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Friday Thoughts – Did Amazon’s Great Earnings Save the Markets or Doom Them?

Image result for pinky brain take over the world animated gif$134 BILLION! 

That's what Jeff Bezos is worth this morning as Amazon (AMZN) crushed earnings last night with $51Bn in sales for Q1, up 43% ($16Bn) from Q1 last year.  And Q1 is usually AMZN's slowest quarter so we're taking about possibly a $300Bn year, which would make Amazon approximately 1/10th of all US Retail Sales and growing at 43% means we are 7 years away (do the math) from AMZN putting every other retailer out of business.  

Operating income was $1.927Bn, which seems good but not when you consider $3Bn of that $2Bn in profit came from cloud services and the rest of the business lost $1Bn.  In fact, inclusive free cash flow was NEGATIVE $3Bn but let's not cloud the Amazon celebration with ugly facts like those.

I didn't make this up – it's their own slide!  Still, $4Bn of that $3Bn "loss" came from leasing payments (cloud computers are expensive) and they are kind of an asset – until the next generation of computers comes out in 18 months.  One thing Amazon will be doing to close the gap is raising the fees on 100M Prime Members by $20, which will drop another $2Bn to the bottom line but it won't help much if they are burning $3Bn a quarter. 

Speaking of slides, that's what the Retail ETF (XRT) and the rest of retailers are likely to do if Amazon's gains turn out to be Retail's losses.  I just ordered $60 worth of Nespresso pods this morning on Amazon despite the fact I was right in a grocery store yesterday.  Amazon is very good at getting you into the habit of buying things once you let them know what your preference is and now they are delivering things to the trunk of your car if you want!  

We don't have a lot of Retailers in our portfolios and we went over the ones we do like in yesterday's Live Trading Webinar (replay available here).  I imagine we'll see some real bargains popping up over the next couple of weeks and we're still in the middle of the end for Toys R Us and Sears though Toys R Us is more like the end of the end now.  

Retail has had a good run.  Wells, Fargo and Company raised $300,000 to start a bank in 1852 but the gold-based California banking system collapsed in 1855 but Wells-Fargo survived to foreclose on many, many stores and, as a surviving bank – they had a good reputation so they consolidated the businesses, merged it with their mail services (they were part-owners of the pony express) and created the Wells-Fargo Wagon – the World's first catalog delivery service.  

Wells-Fargo was supplanted by the Sears Catalog in the early 1900s and now Sears (SHLD), who were the biggest company in America in the 70s are now on their last legs and now it is Amazon's turn to dominate the Universe, as we know it - at the moment.  But "There are more things in heaven and earth than are dreamt of in our philosophy" and Amazon is not without competion – notably from China's AliBaba, who will announce earnings next week but are a huge bargain compared to AMZN at $238/share for a company earning $10/share.  That's a ple of 24 vs AMZN's p/e of 124.

Bidu (BIDU) is another Chinese mega-corp Amazon has to worry about and they also crushed earnings with a 31% gain over last year and $728M in profits. 

Most notable about Bidu is that they have just raised $2.25Bn for their version of Prime Video/Netflix called iQIYI (which rolls off the toungue if you're Chinese, I guess) but they are also putting together an AI system that will, in effect, run Beijing (Hollywood writers can start submitting Doomsday scripts on Monday) through Bidu's Quantum Computing Research Lab.

Most Americans don't know who Robin Li is but the tagline from this Time cover story is that "Robin Li is helping China WIN the 21st Century."  BIDU has 80% of the Chinese Search Market and are the World's 4th most heavily-trafficked web site.  Bidu has been the champion of Chinese innovation in the way neither Amazon or Google have managed and 1/3 of the tech "unicorns" (companies valued over $1Bn pre-IPO) are Chinese now. 

China's State Council announced the next artificial intelligence (AI) development plan on July 20, 2016, which stated that China will become "the most advanced AI innovation center in the world" before 2030 and China's core AI industry will see a production value of $148 billion.  "No one in China takes this challenge (AI) more seriously than Robin Li," said Time Asia.  Baidu, whose first-quarter revenue in 2017 was $9Bn, invested nearly $ 1.2Bn in research and development, and most of it was invested in AI, according to the tech giant's earnings report.

2030 is pretty much just a decade away and, if AMZN doesn't want to go the way of the Wells Fargo Wagon or, even worse, Sears! – they'd better not get too complacent about their current position.  What Amazon is doing at the moment is destroying the $5Tn US Retail Sector (1/4 of our economy) by providing a money-losing service their brick-and-mortar competitors can't match and it may all be fun and games to drive the backbone of the US economy out of business but 4.8M Americans directly work in Retail Sales making an average of $11.24/hr so that's $115Bn in wages and wages are about 1/3 of the cost of a retailer so figure $330Bn including rents and such are up for grabs and Amazon has been very good at grabbing it.

So far, it's all good as AMZN is in America and the jobs they are destroying are in America so the American economy doesn't suffer much of a net effect but, now that we've moved retail to the cloud – it's a lot easier to envision a company or companies like BIDU an BABA grabbing market share with superior tech or the simply willingness to sustain greater losses than AMZN can bear and THAT, my friends, is how Amazon has made the entire US Retail Sector, the biggest single component of the US economy – vulnerable to a Chinese takeover!

Zhoumò yúkuài (Have a great weekend), 

- Phil


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  1. So, 2.3% GDP growth, pretty much in line with what we have been getting the past 10 years! Where is all the growth we have been promised with the tax cuts? Can't people just face the facts that 2-2.5% growth is probably normal now for a $17T economy. The numbers we get from China are fake and even so, China adds 10% debt to get to supposedly 6.5% growth. Here in the US, we don't do big anymore, we only add 4% debt (per year) to get 2.5% growth. We losing that leadership as well… Where is all the winning?

  2. A bit of a surprise.

    ~~T-Mobile, Sprint make progress in talks, aim for deal next week – sources.

  3. CAH, Yodi, if you have decided on any next trades for this position, please share, thanks

  4. Good Morning.

  5. Good Morning, All!

    The webinar replay is now available!

  6. ~~ IMAX upgrade details — to Buy at The Benchmark Company; tgt $28  (23.20)

    The Benchmark Company upgrades IMAX to Buy from Hold and sets target price at $28.

  7. Good morning!  

    GDP was better than expected but expectations were for terrible – below 2%.  Still down from 2.9% last Q and this is our "advance" estimate – they usually get revised down.  The deflator is down too @ 2% so no pressure on the Fed not to raise rates and employment costs are hot at 0.8% from 0.6% last Q, so the Fed is more likely to raise on Friday from that report.  We'll see what Consumer Sentiment is at 10 but, if still high (97.8 was last) then it would be silly for the Fed not to raise.

    Big Chart – Technically, we're bullish again but need to see more than one 50 dma taken (/RTY) before it's really convincing.  

    Winning/StJ – We got tired of winning ages ago.  

    I'm hoping for $2.13 on /RB so we can short again.

    TMUS/Albo – They both need this merger.  

    IMAX/Albo – Timed for the Avengers?

    Imax Corp. has announced its next-generation laser projection system and is rolling it out across the U.S. and Europe in AMC and Regal theaters.

    The giant-screen company has signed binding letters of intent to install its most advanced commercial projection system to date in 87 AMC Theatres (NYSE: AMC) and 55 Cineworld locations in the United States and Europe, including the U.K. exhibitor’s Regal Entertainment Groupsubsidiary in the U.S.

    All systems operate with renewed 12-year lease terms and are expected to be installed between now and 2022.

    Imax’s next-generation 4K laser projection system features a new optical engine and suite of proprietary technologies that delivers increased resolution, sharper and brighter images, deeper contrast as well as the widest range of colors available to filmmakers to present more distinct, exotic colors than ever before. The new system also features Imax’s 12-channel sound technology that incorporates new side and overhead channels to deliver greater dynamic range and precision.

    “In addition to the economics of the new laser system remaining attractive and coming with 12-year lease extensions, we believe this powerful new product will over time help ensure that Imax remains the premium cinematic experience of choice among moviegoers, studios, filmmakers and theater partners alike.”

    To date, Imax (NYSE: IMAX) has signed agreements for more than 150 of its new Imax with Laser systems worldwide.

    No one ever considered they can RE-sell systems to the 1,400 theaters they already sold to and then they can sell the old equipment cheaply to other cinemas and that will give them a much bigger film distribution base.

    Ouch, markets running out of gas already!  

    2,670 on /ES is my favorite shorting line (tight stops above) and it's lined up with 24,250, 6,725 and 1,565.  

  8. Phil/T/NY

    Good Friday to you!

    I am in your neck of woods at Exchange Place in Mersey City for a wedding- first time after many years to the east coast!

    I am curious if the T’s latest earnings and the stock drop change your thesis of them being a comapany to buy into at this price?

    I sold some 2020 $30 puts for $2.40 a few weeks ago…can certainly sell some more.

    A good place for lunch in Manhattan? After the ferry across, where does one go for sightseeing, although it’s raining a bit and walking may not be a great option 

  9. MAT – Has been on a nice run.  

  10. So much for shorting, cut back the other way.  

    Dollar dipping is helping.

    Welcome Maya!  I thought T was fine.  They are buying back shares to keep EPS pretty but it's such a cash machine they can certainly afford it, dropping $2.8Bn in the bank after spending $6.1Bn on CapEx:

    And look at phone plans and wireless connection growth – that's what the whole thing is about:

    Cord-cutting doesn't hurt you when you are the wireless provider too.  In fact, their CapEx costs for wireless are significantly less than wired accounts.  

    As to lunch – If you took the ferry from JC I suppose you are near Times Square.  I'd heat to the World Trade Center and hit One Dine on the 101st floor – that combines indoor sightseeing with a meal.  The Marriott at Times Square has a revolving roof restaurant that's pretty good too but the WTC is worth checking out and you can see the memorial too, if you are so inclined.   This is a really fun tour bus trip:

    MAT/Albo – From Hell to Purgatory so far. 

  11. Consumer Sentiment up at 98.8 and that puts the Fed back on the table and the indexes head down again – what a silly market!  



    Happy trading! I am out to see this city

  13. Maya-right by the ferry downtown there is Brookfield Place (mall) which has a bunch of higher end self service food option on the upper floor with seating that offers a great view of the water.  Up the street is Eataly in the Westfield Mall which always gets good reviews.  Walking a couple of blocks up from the ferry to Greenwich St and then up Greenwich St (toward midtown) there are a bunch of good restaurants  and even a Whole Foods.  People in the area tell me Whole Foods has the best sushi, but I don't eat sushi so can't vouch for it.  Geenwich goes into Tribeca which has cobblestone streets and a lot of old buildings.  There is also the memorial downtown as well as Battery Park, Trinity church and the seaport.  

  14. Coffee looking good today!

  15. /RB/Phil – touched your target, did you short?

  16. Great call Phil on RB!

  17. /KC/Malsg – Now we have to wait for the next dip to buy again.

    /RB/Ravi – No, I was on the phone and missed it.  Worked out nicely though – gotta take those quick profits in this market.

    Thanks Lionel.

    I thought people weren't playing as much golf?

    • Callaway GolF (ELY +7.7%) rallies after the company reports 30% sales growth in Q1 and tops EPS estimates. While the acquisition of TravisMathew padded results, underlying demand for Callaway products was also quite strong.
    • "Sales across our entire product line, including the Rogue line of woods and irons as well as the new Chrome Soft golf balls, are off to a strong start and we also benefitted from improved foreign exchange rates and market conditions," says Callaway CEO Chip Brewer.
    • Callalway's EBITDA was up 95% Y/Y during the quarter.
    • Shares of Callaway traded at an all-time high of $18.43 a few minutes ago.
    • Previously: Callaway Golf beats by $0.14, beats on revenue (April 26)
    • Q1 Employment Cost Index: +0.8% Q/Q vs. +0.7% consensus, +0.6% in Q4.
    • Employment Benefits +0.70% vs. +0.50% in Q4.
    • Employment Wages +0.90% vs. +0.50%.
    • Stifel maintains a Buy rating on Amazon (NASDAQ:AMZN) and raises the price target from $1,800 to $2,020 after yesterday’s earnings report.
    • Firm cites the “stellar quarter” with a “strong beat driven by a combination of continued momentum in Prime and the acceleration of higher-margin, faster-growing business segments, including AWS and advertising services.”
    • More action: Deutsche Bank maintains its Buy rating and raises its Amazon target to $1,800.
    • Firm notes that Amazon followed earnings with a “one-two punch” by announcing the Prime membership fee increase.
    • Deutsche says, “Amazon has been our top pick for 2018, and coming out of the quarter, we are incrementally more bullish on the name. We believe it is tough to find a comparable business in the West which has similar scale. “
    • Source: / CNBC
    • Amazon shares are up 3.6% to $1,572.67. 
    • Previously: Amazon +6.4% on Q1 beat with 43% sales boost; AWS +49% (April 26)
    • Previously: to increase U.S. Prime membership fee 20% (updated) (April 26)
    • The Japanese government approved a bill establishing a framework for the casino industry in the nation. The Integrated Resorts Implementation Bill now heads to the Diet for voting. Prime Minister Shinzo Abe reportedly wants the Diet to take up the bill during the current session that runs through June 20.
    • The bill in its current form sets a 30% tax on casino gross gaming revenue and limits locals to three casino visits a week.
    • Yesterday, Fitch Ratings reeled in expectations on the Japanese gaming market. The research firm notes that recent Japanese media reports indicate that there may only be one license in a major metropolitan area, instead of the two or three expected. Fitch now sees the total market size at around $6B, below some estimates that range as high as $12B.
    • Boyd Gaming (NYSE:BYD) is higher in premarket trading after topping Q1 revenue estimates and backing full-year guidance. Positive trends in the Midwest and South segments continue to underpin the company's results.
    • The casino operator generated adjusted EBITDA of $160.5M in Q1, up 3% from a year ago. For the full year, Boyd expects adjusted EBITDA of $600M to $620M.
    • CEO update: "We improved margins throughout our operations, further enhancing our robust free cash flow; reduced debt by an additional $85 million, putting us on the threshold of our long-term leverage target; and returned more than $25 million in capital to shareholders through share repurchases and dividend payments. We also began preparations to expand and diversify our portfolio later this year through the pending acquisitions of five new assets in Missouri, Ohio, Indiana and Pennsylvania. With our increasingly efficient operations, growing free cash flow, solid balance sheet and robust growth pipeline, we are in excellent position to continue delivering strong results for our shareholders."
    • Shares of Boyd are up 2.84% premarket to $34.40 vs. a 52-week trading range of $22.43 to $40.44.

    • Q1 earnings of $3.6B or $1.90 per share vs. $2.7B and $1.41 a year ago. Forex changes boosted this year's result by $129M and hurt last year's by $241M.
    • Upstream earnings of $3.352B more than doubled from last year. Downstream earnings slipped to $728M from $926M.
    • CEO Michael Wirth says upstream volumes are continued to increase in future quarters, noting the Gorgon and Wheatstone LNG projects in Australia, as well as Permian Basin production.
    • Cash flow from operations of $5B up from $3.8B a year ago; excluding working capital effects, $7.1B vs. $4.8B.
    • Capital and exploratory expenses of $4.4B, flat from a year ago.
    • Conference call at 11 ET
    • Previously: Chevron beats by $0.41, misses on revenue (April 27)
    • Previously: Exxon misses despite higher oil prices; shares down 1.7% (April 27)
    • CVX +1.25%


    • Q1 earnings of $4.65B or $1.09 per share vs. $4B and $0.95 a year ago. Capex of $4.9B up 17% Y/Y. Cash flow from operations and asset sales of $10B (asset sales were $1.4B).
    • Oil-equivalent production of 3.9M bpd down 6%, or down 3% after excluding entitlement effects and divestments.
    • 5M shares bought back during Q1 for $425M in order to offset dilution from stock-based compensation. Buybacks will be continued for this purpose, but there are no plans to reduce the float.
    • Conference call at 9:30 ET
    • Previously: Exxon Mobil misses by $0.01, beats on revenue (April 27)
    • XOM -1.7% premarket


    • Sony (NYSE:SNE) is 8.7% lower in U.S. trading after it posted a record operating profit in fiscal-year earningsthat pointed toward a growth turnaround, but forecast lower earnings ahead amid slowing smartphone demand and a stronger yen.
    • Operating profit came to ¥735B (about $6.7B), and net profit to ¥491B, for the fiscal year.
    • Its turnaround has come after emphasizing videogames (PlayStation 4's giant base is a strength, and smartphone games are growing quickly) and smartphone imaging sensors rather than small-margin consumer electronics.
    • It's forecast operating profit of ¥670B this year, down 8.8%, and sees profits at the semiconductor business falling 39% amid a maturing smartphone market.
    • Meanwhile, it expects gaming profits to rise 7% on high-margin online software
    • Earnings call transcript
    • Press release
    • The key to Starbucks (SBUX -1.3%) meeting full-year guidance numbers is boosting afternoon traffic, note analysts in their post-earnings wraps.
    • Starbucks management also seems keenly aware of this based on the multitude of times the afternoon daypart was discussed on the company's conference call.
    • The coffee chain is launching a "focused" campaign aimed at attracting new afternoon customers. The campaign, which starts next month and will extend through August, will highlight the new afternoon beverage lineup.
    • Starbucks COO Rosalind Brewer on the initiative: "We are also looking at our afternoons in a different way. We know that the afternoon customer is looking for refreshment, and they are really interested in cold brew. So the new offering that we'll have in the product line is around cold brew, refreshers, and teas. We'll also be reducing the number of limited time offer, LTOs, that we have by 30% year-over-year. That gives us a chance to simplify the work in the afternoon so that the partners can engage with the customers so you'll get both the experience when you're in the Starbucks cafe."
    • Starbucks earnings call transcript
    • Facebook (NASDAQ:FB) is up 1.7% premarket as Stifel upgrades to Buy, calling the stock "too cheap" in the wake of its data-scandal pullback and earnings that topped expectations.
    • "The reality is Facebook is at a mature stage of users in North America and Europe," says analyst Scott Devitt, noting a slight pullback in North America daily active users in Q4 before resuming Q1 growth. More growth in the West will come from price, and from Instagram and WhatsApp, he says. (h/t Bloomberg)
    • Regulation will always be a headline risk, he says, but there are fewer new surprises ahead.
    • He has a price target of $202, implying 16% upside.
    • Expedia (NASDAQ:EXPEraces 10.44% higher in premarket trading as investors flood back into the travel stock after sentiment going into the report had turned cautious.
    • Analysts are also exuding confidence in Expedia, with KeyBanc lifting its price target to $140 and Bank of America Merrill Lynch hiking its PT to $137.
    • The online travel sector as a whole is getting a jolt from the Expedia report. Booking Holdings (NASDAQ:BKNG) is up 1.53% premarket, TripAdvisor (NASDAQ:TRIP) is up 1.77% and Trivago (NASDAQ:TRVG) is 2.00% higher.
    • Previously: Expedia higher after strong bookings (April 26)
    • Wolfe Research updates on the strong results at UPS (NYSE:UPS) that sent shares up 4.2% yesterday.
    • "While a low tax rate was a $0.05 benefit, weather was a bigger than expected headwind of $0.08, so underlying earnings were better than expected with U.S. package beating our low expectations despite the weather drag. That said, Int’l Package slightly missed our model which isn’t a great read-across for FDX," writes analyst Scott Group.
    • FedEx (NYSE:FDX), which traded flat yesterday after the UPS print, isn't due to post FQ4 results until June.
    • Both shippers are down for the year, with UPS -4.93% YTD and FDX -1.05%.
    • Tesla (NASDAQ:TSLA) shareholders will vote at a shareholder meeting scheduled for June 5 on a resolution that only an independent director can serve as the chairman of the board.
    • The measure was proposed by a single shareholder, who points to the "prevailing practice" in the international market for a company to have an independent chairman.
    • The Tesla board opposes the resolution and issued a recommendation that shareholders vot against it.
    • Via Tesla proxy filing: "The Board believes that the Company’s success to date would not have been possible if the Board was led by another director lacking Elon Musk’s day-to-day exposure to the Company’s business. In light of the significant future opportunities for growth and the careful execution needed in order for the Company to achieve it, the Board believes that the Company is still best served by Mr. Musk continuing to serve as Chairman."
    • Shares of Tesla are down 0.64% premarket to $283.65.
    • Microsoft (NASDAQ:MSFT) provides upside Q4 guidance during the earnings call. Q4 revenue expected from $28.8B to $29.5B (consensus: $28.08B).
    • Productivity and Business Processes revenue expected between $9.55B and $9.75B, Intelligent Cloud between $8.95B and $9.15B, and Personal Computing from $10.3B to $10.6B. 
    • Earnings call transcript
    • Analyst action: JPMorgan upgrades Microsoft from Neutral to Overweight and lifts the price target from $94 to $110, a nearly 17% upside to yesterday’s close. 
    • Microsoft shares are up 3.9% premarket to $97.93.  
    • Previously: Microsoft beats by $0.10, beats on revenue (April 26)
    • Previously: Microsoft beats Q3 estimates; reports Azure, Office 365 strength (April 26)

    Microsoft's Earnings First Look: It Was That Good 

    • The European Medicines Agency's advisory group CHMP adopts a positive opinionrecommending approval for Gilead Sciences' (NASDAQ:GILD) Biktarvy (bictegravir 50 mg/emtricitabine 200 mg/tenofovir alafenamide 25 mg; BIC/FTC/TAF) for the once-daily treatment of adults with chronic HIV-1 infection without present or past evidence of viral resistance to the integrase class, emtricitabine or tenofovir.
    • A final decision from the European Commission usually takes ~60 days.
    • Biktarvy was approved in the U.S. in February.



  18. quiet board today..

    will you take me out of timeout please?

  19. ;-/ thank you

  20. Just a note. ENB pays over 7% div and has a payment coming up May 14 of .52. Earnings are May 10th. It is at a low I haven't seen before of $29.00. There was a explosion and fire at the big refinery In Superior Wisc yesterday. It was an asphalt tank and caused basically the whole town to be evacuated including university of Wi, a high school and elementary school all within a 1/2 mile radius. Doing a short on them. The name of the owners change every other year it seems. Now it is Husky, was Calumet, Marathon. Could have been a lot worse as this is a huge refinery with tanker cars and dozens of storage tanks for gasoline etc. Basically it is the pipeline from Canada to here, but how it is set up is a mystery.

  21. Welcome back, Jabob.  I missed you.

  22. FU ALBO!!!!!

  23. What time out?

    Trump has Merkel over at the WH and, of course, instead of talking about the US and Germany, he says "there's a report out today and even the Chancellor knows there was NO collusion between me and Russia, NO COLLUSION…"  He's f'ing insane!  

    "We're working on trade deals, including NATO"  

    "It's a witch hunt.  She (Merkel) probably can't believe it, who can?"  

    "The Clinton campaign maybe DID contribute to Russia, maybe somebody should look into that, who knows, let's drop the whole thing…"  

    He's saying this crap sitting next to one of the World's most powerful leaders who did NOT come to speak to him about Russian collusion (which there was NONE of). 

    Now he's trying to act like he's in charge of the N Korea talks.

    If the Nasdaq can't get green today – what will it take?

    Somebody asked a question he didn't like and Sanders started screaming "Everybody out – let's go!" at the press.

    ENB/Pirate – This is why it's so dangerous for the EPA to slack off on their job.  These guys want to build pipelines and refineries in everyone's neighborhood.  ENB already down from $42 last summer but yes, big liability in this one, even in Walker's Wisconsin, where anything goes. 

    These guys have the good, I get pissed when a lawyer or realtor doesn't use them:

    • DocuSign (DOCU) shares pop over 30% on the first day of trading.
    • The company priced the offering at $29/share last night and opened at $38.
    • The IPO sold 21.7M shares and the company now has 152.1M outstanding, which makes for a $629.3M IPO and a $4.41B implied valuation.  
    • Previously: DocuSign prices IPO above range at $29/share (April 26)

    Not sure if they are really worth $4Bn but the product is a game-changer.  

  24. ;-)


    Go M!!!

  25. 6,666 just failed again.

  26. BBBY – Putting in a bottom ?

  27. I wouldn't count on anything having a bottom with the Nas now down 100 after having fired all the big earnings guns – other than AAPL.  If AAPL misses, the whole market is going to go and rethink things.

    Image result for i'm going to rethink my life

  28. Phil- And Walker was there with the mayors of Sup and Duluth with the Epa and Dnr representatives. It's always after the fact that anyone gets concerned. BUT if the whole thing had started a chain reaction with those massive holding tanks the whole town would have been decimated.

  29. I was going to short /NQ this AM at 6750 with tight stops but I thought no way they won’t blast higher so I decided not to play…

  30. mikezuela

    CAH sorry came in late today. But rolled 27 Apr 64 call to Jun 8 66 call for a credit of .89 cents

    Sold the Jan 8 62.5 put for 1.40 So the new Jun armchair is 3.82. So the combined return run at about 4.4% for 42 days.

  31. PSW/OOP

    anyone has link to the latest OOP adjustments…appreciate your help.

    thanks and regards

  32. Decimated/Pirate – And then Walker would have cried to the Government for a bail out.  I hate all of those people!  

    /NQ/Japar – I'm surprised it fell apart so quickly.  Coming back a bit now. 

    OOP/Pat - Submitted on 2018/04/19 at 11:29 am

    • U.S. rig count rose by another 8 to 1,021, according to the weekly Baker Hughes survey.
    • Oil rigs made up five of the new total, going to 825 from 820; gas rigs rose by another 3, to 195. One rig is still classified as miscellaneous.
    • June WTI crude is ticking up slightly, +0.1% to $68.23.
    • Eurozone headline inflation expectation revised 0.1% downward to 1.6% in 2019 and 1.7% in 2020.
    • The ECB targets inflation at just below 2% and the survey projected price growth rising back to 1.9% by 2022, in line with an earlier forecast.
    • While acknowledging the slowdown, Draghi on Thursday said that growth remained solid and the survey confirmed his confidence as projections for 2018 and 2019 were both lifted by 0.1 percentage point to 2.4 percent and 2.0 percent.
    • Intel (NASDAQ:INTC) shares drop down 0.2%, erasing gains of over 5% after yesterday’s earnings report.
    • The company announced that mass production of its 10nm Cannon Lake chips would again be delayed. 
    • Low volume shipments already started but volume production now shifts to 2019 instead of the end of this year.   
    • TSMC (TSM) already has its 10nm chips available, and Samsung is on its second-gen 10nm CPUs. Samsung (OTC:SSNNFOTC:SSNLF) could have 8nm chips in production by the time Cannon Lake hits volume.    
    • Previously: Intel +8.2% on Q1 beat, upside and raised guidance, and 24% Data Center growth (April 26)
    • U.S. Steel (X -15.2%) is at session lows after disappointing results and guidance last night.
    • Morgan Stanley's Piyush Sood is a bull on the stock, but takes note of the lack of clarity underlying the company's price assumptions. Also a bull, Longbow's Chris Olin says the Street will likely focus on the cautious outlook, but reminds even that translates into H2 EBITDA run-rate near $2.2B.
    • Neutral on the name, BofA's Timna Tanners says Q2's operational challenges are likely to distract from the eventual benefit from tariffs.
    • Source: Bloomberg
    • Previously: Guidance caution at U.S. Steel; shares down 9% after hours (April 26)
    • AK Steel (AKS -5.1%), Nucor (NUE -2.4%), Arcelor Mittal (MT -1.3%), Steel Dynamics (STLD-3.8%)
    • The SLX -2.3%
    • The REITs have underperformed the S&P 500 by more than 15 percentage points over the last 12 months, with the sector now trading at a 16.4% discount to net asset value – one of the widest margins ever, according to Green Street Advisors.
    • Private real estate funds, however, are seeing a gusher of money – $71B into funds that closed last year, according to Preqin.
    • Private funds' advantage? Absurd as it sounds, their prices aren't aren't listed in the papers (or the online equivalent) every day, perhaps giving comfort to investors who don't like to see down arrows on investments they own.
    • Investors might do well to remember, writes Ken Brown at Heard on the Street, that risk isn't volatility, but rather the chance of a permanent loss of capital. It might be a better idea to grab the publicly traded REITs and wait for those discounts to narrow.

  33. Pat – The  OOP review from last Thursday.  I didn't see it under the Virtual Portfolios tab.  


  34. I'm tempted to sell some OTM calls on CMG.

  35. Maya, If you  are by WTC, try the North End Grill:They have: $1 oysters available all day every day, get a 1/2 bottle of champagne & duck fat fries. You will feel like you are on vacation..

  36. CMG/Albo – Up another $8 today.  No logical tops to stocks anymore – they just go up and up like BitCoins.

    Trickling into the close now – just under flat for the week:

  37. For some reason, Trump has decided to lie about the US Embassy again – something that had been completely debunked months ago but now he's showing off for Merkel with the global press so why not spend 5 minutes telling a fairy tale?

    I think what bothers me is the utter contempt in which he holds the voters.  He simply lies and lies and lies because he knows that (as Hitler said) if you repeat a lie often enough with conviction, enough people will believe you to let you get away with it.  

    As it turns out, the sociologist Seymour Lipset predicted that this kind of disconnect could happen, triggered by what he called a “crisis of legitimacy.” The legitimacy of democracy might be undermined, Lipset envisioned, if a large part of society came to feel abandoned by the political establishment. Or, if a group felt a loss of power as leaders shifted their favor to new social groups. The white working class today — Trump’s base — fits both descriptions, as policies furthering globalization and offshoring of jobs have robbed them of economic opportunity, and immigration and demographic trends have visibly altered American society.


    Lipset suggested that a crisis of legitimacy would have psychological consequences — and set the stage for a lying demagogue to be perceived by many people as bravely speaking suppressed truths. In normal conditions, voters shun any candidate who obviously lies and abuses widely shared social norms. But in a crisis, Lipset argued, disenfranchised voters may see such violations as a symbolic protest, and a deliberate poke in the eye to the elites they have come to despise. 

    This would explain how many Trump supporters, ordinary people, could actually cheer when he bragged about grabbing women’s genitals, or mocked Senator John McCain for having been shot down in the Vietnam War. This is not to say that Trump supporters approved of his behavior. Rather, they delighted in the profound irritation of the press and the political establishment.

  38. $21.50 to see the Avengers in IMAX – Someone is making money!  

  39. Almost sold out too – only scattered seats at 7pm.

  40. Thanks for sharing Yodi

  41. We don't have DIS in the LTP, which is now up another $10,000 today at $594,588.  Let's sell 10 2020 $95 puts for $8 ($8,000) and buy 15 2020 $90 ($17.80)/115 ($6) bull call spreads for $11.80 ($17,700) and that puts us in for net $9,700 on the $37,500 spread and we'll be selling 5 short calls for maybe $2 ($1,000 - the June $100s are $3) each Q to recoup much of that net $9,700.  

    We have 5 short May $105 calls in the Butterfly Portfolio that we sold for $3.20.  Let's buy them back for 0.63 as it's doubtful we gain more than 0.30 on earnings  (5/8) if they go lower but, if DIS flies higher – we could lose a lot more. 

  42. Know Hope:

  43. By the way, interesting that Melania seems to be happier and more relaxed when she is not around Trump!

  44. Did you see the way he tries to grope her hands?  Anyone would be uncomfortable…  Trump's wife and kid seem more like props to me.  

    Yawn on this market today – all week…  

    Portfolios are up though, so at least we are playing it right.  Hedge Fund up too but still almost all cash.

    Well, have a good weekend folks! 

    - Phil 

  45. Less and less participation in the "rally":

    This is why Paul Ryan had the House Chaplain fired:

    This Fox and Friends interview Trump did is amazing.  They went from being thrilled to have him on to cutting him off at the end as he rambled on and on.  Once he got off their script, things went crazy.   Amazing stuff!  

    I don't know what the lie count on that thing was but it was MASSIVE!  

    Is everybody believing what is going on. James Comey can’t define what a leak is. He illegally leaked CLASSIFIED INFORMATION but doesn’t understand what he did or how serious it is. He lied all over the place to cover it up. He’s either very sick or very dumb. Remember sailor!

  46. Rally/Phil- I too was expecting some kind of rally after this week's earnings. I was contemplating on today's close… Does it shows that even with good earnings, money are still going to flow out of the market? the bull market is dead or it's just people are divided apart thinking of the "correction" had already happened or still anticipating it. 

    Or I am reading too much into a low volume Friday? :)

  47. NY/Seers/Randers

    Thank you very much for your recommendations

    I did actually visit the Brookfield Place, Westfield as well as the Memorial and Times Square, of course.

    Great Vibes and energy in this city!

  48. Maya-glad you enjoyed.  Much easier when you don't have to get to the office or meetings!

  49. E.P.A. Readies Plan to Weaken Rules That Require Cars to Be Cleaner

  50. US won’t restore Yellowstone grizzly bear protections

  51. Mitch McConnell has just been backed into a no-win corner

  52. Good morning!

    Futures up, of course as it's the last day of the month but still 2,680 on /ES and now it's May and we started Feb a lot higher than this:

    So the range has narrowed a bit (the charts self-adjust to the range) but we are in the same place we were last Q at the same time. 

    So, if we're in a range-bound market – it would be very silly to buy when we're high in the range but we also have to get more into the habit of selling at the top of the range because, like our Futures trading, there's a lot more money to be made playing the swings over and over than there is holding on and playing for breakouts that never come.

    The Russell has fallen the least overall but that might not make them the best short since it is a different index with over 80% of their business coming from the strong-dollar, low unemployment, consumer confident USA.  Unless those things change, those companies should do OK.

    Japan and Europe are no better off than we are and we all fell apart right after January's window-dressing ended so beware the end of April!

    Brent rejected at $75 but up from $65 means a weak retrace is $73 and a strong retrace is $71.  WTIC (/CL) was $60 to $69 but let's call it $67 and $65 for the retraces.  

    Heating season is over, long live Pool season and Air Conditioning season! 

    While we are looking at the long-term:


    Coffee still super-cheap:

    $1,350 is a tough line for gold (/YG

    Silver is still a comparative bargain

    Another big earnings week but, after this one, 2/3 of the S&P will have reported.

    Should be a more interesting week than last week with the Fed on Wednesday and Non-Farm Payroll on Friday followed by 2 Fed speeches, so they must be worried they'll have to spin it a bit.

    Told you so:

    ‘Avengers: Infinity War’ Sets Box-Office Records

    DIS popping $100 pre-market, IMAX should get a pop too.