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Monday’s Mandarin Meltdown – Chinese Markets Make New Lows

China's markets fell 2-3% this morning.

Losses for Chinese companies came after the yield on the nation's 10-year Treasury note ended unchanged at 3.98%, trading within a striking distance from its three-year high.  "Whether the selloff is a slight correction after a strong surge in 2017, or steeper declines on the way, remains to be seen," Hussein Sayed, chief market strategist at FXTM, wrote in a note. "However, rising bond yields, particularly junk bonds, should keep investors worried."  “The Chinese stock market drop is reminiscent of the selloff that we saw in the summer of 2015, and that is causing some investors to become cautious going into the thin year-end markets,” said ING currency strategist Viraj Patel, in London.

South Korea's market also took a tumble, finishing the day down 2.4% and led down by Samsung's 5.1% drop but that was nothing compared to Qudian's (QD) 20% pullback (see chart above), now down more than 60% since their IPO last month and a great example of what I was talking about last week, when I said we need to be concerned with how much of our own US Markets are now indexed against Chinese companies of EXTREMELY QUESTIONABLE valuations.  

Image result for china debt 200% gdpNow that we've established that I do know how to connect a few dots, I will once again point out that China is only the second-most indebted nation on a debt to GDP basis (maybe higher by some counts) and the massive debt taken on by their Corporations is the Global Catastrophe in the on-deck circle.  Japan is still the king at about 265% while the Trump Tax Plan will do a great job of catching us up, by putting us on a path to 200% debt to GDP in just 10 years.  

At a 4% interest rate, servicing $20Tn in debt that we now have would take $800Bn.  At $40Tn, we'd need $1.6Tn a year just to make our interest payments – that would be 1/2 of all the taxes our Government currently collects and far more than half after Team Trump performs their massive tax givaway to the Top 1%, leaving the Bottom 99% holding the bag for all the new Debt and subsequent interest – keeping your children and grandchildren in wage slavery forevermore.  

You KNOW inflation is real – no matter how much the Fed may deny it.  Investors know this too and are no longer willing to loan Governments money at less than 2% interest rates as that's effectively negative to even the lowest of forward inflation forecasts.  We're not surprised this is happening – only that it took so long to finally happen…

Combine irresponsible spending (on Tax Cuts) with irresponsible collections (more Tax Cuts) and your credit rating goes down as you are on the path to becoming Greece.  Randy Levine, President of the NY Yankees and major Trump supporter just asked the President to stop the madness and rework this monstrous Tax Reform Bill before it destroys the country:

"This is a plan that helps Wall Street, hedge funds, private equity managers, real estate and oil and gas partnerships and individuals who disguise income as profits or distributions.  In fact, some of those entities keep money offshore and don't pay any tax at all. Not surprisingly, some of the largest supporters of these bills are donors who come from those industries.  No one wants to penalize them, but they should not be given benefits which are far greater than those given to others. This plan does not help many individuals who earn their income and report it as such.

"It is wrong to eliminate or limit property tax, mortgage and interest deductions. Hardworking people have relied on them for years, this is how they afford to buy homes and build nest eggs in the equity of their homes.  These proposals erode that equity, equity countless numbers of Americans rely on for retirement. These current bills will be extremely harmful to those who live in the suburbs and small towns.  Similarly, the removal of the state and local tax deduction is a de facto tax increase for tens of millions of Americans. The argument that other states should not subsidize big government states is a complete red herring."

It may all be too little, too late as the Senate is planning to rush a vote on the bill this week unless you call (202) 225-3121 and tell them to stop it.  There are the 10 swing Senators that matter most in the upcoming vote – hopefully we can sway a few of them to put a stop to this madness.  There's a great campaign called 5 Calls, which is gaining traction on this and other issues.  

Only 1 out of 42 Economists surveyed by the University of Chicago said the Trump Tax Bill would increase economic growth substantially – that's actually an even worse percentage of Tax Believers than there are Climate Deniers!  Without that growth, our National Debt will quickly balloon to unsustainable levels, rates will rise and the country will tumble into a recession we may not be able to cut our way out of – because we already gave all the money to the Top 1%.  This is simply idiocy, folks – we HAVE to stop it!  As noted by Bill Cohan – "It's a Ponzi Scheme."  

As you can see from the Dollar chart, we're already tumbling against other currencies as Trump promises passage of his Tax bill is imminent.  The Dollar has fallen another 1.5% since Wednesday and that, more than anything, is what's holding up our markets this morning.  Fortunately, we knew this was coming and, in our Live Member Chat Room last Tuesday, I noted:

  • Oil back to $56.50 but too scary to short.  /RB just under $1.75, probably a better long than short into the weekend. 
  • Still likin' coffee in the morning (/KCH8) at $125 
  • /YG looks good at $1,278.  I'd play long over $1,280.  /SI is always a buy at $16.90.

Oil topped out at $59 with an OPEC meeting this week aiming to get them to $60 (where we'd love to short) and Gasoline (/RB) hist $1.79 for a $1,680 per contract gain while Coffee (/KCH8) hit $130 for gains of $1,875 per contract and Silver (/SI) is now $17.15 for $1,250 per contract gains and Gold (/YG) is at $1,297 and that's good for gains of $547 per contract (so far).  

As we noted on Wednesday, we're down to our Final 5 contenders for our 2018 Trade of the Year and I'll be announcing it to our Members by Tomorrow and to the public soon after.  Our Trade of the Year is the options spread that is most likely to return 300-500% in two years or less and WE'VE NEVER MISSED A CALL!  So we're expecting to keep the streak alive in 2018 though I'm not very excited about setting up new trades in what is very likely to be a January correction. 

It's a busy data week and yes, we still have earnings trickling in and still plenty of playable names:

There's going to be 11 Fed speeches and the Beige Book along with GDP on Wednesday so plenty of market-moving info that won't move the market as long as people think the Tax Cuts are going through, making it silly to take profits in 2017 when they'll be taxed at higher rates.  As long as the Top 1% are willing to hold onto their equities – the market will continue to drift along at the highs into the year's end but look out in January – as it will be every man for himself to start the year off with a bang.  

 


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  1. How Blockchain Technology Can Revolutionize the Cannabis Industry



  2. The Top-Earning Dead Celebrities Of 2017


  3. Meaningless volume last week!


  4. That BABA $25B Single day sale doesn't look suspicious at all following our $3.5B online black Friday sale here in the US! Of course, last year sales for BABA were $30B so it was all in one day. 

    Maybe the Bitcoin bubble is being inflated by Chinese investors looking for safer havens.


  5. And WTF, what 70 year old billionaire and POTUS needs that constant recognition… Has to be Person of the Year every year? Of use fake covers. Reminds me of my kids when they were 5!


  6. Chart of the day:

    http://ritholtz.com/2017/11/revenue-streams-big-5-tech-companies/

    MSFT, best diversification!


  7. I guess we can't trust reviews on Amazon:

    https://www.bloomberg.com/news/articles/2017-11-24/amazon-merchants-still-find-new-ways-to-cheat-in-shopping-frenzy

    He visited the product page on Amazon.com and suspected he was the victim of "sniping," when one merchant sabotages another by hiring people to leave critical reviews of their goods and then voting those reviews as being helpful, making them the most prominent feedback seen by shoppers. Freelancers in China and Bangladesh willing to do this for $10 an hour are easily found online. Even though the toy has a 4.8 star rating out of 5 based on more than 1,100 reviews, shoppers first see a string of critical one-star reviews and many may get scared away.


  8. TEVA not divesting oncology/pain assets (don't have a web link-is a Bloomberg story).

    https://www.haaretz.com/israel-news/business/1.825103


  9. Good Morning.


  10. Phil-interesting story.  Seems unlikely we will see a mass exodus, but the banks have relocated a lot of employees to cheaper locales in order to cut costs and not have to pay as much to attract talent.  Believe you posted a story not too long ago about banks in London allowing more telecommuting and remote work in order to cut real estate expenses.  I've heard some of the same rumblings in NYC where subletting seems to be picking up.

    https://www.bloomberg.com/news/articles/2017-11-27/in-greenwich-and-manhattan-tax-hike-fears-fuel-talk-of-exodus


  11. Anyone see Joshua Brown's story on Thursday?  "Asscoin" ruined my  turkey dinner, but afterwards I stood on my head and spit nickels.


  12. Phil — are you still working the DX longs at 92.75?  Think it depends on whether the Fed is going to hike or not.


  13. Phil/GE

    In LTP, you doubled the shares and then rolled the puts and calls, but you did not double the puts and calls, correct?  You are waiting for something….?


  14. VRX – Up more than 50% from early November lows.


  15. Good morning!  

    Hopefully another chance to short /TF at 1,525 on this silly morning pump-job.  I'm hoping for another nice spike back to 1,500.   We want to see /ES failing 2,600 though before getting short. 

    /DX long over 92.50 with tight stops is always a fun play too:

    If it wasn't for the OPEC meeting, I'd be shorting oil and gas.  My observations from travel on Weds and Sun indicated this was a disappointing travel weekend.  

    Big Chart – Nas is parabolic.  Nothing bearish about that chart – which is why people will be so surprised when we sell off.

    Bitcoin/StJ – Meant to make that point on them.  There's an article going around that 4M (out of 21M) bitcoins are "gone" and not coming back which then, by inference, makes the remaining 17M 20% more valuable.  That's where this rally came from.

    Exclusive: Nearly 4 Million Bitcoins Lost Forever, New Study Says

    TEVA/Seer – And up 5% this morning on that news.  

    Banks/Seer – For sure.  If State Taxes aren't deductible or real estate taxes then we're talking about $100/yr for a $1M salary person to stay in NY/NJ/CT and there's no way that people won't be moving based on that math.  That will, of course, simply drop more of a burden on the bottom 99% who remain as the states need to redistribute the tax base so thanks Trump!  

    Unfortunately for Republicans – all those rich liberals will be moving to red states and turning them blue.  It's a very stupid long-term strategy but I guess they expect to have a monarch established by then.  

    Brown/Baron – Have a link?

    /DX/Latch – Yep, one of the other currencies is bound to screw up plus the Fed will hike.

    GE/Baron – Don't need more puts and waiting for a bounce to sell more calls.  








  16. AMZN – Still rolling short puts up and out. Wish I had been brave enough to have bought calls.




  17. Phil/BDC/BTC

    I finally received my Bit coins worth $1000 in my coinbase and today I transferred it to my coinexchange.io account using the "send" menu and using the BTC deposit address.

    I could see the transaction as pending in my coinexchange.io account and says it is waiting for 2 confirmations. 1 is done and 1 is pending. Is there something that I need to do or is it automatic confirmation? Also I could see the GRE wallet as offline but there is a button to create a new GRE address. So can I have multiple deposit address for GRE? if yes then why are we not creating a new GRE address instead of waiting for the existing GRE wallet to come online?

    thanks as always

    Regards


  18. My wife is killing it with AMZN; she's going to fire me, a la Trump style.  Maybe if I'm lucky she will grab me on the way out too.



  19. Coin stuff/Pat – Wish I knew the answer but I just tell Greg to buy some coins and he says "sure" and then we have coins.  Seems simple enough on my end…. cool

    AMZN/Baron – Almost time to short them again:

    Jan $1,250 calls can be sold for $22 and that pays for most of a Jan $1,250 ($63.50)/$1,200 ($34.50) bear put spread at $29 for net $7 on the $50 spread.  

    Thanks Baron – good summary. 

    Quick 6 points from /TF so 1,520 is now the stop.  

    /YM 23,600 is a fresh horse short to the downside.  Good if /ES stays under 2,605. 


  20. From Briefing :

    ~~TEVA : Reuters reports that co wrote a letter to Israeli parliament indicating that it needs to take significant actions to secure its future; appoints Michael McClellan as Executive Vice President and CFO.


  21. Phil/GRE

    ok. Can greg offer some input on whether I can create a new GRE deposit address and convert bit coins to green coins? I have received the coins now.

     

    regards


  22. Comment content omitted because it is too long.


    • There could be some blowout numbers in store for Cyber Monday in the U.S.
    • First Data president Guy Chiarello tells Bloomberg TV that e-commerce traffic was up over 30% Y/Y for the first couple of hours of the shopping event. The strong showing follows the record $5.03B brought in during Black Friday by retailers.
    • Amazon (NASDAQ:AMZN) is up 1.05% in premarket trading, while Wal-Mart (NYSE:WMT) and Target (NYSE:TGT) are also both tracking higher. The blazing e-commerce growth isn't wrecking the mall sector, with American Eagle Outfitters (NYSE:AEO), J.C. Penney (NYSE:JCP), Kohl's (NYSE:KSS) and Urban Outfitters all showing gains of 1% to 2%. Shopify (NYSE:SHOP) is up 3% in early action.
    • Two retail names to watch today are Best Buy (NYSE:BBY) and GameStop (NYSE:GME) as the first reports on consumer interest in electronics start to pour in.
    • Sources: Adobe, Bloomberg
    Yet BABA claims $25Bn in a day???  Promising start to holiday sales season
    • U.S. retailers raked in a record $7.9B in online sales on Black Friday and Thanksgiving, up 17.9% from a year ago, according to Adobe Analytics.
    • Cyber Monday is expected to drive $6.6B in internet sales, which would make it the largest U.S. online shopping day in history.
    • Another big winner? With Amazon (NASDAQ:AMZN) shares hitting a record high on Black Friday, Jeff Bezos's net worth surpassed $100B.
    • October New Home Sales: 685K vs. 620K expected, 645K prior (revised).
    • October new home sales came in at a seasonally adjusted annualized pace of 685K. That's up 6.2% from September's (revised lower) 645K pace, and 18.7% above October one year ago. Economists had predicted a decline from September to 620K.
    • Taken together, the average of 665K for September and October is up markedly from the 600K pace of the first eight months of the year.
    • Full report
    • The homebuilders are are up a hair following the news.

    Crunch time for a Senate tax vote

    • The Senate tax bill is headed for an extended debate this week with the aim to hold a floor vote as early as Thursday.
    • Should it pass, Republican leaders will have to hammer out a compromise between different provisions in the House and Senate bills.
    • President Trump has also signaled he will be more personally involved in the final push.

    Sen. Franken says he's 'embarrassed and ashamed' but will return to work on Monday

    Republicans Rush to Shore Up Support Ahead of Senate Tax Debate. Republican lawmakers are scrambling to lock up the votes need to finalize a tax bill that can make it to President Donald Trump’s desk by the end of the year, days before the Senate prepares to debate its version. “I hope we can get it done by Christmas,” Senator Tim Scott of South Carolina said Sunday on ABC’s “This Week.” “If not, we’ll be here through Christmas, looking at the end of the year.

    Tax Reform, Growth and the DeficitA U.S. growth rate of 1.9% will never balance the federal budget.

     

    Bond Traders Start to See Crack in Fed's Resolve About InflationTraders are about to find out just how worried Federal Reserve officials are about the outlook for inflation. The depth of that angst has ramifications for the U.S. bond market’s dominant trend: the flattening yield curve. Fed Chair Janet Yellen and the nominee to succeed her, Jerome Powell, lead a busy lineup of central bankers speaking this week. They may opine on inflation after minutes of their most recent meeting published last week showed several policy makers were concerned about low expectations for consumer-price gains and underscored that further interest-rate hikes will hinge on economic data. It’s only fitting, then, that the Fed’s preferred gauge of price growth will also be released this week, with a survey of economists indicating it’s likely to slow to a 1.5 percent year-on-year pace.

    • The economy is apparently humming along and interest rates – while rising – remain low, so what gives? According to FDIC numbers, 12-month loan growth rate fell for the 6th straight quarter in Q3 to its weakest since the end of 2013.
    • Digging deeper, the growth rate of business lending fell to its slowest since the start of 2011.
    • Combine slowing loan growth and a flattening yield curve, and one wonders about the prospects for bank earnings next year. "The plane used to be flying at 30,000 feet, now it’s at 10,000,” says FIG Partners' Chris Marinac. "There are many banks that are concerned about how much they can grow the loan book in 2018.”
    • Checking individual players in Q3, JPMorgan (NYSE:JPM) and BofA (NYSE:BAC) saw loan growth of 3% Y/Y, while Citigroup (NYSE:C) had 2%, and Wells Fargo (NYSE:WFC) posted a 1% decline. Smaller banks hardly fared better. Loans were about flat at BB&T (NYSE:BBT), with CEO Kelly King saying clients seemed more interested in raising money in the bond market to pay down bank loans.
    • Source: Christina Rexrode at the WSJ

    Bitcoin: 5-Part Summary On What Bitcoin Is And Its Value 

    Told you so!  A contrary voice on Square – BTIG cuts to Sell

    • Analyst Mark Palmer steps right in front of Square (NYSE:SQ) rally train, downgrading from Neutral to Sell. His $30 price target suggests nearly 40% downside.
    • Square is more than a three-bagger this year, with the latest catalyst being the addition of Bitcoin functionality.
    • "Emphatic and unimpeded growth" is already priced into the shares, says Palmer, but competitive and credit-related macro risks did not disappear just because the company is getting into the trendy cryptocurrency.
    • Palmer's $30 price target is based on 20x his 2020 adjusted EBITDA estimate of $610M.
    • Shares down 2.8% premarket to $47.50.
    • There can be no final decisions on the future of the Irish border until Britain and the EU have reached a trade agreement, according to U.K. Trade Minister Liam Fox.
    • The comments came after Brussels warned that trade talks cannot proceed unless an agreement is reached with Dublin and as Ireland's EU commissioner threatened to veto Brexit talks unless there were guarantees about the border with Northern Ireland.

     

    US And South Korea To Conduct Massive Air Force Exercise Aimed At North Korea

     

    • South Africa will use its annual budget next year to outline "decisive" policy and strengthen its fiscal framework after S&P cut the country's credit rating to junk status, while Moody's placed it on review for downgrade.
    • It comes after Finance Minister Malusi Gigaba shocked markets on Oct. 25 by flagging sharply weaker growth expectations, a wider budget deficit and rising government debt.
    • ETFs: EZA

     

    Not Even Egypt's Deadliest Terror Attack Can Faze Stock Traders. Holders of Egyptian stocks seem to have developed thick skin. The benchmark index rose 0.8 percent in Cairo on Sunday even after more than 300 people were killed in a militant attack in northern Sinai on Friday. “No one is in shock as investors have, unfortunately, become immune to such events,” said Ashraf Akhnoukh, the director of Middle East and North Africa sales trading at Arqaam Capital. Still, “there is negative sentiment triggered by the attack.”

    Upstate New York Mall Evacuated After Shooter Injures Multiple Victims

    Aramco Sees Oil Market Balanced as U.A.E. Dismisses Shale ThreatGlobal crude inventories are declining and supply and demand are in balance, according to the head of Saudi Aramco, while the United Arab Emirates energy minister said U.S. shale oil doesn’t threaten OPEC’s efforts to support the market. Demand for crude is continuing to rise and oil inventories are returning to the levels of the past five years, Aramco Chief Executive Officer Amin Nasser said Sunday in the eastern Saudi city of Dhahran. “This is helping prices improve,” he said, as the Organization of Petroleum Exporting Countries and allied suppliers prepared to gather this week in Vienna to assess the market.

     

    OPEC Plus Adds Uncertainty to Oil MarketRussia’s importance to a deal to extend oil export cuts means that it holds the cards for OPEC and the deal will be less certain?

    OPEC meeting countdown: RBC's Helima Croft sees a Russia factor creating downside risks in oil market

    Shell Joins Automakers to Offer Charging Stations Across EuropeRoyal Dutch Shell Plc is linking up with some of the world’s biggest carmakers to expand its electric-vehicle charging business in Europe as it prepares for life beyond oil. The second-biggest oil company has agreed with IONITY — a Munich-based venture between BMW Group, Daimler AG, Ford Motor Co. and Volkswagen AG — to start charging stations in 10 European nations, Shell said on Monday in a statement.


    • GE Healthcare (NYSE:GE) and Intel (NASDAQ:INTCannounce an expanded partnership for enhancing patient care through edge and cloud solutions while reducing costs.
    • GE Healthcare will use Intel’s Xeon Scalable platform to lower imaging device ownership costs by up to 25%. 
    • The platform and GE Healthcare’s imaging solutions will improve radiologists’ reading times with first image display dropping to under 2 seconds and full study load times falling under 8 seconds.
    • The two companies will also invest in the Joint Performance Acceleration Lab in Chicago. The digital development lab will develop, test, and validate a wide range of GE Healthcare Imaging hardware and software solutions.   
    • Previously: GE, Nvidia to partner in bringing AI platform to GE Healthcare (Nov. 26)
    • There's some skittish trading on some global airline stocks today.
    • China Eastern Airlines (CEA -4.4%) and China Southern Airlines (ZNH -6.1%) are both sharply lower to start the week.
    • Other global airline stocks trading down on the day are Cathay Pacific ADRs (OTCPK:CPCAY-2.3%, LATAM Airlines LATAM LTM -1%, Ryanair (NASDAQ:RYAAY-1.4% and Copa Holdings (NYSE:CPA-1.2%.
    • U.S. carriers are faring better. The U.S. Global Jets ETF (NYSEARCA:JETS) is up 0.07% to stay above the $30 mark.

    Rally for retail chains after consumers step up spending

    • Positive reports on mall traffic and sales has provided a lift to large number of retail chains.
    • A cross section of early gainers includes Express (EXPR +4.7%), Boot Barn Holdings (BOOT+3.2%), Francesca's (FRAN +3.6%), Buckle (BKE +2.4%), Gap(GPS +2.6%), American Eagle Outfitters (AEO +4%), Genesco (GCO +1.7%), L Brands (LB +3.2%), Guess (GES +0.5%), Nordstrom (JWN +0.4%), Tilly's (TLYS +2.8%), Chico's FAS (CHS +1.9%), Stitch Fix (SFIX+7.5%), Pier 1 Imports (PIR +3%), Zumiez (ZUMZ +3.7%), Sally Beauty Holdings (SBH +2.1%), Finish Line (FINL), Party City (PRTY +2.5%), Fred's (FRED +1.2%), Hibbett Sports (HIBB+2.2%), Burlington Stores (BURL +2.4%). and Big Lots (BIG +1.2%).
    • Shares of Macy's (NYSE:M) are slightly higher in early action as the department store chain looks to recover from a Black Friday credit card processing issue.
    • Despite reports of long lines and unsatisfied customers trying to check out, overall sales for Macy's on Black Friday appear to have been solid.
    • Analysts says Macy's went into this year's holiday season with tighter inventory control than in the past.
    • Macy's is up 0.81% premarket to follow on Friday's 2.13% gain.
    • Skechers (NYSE:SKX) is up 3.88% on solid volume after several investment firms call out strong traffic trends for the retail brand on Black Friday.
    • SunTrust's Pamela Quintiliano had Skechers listed as one of her retail winners for Black Friday.
    • Shares of Skechers hit a 52-week high of $34.94 earlier.
    • Lowe's (NYSE:LOW) catches an upgrade from Raymond James to Outperform from Market Perform.
    • The investment firm see compelling valuation on Lowe's when viewed on a historic basis.
    • RJ also likes the macroeconomic backdrop (rising wages, strong housing trend) for the home improvement sector. A price target of $87 is assigned to Lowe's.
    • Sources: CNBC and Bloomberg
    • LOW +0.45% premarket to $79.60.

    Teva shakes up management as it shores up operations; shares up 5%

    • Teva Pharmaceutical Industries' (TEVA +4.8%) new CEO Kåre Schultz takes decisive actionaimed at stabilizing the business. The company has realigned its operations and management aimed at increasing internal efficiencies and improving profitability.
    • Commercial operations, historically divided between generic and specialty medicines, will operate as one group across three regions (North America, Europe and Growth Markets). Each will be responsible for their own product portfolios including generics, specialty and over-the-counter.
    • Generic R&D and Specialty R&D will combine into one global group.
    • A newly formed Market & Portfolio function will oversee the coordination between the regions, R&D and operations throughout all stages of the product lifecycle aimed at optimizing the company's product lineup across all therapeutic areas.
    • Management responsibilities:
    • Interim CFO Mike McClellan will serve as EVP and permanent CFO.
    • Dr. Hafrun Fridriksdottir will serve as EVP, Global R&D. Previously, he was SVP and President of Global Generics R&D at Allergan.
    • Brendan O'Grady will serve as EVP, North America Commercial (formerly Chief Commercial Officer, Global Specialty Medicine).
    • Richard Daniell will serve as EVP, European Commercial (formerly President & CEO, Teva Generics Europe).
    • Gianfranco Nazzi, former President & CEO of Growth Markets Generics, will serve as EVP, Growth Markets Commercial.
    • Sven Dethlefs will serve as EVP, Global Marketing & Portfolio (formerly Global Head of Respiratory Medicines).
    • Dr. Michael Hayden, Dr. Rob Koremans and Dipankar Bhattacharjee will retire effective year-end.
    • Express Scripts (ESRX -0.5%) inks an agreement to sell subsidiary United BioSource to private equity outfit Avista Capital Partners for an undisclosed sum.
    • United provides pharmaceutical and patient support services including designing and executing clinical trials and generating real-world data used in the management of product lifecycles.

    3D Systems announces new med tech partnership

    • 3D Systems (NYSE:DDD) and the Radiological Society of North America announce a new D2P tech to help clinicians and radiologists create fast but accurate digital 3D anatomical models.
    • 3D will also develop Volume Victual Reality tech allowing physicians to upload patient scan data to D2P to immediately visualize datasets in VR.
    • 3D Systems shares are up 1.47%.

    Morgan Stanley downgrades TSMC, chipmakers fall

    • Chipmakers move after Morgan Stanley’s downgrade of Samsung and Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) from Overweight to Equal Weight.
    • The firm commented on NAND prices dropping in Q4 and uncertain DRAM dynamics beyond 1Q18 and related shares are dropping. 
    • TSM shares are down 2.3%
    • Other chipmaker movers: Western Digital (NYSE:WDC) is down 3.7%, Micron (NASDAQ:MU) is down 2.6%, Applied Materials (NASDAQ:AMAT) is down 1.2%; Lam Research (NASDAQ:LRCX) is down 1.6%.     
    • Previously: Morgan Stanley cuts view on Samsung Electronics (Nov. 27)

    Pearson netting $100M with sale of Wall Street English

    • Pearson (PSO -1.4%) has agreed to sell its Wall Street English language-education business for $300M, the latest in a string of non-core asset sales to cut debt.
    • It's being bought by Baring Private Equity Asia and CITIC Capital, though Pearson's proceeds will be about $100M as $50M covers tax/net transaction costs and $150M retained in the business.
    • “The sale of Wall Street English is part of our continued effort to focus on a smaller number of bigger opportunities in global education and to become simpler and more efficient,” says CEO John Fallon.
    • The deal's expected to close in the first half of 2018.
    • Roku (NASDAQ:ROKU) is up 4% premarket after getting its price target raised to a street-high $50 from Needham's Laura Martin.
    • Roku's at $39.47, implying 27% upside.
    • She's boosting 2018 estimates and expects Roku to hit break-even in EBITDA in Q3 2018, a quarter earlier than expected.
    • "Like NFLX, we view ROKU as a pure-play on over-the-top (OTT) TV-viewing growth, but ROKU has no content risk. Recent announcements and press reports that DIS, GOOG, AMZN, etc. are launching new OTT services helps ROKU but hurts NFLX," she writes.

    UBS lowers iPhone sales, FY18 EPS estimates

    • UBS lowers its 2018 Apple (NASDAQ:AAPL) iPhone unit sales growth forecast from 12% to 10% following a customer survey.
    • Analyst Steven Milunovich writes that a survey of 6.7K smartphone buyers in five countries showed “flattish” buying intentions from last year, which hints at a “more muted” unit growth than expected.
    • The analyst notes that “F18 unit growth might not be explosive, but a rising ASP helps.”
    • Milunovich also lowers Apple’s FY18 EPS estimate from $11.65 to $11.50.
    • UBS reaffirms its Buy rating and $190 price target on Apple.
    • Apple shares are down 0.13%
    • Previously: Apple could release lower cost iPhone SE 2 in 1H18 (Nov. 22)

    The 25 best Cyber Monday deals of 2017 we found so far

    50 startups that will boom in 2018, according to VCs

    Self-Driving Cars And Deciding Who Lives And Dies – Sacrificing Your Family For The "Greater Good"


  23. GreenCoin/Pat – Greg said:

    Unfortunately I really don't know the particulars regarding coinexchange.io or the creation of a green coin wallet. (Chris talked me through everything 2 years ago, and it's basically one and done unless there's an issue.)

    Chris will have to chime in. 
     
    Greg

    Nice little drop in /YM to 23,550 – gotta take what little gains we can get on the short side.  

    /TF stopped out on bounce back over 1,515.


  24. Phil / TOO

    Just saw this regarding TOO.  

           Teekay Offshore Partners LP files for mixed shelf of up to $200 mln     

    Should this be perceived as a negative due to possible share dilution or is there a positive way to view it?

    thx!


  25. I know nothing should surprise me about this presidency at all anymore but how incredibly psychotic was it that Trump is now saying the Access Hollywood tape was fake and wasn't him.  He apologized for it, there are witnesses, he called it locker room talk and now it's fake news.  He is truly insane.


  26. Just added some more positions to my GILD Jan 20 BCS 62.5/80 @ 7.69 and selling the same amount of Jan 60 puts @ 6.75 for a net of .94 cents.


  27. DAX closed at 13,000


  28. Looks like HD has no ceiling 174.00


  29. @albo – VRX – how are you positioned?  I have a $10/$20 BCS and plan to DD if this goes back to $10, although I think if VRX manages to roll its upcoming debt, this will pop to mid $20s.  I just think the brand B&L in optics is just too strong to be selling at a PE of 4.


  30. WDC down 7% is it time to start selling some puts? Jan 20 75 put 11.60 any thoughts?


  31. TOO/Jeddah – Depends on the terms.  These are very vague but essentially they are reserving the right to sell 200M in securities of any type they feel like at whatever price they feel like so it depends how much you trust the management to look out for your minority shareholder interests.  Meanwhile, the worst case is a 20% dilution of your existing position though possibly at a lower price, which would dilute you further.  Then you have to consider that they burned through $207M in the last 4 quarters so, at that rate, this would only buy them a year at most.  

    Trump/Rustle – Mueller is closing in on his inner circle, which is also his friends and family.  Imagine the crap he is getting from them for getting them caught up in this debacle.  They could have just kept on being happy Billionaires but his ego put them all under scrutiny and now his lame-brained kids have left a paper trail from Russia right to the heart of his campaign.  Putin is probably on his case too about being so sloppy (and not having killed anyone yet).  It's real Game of Thrones stuff as Trump is dealing with a lot of other people who have power now – not a game he's used to. 

    DAX/Yodi – Slow erosion lately.  What's up with the Government?

    WDC/Yodi – All the semis are getting killed on MS downgrade (featured in Barrons, which gave it more attention).  They might have a point though. 

    Semiconductor stocks are taking it on the chin today, after Morgan Stanley’s Katy Huberty cut her rating on shares of Western Digital (WDC) to Equal Weigh from Overweight, based on an expectation that prices of NAND flash chips are peaking.

    Huberty expects NAND prices will fall 7% to 15% per quarter starting in Q1.

    In response today, Semiconductor Advisors analyst Robert Maire writes that the sell-off is evidence investors "twitchy trigger fingers,” and that after the stocks running up sharply, "More risk averse investors may view this as an early warning sign to get out and are probably less concerned about leaving money on the table than protecting current gains."

    The anomaly I see with them is forecasts that their net profit will jump from $1.4Bn this year to $4Bn next year, which would make their forward p/e very reasonable – if true.  


  32. Phil German Politics.

    My two cents it will go back to the same parties CDU CSU and SPD. There is only one difference. At the last elections they had 70 % of the seats and now they only have just over 50% however sufficient to have a majority. They cannot effort a new election, as the main parties would only lose more votes and even will fall under 50%.

    People are not happy how the uncontrolled immigration of "Flüchtlinge" has been handled. The Islam will become a problem in Europe. Germany has been a land of milk and honey for most refugees, and a breeding ground for ISIS.

    Most refugees will never work in Germany and they all get a fat income from the Government.

    Just over the thumb a family with 5 children will possible have a monthly income of 5x 250 for the children and possible 1250. For the parents. So about 2,500 €, free medical! So why the hell shall they want to work? More than the net income of middle class workers. So you will understand why Germans do not support the present parties any more.


  33. 2,500E/Yodi – Hmm, maybe I'll get my family on a boat!  I believe in universal income but it does fall apart when only some countries give it and get taken advantage of.  Still, German economy seems in great shape – seems silly to toss out the Government that got you there.  

    Mexico lower as Morgan Stanley goes underweight; finmin resigns

    • Ahead of what's expected to be a run at the presidency, Mexican Finance Minister José Antonio Meade has resigned his position. He's seen as possibly being named the presidential candidate of the ruling Institutional Revolutionary Party in February.
    • Citing political uncertainly ahead of the 2018 elections (though not having to do with Meade's resignation, which was expected), Morgan Stanley trims its outlook on Mexican shares to Underweight from Neutral.
    • The iShares MSCI Mexico Index (NYSEARCA:EWW) is off its worst levels, but down 0.5% on the session.
    • Forget politics. It sounds like Bitcoin was the big topic of discussion at Thanksgiving family gatherings. Judging by the action in the price of cryptos and in new accounts at exchanges like Coinbase, returning college students and millennials convinced grandparents, parents, aunts and uncles to jump in with both feet.
    • It was earlier reported that Coinbase added 100K accounts between Wednesday and Friday; that's gone up to 300K (to 13.3M total) as of yesterday.
    • As for the price, Bitcoin has pared some of its massive gains since challenging $10K on Sunday, now trading hands at $9,557. Ether and Litecoin also posted huge advances over the weekend.
    • Meanwhile, hedge fund giant Ken Griffin adds his name to the list of those comparing Bitcoin and tulip bulbs.
    • Checking related stocks, while Bitcoin Investment Trust (OTCQX:GBTC +17.5%) is surging alongside its underlying asset, names like Riot Blockchain (RIOT -31%) and Xuniei (XNET-7.5%) are giving back some of their recent massive gains.

    Desktop spending strong on Black Friday

    • U.S. desktop e-commerce spending rose 22% on Thanksgiving Day to $1.287B and 20% on Black Friday to $1.97B, according to data from comScore. The number of buyers increased as well as the average transaction amount and number of transactions per shopper.
    • "With more consumers opting to kick off their holiday shopping online on Thanksgiving, the traditional day of giving thanks has also become one of the more important online buying days of the holiday season as an increasing number of people prefer to get a head start on their buying from the comfort of their homes," says comScore SVP Andrew Lipsman.
    • Apparel and accessories general $600M in desktop retail sales on Black Friday, while consumer electronics spending was more than $500M.
    • The tallies above don't include mobile spending.
    • Cowen analyst John Kernan says the retail sector is on a more solid footing heading into 2018 on improved store traffic trends and robust e-commerce demand.
    • Interestingly, Kernan notes that top retail pick Skechers (SKX +3.1%) was the least promotional of all the brands it tracked over Black Friday, while 40% online price slashing by Under Armour (UAUAA) stood out on the other extreme.
    • Once the holidays are past, the biggest catalyst for retail spending next year could be tax reform. Kernan and team like Burlington Stores (BURL +0.2%), G-III Apparel (GIII +1%), Callaway Golf (ELY -0.7%) and Carter's (CRI -0.2%) as four stocks with significant upside from tax legislation.
    • Source: Cowen Research

    Reuters: Existing Keystone pipeline has leaked more than predicted

    • TransCanada’s (TRP -0.2%) existing Keystone pipeline has leaked substantially more oil, and more often, in the U.S. than indicated in risk assessments the company provided to regulators before the project began operating in 2010, according to a Reuters investigation.
    • Before constructing the pipeline, TRP provided a spill risk assessment to regulators that estimated the chance of a leak of more than 50 barrels to be “not more than once every 7-11 years over the entire length of the pipeline" in the U.S., according to its South Dakota operating permit.
    • For South Dakota alone, where the line has leaked twice including this month's 5K-barrel spill, TRP predicted a “spill no more than once every 41 years.”
    • Members of South Dakota’s Public Utilities Commission said last week that they could revoke the company’s operating permit if an initial probe of the recent spill shows it violated the terms of the license.
    • Earlier: Keystone restart date still undetermined (Nov. 27)
    • Dave & Buster's (PLAY -5.4%) falls sharply after Canaccord Genuity lowers estimates on the retail chain.
    • The firm now expects D&B to report Q3 comparabale sales growth of -3% vs. -1% prior forecast. The hurricanes that hit the U.S. during the quarter are seen as a bigger impact than lower NFL ratings.
    • The Canaccord estimate for restaurant operating margin is dropped 110 bps to 24.1% of sales due to the sales weakness and higher labor costs.
    • Dave & Buster's is due to report earnings after the market closes on December 5.
    • Sources: CNBC and Nasdaq.com

    Meredith, Time jump after deal; Time chief Battista to exit

    • Meredith (NYSE:MDP) is up 8.2% and Time (NYSE:TIMEup 9.2% after the two came to a a deal to sell the iconic Time to its publishing rival, with more details emerging this morning.
    • Meredith says the billionaire Koch brothers — who helped enable the $1.85B bid with $650M in financing from Koch Equity Development — "will have no influence on Meredith's editorial or managerial operations" and won't have a seat on Meredith's board.
    • When the Kochs were first connected to a possible deal, speculation mounted over whether the two would try to promote conservative politics through the brands.
    • Time CEO/President Rich Battista, brought in just over a year ago, will exit after helping with the transition.

  34. STX / Phil,

    It appears all the chip and data storage hardware makers have made a decent run up but STX has been a laggard.

    They seem to have a good dividend in place so wanted to get your thoughts on them and if there can be a good set up or if they are worthy to be added on to a watch list ?

    Thanks as always

    Pat


  35. Bitcoins/pat_swap – quite a lot of info on youtube re bitcoin and how to get going. Andreas Antonopoulos is a credible source.  https://www.youtube.com/channel/UCJWCJCWOxBYSi5DhCieLOLQ


  36. scottmi/BTC

    Thank you for the information. I have the bitcoins which I want to use to buy the greencoins (GRE) but the GRE wallet is coming as offline and I am not able to create a new address(wallet). …..maybe one of the top 0.01% gang plan to take the money….

    Has anyone converted to GRE in recent days? Maybe I need to use a different exchange?

    regards


  37. STX/Pat – Like WDC, it's hard to get a handle on their changing business model. Now they are a cloud storage company, with just 55% storage and all the profits come from the cloud, where there's a lot of cost-cutting with competition from AMZN, GOOGL, MSFT, ORCL, etc.  

    The cloud is delivering ALL of the profits while revenues and cash-flows have been in steady decline.  

    Yet you are paying now what they paid in 2015 so it's not something I'd chase – especially up from $30 in Aug (30%) despite the recent dip that makes you think it's some kind of bargain at $39.

    GreenCoins/Pat – Well I do see $1,978 traded on CoinExchange, where it's ranked 78th, so someone is trading it over there (and back down to 0.000286.  Realistically, we can try to get the volume up to maybe $20,000/day in 2018 and that will put us in the the 30s. 

    Another one to look at is SwissCoin (SIC) at it's just 0.000095 but heavy trading ($86K) puts it in 15th place already.  


  38. Hi all, now in TX after a highly recomendable sail cruise crossing from Barcelona to Barbados, getting things together again.

    By the way, TSLA still seems as the short of the year, problem is when to get into…

    https://www.bloomberg.com/news/articles/2017-11-24/tesla-s-newest-promises-break-the-laws-of-batteries


  39. SRPT/Pharm – any awareness of these guys or RNA therapeutics; PMO chemistry? https://www.sarepta.com/our-pipeline


  40. TSLA/Advill – Maybe they are going to use Samsung's new batteries?

    Samsung moves toward graphene-based fast-charging battery


  41. Please call 202-225-3121 and let your Senators know how you feel about tax proposal. Thanks.


  42. Learner – I just saw your post on VRX.  I'm down to a small position.  Sold some today on this morning's strength.  Just holding a few hundred shares and some Jan 2019 $10 puts.


  43. Put are short/


  44. Going to be out all day so posting the lines tonight!











  45. Phil / HBI – l know you don't take votes on this.  But HBI looks fairly good - already making progress on initiatives,  trading at low end of EPS ( both trailing and forward), FCF looks good, dividend high but manageable [ probably won't raise it for a year or two]….   I see a solid 28 to 30 stock if they can hit EPS of  1.95+ and 2.15 in coming year.   I especially like they have a competitive moat with their supply chain where they can leverage acquisitions an improve leverage on them.  I think getting in at 19.x is pretty good.  I'm not crazy about they debt at 3.8B or the fact they lowered outlook for this year, but was not terrible. 


  46. That's a perfectly valid vote, Batman.  I am having a hard time deciding.  


  47. Scientific Proof Is A Myth






  48. Was James Woolsey wearing a wire at Mar-a-Lago this weekend when he met with Donald Trump?



  49. Advill/cruise.   Was this the ARC rally? What type of sailboat ?? ????


  50. Did I miss the trade of the year announcement for 2018?  Thanks.