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Thursday Thrills – Key Earnings Reports Bring the Bulls Back

ImageTesla (TSLA) made money!  

Sure it was only $143M but it was enough to send the stock $8Bn higher in after hours trading, giving Elon Musk a 56x return on his book-cooking.  Well, maybe it's legitimate – who can say these days.  We sold short puts and calls in our Hedge Fund and $300 is right at the edge of our comfort zone on the calls – though we'll clean up on the puts – but now we'll have to see how it goes.  

Still, my short bias aside, $300 for TSLA is $46Bn in market cap and they lost $1.1Bn in the first half so add $143M and now they've "only" lost $957M for the year and that's still "so far" as there's no actual evidence they can put together two consecutive quarters of profit.  In fact, Revenues were down a bit but "cost cutting" led to a profit anyway – not necessarily account manipulation.

CapEx fell from $510M to $250M, for instance despite opening the China factory and ramping up production on the Model 3 and preparing for the Model Y – all things Musk claims to have accomplished without spending any money.  TSLA does now say they have $5.3Bn in cash on hand, so it would make no sense at all if they go out to raise money – there was $383M in positive cash flow, in fact.

Tesla benefited by recognizing deferred revenue — money that had been set aside because it came from customer payments for features not yet activated, such as aspects of the Autopilot system. Autopilot uses radar and cameras to drive Tesla cars with little input from drivers. In September, Tesla activated the Smart Summon feature, allowing the company to recognize some deferred revenue in the third quarter – despite many saying the feature was nowhere near ready to roll out.

Image

Tesla sold 97,000 cars in Q3 and are now guidling 360,000 for the year, at the lowest end of their 360,000-400,000 range they have been promising all year.  Also, the mix of cars has shifted to a vast majority of Model 3s, accounting for 79,600 (79%) of the 97,000.  Since the Model 3s start at $39,500 vs $80,000 for the Model S – it's hard to imagine this being good for long-term margins – especially with the $1,875 Federal Tax Credits about to expire (12/31) – adding 5% to the net price of the Model 3.

I don't know that TLSA will ever grow into its $45Bn valuation – it's $10Bn more then Ford (F) or GM (GM) and it's 422 TIMES the PROJECTED 2020 earnings so we're pretty comfortable with our short $300 calls and, of course, we're going to quickly buy back the short puts – just in case the stock flies back to $270 and we can sell some more $220 puts!

Otherwise, Microsoft (MSFT) knocked it out of the park but we had a TERRIBLE Durable Goods Report (-1.1%) and that's not a good economic signal at all.  

Be careful out there!

 


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  1. Shorting stocks like TSLA is now like shorting AMZN in the old days! All they need to do is to have one positive quarter among 10 negative ones to have bulls off to the races! Who knows if these numbers can be replicated, but the market is reacting like this is the new TSLA normal – profits as far as the eyes can see. I don't have a dog in that fight but this is symptomatic of this market.


  2. More WeWork comments:

    https://www.bloomberg.com/opinion/articles/2019-10-23/how-do-you-like-we-now

    Adam Neumann created a company that destroyed value at a blistering pace and nonetheless extracted a billion dollars for himself. He lit $10 billion of SoftBank’s money on fire and then went back to them and demanded a 10% commission.


  3. Good morning, All!

    The webinar replay is now up!

    https://youtu.be/2OU2N5IdUTA


  4. Zuck will need to up his game if he wants to defend against breaking up Facebook. That was pretty pathetic yesterday. 


  5. Who needs clean air:

    https://www.vox.com/future-perfect/2019/10/24/20927103/air-pollution-study-deaths-elderly-obama-trump

    Air pollution is killing more people during the Trump administration than it was under President Obama. Air pollution was responsible for 9,700 more deaths in 2018 than it was in 2016, according to a new paper by economists at Carnegie Mellon.

    The researchers, Karen Clay and Nicholas Muller, argue that some of the increase is due to non-regulatory factors, like an increase in wildfires and economic growth. But they note a decline in Clean Air Act enforcement under Donald Trump that could be responsible as well.




  6. Good Morning!


  7. F down 4.5% yesterday on that soft guidance especially around China sales! Might hear China a lot during earnings.


  8. Good morning!  

    TSLA hovering just under $300 which is still up 17.5% so WOW! on that one.  Despite our conservative spread in the Hedge Fund, it's still a lot of margin waiting for these to burn out now.  Fortunately, we were mainly in CASH!!! and not looking to add too many trades – which is why we didn't mind the short spread anyway. 

    If you are adventurous, I kind of like the TSLA Nov $320 ($25)/290 ($9.40) bear put spread for $15.60, selling the $320 calls for $5.75 brings it down to net $9.85 on the $30 spread that's $20 in the money but it's dangerous as some friendly analysts may jump in with upgrades. 

    AAPL/Saguaro – You have 200 shares of AAPL at $243 ($48,600) and you sold Dec $210 calls for $8.16, now $34.50 and you sold Jan $225 calls for $10.12, now $23 and some Jan $200 short puts for $5.84 and June 2021 $165 short puts  $12.30 that will expire worthless but what was the point of that lame sale?  

    What I would do is buy back the short puts for $5,750 and cash in the stock for $48,600 and buy back the short puts for $898 so you have $41,952 in your pocket and then, since you are willing to own AAPL for $200, there's no reason at all not to take the following:

    • Sell 2 AAPL 2022 $200 puts for $17.50 ($3,500) 
    • Buy 5 AAPL 2022 $220 calls for $50 ($25,000) 
    • Sell 5 AAPL 2022 $280 calls for $24 ($12,000) 
    • Sell 2 AAPL April $250 calls for $12.50 ($2,500) 

    That's net $7,000 on the $30,000 spread so you have $23,000 (328%) of upside but still have $34,952 in your pocket.  The worst downside case is you end up being assigned 200 shares again at $200 ($40,000), most of which is in your pocket anyway.  On the upside, you are using 176 of the 820 days you have to sell so possibly you can make another $10,000 selling calls each quarter and, of course, plenty of time to roll them if AAPL goes up faster than expected.  

    I'm highlighting this as it's good for a new trade for anyone who like making 328% in 820 days!

    Oops, indexes turning down on poor data.  


  9. Phil – a discussion from last night after the close; would be enriched by your comments:

    edro00
    October 23rd, 2019 at 7:36 pm | Permalink | Tweet thisIgnore this user

    Winston – Deep InTheMoney BCS

    Consider rolling your deep in the money BCS to a butterfly at the same expiration.

    Keep your long call

    Determine the 2x strike that covers your short call position, add a new long call at the strike that is the difference between your long call and your new 2x strike added to your 2x strike

    Roll the short calls to the 2x position

    You will find the butterfly pays a lot more and doesn't go negative

    palotay
    October 23rd, 2019 at 9:57 pm | Permalink | Tweet thisIgnore this user

    Edro, can you explain why they don't go negative?  

    jmd__
    October 23rd, 2019 at 10:08 pm | Permalink | Tweet thisIgnore this user

    euro00

    Can you provide an example/illustration?

    edro00
    October 23rd, 2019 at 10:43 pm | Permalink | Tweet thisIgnore this user

    I will continue this discussion tomorrow, perhaps someone has a deep in the money 2021 BCS they would like to improve, I'll try to use it as an example.

    Winston
    October 24th, 2019 at 12:07 am | Permalink | Tweet thisIgnore this user

    edro00 / thanks for a thought provoking idea. I'll go first with my understanding on a current trade I am in:

    AAPL Jun 2021 $180 long call ($72) / $220 short call ($44).

    The 2x short calls equivalent to the 1x $220 short call is the strike that is at $44/2 = $21 = Jun 2021 short $270 call (all numbers are rounded to keep the maths simpler).

    The current long is at $180, the midpoint of the new Butterfly is at $270. so the upper short strike must be at $360 so there is $90 distance between the long calls ($180 & $360) and the short strike of $270. The final position is a 1x $180 / 2x $270 / 1x $360.

    There is no $360 strike available so we have to buy the $350 strike.

    The modifications cost the following:

    $220 short call rolls to the $270 short call for a DEBIT of ($24)

    Sell an additional 1x $270 short call for a CREDIT of $22

    Buy a new 1x long $350 call for a DEBIT of $4

    Net cost $6 to end up in a 180/270/350 long call butterfly

    According to TOS prices at market close 10/23/2019 for 10 contracts of this butterfly – I'll look at if this position was placed as a NEW trade – we have:

    Cost $33k

    Max loss $33k – this is a debit spread so max loss is always what you paid for the spread

    Max profit $57k

    Break even stock prices $213 / $326

    Net Effect of the adjustment of a deep ITM BCS ($180 / $220)  to a balanced Butterfly ($180 / $270 / $350:

    1. Move from a $40 wide long spread to a $90 wide spread + an OTM  $80 wide short spread

    2. Max profit goes from $40k for the BCS versus $57k for the Butterfly.

    3. The original $180 / $220 long spread cost me $20. So a max loss of $20k for the BCS versus $33k for the Butterfly

    4. Max loss kicks in if AAPL is below $180 on June 2021.

    That makes for a nice comparison. Thanks for the idea edro00. 







  10. WeWork/StJ – Isn't that amazing.  Really what it is is they are paying him to exit without a fight so they can attempt to salvage their $10Bn investment and, really, the money is being stolen from all the shareholders, not just SoftBank.

    Yay, TSLA cooling off!  We bought back our short puts and now we can sell more short puts and use that money to widen the spread on the call side (and lower the margin).  

    Zuck/StJ – He is AWFUL at these testimonies.  

    Air pollution/StJ – So Trump has now killed more Americans than terrorists?  That's nothing compared to 50,000/yr he's trying to kill by rolling back ObamaCare.  

    • Comcast (NASDAQ:CMCSA) topped expectations with its Q3 earnings thanks to continuing strength in Internet subscribers, still mitigating the drop in video customers, along with solid results in Parks.
    • Revenues jumped 21% from last year, to $26.8B, and attributable net income rose 11.5% to $3.22B. Comparability was impacted by the Sky transaction from Q4 2018.
    • EBITDA increased 17%, to $8.55B.
    • On a pro forma basis (as if the Sky transaction had taken place Jan. 1, 2017), revenue was consistent and EBITDA rose 7.4%.
    • Revenue by segment: Cable Communications, $14.6B (up 4%); NBCUniversal, $8.3B (down 3.5%); Sky, $4.55B (down 4.2%).
    • It lost 238,000 video customers vs. a net decline of 224,000 last quarter.
    • Meanwhile, cable added 379,000 high-speed Internet customers, its highest Q3 broadband net adds in 10 years.
    • Free cash flow dropped to $2.07B, a decline of 34%. Net cash provided by operations was $5.2B.
    • Press release

    Good for FTR?

    Buffett's favorite indicator still looks good:

    • Packaging Corporation of America (PKG -1.4%) trades lower after a mixed Q3 report and profit guidance below expectations.
    • PKG's pricing update: "Average domestic prices were about where we expected based on the changes in the published domestic containerboard prices from earlier this year, however our corrugated products mix was slightly better. In the Paper segment, volumes for our office paper and converting grades were slightly above the third quarter of 2018. Prices and mix were higher than last year’s third quarter, but moved lower compared to the second quarter of 2019, although at a slower rate than the published index prices."
    • Looking ahead, the company anticipates Q4 EPS of $1.70 vs. $1.80 consensus.
    • Previously: Packaging EPS beats by $0.01, misses on revenue (Oct. 23)

    PMI composite flash squeaks past estimate

    • October U.S. PMI Composite Flash51.2 vs. 50.9 consensus 51.0 prior.
    • Manufacturing PMI 51.5 vs. 50.5 consensus, 51.0 prior.
    • Services PMI 51.0 in-line with consensus, 50.9 prior.
    • The European Central Bank keeps interest rates unchanged with main refinancing operations at 0.00%, marginal lending facility at 0.25% and deposit facility at -0.50%.
    • Mario Draghi exits the ECB following his post-meeting press conference (livestream here). His eight-year career atop the central bank featured not a single rate hike and lots of QE. He's to replaced by ex-IMF boss Christine Lagarde.
    • The Eurozone economy remained close to stagnation at the start of Q4, according to the latest flash PMI data.
    • A further steep decline in manufacturing output was accompanied by one of the weakest service sector expansions since 2014. The flash eurozone manufacturing PMI rose to a two-month high of 46.2, while the flash services PMI rose to 51.8 from 51.6. Flash composite PMI edged up to 50.2 from 50.1 in September to linger perilously close to the 50.0 mark that separates growth from contraction.
    • Future expectations sank to the gloomiest level since 2013 and jobs growth hit the lowest mark since 2014.

    Analysts positive on Microsoft's earnings

    • Atlantic Equities maintains an Overweight rating on Microsoft (NASDAQ:MSFT) and raises the PT from $155 to $160.
    • The firm praises the "impressive" EPS/revenue upside and notes that cloud growth remained strong, but was modestly short of expectations due to the sequential slowing of Azure and Office 365.
    • Piper Jaffray resumes MSFT coverage with an Overweight rating and $158 price target. The firm consider Microsoft a core holding for large-cap growth investors due to the "promising" share gain potential and sees the shift to cloud sustaining double-digit revenue growth through FY23.
    • Wedbush stays at Outperform and raises the target from $160 to $170. The firm remains bullish on MSFT into 2020 on expectations that Azure's cloud momentum is in the early stages of playing out with the massive installed base.
    • Microsoft shares are up 1.8% to $139.71. The company has a Buy average Sell Side rating.
    • Stanley Black & Decker (NYSE:SWKdown 1.7% pre-market, reported Q3 revenue growth of 4% Y/Y to $3.6B, reflecting positive contributions from volume (+3%), acquisitions (+3%) and price (+1%).
    • Segment sales: Tools & Storage $2.53B (+3.5% Y/Y); Industrial $632.7M (+12.6% Y/Y); and Security $466.6M (-3.8% Y/Y).
    • Q3 Gross margin declined by 130 bps to 34.1%; operating margin expanded by 70 bps to 13.3%. Excluding Charges; Adj. gross margin was 34.3% down by 120 bps; and adj. operating margin was 14.5% (flat).
    • SG&A expenses were $756.1M; as percentage of sales 20.8% up by 210 bps.
    • Net cash provided by operating activities for the quarter $192.7M, compared to $191.5M a year ago; and FCF of $96M.
    • Company announced new Cost Reduction Program expected to deliver $200M in annual cost savings, with an ~pre-tax restructuring charge of $150M expected to be recognized primarily in 2019.
    • FY19 Outlook, lowered: EPS 6.50-$6.60 (prior $7.50-$7.70); Adj. EPS $8.35-$8.45 (prior $8.50-$8.70); and free cash flow conversion estimate of ~85%-90%.
    • Previously: Stanley Black & Decker EPS beats by $0.10, misses on revenue (Oct. 24)

    • Valero Energy (NYSE:VLO+1.1% pre-market after Q3 earnings and revenues come in ahead of expectations, benefiting from easy access to cheap light crude from U.S. shale oil basins.
    • Q3 total revenues fell 11% Y/Y to $27.25B from $30.85B in the year-ago quarter.
    • VLO's refining segment reported $1.1B of operating income for Q3 vs. $1.4B for the year-ago quarter; refinery throughput capacity utilization was 94%, with throughput volumes averaging 2.95M bbl/day.
    • VLO says its Q3 refining margins fell 8.6% Y/Y to $2.72B from nearly $3B in the prior-year period.
    • The company says it continues to expect capex of ~$2.5B in both 2019 and 2020, 60% toward sustaining the business and 40% for growth projects.
    • Tilray (NASDAQ:TLRYannounces that it has imported a supply of medical cannabis into the U.S. to support a first-ever clinical trial evaluating its efficacy in breast cancer patients with taxane-induced peripheral neuropathy (TIPN) (nerves carrying messages from the brain and spinal cord are damaged) secondary to treatment with chemo agents paclitaxel or docetaxel.
    • The 100-subject Phase 2 study, sponsored by the New York Psychiatric Institute, will randomize participants 1:1 to receive either a product containing THC and CBD or a product with no active cannabinoids twice daily for eight weeks.
    • The primary endpoint is the change over eight weeks in a patient-reported pain questionnaire called BPI.
    • Recruitment is underway.
    • TIPN affects more than 2/3 of women undergoing treatment for breast cancer.
    • Shares are up 2% premarket on light volume.
    • Qualcomm (NASDAQ:QCOMlaunches the VC fund to invest in startups looking to use 5G tech in devices other than smartphones.
    • QCOM is the world's largest supplier of 5G chips for smartphones, but that market is no longer growing.
    • The investments could include companies connecting industrial equipment to the internet or those helping self-driving vehicles communicate with the surrounding infrastructure like traffic lights.
    • Qualcomm shares are up 0.4% pre-market to $77.56.
    • Tesla (NASDAQ:TSLA) resembles the character Glenn Close in Fatal Attraction just a bit by sending a notice to Wall Street that it won't be ignored with a surprise EPS beat and a solid Q3 deliveries number.
    • While Tesla said production in Shanghai and Model Y development are both ahead of schedule, analysts note there was something meatier for investors to latch on to with the company's tracked improvements in operating efficiency and a reduction in manufacturing/material costs addressing some concerns on future profitability. Still, the top line tally of $6.3B relied on deferred revenue and was below expectations. It also marked Tesla's first annual sales decline since 2012.
    • Wall Street moves: Canaccord Genuity lifts its price target to $375 from $350, Wedbush moves its PT up to $270 from $220 and Nomura hikes its PT to $300 from $270. "While we remain concerned on 2020 momentum / profitability, we acknowledge this was an outstanding quarter relative to lowered expectations despite mixed headwinds which we expect could increase as Model Y launches," updates Evercore ISI on the Tesla report. Wedbush's Dan Ives is even more conciliatory. "Tesla proved us and many wrong last night with a strong 3Q delivery number, reiteration of hitting the 360k to 400k threshold for the year, and most importantly delivering a strong cash flow/profitability. While we are still taking a wait and see approach to see how sustainable this level of demand/profitability is going forward, this morning we move one step closer to believing this Tesla turnaround story is real with Musk delivering a robust performance with his back against the wall," he writes. JPMorgan is sounding some caution after seeing the initial 20% pop in shares. The analyst team doesn't think the quarter is a "breakout" moment for the EV automaker.
    • Shares of Tesla are up 17.46% premarket to $299.50.
    • Previously: Tesla +12% after surprise profit (Oct. 23)
    • Previously: Tesla revisits $300 (Oct. 23)
    • American Airlines (NASDAQ:AAL) is on watch after reporting revenue ($11.91B vs, $11.94B consensus), unit revenue (+2% vs. a guidance range of +1.5% to +2.5%), EPS ($1.42 vs. $1.40 consensus) and cost per available seat mile (+5% vs. a guidance range of +4% to +6%) all roughly in line with expectations.
    • Just like Southwest earlier today, American pointed a finger at Boeing. "Our third quarter was impacted by the continued grounding of the Boeing 737 MAX and the operational challenges resulting from ongoing labor contract negotiations," notes CEO Doug Parker. American didn't mention like Southwest did if it's looking for compensation for the disruption.
    • Looking ahead, American expects unit revenue growth to be flat to up 2% and EPS of $4.50 to $5.50 vs. a prior range of $4.50 to %6.00 and $4.99 consensus. Capacity is expected to be up 2.7% in Q4 and 1% for the full year.
    • Shares of AAL are down 0.67% premarket to $28.10.
    • Previously: American Airlines EPS beats by $0.02, misses on revenue (Oct. 24)
    • Dow Inc. (NYSE:DOW+3.4% pre-market after Q3 earnings drop by a third from the year-ago quarter but easily beat Wall Street estimates, as its cost-cutting moves helped offset weaker demand for the chemicals it uses in making plastics.
    • Dow says it has saved $1.37B as part of its previously announced cost reduction program and had cut an additional $40M in expenses in Q3.
    • But like larger German rival BASF (OTCQX:BASFY) – which reported a 24% drop in operating income – Dow is coping with a slowdown in global demand for its products.
    • Sales volumes fell 2% in the quarter, while prices declined 12%; sales in EMEAI sank 17.5%, U.S. and Canada tumbled 15.6%, and Asia-Pacific slipped 7.5%.
    • For Q4, Dow expects revenues of $9.8B-$10.2B vs $11.05B analyst consensus.
    • "Dow delivered a strong third quarter driven by higher than expected plastics margins," according to SunTrust's Jim Sheehan. "Amid deteriorating business fundamentals heading into the fourth quarter, management is focused on rationalizing capital expenditures, leveraging feedstock flexibility and working down stranded costs."
    • 3M (NYSE:MMM-2.8% pre-market after reporting better than expected Q3 earnings but missing revenue expectations by a wide mark and cutting its full-year earnings guidance, hurt by slowing demand in key markets such as China.
    • Q3 revenues fell 2% Y/Y to $7.99B, with safety and industrial sales sliding 5.7% to $2.8B, below $3B consensus; transportation and electronics sales falling 4.4% to $2.5B, in line with expectations; health care sales gaining 4.7% to $1.7B, below $1.8B consensus; and consumer sales added 1.7% to $1.3B, in line with expectations.
    • Sales in Asia-Pacific, the company's biggest market outside the U.S., slumped 5%, while Europe, Middle East and Africa fell 4.1%, and sales in the U.S. rose just 0.8%.
    • 3M cuts its full-year adjusted EPS guidance to $8.99-$9.09 from its prior forecast of $9.25-$9.75, and slashes its FY 2019 organic local-currency sales outlook to a 1%-1.5% decline vs. its prior outlook of negative 1% to positive 2% growth.
    • For Q4, 3M sees EPS of $2.05-$2.15 – including a ~$0.15 negative impact from the recently closed acquisition of Acelity, which was part of previous guidance – vs. $2.37 analyst consensus; Q4 organic local-currency sales are expected to decline 1%-3%.
    • Twitter (NYSE:TWTR) slides 16.3% after Q3 results that missed on revenue and earnings. Downside Q4 guidance sees $940M to $1.01B in revenue (consensus: $1.06B) with operating income of $130-170M. Peer Snap (NYSE:SNAP) is down 1.1% pre-market.
    • The company says Q3 headwinds included revenue product issues and greater-than-expected advertising seasonality in July and August. Ad revenue was $702M in the quarter (consensus: $755.8M) and Data Licensing was $121M (consensus: $119M).
    • Q3 average monetization DAU was up 17% Y/Y to 145M (consensus: 145.5M). Average U.S. mDAU was 30M versus the 26M estimate, and the average international mDAU was 115M versus 98M.
    • Twitter sees FY capex at or near the low end of its prior range of $550-600M, which is in-line with consensus.
    • Earnings call starts at 8 AM ET with a webcast here.
    • Press release.
    • Southwest Airlines (NYSE:LUV) reports a modest 1.1% increase in revenue in Q4 and solid 4.2% jump in unit revenue during a quarter dominated by the impact of the Boeing 737 grounding.
    • The company says it's engaged in ongoing discussions with Boeing regarding compensation for damages related to the MAX groundings. "The operating income reduction from the MAX groundings is estimated to be $435M for the nine months ended 30-Sep-19, and we expect the damages to continue to grow into 2020," updates LUV.
    • Looking ahead, Southwest sees unit revenue flat to up 2% in Q4 off solid booking trends and cost per available seat mile rising 4% to 6%.
    • Shares of Southwest are up 1.62% premarket to $54.10.
    • Previously: Southwest Airlines EPS beats by $0.15, misses on revenue (Oct. 24)
    • Non-IFRS FY19 EPS is expected at €0.21 (±€0.03) from the prior guidance of €0.25 - €0.29. Non-IFRS operating margin at 8.5% (±1%). Recurring free cash flow to be negative from slightly positive, implying net cash to €1.5B at the end of FY19.
    • FY20 non-IFRS EPS is expected in the range of €0.25 (±€0.05) from the prior guidance of €0.37 - €0.42. Non-IFRS operating margin at 9.5% (±1.5%).
    • The company will not distribute the third and fourth quarterly instalments of the dividend for the financial year 2018 to increase 5G investments, investments in growth in strategic focus areas of enterprise and software and strengthen Nokia’s cash position.
    • NOK -18% PM
    • Press Release


  11. AAPL/Winston – I'm assuming we're talking about the June 2021 $180/220 bull call spread and that $72/44 are the current prices and not what you paid?  So the spread is $40 and it's net $28 at the moment but that's how a bull call spread works – you're not going to make the whole $40 until June, 2021.  I don't understand what needs "fixing" – it's a trade that's on track and likely to pay in full – why mess with it?

    Do you have something better to do in 18 months than make $12 (42%) on $28?  If you have a trade you are as sure or more sure of that makes more than 42% – then that's a reason to cash this one (and rolls are cashing – don't fool yourself) but, if not, then learning to leave things alone is important too.

    I'm no fan of vertical butterflies.  In fact, our Butterfly Portfolio started out with those back in 2007 but, after a couple of years of experiments, we decided our extended butterfly plays were massively superior in returns and consistency.  I hate having to hit a specified target over a long period of time – just blind luck if you do and very difficult to adjust along the way.  

    You are playing AAPL to hit $270 and you don't want to lose more than $33,000 and you'd like to make $57,000 – the trade idea above accomplishes that if you go with 10 spreads and 4 short puts and calls and you don't lose $33,000 unless APPL is below $192 AND the rest of your spread is worthless but the upside is $46,000 + $20,000 in potential sales for $14,000 down.  

    Another benefit of the calendar spread is you can always sell more calls if AAPL is weak and considerably up your collections.  

    Also, the 2022 $230 ($41)/$270 ($27) bull call spread is $14 on it's own so $28,000 (max loss) on 20 returns up to $80,000 at $270 for a $52,000 profit without any of the other messing around and you could sell 5 short April $250s for $12.50 ($6,250) to drop your net to $21,750 and 4 more sales like that would net you in the $80,000 spread with a credit and no possibility of losing (if the short call sales go well).  If not, you have tons of room to roll as the 2022 $320s are $12.50 – so about the same upside safety zone as the vertical spread with a LOT more flexibility.


  12. TSLA $291!  Turning into a big winner for us!


  13. Despite not being able to deduct losses in an IRA, trading there does offer some interesting possibilities.  Sold 1/2 of MAT trade at $10..20.  Sold April $10 puts for $1.49 to replace it, or to  enhance the trade by an additional 14%.


  14. The 10Q is key on TSLA, and I suspect they will delay it as long as possible.  It is clear that they kitchen sinked the quarter with non-recurring items, and probably took the warranty reserves down or something else that is unsustainable to impact margin.  No way they could improve margins this dramatically on smaller unit volume.  The 10Q will shine the light, and should kill the upside momentum.  


  15. MAT/Albo – That's a good way to play.

    TSLA/Palotay – CapEx is less than 5% – that's completely unsustainable for an auto company and makes no sense for a company that is growing – they must have moved all sorts of things into Q4. 

    3,000 held nicely from above.  Nasdaq making a quick recovery.


  16. Phil – thanks for the input. Yes, the spread is June 2021 and the prices are current prices. Any adjustment needs to be a compelling case, for the moment I will sit tight with the current spread.


  17. OPK shares at all time low.  Company issuing 100 million dollars of stock.

    Bought some stock at $1.69 and sold the Jan 2022 $2 puts for $.95.

    Dr. Frost hasn't bought any stock in more than three months.  Think the company likely to be sold..


  18. Fed is going crazy with the Repo money:

    The market panicked over $75Bn, now $120Bn?   And this is pre-Brexit – which was likely to cause a strain anyway.  

    The UK is due to leave the European Union (EU) at 23:00 GMT on 31 October 2019. For those not following every twist and turn, this guide covers the basics.

    7 days!

    I think if we weren't in cash, I'd be cashing out!


  19. Phil can you explain a bit what the repo money is all about?


  20. Bloomberg actually figured out what bitcoin is! Booze!!!!

    "Alcohol is a technology that turns the evanescent into the permanent. Think of a grape you pull off a vine. It'll shrivel up and die in a few days. With refrigeration you can preserve the grape for a week or two. But with fermentation, that grape could theoretically last for centuries. Turning organic matter into alcohol has other advantages beyond the gift of immortality. It takes about 400 grapes to make one bottle of wine. Those 400 grapes would be annoying to store and transport, but a bottle of wine is easy to place anywhere. Longevity, storage, transportability… it's all easier post-fermentation. With this framework, you can think of the process of mining Bitcoin as essentially taking electricity and fermenting it via specialized computer chips. Electricity is difficult to store at scale (battery technology is still disappointing) and power dissipates rapidly over distribution lines. But when that same electricity is used for mining a cryptocurrency, it becomes something else, which is virtually immortal and can be stored and transported with great ease. People are still trying to wrap their heads around cryptocurrencies, as we've seen from regulators, lawmakers, investors, and even true believers. Some argue Bitcoin is digital gold. Some say it's a currency. Some a commodity. Others call it a "protocol." But the answer is simple: Bitcoin is digital alcohol."


  21. Repos/Tangled – Wow, that's like a thesis question!  Repurchase Agreements are used by the Fed with their Primary Dealers (Big Banksters) in order to maintain the target Fed Funds Rate (2%) on overnight lending, which is needed by the banks to cover reserve requirements and remain in compliance (they tend to cut it right to the edge).  The Fed's trading desk buys TBills or MBS from the PDs to give them cash to cover their loan ratios – The PDs can run into trouble if a large debt repayment they were expecting is delayed or if there are adjustments made to their balance sheets (write-offs, fines).

    The Banks MUST be in compliance at the day's close so they MUST borrow money overnight to cover any shortfall and that causes short-term rates to spike – inverting the yield curve.  To prevent this from happening (and to make life better for the Banksters – which is the Fed's real function), the Fed will give them money at the Fed Funds Rate – rather than the open market rate.  Of course the Fed is then ignoring any growing lending risks which are clearly indicated by the need to borrow. 

    As I noted last month, while $120Bn/day sounds shocking, the way it works is they (the Fed) get the money back from the PDs every day and the PDs borrow again each night.  What I find concerning is it's getting worse so, whatever was wrong last month is getting worse and this is a key leading indicator of deteriorating loan quality conditions (most likely reason the Banksters are caught short overnight).

    Last month they said it was a drain on cash due to tax payments but now they don't even have an excuse and they are not bothering to make one up so far.

    Booze/BDC – You're right, the more you drink, the more you think it's worth!  Also, you pay a lot of money for something you're only going to piss away because no one actually wants it after you have it…  cheeky

    Image result for alcohol rent it


  22. "BDC's Crypto World" returned 75,000% in 7 years, as info.


  23. You can buy TWTR for $31.10  and sell the Jan2021 $30 calls for $7


  24. Bond Defaults Are the Highest on Record as India’s Economy Slows.

    Mario Draghi Reaches the End of His Fight to Save Euro

    Earnings season has reached ‘maximum disorientation,’ Jim Cramer says.

    Federal Reserve economist says growth would have been better with negative interest rates

    The long march to ZIRP:

    Image result for global debt chart

    Think they have something to do with each other?  

    $63 Trillion of World Debt in One Visualization

    1/3 of the debt is ours so thank goodness for low rates because 8% of $23Tn is $1.84Tn/year in Interest Payments alone (50% of our tax revenues).  Yet nobody seems to notice, nobody seems to care…

    75,000%/BDC – Hey at 0.00000001, I was a believer.  At $8,000 – I'm a skeptic.  I have long said, $1,000 is the price I'd be interested in getting back in (we bought 4 at $600 each back in the day).

    TWTR/Stock – I THINK their problems were one-off but I want to take a closer look first.


  25. Speaking of being in the club:

    The magic number is $421,926

    Currently, you need to make a minimum of $421,926 per year to be considered in the top 1%, according to the EPI study. But in this crowd, that's just scraping by. The average annual income among the top 1% is $718,766, and the top 0.1% earn an average of $2,756,865. By contrast, the bottom 90% make an average of just $36,182.

     

    These numbers don't tell the whole story. They're based on Social Security Administration (SSA) data, and the SSA only considers wages, not investment income, so it's likely that many of these top individuals earn more, though there's no way to know how much more.

    The top 1% have seen their wages grow by 157.3% over the last 40 years, according to the EPI study. By contrast, the bottom 90% have only seen their wages grow by 22.2% since 1979. The Great Recession hit all wage groups hard, but the 1% have rebounded quickly, with 2017 being their second-highest-earning year ever recorded. They currently hold 13.7% of the country's wealth.

    While most of us – by definition – will never join the top 1%, joining the top 10% (or even the top 5%) is attainable for those in well-paying fields. You need to make $118,400 to join the top 10% and $195,070 for the top 5%. Again, these figures don't include investment income, but they give you a baseline.


  26. AAPL/Phil – Thanks again!


  27. TIF/ Anyone know why this stock is up so much today? 


  28. https://finance.yahoo.com/news/nautilus-inc-debuts-first-ever-160000713.html

    A trader friend mentioned this to me.  Nautilus (NLS) is taking on Peloton. at less than half the price.


  29. You're welcome Sag.

    TIF/Tshroy – Interesting, I see nothing at all yet they are up 5%.

    • Less than a week before the Fed's next monetary-policy meeting, President Trump tweets that the central bank will be "derelict in its duties if it doesn't lower the Rate and even, ideally, stimulate."
    • Adds that "Germany and others are actually GETTING PAID to borrow money."
    • Repeats that the "Fed was way too fast to raise, and way too slow to cut!"
    • Traders expect a rate cut next week; the CME FedWatch Tool puts the probability of a 25-basis point cut at 93.5%, up from 84.4% a week ago.
    • The 10-year Treasury is up today, pushing yield down 2 basis points to 1.75%.

    • Like the markets, Goldman Sachs expects the Fed to cut federal fund rate target range by 25 basis points to 1.50%-1.75% next week and to tweak its language to signal that the cutting cycle may be finished.
    • Goldman assigns a 95% probability of a rate cut when the Federal Open Market Committee meets next week, slightly higher than the 93.5% probability indicated by the CME FedWatch Tool.
    • Goldman economist Spencer Hill expects the central bankers to remove "will act as appropriate to sustain the expansion" from its post-meeting statement and instead use less specific language such as "will act as needed to promote its objectives."
    • Another change may describe consumer spending as "solid" rather than "strong," he  notes.
    • Any indication of whether the FOMC considers the rate-cutting process over is more likely to come at Fed Chair Jerome Powell's press conference than the post-meeting statement, Hill wrote.
    • He expects Kansas City Fed President Esther George and Boston Fed President Eric Rosengren to dissent agains against a rate cut. St. Louis Fed President James Bullard, who dissented last time because the rate cut wasn't big enough, is likely to vote for a 25-bps cut this time, Hill wrote.
    • iShares 20+ Year Treasury Bond ETF (TLT +0.4%), ProShares UltraShort 20+ Year Treasury ETF (TBT -0.9%).
    • The FedWatch Tool puts a 65.3% probability on the federal funds rate at 1.50%-1.75% at the December meeting.
    • Valero Energy (VLO +2.4%) lifts to a 52-week high after reporting stronger than expected Q3 results and forecasting favorable market conditions for the current quarter.
    • "We expect to see continued product strength with inventories at lower levels and sour crude weakness resulting from the IMO low-sulfur fuel oil mandate," which takes effect on Jan. 1, CEO Joe Gorder says.
    • VLO said on its earnings conference call that it plans to run its 14 refineries at as much as 95% of their combined capacity of 3.1M bbl/day in Q4, with combined throughput at its seven Gulf Coast refineries running up to 96% of their combined capacity of 1.8M bbl/day.
    • Gasoline markets are beginning an expected shift in preparation for the change in marine fuels mandated by the IMO, senior VP of supply Gary Simmons said.
    • "If you look today, low sulfur (vacuum gas oil) was $5 over gasoline in the Gulf, which is the point where you'll start to see people pull that out of crackers and put it into the low sulfur bunker, which should impact gasoline yield moving forward," Simmons said.
    • The British pound falls 0.7% against the U.S. dollar after Bloomberg reports that U.K. Prime Minister Boris Johnson will seek an early general election on Dec. 12 rather than try again to get his Brexit deal and its timeline approved by Parliament.
    • The EU is expected to grant a three-month extension to the date when the U.K. will leave the EU.
    • He's already failed twice to get the opposition Labour Party to agree to an early election.
    • Invesco CurrencyShares British Pound Sterling Trust ETF (FXB -0.8%), iShares MSCI United Kingdom ETF (EWU +0.2%).
    • 3M (MMM -4.3%) falls as much as 5% after the company cut its earnings and sales guidance for the year, citing a challenging macroeconomic environment.
    • The familiar soft spots in key end markets and geographies again contributed to 3M's Q3 shortfall, says RBC analyst Deane Dray, adding that if investors were bracing for a tough operating macro across the sector in Q3, 3M's results confirmed those worries.
    • One of the negative surprises was the weakness in health care, where margins contracted by a severe 220 bps Y/Y due to M&A deals, inventory reductions and growth investments, Dray says.
    • J.P. Morgan's Stephen Tusa, who rates 3M at Underweight, calls it a "messy" and "low quality" quarter, with downside on sales, profits and cash that were in line with the JPM's below-consensus estimates.
    • Barclays' Julian Mitchell, who also rates the shares at Underweight, says the Q4 guidance looks lower than Wall Street estimates but many investors may have expected it.
    • Virgin Galactic (SPCE) will trade on Monday after a reverse merger with Social Capital Hedosophia (IPOA +2.6%).
    • Social Capital Hedosophia will hold a 49% stake in the space flight and tourism upstart following the SPAC transaction, while Sir Richard Branson will hold 51%. The combined valuation is set at $1.5B for the two firms merging.
    • The market valuation on Virgin Galactic after its debut will be of interest to SpaceX (SPACE) investors on the private market.
    • Boeing (BA +0.4%) will hold a minority stake in Virgin Galactic through its HorizonX venture arm after the transaction closes.
    • October Kansas City Fed Composite Index-3 vs. -2 in September.
    • Manufacturing Index +8 vs. +11 prior.
    • “Overall regional factory activity declined again in October,” said Wilkerson. “This was driven by further deterioration in durable goods production, as nondurable manufacturing expanded slightly for the second straight month.”

  30. OK, let's look at TWTR – $30 is $30Bn so easy to see how they are doing:

    Year End 31st Dec 2013 2014 2015 2016 2017 2018 TTM 2019E 2020E CAGR / Avg
    Revenue $m 664.9 1,403 2,218 2,530 2,443 3,042 3,295 3,558 4,125 +35.5%
    Operating Profit $m -635.8 -538.9 -450 -367.2 -23.7 450.3 468.1      
    Net Profit $m -645.3 -577.8 -521 -456.9 -108.1 1,206 2,355 1,945 927.9  
    EPS Reported $ -3.41 -0.96 -0.79 -0.65 0.33 1.56 3.02      
    EPS Normalised $ -3.41 -0.96 -0.79 -0.56 0.38 1.56 3.01 2.47 1.14  
    EPS Growth %           +305.3 +284.6 +58.6 -53.7  
    PE Ratio x           24.9 12.9 15.7 33.9  
    PEG x           0.42 0.22 n/a 1.57
    Profitability

    That 2020 projection is a disaster and this Q was a huge miss but they made $1.1Bn last Q (thanks entirely to a $1Bn tax break) and $190M the Q before and just $44M this Q so trend, without tax credits, is not even $800M, that's why next year makes sense.

    Usage is up:

    I like the Olympic thing for next year 

    They do have about $6Bn in cash so the ability to do something but short of buying 1Bn users from FB – I don't see how they justify a $30Bn valuation.

    I find it interesting how open and transparent they are and how honest they are about their problems in improving the platform.  Still, the rate of growth it just not there to justify a 40x valuation and that's pretty much why they are selling off – a bit of foreshadowing for the rest of the Nasdaq, I think.

    We'll see how AMZN does later:

    FB reports 10/30 – also Fed next week!


  31. Palatoy / TSLA – I agree with your point.   10Q will be interesting.  The SW / auto-retrieve function was a jamm  in for the QTR clearly not ready…  Additionally they may have played the game on carbon credits again this year ( like last year) in addition to Cap X.  


  32.  getting jammed up into close – S/P 3000, NSDQ 8200, 


  33. Bought some jan 28 sqqq calls. NAS looks toppy.


  34. THANK YOU AMZN.


  35. AMZN missed and lowered for 4th quarter earnings


  36. AMZN will not be good for the Nasdaq tomorrow though INTC will offset it a bit.

    • Amazon (NASDAQ:AMZN): Q3 GAAP EPS of $4.23 misses by $0.32.
    • Revenue of $69.98B (+23.7% Y/Y) beats by $1.26B.
    • Shares -5%.
    • Press Release
    • Amazon.com (NASDAQ:AMZN) has dipped 7.5% in early after-hours trade as it topped high-end estimates with its Q3 net sales but guided to the low side for Q4, and missed on Q3 profits.
    • Net sales rose nearly 24%, to $70B. It expects Q4 net sales of $80B-$86.5B, below consensus for $87.2B.
    • AWS net sales were $9B, slightly below expectations for $9.19B.
    • Q3 operating income fell, meanwhile, to $3.2B from $3.7B, and net income dropped to $2.1B from $2.9B.
    • Operating cash flow was up 33% to $35.3B in trailing 12 months, and free cash flow rose to $23.5B for the same period vs. a year-ago $15.4B.
    • The net sales guidance is for growth of 11-20% Y/Y, anticipating unfavorable impact of 80 basis points from forex.
    • The company also expects operating income to fall to $1.2B-$2.9B from $3.8B.
    • Conference call to come at 5:30 p.m. ET.
    • Press release
    • A Massachusetts judge has given the go-ahead for the state's attorney general to sue Exxon Mobil (NYSE:XOM) over allegations it concealed its knowledge of the role fossil fuels play in climate change.
    • XOM had sought to delay the filing of the lawsuit by Massachusetts Attorney General Healey until after the close of a trial over similar claims by New York's attorney general.
    • The judge ruled that the state was under no obligation to wait any longer after notifying XOM on Oct. 10 of its intent to sue, which the AG's office says it wants to do "ASAP."
    • Aflac (NYSE:AFLQ3 adjusted EPS of $1.16 beat the average analyst estimate of $1.07 and rises from $1.03 in the year-ago quarter.
    • Q3 total revenue of $5.54B fell 0.7% Y/Y.
    • Boosts 2019 adjusted EPS guidance to $4.35-$4.45 from the previous range of $4.10-$4.30, assuming 2018 weighted average of  ¥110.39 yen per U.S. dollar; exceeds consensus estimate of $4.34.
    • In dollar terms, Aflac Japan's net premium income of  $3.2B in Q3 rose 2.6%; net investment income, net of amortized hedge costs, increased 8.7% to $659M; total revenues increased 3.6% to $3.9B.
    • Aflac U.S. net premium income rose 1.3% Y/Y to $1.4B, while net investment income fell 2.1% to $183M; total revenue increased 0.9% to $1.6B.
    • Still sees buying back $1.3B-$1.7B of its shares in 2019.
    • Conference call on Oct. 25 at 9:00 AM ET.
    • Previously: AFLAC EPS beats by $0.09, beats on revenue (Oct. 24)
    • EHealth (NASDAQ:EHTHQ3 results:
    • Revenue: $69.9M (+71.3%); Medicare segment: $57.2M (+74.9%); Individual, Family, Small Business: $12.7M (+58.8%).
    • Net loss: ($11.0M) (-22.2%); loss/share: ($0.47) (flat).
    • Cash consumption: ($15.9M) (-224.5%).
    • 2019 guidance: Revenue: $365.0M – 385.0M (unch); Medicare segment: $318.0M – 333.0M (unch); Individual, Family, Small Business: $47.0M – 52.0M (unch); net income: $20.9M – 25.9M from $15.5M – 20.5M; non-GAAP net income: $46.6M – 51.6M from $44.3M – 49.3M; EPS: $0.83 – 1.03 from $0.62 – 0.82; non-GAAP EPS: $1.86 – 2.06 from $1.77 – 1.97; non-GAAP EBITDA: $65.0M – 70.0M (unch).
    • Shares down 9% after hours.
    • Previously: eHealth EPS beats by $0.20, beats on revenue (Oct. 24)
    • Visa (NYSE:V) gains 1.1% in after-hours trading after its board boosts quarterly cash dividend by 20% to 30 cents per share.
    • Fiscal Q4 adjusted EPS of $1.47 exceeds the average analyst estimate of $1.43 and up from $1.21 in the year-ago quarter.
    • Revenue for the quarter ended Sept. 30, 2019 was $6.14B, beating the $6.08B consensus estimate and up 13% Y/Y.
    • Q4 payments volume increased 9% Y/Y on a constant-dollar basis; cross-border volume increased 7%; processed transactions of 36.4B rose 11%.
    • Q4 service revenue of $2.5B rose 9% Y/Y.
    • 2020 outlook: Sees annual net revenue growth up in low-double digits on adjusted constant-dollar basis.
    • Sees annual operating expense growth in mid-to-high-single digits.
    • Sees annual diluted class A common stock EPS growth in mid-teens.
    • Conference call at 5:00 PM ET.
    • Previously: Visa EPS beats by $0.04, beats on revenue (Oct. 24)
    • CarMax (NYSE:KMX) has promoted Enrique Mayor-Mora to be its new senior VP and chief financial officer.
    • Mayor-Mora, who has been treasurer since 2016, will replace Tom Reedy, who becomes executive VP of finance.
    • Reedy has been CFO since 2020, and Mayor-Mora will still report to him.
    • "This transition enables Tom to focus on our highest priority strategic initiatives and explore new growth opportunities, while at the same time maximizing the talents of our other financial leaders," says CEO Bill Nash.
    • Capital One Financial (NYSE:COFQ3 adjusted EPS of $3.32 beats the average analyst estimate of $2.92; compares with EPS from continuing operations of $3.24 in Q2 and $2.99 in the year-ago quarter.
    • Q3 total net revenue fell 2% from Q2 to $7.0B.
    • COF slips 1.4% in after-hours trading.
    • Q3 net interest income of $5.74B is roughly flat vs. Q2 and down 1% from $5.79B in Q3 2018; net interest margin of 6.73% falls from 6.80% in Q2 and 7.01% in the year-ago quarter.
    • Q3 net charge-off rate of 2.38% vs. 2.48% in Q2 and 2.41% in the year-ago quarter: 30+day delinquency rate of 3.51% vs. 3.35% in Q2 and 3.48% in Q3 2018.
    • Q3 operating efficiency ratio of 48.44% rises from 45.38% in Q2 and 46.95% in the year-ago quarter.
    • "Our domestic card business delivered strong year-over-year growth in purchase volume and branded card loans, and our consumer banking business posted strong year-over-year growth in auto originations and retail deposits," said Founder, Chairman, and CEO Richard D. Fairbank.
    • Conference call at 5:00 PM ET.
    • Previously: Capital One Financial EPS beats by $0.40, misses on revenue (Oct. 24)
    • First Solar (NASDAQ:FSLR-2.3% after-hours following Q3 earnings that climbed to $0.29/share from an $0.18/share loss in Q2 but nevertheless came in well below analyst estimates, and revenues slipped 6% Q/Q to $547M.
    • Cash at the end of the quarter fell to $1.6B from $2.1B at the end of Q2, primarily due to higher expenditures for the development and construction of project assets and continued capital investments in Series 6 manufacturing capacity.
    • FSLR raises its full-year outlook for operating income to $320M-$370M from prior guidance of $290M-$340M and sees gross margin of 19%-20% vs. 18.5%-19.5% previously.
    • FSLR maintains previous guidance for FY 2019 EPS of $2.25-$2.75, in line with $2.43 analyst consensus estimate, on revenues of $3.5B-$3.7B vs. $3.55B consensus; it also reaffirms its outlook for full-year net cash balance of $1.7B-$1.9B and capex of $650M-$750M.
    • Intel (NASDAQ:INTC): Q3 Non-GAAP EPS of $1.42 beats by $0.18; GAAP EPS of $1.35 beats by $0.19.
    • Revenue of $19.2B (+0.2% Y/Y) beats by $1.13B.
    • Shares +4%.
    • Press Release
    • Intel (NASDAQ:INTC+7.9% reports Q3 beats with upside Q4 guidance that sees $19.2B in revenue (consensus: $18.83B) and EPS of $1.24 (consensus: $1.21).
    • The upside FY view sees revenue of $71B (consensus: $69.47B) and EPS of $4.60 (consensus: $4.38).
    • Q3 revenue breakdown: PC-centric/CCG, $9.7B (-5% Y/) ; DCG, $6.38B (+4% Y/Y; consensus: $5.62B); IOTG, $1B (+9%) ; Mobileye, $229M (+20%); NSG, $1.3B (+19%); PSG, $507M (+2%) .
    • Adjusted gross margin was 60.4% versus the 61.6% consensus and 65.9% in last year's quarter.
    • Share repurchase: Intel's board adds $20B to its buyback authorization.
    • Earnings call starts at 5 PM ET with a webcast here.
    • Press release.
    • Gilead Sciences (NASDAQ:GILDQ3 results:
    • Revenues: $5,604M (+0.1%); product sales: $5,516M (+1.1%); HIV product sales: $4,202M (+12.7%).
    • Key product sales: Biktarvy: $1,259M (+226.2%); Genvoya: $978M (-16.8%); Truvada: $721M (-4.8%); Epclusa & generic: $516M (+8.2%); Odefsey: 436 (+3.1%); Descovy: 363 (-10.6%)
    • Net income: ($1,165M) (-155.6%); non-GAAP net income: $2,224M (-7.4%); EPS: ($0.92) (-157.5%); non-GAAP EPS: $1.75 (-4.9%).
    • 2019 guidance: Product sales: $21,800M – 22,100M from $21,600M – 22,100M.
    • Shares down 2% after hours.
    • Previously: Gilead Sciences EPS beats by $0.02, revenue in-line (Oct. 24)
    • Today's biggest action in energy commodities is in natural gas (UNG +1.3%), with December gas settling +1.7% to $2.32/MMBtu, on forecasts of lower than normal temperatures in parts of the central and western U.S.
    • This week's bounce is a bit of relief for nat gas futures, which have fallen nearly 30% in the past 12 months, dragged down by a supply glut.
    • U.S. gas inventories rose by 87B cf last week, nearly in line with expectations; the data puts total gas stockpiles at 3.6T cf, 17% higher than a year ago.
    • Meanwhile, crude oil futures (USO +0.6%) finished with their third straight gain, continuing to find support from this week's government data showing an unexpected weekly decline in U.S. crude supplies and a 21M-barrel decline in total petroleum stocks over the last three weeks.
    • December WTI +0.5% to settle at $56.23/bbl after jumping 2.7% yesterday, and Brent +0.8% to close at $61.67/bbl on ICE Futures Europe.
    • "There is a realization that the price decline seen in the last three weeks was perhaps an overshoot, since the ground realities point to tightening supplies and steady demand," Velandera Energy's Manish Raj tells MarketWatch.
    • Galaxy Resources (OTCPK:GALXF -7.4%will scale back operations at its Mt Cattlin mine in 2020 and is expected to reduce the amount of material mined by ~40%, amid pressure from weak pricing and lower than expected demand from China.
    • The Mt Cattlin operation produced 50 014 t of lithium concentrate, down slightly from the 56 460 t produced in the previous quarter, on the back of lower grades.
    • Targeted lithium concentrate production volume for Q4 2019 is 35,000 – 45,000 dmt, with FY19 production guidance of 183,000 – 193,000 dmt, revised from previous guidance range of 180,000 – 210,000 dmt
    • Target shipment volumes for Q4 2019 is between 30,000 – 40,000 dmt.
    • Total of 58,278 dmt of lithium concentrate was shipped, slightly below the guidance

  37. This is going to let them really F with Cushing inventories:

    • Crude oil flows have slowed this month on two pipelines from the Permian Basin to the Houston area, as differentials narrowed and volumes to another Gulf Coast hub ramped up, Reuters reports, citing traders and Genscape data.
    • Cheap tariffs on EPIC Midstream and Plains All American Pipeline's (NYSE:PAA) Catcus II pipeline from the Permian to Corpus Christi, Tex., are helping pull volumes from Houston, according to the report.
    • Meanwhile, crude volumes on Magellan Midstream Partners' (NYSE:MMP) Longhorn pipeline, which runs from the Permian to the Houston area, totaled 208K bbl/day last week vs. 287K bbl/day in the week ended Oct. 4, and flows on Enterprise Products Partners' (NYSE:EPD) Midland-to-Sealy pipeline fell to 420K bbl/day last week from 601K bbl/day in early October, Genscape says.
    • The differential between crude prices in Midland and Houston reportedly narrowed to minus $1.87/bbl this week, after trading as wide as minus $13.20/bbl in April.








  38. I’m a little surprised to see the futures where they are. Would’ve thought they would be down a bit more after AMZN. 





  39. The real reason scientists downplay the risks of climate change


  40. AP source: DOJ review of Russia probe now a criminal inquiry



  41. Dow 650,000 – Didn't even bother to read the article because that's less than a 7% return per year…It's either click bait, or they're trying to sell something.


  42. Both, I think. 

    Trump pulled off a hell of a distraction, they killed the ISIS leader just in time to give a press conference before the Sunday Shows to get the topic off impeachment – very clever.   

    Not clever was Trump gleefully saying he got to watch as he ‘died whimpering and screaming” – WTF is wrong with this guy?