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Testifying Tuesday – Powell’s First Speech to Congress Looms Large

Powell speaks! 

We have a new Fed Chairman and clearly the bets are he'll be the same as the old boss as the markets have now recovered to within 3% of their all-time highs ahead of his 10 am address to Congress, led by Global Tech stocks Facebook (FB), Alibaba (BABA), Amazon (AMZN), Netflix (NFLX) and Alphabet (GOOGL) as well as Bidu (BIDU), Nvidia (NVDA), Tesla (TSLA) and Twitter (TWTR).  

Those stocks are up just under 20% for the year, more than recovering from the 10% dip we had earlier in the month – up almost 15% since Feb 7th though, once again, I feel like we're simply back to being overbought and haven't learned any lessons.  We'll have to see though, clearly we broke over our bullish technical "strong bounce" lines and now we'll see if the indexes can complete the round-trip back to their highs or if Powell sends us scurrying back below where we started the day yesterday.

"I would think there's no upside for [Powell] making a splash because he's dealing with a committee that's in flux, just coming together," said Robert Tipp, chief investment strategist at PGIM Fixed Income. "The market tends to do a good job of panicking and defining the range you're likely to be in … Once the taper tantrum got going, 3 percent was the watermark."  That seems to sum up the general sentiment, which is assuming a very gradual return to normal interest rates.  

What we're expecting to hear from Powell is whether the Fed is more worried about overshooting (too loose) or undershooting (too tight) their 2% inflation target (just right) and the nuance will be whether Powell indicates concern about the recent bump in inflation – especially ahead of Thursday's PCE numbers, which are expected to come in hot, around 0.4%, which would pop the Fed's chart from 113.9 to 114.3 and that would be up 2.1% for the year – magic time! 

Since the PCE was at 105.4 in Jan 2013 and took 4 years to get to 112.2 (6.8), the prior pace of PCE inflation has been 1.7% so jumping to 2.1% is already a 23% increase in rate and jumping 0.4% in a month, as expected, is pointing towards another double so I'm going to be concerned if Powell isn't concerned about inflation.  And don't forget, the PCE excludes food and energy – both of which have also gone up sharply.  

I lost yesterday's Trader Challenge at the Money Show because I shorted the Nasdaq (/NQ) at 6,950 and, as you can see from the chart, it went the wrong way on me and I ran out of time before it came back my way.  I was still down about $1,500 at 10:30 but jumped to up $2,000 to close out 10 minutes later (I lost to a guy who only lost $100 at the buzzer!) but it was a fun contest and it emphasized what I always tell people about Futures trading – DON'T FORCE YOUR TIME-FRAME!  

A lot of traders pick a certain time of day they are going to trade (like this challenge) and that's no way to trade things as you end up picking the best of a bad lot as often as not.  What we didn't force was our long trade on General Electric (GE) as we grabbed 100 March $13.50 calls for 0.95 as the stock plunged at the open.  Again, it was not in time to help us in the challenge but they finished the day at $1.25 – up 0.30 (31%) or up $3,000 for the day.    

We discussed a GE play in yesterday's morning Report and, just as we expected, traders and algos freaked out over GE's 2-year restated earnings but we already accounted for them and called GE to be at least $15 after the news so the $14 entry was a gift and, because we were prepared, we were able to jump right into that trade but again – you can't force the timing and it didn't help us by 10:30 though, frustratingly for my competitive nature – it too turned right up as soon as the contest was over.   

This is why I don't day trade!  

We didn't have to touch our Long-Term Portfolio and, after yesterday's excitement, it's now up 10.2% for the year so YAY!, I guess, but our paired Short-Term Portfolio (which is also up 10% on $100,000) has plenty of hedges to protect our gains – just in case.  We'll see how much Powell's testimony affects the markets this morning and I'll be going over our positions in our Live Member Chat Room (I put up 5 FREE new trade ideas yesterday – so don't be greedy!). 

Keep in mind, in our LTP, we made that $50,863 on only $137,190 worth of positions – tons of room to get more bullish as we're still 80% in CASH!!! 

If the Nasdaq stops us out over that 7,000 line, the sky is the limit as we're back to a buying frenzy that will only stop when it stops – so we might decide to get a little more aggressive with some of our Watch List plays but I'm miles away from cutting back on the hedges – as there are still plenty of looming threats out there that are being completely ignored by traders.  

Still, you gotta go with the flow, right?

 


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  1. I guess we are bullish again!


  2. Of course, the markets moving up could be explained by this:

    https://www.motherjones.com/kevin-drum/2018/02/surprise-corporate-tax-cuts-are-making-the-rich-even-richer/

    Almost 100 American corporations have trumpeted such plans in the past month. American companies have announced more than $178 billion in planned buybacks — the largest amount unveiled in a single quarter, according to Birinyi Associates, a market research firm.

    As far as the middle class is concerned:

    This is exactly what happened the last time corporations got a big tax cut, so it’s hardly a surprise. Republicans fully expected this, and all their blather about “capital formation” and “$4,000 in wage growth” was just the usual smokescreen to justify a giveaway to the rich. Back in October, CEA head Kevin Hassett said “I would expect to see an immediate jump in wage growth.” Today he’s singing a different tune: “Right now we’re going to have an adjustment where you see probably more dividends and share buybacks than wage increases.” Wage growth will come later.

    Later they'll claim that to stay competitive, wages have to stay low! Or that they have no margin left for wage increases. Except the CEO wages of course…



  3. “In gauging the appropriate path for monetary policy over the next few years, the FOMC will continue to strike a balance between avoiding an overheated economy and bringing PCE price inflation to 2% on a sustained basis. 

    While many factors shape the economic outlook, some of the headwinds the U.S. economy faced in previous years have turned into tailwinds.  Fiscal policy is more stimulative and foreign demand for U.S. exports is on a firmer trajectory.

    The robust job market should continue to support growth in household incomes and consumer spending, solid economic growth among our trading partners should lead to further gains in U.S. exports, and upbeat business sentiment and strong sales growth will likely continue to boost business investment.

    Taken together, this environment will push inflation up this year and wages should increase at a faster pace as well. Already, the monthly inflation readings were a little higher toward the end of the year than in earlier months.

    The FOMC views the near-term risks to the economic outlook as roughly balanced but will continue to monitor inflation developments closely.

    At this point, we do not see these [market] developments as weighing heavily on the outlook for economic activity, the labor market and inflation. Indeed, financial conditions remain accommodative?.

    In the FOMC's view, further gradual increases in the federal funds rate will best promote attainment of both of our objectives.” 

    In his testimony, Powell included a nod toward the view that stronger growth did not necessarily mean higher inflation. Business investment “stepped up sharply last year, which should support higher productivity growth in time,” he said. Faster productivity growth would give the economy room to grow without generating price pressure.


  4. Go  M!!!!!!

    Please no tease!!!!


  5. A wild first two minutes, the punches are flying.


  6. Newbie on futures here, when Phil says a tight stops. How many % rule does he recon?


  7. Phil/GE

    Phil, what is your target on GE for the calls you bought yesterday?

    Thanks,  

    Linda


  8. Frazier is staggered by Ali's sharp flurries, but counters with a crushing left hook off the ropes, Ali is backing up, a rocky start indeed.  Breaking 2786.25 could lead to the promised land….


  9. Good morning!  

    Not sure what the markets are excited about.  Powell's written testimony seems to keep the Fed on a tightening path and NO ONE is talking about Goldman's call that the market will drop 25% when rates hit 4.5% but I bet GS's HNW clients are looking to lighten up as we test the highs again.

    Notice on the Big Chart the Nas is about 3.75% ahead of the Dow, RUT and S&P in recovering so watch out for any weakness on them to cause the rubber band that connects them to snap the Nas back down.

    NYSE needs to confirm 50 dma but that means just holding 13,000 for the day and then we're forced to get more bullish.  

    Buybacks/StJ – $650Bn projected for the year but then that means over 25% already announced – so the pace will slow from here.  Still, it's going to be an amazing year for buybacks. 

    M/Jabob – Wow, that's nice. 

    Tight stops/Dave – When I say tight stops, I mean a couple of ticks.  On the Nas, no more than 5 points ($100) over.  As a rule of thumb, I like to keep "tight" losses between $50 and $100 as I might try the same line 5-10 times before getting a winner.  

    Fortunately, not the case this morning as it's been all winners so far (tight stops means quick profits too, by the way – as the quick profit pays for the next tight stop!).  

    Good line Naybob but we tested 2,787 last night, so I'd give it 2,787.50.

    Keep in mind that the bounce lines continue after strong – it's just that we don't really care once we're over strong because we're supposed to flip bullish then.  From 2,640 (20% line) on /ES, the bounces were 44 so, after 2,728 is 2,772 and then 2,816 is our next significant stop on the way back to retesting 2,860 (30% line).  

    Perspective is hard to keep, isn't it?

    Image result for ali frazier animated gif

    Sometimes it seems like an index will never go down.

    Image result for ali frazier animated gif

    And then it does.  


  10. Damn, would have cleaned up on that challenge if I drew this morning instead of yesterday!  

    Got stopped out as we went below 6,970 and back over.  /TF 1,560 is my fresh horse to short if we cross back below it.  


  11. GE/Lala – Oh I was hoping for $15 and figuring we'd get $1.50 so this is all bonus now, I'd keep tight stops (0.10 trailing) on the quick trade but, of course, I still love our long-term GE longs.  


  12. The Dollar knows Powell is bearish – it's up to 90.20!  

    New contract. 


  13. Well, OK, had to go back in 2 short at 7,000 again.  What insanity – up and down 30 points in 20 minutes!  

    And now Powell speaks.  


  14. Phil

    What is the final trade on GE sorry I missed it

    Thanks for the help


  15. Phil – thanks for the lines and perspective – and you too remember, that crushing left hook which had Ali or Clay's head ricocheting off the canvas, was the first time he had ever been horizontal on his back,  and the look on his face showed it.

    Post fight, Ali went in the hospital for his jaw, Frazier for his kidneys and hypertension, and both for exhaustion. In that fight of the century, both men left each other irreversibly diminished, as they would never be the same again.


  16. ABX………What is going on with it?  It's acting worse then GE.   Candidate for new trade of the year?


  17. /ES hit 2789.75 at 10:24, now falling like Ali 2774 and counting…


  18. Phil -

    What is the next line (?) level that you would consider going long on gold?  Just curious.


  19. A video of Jerome Powell's 1st monetary policy report.


  20. CMG / Baird

    The company's stock is up 1.6 percent in Tuesday's premarket session after the report.

    Tarantino raised his price target to $400 from $315 for Chipotle shares, representing 28 percent upside from Monday's close.

    The analyst noted Niccol's impressive tenures as an executive overseeing Taco Bell and Pizza Hut brands at Yum! Brands YUM and his experience at Procter & Gamble.

    "We are optimistic that his impact in leading the charge at Chipotle can be similarly successful," he wrote.


  21. CMG/Phil- is it too late to play CMG?


  22. Whee, let's hear it for the Q&A session! 

    That's it, stopped out at 1,552 and 6,950 – what a gift!  


  23. A video of the Q&A session.


  24. At 1:03:26 Maxine Water puts the hammer down, and hard.


  25. GE/QC – There are many, many GE trades as I've been banging the table on them since they hit $16 but yesterday, in the live challenge, we went long GE March $13.50 calls for 0.95, we just stopped out of them at $1.60 (thank goodness).  Yesterday morning, I posted a brand new GE trade that's still easy to get into.

    Fights/Naybob – I used to think I loved boxing but it wasn't boxing – it was those men, in those times – something that can't be recaptured.  Will Smith's movie did a good job of telling though:

    ABX/Ult – Earthquake damaged their New Guinea mine.  

    If you are looking for a short-term play – GET OUT!!!  

    And we're bouncing back – amazing how many dip buyers there still are.    

    Gold/Jeff – $1,300 hasn't even proven itself as support yet but $1,250 I'd put my foot down and accept a move to $1,200 or even $1,150 as a chance to DD.  $1,300 is just to high for me to start a position.

    Silver, on the other hand, seems to have nice support at $16 now.

    CMG/Dave – Too late for me, that's for sure.  I was banging the table on them $75 ago – no way I endorse chasing them now.  I'll probably look to take some off the table at $350.

    But, if you missed GE.  Make sure you don't buy GE or ABX until after they've come back and look fantastic – then you can ask me if it's too late for them too!  blush

    The Dems are doing a good job scoring political talking points with Powell but they live under some fantasy that the Federal Reserve somehow cares about anything other than maximizing bank profits.


  26. Phil- I'm in on GE and ABX with you since Jan but I took the action on my own and sold some 2020 $13 puts for $1.55 when it dipped. 


  27. Phil/GE call trade

    Worked perfectly.  I got stopped out at 1.59.  Thanks for the trade.

    Linda


  28. FU ABX!!!!!


  29. Watch list notes:

    • AAPL – Going, going, gone!
    • ABX – Still cheap.
    • ALK – Still cheap.
    • BBBY – Still cheap.
    • BX – I still like.
    • CAKE – Still cheap.
    • CBI – Taking off 
    • CDE – Good alternative to ABX
    • CHK – Still cheap
    • CIM – We just bought them
    • CLF – Still cheap.
    • ETE – All over the place – cheap again.
    • F – Very cheap.
    • FNSR – Cheaper. 
    • FTR – Going, going…
    • GCI – Still cheap.
    • GE – Last call 
    • GILD – Gone
    • GNC – Still cheap but up 50% from where we started 
    • GPRO – Still cheap
    • HRB – Still cheap.
    • IMAX – Going, going
    • LB – Back to a buy (see yesterday's post).
    • M – Gone! 
    • NLY – Very cheap.
    • PSA – Finally woke up.
    • SKT – Love these guys!  
    • SPWR – Time to bang the table on them.  
    • TGT – Gone.
    • THC – Gone 
    • WPM – Still cheap
    • WHR – You would think they'd do better with tariffs but no.  Still cheap.

  30. I hope FTR doesn't FUK us again AH today…


  31. ABX/Dave – That is certainly the right way to play!  "Always sell into the initial excitement" is a good rule of thumb.

    GE/Lala – Very nice, congrats.


  32. FTR/Jabob – Well, if you have the OOP play, you can lock in gains:

    FTR Frontier Comms. Corp. 1500 1/2/2018 56 $10,725 $7.15 $2.22 $7.15     $9.37 $0.13 $3,330 31.0% $14,055
    Short Call 2020 17-JAN 8.00 CALL [FTR @ $9.37 $0.13] -15 1/3/2018 (689) $-1,875 $1.25 $1.73     $2.98 $0.63 $-2,588 -138.0% $-4,463
    Short Put 2020 17-JAN 8.00 PUT [FTR @ $9.37 $0.13] -15 1/3/2018 (689) $-6,000 $4.00 $-0.43     $3.58 - $638 10.6% $-5,363

    To avoid a lot of damage on earnings, you could cash in the stock at $9.19 ($13,785) and buy 15 2020 $5 calls for $4.20 ($6,300) so that's net $7,485 back in your pocket off the original $2,850 entry means you now have a net credit of $4,635 or about $3 per share vs potential assignment at $8 so your worst case is being re-assigned 1,500 shares at about net $5 ($7,500) and we sell puts and calls again and the best case is collecting another $4,500 when called away at $8 for a total of $11,985 in pocket vs, if you keep the current spread, the max return at $8 is $12,000 so, on the whole, it makes no sense not to protect yourself.

    Same goes for the LTP and I would do that if it were money I were in any way worried about but I won't do that in either of our portfolios simply because it's a huge pain in the ass and they are both small positions we'd be happy to DD if FTR disappoints.


  33. Phil – "I used to think I loved boxing but it wasn't boxing – it was those men, in those times – something that can't be recaptured."

    We are of the same mind. Waxing nostalgic brings those days of yore back, and indeed those times which we experienced cannot be recaptured. And now a moment of Zen… Getting older, excuse me as I have to put my glasses on to read this….

    It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way – in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.  – Dickens

    Different times, people, social moire, substance and character. A new generation of actors, ideas, and yet the usual suspects, as history repeats.  Que up Santayana ol chum and Out.


  34. Phil,

    LL: I know you're not a big fan but looking for:

    (1) any thoughts on what caused the wipeout today? Just reported 4Q results which on first glance seem bullish.

    (2) counsel on my position: I had recently rolled puts to Apr 25s (3.54 now 4.40) and 1/19 25s (5.50 now 5.95) which had been working. Also long a few round lots at 29 from yesteryear.

    Plus, wondering if Mueller would investigate whether or not Trump could have had a hand in this move today?

    Thanks


  35. phil, would you long /TF here?









  36. Japanese Are Selling U.S. Bonds Over Budget, Dollar Fears




  37. LB/Phil- just added LB. ALK- I sold 5 2020 60 puts 8.20, should I still do a 60-70 call spread?





  38. LL/8800 – Q4 came in light at $260M vs $264M expected and up just 6.1% from last year makes it hard to justify more than a 50% move from $15 to $22, let alone $40+ where we got the hell out of this crazy stock. 

    LL/Albo – They did come down nicely but we never loved them, they were just ridiculously underpriced due to that scandal at the time.  That was still more than 50% down from here.

    That pretty much sums it up.  

    As to your position by selling the April $25 puts for $3.54 instead of the 2020 $25 puts for more like $6, you screwed yourself out of $3 worth of protection and for what?   What is the plan selling April puts or even 2019 puts?  At what price would you actually like to own the stock?  I think $18 is very fair and the 2020 $23 puts can be sold for $5 so that's where I'd be.  

    As to Mueller, he seems to have 100 other Trump crimes to investigate without adding new ones.  

    /TF/Lunar – By "here" I guess you meant 1,545 and that was a great call – good instincts.  Note it was also support yesterday so the answer is "Have more confidence in your instincts" cheeky

    ALK/Dave – I like the spread but I'd go lower.  The 2020 $60/70 bull call spread is $4.80 and the $50s are $21 vs $14.30 so $6.70 for the lower spread ($50/60) and $55 ($16.50)/$65 ($11.50) for $5 seems like a bargain with a 10% lower strike ($5) for a 0.20 higher cost.   Always look at the surrounding brackets to see which one is the best risk/reward.  


  39. ALK/Phil- thanks for that, never saw though of playing around with it. 

    By the way CMG just got the an insider buy,

    Chipotle director and Pershing Square Capital Management partner Ali Namvar bought 3,000 Chipotle shares for $ 953,100, or $317.70 each. It's Namvar's first purchase since he was named a director along with three others in December 2016.


  40. Phil/Vacancies-I was in the West Village the other weekend also and was also surprised at how sedate it was there.  Granted it was a three day weekend, but that never mattered in the past.  I hadn't been down there in years because it was always so crowded. Sorry I missed you guys for dinner this past Saturday-was tied up.

    What are your thoughts on some of this retail space in Manhattan being converted into residential given the housing situation there?  Wouldn't be the first time this happened in NYC.

    https://www.bloomberg.com/news/articles/2018-02-27/manhattan-landlords-cut-deals-to-stave-off-vacant-storefronts 


  41. Phil,

    Thanks for the woodshed guidance on LL. Yep, $18 in 2020 is better than 20 in 2019 – I was concerned about being locked in for another year in the event that another negative development surfaced. I don't feel LL is a fire sale, but don't have boundless confidence either. Thanks again.


  42. CMG/Dave – Very interesting.

    Conversions/Seer – Unfortunately, in unregulated Capitalism, it's simply whatever the market will bear.  There's really no planning and that's why all those stores are being displaced because the landlords would rather have them sit empty than accept a rent below market value.  A lot of these guys are foreign investors who one dozens of buildings and it's just a numbers game, which means that, ultimately, they'll sell the stupidest space for all the wrong reasons at the top of the market until it busts and then the next bunch of landlords will make the same mistakes.  

    Data.

    You know who is winning this game?  SBUX!  It occurs to me that, of course they don't need all those stores but they sign very long-term leases at good prices (there's a premium from their perceived ability to pay long-term) and, as long as they break-even for now, they can sub-lease the spaces down the road at much higher prices.  

    That's 223 Starbucks (in 2015) on 22 square miles (and mostly in the lower half) so 10 per square mile which means you are never more than 2 blocks away from the next Starbucks!   Unless those Subways are uptown, I don't think they are there anymore…

    Locked in/8800 – Not to beat a dead horse but keep in mind that, as long as the 2020s are more than 50% higher than the 2019s, say $7 vs $4, then the 2020s will be $3.50 after a year and you'd have gained all but 0.50 of what the $4s would have given you PLUS an extra $3 (75%) protection to the downside.  Far from being locked in, you are better-protected. 

    Also, the delta of the 2020s is lower.  For example, the 2019 $25 puts have a delta of 0.53 while the 2020 $25 puts have a delta of 0.45 so the 2020s will lose 15% less money on the way down.  ALSO, you can sell less of them to collect the same money so your net obligation/margin will be lower.  

    Back to the lows again, good old 1,545 on /TF, 6,956 on /NQ, 2,760 on /ES and 25,550 on /YM – should be bouncy again and very bad sign if it isn't.   


  43. SVXY will go from 100% to 50% VIX tracking. options got killed on both sides, e.g., Jan19 30 calls went from 0.60-0.70 to 007 today. Short options won big. Would've been an awesome time to have been short SVXY options! (which Im sure every insider at their company was… plus a few congressional aides in offshore accounts, etc…)


  44. Hi Everyone

    Back from Peru

    BDC—-just sold the twtr 37.5 c you mentioned as a lottery ticket—-should have mortgaged my home—any other lottery tickets?  ;-)


  45. Phil,

    Thanks for the add'l perspective on LL. Just kidding about Trump's involvement with LL's drop (Melania wanted me to interject that Mueller quip). 


  46. And down we go.  25,500 on /YM would be the fresh horse if it crosses lower but watch 2,750 on /ES as that's halfway between the strong bounce line (2,728) and the 2,772 line it just failed – as predicted at 9:55

    Welcome back Savi – did you feel the earthquake?

    Melania/8800 – That little minx!  


  47. Phil/Real Estate-the market rate appears poised to decline given that many retailers are trying re-negotiate their rents and are probably overstored.  Self-driving cars would accelerate this as most would be happy to leave the city to shop (and not pay the associated taxes) if transportation costs were low enough.  The pension funds also hold a lot of real estate so this is going to be a blow to them as well. 


  48. Real estate/Seer – Oh I sure wouldn't invest in it.  Self-driving and, much more importantly, routinely rented cars are going to change the entire layout of cities and suburbs in the future.  As it is now, with the cost of a driver, my kids can go to the mall (5 miles) for $6-8, which, divided by 3 or 4 of them, is cheaper than a bus or subway and way more convenient.  Without drivers and with ride-sharing apps, costs come down and self-driving, electric cars should compete favorably with public transport and now you have to imagine that there's no longer a big infrastructure expense to drop a city somewhere – you don't even need a lot of parking anymore.

    You no longer need suburban commuter lots – people can just all meet the bus at any gathering spot by being dropped off – that's going to change things as well.  

    Here's a fun fact, I have a 16 year old and 17.5 year old daughter and only once (1) has any of their friends pulled up to our house in a car.  All the kids Uber in my town – it's so much cheaper than owning a car!  My girls have carte blanche to use it and Jackie uses it the most but only 2 or 3 times a week as other times her friend pay so maybe $30 a week at most (more like $20) or she can get a car, pay insurance, pay for gas, etc..  It's not even a contest.

    Now, imagine what happens when the cost of the driver is removed!  


  49. village retail – starting 15 or 20 years ago West Village – Bleecker Street in particular – became hot hot  retail.  But the new guys seemed to be high end 'loss leaders',  Hitting on the "Sex in the City" tour-buses. Now it is cooling off but "they" raised rent and drove out lots of restaurants and local retails who had their 10 or 20 years and then saw their rents double/triple/quadruple at renewal.  here is the local coverage http://thevillager.com/2017/11/22/not-open-enough-for-business-on-bleecker/

    and some more http://thevillager.com/2017/11/16/trying-to-get-the-bleak-out-of-bleecker-st/

    I don't know about general retail to residential; but I have seen a couple garages getting converted. there is always something. NYU gobbled up the biggest Nursery school and turned it into a dorm.  Not a peep from the old mayor or city council-person.  Let the market decide….

    here is one proposal – a vacancy tax: https://www.nytimes.com/2017/11/19/opinion/nyc-empty-stores.html


  50. IMAX / FTR and ESRX – announcing earnings after close….  Interested to hear what FTR says about dividend.  Any interesting info on this? I think they may be cutting it AGAIN.  I've got calls and put on ftr.  

    ESRX has had a good run up the last 12 months…. I took some off the table – I'm hoping they pull back a bit after earnings – will load up if it does.  Still have Stk plus puts /  calls.  

    IMAX should be strong but also had a good run up… I'm also hoping for a pull back here - 


  51. no went after the earthquake—-Machu Picchu etc—-lovely amazing place


  52. unless there was one within the last few days


  53. Vacancy tax/Rexx – That's adding insult to injury for some people but I guess if space is scarce you gotta force people to rent it.  Not surprised about garages, the main reason I uber to the city is parking is $50 and uber is $35 each way and the toll is $15 so $70 and I get driven to the place and leave from wherever I end up or, for $5 less, I have to go back to get my car and wait 20 minutes for them to bring it to me.

    Also, key for me is that, if the traffic into the city gets too bad and I have an appointment, I can have an Uber guy divert me to a train station.  

    FTR/Batman – I hope they cut it and pay down some debt.   They paid out $700M in dividends last year, now cut to $100M per Q but still, that's a lot of money.   Interest expenses are $400M per Q although, on the whole, they run it like a REIT as the cash-flow is about zero and, according to management – should be growing steadily from here on out. 

    Very cool Savi.  Earthquake was in Pichigua YESTERDAY!   There was one in Puquio about two weeks ago as well.

    25,500!  Lined up with 2,753, 1,541 and 6,917.


  54. wow did not know that—-


  55. Phil,

    Aren’t you worried about your girls getting in cars with strangers?

    Any play on /RB?


  56. Strangers/Japar – Less so than with the inexperienced idiots they know!  I know what you mean but no, they never take rides alone – only with friends and, though it has happened once or twice out of millions of rides, an Uber driver would have to be an idiot to do something wrong since they are ID'd with a tracker at all times!  

    As to /RB – Still too high I think but I'd rather see what API is and then see if there's a good play tomorrow morning.  It's the usual, we hope it spikes up stupidly so we can short it into inventories.  Kind of hard with a strong Dollar though.

    Image result for strong dollar animated gif


  57. Powellllll!!!!  


  58. Powell seems to be the opposite of Janet!


  59. I'm probably wrong, but I'd think FTR would cut their dividend back to a 12-13% yield at this price.  We'll see.


  60. albo—my bet is they cut it to ZERO!


  61. FTR.  cash dividend suspended!


  62. As expected… what a POS!

    FU FTR!!!!!!!!


  63. Ugly finish – especially the RUT diving to 1,536 but /YM no better at 25,400 (unless you were betting it, of course!).  

    Powell/Jabob – He's just coming in at a different (and difficult) time and doing what needs to be done.  As I've said, the Fed CAN'T keep rates this low – there's too much global pressure and, if they try to and fail, they look powerless and, like the wizard behind the curtain, the illusion of power is all they really have.  

    FTR/Albo – A 50% dividend cut would be sensible and still a great dividend.  If people want 24%, they should buy more stock.

    Oops, suspended.  More drastic.  Down a quick $1 on that news.  

    AMZN buying Ring – very interesting.  Now they can let themselves in!  

    ESRX doing well.  

    FTR $7.80.  

    GE $14.50.


  64. FTR. should be able to buy <$6 tomorrow.


  65. Damn, forgot to short TSLA at $360.  Why don't you guys remind me???  angry


  66. TSLA, i didn't remind you because i thought you would say "wait till it gets to 390!"


  67. lunar--don't know about under 6 but it won the FU stock of the year in 2017 (barely beating out GNC)..

    Now we have FTR, ABX, HMNY, SPWR, GE, JO, and F battling for the 2018 prize!


  68. Amazon/Ring – Yeah, soon an Amazon bot will show up at your house, let itself in, decide what you need, and order it for you.  Eventually the bot will just live there and the door locks will never unlock for you again.


  69. REITs don't seem to like what Powell had to say… Some REIT ETF down more than 2%.


  70. IMAX Corporation Reports Fourth-Quarter And -6- 

    Feb 27, 2018 16:05:00 (ET)
     

    NEW YORK, Feb. 27, 2018 /PRNewswire/ --

    HIGHLIGHTS

    — Company achieved fourth-quarter global box office of $278 million, up 13%
    over the prior year.

    — IMAX domestic box office increased 17% in the second half of 2017,
    compared to an industry decline of 6%.

    — Installed 165 new IMAX(R) theater systems during 2017, bringing the
    Company's total commercial multiplex network to 1,272 theaters, 68% of
    which are in international markets.

    — Company signed agreements for 170 new theater systems in 2017, resulting
    in year-end backlog of 494 new systems, plus five upgrades.

    — SG&A, excluding stock-based compensation, was down 5% year-over-year to
    $90 million, following the Company's cost-reduction initiative.

    — Over the four-day Presidents' Day and Chinese New Year weekend, the
    Company achieved record February box office of $53 million, led by the
    release of Marvel Studios' Black Panther and three local-language titles
    released in China.


  71. FTR – I think $8 could be a floor and the suspension, good for the company….


  72. Yeah, maybe time for a poke at FTR! They are going to save $150M or more each year on the dividend. That 25% actually looked more scary to me than enticing.


  73. FTR:

    “We are pleased with continued improvement in subscriber trends and churn in our California, Texas and Florida (CTF) markets, and the continued operating efficiencies achieved in the fourth quarter. As we implement our strategy, our board regularly evaluates the optimal long-term capital allocation for the business, and has voted to suspend the dividend on common shares. The suspension will make available an additional $250 million annually2 to accelerate debt reduction. For 2018, we remain committed to enhancing the customer experience, further improving churn, maintaining strong cash flow, and strengthening the balance sheet as we pursue further stabilization of the business and growth longer-term.”

     

    Consolidated revenues for the fourth quarter 2017 were $2.22 billion. Within consolidated revenue, consumer revenue was $1.09 billion, commercial revenue was $941 million and regulatory revenue was $190 million. Consolidated revenues for the full year 2017 were $9.13 billion. Within consolidated revenue, consumer revenue was $4.48 billion, commercial revenue was $3.88 billion and regulatory revenue was $776 million.

    Adjusted EBITDA3 totaled $919 million for an adjusted EBITDA margin4 of 41.5%. For the full year 2017, net loss was $1.80 billion. Net loss for 2017 included an $830 million tax benefit resulting from the reduction in federal tax rates and a $2.35 billion (after tax) goodwill impairment. Net loss attributable to common shares was $2.02 billion, for a diluted net loss per common share of $25.99. Full year 2017 adjusted EBITDA totaled $3.68 billion, for an adjusted EBITDA margin of 40.4%.

    The Company attained more than $190 million in annualized cost synergies and remains on track to achieve its target of $350 million in annualized run-rate cost synergies by mid-2018.

    So, without a one-time $2.35Bn tax impairment, money would be rolling in.  

    For the fourth quarter of 2017, net cash provided from operating activities was $665 million and adjusted free cash flow5 was $228 million. For the full year 2017, net cash provided from operating activities was $1.85 billion and adjusted free cash flow5 was $790 million.

    Yet you can buy the entire company for $700M! 

    LOL Tangled – Just be glad it hasn't figured out it doesn't need you at all!  

    IMAX/Jabob – Nothing wrong with that.  165 new installs per year and a 494 backlog sounds like 3 years to me!  You know who has backlogs like that?  BA!  

    Jared Kushner's security clearance has been downgraded after review.  That's not good!  His assistant already announced he's leaving. 

    FTR/1020 – $8 should hold – that's why it's our target, we expected them to cut the dividend.  If they didn't cut the dividend the target should have been $20!  


  74. Even more reason to swap FTR into CTL.  12% dividend, and a much better opportunity for appreciation.  Take the loss, write it off, and move on.  JMHO.


  75. Jared / Phil – My guess is that he is one guy who wishes he had not gotten involved in this mess! If Trump had not been elected there would have been no investigation of his crooked business practices. But now there is chance (can't guess what now) that he will follow in his father's footsteps in the big house. It has not been that great of an opportunity for him.


  76. ETSY up 3 points in after market.  Sold some.


  77. Phil / ESRX – good quarter… on guidance I'm struggling to understand guidance given Tax impacts…..  If I'm reading correctly it's not good when you back out tax help.  Phil thoughts on this?

    2018 Guidance

    As previously stated, the Company is using $20 million of the tax benefit from the Tax Act to fund a bonus pool to reward our non-executive employees.  While it was not contemplated when the 2018 guidance was released, we are not adjusting our guidance for the item.  The Company reaffirms its guidance and expects consolidated 2018 adjusted earnings per diluted share guidance in the range of $9.27 to $9.47 ($1.60 attributable to the Tax Act), which represents growth of 32% over 2017 consolidated adjusted earnings per diluted share at the mid-point of the range. 

    The Company expects total adjusted claims for the first quarter of 2018 to be in the range of 335 million to 345 million, of which 280 million to 290 million is attributable to the core business.  Consolidated adjusted earnings per diluted share for the first quarter of 2018 are estimated to be in the range of $1.73 to $1.78, which represents growth of 30% to 34% over the first quarter of 2017.


  78. SCOTTSDALE, Ariz., Feb. 27, 2018 /PRNewswire/ -- Axon (AAXN), the global leader in public safety technology, today released the following quarterly update letter to shareholders.

     

    Record annual revenue of $344 million, up 28% from 2016 

    Q4 revenue of $94.7 million, up 15% year-over-year 

    Q4 GAAP EPS of ($0.04) includes $8 million tax reform-related charge; Non-GAAP EPS of $0.13

    $82 million of cash and short-term investments and zero debt at December 31, 2017

    Completed the largest ever cloud data migration, moving 20 PB of data onto Microsoft's Azure cloud 

    Introduces 2018 financial guidance, including 16%-18% revenue growth and 300-400 basis points of operating margin expansion


  79. AAXN up 11% after the report!


  80. vacancy tax – I know it sounds absurd.  i guess it depends on your view of the absolute nature of property rights.  I'm guessing real estate investors in NYC know that both (a) generally the real estate lobby rules the city in many, many ways but still (b) there is always some risk of zoning change, rent regulation, subway construction, bridge collapse etc. etc.  To me this sort of fall into the second category.  There was talk of 'rent-control' for retail; but perhaps this might be better.  A nudge.  I'm glad I'm not the mayor.


  81. I find the reaction to FTR interesting and not surprising.  Different investors buy stocks for different reasons – some mainly for the fat dividend that is not sustainable and are disappointed when the company decides to do the right thing.  Is the company going to be stronger or weaker by cutting the dividend? Management usually don't take that kind of decision lightly, knowing they will lose a portion of their investor base.  But in a rising rate environment and with the business stabilizing – maybe that's a bet on themselves to reduce the debt load faster.


  82. STJ-looks like Melania was right-he should have stayed out of it.


  83. mitomeio/FTR-don't forget less interest is deductible this year.  That was a consideration too I'm sure.


  84. Savi – BLOK?









  85. Trump reaches deal with Boeing on new presidential planes








  86. Ivanka Trump’s life just fell apart


  87. Arctic warming: scientists alarmed by ‘crazy’ temperature rises




  88. This is like Game of Thrones, but with idiots




  89. Good morning!  

    I'm thinking of driving to Florida with the kids for spring break – bad idea?  I think it would be a fun road trip but it's a lot of miles (1,200) but I figure leave Thurs pm, DC that night, Charleston Fri Night and we make Boca the next day.  Kids have never seen the country from the ground other than one trip to Toronto and our ski trips to Vermont. 

    Comments/Suggestions would be appreciated.

    Also, a "speed all you want" pass would be nice – if anyone has a CIA card or something…  cool

    Probably my biggest worry (aside from the kids deciding it's boring in hour 3 and making me miserable for the next 33) is getting tickets.  I drove to Florida with a girlfriend once in my RX-7 and we averaged over 90, only drove about 12 hours and made it there and back in one day each way.  Those were the days! 

    As to the markets, up a tiny bit as Europe is down only 0.5% and Asia was down 1-1.5% so shaking it off quickly in Europe.

    DKS will stop selling AR-15s.  I'm amazed that they do sell AR-15s!  I mean, what total BS that my kids (or one of their idiot friends) can go to the mall and pick up an AR-15.  I don't think our Dick's has them but we do have a huge Dick.  wink

    Image result for dicks sporting goods superstore

    See! 

    Anyway, markets:  FTR $6.50!  Still fine for our spread and we'll buy back the short calls.  

    API Report showed a small net build.  Didn't make /RB or /CL happy but honey badger don't give a damn, /NGV8 back at $2.80

    Crude: +0.933 mb Gasoline: +1.914 mb Distillates: -1.437 mb Cushing: -1.277 mb

    Dollar continues to get stronger, indicating the narrative on the Fed hasn't changed overnight.

    Ouch!  

    25,255 is 50 dma

    2,733 is 50 dma

    6,671 is 50 dma

    1,550 is 50 dma

    So either the RUT confirms a recovery by getting back over 1,550 or the Dow or S&P confirm a disaster by failing theirs – that's the day today!


  90. Told you so re. utilities:

    The US electricity sector is in a period of unprecedented change and turmoil. Renewable energy prices are falling like crazy. Natural gas production continues its extraordinary surge. Coal, the golden child of the current administration, is headed down the tubes.

    In all that bedlam, it’s easy to lose sight of an equally important (if less sexy) trend: Demand for electricity is stagnant.

    Thanks to a combination of greater energy efficiency, outsourcing of heavy industry, and customers generating their own power on site, demand for utility power has been flat for 10 years, and most forecasts expect it to stay that way. The die was cast around 1998, when GDP growth and electricity demand growth became “decoupled”:

    Only took what, about 10 years for people to agree with my premise…

    demand vs. gdp growth

    ESRX/Batman – It was fine, just shuffling the numbers under the new tax regime, no one is going to punish them for that.  $20M is nothing anyway, they just showed almost $3Bn in revenues for the Q.  

    What's going on, in the big picture, is the White House is pushing corporations to thank them for the tax cut by pretending all their necessary employee retention bonuses in a tight labor market is thanks to Donald Trump – so we'll be hearing a lot of this sort of nonsense.  

    Someone made a great point in Powell's testimony that the White House is crowing about $1,000 bonuses but the debt per family has gone up $23,500 under this tax plan – so it's costing people $23,500 to get those $1,000 bonuses.  Unless, of course, you are in the Top 1%, in which case it's costing you $23,500 to get an average $250,000 tax break or the Top 0.1%, where it costs them $23,500 to get a $2.3M tax break…

    People are just idiots and the Republicans prey on that…

    FTR/Mito – There are many, many dividend funds holding FTR who MUST sell them now.  That's going to put a lot of pressure on them for a while.   After that, value players will show up and buy them again.


  91. Phil/Florida- I did this trip with my wife, 8 and 3 year old in December. 

    Left NJ on Saturday around 11 am and stayed in Charlotte overnight. Started to drive around 9 and reached Orlando by 5. Return – I took the auto train. It was an awesome trip. 


  92. I think road trips are a lost pleasure.  Our boys are 5 and 7 and when we lived in Kentucky we drove to Pensacola, Hilton Head and New York.  Charleston is a great town, Toast is a neat downtown restaurant for breakfast if you stay over a night.  The worst part of the trip up and down 95 is not knowing what kind of traffic you'll hit around the beltway, and not getting a chance to drive down some off the beaten paths country roads, but if you time it right you can avoid traffic. 


  93. Thanks, that's my plan.  I don't even think I'll book a hotel, so we can stop when we feel like it (a luxury afforded to me by Amex Travel, who are great at getting good rooms at a moment's notice).  

    My Stepfather used to drive several states at a time for his job so he didn't think twice about taking us on road trips and sometimes they sucked but often they were great and I've been to pretty much every tourist attraction this side of the Mississippi and I'm really glad I did it.  While I can't imagine my daughters being thrilled to spend the day in a cavern or hiking 10 miles to see a waterfall – I think I can at least get them to appreciate checking out a few new cities on the way to Grandma's house.  


  94. Phil/FTR calls

    I'm just wondering when you are buying back the FTR calls in the LTP?

    Thanks, 

    Linda

    l