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Thrilling Thursday – The View from the Top

Image result for stock market roller coasterHere we are again.

Once again the Fed failed to raise rates and the Dollar dropped, sending the indexes and commodities higher.  Boeing (BA) was the entire story for the Dow (DIA), as their $20 gain was good for 170 of the 97 points the Dow gained.  That's right, without BA, the rest of the Dow components lost 73 points and the S&P ended up red (slightly) despite Boeing's boost.  

We had a live Webinar yesterday and we talked about the internal market weakeness and decided to stick with our index shorts from Tuesday morning's Report, notably the Dow below the 21,650 line and the Russell below 1,445 – with tight stops over the line.  

We're also still shorting Oil (/CL) Futures below the $48.50 line as that too, seems overdone after it's 15% run since Mid-June rom $42 to $48.50.  Considering how much effort has been made to talk oil up – $48.50 is pretty pathetic, a strong indicator of general weakness.  Also, we're getting into that time of year when there's already a tremendous overhang of fake, Fake, FAKE open contracts at the NYMEX from traders who have no intention of taking delivery.  December already holds open orders for 342M barrels – that's 20 times the amount that will actually be delivered!  

Click for
Chart
Current Session Prior Day Opt's
Open High Low Last Time Set Chg Vol Set Op Int
Sep'17 48.70 48.94 48.25 48.34 08:05
Jul 27

 


-
-0.41 216350 48.75 633860 Call Put
Oct'17 48.79 49.03 48.35 48.43 08:05
Jul 27

 


-
-0.42 11954 48.85 183845 Call Put
Nov'17 48.89 49.16 48.48 48.55 08:05
Jul 27

 


-
-0.44 4298 48.99 121836 Call Put
Dec'17 49.02 49.28 48.57 48.67 08:05
Jul 27

 


-
-0.44 19059 49.11 342448 Call Put
Jan'18 49.10 49.35 48.70 48.73 08:05
Jul 27

 


-
-0.49 5382 49.22 117183 Call Put
Feb'18 49.13 49.41 48.78 48.78 08:05
Jul 27

 


-
-0.52 3302 49.30 52578 Call Put

The front three months have fake, Fake, FAKE orders for a whopping 938M barrels yet only 45M of those barrels will actually be delivered to Cushing over the next 3 months in what is a constant con job played on the American people to fake demand.  Another black mark on oil is the fact that the US is using 17.5M barrels less oil per week than we think because that's how much petroleum product we are EXPORTING to other countries.  

Last year, US drivers consumed 9.75Mb of gasoline per day and this year it's 9.725Mb/d – a slight decrease yet gasoline is up 5% and oil is up 5% because we are artifically constraining our local supply by exporting 2.55M barrels of product per day to other countries.  Why does the US import oil only to export other oil and gasoline?  Because our refineries were operating last year at just 92.5% of capacity and this year they have upped it to 94% as the rules for exporting fuel have been relaxed.  

Image result for us petroleum exports 2017This is not a demand story at all and, without a demand story, the bullish case for oil quickly falls apart – especially as we're already halfway through summer driving season and well past peak demand for the year.  It's early in the September contract cycle, which terminates on 8/22, so there's not much pressure on those 600+M FAKE contracts yet but, when it does come time to roll them into 600+M FAKE October contracts, we may see a bit of panic because December is already an uncomfortably crowded month.

You would think the President would be outraged that the American people are paying to subsize Mexico's oil.  Not only that, but this affects our balance of trade and sends US Dollars to countries that sponsor terrorists for no reason as we import 20% more oil than we need to supplement our US production.  2.5M barrels, in fact, is more oil than we import from all of OPEC.  Obviously, no one expects Donald Trump to keep a campaign promise but this is almost the exact opposite of making the US energy-independent and it turns into a tremendous tax on the American people – why do they stand for it?

As to the overall market, we're pretty much back at irrationally exuberant levels thanks to the Fed and their continued easy money stance.  In yesterday's statement, the Fed said the economy is great and unemployment is low but, since there is not 2% inflation (by their measure) they are going to keep pumping $60Bn a month into the economy through their QE program (mostly bond rollovers).  

Will they ever take the training wheels off the economy?  Investors paying record-high multiples for stocks better hope they don't.  For now, at least, there's been a reprive.  

 


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  1. amzn…dangit!


  2. go gnc!!!

    please no tease


  3. Good Morning.


  4. ?Drill baby drill?….


  5. ~~TOO – Teekay Offshore: Brookfield Business Partners (BBU) to purchase 60% stake in in Teekay Offshore Partners (TOO) for $750 mln .

    I mentioned this play last month, and Naybob, you commented on my "dumpster diving."

    Brookfield is known for buying cheap and building long term shareholder value.  Now that they are involved, I plan to add to the position on any weakness in the stock.


  6. Getting really tired of winning now! Have to add lines all the time…


  7. More trouble at the White House :  What a bunch of clowns.  But its not funny.

    ~~Scaramucci: ‘If Reince wants to explain that he’s not a leaker, let him do that’

    ~~White House communications director Anthony Scaramucci said Thursday that he doesn't know if his relationship with White House Chief of Staff Reince Priebus can be repaired, and he urged Priebus to publicly prove that he has not leaked damaging information to the media.


  8. Good morning!  

    AMZN going to the moon ahead of earnings, $1,068 pre-market.  

    Image result for amazon women on the moon

    GNC testing $10. 

    Oil popping back up over $48.50, /BZ still under $51 – gotta watch that line.

    It's too early in the cycle to expect it to act logically.

    TOO/Albo – Great timing on that call!  

     - 

     

    Phil, under the category, "Yike, where did you dig them one."  (Your comment when I first mentioned QUIK)

    Started a spec position in TOO at 1.84.  Also sold some Nov 2 puts for .60.  Stock is down 70% in the last two months.  It pays a 23% dividend.  Believe the odds are good that they cut or eliminate the dividend.  If they do, I believe the stock will bounce, and I'll close out.  If they don't, it will be a great yield to hold on to.  In any event, the company has a meaningful backlog of contracts, and could see an increase from new contracts coming on line later this year.

    Catching a small bounce here.

    Big Chart – Winning!  NYSE 12,000 now in sight.  Of course, on the whole, we're now 20% higher than the level we crashed from (10,000) 10 years ago.  That gives us a bit of perspective.

    My struggle with updating the Big Chart (and it really needs to be done) is the same as I had back in 2007, when we were testing 1,000 and that seemed silly – only if you ignore all the potential risks can you look ahead to next year and 2019, out to 2020 and say "sure, we should go up another 20% from here".  If nothing bad happens and earnings keep growing at the current pace – yes, that could happen but how long can all these plates keep spinning without something falling?

    Image result for plates spinning animated gif

    At the moment, the Fed is still spinning them as fast as they can but what happens when and if the Fed withdraws or, if not our Fed – some Fed somewhere?  

    Priebus/Albo – Wow, it's like watching Shakespeare at this point.  So much betrayal and drama!   The White House has indeed become a reality show.  


  9. Priebus/albo

    It's almost impossible to prove a negative, how is Priebus supposed to prove he didn't leak.  It's an impossible task.


  10. Bezos now World's richest man but only because Gates has given half of his away already.  


  11. 2,480 again on the dot, /TF already collapsing.  


  12. IMAX..ugh


  13. go ABX!!!


  14. Good morning, everyone!

    The weekly webinar replay is now live!

    https://youtu.be/0dLKVNLg8GY


  15. TOO – Thanks, Phil.

    FWIW – I just bought 2k more shares at 3.06 and sold 20 Feb 3 calls for .70. 

    20% return in 7 months if stock stays here.  Think it likely that the stock will move up now that Brookfield is involved.


  16. Priebus/Rustle – What are the odds he gets replaced with another Goldman Sachs guy?

    IMAX/Jabob – LOL, they were doing good for a minute.  CC must not be going well.  

    Total revenue in the second quarter of 2017 was $87.8 million, down 4.34% year over year. The figure also missed the Zacks Consensus Estimate of $91.8 million. Adjusted EBITDA margin in the reported quarter was 37.9%. The company’s top line was hurt by below-par performance by some films in the second quarter.

    Is that a reason to sell IMAX?  People are simply idiots.  

    Film distribution and post-production soared a massive 96.26% year over year to $5.1 million

    That's their future revenues, they can't help it if the current batch of films didn't excite people.  

    Liquidity & Share Buyback

    IMAX Corp. repurchased $46 million shares in the second quarter, thereby exhausting the previously announced $200 million buyback program. The company’s board authorized a new share repurchase program for an additional $200 million. The program is scheduled to end on Jun 30, 2020. The company exited the second quarter with cash and cash equivalents of $158.2 million, compared with $204.7 million at the end of 2016.

    Network Growth Statistics

    The company installed 34 (including 1 upgrade) in the reported quarter compared with 40 (including 2 upgrades) in the second quarter of 2016. It signed 95 theatre agreements in the second quarter of 2017, flat on a year-over-year basis. As of Jun 30, 2017, the total theater count in backlog was 580, compared with 498 at the end of 2016. Total theatre installations as of Jun 30, 2017 are 1,257 compared with 1,215 at the end of 2016.

    That's 10% of their stock they are buying back while the backlog indicates a 50% increase in the number of theaters going forward.  Those films are going to have to really, really suck for them to live down to these expectations.  

    Wow, oil bucking like a bronco – wants to throw off the shorts.  

    /TF can be played long over 1,440 in anticipation of a bounce – quick money only. 


  17. Saw Dunkirk in IMAX last night.  Have to support company, amazing!  Christopher Nolan always films in IMAX while most others have their films blown up to fit IMAX screen.  You can definitely feel the difference as you feel emerged in the scene.  WWII was definitely the most brutal war.  There were so many battles that were basically just suicide missions.


  18. thanks Phil!


  19. Bought another 1k TOO at 2.84 & sold 10 more Feb 3 calls for .60.

    I know, TMI.   Sorry.


  20. FTR… pay that dividend and go higher!!!


  21. Phil/IMAX

    What would you do with the position in the LT portfolio (Dec $23/$28 {$4/$2.05} bcs, with sold Dec.$29 puts {$2.9})?  The long calls are down near $1.20.  Time to roll out to March?


  22. Phil// FXP the long call is lower than the spread.  Should we roll it?  Thanks.


  23. albo –  What else do you like?  You tend to find some diamonds.  


  24. Phil our PSA Sept short put 200 got quite a hit!!!


  25. Gold dropping – miners getting hammered


  26. GG sinking latch


  27. Thanks, Burrben.  Believe me, I have my clunkers too !

    My heaviest position is in QUIK, from a slightly lower average.  I'm so overweight in this speculative name, that if my wife ever found out, I would probably be kicked to the curb.8-).

    They report on August 9th.  Best way to get familiar with them is to read Jay Deahna's July 21 post in Seeking Alpha.


  28. Dunkirk/Rustle – Looking forward to that.  

    You're welcome Jabob.

    IMAX/DC – I'd like to try to hold on for the June roll, kind of silly rolling 3 months at a time.

    FXP/Rookie – Now here we have a 6-month roll we can make but I want to get into mid-August and see China earnings before possibly throwing good money after bad.  FXP was a hedge, China didn't have a summer melt-down and our longs did well – I'm not sure if it makes as good a winter hedge – especially with SQQQ so low.

    PSA/Yodi – What's that?  

    Wow, /NG with a super-pop off that report!  

    Natural gas inventory build comes in lower than expected

    Not a big deal, they just needed an excuse to recover.  

    Miners/Latch – How silly to price the miners by the daily price of gold.  ABX got their costs down to about $710/ounce – that gives them a huge competitive advantage at any price.  

    • Barrick Gold (ABX +3.2%) is off to a strong start after reporting stronger than expected Q2 earnings and revenues, as it maintains its FY 2017 gold production guidance of 5.3M-5.6M oz. despite uncertainties around Tanzania.
    • ABX says it will begin talks next week with the Tanzanian government about the export ban on gold and copper concentrates; ABX subsidiary Acacia Mining has three mines in the country, and operations affected by the ban account for ~6% of ABX's 2017 gold production forecast.
    • Total debt was reduced by $309M in the quarter, which ABX says it intends to reduce from $7.9B at the start of 2017 to $5B by the end of 2018.
    • ABX says normal leaching operations resumed at its Veladero mine in mid-July; GMP analyst Steven Butler says Veladero resuming normal leaching is positive and should remove a potential risk factor to achieving the miner's 2017 forecast.
    • Raymond James analyst Brian MacArthur says ABX is doing a good job of optimizing its portfolio, improving the balance sheet and has numerous long-term options for new production, such as Goldrush and Alturas, where a scoping study recently was completed.
    • Credit Suisse's Anita Soni writes that ABX’s production weighted towards Q4 implies a weaker Q3 vs. Q2 unless ABX is able to exceed the top end of its forecast range, although continued production strength at Cortez could offset potential downward revision at Acacia.

    I'd be so happy if these guys die – they are an awful, awful airline:

    • The Bloomberg Consumer Comfort Index moves to 48.6 from 47.6 last week.
    • State of the Economy index improves to 45.0 from 44.1.
    • Personal Finance index jumps to 58.1 from 57.4.
    • Buying Climate index increases to 42.6 from 41.4.
    • June Durable Goods:+6.5% vs. +3.5% expected, -0.1% prior (revised from -1.1%).
    • Core -0.1% vs. +0.3% expected, +0.7% prior (revised).
    • Mastercard (NYSE:MAslides past estimates with its Q2 report.
    • The company reports a 17% increase in transactions to 16.0B and 14% rise in cross-border volume on a local currency basis. Purchase volume was up 9%.
    • Total operating expenses were up 7% during the quarter.
    • Adjusted operating margin fell 110 bps Y/Y to 54.1%. The effective income tax rate for the period declined 20 bps to 27.7%.
    • "Our investments in Fast ACH, B2B payments and advanced security technologies increasingly position us as the one-stop shop for our partners’ electronic payment needs," says CEO Ajay Banga.
    • MA +2.22% premarket to $133.90.
    • UPS (NYSE:UPS) reports U.S. package volume increase 4.9% Y/Y in Q2. Total U.S. package revenue came in at $9.75B.
    • International package revenue was $3.16B on a 5.6% gain in volume during the quarter.
    • The company generated $2.216B of operating profit in Q2 vs. $2.038B a year ago. The U.S. domestic segment accounted for $1.395B of operating profit vs. $1.233B a year ago.
    • Looking ahead, UPS expects full-year EPS of $5.80 to $6.10 vs. $5.96 consensus.
    • Previously: United Parcel Service beats by $0.11, beats on revenue (July 27)
    • UPS +1.08% premarket to $113.50.
    • Income from continuing operations $553M, or $1.89 per share vs. $718M, or $2.41 per share in the same quarter a year ago.
    • Revenue by segment: Integrated Defense Systems +5%; Intelligence, Information and Services -2%; Missile Systems +7%; Space and Airborne Systems +6%.
    • Bookings fell 8% to $6.5B from the prior year period. Backlog at the end of Q2 was $36.2B, an increase of approximately $1.1B.
    • Repurchased 0.6M shares of common stock for $100M during the quarter.
    • Updated outlook for 2017: EPS from continuing operations to $7.35-$7.50 (from $7.25-$7.40), on sales of $25.1B-$25.6B (from $24.9B-$25.4B).
    • Q2 results

    • Shares of GNC Holdings (GNC -0.6%) are set up for an active day after the company reported a 12% jump in Q2 transactions and same-store sales growth that improved sequentially.
    • Management is pointing to the strong response to the "One New GNC" program, including 7.3M consumers on board with the myGNC Rewards program.
    • "We made good progress in the second quarter, and our investments in pricing, loyalty and improving the customer experience continued to deliver positive results," notes interim CEO Bob Moran.
    • An elevated level of short interest could lead to some extra volatility today on GNC.
    • Previously: GNC Holdings beats by $0.03, misses on revenue (July 27)

    Verizon up 6.1% after Q2 revenues, subscriber adds show strength

    • Verizon (NYSE:VZ) has come out of the gate up 6.1%, a strong move after a healthy Q2 revenue beat and subscriber additions that topped estimates.
    • The company added 614,000 net retail postpaid subscribers, including 590,000 postpaid smartphone net adds. Retail postpaid churn was 0.94%, and retail postpaid phone churn was 0.70%.
    • Adjusted profits grew to $0.96/share from a year-ago $0.94/share (impacted then by a work stoppage).
    • "Verizon reignited its growth engine in the quarter, both adding and retaining wireless customers while scaling our media business and continuing to invest in our superior networks," says CEO Lowell McAdam.
    • Revenue breakout: Service revenues and other, $26.25B (down 2.2%); Wireless equipment, $4.3B (up 16%).
    • For the full year, it's expecting organic revenues consistent with 2016, with "improvement in wireless service revenue and equipment revenue trends," and EPS trends similar to revenue trends.
    • It sees capital spending for the year of $16.8B-$17.5B and an effective tax rate toward the low end of 34-36%.
    • Press Release

  29. Bannon Is Said to Call for 44% Tax on Incomes Above $5 Million

    Trump Pick for Fed's Wall Street Watchdog Plans to Ease RulesPresident Donald Trump’s pick to be the Federal Reserve’s top Wall Street watchdog said it’s time to reconsider the restrictions imposed on banks in recent years, even as he credited regulations with helping stabilize the financial system after the 2008 crisis. “As with any complex undertaking, after the first wave of reform, and with the benefit of experience and reflection, some refinements will undoubtedly be in order,” said Randal Quarles, Trump’s nominee to be the Fed’s first vice chairman of supervision.

    Swedish Government On Verge Of Collapse After Admitting 'Accidental Leak' Of Entire Nation's Info

    Spot The Outlier – Seattle Home Prices Go Vertical As Laundered Chinese Money Flows In

    First Anadarko, Now Whiting: Second Shale Company Slashes CapEx Budget

    Meet Tally: The Grocery Stocking Robot About To Eradicate 1,000's Of Minimum Wage Jobs


  30. Phil PSA Public storage.com Sept 200 short Put recommended Mar 7 I got 6.40 for it.


  31. FU AMZN!!!!


  32. wow, 9.725 M bbl of gasoline use per day is 3.67 million tonnes of CO2 emissions per day. That's 3,670,000,000 kg. Just in the US.


  33. Bio you should dump this on the Trump Tower!!!


  34. Even if this carbon externality could fetch $0.10 per kg in an open market fashion, that's $367M a day in carbon asset creation. And this is just US-based, gasoline-only emissions. This market is just so huge!


  35. PSA/Yodi –  i'll have to check, because I don't think we ever officially added it.   Still, not bad at this price.

    Well, my computer has shut down three times this morning and it's either the power supply or I need a whole new computer. Either way I'm off to Best Buy and will start with the power supply.


  36. OK folks – bitcoin/coinbase – I recommend you get any coins held there off by 8/1


  37. Phil posible worked the thing to death


  38. oil "lower forever"

    I've come 'round. Necessary to keep carbon in the ground. Eventually the asset goes to $0. Just a matter of time. What this means is every time oil spikes, as Phil pointed out today, get in on the short side. In the long run it will be a winning strategy.

    Meanwhile, CO2 increases 1 ppb (0.001 ppm) EVERY FOUR HOURS.  That' nuts people. We are getting into real trouble here.


  39. biodieselchris – do you want questions to be asked here or on the coin blog? Thx


  40. let's go to the coin blog


  41. Bio/

    CO2 is meaningless, it is hyped like TSLA.

    It s effect on climate and temperatures is a tiny fraction of the influence of  the electromagnetic energy  from the sun on this planet. 


  42. Oh, cliff got killed for no apparent reason.


  43. amzn… weird--what happened???


  44. VIX Dec 15 calls for 1.95….here we go!


  45. shapeinc – um, ok, well if that's how you feel about it.


  46. Where's the coin blog?  The Digital Currencies area is just filled with ZH articles.


  47. Climate change? I interviewed an expert on climate change and posted it here:  

    Why we need to act on climate change now.

    This version is in the Members' Corner. If you have comments or questions, you can post them there, and I will answer or find the answer and post it.


  48. what happened to the nasdaq? pcln, amzn, tsla,aapl, nflx profittaking for once?


  49. Shapinc / C02 - 

    That's really not the conclusion that the team under the direcftion of Richard Mueller – a Nobel laureate professor of physics at Berkeley and a Koch-funded climate skeptic until his post-study conversion - came to when they concluded their Earth Surface Tempurature Study, citing both that 1) C02 was the only phenomenon that properly conformed to temperature elevation over a 250 year period of temperature measurement, and 2) solar variation was effectively ruled out as having less than a 5% chance of a primary determinant of sustained global surface temperature with a 95% level of confidence over the 250 year period in question.

    But I'm sure you know better. Have fun with that.


  50. Did I miss anything?

    Power is restored (with a 3-hour backup) – I think it was just the UPS that was failing but it was trying to blame the computer, using it's "smart panel" to take advantage of my dumb, but loyal PC.

    PSA/Yodi – Ah, I see, that was on the watch list at $226 but we never did pull the trigger on a play.  I do like them now that they have a 10% discount though.

    Coinbase/Bdc – See, these guys do need regulating, that's ridiculous.  

    Well, now I have 14 short /CL at $48.51 avg.  I sure would like to get back to 5.  

    CLF/Malsg – That's what they get on a beat?  Good thing they didn't miss!  

    AMZN/Jabob – Attack of reality.

    TSLA/Jabob – Those are realistic assumptions.

    Nasdaq/Jabob – Reality.  Flew too close to the sun at 5,995 and poof – lose 100 point really fast!  


  51. LTP hit 220% at the peak ($1.6M) – let's see how much damage it takes on the pullback.  


  52. "Coinbase/Bdc – See, these guys do need regulating, that's ridiculous.  "

    WHY????? why default to regulation??? Just leave it alone. Jesus Christ.


  53. UAL – whee!  About time. Now will it keep going?


  54. Phil/VXX/VIX

    any good entry on these? did we add the Oct VXX 13 Calls?

    regards


  55. SCOTT UAL TO ZERO PLEASE.

    they are already morally bankrupt – I want to see them financially bankrupt as divine justice (oh and that would be good for my 50 puts…)


  56. Mini flash crash


  57. got into SQQQ just in case of any follow through. Will get out tomorrow if melt-up remains intact. Eventually we'll have our moment though. With Trump it is inevitable.


  58. CLF. That report looked fine and CLF seems like an even better deal today. Am I missing something?!


  59. Coinbase/BDC – Because they can't just decide to keep the split coins.  How is that good for users?  If you want them to replace banks – they can't make up rules on the fly.  

    VXX/Pat – It never works out so we don't play anymore but we still do have a Sept SVXY bear put spread in the OOP.  That's not working either!  

    Marks/Albo – Sounds sensible… Burn him!!! 

    "Given my view of the environment, the only reason to be aggressive today is because defensive investing implies low prospective returns. But the question is whether pursuing high expected returns through aggressiveness can be counted on to be rewarded," Marks wrote in the investor letter Wednesday. "If the answer is no, as I believe, then this is a time for caution."



    The co-chairman of Oaktree Capital is famous for his prescient investment memos, which predicted the financial crisis and the dot-com bubble implosion.



    "When the market is rational, low-risk investments will always appear to offer prospective returns lower than those on high-risk ones. But in tough times, the former are less likely to bring losses than the latter," Marks said. "In my opinion that makes them right for today."



    He also cited the following key stats on why the market's current valuation is "lofty":

    1. "The S&P 500 is selling at 25 times trailing-twelve-month earnings, compared to a long-term median of 15."

    2. "The Shiller Cyclically Adjusted PE Ratio stands at almost 30 versus a historic median of 16. This multiple was exceeded only in 1929 and 2000 – both clearly bubbles."

    3. "The 'Buffett Yardstick' – total US stock market capitalization as a percentage of GDP … hit a new all-time high last month of around 145, as opposed to a 1970-95 norm of about 60 and a 1995-2017 median of about 100."

     

    To be sure, the manager emphasized he doesn't know exactly when a correction will happen.

    "My observations are always indicative, not predictive … an eventual increase in risk aversion – should happen, but they don't have to happen. And they certainly don't have to happen soon," he wrote. "It feels like we're in the eighth inning, but I have no idea how long the game will go on."

    CLF/Jet – All the materials are down.


  60. Phil – https://hackernoon.com/casual-bitcoin-users-you-need-to-know-about-aug-1st-d568e07418cb

    the change in trust shifts from third parties (old way: banking), to the protocol (new way: crypto). Regulation misses this. You do NOT want to apply old solutions to new technologies. SOmethign shouldn;t be regulated just because "Phil doesn't understand it."


  61. Thank goodness my index shorts paid for my oil shorts or this would be a crappy day!  

    A Boko Haram attack on an oil team kills 48

    RYAN IS SAID TO BE TELLING REPUBLICANS BORDER TAX IS DEAD: BBG
    Trey Gowdy acted like a lawyer for Kushner during closed-door questioning, Democrat says
    Shell's CEO says his next car will be an electric one
    • What looked like another record-breaking day for the markets has reversed post-lunch, with the Nasdaq (NASDAQ:QQQ) all of a sudden down more than 1%. The S&P 500 is off 0.45%, and the Dow flat.
    • Checking the FAANG/FAAMG names, Apple, Google, and Netflix are all off more than 2%. Microsoft is down 1.5%, and Amazon is lower by just a hair. Facebook is off of its best levels, but still higher by 2.8%.
    • Facebook (NASDAQ:FB) is up 2.9% now after tagging its all-time high, following an earnings report where it posted deep double-digit gains in profits and revenues and crested 2B monthly active users.
    • Despite warnings from management about core ad load, Canaccord Genuity says it still sees "other avenues for growth that keep us optimistic," namely: ad pricing responding nicely to slower inventory growth; a mix shift to video ads; video driving engagement and revenue; Instagram; and the prospect of "robust" monetization of messaging.
    • The firm reiterated its Buy rating and boosted price target to $190 from $175.
    • Credit Suisse boosted its price target to $190 from $180, pointing to the acceleration in ad price growth as its most important takeaway. The quarter serves as a "stronger signal for upside potential" in the second half, and "should drive greater urgency among investors to add to FB positions."
    • Pivotal's Brian Wieser notes that despite a revenue slowdown (as forecast), growth was still significant considering "how big it already is." He has a Hold rating and $140 price target.
    • And Jefferies' Brian Fitzgerald has raised to a heavy price target: $215, implying 26% upside. The firm's focused on Facebook's video expansion to drive user engagement across all platforms, and expects ongoing upside in usage and in average revenue per user.

    Gold traders in longest bull streak in three months

    • A Bloomberg survey shows 10 traders/analysts as bullish on the metal, two bearish, and four neutral. It's the sixth consecutive week of bullish sentiment – the longest such run since late April.
    • Gold's been headed higher for the last three weeks, and is up another 0.6% today to $1,256.90 per ounce.
    • Barrick Gold (ABX +2.3%) President Kelvin Dushinsky says the company may still sell its 50% stake in Australia's Kalgoorlie Super Pit mine but is not actively soliciting bids; "at the right price we would have been sellers, but we're also more than happy to continue to own the asset," he says.
    • Newmont Mining (NEM -1.1%), ABX's partner and Kalgoorlie operator, has said it was interested in buying the remaining stake.
    • Dushinsky says negotiations with NEM are ongoing to renew a contract to process ore from ABX’s Turquoise Ridge operations in Nevada at NEM's nearby Twin Creeks facility.
    • Dushinsky also says he is "very positive" about talks getting underway with Tanzania to resolve an export ban.
    • Earlier: Barrick Gold +3% after strong Q2; production outlook maintained
    • Goldcorp (GG -6.4%) is sharply lower despite beating Q2 earnings expectations, as production at some mines fell short of analyst forecasts.
    • GG reports Q2 gold production totaled 635K oz. at $800/oz., compared with 613K oz. at a cost of $1,067/oz. in the year-ago quarter.
    • GG reaffirms its guidance for 2017 gold production of 2.5M oz. while reducing its forecast for all-in sustaining costs to $825/oz. from $850/oz., which it says reflects progress on its initiative to realize $250M in sustainable annual efficiencies by mid-2018.
    • Raymond James analyst Farooq Hamed expects that H1 operating performance should allow GG to meet its annual forecast, but continues to have some concern for the balance sheet that added ~$75M of net debt Q/Q, implying a net debt/EBITDA of ~1.6x.
    • Jefferies analyst Christopher LaFemina maintains his Hold rating on the shares despite better than expected Q2, citing GG’s project development risk and premium valuation.
    • Also, CFO Russell Ball is leaving the company, to be succeeded by senior VP of corporate development and strategy Jason Attew as "part of a planned succession."
    • Anglo American (OTCPK:AAUKFOTCPK:AAUKY) reports strong gains in H1 earnings and reinstates a dividend it cut two years ago, as EBITDA rose in every commodity at the miner except for platinum and nickel.
    • Anglo posted $1.4B in net income for H1 2017 compared with a net loss of $813M in last year's H1, and unexpectedly reinstated its H1 dividend after previously saying it planned to deliver dividends at the end of the year.
    • The resumption of the dividend is "the big news, [which] should be taken very positively by investors," Bernstein analyst Paul Gait says.
    • Revenue rose to $12.1B during H1 from $10.6B a year ago, and net debt fell to $6.2B as of June 30, below Anglo's year-end target of $7B and down from $11.7B a year earlier.
    • EBITDA at Anglo's De Beers diamond unit rose 3% Y/Y, boosted by a a 21% increase in rough diamond production, but prices for De Beers' diamonds fell 12% largely due to increased supplies.
    • De Beers CFO Nimesh Patel says the unit is open to buying new assets at the right price.

    Charter up 5.4%, sets new high after profit beat

    • Charter Communications (NASDAQ:CHTR) is up 5.4% in a strong move to set its all-time high today, following
    • Q2 earnings where double-digit gains in Internet revenues and increases in commercial sales carried a flat video business.
    • Profits declined to $139M due to the absence of a pension curtailment gain from last year and increased depreciation and amortization. EBITDA rose 8.6% to $3.85B, beating an expected $3.77B.
    • Total customer relationships rose by 211,000 after excluding disconnects linked to Legacy Bright House's seasonal customer plan from 2016. Total residential/SMB primary service units rose by 243,000.
    • Revenue by segment (pro forma for TWC/Bright House acquisitions): Video, $4.12B (flat); Internet, $3.51B (up 12.1%); Voice, $650M (down 10.9%); Small and medium business, $924M (up 9.7%); Enterprise, $548M (up 9.3%); Advertising sales, $381M (down 5.8%); Other, $217M (down 6.8%).
    • Press Release

    MGM Resorts lower after Chian results disappoint

    • MGM Resorts (NYSE:MGM) is down 2.55% after Q2 results fall short of the consensus estimate of analysts.
    • Revenue from MGM China was recorded at $494M vs. $471M consensus, which accounts for the bulk of the top line shortfall.
    • MGM's domestic performace included a 1.2% increase in RevPAR to $151, a 28% rise in adjusted property EBITDA and an impressive 25.1% same-store operating margin. Adjusted EBITDA leaders for the quarter were MGM Grand ($240M), Bellagio ($167M) and Mandalay Bay ($146M).
    • Shares of MGM still sit near the top end of their 52-week range of $23.38 to $34.53.
    • Previously: MGM Resorts misses by $0.03, misses on revenue (July 27)

    FBR Capital expects comeback for L Brands

    • L Brands (LB +0.7%) is still rated at Outperform by FBR Capital after the firm hosted an investor meeting with the retailer.
    • After taking in management company, FBR analyst Susan Anderson thinks L Brands still holds "significant mindshare" with its target clientele and notes unit growth for the Pink and Victoria's Secret brands.
    • FBR's price target of $60 reps 32% upside for L Brands.

    Sirius XM +8.8% to new high amid Q2's record revenues

    • Sirius XM (NASDAQ:SIRI) has charged to an all-time high, up 8.8% after Q2 earnings showed double-digit growth in profits and cash flow and the company lifted several forecasts for the rest of the fiscal year.
    • Net income was up 16% to $202M on record revenues that were up nearly 9% to $1.35B.
    • EBITDA grew 12% to $521.9M, beating consensus for $504M.
    • Operating cash flow was up 12% to $483M, and free cash flow rose 6%, to $417M.
    • "In the second quarter, Sirius XM continued its strong track record of execution, and demand for our premium content bundle pushed our listener base to an all-time high of more than 32M paying subscribers," says CEO Jim Meyer. "We also made tremendous progress on strategic initiatives in the second quarter with the closing of our recapitalization of Sirius XM Canada, our acquisition of Automatic Labs, and our agreement to acquire a minority stake in Pandora Media."
    • Revenue breakout: Subscriber revenue, $1.11B (up 7.5%); Advertising revenue, $40.2M (up 19.9%); Equipment revenue, $29.7M (up 6.5%); Other revenue, $166.7M (up 18.3%).
    • For the full year, it's raising its guidance on revenue to $5.375B (in line with consensus). It's boosting expected EBITDA to $2.05B, above consensus for $2.04B, and raising estimates for self-pay net subscriber additions to 1.4M.
    • Press Release
    • F5 Networks (NASDAQ:FFIV) is off 7.3% as investors react and analysts begin trimming ratings after the company's revenue shortfall from yesterday's postmarket report.
    • Wells Fargo and Oppenheimer cut back to Market Perform. BMO reiterated an Outperform rating but cut its price target.
    • Oppenheimer's update suggests that the iSeries BIG-IP product cycle isn't driving acceleration as expected, and that the stand-alone security solutions can't be growth drivers on their own yet: "Coupling this with persistent macro (EMEA) challenges leave us in search of fundamental catalysts to drive F5's shares higher through earnings upside or multiple expansion."
    • Wells Fargo's Jess Lubert expects product growth to decline for the next three quarters. "If F5's customers increasingly shift assets to the public cloud or purchase SaaS rather than on-premise software offerings, we think there is likely less of a need for F5's application delivery services, which may impact company growth over the next few years."
    • The firm trimmed its price target to $120 from $145 — which represented 6.4% downside from yesterday's close, now reflected in today's move.
    • MKM Partners sets a price target of $230 on Netflix (NFLX -1.1%) to top the $225 PT just posted yesterday by BTIG.
    • The investment firm is looking long-term in making the pro-Netflix call.
    • "While we look to our $12 EPS power in 2021 as our valuation benchmark, we think there is a much larger opportunity over time," writes analyst Rob Sanderson. "We continue to think the international opportunity is much larger. Each benchmark suggests the opportunity for Netflix outside the U.S. could be four to five times the domestic opportunity over time," he adds.
    • The all-time high on Netflix is $191.50.
    • Previously: BTIG calls it for Netflix over the TV bundle (July 26)
    • Nokia (NYSE:NOK) is up 3.8% today and inching closer to its 52-week high after Q2 earningsshowed profits that beat expectations despite warnings of a slowdown ahead.
    • Net income rose 73% to €574M — €0.08/share, well above expectations for €0.05/share. Revenues dipped to €5.63B, though, missing consensus for €5.64B.
    • A deal with Apple to settle a patent/licensing dispute boosted results in its Technologies unit and took the revenue edge off a Networks business where net sales fell 5%.
    • Revenue breakout: Networks, €4.97B (down 5%); Nokia Technologies, €369M (up 90%); Group common and other, €307M (up 14%). In Networks: Ultra Broadband, €2.17B (down 8%); Global Services, €1.45B (flat); IP Networks and Applications, €1.36B (down 4%).
    • Like Ericsson, Nokia sees a tougher network market in the coming year, guiding to a decline of 3-5% vs. an earlier view of a "low single digit" drop.
    • Earnings slides
    • Press Release

    Busy morning tomorrow:

    In a country with so many problems – especially inequality – tax cuts for rich corporations will not solve any of them. This is a lesson for all countries contemplating corporate tax breaks – even those without the misfortune of being led by a callow, craven plutocrat. –  Stiglitz


  62. Bitcoin/BDC – If I don't understand it then not enough people understand it for it to gain traction and they are long-term shooting themselves in the foot as it will never be widely adopted if you have to read a manual every time your "currency" undergoes changes.  If it's run like this, then it's a geek collectible, not a currency.  


  63. PHIL / IMAX – will this hold 20?  I'm in for 75% of my allocation ( 24.75) and am looking to buy my last batch.  I have the stock ( put to me and I added to it) and it covered at the moment at with Aug 26 calls that should be worthless…  should I sell some puts or just by the stock and sell some calls into Dec or March?

    thanks for your help.


  64. Phil / IMAX 

    position is :

    3000 Shares ( 24.75)

    30X short Aug '17 puts at sold at .4 currently at .05


  65. Food for thoughts on 11 well know companies and possible struggles:

    http://247wallst.com/investing/2017/07/25/11-great-american-companies-that-have-totally-lost-control-of-their-narrative/

    Not my opinion on all of them though.


  66. Bat just looking over IMAX, and I am surprised you entered this play in such high numbers. PE is 80. Many Directors of this company selling stock from 33 to 25 $  between Mar. and June. Div. non exsisting. I know it looks like they have arrived  on a two year low, but intertainment is a very flicky market. It seems they do not have any good films coming of their lines. Same as the Pharma not having a good arsenal of drugs in the pipeline.

    I would have and I did have put my bet on GILD, so I am sorry I do not have some good comments to add to this one. Always start and enter any play in small lots!


  67. Interesting dynamic going on :

    Tech stocks down pretty much across the board.

    Retail stocks up.

    Betting that AMZN blows it tonight when they report ?  If that turns out to be the case they'll have to re-evaluate Bezos vs. Gates. :-)


  68. albo…from your mouth to …

    amen!!!


  69. Albo,

    AMZN in deed will be interesting. I still can not get out of my mind the true words and analyze Phil had for this company the other day. But time will tell. " I know we losing but we make it up on volume" !!! Did never make sense to me.


  70. Interesting how the /ES can swing from plus 11 to minus 15 back to minus 4 and possibe even zero in one day just to crazy for me.


  71. Yodi –  I was / am looking at this stock as a 30 to 33 stock ( probably too high) and got in too early.

    your right on the qty – as high, but now I need to work my way out of this.  The 'other' categories' is the space where they are bleeding cash to fund the start of this.  thus far it has not been positive.  this is about 70 million this year that they are investing.  the GM is still about 50% even with the drag.  They have a l long runway…  but this is now a 2018 story I think.  


  72. IMAX/Batman – I'm fairly sure $20 will hold but if you have a big batch at $24.75, I'd sell the March $22 calls for $2 and the $20 puts for $2 and then you drop your basis to $20.75 and THEN, if IMAX is lower, you will have a DD at $20 to move up to about $120K on 6,000 (from $75K on 3,000 now) where, of course, you could sell 120 more calls for $24,000 and drop back below $100K.  Other than that though, you'll probably roll the puts or calls (whichever are in the money) and you'll still be at 3,000 with a much lower basis.  Even if it flies up and you get called away at $22 – that's still up $1.25 ($3,750) from the current $11,250 loss so net +$15,000 is your worst upside case.  Always leave yourself room to adjust when you can.

    11 companies/StJ – What superficial nonsense!  

    IMAX/Yodi – They are good for $50M in profits and $1.4Bn valuation is p/e near 30, not 80 and very solid growth prospects.  

    They are just in a big build/invest cycle but cash flow is up around 0.75/share so no issues to moving forward from here.  

    And, Yodi, for old time's sake:

    Image result for bezos make it up on volume

    /ES Swings/Yodi – It just goes to show you how unrealistic the current valuations are when they can blow in the wind like that. 


  73. AAPL – not sure why it's down today if the thinking / concerns are along the lines that costs will go up…. that 's a pretty silly premise.  below is an example of the thinking – I don't think AAPL would ever increase prices to move production to AMR… they would automate the hell out of their manufacturing an invest in the infrastructure and equipment and drive down parts.   The headcount component to manufacturing panels is relatively low compared to the fixed costs ….  Same with the phone mfg.

    https://www.thestreet.com/story/14245745/1/here-s-how-much-more-you-d-have-to-pay-for-apple-s-iphone-if-it-were-made-in-america.html?puc=yahoo&cm_ven=YAHOO&yptr=yahoo


  74. AMZN--please no tease..

    already recovering dangit!!


  75. .40 a share for a 1000+ share price sounds about right in these markets.  That's why I don't touch AMZN on the short side and unfortunately for now have not touched them on the long side either.


  76. Hell of a comeback for the Dow into the close.  

    AMZN misses – I feel better about the World…

    AAPL/Batman – Just part of the general profit-taking that went on at 6,000 on /NQ.  Also, don't forget it's Trump that says AAPL is opening plants in the US, not Tim Cook.  Take it for what it's worth. If Trump means the Foxconn factory – it's not APPL's problem where they make the phones – they just want them made cheaply.  Speaking of which, here's the joy of being an Apple supplier:

    Apple supplier Japan Display seeks $890 million to fund restructuring: source

    If Donald Trump Is Right, How Many Jobs Would 3 Apple Factories in the U.S. Really Create?

    0.40/Rustle – Sure but if you extrapolate that out to $2/year – the p/e is only 500!  


  77. that is stating opinion as fact. I think it will be adopted FASTER without regulation. So I disagree with your OPINION.


  78. Phil / IMAX – thanks for the feedback… am proceeding with the puts / calls


  79. MON – dicamba looks to be a problem…like many others they have had. When will they be held accountable? Downturn ahead?  http://www.npr.org/sections/thesalt/2017/07/06/535669282/damage-from-wayward-weedkiller-keeps-growing


  80. GNC / PHIL

    Year-to-Date Performance

    For the first six months of 2017, the Company reported consolidated revenue of $1,285.8 million, a decrease of 4.2% compared with consolidated revenue of $1,342.1 million for the first six months of 2016. Revenue in the U.S. & Canada segment decreased 4.3%, revenue in the International segment increased 3.9%, and revenue in the Manufacturing / Wholesale segment decreased 8.8%, excluding intersegment sales. 

    For the first six months of 2017, the Company reported net income of $39.5 million, compared with net income of $114.8 million for the first six months of 2016. EPS was $0.58 for the first six months of 2017, compared with $1.62 in the first six months of 2016. Excluding long-lived asset impairment charges and a legal charge in the current year period and gains on refranchising in the current and prior year periods, adjusted EPS was $0.77 in the six months ended June 30, 2017 compared with $1.48 in the six months ended June 30, 2016.

    GNC – This is a very good quarter.   SSS are down less than 1.2% vs -3.9% and YTD EPS of .77 puts them on track for 1.45 to 1.55 EPS for year – at  8X this is 12 and 10X 15.  They have great traction on the new customer program.  Rev was down in the mid single digits but but at a lesser rate than last QTR.  

    They are still carrying a ton of debt 1.5B. FCF is not great but improving.

    The shorts were heavily into this at close to 40 %, so the pop may have been due to this.  Phil do you think this worth a bigger stake?  

    I pick up a few thousand shares at 10.1 avg and sold the Dec 11 calls for 1.3 covered ….  

    Phil, does this earning change your price target?  


  81. Phil are you still shorting CL overnight into tomorrow and if so what is your current position please? 


  82. JM2C, but I think it's a bad trade to short oil here short term.  Everything I see has it reaching for the 200 DMA tomorrow at mid 49's.  Support will for sure be coming 48.40's.  But that's just me.


  83. Although a UK incident, I think this is a great example of Trump supporters vs. Liberals.  https://www.youtube.com/watch?v=ZIjO0Kp_lXU  


  84. Opinion as fact/BDC – You're right, sometimes I get confused between things that have already happened and things I can see clearly are going to happen.  angel

    AMZN $1,015 – that's more like it (5% Rule).  You have to give the dip buyers a chance to shine on the way down…

    You're welcome Batman.  I know it's frustrating to only make a little on a recovery but, if you use that technique to avoid losses before doubling down – you'll conserve your firepower and limit the amount of times you take a sharp loss – which is just as good as winning more often.

    MON/Scott – I guess, to some extent, it's a fine line between poison and pest control.  It's kind of like chemotherapy for plants – they have to put them very close to death to eradicate the blight but it never quite does the job.  The difference is, MON seems to work very hard to keep bad drugs on the market – even after they are found to be killing the patients or, in this case, neighboring patients.  

    Dicamba is not a new weedkiller; it's been around for 50 years. It's being used in a new way, though, because the biotech company Monsanto is now selling new soybean and cotton varieties that have been genetically altered to tolerate dicamba.

    Farmers are spraying dicamba on those new crops, and they report that it's working great, killing weeds that farmers have struggled to control lately.

    The problem is, dicamba doesn't always stay where it's supposed to. In hot weather, dicamba turns into a gas that apparently can drift for miles. And soybeans that haven't been specifically engineered to tolerate dicamba are extremely sensitive to it.

    Tom Burnham, who farms land in Mississippi County, Arkansas, and across the state line in Missouri, is one of the farmers pushing for a ban on dicamba spraying. "This technology cannot be allowed to exist," he says. "It cannot co-exist with other crops."

    In theory, if every farmer bought Monsanto's dicamba-tolerant soybeans, then their crops all would be safe from dicamba drift. But Burham says "it's ludicrous to expect everybody to plant this, just to defend themselves. And that doesn't address vegetable growers, people with orchards, people with vineyards. They're going to be economically harmed, too."

    Other farmers, meanwhile, who've bought dicamba-tolerant seeds and want to use the chemical, have argued for their right to spray dicamba.

    Monsanto's head of crop protection, in an interview posted on the site of CropLife, an industry website, said that farmers were still learning how to use dicamba safely. The current problems, he said, were "just part of the learning curve."

    I used to knee-jerk blame MON for these things – but I've learned how complicated they dynamics are.  There is an inherent evil to the idea that the use of their spray by some farmers causes the need for their crops by the rest of them…

    GNC/Batman – Long-term turnaround in very early innings.  We bought GNC for $9.80 (after doubling down from 12/16 at about $6) and sold the 2019 $5 calls for $3.70 and the $7.50 puts for $3.40 so we netted in for $2.70 with a call away at $5 for a near double – that's not particularly bullish, more like we were calling a bottom.

    In fact, that's a good example of what I was talking about re. IMAX after the fact.  We "only" had 3,000 shares of GNC at $12ish ($36,000) but, when they pulled back, we got defensive first and moved to drastically lower our basis so that, even if we now end up getting assigned another 6,000 at $7.50, our net entry drops to $5.10 ($61,200).  THEN we are doubled down (quad really) but at such a low basis that we're very unlikely to regret it.  

    As it turns out, they are blowing past our target and now we'll simply make 6,000 x $2.30 = $13,800, which is more than 20% of our worst-case scenario and 85% of the $16,200 cash we have at work.

    And we conserve all that CASH!!! to take advantage of other opportunities.

    Oil/Craigs – Just got back from dinner in NYC, glad I missed the after-hours rally and yes, I'm still short 16 now @ $48.60 but I'm keeping a really tight stop on the last 6 but my intention is to get back to 5 when even and those I have conviction for through this fall cycle.  

    Oil/Burr – I'm looking more at the big-picture into the Fall and I don't think OPEC has done enough to support $47.50 and, very likely, $45 will be seen again before the year ends – I just want to be there when it happens.

    From  $100 to $40 is $60 so the weak bounce is $52 or $100 to $30 (last year's low) is $70 and weak bounce is $44 and strong is $58 – that's pretty much what happened and, so far, $44 has held on the pullbacks but we keep testing it and we failed at $52 so I think the next move is a break back below $44 – especially as we only got to $52 through drastic manipulation (the OPEC cutback) while the overriding glut of supply and anemic demand pictures remain.

    Keep in mind that a big part of oil pricing is based on the marginal barrels – there are no marginal barrels if OPEC is purposely withholding 1.6Mb/d – why should there be a fear premium in the price of oil when there's no chance of a sustainable supply shortage (because it's so easy to turn the taps back on)?  Since $45(ish) oil has persisted since 2015 – it's hard to make a case that $50 is the "right" price for oil anymore.  

    Farmer/Latch – That's kind of funny.  Oscar-winner Emma Thompson was one of the people getting sprayed!


  85. This Canadian stock blogger lady is some kind of crazy:

    http://www.myfirst50000.com/2017/07/saying-sad-goodbye-exchange-income.html

    ($EIF, $CM, Cohodes) 


  86. Energy analysts are getting worried about oil drillers' spending again

    "Like any high-growth, capital-intensive investment, the first years are a poor indicator of future profitability," wrote Andy McConn, analyst at Wood Mackenzie. "To date, high early-life costs have weighed on cash-flow metrics, but tight-oil producers have made great strides in honing technology and reducing costs."

    Wood Mackenzie said some of the top shale producers could generate positive cash flow by 2020. But it too warned that a focus on growing production could destroy value.

    "By prioritizing production growth over profitability and margins, investors and producers are at risk of killing their goose before it lays a golden egg," according to Wood Mackenzie analyst Benjamin Shattuck.

     

    USGC refiners expect heavy crude market to tighten as flows slow and if Venezuela sanctions are enacted

    Don't wait until Monday—the new Capitol Crude will be out Friday to look at how US sanctions on Russia and Venezuela could affect flows

    We're releasing Capitol Crude early to take a look at US sanctions on Russia, Venezuela & more. Find the link here on Friday ?

    joins other Asian refiners who have been sourcing because of favorable economics

    China's imports have multiplied from just about 34,034 b/d a year ago. Should suppliers be worried?

    Mexico's Pacific port of Lazaro Cardenas eyes expanded storage capacity for imported , ,

    assesses the key statements made at Monday's /non-OPEC ministerial meeting

    affect US consumers directly at the pump. Could it change under Trump? Capitol Crude

    Saudi minister Falih did his best to restore market confidence at Jul 24 /non-OPEC committee meeting

    Despite strong signals from Saudi OSPs, these grades still hold a discount to US sour crude . Snapshot video

    EIA: U.S. production expected to reach record high in 2018. Learn more:

    welcomes Senate support for U.S. offshore development. Read it here:

    joins , in promising more cuts. Read more:

    The market is chaotic, whether likes it or not. https://www.bloomberg.com/news/articles/ via

    Oil barons face death by electrification. Like the end of Kodak, it will come in a rush.

    The twin announcement by France and Britain – within two weeks of each other – to ban sales of petrol and diesel cars by 2040 is an earthquake in the energy world.

     

    Others are moving in parallel. A non-binding resolution of the German Bundesrat [its upper house of parliament] has called for a prohibition by 2030. Norway already has such a target by 2025 and the catalytic effect is spectacular: sales of electric vehicles (EVs) reached 42 per cent of all cars in July.

    China's new plan stipulates that zero-emission vehicles must make up 8 per cent of total sales next year, rising to 10 per cent in 2019, and 12 per cent in 2020. This is an even bigger earthquake. Those German and Japanese manufacturers that do not yet produce EVs – or not enough – face being shut out of the world's largest car market.

    Once governments reset policy in this fashion, markets rush to take advantage. They accelerate the timetable. The inevitability factor turns against the status quo and shifts with pent-up force in a new direction.

    There will be 20 models with a 200-mile range in the US market alone by 2020. Sweden's Volvo will by then have stopped producing petrol cars entirely, citing a customer revolt against petrol vehicles.

     

    It is still an article of faith that haulage and trucking cannot be electrified at viable cost, but this too is absurd. Of course it can. Nikola Motor Company in the US has already unveiled an 18-wheeler with a Tesla battery that can run for 1,200 miles (1,930 kilometres) with the help of a hydrogen fuel-cell generator.

    Dirty bunker fuel for the 700,000 ships afloat is next in line. Scandinavia already uses electric ferries for short trips. Diesel-electric motors driven by liquefied natural gas are expected to capture a chunk of the market.

    Boeing is even working on electric aircraft for short-haul commuter flights. One by one, the arguments are crumbling.

    Interesting, Scott.  


  87. Thank you John McCain.


  88. Debt Rattle – a daily collection of articles from the Automatic Earth folks..  always some interesting links:

    https://www.theautomaticearth.com/2017/07/debt-rattle-july-28-2017/


  89. Good morning!  

    Dow has barely fallen but /NQ is down 50 and /TF and /ES down 0.33%.  Europe is down 1%, so that's not helping.

    Oil back to $49.10, /RB testing $1.65 but too scary to short into the weekend.

    Anthony Scaramucci uses vulgar language to lash out at Priebus, make fun of Bannon in interview

    Scaramucci Wants To "Kill" Leakers

    Amazon(AMZN) shares fall after big earnings miss

     

    • One of the most important economic releases for July will be published this morning.
    • Investors will be watching the preliminary estimate of second quarter GDP, which will indicate how well the economy bounced back from a lackluster 1.4% revised growth rate in Q1.
    • "The market is looking particularly for a pickup in consumer spending," said Boris Schlossberg, managing director at BK Asset Management. "The results will be vital to the Fed policy going forward."

    Here’s why the GDP report could have a ‘massive effect’ on markets

    Jeff Gundlach buys S&P 500 puts, eyeing gold

    Intel(INTC) shares rise then settle after earnings beat estimates

    Digital Currencies Are Nothing But An Unfounded Fad" Howard Marks Calls Bitcoin "A Pyramid Scheme"

    Total Government And Personal Debt In The U.S. Has Hit 41 Trillion Dollars ($329,961.34 Per Household)

    Rents Across The US Hit A New All Time High

    • Valero Energy Partners (NYSE:VLP): Q2 EPS of $0.69 misses by $0.06.
    • Revenue of $110.55M (+26.1% Y/Y) beats by $2.44M.
    • Press Release
    • Russia has ordered the U.S. to cut its embassy and other personnel in the country and ousted it from properties in Moscow, retaliating against the passage late Thursday of a new sanctions bill in Congress.
    • The measure, which also imposes penalties on North Korea and Iran, passed the Senate on a 98-2 vote, although President Trump hasn't yet indicated whether he will sign the legislation.
    • Tesla (NASDAQ:TSLA) will hand over Model 3 keys to the first 30 customers tonight at a party which will be livestreamed starting at 8:45 p.m. PT.
    • How to trade the event? If history is any guide, Tesla shares tend to fall once the rubber meets the road.
    • The stock dropped significantly the week and month after both of the last two releases: The Model S in 2012 and Model X in 2015.
    • Sending a cheer through the retail sector, U.S. Republicans leaders have abandoned the idea of a border adjustment tax, as part of an effort to present a united front for a broad tax overhaul.
    • "While we have debated the pro-growth benefits of border adjustability, we appreciate that there are many unknowns associated with it," Steven Mnuchin, Paul Ryan and Mitch McConnell said in a statement.
    • Fiat Chrysler (NYSE:FCAU) has come full circle on electric vehicles, with its once-skeptical CEO saying he's now ready to embrace them.
    • On a conference call with analysts, Sergio Marchionne said Fiat's premium Maserati sports cars will begin introducing electric-engine powered models after 2019 and that by early next decade more than half of the brand’s cars will be electrified.
    • Ready for liftoff… SpaceX (Private:SPACE) has disclosed a new $351M fundraising round that would likely bump its valuation to $21B, up from the $12B it was valued at in early 2015.
    • If the company completes the financing as planned, it would propel it towards the top of the list of so-called unicorns, or private tech companies with sky-high valuations.
    • Qatar wants the United Nations to have a greater role in resolving its standoff with a Saudi-led alliance after U.S. and U.K. efforts to find a solution among the parties reached an impasse.
    • "It's all about violation of international law and infringing the sovereignty of the state of Qatar," Foreign Minister Sheikh Mohammed bin Abdulrahman Al Thani told reporters. "This is the right place where we have to start to seek our options."
    • Unable to pass even a so-called "skinny repeal," it's unclear if Senate Republicans can advance any health bill.
    • The tally overnight was 49-51, with three GOP lawmakers voting against the bill, which would have repealed a medical device tax, along with individual and employer insurance mandates.
    • In a floor speech following the defeat, Senate Majority Leader Mitch McConnell said "it is time to move on."
    • Sprint (S -4.2%) is still talking with cable giants Comcast (CMCSA +0.2%) and Charter (CHTR+5.2%) about teaming up on mobile service somehow, Bloomberg reports, even as a two-month exclusivity deal on talks runs out today.
    • That arrangement was seen as putting discussions of a T-Mobile (TMUS -1.2%) merger on hold.
    • So Sprint and T-Mobile can resume talking, but the cable companies are still discussing a service-resale deal that would make them essentially MVNOs, and would come with an equity investment in Sprint from the two.
    • The cable companies have an MVNO arrangement with Verizon (VZ +7.7%), but Sprint's deal would come with more favorable terms than that, according to the report.
    • And such a deal wouldn't preclude Sprint pursuing a T-Mobile merger.
    • Baidu (NASDAQ:BIDU) is up 7.2% in after-hours trading after its Q2 results beat across the board, with "strong progress" by Mobile Baidu and the company's Feed product.
    • Operating profit rose 47% to 4.21B yuan ($621M). Net income rose 83% to 4.415B yuan ($651M).
    • EBITDA of just over 6B yuan (about $886M) was up 41.4% and easily cleared expectations for $631.3M.
    • Revenue breakout: Online marketing services, 17.88B yuan (up 5.6%); Other services, 2.99B yuan (up 126%).
    • Cash, equivalents and short-term investments were 92.15B yuan (about $13.59B); net operating cash was an inflow of 663B yuan ($977M) and capex was 1.125B yuan (about $166M).
    • For Q3, it sees revenues of 23.13B-23.75B yuan ($3.41B-$3.5B) — gains of 26.7%-30.1% (or, excluding mobile games, 29.1%-32.6%).
    • Conference call to come at 8 p.m. ET.
    • Press Release

  90. tsla…uh oh..

    think it flies on Monday?