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Will We Hold It Wednesday – $100 Oil Edition

Wheeeeeeee!  Down goes oil!

That's $5,000 per contract in your pocket if you followed our lead on Wednesday, the 16th, when  my comment right in the morning post (which you can have delivered to you pre-market, every day by clicking here) was:

In yesterday's post, I reminded you we were shorting oil at $104 and we caught a $500 per contract move back to $103.50 but then (also live in the Webcast), we decided to wait for $105ish to re-short today (/CL Futures).  This morning, I posted early (6:22) to our Members that we had our shorting opportunity at $104.95 and already (8:06) we're back to $104.65 and that's good for $300 per contract after a hard morning's work – plenty of money for breakfast! 

We're still expecting a much bigger drop, probably not until after the weekend though, as Ukraine tensions are keeping oil high.  Rather than play the volatile Futures over the weekend, we have SCO and USO plays set up for our Members to take advantage of the potential correction.  Today though, we can still have fun with the Futures (stop at $104.75 at the moment) into inventories at 10:30.   

USO WEEKLYAs you can see from the Futures chart above, we hit it right on the nose and caught a fantastic drop right away but, of course, we've stuck to our guns on those short positions and, just yesterday, in our Live Weekly Webinar, we discussed the merits of leaving our SCO position on the table to take advantage of a further fall in crude.  

If not for the continuing nonsense in the Ukraine, oil would be much lower at the moment as we print record US inventory storage today (10:30 is the official report) without near-record supply and nowhere near record demand.   

In fact, if the crooks at the US energy cartel weren't EXPORTING 1.7 MILLION BARRELS PER DAY out of the country to create an artificial shortage, we'd be piling on an additional 12M barrels a week or 618M barrels this year alone.  In other words, the criminal organizations (allegedly) that control the energy trading in America are sending the equivalent of the entire Strategic Petroleum Reserve out of the country each year – while lobbying to stop Obama from releasing SPR supplies to ease prices during a crisis because "it's too important."

That's why these bastards are so gung-ho to start a war with Russia – wars use up a lot of oil and we've got to get rid of it somehow or they won't make as much money and, even worse, US Consumers may not have to spend as much money on Transportation – just when they've got them conditioned to spend over 20% of their household budget on energy.  

What's amazing to me is that all the other consumer discretionary businesses don't get together and lobby to STOP the US Energy Cartel from robbing the American Consumers.  After all, if our bottom 80% wasn't spending 20% of their families budget on energy – there'd be more money for everything else.  

Like Health Care, Energy is another part of the American Kleptocracy where a vital commodity has been taken over by oligarchs who control the supply and pricing in order to squeeze inordinate amounts of money out of the consumers compared to, well – any other country on the planet::

We are ENCOURAGED to CONSUME we are DISCOURAGED from SAVING, with untold Billions of Dollars spent on lobbying to prevent any Government efforts to reign in the madness and, of course, the evil (allegedly) Koch Brothers take it to a whole new level by buying themselves an entire political party that is essentially on the job for them 24/7, making sure their interests are represented at all times.  

And what are the Koch interests?  They make much of their $100Bn from trading energy derivatives.  Back in 2000, before derivative trading was deregulated and oil was $20 a barrel and gasoline was under $1 per gallon, the Kochs "only" had about $10Bn.  Since deregulation, they have managed to add about 100% of that fortune to their stockpile each and every year – growing exponentially since 2005, when their friend George Bush become the single biggest consumer of oil in the World, buying 300M barrels to "top off" the SPR, even though it pushed oil to record prices for US consumers over the next 3 years and, ultimately, collapsed the US Economy.  

This is why US Citizens pay twice as much per capita for energy than anyone else in the World.  Notice, from the pie charts above, that it's not a big deal to the top 20%, who pay 9% of their income for energy vs 4.5% for people in other countries – that's hardly noticeable and not noticeable at all to the top 10% (3% vs 1.5%) and not even a consideration for those in the top 1%, who earn over $400,000 per year – it cost them the same $60 to fill up a tank as it costs a poor person, only a person owning $400,000 a year can buy 20 tanks of gas per day while a person taking home the median $37,000 after taxes can't even afford 2.  

Usually, I tell you that "we don't care IF the game is rigged, as long as we understand HOW the game is rigged and can place our bets accordingly" but, at this point, these men are destroying our country in order to enrich themselves.  They represent everything that is wrong with Capitalism, as it is turned into a hammer with which the bludgeon the lower classes (and, with $100Bn between them, pretty much everyone is below their class).  It's not all "harmless good fun" when they build their fortune by breaking the backs of everyone else….

 


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  1. What is a good ETF to play the Hang Seng index on the Hong Kong market?


  2. Uh-Oh – GDP a disaster.

    • GDP Q1: +0.1% vs. +1.1% consensus, +2.6% previous estimate.

    Same shorts as yesterday, /YM 16,450, /ES 1,870, /NQ 3,550 and /TF already 1,113, so ignore them.  

    Still time for the Fed to change their minds on rates at today's meeting – might not be all bad, so very tight stops in case bad news is spun as good news. 


  3. Dollar slammed down to 79.65 so /NKD below 14,300 still good. 

    FXI to play the Hang Seng, Den.  


  4. Phil / NLY yesterday

    Just checking that I am following correctly. So the basis of this is buy stock and sell ITM puts and calls to reduce cost basis. 11.32 spend – 4.25 in premiums = 7.07 net initially.

    If stock is above 12 in 2016 will be called away at 10-7.07=2.93 which is 41% profit.

    If between 10 and 12 then the stock is both called away and put to at
    12-2.93 = 9.07 for new entry then repeat

    If below 10 the put is exercised and gives a 2x entry of 12+7.07=19.07/2 = 9.54

    In the meantime the 10% dividend is increased to 16% on cost basis.of 7.07


  5. Oil Lines

    R3 – 103.51
    R2 – 102.85
    R1 – 101.66
    PP – 101
    S1 – 99.81
    S2 – 99.15
    S3 – 97.96

    Yesterday's line worked like a charm….


  6. Funny reading Zero Hedge this morning:

    • GDP number – this miss is a catastrophe, don't pay attention to the people telling you to ignore that number.
    • ADP jobs – this beat is ADP playing with their stats. Ignore that number.

    Ideology based number interpretation is always fun….


  7. GDP – Wow, US exports dropped 7.6% in Q1 vs. a Q/Q gain in Q4 of more than 9%.  That is a hell of a slow-down. 


  8. Hard times at TWTR:

    http://qz.com/204408/twitter-is-wringing-less-money-out-of-each-user/

    But the most alarming figure is that Twitter generated $1.44 in advertising revenue for every 1,000 timeline views, down from $1.49 in the previous quarter. That’s the best measure of the company’s ability to make money from its existing base of users, and it’s going in the wrong direction.

    Twitter essentially has two directions in which it could go: aspire for vastly more users or generate more revenue from the users it has. It’s not really doing either at the moment, though total revenue was still up from $243 million last quarter.


  9. Good Morning!


  10. Morning Phil / SCO – if we get a nice pop on SCO today, are we looking at taking our SCO spread off the table?


  11. Good morning!

    TWTR – Do we think TWTR has more room to drop on top of the 12.5% since yesterdays's report based on these weak numbers and outlook or do we think management will find ways to generate revenue? Looks like it could languish for a while unless some significant changes are made.


  12. Oil failing $100, thanks Phil! 


  13. GM!  Another beautiful day in Paradise

    Well, wonder if ol' Yeller will keep the heroine coming, or if the needle continues to be withdrawn?

    "Blame it on the weather".


  14. Good morning! $19 could be a solid support for /SI if it could fall there….


  15. Will falling oil prices stop further Russian aggression in Ukraine or increase it?  Be careful, that's one huge "rent-a-rebel".  Fundamentally, Phil's right, but how low can it go as long as the risk of invasion is still there?  

    The BS in the oil markets is as thick as the oil!


  16. "Blame it on the weather"…… Not Here…. :)


  17. Does anyone know why TASR is down? They beat on earnings.


  18. Lines/StJ – $98 would be very nice.  

    Ideology/StJ – Good point, you always need to be aware of WHO you are reading and what their agenda is.  

    Exports/Sibe – Some of it was actually weather and other is the post-holiday slowdown but that's a drastic number.  

    If you look at the actual GDP report, consumer spending on goods dropped to 0.4% while consumer spending on Energy and Health Services rose 4.4% – it's exactly what I was saying in the article above – consumers are tapped out and every extra dollar that goes into the Koch's pockets is coming out of someone in the Consumer Discretionary sector.  

    $99.60!  

    TWTR/StJ – So they made 3% less money on advertising after Christmas than before?  Not sure if I'd call that a warning sign.

    SCO/Phel – I think $98.50 is the best we could have hoped for anyway so there's no sense in risking a reversal hoping to do better.  At this point, back over $100 and I think we should get out. 

    TWTR/Craigs – $35 was our expected bottom (that's why I picked the Jan $35 puts to sell yesterday at $4.40, now $5.50, so no big deal and the 2016 $30 puts are $6 for a nice roll).  The 2016 $40s are still $10 (we paid $5 for the spread) and the $55s we sold are $5 so the whole trade, despite the 12% drop, is only down about $1.  

    For those who are in the earnings play, I'd roll the short puts to the 2016 $30 puts for a .50 credit and buy  back the $55s for $5, sell the $40s to another sucker for $10 and roll down to the 2016 $23 calls at $18.  That would change the net to 0.60 – .50 + $5 – $10 + $8 = $3.10 on the 2016 $23/40 bull call spread with the short $30 puts.

    LOL, you're welcome Bruce only I didn't cause it – I only predicted it.  wink

    GM/Pharm – There's a reason I never liked them – even when they were cheap.  

    /SI/Invest – Yes, $19 is a great long spot. 

    Russia/DC – I think the aggression in the Ukraine was aimed at boosting oil in the first place.  Don't forget, Putin and Co. know how to buy shorts too!  

    Wow, this market is so trained to believe the Fed will save it, not even a 90% miss on GDP gets people to sober up!  1

    TASR/Griffin – Beating on revenues more than earnings makes people think there's margin pressure.  I wouldn't worry if you are a long-term holder.  


  19. Craigsa620,

    I am not sure how long you are on this board, but in a case like TWTR you need to wait till the downgrade police has done it's work it will take sometimes a few day before the stock has bottomed out. I can hear Phil as well saying every time wait for the downgrade police. Hope this helps.


  20. GM = car maker…..GM! = Good morning!  No wonder Twitter is not doing well.  Phil is not following the lingo! :)


  21. Phil

    Perhaps XRT will finally collapse?!  

    Where would you roll your EBAY long on that earnings play?


  22. Downgrade police/Yodi – USUALLY, yes, but sometimes, like TWTR, the initial reaction is a drastic over-reaction.  TWTR did $250M in revenues and broke even.  That's up 125% from last year and they were expected to lose 0.03 per share.  They added 14M active users since last Q (241-255), which is 6% in the Q and tracking with being up 24% from last year.  

    For the second quarter, Twitter expects revenue to be between $270 million and $280 million, with adjusted EBITDA between $25 million and $30 million. For the full year, revenue is projected to be between $1.2 billion and $1.25 billion, with adjusted EBITDA between $180 million and $205 million. It also expects capital expenditures between $330 million and $390 million.

     

    Topeka Capital Markets analyst Victor Anthony (Buy, $60 PT)

    "We reckon that we are witnessing Facebook (FB-$58.15:Buy) part two. Instead this time it is faster user growth that investors are seeking rather than faster mobile monetization. Accelerating revenue growth, raised guidance, and a near acceleration of U.S. MAU growth failed to appease investors, who are demanding TWTR show a faster path to achieving mainstream status. We are optimistic that TWTR should reaccelerate growth at some point this year. Our 2015 EBITDA estimate increases by 17%, however our price target reduces to $60 from $70 on a reduction in our target multiple. We are stubbornly sticking with our Buy rating and see improvement in investor returns as user growth strengthens."

    UBS analyst Eric Sheridan (Sell, $35 PT)

    "Over the medium term, we continue to expect Twitter's stock to underperform the market in the face of (what is likely) a multiple quarter transition on user engagement & ad product adoption. In addition, with ~84% of the basic shares outstanding coming unlocked from the IPO on May 6th, we expect Twitter's stock to lag – despite assurances from insiders & some large shareholders that reduces the lockup overhang by about 1/3rd. For the long term, we could see becoming more constructive on Twitter once the stock reflects a more reasonable absolute multiple on forward operating estimates (especially against peers growing at similar growth rates & with higher levels of profitability) and a clearer trajectory of user & advertising growth."

    LOL Pharm – Sorry, was just looking at their sad chart.  Keep in mind I'm old, I don't abbreviate everything…

    XRT/DC – I can't believe how well it's been holding.  May have to consider a roll after all.  

    I'll run down the earnings plays next. 


  23. easily filled on the TASR 2016 $15 puts over $3.00 now


  24. TWTR – One says buy the other says sell.  That's what makes the market; for every seller there is a buyer and vice-versa.  Don't like it when I hear,  "We are stubbornly sticking to our buy rating."  Reminds me of myself, "Frequently wrong, but rarely in doubt." :-)


  25. Follow-up on yesterday's earnings plays:

    EBAY June $52.50/55 bull call spread at $1.30, now $1.10 – We expected EBAY to miss and the bull call spread was IN CASE they didn't.  Now we can sell 5 2015 $50 puts for $6.20 in the Income Portfolio and buy 5 $50/60 bull call spread for $4 for a net $2.20 credit or a net $2 credit if you lost .20 on the earnings spread!  

    In the LTP, we already sold the short 2016 $45 puts for $4.60 on the Jan dip, let's add 5 of the bull call spreads to that trade too!  

    PNRA was the 2016 $150/180 bull call spread for $15, selling Jan $150 puts for $9 and selling the May $170 calls for $4.50 for net $1.50 – The Jan $150 puts are now $12.50 and the long spread is now $11 and the short calls are 0.15 so net -$1.65 is a 200% loss at the moment but PNRA is at $151.76 so no worries.  We thought, on a miss, that the short puts could be rolled to the 2016 $125 puts, those are now $10 but, since the Jan $150s are still on track to expire worthless, there's no need to roll.  I like this spread as a new trade but I wouldn't add it to our portfolios unless we get an even better deal.  

    STX was the June $52.50/57.50 bull call spread at $1.90, selling the June $50 puts for $1.60 for net .30 – STX is up a little and the June $30 puts have already dropped to $1.05 and the bull call spread is $1.95 for net .90 – up 200% in a day and on track to do much better.  

     

    TWTR we just discussed above.  Our earnings play was the 2016 $40/55 bull call spread, selling the Jan $35 puts for $4.40 for net .60 and, with TWTR at $37.66 now, I like rolling into the 2016 $30 puts ($6) with the $23/40 bull call spread at $8 for a net $2 cost (plus the $1 lost on the original spread if you were in it).  Still, even $3 is not bad for a $17 spread that's mostly in the money.  Let's do 5 of those in the Income Portfolio and the Long-Term Portfolio.

    Oil $99.50!  That's got SCO at $28.77 and, in the STP, we have 20 short SCO May $27 puts, now .20, which are up $1,700, so let's take that and run.  We also have 10 May $26/29 bull call spreads that we paid net $1.30 for ($1,300) and now the $26 calls are $3 so lets take it and run and leave the naked short $29 calls (now 0.75) with a stop at $1 so we can't do worse than net $2 but, if all goes well, we make our full $3 without needing oil to hold this low for two more weeks.  


  26. Good morning – can't decide what to play, the 7:30 (pst) /es bounce or the 7:30 /cl inventories.  Good times.


  27. ccj is getting back down 20.70


  28. Phil,

    On the EBAY post, did you mean selling the 2016 Put?


  29. Oil inventories up 1.7Mb, gasoline up 1.6Mb and distillates up 1.9Mb but not a shocker after the bad API report.  Looks like we played SCO right as it's giving us a bounce off $99.50 but it's sure not bullish.  


  30. EBAY/ZTen – Yes, that was the 2016 $50 puts for $6.20 in the Income Portfolio!  


    • EIA Petroleum Inventories:
    • Crude +1.7M barrels vs.consensus of +2.2M and +3.5M last week.
    • Gasoline +1.6M barrels vs. consensus of -0.4M and -0.3M last week.
    • Distillates +1.9M barrels and +0.6M last week.
    • Futures -1.54% at $99.72.

  31. hello phil,

    if you have a moment today, could you speak to the issue of profit taking as it pertains to futures trading. 

    i feel like i do a great job of cutting losses, but the other side is a problem for me.  basically i either take profits too soon or don't take them soon enough.  part of the issue might be trading one contract vs two, where i could scale out and let a winner ride more after securing an initial move.  i feel like i have a confused approach


  32. Following up on the calendar discussion we have been having over the last 2 days, here are some examples of 2 where you can beat the underlying stocks even when they go down:

    ABX – When I entered the trade, it was trading at $19.70. It now trades at $17.41 down 11.16%. Yet, my calendar trade is up 24%, beating the stock by 35%.

    GDXWhen I entered the trade, it was trading at $27.75. It now trades at $24.01 down 13.47%. My calendar trade is down 2.7%, beating the stock by over 10%.

    The difference between the 2 of them is that premium is usually better on ABX than GDX (index are generally not as volatile) and I was more aggressive selling premium on ABX as well. I used this example because it does show that even when the underlying stock doesn't do well (and gold miners suck), you can still salvage some returns and 24% is not bad for one year return, no matter what. Ideally, it does work better when the underlying stock goes up or at least stays flat.


  33. STJ – DSX getting cheap again.  Closed my eyes and sold some Jan 10 puts. 


  34. SCO another fine example of ALWAYS selling into the initial excitement.

    Elliott's Paul Singer On How It All Will End: "Badly, We Guess"

    • Composite Index: -5.9% vs. -3.3% last week.
    • Purchase Index:   -4.0% vs. -3.0% last week.
    • Refinance Index:  -7.0% vs. -4.0% last week.

    Apr Chicago PMI:  63.0 vs. 56.9 consensus, 55.9 prior.

    Q1 Employment Cost Index: +0.3% Q/Q. vs. consensus of +0.5%, +0.5% prior (Revised).

    1.8% Y/Y vs. 2% prior.

     

    Japanese Manufacturing PMI Collapses At Fastest Pace On Record; Drops To 14 Month Lows

    Abenomics Agony: Japanese Base Wages Tumble By Most In 2014 (22nd Consecutive Monthly Drop)

    The Real Unemployment Rate: In 20% Of American Families, Everyone Is Unemployed

    • Real GDP grew 0.2% in February, slower than January's 0.5% gain, but inline with expectations.There had been ideas January's pop would be revised lower, but it didn't materialize. December's originally reported 0.5% decline was revised to just 0.4%.
    • The loonie adds a few basis points, now just marginally lower against the dollar on the session and buying $0.9130.
    • ETFs: EWCCNDAEWCSFCAN
    • Previously: U.S. GDP growth revised sharply lower

    The Sum Does Not Equal The Parts: China Provincial GDP Signals Sharper Slowdown

    Moody’s Says Developer Default Risk to Slow Sales: China CreditMoody’s Investors Service said the risk more Chinese property developers will default, after the collapse of Zhejiang Xingrun Real Estate Co., will make it harder for them to raise funds just as apartment sales cool. The builders have issued $500 million of offshore yuan or dollar bonds this month, compared with $1.6 billion in the same period last year and a record $9.2 billion in the first quarter, data compiled by Moody’s show. The price of property securities, which account for 32 percent of a Bank of America Merrill Lynch index of China dollar bonds, slumped 4.9 percent in the past year, paring their returns to 0.9 percent. That compares with a 1.6 percent total gain for dollar bonds globally, according to Bank of America.

    Boiled Frog Syndrome Invades CMBS as Risks Mount: Credit Markets. The growing din surrounding loosening standards in the commercial-mortgage bond market is doing little to deter buyers. 

    Deutsche Bank Among 15 Europe Lenders Cut to Negative by S&PDeutsche Bank AG (DBK), Germany’s largest lender, was among 15 European banks that had their outlooks cut to negative by Standard & Poor’s on the prospect that governments are less likely to provide aid. The outlooks were lowered from stable “to reflect our view that extraordinary government support is likely to diminish as regulators implement resolution frameworks,” the ratings firm said yesterday in a statement.

    Enrollment in Student-Debt Forgiveness Programs Soars in 2014

    • Confronting the belief that the big banks are too big to charge, federal prosecutors have met with regulators about how to criminally punish lenders without putting them out of business, reports the NYT.
    • Credit Suisse (CS) and BNP Paribas (BNPQFBNPQY) are looking like test cases, with prosectors seeking guilty pleas – from Credit Suisse on aiding tax evasion and from BNP for doing business with blacklisted sweethearts like Sudan.
    • The new push comes after the outcry when HSBC two years ago somehow escaped criminal charges and paid just a relatively small fine over laundering money for years for drug gangs and terrorists.
    • Earlier today, BNP said the $1.1B it has set aside for fines over sanction violations may not be nearly enough. It's lower by 3.9% in Paris.

    Quote Of The Day: Larry Summers To Elizabeth Warren – "Insiders Don't Criticize Other Insiders"

    • Bridge Bancorp (BDGE +1.1%) is upgraded to Buy by Guggenheim.
    • First Financial Bankshares (FFIN +0.2%) has its Sell rating pulled at Macquarie.
    • MidSouth Bancorp (MSL +1.6%) is upgraded to Outperform by FIG Partners.
    • S&T Bancorp (STBA +0.6%) is upgraded to Outperform by KBW after posting Q1 results yesterday.
    • Deustche Bank boosts Texas Capital Bancshares (TCBI +0.6%) to Buy.
    • Sterne Agee upgrades The Bancorp (TBBK +0.5%) to Buy with an $18 PT.
    • In other financial sector moves, Main Street (MAIN -0.5%) is upgraded to Outperform by Raymond James with a $34 PT, and Waddell & Reed Financial (WDR +0.6%) has been upgraded to Outperform by KBW.
    • Economic net income of $322M or $0.85 per share compares to $394M or $1.02 per share a year ago.
    • Dealmaking slows, with $3.1B in asset sales in Q1 vs. $4.1B a year ago, and $1.1B in new investments vs. $2.5B a year ago. Warning of froth in global credit, CFO William Conway, says he doesn't find it healthy or sustainable. Q2, however, may look better, as Carlyle (CG-4.7%) has been fairly active, but the Q1 books closed before the deals did.
    • Previously: The Carlyle Group misses by $0.16, beats on revenue
    • A key leg of the bull thesis on Genworth (GNW) has been improvement in its U.S. mortgage insurance unit, writes BTIG's Mark Palmer, and the Q1 results show that promise beginning to be realized.
    • U.S. Mortgage Insurance operating income of $33M was up $21M a year ago, with total flow delinquencies off 27%. New flow delinquencies fell 18% Y/Y thanks to the continuing rundown of insurance written from 2005-2008. Total losses were $45M lower than a year ago.
    • Flow net insurance written of $3.9B was 17% lower Y/Y, reflecting the overall sharp slowdown in the mortgage origination market.
    • The earnings call has just begun.
    • Previously: Genworth Financial, Inc. beats by $0.03, misses on revenue
    • Barrick Gold (ABX) +0.3% premarket after reporting a 90% drop in its Q1 earnings to $238M from $923M a year ago due to lower metal prices and gold sales volume, but results came in slightly ahead of analyst expectations.
    • Q1 gold production fell to 1.59M oz. from 1.8M oz. a year earlier, while average realized gold prices were $1,285/oz. vs. $1,629/oz. a year ago.
    • All-in sustaining cash costs fell to $833/oz. from $933/oz. a year earlier; for the year, ABX maintains its forecast for all-in sustaining cash costs of $920-$980/oz. and gold production of 6M-6.5M oz.
    • Cut its 2014 copper production guidance to 410M-440M lbs. from 470M-500M lbs. after damage to the main conveyor at its Lumwana mine in Zambia halted processing there.
    • The earnings come ahead of founder Peter Munk’s final meeting as ABX chairman and two days after collapse of merger talks with Newmont Mining.

    U.S. Steel(X) returns to profit but warns of weaker 2nd qtr

    Supreme Court Revives EPA Rule on Air Pollution Across State Lines

    • Ocean Power Technologies (OPTT +3.6%), which was planning a wave energy installation off the Oregon coast that could have powered 1,000 homes, says it will instead undertake the project in Australia.
    • OPTT says it is suspending the Oregon project because it lacks the money to comply with unexpected regulatory requirements.
    • Instead, it will focus on the coast of Australia, where the government is providing a $66.5M grant to help OPTT build and deploy a planned wave power station.
    • Shares of Noodles (NDLS) and Panera Bread (PNRA) trade lower in premarket action after the fast-casual restaurant chains fail to come anywhere close to matching the double-digit comparable-sales growth that Chipotle (CMG) churned up for the first quarter.
    • Restaurant sector analysts have noted that speed of service and simplicity of menu are two significant factors in the segment.
    • Panera Bread is addressing its "mosh-pit" order pickup issue, while Noodles thinks it can regain traffic to bring scale back into play for margin expansion.
    • Execs with both companies made a strong case during their earnings calls that Q1 results were due to transitory or one-time factors.
    • Conference call transcripts: NDLSPNRA
    • Premarket: NDLS -6.5%, PNRA -5.6%, CMG -0.3%
    • Panera Bread (PNRA) says harsh winter weather slashed 150 to 200 bps from company-owned comparable bakery-cafe sales in FQ1.
    • The company's comp came in at 0.1% for the period despite a 2.9% gain in the average check.
    • Operating profit fell 250 bps to 11.1% during the period as investments in new initiatives dragged on results.
    • Guidance for FQ2 is for EPS of $1.70-$1.76 after the early read on comparable-sales growth for the current quarter looks tepid.
    • PNRA -4.4% premarket
    • channel check from Sterne Agree indicates Brinker International (EAT +0.5%) has had its best month of comparable-restaurant sales growth since November.
    • Comp growth was below 1% at Chili's and Maggiano's during the company's FQ3 which ended on March 26.
    • Citigroup downgrades Coach (COH -3.2%) to a Neutral rating from Buy after the retailer slumped mightily in the U.S. during Q1 and tipped off Q2 isn't off to a resounding start.
    • The investment firm thinks the turnaround in sales is going to take some time for Coach.
    • A group of politicians in the state of New York plan to propose a bill which would banelectronic cigarettes in public spaces.
    • A local ban in New York City started earlier this week.
    • Related stocks: MOBTILOPMECIGVGRXXII
    • Shares of IsoRay (ISR +38.2%) are up big on average volume in apparent response to itspress release about the publication of its peer-reviewed study on the use of Cesium-131 seeds for the treatment of gynecologic cancer.
    • The Wooten study has been available online since February 17 in the Gynecologic Oncology journal (pp 268 – 273). The study involved 14 patients and the investigators conclude that Cs-131 is a therapeutic option for appropriately selected patients.
    • According to IsoRay's March 14, 2014 prospectus supplement, the FDA approved Cs-131 for the treatment of all solid tumor applications in 2003.
    • Share prices emerged from their eight-year downtrend only a couple of months ago.
    • Retail investors should tread carefully here.
    • Down 10.5% yesterday after reporting a gross margin decline with its Q1 results, 3D Systems (DDD +3.3%) is recovering some of its losses with the help of an upgrade to Buy from Gabelli, and a bullish coverage launch from Imperial Capital.
    • The gains come even though Citi, RBC, and Canaccord have slashed their PTs. Sell-side ratings for 3D remain largely bullish.
    • The company was questioned on its CC (transcript) about slowing U.S. growth (+19% Y/Y in Q1 vs. 66% for Europe and 97% for Asia-Pac). CEO Avi Reichental insisted 3D isn't seeing a U.S. market slowdown. He also predicted gross margin will rebound due to rising materials sales and improving services margins.
    • Shares currently go for 39x 2015E EPS, and 5.3x 2015E sales.
    • A week after ARM (ARMH -2.1%) sold off in response to its Q1 results, Citi has downgraded the CPU core developer to Neutral.
    • While ARM's licensing growth remains strong (+37% Y/Y in Q1 and +27% in Q4), investors have been nervous about slowing royalty growth. Royalty revenue (based on the prior quarter's shipments) only rose 8% Y/Y and 7% in Q4, thanks in large part to slowing chip shipment growth (+11% and +16%).
    • Moreover, the numbers suggest ARM's royalty/chip is declining in spite of growing mobile adoption of technologies that boost its royalty rate, such as 64-bit instruction sets, big.LITTLE, and dual/quad-core CPUs. ARM suggests growing shipments of microcontrollers, smart sensors, and low-end smartphones are pressuring its royalty rates for now.
    • ARM, long granted steep multiples by the Street on account of its near-monopoly position in the CPU core licensing space, currently goes for 24x 2015E EPS.
    • At least 8 firms have slashed their Twitter (TWTR) PTs following a Q1 report that featured underwhelming full-year guidance and failed to dispel concerns about slowing MAU/Timeline view growth.
    • "Over the medium term, we continue to expect Twitter's stock to underperform the market in the face of (what is likely) a multiple quarter transition on user engagement & ad product adoption," says UBS' Eric Sheridan (Sell, $35 PT). He's also (unsurprisingly) worried about a May 6 lockup expiration that will allow 84% of basic shares to be sold.
    • Topeka's Victor Anthony (Buy, $60) is more optimistic. "We reckon that we are witnessing Facebook part two. Instead this time it is faster user growth that investors are seeking rather than faster mobile monetization." Cowen's John Blackledge (Underperform, $26 PT) isn't convinced. "These results appear to confirm our suspicion that Twitter's total addressable market is fundamentally smaller than Facebook."
    • On the CC (transcript), CEO Dick Costolo talked up the value of a new integrated bidding system that will allow advertisers to bid across multiple ad types, and noted MoPub's ad network now reaches 1B Android/iOS users. CFO Mike Gupta mentioned "ad engagements" rose 28% Q/Q, but added cost per ad engagement fell 20%. He also stated non-GAAP costs/expenses rose 104% Y/Y.
    • When questioned about softening Timeline views per MAU. Costolo suggested the figure paints an incomplete picture, given Twitter's efforts to improve engagement per Timeline view. He defended his point by noting favorites/retweets were up 26% in Q1.
    • TWTR -12.6%. Q1 resultsguidance/details.
    • Hulu (DISCMCSAFOXA) made some significant announcements today at the Upfront meetings in New York City.
    • The company plans to allow more viewers to watch content on mobile devices for free this summer. A new iPhone app will also launch within months.
    • CEO Mike Hopkins told advertising execs that Hulu is in talks with pay-TV providers to get inside of cable boxes. If the firm can pull off the trick and box out Netflix (NFLX) on some cable or satellite services it would be a bit of a coup.
    • Another innovation from Hulu: An online/mobile Pizza Hut ad will be run soon which allows consumers to order a pizza from within the ad. The concept could lead to a pay-per-conversion form of advertising which would appeal to consumer product and service companies.
    • DreamWorks Animation (DWA) says it will take a $57M write-down to account for a poor box office showing for Mr. Peabody & Sherman.
    • The film's disappointing run dominated financial results for Q1.
    • The company reported consumer product sales of only $7.1M during the period.
    • What to watch: The studio has had a bumpy ride with its films over the last couple of years which has held back profits. This summer it releases How to Train Your Dragon 2 with the stakes getting higher for it to deliver a solid box office tally.
    • DWA -2.5% premarket
    • Time Warner (TWX) beats estimates in Q1 with its three major business lines all contributing.
    • Turner saw revenue increase 5% to $900M as higher domestic subscription rates and international growth kicked in.
    • Home Box Office revenue grew 9% to $1.3B on improved domestic subscription rates.
    • Warner Bros. boosted revenue by 14% to $3.1B on the strength of a surprising run by The Lego Movie.
    • TWX +0.9% premarket

  35. Phil/ I own 2016 TASR 13/20 bull calls, paid 8.75/5.35, now 4.30/2.40.Also sold 1/2 15 puts at 2.62, now 3.00.  Am I correct in thinking I should buy back the 20 calls with >50% profit at this point? Then I could possibly sell calls, or puts, if it made sense at some later point?  Conversely, I could sell more puts, and roll calls down, but seems early to do that, as trade is still on track. Or should I do nothing! As always, Thank You. Options are so interesting.


  36. DSX / Albo – These shipping guys are really like lottery tickets!


  37. STJ – You mentioned that MSFT might be worth a shot.  Here's why Bill Miller of Legg Mason likes it,

    On Microsoft, he said, "They raised the dividend actually 15.9 percent per year on average for the last five years. But the last dividend increase was 22 percent. And I think it's much more likely the dividend increase is going to be 20 percent or more the next five years." 


  38. MSFT / Albo – Historically speaking, companies that raise dividend on a regular basis do very well against the overall market. One more point for them I guess! Definitely worth a look but it would be nice to get a better entry point…


  39. And to think that MSFT was dead money for all these years and they are up over 50% since Jan 13, well ahead of the market. Patience does pay off sometimes.


  40. Probably not a bad place for conservative money.


  41. Albo // EXCH
    I think I missed your comments on these guys. One of my laggardsWhat's the prognosis, doc ?

    StJ // MSFT
    I don't if there's term for it, but I don't care how much MSFT makes. I just think they're a shtty company. I've worked there for quite a while – it's amazing anything gets done at all. They've been sucking the tite of XBox for years.


  42. Does anyone know when the Fed announcement is?


  43. Operation 54.5 in progress for automakers • 12:06 PM

    The EPA says the average fuel efficiency of vehicles in the U.S. improved to 24 mpg last year.

    Subaru (FUJHY), Volkswagen (VLKAY), and Mazda (MZDAY) topped the list with fleet-wide averages of 26 mpg or better.

    Chrysler (FIATY), General Motors (GM), and Ford (F) all fell below the industry average due to their higher mix of pickups trucks, while Daimler (DDAIF) kept luxury a priority over slashing weight.

    Tesla Motors (TSLA) boasts a gaudy equivalent efficiency rating of 89 mpg, but didn't sell enough cars to land in the rankings.

    What to watch: The U.S. government wants each automaker to boast a fleet average of 54.5 mpg or better by 2025. If those regulations stands, it will create a need for a higher mix of vehicles powered by electric and fuel cell technology as moves like Ford's to build F-150s with aluminum won't be enough to swing the averages far enough north.


  44. Oil can't get over $100 on a bounce – that's not a good sign. 

    Profit-taking/Toe – Yes, I'm in favor of it… cheeky   I wouldn't jump into two contracts as a solution.  It's a matter of practice.  You get used to seeing what's a spike vs. what's a real move and then you don't automatically bail when something moves against you but that just takes a lot of practice to learn to recognize the difference.  As we were saying last night, I was sure enough about /NKD to short them and go to bed, but that's a rarity.  Oil I usually have enough conviction to play and then we just had 16,500 again on /YM – there's a spot I'm fairly sure won't hold!  Meanwhile, just be happy making $50-$100 more often than you lose it and don't sweat for more.  10,000 small wins from now, you won't even know what you were worried about….

    Calendar/StJ – Very nice. 

    TASR/Griffin – It doesn't matter what the spread is, what matters is TASR is at $16 and you paid net $13.78 (as long as they are over $15).  So, is it on track or not?  Yes, I agree with buying back the $15 calls at $2.40, which drives your net to $16.18 so, if they don't hold $16 (as you are now gambling), then you can sell the 2016 $15 calls (now $5) and roll your $13 calls (now $6.50, not $4.30) to the $5 calls (now $11.50).  If you do that, even with the short $15 puts, you are net $10 break-even (on the half you sold puts on).  When you have such a fantastic fall-back plan, doing nothing is never a problem but, if you can buy back for $2.40, I'd take advantage and then execute the rolling plan if necessary.  Just be aware that your broker presents to you the worst possible combination of bid and ask spreads – that's not what you're likely to get if you try to close things out – but it doesn't mean you can't ask…

    MSFT/Albo, StJ – Was dead money with Ballmer but, the minute they announced a change in CEOs, I said they'd go up 20% on that news alone.  That was a horrifically mismanaged company and is still turning around from all those missteps – plenty of room to grow once they get back on track.  

    Submitted on 2012/12/04 at 11:33 am 

    MSFT/RJ – If Ballmer stepped down,  I would love them.  A bit of a falling knife here, maybe wait and see how they handle $25?  Or, if they get back over $27.50 – then you can feel better about buying.

    Submitted on 2013/01/28 at 1:11 pm

    MSFT/1020 – Oh if it wasn't for Ballmer, they'd be another undervalued company.  As it is, he's like a major tumor on an otherwise healthy organ. 

    Submitted on 2013/02/05 at 2:38 pm

    MSFT/Arivera – Because I don't have to fix AAPL – it's fine as it is.  Ballmer is like a tumor – you have to cut him out but then there will be a lot of damaged tissue that will take time to heal.  

    Submitted on 2013/04/18 at 10:56 pm 

    Ballmer/StJ – Oh yes, he's possibly the worst CEO in history.  The guy was handed the World on a plate and he's done NOTHING for 13 years.  Worse than nothing, they've lost so much ground I don't even think they can get it back anymore.  Certainly not with Ballmer.  Since crashing from $60 when Ballmer took over to $20 two years later (and yes, it was the .com crash, so no one blamed Steve – but they should have!) MSFT has pretty much drifted between $22 and $30 since.  Since the last crash, the Nas is up 135% and MSFT is up 80% – that's lagging pretty badly…

    Submitted on 2013/07/19 at 10:05 am 

    MSFT/Jbur – What a friggin train wreck that company has become.  Now they are writing off all those unsellable surface computers they produced.  Seriously the worst CEO in history.  Dennis Kozlowski did less damage to Tycho – he only stole $80M – Ballmer has lost $80Bn through sheer incompetence!  

    Submitted on 2013/11/26 at 12:50 pm

    MSFT/Lunar – I think getting rid of Ballmer is the best decision they've ever made.  I predicted a 20% bump and we have that, now we'll see if the new CEO can get them to $40 but, after that, they have to actually perform.  I like that they are moving their customers to a rental model on software and, of course, their gaming consoles are fantastic business.   It would be good if they stopped messing around with hardware (or got a leader that understood it) but they make so much money, they can waste a few Billion on R&D and, who knows, they might accidentally get a winner.  

    They're not even expensive at $37.50 – it's always been Ballmer's ineptitude holding them back. You can sell the 2016 $35 puts for $5.10 and leave it at that (net $29.90 entry) or you can tack on the 2016 $35/45 bull call spread at $3.60 and you still have $1.50 net credit and the $10 spread that's $2.50 in the money to start.

    DSK/Angel – Hilarious!  

    Fed/Ging – 2pm.  No speech until tomorrow – that makes me think they will taper another $10Bn, see what the market does and tomorrow, when Yellen speaks at 8:30, she'll say it's the last one for a while if today gets a bad reaction.  


  45.  FED/…. i doubt they will insinuate that but wouldn't shock me either…i think credit standards deteriorating so much….they have to be worried by it….eem iwm not trading well today..aapl propping us up again


  46. phil – much appreciated.  love your insights, i feel like i'm so close to making it happen consistently.. your confidence is contagious. 


  47. Calendars / Phil – It would be nice if these gold miners would get moving higher…

    But the way I look at it, my cost basis for shares of ABX will probably be around $14.50 in Jan 15. I'll keep on selling around $3 of premium every year, hopefully they raise their dividend and 5 years from now I'll have a free position that will pay the gas I put in my car when I am retired 17 years from now! The other 10-15 free positions will pay the rest of the bills.

    Still, every quarter is a learning experience. I imagine that by the time I actually retire I'll be a calendar specialist and make money helping other people!


  48. Wombat – Still long EZCH and still bullish.  Paul McWilliams, who recently retired from NI, and who followed the stock closely wrote,

    "As I see it, EZCH is “locked and loaded” for the high performance edge
    router market with its NP-4 and NP-5, and I think the odds of a disruptive change to that are very
    low.  The Linley Research Group, which I think is the best research company in the world for processor technology, sides with my view. In its October 2013 special report titled, “A Guide to NPUs,” it states:
    “If the NPS delivers on its promise, EZchip will separate its technology from that of all merchant
    competitors. It will also affect OEMs’ make-versus-buy decisions. Router vendors will have to choose
    either to evolve an existing L3 [Layer 3] NPU design to remove some limitations, invest in a wholly
    new architecture, or adopt EZchip’s NPS. In our view, the evolutionary approach will be unable to
    keep up with carriers’ requirements.” "

    McWilliams thinks EZCH has a 50%-60% upside potential between now and the end of the year.  Doesn't mean he's right, but this is a well-researched idea.  We'll see.

    They report earning on May 14.


  49. Phil, I have a technical question about spread rolling. I have a July14 AAPL 540/550 BCS, being that this is way ITM, I'd like to roll it up to 570/580 to increase the number of contracts. The math to estimate a fair price for this roll is making my head spin, and the main problem seems to be that bid/ask spreads are wide (like 9.85/6.90 for the 540/550 spread). The 570/580 spread is closer at 5.65/6.50. It appears I should be able to roll to at most 24 contracts with a slight credit if we assume I can get 9.50 for the 540/550. I tried that yesterday and it didn't execute. Any suggestions on a how to come up with a fair price that has a reasonable likelihood of being executed without dropping down to the bid price?


  50. Looking back on the charts, $99.50 seems like a pretty good support line for oil! Of course support lines are meant to be broken eventually.

    On the other hand, I read that Putin needs oil at $110 to balance his budget so oil at $99.50 does not help him. And according to the IMF, Russia is entering in a recession. Deficit and recession are not good news. Maybe one more reason to stir some more trouble in Ukraine!


  51. Watching Zuckerberg on Bloomberg.  


  52. STJ – That $110 that Russia needs probably includes the "Putin Personal Surcharge" on every barrel.


  53. Phil – last day of month. behing supported in any way? Dare we take new long entries today? Doom tomorrow?


  54. behing.. ha!  "being"


  55. AAPL/Phil- I know that generally no one ever exercises an option, however in the current case of AAPL would I perhaps want to consider it under these circumstances? I own Oct. 565 calls bought at around $18, currently worth about $49. So, if exercised now I could own the shares for $583 (with share price today of 597), get the dividend for the current quarter and shares would soon split 7 for 1, which is really the compelling reason to do this as I believe the price will rise after the split. Am I missing something that makes me not want to do this?


  56. So true Albo. Putin is like the guy at the cash register who skims 10% of every sales for his own pocket.

    I'll ask my colleagues in Russia what they think of a president who has a personal fortune of $40B acquired while he was in power. Looks suspiciously like these African dictators. US Presidents do well when they leave office, but not even remotely close to Putin's pile of money. That's money taken from the pocket of his constituents. In the US we are more democratic, we take money from the citizen's pockets but we distribute it to 10% of the population, not 0.0001%.


  57. UNP/pwright – just holding tight. the june 190 pretty much staying still. the may2 190 cover has premium to melt away and positive theta


  58. Phil / XRT – Just curious if you thought about whether you want to roll the XRT puts or to take the loss. 


  59. 54.5/Jabob – They need to change consumers' attitudes about cars if they are going to pull it off.  Need to get people used to driving EU-style cars.  We're not going to get there with 5 truck commercials during every ad break on a football game…

    AAPL hit $599.43 today. 

    Thanks Toe.  Just a matter of practice once you have the basics.   We'll do another Live Futures Workshop next Tuesday.  

    Gold/StJ – It's one of those things that will go nowhere until it explodes.  I'd hate to not be in it when it happens!  Like DBA, we poked at that for 2 years waiting for it to pop (remember "Secret Santa's Inflation Hedges"?)  - worked out very well in the end. 

    That's definitely the goal – to have a portfolio full of free positions that throw off dividends and/or options income to pay the bills in retirement.  

    EZCH/Albo – It's a small, fabless semi, which means they are only as good as their last contract.  I think the issue with them is they were priced for really big growth with NP-5 that didn't pan out.  If they hit current projections, the p/e is 20 at $24 – I don't really see what would take them to $36 in a conservative market, which is what is likely to lie ahead.  I don't know enough about what others are working on in the network processor market to say whether EZCH has a defendable advantage – they do seem to be ahead of the game for non-embedded chips but serious OEM's will stick to their own solutions.  

    They're not likely to have a terrible Q so you can sell EZCH Jan $20 puts for $1.75 for a cheap entry and, if you want to be aggressive, you can add the $25/30 bull call spread for about the same and you make $5 if they pop or you buy them for 20% off for the long haul.

    AAPL/DrC – That's a good question.  The first thing to do is stop thinking about what's "fair" and just get yourself a good deal.   The July $540s are $59 (last sales) and the July $570s are $37 so the roll should credit you $22 – why would you take less?  The $550s are $51 and the $580s are $30.50 so that roll should cost you $20.50 – why pay more?  Why you'd want to give up $30 in position to make HOPEFULLY $1.50 more is not clear to me, but that's the way you look at the roll.  

    Given your spread, I'd cash the $540s for $59 and buy 2x of the 2016 $600/700 bull call spreads for $31 and roll the short July $550s ($51) to 1.5x the Oct $590s ($35.50) so then you are 75% covered with $100 upside and you can put a stop on 1/3 of the Oct $590s at $50, which would be about +$30 on AAPL to $630 and then you'd be 1/2 covered and $30 in the money on your 2x longs, which is 6x more than your max gain now.  Of course, I'd also sell 1/2x the 2016 $500 puts for $34 – but I'm a believer….

    Putin/StJ – That's Brent $110, not WTIC.  

    Doom/Scott – May only have to wait until the afternoon.  

    AAPL/Craigs – The Oct $565 calls are $49.50 so net $614.50 is what you're paying (plus exercise fee) to give up your contract premium and buy the stock for $565.  Seems like a waste of $16.50 to me since you can buy that 2016 $600/700 bull call spread for $31 and have all of the upside you are dreaming about without flushing $16.50 down the toilet.  If you want to buy AAPL, buy the stock for $598, SELL your calls for $49.50 and then you are in for $548.50 plus your original $18 is $566.50 vs giving up the $18 you originally spent AND paying $565 for the stock (plus fees) for $583.  Since I just saved you $1,800 per contract – I expect a tip!  

    To anyone who wants a good deal on AAPL, who are splitting 7:1 for about $85 per share, consider that HD is $80 and the 2016 $80/90 bull call spread is $4 while the AAPL 2016 $600/700 bull call spread at $31 will split into the $85/100 bull call spread at $4.42 – seems like a good deal to me!

    There's the Fed, $10Bn Taper as expected.  No reaction, as expected.  

    Release Date: April 30, 2014

    For immediate release

    Information received since the Federal Open Market Committee met in March indicates that growth in economic activity has picked up recently, after having slowed sharply during the winter in part because of adverse weather conditions. Labor market indicators were mixed but on balance showed further improvement. The unemployment rate, however, remains elevated. Household spending appears to be rising more quickly. Business fixed investment edged down, while the recovery in the housing sector remained slow. Fiscal policy is restraining economic growth, although the extent of restraint is diminishing. Inflation has been running below the Committee's longer-run objective, but longer-term inflation expectations have remained stable.

    Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace and labor market conditions will continue to improve gradually, moving toward those the Committee judges consistent with its dual mandate. The Committee sees the risks to the outlook for the economy and the labor market as nearly balanced. The Committee recognizes that inflation persistently below its 2 percent objective could pose risks to economic performance, and it is monitoring inflation developments carefully for evidence that inflation will move back toward its objective over the medium term.

    The Committee currently judges that there is sufficient underlying strength in the broader economy to support ongoing improvement in labor market conditions. In light of the cumulative progress toward maximum employment and the improvement in the outlook for labor market conditions since the inception of the current asset purchase program, the Committee decided to make a further measured reduction in the pace of its asset purchases. Beginning in May, the Committee will add to its holdings of agency mortgage-backed securities at a pace of $20 billion per month rather than $25 billion per month, and will add to its holdings of longer-term Treasury securities at a pace of $25 billion per month rather than $30 billion per month. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee's sizable and still-increasing holdings of longer-term securities should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative, which in turn should promote a stronger economic recovery and help to ensure that inflation, over time, is at the rate most consistent with the Committee's dual mandate.

    The Committee will closely monitor incoming information on economic and financial developments in coming months and will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until the outlook for the labor market has improved substantially in a context of price stability. If incoming information broadly supports the Committee's expectation of ongoing improvement in labor market conditions and inflation moving back toward its longer-run objective, the Committee will likely reduce the pace of asset purchases in further measured steps at future meetings. However, asset purchases are not on a preset course, and the Committee's decisions about their pace will remain contingent on the Committee's outlook for the labor market and inflation as well as its assessment of the likely efficacy and costs of such purchases.

    To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that a highly accommodative stance of monetary policy remains appropriate. In determining how long to maintain the current 0 to 1/4 percent target range for the federal funds rate, the Committee will assess progress--both realized and expected--toward its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. The Committee continues to anticipate, based on its assessment of these factors, that it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends, especially if projected inflation continues to run below the Committee's 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored.

    When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent. The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run.

    Voting for the FOMC monetary policy action were: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Richard W. Fisher; Narayana Kocherlakota; Sandra Pianalto; Charles I. Plosser; Jerome H. Powell; Jeremy C. Stein; and Daniel K. Tarullo.

    NO DISSENT!! That's bullish too.  


  60. XRT/Pfehlman – I'm waiting to see how the week ends at the moment.  XRT down .50 today, 10 more days like this and we're in excellent shape!  laugh


  61. AAPL / Phil – Don't you expect that they'll have the same BS with options that they have with ETF that split or reverse split? Meaning that you'll still have the old options at 8x the price that will become instantly illiquid along the new options at the new price. Look at mess with GOOG. For long term positions that don't need adjustment it's OK I guess. But for trading, it's a big pain in the butt.


  62. EZCH – Thanks Phil, you make some very good points.  As I said, I'm relying on the opinion of some people who have had good track records in tech.  As you said, they are only as good as their last contract.  I do know that these products tend to have a long design cycle because of very complicated software, but once the code is written, it can be used for the next generations of processors.

    That said, I wouldn't know a network processor from a smart phone :-)

    I like your suggested trade, but as you could see from the bid/ask spreads, difficult to execute.


  63. EZCH / albo  Electrical Engineer here: code is not always commutable to new hardware.  Often you want new hardware to add new features or increase performance of code.  If you move to a new processor, the reason would be FOR new features and capabilities.  If you don't change the code, there is rarely a reason to change the hardware.  In the past, you used to get meaningful single threaded performance increases moving to new generations of processors.  Today, that isn't the case and the embedded world is even less sensitive to changes in hardware BECAUSE of how much code needs to be rewritten to exploit hardware improvements.


  64. I guess the FMOC missed the memo this morning on GDP contraction and/or they believe it was weather-related or they don't care.  I am surprised how the markets are taking this in stride though.  


  65. JPH1121 – Thanks.  So are you saying that it's less difficult now to supplant an existing vendor now then it was in the past ?


  66. thanks albo 

    phil / aapl split
    why not just wait for the split and then buy in ( in my experience these splits with option have a real PIA )


  67. Wombat / Stj  What you said about GOOG is right for me it was a PIA .


  68. AAPL/StJ – I doubt it, I think they'll just end up with funny strike numbers in the regular contracts.  If not, I'm still confident they'll end up at $700 and the spread will pay $100 in any event.  

    EZCH/Albo – I'd start by asking for $2 on the short puts and offering $2.75 for the $25 calls, once one of them fills, you can worry about the cover with no pressure as you're already ahead .25 or more on the entry.  

    Thanks JPH.

     Fed/Sibe – I'd say don't care is the answer.  They work for the banks, the banks want them to have excuses to keep giving them free money (by charging the spread losses to US citizens, who end up with the debt) for as long as possible so they can make Billions.  Any excuse will do.  Since cheap money is good for thousands of big corporations (about 1/3 of the market is over $1Bn), everyone is happy – until the bill comes due, like it is in China now. 

    AAPL/Wombat – I'm saying there's a possibility that this price is a very good discount to the price you will get post-split – not to mention the fact that, if AAPL pops post-split, you'll never be able to get those prices again.  

    GOOG/Advill – GOOG did not do a clean split, they did an insane deal where they took away shareholder rights and created different classes of shares.  

    CMG back to $500!  Funny to be on the bull side of those now…


  69. Facebook launches mobile ad network, gives developers new tools

    02:55 PM ET · FB

    • The Facebook Audience Network, in test mode for some time, will allow app developers to deliver targeted ads based on Facebook (FB +2.5%) data and activity. Banner ads, interstitials, and native ads are supported.
    • Facebook is counting on its data and developer reach to grab a larger chunk of a mobile ad market expected by eMarketer to grow 75% this year, and to stand out relative to rival networks from Google, Apple, Twitter, and Millennial Media, among others.
    • The network was launched Facebook’s f8 developer conference, during which Mark Zuckerberg has declared his company’s motto has changed from “move fast and break things” to the less catchy “move fast with stable infrastructure.” To back up the change, Zuck promises Facebook will now fix any bugs in newly-released code with 48 hours.
    • Facebook, aided by its Parse unit, has also used f8 to: 1) Update its login solution for 3rd-party apps to allow anoynmous logins, and to give users more control over what info they share. 2) Launch AppLinks.org, a solution for linking between installed apps.
    • In a Wired interview, Zuck highlights Facebook’s interest in acting as a knowledge source for users, rather than just a sharing source – 5-10% of Facebook posts are questions to friends – and reiterates his interest in having Facebook’s various developer services act as a cross-platform infrastructure for apps. “Right now, you have these different mobile silos … But when someone buys a phone, they don’t want to be limited to just the apps and experiences on that phone.”
    • Shares are up on a day when Twitter is getting clobbered post-earnings.


  70. Pros and cons of Starbucks’ big bet on tea

    02:55 PM ET · SBUX

    • Starbucks (SBUX) rolled out Oprah tea products this week at 12K of its branded stores in the U.S. as well as the 300 Teavana stores it has opened. Early channel checks indicating strong interest from consumers.
    • Tea is the next frontier for Starbucks and some analysts think the Oprah phenomenon gives the initiative a fighting chance.
    • Sales of tea in the U.S. grew from $1.84B in 1990 to $10.41B in 2013, but proponents think the market still has huge upside – especially in the premium segment.
    • A possible catch in the plan can be summed up in one word. Caffeine. If consumers find tea a contemplative drink, instead of a daily craving they need, Starbucks could see slower demand for tea drinks and products than forecast.


  71. Light read on FQ3 traffic from Cracker Barrel

    03:01 PM ET · CBRL

    • Cracker Barrel (CBRL -0.7%) says comparable restaurant sales for Q3 fell 0.7% QTD.
    • The average check rose 2.2% during the period while traffic slid 2.9%.
    • FQ3 EPS guidance is lowered to $1.18-$1.23 by the company due to the light read on traffic and sales.


  72. Exelon -4% on Pepco deal which adds exposure to regulated markets

    02:20 PM ET · EXC

    • Exelon’s (EXC -4.1%) $6.8B purchase of Pepco (POM +17.3%) helps it overtake Duke Energy (DUK) as the biggest U.S. power distribution company, but investors and analysts aren’t enamored with the deal.
    • Wells Fargo’s Neil Kalton question EXC’s wisdom in increasing the company’s regulated exposure at a time when power markets appear to be recovering.
    • EXC is effectively reducing its relative exposure to wholesale generation, whose share of profits will dip to 35%-40% as a result of taking on POM’s regulated assets, and it’s paying 22x 2014 estimated earnings to do so, WSJ’s Liam Denning calculates.
    • Oh, by the way: The deal “smells bad,” FMHR trader Jon Najarian says on CNBC, pointing to unusual options activity ahead of the announcement.


  73. Analysis: MasterCard has edge over Visa as EMV transition picks up

    02:20 PM ET · MA

    • MasterCard (MA +1.2%) could have a competitive advantage over rival Visa (V) as retailers look toward how to handle the adoption of EMV technology.
    • The company’s emphasis on using PINs over signatures could make it more attractive, according to Guggenheim Securities.
    • Cases in point: Target awarded its REDCard portfolio to MasterCard over Visa and Wal-Mart picked it to handle its store-branded cards.


  74. Garmin rallies on Q1 beat; four units show double-digit growth

    02:12 PM ET · GRMN

    • While Garmin’s (GRMN +4.7%) automotive/mobile sales (42% of revenue, long pressured by smartphones) fell 4% Y/Y in Q1 to $243M, fitness sales soared 38% to $100.3M, aviation sales rose 19% to $96M, outdoor sales rose 10% to $84M, and marine sales rose 19% to $60M.
    • Moreover, auto/mobile’s decline was smaller than Q4′s 12% drop, thanks to growing OEM sales (auto design wins) and the amortization of deferred revenue. Fitness growth accelerated from Q4′s 14% clip due to strong demand for Forerunner GPS watches and Vivofit fitness bands.
    • Gross margin rose 500 bps Y/Y to 57% – a mix shift towards fitness (64% GM) and aviation (74%) helped out – and opex growth of 7% trailed revenue growth of 10%. $33M was spent on buybacks. Cash/investments stand at $2.8B.
    • As is its custom, Garmin will wait until Q2 is over to update its full-year guidance. Shares temporarily made new 52-week highs today before pulling back.
    • Q1 results, PR


  75. FOMC sounds more upbeat on the economy

    02:05 PM ET

    • As expected the Fed has added another $10B to the taper, bringing asset purchases down to $45B per month. Of that, $25B will be Treasurys, $20B MBS.
    • “Economic activity has picked up recently, after having slowed sharply during the winter,” leads the FOMC statement. “Household spending appears to be rising more quickly.”
    • Today’s decision is unanimous, with Minneapolis Fed boss Kocherlakota dropping his dovish dissent from the last meeting.
    • Full statement


  76. Gross: Neutral Fed Funds rate far lower than markets believe

    01:46 PM ET · TBT

    • “Interest rates have to be lower in a levered economy so that debtors can survive, debt can be reduced as a percentage of GDP, and economies can avoid recessions/depressions,” writes Bill Gross, arguing the “neutral” fed funds rate is likely far lower than what past history would suggest. A recent Fed paper suggests the current neutral Fed Funds rate might be as low at 50 basis points currently, and would be just 1.5% if PCE inflation rises to 2% in the future.
    • Bill Dudley mused similarly in a speech in 2012, and Pimco’s Saumil Parikh suggested the same one year ago.
    • “I suspect these estimates which average less than 2%, are much closer to financial reality than the average, 4% ‘blue dot’ estimates of Fed ‘participants,’ dismissed somewhat by Fed Chair Janet Yellen herself last month,” says Gross.
    • Why is this so important? Forward markets have priced in a 4% policy rate around 2020. If it’s closer to 2% instead, says Gross, then longer-term bonds – far from being artificially and highly priced – would actually present an attractive value right now.
    • ETFs: TBT, TLT, TMV, SHY, IEF, TBF, PST, EDV, TTT, TMF, ZROZ, SBND, TLH, IEI, DLBS, TYO, DTYS, VGLT, BIL, UST, UBT, PLW, SHV, VGIT, GOVT, TBX, VGSH, TLO, SCHO, GSY, TENZ, DTYL, ITE, SCHR, LBND, TYD, TYBS, TUZ, DTUS, DTUL, SST, TBZ, FIVZ, DFVL, DLBL, DFVS, TYNS


  77. Minimum wage legislation stalls in the Senate

    01:34 PM ET · MCD

    • Republicans in the Senate have blocked a bill that would increase the federal minimum wage to $10.10 per hour incrementally over 30 months.
    • The development sets up minimum wage reform as a major topic during November elections.
    • Consumer companies have mixed opinions on the topic. Though some larger employers could feel a pinch from a higher level of minimum wages (MCD, SWY, KR, WEN) – some analysts think retailers (WMT, DG, FDO, DLTR, TGT) selling to lower income brackets could get a boost. There’s also some speculation that more mom-and-pop shops will be forced out of business if the minimum wage goes to over $10 per hour.


  78. Ford hiring in U.S. ahead of schedule

    01:21 PM ET · F

    • Ford (F -0.5%) will probably hire more than the 12K employees it pledged to under the terms of a 2011 contract with the UAW, according to Joe Hinrichs.
    • The automaker is already 75% of the way to the commitment to add 12K new hire by 2015.
    • The latest round of hiring was in Claycomo, Missouri outside of Kansas City where Ford builds F-series trucks.


  79. Seagate slips on soft outlook; WDC higher ahead of earnings

    12:45 PM ET · STX

    • In addition to missing FQ3 revenue estimates (while beating on EPS), Seagate (STX -1.3%) guided on its CC (transcript) for FQ4 revenue of “at least” $3.3B, unfavorable to a $3.4B consensus. Gross margin is expected to slip to 28% from an FQ3 level of 28.5% due to seasonality.
    • In its earnings slides (.pdf), Seagate estimates industry hard drive shipments totaled 138M in FQ3, down 4M Q/Q but up 2M Y/Y. The company expects unit demand to be “down a few points” in FQ4, but also forecasts 140M-145M shipments for the following two quarters.
    • With the industry having consolidated around Seagate, Western Digital (WDC +0.8%), and Toshiba, pricing is expected to be “relatively stable” in FQ4, and price pressure “benign” in 2H14.
    • High-margin enterprise drive shipments rose by 200K Y/Y to 7.7M. Desktop shipments managed to grow by 200K to 19.8M after many quarters of declines, but notebook shipments fell another 600K to 16.4M. Consumer electronics shipments fell 400K to 5.4M, and high-margin branded drive shipments rose 200K to 5.9M.
    • $184M was spent on buybacks in FQ3. Free cash flow fell to $319M from $713M in FQ2 and $452M a year ago.
    • For once, Western isn’t following Seagate lower; the company reports after the close. Assembly supplier Hutchison (HTCH -1.4%) is down slightly.
    • FQ3 results, PR


  80. Fitch: Russia faces ratings cut thanks to sanctions

    12:23 PM ET · RSX

    • If – as is being threatened – more sanctions are imposed on Russia by the U.S. and EU, Fitch could cut the country’s BBB credit rating (currently two notches above junk). Fitch already sees an economic slowdown to just 1.5% GDP growth next year, and “sanctions are exacerbating this,” says director of sovereigns, Charles Seville.
    • ETFs: RSX, RUSL, ERUS, RSXJ, RUSS, RBL, RUDR


  81. Sonus surges on big insider buy

    12:04 PM ET · SONS

    • Sonus (SONS +8.7%) CEO Raymond Dolan discloses he bought 1M shares yesterday at $2.98. Also, director T. Mark Greenquist bought 15K shares at $2.95.
    • Shares had slipped over the prior week, after Sonus provided somewhat light full-year revenue guidance to go with a Q1 beat.


  82. You on Demand jumps; Chardan sees a potential M&A target

    11:56 AM ET · YOD

    • Alibaba’s investment in Chinese online video leader Youku could lead Baidu or another firm to take a look at You On Demand (YOD +8.1%), thinks Chardan Capital. The firm adds You’s paid subscription model and Hollywood movie library make it an appealing target.
    • Needless to say, You and Youku and are very different companies. Youku had 2013 revenue of $500.3M (largely from ad revenue), and sports a $4.1B market cap. You had 2013 revenue of $309K, and has a $47M market cap.
    • Previous: You on Demand falls after SA author sets $0.50 target


  83. Level 3 soars on Q1 results, guidance hike

    11:33 AM ET · LVLT

    • Level 3 (LVLT +9.6%) has hiked its 2014 adjusted EBITDA guidance to 14%-18% growth from a prior 11%-14%. Free cash flow guidance has been hiked by $25M to $250M-$300M.
    • Adjusted EBITDA rose 23% Y/Y in Q1 to $458M, and adjusted EBITDA margin by 480 bps to 28.5%. Unlevered cash flow grew to $106M from $28M, and free cash flow improved to -$22M from -$162M.
    • A 40 bps Q/Q and 170 bps Y/Y increase in gross margin contributed to the EBITDA growth. As did a 7% Y/Y drop in SG&A spend to $537M.
    • Core network service (CNS) revenue (over 90% of total revenue) grew 6.6% Y/Y in Q1, an improvement from Q4′s 4.1% clip. Wholesale/other revenue fell 26% due to voice weakness.
    • CNS growth was fueled by a 10% Y/Y increase in IP and data services revenue to $573M, and a 5.5% increase in transport/fiber revenue to $502M. The divison’s voice revenue grew only 0.4% to $237M, and its colocation/data center revenue 2.1% to $145M.
    • Level 3 ended Q1 with $7.8B in net debt, roughly even with Q4. Shares have made new 52-week highs.
    • Q1 results, PR


  84. The good, the bad and the ugly about Nymox’s cancer drug trial

    11:32 AM ET · NYMX

    • The good: Nymox Pharmaceuticals’ (NYMX -6.4%) cancer drug NX-1207 delivers positive top-line results in a Phase 2 clinical trial in patients with low grade prostate cancer. Subjects receiving a single injection into the prostate gland had less evidence of cancer progression in the treated area than untreated patients as determined by Gleason grade. There was a statistically significant reduction in the number of higher grade malignancy in biopsy cores versus controls.
    • The bad: The trial’s primary efficacy endpoint of the number of subjects with undetectable prostate cancer as determined by negative biopsies 45 days post treatment could not be assessed due a high percentage of false negative repeat biopsies. Almost 69% of the study subjects had evidence of a very small tumor (>=5% of their positive biopsy). 85% of this subgroup had negative second biopsies thus preventing analyses.
    • The ugly: The time and cost of the trial were wasted. The firm currently seeks a pharmaceutical partner to fund the further development of the drug for low grade prostate cancer.


  85. albo, if it weren't for economies of scale, yes.  Hop on digikey and look at the price breaks you get for buying 10000 of anything versus buying 5.  That's not even taking into consideration the deduplication of efforts for having an EE design the board and the massive discount you'll get from a fab house for fabricating a large order due to decreased engineer hours/unit, etc.


  86. Profit gains for airline sector in Q1

    11:26 AM ET · JBLU

    • U.S. airliners delivered Q1 profits of $401M, compared to a loss of $553M a year ago.
    • JetBlue (JBLU +0.8%) and United Continental (UAL -1.5%) were the only carriers not to improve their profitability from last year. If UAL’s results are backed out, the group (ALK, ALGT, AAL, DAL, HA, LUV, SAVE) saw a profit gain of over $1B for the period.
    • Improving business demand and solid pricing trends (fares, bags) have helped lift the sector.


  87. Vale’s Q1 profit falls 19% on lower iron ore prices

    11:14 AM ET · VALE

    • Vale (VALE -1.3%) reports a 19% Y/Y drop in its Q1 profit to $2.52B, slightly below the $2.59B analyst consensus, as its realized prices for iron ore fell to a four-year low.
    • Q1 net revenue fell 11% to $9.5B, the lowest level for any three-month period since Q1 2010; Brazil’s seasonal rains limited production, typical for Q1, but lower prices for iron ore also chopped $1.3B from Vale’s sales Q/Q.
    • Revenue would have fallen further if it were not for a 9.6% growth in iron ore output to 71.1M metric tons, the best Q1 result since 2008 but 13% lower Q/Q.
    • Vale received an average $90.52/ton of iron ore it sold, down 19% Y/Y and the company’s lowest realized price since 2010.
    • EBITDA fell 22% Y/Y to $4.06B.


  88. Orange rallies on post-earnings Barclays upgrade

    11:11 AM ET · ORAN

    • Barclays has upgraded Orange (ORAN +4.6%) to Equal Weight a day after the carrier posted market-pleasing Q1 results.
    • Shares are making fresh 52-week highs. They were already moving higher ahead of earnings on hopes of French mobile consolidation.
    • Thanks in large part to declining French revenue (causes by price pressure and weakening voice/SMS activity), Orange’s total revenue fell 4.6% Y/Y in Q1. But that figure was smaller than Q4′s 6.4%, and Orange sounded optimistic French price pressures would soften. “I feel quite confident that the market is going to cool down,” said Orange France chief Delphine Ernotte.
    • At the same time, Orange has cautioned 2H results could be pressured by the EU’s efforts to end intra-continental roaming fees.


  89. GSEs would need further bailout under Fed’s “severely adverse” scenario

    11:09 AM ET · FNMA

    • Under the FHFA’s baseline scenario, neither Fannie Mae (FNMA -1.3%) nor Freddie Mac (FMCC -1.8%) would require addition draws from the Treasury through 2015, but under the “severely adverse” scenario applied to the banks by the Fed in its stress tests, incremental draws of between $84.4B and $190B would be necessary.
    • The severely adverse scenario includes a 25% decline in home prices over about a two-year period, a 20-90% decline in non-agency MBS prices, and the instantaneous default of the largest derivative counterparty.
    • Under the worst FHFA scenario, home prices would decline 2% over nine quarters.


  90. US Steel -3% as sizable Q2 negative impact seen from outages

    10:53 AM ET · X

    • US Steel (X -3%) tumbles after beating Q1 earnings forecasts but warning of a tough Q2, including a loss in its flat-rolled segment largely caused by recent outages at the Gary and Great Lakes facilities.
    • J.P. Morgan sees the flat-rolled loss as a negative surprise after Q2 earnings expectations but just begun to be revised lower in recent weeks.
    • Nomura says educed volume should contribute to higher unit costs and limit X’s ability to sell into a strong spot sheet market; also, the outages in Q2 likely will negatively impact the mix away from coated automotive products, a high margin product category.


  91. Micron gains; DRAM price hikes reportedly on tap

    10:49 AM ET · MU

    • Digitimes reports Micron (MU +2.7%) will likely hike DRAM prices in May “due to low inventory levels in the supply chain and insufficient supply of memory chips from Samsung Electronics (SSNLF) and SK Hynix (HXSCL)”
    • Samsung is said to be dealing with low yields for its new 25nm DRAM process, leaving it unable to fulfill orders from PC OEMs, and Hynix’s efforts to restart production at its fire-damaged Wuxi, China fab have reportedly been slowed by the installation of new machinery.
    • DRAM prices surged last year as industry consolidation, restrained capex, and strong mobile DRAM demand led to a favorable supply/demand balance. David Einhorn’s bull case for Micron is based in large part on a belief consolidation will produce long-term changes in the industry supply and pricing dynamics.
    • Yesterday, Samsung reported Q1 memory (DRAM + NAND) sales of 6.29T won ($6.08B), -3% Q/Q (mobile seasonality) but +23% Y/Y. The company added PC DRAM demand is stabilizing, and that SSD and high-density memory card sales are boosting NAND demand.
    • Samsung expects a “balanced” DRAM supply/demand environment in 2014, and strong PC and data center SSD demand to fuel NAND growth.


  92. Total Q1 results hit by struggling refining, lower output

    10:35 AM ET · TOT

    • Total (TOT +1%) reports Q1 earnings fell 10% Y/Y as refining margins and output slumped, but results were in-line with analyst estimates.
    • Q1 production fell 6% Y/Y to 2.179M boe/day from 2,323M boe/day a year earlier, marking TOT’s first production drop in three consecutive quarters.
    • Security issues hurt output from Libya and Nigeria, while the UAE in January took control of oilfields that had been run by oil majors such as TOT for decades.
    • Booked a $350M charge on a Russian Arctic gas project it hoped to develop with Gazprom but shelved due to high costs.
    • Says European downstream margins had started to recover in Q2, but expects maintenance at its German and Dutch refineries in Leuna and Vlissingen to hit output.
    • Upstream, TOT expects the start-up of the CLOV project in Angola at the end of June, and the coming on stream of the Laggan-Tormore field in Scotland and Nigeria’s Ofon Phase 2 in H2 2014.


  93. Phil- My wife sent me out into the pouring rain for a while today, so I am just seeing your answer about the Oct 565 calls. I knew there had to be something wrong with the way I was looking at it, so thanks for spelling it out for me. I was looking at what I was actually spending out of pocket without accounting for the lost premium. Thanks for helping me see the obvious!


  94. Phil – maybe it's madness, but I am thinking of rolling some FTR stock into NLY stock in a corporate account that does not do ANY options currently. This is a very low turnover account.


  95. Phil/"FOMC sounds more upbeat on the economy"

    Phil, what does the FED see that you don't?  Improved? Yes.  But nothing really that "upbeat"??


  96. dclark

     Don't discount the oil build and the GDP flop. Fed is a joke.


  97. Obvious/Craigs – No problem.  One day, it will be obvious to you from the outset.  

    NLY/Scott – I certainly like them long-term and they pay a great dividend.  Just have to ride the waves of the real estate and interest markets with them.  

    Upbeat/DC – I'd say that's an overstatement.  Fed sees a slow, steady recovery – I see that too.  My objection isn't to the concept of a recovery but the fact that the market is pricing us for robust growth with NO discounting for possible problems while I see CHINA!!!, Inflation, Poverty, Drought, Debt Defaults, Climate Change – all in the not too distant future.  I also see a US GDP growing at 0.1% and that 0.1% is because of higher energy prices – we're NOT in a recovery that's worth all-time high stock prices – that's all. 


  98. Remember when CHINA!! meant BUY, BUY, BUY?!


  99. Volume still seems to low in support of up market.


  100. Shadow

    Just trying to stay balanced.  It's very easy to become too short in a market that has a tendency to take for ever to register an appropriate response to its environment.


  101. SPY Calls from yesterday….nice!   Going to hold them for a bit longer.  Looking for more upside.  One could sell 1/2 and let the rest ride…


  102. Whoops, they fell as I was typing.  I am in at 53c, they were 63c.


  103. dclark

    remember the run up today was linked to dollar down, very close to a bottom.


  104. Shadow

    Thanks.  Now back to watching paint dry.


  105. scottmi re: UNP, yeah it's holding up pretty well.  I like the feeling that time is on my side, so to speak. 

    watching the earnings reports, it seems like bad news or even not good enough news is a downer right now in many cases.  A lot of things coming down. Overall market seems to be holding up, not sure where the long money is going to, but these calendars are going to be some powerful tools if we can get ourselves some great entries !


  106. This is the tenth day since the 200 day IWM was broken and the second since Monday. Last years trend line is totally broken down and is now down not up.


  107. …and a stick into the close!


  108. Crazy low volume for a Fed day but a green finish nonetheless.  Amazing move on the RUT at the end, back to 1,125 from 1,105.  

    Oil still under $100 at $99.80.  Dollar 79.56.  


  109. QUIK – Quarter was as expected, a slight beat on revenues.  Hopefully the conference call will provide some color on new products.

     

    QuickLogic reports EPS in-line, beats on revs (4.74 -0.03)

    Reports Q1 (Mar) loss of $0.03 per share, in-line with the Capital IQ Consensus Estimate consensus of ($0.03); revenues rose 270.9% year/year to $11.2 mln vs the $10.1 mln consensus.  During the first quarter, new product revenue increased 27% to $8.9 million from $7.0 million in the fourth quarter of 2013. New product revenue accounted for 80% of the total revenue in the first quarter. During the first quarter, mature product revenue increased 24% to $2.2 million sequentially. Mature product revenue accounted for 20% of the total revenue in the first quarter


  110. Phil, Denlundy / Volume -

    Just yesterday, I was complaining about what appeared to be some of the lowest volume I'd seen on the Nasdaq in a long time when the market is trending upwards. Today, it's even lower for both, and potentially the lowest I've seen in a few years for the NYSE:

     

    NASDAQ Complosite: Current Vol vs. Previous Day Vol: (2.32%), Current Vol vs. 50-Day Average Vol (14%)

    NYSE Composite: Current Vol vs. Previous Day Vol: (7.83)%; Current Vol vs. 50-Day Average Vol (83%)!!!

    Wow, where's the Glenlivet when you need it!


  111. where do you guys go for earnings ?


  112. glu / beat
    street not liking guidance


  113. god – yahoo is so f@ckd up ////


  114. QUIK – Conference call.  Second quarter will be down due to tablet mfgrs. cutting back on orders.  May have more time to accumulate (as if I need that).  Company very optimistic for year as a whole. 


  115. It's incredible the divergence between the Nasdaq and the Russell compared to the other indices.


  116. a very succinct and I think accurate summary of the state of the US Economy:

    http://www.paulcraigroberts.org/2014/04/30/us-economy-house-cards-paul-craig-roberts/print/


  117. Good morning!

    Lots of markets are closed for May Day, hard to get a read as volume is crap for the few that are open.  Oil still under $100 tells a story.  Our Futures are down very slightly. 

    /SI still my favorite, bullish off the $19 line and not a penny below!


  118. From Bloomberg, Apr 30, 2014, 10:00:00 PM

    AstraZeneca Crestor cholesterol tablets are seen during the production process at an AstraZenenca Plc manufacturing plant in this undated handout photo released to the media. Source: NewsCast/AstraZeneca Plc via Bloomberg

    Earl Harford, a retired professor, recently bought a month’s worth of the pills he needs to keep his leukemia at bay. The cost: $7,676, or three times more than when he first began taking the pills in 2001. Over the years, he has paid more than $140,000 from his retirement savings to cover his share of the drug’s price.

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


  119. From Bloomberg, Apr 30, 2014, 3:08:57 PM

    An employee counts mixed denomination rand currency banknotes at the Forex department inside a First National Bank branch in Johannesburg. Photographer: Nadine Hutton/Bloomberg

    The foreign-exchange market is losing a slew of traders from big banks as a probe into alleged manipulation of benchmark rates widens and pressure mounts on the industry to reduce costs.

    To read the entire article, go to http://www.bloomberg.com/news/2014-04-29/traders-join-exodus-as-forex-probes-add-pressure-on-costs.html
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  120. From Bloomberg, May 1, 2014, 2:05:22 AM


    May 1 (Bloomberg) — Ding Shuang, senior China economist at Citigroup Inc. in Hong Kong, talks about the world’s second-largest economy, and its government and central bank policies.
    China’s manufacturing grew less than economists estimated in April, underscoring weakness in the economy. Ding speaks with Rishaad Salamat on Bloomberg Television’s “On the Move.” (Source: Bloomberg)

    China’s manufacturing grew less than analysts estimated in April, highlighting weakness in the economy from exports to construction that could force extra government measures to support growth.

    To read the entire article, go to http://bloom.bg/1n4H2mF
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  121. From Bloomberg, Apr 30, 2014, 12:00:01 PM

    China’s rise as an export juggernaut has coincided with a big drop in labor’s share of U.S. national income. Photographer: Kiyoshi Ota/Bloomberg

    China will implement measures to stabilize the country’s “severe and complicated” foreign-trade situation, Premier Li Keqiang said.

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


  122. From Bloomberg, May 1, 2014, 12:01:01 AM


    Evidence in the case included blunt exchanges in e-mails about no-hire arrangements among executives including Apple co-founder Steve Jobs and then-Google Chief Executive Officer Eric Schmidt. Photographer: David Paul Morris/Bloomberg

    The jury deciding Apple Inc. (AAPL) and Samsung Electronics Co. (005930)’s $2 billion patent-infringement case asked the judge for additional evidence about whether Google Inc. was mentioned when Steve Jobs, the iPhone maker’s co-founder, decided to sue.

    To read the entire article, go to http://bloom.bg/1fu5RZI
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  123. From Bloomberg, May 1, 2014, 1:23:14 AM

    Investors are devouring the 2011 novel “The Shipping Man” amid a surge of interest in shipping, which is still recovering from the worst global recession since the Great Depression. Photographer: Patrick T. Fallon/Bloomberg

    The fictional Robert Fairchild is one
    of the hottest names on Wall Street. He’s the hero of the 2011
    novel “The Shipping Man,” a New York hedge fund manager who
    becomes so captivated by wild swings in freight rates that he
    buys a dry-cargo carrier and sets off on an adventure leading to
    run-ins with Somali pirates and Greek tycoons.

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

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

    Costolo: Twitter Platform Bigger Than App, Website
    April 30: Dick Costolo, CEO at Twitter, talks with Emily Chang about integration into the global culture and revenue verses user growth.

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


  125. Sent from Bloomberg for iPad

    Watch this video at http://bloom.bg/1lxU7Fr

    Exelon to Buy Pepco in Deal Worth More Than $5.4B
    April 30: Bloomberg’s Scarlet Fu reports that Exelon has agreed to purchase Pepco in a deal worth more than $5.4 billion on Bloomberg Television’s “Bloomberg Surveillance.”

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  126. Sent from Bloomberg for iPad

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

    Economy in U.S. Stalls on Business Investment
    April 30: Economic growth in the U.S. stalled in the first quarter as harsh winter weather chilled business investment, exports dropped and inventories climbed at a slower pace. Consumer spending rose more than forecast, propelled by the biggest gain in services in 14 years. Michael McKee reports on Bloomberg Television’s “In The Loop.”

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  127. From Bloomberg, May 1, 2014, 2:49:31 AM


    April 29 (Bloomberg) — Toby Lawson, head of futures, options and cash equities trading for Asia Pacific at Newedge Group SA in Sydney, talks about Bank of Japan policy and the nation’s stock market.
    Lawson also talks about the crisis in Ukraine and its implications for global financial markets. He speaks with Angie Lau on Bloomberg Television’s “First Up.” (Source: Bloomberg)

    Japanese stocks and U.K. index futures
    climbed while precious metals fell amid optimism the U.S.
    economy is gaining momentum. Nickel slid and oil held below $100
    as Chinese manufacturing expanded less than forecast.

    To read the entire article, go to http://bloom.bg/1jjlClh
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  128. From Bloomberg, May 1, 2014, 12:00:00 AM


    April 30 (Bloomberg) — Mark Kiesel, deputy chief investment officer at Pacific Investment Management Co., talks about the report on U.S. gross domestic product for the first quarter of 2014 and Federal Reserve policy.
    They speak with Trish Regan and Michael McKee on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

    The Federal Reserve said it will keep reducing the pace of bond purchases as the economy shakes off the winter doldrums, putting the central bank on a course to end the unprecedented stimulus program by the close of 2014.

    To read the entire article, go to http://bloom.bg/1ftA8I3
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  129. From Bloomberg, May 1, 2014, 2:59:43 AM


    A Sony Corp. Vaio laptop computer. The company will sell its PC business, which produces notebooks under the Vaio brand, to buyout firm Japan Industrial Partners Inc. Photographer: Kiyoshi Ota/Bloomberg

    Sony Corp. (6758), the maker of Xperia
    smartphones and PlayStation consoles, posted a loss 18 percent
    larger than forecast as the company cut earnings a third time in
    the past year amid slumping consumer electronics sales.

    To read the entire article, go to http://bloom.bg/1mgl2s7
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  130. From Bloomberg, May 1, 2014, 2:47:43 AM

    A visitor looks at Toyota Motor Corp. vehicles at the company’s showroom in Tokyo. Including deliveries for its Hino Motors Ltd. and Daihatsu Motor Co. units, Toyota’s sales rose about 6 percent to 2.58 million in the January-to-March period. Photographer: Tomohiro Ohsumi/Bloomberg

    Call it Japan’s Great Hangover.

    To read the entire article, go to http://bloom.bg/R5ENnT
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  131. From Bloomberg, May 1, 2014, 2:23:26 AM

    AT&T Inc. (T), the second-biggest U.S.
    mobile-phone carrier, approached DirecTV (DTV) about possibly
    acquiring the satellite-television company, the Wall Street
    Journal said, citing people familiar with the situation.

    To read the entire article, go to http://bloom.bg/1u7zeEM
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  132. From Bloomberg, May 1, 2014, 12:00:01 AM

    The Dow Jones Industrial Average (INDU)
    crawled back to a record, helped along by last year’s worst-performing stocks: International Business Machines Corp. and
    Caterpillar Inc.

    To read the entire article, go to http://bloom.bg/1nKC694
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  133. From Bloomberg, May 1, 2014, 2:27:29 AM


    April 29 (Bloomberg) — Toby Lawson, head of futures, options and cash equities trading for Asia Pacific at Newedge Group SA in Sydney, talks about Bank of Japan policy and the nation’s stock market.
    Lawson also talks about the crisis in Ukraine and its implications for global financial markets. He speaks with Angie Lau on Bloomberg Television’s “First Up.” (Source: Bloomberg)

    Japan’s Topix index rose to a three-week high, after yesterday capping a four-month decline, as the
    Federal Reserve said the U.S. economy is gaining momentum and
    investors weighed earnings.

    To read the entire article, go to http://bloom.bg/1fRyhY1
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  134. From Bloomberg, Apr 30, 2014, 8:10:02 PM

    Christine Lagarde, manging director of the International Monetary Fund, speaks after a board meeting in Washington on April 30, 2014. Photographer: Allison Shelley/Getty Images

    The International Monetary Fund
    approved a $17-billion loan to Ukraine with an immediate
    disbursement of $3.2 billion to help the country pay its debts
    as separatist unrest threatens to split the nation’s east.

    To read the entire article, go to http://bloom.bg/1meX94g
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  135. From Bloomberg, Apr 30, 2014, 11:20:37 AM

    An artist’s rendering of the Chicago skyline as it would appear with the 150-story Spire in the center. Source: Weber Shandwick via Bloomberg

    Garrett Kelleher, the Irish developer trying to restore Chicago’s status as home to the tallest building in the U.S., has one last chance to keep his dream alive.

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

    Watch this video at http://bloom.bg/R1HcAj

    Former Fed Governor Kroszner on Policy, Economy
    May 1 (Bloomberg) — Randall Kroszner, a professor at the University of Chicago’s Booth School and a former Federal Reserve governor, talks about the U.S. economy and central bank policy.
    The Fed said it will keep trimming the pace of asset purchases as the economy shakes off the winter doldrums. Kroszner speaks with Angie Lau on Bloomberg Television’s “First Up.” (Source: Bloomberg)

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


  137. From Bloomberg, Apr 30, 2014, 9:54:19 PM

    A man walks in front of Hokkaido Electric Power Co.’s Tomari nuclear power plant in Tomari Village, Hokkaido, Japan. Hokkaido Electric also applied in July for the restart of three units at its Tomari atomic plant. Photographer: Tomohiro Ohsumi/Bloomberg

    Japan moved to prop up another two
    unprofitable power companies after they posted losses of 159
    billion yen ($1.6 billion), underscoring how the idling of
    atomic reactors is forcing losses on most of the nation’s
    utilities.

    To read the entire article, go to http://bloom.bg/1u7j3HQ
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  138. From Bloomberg, Apr 30, 2014, 6:29:49 PM

    Federal Reserve Board members
    convened yesterday amid indications they may be re-starting
    discussions on an exit strategy from record monetary stimulus.

    To read the entire article, go to http://bloom.bg/1iKiTBy
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  139. From Bloomberg, Apr 30, 2014, 4:40:17 PM


    April 30 (Bloomberg) — Mark Kiesel, deputy chief investment officer at Pacific Investment Management Co., talks about the report on U.S. gross domestic product for the first quarter of 2014 and Federal Reserve policy.
    They speak with Trish Regan and Michael McKee on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

    The harsh winter sent a chill through the U.S. economy in the first quarter as slumps in business investment and home construction stalled growth.

    To read the entire article, go to http://bloom.bg/1u3RCP5
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  140. From Bloomberg, Apr 30, 2014, 2:34:02 PM


    Applicants get in line outside during a health care enrollment event on March 31, 2014 in Los Angeles. Photographer: Ringo Chiu/Zuma Press

    A surge in health-care spending
    that helped keep the U.S. economy from shrinking in early 2014
    is likely to continue fueling growth in coming months as more
    Americans gain coverage for medical services.

    To read the entire article, go to http://bloom.bg/1u4Q0Vc
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  141. From Bloomberg, Apr 30, 2014, 12:42:11 PM


    Photographer: Justin Sullivan/Getty Images

    (Corrects reference to costs in sixth graphic; adds definition of “per-capita government spending” in sixth paragraph.)

    To read the entire article, go to http://bv.ms/1hWwQYf
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  142. From Bloomberg, Apr 30, 2014, 2:22:50 PM


    The official caption of this is “A piece of industry-themed art stands in a hallway at Freddie Mac headquarters in McLean, Virginia, U.S., on Tuesday, April 8, 2014.” Okay! Photographer: Andrew Harrer/Bloomberg

    Fannie Mae and Freddie Mac are really really big. This can mess with your intuitions. So is this a big number or a small number?

    To read the entire article, go to http://bv.ms/1kiinHz
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  143. From Bloomberg, Apr 30, 2014, 5:53:45 PM

    The colors in Gujarat are vibrant. The investment not so much. Photographer: Adeel Halim/Bloomberg

    With just two weeks to go until poll results are announced in India, local stock markets have soared. Investors are giddy at the prospect that Gujarat’s Chief Minister Narendra Modi will lead the opposition Bharatiya Janata Party to a sweeping victory, hoping he can revive growth rates that have dipped below 5 percent a year, half of what they used to be. Under Modi, Gujarat’s gross domestic product growth has consistently exceeded the national average: He’s hailed as a proven, pro-business achiever.

    To read the entire article, go to http://bv.ms/1fRfZ9b
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  144. From Bloomberg, Apr 30, 2014, 4:27:27 PM

    This is the kind of solar energy that doesn’t incinerate birds. There’s also the other kind. Photographer: Chip Chipman/Bloomberg

    Workers at the power plant call them “streamers,” like something you might toss during a parade or a New Year’s Eve celebration.

    To read the entire article, go to http://bv.ms/1fR3v1B
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  145. From Bloomberg, Apr 30, 2014, 4:10:16 PM

    Fair and balanced forever? Photographer: Slaven Vlasic/Getty Images

    What is the future of partisan media? Not long ago, virtually all of the news media was “neutral.”* Political talk radio goes back only to the Reagan era, and Fox News didn’t exist for most of the Clinton presidency. Nor, obviously, did partisan or ideological web sites. Even op-ed pages in major newspapers are a relatively recent creation. For the most part, there were low-circulation opinion magazines — National Review, the Nation and such — and little else.

    To read the entire article, go to http://bv.ms/1fR0MoK
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  146. From Bloomberg, Apr 30, 2014, 2:33:23 PM

    At least something’s growing somewhere. Photographer: Sam Hodgson/Bloomberg

    There’s really not much good to say about this morning’s first-quarter gross domestic product numbers. An annualized growth rate of 0.1 percent is not so much a growth rate as a rounding error.

    To read the entire article, go to http://bv.ms/1kijwyH
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  147. Overseas

    06:00 AM ET

    • Japan +1.27%.
    • Hong Kong Closed.
    • China Closed.
    • India Closed.
    • London +0.28%.
    • Paris Closed.
    • Frankfurt Closed.


  148. Japanese, U.K. shares, U.S. stock futures rise

    05:22 AM ET

    • The Nikkei jumps 1.3% and the FTSE 100 is +0.4% as Japanese and U.K. markets trade while much of Asia and Europe enjoys a day off for May Day.
    • Investors shrug off sluggish Chinese PMI figures as the Fed’s upbeat statement yesterday boosts the mood. In Britain, strong housing and manufacturing PMI data might also be helping.
    • Hong Kong, China and India closed.
    • Paris, Frankfurt, Milan, Madrid closed.
    • U.S. stock futures: Dow +0.05%. S&P +0.1%. Nasdaq +0.3%


  149. Endo to pay $830M to settle claims over vaginal mesh inserts

    04:58 AM ET · ENDP

    • Endo Health Solutions (ENDP) has agreed to pay $830M to settle 20,000 claims – or a “substantial majority” – that its vaginal mesh inserts caused injuries.
    • Endo will book a pretax, noncash charge of $625M for Q1, taking the liability accrual for the lawsuits to $1.1B. Endo had previously provisioned $520M.
    • The deal adds to the $54.4M that Endo agreed to pay last year to resolve other cases. Peer device-makers have been facing similar claims as well, including J&J and Boston Scientific.
    • Endo is due to release its results this morning.


  150. U.K. manufacturing activity accelerates

    04:42 AM ET

    • U.K. manufacturing PMI rose to 57.3 in April from 55.8 in March and comfortably topped consensus of 55.4.
    • Growth of output and new orders accelerated, while input prices dropped for a second consecutive month.
    • The data suggests manufacturing growth may top 1.5% in Q2. Jobs in the sector are being created at around 10,000 a month
    • However, there was another sharp slowdown in the growth of new orders for investment goods, which is a blow to the hopes of re-balancing the economy away from its reliance on consumers.
    • The pound takes a leap and is +0.2% at $1.6911, while the FTSE 100 is +0.4%. (PR)


  151. Novo Nordisk net profit rises 8%

    04:28 AM ET · NVO

    • Novo Nordisk’s (NVO) Q1 net profit increased 8% to 6.46B Danish kroner ($1.2).
    • Sales +2% to 20.34B kroner, slightly missing consensus.
    • Excluding the impact of forex fluctuations, sales +7% in local currencies.
    • Novo Nordisk lowered its FY sales-growth guidance in local currencies to 7-10% from a prior forecast of 8-11%. The insulin company maintained its outlook for operating-profit growth of 10%.
    • Earnings were hampered by Express Scripts excluding Novo’s Victoza and NovoLog diabetes treatments from its “preferred drug” list in January.
    • Share are -3.2% in Copenhagen. (PR)


  152. Lloyds underlying profit +22% as impairment charges drop

    03:48 AM ET · LYG

    • Lloyds’ (LYG) Q1 underlying pretax profit climbed 22% to £1.8B.
    • Statutory pretax profit dropped to £1.37B ($2.31B) from £2.04B, which included gains from the sale of government securities. Consensus was £1.7B.
    • Net interest income rose 10% to £2.81B.
    • Net income fell to £1.15B from £1.53B.
    • Impairment charges dropped 57% to £431M, costs -5% to £2.3B.
    • Tier 1 ratio rose to 10.7% from 10.3% at the end of 2013; leverage 4.5%.
    • Lloyds expects to float 25% of its TSB division by the end of June, and to apply for permission to restart dividend payments in H2.
    • Shares are +3.5% in London. (PR)


  153. Sony’s FY loss set to be almost 20% higher than forecast

    03:30 AM ET · SNE

    • Sony’s (SNE) preliminary fiscal-year net loss was ¥130B ($1.3B), 18% above a February forecast of ¥110B and far worse than the company’s even earlier FY guidance for a profit of ¥30B. In FY 2013, Sony made a profit of ¥43B.
    • Operating profit ¥26B vs a prior prediction of ¥80B and ¥230B in FY 2013.
    • Sony will book additional costs of ¥30B for its PC unit, which the company is selling, and ¥25B of charges for its overseas disc manufacturing operations amid falling demand.
    • On the brighter side, FY sales rose a preliminary 14.3% to ¥7.77T, higher than a previous forecast of ¥7.7T. (PR)


  154. AT&T eyes DirecTV in possible $40B+ deal

    03:14 AM ET · T

    • AT&T (T) has approached DirecTV (DTV) about buying the satellite-TV provider in a deal that could be worth at least $40B, the WSJ reports. DirecTV, whose market cap is $39.5B, is open to a deal.
    • The combined company would have almost 26M pay TV subscribers vs the 30M that Comcast would have if it acquires Time Warner Cable.
    • As with the Comcast-TWC deal, a major question is whether regulators would authorize a tie-up between AT&T and DirecTV, with broadband competition likely to be the main issue in any review.


  155. Chinese factory PMI nudges higher

    02:58 AM ET · FXI

    • China’s official manufacturing PMI edged up to 50.4 in April from 50.3 in March but slightly missed consensus of 50.5.
    • Output, new orders and purchases of inputs expanded, but new export orders, stocks of finished goods, backlogs of orders, imports and stocks of major inputs contracted. Input prices fell while suppliers’ delivery was faster.
    • The data, which indicates that manufacturing is just about expanding, adds to HSBC’s flash PMI reading, which shows that the sector is contracting.
    • “The economy is showing slight improvements due to recent policy measures but there is no sign of a bottoming out,” says economist Sun Wencun.
    • Chinese markets are closed today for a holiday. (PR)
    • ETFs: FXI, PGJ, GXC, FXP, YINN, KWEB, CYB, HAO, CNY, ASHR, CHIQ, DSUM, TAO, YANG, CHIX, CQQQ, MCHI, QQQC, PEK, XPP, YAO, CHXX, YXI, CHXF, FXCH, CHII, ECNS, CHIE, CHIM, FCA, KFYP, CHLC, TCHI, CHNA, KBA, CN


  156. Crocs misses by $0.03, beats on revenues

    01:57 AM ET · CROX

    • Crocs (CROX): Q1 EPS of $0.14 misses by $0.03.
    • Revenue of $312.4M (flat% Y/Y) beats by $1.39M.
    • Press Release


  157. Thursday’s economic calendar

    12:00 AM ET


  158. U.S. ends antitrust probe of Chesapeake, Encana

    Yesterday, 07:18 PM ET · CHK

    • The Department of Justice ends its probe of possible antitrust violations by Chesapeake Energy (CHK) and Encana (ECA) related to their land-leasing activities in Michigan, the companies say.
    • ECA says “The conclusion of their investigation is consistent with the findings of our independent investigation, and of our Board of Directors, that Encana did not engage in collusion with competitors in Michigan in 2010.”
    • CHK and ECA still face state charges in Michigan; both have denied the Michigan charges and said they would fight the allegations.


  159. Report: Merck explores $15B drug portfolio sale

    Yesterday, 06:28 PM ET · MRK

    • Merck (MRK) is considering the potential sale of a portfolio of off-patent drugs which could command more than $15B, Reuters reports.
    • MRK, which also is in the process of selling its $14B consumer healthcare unit, is said to be working with an investment bank on the potential sale of the portfolio of mature drugs, which could draw interest from generic drugmakers.
    • The sale process would underscore efforts by large drugmakers to shed smaller divisions they view as non-core so they can better focus on their mainstay products.


  160. GT Advanced +2% AH on deals to commercialize Hyperion

    Yesterday, 05:49 PM ET · GTAT

    • GT Advanced (GTAT) has signed an MOU with Europe’s EV Group to jointly create the equipment and production processes needed to bond the sapphire and silicon carbide (SiC) lamina produced by GT’s Hyperion ion implanter tech to substrates such as glass, silicon, and plastic.
    • GT also says it will partner with a leading glass substrate maker to “develop specially engineered substrate materials that can be bonded to ultra-thin sapphire lamina to create unique composite solutions” that expand sapphire’s reach to new markets.
    • Lastly, the company has “acquired patent-pending technology for producing low-cost, scratch-resistant aluminum oxide coatings for various substrates including glass and plastics.” GT expects the coatings to match sapphire’s durability and scratch-resistance at lower price points, and in doing so address markets where not all of sapphire’s strengths are needed.
    • GT has long asserted Hyperion, obtained in 2012 via its acquisition of Twin Creeks Technologies, can address applications ranging from power semiconductors to solar wafers to touchscreens. Last month, SA author Matt Margolis argued Hyperion could enable thin solar cells for electronic devices that sport 40%+ efficiency ratings.
    • Shares had already risen 5.4% in regular trading. Q1 results are due on May 8.


  161. Cliffs Natural’s debt covenants depend on $120 iron ore, analyst says

    Yesterday, 05:18 PM ET · CLF

    • It’s been a tough year for Cliffs Natural Resources (CLF): Shares have slipped by a third YTD after disappointing earnings, problems at its Bloom Lake project, sniping from Casablanca Capital, and even removal from the S&P 500.
    • As if that weren’t enough, Axiom Capital’s Gordon Johnson thinks CLF also has to worry about its debt covenants: CLF is projecting iron ore prices to average ~$120/ton in 2014, he says, because at $119.99/ton, CLF would be in violation of its most restrictive financial covenant – the one that says debt cannot exceed 3.5x EBITDA.
    • To average $120/ton for 2014 as CLF is guiding, iron ore would need to average $120.96/ton for the rest of the year, Johnson says; assuming flattish prices from yesterday’s $108.6/ton through June 30, H2 iron ore would have to rise 5% on average vs. H1 to get to ~$120/ton for the full year.


  162. JDS Uniphase, Oplink fall on soft earnings, guidance; Finisar also off

    Yesterday, 05:09 PM ET · JDSU

    • In addition to missing FQ3 estimates, JDS Uniphase (JDSU -6.9% AH) is guiding for FQ4 revenue of $425M-$445M and EPS of $0.10-$0.14, below a consensus of $459M and $0.17.
    • The company blames its FQ3 miss on “later-than-expected carrier orders.” Optical communications product sales grew 7.1% Y/Y, slower than FQ2′s 12.1% clip. Network and service enablement (test equipment) sales fell 1.1% after declining 0.2% in FQ2.
    • Peer Oplink (OPLK -6.7% AH) also posted an FQ3 miss, while adding it’s seeing “a bit of softness” in its optical business. FQ4 guidance is for revenue of $48M-$52M and EPS of $0.05-$0.11, below a consensus of $53.3M and $0.17.
    • Finisar (FNSR) is down 1.1% AH. Others that might slip: OCLR, AFOP, NPTN, FN.


  163. Core income misses estimates at American Capital Mortgage

    Yesterday, 04:49 PM ET · MTGE

    • Net income of $48.8M or $0.95 per share, with spread and dollar roll (core) income of $0.62 missing estimates by $0.02 and coming against the quarter’s $0.65 dividend. $9.2M of operating income from Residential Credit Solutions (MSR business). As of the end of the quarter, company has about $37.3M, or $0.73 per share in estimated undistributed taxable income.
    • Book value per share of $21.78 up from $21.47 at the end of last year after including $0.65 payout. 4.5% economic return from the $0.65 dividend and $0.31 per share increase in book value.
    • Investment portfolio of $5B agency MBS, $700M of net long TBA securities, $1B of non-agency MBS, and $41.3M of investments in agency mortgage REITs.
    • CPR on agency portfolio of 5.7% about the same as Q4. Net interest spread of 2.23% slips 7 bps from Q4.
    • Buybacks fizzle to a near-halt: 200K shares or 0.4% of the float repurchased during quarter at average price of $19.67 each.
    • CC tomorrow at 11 ET
    • Source: Press Release
    • Previously: American Capital Mortgage beats by $0.29, misses on revenue
    • MTGE +0.4% AH


  164. MetLife off 3.3% after-hours on earnings miss

    Yesterday, 04:19 PM ET · MET

    • Operating earnings of $1.6B off 4% Y/Y, with operating earnings per share of $1.37 off 7%. Book value per share (excluding AOCI) of $49.34 vs. $47.37 a year ago.
    • Americas: Operating earnings of $1.3B up 3% Y/Y. Premiums, fees & other revenues of $8.9B up 4%. Latin America: Operating earnings of $183M up 28%, with the ProVida purchase helping. Asia: Operating earnings of $328M fell 2%, but gained 8% on a constant currency basis. EMEA: Operating earnings of $88M up 1%, up 2% on a constant currency basis.
    • Net investment income of $5.1B is unchanged.
    • CC tomorrow at 8 ET
    • Source: Press Release
    • Previously: MetLife, Inc. misses by $0.03, misses on revenue
    • MET -3.3% AH


  165. Yelp -2.7%; Q2 outlook only in-line, full-year outlook hiked

    Yesterday, 04:15 PM ET · YELP

    • YELP expects Q2 revenue of $85M-$86M, only in-line with an $85.4M consensus. But full-year revenue guidance has been hiked to $363M-$367M from a prior $353M-$358M (consensus is at $358.9M).
    • Q1 adjusted EBITDA was $8.5M, in-line with guidance of $8M-$9M. Adjusted EBITDA is expected to rise to $11.5M-$12.5M in Q2, and total $56M-$60M in 2014 (a $2M increase from prior guidance).
    • Q1 revenue growth was 66% Y/Y vs. 72% in Q4. Cumulative reviews +46% (to 57M) vs. +47%. Average monthly unique visitors +30% (to 132M), down from Q4′s +39%, with mobile uniques growing 52% to 61M. Active local business accounts +65% (to 74K) vs. +69%.
    • Costs/expenses rose 60% Y/Y to $81M, with sales/marketing spend rising 60% to $45.1M.
    • Q1 results, PR


  166. Boyd Gaming Corporation misses by $0.05, misses on revenue

    Yesterday, 04:11 PM ET · BYD

    • Boyd Gaming Corporation (BYD): Q1 EPS of -$0.04 misses by $0.05.
    • Revenue of $708.3M (-3.9% Y/Y) misses by $4.98M.
    • Shares -1.5%.
    • Press Release


  167. FuelCell Energy to build 5.6 MW for Connecticut utility

    Yesterday, 03:11 PM ET · FCEL

    • FuelCell Energy (FCEL +4.2%) is higher today after winning a contract to build and operate two 2.8 MW power plants in Connecticut for UIL Holdings’ (UIL) United Illuminating.
    • FCEL says one plant, on an unused landfill in Bridgeport, also will include ~5 MW of a solar photovoltaic system, and a second site will be determined in 30 days.
    • The plants will be completed next year; financial terms were not disclosed.


  168. Fake upward today…i´m in the wrong side (short).


  169. Oil close to $99 and still dropping.