Archive for 2018

Everything We Know About The California Fires

Courtesy of Benzinga.

Everything We Know About The California Fires

PG&E Corporation (NYSE: PCG) stock plunged Monday after a 12-percent drop Friday as investors grow increasingly concerned about the financial impact of the California wildfires. Although there is no evidence as of yet that the Camp Fire, the Hill Fire or the Woolsey Fire were caused by faulty infrastructure, Height Capital Markets analyst Clayton Allen said a pair of California utility stocks are potentially facing major liability risks.

Market Risk

“Rapidly expanding wildfires in California once again raise the specter of inverse condemnation-related liability for investor-owned utilities in the state,” Allen said in a note. 

PG&E has high exposure to the Camp Fire region, while Edison International (NYSE: EIX) has exposure to the Hill and Woolsey Fires.

“Although no evidence tying either firm to the fires has been released, we think that both utility companies face significant risk under the currently expansive definition of inverse condemnation,” he said.

PG&E reported a power outage in a high-voltage power line at about 6:15 a.m. Thursday near the origin of the Camp Fire, which was first reported about 20 minutes later, according to the San Francisco Chronicle.

What’s To Blame?

In a series of tweets over the weekend, President Donald Trump blamed the fires on poor forest management in California.

There is no reason for these massive, deadly and costly forest fires in California except that forest management is so poor. Billions of dollars are given each year, with so many lives lost, all because of gross mismanagement of the forests. Remedy now, or no more Fed payments!

— Donald J. Trump (@realDonaldTrump) November 10, 2018

Meteorologists say the fires aren’t a result of forest management but rather a combination of extremely strong winds, exceptionally dry conditions and residential overdevelopment.

PG&E pushed earlier this year for a change to wildfire liability laws in California.

Under the law, utility companies are liable for any fires started by utility company equipment, even if the companies were not found to be negligent. The utility companies have argued that the increased frequency and size of California wildfires has created financial risk for them that could threaten the stability of the California electrical grid.

Cost, Containment

The latest round of wildfires may move the


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Things Are Going From Bad To Worse For GE

Courtesy of Benzinga.

Things Are Going From Bad To Worse For GE

Even with General Electric Company (NYSE: GE)’s stock down more than 74 percent in the past three years, Wall Street analysts are still saying investors should still think twice about buying the dip.

Credit Suisse analyst John Walsh on Monday reiterated his Neutral rating and lowered his price target from $12 to $10. The risk-reward balance for GE stock has still not normalized.

“Poor visibility into fundamentals (e.g., Power and forward Aviation margin) coupled with uncertainty around liabilities (e.g., insurance, Capital, WMC, and SEC investigation) keep us sidelined,” Walsh wrote.

Concerns Remain

While he says upside-to-downside risk is currently 2-to-1, there are still four main concerns with GE stock that keep him from being bullish:

  • Unknown liability size.
  • Persistent Power weakness.
  • Unstable aviation margins.
  • Lackluster cash flow.

Walsh said GE’s core business is not necessarily fundamentally broken, but there’s no end in sight to GE’s issues, at least in the near term. At this point, there’s no way to accurately predict what GE’s financials will look like once new CEO Larry Culp’s restructuring plan is implemented.

Culp said on Monday he feels a sense of “urgency” to get GE back on track and that the company has “plenty of opportunities through asset sales” to dial down its leverage.

Walsh isn’t the only expert that is still skeptical of GE. On Friday, JPMorgan analyst Stephen Tusa sut his price target for GE stock to just $6.

“While the stock is down ~70% from the peak of $30, this move still does not sufficiently reflect the fundamental facts,” he wrote.

No Technical Support

While GE’s fundamentals are a mess, Miller Tabak analyst Matt Maley said on Friday GE stock is unlikely to get any technical support in the near term either.

“Even though the stock is very oversold on a very near-term basis, if you look at its weekly [relative strength index chart], it’s not as oversold as it was on two


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10 Biggest Price Target Changes For Monday

Courtesy of Benzinga.

  • Barclays cut the price target for American International Group, Inc. (NYSE: AIG) from $71 to $62. AIG shares closed at $43.82 on Friday.
  • Wells Fargo lowered the price target for D.R. Horton, Inc. (NYSE: DHI) from $62 to $48. D.R. Horton shares closed at $34.40 on Friday.
  • Canaccord Genuity lowered the price target for Asure Software, Inc. (NASDAQ: ASUR) from $22 to $13. Asure Software shares closed at $7.75 on Friday.
  • KeyBanc cut the price target for athenahealth, Inc. (NASDAQ: ATHN) from $170 to $142. athenahealth shares closed at $120.35 on Friday.
  • H.C. Wainwright lowered the price target on Achaogen, Inc. (NASDAQ: AKAO) from $19 to $3. Achaogen shares closed at $2.25 on Friday.
  • Citigroup cut Southern Copper Corporation (NYSE: SCCO) price target from $43 to $33. Southern Copper shares closed at $37.93 on Friday.
  • Bank of America raised Armstrong World Industries, Inc. (NYSE: AWI) price target from $63 to $75. Armstrong World shares closed at $67.22 on Friday.
  • Wells Fargo raised the price target on L Brands, Inc. (NYSE: LB) from $30 to $55. L Brands shares closed at $36.50 on Friday.
  • Vertical Group cut the price target for GrafTech International Ltd. (NYSE: EAF) from $29 to $9. GrafTech shares closed at $16.08 on Friday.
  • B. Riley FBR lowered Adamis Pharmaceuticals Corporation (NASDAQ: ADMP) price target from $7.50 to $2.50. Adamis Pharmaceuticals shares closed at $2.78 on Friday.

Posted-In: Price Target ChangesPrice Target Intraday Update Analyst Ratings





8 Stocks To Watch For November 12, 2018

Courtesy of Benzinga.

8 Stocks To Watch For November 12, 2018

Some of the stocks that may grab investor focus today are:

  • Apptio Inc (NASDAQ: APTI) agreed to be acquired by private equity firm Vista Equity Partners for around $1.94 billion. Apptio shares dropped 3.34 percent to close at $24.85 on Friday.
  • Wall Street expects AECOM (NYSE: ACM) to report quarterly earnings at $0.82 per share on revenue of $5.25 billion before the opening bell. AECOM shares declined 2.27 percent to close at $32.72 on Friday.
  • Veritas Capital and Elliott Management will acquire athenahealth, Inc (NASDAQ: ATHN) for $5.5 billion in cash, Reuters reported Sunday. athenahealth reported Q3 earnings of $1.08 per share on sales of $329.5 million. Athenahealth shares gained 3.03 percent to $124.00 in after-hours trading.
  • SAP SE (NYSE: SAP) announced plans to acquire Qualtrics International for $8 billion in cash. Qualtrics recently filed for a 20 million share initial public offering. SAP shares dropped 0.48 percent to $107.79 in the after-hours trading session.

Find out what’s going on in today’s market and bring any questions you have to Benzinga’s PreMarket Prep.

Choosing the best broker is an important part of being a successful trader or investor

  • Opko Health Inc. (NASDAQ: OPK) reported upbeat earnings for its third quarter, while sales missed views. Opko Health shares climbed 6.47 percent to $3.29 in the after-hours trading session.
  • Analysts expect UGI Corporation (NYSE: UGI) to post quarterly loss at $0.04 per share on revenue of $1.22 billion after the closing bell. UGI shares dropped 0.38 percent to $55.82 in after-hours trading.
  • NASCAR offered to acquire International Speedway Corp (NASDAQ: ISCA) for $42 per share. International Speedway shares surged 7.01 percent to $41.80 in the after-hours trading session.
  • GNC Holdings Inc (NYSE: GNC) reported downbeat earnings for its third quarter on Friday. GNC shares dipped 17.06 percent to $3.50 in after-hours trading.

Posted-In: Stocks To WatchEarnings News Pre-Market Outlook Markets Trading Ideas





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Hedge Fund CIO: When Investing Is Like Waging War

Courtesy of ZeroHedge. View original post here.

Submitted by Eric Peters, CIO of One River Asset Management

Warfare

“If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.”

              – Sun Tzu, The Art of War, 650 BC

“Out of every one-hundred men you send us, ten shouldn’t even be here, eighty are just targets, nine are the real fighters, and we are lucky to have them, for they the battle make. Ah, but the one, one is a warrior, and he will bring the others back.”

             – Heraclitus, 500 BC

“The only easy day was yesterday – Get comfortable being uncomfortable – Don’t run to your death – Have a shared sense of purpose – Move, shoot, communicate – No plan survives first contact with the enemy – All in, all the time.”

             – US Naval Special Ops

“Capital markets and combat are not turn-based games like chess,” said the Deputy CIO, top decile performer, Marine Force Recon veteran.

“This means that there’s no such thing as waiting to make a decision, because waiting is a decision,” he continued. “Waiting can frequently be correct near-term, but you need to be intentional about how to use that time – to gather information, prioritizing the data that will have the most significant impact on your probability of a favorable outcome.”

There’s a vast difference between incomplete and insufficient information. “Defining the threshold for information sufficiency is an art, honed through experience, often indistinguishable from intuition.” Acting with insufficient information imposes an unnecessary risk that will get you killed in combat or cause avoidable losses as an investor.

“But waiting for complete/perfect information is foolish because it’s an illusion – it’s not possible, because events move in real time.” You cannot fall victim to the zero-defect mentality – the search for perfect information cripples your ability to execute.

“There are two contrasting philosophies in military science about the best use of reserves;…
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When The Guns Fell Silent: Hear The Eerie Quiet That Followed The End Of WWI

Courtesy of ZeroHedge. View original post here.

On the eleventh hour, of the eleventh day of the eleventh month, an Armistice was declared that ended what had been, up until that point, the bloodiest conflict in human history. Millions of citizens in the US and Europe greeted the peace – declared 100 years ago on Sunday – with jubilation as it meant the end of four years of brutal trench warfare and mechanized slaughter that killed 16 million had finally come to an end.

But the impact of the Armistice was especially palpable on the front, where heavy artillery had been firing right up to the minute that peace was declared. In a stunning recording released by the British Imperial War Museum on observance of the anniversary, listeners can hear the guns firing on the American front near the River Moselle one minute before the Armistice was declared – then the stunning silence that followed one minute after.

As the boom of the guns faded, the silence was punctuated only by chirping birds and a rustling wind.

After the recording's release, comments poured in from users on Twitter, many of whom were amazed to learn that the guns had been firing up to the minute the war ended.

According to Metro, the audio clips were patched together by sound designers Coda to Coda.





Foreign Capital Has Been Propping Up China’s Currency. Here’s What Happens When It Leaves

Courtesy of ZeroHedge. View original post here.

By Benn Steil and Benjamin Della Rocca

“I think China’s manipulating their currency, absolutely,” President Trump said back in August. Yet the People’s Bank of China (PBoC) was, and has been, intervening to keep the RMB up, and not to push it down, as Trump was alleging. And we believe such interventions are about to get much larger. Here is why.

Over the past two years, as our left-hand figure above shows, foreign portfolio investors have piled prodigiously into Chinese assets, helping to support the RMB. But history suggests this trend is about to reverse. While inflows have been rising, Chinese stocks have been tumbling—they are down over 20 percent from their January peak. Dreadful performance like this typically drives funds out of emerging markets. We may be seeing the beginning of such outflows in China.

Repatriation of liquid foreign capital will make it far more challenging for China to keep its currency up. Of course, China could change course and let it fall, but that risks exacerbating the foreign-debt burden of its highly leveraged corporates. It could raise interest rates, but that would further slow a slowing economy. It could, to keep capital at home, demand higher returns on its foreign lending, but that would mean sacrificing its efforts to subsidize its companies operating abroad, as well those aimed at putting dollars to the service of geostrategic objectives—like Belt and Road.

In short, then, there is every reason to expect that the PBoC will boost its support for the RMB by selling dollar reserves. This is what it did back in 2015, when a plunging stock market scared away foreign capital.

So in spite of President’s Trump’s repeated charges that China is manipulating its currency for competitive advantage in trade, all evidence suggests that it will continue to do the opposite. But if China were to sell reserves at the same pace as in 2015, its reserve levels would, by mid-2020, actually fall below the safety threshold implied by the IMF’s framework for reserve adequacy—as shown in the right-hand figure above.

The prospect of a balance-of-payments crisis, in which China would struggle to pay for imports and service foreign debt (a prospect considered outlandish a…
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Swiss National Bank Unexpectedly Sold US Stocks In Q3, Dumping Over 1 Million Apple Shares

Courtesy of ZeroHedge. View original post here.

The SNB’s latest 13-F form filings (yes, the Swiss central bank lists its US equity holdings like the hedge fund that it is) to the SEC were released this week. And, like every other quarter, we take a closer look to see what stocks the world's only hedge fund central bank that prints money out of thin air bought, and on rare occasions, sold. This was one of those rare quarters.

After some modest fluctuations earlier this year, the SNB's reported equity allocation was unchanged in 3Q at 21% (and includes no bank stocks to avoid conflicts of interest, yet somehow owning a chunk of equity of virtually every other US public company is not a conflict of interest?). This is notable because as JPMorgan writes, the SNB’s behaviour in 3Q18 appears contrarian.

While the chart below shows that the overall value of the SNB's US listed long holdings rose by over $2 billion to $90 billion, most of this was due to the price appreciation and according to JPM calculations, the central bank sold around $7bn of equities in Q3 based on the returns on non-financial sector equities. This compares to purchases during 1H18 of around $6bn. The central bank also reportedly bought around $3bn of bonds in 3Q, following largely flat bond purchases in 1H18.

In addition to taking some profits just as the market peaked this year and ahead of the nasty October rout, here are some other notable observations: in the third quarter, after the SNB printed money out of thing air, it then sold 1.1 million shares of Apple, 893K shares of MSFT, 44K shares of Amazon, 83K shares of Alphabet, 296K shares of FB, and 526K shares of XOM. Also according to some calculations, the SNB's portfolio now generates over $1 billion worth of dividends, or as @SheepleAnalytics notes, "they print money and we ship them our profits."

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Zero Hedge

Enemy Of The People?

Courtesy of ZeroHedge. View original post here.

Via The Zman blog,

There has never been a time when normal people did not know the media was biased and biased in a predictable direction. For every non-liberal in the media, there were at least ten liberals. The ratio was probably higher, but then, as now, some lefties liked to pretend they were independents or some third option.

The media used to invest a lot of time denying they had a bias and an agenda, but the only people who believed them were on the Left, which had the odd effect of confirming they had a bias and an agenda.

...



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Phil's Favorites

A 2019 Earnings Recession?

 

A 2019 Earnings Recession?

Courtesy of 

Shout to Leigh!

On the new Talk Your Book – Josh Brown is joined by Leigh Drogen of Estimize, one of the leading providers of crowdsourced financial and economic data to talk about the trend in corporate profits that could potentially lead to an earnings recession later this year.

What is the thing that Leigh is seeing in the data that Wall Street isn’t yet picking up on? What segment of the stock market is most at risk? Why is the crowd smarter than the narrow consensus of Wall Street analysts?

Check out Estimize ...



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ValueWalk

D.E. Shaw Investment Calls For Leadership Change At EQT

By ActivistInsight. Originally published at ValueWalk.

Elliott Management has offered to acquire QEP Resources for approximately $2.1 billion, contending the oil and gas explorer’s turnaround efforts have done little to lift the company’s share price. The company responded and said that a thorough review of the proposition is imperative in order to properly act in the best interests of shareholders, “taking into account the company’s other alternatives and current market conditions.” The news came only a month after Travelport Worldwide agreed to sell itself to Siris Capital Group and Elliott’s private equity arm Evergreen Coast Capital for $4.4 billion in cash and two months after Athenahealth was bought by Veritas and Evergreen for $5.7 bi...



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Kimble Charting Solutions

Gold & Silver Testing Important Breakout Levels!

Courtesy of Chris Kimble.

Gold and Silver from a long-term perspective have created a series of lower highs over the past 8-years. Will 2019 bring a change to this trend? A big test is in play!

Gold since the lows in 2016 has created a series of higher lows, while Silver may have created a double bottom.

Gold & Silver are currently facing break attempts a (1) and (2). These falling resistance lines have disappointed metals bulls for the past few years.

The direction of Gold and Silver weeks and months from now should be highly influenced by what each does as they are attempting to break above important resistance levels.

To become a member of Kimbl...



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Insider Scoop

UBS Says Disney's Streaming Ambition Gives It A 'New Hope'

Courtesy of Benzinga.

Related DIS Despite Some Risks, Analysts Still Expecting Double Digit Growth From Communications Services In Q4 ...

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Digital Currencies

Russia Prepares To Buy Up To $10 Billion In Bitcoin To Evade US Sanctions

Courtesy of Zero Hedge

While the market has been increasingly focused on the rising headwinds in the global economy in general, and China's economic slowdown in particular, while the media is obsessing over daily revelations that Trump may or may not have colluded with Russia to get elected, a far more critical, if underreported, shift has been taking place over the past year.

As we reported in June, whether due to concerns over draconian western sanctions and asset confiscations following the poisoning of former Russian military officer Sergei Skripal, or simply because it wanted to diversify away from the dollar, Russia liquidated virtually all of its Treasury holdings in the late spri...



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Chart School

Weekly Market Recap Jan 13, 2019

Courtesy of Blain.

In last week’s recap we asked:  “Has the Fed solved all the market’s problems in 1 speech?”

Thus far the market says yes!  As Guns n Roses preached – all we need is a little “patience”.  Four up days followed by a nominal down day Friday had the market following it’s normal pattern the past nearly 30 years – jumping whenever the Federal Reserve hints (or essentially says outright) it is here for the markets.   And in case you missed it the prior Friday, Chairman Powell came back out Thursday to reiterate the news – so…so… so… patient!

Fed Chairman Jerome Powell reinforced that message Thursday during a discussion at the Economic Club of Washington where he said that the central bank will be “fle...



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Members' Corner

Why Trump Can't Learn

 

Bill Eddy (lawyer, therapist, author) predicted Trump's failure based on his personality, which was evident years ago. This article, written in 2017, references a prescient article Bill wrote before Trump became president, in July, 2016, 5 Reasons Trump Can’t Learn. ~ Ilene 

Why Trump Can’t Learn

Donald Trump by Gage Skidmore (...



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Biotech

Opening Pandora's Box: Gene editing and its consequences

Reminder: We are available to chat with Members, comments are found below each post.

 

Opening Pandora's Box: Gene editing and its consequences

Bacteriophage viruses infecting bacterial cells , Bacterial viruses. from www.shutterstock.com

Courtesy of John Bergeron, McGill University

Today, the scientific community is aghast at the prospect of gene editing to create “designer” humans. Gene editing may be of greater consequence than climate change, or even the consequences of unleashing the energy of the atom.

...

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Mapping The Market

Trump: "I Won't Be Here" When It Blows Up

By Jean-Luc

Maybe we should simply try him for treason right now:

Trump on Coming Debt Crisis: ‘I Won’t Be Here’ When It Blows Up

The president thinks the balancing of the nation’s books is going to, ultimately, be a future president’s problem.

By Asawin Suebsaeng and Lachlan Markay, Daily Beast

The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the nationa...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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