Archive for July, 2019

These Are The Fattest States In The US

Courtesy of ZeroHedge. View original post here.

Obesity has been on the rise over the past decade across the US, despite the advent of Instagram, "athleisure" and boutique fitness classes. According to data from the CDCP, obesity has risen "significantly" in the past decade, with more than one in three American adults now qualifying as obese.

Another study from ConsumerProtect cited by MarketWatch looks at this trend in greater detail, breaking down the most and least, obese states in the country.

So, which state has the worst obesity problem? that would be West Virginia, where 38.1% of adults are obese. WVa. also has the highest diabetes rate in the country, and ranks poorly on other health metrics that often accompany obesity.

I second place is Mississippi, with 37.3% of its population qualifying for that label.

There are a long list of accompanying factors that include the lowest life expectancy, the second lowest level of people who report engaging in no exercise and the highest rate of people who eat less than one piece of fruit a day.

On the other end of the spectrum is Colorado, which has the lowest level of obesity in the country, at less than 23%: "The proximity to beautiful outdoors and better eating habits in Colorado result in the lowest BMI scores in the country among its citizens. Hawaii, the state with the highest life span in the country, has the third lowest obesity rate in the country. On average, people in Hawaii live 6.5 years longer than those in Mississippi," ConsumerProtect said.

One thing that’s important to remember is that obesity comes with costs both to the individual, and to society at large. 

Obese people shoulder medical costs that are $1,400 per year than people of average wait. Another estimate put that number at about $2,700.

Obese people generally earn less than their more svelte friends.

Already, the societal costs of obesity are extremely high: "Treating obesity and obesity-related conditions costs billions of dollars a year. By one estimate, the US spent $190 billion on obesity-related health care expenses in 2005 – double previous estimates."

What's the solution? Since diets have proven largely ineffective in terms of a long-tern solution, Harvard's School of Public Health recommends that "prevention is key."





Yet Another Freight Company Unexpectedly Ceases Operations And Closes Its Doors

Courtesy of ZeroHedge

Yet another trucking company has fallen victim to the recession in freight this year, according to FreightWaves. Terrill Transportation of Livermore, California shut its doors unexpectedly on July 30. The company had been in business 25 years. 

Customer Manny Bhandal, president of Bhandal Bros. Inc., said that three of his trucks arrived at Terrill on July 30 to drop off a shipment and were turned away. Kevin Terrill, president of Terrill Transportation, did not respond to FreightWaves. 

“This year has been very tough on a lot of companies,” he continued.

A chief executive of another trucking company based in the Northwest called Kevin Terrill, who confirmed the news over the phone. 

“He [Kevin] said rate concessions on both the trucking and warehousing side, driver wages being up and the tough environment to do business in California were to blame for the closure,” the anonymous executive said. 

Terrill had 30 trucks and 36 company drivers, in addition to 12 owner-operators. This closure marks the seventh freight company to shut down in 2019 alone, after NEMF, Falcon, Williams Trucking of Dothan, Alabama, and Indiana-based A.L.A. and Starlite Trucking and LME.

Recall, over the last month, we wrote about two other trucking companies that unexpectedly closed their doors due to the freight recession.

In mid July we announced that 40 year old California trucking outlet Timmerman Starlite Trucking, Inc. was the latest victim in the "trucking apocalypse" and announced that it would be shutting down effective immediately. 

Just days prior to that, we documented that regional truck carrier LME "suddenly and abruptly" shut its doors. 

The company was a regional carrier based in Minnesota that operated throughout the Midwest. The company had terminals in 30 locations across the U.S. and through interline agreements services all of North America. It also worked with major companies like 3M, John Deere and Toro. 

The company reportedly included "over 600 men and women" and has been listed as having 382 power units and 1,228 trailers, with 424 truck drivers. 





Trump Slams Fed After Market Meltdown: “As Usual, Powell Let Us Down”

Courtesy of ZeroHedge. View original post here.

Update (1645ET): Well that didn't take long. We noted previously that Trump demanded a rate-cut – gets one but the dollar soars and stocks tank – who will be blamed for that?

And now the President has responded by slamming Powell who "let us down", telling his followers that the market wanted to hear that "this was the beginning of a lengthy and aggressive rate-cutting cycle which would keep pace with China, The European Union and other countries around the world."

As @Hipster_Trader pointed out so correctly, "Best economy ever needs lengthy and aggressive rate-cutting cycle…"?

*  *  *

Powell over-promised and under-delivered to a market that will "take a mile when given an inch"…

His comment about an ‘adjustment’ probably means that those looking for an aggressive easing cycle over the next six to nine months are not going to see it. What it means is that there was a divergence between what investors were saying and what they were pricing in.

Investors wanted Powell to say that he’s cutting, but they really wanted to see the Fed embarking on a rate-cutting cycle. The consensus belief on what the Fed would do was correct. It’s just that the markets pricing in an aggressive cycle of rate cuts were way off.” – Matt Maley, equity strategist at Miller Tabak + Co.

“The catalyst for sell-on-the-news was that phrase. He made it explicit — basically, that’s what that phrase means. An insurance cut implied


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One And Done? A Stunned Wall Street Reacts To Powell

Courtesy of ZeroHedge. View original post here.

If one had to summarize Powell's press conference, in which he was so dazed and confused after facing a barrage of questions forcing him to explain just why he is cutting rates now when in the Fed's own words the US economy is doing great and "confidence is rebounding", and just what a mere 25bps "insurance" cut will achieve that it was painfully uncomfortable to watch, it was with the following two quotes:

  • POWELL: THIS ISN'T THE START OF A LONG SERIES OF RATE CUTS

… but

  • POWELL: I DIDN'T SAY IT'S JUST ONE RATE CUT

And as markets shook, stunned by Powell's revelation that today's rate cut was just a "mid-cycle adjustment", with the Dow Jones plunging briefly by over 400 points as hopes for an easing cycle were promptly dashed, Wall Street analysts sent out their hot takes of what Powell just did and said. Courtesy of Bloomberg here are some of the most notable responses, besides today's winner from Chris Rupkey of course:

Delores Rubin, a senior equity trader at Deutsche Bank Wealth Management

“The market was fine with the statement, but as seems to be the case, the press conference reveals details that do not sit well with the market. The response that this is a mid-cycle adjustment and not part of a longer term accommodative stance has raised concerns. The market has really talked itself into a need for lower rates. Obviously the FOMC still feels strongly the economy is resilient.”

Zhiwei Ren, Penn Mutual Asset Management portfolio manager.

“The market pricing is for 3 more cuts for the next one year. He is pushing back that market pricing. He says this is a mid-cycle rate cut, which means it is 1-2 cuts and done…he is not giving the market what it wants — three cuts for next year. He basically said ‘At the beginning of the year, we were pricing a few hikes and turned patient — no rate hike, no cut — and now we’re cutting 25 bps. We think that’s accommodative enough.’ he didn’t say they need to cut more. That’s a big surprise to me and the market.”


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Stocks, Yield Curve Collapse As Powell Signals “Not Start Of Easing Cycle”

Courtesy of ZeroHedge. View original post here.

Well that upset the market…

Given the market's expectations for 4 rate cuts and more if it really wants, Fed Chair Powell just stole the jam out of the market's donut by saying this was a "mid-cycle adjustment" confirming that this is "not the start of an easing cycle."

Stocks tumbled….

This presser marks the 10th time out of 12 that S&P has dropped during Powell presser. Not a great record. 

And the yield curve crashed…

And the dollar surged to its highest since My 2017…

Stocks down and dollar up - Trump won't be happy!!





Chief Economist Loses It After Historic Rate Cut, Slams Fed In Epic Rant

Courtesy of ZeroHedge. View original post here.

The following epic rant from MUFG chief economist Chris Rupkey hardly needs any commentary, as it is about as close to a perfect reaction to the idiocy unleashed by the Poiwell Fed as can get.

Congratulations to all of you down in Washington who have lowered the boom on interest rates today. We guess you must be feeling pretty proud of yourselves. US central bank policymakers have learned nothing from the experience of low interest rates in Japan or Europe. The economies of Japan and Europe aren't going up like a rocket ship and it is doubtful economic growth will see any greater liftoff here in the good old USA.

Go ahead and eliminate interest rates. Wall Street is already eliminating thousands of jobs in sales and trading and more rate cuts mean reduced margins and less volatility and thousands more will be told to go. Hedge interest rate risk. What interest rates?

Countries with low rates have economies with low growth. The Fed's decision today is like in the days when doctors bled their patients to heal them. Fed officials made a very unwise decision today and buckled to the president's demands by manufacturing reasons to cut interest rates despite a strong economy with no recession signs apparent anywhere out on the horizon.

The stock market may be partying today, but it will wake up with a huge hangover tomorrow as the Fed alters the way the country saves and spends and borrows and invests forever. I think they are probably proud of themselves, but they should really be more ashamed.

The Federal Reserve threw away their independence today and with each future rate cut they will gradually eliminate their relevance to the economy forever.

What can one possibly add to this: he is 100% correct.





“Policy Error”? Yield Curve Flattens Dramatically, Stocks Slide After Fed Rate Cut

Courtesy of ZeroHedge. View original post here.

The market is not exactly screaming its excitement at The Fed's rate-cut, especially bank stocks…

The market is still demanding 1.5 more rate-cuts by year-end…

Bonds (at the long-end) are rallying, along with the dollar and gold very marginally…

The long-end is rallying hard…

As the short-end sees yields rise…

With the yield curve flattening dramatically…

And stocks are down…

Get back to work Mr. Powell





Watch: Fed Chair Powell Explain Why He’s Cutting Rates At Record High Stocks & Record Low Unemployment

Courtesy of ZeroHedge. View original post here.

You've got some 'splaining to do…

The Fed cut rates at record high stocks and near-record low unemployment…

Oh, and don't try and use the scareflation narrative…

Or was this it?

Watch live…





If The Fed Does Surprise The Market, This Is How To Trade It

Courtesy of ZeroHedge. View original post here.

While the overarching consensus is that in 10 minutes the Fed will announce a 25bps rate cut, markets are discounting a non-trivial probability of the Fed cutting 50bps (i.e., the market is currently pricing in a ~20% probability that Fed Funds will be below 2% following the FOMC meeting with spot being currently at 2.4%). As such, if consensus is right, the FOMC meeting could surprise markets, making the case for owning gamma ahead of the meeting.

But how does the "Fed premium" embedded in option market prices compare across asset classes ahead of the meeting? And how does it compare vs. recent market-moving Fed announcements?

An analysis conducted by BofA's derivatives team led by Benjamin Bowler looking at a pool of 45 ETFs with liquid option markets across five asset classes, reveals the 'Fed premium' from the relative pricing of ATM straddles expiring on 2-Aug (shortly after the meeting) and on 9-Aug. ETFs where the 2-Aug straddles look expensive vs. 9-Aug reflect markets that are pricing in a larger FOMC-related move.

The bank then looked at the average vol-adjusted 1-day moves on 1-May-19 and 19-Jun-19, when markets reacted following Powell's press conferences.

From this analysis, BOfA draws the following conclusions:

  • Options on high-yield bond ETFs (HYG and JNK) have baked in the richest Fed premium. However, this appears to be warranted, given that they also recorded the largest moves on 1-May-19 and 19-Jun-19.
  • Options on 'safe haven' assets (IEF, TLT, GLD) are all pricing in large moves (relative to other ETFs). However, BofA notes that while TLT barely moved on 1-May-19 and 19-Jun-19, gold recorded a sizable move on both days (as did IEF), and its Fed gamma is still cheaper today than IEF. As such, BofA would have a preference for owning gamma on the yellow metal rather than on Treasuries.
  • RV opportunities: the Bank also finds a number of RV trading opportunities among pairs that traditionally are highly correlated but where Fed premium have diverged significantly today. For instance, the Fed premium is relatively large/small on EEM (EM equity)/FXI (China equity), GLD (Gold)/GDX (Gold Miners), and USO (WTI)/XOP (Oil&Gas


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Your Last Minute FOMC Preview: Here Is What The Fed Will Say Today

Courtesy of ZeroHedge. View original post here.

The FOMC will almost certainly cut the funds rate by 25bps to 2.00-2.25% today at 2pm. Whereas banks such as Goldman, BofA and Deutsche Bank expect a 25bp move – because virtually all of the signals from the committee point that way – there are several outliers, such as Morgan Stanley who are expecting the Fed to cut 50bps.

While the Fed leadership hasn’t taken a public position but seems to support 25bp privately, based on an article in the Wall Street Journal and an unusual statement by the New York Fed indicating that a (dovish) speech by President Williams was not a signal about the upcoming meeting. Other FOMC members are mainly debating whether to cut rates at all, with little overt support for 50bp. With that said, we cannot entirely rule out a 50bp move (for reasons listed yesterday).

Markets are currently priced for 30bp of easing, and this number could grow further on any significant disappointments in the economic data or adverse trade news before July 31. If so, the committee might be unwilling to deliver a large hawkish shock, given their apparent focus on bond market pricing.

So with that big picture out of the way, here is a snapshot of what Wall Street expects, courtesy of RanSquawk:

RATES:

The base case is a rate cut of 25bps, lowering the federal funds rate target to 2.00-2.25%, with the FOMC justifying the move as “insurance” to prolong US economic expansion amid global growth and trade uncertainties which continue to weigh on its outlook. Money markets still assign a negligible risk for a 50bps move, though it seems to lack widespread consensus among policymakers, particularly amid upside surprises in some key domestic data.

SIZE OF CUT:

The recent dovish remarks by Fed Vice Chair Richard Clarida and FOMC Vice Chair John Williams boosted expectations of a 50bps move, though pricing pared as the NY Fed walked back comments made by the latter, and analysts interpret the former as an argument for sooner rate cuts before data deteriorates, rather than aggressive rate cuts. A recent report said Fed officials were not prepared to cut by 50bps as recent economic developments were yet to signal an imminent downturn, sources told the WSJ, though these sources did suggest that the Fed could lay out potential…
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Zero Hedge

Brexit: The Endgame?

Courtesy of ZeroHedge View original post here.

With parliament suspended and the UK's EU withdrawal process in enforced stasis, the next major stop on the Brexit road map is the EU summit in Brussels on 17 and 18 October. As we have become accustomed, no one knows what will happen now.

This flowchart though, based on analysis by The Independent's John Rentoul, runs through the most likely scenarios, starting first with the question of whether the meeting bears fruit in the form of a new Brexit deal.

...



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Phil's Favorites

Wall Street is ignoring the omens of recession - here's why

 

Wall Street is ignoring the omens of recession – here's why

Why is this man smiling? AP Photo/Richard Drew

Courtesy of Jay L. Zagorsky, Boston University

The world is on the brink of a recession, if all the breathless headlines are to be...



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Kimble Charting Solutions

Crude Oil Create A Panic Peak This Week?

Courtesy of Chris Kimble

Yesterday Crude Oil rallied nearly 15%. How often does Crude rally this much in a day? Not often!

How many times has Crude rallied nearly 15% in the past 20-years? Only one other time, which suggests that yesterdays move was a rare event.

This chart looks at Crude Oil on a weekly basis over the past 2-years. Last year Crude Oil created a bearish reversal pattern at the 2018 highs and a bullish reversal pattern at the 2018 lows.

Earlier this year, Crude created a bearish reversal pattern (bearish wick pattern), while testing its 61% retracement level of last years hig...



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The Technical Traders

VIX To Begin A New Uptrend and What it Means

Courtesy of Technical Traders

The news of the drone attack on Saudi Arabia over the weekend prompted a big upside move in Oil (over 10%) and a moderate downside rotation in the US major indexes/stock market.  Although prices had recovered slightly by the opening bell on Monday, September 16, the shock wave resulting from this disruption in oil supply is just now starting to play out.

The long term uncertainty in the markets, as well as the rotation in the US Dollar and other foreign currencies, could play a bigger role in the type of volatility and extend of the immediate price rotation that may result from this external news event.  Our VIX predictions and ADL predictive modeling system are suggesting volatility wi...



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Insider Scoop

3 Takeaways From SeaWorld CEO's Surprise Resignation

Courtesy of Benzinga

SeaWorld Entertainment Inc (NYSE: SEAS) announced Monday evening that Gustavo Antorcha resigned as CEO and board member due to a "difference of approach."

What Happened

Antorcha's resignation will be effective immediately and he will be replaced with CFO Marc ...



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Lee's Free Thinking

Is The Drone Strike a Black Swan?

Courtesy of Lee Adler

Pundits are calling yesterday’s drone strke a “black swan.” Can a drone strike on a Saudi oil facility, be a “black swan.”

According to Investopedia:

A black swan is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences. Black swan events are characterized by their extreme rarity, their severe impact, and the practice of explaining widespread failure to predict them as simple folly in hindsight.

I seriously doubt that no one expected or could have predicted a drone strike on a Saudi oil facility.

Call Me A B...

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Chart School

Crude Oil Cycle Bottom aligns with Saudi Oil Attack

Courtesy of Read the Ticker

Do the cycles know? Funny how cycle lows attract the need for higher prices, no matter what the news is!

These are the questions before markets on on Monday 16th Aug 2019:

1) A much higher oil price in quick time can not be tolerated by the consumer, as it gives birth to much higher inflation and a tax on the average Joe disposable income. This is recessionary pressure.

2) With (1) above the real issue will be the higher interest rate and US dollar effect on the SP500 near all time highs.

3) A moderately higher oil price is likely to be absorbed and be bullish as it creates income for struggling energy companies and the inflation shock may be muted. 

We shall see. 

...

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Digital Currencies

China Crypto Miners Wiped Out By Flood; Bitcoin Hash Rate Hits ATHs

Courtesy of ZeroHedge View original post here.

Last week, a devastating rainstorm in China's Sichuan province triggered mudslides, forcing local hydropower plants and cryptocurrency miners to halt operations, reported CoinDesk.

Torrential rains flooded some parts of Sichuan's mountainous Aba prefecture last Monday, with mudslides seen across 17 counties in the area, according to local government posts on Weibo. 

One of the worst-hit areas was Wenchuan county, ...



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Biotech

The Big Pharma Takeover of Medical Cannabis

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

 

The Big Pharma Takeover of Medical Cannabis

Courtesy of  , Visual Capitalist

The Big Pharma Takeover of Medical Cannabis

As evidence of cannabis’ many benefits mounts, so does the interest from the global pharmaceutical industry, known as Big Pharma. The entrance of such behemoths will radically transform the cannabis industry—once heavily stigmatized, it is now a potentially game-changing source of growth for countless co...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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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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