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Faltering Thursday – Wrapping up the Best Month Since 1974

Image result for money printing animated gifThe BEST month!

That's right, speaking of cognative dissonance, while you were locked up (Trump did promise he'd do that) for the month, the Stock Market had it's best month in almost 50 years, now up 34% from our March 23rd lows.  We just reviewed our Member Portfolios in our Live Trading Webinar and they are up along the same path.  Fortunately, rather than just recovering with the market, we called the bottom right on the money and added to our positions, leveraging the 34% gains quite nicely – so now we're having a great year – in captivity.

The difference between being able to act when they market is down and not being able to act is night and day for your overall returns, that's why we always keep a healthy amount of CASH!!! on the sidelines – even in the best of markets and we always scale into (and out of) our positions. Which brings us to today's topic – should we take our money off the table?  

CH 20200429 SP500 looking for a bottomWe have some truly ridiculous gains in our portfolios thanks to this epic bounce and we're coming back to test the 200-day moving average on the S&P at the 3,000 line and we didn't think we'd get back over our Must Hold line at 2,850 but, on the other hand – as I said back on March 24th: "Turnaround Tuesday – Yes, $3Tn is a LOT of Money!"

That was my estimate of the stimulus at the time and that's why we called the bottom but, by Wednesday, we knew that the Fed's contribution made it more like $6Tn (now $6.5Tn with the second round of SBA loans) as I qupted on 3/26: "Federally Funded Thursday: “We are Not Going to Run Out of Ammunition” – Powell."  The Fed Chairman reiterated that comment yesterday but also warned that the Fed can't do this alone and needs fiscal support from the Government as well.  Do I hear $9Tn?  

JPow Jerome Powell GIF - JPow JeromePowell MoneyPrinting ...As investors, we don't really care, FREE MONEY is FREE MONEY and we'll take it however it comes to us and crisis is opportunity and all that which is why, starting on March 31st, I wrote a series of articles with tips on how to manage and adjust our positions during a downturn:

These are good to review in retrospect and a lot of the trade ideas we shared at the time are still valid BUT, as I said, NOW we are 34% higher than when we got all excited about buying and, though we have plenty of room for more gains in most of our positions, we also have plenty of room for losses now that we have a lot more money in our positions than we did a month ago.  Profits aren't profits if you never take them off the table!  

Last week we copped out and hedged rather than pull our longs but I said to our Members in our Live Chat Room on Friday afternoon:

Well, to some extent, we're closing well today (so far) so the gains are a bit of a buffer and we do have new hedges but these are the positions I'm strongly considering killing as they are too risky:

LTP:

  • THC – I'm not sure hospitals are making money as they have to turn the entire place into biohazard wards and they can't do profitable surgical work.  It will come back one day but not sure when.  
  • ALK – Can't see risking an airline stock without more clarity – this one is certainly going.
  • DFS – I'm a bit worried on defaults and such.  Need to do more research.
  • FCX – Infrastructure looks far down the list.  
  • IMAX – If they had longer options maybe, but not worth it with short-term. I'd rather buy more DIS but I'm worried about them too if they lose the summer. 
  • LB – With the deal off the table I think maybe we don't risk it.
  • VALE – Same as FCX, may never be infrastructure.

Dividend Portfolio:

  • TD – We got out on LTP, need to dump these too.
  • NLY – Might take longer than we want to wait to turn around. 

Future is Now:

We made no changes and we're up 7% for the week!

Money Talk - I'm on Wednesday but taping Monday so:

  • FCX – Same reason 
  • IMAX – Same reason

Butterfly Portfolio: 

  • DIS – I'm still inclined to stay in but I'll have to recheck a lot of stuff
  • X – Another one I'm not sure the infrastructure will come but so cheap it's hard to ditch.  

Earnings Portfolio:

  • CLF – Infrastructure again
  • HRB – We're at the money but I'm not comfortable with them.
  • IMAX – Same problem

Since I'm very close to going totally back to cash, it's very likely I'm going to want to kill all of these on Monday. 

Hedging allows us not to have to rush our decisions and of course I'm glad we didn't pull the trigger last Friday.  The point was to get READY to pull the trigger and then we came out of the gate rallying on Monday and that rally became our buffer and it's been a great 3 days since with a bonus 5% run on the S&P but that doesn't make me LESS want to go back to cash – now we have more cash to go back to so now we're risking more money that we COULD cash for less potential gains as we're closer to the ridiculous over-priced market we had before it caught a cold.

We can consider this week's whole 5% a buffer but I'll feel better reducing our risk by removing some longs, raising our cash and that, in turn, will make our hedges stronger – because they have less to protect.  We'll keep an eye on gold, which is selling off sharply as everying is "fixed" and America is going back to work, as well as the VIX, which has been calming down (another big boost to our premium-selling portfolios). 

We'll see how long all this "great" news lasts as they look to reopen the states.  My main worry this week was going over the 1M infection mark (check) and passing the number of deaths we had in the 20-year Vietnam War (58,000 – check) but that doesn't seem to bother anyone and now we have miracle cures and vaccines are on the way – so why shouldn't we be celebrating? 

Maybe none of it's true but, for now – let's enjoy!  

 

 


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  1. Good Morning.


  2. 30 MILLION OUT OF WORK.  :(


  3. 1020 – These 30 millions people out of work don't invest in the market!


  4. These people are pro-life and their argument is always that every life is precious:

    And I remember the big scandal about the death panels with Obamacare. Apparently death panels are OK now because this time the income of the top 1% could be impacted.


  5. Good morning!   (not for 30M people)

    So that's just about 20% of the workforce unemployed now – LET'S RALLY!

    Confirmed fatalities from the new coronavirus in the U.S. neared 61,000 on Thursday, as the deadliest month of the pandemic drew to a close with fresh reports of the pain it has inflicted on economies across the world and new steps to ease restrictions.

    Florida became the latest U.S. state to detail plans to ease stay-at-home orders, business closures and other steps to slow the contagion. And Los Angeles became the first major U.S. city to begin offering free testing to all residents regardless of whether they have symptoms of Covid-19, the respiratory disease caused by the virus.

    More than 3.8 million Americans filed for jobless benefits last week as states struggled to keep up with a surge in coronavirus-triggered claims. The pandemic has led to an unprecedented amount of claims since widespread lockdowns started in mid-March, overloading aging technical infrastructure and leaving hundreds of thousands of people waiting on unemployment payments.

    Too crazy, have to cash out.  

    Futures down 1% now, were up 1% around midnight but global economic numbers are very scary and ours would be too if we weren't so far behind in our data reports.  Asia got hit sooner so the bad news is showing up in their recent data but our bad news hasn't really hit the numbers yet and, as often as we see it happen – I'm always amazed that the market doesn't actually react to bad news until it's released in a report – no matter how obvious it is in advance what the report will say.

    France and Spain on Thursday reported their deepest economic contractions on record during the first quarter after imposing some of the continent’s strictest virus-containment measures. The European Union’s statistics agency said the 19-nation eurozone economy shrank by an annualized rate of 14.4%, exceeding the 4.8% contraction in the U.S. during the same three-month period

     

    The eurozone’s jobless rate stood at 7.4% in March, held in check by government programs to pay the wages of furloughed workers.

    World-wide, the number of confirmed coronavirus infections has surpassed 3.2 million—with more than 1.04 million of those in the U.S.—and the death toll has grown from about 43,000 at the start of the month to more than 227,000, according to data from Johns Hopkins University.

    Yep, seems under control to me!  

    In the U.S., deaths attributed to Covid-19 have soared from about 4,000 at the start of April to 60,316 on Wednesday, according to the Johns Hopkins data. The rise exceeded some previous projections, a sign of the difficulty governments face in calculating the severity of the outbreak.

    In late March, the Trump administration estimated between 100,000 and 240,000 people could die in the U.S. About two weeks later, Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said the toll was likely to be closer to 60,000—a forecast similar to one in early April by the University of Washington’s Institute for Health Metrics and Evaluation.

    In Germany, a team of virologists cautioned against an unlimited reopening of schools and kindergartens after reporting that children who catch the coronavirus may be as infectious as adults. The team, at the Charité University Hospital in Berlin, screened 59,831 patients aged between 1 year and 100 years old for Covid-19 infection, 3,712 of whom tested positive between January to April this year.

    In China, where a five-day holiday begins on Friday, the government encouraged the public to stay near their homes and avoid destinations that still have coronavirus cases. The Palace Museum at the Forbidden City in Beijing has set a cap of 5,000 visitors a day, a fraction of its usual capacity. Tickets to the end of the holidays have already sold out, according to the museum.

    Hong Kong reported no new cases Thursday—the fifth consecutive day without any new infections. For the first time since the pandemic began, South Korea reported no new local infections, and four new imported cases. China also reported four new imported cases, according to the National Health Commission.

    Rampant hypocricy, StJ.  


  6. Good morning, All!

    The webinar replays are up!

    YouTube:

    https://youtu.be/qcfVHHYccU4

    BitChute:

    https://www.bitchute.com/video/nuWf1NPtWdRB/


  7. Look at the comparison between countries that imposed a tough confinement like Denmark and Finland and Sweden which had looser rules:

    And the numbers in the US are skewed by regions like NY/NJ were population density is 1000x what it is in Sweden and with a higher number of visitors who carried the virus compared to Sweden.


  8. Although every life is, of course, precious:


  9. News/Phil – " the market doesn't actually react to bad news until it's released in a report – no matter how obvious it is in advance". It's taken me the longest time to learn this, and it's cost me some bucks while figuring it out. Thanks for saying it so succinctly.


  10. Speaking of bad news, RUT is down 2.5% and not a mention on CNBC or Bloomberg – just another day in the markets now…

    Oil $17.69 – really moving up!  USO $19.14 (8x the old price)

    From Texas and Wyoming to North Dakota, small U.S. oil companies are shutting off wells faster than expected, as prices fall below what it costs them to pump crude out of the ground.

    The pandemic has overwhelmed states whose systems for processing benefits are hamstrung by archaic technology, as hundreds of thousands of Americans are still waiting to receive payments. More than 3.8 million Americans filed for jobless benefits last week.170

    Macy’s to Reopen 68 Stores —With Limits on Staff, Shoppers

    Macy’s expects to have all of its roughly 775 stores reopened in six weeks, if infection rates taper off as projected. Follow along for the latest news and insights on the pandemic’s impact on investors, companies and economies.

    As investors assess a market and economy jolted by the coronavirus pandemic, they are betting the technology stocks that drove much of the recent bull rally will lead the way to recovery.5

    Consumer spending, the economy’s key driver, fell 7.5% in March, the steepest monthly decline in records tracing back to 1959. Household incomes fell 2%.58

    The eurozone economy shrank at the fastest pace on record during the first three months of this year, contracting more sharply than the U.S. during the same period.7

    This is an excellent article/graph:

    Coronavirus Mutations Map the Global Outbreak

    Also, good:

    The Government Economy

    Another good one on Air B&B:

    For years, Cheryl Dopp considered the ding on her phone from a new Airbnb Inc. booking to be the sound of what she called “magical money.” A property she rented out in Jersey City, N.J., on Airbnb could gross more than $8,000 a month, she said, double what long-term tenants would pay.

    Now, Ms. Dopp associates the dings with cancellations and financial misery. The 54-year-old information-technology contractor said she had about $10,000 in bookings evaporate overnight in March. She has $22,000 in monthly expenses for a largely Airbnb portfolio, she said, that included another Jersey City home and a house in Miami.

    AirDNA estimates that a third of Airbnb’s U.S. listings for entire homes or apartments—excluding shared rooms—are by hosts with a single property. Another third are run by hosts with between two and 24 properties. The remaining third involve hosts with more than 25 properties.

    The ripple effect of all this will be felt for a long, long time.

    TSLA with a 7% pop after the spike.

    In the STP, we have:

    TSLA Short Call 2020 19-JUN 800.00 CALL [TSLA @ $851.93 $51.42] -2 4/17/2020 (50) $-21,000 $105.00 $9.50 $-105.00     $114.50 $21.50 $-1,900 -9.0% $-22,900
    TSLA Long Put 2021 15-JAN 800.00 PUT [TSLA @ $851.93 $51.42] 3 4/17/2020 (260) $67,434 $224.78 $-56.51     $168.28 $-21.73 $-16,952 -25.1% $50,483
    TSLA Short Put 2020 19-JUN 800.00 PUT [TSLA @ $851.93 $51.42] -3 4/17/2020 (50) $-43,050 $143.50 $-79.45     $64.05 $-28.82 $23,835 55.4% $-19,215

    So nothing bad about this report for us, it's good in fact as we sold the June $800 calls for $105 and the $800 puts for $143.50 so anything within $248.50 of $800 is a winner for us as the net of the spread was a $23.72 credit.  So we make whatever less than $248.50 we are away from $800 and whatever's left on the short Jan puts (now $50,483) is just bonus money!  

    We will certainly do more trades like this when we can!


  11. hi phil, I don't think trump will let a little thing like resurging cases in two weeks get in the way of his big reopening and  re election plans he will probably find a way to alter or stop release of data like florida is doing.


  12. Oh I missed the TSLA trade :(

    Looks fun


  13. I know there's an allergic reaction to technical analysis and i just like to see it out the corner of my eye, it's a supplemental tool than can be helpful. 

    There's something that i've had my eye on for weeks now.  Since the March low, we've retraced 61.8 percent on the S&P.  Some people call it the golden zone some people probably call it something way more sexually suggestive but it's home base for the algos, that's undeniable.  Anecdotally It's the highest probability spot for another leg down to begin and it's lowest risk place to take a short.  

    There's just as much of chance for it to stall here and plough on through as there is for it to crash and burn, which is why TA alone is not tradable but it has to be worth mentioning. 

    https://www.tradingview.com/x/xe7j4wKf/


  14. Potter,

    61.8. Thanks for sharing.

    TA would seem to have more relevance – and validity - as a timing indicator when combined with fundamentals, so especially relevant in this environment. Sure is tough for me to understand a fundamentally based rally now from this side of the looking glass. 


  15. The reason TA works is that so many people believe in it. Zack's is doing the same math and calling a top too. Probably a lot of analysts are, and so it becomes a self-fulfilling prophecy.


  16. TA – But it didn't work too good on Feb 21.


  17. Data/Tommy – True, they are already messing with the data.  

    TSLA/Rn – Well it's net $8,368 now and we paid net $3,384 so still a lot of potential.  

    Since TSLA went well and since it's kind of boring today, how about we do a similar play on CMG?   Q1 earnings were last week and the stock gapped up $100 but $900 is $25Bn in market cap and same-store sales were down 16% in March, so very doubful they do better than last year's $350M in profits (1/71 of earnings) and even $500M next year would still have them at 50x earnings so let's say $1,000 is very unlikely in the near future.  Next earnings are July 21st – AFTER expirations but they don't have July contracts yet so we'll sell the June $950s and plan to roll to July $1,000s. 

    • Sell 2 CMG June $950 calls for $30 ($6,000) 
    • Sell 2 CMG June $850 put for $35 ($7,000) 
    • Buy 4 CMG 2022 $850 puts for $170 ($68,000) 
    • Sell 4 CMG 2021 (ONE) $750 pus for $73 ($29,200) 

    This one is trickier as we have a net $25,800 entry on the $40,000 spread but this one isn't about the spread so much as it's about we sold $13,000 in premium during the first month and we have the 2022 $850 puts as a base so we can do this 18 more time ($234,000).  It's too active for the Butterfly Portfolio but it would be perfect for our new Income-Producing Hedge Fund (launching next week!), so let's put it in the STP and see how it plays out.

    TA/Potter – As I often say, if enough traders bought AAPL when the swallows return to Capistrano – I'd pay attention to bird migration too.  TA is a self-fulfilling prophesy because so many people believe in it – but that doesn't make it any more real than Santa Clause in the end.  Still, I predict presents will be under the tree on Christmas day and I predict people will sell a stock that makes a death cross so, to that extent, TA is important too.  61.8% is a Fibonacci Retracement and that's not really TA, that's legitimate math governing the statistical movement of "random" variables – that's something I very much believe in!  

    Fibonacci Rules – Sometimes, the Old Ways Are the Best!

    Meanwhile, to clear up a few other silly beliefs:

    • Coffee is made from seeds, not "beans" 
    • Peanuts, on the other hand, are beans. 
    • Apples are not the "forbidden fruit" – there's no specific fruit mentioned in the bible.  
    • Muna Kea is the tallest mountain on Earth – it just begins at a lower elevation than Everest. 
    • You can't see the Great Wall of China from Space (without a telescope/lens) – that's ridiculous.  It may be long but it's not any wider than a house.  
    • There is no dark side of the moon, the other side of the moon gets hit by light as we ALL rotate around the sun.  As with many things, our perspective looking a certain way does not create a scientific fact!  
    • The Moon and it's Orbit Around the Earth - Science News
    • If a tree falls in the forest and no one is around to hear it – it makes a sound anyway because – PHYSICS!  


  18. Still made a sound (but it might have fallen on death ears…).  


  19. Hahahah Phil, 

    that's great list.  You are very resourceful :)

    On the subject of self fulfilling prophecies : if enough algorithms are doing something and enough non algorithms (humans) are doing the same thing (regardless of reason) then that thing, whatever it is, is happening.  If JPM upgrades to outperform, up goes the stock, that's also self fulfilling. If they always made those announcements on the 2nd Friday of every month, Thursday evenings would be impacted.  In fact the very concept of stock price action is a self fulfilling prophecy. People act on the assumptions of the actions of others in the future. 
    The markets are a function of the many millions of participants, reacting to information they receive, guess, dream, read, assume, make up and if 20% of them believe in TA or Santa then that's 20% of the riddle (partly) solved.


  20. Cancel U.S. debt to exact revenge for a killer virus?….


  21. TA/Potter – Unfortunately, it's more like 90% believing in TA. In fact, by definition, the algos that trade 80% of the market have nothing but TA to go by.  That's why smart, Fundamental investors (who don't ignore TA) have a huge advantage.  

    Good old 2,850 is like a magnet.  

    Glad we gave up on these guys:

    This will solve the storage problem for a few weeks:

    • Nine oil companies including Chevron (NYSE:CVX), Energy Transfer (NYSE:ET), Equinor (NYSE:EQNR) and Exxon (NYSE:XOM) have agreed to rent space to store 23M barrels of crude in the U.S. Strategic Petroleum Reserve, Reuters reports, citing an unnamed a U.S. official.
    • Companies storing oil will be allowed to keep it in the SPR through March 2021; terms of the lease contracts are not known.
    • The Department of Energy has said it is continuing to work with Congress on finding ways to lease more space in the SPR, as the Trump administration tries to help the industry deal with crashing oil prices.

    Probably explains this week's lighter build – oil in transit to the SPR.

    • "I can confirm today that for the first time, we are past the peak of this disease," says U.K. Prime Minister Boris Johnson. "We avoided an uncontrollable and catastrophic event."
    • He's planning on next week putting forth his plan for reopening the economy, getting kids back to school, and boosting safety measures for those who must travel to work.
    • The FTSE 100 today shed 3.5%. It's bounce from the March low hasn't been nearly as strong as some other places, and the index remains down more than 20% YTD.
    • Cheniere Energy (LNG +3.3%) is on the rise after reporting Q1 earnings that nearly doubled from a year earlier and easily topped estimates, while revenues rose nearly 20% Y/Y to $2.7B.
    • After Q1 adjusted EBITDA soared 60% Y/Y to $1.04B, Cheniere reaffirms FY 2020 guidance for adjusted EBITDA of $3.8B-$4.1B and distributable cash flow of $1B-$1.3B.
    • Cheniere Energy Partners (CQP -0.7%) also beat Q1 earnings estimates, and adjusted EBITDA jumped 30% to $792M.
    • Worldwide demand for LNG rose by ~10% Y/Y in Q1, but Cheniere expects potential declines in demand "as reduced economic activity affects LNG demand and high storage inventory levels reduce the need for imports."
    • The company says it has recently seen an increase in the number of canceled LNG cargoes, but this should not have a material impact on its full-year financial results since customers remain obligated to pay fixed fees for the canceled cargoes; during Q1, canceled LNG cargoes added $53M to total revenues.
    • Also, Cheniere says it still expects to complete the third liquefaction train at its Corpus Christi LNG export plant in Texas in H1 2021 and the sixth train at its Sabine Pass LNG export plant in Louisiana in H1 2023.

    No collusion:

    • Major oil producing companies including BP, Chevron (NYSE:CVX), Occidental Petroleum (NYSE:OXY) and Royal Dutch Shell (RDS.ARDS.B) are negotiating production cuts with oil-rich countries ahead of tomorrow's deadline for OPEC+ to sharply reduce output – reductions that will limit options for these companies to cope with sharply lower crude prices, WSJ reports.
    • Saudi Arabia and Russia ended their price war earlier this month and joined with OPEC+ in agreeing to cut global output by ~13 M bbl/day, and big oil companies that produce in those countries are being told to shoulder some of those cuts.
    • Nigeria's government says it has reached out to Chevron and Shell, Oman has ordered Occidental to cut production at its fields by a combined 58K bbl/day, and BP has been asked to reduce output in locations including the Middle East, Angola and Azerbaijan.
    • Chevron says its 50%-owned venture in Kazakhstan "continues to produce according to the business plan," and the company says it was working with its Nigerian partners to "explore ways of reducing costs and adjusting production."
    • Roughly half of the barrels BP pumps annually come from Africa and Asia, where most major producing countries have joined the OPEC+ alliance; Eni (NYSE:E) and Total (NYSE:TOT) derive a respective 75% and 68% of their oil production from the two continents.

    Wow, I'm pretty sure that's a violation of dozens of rules we have in place in the US.  "Nobody seems to notice, nobody seems to care" – Carlin

    • Gilead Sciences (GILD +0.9%) will be hustling to produce sufficient quantities of antiviral remdesivir after the expected nod from regulators after two successful trials in COVID-19 patients.
    • It started with an inventory of ~5K doses when studies ramped up and now has ~50K which should fly off the shelves as soon as emergency use is authorized. It says its goal is to have "multiple millions" of courses by year-end.
    • Production is apparently no walk in the park, involving a series of chemical steps, a range of components and manual inspection of each filled vial, the last a labor-intensive step considering the volumes planned. It has been procuring raw materials for some time and has condensed the manufacturing process to 6-8 months from 9-12 months.
    • Initial quantities will be generally reserved for seriously ill patients.

    Cog Dis yet again!  "All is well and we should re-open the country with 1M confirmed cases" but GILD is going to get "multiple millions" of doses ready after meeting with the White House.  I mean, come on, do reporters even ask questions anymore?

    All is well (part 5):

    • NBA team executives are pressing the league to cancel the current season, according to CNBC.
    • The uncertainty around start times, safety, liability and financial pressures on certain owners have the teams looking for a fresh start next season (perhaps late).
    • Some of the companies that could be impacted to varying degrees by a lack of NBA action include Nike (NKE -0.5%), AT&T (NYSE:T), MSG (MSG -1.9%), MSG Networks (MSGN -3.0%), Disney (NYSE:DIS), William Hill (OTCPK:WIMHY), MGM Resorts (NYSE:MGM), Under Armour (NYSE:UAA) and Adidas (OTCQX:ADDYY).

    Part 6:  

    • Boeing (BA +3.1%) pushes to its highest levels of the day as CNBC's David Faber reports high demand for the company's debt, which could increase its anticipated $20B capital raise from the bond market.
    • The strong demand for Boeing's paper could add up to as much as $75B in five-, seven-, 10-, 20-, 30- and 40-year bonds for the company, Faber says.
    • The pricing being floated around is at the benchmark Treasury yield plus 500 bps, and Boeing has access for durations across the board, according to the report.
    • The company recently has drawn down on a nearly $14B loan and sought $60B in government aid for itself and its supply chain.

    Gosh, I really used to think $74Bn was a lot of money…  

    Now it's what Jeff Bezos loses in a divorce!


  22. This we saw coming:

    • Shares of Tesla (NASDAQ:TSLA) are up 3.12% after being more than 10% higher yesterday after the Q1 earnings report dropped. Are investors taking profits or did Elon Musk's conference call rant on stay-at-home orders spoil the party a bit?
    • Wall Street takes from a bull, a bear and a firm playing it down the middle are below.
    • Oppenheimer (Outperform, $968 price target): "Given what we believe is an important incremental validation of TSLA's ability to disrupt the auto market, we are expanding our earnings multiple to 40x (from 30x) as we see potential for TSLA to continue growing at accelerated rates through the end of the decade… TSLA guided Shanghai capacity to 4,000/week (200K/year) by mid-2020 and achieving cost savings throughout its ramp due to higher utilization along with increased localization of the supply chain. Management also announced a price reduction, allowing TSLA to continue receiving EV subsidies in China after June. We remain constructive on demand for TSLA in China especially considering the competitive landscape."
    • Wedbush (Neutral, $600 price target): "In terms of guidance, Tesla did not give investors much saying it would revisit 2020 guidance when it reports 2Q results, that the 500K unit delivery number remains "uncertain" given production capabilities, and that Cash flow as well as profitability guidance is "on hold", which makes sense in this uncertain environment with Fremont still shutdown. With the second half of March seeing a screeching halt in demand across the globe given the current pandemic, the big question for investors continues to be around the demand trajectory for 2Q and when the flagship Fremont factory reopens given the current SF lockdown. To this point, clearly Musk is very frustrated by the current stay-at-home order and voiced those opinions loud and clear on the conference call especially as its main artery in Fremont remains in shutdown mode."
    • JPMorgan (Underweight, $240 price target): "We see a number of more important takeaways, including: (1) unexpectedly higher (and typically lumpy) regulatory credits of $354 mn in 1Q (a new record and nearly 3x the average of the last three quarters) vs. consensus $172 mn and JPM $100 mn accounted for 44% of the $418 mn EBIT beat vs. consensus and 53% of the $254 mn EBIT beat vs. JPM (without the credits, adjusted EBIT would have been a loss of -$71 mn vs. the reported +$283 mn); (2) a number of initiatives once seen as important to the narrative of Tesla as a hyper growth company deserving of extraordinarily high valuation multiples (e.g., 355x Bloomberg consensus 2020 EPS, 49x EBITDA, 15x price/book, etc.) were pushed out — the Tesla Semi (unveiled in 2017 and originally planned for 2019 before first being pushed to 2020) was pushed out again yesterday to 2021, and the call at the Tesla Autonomous Day on April 22, 2019 for 1 million fully autonomous robo-taxis to be on the road."

    Musk is an innovator, he's the first car manufacturer to produce Vaporware.

    How to Spot Vaporware

    In general, the idiom “if it sounds too good to be true, it probably is” applies here. Of course, we all enjoy technology and get excited about the latest products and innovations. However, we can still sometimes fall victim to effective marketing. Many media organizations also publish press releases word-for-word making it tricky to find objective reporting.

    If a company announces a new product that gets you passionate, take a critical look at what they’ve told you so far. Although not foolproof, there are some markers to watch out for. Is there a firm release date or is it at some vague or unspecified point in the future? Do their claims sound reasonable and achievable? Does the company have a good track record?

    • Stocks open in the red after the U.S. reported another 3.84M in jobless claims, bringing total filings to more than 30M, and U.S. personal spending in March also dropped by the most on record; Dow -1.3%, S&P 500 -1%, Nasdaq -0.2%.
    • Nevertheless, the S&P is on track to record its biggest monthly gain since 1974, and the DJIA is poised for its best monthly gain since 1987.
    • Across the Atlantic, ECB President Lagarde said the eurozone economy could shrink by 15% in Q2.
    • Reality may be setting in that the nature of new jobless claims is changing, as claims from restaurant and hotel workers are now being followed by manufacturing, engineering and white-collar jobs from every industry.
    • European bourses also post broad losses, with U.K.'s FTSE -2.1% and Germany's DAX and France's CAC both -1.3%; in Asia, Japan's Nikkei +2.1% and China's Shanghai Composite +1.3%.
    • In the U.S., the financials, industrials and materials sectors are off to particularly weak starts, each -2.2%.
    • Among noteworthy names, Facebook +6.7% after saying ad revenue has stabilized in recent weeks, and Twitter -2.7% after posting its first quarterly loss in two years.
    • Crude oil prices continue to rebound, with June WTI +12.5% to $16.95/bbl.
    • U.S. 10-year Treasury yield down 3 bps to 0.59%.

    • 1-800-Flowers.com (NASDAQ:FLWS) is up 6.75% after topping Q1 estimates on both lines of its Q1 report and issuing a strong outlook.
    • Company update: "In both Consumer Floral and BloomNet, top and bottom-line results for the quarter would have been even stronger were it not for softer consumer demand in the last few weeks of March related to the impact of the Covid-19 crisis. We saw this pattern reverse as we entered our current fiscal fourth quarter and demand has increased significantly as consumers are increasingly turning to the 1-800-Flowers brand to help them express themselves and stay connected."
    • In an outlier move for a retailer, 1-800-Flowers.com backs its prior outlook, saying it sees full-year revenue growth of 8% to 9% and EPS growth of 15% to 17%.
    • McDonald's (NYSE:MCD) CEO, in an interview on CNBC, said that he "certainly expects to see plant-based on the McDonald's menu," but that it was only a question of when.
    • NOTE: In January, MCD expanded its pilot program using Beyond Meat
    • Beyond Meat (NASDAQ:BYND) shares reversed early losses to trade up nearly 7% as the market generally declines with most major groups in the red.
    • McDonald's CEO also said "we haven't had a single supply chain break" in its business, in response to a question about suppliers and the meat industry which was subjected to an executive order recently to keep meat processors open.
    • Beyond Meat is expected to report quarterly earnings on May 5. More details here. 
    • 30-year fixed-rate mortgage averages 3.23% in the week ending April 30, down 10 basis points from the previous week, according to the Freddie Mac Primary Mortgage Market Survey.
    • A year ago at this time the 30-year FRM averaged 4.14%.
    • "These low rates are driving higher refinance activity and have modestly helped improve purchase demand from their extremely low levels in mid-April," said Freddie Chief Economist Sam Khater.
    • However, not everyone can take advantage of the lower rates due to the current pandemic, he added.
    • 15-year FRM averages 2.77% vs. 2.86% in the prior week and 3.60% a year ago.
    • 5-year Treasury-indexed hybrid adjustable-rate mortgage averages 3.14% vs. 3.28% in the prior week and 3.68% a year ago.
    • Most mortgage REITs are falling in early trading, although AGNC and Annaly (both of which reported earnings after yesterday's close) are up; Two Harbors (TWO -1.4%), Armour Residential (ARR -0.4%), Orchid Island (ORC -1.1%), New York Mortgage (NYMT -1.3%), MFA Financial (MFA -2.1%).
    • It's definitely not helping homebuilders; (ITB -3.0%)
    • Royal Dutch Shell (RDS.A -11.7%) plunges at the open after reporting better than expected Q1 earnings, but taking center stage is the dividend reset, "given the risk of a prolonged period of economic uncertainty, weaker commodity prices, higher volatility and uncertain demand outlook."
    • Bernstein analyst Oswald Clint says strong earnings, free cash flow and gearing reduction are a "sideshow" to the dividend news, and with a three-notch downgrade likely, Shell always was going to have the toughest decision to make on the dividend.
    • Q2 will not provide any respite for Shell, with the company's outlook particularly weak across divisions, says Clint, who rates the stock at Market Perform.
    • UBS analyst Jon Rigby regards the dividend cut as a surprise and bigger than expected, but otherwise sees strong results led by Integrated Gas, and production rose 12% Y/Y on lower maintenance and ramp-ups in Trinidad & Tobago and Australia; Rigby rates the stock as a Buy.
    • Credit Suisse's Thomas Adolff notes Shell was able to lower net debt by $4.7B leaving gearing post at 28.9% vs. 29.3% in Q4, and says it will be interesting to see whether other oil super-majors will follow Shell's lead on dividend cuts, this quarter or next.
    • Six Flags Entertainment (SIX -1.2%) says park attendance was down 27% Y/Y in Q1.
    • The theme park operator notes attendance was up 19% before the suspension of operations on March 13.
    • Six Flags estimates that its net cash outflow during the time its operations are fully suspended will be around $30M to $35M. At this time, the company anticipates it has sufficient liquidity to meet its cash obligations through the end of 2021 in a minimal revenue environment, but would likely require additional covenant relief from its credit facility lenders if the suspension of operations lasted through the end of 2021.
    • Hanesbrands (HBI -4.0%) trades lower after reporting a 9.4% drop in innerwear sales and 10.2% decrease in outerwear sales in Q1.
    • Gross margin fell 260 bps to 37.6% of sales during the quarter and operating margin was down 590 bps to 4.8% of sales.
    • The company ended the first quarter with nearly $1.1B of cash on hand and is adding additional liquidity and flexibility to its balance sheet.
    • Previously: Hanesbrands EPS misses by $0.07, misses on revenue (April 30)
    • Among the changes:
    • 1) Creating a 3rd loan option to make it easier for higher-risk borrowers to get credit – lenders can retain a 15% share on loans, up from 5%.
    • 2) Lowering the minimum loan size in some cases to $500K
    • 3) Widening the pool of businesses eligible to borrow – the program was previously targeted at smaller borrowers, but now businesses with up to 15K employees of $5B in annual revenue can take part.
    • The Fed is also evaluating how to allow non-profit organizations to get access to its lending programs
    • The holding would make Blackstone Group (BX -0.6%) the second-largest shareholder in Energy Transfer (ET +2.6%), behind the pipeline giant's founder and CEO Kelcy Warren, Bloomberg reports, citing a regulatory filing.
    • The stake includes units held by Harvest Fund Advisors, which Blackstone bought in 2017; Harvest owned 4% of ET's units at the end of last year.
    • The disclosure comes after Blackstone closed on its acquisition of pipeline operator Tallgrass Energy earlier this month; that deal dragged on for a year and started when BX bought a controlling stake in 2019.
    • Blackstone had invested in Energy Transfer's and bought a 32% stake in the Rover natural gas pipeline for ~$1.6B in 2017.
    • Comcast (NASDAQ:CMCSA) is 4.4% lower after posting a year-over-year revenue decline in its Q1 earnings, as media businesses took the brunt of COVID-19 impact even as broadband held up.
    • High-speed Internet net additions of 477,000 marked the company's best quarterly result in 12 years, while revenues for Sky ($4.52B) and NBCUniversal ($7.73B) fell short of expectations.
    • Meanwhile, with a cinema controversy roiling over comments made about theatrical release windows following the straight-to-home success of Trolls World Tour, Comcast's executive at the center has looked to clear things up on the company's conference call.
    • NBCUniversal CEO Jeff Shell said on the conference call that he expects consumers will return to theaters, but that premium video on demand will be part of the picture as a "complementary offer."
    • Most movies are being consumed at home, like it or not, Shell says. It's "not realistic" to expect Universal to change that; meanwhile, the Trolls sequel had cost a lot, was ready to go, and people "desperately" needed a children's offer in the pandemic.
    • Despite the recent digital success, "we will determine our future distribution approach on a title-by-title basis," Comcast CFO Mike Cavanagh says.
    • Cinema stocks are lower along with the broader market today: AMC -5.1%, Cinemark (NYSE:CNK-2.2%IMAX -2.2%, Marcus (NYSE:MCS-4.4%, Reading International (NASDAQ:RDI-7.3%, National CineMedia (NASDAQ:NCMI-1.4%. Regal owner Cineworld (OTC:CNWGY) is down 4.9% in London.
    • April Chicago PMI35.4 vs. 37.9 consensus, 47.8 prior. That's the weakest since March 2009.
    • Production dropped 19 points to the lowest since 1980, and New Orders took a steep dive as well.
    • Supplier Deliveries surged to the highest since April 1974 (meaning a big slowdown in getting stuff), but there was some anecdotal evidence of improvement in goods coming from China.

    Royal Dutch Shell (RDS-A) -11% on dividend cut and Q1 earnings.

    AMC Entertainment Holdings (NYSE:AMC-10%.

    Avis Budget Group (NASDAQ:CAR-8%.

    American Airlines Group (NASDAQ:AAL-8% on Q1 earnings.

    The Royal Bank of Scotland Group (NYSE:RBS-7%.

    ArcelorMittal (NYSE:MT-7%.

    The Goodyear Tire & Rubber (NASDAQ:GT-6% on Q1 earnings.

    • Following an end to the shutdown period in parts of the U.S., Macy's (NYSE:M) will open 68 department stores on Monday in the states where local governments allow, according to CNBC.
    • The department store operator plans to have almost all of its 775 stores reopened in six weeks if more restrictions are loosened.
    • While analysts expect weak store traffic initially as retail come back on line, the curbside pickup businesses are seen doing well.
    • Shares of Macy's are down 1.81% premarket.
    • Delta Air Lines (NYSE:DAL) says it expects to end Q2 with more than $12B in cash after raising $5B in new financing.
    • Delta also confirms it submitted an application for $4.6B in loans available to airlines under the CARES Act.
    • "We have until September to decide whether to accept the funding, and will only move forward if we need to add to our cash position later in the year."
    • With a focus on cash burn, Delta says it eliminated over 50% of total operating costs.
    • Shares of Delta are down 1.55% premarket.
    • SEC Form 8-K
    • Twitter (NYSE:TWTR) earlier knee-jerked to a 10%+ gain after releasing its Q1 earnings results and shareholder letter. The report showed ad revenue as eking out a year-over-year gain in Q1, but an unsurprising cratering (down 27% Y/Y) in ad spending in the last 20 days of March.
    • Speaking on the earnings call minutes ago, CFO Ned Segal said that to get a good idea of how April ad spend is going, look to March. "That gives you a good sense of what it's been like for us."
    • Shares are now lower by 4.35% in premarket action.

    So much winning – we're tired of it…


  23. OSTK is winning:

    • Overstock.com (NASDAQ:OSTK) rises more than 25% in pre-market trading after beating analyst expectations for earnings and revenue for the quarter ended March 31, while disclosing that April-to-date retail sales are up 120% y/y. Shares are on pace to open at their highest since September 2019.
    • Sales strength was mostly attributed to home furnishings and "benefited from an increased demand" by "customers looking to shop from the safety of their homes."
    • Discussing the logistics in the pandemic, the co. in the earnings statement added, "Our online-only platform and partner network of more than 4,500 drop-ship facilities has allowed us to meet this surge in demand without significant operational disruption. However, we have faced challenges with increased volume through our customer service channels and with capacity issues from our shipping carriers."
    • As far as the co.'s blockchain efforts were concerned, they saw "little interruption at tZERO and its subsidiaries, but we recognize potential risks to the platform due to market depression, volatility, and delays in trading and capital raises. Most of our Medici Ventures blockchain companies have seen little disruption; some are working to solve problems exacerbated by the global pandemic.''

    • Molson Coors (NYSE:TAP) says worldwide brand volume and financial volume decreased globally in Q1, with Europe declines driven by impacts of the coronavirus pandemic. The company notes financial volume was further impacted in North America by unfavorable shipment timing in the U.S., including brewery downtime associated with the Milwaukee tragedy, share declines, as well as lower contract brewing volume.
    • Underlying COGS per hectoliter increased 3.3% in constant currency during the quarter, primarily driven by volume deleverage and cost inflation, partially offset by cost savings.
    • Molson's COVID-19 actions include reducing capital expenditures, substantially reducing discretionary spending, furloughing certain employees in its Europe business and North America hospitality businesses, shifting marketing investments to focus on key media platforms and utilizing the revolving credit facility when necessary.
    • Shares of Molson Coors are down 4.70% premarket to $44.00.
    • Previously: Molson Coors EPS beats by $0.02, misses on revenue (April 30)
    • Intercontinental Exchange (NYSE:ICEQ1 adjusted EPS of $1.28 beats the average analyst estimate of $1.24 and increased from 92 cents in the year-ago quarter.
    • Marks its strongest quarter ever with record revenue and double-digit EPS growth.
    • Q1 net revenue of $1.56B vs. $1.54B consensus and up 23% Y/Y.
    • Trading and Clearing segment revenue jumped 44% Y/Y to $883M, and Data and Listings segment revenue of $676M increased 3% Y/Y.
    • 2020 and Q2 guidance: Sees Q2 data revenue of $565M-$570M.
    • Sees Q2 adjusted operating expenses of $575M-$585M and non-operating expense of $50M-$55M.
    • Sees full-year 2020 adjusted operating expenses of $2.32B-$2.37B.
    • Sees year capex of $300M-$330M.
    • Conference call at 8:30 AM.
    • Previously: IntercontinentalExchange EPS beats by $0.04, beats on revenue (April 30)
    • Dunkin' Brands (NASDAQ:DNKN) reports a 2% drop in comparable sales for the Dunkin' Donuts chain in the U.S. vs. -1.3% consensus. The negative comp came after growth of 3.5% in the first 10 weeks of the quarter was offset by a plunge of 19.4% in the last three weeks of the quarter.
    • International comparable sales fell 7.1% during the quarter vs. -2.8% consensus.
    • The company's adjusted operating margin came in at 32.8% of sales vs. 32.5% consensus.
    • Dunkin' Brands suspended its regular dividend program, which it says will result in cash savings of approximately $33M in Q2 to reinforce an already strong balance sheet.
    • "Additionally, due to this uncertainty and the impact of COVID-19 on financial and operational results, we are withdrawing both our fiscal 2020 and long-term growth targets."
    • Shares of DNKN are down 1.85% premarket to $63.50.
    • Previously: Dunkin' Brands Group EPS beats by $0.08, beats on revenue (April 30)
    • Kraft Heinz (NASDAQ:KHC) reports organic growth jumped 6.2% in Q1 to edge past the consensus mark of +6.1%. Growth in at-home consumption during the quarter more than offset an unfavorable impact from retail inventory reductions and lower foodservice shipments.
    • Pricing was up 1.6% during the quarter and volume/mix contributed 4.6% percentage points of growth.
    • Comparable sales were up 6.4% in the U.S., 2.2% in Canada and 6.9% in international markets.
    • The company generated adjusted EBITDA of $1.42B vs. $1.43B a year ago and $1.36B consensus.
    • CEO update: "The impact of the COVID-19 pandemic on the company's full-year 2020 results remains uncertain. In each of the company's reporting segments, the company's Q2 2020 outlook reflects, to varying degrees, incremental demand from retail customers due to an increase in at-home consumption, particularly in developed markets, as well as reduced demand in foodservice channels on a global basis. Currently, the company believes low to mid-single-digit Organic Net Sales growth and mid-single-digit constant-currency Adjusted EBITDA growth versus the prior year period is a reasonable expectation for Q2 performance."
    • Shares of Kraft are up 1.90% premarket to $31.11.
    • Previously: Kraft Heinz EPS beats by $0.04, beats on revenue (April 30)

  24. Who in this chat community has a Tesla car?


  25. Well I fell asleep on the couch but it looks like everyone else did too.

    Markets drifting back up, oil with a big pop to $19.37 before calming down.  

    Weaker Dollar is holding up the market and the commodities at the moment

    Speaking of TSLA, not a good day now.  

    Hey look, it's me:

    Cut me down to 10 mins!


  26. Editing/Phil – heheh – 10 minutes from what, 2 hours? A travesty!



  27. PSW/Masks

    sorry for asking this again. It looks like many counties are ordering usage of face mask now. Phil can provide the masks but that is lot of quantity. I guess KN95 or N95 mask will help. I have found website..www.childsafemask.com for children.

    thanks as always

    regards


  28. Editing/Snow – We talked for about 30 mins and I thought they'd use 20 mins – 10 is a bit of a rip-off.  

    Oh wait, found 5 more mins!

    Masks/Pat – Already gone, my supplier is scrambling to get more.  These Governments mandate mask-wearing but don't bother securing the masks (and create the shortage by doing so).  


  29. AMZN misses!  

    • Amazon (NASDAQ:AMZN): Q1 GAAP EPS of $5.01 misses by $1.10.
    • Revenue of $75.5B (+26.5% Y/Y) beats by $1.41B.
    • Total revenue in North America was $46.1B vs. $44.3B consensus, while international revenue was $19.1B vs. $19.1B.
    • AWS revenue came in at $10.2B vs. $10.3B consensus.
    • Shares -2.75%.
    • Press Release

    Revenue beat is bullish, initial reaction is wrong.

    • Gilead Sciences (NASDAQ:GILD): Q1 Non-GAAP EPS of $1.68 beats by $0.12; GAAP EPS of $1.22 misses by $0.03.
    • Revenue of $5.55B (+5.1% Y/Y) beats by $110M.
    • Shares -0.7%.
    • Press Release
    • Crude oil prices (CL1:COMcontinued their comeback in volatile trading today, lifted by hopes for higher fuel consumption as COVID-19 lockdown measures are rolled back.
    • June WTI settled +25.1% to $18.84/bbl following yesterday's 22% surge, but the front-month contract still lost 8% for the month; June Brent, which expired at the end of today's session, ended +12.1% at $25.27/bbl, with the front-month contract closing the month 11.1% higher.
    • The S&P energy sector (XLE -2.3%) is not going along for the ride today in a round of apparent profit-taking after its huge run, which critics suggest was unjustified given the weak industry and sector fundamentals.
    • "Investors continue to see a steady stream of headlines of crude production cuts," says Oanda's Edward Moya. "Big oil is starting to have landmark moments that signal deeper production cuts across the globe will be happening quickly."
    • But Citigroup analysts say the "worst is likely yet to come" for the oil market, with global storage near its limits even as a recovery in demand starts.
    • ~3M bbl/day of supply has been halted in North America as prices crash, but Citi thinks it is not nearly enough to balance the market.
    • The firm foresees a "sharp increase" in global demand by the middle of Q3, though recovery will still only be at 80%-85% of last year's levels, and jet fuel consumption will not rebound to prior levels until well into 2022.
    • In recent weeks, Wells Fargo (WFC -3.1%) revived a special group for bad energy loans as it braces for the fallout from the collapse in oil prices, Reuters reports, citing people familiar with the matter.
    • The team, which is part of the credit-resolution group, includes many bankers who have worked with the same oil and gas producers at WFC's investment bank.
    • They're working alongside bankruptcy specialists who have been reassigned to focus solely on energy to help the bank handle the expected surge in restructurings.
    • Offshore driller Valaris (VAL +6.5%) says it could take up to two years to reactivate idle equipment, as contracts dry up during the rout in oil prices.
    • Valaris posted a $3B net loss for Q1 compared to a $216M net loss in Q4 2019, and revenues fell 11% Q/Q to $457M as fleet utilization declined to 59% from 61% in the prior quarter.
    • The company says it will put aside several rigs, including three drillships, a semisubmersible and five jackups for eventual return to service and retire 11 other drillships, prompting nearly $3B in asset impairment charges for the quarter.
    • Valaris says it plans to reactivate the nine rigs when dayrates and contract durations improve, but it does not expect that to happen for two years.
    • "This challenging environment is also impacting existing contracts for offshore drillers as operators move to cancel and delay well programs, along with asking for pricing concessions and other modifications to contract terms," CEO Tom Burke says.
    • The March Prices Received Index 2011 Base, at 93.3, +3.1% from Feb. but was unchanged from March 2019.
    • The crop production index +3.1% M/M to 88.7; the livestock index was +2.9% M/M at 97.4.
    • Food grains flat M/M and +3.0% Y/Y.
    • Feed grains -2.4 M/M and +1.7% Y/Y.
    • Oilseeds -1.2% M/M and -0.3% Y/Y.
    • Fruits and nuts +9.8% M/M and +14.0% Y/Y.
    • Vegetable and melon +9.6% M/M and -6.7% Y/Y.
    • Other crop -1.0% M/M and -8.7% Y/Y.
    • High-yield ETFs are winning over more investors after the Federal Reserve expanded its bond-buying program to includes some recently downgraded high-yield debt and the ETFs that track them.
    • Junk bond ETFs have pulled in $5.2B of inflows this month, according to Bloomberg data, with BlackRock's iShares iBoxx High Yield Corporate Bond ETF (HYG -0.3%) attracting $3.6B, which would be a monthly record for the ETF.
    • State Street's SPDR Bloomberg Barclays High Yield Bond ETF (JNK -0.3%) has taken in $1.3B. Xtrackers USD High Yield Corporate Bond ETF (HYLB -0.3%) appears set for its best month ever.
    • Including so-called fallen angel bonds in the Fed program helps ease fears about the recently investment-grade securities.
    • “Even if they don’t end up buying a ton of high yield, just the fact it was mentioned gives investors a lot of comfort, if they know the Fed is going to be potentially in there buying as well,” said Brian Price, head of investment management for Commonwealth Financial Network.
    • With 3.84M more people filing for unemployment this week, bringing the tally up to 30.2M in the last six weeks, and mortgage rates at an all-time low, mortgage-related stocks are taking a beating again.
    • Mortgage servicers, caught between consumers who can't pay mortgages and bondholders who still need to get paid, are particularly hard hit — New Residential (NRZ -6.4%), Ocwen Financial (OCN -6.5%), Mr. Cooper (COOP -3.0%), and PennyMac Financial (PFSI -4.8%).
    • Mortgage insurers decline as well — Radian (RDN -4.4%), MGIC Investment (MTG -4.8%), Essent Group (ESNT -4.4%), and Genworth (GNW -1.9%).
    • Mortgage REITs, too, are dropping after rising for three sessions. iShares Mortgage Real Estate Capped ETF (BATS:REM) slides 3.7%.
    • Among mREITs, AGNC (AGNC -0.4%) and Annaly Capital (NLY -0.4%) are faring better than most as they both said their book value per share have improved after the end of Q1.
    • Those that aren't getting any love include: MFA Financial (MFA -6.6%), Invesco Mortgage (IVR -8.0%), Western Asset Mortgage (WMC -6.0%), Arlington Asset (AI -4.7%).
    • Capstead Mortgage (CMO -12.0%) gets hammered after reporting that BV sank 30% during Q1; though it observed 4%-5% improvement since the quarter-end.
    • Commercial mortgage REITs also decline — Starwood Property (STWD -4.5%), Colony Credit (CLNC -12.0%), Ladder Capital (LADR -2.4%), Apollo Commercial (ARI -7.9%), Granite Point (GPMT -8.7%).
    • BTIG keeps a Neutral rating on Yum Brands (YUM -1.0%) despite the restaurant company's reliance on the franchise model and YTD share price weakness.
    • "While we expect Yum! to lean on its balance sheet and asset-light business during this challenging environment,the current disruption appears to be exacerbating underlying challenges that Pizza Hut was already facing," advises analyst Peter Saleh.
    • Saleh also says the current level of temporary closures and uncertain outlook for most re-openings suggest a longer sales downturn than previously expected.
    • "We view the lack of detail regarding current sales trends by brand, cash burn metrics and unit development expectations as evidence that this recovery could lag the overall industry," he warns.
    • Greenlight Capital's David Einhorn has a few questions for Elon Musk following the Tesla (TSLA +0.8%) Q1 report.
    • Einhorn wants to know why the accounts receivable balance owed by debtors was high at the end of the quarter despite the shutdown at the end of March.
    • He also queries why the automotive gross margin held steady with F/X pressures, production interruptions, a lower average selling price and an unfavorable vehicle mix all working against it.
    • It was only five months ago that he told Musk he was beginning to wonder whether the company's accounts receivable exist.
    • Usually Musk doesn't leave Einhorn's taunts alone.

  30. AAPL is amazing!

    • Apple (NASDAQ:AAPL): Q2 GAAP EPS of $2.55 beats by $0.29.
    • Revenue of $58.31B (+0.5% Y/Y) beats by $3.67B.
    • Shares +1.9%.
    • Press Release
    • Whirlpool (NYSE:WHR) is higher after posting a 0.3% drop in organic sales in Q1, which stacks up favorably considering the impact of the pandemic.
    • The company says ongoing EBIT was $266M vs. $298M a year ago after posting a negative mark for the European business.
    • CFO update: "During the quarter, we continued to build on our multi-year efforts to strengthen our balance sheet and ensure the long-term health of the business. We took aggressive actions to protect cash and build liquidity to solidify our ability to manage through the ongoing COVID-19 pandemic."
    • Looking ahead, Whirlpool sees full-year revenue growth of -13% to -18% and a 10% to 15% drop in organic sales.
    • Shares of Whirlpool are up 2.47% AH to $114.50.
    • Previously: Whirlpool EPS beats by $0.30, beats on revenue (April 30)
    • MGM Resorts (NYSE:MGM) slips in AH trading after pulling the Band-aid for a quarter that included casino closings in Macau and the U.S.
    • Revenue was down 21% for Las Vegas Strip revenue properties and 10% for regional casinos. MGM China saw a 63% drop in revenue during the quarter.
    • Consolidated adjusted EBITDAR plunged 61% to $295M, primarily attributable to the temporary suspension of casino operations.
    • CFO statement: "We continue to implement an extensive number of initiatives to optimize our cash position, and currently estimate that while all of our properties are closed in the U.S., our domestic cash outflows, including interest, taxes, and rent (net of dividends received from MGP), are approximately $270 million per month."
    • MGM pulled its previous 2020 outlook due to the uncertainty around the pandemic.
    • MGM -0.95% AH to $16.72.
    • Visa (NYSE:Vgains 1.1% in after-hours trading after fiscal Q2 adjusted EPS of $1.39 beats the consensus of $1.35.
    • Notes that underlying business drivers slowed during the quarter, with significant declines in the month of March, as a result of the COVID-19 pandemic.
    • Payments volume for the quarter ended March 31, 2020 increased 5% Y/Y in constant dollars, with cross-border volume falling 2% and processed transactions up 7%.
    • Net revenue for the quarter ended March 31, 2020 came in at $5.85B, beating the $5.75B consensus; increased 7% Y/Y.
    • Q2 total operating expenses of $1.93B, up 3% on non-GAAP basis.
    • Q2 Visa credit and debt total volume of $2.79T vs. $3.08T in Q1.
    • Isn't providing fiscal full-year 2020 outlook.
    • Conference call at 5:00 PM ET.
    • Previously: Visa EPS beats by $0.04, beats on revenue (April 30)
    • Western Digital (NASDAQ:WDCfalls 5.3% after reporting a FQ3 revenue beat and EPS miss for the period ending on March 29, which featured little coronavirus damage.
    • Coronavirus impact: Notebook solutions had greater than expected demand due to the remote work shift, which brought desktop solutions down. Smart video hard drive demand was also down. Mobile flash bit shipments remained "modest."
    • Q3 revenue breakdown: Client Devices, $1.8B (+13% Y/Y); Data Center, $1.5B (+22%); Client Solutions, $821M (+2%).
    • Operating cash flow totaled $142M with FCF of $176M. WDC ended the quarter with $2.9B in cash and equivalents.
    • WDC is suspending its dividend to improve its leverage ratios.
    • Q4 guidance sees revenue of $4.2-4.5B (consensus: $4.3B) and EPS of $1-1.40 (consensus: $1.22).
    • Earnings call starts at 4:30 PM with a webcast here.
    • Press release.
    • US Steel (NYSE:X): Q1 Non-GAAP EPS of -$0.73 beats by $0.09; GAAP EPS of -$2.30 misses by $1.51.
    • Revenue of $2.75B (-21.4% Y/Y) misses by $40M.
    • Shares -2.2%.
    • Press Release
    • Amazon (NASDAQ:AMZN) is cooling off just a bit after running to a new high today. The e-commerce giant's estimate of ~$4.0B of COVID-19 costs in Q2 appears to be drawing notice.
    • Total revenue in North America in Q1 was $46.1B vs. $44.3B consensus, while international revenue was $19.1B vs. $19.1B. AWS revenue came in at $10.2B vs. $10.3B consensus.
    • Operating income of was reported at $3.99B (-9% Y/Y) vs. the company's guidance range of $3.0B to $4.2B and $4.07B consensus. Operating margin was 5.3% of sales vs. 5.5% consensus.
    • Free cash flow increased to $24.3B for the trailing twelve months, compared with $23.0B for the trailing twelve months a year ago.
    • Looking ahead, Amazon expects Q2 revenue of $75.0B to $81.0B vs. $77.9B consensus and operating income of -$1.5B to +$1.5B as COVID-19 costs cut in.
    • Shares of Amazon are down 4.32% in AH trading to $2,371.40.
    • Previously: Amazon EPS misses by $1.10, beats on revenue (April 30)
    • Gilead Sciences (NASDAQ:GILDQ1 results:
    • Revenues: $5,548M (+5.1%); product sales: $5,467M (+5.1%); HIV: $4,134M (+14.3%).
    • $200M in sales resulted from customer inventory builds during the pandemic, expected to reverse in the coming quarters.
    • Top sellers: Biktarvy: $1,693M (+113.5%); Genvoya: $824M (-18.8%); Truvada: $406M (-33.0%); Odefsey: $409M (+3.0%); Descovy: $458M (+33.9%); Yescarta: $140M (+45.8%).
    • Net income: $1,551M (-21.5%); non-GAAP net income: $2,139M (flat); EPS: $1.22 (-20.8%); non-GAAP EPS: $1.68 (+0.6%).
    • 140K courses of remdesivir will be manufactured by the end of May, more than 1M by year-end.
    • 2020 guidance: Pandemic disruptions expected to negatively impact operations, but the specifics are uncertain at present.
    • Gilead Sciences EPS beats by $0.12, beats on revenue
    • El Pollo Loco (NASDAQ:LOCO): Q1 Non-GAAP EPS of $0.16 beats by $0.06; GAAP EPS of $0.10 in-line.
    • Revenue of $105.16M (-3.5% Y/Y) beats by $2.65M.
    • Press Release
    • Public Storage (NYSE:PSA): Q1 FFO of $2.58 beats by $0.01.
    • Revenue of $716.08M (+3.9% Y/Y) beats by $6.08M.
    • Press Release

  31. trump saying china could have contained the virus if they wanted to. If the virus is so easy to contain why didn't he do it????????



  32. Texas Oil Boomtowns Devastated by Coronavirus: Photos