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Thursday Follow Trough – Well-Dressed Windows Ahead of the Fed Minutes

Wow, what a comeback!  

Fed Chair Jay Powell said some words and the market jumped up over 2%, adding $2Tn to the global market cap in a matter of minutes.  He should say those words every day, right?  Actually, he didn't have to say anything as the Dow (/YM) began rising from 24,900 (already up from 24,800 at 5am) at 11am to 24,950 at noon – before the text of Powell's speech had even been released and, by 12:05, we were already up around 25,200 and we continued on to a high of 25,370 at the close, up 600 points for the day (2.4%).

The market's exuberance hinged essentially on a single sentence from Powell's speech:

"Interest rates are still low by historical standards, and they remain just below the broad range of estimates of the level that would be neutral for the economy--that is, neither speeding up nor slowing down growth. "

Rather than focusing on "still low by historical standards" the media chose to focus on the much vaguer "just below the broad range of estimates" which shows a complete lack of understanding of what a range is – whether intentional or otherwise.  Fortunately, we know exactly what range Powell is talking about as it's the Fed's famous "Dot Plot" that shows exactly what the range for rate expections is among the 12 Fed Governors.  

As you can see from the chart of Sept 26th, the RANGE of the expectations is from 2.25%-2.5% at the end of 2018 (we're at 2.125% now) but the RANGE next year is between 2.25% and 3.75% and, by 2020 – there is only one outlying dot that shows 2.25% while the middle of the range is about 3.25% – that's 4 quarter-point hikes from now.

Also, not at all covered by the media – Powell also had slides (as well as 14 other pages of text) and he was also concerned about the massive increase in Corporate Debt, now well above the economic collapse levels of 2009 and matching the post-crash levels of 2002.  The difference was, in 2002 and 2009 the Fed was able to LOWER rates significantly to reduce the stress of outstanding Corporate Debt but, without a good deal of tightening now, the next time corporations need a rate bailout – the Fed's hands will be tied and defaults will skyrocket and the economy will collapse unless the Government steps in with a cash bailout.  How is that healthy?

You can plant a lawn in Las Vegas and, if you water it every day, it will do fine and look healthy and grow strong but, like low interest rates – it's all artificial and, no matter how "healthy" the grass looks in these artificial conditions, as soon as you stop watering it the lawn will turn brown and die because it's entire existence was based on ARTIFICIAL STIMULUS that couldn't be maintained indefinitely.  

Corporate America is running on low rates and tax cuts – take either of those things away and the market drops 10-20% from here.  Since, for some reason, maintaining a record-high market is the only thing that matters in America, we're going to keep giving these "healthy" corporations low rates and tax cuts – even if it's to the detriment of Infrastructure Spending, Social Welfare or even those Entitlements that the citizens are ENTITLED to because they had 6.5% of their pay placed in a Government Savings Account for THEIR ENTIRE LIVES and another 6.5% was contributed by your employer to match it.  It's YOUR MONEY – you are ENTITLED to it – THAT is why they call it an entitlement!  

Image result for entitlement spending vs savingsEntitlement spending is not the problem, the mismangement of the collected entitlement money was and is the problem but it's currently the scapegoat for the massive deficits that are simply caused by a REVENUE problem.  As you can see from the chart on the right, Interest on Debt is our fastest-growing Government Expense while Entitlements, INCLUDING OBAMACARE, currently take up 12% of Government Spending and are projected to increase to 15% by 2037.

Is this hopeless?  Is it unfixable?  Or perhaps we could just raise taxes by 3% over the next 20 years to cover it?  No, instead the plan is to gut benefits and, very simply, not pay you back the money you are ENTITLED to so that the Top 1% people and Corporations can continue to enjoy their tax cuts.  You are, very simply, being robbed and shame on you if you don't realize it.

  • I'm 55 and I started working in a deli when I was 13 but let's say I got my first job out of college at 22 and I only made $15,000 a year for my first 10 years.  That's $150,000 and 12% of $150,000 is $18,000 that the Government collected.  Even at just 4% interest, at the end of 1995 the Government should have had $25,000 in my account and that $25,000 growing for another 30 years becomes $81,084 (calculator here).
  • In 1995, I'm earning let's say $30,000 a year and the government is pulling $3,600 a year so $36,000 for the decade and 4% interest is $50,279 by 2005 and banking that another 20 years until my retirement becomes $110,167.
  • In 2005, I'm up to $40,000 a year and the government is taking $4,800 a year so $48,000 that decade at 4% interest is $67,039 by 2015 and 10 years from now that's $99,234 and I'll make and they will take another $48,000 assuming I've reached the peak of my carrer so another $67,039 by the end of 2025, when I'll be 62.

So that's $325,329 of MY MONEY that should be in MY retirement account after 40 years of work at a below-average salary.  That works out to 8 years of my current salary – seems like a lot of money and 4% interest is very low and the money we cacluated was very low and STILL it's enough to cover.  Keep in mind that, until recently, not that many people lived until 73 so hundreds of millions of people never got their full benefits and the Government kept and squandered that money too!  

The GOP has been engaged in a 45-year plot to undermine your rights to your own money beginning in 1974, when the Nixon administration first started using the term "Entitlements" to describe your eventual payouts from a forced Government Savings Account that was collected from your own paycheck:

The first official use of “entitlements” in its current sense came during the Nixon Administration, when the 1974 budget act defined it as “payments to persons or governments who meet the requirements established by laws.” But it didn’t rise from the wonky mire until 1982, when, as John H. Makin and Norman J. Ornstein note, in their 1994 book, “Debt and Taxes,” President Reagan, who had always referred to government programs for the old, the sick, and the poor as the “Social Security net,” renamed them “entitlements,” in a speech to a Jaycee convention. The business press quickly followed suit. “Later in the year, other magazines also used the term,” Makin and Ornstein write. “Most of the publications put the word in quotes the first time it was used, indicating its novelty, but not thereafter.”

Thereafter is where we’ve been ever since. “Entitlements” went from nowhere to everywhere in record time. The Washington Post mentioned “entitlements” or “entitlement programs” in the same article as “Social Security” just five times in 1979. In 1982 it happened a hundred and eighteen times. During the nineteen-nineties, the number topped eight hundred. If the current rate holds steady for the rest of this decade, the Post will have racked up seventeen hundred by the end of 2019.

And the use of the word "Entitlement" has been expanded to include food stamps and wellfare and now Obmacare, which is merely a ploy by the Republicans to vilify your hard-earned savings and muddy the waters as if they were all part of some charity program.  That's the kind of brain-washing techniques you need to use when you have spend 50 years robbing people and now you need them to go to debtor's prison to pay for your crimes.  

You should be ashamed of yourself!  

 


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  1. Good Morning.




  2. Good Morning, All!

    The webinar replay is now available!

    https://youtu.be/lLFQ_wPCxbw


  3. Phil I thank you for the commence on Pferdefuß of my early morning write.
    Yes these are my intentions on the ABX BCS. I do hold records of my different plays and in on port I have the ABX since Feb 2012 and show a loss in trading of 9k. In the second port I started Jan 2017 and show a miserable credit of 536$.
    So rolling and adjusting has been done all the time.
    However it is the intention of my discussions to draw some more members in to the conversation and try to get some more interest in what we actually doing. I wanted to show and compare some of my trading methods.
    But mostly to say you are the only one giving some constructive and fundamental comments.
    Especially I like to call on new members to participate and if you have questions we always find someone on this board to answer. Again thank you Phil.


  4. Good morning! 

    Well, we're certainly making progress on those W patterns but no one has broken over year and those falling 50 dmas mean we still certainly have a good chance of failing spectacularly.  It's all up to our great President Trump to skillfully negotiate a trade settlement with China over dinner on Saturday – what could go wrong?

    More: Cohen had discussion about the project as late as August 2017. Cohen had previously said that the deal was stopped in January 2016.

    “Cohen’s earlier plea deal with federal prosecutors in the Southern District of New York implicated President Trump in campaign finance felonies. Since then, Cohen has spent more than 70 hours in interviews with Mueller's team.”

    “I participated in this conduct, which on my part took place in Manhattan, for the principal purpose of influencing the election,” Mr. Cohen said in court in August when he entered his plea.

    The move comes just two weeks before Mr. Cohen, 52, is scheduled to be sentenced for his earlier guilty plea. That case, which also included bank and tax crimes, was brought by federal prosecutors in Manhattan.

    Oops!  

     

    Did you ever see an investigation more in search of a crime? At the same time Mueller and the Angry Democrats aren’t even looking at the atrocious, and perhaps subversive, crimes that were committed by Crooked Hillary Clinton and the Democrats. A total disgrace!

     

    When will this illegal Joseph McCarthy style Witch Hunt, one that has shattered so many innocent lives, ever end-or will it just go on forever? After wasting more than $40,000,000 (is that possible?), it has proven only one thing-there was NO Collusion with Russia. So Ridiculous!

    Thanks Yodi, I really appreciate the effort.  


  5. Good morning. Watched Chris Kimble's presentation on metals the other day. Are we looking at a potential breakout in gold and silver prices in the near term? If so, what trades would be best to take advantage? ABX and WPM? Are these trades still good for new entry? TIA


  6. knowledge economy dynamics at work


  7. Yes to ABX and WPM.  If the Fed does pause in raising rates, the Dollar will weaken and likely inflation and metals will rise.  

    FCX is another way to diversify into gold as they get about 13% of their profits from gold but 80% is still copper and they popped 6% yesterday, back to $12 from $10.50 last week but that's still only $17.5Bn in market cap while they've already dropped $2Bn to the bottom line in Q1-Q3 this year and next year is projected down due to a planned overhaul of their Grasberg operations as well as lingering issues in Indonesia that should be resolved eventually..

    Year End 31st Dec 2012 2013 2014 2015 2016 2017 TTM 2018E 2019E CAGR / Avg
    Revenue $m 18,010 20,921 20,001 14,607 14,830 16,403 19,985 18,774 14,989 -1.9%
    Operating Profit $m 5,646 5,316 -225 -13,512 -2,766 3,654 5,927     -8.3%
    Net Profit $m 3,041 2,658 -1,308 -12,236 -4,154 1,817 3,158 2,423 1,152 -9.8%
    EPS Reported $ 3.19 2.64 -1.37 -11.3 -2.96 0.93 1.89     -21.8%
    EPS Normalised $ 3.27 2.75 1.55 -3.45 -1.16 0.89 1.82 1.64 0.87 -22.8%
    EPS Growth % -32.2 -16.0 -43.6       +150.8 +83.8 -47.0  
    PE Ratio x           13.4 6.57 7.28 13.7  
    PEG x           0.16 0.078 n/a 0.30
    Profitability

    Certainly they have had no help from copper pricing either recently:

    FCX usually bottoms out around $9 and tops out at $20 so let's add the following to the OOP:

    • Sell 15 FCX 2021 $12 puts for $2.80 ($4,200) 
    • Buy 25 FCX 2021 $10 calls for $4 ($10,000) 
    • Sell 20 FCX 2021 $17 calls for $1.50 ($3,000) 
    • Sell 10 FCX Jan $12 calls for 0.70 ($700) 

    So we're in the $17,500 spread for net $2,100 but we're uncovered on 5 of our longs so very hard to imagine we'll get in trouble selling 10 short calls for $700 and we have 12 periods like that to sell so $8,400 of premium sales before we even worry about whether we do well on the spread or not and the worst-case is we're assigned 1,500 shares at $12 ($18,000) so our net should be far below $10 even if assigned down the road and it's still not a full allocation block.

    For the LTP, this is all too much work so let's just sell 20 of the 2021 $15 puts for $5 ($10,000) and see what happens.  


  8. biodiesel   Do you think Fidelity and Bakkt entering the crypto business will make a difference and do you think we have seen a bottom in bitcoin?


  9. Trump says Cohen is lying about lying.   What a deep game Cohen must be playing…


  10. US China hawk Peter Navarro back on guest list for Donald Trump and Xi Jinping’s trade war dinner

     

    Navarro, the controversial White House trade adviser, is now expected to attend crucial meeting, details of which remain shrouded in secrecy

    A China hawk for many decades, Navarro has previously been of concern to the Chinese government

     

     

     


  11. Cohen is saying that Trump is lying about him lying about lying!


  12. Cohen is cowering knowing Putin"s assasination squad is in the wings. Nothing like a little radiation poisoning to handle problems. The same with Manafort-safer in jail for 20 years?? I think they are all seeing what is down the road when Dumpy is nailed. 20 indictments already. Yeh it doesn't take a genius!!!


  13. Anyone know what the current ABX and WPM spreads are? How do we access the most current portfolio reviews? I see September reviews in the Virtual Portfolios.


  14. Did anyone follow the world chess championships? 

    I can play a game on chess24 now and again if anyone is on there.



  15. US consumer spending up strong 0.6 percent in October



  16. U.S. New Home Market Continues Deceleration



  17. Phil – thought on MIC?


  18. Trump working on trade deal – this I think this will happen 

    https://www.wsj.com/articles/u-s-china-exploring-deal-to-ease-trade-tensions-1543508589

    Such a deal would follow the model of partial agreements the U.S. has cut in recent months with the European Union and Japan, U.S. officials said. In those deals, the U.S. agreed not to levy more tariffs—in those cases, tariffs on automobiles—while the two sides negotiated over specific areas. With Japan, for example, Tokyo agreed that any deal would increase automobile production and jobs in the U.S, while Washington agreed not to press Tokyo for more concessions on agriculture than Japan had previously allowed free-trade partners.


  19. more on the above

    It isn’t clear what specifics the U.S. is asking for—or what Beijing is willing to entertain. One offer, according to Chinese officials: in return for the suspension of U.S. tariffs, Beijing would agree to lift restrictions on China’s purchases of U.S. farm and energy products.


  20. Navaro/Albo – Maybe it's one of those meetings where Navaro goes in but never comes out.  Trump already showed he's willing to look the other way on those things…

    Spreads/Soma - Go to the Portfolio Review tab at the top of the page.

    Chess/BDC – I play Clash Royale now, haven't played chess in years.  

    MIC/Soma – They are a little ill-defined for my tastes but a very solid company though way overpriced at $3.5Bn ($40.80) as the $456M they dropped to the bottom line last year was a fluke from a $234M tax credit so call it $200M less taxes on $200M so $160M, which is the same as they usually do and that's what they are on track for in 2018 (barely) .  

    Year End 31st Dec 2012 2013 2014 2015 2016 2017 TTM 2018E 2019E CAGR / Avg
    Revenue $m 1,034 1,041 1,351 1,639 1,652 1,815 1,924 1,906 1,744 +11.9%
    Operating Profit $m 29.5 43.2 1,064 -57.2 321.1 321 312.9     +61.2%
    Net Profit $m 13.3 31.3 1,042 -108.5 156.4 451.2 486 152.1 221.8 +102.3%
    EPS Reported $ 0.29 0.61 16.0 -1.39 1.90 1.53 1.90     +39.8%
    EPS Normalised $ 0.26 0.71 5.77 -1.39 1.90 1.53 1.93 2.04 2.39 +42.4%
    EPS Growth % -57.5 +172.6 +712.3     -19.8 -6.6 +33.7 +16.9  
    PE Ratio x           26.4 20.8 19.7 16.9  
    PEG x           0.78 0.62 1.17 2.12
    Profitability

    You have to be very suspicious when you see earnings pop without revenues popping – doesn't take long to see that it was a one-time event so $40 is about the right price for them, it's the people who were paying $45 who were wrong and the people playing $65 last year were simply delusional.

    They do, however, pay a pretty consistent $1 quarterly dividend and they shouldn't go below $30 so, if you want that sort of play, you could buy the stock for $40.80 and sell the 2021 $37.50 calls for $5.40 and sell the 2021 $30 puts for $2.50 and that net's you in for $32.90/31.45 so your worst-case scenario is owning 2x at net $31.45 (20% off the current price) and, over $37.50 (10% lower) you get called away with a $4.60 profit (14%) plus whatever dividends you collect add 3% per quarter.

    China/Batman – It will be very hard for Trump to make a deal that isn't embarrassing and doesn't piss off some section of his base.  Also, any trade deal that halts tariffs adds $50-100Bn to the deficit, right when the Dems take over the branch of Congress that has to approve the budgets.  Not many winning moves ahead for Trump, at this point, he's stuck playing defense and hoping his opponents make a mistake or he'll just keep getting boxed in on multiple fronts.  

    Image result for trump checkers xi chess


  21. interesting take – I think trump will do just about anything to get reelected and to keep markets up getting repeal on agriculture tariffs and propping the stock market are win wins for him.  This article looks at the upside from fed and tariffs.

    Opinion: These 2 shocks will jolt stocks higher — and 15 smart ways to prepare for that move

    By Michael Brush

    https://www.marketwatch.com/story/these-2-shocks-will-jolt-stocks-higher-and-15-smart-ways-to-prepare-for-that-move-2018-11-28?mod=cx_picks&cx_navSource=cx_picks&cx_tag=mw&cx_artPos=7#cxrecs_s


  22. stockbern – entering / yes I do think it makes a difference as adoption progress marches forward, regardless of week to week chaotic price swings (vis-a-vis internet bubble crash of 2000-2001).

    I don't think we've seen a crypto bottom. I think the overall market cap could go under $100B, maybe to $60B. From there I think you've got a nice long while, like we did back in the Sept 2015 low's, 20-100X over 3-5+ years. There's no rush. Like all investing, patient accumulation with the always-there-giant-caveat that crypto can all go crash to 0 and blow away in the wind (less likely with every passing year, but still worth mentioning).


  23. Well, they are pushing things back to green but not very impressive for window-dressing.  

    We'll see what happens when the Fed Minutes come out at 2.


  24. Have traded /NQ from the long side a couple of times today..

    Currently back in long.


  25. Closed out the trade for basically scratch.

    Been watching AAPL, MSFT, amd AMZN for tells, but they can't seem to gain any traction.


  26. Maybe we can have virtual wars as well:

    https://www.theverge.com/2018/11/28/18116939/microsoft-army-hololens-480-million-contract-magic-leap

    The US Army has awarded Microsoft a $480 million contract to supply the military branch with as many as 100,000 HoloLens augmented reality headsets for training and combat purposes, according to Bloomberg.

    Microsoft beat out other leading augmented reality headset companies, like Magic Leap, which announced that it would be joining the bidding process back in September. Microsoft has had the upper hand, focusing primarily on enterprise markets, unlike Magic Leap, which has focused on the barely-existent consumer market. Microsoft has also previously sold some headsets to the military. But this contract would go well beyond its earlier collaboration, and could greatly expand the reach of the headset.

    On the same but different topic (?), Microsoft is completely unrecognizable from the days of Ballmer!


  27. MSFT Microsoft Corporation monthly Stock Chart


  28. On a very different topic, not much of a follow through from yesterday. Looks like Trump needs to threaten the Fed again! 

    Although he just said that people who flip are weak so maybe Powell doesn't want to "flip" dovish!

    And BTW, how crazy is that for him to make such a statement  – AGs all over the country are cringing when POTUS tells criminals not to cooperate with the government to indict bigger criminals! That's obstruction of justice on a grand scale there!


  29. biodieselchris: "I can play a game on chess24 now and again if anyone is on there."

    What is that?


  30. Today I wish to draw your attention to two Canadian Bank stocks TD and CM .
    I have CM already from Jan 2013 in my port and show a combined gain of some 70K.
    This morning I did discuss the ups and downs of stock and BCS.
    For me, today is the time I want to buy CM stock it dropped 3.5%  as they missed on earnings forecast.
    I have given an order to sell the Dec 21 85 put for 1.90, which discounts the stock to 83.10.
    Contrary TD is new land for me and I will start with buying the stock and selling the Dec 21 55 straddle for 2.00
    CM has a yield of 6.4% and TD a yield of 4.8%.
    Both stock will bring a comfortable combined return in my armchair trades of more than 3% per month.


  31. Well, the Fed Minutes aren't changing anything – just drifting along essentially flat for the day but it's better than giving up yesterday's gains.  VIX is dropping fast. 

    As Aldo says, "no traction" 

    MSFT/StJ – As they should be, the technology changes and they have to change with it.   Good point on Obstructor in Chief.

    CM/Yodi – I really like that one and now they are cheap again.  TD also a good bank.


  32. WASHINGTON—Federal Reserve officials signaled plans to raise interest rate next month, but they appeared more tentative about maintaining a pace of quarterly increases after that, minutes of the central bank’s recent policy meeting show. 

     

     

    Almost all participants at the Nov. 7-8 meeting believed another rate increase “was likely to be warranted fairly soon if incoming information on the labor market and inflation was in line with or stronger than their current expectations,” the minutes said. The next Fed meeting is Dec. 18-19.

     

    Fed minutes release. Looks like they are definitely in a transition type mode – as they discuss 

    https://www.wsj.com/articles/fed-minutes-signal-december-rate-rise-likely-but-less-certain-path-next-year-1543518153

    Fed Minutes Signal December Rate Rise Likely, But Less Certain Path Next Year

    FOMC Minutes: A Few Officials Expressed Uncertainty About Timing of Further Rate Increases


  33. As I am writing could only sell the Dec 85 put on CM for 1.70 Clolsed the stock and sold the 55 straddle on TD 55.06 and 1,95


  34. Comment content omitted because it is too long.


    • Canadian Imperial Bank of Commerce (NYSE:CMQ4 adjusted EPS of C$3.00 misses consensus of C$3.04; slips from C$3.08 in Q3 and compares with C$2.81 in the year-ago quarter.
    • Results reflect net interest margin expansion in personal and small business banking and double-digit volume growth in commercial banking.
    • Q4 net interest income C$2.54B vs. C$2.58B in Q3 and C$2.46B a year ago; NIM of 1.67% vs. 1.69% in Q3 and 1.72% in Q4 2017.
    • Q4 provision for credit losses C$264M vs. C$241M in Q3 and C$229M a year ago.
    • Q4 Canadian personal and small business banking adjusted net income of C$668M vs. C$639M in Q3 and C$551M a year ago.
    • Q4 Canadian commercial banking and wealth management adjusted net income C$333M vs. C$350M in Q3 and C$287M a year ago.
    • Q4 U.S. commercial banking and wealth management net income C$131M vs. C$162M in Q3 and C$107M a year ago.
    • Q4 capital markets net income C$233M vs. C$265M in Q3 and C$222M a year ago.
    • Q4 adjusted ROE 16.4% vs. 17.1% in Q3 and 17.2% in Q4 2017.
    • Previously: Canadian Imperial Bank misses by C$0.04, misses on revenue (Nov. 29)
    • Toronto-Dominion Bank (NYSE:TDQ4 adjusted EPS of C$1.63 beat consensus by a penny; compares with C$1.67 in Q3 and C$1.36 in Q4 2017.
    • Canadian retail results reflect volume and market share gains in real-estate secured lending, while U.S. retail bank margins increased on favorable rate environment and benefits from tax reform.
    • Amends normal course issuer bid for up to an additional 20M of common shares.
    • Q4 adjusted net interest income of C$5.76B vs. C$5.66B in Q3 and C$5.33B in the year-ago quarter.
    • Q4 provision for credit losses C$670M vs. $C561M in Q3 and C$578M in Q4 2017.
    • Q4 Canadian retail net income C$1.74B vs. C$1.85B in Q3 and C$1.66B in Q4 2017; net interest margin of 2.94%% vs. 2.93% in Q3
    • Q4 U.S. retail bank adjusted net income C$886M vs. C$918M in Q3 and C$687M; equity in net income of TD Ameritrade investment, adjusted basis, C$253m vs. C$243M in Q3 and C$125M in year-ago quarter; U.S. retail NIM 3.33% flat vs. Q3.
    • Q4 wholesale banking net income C$286M vs. $223M in Q3 and C$231M in year-ago quarter.
    • Common equity Tier 1 capital ratio 12.0% vs. 11.7% in Q3 and 10.7% in the year-ago quarter.
    • Oil and gas producers and services continue to represent less than 1% of total gross loans and acceptances.
    • Previously: Toronto-Dominion Bank beats by C$0.01, beats on revenue (Nov. 29)

    • Jack in the Box (NASDAQ:JACK) has jumped 5.3% to session highs on a Reuters report that the company is examining options included a potential sale.
    • The company started talks with potential suitors this month, including private-equity firms, according to the reports.
    • In a presentation at the 2nd International Summit on Human Genome Editing in Hong Kong, Chinese researcher He Jiankui said he was "proud" of his achievement and disclosed that a second pregnancy may be on the way.
    • Eight couples undergoing fertility treatments initially enrolled in the trial, but one dropped out. 30 embryos from the remaining seven couples were created and 21 (70%) were edited using CRISPR/Cas9 to knock out the HIV-related gene CCR5.
    • Cord blood from the twin girls, born about a month ago, showed no off-target effects from the gene editing. Both will be followed for 18 years to check for off-target mutations, resistance to HIV and any other potential side effects.
    • He admitted that disabling the CCR5 gene, which is involved immunity, could make the girls more susceptible to infectious diseases but the parents were still in favor of the procedure after being informed of the risks. The father is HIV-positive.
    • Related tickers: (EDIT +2.6%)(CRSP +3.7%)(NTLA +4.1%)
    • Previously: CRISPR Therapeutics up 4% premarket reported use of CRISPR/Cas9 in humans(Nov. 26)
    • The tech sector (NYSEARCA:XLK-1% is seeing red today with the Philadelphia Semiconductor Index down 0.4% compared to the 0.2% drop for the S&P 500 and 0.3% drop for Nasdaq.
    • Gainers include Qualcomm +3.5% after CEO and ex-chair comments on the company's future, Nielsen +4.2% on the entry of a new bidder for the company, and Tech Data +19.8% after earnings.
    • Micron -1.8% is among the shares feeling pressure after cutting its top-line guidance yesterday though profit beat estimates. Twitter -5.7% slumps on a report that Fox News and related parties plan to boycott the platform.
    • Boeing (BA +1.5%) moves higher after Cowen's Cai von Rumohr names it his no. 1 aerospace stock pick for 2019, reiterating an Outperform rating and $445 price target and saying the company "is in a production sweet spot" heading into next year.
    • "Most investors miss the power of BA's favorable production environment and potential to deliver extended cash flow ramp," von Rumohr says, adding "concern over recent headline risks (Lion Air crash, Saudi arms sale restrictions, etc.) also looks overblown."
    • The analyst sees pricing remaining stable while BA shifts to more profitable models and faces no upcoming labor negotiations, which leads him to forecast cash flow per share reaching $28.60 in 2019, easily ahead of Wall Street estimates, and as high as $35 in 2021, which would allow dividend hikes to ~$10/share.
    • BA bears are wrong, von Rumohr says, in overlooking the power of a favorable product environment and the more than seven-year backlog during a period of growing airline traffic.
    • Airbnb's (AIRB) innovation lab Samara announces the new Backyard initiative "to design and prototype new ways of building and sharing homes."
    • Backyard aims to create well-designed homes with a sharing focus and a small environmental footprint. Further details aren't available at this time.
    • Airbnb prototype buildings or "test units" will go public next year.
    • Lyft (LYFT) will invest $100M in NYC's Citi Bike over the next five years as part of the approval for acquiring Citi parent company Motivate.
    • A letter from Mayor Bill de Blasio’s office says the investment will triple the number of bikes to about 40K, double the service area, and expand investment in the $5/month bike share program for low-income residents.
    • Lyft will restore the existing fleet to the required 12K bikes within 90 days of purchase or by the end of February.
    • Source: Bloomberg First Word.
    • Previously: Lyft buys bike-share company, announces Lyft Bikes (July 2)
    • Oil traders can start finalizing crude oil deals on a live blockchain-based platform for the first time, Reuters reports, after London-based platform Vakt went live yesterday, although no actual trades took place.
    • Vakt was created last year by a consortium that includes oil majors BP, Royal Dutch Shell (RDS.ARDS.B) and Equinor (NYSE:EQNR) as well as global energy trading firms Gunvor, Mercuria Energy and Koch Supply and Trading.
    • Use of Vakt will be limited at first to contracts for the five North Sea crude grades that are used to set dated Brent, but early next year the platform expects to include U.S. crude pipelines and barges of refined products such as gasoline in northern Europe.
    • Blockchain is seen as a potential solution to trade and settlement inefficiencies as well as a way to improve transparency and reduce the risk of fraud.
    • Qualcomm (NASDAQ:QCOM) CEO Steve Mollenkopf appeared on CNBC's "Mad Money" yesterday and reiterated his belief that the Apple legal battle will come to a resolution either at the end of this year or the beginning of 2019.
    • Mollenkopf also predicted that the 5G rollout will start in the spring.
    • In other QCOM news, ousted chairman/founder progeny Paul Jacobs told Bloomberg that he's still considering taking the company private.
    • Jacobs: "We're prepared if the opportunity arises."
    • Qualcomm shares are up 3.5% to $58.60.
    • U.S. stock markets fell to session lows after the South China Morning Post reports trade hawk Peter Navarro is on the guest list for the dinner meeting between President Donald Trump and Chinese leader Xi Jinping, dimming hopes that the two leaders will reach some kind of trade agreement.
    • Dow fell as much as 0.6%, the S&P 500 down as much as 0.8%, and Nasdaq slipped as much as 1.0%.
    • Earlier, Trump told reporters he's "close" to doing something on trade with China.
    • Biggest sector losers in late morning trading: Consumer services -0.8%, tech -0.8%, and financials -0.7%.
    • The only sector that's up is basic materials +0.2%.
    • U.S. 10-year Treasury note rallies, pushing yield down 4 basis points to 3.02%.
    • U.S. dollar index -0.1% to 96.76.
    • Previously: Oil below $50 for first time in a year (Nov. 29)

    • U.S. stock markets' losses narrow after the Wall Street Journal reports that China and the U.S.are exploring a trade deal that would suspend further tariffs through the spring.
    • The Dow now down 0.4% compared with its earlier loss of 0.6%; while the S&P's decline shrinks to 0.4% from 0.8%; Nasdaq -0.4% compared with -1.0% earlier.
    • New U.S.-China talks will look at big changes in Chinese economic policy, the WSJ reports, citing officials on both sides of the Pacific.
    • U.S. dollar index unchanged at 96.83; had been down 0.1%.
    • U.S. 10-year Treasury note yield slips 3 basis points vs. 4 bp decline earlier this morning.
    • Previously: Stocks hit session lows after Navarro said to attend Trump-Xi dinner (Nov. 29)
    • Atlanta Fed's GDPNow model for Q4 real GDP growth edges up to 2.6% from 2.5% on Nov. 21.
    • Factors in Q4 real personal consumption expenditures growth to 3.2% from prior view of 2.6%; that's partly offset by lower views for real gross private domestic investment growth and net exports' contributions to real GDP growth.
    • Previously: Personal income up 0.5%, consumer spending +0.6% (Nov. 29)

    • Indonesian Pres. Widodo says he wants an "immediate" end to issues holding up the country's plans to acquire a majority stake in Freeport McMoRan's (FCX -1.2%) Grasberg copper mine.
    • "I ask that all stages of the divestment process can be finished and final [and] we hope that before the end of 2018 everything is completed," Widodo said in a meeting with state-owned miner Inalum and government officials linked to the deal.
    • The planned series of transactions totaling $3.85B that will result in Inalum controlling 51.23% of PT Freeport Indonesia is subject to Inalum pocketing a special permit for the mine, which requires clearance on environmental matters relating to its tailings disposal, and other regulatory issues.
    • Papua province, home to the Grasberg mine, also rejected the proposed ownership structure for the stake in which Papua would indirectly own 10% of the FCX local unit.
    • Caesars Entertainment (CZR -0.7%) says it will close a second casino in Mississippi due to falling revenue.
    • The Tunica Roadhouse Casino is scheduled to be closed at the end of January.
    • Stocks edge lower at the open, taking a breather after racking up one of the best days of the year yesterday; S&P, Dow and Nasdaq all -0.3%.
    • The market soared after Fed Chair Powell said interest rates "remain just below the broad range of estimates of the level that would be neutral for the economy," but Michael Shaoul, chairman and CEO of Marketfield Asset Management, says the big move was "perhaps an overreaction to what was hardly a binding promise to reconsider the path of future rate rises, but at the very least it did remove any possibility of a more aggressive policy being signaled at the December meeting."
    • European bourses are higher, with France's CAC +0.9%, U.K.'s FTSE +0.8% and Germany's DAX +0.4%; in Asia, Japan's Nikkei +0.8% but China's Shanghai Composite -1.3%.
    • In the U.S., the communication services (-0.6%), information technology (-0.6%) and utilities (-0.5%) sectors are early laggards, while the energy (+0.4%) is the only group showing gains after WTI crude oil +2.1% to $51.33/bbl, reversing from earlier losses following reports that Russia is leaning toward accepting a production cut.
    • U.S. Treasury prices tick higher, pushing yields lower across the curve with the two-year yield off 2 bps to 2.78% and the 10-year yield down a basis point to 3.03%, and the U.S. Dollar Index +0.1% to 96.87.
    • Still ahead, the FOMC minutes from the November meeting will be released at 2:00 p.m. ET, and October pending home sales data will be announced at 10 a.m.
    • October Personal Income and Outlays: Income +0.5% M/M +0.4% consensus, +0.2% prior.
    • Consumer spending +0.6% M/Mvs. +0.4% consensus, +0.2% prior (revised).
    • Core PCE Price Index +0.1% M/M vs. +0.2% consensus, +0.2% prior .
    • Abercrombie & Fitch (NYSE:ANF) jumps in early trading after smashing earnings estimates with its Q3 report.
    • Comparable sales were up 3% during the quarter to top the expectation for a rise of 1.6%. The retailer's global digit sales increased 16% to account for 28% of total sales.
    • Gross profit was flat compared to a year ago at 61.3% of sales.
    • Looking ahead, A&F sees Q4 sales dropping at a mid single digits rate (calendar effect) and full-year sales up 2% to 4%.
    • ANF +19.2% premarket to $20.40.
    • Previously: Abercrombie & Fitch beats by $0.13, beats on revenue (Nov. 29)
    • General Electric (NYSE:GE) may be contemplating a much larger Healthcare IPO, up to 40% vs .20% previously, while abandoning the plan to spin the remainder.
    • That's according to Gordon Haskett analyst John Inch, who maintains an Underperform rating on shares, with a PT of $10.
    • The move would allow the shrinking conglomerate to claim continued partial ownership of the life sciences business and retain the option to sell down more healthcare stake to address longer term liquidity issues.
    • Inch sees a larger Healthcare IPO to be akin to a general equity capital raise, "except that GE would be selling off more of a prized, stronger cash generating asset (GE Healthcare) vs. selling equity proportionately from underperforming/challenged businesses (GE Power).
    • Monetizing healthcare to pay down debt would also appear to be the last "bullet" GE has left in the foreseeable future to swing market sentiment to the positive.
    • Source: Bloomberg First Word
    • Mizuho Securities reiterates its Buy rating on Micron (NASDAQ:MU) but lowers the target from $60 to $54 after yesterday's pre-announcement.
    • Micron updated its November quarter expectations to put revenue at $7.9B (lower end of guidance of $7.9B to $8.3B) and EPS of $2.95 (consensus: $2.92).
    • Analyst Vijay Rakesh thinks the better than expected EPS came from improved DRAM cost declines and share repurchases.
    • More action: RBC Capital maintains an Outperform rating on Micron and lowers the target from $69 to $65.
    • Read the transcript of CEO Sanjay Mehrotra speaking at the Credit Suisse 22nd Annual Technology, Media & Telecom Conference here.
    • Micron shares are down 0.3% premarket to $38.59 after closing yesterday up 4.6%.
    • Previously: Micron +2.6% on CEO conference comments (Nov. 28)
    • Update with more analyst color:
    • Citi cuts its Micron target to $40 expecting continuing pressure from what the firm sees as the start of a memory downturn.
    • Morgan Stanley keeps Micron at $48 and Equal Weight but analyst Joseph Moore expects DRAM conditions to stay difficult through next year.
    • Source: Bloomberg First Word.
    • Dollar Tree (NASDAQ:DLTR) reports same-store sales for the Dollar Tree banner were up 2.3% in Q3, while same-store sales fell 0.4% for the Family Dollar business.
    • Gross profit fell 110 bps to 30.2% of sales as higher domestic freight, shrink, markdowns, distribution and occupancy costs factored in. SG&A expenses were down 10 bps to 23.2% of sales.
    • The retailer's operating income margin was 7.0% vs. 8.0% a year ago.
    • During the quarter, the retailer opened 127 stores, expanded or relocated 14 stores and closed 18 stores.
    • "We delivered earnings within the range of our expectations despite continued cost pressures related to domestic freight and our investment in store wages," says CEO Gary Philbin on the performance.
    • Looking ahead, Dollar Tree expects Q4 sales of $6.10B to $6.21B vs. $6.23 consensus and Q4 EPS of $1.86 to $1.95 vs. $2.01 consensus.
    • Shares of Dollar Tree are down 5.16% in premarket trading to $79.29.
    • Previously: Dollar Tree beats by $0.04, misses on revenue (Nov. 29)
    • Germany's antitrust authority is investigating whether Amazon (NASDAQ:AMZN) prevented fair competition in the country's online marketplace.
    • The "abuse proceeding" will explore cases of withholding payments, blocking seller accounts without explanation, and use of sellers' information.
    • It will also examine if Amazon's dominance is hindering other online retailers and if sellers have become dependent on Amazon to make sales.
    • EU Brexit negotiator Michel Barnier has informed Britain that the current withdrawal agreement agreed to by Prime Minister Theresa May was the "only one possible."
    • May will try to sell the deal to her divided parliament on Dec. 11.
    • On Wednesday, the Bank of England warned the U.K. economy could contract by 8% within a year if the plan doesn't sail through parliament, but British banks were healthy enough to handle a chaotic Brexit.
    • Sterling -0.5% to $1.2761.
    • Life expectancy for Americans fell again last year, to 78.6 years, and has now lost three-tenths of a year since 2014.
    • Economists consider life expectancy to be an important measure of a nation's prosperity, but the 2017 data paints a darker picture of health in the U.S., pushed down by the sharpest annual increase in suicides in nearly a decade and a continued rise in deaths from opioid drugs.

  35. CHS- any opinion?


  36. CHS/Pstas – They had a big miss and got killed for it and revenues were down but $499M vs $532M last year and $544M last Q is not catastrophic and could be caused by lots of things.  It fits the profile of the kind of retailer I like to pick up but I don't have a good feel for women's fashions to really know if CHS is good or bad in general, so I stick to LB, HBI…  where I'm more comfortable calling a bottom (not that that's helped). 

    Going by their slides, the main business is off significantly and I don't see an excuse:

    So, if you have some reason to like them, it's a  good spot to get in assuming they survive long enough to be back in fashion.  They pay an 0.34 dividend which isn't bad but I'd rather sell 2021 $5 puts for $1.45 to net in for $3.55 and you can take 2x the $5 calls for $1.45 so net 0.725 for the longs and you can sell 1/2 the May $6s for 0.50 and that reduces your net to $0.475 so $5.475 is the break-even and you can knock that basis below zero with two more sales and, if they pop up, it's only a 1/2 cover and the 2021 $10s are 0.45 so you just roll to a 5/10 spread for net 0.475 with half uncovered – that's not a downside!  

    • Nano cap Hemp (OTCPK:HEMP +28.5%) is up on triple normal volume in apparent reaction to its announcement that the U.S. 2018 Farm Bill is nearing the finish line, including a provision legalizing hemp cultivation, production and distribution.
    • The company says when the bill passes, it will allow states to regulate hemp in addition to allowing hemp researchers to apply for grants from the Agriculture Department and enable hemp farmers to qualify for crop insurance.
    • The October Prices Received Index for agricultural production is 85.1% of its 2011 base, down 3.5% from the Sept. 2018 index and 3.1% from the Oct. 2017 index
    • The crop production index -9.1% M/M to 80.1; The livestock index +3.4% to 91.3.
    • Food grains +2.3% M/M and +6.1% Y/Y.
    • Feed grains -0.7% M/M and +4.2% Y/Y.
    • Oilseeds -2.4% M/M and -6.4% Y/Y.
    • Fruits and nuts -0.9% M/M and -3.0% Y/Y.
    • Other crop -4.9% M/M and +9.1% Y/Y
    • U.S. stock markets turn positive after the Fed's November meeting minutes disclosed a couple FOMC members felt the fed funds rate might be near "neutral"--a point at which it doesn't speed up or slow down economic growth.
    • Furthermore, the next meeting's statement may focus less on its path of "further gradual increases" and more on monitoring economic data to guide policy.
    • In late afternoon trading, the S&P 500 rises 0.3%, the Dow +0.4%, and the Nasdaq advances 0.4%.
    • Stocks started the turnaround, though, after a report that the U.S. and China are exploring the potential to suspend further tariffs in the spring and start new talks that would look at big changes in Chinese economic policy.
    • By sector, basic materials +0.9%, healthcare +0.8%, and industrial goods +0.5% lead the advance.
    • Conglomerates -0.6% and financial -0.1% lag.
    • Crude oil rises 2.3% to $51.46.
    • U.S. dollar index -0.04%.
    • U.S. 2-year Treasury note price rises, with yield down 1 basis point to 2.803%; 10-year Treasury also rises, pushing yield down 2 bps to 3.035%.
    • "Almost all participants expressed the view that another increase in the target range for the federal funds rate was likely to be warranted fairly soon" if labor market and inflation remain in-line or stronger than their current view, according to the Fed minutes for the FOMC's Nov. 7-8 meeting.
    • However, the a few participants "expressed uncertainty about timing."
    • A couple of FOMC members felt the fed funds rate might be near its neutral level and more rate hikes could slow the economic expansion.
    • The minutes express a more flexible approach in policy going forward as well as regarding the statements the FOMC issues after its meetings.
    • They emphasized that "monetary policy isn't on a preset course" and policy should be guided by incoming data.
    • The committee also discussed revising the post-meeting statement referring to "further gradual increases" in the target range of the fed funds rate, with some members saying the statement may need to place greater emphasis on evaluating incoming data to assess economic and policy outlook.
    • Stock markets break into positive territory, with the Dow +0.1%, S&P 500 +0.1%, and the Nasdaq +0.2%

     

    • Barclays trims estimates on Underweight-rated Cheesecake Factory (CAKE -4.4%) after factoring in the impact of the higher minimum wages in California over the next several years. The firm cuts its price target on CAKE to $44 from $47.
    • Earlier this week, Wedbush warned on soft traffic trends for Cheesecake Factory over the Thanksgiving holiday weekend. Also in the mix, several other firms have pointed that Cheesecake Factory's Q4 comparable sales are likely to be impacted by the wildfires in California where the chain has a high concentration of restaurants.

  37. The U.S. budget deficit widened to $898 billion in the 11 months through August, exceeding the Congressional Budget Office’s forecast for the first full fiscal year under the Trump presidency.

    The budget deficit rose by a third in the October to August period from $674 billion in the same timeframe a year earlier, the Treasury Department said in a statement on Thursday. Spending rose by 7 percent to $3.88 trillion, outpacing revenue gains of 1 percent to $2.99 trillion. Revenue from corporations fell to $163 billion, down by $71 billion from a year ago.


  38. Any news in GE? Showing a little strength into this end of day dump.


  39. CHS- thanks for the info. Women's fashion can be treacherous territory for sure. Its a turnaround of sorts like LB but a much better balance sheet (low debt). Options are not very liquid so I am considering a buy/write @$5- either 2020 or 21 – if I cab get the fills.


  40. GE/Ati – Well someone has to want to buy them around $7.50 but, other than the potential sale of more assets – nothing seems to be up.


  41. Phil / anyone- After-market question from the article above- 

    "outpacing revenue gains of 1 percent to $2.99 trillion"

    With corp. tax rev. down 30%+, where did the 1% revenue gains come from?  Tariffs?


  42. Not surprised re CHS. It is geared toward the younger crowd and their styles are such unless you are wafer slim won't fit. Besides really low cost, flimsy fabric to boot. Seems with the graying of America they are out of step as it certainly has nothing for the outdoor crowd either. Have tried to buy there with no luck, besides it is pricey for what you get. The 20 something hip sales girls are hopeless and if you are over 30 just ignore you anyways, which I don't mind but others might. IMHO.


  43. Follow up- That figure was from August, so probably not tariff related.


  44. Probably tariffs.  It's shameful that Corp Profits are at record highs yet collections are dropping – simply shifts the burden of tax to the masses.

    CHS/Pirate – True but I think that, like ANF, they'll simply re-tool and get back on their feet.


  45. think I may have posted this last week? cant recall…. but in any case, for anyone looking at GE found this article very in depth and informative take on it (theres also a youtube video out there by the same guy that covers everything)

     

    http://aswathdamodaran.blogspot.com/2018/11/the-ge-end-game-bataan-death-march-or.html


  46. CRS – thanks for sharing the fundamental analysis of GE – the author's credentials seem impeccable. Sum of the parts analysis makes for interesting reading – Wall Street analysts love it, but it is often a value trap. 

    But I always appreciate learning from different perspectives, even though they may be contrary to my default approach to thinking about investing and trading. 

    I found this snippet from deep in my archives.

    Begin quote:

    "So, what's wrong with using fundamentals? Plenty, so let me highlight just a few problems. One, fundamentals requires you knowing the story. But, you and I are so many layers removed from "the story" we might as well be reading a work of fiction when it comes to an analyst report. I know that for a fact, as the lead IBM (IBM:NYSE) analyst of a large Wall Street firm used to call me for information about IBM when I worked there (he was a former fraternity brother of mine). I honestly told him what I knew, but I never gave away any inside scoop, as I frankly didn't know any! I was so far removed from what was really going on, I knew as much about IBM strategy as anyone reading the corporate report! (Years later, by the way, when I did get a little closer to those in power and would actually know a bit about IBM's future plans, I'd read an analyst's report and still think it was a work of fiction.)

    In addition, for as much heat as chart readers get for trying to divine the future, fundamentalists are really no better. Sure Intel's (INTC:Nasdaq) prospects might look bright, but those prospects depend on the economy, competition, employee morale, and about a thousand other forces. All, by the way, unknowable.

    My final point, though, is the most important. Use of fundamentals implies getting the story right. Almost by definition, then, you are limiting the playing field of opportunities you might take."


  47. Now look at a 10 year chart of GE's stock price. Compare it to the price chart over the same period for the S&P 500. GE was more or less in lockstep with the S&P until the end of December 2016.

    The price and fundamental analysis would almost get you to believe that there was no reason why GE would not keep on maintaining that relationship for the future. GE, it would appear, the safe investment of which every investor should have some in their portfolio. Hold until retirement.

    At the end of December 2016, putting money into GE, either through buying stock, or buying 2019 LEAP Bull Call Spreads seemed a good idea. With 20/20 hindsight, that approach on GE condemned the investor to a catastrophic loss of their investment. Doubling down would have required very deep pockets. 

    Key takeaway – despite all the analysis, all the differing points of view about the fundamentals and the technicals of a company, its stock, and its attractiveness as an investment/trading vehicle, never forget the universal truth that 'you could be wrong'.

    That's why God invented stop losses. Long version: let winners run, cut losers quick.



  48. China hopes U.S. shows sincerity at G20 trade talks


  49. Analysis: Chinese sneeze could give Europe Inc. a nasty flu



  50. GOP unloads on Flake






  51. Your Home Is Not An Investment



  52. Prized ‘Rare Earth’ Minerals Feel Scorch of Tariffs – WSJ




  53. Cuba says the US is unfairly denying diplomatic visas


  54. Good morning! 

    F'ing Marriott had a data breach and AMEX changed my card number!  I guess it's a good thing but I saw a bunch of Emails regarding having my card changed and I thought that was some kind of fraud but I called AMEX and they said it's being done to anyone who had transactions there (on the Centurion Card, anyway).  

    Marriott Says Up to 500 Million Affected by Starwood Breach

    Marriott said it has found a data breach in its Starwood reservation system that has potentially affected up to 500 million guests who made reservations at Starwood properties since 2014.

    This whole system of giving people your CC # and information is BS as we can't trust them to secure it.  ApplePay is the future as AAPL essentially says "This is our guy and we trust him so you will trust him and that's all you need to know."  I'd rather put my faith in one company than have to give my account info to every person I buy a beer from!  

    Market down as new things look troubling:

    • Shares across Europe and U.S. futures are drifting lower on the final day of November, as markets watch ongoing trade developments between the world's two largest economies.
    • President Trump and China's Xi Jinping are expected to meet on the sidelines of the G20 summit in Argentina and the two leaders will have a dinner meeting with staff on Saturday evening.
    • The presence of three top crude producers – Saudi Arabia, Russia and the U.S. – have also raised expectations that oil policy will be discussed in Buenos Aires.

    • German Chancellor Angela Merkel is finally on her way to Argentina, but will likely miss the first day of the G20 summit, after her plane was forced to land in Cologne because of a technical defect.
    • Meanwhile, German retail sales edged lower for a fourth straight month in October, dipping 0.3%, in a sign of weak consumer spending in the eurozone's largest economy.
    • DAX -0.5%; Euro -0.3% to $1.1361.
    • A police raid of Deutsche Bank (NYSE:DB) is continuing today over money laundering allegations linked to the "Panama Papers."
    • There is a large volume of material, according to a spokeswoman for the Frankfurt prosecutor’s office.
    • Deutsche Bank shares slipped 1.3% further in premarket trading, following a near 5% tumble on Thursday after the probe began.

    • Pakistan's rupee tumbled as much as 5% overnight in what traders suspect was a currency devaluation amid bailout talks with the IMF.
    • A delegation from the fund visited Islamabad earlier this month but left without an agreement on a new loan expected to be worth at least $7B.
    • The two sides are expected to meet by mid-January for further discussions.
    • ETFs: PAK
    • House GOP leaders decided last night to suspend today's vote on their year-end tax bill, leaving few legislative days left to get approval before the House majority is relinquished to the Democrats.
    • Republicans packed the catch-all legislation with provisions that for the most part enjoy broad support, but disagreements remain over revenue-raising offsets and technical corrections to last year's tax law.
    • Growth in China's manufacturing sector stalled for the first time in over two years in November, heaping pressure on Beijing ahead of high-stakes trade talks between Xi Jinping and President Trump this weekend.
    • The official Purchasing Managers' Index fell to 50, indicating no growth in activity or contraction on a monthly basis.
    • The survey also showed further weakness in new orders from at home and abroad.
    • The leaders of Mexico, Canada and the United States are due to sign a renewed North American trade pact this morning, although brinkmanship over its final details continued through yesterday evening.
    • Officially known as USMCA, the ceremony will be held on the sidelines of the G20 summit.
    • Legislators from the three countries still have to approve the pact, before it goes into effect.
    • Marriott (NYSE:MAR-5.6% premarket after revealing that its Starwood guest reservation database was breached, potentially exposing information on about 500M guests.
    • Among the data taken included names, mailing addresses, phone numbers, email addresses, passport numbers, date of birth and gender.
    • For some, the information also includes payment card numbers and payment card expiration dates
    • GameStop (NYSE:GME) is down 12.4% after lowerint its full-year profit view, despite a strong performance during Black Friday and Cyber Monday.
    • The company expects fulll-year EPS of $2.55 to $2.75 vs. $3.00 and $3.35 prior and $3.05 consensus.
    • "We anticipate that our fourth quarter sales will skew more towards hardware than initially planned which, along with underperformance of certain titles, weakness in pre-owned and recent sales promotions, will result in fourth quarter earnings that are below our previous expectations," notes COO Rob Lloyd.
    • During the earnings call (transcript), GameStop said the proceeds from the Spring Mobile sale will likely go to "facilitate investment in our core businesses to drive growth and transform GameStop for the future, repayment of debt, return of capital to shareholders or most likely some combination of these opportunities."
    • Previously: GameStop reports Q3 results (Nov. 29)
    • Minneapolis Federal Reserve President Neel Kashkari tells CNBC that central bankers shouldn't hike interest rates when job creation is strong and inflation remains under control.
    • He believes the Fed should pause on rate increases because increasing the fed funds rate too much before it's needed could trigger a recession in the U.S. Currently, he sees interest rates as "close to neutral"--the point at which the interest rate neither slows nor accelerates the economy.
    • Kashkari isn't a voting member on the Federal Open Market Committee, the Fed's policy-making group, this year or next year. When he was a voter in 2017, he voted against all three rate hikes because inflation wasn't a problem.
    • Previously: `Almost all' FOMC members see another hike `fairly soon': Fed minutes (Nov. 29)
    • Previously: Fed's Powell now sees current interest rate `just below' neutral (Nov. 28)
    • BuzzFeed News reports that Facebook (NASDAQ:FB) COO Sheryl Sandberg requested research on company critic George Soros, contrary to Sandberg's prior claim that she was unaware of the work done by opposition research firm Definers.
    • Facebook acknowledged its ties to Definers after a New York Times report but said Sandberg and CEO Mark Zuckerberg had little to no knowledge of the firm's work.
    • A FB spokesperson now admits that Sandberg did request research on Soros but says she did not direct Definers.
    • Key quote from the statement: "Mr. Soros is a prominent investor and we looked into his investments and trading activity related to Facebook. That research was already underway when Sheryl sent an email asking if Mr. Soros had shorted Facebook's stock. Sheryl never directed research on Freedom from Facebook. But as she said before she takes full responsibility for any activity that happened on her watch."
    • Previously: Facebook publishes memo where policy chief owns up to PR firm hiring (Nov. 21)
    • Previously: Open Society head wants Facebook oversight (Nov. 23)
    • JPMorgan analyst Paul Coster downgrades Cree (NASDAQ:CREE) from Neutral to Underweight with a $35 price target.
    • Coster cites valuation and says the downgrade isn't a call to short but rather an intermediate term call on likely underperformance relative to Coster's coverage universe.
    • Cree shares are flat premarket at $45.96.

  55. GE/CRS, Winston – Well, GE is playing out like a worst case and may indeed be a value trap but, from a strategy perspective, we're exactly where we should be for a stock that's fallen from $20 to $8 since we started playing it.  We began with our usual 20 puts and 40 2020 spreads on 1/9 and that didn't work ($10,000 loss) so we rolled to 50 spreads with 20 puts in Feb and we lost another $17,000 and now we rolled out a year to 80 of the 2021 $10/15 spreads with 30 short $15 puts and, overall, we're down $39,081 on the position – which is a single allocation block ($50,000) so it's by no means "out of control" – this is what our strategy leads to when a stock we like gets very cheap (and we decide to stick with it).  

    GE
    80 GE 2021 15-JAN 15.00 CALL SC $ 6,640.00 10/1/2018 $ 12,000.00   60
    $ 5,360.00 44.7 %
    80 GE 2021 15-JAN 10.00 CALL LC $ 25,600.00 9/21/2018 $ 14,800.00   70
    $ -10,800.00 -42.2 %
    30 GE 2021 15-JAN 15.00 PUT SP $ 22,200.00 9/24/2018 $ 12,000.00   67
    $ -10,200.00 -85.0 %
    50 GE 2020 17-JAN 13.00 CALL LC $ 19,000.00 2/9/2018 $ 7,500.00 10/1/2018 234
    $ -11,500.00 -60.5 %
    20 GE 2020 17-JAN 18.00 PUT SP $ 10,800.00 1/8/2018 $ 4,800.00 10/1/2018 266
    $ -6,000.00 -125.0 %
    50 GE 2020 17-JAN 13.00 CALL LC $ 19,000.00 2/9/2018 $ 20,000.00 2/16/2018 7
    $ 1,000.00 5.3 %
    20 GE 2020 17-JAN 18.00 PUT SP $ 8,300.00 1/8/2018 $ 4,800.00 2/16/2018 39
    $ -3,500.00 -72.9 %
    40 GE 2020 17-JAN 20.00 CALL SC $ 5,641.25 1/9/2018 $ 9,400.00 2/8/2018 30
    $ 3,758.75 40.0 %
    40 GE 2020 17-JAN 15.00 CALL LC $ 19,200.00 1/8/2018 $ 12,000.00 2/9/2018 32
    $ -7,200.00 -37.5 %
    Total Gain/Loss for GE
    $ -39,081.25 -28.7 %

    Now, it's very easy to say bad things about GE and pick out all the faults in what we knew was going to be a long, painful restructuring for the company.  If we knew it was going to be this bad – we'd have waited but VALUATION is not a random numbers game and one person't guess is not just as good as any other's and to say it's no better than TA because your facts may be fake assumes the person doing the valuation can't tell the difference.

    Sadly, there are thousands of bad analysts out there for every on good one and I'm certainly not going to sit here and defend GE against every jackass who wants to pile on against them.  I very simply think that a company that is, IN FACT,  doing $120Bn in sales and dropping $2Bn a quarter in operating income to the bottom line ($6Bn net profit) DURING a rough transition is worth more than $69Bn at $8.

    For that reason, I believe there's a reasonable chance that our 2021 $10/15 bull call spread has a good chance of paying us back $40,000 in 2021, vs the current $16,000 loss it's showing which would be a net turnaround of $56,000.  It's possible I'm wrong and we lose a full allocation block but that one loss will barely impact the LTP so, in my opinion, it's worth taking a chance and sticking with them and maybe even allocating our last $10,000 to one more roll.

    Feel free to disagree but there is nothing out of control about this position – investing involves taking risks and not all of those risks pay off but, if you allocate your assets properly and continually take positions where the rewards are at least double the risk – then you shouldn't need to be right 100% of the time but it is a statistical system and you still have a TA mindset and you are looking at a person who always bets heads and tails on a coin flip with a 110% reward for either side coming up and, because heads comes up 10 times in a row – you are pointing out the folly of betting on tails and telling people to abandon a statistically sound betting strategy due to an aberration.