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Testy Tuesday – Nasdaq 6,750 or Bust Edition

Here come those tears again

6,750 is the 25% line on the Nasdaq and we've been here a few times and the bulls were very excited to buy the dip at 6,650, as that's where we popped in early March but, as I noted to our Members in yesterday's Live Chat Room, we're simply repeating a pattern that was supposed to give us an up and down day yesterday that ended flat and today we should be up 30 points on the S&P and tomorrow 25 more and then we crash back to where we started to finish the week.

Can the market really be that programmed?  It will be interesting to see if the news and data actually matter or if we're simply doomed to repeat the behavior we observed from Feb 22nd-28th after two weeks of mirroring the behavior from Feb 5th-21st (see yesterday's morning report).  There's a fine line between being locked in a range and being trapped in a market that is being driven by trading bots.     

When the markets are thinly traded, the Bots do dominate the trading and, if no one has a solid reason to re-program them, then they are going to keep trading the same way, over and over again until someone breaks the cycle.  According to Yahoo, the average volume of the S&P ETF (SPY) is 120M shares a day, but here's how it's been trading for the past week:

Date Open High Low Close* Adj Close** Volume
Apr 23, 2018 267.26 267.89 265.35 266.57 266.57 60,358,900
Apr 20, 2018 268.81 269.06 265.61 266.61 266.61 99,953,100
Apr 19, 2018 269.65 269.88 267.72 268.89 268.89 77,655,900
Apr 18, 2018 270.69 271.30 269.87 270.39 270.39 57,303,900
Apr 17, 2018 269.33 270.87 268.75 270.19 270.19 64,682,000
Apr 16, 2018 267.00 268.20 266.07 267.33 267.33 63,405,300

The up days have been HALF of a "normal" trading day and any volume at all seems to cause a sell-off – that's something to take note of and we'll watch that closely and see if the pattern holds up.   It means if we're "rallying" on low volume, it can all be unwound at a moment's notice (Thurday is when it's scheduled to unwind) and now "THEY" will have to manufacture some news to fit the market's behavior or people might start getting the feeling the whole thing is fixed

Image result for icarus stock marketWe have Durable Goods on Thursday Morning, perhaps that will be a miss.  Facebook (FB) reports earning Wednesday evening and they might say something disappointing that sends the tech sector plunging.  Google (GOOGL) had good earnings yesterday but a large portion of the good part ($3Bn) was due to their investment in Uber adding $3.40/share, boosting implied earnings by 33% on phantom gains.  That's why GOOGL isn't flying higher on those "great" earnings but it has been a "great" excuse to run the Nasdaq back to 6,700 and we'll see if they can even get to 6,750 this week before Icaras' wings begin to melt and we fall back to Earth on Thursday.

A warning sign would be if we struggle to get back to 6,750 at all so watch out for resistance on the /NQ Futures at 6,700, where it's a tempting short and that's lined up with 24,550 on the Dow (/YM), 2,685 on the S&P (/ES) and 1,575 on the Russell (/RTY) and, if 3 of the indexes fail their line then you can short the laggard with tight stops if any of them go back over their lines.  Oil (/CL) is a great short too at $69 this morning as it's more likely to go down than up and $70 is almost certain to be rejected so if you keep a tight stop and short at $69, $69.50 and 2x at $70, you can lose $100 (0.10) and $100 and make it all up with a 10-cent drop from $70 – so plenty of ways to win!  

As you can see, we barely touched $69.50 last week and got a nice $2 drop (thanks Trump!), which we talked about in Friday Morning's Report so it's just the same game plan we had last week that led to $2,000 per contract gains.  Speaking of gains, Coffee (/KCN8) blasted back to $120 this morning so congrats to our Webinar viewers who followed that one to the moon for $1,500 per contract gains – DON'T BE GREEDY!

Speaking of greed, our Greencoins (GRE) not only popped over a penny but have now popped over 2 pennies (0.02) for a MASSIVE 50x gain for the year and it is very greedy not to take 10% off the table when you get insane gains like this (as noted when we entered) as 10% of a 50x move means you are taking 5x profit off the table and you STILL have 90% of your coins to let run.  

Frankly, it may have been our sensible profit-taking at one penny (25x) that had been holding it back before but it seems everyone is done selling and now new buyers are coming in and, hopefully, we're on the way to $1 but I feel a lot better getting 2.5x off the table at 0.01 and 5x off the table at 0.02 and STILL 80% of our coins are left to run – so we're just playing with house money now and we can laugh about the reversals and PATIENTLY wait for more people to come in and play with us.  

Keep in mind that Cryptocurrencies are not investments, they are just silly but if silly makes money, we're happy to play.  We set up a massive win/win for our Members back on Nov 29th when GRE was 0.000220 and we promised to accept them as payment for annual Memberships at 0.000440 so the worst case for our Members was getting a 50% discount on their Memberships and, as it turns out, this is the best case as the GreenCoins are already 0.025 so it's up 56 times so any GRE our Members had left have paid for the next decade of Memberships and the GreenCoins we collected are up 25 times, so we win as well, getting 25 years of Membership payments while offering a 50% discount!  

THAT is how you hedge and play the markets.   It was a simple premise and we felt strongly it was a good deal and we reiterated the offer (at 2x) this quarter, as GRE was still ridiculously cheap, dragged down by BitCoin's problems.  Going forwars, we still think we're about at the point where 10,000 Bitcoins paid for 2 pizzas 8 years ago and, while we'd love to see $10,000 – we'll be thrilled to see $1 – up 2,272x from our November purchase!  

Meanwhile, we're watching and waiting to see how the markets play out in this first full week of earnings season.

The papers lie there helplessly

In a pile outside the door

I've tried and tried

But I just can't remember what they're for

The world outside is tugging

Like a beggar at my sleeve

Oh, that's much too old a story to believe – Jackson Browne


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  1. Good Morning.

  2. Looking at the yield curve:

    The 2-year has gone parabolic:

    The 10-year not so much!

    That’s why I feel like I have to remind investors that the 2/10 spread is still a long way from indicating danger. Put it this way: in the last cycle, the 2/10 spread hit 41 basis points in May 2005. That was 2-1/2 years before the recession started. Remember, a negative 2/10 is not a tripwire. It’s a warning signal.

  3. what did you think about abx earnings?

  4. Phil, I'm not quite ready to give up on CHK.   I was in the play with you earlier and took a tax loss.  Today is my 31st day, so I'm going to try again. 

    Bought stock at 3.02.  Sold the Jan 2019 3 calls for .63 and the Jan 2019 3 puts for .55.

    Wish me luck.  I may need it.

  5. WTF?


    [Your comment is awaiting moderation.]

  6. Good morning!  

    Indexes off their highs but still positive for the moment.  /RTY is the laggard at 1,572.50 and you can short that with very tight stops over the line.  

    /CL still a short too at $68.85 but very tight stops over $69 and we'll try again at $69.50

    /KC off the table at $1.20, going to wait for the next pullback to get back in. 

    Big Chart – It's all about the 50 dmas. 

    GOOGL/StJ – That's just crazy.  Still, it would suck if we had to use random search engines just to break them up.  

    2-year/StJ – Scary.  All the bonds are collapsing:

    Could get very ugly. 

  7. Phil/GRE

    I am not sure how to take 5X off the table. Can you request Greg to chime in and provide the details on how and where he puts the order.

    thanks and regards

  8. In fact, here's 3% on the 10-year!  

    It's official: The 10-year Treasury breaches 3.0%

    • The 10-year U.S. Treasury hit 3.00% without any rounding up for the first time since January of 2014.

    CHK/Albo – They certainly haven't done much to help themselves lately but they did make 0.82/share last year and should make 0.75 this year, which is just 1/4 of the $3 stock price.  I like them as a LONG-TERM play on /NG, not for anything special I expect from them Q/Q.  

    Still good for a new trade in the LTP:

    Short Call 2020 17-JAN 5.00 CALL [CHK @ $3.00 $-0.00] -50 1/8/2018 (634) $-4,750 $0.95 $-0.52 n/a     $0.43 $0.00 $2,600 54.7% $-2,150
    Short Put 2020 17-JAN 4.00 PUT [CHK @ $3.00 $-0.00] -50 1/8/2018 (634) $-6,000 $1.20 $0.28     $1.48 - $-1,400 -23.3% $-7,400
    Long Call 2020 17-JAN 2.00 CALL [CHK @ $3.00 $-0.00] 50 2/9/2018 (634) $7,000 $1.40 $0.10     $1.50 - $500 7.1% $7,500

    Stocks slightly higher as earnings pour in

    • Stocks open modestly higher, highlighted by Caterpillar's ~3% surge after reporting strong beats in Q1 earnings and sales as well as improved full-year guidance, indicating an optimistic vote of confidence in the global economy; S&P and Dow +0.2%, Nasdaq +0.1%.
    • Fellow Dow components United Technologies (+1.4%), Verizon (+1.3%) and Coca-Cola (-1.4%) also reported better than expected earnings, and Google-parent Alphabet (-2.5%) topped expectations.
    • Corporate earnings this season largely have exceeded expectations, as 83% of the S&P 500 companies that have reported as of Tuesday morning have reported better than forecast earnings, according to FactSet.
    • European markets are mixed, with U.K.'s FTSE +0.2% but Germany's DAX and France's CAC both -0.2%; in Asia, Japan's Nikkei finished +0.9% and China's Shanghai Composite closed +2%.
    • Nearly all S&P stock sectors are in the green but gains are limited, with only telecom services (+1.3%) up more than 0.5%; the consumer staples group (-0.2%) is the only negative sector so far.
    • U.S. Treasury yields remain in focus after the 10-year yield nearly touched 3% yesterday before ending at 2.97%, its highest level in more than four years; the 10-year yield currently is 2 bps higher at 2.99%, while the two-year yield also is up 2 bps at 2.49%.
    • Meanwhile, the U.S. Dollar Index is flat at 90.72 after jumping to its highest level since mid-January, and U.S. WTI crude oil +0.3% at $68.87/bbl.
    • U.S. stock futures are higher after six Dow 30 companies report earnings in the premarket session.
    • Strong reports out of Verizon, Coca-Cola, United Technologies, Caterpillar are offsetting weakness with Travelers and 3M. There was also a strong Wells Fargo note out on Dow component Home Depot in the mix.

    • Jan. FHFA Housing Price Index+0.6% M/M, +0.5% consensus, +0.9% previous (revised).
    • +7.2% Y/Y vs. +7.3% previous.
    • "Mortgage rates during the quarter remained slightly elevated relative to most of last year, but demand for homes remained very strong. With housing inventories still languishing at extremely low levels, the strong demand led to another exceptionally large quarterly price increase," said FHFA Deputy Chief Economist Andrew Leventis.

    • Redbook Chain Store Sales+2.6% Y/Y vs. +2.8% last week.
    • Month-to-date sales are up 2.8% Y/Y and 0.3% M/M through April 21.
    • April sales are expected to be up 3.6% for the full month.
    • Q1 net income of $171M or $0.59 per share vs. $92M and $0.28 a year ago.
    • Closings up 9% to 4,626 homes; home sale revenues up 21% to $1.9B. ASP up 10% to $413K.
    • Gross profits of 23.6% of revenue vs. 23.2% a year ago. Operating margin up 270 basis points to 11%.
    • Net new orders up 12% to 6,875 homes; net new orders value up 18% to $2.9B.
    • Backlogs up 21% to 11,245 homes; backlog value up 30% to $5B.
    • 1.7M shares bought back during quarter for $52M.
    • Conference call at 8:30 ET
    • Previously: PulteGroup beats by $0.14, beats on revenue (April 24)
    • PHM +3.6% premarket
    • Wells Fargo initiates coverage on Bed Bath & Beyond (NASDAQ:BBBY) at Underweight.
    • The Wells note hones in on the margin pressure that is building on the retailer.
    • BBBY -0.23% premarket to $17.32 vs. a 52-week trading range of $17.11 to $39.97

    Freeport slips as Q1 earnings, revenues miss estimates

    • Freeport McMoRan (NYSE:FCX-1.1% premarket after Q1 earnings missed expectations and revenues, while climbing 46% Y/Y, fell slightly below consensus.
    • Q1 consolidated sales totaled 993M lbs. of copper, up 23% Y/Y, at an average realized price of $3.11/lb.; gold sales more than tripled to 610K oz. but came in below January's forecast of 675K oz., with an average realized price of $1,312/oz., and molybdenum sales of 24M lbs. were flat Y/Y, at an average realized price of $11.95/lb.
    • For FY 2018, FCX foresees sales of ~3.8B lbs. of copper, 2.4M oz. of gold and 95M lbs. of molybdenum.
    • FCX says it has identified a significant resource at its wholly owned Lone Star project located near its Safford operation in Arizona and has started an initial project to develop the Lone Star oxide ores with first production expected by the end of 2020; Lone Star production is expected to average 200M lbs./year of copper with a 20-year mine life.
    • FCX also says it is still in talks with Indonesia's government to restore stability to its Grasberg operations "and look forward to reaching a mutually positive resolution."
    • Net earnings of $1.2B, or $4.02 per share, compared to $78M, or $2.69 per share, in the same quarter a year ago.
    • Sales by segment: Aeronautics +7%; Missiles and Fire Control +8%; Rotary and Missions Systems +3%; Space Systems -3%.
    • Quarterly cash deployment: Cash from operations of $632M after pension contributions of $1.5B; Capex $216M; Repurchased 900K shares; Paid cash dividends of $586M; Record backlog of $105B.
    • Raised outlook for 2018: Diluted earnings per share (GAAP) of $15.80-$16.10 (from $15.20-$15.50), on net sales of $50.35B-$51.85B (vs. $50B-$51.5B).
    • LMT +1% premarket
    • Q1 results
    Image result for the cat came back
    • Record Q1 profit: Adjusted earnings per share of $2.82, compared with $1.28 a year earlier.
    • Caterpillar's financial position also remains strong, with $948M in operating cash flow at its Machinery, Energy & Transportation unit. The company also repurchased $500M of common stock during the quarter.
    • Raised adjusted profit outlook for 2018 by $2.00 per share to a range of $10.25 to $11.25 per share, primarily due to growing demand for products and services.
    • The outlook includes about $400M of restructuring costs, unchanged from the previous outlook.
    • CAT +4.6% premarket
    • Q1 results

    • Something big is brewing at Harley-Davidson (HOG +2.4%), but investors won't know details until later this year.
    • "The company is currently refining its plans and this summer intends to reveal significant additional steps to improve performance and value creation through 2022," Harley stated in its earnings press release today.
    • What we know so far from Milwaukee this year is that Harley aims to reach millennials and is making an electric push.
    • Previously: Harley-Davidson beats by $0.36, beats on revenue (April 24)
    • Previously: Harley-Davidson higher after positive international sales growth (April 24)

    Burger King comeback at Restaurant Brands

    • Restaurant Brands International (NYSE:QSR) trades higher after same-store sales at Burger King outlets rose 3.8% in Q1 to best the expectation of analysts.
    • The company reports a 3.2% increase in comparable sales for Popeye's and a 0.3% drop at Tim Hortons.
    • The company's adjusted EBITDA was $498M in Q1 vs. $506M a year ago.
    • "We continue to see a lot of growth potential for each of our three brands," says Restaurant Brands CEO Daniel Schwartz.
    • QSR +1.40% premarket to $54.25.
    • Previously: Restaurant Brands beats by $0.10, beats on revenue (April 24)

    Corning -1.4% amid investment-driven swing to loss

    • Corning (NYSE:GLW) is off 1.4% this morning after swinging to a loss in its Q1 earnings driven by higher investments and a mark-to-market loss from currency hedging, along with a sales decline in its key LCD display segment.
    • GAAP and core sales were up to $2.5B and the company reiterated guidance for a "strong 2018."
    • “As we have communicated previously, Corning is in a phase of our Strategy and Capital Allocation Framework in which we are investing intensely for long-term secular growth," CFO Tom Tripeny says. "Execution is on target, and several of our larger expansion projects are coming on line. We look forward to realizing significant sales and profitability benefits as this new capacity ramps during the second half of the year.”
    • Sales by segment: Display Technologies, $745M (down 5%); Optical Communications, $886M (up 8%); Specialty Materials, $278M (down 7%); Environmental Technologies, $322M (up 17%); Life Sciences, $232M (up 10%).
    • It's on track to hit $11B in full-year sales after a stronger second half, it said.
    • Press release

    Verizon +2.5% as unlimited plans hold customers in Q1 beat

    • Verizon (NYSE:VZ) is up 2.5% premarket after logging Q1 earnings that beat thanks in part to customer numbers that showed solid results from the company's unlimited plans.
    • Postpaid smartphone net adds were 220,000. The company posted 260,000 net adds in retail postpaid connections: net phone losses of 24,000 and tablet losses of 75,000, offset by gains of 359,000 in other devices (mainly wearables).
    • Total retail postpaid churn improved to 1.04%; retail postpaid phone churn was 0.8%.
    • Unsubsidized plans make up 81% of the postpaid phone base vs. 72% a year ago.
    • Revenue breakout: Services revenues, $26.7B (up 2.6%); Wireless equipment revenues, $5.04B (up 33.9%).
    • Revenue by segment: Wireless, $21.9B (up 4.9%); Wireline, $7.56B (down 1.6%).
    • Looking ahead, it sees full-year revenue growth (GAAP basis) in low single digits, and service revenue growth to turn positive by the end of the year. It's also expecting low-single-digit growth in EPS before the impact of tax reform and revenue recognition.
    • Capital spending for the year will be $17B-$17.8B (including commercial launch of 5G) and tax reform savings will give a $3.5B-$4B uplift to cash flow from operations, which should yield a 55-65% increase in 2018 EPS.
    • Earnings call slides
    • Press release
    • Mizuho Securities downgrades Skyworks Solutions (NASDAQ:SWKS) from Buy to Neutral and lowers the price target from $125 to $100, a 13% upside to yesterday’s close.  
    • Firm thinks Skyworks will face pricing pressure in 2H as Apple (NASDAQ:AAPL) moves toward lower-end LCD phones with a higher build of materials than RF supplies.
    • Analyst Vijay Rakesh: “We believe the effects of a maturing handset cycle could start to impact the RF suppliers. We believe with Apple taking a step back in its 2H18 handset mix to LCD, flat pricing, and increasing new content, incumbent content suppliers may feel pressure.” 
    • Rakesh estimates that Apple represents 35% to 40% of Skyworks’ sales. The analyst expects iPhone production to fall 2% Y/Y in 2H with new models like the iPhone 9 and the iPhone X update down 15% on the year. 
    • Skyworks shares are down 0.2% premarket to $88.44.       
    • Previously: Apple's Q1 iPhone sales show X weakness; co. offers batteries for MacBook issue(April 23)
    • Amazon (NASDAQ:AMZNpartners with General Motors (NYSE:GM) and Volvo (OTCPK:VOLVY) to deliver packages to the trunks of cars. The program will start out in 37 cities.
    • The service will work through the Key app to allow the car owner provide keyless access to the trunk. Amazon has a similar setup in place for deliveries inside the home.
    • Amazon wants to experiment with alternative package delivery methods for those who worry about stolen packages or live somewhere that doesn’t allow for stoop or porch deliveries.  
    • Amazon shares are up 1% premarket. 
    • Previously: Bloomberg: Amazon secretly working on domestic robots (April 23)

  9. GRE/Pat – Congrats for being rich on paper!  To sell them, it's just like selling an option, you put in an offer to sell on the same exchange you bought them on but I'd use limit sales or the price can drop like a rock as it's super-thin trading (just $14,791 traded today).  PSW Investments still has about 150M of them so over $3M profit if it ever gets liquid enough to sell but, as I've mentioned, BDC and I are exploring ways to promote GRE over the summer so what's happening now is just an accident – as I would have been thrilled just to get to a penny this year! 

    Speaking of PSW Investments and the Hedge Fund – those of you who were interested in investing need to contact Greg to get your paperwork done – May 31st is the last day we can accept funds for PSWI – probably for the rest of the year, at least.  

    Actually, if GRE hits 0.10 – we may never need to raise funds again!  cheeky

  10. Phil – deriv's market has been increasing exponentially. 

    Knowledge Economy can lift someone out of poverty by offering education and a job via a smartphone or tablet/laptop without any infrastructure spending from their local gov't. This mechanism does not exist in the manufacturing economy, which is one of the former's defining characteristics over the latter.

  11. Knowledge/BDC – OK, I'll give you that one but you need infrastructure for WiFi and electricity, both of which are getting cheaper but not there yet.  Also, there has to be knowledge to sell so education has to be invested to bring people to the level where they can make money with a phone.  In the end, you are still working for a man with a machine but this time is different because the machine is a cloud computer….

    Oil is going to test $69.50 and now I'm much more interested in shorting.  Indexes went red – that's not good! 

  12. By the way, BDC, BitCoin is technically a derivative too and yes, clearly those things are out of control! 

  13. Pat/GRE – message the yobit exchange and request that they sync the wallet. You can even reference the source code, which is here. They only listen if you bug them over and over. They need to hear lots of people bugging them, it is how they know that people are interested in the coin. This is the way crypto works — social herd mentality always. Here's a good message format:

    "Dear __________ (exchange mods), I would like to trade ___________ (whatever coin you're having an issue with). Could you please perform the wallet maintenance so we can deposit/withdraw from your exchange?" 

    You could also message something substantially similar to an exchange that doesn't yet trade the coin, but instead say, "please add __________ (some coin) because myself and a bunch of other people I know would like to trade it."

    Phil – did you contact that web dev individual?

  14. Phil – electricity/wifi – yes and this gets interesting now, because you don't electricity infrastructure either (just some renewable solar panels, your phone's Li-ion battery and perhaps a few spare battery packs if your working at night). And cellular ("wifi") is practically universal. You've seen the pictures in India or a remote African village hut where everyone has a phone in their hand. I mean, at this point, the "infrastructure" is actually already there – that step of the transformation to the K.E. is almost complete. 

    The old "manufacturing economy" infrastructure funding and spending requirements of power plants, utility poles and miles of electrical/phone land lines has been deprecated. You don't need to print and ship encyclopedias, build schools and educate teachers… etc etc etc

  15. NXPI – Interesting article on NXPI on SA.

    and :


    "Qualcomm slides to a fresh multi-month low, probing the October low along the $50-mark… Earnings due out after Wed's close."

    Stock now yielding almost 5%.  Selling the 45 puts looks interesting, but will wait until earnings.

  16. As long as you guys are on yobit, you can buy carboncoin at 2 satoshi. This coin has been doing nothing for a long time as well, but it does have really really good namespace. This alone (IMO) makes it a potential target for a social takeover. Pretty much that would be the only thing you're investing in. It's also nearly maxed out it's dilution at 16B coins, so there's few new coins left to be minted, which is nice.

    Note that as a project the coin is completely dead. That means it needs a social takeover in order for it to become interesting again. This is a mega-X-bagger or -100% loss situation. 

    Here's the forum where you can keep tabs.

  17. QCOM – albo… right on.  We might see this in the low 40s unless management announces something massive with earnings … div yield of 5% might not be a good carrot for equity holders as bond yields are tracking higher (10 yr hit 3%). 

  18. BDC/GRE,

    Thanks for the information! I am going to write to them as your advised. Cannot access yobit from work space but will look at the carbon coin as well.

    thanks and Regards

  19. Phil/GRE

    yes little rich on paper but no use. I have put a limit order on less than the daily trading amount. lets see if a a part of it gets executed.

    thanks and regards

  20. Phil / NWL,

    NWL has been in news lately due to multiple hedge fund managers trying to make changes. I was looking at their business and revenue and they seem undervalued. Wanted to get your thoughts on it.


  21. QCOM / Albo – I would certainly add if we got in the 40's! But as you said, let's wait for earnings.

  22. Learner, STJ – We're all on the same page.

  23. Trump says we may have an Iran deal so yay on oil and the markets are bouncing.  Such fun! 

    Honey badger don't care:

    Thanks for letter idea BDC, we should all write to Yobit, whether we're going to trade now or not.  

    Revolution/BDC – Sadly, in Africa, it's mostly 3G – they get our old tech but yes, give them 20 years or so and things could get very interesting.  Let's keep reality in mind, not anecdotes, here's Internet Users per Population:

    India and China have a chance to make stunning gains and, sadly, we don't – we're already at 90% and is it making us more productive or do we just end up electing idiots for President if they are good at social media?

    NXPI/Albo – Nice sale but not cheap yet.  

    NXP/Batman – Well, NXPI does have a way better p/e than QCOM but they are also borrowing a lot of money to buy them and now it's possible AVGO bids for NXPI, since that's something they wanted too.  I agree I like them better with NXPI than without but we'll see how firm with looks.  QCOM needs several approvals to get NXPI and that's why they are trading under the $127.50 offer and, going forward, there's the integration costs and, of course, loan QCOM will have to pay back on their $45Bn all cash offer.  

    Paper/Pat – Well, one day hopefully we can get something going.  I made a nice connection with one of Bezos' people out in Whistler and they own Whole Foods now and if we can get them to accept GreenCoin – Va Voom!   It doesn't have to be Whole Foods, most cryptos have essentially no transaction volume so any small retailer than can consistently flip $50,000 a day would drive the price of GreenCoin through the roof.

    Web guy/BDC – I'm meeting with him tonight but he's interested.  

    NWL/Pat – I did like them on the Jan dip, they've been drifting along since. 

    Submitted on 2018/01/25 at 2:59 pm

    NWL/Lotter – Interesting 20% drop today to cap of a disastrous 6 months.  I think this sums it up:

    After spending billions of dollars to scoop up rivals and build a conglomerate of household products, Newell Brands Inc. NWL -19.92%is reversing course, looking to unload brands and close half its factories.

    The company sells Sharpie markers, Elmers glue, Rubbermaid containers and Graco baby strollers. It more than doubled in size in 2016 when it acquired Jarden Corp., adding Yankee Candle, Mr. Coffee machines and Coleman camping gear to its portfolio.

    But on Thursday, the Hoboken, N.J., company said it will focus on nine core consumer divisions and look to shed nearly everything else, including all of the company’s industrial and commercial businesses. Among the brands to go will be Rawlings baseball gloves and Goody hair accessories.

    They way over-reached and F'd up completely and now it's a fire sale (like Sears) of brands to raise cash to pay off debt and they'll be left with a shell of a company.  Revenues will drop from $14Bn to $11Bn according to them but I can see why investors are fed up at this announcement.  

    But by fall 2017, when Mr. Polk blamed struggling retailers and paltry back-to-school sales for bleak quarterly results, investors were growing increasingly worried. Shares tumbled by more than a quarter as Wall Street feared larger issues behind Newell’s woes.

    “Put simply, we’ve lost confidence,” Barclays analyst Lauren Lieberman said Thursday in a research note. “Today, uncertainty dominates our thought process.”

    That being said, they did make $1Bn this year and the company is priced at $12Bn at $25 so it's not a terrible p/e – it's just the uncertainty that's killing them. I wouldn't jump on them today (because I don't love them like ALK) but the 2020 $20 puts are $3 and I would consider that free money so I'd say let's watch them and hopefully we get at least $2.50 to put towards a spread – like the 2020 $23 ($5.70)/$30 ($3) bull call spread at $2.70 and then you're in for net 0.20 on the $7 spreads and worst case is owning them for $20.

    Ouch, markets slamming down now – nice for the shorts but /RTY still lagging at 1,568.50.  

  24. Phil, thoughts on AAPL bottom and CMG earnings tomorrow…

  25. My thoughts, JMD – We'll have to see earnings on both.  I doubt CMG will have an upside surprise to get them over $350 but AAPL could have BTE IPhone sales, especially the X and then all that selling will turn into panic buying.  Both could go either way and $140 is still the BUYBUYBUY level on AAPL. 

    I told you this would happen as the market matures:

    • HP (NYSE:HPQ) announces new agreements with Jabil (NYSE:JBL) and Forecast 3D for distributed design, manufacturing, and digital supply chain leveraging with the HP Multi Jet Fusion 3D Printing tech.
    • Jabil will add six production-ready Jet Fusion 4210 3D printers in its Singapore facility, which will double its total of HP 3D printers. 
    • Forecast 3D will also add six printers to bring its fleet to 18 systems. The company plans to produce several million end-use parts on the printers in the next year.    
    • Jabil shares are up 0.1% to $27.29.
    • HP shares are up 0.7% to $21.52. 
    • Mar. Consumer Confidence128.7 vs. 126.1 consensus; 127.0 (revised) in Feb.
    • Present situation Index 159.6 vs. 158.1 prior
    • Expectations Index 108.1 vs. 106.2 prior.

    • The major averages are about flat this session, but the banks (KBE +1.9%), (KRE +1.9%) are enjoying sizable gains.
    • Fifth Third Bancorp (FITB +6%) and Zions Bancorp (ZION +3.2%) are leading the way after cruising through estimates.
    • Previously: Fifth Third Bancorp beats by $0.49, beats on revenue (April 24)
    • Previously: Zions beats by $0.27, beats on revenue (April 23)
    • But there's also interest rates, and there's been plenty of worry of late thanks to the yield curve flattening to post-crisis lows – not necessarily a good omen for the economy or bank earnings. Things are steepening at least a bit now, though, with yields on the long end rising to new cycle highs. The 10-year Treasury this morning touched 3% for the first time in four years.
    • PNC Financial (PNC +2%), U.S. Bancorp (USB +1.4%), SunTrust (STI +2.7%), Regions Financial (RF +1.7%)
    • There's little in the way of news flow on Square (SQ -5%) today, but the stock's having a rough session. Shares are now down about 18% over the past month.
    • A headline did cross the Bloomberg a few minutes ago about Square estimates being trimmed at M Science.
    • Although the difference between 2.996% and 3.000% isn't a lot, consumer staples stocks are underperforming today after the 10-year Treasury crossed over the 3% mark.
    • The Consumer Staples Select Sector SPDR ETF (NYSEARCA:XLP) is down 0.68% to trail major indexes.
    • While Coca-Cola's earnings are holding some weight in the sector, it also appears investors are also reacting to the 3% yield news. Notable decliners include Kraft Heinz (KHC -1.1%), Mondelez International (MDLZ -1.6%), General Mills (GIS -1.1%) and Procter & Gamble (PG-0.7%).

    Caterpillar shares turn red after seeing Q1 as 'high water mark' for 2018

    • Caterpillar (CAT -4.1%) reverses earlier gains to turn sharply lower following its earnings conference call, which indicated that Q1 would be the company's "high water mark for the year."
    • CAT said it was seeing better than expected sales volumes and expects strong operating margins throughout 2018 but does not expect to repeat Q1 margins for the rest of the year.
    • CAT says favorable price realization vs. material cost spread was very good in Q1 but not expected to continue later in 2018, but higher commodity prices are good for the company on a whole as it shows customers are doing well.
    • Machinery peers including Manitowoc (MTW -4.2%), Terex (TEX -6.1%), Oshkosh (OSK -5.5%), Deere (DE -4.4%) and AGCO (AGCO -2.1%) are selling off in sympathy.
    • Source:
    • Estimates on Macau gross gaming revenue for April are arriving in from analysts.
    • Bernstein expects GGR of 20% to 21% for the month, while Nomura anticipates 18% to 22% revenue growth.
    • There's also JPMorgan striking a confident tone with its forecast for 21% year-over-year growth in April. The JP analyst team notes that the tally could have been even higher if not for the expected slowdown ahead of the Labor Day holiday in China on May 1 and a below par hold rate in the VIP segment.
    • Macau casino stocks: Wynn Macau (OTCPK:WYNMFOTCPK:WYNMYWYNN), Sands China (OTCPK:SCHYYOTCPK:SCHYFLVS), MGM China (OTCPK:MCHVFOTCPK:MCHVYMGM), Galaxy Entertainment (OTCPK:GXYEF), SJM Holdings (OTCPK:SJMHFOTCPK:SJMHY), Melco Resorts & Entertainment (NASDAQ:MLCO).
    • Pearson (PSO -2.3%) has taken a fall this morning as it appears in the spotlight of The Washington Post, which reports the company added language into some of its software programs for college students and tracked how that affected problem-solving, in a "social-psychological" experiment.
    • Education Week reported on a research paper where nearly 9,300 students were part of the experiment in Spring 2017 when using Pearson's MyLab Programming.
    • The company embedded "growth-mindset" and other psychological messaging into some of the programs and tracked whether students receiving the messages completed more problems than others, Education Week says.
    • Pearson replies: "Recent media coverage has mischaracterized a relatively minor product update by extracting technical language from the research that, when taken out of context, and paired with words like 'experiment,' conveys a malicious intent."

  26. GLW/Phil – did they drop enough on earnings?

  27. No buyers so far…. Dive, dive, dive!

  28. Albo – thanks, good site!

  29. Wow, almost 500 points now.  /RTY came down hard and fast finally.  

    That's why shorting the laggard is such a good strategy.  

    GLW/Scott – I'm not sure what that market is these days.  20% of Corning's revenues still come from Gorilla Glass and 10% from display technologies and I worry somewhat it's "old tech" compared to what's out now.  They only make $1.50/share and earnings are very erratic against a $22.5Bn valuation, which is why I haven't been tempted on this downturn.  

    Year End 31st Dec 2012 2013 2014 2015 2016 2017 2018E 2019E
    Revenue $m 8,012 7,819 9,715 9,111 9,390 10,116 10,933 11,606
    Operating Profit $m 1,153 1,371 2,005 1,322 1,391 1,630    
    Net Profit $m 1,636 1,961 2,472 1,339 3,695 -497 1,598 1,758
    EPS Reported $ 1.09 1.34 1.73 1.00 3.23 -0.57    
    EPS Normalised $ 1.18 1.39 1.73 0.99 3.27 -0.57 1.70 1.94
    EPS Growth % -36.6 +17.5 +24.4 -42.8 +231.7     +14.2
    PE Ratio x           n/a 16.2 14.2
    PEG x           n/a 1.14 1.61

    Very slow growth at best indicates $26.50 is only a fair price for GLW, not really a bargain.  

    6,500 should be bouncy on /NQ – don't be greedy!  24,000 should hold on the Dow, even tough we're 100 below it.  2,630 on /ES and 1,550 is a good line to hold on /RTY and very bad news if they don't.

    • The former CEO of Intuit and PayPal, and now running Personal Capital, Bill Harris is tired of cautioning folks to be careful about bitcoin (BTC-USD).
    • Not mincing words anymore, he calls bitcoin/cryptos a "colossal pump-and-dump scheme, the likes of which the world has never seen."
    • His arguments aren't exactly original: Bitcoin is lame as a means of payment, extreme volatility makes it a poor store of value, and there's no actual intrinsic value. About the only thing bitcoin is good for, he says, is criminal activity.

  30. Speaking of glass, Jackie is thrilled with her IPhone 8 which, so far has suffered 2 bad drops and one horrific drop as it fell off the roof of the house and hit the driveway, but didn't break.  What on Earth was an IPhone doing on the roof of the house?  Apparently you can get a great tan up there….

    This is the problem with open parenting, your kids tell you more than you really want to know!  

  31. 2 year note at 2.98 did not have good demand – that's certainly not helping the market mood as it indicates rates have a lot more room to run.  

    • Crude oil was perky earlier in the session after Donald Trump called the Iran nuclear deal "insane," suggesting he's doing a lot more than leaning towards pulling the U.S. out of that agreement.
    • Holding a joint press conference with Trump, French President Emmanuel Macron, however, talked about a new deal with Iran which would block nuclear activity until 2025.
    • The news has helped crude give up those early gains and turn lower by 0.5% on the session. USO -1.15%, with the Energy Select SPDR (NYSEARCA:XLEdown 0.9%, but outperforming the S&P 500's 1.4% decline.

  32. BDC – Nice call on UVXY !

  33. OK, I was a bit early with my bounce call…

    Early on /KC too, up another penny.  

    • The Street has gone into “full panic mode” ahead of next week’s Apple (NASDAQ:AAPL) earnings report, according to GBH analyst Daniel Ives.
    • Ives: “Heading into Apple’s much anticipated March (FY2Q18) quarter next week the Street has gone into ‘full panic mode’ as supply chain checks out of Asia indicate that June iPhone shipments are trending well below expectations.” 
    • The panic follows Apple supplier TSMC lowering its guidance, which led Morgan Stanley to reduce its July iPhone estimates to 34M units from 40.5M units (consensus: 43M units). 
    • Apple supplier AMS lowered its June quarter guidance yesterday. The guidance dropped revenue nearly 50% to the range of $220M to $250M. 
    • In better news for Apple, the company is reportedly negotiating with Samsung for lower OLED panel pricing for future iPhones. 
    • Apple is offering higher production volumes of up to 100M panels this year (25M for the current iPhone X, 75M for the fall 2018 models). 
    • But Apple might not have as much bargaining power now that LG is struggling to produce panels in time to become even a minority supplier this year.  
    • Apple shares are down 1.9% to $162.15.  
    • Previously: Ireland, Apple tax appeal gets timeframe (April 24)
    • Previously: Analyst downgrades Skyworks on weak iPhone sales estimates (April 24)

    Tesla secures dismissal in Autopilot case

    • Tesla (TSLA -0.2%) can put one of its legal squabbles in the rear-view mirror after the plaintiff in an autopilot software lawsuit filed in 2017 voluntarily dismissed the action.
    • The case over the company's allegedly "dangerously defective" Autopilot ssytem was already in mediation

  34. Hi jabobeast – the comments going into "approval" mode might have something to do with comments that have a lot of symbols causing a filter to get set off. We're looking into it now.  ~ Ilene 

  35. Wow!  

    That's 160 Dow points! 

    Keeping New Home Sales in perspective:

    Trump makes sure Cohen won't flip:

    "F nukes, this is how we'll destroy those idiots":

    Russia buys 300,000 ounces of gold in March and nears 2,000t in gold reserves

    • Russia now holds just over 1,890 tonnes, more than officially reported by China at 1,842t

    • Both Russia and China have the power to destabilise US dollar by dumping dollar-denominated assets

    • Turkey has removed all gold held in the U.S. opting for Bank of England and BIS 

    • Turkey follows trend set by both Germany, Netherlands and others to remove gold reserves stored in the United States

    • Central bank decisions regarding gold reserves are examples of countries becoming nervous about the outlook for the dollar under the Trump administration

    Meanwhile, it's only $84Bn, we overspend that much in a month!  

    No Ilene, it's because after dozens of warnings, his comments got more and more obnoxious and people began ignoring him people were complaining so it was finally the last straw for me so I started ignoring him and now he's stuck in moderation.  There's nothing to "solve" here – Jabob is in time out.  

  36. Question on M, Phil.  I am looking to adjust an M bull call calendar spread in which I have the Jan 20 $18 long call and the Jan 19 short $28 call at net $3.82, with Jan $20 short puts at net $2.81.  

    How can I best roll the short calls to 2020 to lock in my position?  I don't think I want to get much more aggressive, but should I consider just selling the diagonal for $7.97, roll the puts to Jan 20 $27 puts and buy the $27 / $35 bull call spread for about net $0?  Thanks in advance.

  37. While I sit here and watch my UVXY calls and QLD puts stratospherically launch into the money this week, there's nothing to do but contemplate Faith and Humanity. 

    This is good, on so many levels.

  38. Bill Harris is one, unvisionary piece of shit. I should write a piece that takes him down point by point. What a fucking moron.

  39. if bitcoin has no value how can criminals use it? Tough riddle "Bill Harris"

  40. M/Rperi – I would cash the 2020 $18s for $13 and roll the shot Jan $28s ($5.10) to 1.5x the July $30s at $2.60 so that's net $3.90 so it costs $1.10 per long to do that.  Then I'd add 2x the 2020 $25 ($8)/$35 ($4) bull call spreads for $4 so now you've given back $9.10 and you have $3.90 in pocket and 2x the $25/35 spreads 3/4 covered by short July $30s.  The delta on the spreads is only 0.26 so even a 10% drop will only hit you for $1 on the longs while the short calls go worthless and you are tee'd up to sell again.  If it goes up, you can always roll up to Jan $33s ($2.85 at the moment) and still only 3/4 covered.  

    You might want to put a stop on 1/3 of the short July $30s at $3.50, as you don't want them getting away.  That should be caused only by M over $32, which would be over the upper trend and dangerous.  

    BitCoin/BDC – Not to defend Harris but BitCoin has value, like any currency, if the criminals simply agree to use it as a proxy exchange for goods and services.  It's transactable, unforgeable and, though it has a downside, it clearly is less traceable than cash.  It's perfect for criminals and there are many studies showing that the criminal community are BitCoin's biggest users though Monero seems to be very popular there too, as it's designed to be super-anonymous.     

    Yikes, not much of a bounce, could be another leg down.

  41. Everything Bill Harris said is wrong. He takes advantage of the fact that people are significantly uneducated and have poor reasoning skills. Don't get me wrong, it's a free country, you can be a moron if that's your thing. But the important thing to understand is how wrong he is, even if you have the inability to parse the serious inter-twining of unrelated arguments he presented in that utter piece of shit called he calls an article. Because this affects investing decisions and you don't want to be on the wrong side of those, IMO. (or maybe you do, but I don't want to be)

  42. hey maybe FB is the biggest scam the world's ever seen? See? Criminals use!!!! (and they use the US dollar too, hmmm….. interesting)…

    or maybe statements like those belong in the gutter with trash like "Bill Harris"

  43. Trump: Kim Jong Un very open and very honorable

  44. Power-sucking Bitcoin ‘mines’ spark backlash

  45. World wine output falls to 60-year low

  46. SKT just dropped sharply; any news that anyone has seen?

  47. Weak, weak bounces:

    2,685 to 2,620 is 65 points so 13 points is 2,633 (weak), which is right where we failed. 

    24,600 to 23,800 is 800 points (wow) but I'll call it 150-point bounces to 23,950 and 24,100:

    6,700 failed to 6,475 so 225 gives us 45-point bounces but call them 50 so 6,525 (weak) and 6,575 (strong)

    In this case, it's worth noting that the exact line is 6,520 and that's exactly were we're failing.  When the 5% Rule is predicting things that exactly, you know the Bots are driving the market!  

    1,575 to 1,545 is just 30 points so 6-point bounces to 1,551 and 1,557.  

    SKT/John – They may have gone ex-dividend (0.35).

  48. GRE/Phil- any chance of getting in now, or it’s too late?

  49. On 4/12/18, SKT announced a regular quarterly cash dividend of $0.35 per share, payable on 5/15/18 to shareholders, with an ex-dividend date of 4/27/18.

  50. Phil:  ex-dividend on SKT is 4/27.  Regarding their "sharp" drop, it was relative to their performance all day.  SKT suddenly dropped from 21.75 or so to 21.16.  This is not a big drop relative to yesterday.  Maybe it was just a large position being unloaded.  I can't find any particular news.

  51. GRE/Dave – I certainly can't, in good conscience, endorse chasing something we've been playing for 50x already.  It does have a tendency to drastically pull back so I'd hope for that or, as BDC suggests, CarbonCoin has a similar concept and hasn't moved yet.  Treat is like money you are planning to blow on a trip to Vegas and DO NOT take it seriously – likely as not you'll end up wiped out.  

  52. FCX – ouch!

  53. Thank you Phil I'm still working on learning those more complex rolls.  Macy's has been good for me and I want to continue a position.

  54. ABX had a nice day on good volume.

  55. CAT, DE, PCAR… MMM, SCL…   some exciting drops

  56. GRE/Phil- understood, I never take much seriousness in crypto… 

    speaking of which, MO is down quite abit since PM earnings…. wondering if it's time for a spread?

  57. SKT/John – I don't see anything going on but such a bad day, maybe just caught in the selling.

    You're welcome Rperi, it's good to turn those over-achievers into income producers when you can.  

    ABX/Albo – Seem right on track to me.  So strange when the mood turns sour on a company and it gets sold way below its value. 

    MO/Dave – They report Thurs so please remind me tomorrow, this drop is a bit silly now.  

  58. Search Engines/StJohn – that article seems odd to me, and it doesn't explain which market they're looking at. Here in Korea, Naver is far and away what people look at first, followed by Daum, then Google comes in. This is not just an older generation's thing either, I see the kids in my college class pulling out their phones or tablets and immediately going to Naver. Part of this is language, a bit of it is patriotism (MS did a major ripoff in Korea a decade or two ago, and people here have long memories), but even though Google has a Korean interface, the sense is that it's not as thorough as Naver.

    Same goes for social media – not that many people use Facebook, but everyone has a kakao account and many use kakao story, roughly equivalent to Facebook in social media function (although not in data dredging, selling, etc.). I use kakao taxi instead of lyft or uber, and call up people with kakao talk (chat, voice, & video) as something like 97% of Koreans have kakao talk on their phones.

    So, I don't know. Maybe 50 million Koreans is too small a number to affect Google's market share much, but here in Korea the graphic seems odd.

  59. Google / Snow – I think that you are right that in different markets you have different preferences – this chart is for the US market only. For example, in Russia they might use Yandex. In China, Baidu. In that context, it seems quite consistent. 

    Just found some stats and it's worse than I thought:

    So I guess the 50M Koreans don't affect the stats much!

  60. Melania Trump masters the moment

  61. GOP unsettled by narrow win in US House race in Arizona

  62. Nobody wants the iPhone X

  63. Shire willing to back $64 billion Takeda bid, market signals doubts

  64. Good morning! 

    Futures turning ugly again and no particular reason – as we expected, earnings just aren't justifying the price of these stocks – even with the tax breaks factored in.

    • Stocks stumbled as the benchmark 10-year Treasury yield hit 3% for the first time in four years, sparking concerns over higher borrowing costs for companies already facing rising commodity prices.
    • The major indices opened higher but fell in the afternoon after Caterpillar, considered a bellwether for the economy, warned its margins may have peaked in Q1 due to rising manufacturing costs.
    • "The market is saying 'yes, things have been good but what are you going to do for me tomorrow?'" UBS stalwart Art Cashin told CNBC.
    • Caterpillar's warning torpedoed the industrials (-2.8%) and materials (-2.7%) sectors, with CAT, 3M and Lockheed Martin all losing more than 6% despite reporting Q1 earnings that, headline-wise, came in better than expected.
    • The trend also held within the tech sector (-2%), where Alphabet sank 4.5% despite a strong quarter, and fellow FAANG stocks Facebook and Netflix also suffered, each losing ~3.7%, and chipmakers struggled.
    • In the Treasury market, the yield on the 10-year note continued its climb towards the psychologically important 3% mark, actually touching it in intraday trade before finishing at 2.98%, a basis point higher than Monday's close; the two-year yield lost a basis point a day after closing at a seven-year high.
    • WTI June crude oil fell 1.4% to settle at $67.70/bbl.

    Asia Stocks Follow U.S. Lower; Bonds Pare Losses: Markets Wrap. Asian stocks followed their U.S. counterparts lower with industrial shares leading the decline. The 10-year Treasury yield pared gains after piercing the 3 percent level for the first time in four years. Shares in Japan and Korea opened lower. The S&P 500 closed down 1.3 percent weighed by stocks including industrial bellwether Caterpillar Inc. and the Nasdaq 100 Index fell 2.1 percent. The dollar steadied after coming off its highest since January, while crude climbed back toward $68 a barrel. Australian equity and bond markets are shut for a holiday. The MSCI Asia Pacific fell 0.2 percent as of 9:43 a.m. Tokyo time. Topix Index fell 0.5 percent. Kospi Index dropped 0.7 percent.  

    Tech Wrecked, Banks Battered, & CAT Crushed As Rates Rout Spooks Stocks

    Five Things You Need to Know to Start Your Day.

    • MBA Mortgage Applications
    • Composite Index: -0.2% vs. +4.9% (W/W).
    • Purchase Index: flat vs. +6.0%.
    • Refinance Index: -0.3% vs. +4.0%
    • 30 year mortgage rate at 4.73% vs. 4.66%

    The $7 Trillion Debt Pile Looming Large Over Chinese Households.

    Caterpillar, Industrial Shares Slump as Investors Weigh Rising Costs.

    Get ready to pay more for wine, as global production hits 60-year low.

    Golden State movement to secede from US cleared to gather signatures.

    Treasury Secretary Mnuchin to visit China in 'a few days,' Trump says

    China Prepares To Mass Produce Hypersonic Vehicles.

    The Fed Is Wrong: "There Is Everything Unusual About The Current Treasury Curve".


    • The American Petroleum Institute reportedly shows a surprise build of 1.1M barrels of crude oil for the week ending April 20, vs. a draw of 1.04M barrels last week.
    • Gasoline reportedly shows a draw of 2.72M barrels and distillates show a draw of 1.91M barrels.
    • Nymex June crude recently was $67.71/bbl in electronic trading, virtually unchanged from today's $67.70 settlement price.


    WTI/RBOB Extend Losses After Surprise Crude Build.

    • Crude prices whipsawed yesterday after President Trump called the Iran nuclear deal "insane," while France's Emmanuel Macron discussed a new agreement which would block Iranian nuclear activity until 2025.
    • Prices are on watch again today, with Iranian President Hassan Rouhani dismissing Trump as a "tradesman" and warning of "severe consequences" if the U.S. were to pull out of the accord.


    • Saudi Arabia's Council of Economic and Development Affairs has approved of the Privatization Program, which is one of 12 key elements in the kingdom's Vision 2030.
    • It plans to generate about $200B through privatization in the coming years and increase the private sector's contribution to GDP from 40% to 65% by 2030.
    • California utilities PG&E (NYSE:PCG) and Edison International (NYSE:EIX) rose by a respective 1.6% and 1.2% in today's trade as state lawmakers advanced a bill to address future wildfire damages that the companies may be on the hook to cover.
    • Legislation that cleared a key California Senate committee today would shield utilities that comply with approved safety plans if one of their power lines spark a wildfire; however, the utilities would remain subject to potential civil lawsuits, and the bill would not be retroactive, meaning PCG and EIX could still face billions of dollars in costs from wildfires that destroyed thousands of structures last year, Bloomberg reports.
    • But shares of both utilities rallied on news of the amended legislation, as it at least offers investors some clarity as to how California’s utilities will be held responsible for wildfires.
    • Analysts have estimated that last year's wildfires alone could cost PG&E more than $15B in claims and Southern California Edison more than $4B.


    • Videogame sales took a breather in March, slowing down a still-strong 2018, falling 11% Y/Y overall.
    • Sales came to $1.316B compared to a year-ago $1.478B, according to NPD Group. Hardware sales that had been powering overall gains fell 32% to $331M. Software sales dropped 10% to $613M, while accessories sales rose 20% to $372M.
    • But a strong January and February means Q1 spending overall was up 15% Y/Y.
    • Hardware sales are up 13% YTD to $925M, the highest total since 2014, driven by growth in Xbox One (NASDAQ:MSFT) spending, analyst Mat Piscatella notes. PlayStation 4 (NYSE:SNE) was the best-selling console platform in March, while Nintendo's (OTCPK:NTDOY) Switch 32GB with Neon Red/Blue Joy-Con was the best-selling single item.
    • In software, Far Cry 5 (OTCPK:UBSFY) set a franchise launch month record, debuting at the top of the dollar sales chart and becoming 2018's best-seller overall, and publisher UbiSoft becomes the year's top publisher so far. It's followed by Sea of Thieves (MSFT), and MLB 18: The Show(SNE); Kirby Star Allies (OTCPK:NTDOY) is fourth, and Grand Theft Auto V (NASDAQ:TTWO) hangs around at No. 5.
    • Rounding out the software top 10: No. 6, Call of Duty: WWII (NASDAQ:ATVI); No. 7, Mario Kart 8 (OTCPK:NTDOY); No. 8, Ni No Kuni II: Revenant Kingdom (OTC:NCBDY); No. 9, NBA 2K18(TTWO); and No. 10, Monster Hunter: World (OTCPK:CCOEY). Electronic Arts' (NASDAQ:EA) best-seller for March is No. 15 A Way Out.
    • After hours: MSFT +0.1%SNE +1.2%OTCPK:NTDOY +0.1%OTCPK:UBSFY inactive, TTWO flat, OTCPK:CCOEY inactive, EA flat.
    • ETF: GAMR
    • Twitter (NYSE:TWTR): Q1 EPS of $0.16 beats by $0.05.
    • Revenue of $665M (+21.3% Y/Y) beats by $57.44M.
    • Shares +7% PM.
    • Press Release

      Earnings put Facebook back in the spotlight

    • Mobile ads and videos are expected to yield an impressive Q1 for Facebook (NASDAQ:FB) today as the tech giant presents its first quarterly results since the Cambridge Analytica scandal.
    • Investors will watching for any updates to the company's data protection plan, as well as engagement, a pledge to clamp down on "clickbait" and its daily active users (which fell last quarter for the first time in North America).
    • Ahead of the report, Facebook also announced it would appoint Kevin Martin, a former FCC chair, as its interim head of U.S. policy.
    • FB -0.3% premarket