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Non-Farm Friday – Is America Working? The Liar-In-Chief Says Yes!

Image result for trump china tariffsAmerica is barely working. 

Our Government is barely functioning and the President spent yesterday afternoon lying to the "failing" NYTimes – in an interview with a paper that employs fact-checkers.  Trump talked about repealing Obamacare, Building a Wall to stop the flow of drugs, funding the military, appointing Secretaries, China's Trade Deficit and his poll numbers and NOT ONE thing the President said was actually true – NOT ONE THING!!!  Not only that but the Trump Administration has backed themselves into a corner with China and, with one month to go – Trump will have to accept an even weaker deal than new Nafta simply in order to avoid looking like he was completely defeated in "The Art of the Deal."  

As noted by the "failing" NY Times, Trump's whole take on the Trade War is complete and utter BS as the tariffs he is "imposing on China" are nothing more than a tax on the American people and, if Trump expands the tariffs, as he is threatening to do – it will be nothing more than a $125Bn tax increase on US Consumers in order to pay for the Billionaire Tax Breaks he has given out to his friends and family.  One has to wonder wheter Trump WANTS a deal with China – I think he wants the tax money more:


“We have 25 percent now on $50 billion. And by the way, Peter, that’s a lot of money pouring into our Treasury, you know. We never made 5 cents with China. We’re getting right now 25 percent on $50 billion.”

Tariffs imposed on imports of foreign goods do not mean another country is paying the bill. The costs are largely passed onto American companies and consumers.

Tariffs generated almost a third of all federal revenue in 1915. In the 2016 fiscal year, the Treasury Department collected $35 billion in tariff revenue.

8:30 Update:  Apparently though, America doesn't need a working Government or a truthful leader as we added 304,000 jobs in January – despite the Government shutdown.  That likely means the Fed is making a HUGE mistake in easing off on rate hikes as job numbers like these can quickly lead to inflation – but  at least its the good kind, caused by putting more money in workers' pockets.  304,000 jobs is almost double the 180,000 expected by leading Economorons BUT, be careful as last month was revised down by 90,000 jobs – from 312,000 to 222,000 and one could imagine how a dishonest President who surrounds himself with a staff that already has 6 convictions with another half-dozen indictments in progress (that we know of) MIGHT have lied about last month and MIGHT be lying about this month too – in order to escape criticism over the shutdown.

Image result for soviet workers paradiseStill, until we can prove it to Fox New's satisfaction, we can keep pretending that America is a magical land where you can furlough 800,000 workers and the economy IMPROVES!  The Soviets used to say Russia was a "Workers Paradise" so often that people actually started to believe it and that is the GOP/Fox strategy – they endlessly repeat their talking points until you begin to forget what the truth actually is – even when you are the one suffering from their lies!  

Now I like living in an Orwellian Dystopia as much as the next prole BUT we are also investors and investors are supposed to want to know what the truth actually is so we can make proper investing decision.  President Trump's Attorney insists that "Truth isn't Truth" where everyone can have their own version of the truth that's just as valid as everyone else's and even a jury of your peers isn't qualified to decide what's true – that's something only the President is allowed to do.

Sure, if you are a Republican and you heard that kind of nonsense coming out of Russia, you'd be outraged and you'd want our country and NATO to intervene and help free the Russian People from the Authoritarian Oligarchs who took over the country, raped it's resources and robbed it's wealth.

However, Trump is your Republican President and he's one of our Oligarchs with a Cabinet of other Oligarchs and the resources they are robbing and the land they are destroying is our land and we don't like NATO anymore, or the UN but we do like Russia and the truth was never the truth anyway… Right?

From 1984 – or is it 2019?

  • “And if all others accepted the lie which the Party imposed—if all records told the same tale—then the lie passed into history and became truth. ‘Who controls the past’ ran the Party slogan, ‘controls the future: who controls the present controls the past.'”
  • “Not merely the validity of experience, but the very existence of external reality was tacitly denied by their philosophy. The heresy of heresies was common sense.”
  •  “Every record has been destroyed or falsified, every book rewritten, every picture has been repainted, every statue and street building has been renamed, every date has been altered. And the process is continuing day by day and minute by minute. History has stopped. Nothing exists except an endless present in which the Party is always right.”
  • Image result for trump 1984
  • “The ideal set up by the Party was something huge, terrible, and glittering—a world of steel and concrete, of monstrous machines and terrifying weapons—a nation of warriors and fanatics, marching forward in perfect unity, all thinking the same thoughts and shouting the same slogans, perpetually working, fighting, triumphing, persecuting—three hundred million people all with the same face.”
  • “Always eyes watching you and the voice enveloping you. Asleep or awake, indoors or out of doors, in the bath or bed—no escape. Nothing was your own except the few cubic centimeters in your skull.”
  • “You had to live—did live, from habit that became instinct—in the assumption that every sound you made was overheard, and, except in darkness, every moment scrutinized.”
  • “What can you do, thought Winston, against the lunatic who is more intelligent than yourself; who gives your arguments a fair hearing and simply persists in his lunacy?”

Image result for trump 1984SOMEHOW, we have to sort through this endless BS and figure out what's happening and, for that, we need to ignore the noise of the short-term data (especially when it can be exaggerated by 50%) and look for EVIDENCE of how things are actually going.  Average Hourly Earnings, for example, slowed to 0.1% growth from last month but are still up 3.1% from last year and, as I said above, that's actually a good thing for the economy, though not so good for Corporations – who have to pay those wages.

The Corporate CPI is up just 2.2% from last year so, as a FACT, the prices they command is losing ground to wages at a 33% pace.  That's going to impact earnings going forward and, with 35% of the S&P reporting Q4, we're already seeing earnings growth slow down to 2.3% with REITs, Materials and Utilities all going negative and no growth from Financials (0.2%) while Energy (6.4%) and Industrials (6.1%) are the biggest stars and both of those sectors can drag on the economy if they demand too much money from the Consumers.  

So the truth is that we have a mixed picture and, despite our Glorious Leader telling us how GREAT he is making America again (the delayed State of the Union will be Tuesday at 9pm with the Orwellian theme of – and I am not joking – "UNITY!"), we will have to look at the data (the data we can trust), and make our own decisions, much like the President is now making his own decisions on our Nation's Security. 

File:Bin Ladin Determined To Strike in US (August 2001).pdfSince Trump didn't like what his own Intelligence and Security Department Heads said about his asinine policies when giving their annual briefing to Trump's own GOP Senate, he has CANCELLED his Daily Intelligence Briefing and will just wing it – much the way George W Bush winged it when he ignored this Briefing on August 6th, 2001, which was titled "Bin Ladin Determined to Strike in the US."  The brief warned, 36 days before the September 11 attacks, of terrorism threats from Osama bin Laden and al-Qaeda, including "patterns of suspicious activity in this country consistent with preparations for a hijacking" of US aircraft.[1]  

Bush didn't even skip that briefing, he just decided his vacation was more important than National Security.  Being the President is an important job (I know, shocker!) and you can't just do it when you feel like it or only when your Department Heads are willing to parrot whatever you want them to.  Sometimes news is unpleasant and sometimes you have to do things you don't want to do for the good of the people and… Oh who am I kidding?  Is there anyone out there still left who thinks Donald J Trump is doing anything for the good of the people?

Image result for putin pawnPutin Puppet is a strong word, but it gets 3,640,000 results in Google while Putin Pawn only gets 760,000 hits.  Putin Pawn lands Trump in the hall of shame, next to George W Bush as, very possibly, the worst President in our country's history while Putin Puppet or Russian Agent, on the other hand, may well land Trump in jail.

Google has the odds running about 5:1 in favor of Putin having a hand right up Trump's ass and pulling the strings to make Trump do and say whatever it is that advances the Russian agenda but we're hoping the Mueller investigation shows that Trump is merely a pawn, just a semi-senile, power-obsessed racist who is being manipulated by the Putin Puppets he surrounds himself with.  

Let's hope for the best!  

Have a great weekend, 

- Phil


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  1. Wonder if we get another tweet today when the Dow crosses over 25,000…. again! S&P is where it was at the beginning of 2018 so one lost year. NYSE and Russell still well below.

  2. Good payroll numbers at 304K but who runs these numbers:

    There were revisions. December’s big initially reported gain of 312,000 was knocked all the way down to 222,000, while November’s rose from 176,000 to 196,000.

    In any case, does the Fed tighten again or do they listen to POTUS who knows more about economics than anyone alive?

  3. Tariffs / Phil – Trump is just so dumb, I know some of it is schtick for the base, but he is truly ignorant. They asked him yesterday about the budget deficits and his answer was that the trade deals had not kicked in yet because he confuses trade deficits and budget deficits or makes a correlation between them. It's so freaking scary the level of ignorance.

  4. And apparently, you can't educate the man or he shuts you down:

    The White House abruptly cancelled President Donald Trump’s daily intelligence briefing with his chiefs Wednesday, a day after CIA Director Gina Haspel and DNI Dan Coats gave Congress a yearly threat assessment during which they contradicted many of Trump’s favorite talking points.

    What a way to run a country – let alone the lone superpower!

  5. Good Morning!

  6. Good morning!

    As you can tell, I was reading too much news and now I'm all angry at Trump again.  Got most of it off my chest…

    25,000 again, nice short play on the cross under with tight stops below (/YM).  Lined up with 2,700 (also playable), 6,875 and 1,495.

    /NG not doing well in anticipation of warming but our fallback is an increase in LNG exports.  Over the longer term.

    ISM was a beat so maybe we'll hold the lines.  Consumer Sentiment is in-line at 91.2.  Construction Spending up 0.8% – all good numbers!  

    It's a good week if the Dow can hold 25,000.  

    Ignorance/StJ – I don't think it's ignorance, just a guy who can't keep his lies straight.  He knows he's taxing the idiots who voted for him but how many guys besides me are saying that?  They just keep repeating the China story over and over again and people forget to question the basic premise as they layer so much other BS on top of it.

    That briefing thing is terrifying – he's literally leaving the country undefended by skipping those things yet god forbid some child crossed the boarder and he'll send in the troops!  

    Image result for trump border children cartoon

  7. Comment content omitted because it is too long.

  8. Now the claim is that Donald Trump Jr was on the phone with NASCAR's Brian France, and not with Donald Trump, while he was on his way into the Trump Tower meeting with the Russians. Seems legit. I always call the head of NASCAR just before I commit treason.

    Just out: The big deal, very mysterious Don jr telephone calls, after the innocent Trump Tower meeting, that the media & Dems said were made to his father (me), were just conclusively found NOT to be made to me. They were made to friends & business associates of Don. Really sad!

    If you think it's exculpatory that when he learned the Kremlin would give his dad stolen Clinton docs Jr. called his dad's best friend—a campaign adviser, member of Trump's inner circle, and man with Russia ties who'd gone with Trump to Russia—you on some level have to be joking.

    2/ Put aside that Don could've *at any point* after Goldstone wrote him talked to his dad *in person* about the news, including the day he got the email. Even *beyond* that, I'd argue that *Lorber* being the call recipient suggests the news penetrated Trump's inner circle *ASAP*.

    3/ I have no idea why any member of the media or Congress is implying even distantly that CNN's report is positive for Trump. It's a disaster. An *exculpatory* call would've been to a random vendor or something, suggesting that Don didn't think the Goldstone news was significant.

    Yes, this stuff is really happening!  



    Crash the market, then act like the bounce is a victory you created – BRILLIANT!  

    Best January for the DOW in over 30 years. We have, by far, the strongest economy in the world!

    A reminder that Greece remains in debt bondage under the Troika's boot. The EuroWorkingGroup (the Troika's lair) decreed that the return to Greece of its own money (ECB profits from trading in Greek bonds) will be withheld unless home evictions and auctions are accelerated.

    Another victory for Russia. The E.U. has accused Russia of violating this treaty which is a centerpiece of arms control since the Cold War, Russia denied it. So Trump is using it as an excuse to withdraw from the INF. Add it to the Paris Climate accord, Iran nuclear deal etc!

    This line, from Trump’s exchange with A.G. Sulzberger, sums up his fixation with the NYT: “I came from Jamaica, Queens, Jamaica Estates, and I became president of the United States. I’m sort of entitled to a great story — just one — from my newspaper.”

    U.S.-backed coups/invasions in Latin America: Guatemala, 1954 Bolivia, 1963 Brazil, 1964 Dominican Republic, 1965 Chile, 1973 Argentina, 1976 El Salvador, 1980s Nicaragua, 1980s Grenada, 1983 Panama, 1989 Haiti, 1991 Venezuela, 2002 Haiti, 2004 Honduras, 2009 Venezuela, 2019

    In honor of Black History Month, we revisited 168 years of New York Times history to provide obituaries for remarkable black men and women who never received them — until now

    That is a fantastic article – lots of interesting people you never heard of.

    Many people have urged those of us in the chattering classes to ignore Howard Schultz. But they're wrong, for two seemingly opposed reasons: there are both sinister and comic aspects to his candidacy, and the latter can be used against the former 1/

    The sinister side: in part, Schultz and other potential billionaire independents are trying to blackmail Democrats into avoiding a progressive economic agenda, even though such an agenda is popular. Brian Beutler made this point the other day 2/ And Ed Luce 3/

    The comic side: Schultz was reportedly shocked by the backlash to his announcement. He evidently suffered from rich man's disease: being surrounded by people who tell him what he wants to hear, with no idea how the other 99.9% thinks 4/

    Great point by Krugman!  

  10. Boeing goes bionic to roll out more Dreamliners

  11. Short /NQ.

  12. GE going up again!

    • General Electric (GE -0.2%) gives back a sliver of yesterday's big gains as J.P. Morgan bear Stephen Tusa remains unconvinced by GE’s results.
    • "We come away from the 4Q scratching our heads at the stock reaction," Tusa writes after shares soared 12% to close above $10 for the first time since November. "We believe one has to make highly optimistic assumptions to get back to a run rate that supports anything near $10."
    • Several Wall Street analysts attributed GE’s stock reaction to stronger than expected $4.5B of industrial free cash flow, but Tusa says the Q4 reading was "temporarily bolstered" and still expects a significant decline in 2019 to ~$2.5B.
    • "Power is worse than even our expectations, with a myriad of costs to fix problems, and, more importantly, service orders that continue to collapse, with management now acknowledging the attrition and price pressure here," Tusa writes.
    • Tusa maintains his Neutral rating on GE and says there is "no change to the math" that supports the firm's $6 stock price target.
    • The Fed seemingly made a big dovish reversal on Wednesday. The FOMC policy statement and Powell press conference could be read as suggesting the next move in rates could be down, and QE4 could even be forthcoming.
    • Two big economic indicators today are saying "not so fast." The January employment report showed 312K jobs added last month, and even a big downward revision to December's print isn't enough to dent the strong monthly trend in job gains. Further, the strong employment market and sustained wage gains (up 3.2% Y/Y) are drawing big numbers of Americans back into the job market, as shown by a sizable rise in the labor force participation rate.
    • Then minutes ago was the ISM report for January, and it too produced a bigger-than-expected advance, with the New Orders sub-index jumping to 58.2 from 51.3.
    • The bond market is giving back this week's gains, the 10-year Treasury yield now up 5.5 basis points to 2.685%.
    • Having posted their best January in decades last month, stocks continue to rally, the S&P 500 up 0.45%.
    • Walmart (NYSE:WMT) is down 2.80% to stand as the leading decliner in the Dow, while Target (NYSE:TGT) is off 3.3% and Costco (NASDAQ:COST) is 2.3% lower.
    • The moves could be tied to today's consumer sentiment report, which came in weaker than at any time since President Trump was elected. It also can't be ignored that Amazon reported disappointed earnings yesterday by its standards and warned on margin pressures.
    • Previously: Amazon turns lower as CFO tackles margin, India on call (Jan. 31)
    • Previously: Amazon reports holiday beats; AWS +46% (Jan. 31)
    • Jan. Consumer Sentiment 91.2 vs. 90.8 consensus and 90.7 prior.
    • Current economic conditions 108.8 vs. 110.0 prior.
    • Index of consumer expectations 79.9 vs. 78.3 prior.
    • Sony (NYSE:SNE) is down 8.1% in morning trading after FQ3 revenue trailed estimates slightly (¥2.4T vs. ¥2.6T) to take the shine off a guidance hike for FY19 profit of ¥835T from ¥705T.
    • Profit in Sony's gaming business fell in FQ3 to ¥73.1B from ¥85.4B a year ago, while a gain booked from the EMI deal boosted music business profit to ¥147B from ¥39.3B a year ago. Overall profit came in at ¥377T vs. ¥384T anticipated.
    • Previously: Sony reports Q3 EPS of ¥330.77 (Feb. 1)

    • Papa John's International (NASDAQ:PZZA) is down 8.1% after Reuters reports that the company is only looking to sell off a slice of itself after acquisition offers from PE firms disappointed.
    • Analysts have called the 30% stake held by ex-CEO John Schnatter a trouble spot for the company in moving forward cleanly.

  13. Stops to entry on /NQ.  Playing very close.

  14. Any thoughts re what's going with SKX?

  15. With you on some /NQ Albo.

  16. Maddie is starting her first job at Subway today.  Thanks to those damned liberals in Mass, she'll be making $12.50/hr – that's their minimum wage…  I told her to teach them to make the sandwiches the right way (meat on the bottom)!

    Image result for homer sandwich animated gif

    SKX/Alter – Down with retail, earnings 2/7.

  17. Phil; thoughts on SNE as a long term trade.  PlayStation is killing them.  Xbox is winning the battle.  Other businesses are doing well.  20201 40 puts for $4.

  18. Good for Maddie !

    Some days I'd like to make $12.50 an hour. 8-)

  19. Sold 1/3 up 22.

  20. SNE/Options – I think it was a great Q considering they swallowed EMI for $2.3Bn.  

    Year End 31st Mar 2013 2014 2015 2016 2017 2018 TTM 2019E 2020E CAGR / Avg
    Revenue ¥m 6,795,504 7,767,266 8,215,880 8,105,712 7,603,250 8,543,982 8,759,722 8,837,193 8,991,262 +4.7%
    Operating Profit ¥m 218,779 24,847 68,548 290,888 281,073 729,905 803,062     +27.2%
    Net Profit ¥m 41,540 -128,369 -125,980 147,791 73,289 490,794 678,519     +63.9%
    EPS Reported ¥ 38.8 -125 -113 117.5 56.9 379.7 523.8     +57.8%
    EPS Normalised ¥ 41.8 -123.9 -113 119.3 104 403.2 526.4 540.1 463.9 +57.3%
    EPS Growth %         -12.8 +287.7 +117.6 +34.0 -14.1  
    PE Ratio x           13.6 10.4 10.1 11.8  
    PEG x           0.40 0.31 n/a 1.52

    110 Yen to the Dollar means $77.7Bn in sales and $4.5Bn in profits and $45.50 is $57.7Bn market cap so reasonably priced and this Q was $3.5Bn in profit but hard to say if that's normalized.  PS4 sales are down, they are close to having to write off their phones.  Playstation is only $670M (20%) of profits so they have diverse earnings and the phones are a negative (-$142M), so taking a one-time hit and giving up would be a positive to me, but maybe not to the stock.  They make cameras for smart-phones and, of course Spider-Man movies (and Venom), that's not getting stale.

    So, on the whole, I'd play SNE like a retailer that isn't going BK but is priced like it is – don't expect great growth but play it to hold $45:

    • Sell 5 2021 $40 puts for $4.30 ($2,150) 
    • Buy 10 2021 $40 calls for $11.50 ($11,500) 
    • Sell 10 2021 $50 calls for $6.50 ($6,500)

    That's net $2,850 on the $10,000 spread so $7,150 (250%) upside potential at $50 and the margin on the short puts is just $2,010 so it's margin-efficient.  

    In fact, for the LTP, let's keep an eye on them and sell 10 of the SNE 2021 $40 puts for $4.30 ($4,300).

    /NG going down and down.

  21. After reading through all the anger of the American politics, I might as well start selling wooden nickels to the American voters. Phil you have to calm down before we lose you on a heart attack!
    If you can tell someone he makes 25% profit when he pays 25% import tax, well then a moron is a very intelligent person.
    Very hard to sell this to me.
    From the trading side, I have taken stock on my trading during Jan. I have been asked before do you make any profit on selling cherry calls?
    When entering this type of play, armchair or tree planting, you need to set up some monthly reports on what you doing.
    I must admit that selling calls mid end of Dec was not the best of decisions. However I still must say I did not do too badly after all.
    On excel I set up some of the following points:
    Options sold during the month plus div received against cost of options rolled during the month.  
    The ration in one of my ports was 5.6 to 1. Meaning for every $ spend on rolling I sold 5.5 $ of  options. This was on the armchair port.
    On the mixed ports the result was 3.3 and 4.1 to 1.
    So even on a bad month I call it a good return.

  22. Hi Yodi – can you pls explain the below a little bit more. I am generally familiar with your and Phil's strategies. On your sold calls, I am assuming they went in the money on the equity rally, so you rolled them a few months out and few strikes higher. By $s spent, do you mean the loss or the margin? By 5.5 $ of options, are you referring to the strike higher? 

    Sorry if this is very obvious to everyone.


    "Meaning for every $ spend on rolling I sold 5.5 $ of  options. This was on the armchair port."

  23. Phil – /NG still dropping.  Any point you'd stop out ?

  24. rs Trade Very simple I received by selling p/c 5,500.00 during the month and I had to spend 1,000.00 on rolling. You right up and out.

  25. Bought /NQ back at 6880. I missed PZZA last time and am adding a little.

  26. Sold another 1/3 of /NG up 45   Moved stops down.

  27. Cherrys/Yodi – We sell them in the Hedge Fund all the time, up about 10% in Jan so a good start to the year.  As you know from the Butterfly Portfolio and the LTP, I'm more apt to not sell calls when a position is low in the channel so we didn't get burned on too many things, fortunately.  CMG is still our Waterloo as we have short $500 calls that haven't calmed down yet or we would have made 15%!  

    I still have faith and our worst case is we DD on the longs and roll our 1/2 covers – much like the LTP position. 

    /NG/Rs – Well, I intend to roll and stick with it through the summer but I was hoping to get a quick move up on the cold, but that seems unlikely now.  Also, I find it hard to believe that this doesn't matter – it's possible they are just spiking out the weak hands before going higher on next week's drawdown:

    |By:, SA News Editor 

    Several utilities are urging customers to cut back on power and gas usetoday during the brutal freeze covering the eastern half of the U.S. after record amounts of natural gas were used for heating yesterday.

    Gas demand in the Lower 48 states surged to a preliminary record high of 145.1B cf/day yesterday, according to financial data provider Refinitiv.

    In Michigan, automakers agreed to interrupt production schedules through Friday after local utility Consumers Energy – a unit of CMS Energy (NYSE:CMS) – made an emergency appeal to curtail gas use so it could manage supplies following a fire at a gas compressor station.

    Consumers says the Ray compressor station in Macomb County is partially back in service but urges its 1.8M Michigan customers to continue their conservation efforts through Friday.

    Also in Michigan, DTE Energy (NYSE:DTE) asked its 2.2M customers to reduce electric use to help safeguard the reliability of the regional grid.

    Public Service Enterprise Group (NYSE:PEG) says it shut one unit at its Salem nuclear plant in New Jersey after intake screens froze over, restricting the flow of water needed to cool the reactor.

    PJM, the electric grid operator for all or parts of 13 states from New Jersey to Illinois, says there were no reliability issues and power demand already peaked on Thursday below 140K MW, well below the PJM region’s all-time winter peak of 143,338 MW set on Feb. 20, 2015.


    • The total U.S. rig count falls by 14 to 1,045 in the latest weekly survey from Baker Hughes, after rising by 9 last week and tumbling by 25 two week ago.
    • The count of active oil drilling rigs in the U.S. fell by 15 to 847 following last week's gain of 10, and gas rigs added 1 to 198.
    • WTI crude oil adds to gains following the release, now +2.6% to $55.20/bbl.
    • Chesapeake Energy (NYSE:CHK) says it completed its $4B acquisition of WildHorse Resource Development (NYSE:WRD) after shareholders of the two companies approved the deal yesterday.
    • CHK shareholders also approved an increase in authorized common shares to 3M from 2M.
    • CHK says the WildHorse addition "provides another oil growth engine with significant oil inventory for years to come and gives us tremendous flexibility and optionality to help achieve our strategic goals."

    Last Feb was a very rough ride but worth it to hang on if you are looking to accumulate (and can ride out the short-term losses).  It was also much warmer last Feb and by March it felt like summer.  

    • U.S. stock average pare gains or dip back into the red in early afternoon trading as earlier enthusiasm from strong jobs and manufacturing reports fade.
    • S&P 500 is up only 0.2% vs. a 0.5% increase earlier; Nasdaq slips into the red (-0.1%) after bobbing up into the green a couple times this morning; Dow +0.5%, vs. its earlier 0.8% gain.
    • With oil rising 2.1% to $54.93 per barrel, the energy sector (+2.1%) leads the gains, followed by information technology (0.7%).
    • The biggest underperformers are real estate (-1.5%) and consumer discretionary (-1.4%).
    • Notable individual names moving: Exxon Mobil (+3.6%), Chevron (+3.9%), Visa (+3.7%),  Intel (+2.9%), Amazon (-4.2%), Walmart (-2.4%), and Microsoft (-1.2%).
    • 10-year Treasury yield rises 6 basis points to 2.69%.
    • Dollar Index nudges down 0.1% to 95.50.
    • The Federal Reserve did the right thing by maintaining interest rates at current levels and should keep them on hold for months to assess risks, says Dallas Federal Reserve President Robert Kaplan.
    • Muted inflation should allow the Fed to be "patient" on policy decisions, he said.
    • Kaplan said he started noticing risks in financial markets and in global weakness in October, Reuters reports.
    • "My position did not abruptly change," he said.
    • Kaplan isn't a voting member of the monetary policy-setting Federal Open Market Committee this year.
    • Previously: The Fed maintains fed funds rate at 2.25%-2.50% (Jan. 30)

    • Nissan (OTCPK:NSANY) unit sales -18.5% to 100,741 units vs. -15.2% forecast by Edmunds.
    • Nissan truck sales contracted  13.2% Y/Y to 60,556 units.
    • Nissan car sales declined 25.3% to 40,185 units.
    • Sales growth by brand: Nissan -19.9% to 90,439 units; Infiniti -3.1% to 10,302 units.
    • Rogue sales fell 27.8% to 26,113 units during the month.
    • Sentra down 20.5% to 14,088 units.
    • Porsche (OTCPK:POAHY) unit sales rose 12.5% to 5,419 units in January.
    • 911 sales up 29.1% to 1,101 units.
    • 718 sales down 36.6% to 263 units
    • Cayenne sales expanded 65.1% to 2,150 units.
    • Panamera sales decreased 20.2% to 487 units.
    • Macan sales dropped 13.3% to 1,418 units.
    • Hyundai (OTCPK:HYMLF) reports U.S. sales rose 3% in January to 40,796 units.
    • Hyundai sold 21,007 SUVs, representing 51% of the total sales volume.
    • Volume leaders during the month were the Elantra (9,942 units), Santa Fe (7,832 units) and Tucson (7,444 units).
    • "We are pleased with Hyundai's start to 2019 as we hit our January objectives, following a record-breaking December and several challenges outside of our control," said John Cook, director, Sales Operations, Hyundai Motor America. "We've also started the year with many positives as Hyundai won several prestigious industry recognitions, including Utility Vehicle of the Year and Car and Driver 10Best for Kona and Kona EV."
    • Toyota (TM -0.7%) unit sales -6.6% to 156,021 units vs. -2.4% forecast by Edmunds.
    • Toyota division sales fell 7.1% to 138,601 units.
    • Lexus division sales declined 2.8% to 17,420 units.
    • Total YARIS sales decreased 42.6% to 1,323 units.
    • Total Corolla sales expanded 17.3% to 25,113 units.
    • Camry sales -3.4% to 23,802.
    • Prius sales squeezed 57% for the month.
    • On the SUV front, RAV4 sales -8.1%, while Highlander sales -6.9% and Land Cruiser -55.3%.

    • A study just published in the New England Journal of Medicine demonstrated that tobacco smokers desiring to quit who switched to e-cigarettes experienced a higher one-year abstinence rate compared to those who used nicotine-replacement products when both were accompanied by behavioral support.
    • The study, conducted in Britain, randomized 886 participants who were attending stop-smoking services provided by the National Health Service (NHS). One group elected to receive nicotine-replacement products of their choice, including combinations, provided for up to three months or an e-cig starter pack (second-generation e-cig with one bottle of nicotine e-liquid [18 mg/mL]) with a recommendation to buy additional e-liquids of the flavor and strength of their choice.
    • The one-year abstinence rate was 18% in the e-cig cohort versus 9.9% in the nicotine-replacement group (p<0.001). A much larger proportion (80%) of the e-cig abstinence group (n=63/79) was using the assigned product at week 52 than the other (9%; n=4/44).
    • On the safety front, more e-cig users (65%) experienced throat or mouth irritation than the nicotine-replacement product users (51%) while the rate of nausea was more consistent (38% vs. 31%, respectively) as was the reduction in cough and phlegm production from baseline (0.8 vs. 0.7, respectively). There were no significant differences in the rates of wheezing or shortness of breath.
    • There were 27 serious adverse events in the e-cig group compared to 22 in the nicotine-replacement product group, none related to the products.
    • Participants viewed both e-cigs and nicotine-replacement products as less satisfying than smoking tobacco, but e-cig users experienced less severe urges to smoke.

    Variety: CBS close to sell-out of Super Bowl ads

    • In the 11th hour, CBS is nearing a sell-out of Super Bowl commercial inventory ahead of Sunday's game, Variety reports.
    • The network has deals for the last few slots but needs to secure NFL approvals for the sponsors, according to the report.
    • CBS has been seeking $5.1M-$5.3M for a package that includes a 30-second spot on the linear broadcast as well as some digital inventory, Variety says.
    • NBC's 2018 Super Bowl Broadcast drew $482M in commercials. CBS has been fighting headwinds this year, including declining interest from automakers and movie studios, but may be getting saved by technology/telecom companies including, Google, T-Mobile, Microsoft and Sprint.

  28. There goes 25,000 – again….

  29. Closed out last 1/3 of /NG at 6865.  May be leaving money on the table, but I'm GFD.

  30. Venezuela Voices: ‘We Are Starving Here’

  31. Phil do you like NLY for a new trade here?

  32. Sold the VXXB Jun 80 calls for $2.50 on Jan 4, offering to buy them back for 0.15 today for 94% win in less than 30 days. I am actually being more aggressive in my sales, higher delta because as opposed to VXX, VXXB now has room to roll. Not selling anything today because VXXB is down (a day to buy back and clear up margin for more premium sales) but I would look at June 50 if they were to hit $2.50 on a up day because I can roll them to the September 60 or the January 80.

  33. NLY/Coulter – I always like them but they don't have very good options to sell – especially with the lower VIX.  As a new position, I'd buy it $10.39 and sell the 2021 $10 puts for $1.52 and sell the 2020 $8 calls for $2.80 so that's net $6.07 so called away at $8 is just fine (plus the dividends) or, if assigned, the average would be $8.04 and then sell more puts and more calls for 2023.  Just makes sure you are going to be THRILLED to be assigned 2x at $8.04 avg and THRILLED to sell 2023 $8 puts and calls to drop your basis to $6/7ish on 4x.  

    VXX/StJ – A little in-between at the moment.

    Well that was an exciting way to end up flat but good progress for the week.

    Nas held up very well against AMZN sell-off.

    Have a great weekend, 

    - Phil

  34. VXXB / Phil – Ideally we would have VIX spikes to 30 each month to sell these calls, but in the meantime, we do what we can. Sell on up days and buy back the cheap ones on down days. Rinse and repeat… My goal this year is 10% portfolio return just with VXXB using probably less than 20% of margin! And see what happens!

  35. Stjeanluc.  Your VXXB plan is interesting.  One question, what will be your plan for handling a big down move and the VXXB jumps up to 50.  You would be short VXXB so loss and margin use would skyrocket on that type of jump.  I believe we would all say that high VXXB levels are probably for brief periods of time.  Would you just maintain your position or would you short again at the high levels?  Also, what is the difference in VXXB verses VIX options.  I have not had good luck with VIX options so I am very interested in your explanation.  Couldn't you use this same strategy on VX futures with similar results?  Stjeanluc, thanks in advance for the explanation.  I am very interested to here your thoughts.  

  36. Russia to pull plug on nuclear arms pact after US does same

  37. Afghan official says rapid US withdrawal would bring ‘bloodshed’

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  39. Dollar Vortex Puts Chill on Earnings That May Worsen in Spring

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  42. Schumer and Sanders: Limit Corporate Stock Buybacks

  43. Good morning!

    I have a couple of meetings, will be in and out today.  

    Not to much going on.  /NGH19 even lower today, $2.715 on reports warming weather is coming   Even July (/NGN19) dropped to $2.79 but /NGV19 (Oct) is better now at $2.80 so that's where I'm rolling.

    Not much happened over the weekend and we're pretty flat.  Oil is testing $55 from above with Brent at $62.50 so if either fail we can short /CL with tight stops back above (on the one that fails first) and /RB just failed $1.46 So I think they are all coming down a bit.

    Dollar is up 0.5% but Gold and Silver got whacked.

    JPMorgan Says 2020 'Might Not Be Year to Think About Recession'.

    Small Businesses Are Waving the Caution Flag.

    Venezuela's Self-Declared President Reaches Out To China As Trump Repeats Military Force Is "An Option".

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