. 
    • Samsung Electronics (OTC:SSNLFOTC:SSNNF) led the Q1 slate tablet market with a 19% share. Foxconn Electronics (OTC:FXCOF) came second at 16% with Compal Electronics following at 13%. 
    • Q1 detachable tablet shipments put Foxconn first with a 35% share thanks to the iPhone followed by Pegatron at 25% due to the Microsoft Surface, and Samsung came in third at 10%.
    • Tablet makers plan to roll out new premium tablets in 2H featuring high-resolution displays, thin designs, and better battery life as a way to mitigate the slumping sales.

    Amazon Prime Day 2017 grew 60% on the year

    • Amazon’s (NASDAQ:AMZN) 30 hours of Prime Day shopping attracted 60% more business than the same sale period last year, according to a company press release.
    • The number of Prime members making a purchase grew over 50% to total in the tens of millions. 
    • The Echo Dot voice assistant was the best selling product. 
    • Amazon says that more people signed up for Prime yesterday than any other day in history but didn’t provide a number. 
    • Previously: Amazon sells 3x as many Echo devices during this year's Prime Day (July 11)

  49. Phil – "What are "Failed restaurant concepts for $200?

    Trebek – I'm sorry Phil, but the correct category would be breastaurant concept.  Owly have hit a tough streak of late, and ogling scantily clad vixens is a discretion-ary past time. Still I would rather go to a Hooters, than a Barf O'Brady's.  In fact, the skin trade and titillation is anything but dead… 

    Annually, Hollywood releases around 600 movies for $10B profit. Porn? $15B in profit on 13K films, that's one getting shot in the valley (San Fernando) every 39 minutes, pun intended.  At $100B, titillation is bigger than the incarceration business ($80B).

    PornHub worth $2.5B; XVideo $3B and bigger than Dropbox, CNN and NYTimes combined. Porn over news (getting priorities straight) and almost as big as Netflix with 3B page views daily.  As far as bandwidth consumption goes, the top 3 are Google, Netflix and Mind Geek. 

    The latter owns PornHub, Brazzers, YouPorn and Reality Kings.  In case you don't know… every SECOND 30M are watching and $3K is being spent, on porn. Putting a bustle in an investor an users hedgerow?

    Silly rabbit, the internet was not built so you could see the Louvre, but the lewd, as 12% of all internet content is porn.  If you ever used a projector, VHS, DVD, Blu-ray, faster Internet, streaming or, now, VR; as a major driver, you can thank porn vids for kicks.  The porn industry makes more money than MLB, the NFL and NBA combined, so it’s clear which sports people prefer. 

    The breastaurant concept isn't failed, it's just been in need of updating.  Forget that closed Hooter's in Paramus, have you ever been to a Tilted Kilt?  What a Hooter's or Buffalo Wild Wings should be, great pub food, excellent tap beer selection, and Celtic clad service.  As Adam West would have said, take a peak at those now ol chum, it's enough to put steam in a mans stride and of a mind to make some mookie

    FYI, speaking of things Celtic and porn, Jenna Jameson is worth $30M.  This is the industry where women make $600  - 2000 per scene, men $150 and Hillary Scott (not the singer, the expert hummer) just signed a contract for $250K a year.  All proving, you can have have big balls, some mighty long pins, and plenty of English, but without an alley, you be playin with yourself Sonny, and Out.


  50. Oh and I forgot to mention the other breastaurants Twin Peaks, Ker's Winghouse, and Brick House Tavern + Tap, all up and coming so to speak, and Out.


  51. Naybob – You certainly are knowledgeable about the porn industry. ;-)

    Time to put away your prurient interest and refocus on QUIK ?


  52. /NG – below $3.00 again.  Going to Wash, Rinse, Repeat.   /NGV7


  53. The Nattering Naybob 

     

    Also Tilted Kilt Pub and Sports Bar


  54. any reason FTR hit a new all-time low again today?


  55. Frontier Comm Is Maintained at Equal-Weight by Morgan Stanley


  56. Date

    Research Firm

    Action

    Current

    PT

    7/12/17

    Morgan Stanley

    Maintains

    Equal-Weight

    22.5

    5/03/17

    UBS

    Downgrades

    Neutral

    0.0

    5/03/17

    Citigroup

    Upgrades

    Neutral

    0.0

    5/03/17

    Cowen & Co.

    Downgrades

    Market Perform

    0.0

    3/22/17

    Goldman Sachs

    Downgrades

    Sell

    0.0

    3/07/17

    Bank of America

    Downgrades

    Neutral

    0.0

    2/28/17

    Morgan Stanley

    Downgrades

    Neutral

    0.0

    11/02/16

    Wells Fargo

    Downgrades

    Market Perform

     

    11/02/16

    Deutsche Bank

    Downgrades

    Hold

     

    10/11/16

    Jefferies

    Maintains

    Buy
     


  57. Joseph > /NGV7 > Brief pop down to $2.99 – Hope that inventories tomorrow drop it to $2.98 (30 day outlook shows above normal temps http://www.accuweather.com/en/us/national/weather-forecast-maps?day=15)  … throw another shrimp on the barbie!


  58. sorry about that

    MS has 22.5 price target


  59. Porn/Naybob – Way more than I wanted to know…

    /NG/Joseph – As I said, I'm worried about Qatar – I think we should see how this settles out on the new narrative.  

    FTR/Jabob – Why should today be different?  I'm probably not the only value investor waiting patiently for $12.  Earnings are 8/1 – that should help.


  60. Phil

    Up to now I've not been able to get a fill on the LB 2019 $45/60 spread at your recommended price (+ 5%) to go with the $55 Puts sold. Would you still recommend the 45/60, or go for, say, the 40/55?


  61. LB/Kevin – Well it makes no sense you can't get a fill as it should be cheaper as LB falls.  Yes, I'd go for 2019 $40 ($8.50)/$55 ($3.80) bull call spreads for $4.70 at this point.

    And that's dinner time for me folks – see you tomorrow!


  62. Phil – Porn Way more than I wanted to know… I'd rather laugh with the sinners and just like in Casablanca, in RICK we trust.

    QC – Also Tilted Kilt Pub and Sports Bar –  yep one and the same as we mentioned, average customer age is 36, which is 9 years younger than Hooters. I see the older demographic at McOwl's gravitating towards the broad-er menu, bigger tap selection, as well as culinary and prurient quality. 

    Albo – "Time to put away your prurient interest and refocus on QUIK?"

    What? So soon? I'm not quite there yet, if you can just hold out a little longer.

    Jabo - 

    needs

    Carriage

    Return

    and

    FU

    help

    and 

    Out


  63. FU IMAX


  64. Nabob/ Porn.    Wow I had no idea.  Thanks for keeping me Abreast of the situation.  Almost seems like there isn't a lot of stiff competition.  Probably the only business around where you can go in the hole and still make a profit. TNX Nabob


  65. Thank you for the feedback Phil and Aquila.  Will keep a close eye on the trade.  

    Above Normal Temps/Aquila – Hmm, with warmer weather patterns and warmer Ocean waters, this could increase the number of tropical storms and possible Hurricanes this season.  

    My local news seems to think so too.  

    Carriage Return/Nat – chuckle, chuckle…  


  66. OPTT – wow. someone bought a couple hundred thousand shares today. big event for this little one


  67. DJ Frontier Comm Price Target Raised to $22.50/Share From $1.50 by Morgan Stanley 

    Jul 12, 2017 11:57:00 (ET)
     


  68. now that is hilarious… sort of


  69. Big move in SPWR.  Wow.  Up 12%.  Not seeing much news.


  70. Naybob & CDNJAY LMAO-thanks for the chuckles though it IS way more than I needed to know, or even imagine for that matter.


  71. Electric Cars Are the Future? Not So Fast

    Though they’re no longer ugly, impossibly expensive and impractical, electric vehicles need to out-innovate fossil fuels if they are ever to displace the internal combustion engine


  72. Hopefully this will catapult TEVA to a new level.

    Teva to tap AstraZeneca's Sorio as new chief

    Calcalist reports that Teva Pharmaceutical Industries (TEVA +3.4%) will name AstraZeneca (AZN -0.2%) CEO Pascal Sorio as its new CEO. According to the report, Mr. Sorio will receive a signing bonus in the $15M – 20M range plus direct annual compensation almost double what predecessor Erez Vigodman received ($5.7M).

    Mr. Sorio had been under pressure to stoke growth at the British drugmaker after spurning a $119B bid from Pfizer several years ago. He subsequently proclaimed that the company would grow revenues to $45B by 2023 but there are significant doubts whether it is achievable, especially if the company encounters a setback in cancer immunotherapy.


  73. Gotta love that SPWR move… That was one of my personal FU stocks!


  74. Mine too, but got my cousin in at 6, he's been itching to sell but told me he wanted a long term investment… so I've talked him into keeping it. I am now a hero. TY Phil :)


  75. I got in at 10, bought more at 7… GO SPWR


  76. That was an old trade from Phil using a BCS and short put. B/E is around $8.5 so all good now. 


  77. "Five Dollars and a Pork Chop Sandwich"

    The latest Trump travails  are seemingly laughable as lamentable. Or as the WSJ cited- Keystone Kops Collusion.  

    In any event, If they wanted to "hack" an election, they would have been much better off scooping up the services of a number of "sout' side" ward healers to do things the time tested Chicago way that has worked for generations. " We don ' want nobody nobody sent and we don' need no stinkin' Rooskies. "

    Election fraud Chicago style: Illinois’ decades-old notoriety for election corruption is legendary


  78. Good morning! 

    Having breakfast at the Cereal Killer Cafe in Camden Market. 


  79.  Good morning Vietnam!


  80. Phil Davis – the secret Hipster ;-)


  81. Go TGT!!!!


  82. Indexes down a bit from highs, we'll see how things go.  

    Huge moves with Silver this week, very nice! 

    So yesterday our targets were 21,500

    2,440

    5,775 

    1,425 

    we WANT to short /ES at 2,440 as long as the others aren't breaking over and if ANY of them break over, we stop out of /ES and wait for at least 2 of them to cross back under and then short the laggard.  

    The Nas, as usual, it the jumpiest but /TF is always my favorite short so let's just bump the Nas watch line to 5,800 and short the laggard of the 4 below our lines.  In other words, when 2 or 3 cross below, short the other one(s) as it crosses below and stop out if any of the ones below (or the one you just shorted) cross back over.  

    Going by Euro Stoxx though, we're still running up for now.

    Oil bouncing off $45, /RB off $1.50.

    If Brent can't take $47.50 back, then expect more damage to the downside.

    Halliburton exec sees oil spike by 2020 after $2T in industry cuts

    • Declining oil prices that have forced the industry to cut ~$2T in investments inevitably will lead to a spike in prices when oil supplies fail to keep up with demand, says Mark Richard, Halliburton’s (NYSE:HAL) senior VP for global business development.
    • "Sooner or later, the market is going to catch up," Richard says at the World Petroleum Congress in Istanbul. "You’ll see some kind of spike in the price of oil. Maybe somewhere around 2020-2021, but it’s got to catch up sooner or later."
    • Explorers in North America, where HAL generates most of its sales, were the first to return to work, boosting spending 10x faster than the rest of the world; the international markets, which generally take longer to turn around due to the more massive projects underway, "hopefully" hit rock bottom in H1 of this year, Richard says.

    Yellen with the Senate today but just a repeat of yesterday.

    Thursday's economic calendar

    Wow, an industry-wide cheat of Government regulations and all they get are slaps on the wrist?  Daimler faces its own Dieselgate

    • Daimler (OTCPK:DDAIF) has been accused of selling over a million cars with excessive emissions in Europe and the U.S. for almost a decade, Sueddeutsche Zeitung reports.
    • The criminal investigation involves cars equipped with two diesel engine types, dubbed OM 642 and OM 651, which used defeat devices to power down during emissions tests.

    Stocks jump following dovish Yellen testimony

    • Stocks ended higher, with the Dow setting a new closing record, after Janet Yellen's congressional testimony eased some of the rate hike concerns that surfaced last week following the release of the FOMC June minutes.
    • Yellen's remarks that "the federal funds rate would not have to rise all that much further to get to a neutral policy stance" created a sense that the Fed may follow a shorter path of rate hikes that will keep the longer-run neutral level of the federal funds rate below levels that prevailed in previous decades.
    • U.S. Treasurys rallied across the curve in response, with the benchmark 10-year yield falling 4 bps to 2.32%; currency traders were a bit more ambiguous, leaving the U.S. Dollar Index unchanged.
    • All 11 S&P stock sectors finished higher, with techs (+1.3%) topping all gainers even as Apple struggled amid continued concerns of production and delivery delays for the newest iPhone.
    • Energy (+0.3%) underperformed after the EIA's weekly crude inventory report showed U.S. production rising by 59K bbl/day last week, but the report also showed a much larger than expected decrease in stockpiles; U.S. crude closed up by 1.1% at $45.53/bbl.

    Trade data out of China

    • China's imports from North Korea dropped 13.2% in January-to-June, but exports rose 29.1% during the period, as overall trade expanded 10.5% to $2.55B in the six months.
    • The goods were not included on the United Nations embargo list, said Huang Songping, a customs spokesman.
    • The most recent data comes as the U.S. notified South Korea it plans to start negotiating a five-year-old free trade deal next month.
    • Bolstered by firm global demand and robust appetite for construction materials at home, China posted stronger-than-expected trade figures for June.
    • Exports from the world's second-largest economy rose 11.3% from a year earlier, while imports expanded 17.2%, resulting in a trade surplus of $42.77B.
    • Trade tensions? The nation also posted its widest trade surplus with the U.S. since October 2015.

    War of words during Brexit talks

    • EU Brexit negotiator Michel Barnier has fired back at U.K. Foreign Minister Boris Johnson's taunts during budget talks.
    • Johnson said that EU leaders could "go whistle" if they expect the U.K. to pay a multi-billion-pound Brexit divorce bill, but speaking at a press conference in Brussels, Barnier had a soundbite of his own: "I'm not hearing any whistling, just the clock ticking."

    IEA: OPEC is 'opening the taps'

    • OPEC's compliance with its own oil supply cuts fell to 78% in June, according to the IEA, which suggested some members had "opened the taps."
    • Global oil supply last month rose sharply by 720K barrels per day, driven by production growth in Saudi Arabia, Libya and Nigeria.
    • "Each month something seems to come along to raise doubts about the pace of the rebalancing process," the agency declared.
    • Crude futures -0.6% to $45.23/bbl.

    Worldwide PC shipments down in Q2, HP lead the market

    • Worldwide PC shipments in Q2 were down 4.3% on the prior year, according to Gartner, for a total of 61.1M units.
    • Q2 marks the eleventh consecutive quarter of shipment declines and the lowest quarterly volume in a decade. 
    • Principal analyst Mikako Kitagawa notes that supply shortages for DRAM, SSDs, and LCD panels drove up PC prices in the quarter and pushed down demand. 
    • HP (NYSE:HPQ) topped Q2 shipments with 12.6M units and 20.8% of the market.
    • Lenovo (OTCPK:LNVGFOTCPK:LNVGY) came in next with nearly 12.2M units, lower than the 13.3M of the prior year’s quarter, and an almost 20% market share.
    • See the rest of the PC shipment results here.
    • HP shares are down 0.55% aftermarket.

    Cisco growth better than appearances, Bernstein says

    • The key (but sluggish) business of selling gear to telcos has hidden some promising growth at Cisco Systems (CSCO +0.2%), says Bernstein in an updated note.
    • Our analysis suggests Service Provider has been a major drag,” writes Pierre Farragu "Take the division out of the picture, adjust for the headwind related to the move to subscription, and Cisco has been steadily growing revenues 5% p.a. in the last 5 years!
    • The move toward cloud and subscriptions "structurally" improves Cisco's business model, he writes.
    • The firm has an Outperform rating and $38 price target, implying 22% upside from today's close.

  83. Phil,

    Are you still in /KCU7? I'm looking to get back in but can't figure out where to enter?