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Forward-Looking Thursday: Will Things Ever Get Back to Normal?

When will things get back to normal?  

That's the question on everyone's mind these days and it's very hard to get a clear answer.  As you can see from the chart on the right, the global lockdown does seem to be flattening the curve and China has been getting back to work without too many new cases popping up but it's still 45 new cases today – certainly what a Capitalist is going to call "acceptable losses" in the context or restarting the economy.  

China's lockdown began 45 days ago and our lockdown began 30 days ago while South Korea (52M people) never had a lockdown but instead went with testing at a very early stage (they had their first case the same day the US did).  Testing and early detection have given South Korea the lowest death rate from the viurs in the World, with just 169 deaths out of 10,000 cases discovered.  Rather than rely on people with symptoms volunteering to be tested, SoKo authorities took a proactive approach which helped identify cases without symptoms which may have otherwise gone on to spread the virus further.

Using technology developed during the MERS outbreak, authorities were able to track cases using credit card records, GPS and security camera footage to find who those individuals came into contact with and ensure they were tested too.  The government sent texts out to residents informing them when a case was discovered nearby and allowed access to its tracking data.  Many chose to self-quarantine, and using the tracking data, they could also see which public spaces were high-risk areas for infection and should therefore be avoided.

Coronavirus: What can the Bay Area learn from South KoreaNow, unlike many other ghost towns across the world, South Korea’s cities are full of people going about their usual business. Crucially, many are practicing social distancing and almost everyone is wearing face masks.  To counter the risk of travelers from abroad spreading the virus, authorities announced on Wednesday strict rules for anyone arriving from abroad, including a mandatory two-week quarantine.

Like many Asian countries, South Korea also has extensive spraying campaigns to sterilize all public areas to prevent the virus from lingering and accumulating day by day.  To me, this is encouraging because the virus CAN be controlled – the only problem is we have an inept Government that is doing NONE of these things with a President who is so eager to declare "Mission Accomplished" that he doesn't care how many lives he puts at risk by sending Americans back to work without any of these proven protections in place.  

During a series of phone calls with the President yesterday, Banking and financial services executives told Trump that his Administration needed to dramatically increase the availability of coronavirus testing before the public would be confident enough to return to work, eat at restaurants or shop in retail establishments. 

Coronavirus cartoons: Trump's ratings jump amid big job lossesWhile Trump summarized things by saying at yesterday's briefing that "The data suggests that nationwide we have passed the peak on new cases" the reality is that the US had a record loss of 2,569 lives yesterday, bringing out total over 28,000 with a 10% gain on the day and, as of this morning, we have 640,000 infections – 30% of the World's total 2,076,415 – even though we have just 4% of the World's population so, very simply, 8 times the average infection rate of the rest of the planet – despite us inflating the whole planet's curve by 30%!  

Things can't get back to "normal" until either Trump recognizes the failure of his current policy and starts doing what the rest of the World is doing or until we, the people, recognize the President's failure and do something about that – and this can't wait until November!  If Trump refuses to take this crisis seriously and continues to sacrifice American lives on the alter of his ego, then it's up to State Governors to take matters into their own hands and override the President's GUIDELINES (because he's not actually in charge).

There's also talk of invoking the 25th amendment and removing Trump from office due to incompetence but you need 2/3 of both houses and that would mean 21 of 53 Republican Senators would have to agree with that plan, so it's more likely going to be up to the Governors and their State Legislators to show some backbone – otherwise we could be suffering through this crisis for the rest of the year if we try to re-open too early without taking sensible precautions.  

Fans Claim The Simpsons Predicted Coronavirus Outbreak In 1993 ...We are only about 2 weeks away from Trump's incompetence leading to 60,000 deaths – that's more than the 58,220 lives that were lost in the 23-year Vietnam War!  I apologize if I am offending Trump fans and maybe it makes you feel better to blame China or blame the World Health Organization or blame whoever Trump/Fox is blaming today but the FACT is the whole World has the same World Health Organization but it's the US (and the EU) that has 8 times more infections and on track for a similar surplus of deaths.  

Are you just going to sit there and cower in your home or are you going to do something about that?  

Spain (46M), Italy (60M), Germany (83M), France (66MM) and the UK (66M) have essentially the same population as the US and have 716,822 infections between them with Germany bringing down that curve and we'll keep an eye on what they do in the next few weeks.  Germany has a ban on large public events, from soccer matches to concerts, that will be extended until Aug. 31, and restaurants and bars would remain closed as well but small stores will be allowed to re-open on May 4th, providing they follow health and safety guidelines.  

“We must not be hasty,” Ms. Merkel said. “We must learn to live with the virus as long as there is no therapy and no vaccine. This is about the lives of people.”

European Union officials earlier Wednesday set guidelines for ending national lockdowns and urged the bloc’s 27 member governments to coordinate their moves.  If it works and we can all begin getting back to work over the next 60 days – our GDP is $1.5Tn per month and it's 30% down for the first month (March 15th-April 15th) so that's $500Bn and let's say were 30% down for Month 2 ($500Bn) but only 15% down in Month 3 ($225Bn) and 10% down for the rest of the year ($900Bn) – that would be a $1.625Tn hit to the economy and the Government already put aside $2.2Tn, so we can get through this crisis – we just have to start doing the right things! 

 


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  1. Good Morning.



  2. Could not post the Big Chart yesterday as I was recovering from a case of stupefaction from the BS and insanity coming from the White House seemingly every day now! 

    There is no level of accountability displayed – Trump wants to open the economy but if things go bad again, he will hold the governors accountable! WTF, really, WTF! What happened to that great conservative value of personal accountability – it applies only to Dems governors, mayors, presidents, unemployed people and food stamps recipients? People are dying and our standing in the world is at the lowest it has been in my lifetime. When we could be leading to find solutions, we create problems. When we could be the example to follow, we are the example of a failure. Really, WTF! 

    I am in NJ and we have about 60K cases here. Who is going to go back to movies, stadiums, restaurants, planes when one person out of every 150 is infected and you don't know who. You could have 400 people infected at an Eagles game infecting another 1000 people. Or 3 people infected in a plane. Or 2 of them at the movies. Not going to go out until we can test more people and there is no action from the WH on that level. It's down to the states to compete against each other for resources…  Seriously! </rant>


  3. There is only one way to get rid of the virus in the US, get rid of that clown what a stupid ?*?*. Putting his name on donors check just to remind people what ?*?* he is.

    Are there any normal people in this Government?


  4. With sales tax revenue off a cliff and medicaid payments and unemployment payments likely going way up, I wonder if shorting HYD or MUB or something similar is a good play. Thoughts? 


  5. Good Morning

    Yodi—u are so right


  6. Good morning, All! 

    The webinar replays are now available!

    YouTube:

    https://youtu.be/vazSeSYPCV0


  7. is anyone aware of how much the demand for ng is estimated to be down due to shut downs maybe an increase due to homes heated more and decrease due to businesses using less



  8. dawg/MUG – Looks interesting as they are almost back up to pre-crash levels.


  9. So more than 5M more people claiming unemployment! No wonder we want to re-open for business soon! But read the stories from China – things are not back to normal at all yet. Lots of businesses are at 50% of where they were before the virus and 1 month after the lockdown over. It's going to take a while and do more damage. And lots of blame will end in the WH!


  10. Get back to normal?

    it sounds incredulous that our President would reopen the economy without putting in place the safeguards necessary.

    The only reason I am not particularly upset is because I seem to have seen this kind of ineptitude and bravado before when I was much younger, on a different continent, under essentially dictator governments. It seems no different and maybe I am a little jaded


  11. Phil/AMZN

    seen the 20% gain in 2 weeks. 
    I know online sales are all we have right now but will AMZN make 20% more in profits.

    Maybe, but it kinda seems a little (a lot) overdone?


  12. CCJ/ closed position


  13. Good morning!

    Big Chart – Not too much damage yesterday.  As long as Nas over the 50 dma there's plenty of hope.

    NJ/StJ – I still talk to people who are Conservatives and watch Fox ("because those other newscasts are so depressing") and think the virus scare is overblown Liberal BS and that the good Governors are the ones that are brave enough to open their states for business.  This is what people want to believe because it's nicer than worrying about reality.

    Normal/Yodi – Normal is in the minority. 

    HYD/Dawg – Just too much Fed meddling to pay with that stuff to me.  I would think you can see that from the recent vol.  Also, the options don't go out long and they are very thinly traded – that's why we don't bother with them.

    /NG/Tommy – Not sure what's really shut down to reduce the use of /NG.  Most of our industrials are still operating and electric power is still required though probably down a bit and residential is obviously up and you could argue that residential use is far less efficient so might balance out the commercial use that's lost.  

    U.S. Natural Gas Consumption Reaches Record in 2018

    And, of course, there's exports, that are a much larger share of our consumption.  A lot of /NG supply is a by-product of oil drilling so less oil drilling is likely to lower the supply as well.  That's why I'm willing to be long here ($1.63 avg).

    AMZN/Maya – Well, we have the $1,800/2,200 spread in our Hedge Fund so I certainly hope AMZN justifies $2,400 but it is silly as it's 100x earnings though at least they should be showing good growth as they are running at capacity at the moment.  I wouldn't bet on them to go higher but I sure wouldn't bet against them as their cloud services are probably doing very well too and Whole Foods is doing gangbusters….

    Look what happened on Jan earnings – they popped from $1,850 to $2,200, that's about 20% and, keep in mind, there aren't that many good-looking stocks to put money into at the moment so if AMZN has record growth and people think that's a lasting trend – they may want to jump in before they miss the bus.  I think a lot of this spike up is fund managers who got out trying to reverse and get back in before their investors think they are idiots for dumping the stock below $2,000.

    CCJ/Lionel – Nice run.


  14. Thanks Phil,

    Looking into GPRO

    "GoPro will provide complete Q1 2020 results and further strategy updates on its first quarter earnings report which will take place in May"

    Lets wait for May to have more visibility to sell puts.

    Call Spread 1.5/4 2022 offered for 1.55 with stock trading at $2.56


  15. Dividend Portfolio Review:  $135,213 is down 32.4% but we were down 46.1% before making adjustments (including deploying more cash) and I won't consider the market out of the woods until this portfolio is fully back on track.  We'll see who keeps paying dividends but the fear is that most will not so we won't really know until next month, when we get our earnings reports on most of our positions.

    • PFE – Seems safe enough.   Earnings 4/28
    • TD – As with PFE, we caught them at the right time.  Earnings ?

    • CHL – There are September contracts now but I'd rather wait a month to roll and hopefully Jans will be out by then.  The spread is flat and we're getting a 7% dividend – that's fine.  Earnings in July (halves).
    • ET – Would be nice if they came back.  We doubled down and wrote the very aggressive calls last month and so far so good but a long way to go before we're happy.  Earnings 5/11.

    • MO – Just paid the dividend and gave on indication of stopping.  As I said last time, they are not down enough to bother adjusting.  If they go lower again, I'd sell more puts.  Earnings 4/30.

    • NLY – We're not far from our $7 goal and the short puts are already a plan to double down at net $5.50 so not much to do here but wait.   Earnings 4/29
    • T – We aggressively sold 10 more puts and I think this spread is great for a new trade as it's net $26,698 and you get called away (if all goes well) at $35,000 for an $8,302 (31%) profit plus 6 more dividends (just paid us on 4/8) of 0.52 ($520) is $3,120 (11.7%) so 42.7% over 20 months in the bluest of blue chips.  Earnings 4/22 

    • F – We tripled down at $4.40 and now $5 so now we wait.  Earnings 4/28 and they suspended the dividend but we think the sell-off is way overblown (but the recovery will be long and slow). 

    • M – Not dead yet?  JCP is giving up and KSS might be next and M is working with Lazard, who specialize in restructuring and that's freaking people out but Macy's is in position to put a lot of pressure on their landlords, suppliers and creditors – so why not take advantage?  I don't think they are they to hold a yard sale…  Earnings 5/15(ish)

    • SIG – Weddings delayed, no time to get engaged and who can even go to the mall for a gift?  Of course this is a disaster for SIG.  On March 26th, Q4 earnings were a nice beat, however at $3.67/share, which was pretty much the whole year but, considering you can buy the stock for $7.50 – I think they'll be fund to own when the economy re-opens.  We did just double down at $8.20 and I'm very tempted to do it again and average $10 on 4,000 shares but we already have the $13 puts at $4.70 for net $8.30 so let's roll those at $7.95 ($7,950) to 20 of the $8 puts at $3.80 ($7,600) and see how that plays out for now.  Earnings June 4th(ish) – I love this as a new trade, by the way. 

    • SKT – We tripled down on these at $7 and now $6.25 so still getting no respect.   Earnings won't be until early May and they've already said they will pay the May 15th dividend (they have to as it's a REIT and they did have profits) but they've suspended guidance so there won't be any clarity until earnings.   It only costs us $18,270 to double down at $6.09 and our average on 6,000 would be $8.235 and we could sell 2022 $8 calls for $1.30 to drop our average below $7 and I would if the overall portfolio wasn't down so, as it is, we'll preserve our cash until we see actual earnings.  


  16. Wow, somebody bet $66M with a straddle that SPY will be up or down more than $24 on May contract expiration.   Seems like a pretty safe bet but still a lot to lose if wrong.


  17. GPRO/Lionel – I know we had it in the old LTP but I don't think we've played it in the new portfolios though I know I just told Jeddah I liked them at $2.51 for a small portfolio.   I have no idea what that quote is but, if you are looking at the 2022 $1.50/$4 bull call spread for $1.55 I think I'd rather go for the $2 ($1.30)/4 (0.75) bull call spread at 0.55 as you can buy 3 times more for the same price with the same target and I don't see the point in selling puts – it's just a cheap chance at nearly a triple.  

    SPY/Tangled – $24 not much but this is the range we do expect to settle down in. 


  18. tangled / $66M bet – I'm taking that same bet …. for $660.

    AMZN wowzer, well that ensures Seattle's housing prices will remain intact throughout this emergency 


  19. Phil / gpro

    Is there much of a case for people buying these luxury, action sports cameras right now?  i just don't see how these kinds of goods wont get hammered in months to come. 





  20. US home construction collapsed 22.3% in March



  21. E.P.A., Tweaking Its Math, to Weaken Controls on Mercury




  22. SPY straddle – they could have saved themselves $30k in fees by using SPX options instead. But maybe there isn't enough volume in SPX to make up a $66M position.




  23. Have a good day. On my way to food bank to work this PM. Wish me luck, but I'm prepared as best as possible. So much need and so little help!


  24. Korea: excellent election outcome – one of my in-law nephews got elected to the National Assembly, too!


  25. UK government extends virus lockdown by at least 3 weeks



  26. CORN: Nowhere To Fall




  27. BA May 200c for 1.5X.  Loading up for a move.  Out at $1.  Otherwise when up 100% sell 1/2 and let the rest roll. This is not trading advice…just a gamble, pure and simple.


  28. Did previous civilizations deal with whiners like this?

    "Man, we've gotta open the gates."
    "We've been through this, Phil. The Mongols are still outside."
    "But I've gotta harvest my turnips"
    "MONGOLS"
    "Ugh. But we've been in here or WEEKS."
    "That's how sieges work, Phil."
    "But the Mongols have barely killed anyone in days."
    "That's because of the walls, Phil."
    "Are you sure? Maybe the Mongols aren't that dangerous."
    "…"
    "I'm just saying, how bad could it be. They can't kill ALL of us"

    "That is literally the thing they do."
    "But my turnips…"

    Retrieved from: https://twitter.com/Bry_Mac/status/1250155077668605954


  29. GPRO/Potter – That's not the point, the point is that GPRO is a stock we looked at before, they are a solid company that has real sales (no profits) and $2.50 is $400M and they were on track to make over $50M by next year and, while this interrupts their plans – I doubt it permanently derails them so I would buy them at $2.50 and DD at $1.25 and DD again at 0.67 as I think it's a fair gamble down here if other people don't want them.   Even so, I was simply looking at paying 0.55 for a $2 spread that's 0.50 in the money so it pays almost 3:1 if GPRO fails to go BK.   Worth a gamble.

    You can talk yourself out of buying anything in a down market – it's a shame people don't have the same kind of discipline when they chase into stocks in an up market.  

    Food Bank/Pirate – God bless you, it's much appreciated.  Stay safe.  

    Congrats Snow!

    BA/Pharm – I like that gamble.  The May $200 calls were $25 3 weeks ago so it won't take much good news to give you a nice pop from $1.50.

    LOL Pepex!   Makes you realize why people hate prison so much.  People just can't seem to amuse themselves.  I'm more like Burgess Meredith from the Twilight Zone – except I always have a spare pair of glasses (probably because I always remember that episode).  

    I read about 12 books this month!


  30. congradulations on ng phil 


  31. Future is Now Portfolio Review:  $107,225 is up 7.2% and that's bounced back $17,990 from our last review so I'm very pleased and we only have a small commitment and we haven't been ready to buy more yet – still too much uncertainty so we're not going to be more aggressive this month though it's a good time to pay attention to what kind of things people REALLY need to have in the shut-down – because clearly those are stocks we can count on needing in the future!  

    • TOT – Was new at the time and we didn't change it but it's improved from flat.  

    • BYND – Still pretty cheap but the spread is working as we have a good entry and notice how conservative it is.  It's a $15,000 spread that we picked up for a net credit (we originally sold the 2022 $60 puts for $7,250 and rolled them better than even to 2x the Jan $50 puts, which expire quicker) and all we need is for BYND to hold $65 to make more than $15,000.  You don't have to be greedy to do well! 

    • SPWR  -Our original spread was way down but, as I said last review "Another good example of investor idiocy.  While it's bad for SPWR to some extent that oil is now free – it doesn't change the 20-year picture for them and it's not even likely to change the projects that are in their pipeline to any large extent."  Rather than close or roll our original spread, we simply bought  another one.  
    • The original spread is now a net $690 credit and pays $12,000 at $8 and up to $28,000 at $12 so I still love that as a new trade and our new spread we bought for $1,030 (but less put risk) and that also returns $12,000 at $8 and up to $20,000 at $10.   It's already net $1,935 but that's still nice for a new trade as it makes $10,065 (520%) at $8 and you only risk buying 1,000 shares for $8 if SPWR can't get higher. 

    So, if SPWR gets to $8, this portfolio makes about $22,000 on just those and TOT is $7,500 in the money and already net $6,000 so good for another $1,000 and BYND only has to not go down and our net $5,300 becomes $15,000 so that's about $38,000 to be gained from net $12,545 of cash that's currently deployed and we're not using very much margin at all so tons of buying power left.  


  32. /NG/Tommy – We always jump in around this level – so obvious.  The hard part is having conviction as they always try to spike you out before going back up.  

    Nonetheless, if you doubled down on /NG and you are able to get 1/2 back out even – don't be greedy and do the right thing!  

    Speaking of which, now it's time to go long /RB at 0.70:

    Stupid or not, Trump is going to announce he's re-opening the country and /RB was $1.50 at the beginning of the month so up is a lot more likely than down.


  33. Hemp Boca Portfolio: $56,255 is up 12.5% (just a $50,000 portfolio) which is fine in this market, we were down almost half during the crash but, as I said at the time, the VIX was most of the problem but it did give us a chance to reassess and re-position more favorably:

    • M – Hoping they don't go BK on us.  As I said earlier, Lazard is likely there to restructure debt, rents, etc. in Macy's favor because they have their landlords and even their creditors over a barrel at the moment.  If you are worried about a position like this, simply buy back the puts to reduce the risk!   As it stands, it's a net $4,015 position that would be worth $15,000 at $10.

    • MJ – As far as I know, cannabis companies are doing pretty well at the moment.  Our position is such that we only need MJ not to go lower though $15+ would be a lot better as we'd clear $20,000 to make up for our original loss but that's already baked into the balance of the portfolio so we're fine with $10, which would be net $10,000 off this currently net $2,125 position.  If MJ does start coming back, we might sell some short-term calls for income.

    • TAP – People are certainly drinking during the lock-down.  It already came back and we're already over our goal so we just need to hold $42.50 (in 20 months!) to get our full $25,000 though we'd give back $3,750 on the short $50 puts at that price if we aren't over $50.  Still, I think $50 is a very reasonable target so I expect the full $25,000 and the spread is currently net $1,825 so great for a new spread with $23,175 (1,269%) profit potential though I'd just sell the $35 puts, which would drive the net to $8,750 but it still makes $16,250 at $42.50 and that's about 200% anyway. 

    • THC – I was wavering on them because it occurred to me that, though the hospitals are full, they are full with people who are not getting expensive surgeries that make all the money!   Still, our spread is so low and 20 months out that I'm confident we'll get the full $30,000 and it's only net $6,900 so $23,100 (334%) upside potential if THC can get back over $25 so good for a new trade – even if you missed our $1,330 entry just 3 weeks ago.  

    So here we have just 4 little positions in a $50,000 portfolio (but good margin available) that will make about $58,000 if all goes well so the whole portfolio is good for a new trade with 100% upside potential.  


  34. Money Talk Portfolio Review:  Down 14.3% at $90,110.  That's annoying but it's because we couldn't take advantage of the crash as we can only make changes live on the show (which I do quarterly, last on 3/11).  We bottomed out at -32.4% in the last review so we held up OK and we're not making changes so it is what it is:

    • VLO – Just added attempting to call a bottom and I still think net $28 is fine.  $5,538 potential gain. 
    • FCX – Copper is a disaster but I like them to recover.  Wish we could roll but we can't.  $8,000 potential gain at $10.
    • GOLD – Deep in the money at net $5,145 but it's a $12,000 spread with $6,855 potential upside if we just hold $17 – aren't options great?
    • IBM – Holding up pretty well considering.  Another one I'd love to roll but not worried about our target and this one is a net $5,340 credit on the $24,000 spread so $29,340 upside potential is GREAT for a new trade!  
    • IMAX – Theaters are not likely to reopen in any big way possibly all year so we'll have to roll this trade to next year when we can but I still like them long, long-term.  
    • SKT – Certainly I will be doubling down if we're still this low next time I'm on the show.  
    • SPWR – Pays $6,000 at $8 and currently a net $1,045 credit so $7,045 upside potential

    That's $56,778 of upside potential even if we make nothing on IMAX and SKT (but assuming we don't lose more too!).  We still have $90,000 cash to deploy so we'll be looking for more opportunities as well 


  35. Well that's it except for the LTP (we did the STP on the 13th but I'll check it again tomorrow).  

    • Zoom Video Communications (ZM -1.4%) has hired dozens of security consultants in the past two weeks, including former experts for the likes of Facebook, Google, and Microsoft, according to WSJ sources.
    • The new consultants include Lea Kissner, former head of Google's privacy tech, and cryptographer/Johns Hopkins professor Matthew Green.
    • Zoom had previously announced the participation of former Facebook security head Alex Stamos.
    • The surge in Zoom use during the coronavirus pandemic has increased the scrutiny around its privacy and security practices.
    • A growing number of businesses and organizations have banned the use of Zoom in favor of more secure alternatives, like the newly Verizon-acquired BlueJeans.
    • Zoom says it's now using threat intelligence services from CrowdStrike (CRWD +1.7%) and the private DarkTower.
    • With pandemic-related demand coming fast, Google (GOOG -1.2%GOOGL -1.2%) is changing up its pro-focused Meet video tool – allowing business and education users on Gmail to directly take calls via Meet, and changing up the layout to ape the look on rival Zoom (ZM -1.6%), Reuters reports.
    • The Meet/Gmail integration is among a pipe of features that are being accelerated as video-meeting demand soars during pandemic stay-at-home orders. Meet has added users faster than any Google service since January.
    • Those features include a layout showing a grid of up to 16 callers at once – a cop of the Brady Bunch-like layout available on Zoom.
    • It will also improve video and audio filtering quality.
    • Meet is adding 2M users a day, and has more than 100M education users across 150 countries. (Meet is the product focused on schools, businesses and governments, while Google Hangouts is the consumer-focused tool.)

    • The Department of Transportation has ordered JetBlue (JBLU -5.6%) and Spirit Airlines (SAVE -8.2%) to continue service to most of their routes after the carriers requested exemptions to 37 different destinations.
    • JetBlue was granted two waivers by the DOT, while Spirit was granted four waivers.
    • Continued service was a requirement of the grants that airline companies landed under the CARES Act.

    Wow, so it's "Here's some money – now flush it down the toilet!"  

    • Sherwin-Williams (SHW -2.0%) trades lower despite winning an upgrade to Overweight from Equal Weight at Wells Fargo, which cites the company's higher exposure to both the do-it-yourself market and exterior contractors.
    • In addition, Sherwin-Williams likely will get margin support from lower raw materials costs, analyst Truman Patterson says, noting that "over the past two decades, SHW's GMs generally expand in the 100-250 bp range during periods of lower oil prices."
    • Meanwhile, the company's business is deemed essential in most areas across the U.S.
    • SHW's average Sell Side Rating and Seeking Alpha Authors' Rating are both Bullish, while its Quant Rating is Neutral.
    • Citing ongoing COVID-19 impact, Nissan Motor (OTCPK:NSANY) to extend shutdown of U.S. manufacturing plants until mid-May, reports Reuters.
    • Many large automakers have said they hope to resume U.S. production on May 4, but some auto executives think the industry restart may be pushed to mid-May.
    • Boeing (BA -6.9%) is today's biggest Dow loser following some stark comments last night from United Airlines (UAL -11%) CEO Oscar Munoz and President Scott Kirby that travel demand is essentially zero and shows no sign of improving in the near-term.
    • United said it flew fewer than 200K people during the first two weeks of April, a staggering 97% drop from more than 6M during the same time in 2019, and it expects fewer people will fly during the entire month of May than on any single day in May of last year.
    • The airline also does not see a quick snap back in demand, which it believes likely will remain suppressed for the rest of 2020 and likely into next year.
    • Any improved investor sentiment from this week's agreement with the Treasury Department to keep employees on board thru Sept. 30 was short-lived.
    • The one South Korean Apple (NASDAQ:AAPL) retail store will reopen on April 18 with limited hours and focus on support rather than sales.
    • Customers can still make online orders for in-store pickup and can make purchases while in the store.
    • Last month, Apple said it planned to start reopening the 458 stores outside of China by the middle of April.
    • The store reportedly plans to open the U.S. stores next month.
    • Apple's Chinese stores were closed for two months before the tech giant launched a rolling reopening.
    • The news comes after Apple launched its low-cost iPhone SE successor and ahead of the anticipated 5G iPhone launch this fall.
    • "The factories don’t disappear, the farmland doesn’t disappear, the skills of the people don’t disappear," said The Oracle a couple of years back about why he put billions of dollars to work at the darkest moments of the global financial crisis.
    • His absence from the scene during this crisis, however, has some worrying he's not yet seeing any good buying opportunities yet (or perhaps he just can't figure out Zoom).
    • In fact, all that's been heard from Berkshire (BRK.ABRK.B) has been the sale of some of its stakes in Delta and Southwest, a really negligible trim in its Bank of New York Mellon holdings, and the raising of some debt at nearly invisible interest rates.
    • Not to worry, says Bill Ackman, who believes Buffett is quietly putting money to work so as not to drive up prices while he buys. "He'll let everybody know," says Ackman, after he's invested about $100B.
    • Capitalist Woodstock will be held (virtually) on May 2. We're sure to hear something then.
    • Baird checks in on Bed Bath & Beyond (BBBY +17.2%) after the retailer's earnings reporte.
    • "While we believe BBBY has enough liquidity to survive this downturn, the unprecedented demand shock adds another layer of complexity to what is already a difficult turnaround process,' reads the firm's update.
    • Q2 and Q3 are seen dropping 5% to 20% from last year's levels.
    • Barid keeps a Neutral rating in place and lowers its price target to $5 from $10 to reflect reduced EPS estimates.
    • Previously: Bed Bath & Beyond +13% after slight sales beat (April 15)

    Very tempting down here!  I think, for the LTP, we may as well pick up the 50 of the BBBY 2022 $3 ($3.55)/10 ($1.45) bull call spreads at $2.05 ($10,250) and sell 20 of the 2022 $5 puts for $2.62 ($5,240) for a net $5,010 entry on the $35,000 spread so $29,990 (598%) upside potential if BBBY can get back to $10 in 20 months.  


  36. OK, NOW I have to take profit on /NG – 2 (1/2) off the table at $1.71 stop below $1.70 on the other 2 ($1.695).


  37. See, so /RB is now the fresh horse.  


  38. Phil – This news item that the GOP sneaked in a $90B tax cut in the coronavirus rescue bill is another reason why these guys should be banned from governing for a while – no responsibility, and always looking out for the top 1%. I know some people will argue that both sides do it because the GOP added that $90B for the top 1% and the Dems had the audacity to sneak in $10B for food stamps recipients. See both side are adding pork! And some will make that equivalence with a straight face.

    https://www.washingtonpost.com/business/2020/04/14/coronavirus-law-congress-tax-change/

    And best of all:

    Hedge-fund investors and owners of real estate businesses are “far and away” the two prime beneficiaries of the change, said Steve Rosenthal, a tax expert at the Tax Policy Center, a nonpartisan think tank.

    Do we know any owners of a real estate business? Coincidence? Back to my work cave.


  39. does anyone know what LTRPB is?





  40. BDC – Tripadvisor. Basically the last stock that should be up 5000% now. 


  41. Well, as you can see, I did a lot of reading today and I'm still very worried.  There's not enough evidence that we're in any way ready to restart the economy so what Trump is doing is not just foolish – it's dangerous.  

    What's worse than being shut down for three months is being shut down for two months and re-opening things too soon and then we spike up again and THEN we realize we have to shut down for 3 months to be sure next time.  

    Of course, this being May (when Trump wants to be open), it's possible that he's purposely doing that in order to keep the country shut down and consolidate his power into the elections.  His recent call to suspend Congress and appoint an army of his loyalists is right in-line with that concern.  

    At some point, he would have to debate Biden and discuss actual issues but, if he can get everyone outside for a month (june) and then back inside until October – he can skip that whole process and go straight to an election that would be overseen by his army of judges, etc that he just appointed.  

    Several countries that thought they were flattening had spikes today – I think it's miles too early to be complacent about this thing…

    Tax cuts/StJ – Sickening. 

    SKT/Rookie – That's the bear case, that they won't collect enough rents to have the cash flow to keep paying the dividend and their loans.  So far, that hasn't actually happened but that doesn't stop people from speculating.  This guy assumes the creditors are going to be inflexible – that's very doubtful in this environment.  Also, his premise is based on less than 80% occupance and SKT was last at 94% so he's pretty much assuming 20% of the tenants bust out and don't pay their leases.  If that's true, then SKT if F'd but so is the United States and the rest of the World so cash out, by gold and go to the bunker if that's what you want to believe.  

    Here's some other classic advice from Julian:

    Of course SKT did no better but no worse either – this guy does not have a crystal ball by any means.

    LTRPB/BDC – Liberty Media owns Trip Advisor.  I can't possibly imagine what would have made them pop like that. 

    It's only a $500M company, even at $59 so was like $50M before this nonsense and very easy to manipulate – which is most likely what happened.   Small float and mostly held by Liberty Media, who had no inclination to sell so someone could have bought up $4M worth of the stock slowly and then jammed a $1M (a whole day's average volume) buy in that took it too the moon so they could dump out at a higher price.  


  42. Gild flying on data


  43. Phil / RB

    Wild spreads between bid and ask.  I caught it at 0.697 so up a little, quickly. – but this is big boy play though, right? leave her in the oven?

     

    thanks



  44. Phil I believe your 50 BBBY 3-10 spreads gross $35,000 not $25,000.


  45. /ES – picked up 30.5 points going into the afternoon pause but jumped out because didn't want to get greedy and have it re-open gapped down…

    /RB scared of it. I don't see a Trumpian "The economy is now open in 3..2..1, GO!" announcement actually changing anything. I don't think people are that stupid. This shutdown HAS to go through end of May if not longer or we may as well not have bothered at all. Imagine starting up the subways in NYC in 2 weeks. Are you kidding me? Beyond retarded. We got this round going with a few hundred sick people wandering around, so yeah, let's turn a few thousand loose and see what happens. At that point it'll be time for Strategic Air Command to nuke the White House. 


  46. Ddaddy / futures, 

    nice on ES!  i feel you on /RB. It's beast too – jumping over stops etc. 


  47. Good timing on BA, Pharm. I joined you on that one. 


  48. Indexes flying higher!  

    Oil and Gasoline too!

    Whoever made that SPY bet did very well.

    So silly because we knew they were going to announce this:

    • Holding a call with the nation's governors, the president reportedly told the group it's ultimately up to them as to reopening their states back up for business, but the White House will recommend a set of guidelines.
    • At the moment, there doesn't appear to be a formal time frame.
    • The guidelines come in phases, with the initial one still recommending social distancing. Other "requirements" would be for ample testing and protective gear for healthcare workers. Schools would remain closed in the first phase.
    • More phase one: Hospitals can begin with elective surgeries, and gyms may reopen.
    • Included in phase two would be non-essential travel.
    • The guidelines will be formally introduced - Opening Up America Again - later this evening at the daily coronavirus press conference.
    • Update at 5:10 PM ET: Here's the full plan.
    • More details as they come in …
    • Earlier today, Switzerland announced a phased reopening of its economy beginning on April 27. Germany will begin on April 20. Also earlier, NY Governor Cuomo and a group of other Northeast/Mid-atlantic states extended lockdowns until May 15.

    • The U.S. expects fewer deaths from COVID-19 than even the most optimistic projections, so the country now should begin to reopen, Pres. Trump said at today's White House coronavirus task force briefing.
    • "A national shutdown is not a sustainable long term solution," the president said. "We are not opening all at once, but one careful step at a time. Instead of a blanket shutdown… we will focus on healthy Americans returning to work" as conditions allow.
    • Trump said the U.S. plan to reopen will focus on sheltering the most at-risk individuals and establishing clear benchmarks on testing.
    • "Every state is very different," and states will be allowed to remain closed if needed.
    • The new federal "Opening Up America Again" guidelines detail three "phases" aimed at guiding parts of the U.S. to move incrementally toward loosening restrictions.
    • Among many comments, Pres. Trump said sports arenas and restaurants will be packed again at some point but may reopen at first with empty seats separating audience members or diners; Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said sports events with audiences are conceivable in Phase 3.
    • As many as 29 states could open up relatively quickly – "literally tomorrow" in some instances – the president said.
    • At 6:15: Dow futures +2.9%, S&P +2.7%.
    • Among the items: Boeing announces the resumption of airline production with about 27K workers at its Puget Sound-region facilities next week. Shares are up 7.5% after hours (after losing 8% in the day's regular session).
    • The White House has put pencil to paper and put out its phased guidelines for reopening the economy. No dates are given, with the president leaving that detail up to individual governors. More coming at the coronavirus briefing later this evening.
    • The Mayor of Jacksonville, FL has announced the partial reopening of beaches as of 5 PM ET on Friday.
    • Gilead is running higher on hopeful buzz from a study out of Chicago for its remdesivir in severely ill COVID-19 patients.
    • Uber and Lyft are each ahead about 6% after hours following Uber's announcing Q1 and Q2 charges which perhaps weren't as bad as feared.
    • S&P 500 (NYSEARCA:SPY) futures are up 2%, and Nasdaq (NASDAQ:QQQup 2.5%.

    • Live Nation Entertainment (NYSE:LYV) is up 9.9% after hours following the streaming out of the White House's guidelines for reopening the economy - which shines some light on the administration's stance toward when big events can resume.
    • Movie-theater chains are on the move as well: AMC +13.1%; Cinemark (NYSE:CNK+7.7%IMAX +5.7%.
    • The guidelines (to be absorbed and implemented at state governors' discretion) come in three phases, each with "gates" of criteria to be passed before moving on – measuring declines in symptoms, cases and/or hospital status.
    • And while the White House's guidelines for Phase One leave schools closed, they do suggest large venues ("e.g. sit-down dining, movie theaters, sporting venues, places of worship") can operate under "strict physical distancing protocols."
    • That might be tough to achieve for concerts, but hope is rising in any case. Cinemark for one has indicated it can profit at reduced capacity by spacing out moviegoers.
    • STAT reports that preliminary results from a study in Chicago evaluating Gilead Sciences' (NASDAQ:GILD) remdesivir in severely ill COVID-19 patients are positive with rapid recoveries in fever and respiratory symptoms observed and almost all patients discharged in less than a week.
    • The news is lifting shares, up 6% after hours, a welcome bit of good news on the heels of two canceled studies in China due to low enrollment.
    • Intuitive Surgical (NASDAQ:ISRG): Q1 Non-GAAP EPS of $2.69 beats by $0.15; GAAP EPS of $2.62 beats by $0.53.
    • Revenue of $1.1B (+13.0% Y/Y) beats by $90M.
    • Press Release
    • Intuitive Surgical (NASDAQ:ISRGQ1 results:
    • Revenue: $1,099.5M (+12.9%); Instruments & accessories: $617.5M (+11.8%); Systems: $283.3M (+14.5%); Services: $198.7M (+14.3%).
    • Net income: $313.5M (+2.3%); non-GAAP net income: $322.8M (+3.5%); EPS: $2.62 (+2.3%); non-GAAP EPS: $2.69 (+3.1%).
    • Da Vinci procedures up 10%.
    • System shipments: 237 (+1%).
    • Headwinds from the COVID-19 pandemic emerged in mid-March so the full effects will be realized in Q2 and beyond.
    • Due to COVID-19 disruptions, no guidance provided.
    • Shares up 1% after hours.
    • Intuitive Surgical EPS beats by $0.15, beats on revenue
    • Addressing Morgan Stanley's (MS +0.0%) previous targets of 13%-15% ROTCE, pretax margin of 28%-30% and efficiency ratio of 72% by the end of 2021, CEO James Gorman explained in the bank's earnings call that those targets assume a normalized environment.
    • "This is not a normalized environment," he said.
    • "We will not hit those targets in the second quarter, that I can promise you."
    • When asked if 10% might be the lowest ROTCE goes, "So, is 10% a bottom? I don't want to call that now, because I just don't know how deep this recession is going to be. But, given what we went through to produce that felt like a really resilient franchise," he said.
    • Other points made in the call: Morgan Stanley has received 16 requests for forbearance on ~$1.4B of loans, its CFO, John Pruzan said during the bank's Q1 earnings call.
    • Requests for forbearance have been in its commercial real estate book, about $11B in total, with about 20% of that in hotels and retail.
    • Wealth Management pretax profit margin of 26.1% was hurt by employee deferred cash-based compensation plans and prepayment amortization, which combined lowered revenue by ~$500M and margin by 150 basis points, KBW analyst Brian Kleinhanzl points out in a note.
    • General Electric (GE -4.4%) and Ford (F -1.5%win a $336M federal contract to deliver 50K ventilators by mid-July, the Trump administration's largest order of the breathing machines by volume.
    • The companies are expected to produce the devices at a facility in Michigan starting next week as part of the U.S. response to the COVID-19 outbreak.
    • According to the contract terms, each ventilator would cost $6,720, nearly $10K below a previous federal contract for 30K ventilators at $489.4M, or ~$16.3K/unit, with General Motors and Ventec Life Systems, although the GE-Ford model is less complex than other ventilators.
    • The U.S. Department of Health and Human Services says it has finalized contracts under the Defense Production Act to produce or acquire more than 41K ventilators by the end of May and more than 187K ventilators by year-end.
    • Walmart (WMT +3.0%) is the second leading gainer in the Dow 30 and carved out a new all-time high of $132.92 earlier in the session.
    • Target (TGT +2.6%) and Costco (COST +3.1%) are also having solid days, but aren't within striking distance of their highs.
    • Dollar Tree (DLTR +2.8%) and Dollar General (DG +2.6%) are breaking on a flattish market day in general.
    • Over the last 90 days, the five stocks above have run circles around most mall stocks and department store chain stocks.
    • Some analysts think the rush of earnings report next week could send more investors back into the stay-at-home favorites.

  49. /RB/Potter – Just be careful as they expire at the end of the month (/RBK20)

    BBBY/Rvn – Even better!  cheeky  I was thinking $5/10, that's why.  

    /ES/Dawg – Very nice!

    I agree, this is probably an over-reaction to a vague announcement but maybe it isn't as this is much more rational than setting an unrealistic timeline.  I do not like letting the Governors decide when they open though as some of them are clearly idiots but, of course, we don't want Trump in charge either….

    BA/Pharm – Nicely played! 

    Boeing to Resume Airplane Production in Washington



  50. Reopening – whew! That could have been a whole lot dumber. The good part about leaving it up to the governors is that big city mayors are going to put a lot of pressure on them not to do anything stupid. City of Phoenix basically forced Ducey to do the right thing in Arizona. But at the same time there are communities in AZ with almost no cases – like Prescott. I get their point – they're shut down and people out of work because Phoenix and Tucson are jacked up. But still I'd like to see everyone sit tight and suck it up through end of May. Like you said it's better to write off a quarter then end up having to write off 4 or 5 because we jumped the gun. 


  51. Not to be a downer but it's only been 12 hours since my morning post and there are 75,000 more global cases (almost ALL of the cases in China originally) and 28,000 of them were in the US and 10,000 more people died yet anyone who watches Fox will tell you the mortality rate is 1% because they have convinced their viewers that if they ever sneezed or coughed this year – then they have already had the coronavirus and beaten it.  This is what the President believes too.

    5% daily (and this is 12 hours) growth is still 50% per week (compounding) – we can't just pretend this thing away!  


  52. Reopening/Dawg – If there was a good way to test then I'd be all for small towns re-opening as long as the people who go into stores have their daily test badges or something.  We could roll that out across the country as we get things more under control.  I had considered going to my ski condo in Hunter NY to be away from people but then I realized they are over an hour from the nearest hospital – so trade-offs to small towns.


  53. please tell me SOMEBODY here was long /CL ?!?!  one of our own needs to have grabbed that move


  54. The CL chart doesn't look right – I don't see it on IB – I think that is the $26 is the June future. 


  55. Yes, the month rolled over.  


  56. /CLK20 hit $18.03 a little while ago. Still below $18.50. Madness.


  57. Mortality rate – The Lancet published a study where they said the mortality rate is likely 0.66% based on looking at heavily tested populations like cruise ship passengers and then correcting for age bias. Then you've got South Korea at 2.2%. The real number is somewhere in there. NIH is starting a random serosurvey to try to put a real number on astmptomatic/undetected cases. The mortality rate only matters in terms of how many people are likely to be dead in the end. If you're trying to calculate the current spread of the virus, the lower the mortality rate, the worse it is. But at 1% and a 7.5 day doubling rate, you're looking at 14M 5% or so infected in the US which is nowhere near the threshold yet for community resistance. At 0.66% you have maybe 6.5% infected right now. Paradoxically, the lower the actual mortality rate, the more draconian our anti-infection measures need to be.

    At 0.66% if everyone gets it, that's still 2.2M dead. 1% 3.3M dead. Letting it run wild is a non-starter. Trump needs to face the fact that the bungle is in, no fixing it now. Got to shut down the economy and ride it out. The chance to avoid this was missed back in the days of pointless Team Blue vs Team Red impeachment wrangling. What a fucking farce. 


  58. Good morning!

    /CLK20/Dawg – Well if you accept delivery where are you going to put it?  


  59. /cl:Phil- Good Morning, when do you plan to switch to June contract? Thx


  60. I already bought June contracts (2 for $25) yesterday on the dip but still have 2 May contracts as I was greedy and waiting for $20.50, which never came so I'm down about $5K on those.  If $25 doesn't hold I'm out and I'll get back in on a cross back over or $22.50.