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Tesla’s Earnings Miss – Emperor Musk has no Clothes!

www.philstockworld.comDon't say I didn't tell you so.

A month ago, on April 4th, I wrote:  "Tuesday Turmoil – Tesla Valuation Reaches Peak Insanity" in which I noted how ridiculous it was to value Tesla (TSLA), who struggle to make and sell 25,000 cars in a quarter, at the same price as GM (GM) or Ford (F), who each make 25,000 cars PER DAY, (that's 90 times more).  The companies are not even playing in the same ballpark (though they are playing the same game, so investors get confused) – it's like betting your son's undefeated little league team can take on the Yankees – there are other factors involved than just their record against other children. 

Still the masters of spin, Tesla's shareholder letter, which looks more like an advertisement for their cars, touts "Record vehicle production" and rightly assumes that the average TSLA investor can't do math (or they would not be TSLA investors) and that 25,051 is only 169 cars more than last quarter's 24,882 and it's getting really, REALLY hard to see a path that gets them to 200,000 cars by the end of this year.  Also, as I noted to our Members in our Live Chat Room this morning:

Last Q they said they had "short-term production challenges starting at the end of October and lasting through early December from the transition to new Autopilot hardware" as an excuse for their lack of significant growth from Q3 but now, 169 more cars is a proud record, which is really interesting since last Q they claimed that 6,450 cars from Q4 were "in transit" and would be counted as deliveries in Q117.  If that's true, then did Q1 orders drop by 6,300 cars?  Will we ever know the truth with this company?

Not only are sales a major disappointment but the purchase of Solar City from Elon's cousin is causing more expenses and more losses and also something no one is discussing but should be – dilution!  That's right, last year, TSLA only had 132,676,000 shares outstanding and now they have 162,129,000 shares outstanding, that's 23% more shares than last year – not to mention all the warrants attached to their debt offerings.  That's the kind of thing a penny stock does – not an established company.  Had TSLA not dilluted their shares, their losses per share would have been TWICE AS BAD as what was expected (-.82), not just 50% worse than expected.

Back on April 4th, when TSLA first crossed $300 and I raised the red flag, we knew it was going to be a tough short into earnings but yesterday, in our Live Trading Webinar, I reiterated our TSLA short spread, which was trading yesterday as follows:

  • 5 long TSLA June $300 puts at $11.25 ($5,625) 
  • 5 short TSLA June $270 puts at $3.53 ($1,765) 
  • 6 short TSLA June $300 calls at $22.08 ($13,248) 

As of yesterday's close, that spread had a net credit $9,388 to initiate and would make an additional $15,000 if TSLA finishes below $270 on June 15th.  We initated in April with a $9,100 credit so we had a small loss heading into earnings but this morning that trade should be looking significantly better with TSLA heading back to the $300 line, which is STILL ridiculously overvalued for a company that burned $622,435,000 of cash in Q1 and will likely burn over $1.5 BILLION next quarter, after which they will announce a delay in the Model 3 and then all Hell will break loose – you heard it here first.

Remember – we can only tell you what is going to happen and how to make money trading it – the rest is up to you!  

Meanwhile, General Motors (GM), a company that MADE $2.6 BILLION in PROFITS in Q1 (that's right, TSLA's entire sales, in profits alone!) is still being valued lower than TSLA and it's just as ridiculous today as it was a month ago when I laid out the following bullish GM options spread idea:

  • Sell 10 GM 2019 $32 puts for $4.25 ($4,250)
  • Buy 25 GM 2019 $28 calls for $7.25 ($18,125)
  • Sell 25 GM 2019 $35 calls for $3.60 ($9,000)

We added that trade to our Options Opportunity Portfolio and, so far, it's flat but we are pretty sure that either TSLA is drastically overvalued or GM is drastically undervalued and probably both are right, so we're very comfortable with both of our auto sector calls now that we've seen the actual earnings of both companies.  Oh wait – are they still called "earnings" when they are actually horrific losses in Tesla's case?  

Also back in that April 4th Pre-Market Report, we were shorting oil at $50.75 and this morning it hit $47, which is a $3,750 per contract gain for the shorts but, unfortunately, we flipped long at $48.50, so this downturn is as much of a surprise to us as anyone.  Our average entry is now long 6 contracts at $48.24 and we intend to add a couple more down here and bring the average down to $48 on 8 long contracts, unfortunately down $8,000 at $47 but we anticipate $50s into the holiday weekend and, assuming we take 4 off the table even at $48, that would be a nice $8,000+ gain instead.  

We also like Gasoline (/RB), which is testing $1.50 but the play is /RBN7, the July Futures contract, as we definitely want to hold those until Memorial Day weekend, when Summer Driving Season officially kicks off.  With the economy stronger and jobs more plentiful – we can expect AAA to pre-announce record driving plans that should cheer up energy traders (though miles driven won't really lead to record consumption due to better fuel economy – so the rally will be short-lived).  Also, as another wild-card, OPEC is meeting May 25th in Vienna – the Thursday before Memorial Day – and it's almost a certainty they will announce extended production cuts.  

Again, we're telling you what's going to happen and how to trade it, so don't complain when we say "I told you so" in June…


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  1. Morning everyone!

    Webinar replay is now up!

  2. Good Morning.

  3. Does anyone have an opinion on the bottom for Silver and Gold? You could snap a line on the downtrend for silver, so it seems a ways away from a bottom still…

  4. Image result for may the fourth be with you trump

  5. Democracy at work:

    With that in mind, let's do a quick wrap-up of the bill:

    • There have been no public hearings.
    • There's no final text.
    • There's no updated CBO score.
    • It is opposed by virtually every patient advocacy group and everyone in the health care industry.
    • Congress is still exempted from the new rules that allow states to waive essential benefits.
    • It raises premiums dramatically for older people.
    • It removes Obamacare's protection against being turned down for a pre-existing condition.
    • It would steadily gut Medicaid spending for the very poorest.
    • It removes coverage from at least 24 million people, probably more.
    • It slashes taxes on the rich by about a trillion dollars over ten years.

    Everything done in the backroom with no checking and no public involvement. Remember it took 10 months to get Obamacare done and there was certainly a lot of debates. What do they have to hide this time? 

  6. FU LB!!!!

  7. Phil,

    Do you think /KC is heading down again or consolidating for a move up? I'm in at 135.5 and missed getting out at 136.5. Trying to figure out what to do

  8. Especially since getting my ass kicked in /CL

  9. Coal is dead….

  10. Someone posted about that yesterday, but here is a good chart!

    And they don't think that this law helped the middle-class!

  11. Phil – This one baffles me: DNKN  - Dunkin' Brands beats by $0.06, misses on revenue

    A brand identity crisis is part of the DNKN conundrum…

  12. Scottmi – A bullish assessment of the outlook for AKAM.  But, keep in mind, it's from a guy doing a mea culpa.

  13. ~~CLF CEO bought 200,000 shares at $6.29-6.35 worth ~ $1 mln.

  14. Phil,     Some advice on the COST butterfly short call position? .  In the April portfolio review, the recent leg was sell 5 COST June  $165 calls and puts.   Since then, COST has recently announced a special $7 dividend that is payable May 26 to shareholders as of May 10.  The call holder at the current price is already in the money (COST trading at $179) and makes an additional $7.  The stock will reset a bit after the divvy, but a LT investor for COST who has bought this call gets a quick >10% in 1 month assuming COST maintains its stock price or goes higher.  Risk of being assigned this call write is high …thoughts?   

  15. correction, those were July calls, not June for COST – but same issue.

  16. FU FTR!!!!!!!!!!

  17. Phil – "That's the kind of thing a penny stock does – not an established company.  Had TSLA not dilluted their shares, their losses per share would have been TWICE AS BAD as what was expected (-.82), not just 50% worse than expected."

    Tesla employs next to no one, makes cars and loses big money on every one sold, stock price $300. Ford, GM, Chrysler employ tens of thousands, and indirectly hundreds of thousands, they make cars and make money, stock prices 11, 33 and 10 respectively.  

    Like Ol' Muskie Musk Rat (kin to Deputy Dawg) Musk in a flim flam man who has taken his investors for a ride proving that Barnum was right.  Priceless.  At some point whoever gets caught holding the bag last will take a bath while Muskie will unfortunately never see this fate.  That links to a video of Phil giving chase to Ol' Muskie and putting him where he belongs. Out.

  18. Jabob – You certainly got that right.  We were buying the stock because ?

  19. Good morning!  

    Fake news marches on:

    Fox News Channel’s Fake Baltimore Riot Photo

    The night this Fox news affiliate posted their photo, a CVS in Baltimore actually was burned down. The photo they posted on Facebook, however, wasn’t of the CVS. In fact, it wasn’t of Baltimore at all. See if you can recognize it:

    Fox News Baltimore Fake Photo

    Give up? This fake Baltimore photo is from the 2014 Venezuela riots. That’s right: Fox posted a photo taken around 2,000 miles away and claimed that it was in the center of Baltimore.

    Silver/Tick – Panic selling can be made much worse if the Dollar starts moving up.  Oil down too with money flying out of commodities in general as everyone reported a slow GDP in Q1 – won't be fixed any time soon.

    Big Chart – Will the RUT recover or will the others follow it down?  NYSE back below 11,550 = BAD!  Nothing to be bullish about if that line isn't taken back.

    What to hide/StJ – They are hiding the fact that they don't give a rat's ass about the American people.  As I've said, not Health Care cuts, no Tax cuts, so they are desperate to jam this through and it has to destroy the lives of 10s of Millions of Americans in order to enrich the Top 1.3M.

    LB/Jabob – Wow, I'd hate to be your kid.  Slightest misstep and you're a hater…

    COLUMBUS, Ohio, May 04, 2017 (GLOBE NEWSWIRE) — L Brands, Inc. (LB) reported net sales decreased 2 percent to  $719.6 million for the four weeks ended April 29, 2017, compared to net sales of $737.5 million for the four weeks ended April 30, 2016.  Comparable sales for the four weeks ended April 29, 2017, decreased 5 percent, and were positively impacted by the later Easter holiday this year by about 3 percentage points.  For April, the exit of the swim and apparel categories had a negative impact of 6 percentage points and 10 percentage points to total company and Victoria’s Secret comparable sales, respectively.

    The company reported net sales of $2.437 billion for the first quarter ended April 29, 2017, a decrease of 7 percent compared to sales of $2.614 billion for the quarter ended April 30, 2016.  Comparable sales for the first quarter ended April 29, 2017, decreased 9 percent. For the first quarter, the exit of the swim and apparel categories had a negative impact of 6 percentage points and 9 percentage points to total company and Victoria’s Secret comparable sales, respectively.

    The company expects to report first quarter earnings per share of about $0.30, which includes a benefit of about $0.05 related to a lower tax rate than what was assumed in the prior earnings per share guidance of $0.20 to $0.25.

    We knew this – this is why we bucked the trend and bought them in Feb in the first place.  The same idiots who didn't understand Q4 earnings don't understand Q1 earnings.  

    /KC/Japar – So far, $1.35ish has been a good line to play bullish but we just tested $1.33 on Tuesday – nothing is out of the question and these contracts are expensive, so be careful:

    Power/StJ – Go Europe.  Shows what you can accomplish if you really get behind a policy.  

    COST/Learner – We sold the July $165 calls for $9 and they are at $179 so we're down about $5 but the stock will likely drop $7 after the dividend (and that may be why it went up) so I'd say, if exercised, then just quickly sell July $170s ($11.50) to take advantage.  I don't see the point in proactively moving it as we also collected $3 on the $165 puts and July is a long time from now.  

    FTR/Jabob =- Because they are up 3%?  

  20. japar- KC also kicking me in the ass today as it seems to do every time I try to get in. I think that "they" hate it when us little players are in their trade and they screw with us when we enter this arena. Just a little theory I have. 

  21. Wow, indexes falling hard and fast.  

  22. AKAM/albo – thanks, boy did I get punked!

  23. up 3% FTR? maybe if you are short ?

  24. Yodi- hope you are still with us- you have been quite lately. Since you are the expert on selling cherry callers, now that we are past earnings, would you sell any on AAPL? If so, what strike and month.


  25. GNC getting cheaper too…

  26. Does the winner get to pick out the wine ? 8-)

    ~~The Nattering Naybob
    May 4th, 2017 at 3:08 am | Permalink | Tweet thisIgnore this user 

    Maya – "I will bet anyone a bottle of wine that TSLA is UP tomorrow!"

    Your on.

  27. FTR/Jabob – It was up 3%, then fell.  We may have been the only buyers yesterday. 

    There goes $300 on TSLA!  

    FU TSLA!!!!!!


    FU TSLA!!!!!!!!!!!!!!!!!!!!!!!!!!

    FU TSLA!!!

    FU AMZN!!!!!

    FU TSLA!!!

    fu TSLA!!!

    Where would we be without his guidance?  cheeky

  28. All except one Fast Money Trader for the last two weeks were extremely bullish on TSLA and were telling everyone to buy it and it was their number 1 tech stock over all others and they could see 500bn market cap.  So if you had to pick one, they pick the company losing a ton of money over GOOG, FB, AAPL etc.  Ridiculous and also the fact they call this a tech stock I still don't buy.  I still think of it as an auto stock till revenues and profits from other sources prove otherwise.

  29. hilarious

  30. maybe you will finally get out of your slump? ;-)

  31. albo/TSLA  You can't get in the action once the results are known…. ;)

  32. The option premium excitement in TSLA is starting to dwindle already.  Good time to write some out of the money for next week now.  The premium will continue to atrophy quickly by the end of the day.

  33. Phil – "Where would we be without his guidance?  cheeky"

    I one big F-ing mess.  Good F-ing times with the Beast.

  34. NXPI

    The buyout by QCOM at $110 cash makes for good put selling.

    Deal expected to close by end of 2017.

    The 2019  $100 puts can be sold for $4.90 (mid range of large spread). 

    Even if the EU doesn't approve the deal, NXPI should do well on its own and is probably undervalued at $106. Plus, there is possibility of another buyer coming in at a higher price than QCOM has negotiated. Consensus being the QCOM for a great deal here.

  35. 1020 – I was just curious about their bet. ;-)

    LITE – Leading fiber optic stocks higher.

  36. I wonder who is behind the recent crypto run up?: BTC/ETH/LTC:1600 / 89 / 23.

    This is fairly extreme, now a $42.9B market cpa for all coins. Tulip Bulbish IMO!

    LTC was around 4 forever, and in two weeks is at 23. I think being added to Coinbase helped, they now trade all 3 issues for fiat directly.

  37. DDR – at least this short position is still working!

  38. Crypto – was it not Japan legalizing bitcoins? Also Europe and china, esp china?

  39. T     still going down

  40. Tech/Rustle – Even if you call it tech, they are still base manufacturers, more like chip makers than web companies.  AAPL doesn't even manufacture things – that's a low-margin play they outsource to others and AAPL's partners don't get 300x p/e ratios and AAPL's p/e is 12 (8 with the cash).  People who say TSLA is a tech company are simply full of crap and trying to snow gullible people with their BS valuations – that have absolutely no basis in reality – so they try to change the narrative.  

    Knives/Jabob – I have that exact thing in my kitchen in black – love it.

    $296 is the 5% line on TSLA, we bounced off it on technically a fall from $311 for the day.  If our theory is correct and we're heading for $280 (20% above the 200 dma) from $325 (40% over) then the pullback we expect are from that run, from $230 to $325 so call it 100 points and that means we expect 20-point pullbacks to $305 and $285 so those are lines to watch.    Off the $296 line is a $15 drop for the day so $3 weak bounce to $299 and $6 strong bounce is right to that $305 line, which is where we expect to pull back in stage one.  

    So, in short, $305 must stay failed and, if that fails then we have a  very good shot of breaking back below $296, on the way to the next 5% ($15) correction.  

    NXPI/Maya – I like that as they traded in the $90s before the offer so worst case is you own them for $95 and work it.  

    Anyway, QCOM wouldn't waste time if they didn't REALLY want them so someone will own them going forward – very unlikely all deals fall apart here. 

    Coinbase/BDC – That's got to be the goal for GreenCoin – if we can get it onto Coinbase and keep it there for a month or two, we have a good chance to get traction.

  41. Albo – "Does the winner get to pick out the wine ? 8-)"

    The bet was for a bottle of American Wine - Inglenook Cabernet Sauvignon Napa Valley, 1941

    Yes, that kind of open ended situation can lead to abuse, and not just alcohol.  

    Unless specified before hand something generic, a bottle of MD 20/20 even and Out.

  42. Phil / Coinbase – getting on coinbase would be like winning the olympic marathon. I think we need to be looking at finishing a local marathon first (i.e., getting on

  43. BDC – "I wonder who is behind the recent crypto run up?"

    Think hot money from China (and anyone circumventing currency controls) and pot growers (so hot the banks won't touch it, legal or otherwise).

  44. Rustle thanks

  45. Phil

    Good morning!

    Your take is absolutely correct.

    Initially, I sold the 2018 $80 puts a few months back, then some more $90 puts as well as 2019 $100 puts.

    If assigned, I will own NXPI at an average of $90. No problem there and I expect the puts to expire worthless in 8 months when the deal closes.

  46. Above is NXPI 

  47. TSLA breaching $293 -5.5%

  48. Nat/crypto – perhaps. Like any theory I'd like to see some evidence. Banks are all over Ethereum (it's now an official part of MSFT's azurenet C#/dotnet development platform). I also read a link on Quora I can't find now but very convincing that currency flight in China in bitcoin is peanuts. The premise basically was the guy was hustling in that space and it was hard yards where capital flight in other "traditional" arenas like real estate was full bore, and crypto had zero impact whatsoever. I'd challenge the pot gower assertion as well, what do you do with crypto if you can't cash it out? I think those guys prefer good-ol tried-and-true President Franklin.

  49. do you think FTR holds 1.50?

  50. TSLA ain't the biggest car company anymore

  51. Wrote 90 calls on TSLA this morning @317.5 on the open, 315 shortly after that and at 310 when it broke 300.  Might be able to cover all of them close to nothing today.

  52. The calls were for next week

  53. Ouch, so much for the -5% line holding on TSLA.

    Crypto/Scott – Lots of rumors but nothing firm.  

    T/Stock – Telcom earnings are dragging the whole S&P.  

    Bittrex/BDC – OK, baby steps first. 

    FTR/Jabob – You're asking a guy who just went over a plan to double down at 0.80 in yesterday's webinar.  On the whole, I'd rather see 0.80 than $2 first but I'm worried your head will explode on the way down.  wink

    Good job Rustle!  

  54. That ethereum article I linked above says it has risen 2,800% from the ICO but they meant 28,000%, as info. So much for proof reading. Of course, at PSW we know that if you bought ethereum at the ICO, you now own both Ethereum plus ethereum classic (that forked last October), so that's ETH @ 88.89 + ETC @ 7.29 = 96.18, which divided by the $0.30 basis is 32,060%. Maybe someone else should write these articles!

  55. Phil,

    How low do you think oil will go before turning around? I'm in it for the summer driving season but it is getting painful. Where are the bullish OPEC statements? Can we all pool some monies together to rent-a-rebel?

  56. IMAX below 30 with an RSI of 28.  Will start taking a partial position now.  Waited long enough.

  57. NXPI I have built a nice position in the 2019 $80 puts because of the wide bid ask spreads. They are frequently quoted at $0.0/$4.50 and I had a standing order to sell a few at $2.25. It would occasionally fill and I knew they were really worth about a dollar. Sometimes that mid price on TOS can be a trap.

  58. Pstas,

    Yes I am still around but travelling though Italia at present and watching my plays while I can. I wanted to give another write up on cherry calls.

    AAPL I still holding the 145 May and June caller. I personally think as Phil says wait for the down grade police. After a week or so you reconsider your play. In general with the market going up and up it is hard to sell cherry calls as it is better to reap the income of your leap BCS. Look at our friend TSLA I am still holding the 285 caller and improved over 5000K today but still hope they getting licked for a change.

    General wait and see what gives. I do not play GM as I did not like the way they screwed the old shareholders and got rid of them by declaring bankrupt. Once burned twice shy!!!

    So here you have my take in a nutshell. Closing tomorrow another 6 cherries with only one I have to pay the piper. On top visiting Florence tomorrow, with beautiful sides.

  59. BDC – currency flight in China in bitcoin is peanuts….

    Perhaps, but prior to the February PBOC crackdown on Bitcoin exchanges, renminbi exchanges accounted for 98% of global bitcoin trading between Aug and Jan. viz. November volume global 59.7M, in CNY 59.6M.  Bitcoin global market might represent $23B?? So 98% of that, not much. Since the crackdown, overall bitcoin volume has gone in the toilet.

    Like any theory I'd like to see some evidence.

    So would the PBOC and other guvmint entities.  As far as the pot growers, they are using crypto as an asset for conversion.  To what extent and how evidenced?  I think that's the point where dead presidents (cash business), asset conversion, shell companies and circumvention schemes come into play.  viz. One of the best compensated individuals of any business concern, be it legal or otherwise, is generally the brains that figures out where and how to hide the money, aka tax avoidance and/or evasion.  Legal and Out.

    CNY Volume

    Total Volume

  60. Quite the flush on oil, down 4%! 

  61. BDC – Crypto Elephant Tracks – looking at a chart of ETH, something happened March 10th at 18.66, now 89.75, correlate with a BTC chart, something also happened two weeks later March 24th 935.95, now 1557.91.

  62. Phil TSLA. We are getting a much needed pullback. How are we to play this ? I cannot afford to give any of today's gains back but if course don't want to miss more retraction.  I guess a Stop Limit is the answer ?

  63. Oil/Japar – Well now we have to look at the $45 line and hope that's bouncy.  Brent failed $50 and all hell broke loose.  It's the first break below $50 since last Fall for this contract and that took us down to about $46, which is down another 10% so traders are freaking out because they still have a ton of open contracts and only 2 weeks to do something with them.

    Click for
    Current Session Prior Day Opt's
    Open High Low Last Time Set Chg Vol Set Op Int
    Jun'17 47.60 47.75 46.04 46.17 11:31
    May 04


    -1.65 501049 47.82 571277 Call Put
    Jul'17 47.96 48.11 46.42 46.55 11:31
    May 04


    -1.63 98253 48.18 293018 Call Put
    Aug'17 48.27 48.39 46.69 46.84 11:31
    May 04


    -1.61 25203 48.45 116134 Call Put
    Sep'17 48.51 48.64 46.96 46.96 11:31
    May 04


    -1.73 28984 48.69 196870 Call Put
    Oct'17 48.78 48.87 47.19 47.30 11:31
    May 04


    -1.62 10417 48.92 84323 Call Put
    Nov'17 48.85 48.89 47.60 47.69 11:31
    May 04


    -1.45 7985 49.14 63904 Call Put
    Dec'17 49.18 49.27 47.60 47.73 11:31
    May 04


    -1.59 59151 49.32 278069 Call Put
    Jan'18 49.35 49.35 47.80 47.80 11:31
    May 04


    -1.64 8545 49.44 66229 Call Put

    Look how stuffed December is already – that's going to be a nightmare.  Still 1Bn barrels worth of contracts in the front 3 months down from a high of 1.1Bn but still awful.  

    IMAX/Rustle – Nas made a stunning recovery, may as well buy anything that's not nailed down.

    /TF long at 1,385 with very tight stops below but everyone else is recovering, so why shouldn't they?  

    NXPI/Jet – Good way to play.

    Hey Yodi, good to see you!  

    • March Factory Orders+0.2% vs. +0.4% consensus and +1.2% prior (revised).
    • Ex-transportation -0.3% vs. +0.3% (revised) prior.
    • April Gallup Good Jobs Rate 44.7% vs. 45.1% in March.
    • The Gallup Good Jobs Rate was 44.9% a year ago.
    • The data comes from Gallup tracking interviews conducting between April 1 and April 30.
    • Mortgage rates held steady in the latest Freddie Mac weekly survey, as U.S. Treasury yields made few moves following a weak advance Q1 GDP estimate and the Fed's widely expected decision to leave rates unchanged.
    • The 30-year fixed-rate mortgage averaged 4.02%, down from 4.03% in the previous week, and the 15-year fixed-rate mortgage averaged 3.27%, unchanged from the prior week.
    • A year ago at this time, the 30-year and 15-year fixed rates averaged a respective 3.61% and 2.86%.
    • The mREIT sector continued a scorching 2017 in April with a 3.46% gain – bringing the year-to-date advance to 14.66%, according to This compares to the S&P 500 up 1.03% in April and 7.16% for the year.
    • On a 12-month trailing basis, mREITs are higher by 32.82% vs. the S&P 500's 17.92%.
    • The flipside to the big move in mREITs, of course, is that they're no longer on sale. After years of the stocks trading at discounts to book value, premiums are now the norm.
    • With its creditors at its heels and its coffers depleted, Puerto Rico has sought what is essentially bankruptcy relief under PROMESA, a federal law enacted last summer.
    • The filing sets off an unprecedented process.
    • According to the island's oversight board, the territory is "unable to provide its citizens effective services," crushed by $74B in debt and $49B in pension liabilities.

    • "China should no longer recklessly try to test the limitations of our patience," said the commentary released by North Korea's official news agency, warning it could trigger unspecified "grave consequences."
    • KCNA added that China has regularly "infringed upon the strategic interests" in becoming closer to the U.S. and thus committed a "betrayal" in the process.

    • Protests in Caracas have claimed at least one more fatality, bringing the total number of people killed to more than 30 in several weeks of unrest.
    • Venezuelans are taking to the streets as President Maduro begins the process of overhauling the country's constitution.
    • Falling prices for oil exports have cut government revenue and there have been shortages of food, medicine and other basics.
    • Royal Dutch Shell (RDS.ARDS.B+2.1% premarket after Q1 earnings of $0.46/share beat the $0.37 analyst consensus, and revenues rose 48% Y/Y to $71.8B.
    • Shell's Q1 profit on a current cost-of-supplies basis soared to $3.4B, up more than 4x from $814M for the same period last year; Q1 profit in the upstream business totaled $540M compared with a loss a year ago, and profit in the downstream division rose 24% Y/Y to $2.49B.
    • Cash flow from operating activities rose by $700M Y/Y to $9.5B, which should reassure investors nervous about the impact that the slump in oil prices would have on their dividends.
    • Shell is "becoming a cash generating machine," says Brewin Dolphin analyst Iain Armstrong. “With new projects starting and higher-cost assets being sold, you’d expect cash generation to only increase."
    • Net debt fell for a second straight quarter to $72B, while gearing narrowed to 27.2% at the end of Q1 from 28% at year-end 2016; CFO Jessica Uhl says Shell aims to lower the figure to 20% over time.
    • Chesapeake Energy (NYSE:CHK+2.5% premarket after posting solid beats in Q1 earnings and revenues, which rose to $2.75B from $1.95B in the year-ago quarter.
    • CHK's Q1 oil, natural gas and natural gas equivalent revenue rose to $1.47B from $993B, beating the analyst consensus of $1.11B; marketing, gathering and compression revenue of $1.28B was up from $960M a year ago but slightly below consensus of $1.31B.
    • Q1 production of 528K boe/day came in above the midpoint of 515K-535K boe/day guidance, and oil production of 83.7K bbl/day also was above its guidance midpoint of 80K-85K bbl/day.
    • CHK expects its production to grow "significantly" in H2 as it places more wells to sales, and thus raises the bottom range of its FY 2017 production guidance.
    • CHK's debt balance at the end of Q1 was ~$9.1B vs. $10B at year-end 2016; total liquidity was ~$3.3B, including cash on hand and $3.1B in borrowing capacity under the company's revolving credit facility.
    • Chesapeake Energy (CHK -8.2%), which indicated higher during the pre-market after reporting better than expected Q1 earnings, reverses sharply and is now more than 8% lower as production fell even as it spent more than analysts had estimated.
    • CHK's Q1 production of 528K boe/day came in near the midpoint of company guidance but fell 21% Y/Y and fell short of Wall Street expectations of 530K-536K boe/day.
    • CHK's Q1 capex of $576M also was well above analyst estimates of $494M; "CHK continues to outspend cash flow to move back to growth," Jefferies analysts say.
    • CHK also raises the lower end of its 2017 capex forecast by $200M to $2.1B but retained the upper end at $2.5B; it raises the lower end of its full-year production forecast to 197.5M boe from 194M, while maintaining the upper end of the range at 205M boe
    • Chinese metals prices tumble amid fears that expected demand for infrastructure and construction projects in China may not materialize as expected.
    • Iron ore futures plunged 8% – as far as China's market regulators allow in a single day – at 485 yuan/ton ($70.32), extending losses after a four-day rally was reversed yesterday, hot-rolled coil futures also dropped by the daily maximum of 7%, while steel rebar futures plunged 6.2% to wipe out last week’s gains.
    • Iron ore and steel rebar prices are now down ~20% from four-year highs reached in March.
    • Already weak sentiment is exacerbated after six Chinese government agencies pledged to curb runaway local government debt by stricter oversight of projects.
    • In premarket trading: BHP -1.4%RIO -0.5%VALE -1.5%CLF -1.2%.

    • Southern Copper (SCCO -2.4%) reports a 70% Y/Y increase in Q1 earnings to $314M on a 27% rise in revenues to $1.6B, as average copper prices rose 25% and zinc prices jumped 66% from a year ago.
    • SCCO says Q1 copper production fell slightly as last month's strike at its Toquepala and Cuajone copper mines as well as its Ilo refinery in Peru; the two mines together produced 310K metric tons of copper last year.
    • SCCO says its Toquepala expansion, which will add 100K tons/year of copper production as well as significant amounts of molybdenum, is moving forward on schedule; with the expansion, the company says it will produce 1M metric tons in 2019 vs. 900K last year.
    • Freeport McMoRan (FCX -3.2%) and Indonesian authorities begin negotiations over the contract dispute that has caused the miner to scale down operations in the country.
    • CEO Richard Adkerson met today with the mining minister and other officials from the central and Papua provincial government in Jakarta to discuss a range of disagreements including legal assurances over investments beyond 2021, tax rates, and a government requirement for FCX to divest a 51% stake in its local operations.
    • "So long as we're progressing to… a mutually acceptable resolution, there would be no arbitration," Adkerson says.
    • FCX last month received an export permit valid until February 2018 allowing it to resume export shipments until at least October 2017, pending further negotiations.

    • Greenlight Capital expounds on its proposal to split General Motors (GM -1%) into two trading classes in a letter to shareholders, and nominates three directors to the board.
    • Greenlight, which holds 3.6% of GM's shares, wants to separate the stock into a dividend class and a capital appreciation class.
    • "We believe that splitting GM’s stock would lead to a 27% to 79% appreciation in the share price," reads the letter.
    • "GM has one of the lowest price-to-earnings ratio of any global automobile manufacturer and the lowest of any company in the S&P 500, regardless of industry," notes Greenlight.
    • "The problem is not the business, but an inefficient capital structure. GM needs access to low cost capital to fund its operations and growth, and our two classes of mommon stock plan will deliver just that."
    • Source: Press Release
    • There is a lot on Tesla (NASDAQ:TSLA) from analysts, but very little in the way of ratings adjustments following the company's Q1 earnings report and conference call.
    • The bearish lot of Goldman Sachs, Cowen and UBS is pointing to the lack of clarity on the Model 3 production timeline and Musk's comments on consumer confusion (3 not E).
    • "Tesla beat our estimates, displayed strong automotive and Tesla Energy gross margin, and reiterated first-half delivery guidance," summed up Baird's wrote Ben Kallo for the bull camp.
    • In an interchange with Goldman Sachs' analyst David Tamberrino during the conference call, Musk reiterated that the company is on track to produce 100K Model S/Model X units, while passing on specifics on quarterly consumer demand.
    • Automobile industry watchers without a Tesla rating to defend say that short-term execution risk on the Model 3 can't be ignored, but that the long-term thesis is still very much in play.
    • Tesla earnings call transcript
    • Sources: CNBC and Bloomberg
    • Shares of Tesla are down 6.28% to $291.49 as they skip to their lowest level since the very early part of April.

    Anheuser-Busch InBev rallies on improved profit

    • Anheuser-Busch InBev (BUD +4.8%) knocked out higher-than-anticipated profit in Q1 as the brewer's business in Brazil improved and the mix of U.S. sales skewed to higher margin beers.
    • Total volume in Q1 of 147.9M hectoliters topped the expectation of analysts. Sales of Stella Artois jumped 20% Y/Y globally, while Budweiser surprised with 16% growth outside of the U.S.
    • A-B management says the integration of SABMiller is on track. $252M of synergies were lapped up in Q1. Capital expenditures of $3.7B are expected for this year.
    • A-B revenue outlook: "While recognizing the increased volatility in some of our key markets, we expect to accelerate total revenue growth in FY17, driven by the solid growth of our global brands and strong commercial plans, including revenue management initiatives."
    • A-B dividend outlook: "We continue to expect dividends to be a growing flow over time, although growth is expected to be modest given the importance of deleveraging."
    • Previously: Anheuser-Busch InBev misses by $0.14, beats on revenue (May 4)
    • Shares of General Mills (NYSE:GIS) rode takeover rumors to as high as $60.20 before the buzz started to wear off.
    • The company says it won't comment on the chatter.
    • GIS +3.76% to $58.16 vs. a 52-week trading range of $55.67 to $72.95. Volume is already 2X normal activity.

    Gogo jumps after Q1 revenue beat

    • After revenue beat expectations in its Q1 report, Gogo (NASDAQ:GOGO) has moved up 4.9% and is pennies off its 52-week high.
    • Net loss widened but in line with analyst expectations, to $41.4M. Adjusted EBITDA fell to $10.7M, below an expected $11.9M.
    • Revenues grew nearly 17% and beat, however, with increased customer usage across all its segments.
    • Revenue breakout: Service, $146.5M (up 23.4%); Equipment, $18.9M (down 17.9%).
    • It's reiterating guidance for full-year revenue of $670M-$695M (up 12-17% Y/Y, vs. consensus for $676.9M), EBITDA of $60M-$75M (vs. expected $67M), and capex of $290M-$330M.
    • Press Release

    Next stop: Bitcoin above $1,500

    • Bitcoin jumped to an all-time high today, rising 4% to $1,553.18, according to CoinDesk.
    • New interest in the currency out of Japan was the cause of the latest short-term upward move, traders said.
    • "Bitcoin can be thought of as digital gold," declared Brian Kelly, founder of BKCM and manager of a digital assets hedge fund.
    • Related tickers: COINOTCQB:BTCS
    • Previously: Strong demand from Japan lifts Bitcoin to new high (May. 02 2017)

  64. TSLA/Latch – Well, if we are going to get to $270, this is the ideal way for it to happen, righ?  If you literally cannot afford to give up gains – CASH THEM OUT!!!   Getting back to even after taking a loss is as good as a win and then maybe you learn those are the types of trades you should avoid – which makes it an educational profit…

    In the STP, we had a huge turnaround on TSLA and mostly the short June $300 calls we sold for $21 are now $11 and we're up $6,000, which leaves us with the short $300 ($15.50)/270 ($4.40) bear put spread at $11.10 that has $18.90 upside.  

    So, if TSLA goes back over $296 ($295.70 now), I say we stop out of the short calls in the STP and see what happens with the spread, since it's the short calls that can really hurt us).  No sense in risking it after such a nice gain today.  

  65. SGYP – down after the conference yesterday – I did not see anything alarming from slides - 


    Pharm – Do you have any insight on this?

  66. SGYP – I see a Citi downgrade to sell ( PT 3.7 – due to slales concern and lack of take over poppy ) but that was on 4/6

  67. NOK – Back above 6.  Big winner ! 

    Covered some with Jan 6 calls @ .54. 

    Now 80% covered.

  68. Yodi- thx, good advice. Will wait and watch for now. 

  69. /DX did a head fake yesterday, didn't it?

  70. Brusque, avuncular, and with a reputation for being overly plain-speaking, Prince Philip has over seven decades been a formidable presence at the side of Queen Elizabeth II as she made the countless round of dinners, ceremonies and other engagements expected of the British monarch.<p>A product of the …

  71. After failing to bring their Affordable Care Act replacement to a vote in March, GOP legislators have come armed with a new health care plan that may …

  72. Leaks show that Macron purportedly formed an offshore LLC in Carribean island of Nevis, was dealing with bank known to facilitate fraud<p>$AAPL stands …

  73. The last time this happened was right before the financial crisis began.<p>Liberalism is a mental disorder.<p>Feb 22, 2017 3:16 PM<p>One month ago, a …

  74. Leaks show that Macron purportedly formed an offshore LLC in Carribean island of Nevis, was dealing with bank known to facilitate fraud<p>The odds are …

  75. President Trump on Thursday said he would direct the Internal Revenue Service to relax enforcement of rules barring tax-exempt churches from participating in politics as part of a much-anticipated executive order on religious liberties.<p>The order — which Trump formally unveiled in a Rose Garden …

  76. Stocks and bonds are fully valued

    Geopolitical tensions and a shifting policy landscape have challenged investors so far this year. We see the world economy as becoming better balanced and more stable today. Growth is improving, led by the United States and other developed markets. Emerging economies seem to be through the worst of …

  77. In late April, NASA’s Cassini spacecraft began a series of potentially dangerous dives, or “ring crossings,” between Saturn and its innermost rings of ice.<p>Many of the new images it beamed back looked small, drab, and grainy, yet they represented the closest-ever views of Saturn’s stormy cloud …

  78. “Maximizing shareholder value” is one of those concepts that falls under the adage, “Be careful what you wish for.” I know this because, a long time ago, I was one of those wishing for it.<p>It seemed like such a good idea at the time, back in the late 1970s and 1980s. For too long, the compensation …

  79. Only about 1.1% of the world population is German. However, 48% of the mid-sized world market leaders come from Germany. These firms, which I call “Hidden Champions,” are part of what makes German economic growth more inclusive: by my calculations, they have created 1.5 million new jobs; have grown …

  80. Mental health professionals have a ‘duty to warn’ about a leader who may be unfit to serve.<p>If you take President Trump’s words literally, you have no choice but to conclude that he is psychotic. A delusion is “a fixed false belief that is resistant to reason or confrontation with actual fact.” …

  81. How highly controversial ‘binary options’ work

    Binary options trading is one of the more polarizing types of investments out there. Some see it as simpler or more enjoyable than the typical purchase and sale of stocks and other assets. Others view it as an activity very much akin to gambling, and subject to rigged conditions and other scams.<p>To …

  82. May the 4th be with you. And especially with the precious metals bulls, as the month has gotten off to a pretty rough start for gold.<p>The pressure on the shiny stuff is not letting up.<p>The dollar got a lift from that Fed statement — gold and the dollar tend to move in opposite directions. Meanwhile, …

  83. We’ve written several times about how Uber plays games with its fares. The transportation app charges riders when they book a car by estimating how much the trip will cost. But it calculates driver pay based on actual miles and minutes. Estimating prices is a tricky business and Uber’s “upfront” …

  84. With just three days to go before the final round of French elections, a sense of calm pervades markets as Emmanuel Macron looks set to prevail over …

  85. This morning we learned that <b>Cliffs Natural Resources</b> (CLF) CEO <b>Lourenco Goncalves</b> had purchased 200,000 shares of the iron miner’s stock valued at …

  86. The US Securities and Exchange Commission (SEC) has approved quadruple leveraged ETFs for trading in the US.<p>The decision Tuesday means that funds …

  87. Summary: US equities ended the month of April above or near new all-time highs. There are no significant extremes that suggest the trend higher will …

  88. BDC – UPON FURTHER REVIEW  - Crypto-currency mystery solved. 

    Refer to my two previous posts. The divergence in BTC and ETH from March 10th through 24th made me suspicious.  But it explains everything….

    For ETH something did happen March 10th.  On Feb 9th the PBOC cracked down, OKCoin and, the two biggest exchanges in China, announced that they would be suspending bitcoin withdrawals for one month.  So when those exchanges reopened on March 10th, money flowed from BTC to ETH.

    For BTC something happened March 11th.  The Winklevoss Bros BTC ETF as well as another BTC ETF were both denied by the SEC.  Bitcoin price plunged from $1,350 to $980 within minutes and sold off until March 24th while ETH again reaped the benefit.

    For BTC something did happen March 24th.  THIS.  Key phrase: "On March 24, 2017, pursuant to Rule 430 of the Rules of Practice, BZX filed a petition for review of the Disapproval Order."

    BZX petition for review of the ETF disapproval, was granted. In other words, Bats BZX Exchange, Inc. AKA THE CBOE – wants to list that ETF and has been granted a review of the prior disapproval.

    In addition, in this SEC document NYSE ARCA aka The New York Stock Exchange asks for a rule change to allow the listing and trading of shares of the EtherIndex Ether Trust Under NYSE Arca Equities Rule 8.201.  Said Trust is an Ethereum ETF.

    Thouest invoke me and now you know why. Into the Ethereum and Out.

  89. <i>”Something is off,”</i> warns RBC’s head of cross-asset strategy Charlie McElligott in the introduction to his latest market noting that <b>the swing in US</b> …

  90. BDC – Crypto Addendum – Japan legalized BTC as a payment method mid-March, Russia is also reviewing and seeking to regulate crypto.  These two factors along with 98% of Bitcoin volume being on Chinese exchanges and the possibility of SEC ordainment of crypto ETF's are your principal drivers.

  91. In the last two years, ESPN has lost roughly 7 million subscribers, and the worst may be yet to come<p>ESPN’s announcement of more layoffs marked yet another setback for the cable sports network – and it could signal the unraveling of the business model that’s underpinned sports broadcasting for …

  92. LONDON/DUBAI (Reuters) – OPEC and non-OPEC oil producers look likely to extend their agreement to limit supplies beyond its June expiry to help clear a glut, three OPEC delegates said on Thursday, downplaying the chance of additional steps such as a bigger cut.<p>The Organization of the Petroleum …

  93. By 2030, nearly no one in the US may own a personal car. Instead, most Americans would hail self-driving, electric ride-shares to get around.<p>That’s one prediction by analysts in a new report that examines technology and personal car ownership.<p>Its authors — Tony Seba, a RethinkX think tank cofounder …

  94. Leaks show that Macron purportedly formed an offshore LLC in Carribean island of Nevis, was dealing with bank known to facilitate fraud<p>by …

  95. Release times shown are from the original source. The GDPNow model is usually updated within a few hours following these times.<p><b>Release</b><p><b>Date of</b> …

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  97. President Trump met with Palestinian President Mahmoud Abbas at the White House on Wednesday<p>Just over a month after Vice President Mike Pence said that President Donald Trump was considering moving the U.S. embassy in Israel to Jerusalem, the president has met with Palestinian President Mahmoud …

  98. The hosts of Trump’s favorite morning show have some bad ideas about health policy.<p>A host of President Trump’s favorite morning show thinks coverage …

  99. With the unemployment rate falling to 5.3 percent, the lowest in seven years, policy makers are heaving a sigh of relief. Indeed, with the technology …

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  101. If Apple Inc. were a bond fund, it would dwarf the competition.<p>The iPhone-maker has $148 billion of its record $257 billion cash pile invested in …

  102. Although millions of Americans will feel the effects of their votes, Republicans refuse to wait a few days.<p>Without any analysis from the …

  103. (Photo: Kaitlin McKeown/The Herald-Sun via AP)<p>Brandon Ruffin holds a sign during a Fight for 15 rally in Durham, North Carolina, on November 29, 2016.<p>…

  104. US inequality has been rising for decades, but it gained political prominence after the Great Recession gave rise to grassroots movements like Occupy Wall Street, forcing both political parties to start openly debating the issue.<p>Unfortunately, the two major US political parties appear largely …

  105. Why worry about the truth, when you can have a monster tax cut?<p>House Republican leadership hopes to vote later this week on an unpopular health bill …

  106. Working gas in underground storage, Lower 48 states Summary text CSV JSN<p>Historical Comparisons<p><b>Stocks</b><br>billion cubic feet (Bcf)<p><b>Year ago</b><br>(03/24/16)<p><b>5-year</b> …

  107. Oil getting slaughtered and gas in NJ has barely come down and actually up in last month overall.

  108. FTRPR – seriously considering this today.. now at 38.

  109. Wow.  This decline in FTR is breathtaking.  I'm very tempted to sell some 2019 $1.50 puts for 0.60.

  110. TSLA stopped dead at $296 so far (weak bounce line).  $300 calls are still $11 so no worries yet.  

    Indexes swinging violently too.


    Dollar/Lunar – I don't know if it was a head fake.  We had weak data today so it went lower and Euro is blasting higher as fear of Le Pen evaporates.

    NOK/Albo – Good call on them.

    BitCoin/Naybob – From this chart, it looks kind of like various Governments are trying to stem the tide that is sweeping over their monopoly on the creation of currency but all they can do is slow it once in a while:

    Oil $45.60!  

    House about to vote on Health Care Bill – Yikes!  

  111. DIS finally found some buyers

  112. FTRPR – I'm been legging into this as well.  Last purchase 39.10

  113. Wow, oil hitting the -5% line, brutal!  

  114. BDC – Crypto Epilog – One more thing, when you shut down 98% of BTC trading volume (CNY), given the global liquidity squeeze we are in, it is only natural that those with liquidity or "money" would demand a higher price to lend their liquidity to anyone wanting to cash out their crypto asset positions.  Thus, much like the dollar, raising the price. 

    I am sure that the currency share of BTC global trading volume has changed radically since the Chinese acted in Feb and would not be surprised if the two principals in the "dollar" carry JPY and USD are now sporting a higher share %.  JPY through Japanese banks accommodation of off shored operations in China is attached to the hip of CNY or RMB.  With China's liquidity crisis already causing major fx hedged commodities unwinds (longs covering) while sending Tech through the roof (shorts covering), this trade should get very interesting in the near term. Out.

  115. F just malingering around at 11. all lines and signs still point -down-

  116. Phil – thoughts on buying some contracts on oil at these levels?

  117. Scott – If I'm correct, the FTRPR has a mandatory conversion into common stock next June.  If the common stock stayed at this price, you would receive 20 shares of common worth  $29-30.  (Of course this will all be adjusted for the reverse split).  Assuming you get 4 more dividends at $2.78125, that still does not meaningfully exceed what you are paying for the preferred.  Don't you also have to account for the common dividends you would receive had you simply bought the common ? I don't find it attractive, but I could be wrong.   Why do you find it attractive ?

    You'd be far better off selling the 2019 1.50 puts, IMHO.

  118. Phil

     CIM what do you think the down side is?

     Thinking of sell some puts



  119. What is the FTR dividend post split?

  120. Jelutuck – I think it will be 15 X .16 or $2.40.

  121. Rumor has it that TSLA has ordered Grohmann engineering to stop working on BMW, VW and Daimler and didn't inform any of the clients that work has stopped.  Supposedly lawsuits will be filed when Grohmann misses deadline and now Musk who basically provoked these lawsuits can use it as an excuse for Model 3 delays.  He has not had an easy time with Grohmann so far.  It is a rumor but does make sense.

  122. Phil – RUT showing the way and JPY/USD – I concur, indeed with the NAS less than believable (short covering), keep your eyes on the RUT and larger NYSE.

    Interesting codicil – JPY/USD just slammed off of 113 today, retracing and now hovering at 112. After the rise from 108 since 04/16, if the liquidity squeeze is back on, so will the carry be and a retrace for that pair would be in order.  Watching closely and out.

  123. Nattering – those are good data points. Bitcoin is going parabolic. Now 1650 on coinbase. That's nuts. Ethereum (total) near 100.

  124. Thanks, albo!

  125. This seems like a good time to review this well written piece on FTR:

    The author does a projection that shows the implication if revenue keeps going down 4% on average per year, and they cut the dividend to $0.12 per year, and used the money to pay down debt.  

  126. Nattering Naybob – if you draw a trendline on USD/JPY highs you will see it slamming into resistance around the 113 mark. It seems to me with oil down so much and the JPY reversing slightly it is a matter of time before markets correct and investors seek the safety of the JPY

  127. Phil,

      Are you adding to your /CL long here or waiting for things to settle?

  128. Batman

    Not sure if this helps but Pharm had suggested that it will take some time for SGYP to materialize. Phil had suggested selling of puts to bring the cost down by selling puts. I did read their slides and seems like they are on the right track from a business perspective also their patent protection was extended to 2032 which is good news. I doubled down on my position today and used the dip as an opportunity to buy, I am hoping they that they can burn less cash and their per share loss is less than what is expected by the street on 8th May which should give us a pop but I am in it for the long haul.  Hope that helps.


  129. Rustle – Musk just bought them in Nov and recently closed the deal. Musk is pissing off the union boys in Germany and scabs in Fremont, who now want to unionize.  Motley Fool covered how the whole acquisition has been botched. More on Grohman founder being ousted and a potential strike at their plant in Prum, Germany.   Muskie and Out.

  130. Trumpcare passed House vote

  131. FTR - Selling the 2019 1.50 puts for .60 as Palotay mentioned, would, if exercised, provide an entry at .90.  If they keep the .16 dividend, that would provide a yield of 17.7% going forward from there.  That's assuming Phil is right in his analysis of this company, and that they don't cut their dividend, or eliminate it.

  132. FTRPR/albo – thanks. Selling puts almost always seem to win. Yeah, I need to get the prospectus back in front of me (have it saved on my desktop somewhere-yes here it is..) ok, let's see.. keeping to pre-split prices: as I read it, assuming the price on June 29, 2018 is less than $5 pre-split ($75 post split), holder will receive 20 shares per FTRPR for a net 1.20/share if buy now at $38. At that point, would have shares and start receiving the ..04/qtr (pre-split) dividend.. so, 2 more div take us to Jan 2019 with 20 shares, net cost of 1.12/share, going forward with an effective 14% dividend and any appreciation in price and dividends to come, and have locked that 1.12 price in now.   If sell the Jan2019 1.5 puts for .60 I have a potential net entry of .90, and if not put to me, an annualized return of 23.4% (cash covered puts in IRA).  Yes, the puts are better raw return on the date… However: My expectation is that FTR will not remain -this- low by Jan2019 and I would not receive the shares. Where will it be then? I don't know. Would I be able to buy them for net 1.12 then? No I don't really think so. Sure, I could do buy/writes.. But maybe it pulls a turbo on us and yet another missed opportunity to BUY it low.  Probably other ways to get 1.12 right now with common and put sales, but that doubles commitment up front, and would not sell calls here at all. No way.

  133. TSLA/Naybob

    read that article.  This will eventually backfire on them.  He could buddy up to Trump, but he won't make friends with Merkel and Germany who will obviously favor their own car companies.  OH WAIT, TSLA is not a car company, it's a tech company.

  134. pat_swap / SGYP – Thank you - Yep – I remember Pharm saying the traction on sales could take a while…  I sold some Puts at 4.5 and am OK…  but just makes no sense… accept earnings that makes sense…  hopefully they have some good news 

  135. Is any other reason needed to know the new health care bill is bad for us:

    "Before voting on the bill, lawmakers voted overwhelmingly to exempt themselves from it."  

  136. FTR – I do have FTR puts in an account too (many previous ones), rounded out to a commitment of 4500 shares with net cost basis 1.85/share assuming all are put to me. The lowest cost of these are 20 contracts with a net 1.416/share entry (purchased yesterday/today).   The FTRPR today extended out to 1.12/share still beats that even with those being assigned this November and start receiving five .04 dividends…

  137. Scott – I think if you bought FTRPR at $38, you would have the 20 shares you receive at $1.90 cost, not $1.20.  But whichever way you decide to go, we better hope and pray that they can turn things around.

  138. FTRPR/albo – I'm counting 5 more dividend payouts, based on ex-div date being before June 29, 2018.  Yes do want them to succeed!  A touch over 1% of that IRA account so…would be nice to see it become a bigger part! ;-)

  139. FTR puts – oops, not purchased… meant SOLD yesterday and today.

  140. Japar – "It seems to me with oil down so much and the JPY reversing slightly it is a matter of time before markets correct and investors seek the safety of the JPY"

    When "dollar" liquidity is tight, markets decline, when the JPY/USD carry is on to combat it, closest thing to the PPT out there, that is what drives the JPY up in value vs USD.  Economically lost for decades, and with the BOJ owning half their bond and stock market, the sushi and sashimi from fish caught at Fukushima Daiichi would be safer to consume. Reminds me of THIS and Out.

  141. FTRPR – I see some traded at 37 already today! and 37.45 last.. hmmm…

  142. FTR is a POS

  143. so is GNC

  144. But Jabo, how do you REALLY feel about it?

  145. Looks like they are passing the Health Care Bill with 217 to 212 vote.  Wow, what a nightmare.

    Oil/Torquio – Sure, I've liked /CL all the way down so of course I like $45 but you have to have tight stops below and either try again at $42.50 or with tight stops over $45 again.  Apparently, they don't think OPEC will extend the cuts. 

    CIM/QC – Well, assuming the Fed is gentle with rate rises, then you only have to worry about another collapse in the housing market where the downside is probably 50% – so make sure you will be THRILLED to DD at $10 and then ride it out for the long haul.

     FTR/Jet – Should be 15 x 0.16 so $2.40.

    TSLA now officially stopped out on short calls – passing $297.

    Grohmann/Rustle – I'm pretty sure it's a fact, it's why the CEO quit on him – he didn't want to screw over his clients.  

    FTR/Palotay – Wow, quite the analysis. I'm just kind of betting they don't suffer 4% annual attrition forever.  

    /CL/Japar – At $45, yes or $45.40 (-5%) so my average on 8 is now $47.43, which I'm pretty happy with, despite being down $16,000.

    Hopefully 4 /RB at $1.486 are going to make up for it!

    Back in /NGV7 at $3.30 as well.

    2 /SI avg $16.43

    Would be nice if one of them was a winner, but what can you do?  

  146. Phil / FTR – My key question is are they at risk of going broke / bankrupt.

     I've scrubbed through the financial multiple times I don't see this.  They are now selling at about .35 of book value.  If they don't go broke this is a steal….  at the low end 12 months out they should be at .8 to .9 book value…  They are saving almost 1B by cutting the dividend over a year.  They will stabilize the loss of customers second half of the year.  So I think operationally they will be fine.

    They bit issue is the preferred conversion next year.  I assume this will be dilutive can you explain the impact?

  147. SYY – what a goofy market. popped on a random upgrade. Good for me as got me out of dead long calls (left over from a calendar) for a penny over cost, so "Yay!" But silly move.

  148. Just got a phone call telling me that I "HAVE" to sign up on coinbase and buy bitcoins, eth, or lhc..

    bio--seems like there is a huge push to make the prices go higher.

    I do not understand bitcoins or coinbase but do you think it is getting out of hand or is this just the start in your opinion?

  149. Japar – sorry bout that, Torquio that comment was intended for you.  Either need to cut back on the Jim Beam or its time for new bifocals. Time to hit Eyeglass World, with an on site lab, same day turnaround, 2 pairs single vision plastic for $78, free exam at over 850 locations all owned by National Vision (In 2014, NVI was sold for $1B to KKR).  This shameful plug for the #3 US eyeglass retailer (behind Luxottica and Walmart) brought to you by minor equity interest holder Berkshire Partners of Boston. Sorry folks, somewhat like In-n-Out Burger (family held), their privately held and a license to print money. And now back to your regularly scheduled programming and out. 

  150. SGYP/Scott – Not much info but Citi lowered them to Sell, so they are selling off.

    Synergy Pharmaceuticals Inc (NASDAQ:SGYP) Is Undervalued | Insider Financial

    Synergy Pharmaceuticals Earns Coverage Optimism Score of 0.19

    Synergy Pharmaceuticals Inc. (SGYP) Lays Out A Strong Argument Through Its Technicals via Stock News

    FTR now $1.46 – F them!  From the CC:

    Let me start by saying we're pleased to have met our target of realizing $1.25 billion in annualized synergies and to achieve our third consecutive quarter of gross add improvements in the CTF properties. Our focus now is on improving our customer retention, enhancing customer experience and continuing to improve our cost structure over the coming months. With these initiatives, we are on path to subscriber and revenue stability and improved EBITDA later this year.

    As you have seen, we have reduced our quarterly dividend to $0.04 per share, which will make available approximately $300 million of additional cash annually, increasing to $400 million annually in the second half of 2018. We will use this to reduce debt at a faster rate, and we are now targeting a leverage ratio of 3.5x over the next few years. We also intend to issue secured debt in the near term to address upcoming maturities and reduce our cash interest expense. As our board looked at our long-term capital allocation strategy, we believed it was prudent to reduce the dividend now, enabling us to address the larger debt towers in coming years and giving us ample runway to delever.

    Reducing voluntary churn is a critical focus of the entire company and is an integral part of our plan to achieve improved net addition trends in the CTF properties. The account cleanup in CTF that we discussed last quarter is now complete, and we do not anticipate any further impacts related to addressing these non-paying accounts. In the first quarter, the primary impacts from this process occurred in January. We have seen substantial improvements to our revenue trends following completion of this effort, and we are confident that we are headed in the right direction.

    On the expense side, we continue to execute on our plans for further reductions in operating expenses and increases in efficiencies in order to maintain our strong free cash flow. We have a very clear path to obtaining the synergies we have outlined

    Thank you, Dan, and good afternoon, everyone. Please turn to Slide 10, and I will begin with the key financial highlights of the quarter. First quarter revenue of $2.36 billion declined $53 million from the $2.41 billion reported in the fourth quarter of 2016. Approximately $16 million of the sequential decline in revenue was a result of the previously disclosed cleanup of CTF nonpaying accounts and the automation of legacy nonpay disconnects. The cleanup and automation processes have now been completed. Adjusted operating expense decreased by $10 million sequentially due to continued cost-out initiatives in spite of the annual payroll tax restart. Adjusted EBITDA was $923 million, down $43 million sequentially due to the revenue decline. Our first quarter adjusted EBITDA margin of 39.2% decreased about 8 basis points from the fourth quarter of 2016 due to the top line decline. We continue to target EBITDA margins above 40%. CapEx for the quarter was $315 million as we began the year making good progress across all of our key investment initiatives. Adjusted free cash flow was $175 million, down from $316 million in Q4 2016 due to the seasonality of our working capital. As a reminder, Q1 and Q3 are quarters where we consume more cash and Q2 and Q4 are quarters where we consume less.

    Our synergies and cost savings will be achieved through a number of initiatives, including continued reduction of compensation through process improvements, which we expect to contribute approximately $200 million in efficiencies. We also expect to realize an additional $100 million in expense reduction through business process and system implementations to drive operational efficiencies, resulting in lower third-party services. We continue the process of rationalizing our facilities and real estate footprint and exiting unfavorable leases, which we expect will create $400 million expense reductions. And we are enhancing our discipline in managing video content at each renewal cycle and leveraging our enhanced scale to improve pricing and terms, which we expect to have a $40 million impact.

    Turning to Slide 16. As Dan discussed earlier, we have revised our capital allocation strategy to enhance our financial flexibility while still providing a meaningful dividend to shareholders. The reduction in our quarterly dividend from $0.105 to $0.04 per share will create approximately $1.9 billion of additional available cash through 2021, and we will use this primarily to repay debt. Our target leverage ratio is 4x by the end of 2019 and 3.5x by year-end 2021, down from the current level of 4.39x. As we continue to execute on our strategy to deliver on the full potential of our strong assets and generate additional cash flow, we will continue to evaluate our capital allocation to ensure we strike a balance between investing in the business, paying down debt and returning capital to shareholders.

     Adjusted free cash flow guidance is a range of $800 million to $1 billion.

    Thank you, Perley. Turning to Slide 20. Before we open up for Q&A, I want to briefly walk through why Frontier is well positioned to deliver value over the long term and is taking the right actions today. First, we have strong fiber-rich assets that offer significant growth opportunities. Second, we are executing strategies to improve operational performance and customer experience, and are beginning to see the expected benefits. And third, with the change in capital allocation announced today, we enhanced our financial flexibility and will be able to reduce leverage more rapidly.

    So a key takeaway here is this is a normally weak qtr made worse by integration costs and most of the churn they are experiencing is being caused by people who had unprofitable plans not responding to increased pricing but, on the whole, they will be better off once they clear out the unprofitable accounts (ones who, for whatever reason, had extremely cheap packages that FTR did not wish to renew).  

    FTR/Batman – Well they certainly don't seem to think so.  They just borrowed $10Bn to buy a company that was bigger than they are so yes, they have a lot of debt but the cash-flow is covering it – easily now that they stopped paying a 24% dividend.  They talked about the conversion in the CC – it's going to add $100M to the dividends and they've already accounted for that in their reduction decision.  

  151. SGYP…nothing on my end.  I apologize, but we are in the midst of negotiating with several pharma's and I am at the disposal of them and my management.  VERY crazy and the valuations are not as rich as one would think.

  152. Thanks Phil… 

    The selling is relentless but hopefully they will regret selling at these prices in the future.

  153. I guess insurance like Trumpcare as much as they liked Obamacare.  Either way, it's a win….

  154. AET – P/E of 43

    UNH – P/E of 24

    HUM – P/E of 24

    Which one of these companies is right????

  155. Democrats are licking their chops right now.  This most likely will not pass in the Senate but the Democrats will run ads when House Republicans are up for election against those who voted for the plan.

  156. Um…PCLN is zooming.

  157. Republicans holding a victory party after passing a house vote.  Interesting.  Amazing that they don't care about looking like idiots if the Senate doesn't pass it.  It only passed by 5 votes!  

    Insurance/Pharm – UNH was $30 before Obamacare, now $175.  I think that's a bit irrational given that 15% of their customers are unlikely to be able to afford their services.  Same goes for the hospitals – now we're back to suing the sick.

    Dems/Rustle – Frankly, I hope it does pass and people freak out over the next 18 months at how horrible the Health System gets so the Dems can hang it on the Reps next election.  

    They are all standing there on camera talking credit – makes for a perfect attack ad.  

  158. I wonder if people buy ftrpr and short the common?

  159. And wait to listen to these guys once we get the CBO score! They'll disappear from the camera then. Just heartless, soulless bunch! 

  160. And everybody could be affected:

    The Wall Street Journal on Thursday reported that people who have health coverage through their employers could be “at risk of losing protections that limit out-of-pocket costs for catastrophic illnesses” due to a provision in the revised Republican repeal bill.

    Health care experts told TPM whether that happens likely depends on how Trump’s administration interprets Obama-era guidance regarding the definition of essential health benefits. An amendment to the current repeal bill would give states a waiver to opt out of the 10 coverage areas insurers are currently mandated to offer.

    By allowing states to opt out of certain insurer mandates established by Obamacare, the Republican repeal bill would open the door to imposing limits on previously protected coverage for everyone, including those with insurance through an employer, policy experts said.

  161. Make that 4 votes:

    • The House voting began minutes ago and Bloomberg is reporting the GOP as having enough votes to pass a repeal. The White House is planning a press conference and Rose Garden celebration.
    • The bill will move on to the Senate.
    • Update: The vote was 217-213 in favor of repeal.

    PCLN/Pharm – Wow, what a couple of months they've had, up $200 and up $450 since the election – about 30%.  They are projected to make $85/share next year, up from $75 this year so not really so terrible.  

    EXPE up 30% as well:

    $4.50 last year, $5.25 this year and $6.75 next year?  I'm thinking these forward expectations are a bit out of control.  

    • Spirit Realty is lower by 22% after tenant credit woes caused a big Q1 miss and slash to full-year guidance. Other triple net lease players are down between 3.5% and 7%.
    • Shopping center and strip mall owners aren't immune to the action: Kimco (KIM -1%), DDR (DDR -5.8%), Whitestone REIT (WSR -4.4%), CBL & Associates (CBL -8.5%), Federal Realty (FRT -1.3%), PREIT (PEI -7.6%)
    • Ignite Restaurant Group (IRG, IRGT) could file for bankruptcy as soon as next week, according to Bloomberg.
    • The restaurant operator is in the process of a strategic review amid sluggish sales trends for the Joe's Crab Shack and Brick House Tavern chains.
    • Shares of IRG are down 99% over the last year and trade on the OTC market.

    LOL – I told Tina and the kids I can't see how they can possibly make money at Joe's Crab Shack because they have all you can eat crabs and people go nuts there.  I guess they don't make money is the answer…

    • Transocean (RIG -3.6%) plunges as much as 6.5% despite posting a surprise Q1 profit and better than expected revenues, a strong enough quarter to prompt Evercore ISI analyst James West to say that RIG's report has "positive implications for the stock."
    • There were some reasons for disappointment: Q1 sales of $785M was 41% lower Y/Y even though it beat expectations, EBITDA margins fell to 52% from 59% in Q4, rig utilization was 43% vs. 51% in the year-ago period, and total contract backlog as of April 24 was $10.7B compared to $11.3B on Feb. 9.
    • But more than anything else, sliding crude oil prices are taking down RIG and offshore drilling peers: SDRL -5.6%NE -4.2%PTEN -4%ESV -3.8%DO -3.3%ATW -3.3%RDC -1.9%.
    • Cliffs Natural Resources (CLF +1%) CEO discloses a purchase of 200K shares this week worth ~$1.26M, but iron and steel bear Gordon Johnson at Axiom Capital thinks the move could be a sell signal, not a sign of a CEO's faith in his company.
    • Johnson says Goncalves' comments track record in buying CLF shares has been poor; the iron and steel bear says the last time the CEO made a substantial CLF buy in March 2015, the stock had plunged 81% within 10 months.
    • Goncalves "seems to be the most bullish right ahead of the most bearish of times for the iron ore markets – [which] we feel we are in the beginning innings of," Johnson writes.
    • In response, CLF says Johnson's statements are are "inaccurate and materially misleading," suggesting that such claims are "an intentional attempt to manipulate Cliffs' share price to support [the analyst's] bearish position."
    • Caterpillar (CAT -2.1%) maintains sharp losses, as Axiom Capital's Gordon Johnson calls it "one of the most overvalued stocks we’ve ever seen."
    • Johnson attributes CAT's solid Q1 earnings beat to the timing of variable and period cost recognition and stock-based comp recognition rather than any economic factors, which he says does not bode well for the company in the future.
    • The analyst says CAT is fairly valued at $98, based on peak earnings which were goosed by one-time oil pipeline contracts and an unusually strong China stimulus – conditions he does not expect to be replicated.
    • Johnson speculates CAT framed the quarter as a beat to positively spin factors that will soon be used against it, as the SEC continues its accounting probe into the company.
    • Viacom (VIA -6.8%VIAB -5.8%) is sharply lower after the company logged a beat with its fiscal Q2 earnings, but took a hit on the distribution front as cableco Charter shuffled five networks to its top tier.
    • The company faces likely lower affiliate fee revenues after Charter's move of MTV, VH1, Spike, BET and Comedy Central to its most expensive programming tier.
    • Those affiliate revenues rose 2% in Q2, part of overall revenues that rose nearly 9% with help from Paramount Pictures.
    • Revenue by unit: Media Networks, $2.39B (up 1%); Filmed Entertainment, $895M (up 37%).
    • In Media Networks, domestic revenues fell 2% while international revenues rose 11% (18% excluding currency effects). Affiliate revenues rose the aforementioned 2% (to $1.16B) while ad revenues fell 1% (to $1.11B).
    • At Paramount, domestic revenues were up 25% (to $458M) while international revenues climbed 51% (to $437M). Theatrical revenues were up 10% to $238M, while licensing revenues rose 45% to $347M, fed by Paramount TV production. Home entertainment revenues rose 29% to $198M.
    • Total debt increased to $12.19B by quarter's end; cash balance was $671M, up from $379M as of Sept. 30. In those six months, free cash flow increased 35% to $310M.
    • Press Release
    • At $45.88 per barrel, WTI crude is at a level not seen since late November, and before that, early August. It's also wiped out most of the gains seen since OPEC came to the rescue a year ago with plans for production cuts.
    • OPEC has delivered, but production continues to grow outside of that once all-powerful cartel.
    • Commerzbank's Eugen Weinburg: "At some point, the market should recognize OPEC isn't the most important player in the market any more. That is non-OPEC, and, above all, U.S. shale."
    • The S&P 500 is barely in the red, but the Energy Select SPDR (NYSEARCA:XLE) is off 2%, with the Oil & Gas Exploration SPDR (NYSEARCA:XOPdown 4.2%.

  162. Head of Mount Sinai Hospital on CNBC saying this law is a disaster for hospitals.  Very simple logic, people are still going to get sick, will still need hospital care, and now they can't pay – even if they have the new insurance since it covers significantly less and allows caps on costs.  Capping the cost the insurance company pays doesn't stop the insured from needing the care.  

  163. CLF / Phil – Wow, that CEO doesn't have the best timing record when it comes to buying his own stock:

    • Johnson says Goncalves' comments track record in buying CLF shares has been poor; the iron and steel bear says the last time the CEO made a substantial CLF buy in March 2015, the stock had plunged 81% within 10 months.

    Quite the contrarian indicator it seems!

  164. Buying SPY and IWM Calls….here we go.

  165. Ignite Group- they were one of my customers back a few years ago. Generally good people who tried hard to make things run right but the Joe's Crab Shack facilities were a wreck and sink holes for maintenance money.

  166. Just sold some FTR Jan $1.50 puts for $.40. Let’s see if I can make back some of the $10K I lost going from $5 to $3!

  167. hlf squeeze

  168. Great oil article, Jeff – Ties a lot of things together. 

    Friggin' TSLA finished at $295.46, I miss my short calls already!  

  169. From SA chat:

    Things sure are different with this administration. When Obama Administration was in charge there was no budget for 6 years. This Congress passes a budget after 4 months in office. 

    No doubt POTUS timetable for completing campaign promises was ambitious. Considering the obstructionists in Congress delaying cabinet appointments and the assault by the mass media there was still a lot done.

    Outrage that the wealthy benefit from a rate reduction is laughable. The people who benefit are the people who pay Federal Income Tax. In the US 40% on average not only don't pay any Federal Income Tax, they get credits from the Treasury. 

    As far as Individual Federal Income Tax is concerned the top 20% carry much of the burden. From 2014 CBO data, the top 20% have 51.3% Income and 83.9% Tax Paid, next 20% have 20.0% Income and 13.4% Tax Paid, middle 20% have 14.8% Income and 5.9% Tax Paid, and the remaining 40% have 13.8% Income and get crdits from Federal Taxes. So 40% of individuals filing do not on average pay Federal Income Tax. The top 5% Income paid 64% Individual Federal Income Tax and the top 1% Income paid 45.7% Individual Federal Income Tax.

    NEW|04 May 2017, 03:51 PM  Report AbuseReply1Like
    Author’s reply »


    Clearly this is a tough concept for you so I will make it very simple:


    Let's say a person needs 5 oranges a day to live and there are 100 people and 500 oranges a day are produced by the trees they all work on.


    At the beginning, they have a sort of commune and everyone works and everyone gets 5 oranges each.


    After a while "to be more efficient" they divide the labor and some people become managers and Capitalism works and now they produce 1,000 oranges a day and we get to where we are now:


    The top 20% (20 people) get 513 oranges – 25 each.


    The next 20% (20 people) get 200 oranges – 10 each.


    The middle 20% (20 people) get 148 oranges – 7.4 each


    The remaining 40% (40 people) get 138 oranges – 3.45 each.


    So who should pay the taxes? You have divided up the oranges so that the bottom 40 people don't have enough oranges to live on – they MUST have 1.55 more oranges each or they die.


    What possible logic would say that they should pay tax when they don't even have enough to live on?


    Yet they do pay taxes, don't they, they pay SS and Medicare and they pay sales and property taxes – all things they can't possibly afford but are taken from them anyway.


    And, since they don't have enough to live on, they can't possibly save any for retirement or emergencies, no matter how hard they try, they are forced to live hand to mouth, day after day, just one misstep away from starvation while the top 20 people are flooded in oranges.


    The entire system can be fixed by simply giving the bottom 40 people 1.55 orange (62).


    The top 20 people need 100 oranges but they have 513 – can they spare 62 oranges so 40 less fortunate people can live?


    The next 20 people need 100 oranges and they have 200, so they do have 100 more than they need. They can contribute to but if they give up 31 oranges, that's 31% of their discretionary oranges and the top 20% give up 31 oranges, it's 7.75% of their discretionary oranges.


    The top 20% could give up all 62 oranges (15.5%) needed to fix society and it would still be half as much of their discretionary oranges as the next 20% would have to pay if they split the burden and the top 20% would still have 338 extra oranges (16.9 each) which is 3.38 times more than a person needs to live on PLUS they have 5 oranges each that they do need anyway.


    Or maybe you think the middle 20% (20 people) should be taking it out of their 2.4 extra oranges?


    This concept is so simple, even a monkey can understand it!

  170. Phil all the oil comments have me confused. You wrote about  The contract overhang, JeffDoc posted an article outlining all the headwinds against oil prices and yet we are bullish, why? 

  171. Taxes / Phil – What people always fail to understand is that the important number is not what you pay in taxes, but what is left once taxes have been paid. And I mean all the taxes. I would be more than happy to pay 75% taxes (or even 90%) on $10M because that leaves me $2.5M which is honestly still about 5 times what I need to live very well, and 50 times the average family income. I am sure that many in the bottom 40% would also make that trade. The person who posted these comments should try to live on $10/hour and maybe he would be happy not paying any income taxes. Of course, he would still need to pay all the other taxes, but for some reasons, these don't count. Especially because the top 1% pay the smallest portion of all these taxes. We don't want any of these facts to be posted. The top 1% have seen their income go up dramatically since the 80's and yet there always seem to be some drive to give them more tax relief. How much of that simply becomes greed?

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  185. Phil – CL and RB. I have enough dry powder to DD on RB.  With two weeks left on CL, is it wiser to wait for the expected lower prices as they unwind their large contract positions? I assume RB will trace CL in sympathy. Looking to get my avg. down to 1.5 from, 1.6  

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  204. Investors in Russia just a got a $1.9 billion reality check.<p>Dollar bonds of Russian billionaire Vladimir Evtushenkov’s Sistema PJSC traded with a …

  205. Commentary: At hashtag #IAmAPreexistingCondition, many post their emotional stories after the House of Representatives passes Trumpcare.<p><i>Technically Incorrect offers a slightly twisted take on the tech that’s taken over our lives.</i><p>There were scenes of triumphant celebration, after the House of …

  206. Johnson & Johnson (jnj) on Thursday was ordered by a Missouri jury to pay over $110 million to a Virginia woman who says she developed ovarian cancer …

  207. Apple’s global market share tumbles as tablet shipments continue to slide.<p>Apple’s iPad is still the best-selling tablet on the market, but it’s a market that is still in decline.<p>Apple shipped 8.9 million iPads in the first quarter of 2017, giving it a 24.6 percent market share, researcher IDC …

  208. Warren Buffett said he has sold about one-third of Berkshire Hathaway’s (brk.a) big stake in IBM (ibm), CNBC reported on Thursday, reducing a bet by …

  209. ? Markets rattled as oil price slide leads declines in commodities<br>? Falls for shares in energy groups weigh on bourses as Brent dips below $47<br>? …

  210. “We continue to be surprised by how sort of frankly naïve a lot of people are about production and supply chain,” complained Tesla’s Elon Musk during the company’s quarterly conference call with analysts on Wednesday. (Full transcript here.) “It’s as though there is some like easy way to increase …

  211. Apple has a bigger cash pile than any other company in the world, but it doesn’t stash the most money outside the US.<p>With $124 billion, Microsoft had the most profits among S&P 500 companies kept outside the US last year, according to fourth-quarter company filings compiled by UBS.<p>US companies hold …

  212. If Elon Musk has a critical flaw, it’s that he naturally favors complicated solutions to simple problems.<p>He’s something of an autodidact — he taught himself both automotive engineering and rocket science in the past decade — and his exhaustively curious mind has a tough time resisting interesting …

  213. The dangers of an unwalled garden<p>If you saw a Google Docs email from someone you knew, you’d open it, right? And if, having clicked through, Google asked you to log in again, would you think something was wrong?<p>For countless Gmail users, the answer was no. Yesterday, a sophisticated phishing attack …

  214. This is war.<p>Qualcomm, which has been in a heated battle with technology partner Apple over patent royalty payments, may be pursuing the nuclear option, according to a <i>Bloomberg</i> report, possibly asking the United States International Trade Commission (USITC) to block iPhone imports.<p>At the root of the …

  215. The Berkshire Hathaway 2017 Annual Shareholders Meeting kicks off on Saturday May 6, and to mark the occasion, we looked at how Warren Buffett has stacked up against the broader stock market since he bought the then-failing namesake textile company in 1964.<p>Business Insider compared the historical …

  216. The House Financial Services Committee voted to advance a bill Thursday to repeal major parts of the Dodd-Frank law, enacted in the wake of the 2008 financial crisis.<p>The committee voted 34-26 in favor of the legislation, known as the Financial CHOICE Act, which will soon be up for a larger vote …

  217. Jeff Immelt, the chairman and chief executive of General Electric, ripped government officials on Thursday over failure to finance institutions such as the Export-Import Bank, calling the decision “pathetic” as he cautioned that protectionist trade policies threaten the American economy.<p>In a speech …

  218. Tesla’s lackluster first-quarter results have some folks on Wall Street doubling down on their bearish outlook for the company.<p>In a scathing note sent to clients on Thursday, a team of equity analysts at UBS maintained its “sell” rating and $160 price target on the stock.<p>”We are lowering our 2017 …

  219. By detecting the disruptions of Wi-Fi signals, holograms mapping the immediate vicinity are created out of thin air.<p>Soon Wi-Fi will do more than just connect you to the internet.<p>According to a paper published today, Scientists at the Technical University of Munich (TUM) have developed a holographic …

  220. Here’s what the charts are saying about oil

    During the last few sessions, crude oil has tumbled through key support at $50.00, at $48.50, and today, at $46.60, which has triggered a plunge to a 5-month low at $45.63 so far. Let’s notice on the enclosed weekly chart that my associated weekly momentum gauges are rolling over into an acutely …

  221. It’s very easy to personalize the failures of the last decade as the sins of one man. In that way, Ben Bernanke has done himself no favors. He has …

  222. Copper posted the biggest two-day loss since 2015 as industrial metals plunged amid concern over demand in China and speculation that the Federal Reserve will further raise U.S. interest rates this year.<p>Demand concerns are mounting just as copper stockpiles tracked by the London Metal Exchange …

  223. Puerto Rico Defaults: Are Illinois And New Jersey Next?

    Puerto Rico officially defaults on $70 billion of obligations.<p>This is a bad day for hedge funds Aurelius Capital, Monarch, and Whitebox that are now …

  224. Pat_Swap / SGYP -

    thank you for the SA article…. this makes more sense now.  Both for the drop in price, and how this drop in price does not correlate to any new, news from the company.  I was looking for a pop in the second half of this year and am holding steady… am adding some more long calls and long puts. 

  225. SGYP short puts….

  226. Good morning!

    Oil hit $43.76 overnight, back to $45.44 for the moment, what a train wreck!   Brent is testing $48.50 from below, $46.65 was the low.  /RB hit $1.4543, now $1.4846 and yes, I still like it long but /RBN7 as our premise is based on the holiday weekend that's still 3 weeks away (along with the OPEC meeting that Thursday).  

    Gold and silver were not overnight tragedies, gold is now $1,234 and silver back to $16.46.  /KC was improving but back to $134.35 now.  

    Indexes flat and TSLA looks flat as we wait for NFP Report (8:30).

    Oil/Craigs – Well it is confusing but you are daytrading against our end-of-month premise to be long on oil and gasoline and it would be a real black swan event if we don't have a pop into the holiday weekend.  Other than that, as I've said all winter – the Fundamentals alone don't support $50 oil.

    Taxes/StJ – And what people really don't understand, because it's essentially unfathomable, is how rich the super-rich have become.  Both people and corporations with over $1Bn, sucking more and more money away from the rest of society at an alarmingly growing rate:

    Image result for rise of billionaires

    billionaires forecast

    net worth by source

    I don't know where people think this money comes from when you are doubling the amount of Billionaires in 6 years.  Another $5Tn accruing to just 4,000 people HAS to come from the other 7.5Bn only 5Bn of those people have nothing to give which means they have to squeeze 2.5Bn of us for $2,000 each to build those cash piles.   And those are just the people, add in the corporations and they need another $10Tn to grow ($100Tn worth of equities growing 10%) so we have to give and give and give until it hurts (or kills us with no more health care) the the US Billionaire Fund.  

    Doubling down/Latch – I'd add more here with tight stops below $45 (/CL) and $1.475 (/RB) but make sure you have enough not to get squeezed out if oil drops $2.50 (5%) on you overnight.  We don't know what will happen around the 20th (rollover), we're playing for a pop the following week but this MIGHT be a big effort to flush the longs ahead of an OPEC announcement – but it's a very painful one to ride out.

    • Coming less than 48 hours after the May meeting of the FOMC, and six weeks before the next one, the April jobs report may have little immediate effect on economic policy.
    • Still, a number showing non-farm payrolls growth of under six figures – for the second month in a row – could alter the outlook that economic softness is "transitory."
    • Words from Janet Yellen will also be heard this afternoon, along with several speeches from other Fed officials
    • The U.S. trade deficit with Mexico rose to the highest level in nearly a decade in March, posting a gap of $7B, as a weakened peso made goods produced south of the border cheaper for U.S. companies.
    • Despite rallying more than 9% since the start of the year, the peso, still has a long way to go in making up for the 17% collapse it suffered over the course of 2016.

    US Vs Canada: The Numbers Behind the World’s Closest Trade Relationship

    China Readies for State-Enterprise Ownership Reforms

    War Of Words Escalates: China Blasts "Hyper-Aggressive" North Korea's "Irrational Logic"

    The European Union's antics serve as a reminder of why Britain voted to leave

    Senate To Write Its Own Obamacare Repeal Bill

    House Panel Approves Plan to Undo Parts of Dodd-Frank Financial LawFinancial Choice Act includes easing regulations and some capital requirements for healthy firms and restructuring the Consumer Financial Protection Bureau.


    • Following a sharp selloff on Thursday amid fears of oversupply, the price of WTI dropped into the $43 handle before finding a floor during Asian trade.
    • U.S. production levels are now not far off top producers Russia and Saudi Arabia.
    • Tumbling prices would likely force OPEC members to extend production cuts later this month, according to analysts, but the prospect of deeper cuts appear slim.
    • Oil futures are currently flat at $45.52/bbl.
    • Previously: Energy stocks slump as oil prices plunge (May. 04 2017)

    Comparable store sales turn negative at Shake Shack

    • Shake Shack (NYSE:SHAK) reports sales growth of 42% in Q1. Same-shack sales fell 2.5% Y/Y vs. +0.2% consensus. The company ran up a tough comparable this year after same-Shack sales rose 10% last year.
    • Shack-level operating profit was up 170 bps to 26.9% of sales during the quarter.
    • Average weekly sales for domestic company-operated Shacks fell to $86K vs. $90K a year ago.
    • Labor costs as a percentage of sales increased significantly, up 240 bps to 27.6%.
    • The company ended the quarter with 127 Shacks in operation, compared to 88 a year ago.
    • SHAK -10.75% AH to $29.56.
    • Q1 adjusted EPS of $1.24 vs. $1.35 one year ago. Estimates were for $0.89.
    • Global sales of $1.1B flat Y/Y excluding forex impact; volume point of $1.4B up 1%. China sales up 5%, with volume point up 17% – company notes price increases there starting April 1 which pulled sales in Q1.
    • Full-year adjusted EPS now seen at $4.05-$4.45 from $3.65-$4.05 previously; Q2 adjusted EPS seen at $0.85-$1.05.
    • Conference call at 5:30 ET
    • Previously: Herbalife beats by $0.35, beats on revenue (May 4)
    • HLF +4.5% after hours

    Buffett: I've sold a third of IBM stake this year

    • Ahead of "Capitalist Woodstock" — the Berkshire Hathaway (BRK.ABRK.B) annual meeting in Nebraska this weekend — Berkshire chief Warren Buffett says he's sold about a third of his stake in IBM in 2017.
    • "I don't value IBM the same way that I did 6 years ago when I started buying," he tells CNBC. "I've revalued it somewhat downward … When it got above $180 we actually sold a reasonable amount of stock."
    • IBM closed today at $159.05. Buffett owned about 81M shares at the end of 2016.
    • He's now stopped selling and Berkshire still has more than 50M shares. But IBM, a "big strong company," has "big strong competitors too," he notes.

    Activision Blizzard -2.1% despite Q1 beat, solid Q2 guidance

    • Activision Blizzard (NASDAQ:ATVI) has fallen 2.1% after hours following Q1 earnings beat expectations and showed solid subscription growth even amid soft results from Call of Duty-focused Activision.
    • The company had 431M monthly active users: Blizzard hit its high of 41M (up 58%); Activision had 48M, down from last year after softness out of Call of Duty: Infinite Warfare; King had 342M (also down Y/Y). In engagement, Blizzard hit a record there as well, and King's time spend per DAU is 35 minutes/day.
    • Revenue breakout: Product sales, $509M (down 21.1%); Subscription, licensing and other revenues, $1.22B (up 50.2%).
    • Net revenues by platform: Console, $615M (down 20%); PC, $566M (up 42%); Mobile and ancillary, $475M (up 95%); other, $70M (up 49%).
    • Net revenues by segment: Activision, $215M (down 40%); Blizzard, $441M (up 50%); King, $474M (up 129%).
    • For Q2, the company's guiding to net revenues of $1.43B ($1.2B accounting for GAAP deferrals, vs. consensus of $1.188B) and EPS of $0.38. For calendar 2017, it's boosting guidance to net revenues of $6.1B ($6.33B accounting for GAAP deferrals, light of consensus for $6.41B) and EPS of $1.80.
    • Press Release
    • Shares of Snap (NYSE:SNAP) closed up 3.5%, and crested $23 today (nearer its debut price), after word that the company is building new tools for advertisers and signing more original content deals.
    • Looking to scale its ad platform, it's rolling out self-service tools to help more marketers buy up ads quickly.
    • Snapchat Ad Manager allows for purchase of any of its formats with greater targeting using just a credit card, vs. buying directly from Snapchat sales or its ad partners.
    • The company has recently signed pacts for TV-like content with companies including NBCUniversal and A&E; today, Scripps Networks Interactive (NYSE:SNIannounced a deal that will bring food and home-related programs to Snapchat Discover.
    • That's an expansion of an earlier deal, and will mean that Food Network and HGTV will start producing shows for Snapchat.

    HBO exploring up to four 'Game of Thrones' spin-offs

    • With ratings hit Game of Thrones winding its way toward a conclusion next year, HBO (NYSE:TWX) is exploring the prospect of as many as four spin-off shows.
    • There's no timeline yet, but the network has deals with four different writers to pursue the idea.
    • Game of Thrones showrunners Dan Weiss and David Benioff and creator George R.R. Martin will be attached to the projects but won't write.
    • The show — HBO's most-watched ever — drew 8.9M viewers in last season's finale, and the season averaged 23.3M multiplatform viewers.
    • YouTube (GOOG +0.5%GOOGL +0.7%) is producing more than 40 original shows and movies in the coming year, and bumping its spending on paid service YouTube Red, it's set to announce as part of NewFronts.
    • That will include a half-dozen original series available for free on YouTube, and it's a step up in strategy as competition grows in quality online programming.
    • “We’re working with YouTube stars and big celebrities that we know have global appeal, advertiser appeal and are largely established on the platform,” YouTube's Susanne Daniels tells Bloomberg.
    • More high-quality programming in the mix vs. user-created videos also offers the chance to mitigate blowback like that the company suffered last month, when advertisers found their ads streaming next to extremist videos.
    • New content will include shows from Ellen DeGeneres and comedians Kevin Hart and Rhett & Link. Johnson & Johnson is sponsoring Best.Cover.Ever, a Ryan Seacrest music competition program.
    • CBS (CBS +0.6%) is up 2.6% in postmarket trading after its Q1 beat despite revenue that fell in a tough ad environment, and with no Super Bowl for comparability.
    • The company's Entertainment segment revenues fell more than 9% (vs. a year ago, which contained Super Bowl 50); affiliate and subscription fees were a bright spot, up 28%, with higher fees and sub growth at the company's streaming service, CBS All Access.
    • Similarly, higher revenues at its Cable Networks were led by growth at its streaming Showtime offering.
    • Revenues by segment: Entertainment, $2.35B (down 9.3%); Cable Networks, $543M (up 3.4%); Publishing, $161M (up 11%); Local Media, $409M (down 8.7%).
    • Revenue by type: Advertising, $1.6B (down 23.1%); Content Licensing and Distribution, $845M (up 15.9%); Affiliate and subscription fees, $842M (up 16.6%).
    • Press Release