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Wednesday Worries – Putin Puts Pressure on Ukraine

 photo putin_zps43535164.gifNow what?  

Well, same old, same old really.  As the US and Europe ratchet up the sanctions, Putin has ordered "retaliatory measures" of an unspecified nature and has massed more troops along the Ukraine boarder:

"Political tools of economic pressure are unacceptable, they contradict all norms and rules," he said. "In that connection, the government of Russia has already proposed a series of retaliatory measures against the so-called sanctions of certain countries. I think that in current conditions, with the goal of protecting the interests of domestic producers, we could certainly think about that." he added.

SPY 5 MINUTEIn recent days, Russian regulators have banned shipments of some European fruits and vegetables and raised questions about the safety of products from MCD in Russia, threatening to ban their sale. Officials deny any political motivation for those moves.  wink  

Russia's Vedomosti newspaper reported Tuesday that the government was considering a partial or total ban on overflights of Siberia by European airlines, which use the route to shorten trips from Europe to Asia.  

European markets are already suffering with Italy dropping 2.9% this morning on news that it has officially slipped back into a Recession with GDP falling 0.2% in Q2 – a far cry from the +0.2% predicted by leading economorons.  The IMF has cut their optimistic growth estimate for Italy to 0.3% in 2014 and dropped Spain to 1.3%.  Spanish markets are down 2% today as well.  

We decided this was a good time to buy this morning and, at 6:58 this morning, I put up this chart for Members in our Live Chat Room, saying:

Check this out – all hitting the S1 lines so far:

It's certainly worth playing for a small bounce at 16,275 (/YM), 1,905 (/ES), 3,850 (/NQ) and, of course, 1,110 on /TF.  Just looking for very quick bounces, the trend is still DOWN!

The Dollar jammed up to 81.77 and that's not sustainable (short-term) so hopefully we get a little bounce – plus we are oversold again

SPX WEEKLYWe reviewed our Portfolios in yesterday's Webinar (replay available here) and we're pretty much neutral at the moment but getting a bit more bullish at this point (bottom of the S&P channel) as we've added several bullish bets and taken a few bearish winners off the table.  The easy money to the bear side has been made and that 1,110 line was our primary goal for a Russell pullback.  I don't see what Putin is doing now as "news" – it's just the grinding escalation we expected in this crisis.  

We even pulled our bearish oil bets (SCO) and we're taking long pokes on oil at the $97.50 line (/CL).  A lot of people were panicking into the Dollar overnight and it pushed that index (/DX) up to 81.77 and that is what put a lot of pressure on the indexes and commodities, more so than finding out Italy and Spain are weak (duh!) and Putin is trying to take over the Ukraine (duh!).  

INDU DAILYThat doesn't mean these things can't snowball – we're only looking for quick profits off the bounces and then we will measure the bounces (see yesterday's post) to see if they are strong enough to warrant a more bullish stance.  If 1,110 breaks on the Russell and 1,900 fails on the S&P – all bullish bets are off but, over that line, we have an aggressively bullish TNA bet lined up - so we're not going to miss anything.

As you can see from Dave Fry's Dow chart, we're getting close to that 200 dma and, in fact, we tested it pre-market (that green line at about 6:30) and that needs to hold or we're not bearish enough!  

Yesterday morning, I warned you not to get suckered in by the weak bounces and now that we're down another 1%, we need to adjust those weak bounce lines a bit lower but that means it SHOULD be easier for the indexes to show us a bit of strength.  If not – look out below!!!

 


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  1. Oil Lines

    R3 – 100.19
    R2 – 99.43
    R1 – 98.52
    PP – 97.76
    S1 – 96.85
    S2 – 96.09
    S3 – 95.18


  2. Putin / Phil – I guess trying to stir trouble by threatening Ukraine in hope of driving oil prices higher can have unintended consequences as the dollar goes higher as well, driving down the price of commodities…


  3. Sanctions against Russia impacting Europe numbers this morning:

    Although we can't see it now, I imagine that it's hurting in Russia as well!


  4. Good morning! 

    As noted yesterday, our most important metric is the net of the LTP + STP day to day to keep us alert to whether we're balanced or not.  At yesterday's open, our two primary portfolios were at $719K and this morning $721K (up 20% as a pair) but we pulled SCO, so now we need to see how that affects our balance.  

    Getting to balanced is very important and, once we get there (we've been there for a while) it's then about tilting bullish or bearish to follow the market.  Keeping aware of our balance point helps us to quickly get back to neutral when we become unsure (as we were yesterday) about the direction.  We're hitting a lot of THEORETICAL supports, so we expect a bounce here and we keep the emotion out of that by looking for strong bounces before making too many new, bullish commitments.  

    Every time we make new lows, our bounce levels change, so today we have:

    • Dow 17,100 to 16,400 is 700 points so 140-point weak bounce to 16,540 and a strong bounce would be 16,680
    • S&P 1,990 to 1,920 is 70 points so 15-point bounces (rounding) to 1,925 (weak) and 1,940(strong)
    • Nasdaq 4,475 to 4,325 is 150 points so 30-point bounces to 4,355 (weak) and 4,385 (strong)
    • NYSE 11,050 to 10,650 is 400 points so 80-point bounces to 10,730 (weak) and 10,810 (strong)
    • Russell 1,200 to 1,110 is 90 points so 20-point bounces (rounding) to 1,130 (weak) and 1,150(strong)

    Though the bounce lines on the S&P, NYSE and RUT didn't change, the weak bounce line has turned red since yesterday on S&P and NYSE while RUT is the same (all red).  The Dow, Nasdaq have been adjusted lower AND the weak bounce lines are red (Nas was green yesterday) so, on the whole, we've lowered our expectations but still lose 3 green boxes – that means momentum is solidly to the downside and we need to be very skeptical of any bounce that doesn't get us over all 5 weak bounce lines.  

    If you need a bearish play, the Nasdaq is still our fresh horse (still up 7% over the past 3 months) and we'll look at an SQQQ trade first thing in Member Chat.  

    Oil made it to $97.75 (up $250 per contract) before pulling back and now looks like it will test $97.50 again.  Below that line and we'll be missing our SCO longs but I'd rather wait until inventories this morning before dipping my toes in again on that trade.  API showed a bid draw yesterday and, if confirmed this morning (10:30), I would think we see a run to $98.50 so I am for taking bullish pokes at $97.50 (/CL) but very tight stops below.  

    SAN FRANCISCO (MarketWatch) — Crude-oil inventories declined 5.5 million barrels, while gasoline supplies declined 3.6 million barrels and distillates stockpiles were down 500,000 barrels, according to reports of data from the American Petroleum Institute late Tuesday. The API supply report comes a day ahead of official data from the Energy Information Administration. Analysts polled by Platts expect crude oil stocks to decline 1.9 million barrels. Gasoline supplies are seen down 700,000 barrels, and distillate supplies are expected to add 1.1 million barrels.


  5. A different take on QE:

    http://www.ritholtz.com/blog/2014/08/how-quantitative-easing-works-the-mainstream-still-doesnt-get-it/

    The main way QE has boosted the American economy has been by the Fed creating credit out of thin air, enabling some entities to increase their current spending without requiring any other entities to cut back on their current spending. Contrary to what the editors of The Economist and many mainstream economic analysts assert (but don’t verify), QE has not boosted the American economy by lowering corporate bond yields.


  6. Analysis of the economy under different presidents – a long PDF with some interesting charts:

    http://www.ritholtz.com/blog/2014/08/presidents-and-the-u-s-economy-an-econometric-exploration/

    GDP Growth



  7. Oil/StJ – I wonder also, if it's possible that Obama, EU and Japan are purposely keeping oil prices low to punish Putin?  It's a possibility – manipulation is a two-way street.  

    Speaking of which, oil hit $97.75 and that's up $250 and very greedy if you don't take it (/CL). 


  8. QE/StJ – But how is that a good thing?  The real problem is that the credit that is made available is unevenly distributed (to the top 0.01%) and they are then able to out-spend people who are struggling to recover and still lacking in easy credit.  That's what leads to M&A and further job cuts, etc.   That's how Blackstone can encourage banks to foreclose, rather than restructure underwater loans – because Blackstone has $10Bn at 1.5% to buy distressed housing with.  That's what drives the price of rentals up as BX and other vultures snap up apartments (from small business owners) and drive up the price of rents while driving more and more people out of homes, causing them to increase demand on the rental market.  It drives up the price of commodities people don't want and can't afford and all that free money is created without adding anything to the tax base (since it's technically borrowed and not quite free) which then puts even more pressure on the bottom 99% to make up for the shortfalls.  

    Now that oil is poking over $97.75 (/CL), we can take another bullish entry here with tight stops below. 


  9. Presidents/StJ – And look at that "terrible" Carter administration.  The Reps just can't let go of that talking point, even though it's bogus.  


  10. Phil,

    Why is Gold up so much today? Thanks 


  11. Go gold!  Popping back to $1,307.50. 

    Oil quickly at $97.83, indexes still stuck in the mud at 16,310, 1,905.50, 3,845 and 1,111.3.  As we expected, Nas is weakest but good signal not to play bullish into the bell.  


  12. Gold/Jasu – Any political tensions can pump gold up easily as you have your normal daily moves PLUS whoever in that region is shifting to gold but any decent-sized panic in a wealthy(ish) region can boost gold a couple of percent – especially when it's this oversold.  

    VIX 17.10 – someone is worried about something.  

    LOL – Cramer must be getting more Twitter heat as he just said on CNBC "if you don't like me, you don't have to follow me."  


  13. Cramer pushing Walgreens !


  14. This week in Cramer news:

    Cramer went to walmart in Louisiana when he needed cargo pants and got a great pair.  When he's here, he shops at Target all the time and can't stop eating McDonald's fries.


  15. CZR – strong bounce on CZR?


  16. Meanwhile, good strength off our bounce lines so far but still red for the day.

    Oil can't get over $97.85, which is terrible off that API report.  Now the EIA report (10:30) better have a pretty big draw because expectations have to be high after API.  

    Dollar 81.70, gold $1,308.50, Euro $1.335, Pound $1.685, 102.38 Yen to the Dollar with /NKD at 15,110 with a low of 15,025.  

    Still mostly watching and waiting.  


  17. Sanctions – it'd be highly ironic if the sanctions against Putin resulted in the new silk road plan of South Korea's President Park going through. Rail & gas lines from Russia to Busan……


  18. TZA should be all out in the STP (see Friday's notes).  I missed that one yesterday.  In fact, I'm thinking of adding TNA to the STP if we make our weak bounces.   


  19. VXN is up 3.53% while VIX is down 1.90%


  20. Phil – You mentioned a new SQQQ Hedge for anyone needing it


  21. Maybe we should invest in solar creams:

    http://gizmodo.com/when-a-climate-scientist-publicly-states-were-f-ked-1616825189

    Scientists at the Stockholm University recently discovered that vast methane plumes were escaping the Arctic Ocean seafloor. And that's got noted climatologist Dr. Jason Box very worried.

    "If even a small fraction of Arctic sea floor carbon is released to the atmosphere, we're f'd," hetweeted"Methane is more than 20 times more potent than CO2 [carbon dioxide] in trapping infrared as part of the natural greenhouse effect," he later told Vice. "Methane getting to the surface—that's potent stuff."

    "We're on a trajectory to an unmanageable heating scenario, and we need to get off it. We're f**ked at a certain point, right? It just becomes unmanageable. The climate dragon is being poked, and eventually the dragon becomes pissed off enough to trash the place."

    While Box concedes that dramatic effects may not be felt in our lifetime, unless a concerted international effort is made to contain the growing issue, sales of bottles of Ambre Solaire will be going through the roof by the time our grandkids are adults. 


  22. GRPN/phil – short candidate? failing revenues and has already been on the stock buyback kick..


  23. TSLA has had a nice run the last few days.  Premiums are back on that one.


  24. FU TSLA!!!!!


  25. Incredible chart:

    Where did everyone go?  

    View image on Twitter

    Good note on TWX/NWS:

    The insider says two things caused Murdoch to pull his bid:

    1) the "entrenchment" of Time Warner's board and management, who refused to even discuss the offer, and 

    2) the significant drop in Fox's stock after news of the offer leaked.

    The overture for Time Warner was about creating value for Fox shareholders, the insider said, not destroying it. And given the reaction of the Fox stock price to the news, Fox has decided that it can create more value for shareholders by buying back its own stock and executing its own plan than by chasing after Time Warner.

    I don't know why no one seems to mention the fact that regulators are not too likely to let this go through.  If nothing else, it will be a long, expensive, distracting fight.

    SQQQ/Brit – Well, we already have the Dec $43/50 bull call spread in the STP at net $1.55 and we sold short puts against it on stocks we want to own to mitigate the cost.  Since that spread is still  $4.50/2.95, there's no reason not to stick with it with SQQQ at $41.80.  The $40s are $5.70 so $1.20 to gain $3 is not too bad but why spend it if we don't have to?  If SQQQ goes lower, then I'll likely want to roll the $43s lower. 

    As offsets – looking at our Buy List, I see:

    • ABX 2016 $17 puts can be sold for $2
    • CCJ 2016 $17 puts can be sold for $1.85
    • HOV 2016 $3.50 calls can be sold for .50
    • IBM 2016 $150 puts can be sold for $6.25
    • IRBT 2016 $26 puts can be sold for $2
    • KBH 2016 $15 puts can be sold for $2
    • PFE 2016 $28 puts can be sold for $3.05
    • RIG 2016 $33 puts can be sold for $3.90
    • TASR 2016 $10 puts can be sold for $1.50
    • WFM 2016 $33 puts can be sold for $2.60

    So there's 10 nice stocks we can bottom fish on, especially if we're using them to offset hedges that pay us another $7 back if the market does fall.  


  26. Phil   IRBT puts are march 2015   FYI :)


  27. Phil,

    Your thoughts on a long position in SFTBY (no options) now that it has pulled back – probably with the demise of the Tmus deal. Heading towards its low @33+. Reasonable proxy for Alibaba due in Sept. Tough to find solid fundy data on them.

    Thanks in advance.


  28. CZR/Pfehl – We knew it was oversold, that's why we sold those puts in the LTP yesterday.  Still, it was getting too annoying in the Butterfly Portfolio, so we dumped it there.  

    Caesars, Second-lien Debtholders Sue Each Other

    Caesars Entertainment (CZR) Marked As A Dead Cat Bounce Stock

    Atlantic City’s failing casinos: Key implications for investors

    This one is going to be wildly rumor-driven for the rest of the year.  

    LOL Rustle.  Don't forget he flew down there on Spirit and only took a backpack so he wouldn't have to pay the baggage fee…

    Solar/StJ – Did he say it's my kids problem?  Oh good, then let's ignore it…

    GRPN/Scott – I think this comment summed it up last year:

    Submitted on 2013/07/19 at 9:57 am

    I like the way they are calling "Retail-Me-Not" the next GRPN.  The first GRPN doesn't even make money yet!  

    So a bit late to the party now that it's $5.80, down from $12 at the time.  It is, however a really good example of why you should not trust any of these trumped-up market values – because they are based on unobtainable profit goals and rely heavily on unproven companies to deliver multiples on past earnings that are simply not going to happen in this slow-moving economy.  

    TSLA/Rustle – Don't tempt me!  

    IRBT/Wilsons – Thanks, I meant the March $26 short puts at $2, which actually makes me like them more (same premium, shorter time-frame).  

    SFTBY/8800 – I don't play them because they are hard to follow (and no options) and what happens if Japan stops stimulating or their 250% debt to GDP becomes a problem (that would be like the US having $40Tn in debt).  As you see, hard to fund data so why on Earth pick that over 9,000 other stocks we can play?

    Oil inventories did indeed have a big draw, zooming over $98 and, of course, playable over that line (/CL):

    • Crude -1.8M barrels vs. -1.7M expected, -3.7M last week.
    • Gasoline -4.4M barrels vs. +0.3M expected, +0.4M last week.
    • Distillates -1.8M barrels vs. +0.9M expected, +0.8M last week.
    • Futures +0.4% to $97.76

  29. Caesars Entertainment volatile as legal battles rage on

    10:42 AM ET · CZR

    • Shares of Caesars Entertainment (CZR +10.8%) move higher to make off for losses piled up yesterday amid more lawsuit activity.
    • Bondholders are battling the company over asset moves between subsidiaries.
    • Evaluating the stock has become an exercise in handicapping complex legal battles. Even Fitch Ratings call the Caesars legal quagmire as possibly the most complex in all of leveraged finance.


  30. Walker & Dunlop results hit by commercial mortgage slowdown

    10:39 AM ET · WD

    • Adjusted net income of $12.9M or $0.40 per share vs. $15.3M and $0.44 one year ago. Adjusted EBITDA of $20.9M vs. $14M.
    • Loan originations of $2.4B in Q2 off 7% Y/Y, but CEL Willy Walker notes the commercial loan refinancing market is down 23% and the GSEs’ origination volume YTD is down 48%. Loan originations with Frannie up 12% and comprise 65% of all action in Q2.
    • Total revenue of $85.3M of 6% Y/Y, with a 17% decline in mortgage banking gains, partially offset by a big boost in net interest income from loans on the balance sheet. Servicing fees of $24M made up 28% of total revenue.
    • Gains from mortgage banking of $52.2 down from $63.1M a year ago. Loan origination fees of $29.5M down 15%. Gains from MSRs or $22.8M down 20%.
    • WD -2.1%
    • Previously: Walker & Dunlop misses by $0.03, misses on revenue


  31. Continental’s Q2 earnings plunge despite higher revenue, oil production

    10:27 AM ET · CLR

    • Continental Resources (CLR -1.5%) opens lower after Q2 earnings fell nearly 68% Y/Y and failed to meet expectations, as higher operating costs masked higher revenues and oil production.
    • Q2 net production totaled 15.3M boe, or nearly 168K boe/day, up 10% Q/Q and up 24% Y/Y; 69% of production was oil vs. 31% natural gas.
    • CLR’s average realized sale price in Q2, excluding the effects of derivative positions, came to $92.31/bbl of oil, or $10.69 below the Nymex daily average for the quarter and above the $87.22 earned in the year-ago period.
    • Says it expects oil inventories will increase in H2, which could result in reduced sales volumes in Q3 and Q4 by an aggregate total of ~500K net barrels, but the impact may be partially offset by sales of previously stored production throughout the company’s facilities in the Bakken.


  32. Hovnanian expands into Charleston, South Carolina

    10:24 AM ET · HOV

    • Hovnanian (HOV +0.8%) says it is now entering the Charleston, South Carolina market and plans on building a K. Hovnanian’s ® Four Seasons at the Lakes of Cane Bay.
    • The new community will be a private gated community featuring over 800 energy efficient homes.
    • Many K. Hovnanian’s® Four Seasons active adult communities are scattered nationwide, but this will be the company’s first active adult community in South Carolina.


  33. Pandora gets a lift from vague M&A rumors

    10:22 AM ET · P

    • Vague M&A speculation has led Pandora (P +3.2%) to move higher in early trading. Zero Hedge states (with trademark skepticism) Yahoo is the rumored would-be suitor.
    • With a current market cap of $5.3B – an acquisition would doubtlessly require a higher price – Pandora would be a big fish for all but a handful of tech giants to swallow. 11% of the float was shorted as of July 15.
    • Separately, Pandora has announced a partnership with Merlin, a rights agency representing 20K+ indie record labels and distributors. Pandora will “identify select tracks” from Merlin-backed labels and artists for additional exposure, and provide the labels/artists with data on user activity.


  34. Eagle Bulk files prepackaged bankruptcy plan, aims to continue operations

    10:10 AM ET · EGLE

    • Eagle Bulk Shipping (EGLE +16.5%) says it has filed plans to restructure its debt through a prepackaged Chapter 11 bankruptcy filing.
    • EGLE says it expects to reduce its debt by ~$975M, and it has support of creditors holding more than 85% of the loans outstanding under its credit agreement, exceeding the two-thirds threshold needed to gain bankruptcy court confirmation of the plan.
    • EGLE also has obtained a commitment for up to $50M of debtor-in-possession financing, and says it plans to continue its day-to-day operations.


  35. 3D Systems buys 3D printing service bureau

    09:57 AM ET · DDD

    • 3D Systems (DDD +3.3%) has acquired Laser Reproductions, an Ohio-based 3D printing service bureau that caters to industrial design firms and OEMs (among others).
    • Terms are undisclosed. The deal is expected to be accretive within the first 12 months.
    • 3D will add Laser Reproductions’ offerings, which include prototyping, manufacturing, and stereolithography, to its Quickparts service bureau arm (a higher-margin business). The company’s total services revenue rose 38% Y/Y in Q2, soundly outpacing product revenue growth of 20%.
    • Acquisition-loving 3D bought Brazilian service bureau Robtec in April. More recently, it bought surgical simulator maker Simbionix for $120M.


  36. Bank of America Corp declares $0.05 dividend

    09:49 AM ET · BAC

    • Bank of America Corporation (NYSE:BAC) declares $0.05/share quarterly dividend, 400.0% increase from prior dividend of $0.01.
    • Forward yield 1.30%
    • Payable Sept. 26; for shareholders of record Sept. 5; ex-div Sept. 3.


  37. Media stocks on watch after Fox-Time Warner deal crumbles

    09:26 AM ET · LGF

    • Select media stocks could be pressured after 21st Century Fox pulls its offer for Time Warner.
    • The sector was bid up on a consolidation buzz over tech giants swooping in to snap up content companies due to fears over the FOXA-TWX combination.
    • On watch: Lions Gate (NYSE:LGF), CBS (NYSE:CBS), AMC Networks (NASDAQ:AMCX).
    • Related ETF: PBS


  38. Overreaction to Walgreen staying in Chicago?

    09:19 AM ET · WAG

    • Retail analyst Rahul Sharma thinks the market is overreacting to Walgreen (NYSE:WAG) pulling the tax inversion move out of its playbook.
    • If there’s a concern with the integration of Alliance Boots, Sharma thinks the slower revenue growth of the the European firm should be watched.
    • The sudden dip in Walgreen has put shares back in line or below valuation on peers.
    • WAG -15.8% premarket
    • WAG tax inversion timeline


  39. Stunning margin meltdown at Nu Skin

    09:10 AM ET · NUS

    • Shares of Nu Skin (NYSE:NUS) are getting shellacked after the company misses Q2 earnings estimates by a wide margin.
    • Foreign currency swings clipped two full percentage points from sales, while a write-down of inventory in China was an earnings drag.
    • Operating margin fell a stunning 870 bps to 8.4% during the quarter on higher expenses (as a percentage of sales) and the headaches in China.
    • NUS -9.5% premarket


  40. Devon Energy posts strong revenue growth as oil production rises

    08:58 AM ET · DVN

    • Devon Energy (NYSE:DVN) +1.2% premarket after Q2 earnings matched estimates and revenues rose 46% Y/Y, easily beating expectations, helped by production growth in high-margin oil, as well as higher prices.
    • Q2 production of oil, natural gas and natural gas liquids, excluding production associated with divestiture properties, rose 14% Y/Y to 620K boe/day, driven by growth in oil production, which jumped 34% to 205K bbl/day; oil production from U.S. operations surged 79% Y/Y.
    • Q2 revenue from oil, natural gas and natural gas liquids sales totaled $2.7B, up 21%, attributable to the increase in high-margin oil production combined with improved oil price realizations; these factors resulted in Q2 oil sales increasing to more than 60% of DVN’s total upstream revenues.
    • Overall average realized prices including hedging impacts climbed 20%, including growth of 6% for oil.


  41. Tax breaks in Japan could boost hydrogen car launch

    08:58 AM ET · TM

    • Toyota’s (NYSE:TM) ambitious plan to introduce hydrogen-powered vehicles will get a boost when a tax incentive in Japan kicks in next year.
    • Buyers of fuel cell cars could be eligible for subsidies in the neighborhood of ¥2M ($2K) per vehicle.
    • The backing of the ruling Liberal Democratic Party of the technology should also help Honda (NYSE:HMC).
    • The automaker plans to bring a FCV to the U.S. next year, with an initial introduction in California most likely.


  42. Disney earnings call: Growth drivers include Netflix and the SEC Network

    08:49 AM ET · DIS

    • Execs with Disney (NYSE:DIS) used the music from Frozen to set the stage for their comments on the company’s FQ3 performance.
    • Theme park attendance growth has been in the single-digits, but guest spending has been boosted by the MyMagic+ program. CFO Jay Rasulo says the program has more revenue impact to come.
    • CEO Bob Iger seemed unconcerned about any revenue slowdown at ESPN. He noted advertisers are buying spots closer to the run dates and ESPN had an “extremely good” upfront.
    • The company says it’s very bullish on the SEC Network. There is an expectation that 60M U.S. subscribers will watch the SEC programming beginning this month.
    • A question about Disney’s relationship with Netflix (NASDAQ:NFLX) drew an enthusiastic response from Iger. No concrete numbers were thrown out, but it appears Disney will continue to benefit as Netflix grows globally. The Disney brands can be “well monetized” on the Netflix platform, notes Iger.
    • Earnings call transcript
    • DIS -0.5% premarket


  43. U.S. Job Creation Index Advances to Six-Year High in July

    08:31 AM ET


  44. Tobacco stocks draw interest

    10:00 AM ET · PM

    • Tobacco stocks are higher today in what analysts are calling a defensive move by investors.
    • There’s also been some stronger pricing trends on the lower-end of the cigarette market that has helped to boost the outlook on the group.
    • Gainers: Philip Morris (PM +2.2%), Reynolds American (RAI +1.6%), Vector Group (VGR +1.4%), and Altrai (MO +1.9%).


  45. More on Starwood Property results

    08:28 AM ET · STWD

    • Q2 core earnings of $115.2M or $0.51 per share vs. $69M and $0.42 one year ago. Excluding the LNR purchase and the SWAY spinoff, core EPS gained 48% Y/Y. Dividend is $0.48.
    • Real Estate Investment Lending Segment core earnings of $76.2M up from $38.2M a year ago. Originations of $600M during Q, with another $1.1B of loans closed since June 30. Nearly all are Libor-based floating rate and company estimates a 100 basis point boost in Libor would increase income by $14M. Carrying value of investment portfolio of $5.8B and it’s expected to generate a leveraged return of 10.2-10.8%. Average LTV of 65.2%.
    • LNR Segment core earnings of $39M. Principal assets are CMBS, special servicing intangibles, and conduit loans. Total carrying value of investments is $1.081B.
    • Full-year core EPS guidance of $2-$2.20 per share is affirmed.
    • Conference call at 9 ET
    • Previously: Starwood Property Trust misses by $0.01
    • STWD flat premarket


  46. Chesapeake earnings slide along with nat gas liquids prices

    08:26 AM ET · CHK

    • Chesapeake Energy (NYSE:CHK) -3.3% premarket after missing Q2 earnings estimates, hurt by a loss on the repurchase of debt securities related to a refinancing and lower prices for natural gas liquids.
    • However, CHK raises its midpoint of 2014 production outlook by 10K boe, or 1.5%, to 685K-705K boe/day, attributable to better production trends in H1 and an expected increase in well connections during H2.
    • Q2 oil and natural gas production, adjusted for asset sales, totaled 694,650 boe/day, up 13% Y/Y, consisting of ~113K bbl/day of oil, 84.3K bbl/day of NGL and 3B cf/day of natural gas.
    • Q2 production of natural gas liquids rose 72% but the average price CHK received in the quarter fell 13% to $21.03/bbl.


  47. More on Mondelez International’s Q2

    08:25 AM ET · MDLZ

    • Mondelez International (NASDAQ:MDLZ) reports organic sales rose 1.2% in Q2.
    • Volume/mix fell 2.4% during the period, but prices were 3.6% higher.
    • The company saw the strongest regional growth from Latin America.
    • Adjusted gross profit margin -90 bps to 36.9%.
    • The outlook for full-year organic sales growth is cut to a range of 2% to 2.5% – from a prior view for 3% growth.
    • MDLZ -2.1% premarket


  48. McDonald’s looks to turn over customers quicker

    08:14 AM ET · MCD

    • McDonald’s (NYSE:MCD) is testing a new promotion in South Florida in which drive-in customers are guaranteed that their orders will be ready in 60 seconds.
    • If the participating stores miss on the one-minute deadline, customers will receive a free lunch item on their next visit.
    • What to watch: The lightning-fast speed of Chipotle’s order processing has caught the eyes of the QSR industry as it continues to churn out double-digit comps. Look for McDonald’s to make order processing speed a larger priority in 2H.


  49. Sprint names Brightstar’s Claure CEO; shares -17.2%

    09:22 AM ET · S

    • Sprint (NYSE:S) has confirmed reports CEO Dan Hesse is leaving, and will be replaced by Marcelo Claure, founder/CEO of of mobile hardware distributor Brighstar.
    • Claure, 43, is already a member of Sprint’s board. He’ll be resigning from Brighstar, and SoftBank (OTCPK:SFTBF) will acquire his remaining interest in the company. Bloomberg states Hesse may receive a $40M+ severance package.
    • Shares are off sharply premarket due to widespread reports Sprint is ending its bid (for now) to acquire T-Mobile on account of regulatory opposition, as investors fear the carrier will continue bleeding share to T-Mobile, Verizon, and AT&T as an independent entity.
    • More on Sprint/T-Mobile


  50. IATA: Passenger traffic up 4.7% in June

    07:55 AM ET · AAL


  51. First Solar raised to Buy at Needham, citing possible yieldco, bookings strength

    07:44 AM ET · FSLR

    • First Solar (NASDAQ:FSLR) -3% premarket, recovering roughly half of losses following its Q2 earnings miss; Needham’s upgrade of shares to Buy from Hold may be helping.
    • In explaining the upgrade, with a $75 price target, the firm cites factors including a high likelihood of a FSLR yieldco, thus creating meaningful value; positive metrics supporting greater growth trajectory ahead; near-term opportunities created by the U.S. tariffs on Chinese modules; and strong efficiency gains.
    • Although Q2 results were weak due to “lumpy” timing of project revenue, Needham says it is not concerned and instead focused on FSLR’s strong YTD bookings, increased expected revenue and long-term pipeline expansion, suggesting strengthening of FSLR’s business.
    • Also, Brean Capital maintains its Buy rating and $83 price target, saying FSLR’s Q2 results were unexpected but the shortfall is not material to the stock’s valuation; the firm notes FSLR’s cadmium telluride technology efficiency has surpassed crystalline, which it considers a significant positive going forward (Briefing.com).


  52. Strong HBO results boost Time Warner in Q2

    07:13 AM ET · TWX

    • A strong quarter from HBO helped Time Warner (NYSE:TWX) improve profitability during Q2.
    • HBO subscription revenue rose 10% to $101M and content revenue soared 56% to $98M. Licensing of HBO content to Amazon Prime was a sales driver.
    • Turner saw higher domestic ad rates boost contribute to results during the quarter.
    • Segment revenue: HBO +16.5% to $1.42B; Warner Bros. -2.4% to $2.87B; Turner +4.7% to $2.75B.
    • The company authorizes an additional $1.5B in share buybacks.
    • TWX -11.1% premarket as yesterday’s withdrawal by 21st Century Fox of its buyout offer sets the tone.


  53. MBA Mortgage Applications

    07:01 AM ET

    • MBA Mortgage Applications:
    • Composite Index: +1.6% vs. -2.2% last week.
    • Purchase Index: -1% vs. +0.2% last week.
    • Refinance Index: +4% vs. -4% last week.
    • Fixed 30-year mortgage rates rises to 4.35%.


  54. Feds reject “living wills” of 11 major lenders

    08:48 AM ET · BAC

    • The Federal Reserve and the FDIC say the bankruptcy plans submitted by 11 of the largest banks make “unrealistic or inadequately supported” assumptions and “fail to make, or even to identify, the kinds of changes in firm structure and practices that would be necessary to enhance the prospects for” an orderly failure. Ouch!
    • Full feedback
    • The 11 dinged: BAC, BK, C, GS, JPM, MS, STT, and the U.S. units of BCS, CS, DB, and UBS.
    • To review: Dodd-Frank requires banks annually submit a “living will” detailing their operations and exposures and how they could be dismantled without the need of a bailout in the event they near failure. Pleasing the regulators is a must as they have the power to force tougher capital rules or restrictions on growth, or even mandate a breakup of the lenders. As for the current failures, the banks have about a year to address D.C.’s concerns.
    • “Despite the thousands of pages of material these firms submitted, the plans provide no credible or clear path through bankruptcy that doesn’t require unrealistic assumptions and direct or indirect public support,” says the FDIC’s #2 official, Thomas Hoenig.
    • ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, SEF, IYG, FXO, FNCL, FINU, RWW, RYF, FINZ


  55. Hi Phil, What do you think of CTSH? Best of breed software outsourcer but with many employees in the US. Perhaps the 2016 $40 Put for $4.5 ?

    Down big on contract delays but still growing well.


  56. Not much move on oil ($98.05) but /TF at 1,125 for a nice gain.

    /ES 1,921, /YM 16,423 and /NQ 3,882.

    CTSH/Jcrist – They just lowered guidance and raised forward p/e from 15 to 20 – not surprising they drop 20% off that news.  I wouldn't catch the knife but, if you really believe in them, I'd say $35 is a pretty reasonable floor but that's your net so I'd give the downgrade police a crack at them tomorrow and see what sticks first.  

    So much for oil (/CL) – unable to hold $98, even after that draw in inventory.  They've got big problems. 


  57. Phil

    Good time for trade on First Solar FSLR

    Thanks


  58. Phil || EGLE

    With the news regarding the Chapter 11 bankruptcy filing what action would you take if you sold the 2016 2.5 Puts at 1.20?


  59. Phil

    What do you think Nu Skin Enterprises Inc. NUS

    Any trade with the price drop

     Thanks 


  60. In trying to unwind my Oct SCO spread ($25/28 BCS), I was able to close the short calls at a decent price but wasn't able to close out the long calls at $3.60.  Hold them considering the oil action is currently weak or close them out?

    Thanks


  61. Putin banning agricultural products from being imported into the country is going to hurt his country much more as prices will now rise on products available due to the scarcity of them and they will be missing out on some product altogether.  Like a little kid he should be told of the expression cut off your nose to spite your face.


  62. Phil/OCN – Any insight into this stock?  They seem to be getting really cheap.  Doug Kass recommended it in a Barron's article a few months ago, and it has been pretty much straight down ever since. 

    This SA article has a good summary on the stock.

    http://seekingalpha.com/article/2304785-ocwen-financial-wells-fargo-deal-resolution-will-mean-significant-upside


  63. rustle123  - Putin is also trying to balance “counter sanctions” with preservation of capital (Russia Balance of Trade). It is indeed perilous …


  64. RBI’s Rajan Sees Risk of Financial Markets Crash

    Reserve Bank of India Governor Raghuram Rajan warned Wednesday that the global economy bears an increasing resemblance to its condition in the 1930s, with advanced economies trying to pull out of the Great Recession at each other’s expense.

    The difference: competitive monetary policy easing has now taken the place of competitive currency devaluations as the favored tool for playing a zero-sum game that is bound to end in disaster. Now, as then, “demand shifting” has taken the place of “demand creation,” the Indian policymaker said.

    As was the case in the 1930s, the lack of coordination between policymakers is producing spillovers that may be difficult to control, and the world’s financial system may soon face fresh turbulence at a time when central banks have yet to repair the damage that the 2008 financial crisis caused to developed economies.

    “We are taking a greater chance of having another crash at a time when the world is less capable of bearing the cost,” said Mr. Rajan in an interview with the Central Banking Journal.


  65. Palotay OCN – They are being investigated by New York regulators and a new investigation just starting around affiliate insurance company. I think they may go lower here and are risky. I have a position and am watching closely. 


  66. CNP – 30K+ Sep14 C24 traded vs. “8” open interest. 


  67. I got out of the SCO spread today for 3.10.  I had a order in for 3.25 for a few days which didn't fill.  I didn't "work the spreads" as I normally do.  Limited time.

    Added a little to RRD for the Aug13 div.


  68. Phil, 

    where is all this strength coming from? How does /TF go up from 1110 to 1129 without a hiccup? Did something change, or is this just herding the sheeple in?


  69. HOG – got it's 12% drop..   "HOG/Scott – Last year they did $3.28 per share and traded at $57.50 average.  This year, they are on pace for over $4, which is 20% better so $69 is a fair estimate so BTFD makes sense on these guys but I wouldn't catch the knife.  See if they get a good downgrade and test $60 – don't forget -5% in a day is as low as we'd expect on one move ($63.50) but that doesn't mean the move is done.  Bounce from $70 I'd round to $1.50 at $65 (weak) and $66.50 (strong) so keep an eye on those but a 12% drop, to $61.50 is where it really becomes worth taking a chance (10% with a 20% overshoot).  From http://www.philstockworld.com/2014/07/22/10000-tuesday-one-trade-to-make-your-month/ "


  70. I am not paranoid….I am not paranoid….I am not..

    http://deathflation.wordpress.com/

    The Bank for International Settlements, otherwise known as the BIS, should more aptly be named the Bank for International division and domination.  It’s clearly an institution with global reach, whose hidden covert purpose is to impose the globalist’s agenda on all sovereign nation states.


  71. Here's another reason for tesla squeeze today

    http://finance.yahoo.com/news/tesla-gets-more-love-morgan-151553595.html


  72. Deano- I think that this statement by Rajan is playing on our greatest fears and is likely being put out there for the purpose of getting attention for something. All that I have read says that it would take an almost impossible convergence of events to trigger such a world wide depression because of the many modern safeguards in place. Of course, never say never, but it seems likely this guy has an ulterior motive to put out such a doomsday statement. 


  73. Analysis: Model X to boost Tesla Motors • 12:28 PM

    Pacific Crest analyst Brad Erickson thinks Tesla Motors (TSLA +4%) is "attractively valued" when looking at the EV's growth trajectory out to 2016.

    The investment firm is sticking to a shorter time-frame when making its Tesla analysis, which takes some execution risk off the table with the Gigafactory and Model III launch.

    Optimism over the Model X will continue to rise, forecasts Erickson.

    A price target of $316 on TSLA by Pac Crest factors in a valuation of 4X EV/2016 revenue.


  74. FSLR/QC – I never used to like them but they have somewhat grown into their value.  If they spin off units like SUNE, there could be a little more value to squeeze out but, at the moment, they had disappointing earnings and are testing their 200 dma at $61 and have, so far, weak bounced off the drop from $75 so I don't see a good reason to jump in here.  

    EGLE/John – Bankruptcy doesn't mean your shares are zero, it's a business restructuring and a pre-packaged deal like this should bring the shares back up but too dangerous to risk so best to just get out and see what the new shares look like:

    If approved by the court, the reorganization plan would cancel the company's current stock, which trades on the Nasdaq. Shareholders will receive 0.5 percent of the stock in a reorganized Eagle Bulk, plus warrants to acquire an additional 7.5 percent.

    Given this issue, if we can get out for $1.50 or less, I think that's a good idea in the LTP but, if not, then we end up 25 shares of the new stock plus warrants to buy 375 more for a net of $6,000 – I don't find that upsetting

    1,130 on /TF!  That is almost certainly to be a top

    NUS/QC – I've never liked these direct-marketing cos and, like HLF, they are under a lot of scrutiny by the SEC so I imagine this "miss" is simply trying to pretty up the books (for the regulators, not the investors).  I would never want to own something like this and you need to ask yourself if you would be willing to double down if they drop another 25%.  If you REALLY would, then not so bad to take a poke but, keep in mind, last time they fell 50% (early this year) from $139 to $67 – not only did they never recover but now they fell another 33% from there.  

    SCO/JPH – Even now, with oil back at $97.30?  Someone got $3.60 at 11, when oil was higher than this – I'd just keep the ask out there but the only ask I see now is $3.90, not $3.60 – don't know where yours is.  

    OCN/Palotay – I'd say the lesson here is – don't listen to Doug Kass!  I don't see how mortgage servicing can be doing well when there are less and less mortgages to service (we've been noting the decline in mortgage transactions all year) and this particular one is under investigation.  I'm sure the binary event of getting a big contract from WFC (biggest mortgage holder in the US) would be a big pop for them (if they are still interested post investigations and lawsuits), but then you have a stock that's very heavily dependent on a single client.  I think there's value here but you're citing an article telling you what a fantastic deal OCN was on July 9th, when it was at $37.  Now, at $26 it's a month and 30% later and this isn't some mistake made by uninformed sellers – not over 30 days.  I wouldn't be a hero, wait for someone else to see a bottom before you jump in and make a bottom call on a $3.5Bn company that was recently a $4.5Bn company.  

    Ocwen Financial Insurance Practices Put To Question By New York Department Of Financial Services

    EQUITY ALERT: The Rosen Law Firm Announces Investigation of Civil Securities Claims Against Ocwen Financial Corp. – OCN

    Ocwen's Mortgage Insurance Practice Under NY Review

    Shareholder Alert: Bronstein, Gewirtz & Grossman, LLC Announces Investigation of Ocwen Financial Corp.

    Strength/Jasu – Yesterday's volume was double today – it's the same pattern we've been observing for over a month.  They take the market up on low volume and then, when enough dip buyers move in (we did today) they begin selling off again.  

    HOG/Scott – Good job keeping track.  This is where they get interesting but I still need to see overall bounces from the indexes before I would want to add another line item to our portfolios.  Conceptually, I do like selling the 2016 $50 puts for $3.30 and buying the $60/70 bull call spread for $3.90 so that's net 0.60 on the $10 spread and worst case is owning them at $50.60, another 20% off the current price.  You might do better by waiting but maybe not.  

    BIS/CDT – Very powerful group our Fed (and everyone's Fed) is merely a member of this group but it's run by the same Central Banksters (current Chairman is the head of Spain's Central Bank) so not as bad as the organizations who you know nothing about.  Still bad – just not as bad….

    TSLA/Jabob – STILL playing with that thing?  I'll be back with you if they test $265 but, otherwise, I'm trying to quit.

    Oil testing $97 again (/CL) – that's worth another toss on the bull side (very tight stops below!). 


  75. Quote of the day:

    J. David Stein, “First, don’t listen to doomsayers who are convinced financial calamities are imminent. They don’t know.”


  76. Cheap money:

    http://www.bespokeinvest.com/thinkbig/2014/8/6/incredible-shrinking-yields.html

    With the exception of Russia, long-term sovereign yields across the G8 are at levels that were unthinkable a few years ago.  Even in Russia, where the current geo-political situation would make you think the country would have trouble borrowing money in the capital markets, 10-year sovereign debt is yielding just 5.29%.  Keep in mind that this is a country that defaulted on its debt 16 years ago and is also being threatened with increased sanctions over its aggression with the Ukraine.  Elsewhere in the G8, the US is in the middle of the pack at 2.44%, while Great Britain (2.51%) and Italy (2.80%) are both also under 3%.


  77. Another quote appropriate for trading:

    Seth Godin, “The best way to change long-term behavior is with short-term feedback.” 


  78. Phil / CIM

    The below trade never filled for me, and now that I look at it.  I don't see any Jan 3.50 calls.  Could you re-jigger it and post what you like?  In IB, I see that all the time value of the calls in Mar2015 is actually negative.  Meaning there isn't any "juice" in the calls…prob due to the div.  

    CIM, for example, is $3.20 and pays .40 per year and you can sell the Jan $3.50 calls for .10 and the $3.30 puts for .35 for net $2.75/3.025 so you can buy 3,000 for $8,250 and you'll get $300 per Q as a dividend plus another $1,350 if called away at $3.30 for a total of $900 (3 dividends left) + $1,350 = $2,250 or 27% back in 7 months

    Let's add that (3,000) to the LTP too so we can all take a vacation next year!


  79. I think IB might have a issue with the 3.50 calls.  On Nasdaq they are listed.


  80. Yields/StJ – Incredible, isn't it? 

    $97 did not hold on /CL!  

    CIM/Burr – I think they were Jan $3.30s (as that's what we filled in the LTP), but now $3.21 means you can try to sell the Jan $3.30s for .10 but that's going to be hard to fill now (as we're 2 months closer).  You have to catch them on an upswing to get a fill, which we had in late June as they topped $3.30.  Unfortunately, with trades like this, you can only do the entries when the stock is crossing your strike.

    I have to leave about 2:30 to take my mom to the airport, won't be back until after the close. 


  81. Just think how much could be fixed if interest rates were set minimum 2% over inflation. Borrowers would pay as they should, retired people would take safety, and they could maybe afford retirement. Only fun part of the current situation is the stupidity at the top, clueless to how to really make money, and heading down the self destruction selfish path.


  82. Tight range for AAPL today at 1/2 its ATR.


  83. Phil,

    Any opinions on WAG at these levels? They are trying tax inversion crap


  84. WAG / harip

    Last I read, they are no longer considering an inversion.

    SCO / Got my fill at $3.60


  85. Good idea Shadow, too bad it will never happen.  No one gets rich in a fair system. 

    Everything is a bit rangy today Diamond, lots of indecision.  

    Dollar down to 81.50 not helping (or maybe it is and just doesn't seem like it).  Gold stuck just under $1,310. 

    LOL, and right on schedule, CNBC releases the TBoone to try to rescue oil prices.  

    WAG/Harip – Well, when a stock drops 15% in a single day, it's best not to bet that is the day to be a buyer – unless you are POSITIVE the news is being misinterpreted.  In this case, WAG has reversed it's decision to evade taxes due to adverse PR and threats of losing Federal contracts so now the benefit of their $15Bn acquisition of Boots is not so clear.  Boots is a fantastic chain in Europe so I don't think it's a bad deal but I also don't think there's too much synergy since it's two different continents with not all that much overlap so I'd just hope they get to about $50 and THEN it becomes a very nice long-term hold.

    SCO/JPH – Patience is the way to go – especially when the position isn't in trouble.  

    Well, markets seem calm enough – I'll touch base after hours!  


  86. "markets seem calm enough" .  Talk about KOD.  I was about to go long but now I need to think about it.


  87. nazzy was so far rejected at its attempt to reclaim 50dma ..

    none of the other markets over their weak bounce levels.


  88. So the oil draw was complete fake this week, less distillate and gas production combined with lower imports of crude oil.  


  89.  SHLD – Does anyone know how to convert the new SHLD price to the old one, for our old SHLD bull call spread position?   I'm holding the 35/50 spread options that reflect SHLD prior to the LE spinoff.  Or said another way, does anyone know how much the SHLD price was reduced when they spun off Lands End?


  90. palotay, isn't just the option chain under SHLD marked "100 (LE 30; US$2.36)?


  91. Yes.  But I can't tell where the current price is in relation to my position.  


  92. I have a general question you can all chime in on. I see that volume and open interest on SQQQ options is pretty low. Is it hard to get out of positions because of this? What has been your experience with it?


  93. LINE reporting tomorrow am


  94. Griffen/SQQQ, I find that I do each leg separately-much easier to fill. Phil said to make an offer on each and see which one fills, then fill the other one.


  95. Phil, what do you think of the GMCR earnings ? seems as though they beat but lowered guidance. 

    Is it what you hoped for for the  Jan 2015 GMCR 110 puts we had left over from our bear put spread? 

    -Thanks


  96. Griffin – I find that securities with low option volumes and open interest are to be approached with caution. You can generally leg into a spread at possibly mid-market, but exiting the transaction has been painful on occasion. If you are holding the position until expiration, then the low liquidity isn't really an issue. 


  97. palotay 

    IB (Interactivebrokers) shows SHLD closed at 37.38 + .31,  and SHLD1 (old SHLD)  at 47.90 +.77 


  98. Markets still flatlining.  So boring…

    Not looking like a recovery so far.  

    Good article on Fry's site but you have to read it before it expires (I can never find old stuff there) on VXX and why it sucks.  If anyone can save this or, better yet, add it to the Wiki, I'd appreciate it. 

    Oil/Shadow – I don't see less production, where do you see that?  Imports of oil were actually up but exports of petroleum were up.  Compared to last year, it's crazy though, as we're net importing 1.6Mbd less (11.2Mb/week).  All that oil goes somewhere, even if it doesn't end up in the US, it creates gluts elsewhere.  There was a 4.4Mb draw in gasoline and 1.5Mb of it was shipped out but I can't imagine what happened to the the rest.  Maybe people are filling up private storage on the lows, gas stations topping off tanks, etc?  

    SHLD/Palotay – Add about $10 to the current price, $9 to be safe.  LE is $34 and you got 3 shares for each 10 SHLD you held.  

    SQQQ/Griffin, Jomp – Important part of that idea is to offer favorable numbers on each side.  In theory, one side or the other will fill on a move up or down and then you can work on the remaining one.  If you are worried about getting stuck with a one-sided position, keep in mind you don't have to sell/buy them all at once.  

    GMCR/Crs – Not down much so I'm disappointed.  Still, earnings were only up 21% from last year and the stock is up about 50%, so hopefully there will be more of a correction.  Sales were only up 6% and outlook for sales growth is around 10%.  There was cost-cutting and people are hopeful that the new soda machine (with KO partner) will be a huge revenue booster next year – and it just might be.  So, on the whole, I'd say our bearish premise is not playing out as expected and, if the rest of the market isn't weak – there's no reason to stay short on these guys.  

    Keurig said in June that it would partner with Subway to install single-serve Keurig K150 brewers in thousands of the ubiquitous sandwich chain's North American locations.

    Since its patent on K-Cup expired two years ago, Keurig has seen increased competition from companies making similarly styled portion packs for its coffee makers at lower costs.

    But the Keurig 2.0 won't accept unlicensed K-Cups, though it's not clear if the technology will keep out all copycats.


  99. BofA reportedly near $16B-$17B deal with DOJ

    • The deal to settle allegations of mortgage shenanigans ahead of the financial crisis would have Bank of America (NYSE:BAC) paying about $9B in cash to Justice and other government entities, with the additional money going towards consumer relief, reports the WSJ.
    • previous report had BofA upping its settlement bid to $14B last week, but the DOJ still holding out for $17B.

    Annaly on sale after big gain in book value

    • Q2 core earnings of $300.4M or $0.30 per share vs. $239.7M and $0.23 in Q1, and $294.2M and $0.29 a year ago. Dividend is $0.30.
    • Book value per share of $13.23 up from $12.30 at end of Q1. Today's close of $11.26 puts the stock at a 15.1% discount to book.
    • Net interest spread of 1.26% gains 36 basis points from Q1.
    • Agency MBS holdings of $82.4B up from $77.8B in Q1 (95% are fixed rate). CPR of 7% up from 6%.
    • Commercial real estate paper holdings of $1.6B, flat from Q1. Commercial real estate holdings of $74.4M up from $40.3M.
    • Leverage of 5.3x vs. 5.2x in Q1 and 6.2x a year ago.
    • Conference call tomorrow at 10 ET
    • Previously: Annaly Capital Management beats by $0.03
    • NLY +1.2% AH

    Transocean beats by $0.49, beats on revenue

    • Transocean (NYSE:RIG): Q2 EPS of $1.61 beats by $0.49.
    • Revenue of $2.33B (-2.9% Y/Y) beats by $60M.
    • Shares +2.6% AH.
    • Press Release
    • U.S. Steel (X -0.7%) attracts more analyst love today, although shares are down a bit today after gaining 25% in the last five trading sessions.
    • In reiterating his Buy rating with a $47 price target, Goldman analyst Sal Tharani calls U.S. Steel one of the best growth stories in his steel coverage with an expected EBITDA compound annual growth rate of 26% from 2013-16, as well as one of the cheapest stocks in his coverage, trading at 4.5x estimated 2015 EBTIDA vs. its peer average of 6.5x.
    • The stock touched 52-week highs yesterday after racking up its third analyst upgrade in recent days.
    • Molycorp (NYSE:MCP) +12.8% premarket on news that Oaktree Capital Management has agreed to provide MCP and certain subsidiaries up to $400M in secured financing through credit facilities and the sale and leaseback of equipment at the company`s Mountain Pass facility.
    • As part of the agreement, MCP will issue Oaktree with share warrants equal to 10% of its stock.
    • The financing news overshadows MCP's Q2 earnings miss; Q2 production volume totaled 1,639 metric tons, up 48% Q/Q.

    ADM says tax inversion deal to Switzerland not happening

    • Wall Street has speculated that Archer Daniels Midland's (NYSE:ADM$3.1B deal last month to buy Swiss-based Wild Flavors could foreshadow a move to reincorporate in Switzerland, which also happens to be the home to Glencore and Vitol, two of the world’s biggest grain, energy and metals trading houses.
    • Several companies have moved offshore and more are said to be considering it, prompting aspirited debate in Washington D.C.
    • As for ADM, the company said nothing in its Q2 earnings report that would link its Wild Flavors acquisition to a possible tax inversion, and analysts on the earnings conference call didn’t directly address the issue.
    • But it looks like ADM will continue to call the U.S. home, as a MarketWatch query drew a flat no: “There are no plans to re-domicile offshore; an inversion is likely not even possible given the size of the Wild Flavors acquisition relative to ADM’s overall size."

    USDA leaning toward approval of Monsanto's new GMO beans, cotton

    • The USDA on Tuesday said it is leaning toward approval of a new line of herbicide-tolerant crops developed by Monsanto (NYSE:MON), and issued a final environmental impact statement for genetically altered corn and soybean plants developed by Dow Chemical (NYSE:DOW) which also indicates likely approval.
    • MON developed its new soybeans and cotton to resist a new herbicide that combines dicamba and glyphosate and which the company is branding as Roundup Xtend; DOW has developed its Enlist corn and soybeans that resist a new herbicide developed by the company that includes glyphosate and 2,4-D.
    • Both new cropping systems have seen regulatory decisions delayed by intense opposition from groups who say using more herbicides on weeds will only increase weed resistance over the long term, as well as bring increased risks of health problems and environmental pollution.

    Consumer staples stocks on the move

    • A number of consumer staples stocks are in favor with investors as they shift their focus to a defensive posture and dividend yields.
    • Some of the names showing outsized gains include PepsiCo (PEP +1.5%), Clorox (CLX+1.6%), Revlon (REV +1.6%), Colgate-Palmolive (CL +1.5%), Coca-Cola (KO +1.6%), Kraft Foods Group (KRFT +2%), and Procter & Gamble (PG +1.7%).
    • It's no coincidence that the Consumer Staples ETF (NYSEARCA:XLP) is up 0.8% for the day to best market averages.

    Moody's cautions on Walgreen's buyback plan

    • Moody's places some of Walgreen's (WAG -14.7%) commercial paper and debt on review for a potential downgrade.
    • The action from the ratings agency is due to Walgreen's announcement of a new $3B share repurchase program.
    • Execs with CVS Caremark (CVS -0.3%) cleared up some of the haze over what the impact of the exit of from the tobacco business will be during the firm's earnings call.
    • CVS lost 110 bps from its front store comp sales mark during Q2 and the development contributed to an overall loss in market share for drugstore traffic.
    • A 400-500 bp loss in front store sales growth is expected in Q3.
    • Overall, CVS says it will lose $2B in annual sales from the tobacco decision.
    • There isn't any specific guidance from the company on how much of the $2B will be made up and when by signing new healthcare services and provider deals.
    • Earnings call transcript

    Priceline buying up to 10% stake in Ctrip

    • Priceline (NASDAQ:PCLN) is investing $500M in Chinese online travel leader Ctrip (NASDAQ:CTRP) through a convertible bond, and has been granted permission to buy Ctrip shares in the open market over the next 12 months. Between the bond and the share purchases, Priceline can hold up to a 10% stake.
    • The companies are also expanding their existing partnership (formed in 2012). Priceline will provide Ctrip customers access to its 500K+ non-Chinese accommodations, and Ctrip will provide Priceline customers access to its 100K+ Greater China accommodations.
    • In addition, Ctrip will provide access to Priceline's renalcars.com and OpenTable inventory, and Priceline will promote Ctrip's air/attraction ticketing services to its customers. Priceline will have the right to nominate an observer to Ctrip's board.
    • The alliance poses a fresh challenge to Expedia-controlled eLong (NASDAQ:LONG) and Baidu-controlled Qunar (NASDAQ:QUNR). Expedia recently shot down a rumor stating Ctrip was looking to acquire Expedia's eLong stake.
    • CTRP +14.2% AH.

    More on Keurig Green Mountain's FQ3

    • Keurig Green Mountain (NASDAQ:GMCR) reports portion pack sale rose 10% to $826M in FQ3 to help offset a 4% decline in brewer and accessory sales.
    • Product pack volume added 15 percentage points of sales growth, while product mix and pricing had a negative impact.
    • Gross margin rate +140 bps to 43.5% due to favorable green coffee costs and gains in logistics productivity.
    • Inventory -5.5% Y/Y to $639M.
    • The company sees FQ4 EPS of $0.68-$0.75 vs. $0.86 consensus.
    • GMCR -3.1% AH

    Barrington Research: Buy the dip in Time Warner

    • Barrington Research sees an opportunity with today's drop in Time Warner (TWX -12.6%)
    • The investment firm is in with an upgrade to a Buy rating and price target of $93 on its view that a merger between TWX and a large media or tech company will still happen.

    Heard during the Dish Networks earnings call

    • Dish Networks (DISH +1.9%) CEO Charlie Ergen concedes during the firm's earnings call that the pay-TV business appears to be in a secular decline.
    • Over-the-top offerings at a lower price point could be the future, he notes.
    • Ergen is more excited about wireless. He says there's plenty of potential for the company to benefit by partnering with Sprint. A bid for T-Mobile by Dish is described as a "maybe" by the exec.
    • Another interesting comment is his contention that a merger of Dish and DirecTV wouldn't makes sense for Dish shareholders due to valuation.
    • Earnings call webcast

    Amazon brings same-day to NYC, five other markets

    • Amazon (AMZN +0.6%) has added NYC, Philly, Baltimore, Dallas, Indianapolis, and Washington D.C. to the metro areas where it supports same-day delivery. The service is already available in L.A., Phoenix, San Francisco, Boston, Seattle, and Chicago.
    • 1M+ items are available for same-day delivery, and customers can filter for them by clicking on a "Get It Today" option on Amazon's site. Most markets have an order cutoff point in the 12PM-1PM timeframe, but Chicago is at 7:45AM.
    • Amazon charges Prime subs a $5.99 flat fee per same-day order. Everyone else is charged $9.98 for the first item + $0.99 for each additional item.
    • For now, the e-commerce giant has a healthy same-day coverage lead over rivals. Google, which (unlike Amazon) is relying on retail partners to handle inventory/warehousing for orders, has reportedly committed $500M to bring its Shopping Express local/same-day service nationwide. eBay, meanwhile, has backtracked on plans to aggressively expand its Now same-day service.

    Google buys mobile messaging app Emu

    • Google (GOOG +0.4%) has acquired Emu, a mobile messaging/SMS app that tries to stand out by integrating a virtual assistant service.
    • With the help of A.I., Emu analyzes conversations to help schedule appointments, make reservations, pull up movie info, and share one's location, among other things (shades ofGoogle Now). CEO Gummi Hafsteinsson: "I felt that you kind of had to engage [Apple's] Siri all the time, and I wanted to create an assistant that was more in the background and proactive."
    • Mobile messaging has been seen as a weak spot for Google, given the huge user bases claimed by 3rd-party platforms such as WhatsApp (500M+ active users), Line, WeChat, iMessage, BBM, and Facebook Messenger. Google was rumored to have shown interest in WhatsApp before Facebook struck a $19B deal to acquire it, but has denied making a bid.
    • Though Google bundles its Hangouts app (integrated Gchat, SMS, and video calls) with Android phones, reviews have been mixed. Emu's technology appears a logical fit for future Hangouts releases.

    Apple roundup: Chinese government, schools, UBS estimates

    • Bloomberg reports the Chinese government has excluded ten Apple (NASDAQ:AAPL) products, including iPad and MacBook models, from the list of items that can be bought with government funds.
    • Bloomberg's report doesn't mention the iPhone, and (from all indications) government purchases are only a small fraction of Apple's Greater China sales (+28% Y/Y in FQ3 to $5.9B). However, the report highlights China's growing scrutiny of U.S. tech companies following last year's NSA uproar. Microsoft and IBM are among the other companies in the crosshairs.
    • The Atlantic observes some U.S. schools are backtracking on iPad deployment plans in favor of Chromebooks and other laptops. Both costs and productivity have been cited. "Students saw the iPad as a 'fun' gaming environment, while the Chromebook was perceived as a place to 'get to work,'" the magazine writes about one school's experience.
    • Tim Cook noted on the FQ3 CC (transcript) Apple has sold 13M iPads to education customers globally. The company has made a series of moves to better cater to the education market.
    • With demand shifting towards cheaper models, UBS estimates shipments of $300+ smartphones fell 6% Y/Y in Q2, even as total smartphone shipments rose 22%. However, Apple, which reported a 13% increase in calendar Q2 iPhone units and a 9% increase in revenue, appears to have gained ground in the segment relative to Samsung.

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  101. From Bloomberg, Aug 7, 2014, 4:47:30 AM


    Aug. 7 (Bloomberg) — Sean Callow, a Sydney-based strategist at Westpac Banking Corp., talks about Australia’s economy, currency and central bank policy.
    Australia’s jobless rate jumped to a 12-year high in July, surpassing the U.S. level for the first time since 2007, sending the local currency tumbling. Callow also talks about U.S., Japan and European central bank policies and currencies. He speaks with Rishaad Salamat on Bloomberg Television’s “On the Move.” (Source: Bloomberg)

    Bonds rose, driving German two-year
    yields below zero for the first time in more than a year, as
    tension increased over Ukraine and the European Central Bank
    prepared to decide on monetary policy. Australia’s dollar led
    declines in higher-yielding currencies.

    To read the entire article, go to http://bloom.bg/1qXpB8c

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  102. From Bloomberg, Aug 7, 2014, 4:14:10 AM

    European stocks were little changed
    as investors weighed earnings from companies including Munich
    Re, Commerzbank AG and Nestle (NESN), amid intensifying tension in
    Ukraine. U.S. stock-index futures rose and Asian shares fell.

    To read the entire article, go to http://bloom.bg/1pcY44M

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  103. From Bloomberg, Aug 7, 2014, 3:50:18 AM

    The pound approached its weakest
    level in eight weeks versus the dollar before Bank of England
    officials announce their latest policy decisions following a
    two-day meeting.

    To read the entire article, go to http://bloom.bg/1sk1ykU

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  104. From Bloomberg, Aug 7, 2014, 2:07:31 AM


    Sigmar Gabriel, Vice Chancellor of Germany, this week blocked a deal for Rheinmetall AG to build a military training center east of Moscow in light of the sanctions. Photographer: Krisztian Bocsi/Bloomberg

    German industrial output grew less than forecast in June as Europe’s largest economy came under pressure from political tensions with Russia.

    To read the entire article, go to http://bloom.bg/1pcUZ4H

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  105. From Bloomberg, Aug 7, 2014, 3:20:20 AM


    Sam Walsh, chief executive officer of Rio Tinto Group. Photographer: Simon Dawson/Bloomberg

    Rio Tinto Group (RIO), the world’s second-largest mining company, said first-half profit gained 21 percent
    on record iron-ore shipments, setting the stage for an increase
    in cash returns to investors from next year.

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

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  106. From Bloomberg, Aug 6, 2014, 7:01:00 PM


    ECB President Mario Draghi may have few tools left to mitigate the impact of geopolitical turmoil that European companies from Anheuser-Busch InBev NV to Siemens AG say is hurting their business. Photographer: Ralph Orlowski/Bloomberg

    Here are five questions for Mario Draghi today. The European Central Bank president holds a press
    conference at 2:30 p.m. in Frankfurt, 45 minutes after the
    Governing Council’s announcement on interest rates.

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

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  107. From Bloomberg, Aug 7, 2014, 2:22:09 AM


    Aug. 7 (Bloomberg) — German economic growth is showing signs of weakening, potentially putting additional pressure on the European Central Bank, according to Andrew Bosomworth, managing director at Pacific Investment Management Co. in Munich.
    He discusses the outlook for ECB monetary policy with Manus Cranny, Mark Barton and Caroline Hyde on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

    The crisis in eastern Europe is
    showing signs of disrupting Mario Draghi’s economic outlook.

    To read the entire article, go to http://bloom.bg/1syaFR1

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  108. From Bloomberg, Aug 6, 2014, 9:41:39 PM


    Aug. 6 (Bloomberg) –- Bloomberg’s Ryan Chilcote reports on Russian President Vladimir Putin prepping a retaliation against U.S. and E.U. Sanctions. He speaks to Jonathan Ferro on Bloomberg’s Television’s “On The Move.” (Source: Bloomberg)

    As the military endgame in Ukraine approaches, President Vladimir Putin must decide just how far he’s prepared to go to defend the pro-Russian insurgency.

    To read the entire article, go to http://bloom.bg/1sctb2U

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  109. From Bloomberg, Aug 7, 2014, 4:45:32 AM

    Russia struck back at sanctions over
    the conflict in Ukraine by banning an array of food imports from
    the U.S. and Europe.

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

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  110. From Bloomberg, Aug 6, 2014, 8:54:29 PM

    Not understanding how much income and wealth the world’s richest hold means they’re paying less in taxes. Photographer: Krisztian Bocsi/Bloomberg

    The 1 percent is literally rich beyond measure, depriving nations of billions in tax revenue and obscuring shifts in global inequality.

    To read the entire article, go to http://bloom.bg/1uoGB9M

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  111. From Bloomberg, Jul 29, 2014, 12:00:00 AM


    July 17 (Bloomberg) — Travis Kalanick, co-founder and chief executive officer of Uber Technologies Inc., the car-sharing service that lets people order transportation via a smartphone, talks about the company’s business strategy and outlook.
    He speaks in Hong Kong with Rishaad Salamat on Bloomberg Television’s “On the Move.” (Source: Bloomberg)

    The “sharing economy” is going
    corporate.

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

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  112. From Bloomberg, Aug 6, 2014, 6:00:01 PM


    Israeli Author Etgar Keret argued in his column that discourse in Israel has grown increasingly polarized. While “right-wing thugs chanting ‘death to Arabs’ and ‘death to leftists’ on the streets of Jerusalem are considered patriotic,” he wrote, “demands to stop the operation or mere expressions of empathy about the deaths of women and children in Gaza,” are perceived as betrayal. Photographer: Ulf Andersen/Getty Images

    Israeli author Etgar Keret is finding
    his words come with a cost nowadays.

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

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  113. From Bloomberg, Aug 6, 2014, 8:01:00 PM

    Nancy Writebol, an American aid worker from North Carolina who was infected with the Ebola virus while working in Liberia, arrives at Emory University Hospital in Atlanta on Aug. 5, 2014. Photographer: John Spink/The Journal and Constitution via AP Photo

    As the death toll rises in West Africa amid the worst Ebola outbreak on record, a separate threat is compounding the problem: the rainy season and the malaria cases that come with it.

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

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  114. Watch this video at http://bloom.bg/1scSLom

    iPhone 6: Bigger Screens and Improved Battery Life

    Aug. 6 (Bloomberg) — ISI Group Senior Managing Director Brian Marshall and Bloomberg’s Cory Johnson discuss the demand for bigger screens and more improved battery performance on Apple’s iPhone. They speak with Emily Chang on “Bloomberg West.” (Source: Bloomberg)

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  115. Watch this video at http://bloom.bg/1sftTfy

    German Growth Is Signaled Weaker, Bosomworth Says

    Aug. 7 (Bloomberg) — German economic growth is showing signs of weakening, potentially putting additional pressure on the European Central Bank, according to Andrew Bosomworth, managing director at Pacific Investment Management Co. in Munich.
    He discusses the outlook for ECB monetary policy with Manus Cranny, Mark Barton and Caroline Hyde on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

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  116. From Bloomberg, Aug 7, 2014, 4:33:15 AM

    African Bank Investments Ltd. (ABL), South
    Africa’s largest provider of unsecured loans, plunged to the
    lowest in almost two decades after saying it expects a record
    loss and will need to tap investors for $791 million.

    To read the entire article, go to http://bloom.bg/UZS9Uw

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  117. From Bloomberg, Aug 7, 2014, 12:19:07 AM

    Mexico’s vote on rules for the end of
    its 76-year state-oil monopoly couldn’t come at a better time
    for global energy companies from Exxon Mobil Corp. (XOM) to Royal
    Dutch Shell Plc.

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

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  118. From Bloomberg, Aug 7, 2014, 2:17:47 AM


    The carbon-in-leach plant stands at the Beadell Resouces Ltd. Tucano gold mine in Pedra Branca do Amapari, Amapa, Brazil. Source: Beadell Resources Ltd. via Bloomberg

    Gold’s rebound from the biggest decline in more than three decades is sparking a revival in exploration – and for one Brazilian focused-miner it’s worth the risk of crossing paths with jaguars.

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

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  119. From Bloomberg, Aug 7, 2014, 5:01:59 AM

    Iraqi Yazidis flee from Sinjar. The militant advance on Sinjar and other towns in the area displaced as many as 200,000 people, according to the United Nations Mission in Iraq. Photographer: Emrah Yorulmaz/Anadolu Agency/Getty Images

    Thousands of people from Iraq’s Yezidi religious group are stranded in northern mountains, according to the United Nations Children’s Fund, as they sought to escape execution and rape by Islamist militants.

    To read the entire article, go to http://bloom.bg/1AU4Sck

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  120. From Bloomberg, Aug 7, 2014, 4:51:33 AM

    South Africa must find 250 billion
    rand ($23 billion) of support for Eskom Holdings SOC Ltd. within
    weeks to prevent the power producer from being cut to junk and
    dragging down the country’s credit rating, a minister said.

    To read the entire article, go to http://bloom.bg/1sjLi3m

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  121. From Bloomberg, Aug 7, 2014, 4:21:17 AM


    Aug. 6 (Bloomberg) — President Barack Obama speaks about U.S. ties with Africa and efforts to curb corporate inversions in which U.S. companies seek to lower their tax bills.
    Obama, speaking at a news conference at the close of a summit with African leaders, also comments on the conflict in Gaza and sanctions on Russia. (Source: Bloomberg)

    Liberian President Ellen Johnson-Sirleaf declared a 90-day state of emergency over Ebola as West
    African nations struggle to control an outbreak of the virus
    that has left at least 932 people dead.

    To read the entire article, go to http://bloom.bg/1uox9TY

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  122. From Bloomberg, Aug 6, 2014, 7:01:00 PM

    Ireland’s banking inquiry could help
    avoid a repeat of western Europe’s worst real-estate crash as
    house prices surge again, according to the chairman of a
    parliamentary probe into the country’s financial meltdown.

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

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  123. From Bloomberg, Aug 7, 2014, 3:11:30 AM

    Commerzbank AG (CBK), Germany’s second-biggest bank, set new asset-reduction and loan-loss provision
    targets after second-quarter profit more than doubled.

    To read the entire article, go to http://bloom.bg/1sza01E

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  124. Watch this video at http://bloom.bg/1s4fIKk

    Ebola Damage Seen Arising from `Perception of Risk’

    Aug. 4 (Bloomberg) — Alexandre Breining, an analyst at the Africa Practice, discusses the possible implications of the ebola outbreak in western Africa on business and trade.
    He speaks with Guy Johnson on Bloomberg Television’s “The Pulse.” (Source: Bloomberg)

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  125. Watch this video at http://bloom.bg/1s7YOdU

    ZMapp Experimental Drug Used on U.S. Ebola Patients

    Aug. 5 — Bloomberg’s Yang Yang reports on U.S. Ebola patients treated with Zmapp experimental drug from Mapp Pharmaceuticals in San Diego.

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  126. From Bloomberg, Aug 7, 2014, 2:24:14 AM

    The eastern Chinese city of Nanjing’s construction of the Metro station on Oct. 29, 2013 Photographer: Peter Parks/AFP via Getty Images

    The biggest immediate risk facing China’s economy is about to get worse.

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

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  127. From Bloomberg, Aug 7, 2014, 2:46:47 AM


    Pedestrians are reflected in an electronic stock board in Tokyo. Photographer: Yuriko Nakao/Bloomberg

    If you wanted to find out what Toyota Motor Corp., NTT Docomo Inc. and Canon Inc. earned last year before they reported results, the best guide wasn’t analyst or company predictions. It was the Nikkei newspaper.

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

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  128. From Bloomberg, Aug 7, 2014, 2:43:52 AM


    Aug. 6 (Bloomberg) — Marcelo Claure, who was named chief executive officer of Sprint Corp. today, talks about his investments and work with soccer star David Beckham to bring a professional team to Miami.
    Claure, the 43-year-old founder of mobile-phone distributor Brightstar Corp., spoke with Bloomberg’s Bill Faries in May. (Excerpts. Source: Bloomberg)

    Masayoshi Son’s inability to engineer a combination of his Sprint Corp. (S) with T-Mobile US Inc. (TMUS) is a rare stumble for a dealmaker whose success made him Japan’s second-richest man.

    To read the entire article, go to http://bloom.bg/1AU24fn

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  129. From Bloomberg, Aug 7, 2014, 4:14:31 AM

    Xiaomi Corp. sees Indian demand for
    its smartphones eventually equaling that of its home market
    China, where the company shipped 15 million devices last quarter
    to outpace Samsung Electronics Co. (005930) and Apple Inc. (AAPL)

    To read the entire article, go to http://bloom.bg/1pde6eR

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  130. From Bloomberg, Aug 7, 2014, 12:19:53 AM

    Jobseekers wait in line for the career counseling services offered by the Career Development Association of Australia at the Reinvent Your Career expo in Melbourne. Photographer: Carla Gottgens/Bloomberg

    Australia’s jobless rate jumped to a 12-year high in July, surpassing the U.S. level for the first time since 2007 and sending the local currency tumbling.

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

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  131. From Bloomberg, Aug 6, 2014, 10:00:00 PM


    Aug. 5 (Bloomberg) — U.S. President Barack Obama speaks about his administration’s initiatives to boost business investment in and trade with Africa.
    He speaks at the U.S.-Africa Business Forum in Washington. Takunda Chingonzo, co-founder of Neolab Technology P/L conducts the question-and-answer segment with the presiden. Obama is introduced by former New York City Mayor Michael Bloomberg, founder of Bloomberg LP and Bloomberg Philanthropies. (Source: Bloomberg)

    As Barack Obama concluded the biggest
    ever meeting by a U.S. president with African leaders, U.S.
    businesses are searching for opportunities on the continent
    after a decade of entrenched Chinese investment.

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

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  132. From Bloomberg, Aug 6, 2014, 8:53:53 PM

    The world is at risk of another
    financial crisis as monetary stimulus in developed economies
    encourages investors to take risks and boost asset prices,
    Reserve Bank of India Governor Raghuram Rajan said in two
    interviews.

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

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  133. From Bloomberg, Aug 7, 2014, 3:24:55 AM


    Aug. 7 (Bloomberg) — Dissent is developing among members of the Bank of England’s monetary policy committee, according to Nick Beecroft, senior market analyst at Saxo Capital Markets in London.
    He discusses the outlook for the Bank of England’s policy announcement today with Manus Cranny, Mark Barton and Caroline Hyde on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

    The U.K.’s recovery is dividing
    former Bank of England policy makers over the timing of Mark Carney’s first rate increase as governor of the central bank.

    To read the entire article, go to http://bloom.bg/1lC3txn

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  134. From Bloomberg, Aug 7, 2014, 12:03:26 AM


    Mario Draghi could make a big statement today. Will he?

    Two months ago, the European Central Bank announced new measures to stimulate the euro area’s economy. More recently, it has led investors to expect nothing further from this week’s meeting of its governing council. In his statement today, ECB President Mario Draghi ought to say the council has had second thoughts: The changes in June were too timid, and since then the situation has only worsened.

    To read the entire article, go to http://bv.ms/1oFoKKJ

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


  135. From Bloomberg, Aug 6, 2014, 5:04:00 PM

    Staging a comeback?

    One of my favorite former colleagues, Emily Bobrow of the Economist, explains why streetcars are a bad idea. The short version: They don’t move faster than buses, at least not in the U.S., where they’re rarely given dedicated lanes. And because they require a big fixed investment, they’re very expensive, and inflexible, compared to buses.

    To read the entire article, go to http://bv.ms/1sxHzRW

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


  136. From Bloomberg, Aug 6, 2014, 3:25:36 PM


    Documented cases of voter impersonation are hard to come by.

    At the Monkey Cage today, Justin Levitt has a nice summary of the evidence — or better, the nonevidence — on voter impersonation fraud. The headline is that he has found all of 31 credible episodes since 2000. Some are proven, some aren’t, but that’s 31 out of, he says, about 1 billion votes cast in this period.

    To read the entire article, go to http://bv.ms/1oDLwCN

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


  137. From Bloomberg, Aug 6, 2014, 3:22:33 PM

    Being smart, not just standing tall.                                                                                   

    I find it hard to avoid the conclusion that the U.S. is doing very well at the international Great Game under President Barack Obama.

    To read the entire article, go to http://bv.ms/1oDKTJx

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


  138. From Bloomberg, Aug 6, 2014, 12:33:28 PM


    Better cars, clean consciences.

    On Saturday, an explosion at a plant in Jiangsu province, China, that sold products to a General Motors Co. supplier killed at least 75 workers and injured another 185. Two days later, Bloomberg News reported on a study estimating that better interactions with suppliers could have increased GM’s operating profits by about $400 million last year. The coincidence of these two stories seems to defy the cost-cutting logic that has driven most auto-supply work to the “China Cost.” Is it possible that an automaker could have made more money and avoided an appalling tragedy simply by not focusing so much on lowering costs?

    To read the entire article, go to http://bv.ms/1tX9eh6

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


  139. From Bloomberg, Aug 6, 2014, 10:53:47 AM


    Would you like the Democratic plan or the Republican plan?

    At the end of last year, I wrote that the debate over Obamacare’s impact would be settled once its main provisions took effect. Republicans thought out-of-pocket health costs would rise and access to their doctors would decrease; Democrats didn’t. “One of two things will happen in 2014,” I predicted:

    To read the entire article, go to http://bv.ms/1pagDqf

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


  140. From Bloomberg, Aug 7, 2014, 4:34:56 AM

    Asian stocks fell, with the regional
    benchmark index heading for a three-week low, as tensions
    mounted over Ukraine and casino shares slumped.

    To read the entire article, go to http://bloom.bg/1vcKH98

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


  141. Good morning! 

    Futures creeping back up to yesterday's highs.  

    Nikkei came back from 15,050 to 15,200 and still there with Dollar at 81.50 again.  Hang Seng and Shanghai lost 1%, both finishing at day's lows with India and Singapore down just a bit. 

    China Unicom's Profit Jumps

    China Unicom, the country's second-largest wireless carrier, said its profit for the first six months of the year rose 26%, due partly to favorable regulatory policies. 

    Frontier-Market Boom Spurs Warnings

    Adventurous investors looking for big returns are pouring billions of dollars into frontier markets but prompting warnings from big fund managers who say the rapid gains are too far and too fast.

    US banks warn on ‘excessive’ risk-takingAn influential group of Wall Street banks has warned the US Treasury that low volatility in many markets is creating a feedback loop that exacerbates “excessive risk-taking” by investors.

    Asian Stocks Poised for Third Day of Decline on Ukraine

    Prada’s Sales Growth Slows on Weaker Asia, Europe Demand. Prada SpA (1913) the Milan-based luxury handbag maker, posted the slowest half-yearly sales growth in three years as demand weakens in some Asian countries and in Europe amid economic and political uncertainties. Shares fell. Prada’s revenue climbed 1 percent to 1.75 billion euros ($2.34 billion) in the six months through July as demand weakens in some Asian countries and in Europe amid economic and political uncertainties, according to the company’s preliminary figures filed to Hong Kong’s stock exchange yesterday.

    Nickel Stockpiles at Record High as China Turns Exporter

    China Steps Up Antitrust Duel With WestRegulators Inspect Microsoft's Offices and Investigate Accenture. Chinese antitrust regulators are intensifying pressure on foreign technology and auto companies in separate moves that experts say show Beijing's desire to give Chinese companies greater heft in their dealings with foreign firms. Regulators from the State Administration for Industry and Commerce said they conducted surprise inspections Wednesday of Microsoft Corp.'s China offices in regard to suspected monopolistic practices. They… ?

    China's "Prelude To A Storm" As Record Private Bonds Mature

    German manufacturing orders were terrible but Europe only down a bit as we wait for Draghi to fix everything – could be a problem if he doesn't.

    Summertime Blues:  Summertime Living Isn't Easy for Macro FundsGraham Capital, Rubicon Among Hedge-Fund Firms Feeling Heat of Poor Returns. The market's summer stumble has dealt a new blow to a group of macro hedge funds that seek to anticipate trends in global markets. Graham Capital Management LP has laid off more than 10% of its staff, or more than 20 employees, according to people close to the matter. Six funds at the firm, run by Kenneth Tropin, have posted declines of as much as 5.9% this year, the people said. Rubicon Fund Management LLP's Rubicon Global..

    Deals' Demise Wrecks Funds' BetsBusted Buyouts and Warning by Obama Sting Big Investors; It's 'Arbageddon'. On a day some traders dubbed "Arbageddon," hedge funds who bet on big corporate takeovers, known as arbitragers, suffered their worst rout in years after two deals fell apart and regulators indicated they may take steps to stymie others. In a rapid-fire series of moves over the course of 24 hours, 21st Century Fox Inc. dropped its $80 billion bid for Time Warner Inc., and Sprint Corp. abandoned its plans to acquire T-Mobile US Inc. Walgreen Co. wrong-footed other traders by deciding not to move offshore to lower..

    US Missile-Cruiser Returns To Black Sea To "Promote Peace And Stability"

    Vladimir Putin's pointless conflict with Europe leaves it a vassal of ChinaRussian president Vladimir Putin has been obsessed with an imaginary threat from an ageing, pacifist Europe in slow decline, while throwing his country at the feet of a greater threat – China.

    I think the US markets are benefiting from "safe haven" status this week.  Where else are you going to trust your money?  It's not giving us a rally but it is keeping us from falling too hard – so far. 

    Oil $96.68, gold $1,305, Dollar 81.55, silver $20.02 (watch that $20 line), copper $3.16 (weakening again), Nat gas $3.93 and gasoline $2.73 despite yesterday's big "demand" on inventories.  Kind of makes me doubt those numbers.  

    Futures in a good spot to go bearish but not sure bearish is going to work today:  /YM 16,425, /ES 1,920, /NQ 3,875 and /TF 1,128.  I think if /TF tests 1,130 I'd like the short as long as /ES is under 1,920 and /YM under 16,450 and /NQ under 3,875 otherwise, it's short the laggard if 3 of 4 below those lines.  

    If they are above, we're back to watching and waiting on weak bounce lines.