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Philstockworld Top Trade Review

Image result for top trade ideasThe pressure is on!  

Top Trades has become one of Philstockworld's most popular Memberships and that's a shame because I actually hate trading services that just give out trade ideas.  Unfortunately, that's what the market demands and, though Top Trade Members miss out on the trading education and deep discussions we have in our Live Member Chat Room, they usually do get a lot of great trades.

That is, until September they did!  In our first year of Top Trades, beginning in August of 2015, 96 out of 119 Trade Ideas (80.6%) were immediate winners and half of the initial losers turned around over time and became winners as well.  Perhaps it was shooting fish in a barrel in a bull market.  Unfortunately, our second year got off to a rough start, with just 7 of our 16 ideas in September and October winning by Dec 10th (we have to give them some time before reviewing).  Of those 9 losing trades:

  • ERIC is improved but still red
  • TEVA has not improved
  • MON is now a winner 
  • CMG is a home run
  • SGYP is a huge winner
  • LL got worse
  • TASR is now a winner 
  • TWTR still in the red 
  • JO was a winner but now a loser again (wild swings) 

So 4 of our 5 losers are now winners and these are long-term trades, for the most part – it's not like we can expect every one to win immediately.  The point is that these reviews are simply initial snapshots to see how we're doing – in case our trade need adjustments in their early stages – they are far from the final word on these trades.  In this month's review, we will pick up in November and review the next two months.  

The secret to our success in Top Trades is PATIENCE!!! Patience is the hardest thing we try to teach our Members at Philstockworld as it tends to take years of practice and the nice thing about the Top Trades Membership is that you don't have a choice – we make our picks ONLY when we see a nice opportunity and if that's once a week, twice a week or just once a month – we don't care – we only make picks that have excellent chances of making a profit – 80% chances going by our first year's performance…

Image result for "be the house"Top Trade Alerts come from our Live Member Chat Room at Philstockworld and represent a very small portion of our trade ideas but they are a fair representation of applying our "Be the House – NOT the Gambler" strategy and you can learn a lot by reviewing the performance of these trades through up and down markets over the course of a year.  All PSW Basic and Premium Members have Top Trade Access (just make sure your smart phone number is in the box here if you want text alerts in addition to our EMail alerts). 

Combining a solid winning percentage with sensible portfolio management techniques (diversification, managing losses, hedging) will have you beating the S&P by a mile with no sweat.  Generally, with our Top Trades, we're simply picking stocks we feel are underpriced and we're using our various options techniques to give ourselves even better discounts and hedged entries but these are patience plays that can take time to get going, usually our Top Trade Ideas have long-term objectives.  

Friday, Nov 4th got us off to a good start with our note to buy WTW based on news that Oprah would be doing a commercial campaign with them in Q1 (Oprah is a big shareholder).  Our trade idea was:

Let's add them to the OOP as follows:

  • Sell 5 2018 $10 puts for $3 ($1,500)
  • Buy 15 April $10 calls at $1.80 ($2,700) 
  • Sell 15 April $12 calls for $1 ($1,500) 

That's a net $300 credit on the $3,000 spread that's $1,000 in the money to start you off.  Upside potential is $3,300 back at $12 in April and, if WTW stays over $10 to the end of the year, we're talking 1,100% gains on cash.  ToS says the ordinary margin requirement is just $1,800, so pretty efficient.  

The April spread is already in the money and paying $1.40 ($2,100) while the puts have dropped to $2.15 ($1,075) for net $1,025 + the $300 credit is a $1,325 profit (442%) so far but that's not even halfway to our 1,100% goal so call this one "on target."  

Our Top Trade Alerts come from our Live Member Chat Room and they are generally trades I have a lot of confidence in out of a dozen or so trade ideas we have each week.  Not just confidence but also I prefer they be "set and forget" trade ideas because, unlike our Member Chat – I don't talk to Top Trade Members so there's no adjustments along the way – something we specialize in at PSW.  

Since our Top Trade Alerts come from Chat, I sometimes leave in other things we were discussing in the post.  In the above trade, I made a useful note on the Dollar Futures:

Dollar/Lunar – 97 is where we do want to take a poke long again.  

As you can see, the Dollar plowed all the way up to 103.50 before turning down and, at $1,000 per point, that's a $6,500 per contract winner but we don't count those in Top Trades – just some bonus play if you are so inclined.  

Monday, Nov 7th was the day before the World ended and we were liking FCX at the time:

I'm thinking FCX makes a good add.  We do have 25 short 2018 $8 puts in the LTP and we sold them for $1.85 back in July, now $1.05 so let's just use those and add a bull call spread.  We can buy 25 2019 $7 calls at $5.30 and sell 25 2019 $12 calls at $3.20 is net $2.10 on the $5 spread so nice $2.90 upside is not a very exciting play but nothing wrong with $7,250 in pretty easy upside.  Also makes a nice inflation hedge and, as a new trade, your net is a credit if you sell the 2019 $10 puts for $2.65.

Good timing there.  Even selling the 25 2018 $8 puts for $1.05 ($2,625), they are down to 0.29 ($725) for a $1,900 gain (aren't options great?) and the bull call spread is deep in the money at net $3.15 ($7,875) so net $7,150 from our net $2,625 start is a quick $4,525 profit (172%) and well on the way to realizing the full $7,250 so still $2,725 left to gain (60%) on this one.  

Thursday, Nov 10th, before we got to our idea on CTT, I threw in this useful play on Lumber Futures (/LB):

/LB is Lumber and that's the new long bet above the 300 line.  The way it trades is you are buying contracts for 110,000 feet of random-length (8-20 feet), building grade 2x4s.  Simple premise – Trump is a builder – at some point he's going to talk about stimulating the construction industry.  Every 0.10 is $11 per contract on /LB.

So, as noted above, the 60-point quick rise we got during the month was good for $110 x 60 = $6,600 per contract profits but, as above, we don't count those freebies as Top Trades – just some fun stuff from our Live Chat Room.  As our Chat Members know, that was the first and only trade we made on Lumber all year – it just so happened to be in a really good spot!  cool 

CTT is also a lumber play – that's what the connection was:

CTT is a lumber REIT that pays a 5% dividends (0.54) at $11.05 and you can buy the stock and sell the May $11 calls for $1.50 or better and that drops the basis to $9.55 and you don't even need to sell the puts – it's a really nice covered call on a great long-term dividend payer.

This is a very dull play, meant to be a dividend-payer, not to make great profits.  The stock is now $10.84 and the May $10 calls (there were no $11s, my mistake) are 0.75 so net $10.09 is up a whopping 0.54 (5.6%) but on Nov 16th they paid a 0.135 dividend and another one is coming soon so call it up 0.81 of our $9.55 entry and that's up 8.4% in 3 months – not bad for a boring trade!  

While they may not seem exciting, dividend stocks are the bread and butter of a Long-Term Portfolio.  Over time, through call selling, we whittle the cost basis down to zero yet the dividends will be paid to us forever and, before you know it, we are retiring with a very safe portfolio that throws off a nice, steady, low-tax income.  Don't neglect the "boring" trades!  

Wednesday, Nov 16th we were back on the coffee bandwagon.  

Let's officially add the above JO trade to the STP:

  • Selling 10 Starbucks (SBUX) 2019 $45 puts for $4 ($4,000) 
  • Buying 40 Coffee (JO) June $22 calls for $3.40 ($13,600) 
  • Selling 40 Coffee (JO) June $26 calls for $1.70 ($6,800) 

Fortunately, SBUX took off and saved us as JO is a big disappointment so far.  The $45 puts have dropped to $2.70 ($2,700), so we've gained $1,300 there but the Jo June spread has fallen to 0.70 ($2,800), a loss of $2,700 (96%) on the spread.  As a fix, we want to salvage the $1.10 from the June $22 calls and pick up the September $19 ($3)/23 ($1.35) bull call spread at $1.65 which leaves us with the short June $26 calls covered by the $4 Sept spread and the short SBUX puts at net/net $5,000 and it still pays $16,000 if it works.

You could also just pull the plug on JO and then, if the SBUX puts expire worthless (SBUX over $45 in Jan 2019), you end up net even on the trade.  That's why we love the flexibility of these kind of spreads – we can give up on the main trade and then we're just promising to buy SBUX at $45, which is more than 20% off the current price.

Monday, Nov 21st we were still expecting inflation now that Trump was President-Elect.  ABX had just had disappointing earnings and that made them a bargain to us as we were allowing for the strong Dollar – something most analysts ignore:

Gold/Selozi – I think we talked about last week how gold only looks weak because it's priced in Dollars.  If you are in any other country, gold is doing great vs. your currency.  So, rather than play gold, I like ABX or other miners (but I like ABX) on any weakness because they sell gold all over the World and their earnings don't correlate to the Dollar the way straight gold does.  Overall, I think gold will be $1,500 by 2018 as inflation kicks in.  

We love ABX and play them all the time but they are not in our OOP other than some short puts so let's add the following play:

  • Sell 10 ABX 2019 $15 puts for $3.50 ($3,500) 
  • Buy 20 ABX 2019 $13 calls for $5.25 ($10,500)
  • Sell 20 ABX 2019 $20 calls for $3 ($6,000) 

That's net $1,500 on the $16,000 spread so we have upside potential of a $14,500 profit (966%) in two years and our worst-case scenario is having 1,000 shares of ABX assigned to us at net $16.50 and the ordinary margin requirement on the short puts is only $1,680 so very efficient way to make $14,500 – about $500 a month back on our investment if we're on track!

Talk about easy money!  The short puts are already down to $1.82 ($1,820) and the $13/20 spread is in the money at net $3.90 ($7,800) for net $5,980, which is up $4,480 (up 298%) but not even 1/3 of the way to goal so I think we'll keep these for sure.  

Tuesday, Nov 22nd, it was time to revisit an old favorite but first I reiterated our call on ABX – just to make sure no one missed it and then we got to this:

CLF/Maya – Damn, when you put it that way, it's hard to turn down, right?  Actually, in the LTP, our position is 30 long 2019 $4 calls, now $5 (up 100%) and we sold 35 2018 $4 puts for $2.80, now 0.48 and this net $2,300  credit spread is now worth about $11,500 after a wild ride so let's not "adjust" it but take it off the table and make a new trade on CLF for the LTP, which will be:

  • Sell 20 CLF 2019 $7 puts for $2.25 ($4,500) 
  • Buy 40 CLF 2019 $5 calls at $4.60 ($18,400)
  • Sell 40 CLF 2019 $10 calls for $2.55 ($10,200)
  • Sell 10 CLF Jan $8 calls for $1.13 ($1,130) 

So we're cashing in $11,500 and keeping the original $2,300 credit for a $13,800 profit and now we're putting $2,570 back to work with a $17,430 upside at $10 and we can sell more short calls along the way.  

Jan is just a 60-day sale out of 787 days to long expiration so not even 10% and on just a 1/4 sale we're pulling down $1,130 – easy $10,000 of spare change in our pocket every couple of months is a Do Your Own Dividend kind of stock and, with over $11,000 in profits safely in our pocket, there's nothing scary about potentially being assigned 2,000 shares for $7 ($1,400).

This is a good nutshell example of how our tree-planting system works.  This is year 3 of a trade we initiated with no money down, agreeing to buy $12,000 of CLF and now we've got $10,000 in our pockets, a slightly more aggressive trade (two years to get from $8 to $10) and a $500 monthly income.  Now that's INVESTING! 

Yet another huge success story and all we're doing is following the news and contemplating the repercussions of a Trump Presidency.  Investing isn't hard when you stick to the Fundamentals…  The 10 short Jan $8 calls expired on Jan 20th at 0.73 ($730) so up $400 there.  The short $7 puts are a mile out of the money at $1.20 ($2,400) and the $5/10 spread is miles in the money already at $3.07 ($12,280) for net $9,150, which is a gain of $6,580 (356%) but the potential on the spread is $20,000, which would be up $17,430 so this trade is just "on track".  

Thursday, Dec 1st, we had a spread using SCO and SDRL:

SCO/Yodi – Was waiting for options prices to settle down to make it official.  SCO is at $69.44 and the trade for the OOP is going to be:

  • Buy 10 SCO Jan $65 calls for $9.68 ($9,680)
  • Sell 10 SCO Jan $70 calls for $7.30 ($7,300) 
  • Sell 20 SDRL 2019 $1.50 puts for 0.80 ($1,600) 

That's net $780 on the $5,000 spread, which is better than the $2,000+ on the $10,000 spread I was contemplating above but with a lower target (the $75 calls are $5.60).  Worst case to the downside is we're long $3,000 worth of SDRL – worth it!  

SCO didn't fall 50%, they had a 2:1 split and we finished the Jan spread at $34.31, which was effectively $68.62 or $3.32 ($3,320) and that leaves us with the short SDRL puts, now 0.90 ($1,800) so net $1,520 is up $740 (95%) but we've since lost faith in SDRL, so we're done with this trade entirely.

Friday, Dec 9th, we thought we were getting a bargain as RH tumbled down to $30:

RH/Rick – I liked them when they were $30 years ago and I guess I should like them again at $33 but they are only making $1.25 per share for a p/e of 26.4 so really only priced right for that kind of business (and that's giving them some slack in this over-valued market).  They are getting killed today after BEATING for Q3 but guided Q4 down severely and it's being extrapolated to DOOM FOREVER.   

Image result for extrapolation hobby

However, it's a good call on a stock I certainly wouldn't mind scaling into so, in the LTP, we can put a flag down and sell 10 of the 2019 $25 puts for $6 to put $6,000 in our pockets while we wait to see where these guys settle down.  If they go lower (I very much doubt below $25), then we can add a bull call spread ($25/35, currently $5) but no rush at all.

As you can see, they hit our target floor at $25 but we were in Vegas and forgot to add the bull call spread at the time – though I still like the plan.  The puts, by themselves, are now $7.40 ($7,400) so down $1,400 (23%) and I still like that sale along with 10 2019 $25 calls $9.75 ($9,750), selling 10 of the $35 calls for $6.20 ($6,200) for $3,550 so we still have a net $2,450 credit (or a $3,850 credit if starting from scratch) and our worst case is owning RH at net $22.55 – 16% below the current price.  That's an official add for our LTP!  

Fortunately, that Dec 9th post was a double and we again picked WTW as they had pulled back to even better prices than our November entry: 

WTW/Hanj – I'd sell 10 2019 $8 puts for $2.40 ($2,400) and consider that free money and pick up 10 2019 $5 ($6)/12 ($2.50) bull call spreads for $3,500 for net $1,100 on the $7,000 spread that's $5,000 in the money to start.  In fact, that's such a good spread we will add it to the OOP (so much for cutting positions!).  

This version of the spread was even better and the $8 puts are down to $1.95 ($1,950) and the aggressive $5/12 spread is $4.40 ($4,400) for net $2,450 so up $1,350 (181%) on our 2nd attempt.  Max gain on this one is $5,900 so plenty of room to run!  

As a throwaway trade idea, I also mentioned NAK, one of the few penny stocks we play and it was $1.50 at the time and promptly doubled:

Friday, Dec 16th, it was time for our Trade of the Year for 2017 to be revealed and we chose SLW with a whole post explaining why.  The actual trade idea was:

In our Long-Term Portfolio, we already have 40 short 2018 $15 puts that we sold for $4.80 ($19,200) in December of last year.  After a wild ride, the stock is back where we started but those short puts are now $1.97 ($7,880) due to premium decay for a first year profit of $11,320 (58%), right on track.  We had longs on SLW in the STP, but we cashed them on the bull run (which is why they were in the STP and not the LTP!).  

For the LTP, I want to add 20 2019 $15 ($5.50)/$25 ($2.75) bull call spreads for net $2.75 ($5,500), which pay $20,000 at $25.

In the Options Opportunity Portfolio (OOP) we'll play it like this:

  • Sell 10 SLW 2019 $17 puts for $4.20 ($4,200) 
  • Buy 20 SLW 2019 $15 calls for $5.50 ($11,000)
  • Sell 20 SLW 2019 $25 calls for $2.75 ($5,500) 

That's net $1,300 on the $20,000 spread so the potential upside is $18,700 back on cash (1,438%) and ThinkorSwim says the net margin on the short puts is just $3,226 so it's a super-efficient trade and we'd be happy to buy more if it goes lower, which it might on a stronger Dollar.  Worst-case is we get assigned 1,000 shares at $17 ($17,000) plus the $1,300 cash we spent so net $18.30 a share is our worst case and yes, it's an aggressive ownership – that's how we're making 1,438% back on cash, silly!  

If we end up owning 1,000 shares of SLW, I can see that, at the moment, we can sell the 2019 $17 calls for $5, which would drop our net to $13.30, which is why you have to learn to think several moves ahead when setting up options plays and you'll find the risks are a lot more manageable when you have a good plan going in!  

In the LTP trade, the 40 short Jan $15 puts are now 0.73 ($2,920) which are up $4,960 from the $7,880 credit entry at $1.97 and, of course, a much bigger winner off the original $4.80 entry for our Chat Room Members.  Still, not bad for coming to the party late, right?  Everyone got in the bull spread at the same time and the $15/25 spread is already at $4.55 ($9,100) so net $6,180 is up a quick $8,560 (359%) but not even halfway to our full $22,380 potential profit.  

Our 2nd SLW trade (it is the Trade of the Year, after all) is also going like gangbusters as the aggressive $17 puts have already fallen to $2.25 ($2,250) while the same spread is the same $4.55 ($9,100) so net $6,850 is up $5,550 (427%) from our net $1,300 entry and also simply on track for the full $20,000 payoff.  

Friday, Dec 23rd, we were not on vacation and found 3 trades we liked into the holidays.  Trump's tweets made us feel the need for defense stocks as well as a Dow hedge:

Putin responded to Trump's nuclear tweet (yes, apparently, this is how we conduct diplomacy now) by saying: "We need to strengthen the strategic nuclear forces, for that we should develop missiles capable of penetrating any current and prospective missile defense systems."  He also called for the balanced development of all branches of the armed forces, precision weapons, modern means of communication and inspection as well as electronic warfare systems.  There was, of course, much celebrating among Global defense contractors and Putin himself will make Billions through his control of Russian contractors.

Because of their work on nuclear fusion, Lockheed Martin (LMT) is our favorite US defense contractor and they've been down recently as Trump tweeted out his displeasure with F35 cost overruns but, overall, we think it's a nice opportunity to go long LTM:

  • Sell 5 LMT 2019 $200 puts for $13 ($6,500)
  • Buy 5 LMT 2019 $220 calls for $45 ($22,500) 
  • Sell 5 LMT 2019 $260 calls for $23 ($11,500) 

That puts you into the $20,000 spread that's 80% in the money for net $4,500 so the upside potential, if LMT just manages to move up $10 in two years, then it's a profit of $15,500 (344%) and ordinary margin on the short puts is about $10,000 but those puts are a nice 20% discount to the current price – we're playing conservative because we do expect a market pullback.

LMT took off nicely and the $200 puts are down to $9.30 ($4,650) while the $220/260 spread is now well in the money at $26.30 ($13,150) for net $8,500 which is up a quick $4,000 (88%) and on track for the full $20,000.  

We also like Raytheon (RTN), who get paid almost $2M every time the US fires a Tomahawk missile (and we do that a lot!).   So, to bet on the escalating cold war (and the proxy wars we love to fight), we like:

  • Sell 5 RTN 2019 $120 puts for $8.50 ($4,200) 
  • Buy 5 RTN 2019 $120 calls for $29 ($14,500) 
  • Sell 5 RTN 2019 $145 calls for $15 ($7,500)

In this case net $2,800 in cash buys us a $12,500 spread so the upside potential at $145 (where we are now) is $9,700 (346%).  As with the LMT trade, we're being conservative in our initial entry, in case the market sells off but, if it doesn't, nothing wrong with "just" making a 346% return on cash.  Margin requirement for 5 short $120 puts is just $6,000, so it's a  nice, margin-efficient trade as well.

RTN's chart is just like LMT and, in this case, the short puts have fallen to $5.90 ($2,950) while the bullish spread is now $17.70 ($8,850) for net $5,900, up $3,100 (110%) but also just on the way to the full $12,500.  

Also, a hedging play against a market crash:

On the whole, I think there's a great opportunity for a contrarian play here, shorting the Dow (DIA) using the 2x Ultra-Short (DXD), which is currently at $13.94.  A trade set-up I'd like is:

  • Sell 10 BBBY 2019 $35 puts for $4 ($4,000) 
  • Buy 40 DXD April $13 calls for $1.50 ($6,000)
  • Sell 40 DXD April $16 calls for 0.45 ($1,800) 

It doesn't have to be Bed Bath and Beyond but they just missed on earnings and will have good put prices to sell and we think they are a real bargain at $35, so we'd be thrilled to be assigned at that price (now $44, so more than 20% off).  We take the money we are given in exchange for promising to buy BBBY for 20% off (net $35,000 for 1,000 shares) and we use that to make a net $200 cash entry on the $12,000 spread that's $4,000 in the money to start.

So this trade can't lose (assuming you REALLY want to own BBBY) unless the Dow is well over 20,000, which makes it a perfect hedge and we'll be adding it to our Short-Term Portfolio this morning.  If the Dow does head lower and DXD is over $16 at April expirations, the profit potential is $11,800 for a 5,900% return on cash – that's good insurance!  

The Dow has gone completely crazy since then and that has sent DXD plunging but the April $13 calls are still 0.45 and they can be rolled to the July $12 ($1.30)/16 (0.35) bull call spread at 0.95 so net 0.50 ($2,000) to extent the insurance another quarter – which is the proper way to play it.  The BBBY puts are still $3.45 ($3,450) so not much help there so far but, as long as they ultimately expire worthless, it's essentially free insurance.  Still, for scorekeeping purposes, the spread is now net -$2,050, so down $2,250 (1,125%) at the moment.  

Tuesday, Dec 27th was our last Trade Idea for 2017 and, as I had just put out our Secret Santa's Inflation Hedges for 2017, I thought it would be a good idea to reiterate my love for our Trade of the Year:

So, officially, the trade change would be (and we'll add it to the OOP as our 2017 Trade of the Year):

  • Sell 10 SLW 2019 $15 puts at $2.80 ($2,800) 
  • Buy 15 SLW 2018 $15 calls at $4.75 ($7,125)
  • Sell 15 SLW 2018 $20 calls at $2.65 ($3,975) 

That's net $350 on the potential $7,500 spread for a gain of $7,250 (2,053%) gain if SLW is at $20 in Jan 2018 and stays over $15 in Jan 2019.  Worst case is owning 1,000 SLW at $15.35 and the spread, of course, is already $2.75 in the money ($4,125) – what's not to love!  

In the LTP, we'll make a similar play but we can afford to take a different risk so it will be like this:

  • Sell 20 SLW 2019 $17 puts for $4 ($8,000) 
  • Buy 50 SLW 2019 $15 calls for $5.90 ($29,500) 
  • Sell 50 SLW 2019 $25 calls for $2.70 ($13,500) 
  • Sell 20 SLW June $20 calls for $1.45 ($2,900)

That's net $5,100 on the $50,000 spread and we're only obligated to own 2,000 shares of SLW at $17 ($34,000) plus, if we lose the $5,100, it's $39,100 or $19.55/share so a bit riskier but two years to goal and 6x more upside is worth the risk, mostly because it's a LONG-TERM portfolio and if SLW goes south for 2 years, we can go 2 more years no problem.  

On the whole they are minor variations of the other two so I'm not going to count them as winners but I am going to say how much I love SLW as a Top Trade for 2017!  

So that's officially 11 winners out of 14 trade ideas for November and December, a much better 78.5% winning percentage and, of course, one was a hedge – it's not supposed to win.  Added to our now 11 of 16 winners for Sept/Oct, we're 22 of 30 and 73% for year 2 so far.  Since we now try to remember to give position sizes as well, we can go back and count a net gain on the 14 trades of $34,490 in just over 3 months – not a bad way to get 2017 started – no wonder this portfolio is so popular!  

Remember:  At PSW our PHILosophy is to Teach a Man to Fish – not just give out fish and, if you'd like to learn to identify your own Top Trades and we've been making you good money on these fish – why not try upgrading your Membership to our Live Member Chat Room and learn how to fish like we do – every day.


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  8. SEOUL, South Korea — China said on Saturday that it was suspending all imports of coal from North Korea as part of its effort to implement United Nations Security Council sanctions aimed at stopping the country’s nuclear weapons and ballistic-missile program.<p>The ban takes effect on Sunday and will …

  9. MUNICH — Vice President Mike Pence vowed Saturday that the United States will “hold Russia accountable” even as President Donald Trump searches for new common ground with Moscow at the start of his presidency.<p>Pence, in an address to the Munich Security Conference, also offered assurances to …

  10. Samsung will get a jump on Apple with its next-gen display on the Galaxy S8.<p>What does that mean to consumers? By shrinking the bezel (borders), Samsung will be able to increase the display size of the S8 but keep the physical size of the device more or less the same. That’s the beauty of next-gen …

  11. Back in August, we noted that, for the first time since it’s creation in 1996, the Norwegian government had started raiding its sovereign wealth fund …

  12. The once ‘hobby’ Apple TV has been gaining quite a bit of attention from Apple over the last year. tvOS 10 brought in a new Dark mode option for users system wide, while version 10.1 brought in the new TV app.<p>With rumors of Apple integrating its own TV bundle service to the system coming and going, …

  13. When politicians talk about “crumbling infrastructure,” it’s often hard to ascertain exactly what they’re talking about. Is it bridges falling down, an excessive number of potholes, or maybe aging airports? It could mean any number of things depending on who’s talking and who’s listening.<p>This week, …

  14. Popular Domestic Programs Face Ax Under First Trump Budget

    WASHINGTON — The White House budget office has drafted a hit list of programs that President Trump could eliminate to trim domestic spending, including longstanding conservative targets like the Corporation for Public Broadcasting, the Legal Services Corporation, AmeriCorps and the National …

  15. • <b>Investors are focusing on upcoming European elections as risks, but the French outcome matters much more than what happens in Germany, the Netherlands, or Italy.</b>• <b><br>Concerns about China’s economy and the Federal Reserve’s interest-rate decisions were blamed for a stock market sell-off last year</b>• <b><br>They</b> …

  16. And it will be mostly due to the work of his predecessor<p>The dysfunction at the highest levels of the American government right now obscures a dramatic reality: Donald Trump is going to defeat the Islamic State, and Americans need to be fine with that.<p>Like most of the people reading this, I have …

  17. The last time General Motors made a profit in Europe was the 20th century.<p>GM’s European division—which produces Opel and Vauxhall-branded cars—has lost money every year since 2000. Over those 17 years, the losses add up to a whopping $20 billion.<p>Now, rumors have rekindled that GM is considering a …

  18. A proposal from the House GOP to dismantle Obamacare would also fundamentally alter the way Medicaid works.<p>Medicaid has essentially functioned the same way for half a century. Eligibility for the program has changed, most notably when Obamacare extended an option to states to expand coverage to all …

  19. The earth’s eighth continent is believed a piece of the ancient super-continent Gondwana.<p>Hail, Zealandia! It’s not the lost city of Atlantis, but scientists say they’re convinced they have discovered the planet’s eighth continent sprawling underwater beneath New Zealand.<p>Australia and adjacent New …

  20. (DUBAI, United Arab Emirates) — Two of President Donald Trump’s sons arrived in the United Arab Emirates for an invitation-only ceremony Saturday to …

  21. TORRANCE, Calif. (AP) — There’s been an explosion and fire at an oil refinery near Los Angeles less than a year after a blast that crippled the plant and led to higher gasoline prices.<p>Torrance Assistant Fire Chief Steve Treskes says the explosion was reported at 6 a.m. Saturday, but three dozen …

  22. Tesla has come under fire in the wake of an explosive crash in Indianapolis involving a Model S battery-electric vehicle that took the life of a young woman and her boss.<p>The automaker had previously taken steps to prevent the lithium-ion batteries used in its vehicles from inadvertently catching …

  23. At conference of world leaders, McCain blasts Trump’s worldview

    Without ever mentioning President Trump by name, Sen. John McCain used a speech in Germany on Friday as an international platform in an apparent blast at his fellow Republican’s policies and worldview.<p>Speaking at the 2017 Munich Security Conference, McCain, R-Ariz., chairman of the Senate Armed …

  24. <b>Given Donald Trump’s recent behaviour, I’ve concluded the U.S. market has probably run up as far as it’s likely to go, and I’ve been selling off some of my U.S. stocks that are overbought to prepare for a buying opportunity I see coming. I don’t want to sell everything, because my remaining stocks</b> …

  25. Two people were killed as a series of powerful storms soaked Southern California, flooding freeways and knocking out power to tens of thousands.<p>A 55-year-old man in Sherman Oaks, Los Angeles, died after apparently being electrocuted by live power lines brought down by a tree, and a person was found …

  26. Phil/Phil Just wanted to say thanks for the conference in Vegas. My main takeaways were 1)  be patient with my option trades 2) don't be afraid to take profits on my futures trades (I've been too bearish and rather that take the small wins was waiting for a home run and as a result getting beat up - this week took quick profits on 2 oil and 3 index futures trades that paid for my conference) 3) improved understanding of how and when to look at rolling positions.

    Same time same place next year :)

  27.  That's what I like to hear! So glad you enjoyed the conference, it's all worth it if I'm able to help people trade better. I think there is some stuff that is better conveyed face-to-face.   Don't be shy in chat though, that's what I'm here for.  

  28. A growing roster of Republicans and Democrats on Capitol Hill say they believe President Trump’s pugnacious rhetoric and unpredictable behavior threaten to diminish the United States’ standing around the world, do real damage to fragile diplomatic ­relationships and even weaken global …

  29. In some cases, immigrant communities in the U.S. are actually safer.<p>The new administration has made no secret of its stance on immigration. As far back as 2015, Donald Trump has this to say about new arrivals from Mexico: “They’re sending people that have lots of problems, and they’re bringing …

  30. It seemed harmless enough.<p>In a tweet celebrating the Feb. 12 birthday of Abraham Lincoln, the Republican National Committee attributed a short quote to the 16th U.S. president. It was an uncontroversial maxim, if ever there was one.<p>“And in the end, it’s not the years in your life that count,” it …

  31. Goldman Sachs really wants the market lower.<p>After several increasingly more comprehensive critiques of Trump’s fiscal policies, on Friday, just as …

  32. Not long after House Speaker Paul Ryan offered a full-throated affirmation of his tax-overhaul plan, an influential conservative group announced a …

  33. “Europeans have to take more responsibility for their own security”<p>Lemon goes ape over the phrase ‘FAKE NEWS.’<p>What mainstream media refuses to …

  34. A bitter battle for taxi drivers’ rights has been playing out in the streets of New Delhi.<p>While Uber continues to deal with the fallout of the …

  35. Melbourne, Fla. (AP) — Just four weeks into his administration, President Donald Trump held a campaign rally in Florida on Saturday, repeating his …

  36. The face of <b>International Business Machines</b>’ (NYSE:IBM) transformation is Watson. Bursting onto the scene in 2011 by winning a game of <i>Jeopardy!,</i> IBM’s …

  37. The Economist explainsHow Marine Le Pen could win the French presidency<p>The leader of the nationalist Front National has led in polls for the first …

  38. Then President-elect Donald Trump told members of his golf club in Bedminster, New Jersey to “come along” to observe potential Cabinet picks and other members of his administration as they arrived at the club to meet with him in November.<p>In a newly-leaked audio recording, published by Politico …

  39. Reproductive technologiesGene editing, clones and the science of making babies<p>Ways of reproducing without sexual intercourse are multiplying. History …

  40. President Donald Trump is giving the phrase “multipolar world” an entirely new meaning<p>If there’s a single consistent aspect to Donald Trump’s strategic vision, it’s this: U.S. foreign policy should always be governed by the simple principle of “America First,” with this country’s vital interests …

  41. 0 0<p>Solar energy is becoming ever more widespread, with panels going up not only on houses and office buildings, but on cars, buses, and road signs. …

  42. <i>This is a syndicated repost courtesy of Money Morning. To view original, click here.</i> Reposted with permission.<p>Share!<p>During a Feb. 14 interview with</b> …

  43. BARCELONA, Spain — At least 160,000 protesters marched Saturday in Barcelona to demand that Spain’s conservative-led government increase its efforts to take in refugees from war-torn countries like Syria.<p>Spain has accepted just 1,100 refugees of the more than 17,000 it has pledged to take …

  44. They still won’t look into Trump’s conflicts of interest.<p>The chairman of the House Oversight Committee Rep. Jason Chaffetz (R-UT) has refused all …

  45. Counselor to the President Kellyanne Conway has taken heat from various quarters for everything from challenging reality with ‘alternative facts,” to …

  46. Trump’s attempts to lower expectations don’t really hold up with reality.<p>During President Trump’s rather eventful press conference Thursday …

  47. A free and at times adversarial press is essential “if you want to preserve democracy,” Republican Senator John McCain in responding to President …

  48. It’s amusing to see how views start to converge, at the same time that it’s tiresome to see how long that takes. It’s a good thing that more and more …

  49. About a year ago, in a widely reported story, journalists at British newspaper the <i>Telegraph</i> found little black boxes installed under their desks. The …

  50. David Tepper’s Appaloosa went big on pharma stocks in the fourth quarter.<p>The fund took big new positions in Teva ($183 million), Pfizer ($156 million), and Mylan ($125 million) in the final three months of the year, according to a 13F filing. They were the fund’s biggest new positions in the period.<p>…

  51. A rocket in his pocketNorth Korea’s dictator challenges Donald Trump<p>Kim Jong Un tests another missile<p>Asia<p>Feb 15th 2017<p>IF NORTH KOREA’S test of a …

  52. SAN FRANCISCO (Reuters) – The U.S. Federal Bureau of Investigation is pursuing at least three separate probes relating to alleged Russian hacking of the U.S. presidential elections, according to five current and former government officials with direct knowledge of the situation.<p>While the fact that …

  53. A Look at Mar-a-Lago’s Members, and Who Has a Front-Row Seat to History

    On any given weekend, you might catch President Trump’s son-in-law and top Mideast dealmaker, Jared Kushner, by the beachside soft-serve ice cream machine, or his reclusive chief strategist, Stephen K. Bannon, on the dining patio. If you are lucky, the president himself could stop by your table for …

  54. Recent studies show that average electric vehicle battery cost dropped 80% in 6 years down to ~$227/kWh. It’s exciting progress for the electric vehicle industry, but it’s still not enough to make long-range electric cars affordable.<p>You need batteries significantly below the average – battery cell …

  55. There was more solar capacity added in 2016 than any other type of electricity generation.<p>If humanity wants to have any chance of slowing the rapid …

  56. WASHINGTON—The Trump administration has drafted preliminary economic growth forecasts in its federal budget planning that rely on assumptions that are far rosier than projections made by independent agencies and most private forecasters, according to several people familiar with the discussions.<p>The …

  57. This is how the muzzling starts: not with a boot on your neck, but with the fear of one that runs so deep that you muzzle yourself.<p>Maybe it’s the story you decide against doing because it’s liable to provoke a press-bullying president to put the power of his office behind his attempt to destroy …

  58. Donald Trump’s family’s trips have cost taxpayers nearly as much in a month as Barack Obama’s cost in an entire year.<p>The US President’s three visits …

  59. President-elect Donald Trump delivers remarks at the Chairman’s Global Dinner, at the Andrew W. Mellon Auditorium in on January 17, 2017, in …

  60. Volkswagen AG unveiled a battery-powered version of its iconic hippie-era Microbus as the carmaker overhauls its U.S. lineup to move beyond its …

  61. Hi Phil,

    Just following up on ESRX.  Their cash flows are definitely impressive and I know you are recommending to step in cautiously.  Please ignore if you have seen this already but I came across this article from Citron Research/Andrew Left  which talks about the risk of rebates going down in the future which the article claims to be the source of cash flows for ESRX and other PBM companies.  Note comment of Eli Lilly management in the article.

    Of course, the ESRX management is blaming the drug companies for the high prices…

    And with the Trump administration looking into this, either case, perhaps increased volatility in cash flows has higher odds for the future. 

  62. Big drop in NGH7 – 2.78   Have 2 long at 2.83 need to roll or close soon

  63. With temperatures reaching 70 in the east this week and not getting a lot lower for the next ten days and much the same all week in the Midwest, nat gas is definitely not an easy long right now. 

  64. Regarding the TSLA crash, the girl was drunk and driving at a high rate of speed.

    Other news:

  65. Good morning!  

    Good explanation of the Border Tax Scam:


    Futures are open and they popped earlier with oil hitting $53.80 but calming down a bit now.  

    Dow topped out at 20,671, S&P 2,356, Nas 5,345 and Rut 1,405 but BS, low-volume moves.  

    I'm in 2 /CLJ7 shorts at $54.01 and, of course, my /KCN7 longs at $150.10 and I'm adding 2 /NGV7s now as they just dipped to $3.10 from $3.20 on Friday, where I wasn't as keen on losing 0.20 before I doubled down at $3.  Here's the EIA model for the year:

    Image result for natural gas storage 2017

    People are freaking out because it's going to be 70 in NY in Feb but /NG is getting globalized and the EIA projects we'll steady out at $4 next year – same as I've been saying:

    So I'm buying low and hope to sell high at a later date but, to be very clear, If we're at $2.50 and down $5,000 per contract – all I'm going to do it buy more.

    ESRX/Learner – Certainly there's a risk, that's why the price is so low vs current earnings.  I think they'll settle somewhere in between and the panic will subside.  "Trump looking into this" means looking to get their palms greased to lay off – that's all.  This is a Banana Republic now, that's how the games are played. 

    TSLA/Burr – For sure if people drive cars, people will wreck cars, but other cars don't incinerate people when the battery casing is cracked – that's the issue.  If they don't address this with the model 3 and start selling 10x more of them than the model S – this stuff will be in the papers every week instead of a couple of times a year.  

    Emergency responders reported that when they arrive at the scene, individual batteries from the Tesla's pack were popping out of the vehicle and exploding.

    And it's no worse than a gas-engine fire but that's not the public perception, this is strange and unknown – just like CMG or Taco Bell giving people food poisoning is a natural part of serving 10M people a day fresh food. 

  66. Real quite this morning — you all can't still be recovering from the LV trip!!?  :)

  67. Burr – so the takeaway is..  ~~With OPEC putting a floor under prices at $50 per barrel, there is no reason for hedge fund managers to run significant short positions, and little downside risk to long positions at $55.
    OPEC has in effect given hedge funds a free put option, reminiscent of the Greenspan put which underpinned equity valuations in the late 1990s and early 2000s.

    I am also wondering if dollar weakness , as inflation picks up speed, will, make CL rise.

  68. We can't be near a top if money is only just starting to come back in, can we?

  69. to: biodieselchris     (and PSW) 

    Since you are our resident expert…..

    Does the science behind this make any sense? They are soliciting investors, but I haven't heard the pitch. I was just wondering if it would be worth my time.

  70. I would be very cautious shorting /CL long term now – there is just another layer of uncertainty that has been added. The Trump administration is just so erratic now that you don't know which way it's going to go. Look at the Middle-East problems –  we don't know about Iran, or what we told Bibi about finding a possible solution. Mathis is in Iraq to tell them we are not going to take their oil… It's a mess. On the bright side, ISIS is losing badly now, but that was already happening. The bad side of that could be added influence from Iran in the region and renewed interest in the Israel/Palestinian problem in a bad way!

  71. Im going to add the uso long position tomorrow and prob be more long cl than short, until the contract gets close to exp.  I think we test 55.  No, it's not logical with the increases, but it seems the big money is with the long trade.  Sometimes the market can remain irrational longer than I can stay solvent!

  72. Among the best performing areas of the emerging markets, India country-specific exchange traded funds have made a drastic surge since the start of the new year.<p>Specifically, the India ETFs that focus on small capitalization stocks have been among the best performers in the emerging markets category …

  73. 4 billion years of technology in one infographic

    Thinking about time and human progress is pretty mind-bending.<p>The Earth formed 4.6 billion years ago, and single-celled organisms have existed for about 4 billion of them. Yet, modern humans have only been around 50,000 to 200,000 years, depending on how you define “modern”.<p>About 30,000 years ago, …

  74. Costco and its rival Walmart are “big box” retailers that offer lower prices without fancy surroundings. Warehouse clubs, in other words. Sign your name, fork over $55 for a one-year membership (double that for “business membership”), and they let you in the door. For some folks, the big attraction …

  75. In the latest surprising announcement to emerge from the Trump White House, the WSJ reports that the Trump administration is considering changing the …

  76. By Lauren Hirsch and Greg Roumeliotis<p>(Reuters) – Restaurant Brands International Inc, owner of the Burger King and Tim Hortons fast-food chains, is nearing a deal to acquire Popeyes Louisiana Kitchen Inc, people familiar with the matter said on Monday.<p>The deal, which will likely value Popeyes at …

  77. The post-crisis years have not been good for real assets, the catchall term for commodities, energy, real estate and other investments based on selling real things instead of clever ideas. But with signs of inflation emerging and the Trump rally pushing stocks to levels not seen since the tech …

  78. ABC<p>ABC White House reporter Jonathan Karl closed a show on Sunday with a declaration: Reporters will keep doing their jobs despite President Donald Trump’s declaration that news outlets were “the enemy of the American people.”<p>Filling in for George Stephanopoulos on “This Week,” the ABC reporter …

  79. Remember Solar Impulse 2, the solar-powered plane that circumnavigated the world in July 2016? This could be the ocean-going equivalent. In a bid to prove the effectiveness of hydrogen as a renewable fuel, Victorien Erussard and Jérôme Delafosse will sail around the world in a boat powered by the …

  80. Tesla (TSLA) is set to release its fourth quarter 2016 and full year 2016 financial results on Wednesday, February 22 after market close. As usual, the release of the results will be followed by a conference call and Q&A with Tesla’s management at 2:30pm Pacific Time (5:30pm Eastern Time).<p>Now …

  81. Or at least amputate your legs<p>Hoversurf, a Russian company that builds drones, posted a video last week showing off its latest prototype: the Scorpion-3, a single-seat, electric-powered hoverbike that looks cool as hell but probably won’t be ready for the X Games anytime soon.<p>The manufacturers say …

  82. This state-run Chinese paper loves to bash Trump (and warns of war)

    BEIJING — There’s no question that China’s hawkish Global Times newspaper has been harsh in its assessment of America’s new president.<p>The state-run tabloid has called President Donald Trump “reckless,” “unfit to lead a superpower,” and “as ignorant as a child” regarding foreign policy.<p>One recent …

  83. by Secular Investor – Feb 19, 2017 9:21 AM<p>Their actions speak louder than words…<p>”Europeans have to take more responsibility for their own …

  84. Montreal city council passed a motion on Monday making it the latest Canadian jurisdiction to declare itself a “sanctuary city.”<p>The designation means undocumented refugees will have full access to local services regardless of their status, with the city following in the footsteps of Toronto, …

  85. As a trader, the Economic Calendar is one of your best friends. You will only spend one minute or less with it a day, but that one minute--every …

  86. China’s central bank has stepped up oversight of bitcoin exchanges this year, leading major trading platforms to impose halts on withdrawals and other checks to appease the regulator. But Chinese traders aren’t playing along—they are apparently flocking to peer-to-peer marketplaces to continue …

  87. <b>New York (CNN) —</b> Donald Trump has a vast online portfolio of domain names — digital addresses that foreshadowed his political career, business projects and accusations of unethical behavior.<p>Before he reached the White House, Trump’s company had laid claim to at least 3,643 website domains, …

  88. In China, there’s a high price to pay if a man wants a wife.<p>“The poorer the area is, the higher the dowry price,” said state mouthpiece People’s Daily today (Feb. 20) on a recent survey mapping the customary dowries paid by men across China.<p>The going rate of a dowry in some of the poorest provinces …

  89. It’s hard to argue against automation when statistics are clearly illustrating its potential. The latest evidence comes out of a Chinese factory in Dongguan City.<p>The factory recently replaced 90 percent of its human workforce with machines, and it led to a staggering 250 percent increase in …

  90. The European Union may not feel much like a family these days, but its leaders do tend to bicker like one over questions of money and pride, …

  91. 2016 was an amazing year for the solar industry overall, even if it wasn’t great for solar stocks. GTM Research recently reported that its upcoming U.S. Solar Market Insight Report done with the Solar Energy Industries Association will reveal a 95% jump in installations last year to 14.6 GW.<p>To put …

  92. What happens when auction house goblins can buy Hearthstone cards?<p>There has been an economic panic in <i>World of Warcraft.</i> On Feb. 6, Blizzard changed the rules, allowing players to exchange WoW Tokens for balance. That means that gold you earn or buy in <i>World of Warcraft</i> can now be used in</i> …

  93. <b>Opponents of US President Donald Trump know he has responded to comments about the size of his hands before.</b><p>Now, some internet users have gone one step further and doctored images to make his whole body look miniscule.<p>At 6ft 2in (187cm), Mr Trump is taller than many world leaders and edges ahead of …

  94. The international community may prioritize the issue of nuclear war, but world leaders are overlooking another, greater threat: A genetically …

  95. Goldman Sachs analysts believe investors and traders in the stock market are acting irrationally.<p>“Cognitive dissonance exists in the US stock …

  96. Trump Pursues His Attack on Sweden, With Scant Evidence

    LONDON — President Trump escalated his attack on Sweden’s migration policies on Monday, doubling down on his suggestion — based on a Fox News report — that refugees in the Scandinavian country were behind a surge in crime and terrorism.<p>Mr. Trump set off consternation and ridicule on Saturday when …

  97. President Donald Trump, after a chaotic month of governing that included the botched roll out of his travel ban and being forced to fire his national security adviser, held a rally Saturday in which little was changed from the campaign trail.<p>Reveling in the crowd of 9,000 in Melbourne, Florida, …

  98. Phil, any thoughts on /RB long off the 1.50 line?  or /SI long when it crosses 18?

  99. I would think this would not be a good week to go long on /RB….after long weekend.  Maybe later in the week.  Of course that could be because I have a short on the April contract that I picked up at end of day on Friday.  :)

  100. /SI/Burr- only 3 days left on march contract. Might be time to switch to May or July?

  101. Good morning! 

    Nice spike in /CL now that they've gotten rid of the March contracts so, despite the Dollar, we're at $54.80 and I am shorting (/CLJ7) but only for a quick move.  March is still active and there's little pressure on the front-month (April) but this spike up is silly and probably reflects shenanigans of last-minute people trying to roll out. 

    Click for
    Current Session Prior Day Opt's
    Open High Low Last Time Set Chg Vol Set Op Int
    Mar'17 53.48 54.20 53.35 54.19 05:26
    Feb 21


    0.79 12980 53.40 35316 Call Put
    Apr'17 53.90 54.59 53.72 54.52 05:26
    Feb 21


    0.74 223058 53.78 477832 Call Put
    May'17 54.16 54.89 54.07 54.83 05:26
    Feb 21


    0.71 22086 54.12 227717 Call Put
    Jun'17 54.48 55.11 54.32 55.05 05:26
    Feb 21


    0.68 16691 54.37 257284 Call Put
    Jul'17 54.61 55.27 54.55 55.21 05:26
    Feb 21


    0.65 4036 54.56 112296 Call Put
    Aug'17 54.71 55.39 54.65 55.32 05:26
    Feb 21


    0.64 2355 54.68 80860 Call Put

    35,000 is a lot for a last day and, when the rest of those roll, the front 3 months will be pushing 1Bn but here comes May to save the day with the start of summer driving season and hope will spring eternal so it's not a very good time to short gas or oil (don't forget, we're still long on July oil calls) – we played out the dip – time to move on and find something else to trade (unless something changes). 

    Quiet/Latch – Yes, holidays are like that!  wink

    Fund flows/Scott – What if they are bearish funds?  If the negatives of 12 months gave us a massive rally, why will the positives do the same?  The dumb money is coming back – perfect time to sell.

    Suntowater/Stock – This is kind of funny as this is technology they are using in Africa (here's a wiki on it) because it's very cheap and does work well.  These guys seem to have dressed it up so they can charge 10x more to suckers in the US.  I'm always wary of companies who copy technology and act like they've invented the light bulb and, of course, 0.08/gallon may be what people THINK they pay for water but, if they pay attention to their water bill, they'd notice the actual water is more like 0.025 while the SEWER charge is 0.055 so the net cost of using a system like this would be substantially higher – even if the unit were free and required no filters or maintenance.  

    If a company wanted to pitch this technology – it would be better off pitching it as a simple bottled water replacement using a smaller scale.  Something that fits in your kitchen and holds a gallon of pure, cold water on demand for under $100 – that would be marketable!

    /RB/Burr – You can play it technically, of course, but strong Dollar makes it a dangerous play so quick money only.  Yes on /SI but also not the best play with a strong Dollar (101.50).

  102. Phil CL. Quick move is 54,5 line?

  103. Cleveland Fed chief 'comfortable' raising rates if economy keeps performing. Cleveland Federal Reserve President Loretta Mester said on Monday she would be comfortable raising interest rates at this point if the economy kept performing the way it did. "We did have a temporary oil price shock which held down inflation, we had the dollar appreciation which held down inflation. Those have passed through and the trend in inflation is, it's moving up," Mester said at a central banking seminar in Singapore. "So I'm comfortable that inflation is near its goal and moving towards its goal… I'd be comfortable with an increase in the (federal) funds rate at this point, if the economy keeps going the way it's going."

    The Mother Of All Financial Bubbles: "This Is The Very Definition Of Unsustainable"

    Dow, VIX, Gold All Up As Yet Another Ratio Screams "Record High"

    The Four Key Themes From Q4 Conference Calls

    Dollar Strengthens While Most Asian Equities Climb. The U.S. currency advanced against its major peers after a Federal Reserve official said a March interest rate hike is not off the table. The pound was the strongest among G-10 currencies as a debate among British lawmakers on Brexit headed into a second day. Traders are awaiting earnings from HSBC Holdings Plc and BHP Billiton Ltd. after a U.S. holiday damped activity on Monday. 

    Trump Seen Winning Support to Declare China as Yuan ManipulatorPresident Donald Trump would win congressional support if he declared China a currency manipulator as pledged during his election campaign, according to two members of the Senate Foreign Relations Committee. Senator Lindsey Graham of South Carolina, a Republican, said on a panel at the Munich Security Conference on Sunday that Congress has an opportunity to unite around action against China.

    CIBC's Stretch Says Investors Fear China Bubble Implosion

    Japan’s Exports Increase Less Than Forecast in JanuaryThe value of exports rose 1.3 percent in January from a year earlier. The median estimate of economists surveyed by Bloomberg indicated a 5 percent increase. Import values climbed 8.5 percent over the same period, versus an estimated 4.8 percent rise. This was the first increase since December 2014. ?


    Iran Mocks Trump Threats, Sets Sights on Gulf Nation DealsIran’s foreign minister mocked being “put on notice” in a tweet by U.S. President Donald Trump and said his country is focused on building Persian Gulf alliances. Mohammad Javad Zarif prompted laughter from a crowd of trans-Atlantic military and political officials at a global security conference on Sunday by observing that “tweet is now very fashionable’’ before answering whether his country was concerned about the possibility of more U.S. sanctions.

    Political Turmoil Returns To Europe: French-German Spread Blows Out To Five Year Wides

    European Bond Investors Seek Havens as Political Risks IncreaseEuropean bond investors gravitated toward the safest assets on Friday as political and economic developments pointed to a muddier outlook for the continent. German bunds led gains among core euro-region securities after French Socialist Party presidential candidate Benoit Hamon said he’s in talks with far-left candidate Jean-Luc Melenchon about a potential single candidacy. That boosts the chance that the anti-euro Marine Le Pen may not face a centrist candidate in the final round of voting in May. Austrian and Dutch securities also advanced.


    France is frightening the market, but Italy could be the real threat for investors

    Meanwhile, Rioting Breaks Out In Sweden

    Trump Slams 'Fake News' Lies That Sweden's Mass Immigration "Is Working Out Just Beautifully"

    Greek Bailout Deal Delayed for Months as Deadline Missed Again. The latest stand-off between Greece and its creditors looks set to go on for several more months as euro-area finance ministers poured cold water on a quick agreement that would unlock further loans. Where once officials had pinpointed Monday’s meeting of euro-area finance chiefs as the final chance for a deal before Europe’s politicians get too distracted with national elections, now the maximum that can be achieved at the talks in Brussels is agreement on when to send bailout monitors back to Athens.

    German Minister Calls For 'Plan B': "Greece Should Pledge Gold, Real Estate For New Loans"

    The eurozone peripheral nations paid a high price for single currency folly

    Citi sees copper futures peaking above $8,000 by 2020. A "dramatic" crunch in miners' capital spending had set the stage for the price of copper to peak above $8,000 per metric tonne by the end of the decade, Citi said. Citi's analysts said the worst investment drought copper miners had seen since 2012 had "eviscerated the copper project pipeline for much of the remainder of the current decade."

    A US panel has endorsed limited genetic modification of humans — here's what that means

    Image result for men in black two headed guy

    Donald Trump Ramps Up Media Attacks at Raucous Florida RallyPresident pushes back after a rocky four weeks into a term that has largely on the defensive.

    Trump Declares CNN, NYT, CBS, ABC And NBC Are "The Enemy of The American People"

    Priebus: Take Trump Seriously When He Calls The Press "The Enemy"

    Prospects For A Quick Obamacare Repeal Are Fading Fast

    Here's Why Your Auto Insurance Rates Have Soared Nearly 20% In The Past Several Years


    Philly Fed beating by 10 standard deviations, NFIB small business optimism at record highs, but Industrial Production is dropping, real wages are shrinking, and the housing market is imploding.

    debt balance feb 2017 COTD

  104. /CL/Latch – I try not to make up targets but rather just see how things are flowing.  Also, I keep reading to see if there's any news to support the pop in oil (none so far), which started about 2am so I'm more inclined to stick with it at the moment as long as we stay under $54.75 or I'll just take my $50 and go have an Egg McMuffin.

  105. Not much of anything going on today.  Only excuse for oil is this:

    Eurozone growth surges in February

    • Growth in eurozone business activity surged in February to its highest level in almost six years, according to the latest survey by IHS Markit.
    • The overall flash composite index of services and manufacturing spiked to 56.0, up from 54.4 in January.
    • "The ECB will be cheered by the signs of stronger growth… though will no doubt remain concerned that elections and Brexit could disrupt the business environment this year," said Chris Williamson, chief economist at IHS Markit.

    Tuesday's economic calendar

    Image result for putin trump cartoonRussia sees its rating returning to Investment Grade

    • Russia says it expects its sovereign credit rating to return to Investment Grade this year after Moody’s boosted its outlook on the country to Stable on Friday. (Bloomberg)
    • "The main driver for changing the outlook on Russia's Ba1 government bond rating to stable from negative is the government's enactment of a medium-term fiscal consolidation strategy that is expected both to lower the government's dependence on oil and gas revenues and to permit the gradual replenishment of its savings buffers," Moody's wrote. "In addition, the Russian economy is now recovering after a nearly two-year-long recession. Moody's believes that, when combined, those two factors have eased the downside risks the rating agency had identified last year when it assigned the negative outlook."
    • Moody's also noted "the economy's sheer scale and wealth as well as its healthy fiscal and external positions," but contrasted that with, "Russia's high susceptibility to geopolitical risk, with associated spillover to volatility in the real economy and financial markets, and relatively weak institutions."

    HSBC posts 62% fall in annual pre-tax profit

    • HSBC -5.5% premarket after the bank posted a pre-tax profit for 2016 of $7.1B – down more than 60% on the previous year.
    • The slide was largely blamed on one-off costs and multibillion-dollar writedowns, while the lender confirmed reports that 1,000 roles may be moved from London to Paris in the wake of Brexit.
    • To alleviate the blow to shareholders, HSBC said it would buy back another $1B shares.

    Unilever: So what next?

    • Credit Suisse comments on Kraft Heinz's backing away from its $143B bid for Unilever (via FT):
    • So what next? Unilever has been given a sharp wakeup call that it cannot disregard. Its reluctance to engage with Kraft Heinz is understandable, but will it now feel it needs to offer something else to its shareholders?
    • At the very least the prospect of KHC taking its leverage to over 6x Ebitda begs the question: is Unilever making best use of its balance sheet on behalf of investors? Moving to 3x Ebitda would allow Unilever to do a €20 billion share buy-back or a €7 per share special dividend (17% yield). The former would be double digit accretive, the latter only c7% dilutive.
    • Or might this encourage Unilever to be more aggressive on M&A? Whilst KHC appears to have (irrevocably?) walked away, it is clear that investors are willing to back big deals.
    • What this approach does tell us is that KHC’s appetite is far from satiated, and size is no obstacle at all to their ambitions. Their presence will likely continue to loom heavily over all industry participants.
    • We expect Unilever to respond to this episode by releasing some value to shareholders (some of whom no doubt are disappointed that the prospect of a control premium evaporated so soon after it first appeared).
    • Unilever fell 5.1% today in Amsterdam.

    Pearson -3.9% on strong comments from Berenberg

    • Shares of Pearson (NYSE:PSO) fell 3.9% today in London after Berenberg (Sell) dropped its price target to 400p, implying 38% downside.
    • Key points from the note, via FT:
    • Pearson has a major problem: In fiscal 2015, higher education courseware contributed 40-45% of group EBIT. This key division faces serious structural and cyclical issues, which will continue until industry profits have normalised at much lower levels. We do not see a short-term fix.
    • Leverage is higher than assumed: With returns likely to have impacted 2016 year-end cash flows, and the new strategy affecting cash flow in future, leverage is higher than the market thinks. We note recent negative statements by both Moody’s and S&P. Thus, Pearson is unlikely to return any cash to shareholders following a sale or recapitalisation of PRH.
    • Is there opportunity for more cost savings? Pearson has already spent £610m on two restructurings in the last five years, yielding cumulative savings of £586m, before cumulative reinvestment of £100m and normal cost inflation. We do not see further opportunities for major savings, other than via cuts that would negatively impact the core business, such as reducing the size of the salesforce.
    • We do not see industry consolidation as likely: Pearson is market leader (with a c40% share) in US higher education courseware, an industry that is already highly consolidated; we therefore do not see anti-trust authorities approving further concentration, which might have generated meaningful synergies in the event of a deal. The K-12 courseware and testing markets are also oligopolies, again suggesting anti-trust issues.
    • What about private equity? With no easy cost savings, relatively high leverage, and no potential to sell a cleaned up Pearson to a competitor, we think private equity will steer clear. Anyone buying Pearson must have a clear view of how to fix higher education, and how to do it quickly. Private equity is hardly getting rich quick on the back of this industry – see McGraw-Hill and Cengage results – which won’t encourage new investors.
    • Could a breakup work? The problem is that so much of group profit is declining. This is not a case of cutting off a diseased limb: it is a diseased body. If Pearson sold its attractive assets – Connections Education and Embanet, for example – it would be even more reliant on the declining higher education asset. Conversely, a sale of that unit looks very unlikely.

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