Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!

Triple Top Tuesday – Can Low Volumes Drive Us to New Highs?

SPY  5  MINUTE181 shares traded down on Friday, 81M traded up on Monday.

Is this what a rally looks like?  I cannot emphasize enough that we are in CASH!!! and don't really give a crap what the market does, so I say this with all possible detatched objectiveness when I ask you – WTF are you playing with?  

This market makes no sense, it moves for unsensible reasons.  It goes up on no volume and the Corporate Media acts like that's the way things are supposed to be because THAT'S WHAT THEY ARE PAID TO TELL YOU.  Are you paying them?  No, you are not.  They are paid to sell you cars and toothpaste and timeshare vacations and, worst of all, Retirement Planning because their form of retirement planning only plans to detach you from your money so the sponsors can retire rich – NOT YOU!  

That clip was from 1976, about 40 years ago and not much has changed since, so why should we worry.  At the time, the country was in the 4th year of a recession having just ended a pointless war that ran up the National Debt and left us with huge budget deficits.  At the time, we had a lot of inflation at the same time because we didn't have a Fed pouring money into the economy and oil shot up from $50 (inflation-adjusted) to $100 per barrel over the next few years during the Iranian Revolution.  

After the Iranian Revolution, things calmed down and oil collapsed all the way to the $20s where, except for the Gulf war, it pretty stayed until 2000 when the Commodity Futures Modernization Act deregulated the trading of energy contracts and led to the modern age of oil prices manipulation that has nothing to do with the Fundamental laws of supply and demand.  

That's why the price of oil has gone from $45 to $57.50 (up 27%) in just over a month with no change in supply or demand and that's how the price of gasoline has gone from $1.23 a gallon on January 13th to $1.92 a gallon this morning (up 56%).  Keep in mind, there are 42 gallons in a barrel, so $1.92 per gallon is $80.64 per barrel, quite the mark-up!  

U.S. gasoline demand graphWe are, in fact, using 4Mb LESS gasoline per week than we were in January, according to the EIA, while we are producting the same 9Mbd that we usually do.  Gasoline production is, in fact up from 9.0Mbd in January to 9.3Mbd last week and inventories are about 17Mb above the 5-year average.

From that, you may be tempted to draw the conclusion that gasoline should be going down in price – but that's not how the energy market works anymore.  The price of gasoline is whatever "THEY" can make you pay for a gallon of gasoline and it's almost independent of the price of oil – even though that's pretty much the only ingredient in gasoline.  Don't ask to make sense of it – it doesn't because it's nothing but a scam being played on you by the US Energy Cartel to take as much of your money as possible.  

Howard Beal asked you to get mad in 1976 and some of us did and we elected Carter and things changed and the recession ended.  Then Reagan came along and said the Economy was in good shape but the mean old Government was using all that money to balance the books and should instead give it back to the rich people, who would trickle it back down on the poor people.  George H. W. Bush called that idiocy "Voodoo Economics" and then he became Vice President and shut up about it like a good soldier.  

EVEN THOUGH supply side economics has been debunked via our experiences with the S&L crisis and our more recent market melt-down in 2008, the Fed is now pursuing a policy of Supply Side on steriods by supplying the top 1% (people and corporations) with all the money they could possibly want in the hopes that they will end up doing something productive with it one day.  

So far, all the top 1% has done with the money is buy more stocks and our economy has languished at around 2%, the lowest average growth in our country's history.  Last year and the year before, Government spending cutbacks CUT 1% and 0.5% respectively from our annual GDP while stock market gains added 0.5%.  That's fine – if you have stocks and the more stocks you have the better that is for you.  Not so much so for those without equity.  

As we mentioned in yesterday's post, China dropped another $194Bn in stimulus into the Glboal Economy this week and we had a huge rally on the news and this morning the Nikkei popped 275 points (1.4%) and the Hang Seng jumped 755 points (2.79%) and the Shanghai jumped 76 points (1.8%) but Europe has already given most of their gains and our Futures are paused back where they began to drop on Friday because $194Bn – unless it were all applied today, shouldn't bump China's $8Tn market 2% higher, should it?  

That's why the volumes are drying up – money is flowing OUT of the markets.  Here, in Europe, in Asia and that's WITH lots and lots of stimulus aimed at keeping things going.  Even so, it's getting harder and harder to find buyers so what is going to happen when people have a reason to sell?  

That's why we went to CASH!!! while the market was heading higher – it's far better to sell into a rally than trying to sell when people are panicking – most people who got stuck with homes after 2006 can attest to that!  

We haven't gotten out of all our longs and, in fact, we just picked a new Top Trade this morning for our Members on TSN ($37.50) but I can't tell you how we structured the trade as our quarterly free picks are over – sorry cheapskate readers…    

Anyway, we are VERY HAPPY to have our Member Portfolios back in almost all cash and the few positions we have left (mostly material stocks) are doing extremely well (see April Review, Members only) but we're still shorting oil at $57.75 (see yesterday's 5% Rule™ lines) and we're still shorting /ES (S&P Futures) at 2,100 and /TF (Russell Futures) at 1,170 – all with tight stops above, simply because the reward to risk ratio is high on those plays – so why not?  

Be careful out there! 

 


Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!



Comments (reverse order)


    You must be logged in to make a comment.
    You can sign up for a membership or log in

    Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

    Click here to see some testimonials from our members!


  1. Good Morning everyone! 

    Today's webinar link is:

    http://bit.ly/042115Webinar


  2. Oil Lines

    R3 – 61.01
    R2 – 59.82
    R1 – 58.78
    PP – 57.60
    S1 – 56.55
    S2 – 55.36
    S3 – 54.32


  3. That's a lot of guns:

    http://talkingpointsmemo.com/edblog/--100617

    It won't come as a surprise to many of you that there are far more guns in civilian hands in the US than the UK or Germany, for instance. But even if you're broadly familiar with the contours of the gun story, it's still stunning to see just how heavily armed the US is compared to every other country on the planet. Indeed, the only country that even comes close to the US per capita average is Yemen. While the US has only 5% of the world's population, it has between 35% and 50% of the world's civilian firearms. 


  4. A general question for the board based on this mornings' posts to yesterday's board on TSN trade.  I may be trying to combine two strategies but figured I would get clarity from the board.  Last year there was discussion of a strategy to "plant trees", where you buy a long dated ITM call and sell a long dated put at first and then once the stock price grows sell the long dated call to form the vertical.  Combining that approach with the TSN discussion, why not buy 2017C, sell 2017P and sell June or July Caller?  If short caller is in the money, a good opportunity to sell the long caller otherwise sell a September call and keep looking for an opportunity to sell the long caller.  Obviously, much more work than simply following Phil's trade.  Still trying to learn.  10000 hours is a lot of learning.  Thanks in advance. 


  5. Good article about Putin:

    http://qz.com/387514/kleptocrat-or-crusader-getting-inside-putins-head/

    Putin is not a lunatic, nor yet a fanatic. He is a rational leader, even though his frame of rationality is not necessarily our own. His motivations, his calculus for which risks are worth taking and which goals are worth those risks is not that of the pragmatic kleptocrat, who simply looks for the safest and most efficient route to enrichment. Instead, today’s Putin is a more pure and dangerous phenomenon: a believer in a cause. Until the West can appreciate that the palaces and yachts are side-effects, rather than end goals, of this Putin, we will never know quite how to handle him.



  6. Options,

    TSN you right it is a lot more work. But in deed I am a tree planter and farm many trees. The idea of buying the call and selling the put is generally OK. But mostly I find closing the deal of The vertical is mostly the best as sometimes the stock goes down and you find yourself losing on the call and on the put. Did you sell the leap caller at the same time you at least will gain on the caller. In addition to this play yes you can sell 1/2 I call it a cherry caller one or two month out of the present date. At present many companies reporting their quarter and I find it mostly wiser to wait and see. 


  7. From Bloomberg, Apr 21, 2015, 7:54:23 AM

      The U.S. flag is arranged for a photograph in New York, U.S., on Thursday, May 26, 2011. The cost of insuring U.S. government debt against losses for one year with credit default swaps is rising while the price of protection over longer periods has fallen, as investors bet the standoff over raising the debt ceiling may drag into August. Photographer: Scott Eells/Bloomberg

    A new poll released this morning shows public confidence in the future of the U.S. economy hitting multi-year highs. 

    To read the entire article, go to http://bloom.bg/1DI9u6A

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


  8. From Bloomberg, Apr 21, 2015, 6:37:55 AM

      Mario Draghi, president of the European Central Bank (ECB), attends the International Monetary Fund Committee (IMFC) governors plenary session at the International Monetary Committee (IMF) and World Bank Group Spring Meetings in Washington, D.C., U.S., on Saturday, April 18, 2015. IMF Managing Director Christine Lagarde warned this week that she wouldn’t let Greece skip a debt payment to the lender, shutting down a potential avenue to buy the Greek government some financial leeway. Photographer: Andrew Harrer/Bloomberg *** Local Caption *** Mario Draghi

    German investors lose some confidence, tech earnings deliver, and another default in China. Here are some of the things that people will be talking about today.

    To read the entire article, go to http://bloom.bg/1J5IthT

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


  9. From Bloomberg, Apr 21, 2015, 8:56:35 AM

    Low interest rate policies by central banks around the world are threatening insurance companies and pension funds, said Laurence D. Fink, chief executive officer of BlackRock Inc., the world’s largest asset manager.

    To read the entire article, go to http://bloom.bg/1J63Pvu

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


  10. From Bloomberg, Apr 21, 2015, 6:48:46 AM

    Denmark’s central bank is considering deploying measures that will aid liquidity in the country’s government bond market after suspending issuance to defend the krone’s peg to the euro.

    To read the entire article, go to http://bloom.bg/1yNwYs5

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


  11. From Bloomberg, Apr 20, 2015, 11:02:41 AM

     

    Individual investors in the stock market are often referred to as “retail.”

    To read the entire article, go to http://bloom.bg/1GaU0Zz

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


  12. From Bloomberg, Apr 21, 2015, 6:22:51 AM

      Co-Chief Executive Officers Anshu Jain and Juergen Fitschen, who took over the bank three years ago, are leading the review to boost returns and capital levels. Photographer: Ralph Orlowski/Bloomberg

    Deutsche Bank AG bondholders are concerned that a sale of the retail business to concentrate on investment banking would deprive Germany’s biggest lender of deposits it needs for funding and increase risk for creditors.

    To read the entire article, go to http://bloom.bg/1yNvG0m

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


  13. From Bloomberg, Apr 21, 2015, 5:42:07 AM


    Government debt in the euro area surged to the highest levels since the introduction of the single currency, underscoring the challenges still confronting the 19-nation bloc as it wrestles with Greece over new aid payments.

    To read the entire article, go to http://bloom.bg/1IB8aUh

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


  14. From Bloomberg, Apr 21, 2015, 5:38:46 AM

    People sit at the foot of Acropolis Hill in Athens. European leaders want Greece to do more to revamp its economy, with progress to be reviewed on April 24 in Riga, Latvia, when finance ministers from the currency bloc meet. Photographer: Kostas Tsironis/Bloomberg

    The U.S. is pushing Greece and its creditors to reach a deal that returns the country to growth, President Barack Obama’s chief economist said.

    To read the entire article, go to http://bloom.bg/1bom01U

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


  15. From Bloomberg, Apr 21, 2015, 5:38:01 AM

     

    A Chinese power-transformer maker became the country’s first state-owned company to default on an onshore bond, signaling the government’s willingness to let market forces decide an enterprise’s fate.

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

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


  16. From Bloomberg, Apr 21, 2015, 5:22:10 AM

      While devaluation has its “pluses and minuses,” the ruble will regain its balance, according to Russia’s Prime Minister Dmitry Medvedev. Photographer: Andrey Rudakov/Bloomberg

    Russia acknowledged the surging cost for its takeover of Crimea from Ukraine, with Prime Minister Dmitry Medvedev blaming the standoff and sanctions that followed for helping push the economy into its first recession since 2009.

    To read the entire article, go to http://bloom.bg/1DHz2AE

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


  17. From Bloomberg, Apr 21, 2015, 5:09:23 AM

    It turns out defaults in China aren’t such a bad thing for financial markets after all.

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

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


  18. From Bloomberg, Apr 21, 2015, 5:12:00 AM

     

    (Bloomberg) — Banks in the euro area can now get paid to look after each others’ cash for three months as the European Central Bank’s bond-buying program floods the region’s money markets with excess liquidity.

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

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


  19. From Bloomberg, Apr 21, 2015, 5:01:16 AM

      Germany’s economy expanded 0.5 percent in the three months through March, according to a Bloomberg survey of economists, and will continue to grow at that pace in the remaining quarters of the year. Photographer: Krisztian Bocsi/Bloomberg

    German investor confidence unexpectedly fell for the first time in six months, signaling that the uncertainty induced by Greece’s debt crisis may be weighing on Europe’s largest economy.

    To read the entire article, go to http://bloom.bg/1J5vMng

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


  20. Good morning Phil

    Verizon reported this morning and the 4.7% div looks interesting, esp if combined with monthly call selling and perhaps put selling at appropriate times, carefully chosen.

    What is your opinion for a new position?

    Or, are you still in the ATT camp?


  21. From Bloomberg, Apr 21, 2015, 12:38:46 AM

      Brady Dougan, Chief Executive Officer of Credit Suisse Group AG, speaks at the Credit Suisse Asian Investment Conference in Hong Kong on March 24. Photographer: Jerome Favre/Bloomberg

    Credit Suisse Group AG fell the most since January in Zurich trading after the bank said a key measure of financial strength dropped in the first quarter, stoking concerns it may have to boost capital.

    To read the entire article, go to http://bloom.bg/1zEY13C

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


  22. Watch this video at http://bloom.bg/1CXTeA3

    A `Grexit’ Would Make Economic Sense for Greece: Stein

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


  23. Good Morning!


  24. Craigs, I hope you took the money on /SI and ran…that's some drop!


  25. Phil/FXI

    Where are we at with these?  Sold half on that pop the other day, now looking like we should roll out since only a little time left on the May contracts.


  26. TSN 2.35% down today


  27. Good morning!  

    Brent is down 1% but our oils haven't caught up yet.  Dollar 98.53 has turned everything down a bit.  Silver $15.95 is now interesting as a long over that line (/SI). 


  28. Guns in the US/StJ – Hmm. Do you suppose those people who must have pistols for self-defense and stopping crime could switch to tasers? And on a mildly related topic, how high is TASR going to go on this run?


  29. TSN  / Yodi .. some story about bird flu case in Iowa might be hurting stock


  30. Tasers / Snow – Would make sense I guess… Not as glamorous though!


  31. /TXN

    Earnings after the close. I guess we just sit tight and see what happens.


  32. STP adjustments:

    EWJ – We have 100 May $13 puts at 0.32, now 0.12 so it's time to roll to the June $13 puts (0.21) for .09.  I know it's tedious but we're pretty damned sure EWJ will collapse – it's just a question of Yen (get it, Yen instead of "when"blush).  Until then, we have to keep investing in being in the right place and hoping it will eventually be the right time.   At the moment, the Sept $13 puts are 0.40 and, as you'll see, we'll spend another 0.20 to roll to those if we have to – as time goes by.

    FXI – Remember when we took the $1 off the table on half because we HAD to (since we had doubled down and that was better than even)?  Following that simple rule saved us from a lot of punishment as our now 30 FXI May $48 puts have dropped back to 0.38.  So, like FXI, a good time to improve our position and let's go up a notch to the June $50 puts at $1.58 and stick with 30 for now but I'd love to DD at $1 if FXI insists on going higher.  

    XRT – We can roll our Sept $100 puts ($4.50) to the Sept $104 puts ($6.50) for $2 so let's go for it.  When we get a bit of a drop, we'll sell some May puts to pay for it.  Currently the May $97 puts are 0.65 with a delta of 0.25 and support on XRT is $97.50 so $2.50 would add about 0.60 so let's say we'll sell the May $97 puts for $1.20 if we can.  

    TZA – Good time to roll our 100 Jan $9 calls ($2.05 to the Jan $7 calls ($3.05) as it's certainly worth it to spend $10,000 to buy $20,000 of intrinsic value, don't you think?  

    Now we're hedged more for the downside with our Portfolio showing $213,850 this morning (down $8K from the close on the pops).  By taking advantage of the pop to get MORE bearish (we got less bearish on Friday's drop), we set ourselves up to buy more longs for the LTP underneath our increased STP protection.

    Meanwhile, the LTP is chugging along at 48.6% ($743,226) with $758,885 of it in cash (our existing positions are down net $15,000). 


  33. Phil / TXN Good Morning – Thanks for the feedback on this one.  I Also noticed that over 2000 Jan 17 37 Call were traded yesterday at about 4.9/ SH.  We'll see how it goes


  34. From Briefing Trader :

    GILD

    Gilead Sciences: Momentum traders passing around activist chatter in GILD.


  35. Pharm….

         Can you check out ISCO ? Interesting stem cell play or should I rather play the lottery?


  36. JUNO halted on circuit breaker….

    ISCO/Tophy – I already own them….lots of them.  So, play the lottery with them, I guess…..????


  37. ISCO/ Pharm…So do I just worry about the dreaded burn rate


  38. Guns/StJ – LOL, 50% of the World's firearms goes with 50% of the World's military, I guess.  We're just those kind of people…

    TSN/Options – Down on bird flu scare means great time to get in.  

    That's not quite what planting trees is about.  The point of planting trees is what we do in the LTP, which is go for a series of conservative plays aimed at making 20% a year and cashing out ones that make too much too soon and adding to ones that go on sale (if we still like the Fundamentals).  

    The key to the process is planting many trees – which we do through selling puts to establish cheap entries, and then growing our positions over time by scaling in when cheap and scaling out when expensive (pruning).  

    Dividends and short options we sell are the fruit we collect each year.  We do not tend to gamble with our entries by trying to time them, as you are suggesting – other than the normal swing-timing we try to take advantage of when we enter positions.  Your way is riskier, this is a conservative portfolio.  We think TSN is undervalued so what short call would you sell?  We get paid $3.20 for selling the 2017 $45s, which give us $10 of upside while the July $40s are $1.10.  Should I take $2.10 less and cap my upside $5 lower in order to MAYBE get an extra $1.10 over 4 sales if everything else goes perfectly?  

    There's a value in NOT having to babysit positions.  There's a value in that extra $2.10 in cash, which gives you $4.10 in buying power that you can then use for something else.  We simply take advantage of that and, so far, we're up just shy of 50% in 16 months.  If you think you are better off gambling on short-term positions to "improve" your returns – feel free – I'll be very curious to see how it compares in the end. wink

    Putin/StJ – I like that take. 

    VZ/Maya – I don't have much of a preference.  Generally I like whichever one is cheaper at the time.  T's stock has been underperforming by about 10% over the past couple of years and, generally, they tend to get back together so, at the moment, I still like T better than VZ.   T, by the way, pays 5.2% so, if dividends are your thing — why not T?

    T can be bought for $32.70 and you can sell the 2017 $28 puts for $2.10 and the $32 calls for $2.45 for net $28.15/28.08 and your worst case is owning them for a 15% discount.  The dividend is $1.88, which is 6.6% of your $28.15 while you wait to see if you get called away for another $3.85 (13.6%) but, of course, the intention would be to roll.

    Of course, you don't NEED to own the stock, you can buy the 2017 $28 calls for $5 and sell the $32 calls for $3.50 and the $30 puts for $3 for a net 0.50 credit on the $4 spread so you make $4.50 at the same $32 with only the 1x exposure (net $31.50 though).  If T is, for example, at $28, you end up down $3.50 vs flat on the ownership trade but, of course, you could then DD at $28 and sell something long for $1.75 or better and you'd be all even again anyway.  

     Oil testing $58 yet again but Brent over $23 now so be careful if shorting.  

    FXI/Jeff – Yep, great plan!  

    TASR/Snow – They just keep getting more and more orders.  It's annoying because we don't have them at the moment.  They are only back on track (at $30) with their 1-year bull trend (up from $11 last July when I went blue in the face calling for a buy).  

    TASR/Pat – Hopefully they have found a bottom at $11.  There's not much to do, you sold the $13 puts for $3 so net $10 and you're fine there for now and then the issue is the long calls and you can spend about $1 to roll down to the $10s and I guess I would do that and then get the $1 back by selling the $15s (now $1.30) if TASR does go lower, to pay for the eventual roll to the $5s.  

    As a new play on TASR, I'm warming up to the short 2016 $13 puts at $3.25, buying the $10/17 bull call spread for net $2 for a $1.25 credit on the $7 spread and worst case is we own 1x of TASR for net $11.75.  Figure doing 10 of those is nothing as our obligation is $11,750 of TASR and, even if they went to $5, we could buy 2,000 more for $10,000 and average $7.25 on 3,000 – no big crisis.  The upside is $8,250 on $2,500 in margin – very efficient.  

    OK, I talked myself into it!  Let's add 10 of these to the LTP and Income Portfolios! 

    TXN/Batman – Weren't we talking about TSN?  Big difference!  

    JUNO/Pharm – Wheee, what fun!  

    Good call by Dave yesterday on Juno being a good short due to the lockup expiring on 85% of the shares.  


  39. LOL – they are ditching the Dollar again (98.18) to cover the selling in the indexes.  That's goosing oil but it's all BS.  


  40. ISCO – and a reverse split…..so, there is always an issue with these small biotechs and being diluted….


  41. LL -Initiated with a Buy at Cantor Fitzgerald.  Back at ya Whitney Tilson.


  42. Phil / TSN ( not TXN) on the recent option purchases.   i have a broken finger and am typing w/ one hand…  i need to reread more….


  43. Pharmboy 

    LBIO

    Lion Biotechnologies, Inc. LBIO

     Any interest?

    Thanks


  44. LL/Albo – Why do we have such a small position in the LTP?  Gld you mentioned it.  We have 10 2017 $30s we bought for $13.72 and they are now $10.56.  Against those we sold 5 of the $55 calls for $6.25 and those are now $3.77 and we also sold 5 $40 puts for $12.50 and they are now $11.60.  Best thing to do is roll our 10 $30s down to the $20s at $16 in the LTP so we spend $3,500 to buy $10,000 worth of intrinsic position.

    TSN/Batman – Good, I feel better then.  


  45. LL – In the $25KP, we have the Aug $34/May $43 bull call spread.  We bought the Aug $34s for $4, still $4 and we sold the May $43s for $2.70, now 0.18, so let's buy those back and see if we can sell something else on the next pop.  


  46. ECA upgraded yet again, we got in just in time:

    • Encana (ECA +0.6%) is upgraded to Overweight from Equal Weight with an $18 price target, up from $15, at Morgan Stanley, based on an improving asset base.
    • Stanley says ECA's asset base continues to improve as it becomes increasingly liquids weighted, rising from 10% in 2013 to an estimated 40% in 2016; the firm says ECA has the highest liquids growth among its U.S. peers, with a 37% compounded annual growth rate through 2018.
    • The firm sees liquids growth starting to outperform peers in the next 12 months with the potential of further non-core divestitures to de-leverage; "both are key to the re-rating potential of Encana into a liquids weighted E&P."

    Submitted on 2015/04/17 at 11:46 am

    UNG/BDC – We used to use CHK but they got strange.   ECA is next best gas play.

     At $13.07 you may as well own them for the 0.28 premium (which they'll raise if prices come back – it used to be 0.80) and you can then sell the 2017 $13 calls ($2.30) and the $15 puts ($4) for net $6.77/10.38 so worst case is 20% off on 2x and otherwise, called away at 100% at just $14.

    Nice Futures outcomes on /ES (2,100) and /TF (1,170) – still waiting for /CL to get real.

    On oil, they have narrowed the gap to $1 (down 0.50) from yesterday on some wild manipulation.  /CLK5 is up 0.44% while /CLM5 is down 0.47% and Brent is down 0.83%.  And THAT is how you get your rolling prices on the last day!  


  47. Gambling in Korea/all – this is strange. Korea's big international airport at Incheon has hooked up with an American Indian organization to set up a gambling resort. Gambling is illegal for Koreans, but there are numerous casinos set up for foreigners. The first such was Walker Hill in Seoul, set up in the 60s if I recall correctly, by dictator Park Junghee to fund his secret police after the national assembly refused to fund it. I recall CZR has been trying to get into Korea, maybe even have some casinos, but this is interesting.

    http://skift.com/2015/04/21/mohegan-sun-and-incheon-airport-to-collaborate-on-unique-gaming-resort/


  48. Phil

    I don't see the LL roll at 3.5 in TOS. It's more like 5.85 to roll to the 20  Maybe you were looking at rolling to the 25. That's 3.15. Is the roll worth doing at 5.85?


  49. phll I have 60 july 9 tza calls I should have cleared last Friday… would you suggest rolling that hedge also or to soon you thnink


  50. Short /NKD at 20,000 on a cross below with stops above? Thoughts?


    • The $13.8B iShares TIPS Bond ETF (NYSEARCA:TIP) saw $634M of inflows last week, the highest weekly amount since the fund's opening in 2003. The move came alongside the latest CPI report which showed core prices rising faster than expected for a 2nd straight month, as well as the continued bounce in crude – now up about 30% from its March low.
    • At the Barron's roundtable in January, Bill Gross singled out the Schwab U.S. TIPS ETF (NYSEARCA:SCHP) for gains, expecting a rebound in returns with just a modest reversal in the oil bear market.
    • Source: Barron's
    • The U.S. Department of Justice is now pushing for five banks, including JPMorgan (NYSE:JPM), Barclays (NYSE:BCS), Citigroup (NYSE:C), RBS (NYSE:RBS) and UBS (NYSE:UBS), to reach a joint mega settlement to allegations they manipulated the foreign exchange markets.
    • The deal would see some institutions pay about $1B each and is scheduled for mid-May,FT reports.
    • Last November, the banks (except Barclays) agreed to pay $4.3B to authorities in the U.S., U.K. and Switzerland in the first settlements announced in the forex investigation, although the DOJ was not included on that ticket.
    • With continued concerns over Greece, the euro slid overnight on growing worries that a cash-strapped Greece may default on its debt and eventually exit the single currency.
    • On Monday, Athens ordered public bodies such as state-owned companies and public pension funds to transfer their reserves to the central bank to help with cash squeezes and upcoming payments.
    • Creditors are also starting to lose their hope that Greece will be able to present detailed plans that would satisfy eurozone finance ministers ahead of their meeting in Riga on Friday.
    • The euro is -0.7% at $1.0667.

     

    • And why not, with the ECB pledging to buy €60B of it monthly for at least the next year-plus?
    • For the eurozone as a whole, government debt rose to a record 91.9% of GDP in 2014, up from 90.9% a year earlier. Greece naturally leads the way, with debt up to 177.1% of GDP from 175% in 2013. Since the last bailout to end all bailouts (2012), Greece's debt/GDP ratio is up a whopping 25 percentage points, and the country stands today on the verge of either bailout number three or another default and maybe exit from EMU.
    • Source, Bloomberg
    • Bill Gross is out on Twitter calling German 10-year Bunds – currently yielding 10 basis points – the short of a lifetime … Even better than the pound in 1993. The only question, he says, is timing. Another widowmaker trade?
    • GREK -3.7%, NBG -9.8%

    Weighing The Week Ahead: A Geopolitical Risk To U.S. Stocks?

    • China will need to continue to reform its capital markets to avert "boom-bust" scenarios, the chief executive of BlackRock said at a Credit Suisse conference in Singapore.
    • "By having a more robust capital market, it will mean we'll have less boom-bust. Right now, we are experiencing typical boom-bust. Let's hope it doesn't end poorly," said Larry Fink.
    • Chinese shares flew up again on Tuesday, after tumbling yesterday due to pressure from the country's recent move on margin trading.
    • Shanghai +1.8%; Hang Seng +2.6%.
    • "This round of market rally is clearly boosted by ample liquidity instead of strong fundamentals; bear in mind the sector is experiencing only single-digit growth."
    • Yesterday Daphne (OTCPK:DPNEFOTCPK:DPNEY) reported a 16% drop in same-store sales, sending shares down 14%

    What U.S. interest rate hikes will mean for China's economy

    • Russia's economy contracted about 2% last quarter on an annual basis, Prime Minister Dmitry Medvedev announced on Tuesday, blaming the slump on a plunge in oil prices, the ruble and sanctions imposed over Ukraine.
    • "Today we face not only short-term crisis effects: if external pressure increases while oil prices remain at an extremely low level…we’ll have to develop in a different economic reality," Medvedev said. The downturn was "most acute" at end-2014 and the start of this year, but the situation is now "stabilizing."
    • The decline in gross domestic product is the first since a contraction in 2009.
    • ETFs: RSXRUSLRUSSERUSRSXJRBL

    Slimming margins at Fifth Third

    • Net interest income of $852M down 5% Y/Y, with NIM of 2.86% down from 3.22%.
    • Noninterest income of $660M up 17% Y/Y. Mortgage banking net revenue of $86M up 21%. Originations of $1.8B vs. $1.7B.
    • Noninterest expense of $923M down 3% Y/Y. Efficiency ratio of 61% improves from 64.9%.
    • Average loans up 2%, with C&I lending up 3%, CRE and bankcard loans up 4% each.
    • CET1 ratio of 9.62% Tangible book value per share of $14.87 up from $13.40 a year ago.
    • Conference call at 9 ET
    • Previously: Fifth Third Bancorp EPS in-line, beats on revenue (April 21)
    • FITB flat premarket

    Travelers -2% after missing estimates; dividend and buyback boosted

    • Q1 operating income of $827M or $2.53 per share vs. $1.052B and $2.95 one year ago. Net written premiums of $5.897B flat. Operating ROE of 14.5% falls 330 basis points.
    • Quarterly dividend is boosted by 11% to $0.61 per share, and another $5B of buybacks is authorized.
    • Adjusted book value per share of $71.45 up 5% Y/Y.
    • Underlying combined ratio of 90.3% deteriorates from 88.2% a year ago.
    • Underwriting gain of $620M vs. $791M a year ago. Net investment income of $592M vs. $736M.
    • Conference call at 9 ET
    • Previously: The Travelers Companies misses by $0.01, misses on revenue (April 21)
    • TRV -2% premarket

    Ameritrade lower by 1.7% after sluggish quarter

    • Q1 net income of $189M or $0.35 per share vs. $194M and $0.35 one year ago.
    • Commission and transaction fees of $350M vs. $374M one year ago.
    • Net interest revenue of $149M vs. $146M. Insured deposit account fees of $205M vs. $202M. Investment product fees of $85M vs. $75M.
    • Total operating expenses of $507M vs. $489M.
    • Net new assets of $16.3B vs. $12.2B a year ago. Average client trades per day of 476,590 vs. 491,963.
    • Pre-tax margin of 35.7% vs. 39%. ROE of 15.7% vs. 16.9%.
    • Conference call at 8:30 ET
    • Previously: TD Ameritrade misses by $0.01, misses on revenue (April 21)
    • AMTD -1.7% premarket

    Iran looks to OPEC to clear way for more production

    • "We expect the members of OPEC to pave the ground for an increase of Iran's oil production that will reach global markets when sanctions are lifted," Iran's oil minister, Bijan Namdar Zanganeh, announced in Tehran today.
    • Once OPEC's second-largest producer after Saudi Arabia, Iran hopes to boost crude exports by as much as 1M bpd if it finalizes a nuclear agreement with six major powers by June 30.
    • In response to the Iranian crude which could come back on the market, Senator Lisa Murkowski of Alaska plans to offer energy legislation this year that would lift the ban on U.S. oil exports, calling them "sanction against ourselves."

     

    • BP execs reportedly are concerned the company is vulnerable to a takeover bid, and they are said to have stepped up internal reviews of takeover scenarios and war-gamed defense strategies with advisers from firms including Morgan Stanley.
    • While a move for BP may seem unlikely because of still-unknown legal liabilities from the 2010 Gulf of Mexico oil spill, there’s at least one good reason for BP's paranoia: Before ruling it out by going for BG, Royal Dutch Shell was said to have taken a hard look at buying BP.
    • Even a slimmed-down BP still has plenty to attract potential acquirers, including strong deepwater prospects in Angola and the Gulf of Mexico, a refining business that has outperformed peers, and an industry-leading trading outfit.
    • BP views Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX) as the only realistic predators remaining, according to the report.

     

    • Baker Hughes (NYSE:BHI) -1.2% premarket after reporting Q1 results that came in well below expectations, and the company also says it has cut 17% of its workforce.
    • BHI reported a non-GAAP loss of $0.07 but there were additional charges of $0.30 which the company decided not to classify as adjustments, so it is not clear if this is comparable to consensus; revenues fell 20% Y/Y to $4.59B vs. the $5.39B consensus.
    • BHI says it is increasing its job cuts to 10.5K workers, adding to its planned layoffs from the 7K job cut it announced earlier this year.
    • BHI also says it closed or consolidated 140 facilities around the world during Q1 and idled excess inventory and assets; BHI believes the combined cost cutting efforts should save more than $700M/year.
    • CEO Martin Craighead says BHI expects the downturn to continue into Q2 and will make additional cuts if needed; the company estimates that 20% of the wells recently drilled in the U.S. have not been through completion stages.
    • Meanwhile, BHI says it is moving forward with its deal to be bought by Halliburton (NYSE:HAL).

     

    • Arch Coal (ACI -7.5%) is sharply lower after reporting a bigger than expected Q1 loss and cutting its full-year production forecast for both power-generating and steel-making coal.
    • ACI says its average sales price for coal fell to $19.18/ton during Q1 from $20.09 a year earlier, but Q1 total operating costs fell to $18.55/ton from $21.70 a year ago.
    • In its FY 2015 outlook, ACI says it now expects thermal coal production of 120M-130M tons, down from 124M-136M tons it forecast in February, and sees its output for metallurgical coal at 6M-6.8M tons from 6.3M-7M tons earlier.
    • ACI also lowers its cash cost per ton guidance range for Appalachian coal to $56.75-$59.75 and maintains its cash cost per ton estimate for Powder River production of $10.50-$11.00.
    • As of March 31, ACI says it had available liquidity of $1.1B, as it is "focused on managing our available liquidity through these difficult conditions." - ie. "trying not to go bankrupt." 
    • Rio Tinto (NYSE:RIO) -1.7% premarket after announcing a sharp drop in its Q1 iron ore shipments, but the miner says it will compensate for the weaker start to 2015 to meet its previously announced full-year production target of up to 350M metric tons.
    • Rio reported Q1 iron ore shipments of 72.5M metric tons, down 12% Q/Q and missing some analyst forecasts of above 80M, but Rio said wet weather, the impact of a cyclone and a train derailment combined to hurt output and shipments; when compared to the same quarter a year earlier, shipments were rose 9% while production jumped 12% to 74.7M metric tons.
    • Rio continues to defend its widely criticized strategy to keep increasing production, as top iron ore exec Andrew Harding argues it is operating in "a competitive, international marketplace” and that other miners would increase their output if Rio did not; Rio’s 2015 target of 350M metric tons is a sharp increase from the 303M metric tons it shipped in 2014.
    • Earlier: Turquoise Hill posts Q1 Oyu Tolgoi production

    DuPont beats on profit, misses on revenue

    • Net income of $1.03B vs. $1.44B in the same quarter a year ago. Excluding pension costs and other items, operating earnings were $1.34 a share, down from $1.58 per share, the prior year.
    • Cost reductions increased earnings by $0.10 per share, however, helping to make up for a 10% sales drop at DuPont's (NYSE:DD) agriculture unit, the company's largest business.
    • Net sales fell 9% to $9.17B, primarily due to a decline in volumes and negative currency impacts.
    • DuPont says it's now on track to spin off its performance chemicals unit the middle of this year and expects to report full-year operating earnings at the low end of its $4.00-$4.20 per share range (below analyst projections of $4.46).
    • The results also come just weeks ahead of a shareholder vote on adding nominees from Trian Fund Management, headed by Nelson Peltz, who has argued the company's share value could effectively double if it split itself into three.
    • DD -1.6% premarket
    • Q1 results

    Lockheed Martin beats by $0.24, misses on revenue

    • Lockheed Martin (NYSE:LMT): Q1 EPS of $2.74 beats by $0.24.
    • Revenue of $10.11B (-5.1% Y/Y) misses by $130M.
    • Lockheed Martin (NYSE:LMT) reports Q1 net profit of $878M, or $2.74 per share vs. $933M, or $2.87 per share a year ago.
    • Sales in Lockheed's aeronautics business dropped 7.4% to $3.13B, while its information systems and missiles and fire control units also fell due to weak U.S. defense spending and fewer jet deliveries.
    • The company raised its 2015 earnings forecast to $10.85-$11.15 per share from $10.80-$11.10, and reiterated its revenue forecast of $43.5B-$45B.
    • LMT +0.7% premarket
    • Q1 results
    • Press Release
    • Net profit of $1.43B, or $1.58 per share vs. $1.21B, or $1.32 a share, in the same period a year ago. Excluding non-recurring items, adjusted earnings per share were $1.51.
    • Otis elevator orders fell 7.1%, sales at Pratt & Whitney grew less than 1% to $3.33B, and sales at Sikorsky (which the company has been in talks about selling) fell 6.9% to $1.27B.
    • Equipment orders at its UTC Climate, Controls & Security business were about flat at $3.85B.
    • United Tech (NYSE:UTX) also affirmed its 2015 sales target of $65B-$66B and EPS guidance of $6.85-$7.05.
    • UTX +1.1% premarket
    • Q1 results

    Volume slips 1.3% for Harley-Davidson in Q1

    • Harley-Davidson (NYSE:HOG) reports volume fell 1.3% to 56,661 new motorcycles units in Q1.
    • Volume was down 0.7% in the U.S. to 35,488 motorcycles amid "aggressive discounting.
    • Parts and accessories revenue -7.2% to $183.87M.
    • Gross margin for the motorcycles segment +140 bps to 39.1%.
    • Operating margin +80 bps to 22.9%.
    • Guidance: The company expects shipment growth of 2% to 4% for the year, down from a prior outlook of 4% to 6%. Operating margin of 18% to 19% seen for the full year.
    • HOG +1.00% premarket to $62.39.

    ITW drops after cutting guidance

    • Net profit of $458M, or $1.21 per share vs. $473M, or $1.01 per share, in the same quarter a year ago.
    • Revenue decreased 6.4% to $3.34B on negative currency impacts, while organic revenue rose 1% reflecting lower equipment demand and continued efforts to simplify its business lineup. Operating margin rose to 20.9% from 18.7%.
    • The company cut its per-share 2015 earnings estimate to $5.00-$5.20 and underlying revenue growth of 1%-2% from per-share profit of $5.15-$5.35 and core revenue growth of 2.5%-3.5%.
    • For the current quarter, the company forecast per-share earnings of $1.22-$1.30 vs. a $1.36 consensus.
    • ITW -3.1% premarket
    • Q1 results

    More on Under Armour's Q1

    • Under Armour (NYSE:UA) reports direct-to-consumer revenue rose 21% Y/Y in Q1 to now rep 25% of total sales for the company.
    • International revenue +74.0% to $96.59M.
    • Apparel sales +20.9% to $555.46M.
    • Footwear revenue +41.1% to $160.97M, powered by new basketball and running model introductions.
    • Accessories sales +22.5% to $63.15M.
    • Gross profit rate remained constant at 46.9%.
    • Operating margin rate +80 bps to 3.4%.
    • Inventory +22.38% to $577.95M.
    • FY2015 Guidance: Net revenues: ~3.78B (+23%); Operating income: $400M to $408M (+13% to +15%);
    • UA -4.68% premarket.

    McDonald's tests all-day breakfast in San Diego

    • McDonald's (NYSE:MCD) is testing all-day breakfast at 94 restaurants in San Diego this week.
    • The initiative from the restaurant operator is seen as a measure to broaden the brand's appeal with millennials.
    • The company will limit the breakfast menu past 10:30 a.m. to certain items with grill space tight.
    • A national roll-out is possible, say execs.
    • Breakfast accounts for 25% of the company's sales and it held market share in the daypart even with U.S. comparable-store sales in decline last year.

    Comps improve at Brinker International in FQ3

    • Brinker International (NYSE:EAT) reports comparable restaurant sales at company-owned outlets improved by 1.7% Y/Y in FQ3 vs. +0.7% a year ago.
    • The comp was +1.9% at Chili's and +0.1% at Maggiano's during the quarter with both brands gaining on pricing.
    • The company improved its restaurant operating margin by 30 bps to 18.9% on some sales leverage with costs. Food commodity inflation was offset by some menu price hikes.
    • Previously: Brinker EPS in-line, misses on revenue
    • Stifel Nicolaus lowers its rating on Shake Shack (NYSE:SHAK) to a Hold rating after having the burger chain slotted at Buy.
    • The investment firm completely removes its price target of $50.
    • Shake Shack reached a post-IPO high of $63.72 yesterday.
    • SHAK -1.41% premarket to $62.75.
    • Poultry stocks are skittish in early trading after a large chicken flock in Iowa is reported to be infected with cases of the avian influenza.
    • The virus is believed to be transmitted to farms in the Midwest by ducks and geese traveling along migratory routes.
    • On watch: Tyson Foods (NYSE:TSN) -0.8%, Pilgrim's Pride (NASDAQ:PPC) -0.6%, Sanderson Farms (NASDAQ:SAFM) -0.4%, Hormel (NYSE:HRL) -0.9%.
    • Hormel Foods (NYSE:HRL) discloses sales volume could be lower this year due to outbreaks of the avian influenza.
    • The company says several of its turkey farms have been impacted.
    • "Tight meat supplies and operational challenges will pressure earnings in the back half of our fiscal year," warns management.
    • Previously: Poultry stocks on watch after bird flu hits large Iowa farm
    • HRL -0.90% premarket.

    Cantor Fitzgerald buys into Lumber Liquidators value proposition

    • Cantor Fitzgerald initiates coverage on Lumber Liquidators (LL +3.2%) with a Buy rating and $45 price target.
    • "We believe the recent controversy surrounding the company has created an opportunity to invest in a differentiated, growth-driven business model at an attractive valuation," reads the note from analysts Laura Champine and Jason Smith.
    • Though acknowledging the "real risk" that federal testing on laminate products will hurt Lumber Liquidators, the Cantor team see value at current levels.
    • Whitney Tilson has a series of article on SA laying out his bear thesis on LL with plenty of exclamation points.

    Teva proposes to acquire Mylan for $82/share in cash and stock

     
    • 50% stock and 50% cash
    • The proposal gives Mylan (NASDAQ:MYL) shareholders a 37.7% premium to the stock price of Mylan on April 7, 2015, the last day of trading prior to Mylan's press release regarding its unsolicited proposal for Perrigo (NYSE:PRGO), and a 48.3% premium to the unaffected stock price of Mylan on March 10, 2015, which is the last day of trading prior to widespread speculation of a transaction between Teva (NYSE:TEVA) and Mylan.
    • Expected to be significantly accretive to Teva non-GAAP EPS, starting in the mid-teens in year 1 and approaching 30% by year 3.
    • Teva/Mylan product offerings would create a combined pipeline of over 400 pending ANDAs and over 80 first-to-files in the U.S.
    • MYL +9.3% premarket to $74.40. TEVA +2.8% premarket.
    • Source: Press Release
    • Previously: Bloomberg: Teva offer for Mylan could come today (Apr. 21)
    • Previously: Mylan says rumored Teva marriage would not makes sense (Apr. 20)
    • Related: Why Does Mylan Want To Buy Perrigo? (Apr. 9)

    Inovio Pharma starts Phase 1 study in hepatitis B

    • Inovio Pharmaceuticals (NASDAQ:INOinitiates a Phase 1 dose escalation study to evaluate the safety, tolerability and immunogenicity of its DNA immunotherapy, INO-1800, in patients with chronic hepatitis B infection. The action triggers a $3M milestone payment from co-developer Roche (OTCQX:RHHBY).
    • The trial will assess INO-1800 alone or in combination with INO-9112, Inovio's IL-12-based immune activator. All patients will also be treated with standard-of-care antiviral therapies.
    • In preclinical studies, INO-1800 generated strong T-cell and antibody responses that led to the elimination of targeted liver cells in mice. Investigators observed that hepatitis-B-specific T-cells exhibited a killing function and could migrate to and remain in the liver where they cause clearance of target cells without evidence of liver injury.
    • About 240M people worldwide are infected with hepatitis B, contributing to 1M deaths per year. Liver cancer, a common progression of chronic hep B infection, strikes 600K people every year, killing most within five years.

    Rambus +12.3%; 2015 guidance reiterated, deal pipeline strong

    • Rambus' (NASDAQ:RMBS) Q2 revenue guidance of $70M-$74M is below a $75.1M consensus. However, the company used its CC (transcript) to reiterate full-year sales guidance of $300M-$315M (consensus is at $305.8M).
    • Also: When asked about the full-year guidance, CFO Satish Rishi stated Rambus is working on a couple of major licensing deals, as well as "some additional projects which could have large upfront payment."
    • CEO Ron Black noted 3 memory/serial link licensing deals were struck in Q1 (includingthe IBM deal), and that a new version of Rambus' CryptoManager chip security platform is being prepped that supports encryption key provisioning. Rambus' LED lighting unit shipped its millionth light guide during the quarter.
    • Royalty revenue fell 9% Y/Y to $67M, thanks in part to declining PS3 royalties. Contract/other revenue rose 28% to $6M. Costs/expenses (non-GAAP) rose 2% to $44.9M. Rambus ended Q1 with $317.8M in cash (compares with a $1.65B market cap).
    • Q1 resultsPR
    • Voltari (NASDAQ:VLTC) has refused to take a breather since Carl Icahn disclosed a 52.3% stake on March 31. The mobile ad service provider closed at $1.01 prior to the disclosure; it's currently around $14, after retreating a bit from an intraday high of $14.77.
    • Back on April 6, when Voltari was still at $2.63, SA author Edward Vranic argued the company's massive NOLs (worth $16.20/share) could be valuable in the hands of the right acquirer. He added shareholders "can expect to see only a fraction of the value of the deferred tax assets in a buyout scenario."
    • 1. Flat is the new up: "Revenue numbers dropped for the 12th consecutive quarter and the company managed to miss estimates this quarter too. But CEO Ginni Rometty noted that if you exclude results from foreign currency exchange as well as businesses that IBM will be divesting itself of overall revenue growth was flat."
    • 2. Cloud computing results were mostly positive: "The cloud business was generating revenue at an annualized rate of $3.8 billion, up from $2.3 billion a year ago. It’s a move in the right direction but for a company that generates around $90 billion a year in revenue the cloud services business isn’t moving the needle just yet."
    • 3. IBM is a slow ship to turn: "Rometty is in her fourth year as CEO and while she has doing some things to spread out and revive IBM’s revenue streams the results have been slow in coming."
    • Source: Dave Dierking
    • Previously: International Business Machines beats by $0.09, misses on revenue (Apr. 20)
    • Related: International Business Machines' (NYSE:IBM) Q1 2015 Results – Earnings Call Transcript (Apr. 20)
    • Related: IBM Stock And The Case For Exceptional Patience (Apr. 20)

    SAP revenue tops estimates on weak euro

    • With a weaker euro boosting revenue from markets including the U.S., SAP reported first-quarter sales that topped analysts' estimates, rising 22% to €4.5B.
    • Revenue from software licenses and support rose 16% to €3.15B, while sales from cloud subscriptions and support more than doubled to €509M.
    • "Our plan is to be a growth company," CEO Bill McDermott said on a conference call. "We have no interest in announcing that we didn’t grow and then detailing the costs we cut to hold expenses in line."
    • Excluding the boost from currency swings, operating profit and profit margins declined during the quarter, mainly due to acquisitions including Concur Technologies and Fieldglass.
    • SAP also reiterated its full-year forecasts of for non-IFRS operating profit of between €5.6B-€5.9B at constant currencies, and non-IFRS revenue for cloud subscriptions and support of €1.95B-€2.05B.
    • SAP +1.4% premarket

    Morgan Stanley in for the long haul on Netflix

    • Morgan Stanley says it will press its bet on Netflix (NASDAQ:NFLX) with a reiterated Overweight rating even after the post-earnings run-up (+66% YTD now) in share price.
    • The investment firm says the deepening of Netflix's global moat gives it long-term pricing upside with the 2-hour per day viewing average of users providing the backing.
    • The forecast on Netflix from MS calls for a penetration rate of 55% of broadband households and 50%-55% of household TVs by 2025.
    • Analysts also draws out that Netflix spends less on content per hour viewed than broadcast networks and is poised to shrink that ratio further.
    • Morgan has a bull-case price target of $775 on NFLX (13X EV/2025 EPS) which factors in buybacks beginning in 2017. The base PT is $620 using a projection of 100M global subs by 2020, while a bear case PT of $345 factors in pricing pressure in the U.S. and stumbles in some international markets.
    • NFLX +0.11% premarket to $568.04.
    • Chinese telecom providers are up for a second straight day following China's stimulus.
    • In U.S. trading, China Mobile (NYSE:CHL) is up 4.6%; China Telecom (NYSE:CHA) is up 1.8%; and China Unicom (NYSE:CHU) is up 3.4%.
    • China Mobile had previously jumped 7.5% in Hong Kong, while China Unicom had gained 3.6% there.
    • In March operations, China Unicom pointed to net added mobile subscribers of 1.6M to bring its total there to 294.75M; net added fixed-line broadband subscribers of 375K to bring that total to 69.6M; and a net loss in local access subscribers of 579K to bring that total down to 80.3M.
    • China Telecom signed a deal with payments platform SmartTrans to bring financial news and info to subscribers through its "Love Finance" offering, to be promoted through mobile news, texts and WAP channels. Subscribers to that product will pay 5 yuan/month.
    • Previously: Chinese wireless firms up on PBOC easing; China Mobile notes Q1 results(Apr. 20 2015)
    • Verizon (NYSE:VZ) is flat premarket after a first quarter where it added 565K net retail postpaid wireless connections (up 4.8% Y/Y) and churn fell back to 1.03%, from a prior-year 1.07% and Q4's 1.14%.
    • On an adjusted basis, EPS of $1.02 was up from last year's $0.84 after accounting for gains from the company's acquisition of full ownership of Verizon Wireless in February 2014. EBITDA of $11.95B beat expectations by $420.4M.
    • Revenue by segment: Wireless, $22.3B (up 6.9%; Service revenue of $17.9B, equipment revenue of $3.4B); Wireline, $9.5B (down 2%; Mass market revenue of $4.6B, Global Enterprise of $3.3B, Global Wholesale of $1.5B).
    • Operating income of $8B was up 11.2%, and operating income margin up to 24.9% from the prior year's 23.2%. EBITDA margin rose to 37.4% from 36.7%.
    • The company's monetization of tower assets led cash flow from operations to rise to $10.2B from $7.1B, but excluding tower impact, free cash flow was up to $4.2B from $3B.
    • FiOS revenues were up 10.2% Y/Y, to $3.35B. Verizon added 133K net new FiOS Internet and 90K net new FiOS Video connections to bring totals to 6.7M Internet and 5.7M Video connections.
    • Verizon's retail postpaid average revenue per account fell to $156.14 from $159.67. Smartphone postpaid accounts rose to 91.4% of phones activated.
    • Press release

    Yahoo, Microsoft add termination clause to search pact

    • According to a new filing, Yahoo (NASDAQ:YHOO) and Microsoft (NASDAQ:MSFT) have amended the terms of their 10-year search pact to allow either party terminate their agreement at any point in time on or after Oct. 1.
    • Under the original deal, which began in February 2010, Yahoo could only terminate the pact if the revenue from each search failed to meet certain financial-performance benchmarks.
    • The two also restructured the agreement's search terms last week, stating the partnership is non-exclusive for both desktop and mobile.
    • Yahoo reports earnings after the bell today.
    • Previously: Microsoft, Yahoo restructure search pact; no PC/mobile exclusivity (Apr. 16 2015)

  51. Albo/GILD – rumors of what? there too big to get taken over $155B. Any chatter about what's going on?


  52. Phram: TLOG: interesting story

    human clinicals don't even begin until Dec 2014, so plenty of time to watch on the sidelines


  53. Casino/Snow – That's very interesting.  I guess they have great experience getting around regulations as they were one of the first to push through in the US.  

    LL/LTP, Gerry – I don't know what the prices were when I looked but the 2017 $30s were last sold at $10.20 at 11:40 and the $20s were last sold at $15.91 at the same time so the current roll is $5.70 but I'd offer $15.70 for the $20s, which is fair and ask $11 for the $30s and knock it down to $4.70.  I'd pay up to $5 for $10 but not more.  

    TZA/Tri – Ouch, big change!  Yes, I'd roll as we still love them for long-term protection but it's a hedge (we expect to lose on), not a bet.  

    /NKD/Sun – If it fails 20,000, it's a nice short with tight stops above but only if it fails.  


  54. Just noticed TSLA popped today.  Only news I see is a downgrade.  Am I missing something?


  55. US$ Currency impact on international companies. Whilst understandably we cynically question the relative strength of revenues and earnings where CEOs attribute the challenging international environments due to currency headwinds, we should pause a moment and think about how companies actually measure performance internally. Managers tend to be measured on currency neutral performance, on the basis that changes in exchange rates are beyond the control of most managers (hedging is an exception, but that is another subject) and they should not be rewarded when exchange rates move in the companies favour and they should not be penalized when currency 'headwinds' hit. It should not be a surprise when CEOs emphasize currency neutral results to allow reasonably like for like comparisons. 


  56. Phil, FB reports tomorrow. What do think. I have +10 jan16 65 call and -20 jun15 85's

    Was looking at calendars for earnings but I'm betting you say to sell long calls and buy new 2017 bull call spread


  57. webinar time


  58. XRT – Anyone get the roll for $2? I'm seeing 2.28/2.60 on TOS.


  59. TSLA/Rustle – They are still milking that revalation that GOOG was thinking of buying them.  

    Currencies/Winston – Yes, but if you are excusing poor earnings due to currency issues and there's no sign that the currency issues will correct in the near future – then peraps you are being too optimistic with your annual guidance as well.  

    FB/JMD – I don't think on them, too random.  Should be good though.  

    Webinar time!

    And what Mkucstars said!  


  60. Currencies/Correction – without wishing to generalize, I believe the corporate perspective for international companies on currencies is that in the long run currencies are a wash. Obviously, the stronger the balance sheet the longer the definition of 'long run' can be


  61. LBIO/qc – well, KITE, JUNO, etc are all in the 'space' to some extent.  I like them better … but these guys are ok.  Seems a bit on the less expensive side compared to the above.  But no options.

    BDC…very interesting.  Maybe TEVA and MYL can combo that?  LOL.  Also, OREX is cratering because of an ANDA (generic combo pill being filed for weight loss).  I always said, do not invest in companies that repurpose drugs, b'c generics will come in an stomp over you….


  62. HOG – whacked down to my cost basis in existing covered stock position. added a diagonal Jan 45 long call, short Jun 57.5 call @ net 11.42. gives a 10% return in 59 days and can roll out or cover again till taken or best case get to exercise in January. worst case, close out whole position if loses the weekly 200MA


  63. So, in the Webinar, we discussed playing MYL on the TEVA offer.  The 2017 $65/75 bull call spread is $6 and you can sell the $60 puts for $3.50 to net $2.50 on the $10 spread.  Like BHI, if the deal closes early – you get paid early (offer is $85).  Let's put 5 in the LTP.  


  64. TRV, DD are tempting dips to buy.  What else is going to go on sale this earnings period!?


  65. BDC – Sorry, I've been away from my computer, and didn't see your earlier post.  The only thing I saw today on GILD was a short mention on Briefing Trader that there was some talk about activist interest in the stock.  Nothing further has come out on it.


  66. I'm loving whatever it is !


  67. GILD is said to be in the works with VRTX…..LOL.  Rumour dejour….VRTX makes $0.  Mkt Cap is $31B.  Holy crap…I am in such the right business now.  Crowd sourcing for biotechs is up next.


  68. XRT/Dave – It's hard to get your price when you ask for the net roll.  When you have a stock that's moving in a channel like XRT, you need to try to sell the Sept $100 puts we have when it's going down (prices have been ranging from $4.60 to $5.20) and on the Sept $104 puts we want to buy, we try to buy while it's going up (holding more steady at $6.85).  The bid/ask on the $100 puts is $4.40/4.70 at $99.95 and the bid/ask on the $104 puts is $6.60/7.05 so, rather than offer net $2, you can ask for $4.70 for the $100 puts and offer $6.70 for the $104 puts and see which fills first.  

    As with our Futures trading – a lot of these bids and asks aren't even real – they are just set by the Market Maker and can be trumped by your actual offers.  

    Currencies/Winston – And usually they are a wash but what happens when they are not?  Japan, for example.  They keep pretending things are better than they are, year after year and, rather than own up to the crisis, the country slips 250% of their GDP into debt.  Maybe it will never blow up in their faces – not very good if it does, though.  

    HOG/Scott – Not terrible numbers but not encouraging and we only like them when they are cheap ($50 or less).  

    BNO ended up down 2%, along with /CLM5 but /CLK5 officially finished down just 1.42% and yes, they did stop trading at 2:35 (someone in the Webinar thought 5:15). 


  69. Bots are reading twitter folks…so, start your engines…because this is getting to be a real issue. 


  70. Bots/Pharm – I love it.  They are going to make some epic mistakes we can take advantage of.  


  71. Yeah, and that is when I want to be short.  Kinda like now, but waiting until this the levee breaks.


  72. CELG is giving up all the gains.  DD on the May 110 Ps.


  73. From Bloomberg, Apr 21, 2015, 1:12:19 PM

     

    A U.K. futures trader contributed to the May 2010 flash crash by engaging in illegal bait-and-switch practices, according to U.S. authorities.

    To read the entire article, go to http://bloom.bg/1DJnL2Q

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


  74. From Bloomberg, Apr 21, 2015, 9:00:03 AM

     

     

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

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


  75. From Bloomberg, Apr 21, 2015, 12:00:01 PM

     

    China’s first developer bond default gave global funds a $1 billion-plus lesson. Investors just wish they could understand what it was all about.

    To read the entire article, go to http://bloom.bg/1J6QqU1

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


  76. From Bloomberg, Apr 21, 2015, 11:00:04 AM

      RE/MAX Holdings Inc. signage is displayed outside of an open house in Redondo Beach, California, U.S., on Saturday, Feb. 14, 2015. The National Association of Realtors is scheduled to release existing home sales figures on Feb. 23. Photographer: Patrick T. Fallon/Bloomberg

    The Federal Reserve is preparing to raise its benchmark interest rate for the first time since 2006. Yet the gradually healing housing industry — one of the biggest beneficiaries of rock-bottom borrowing costs in this economic recovery — isn’t panicking. 

    To read the entire article, go to http://bloom.bg/1DIN59h

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


  77. From Bloomberg, Apr 21, 2015, 2:14:03 PM

     

    The Saudi-led coalition intervening in Yemen’s civil war called a halt to its campaign of airstrikes, saying their goals were achieved and the focus will move to reviving talks on a political settlement.

    To read the entire article, go to http://bloom.bg/1DJAuT9

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


  78. I'm going to add another small momentum strangle play.  This time on CMG.  I shorted the May $750, and the June $600 Put.  Just one contract each.  For a credit of 11.59.  Earnings are tonight.  I currently have strangles on the following stocks (AMZN, BIDU, CMG, NFLX, and TSLA)  all just 1 contract each.  Stay small.  Stay alive.


  79. From Bloomberg, Apr 21, 2015, 1:54:52 PM

      Rex Tillerson, chief executive officer of Exxon Mobil Corp., said he doesn’t think OPEC is at war with U.S. shale. Photographer: F. Carter Smith/Bloomberg

    OPEC’s refusal to curb output in response to the collapse in crude prices is an attempt to find the most economic price for oil, not an attack on U.S. shale drillers, said Exxon Mobil Corp. Chief Executive Officer Rex Tillerson.

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

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


  80. As usual, better volume on a selling day than the buying day before.  

    • The 2016 hydrogen-powered 2016 Toyota Mirai receives a favorable review fromConsumer Reports in a first-look test drive of the next-gen model.
    • The Mirai has a range of 300 miles and drives "pretty much like any other car", notes CR.
    • The Mirai will roll-out nationally in Japan this year, but only in small pockets of the U.S. near hydrogen charging stations.
    • The publication notes the allure of free fueling for three years takes some of the sting out of the $499 per month lease price.
    • Citing survey results from 62 3D printing resellers and service bureau owners, Piper thinks the 3D printing industry saw a "modest downtick" in Q1, with "much more aggressive sales tactics" and "creative financing" used towards the end of the quarter.
    • The survey pointed to poor demand for 3D Systems' (NYSE:DDD) products, with resellers unhappy about both demand and 3D's channel management.
    • Unlike prior quarters, the survey didn't point to above-plan Stratasys (NASDAQ:SSYS) results. Piper still thinks the company can hit Q1 consensus estimates, but no longer considers its guidance conservative.
    • 3D and Stratasys have sold off in spite of a 0.5% gain for the Nasdaq.
    • Previously: Canalys expects 56% 2015 3D printing industry growth
    • ARM (NASDAQ:ARMH) is less than $1 away from a 52-week high of $54.64 after beating Q1 revenue estimates on the back of a 31% Y/Y increase in processor royalty revenue (26% excluding a one-time year-ago event) to $167.5M, a sharp acceleration from Q4's 16% growth. Physical IP royalty revenue rose 5% to $23.9M.
    • Royalties were collected on the Q4 shipment of 3.8B ARM-based chips (+31% Y/Y). Both strong mobile chip sales (aided by smartphone growth and the end of an inventory correction) and a 40% increase in embedded shipments (microcontrollers and smart cards were "particularly strong") played a role.
    • Licensing revenue was softer, growing only 3% to $133.2M. Processor licensing fell 2% to £109.3M; physical IP licensing grew 31% to $23.9M. 30 processor licenses were signed (5 from new clients), down from 53 in Q4 and up from 26 a year ago. ARM still expects 5%-10% annual license revenue growth "in the medium term."
    • Software/tool revenue fell 9% to $14.7M; service revenue rose 6% to $15.6M. Operating expenses rose 19% Y/Y to £100M ($149M), with headcount rising 15% to 3,397. Free cash flow totaled £68.5M ($102M).
    • Mobile/connectivity products made up 46% of processor shipments, embedded 34%, enterprise 14%, and home products 6%. The high-end Cortex-A CPU core series accounted for 18% of shipments, and the low-power Cortex-M 43%. 8 Cortex-A and 16 Cortex-M licenses were respectively taken out, as were Mali GPU core licenses a 1 costly architectural license.
    • ARM expects Q2 revenue to be "in line with current market expectations." Royalties are expected to drop Q/Q due to seasonality.
    • Q1 resultsPR (.pdf), slides (.pdf)
    • Exxon Mobil's (XOM -0.4%) Rex Tillerson predicts oil prices will remain low over the next few years, but says the energy industry is at a “turning point” and will show its resiliency in the current down cycle.
    • The CEO says in the keynote address at the IHS Energy CERAWeek conference in Houston that the oil industry could behave the same way U.S. shale gas did, when a significant decline in rig activity in prior years did not result in a drop in production capacity, thanks in part to improvements in efficiency.
    • Government regulators need to give oil companies the freedom to innovate to enable “safer, more secure and more efficient production,” Tillerson says, citing government oversight of fracking, a technique he says has proven effective and safe in the most delicate ecosystems.
    • Tillerson says the government should open up the U.S. Arctic to oil production, approve infrastructure projects such as the Keystone XL pipeline, and lift the decades-old ban on crude oil exports from the U.S.; the CEO says such policies would lead to more investment, which in turn would lead to more advanced technology.

     

    • Markets make opinions, and oil's sizable bounce over the past month – 30% and counting – has the team at JPMorgan seeing "signs of stability and modest upside" for black gold.
    • "The bottoming-out phase for oil prices has occurred more quickly than anticipated driven by Iraq’s production shortfall during Q1, stronger-than-expected refinery runs absorbing surplus crude supplies, and rising geopolitical tensions centered on the conflict intensifying in Yemen," says Joyce Chang, head of global research at the bank, who also sees stronger demand growth, particularly towards year-end.
    • Source: Barron's
    • Previously: Baker Hughes increases layoffs to 10,500 (April 21)
    • Oil's about unchanged on the session at $56.30 per barrel.

     

    • Capital spending by utility companies has soared across the U.S. – and so have customers' bills – despite the lower cost of natural gas, the main fuel used to generate electricity, WSJ reports.
    • Annual capex by investor-owned utility companies has climbed to $103B in 2014 from $41B in 2004, while U.S. residential electricity prices have jumped 39% over the same period; the average price of a kilowatt-hour of electricity rose 3.1% last year to $0.125/kwh, far above the rate of inflation.
    • Experts say there are several reasons for the surge in spending – including environmental mandates and the need to protect the grid against storms – but there's another major reason: It actually boosts their bottom lines as a result of a regulatory system that turns corporate accounting on its head.
    • It is now common for utilities’ allowable profit to be capped at ~10% of the shareholders’ equity that they have tied up in transmission lines, power plants and other assets – so the more they spend, the more profits they earn, which critics say can prompt spending on projects that may not be necessary or to choose high-cost alternatives over lower-cost ones.

     

    • Raymond James doubles down on its negative outlook for offshore drilling contractors, as the firm cites the lack of new contracts and the need for a much more significant move in oil prices to materially change the sector's landscape.
    • The firm says the current contracting rate trends well below its expected pace and even below 2009 levels as the desire to pursue further activity skids to a halt, and believes that 2016 consensus estimates have substantial room for downward earnings revisions; including contract cancellations, the sector actually experienced negative incremental demand during the Q1.
    • Raymond James sees the average offshore rig count declining by 13% in 2016 and a further 4% in 2017; even with cost-cutting efforts, it expects the average uncontracted rig to lose money as leading edge dayrates will flirt with risked breakeven levels with only minimal recovery in the next two years given the levels of excess supply.
    • Offshore drillers are lower today: ORIG -5.8%, RIG -4.5%, SDRL -4.1%, NE -2.8%, ESV-2.8%, DO -2.1%, ATW -2.1%, PACD -2%, RDC -1.9%.
    • Caesars Entertainment (CZR -3.8%) and Caesars Acquisition Company (CACQ -4%) slide again as concerns mount over debt negotiations with lenders.
    • The holding company has until May 15 to file a bankruptcy plan for its operating unit.
    • The share price decline today in CZR and CACQ is more pronounced than the sector average.
    • Bank of Montreal (NYSE:BMO), CIBC (NYSE:CM), Scotiabank (NYSE:BNS), RBC (NYSE:RY), and TD Bank (NYSE:TD) all sold options to U.S. shale drillers looking to hedge against lower prices back when oil was above $90 per barrel. Now they're on the hook for at least $478M, according to Bloomberg.
    • National Bank analyst Peter Routledge says it's a sizable liability, but given the heavy regulation of Canadian lenders, it's a pretty good bet they hedged their exposure. If you want to worry about Canadian banks as regards to oil. says Routledge, it's on the lending side, not the capital markets side.
    • “We actively hedge and manage our exposures to fluctuations in commodity prices,” says BMO's Anthony DeMartino, head of commodity trading.
    • The number of Brazilian companies facing downgrades to speculative grade credit ratings more than doubled in Q1, says Moody's, and as long as the economy remains weak, the agency sees risk that more companies become "fallen angels."
    • Globally, 26 companies were downgraded to speculative grade in Q1 versus just 24 for all of 2014. This, however, was mostly about Russia, where a sovereign downgrade led to a rating cut for 18 of that country's companies.
    • Previously: Nomura: Brazilian economy unraveling (Nov. 19, 2014)
    • Previously: Petrobras looks to avoid technical default (April 14)
    • Commercial Wi-Fi provider iPass (IPAS +6%) and Gogo (GOGO +3.2%) have combined on the iPass Unlimited offering, a service plan offering unlimited access to iPass' global hotspots and Gogo's in-flight Wi-Fi service for a flat $25/month.
    • The service plan features a single login for more than 18M hotspots worldwide as well as Gogo service on more than 2,100 commercial aircraft.
    • The company will provision the offering via software-as-a-service so that businesses can offer single-click activation and easy order forms.
    • 91% (20 of 22) of the pediatric patients in a Phase 1 study evaluating Juno Therapeutics' (JUNO +3.1%) chimeric antigen receptor T-cell (CAR-T) product candidate, JCAR017, had a complete remission of their relapsed/refractory acute CD19-positive lymphoblastic leukemia. The data were presented at the American Association for Cancer Research Annual Meeting in Philadelphia, PA.
    • Juno Scientific Co-Founder Michael Jensen, M.D., says, "The 91% remission rate in this Phase 1 study of JCAR017 is highly encouraging, particularly when considering these pediatric patients failed to respond to standard treatments. Based on these results we are eager to advance this study and to continue advancing the use of cell therapies to change how we treat cancer and provide patients the opportunity for better treatment options."
    • The CAR-T experience has its challenges, however. Severe cytokine release syndrome and/or severe neurotoxicity was observed in eight patients in addition to four relapses (only one that was CD19-positive).

  81. Speaking of 5:15, Nas 5,015 into the close.  Dow is down 150 from the open (net down 70), /ES just popped off 2,090 and /TF held 1,260 so more shenanigans in store for tomorrow.  

    We don't have /CL to kick around anymore – we'll have to move on to other trade ideas.  Hopefully StJ has his earnings preview ready!  


  82. CMG missed – down about $50!


  83. KAR – not too much for options game, but another steady, stealthy, climber, while issuing debt and stock.


  84. Quadrophenia – aah, that brings back memories. A great film, thanks in part to the contribution of that other Phil Davis!


  85. LOL Winston – I love Phil Davis trivia!  cool


  86. ~~"Bill Gross is out on Twitter calling German 10-year Bunds – currently yielding 10 basis points – the short of a lifetime … Even better than the pound in 1993. The only question, he says, is timing. "

    This was posted by Phil earlier.  I read where one trader maintains that you can get essentially the same trade by shorting the TLT.  He believes that if the Bund trade breaks, so will our treasuries.  Dick Bove doesn't believe the Fed will raise rates this year because of it's effect on the already soaring dollar.  I guess a move upward by the EU would provide some latitude for the Fed.  Interesting, but probably not right away.


  87. From Bloomberg, Apr 21, 2015, 4:12:58 PM

    Chipotle Mexican Grill Inc. posted first-quarter sales that trailed analysts’ estimates, hurt by higher menu prices and supply-chain woes that are causing shortages of one of its main ingredients.

    To read the entire article, go to http://bloom.bg/1yPe300

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


  88. From Bloomberg, Apr 21, 2015, 4:11:06 PM

      Chief executive officer of Yahoo! Inc., Marissa Mayer has come under growing pressure from some investors, including Starboard Value LP, to show better results from her investments, including Tumblr, her largest. Photographer: Jason Alden/Bloomberg

    Yahoo! Inc.’s first-quarter revenue fell short of analysts’ estimates, underlining Chief Executive Officer Marissa Mayer’s challenge in attracting advertisers even as the Web portal adds content and signs new partners.

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

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


  89. From Bloomberg, Apr 21, 2015, 4:08:32 PM

    Perrigo Co.’s board unanimously rejected Mylan NV’s $28.9 billion takeover proposal, saying it doesn’t reflect the value of the over-the-counter drug company’s growth potential.

    To read the entire article, go to http://bloom.bg/1J7Jlm6

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


  90. From Bloomberg, Apr 21, 2015, 4:08:22 PM

    VMware Inc., the software maker whose parent company, EMC Corp., has been targeted by an activist investor, said profit topped analysts’ estimates as more customers signed agreements to use its software.

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

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


  91. From Bloomberg, Apr 21, 2015, 4:07:26 PM

    Canada will extend natural gas export licenses to 40 years while cutting taxes for small businesses and the manufacturing industry in a budget designed to boost flagging business investment.

    To read the entire article, go to http://bloom.bg/1J7IW3d

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


  92. From Bloomberg, Apr 21, 2015, 4:27:07 PM

    Broadcom Corp., seeking a return to growth as it shutters its loss-making mobile-phone modem business, predicted second-quarter sales that may equal analysts’ estimates helped by orders from phone makers for other kinds of chips.

    To read the entire article, go to http://bloom.bg/1yPfY4Q

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


  93. From Bloomberg, Apr 21, 2015, 3:29:37 PM

    Fox Sports and NBCUniversal are rejecting Verizon Communications Inc.’s plans to offer their networks as part of smaller, cheaper pay-TV packages, claiming the service violates contract agreements.

    To read the entire article, go to http://bloom.bg/1J7BViY

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


  94. From Bloomberg, Apr 21, 2015, 3:29:33 PM

    Some mortgage-bond investors are criticizing a change in Freddie Mac debt that increases the risk of loss from homeowners who can’t afford their loans.

    To read the entire article, go to http://bloom.bg/1J7BzsD

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


  95. stjeanluc 

    Is this the correct book ?

    Dual Momentum Investing

    by Gary Antonacci

    Thanks


  96. That's the one qcmike! But there are many variations around that theme now – some quite simple to implement. I think Palotay and some others posted some websites that mimic the strategy. Probably worth a post somewhere.


  97. Politicians ignoring the experts again:

    http://talkingpointsmemo.com/livewire/ted-cruz-john-mccain-misspoken

    Cruz said he would raise the issue with McCain and keep pressing for hearings about Second Amendment rights on military bases.

    "The committee ought to look at, listen to the military's arguments. The military brass opposes this is," Cruz said. "I'm a big believer defending Second Amendment rights of everyone including our soldiers."

    So Cruz wants servicemen to be able to carry concealed weapons on bases. The Army brass is dead set against it and gosh, they know a thing or 2 about weapons and Senator Cruz still think we should have an hearing about it! Last time we didn't listen to the Army brass, we invaded Iraq with too few troops. That work out well….


  98. Quote of the day:

    "The risk of paying too high a price for good-quality stocks – while a real one – is not the chief hazard confronting the average buyer of securities. Observation over many years has taught us that the chief losses to investors come from the purchase of low-quality securities at times of favorable business conditions. The purchasers view the current good earnings as equivalent to “earning power” and assume that prosperity is synonymous with safety." (Benjamin Graham)




  99. stjeanluc

     

    Thanks


  100.  Palotay

     

    Would you please send me the link to the website on Dual Momentum investing

    Or do you think the book is the best place to learn/understand Dual Momentum investing

    Dual Momentum Investing

    By Gary Antonacci

    Thanks for the help


  101. qcmike – Check out this site:

    http://www.scottsinvestments.com/dual-etf-momentum/


  102. /NKD- Phil will Japan stock market ever go down for more than a day? Do you think there is a pullback coming at some point soon?


  103. Speaking of "short of a lifetime", for the currency traders CAD looks like the potential short of the year, as their economy is very energy/materials driven and CAD has soared from @ 1.04 in July 2014 to 1.25 between Jan/March 2015 and is now headed down again. Any thoughts? 


  104. From Bloomberg, Apr 21, 2015, 10:52:56 PM

     

    From a modest stucco house in suburban west London, where jetliners roar overhead on their approach to Heathrow Airport, a small-time trader was about to play a hand in one of the most harrowing moments in Wall Street history.

    To read the entire article, go to http://bloom.bg/1HSGP1x

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


  105. From Bloomberg, Apr 22, 2015, 2:12:20 AM

    Customers push shopping carts as they shop for goods inside a Tesco supermarket, operated by Tesco Plc, in London. Photographer: Jason Alden/Bloomberg

    Tesco Plc reported the biggest annual loss in its 96-year history after writing down property values and taking steps to reduce its pension-fund deficit as it seeks to ease increasing financial strains.

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

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


  106. From Bloomberg, Apr 21, 2015, 10:51:48 AM

     

    You’d think two defaults in two days would be negative for markets in China.

    To read the entire article, go to http://bloom.bg/1bfS7QM

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


  107. From Bloomberg, Apr 21, 2015, 9:00:00 PM

     

    Dressed as a banker from a bygone age, with a black top hat, a cigar and a briefcase full of fake money, Eduardo Martinez Cobo traveled to Madrid to protest what he considers unfair clauses in his mortgage contract.

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

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


  108. From Bloomberg, Apr 21, 2015, 6:01:00 PM

      Pedestrians walk along a crowded shopping street in Barcelona. Renewed economic growth in Spain is starting to revive demand for credit after about 500 billion euros of loans drained from the financial system from the economy since 2008. Photographer: David Ramos/Bloomberg

    A flurry of attempts by Spanish banks to buy foreign lenders may say more about the weakness of their home market than the strength of the opportunities chased abroad.

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

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


  109. From Bloomberg, Apr 22, 2015, 12:00:01 AM

      Last month, Elon Musk tweeted that a “major new Tesla product line — not a car — will be unveiled” on April 30. Photographer: Simon Dawson/Bloomberg

    Tesla Motors Inc. is signing up big customers like Wal-Mart and Cargill, accelerating efforts to become a leader in energy storage — a new market that’s poised to boost sales and profit at the electric vehicle pioneer.

    To read the entire article, go to http://bloom.bg/1OEk9Cn

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


  110. From Bloomberg, Apr 22, 2015, 2:38:16 AM

      Japanese policemen cover with a blue sheet and inspect a small drone which was found on the roof of the Japanese prime minister’s official residence in Tokyo on April 22. Source: Jiji Press/AFP/Getty Images

    Japanese police are investigating a small drone that appeared to have fallen Wednesday morning onto the roof of the office of Japanese Prime Minister Shinzo Abe, who was away at an international gathering in Jakarta.

    To read the entire article, go to http://bloom.bg/1bthn6P

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


  111. From Bloomberg, Apr 21, 2015, 6:00:01 PM


     Olsen, Governor of Norway’s central bank. Photographer: Kristian Helgesen/Bloomberg

    Bank economists tracking the Norwegian central bank can’t decide whether the next rate cut will come in May or June.

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

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


  112. From Bloomberg, Apr 22, 2015, 2:20:41 AM

      Kazuo Hirai, Chief Executive Officer of Sony Corp., gestures as he speaks during a news conference at the Mobile World Congress in Barcelona on March 2. Photographer: Simon Dawson/Bloomberg

    Sony Corp. beat analyst profit estimates as it cut costs in the TV division and boosted earnings at the games and financial services businesses.

    To read the entire article, go to http://bloom.bg/1bt9U7Q

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


  113. From Bloomberg, Apr 21, 2015, 11:27:46 PM

    Charlie Chan, a former Credit Suisse Group AG proprietary trader who now runs his own hedge fund, reduced bets the dollar will strengthen and added trades that would profit from a decline.

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

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


  114. From Bloomberg, Apr 21, 2015, 11:00:03 PM

      Brazilian biologist handles boxes with mosquitoes infected with the Wolbachia bacterium --which reduces mosquito transmitted diseases such as dengue and chikungunya by shortening adult lifespan, affect mosquito reproduction and interfere with pathogen replication — in Rio de Janeiro, Brazil. Photographer: Christophe Simon/AFP via Getty Images

    For six months, taps ran dry 12 hours a day in Gregori Pizzanelli Leccese’s Sao Paulo neighborhood. Many residents stored water just to get by.

    To read the entire article, go to http://bloom.bg/1Jse0at

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


  115. From Bloomberg, Apr 22, 2015, 2:00:08 AM


    Spot the statesman.

    The brinkmanship over Greece and its debts continues. A meeting of finance ministers in Riga on Friday is likely to pass, like many previous make-or-break moments, without resolution. The European Union isn’t deviating, and neither is Athens. Before much longer, though, something really will have to give — and it seems ever more probable that, when it does, the news will be bad.

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

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


  116. From Bloomberg, Apr 21, 2015, 5:00:00 PM

      Katumi Takata, chairman of Osaka Machine Tool Co., stands next to his his oldest piece of equipment, a “Spiramatic Jigmil”, manufactured in Michigan more than half a century ago by the DeVlieg Machine Co., in Higashi Osaka City, on April 21, 2015. Photographer: Akio Kon/Bloomberg

    The oldest piece of equipment at Osaka Machine Tool Co. has been there so long that only the company’s 70-year-old chairman, Katumi Takata, still knows how to use it. He isn’t planning to replace it anytime soon.

    To read the entire article, go to http://bloom.bg/1DK733m

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


  117. From Bloomberg, Apr 21, 2015, 2:21:55 PM


    National bird sightings.

    Can China’s economic policy makers maneuver their way out of this one? Let’s see: there’s a property bubble that’s  beginning to deflate, a construction boom that’s now going in reverse and a financial system that’s riddled with bad debts. Oh, and the air is still really dirty.

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

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


  118. From Bloomberg, Apr 21, 2015, 2:37:38 PM

     

    For drought-stricken California, March was less about any kind of precipitation from Mother Nature and more about the virtual flood of imported cargo.

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

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


  119. From Bloomberg, Apr 21, 2015, 6:45:00 PM


    High-rise properties cost $251 a square foot ($2,701 a square meter) in Hong Kong, after rents climbed 11.3 percent in the second half of 2014, according to Knight Frank LLP. Photographer: Brent Lewin/Bloomberg

    Offices on the highest floors of skyscrapers in Hong Kong are the most expensive in the world to lease, costing 66 percent more than in New York.

    To read the entire article, go to http://bloom.bg/1J8crlz

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


  120. From Bloomberg, Apr 21, 2015, 1:29:43 PM


    April 21 — IBM’s first-quarter earnings beat analysts’ estimates that were already significantly lowered, helped by sales of its new mainframe and cloud-computing services. Bloomberg Intelligence’s Anurag Rana reports on “In The Loop.”

    A surging U.S. currency made it harder to boost overseas sales last quarter, requiring U.S. companies led by United Technologies Corp. and IBM to slash costs to top analysts’ earnings estimates in the March period.

    To read the entire article, go to http://bloom.bg/1yOLeB2

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


  121. From Bloomberg, Apr 22, 2015, 4:00:22 AM

     

    Switzerland is paying the price for letting its exchange rate soar.

    Three months since ending a cap on the franc, the country is now suffering from its biggest decline in output since the 2008-2009 financial crisis as exports slump, according to a survey of economists.

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

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


  122. From Bloomberg, Apr 22, 2015, 3:12:55 AM

    Fortescue Metals Group Ltd., the fourth-largest iron-ore producer, had its corporate credit rating cut by Standard & Poor’s on expectations the commodity’s price collapse will erode profits over the next two years.

    To read the entire article, go to http://bloom.bg/1btjKq2

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


  123. From Bloomberg, Apr 22, 2015, 2:12:40 AM

     

    European stocks were little changed after a two-day rally as investors watched earnings results.

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

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


  124. From Bloomberg, Apr 22, 2015, 1:52:24 AM

      Customers browse luxury products for sale inside a Cartier store, a unit of Cie. Financiere Richemont SA, in the GUM department store on Red Square in Moscow. Photographer: Andrey Rudakov/Bloomberg

    Cie. Financiere Richemont SA, the maker of Cartier jewelry and Montblanc pens, said full-year profit dropped about 36 percent because of adjustments to the value of financial instruments.

    To read the entire article, go to http://bloom.bg/1JsqU8x

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


  125. From Bloomberg, Apr 22, 2015, 3:17:43 AM

    Kering SA tumbled in Paris trading after reporting Gucci’s weakest quarterly performance in more than five years and slowing sales growth at handbag maker Bottega Veneta amid a slowdown in Asia.

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

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


  126. From Bloomberg, Apr 22, 2015, 1:37:00 AM

    Emerging-market stocks rose for a second day as utilities rallied and speculation that China will accelerate stimulus sent the nation’s equities to the highest level in seven years. Russia’s ruble strengthened.

    To read the entire article, go to http://bloom.bg/1Od5NOj

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



  127. Good morning from America!

    U.S. Navy Rail Gun Test 2012Railguns are cool, Advill.  I wonder if breakthroughs in battery technology will make them practical for military use?  Put a dozen railguns on trucks with 1,000 bricks worth of ammo each and you can pretty much level a city.  

    Bunds/Albo – One day it will all fall apart but, so far, no luck on the "obvious" play.  

    Cruz/StJ – He's just pandering to his NRA sponsors.  If they have a hearing, that should be the end of it and I think McCain thinks even bothering with a hearing is a waste of time. 

    Best ETF Websites/StJ – It's in a list form, so it must be true!  cheeky

    Big Chart – Hardly any point to looking at the chart.  This morning we were up half a point, now we're down half a point but recovering.  Why?  Who knows?  All we can do is watch the major lines and see which way things break.  

    /NKD/Craigs – Well they hit 20,225 into the close (3am) and now 20,140 so keeping the Nikkei over 20,000 is impressive.  As I said yesterday, they BOJ just went even more dovish so it better be good for something, right? 

    CAD/ZZ – But commodities have made a comeback, noteably oil ($56.30 this morning).  Wait, maybe you don't mean short as you seem to say $1.04 to $1.25 as if that is CAD "soaring" but that's how many CAD you need to buy a Dollar so it's weaker – in which case I agree that CAD may head back closer to par with the Dollar (about $1.15) as long as oil doesn't collapse again.  

    Meanwhile, I think I timed my Canada trip perfectly for the max discount.  


  128. Morning Phil – wow, strange mood this am? I think you need to get into your go with the flow mode, party on!


  129. Railguns/Phil   Did you have a city in mind? F YEAH! 

    (lol)


  130. All it takes is one guy with a small account to crash the Global Markets?  Why does this not make me feel good?  Now Investors Are Worried That a Single Trader Could Take Down the U.S. Stock MarketThere are enough reasons to lie awake at night without having to worry that a single trader can take down the U.S. stock market from a London suburb, fund managers said. U.S. authorities accused 36-year-old Navinder Singh Sarao on Tuesday of masterminding a five-year scheme to use phony orders in Standard & Poor’s 500 Index futures to manipulate prices and book $40 million in illicit profits. Along the way, he had a hand in erasing $862 billion from the U.S. stock market — in a matter of minutes, they alleged. That it might have been going on for so long didn’t fill investors with confidence. “It’s incumbent upon regulators not to be asleep at the switches,” said Donald Selkin, who helps manage about $3 billion as chief market strategist at National Securities Corp. in New York. “They have been, time and time again.”

    • Composite Index: +2.3% vs. -2.3% last week.
    • Purchase Index:  +5.0% vs. -3%.
    • Refinance Index: +1.0% vs. -2%.
    • 30 year mortgage rate 3.83% vs. 3.87%
    • With Q1 earnings reports rolling in, stock index futures are all lower by about 0.4%, with the exception of the Russell 2000 (NYSEARCA:IWM) which is down 0.8%.
    • Among the movers is Chipotle which is down 5.7% after its report.
    • Europe's lower, led by Germany and Italy, which are both down more than 1%. The Asian bull market continued overnight, with Shanghai higher by 2.4% and Tokyo by 1.1%.
    • The 10-year Treasury yield, gold, and oil are all little-changed.

    Warning: This Measure Of Credit Is At Its Worst Level Since The Crisis

    How futures trading could crash stocksThe US equity market ‘flash crash’ of May 6 2010 has long highlighted the pronounced link between futures exchange contracts and the share prices of companies bought and sold by investors of all stripes.

    • Asian stocks continued their climb higher today, with the Nikkei zooming past the key 20,000 level on new data showing a Japanese trade surplus in March for the first time in nearly three years.
    • Meanwhile, Chinese shares found support again from the country's recent stimulus moves as investors continued to open accounts at a record pace. Shanghai's stock market has now nearly doubled over the past six months.
    • As the latest CEO to comment on the Chinese stock market boom, Blackstone's Steve Schwarzman says the bourse is beginning to show signs of "excess."
    • Nikkei +1.1%; Shanghai +1.5%; Hang Seng +0.4%

    Blackstone(BX) CEO Schwarzman Sees ‘Excess’ in China’s Market. Blackstone Group LP’s Steve Schwarzman said the Chinese stock market shows signs of excess as the population plows savings into it while economic growth slows. “We’re now finding retail investors with multiple brokerage accounts and margin loans and indicia of some excess in their market system,” Schwarzman, Blackstone’s co-founder and chief executive officer, said Tuesday at the China General Chamber of Commerce’s Finance & Real Estate Forum in New York.  

    Debt Piles Up in Asia, Threatening GrowthCountries borrowed a lot during the crisis, and kept doing so afterward. Asian countries borrowed heavily to maintain growth during the financial crisis, but couldn’t break the habit even as the global economy healed. Now they are feeling the hangover. Growth is slowing fast across the continent as consumers and businesses focus on repaying debt. Central banks have cut rates, pushing currencies lower, but…

    • Greece will not present a list of economic reforms to euro zone finance ministers on Friday, a senior EU official said, kicking the deadline a little further down the road.
    • "The liquidity situation in Greece is already a little tight, but it should be sufficient into June," said Thomas Wieser, President of the Eurogroup Working Group.
    • Athens previously told its euro zone partners that by the end of April it would agree with creditors on a comprehensive list of reforms, but such hopes have dimmed.
    • ETFs: GREK

    On Greece, Europe Bluffs ItselfHow different is Greece really from France, Italy and Spain? Greece’s new leader and his ministers are behaving like fools in their debt showdown with the European union. So claims much of the punditry and you won’t find an argument here. They’ve taunted Germany about war reparations, threatened to open their borders to jihadists trying to enter Europe and cozied up to Vladimir Putin.

    ECB Prepares To Sacrifice Greek Banks With 50% Collateral Haircut

    From Delinquent To 'Seriously' Delinquent: Another Worrying Trend For Student Debt Revealed

    Low-rate "torture" for the regional lenders

    • "This whole discussion today about when interest rates move is torture for us,” said U.S. Bancorp (NYSE:USB) CEO Richard Davis on last week's earnings call. “I remain very optimistic for the economy … a little less optimistic for the bankers until interest rates start to move up.”
    • Earlier today, Regions Financial (NYSE:RF) and Fifth Third (NASDAQ:FITB) became the latest in a line of lenders reporting slimming net interest margins. For Regions, the average yield on its loan portfolio fell to 3.45% from 4.03% a year ago. "You’re trying to book the prudent loans that you have the opportunity to, but with the level of competition in the market, it’s hard to move those rates up absent some kind of interest-rate increase," said Regions chief Grayson Hall on the earnings call.
    • On average, U.S. banks with more than $10B in assets showed a NIM of 2.97% in Q4, the lowest level in 25 years according to the FDIC … And it got worse in Q1. Six of the nine big commercial banks reporting so far – including Wells Fargo (NYSE:WFC) and PNCFinancial – had Q1 margins lower than Q4.
    • Bank of America (NYSE:BAC) and Regions – two banks seen as particularly sensitive to interest rates – are unsurprisingly the worst performers in the KBW bank index (NYSEARCA:KBE) this year, off 13.9% and 9.3% respectively.
    • What to do? Regions, for one, is trying to emulate the Wall Street big boys by bulking up its wealth management and capital markets operations. And maybe there's some more fat to trim. “We’re going to turn up the heat on expenses…and we’ll see where we get to,” said PNC boss William Demchak on last week's conference call.
    • Source; WSJ's Peter Rudegeair

    Oil Drops After API Inventories Show Builds Accelerating Again

    • U.S. crude futures extended declines on Wednesday after Saudi Arabia concluded its military campaign in Yemen, while industry data showed a larger-than-expected build in U.S. oil inventories.
    • Figures released by the American Petroleum Institute yesterday showed that inventories rose by 5.5M barrels last week, higher than the 2.9M barrel build expected by analysts.
    • "We will probably see one more dip in the second quarter but prices probably won't go below this year's lows," said Ian Taylor, head of the world's top oil trader, Vitol.
    • The EIA will issue official U.S. stocks data at 10:30 a.m. EST.
    • Crude futures -0.8% to $56.17/bbl.

    BP(BP) sees 'massive' shock for North Sea as oil glut deepens. The world's over-supply of oil is like the deep slump in 1986. BP fears it may get worse as Iran's supply hits market and US shale hold firm.

    • Two days after Senator Lisa Murkowski said she would introduce legislation this year to allow U.S. crude exports, Pioneer Natural Resources (NYSE:PXD) CEO Scott Sheffield has put the chances of lifting the ban in 2015 at 40% to 50%.
    • The chief executive, which has recently held talks with members of Congress and the Obama administration about removing the decades-old restriction, also sees an 80% to 90% chance that American E&P companies will be allowed to export crude by early 2017.
    • Last year, the Commerce Department gave Pioneer and Enterprise Products Partners permission to begin selling an ultralight oil product called condensate.
    • Nabors Industries (NYSE:NBR) +1.6% AH after reporting better than expected Q1 earnings and revenues, as improved earnings in its drilling and rig services segmentoffset losses at the completion and production business it recently sold to C&J Energy.
    • The Q1 results include the completion and production results through March 23, during which the segment generated an operating loss of $58.5M that had a $0.15/share negative impact on NBR's bottom line.
    • NBR says Q1 operating earnings at its drilling and rig services segment rose 29% Y/Y to $201M, U.S. drilling operating earnings improved 6.3%, while international drilling profit more than doubled.
    • NBR also says it had cut its global workforce by more than 18% since the end of 2014, including respective reductions of 41% and 26% in the U.S. drilling and Canada segments; excluding Q1 severance charges, NBR says it has reduced overhead costs by ~$20M Q/Q.

     

    • Peabody Energy (NYSE:BTU) says CEO Gregory Boyce and CEO-Elect Glenn Kellow will take voluntary and temporary 10% pay cuts for the rest of the calendar year, which the company says is part of its cost-cutting strategy.
    • Boyce's base salary will be reduced from $1.23M/year to $1.1M annually from May 1 until June 30, and from $900K/year to $810K annually from July 1 until Dec. 31; Kellow's base salary will be cut from $950K/year to $855K from May 1 until the end of the year.
    • Both execs will revert to their original salaries at the start of 2016.
    Devolving as we speak:  Texas Senate Votes to Abolish Renewable Energy Programs - Today, the Texas Senate passed Senator Fraser's Senate Bill 931 to abolish two of Texas' few renewable energy programs.

    • AutoNation (NYSE:AN) reports same-store sales rose 9% in Q1.
    • Segment revenue growth: Domestic +24% to $79M, Import +15% to $75M, Premium Luxury +13% to $94M.
    • Gross profit per vehicle rose 3.2% to $3,348 during the quarter.
    • Previously: AutoNation beats by $0.08, beats on revenue
    • Tesla Motors' (NASDAQ:TSLA) April 30 product announcement will be unveiling a home battery as well as a large-scale utility battery, Bloomberg reports, citing an e-mail from the company's investor-relations chief.
    • The mail notes that Tesla “will explain the advantages of our solutions and why past battery options were not compelling.”
    • Speculation has been widespread that the coming announcement — which Tesla chief Elon Musk tweeted about at the end of March — would be about a product that would either supplement or threaten the traditional utility power grid.
    • Musk said during a February earnings call that such a battery was coming from them, sooner or later.
    • Yum Brands (NYSE:YUM) trades higher after beating estimates for Q1 profit.
    • China: Sales were off 6% with 8% unit growth outrun by a -12% same-store sales comp vs -14% expected. Restaurant margin -450 bps to 18.9% off of sales deleverage.
    • KFC: Sales growth of 8% derived from 2% unit growth and 5% same-store sales growth. Operating margin i+180 bps to 26.3%.
    • Pizza Hut: Revenue rose sales 2% led by 2% unit growth. Same-store sales came in flat. Operating margin -150 bps to 30.0%.
    • Taco Bell: Sales up 9% on 3% unit growth and a 6% comp. Operating margin +520 bps to 26.6%.
    • India: Sales increased 1%. Unit growth +18% offset by an 11% same-store sales decline.
    • 294 stores were added to Yum' system during the quarter.
    • Previously: YUM! Brands beats by $0.08, revenue in-line
    • YUM +4.64% after hours.

    They finally found a price people aren't willing to pay:  Chipotle price hikes slower sales,  earnings call

    • Chipotle (CMG +0.9%) reports comparable-store sales rose 10.4% in Q1 vs. 11.6% expected and 16.1% in Q4.
    • Higher menu prices were a factor during the quarter.
    • Restaurant level operating margin +90 bps Q/Q and +160 bps Y/Y to 27.5%.
    • Food cost ratio -60 bps to 33.9% as price hikes offset higher beef and tortilla costs.
    • Store count +49 Q/Q to 1,831.
    • Guidance: Chipotle's comp growth outlook for 2015 is for a low to mid-single digit rate increase. 190 to 205 new store openings expected.
    • Chipotle (NYSE:CMG) would have put up an even stronger Q1 comp if the supply of carnitas didn't run short at a high percentage of its stores.
    • Execs tipped off the during the earnings call that the company sees pushing through more menu price increases. Steak and barbacoa price hikes of 4% to 6% are expected by Q3.
    • The fast-casual chain's strong run of double-digit comp growth is highlighted by management.
    • They also noted that operating expenses as a percentage of sales fell 320 bps to 81.8% as sales leverage reduced the impact of some costs.
    • Previously: Chipotle Mexican Grill beats by $0.22, misses on revenue (April 21)
    • Previously: Chipotle -4.7% as comp growth slows (April 21)
    • Chipotle earnings call webcast
    • CMG -5.41% in the after-hours session to $655.05.

    These guys make a nice buy down here (big film year coming):  Dolby Laboratories beats by $0.08, beats on revenue

    • Dolby Laboratories (NYSE:DLB): FQ2 EPS of $0.56 beats by $0.08.
    • Revenue of $271.9M (-2.4% Y/Y) beats by $6.44M.
    • Shares +2.3%.
    • Press Release
    • Intuitive Surgical (NASDAQ:ISRGQ1 results ($M): Total Revenues: 532.1 (+14.5%); Instruments: 277.2 (+8.8%); Systems: 141.0 (+33.0%); Services: 113.9 (+9.6%); Net Income: 97.0 (+119.0%); GAAP EPS: 2.57 (+127.4%); Quick Assets: 2,667.0 (-10.0%).
    • Total revenue growth has trended up the past four quarters: -24.0%, -11.5%, 10.2%, 4.9%, 14.5% as has EPS: -76.5%, -34.6%, -21.1%, -11.7%, +119.0%.
    • Da Vinci shipments: 99 (+13.8%).
    • Shares are down 4% after hours on average volume.

     

    • Though iRobot (NASDAQ:IRBT) beat Q1 estimates, it's guiding for Q2 revenue of $143M-$146M and EPS of $0.02-$0.06, well below a consensus of $156.9M and $0.31.
    • Full-year guidance is for revenue of $625M-$635M and EPS of $1.25-$1.35; the former is in-line with a $629.4M consensus, but the latter is mostly below a $1.34 consensus. Prior EPS guidance was $1.25-$1.45.
    • iRobot states its full-year outlook  reflects "our confidence that Home Robot revenue will grow 11-13% driven by growth in the United States and China, and our incremental marketing investments to strengthen awareness and support our international partners."
    • Shares have fallen to $31.15 AH.
    • Q1 resultsPR
    • CREE is guiding for FQ4 revenue of $420M-$440M and EPS of $0.24-$0.28 vs. a consensus of $434.4M and $0.29.
    • Gross margin (closely watched) fell to 31.4% in FQ3 from 33.9% in FQ2 and 37.8% a year ago, and missed guidance of ~33.5%. FQ4 GM guidance is at ~32%.
    • Segment performance: LED product (chip/component) revenue -23% Y/Y to $154.4M (tough Asian mid-power competition); gross margin -970 bps to 35.9%. Lighting products +27% to $224.1M (strong U.S. retail sales); gross margin -140 bps to 26%. Power/RF products +13% to $31M; gross margin -400 bps to 53.1%.
    • GAAP SG&A spend +10% to $71.9M; R&D -6% to $43.8M. Cree ended FQ4 with $782M in cash/short-term investments, and $150M in long-term debt.
    • Shares have fallen to $33.94 AH.
    • FQ3 resultsPR
    • In addition to beating Q1 estimates, Broadcom (NASDAQ:BRCM) is guiding for Q2 revenue of $2.1B (+/- $75M), above a $2.07B consensus. Strong Galaxy S6 sales could be partly responsible – Broadcom is believed to supply a Wi-Fi/Bluetooth combo chip and a GPS/sensor hub IC. Continued iPhone 6 and data center hardware strength (driven by Web/cloud demand) might also be factors.
    • Q1 gross margin (non-GAAP) was 54.4%, -30 bps Q/Q and +250 bps Y/Y, and slightly below a guidance midpoint of 54.7%. However, GM is expected to rise to 56% (+/- 75 bps) in Q2.
    • In addition, R&D/SG&A spend is expected to drop ~$15M Q/Q (+/- $10M). Thanks to Broadcom's baseband modem exit, R&D spend was down 15% Y/Y in Q1 to $539M, and SG&A spend 4% to $177M.
    • $335M was spent on buybacks, providing a lift to EPS. Broadcom established a $1B 2015 buyback authorization last December.
    • BRCM +5.5% AH to $46.38, slightly topping a 52-week high of $46.31.
    • Q1 resultsPR

    Sony raises forecast for full-year profit

    • Sony (NYSE:SNE) has sharply upgraded the forecasts for its recently ended fiscal year, raising its earnings estimates for the second time in three months on higher-than-expected sales of videogames and cost cuts in its TV division.
    • While it will make its official earnings statement for the year on April 30, Sony reported preliminary operating income of ¥68B ($569M), up from a previous forecast of ¥20B, and ¥26.5B a year earlier.
    • CEO Kazuo Hirai's recent restructuring has focused the tech giant on profitability instead of volume growth, stoking the company's shares.

    Verizon: Won't ride price war down, won't change FiOS skinny bundles

    • More grumbling is being heard over Verizon's (NYSE:VZ) new skinny TV packages, which launched on Sunday starting at $55/month.
    • NBCUniversal (NASDAQ:CMCSA) and Fox (NASDAQ:FOXA) now join ESPN (NYSE:DIS) in saying the company's new offering violates their contract agreements.
    • "We have launched the product, we are not retracting it, and we believe we are in our legal rights to launch it," Verizon CFO Fran Shammo said on yesterday's earnings call.
    • Previously: Disney: Not so fast on skinny bundling, Verizon (Apr. 17 2015)
    • Previously: Verizon steps closer to custom TV packages (Apr. 17 2015)
    • AT&T (NYSE:T) reports Q1 earnings tomorrow with its share price almost entirely unchanged from three years ago — and having slipped about 3% a year (on average) since the summer 2007 launch of the iPhone, exclusively on its network.
    • That healthy dividend yield of 5.7%, you say? Even including payouts, the company's annualized return trails the S&P 500 by four points since 2007, Spencer Jakab notes.
    • On the positive side, some heavy spending on infrastructure and Mexico expansion should be wrapping this year, and a decline in phone subsidies is taking some pressure off … but there's still the price war. And stock buybacks that used to boost earnings growth fell to zero in Q4, he notes.
    • AT&T reports after the close Wednesday; analysts expect it to post an EPS of $0.61 on revenues of $32.76B (down slightly from Q4's $34.44B) and EBITDA of $10.25B (up from Q4's $9.4B).
    • Earnings Center
    • Related: 2 Reasons AT&T Is The Better Dividend Investment Than Verizon (Apr. 21 2015)
    • Related: AT&T Clearance Sale Going On Now (Apr. 17 2015)
    • Mobile infrastructure spending in China rose 51% last year, according to an Infonetics report, primed by "robust" TD-LTE deployments at wireless leader China Mobile (NYSE:CHL) and W-CDMA expansions at China Unicom (NYSE:CHU).
    • Those increases countered a significant capex cut by third competitor China Telecom (NYSE:CHA).
    • China Mobile in particular had a goal of raising TD-LTE rollouts from 150K TD-LTE eNodeBs to 500K, but ended the year with 720K in a next-gen push. The company has 60% of China's mobile subscribers.
    • The mobile operators added 58M subscribers in 2014 to push the total market to 1.3B subscribers.
    • Gains today: China Mobile (CHL) up 4.3%; China Telecom (CHA) up 1.5%; China Unicom (CHU) up 3%.
    • Previously: China telecoms: Providers gain again; Unicom adds 1.6M net subs (Apr. 21 2015)
    • Previously: Chinese wireless firms up on PBOC easing; China Mobile notes Q1 results(Apr. 20 2015)
    • Google (NASDAQ:GOOG) is ready to push out its wireless phone service as soon as tomorrow, the WSJ reports, and it's expected to allow customers to pay only for data used.
    • That could put pressure on existing providers who have pocketed excess fees spent on data "buckets" that typically waste a reported $28/month per subscriber.
    • As previously reported, the service will work only on Google's latest Nexus 6 devices and will use Wi-Fi nets to route calls and data. Wireless service will be via Sprint (NYSE:S) and T-Mobile (NYSE:TMUS) networks, switching between them depending on stronger signal.
    • The deal represents a threat to the wireless status quo, even as transit agreements are good for Sprint and T-Mobile. The decision in Sprint's case to go along reportedly went all the way to Chairman Masayoshi Son.
    • Previously: WSJ: Google's phone service to initially have just one (giant) phone (Mar. 05 2015)
    • Yahoo (NASDAQ:YHOO) has guided in its Q1 earnings slides (.pdf) for Q2 revenue (ex-TAC) of $1.01B-$1.05B vs. a $1.04B consensus. Op. income is expected to fall to $90M-$110M from $194M in Q2 2014.
    • With share loss and a shift to native ad formats still weighing, Yahoo's display ad revenue (ex-TAC) fell 7% Y/Y in Q1 to $381M, a bigger drop than Q4's 5%. Ads sold +29%, price per ad -17%.
    • Search revenue (ex-TAC) fell 3% to $432M after coming in flat in Q4, in spite of the boost provided by the U.S. Firefox deal. A 21% increase in paid clicks was offset by lower Microsoft payments and a 3% drop in price per ad click. Yahoo's restructured Microsoft deal (increases Yahoo's gross revenue cut to 93% from 88%) could improve matters.
    • GAAP mobile revenue (doesn't back out traffic acquisition costs) rose 73% Y/Y to $234M. GAAP PC revenue fell 2% to $873M. Non-traffic driven revenue (e.g. royalties, license fees) rose 18% to $119M. GAAP "Mavens revenue," which covers mobile, video, native, and Tumblr ads, rose 58% to $363M.
    • CFO Ken Goldman, perhaps looking to appease Starboard Value: "We are tightly managing our overall cost structure as EBITDA remains a key measurement for the Company." With job cuts limiting spending growth, operating expenses (non-GAAP) rose 3% Y/Y to $963M. Ex-TAC, Americas revenue (78% of total revenue) fell 2%, EMEA fell 16%, and Asia-Pac fell 9%.
    • $204M was spent on buybacks, much less than Q4's $980M. Yahoo "satisfied" its $3.3B tax liability related to Alibaba IPO proceeds during Q1, leaving its quarter-ending cash balance at $6.9B.
    • YHOO -1.2% AH to $43.95.
    • Q1 resultsPR