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Tempting Tuesday – China Adds More Stimulus to the Global Excess

What are they so afraid of?

I know I sound like an old curmudgeon, always looking at the downside of all these rallies but doesn't it seem odd that our Governments seem to find it necessary to add various forms of stimulus to economies they keep telling us are great – again?  This week it's China, with the PBOC cutting rates on its Repos for the first time since October of 2015 – sending the Shenzhen Index up 1.8% overnight and even Hong Kong's Hang Seng Index rose 1.5% to the sound of gunfire on the streets exchanged between students and the police.

Having had a day to digest that news, investors seem to believe that the rate cut is indeed a sign of better liquidity on the way, lifting more sentiment-driven stocks in Shenzhen,“ said Bill Chen, CIO at Shenzhen Valley Asset Management Co.  As to the Hang Seng – it was in danger of failing 26,000 and turning negative for the year and China doesn't want it to look like the protests are affecting their business – even though they clearly are.  

Image result for china state media cartoon"In fact, the headline in the South China Morning Post is:  "Hong Kong's Stock Market Bulls Shrug Aside City's Street Protests" saying: "42% investors surveyed by Bright Smart Securities expect the Hang Seng Index to rise 5% next year, while only 6% see it declining from the current level." 

Apparently, 52% of the investors were hiding from the Government surveyors…  “The protests may have led Hong Kong’s economy into a technical recession in the third quarter, but the survey shows Hong Kong investors are cautiously optimistic about the stock market next year,” said Edmond Hui, chief executive of Bright Smart Securities.

Image result for fox news memesCan you imagine living in a near-totalitarian state where the Government controls the news?  That must be creepy!  Almost as creepy as the fake world over at Fox where the mountains of evidence against the President are still being called a "Witch Hunt" and attempts to hold our leader accountable is "A Coup" when, not only is it IN the Constitution – IT'S THE WHOLE POINT OF HAVING A CONSTITUTION!!!

I mean, come on people – how much evidence do you have to hear?  For those of you having trouble following the bread-crumbs left by Team Trump on just the first likely count of Impeachment, the Ukraine call, here's Set Meyers to summarize:

Seems pretty clear, right?  And the witnesses aren't even done.  But, if you tune over to Fox, none of this is real.  In reality, 70% of Americans now believe Trump did, in fact, do something wrong with the Ukraine yet the same poll shows "only" 51% think he should be removed from office – so far.  It's still early innings in this ordeal but, unfortunately, the 30% who don't believe the evidence are also still buying into the market – as if none of this stuff matters or will matter.  I'm pretty sure it does.  

We are still mostly sitting out of this quarter but we did start a new Short-Term Portfolio and that's already up 46.9% – so it's not like we're sitting on our hands – just still waiting for the correction that never seems to come.  Meanwhile, at this pace (up 46.9% since 10/1), call it 30% a month and our $100,000 investment will become $2.3M by next October!  See how silly this is?  We're making TOO MUCH MONEY – this can't possibly be sustainable.

Still, let's enjoy it while it lasts…

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  1. Good Morning!

  2. From Art Cashin's daily market comments:

    By the closing bell, the Dow and S&P managed to hang on to some of their small gains to close, yet again, at
    record highs. The only negative to the action was that declines beat advances on a day we closed at record
    highs. Could be a small "check engine" light.

  3. M

    Macy's alerting customers to credit card breach, according to Axios  

  4. Jordan says US settlement decision is ‘entrenching occupation’

  5. From Yardini's blog:

    The Fed’s May 2019 Financial Stability Report nailed it, as follows:

    “[T]he distribution of ratings among nonfinancial investment-grade corporate bonds has deteriorated. The share of bonds rated at the lowest investment-grade level (for example, an S&P rating of triple-B) has reached near-record levels. As of the first quarter of 2019, a little more than 50 percent of investment-grade bonds outstanding were rated triple-B, amounting to about $1.9 trillion.”

  6. Cartoon: That’s infotainment!

  7. Not currently in M.

    Sold some Feb 14 puts.

    Hack plus KSS earnings miss weighing on the stock.  Might go lower.

  8. This would be a good start:

    The federal government could have $535 billion more in its coffers in the coming decade if the Internal Revenue Serviceaudited returns as often as it did back in 2011 — when audit rates were higher than they are now — and focused those audits on millionaires and billionaires, Summers said.

    High-net-worth returns may take more time to review, but they are well worth the time investment, according to the research. “Under-reporting is more than five times as high for individuals who earn $10 million or more annual than it is for those who make under $200,000 a year,” Summers wrote.

    Clearly a feature in the system, not a bug though. Expect no action except maybe more auditing of people getting EIC!

  9. Good morning!  

    There's nothing I'm reading (above) that makes me want to commit more cash to this madness. 

    In fact, in the STP, it's time to sell more TSLA calls.  Let's sell 5 of the Dec $365 calls for $10 ($5,000).

    Also, let's buy back the 2 BKNG short Jan $2,000 calls at $10 ($2,000), not because I think we're going back to $2,000 but because we already made $142 on them and, if there's a bounce, I want the slot free to sell more calls.  It also drops $20,490 CASH!!! back into the portfolio – so we can play with something else.


    Cashin/Pstas – It's still a narrow rally on very low volume.  We accept it as the "new normal" but we shouldn't.  

    M/Albo – These guys simply can't keep our information safe and we shouldn't be giving it to them!  Going to be a win for AAPL as you can use ApplePay and keep your info secret.  I think it's going to spread.

    Popular US department store chain Macy’s has revealed that its website was hacked with malicious scripts in an attempt to steal customers’ payment information.

    According to Bleeping Computer, the online storefront — — was infected with “unauthorized code” on October 7 to its ‘Checkout’ and ‘My Wallet’ pages, allowing the bad actor to capture credit card data. Macy’s said it was alerted to the situation on October 15, a full week after the site was breached.

    It's simply not possible for thousands of companies to hire people who are good enough to write hack-proof ECommerce sites.  Plus there's scams everywhere.  One Christmas, my daughter said it was an "Emergency" to get on this web site and order Kanye West sneakers as they were one of the only ones with them in stock but, when I went to the site, there were some things that looked strange to me and it turned out the whole site was a hoax – but all her friends had already given it their CC info – and none of them ever got any sneakers…

    Meanwhile, M is down 10%, hurting the Dividend Portfolio

    Credit/Pstas – There's a canary for you! 

    Image result for dead canary"

    Ouch, markets turning down hard.

  10. Hong Kong: police say surrender is only option for protesters

  11. Italy Moves toward Legalising Cannabis… for Everyone

  12. Well, I was just thinking I want to get some Crisper but too late!

    This was why I was going to jump in this morning – totally wrong read of the study at the open:

    CRISPR Therapeutics down 4% premarket on initial CTX001 data

    • CRISPR Therapeutics (NASDAQ:CRSP) slips 4% premarket on light volume following its announcement of preliminary data on two patients with severe blood disorders treated with gene therapy CTX001 in Phase 1/2 studies.
    • One patient with transfusion-dependent beta thalassemia who required 16.5 transfusions/year received CTX001 in Q1, followed by neutrophil engraftment (33 days after CTX001 infusion) and platelet engraftment (37 days after CTX001 infusion). At month nine, the patient was transfusion independent with total hemoglobin levels of 11.9 g/dL (normal range for women: 12.0 – 15.5 g/dL, men: 13.5 – 17.5 g/dL), 10.1 g/dL fetal hemoglobin, and 99.8% F-cells (erythrocytes expressing fetal hemoglobin).
    • On the safety front, two serious adverse event occurred: pneumonia in the presence of neutropenia and veno-occlusive liver disease, both subsequently resolved and neither considered CTX001-related.
    • One patient with sickle cell disease (SCD) who experienced seven vaso-occlusive crises (VOCs) per year received CTX001 followed by neutrophil and platelet engraftment 30 days later. At month four, the patient was VOC-free with total hemoglobin levels of 11.3 g/dL, 46.6% fetal hemoglobin and 94.7% F-cells.
    • Three serious adverse events occurred: sepsis in the presence of neutropenia, cholelithiasis (formation of gallstones) and abdominal pain, all subsequently resolved and none considered related to CTX001.
    • The company explains that participants in the trials have progenitor cells collected from peripheral blood. They are edited with CRISPR/Cas9, then reinfused back into the patient as part of a stem cell transplant that includes myeloablative busulfan conditioning (bone marrow is destroyed with chemo and radiation), a very intensive process with side effects, some serious.
    • CRSP will host a conference call this morning at 8:00 to discuss the results.
    • Related ticker: Vertex Pharmaceuticals (NASDAQ:VRTX)

    The main point is that CRISPR generally works and will be a huge force in the future.  

    Ah, blame Williams for taking away the punch bowl:

    Monetary policy is in the 'right place', Fed's Williams says

    • The Federal Reserve has interest rates at an appropriate level for the U.S. economy, said New York Fed President John Williams said at an event today.
    • Monetary policy is "in the right place" and "the economy is right where we would like it to be," he said.
    • His comments echo those of other Fed policymakers, like Fed Chair Jay Powell, who have said the economy is in a "good place" and that the current monetary policy stance is "appropriate."
    • Traders appear to agree. The CME FedWatch Tool puts the probability of the Fed funds rate (currently 1.50%-1.75%) staying where it is at 99% at the December FOMC meeting.
    • The head of the New York Fed always has a vote on the monetary policy-setting Federal Open Markets Committee.
    • Previously: Trump doubles down on lower rates at Powell meeting (Nov. 19)

    Europe was already failing:

    Glad we waited on /RB

    Big lead for Airbus at Dubai Airshow

    • Besides bids for 50 737 MAX jets, Boeing (BA +0.6%scored its second Dreamliner contract at Day 3 of the Dubai Air Show, selling three 787-9s to Ghana and bringing its total firm/provisional commercial orders at the event to 65.
    • That's about one-third of the orders scored by Airbus (OTCPK:EADSY +0.6%), which won new deals for some 180 jets this week.
    • The French planemaker has been ahead for most of 2019. At the end of October, Airbus had posted 542 net orders vs. Boeing's 45.

    ConocoPhillips' 10-year plan foresees $50B of free cash flow

    • ConocoPhillips (COP +1.5%) outlines a 10-year operating and financial plan targeting free cash flow of ~$50B and annual capital spending that averages less than $7B over the next decade.
    • The plan, presented at its annual Investor Day, projects $30B in share buybacks and $20B in dividends over the 10-year period funded from free cash flow, representing a combined annual shareholder payout that exceeds the company's distribution target of more than 30% of cash from operations.
    • The plan forecasts underlying compound annual production growth averaging at least 3% and expects growth in return on capital employed of 1-2 percentage points annually.
    • COP also says it plans to sell a 25% stake in its Alaska assets, "consistent with the company's historical practice of not funding major-project expenditures at 100%."
    • COP says its plan "demonstrates sustained value creation through significant free cash flow generation, distinctive returns of capital and growing returns on capital."

    E-Commerce retail sales up 5% Q/Q

    Chain store sales fall back from recent pace

    • Chain store sales increased 4.1% for the week ending November 16 in a deceleration from recent weeks, according to the latest report from Johnson Redbook.
    • Month-to-date sales for November up 4.5% through November 16.

    Housing starts roughly inline in October

    • October Housing Starts+3.8% M/M to 1.314M vs. 1.320M expected, 1.266M prior (revised from 1.256M).
    • Building permits 1.461M vs. 1.378M expected and 1.391M prior (revised from 1.387M).

    Athenex up 28% on expected positive data on oral paclitaxel

    • Athenex (ATNX +28.1%) jumps on more than 60% higher volume on the heels of its announcement that an abstract on its Phase 3 clinical trial evaluating Oral Paclitaxel (oral paclitaxel and oral absorption technology encequidar) in metastatic breast cancer has been selected for the press program at next month's San Antonio Breast Cancer Symposium. The presentation is scheduled for Friday, December 13 at 3:15 pm Central Time.
    • The title, "The first orally administered paclitaxel shown to be superior to IV paclitaxel…" clearly signals the outcome

    Apple's iPhone 11 'massive' success – Wedbush

    • Wedbush analyst Daniel Ives says the firm is seeing a "very strong" demand trajectory for Apple's (AAPL -0.1%) iPhone 11 despite trade concerns.
    • The device has seen "massive" success in China, the U.S., and Europe.
    • CEO Tim Cook will head to Texas tomorrow with President Trump to visit Mac Pro production facilities. Ives calls this a "key strategic visit" due to Cook's "careful balancing act" navigating the US-China trade tensions.
    • The analyst says the proposed additional 10% tariff coming on December 15 could ultimately result in a 4% hit to Apple's EPS, but Ives thinks this is unlikely.
    • Ives reiterates his estimate of 190M+ iPhone sales for FY20.
    • Wedbush maintains an Outperform rating and Street-high $325 target. Apple has a Bullish average Sell Side rating.

    AT&T -2.5% as Moffett cuts to Sell on weaker fundamentals

    1% is called "high-yield" now!  Citi launches high-yield online checking

    • Following a wave of digital-only banks, Citibank (C +0.3%introduces a digital high-yield checking account that offers unlimited ATM reimbursements nationwide while paying interest of up to 1% for U.S. customers who live outside of the bank's physical branch footprint.
    • In addition to full reimbursement for all out-of-network ATMs, Citi Elevate Checking currently pays 1% for accounts with balances of $25K and above. The rate is 0.4% for balances between $10K and $25K and 0.2% for balances below $10K.
    • A monthly fee of $15 is waived for accounts with average monthly balances of $5K or more.

    MSG Networks -4.5% as Guggenheim cuts to Sell

    • MSG Networks (NYSE:MSGN) is 4.5% lower premarket after Guggenheim cut its rating to Sell from Neutral, as the company heads into key contract renewals.
    • Altice USA and Comcast together make up about 40% of MSGN's subscriber base, the firm figures, and they've both headed for renewal talks. Meanwhile, MSGN is in a challenging position with relatively high affiliate rates paired with low audience levels.
    • Regional sports nets are heading into a period of "increased financial pressure" overall, analyst Michael Morris says.
    • He's affirming a target of $15, implying 19% downside.

    Too soon?  Another fatality at Great Panther Mining

    Image result for fatality animated gif"

    • Great Panther Mining (NYSEMKT:GPL) reports its second fatality in less than 10 days, as a worker has died at its Coricancha mine complex in Peru.
    • GPL says it is investigating the death, which occurred in an accident at the processing plant on Nov. 17.
    • A contractor employee at the San Ignacio underground mine in Mexico died on Nov. 8 during a rockfall incident.

    PG&E nears $1.7B settlement tied to 2017 California wildfires – Bloomberg

    • PG&E (NYSE:PCG) is on the verge of a settlement with California regulators in which the utility would pay more than $1.7B in penalties for failing to properly maintain equipment involved in sparking wildfires in 2017, Bloomberg reports.
    • PG&E reportedly would invest $50M in corrective measures, with the rest of the settlement involving money it already has spent on maintenance and inspections that it would be barred from recovering from customers.
    • The enforcement division of California's Public Utilities Commission and PG&E said on Friday that they had reached an agreement in principle on the penalty case, but they did not outline the details of the arrangement.
    • The settlement does not cover any potential violations tied to wildfires that broke out in 2018, including the Camp Fire.

    Broadcom +2% after Street-high target

    • Morgan Stanley upgrades Broadcom (NASDAQ:AVGO) from Equal-Weight to Overweight and raises the target from $298 to $367.
    • Analyst Craig Hettenbach cites "increased confidence" in AVGO's software strategy.
    • Hettenbach sees Broadcom as "particularly well positioned in the Data Era" since the company can build on its market lead in semis while routing FCF into software.
    • Morgan Stanley also names Broadcom as a Top Pick due to a risk profile that's "significantly more compelling than our broader semis coverage."
    • AVGO shares are up 2% pre-market to $317.38.
    • Broadcom has a Bullish average Sell Side rating.

  13. From yesterday:

    Trump, Powell meet and talk about 'everything'

    • President Trump, Federal Reserve Chairman Jay Powell, and Treasury Secretary Steven Mnuchin met at the White House to discuss a variety of topics today.
    • Trump called the meeting "very good & cordial," adding that "everything was discussed," including interest rates, negative interest, low inflation, easing, dollar strength, and its effect on manufacturing, trade with China, the EU "& others, etc."
    • According to a statement from the Fed, Powell didn't discuss his expectations for monetary policy, "except to stress that the path of policy will depend entirely on incoming information that bears on the outlook for the economy.
    • Powell also said that he and his colleagues on the central bank's FOMC will set monetary policy to support maximum employment and stable prices and "will make those decisions based solely on careful, objective, and non-political analysis."
    • The Dow rebounds to flat and the Nasdaq (-0.2%) and S&P (-0.1%) pare earlier losses.
    • 10-year Treasury yield, down 3 basis points at 1.80%, is little changed from earlier in the session.
    • The Dollar Index slips 0.3% to 97.73.

    Trump doubles down on lower rates at Powell meeting

    • "Just finished a very good & cordial meeting at the White House with Jay Powell of the Federal Reserve. Everything was discussed including interest rates, negative interest, low inflation, easing, Dollar strength & its effect on manufacturing, trade with China, E.U. & others, etc.," President Trump tweeted late Monday.
    • "I protested fact that our Fed Rate is set too high relative to the interest rates of other competitor countries," adding that it should be lower than theirs.
    • Trump has slammed the central bank dozens of times this year, calling Powell a "terrible communicator" and an enemy of the state.

    Congress races to avoid government shutdown

    • The House will vote today on a stopgap bill to prevent a government shutdown at midnight on Thursday.
    • While Congress passed a two-year agreement to set budget levels and suspend the U.S. debt ceiling earlier this year, lawmakers have failed to come to terms on where to allocate the money amid disagreements over immigration and military funding.
    • The Senate and White House will likely support the continuing resolution, hoping to avoid another partial government shutdown like the record-long one that began late last December.

    Airbnb may choose direct listing over IPO

    • "We're not ready to announce anything, but you know the No. 1 reason that people do a traditional IPO is they need the money," Airbnb (AIRB) CEO Brian Chesky told CNBC's Jim Cramer. "We don't need the money."
    • "Our large shareholders, most of our large investors, have told us they intended to hold the stock for a long time and they actually were doing the opposite of pressuring us to go public," he added. "We think next year will be the right time for us."

    FedEx discontinues pension for new hires

    • Joining the growing ranks of large U.S. companies phasing out guaranteed retirement benefits, FedEx (NYSE:FDX) is closing its pension plan to new U.S. hires starting in 2020.
    • The shipping giant instead will launch a new 401(k) plan at the start of 2021 with a higher company match (contributing up to 8% of employee salaries, if employees provide 6% of their salary).
    • Just 22% of Fortune 50 companies and 11% of transportation companies offer pensions to new employees.

    SunPower selected to build JFK Airport solar project

    • The Port Authority of New York and New Jersey says it awarded a 13 MW solar project for the John F. Kennedy International Airport to SunPower (NASDAQ:SPWR) and Goldman Sachs Renewable Power Group.
    • The project, which will be New York City's largest solar project, will include ~7.5 MW of battery storage

    DOJ moves to scrap decades-old movie distribution rules

    • The Justice Dept. is moving to throw out the "Paramount decrees" -- which would upend decades of regulations covering movie distribution.
    • It's proposing an end to 70-year-old consent decrees that prohibited film studios from owning theaters.
    • Those decrees are a relic of the past, antitrust chief Makan Delrahim said in a speech to the American Bar Association.
    • "We have determined that the decrees, as they are, no longer serve the public interest, because the horizontal conspiracy — the original violation animating the decrees — has been stopped," Delrahim said.
    • In particular, those decrees clamped down on "block booking" — selling multiple films as a package rather than separately — and "circuit dealing," where studios have one contract with all theaters under a single circuit. Bans on those two practices now face a two-year sunset period.
    • In practice, it could mean more rapid consolidation of theater ownership into majors; about half of America's 40,000 movie screens are controlled by three exhibitors: AMC Entertainment Holdings (NYSE:AMC), Regal Cinemas/Cineworld (OTC:CNWGY) and Cinemark Holdings (NYSE:CNK). After hours: AMC +1.5%CNK +1.2%.

    New lawsuit seeks to pin blame for 737 MAX on Boeing's board

    • Boeing (NYSE:BA) directors were careless in their oversight of the 737 MAX and failed to react promptly after two fatal crashes, says a new shareholder lawsuit seeking to hold company board members accountable.
    • The directors missed repeated red flags during development of the MAX's automated flight control systems and then failed to properly test the new system or adequately train pilots, alleges the lawsuit filed today in Delaware by Boeing shareholder Kirby Family Partnership.
    • Along with the subsequent grounding of all 737 MAX aircraft, the board's actions hurt the company "through loss of credibility in the marketplace, a damaged reputation and billions in potential business costs and liability."
    • While the company already faces dozens of claims from families of victims, the latest lawsuit may be the first to target directors for their role in the crashes.

    Apple announces Dec. 2 press event

    • Apple (NASDAQ:AAPL) announces a press event "honoring our favorite apps and games of 2019." The event will start at 4 PM ET on December 2 in New York City.
    • The event will likely replace Apple's typical press release detailing its top apps and games of the year.
    • Post updated with more information.

    Well, I guess he has a point:  A meaty situation for Burger King

    • Burger King (NYSE:QSR) faces a lawsuit over meat contamination of its popular Impossible Whoppers, which are supposed to be a plant-based alternative to beef burgers.
    • A customer in Atlanta says his Impossible Whopper was cooked alongside regular Whoppers and coated in meat byproducts.
    • The legal action asks for Burger King to be ordered to disclose that Impossible Whoppers and regular burgers are cooked on the same grills.
    • Impossible Foods (IMPSBL) is not named in the lawsuit.

    Banks will need more capital buffers in a downturn, Rosengren says

    • Boston Fed President Eric Rosengren says U.S. banks will need additional capital buffers and more support from fiscal policy in a downturn because of the recent interest rate cuts.
    • "We don't have much room," Rosengren said in an interview on Bloomberg Television.
    • Currently, the economy is "in a good place," he said.
    • Also, he adds that he's not in favor of negative rates, especially in the U.S., as they would be disruptive.

    PG&E loses half of financial backing for bankruptcy plan

    • PG&E (PCG -4.9%) says it now has $7.4B in commitments from investors willing to help finance its restructuring plan, about half of what it had last month.
    • PG&E replaced its previous agreements with new ones over the weekend and is planning to raise another $4.6B by Dec. 6, the utility says in a new SEC filing.
    • Several of PG&E's previous backers are missing from the new list, including multiple Fidelity funds, Soros Fund Management and the D.E. Shaw Galvanic Portfolio; PG&E had more than 100 commitments last month but now has just over 20.
    • PG&E says it believes it remains on track in securing a restructuring plan confirmed before a June 30, 2020, deadline set by California lawmakers, but Bloomberg says the disclosure could signal the company is struggling to line up financing as it works to emerge from bankruptcy.

    Barrick gearing for more asset sales while considering more copper

    • Barrick Gold (GOLD +1.7%) is eager to beat its $1.5B asset sale target after offloading its half of the Super Pit gold mine in Western Australia, CEO Mark Bristow says.
    • The Barrick boss is not commenting on specific assets but analysts say the Lumwana copper mine in Zambia and Massawa gold mine in Senegal are likely next candidates, although neither are among the Tier 1 mines Barrick has said it will focus on.
    • The miner also is mulling whether and how much to extend its copper business to capitalize on growing demand for the metal in low-carbon technologies, Bristow says, noting that expanding in copper would help satisfy the growing number of investors that screen miners based on environmental, social and governance guidelines.
    • "If you really believe in less carbon, lower carbon footprints and a more modern economy and lifestyle for humanity on this planet, you have to believe in copper," the CEO says.

    Barrick to sell Super Pit mine share for $750M

    • Barrick Gold (NYSE:GOLD) says it agrees to sell its 50% stake in Kalgoorlie Consolidated Gold Mines in Western Australia to Saracen Mineral Holdings for $750M.
    • Newmont Goldcorp (NYSE:NEM), which once expressed interest in owning the entire site, retains the other 50% of the joint venture.
    • Barrick says the sale is the first step in its plan to realize at least $1.5B from asset sales by the end of next year.
    • Kalgoorlie's Super Pit is one of Australia's largest gold mines, with average production of 660K oz./year.

    Green light for world's largest casino company

    • The merger between Caesars Entertainment (CZR +0.7%) and Eldorado Resorts (ERI +2.5%) is expected to go off in the first half of 2020 after regulatory approvals are secured.
    • Shareholders of both companies approved the combination last Friday.
    • Eldorado will pay $7.2B in cash and dole out 77M shares of stock to acquire 51% of Caesars. Eldorado also swallows up Caesars' existing debt.
    • The new Caesars-named company, which will have 60 casino properties with 51K hotel rooms, will be the largest casino player in the world based off gaming assets.
    • The Caesars-Eldorado deal arrives with MGM Resorts (MGM +1.2%) in an asset-shedding mode.
    • Source: Press Release

    Nat gas prices plunge on milder weather, ample supplies

    • Natural gas futures fall sharply following predictions of moderating temperatures next week, after a frigid start to November drove prices up earlier this month; at last check, December Nymex gas (NYSEARCA:UNG-4.3% to $2.571/MMBtu.
    • "The lack of significant cold in the upcoming period is bad news for a market dependent on continual stronger than normal heating demand to keep oversupply at bay this winter," Gelber & Associates says.
    • Prices also are under pressure from strong supply, as U.S. stockpiles rose more than expected during the week ended Nov.8 to total 3.73T cf, ~15% above last year at this time and roughly flat vs. the five-year average, according to the the Energy Information Administration.

    Fed's Mester would have preferred no rate cuts in July, September

    • While the Fed's Federal Open Market Committee voted at its last three meetings to cut its benchmark rate by 25 basis points each time, Cleveland Fed President Loretta Mester would have preferred to keep rates unchanged at the July and September meetings, she said in a speech at University Heights, OH, today.
    • "My preferred strategy was to take action only if there were evidence of a material deterioration in the outlook and not merely on heightened risks," said Mester, who gets a vote on the FOMC next year.
    • In coming months, she'll be looking for signs that weakness in business investment and manufacturing may spill over to hiring and household spending and for signs that long-run inflation expectations are "destabilizing."
    •  "Absent those signs, with labor markets strong and growth near trend, maintaining a shallow policy path for a while to support a gradual rise in inflation and not overreacting to shocks that might, for a time, move inflation somewhat above 2% would be appropriate, in my view," Mester said.

    World trade to remain below trend as tensions continue, WTO says

    • The World Trade Organization's Goods Trade Barometer indicates that world merchandise trade is likely to stay below trend into Q4.
    • Indices for international air freight, electronic components, and raw materials have declined further below trend, the WTO says, while indices for export orders, automotive products, and container shipping have firmed up.
    • In September, WTO economists cut their trade growth expectations for this year to 1.2% vs. the 2.6% forecast in April, citing slowing economic growth, increased tariffs, Brexit-related uncertainty, and shifting monetary policy stance in developed countries.

    TikTok exploring distancing itself from China roots – WSJ

    • Facing tensions between its fast rise in the United States and its Chinese roots, social-media firm TikTok is looking to distance itself from China in various ways, The Wall Street Journal reports.
    • It's looking at expanding operations outside China (such as into Singapore), as well as cutting Chinese content in the app and potentially rebranding the service in the U.S., according to the report.
    • That comes as investors in TikTok owner ByteDance (BDNCE), including SoftBank (OTCPK:SFTBY), see U.S. growth as key to a 2020 initial public offering.
    • A company spokesman says an IPO isn't its focus, moving HQ to Singapore isn't under consideration, and there's no discussion to change TikTok's brand name.

    Airbnb signs $500M Olympics deal

    • Airbnb (AIRBinks a nine-year deal with the International Olympic Committee to provide accommodations.
    • Financial terms weren't disclosed, but Financial Times says the deal is worth $500M.
    • The tie-up will run from the Tokyo games next year until 2028, which will include five Olympics and Paralympics events.
    • The AIRB accommodations are meant for visitors, athlete families, and officials. Athletes will still stay in Olympic village.
    • Airbnb plans to go public next year.

  14. I'm heading off to the radio show at 2pm – starts at 2:30

    This is the problem with Dividend Portfolios – they are so dull!!!  We have 9 positions and have used up all of our cash (+$16,000, in fact) and half of our buying power but I'm certainly not comfortable pushing it from here so now there's nothing to do for 2 years but clip coupons.  Even M, who took a tumble today, are still on target for our $15 goal (we have been generally conservative).

  15. Phil

    Do we currently have a position in MJ


  16. Sadly, we do have MJ, it's in the STP above and also in the Hemp Boca Portfolio.  

    In Hemp Boca (since we're on the subject), we're going to make the following changes on the show:

    • Sell 5 TAP 2022 $50 puts for $8 ($4,000) 

    • Roll 5 short MJ 2021 $30 puts at $14.30 ($7,150) to 10 short 2022 $20 puts at $7 ($7,000) 
    • Buy 20 MJ 2022 $15 ($4.70)/$22 ($2.50) bull call spreads at $2.20 ($4,400)

    We're also going to add a play on M as follows:

    • Sell 5 M 2022 $15 puts for $4.60 ($2,300)
    • Buy 15 2022 $13 calls for $4.20 ($6,300)
    • Sell 15 2022 $20 calls for $2.05 ($3,075)

    That's net $925 on the $10,500 spread so $9,575 (1,035%) upside potential at $20.  Ordinary margin requirement is just $2,950 so a very efficient way to make $9,575 in two years if all goes well!

    M earnings are on Thursday, by the way…

  17. We can also add M to the Earnings Portfolio as follows:

    • Sell 5 M 2022 $15 puts for $4.60 ($2,300) 
    • Buy 15 M 2022 $13 calls for $4.20 ($6,300) 
    • Sell 10 M 2021 $15 calls for $2.75 ($2,750)

    This is a little more aggressive than our $50,000 Hemp Boca Portfolio and we can always roll the short $15s higher if M really pops but, if not, they expire a lot sooner and we can sell more calls and roll down the long $13s if earnings are a disappointment.  Net here is $1,250 – not too much more and the same or very possibly better upside potential.

  18. Phil what happened to the APHA play looks like that stock is going to pot!!!!????

  19. APHA/Yodi – I don't remember ever playing that one.  Having a good day today though.  

    I mentioned it yesterday in the context of talking about TCNNF and APHA does have some earnings and maybe some potential but still running at a loss for now.  They do have options and you can sell the 2022 $5 puts for $2.90 for net $2.10 – I think that's a worthwhile way to play them and the 2022 $5 calls are only $1.10 so if you do 10 and 10 it's still a net $1,000 credit and your worst case is entering at net $4 – where it is now. 

    Off to the radio!

  20. Phil/Portfolios,

    So we have Hemp Boca, Earnings, Dividend and Money Talk Portfolios. What is the purpose of Hemp Boca portfolio? Is it just for that specific audience like the Money Talk?


  21. Thanks Phil we entered a play in Feb. I got Jan21 5 and 7.5 call against short Jan21 12.5

  22. Hi Phil,

    You still feel ok with T after the downgrade? I missed it initially and was thinking of using this as an opportunity to start a position….

  23. Please excuse the repost..not sure but my post is not showing above.


    On 08/277/2019 with TAP@$50.07, I bought the Jan 2020 $50/$60 bull-call spread for net $5.54.

    Tap reached $59.50 in the days leading up to the 08/31 Earnings:



    They said there was a one-off goodwill impairment charge and announced restructuring plans which people said they'd already heard from TAP before.


    What are my options now?  Do I roll over to 2021 or 2022, and/or roll down as well?   Or--I know you say the first rule is Don't Lose Money--but is this a lost cause and do I just pray for a TAP rally to $55.50 by Jan 2020 to break-even?

  24. Phil / TAP --

    My graphic didn't show up and I can't edit post, so here's the link:

  25. Phil. LABU – holding above 40 any thoughts on this?

  26. Just got back in will try to catch up in the morning.  

    Futures turned down a bit as the Senate passed a bill regarding Hong Kong or autonomy.